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5e4f7c58-d001-45c9-a3d3-9c6c1809f113

MT Opticom v Holsinger

N/A

DA 15-0728

Montana

Montana Supreme Court

DA 15-0728 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 107N MONTANA OPTICOM, LLC, Plaintiff and Appellant, v. HOLSINGER P.C., JOHN HOLT, and WILLIAM R. COLLIER, Defendants and Appellees. APPEAL FROM: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DV-15-507A Honorable Holly Brown, Presiding Judge COUNSEL OF RECORD: For Appellant: John H. Tarlow, Matt J. Pugh, Tarlow & Stonecipher, PLLC, Bozeman, Montana For Appellees: David M. Wagner, Matthew M. Hibbs, Crowley Fleck, PLLP, Bozeman, Montana Submitted on Briefs: April 13, 2016 Decided: May 10, 2016 Filed: __________________________________________ Clerk May 10 2016 Case Number: DA 15-0728 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 Montana Opticom appeals from the District Court’s order filed October 23, 2015, dismissing the case. We affirm. ¶3 On July 1, 2015, Opticom filed a complaint in the Montana Eighteenth Judicial District Court in Gallatin County. Opticom asserted claims against Holsinger, Holt and Collier (collectively, Holsinger) arising from two contracts between the parties. Holsinger moved to dismiss because of a June 23, 2015 action brought by Holsinger against Opticom and others in the Court of Common Pleas, Allegheny County, Pennsylvania. The District Court dismissed the Montana action as a matter of comity, in favor of the previously-filed action in Pennsylvania. A district court may decline to exercise jurisdiction over an action, as a matter of comity, in favor of a previously-filed action in another jurisdiction. The “first-to-file” rule is a matter of judicial administration designed to promote efficiency and avoid conflicting judgments that a district court applies as a matter of sound judicial discretion. Wamsley v. Nodak Mut. Ins. Co., 2008 MT 56, ¶¶ 30-33, 341 Mont. 467, 178 P.3d 102. 3 ¶4 The District Court examined the two actions, finding that the broader action in Pennsylvania included claims involving the same contracts between Opticom and Holsinger. While Holt and Collier are not named individually in the Pennsylvania action, they are officers of Holsinger P.C. and Opticom could bring claims against them individually in that action. The District Court concluded that there was identity of parties and issues between the two cases sufficient to permit application of the first-to-file rule. ¶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 the Court, the issue in this case presents a question of judicial discretion and there clearly was not an abuse of discretion. ¶6 Affirmed. /S/ MIKE McGRATH We Concur: /S/ LAURIE McKINNON /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA

May 10, 2016

6f62328d-dc76-452d-a65b-9d5cd52fe12c

Denturist Assoc. v Montana DOL

2016 MT 119

DA 15-0580

Montana

Montana Supreme Court

DA 15-0580 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 119 DENTURIST ASSOCIATION OF MONTANA, Plaintiff and Appellant, v. STATE OF MONTANA, DEPARTMENT OF LABOR AND INDUSTRY; and BOARD OF DENTISTRY, Defendants and Appellees. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. CDV-2013-924 Honorable Kathy Seeley, Presiding Judge COUNSEL OF RECORD: For Appellant: Rob Cameron, Christensen & Prezeau, PLLP; Helena, Montana Nathan Bilyeu, Hattersley & Walter, PLLP; Helena, Montana For Appellees: Mark Jette, Special Assistant Attorney General, Department of Labor and Industry; Helena, Montana Submitted on Briefs: March 23, 2016 Decided: May 24, 2016 Filed: __________________________________________ Clerk May 24 2016 Case Number: DA 15-0580 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 Denturist Association of Montana, on behalf of Carl Brisendine, appeals from an order entered by the First Judicial District Court, Lewis and Clark County, granting summary judgment to the Defendants. We affirm in part, reverse in part, and remand for further proceedings. ¶2 We address the following issue: Did the District Court err in concluding Brisendine’s claims were barred by res judicata? PROCEDURAL AND FACTUAL BACKGROUND ¶3 The Denturist Association of Montana (Association), on behalf of denturist Carl Brisendine (Brisendine), filed suit against the Board of Dentistry (Board), challenging the validity of A.R.M. 24.138.2302(1)(j) (Rule J), the latest in a long line of legal disputes between the two. See Board of Dentistry v. Kandarian, 248 Mont. 444, 813 P.2d 409 (1991); Brisendine v. Dept. of Commerce, 253 Mont. 361, 833 P.2d 1019 (1992); Christenot v. State, 272 Mont. 396, 901 P.2d 545 (1995); Wiser v. State, 2006 MT 20, 331 Mont. 28, 129 P.3d 133 (Wiser I); Wiser v. Board of Dentistry, 2011 MT 56, 360 Mont. 1, 251 P.3d 675 (Wiser II). ¶4 Included in both Wiser I and Wiser II, either implicitly or explicitly, was the claim that the Board’s promulgation of Rule J was invalid because it conflicted with statute. Wiser II, ¶ 16. The Wiser I plaintiffs—comprised of every denturist in Montana—made their claims “on behalf of the profession of denturitry.” Wiser II, ¶ 18. The Wiser I plaintiffs lost their challenge to the Board’s authority to promulgate rules regulating 3 denturitry. The Wiser II plaintiffs, comprised of a smaller group of denturists, attempted to distinguish themselves from the Wiser I plaintiffs, but the Court saw no distinction in their capacity to challenge the Board’s promulgation of Rule J as individuals rather than as representatives of a group. Wiser II, ¶ 18. The Court barred the Wiser II plaintiffs’ claims on res judicata grounds. Wiser II, ¶ 18. ¶5 In this case, Brisendine’s complaint contains three counts. Count I alleges Rule J is discriminatory and restrains trade in violation of § 37-1-131(1)(a)(ii), MCA, which provides every regulatory board will: Apply the standards and rules referred to in subsection (1)(a)(i) in a manner that does not discriminate against any person licensed by the board with regard to how the standards and rules are applied to other persons licensed by the board and that does not restrain trade or competition unless necessary to protect public health and safety; Count I further alleges the Board violated § 37-1-131(1)(a)(ii), MCA, by discriminatorily applying its disciplinary rules: being unduly harsh on denturists while giving leniency to dentists. Counts II and III allege Rule J is invalid because it conflicts with various statutes. ¶6 Brisendine moved for summary judgment on Count II, and the Board filed a cross-motion for summary judgment on all counts. The District Court, citing Wiser I and II, held Brisendine’s claims were barred by res judicata as a matter of law. Brisendine appeals. 4 STANDARD OF REVIEW ¶7 An order on summary judgment is reviewed de novo, applying the same criteria as the district court. Lorang v. Fortis Ins. Co., 2008 MT 252, ¶ 36, 345 Mont. 12, 192 P.3d 186. Under M. R. Civ. P. 56(c), summary judgment is appropriate where there is a complete absence of genuine issues of material fact, and the moving party is entitled to judgment as a matter of law. Lorang, ¶ 37. ¶8 A district court’s application of res judicata or collateral estoppel is reviewed de novo. Textana, Inc. v. Klabzuba Oil & Gas, 2009 MT 401, ¶ 62, 353 Mont. 442, 222 P.3d 580; Brilz v. Metro. Gen. Ins. Co., 2012 MT 184, ¶ 13, 366 Mont. 78, 285 P.3d 494. DISCUSSION ¶9 Did the District Court err in concluding Brisendine’s claims were barred by res judicata? ¶10 A final judgment can have a preclusive effect on future litigation by way of either claim preclusion (res judicata) or issue preclusion (collateral estoppel). See Baltrusch v. Baltrusch, 2006 MT 51, ¶¶ 15-18, 331 Mont. 281, 130 P.3d 1267. The two doctrines prevent parties from waging piecemeal, collateral attacks on judgments, thereby upholding the judicial policy that favors a definite end to litigation. Baltrusch, ¶ 15. Claim preclusion and issue preclusion also “conserv[e] judicial resources and encourag[e] reliance on adjudication by preventing inconsistent judgments.” Baltrusch, ¶ 15. Although similar, the two doctrines are not the same. ¶11 Under claim preclusion, a judgment on the merits in a prior suit bars a second suit involving the same parties or their privies based on the same cause of action. Baltrusch, 5 ¶ 15; see also Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 n.5 (1979). This includes those issues that could have been litigated in the prior cause of action. Wiser II, ¶ 17. The elements of claim preclusion are: (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; (4) the capacities of the parties are the same to the subject matter and issues between them; and (5) a final judgment on the merits has been entered. Wiser II, ¶ 9. ¶12 Issue preclusion, on the other hand, bars the same parties or their privies from relitigating issues in a second suit that is based upon a different cause of action. Baltrusch, ¶ 15; see also Parklane Hosiery, 439 U.S. at 326 n.5. The elements of issue preclusion are: (1) the identical issue raised was previously decided in a prior adjudication; (2) a final judgment on the merits was issued in the prior adjudication; (3) the party against whom collateral estoppel is now asserted was a party or in privity with a party to the prior adjudication; and (4) the party against whom preclusion is asserted must have been afforded a full and fair opportunity to litigate any issues which may be barred. Baltrusch, ¶ 18. Present in both claim preclusion and issue preclusion is the element of privity, upon which this case turns. ¶13 With respect to Count I, Brisendine argues he has no privity with the plaintiffs in Wiser I and II, and that Count I represents an altogether different claim than those presented in either of those cases. With respect to Counts II and III, Brisendine argues only that he has no privity with the plaintiffs in Wiser I and II, conceding the other 6 elements are met. The Board responds that privity exists between the Wiser I and II plaintiffs and Brisendine because the interests between the two are so closely aligned that the Wiser I and II plaintiffs were the virtual representatives of Brisendine. We agree with the Board that privity exists, but agree with Brisendine that Count I represents a different cause of action, with a new issue, than present in Wiser I or II. ¶14 The application of claim or issue preclusion to a party that was not a party in the prior proceeding, otherwise known as nonparty preclusion, conflicts with the “deep-rooted historic tradition that everyone should have his own day in court.” Taylor v. Sturgell, 553 U.S. 880, 892-93 (2008) (internal quotations and citation omitted). Privity, however, is an exception to the general rule against nonparty preclusion that alleviates due process concerns. Sturgell, 553 U.S. at 893. The concept of privity in the context of a judgment “applies to one whose interest has been legally represented at trial.” Holtman v. 4-G’s Plumbing & Heating, 264 Mont. 432, 437, 872 P.2d 318, 321 (1994); see also Sturgell, 553 U.S. at 894 (“a nonparty may be bound by a judgment because she was ‘adequately represented by someone with the same interests who [wa]s a party’ to the suit.”) (citation omitted). Privity exists where “two parties are so closely aligned in interest that one is the virtual representative of the other . . . .” Nordhorn v. Ladish Co., 9 F.3d 1402, 1405 (9th Cir. 1993); see also United States v. ITT Rayonier, Inc., 627 F.2d 996 (9th Cir. 1980) (EPA could not sue to enforce Water Pollution Control Act, where same issue had been litigated in state court by the Washington Department of Ecology). Although our precedent regarding privity in this context is limited, other 7 courts instruct that privity is a “factual determination of substance, not mere form” that requires a “consideration of the realities of litigation.” Stichting Ter Behartiging Van De Belangen Van Oudaandeelhouders in Het Kapitaal Van Saybolt Int’l B.V. v. Phillippe S.E. Schreiber, 327 F.3d 173, 186 (2d Cir. 2003) (citation omitted); National Fuel Gas Dist. Corp. v. TGX Corp., 950 F.2d 829, 839 (2d Cir. 1991) (citation and internal quotations omitted). ¶15 Applying the above rules here, we conclude that privity exists between the litigants in Wiser I and II and Brisendine. The Wiser I litigants included every denturist in Montana, and they brought their suit “on behalf of the profession of denturitry.” Wiser II, ¶ 18. Even though not a denturist at the time of the earlier litigation, Brisendine’s interests are “closely aligned,” Nordhorn, 9 F.3d at 1405, if not exactly aligned, with the Wiser I and II denturists who made the same challenge that Brisendine now makes: the Board’s promulgation of Admin. R. M. 24.138.2302(1)(j) is invalid because it conflicts with statute. See Wiser II, ¶ 16. We are hard pressed to think of a more appropriate application of claim preclusion, one that serves to “conserv[e] judicial resources,” Baltrusch, ¶ 15, than the prevention of repeated litigation by members of the same profession bringing the same challenges to the same laws. Otherwise, every new denturist could again bring the same legal challenge. 8 ¶16 Because privity exists and the other elements of claim preclusion are not contested with respect to Counts II and III, we affirm the District Court’s grant of summary judgment to the Board on those claims on res judicata grounds.1 ¶17 Count I of the Complaint alleges the Board has engaged in a pattern of systemic discrimination, restraint of trade, and unfair anti-competitive practices in violation of § 37-1-131(1)(a)(ii), MCA. This is an entirely different claim than those made in either Wiser I or II. First, part of Brisendine’s claim here is that the Board has applied its disciplinary rules in a discriminatory fashion by aggressively pursuing perceived violations by denturists, while showing leniency to dentists. This is a highly specific factual claim that includes allegations of misconduct occurring in 2014, an altogether different subject matter than the claims in Wiser I and II. Second, § 37-1-131(1)(a)(ii), MCA, was enacted after Wiser I and II. Although the Denturists claimed in Wiser I that the Board had engaged in restraint of trade in violation of the Montana Unfair Trade Practices and Consumer Protection Act, we held the MUTPA did not apply to state agencies. Wiser I, ¶¶ 32-33. Thus, until the passage of § 37-1-131(1)(a)(ii), MCA, denturists were practically precluded from litigating any instance of restraint of trade by the Board. Elements 2 and 3 of claim preclusion are therefore not satisfied with respect 1 Brisendine argues that the Denturist Association has associational standing to bring this suit on his behalf because, according to Brisendine, his claims are not barred by res judicata, and thus he has standing to bring the claim, which he may confer on the Denturist Association. Brisendine appears to confuse the concept of standing, which requires an allegation of past, present, or threatened injury, Chipman v. Nw Healthcare Corp., 2012 MT 242, ¶¶ 25-26, 366 Mont. 450, 288 P.3d 193, with the concept of res judicata, which is an affirmative defense. See Mont. R. Civ. P. 8(c)(1). One can have standing to bring a suit, only to succumb to the affirmative defense of res judicata, as is the case here on Counts II and III. In essence, that the Denturist Association has associational standing to bring this suit on behalf of Brisendine is not in dispute. 9 to Count I because the alleged conduct by the Board represents a new cause of action, and contains a new issue, that Brisendine has had no opportunity to litigate. See Wiser II, ¶ 17 (“a party . . . is prohibited from relitigating a claim that he or she has already had an opportunity to litigate.”) (citation omitted) (emphasis added). Issue preclusion is likewise inapplicable. Although issue preclusion may apply in cases where the causes of action are different, it contains an element similar to claim preclusion that requires the issues to be the same. As stated above for purposes of claim preclusion analysis, Count I presents a different issue than any of those litigated in Wiser I or II. Element 1 of issue preclusion is therefore not met for the same reason. The District Court thus erred when it granted summary judgment to the Board on Count I, and Brisendine is entitled to pursue this claim. ¶18 Affirmed in part, reversed in part, and remanded for further proceedings. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ JAMES JEREMIAH SHEA /S/ LAURIE McKINNON /S/ BETH BAKER

May 24, 2016

aae9f475-a08a-4e4c-82ab-ebb5e4829a2f

Fire Ins. Exchange v. Weitzel

2016 MT 113

DA 15-0574

Montana

Montana Supreme Court

DA 15-0574 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 113 FIRE INSURANCE EXCHANGE, a Reciprocal or inter-insurance exchange, Petitioner and Appellant, v. JAKE WEITZEL, and KEVIN GROFF, as Personal Representative of the Estate of Ronny S. Groff, Deceased, Respondents and Appellees. APPEAL FROM: District Court of the Twenty-First Judicial District, In and For the County of Ravalli, Cause No. DV 14-279 Honorable James A. Haynes, Presiding Judge COUNSEL OF RECORD: For Appellant: Nicholas J. Pagnotta, Amanda Z. Duman, Williams Law Firm, P.C., Missoula, Montana For Appellee Jake Weitzel: Bryan L. Spoon, Spoon Gordon Ballew P.C., Missoula, Montana For Appellee Estate of Ronny Groff: Terrance P. Perry, Datsopoulos MacDonald & Lind, P.C., Missoula, Montana Submitted on Briefs: March 16, 2016 Decided: May 17, 2016 Filed: __________________________________________ Clerk May 17 2016 Case Number: DA 15-0574 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Fire Insurance Exchange (FIE) appeals from an order issued by the Twenty-First Judicial District Court, Ravalli County, granting summary judgment in favor of Jake Weitzel (Weitzel). This case arises out of a declaratory judgment action to determine whether there is coverage for claims brought in an underlying action against Weitzel by the Estate of Ronny Groff (Estate). The underlying complaint alleges that Weitzel gained the trust of Ronny Groff (Ronny), an elderly man, as his home care services provider and then wrongfully absconded with his property and assets over the course of a number of years, ultimately causing economic loss to the Estate. Weitzel tendered this litigation to FIE under a homeowner’s insurance policy covering claims for personal injury, bodily injury, and property damage. FIE accepted responsibility for the litigation under a reservation of rights. ¶2 Shortly thereafter, FIE filed suit in Ravalli County District Court seeking declaratory relief. FIE claimed that it owed no duty to defend Weitzel against the Estate under the terms of the homeowner’s policy. On cross-motions for summary judgment, the District Court denied FIE’s motion and granted Weitzel’s motion. We reverse. FIE had no duty to defend Weitzel because the complaint cannot be construed to give rise to a claim under the terms of the policy. ¶3 We address the following issue on appeal: whether the District Court erred by concluding that FIE had a duty to defend Weitzel under the terms of the insurance policy. 3 FACTUAL AND PROCEDURAL BACKGROUND ¶4 The Estate filed a complaint against Weitzel in the underlying litigation on October 22, 2013. The complaint alleged that Weitzel was hired by Ronny’s children to provide in-home care services to Ronny and his ailing wife beginning in 2010 and that Weitzel provided these services to Ronny until Ronny’s death in July 2013. The Estate alleged that shortly after Ronny’s wife passed away in January 2011, Weitzel “began to wrongfully exert such degree of control over Ronny in his feeble state that she was able to exploit, manipulate and coerce Ronny to her financial gain.” The complaint alleged purely economic loss as a result of Weitzel’s conduct, including stealing personal property, unlawfully transferring vehicle titles, and taking personal trips using Ronny’s funds. The complaint alleged that During the final years of his life and while suffering from dementia, Defendant, Jake Weitzel, induced Ronny to make large cash withdrawals from his bank accounts and from a trust under which he was a beneficiary for her use and benefit. These and other financial benefits arising prior to the death of Ronny, Defendant, Jake Weitzel, secured for herself by exercising fraud, deceit, undue influence, and coercion over Ronny who, at the age of 76, was ill, incompetent, suffering from dementia, suffering emotionally, from the January 2011 death of his wife of fifty-four (54) years, and clearly mentally incapacitated. ¶5 The complaint contains nineteen separate causes of action: I. Deceit; II. Fraudulent Inducement; III. Breach of Fiduciary Duty; IV. Actual Fraud; V. Constructive Fraud; VI. Conversion; VII. Economic Duress; VIII. Intentional Infliction of Emotional Distress; IX. Negligent Infliction of Emotional Distress; X. Undue Influence; XI. Unjust Enrichment; XII. Restitution; XIII. Negligent Misrepresentation; XIV. Intentional Misrepresentation; XV. Constructive Trust; XVI. Injunctive Relief; XVII. Negligence per 4 se based on the Montana Elder and Persons with Developmental Disabilities Abuse Prevention Act; XVIII. Punitive damages; and XIX. Negligence. These claims are supported by 113 paragraphs of alleged facts. The complaint does not include a count of false imprisonment. Nor does the complaint specifically allege bodily injury to Ronny. ¶6 During the time periods germane to the allegations, FIE insured Weitzel under successive protector plus homeowner’s insurance policies. The terms of each renewed policy were substantially the same, providing coverage under three endorsements: “personal injury,” “bodily injury,” and “property damage.” The most recent version (hereinafter, the policy) provides a specific definition for each of the three terms: “Personal injury” means any injury arising from: (1) false arrest, imprisonment, malicious prosecution and detention. (2) wrongful eviction, entry, invasion of rights of privacy. (3) libel, slander, defamation of character. (4) discrimination because of race, color, religion or national origin. “Bodily injury” means bodily harm, sickness or disease, including care, loss of services and death resulting from that injury. “Property Damage” means physical injury to or destruction of tangible property covered by this policy and resulting loss of use. ¶7 After receiving a tender of the complaint from Weitzel, FIE undertook the defense of Weitzel under a reservation of rights. FIE subsequently initiated a declaratory judgment action seeking a declaration that there was no coverage for the claims alleged in the underlying complaint and thus no duty to defend or indemnify Weitzel. The parties each moved for summary judgment. ¶8 On May 28, 2015, the District Court issued its order granting summary judgment in favor of Weitzel, holding that FIE owed a duty to defend Weitzel. The District Court 5 concluded that factual allegations contained within the underlying complaint triggered coverage under the “personal injury” endorsement. The court reasoned that, while the underlying complaint did not expressly contain a cause of action or seek damages for false imprisonment, the allegations could be construed to potentially state a claim for false imprisonment. The District Court did not expressly rule on whether the complaint triggered coverage under either the “bodily injury” or “property damage” endorsements. However, the court did provide guidance to “assist the parties” in future briefing on the other two endorsements. The court explained that Weitzel appeared to have conceded during oral argument that the complaint did not give rise to coverage under the property damage endorsement, but the complaint may have alleged bodily injury because the complaint alleged elder abuse. ¶9 FIE appeals. STANDARD OF REVIEW ¶10 We review a district court’s decision to grant summary judgment de novo, applying the same criteria of M. R. Civ. P. 56 as did the district court. Labair v. Carey, 2012 MT 312, ¶ 15, 367 Mont. 453, 291 P.3d 1160. 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.” Labair, ¶ 15. 6 DISCUSSION ¶11 Whether the District Court erred by concluding that FIE had a duty to defend Weitzel under the terms of the insurance policy. ¶12 Under Montana law, an insurer has a duty to defend “when a complaint against an insured alleges facts which, if proved, would result in coverage.” Tidyman’s Mgmt. Servs. v. Davis, 2014 MT 205, ¶ 22, 376 Mont. 80, 330 P.3d 1139. In determining whether a duty exists, an insurer must look to the allegations contained within the complaint. Farmers Union Mut. Ins. Co. v. Staples, 2004 MT 108, ¶ 20, 321 Mont. 99, 90 P.3d 381. Where the insurer has no knowledge of facts outside of the complaint that may potentially trigger coverage, the complaint and the policy constitute the universe with regard to the insurer’s duty to defend. Staples, ¶ 20. “If there is no coverage under the terms of the policy based on the facts contained in the complaint, there is no duty to defend.” Grimsrud v. Hagel, 2005 MT 194, ¶ 34, 328 Mont. 142, 119 P.3d 47. Factual disputes between the parties relevant to coverage “must be resolved in favor of coverage.” Staples, ¶ 24. ¶13 The insured bears the initial burden to establish that the claim falls within the basic scope of coverage. Travelers Cas. & Sur. Co. v. Ribi Immunochem Research, 2005 MT 50, ¶ 29, 326 Mont. 174, 108 P.3d 469. If the insured demonstrates that the claim falls within the scope of coverage, the burden shifts to the insurer to show that the claim is unequivocally excluded under an exception to the basic scope of coverage. Ribi Immunochem Research, ¶ 29. “This allocation appropriately aligns the burden with the 7 benefit as the party seeking the benefit of a particular policy provision bears the burden of proving its application.” Ribi Immunochem Research, ¶ 30. ¶14 If a complaint states multiple claims, some of which are covered by the insurance policy and some of which are not, it is a mixed action. In these cases, Montana follows what is known as the mixed-action rule, which requires an insurer to defend all counts in a complaint so long as one count triggers coverage, even if the remaining counts do not trigger coverage. State Farm Fire & Cas. Co. v. Schwan, 2013 MT 216, ¶ 16, 371 Mont. 192, 308 P.3d 48. ¶15 FIE argues that the District Court erred by concluding that the facts alleged in the complaint, if proven, trigger coverage under the policy. FIE maintains that the complaint does not allege sufficient facts to give rise to coverage under any of three endorsements—“personal injury,” “bodily injury,” and “property damage”—provided in the policy. Weitzel does not dispute on appeal that the complaint fails to allege sufficient facts to trigger coverage under the property damage endorsement, but does maintain that the complaint triggers coverage under the other two endorsements. Because Weitzel does not provide argument regarding property damages, we address only whether the complaint alleges sufficient facts to give rise to coverage under the “personal injury” and “bodily injury” endorsements. We do so in turn. “Personal Injury” ¶16 FIE argues that the complaint does not plead facts sufficient to give rise to a claim for personal injury. Contrary to the District Court’s conclusion, FIE reasons that the complaint fails to allege any factual allegations amounting to a claim of false 8 imprisonment. FIE notes that the complaint is lengthy and very detailed, containing nineteen separate causes of action and 113 paragraphs of preliminary facts supporting those allegations, but does not contain a specific count of false imprisonment or expressly allege an essential element of false imprisonment—that Weitzel restrained Ronny against his will. Weitzel counters that the underlying complaint does not need to expressly plead a claim of false imprisonment or the elements so long as the facts in the complaint can be inferred to give rise to a cause of action for false imprisonment, and that there are sufficient facts contained within the underlying complaint to infer a cause of action for false imprisonment. ¶17 We agree with FIE that the complaint does not trigger coverage under the personal injury endorsement. Because both parties agree that FIE’s knowledge of facts giving rise to a potential duty to defend are limited to the complaint, we must compare the language of the policy with the facts alleged in the complaint. Staples, ¶ 20. We accept the allegations contained in the complaint as true, Staples, ¶ 24, but place the burden of proof on Weitzel to show the claim falls within the basic scope of coverage. Ribi Immunochem Research, ¶ 29. The personal injury endorsement provides coverage for damages due to personal injury arising out of ten tortious causes of action, including false imprisonment. False imprisonment requires a showing of two key elements: “restraint of an individual against his will and the unlawfulness of such restraint.” Hughes v. Pullman, 2001 MT 216, ¶ 21, 306 Mont. 420, 36 P.3d 339. While an individual may be restrained by acts or merely by words which he fears to disregard, there is no imprisonment if the plaintiff does not allege that he was restrained against his will. Hughes, ¶ 21. 9 ¶18 Weitzel has failed to show the complaint alleges sufficient facts to trigger coverage for a claim of false imprisonment. First, it is undisputed that the complaint does not expressly plead a claim of false imprisonment or expressly incorporate the essential elements of false imprisonment. Despite enumerating nineteen causes of action and setting forth 113 paragraphs supporting those allegations, the complaint fails to list a cause of action for false imprisonment or specifically allege that Weitzel restrained Ronny against his will. Second, we cannot agree with Weitzel that it is a fair reading of the complaint to infer from the allegations contained therein that Weitzel at any time restrained Ronny against his will. There are no allegations that Weitzel ever threatened Ronny by force or by words to stay in his home. In fact, the complaint does not allege that Weitzel ever threated Ronny at all. Even under the most liberal standards, the allegations contained within the complaint are insufficient to state a claim for false imprisonment. Without alleging, involuntarily restraint, an essential element of false imprisonment, Weitzel cannot show the complaint alleges facts that, if proven, would result in coverage under the personal injury endorsement. ¶19 Weitzel persists that the underlying complaint could be construed to give rise to a reasonable inference of false imprisonment. Specifically, Weitzel notes that included within the 113 paragraphs of factual background are allegations that: (1) Ronny’s physician diagnosed him with dementia; (2) Weitzel changed the locks on Ronny’s house at least two times; (3) Ronny was intimidated by Weitzel; and (4) Weitzel taped a note on the inside of the front door of Ronny’s house stating, “Keep door locked. Don’t open for anyone!!” 10 ¶20 Even accepting these allegations as true, however, we are unable to conclude that they state a claim of false imprisonment by reasonable inference. There is no allegation within the complaint that can be reasonably construed as alleging Weitzel restrained Ronny from leaving his home against his will. The closest the complaint comes to making such an allegation is the note attached to Ronny’s door stating, “Keep door locked. Don’t open for anyone!!” This allegation, however, requires several assumptions be made to reach a conclusion that Weitzel unlawfully restrained Ronny from leaving his home. In short, the complaint fails to allege any facts or circumstances that would support an allegation that Ronny was involuntarily restrained. ¶21 Weitzel also appears to suggest that we actually make a series of assumptions regarding the facts to establish coverage, contending that FIE owes a duty to defend him because hypothetical facts may exist outside the complaint that could theoretically give rise to liability. That, however, is not this Court’s standard. We have never held that an insurer’s duty to defend may be triggered by speculating about extrinsic facts and unpled claims regarding potential liability. Nor have we ever held that an insurer’s duty to defend is triggered where the potential for liability is tenuous and far removed from the actual facts pled. Our case law “makes clear that the threshold question, instead, is whether the complaint against the insured alleges facts that, if proven, would trigger policy coverage.” Tidymans, ¶ 26. The facts alleged in the complaint against Weitzel, if proven, fail to do so. ¶22 The complaint does not expressly plead a claim of false imprisonment, does not expressly plead the essential elements of false imprisonment, and does not plead facts 11 that can be reasonably inferred to state a claim of false imprisonment. We conclude, therefore, that FIE owes no duty to defend Weitzel. We hold that the District Court erred by concluding otherwise. We reverse the judgment of the District Court regarding the personal injury endorsement. “Bodily Injury” ¶23 FIE argues that the underlying complaint does not trigger coverage under the bodily injury endorsement, reasoning that the complaint does not allege that Weitzel caused Ronny “bodily harm, sickness or disease.” Weitzel counters that the complaint could be construed to give rise to a claim of bodily injury because the complaint alleges violations of the Montana Elder and Persons with Developmental Disabilities Abuse Prevention Act, § 52-3-801, MCA, et seq., and the complaint also alleges that Ronny is now deceased. Combining these two allegations, Weitzel maintains that the complaint could be construed to mean that Weitzel caused Ronny’s death, which would constitute bodily harm under the policy. ¶24 Here again, Weitzel’s argument is based entirely on speculation without a basis in the facts actually pled in the complaint. “Bodily injury” under the terms of the policy “means bodily harm, sickness or disease, including care, loss of services and death resulting from that injury.” The complaint does not allege Ronny died as a result of Weitzel’s actions. Nor does the complaint allege that the elder abuse alleged under § 52-3-801, MCA, et seq., constituted physical abuse or that Weitzel ever actually physically abused Ronny. Rather, the allegations contained in the underlying complaint focus entirely on economic loss, and any extrapolation of a claim of physical abuse is 12 unreasonable. Weitzel fails to cite to any allegations in the complaint that can be reasonably construed to assert that Weitzel caused Ronny “bodily harm, sickness or disease.” The District Court erred by concluding the facts contained within the complaint give rise to coverage under the policy. Accordingly, the District Court erred by holding that FIE owed a duty to defend Weitzel. ¶25 We reverse the District Court’s grant of summary judgment, and we remand for entry of summary judgment in favor of FIE. ¶26 Reversed and remanded. /S/ LAURIE McKINNON We Concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT /S/ JAMES JEREMIAH SHEA

May 17, 2016

9eec0ef8-648e-4357-a3cd-aa5385b73ce0

Pacific Hide & Fur Depot v. Emineth Custom Homes, Inc.

2016 MT 114

DA 15-0503

Montana

Montana Supreme Court

DA 15-0503 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 114 PACIFIC HIDE & FUR DEPOT, d/b/a PACIFIC STEEL & RECYCLING, Plaintiff and Appellee, v. EMINETH CUSTOM HOMES, INC. and SHANE EMINETH, Defendants and Appellants. APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DV 13-0442 Honorable Michael G. Moses, Presiding Judge COUNSEL OF RECORD: For Appellants: Kenneth D. Tolliver, J. Michael Ozier, Joshua P. Oie, Tolliver Law Firm, P.C., Billings, Montana For Appellee: Gregory R. Schwandt, Eric B. Biehl, Church, Harris, Johnson & Williams, P.C., Great Falls, Montana Submitted on Briefs: March 23, 2016 Decided: May 17, 2016 Filed: __________________________________________ Clerk May 17 2016 Case Number: DA 15-0503 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Emineth Custom Homes and Shane Emineth (Emineth) appeal from the District Court’s judgment of July 23, 2015, entered following the jury’s verdict rendered June 12, 2015. We affirm in part, reverse in part, and remand. ¶2 We restate the issue on appeal as follows: Whether the District Court properly entered judgment following the jury’s verdict rendered June 12, 2015. FACTUAL AND PROCEDURAL BACKGROUND ¶3 In about 2011 Pacific Steel & Recycling (Pacific) set about to expand its recycling and fabrication work in Williston, North Dakota, and foresaw the need for a warehouse and a remodeled office and shop. Pacific put the warehouse project out for bids and awarded the contract to Emineth as the low bidder. An unsuccessful bidder, unhappy about not getting the warehouse job, threatened to cancel a rail siding lease with Pacific if Emineth were allowed to proceed. Pacific revoked the contract award to Emineth in order to save the rail siding, but shortly thereafter entered into two contracts with Emineth, one to renovate the office and shop and the other to build four duplexes for employee housing. ¶4 In February 2012 Emineth and Pacific signed a contract which called for Emineth to build four duplex apartment units in Williston to house Pacific’s employees, for a price of approximately $1.9 million. The contract specified that Pacific would advance $474,625 to Emineth as a “down payment” upon execution of the contract. Under the contract Emineth was responsible for obtaining all necessary permits for the duplex 3 project. The project required a zoning change, which proved difficult to obtain in a timely manner, although the local Zoning Board never denied the application. ¶5 There was testimony that the down payment was designed to fund work and materials required for the duplex project, as well as Emineth’s anticipated profit. Emineth testified that he used $7,000 of it to pay for engineering work on the drain field plan for the project and spent $39,000 on equipment to be used on Pacific projects in the Williston area. ¶6 In July 2012 Pacific cancelled the contract for the duplexes, contending that Emineth had not performed in a timely manner, and demanded return of the down payment. The parties agreed to a few subsequent projects that resulted in Pacific forgiving $32,000 of its claim to the down payment, but the parties did not resolve the issue. Pacific asked Shane Emineth to come to Great Falls to discuss their relationship. At that meeting Pacific demanded return of the advance payment and presented a promissory note for Emineth to sign. After consultation with an attorney, Emineth declined to sign the note. Emineth estimated that cancellation of the duplex project cost the company at least $100,000 in lost income. ¶7 In April 2013 Pacific initiated the present case by bringing an action against Emineth, stating a number of claims including breach of contract, unjust enrichment, constructive trust, and breach of the covenant of good faith and fair dealing. Pacific sought recovery of $437,625 of the down payment made to Emineth under the contract. This lesser amount recognized that Emineth was entitled to $32,000 credit arising from the other jobs done for Pacific. Emineth appeared in the action, denied liability to 4 Pacific, and counterclaimed, seeking damages from Pacific for breach of contract and other claims. Notably, when the parties signed the pretrial order, Pacific asserted claims that Emineth had been unjustly enriched in the amount of $437,625; that Emineth held at least $437,625 in constructive trust for the benefit of Pacific; and that Emineth breached the covenant of good fair and fair dealing by improperly retaining the down payment. ¶8 The parties tried the case to a jury in June 2015. Just prior to trial Pacific filed a trial brief in which it stated that it would present its claim for return of the down payment solely upon the theory of breach of contract. Pacific abandoned its other causes of action against Emineth, including the claim for unjust enrichment. Moreover, Pacific did not assert as an affirmative defense or otherwise explicitly plead the issues of offset or restitution in its answer to the counterclaim filed by Emineth. ¶9 The parties agreed to a special verdict form which limited the basis of the claims of both sides to breach of contract. The verdict asked the jury to determine whether Pacific or Emineth had breached the duplex contract and if so, the amount of damages caused. The special verdict provided (with the jury’s responses): BREACH OF CONTRACT (AGAINST EMINETH CUSTOM HOMES) 1. Did Emineth Custom Homes, Inc. (“ECH”) breach the duplex contract with Pacific Steel and Recycling (“Pacific”)? No If “yes” proceed to Question 2. If “no” skip to Question 4. 2. Did ECH’s breach cause damages to Pacific? If “yes,” proceed to Question 3. If “no,” skip to Question 4. 5 3. What amount of money will compensate Pacific for damages caused by ECH’s breach of the duplex contract? Proceed to Question 4. BREACH OF CONTRACT (AGAINST PACIFIC) 4. Did Pacific breach the duplex contract with ECH? Yes If “yes” proceed to Question 5. If “no,” sign this verdict form and return it to the Bailiff. 5. Did Pacific’s breach cause damages to ECH? Yes If “yes” proceed to Question 6. If “no,” sign this verdict form and return it to the Bailiff. 6. What amount of money will compensate ECH for damages caused by Pacific’s breach of the duplex contract? $238,241.00 Pacific asserts in its brief on appeal that it offered an additional jury interrogatory that would have asked the jury to specifically determine the amount of the down payment that Emineth had to return. However, that interrogatory was not given; the parties agreed to the special verdict that was given; and Pacific does not appeal the issue. ¶10 The jury’s verdict determined that Emineth did not breach the contract with Pacific, but that Pacific breached the contract with Emineth. The jury further found that Pacific’s breach had caused Emineth damages of $238,241. After trial the parties could not agree upon the effect of the verdict. The District Court held a status conference with counsel, and entered judgment on the verdict in favor of Emineth for $238,241 as found by the jury. The District Court stated that the special verdict submitted to the jury was 6 “appropriate under the circumstances”; that the case was a breach of contract case; and that the jury found that Pacific had breached the contract with Emineth. The District Court further noted that the jury found that Emineth suffered damages of $238,241 from the breach. ¶11 However, the District Court added: the “Court further finds” that Emineth had already received “474,000-some-odd dollars” and that Pacific is “entitled to credit for that amount” which “is owed back by [Emineth] to Pacific.” Consequently the District Court’s judgment provided that the amount of the verdict in Emineth’s favor was to be “deducted from the down payment of $474.625.00 previously advanced” to Emineth. The judgment entered by the District Court was that Emineth “must return $236,139.00” to Pacific, based upon the difference between the jury’s award to Emineth and the amount that the District Court found that Pacific advanced to Emineth. The District Court credited Emineth with an award of costs of $245.1 ¶12 Consequently, the District Court ordered that Emineth’s jury award of $238,241 in its favor become a judgment against Emineth and in favor of Pacific for $236,139. Emineth appeals. Neither party appeals the jury’s determinations that Pacific breached the contract and that Emineth did not; neither party appeals the jury’s verdict that Pacific’s breach caused damage to Emineth. 1 The District Court failed to provide an amount for the credit that Pacific acknowledged that it owed to Emineth for work done on other projects. 7 STANDARD OF REVIEW ¶13 The parties do not dispute the jury’s verdict, but rather disagree over the District Court’s judgment that implements that verdict. The district court exercises its discretion to structure a special verdict and to frame the questions. The questions must be adequate to enable the jury to determine the factual issues essential to the judgment. Kiely Const. v. Red Lodge, 2002 MT 241, ¶ 57, 312 Mont. 52, 57 P.3d 836. We review de novo, as a conclusion of law, a district court’s decision as to offsets applied to a judgment. Cheff v. BNSF Ry. Co., 2010 MT 235, ¶ 25, 358 Mont. 144, 243 P.3d 1115. On appeal this Court will not speculate how the jury viewed the evidence or how it reached its decision. Jim’s Excavating v. HKM Associates, 265 Mont. 494, 513, 878 P.2d 248, 259 (1994). DISCUSSION ¶14 Issue: Whether the District Court properly entered judgment following the jury’s verdict rendered June 12, 2015. ¶15 As noted, neither side appeals from the jury’s verdict determining that Pacific breached the contract; that Emineth did not; and that the breach caused Emineth damage. It is clear that the jury did exactly what was asked of it, returning a verdict by answering the specific questions that were presented. The only issue is whether the District Court’s final judgment correctly interpreted the verdict. The express effect of the District Court’s judgment was a determination that Emineth owed Pacific $474,625, and that the verdict of $238,241 in Emineth’s favor was an offset against the $474,625 down payment. ¶16 A special verdict must adequately cover the contested issues required to decide the controversy between the parties. Kiely, ¶ 57. This case began with Pacific’s lawsuit 8 against Emineth, seeking return of most of the down payment. The record is clear that by the time of trial the parties did not agree as to whether Pacific was entitled to recover any of the down payment advanced to Emineth. Pacific’s complaint, and its contentions in the pretrial order, sought the return of $437,625 from Emineth, not the entire original advance of $474,625 as relied upon in the District Court’s judgment. The pretrial order provides that the parties contested the portion, if any, of the advance that Pacific was entitled to recover. ¶17 The parties acknowledged in the pretrial order that Emineth was entitled to credit of $32,000 against any portion of the down payment it was required to return to Pacific. The District Court did not provide, nor did the parties request that it provide, the jury with any specific instructions about Pacific’s entitlement to a return of any portion of the down payment. ¶18 It is clear, both from the stipulation to give the special verdict, and from the closing arguments, that the attorneys for both sides intended that the jury’s answers to the special verdict would settle the issues in the case, which by the time of trial were all based upon breach of contract. Pacific’s attorney argued that if the jury found that Emineth breached the contract, the jury should award Pacific the remaining $437,625 of the down payment: “We ask that you return a verdict for Pacific that Emineth Custom Homes breached this contract, awarding $437,625 to Pacific.” Pacific’s attorney also argued that if the jury found that Pacific breached the contract, they should award Emineth lost profits of $125,301 “at the most.” Emineth’s attorney argued that the $474,625 advanced by Pacific on the duplex contract represented the money that Emineth 9 anticipated making on the entire contract, and that if Pacific breached then Emineth was entitled to keep the advance payment. Emineth’s attorney also argued that if the jury found that Pacific was in breach, it “can also decide to give an allowance over and above that to Emineth . . . .” Emineth’s attorney argued that it as an “all or nothing” case in which it was impossible to “split [the] baby.” ¶19 At the time of trial, Pacific’s only claim was that Emineth breached the duplex contract and therefore Pacific was entitled to recover the down payment. However, the jury found that Emineth did not breach the contract. Once the jury found no breach by Emineth, that was the end of Pacific’s claim to a return of the down payment, and it was entitled to recover nothing from Emineth. Emineth’s claim was that Pacific breached the duplex contract, and therefore Emineth was entitled to recover the damages that flowed from that breach. The jury found that Pacific breached the contract and that the damages suffered by Emineth were $238,241. Therefore, the special verdict completely resolved the case, as the attorneys argued. ¶20 The parties provide various arguments as to how the jury might have rendered the special verdict while accounting or not accounting for the down payment. However, this is all speculation as to what the verdict might mean. A verdict that specifies only the total damages does not allow a determination as to what categories or amounts of damages are included, and the Court “will not speculate when the verdict form does not explain the jury’s thought process.” Murray v. Whitcraft, 2012 MT 298 ¶ 12, 367 Mont. 364, 291 P.3d 587. It is improper for a court to speculate on the jury’s thought process when it is not explained by the verdict form. Horn v. Bull River Country Store, 2012 MT 245, ¶ 25, 10 366 Mont. 491, 288 P.3d 218. When it is separated from the District Court’s subsequent judgment, and placed in the context of the jury trial, the jury’s verdict is clear. ¶21 It is inescapable that the District Court in rendering the judgment made a factual determination contrary to the verdict returned by the jury. The question of whether Emineth got to retain any portion of the down payment was clearly settled when the jury found against Pacific on its only claim, that Pacific breached the duplex contract, and when it found that Emineth did not. ¶22 When a case is tried to a jury, the jury is responsible for finding the facts required to determine the case, § 27-1-103, MCA, and must do so “in a spirit of neutrality, fairness and open-mindedness.” State v. Graves, 274 Mont. 264, 270, 907 P.2d 963, 967 (1995). The District Court properly instructed the jury members that they were the “sole judges of the facts in this case.” The jury’s responsibility is to weigh evidence and resolve conflicts in it, to judge the credibility of witnesses, and to make the factual determinations necessary to render a verdict. “The court must defer to the jury’s constitutionally sanctioned decisional role, and it is not the court’s role to repeat the jury’s tasks and retry a case or reweigh the evidence.” In the Matter of L.A., 2013 MT 327, ¶ 11, 372 Mont. 368, 313 P.3d 115. ¶23 As noted, neither side appeals from or contests the liability decisions that the jury made in its special verdict, that Pacific breached the contract with Emineth. Therefore, the jury’s verdict in that regard stands, and for the reasons explained above, the verdict is affirmed. Emineth is entitled to recover $238,241 from Pacific and Pacific is not entitled to recover anything from Emineth. The District Court’s judgment is vacated. We 11 remand to the District Court for entry of a judgment of $238,241 against Pacific and in favor of Emineth. CONCLUSION ¶24 This case is affirmed in part, reversed in part, and remanded for entry of a new judgment. /S/ MIKE McGRATH We Concur: /S/ JAMES JEREMIAH SHEA /S/ PATRICIA COTTER /S/ BETH BAKER /S/ LAURIE McKINNON

May 17, 2016

b2fd3b10-3cc5-4bc8-a83e-4295275929c2

Jacobson v. Bayview Loan Servicing, LLC

2016 MT 101

DA 15-0108

Montana

Montana Supreme Court

DA 15-0108 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 101 ROBIN C. JACOBSON and KATHLEEN S. JACOBSON, Plaintiffs and Appellees, v. BAYVIEW LOAN SERVICING, LLC, and CHARLES J. PETERSON, Trustee, Defendants and Appellants. APPEAL FROM: District Court of the Twenty-Second Judicial District, In and For the County of Carbon, Cause No. DV 10-58 Honorable Blair Jones, Presiding Judge COUNSEL OF RECORD: For Appellants: Maxon R. Davis, Derek J. Oestreicher, Davis, Hatley, Haffeman & Tighe, P.C., Great Falls, Montana For Appellees: Raymond G. Kuntz, Attorney at Law, Red Lodge, Montana Submitted on Briefs: December 9, 2015 Decided: May 4, 2016 Filed: __________________________________________ Clerk May 4 2016 Case Number: DA 15-0108 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Bayview Loan Servicing, LLC, (“Bayview”) and Charles J. Peterson, Trustee, (“Peterson”) appeal from the Order of the Montana Twenty-Second Judicial District granting judgment for Robin C. Jacobson and Kathleen S. Jacobson (“Jacobsons”). The District Court determined that Bayview violated the Fair Debt Collections Practices Act (“FDCPA”), 15 U.S.C. § 1692a-p, and the Montana Consumer Protection Act (“MCPA”), Title 30, Chapter 14, part 1, MCA. The District Court also awarded damages in the amount of $226,408.14 and attorney fees in the amount of $109,108.50 to the Jacobsons. The Jacobsons also prevailed on two post-trial motions for additional relief and the District Court awarded the Jacobsons an additional $60,000.00 in damages and $31,020.00 in attorney fees. We affirm. ISSUES ¶2 Appellant raises several issues on appeal, which we address as follows: 1. Whether the District Court erred in determining that Bayview violated the FDCPA. 2. Whether the District Court erred in determining that Bayview violated the MCPA. 3. Whether the District Court erred in awarding damages to the Jacobsons. 4. Whether this Court should award costs and fees to the Jacobsons on appeal. FACTUAL AND PROCEDURAL BACKGROUND ¶3 In October 2007, the Jacobsons borrowed money and purchased a home and land on Elbow Creek Road in Carbon County, Montana. They executed a Promissory Note 3 and Trust Indenture in the amount of $391,400.00 to secure the loan. The original lender and servicer on the loan was CitiMortgage, Inc. and the “nominee” beneficiary of the Trust Indenture was Mortgage Electronic Registration Systems, Inc. (“MERS”). The 2008 economic crisis brought negative financial impacts to Robin’s business as a home builder. As a result, the Jacobsons missed at least one mortgage payment in December 2008. CitiMortgage worked with the Jacobsons by entering into an extension agreement to defer the delinquent payment and interest to the end of the loan. On March 7, 2009, CitiMortgage transferred the loan servicing duties to Bayview Loan Servicing, LLC. ¶4 On March 24, 2009, Bayview sent the Jacobsons a default letter demanding payment of all past due amounts within 30 days or the loan would be accelerated with the entire obligation due and payable, along with the commencement of foreclosure proceedings. The letter further advised that once the loan was accelerated, it could be reinstated if all past due installments and late charges were paid at least 5 days before the scheduled foreclosure sale. ¶5 Both the Trust Indenture and the Promissory Note signed by the Jacobsons provide rules for notice when the borrower is delinquent on payments or in default. Section 22(c) of the Trust Indenture provides: Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower’s breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under Section 18 [transfer of property] unless Applicable law provides otherwise). The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure 4 the default on or before the date specified in the notice may result in acceleration. . . . If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may invoke the power of sale and any other remedies permitted by Applicable Law. (Emphasis added). With regard to the Promissory Note, Section 6(c) states: Notice of Default If I am in default, the Note Holder may send a written notice telling me that if I do not pay the overdue amount by a certain date, the note holder may require me to pay immediately the full amount of Principal which has not been paid and all the interest that I owe on that amount. That date must be at least 30 days after the date on which the notice is mailed to me or delivered by other means. (Emphasis added.) ¶6 As part of its efforts to collect payment from the Jacobsons, Bayview sent the aforementioned default letter but did not send a notice of acceleration with a “date specified” or “certain date” by “which the default must be cured” subsequent to the default letter of March 24 as required by the Promissory Note. (If the default letter was meant to be the notice, it did not conform to the requirements of the Promissory Note because it failed to give the full 30 days and failed to specify the “certain date.”) ¶7 The Jacobsons made a payment on their loan on April 30, but Bayview resisted acceptance of that payment. A Bayview representative told the Jacobsons to stop making payments on their loan in May 2009, advising them that this would help them qualify for a loan modification. Bayview represented to the Jacobsons in May 2009 that it would 5 process a loan modification for them, but did not forward an application for the HAMP1 program until January 2011. Instead, Bayview reinitiated foreclosure proceedings, sending a second default letter on May 4, 2009, containing language identical to the March foreclosure letter. Similar to the March foreclosure letter, Bayview failed to send a notice of acceleration and provide a “certain date” for cure. ¶8 On July 21, 2009, as part of the first foreclosure proceeding, Bayview filed, through Peterson, three documents with the clerk and recorder. The documents were an “Assignment of Deed of Trust,” the “Substitution of Trustee,” and a “Notice of Trustee’s Sale.” The “Assignment of Deed of Trust” assigned the deed of trust from MERS to CitiMortgage. The “Substitution of Trustee” substituted Peterson as trustee in the place of the original trustee, First American Title. Bayview also filed a “Notice of Trustee’s Sale,” seeking to exercise the power of sale under the trust and setting a sale of the Jacobsons property for November 23, 2009. In the Notice of Trustee’s Sale, Bayview and Peterson identified Bayview as the beneficiary under the Trust Indenture, when Bayview has never been the beneficiary of the Trust Indenture. The Notice of Trustee’s Sale states in bold letters at the bottom of page 2 “THIS IS AN ATTEMPT TO COLLECT A DEBT.” 1 The federal Home Affordable Modification Program (“HAMP”) “is intended to help homeowners in default or at immediate risk of default on their home loans by modifying their monthly payments to affordable levels. The program requires participating loan servicers to execute a servicer participation agreement and service eligible loans according to a uniform modification process. The process begins with a Trial Period Plan, under which the homeowner makes reduced payments for three months, while the loan servicer verifies income and other eligibility information. At the end of the trial period, if the homeowner has successfully made the trial payments and if eligibility has been verified, the modification is made permanent.” Morrow v. Bank of Am., N.A., 2014 MT 117, ¶ 11, 375 Mont. 38, 324 P.3d 1167. 6 ¶9 In September 2009, Bayview informed the Jacobsons that they were not qualified for HAMP, even though the Jacobsons were never given an application for modification under the program. At this point, according to the record, the Jacobsons complained to the Better Business Bureau because Bayview was “offering” modification while simultaneously pursuing foreclosure against them. The Better Business Bureau apparently contacted Bayview, because Bayview responded by cancelling the trustee’s sale scheduled for November 2009 and offering a loan modification. Bayview then offered to lower the interest rate from 9.5% to 7.5% and extend the term of the loan out to 480 months. The Jacobsons rejected the offer. The Jacobsons then complained about Bayview’s practices to U.S. Senator Jon Tester. In a conference call with the Senator’s office, Bayview, and the Jacobsons, Bayview made a second offer: offering to dismiss the foreclosure action, waive the late charges, remove the negative credit reporting, dismiss legal fees and costs, and reduce the interest rate to 7.5%, if the loan was brought current. The Jacobsons accepted this offer, but Bayview refused to put the offer in writing. As a result, no agreement was finalized between the parties. ¶10 In December 2009, Bayview once again sent the Jacobsons “notice of default” letters. These letters again failed to provide a date for cure under § 22 of the Trust Indenture and failed to grant the Jacobsons the ability to cure within the 5 days prior to the date set for sale. Bayview also failed to send the required acceleration notice subsequent to the default letter. 7 ¶11 In January 2010, CitiMortgage, the true beneficiary of the loan, executed a power of attorney, effective January 14, 2010, naming Bayview as its attorney-in-fact, but the document did not ratify the past actions of Bayview. On February 5, 2010, Peterson executed a second Notice of Trustee’s Sale setting a sale date of June 15, 2010. This second notice also erroneously identified Bayview Loan Servicing as the beneficiary. On March 9, 2010, Bayview assigned the Trust Indenture to U.S. Bank as trustee, and then assigned it again to another entity identified as “CBO-6 REO Corp.” Bayview represented that it was acting as attorney-in-fact for U.S. Bank for the purposes of this second assignment when it had no such authority. Bayview subsequently executed a false notarization of the assignment of the Trust Indenture to CBO-6 REO. Corp. CBO-6 REO Corp. did not exist on March 9 when Bayview purported to assign the Jacobsons’ Trust Indenture to that entity. Bayview claimed that it meant to assign the Trust Indenture to “CBO-6 Corp.” and that the “REO” was a typographical error. Nevertheless, CBO-6 Corp. was not formed until June 3, 2010, three months after the alleged “typographical error” assignment on March 9. ¶12 On March 23, 2010, Bayview informed the Jacobsons that it was now servicing their loan on behalf of U.S. Bank, with knowledge that U.S. Bank was not the beneficiary. Bayview falsely represented that CBO-6 REO Corp. existed and that the Jacobsons’ loan was transferred to the entity on June 10, 2010. Bayview also misrepresented that it was servicing the loan on behalf of CBO-6 REO Corp. and that the non-existent entity was the Jacobsons’ creditor. Bayview did not record the March 9, 8 2010 assignment of the Trust Indenture until September 21, 2010. When it did record, the assignment from U.S. Bank to CBO-6 Corp. was still an assignment to a nonexistent entity. As a result of these assignments, Bayview acted from March 9, 2010, to July 26, 2012, on behalf of beneficiaries that did not exist and had no interest in the Jacobsons’ loan. ¶13 The Jacobsons filed this action on June 9, 2010, to enjoin the sale of their house at the June 15, 2010 trustee’s sale. The District Court issued an Order to cancel the trustee’s sale set for June 15, 2010. Subsequently, the Jacobsons amended their complaint to add FDCPA and MCPA claims. Bayview answered the Jacobsons’ complaint on November 8, 2010. After the case was filed, Bayview contacted the Jacobsons, instead of their counsel, in June 2011, January 2011, February 2011, and July 2013. ¶14 Bayview moved for summary judgment in June 2012, asserting that it was the current beneficiary of the deed of trust, and had the authority to foreclose. The court set a hearing for September 19, 2012, on the motion for summary judgment. After changes in counsel and numerous motions, including a second summary judgment motion by Bayview, the court held a summary judgment hearing on August 7, 2013. The court denied Bayview’s motion for summary judgment at the hearing. A bench trial was held on November 21 and 22, 2013, at which both parties presented exhibits and witness testimony. On March 10, 2014, the District Court issued its Findings of Fact, Conclusions of Law, and Order. The court determined that Bayview engaged in deceit, 9 negligent misrepresentation, and intentional violations of the FDCPA and the MCPA. The court awarded money damages under the FDCPA and the MCPA to the Jacobsons including emotional distress damages and statutory damages totaling $226,408.14. The court awarded the Jacobsons their costs and attorney fees in the case of $109,108.50. ¶15 After the trial, the Jacobsons filed a Motion for Additional Damages, Equitable Relief and Sanctions because Bayview contacted them while they were still represented by counsel, to notify them that Bayview was adding $33,696.00 to their loan for attorney fees and expenses related to the November trial. On August 20, 2014, the court held a hearing and determined that Bayview’s attempts to collect their trial-related attorney fees and costs from the Jacobsons were in violation of the FDCPA, the MCPA, and the District Court’s Order in the case prohibiting debt collection by Bayview during the pendency of the action. Accordingly, the court imposed an additional $50,000.00 of damages under § 30-14-133(1), MCA, to “further the remedial purposes of the Act.” ¶16 On the same day as the August 20, 2014 hearing, Bayview once again sent additional correspondence to the Jacobsons. The letter was a mortgage statement which included a $13,565.84 bill for attorney fees added to their mortgage. The Jacobsons filed a Motion for Contempt and Bayview responded that it was deliberately charging the Jacobsons for Bayview’s attorney fees and adding those to their mortgage. The District Court held a hearing on the motion on October 28, 2014, at which Bayview continued to assert its claims for attorney fees and other costs even while it could not produce any authority for this claim. The District Court issued additional Findings of Fact, 10 Conclusions of Law, and Order on December 10, 2014, regarding the second violation of the Order in the case. The court held: 1. Bayview is in contempt of the District Court, but may purge its contempt by strict future compliance with the Court’s orders. 2. Bayview should pay Jacobsons attorney fees and costs incurred in bringing the motions. Bayview should pay $10,000.00 to aid in deterring Bayview’s unlawful conduct. ¶17 Two more Orders were entered in the case in regard to the attorney fees and costs. The District Court determined: 1. Jacobsons are awarded $17,580.00 against Bayview and Peterson for the first violation of the Order as determined by the District Court on August 20, 2014. 2. Jacobsons are awarded $13,440.00 against Bayview and Peterson for the second violation of the Order as determined by the District Court on December 10, 2014. ¶18 Bayview appeals from the District Court’s Orders in this case, including the subsequent orders related to Bayview’s violations of the original order. Bayview does not appeal the attorney fees awarded pursuant to the Orders. STANDARD OF REVIEW ¶19 This Court will affirm the factual findings of a district court sitting without a jury unless those findings are clearly erroneous. Pedersen v. Ziehl, 2013 MT 306, ¶ 10, 372 Mont. 223, 311 P.3d 765 (citing M. R. Civ. P. 52(a)(6); Steiger v. Brown, 2007 MT 29, ¶ 16, 336 Mont. 29, 152 P.3d 705). “A district court’s findings are clearly erroneous if they are not supported by substantial evidence, if the district court has misapprehended the effect of the evidence, or if a review of the record leaves this Court with the definite 11 and firm conviction that a mistake has been committed.” Pedersen, ¶ 10 (citations omitted). To determine whether substantial credible evidence supports the district court’s findings, we review the evidence in the light most favorable to the prevailing party. Pedersen, ¶ 10 (citation omitted). We review a district court’s conclusions of law for correctness. Public Lands Access Ass’n v. Bd. of Co. Comm’rs, 2014 MT 10, ¶ 14, 373 Mont. 277, 321 P.3d 38. DISCUSSION ¶20 1. Whether the District Court erred in determining that Bayview violated the FDCPA. ¶21 The District Court made numerous determinations under the FDCPA, all of which are contested by Bayview on appeal. The court found that Bayview was in violation of the FDCPA for the following reasons: it engaged in FDCPA collection activity; it told the Jacobsons to stop making payments and then commenced foreclosure; it informed the Jacobsons it could not reinstate their loan within 5 days prior to the foreclosure sale; it failed to provide a date for cure of the default; it wrongfully (under § 71-1-306(2), MCA) appointed Peterson as trustee; it attempted to foreclose the property with a defective trustee; it falsely represented that it held the beneficial interest as servicer; it falsely promised to modify the loan in the Jacobsons favor; it falsely informed the Jacobsons they were not qualified for the HAMP program; it falsely notarized the assignment of the Trust Indenture to a corporation that did not exist; and falsely recorded the assignment to a fictitious creditor without authority; it made false representations in discovery by providing false answers and withholding documents; it contacted the Jacobsons while 12 they were represented by counsel; and it failed to comply with the requirements for default procedure in the Trust Indenture. ¶22 On appeal, Bayview argues that its conduct and communications with the Jacobsons do not constitute violations of the FDCPA or the MCPA and are insufficient to justify the damages awarded to the Jacobsons. Bayview’s counsel argues that because no foreclosure sale took place, no harm has been done, and regardless, conduct related to foreclosure proceedings is not an attempt to collect a debt and is outside the scope of the FDCPA and MCPA. ¶23 The Jacobsons argue that Bayview is a debt collector subject to the FDCPA. They assert that Bayview’s claim to be exempt from the FDCPA is raised for the first time on appeal. They further contend that Bayview and Peterson’s practices are the type of abusive conduct the FDCPA and MCPA were enacted to remedy. They support the District Court’s conclusions that Bayview’s actions were serious, material violations of the law. Because the District Court made specific findings and conclusions regarding Bayview’s violations of the FDCPA and MCPA, we consolidate and review the conclusions with the parties’ arguments below. First, we address the Jacobsons’ argument that Bayview is changing its legal theory on appeal. Next, we review Bayview’s violations of the FDCPA including the loan modification misrepresentations, foreclosure rights misrepresentations, beneficiary status misrepresentations, improper contact with a represented party, and the false assignments of the loan. 13 Change in Legal Theory on Appeal ¶24 On appeal, Bayview reframes its argument regarding the FDCPA. It argues the FDCPA is inapplicable to Bayview because its actions—conduct related to foreclosure proceedings by the originator of the loan—are not debt collection activity under the FDCPA. This Court generally does not “address issues raised for the first time on appeal, or a party’s change in legal theory” from that argued at the district court. Vader v. Fleetwood Enterprises, Inc., 2009 MT 6, ¶ 37, 348 Mont. 344, 201 P.3d 139. The District Court determined that “Bayview and Peterson are debt collectors” and supported the conclusion by detailing Bayview’s debt collection efforts against the Jacobsons. The District Court also noted in its Order that “[n]either Bayview nor Peterson has alleged any affirmative defenses under the FDCPA, and neither has argued that they are not debt collectors as defined by the FDCPA.” Bayview seeks to avoid the effect of these conclusions by arguing a new theory on appeal. This theory was not offered to the District Court, the District Court was not given the opportunity to weigh these arguments, and we decline to address them on appeal. Instead, this Court will address the merits of the arguments as they were made to the District Court. Fair Debt Collection Practices Act (FDCPA) ¶25 The FDCPA is a strict liability statute which specifically prohibits “[t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information regarding a consumer.” 15 U.S.C. § 1692e(10). The FDCPA was enacted “to eliminate abusive debt collection practices by debt collectors, to ensure that 14 those debts collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.” Miller v. Javitch, Block & Rathbone, 561 F.3d 588, 591 (6th Cir. 2009) (quoting 15 U.S.C. § 1692(e)). ¶26 To assess whether particular conduct violates the FDCPA, courts use the “least sophisticated debtor” standard. See Swanson v. Southern Oregon Credit Service, Inc., 869 F.2d 1222, 1227 (9th Cir. 1988). This objective standard “ensure[s] that the FDCPA protects all consumers, the gullible as well as the shrewd.” Clomon v. Jackson, 988 F.2d 1314, 1318-19 (2nd Cir. 1993). ¶27 When applying the “least sophisticated consumer” standard, the misleading statement must also be materially false or misleading to violate FDCPA 15 U.S.C. § 1692e. Miller at 596-97. “The materiality standard simply means that in addition to being technically false, a statement would tend to mislead or confuse the reasonable unsophisticated consumer.” Wallace v. Washington Mut. Bank, F.A., 683 F.3d 323, 326-27 (6th Cir. 2012). ¶28 The District Court concluded that Bayview committed numerous violations using false representations and unfair and deceptive practices to collect against the Jacobsons. Loan Modification ¶29 The District Court found that Bayview’s authorized representatives told the Jacobsons to stop making payments on their loan in May 2009 under the premise that it would help them get a loan modification. Bayview also advised the Jacobsons that they 15 would not qualify for a HAMP modification without actually reviewing a HAMP application submitted by the Jacobsons. Then, instead of assisting with a loan modification, Bayview commenced foreclosure proceedings against the Jacobsons. When the Jacobsons subsequently sought outside help, first from the Better Business Bureau and then from Senator Tester’s office, Bayview finally engaged in “in-house” loan modification negotiations. Bayview offered the first loan modification and the Jacobsons rejected it because the terms were onerous. In the second negotiation (with assistance from Senator Tester’s office), Bayview offered an acceptable loan modification but refused to provide the offer in writing, resulting in its rejection by the Jacobsons. The District Court found that Bayview’s false offers and promises to modify constituted a false representation in connection with the collection of a debt and a deceptive practice in the conduct of trade or commerce in violation of 15 U.S.C. § 1692e and § 30-14-103, MCA. ¶30 Bayview argues that the District Court “completely misstates” the record regarding negotiations between the parties, and that loan modification procedures were online for the Jacobsons to access. In other words, Bayview did not fail to send a HAMP application to the Jacobsons; the Jacobsons failed to pursue the option. Bayview asserts that the loan modification negotiations were fair and the Jacobsons rejected the offer out of hand. Finally, however, Bayview admits that its representative advised the Jacobsons not to make mortgage payments. 16 ¶31 The Jacobsons support the District Court’s findings regarding the loan modification citing substantial evidence relied upon by the court. They argue that evidence regarding the loan modifications was offered at trial, and the court made a proper determination that Bayview made false representations that misled them in regard to their modification options. ¶32 From the outset, we see no clear error in the District Court’s conclusions regarding the loan modifications; the court relies on credible evidence. Bayview’s arguments offered here were thoroughly weighed by the District Court. The court found Robin Jacobson’s testimony regarding Bayview’s questionable HAMP application procedures and subsequent negotiations for modification to be reliable, and gave it the greater weight in light of the false statements made by Bayview’s witnesses to the court. The District Court gave proper weight to testimony based on its evaluation of the witnesses and supported its conclusions with substantial evidence. Furthermore, Bayview advised the Jacobsons to stop making payments on their home while beginning foreclosure and negotiating in bad faith regarding in-house loan modification. These false representations caused the Jacobsons to question how they could modify or cure their default, and whether they could trust any representation by Bayview regarding their loan. We conclude the District Court relied on substantial evidence and properly found the false representations regarding the loan modification were materially misleading and violations of 15 U.S.C. § 1692(e) and § 30-14-103, MCA. 17 Foreclosure—False Representation of Debtor’s Rights ¶33 The District Court found that Bayview misrepresented the Jacobsons’ rights regarding the reinstatement of their loan when it misinformed the Jacobsons regarding their ability to cure and reinstate their loan within 5 days preceding the foreclosure sale in its letters to the Jacobsons. The court determined that this was an unfair or deceptive practice in violation of A.R.M. § 23.19.101(1)(l) and was a false representation of the debtor’s rights in violation of 15 U.S.C. § 1692e(10). The District Court also found that Bayview improperly advised the Jacobsons regarding their contractual rights by demanding cure of the default in less than 30 days instead of the full 30 days, and failed to give a specific date for cure provided by the Trust Indenture § 22(c). The District Court determined these violations were false representations of the Jacobsons’ rights in violation of 15 U.S.C. § 1692e(10) and constituted unfair practices in violation of 15 U.S.C. § 1692f and § 30-14-103, MCA. ¶34 Bayview does not deny these errors. Instead, it argues the errors are immaterial because there was never a sale or foreclosure, and that the violations are only technical and not the type of violation that the FDCPA intends to punish. The Jacobsons argue that these are exactly the type of violations the FDCPA intends to prevent. ¶35 We find no error in the District Court’s interpretation or perception of the evidence. Bayview failed to properly notify the Jacobsons regarding the timing of their right to cure. Bayview’s argument does not hold up when compared to the statute. The FDCPA provides that false representations connected to debt collection and “attempts to 18 collect any debt” are violations of the law. 15 U.S.C. § 1692e(10) (emphasis added). Bayview’s misrepresentations of the Jacobsons’ rights to cure the default pertained to “attempts” to collect on the loan. Bayview’s misrepresentations regarding the time for cure changed the contractual and statutory rights provided to the Jacobsons by cutting short the time available for cure. Further, no specific date for cure was provided to the Jacobsons, materially affecting their rights. The District Court correctly concluded Bayview’s false representations about the Jacobsons’ legal rights are a violation of 15 U.S.C. § 1692e(10) and under 15 U.S.C. § 1692f are an unfair practice; the FDCPA violations also constitute violations of § 30-14-103, MCA. Beneficiary Status ¶36 The District Court found that Bayview was never the beneficiary on the Jacobsons’ loan. Accordingly, the court concluded that Bayview misrepresented itself as the beneficiary in both notices of trustee’s sale when Bayview stated: “[t]he beneficial interest is currently held by Bayview Loan Servicing, LLC” as servicer for CitiMortgage. The District Court held this constituted a false representation in connection with the collection of a debt and a deceptive practice in the conduct of trade or commerce in violation of 15 U.S.C. § 1692e and § 30-14-103, MCA. Bayview admits the misrepresentation but argues the District Court erred in its conclusion because the misrepresentation is irrelevant and immaterial to the Jacobsons’ default. ¶37 We conclude the misrepresentation was material because the Jacobsons were misled regarding the identity of the beneficiary, which directly affected their ability to 19 resolve the debt. In addition, Bayview created a false corporation to hold the note, made false representations regarding the note, and made an improper beneficiary designation; the result is materially misleading to the consumer. Given the wide range of misrepresentations, the “least sophisticated consumer” would clearly have difficulty ascertaining who owns the loan, and who can foreclose or resolve the loan. Bayview’s misrepresentation regarding the beneficiary of the Trust Indenture was a material misrepresentation and the District Court properly concluded it was a deceptive practice in violation of the FDCPA and the MCPA. Bayview’s Improper Communications ¶38 The FDCPA prohibits a debt collector from communicating with a consumer in connection with the collection of any debt “if the debt collector knows the consumer is represented by an attorney . . . .” 15 U.S.C. § 1692c(a)(2). The District Court determined that Bayview knew the Jacobsons were represented by counsel on June 9, 2010. The District Court found that at least four letters (June 28, 2010, January 18, 2011, February 1, 2011, and July 1, 2013) sent to the Jacobsons after that date were direct communications to collect a debt in violation of the statute. Bayview argues that these communications were not violations of 15 U.S.C. § 1692c because they were not attempts to collect a debt. However, the argument fails because the letters state “[t]his letter is an attempt to collect a debt . . . .” Bayview knew the Jacobsons were represented by counsel but persisted in sending debt collection notices in violation of the statute. The District Court’s conclusions regarding Bayview’s direct communications with the Jacobsons are 20 properly based on substantial evidence. The District Court did not err when it determined Bayview improperly contacted the Jacobsons. False Assignments ¶39 The District Court found numerous FDCPA violations pertaining to Bayview’s assignments of the Jacobsons’ Trust Indenture. The court sifted through a confusing series of assignments finding the following: Bayview falsely told the Jacobsons that U.S. Bank was the “current” beneficiary of the Trust Indenture and Bayview was servicing on U.S. Bank’s behalf; Bayview then falsely represented that CBO-6 REO Corp. existed and that the loan was transferred to the entity on June 10, 2010; Bayview also falsely represented that it was servicing the loan on behalf of the non-existent entity; Bayview recorded the false assignment without authority (because it was not the beneficiary and was not attorney-in-fact for the beneficiary), to a non-existent entity, CBO-6 REO Corp. It did not stop there. Bayview then misinformed the District Court that Bayview was the current beneficiary of the loan when it was not. Bayview also provided false discovery answers claiming to have no communications with either U.S. Bank or CBO-6 REO Corp. and Bayview representative Gerardo Trueba admitted at trial that he prepared false discovery responses regarding the misrepresentations. The District Court concluded that this long series of Bayview’s actions was in violation of 15 U.S.C. § 1692e and § 30-14-103, MCA. ¶40 Bayview argues that the District Court’s conclusions regarding Bayview’s false assignments are erroneous. It argues that Bayview’s foreclosure activity is not debt 21 collection, that the false assignments do not give rise to an actionable FDCPA claim, and that it is not a violation of the FDCPA to initiate foreclosure before a note and mortgage assignment is completed so long as it occurs prior to final judgment. The Jacobsons argue that Bayview’s misrepresentations of the identity of the original creditor are materially misleading and violations of the FDCPA. ¶41 The core of Bayview’s argument is that it can assign the note and mortgage so long as it occurs prior to final judgment on the foreclosure. To support this argument, Bayview cites Whittiker v. Deutsche Bank Nat’l Trust Co., 605 F. Supp. 2d 914, 931 (N.D. Ohio 2009), a case in which the court found no violation of the FDCPA when the bank (DBNTC) falsely asserted it was the owner and holder of the notes and mortgages. There, the court determined the claim failed because it was not misleading or deceptive because the bank, which was properly the mortgage holder, could assign the loan so long as the process was complete prior to final judgment in the foreclosure. Bayview relies on the court’s conclusion that “simple inability to prove present debt ownership at the time a collection is filed does not constitute a FDCPA violation.” Whittiker at 929. ¶42 Bayview’s actions here are easily distinguished from the actions in Whittiker. Bayview’s misdeeds go far beyond a “simple inability to prove ownership” of the debt. Whittiker at 929. Bayview made numerous misrepresentations as part of the false assignments of the loan. It falsely represented that it was “attorney-in-fact” for U.S. Bank when it assigned the Trust Indenture to “CBO-6 REO Corp.” when it did not exist. The assignment to the non-existent entity was made with a false notarization by Bayview 22 and its employee. From there, Bayview falsely told the Jacobsons that U.S. Bank was the current beneficiary, and falsely stated that it was servicing the loan for U.S. Bank. U.S. Bank was never the beneficiary. Bayview never had authority to assign the loan because it never was the beneficiary. Bayview misinformed the court that it was the beneficiary of the loan. Bayview also admitted to providing false discovery answers. Finally, Bayview recorded the assignment under false authority to a fictitious creditor. ¶43 Bayview’s arguments fall short because the sum of its misrepresentations is not “simple.” Instead, Bayview’s activities are seriously misleading misrepresentations regarding the Jacobsons’ loan and its status. The misrepresentations are material because they would mislead the “least sophisticated consumer” due to the confusion regarding who owns the loan and who possesses authority to impose requirements on the Jacobsons regarding payment of the loan. Individually, and taken as a whole, the false misrepresentations and conduct misled the Jacobsons regarding the status of their loan and its true owner. The District Court did not err; it properly concluded that Bayview’s false assignments and surrounding misrepresentations and conduct were unfair and deceptive practices in violation of 15 U.S.C. § 1692e, f, and the MCPA. ¶44 The District Court’s factual findings pertaining to Bayview’s violations of the FDCPA are supported by substantial evidence. Bayview repeatedly violated the FDCPA and MCPA, and violated the contractual requirements of the Trust Indenture. Bayview’s arguments that the violations are immaterial and irrelevant fail to account for intentional violations of the law. Bayview’s unfair and deceptive practices against the Jacobsons 23 cannot be tolerated as they are clear violations of the FDCPA and the MCPA. We conclude that the District Court made detailed and accurate conclusions of law under the FDCPA and accordingly, we affirm its decision with respect to the FDCPA claims. ¶45 2. Whether the District Court erred in determining that Bayview violated the MCPA. ¶46 The Montana Consumer Protection Act declares “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are unlawful.” Section 30-14-103, MCA. In Baird v. Norwest Bank, we determined that the Montana Consumer Protection Act applies to “consumer loans by banks in the lending and collecting of such loans.” 255 Mont. 317, 328, 843 P.2d 327, 334 (1992). This Court further determined that under the Montana Consumer Protection Act, “an unfair act or practice is one which offends established public policy and . . . is either immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.” Rohrer v. Knudson, 2009 MT 35, ¶ 31, 349 Mont. 197, 203 P.3d 759. In Morrow, we noted it is “an unfair or deceptive practice when a party ‘states that a transaction involves rights, remedies or obligations that it does not involve.’” Morrow, ¶ 67 (citing Admin. R. M. 23.19.101(1)(l)). We further added that “[a] consumer may sue under the act if he or she has suffered ‘any ascertainable loss of money or property’ as the result of an unfair practice.” Morrow, ¶ 67 (citing § 30-14-133, MCA). ¶47 Bayview disputes the District Court’s determination that Bayview violated the Montana Consumer Protection Act. Bayview argues that MCPA claims must be established on “independent grounds” and that neither the Jacobsons, “nor the District 24 Court, cite any authority in the MCPA itself, or in any authority construing the MCPA, for the proposition that purported violations of the FDCPA are also violations of the MCPA.” For its “independent grounds” argument, Bayview cites Federal Home Loan Mortgage Corp. v. Lamar, 503 F.3d 504, 513 (6th Cir. 2007). ¶48 In Lamar, the Sixth Circuit states, “the purpose of both acts [the FDCPA and OCSPA [Ohio Consumer Sales Practices Act]] is to prohibit both unfair and deceptive acts and this court holds that any violation of any one of the enumerated sections of the FDCPA is necessarily an unfair and deceptive act or practice in violation of [Ohio’s OCSPA] R.C. § 1345.02 and/or § 1345.03.” Lamar at 513 (emphasis added). A cursory reading of the Lamar opinion establishes that Bayview misinterpreted the facts and law of Lamar when it concluded that violations of the OCSPA (a law substantially similar to Montana’s MCPA) require “independent grounds” from the FDCPA. The OCSPA claims in the Lamar case failed because they relied entirely on the FDCPA claims, which the court determined were not substantiated by the plaintiffs. In this case, the FDCPA and MCPA claims rely on the same grounds, and we have determined that the FDCPA claims are valid; thus, the MCPA claims succeed on the same basis. We reiterate here and hold that it is well established that a violation of federal consumer law pursuant to the FDCPA can also constitute grounds for violation of Montana law pursuant to the MCPA. See Morrow, ¶¶ 67-69 (holding that HAMP claims under the FDCPA are violations sufficient to state claims under the MCPA and, more generally, both the FDCPA and MCPA apply to the “collection and servicing of loans”); see also, Lamar at 513. 25 ¶49 On the merits, the District Court provided substantial evidence that Bayview’s Action violated the MCPA. In Morrow, we held that instructing a borrower to default on a loan, giving conflicting representations regarding the borrower’s status, all while causing the borrower’s default to grow constitutes a practice “substantially injurious to consumers” in violation of the MCPA. Morrow, ¶¶ 67-69. Here, the District Court found that Bayview told the Jacobsons not to make payments, while at the same time commencing foreclosure. Bayview also violated provisions of the Trust Indenture § 22(c) and § 71-1-306(2), MCA. These violations are very similar to those addressed in Morrow and clearly constitute violations of Montana law while also in violation of the FDCPA. ¶50 In addition, Bayview violated Admin. R. M. 23.19.101(1)(l) when it failed to provide an option for cure of the default in the five days preceding the Trustee’s sale. The result of this violation would be “substantially injurious” to the Jacobsons and falls well within unfair or deceptive practices prohibited by the MCPA. The District Court also found specific grounds for Peterson’s liability, as he acted pursuant to an invalid Trustee substitution when he twice initiated foreclosure proceedings against the Jacobsons. The District Court properly concluded the action was a violation of § 71-1-306(2), MCA, and § 30-14-103, MCA. Finally, the court correctly concluded that Bayview’s attempt to collect attorney fees and expenses post-trial against the Jacobsons was a clear violation of the FDCPA and the MCPA. 26 ¶51 We conclude that the District Court’s findings under the FDCPA regarding Bayview’s actions establish state law grounds for violations of the MCPA. Further, we find no error in the District Court’s conclusions because the findings are supported by substantial evidence demonstrating Bayview and Peterson’s liability under the MCPA. ¶52 3. Whether the District Court erred in awarding damages to the Jacobsons. ¶53 Section 27-1-202, MCA, provides that “[e]very person who suffers detriment from the unlawful act or omission of another may recover . . . [damages].” Section 30-14-133(1), MCA, provides that “[t]he court may, in its discretion, award up to three times the actual damages sustained and may provide any other equitable relief that it considers necessary or proper.” The MCPA provides this discretion to the courts “without imposing any particular criteria, to grant an award of treble damages if it finds that such an increase will further the purpose of the CPA.” Vader, ¶ 47. A district court’s damage determination is a factual finding this Court will uphold if the finding is supported by substantial evidence. Watson v. West, 2009 MT 342, ¶ 18, 353 Mont. 120, 218 P.3d 1227 (citing Tractor & Equipment Co. v. Zerbe Bros., 2008 MT 449, ¶ 12, 348 Mont. 30, 199 P.3d 222). This Court will not overturn a district court’s determination of damages unless it is clearly erroneous. Watson, ¶ 18 (citation omitted). ¶54 The District Court awarded $226,408.14 on the FDCPA and MCPA claims, which Bayview argues is not based on any injury sustained by the Jacobsons and is not supported by evidence that could be construed as a violation of the FDCPA. Specifically, the District Court awarded $172,615.20 of actual damages and $50,000.00 of additional 27 damages “for emotional distress suffered by the Jacobsons together with the deception, stonewalling, and utter disregard for their contractual and statutory rights that the Jacobsons have been forced to endure as a result of [Bayview’s] conduct.” The court also assessed statutory damages of $1,000.00 for each of the Jacobsons under 15 U.S.C. § 1692k(a)(2). The court awarded money damages, emotional distress damages, statutory damages, and additional damages for Bayview’s post-trial actions under the MCPA, which we review individually. Damages ¶55 The District Court concluded that because Bayview resisted payment and instructed the Jacobsons not to pay on their loan, the Jacobsons incurred damages resulting from Bayview’s conduct, and those damages were the late charges and interest that Bayview assessed to the Jacobsons. To determine damages, the District Court used Bayview’s February 5, 2010 “Notice of Trustee’s Sale.” The court calculated damages across a date range from the first defective notice of foreclosure on March 24, 2009, until the second day of trial on November 22, 2013. Thus, per the notice, this included $1,792.94 in late charges, plus the interest accrued since the first notice of default until the second day of trial, which was $101.30 interest per day multiplied by 1,704 days or $172,615.20. ¶56 Bayview argues that because the Jacobsons’ house was never foreclosed and sold, its actions have not damaged the Jacobsons in any way, because no “actual damage” was sustained under the provisions of 15 U.S.C. § 1692k(a)(1) (stating that a debt collector 28 who fails to comply with the provisions of the FDCPA is liable to such person in an amount equal to that persons actual damages). Under Bayview’s reasoning, a loan servicer could undertake any sort of action to collect debt so long as the loan does not actually foreclose. This logic fails because the FDCPA and the MCPA were enacted to stop unfair practices including false representations of the sort Bayview has used in this case. Furthermore, Bayview does not have to be successful in its debt collection actions; it is liable for false representations and unfair practices because it was “attempting” to collect debt. 15 U.S.C. § 1692e(10). ¶57 Here, in addition to its deception and unfair practices, Bayview imposed late charges and interest on the Jacobsons’ loan, increasing the amount of their default. In Morrow, we determined that causing a consumer’s default to grow would “constitute a practice substantially injurious to consumers.” Morrow, ¶¶ 68-69. Here, Bayview instructed the Jacobsons to miss payments and default on their loan. That default led to subsequent misrepresentations by Bayview regarding the Jacobsons’ rights, including their ability to cure the default. While Bayview was making misrepresentations to the Jacobsons and using unfair practices, it was simultaneously increasing the amount of their liability on their loan through late charges and interest. Similar to Morrow, this increase in the loan liability is substantially injurious to the Jacobsons. The District Court correctly found that the Jacobsons suffered a financial detriment because their loan liability was wrongfully increased as a result of Bayview’s actions. 29 ¶58 We find further support for this conclusion in Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012). The U.S. Seventh Circuit Court of Appeals determined that Wigod alleged recoverable pecuniary loss under the Illinois Consumer Protection Act as a result of unfair HAMP procedures by Wells Fargo. Wigod, 673 F.3d at 575. The court found Wigod’s allegations that “she incurred costs and fees, lost other opportunities to save her home, suffered a negative impact to her credit, never received a Modification Agreement, and lost her ability to receive incentive payments during the first five years of the modification” were sufficient to establish pecuniary loss. Wigod, 673 F.3d at 575.2 The Jacobsons have suffered a pecuniary loss similar to that suffered by Wigod and accordingly, we conclude that the damages suffered by the Jacobsons are a financial detriment and the losses are properly considered actual damages by the District Court. We reject Bayview’s contentions that the Jacobsons have suffered no financial detriment as a result of Bayview’s conduct. There is no question that the Jacobsons suffered a financial detriment as a result of Bayview’s unfair practices and conduct. We conclude 2 We also note that the Seventh Circuit Court of Appeals included the following at endnote 14 of their opinion for additional support of this conclusion: “In a number of third-generation HAMP cases, district courts have found that plaintiffs successfully pled claims under other states’ analogous consumer fraud statutes.” See, e.g., Allen v. CitiMortgage, Inc., No. CCB-10-2740, 2011 U.S. Dist. LEXIS 86077, 2011 WL 3425665, at *10 (D. Md. Aug. 4, 2011) (“The plaintiffs have alleged that CitiMortgage’s misleading letters led to the following damages: damage to Mrs. Allen’s credit score, emotional damages, and forgone alternative legal remedies to save their home. Accordingly, at this stage, the plaintiffs have stated sufficiently an actual injury or loss as a result of a prohibited practice under [the Maryland Consumer Protection Act].”); Stagikas v. Saxon Mortg. Services, Inc., 795 F. Supp. 2d 129, 137 (D. Mass. 2011) (“The complaint also alleges several injuries resulting from defendant’s allegedly deceptive representations about plaintiff’s HAMP eligibility, including increased interest on the debt, a negative impact on plaintiff’s credit history, and the loss of other economic benefits of the loan modification. That is enough to sustain a claim of injury under [the Massachusetts Consumer Protection Act].) (internal citation omitted).” Wigod, 673 F.3d at 575, n.14. 30 that these injuries alleged under the FDCPA and MCPA find a proper remedy in actual damages. ¶59 We do not find error with the District Court’s damage award because it is reasonable compensation for the substantial injury and financial detriment suffered by the Jacobsons. As noted above in ¶ 56, the court calculated damages from the date of the first defective notice of foreclosure on March 24, 2009, through the second day of trial on November 22, 2013. The interest charged totaled $172,615.20, and the late charges totaled $1,792.94. If Bayview was the mortgage holder in this case, we would direct that the late charges and interest that have accumulated on the mortgage balance since the date of the first defective notice of foreclosure be subtracted from the present mortgage balance. However, Bayview is merely the loan servicer; it does not hold the mortgage. In order that the Jacobsons have the funds necessary to pay down the mortgage balance by the amount of late charges and accumulated interest, we deem it appropriate to uphold this aspect of the District Court’s damage award against Bayview. In addition, because we are remanding to the District Court for a hearing to determine attorney fees on appeal, the District Court should also take the opportunity on remand to assess any additional late charges and interest that have accumulated on the debt from November 22, 2013, through the date of the District Court’s final order following remand. Emotional Distress Damages ¶60 Under § 30-14-133(1), MCA, the District Court awarded $50,000.00 to the Jacobsons for emotional distress damages based on testimony from Robin Jacobson 31 “together” with damages for the deceit, stonewalling, and disregard for the Jacobsons rights. Bayview contests the award claiming the District Court speculated to obtain the amount of damages without testimony or evidence. The Jacobsons argue that substantial evidence establishes the damages inflicted by Bayview including the inability to determine the holder of their Promissory Note or the beneficiary of their Trust Indenture, and the consequent loss of ability to properly resolve the default. ¶61 Under § 30-14-133(1), MCA, the District Court is granted broad authority to award, in its discretion, “up to three times the actual damages sustained and may provide any other equitable relief that it considers necessary or proper.” (Emphasis added.) Here, the District Court properly awarded damages under the MCPA based upon testimony regarding the emotional distress of the Jacobsons and on the sum of the damages “the Jacobsons were forced to endure” as a result of Bayview’s misconduct. Robin Jacobson’s testimony and the extensive record of Bayview’s misdeeds are substantial evidence offered by the court to support the damages. Further, we note that under the FDCPA, witness testimony alone is sufficient to support an award for emotional distress damages with no requirement for substantial evidence to support the damages. Zhang v. American Gem Seafoods, Inc., 339 F.3d 1020, 1040 (9th Cir. 2003). We conclude it was well within the District Court’s discretion to award these damages. Statutory Damages ¶62 The District Court awarded statutory damages under 15 U.S.C. § 1692k(a)(2)(A) of $1,000.00 for each of the Jacobsons as individual plaintiffs in the case. Bayview 32 argues the damages are limited to $1,000.00 in any one action under the statute. The language of subsection 1692k(a)(2)(A) on its face dictates that a debt collector is liable for a single award of statutory damages per plaintiff per lawsuit. In this case, the District Court awarded a single award of $1,000.00 for each plaintiff in their lawsuit against Bayview. Each plaintiff has an individual stake in the lawsuit, and we conclude that the District Court properly awarded statutory damages to each of the Jacobsons. Post-Trial Communication Damages ¶63 After trial, the District Court awarded damages under the MCPA of $50,000.00 on the first post-trial motion and $10,000.00 on the second post-trial motion when Bayview improperly contacted the Jacobsons about collections and attorney fees on two separate occasions. Bayview argues that the damages are awarded in error as they are not supported by “substantial credible” evidence. The Jacobsons accurately contend that Bayview fails to discuss or analyze the District Court’s additional damage award as its briefing only raises but does not analyze the issue. Nonetheless, we will briefly address the issue on the merits. ¶64 Part of the inherent “remedial purpose” of the damage provisions of the MCPA is to deter inappropriate action against consumers by debt collectors, or in this case, loan servicing companies. Vader, ¶ 48. An award of damages may benefit the plaintiffs in a case, but its remedial nature also serves as notice to all that violations of the MCPA are consequential and will not be tolerated. 33 ¶65 Here, the District Court issued two additional orders in the case. The August 20, 2014 Order was on a Motion for Additional Damages, Equitable Relief, and Sanctions sought by the Jacobsons because Bayview, after trial, directly contacted them to collect on the loan and attorney fees in violation of the Judgment in the case, the MCPA, and the FDCPA. The District Court found for the Jacobsons on the motion and ordered Bayview to pay $50,000.00 “to further the remedial purposes of the [MCPA].” The second Order was on a Motion for Contempt of Court by the Jacobsons after Bayview contacted them again for collection purposes and to inform them that it intended to charge the Jacobsons for Bayview’s attorney fees related to the case. The District Court found that Bayview’s actions violated the Small Tract Financing Act, the FDCPA, the MCPA, and the court’s judgment in the case. The District Court awarded the Jacobsons an additional $10,000.00 as equitable relief under the MCPA. ¶66 The two damage awards are well within the court’s discretion under § 30-14-133(1), MCA. The damages serve as a proper deterrent under the Act to stop Bayview’s improper conduct and to “further the purpose of the [MCPA]” by providing warning to Bayview and other loan servicers that improper debt collection conduct will not be tolerated. Vader, ¶ 47. The damages are supported by substantial evidence and demonstrate a thorough, well-reasoned remedy fashioned by the court. We conclude that the District Court did not err in awarding damages to the Jacobsons. 34 ¶67 4. Whether this Court should award costs and fees to the Jacobsons on appeal. ¶68 The Jacobsons contend that attorney fees are available for consumers who successfully defend a verdict in their favor under the MCPA. Vader ¶¶ 52-53. They also argue that the Ninth Circuit Court of Appeals has held that a plaintiff who successfully defends an FDCPA action is entitled to attorney fees and costs on appeal. Joe v. Payco-General Am. Credits., 34 F.3d 1072 (9th Cir. 1994). The Jacobsons request that we remand this matter to the District Court for a determination of reasonable attorney fees and costs incurred on appeal. ¶69 We have held that, under the MCPA, attorney fees and costs are allowed upon successful defense of a verdict on appeal. Vader, ¶¶ 50-53. The MCPA states, “[i]n any action brought under this [Act] the court may award the prevailing party reasonable attorney fees incurred in prosecuting or defending the action.” Section 30-14-133(3), MCA; Vader, ¶ 52. In this action, the Jacobsons are entitled to fees and costs because they necessarily defended the verdict in their favor. Bayview has not objected to an award of attorney fees and costs on appeal. Accordingly, we remand this matter to the District Court to determine a reasonable award of attorney fees incurred by the Jacobsons in the defense of their claims on appeal. CONCLUSION ¶70 The District Court did not err when it determined that Bayview violated the FDCPA when it made false representations to the Jacobsons regarding the Trust Indenture and engaged in unfair trade practices to collect the debt. Bayview violated 35 § 30-14-103, MCA, because any violation of the FDCPA corresponds with an unfair and deceptive act or practice in violation of the Act. The District Court properly determined damages incurred by the Jacobsons as a result of Bayview’s actions and supported those conclusions with substantial evidence. We conclude that the Jacobsons are entitled to their attorney fees and costs on appeal because they have necessarily defended the verdict in their favor under § 30-14-133(3), MCA. ¶71 Affirmed. /S/ MICHAEL E WHEAT We Concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ JAMES JEREMIAH SHEA /S/ JIM RICE Justice Jim Rice, concurring. ¶72 I concur in the Court’s opinion. ¶73 The Court holds that Bayview committed numerous “clear violations of the FDCPA,” Opinion, ¶ 44, and analyzes those violations extensively under Issue 1. I think it bears repeating that, for procedural reasons, we have not undertaken consideration of Bayview’s argument that the FDCPA does not apply, as a matter of law, to foreclosure of secured interests. Thus, the Court’s holdings on that issue rest on the assumption that the Act applies, which is how we have determined the matter was litigated before the District Court. If properly raised and preserved, this would be a threshold issue about which, as 36 the parties note, there has been spirited debate in the federal courts. See Gray v. Four Oak Court Ass’n, Inc., 580 F. Supp. 2d 883, 887 (D. Minn. 2008) (FDCPA’s “definition of ‘debt collector’ clearly reflects Congress’s intent to distinguish between ‘the collection of any debts’ and ‘the enforcement of security interests.’”) (citation omitted); Derisme v. Hunt Leibert Jacobson P.C., 880 F. Supp. 2d 339, 363 (D. Conn. 2012) (“a majority of courts who have addressed this question have also concluded that foreclosing on a mortgage does not qualify as debt collection activity for purposes of the FDCPA” and collecting cases); cf. Kaymark v. Bank of Am., N.A., 783 F.3d 168, 179 (3d Cir. 2015) (“Nowhere does the FDCPA exclude foreclosure actions from its reach. On the contrary, foreclosure meets the broad definition of ‘debt collection’ under the FDCPA . . . .”) (citation omitted). Consequently, resolution of this threshold issue is left for another day. /S/ JIM RICE

May 4, 2016

559d0946-dd70-4171-ad2a-05cf5fd9e80b

State v. Gilhousen

2016 MT 100N

DA 15-0396

Montana

Montana Supreme Court

DA 15-0396 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 100N STATE OF MONTANA, Plaintiff and Appellee, v. PHILIP JASON GILHOUSEN, Defendant and Appellant. APPEAL FROM: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DC-12-179B Honorable Mike Salvagni, Presiding Judge COUNSEL OF RECORD: For Appellant: Herman A. “Chuck” Watson, III, Attorney at Law, Bozeman, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy A. Hinderman, Assistant Attorney General, Helena, Montana Marty Lambert, Gallatin County Attorney, Eric Kitzmiller, Deputy County Attorney, Bozeman, Montana Submitted on Briefs: February 24, 2016 Decided: May 3, 2016 Filed: __________________________________________ Clerk May 3 2016 Case Number: DA 15-0396 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 On July 1, 2014, following a bench trial, Philip Jason Gilhousen was found guilty of violating § 45-5-213, MCA, assault with a weapon, a felony, and § 45-6-101, MCA, criminal mischief, a misdemeanor, in the Montana Eighteenth Judicial District Court, Gallatin County. He appeals from the judgment entered against him. The sole issue on appeal is whether Gilhousen was afforded effective assistance of trial counsel. We affirm. ¶3 On September 10, 2012, Gilhousen chased a man into the Pizza Hut restaurant on East Main Street in Bozeman, Montana. He carried a piece of metal rebar, which he used to hit the front door of the restaurant and shatter the glass. He left the restaurant and attempted to pry a license plate from a parked vehicle. He then left the Pizza Hut premises, carrying both the metal rebar and a metal fencepost. He crossed paths with a male passerby, whom he did not know, and struck him with the fencepost, hitting the male’s left arm and abdomen. He next encountered a UPS driver, who noticed Gilhousen was extraordinarily agitated. After Gilhousen began moving aggressively toward the driver, the driver sought refuge in the locked cargo area of his delivery truck. Gilhousen 3 then struck the side of the delivery truck with the driver inside. Gilhousen next approached a man driving his vehicle near the Pizza Hut. The man believed Gilhousen wanted to cross the street so he slowed down. Gilhousen struck the passenger side of the truck with one of the metal objects he was carrying, gouging the side of the truck. ¶4 Bozeman police officer Jonathan Ogden responded to a police call regarding Gilhousen’s behavior. Officer Ogden located Gilhousen walking west from the Pizza Hut. Officer Ogden ordered Gilhousen to drop the metal objects, and Gilhousen complied. Gilhousen then removed his shirt and began wrapping it around his hand. Officer Ogden ordered Gilhousen to drop the shirt, to which Gilhousen eventually complied, but then lowered himself to the ground on top of the objects he had dropped. When Officer Ogden ordered Gilhousen to stand and move away from the objects he noticed Gilhousen held an open knife in his hand. In the meantime other officers had arrived to assist Officer Ogden. Gilhousen took a step toward the officers, knife in hand. The officers then pulled their duty weapons and Officer Ogden instructed Gilhousen to drop the knife, move away from the objects, place his hands on his head, and kneel on the ground. Gilhousen complied. Officer Ogden testified Gilhousen looked as though he might have been slightly confused, but seemed to come to realize the situation with multiple officers on the scene and complied with his commands. ¶5 Gilhousen is chronically mentally ill, with a long history of psychotic episodes, including violent episodes with criminal conduct. He suffers from schizoaffective disorder, bipolar type. Initially, he hired two attorneys to represent him against the charges stemming from the September incidents. Throughout the course of their 4 representation Gilhousen’s mental illness was discussed as to whether Gilhousen should be examined to determine if he suffered from a mental disease or defect at the time of the offenses. At defense counsel’s request, presiding Judge Salvagni issued an order for Gilhousen’s mental examination and he was placed on a waiting list at the Montana State Hospital (MSH). Ultimately, Gilhousen objected to the evaluation, stated to the trial judge he understood the proceedings, fired his attorneys, and was appointed a public defender, Andrew Breuner. Breuner filed a motion to withdraw the request for a mental evaluation, citing speedy trial concerns. Gilhousen’s current claims of ineffective assistance of counsel are based on Breuner’s decision not to raise the defense of mental disease or defect, and only raise evidence of mental illness at sentencing. ¶6 A criminal defendant may raise the issue of mental disease or defect at two separate points during a criminal proceeding. The defendant may present evidence at trial that he suffers from a mental disease or defect that makes him unable to have had the requisite state of mind at the time the offense was committed. Section 46-14-102, MCA; State v. Korell, 213 Mont. 316, 322, 690 P.2d 992, 996 (1984). After conviction, a defendant may present evidence that the defendant was unable to appreciate the criminality of his conduct or to conform his conduct to the law due to a mental disease or disorder. Section 46-14-311, MCA; Korell, 213 Mont. at 323, 690 P.2d at 996. ¶7 Ineffective assistance of counsel claims that are based on the facts of record must be raised on direct appeal. Hagen v. State, 1999 MT 8, ¶ 12, 293 Mont. 60, 973 P.2d 233. When a record does not illuminate the basis for the challenged acts or omissions of defense counsel, objections must be raised in a petition for postconviction relief. Hagen, 5 ¶¶ 12, 15. The record is silent as to why Breuner chose not to raise the defense of mental disease or defect. The record indicates that Breuner requested the court withdraw the request for a mental health evaluation because of speedy trial issues due to the waiting period of the evaluation at the MSH. The record also indicates Gilhousen sought his own psychological evaluation privately. The record further indicates from Gilhousen himself that he adamantly did not want an evaluation at the MSH. There are reasonable tactical reasons that Breuner may have had to justify choosing not to raise a mental disease or defect defense, or he may have been simply carrying out his client’s wishes. Based on this record we cannot definitively address Gilhousen’s claims of ineffective assistance of counsel. The appropriate method of addressing these allegations of ineffectiveness is through postconviction relief. ¶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. ¶9 Affirmed. /S/ MICHAEL E WHEAT We Concur: /S/ JAMES JEREMIAH SHEA /S/ PATRICIA COTTER /S/ LAURIE McKINNON /S/ JIM RICE

May 3, 2016

fdf30f2b-dea8-4fbf-9ad0-74ec87c2189a

Montana v. Colvin

2016 MT 129

DA 15-0373

Montana

Montana Supreme Court

DA 15-0373 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 129 STATE OF MONTANA, Plaintiff and Appellant, v. DANIEL JOSEPH COLVIN, Defendant and Appellee. APPEAL FROM: District Court of the Sixth Judicial District, In and For the County of Park, Cause No. DC-14-61 Honorable Brenda Gilbert, Presiding Judge COUNSEL OF RECORD: For Appellant: Timothy C. Fox, Montana Attorney General, Katie F. Schulz, Assistant Attorney General, Helena, Montana Bruce E. Becker, Park County Attorney, Kathleen Carrick, Chief Deputy County Attorney, Livingston, Montana For Appellee: Karl Knuchel, Shenandoah R. Roath, Karl Knuchel, P.C., Livingston, Montana Submitted on Briefs: April 27, 2016 Decided: May 31, 2016 Filed: __________________________________________ Clerk May 31 2016 Case Number: DA 15-0373 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 The State of Montana appeals from the District Court’s Decision and Order filed June 2, 2015, granting Daniel Joseph Colvin’s motion to dismiss. We affirm. ¶2 We restate the issue on appeal as follows: Did the District Court err in dismissing the charge against Colvin based upon his claim that the State failed to preserve exculpatory evidence? FACTUAL AND PROCEDURAL BACKGROUND ¶3 On October 9, 2014, the State charged Colvin by information with attempted deliberate homicide in the September 4, 2014 shooting of Michael Aja. At the time of the incident Aja was sitting in his Jeep vehicle. Colvin claimed that he was holding the pistol inside the driver’s side window when it accidently fired and hit Aja. On the same day as the shooting, law enforcement officers seized and impounded the Jeep as evidence. As the case developed, the position of the pistol and its distance from the victim when fired became important issues to the prosecution and the defense. The State’s theory was that the pistol shot came from several feet outside the vehicle, while Colvin’s theory was that it came from very near or inside the window. Colvin also contends that each eyewitness to the incident, including the victim, supports his theory that the shot was fired from near or inside the vehicle window. ¶4 On October 9, the same day that the State filed the charge, Colvin’s attorney filed a motion for discovery pursuant to § 46-15-322, MCA. The motion listed numerous objects and categories of requested information, specifically including the vehicle in which Michael Aja was shot and “all material exculpatory or inculpatory of the 3 defendant.” The defense believed that the vehicle contained essential evidence such as blood spatter and gunshot residue. On October 14 the District Court entered an order granting the defense discovery motion, requiring disclosure of “all materials known or discovered . . . pertinent to this case.” That same day the State filed a motion for leave to return a wallet and keys to Michael Aja. ¶5 On October 30, 2014, the State’s expert witness examined the vehicle and collected evidence, including photographs. The expert subsequently concluded, based upon his examination of the vehicle and other evidence, that Colvin was seven feet from the vehicle when he fired the shot. On November 9, 2014, the State returned the vehicle to the victim Michael Aja. The State did not notify the defense or the District Court that it intended to release the vehicle and did not seek leave of the District Court to do so. ¶6 On November 21, 2014, Colvin’s attorney, still not knowing that the State released the vehicle, filed a motion to compel, contending that the State had not complied with the Court’s October 14 order requiring discovery. The District Court granted the motion to compel, requiring the State to produce “all completed discovery information currently in the State’s possession.” ¶7 On December 10 the State provided additional items of discovery to Colvin’s attorney, including a receipt disclosing that the Jeep vehicle was returned to Michael Aja on November 9, 2014. This was the State’s first notice to the defense that the vehicle was no longer in State custody. The State never informed Colvin or his attorney of its intent to return the vehicle, and the State never sought or obtained leave from the District 4 Court to do so. After the State returned the vehicle, Michael Aja used it for his daily travel needs. The State provided its expert’s report to the defense on February 10, 2015. ¶8 On February 26, 2015, Colvin moved to dismiss the charge based upon the State’s failure to preserve the vehicle. On June 2, 2015, after briefing by the parties, the District Court entered its Decision and Order Regarding Defendant’s Motion to Dismiss. The District Court granted Colvin’s motion and dismissed the charge against him based upon the State’s failure to preserve the vehicle. The District Court relied upon the constitutional due process right of criminal defendants to obtain exculpatory evidence held by the prosecution. Brady v. Maryland, 373 U.S. 83, 83 S. Ct. 1194 (1963). The District Court determined that the “release of the vehicle amounted to the loss of the crime scene itself, or at least the most significant component of the crime scene.” The District Court noted that there was “a significant dispute in the position of the State and the defense as to where the defendant was standing when the gun discharged.” The District Court determined that after release of the vehicle and Aja’s daily use, the defense had no means to obtain evidence as it existed at the time the State’s expert gathered his evidence. The State’s expert examined the vehicle while it was impounded and collected evidence to determine where Colvin was standing when the shot was fired. ¶9 The District Court concluded that the State’s “negligent” release of the impounded vehicle in the face of an order requiring disclosure “deprived the defense of the opportunity to investigate and prove their theory of the case. This is a fundamental violation of due process.” Further, because the vehicle was released back to Michael Aja for daily use, the District Court concluded that its evidentiary value to the defense “is 5 now lost.” The District Court concluded that this deprivation of evidence was a violation of Colvin’s right to due process and required dismissal of the charge. STANDARDS OF REVIEW ¶10 A district court’s decision on a motion to dismiss charges in a criminal case presents a question of law that this Court reviews de novo. State v. Schauf, 2009 MT 281, ¶ 13, 352 Mont. 186, 216 P.3d 740. Review is plenary, to determine whether the district court is correct. State v. Hardaway, 2001 MT 252, ¶ 64, 307 Mont. 139, 36 P.3d 900. Findings of fact are reviewed to determine whether they are clearly erroneous. State v. Fregien, 2006 MT 18, ¶ 8, 331 Mont. 18, 127 P.3d 1048. A district court’s discretionary decisions are reviewed for abuse of discretion. State v. Breeding, 2008 MT 162, ¶ 10, 343 Mont. 323, 184 P.3d 313. DISCUSSION ¶11 Did the District Court err in dismissing the charge against Colvin based upon his claim that the State failed to preserve exculpatory evidence? ¶12 A criminal defendant has a right to obtain exculpatory evidence held by the government. The United States Supreme Court has established that “suppression by the prosecution of evidence favorable to an accused upon request violates due process where the evidence is material either to guilt or to punishment, irrespective of the good faith or bad faith of the prosecution.” Brady, 373 U.S. at 87, 83 S. Ct. at 1196-97. The purpose of the Brady rule “is not punishment of society for misdeeds of a prosecutor but avoidance of an unfair trial to the accused.” Brady, 373 U.S. at 87, 83 S. Ct. at 1197. Material evidence is evidence which is more than conclusory or speculative; a material 6 fact is one that is relevant to the cause of action or the defense, and requires resolution by the trier of fact. Hopkins v. Superior Metal Workings, 2009 MT 48, ¶ 5, 349 Mont. 292, 203 P.3d 803. A Brady due process violation depends upon “suppression of material evidence favorable to a defendant.” State v. Seifert, 2010 MT 169, ¶ 14, 357 Mont. 188, 237 P.3d 669. ¶13 A Brady violation of due process occurs when the defendant establishes that the State possessed evidence that had exculpatory or impeachment value to the defense; the evidence was willfully or inadvertently suppressed; and that suppression prejudiced the defense. State v. Root, 2015 MT 310, ¶ 19, 381 Mont. 314, 359 P.3d 1088. The last element—prejudice to the defense—is sometimes stated in terms of a burden to show that the outcome of the proceedings would have been different had the evidence been provided.1 State v. Gollehon, 1999 MT 210, ¶ 15, 296 Mont. 6, 986 P.2d 395. The defendant is not required to show that the evidence would have led to acquittal, Kyles v. Whitley, 514 U.S. 419, 434, 115 S. Ct. 1555, 1565-66 (1995), and a defendant meets his burden by showing that suppression of the evidence was prejudicial to the defense. State v. Ellison, 2012 MT 50, ¶ 16, 364 Mont. 276, 272 P.3d 646. ¶14 On appeal the State argues that the District Court should have held an evidentiary hearing before deciding the motion to dismiss; that dismissal is a severe sanction limited to egregious cases of governmental misconduct; that there was no showing of intentional 1 In a case like the present one where there was no trial or plea, it will clearly be difficult to show or to determine whether the outcome of the proceeding would have been different had the evidence not been suppressed. That factor, therefore, is not pertinent to resolution of the present case but may be relevant in other cases, depending upon the facts. 7 destruction of the evidence; and that Colvin failed to establish the exculpatory nature of the evidence. ¶15 The State charged Colvin with attempted deliberate homicide. An essential element of that offense is intent—the State must prove that the defendant acted “purposely or knowingly” to attempt to cause the death of another. Section 45-5-102(1)(a), MCA. Whether Colvin acted purposely or knowingly was an issue for both sides. Colvin, for example, points to a purported statement by the victim that the gun was close to his face when it discharged. As the District Court found, Colvin made a sufficient showing that the distance from which the shot was fired would be a critical issue regarding intent in this case. A shot from a distance outside the vehicle would tend to support the State’s charge that Colvin fired purposely or knowingly, while a shot fired adjacent to or inside the vehicle window would support Colvin’s defense that the gun discharged accidently. ¶16 The State’s expert concluded that the shot came from a distance of seven feet from the vehicle. This conclusion was based at least in part on the evidence that the expert obtained during his inspection of the vehicle. As the District Court found, the vehicle was the crime scene and after it was released could not be returned to the condition it was in when examined by the State’s expert. This, at a minimum, severely hampered any defense effort to examine and use the blood spatter, powder residue and other evidence from the vehicle. Until the time the vehicle was released to Aja, the State clearly believed that evidence on and in the Jeep was important to determining what happened in the shooting. The State retained an expert to examine the vehicle and the expert used 8 evidence gathered from that examination in reaching an opinion as to how the shooting happened. ¶17 The State argues that the evidence inside the Jeep “still exists” and that the defense is at fault for not pursuing it. However, this is just speculation as to the condition of the vehicle “crime scene” and the extent to which intervening time, use, cleaning and weather compromised important evidence. The State also argues that Colvin could obtain the same evidence that its expert obtained from the vehicle. The State asserts that Colvin could “recreate the shooting” by using the actual or a substitute vehicle. This is a novel suggestion, given that the blood spatter from the victim’s wound is concededly one of the important factors that an expert would analyze. ¶18 The decision in State v. Buckles, 1999 MT 79, 294 Mont. 95, 979 P.2d 177, does not assist the State’s position. The State charged Buckles with negligent homicide following a single-vehicle accident in which a passenger died. Law enforcement officers seized and impounded the vehicle, but subsequently released it. Buckles contended that this was a Brady violation; that examination of the interior of the vehicle could have revealed important evidence about whether he was the driver; and that the charge should be dismissed. However, since Buckles admitted to responding officers that he was the driver, he was unable to establish any reasonable probability that retention of the vehicle would yield a different result. Buckles, ¶ 12. ¶19 The State attempts to shift blame for this situation to the defense, arguing that if only the defense had examined the vehicle earlier, it would have been in its impounded condition. However, the defense motion for discovery specifically requested that the 9 State provide the vehicle for inspection, and at the time the State released the vehicle, the State was under an order to provide discovery. The State released the vehicle only 10 days after the State’s expert examined it. Further, as to other seized material not at issue (keys and wallet), the State had taken the reasonable step of providing notice and obtaining leave of the Court to return those items. There is no reasonable way that the defense could have guessed that if it did not act to examine the untampered vehicle at some unknown time, the opportunity to do so would be lost. We agree that the loss of the original condition of the victim’s vehicle was prejudicial to Colvin. ¶20 We find no basis to disturb the District Court’s determination that the vehicle was the crime scene and that the blood spatter and gunshot residue on and in it were important evidence for the prosecution and the defense. We find no basis to disturb the District Court’s conclusion that after the vehicle was released and used by Aja for a period of time, it was “no longer intact” as it existed at the time of the shooting or at the time the State’s expert examined it. ¶21 The State contends that it was an abuse of discretion to dismiss the charge against Colvin as a result of the Brady violation rather than selecting some alternative outcome. However, the District Court had few real alternatives to dismissal. Precluding the State from using the evidence it gleaned from the vehicle, for example, would not assist Colvin in developing evidence to support his defense that he fired the gun close to the victim by accident. We are not persuaded by the State’s speculation that the intervening use of the vehicle has not altered the essential blood spatter and gunshot residue evidence, and that Colvin could recreate the shooting and replicate the evidence. 10 ¶22 The State further contends that dismissal of charges should be reserved for cases of egregious governmental conduct to hide or destroy evidence favorable to the defense. The State does not explain how the release happened in this case except to assert that it was done inadvertently. While there is no evidence of bad faith conduct by the State, it was at least reckless to release the vehicle while an order requiring its production to the defense was in place. The District Court had discretion to fashion a remedy under the facts and circumstances of the case, including dismissal. State v. Halter, 238 Mont. 408, 413, 777 P.2d 1313, 1316-17 (1989); State v. Swanson, 222 Mont. 357, 362, 722 P.2d 1155, 1158 (1986). In any event, based upon the clear holding in Brady, the inquiry should be upon whether the evidence was material to the case and how it impacted the defense, regardless of whether the evidence was lost through intentional or inadvertent conduct. The fundamental purpose of the Brady rule is not to punish the government for misconduct; it is to protect the due process rights of the accused. Brady, 373 U.S. at 87, 83 S. Ct. at 1197. There can be no real issue that the vehicle evidence here was material to the case for both the prosecution and the defense. ¶23 The State argues that it was error for the District Court to decide Colvin’s motion to dismiss without holding an evidentiary hearing. However, there is no express requirement that a court considering a Brady issue must hold an evidentiary hearing. It may do so as a matter of discretion. Halter, 238 Mont. at 413, 777 P.2d at 1316-17. While the State speculates on appeal about the evidence it could have presented, it did not request a hearing in the District Court where these issues could have been addressed. The State also did not file any affidavits but simply responded by brief to Colvin’s motion to 11 dismiss. The parties briefed the issues and the District Court was able to determine whether an evidentiary hearing would assist the decision. The District Court was within its discretion in determining whether to hold a hearing and we find no error. City of Helena v. Wittinghill, 2009 MT 343, ¶ 23, 353 Mont. 131, 219 P.3d 1244. CONCLUSION ¶24 We agree with the District Court’s conclusion that the State’s release of the vehicle was a violation of Colvin’s right to due process and we affirm the order dismissing the charge. ¶25 Affirmed. /S/ MIKE McGRATH We Concur: /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA /S/ PATRICIA COTTER

May 31, 2016

beaf2927-3ce1-4f80-97b7-b762e15ebc93

State v. Lance

2016 MT 97N

DA 15-0329

Montana

Montana Supreme Court

DA 15-0329 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 97N STATE OF MONTANA, Plaintiff and Appellee, v. JOHN FESLER LANCE, II, Defendant and Appellant. APPEAL FROM: District Court of the Twenty-First Judicial District, In and For the County of Ravalli, Cause No. DC 14-237 Honorable Jeffrey H. Langton, Presiding Judge COUNSEL OF RECORD: For Appellant: John Fesler Lance, II, Self-Represented, Deer Lodge, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy K Plubell, Assistant Attorney General, Helena, Montana William Fulbright, Ravalli County Attorney, Hamilton, Montana Submitted on Briefs: March 16, 2016 Decided: April 26, 2016 Filed: __________________________________________ Clerk April 26 2016 Case Number: DA 15-0329 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 John Fesler Lance, II (Lance) appeals a decision from the Twenty-First Judicial District Court, Ravalli County, relative to his most recent jury trial on February 23, 2015. The District Court prevented Lance from presenting evidence regarding his 1979 dissolution decree and ordered him to pay restitution. The issue is whether the District Court properly precluded an already-adjudicated issue from being submitted to the jury, and whether the District Court properly awarded restitution. We affirm. ¶3 Lance’s issues stem from his 1979 divorce decree, which led to a sheriff’s sale of his real property near Florence, Montana. Lance unsuccessfully contested the divorce decree and the Florence property’s sale. Undeterred, Lance continued his attempts to regain the property, which led to three convictions for felony intimidation and a commitment to the Montana State Prison. While at the Montana State Prison, Lance continued to send harassing correspondence to the current owners of the property. On March 26, 2014, the Ravalli County Justice Court granted the current owners a Permanent Order of Protection from Lance. ¶4 On March 31, 2014, the State discharged Lance. On September 15, 2014, Lance violated the order of protection for a second time since his March release. On February 3 23, 2015, a jury convicted Lance of four offenses: (1) felony intimidation; (2) felony stalking; (3) misdemeanor order of protection violation; and (4) misdemeanor criminal trespass. On March 25, 2015, the District Court sentenced Lance to 75 years for each felony conviction and six months for each misdemeanor offense, all to run concurrently. The District Court sentenced Lance “to a prison designated by the Montana Department of Corrections, for execution of this, the sentence and judgment of the Court.” It also ordered Lance to pay $16,129.35 for restitution and a $1,612.93 Restitution Surcharge Fee. ¶5 Lance has challenged the divorce decree and property sale’s validity for over three decades, leading to three decisions and three orders from this Court. See Lance v. Lance, 195 Mont. 176, 635 P.2d 571 (1981) (upholding the Lances’ divorce decree because of Lance’s untimely attempt to reopen his dissolution proceedings); In re Marriage of Lance, 213 Mont. 182, 690 P.2d 979 (1984) (upholding a district court’s dismissal of Lance’s custody modification petition for lack of jurisdiction); State v. Lance, 222 Mont. 92, 721 P.2d 1258 (1986) (upholding Lance’s criminal intimidation charges and the intimidation statute’s constitutionality); Lance v. Fourth Judicial Dist. of Mont., No. OP 11-0553, 363 Mont. 416, 2011 Mont. LEXIS 501 (December 6, 2011) (denying Lance’s petition for writ of mandamus from another civil case attacking his divorce decree’s validity and his 25 years of incarceration for felony intimidation); Lance v. Twenty-First Judicial Dist., Nos. OP 11-0747, 11-0748, 11-0771, 364 Mont. 551, 2012 Mont. LEXIS 118 (February 14, 2012) (consolidating and denying three separate petitions seeking a writ of error coram vobis because M. R. Civ. P. 60(e) abolished such a writ, and no other 4 writ applied to the facts); Lance v. Fourth Judicial Dist. Court, No. OP 13-0289, 2013 Mont. LEXIS 284 (June 19, 2013) (denying Lance’s petition for a writ of supervisory control from another civil matter contesting his divorce decree’s validity). ¶6 We review a district court’s evidentiary ruling for abuse of discretion. State v. Nichols, 2014 MT 343, ¶ 8, 377 Mont. 384, 339 P.3d 1274. A district court has broad discretion for ruling on the admissibility of evidence. State v. Payne, 2011 MT 35, ¶ 15, 359 Mont. 270, 248 P.3d 842. ¶7 During the February 23, 2015 pretrial conference, the District Court determined that the “issue of the title to the [property] . . . is done and over with. It’s not relevant to these proceedings.” Lance contends the District Court erred in determining his divorce decree and property sale issues were not relevant to a trial concerning his most recent intimidation charges. “Relevant evidence means having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” M. R. Evid. 401. “Evidence which is not relevant is not admissible.” M. R. Evid. 402. The District Court properly withheld Lance’s divorce decree and property sale evidence because these issues have already been adjudicated multiple times and were properly excluded on the basis of issue preclusion. ¶8 Issue preclusion “bars the reopening of an issue that has been litigated and resolved in a prior suit.” Kullick v. Skyline Homeowners Assn., 2003 MT 137, ¶ 18, 316 Mont. 146, 69 P.3d 225. Issue preclusion prevents litigants from “incessantly waging piecemeal, collateral attacks against judgments.” Baltrusch v. Baltrusch, 2006 MT 51, 5 ¶ 15, 331 Mont. 281, 130 P.3d 1267. Issue preclusion bars relitigation of an issue if four elements are met: (1) an identical issue was previously raised in prior adjudication; (2) a final judgment on the merits was issued in the prior adjudication; (3) the party against whom issue preclusion is asserted was a party or in privity with a party to the prior adjudication; and (4) the party against whom issue preclusion is asserted must have been afforded a full and fair opportunity to litigate any issues which may be barred. Baltrusch, ¶ 18. ¶9 Here, all four elements are met. First, the issues of Lance’s divorce and the property sale are identical to those previously adjudicated. In 1981, this Court held that Lance’s decree of dissolution was “conclusive as to all issues raised by the pleadings actually litigated and adjudged.” “[And his] marriage to [his ex-wife] is finally terminated and that for the good of his children it is time to take some new directions.” Lance, 195 Mont. at 184, 635 P.2d at 576 (holding the Lances’ divorce decree final because Lance failed to timely contest it; and intrinsic fraud—as opposed to extrinsic— did not excuse the untimely attempt). This Court has also already addressed the property sale issue: “Lance lost his interest in the [property], which was sold pursuant to a sheriff’s sale. Lance failed to appeal in a timely manner or to timely seek relief from the judgment, and we affirmed the District Court.” Lance, 2012 Mont. Lexis 118, ¶ 3. Second, the divorce and property sale issues were resolved on their merits. Those issues revolve around Lance’s procedural failures during his divorce proceedings. Lance argues his failure to timely contest the divorce resulted in a default judgment not appropriate for issue preclusion. This argument is misplaced as the issue is not the merits of the 6 underlying divorce, but whether its final resolution is void because of a procedural mistake. This Court determined the procedural issue on the merits when we decided Lance failed to timely contest his divorce decree. Lance, 195 Mont. at 184, 635 P.2d at 576. Third, Lance was a party to the prior adjudication. He was a party to the underlying divorce decree, and all subsequent appeals relating to that adjudication. Finally, the district courts and this Court have provided Lance with a full and fair opportunity to litigate the legitimacy of his divorce decree and, in turn, the property sale. All four issue preclusion elements are met; therefore, we will not analyze the merits of Lance’s issues regarding his divorce decree or sale of the property. ¶10 Lance also contends issue preclusion is inapplicable when the validity of a judgment is appealed. We decline to address this argument again, as we have already done so in our June 19, 2013 Order, where we stated: Lance has repeatedly sought to vacate the decree of dissolution and correspondingly nullify the [property] foreclosure. Lance attempts to vacate the decree of dissolution and thereby nullify the sale of the [property] so Lance could pursue his actual innocence claim in order to set aside his felony Intimidation convictions. Simply referring to the decree of dissolution as “void” does not make it so. Lance has made similar claims in other proceedings. Lance, 2013 Mont. LEXIS 284. ¶11 Lance contends his restitution and restitution surcharge fee are legally deficient because the District Court failed to state its findings related to the §§ 46-18-241 through -249, MCA, requirements. At the March 25, 2015 sentencing hearing, Lance objected to moving forward with sentencing before the District Court considered his motion for retrial. Lance did not object to the court-ordered restitution, but raises this 7 issue for the first time on appeal. Generally, when a defendant has not made a contemporaneous objection to the trial court’s alleged error, we will not review the alleged error on appeal. Section 46-20-104(2), MCA. The objection must be contemporaneous and specific. State v. Johnson, 2011 MT 116, ¶ 21, 360 Mont. 443, 254 P.3d 578 (declining to address a measurement of restitution because the defendant failed to specifically object to its lack of victim affidavits below, even though he did object to the sentencing date). Although illegal sentences are reviewable for the first time on appeal, “a sentencing court’s failure to abide by a statutory requirement rises to an objectionable sentence, not necessarily an illegal one . . . .” State v. Kotwicki, 2007 MT 17, ¶ 13, 335 Mont. 344, 151 P.3d 892. Here, Lance appeals the District Court’s alleged failure to adhere to statutory requirements. As we held in Johnson, the District Court’s alleged failure to follow statutory requirements results in an objectionable sentence. Lance has waived this issue for appellate consideration because he failed to object below.1 ¶12 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 1 Lance also requests this Court to review his restitution issue using the common law plain error doctrine. Lance raised the doctrine for the first time in his Reply Brief and failed to state the doctrine’s requisite elements. Legal theories raised for the first time in an appellant’s reply brief are outside the scope of such a brief and an appellate court does not address them. See M. R. App. P. 12(3); Loney v. Milodragovich, Dale & Dye, P.C., 273 Mont. 506, 512, 905 P.2d 158, 162 (1995). 8 application of applicable standards of review. The District Court’s ruling was not an abuse of discretion. We affirm. /S/ JAMES JEREMIAH SHEA We Concur: /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ JIM RICE

April 26, 2016

b829159e-2fde-41ba-897b-0129a4214100

Guardianship of H.O.

2016 MT 133N

DA 15-0565

Montana

Montana Supreme Court

DA 15-0565 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 133N IN THE MATTER OF THE GUARDIANSHIP OF: H.O., A Protected Person. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DG-14-29 Honorable Robert L. Deschamps, III, Presiding Judge District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DG-12-072C Honorable Heidi Ulbricht, Presiding Judge COUNSEL OF RECORD: For Appellants: Julie R. Sirrs, Boone Karlberg P.C., Missoula, Montana (Attorney for John H. Osorio) John Michael Myers, Myers Law, PLLC, Whitefish, Montana (Attorney for Karlene A. Khor and Debra D. Thorson) For Appellee: Fred Simpson, Reep, Bell, Laird, Simpson & Jasper, P.C., Missoula, Montana (Attorney for Linda St. Peter) Bill Hooks, Chief Public Defender, Eli Parker, Assistant Public Defender, Office of the Public Defender, Missoula, Montana (Attorney for Protected Person H.O.) Submitted on Briefs: April 13, 2016 Decided: May 31, 2016 Filed: __________________________________________ Clerk May 31 2016 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 John Osorio, Karlene Khor, and Debra Thorson (collectively, “the siblings”) appeal orders of the Fourth Judicial District Court, Missoula County, dissolving a temporary co-guardianship and co-conservatorship between Osorio and Linda St. Peter, appointing St. Peter as H.O.’s permanent full guardian and conservator, and denying Osorio’s motion to order St. Peter to remit payments made by H.O.’s estate for her attorney fees. We address: (1) Whether the District Court abused its discretion in appointing St. Peter as H.O.’s permanent guardian and conservator; and (2) Whether the District Court abused its discretion in denying Osorio’s motion to order St. Peter to remit payments made by H.O.’s estate for her attorney fees. We affirm. ¶3 H.O. is ninety-one years old and has dementia. He currently resides at Hunter’s Glen, an assisted living facility in Missoula, Montana. St. Peter, Osorio, Khor, and Thorson are H.O.’s children. In 1999, H.O. executed a General Durable Power of Attorney, naming his wife, Betty, as his agent and St. Peter as his substitute agent should Betty cease to act due to her death, incapacity, or resignation. In the same document, H.O. named Betty as his guardian and conservator of his estate and St. Peter as substitute guardian and conservator should Betty cease to act due to her death, incapacity, or 3 resignation. In 2012, Betty was diagnosed with terminal cancer; she died in March 2013. In the spring of 2012, Betty asked H.O. and Betty’s attorney, Richard DeJana, to draft an irrevocable trust naming St. Peter as trustee. The couple executed the trust in front of DeJana at their home. At the couple’s request, DeJana also drafted a consent, which H.O. signed, appointing St. Peter as his guardian and conservator. ¶4 In November 2012, St. Peter petitioned the Eleventh Judicial District Court, Flathead County (Flathead County District Court), for appointment as H.O.’s guardian and conservator. Betty signed St. Peter’s petition, thereby “consent[ing] to join [St. Peter] in asking the Court to appoint her as full Guardian and Conservator of the Estate of [H.O.] and that the appointment be for the remainder of his life.” After St. Peter filed the petition, Betty and H.O. moved to Missoula. ¶5 In March 2013, the Flathead County District Court appointed St. Peter to temporarily serve as H.O.’s guardian and conservator. The siblings objected and cross-filed a petition to be appointed H.O.’s permanent guardian and conservator. In October 2013, after a hearing, the Flathead County District Court appointed Osorio to temporarily serve as H.O.’s co-guardian and co-conservator with St. Peter. In February 2014, venue transferred from the Flathead County District Court to the Fourth Judicial District Court, Missoula County. In March 2015, Osorio filed a motion to order St. Peter to remit payments made by H.O.’s estate for her attorney fees. The District Court held hearings on the petitions for appointment of H.O.’s guardian and conservator on June 29, August 21, and August 27, 2015. All parties appeared with their counsel, and H.O. appeared through his counsel. 4 ¶6 On September 3, 2015, the District Court issued its findings of fact, conclusions of law, and order, dissolving the Flathead County District Court’s temporary co-guardianship and co-conservatorship and appointing St. Peter as H.O.’s “permanent full guardian and conservator.” On September 18, 2015, the District Court issued an order denying Osorio’s motion to order St. Peter to remit payments made by H.O.’s estate for her attorney fees. The siblings jointly appeal these orders. ¶7 We review a district court’s appointment of a guardian and conservator for a clear abuse of discretion. In re Guardianship & Conservatorship of A.M.M., 2015 MT 250, ¶ 16, 380 Mont. 451, 356 P.3d 474. “A district court abuses its discretion when it acts arbitrarily without conscientious judgment or exceeds the bounds of reason.” Cleveland v. Ward, 2016 MT 10, ¶ 9, 382 Mont. 118, 364 P.3d 1250. We determine de novo whether a district court correctly interpreted and applied the relevant guardianship and conservatorship statutes. In re J.A.L., 2014 MT 196, ¶ 7, 376 Mont. 18, 329 P.3d 1273. ¶8 We review a district court’s findings of fact for clear error and conclusions of law for correctness. A.M.M., ¶ 14. “A finding of fact is clearly erroneous if substantial evidence does not support it, if the district court misapprehended the effect of the evidence, or if, after reviewing the record, this Court is left with a firm conviction that a mistake has been made.” A.M.M., ¶ 14 (quoting Redies v. Cosner, 2002 MT 86, ¶ 11, 309 Mont. 315, 48 P.3d 697). We review for abuse of discretion a district court’s evidentiary rulings. Cleveland, ¶ 9. 5 ¶9 1. Whether the District Court abused its discretion in appointing St. Peter as H.O.’s permanent guardian and conservator. ¶10 The siblings’ contentions that the District Court abused its discretion in appointing St. Peter as H.O.’s guardian and conservator are summarized as follows: (1) the District Court incorrectly interpreted and applied the guardianship and conservatorship statutes regarding priority of appointment; (2) the District Court erred in finding that St. Peter did not breach her fiduciary duties to H.O.; and (3) the District Court abused its discretion in not considering certain evidence and did not properly weigh the evidence it did consider. ¶11 Priority of appointment of a guardian is determined pursuant to § 72-5-312, MCA; priority of appointment of a conservator is determined pursuant to § 72-5-410, MCA. Pursuant to § 72-5-312(2)(a), MCA, a competent person “nominated by the incapacitated person if the court specifically finds that at the time of the nomination the incapacitated person had the capacity to make a reasonably intelligent choice” has guardianship priority over other competent persons. However, this priority is “not binding, and the court shall select the person . . . that is best qualified and willing to serve.” Section 75-5-312(3), MCA. Pursuant to § 72-5-410(1), MCA, the court may appoint, in the following order, a person as conservator of the estate of a protected person: (a) a conservator, guardian of property, or other like fiduciary appointed or recognized by the appropriate court . . . ; (b) an individual nominated by the protected person if the person is 14 years of age or older and has, in the opinion of the court, sufficient mental capacity to make an intelligent choice . . . . However, “[t]he court, for good cause, may pass over a person having priority and appoint a person having less priority or no priority.” Section 72-5-410(3), MCA. 6 ¶12 After holding three separate hearings, in which it heard testimony from numerous witnesses, experts, and the parties themselves, the District Court concluded: “Apart from [Osorio]’s self-serving assertions, the evidence on this issue was one-sided and pointed solely to [St. Peter] as the person that [H.O.] and Betty wanted to serve as [H.O.]’s guardian and conservator when the need arose.” The Court emphasized the “multiple estate planning documents demonstrating that [H.O.] and Betty reposed their trust in [St. Peter] to handle their affairs.” St. Peter was named as the personal representative in H.O. and Betty’s wills; as trustee of the irrevocable trust established by H.O.; as H.O.’s substitute agent, guardian, and conservator under H.O.’s Power of Attorney; and as H.O.’s guardian and conservator in the consent H.O. signed. The District Court found that, although there was some evidence that H.O. may have revoked his Power of Attorney on December 19, 2012, the purported revocation “was not effective” because: (1) it was not filed with the County Clerk; (2) H.O. never delivered the revocation to St. Peter; (3) the proceedings in this matter were filed, and St. Peter was H.O.’s lawfully- appointed and acting guardian and conservator, before St. Peter or the Court became aware of the alleged revocation; and (4) Adult Protective Services (APS) Regional Supervisor Janice Hinze administered a cognitive test of H.O. on December 28, 2012, on which he scored significantly below normal, so his capacity to knowingly revoke his Power of Attorney was “at best suspect.” ¶13 In addition, at the June 19, 2015 hearing, H.O.’s attorney, Eli Parker, stated that H.O. supported St. Peter’s petition because St. Peter had been caring for him “all along,” and H.O. had no complaints regarding her care. DeJana testified that H.O. and Betty 7 clearly intended to name Linda as guardian, conservator, and trustee. According to DeJana, after the couple signed the trust and guardianship documents, Betty told him the couple did not want to make any changes to the documents, despite pressure from Osorio to include him. DeJana testified that Betty said she signed St. Peter’s petition to be H.O.’s guardian and conservator because the siblings “were going to make life hell for [St. Peter]. And she wanted them to know that she approved of this and she was in line with doing it.” ¶14 We have long held that we will not substitute our judgment for that of the trial court “regarding the credibility of witnesses and the weight of their testimony.” In re Seizure of $ 23,691.00 in U.S. Currency, 273 Mont. 474, 485, 905 P.2d 148, 155 (1995) (citation omitted). This is because “[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 Seizure, 273 Mont. at 485, 905 P.2d at 155 (citation omitted). The District Court correctly applied Montana’s guardianship and conservatorship statutes regarding priority of appointment because there is substantial record evidence that H.O. intended St. Peter to be his designated guardian and conservator. We decline to substitute our judgment for that of the District Court. ¶15 Similarly, we will not fault the District Court, as the siblings request, for finding that St. Peter’s role in helping H.O. apply for Veteran’s Administration benefits weighed in favor of her appointment as his guardian and conservator. See Hallenberg v. Gen. Mills Operations, Inc., 2006 MT 191, ¶ 33, 333 Mont. 143, 141 P.3d 1216 (“[W]e will 8 not reweigh conflicting evidence or second guess the District Court’s assessment of the credibility of the evidence.”) (internal quotation marks and citation omitted). Moreover, the siblings have not alleged that the outcome would have been different had the Court not considered this factor to be in St. Peter’s favor. ¶16 The siblings also contend that St. Peter breached her fiduciary duties to H.O. as his temporary guardian and conservator “by making hidden, unauthorized charges on her deceased mother’s credit cards and paying for those with H.O.’s limited funds.” Pursuant to § 72-38-804, MCA, “[a] trustee shall administer the trust as a prudent person would, by considering the purposes, terms, distributional requirements, and other circumstances of the trust. In satisfying this standard, the trustee shall exercise reasonable care, skill, and caution.” Further, “[i]n administering a trust, the trustee may incur only costs that are reasonable in relation to the trust property, the purposes of the trust, and the skills of the trustee.” Section 72-38-805, MCA. The District Court found that “no evidence was adduced that [St. Peter] converted any of [H.O.]’s funds to her own use.” On appeal, the siblings have not pointed to evidence that contradicts this finding. Moreover, during the August 21, 2015 hearing, Osorio admitted that St. Peter’s use of the credit card under Betty’s name “was revealed from the very beginning,” and that he did not object to St. Peter’s use of that card. In a separate case related to H.O.’s trust, the district court issued an order giving Osorio ten days to file objections to St. Peter’s expenditures from the sale of H.O.’s home; Osorio never filed any objections. ¶17 “[T]he guiding principle to evaluate a guardian’s actions should be whether they seek some benefit to the ward, or are in the ward’s best interests.” J.A.L., ¶ 12. While a 9 large portion of the funds went to St. Peter’s attorney fees, the District Court concluded that the costs St. Peter incurred were reasonable in relation to her duties as H.O.’s guardian and conservator. The Court stated: “not a penny of this would have been spent if [the siblings] had simply honored their father’s wishes and let [St. Peter] do the job she was entrusted and appointed to do.” The overwhelming evidence that H.O. intended St. Peter to be appointed his guardian and conservator supports the District Court’s conclusion that St. Peter did not breach her fiduciary duties by expending H.O.’s funds to defend H.O.’s wishes. ¶18 The siblings also contend that St. Peter defied a court order when she allegedly “failed to inform [Osorio] she had incurred over $45,000, much less obtain his consent,” and that she breached her duty as trustee, conservator, and an attorney to provide an accurate inventory and accounting. However, the siblings failed to produce any evidence on the issue of what is required for a conservatorship accounting, or what special duties an attorney has to administer a trust. The siblings’ own expert, Pat Dougherty, testified that St. Peter was not required to seek Osorio’s consent for expenditures she made from the trust. The District Court acknowledged that St. Peter’s accounting may have been less than perfect but did not find a breach of her fiduciary duty. Rather, the District Court found that St. Peter acted at all times in H.O.’s best interests. These findings are supported by substantial record evidence: the siblings themselves made statements at trial indicating that H.O. and Betty desired St. Peter to be H.O.’s guardian and conservator and that she had done well in caring for Betty. Thorson agreed that Betty trusted St. Peter to care for H.O., and Osorio stated that St. Peter “did a great job with my mother.” 10 ¶19 Further, claims similar to those the siblings make on appeal were investigated by APS and determined to be unfounded. Shortly after H.O. and Betty moved to Hunter’s Glen, APS received a referral to investigate allegations that H.O. was forcefully moved to Missoula, and that St. Peter took $30,000 from the couple’s account. Hinze investigated the allegations by visiting the couple at their apartment. At the June 29, 2015 hearing, Hinze testified that H.O. told her he liked living at Hunter’s Glen and did not feel pressured to move or stay there against his will. Betty told Hinze she wanted St. Peter to handle the couple’s affairs. Betty also indicated that Osorio wasn’t interested in the couple’s welfare, and that Khor had been abusing Betty for years. Hinze testified that the couple decided not to give their contact information to the siblings, and that St. Peter was not preventing the couple from communicating with the siblings. After meeting with the couple, it was Hinze’s belief that H.O. “did concur with having [St. Peter] as guardian and conservator.” In January 2013, Hinze conducted a follow-up visit with the couple and concluded that allegations that St. Peter was mistreating H.O. were unfounded. Hinze also emailed the State Ombudsman for Hunter’s Glen, writing that she “found no abuse, neglect or exploitation in this case.” ¶20 Finally, the siblings contend that the District Court erred in excluding evidence of a transcript from an unrelated proceeding in Florida and failed to consider portions of the Flathead County District Court record. Pursuant to M. R. Evid. 103(a), “[e]rror may not be predicated upon a ruling which admits or excludes evidence unless a substantial right of the party is affected.” The siblings offer no explanation of how the exclusion of the Florida transcript affected their rights in this case, apart from a blanket statement that 11 their substantial rights were affected. Similarly, the siblings offer no explanation of how the District Court’s decision to not conduct a more in-depth review of the Flathead County District Court record affected their substantial rights. The District Court’s statements indicate that it reviewed and considered the transcripts from the Flathead County District Court hearings and concluded that the additional testimony was cumulative and not necessary for a proper consideration of the issues. Moreover, the Flathead County District Court’s appointment of Osorio as co-guardian and co-conservator was temporary; the District Court did not reverse that appointment, but merely dissolved it after the six-month term was over. “District courts have broad discretion to control the admission of evidence at trial,” Cleveland, ¶ 9, and we cannot conclude that the District Court acted arbitrarily without conscientious judgment or exceeded the bounds of reason in making these evidentiary decisions. Nor can we conclude, given the substantial record evidence supporting the District Court’s decision to appoint St. Peter as H.O.’s guardian and conservator, that the District Court’s decision not to consider this evidence affected the siblings’ substantial rights. ¶21 Contrary to the siblings’ contentions, the District Court did consider alternatives to St. Peter. The Court found that none of the siblings were suitable based on factors including their locations of residence, schedules, credibility as witnesses, history of disinterest with H.O.’s affairs, and witness testimony regarding H.O. and Betty’s intent. Apart from H.O.’s alleged revocation of his power of attorney, the siblings point to no evidence that H.O. wanted anyone but St. Peter to be his guardian and conservator. In their Reply Brief, the siblings allege that H.O. indicated to his attorney that he had no 12 preference for who would serve as his guardian and conservator, and that H.O. implied Khor should be his guardian because she takes him to doctor’s appointments. The cited record does not support the siblings’ allegations. At the June 29, 2015 hearing, H.O.’s attorney related that H.O. did not want his children to fight over who would be his guardian or conservator but, if he had to choose, it would be St. Peter. Put in context in the hearing transcript, H.O.’s statement that Khor helps him get to doctors’ appointments does not in any way infer that H.O. wanted Khor to be his legal guardian and conservator. Given the overwhelming evidence that H.O. desired St. Peter to be his only guardian and conservator, we cannot conclude that the District Court abused its discretion in appointing St. Peter to that position. ¶22 2. Whether the District Court abused its discretion in denying Osorio’s motion to order St. Peter to pay attorney fees. ¶23 As the siblings recognize, Montana law allows a guardian or conservator to pay for her attorney fees from the protected person’s estate, provided such fees are “reasonably necessary for the support, education, care, or benefit of the protected person.” Section 72-5-428(1)(b), MCA. Under Montana’s conservatorship statutes, “‘trial courts and conservators are granted broad discretionary powers’ in estate administration.” A.M.M., ¶ 17 (quoting Redies, ¶ 20). As discussed in our resolution of Issue 1, substantial evidence supports the District Court’s conclusion that St. Peter did not breach her fiduciary duty to H.O. by using funds from the trust to pay for her attorney fees. Moreover, during the August 27, 2015 hearing, Dougherty testified that it was St. Peter’s “obligation as a fiduciary” to defend her appointment to the fiduciary role. The 13 District Court did not abuse its discretion in denying Osorio’s motion to order St. Peter to remit her attorney fees to H.O.’s estate. ¶24 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 rulings were not an abuse of discretion. We affirm. /S/ JAMES JEREMIAH SHEA We Concur: /S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ BETH BAKER /S/ JIM RICE

May 31, 2016

0d4973f4-7550-48bd-a8dd-6e03a2991fb5

Cooksey v. State

2016 MT 99N

DA 15-0130

Montana

Montana Supreme Court

DA 15-0130 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 99N BOBBY COOKSEY, Petitioner and Appellant, v. STATE OF MONTANA, Respondent and Appellee. APPEAL FROM: District Court of the Fourteenth Judicial District, In and For the County of Musselshell, Cause No. DV 14-22 Honorable Randal I. Spaulding, Presiding Judge COUNSEL OF RECORD: For Appellant: Bobby Cooksey, self-represented; Deer Lodge, Montana For Appellee: Timothy C. Fox, Montana Attorney General, C. Mark Fowler, Assistant Attorney General; Helena, Montana Kent M. Sipe, Musselshell County Attorney; Roundup, Montana Submitted on Briefs: March 30, 2016 Decided: May 3, 2016 Filed: __________________________________________ Clerk May 3 2016 Case Number: DA 15-0130 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 is a direct appeal by Bobby Cooksey of the District Court’s dismissal of his petition for postconviction relief. The factual and procedural background for the underlying criminal case was recounted by this Court in State v. Cooksey, 2012 MT 226, 366 Mont. 346, 286 P.3d 1174. Cooksey shot and killed his neighbor, Tracy Beardslee, while Beardslee was trimming weeds on the other side of two fences. A jury convicted Cooksey of deliberate homicide and this Court affirmed the conviction. Cooksey then filed a petition for postconviction relief in district court. After receiving the State’s response, the District Court dismissed Cooksey’s petition for postconviction relief without holding a hearing on the ground it failed to state any claims upon which relief could be granted. ¶3 It is difficult to discern what errors Cooksey asserts the District Court committed, but there appears to be two arguments: (1) the District Court erred by dismissing his ineffective assistance of counsel claim; and (2) the District Court erred by dismissing his Brady violation claim. 3 ¶4 A district court may dismiss a petition for postconviction relief without holding an evidentiary hearing if the procedural threshold set forth in § 46-21-104(1)(c), MCA, is not satisfied. Herman v. State, 2006 MT 7, ¶ 15, 330 Mont. 267, 127 P.3d 422. In addition, a court may dismiss a petition for postconviction relief without ordering a response if the petition, files and records “conclusively show that the petitioner is not entitled to relief”; alternatively, it may order a response and, after reviewing the response, “dismiss the petition as a matter of law for failure to state a claim for relief or it may proceed to determine the issue.” Herman, ¶ 15 (citing § 46-21-201(1)(a), MCA). A. Ineffective Assistance of Counsel. ¶5 Ineffective assistance of counsel claims present mixed questions of law and fact which are reviewed de novo. State v. Green, 2009 MT 114, ¶ 14, 350 Mont. 141, 205 P.3d 798. There is a strong presumption that counsel’s conduct falls within the wide range of reasonable professional assistance contemplated by the Sixth Amendment. Strickland v. Washington, 466 U.S. 668, 689 (1984). A petitioner bringing such a claim bears a heavy burden to overcome this presumption. Whitlow v. State, 2008 MT 140, ¶ 15, 343 Mont. 90, 183 P.3d 861. In order to prevail upon such a claim, the petitioner must prove (1) that counsel’s performance was deficient; and (2) that counsel’s deficient performance prejudiced the defense. Whitlow, ¶ 10. Because a defendant must satisfy both prongs of this test, an insufficient showing under one prong makes it unnecessary to address the other prong. Whitlow, ¶ 11. 4 ¶6 Cooksey argues his counsel was ineffective because counsel failed to review a videotape disclosed by the prosecution, failed to prepare defense witnesses and impeach adverse witnesses, failed to object to speculative testimony, failed to offer photographs of the victim’s firearms, and failed to call witnesses to testify to the victim’s mental deficiencies. However, Cooksey does not explain how any of these instances constituted a legally deficient performance, nor does Cooksey explain how his defense was prejudiced. Moreover, Cooksey fails to show that any of this evidence would have been admitted. See State v. Hildreth, 267 Mont. 423, 432, 884 P.2d 771, 777 (1994) (the failure to object does not constitute IAC where the objection lacks merit and would have been properly overruled). Cooksey’s various ineffective assistance of counsel claims are no more than conclusory allegations, and were properly dismissed. See Ellenburg v. Chase, 2004 MT 66, ¶ 16, 320 Mont. 315, 87 P.3d 473 (“[A] petition for postconviction relief must be based on more than mere conclusory allegations.”). B. Brady Violation. ¶7 The State’s suppression of material evidence favorable to a defendant violates the defendant’s constitutional right to due process. State v. Johnson, 2005 MT 318, ¶ 12, 329 Mont. 497, 125 P.3d 1096 (citing Brady v. Maryland, 373 U.S. 83, 87 (1963)). In order to demonstrate a Brady violation, the criminal defendant bears the burden of showing that (1) the State possessed evidence favorable to the defense; (2) the defendant did not possess the evidence nor could he have obtained it with reasonable diligence; (3) the prosecution suppressed the favorable evidence; and (4) had the evidence been disclosed, 5 a reasonable probability exists that the outcome of the proceeding would have been different. Johnson, ¶ 12. Where no such showing can be made, no violation can be found. Johnson, ¶ 15. ¶8 Cooksey argues the prosecution failed to disclose exculpatory evidence, including dash cam videos from the sheriff and deputies and that the sheriff failed to include all detailed information in his incident report. As with his ineffective assistance of counsel claims, Cooksey’s claims are conclusory with no supporting facts. Cooksey fails to explain how the dash cam footage was favorable or would have changed the outcome of the trial. Cooksey does not explain what was missing from the sheriff’s incident report, let alone how such an omission prejudiced his defense. Cooksey therefore failed to establish any Brady violation may have occurred, and his claim was properly dismissed. ¶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/ LAURIE McKINNON /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA

May 3, 2016

560824c7-ae31-40c4-9746-c8ae78a4f035

Marriage of Stearns

2016 MT 116N

DA 15-0497

Montana

Montana Supreme Court

DA 15-0497 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 116N IN RE THE MARRIAGE OF: CRISTINA STEARNS, n/k/a Cristina Lauchengco, Petitioner and Appellee, v. DAVID STEARNS, Respondent and Appellant. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DR 12-415A Honorable Ted O. Lympus, Presiding Judge COUNSEL OF RECORD: For Appellant: Katherine P. Maxwell, Maxwell Law, PLLC, Kalispell, Montana For Appellee: Kira I. Evans, George B. Best, Best & Westover Law Office, Kalispell, Montana Submitted on Briefs: March 23, 2016 Decided: May 17, 2016 Filed: __________________________________________ Clerk May 17 2016 Case Number: DA 15-0497 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 David Stearns and Cristina Lauchengco met in February 1996 in the Philippines where Cristina was born and lived with her family. At the time, Cristina was 20 years old and David was 40. In October 1996, Cristina moved to the United States on a fiancée visa and the parties married in December 1996. Their daughter Maelyn was born in November 1997. The couple originally resided in California where David owned an automobile body shop and rental property. In 2000, the family moved to Kalispell, Montana, and David sold his body shop business but retained ownership of the California rental property. In May 2012, the parties separated and in July 2012, Cristina filed for dissolution. The Eleventh Judicial District Court issued its decree of dissolution on August 11, 2015. David appeals, asserting various errors by the court. We affirm. ¶3 David challenges the District Court’s verbatim adoption of Cristina’s proposed findings of fact and conclusions of law. He also asserts the District Court improperly considered Cristina’s allegations of “marital misconduct” by David as a factor when dividing the parties’ property, resulting in an erroneous valuation and distribution of the marital estate. David objects to the court’s failure to enter a parenting plan/medical 3 support order and, lastly, claims the court erred in requiring that he pay Cristina’s attorney’s fees and costs. ¶4 Section 40-4-202, MCA, governs the division of property in a marital dissolution case. We have repeatedly held that § 40-4-202, MCA, vests district courts with broad discretion when equitably distributing the marital estate. In re Marriage of Swanson, 2004 MT 124, ¶ 12, 321 Mont. 250, 90 P.3d 418. We review a district court’s findings of fact in a dissolution proceeding for error and absent clearly erroneous findings or abuse of discretion, we will affirm a district court’s division of property. Swanson, ¶ 12. We review a district court’s award of attorney’s fees in a dissolution action for an abuse of discretion. Swanson, ¶ 13. ¶5 Upon moving to Montana, the couple purchased a home. During the marriage, they acquired boats, snowmobiles, motorized bikes, vehicles, a backhoe, and various tools and equipment. Additionally, they purchased 5 acres of undeveloped real property in Kalispell and 20 acres in Eureka, Montana. The District Court valued the marital estate at $1,206,320. This value included David’s rental property in California valued at $600,000. The court awarded the rental property to David and subtracted its value from the marital estate. The court then divided the remaining marital property, with assets totaling $244,920 being awarded to Cristina, and assets totaling $361,400 being awarded to David. To achieve a more equitable distribution and based upon David’s ownership of income-generating rental property and receipt of a recent inheritance, the court ordered David to make a one-time payment of $58,240 to Cristina, in lieu of awarding her maintenance. This resulted in an even $303,160 distribution to each party. 4 ¶6 We first address the District Court’s valuation and distribution of the marital estate. David maintains that the court’s frequent reference in its findings to David’s alleged controlling and threatening behavior throughout the marriage resulted in a distribution designed by the District Court to “financially punish” David for his “egregious behavior” toward Cristina. Section 40-4-202, MCA, expressly states that the “court, without regard to marital misconduct, shall . . . equitably apportion . . . property and assets” belonging to the parties. We do not attribute the District Court’s findings pertaining to conduct during the marriage as evidence of intent to punish David. Irrespective of those particular findings, we review the court’s findings on valuation and distribution of the marital estate to determine if they are supported in the record. ¶7 David challenges the valuations assigned by the District Court for several marital assets, including real property and vehicles. We note, however, that the values attributed by the District Court were equal or similar to values either presented by David for those items in his financial disclosure statement filed in March 2013, or by David’s Exhibit W submitted on June 2, 2015, or by Kelley Blue Book printouts submitted by Cristina. As the value of these assets was supported by evidence in the record, the court’s findings were not clearly erroneous. ¶8 David also claims the court erred by awarding him a $25,000 value for numerous firearms that he claims were totally destroyed by fire. Although David and his friend testified that a fire at his friend’s house had destroyed the weapons, the evidence on the issue was confusing and tended to suggest that his friend actually owned the guns when the fire occurred. It was within the province of the court to accept or reject this 5 speculative testimony. Moreover, the court had before it sufficient evidence to extrapolate a value of $25,000 for all the weapons David claimed to have owned. Therefore, the court’s valuation of the firearms and assignment of the value to David was within the court’s discretion. ¶9 The District Court acknowledged in its dissolution decree that Maelyn had graduated from high school and would turn 18 within 90 days of the decree. Based upon testimony from Cristina, David, and Maelyn during the three-day dissolution hearing, the court agreed that Maelyn would continue to reside with David and he would continue to provide for her care and support. Given the circumstances of the parties, the court did not impose a child or medical support obligation on Cristina, nor did it establish a parenting plan. This was premised in large part on Maelyn’s imminent age of majority and her being a high school graduate. Section 40-4-208(5), MCA, provides “[p]rovisions for the support of a child are terminated by emancipation of the child or the child’s graduation from high school . . . whichever occurs later.” Additionally, based upon the District Court’s finding that Cristina has been supporting herself on a shipping clerk’s salary of approximately $22,000-$23,000 since the separation, it was not an abuse of the court’s discretion to decline to impose a child and medical support obligations on Cristina. ¶10 Section 40-4-110, MCA, authorizes a district court, under certain circumstances, to order one party to pay the other party’s reasonable professional fees. The court observed that David had maintained control over the monetary assets in the estate since the parties separated, and had provided no financial assistance to Cristina since 2012. The court further noted that David held and retained all of the income-generating 6 property in the marital estate. Premised upon these findings, the court ordered David to pay Cristina’s attorney’s fees and costs. We conclude this was not an abuse of discretion. ¶11 While we discourage district courts from verbatim adoption of one party’s proposed findings and conclusions, we have held that “such an action is not per se error.” Wurl v. Polson Sch. Dist. No. 23, 2006 MT 8, ¶ 29, 330 Mont. 282, 127 P.3d 436. In In re Marriage of Sessions, 231 Mont. 437, 439, 753 P.2d 1306, 1307 (1988), we explained that verbatim adoption of a party’s proposed findings is not legal error providing the district court’s decision is supported by law and evidence. As discussed above, the District Court’s findings in the case are supported by the law and evidence and its adoption of Cristina’s proposed findings is not error. ¶12 David finally argues that the District Court failed to make “complete and accurate findings” vis-à-vis the factors set forth in § 40-4-202, MCA, and failed to address the fact that “the entirety of the marital estate was premarital or inherited.” Having determined that the District Court’s findings are equitable, sufficient, supported by the evidence, and not clearly erroneous, and that the court’s rulings do not constitute an abuse of discretion, we decline to address David’s remaining assertions. 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. 7 ¶13 For the foregoing reasons, we affirm the District Court’s August 2015 Findings of Fact, Conclusions of Law and Decree of Dissolution. /S/ PATRICIA COTTER We Concur: /S/ BETH BAKER /S/ LAURIE McKINNON /S/ MICHAEL E WHEAT /S/ JIM RICE

May 17, 2016

a510a792-d4ec-460c-a98d-e12ed7427776

Matter of N. A. A.A. N.A. Z.A.

2016 MT 89N

DA 15-0482

Montana

Montana Supreme Court

DA 15-0482 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 89N IN THE MATTER OF: N. A., A.A., N.A., and Z.A., Youths in Need of Care. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause Nos. BDN-13-160, BDN-13-161, BDN-13-162, BDN-13-163 Honorable Thomas McKittrick, Presiding Judge COUNSEL OF RECORD: For Appellant: Jill A. Hughes, Matrium Law Group, PLLC, Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General, C. Mark Fowler, Assistant Attorney General, Helena, Montana John Weston Parker, Cascade County Attorney, Valeria Winfield, Deputy County Attorney, Great Falls, Montana Submitted on Briefs: March 23, 2016 Decided: April 12, 2016 Filed: __________________________________________ Clerk April 12 2016 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 This case pertains to the termination of the parental rights of A.A. to his four children, N.A., A.A., N.A., and Z.A. The children were placed into protective custody on April 6, 2013. Temporary Legal Custody was granted to the Department of Public Health and Human Services (“DPHHS”) on January 30 2014, and the children were adjudicated as Youths in Need of Care the same day. The State petitioned the court to terminate the parent-child relationship on January 15, 2015, and a hearing was held over two days on June 18 and July 2, 2015. A written order terminating the parental rights of A.A. was signed on July 23, 2015. A.A. appeals. We affirm. ¶3 On April 6, 2013, N.A. was born and DPHHS received information regarding threatening and abusive behavior directed at the birth mother from the natural father, A.A. DPHHS determined based on previous criminal history and abusive behavior that the children should be taken into the care of DPHHS. Over the following months, there were several instances during which A.A. intimidated his family members and verbally and physically abused them. 3 ¶4 On February 9, 2014, a treatment plan was adopted. Among other tasks, the treatment plan acknowledged that A.A. had mental health issues and imposed psychiatric treatment requirements consistent with the goal of A.A. acquiring the necessary skills to provide for his children’s’ safety, permanency, and well-being. ¶5 We review a district court’s decision to terminate parental rights for an abuse of discretion. In re K.A., 2016 MT 27, ¶ 19, 382 Mont. 165, 365 P.3d 478. As a general rule, we will not consider novel issues, or new arguments on appeal. Siebken v. Voderberg, 2015 MT 296, ¶ 19, 381 Mont. 256, 359 P.3d 1073; Day v. Payne, 280 Mont. 273, 276, 929 P.2d 864, 866 (1996). ¶6 Proceedings to terminate parental rights follow strict statutory criteria. In re J.W., 2013 MT 201, ¶ 26, 371 Mont. 98, 307 P.3d 274. Title 41 of the Montana Code outlines the statutory framework under which a court may assess the appropriateness of terminating parental rights. See § 41-3-602, MCA. In making its assessment the court is obliged to “give primary consideration to the physical, mental and emotional conditions and needs of the child.” Section 41-3-609(3), MCA. If an appropriate treatment plan has been approved but not successfully completed, the court may terminate parental rights if it finds that a “continuation of the parent-child relationship will likely result in continued abuse or neglect.” Section 41-3-609(2), MCA. Furthermore, if a child has been in the “physical custody of the State for the last 15 months out of the most recent 22 months, the best interest of the child must be presumed to be served by the termination of parental rights.” Section 41-3-604(1), MCA. 4 ¶7 A.A. submits two arguments on appeal. First, A.A. invites this Court to consider the applicability of the Americans with Disabilities Act and related federal provisions (“ADA”). He posits that the treatment plan violated several provisions of the federal law, which is liberally cited and extensively covered in his appellate brief. A.A. posits that federal law would have mandated a modification of the treatment plan to better suit his mental health issues. However, none of these arguments or citations occur in the record and none were presented to the District Court. We have consistently held that introducing new legal arguments on appeal undermines the justice system and is substantially unfair to the parties. Payne, 280 Mont. at 276-77, 929 P.2d at 866. That rule is an essential aspect of litigation because “[i]t is based on the principle 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.” Payne, 280 Mont. at 276-77, 929 P.2d at 866. A.A. argues that although he never cited federal law or mentioned the ADA before the District Court, doing so is not required under Nason v. Leistiko, 1998 MT 217, ¶ 18, 290 Mont. 460, 963 P.2d 1279. A.A. claims that the sporadic references in the record to his needing greater accommodation for his mental health were “clearly rooted” in the ADA, and that the federal nature of these references was apparent to “any party with legal training.” However, whether the ADA was invoked or not, the court did consider the seriousness of the mental health issues involved in reviewing the scope of A.A’s treatment plan. ¶8 The District Court found that A.A. demonstrated some inconsistent progress in addressing his mental health issues, but his “emotional deregulation” still posed a serious 5 problem for the children. Although there was evidence to suggest that A.A. had an intellectual disability, other evidence undermined the significance of those evaluations. Testimony from a mental health professional showed that A.A. “appeared to have fabricated being in treatment for brain cancer to manipulate the behaviors and feelings of others towards him.” The testimony also showed that he remained “motivated to present himself in a positive light, . . . externalized blame,” and “provided numerous invalid results to tests administered during the [psychological] evaluation[s].” ¶9 Notwithstanding the presence of remarks regarding the mental health accommodations A.A. requested in the record, the appeal still presents a new legal argument because it relies on law that was never introduced to the District Court. A.A.’s argument is especially unpersuasive because neither the District Court nor the State had an opportunity to consider the issue A.A. now raises on appeal. Payne, 280 Mont. at 276-77, 929 P.2d at 866. Consequently, we decline to address the applicability of the ADA in this appeal. ¶10 Second, A.A. claims that the District Court made an erroneous conclusion of law by adopting a presumption that termination of parental rights was in the best interests of the child because they had been in foster care for 27 months. A.A. argues that the time period did not begin to run until after DPHHS received legal custody of the children, which did not occur in this case until January 30, 2014. This argument is unpersuasive because DPHHS became involved and controlled access to the children from April 6, 2013. The children were kept at the grandparent’s home under the supervision and control of DPHHS. It is not necessary for DPHHS to place the children directly in a state 6 institution for purposes of § 41-3-604(1), MCA. See In re B.M., 2010 MT 114, ¶ 20, 356 Mont. 327, 233 P.3d 338. ¶11 Furthermore, the District Court did not rely on the presumption for the termination of A.A.’s parental rights. The District Court found by clear and convincing evidence that continuation of the parent-child relationship between A.A. and the children would result in ongoing risk of abuse and neglect to the youths, and that the Department more than adequately satisfied the statutory requirements to offer services to A.A. to address the underlying safety concerns and facilitate reunification prior to initiating the petition for termination of parental rights. The court further concluded that the conduct or condition rendering birth father unfit and unable to parent was unlikely to change within a reasonable time. Thus, upon review of the record we cannot agree that the District Court abused its discretion. ¶12 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. ¶13 Affirmed. /S/ MIKE McGRATH We Concur: /S/ MICHAEL E WHEAT /S/ JAMES JEREMIAH SHEA /S/ PATRICIA COTTER /S/ JIM RICE

April 12, 2016

c2536df9-2323-4f8f-8040-4a8d34ea5025

Keuffers v. O.F. Mossberg & Sons

2016 MT 127

DA 15-0349

Montana

Montana Supreme Court

DA 15-0349 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 127 LUKE KEUFFER and STEPHANIE KEUFFER, Plaintiffs and Appellees, v. O.F. MOSSBERG & SONS, INC.; BURNS AUCTION & APPRAISAL, LLC; and JOHN DOES 1-5, Defendants and Appellants. APPEAL FROM: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DV 11-547B Honorable Mike Salvagni, Presiding Judge COUNSEL OF RECORD: For Appellants: Robert K. Baldwin, J. Devlan Geddes, Goetz, Baldwin & Geddes, P.C., Bozeman, Montana For Appellees: Monte D. Beck, Justin P. Stalpes, Lindsay C. Beck, Beck & Amsden, PLLC, Bozeman, Montana Submitted on Briefs: April 27, 2016 Decided: May 31, 2016 Filed: __________________________________________ Clerk May 31 2016 Case Number: DA 15-0349 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 O.F. Mossberg & Sons, Inc., and Burns Auction & Appraisal, LLC (collectively “Mossberg”), appeal the Order of the Eighteenth Judicial District Court, Gallatin County, granting Luke and Stephanie Keuffers’ motion to disqualify Mossberg’s counsel. The District Court disqualified Mossberg’s out-of-state counsel, Renzulli Law Firm, and its local counsel, Tarlow & Stonecipher, pursuant to Rule 1.20(c) of the Montana Rules of Professional Conduct. The basis for the court’s disqualification order was a prospective client consultation that Luke Keuffer had with an attorney from Tarlow & Stonecipher, which was later used in a deposition of Stephanie Keuffer by John Renzulli of the Renzulli Law Firm. The court found that the continued involvement in the case by Mossberg’s counsel gave the Keuffers reason to question whether their case can proceed fairly and cause to question what they may have disclosed in the consultation to Tarlow & Stonecipher that may later be used against them in the current litigation. The court also found that Mossberg’s counsel’s actions undermine the public’s trust in the legal profession. For the reasons discussed below, we affirm the District Court’s order disqualifying Renzulli and Tarlow & Stonecipher. ISSUE ¶2 We restate the dispositive issue on appeal as follows: Whether the District Court abused its discretion in disqualifying Mossberg’s counsel. 3 PROCEDURAL AND FACTUAL BACKGROUND ¶3 In October 2008, Luke Keuffer (“Luke”) and his wife, Stephanie Keuffer (“Stephanie”), were hunting outside White Sulfur Springs, Montana.1 Stephanie was hunting with a .308 Mossberg model 800 rifle (“Mossberg rifle”). The Keuffers allege that the Mossberg rifle fell and struck Luke’s rifle and then discharged and shot Luke in the face, causing serious and permanent injury. On August 10, 2010, Luke called Tarlow & Stonecipher, PLLC, and spoke to attorney Margaret Weamer “regarding [Luke’s] possible claim against [a] gun manufacturer for injuries sustained in [a] hunting accident.” Weamer’s time record indicates that she spoke with Luke for six to twelve minutes. After discussing the case with Luke, Weamer advised him that Tarlow & Stonecipher would not be interested in taking the case. ¶4 Luke and Stephanie retained other counsel and, in June 2011, filed a personal injury action against Mossberg. Tarlow & Stonecipher later agreed to represent Mossberg as local counsel against Luke in the litigation. Prior to agreeing to represent Mossberg, Tarlow & Stonecipher ran a conflict check that revealed the phone conversation between Luke and Weamer. Tarlow & Stonecipher determined that the phone conversation did not create a conflict with their representation of Mossberg. The firm disclosed the phone conversation to Mossberg’s national counsel John Renzulli— who appears pro hac vice in this case—but did not disclose the phone conversation to Luke’s counsel. 1 Stephanie and Luke have since divorced and she is now Stephanie Peer. The parties and the District Court refer to her as “Stephanie Keuffer” and we will do the same. 4 ¶5 The Keuffers’ counsel remained unaware of the telephone conversation between Luke and Weamer until Renzulli deposed Stephanie on June 24-25, 2014. Renzulli began his deposition of Stephanie with an inquiry into other law firms that the Keuffers may have consulted regarding this case. Five questions into the deposition, Renzulli asked Stephanie: “Did anyone from – either you or Luke have any conversations with anybody from Tarlow – T-A-R-L-O-W – Law Firm here in Bozeman?” When Stephanie responded that she did not remember, Renzulli pushed forward, stating: “All right. Let me be very direct . . . . This was not the first law firm that you talked to, correct, about taking this case?” When Stephanie acknowledged that she had made calls to other law firms before the Keuffers hired their current counsel, Renzulli followed up with the ensuing exchange: Q. [W]hen you made a couple of calls, did some of the firms say that they weren’t interested in the case? A. Yeah. I don’t remember who, which firms they were exactly, though. Q. So you told them the facts, and they weren’t interested? A. Pretty much, yeah, from what I can remember. ¶6 Following the deposition, the Keuffers filed a motion to disqualify both Tarlow & Stonecipher and the Renzulli Law Firm, LLP, based on the consultation between Luke and Weamer, and Renzulli’s use of the consultation at Stephanie’s deposition. Mossberg opposed the motion and filed two affidavits from Weamer regarding her recollection of the phone conversation with Luke. Mossberg also requested a hearing to resolve the issue. 5 ¶7 The District Court held a hearing on April 10, 2015. During the hearing, the District Court questioned both Weamer and Renzulli. The court specifically questioned Renzulli regarding why he asked Stephanie about contacting other law firms during the deposition. Renzulli responded that he typically asks such questions in these types of cases because he likes “to know if [the plaintiffs are] shopping the case.” Renzulli indicated further that he intended to introduce that information at trial. The District Court permitted Weamer to testify for the limited purpose of addressing the conflict check conducted by Tarlow & Stonecipher. She confirmed that Tarlow & Stonecipher did not disclose the conflict check results to the Keuffers’ counsel. ¶8 Following the hearing, the District Court issued an order granting the Keuffers’ motion to disqualify both Tarlow & Stonecipher and the Renzulli firm. The District Court determined that Mossberg’s counsel violated Rule 1.20(b) and (c). The court found that Renzulli improperly used the Keuffers’ consultation against them during Stephanie’s deposition. The court found that the purpose of Renzulli’s questioning was to intimidate the Keuffers and create an impression they have a bad case. The court indicated the uniqueness of the situation as Renzulli did not use “information learned” from the consultation, but used the fact that the consultation occurred. The court concluded that this was equally a violation of the Rules because Renzulli used the consultation to intimidate and create an adverse inference about the Keuffers’ case. The District Court disqualified Mossberg’s counsel because their actions defeat the purpose of the Rules of Professional Conduct which threatens the public’s trust in the legal system. Mossberg appeals. 6 STANDARDS OF REVIEW ¶9 A district court possesses broad discretion in ruling on a motion to disqualify counsel. We review a court’s grant of a motion to disqualify for an abuse of discretion. Schuff v. A.T. Klemens & Son, 2000 MT 357, ¶ 26, 303 Mont. 274, 16 P.3d 1002. A district court abuses its discretion when “it acts arbitrarily without conscientious judgment or exceeds the bounds of reason resulting in substantial injustice.” Jacobsen v. Allstate Ins. Co., 2009 MT 248, ¶ 53, 351 Mont. 464, 215 P.3d 649. Application of the Rules of Professional Conduct to a given set of facts is a question of law; “[u]ltimately, it is this Court’s ‘constitutional mandate to fashion and interpret the Rules of Professional Conduct.’” Krutzfeldt Ranch, LLC v. Pinnacle Bank, 2012 MT 15, ¶ 15, 363 Mont. 366, 272 P.3d 635 (quoting In re Rules of Prof’l Conduct, 2000 MT 110, ¶ 9, 299 Mont. 321, 2 P.3d 806). As a question of law, the district court’s application of the Rules to disqualify an attorney is reviewed for correctness. In re Marriage of Perry, 2013 MT 6, ¶ 16, 368 Mont. 211, 293 P.2d 170. DISCUSSION ¶10 Whether the District Court abused its discretion in disqualifying Mossberg’s counsel. ¶11 The Montana Constitution provides that the Montana Supreme Court may “make rules governing . . . admission to the bar and the conduct of its members.” Mont. Const. art. VII, sect. 2, cl. 3; See also Harlen v. City of Helena, 208 Mont. 45, 49, 676 P.2d 191, 193 (1984) (concluding the Court possesses exclusive authority to promulgate rules governing the conduct of attorneys); Schuff ¶ 33 (upholding the Court’s authority in all 7 matters involving the conduct of attorneys practicing law in this state); In re Rules of Prof’l Conduct, ¶ 9 (concluding that this Court has a mandate to fashion and interpret the rules); Krutzfeldt, ¶ 15. ¶12 In Schuff, we noted that although a rule violation is not prima facie grounds for disqualification, “a trial court may consider attorney violations of the Rules of Professional Conduct if that misconduct results in prejudice or adversely impacts the rights of the parties in the case pending before it.” Schuff, ¶¶ 35-37. There, we concluded: [T]he gravamen of a motion to disqualify is not that an attorney or firm violated one of the conflict of interest rules under our Rules of Professional Conduct (see, e.g., Rules 1.7, 1.8, 1.9, 1.10, 1.16, M. R. Pro. C.); rather, a motion to disqualify must offer sufficient proof that the continued representation of one party by the attorney or firm will prejudice or adversely impact the rights of another party in the matter pending before the court. Evidence demonstrating that an attorney or firm did, in fact, violate a professional conduct rule merely serves as additional weight that may tip the scales in favor of disqualification. Schuff, ¶ 36. ¶13 The application of the Rules of Professional Conduct in this case turns on how Mossberg’s out-of-state counsel used the information gained from Luke’s prospective client consultation with Mossberg’s local co-counsel and whether that use warranted disqualification. Rule 1.20 governs attorneys in their dealings with prospective clients; it provides: (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 8 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. M. R. Pro. C. 1.20. The dissent interprets Rule 1.20 narrowly and in a compartmentalized manner. For the Rule to have any teeth and be an effective tool for the district courts to utilize in regulating the conduct of attorneys, it must be broadly construed whereby all the sub- sections work together as a whole. There is a logical progression from one subsection to the next which clearly supports a construction of the Rule as a whole. In this case it is evident that the District Court correctly applied the Rule as a whole in making its decision. While we recognize that disqualification is a harsh remedy, under the circumstances of this case we cannot conclude that the District Court abused its discretion in imposing such a remedy. Rule 1.20(a) ¶14 Neither party disputes that under Rule 1.20(a) Luke became a prospective client to Tarlow & Stonecipher when he called the law firm and discussed his case with Weamer. Because Luke was a prospective client of Tarlow & Stonecipher, certain duties were 9 triggered under the Rule. These duties must be followed by the attorneys that participate in the prospective client relationship. Rule 1.20(b) ¶15 Under Rule 1.20(b), a prospective client’s conversation is protected and no information gained from the consultation may be used or revealed by the lawyer with whom the client consults. The District Court found that Mossberg’s counsel improperly used the Keuffers’ consultation against them during Stephanie’s deposition. The court indicated the uniqueness of the situation as Mossberg did not use “information learned” from the consultation, but used the fact that the consultation occurred. The court determined that this was equally a violation of the Rule because Mossberg used the consultation to intimidate the Keuffers and cause them to question the merits of their case. ¶16 Mossberg argues on appeal that a conflict occurs not because of the fact of the consultation, but because of the passing of confidential information from the client to the attorney that may be “significantly harmful.” Mossberg asserts no such information was passed and implies that the “use” of information as determined by the District Court is error. We disagree. When the fact of a consultation is used to attack and intimidate a party, such conduct constitutes a violation of Rule 1.20 and will support a motion for sanctions, including disqualification. ¶17 In his deposition of Stephanie, Renzulli questioned her about Luke’s consultation with Tarlow & Stonecipher. Renzulli’s line of questioning was not idle chit-chat about whether Stephanie was generally familiar with Bozeman law firms and Tarlow & 10 Stonecipher in particular. He began the deposition by questioning her about law firms either she or her husband had contacted about this case. He then asked her point blank whether one of those firms was Tarlow & Stonecipher. Renzulli pressed on by asking, “[s]o you told them the facts, and they weren’t interested.” Pertaining to Luke’s consultation with Tarlow & Stonecipher, the record is clear that before he started his deposition of Stephanie, Renzulli knew that Luke had talked to Weamer, provided her with facts about his case, and been told that her firm was not interested. Thus, Renzulli used information learned in the consultation in violation of Rule 1.20(b). ¶18 Rule 1.20(b) does not require that an attorney use a verbatim transcript of the information obtained during a prospective client consultation in order for it to constitute a violation of the rule. Nor does Rule 1.20(b) require that the information used or revealed be “significantly harmful,” as would be required to form the basis for disqualification under Rule 1.20(c). Rule 1.20(b) places an absolute prohibition against using or revealing any information learned in the consultation. It should be clarified that the mere use of information learned in a prospective client consultation, if inadvertent or harmless, may not by itself form the basis for disqualification. In this case, however, Renzulli consciously used the information learned in Luke’s consultation with Tarlow & Stonecipher for tactical litigation purposes. Specifically, the District Court found: [T]he purpose of Renzulli’s questioning regarding the fact that Plaintiffs consulted with Tarlow & Stonecipher was to intimidate Plaintiffs and to create an impression that Plaintiffs have a bad case – so bad that Tarlow & Stonecipher, having heard the facts, decided to represent the Defendants instead of Plaintiffs. Using the consultation in this manner gives Plaintiffs reason to question whether their case can proceed fairly. It also gives Plaintiffs cause to question what they may have disclosed to Tarlow & 11 Stonecipher that may later be used against them. While Plaintiffs claim they cannot remember what they told Tarlow & Stonecipher, they believe they told all attorneys they consulted with the same information and some of that information is harmful to them. The District Court also found that Renzulli’s conduct undermined the public’s trust in the legal profession. ¶19 In Schuff, we noted that although a rule violation is not prima facie grounds for disqualification, “a trial court may consider attorney violations of the Rules of Professional Conduct if that misconduct results in prejudice or adversely impacts the rights of the parties in the case pending before it.” Schuff, ¶¶ 35, 37. We concluded: [A] motion to disqualify must offer sufficient proof that the continued representation of one party by the attorney or firm will prejudice or adversely impact the rights of another party in the matter pending before the court. Evidence demonstrating that an attorney or firm did, in fact, violate a professional conduct rule merely serves as additional weight that may tip the scales in favor of disqualification. Schuff, ¶ 36. ¶20 After finding that Renzulli’s questioning was designed to intimidate the Keuffers and to create an impression that they had a bad case; that it caused the Keuffers to question whether their case can proceed fairly and whether they may have disclosed to Tarlow & Stonecipher information that may later be used against them; and that Renzulli’s conduct undermined the public’s trust in the legal profession, the District Court concluded that disqualification was appropriate. We do not find that this ruling constituted an abuse of the broad discretion the district court possesses when ruling on a motion to disqualify. Schuff, ¶ 26. Although the District Court did not use the precise words “prejudice or adversely impact the rights of another party,” it does not take the 12 Rosetta Stone to decipher the District Court’s assessment of Renzulli’s conduct. We therefore affirm the District Court’s Order disqualifying Renzulli. ¶21 Mossberg argues the District Court wrongfully imputed the conflict to Tarlow & Stonecipher. The District Court determined that “while Tarlow & Stonecipher did not find it necessary to disclose Weamer’s consultation with Luke to Plaintiffs’ counsel, they did find it to have sufficient pertinence to inform Renzulli . . . .” The court also determined that because the information came from Tarlow & Stonecipher, it gives the Keuffers reason to question what they may have disclosed to Tarlow & Stonecipher that might later be used against them. Based on these findings, the court imputed Renzulli’s conduct to Tarlow & Stonecipher. Tarlow & Stonecipher are implicated with Renzulli because, after becoming local co-counsel for Mossberg, they communicated the substance of the phone call and thereafter participated in the development and prosecution of the case. The continued participation of Tarlow & Stonecipher in this case would undermine the remedy imposed on Renzulli. Thus, we affirm the District Court’s Order disqualifying Tarlow & Stonecipher. ¶22 The District Court’s disqualification of Renzulli and Tarlow & Stonecipher was not an abuse of discretion. Although the District Court based its ruling on Rule 1.20(c), we conclude the disqualification was proper because of the violation of Rule 1.20(b) and the prejudice to the Keuffers resulting from the violation. It is well-established that a district court’s ruling may be sustained under the “wrong-reason, right-result” appellate rule. Tipp v. Skjelset, 1998 MT 263, ¶ 16, 291 Mont. 288, 967 P.2d 787. The District Court incorrectly relied on Rule 1.20(c) as the basis for disqualifying defense counsel; 13 however, it correctly concluded that Renzulli’s conduct warranted disqualification of Renzulli as well as Tarlow & Stonecipher. CONCLUSION ¶23 We conclude that defense counsel improperly used information obtained from the prospective client meeting with Luke, causing prejudice to the Keuffers and leading them to question the merits of their case. For this and the additional reasons set forth above, the District Court’s Order disqualifying defense counsel is affirmed. /S/ MICHAEL E WHEAT We Concur: /S/ MIKE McGRATH /S/ JAMES JEREMIAH SHEA /S/ JIM RICE Justice Beth Baker, dissenting. ¶24 I dissent. ¶25 The Court today upholds the District Court’s disqualification order without reasoned analysis of the applicable Rule. When Luke Keuffer contacted the Tarlow & Stonecipher firm “about the possibility of forming a client-lawyer relationship,” he became a prospective client pursuant to M. R. Prof. Cond. 1.20(a). It is undisputed, however, that the Keuffers never established a client-attorney relationship with the Tarlow & Stonecipher firm. In Perry, we recognized that Rule 1.20 requires examination of whether a lawyer received information from a prospective client that could be 14 significantly harmful to the prospective client in the matter. Perry, ¶¶ 21, 24. We noted that different analyses apply to the duties a lawyer owes to a current or former client. Perry, ¶¶ 19, 22-23. See Pro-Hand Servs. Trust v. Monthei, 2002 MT 134, 310 Mont. 165, 49 P.3d 56 (relying on M. R. Prof. Cond. 1.9—which applies to former clients—to determine if there was a “reasonable probability” that confidences were disclosed) superseded by rule as stated in Perry, ¶ 19; Krutzfeldt (relying on M. R. Prof. Cond. 1.7 and 1.10—which apply to current clients—to determine whether disqualification is required because counsel breached its duty of loyalty). ¶26 Rule 1.18 of the Model Rules of Professional Conduct “is nearly identical” to Montana’s Rule 1.20. Perry, ¶ 21. Similar to our discussion in Perry, the comments to Model Rule 1.18 make clear that while the rule imposes certain duties on a lawyer relating to prospective clients, those duties do not provide prospective clients with the same protections as the duties imposed on lawyers relating to current or former clients. Prospective clients, like clients, may disclose information to a lawyer, place documents or other property in the lawyer’s custody, or rely on the lawyer’s advice. A lawyer’s consultations with a prospective client usually are limited in time and depth and leave both the prospective client and the lawyer free (and sometimes required) to proceed no further. Hence, prospective clients should receive some but not all of the protection afforded clients. Model R. Prof. Cond. 1.18 cmt. 1 (emphasis added). This difference in duties and consequent protections makes sense “[b]ecause the relationship between a prospective client and a lawyer by definition never reaches the stage where the duty of loyalty attaches with full force.” 1 Geoffrey C. Hazard, Jr. & W. William Hodes, The Law Governing Lawyers § 21A.6, 21A-15 (3d ed. Supp. 2012). Accordingly, Model Rule 15 1.18 “imposes a less stringent regime on the lawyer than where actual clients and former clients are involved. Put another way, the protections afforded to prospective clients are not as extensive as those provided to ‘real’ clients.” Hazard & Hodes, supra, at § 21A.6, 21A-15. ¶27 The District Court disqualified Mossberg’s counsel on the basis of Rule 1.20(c). The court concluded properly that, because Luke was a prospective client, “Tarlow & Stonecipher is prohibited from using or revealing information learned in the consultation,” and that “if Tarlow & Stonecipher received information from Luke that could be significantly harmful to his case, Tarlow & Stonecipher is prohibited from representing Mossberg in this case.” The court emphasized that Renzulli’s “motivation” behind his deposition questions to Stephanie was “improper,” and it found “troubling” the fact that Tarlow & Stonecipher did not disclose the phone conversation to the Keuffers’ counsel at the outset. ¶28 The District Court found that Mossberg’s counsel did not use or reveal information learned from the phone conversation in violation of Rule 1.20(b). The court concluded, however, that there was “no reason why the rule should not be equally applicable when an attorney uses the fact that they consulted with a party and declined to represent that party to intimidate that party or to create an adverse inference about that party’s case.” The court concluded further that “knowing that certain information was not disclosed may be just as harmful as information that was disclosed.” The District Court made no finding that Luke disclosed information that could be significantly harmful to him in the case, and acknowledged that “it is not clear what information was 16 disclosed/learned during Luke’s 6-12 minute consultation with Weamer.” It found nonetheless that “defense counsel used the fact that a consultation even occurred against the [Keuffers] in a significantly harmful manner. Thus, the Court finds that Rule 1.20(c), Mont. R. Prof. C. is applicable to the particular circumstances of this case.” The court therefore concluded that “Rule 1.20(c), Mont. R. Prof. C. requires the disqualification of both Tarlow & Stonecipher and the Renzulli Law Firm.” ¶29 Our rule requiring a finding of prejudice or adverse impact—which we originally articulated in Schuff—“applie[s] to current clients.” Perry, ¶ 23. See Pro-Hand Servs. Trust (analyzing whether there was a “reasonable probability” that confidences were disclosed rather than looking to whether the prospective client would be prejudiced or adversely impacted). In contrast, with a prospective client, if the information disclosed to the attorney could be significantly harmful, disqualification is automatic regardless of prejudice or adverse impact, unless the requirements of Rule 1.20(d) are met.1 By its plain language, Rule 1.20(c) would disqualify Tarlow & Stonecipher from representing Mossberg in the proceeding—irrespective of any prejudice to the Keuffers—only if Weamer “received information from [Luke] that could be significantly harmful to [Luke] in the matter,” subject to the exceptions allowed by Rule 1.20(d). M. R. Prof. Cond. 1.20(c). The inquiry under Rule 1.20(c) is not “whether information was divulged by the prospective client but whether such information could be significantly harmful to that person in that or a related matter.” Perry, ¶ 21. 1 Rule 1.20(d) allows continued representation under certain exceptions, discussed below. 17 ¶30 Model Rule 1.18(c), which is identical to Rule 1.20(c), “sets the bar preventing adverse representation against a former prospective client lower than normal in several ways.” Hazard & Hodes, supra, at § 21A.6, 21A-15 (second emphasis added). Model Rule 1.18(c) most significantly lowers the bar on adverse representation by providing that “the lawyer consulting with the prospective client is not personally barred from later opposing the client, even in the same or a substantially related matter, unless in addition the information learned ‘could be significantly harmful.’” Hazard & Hodes, supra, at § 21A.6, 21A-15 (emphasis in original). ¶31 The District Court made no finding that Luke divulged any such information in this case. Although the court correctly recognized that disqualification under Rule 1.20 is proper only if it could find that Mossberg’s counsel violated Rule 1.20(c), the court exceeded the proscriptions of the Rule by concluding that Rule 1.20(c) “is applicable to the particular circumstances of this case” because “defense counsel used the fact that a consultation even occurred against the [Keuffers] in a significantly harmful manner.” (Emphasis added.) The court observed that Luke could not remember what he may have said to Weamer. But the court’s resulting finding that “knowing that certain information was not disclosed may be just as harmful as information that was disclosed” is not relevant to an inquiry under Rule 1.20(c), which focuses on information the “lawyer received” from the prospective client. Perry, ¶ 21. Moreover, after considering the evidence, the court found that “it is not clear what information was disclosed/learned during Luke’s 6-12 minute consultation with Weamer.” The District Court did not, and could not, make the requisite finding under Rule 1.20(c) that Weamer received 18 information that is “significantly harmful” to the Keuffers based upon a finding that it is unclear what information Luke disclosed. Accordingly, there was no justification for disqualification under Rule 1.20(c). ¶32 The District Court also considered Rule 1.20(b) and found as a matter of fact that Mossberg’s counsel “did not use or reveal information learned” during the phone conversation. The District Court determined, however, that Rule 1.20(b) should be “equally applicable when an attorney uses the fact that they consulted with a party . . . to intimidate that party or to create an adverse inference about that party’s case.” ¶33 The Preamble to the Montana Rules of Professional Conduct provides that “[a] lawyer should use the law’s procedures only for legitimate purposes and not to harass or intimidate others,” and be “guided by personal conscience and the approbation of professional peers.” M. R. Prof. Cond. Preamble ¶¶ 6, 8. The Preamble continues: Within the framework of these Rules . . . 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. M. R. Prof. Cond. Preamble ¶ 10. It is within this context that Rule 1.20(b)’s prohibition against “us[ing] or reveal[ing] information learned in the consultation(s)” with a prospective client must be analyzed. ¶34 Here, Renzulli used Luke’s communication with Weamer during his deposition of Stephanie as a litigation tactic to imply that the Keuffers had a weak case. Renzulli’s questioning demonstrated a lack of professional, courteous, and civil attitude toward not 19 only the Keuffers, but to the legal system. Renzulli’s attempt to harass and intimidate the Keuffers was out of bounds. Even though the District Court found as a matter of fact that Renzulli did not reveal any specific information that Luke divulged to Weamer, the District Court properly recognized that Luke’s communication to Tarlow & Stonecipher of “the facts” that prompted him to seek legal assistance was not to be “used” against him by counsel for the adverse party. Accord Perry, ¶¶ 29-30 (analyzing whether an attorney violated her duty of confidentiality to a prospective client). See also M. R. Prof. Cond. Preamble ¶ 18. Renzulli acknowledged that he was attempting to do just that by suggesting that the Keuffers had to shop the case around before they could find a lawyer who was willing to take it. ¶35 But the Court misapplies Rule 1.20(b) by upholding disqualification on this basis. As discussed above, Rule 1.20 does not trigger disqualification where no significantly harmful information was disclosed. The Court proves the point by its acknowledgment that Rule 1.20(b) does not “require that the information used or revealed be ‘significantly harmful,’ as would be required to form the basis for disqualification under Rule 1.20(c).” Opinion, ¶ 18. See Model R. Prof. Cond. 1.18 cmt. 6 (a “lawyer is not prohibited from representing a client with interests adverse to those of the prospective client in the same or a substantially related matter unless the lawyer has received from the prospective client information that could be significantly harmful if used in the matter” (emphasis added)). 20 ¶36 When a lawyer has not received information that could be significantly harmful to a prospective client, the concerns regarding the adverse use of information by the lawyer under Rule 1.20(b) are minimized. Stated another way: If no client relationship is formed, the principle of Rule 1.9—explicitly cross-referenced by Rule 1.18(b)—prohibits adverse use of information gained during the earlier consultations with the “almost former clients.” Of course, if the unfruitful discussions were truly non-substantive, or involved little or no information “that could be significantly harmful,” in the language of Rule 1.18(c), the danger that confidentiality will be compromised is correspondingly small. In such cases the lawyer should not be prohibited from “using” information that he does not really have. Hazard & Hodes, supra, at § 21A.5, 21A-10 (citing Pro-Hand Servs. Trust (concluding that a telephone conversation between a prospective client and a lawyer’s secretary does not bar the lawyer from subsequently representing the other side, especially where the prospective client makes no showing that any confidential information was provided)). Without disclosure of information “that could be significantly harmful” to the Keuffers, the conclusion follows that disqualification under Rule 1.20 is not proper because Mossberg’s counsel “is not prohibited from representing” Mossberg under the plain language of Rule 1.20. Model R. Prof. Cond. 1.18 cmt. 6. ¶37 Absent a basis for disqualification under Rule 1.20(c), disqualification is not appropriate without the proper showing of harm. We have made clear that “a party cannot receive relief from a district court for the mere misconduct of an attorney or firm.” Schuff, ¶ 34. But a trial court may consider attorney violations of the Rules of Professional Conduct if that misconduct results in prejudice or adversely impacts the rights of the parties in the case pending before it. . . . A district court’s 21 discretion in this regard flows from its inherent authority to control trial administration in the interest of fairness and justice. Schuff, ¶ 35 (citations omitted). See also § 3-1-111, MCA (granting all courts the power to “provide for the orderly conduct of proceedings,” and “control, in furtherance of justice, the conduct” of all other persons “in any manner connected with a judicial proceeding”). “In order to succeed on a motion to disqualify opposing counsel, a party ‘must offer sufficient proof that the continued representation of one party by the attorney or firm will prejudice or adversely impact the rights of another party in the matter pending before the court.’” Krutzfeldt, ¶ 17 (quoting Schuff, ¶ 36). Prejudice in this context means that, irrespective of how the Keuffers understandably felt after Stephanie’s deposition, in order to invoke the harsh remedy of disqualification, they must demonstrate how their rights in the litigation would be adversely impacted by Renzulli’s and Tarlow & Stonecipher’s continued representation of Mossberg. ¶38 In analyzing attorney disqualification, we have recognized that “disqualification has a significant effect on litigation and should be imposed sparingly.” Krutzfeldt, ¶ 33. “If there are good reasons to disqualify counsel, then we accept the burdens that disqualification imposes. But there should be good reasons.” Krutzfeldt, ¶ 33 (quoting Ronald D. Rotunda & John S. Dzienkowski, Legal Ethics: The Lawyer’s Deskbook on Professional Responsibility § 1.7-3, 352 (2011-2012 ed. 2011)). Moreover, because “[d]isqualification burdens the judicial system with delays and it burdens the party that must retain and reeducate new counsel in the proceedings,” disqualification is a remedy that should be imposed only if other remedies are lacking. Krutzfeldt, ¶ 33. In 22 Krutzfeldt, we ordered disqualification because of Rule 1.10(a)’s automatic imputed disqualification when there is a concurrent conflict of interest, Krutzfeldt, ¶ 34; hence, “there is no course short of disqualifying [the opposing party’s lawyer] which would respect [counsel]’s duty of loyalty to the Krutzfeldts,” who were his current clients. Krutzfeldt, ¶ 32. The dearth of cases in which this Court has required disqualification of an attorney for violation of the Rules of Professional Conduct—particularly when related to a party with whom the lawyer has formed no attorney-client relationship— demonstrates the rare imposition of such a harsh remedy. ¶39 The District Court has ample discretion to impose alternate remedies or to consider whether any sanction may be appropriate against Renzulli personally. Chief among those remedies would be an order in limine precluding the offensive line of questioning and any mention of the consultation before a jury. The District Court also has authority under M. R. Civ. P. 30(d)(2) to impose an appropriate sanction on a person who frustrates the fair examination of a deponent. As we have recognized, “the Office of Disciplinary Counsel is the appropriate forum to raise violations of the Montana Rules of Professional Conduct under Rule 1 of the Montana Rules for Lawyer Disciplinary Enforcement.” In re Guardianship & Conservatorship of A.M.M., 2015 MT 250, ¶ 77, 380 Mont. 451, 356 P.3d 474. The Rules of Professional Conduct “are designed to provide guidance to lawyers and to provide a structure for regulating conduct through disciplinary agencies.” M. R. Prof. Cond. Preamble ¶ 21. Accordingly, a “violation of a Rule does not necessarily warrant any other nondisciplinary remedy, such as disqualification of a lawyer in pending litigation.” M. R. Prof. Cond. Preamble ¶ 21. 23 Furthermore, the Rules are not to be invoked as a tool in litigation to sanction an attorney. See M. R. Prof. Cond. Preamble ¶ 21. Rather, “[t]he Rules exist for the protection of clients.” Krutzfeldt, ¶ 34. ¶40 The interests of Renzulli’s client—about whom the Court is noticeably silent— also are entitled to consideration before disqualifying counsel of its choice. Recognizing that a party “must not be lightly separated from her counsel of choice,” we have suggested that disqualification of counsel should not be used for punitive purposes. Mowrer v. Eddie, 1999 MT 73, ¶ 23, 294 Mont. 35, 979 P.2d 156. In Krutzfeldt, we acknowledged the impact on the client of the disqualified firm but, because “there was no opportunity to implement a screen before [the Krutzfeldts’ attorney] began working” at the firm of opposing counsel, the prejudice to them could not be undone. Krutzfeldt, ¶ 33. Neither the District Court nor the Court today offer any consideration of the interests of Mossberg or whether the Keuffers’ substantial rights may be protected by other means. ¶41 Finally, the Court does not address the Keuffers’ argument that Tarlow & Stonecipher should have disclosed Luke’s phone call to the Keuffers’ counsel after discovering the consultation during the conflict check. That argument is not supported by the Rule. Rule 1.20(c) provides that a lawyer “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).” 24 M. R. Prof. Cond. 1.20(c). Rule 1.20(d), in turn, governs disclosure to the prospective client and provides: (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. M. R. Prof. Cond. 1.20(d). In other words, Rule 1.20(d) requires disclosure to the prospective client only if a lawyer receives information that could be significantly harmful to the prospective client. ¶42 Similarly, Model Rule 1.18(d) provides that disclosure to a prospective client is required only “[w]hen the lawyer has received disqualifying information as defined in paragraph (c).” Model R. Prof. Cond. 1.18(d) (emphasis added). Model Rule 1.18(c) defines “disqualifying information” as “information . . . that could be significantly harmful to [the prospective client] in the matter.” Model R. Prof. Cond. 1.18(c). Accordingly, “informed consent, confirmed in writing,” “written notice,” and screening under Model Rule 1.18(d) are not necessary unless the “lawyer has received disqualifying information.” Model R. Prof. Cond. 1.18(d). Stated another way, disclosure under “Rule 1.18(d) comes into effect when [the Rule] disqualifies the lawyer who personally dealt with the former prospective client.” Rotunda & Dzienkowski, Legal Ethics: The Lawyer’s Deskbook on Professional Responsibility § 1.18-2, 743 (2015-2016 ed. 2015). ¶43 As the Court implicitly acknowledges, Opinion, ¶¶ 20-21, no showing was made that significantly harmful information was received by Weamer during her phone 25 conversation with Luke. Mossberg’s counsel, therefore, was not required to disclose the consultation to the Keuffers under Rule 1.20(d). ¶44 In summary, the Court effectively adopts a lower disqualification threshold with respect to prospective clients than the standards that apply to current and former clients— at odds with the express language and stated purpose of Rule 1.20. Without a showing that significantly harmful information was communicated, the Court’s application of Rule 1.20 in these circumstances is gravely mistaken. /S/ BETH BAKER Justice Patricia Cotter joins in the dissenting Opinion of Justice Baker. /S/ PATRICIA COTTER Justice Laurie McKinnon, dissenting. ¶45 I agree with the Court that there was a violation of Rule 1.20(b) and that the Keuffers were prejudiced as a result of counsel’s use of Luke’s prospective client consultation with Mossberg’s local counsel, Tarlow & Stonecipher. I similarly agree that there was no violation of Rule 1.20(c) because no showing was made that “significantly harmful information” was conveyed by the Keuffers in the consultation with Weamer. I also agree with the Court that, pursuant to Schuff, ¶ 36, violations of professional conduct rules serve as weight which may tip the scales in favor of disqualification, even though the particular rule violated does not mandate disqualification. I part company with the 26 Court, however, in its conclusion that the remedy of disqualification imposed by the District Court was appropriate. ¶46 In my opinion, the District Court abused its discretion in imposing the severe remedy of disqualification, particularly given that the relationship between a prospective client and a lawyer do not impose duties as stringent as between an actual and/or former client and his lawyer. Imposition of such a severe remedy as disqualification should be sparingly imposed, in light of its significant effect in disrupting litigation. Krutzfeldt, ¶ 33. Under the circumstances here, disqualification of Mossberg’s counsel was an abuse of discretion when the District Court could have simply precluded the offensive line of questioning by both Renzuilli and Tarlow & Stonecipher and thereby maintained the integrity of the proceeding. The public’s trust in the legal system in not undermined when a trial court perceives an abuse by counsel and corrects it by a fair, proportionate, and measured remedy. ¶47 As a final consideration, I think it is evident, that the District Court found the facts of this case “unique” but, nonetheless, that a Rule 1.20(b) violation had been substantiated. With respect to Rule 1.20(b), the District Court held: The Court finds that defense counsel improperly used Plaintiff’s consultation with Tarlow & Stonecipher against them during Stephanie’s deposition. This situation is unique in that Rule 1.20(b), Mont. R. Prof. C., states that the attorney “shall not use or reveal information learned in the consultation . . .” and in this case the attorney did not use or reveal information learned, but rather used the fact that the consultation even occurred. The Court finds no reason why the rule should not be equally applicable when an attorney uses the fact that they consulted with a party and declined to represent that party to intimidate that party or to create an adverse inference about that party’s case. This is precisely what occurred in this case. 27 While I would not, under the circumstances of this case, find that a violation of Rule 1.20(b) warranted disqualification, I believe the District Court correctly found that Rule 1.20(b) had been violated. As we have held, the violation of a professional conduct rule—even Rule 1.20(b)—could tip the scales in favor of disqualification. Schuff, ¶ 36. Nonetheless, while a trial court is in the best position to control and monitor the conduct of trial counsel, under the circumstances presented here, disqualification of Mossberg’s counsel was not a measured or fair remedy. ¶48 To the extent we conclude otherwise, I dissent. /S/ LAURIE McKINNON

May 31, 2016

da754405-2a5f-48c3-a0f0-b98bbe53b105

Moe v. Butte-Silver Bow Co.

2016 MT 103

DA 15-0400

Montana

Montana Supreme Court

DA 15-0400 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 103 LINDSEY MOE, Plaintiff and Appellant, v. BUTTE-SILVER BOW COUNTY, Defendant, Cross-Appellant and Appellee. APPEAL FROM: District Court of the Second Judicial District, In and For the County of Butte-Silver Bow, Cause No. DV 2013-354 Honorable Ray Dayton, Presiding Judge COUNSEL OF RECORD: For Appellant: Frederick F. Sherwood, Morrison, Sherwood, Wilson & Deola PLLP, Helena, Montana For Appellee: Cynthia L. Walker, Emma R. Armstrong-Blanchard, Poore, Roth & Robinson, P.C., Butte, Montana Submitted on Briefs: March 16, 2016 Decided: May 10, 2016 Filed: __________________________________________ Clerk May 10 2016 Case Number: DA 15-0400 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Lindsey Moe appeals an order of the Second Judicial District Court, Silver Bow County, granting partial summary judgment in favor of Butte-Silver Bow County (County). The County cross-appeals the District Court’s partial denial of its summary judgment motion. ¶2 We restate the issues as follows: 1. Whether the County is entitled to summary judgment on Moe’s claim that it violated Montana’s open meeting laws. 2. Whether the County is entitled to summary judgment on Moe’s claim that it violated Montana’s public participation laws. 3. Whether the District Court erred in granting summary judgment in the County’s favor with respect to Moe’s 42 U.S.C. § 1983 claim. 4. Whether the District Court erred in ruling as a matter of law that the County did not discharge Moe in violation of its own policies or for refusing to violate public policy. 5. Whether the District Court correctly concluded that Moe is entitled to a trial on her claim that the County terminated her employment without good cause. ¶3 We affirm on all issues. PROCEDURAL AND FACTUAL BACKGROUND ¶4 Moe was appointed as the human resources director for the County beginning in 2009. In early 2013, employees complained to the County Chief Executive Matt Vincent regarding Moe’s job performance and behavior. Vincent and the County Attorney, Eileen Joyce, met with Moe in February 2013 to informally counsel Moe regarding her performance issues. 3 ¶5 In April 2013, Vincent learned that Moe had failed to disclose to him her knowledge of potential wage claims against the County.1 During that same month, one of Moe’s subordinates filed a productive work environment/workplace harassment complaint against Moe. As a result, Vincent placed Moe on administrative leave in May 2013, pending the outcome of an investigation by an independent consultant. During the investigation Moe was represented by counsel, participated in meetings with Vincent, and provided written responses to the issues being investigated. ¶6 The investigation established that the productive work environment/workplace harassment complaint was unsubstantiated. The investigation revealed, however, that other issues were substantiated relating to Moe’s inappropriate conduct and job performance deficiencies. ¶7 Pursuant to the County Charter, the Chief Executive has the power to remove a non-elected department head for just cause with advice and consent of the Council of Commissioners (Council). Following the investigation, Vincent determined that Moe should be terminated and requested a special meeting of the Council to obtain its advice and consent for the termination. Moe was provided with the written documents and reasons for her termination. Vincent met with Moe and her attorney in order to give Moe an opportunity to provide any additional information or documents in response to the 1 The potential wage claims arose from provisions in the County’s employee compensation plans derived from a classification and compensation study by Fox Lawson and Associates, a Minnesota-based compensation consulting firm. The parties refer to the plan as the “Fox Lawson Pay Plan” and we will do the same. 4 investigation results. The Council was given the investigative report, along with the documents Moe submitted in response, for review in advance of the meeting. ¶8 Prior to the meeting, Vincent announced his intention to close the portion of the meeting concerning the reasons for his decision to terminate Moe. Joyce informed Moe that the meeting would be closed and that Moe would not be allowed to speak at the meeting. In response, Moe waived her right of privacy and requested that the meeting remain open. ¶9 At the beginning of the meeting on October 16, 2013, Vincent, as the presiding officer, declared that he was closing the meeting based on his determination that the privacy rights of County employees, including the employee who had made the workplace harassment complaint and the employees who provided information during the investigation, outweighed the merits of public disclosure. Vincent did not identify the employees with the alleged privacy interests or give those employees an opportunity to waive their privacy interests. Moe and her attorney were allowed to remain at the meeting, but were not allowed to speak. ¶10 During the closed portion of the meeting, Vincent and Joyce provided the Council with reasons for Moe’s termination. When the meeting was re-opened the Council granted consent to terminate Moe’s employment. On October 18, 2013, Vincent sent a termination notice to Moe advising her that she was discharged, and included a copy of the County’s grievance policy. 5 ¶11 Moe submitted a grievance with the County on November 4, 2013. On November 15, 2013, Moe filed a complaint alleging three counts against the County: 1) violation of Montana’s open meeting laws, Article II, Section 9 of the Montana Constitution and § 2-3-203, MCA; 2) violation of Article II, Section 8 of the Montana Constitution and §§ 2-3-101 through -114, MCA, relating to the right of citizen participation in government operations; and 3) violation of due process and equal protection rights under the Fourteenth Amendment to the United States Constitution, claiming a right to recover damages pursuant to 42 U.S.C. § 1983. In January 2014, the County denied Moe’s grievance on the ground that she failed to provide a detailed statement of the disputed issues and relevant facts that explain what specific policies and procedures she alleged were violated and the specific remedy she sought through the grievance process. Moe amended her complaint in March 2014, adding a fourth count: 4) violation of the Montana Wrongful Discharge from Employment Act, §§ 39-2-901 through -915, MCA. ¶12 After the County filed its answer to her amended complaint, Moe moved for partial summary judgment on the issue of liability on all four counts. The County opposed Moe’s motion and filed its own motion for summary judgment on all counts. During the January 16, 2015 summary judgment hearing, the County introduced a copy of the independent investigator’s fact-finding report relating to Moe’s termination. The District Court admitted the report provisionally. After the hearing, the court ordered that the report be filed under seal. On May 27, 2015, the District Court issued an order 6 granting summary judgment to the County on the first three counts. On the fourth count, the court granted the County’s motion with respect to Moe’s claim that the County violated § 39-2-904(1)(a) and (c), MCA. The court denied the County’s motion with respect to Moe’s claim that the County violated § 39-2-904(1)(b), MCA, holding that factual questions remained as to whether the County had good cause for Moe’s termination. ¶13 Moe moved for certification of the summary judgment order as final pursuant to M. R. Civ. P. 54(b). The District Court granted Rule 54(b) certification on June 30, 2015. Noting that the County did not oppose Moe’s motion for certification, we determined that the District Court’s certification order satisfied the requirements of M. R. Civ. P. 54(b) and M. R. App. (6)(6). Moe v. Butte-Silver Bow Cnty., DA 15-0400, Or. (Mont. July 14, 2015). Both parties appeal. STANDARDS OF REVIEW ¶14 We review de novo a district court’s grant or denial of summary judgment. Pilgeram v. GreenPoint Mortg. Funding, Inc., 2013 MT 354, ¶ 9, 373 Mont. 1, 313 P.3d 839. Summary judgment is appropriate when the moving party demonstrates both the absence of any genuine issues of material fact and entitlement to judgment as a matter of law. M. R. Civ. P. 56(c)(3); Anderson v. BNSF Ry., 2015 MT 240, ¶ 15, 380 Mont. 319, 354 P.3d 1248. Conclusory statements, speculative assertions, and mere denials are insufficient to defeat a motion for summary judgment. Davis v. State, 2015 MT 264, ¶ 7, 381 Mont. 59, 357 P.3d 320. All reasonable inferences that may be drawn from the 7 offered evidence should be drawn in favor of the party opposing summary judgment; however, summary judgment cannot be defeated by unsupported speculation. Baumgart v. State, 2014 MT 194, ¶ 14, 376 Mont. 1, 332 P.3d 225. 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. DISCUSSION ¶15 1. Whether the County is entitled to summary judgment on Moe’s claim that it violated Montana’s open meeting laws. ¶16 Moe claims that the decision to close a portion of the special meeting violated Montana’s open meeting laws because the County failed to follow proper procedures in determining whether the alleged privacy interests of the other employees outweighed the merits of public disclosure. Moe argues that the employees who had alleged privacy interests were “not even identified” and that there was “no analysis of what [the] alleged privacy rights were.” Moe emphasizes that she had waived her privacy rights and that the other employees were not given the same opportunity. Moe argues that Vincent made a “blanket determination” that simply because other employees were involved “they automatically had privacy interests that prevented any public discussion of any aspect of the investigation.” According to Moe, “[s]uch an unprecedented rule would gut the Open Meeting Laws.” As a result, Moe contends that the County should have identified the other employees, stated why their privacy rights outweighed the merits of public disclosure, and then given them a chance to waive those privacy rights. 8 ¶17 In any event, Moe argues, the other employees’ protected privacy interests were not implicated because none of their personnel records were discussed at the meeting. According to Moe, “[a]t most, employee(s) accusations against Moe could have been discussed, and these are not protected by a privacy right except that of [Moe].” In addition, Moe argues that the District Court improperly based its decision on the idea that public disclosure of workplace harassment and retaliation complaints may discourage employees from pursuing such complaints. This idea, according to Moe, is at odds with the law because “the only consideration that can defeat the public’s right to know is the other constitutional right of individual privacy.” Moe claims that the District Court’s holding erroneously makes it so the right to anonymously complain is superior to the constitutional right to know. ¶18 Article II, Section 9 of the Montana Constitution establishes the public right to know: No person shall be deprived of the right to examine documents or to observe the deliberations of all public bodies or agencies of state government and its subdivisions, except in cases in which the demand of individual privacy clearly exceeds the merits of public disclosure. This provision is implemented by §§ 2-3-201 through -221, MCA. Section 2-3-203, MCA, provides, “The presiding officer of any meeting may close the meeting during the time the discussion relates to a matter of individual privacy and then if and only if the presiding officer determines that the demands of individual privacy clearly exceed the merits of public disclosure.” Section 2-3-203(3), MCA. The Montana Constitution establishes the right to privacy in Article II, Section 10: “The right of individual privacy 9 is essential to the well-being of a free society and shall not be infringed without the showing of a compelling state interest.” The competing interests of the right to privacy and the right to know “must be balanced in the context of the facts of each case, to determine whether the demands of individual privacy exceed the merits of public disclosure.” Billings Gazette v. City of Billings, 2013 MT 334, ¶ 14, 372 Mont. 409, 313 P.3d 129 (citation and internal quotation marks omitted). ¶19 In conducting this balancing test, courts must first consider whether the individual(s) whose privacy rights are at issue has “a subjective or actual expectation of privacy, and if so whether society should recognize that the expectation is reasonable.” Missoula Cnty. Pub. Schs. v. Bitterroot Star, 2015 MT 95, ¶ 11, 378 Mont. 451, 345 P.3d 1035. “Actual expectation of privacy is necessarily a question of fact that requires a determination of whether the individual whose privacy is at issue had notice of possible disclosure.” Billings Gazette, ¶ 18. Whether society is willing to recognize a privacy expectation as reasonable is a question of law that requires consideration of “all relevant circumstances, including the nature of the information sought.” Billings Gazette, ¶¶ 21, 26. It is reasonable for an employee to expect that matters communicated in private by the employee to his or her employer normally would be kept confidential. Mont. Human Rights Div. v. Billings, 199 Mont. 434, 442, 649 P.2d 1283, 1287-88 (1982). Public disclosure of certain employee information “could impede candid communication between employer and employee.” Billings Gazette, ¶ 26. 10 ¶20 The District Court concluded that the employees who initiated the workplace harassment complaints against Moe had individual privacy interests that society is willing to recognize as reasonable. We agree. First, the employees who initiated the complaints against Moe had an actual expectation of privacy. The County’s Productive Work Environment/Harassment Prevention Policy (Policy 134) states, “A report filed under this Policy, its investigation, the outcome of the investigation, and any action(s) taken relating to a specific employee or employees is confidential.” Thus, the employees who initiated the complaints against Moe and cooperated in the investigation did not have “notice of possible disclosure” and therefore had an actual expectation of privacy based on Policy 134. Billings Gazette, ¶ 18. ¶21 In addition, the County employees’ actual expectations of privacy are ones that society is willing to recognize as reasonable. The District Court determined that public disclosure of workplace harassment and retaliation complaints may discourage employees from pursuing such complaints. This determination is consistent with our recognition of such privacy interests and our conclusions that society is willing to recognize those privacy interests as reasonable. In Montana Human Rights Division, we held that employees had a reasonable expectation that information contained in their employment records would not be divulged “in an investigation or during a public hearing in which the employee is only remotely involved.” Mont. Human Rights Div., 199 Mont. at 443, 649 P.2d at 1288. In Billings Gazette, we undertook a lengthy review of our prior decisions relating to the reasonableness of public employees’ expectations of 11 privacy when balanced against the public’s right know. Billings Gazette, ¶¶ 23-40. We observed that employees reasonably would expect that their communications to the employer regarding workplace misconduct “normally would be kept confidential.” Billings Gazette, ¶ 47 (quoting Mont. Human Rights Div., 199 Mont. at 442, 649 P.2d at 1288) (internal quotation marks omitted). See also Bozeman Daily Chronicle v. Police Dep’t, 260 Mont. 218, 228, 859 P.2d 435, 441 (1993) (holding that an accuser and witnesses to an alleged incident have a subjective privacy interest which society is willing to recognize as reasonable in an investigation focused on the accused). Here, because the evidence supporting Vincent’s decision to terminate Moe was based in significant part on information that had come from other County employees who were only “remotely involved” in the reason for convening the October 16, 2013 Council meeting, those employees had a reasonable expectation that their communications would not be made public. Mont. Human Rights Div., 199 Mont. at 443, 649 P.2d at 1288. ¶22 Having found that the employees had reasonable expectations of privacy, we must balance the employees’ right to privacy against the merits of public disclosure. Moe argues that the public is entitled to know why Vincent and Joyce believed that Moe was inadequate in her working relationship with Vincent, and that the public has an interest in “discussion about the Fox Lawson [P]ay [P]lan study and a possible lawsuit that could have arisen from it.” ¶23 Moe’s arguments are unpersuasive. In Billings Gazette, the newspaper sought disclosure of documents detailing the investigation and discipline of Billings City 12 employees due to inappropriate computer usage. Billings Gazette, ¶ 1. We concluded that the employees’ “reasonable expectation of privacy in their identities with regards to internal disciplinary proceedings clearly outweighs the merits of public disclosure,” and that although the information “may make interesting or sensational news copy,” “public disclosure is not in the public interest.” Billings Gazette, ¶ 59. We noted that “[p]ublic knowledge of the names of the individuals disciplined will not provide the public with any greater opportunity to participate in the internal employment decisions of the City.” Billings Gazette, ¶ 56. ¶24 For similar reasons, we conclude that the privacy interests of County employees with regard to the internal complaint reporting and investigation in this case outweigh the merits of public disclosure. The public, via news reporting outlets, already had received information regarding Moe’s administrative leave and pending investigation. Contrary to Moe’s contention, the Council meeting did not involve discussion of the substance of the Fox Lawson Pay Plan or potential litigation. Rather, the closed portion of the meeting concerned Vincent’s reasons for terminating Moe, based in part on information that employees provided during an investigation that they had been led to believe was confidential. We have observed that “general assertions that public disclosure will foster public confidence in public institutions and maintain accountability for public officers are not sufficient to establish a strong public interest.” Billings Gazette, ¶ 56 (citing Missoulian v. Bd. of Regents of Higher Educ., 207 Mont. 513, 532, 675 P.2d 962, 972 (1984)). The portion of the meeting during which the Council voted to give consent to 13 Vincent’s termination decision was open to the public. Public knowledge of the information gathered from other County employees during a personnel investigation would undermine the County’s interest as an employer in encouraging candor and willingness of its employees to bring legitimate complaints to the County’s Chief Executive. As we recognized in Missoulian and Mont. Human Rights Div., the promotion of candid communication between an employer and its employees is good public policy. Missoulian, 207 Mont. at 533, 675 P.2d at 973; Mont. Human Rights Div., 199 Mont. at 442-43, 649 P.2d at 1287-88. Protecting the confidentiality of such communications helps to encourage employees not to remain silent during internal investigations of workplace problems. ¶25 Further, the termination decision was premised in large part upon a multi-faceted investigation comprising interviews with numerous County employees other than Moe. The Council was provided with the investigation report, documenting workplace issues involving employees of Moe’s department and other County employees; that report and Moe’s responses to its findings were to be discussed at the meeting. The report disclosed the identity of the employees interviewed, which would be evident in any discussion about the issues. Therefore, it was not inappropriate for Vincent to close that discussion to the public rather than to require him to repeatedly open and close the meeting as particular elements of the investigation may have come up during the discussion. We conclude that the District Court did not err in granting summary judgment in the 14 County’s favor with respect to Moe’s claim that the County violated Montana’s open meeting laws. ¶26 2. Whether the County is entitled to summary judgment on Moe’s claim that it violated Montana’s public participation laws. ¶27 Section 2-3-103, MCA, provides that “[e]ach agency shall 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(1)(a), MCA. Before an agency takes final action on an issue that is of significant interest to the public, the agency must follow procedures to ensure adequate notice and assist public participation. Section 2-3-103(1)(a), MCA. “Procedures for assisting public participation must include a method of affording interested persons reasonable opportunity to submit data, views, or arguments, orally or in written form, prior to making a final decision that is of significant interest to the public.” Section 2-3-111(1), MCA. ¶28 In Jones v. County of Missoula, 2006 MT 2, 330 Mont. 205, 127 P.3d 406, we adopted the Attorney General’s definition of the term “significant public interest” as “any non-ministerial decision or action of a county commission which has meaning to or affects a portion of the community.” Jones, ¶ 16 (citation and internal quotation marks omitted). A ministerial act is one “performed pursuant to legal authority, and requiring no exercise of judgment.” Jones, ¶ 16. Public participation procedures are required when a final decision is made. Sections 2-3-103, -111, MCA. See Jones, ¶¶ 9, 22 (holding that a county commission meeting where the county made the decision to allow dependent coverage to domestic partners of county employees was of significant public 15 interest). Non-ministerial decisions that directly affect more than one person may be considered of significant public interest. Jones, ¶¶ 18, 22 (holding that a county’s decision to make dependent health care coverage available to domestic partners was of significant public interest even though it affected only county employees). ¶29 In Jones, we also acknowledged that the topic at issue was of interest to the public at large because of state and nation-wide media coverage relating to gay and lesbian rights. Jones, ¶ 19. We noted that the hearing on proposed legislation that included a provision for extending group insurance to domestic partners of state employees in civil unions “brought hundreds of opponents to the Capitol.” Jones, ¶ 21 (citation and internal quotation marks omitted). ¶30 Moe argues that her termination was of significant interest to the Butte public. Moe points to newspaper articles concerning her termination to “show the degree of public interest in [the] matter.” As such, Moe contends that the County was required under §§ 2-3-103 and -111, MCA, to open the special meeting so that any member of the public could have the opportunity to give input to the Council. Moe points out that “[t]he right of public participation is available to all citizens, and not only to those who may be the subject of the decision in question.” Moe acknowledges that if the discussion veered into an area where the right of privacy outweighed the merits of public disclosure, then that portion could have been closed to the public. ¶31 The County argues that it did not violate Montana’s public participation laws in relation to Moe’s termination because the Council’s decision to give advice and consent 16 to Vincent only affected Vincent’s ability to fulfill the County Charter’s requirement to obtain advice and consent for his decision. The County argues that the advice and consent of the Council is not part of an employee’s pre-termination due process, which concludes with the Chief Executive’s termination decision. According to the County, employees are not afforded hearings to plead their case before the Council because an advice and consent meeting is “merely a mechanism for the Council to confirm that the Chief Executive followed the proper process in making his/her decision to appoint or terminate a non-elected department head.” Therefore, according to the County, the Council’s decision is not a matter of significant interest to the public requiring public participation because “it does not have meaning to or affect a portion of the community.” ¶32 The District Court concluded that while the special meeting was non-ministerial, the Council’s actions did not significantly affect the community as whole because its decision to give advice and consent affected Vincent’s ability to terminate Moe “and nothing more.” The District Court determined that the only direct impact of the Council’s decision was on Vincent and Moe. The court noted that although the public was not afforded the right to participate in this matter, Moe was given “ample opportunity” prior to the meeting to participate in the investigation process. ¶33 We agree with the District Court. The special meeting was not “of significant interest to the public,” § 2-3-103(1)(a), MCA, because it did not have “meaning to or affect[] a portion of the community,” Jones, ¶ 16. As the County’s Chief Executive, Vincent had the authority, pursuant to the County Charter, to terminate a non-elected 17 department head after the conclusion of the pre-termination process. During the pre- termination process, Moe had the opportunity to present evidence to Vincent and meet with him. The Council’s special meeting confirmed that Vincent followed the proper steps, and it consented to his termination decision. Unlike Jones, the Council’s decision did not directly affect anyone except Moe and Vincent. While news media reported Moe’s termination, such coverage does not establish by itself that the closed portion of the special meeting was of significant interest to the public. The meeting involved a personnel decision affecting one County employee, and it was not the Council’s function at that meeting to determine whether Moe would be discharged. Moreover, Moe’s assertion that that she lacked the opportunity to participate in her pre-termination processes is without merit. The record makes clear that Moe actively participated in responding to the fact-finding investigation and provided her own arguments and evidence in rebuttal. Accordingly, the District Court correctly concluded that the County did not violate Montana’s public participation laws. ¶34 3. Whether the District Court erred in granting summary judgment in the County’s favor with respect to Moe’s 42 U.S.C. § 1983 claim. ¶35 Moe argues that the County violated her due process rights under 42 U.S.C. § 1983 because she was not allowed to present her own evidence and arguments to the Council during the special meeting and was denied the opportunity to rebut all evidence and arguments that were made to the Council to justify her termination. Moe further contends that the Council was given an “erroneous impression” as to what its role should be because, according to Moe, it was told that it “had no independent obligation to 18 determine if it should give its advice and consent that [she] should be removed for just cause, contrary to the plain language of [Art. IV, Section 4.02(d) of the County Charter].” ¶36 The County argues that Moe confuses the advice and consent process under the County Charter with the due process requirements for the Chief Executive’s termination decision. According to the County, Vincent afforded Moe extensive pre-termination processes. The County argues that Moe was not entitled to address the Council because it was not making the decision whether she should be terminated but rather “was simply asked to confirm” Vincent’s decision. ¶37 The District Court concluded that Moe had a protected property interest in her continued employment based on Art. IV, Section 4.02 of the County Charter, which provides that the Chief Executive cannot terminate a non-elected department head until the Chief Executive has demonstrated good cause for doing so. The court concluded, however, that the County did not deprive Moe of her pre-termination due process rights. The District Court found that Moe fully participated in the pre-termination investigation, based on the following undisputed facts: Moe provided written and verbal responses to Vincent concerning her alleged policy violations and performance deficiencies; Moe received the independent investigator’s report and submitted a multiple-page written response; Moe received a detailed explanation of the policy violations and substantiated performance deficiencies; and Moe met with Vincent to provide him with any additional verbal and written information he should take into consideration before making a final decision. 19 ¶38 Title 42, United States Code Section 1983 provides a cause of action for persons deprived of constitutional rights by another person acting under color of state law. Mysse v. Martens, 279 Mont. 253, 260, 926 P.2d 765, 769 (1996). Persons who have been deprived of due process by government agents in the termination of employment may be entitled to relief under 42 U.S.C. § 1983 if they have a property interest in their employment. Hunter v. City of Great Falls, 2002 MT 331, ¶ 23, 313 Mont. 231, 61 P.3d 764. ¶39 We have held that when a government employer has, by administrative regulation, limited its ability to terminate an employee without just cause, employees subject to that scheme have a property interest in their continued employment, which is protected by due process. Boreen v. Christensen, 267 Mont. 405, 416, 884 P.2d 761, 767 (1994). In this context, due process requires “oral or written notice to the employee with an explanation of the employer’s evidence and the opportunity for the employee to respond in ‘something less’ than a full evidentiary hearing before termination coupled with a full post-termination hearing ‘at a meaningful time.’” Boreen, 267 Mont. at 410, 884 P.2d at 764 (citing Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 545, 105 S. Ct. 1487, 1496 (1985)) (emphasis in original). “[T]he pretermination hearing need not definitively resolve the propriety of the discharge. It should be an initial check against mistaken decisions—essentially, a determination of whether there are reasonable grounds to believe that charges against the employee are true and support the proposed action.” 20 Boreen, 267 Mont. at 410-11, 884 P.2d at 764 (citing Loudermill, 470 U.S. at 545-46, 105 S. Ct. at 1496). ¶40 Our review of the record convinces us that the District Court correctly applied the law in ruling that Moe’s due process rights were protected. We agree that, pursuant to Art. IV, Section 4.02 of the County Charter, Moe had a protected property interest in her continued employment. That right, however, was not absolute and Moe could be terminated for good cause with due process and with the Council’s advice and consent. Moe does not contend that her post-termination due process rights were violated. As the decision to terminate is vested in the Chief Executive, due process did not require that Moe’s pre-termination opportunity to respond occur in the Council meeting. Moe’s assertion that the Council was “misinformed” as to what “advice and consent” actually meant is without merit. Art. IV, Section 4.02(d) does not impose an “independent obligation” on the Council to determine whether termination was proper. Moe provides no other relevant evidence or authority to support her contention. ¶41 As the District Court noted, the undisputed facts establish that Moe fully participated in the pre-termination process. The opportunities afforded Moe to participate in the pre-termination process, of which she fully availed herself, meet the required due process standard. Moe received a copy of the independent investigator’s report, she responded to the report, and she and her attorney met with Vincent on September 18, 2013, to present her arguments as to whether there were “reasonable grounds to believe that charges against her [were] true and support[ed] the proposed action.” Boreen, 267 21 Mont. 405 at 410-11, 884 P.2d at 764. The undisputed facts establish that Moe received “oral or written notice with an explanation of the employer’s evidence” and had the opportunity to respond in “something less” than a full evidentiary hearing before her termination. Boreen, 267 Mont. at 410, 884 P.2d at 764. Accordingly, the District Court did not err in granting summary judgment in the County’s favor with respect to Moe’s claim that the County violated 42 U.S.C. § 1983. ¶42 4. Whether the District Court erred in ruling as a matter of law that the County did not discharge Moe in violation of its own policies or for refusing to violate public policy. ¶43 Montana’s Wrongful Discharge from Employment Act provides that a discharge is wrongful if: (a) it was in retaliation for the employee’s refusal to violate public policy or for reporting a violation of public policy; (b) the discharge was not for good cause and the employee had completed the probationary period of employment; or (c) the employer violated the express provisions of its own written personnel policy. Section 39-2-904(1), MCA. Moe contends that her discharge was wrongful under all three grounds set forth in § 39-2-904(1), MCA. The District Court granted summary judgment against Moe with respect to her claims under § 39-2-904(1)(a) and (c), MCA. Moe agrees that there are no genuine issues of fact but argues that the court should have granted her—rather than the County—judgment as a matter of law. ¶44 Moe argues that her discharge was wrongful under § 39-2-904(1)(a), MCA, because her termination was “in violation of the Montana Wrongful Discharge and Public 22 Participation laws” and thus in violation of public policy. Moe contends that her discharge was wrongful under § 39-2-904(1)(c), MCA, because the County violated three of its written policies—Article IV, Section 4.02(d)(1) of the County Charter, and two sections of the County’s Code of Ethics, entitled “Public participation” and “Open Meetings.” As discussed, Art. IV, Section 4.02(d)(1) enables the Chief Executive to remove non-elected department heads for just cause with the advice and consent of the Council. Moe claims that, “as a matter of law,” the Council did not “truly” give effective “advice and consent” because its action “was taken in violation of Montana’s Open Meeting and Public Participation laws,” and because the Council was misinformed as to what “advice and consent” actually meant. Moe contends that the County violated the Code of Ethics provisions based on the same arguments she raises under Issues 1 and 2 above relating to open meetings and public participation. ¶45 In regard to § 39-2-904(1)(a), MCA, the County argues that Moe’s contentions are insufficient to form the basis of a claim because Montana’s open meeting and public participation laws do not constitute “public policies” as defined under the Wrongful Discharge Act. Concerning § 39-2-904(1)(c), MCA, the County argues that neither the County Charter nor its Code of Ethics ordinances constitute personnel policies under the Wrongful Discharge Act. In any event, according to the County, Moe cannot show that any alleged violations of the County’s personnel policies caused her termination. The County claims that in the absence of a causal link between the alleged violations and her termination, Moe’s claim fails. 23 ¶46 Based on its rejection of Moe’s open meeting, public participation, and due process claims, the District Court determined that the County did not wrongfully discharge Moe by virtue of violating either its own personnel policies or public policies. ¶47 With respect to Moe’s claims under § 39-2-904(1)(c), MCA, we have determined already that the County did not violate Montana’s open meeting or public participation laws and that the County’s termination procedures did not violate Moe’s rights to due process. Accordingly, her claims that the County violated its Charter or Code of Ethics provisions do not substantiate a claim for wrongful discharge under § 39-2-904(1)(c), MCA. Because Moe’s wrongful discharge claim under § 39-2-904(1)(c), MCA, fails, it cannot serve as the basis for her claim that the County violated public policy under § 39-2-904(1)(a), MCA. Moreover, Moe’s arguments with respect to § 39-2-904(1)(a), MCA, do not correspond with the language of the statute. Moe argues that her termination was in violation of public policy, but she provides no argument or evidence that her discharge was in “retaliation” for her “refusal to violate public policy” or “for reporting a violation of public policy.” Section 39-2-904(1)(a), MCA. We conclude that the District Court was correct in granting summary judgment in favor of the County on this issue. ¶48 5. Whether the District Court correctly concluded that Moe is entitled to a trial on her claim that the County terminated her employment without good cause. ¶49 Section 39-2-904(1)(b), MCA, provides that a discharge is wrongful if it is not for good cause. “Good cause” is defined as “reasonable job-related grounds for dismissal based on a failure to satisfactorily perform job duties, disruption of the employer’s 24 operation, or other legitimate business reason.” Section 39-2-903(5), MCA. A legitimate business reason is one that is “not false, whimsical, arbitrary, or capricious and one that must have some logical relationship to the needs of the business.” Davis, ¶ 10 (citation omitted). In applying this definition, it is important to take into account the “right of an employer to exercise discretion over who it will employ and keep in employment.” Davis, ¶ 10 (citation and internal quotation marks omitted). ¶50 Once an employer submits evidence of good cause for discharge, the employee must submit evidence demonstrating either that the reason for the discharge is not “good cause” in and of itself or that the given reason “is a pretext and not the honest reason for the discharge.” Becker v. Rosebud Operating Servs., 2008 MT 285, ¶ 24, 345 Mont. 368, 191 P.3d 435 (citation and internal quotation marks omitted). If the undisputed facts show “good cause” for discharge from employment, summary judgment is appropriate. Davis, ¶ 14; Becker, ¶ 30. ¶51 On cross-appeal, the County argues that the undisputed facts establish that it had good cause to terminate Moe’s employment and that we should reverse the District Court’s denial of summary judgment and remand for entry of judgment in favor of the County. The County claims that it terminated Moe’s employment based on her failure to perform her job duties, disruption of County operations, and “other legitimate business reasons.” The County points to employee complaints regarding Moe’s job performance and behavior, Moe’s unresponsiveness to Vincent’s requests for further communication, Moe’s failure to inform Vincent of potential wage claims—including one in which Moe 25 stood to gain the most significant financial benefit—and Moe’s participation in a conference call in her County office during working hours with an attorney who was representing the employees pursuing potential wage claims against the County. Moe’s conduct, according to the County, constituted a violation of the duty of public trust and “undermined [Vincent’s] confidence in her ability to faithfully serve as a member of [the County’s] management team.” ¶52 Moe counters that whether she had satisfactorily performed her job duties “is a factual question that cannot be decided by summary judgment.” Moe asserts that her two summary judgment affidavits “aver many discrete facts that are in contradiction to the summary judgment affidavits submitted by [the County].” Moe argues further that her discharge was pretextual because “Vincent wanted to discharge [Moe] in order to discourage any litigation concerning the Fox Lawson compensation plan.” ¶53 The District Court concluded that a genuine issue of material fact existed as to “whether Vincent’s decision to terminate [Moe’s] employment was pretextual and not for good cause.” The court explained that Moe and the County had different characterizations of the evidence in regard to a number of Vincent’s accusations. The court concluded that “a properly instructed jury could conclude that [Moe] did in fact satisfactorily perform[] her job duties and did not disrupt [County] operations. A jury could also conclude to the contrary.” ¶54 Based on our review of the record, we agree with the District Court’s conclusion. We recognize that because Moe occupied a managerial position, Vincent had broad 26 discretion to decide whether to keep Moe in employment. Baumgart, ¶ 39, Sullivan v. Cont’l Constr. of Mont., LLC, 2013 MT 106, ¶ 18, 370 Mont. 8, 299 P.3d 832. Employers have the broadest discretion when dealing with managerial employees. Baumgart, ¶ 39. “We afford employers the greatest discretion where an employee occupies a ‘sensitive’ managerial position and exercises ‘broad discretion’ in [her] job duties.” Sullivan, ¶ 18. ¶55 In Baumgart, the Department of Commerce presented direct evidence that Baumgart, the former administrator of the Department’s Tourism and Promotion Division failed to appropriately manage her budget for five consecutive years, placing the Division “in the precarious position of having more than $4 million in extremely valuable funds swept out of her budget and into the general fund.” Baumgart, ¶ 36. We upheld summary judgment in favor of the employer because Baumgart could not “refute the existence of the budget problem or her admissions that she did not understand the Division’s budget.” Baumgart, ¶ 36. Moreover, we concluded that “Baumgart failed to present any evidence of other underlying reasons for her termination, aside from her unsupported allegations of political motivation for both the political discrimination and wrongful discharge claims.” Baumgart, ¶ 37 (emphasis in original). ¶56 In Sullivan, Continental Construction terminated Sullivan because it believed that “Sullivan had failed to fulfill the requirements of his managerial position and had failed to act in a trustworthy manner” by “treating employees and subcontractors in a demeaning manner”; “having frequent unexplained absences from work”; “speaking to 27 others in a derogatory manner about customers and employees”; and “behaving in a manner that did not meet the standards of Continental Construction.” Sullivan, ¶¶ 12, 25. Sullivan argued that he raised genuine issues of material fact to suggest that his employer lacked good cause to terminate his employment. Sullivan, ¶ 26. To support this assertion, Sullivan pointed to statements made by other employees who indicated that Sullivan “had not acted inappropriately in their presence.” Sullivan, ¶ 26. He also argued that he “regularly had invited his employees over to his house for dinner and recently organized a group golf trip for his employees.” Sullivan, ¶ 26. We concluded that Sullivan failed to present material and substantial evidence to raise a genuine issue of material fact as to whether Continental Construction had good cause to terminate him. We noted, The fact that not every Continental Construction employee complained about Sullivan failed to undermine the validity of Continental Construction’s conclusion that Sullivan’s continued employment could threaten its future viability in Montana. Similarly, the fact that Sullivan apparently treated some employees well does not challenge the validity of the complaints made by other Continental Construction employees. Sullivan, ¶ 27. ¶57 An employer’s broad discretion in handling managerial employees is not absolute. In Guertin v. Moody’s Market, 265 Mont. 61, 874 P.2d 710 (1994), we held that where a managerial employee testified that she was a hardworking and loyal employee and had not received previous complaints from her employer about her management capability, and where she explained why she believed that the reasons given by her employer for her termination were factually incorrect, there was an issue of fact regarding whether she was 28 terminated for good cause. Guertin, 265 Mont. at 69, 874 P.2d at 715. In Howard v. Conlin Furniture No. 2, 272 Mont. 433, 901 P.2d 116 (1995), Howard’s direct supervisor testified regarding several events that demonstrated Howard’s unsatisfactory performance of his job duties as a furniture store manager. Howard, 272 Mont. at 439-40, 901 P.2d at 120. Howard responded by deposition to the allegations against him, denying each allegation with specific claims and counterclaims. Howard, 272 Mont. at 440, 901 P.2d at 120. We concluded that Howard’s “claims, denials, and counterclaims raise a factual issue as to whether Howard was terminated for good cause within the meaning of § 39-2- 903(5), MCA, of the Wrongful Discharge From Employment Act.” Howard, 272 Mont. at 440, 901 P.2d at 120. Because of the factual issues raised by Howard’s detailed responses, we concluded that “reasonable persons could differ regarding inferences to be drawn from the deposition testimony and exhibits.” Howard, 272 Mont. at 440, 901 P.2d at 121. ¶58 This case is more akin to Guertin and Howard than it is to Baumgart and Sullivan. Moe has raised sufficient factual disputes that would support a conclusion that the reason for her discharge was not “good cause” in and of itself or that the given reason was “a pretext and not the honest reason for the discharge.” Becker, ¶ 24. ¶59 Similar to Guertin, in her response to her termination letter, Moe stated that she “worked hard for [the County] and [had] never before been disciplined.” In her response to the fact-finding investigative report, Moe explained why she believed that the reasons given by the County for her termination were incorrect. The majority of the County’s 29 allegations against Moe stem from the fact-finding investigative report. Similar to Howard, Moe submitted a detailed written response to the report in which she took issue with nearly all of the allegations against her. For example, with respect to the allegations that Moe failed to maintain a close cooperative working relationship with Vincent, Moe disputed that Vincent advised her at the February 8, 2013 meeting that he expected better communication from her. Moe contends that the “only reference to poor communication” during that meeting was in regard to an allegation from a Mr. McCarthy faulting her for a delay in direct deposits. Moe alleges that she “was able to show that the direct deposit problem was not due to [her delay], but because there was a new HR/Payroll system and a payroll clerk had not appropriately filled in an effective entry date field.” In addition, while Moe does not dispute that she did not advise Vincent of the potential pay plan litigation between April 15 and April 22, 2013, she maintains that Vincent had knowledge already of the potential liability and that she had kept him informed: Vincent was notified immediately upon taking office that the pay plan was and continues to be a liability for [the County]. The concern and awareness of liability was acknowledged by Ms. Joyce who stated in one of our January meetings to Mr. Vincent that “yes the pay plan is another big liability we have but we can talk about that another day, ha ha.” All parties were aware that failure to follow the pay plan adopted by the council created the potential for liability. Mr. Amerman and I had several meetings with Mr. Vincent since January up until the time I was placed on leave advising and educating him on the pay plan and discussing our concerns if we do not get this pay plan back on track and moving forward. ¶60 With respect to the allegation that Moe’s phone conversation with an attorney during working hours was inappropriate, Moe claims that her staff asked her to speak 30 with the attorney and that she did so for “about two minutes” only “to confirm” that retaliation against staff because of the lawsuit would be illegal. In her response to the investigative report, however, Moe also claims that “[f]or personal business I have a First Amendment right to talk with anyone I want.” In light of these somewhat conflicting statements in the record, it is unclear whether Moe’s conversation with the attorney was for personal reasons or in her capacity as the County’s Human Resources Director. It is clear, however, that Moe disputes the allegation that the conversation was inappropriate. Moe disputes also the allegations that she lacked comprehensive knowledge of public sector practices and procedures regarding the Fox Lawson Pay Plan and that she jeopardized County employment practices and liability insurance by failing to implement required policy changes. ¶61 Unlike Baumgart, Moe refutes the existence of persistent problems in her department and never acknowledged a lack of understanding of any job duty or responsibility. Furthermore, where Baumgart failed to correct her mistakes for five consecutive years, Moe alleges that she was terminated before she had time to rectify the mistakes perceived by Vincent. In particular, Moe denies that Vincent gave her a directive at the February 8, 2013 meeting to improve communication. She claims that the specific issues he and Joyce brought up at the February 8, 2013 meeting were not substantiated and that she “was able to rebut all of those allegations.” Moe explains that from January up until the time she was placed on leave, she had several meetings with Vincent and Mr. Amerman regarding concerns about the Fox Lawson Pay Plan. Drawing 31 all reasonable inferences in favor of Moe, Baumgart, ¶ 14, the first time that she became aware of Vincent’s concerns with her communication methods was on April 22, 2013, when Vincent asked Moe about the potential pay plan litigation. Moe was placed on administrative leave on May 3, 2013—less than two weeks later. ¶62 Different from Sullivan, where Sullivan relied on vague statements from other employees and immaterial information about his conduct with other employees outside the workplace, Moe has presented exhaustive responses to the allegations against her, including a four-page letter responding to her termination letter and a nine-page written response to the investigative report. The Court’s only inquiry in reviewing a summary judgment order is to determine whether the evidence establishes a genuine issue of material fact. M. R. Civ. P. 56(c)(3); Anderson, ¶ 15. Moe’s responses potentially could be viewed by a jury to “challenge the validity” of the County’s conclusion that she undermined Vincent’s confidence in her ability to serve as a member of the County’s management team. Sullivan, ¶ 27. ¶63 In contrast to Davis, we are unable to conclude that the facts that are undisputed are sufficient to establish good cause. Davis, ¶ 14. We conclude that “reasonable persons could differ regarding inferences to be drawn” from the fact-finding investigative report and Moe’s responses to the allegations against her. Howard, 272 Mont. at 440, 901 P.2d at 121. The evidence Moe presents to support her disputes of the material facts are more than “conclusory statements, speculative assertions, or mere denials,” Davis, ¶ 7, and are thus sufficient to defeat the County’s motion for summary judgment. In light 32 of these genuine issues of fact, we affirm the District Court’s denial of summary judgment to the County. CONCLUSION ¶64 For the foregoing reasons we affirm the District Court’s grant of summary judgment in the County’s favor with respect to Issues 1, 2, 3, and 4. We affirm the District Court’s denial of summary judgment to the County on Issue 5 and remand for further proceedings. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ JIM RICE

May 10, 2016

0efeb493-bd16-42af-bc6b-cedea152fed5

State v. Sherman

2016 MT 110N

DA 14-0524

Montana

Montana Supreme Court

DA 14-0524 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 110N STATE OF MONTANA, Plaintiff and Appellee, v. SHANE SHERMAN, Defendant and Appellant. APPEAL FROM: District Court of the Sixth Judicial District, In and For the County of Park, Cause No. DC 2013-61 Honorable Brenda Gilbert, 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, Tammy A. Hinderman, Assistant Attorney General, Helena, Montana Bruce E. Becker, Park County Attorney, Kathleen Carrick, Deputy County Attorney, Livingston, Montana Submitted on Briefs: March 23, 2016 Decided: May 10, 2016 Filed: __________________________________________ Clerk May 10 2016 Case Number: DA 14-0524 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 Shane Sherman appeals the November 13, 2013 decision and order of the Sixth Judicial District Court, Park County, denying his motion to dismiss his misdemeanor Driving Under the Influence of Alcohol (DUI) conviction and declining to grant him a trial de novo. ¶3 Sherman was tried in Park County Justice Court—a court of record—before a jury and was found guilty. A non-lawyer justice of the peace presided over the trial. Sherman appealed to the District Court demanding a trial de novo. Sherman moved to dismiss the case, arguing that the prosecution of a jailable offense before a non-lawyer judge without the option of a trial de novo appeal violated the Due Process and Right to Counsel Clauses of the United States and Montana Constitutions. Sherman also moved to dismiss the case with prejudice on the ground that the Justice Court failed to record the entire trial. ¶4 The District Court declined to rule on Sherman’s due process and right to counsel claims. The court did, however, reverse the judgment of the Justice Court and remanded the case for a new trial on the ground that Sherman’s rights were violated by the Justice Court’s failure to record large portions of the trial. On remand, Sherman entered a plea 3 of no contest, reserving the right to appeal. The Justice Court reinstated the original sentence and Sherman appealed again. The District Court affirmed the Justice Court’s judgment and sentence and stayed execution of sentence pending appeal to this Court. ¶5 This appeal concerns substantially similar facts and issues as State v. Davis, 2016 MT 102, ___ Mont. ___, ___ P.3d ___. As in that case, we conclude here that Sherman’s trial before a non-lawyer justice of the peace, even though trial de novo was not available on appeal, did not violate his constitutional right to due process or to effective assistance of counsel. ¶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 of the Court, Davis resolves the issues on appeal. The District Court’s decision and order are affirmed. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ JIM RICE

May 10, 2016

097f6885-6ae0-4fa3-a1fc-63e6061f2a19

State v. Crawford

2016 MT 96

DA 14-0207

Montana

Montana Supreme Court

DA 14-0207 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 96 STATE OF MONTANA, Plaintiff and Appellee, v. ROBERT LEE CRAWFORD, Defendant and Appellant. APPEAL FROM: District Court of the Twentieth Judicial District, In and For the County of Lake, Cause No. DC 12-49 Honorable James A. Manley, Presiding Judge COUNSEL OF RECORD: For Appellant: Chad Wright, Chief Appellate Defender, Chad R. Vanisko, Assistant Appellant Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Katie F. Schulz, Assistant Attorney General, Helena, Montana Steven Eschenbacher, Lake County Attorney, James Lapotka, Deputy County Attorney, Polson, Montana Submitted on Briefs: February 17, 2016 Decided: April 26, 2016 Filed: __________________________________________ Clerk April 26 2016 Case Number: DA 14-0207 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Robert Lee Crawford appeals his conviction from the Twentieth Judicial District Court, Lake County, for criminal possession of dangerous drugs. We affirm. ¶2 We address the following issues on appeal: (1) Whether the District Court erred in denying Crawford’s motion to suppress evidence of methamphetamine that law enforcement officers found on Crawford’s person after conducting a search incident to his arrest for violating the terms of his parole. (2) Whether Crawford received ineffective assistance of counsel when his counsel did not file proposed findings of fact and conclusions of law following the evidentiary hearing relating to Crawford’s suppression motion. (3) Whether the District Court abused its discretion by denying Crawford’s third discovery request. (4) Whether the District Court erred by denying Crawford’s posttrial motion to dismiss based upon the Court’s failure to arraign him on the Second Amended Information. (5) Whether the District Court adequately addressed Crawford’s complaints concerning his assigned counsel. FACTUAL AND PROCEDURAL BACKGROUND ¶3 On December 23, 2010, Crawford was released on parole in Butte-Silver Bow County after his incarceration at the Montana State Prison for multiple drug-related felony convictions. As a condition of his parole, a travel restriction was imposed upon Crawford, which required that he obtain written permission from his parole officer, Karley Kump (Officer Kump), before travelling outside the counties of Silver Bow, Beaverhead, Jefferson, and Deer Lodge. 3 ¶4 On March 13, 2012, Flathead Tribal Police Officer Casey Couture (Officer Couture) was on patrol in Lake County when he observed a vehicle with a single operating headlight. Officer Couture initiated a traffic stop and identified Crawford as the driver of the vehicle. Officer Couture noticed that there were four passengers in the vehicle, one of whom Officer Couture recognized as Asa Lehrke (Lehrke) based upon Lehrke’s prior involvement in the sale of illegal drugs. Officer Couture arrested Lehrke on an outstanding warrant and issued a warning to Crawford regarding his inoperative headlight. While being transported, Lehrke told Officer Couture that two of the men in the vehicle were armed robbery suspects and another one of the men produced methamphetamine. ¶5 After returning to the Flathead Tribal Police Station, Officer Couture searched the Montana Correctional Offender Network database and learned that Crawford was on parole in Silver Bow County. Officer Couture contacted the Butte-Silver Bow County Probation and Parole Office and left a voice message, inquiring as to whether Crawford was in violation of his parole. Officer Kump returned Officer Couture’s call and spoke with Northwest Drug Task Force Agent Arlen Auld (Agent Auld). Officer Kump advised Agent Auld that Crawford was in violation of his parole, explaining that Lake County was outside his assigned travel district and Crawford did not have permission to travel outside the district. Officer Kump requested that Officer Couture arrest Crawford for violating the terms of his parole, and Agent Auld relayed this information to Officer Couture. 4 ¶6 On March 17, 2012, while on patrol in Lake County, Officer Couture and Lake County Sheriff’s Deputy Levi Read (Deputy Read) observed Crawford’s vehicle pull into a local gas station. Based upon the information received from Officer Kump, Officer Couture and Deputy Read initiated a traffic stop of Crawford’s vehicle and placed Crawford under arrest for violating his parole. After conducting a search incident to arrest, the officers discovered two vials in Crawford’s pants pocket. Subsequent testing at the Montana State Crime Lab revealed that the vials contained methamphetamine. ¶7 On March 29, 2012, the State charged Crawford by Information with criminal possession of dangerous drugs with the intent to distribute. The Court subsequently arraigned Crawford on that charge. On April 25, 2012, the State amended the Information and added a charge of felony criminal forfeiture. On August 17, 2012, the State filed a Second Amended Information, dismissing the charge of criminal forfeiture and reducing the charge of criminal possession with intent to the lesser-included offense of criminal possession of dangerous drugs. The District Court did not arraign Crawford on the Second Amended Information. ¶8 On July 26, 2013, Crawford filed a third request for discovery in which he requested that the State provide copies of email exchanges between law enforcement and parole officers and information regarding Lehrke as an informant. Crawford also maintained that the arrest video the State provided was not the original video, and Crawford requested he be allowed to view the original video because he believed that the video produced by the State had been altered. The District Court denied Crawford’s 5 request, concluding that the State had complied fully with its discovery obligations under § 46-15-322, MCA. ¶9 On February 5, 2013, Crawford filed a motion to suppress the evidence of methamphetamine found on his person and alleged that the arresting officers had no authority to detain him. Crawford maintained that the search was unlawful because the arresting officers used Crawford’s parole status as a false pretense for their real intent, which Crawford argued was to seek out a purported “meth lab.” After Crawford and the State submitted briefing, the District Court conducted a hearing on Crawford’s motion to suppress. The State thereafter filed proposed findings of fact and conclusions of law with the District Court, but Crawford’s trial counsel did not. The District Court denied Crawford’s motion to suppress, concluding that Officer Couture and Deputy Read lawfully arrested Crawford for violating the terms of his parole and the officers performed a legal search incident to arrest whereupon they discovered the two vials of methamphetamine. ¶10 On the first day of trial on December 2, 2013, Crawford requested that he be given a copy of the Second Amended Information. The court informed Crawford that he would need to discuss the Second Amended Information with his attorney, which led to the following exchange regarding Crawford’s trial counsel: Court: Mr. Crawford, you have very able counsel. You would be well-advised to work through him and in front of the jury let him— Crawford: I don’t have a whole lot of faith here, your Honor. Court: Well, he’s a very competent attorney 6 Crawford: I’m the one facing 100 years here. ¶11 On the second day of trial on December 3, 2013, Crawford and the District Court again engaged in an exchange regarding Crawford’s counsel: Court: Mr. Stenerson has been your attorney since August. Have you been satisfied with the services of Mr. Stenerson? Crawford: He has been my attorney since November of 2012. And he has done more in my case than anybody else has. But as far as things getting done in a timely manner, things being followed through with, no. I think— I feel strongly there’s prejudice against me because there’s items that have been brought in in front of the jury, a whole file full of pictures that— Court: As to the claim of ineffective assistance of counsel, given the fact that Mr. Stenerson, it sounds like, has done a professional job and he has been your counsel for a year now, there isn’t anything that at this stage of the proceedings would lead a court to say that this—that this has been proven. This is going to require a separate hearing. It’s going to require a written motion, and we are not going to do that in mid trial. Crawford: I was going say, we’re at trial, and I have tried to bring these issues up. ¶12 On December 3, 2013, a jury found Crawford guilty of criminal possession in violation of § 45-9-102, MCA. The District Court sentenced Crawford as a persistent felony offender and committed him to the Montana State Prison for a term of 20 years, with 10 of those years suspended. ¶13 On December 31, 2013, Crawford filed a posttrial motion to dismiss, arguing that the State’s failure to arraign him on the Second Amended Information constituted reversible error. The District Court denied the motion, concluding that, because the Second Amended Information merely dropped one charge, reduced another charge to a lesser-included offense, and did not add any new charges, the Second Amended 7 Information included no substantive amendments. The court explained that pursuant to § 46-11-205, MCA, a defendant is required to be arraigned on an amended information only if an amendment is substantive. ¶14 Crawford timely appealed. STANDARD OF REVIEW ¶15 We review a district court’s ruling on a motion to suppress to determine whether its findings of fact are clearly erroneous and its interpretation and application of the law are correct. State v. Fischer, 2014 MT 112, ¶ 8, 374 Mont. 533, 323 P.3d 891. ¶16 Ineffective assistance of counsel claims are mixed questions of law and fact that this Court reviews de novo. State v. Crosley, 2009 MT 126, ¶ 27, 350 Mont. 223, 206 P.3d 932. DISCUSSION ¶17 (1) Whether the District Court erred in denying Crawford’s motion to suppress evidence of methamphetamine that law enforcement officers found on Crawford’s person after conducting a search incident to his arrest for violating the terms of his parole. ¶18 Both the Fourth Amendment to the United States Constitution and Article II, Section 11 of the Montana Constitution protect individuals from unreasonable searches and seizures. Under Montana law, warrantless searches are per se unreasonable. State v. Galpin, 2003 MT 324, ¶ 54, 318 Mont. 318, 80 P.3d 1207. However, when a lawful arrest is made, a police officer may conduct a search incident to arrest without a warrant and “reasonably search the person arrested and the area immediately within his reach in order to locate any weapons the person might use or any evidence that might otherwise be destroyed.” Galpin, ¶ 54. 8 ¶19 Crawford argues that the District Court erred by denying his motion to suppress the evidence of methamphetamine found on his person because “the arresting officers used his parole status as a false pretense for their real intent, which was to conduct a criminal investigation and seek out a purported ‘meth lab.’” Although Crawford does not dispute that the arresting officers possessed sufficient cause to arrest Crawford for violating the terms of parole under § 46-23-1023(2), MCA, Crawford contends that the search incident to his arrest was nonetheless unlawful under the so-called “stalking horse” theory.1 Citing this Court’s decision in State v. Fritz, 2006 MT 202, 333 Mont. 215, 142 P.3d 806, and the Ninth Circuit Court of Appeals’ decision in United States v. Harper, 928 F.2d 894 (9th Cir. 1991), Crawford maintains that pursuant to the stalking horse theory, an otherwise lawful parole search may be invalidated under the Fourth Amendment if the search was not for a parole purpose, but was a mere subterfuge for a criminal investigation. Thus, Crawford asks this Court to inquire into the subjective motivations of the arresting officers—Officer Couture and Deputy Read—to determine whether the officers intended to detain Crawford for a “parole purpose” or intended to detain him for a “criminal investigative purpose.” If the officers intended the former Crawford concedes that the search was lawful, but if the officers actually intended the latter then according to Crawford the search was unlawful. 1 The term “stalking horse” is often used to refer to a “decoy.” Safire’s New Political Dictionary 750 (1993). See also Webster’s Third New International Dictionary 2221 (1976) (“1: a horse or a figure like a horse behind which a hunter stalks game 2: something used to cover up a secret project: MASK, PRETENSE”). 9 ¶20 We decline Crawford’s request to inquire into the subjective motivations of Officer Couture and Deputy Read to determine the legality of his arrest for a number of reasons. First, we have never adopted the stalking horse theory to invalidate an otherwise lawful parole search. In Fritz, the defendant maintained that an otherwise lawful search was unlawful because the “police officers . . . used the probation officers as subterfuge for a criminal investigation.” Fritz, ¶ 13. However, contrary to Crawford’s contention, we did not recognize in Fritz the validity of the stalking horse theory. The facts in Fritz simply did not require us to do so because there was no merit to Fritz’s argument that the officers were not conducting a valid criminal investigation unrelated to Fritz’s status as a probationer. Fritz, ¶ 13. Thus, it was unnecessary in Fritz to consider the validity of the stalking horse theory. ¶21 Second, our precedent has long established that inquiry into the subjective motivations of law enforcement, necessarily required by the stalking horse theory, is inappropriate in assessing the validity of an arrest. In State v. Farabee, 2000 MT 265, 302 Mont. 29, 22 P.3d 175, we made clear that an otherwise lawful traffic stop under either the Fourth Amendment or the Montana Constitution remained valid despite the subjective motivations of the individual officers involved. We reasoned that the United States Supreme Court had expressly rejected such an inquiry into the subjective motivations of law enforcement in its decision in Whren v. United States, 517 U.S. 806, 116 S. Ct. 1769 (1996), and we concluded that nothing in Article II, Section 11 of the Montana Constitution provided an independent justification for deviating from the United States Supreme Court’s decision. Farabee, ¶ 30. We explained that our precedent 10 clearly demonstrates that “the lawfulness of a traffic stop under the Montana Constitution depends on whether the officer had a particularized suspicion that an occupant of the vehicle has committed or is committing an offense,” not on the actual motivations of individual officers. Farabee, ¶ 30. ¶22 Third, notwithstanding Crawford’s citation to the Ninth Circuit’s decision in Harper, we have not been supplied, nor has our research discovered, any authority from other jurisdictions supporting the stalking horse theory. In the wake of the United States Supreme Court’s decision in United States v. Knights, 534 U.S. 112, 122 S. Ct. 587 (2001), the Ninth Circuit overruled its decision in Harper, see United States v. Stokes, 292 F.3d 964, 967 (9th Cir. 2002) (explaining that the “circuit’s line of cases holding searches of probationers invalid on the ground that they were subterfuges for criminal investigations is, in that respect, no longer good law”), and federal and state courts alike have followed suit in repudiating the stalking horse theory. In Knights, a unanimous Supreme Court overturned a Ninth Circuit decision that had invalidated a search of a probationer on the basis that the search was not for probationary purposes, but was a mere subterfuge for a criminal investigation. See United States v. Knights, 219 F.3d 1138, 1145 (9th Cir. 2000). The Supreme Court upheld the search as supported by reasonable suspicion in light of the totality of the circumstances and expressly stated that “there is no basis for examining official purpose.” Knights, 534 U.S. at 122, 122 S. Ct. at 593. Since the Supreme Court’s decision in Knights, those courts that have addressed the continued validity of the stalking horse theory have concluded that Knights dealt the theory a fatal blow, reasoning that “when [the Supreme Court] rejected any challenge 11 based on the ‘actual motivations’ of the officers, the Court confirmed that the Fourth Amendment does not require a stalking horse inquiry.” United States v. Brown, 346 F.3d 808, 812 (8th Cir. 2003). Accord United States v. Reyes, 283 F.3d 446, 463-64 (2d Cir. 2002); United States v. Williams, 417 F.3d 373, 378 (3d Cir. 2005); Stokes, 292 F.3d at 967; United States v. Tucker, 305 F.3d 1193, 1199-1200 (10th Cir. 2002); State v. Kottman, 2005 S.D. 116, ¶ 14, 707 N.W.2d 114; Helphenstine v. Commonwealth, 423 S.W.3d 708, 716 (Ky. 2014). ¶23 Lastly, even if we were to breathe new life into the stalking horse theory, we would not extend its application to the facts of this case. Although the exact parameters of the theory are ill-defined, the underlying premise of the theory was to prevent parole officers from using their parole authority to conduct a home visit and a subsequent warrantless search to help law enforcement evade the Fourth Amendment’s warrant and probable cause requirements for police searches and seizures. United States v. Richardson, 849 F.2d 439, 441 (9th Cir. 1988). Here, however, the law enforcement officers did not conduct a home visit or a warrantless search of Crawford’s home. Rather, the officers arrested Crawford outside of his home pursuant to § 46-23-1023(2), MCA, for violating the terms of his parole. Section 46-23-1023(2), MCA, provides that “[a]ny probation and parole officer may arrest the parolee without a warrant or may deputize any other officer with power to arrest to do so by giving the officer oral authorization . . . .” Accordingly, based upon this statutory procedure and authorization from Crawford’s parole officer, Crawford’s arrest was lawful. After making the arrest, the officers conducted a lawful search incident to arrest of Crawford and discovered the 12 methamphetamine. We know of no case, nor does Crawford cite a case, wherein the stalking horse theory has been applied to invalidate an otherwise lawful search incident to arrest outside of the parolee’s home. Thus, the stalking horse theory, assuming its validity, would not be applicable to the facts of this case where the law enforcement officers were not attempting to gain entry into Crawford’s home. ¶24 We decline to inquire into the subjective motivations of Officer Couture and Deputy Read. Because the officers lawfully arrested Crawford pursuant to § 46-23-1023(2), MCA, for violating the terms of his parole, the search incident to his arrest was lawful. Accordingly, the District Court did not err in denying Crawford’s motion to suppress the evidence of methamphetamine found on his person. ¶25 (2) Whether Crawford received ineffective assistance of counsel when his counsel did not file proposed findings of fact and conclusions of law following the evidentiary hearing relating to Crawford’s suppression motion. ¶26 Both the Sixth Amendment to the United States Constitution and Article II, § 24 of the Montana Constitution guarantee an individual the right to the effective assistance of counsel in all criminal prosecutions. We review claims of ineffective assistance of counsel using the two-part test set forth in Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052 (1984). State v. Gunderson, 2010 MT 166, ¶ 67, 357 Mont. 142, 237 P.3d 74. The test requires that a defendant show: (1) that counsel’s performance fell below an objective standard of reasonableness, and (2) that a reasonable probability exists that, but for counsel’s errors, the result of the proceeding would have been different. Gunderson, ¶ 67. Because a defendant must satisfy both prongs of the Strickland test, “if a defendant 13 makes an insufficient showing regarding one prong of the test, there is no need to address the other prong.” Gunderson, ¶ 68. ¶27 Crawford argues that his trial counsel provided ineffective assistance of counsel by failing to file proposed findings of fact and conclusions of law following the evidentiary hearing relating to his motion to suppress the evidence of methamphetamine found on his person. He maintains that his counsel’s failure in this regard caused him substantial prejudice. ¶28 In light of our resolution of Issue I, we cannot agree with Crawford that he was prejudiced by his counsel’s failure to file proposed findings of fact and conclusions of law. Crawford’s sole argument for invaliding the search at both the suppression hearing and in his briefing to the District Court was that the arresting officers used the parole officer as a stalking horse. Similarly, on appeal, Crawford offers no explanation for invalidating the search other than the stalking horse theory. As we have rejected the stalking horse theory, Crawford cannot establish that he was prejudiced. Even if Crawford’s counsel had submitted proposed findings of fact and conclusions of law and better articulated the stalking horse theory, the theory was fatally flawed. Thus, given our resolution of Issue I, Crawford’s argument that he was prejudiced by his counsel’s performance necessarily fails. ¶29 (3) Whether the District Court abused its discretion by denying Crawford’s third discovery request. ¶30 Crawford argues that the District Court abused its discretion by denying Crawford’s third discovery request. He maintains that the State unlawfully withheld: (1) 14 email communications between law enforcement and parole officers; (2) documentation regarding Lehrke as an informant; and (3) an original recording of the arrest. ¶31 The State counters that it complied with discovery by providing all relevant information in its possession. The State maintains that email communications between law enforcement and the parole officers as well as any documentation regarding Lehrke are irrelevant to Crawford’s guilt as to the offense charged. Regarding the original recording of the arrest, the State maintains that no video exists other than the video it provided in discovery. ¶32 In all criminal cases the prosecution has a long-established constitutional duty under the United States Supreme Court’s decision in Brady v. Maryland, 373 U.S. 83, 83 S. Ct. 1194 (1963), to provide to the defense any exculpatory or impeachment evidence in its possession. McGarvey v. State, 2014 MT 189, ¶ 16, 375 Mont. 495, 329 P.3d 576 (citing State v. Ellison, 2012 MT 50, ¶ 15, 364 Mont. 276, 272 P.3d 646; State v. Cooksey, 2012 MT 226, ¶ 34, 366 Mont. 346, 286 P.3d 1174). The Montana Legislature has further adopted a statutory scheme that places affirmative duties on the prosecution to provide evidence to the defendant. Section 46-15-322, MCA. Section 46-15-322(1)(e), MCA, requires the State, upon request, to produce “all material or information that tends to mitigate or negate the defendant’s guilt as to the offense charged . . . .” Additionally, if the defense requests evidence under subsections (1)(a) through (1)(d) or (2)(a) through (2)(c) of § 46-15-322, MCA, the State has an obligation to disclose relevant evidence regardless of whether the evidence is exculpatory or inculpatory. State v. Hatfield, 269 Mont. 307, 312, 888 P.2d 899, 902 (1995). The party seeking to establish a Brady 15 violation or a violation of statutory disclosure bears the burden of establishing a violation. State v. Giddings, 2009 MT 61, ¶ 48, 349 Mont. 347, 208 P.3d 363. ¶33 We agree with the State that Crawford has failed to show that the State suppressed exculpatory or otherwise relevant evidence. Crawford maintains that correspondence between law enforcement and parole officers was relevant to show that the arresting officers concealed their true intent to investigate the purported meth lab and that the information “would have assisted in the aforementioned ‘stalking horse’ defense.” This information may have been relevant to the stalking horse theory advanced during the suppression motion of these proceedings, but its relevance to Crawford’s guilt or innocence regarding whether he had methamphetamine on his person when arrested has not been advanced. And, as explained above, we reject the stalking horse theory under the facts of this case. Thus, any information concerning the subjective motivations of the arresting officers was irrelevant and not exculpatory evidence during proceedings related to Crawford’s suppression motion. Regarding information related to Lehrke as an informant, Crawford does not attempt on appeal to explain the relevance of the information requested or specify what information or document he is actually requesting. Lehrke did not testify at trial or at the suppression hearing and any information regarding the officers’ motivation in arresting Crawford is irrelevant. We are thus unable to conclude that the information was potentially exculpatory and relevant to Crawford’s “guilt as to the offense charged.” Section 46-15-322(1)(e), MCA. ¶34 Lastly, with respect to Crawford’s claim that he was unable to view the original video, Crawford failed to introduce evidence, at the suppression hearing or at trial, 16 casting doubt on the authenticity of the video provided by the State. Crawford did not provide expert testimony demonstrating that video produced by the State was not an original. Nor did Crawford elicit any testimony from law enforcement showing an original video existed. Therefore, we conclude that Crawford has failed to demonstrate that the State withheld relevant evidence as to the offense charged. The District Court did not abuse its discretion in denying Crawford’s third discovery request. ¶35 (4) Whether the District Court erred by denying Crawford’s posttrial motion to dismiss based upon the Court’s failure to arraign him on the Second Amended Information. ¶36 Section 46-11-205, MCA, provides: (1) The court may allow an information to be amended in matters of substance at any time, but not less than 5 days before trial, provided that a motion is filed in a timely manner, states the nature of the proposed amendment, and is accompanied by an affidavit stating facts that show the existence of probable cause to support the charge as amended. A copy of the proposed amended information must be included with the motion to amend the information. (2) If the court grants leave to amend the information, the defendant must be arraigned on the amended information without unreasonable delay and must be given a reasonable period of time to prepare for trial on the amended information. (3) The court may permit an information to be amended as to form at any time before a verdict or finding is issued if no additional or different offense is charged and if the substantial rights of the defendant are not prejudiced. ¶37 We have explained that under § 46-11-205(2), MCA, “a defendant must be arraigned on any amendment to the information of substance.” State v. Geren, 2012 MT 307, ¶ 64, 367 Mont. 437, 291 P.3d 1144. However, a defendant need not be arraigned under § 46-11-205(3), MCA, on any amendment to the information as to form. Geren, 17 ¶ 64. To differentiate between amendments of form and substance, “we examine whether an amendment to an information or complaint alters the nature of the offense, the essential elements of the crime, the proofs, or the defenses.” Geren, ¶ 59 (quoting State v. Scheffer, 2010 MT 73, ¶ 38, 355 Mont. 523, 230 P.3d 462) (internal quotation marks omitted). ¶38 Crawford argues that the District Court’s failure to arraign him on the Second Amended Information constitutes reversible error. Although Crawford concedes that based on our decision in State v. Adkins, 2009 MT 71, 349 Mont. 444, 204 P.3d 1, the State did not substantively amend the information by reducing the charge of criminal possession with intent to the lesser-included offense of criminal possession, he maintains that the State did substantively amend the information by dismissing the charge of criminal forfeiture. ¶39 We disagree with Crawford that the State substantively amended the information by dismissing the charge of criminal forfeiture. In Adkins, we explained that when the State amends an information to charge an alternate, lesser included offense which is supported by an identical factual basis, such an amendment is not a “substantive change[] to the information” under § 46-11-205, MCA. Adkins, ¶¶ 16-17. In light of our conclusion in Adkins that an amendment which adds a lesser-included offense is not a substantive amendment, we have no trouble concluding that an amendment which dismisses a charge is also not a substantive amendment. Indeed, considering that the purpose of the information is to “apprise the accused of the charges against him,” Geren, ¶ 55, it would make little sense to conclude that the dismissal of a charge is a substantive 18 change to the information. Such a conclusion would require a district court to arraign a defendant on a non-existent charge. The State did not substantively amend the information within the meaning of § 46-11-205, MCA, by reducing the charge of criminal possession with intent to the lesser-included offense of criminal possession and by dismissing the charge of criminal forfeiture. The District Court correctly denied Crawford’s posttrial motion to dismiss. ¶40 (5) Whether the District Court adequately addressed Crawford’s complaints concerning his assigned counsel. ¶41 Crawford argues that the District Court erred by failing to conduct an “adequate initial inquiry” into his complaints concerning his trial counsel. Crawford maintains that after he complained that he did not have “faith” in his counsel and that his counsel’s performance had caused him “prejudice” the court should have inquired into his complaints to determine whether they were “seemingly substantial” pursuant to State v. Gallagher, 1998 MT 70, ¶ 14, 288 Mont. 180, 955 P.2d 1371. The State counters that an initial inquiry was not required under the facts of this case because Crawford never requested that the District Court appoint new counsel. Alternatively, the State argues that the District Court conducted an adequate initial inquiry into Crawford’s complaints. ¶42 The United States Constitution and the Montana Constitution guarantee a criminal defendant the right to effective assistance of counsel. U.S. Const. amend. VI; Mont. Const. art. II, § 24. We have explained that “[i]f a defendant asserts denial of effective assistance and requests appointment of new counsel, a district court must conduct an ‘adequate initial inquiry’ to determine whether the defendant’s claim is ‘seemingly 19 substantial.’” State v. Happel, 2010 MT 200, ¶ 14, 357 Mont. 390, 240 P.3d 1016. In the event that the initial inquiry “reveals a seemingly substantial complaint, the court must hold a hearing to address the validity of the complaints, and appoint separate counsel to represent the defendant.” Happel, ¶ 14. When a defendant does not request substitute counsel, however, “the defendant ‘fails to implicate the “seemingly substantial” analysis and the need for a subsequent hearing’ on his complaints about his lawyer.” State v. Clary, 2012 MT 26, ¶ 28, 364 Mont. 53, 270 P.3d 88 (quoting State v. Racz, 2007 MT 244, ¶ 20, 339 Mont. 218, 168 P.3d 685) (brackets omitted). ¶43 Here, while Crawford complained to the District Court about his counsel, there is no evidence in the record showing that Crawford ever requested that the District Court appoint new counsel.2 Crawford never filed a motion requesting the District Court do so. Nor did Crawford ever make an oral request at any of the pretrial hearings or during trial. Absent “a request for another attorney, the District Court was not required to conduct further inquiry into the matter.” Clary, ¶ 28. Based on the record before us, we conclude that the District Court did not err. ¶44 Affirmed. /S/ LAURIE McKINNON 2 Crawford also argues that he sent the District Court several handwritten documents that he refers to as “kites.” Crawford maintains that in the kites he requested new counsel. However, Crawford concedes that the kites were not admitted in the record, and it is unclear whether the District Court ever saw or was made aware of the documents. To the extent Crawford is attempting to rely on these “kites,” non-record-based trial issues must be addressed first in a postconviction relief proceeding rather than on direct appeal. State v. Bateman, 2004 MT 281, ¶ 23, 323 Mont. 280, 99 P.3d 656. 20 We Concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT /S/ BETH BAKER

April 26, 2016

9c4f7971-56ed-4007-8642-d6ab0e0c1a34

Uniform District Court Rules

N/A

AF 07-0110

Montana

Montana Supreme Court

Request for Excusal State of Montana or County of JurorName JurorMailingAddress JurorMailingCity, JurorMailingState JurorMailingZip (Print Name) declares: Affiant is informed of having been called as a trial juror in the District Court of County of the State of Montana, to be held at , Montana. Affiant is applying for the following excusal and requests the Court's review: K PERMANENT EXCLUSION — Must be chronically incapacitated by illness or injury (include Physician's certification). If Court approves, the Affiant will be permanently excused from jury service. K CHANGE IN RESIDENCE — Affiant no longer resides in County. K UNDUE HARDSHIP — Must state occupation and specific facts which Affiant believes constitutes undue hardship; having in mind jury service constitutes a duty of every competent citizen. Note: If the Court denies your excuse for undue hardship, you may again submit a request if you are summoned for a trial. Examples of potential undue hardships include military service, move, college, long-planned vacation, employment out of state, residence out of state, or other unusual personal circumstance. If you know you will be gone for a specific period of time, please list it here: I declare under penalty of perjury and the laws of the state of Montana that the foregoing is true and correct. Signature of Prospective Juror April 13 2016 Case Number: AF 07-0110 APPROVED NOT APPROVED COMMENTS: DATED this day of , 20 District Judge JurorName JurorMailingAddress JurorMailingCity, JurorMailingState JurorMailingZip Commission Comments: The Uniform District Court Rules Commission received a request from the Automation Committee of the Montana Association of Clerks of District Court. The committee discussed the Affidavit of Excusal which is reflected on the last page of the attached copy of the Uniform District Court Rules found on page 67 in the Lawyer's Deskbook Directory. The Affidavit of Excusal is not codified in Title 25, Chapter 19, and MCA. However, Rule 9, Uniform District Court Rules, refers to a juror questionnaire to which is on file with the clerk of the district court's office. The Affidavit of Excusal is a standard form, provided in conjunction with the Questionnaire as to Qualification for Jury Service, for jurors to use in requesting to be excused from jury service. The Automation Committee proposed removing the notary block which appears beneath the signature line on the Affidavit of Excusal. In place of the notary block, the committee proposed adding the following language above the signature line: "I declare under penalty of perjury and the laws of the state of Montana that the foregoing is true and correct." This language is allowable under §1-1-203, MCA and §1-6-105, MCA, cited below. The Automation Committee proposed this specific language so that regardless of whether the potential juror signs the affidavit within the state of Montana or outside the state of Montana, the language is appropriate. According to the Automation Committee, it can be difficult for those who are elderly, chronically ill or live in rural/remote Montana communities to sign in front of a notary. Removing the requirement for citizens to seek out a notary not only provides a necessary convenience to Montana citizens but also provides for a more expeditious response to the annual notice of jury service to the clerk of court. 1-1-203. Terms relating to instruments and other writings. Unless the context requires otherwise, the following definitions apply in the Montana Code Annotated: (1) "Affidavit" means a sworn written declaration made before an officer authorized to administer oaths or an unsworn written declaration made under penalty of perjury as provided in 1-6-105. 1-6-105. Unsworn declarations -- penalty of perjury. (1) Whenever, under any law of this state or under any rule, order, or requirement made under the law of this state, any matter is required or permitted to be supported, evidenced, established, or proved by a person's sworn written declaration, verification, certificate, oath, or affidavit, the matter may with like force and effect be supported, evidenced, established, or proved by an unsworn written declaration, certificate, verification, or statement that is subscribed by the person as true under penalty of perjury in substantially the following form: (a) If executed within the state: "I declare under penalty of perjury that the foregoing is true and correct. Date and place Signature" (b) If executed in any place outside the state: "I declare under penalty of perjury and under the laws of the state of Montana that the foregoing is true and correct. Date and place Signature" (2) A deliberate falsification in any declaration pursuant to this section constitutes the offense of perjury as provided in 45-7-201 and is punishable as the offense of false swearing as provided in 45- 7-202. A declaration under penalty of perjury executed in accordance with any provision of this code is not limited to the official proceedings referenced in 45-7-201. (3) This section does not apply to writings requiring an acknowledgment, deposition, oath of office, or oath required to be taken before a special official other than a notary public. History: En. Sec. 2, Ch. 238, L. 2011. After the proposal was submitted to the members of the Uniform District Court Rules Commission, some other minor changes were suggested. Thereafter the Uniform District Court Rules Committee received further proposed changes from the Automation Committee. All of the proposed changes have been incorporated into the form being proposed for adoption by the Montana Supreme Court. The Uniform District Court Rules Commission approved the revised Affidavit for Excusal.

April 13, 2016

760dad1c-6eb2-41e2-96fd-bcbb254ba00c

Peretti v. State, Dep’t of Revenue

2016 MT 105

DA 15-0526

Montana

Montana Supreme Court

DA 15-0526 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 105 MICHAEL H. PERETTI and SHELLEY PERETTI, Petitioners and Appellees, v. STATE OF MONTANA, DEPARTMENT OF REVENUE, Respondent and Appellant. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV-13-1210A Honorable Ted O. Lympus, Presiding Judge COUNSEL OF RECORD: For Appellant: Amanda L. Myers, Special Assistant Attorney General, Montana Department of Revenue, Helena, Montana For Appellees: Nathan G. Wagner, Datsopoulos, MacDonald & Lind, P.C., Missoula, Montana Submitted on Briefs: March 30, 2016 Decided: May 10, 2016 Filed: __________________________________________ Clerk May 10 2016 Case Number: DA 15-0526 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 The State of Montana, through the Department of Revenue (DOR), appeals from the District Court’s Order and Rationale dated June 29, 2015. We reverse. ¶2 We restate the issues on appeal as follows: Issue one: Did the District Court err in reversing the order of the State Tax Appeal Board concerning the valuation of the property at issue? Issue two: Did the District Court err in awarding administrative trial costs to the Taxpayers? Issue three: Did the District Court err in ordering DOR to return all taxes paid under protest? FACTUAL AND PROCEDURAL BACKGROUND ¶3 This is a dispute between property owners Michael and Shelley Peretti and the DOR over the appraised value of their .461 acre residential lot with 159 feet of Flathead Lake frontage in Lakeside, Montana. DOR’s original appraisal for the tax year 2012 was $1,356,201 for the land and $166,980 for the improvements. The Perettis appealed this valuation to the Flathead County Tax Appeal Board (County Board) in May 2012. They contended that the appraised value failed to account for a deterioration of market values and that DOR relied upon comparable sales from exclusively residential areas unlike the commercial location of the property at issue. The County Board heard the appeal in January 2013 and reduced the value of the land to $1,192,500 and the value of the improvements to $125,000. ¶4 The Perettis appealed that decision to the State Tax Appeal Board (“STAB”), contending that the appraised value was still too high, requesting a reduction to $900,000 3 for the land and $60,000 for the improvements. STAB conducted an evidentiary hearing in September 2013. ¶5 STAB heard this appeal pursuant to its statutory responsibilities, §§ 15-2-201 and -301, MCA. Montana law requires that property be assessed at 100% of its market value, which is the value at which it would change hands between a willing buyer and seller. Section 15-8-111, MCA. The relevant time for determining the market value of the property at issue here was as of July 1, 2008. Admin. R. M. 42.18.124(b). ¶6 The Perettis presented the testimony of James Kelley, a licensed real estate appraiser. He described the land as residential property that was close to commercial properties and condo developments. He opined that this proximity diminished the value of the land for residential purposes and assumed that no purchaser would keep the existing improvements nor would a purchaser build a high-priced home so close to town. Kelly used only a few other comparable properties in his analysis, relying heavily upon the sales of two non-lakefront properties. He determined that prices had increased 13.5% per year during the valuation period, while also contending that prices had declined. He concluded that the land at issue should be valued at $960,000 and that the improvements had no value. ¶7 The Perettis also presented the testimony of Edwin Berry, who had “math and physics credentials and experience in modeling land valuation computer software.” He criticized the computer-based land pricing model that DOR used to determine property values. He opined that DOR’s results were “demonstrably weak” because they relied on a formula that “produced an R2 of just 17.98% suggesting inaccurate value projections.” 4 STAB allowed the property owners to present Berry’s testimony even though the Perettis had refused to provide any meaningful information about him or his testimony prior to hearing, despite requests that they do so. ¶8 STAB allowed DOR to submit a post-hearing rebuttal to Berry from its Region 1 Manager, Scott Williams. Williams explained that Berry’s opinions incorrectly assumed that DOR used a “single variable to create the linear regression” while it was clear that DOR used three variables. Further, Williams stated that the true R2 value was 83.33%, indicating a reliable formula. Williams was unable to determine any reason for some of Berry’s calculations except that they “steadily lowered the valuation in his clients favor.” ¶9 DOR appraiser Dan Lapan explained the agency’s computer-assisted land valuation program, which in this case gathered information on 29 waterfront land sales that had occurred “in the neighborhood” since the last appraisal. The result showed a “$9,801 average front foot value for lakefront property.” He also discussed two other sales of lakefront property proximate to commercial areas that maintained values of over $9000 per front foot. He opined that the information DOR relied upon showed that proximity to commercial property did not reduce lakefront property values, and that lakefront values had not fallen since the valuation date (June 1, 2008). Lapan also produced photos of one of the comparable properties heavily relied upon by Kelley, showing that it was “steep [and] boulder-covered” and not at all comparable to the “flat and easily built-upon” property at issue. ¶10 STAB issued its findings of fact and conclusions of law on November 1, 2013. STAB concluded that while DOR’s appraisal is presumed to be correct, the Department 5 bears a burden to provide “documented evidence to support its assessed values.” STAB found that DOR’s explanation of its “comprehensive computer assisted data” that included 29 comparable sales was “more persuasive than the three comparable sales used by Mr. Kelley.” STAB found that the Perettis presented no evidence to support their contention that the location of the property had a negative effect on its value. STAB found that DOR’s evidence was “generally more persuasive” than the owners’ evidence as to value. STAB further found that Kelley’s reliance upon post-valuation date sales was not allowed by Montana law and that his assumptions that the existing buildings had no value were subjective assessments of what a future buyer might do. STAB concluded by finding that Kelley’s testimony was limited and subjective and was “less credible” than the evidence presented by DOR. ¶11 STAB found that Mr. Berry “completely misunderstood” the DOR computer model and that his criticisms were “not accurate.” STAB found that Berry “discarded sale and trending data points until he got the result he sought,” which was a lower value for the property. STAB found that Berry “misinterpreted” the reliability of the DOR system, and that his “critique of the DOR valuation model [was not] credible.” ¶12 STAB upheld the County Board’s determination of the value of the property. The Perettis petitioned for judicial review in November 2013. The parties completed briefing in July 2014, and the District Court entered its order reversing the STAB decision on July 1, 2015. The District Court disagreed with STAB’s weighing of the evidence and its determinations of witness credibility. The District Court determined that the methodology of the DOR “resulted in a severely skewed assessment” of the value of the 6 property, and that Mr. Lapan’s testimony was not credible or persuasive as to important issues. The District Court similarly determined that Mr. Williams’ testimony was not credible regarding important issues that he covered in his testimony. ¶13 The District Court concluded that STAB committed clear error by finding that DOR’s valuation of the property was more persuasive than Mr. Kelley’s valuation. The District Court evaluated and weighed the testimony from the STAB hearing and found that the County Board property value upheld by STAB was clearly erroneous. The District Court ordered STAB to accept the $960,000 valuation from Mr. Kelley’s testimony, and ordered DOR to return any taxes that the Perettis paid under protest. STANDARD OF REVIEW ¶14 This is an appeal from a decision of a district court conducting judicial review of a decision of the State Tax Appeal Board concerning a Department of Revenue appraisal of real property for property tax purposes. In such cases the appraisal reached by the Montana Department of Revenue is presumed to be correct, and the burden is upon the taxpayer to overcome this presumption, Farmers Union Central Exchange v. DOR, 272 Mont. 471, 476, 901 P.2d 561, 564 (1995). Courts should not act as an authority on tax matters because tax appeal boards “are particularly suited for settling disputes over the appropriate valuation of a given piece of property, and the judiciary cannot interfere with that function.” DOR v. Grouse Mtn. Development, 218 Mont. 353, 355, 707 P.2d 1113, 1115 (1985). ¶15 The role of a district court conducting judicial review of an administrative decision is limited to a review “confined to the record” of the agency, and the court does not act as 7 a trier of the facts. Section 2-4-704(1), MCA; Mercer v. McGee, 2008 MT 374, ¶ 22, 346 Mont. 484, 197 P.3d 961. A district court should review a STAB decision to determine whether the Board’s findings of fact are clearly erroneous and whether its conclusions of law are correct. A finding of fact is clearly erroneous if it is not supported by substantial evidence; if the trier of fact misapprehended the effect of the evidence; or if a review of the record leaves the court with the “definite and firm conviction” that a mistake has been made. We apply these same standards when reviewing the district court’s decision on appeal. Robinson v. DOR, 2012 MT 145, ¶ 10, 365 Mont. 336, 281 P.3d 218. A district court may not substitute its judgment for the judgment of STAB as to the weight of factual evidence, § 2-4-704(2), MCA; may not engage in a “wholesale substitution” of its opinion for the opinion of the agency, O’Neill v. DOR, 2002 MT 130, ¶¶ 22-23, 310 Mont. 148, 49 P.3d 43; and may not re-weigh the evidence on questions of fact, Benjamin v. Anderson, 2005 MT 123, ¶ 37, 327 Mont. 173, 112 P.3d 1039. “Assessment formulations” by STAB should be upheld unless there is a clear showing of an abuse of discretion. O’Neill, ¶ 23. DISCUSSION ¶16 Issue one: Did the District Court err in reversing the order of the State Tax Appeal Board concerning the valuation of the property at issue? ¶17 It is clear that the District Court’s decision rests upon a re-weighing of the evidence submitted at the STAB hearing, and a re-determination of the credibility of witnesses heard by STAB. While the District Court explains its decision in terms of whether the STAB decision was “clearly erroneous,” it is clear that there was substantial 8 evidence in the record to support STAB’s decision. Under Montana law, a district court sitting in judicial review of a STAB decision may not re-weigh the evidence or re-determine witness credibility to achieve a different result. Mercer, ¶¶ 21-22; Benjamin, ¶ 37. Montana law “does not contemplate a wholesale substitution of the District Court’s opinion for that of the agency.” O’Neill, ¶ 23; § 2-4-704, MCA. ¶18 Administrative findings of fact may not be disturbed on judicial review if they are supported by substantial evidence in the record. Substantial evidence is more than a mere scintilla of evidence but may be less than a preponderance of the evidence when viewed in a light most favorable to the respondent. Taylor v. State Fund, 275 Mont. 432, 440, 913 P.2d 1242, 1246 (1996); Benjamin, ¶ 12. Findings of fact can be based upon substantial evidence despite the fact that there was evidence that may have supported a different result. Benjamin, ¶ 55. ¶19 The STAB adequately described the evidence that it relied upon in reaching its decision as well as describing why it could not rely upon the evidence produced by the Perettis. STAB found that DOR’s appraisal was based upon a proven computer model that incorporated data on the verified sales of 29 other properties to reach the appraised valuation. The DOR appraisal, under established law, was presumed to be correct and the Perettis bore a substantial burden to disprove it. Farmers, 272 Mont. at 476, 901 P.2d at 564. Taxpayers have not demonstrated that STAB’s determination of witness credibility was clearly erroneous. The District Court decision to reverse the STAB decision is therefore reversed. 9 ¶20 As to Issues two and three, because we reverse the District Court and reinstate the STAB decision on the taxable valuation of the Peretti property, we also reverse the District Court’s award of costs to the Perettis and its direction that the DOR refund any taxes paid in protest. CONCLUSION ¶21 The District Court is reversed and its Order and Rationale is vacated. The STAB decision is reinstated. /S/ MIKE McGRATH We Concur: /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA /S/ JIM RICE

May 10, 2016

fe692a06-8a08-401f-80c0-8521ad6e1783

State v. Moog

2016 MT 82N

DA 14-0557

Montana

Montana Supreme Court

DA 14-0557 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 82N STATE OF MONTANA, Plaintiff and Appellee, v. REBECCA MOOG, Defendant and Appellant. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. DDC 2012-174 Honorable James P. Reynolds, Presiding Judge COUNSEL OF RECORD: For Appellant: Chad 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 Leo Gallagher, Lewis and Clark County Attorney, Luke M. Berger, Deputy County Attorney, Helena, Montana Submitted on Briefs: March 16, 2016 Decided: April 5, 2016 Filed: __________________________________________ Clerk April 5 2016 Case Number: DA 14-0557 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 This case pertains to the sentencing of Rebecca Ann Moog (“Moog”). Moog was stopped while driving under the influence in Helena in early June 2012. The State charged Moog with a felony DUI on June 19, 2012. Moog pleaded guilty to the charge on April 5, 2013, but after receiving new counsel, she filed a motion to withdraw the guilty plea. The District Court denied her motion on December 4, 2013. At her sentencing hearing on June 12, 2014, Moog was sentenced to the Montana Department of Corrections for 13 months with a recommendation that she be enrolled in the WATCh program. Upon successful completion of the program the remainder of her sentence would be suspended. Moog appeals her sentence based on ineffective assistance of counsel (“IAC”). We affirm. ¶3 We review IAC claims to assess whether counsel’s performance was deficient and whether the defendant was prejudiced by counsel’s deficient performance. Strickland v. Washington, 466 U.S. 668, 687, 104 S. Ct. 2052, 2064 (1984). In cases in which ineffective assistance claims are based on the record, they must be raised on direct appeal. State v. Earl, 2003 MT 158, ¶ 39, 316 Mont. 263, 71 P.3d 1201, 1208 (citing 3 State v. White, 2001 MT 149, ¶ 12, 306 Mont. 58, 30 P.3d 340). We review district court rulings on IAC claims for correctness, as they present mixed questions of law and fact. State v. Zink, 2014 MT 48, ¶ 9, 374 Mont. 102, 319 P.3d 596. ¶4 After pleading guilty to felony DUI, Moog was subject to the mandatory minimum sentence in § 61-8-731, MCA, which mandates a sentencing to the “department of corrections . . . [for] not less than 13 months.” On appeal, Moog suggests that her alcohol dependency issues arose out of social pressure from her network in Helena and mental illness. Moog had been convicted of three DUIs in Montana. In an effort to change, Moog moved to Vancouver, Washington. She returned to Helena in 2012 to attend her step-father’s funeral, which unsettled her. Moog consumed alcohol and drove her vehicle until she was stopped. Ultimately, Moog pleaded guilty to felony DUI. ¶5 Given the emotional duress Moog was under, she contends that she lost the opportunity to receive a more lenient sentence because her counsel did not argue the applicability of § 46-18-222, MCA, at sentencing. Section 46-18-222, MCA, states in relevant part that mandatory minimums otherwise prescribed in statutes do not apply in cases in which, at the time of the commission of the offense, the “offender’s mental capacity[] was significantly impaired” or “the offender . . . was acting under unusual and substantial duress.” ¶6 While counsel did not argue that § 46-18-222, MCA, should apply to felony DUI, she did argue for an alternative placement in Moog’s current hometown and based that argument upon statutory and constitutional grounds. She presented evidence that Moog was undergoing outpatient psychiatric care for bipolar disorder, that her alcohol 4 dependence is in remission, and disruption of the current treatment would cause her functioning to deteriorate. She also presented evidence that Moog was a single mother, gainfully employed, and could afford to pay for future treatment. ¶7 Moog must show that her attorney’s representation fell below an objective standard of reasonableness and that her counsel’s deficient performance prejudiced her. Strickland, 466 U.S. at 688-89, 104 S. Ct. 2064; Zink, ¶ 18. There is a strong presumption that counsel “rendered adequate assistance and made all significant decisions in the exercise of professional judgment.” Strickland, 466 U.S. at 690, 104 S. Ct. 2064; see also Whitlow v. State, 2008 MT 140, ¶ 31, 343 Mont. 90, 105, 183 P.3d 861, 871. ¶8 Moog argues on appeal that § 46-18-222, MCA, is applicable to felony DUI sentences and her counsel was therefore deficient in not advancing that argument at the sentencing hearing. However, § 46-18-222, MCA, was not clearly available in this case. This Court has not held that § 46-18-222, MCA, applies to felony DUIs. Further the felony DUI statute (§ 61-8-731(7), MCA) explicitly states which Title 46, MCA, sentencing provisions apply, and § 46-18-222, MCA, is not listed. Thus since neither current case law nor the Montana Code explicitly apply § 46-18-222, MCA, to felony DUIs we cannot concur that Moog’s counsel was unreasonable in believing that it was inapplicable in this case. ¶9 “[T]he Sixth Amendment guarantees reasonable competence, not perfect advocacy judged with the benefit of hindsight.” Yarborough v. Gentry, 540 U.S. 1, 8, 124 S. Ct. 1, 6 (2003); Whitlow, ¶ 14. Counsel’s decision to not focus her argument on the applicability 5 of § 46-18-222, MCA, is not sufficient to adjudicate her performance as deficient. Moog has not met the heavy burden required to establish that counsel was deficient in representing her at sentencing. As Moog does not satisfy the first element of our analysis for determining whether she received ineffective counsel, we do not reach the second part of the analysis. Zink, ¶ 18. ¶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, this case presents a question controlled by settled law or by the clear application of applicable standards of review. ¶11 Affirmed. /S/ MIKE McGRATH We Concur: /S/ JAMES JEREMIAH SHEA /S/ PATRICIA COTTER /S/ BETH BAKER /S/ MICHAEL E WHEAT

April 5, 2016

53fbe7a1-73df-485f-8c87-378fd7ce4559

COURTS OF LIMITED JURISDICTION - Ru

N/A

AF 12-0374

Montana

Montana Supreme Court

IN THE SUPREME COURT OF THE STATE OF MONTAFIL ED AF 12-0374 IN THE MATTER OF MODIFYING THE RULES FOR COURTS OF LIMITED JURISDICTION TRAINING AND CERTIFICATION OF JUDGES MAY 0 3 2016 EiSmith CLERK OF THE SUPREME COURT STATE OF MONTANA ORDER The Commission on Courts of Limited Jurisdiction has petitioned the Court for modification of Rule 4 of the Rules for Courts of Limited Jurisdiction, addressing the accessibility of recorded judicial training sessions. The Commission unanimously approved this revision at its meeting of March 18, 2016. The revision would modify Rule 4 by adoption of a new subsection (3) and reorder the subsequent subsections of the Rule accordingly. New Rule 4(3) will read as follows: (3) Post training, individuals may request copies of recorded training sessions. However, in order to request dissemination of electronic transcription of training sessions, the requester must be eligible to attend training sessions as set out in subsection (2) above. Additionally, the requester must supply the Judicial Education Coordinator with the appropriate technology as requested; pay any associated shipping/handling costs; and request recorded copies from only the most recent COCLJ training conference and/or the most recent certification school. Good cause appearing, IT IS HEREBY ORDERED that Rule 4 of the Rules for Courts of Limited Jurisdiction is revised as set forth herein. The revision is effective immediately. The Clerk is directed to provide a copy hereof to the Commission on Courts of Limited Jurisdiction. The Clerk is further directed to provide copies of this Order to the State Law Library; to Todd Everts, Connie Dixon and Derek Gallagher at Montana Legislative Services Division; to Helene Haapala and Colena Webb at Thomson Reuters; May 3 2016 Case Number: AF 12-0374 to Robert Roy and Patti Glueckert at LexisNexis; and to the State Bar of Montana, with the request that the State Bar provide notice of the new rule on its website and in the Montana Lawyer. SSA) , DATED this day of May, 2016. Chief Justice Justices 2

May 3, 2016

e64d23aa-c7d9-459d-ba36-1fad9ef73236

Employers Mut. Cas. Co. v. Slack

2016 MT 91

DA 15-0429

Montana

Montana Supreme Court

DA 15-0429 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 91 EMPLOYERS MUTUAL CASUALTY COMPANY, Plaintiff and Appellee, FISHER BUILDERS, INC.; JEFFREY S. FISHER; ASHLI SLAWTER, d/b/a A. SLAWTER ARCHITECTURE; and LAKE COUNTY, a political subdivision of the State of Montana, and DOES 1-3, Defendants, JERRY L. SLACK and KAREN SLACK, Defendants and Appellants. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV 11-1519(D) Honorable David M. Ortley, Presiding Judge COUNSEL OF RECORD: For Appellants: Bruce A. Fredrickson, Rocky Mountain Law Partners, PLLP; Kalispell, Montana J. Devlan Geddes, Paul S. Burdett, Goetz, Baldwin & Geddes, P.C.; Bozeman, Montana For Appellee: David C. Berkoff, Berkoff Law Firm, P.C.; Missoula, Montana Submitted on Briefs: March 2, 2016 Decided: April 19, 2016 Filed: __________________________________________ Clerk April 19 2016 Case Number: DA 15-0429 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 Jerry and Karen Slack (Slacks) appeal from an order entered in this declaratory action by the Eleventh Judicial District Court, Flathead County, granting summary judgment to Employers Mutual Casualty Company (EMC) and concluding that EMC had no duty to defend the insured because no coverage existed under the subject policy. We reverse and remand for further proceedings. ¶2 We address the following two restated issues: 1. Did the District Court err by concluding that the alleged acts and subsequent consequences did not constitute an “occurrence” covered by the policy? 2. Did the District Court err by granting summary judgment in favor of EMC? PROCEDURAL AND FACTUAL BACKGROUND ¶3 The asserted facts in the underlying tort action that gave rise to the insurance coverage dispute herein are as follows: Since 1969, the Slacks have owned land on Flathead Lake, in Lake County, on which sat a vacation home of some age. In 2007, the Slacks hired contractor Jeffrey Fisher and his company, Fisher Builders, (Fisher) to build “a remodeled home located on the site of the small home” to serve as a year-round residence. Because the Slacks’ vacation home predated the adoption of Lake County’s zoning regulations, the proposed construction modifications were deemed by the County to be “grandfathered” in as a pre-regulation structure and, thus, an acceptable non-conforming property use. However, in order to maintain that status, the remodeled 3 home had to incorporate the existing structure.1 Approval of the Slacks’ permit was also conditioned on the requirement that “[t]he existing deck shall remain unchanged as a result of the proposed project.” ¶4 Fisher elevated the existing home structure on steel I-beams to pour a new foundation. With the existing structure resting on the beams, Fisher began to dismantle the walls of the vacation home and, in so doing, discovered an infestation of carpenter ants. He cut out the ant-infested planks, apparently intending to salvage what usable materials he could from the remaining structure. He subsequently burned the ant-infested boards.2 At some point during this work, the deck collapsed. ¶5 A member of the Lake County Planning Department conducted a site visit and issued a cease and desist order, halting all work on the project. The Planning Department revoked the Slacks’ construction permit, citing multiple violations of the Lakeshore Protection Regulations and noting that the “existing structure on the site had been destroyed.” The Slacks appealed the revocation of their construction permit to the District Court, eventually reaching a settlement with Lake County that allowed them to construct a home, albeit a smaller one than had previously been approved. 1 The record before us is unclear about what exactly this requirement entailed. We address this matter more specifically in the below discussion of the District Court’s granting of EMC’s motion for summary judgment. 2 To underscore its position that Fisher’s acts were intentional, EMC stresses the misdemeanor criminal charges brought against Fisher and his guilty plea to violations of the Lake County zoning regulations and Lakeshore Protection laws. However, we do not consider these subsequent proceedings to be dispositive under the proper inquiry, as set forth herein. 4 ¶6 The Slacks then initiated a negligence action against Fisher and his construction company, Fisher Builders (the underlying action). EMC had issued a commercial general liability insurance policy to Fisher. The policy provided: 1. Insuring Agreement a. We [EMC] will pay those sums that the insured [Fisher] becomes legally obligated to pay as damages because of “bodily injury” or “property damage” to which this insurance applies. . . . However, we will have no duty to defend the insured against any “suit” seeking damages for “bodily injury” or “property damage” to which this insurance does not apply. . . . b. This insurance applies to “bodily injury” and “property damage” only if: (1) The “bodily injury” or “property damage” is caused by an “occurrence” . . . . . . . 2. Exclusions This insurance does not apply to: a. Expected or Intended Injury “Bodily injury” or “property damage” expected or intended from the standpoint of the Insured. . . . SECTION V – DEFINITIONS . . . 13. “Occurrence” means an accident, including continuous or repeated exposure to substantially the same general harmful conditions. ¶7 Fisher gave notice of the lawsuit to EMC, who provided a defense in the underlying action under a reservation of rights while filing a declaratory action (the present case), alleging there was no coverage and it had no duty to defend or indemnify 5 any party in the underlying action. EMC and the Slacks both moved for summary judgment, with Fisher joining the Slacks’ motion. Fisher and Fisher Builders ultimately settled with the Slacks, consenting to entry of judgment in favor of the Slacks and assigning their rights under the EMC insurance policy to the Slacks. The District Court granted EMC’s motion for summary judgment, concluding that Fisher’s conduct was clearly intentional and did not fit within the meaning of “occurrence” under the policy, “regardless of whether Fisher intended the consequences or not.” ¶8 Slacks appeal. STANDARD OF REVIEW ¶9 “The interpretation of an insurance policy presents a question of law, and we will review the District Court’s legal conclusion for correctness.” Landa v. Assurance Co., 2013 MT 217, ¶ 13, 371 Mont. 202, 307 P.3d 284 (citation omitted). ¶10 “The standard of review in appeals from summary judgment rulings is de novo.” Blair v. Mid-Continent Cas. Co., 2007 MT 208, ¶ 14, 339 Mont. 8, 167 P.3d 888 (citing Williams v. Union Fid. Life Ins. Co., 2005 MT 273, ¶ 18, 329 Mont. 158, 123 P.3d 213). “We apply the same M. R. Civ. P. 56 criteria as the district court, and summary judgment may be granted only ‘when the pleadings, depositions, answers to interrogatories, affidavits, and admissions on file show no genuine issues of material fact exist and when the moving party is entitled to judgment as a matter of law.’” Landa, ¶ 13 (quoting Fasch v. M.K. Weeden Constr., Inc., 2011 MT 258, ¶ 14, 362 Mont. 256, 262 P.3d 1117). 6 DISCUSSION ¶11 1. Did the District Court err by concluding that the alleged acts and subsequent consequences did not constitute an “occurrence” covered by the policy? ¶12 The Slacks contend that the District Court erred by holding that, in the context of general liability insurance, the term “occurrence,” defined by the policy as “an accident,” categorically precludes coverage for any intentional conduct on the part of the insured. They argue the District Court erred by concluding that unintended consequences resulting from Fisher’s acts did not satisfy the definition of “occurrence.” EMC responds that this Court “has clearly, unambiguously, and consistently stated that in the context of [commercial general liability] insurance coverage where an insurer’s policy defines ‘occurrence’ as an accident, damages stemming from the insured’s intentional acts do not constitute accidental ‘occurrences’ – even if the resulting consequences and related damages are unintended.” ¶13 Slacks cite extensively to Northwestern Nat’l Cas. Co. v. Phalen, 182 Mont. 448, 597 P.2d 720 (1979). There, Phalen, the insured, punched another man outside of a bar. Phalen’s victim ran away after Phalen’s punch, and Phalen gave chase. Before Phalen caught him, a third party tripped the victim. Phalen, 182 Mont. at 451, 597 P.2d at 722. The victim fell off the curb and hit the pavement, sustaining serious injuries. Phalen, 182 Mont. at 452, 597 P.2d at 722. After the victim brought suit against Phalen and the intervening third party who tripped him, Phalen’s insurer claimed the incident did not constitute an “occurrence” under the policy and was not covered. Phalen, 182 Mont. at 454, 597 P.2d at 723. The policy excluded from coverage “bodily injury or property 7 damage, which is either expected or intended from the standpoint of the insured,” as does the policy here. Phalen, 182 Mont. at 455, 597 P.2d at 724 (emphasis in original). The district court entered summary judgment in favor of the insurer, concluding there was no coverage. Phalen, 182 Mont. at 454, 597 P.2d at 724. This Court reversed, stating, “[W]e would interpret the clause to mean that it precludes coverage for bodily injuries or damages, though not specifically intended by the insured, if the resulting harm was within the expectation or intention of the insured from his standpoint.” Phalen, 182 Mont. at 459, 597 P.2d at 726 (emphasis added). We also determined that summary judgment was improper because a question of material fact remained regarding Phalen’s intention and expectation as to his victim’s injuries. Phalen, 182 Mont. at 460, 597 P.2d at 727. ¶14 We considered a similar coverage question in Miller Mut. Ins. Co. v. Strainer, 204 Mont. 162, 663 P.2d 338 (1983). Strainer worked at the ASARCO smelter in East Helena, and played a practical joke on a coworker by removing a filter from the coworker’s respirator and “squirt[ing] a puff of smoke into the respirator’s air chamber.” Strainer, 204 Mont. at 164, 663 P.2d at 339. While Strainer claimed he “did not know the smoke would cause any injury other than momentary discomfort[,]” the coworker “inhaled the smoke and allegedly was seriously injured.” Strainer, 204 Mont. at 164, 663 P.2d at 339. The coworker brought suit against Strainer, whose insurer brought an action to declare there was no coverage under the policy, which excluded coverage for “bodily injury or property damage which is either expected or intended from the standpoint of the insured,” because Strainer had acted intentionally. Strainer, 204 Mont. at 166, 663 P.2d 8 at 340. We disagreed with the insurer, citing to Phalen for the principle that “intentional acts are not excluded under an insurance policy unless the intentional act results in injuries which would be expected or intended. A person may act intentionally without intending or expecting the consequences of that act.” Strainer, 204 Mont. at 167, 663 P.2d at 341 (emphasis added). ¶15 Phalen and Strainer both involved clearly intentional acts, yet in both cases we determined that the acts may nonetheless have constituted an “occurrence”3 under the policies at issue because the subsequent consequences may not have been intended or expected by the actor. Our analysis, simply framed, was to consider 1) whether the act itself was intentional, and 2) if so, whether the consequence or resulting harm stemming from the act was intended or expected from the actor’s standpoint. See Phalen, 182 Mont. at 457, 597 P.2d at 725. ¶16 EMC relies heavily on Blair, calling it “the seminal case on this very issue.” Blair owned eight acres of land in a residential subdivision. He excavated a gravel pit on his property and the subdivision’s landowners association brought suit against him, seeking an injunction and restoration of the property. Blair, ¶¶ 4-5. Blair tendered defense of the action to his insurance company, asserting that, despite his intentional act to excavate gravel, “he did not intend to cause harm to neighboring property owners,” and thus his actions qualified as an “occurrence” under the policy. Blair, ¶ 17. In the declaratory judgment action, the district court granted summary judgment to Blair’s insurer, 3 In the policy at issue in Phalen, “occurrence” was further defined as an “accident.” Phalen, 182 Mont. at 455, 597 P.2d at 724. The Strainer policy’s definition of “occurrence” was not provided by the opinion. 9 concluding that “Blair’s admitted intentional gravel operation did not constitute an occurrence . . . .” Blair, ¶ 12. This Court affirmed, reasoning that because “Blair deliberately moved gravel on his property, which caused the alleged damages[,]” his actions were “no accident.” Blair, ¶ 19. In retrospect, while we reached the correct result in Blair, the analysis we employed in that case was incomplete. ¶17 In Blair, we distinguished the Phalen line of authority on the ground that the policy at issue did not contain language requiring consideration of whether the damage was “expected or intended from the standpoint of the insured.” Blair, ¶ 20.4 Therefore, we cited a similar definition of “accident” as a happening “that occurs without intention or design on the part of the insured.” Blair, ¶ 19 (citing Safeco Ins. Co. of Am. v. Liss, 2000 MT 380, ¶ 36, 303 Mont. 519, 16 P.3d 399). Yet, we failed to fully analyze under this definition whether the damages allegedly caused by Blair were intended or designed, and simply acceded to Blair’s subjective assertion that “he did not intend to cause harm” to his neighbors by locating a gravel pit next to them. Blair, ¶ 17. We thus decided the case on the sheer force of a declaration that “[u]nequivocally, this was no accident.” Blair, ¶ 19. ¶18 Instead of distinguishing the Phalen line of authority, we should have applied it by holding that Blair’s subjective assertion that “he did not intend” to cause the resulting 4 EMC offers material outside of that portion of the record that was before us in Blair to demonstrate that the policy in Blair indeed contained the same “expected or intended” exclusion that we stated did not exist, and upon which we distinguished the Phalen line of authority. Of course, we cannot consider that material now, but even if that assertion were true, such exclusion would have likewise provided the proper basis for determining that no coverage existed in Blair, based on the reasoning set forth herein. 10 harm to his neighbors was not dispositive, and that, pursuant to the second prong of our construct, Blair’s act of siting a gravel pit in a residential neighborhood had the objective intention or design of impacting the adjacent residential properties. Blair, ¶ 17. By so doing, we would have reached the same denial of coverage but decided the case consistently with the principles of our previous cases: an “accident” may include intentional acts, but coverage is excluded when the consequences of those acts are objectively intended or expected from the standpoint of the insured, as the consequences in Blair surely were. Phalen, 182 Mont. at 459, 597 P.2d at 726; Strainer, 204 Mont. at 167, 663 P.2d at 341. Likewise, we could have employed this analysis in Landa, where we held there was no coverage under the same policy definition of “occurrence” for tort claims that were “wholly comprised of [the insured’s] intentional acts” of deceptive statements and misrepresentation. Landa, ¶ 24. Instead of relying on Blair’s focus on whether the act was truly intentional, we would have reached the same denial of coverage under the second prong of our construct by holding that the insured’s deceitful statements about his business had the objective intention or design of misleading or defrauding the prospective buyer of the business. ¶19 As noted above, the second prong of the analysis (whether the insured intended or expected the injury stemming from an intentional act) is an objective inquiry. In Blair, Strainer, and many other cases, the insured made the subjective claim that he did not intend the harm that ensued from his intentional act. It would be a rare case indeed, as reflected in the absence of such cases in our precedent, where an insured would acknowledge that he intended to injure or cause harm to others. However, courts are well 11 equipped to determine objectively what injuries could reasonably be expected to result from an intentional act. See N. H. Ins. Group v. Strecker, 244 Mont. 478, 798 P.2d 130 (1990) (father who molested his minor daughter for over 10 years could expect the personal injuries that followed, including medical treatment and emotional distress, regardless of his protestations to the contrary); Am. States Ins. Co. v. Willoughby, 254 Mont. 218, 836 P.2d 37 (1992) (spectator who punched, kicked, and bit security guards could expect physical injuries that resulted from assault; “[t]hese types of action are per se intentional and the intent to seriously injure is evident from the commission and type or nature of the act itself.”); Smith v. State Farm Ins. Cos., 264 Mont. 129, 870 P.2d 74 (1992) (homeowner who punched teenager in the face could expect physical injuries that followed, including knocking out a tooth); Landa (business owner who made intentional misrepresentations to a prospective buyer could expect injuries from reliance on those misrepresentations). ¶20 The District Court erred by reasoning that “the Montana Supreme Court has rejected” the Slacks’ argument that the term accident may “include intentional conduct with unintended results.” In fairness to the District Court, this Court has not been consistent in the analysis to be applied when considering this coverage issue. Nonetheless, holding otherwise could broadly eliminate coverage for many damage events that began with an initial act of intention but led to unexpected results. As we said many years ago, pointed out by the Slacks: “Strange and wonderful indeed are the circumstances in which persons are killed or injured by the intentional pulling of the trigger of an ‘unloaded’ gun, and it is clear that in such situations the discharge itself and 12 the resulting injuries are accidental.” Terry v. Nat’l Farmers Union Life Ins. Co., 138 Mont. 333, 339, 356 P.2d 975, 978 (1960) (citation omitted). With the clarification provided herein that the policy language defining “accidents” may include intentional acts if the damages were not objectively intended or expected by the insured, our inconsistent statements have been harmonized and the proper standard can be applied on remand. ¶21 2. Did the District Court err when it granted summary judgment in favor of EMC? ¶22 Slacks argue that the District Court erred by resolving issues of material fact when granting EMC’s motion for summary judgment, and by resolving disputed facts in favor of EMC. Specifically, the Slacks claim that the District Court determined that Fisher left parts of the home and/or deck unsupported, causing the deck to collapse, that Fisher “destroyed” the original structure by dismantling the walls, and that Fisher failed to retain a sufficient portion of the original structure in order to maintain the non-conforming use status. ¶23 EMC argues that the Slacks’ claim of error is without merit because “[t]he district court’s findings are based upon the substantial evidence and are not clearly erroneous.” However, we review a trial court’s grant of summary judgment de novo, applying the exact same standards that the district court applied. Landa, ¶ 13. At the summary judgment stage, “‘the court does not make findings of fact, weigh the evidence, choose one disputed fact over another, or assess the credibility of the witnesses.’” Johnston v. 13 Centennial Log Homes & Furnishings, Inc., 2013 MT 179, ¶ 24, 370 Mont. 529, 305 P.3d 781 (emphasis added) (citation omitted). ¶24 The Slacks offer that “[t]he record establishes that Fisher did not intentionally tear down the entire home. He took apart some of the walls . . . .” Fisher testified that he and his crew “pulled the tarpaper loose from the house,” and “started taking those boards loose” in order to move a wall “a foot closer to the lake than the original house,” as contemplated by the building plan. Fisher testified that, after removing the boards, he and his crew discovered an infestation of carpenter ants and they sawed away the ant-infested boards. “So we cut all the ones that were heavily laden[] with carpenter ants into two-foot sections.” Fisher further testified that “the deck fell down because it wouldn’t support itself.” EMC asserts that “Fisher unilaterally and purposely tore down the Slacks’ entire home . . . ,” and that he admitted as much. However, in support of this statement, EMC cites to pages of Fisher’s deposition that are not included with the record before this Court (only excerpts were provided). We cannot determine with certainty from the record provided whether the District Court’s statement that Fisher “destroy[ed] the original structure . . . ” is supported by uncontested facts, but it appears doubtful. ¶25 The Slacks also contend the District Court erred by determining that Fisher’s actions violated the construction permit. They point to Fisher’s testimony about his meeting with the Lake County Planning Department Planner, where Fisher stated: “We had the meeting with Sue Shannon when she gave us the permit. After the meeting I said . . . ‘How much of this old house would you like me to use in here’ . . . . She said, ‘I would like you to use 50 percent.’” They cite Fisher’s testimony expressing his 14 understanding that the non-conforming use permit allowed him to dismantle the original structure and then reuse/reassemble the materials in the remodeled home. “And did we have a non-conforming structure? [The Lake County Planner] always said we needed to have a non-conforming structure in place. He didn’t say it had to be the old non- conforming structure, he said we had to have a non-conforming structure.” “[T]here is no possible way you can move a wall in two feet without taking it apart and reassembling it.” In response, EMC again cites to portions of Fisher’s testimony not provided to the Court by stating that “[Fisher] admitted at his deposition purposely tearing down the entire house even after being informed by Lake County that the original structure was required to be in place at all times.” ¶26 Given this testimony from the record as provided, we conclude that issues of material fact precluded summary judgment, and that further proceedings will be necessary to resolve factual issues related to application of the coverage provisions of the policy. ¶27 Reversed and remanded for further proceedings consistent herewith. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER

April 19, 2016

f599bcc6-f40e-425d-983b-c3003ecb5fb2

Eldorado Coop Canal Co. v. Teton Coop Reservoir Co

2016 MT 94

DA 15-0034

Montana

Montana Supreme Court

DA 15-0034 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 94 ELDORADO COOP CANAL COMPANY, Claimant and Appellant, LOWER TETON JOINT OBJECTORS; Objectors and Cross-Appellants, FARMERS COOPERATIVE CANAL CO.; ELDORADO COOP CANAL COMPANY, Objectors, TETON COOP RESERVOIR CO.; NOIA and Appellee/Cross-Appellant, PATRICK SAYLOR, Intervenor and Appellee. APPEAL FROM: Montana Water Court, Cause No. 41O-129B, Honorable Russ McElyea, Presiding Judge COUNSEL OF RECORD: For Appellant: John E. Bloomquist, Bloomquist Law Firm, PC, Helena, Montana For Appellee Teton Coop Reservoir Co.: Holly Jo Franz, Ada C. Montague, Franz & Driscoll, PLLP, Helena, Montana April 26 2016 Case Number: DA 15-0034 2 For Appellees Lower Teton Joint Objectors: Stephen R. Brown, Garlington, Lohn & Robinson, PLLP, Missoula, Montana Submitted on Briefs: November 12, 2015 Decided: April 26, 2016 Filed: __________________________________________ Clerk 3 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Eldorado Coop Canal Company (Eldorado), a group known as the Lower Teton Joint Objectors (LTJO), and Teton Coop Reservoir Co. (TCRC) all appeal from the Montana Water Court’s Order Amending and Adopting Master’s Report in Water Court Case 41O-129B. We affirm. ISSUES ¶2 We restate and review the parties’ following issues: 1. Did the Water Court correctly conclude that the cumulative volume of water Eldorado may divert from the Teton River for the Eldorado, Truchot, Dennis, and Beattie Rights is limited to no more than 15,000 acre-feet per year? 2. Did the Water Court err when it chose not to assign separate volume limits for each of Eldorado’s four sets of combined irrigation and stockwater rights for the Eldorado, Truchot, Dennis, and Beattie Rights? 3. Did the Water Court err when it limited the flow rate of the Truchot Right to 300 miner’s inches instead of 225 miner’s inches? FACTUAL AND PROCEDURAL BACKGROUND ¶3 The present case is the second segment of Water Court Case 41O-129. The previously litigated portion stemmed from Eldorado’s claimed use of the Bateman Ditch, which also involved a question certified by the District Court to the Water Court pursuant to § 85-2-406(2)(b), MCA.1 Following our decision in Giese the Water Court bifurcated the case into 41O-129A and 41O-129B. Case 41O-129A was limited to the issues 1 It is unnecessary to recount the somewhat complex procedural aspects of Giese v. Blixrud, 2012 MT 170, 365 Mont. 548, 285 P.3d 458 and the underlying Water Court Case 41O-129. It suffices to state that Case 41O-129A related solely to the Bateman Ditch, and LTJO utilized avenues available to it through both the District Court and the Water Court to determine the extent of the rights involved. 4 involving the use of the Bateman Ditch. We reviewed those issues in Eldorado Co-Op Canal Co. v. Lower Teton Joint Objectors, 2014 MT 272, 376 Mont. 420, 337 P.3d 74. Presently, we review the parties’ appeals of the Water Court’s determination of the remaining aspects of the case, styled as Case 41O-129B. ¶4 The Teton River’s headwaters are northwest of the town of Choteau, located in west-central Montana along the Rocky Mountain Front. After leaving the mountains, the river travels east, making southeast and northeast turns, before joining the Marias River around one hundred and fifty miles later. The Teton River does not have an onstream reservoir capable of stabilizing late season flows. The sources of early season high flows and late season low flows are spring runoff and the continued melting snowpack. It is common for stretches of the river to be completely dry by late summer. The Teton River is located in the Teton River Basin, 41O, which has not yet received final adjudication and is currently controlled by a Temporary Preliminary Decree. ¶5 Eldorado is one of four companies that divert water from the Teton River. It is historically considered to be the most senior of the four companies. Eldorado claims water rights based upon the rights decreed in Perry v. Beattie, Cause No. 371, Montana Eleventh Judicial District Court, Teton County, March 28, 1908.2 Under the Perry decree the District Court established the priority dates and flow rates for approximately 40 water rights. Of these decreed water rights Eldorado owns four. They are referred to as the Eldorado, Truchot, Dennis, and Beattie Rights, which are based on their ownership at the time of the decree. Initially, Eldorado owned the Eldorado Right, and over time it 2 Teton County is now part of the Ninth Judicial District. 5 acquired these other three named rights. Under the purview of the District Court, a Water Commissioner has historically delivered water to the applicable water users in line with their rights as established in the Perry decree. ¶6 As required by the Montana Water Use Act (WUA), codified at Title 85, MCA, Eldorado filed a Statement of Claim for its four decreed rights—for its irrigation rights and for its stockwater rights—on an Irrigation District Claim Form. During the examination of Basin 41O the Montana Department of Natural Resources and Conservation (DNRC) assigned individual claims to each of Eldorado’s four Perry rights. Eldorado was assigned a total of eight claims: four irrigation claims and four stockwater claims. Thus, each of the four named rights (Eldorado, Truchot, Dennis, and Beattie) contains an irrigation and a stockwater component. ¶7 Objectors LTJO and TCRC, along with others, filed objections to Eldorado’s claims. Some of the objectors were able to come to an agreement with Eldorado during the settlement process. LTJO and TCRC were not. In June 2012, the parties participated in a four-day trial in front of a Water Master. In August 2013, the Water Master issued a Master’s report related to Eldorado’s water claims based on the four named rights. All parties filed objections to the Master’s report. In November 2014, the Water Court responded to the parties’ objections and issued an order amending and adopting the Master’s report. Issues One and Two of this appeal pertain to volume, the facts of which are discussed in this section. Issue Three pertains to flow rate, the facts of which are discussed exclusively in the discussion of Issue Three. 6 A. Master’s report ¶8 The Water Master issued a report with his findings of fact and conclusions of law regarding each of Eldorado’s claimed water rights. Pertinent to the issues on appeal, the Master determined the four named rights should be limited to the following total volume quantifications: 1) Eldorado Right limited to 9,000 acre-feet per year; 2) Truchot Right limited to 450 acre-feet per year; 3) Dennis Right limited to 300 acre-feet per year; and 4) Beattie Right limited to 600 acre-feet per year—totaling 10,350 acre-feet per year. The Master based these findings in part on witness testimony in an effort to determine the historic volume used for each right. ¶9 The Master stated in the report that Eldorado’s volume has continued to increase, most notably after 1980, due to Eldorado’s expansion of its irrigated acres and period of use. The Master stated the historic volume should be determined as of the date of a right’s perfection, which he determined to be 1908 for the Eldorado Right based on the completion of Eldorado’s original intent to develop a ditch system. The Master outlined three possible methods to determine the volume: 1) based on actual diversion at the time of perfection; 2) based on the acres historically irrigated at the time of perfection plus a volume-per-acre standard; and 3) based on the decreed flow rate, the number of acres the flow rate could reasonably irrigate, and a volume-per-acre standard. ¶10 The Master found problems with the evidence related to the first two methods. Specifically, the Master stated there was insufficient evidence to determine volume based on actual diversion, and the evidence related to the acreage historically irrigated at the 7 time of perfection was not credible. Instead, he found the third method, based on the decreed flow rate, was the better method of determining volume for the right. ¶11 For the third method of making a volume determination the decreed flow rate is the only precisely known fact. To determine the remaining two elements, number of acres the flow rate could reasonably irrigate, or duty of water, and the volume-per-acre standard, the Master analyzed the testimonial and documentary evidence to reach those determinations. The Master found the duty of water to be 0.5 miner’s inch per acre based on the proposed findings of fact Eldorado submitted during the Perry litigation. With a 0.5 inch-per-acre standard and Eldorado’s decreed flow rate of 3,000 miner’s inches, the Master concluded 6,000 acres should be used to determine the volume for the Eldorado Right. ¶12 The final aspect, the volume-per-acre standard, the Master evaluated: the volume as claimed by Eldorado on its Statement of Claim; testimony from District Court Judge R.D. McPhillips, who marshaled the decreed right; the Water Commissioner’s records; testimony from Eldorado’s expert witness John Westenberg; and testimony from LTJO’s expert witness Jay Johnson.3 Judge McPhillips testified to using a one acre-foot-per-acre-per-year standard when marshaling Eldorado’s rights, but admitted he did not know if it was or was not the appropriate standard to use. He stated that figure was given to him by an employee of either the county’s Agricultural Stabilization 3 Interestingly, Johnson is a former DNRC water resource specialist who reviewed and analyzed Eldorado’s four rights during his tenure with the DNRC. Johnson later left the DNRC to consult privately, and through his consultant work re-analyzed Eldorado’s claims and opined on behalf of LTJO. 8 Conservation Service4 or the county’s DNRC Soil and Water Conservation District office. ¶13 Ultimately, the Master found the most credible evidence was a standard offered by LTJO’s expert witness. Johnson testified that for three of Eldorado’s rights (Truchot, Dennis, and Beattie) a 1.5 acre-feet-per-acre-per-year standard should apply.5 He was unable to identify the source of the standard except to state it was a figure from the DNRC. The Master found “while [Johnson] did not reference the source for the standard in DNRC documents, his expertise places him in the position to know the standards the DNRC is using. His expertise also gives him the ability to determine if that standard is reasonable. . . . Johnson’s testimony and the exhibits used . . . [are] the most compelling evidence of an appropriate [standard].” ¶14 The Master applied Johnson’s standard to the Eldorado Right at 6,000 irrigable acres. The Master used the same standard given by Johnson for the three remaining rights, and applied it to the acreage of each right’s historic place of use, which he determined based on Johnson’s analysis of the original property owners’ legal descriptions. B. Water Court’s order ¶15 The Water Court determined the Master erred with his volume quantifications of the four named rights. The court determined the Master committed legal error by not first 4 In his testimony Judge McPhillips used the former name for a state office of the United States Department of Agriculture Farm Service Agency. 5 Johnson’s testimony was limited to three of the four named rights. He did not testify regarding the Eldorado Right. 9 determining whether the objectors met their burden of proof to refute Eldorado’s claims. The court then found the Master’s volume determinations were not based on substantial evidence because the Master utilized an incorrect water volume standard that was used by a witness. The court held it was also legal error to use the incorrect water volume standard to determine Eldorado’s rights’ volume quantifications. The court “decline[d] to adopt the Master’s findings regarding volume for [Eldorado’s claims]” and stated the volume for the claims “should be decreed as claimed in [Eldorado’s] statement of claim, with a remark that states ‘the combined annual volume for [the] claims . . . may not exceed 15,000 acre feet’” per year. The 15,000 acre-feet-per-year figure was the combined amount claimed on Eldorado’s initial Statement of Claim for all four named rights. Appellant argues the Water Court correctly reversed the Master’s volume determination, but erred by setting the volume quantification at 15,000 acre-feet per year. LTJO cross-appeals the issue but argues the Master’s findings are not clearly erroneous, are supported by substantial evidence, and thus the Water Court should be reversed and the Master’s volume findings reinstated. STANDARDS OF REVIEW ¶16 A water case that involves both a Water Master and the Water Court implicates a double layer of review. Heavirland v. State, 2013 MT 313, ¶ 13, 372 Mont. 300, 311 P.3d 813. Initially, the Water Court is required to review the factual findings made by a Water Master under the clearly erroneous standard. Conclusions of law made by a Water Master are reviewed by the Water Court for legal correctness. Heavirland, ¶¶ 13-14. This Court reviews the Water Court’s order to determine whether it correctly applied 10 those standards. Whether the appropriate standards were applied is a question of law, which we review de novo. Heavirland, ¶ 15. ¶17 If we determine the Water Court properly rejected a factual finding made by a Water Master, we review the substitute and any additional findings for clear error. Skelton Ranch, Inc. v. Pondera Cnty. Canal & Reservoir Co., 2014 MT 167, ¶ 26, 375 Mont. 327, 328 P.3d 644 (citations omitted). Clear error can be found by one of three ways. A factual finding may be clearly erroneous if it is not supported by substantial evidence. Even if supported by substantial evidence, the finding may be clearly erroneous if the trier of fact misapprehended the effect of the evidence. Even if supported by substantial evidence and the effect of the evidence is not misapprehended, a finding may be clearly erroneous if, in light of the evidence as a whole, the reviewing court is left with a definite and firm conviction that a mistake has been made. Marks v. 71 Ranch, LP, 2014 MT 250, ¶ 12, 376 Mont. 340, 334 P.3d 373. ¶18 Substantial evidence is evidence that a “reasonable mind might accept as adequate to support a conclusion, even if the evidence is weak or conflicting.” Skelton Ranch, Inc., ¶ 27 (citations omitted). To find substantial evidence there must be more than a scintilla of evidence but a preponderance of the evidence is not required. This standard is deferential, and not synonymous with the clear error standard. A reviewing court may still find a factual finding is clearly erroneous even though there is evidence to support it. Skelton Ranch, Inc., ¶ 27. 11 DISCUSSION ¶19 1. Did the Water Court correctly conclude that the cumulative volume of water Eldorado may divert from the Teton River for the Eldorado, Truchot, Dennis, and Beattie Rights is limited to no more than 15,000 acre-feet per year? ¶20 Under the WUA, enacted in 1973 for the purpose of adjudicating and determining the extent of water rights in the state, the Water Court is bound to enter a description of a water right with the attributes listed in § 85-2-234, MCA, into the final decree for a given basin. Sections 85-2-101, -234, MCA. Of the attributes listed in § 85-2-234, MCA, the amount of water included in the right is required, and volume is permitted, but not required, for certain rights. Section 85-2-234(6)(b), MCA. Under the WUA, a water right may receive a volume determination in the adjudication process if “a water judge determines [the right] require[s] both volume and flow rate to adequately administer the right.” Section 85-2-234(6)(b)(iii), MCA. ¶21 In Worden v. Alexander, 108 Mont. 208, 90 P.2d 160 (1939) we recognized “what quantum of water is reasonably required for irrigation is necessarily. . . complicated . . . depending, as it does, upon many different conditions.” Worden, 108 Mont. at 213, 90 P.2d at 162 (quoting Joerger v. Pacific Gas & Elec. Co., 276 P. 1017, 1030 (Cal. 1929)). Such conditions include: the soil composition; the climactic conditions; the irrigated acreage; the location, quality, and altitude of the land; the types of crops irrigated; the length of the irrigation season; and any other condition specific to the unique case. Worden, 108 Mont. at 213, 90 P.2d at 162. These conditions must be considered and weighed by the trier of fact to reach an ultimate conclusion. Worden, 108 Mont. at 213, 90 P.2d at 162. Ultimately, “[t]he question of the amount of water necessary per acre for 12 irrigation is one of fact for the court or jury, and can never be considered a question of law for the courts.” Worden, 108 Mont. at 213, 90 P.2d at 162 (quoting Tucker v. Missoula Light & Water Co., 77 Mont. 91, 108, 250 P. 11, 18 (1926)). ¶22 The intent of the WUA is to determine water rights in the state as they existed on July 1, 1973, the date the WUA went into effect. The process of determining the extent of all water rights is multistep. Initially, any party claiming an existing water right was required to file a Statement of Claim to assert the right. Section 85-2-224, MCA. After that, other affected parties may file objections to challenge the extent of the claimed right. Section 85-2-233, MCA. The final decree settles disputes with finality. Section 85-2-234, MCA. However, prior to the entry of the final decree we have acknowledged the Water Court’s ability to test the provisions of a temporary decree to determine whether they properly and fairly reflect an appropriator’s rights. McDonald v. State, 220 Mont. 519, 531-32, 722 P.3d 598, 606 (1986). Modifications may be necessary and can be made before the entry of the final decree. McDonald, 220 Mont. at 532, 722 P.3d at 606. ¶23 Eldorado argues the Water Court impermissibly constrained its water rights by quantifying the volume of the four rights as it did. In essence, Eldorado contends 15,000 acre-feet per year adopted by the Water Court is too low a limit. Eldorado argues McDonald established the principle that volume is a reflection of beneficial use of pre-WUA water rights. McDonald, 220 Mont. at 530, 722 P.2d at 605. Eldorado further argues the volume determination subjects the rights to “a limit [that] has never been a part of the use of water by Eldorado[.]” LTJO argues the Water Court should have 13 accepted the Master’s determination of 10,350 acre-feet per year, in total for all four rights because the Master’s findings were supported by substantial evidence. ¶24 McDonald addressed the issue of whether volume determinations are constitutionally permissible. Similar to the instant case, the petitioner’s water right in McDonald had never previously been subjected to a volume limitation. McDonald, 220 Mont. at 523, 722 P.2d at 600-01. However, we held they are permissible as long as they do not improperly constrain the historical beneficial use of pre-July 1, 1973 water rights. McDonald, 220 Mont. at 521, 532, 722 P.2d at 599, 606. “[T]he amount actually needed for beneficial use within the appropriation will be the basis, the measure and the limit of all water rights in Montana as between appropriators, and as between appropriators and others.” McDonald, 220 Mont. at 532, 722 P.2d at 606. ¶25 In this case the Master determined a volume determination is necessary to administer these water rights. The Water Court affirmed the Master’s decision. This decision is governed by statute. When we interpret a statute we first look to the plain meaning of its words. Clarke v. Massey, 271 Mont. 412, 416, 897 P.2d 1085, 1088 (1995). When a statute is clear and unambiguous, it is the role of the judiciary to “ascertain and declare what is in [the] terms [of the statute] or in [the] substance contained therein, not to insert what has been omitted or to omit what has been inserted.” Section 1-2-101, MCA; see also Clark, 271 Mont. at 416, 897 P.2d at 1088. A plain reading of the governing statute, § 85-2-234(6)(b)(iii), MCA, states a water judge has the discretion to determine whether volume is necessary. Therefore, we will not disturb the 14 Water Court’s determination that a volume quantification is necessary to administer the rights at issue in this case. ¶26 Now, because we hold volume is a factual finding, of which the determination of its necessity is left to the discretion of the Water Court, we review the Water Court’s application of the appropriate standard of review to the volume determination made by the Master de novo. The Water Court stated it was “legal error [for the Master] to change the elements of Eldorado’s water rights without first determining that the objector’s burden of proof had been met,” but then further analyzed the Master’s findings and determined they were not supported by substantial evidence. Despite the fact that the Master did not outright state the objectors met the burden of proof under § 85-2-227(1), MCA, we may draw an inference that the Master decided the burden was met based on his deviation in volume from Eldorado’s Statement of Claim. ¶27 A reviewing court—in this case both this Court and the Water Court—cannot simply substitute its own judgment for the Master who is the trier of fact. Further, reviewing courts must give due regard to the Master’s ability to judge the credibility of witnesses. Skelton Ranch, Inc., ¶ 63. However, this does not mean the clearly erroneous standard does not apply to the Master’s findings. Here, the Master specifically outlined the ways in which he found Johnson’s testimony to be the most credible, which neither we nor the Water Court may dispute. Instead, the Water Court reviewed the evidence presented and found the 1.5 acre-feet-per-acre-per-year standard adopted by the Master was not supported by substantial evidence. The Water Court’s rationale was that the standard Johnson used was not in line with the DNRC’s standards for the climactic area, 15 and it did not represent the amount of water taken at the point of diversion, which is required by law.6 We do not agree with the Water Court’s determination that the 1.5 acre-feet-per-year standard is not supported by substantial evidence. A reasonable mind might accept Johnson’s testimony as adequate to support the conclusion that a 1.5 acre-feet-per-year standard should be applied to the Truchot, Dennis, and Beattie Rights, even though the testimonial evidence may be weak and evidence that conflicts with Johnson’s testimony exists. However, upon our review of the evidence in the record we do agree with the Water Court’s finding of clear error regarding the Master’s volume determination that a 1.5 acre-feet-per-year standard should apply. We apply the right-result, wrong-reason appellate rule, and hold the Water Court reached the right result, but for the wrong reason. Tipp v. Skjelset, 1998 MT 263, ¶ 16, 291 Mont. 288, 967 P.2d 787 (citations omitted). ¶28 We note in Heavirland we clarified the standards of review for both the Water Court’s review of a Water Master’s report and this Court’s review of a Water Court order. We now take this opportunity to reinforce these standards. When the Water Court assigns a case to a Water Master pursuant to W. R. Adj. R. 11 the Water Master becomes the trier of fact. M. R. Civ. P. 53(e)(2). The Water Court then becomes the reviewing court and is “tethered to the clear and unequivocal articulation of the applicable standard of review in Rule 53.” In re Parenting of G.J.A., 2014 MT 215, ¶ 19, 376 Mont. 212, 6 Upon review of Johnson’s testimony, he did not state it was a point of diversion standard; instead he stated he did not recall if the standard applies at the field or at the point of diversion. He did state he was aware that the DNRC’s diverted volume standards for the applicable climactic area are higher than 1.5 acre-feet per year. 16 331 P.3d 835. The Water Court is not free to simply substitute its judgment for the Master when reviewing his factual findings. Weinheimer Ranch, Inc. v. Pospisil, 2013 MT 87, ¶ 19, 369 Mont. 419, 299 P.3d 327. We emphasize that a difference of opinion regarding evidence presented to the trier of fact does not equal clear error. Interstate Prod. Credit Ass’n v. Desaye, 250 Mont. 320, 324, 820 P.2d 1285, 1287-88 (1991). The Water Court is obligated to review and analyze the Master’s legal and factual findings under the applicable standards of review, and it is paramount that the Water Court follows its obligations. ¶29 Applying the appropriate standard of review to these facts, we find although there is substantial evidence to support the Master’s conclusion, he nonetheless clearly erred in applying Johnson’s proffered volume standard to all four rights. The evidence presented as to the appropriate volume standard included: Eldorado’s Statement of Claim;7 Judge McPhillips’ testimony; the DNRC standards for volume; the Water Commissioner’s records; and testimony by two expert witnesses, Johnson and Westenberg. All of the evidence somewhat conflicted, and none of the evidence presented provided a clear path to determine a volume quantification that should be used to reflect historic usage pursuant to McDonald. 7 Under statute all aspects of Eldorado’s Statement of Claim, which included a claimed volume, should be afforded prima facie proof of the contents of the claim. Section 85-2-227(1), MCA. Therefore, none of the parties needed to prove the 15,000 acre-feet per year claimed by Eldorado for all four rights was correct, but that it was incorrect, as shown by a preponderance of the evidence. Further, Eldorado itself was not bound to the volume amount it claimed on its Statement of Claim. Along with those who objected to the extent of Eldorado’s claim, Eldorado had the opportunity to present evidence to refute its own volume claim and show, by a preponderance of the evidence, that a greater volume was historically used. Nelson v. Brooks, 2014 MT 120, ¶ 34, 375 Mont. 86, 329 P.3d 558. 17 ¶30 Eldorado’s Statement of Claim lists 15,000 acre-feet per year for the irrigation of 15,240 acres, which amounts to just less than one acre-foot per year. Through the DNRC’s claims review process Eldorado’s claim abstract was amended to reflect that the actual irrigated acreage may be different than claimed, and the remark that “the total volume of [the] water right shall not exceed the amount put to historical and beneficial use” was added, which in essence describes that a volume was not previously decreed for a right. Eldorado argues W. R. Adj. R. 19 requires that all of the elements of a Statement of Claim must be proven by a preponderance of the evidence. Eldorado misstates the rule. The rule states prima facie proof of the contents of a claim “may be contradicted and overcome by other evidence that proves, by a preponderance of the evidence, that the elements of the claim do not accurately reflect the beneficial use of the water right as it existed prior to July 1, 1973.” W. R. Adj. R. 19. By statute, the Water Court is obligated to accept the claim form as proof of the contents of a claim, to be overcome only by a preponderance of the evidence. Section 85-2-227(1), MCA. In essence, a water right as it is reflected on a claim form is entitled to be taken as true on its face, unless proven otherwise. To require the Water Court to find proof of the elements of claims made by a preponderance of the evidence is contrary to the rule, and we reject Eldorado’s argument in this regard. 18 ¶31 Judge McPhillips testified he historically marshaled one acre-foot per year for the decreed rights, but he could not state whether it was the proper amount.8 The DNRC standards were used for the limited purpose of analyzing Johnson’s proffered standard because he claimed the standard was an applicable standard used by the DNRC. The Water Commissioner’s records were determined not to be a credible source of historic volume diversion because the records were incomplete, and prior to 1964 there was a lack of a dependable measuring device on the ditch that would have produced reliable metrics. Westenberg testified to the generalities of whether the Water Commissioner’s records reflect a volume usage for Eldorado’s rights that are within the DNRC standards for the climactic area and type of irrigation for these rights. He did not opine as to what volume should apply to Eldorado’s rights. ¶32 Johnson’s testimony of applying a 1.5 acre-feet-per-year standard to the rights was based on his own expert knowledge, but he admitted it was less than the current DNRC standards. Johnson further tied his proffered standard to his testimony about the appropriate irrigable acreage that Eldorado should be allowed. While the Master thoughtfully outlined his rationale as to why he accepted Johnson’s credibility over the others’ we conclude that he misapprehended the effect of the evidence because the purpose of a volume determination is to reflect historic beneficial use, and Johnson’s 8 Judge McPhillips testified the one acre-foot amount was a general rule of thumb, not a hard-and-fast rule. If water users under the Perry decree used more than one acre-foot then they ran the risk of being shut off. Logically, it was during dry years when marshaling was more difficult and water users logged complaints. 19 standard admittedly, and later verified, was not grounded in anything other than his own guess. McDonald, 220 Mont. at 521, 532, 722 P.2d at 599, 606. ¶33 In this case it seems it is not the standard itself that is fundamentally problematic to the parties, but it is the combination of Johnson’s proffered standard and its application to the number of irrigable acres that the Master utilized to determine the volume of the four rights.9 It was these two independent elements that were used to generate the maximum volumes.10 Regardless, we have not been asked to determine whether the irrigable acreage within the place of use is correct, but to determine whether the volume quantification made by the Water Court is in error. We hold it is not. We ultimately agree with the Water Court’s conclusion that none of the parties were able to successfully meet the burden of proof to establish a historic volume quantification for the four rights 9 The Master declined to adopt the acreage figure Johnson testified appropriately reflects the number of acres Eldorado has historically irrigated. The Master found the most credible evidence showed Eldorado should be limited to irrigating 12,550 acres annually for all four rights. The Water Court found the Master’s determination was based on substantial evidence and affirmed his determination. 10 In regard to the volume determination, the Master determined 6,000 acres were irrigated under the Eldorado Right based on Eldorado’s proposed findings of fact and conclusions of law it submitted during the Perry litigation. Additionally, the Master determined 900 acres, separated amongst the remaining three named rights, were irrigated based on Johnson’s testimony regarding the analyses of the rights. The Master then applied Johnson’s 1.5 acre-feet volume standard to the total acreage and ultimately concluded Eldorado’s four rights are limited to 10,350 acre-feet per year, and gave each right a separate volume maximum. If the Master were to have applied Johnson’s standard to the number of acres he determined could be annually irrigated the volume limit would equal 18,825 acre-feet per year. However, we need not address this mathematical curiosity. The Water Court noted: “Irrigated acreage and volume are two separate elements of a water right. The Master’s finding that Eldorado was limited by historic use to annual irrigation of 12,550 acres is not invalidated by, or conditioned upon, his selection of a specific volume. The Master’s decision regarding maximum annual acreage is dependent on historic use, and does not become clearly erroneous because the volume identified for that acreage is objectionable to another party.” 20 that is either greater than or less than the amount claimed on Eldorado’s Statement of Claim. ¶34 Eldorado advances the argument that the volume determination is not in line with our precedent in McDonald. As previously stated, McDonald sets forth that expressions of quantifications of a water right, including volume and flow rate, are permissible to identify the limit of a water right so long as they are in line with the historical, unabandoned beneficial use of the water. McDonald, 220 Mont. at 529-30, 722 P.2d at 605-06. However, Eldorado fails to identify a way in which the volume determination it contests is counter to its historic, unabandoned beneficial use. Instead, Eldorado credibly established a historic volume in its Statement of Claim that no party, including Eldorado, was able to successfully rebut. In overruling the Master, the Water Court declined to enter a specific per-acre volume factual finding, which is not required by law, and we will not second guess its judgment in that regard. We do note the Statement of Claim set forth a volume quantification that is likely in line with the volume historically delivered to Eldorado under the Perry decree. We conclude that the Water Court’s improper application of the standard of review to the Master’s factual findings nonetheless produced the proper result, and we therefore uphold the Water Court’s findings regarding volume. ¶35 2. Did the Water Court err when it chose not to assign separate volume limits for each of Eldorado’s four sets of combined irrigation and stockwater rights for the Eldorado, Truchot, Dennis, and Beattie Rights? ¶36 LTJO argues the Water Court erred when it assigned one volume maximum for all four of Eldorado’s named rights. It reiterated the concerns contained in the Master’s 21 report regarding an expansion of Eldorado’s place of use and argues a combined volume determination allows Eldorado’s junior rights to be used out of priority. TCRC argues “[w]ithout a separate volume for each of the. . . acquired water rights, total diversions of these rights will be greatly enlarged beyond the original owner’s use to the detriment of other water users.” ¶37 A water right cannot be enlarged beyond the original beneficial use by the original appropriator to the injury of others. Quigley v. McIntosh, 110 Mont. 495, 505, 103 P.2d 1067, 1072 (1940). However, place or purpose of use may be changed, subject to the complaints of another user. Quigley, 110 Mont. at 505, 103 P.2d at 1072. The requirement therefore is for a pre-WUA water user to have protested and sought redress for an alleged injury caused by a change of purpose or place of use of another’s water right. Here, the Master found Eldorado acquired all four rights by 1937.11 From that point on Eldorado used all four rights to provide water to its stockholders. As discussed above, the purpose of the WUA and adjudication process is to determine with finality the extent of all water rights in the state as of July 1, 1973. Any changes made to a right prior to the WUA followed the no-injury rule, and after would require following the statutory procedures under the WUA. The record does not indicate, nor do the parties argue, that another user was injured by a change to any of the named water rights’ purposes or places of use prior to the WUA. 11 As addressed in Issue Three, the exact date is not definitively known for when Eldorado acquired all of the Truchot Right. It is known Eldorado purchased the majority of the Truchot Right in 1921 and Eldorado claimed full use of the right by the 1950s. 22 ¶38 The rights at issue have long been comingled in many ways. However, they each remain subject to the elements of a water right as determined by the Water Court (i.e., the decreed flow rates, periods of use, points of diversion, etc.), which are not at issue in this appeal. Volume is an aspect of a water right that must still reflect historic beneficial use, but may be applied to a water right by the Water Court with discretion, as given to the court by statute. McDonald, 220 Mont. at 532, 722 P.2d at 606; § 85-2-234(6)(b)(iii), MCA. So long as the water right is constrained by its historic beneficial use, we hold the Water Court did not err by utilizing a combined volume limitation for Eldorado’s four named water rights. A water user who alleges injury caused by Eldorado’s use retains the ability to pursue every remedy available to him under statute. ¶39 3. Did the Water Court err when it limited the flow rate of the Truchot Right to 300 miner’s inches instead of 225 miner’s inches? ¶40 Eldorado acquired 225 miner’s inches of the Truchot Right in 1921. TCRC argues there is no evidence that the remaining 75 miner’s inches were transferred to Eldorado. Therefore, TCRC argues the Water Court erred by failing to limit the Truchot Right’s flow rate at 225 miner’s inches. ¶41 While Eldorado was unable to produce a deed of transfer for the remaining 75 inches, the Master found substantial evidence supported the transfer by way of the Water Commissioner’s records and State Water Resource Survey. It is known that the 75 inches were originally retained by Truchot, and then transferred to another water user named Coffee until 1946. Any competing water user’s claim to the 75 inches of the right was addressed and resolved by the Master, and he determined no other party made claim to 23 the portion of the right on a Statement of Claim. The Water Commissioner’s records and State Water Resource Survey reflect full use of the Truchot Right by Eldorado by the 1960s at the latest. The Master’s finding was affirmed by the Water Court. Furthermore, Eldorado claimed the full 300 inches on its Statement of Claim, which the Water Court correctly stated is entitled to prima facie proof. ¶42 The Water Court is obligated to review the Master’s factual findings for clear error. Heavirland, ¶ 14. The Water Court stated, “[i]n this case [the Water Commissioner’s] records constitute substantial evidence of use of the entire Truchot [R]ight by Eldorado.” We review de novo whether the Water Court applied the appropriate standard of review. Skelton Ranch, Inc., ¶ 26. In this case the Water Court plainly analyzed the Master’s factual findings to determine whether substantial evidence supported his findings, and found no clear error. We conclude the Water Court applied the appropriate standard of review and we therefore affirm its decision. CONCLUSION ¶43 The Water Court’s order regarding Water Court Case 41O-129B is affirmed. /S/ MICHAEL E WHEAT We Concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA

April 26, 2016

2ae32ea0-af46-406c-9445-661c0cfb655c

Estates v. Whitefish

2016 MT 87N

DA 15-0486

Montana

Montana Supreme Court

DA 15-0486 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 87N THE ESTATES HOMEOWNERS ASSOCIATION (GROUSE MOUNTAIN), INC., Plaintiff and Appellee, v. CITY OF WHITEFISH, Defendant and Appellant, and GROUSE MOUNTAIN HOMEOWNERS, INC., Proposed Intervenor and Appellant. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV 14-1215B Honorable Robert B Allison, Presiding Judge COUNSEL OF RECORD: For Appellant: Terry N. Trieweiler, Trieweiler Hedman Hileman & Lacosta, Whitefish, Montana (Attorney for Grouse Mountain Homeowners, Inc.) Angela K. Jacobs, City Attorney, Whitefish, Montana For Appellee: Sean S. Frampton, Morrison & Frampton, PLLP, Whitefish, Montana (Attorney for Grouse Mountain) Submitted on Briefs: March 23, 2016 Decided: April 12, 2016 Filed: __________________________________________ Clerk April 12 2016 Case Number: DA 15-0486 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 The City of Whitefish (City) appeals an order by the Eleventh Judicial District Court, Flathead County, granting summary judgment to The Estates Homeowners Association (Grouse Mountain), Inc. (Estates) on the issue of whether a city resolution interferes with Estates’ vested right to construct gates on Mountainside Drive, a private road. Grouse Mountain Homeowners, Inc. (Homeowners) appeals the District Court’s order denying Homeowners’ motion to intervene in this action and the District Court’s denial of Homeowners’ motion to revise that order. We address whether the District Court: (1) erred in denying Homeowners’ motion to intervene as a matter of right; (2) abused its discretion in denying Homeowners’ motion for permissive intervention; (3) erred in granting summary judgment to Estates and denying summary judgment to the City; and (4) incorrectly concluded that a justiciable controversy exists between Estates and the City. We affirm on all issues. ¶3 Estates and Homeowners are associations of homeowners who own property in the Grouse Mountain residential subdivision. Grouse Mountain was developed in three phases. Phases I and II, which include the lower area of the subdivision surrounding a golf course, are managed by Homeowners. Phase III, known as Grouse Mountain Estates, is managed by Estates and is accessed via Mountainside Drive. The City 3 approved the final plats for the subdivision subject to conditions of approval. Condition 12(a) provides: “The roads in Grouse Mountain Estates shall be private roads and the Homeowner’s Association shall be entitled to close them to vehicular access by the public.” Condition 18 provides: “A reciprocal easement agreement shall be agreed to between Grouse Mountain Estates and Grouse Mountain Phases I, II, and II [sic] homeowners associations to ensure reciprocal street access through each subdivision.” Pursuant to Condition 18, Estates and Homeowners entered into an easement agreement granting Homeowners’ residents the right to use Mountainside Drive. Condition 24 provides: “Plans for streets . . . shall be approved by the Public Works Director prior to construction.” ¶4 In October 2014, the City adopted Resolution 14-48, which prohibits any subdivision from gating its streets to prevent public access. Estates filed suit seeking a declaratory judgment that it has the right to construct gates to the entrances of Grouse Mountain Estates on opposite ends of Mountainside Drive. Homeowners moved to intervene, contending that gates on Mountainside Drive would impede and obstruct the reasonable use of Homeowners’ easement, as provided by Condition 18 of the final plat approval. The District Court denied Homeowners’ motion. The Court concluded that Homeowners did not have a justiciable controversy because “no gates have been installed and there has been no interference with the easement interest of [Homeowners] or breach of contract.” The Court further concluded that protection of Homeowners’ alleged easement interest “would not be impaired by a decision” in favor of Estates. The Court concluded that the City adequately represented Homeowners’ interests as residents of Whitefish in keeping Mountainside Drive open to public access. Homeowners moved for 4 revision of the District Court’s order denying its motion to intervene. The District Court denied that motion. Homeowners has since filed a separate action against Estates to protect its easement interests. ¶5 After the District Court denied Homeowners’ motion to intervene, Estates and the City cross-filed for summary judgment. Estates moved for summary judgment that Resolution 14-48 presents an unlawful interference or impairment of Estates’ vested right to gate private roads as provided by Condition 12(a) of the final plat approval. The City argued that Estates’ complaint was an impermissible request for an advisory opinion based on the District Court’s logic in denying Homeowners’ motion to intervene. The City further contended that Estates’ property interests is not an absolute vested right because it is subject to conditions of approval, City subdivision regulations, and engineering standards. The District Court granted Estates’ motion for summary judgment and denied the City’s motion. The Court concluded: “The City did grant the right to Grouse Mountain to close its private roads to vehicular access by the public. The Resolution disallowing gates closing streets from public access interferes with that right.” The Court further concluded that a justiciable controversy exists between Estates and the City because Resolution 14-48 directly affects Estates’ property interest, which vested when the City approved the final plats for the subdivision. ¶6 Homeowners appeals the District Court’s denial of its motion to intervene and motion for revision of that denial. The City appeals the District Court’s order denying the City’s motion for summary judgment and granting summary judgment to Estates. ¶7 We review de novo a district court’s denial of a motion to intervene as a matter of right under M. R. Civ. P. 24(a). Loftis v. Loftis, 2010 MT 49, ¶ 6, 355 Mont. 316, 5 227 P.3d 1030. We review for abuse of discretion a district court’s denial of a motion for permissive intervention under M. R. Civ. P. 24(b). Loftis, ¶ 6. A district court abuses its discretion when it acts arbitrarily without conscientious judgment or exceeds the bounds of reason. Seltzer v. Morton, 2007 MT 62, ¶ 65, 336 Mont. 225, 154 P.3d 561. ¶8 We review summary judgment orders de novo. Bailey v. State Farm Mut. Auto. Ins. Co., 2013 MT 119, ¶ 18, 370 Mont. 73, 300 P.3d 1149. Summary judgment is appropriate when the moving party demonstrates an absence of a genuine issue of material fact and entitlement to judgment as a matter of law. M. R. Civ. P. 56(c)(3). “A district court’s ruling on whether a justiciable controversy exists is a conclusion of law,” which we review for correctness. Northfield Ins. Co. v. Mont. Ass’n of Cntys., 2000 MT 256, ¶ 8, 301 Mont. 472, 10 P.3d 813. ¶9 Homeowners contends that the District Court should have granted its motion to intervene as of right under M. R. Civ. P. 24(a)(2), which provides: On timely motion, the court must permit anyone to intervene who . . . claims an interest relating to the property or transaction which is the subject matter of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant’s ability to protect its interest, unless the existing parties adequately represent that interest. The timeliness of Homeowners’ motion is not disputed. Homeowners contends that it has a direct interest in the subject matter of this litigation because Estates claims that it has an unequivocal vested right to close its road by gates when, in fact, Estates’ right is limited by Homeowners’ reasonable use of an easement over Mountainside Drive. Alternatively, Homeowners contends that the District Court should have granted it permissive intervention under M. R. Civ. P. 24(b). M. R. Civ. P. 24(b)(1)(B) provides: “On timely motion, the court may permit anyone to intervene who . . . has a claim or 6 defense that shares with the main action a common question of law or fact.” Homeowners contends that it should have been allowed to intervene because whether the gates impair Homeowners’ easement rights is a common question of law and fact. ¶10 Contrary to Homeowners’ assertions, the easement issue is not common to both parties’ claims. Estates contends that Resolution 14-48 interferes with its vested property interests, whereas Homeowners contends that the construction of gates on Mountainside Drive will interfere with its contractual easement interests. The applicability of Resolution 14-48 to Estates involves different facts and different law than the interpretation of the easement contract between Estates and Homeowners. Further, a judgment that Resolution 14-48 interferes with Estates’ property interests does not necessarily preclude Homeowners from arguing that a gate on Mountainside Drive would interfere with its easement interests. The District Court determined that Homeowners could assert its interest through separate litigation. That, in fact, is what Homeowners has done. The District Court did not err in denying Homeowners’ motion to intervene as of right or abuse its discretion in denying Homeowners’ motion for permissive intervention. ¶11 Because we resolve Homeowners’ involvement in this case by concluding that the District Court did not err in denying Homeowners’ motion for intervention, we need not decide whether the District Court correctly determined that Homeowners has no justiciable controversy against Estates. By the same logic, we decline to address Homeowners’ arguments concerning summary judgment. Since Homeowners was not properly a party to this lawsuit, it cannot appeal the merits. 7 ¶12 We next turn to the City’s appeal of the District Court’s order granting summary judgment to Estates and denying summary judgment to the City. In its response to the City’s appellate brief, Estates contends that its two main arguments—that it has a vested right and that Resolution 14-48 interferes with that right—were unopposed by the City during the District Court proceedings. Estates cites the City’s motion for summary judgment and response to Estates’ motion for summary judgment to support this contention. A review of that document reveals that the City clearly opposed Estates’ arguments that it had a vested right—contending that public works approval was necessary before Estates could install the gates—and that Resolution 14-48 interfered with Estates’ vested right. Because the City raised these arguments before the District Court, we will address them on appeal. ¶13 The City contends that the District Court erred in its summary judgment order for two reasons. First, the City contends that the District Court should not have reached the issue of whether Resolution 14-48 violated Estates’ constitutional right because, the City argues, no justiciable controversy existed. Second, the City contends that the District Court erred in determining that Estates’ constitutionally-protected property right in installing gates on Mountainside Drive vested at final plat approval. These two issues are related and, therefore, we will address them simultaneously. ¶14 This Court engages in a three-part analyses to determine whether a justiciable controversy exists: First, a justiciable controversy requires that parties have existing and genuine, as distinguished from theoretical, rights or interests. Second, the controversy must be one upon which the judgment of the court may effectively operate, as distinguished from a debate or argument invoking a purely political, administrative, philosophical or academic conclusion. 8 Third, [it] must be a controversy the judicial determination of which will have the effect of a final judgment in law or decree in equity upon the rights, status or legal relationships of one or more of the real parties in interest, or lacking these qualities be of such overriding public moment as to constitute the legal equivalent of all of them. Chipman v. Nw. Healthcare Corp., 2012 MT 242, ¶ 19, 366 Mont. 450, 288 P.3d 193 (change in original and citation omitted). ¶15 The District Court concluded that Estates’ right is existing and genuine because Condition 12(a) “granted [Estates] the right to have private roads and to close its private roads . . . to vehicular access by the public. That right vested upon final plat approval.” The City contends that this conclusion is incorrect, attempting to characterize Estates’ right as conditional and therefore incomplete. The City contends that Estates’ proposed gates on Mountainside Drive are subject to the Public Works Department’s review pursuant to the City’s engineering standards and Condition 24 of final plat approval. Condition 24 specifically refers to plans for streets. Estates desires to install a gate, not a street. Further, as Estates points out, the City only approved the final plats once all of the conditions were satisfied. See § 76-3-611(1), MCA (“The governing body shall examine each final subdivision plat and shall approve the plat only if: (a) it conforms to the conditions of approval set forth on the preliminary plat . . . .”). The District Court correctly determined that Estates’ right to construct gates on private roads within the Grouse Mountain Estates subdivision vested when Estates received its final plat. The City cannot now withdraw its approval of that plat by passing Resolution 14-48. ¶16 The District Court’s decision resolved a concrete dispute between the parties as to their existing rights. A controversy existed upon which the District Court’s judgment effectively operated: Estates has an existing property right to construct gates on its 9 private roads, and Resolution 14-48 conflicts with this right by prohibiting Estates from constructing gates on its private roads. We disagree with the City that the “triggering event” that would have created a concrete controversy is the members’ approval of the installation of permanent gates on Mountainside Drive. In fact, the triggering event was the City’s passage of Resolution 14-48, which interfered with Estates’ vested property interest. The judgment in this case will have the effect of a final judgment on the rights of the parties. Therefore, the District Court correctly concluded that a justiciable controversy exists.1 The District Court’s grant of summary judgment to Estates and denial of summary judgment to the City was appropriate because a justiciable controversy exists, Estates’ property right vested upon final plat approval, and Resolution 14-48 interferes with that property right. ¶17 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 were not clearly erroneous, and its ruling was not an abuse of discretion. We affirm. /S/ JAMES JEREMIAH SHEA 1 Because we did not address whether the District Court erred in finding that no justiciable controversy exists between Estates and Homeowners, we decline to address whether that ruling is inconsistent with the District Court’s conclusion that a justiciable controversy exists between the City and Estates. 10 We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ JIM RICE

April 12, 2016

efe05582-15cc-4d92-83d9-da2c197454eb

In re Parenting of M.M.K.

2016 MT 81

DA 15-0524

Montana

Montana Supreme Court

DA 15-0524 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 81 IN RE THE PARENTING OF: M.M.K., A Minor Child, MARGARET AMBROSE, Petitioner and Appellant, and BRITNEY NICOLE KERLEE, n/k/a BRITNEY KUTIL, Respondent and Appellee. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. BDR-2013-374 Honorable Jeffrey M. Sherlock, Presiding Judge COUNSEL OF RECORD: For Appellant: Barbara E. Bell, Marra, Evenson & Bell, P.C., Great Falls, Montana For Appellee: Andrew T. Newcomer, Ugrin, Alexander, Zadick & Higgins, P.C., Great Falls, Montana Submitted on Briefs: March 2, 2016 Decided: April 5, 2016 Filed: __________________________________________ Clerk April 5 2016 Case Number: DA 15-0524 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Margaret Ambrose appeals from the District Court’s Findings of Fact, Conclusions of Law and Order dated July 23, 2015. We affirm. ¶2 We restate the issue on appeal as follows: Did the District Court abuse its discretion in concluding that Montana is an inconvenient forum in which to determine whether Ambrose has a parental interest as to M.M.K., pursuant to § 40-7-108, MCA? FACTUAL AND PROCEDURAL BACKGROUND ¶3 Britney Kerlee (Kutil) is the mother of M.M.K., who was born in Great Falls, Montana, in April 2011. M.M.K.’s father has not been involved in her life. In June 2012 when M.M.K. was just over a year old, Kutil reached an agreement with Ambrose under which Ambrose would provide temporary care for M.M.K. Kutil knew Ambrose through Ambrose’s daughter, but Ambrose is not related to Kutil or to M.M.K. Kutil executed a six-month power of attorney in favor of Ambrose to allow her to care for M.M.K. ¶4 When the power of attorney expired Kutil and Ambrose disagreed as to who should have custody of M.M.K. and Ambrose refused to return the child. The parties disagree about the reasons for this conflict, and whether Ambrose wrongfully retained custody of M.M.K. On June 5, 2013, Kutil recovered physical custody of M.M.K. from Ambrose, with the help of volunteer attorneys, several law enforcement agencies and the Montana Department of Public Health and Human Services, Child Protective Services. Also in June 2013 Kutil, M.M.K., and her husband (they were married in July 2013 and he is not M.M.K.’s father) moved to Oklahoma (1300 miles from Great Falls) where he 3 could find work and where he had family members. Kutil and her husband now have a child together, born in Oklahoma. ¶5 Kutil, M.M.K., Kutil’s husband, and their child have lived in Oklahoma continuously since June 2013. Kutil is a stay-at-home mother providing care for the two children. Kutil commenced an action in Oklahoma courts against M.M.K.’s biological father, seeking to establish paternity, child support, and a parenting plan. ¶6 On June 10, 2013, Ambrose commenced the present case in the Montana Eighth Judicial District Court in Cascade County by filing a Petition for Parental Interest Determination pursuant to § 40-4-211(4)(b), MCA. Ambrose filed a concurrent Motion and Brief for Interim Order in which she requested that the District Court grant her interim custody of M.M.K. pending the outcome of the litigation. Kutil responded to the petition requesting that it be denied; that she be awarded costs and attorney fees; and that Ambrose be ordered to pay her travel expenses from Oklahoma for attending any required court proceedings in Montana. ¶7 The District Court referred the case to its Standing Master. In March 2014 the Master held a hearing and found that Ambrose had not established that any emergency situation existed regarding M.M.K. sufficient to justify awarding her interim custody. In July 2014 the Master held another hearing on pending motions, including Kutil’s request that the District Court decline to exercise jurisdiction over the case. ¶8 The Master concluded that the District Court had jurisdiction to determine Ambrose’s parental interest petition because M.M.K. lived in Montana at the time it was filed, and had lived in Montana for two years before that. The Master determined that the 4 dispute should be determined in “stages,” the first being whether Ambrose was entitled to a parental interest as to M.M.K. Kutil filed objections to the Master’s decision and the District Court conducted a hearing in July 2015. The District Court adopted the Master’s findings of fact, except for correcting one date, but reversed a number of the Master’s conclusions of law. The District Court reversed the Master’s conclusion that the parental interest determination should be made first, in Montana, and determined instead that Montana was an inconvenient forum and should decline to exercise jurisdiction over the matter. ¶9 Ambrose appeals. STANDARD OF REVIEW ¶10 A district court may refer a matter to a standing master, who may conduct necessary proceedings, rule upon the admissibility of evidence, receive testimony under oath and issue orders that are subject to review by the district court upon objection of a party. Section 3-5-124, MCA; M. R. Civ. P. 53. Unless the district court orders otherwise, a master must issue findings of fact and conclusions of law upon matters referred by the district court. Section 3-5-126(1), MCA. A party may object to the master’s findings and conclusions and the district court, after hearing, may adopt the master’s report or may modify or reject them in whole or in part; may receive further evidence; or may recommit to the master with further instructions. Section 3-5-126(2), MCA. A district court may modify the master’s findings or conclusions only upon objection by a party. In re Marriage of McMichael, 2006 MT 237, ¶ 15, 333 Mont. 517, 143 P.2d 439. 5 ¶11 In non-jury actions the district court must accept the master’s findings of fact unless they are clearly erroneous, M. R. Civ. P. 53(e)(2). The district court may conduct plenary review of the master’s conclusions of law to determine whether they are correct. Heavirland v. State, 2013 MT 313, ¶ 14, 372 Mont. 300, 311 P.3d 813. This Court reviews a district court’s action de novo to determine whether it applied the proper standard of review to the master’s findings of fact and conclusions of law. In re the Parenting of G.J.A., 2014 MT 215, ¶ 11, 376 Mont. 212, 331 P.3d 835. ¶12 This Court reviews a district court’s decision on an issue of inconvenient forum to determine whether the district court abused its discretion. In re the Marriage of Irwin, 259 Mont. 176, 179, 855 P.2d 525, 527 (1993); In re the Paternity and Custody of B.E.S., 1998 MT 190, ¶ 13, 290 Mont. 188, 963 P.2d 449. DISCUSSION ¶13 Did the District Court abuse its discretion in concluding that Montana is an inconvenient forum in which to determine whether Ambrose has a parental interest as to M.M.K. pursuant to § 40-7-108, MCA? ¶14 Ambrose commenced this proceeding to establish that she has a parental interest as to M.M.K., and that she should be awarded custody. Under Montana law, a district court may award “a parental interest” in a child to a person who is not a natural parent as provided in § 40-4-228, MCA. The person petitioning for the award must show by clear and convincing evidence that the natural parent has “engaged in conduct that is contrary to the child-parent relationship”; that the petitioner has established a child-parent relationship with the child; and that it is in the best interest of the child to continue that relationship. Section 40-4-228(2), MCA. A district court’s determination of the best 6 interest of the child is broadly based upon “all relevant parenting factors,” guided by the considerations in § 40-4-212, MCA. Neither the Standing Master nor the District Court has determined whether Ambrose qualifies for an award of parental interest. ¶15 The issue is not whether the Montana court has jurisdiction over Ambrose’s petition, but whether it should exercise that jurisdiction. Montana courts have jurisdiction to determine parenting issues if this State was the home state of the child at the commencement of the action or had been within six months. Section 40-4-211(1)(a), MCA. A Montana court may also assume jurisdiction over parenting issues when it is in the best interest of the child; when the child, the parents or “one contestant” have significant contacts here; and when there is substantial evidence in this State concerning the child’s condition and needs. Section 40-4-211, MCA. ¶16 However, a court that has jurisdiction to make a child custody determination may decline to exercise that jurisdiction if it determines that it is “an inconvenient forum under the circumstances” and the court of another state provides a more appropriate forum. Section 40-7-108, MCA. Whatever right Ambrose may have under § 40-4-211, MCA, is subject to the District Court’s determination of inconvenient forum. ¶17 A court considering this issue must consider “all relevant factors,” including: (a) whether domestic violence has occurred . . . ; (b) the length of time that the child has resided outside this state; (c) the distance between the court in this state and the court in the state that could assume jurisdiction; (d) the relative financial circumstances of the parties; (e) any agreement of the parties as to which state should assume jurisdiction; 7 (f) the nature and location of the evidence required to resolve the pending litigation, including the testimony of the child; (g) the ability of the court of each state to decide the issue expeditiously and the procedures necessary to present the evidence; and (h) the familiarity of the court of each state with the facts and issues in the pending litigation. Section 40-7-108(2), MCA. The purpose of these provisions is to “assure that any litigation involving minor children occurs in the state where the child has the closest connection and where significant evidence concerning the child’s care, protection, training, and personal relationships is most readily available.” Marriage of Irwin, 259 Mont. at 178, 855 P.2d at 526. The District Court determined that Montana was an inconvenient forum to determine Ambrose’s petition, and we review that decision to determine whether the District Court abused its discretion. Marriage of Irwin, 259 Mont. at 178, 855 P.2d at 527. ¶18 While considering the factors involved in determining the inconvenient forum issue, the District Court concluded that domestic violence was not an issue and that M.M.K. had lived in Oklahoma a “substantial portion of her young life.” Therefore, the District Court concluded that evidence of M.M.K.’s life in Oklahoma is the primary evidence concerning what is in her best interest, and is “particularly relevant to the determination of the appropriate parenting plan.” These considerations weighed in favor of a determination that Montana is an inconvenient forum. 8 ¶19 The District Court determined that the 1300 miles between Oklahoma and Montana along with Ambrose’s superior financial position1 both weighed in favor of determining that Montana is an inconvenient forum. The District Court concluded that since no Montana court had made any substantive findings regarding the parental interest determination or a parenting plan for M.M.K., there was no evidence as to which state’s courts could most expeditiously consider the case. The District Court noted that Kutil offered to stipulate to the application of Montana law in the Oklahoma proceedings. The District Court reiterated the amount of time M.M.K. has spent in Oklahoma, her lack of contact with Ambrose or Montana since June 2013, and that the Oklahoma court would have more relevant information about the facts. ¶20 Based upon its analysis of the facts under § 40-7-108, MCA, the District Court concluded that the applicable factors all weighed in favor of a determination that Montana should decline to exercise jurisdiction. ¶21 Ambrose recognizes that Oklahoma and Montana have both enacted the Uniform Child Custody Jurisdiction and Enforcement Act, Title 40, chapter 7, MCA. She contends, however, that the District Court’s decision was an abuse of discretion because, she asserts, Oklahoma does not provide a statutory basis for a non-relative to assert a parental interest in a child similar to § 40-4-211(6), MCA. The parties substantially disagree about whether Oklahoma law would allow Ambrose to assert custody or 1 Ambrose is a civilian contractor for the United States Air Force. She refused to provide personal financial information during discovery, but the District Court determined that she was in a “far more secure financial position” than Kutil, who has two small children and qualifies for state medical assistance in Oklahoma. 9 visitation rights as to M.M.K. Ambrose does not cite any Oklahoma law demonstrating that she would not be heard in that case, while Kutil cites several Oklahoma cases that could indicate a right for non-relatives to assert a parental-type interest in a child. We need not determine that choice of law issue because this appeal involves an issue of inconvenient forum. ¶22 Ambrose characterizes Kutil’s relocation to Oklahoma as “forum shopping” that is contrary to the purposes of the Uniform Child Custody Jurisdiction and Enforcement Act. We find no basis to support this accusation of forum shopping. Kutil’s reasons for moving to Oklahoma are plain in the record, and she has offered, on the record, to stipulate to the application of Montana law in Oklahoma proceedings. Further, these choice of law issues are not before the Court. The issue here is whether the facts demonstrate that Montana is an inconvenient forum for determining what is in the best interest of M.M.K. Holding proceedings in Montana to determine M.M.K.’s future would place a heavy burden of time, expense, travel and dislocation upon Kutil and her family. CONCLUSION ¶23 Regardless of whether Ambrose can or cannot assert a parental interest in Oklahoma, the issue here is the best forum for determining the best interest of the child. The District Court carefully considered the recommendations of the Standing Master and the applicable facts and concluded that the best forum to resolve M.M.K.’s future is not in Montana. The District Court properly applied the facts to the law and did not abuse its discretion. 10 ¶24 Affirmed. /S/ MIKE McGRATH We Concur: /S/ BETH BAKER /S/ LAURIE McKINNON /S/ PATRICIA COTTER /S/ JAMES JEREMIAH SHEA

April 5, 2016

74a40478-db1c-4a03-86f7-5a8e1c0c0ef7

King v. State

2016 MT 85N

DA 15-0374

Montana

Montana Supreme Court

DA 15-0374 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 85N NATHAN GERALD KING, Petitioner and Appellant, v. STATE OF MONTANA, Respondent and Appellee. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. DDV114-144(B) Honorable Julie Macek, Presiding Judge COUNSEL OF RECORD: For Appellant: Nathan Gerald King (Self-Represented), Shelby, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Jonathan M. Krauss, Assistant Attorney General, Helena, Montana John Parker, Cascade County Attorney, Susan Weber, Deputy County Attorney, Great Falls, Montana Submitted on Briefs: March 9, 2016 Decided: April 5, 2016 Filed: __________________________________________ Clerk April 5 2016 Case Number: DA 15-0374 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 Nathan Gerald King (King) was convicted of felony deliberate homicide and felony aggravated assault on September 23, 2011. King appealed his conviction to this Court, and we affirmed. State v. King, 2013 MT 139, 370 Mont. 277, 304 P.3d 1. King then filed a timely petition for postconviction relief (PCR) in the District Court, asserting two grounds for relief. First, King argued ineffective assistance of trial counsel based on his attorney’s failure to designate which portions of the victim’s mental health records (which were submitted in their entirety to the District Court for in camera inspection) should be admitted into evidence at trial. Second, King asserted that he is entitled to relief because he has discovered new evidence in the form of new memories of the incident that led to his convictions. The District Court denied King’s PCR petition. King appeals the denial of his PCR petition. We affirm. ¶3 King raises four issues in his brief on appeal. As explained below, three of the issues are not properly before us because he raises them for the first time on appeal. The fourth issue, King’s ineffective assistance of counsel claim, is properly before us because 3 it was raised in his PCR petition. The newly discovered evidence claim that King also raised in his PCR petition has been abandoned on appeal. ¶4 King argues for the first time on appeal that Montana’s justifiable use of force statutes are unfairly vague; that this Court should reconsider its previous denial of his petition for supervisory control, see King v. Mont. Eighth Judicial Dist. Court, 2015 Mont. LEXIS 509 (September 1, 2015) (OP 15-0505); and that King received ineffective assistance of counsel because his attorney did not seek a writ of supervisory control before trial. However, “[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 (citing State v. Garner, 2001 MT 222, ¶ 45, 306 Mont. 462, 36 P.3d 346; § 46-21-105(1)(a), MCA). We therefore decline to address these three arguments. We also decline to address the newly discovered evidence argument King raised in his original petition but did not address on appeal. See, e.g., Ford v. State, 2005 MT 151, ¶ 35, 327 Mont. 378, 114 P.3d 244 (finding that “we have no occasion to review the District Court’s decision” when the appellant abandoned certain contentions on appeal); Skinner v. Allstate Ins. Co., 2005 MT 323, ¶ 9, 329 Mont. 511, 127 P.3d 359 (noting that a party did not brief certain issues on appeal and “[t]hose issues, therefore, have been abandoned on appeal, and we do not address them”). ¶5 King’s fourth and final claim—that his attorney’s failure to highlight selected portions of the victim’s mental health records constituted ineffective assistance of counsel because it prevented those portions from being admitted into evidence—is 4 properly before this Court because it was raised in his original PCR petition. The District Court denied the petition because it found that “the evidence [King] is complaining had no chance of being presented to the jury was in fact presented through both physical evidence and [the attorney’s] statements,” and that the failure of [King’s attorney] to highlight or flag portions of [the victim’s] mental health records is not the reason the records were not admitted. The admission of the mental health records [was] prohibited because, under the theory of the defense presented at trial, the introduction of the records was not permissible under the Montana Rules of Evidence. ¶6 In order to establish that his counsel was constitutionally deficient, King must show “that counsel’s performance was deficient and that the deficient performance prejudiced the defense.” Baca v. State, 2008 MT 371, ¶ 16, 346 Mont. 474, 197 P.3d 948 (citing Whitlow v. State, 2008 MT 140, ¶ 10, 343 Mont. 90, 183 P.3d 861). In order to show prejudice, King must “demonstrate a reasonable probability that, but for counsel’s deficient performance, the result of the proceeding would have been different.” Baca, ¶ 17 (citing State v. Hagen, 2002 MT 190, ¶ 18, 311 Mont. 117, 53 P.3d 885). King must prove by a preponderance of the evidence that he is entitled to relief. Ellenburg v. Chase, 2004 MT 66, ¶ 12, 320 Mont. 315, 87 P.3d 473 (citing State v. Peck, 263 Mont. 1, 3-4, 865 P.2d 304, 305 (1993)). ¶7 King has not shown by a preponderance of the evidence that his attorney’s performance was deficient or that he was prejudiced by an alleged deficiency. Even though King’s attorney did not mark specific portions of the victim’s mental health records for review by the District Court, it is evident from the District Court’s lengthy 5 order addressing the admissibility of the records that the Court conducted a thorough review of those records. The District Court ultimately decided that the records were inadmissible, but this ruling was based upon an analysis of Montana Rules of Evidence 404(a), 404(c), and 405, and not upon King’s attorney’s failure to mark which portions of the record he wished to admit. Moreover, although the records themselves were inadmissible, King’s attorney still was able to present some of the contents of those records to the jury. In his opening statement, King’s attorney represented to the jury that the victim had been suicidal on the day of his death. Then during the defendant’s case in chief, King’s attorney played for the jury a taped statement in which King tells law enforcement that the victim was emotional and suicidal and that he had attempted suicide in the past. Thus, evidence regarding the victim’s mental health was in fact presented to the jury, and King was not prejudiced by his attorney’s failure to mark portions of the victim’s mental health records for review by the District Court. King did not receive ineffective assistance of counsel. ¶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 did not err in denying King’s PCR petition. ¶9 Affirmed. /S/ PATRICIA COTTER 6 We Concur: /S/ MIKE McGRATH /S/ JAMES JEREMIAH SHEA /S/ MICHAEL E WHEAT /S/ JIM RICE

April 5, 2016

a84b1e01-472e-417c-8c93-c7b9eb68fd2d

Ray v. Connell

2016 MT 95

DA 15-0543

Montana

Montana Supreme Court

DA 15-0543 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 95 JERRY T. RAY, Plaintiff and Appellant, v. MARTIN R. CONNELL, Defendant and Appellee. APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DV-14-0765 Honorable Rod Souza, Presiding Judge COUNSEL OF RECORD: For Appellant: Jack R. Stone, Attorney at Law, Lewistown, Montana For Appellee: Brian L. Taylor, Jaclyn S. Laferriere, Hall & Evans, LLC, Billings, Montana Submitted on Briefs: March 9, 2016 Decided: April 26, 2016 Filed: __________________________________________ Clerk April 26 2016 Case Number: DA 15-0543 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Jerry Ray (Ray) appeals from an order and memorandum entered by the Thirteenth Judicial District Court, Yellowstone County, granting Martin Connell’s (Connell) two motions for partial summary judgment and renewed motion for summary judgment. We affirm. ¶2 Ray presents the following dispositive issues for review: 1. Did the District Court err in granting Connell summary judgment on Ray’s defamation claim based on a conversation between Connell and Jim Ronquillo (Ronquillo)? 2. Did the District Court err in granting Connell summary judgment on Ray’s defamation claim based on comments Connell made at two Billings City Council meetings? 3. Did the District Court err in granting Connell summary judgment on Ray’s claims of tortious interference with business interests and general damages for mental anguish and suffering based on Connell’s alleged defamation of Ray’s character? FACTUAL AND PROCEDURAL BACKGROUND ¶3 Ray and Connell are both real estate agents. Ray and Connell each own land in the East Billings Urban Revitalization District (EBURD). EBURD is a zoning district in the industrial area of Billings, which has adopted a master plan and code (EBURD Code) to regulate development and renewal in the area. Property owners within EBURD also make up a non-profit organization called the Billings Industrial Revitalization District (BIRD). BIRD advocates for development within EBURD. Connell is president of BIRD. In May 2013, Ray requested two variances from the EBURD Code in order to develop property he owns located within the district. The Board of Adjustments denied 3 one variance request and granted the other. BIRD and several landowners appealed the granted variance. Ray appealed the denied variance. The EBURD Code and the outcome of Ray’s two variance requests generated contention between Ray and Connell. Connell is a proponent of the EBURD Code and Ray is a vocal opponent. ¶4 Ray wrote a letter to the Billings City Council asking the Council to rescind or modify the EBURD Code. The Billings City Council held a meeting on October 7, 2013, and discussed the EBURD Code. According to that meeting’s transcript, Connell addressed the Council and commented on Ray’s petition to rescind or modify the EBURD Code. Connell said, “I sent [the City Council] a letter last week kind of outlining the Jerry T. Ray situation.” Connell continued, “[T]he simplest way to summarize Jerry T. Ray is he’s like a broken watch. He’s right twice a day, and he in-fills a lot of stuff. So there’s a lot of things that you’ve been told that are not factual.” ¶5 At another Billings City Council meeting, held on January 6, 2014, the minutes reflect that Ray addressed the Council and said he wanted to talk about the first two phases of EBURD in which he owned property. He advocated for rezoning the EBURD back to “Controlled Industrial” because the EBURD Code is too stringent, complying with it is too expensive, and its provisions discourage development. The minutes show that Connell later spoke and called himself “public enemy #1 [to Ray’s] petition.” Connell accused Ray of making misrepresentations and invited Ray to follow city procedures and buy the required permits. Connell said Ray’s criticisms of the EBURD Code were “just simply not true.” The minutes show Connell said “if they held a hearing with sworn testimony, it would be found that what Mr. Ray had told Council was not 4 true.” Finally, the minutes indicate Connell accused Ray of having ex-parte communication with all of the Board of Adjustments members prior to their ruling on his variance requests and giving them factually incorrect information to influence their decision. Connell admitted he was not at the Board of Adjustments meeting when Ray’s requests were considered because Ray “had turned his name into the Board of Realty for malpractice.” As a result, Connell “had to go before the Board of Realty, who dismissed the complaint with prejudice.” Connell concluded, “The bottom line was there were seven criteria to grant a variance, and Mr. Ray only qualified for one—a parking lot; but the board granted it.” ¶6 Ray filed suit against Connell alleging Connell’s comments during these two meetings constituted defamation of his character. Additionally, Ray accused Connell of telling Ronquillo, a Billings City Councilman, that Ray had stolen gates from Connell’s business, Pierce Packing, and was keeping them at his residence. This accusation, Ray argued, also constituted defamation and Ray accused Ronquillo of spreading the rumor. On April 24, 2014, Ronquillo signed an affidavit in which he attested Connell told him that Ray stole gates from Connell’s business and had them at his home. In the affidavit, Ronquillo attested Connell’s statement about Ray stealing gates was “defamation of Jerry T. Ray’s character” and “this untrue statement could cause Jerry T. Ray financial harm as Jerry is a Realtor and the truth is paramount in the real estate profession.” Later, during a deposition taken on March 12, 2015, Ronquillo testified that he did not read the affidavit fully before signing it, saying, “I probably didn’t read the whole doggone thing, which is my fault,” and did not recognize the document until his signature was pointed out. 5 During his deposition, Ronquillo contradicted many of the statements in his affidavit. He testified he believed that Connell’s statement about Ray stealing gates was a joke, not defamation. Ronquillo testified that he conveyed Connell’s story only to Ray and that he did not believe the accusation could cause Ray financial harm because he had not told anyone else. ¶7 Ray claimed punitive damages, general damages based on a lost real estate commission, costs, attorney fees and expenses for defamation. Ray claimed that he lost a real estate commission because Donald Janich, a ranch-owner, heard Connell’s comments while watching a Billings City Council meeting on television and, afterwards, decided not to allow Ray to list his ranch. Donald Janich’s ranch later sold, which, according to Ray’s third amended complaint, resulted in damages totaling “$82,500.00 in lost commission from a real estate transaction less any costs of split commission with Donald R. Janich.” Ray included an additional claim in his second amended complaint: Ray claimed that Connell’s same allegedly-defamatory conduct entitled him to an unidentified amount of damages for tortious interference with business interests. Ray included an additional claim in his third amended complaint for $400,000 in general damages for mental anguish and suffering. ¶8 On August 10, 2015, after considering the briefs, pleadings, and papers on file and arguments of counsel, the District Court granted Connell’s two motions for partial summary judgment and renewed motion for summary judgment. The District Court held that: 1) the absolute privilege of § 27-1-804(2), MCA, applied to the statements Connell made at the Billings City Council meetings and protected them from constituting 6 defamation; 2) Connell’s statement to Ronquillo was not defamation because, according to Ronquillo’s deposition, which is controlling, it was a joke; and 3) Connell was entitled to summary judgment on Ray’s claims of tortious interference and mental anguish damages because the underlying conduct for those claims was the same conduct that the Court determined was not defamatory and entitled Connell to summary judgment. Ray appeals. STANDARD OF REVIEW ¶9 We review summary judgment orders de novo, performing the same analysis as the district court. Lorang v. Fortis Ins. Co., 2008 MT 252, ¶ 36, 345 Mont. 12, 192 P.3d 186 (citation omitted). Summary judgment is appropriate where “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). DISCUSSION ¶10 1. Did the District Court err in granting Connell summary judgment on Ray’s defamation claim based on a conversation between Connell and Ronquillo? ¶11 Ray claims Connell defamed him by communicating an accusation of theft to Ronquillo. Defamation is effected by libel or slander. Section 27-1-801, MCA. “Libel is a false and unprivileged publication by 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. “Slander is a false and unprivileged publication 7 other than libel that: 1) charges any person with crime . . .” or “3) tends directly to injure a person in respect to the person’s . . . business, either by imputing to the person general disqualification in those respects that the office or other occupation peculiarly requires or by imputing something with reference to the person’s office, profession, trade, or business that has a natural tendency to lessen its profit . . . .” Section 27-1-803, MCA. For defamatory words to be actionable, they “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.” McConkey v. Flathead Elec. Coop., 2005 MT 334, ¶ 45, 330 Mont. 48, 125 P.3d 1121 (citing Wainman v. Bowler, 176 Mont. 91, 96, 576 P.2d 268, 271 (1978)). ¶12 Here, Connell’s statement to Ronquillo accused Ray of a crime of stealing gates. Ronquillo’s affidavit attested Connell’s statement was defamatory. However, Ronquillo contradicted his affidavit statements during his deposition and said he thought Connell’s accusation that Ray stole gates was a joke. A joke is not defamatory and, therefore, not actionable. Although it may have been unpleasant, annoying, or irksome, the joke about Ray stealing gates did not disgrace or degrade Ray or cause him to be shunned or avoided and is not sufficient. ¶13 Ray argues that the discrepancy between Ronquillo’s affidavit and deposition testimony raised a genuine issue of material fact—whether Connell’s accusation was a joke or sincere—which precluded the District Court from granting summary judgment. 8 However, “[w]hen statements in an affidavit submitted pursuant to Rule 56(e), M.R.Civ.P., are repudiated in a later deposition, the affidavit statements do not raise a genuine issue of material fact.” Meadow Lake Estates Homeowners Ass’n v. Shoemaker, 2008 MT 41, ¶ 46, 341 Mont. 345, 178 P.3d 81 (quoting Herron v. Columbus Hosp., 284 Mont. 190, 195, 943 P.2d 1272, 1275 (1997) (In Herron, Herron sued Columbus Hospital after being injured by an automatic door entering a building Columbus Hospital owned. To oppose Columbus Hospital’s motion for summary judgment, Herron submitted an affidavit of Lyle Skinner, a Columbus Hospital maintenance employee. Lyle Skinner was later deposed and contradicted several of the statements he attested to in his affidavit. In Meadow Lake Estates, we applied the same principle outlined in Herron—a witness’s later deposition controls where it, at least in part, repudiates statements made in the witness’s earlier affidavit—to a party to the litigation where the party’s later deposition contradicted an earlier attested affidavit.). ¶14 Ronquillo signed his affidavit on April 24, 2014, and repudiated those statements in a deposition taken on March 12, 2015. Ronquillo’s later deposition testimony—that he believed Connell was joking when he told Ronquillo that Ray stole gates—controls. Ronquillo’s deposition testimony clearly contradicts his earlier affidavit, which he admitted he signed without thoroughly reviewing and did not initially recognize; thus the contradictory statements do not raise a genuine issue of material fact. Connell was entitled to judgment as a matter of law. 9 ¶15 2. Did the District Court err in granting Connell summary judgment on Ray’s defamation claim based on comments Connell made at two Billings City Council meetings? ¶16 A privileged publication is one made in any “official proceeding authorized by law.” Section 27-1-804(2), MCA. The City of Billings Charter creates “a City council of the City of Billings composed of ten (10) Councilmembers.” Section 3.02. The Billings Municipal Code provides that “[t]he city council shall hold a regular meeting for the transaction of city business on the second and fourth Mondays in each month” and that “[t]he mayor or any three (3) councilmembers may request” a special meeting. Section 2-211. A “regular meeting of the Great Falls city commission” constitutes an official proceeding authorized by law. Skinner v. Pistoria, 194 Mont. 257, 264, 633 P.2d 672, 676 (1981). Here, applying the City of Billings Charter, its Municipal Code, and Skinner the District Court held “a meeting or special meeting of the Billings City Council is also such an official proceeding.” The District Court was correct in concluding that Billings City Council meetings, both regularly scheduled and specially called, constitute official proceedings authorized by law as contemplated in § 27-1-804(2), MCA, and communications during those meetings are privileged. ¶17 “One requisite of a defamation action is that the communication must be unprivileged. A privileged communication is one which, except for the circumstances under which it is made, may be defamatory and actionable.” Skinner, 194 Mont. at 261, 633 P.2d at 675 (citation omitted). The privilege created by § 27-1-804(2), MCA, is an absolute privilege against liability for defamation and is therefore unaffected by the presence of malice. Skinner, 194 Mont. at 263, 633 P.2d at 675-76 (citations omitted). 10 The privilege covers critical expressions made at official meetings authorized by law that are responsible for the interest being expressed. Skinner, 194 Mont. at 263, 633 P.2d at 676. ¶18 Ray claims Connell defamed him during two Billings City Council meetings by maliciously accusing Ray of not telling the truth. This, he argues, slandered him and negatively impacted Ray’s business as a real estate agent. The meeting on October 7, 2013, was a Billings City Council Work Session and the meeting on January 6, 2014, was a Billings City Council Special Meeting. We agree with the District Court’s conclusion that both meetings constituted official proceedings authorized by law. The Billings City Council is responsible for transacting city business and the City of Billings adopted the EBURD Code, which was a topic at both meetings. We agree with the District Court’s conclusion that the Billings City Council is responsible for interests related to the EBURD Code. ¶19 At both meetings, Connell accused Ray of criticizing the EBURD Code provisions he disliked by conveying information to the Council that was “not factual,” “not true,” or “simply not true.” He accused Ray of having inappropriate, ex-parte communications with the Board of Adjustments members and having “turned him in” to the Board of Realty for malpractice. Connell also referred to himself as public enemy number one to Ray’s petition. These comments constitute critical expressions about Ray and his petition to rescind or modify the EBURD code and may have been arguably defamatory and actionable. However, because they were communicated to the body responsible for the interest being expressed at an official proceeding authorized by law, they were absolutely 11 privileged under § 27-1-804(2), MCA. Whether the comments were malicious is irrelevant because the privilege covers both malicious critical expressions and non-malicious critical expressions. Additionally, Ray seems to contend that Connell’s status, as either a public figure or private figure, has bearing on his claim. However, we conclude that the absolute privilege of § 27-1-804(2), MCA, draws no distinction based upon the speaker’s status, and, therefore, Connell’s status is irrelevant. The District Court properly granted Connell summary judgment on Ray’s defamation claim based on Connell’s comments made at two Billings City Council meetings because the comments were absolutely privileged under § 27-1-804(2), MCA. Connell was entitled to judgment as a matter of law. ¶20 3. Did the District Court err in granting Connell summary judgment on Ray’s claims of tortious interference with business interests and general damages for mental anguish and suffering based on Connell’s alleged defamation of Ray’s character? ¶21 Ray argues Connell’s statements to Ronquillo and comments at the Billings City Council meetings hurt his business as a real estate agent and will continue to do so. Ray argues Connell’s statements also impacted his reputation, life, and livelihood, causing him mental anguish and suffering. Ray inserted these additional claims in his second and third amended complaints. As support for these additional claims, Ray incorporated by reference all earlier paragraphs of the complaints. The District Court concluded Connell was entitled to summary judgment on these additional claims because it had already granted summary judgment on Ray’s defamation claims and the additional claims failed to allege “any additional conduct of Connell upon which to impose liability under 12 Montana law.” We conclude, likewise, that Ray’s additional claims rely on the same underlying conduct that we have already concluded is not actionable. Therefore, no genuine issue of material fact existed and the District Court properly concluded Connell was entitled to judgment as a matter of law. CONCLUSION ¶22 The District Court’s order granting Connell’s two motions for partial summary judgment and renewed motion for summary judgment is affirmed. /S/ LAURIE McKINNON We Concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT /S/ BETH BAKER

April 26, 2016

6ab5f953-9984-4b7e-934e-969068dcf27c

Fenwick v. State

2016 MT 80

DA 15-0252

Montana

Montana Supreme Court

DA 15-0252 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 80 JULIA FENWICK, Plaintiff and Appellant, v. STATE OF MONTANA, DEPARTMENT OF MILITARY AFFAIRS, DISASTER AND EMERGENCY SERVICES DIVISION, Defendants and Appellees. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark Cause No. BDV-2012-268 Honorable Jeffrey M. Sherlock, Presiding Judge COUNSEL OF RECORD: For Appellant: Palmer A. Hoovestal, Hoovestal Law Firm, PLLC; Helena, Montana For Appellees: Trevor L. Uffelman, Attorney at Law; Helena, Montana Curt Drake, Patricia H. Klanke, Drake Law Firm; Helena, Montana Submitted on Briefs: February 17, 2016 Decided: April 5, 2016 Filed: __________________________________________ Clerk April 5 2016 Case Number: DA 15-0252 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 Julia Fenwick (Fenwick) appeals from an order entered by the First Judicial District Court, Lewis and Clark County, granting summary judgment to the State of Montana, Department of Military Affairs and Emergency Services Division (Department), on several of her claims related to the severance of her employment with the Department. ¶2 We address the following issues, and affirm: 1. Did the District Court err by holding the Severance Agreement was lawful? 2. Did the District Court err by holding that Fenwick did not enter the Severance Agreement under duress, undue influence, menace, fraud, or mistake? 3. Did the District Court err by holding the undisputed facts establish the Department’s consideration for the Severance Agreement did not fail? 4. Did the District Court err by dismissing Fenwick’s constitutional claims? 5. As argued by the Department, did the District Court err by denying summary judgment to the Department on Fenwick’s claims for Intentional Interference with a Business Relationship and Breach of the Covenant of Good Faith and Fair Dealing? PROCEDURAL AND FACTUAL BACKGROUND ¶3 In April 2011, Fenwick and the Department executed a voluntary severance agreement (Severance Agreement) wherein the Department agreed to lay off Fenwick, as opposed to terminating her for cause, in exchange for Fenwick releasing any claims she had against the Department. ¶4 As consideration for Fenwick’s release of claims, the Severance Agreement obligated the Department to do several things. First, the Department agreed to eliminate 3 Fenwick’s position, the Office of Homeland Security Grants Manager, pursuant to the Reduction in Force Policy (RIF Policy) set forth in the Montana Operations Manual.1 Second, the Department agreed to allow Fenwick to participate in the job registry for two years following the lay-off date. And third, the Department agreed to provide Fenwick with neutral employment recommendations. The Department also provided Fenwick other benefits, including three months’ pay plus $3,500, healthcare, and access to training. ¶5 As consideration for the Department laying off Fenwick instead of discharging her, Fenwick was obligated to waive all claims known or unknown that she may have against the Department and waive all benefits under the RIF Policy that were not specifically mentioned by the Severance Agreement. ¶6 After execution of the Severance Agreement, for which both parties were represented by counsel, the Department eliminated the position of Office of Homeland Security Grants Manager. Seven months later, the Department created a new position, the Disaster and Emergency Services Grants Program Manager. Fenwick applied for this position through the job registry, but was not hired for the position. ¶7 Fenwick thereafter started an independent consulting business and contracted with Butte-Silver Bow County to provide grants administration services. The Department allegedly contacted Butte-Silver Bow County officials and stated that Fenwick should not be permitted to contact Department coordinators in the course of her work for the 1 The Montana Operations Manual contains policies, procedures, and standards applicable to the internal operations of the Montana state government. http://mom.mt.gov/. 4 County. At no time did the Department receive a request for an employment recommendation from any person or organization. ¶8 Fenwick filed this action, alleging the Severance Agreement should be rescinded because (1) it was unlawful under a provision in the RIF Policy that barred the use of a reduction-in-force layoff in lieu of termination; (2) the Department’s consideration failed because it had not actually eliminated her position; (3) the Department’s consideration failed because it did not give her preferential treatment pursuant to the RIF Policy when considering her application for the Disaster and Emergency Services Grants Program Manager position; and (4) the Department’s consideration failed because the Department’s communications with Butte-Silver Bow County constituted negative employment recommendations. In addition, Fenwick alleged wrongful discharge, intentional interference with a business relationship, breach of the covenant of good faith and fair dealing, and constitutional tort claims. The District Court dismissed Fenwick’s constitutional tort claims, holding the claims were not recognized as valid causes of action under Montana law or were otherwise not well pleaded. ¶9 The parties filed cross-motions on summary judgment. The District Court held as a matter of law that the Severance Agreement could not be rescinded because (1) the Severance Agreement was not unlawful because the RIF Policy was not law; (2) the Department’s consideration did not fail because it had eliminated Fenwick’s position; (3) the Department’s consideration did not fail because the Severance Agreement expressly stated Fenwick would not be given preferential treatment when applying to jobs through the job registry; and (4) the Department’s consideration did not fail because its 5 communications with Butte-Silver Bow County, while actionable, did not constitute an employment recommendation. The District Court further held that genuine issues of material fact precluded summary judgment on Fenwick’s claims for intentional interference with a business relationship and the breach of the covenant of good faith and fair dealing, and that they would be tried. ¶10 Fenwick requested certification of the District Court’s judgment and dismissal orders as final for purposes of appeal pursuant to M. R. Civ. P. 54(b). The District Court considered the factors set out in Weinstein v. University of Montana, 271 Mont. 435, 898 P.2d 101 (1995), and granted certification. This Court entered an order determining the certification order complied with the Montana Rules of Appellate Procedure and that the appeal may proceed. STANDARD OF REVIEW ¶11 The construction and interpretation of a contract is a question of law that is reviewed for correctness. Schwend v. Schwend, 1999 MT 194, ¶ 36, 295 Mont. 384, 983 P.2d 988. ¶12 An order on summary judgment is reviewed de novo, applying the same criteria as the district court. Lorang v. Fortis Ins. Co., 2008 MT 252, ¶ 36, 345 Mont. 12, 192 P.3d 186. Under M. R. Civ. P. 56(c), summary judgment is appropriate where there is a complete absence of genuine issues of material fact, and the moving party is entitled to judgment as a matter of law. Lorang, ¶ 37. All reasonable inferences from the evidence are drawn in favor of the non-moving party. Redies v. Attys. Liab. Prot. Soc’y, 2007 MT 9, ¶ 26, 335 Mont. 233, 150 P.3d 930. 6 ¶13 A district court’s ruling on a motion to dismiss under M. R. Civ. P. 12(b)(6) is reviewed de novo. Meagher v. Butte-Silver Bow City-County, 2007 MT 129, ¶ 13, 337 Mont. 339, 160 P.3d 552. A motion to dismiss under Rule 12(b)(6) has the effect of admitting all well-pleaded allegations in the complaint. Meagher, ¶ 13. In considering the motion, the complaint is construed in the light most favorable to the plaintiff, and all allegations of fact contained therein are taken as true. Meagher, ¶ 13. DISCUSSION ¶14 1. Did the District Court err by holding the Severance Agreement was lawful? ¶15 Fenwick argues the Severance Agreement was unlawful because it violated a provision of the RIF Policy. The Department argues a violation of the RIF Policy does not render the Severance Agreement unlawful because the RIF Policy is not law. We agree with the Department. ¶16 An illegal contract or contract provision will not be enforced. Mont. Petroleum Tank Release Comp. Bd. v. Crumleys, Inc., 2008 MT 2, ¶ 56, 341 Mont. 33, 174 P.3d 948. A contract is unlawful if it is “(1) contrary to an express provision of law; (2) contrary to the policy of express law, though not expressly prohibited; or (3) otherwise contrary to good morals.” Section 28-2-701, MCA. ¶17 The Montana Administrative Procedure Act defines a “rule” as “each agency regulation, standard, or statement of general applicability that implements, interprets, or prescribes law or policy or describes the organization, procedures, or practice requirements of an agency. The term includes the amendment or repeal of a prior rule.” Section 2-4-102(11)(a), MCA. Excluded from MAPA’s definition of “rule” are 7 “statements concerning only the internal management of an agency or state government and not affecting private rights or procedures available to the public . . . .” Section 2-4-102(11)(b)(i), MCA. ¶18 Prior to 2010, an administrative rule provided “Lay-off shall not be used as an alternative to discharging an employee for cause or disciplinary purposes.” ARM 2.21.5007(15) (1982). In March 2010—prior to the actions giving rise to this proceeding—the Department of Administration formally repealed ARM 2.21.5007, believing ARM 2.21.5007 was not appropriately considered a rule because it addressed “statements concerning only the internal management of an agency” and was therefore excluded from the definition of “rule” under § 2-4-102(11)(b)(i), MCA. MAR Notice No. 2-21-417; 2010 Mont. Admin. Reg. at 254. Included in the proposal to repeal ARM 2.21.5007 was a statement that such a policy was more appropriately included in the Montana Operations Manual. MAR Notice No. 2-21-417; 2010 Mont. Admin. Reg. at 254. ¶19 Fenwick argues the RIF Policy is an express law because the RIF Policy constituted an “amendment or repeal of a prior rule.” Essentially, Fenwick’s stance is that the Department of Administration’s statement—that the RIF Policy was more appropriately included in the Montana Operations Manual—bestowed legal rule status on the RIF Policy because the statement was included in the proposal to repeal ARM 2.21.5007. This argument is unpersuasive. ¶20 The definition of “rule” encompasses “the amendment or repeal of a prior rule” so that state agencies wishing to amend or repeal a rule must satisfy rulemaking 8 requirements, such as giving public notice of the change, receiving written comments, and conducting a noticed public hearing on the proposal. Section 2-4-302, MCA. But the proposal itself carries no force of law until it has been validly adopted. Section 2-4-305(7), MCA; see also State v. Vainio, 2001 MT 220, ¶ 27, 306 Mont. 439, 35 P.3d 948. The RIF Policy clearly was never adopted as an amendment to ARM 2.21.5007. The Department of Administration’s proposal expressly stated that ARM 2.21.5007 was being repealed, not amended, for the reason that ARM 2.21.5007 should not be an administrative rule. 2010 Mont. Admin. Reg. at 254. It would be curious indeed for the Department of Administration to repeal an administrative rule that it believed should not be an administrative rule, only to adopt by reference to another policy a like-for-like replacement that has the legal effect of an administrative rule. The Department of Administration’s Notice of Repeal stated only that “[t]he Department of Administration has repealed . . . [ARM] 2.21.5007 . . . .” 2010 Mont. Admin. Reg. at 908. It makes no mention of the RIF Policy or an amendment to ARM 2.21.5007. Finally, perhaps most telling of all, the RIF Policy is located in the Montana Operations Manual, not the Administrative Rules of Montana. The Severance Agreement is therefore not unlawful under §§ 28-2-701(1), (2), MCA, because the RIF Policy is neither express law nor the policy of an express law. ¶21 Fenwick also argues the Severance Agreement should be held unlawful under § 28-2-701(3), MCA, because it is contrary to good morals. However, Fenwick cites no authority for this argument and fails to explain how a violation of the RIF Policy is contrary to good morals, other than citing the violation of the RIF Policy itself. We have 9 previously held a contract to dismiss a criminal proceeding for the private gain of a prosecutor to be contrary to good morals, Portland Cattle Loan Co. v. Featherly, 74 Mont. 531, 548, 241 P. 322, 328 (1925), but we see no meaningful analogy to draw here. We hold the Severance Agreement is not unlawful under § 28-2-701(3), MCA. ¶22 2. Did the District Court err by holding that Fenwick did not enter the Severance Agreement under duress, undue influence, menace, fraud, or mistake? ¶23 Citing § 28-2-1711(1), MCA, Fenwick argues the Severance Agreement should be rescinded because her consent was given by mistake or obtained through duress, menace, fraud, and undue influence by the Department. However, Fenwick raises these allegations for the first time on appeal. Accordingly, these issues are not properly preserved for our review and we decline to address them. In re Transfer Terr. from Poplar Elem. Sch. Dist. No. 9 to Froid Elem. Sch. Dist. No. 65, 2015 MT 278, ¶ 18, 381 Mont. 145, 364 P.3d 1222 (“Under the common law, it is well settled that issues raised for the first time on appeal will not be reviewed.”). ¶24 3. Did the District Court err by holding the undisputed facts establish the Department’s consideration did not fail? ¶25 Fenwick argues the consideration she was to receive pursuant to the Severance Agreement failed because the Department did not eliminate her grants manager position, did not rehire her to fill the newly-created position, did not reinstate her to her previous position, and did not give her neutral employment recommendations. The Department replies that Fenwick received all the consideration she was entitled to under the Severance Agreement. We agree with the Department. 10 ¶26 In addition to the reasons set forth in § 28-2-1711(1), MCA, a contract may be rescinded: (2) if, through the fault of the party as to whom the other party rescinds, the consideration for the obligation of the party at fault fails in whole or in part; (3) if the consideration becomes entirely void from any cause; (4) if the consideration, before it is rendered to the rescinding party, fails in a material respect from any cause; or (5) if all the other parties consent. Sections 28-2-1711(2-5), MCA.2 A party seeking to rescind a contract for at-fault failure of consideration must prove three things: (1) the consideration due the rescinding party failed, in whole or in part; (2) the failure of consideration due the rescinding party was the fault of the other party; and (3) the failure of consideration, whether in whole or in part, was material to the contract. Norwood v. Serv. Distrib., Inc., 2000 MT 4, ¶¶ 33-35, 297 Mont. 473, 994 P.2d 25. Where, as here, the allegation is that consideration failed in part, materiality is a closer question. The partial failure must touch the “fundamental purpose of the contract” and defeat the “object of the parties in making the contract.” 2 The Legislature may have unintentionally altered the meaning of subsection (2), and its applicability to this case, by enactment of House Bill 37 in the 2009 Session. The purpose of that bill was to “gender neutraliz[e]” the Montana Code Annotated. 2009 Mont. Laws 295. Prior to this amendment, subsection (2) read: “if, through the fault of the party as to whom he rescinds, the consideration for his obligation fails in whole or in part . . . .” Section 28-2-1711(2) (2009). We construed this language to refer to the failure of consideration to be received by the rescinding party. See Norwood v. Serv. Distrib., Inc., 2000 MT 4, ¶ 33, 297 Mont. 473, 994 P.2d 25. As subsection (2) now reads, it appears to refer to the consideration to be received by the at-fault party. As such, it seemingly offers Fenwick no basis to rescind the contract. However, because the basis for our holding is that neither party’s consideration failed, this decision does not contemplate or otherwise address the apparently unintentional alteration caused by the gender-neutral amendment. 11 Norwood, ¶ 34 (citing Flaig v. Gramm, 1999 MT 181, ¶ 25, 295 Mont. 297, 983 P.2d 396). ¶27 The undisputed facts establish the consideration due Fenwick did not fail. Fenwick first argues consideration failed because the Department did not eliminate her position as required by the Severance Agreement. The contract provided “[T]he Department agrees to eliminate the Office of Homeland Security Grants manager position.” It is uncontested that the Department eliminated Fenwick’s position of Homeland Security Grants Manager after Fenwick was laid off. Seven months later, the Department created a new position, the Disaster and Emergency Services Grants Program Manager. The two positions, although similar, were not the same. The latter was created and funded entirely by the Legislature, while the former was not created by the Department and was funded by temporary grants. Creation of the new position by the Legislature did not constitute a failure of consideration under the Severance Agreement. ¶28 Fenwick next argues consideration failed because she was to be given preference for any job she applied for through the job registry. The Severance Agreement provided, “Ms. Fenwick is also entitled to participate on the job registry for two years from the lay-off date.” It is undisputed Fenwick was allowed to participate in the job registry, through which she applied for the new grants manager position. But the Severance Agreement did not provide that Fenwick would be given preference for positions in the registry for which she applied. In fact, the Severance Agreement stated just the opposite: “[p]articipation in the job registry does not provide any preference to the job applicant.” 12 It was therefore not a failure of consideration when the Department did not hire or give Fenwick preference for the new position. ¶29 Fenwick also argues the Department’s consideration failed when she was not reinstated as the new grants manager pursuant to an RIF Policy requiring managers to offer reinstatement if the “same position or a position in the same occupation” becomes available within one year of the employee’s lay-off date. However, the reinstatement provision of the RIF Policy was never included as part of the Department’s consideration. The Severance Agreement provided that Fenwick waived all “provisions of the RIF Policy not specifically mentioned in this Agreement.” It was therefore not a failure of consideration when Fenwick was not reinstated to the new grants manager position pursuant to the RIF Policy. ¶30 Finally, Fenwick argues the Department’s consideration failed because the Department did not provide her with neutral employment recommendations. The Severance Agreement provided: The Department agrees to give Ms. Fenwick a neutral employment recommendation to all employers inside and outside of State government. Such a recommendation will include verification of dates of employment, salary and position held. Ms. Fenwick must direct all reference inquiries to Mr. Kent or the Department’s Human Resources manager. ¶31 Fenwick argues the Department’s communications with Butte-Silver Bow County after she initiated private contract services for the County constituted a negative employment recommendation. However, with regard to employment recommendations, the Severance Agreement specifically contemplated only reference inquiries. If Fenwick directed a reference inquiry to the Department, it was required to verify Fenwick’s 13 employment dates, salary, and position held. The parties do not dispute the fact that the Department never received a reference inquiry. Therefore, any negative comments made by the Department to Butte-Silver Bow County cannot be construed as an employment recommendation. It should be noted that, although the Department’s comments did not constitute a failure of consideration, the District Court held that the comments were actionable by way of Fenwick’s Intentional Interference with a Business Relationship claim. ¶32 Because the undisputed facts establish the Department’s consideration did not fail, the District Court correctly ruled that the contract could not be rescinded as a matter of law. ¶33 4. Did the District Court err by dismissing Fenwick’s constitutional claims? ¶34 Fenwick alleged the Department’s actions violated her rights under Article II, Sections 3, 4, and 17 of the Montana Constitution by depriving her of the right to acquire and possess property and conspiring to deprive her of due process and equal protection. Fenwick also alleged the Department’s conduct constituted an unconstitutional custom and policy for which monetary relief should be available under Monell v. Dep’t of Soc. Servs. of City of New York, 436 U.S. 658 (1978). ¶35 Our precedent mandates “no civil case shall be reversed by reason of error which would have no significant impact upon the result; if there is no showing of substantial injustice, the error is harmless.” Newbauer v. Hinebauch, 1998 MT 115, ¶ 20, 288 Mont. 482, 958 P.2d 705; see also In re Mental Health of O.R.B., 2008 MT 301, ¶ 30, 345 Mont. 516, 191 P.3d 482 (a procedural error that results in no “substantial prejudice” is 14 deemed harmless or de minimus). We do not determine whether the District Court erroneously dismissed Fenwick’s constitutional claims because, even if it did, such an error was harmless given our holding that the Severance Agreement may not be rescinded, and consequently, such claims were waived under the Severance Agreement. ¶36 5. As argued by the Department, did the District Court err by denying summary judgment to the Department on Fenwick’s claims for Intentional Interference with a Business Relationship and Breach of the Covenant of Good Faith and Fair Dealing? ¶37 The Department argues the District Court erred when it held genuine issues of material fact precluded summary judgment on Fenwick’s claims for Intentional Interference with a Business Relationship and Breach of the Covenant of Good Faith and Fair Dealing. The Department did not file a cross-appeal on these issues, and therefore they are not properly before us for review. 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. ¶38 We affirm the District Court on the issues before us and remand with instructions to proceed on Fenwick’s remaining claims. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ MICHAEL E WHEAT /S/ JAMES JEREMIAH SHEA

April 5, 2016

3483273e-4295-49aa-8403-60a811276322

Draggin’ Y Cattle Co. v. Addink

2016 MT 98

DA 15-0354

Montana

Montana Supreme Court

DA 15-0354 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 98 _________________ DRAGGIN’ Y CATTLE COMPANY, INC.; and ROGER and CARRIE PETERS, Plaintiffs, Appellees, and Cross-Appellants, v. LARRY ADDINK; and JUNKERMIER, CLARK, CAMPANELLA, STEVENS, P.C, Defendants and Appellees, and NEW YORK MARINE AND GENERAL INSURANCE COMPANY, Intervenor and Appellant. O P I N I O N A N D O R D E R _________________ ¶1 New York Marine and General Insurance Company appeals the order of the Eighteenth Judicial District Court, Gallatin County, denying its motion for discovery regarding the reasonableness of the stipulated settlement between Roger and Carrie Peters and Draggin’ Y Cattle Company, Inc., (collectively Peters) and Junkermier, Clark, Campanella, Stevens, P.C., and Larry Addink (collectively Junkermier). Peters cross-appeal the District Court’s dismissal of their cross-claim seeking a declaration that New York Marine is liable to pay the stipulated settlement. While the parties raise multiple issues on appeal, we restate the dispositive issue as follows: May 3 2016 Case Number: DA 15-0354 2 Whether New York Marine timely raised its disqualification claim, and if so, whether the claim should be considered on the merits because the judge did not disclose circumstances that could potentially cause the judge’s impartiality to be reasonably questioned. ¶2 We remand for further proceedings. PROCEDURAL AND FACTUAL BACKGROUND ¶3 This matter has been before this Court on a previous occasion. Draggin’ Y Cattle Co. v. Addink, 2013 MT 319, 372 Mont. 334, 312 P.3d 451 (hereafter Draggin’ Y I). Because the underlying suit’s background facts are delineated in Draggin’ Y I, we restate the facts only briefly. ¶4 In January 2011, Peters filed a complaint against Junkermier alleging multiple counts stemming from tax services Junkermier performed for Peters. Junkermier tendered the defense to New York Marine, which insured Junkermier under a professional liability policy. Thereafter, New York Marine defended Junkermier subject to a reservation of rights. ¶5 Junkermier eventually moved for summary judgment in the underlying action on the ground that Peters’s claims were barred by the statute of limitations. The District Court granted Junkermier’s motion for summary judgment in December 2012 and Peters appealed. In Draggin’ Y I, we concluded that Peters’s claims were timely filed. Draggin’ Y I, ¶ 51. Accordingly, we reversed the District Court’s order granting Junkermier summary judgment and remanded for further proceedings. Draggin’ Y I, ¶ 51. 3 ¶6 On remand, Peters filed a motion for substitution of district court judge pursuant to § 3-1-804(12), MCA. Judge Huss assumed jurisdiction in December 2013. Litigation continued for nearly a year and then on November 13, 2014, Peters and Junkermier entered into a settlement agreement and stipulation for entry of judgment without New York Marine’s participation. Shortly thereafter, the District Court issued an order scheduling a hearing on the stipulated settlement’s reasonableness.1 ¶7 Prior to the hearing, New York Marine filed a motion to intervene and request for stay, discovery, and status conference. On December 15, 2014, the District Court granted New York Marine’s motion to intervene but denied its motions for additional discovery and to stay the reasonableness hearing. The court held the reasonableness hearing that same day. At the hearing, Peters filed a cross-claim seeking a declaration that New York Marine was liable to pay the stipulated settlement under the insurance contract. ¶8 On March 5, 2015, the District Court entered findings of fact, conclusions of law, and an order finding that the stipulated settlement amount was reasonable. On May 6, 2015, the court entered judgment in the amount of $10,000,000 in Peters’s favor and further ordered that Junkermier was not liable for the stipulated settlement. The court dismissed Peters’s cross-claims on June 5, 2015, on the ground that the federal district court retained jurisdiction over all claims filed by New York Marine in the federal court. 1 On the same day, New York Marine filed a complaint against Junkermier for declaratory relief and breach of contract in the United States District Court for the District of Montana, Great Falls Division. That case remains pending. 4 New York Marine appeals the District Court’s order denying its motion for discovery on the reasonableness of the settlement. Peters cross-appeal the June 5 order of dismissal. ¶9 On appeal, New York Marine asserts for the first time that Judge Huss erred by not disclosing an apparent conflict of interest. New York Marine claims that the alleged conflict stems from a complaint that a former court reporter filed against Judge Huss in February 2014. In October 2014—during the pendency of this case—Judge Huss individually entered into a stipulation and confession of judgment. The Office of the Court Administrator (OCA) had been paying for Judge Huss’s defense and Judge Huss allegedly entered into the stipulated settlement without the OCA’s participation or knowledge. On November 17, 2014—four days after Peters and Junkermier entered into their stipulated settlement—the OCA filed a complaint against Judge Huss in a Helena district court seeking a declaration that it had no duty to defend or indemnify him. In its complaint, the OCA specifically contested the stipulated settlement amount’s reasonableness. Judge Huss did not disclose the stipulated settlement or his dispute with the OCA to the parties in the case at issue. Judge Huss resigned effective January 1, 2016. STANDARD OF REVIEW ¶10 We recently adopted a standard of review for analyzing judicial disqualification under the Montana Code of Judicial Conduct. State v. Dunsmore, 2015 MT 108, ¶ 10, 378 Mont. 514, 347 P.2d 1220. Our “inquiry into disqualification requires an objective examination of the circumstances surrounding” potential judicial disqualification and “an 5 accurate interpretation” of the Montana Code of Judicial Conduct. Dunsmore, ¶ 10. Accordingly, we review judicial disqualification questions de novo, “determining whether the lower court’s decision not to recuse was correct under the Montana Code of Judicial Conduct.” Dunsmore, ¶ 10. DISCUSSION ¶11 Whether New York Marine timely raised its disqualification claim, and if so, whether the claim should be considered on the merits because the judge did not disclose circumstances that could potentially cause the judge’s impartiality to be reasonably questioned. ¶12 On appeal, New York Marine asserts that Judge Huss’s potential conflict of interest raises reasonable questions regarding his impartiality. New York Marine contends that the “undeniable parallels between Judge Huss’ interests in the litigation he was (and still is) defending in his personal capacity and [Peters’s] interests in not permitting [New York Marine] to meaningfully challenge the stipulated settlement” create “an apparent and significant conflict of interest.” As such, New York Marine claims that Judge Huss was required, at a minimum, to disclose his apparent conflict of interest to the parties under the Montana Code of Judicial Conduct. New York Marine accordingly asserts that Judge Huss erred by failing to disclose the potential grounds for disqualification. Finally, New York Marine claims that the issue is properly before this Court on appeal because it “only became aware of the facts giving rise to Judge Huss’ potential bias in May 2015, when it discovered that Judge Huss had submitted a letter of resignation (dated April 21, 2015 and effective January 1, 2016) and investigated the circumstances behind that resignation.” 6 ¶13 Peters counter that the issue is not properly before this Court because New York Marine raises it for the first time on appeal. Peters contend that the information regarding the potential conflict of interest is not in the record and that New York Marine may not address additional matters on appeal because it is bound by the record before the District Court. Accordingly, Peters urge this Court to “strike all such material” concerning the potential conflict of interest. They assert further that New York Marine had the opportunity to raise the issue in the District Court because the judgment did not become final until Judge Huss entered the order dismissing Peters’s cross-claims on June 5, 2015—a month after New York Marine claims that it discovered the information on which it bases its disqualification argument. Finally, Peters claim that Judge Huss’s “personal experience” does not require disqualification under the Montana Code of Judicial Conduct. Peters assert that under New York Marine’s “formulation, a judge who is in a car accident should not preside over a car accident case, because there may be an ‘appearance of impropriety’ based on the judge’s personal experience.” ¶14 New York Marine requests that we take judicial notice of a number of exhibits— which are attached to its opening brief on appeal—regarding Judge Huss’s stipulated settlement and the ensuing dispute with the OCA. The OCA’s complaint for declaratory judgment against Judge Huss is a record of a court of this state of which we take judicial notice. M. R. Evid. 202(b)(6), (d). See Farmers Plant Aid, Inc. v. Fedder, 2000 MT 87, ¶¶ 26-27, 299 Mont. 206, 999 P.2d 315 (concluding that M. R. Evid. 202(b)(6) allows a 7 court to take judicial notice of proceedings in other cases). The complaint alleges sufficient facts to inform our inquiry for purposes of this Opinion. ¶15 It is well established that we generally do not consider issues raised for the first time on appeal. Pilgeram v. GreenPoint Mortg. Funding, Inc., 2013 MT 354, ¶ 20, 373 Mont. 1, 313 P.2d 839 (citations omitted). This Court, however, reserves the power to consider an issue raised for the first time on appeal if the issue “affects the substantial rights of a litigant.” Cottrill v. Cottrill Sodding Serv., 229 Mont. 40, 42, 744 P.2d 895, 896 (1987) (quoting In the Matter of N.B., 190 Mont. 319, 323, 620 P.2d 1228, 1231 (1980)) (internal quotations omitted). Accord State v. Carter, 2005 MT 87, ¶ 13, 326 Mont. 427, 114 P.3d 1001; Eastman v. Atl. Richfield Co., 237 Mont. 332, 337, 777 P.2d 862, 865 (1989). “It is axiomatic that a fair trial in a fair tribunal is a basic requirement of due process.” Dunsmore, ¶ 11. This basic requirement “includes the requirement that any judge who is biased or partial with regard to a particular matter or party be disqualified from hearing the case.” Dunsmore, ¶ 11. Furthermore, this Court reserves the right to address issues raised for the first time on appeal “if extenuating circumstances justify the party’s failure to assert [its] legal theory at trial.” Pilgeram, ¶ 21 (citing Marcus Daly Memorial Hosp. Corp. v. Borkoski, 191 Mont. 366, 369, 624 P.2d 997, 999 (1981); Carter, ¶ 13). ¶16 We conclude that New York Marine raises a claim sufficient to invoke its substantial right to due process because of Judge Huss’s potential conflict of interest. We conclude further that the combination of several factors presents extenuating 8 circumstances justifying New York Marine’s failure to raise the issue at trial. These factors include: Judge Huss’s failure to disclose the potential conflict of interest; the nature of that conflict; Judge Huss’s announcement of his resignation; the fact that New York Marine did not discover the potential grounds for disqualification until at least a month after the court’s approval of the settlement; and the additional fact that final judgment was entered shortly after the potential conflict’s initial discovery. Furthermore, New York Marine’s claims present a number of significant issues impacting the judiciary’s integrity that this Court has not yet addressed. We deem it appropriate, under these circumstances, to consider whether the merits of New York Marine’s claim should be reached even though it did not raise the claim until it filed this appeal. ¶17 We turn first to Peters’s contention that New York Marine had sufficient opportunity to raise its disqualification claim before the District Court. Although not stated directly, Peters essentially argue that New York Marine waived its disqualification claim by not raising it prior to Judge Huss’s June 5, 2015 final order. ¶18 “The 2008 Montana Code of Judicial Conduct ‘establishes standards for the ethical conduct of judges and judicial candidates.’” Reichert v. State, 2012 MT 111, ¶ 41, 365 Mont. 92, 278 P.3d 455 (quoting M. C. Jud. Cond., Preamble [3]). Rule 2.12 of the Montana Code of Judicial Conduct and §§ 3-1-803, and -805, MCA, governs judicial disqualification. See Dunsmore, ¶ 12; Reichert, ¶¶ 41-51. Rule 2.12(C) provides that disqualification claims may be waived by the parties unless disqualification is “for bias or prejudice under paragraph (A)(1).” M. C. Jud. Cond., Rule 2.12(C). New York Marine - 9 does not assert that Judge Huss had “a personal bias or prejudice concerning a party or a party’s lawyer, or personal knowledge of facts that are in dispute in the proceeding.” M. C. Jud. Cond., Rule 2.12(A)(1). Rather, New York Marine relies on Rule 2.12(A) to assert that Judge Huss’s “impartiality might reasonably be questioned” based on the nature and timing of his potential conflict of interest. M. C. Jud. Cond., Rule 2.12(A). As such, New York Marine’s disqualification claim is subject to waiver. Dunsmore, ¶¶ 18-19 (concluding that disqualification claims may be waived under Rule 2.12(C) unless the claim is for bias or prejudice under Rule 2.12(A)(1)). ¶19 We recently adopted a “timeliness requirement” to determine whether a party has waived a disqualification claim under Rule 2.12. Dunsmore, ¶ 18. Under this requirement, “A claim for disqualification of a judge must be brought within a reasonable time after the moving party learns the facts forming the basis for a claim that the judge should be disqualified.” Dunsmore, ¶ 20. If a party does not raise its disqualification claim “within a reasonable time” of learning the facts underlying its claim, the claim is waived. Dunsmore, ¶ 20. ¶20 In Dunsmore, the judge in question conducted a sentencing proceeding “a little over a year after charges were filed” against the party asserting a disqualification claim. Dunsmore, ¶ 5. We observed that the party knew of the factual basis for the claim prior to the sentencing proceeding, “but did not raise disqualification.” Dunsmore, ¶ 20. We determined that the party asserting disqualification “made an apparent tactical decision not to seek [the judge’s] disqualification” by waiting until after the sentencing proceeding 10 to assert the disqualification claim. Dunsmore, ¶ 19. Accordingly, we concluded that the party did not bring its disqualification claim within a reasonable time and therefore waived the claim. Dunsmore, ¶ 20. ¶21 The instant case is distinguishable from Dunsmore. Here, New York Marine asserts that it did not learn of the factual basis for its disqualification claim until May 2015. The District Court dismissed Peters’s cross-claims in a June 5, 2015 order. New York Marine, therefore, had about a month to investigate and raise its disqualification claim before Judge Huss’s final order. Furthermore, New York Marine allegedly learned of the potential conflict of interest around the same time that the court entered judgment in Peters’s favor on May 6, 2015, and about two months after the court declared that the stipulated settlement was reasonable. The court, therefore, already had decided the primary issues against New York Marine. Consequently, it appears that New York Marine did not make “an apparent tactical decision not to seek [Judge Huss’s] disqualification” prior to raising the issue on appeal. Dunsmore, ¶ 19. Under these circumstances, we conclude that New York Marine raised its claim for disqualification “within a reasonable time” after learning of the circumstances underlying the claim. Dunsmore, ¶ 20. Accordingly, New York Marine did not waive its disqualification claim. ¶22 We emphasize that the timeliness requirement we adopted in Dunsmore ordinarily will mean that a party must raise a disqualification issue before a district court. Rule 2.12 contemplates that a judge against whom a disqualification claim is asserted should have 11 appropriate opportunity to address the claim in the first instance. M. C. Jud. Cond., Rule 2.12(C) (“A judge subject to disqualification under this Rule . . . may disclose in writing or on the record the basis of the judge’s disqualification and may ask the parties and their lawyers to consider, outside the presence of the judge and court personnel, whether to waive disqualification.”). Disqualification issues, therefore, may be resolved by the court itself. See M. C. Jud. Cond., Rule 2.7 (“A judge shall hear and decide matters assigned to the judge, except when disqualification is required by Rule 2.12 or other law.” (Emphasis added)). A party also may seek disqualification by invoking the procedures of § 3-1-805, MCA. In either case, a party may and ordinarily should raise disqualification issues discovered after an order or final judgment as a motion for relief from judgment in accordance with M. R. Civ. P. 60(b). See Forsmark v. State, 349 N.W.2d 763, 768 (Iowa 1984) (addressing a disqualification claim brought in a petition to vacate judgment under the Iowa Rules of Civil Procedure); Blaisdell v. City of Rochester, 609 A.2d 388, 390 (N.H. 1992) (addressing a disqualification claim brought in a post-final judgment motion to recuse and vacate). Given that we are announcing this principle for the first time here, however, we do not conclude in this case that New York Marine waived its disqualification argument by failing to file a Rule 60(b) motion. Future parties in a similar situation should raise disqualification in accordance with Rule 60(b) in order to preserve the claim for appeal. ¶23 New York Marine claims that Judge Huss, at a minimum, was obligated to disclose information to the parties that he believed might reasonably be relevant to a 12 potential disqualification claim. New York Marine contends further that “it is hard to argue that there was not, at the very least, the appearance of impropriety in Judge Huss’ ruling on [New York Marine’s] motion to intervene and on the reasonableness of the stipulated judgment.” We decline to address whether Rule 2.12 required Judge Huss to disqualify himself. This would have been the issue if Judge Huss had disclosed the potential conflict of interest and refused to recuse himself. Under the current situation, however, New York Marine did not have adequate opportunity to raise its disqualification claim earlier because it did not learn of the potential problem until Judge Huss’s April 2015 letter of resignation became public. We therefore address whether Judge Huss initially should have disclosed the circumstances to the parties. ¶24 The circumstances under which a judge should disclose information that reasonably may cause a party to question the judge’s impartiality present an issue of first impression in Montana. The Preamble to the Montana Code of Judicial Conduct provides, in part, “Judges should maintain the dignity of judicial office at all times, and avoid both impropriety and the appearance of impropriety in their professional and personal lives. They should aspire at all times to conduct that ensures the greatest public confidence in their independence, impartiality, integrity, and competence.” M. C. Jud. Cond., Preamble [2]. In order to maintain the dignity of judicial office, the Code mandates, “A judge shall disqualify himself or herself in any proceeding in which the judge’s impartiality might reasonably be questioned.” M. C. Jud. Cond., Rule 2.12(A). See also Dunsmore, ¶ 11. 13 ¶25 Rule 2.12(C) provides, “A judge subject to disqualification under this Rule . . . may disclose in writing or on the record the basis of the judge’s disqualification.” M. C. Jud. Cond., Rule 2.12(C) (emphasis added). Comment 5 to Rule 2.12 provides further, “A judge should disclose on the record information that the judge believes the parties or their lawyers might reasonably consider relevant to a possible motion for disqualification, even if the judge believes there is no basis for disqualification.” M. C. Jud. Cond., Rule 2.12 cmt. [5] (emphasis added). Rule 2.12(C) and Comment 5 counsel that a judge has a duty to disclose information that may be grounds for disqualification under Rule 2.12 unless the judge voluntarily recuses himself or herself on the basis of that information. This conclusion comports with a judge’s affirmative duty to “disqualify himself or herself in any proceeding in which the judge’s impartiality might reasonably be questioned.” M. C. Jud. Cond., Rule 2.12(A). See also M. C. Jud. Cond., Rule 2.12 cmt. [2] (“A judge’s obligation not to hear or decide matters in which disqualification is required applies regardless of whether a motion to disqualify is filed.”). The Code undoubtedly requires judges to disqualify themselves if a party might reasonably question their impartiality. In order for the party to be informed of the circumstances, a judge should disclose information that is relevant to a possible motion for disqualification. Furthermore, disclosure under Rule 2.12 advances one of the Code’s fundamental purposes—promoting confidence in the judiciary. See M. C. Jud. Cond., Rule 1.2 (“A judge shall act at all times in a manner that promotes public confidence in the independence, integrity, and impartiality of the judiciary, and shall avoid impropriety and 14 the appearance of impropriety.”); M. C. Jud. Cond., Rule 2.2 (“A judge shall uphold and apply the law, and shall perform all duties of judicial office fairly and impartially.”). ¶26 Montana’s Code of Judicial Conduct is based on the ABA Model Code of Judicial Conduct. Dunsmore, ¶ 12. “We adopted the ABA Model Code of Judicial Conduct . . . in part because it would allow us to consider a well-developed body of case law from other jurisdictions.” Dunsmore, ¶ 16 (citing In the Matter of the 2008 Montana Code of Judicial Conduct, No. AF 08-0203 (Mont. Dec. 12, 2008)). A number of jurisdictions that have adopted the Model Code interpret their equivalent to Rule 2.12 as requiring judges to disclose information that may be grounds for disqualification. E.g., Forsmark, 349 N.W.2d at 768 (concluding that a judge has “a duty to disclose” potential disqualifying information and that the “judge’s failure to disclose the information deprived plaintiffs of the opportunity to make a timely request that he disqualify himself on the ground . . . that ‘his impartiality might reasonably be questioned’”); Blaisdell, 609 A.2d at 390 (concluding that it is a “judge’s responsibility to disclose, sua sponte, all information of any potential conflict between [the judge] and the parties or their attorneys when [the judge’s] impartiality might reasonably be questioned”); Adams v. State, 601 S.W.2d 881, 884 (Ark. 1980) (concluding that if Arkansas’s equivalent to Rule 2.12(A) “is applicable, then the judge must disqualify on [the judge’s] own initiative or must comply with [the equivalent to Rule 2.12(C)] on [the judge’s] own initiative”). ¶27 Peters contend that Judge Huss was not required to disclose his personal settlement because requiring disqualification under the circumstances at issue here is 15 equivalent to requiring disqualification from a car accident case of a judge who has been involved personally in a car accident. We are unpersuaded by this contention because the situations are distinguishable. ¶28 The Code defines “impartiality” as an “absence of bias or prejudice in favor of, or against, particular parties or classes of parties, as well as maintenance of an open mind in considering issues that may come before a judge.” M. C. Jud. Cond., Terminology, “Impartiality.” Comment 1 to Rule 2.12 makes clear that “a judge is disqualified whenever the judge’s impartiality might reasonably be questioned.” M. C. Jud. Cond., Rule 2.12 cmt. [1]. ¶29 A judge’s average personal experiences—including being involved in a car accident—undoubtedly shape the judge’s perspective. This does not mean, however, that such experiences necessarily preclude a judge from maintaining an “open mind in considering issues that may come before a judge.” M. C. Jud. Cond., Terminology, “Impartiality.” As such, a judge’s average personal experiences do not generally lead to reasonable questions about the judge’s impartiality and subsequent disqualification under Rule 2.12. Rule 2.7 reinforces this conclusion. It provides, “A judge shall hear and decide matters assigned to the judge, except when disqualification is required by Rule 2.12 or other law.” M. C. Jud. Cond., Rule 2.7. Comment 1 to Rule 2.7 explains: Although there are times when disqualification is necessary to protect the rights of litigants and preserve public confidence in the independence, integrity, and impartiality of the judiciary, judges must be available to decide matters that come before the courts. Unwarranted disqualification may bring public disfavor to the court and to the judge personally. The dignity of the court, the judge’s respect for fulfillment of judicial duties, 16 and a proper concern for the burdens that may be imposed upon the judge’s colleagues require that a judge not use disqualification to avoid cases that present difficult, controversial, or unpopular issues. M. C. Jud. Cond., Rule 2.7 cmt. [1]. If a judge’s average personal experiences required disqualification under Rule 2.12, judges would not be “available to decide matters that come before the courts.” M. C. Jud. Cond., Rule 2.7 cmt. [1]. Such “[u]nwarranted disqualification” is prohibited by the Code. M. C. Jud. Cond., Rule 2.7 cmt [1]. ¶30 The alleged ground for disqualification here, however, is not an average personal experience. Only a few weeks before Peters and Junkermier entered into their stipulated settlement, Judge Huss entered into a stipulated settlement stemming from a lawsuit against him individually. A month before Judge Huss held a hearing to determine the reasonableness of the stipulated settlement at issue here, the OCA—which acted as an insurer by paying for Judge Huss’s defense—filed a complaint in which it claimed that Judge Huss’s personal stipulated settlement was unreasonable. In other words, Judge Huss presided over a hearing in which an insurer questioned the reasonableness of a stipulated settlement while the reasonableness of his own personal stipulated settlement was being questioned by his insurer. The timing and nature of the circumstances reasonably raise concerns regarding Judge Huss’s ability to maintain “an open mind in considering” the reasonableness of the stipulated settlement at issue here. M. C. Jud. Cond., Terminology, “Impartiality.” Accordingly, Judge Huss’s “impartiality might reasonably be questioned” under Rule 2.12(A). We conclude that, under these circumstances, Judge Huss was required to disclose his participation in his personal 17 stipulated settlement to the parties under Rule 2.12(C) because the circumstances might lead to reasonable questions regarding Judge Huss’s impartiality. ¶31 Based on the foregoing analysis, we hold that New York Marine did not waive its disqualification claim. We conclude that the presiding judge should have disclosed circumstances that could potentially cause the judge’s impartiality reasonably to be questioned. We decline to determine on appeal, however, whether Judge Huss should have been disqualified for cause. That is a determination that requires findings of fact and conclusions of law following the presentation of evidence—a matter that may not be addressed in the first instance by an appellate court. Accordingly, we determine that the appropriate course of action is to refer the disqualification issue to a district judge to hear the matter pursuant to § 3-1-805, MCA. An order of assignment will follow. The ruling on the disqualification motion may be appealed by either party. Until that process is concluded, it would be premature to consider whether the District Court’s orders and final judgment should be reversed because of the presiding judge’s failure to recuse himself. We decline to address the other issues raised on appeal at this time. ¶32 IT IS THEREFORE ORDERED that the appeal is DISMISSED without prejudice, pending referral to a district judge for hearing New York Marine’s request for disqualification for cause. An appropriate order of assignment will follow in due course. DATED this 3rd day of May, 2016. /S/ BETH BAKER 18 We concur: /S/ PATRICIA COTTER /S/ JAMES JEREMIAH SHEA /S/ JIM RICE Chief Justice Mike McGrath and Justice Micheal E Wheat recused themselves from participation in this case. Justice Jim Rice, concurring. ¶33 I concur in the Court’s opinion, and because it correctly states the law, I have signed it. This case takes us into new territory and I understand the Court’s desire to carefully lay out the procedures to be followed to address the serious charge of judicial impartiality and the manner in which to raise it and test it, including the entry of findings and conclusions after a hearing, and to remand for such a process to be undertaken. However, on the basis of what is the uncontested material evidence that the presiding judge, at the time he was approving a stipulated judgment over the objections of the insurer in this case, was likewise entering a stipulated judgment in personal litigation at the potential detriment of his insurer, and for which he would similarly seek judicial approval, I would go further. If there were four votes to do so, I would reverse the May 2015 judgment and June 2015 dismissal order entered by the presiding judge and remand 19 this matter for further proceedings before a new judge, who would review and decide New York Marine’s motion for discovery, the stipulated judgment’s reasonableness, and New York Marine’s motion to dismiss Peter’s cross-claims. I see no point in prolonging this litigation to conduct an evidentiary hearing on disqualification, at which the presiding judge, who has now resigned under circumstances related to his stipulated judgment, will be called to opine on these circumstances in testimony, and whose credibility on these matters must inevitably be contested; then for entry of an order, and then for a subsequent appeal from that order (see Opinion, ¶ 30). In my view, a clear basis for disqualification has already been established and should be ordered to ensure the appearance of, and the public’s confidence in, a fair and impartial judiciary. /S/ JIM RICE Justice Patricia Cotter joins in the concurring Opinion of Justice Rice. /S/ PATRICIA COTTER Justice Laurie McKinnon, concurring in part and dissenting in part. ¶34 I agree that this matter should be dismissed without prejudice for a district judge to consider the issue of Judge Huss’s impartiality. In my opinion, however, the Court unnecessarily concludes that Judge Huss was required to disclose his personal settlement. We have not addressed such an issue previously and I would refrain from doing so given the absence of any record or decision of the trial court regarding the specific issue of 20 disclosure or a decision from the Judicial Standards Commission. As a result, I fear the Court has announced a new rule of judicial disclosure concerning the personal and subjective circumstances of a trial judge which ultimately will prove problematic and unmanageable for trial courts given the absence of any factual record supporting, explaining, or substantiating the Court’s reasoning and the multitude of personal situations that potentially could be relevant for disclosure. ¶35 Indeed, it is not clear what relevance Judge Huss’s failure to disclose has to the issue of disqualification or even whether the matter is more appropriately committed to a disciplinary proceeding. Significantly, a trial judge has many personal experiences which are common to those of the litigants appearing before him. Some experiences, for example a trial judge presiding over a contested parenting proceeding when he is also involved in a contested parenting proceeding involving his own children, would not appear to require disclosure—except upon the existence of particularly relevant facts. The Court has deemed disclosure was required because a legal process utilized by Judge Huss was similarly utilized by Peters—contesting the reasonableness of a stipulated settlement. It would seem at first glance that there would be a sundry of legal proceedings that a trial judge may be involved in personally that would parallel those upon which he was presiding over as trial judge. This is why a decision that Judge Huss was required to disclose must first take place through a fact-finding process in order to clarify the nexus and relevance of the disqualifying circumstances to the issue of the 21 judge’s impartiality. It is axiomatic that such an evidentiary process cannot occur in this Court. ¶36 With this one exception regarding the rendering of an advisory opinion on judicial disclosure, I agree that this matter should be dismissed for a hearing on the issue of Judge Huss’s impartiality. /S/ LAURIE McKINNON

May 3, 2016

66422187-a096-4a13-9a6b-08066661dabf

Alvarez v. Geshell

2016 MT 88N

DA 15-0450

Montana

Montana Supreme Court

DA 15-0450 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 88N ROBERTO R. ALVAREZ and JANE D. ALVAREZ, Individually and as Co-Trustees of The Alvarez Family Trust, Plaintiffs and Appellees, v. SYLVIA D. GESHELL, Defendant and Appellant. APPEAL FROM: District Court of the Twenty-First Judicial District, In and For the County of Ravalli, Cause No. DV 14-151 Honorable James A. Haynes, Presiding Judge COUNSEL OF RECORD: For Appellant: Reid J. Perkins, Worden Thane P.C., Missoula, Montana For Appellee: Robert T. Bell, Reep, Bell, Laird, Simpson & Jasper, P.C., Missoula, Montana Submitted on Briefs: March 2, 2016 Decided: April 12, 2016 Filed: __________________________________________ Clerk April 12 2016 Case Number: DA 15-0450 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 Sylvia Geshell appeals three orders of the Twenty-First Judicial District Court, Ravalli County. The orders were issued on December 10, 2014; March 5, 2015; and June 25, 2015. In its December 10, 2014 order, the District Court granted partial summary judgment to Roberto and Jane Alvarez. The District Court concluded that the Alvarezes have an easement in a ditch system comprising of two laterals—the Orchard Ditch and the Horse Pasture Ditch—that convey water across Geshell’s land. In its March 5, 2015 order, the District Court denied Geshell’s motion to alter or amend its December 10, 2014 order and granted the Alvarezes’ motion for attorney fees. On June 25, 2015, the District Court issued a final judgment, reiterating its grant of summary judgment and attorney fees, and awarding the Alvarezes $25,173.21 in fees and costs. ¶3 We address whether the District Court erred in granting summary judgment in favor of the Alvarezes and awarding the Alvarezes attorney fees. We affirm. ¶4 We review summary judgment orders de novo. Bailey v. State Farm Mut. Auto. Ins. Co., 2013 MT 119, ¶ 18, 370 Mont. 73, 300 P.3d 1149. Summary judgment is appropriate when the moving party demonstrates an absence of a genuine issue of material fact and entitlement to judgment as a matter of law. M. R. Civ. P. 56(c)(3). A 3 district court’s determination whether legal authority exists for an award of attorney fees is a conclusion of law, which we review for correctness. Nat’l Cas. Co. v. Am. Bankers Ins. Co., 2001 MT 28, ¶ 27, 304 Mont. 163, 19 P.3d 223. ¶5 On August 18, 2014, the Alvarezes filed their motion for summary judgment. Geshell timely filed a response to the motion on August 25, 2014. However, Geshell’s appeal heavily relies on an affidavit that she filed on March 20, 2015, after the District Court issued its summary judgment order and its order denying Geshell’s motion to amend. Geshell’s affidavit was therefore untimely. See M. R. Civ. P. 56(c)(1)(B) (providing that a party opposing a motion for summary judgment “must file a response, and any opposing affidavits, within 21 days after the motion is served or a responsive pleading is due.”). ¶6 As a general rule, “an issue which is presented for the first time to the Supreme Court is untimely and cannot be considered on appeal.” Day v. Payne, 280 Mont. 273, 276, 929 P.2d 864, 866 (1996) (quoting Akhtar v. Van de Wetering, 197 Mont. 205, 209, 642 P.2d 149, 152 (1982)). This rule “applies to both substantive and procedural matters . . . . It is based on the principle 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.” Day, 280 Mont. at 276-77, 929 P.2d at 866 (citation omitted). The District Court never had the opportunity to review the facts contained in Geshell’s March 20, 2015 affidavit before granting the Alvarezes’ motion for summary judgment, denying Geshell’s motion to alter or amend that ruling, and granting the Alvarezes’ motion for attorney fees. We will not 4 fault the District Court for Geshell’s failure to make a record before summary judgment was granted. ¶7 In her reply brief on appeal, Geshell contends that summary judgment was improper because she raised issues of material fact regarding abandonment of the Orchard Ditch before the District Court made any of its rulings. Geshell contends that her testimony and that of her expert demonstrate that the ditch had not been used for at least ten years, triggering a statutory presumption of abandonment. Geshell raised this statutory abandonment argument for the first time in her objection to the Alvarezes’ motion for attorney fees. Therefore, the District Court did not have the opportunity to review it before granting summary judgment. Accordingly, as with Geshell’s untimely affidavit, we will not fault the District Court for not considering Geshell’s ten-year abandonment argument. ¶8 Geshell also contends that the Alvarezes’ use of the word “ditch” rather than “ditches” in their amended complaint renders the District Court’s summary judgment order invalid because Geshell was not given notice that the easement at issue encompassed both the Orchard Ditch and the Horse Pasture Ditch. In Montana, “a complaint must put a defendant on notice of the facts the plaintiff intends to prove.” Kunst v. Pass, 1998 MT 71, ¶ 35, 288 Mont. 264, 957 P.2d 1 (citing M. R. Civ. P. 8(a)). However, “[t]his Court liberally construes pleadings,” Kunst, ¶ 36, to ensure they comply with the substance and purpose of the Montana Rules of Civil Procedure: to “further the resolution of controversies on their merits,” Yarborough v. Glacier Cnty., 285 Mont. 494, 497, 948 P.2d 1181, 1183 (1997). The record shows that both laterals were in dispute 5 throughout the proceedings. For example, the Alvarezes’ brief in support of their motion for summary judgment states: “The Alvarezes brought this case because Ms. Geshell has disputed their right to use ditches crossing her property to convey irrigation water to the Alvarez Property.” (Emphasis added). The Alvarezes point out that Geshell never complained below that both laterals were under discussion, a contention which Geshell does not rebut. Geshell was on notice that the Alvarezes were claiming an easement right to both the Orchard Ditch and the Horse Pasture Ditch. The District Court did not err in resolving the dispute as to both laterals. ¶9 Finally, Geshell contends that we should reverse the District Court’s decision to award attorney fees. Pursuant to §§ 70-17-112(2) and (5), MCA: “A person may not encroach upon or otherwise impair any easement for a canal or ditch . . . . If a legal action is brought to enforce the provisions of this section, the prevailing party is entitled to costs and reasonable attorney fees.” The Alvarezes brought a legal action to enforce their ditch easement right. Under the plain language of the statute, they are entitled to attorney fees. The District Court correctly concluded that legal authority existed to award attorney fees. See Nat’l Cas. Co., ¶ 27. ¶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’s interpretation and application of the law were correct, and its findings of fact are not clearly erroneous. We affirm. 6 /S/ JAMES JEREMIAH SHEA We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ JIM RICE

April 12, 2016

fe995b90-58df-47a8-b217-82b5fd7c7469

Uniform District Court Rules

N/A

AF 07-0110

Montana

Montana Supreme Court

IN THE SUPREME COURT OF THE STATE OF MONTANA AF 07-0110 IN RE THE UNIFORM DISTRICT COURT RULES ORDER At the request of the Uniform District Court Rules Commission, IT IS ORDERED that the "Affidavit for Excusal" form appended to the Uniform District Court Rules is hereby updated by the adoption of the attached "Request for Excusal" form. In the attached form, which replaces the previous form, an option is added for requesting excusal from jury duty on grounds that the person no longer lives in the county. In addition, the new form substitutes the unsworn declarations format authorized under § 1-6-105, MCA, for a notarized affidavit format. The Clerk is directed to provide copies of this Order and the attached form to each district court judge and each clerk of the district court for the state courts of Montana, the State Bar of Montana, and to each member of the Uniform District Court Rules Comrnission. Dated this IA day of April, 2016. Chief Justice aet earei, PILED APR 1 3 2016 Ed Smith CLERK OF THE SUPREME COURT STATE OF MONTANA April 13 2016 Case Number: AF 07-0110

April 13, 2016

9837fccd-8e58-43f6-b247-b0e38a12159f

Estates v. Whitefish

2016 MT 87N

DA 15-0486

Montana

Montana Supreme Court

DA 15-0486 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 87N THE ESTATES HOMEOWNERS ASSOCIATION (GROUSE MOUNTAIN), INC., Plaintiff and Appellee, v. CITY OF WHITEFISH, Defendant and Appellant, and GROUSE MOUNTAIN HOMEOWNERS, INC., Proposed Intervenor and Appellant. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV 14-1215B Honorable Robert B Allison, Presiding Judge COUNSEL OF RECORD: For Appellant: Terry N. Trieweiler, Trieweiler Hedman Hileman & Lacosta, Whitefish, Montana (Attorney for Grouse Mountain Homeowners, Inc.) Angela K. Jacobs, City Attorney, Whitefish, Montana For Appellee: Sean S. Frampton, Morrison & Frampton, PLLP, Whitefish, Montana (Attorney for Grouse Mountain) Submitted on Briefs: March 23, 2016 Decided: April 12, 2016 Filed: __________________________________________ Clerk April 12 2016 Case Number: DA 15-0486 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 The City of Whitefish (City) appeals an order by the Eleventh Judicial District Court, Flathead County, granting summary judgment to The Estates Homeowners Association (Grouse Mountain), Inc. (Estates) on the issue of whether a city resolution interferes with Estates’ vested right to construct gates on Mountainside Drive, a private road. Grouse Mountain Homeowners, Inc. (Homeowners) appeals the District Court’s order denying Homeowners’ motion to intervene in this action and the District Court’s denial of Homeowners’ motion to revise that order. We address whether the District Court: (1) erred in denying Homeowners’ motion to intervene as a matter of right; (2) abused its discretion in denying Homeowners’ motion for permissive intervention; (3) erred in granting summary judgment to Estates and denying summary judgment to the City; and (4) incorrectly concluded that a justiciable controversy exists between Estates and the City. We affirm on all issues. ¶3 Estates and Homeowners are associations of homeowners who own property in the Grouse Mountain residential subdivision. Grouse Mountain was developed in three phases. Phases I and II, which include the lower area of the subdivision surrounding a golf course, are managed by Homeowners. Phase III, known as Grouse Mountain Estates, is managed by Estates and is accessed via Mountainside Drive. The City 3 approved the final plats for the subdivision subject to conditions of approval. Condition 12(a) provides: “The roads in Grouse Mountain Estates shall be private roads and the Homeowner’s Association shall be entitled to close them to vehicular access by the public.” Condition 18 provides: “A reciprocal easement agreement shall be agreed to between Grouse Mountain Estates and Grouse Mountain Phases I, II, and II [sic] homeowners associations to ensure reciprocal street access through each subdivision.” Pursuant to Condition 18, Estates and Homeowners entered into an easement agreement granting Homeowners’ residents the right to use Mountainside Drive. Condition 24 provides: “Plans for streets . . . shall be approved by the Public Works Director prior to construction.” ¶4 In October 2014, the City adopted Resolution 14-48, which prohibits any subdivision from gating its streets to prevent public access. Estates filed suit seeking a declaratory judgment that it has the right to construct gates to the entrances of Grouse Mountain Estates on opposite ends of Mountainside Drive. Homeowners moved to intervene, contending that gates on Mountainside Drive would impede and obstruct the reasonable use of Homeowners’ easement, as provided by Condition 18 of the final plat approval. The District Court denied Homeowners’ motion. The Court concluded that Homeowners did not have a justiciable controversy because “no gates have been installed and there has been no interference with the easement interest of [Homeowners] or breach of contract.” The Court further concluded that protection of Homeowners’ alleged easement interest “would not be impaired by a decision” in favor of Estates. The Court concluded that the City adequately represented Homeowners’ interests as residents of Whitefish in keeping Mountainside Drive open to public access. Homeowners moved for 4 revision of the District Court’s order denying its motion to intervene. The District Court denied that motion. Homeowners has since filed a separate action against Estates to protect its easement interests. ¶5 After the District Court denied Homeowners’ motion to intervene, Estates and the City cross-filed for summary judgment. Estates moved for summary judgment that Resolution 14-48 presents an unlawful interference or impairment of Estates’ vested right to gate private roads as provided by Condition 12(a) of the final plat approval. The City argued that Estates’ complaint was an impermissible request for an advisory opinion based on the District Court’s logic in denying Homeowners’ motion to intervene. The City further contended that Estates’ property interests is not an absolute vested right because it is subject to conditions of approval, City subdivision regulations, and engineering standards. The District Court granted Estates’ motion for summary judgment and denied the City’s motion. The Court concluded: “The City did grant the right to Grouse Mountain to close its private roads to vehicular access by the public. The Resolution disallowing gates closing streets from public access interferes with that right.” The Court further concluded that a justiciable controversy exists between Estates and the City because Resolution 14-48 directly affects Estates’ property interest, which vested when the City approved the final plats for the subdivision. ¶6 Homeowners appeals the District Court’s denial of its motion to intervene and motion for revision of that denial. The City appeals the District Court’s order denying the City’s motion for summary judgment and granting summary judgment to Estates. ¶7 We review de novo a district court’s denial of a motion to intervene as a matter of right under M. R. Civ. P. 24(a). Loftis v. Loftis, 2010 MT 49, ¶ 6, 355 Mont. 316, 5 227 P.3d 1030. We review for abuse of discretion a district court’s denial of a motion for permissive intervention under M. R. Civ. P. 24(b). Loftis, ¶ 6. A district court abuses its discretion when it acts arbitrarily without conscientious judgment or exceeds the bounds of reason. Seltzer v. Morton, 2007 MT 62, ¶ 65, 336 Mont. 225, 154 P.3d 561. ¶8 We review summary judgment orders de novo. Bailey v. State Farm Mut. Auto. Ins. Co., 2013 MT 119, ¶ 18, 370 Mont. 73, 300 P.3d 1149. Summary judgment is appropriate when the moving party demonstrates an absence of a genuine issue of material fact and entitlement to judgment as a matter of law. M. R. Civ. P. 56(c)(3). “A district court’s ruling on whether a justiciable controversy exists is a conclusion of law,” which we review for correctness. Northfield Ins. Co. v. Mont. Ass’n of Cntys., 2000 MT 256, ¶ 8, 301 Mont. 472, 10 P.3d 813. ¶9 Homeowners contends that the District Court should have granted its motion to intervene as of right under M. R. Civ. P. 24(a)(2), which provides: On timely motion, the court must permit anyone to intervene who . . . claims an interest relating to the property or transaction which is the subject matter of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant’s ability to protect its interest, unless the existing parties adequately represent that interest. The timeliness of Homeowners’ motion is not disputed. Homeowners contends that it has a direct interest in the subject matter of this litigation because Estates claims that it has an unequivocal vested right to close its road by gates when, in fact, Estates’ right is limited by Homeowners’ reasonable use of an easement over Mountainside Drive. Alternatively, Homeowners contends that the District Court should have granted it permissive intervention under M. R. Civ. P. 24(b). M. R. Civ. P. 24(b)(1)(B) provides: “On timely motion, the court may permit anyone to intervene who . . . has a claim or 6 defense that shares with the main action a common question of law or fact.” Homeowners contends that it should have been allowed to intervene because whether the gates impair Homeowners’ easement rights is a common question of law and fact. ¶10 Contrary to Homeowners’ assertions, the easement issue is not common to both parties’ claims. Estates contends that Resolution 14-48 interferes with its vested property interests, whereas Homeowners contends that the construction of gates on Mountainside Drive will interfere with its contractual easement interests. The applicability of Resolution 14-48 to Estates involves different facts and different law than the interpretation of the easement contract between Estates and Homeowners. Further, a judgment that Resolution 14-48 interferes with Estates’ property interests does not necessarily preclude Homeowners from arguing that a gate on Mountainside Drive would interfere with its easement interests. The District Court determined that Homeowners could assert its interest through separate litigation. That, in fact, is what Homeowners has done. The District Court did not err in denying Homeowners’ motion to intervene as of right or abuse its discretion in denying Homeowners’ motion for permissive intervention. ¶11 Because we resolve Homeowners’ involvement in this case by concluding that the District Court did not err in denying Homeowners’ motion for intervention, we need not decide whether the District Court correctly determined that Homeowners has no justiciable controversy against Estates. By the same logic, we decline to address Homeowners’ arguments concerning summary judgment. Since Homeowners was not properly a party to this lawsuit, it cannot appeal the merits. 7 ¶12 We next turn to the City’s appeal of the District Court’s order granting summary judgment to Estates and denying summary judgment to the City. In its response to the City’s appellate brief, Estates contends that its two main arguments—that it has a vested right and that Resolution 14-48 interferes with that right—were unopposed by the City during the District Court proceedings. Estates cites the City’s motion for summary judgment and response to Estates’ motion for summary judgment to support this contention. A review of that document reveals that the City clearly opposed Estates’ arguments that it had a vested right—contending that public works approval was necessary before Estates could install the gates—and that Resolution 14-48 interfered with Estates’ vested right. Because the City raised these arguments before the District Court, we will address them on appeal. ¶13 The City contends that the District Court erred in its summary judgment order for two reasons. First, the City contends that the District Court should not have reached the issue of whether Resolution 14-48 violated Estates’ constitutional right because, the City argues, no justiciable controversy existed. Second, the City contends that the District Court erred in determining that Estates’ constitutionally-protected property right in installing gates on Mountainside Drive vested at final plat approval. These two issues are related and, therefore, we will address them simultaneously. ¶14 This Court engages in a three-part analyses to determine whether a justiciable controversy exists: First, a justiciable controversy requires that parties have existing and genuine, as distinguished from theoretical, rights or interests. Second, the controversy must be one upon which the judgment of the court may effectively operate, as distinguished from a debate or argument invoking a purely political, administrative, philosophical or academic conclusion. 8 Third, [it] must be a controversy the judicial determination of which will have the effect of a final judgment in law or decree in equity upon the rights, status or legal relationships of one or more of the real parties in interest, or lacking these qualities be of such overriding public moment as to constitute the legal equivalent of all of them. Chipman v. Nw. Healthcare Corp., 2012 MT 242, ¶ 19, 366 Mont. 450, 288 P.3d 193 (change in original and citation omitted). ¶15 The District Court concluded that Estates’ right is existing and genuine because Condition 12(a) “granted [Estates] the right to have private roads and to close its private roads . . . to vehicular access by the public. That right vested upon final plat approval.” The City contends that this conclusion is incorrect, attempting to characterize Estates’ right as conditional and therefore incomplete. The City contends that Estates’ proposed gates on Mountainside Drive are subject to the Public Works Department’s review pursuant to the City’s engineering standards and Condition 24 of final plat approval. Condition 24 specifically refers to plans for streets. Estates desires to install a gate, not a street. Further, as Estates points out, the City only approved the final plats once all of the conditions were satisfied. See § 76-3-611(1), MCA (“The governing body shall examine each final subdivision plat and shall approve the plat only if: (a) it conforms to the conditions of approval set forth on the preliminary plat . . . .”). The District Court correctly determined that Estates’ right to construct gates on private roads within the Grouse Mountain Estates subdivision vested when Estates received its final plat. The City cannot now withdraw its approval of that plat by passing Resolution 14-48. ¶16 The District Court’s decision resolved a concrete dispute between the parties as to their existing rights. A controversy existed upon which the District Court’s judgment effectively operated: Estates has an existing property right to construct gates on its 9 private roads, and Resolution 14-48 conflicts with this right by prohibiting Estates from constructing gates on its private roads. We disagree with the City that the “triggering event” that would have created a concrete controversy is the members’ approval of the installation of permanent gates on Mountainside Drive. In fact, the triggering event was the City’s passage of Resolution 14-48, which interfered with Estates’ vested property interest. The judgment in this case will have the effect of a final judgment on the rights of the parties. Therefore, the District Court correctly concluded that a justiciable controversy exists.1 The District Court’s grant of summary judgment to Estates and denial of summary judgment to the City was appropriate because a justiciable controversy exists, Estates’ property right vested upon final plat approval, and Resolution 14-48 interferes with that property right. ¶17 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 were not clearly erroneous, and its ruling was not an abuse of discretion. We affirm. /S/ JAMES JEREMIAH SHEA 1 Because we did not address whether the District Court erred in finding that no justiciable controversy exists between Estates and Homeowners, we decline to address whether that ruling is inconsistent with the District Court’s conclusion that a justiciable controversy exists between the City and Estates. 10 We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ JIM RICE

April 12, 2016

8cd98b25-b08a-4f34-aab5-e0fa91b25042

Reed v. Macpheat

2016 MT 76N

DA 15-0622

Montana

Montana Supreme Court

DA 15-0622 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 76N MARY E. REED, Petitioner and Appellee, v. WILLIAM R. MACPHEAT, Respondent and Appellant. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DV-15-75 Honorable John W. Larson, Presiding Judge COUNSEL OF RECORD: For Appellant: William R. MacPheat (Self-Represented), Missoula, Montana For Appellee: Joshua S. Van de Wetering, Van de Wetering Law Offices, P.C., Missoula, Montana Submitted on Briefs: February 24, 2016 Decided: March 29, 2016 Filed: __________________________________________ Clerk March 29 2016 Case Number: DA 15-0622 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 This case arises from a temporary restraining order (“TRO”) obtained by Mary Reed (“Reed”) against William MacPheat (“MacPheat”). Reed petitioned for a TRO with assistance from the Missoula Crime Victim Advocate Program on December 24, 2014. A hearing was held on January 8, 2015, in Missoula Municipal Court, and the petition for the TRO was granted. MacPheat filed an appeal to Missoula District Court, and a hearing was held on February 20, 2015. The Missoula District Court affirmed the Municipal Court Order. MacPheat filed a notice of appeal to the Montana Supreme Court on October 15, 2015. We affirm. ¶3 We review an order to amend a temporary restraining order for abuse of discretion. Lockhead v. Lockhead, 2013 MT 368, ¶ 12, 373 Mont. 120, 314 P.3d 915. ¶4 Reed was MacPheat’s mental health provider for several months until October 2014. Between October and December 2014, MacPheat repeatedly contacted Reed through text messages and letters. This continuous contact after Reed terminated the client relationship occasioned the eventual TRO petition. The record in this case was developed during the January 8, 2015 hearing in Missoula Municipal Court. Prior to the 3 hearing, MacPheat conversed with opposing counsel and reached an agreement regarding the TRO. Thereafter, MacPheat attended the hearing, and when opposing counsel introduced the negotiated agreement, MacPheat interjected to clarify elements of the proposal. At the end of the hearing, the judge invited him to add to the arrangement he had actively participated in developing. MacPheat declined to further modify the TRO and agreed to its final structure. ¶5 A few weeks after the January 8 hearing, MacPheat appealed; the District Court affirmed based on the record. Now, over a year after he had agreed to the TRO in Municipal Court, MacPheat appeals the TRO to this Court, and raises nine separate issues, some of which are novel and all of which are unsupported by the record. ¶6 Parties to a case are entitled to seek review of a municipal court order in district court, but are bound by the record developed in the lower court. Section 3-11-110(1), MCA. Further, as we have said repeatedly, as a general rule, we will not consider novel issues, or new arguments on appeal. Siebken v. Voderberg, 2015 MT 296, ¶ 19, 381 Mont. 256, 359 P.3d 1073; Day v. Payne, 280 Mont. 273, 276, 929 P.2d 864, 866 (1996). This rule exists to protect the integrity of the trial courts and the appeals process, and to ensure the fairness of litigation between parties to a suit. The rule is a hallmark of the American justice system because: [i]t is based on the principle 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. Furthermore, it is unfair to allow a party to choose to remain silent in the trial court in the face of error, taking a chance on a favorable outcome, and subsequently assert error on appeal if the outcome in the trial court is unfavorable. 4 Payne, 280 Mont. at 276-77, 929 P.2d at 866. Here, MacPheat’s appeal runs afoul of this rule. The electronic recording from the Municipal Court shows not only that MacPheat failed to record his objections for the court to properly address them, but also that he conclusively consented to the TRO. Consequently, there is no factual or legal basis for his appeal. As a result, we are obliged to decline to address his arguments, and based on our review of the record, we cannot agree that an abuse of discretion has occurred. ¶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, this case presents a question controlled by settled law or by the clear application of applicable standards of review. ¶8 Affirmed. /S/ MIKE McGRATH We Concur: /S/ BETH BAKER /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ JIM RICE

March 29, 2016

f8b24c36-080b-4986-95da-9b2e112dc643

Alvarez v. Geshell

2016 MT 88N

DA 15-0450

Montana

Montana Supreme Court

DA 15-0450 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 88N ROBERTO R. ALVAREZ and JANE D. ALVAREZ, Individually and as Co-Trustees of The Alvarez Family Trust, Plaintiffs and Appellees, v. SYLVIA D. GESHELL, Defendant and Appellant. APPEAL FROM: District Court of the Twenty-First Judicial District, In and For the County of Ravalli, Cause No. DV 14-151 Honorable James A. Haynes, Presiding Judge COUNSEL OF RECORD: For Appellant: Reid J. Perkins, Worden Thane P.C., Missoula, Montana For Appellee: Robert T. Bell, Reep, Bell, Laird, Simpson & Jasper, P.C., Missoula, Montana Submitted on Briefs: March 2, 2016 Decided: April 12, 2016 Filed: __________________________________________ Clerk April 12 2016 Case Number: DA 15-0450 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 Sylvia Geshell appeals three orders of the Twenty-First Judicial District Court, Ravalli County. The orders were issued on December 10, 2014; March 5, 2015; and June 25, 2015. In its December 10, 2014 order, the District Court granted partial summary judgment to Roberto and Jane Alvarez. The District Court concluded that the Alvarezes have an easement in a ditch system comprising of two laterals—the Orchard Ditch and the Horse Pasture Ditch—that convey water across Geshell’s land. In its March 5, 2015 order, the District Court denied Geshell’s motion to alter or amend its December 10, 2014 order and granted the Alvarezes’ motion for attorney fees. On June 25, 2015, the District Court issued a final judgment, reiterating its grant of summary judgment and attorney fees, and awarding the Alvarezes $25,173.21 in fees and costs. ¶3 We address whether the District Court erred in granting summary judgment in favor of the Alvarezes and awarding the Alvarezes attorney fees. We affirm. ¶4 We review summary judgment orders de novo. Bailey v. State Farm Mut. Auto. Ins. Co., 2013 MT 119, ¶ 18, 370 Mont. 73, 300 P.3d 1149. Summary judgment is appropriate when the moving party demonstrates an absence of a genuine issue of material fact and entitlement to judgment as a matter of law. M. R. Civ. P. 56(c)(3). A 3 district court’s determination whether legal authority exists for an award of attorney fees is a conclusion of law, which we review for correctness. Nat’l Cas. Co. v. Am. Bankers Ins. Co., 2001 MT 28, ¶ 27, 304 Mont. 163, 19 P.3d 223. ¶5 On August 18, 2014, the Alvarezes filed their motion for summary judgment. Geshell timely filed a response to the motion on August 25, 2014. However, Geshell’s appeal heavily relies on an affidavit that she filed on March 20, 2015, after the District Court issued its summary judgment order and its order denying Geshell’s motion to amend. Geshell’s affidavit was therefore untimely. See M. R. Civ. P. 56(c)(1)(B) (providing that a party opposing a motion for summary judgment “must file a response, and any opposing affidavits, within 21 days after the motion is served or a responsive pleading is due.”). ¶6 As a general rule, “an issue which is presented for the first time to the Supreme Court is untimely and cannot be considered on appeal.” Day v. Payne, 280 Mont. 273, 276, 929 P.2d 864, 866 (1996) (quoting Akhtar v. Van de Wetering, 197 Mont. 205, 209, 642 P.2d 149, 152 (1982)). This rule “applies to both substantive and procedural matters . . . . It is based on the principle 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.” Day, 280 Mont. at 276-77, 929 P.2d at 866 (citation omitted). The District Court never had the opportunity to review the facts contained in Geshell’s March 20, 2015 affidavit before granting the Alvarezes’ motion for summary judgment, denying Geshell’s motion to alter or amend that ruling, and granting the Alvarezes’ motion for attorney fees. We will not 4 fault the District Court for Geshell’s failure to make a record before summary judgment was granted. ¶7 In her reply brief on appeal, Geshell contends that summary judgment was improper because she raised issues of material fact regarding abandonment of the Orchard Ditch before the District Court made any of its rulings. Geshell contends that her testimony and that of her expert demonstrate that the ditch had not been used for at least ten years, triggering a statutory presumption of abandonment. Geshell raised this statutory abandonment argument for the first time in her objection to the Alvarezes’ motion for attorney fees. Therefore, the District Court did not have the opportunity to review it before granting summary judgment. Accordingly, as with Geshell’s untimely affidavit, we will not fault the District Court for not considering Geshell’s ten-year abandonment argument. ¶8 Geshell also contends that the Alvarezes’ use of the word “ditch” rather than “ditches” in their amended complaint renders the District Court’s summary judgment order invalid because Geshell was not given notice that the easement at issue encompassed both the Orchard Ditch and the Horse Pasture Ditch. In Montana, “a complaint must put a defendant on notice of the facts the plaintiff intends to prove.” Kunst v. Pass, 1998 MT 71, ¶ 35, 288 Mont. 264, 957 P.2d 1 (citing M. R. Civ. P. 8(a)). However, “[t]his Court liberally construes pleadings,” Kunst, ¶ 36, to ensure they comply with the substance and purpose of the Montana Rules of Civil Procedure: to “further the resolution of controversies on their merits,” Yarborough v. Glacier Cnty., 285 Mont. 494, 497, 948 P.2d 1181, 1183 (1997). The record shows that both laterals were in dispute 5 throughout the proceedings. For example, the Alvarezes’ brief in support of their motion for summary judgment states: “The Alvarezes brought this case because Ms. Geshell has disputed their right to use ditches crossing her property to convey irrigation water to the Alvarez Property.” (Emphasis added). The Alvarezes point out that Geshell never complained below that both laterals were under discussion, a contention which Geshell does not rebut. Geshell was on notice that the Alvarezes were claiming an easement right to both the Orchard Ditch and the Horse Pasture Ditch. The District Court did not err in resolving the dispute as to both laterals. ¶9 Finally, Geshell contends that we should reverse the District Court’s decision to award attorney fees. Pursuant to §§ 70-17-112(2) and (5), MCA: “A person may not encroach upon or otherwise impair any easement for a canal or ditch . . . . If a legal action is brought to enforce the provisions of this section, the prevailing party is entitled to costs and reasonable attorney fees.” The Alvarezes brought a legal action to enforce their ditch easement right. Under the plain language of the statute, they are entitled to attorney fees. The District Court correctly concluded that legal authority existed to award attorney fees. See Nat’l Cas. Co., ¶ 27. ¶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’s interpretation and application of the law were correct, and its findings of fact are not clearly erroneous. We affirm. 6 /S/ JAMES JEREMIAH SHEA We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ JIM RICE

April 12, 2016

a02ac603-b058-4c53-87bb-db0554dc3ecb

Asarco LLC v. Atlantic Richfield Co.

2016 MT 90

DA 15-0464

Montana

Montana Supreme Court

DA 15-0464 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 90 ASARCO LLC, a Delaware corporation, Plaintiff and Appellant, v. ATLANTIC RICHFIELD COMPANY, a Delaware Corporation, Defendant and Appellee. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. BDV 2015-07 Honorable Jeffrey M. Sherlock, Presiding Judge COUNSEL OF RECORD: For Appellant: Rachel H. Parkin, Dylan McFarland, Milodragovich, Dale & Steinbrenner, P.C., Missoula, Montana Gregory Evans, Laura G. Brys, McGuirewoods LLP, Los Angeles, California For Appellee: Randy J. Cox, Randy J. Tanner, Boone Karlberg P.C., Missoula, Montana Shannon Wells Stevenson, Davis Graham & Stubbs LLP, Denver, Colorado Submitted on Briefs: March 9, 2016 Decided: April 12, 2016 Filed: __________________________________________ Clerk April 12 2016 Case Number: DA 15-0464 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Asarco LLC appeals the order of the First Judicial District Court, Lewis and Clark County, granting Atlantic Richfield Company’s motion for judgment on the pleadings and dismissing Asarco’s claims. We restate the issue on appeal as follows: Whether the District Court correctly determined that claim preclusion bars Asarco’s claims. ¶2 We affirm. PROCEDURAL AND FACTUAL BACKGROUND ¶3 For over one hundred years, Asarco and its predecessors operated a lead smelting facility in East Helena, Montana (the Site). From 1927 to 1972, Atlantic Richfield’s predecessor operated a zinc fuming plant on land leased from Asarco at the Site.1 In 1972, Atlantic Richfield sold the zinc fuming plant and related property to Asarco. Under the 1972 sale agreement (1972 Agreement), Atlantic Richfield agreed to indemnify Asarco for liabilities arising out of Atlantic Richfield’s operations at the Site. Additionally, the 1972 Agreement’s terms contained a disclosure clause in which Atlantic Richfield agreed to deliver all relevant documents and records to Asarco and a representation clause in which Atlantic Richfield represented and warranted that it had delivered all the information required by the disclosure clause. ¶4 In 1984, due to extensive contamination of the soil, surface water, and groundwater at the Site and the surrounding area, the Environmental Protection Agency (EPA) added the Site and surrounding area to the National Priorities List under the 1 Atlantic Richfield refers to itself and its predecessor, the Anaconda Company, as “Atlantic Richfield” and we will do the same. 3 Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), commonly known as “Superfund.” The EPA requested information from Asarco and Atlantic Richfield regarding their operations at the Site because it had identified both as potentially responsible for the contamination. The EPA ultimately determined that Asarco was obligated to fund and conduct cleanup efforts at the Site based on the information provided by the parties. ¶5 In the 1990s the EPA and Asarco entered into several consent decrees regarding Asarco’s responsibility to remediate contamination at the Site. In 2005, Asarco filed for Chapter 11 bankruptcy protection. During its bankruptcy proceeding, Asarco entered into two settlements with the State and federal governments regarding its environmental liabilities at the Site. To date, Asarco has paid approximately $138 million for remediation at the Site. ¶6 In June 2012 Asarco filed a complaint against Atlantic Richfield in the United States District Court for the District of Montana. Asarco sought contribution—pursuant to CERCLA—from Atlantic Richfield for costs incurred in cleaning up the Site. Asarco claimed that Atlantic Richfield was responsible, in part, for the Site’s contamination due to the zinc fuming plant’s operation. Asarco therefore asserted that Atlantic Richfield was liable under CERCLA for its equitable share of costs related to the Site’s cleanup. ¶7 In June 2014, following extensive discovery between the parties, Atlantic Richfield moved for summary judgment on the ground that Asarco’s claims were untimely under CERCLA’s statute of limitations. The federal district court agreed that the claims were time-barred and granted Atlantic Richfield’s motion for summary 4 judgment in August 2014. Asarco LLC v. Atl. Richfield Co., 73 F. Supp. 3d 1285, 1296 (D. Mont. 2014) (hereafter Asarco I). Asarco I is currently on appeal to the U.S. Ninth Circuit Court of Appeals. ¶8 Following the federal court’s grant of summary judgment in Asarco I, Asarco commenced the present action against Atlantic Richfield in the First Judicial District Court. Asarco’s complaint alleged the following claims under state law: breach of contract, breach of the covenant of good faith and fair dealing, fraud, negligent misrepresentation, and constructive fraud. Asarco claimed that it learned the basis for its state-law claims during discovery in Asarco I. Asarco claimed further that it was entitled to indemnification from Atlantic Richfield for Atlantic Richfield’s “share of the claims, liabilities, damages, losses, costs and expenses attributable to the Claims, including attorneys’ fees and costs, that arose out of or resulted from [Atlantic Richfield’s] construction, ownership and operation” of the zinc fuming plant at the Site. Asarco premised its state-law claims on Atlantic Richfield’s alleged breach of the 1972 Agreement. ¶9 In March 2015 Atlantic Richfield moved for judgment on the pleadings pursuant to M. R. Civ. P. 12(c) (Rule 12(c)) on the ground that the doctrine of claim preclusion barred Asarco’s claims. The District Court issued its order in June 2015 following briefing and oral argument. The District Court determined: that Asarco could have amended its complaint in Asarco I to include its state-law claims; that the federal district court would have had supplemental jurisdiction over the state-law claims; that it was not clear whether the federal district court would have refused to continue exercising 5 supplemental jurisdiction over the state-law claims after dismissing Asarco’s CERCLA claim; and that the elements of claim preclusion were met. Accordingly, the court granted Atlantic Richfield’s motion and dismissed the matter. Asarco appeals. STANDARD OF REVIEW ¶10 A district court’s decision on a Rule 12(c) motion for judgment on the pleadings is a conclusion of law that we review de novo for correctness. Firelight Meadows, LLC v. 3 Rivers Telephone Coop., Inc., 2008 MT 202, ¶ 12, 344 Mont. 117, 186 P.3d 869. A Rule 12(c) motion is appropriate when the moving party establishes that no material issues of fact exist and that it is entitled to judgment as a matter of law. Firelight Meadows, LLC, ¶ 9. In evaluating a Rule 12(c) motion, a court must assume that all of the well-pleaded factual allegations in the nonmovant’s pleadings are true and that all contravening assertions in the movant’s pleadings are false. Firelight Meadows, LLC, ¶ 11. Because “[a]ll exhibits and materials referred to in a pleading are incorporated into the pleading,” a court may consider any such exhibits and materials in deciding a Rule 12(c) motion. Firelights Meadows, LLC, ¶ 15. Furthermore, only “well-pleaded factual allegations” are assumed to be true for purposes of deciding a Rule 12(c) motion; questions of law are “legal determination[s] for a court to decide based upon well-established legal precedent.” Firelights Meadows, LLC, ¶ 18. A district court’s application of claim preclusion presents an issue of law that we review de novo for correctness. Brilz v. Metro. Gen. Ins. Co., 2012 MT 184, ¶ 13, 366 Mont. 78, 285 P.3d 494. 6 DISCUSSION ¶11 Whether the District Court correctly determined that claim preclusion barred Asarco’s claims. ¶12 In its order, the District Court first observed that Asarco’s state-law claims were not raised in Asarco I. The court noted that the doctrine of claim preclusion applies equally to claims that could have been raised in the first action. The District Court therefore analyzed several issues pertinent to its conclusion that Asarco’s state-law claims could have been raised in Asarco I and therefore were barred by claim preclusion. ¶13 The District Court first found that Asarco discovered the grounds underlying its state-law claims during discovery in Asarco I; therefore, the court concluded that Asarco could have amended its Asarco I complaint to include those claims pursuant to Fed. R. Civ. P. 15(a), which governs amendments to pleadings. The court concluded further that the federal district court would have exercised supplemental jurisdiction over Asarco’s state-law claims pursuant to 28 U.S.C. § 1367(a) because those claims were part of the same case or controversy as its CERCLA claim. The court next noted that under 28 U.S.C. § 1367(c), a federal court may continue to exercise supplemental jurisdiction over a claim if the court has dismissed the federal claims. Relying on the Restatement (Second) of Judgments § 25 and decisions from the Ninth Circuit, the court determined that it was unclear whether the federal district court would have declined to exercise continuing jurisdiction over the state-law claims after dismissing Asarco’s CERCLA claim on summary judgment. Finally, the court determined that the subject matter and the issues were the same in both actions because “[b]oth actions concern [Atlantic 7 Richfield’s] operation of the East Helena zinc fuming plant, its alleged pollution of the ground and water in that area, and its attempted concealment of those operations.” The District Court concluded that claim preclusion barred Asarco’s state-law claims, granted Atlantic Richfield’s motion for judgment on the pleadings, and dismissed the case. ¶14 Asarco contends that the District Court erred in several respects. First, Asarco asserts that the court incorrectly presumed that the federal district court would have continued to exercise supplemental jurisdiction over its state-law claims following the federal court’s dismissal of the CERCLA claim on summary judgment. Next, Asarco contends that it did not have knowledge of its fraud claims in sufficient time to raise them in federal court prior to the court’s summary judgment ruling in Asarco I. Finally, Asarco argues that the subject matter and issues in both cases are different. Therefore, it asserts that claim preclusion is inappropriate. ¶15 Claim preclusion bars a party from “relitigating claims that were or could have been raised” in a previous action in which a final judgment was reached. Brilz, ¶ 18. The doctrine embodies “a judicial policy that favors a definite end to litigation.” Baltrusch v. Baltrusch, 2006 MT 51, ¶ 15, 331 Mont. 281, 130 P.3d 1267 (citations omitted). Claim preclusion deters “plaintiffs from splitting a single cause of action into more than one lawsuit, thereby conserving judicial resources and encouraging reliance on adjudication by preventing inconsistent judgments.” Baltrusch, ¶ 15 (citations omitted). Claim preclusion applies if the following elements are met: (1) the parties or their privies are the same in the first and second actions; (2) the subject matter of the actions is the same; (3) the issues are the same in both actions, or are ones that could have been raised in the first action, 8 and they relate to the same subject matter; (4) the capacities of the parties are the same in reference to the subject matter and the issues between them; and (5) a valid final judgment has been entered on the merits in the first action by a court of competent jurisdiction. Brilz, ¶ 22. Here, it is undisputed that the parties are the same, that the capacities of the parties are the same, and that the federal district court entered a final judgment on the merits in Asarco I. Thus, the elements in dispute are whether the actions involve the same subject matter and, if so, whether the issues in the instant case are ones that could have been raised in the first action. ¶16 Asarco argues that the subject matter of the cases is different because “the federal case is about contamination, while the very different state case is about concealment.” The federal case, Asarco asserts, related to “whether [Atlantic Richfield] released contaminates at the [Site], what type of contaminates it released, how much of these contaminates it released, and accordingly how much it should contribute to the clean up costs.” On the other hand, Asarco contends, the instant case relates to “what documents and information were withheld by [Atlantic Richfield], what affirmative misrepresentations and misstatements were made by [Atlantic Richfield], and whether such withholdings and misstatements violated the terms of the 1972 Agreement.” In other words, Asarco claims that the federal case concerned Atlantic Richfield’s conduct prior to the sale of its zinc fuming plant and the instant case concerns Atlantic Richfield’s conduct after selling its zinc fuming plant. Asarco contends further that the “level of technicality,” the witnesses necessary to each case, and when the claims accrued 9 underscores the differences between both cases. Finally, Asarco alleges that the “state law claims are based on facts independent of the previous federal court action.” ¶17 The subject matter element of claim preclusion “is concerned with whether the two actions arise from the same underlying basis.” Touris v. Flathead Cnty., 2011 MT 165, ¶ 17, 361 Mont. 172, 258 P.3d 1 (citing Wiser v. Mont. Bd. of Dentistry, 2011 MT 56, ¶¶ 12-13, 360 Mont. 1, 251 P.3d 675; State ex rel. Harlem Irrigation Dist. v. Mont. Seventeenth Judicial Dist. Ct., 271 Mont. 129, 133-34, 894 P.2d 943, 945 (1995)); Olsen v. Milner, 2012 MT 88, ¶ 23, 364 Mont. 523, 276 P.3d 934. The parties’ pleadings make clear that concealment of contamination from Atlantic Richfield’s zinc fuming plant is at the heart of both cases. ¶18 In its briefing on appeal, Asarco asserts that Asarco I’s subject matter concerned “the contamination that resulted from [Atlantic Richfield’s] ownership and operation of its zinc fuming plant at the East Helena site.” In its first amended complaint in Asarco I, referenced in Asarco’s complaint in the instant case, Asarco asserted: [Atlantic Richfield] (including through its corporate predecessors) owned and operated a zinc fuming facility adjacent to the East Helena site. . . . These operations lead to disposals or discharges of lead, arsenic, copper, zinc, cadmium and other hazardous substances into the soil, surface water and groundwater of the Helena Valley. Asarco’s East Helena Settlements have paid to remediate these metals. Because Atlantic Richfield was responsible for the release of hazardous substances from its zinc fuming plant, Asarco asserted that it was entitled to contribution from Atlantic Richfield for the claims Asarco paid to remediate the contamination at the Site arising out of the zinc fuming plant’s operation by Atlantic Richfield. In its response in opposition 10 to Atlantic Richfield’s motion for summary judgment in Asarco I—again referenced in Asarco’s complaint in the instant case—Asarco alleged: [Atlantic Richfield] responded to information requests and demands for payment from EPA stating that it never released any hazardous substances at the site. Contrary to those sworn statements, [Atlantic Richfield’s] records reveal 45 years of massive, unreported releases of arsenic. . . . [Atlantic Richfield] employees now admit that [Atlantic Richfield] wrongly kept this record of pollution from the EPA. Asarco alleged further that the EPA looked solely to Asarco to remediate the Site’s contamination because the EPA was “[u]naware of [Atlantic Richfield’s] misconduct.” ¶19 In its pre-trial proposed conclusions of law in Asarco I, attached to Atlantic Richfield’s answer in the instant case, Asarco asserted that “[i]n formulating an allocation for contribution, the court may consider factors other than the actual amounts contributed to the Site.” One factor Asarco cited was “the degree of cooperation by the parties with Federal, State, or local officials to prevent any harm to public health or the environment.” During a deposition in Asarco I, attached to Atlantic Richfield’s answer in the instant case, Asarco’s counsel brought up this cooperation factor and asked whether certain documents “should have been provided to the United States in response” to the EPA’s request for information regarding Atlantic Richfield’s historical waste disposal practices at the Site. Asarco’s counsel made clear that the purpose of his questions relating to Atlantic Richfield’s response to the EPA’s information request was “to determine whether [Atlantic Richfield] co-operated [sic]” with the EPA. In other words, Asarco was attempting to demonstrate in Asarco I that Atlantic Richfield’s failure to cooperate with the EPA by not disclosing certain documents relating to contamination at the Site 11 violated CERCLA and therefore justified reimbursing Asarco for costs related to the Site’s clean-up. The pleadings demonstrate that Asarco’s CERCLA contribution claim in Asarco I arises, in part, from Atlantic Richfield’s alleged concealment of contamination from the zinc fuming plant. ¶20 Asarco asserts that the instant case’s subject matter nonetheless differs from that of Asarco I because this case concerns Atlantic Richfield’s “concealment of schematics and design documents it was under an obligation to disclose, and its affirmative misrepresentations to Asarco, and to the EPA.” In its state court complaint, Asarco asserts that Atlantic Richfield deceived the EPA by “not disclos[ing] any of its own releases of hazardous substances at the Site in response to [the EPA’s] requests [for information regarding Atlantic Richfield’s historical waste disposal practices]. [Atlantic Richfield] represented that it operated a closed circuit, noncontact cooling system [at the zinc fuming plant].” Asarco asserts further that Atlantic Richfield’s modification of the cooling system contributed to the Site’s contamination. Asarco’s breach of contract claim alleges that Atlantic Richfield “failed to supply Asarco with copies of all authorizations, permits, plans, drawings, design, records, and licenses, which showed its release and discharge of hazardous substances into the environment during [Atlantic Richfield’s] ownership and operation of the” zinc fuming plant. Its breach of the covenant of good faith and fair dealing claim alleges that Atlantic Richfield “wrongfully withheld the Contamination Documents and actively concealed its contamination of the environment during its ownership and operation of the [zinc fuming plant] as a pretext to avoid its contractual obligations.” Asarco’s factual allegations demonstrate that its 12 claims of “concealment” and “affirmative misrepresentations” arise from the Site’s contamination during Atlantic Richfield’s ownership and operation of the zinc fuming plant. Moreover, Asarco’s indemnification claim alleges that Atlantic Richfield is obligated to indemnify Asarco for Atlantic Richfield’s “share of the claims, liabilities, damages, losses, costs and expenses attributable to the Claims . . . that arose out of or resulted from [Atlantic Richfield’s] construction, ownership and operation of the” zinc fuming plant. Asarco therefore is seeking the same relief it sought in Asarco I—that Atlantic Richfield was “liable for [its] equitable share[ ] of any overpayment incurred by Asarco” in remediating contamination at the Site. ¶21 Based on our review of the pleadings and their incorporated exhibits and materials, we conclude that the subject matter is the same in both cases because both cases “arise from the same underlying basis”—Atlantic Richfield’s responsibility for contamination at the Site that allegedly resulted from its ownership and operation of the zinc fuming plant. Touris, ¶ 17; Olsen, ¶ 23. ¶22 Asarco’s contentions ring somewhat hollow when considering its representation during oral argument on the motion for judgment on the pleadings. Asarco stated that if the Ninth Circuit Court of Appeals were to reverse the federal district court’s decision in Asarco I, it “would seek removal” of its state-law claims to the federal district court. In other words, Asarco acknowledged that it would seek to have the federal district court exercise supplemental jurisdiction over its state-law claims. 28 U.S.C. § 1367 governs supplemental jurisdiction and provides federal courts with “supplemental jurisdiction over all other claims that are so related to claims in the action within such original 13 jurisdiction that they form part of the same case or controversy.” 28 U.S.C. § 1367(a). In determining whether a federal court has the authority to exercise supplemental jurisdiction over state-law claims, the United States Supreme Court looks to whether the federal claims and the state-law claims “derive from a common nucleus of operative fact.” E.g., DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 351, 126 S. Ct. 1854, 1866 (2006); City of Chi. v. Int’l College of Surgeons, 522 U.S. 156, 165, 118 S. Ct. 523, 529 (1997); United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S. Ct. 1130, 1138 (1966). In seeking to remove the instant case to the federal district court, Asarco therefore would have to demonstrate that its claims in both cases “derive from a common nucleus of operative fact.” See DaimlerChrysler Corp., 547 U.S. at 351, 126 S. Ct. at 1866. ¶23 In like manner, our claim preclusion precedent counsels that the issues in two actions are the same, or relate to the same subject matter, when “[t]here is a common nucleus of operative facts underlying” the claims in both cases. Brilz, ¶ 25. Whether the subject matter is the same in both cases requires similar analysis. Brilz, ¶ 23 (analyzing whether the issues in two cases are the same and concluding that “claim preclusion applies where the second suit arises from the same underlying basis or subject matter as the first suit”). As shown above, the pleadings demonstrate that “there is a common nucleus of operative facts underlying” both actions—Atlantic Richfield’s alleged acts, and concealment of those acts, that produced contamination at the Site. Brilz, ¶ 25. Accordingly, we conclude that the issues in both cases relate to the same subject matter. ¶24 Because the subject matter is the same and the issues in both cases relate to Atlantic Richfield’s alleged concealment of its contamination, we consider whether 14 Asarco could have raised in Asarco I the claims it advances here. Asarco first asserts that the District Court erred by not applying the “fraud exception” to claim preclusion. Asarco contends that its claims cannot be barred by claim preclusion because Atlantic Richfield “fraudulently concealed the information giving rise to Asarco’s state law claims, and thereby prevented Asarco from timely bringing such claims under the federal court’s supplemental jurisdiction during the CERCLA litigation.” Asarco alleges that it “did not have the information necessary to fully realize the ramifications of [Atlantic Richfield’s] fraudulent conduct and the existence of state law claims until May 1, 2014.” By that point, Asarco contends, “discovery had closed, expert deadlines had passed and expert disclosures had been made, and the deadline to amend pleadings had long since passed.” Consequently, Asarco contends that it did not have sufficient time to raise its state-law claims in Asarco I. ¶25 Atlantic Richfield counters that Asarco’s suggested rule “would allow a plaintiff with both state and federal claims arising from the same facts to file only its federal claims in a federal court action, wait to see if those claims were successful, and, if not, turn around and file its state claims in a state court action.” Atlantic Richfield contends that “Asarco had ample means in the federal court to develop its allegations of fraud and, in fact, did develop the very evidence it now wants to bring in Montana’s courts.” Accordingly, Atlantic Richfield claims that Asarco could have added its state-law claims under “the federal court’s liberal rules of amendment.” ¶26 The law of claim preclusion “reflects the expectation that parties who are given the capacity to present their ‘entire controversies’ shall in fact do so.” Brilz, ¶ 24 15 (quoting Restatement (Second) of Judgments § 24 cmt. a). As such, claim preclusion bars a party from litigating claims that “could have been litigated in the first action.” Brilz, ¶ 21 (citing Wiser, ¶ 17; Somont Oil Co. v. A & G Drilling, Inc., 2008 MT 447, ¶ 11, 348 Mont. 12, 199 P.3d 241) (emphasis in original). Consequently, claim preclusion may bar a party “from litigating a matter that has never been litigated and that may involve valid rights to relief. The rationale here is to force parties to raise such matters in their first suit in the interest of judicial economy and avoiding the expense and vexation of multiple suits.” Brilz, ¶ 21. ¶27 Asarco’s assertion that the District Court erred by not applying claim preclusion’s “fraud exception” is misplaced. We have not recognized a blanket “fraud exception” to claim preclusion. In fact, we recently concluded that a party’s fraud claims were barred by claim preclusion because those claims could have been raised in the first action. Estate of Kinnaman v. Mt. West Bank, N.A., 2016 MT 25, 382 Mont. 153, 365 P.3d 486 (concluding that a party was “barred from reopening issues [including fraudulent inducement, constructive fraud, and actual fraud] that were or should have been determined in the prior suit”). ¶28 We are unpersuaded by Asarco’s further assertions that it did not have sufficient time to raise its state-law claims in Asarco I. Asarco alleges that it knew the facts underlying its claims on May 1, 2014; the federal district court entered its summary judgment order in Asarco I on August 26, 2014. The District Court found that despite Asarco’s “allegations of fraud and concealment, it is fairly clear that Asarco knew generally of [the facts underlying its state-law claims] in March 2013 and at least by 16 February 2014.” Even taking Asarco’s factual representation as true, the facts that form the basis of its complaint in the instant action—e.g., the contractual relationship between the parties, the Site’s alleged contamination by Atlantic Richfield’s zinc fuming plant, Asarco’s payments to clean up the Site, and Atlantic Richfield’s concealment of facts and misrepresentations to Asarco and the EPA—were known to Asarco more than three months before the federal district court’s final judgment on the merits in Asarco I. Because the subject matter of both cases arose from the same underlying basis, the federal district court could have exercised supplemental jurisdiction over Asarco’s state- law claims in Asarco I. See 28 U.S.C. § 1367(a) (providing that a federal court may exercise supplemental jurisdiction over state-law claims “that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy”). ¶29 Although, as Asarco asserts, the deadline to amend its pleadings as a matter of course had passed, the Federal Rules of Civil Procedure provide that when a party seeks leave to amend the party’s pleading, “leave shall be freely given when justice so requires.” Fed. R. Civ. P. 15(a). In the Ninth Circuit, “there exists a presumption . . . in favor of granting leave to amend,” if there is no showing of undue delay, bad faith or dilatory motive on the part of the movant, undue prejudice to the opposing party, repeated failure to cure deficiencies by amendments previously allowed, or futility of amendment. Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (emphasis in original); Brilz, ¶ 29 (analyzing Ninth Circuit policy regarding leave to amend under Fed. R. Civ. P. 15(a) and citing Eminence Capital, LLC, 316 F.3d at 1052). “In light of this 17 policy towards amendments . . . it is clear that [Asarco] could have sought to amend [its] complaint in the federal proceeding.” Brilz, ¶ 29. Accordingly, we conclude that Asarco’s claims at issue here could have been raised in Asarco I. ¶30 Finally, Asarco takes issue with the District Court’s conclusion that the federal court would have retained supplemental jurisdiction over the state-law claims following the court’s dismissal of the CERCLA claim in Asarco I. Asarco asserts that the general rule under federal case law is for federal courts to not exercise continuing supplemental jurisdiction over state-law claims when all federal claims are dismissed in advance of trial. Montana federal district courts, Asarco contends, adhere to this general rule. Moreover, Asarco asserts, the language of the Restatement (Second) of Judgments § 25 “establishes that dismissal of federal claims in advance of trial is one situation in which it is ‘clear’ that the federal court would decline to exercise supplemental jurisdiction.” Asarco therefore alleges that the federal district court would have declined to exercise continuing supplemental jurisdiction over its state-law claims because those claims were not developed, additional discovery would have been required, and the state-law claims had not been litigated in the federal forum by the time summary judgment was granted on the CERCLA claim. ¶31 The Restatement (Second) of Judgments § 25, entitled “Exemplifications of General Rule Concerning Splitting,” provides that claim preclusion applies even when a party is prepared “(1) To present evidence or grounds or theories of the case not presented in the first action, or (2) To seek remedies or forms of relief not demanded in the first action.” Comment e illustrates an exception to this general rule: 18 A given claim may find support in theories or grounds arising from both state and federal law. When the plaintiff brings an action on the claim in a court, either state or federal, in which there is no jurisdictional obstacle to his advancing both theories or grounds, but he presents only one of them, and judgment is entered with respect to it, he may not maintain a second action in which he tenders the other theory or ground. If however, the court in the first action would clearly not have had jurisdiction to entertain the omitted theory or ground (or, having jurisdiction, would clearly have declined to exercise it as a matter of discretion), then a second action in a competent court presenting the omitted theory or ground should be held not precluded. Restatement (Second) of Judgments § 25 cmt. e (1982). Comment e therefore illustrates that claim preclusion would not apply in the instant case if it could be shown that the federal district court would have clearly declined to maintain jurisdiction over Asarco’s supplemental state-law claims following its dismissal of the CERCLA claim. ¶32 We decline to speculate whether the federal district court would have continued to exercise supplemental jurisdiction over Asarco’s state-law claims—had Asarco raised them—after granting Atlantic Richfield’s summary judgment motion in Asarco I. Such speculation defeats the policy of judicial economy and “a definite end to litigation” that the claim preclusion doctrine is intended to advance. Baltrusch, ¶ 15. The question arises here only because the federal district court was not given the opportunity to decide for itself whether to retain jurisdiction over Asarco’s state-law claims. Because Asarco could have brought its state-law claims before the federal district court in Asarco I, we conclude that the District Court correctly determined that claim preclusion bars Asarco’s action. 19 CONCLUSION ¶33 We affirm the District Court’s order granting Atlantic Richfield’s motion for judgment on the pleadings. /S/ BETH BAKER We Concur: /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA /S/ JIM RICE

April 12, 2016

c7fe548b-6859-4ea0-9292-d3ed591a2ea6

Montana Immigrant Justice Alliance

2016 MT 104

DA 15-0213

Montana

Montana Supreme Court

DA 15-0213 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 104 MONTANA IMMIGRANT JUSTICE ALLIANCE, MEA-MFT; and ALISHA BLAIR, Plaintiffs and Appellees. v. GOVERNOR STEVE BULLOCK, in his official capacity; ATTORNEY GENERAL TIMOTHY C. FOX, in his official capacity; MONTANA BOARD OF REGENTS OF HIGHER EDUCATION; COMMISSIONER OF HIGHER EDUCATION CLAYTON CHRISTIAN; in his official capacity; and the STATE OF MONTANA, Defendants and Appellants. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. BDV 2012-1042 Honorable Jeffrey M. Sherlock, Presiding Judge COUNSEL OF RECORD: For Appellant: Timothy C. Fox, Montana Attorney General, Dale Schowengerdt, Solicitor General, Melissa Schlichting, Assistant Attorney General, Helena, Montana For Appellee: Brian Miller, Morrison, Sherwood, Wilson, and Deola, PLLP, Helena, Montana Shahid Haque-Hausrath, Border Crossing Law Firm, P.C., Helena, Montana For Amicus ACLU of Montana Foundation: Mark L. Stermitz, Crowley Fleck PLLP, Missoula, Montana James Park Taylor, ACLU of Montana Foundation, Missoula, Montana May 10 2016 Case Number: DA 15-0213 2 Submitted on Briefs: March 16, 2016 Decided: May 10, 2016 Filed: __________________________________________ Clerk 3 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 In November 2012 the voters of Montana passed Legislative Referendum 121 (LR 121) by a wide margin. The referendum, codified at § 1-1-411, MCA, served to deny certain state services to individuals defined by the law to be “illegal aliens.” Before the law went into effect, the Montana Immigrant Justice Alliance (MIJA) sought declaratory and injunctive relief from its provisions. The District Court granted MIJA’s request in part, denied it in part, and awarded MIJA attorney fees. The State appeals both the District Court’s order granting MIJA summary judgment and its order awarding MIJA attorney fees. We affirm in part and reverse in part. ISSUES ¶2 We address the following issues on appeal: ¶3 Did the District Court err in concluding that MIJA has standing to challenge LR 121? ¶4 Did the District Court err in concluding that LR 121 is preempted by federal law? ¶5 Did the District Court abuse its discretion by awarding attorney fees to MIJA? FACTUAL AND PROCEDURAL BACKGROUND ¶6 During the 2011 legislative session, the Montana legislature passed House Bill 638, an act denying certain state-funded services to people deemed “illegal aliens,” and submitted the act to the voters of Montana as a legislative referendum. The referendum, LR 121, appeared on the November 6, 2012 ballot and was adopted by Montana voters by a wide margin. LR 121 was then codified at § 1-1-411, MCA, and went into effect on January 1, 2013. (For the sake of brevity, we generally refer to the law as “LR 121.”) 4 ¶7 The statute, entitled “Certain state services denied to illegal aliens,” reads in its entirety: (1) To the extent allowed by federal law and the Montana constitution and notwithstanding any other state law, a state agency may not provide a state service to an illegal alien and shall comply with the requirements of this section. (2) To determine whether an applicant for a state service is an illegal alien, the agency may use the systematic alien verification for entitlements [SAVE] program provided by the United States department of homeland security or any other lawful method of making the determination. (3) A state agency shall notify appropriate personnel in immigration and customs enforcement under the United States department of homeland security or its successor of any illegal alien applying for a state service. (4) An agency shall require a person seeking a state service to provide proof of United States citizenship or legal alien status. (5) A state agency shall execute any written agreement required by federal law to implement this section. (6) As used in this section, the following definitions apply: (a) “Agency” means a department, board, commission, committee, authority, or office of the legislative or executive branches of state government, including a unit of the Montana university system. (b) “Illegal alien” means an individual who is not a citizen of the United States and who has unlawfully entered or remains unlawfully in the United States. (c) “State service” means a payment of money, the grant of a state license or permit, or the provision of another valuable item or service under any of the following programs and provisions of law: (i) employment with a state agency; (ii) qualification as a student in the university system for the purposes of a public education, as provided in 20-25-502; (iii) student financial assistance, as provided in Title 20, chapter 26; (iv) issuance of a state license or permit to practice a trade or profession, as provided in Title 37; (v) unemployment insurance benefits, as provided in Title 39, chapter 51; (vi) vocational rehabilitation, as provided in Title 53, chapter 7; (vii) services for victims of crime, as provided in Title 53, chapter 9; (viii) services for the physically disabled, as provided in Title 53, chapter 19, parts 3 and 4; (ix) a grant, as provided in Title 90. Section 1-1-411, MCA. 5 ¶8 The Montana Immigrant Justice Alliance is a Helena based non-profit organization dedicated to advancing the rights of immigrants in Montana. Among its members are Mexican citizens who entered the United States without being inspected by a customs or immigration official, but who have since obtained lawful permanent residence status. Immigrants in this situation fear that LR 121’s definition of “illegal alien” includes them because they entered the United States unlawfully, and that accordingly they will be deprived of state services even though they now are considered documented, lawful immigrants by the Department of Homeland Security. ¶9 Motivated in part by this fear, MIJA filed a complaint in District Court on December 7, 2012, seeking declaratory and injunctive relief from LR 121. The labor association, MEA-MFT, and a 22 year old Montana resident named Alisha Blair joined MIJA as plaintiffs. The complaint named as defendants various government officials tasked with enforcing provisions of LR 121, including the Governor, the Attorney General, and the Commissioner of Higher Education, as well as the Board of Regents of Higher Education and the State of Montana (collectively the State). ¶10 In support of their request for a preliminary injunction, the plaintiffs argued they were entitled to injunctive relief because the referendum violated certain constitutional rights and was preempted by federal law. The District Court denied the plaintiffs’ request for a preliminary injunction as to the majority of LR 121, but enjoined the use of the definition of “illegal alien” in section 1(6)(b) (codified at § 1-1-411(6)(b), MCA) so as to preclude the State from using an individual’s unlawful entry into the United States as a factor in determining that individual’s entitlement to state benefits. The District 6 Court also issued a limiting construction to Section 1(2) of LR 121 (codified at § 1-1-411(2), MCA) so that when determining who is entitled to benefits, the State may not rely solely on the SAVE program but “will further use other lawful methods of making a determination based on federal resources.” ¶11 The State then filed a motion to dismiss the case for lack of standing, arguing that any alleged injury to plaintiffs caused by LR 121 was abstract and speculative because the law had not been enforced against anyone to date. The District Court agreed that MEA-MFT and Alisha Blair did not have standing and granted the State’s motion as to those two plaintiffs. However, the District Court denied the State’s motion to dismiss MIJA for lack of standing, finding MIJA’s members’ “fear of trouble from LR 121 is reasonable” and that declining to review LR 121 would “immunize the referendum from review.” ¶12 In the spring of 2014, the parties filed cross motions for summary judgment and assured the District Court that no factual issues prevented a ruling on the motions. MIJA moved for summary judgment on the issue of federal preemption. The State moved for summary judgment on MIJA’s constitutional claims as well as the preemption claim. Following full briefing and a hearing on the motions, the District Court found that LR 121 was preempted in its entirety, with one exception, and granted MIJA’s motion for summary judgment as to all but section 1(3) of LR 121 (codified at § 1-1-411(3), MCA), which requires the State to notify the US Department of Homeland Security of any illegal alien applying for a state service. The District Court simultaneously denied the State’s motion for summary judgment, except as to section 1(3). 7 ¶13 After the District Court found that LR 121 was preempted by federal law, MIJA filed a motion for attorney fees. The District Court denied the motion. However, four days after the District Court denied MIJA’s motion for attorney fees, this Court decided the case of City of Helena v. Svee, 2014 MT 311, 377 Mont. 158, 339 P.3d 32. MIJA then filed a motion to amend the District Court’s earlier ruling denying attorney fees, arguing that this Court’s ruling in Svee constituted a notable change in the law concerning the award of attorney fees in declaratory judgment actions. The District Court agreed with MIJA’s interpretation of Svee, vacated its November 21, 2014 order denying fees, and awarded MIJA attorney fees. The State now appeals the District Court’s June 20, 2014 order on cross motions for summary judgment and the order awarding attorney fees. STANDARD OF REVIEW ¶14 We review a district court’s entry of summary judgment de novo. McClue v. Safeco Ins. Co., 2015 MT 222, ¶ 8, 380 Mont. 204, 354 P.3d 604 (citing Albert v. City of Billings, 2012 MT 159, ¶ 15, 365 Mont. 454, 282 P.3d 704). “Summary judgment is appropriate when the moving party demonstrates both the absence of any genuine issues of material fact and entitlement to judgment as a matter of law.” Albert, ¶ 15 (citing M. R. Civ. P. 56). If there is no dispute of material fact, we review whether the district court correctly applied the law. Svee, ¶ 7 (citing Kalispell Educ. Ass’n v. Bd. of Trustees, 2011 MT 154, ¶ 9, 361 Mont. 115, 255 P.3d 199). A district court’s determinations regarding standing and federal preemption are questions of law which we review for correctness. Aspen Trails Ranch, LLC v. Simmons, 2010 MT 79, ¶ 30, 356 Mont. 41, 230 P.3d 808; see e.g. Fenno v. Mountain West Bank, 2008 MT 267, 345 Mont. 161, 192 P.3d 224. 8 ¶15 “This Court reviews for correctness a district court’s conclusion regarding the existence of legal authority to award attorney fees.” Svee, ¶ 7 (citing Hughes v. Ahlgren, 2011 MT 189, ¶ 10, 361 Mont. 319, 258 P.3d 439). If legal authority exists, we review a district court’s order granting or denying attorney fees for abuse of discretion. Svee, ¶ 7 (citing Hughes, ¶ 10). DISCUSSION ¶16 Did the District Court err in concluding that MIJA has standing to challenge LR 121? ¶17 As noted above, the District Court issued a limited preliminary injunction concerning section 1(6)(b) of LR 121 (codified at § 1-1-411(6)(b), MCA) so that it reads as follows: (b) “Illegal alien” means an individual who is not a citizen of the United States and who has unlawfully entered or remains unlawfully in the United States.” Following the District Court’s injunction, the State filed a notice of stipulation in which it informed the court that the State “will not use an individual’s unlawful entry into the country as a factor in determining whether that person is eligible for benefits.” The State then couched its stipulation as a “disavowal” of that part of the law and used its disavowal to argue that MIJA no longer had standing to challenge LR 121 because there was no longer a credible threat of enforcement. The District Court determined that the State’s disavowal was insufficient to deprive MIJA of standing. We agree. ¶18 The 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. This limitation derives from the “cases at law and in equity” language of Article VII, Section 4(1) of the 9 Montana Constitution, which “embodies the same limitations as are imposed on federal courts by the ‘case or controversy’ language of Article III” of the United States Constitution. Plan Helena, Inc. v. Helena Reg’l Airport Auth. Bd., 2010 MT 26, ¶ 6, 355 Mont. 142, 226 P.3d 567. Among the central components of justiciability are the doctrines of standing and ripeness. Reichert, ¶ 54. ¶19 “The question of standing addresses whether a litigant is entitled to have the court decide the merits of a particular dispute.” Chipman v. Northwest Healthcare Corp., 2012 MT 242, ¶ 25, 366 Mont. 450, 288 P.3d 193. In order to have standing, “the complaining party must clearly allege past, present or threatened injury to a property or civil right, and the alleged injury must be one that would be alleviated by successfully maintaining the action.” Chipman, ¶ 26. Although we generally prohibit a litigant from vindicating the legal rights of a third party, [i]t is well established that an association has standing to bring suit on behalf of its members, even without a showing of injury to the association itself, when (a) at least one of its members would have standing to sue in his or her own right, (b) the interests the association seeks to protect are germane to its purpose, and (c) neither the claim asserted nor the relief requested requires the individual participation of each allegedly injured party in the lawsuit. Heffernan v. Missoula City Council, 2011 MT 91, ¶ 43, 360 Mont. 207, 255 P.3d 80. In this case, MIJA is claiming associational standing.1 1 MIJA argued for the first time on appeal that in addition to associational standing, it also has standing in its own right to challenge LR 121 because the law threatens to divert MIJA’s resources and frustrate its mission. However, it is well established that we will not address an issue raised for the first time on appeal, nor will we address a party’s change in legal theory. Becker v. Rosebud Operating Servs., 2008 MT 285, ¶ 17, 345 Mont. 368, 191 P.3d 435. Accordingly, we decline to address MIJA’s argument that it has direct, as opposed to associational, standing. 10 ¶20 Ripeness can be viewed as one of “the time dimensions of standing” because it is called into question when a party is complaining of a threat of future injury. Reichert, ¶ 55 (quoting Charles Alan Wright et al., Federal Practice and Procedure vol. 13B, § 3531.12, 163 (3d ed. West 2008)). “Ripeness asks whether an injury that has not yet happened is sufficiently likely to happen or, instead, is too contingent or remote to support present adjudication.” Reichert, ¶ 55. “Ripeness is predicated on the central perception that courts should not render decisions absent a genuine need to resolve a real dispute; hence, cases are unripe when the parties point only to hypothetical, speculative, or illusory disputes as opposed to actual, concrete conflicts.” Reichert, ¶ 54. In this case, the State has challenged both MIJA’s associational standing and the ripeness of MIJA’s claims. ¶21 MIJA easily satisfies the second and third requirements of associational standing. MIJA’s mission statement declares that the organization seeks “[t]o combat the mistreatment of immigrants from xenophobia, discrimination, harassment, or racial profiling[,] . . . to promote policies that welcome and support the growth of immigrant communities in our state, and to combat policies that marginalize migrant communities.” LR 121 was enacted to deter “illegal aliens” from coming to Montana and to prevent them from accessing state services if they do come. Because the interests MIJA is seeking to protect by challenging the constitutionality of LR 121 are germane to its purpose, MIJA satisfies the second requirement of associational standing. Heffernan, ¶ 43. Additionally, “a request for declaratory and injunctive relief does not require participation by individual association members,” so MIJA satisfies the third requirement 11 for associational standing. Heffernan, ¶ 46. MIJA has associational standing then if “at least one of its members would have standing to sue in his or her own right.” Heffernan, ¶ 43. ¶22 MIJA’s members claim standing to challenge LR 121 based on a threat of future injury. This is the intersection of the doctrines of standing and ripeness: MIJA’s members must show their claims are sufficiently ripe to afford them standing to challenge the law before it is enforced against them. MIJA submitted affidavits from multiple immigrants who arrived in the United States unlawfully but who have since obtained lawful immigration status. LR 121’s definition of “illegal alien”—“an individual who is not a citizen of the United States and who has unlawfully entered or remains unlawfully in the United States,” § 1-1-411(6)(b), MCA—clearly encompasses these individuals. Thus, by its own terms, LR 121 would deprive the affiants of state services even though they currently have lawful immigration status. The State maintains that its disavowal of the definition of “illegal alien” renders the threat of enforcement against these affiants sufficiently “hypothetical, speculative, or illusory” to make their claims unripe, thereby depriving the affiants of standing. Reichert, ¶ 54. ¶23 MIJA points to Gryczan v. State, 283 Mont. 433, 942 P.2d 112 (1997), as an example of a case in which this Court determined plaintiffs had standing to challenge a law before the law was enforced against them. In Gryczan, we were asked to review Montana’s statute criminalizing consensual sexual relations between adults of the same gender. The challenge to the statute was brought by three men and three women who were homosexuals and who had engaged in conduct that violated the statute. Gryczan, 12 283 Mont. at 439, 942 P.2d at 115-16. At the time the case was brought, the statute was 24 years old and had been amended as recently as six years prior, but it had never been enforced and no one had ever been prosecuted under it for engaging in consensual homosexual sexual conduct. Gryczan, 283 Mont. at 443, 942 P.2d at 118. The plaintiffs brought a declaratory judgment action, claiming that although they had never been arrested or prosecuted under the statute, they had been injured by its existence because the statute damaged their self-esteem and dignity and made them fearful that they would be prosecuted, they would lose their livelihood, and they would lose custody of their children. Gryczan, 283 Mont. at 441, 942 P.2d at 117. The State maintained that mere apprehension of prosecution was insufficient to confer standing because “there is no evidence of a credible threat of prosecution under the statute.” Gryczan, 283 Mont. at 441, 942 P.2d at 117. We agreed with the plaintiffs and held that [b]ecause the legislature does not regard the statute as moribund and because enforcement has not been foresworn by the Attorney General, we agree that Respondents suffer a legitimate and realistic fear of criminal prosecution along with other psychological harms. Respondents are precisely the individuals against whom the statute is intended to operate. This is sufficient to give Respondents standing to challenge the constitutionality of the statute. Moreover, to deny Respondents standing would effectively immunize the statute from constitutional review. Gryczan, 283 Mont. at 446, 942 P.2d at 120. ¶24 The State in this case distinguishes our holding in Gryczan from the case at bar by highlighting the fact that the Attorney General in this case has “foresworn” enforcement of LR 121’s definition of “illegal alien.” The State would have us deny MIJA standing because the current Attorney General has “disavowed” one part of the law. However, we 13 noted in Gryczan that “there is nothing to prevent a county attorney from enforcing the statute against consenting adults,” and the same concern operates here. Gryczan, 283 Mont. at 444, 942 P.2d at 119. A new Attorney General would not be bound by the present Attorney General’s decision not to enforce the challenged definition, nor would the present Attorney General be legally bound by his earlier promise not to enforce the definition.2 Moreover, LR 121 prohibits a state agency from providing a state service to an “illegal alien.” The statute defines “agency” as “a department, board, commission, committee, authority, or office of the legislative or executive branches of state government, including a unit of the Montana university system.” Section 1-1-411(6)(a), MCA. Thus, the number of government officials to whom enforcement of LR 121 might fall vastly exceeds the number of officials who could have enforced the deviate sexual conduct statute at issue in Gryczan, rendering the Attorney General’s disavowal of the definition of “illegal alien” of even less consequence here than would have been the case in Gryczan. ¶25 Furthermore, “disavowal” does not address the other concerns raised in Gryczan and raised here. The legislature certainly does not consider LR 121 moribund, as it was submitted to the voters in 2012. MIJA’s members suffer a legitimate and realistic fear 2 Attorney General Opinions are binding on state-employed attorneys, but they are not binding on District Courts or the Supreme Court. Section 2-15-501(7), MCA; O’Shaughnessy v. Wolfe, 212 Mont. 12, 17, 685 P.2d 361, 364 (1984). “Courts never look to administrative interpretation when the language [of a statute] is clear beyond cavil. To hold otherwise would be to say that administrators and executive officials, interpreting the effect of statutes, could undermine the enactments by official action and nullify otherwise validly adopted laws.” O’Shaughnessy, 212 Mont. at 17, 685 P.2d at 364. In this case, the Attorney General’s “disavowal” of the definition of “illegal alien” is not even set forth in an official Attorney General Opinion and is thus of no precedential value. 14 that LR 121’s definition of “illegal alien” will be interpreted by many state officials to include them, which would render them ineligible for state services for which they would otherwise be eligible. The MIJA members who came to the United States unlawfully and settled in Montana are precisely the individuals against whom the law is intended to operate, and denying them standing to challenge LR 121 would effectively immunize the statute from constitutional review. In fact, if the State’s disavowal was enough to deprive MIJA of standing in this case, the invocation of disavowal—which has no basis in Montana law3 and is at odds with the executive branch’s constitutional duty to “see that the laws are faithfully executed,” Mont. Const. art. VI, § 4(1)—would enable the State in any case to negate a claim of standing premised on the threat of future injury. Our constitution “protects against the Government; it does not leave us at the mercy of noblesse oblige.” United States v. Stevens, 559 U.S. 460, 480, 130 S. Ct. 1577, 1591 (2010). Like the US Supreme Court, we will “not uphold an unconstitutional statute merely because the Government promised to use it responsibly.” Stevens, 559 U.S. at 480, 130 S. Ct. at 1591. 3 The State’s use of the term “disavowal” seems to come from our use of the term in Gryczan, when we said “at least one circuit court has held that nothing short of an express unconditional statement that the law will not be enforced will bar plaintiffs from challenging a law. Here, the State has made no such disavowal.” Gryczan, 283 Mont. at 445, 942 P.2d at 119-20 (internal citation omitted). However, in the Eight Circuit case we referenced in Gryczan, the court went on to say that “[p]ast arrests or threats of arrest, while relevant, are not necessary to establish the justiciability of plaintiffs’ claim . . . . Where plaintiffs allege an intention to engage in a course of conduct arguably affected with a constitutional interest which is clearly proscribed by statute, courts have found standing to challenge the statute, even absent a specific threat of enforcement.” United Food & Commercial Workers Int’l Union v. IBP, Inc., 857 F.2d 422, 427-28 (8th Cir. 1988). The justiciability of a pre-enforcement challenge necessarily depends on the facts of the particular case and the language of the statute in question. Contrary to the State’s interpretation, our phrasing in Gryczan did not establish a bright line test for justiciability. 15 ¶26 The affiants in this case have shown that if the definition of “illegal alien” is enforced, they would be ineligible for unemployment insurance benefits if they lost their jobs; they would be ineligible for victim services if they were the victims of crime; they would be ineligible to become students in a state university or to receive financial aid in pursuit of higher education; they would be ineligible for vocational rehabilitation, services for the disabled, or employment with a state agency; and they would not be allowed to obtain a license to practice a trade or profession. The State’s assurance that LR 121 will not be enforced against them under the current administration is insufficient to render MIJA’s claims “hypothetical, speculative, or illusory.” Reichert, ¶ 54. MIJA’s claims are ripe and its members would have standing to sue in their own right, even before the challenged provision is enforced. This holding comports with the purpose of the Uniform Declaratory Judgment Act, which “is declared to be remedial; its purpose is to settle and to afford relief from uncertainty and insecurity with respect to rights, status, and other legal relations; and it is to be liberally construed and administered.” Section 27-8-102, MCA. Thus, the District Court did not err in holding that MIJA has associational standing to bring this case. ¶27 Did the District Court err in concluding that LR 121 is preempted by federal law? ¶28 The Supremacy Clause of the US Constitution provides that federal law “shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” U.S. Const. art. VI, cl. 2. The Supremacy Clause endows Congress with the power to preempt 16 state law. Arizona v. United States, 132 S. Ct. 2492, 2500 (2012). Congress may preempt state law in three ways, generally referred to as express preemption, field preemption, and conflict preemption, the latter two being forms of implied preemption. Valle Del Sol Inc. v. Whiting, 732 F.3d 1006, 1022-23 (9th Cir. 2013). ¶29 Express preemption occurs when Congress enacts a statute that contains an express preemption provision. Arizona, 132 S. Ct. at 2500-01. Field preemption occurs when “the States are precluded from regulating conduct in a field that Congress, acting within its proper authority, has determined must be regulated by its exclusive governance.” Arizona, 132 S. Ct. at 2501. This determination is evident where there is “a framework of regulation so pervasive . . . that Congress left no room for the States to supplement it or where there is a federal interest . . . so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject.” Arizona, 132 S. Ct. at 2501 (internal quotations omitted). Conflict preemption occurs when a state law conflicts with a federal law, including cases in which “compliance with both federal and state regulations is a physical impossibility,” and cases in which “the challenged state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Arizona, 132 S. Ct. at 2501 (internal quotations omitted). ¶30 The federal government has “broad, undoubted power over the subject of immigration and the status of aliens,” stemming in part from its constitutional power to “establish an uniform Rule of Naturalization,” and in part from its “inherent power as sovereign to control and conduct relations with foreign nations.” Arizona, 132 S. Ct. at 2498 (citing U.S. Const. art. I, § 8, cl. 4). Because the “[p]ower to regulate immigration 17 is unquestionably exclusively a federal power,” a state law is field preempted if it attempts a regulation of immigration. De Canas v. Bica, 424 U.S. 351, 354, 96 S. Ct. 933, 936 (1976). A regulation of immigration is “essentially a determination of who should or should not be admitted into the country, and the conditions under which a legal entrant may remain,” but not “every state enactment which in any way deals with aliens is a regulation of immigration and thus per se pre-empted by this constitutional power.” De Canas, 424 U.S. at 355, 96 S. Ct. at 936. Although in many areas state laws are entitled to a presumption of non-preemption, when a state law attempts to regulate an area of significant and historical federal concern, like immigration, the state law is entitled to no such presumption. Valle Del Sol Inc., 732 F.3d at 1023. A. Express preemption ¶31 Some federal immigration statutes contain express preemption clauses, but many do not. Compare 8 U.S.C. § 1324a(h)(2), with 8 U.S.C. § 1621. As noted, LR 121 is entitled “Certain state services denied to illegal aliens.” The federal statutes governing alien eligibility for state or local public benefits do not contain an express preemption clause. 8 U.S.C. §§ 1621, 1622. Because Congress is capable of expressly declaring its intent to preempt state law, see e.g. 8 U.S.C. § 1324a(h)(2) (“The provisions of this section preempt any State or local law imposing civil or criminal sanctions (other than through licensing and similar laws) upon those who employ, or recruit or refer for a fee for employment, unauthorized aliens.”), the fact that it has not done so in the statutes regarding aliens’ eligibility for public benefits leads us to conclude that state laws in this realm are not expressly preempted. 18 B. Implied preemption ¶32 In this case, MIJA contends that LR 121 attempts a regulation of immigration and is both field and conflict preempted.4 The District Court agreed, finding both field and conflict preemption arising out of LR 121’s definition of “illegal alien” and LR 121’s empowerment of state officials to determine whether an immigrant is lawfully present. The State asserts that LR 121 is not field preempted as a regulation of immigration because it does not “purport[] to determine who can and cannot remain in the country.” The State also maintains that LR 121 does not conflict with federal law because “federal law either requires or expressly allows what LR 121 does.” In support of its position, the State notes that federal law occasionally uses the term “illegal alien.” See e.g. 8 U.S.C. § 1621(d); De Canas, 424 U.S. at 353, 96 S. Ct. at 935. It also notes that 8 U.S.C. § 1621 provides that aliens who are not “qualified aliens” are “not eligible for any State or local public benefit.” But the federal statute’s use of the defined term “qualified alien” underscores one of the essential problems with LR 121: it utilizes the term “illegal alien,” which is not a defined term in federal immigration law. This essentially leaves the decision about who qualifies as an “illegal alien” up to multiple state officials, and the definition’s applicability to various provisions of LR 121 creates eligibility determinations that are at odds with federal laws on the same subjects. 4 There is some debate in the briefing about whether MIJA has brought a facial challenge or an as applied challenge. Because we are deciding this case on preemption grounds, the distinction is of no consequence. Green Mt. R.R. Corp. v. Vermont, 404 F.3d 638, 644 (2d Cir. 2005). 19 1. Field Preemption ¶33 LR 121’s definition of “illegal alien” attempts a regulation of immigration by creating an immigration status that does not exist under federal law. Federal law uses many defined terms for various purposes, including “qualified alien,” 8 U.S.C. § 1641(b), “unauthorized alien,” 8 U.S.C. § 1324a(h)(3), and “eligible noncitizen,” 34 C.F.R. § 668.131, but it does not define the term “illegal alien,” and it does not have a comprehensive definition of “lawfully present,” Chaudhry v. Holder, 705 F.3d 289, 292 (7th Cir. 2013) (citing 8 U.S.C. § 1101) (“The Immigration and Nationality Act does not provide a statutory definition for ‘lawful immigration status.’”). These federally defined terms may encompass individuals who entered the country unlawfully but who have since been granted lawful immigration status pursuant to the discretion of federal officials. See e.g. 8 U.S.C. § 1229b. The State acknowledged that LR 121’s “definition of ‘illegal alien’ may be imperfect because it could be read to apply to those who entered the country unlawfully, but now have legal immigration status,” but the State maintains “that is not a defect of constitutional proportions.” We disagree. ¶34 The federal government occupies the field of classifying non-citizens for various purposes. As the Supreme Court stated, “[t]he central concern of the [Immigration and Nationality Act] is with the terms and conditions of admission to the country and the subsequent treatment of aliens lawfully in the country.” De Canas, 424 U.S. at 359, 96 S. Ct. at 938. For this reason, “[t]he States enjoy no power with respect to the classification of aliens.” Plyler v. Doe, 457 U.S. 202, 225, 102 S. Ct. 2382, 2399 (1982). Many cooperative state and federal programs require state agencies to verify an applicant’s 20 immigration status, but “state agents perform a ministerial rather than a discretionary function in verifying immigration status. That is, state agents merely access INS information to verify an applicant’s immigration status—no independent determinations are made and no state-created criteria are applied.” League of United Latin Am. Citizens v. Wilson, 908 F. Supp. 755, 770 (C.D. Cal. 1995). There is an essential difference between a state agency performing a ministerial function and a state agency performing a discretionary function: Permitting state agents, who are untrained—and unauthorized—under federal law to make immigration status decisions, incurs the risk that inconsistent and inaccurate judgments will be made. On the other hand, requiring state agents simply to verify a person’s status with the INS involves no independent judgment on the part of state officials and ensures uniform results consistent with federal determinations of immigration status. League of United Latin Am. Citizens, 908 F. Supp. at 770. ¶35 When a state law authorizes a state official to perform what is essentially a discretionary function with regard to immigration, courts have found that law to be preempted as an impermissible regulation of immigration. The Third Circuit held that certain Pennsylvania housing ordinances preventing “unauthorized aliens” from renting housing “constitute an impermissible regulation of immigration and are field pre-empted because they intrude on the regulation of residency and presence of aliens in the United States.” Lozano v. City of Hazleton, 724 F.3d 297, 317 (3d Cir. 2013). The Fifth Circuit held “that because the power to classify non-citizens is reserved exclusively to the federal government,” a section of a Texas ordinance that allows state officials to assess whether a noncitizen is “lawfully present” is preempted by federal law. Villas at Parkside Partners 21 v. City of Farmers Branch, Texas, 726 F.3d 524, 536-37 (5th Cir. 2013). The Eleventh Circuit held that an Alabama law prohibiting courts from enforcing contracts to which “unlawfully present” aliens are parties “constitutes a thinly veiled attempt to regulate immigration under the guise of contract law” and is thus preempted. United States v. Alabama, 691 F.3d 1269, 1296 (11th Cir. 2012). ¶36 Citing the Third, Fifth, and Eleventh Circuits’ rulings, the Ninth Circuit recently reviewed an Arizona law that required applicants for a driver’s license to submit proof of “authorized presence” in the United States. Ariz. Dream Act Coalition v. Brewer, 2016 U.S. App. LEXIS 6256, **27-29 (9th Cir. 2016). The Ninth Circuit held that Arizona’s policy of denying drivers’ licenses to DACA recipients based on its own notion of “authorized presence” is preempted by the exclusive authority of the federal government under the INA to classify noncitizens, [. . .] not because it denies state benefits to aliens, but because the classification it uses to determine which aliens receive benefits does not mirror federal law. Ariz. Dream Act Coalition, 2016 U.S. App. LEXIS 6256 at **34-35. For the same reason, we now hold that LR 121 attempts a regulation of immigration and is preempted by federal law, not because it denies state benefits to “illegal aliens,” but because the term “illegal aliens” is unknown to federal law, thus placing in the hands of state agents immigration status decisions not authorized under federal law. ¶37 Furthermore, LR 121’s mechanism for determining whether an applicant for state services is an “illegal alien” is in effect an attempt to regulate immigration, and is also field preempted by federal law. LR 121 requires that “[t]o determine whether an applicant for a state service is an illegal alien, the agency may use the systematic alien 22 verification for entitlements [SAVE] program provided by the United States department of homeland security or any other lawful method of making the determination.” Section 1-1-411(2), MCA. The State has failed to point to any federal resource or database apart from SAVE that can be used in a benefit eligibility inquiry, so we concern ourselves only with the SAVE program. ¶38 The limitations of the SAVE program have been addressed by courts before. In a case similar to the one at bar, the Fifth Circuit was asked to determine whether a city ordinance requiring a license to occupy a rented apartment was preempted by federal law. Villas, 726 F.3d at 526. Under the terms of the ordinance, in order to obtain a license to rent, an individual had to be “lawfully present” in the United States. The determination of who was “lawfully present” was to be made by querying the SAVE database. Villas, 726 F.3d at 533. “[T]he chief of that program testified that SAVE can provide only a non-citizen’s specific immigration status; it does not answer lawful presence or not.” Villas, 726 F.3d at 533 (internal quotations omitted). In other words, SAVE will tell a state official that a certain alien entered the United States on an F-1 visa, a K-1 visa, a green card, etc., but SAVE cannot tell a state official whether the alien originally entered the United States unlawfully or whether that alien remains unlawfully. Under LR 121, the information about lawful entry and presence is required for a state official to make a determination about whether an applicant for state services is an “illegal alien,” but that determination cannot be made solely by querying the SAVE database. As a result, the determination must be made by the state official. 23 ¶39 During discovery, MIJA deposed various state officials to elicit precisely how the state officials intended to determine whether an applicant is an “illegal alien.” When asked how a state agency would determine if someone “unlawfully remains” in the United States, none of the deponents representing administrative agencies could identify how the determination would be made. This “incurs the risk that inconsistent and inaccurate judgments will be made,” League of United Latin Am. Citizens, 908 F. Supp. at 770, and is one of the many reasons determinations about lawful presence are to be made solely by qualified federal agents, see Arizona, 132 S. Ct. at 2502. The risk of inconsistent and inaccurate judgments is further multiplied by LR 121’s authorizing state agents to make immigration status determinations using the SAVE program “or any other lawful method of making the determination.” Section 1-1-411(2), MCA. The “any other lawful method” language invites state agents to embark on an expedition through immigration laws and regulations without the benefit of guidance from qualified federal agents. The risk of inconsistent and inaccurate judgments issuing from a multitude of state agents untrained in immigration law and unconstrained by any articulated standards is evident. ¶40 As the Supreme Court said in Arizona v. United States, “[w]here Congress occupies an entire field, . . . even complementary state regulation is impermissible. Field preemption reflects a congressional decision to foreclose any state regulation in the area, even if it is parallel to federal standards.” 132 S. Ct. at 2502. Thus the fact that LR 121 attempts to limit its own interpretation to “the extent allowed by federal law,” § 1-1-411(1), MCA, is insufficient to save it from preemption because Congress has 24 occupied the particular field LR 121 attempts to regulate. The District Court did not err in finding that LR 121 was field preempted by federal law. 2. Conflict preemption ¶41 LR 121 is also conflict preempted because it “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Arizona, 132 S. Ct. at 2501 (internal quotations omitted). LR 121’s definition of “illegal alien” disqualifies for state services certain aliens who would otherwise be qualified for those services under federal law. ¶42 For example, “employment with a state agency” is one of the state services to which “illegal aliens” are not entitled under LR 121. Section 1-1-411(6)(c)(i), MCA. But employment of aliens is regulated by federal law and is to be decided by the definition of “unauthorized alien.” 8 U.S.C. § 1324a(a)(1)(a). An “unauthorized alien” is one who is not “(A) an alien lawfully admitted for permanent residence, or (B) authorized to be so employed by this Act or by the Attorney General.” 8 U.S.C. § 1324a(h)(3). As discussed above, there are many circumstances in which an alien originally enters the country unlawfully but is later admitted for permanent residence. In fact, many MIJA members who submitted affidavits in this case are in precisely this situation. Under federal law, they are not “unauthorized aliens,” and thus they would be eligible for employment with a state agency, but for LR 121’s expansive definition of “illegal alien.” This is a clear conflict with federal law. ¶43 Another example is LR 121’s disqualification of “illegal aliens” from attendance at a state university. Section 1-1-411(6)(c)(ii), MCA. Eligibility for federal public 25 benefits, including attendance at a public university, is regulated by federal law and is to be decided by the definition of “qualified alien.” 8 U.S.C. § 1611(c)(1)(B). A “qualified alien” includes aliens who are lawfully admitted for permanent residence under the INA, aliens who are granted asylum or refugee status under the INA, aliens whose deportation is being withheld under the INA, aliens who have been granted conditional entry under the INA, and several other classifications of aliens. 8 U.S.C. § 1641(b). This definition also encompasses individuals, like many of the MIJA affiants, who may have entered the country unlawfully but who now have lawful immigration status. Under federal law, the MIJA members who are permanent residents are “qualified aliens” for purposes of postsecondary education, and thus they would be eligible to attend a Montana university, but for LR 121’s expansive definition of “illegal alien.” This too is a clear conflict with federal law. ¶44 There are many other instances in which LR 121’s definition of “illegal alien” conflicts with federal law’s classification of various immigrants. LR 121 is therefore an “obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Arizona, 132 S. Ct. at 2501 (internal quotations omitted). The District Court did not err in concluding that LR 121 is conflict preempted by federal law. ¶45 Finally, we turn to the provision of LR 121 that was saved from preemption by the District Court. LR 121 contains a severability clause. H.B. 638, 62d Leg., Reg. Sess. (Mont. 2011). The District Court determined that LR 121’s mandatory reporting requirement was not preempted by federal law because “the federal government encourages this sort of notification,” see e.g. 8 U.S.C. § 1373(a); 8 U.S.C. § 1644, and the 26 notification could be effectuated independently of the preempted portions of the law. The District Court severed the reporting requirement, codified at § 1-1-411(3), MCA, from the remainder of LR 121 and sustained it, pursuant to the “well-established principle that a statute is not destroyed in toto because of an improper provision.” Reichart, ¶ 86. However, the mandatory reporting requirement, like the other improper provisions of LR 121, uses the term “illegal alien”: “[a] state agency shall notify appropriate personnel in immigration and customs enforcement under the United States department of homeland security or its successor of any illegal alien applying for a state service.” Section 1-1-411(3), MCA. A state official would not be able to carry out his or her reporting duty without first determining whether the person applying for a state service is an “illegal alien.” This raises all the problems discussed above. Because the reporting requirement is also dependent upon LR 121’s definition of “illegal alien,” we hold that it cannot be severed from the rest of the law; it too is preempted.5 ¶46 LR 121 was intended to force “illegal aliens . . . to leave Montana rather than use our services and take our jobs.” The definition of “illegal alien” is an essential part of the law; indeed, the law would serve no purpose if the definition of “illegal alien” were removed. Because the entirety of § 1-1-411, MCA, is infected with a definition of “illegal alien” that is unconstitutional under the Supremacy Clause, the entire statute is preempted by federal law. We therefore affirm the District Court to the extent it found 5 Of course, this holding does not prohibit state officials from communicating with the federal government about an individual’s immigration status, since state officials are entitled to do so absent LR 121. Ga. Latino Alliance for Human Rights v. Governor of Ga., 691 F.3d 1250, 1267 (11th Cir. 2012) (“Pursuant to 8 U.S.C. § 1357(g)(10), state officers may permissibly communicate with the federal government about ‘the immigration status of any individual,’ even absent a formalized agreement between the locality and federal government.”). 27 LR 121 was preempted by federal law, and we reverse the District Court to the extent it found § 1-1-411(3), MCA, to be severable and sustainable. ¶47 Did the District Court abuse its discretion by awarding attorney fees to MIJA? ¶48 The prevailing party in a civil action brought against the State of Montana is entitled to costs and reasonable attorney fees if the court finds that the State’s claims or defenses were “frivolous or pursued in bad faith.” Section 25-10-711(1)(b), MCA. “A claim or defense is frivolous or in bad faith when it is outside the bounds of legitimate argument on a substantial issue on which there is a bona fide difference of opinion.” Western Tradition P’ship v. AG of Mont., 2012 MT 271, ¶ 10, 367 Mont. 112, 291 P.3d 545 (citing Ostergren v. Dept. of Revenue, 2004 MT 30, ¶ 23, 319 Mont. 405, 85 P.3d 738) (internal quotations omitted). The Uniform Declaratory Judgment Act also entitles a prevailing party to “supplemental relief,” including an award of attorney fees, “whenever necessary or proper.” Section 27-8-313, MCA. However, “we have determined that an award of fees to the prevailing party is not warranted in every garden variety declaratory judgment action,” and in order to avoid “eviscerating the American Rule,” the reach of § 27-8-313, MCA, is “narrow.” Western Tradition P’ship, ¶ 11 (internal quotations omitted). ¶49 In this case, the District Court did not find the Attorney General’s defense of LR 121 to be frivolous or in bad faith. In fact, in its original order denying MIJA’s motion for attorney fees, the District Court noted that in none of the matters [raised by MIJA] did the State operate in bad faith. All of the disagreements between the parties were within the bounds of legitimate argument on which there were bona fide differences of 28 opinion . . . The Attorney General was defending, as is his duty, an enactment passed by 80 percent of the voting citizens of Montana. This topic was one which was important to a large number of Montanans. We agree with the District Court that the State’s defense of LR 121 was not frivolous or in bad faith. MIJA is therefore not entitled to attorney fees under § 25-10-711(1)(b), MCA, and the District Court did not abuse its discretion in so holding. ¶50 However, the District Court reconsidered its denial of attorney fees because it found that our decision in Svee “changed significantly” the allowance of attorney fees in declaratory judgment actions. We do not agree. Our holding in Svee did not change the rule that “courts analyzing a claim for fees in a declaratory judgment proceeding [must] make a threshold determination that equitable considerations support an award of attorneys’ fees.” Western Tradition P’ship, ¶ 12 (citing Mungas v. Great Falls Clinic, LLP, 2009 MT 426, ¶ 45, 354 Mont. 50, 221 P.3d 1230; Hughes, ¶¶ 13, 21; United Nat’l Ins. Co. v. St. Paul Fire & Marine Ins. Co., 2009 MT 269, ¶ 39, 352 Mont. 105, 214 P.3d 1260). Rather, Svee was one of the rare instances in which equitable considerations did support an award of attorney fees in a declaratory judgment action. ¶51 We found that equitable considerations supported an award of attorney fees in Svee because [t]he Svees sought to accomplish a low-cost repair of their roof in response to a notice from their insurance company about cancellation of their coverage. By so doing, they were named as defendants in both criminal and civil actions filed by the municipal government, in comparison to whom they had significantly less resources to litigate the alleged violation of the ordinance. 29 Svee, ¶ 21. That was a very different factual scenario than the one presented in Western Tradition Partnership. In Western Tradition Partnership we noted that “[t]he courts necessarily must use caution in awarding fees against the State in a ‘garden variety’ declaratory judgment action that challenges the constitutionality of a statute that the Attorney General, in the exercise of his executive power, has chosen to defend.” Western Tradition P’ship, ¶ 17. We held in that case that equitable considerations did not support an award of attorney fees even though the plaintiff “vindicated principles of constitutional magnitude” because “the State’s defense [of the challenged statute] also was grounded in constitutional principles and in an effort to enforce interests the executive deemed equally significant to its citizens.” Western Tradition P’ship, ¶ 20. ¶52 Svee did not change the law regarding awards of attorney fees in declaratory judgment actions; it merely represents one of the rare instances in which equitable considerations necessitated an award. The case at bar, however, is more like Western Tradition Partnership than Svee. In this case, the Attorney General exercised his power to defend a legislative referendum that had the support of the vast majority of Montana voters. In defending LR 121, the Attorney General grounded his arguments in constitutional principles, and although he was unsuccessful, his defense of the law was not frivolous or in bad faith. Moreover, LR 121 has not been enforced to date against MIJA’s members or anyone else. Central to our award of attorney fees in Svee was the fact that the Svees were named as defendants in both criminal and civil actions brought by the City of Helena. While the pre-enforcement nature of this case did not deprive 30 MIJA of standing, it does weigh against MIJA in an analysis of the equitable considerations regarding an award of attorney fees. ¶53 “We reverse a district court for abusing its discretion only when it acts arbitrarily without employment of conscientious judgment or exceeds the bounds of reason[,] resulting in substantial injustice.” Western Tradition P’ship, ¶ 21 (citing B Bar J Ranch, LLC v. Carlisle Wide Plank Floors, Inc., 2012 MT 246, ¶ 10, 366 Mont. 506, 288 P.3d 228) (internal quotations omitted). Because the District Court read Svee as a significant change to the allowance of attorney fees in declaratory judgment actions, and proceeded to award MIJA attorney fees without analyzing the facts of this case in comparison to the facts in Svee and the facts in Western Tradition Partnership, we hold that the District Court abused its discretion. We reverse the District Court’s order awarding “supplemental relief” to MIJA in the form of attorney fees against the State. CONCLUSION ¶54 For the foregoing reasons, we affirm the District Court’s June 20, 2014 Order granting MIJA’s motion for summary judgment to the extent it found LR 121 was preempted by federal law, and we reverse the District Court’s Order to the extent it found § 1-1-411(3), MCA, was severable and not preempted. We also reverse the District Court’s February 10, 2015 Order awarding MIJA attorney fees. /S/ PATRICIA COTTER 31 We Concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ LAURIE McKINNON /S/ MICHAEL E WHEAT /S/ JAMES JEREMIAH SHEA /S/ JIM RICE Justice Beth Baker, concurring. ¶55 With respect to the matter of attorney fees, I continue to believe that the Court’s decision in Svee was incorrect. The District Court understandably awarded fees to MIJA in light of that ruling. This case demonstrates, however, that Svee was based on its very unique facts, and our Opinion today reaffirms that “‘garden variety’ declaratory judgment action[s]” do not justify an award of attorney fees under § 27-8-313, MCA. Western Tradition P’ship, ¶ 11 (quoting Mungas, ¶ 44). /S/ BETH BAKER

May 10, 2016

0dfee490-ec7c-44de-a221-f88a82b58b3e

Russell v. State

2016 MT 69

DA 14-0584

Montana

Montana Supreme Court

DA 14-0584 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 69 RUSTY LEE-RAY RUSSELL, Petitioner and Appellant, v. STATE OF MONTANA, Respondent and Appellee. APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DV 10-480 Honorable Ingrid G. Gustafson, Presiding Judge COUNSEL OF RECORD: For Appellant: Elizabeth L. Griffing, Axilon Law Group, PLLC, Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy K Plubell, Assistant Attorney General, Helena, Montana Scott D. Twito, Yellowstone County Attorney, Ed Zink, Deputy County Attorney, Billings, Montana Submitted on Briefs: January 6, 2016 Decided: March 22, 2016 Filed: __________________________________________ Clerk March 22 2016 Case Number: DA 14-0584 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Rusty Lee-Ray Russell appeals from the District Court’s Findings of Fact, Conclusions of Law and Order dated July 7, 2014, denying his petition for postconviction relief. We affirm. ¶2 We restate the issues on appeal as follows: Issue One: Whether Russell received effective assistance of counsel at trial based upon allegations that counsel failed to research and understand the principles of felony murder; failed to properly move for dismissal of that charge; and failed to offer proper instructions on felony murder. Issue Two: Whether Russell received effective assistance of counsel on appeal based upon allegations that counsel failed to understand the principles of felony murder and failed to attack the sufficiency of the evidence to support a conviction of that charge. FACTUAL AND PROCEDURAL BACKGROUND ¶3 On April 25, 2005, Russell and an acquaintance named Spotted Wolf spent a day “drinking across Billings.” In the middle of the night they went into an alley-type area behind some buildings to continue drinking in a place where they would not be seen by police. In the alley Spotted Wolf saw a sleeping transient (Wallin). Spotted Wolf confronted Wallin, striking him with his hands, demanding alcohol or money. Russell then handed Spotted Wolf a knife that Russell had stolen earlier in the day, and Spotted Wolf used it to slash Wallin across the face. Spotted Wolf then gave the knife back to Russell, telling him to show what he was made of and what he could do. Russell used the knife to stab Wallin several times. 3 ¶4 Russell then walked a few steps to where another transient (Gewanski) was sleeping. Russell beat Gewanski and stabbed him multiple times with the knife, killing him. Russell walked back to Wallin, and he and Spotted Wolf continued the assault as Wallin tried to get away. Another man named Rideshorse was present and intervened to stop the renewed attack on Wallin. Russell struck Rideshorse and said “Let’s do this guy.” Spotted Wolf declined, and he and Russell fled. ¶5 Rideshorse went out into the street and hailed a police car. Wallin was seriously and permanently injured by Russell and Spotted Wolf. Upon arrest, police found blood from both Wallin and Gewanski on Russell’s clothing. Police recovered the knife from Spotted Wolf and DNA from both victims was on it. Spotted Wolf pled guilty to charges of deliberate homicide by accountability, to aggravated assault and to robbery. ¶6 The State charged Russell with deliberate homicide for the death of Gewanski (charged as felony murder under § 45-5-102(1)(b), MCA); aggravated assault upon Wallin; accountability for Spotted Wolf’s robbery of Wallin; and accountability for Spotted Wolf’s aggravated assault of Wallin. The State charged the aggravated assault upon Wallin as the underlying felony to support the felony murder charge against Russell. In May 2005 a jury in Yellowstone County convicted Russell of each of the charged offenses, and the District Court sentenced Russell to terms of imprisonment. Russell appealed to this Court, which reversed the conviction for aggravated assault against Wallin because it was an included offense of the charge of felony murder. This Court affirmed the remainder of the convictions. State v. Russell, 2008 MT 417, 347 Mont. 301, 198 P.3d 271 (Russell I). 4 ¶7 In March 2010 the Criminal Defense Clinic at the University of Montana School of Law filed a petition for postconviction relief on behalf of Russell. The petition contended that Russell’s trial counsel were ineffective for failing to argue that the murder of Gewanski did not occur in the course of the assault on Wallin, and therefore the facts did not support the charge of felony murder. The petition further contended that Russell’s appellate counsel was ineffective for failing to argue that the aggravated assault on Wallin was not sufficiently casually related to the attack on Gewanski to support the felony murder charge. Eventually Russell filed an amended and a second amended petition; the State responded; and both sides filed affidavits. The District Court conducted an evidentiary hearing on March 19, 2014. ¶8 Several witnesses testified at the hearing on postconviction relief. Penny Strong was Russell’s lead attorney at trial and at that time was the Chief Public Defender for Yellowstone County. She testified that she was experienced in the defense of homicide cases, and that she had an adequate support staff and an excellent investigator who identified and interviewed witnesses and examined the physical evidence. Strong personally examined the crime scene, describing it as a passage between two buildings, covering a very small area. She estimated that the distance between the attack upon Wallin and the attack upon Gewanski was smaller than the courtroom in which the hearing was held. She testified that “there really wasn’t a separate crime scene for the homicide that involved Mr. Gewanski. It was all one in the same.” ¶9 In a statement, Spotted Wolf described the distance between the attack upon Wallin and the attack upon Gewanski as “a few steps.” The District Court found that the 5 area in which the crimes occurred was small, 30 to 40 feet long, and that both assaults “were committed close in time and space.” (Emphasis added.) ¶10 Strong testified that she researched felony murder issues and their application to Russell’s case. She was unable to provide details of the research because she no longer worked as a Public Defender and her work materials were not available to her for review prior to the hearing. She was familiar with felony murder charges and believed that from the defense perspective they made convictions easier to obtain. She recalled raising these concerns in her trial brief and through proposed jury instructions. She believed that a specific unanimity instruction was important in the context of a felony murder charge and she offered one, which the District Court refused. She made a general motion to dismiss all charges at the close of the State’s case-in-chief, based upon failure of proof. ¶11 Strong testified that she could not find any evidence to support Russell’s claim that he was not present at the assaults and the murder. She stated that the State offered plea agreements to both Russell and Spotted Wolf; that Spotted Wolf accepted the plea agreement; and that Russell rejected it and chose to go to trial. She understood that the State’s theory of felony murder against Russell was that he started the chain of events that led to Gewanski’s death by giving his knife to Spotted Wolf to use in the initial attack upon Wallin. Strong’s co-counsel, attorney Claus, explained that prior to sentencing he filed a motion on double jeopardy grounds to dismiss the felony murder predicate offense of assault. In doing so, he argued that the attack upon Wallin and the attack upon Gewanski were part of the same transaction and that therefore the aggravated 6 assault was a lesser included offense of the homicide charge. That argument was ultimately successful in this Court on direct appeal. ¶12 Mark Murphy, the chief criminal deputy for the Yellowstone County Attorney, prosecuted the case against Russell. He testified that he had no doubt that the death of Gewanski happened during the course of the assault upon Wallin. Murphy described his opinion of the evidence: With the review of all the evidence we had at the time, it seemed that all of the homicide flowed from the initial robbery, that that was the motivating factor that tied all of the activity together, it was the cause of the homicide. He described the factual connection between the events: Well, it—it’s all part of a kind of a seamless whole, I mean there isn’t any break in the action, it happened in a very, very short time span, it happened in a very small area. (Emphasis added.) Murphy believed that the evidence demonstrated that Spotted Wolf’s assault upon Wallin was the “precipitating factor” in the events but that “it’s impossible to separate out any one factor, they all moved in that direction [the murder of Gewanski] and followed from the underlying felony.” ¶13 Murphy affirmed that during the course of the trial there were extensive discussions among the District Court, the prosecution, and defense counsel about felony murder, the analysis of continuous conduct, and numerous Montana cases bearing upon the felony murder issues. He recalled that there was a “very vigorous discussion” about jury instructions and that “Ms. Strong put forward her theory of the case in a very professional manner.” Murphy also testified that Strong was “extremely competent” 7 during the trial, giving as an example her cross-examination of witness Rideshorse, which raised points that the prosecution had not previously considered. ¶14 Attorney Shannon McDonald, as an Assistant Appellate Defender, prepared the brief for Russell’s direct appeal to this Court. She testified that her analysis of the trial evidence convinced her that it did not permit an argument that the assaults on one victim were a separate transaction from the homicide of the other victim, or that there was a temporal break between the attacks. My memory of the evidence presented was that the crimes occurred in a short period of time, in a relatively small place, with the victims close together. (Emphasis added.) She testified that the evidence presented at trial did not support an argument that the crimes were separate transactions. She believed that the events, starting with the attack on Wallin and ending with the murder of Gewanski, were “inextricably tied together.” (Emphasis added.) ¶15 On July 8, 2014, the District Court issued detailed findings of fact regarding Russell’s postconviction claims that his attorneys at trial and on appeal provided him with ineffective assistance.1 The District Court found that Strong understood the felony murder charge and the evidence that the State would present. The District Court found that Strong had adequate time to prepare and that after examining the crime scene she believed that the assault on Wallin and the death of Gewanski did not involve “two crime scenes.” She understood the State’s theory of the case that the assault on Wallin “started 1 The District Court noted that Russell’s petition for postconviction relief raised numerous other allegations that were not addressed at the hearing, but that were also not withdrawn. In the present appeal Russell has likewise focused on the IAC claims and has not addressed the other issues. We have no basis to review any other claims and decline to do so. 8 the incident that included the death of Gewanski.” The District Court found that “Strong understood the charge correctly.” She “researched application of the felony murder rule”; believed that it made a conviction more likely; and believed that the specific unanimity instruction that she offered would address her concerns. ¶16 The District Court found that the crime scene was small and that “the events were committed close in time and space.” The entire scene from where Wallin was assaulted to where Gewanski was killed was “only about 30-40 feet long.” The District Court noted the testimony of attorneys Kelleher and Snodgrass, who represented co-defendant Spotted Wolf. They investigated the scene and the facts and were “well aware of the nature of the events.” They ultimately concluded that the State had properly charged their client. Spotted Wolf pled guilty to charges of deliberate homicide by accountability, to aggravated assault and to robbery. ¶17 As to appellate counsel McDonald, the District Court found that she raised three issues on appeal, one of which was the successful argument that Russell could not be convicted of both felony murder and the predicate offense of assault. The District Court noted that McDonald believed at the time of direct appeal that the trial evidence did not permit an argument that the Wallin and Gewanski attacks were separate and unrelated events. At the time of the postconviction hearing, McDonald still construed the evidence that way, and did not agree with Russell’s arguments on application of the felony murder statute. The District Court noted the testimony of prosecutor Murphy that his construction of the facts was that “the initial assault [against Wallin] with the knife caused everything that happened after that.” 9 ¶18 The District Court noted the testimony of Assistant Appellate Defender Koan Mercer, who represented Russell on direct appeal after attorney McDonald left her appellate defender position. Mercer testified that in his opinion there was insufficient evidence at trial to support a felony murder conviction based upon his belief that there were separate crimes involving the two victims. Mercer testified that no reasonable attorney could hold a different opinion and that failure to reach such a conclusion fell below the duty of care for attorneys. Because McDonald construed the facts differently, Mercer testified that she provided ineffective assistance to Russell. ¶19 The District Court acknowledged the conflicting testimony on the viability of the felony murder charge under the facts of Russell’s case. The District Court found that Strong provided zealous representation throughout the trial, understood the charges, and was knowledgeable and prepared. The District Court concluded that Strong’s representation was “anything but ineffective.” The District Court similarly found that on appeal McDonald understood the felony murder charge and that after a “thorough review of the record” determined that it did not support a two-crimes argument. The District Court found that McDonald’s representation did not breach the standard of care and was not ineffective. The District Court concluded that it was “entirely reasonable” for McDonald to interpret the evidence as showing that the assault and the homicide were “inextricably intertwined.” The District Court determined that it was reasonable for McDonald to conclude that the homicide would not have occurred but for the predicate felony of the assault on Wallin. 10 ¶20 The District Court concluded that there was “no defect in the charging” of felony murder and no deficiency in the State’s proof of the charge. The District Court concluded that Russell failed to establish that his attorneys at trial and on appeal were ineffective with regard to the felony murder charge. The District Court concluded that Russell killed Gewanski “in furtherance of the initial aggravated assault” upon Wallin. The District Court concluded that when Spotted Wolf paused his attack upon Wallin, handed the knife back to Russell and then exhorted him to show what he’s made of: Russell then acted immediately in furtherance of that initial aggravated assault by further escalating the violence against another victim. There was no break in time or space. These events took place within feet of one another. . . . The homicide occurred because of Spotted Wolf’s aggravated assault. (Emphasis added.) The District Court concluded that this was sufficient to support the charge and conviction for felony murder. ¶21 The District Court denied Russell’s petition for postconviction relief. This appeal ensued. STANDARD OF REVIEW ¶22 This case arises from a petition for postconviction relief filed pursuant to § 46-21-101, MCA. A district court considering a petition for postconviction relief may hold an evidentiary hearing, § 46-21-201, MCA, and must enter findings of fact and conclusions of law, § 46-21-202, MCA. The petition may not be based upon grounds for relief that were or could reasonably have been raised on direct appeal. Rukes v. State, 2013 MT 56, ¶ 8, 369 Mont. 215, 297 P.3d 1195; § 46-21-105(2), MCA. The petition must identify all facts that support the claims for relief, Kelly v. State, 2013 MT 21, ¶ 9, 11 368 Mont. 309, 300 P.3d 120, and the petitioner has the burden to show by a preponderance of the evidence that the facts justify relief. Griffin v. State, 2003 MT 267, ¶ 10, 317 Mont. 457, 77 P.3d 545. ¶23 We review the district court’s findings of fact to determine whether they are clearly erroneous. Brimstone Mining, Inc. v. Glaus, 2003 MT 236, ¶ 20, 317 Mont. 236, 77 P.3d 175. A finding of fact may be clearly erroneous if it is not supported by substantial evidence in the record; if the district court misapprehended the evidence; or when our review of the record leaves this Court with the definite and firm conviction that a mistake has been committed. Brimstone, ¶ 20. A district court’s interpretation of a statute is a conclusion of law which we review for correctness. Montana State Fund v. Simms, 2012 MT 22, ¶ 15, 364 Mont. 14, 270 P.3d 64. ¶24 This Court evaluates claims of ineffective assistance of counsel under the test established in Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052 (1984). Whitlow v. State, 2008 MT 140, ¶ 10, 343 Mont. 90, 183 P.3d 861. First the defendant must show that his attorney’s performance was deficient by demonstrating that it fell below an objective standard of reasonableness. Whitlow, ¶ 14. There is a strong presumption that the attorney’s performance fell within the wide range of reasonable professional assistance, Whitlow, ¶ 15, because there are “countless ways to provide reasonable assistance in any given case.” Strickland, 466 U.S. at 689, 104 S. Ct. at 2065. A petitioner seeking to reverse a district court’s order denying postconviction relief based upon an allegation of ineffective assistance of counsel has a heavy burden. Bomar v. State, 2012 MT 163, ¶ 5, 365 Mont. 474, 285 P.3d 396. 12 ¶25 Second, the defendant must show that his attorney’s deficient performance prejudiced the defense. Whitlow, ¶ 10. This requires a showing of a “reasonable probability that, but for counsel’s unprofessional errors, the result of the proceeding would have been different.” Strickland, 466 U.S. at 694, 104 S. Ct. at 2068. DISCUSSION ¶26 Issue One: Whether Russell received effective assistance of counsel at trial based upon allegations that counsel failed to research and understand the principles of felony murder; failed to properly move for dismissal of that charge; and failed to offer proper instructions on felony murder. ¶27 The offense referred to as felony murder is provided by § 45-5-102(1)(b), MCA: (1) A person commits the offense of deliberate homicide if: (b) the person attempts to commit, commits, or is legally accountable for the attempt or commission of robbery, sexual intercourse without consent, arson, burglary, kidnapping, aggravated kidnapping, felonious escape, assault with a weapon, aggravated assault, or any other forcible felony and in the course of the forcible felony or flight thereafter, the person or any person legally accountable for the crime causes the death of another human being . . . . The underlying or predicate felony is “both an included offense and an element of felony homicide.” Russell I, ¶ 24. The only causal connection required to constitute felony murder is that “the death actually occurred during the underlying felony or the flight thereafter.” State v. Burkhart, 2004 MT 372, ¶ 36, 325 Mont. 27, 103 P.3d 1037. When a person commits a felony like aggravated assault, he initiates conduct that creates a dangerous circumstance, and the intent to commit the felony supplies the intent for the consequences that arise from it. Burkhart, ¶ 41. ¶28 Russell contends that he received ineffective assistance of counsel at trial because his attorneys failed to adequately research the law on felony murder and then “proceeded 13 under a fundamental misunderstanding of its elements.” Russell contends that the fundamental correlation of “time and place” between the underlying felony and the death, as well as a causal connection between the underlying (predicate) felony and the death are all missing from this case. He contends that all of the attorneys involved in the case, both prosecution and defense, fundamentally misconstrued the facts and the law by assuming that “close proximity of time and place was sufficient to prove felony murder.” He contends that if only his attorneys had understood this, and had made the proper motions and arguments, he would not have been convicted of felony murder. Russell contends that the District Court fundamentally erred in the present proceeding by concluding that Spotted Wolf’s exhortation of Russell to “see what he could do” with the knife constituted the underlying felony. ¶29 The District Court’s findings of fact and conclusions of law do not support Russell’s contentions. The District Court and all the attorneys involved on both sides of the prosecution against Russell (except for Mr. Mercer) generally agreed about the facts and how they related to felony murder. The amended information in Russell’s case clearly establishes the aggravated assault upon Wallin as the predicate or underlying felony in the felony murder charge. There is no support for Russell’s assertion that the District Court (or any of the attorneys) failed to understand this. Specifically there is no support for Russell’s assertion that the District Court determined that Spotted Wolf’s exhortation of Russell after handing back the knife “constituted the underlying felony.” That assertion makes little sense. 14 ¶30 The fact that Spotted Wolf handed the knife back to Russell and exhorted him to do something is, however, critical in analyzing the causal connection of the events that began when Russell and Spotted Wolf entered the alley and that ended with Gewanski’s death. The overwhelming evidence is that the events in this assault and murder spree occurred in a small area in a very short period of time. Those facts lay the groundwork for determining whether there was a causal connection to the events that then happened. ¶31 As detailed in the District Court’s findings of fact, the events of that evening were set in motion when Spotted Wolf began the assault upon Wallin in an attempt to extort alcohol or money from him. The facts demonstrate that the assault dramatically escalated when Russell handed Spotted Wolf the knife Russell had stolen earlier in the evening. Spotted Wolf used Russell’s knife to slash the hapless Wallin across the face and then he returned the knife to Russell with an admonition or exhortation to do something with it. Russell took the knife the short distance to where Gewanski slept and stabbed and killed him. Russell then immediately returned to Wallin, and he and Spotted Wolf continued the initial assault, from which Wallin narrowly escaped with his life. ¶32 These events form a continuing narrative from the assault to the murder. While Spotted Wolf’s exhortation of Russell to do something with the knife was an important factor, there is no support for Russell’s assertion that the District Court (or anyone else) considered the exhortation itself to be the underlying felony. “The felony homicide charge in Count 1 was predicated on the charge for aggravated assault in Count II.” Russell I, ¶ 18. 15 ¶33 As the District Court properly determined, the assault and the murder took place in close proximity as to time and place, and the murder flowed in a continuous series of actions from the assault against Wallin by both Spotted Wolf and Russell. Therefore Russell was properly charged with and convicted of felony murder. There is substantial evidence in the record to support the District Court’s findings of fact, and Russell has not met his burden to demonstrate that the facts as found by the District Court were clearly erroneous. ¶34 The District Court found, after hearing the testimony of those directly involved, that lead trial attorney Strong properly understood the charge and the facts. The District Court, having presided over both Russell’s trial and the postconviction relief proceeding, was in a unique position to evaluate the performance of trial counsel with regard to the felony murder charge. Russell failed to establish at the postconviction hearing that attorney Strong was deficient as a matter of fact, and failed to establish on appeal that the District Court’s findings of fact in that regard were clearly erroneous. Russell has not demonstrated that the legal assistance provided to him fell below an objective standard of reasonableness. Whitlow, ¶ 14. Russell has not overcome the strong presumption that the attorney’s performance fell within the wide range of reasonable professional assistance, Whitlow, ¶ 15. ¶35 Further, Russell failed to demonstrate that the outcome of the trial would have been any different had Strong argued that the events in this case were insufficient to constitute felony murder. There is no showing that such an argument would have been successful in avoiding the charge of felony murder. 16 ¶36 We therefore affirm the District Court’s decision that Russell did not receive ineffective assistance of counsel at trial. ¶37 Issue Two: Whether Russell received effective assistance of counsel on appeal based upon allegations that counsel failed to understand the principles of felony murder and failed to attack the sufficiency of the evidence to support a conviction of that charge. ¶38 All of these same considerations lead to the conclusion that the District Court correctly determined that attorney McDonald did not provide ineffective assistance of counsel on appeal. The District Court found that the evidence showed that McDonald understood the law on felony murder, that she thoroughly reviewed the trial record, and that she determined that the evidence would not support an argument that the facts failed to support the charge of felony murder. Rather, she adopted a strategy, which was ultimately successful, to challenge the convictions for both the homicide and the underlying predicate felony assault. Other than offering attorney Mercer’s opinion, the most that Russell established below was that attorneys might disagree about how to apply the facts of this case to the felony murder statute. The District Court properly determined that McDonald’s performance did not fall below the objective standard of reasonableness for attorney representation. As noted above, there are “countless ways to provide reasonable assistance in any given case.” Strickland, 466 U.S. at 689, 104 S. Ct. at 2065. ¶39 We therefore affirm the District Court’s decision that Russell did not receive ineffective assistance of counsel on appeal. 17 CONCLUSION ¶40 We affirm the District Court’s decision to deny Russell’s petition for postconviction relief. /S/ MIKE McGRATH We Concur: /S/ JAMES JEREMIAH SHEA /S/ BETH BAKER /S/ MICHAEL E WHEAT /S/ JIM RICE Justice Patricia Cotter, dissenting. ¶41 The Court concludes that the District Court and the attorneys on both sides of the case generally agreed about how the facts related to and established felony murder. Opinion, ¶ 28. Respectfully, I disagree. There was confusion—not agreement—about what constituted the predicate felony for the felony murder charge. In addition, there was a failure of proof of a causal connection between the two crimes so as to satisfy the requirements of the felony murder rule. ¶42 At ¶ 6, the Court asserts that the State charged the aggravated assault upon Wallin as the underlying felony to support the felony murder charge; notably, the Court does not state whether it was Spotted Horse’s aggravated assault of Wallin or Russell’s aggravated assault of Wallin that constituted the predicate offense. (Both were charged with aggravated assault.) Trial counsel Penny Strong testified that the basis of the felony murder charge against Russell was that Russell started the chain of events by giving his 18 knife to Spotted Wolf, who used it in the initial assault upon Wallin. Opinion, ¶ 11. The District Court concluded that the predicate felony was Spotted Wolf’s assault on Wallin. Opinion, ¶ 20. However, this Court concluded in Russell’s direct appeal that the predicate offense was Russell’s assault upon Wallin. Russell I, ¶ 28. The fact that there is still no clarity about whose offense constituted the predicate for the felony murder charge against Russell underscores the flaw in the manner in which this case was charged and tried, and the ineffective assistance of trial counsel in failing to grasp the elements of the felony murder rule and pin down who committed the predicate offense. ¶43 If as the District Court concluded, the predicate felony was Spotted Wolf’s assault on Wallin, then under § 45-5-102(1)(b), MCA, it would arguably be he who would be guilty of felony murder, not Russell, because he would be the person who committed a felony and in the course of that felony became accountable for the death of Gewanski. Spotted Wolf’s malicious intent for the predicate offense cannot be transferred to Russell. As we stated in State v. Weinberger, 206 Mont. 110, 115, 671 P.2d 567, 569 (1983): “In adjudging a felony-murder, it is to be remembered at all times that the thing which is imputed to a felon for a killing incidental to his felony is malice and not the act of killing.” (Emphasis added). ¶44 I also submit trial counsel was ineffective for failing to challenge the charge of felony homicide given the circumstances of the two crimes. Regardless of whose act constituted the predicate offense, the fact is that no causal connection existed between the aggravated assault on Wallin and the death of Gewanski. According to Spotted Wolf’s testimony at trial, after he and Russell slashed and stabbed Wallin, he and Russell then 19 decided “to go around to the other side [of the building] and just leave out to the North Side ”; however, when they discovered their passage through that end of the alley was blocked, “we just stopped for, you know, not too long, we just stood there and then, you know, [Russell] went over here . . . [and] he was hitting another person” (Gewanski). Russell, ¶ 51 (Nelson, J., dissenting). ¶45 In order for the felony murder rule to apply, “a causal connection between the felonious act and the death must be present.” State ex rel. Murphy v. McKinnon, 171 Mont. 120, 127, 556 P.2d 906, 910 (1976). As Justice Nelson observed in his dissent in ¶ 53 of Russell I, we quoted with approval these statements by the Pennsylvania Supreme Court in State v. Weinberger, 206 Mont. 110, 671 P.2d 567 (1983): The mere coincidence of homicide and felony is not enough to satisfy the requirements of the felony-murder doctrine. It is necessary . . . to show that the conduct causing death was done in furtherance of the design to commit the felony. Death must be a consequence of the felony . . . and not merely coincidence. (Internal quotations omitted.) The facts as related by Spotted Wolf simply do not establish that the stabbing of Gewanski was done “in furtherance of the design to commit” a robbery or assault upon Wallin. Gewanski’s death was not a consequence of the assault upon Wallin; his death was the result of a spontaneous drunken decision by Russell to kill a person sleeping by a dumpster who had no connection whatsoever to Wallin. ¶46 For these reasons, I would conclude that trial counsel was ineffective. I would further conclude that appellate counsel was ineffective for failing to challenge the State’s proof of a causal connection between the two crimes so as to justify the felony murder conviction, as well as the District Court’s conclusion that it was Spotted Wolf’s actions 20 that constituted the predicate felony for the charge of felony murder against Russell. I therefore dissent from the Court’s Opinion. I would add that all of these problems could have been forestalled had the State charged and tried this case in a straightforward manner in the first place. /S/ PATRICIA COTTER Justice Laurie McKinnon joins in the Dissent of Justice Patricia Cotter. /S/ LAURIE McKINNON

March 22, 2016

40cd4dca-044c-414f-81f9-1e9dac14f011

Johnson v. Wayne S. Hansen Trust

2016 MT 46, 2016 MT 46A

DA 14-0478

Montana

Montana Supreme Court

DA 14-0478 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 46A DOUGLAS W. JOHNSON, Plaintiff and Appellee, v. WAYNE S. HANSEN TRUST; THE STATE OF MONTANA; THE DEPARTMENT OF REVENUE of the State of Montana; POWELL COUNTY, a body politic and corporate and political subdivision of the State of Montana; LISA D. SMITH, as Treasurer of Powell County, the unknown heirs, unknown devisees and unknown creditors of each of the above described individual Defendants who may now be deceased; and all other persons, unknown, claiming or who might claim any right title, estate or interest in or lien or encumbrance upon the real property described in the complaint adverse to Plaintiff’s title thereto, whether such claim or possible claim be present or contingent, Defendants, WAYNE S. HANSEN TRUST, Defendant and Appellant. APPEAL FROM: District Court of the Third Judicial District, In and For the County of Powell, Cause No. DV-13-41 Honorable John W. Larson, Presiding Judge COUNSEL OF RECORD: For Appellant: Jeffrey W. Dahood, Knight and Dahood, Anaconda, Montana For Appellee: Daniel Sweeney, Sweeney Law Firm, Butte, Montana May 3 2016 Case Number: DA 14-0478 2 Submitted on Briefs: February 3, 2016 Decided: March 1, 2016 Amended: May 3, 2016 Filed: __________________________________________ Clerk 3 Justice Jim Rice delivered the Opinion of the Court. ¶1 Justice Jim Rice delivered the Opinion of the Court. The Wayne S. Hansen Trust (Trust) appeals from two orders issued by the Third Judicial District Court, Powell County. The Trust acquired tax deeds to three tracts of real property located in Powell County, previously owned by Douglas W. Johnson (Johnson). The District Court’s first order granted summary judgment to Johnson, declaring the tax deeds void, and the second order addressed the calculation of the final amount to be paid to the Trust. We affirm and address the following issues:1 1. Did the District Court err by granting summary judgment to Johnson and declaring the tax deeds void? 2. Did the District Court err in determining the final amount due to the Trust as purchaser of the tax liens? PROCEDURAL AND FACTUAL BACKGROUND ¶2 Johnson owned three parcels of real property located in Powell County that were valued collectively for tax purposes at $260,478. After Johnson failed to pay the property taxes over several years, the Trust acquired tax deeds to the properties in December of 2012. The Trust filed three quiet title actions for the respective properties in March 2013, and Johnson responded by filing his own quiet title actions on the properties. Johnson alleged that the tax deeds issued to the Trust violated statutory procedural requirements and asked that the District Court set them aside and declare his ownership interest. 1 The Trust raises 19 issues on appeal. We refer counsel to M. R. App. P. 12(1)(b), providing: “Parties are encouraged to limit the number of issues to 4 or fewer.” 4 ¶3 In April 2013, upon the Trust’s motion, Johnson deposited $20,000 into the Clerk of Court’s trust account as a bond pursuant to § 15-18-411, MCA. Later, the District Court consolidated the six quiet title actions and dismissed Powell County and Powell County Treasurer Lisa Smith (Smith) as defendants, with the understanding that they would produce documents and other evidence as requested by the parties. In response to Johnson’s requests, Powell County and Smith produced several hundred pages of records pertaining to the tax liens and deeds on the subject properties. Following a motion from the Trust, the District Court issued an order in October 2013, directing Johnson to deposit an additional $17,497.48 into the Clerk of Court’s trust account, raising his deposit to $37,497.48.2 ¶4 Johnson moved for summary judgment in December 2013, citing evidence obtained from the County to argue that both the County and the Trust had failed to comply with several statutes, and that the tax deeds were therefore void. The District Court granted summary judgment to Johnson in May 2014, finding multiple instances of statutory noncompliance in the tax deed process, and declared the tax deeds void. In the same order, the District Court denied another request from the Trust to order Johnson to deposit additional bond funds. On June 30, 2014, the District Court entered judgment, 2 Although the District Court ordered Johnson to deposit additional bond funds, the amount Johnson was required to deposit was significantly less than what the Trust requested. In its motion, the Trust requested a deposit in the amount of $79,421.39. Included in that sum were accrued taxes for the years 2008, 2009, 2010, 2011, and 2012, penalties, interest, property insurance premiums, publication costs, court filing fees, trust administrative expenses, and legal fees. In ordering Johnson to deposit $37,497.48, the District Court specifically did not include trust administrative expenses or attorney fees. 5 ordering that Johnson’s deposit be remitted to the Trust, and that a Certificate of Redemption for each of the properties be issued to Johnson. ¶5 On July 15, 2014, the Trust filed objections and a request for relief from the judgment pursuant to M. R. Civ. P. 54(c) and 58(e). On July 28, the Trust also filed a Motion to Alter or Amend the Findings and Judgment or for a New Trial. In both of these motions, the Trust argued that the District Court erred in granting summary judgment by ignoring genuine issues of material fact, and by failing to properly calculate the final amount owed to the Trust. The Trust contended that the District Court erred by denying the Trust’s request for an additional bond deposit, arguing that the $37,497.48 deposited by Johnson, which had been calculated as of July 19, 2013, failed to account for additional taxes, interests, and costs paid by the Trust. In November 2014, the District Court issued an order partially granting and partially denying the Trust’s motions. Specifically, the District Court denied the request to alter or amend the grant of summary judgment, but acknowledged that the judgment failed to “address the issue of taxes accrued or paid by either party during the pendency of the proceedings.” Accordingly, the District Court ordered the parties to submit additional memorandum with supporting evidence “to address any discrepancy between the bond deposit returned to Defendant Hansen Trust and any final redemption amount that is still alleged owed.” ¶6 After receiving additional briefing from the parties, the District Court issued an Order Regarding Final Redemption Amount in February 2015. The District Court noted that the Trust, in its additional briefing, had submitted the affidavit of the Trustee 6 Christian Hansen that “references unsubstantiated amounts for an additional bond deposit, accrued interest, and other disbursements, including property taxes for 2014, property insurance renewal costs, and court filing fees.” However, the court further noted that “Defendant Hansen Trust does not provide any supporting documentation to show how it calculates the interest nor does it provide the Court with evidence of proof of payments . . . .” The District Court ruled that “based on the evidence presented to the Court, no additional redemption amount is due or owing to Defendant Hansen Trust.”3 The Trust appeals from the District Court’s orders granting summary judgment and determining the final amount owed to it. STANDARD OF REVIEW ¶7 The Court reviews a grant of summary judgment de novo, performing the same analysis as does a district court. Lorang v. Fortis Ins. Co., 2008 MT 252, ¶ 36, 345 Mont. 12, 192 P.3d 186 (citation omitted). “The judgment sought 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 3 The Trust filed a third post-judgment motion for relief pursuant to M. R. Civ. P. 60(b)(1) and (5) on March 2, 2015, requesting that the District Court consider the “excluding of those receipts from its Memorandum as being an inadvertent mistake.” The Trust included an affidavit and receipts that had not been submitted previously. This documentation contained the property insurance premium information, as well as receipts for the 2013 and 2014 tax year payments. The District Court denied this motion, finding the Trust’s supplemental documentation was untimely. On May 11, 2015, Johnson filed a motion that requested the District Court to order the Powell County Treasurer to mail the tax bills for the properties to him, and not to the Trust. In its answer, the Trust argued that the District Court should use its authority sua sponte to resolve the discrepancy between the bond deposit and the redemption amount, and that the matter of the tax bills should be held in abeyance. By then, the appeal had been filed to this Court, and the District Court concluded that it was “divested of jurisdiction to address this matter further.” 7 judgment as a matter of law.” M. R. Civ. P. 56(c)(3). “In determining whether genuine issues of material fact exist, we must view all evidence in the light most favorable to the non-moving party.” Lorang, ¶ 38. If the moving party meets its burden of demonstrating a complete absence of genuine issues of material fact, the burden then shifts to the non-moving party to set forth specific facts, not merely denials, speculation, or conclusory statements, in order to establish that a genuine issue of material fact does indeed exist. Finally, if no genuine issues of material fact exist, it must then be determined whether the facts actually entitle the moving party to judgment as a matter of law. Lorang, ¶ 39. ¶8 “Our standard of review relating to conclusions of law is whether the trial judge’s interpretation of the law is correct.” Moran v. Robbin, 261 Mont. 478, 482, 863 P.2d 395, 398 (1993) (citing Steer, Inc. v. Dep’t of Revenue, 245 Mont. 470, 474, 803 P.2d 601, 603 (1990)). DISCUSSION ¶9 1. Did the District Court err by granting summary judgment to Johnson and declaring the tax deeds void? ¶10 The Trust contends that the District Court improperly granted summary judgment and declared the tax deeds void. Generally, the Trust argues that summary judgment was improper because the record was incomplete and disputed issues remained. ¶11 Tax deed proceedings require strict compliance with the governing statutes: Tax deed proceedings implicate a property owner’s fundamental interests. The purpose behind the tax lien sales statutes is to protect property owners and their rights to due process. Due to the important interests at stake, every essential and material step required by the tax deed statutes must be strictly followed. Such exacting compliance with the statutes is necessary 8 because the owner risks losing his or her real property for the failure to pay the property taxes. Often, very valuable property is lost for a mere pittance. Hansen Trust v. Ward, 2015 MT 131, ¶ 26, 379 Mont. 161, 349 P.3d 500 (internal citations and quotation marks omitted). We have also held that “[i]n determining the sufficiency of the tax deed proceedings, the record alone is to be considered . . . .” Moran, 261 Mont. at 483, 863 P.2d at 398. ¶12 In his motion for summary judgment, Johnson asserted, among other claims of statutory violations, that Treasurer Smith had failed to provide the County Clerk and Recorder with a report of all persons and property owing taxes, in violation of § 15-16-301, MCA. The statute requires the county treasurer to “make a report to the county clerk and recorder in detail, showing the amount of taxes collected and a complete list of all persons and property then owing taxes.” Section 15-16-301(1), MCA. As evidence of this failure, Johnson included a copy of a memo sent from Smith to the Powell County Clerk and Recorder on March 31, 2011, in which she acknowledged: Per [§] 15-16-301, MCA, on the third Monday of June of each year, I am required to provide you with a report of the amount of taxes collected, a list of all persons and property then owing taxes and a separate report showing the amount of taxes suspended or canceled. I don’t know that this has ever been done. I know I haven’t prepared these reports for you since I started . . . . The attachments provide these reports to you for fiscal years 2007, 2008, 2009[,] and 2010. Although the statutory date requirement has not been met, this will provide a starting point for future compliance with this statute. In another memorandum, also dated March 31, 2011, Smith acknowledged that other reports required under § 15-17-214(2)(a), MCA, had likewise not been submitted to the 9 County Clerk and Recorder. Johnson also provided records of the procedures and notices employed in this case, and detailed how they failed to satisfy statutory requirements. ¶13 In Isern v. Summerfield, 1998 MT 45, 287 Mont. 461, 956 P.2d 28, the appellant taxpayer claimed that the district court had erred by granting summary judgment to the tax deed purchasers, and by concluding that multiple errors in the process did not void the tax deed. We agreed with the appellant taxpayer and reversed following a discussion of the statutory infractions, concluding, “[g]iven the requirement of strict compliance with statutory procedures for issuing a tax deed, . . . we hold that the errors and omissions discussed above void the subject tax deed . . . .” Isern, ¶ 21. The appellant taxpayer noted several statutory errors, including a failure to comply with § 15-16-301, MCA. Isern, ¶ 11. Similarly, here, Johnson demonstrated a violation of this same statute, as well as many other violations, from the records provided by the County. The District Court reviewed the records and correctly granted summary judgment to Johnson, identifying a total of thirteen errors in the tax deed process. ¶14 The Trust argues that the record was incomplete and that genuine issues of material fact remained, but fails to articulate exactly what those issues of fact are. The records cited by Johnson were clearly sufficient to establish several violations of the statutory tax deed process. After producing records regarding these tax deed transactions, Treasurer Smith submitted an affidavit wherein she stated that “additional documentation may exist that was not located during the week-long search” (emphasis added). The Trust emphasizes this statement in arguing that the District Court prematurely granted 10 summary judgment without giving the Trust the opportunity to conduct “original discovery.” However, the Trust fails to show how the discovery of additional documentation could have changed the outcome—multiple statutory violations, sufficient to void the tax deeds, were already established by the uncontested evidence presented.4 ¶15 We affirm the District Court’s order granting summary judgment. Montana law clearly requires “exacting compliance with the statutes” governing the tax deed process, and the host of errors in the statutory procedure in this case required voiding of the deeds. Hansen Trust, ¶ 26. ¶16 2. Did the District Court err in determining the final amount due to the Trust as purchaser of the tax liens? ¶17 The Trust argues that the District Court failed to determine a proper equation or formula for calculation of the redemption amount5 owed to it, that the District Court incorrectly ordered the bond deposit paid in lieu of redemption when the liens on the properties had not been properly extinguished, and that the final amount remitted by Johnson failed to include the proper interest, subsequent taxes, and costs. 4 The Trust also argues that summary judgment was improperly entered because “revelations of the county’s alleged nonfeasance, misfeasance, and knowledgeable contributions to the problems” in the tax deed process “constituted a genuinely disputed material issue.” However, this was a quiet title proceeding in which the County claimed no interest in the property, and in which no claims against the County were filed, if any could have been. The District Court’s dismissal of the county defendants was proper. 5 We use the term “redemption amount” here because it has been used throughout the course of this case (e.g., the District Court’s “Order Regarding Final Redemption Amount”), and has been used in our previous case law. See, e.g., Hansen Trust, ¶ 44. The term “redemption” is primarily used in statute to refer to the process of extinguishing a tax lien on a property by payment to the County, as codified in § 15-18-111, MCA, et seq., wherein the delinquent taxpayer or interested party is referred to as the “redemptioner.” Section 15-18-112(2)-(3), MCA. However, the use of the term within the context here clearly refers to the amount to be reimbursed directly to the tax purchaser in tax litigation. See also § 15-18-412(2)(a), MCA. 11 ¶18 A tax deed conveys to the tax purchaser, or “grantee,” the “absolute title to the property described in the deed . . . .” See § 15-18-413(1), MCA. In addition, this “conveyance” from the county gives to the tax purchaser “the right, if the tax deed . . . [is] attacked and held irregular or void, to recover the unpaid taxes, interest, penalties, and costs that would accrue if the tax proceedings had been regular and it was desired to redeem the property.” Section 15-18-413(2)(b), MCA.6 The delinquent taxpayer may seek to have the tax deed declared void via a quiet title action, as happened in this case, and is referred to by statute as the “true owner.” Section 15-18-411(1)(b), MCA. In such an action, the true owner may be ordered to deposit with the court: the amount of all taxes, interest, penalties, and costs that would have accrued if the property had been regularly and legally assessed and taxed as the property of the true owner and was about to be redeemed by the true owner; and the amount of all sums reasonably paid by the purchaser following the order and after 3 years from the date of the tax lien sale to preserve the property or to make improvements . . . . Section 15-18-411(1)(c)(i)(A)-(B), MCA. Then, if “the true owner is successful in the action and the tax proceedings are declared void, the amount deposited with the court must be paid to the purchaser” of the tax lien. Section 15-18-412(3), MCA. This deposit “encourages prompt return of the property to the tax rolls” and “prevents unjust enrichment of the owner at the expense of the tax purchaser should the owner win.” Ball v. Gee, 243 Mont. 406, 412, 795 P.2d 82, 86 (1990). “The deposit also lessens the 6 We take this opportunity to clarify our discussion of this statute in Hansen Trust, ¶ 42. In describing the rights of the tax purchaser after a tax deed has been declared void, as provided by § 15-18-413(2), MCA, we stated that the term “conveyance” in the statute refers to a “new deed,” presumably transferring the property back to the true owner. Hansen Trust, ¶ 42, n.4. However, as used here, the term “conveyance” actually describes the original conveyance from the county to the tax purchaser by way of the tax deed. 12 burden on the courts and the purchasers by precluding frivolous defenses.” Ball, 243 Mont. at 412, 795 P.2d at 86. ¶19 Here, the two parties and the District Court all used different equations to calculate the final amount due to the Trust after the tax deeds were declared void, and we hope to clarify the statutory equation herein. First, as used in Hansen Trust, ¶ 44, the term “redemption amount” means the “amount reflecting the taxes, interest, penalties, and costs that would have accrued under normal circumstances.” This amount, which a court may order to be deposited with the court, represents the amount the delinquent taxpayer or “true owner” would have had to pay to the County “if the property had been regularly and legally assessed and taxed as the property of the true owner and was about to be redeemed by the true owner.” Section 15-18-411(1)(c)(i)(A), MCA. In other words, the statute requires a calculation as if redemption were taking place by a payment to the County at that moment in the litigation,7 which consists of the “amount of taxes due, including penalties, interest, and costs, as of the date of the notice of pending tax deed issuance . . . .” Section 15-18-212(6)(e), MCA. In addition, “[t]he amount of interest and costs provided for in subsection (6)(e) continues to accrue until the date of redemption . . . .” Section 15-18-212(7), MCA. Thus, reading these provisions together, we conclude the redemption amount requires a calculation of a sum of the unpaid taxes, interest that accumulates at the statutory rate until the date of deposit, and the costs and 7 Section 15-18-413(2)(b), MCA, contains very similar language, entitling a tax purchaser, in the event that the tax deed is declared void, to recover the amount that would have accrued “if the tax proceedings had been regular and it was desired to redeem the property.” 13 penalties assessed up until the date of deposit. Additional interest that may accrue on this amount during further litigation and additional costs are discussed below. ¶20 The next amount required by statute to be repaid by the true owner is any property taxes on the property paid by the tax purchaser subsequent to issuance of the tax deed. Section 15-18-412(6), MCA, provides that the court “shall also determine the rights resulting from any additional taxes on the property accruing or being paid by either party during the pendency of the suit.” If the tax purchaser has paid property taxes on the property subsequent to issuance of the tax deed, the true owner must reimburse this cost. See also Hansen Trust, ¶ 44. ¶21 The next item in the equation is costs. By statute, the true owner must deposit “the amount of all sums reasonably paid by the [tax] purchaser,” after the court’s deposit order and at least 3 years after the date of the tax lien sale, “to preserve the property or to make improvements on the property while in the purchaser’s possession . . . .” See § 15-18- 411(1)(c)(i)(B), MCA. Further, “costs” are also defined as those that are incurred by the tax purchaser and are “required by law.” Section 15-17-121(2)(b), MCA; Hansen Trust, ¶ 42. We have held that, even if costs such as property insurance, administrative expenses, and attorney fees could be considered reasonable, they are not “required by law” and are not reimbursable. See Hansen Trust, ¶ 43. ¶22 Finally, there is the issue of additional interest that may be claimed during the course of litigation. As discussed above, the redemption amount necessarily includes the unpaid taxes, interest that accumulates until the date of deposit, and costs and penalties. 14 In Hansen Trust, we also affirmed the District Court’s award of interest to the tax purchaser that had accumulated on the true owner’s deposit during the litigation.8 Hansen Trust, ¶ 41. However, the decision to award any such interest lies within the discretion of the presiding court, and a tax purchaser is not automatically entitled to such an award. See § 15-18-412(7), MCA. ¶23 Here, the District Court ordered Johnson to deposit $37,497.48, which included property taxes for tax years 2008, 2009, 2010, 2011, and 2012, accumulated interest on that sum assessed by the Trust, insurance premiums, court filing costs, and publication costs. As explained herein, there is no provision in the statutes entitling a tax purchaser to collect interest on the redemption amounts owed or other costs not expressly required by law. See § 15-17-121(2), MCA; § 15-18-411(1)(c)(i)(B), MCA. On the other hand, the Trust points out that the $37,497.48 amount was calculated only as of July 19, 2013, and did not include the subsequent taxes it paid for tax years 2013 and 2014. However, the Trust failed to submit the necessary documentation when ordered by the District Court, leading the court to conclude that the Trust had waived further reimbursement. While further proceedings, in light of this opinion, may well have resulted in both positive and negative adjustments in the amount properly payable to the Trust, its waiver of further reimbursement, and Johnson’s lack of a challenge to the $37,497.48 ordered by 8 The Court cited to § 15-18-412(3), MCA, as authority for awarding interest that had accrued on the deposit during the litigation. See Hansen Trust, ¶¶ 41, 47. However, interest is not referenced in that provision, and authority for this award is more properly derived from § 15-18-412(7), MCA, which provides that “[i]n the quiet title action, the court has complete jurisdiction to fix the amount of taxes that should have been paid, including penalties, interest, and costs, and to determine all questions necessary in granting full relief . . . .” 15 the District Court, leads us to the conclusion that affirming the judgment as entered is appropriate. ¶24 Affirmed. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ JAMES JEREMIAH SHEA /S/ BETH BAKER

May 3, 2016

efb9f008-92c2-4a3a-896d-f4eaa560465c

Duncan v. Smithson

2016 MT 181N

DA 15-0710

Montana

Montana Supreme Court

DA 15-0710 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 181N IN RE PARENTING OF: W.D., A Minor Child. JOHN PAUL DUNCAN, Petitioner and Appellant, v. KRYSTIANNA SMITHSON, Respondent and Appellee. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. BDR-2015-305 Honorable Jeffrey M. Sherlock, Presiding Judge COUNSEL OF RECORD: For Appellant: Joan Hunter, Hunter Law Office, Helena, Montana For Appellee: David B. Gallik, Gallik Law Office, PLLC, Helena, Montana Submitted on Briefs: June 15, 2016 Decided: July 26, 2016 Filed: __________________________________________ Clerk 07/26/2016 Case Number: DA 15-0710 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 This case pertains to W.D., the minor child of John Paul Duncan (“Duncan”) and Krystianna Smithson (“Smithson”), who was born in 2015. Duncan and Smithson were never married. At the time W.D. was born Duncan and Smithson were in a relationship and lived together in Helena, Montana. The relationship faded. Duncan filed a proposed parenting plan with the District Court on May 28, and served it on Smithson later that day. Smithson moved with W.D. to Cairo, Missouri, on May 29, 2015. Smithson obtained a Temporary Order of Protection on June 15, but that was dismissed by the District Court on July 23, 2015. Between May 29 and the date of the parenting plan hearing on September 11, 2015, Smithson restricted communication between Duncan and W.D. Since the parties’ separation in May, Duncan has voluntarily deposited $100 per month in Smithson’s bank account for child support, although no obligation had been calculated. ¶3 At the hearing both Smithson and Duncan were found to be good parents and both submitted parenting plans seeking sole custody of W.D. Duncan works as a truck driver for Solexo delivering school lunches, and his workday begins at 3:00 a.m. In his 3 parenting plan he proposed that he would wake W.D. up every workday at 3:00 a.m. for daycare. The District Court found that it was not in the child’s best interest to be woken up every workday at 3:00 a.m. The record also shows that Duncan may have consented to Smithson’s move to Cairo, Missouri, and may even have helped Smithson carry items out of their apartment. Based on these findings, the District Court concluded in its parenting plan that the child would live with Smithson in Missouri. Duncan was given liberal visitation and the Montana Child Support Enforcement Division (“CSED”) was to calculate child support payments. When the child reaches two years of age, Duncan can request the court to amend the plan. The court’s parenting plan went into effect on October 26, 2015. Duncan subsequently filed this appeal. We affirm. ¶4 Duncan presents three issues on appeal. First, he contends that the District Court erred in awarding primary custody to Smithson. Second, Duncan claims that the court did not issue a parenting schedule, and third, that the court erred in determining when the child support obligation should commence. ¶5 We review a district court’s findings of fact for clear error. If the findings are supported by substantial credible evidence we will affirm the findings unless there is a clear abuse of discretion. In re Marriage of Tummarello, 2012 MT 18, ¶ 21, 363 Mont. 387, 270 P.3d 28. “Judgments regarding the credibility of witnesses and the weight to be given their testimony are within the province of the District Court, and we will not substitute our judgment for its determinations.” Tummarello, ¶ 34 (citing In re Marriage of Meeks, 276 Mont. 237, 247, 915 P.2d 831, 837-38 (1996)). 4 ¶6 District courts have broad discretion when considering the parenting of a child but the court must construct a parenting plan with the best interest of the child in mind. Tubaugh v. Jackson (In re C.J.), 2016 MT 93, ¶ 14, 383 Mont. 197, 200 P.3d 1028; § 40-4-212(1), MCA. Furthermore, we only require that the district court make sufficient findings “for this Court to determine whether the court considered the statutory facts and made its ruling on the basis of the child’s best interests.” Tubaugh, ¶ 14 (internal citations omitted). ¶7 On appeal, Duncan argues that the District Court abused its discretion in awarding primary custody to Smithson. In support of his argument Duncan cites to numerous statutes other than § 40-4-212, MCA. None of these statutes are relevant to his argument under the facts of this case. Duncan contends that the District Court did not provide grounds, pursuant to § 40-4-212, MCA, on which it concluded that it was in the child’s best interest to reside with Smithson. See In re Marriage of Lawrence, 2005 MT 125, ¶ 18, 327 Mont. 209, 112 P.3d 1036. ¶8 The record shows that the court heard testimony from both Smithson and Duncan regarding the efficacy of their respective parenting plans and concluded that both parties had the capacity to be good parents. But the court specifically found that Duncan’s plan to wake W.D. every work day at 3:00 a.m. was not in the child’s best interest pursuant to § 40-4-212, MCA. Furthermore, the court found that although Duncan was a good parent, he lacked insight into “the proper parenting of an infant.” ¶9 Duncan next claims that the parenting plan does not specifically detail a holiday/vacation or summer schedule and thus the court did not comply with 5 § 40-4-234(2)(c), MCA. That statute states that a parenting plan “may include, at a minimum, provisions for: (c) a residential schedule specifying the periods of time during which the child will reside with each parent, including provisions for holidays, birthdays of family members, vacations, and other special occasions.” Section 40-4-234(2)(c), MCA. The parenting plan designates Smithson as the primary care provider and provides a residential schedule that gives Duncan the opportunity to see W.D. as often as he can visit Cairo, Missouri, and Smithson is obliged to cover half the cost of Duncan’s travel expenses. It is clear from a plain reading of the statute that the specifics regarding the vacations, holidays and other provisions for day-to-day custody are discretionary. Section 40-4-234(2)(c), MCA. ¶10 Ultimately Duncan posits that the court erred in not setting a date for the commencement of child support. However, the record shows that both parties agreed that CSED would manage the calculation and administration of child support. CSED has the authority to determine the commencement of child support. Sections 40-5-225, -226(3), MCA. Therefore, based on the record we cannot conclude that the District Court abused its discretion in this case. ¶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, this case presents a question controlled by settled law or by the clear application of applicable standards of review. ¶12 Affirmed. 6 /S/ MIKE McGRATH We Concur: /S/ LAURIE McKINNON /S/ PATRICIA COTTER /S/ BETH BAKER /S/ MICHAEL E WHEAT

July 26, 2016

4947633b-4178-461e-9480-568ec34a84a9

Mashek v. Dep’t of Pub. Health & Human Servs.

2016 MT 86

DA 15-0410

Montana

Montana Supreme Court

DA 15-0410 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 86 RONALD MASHEK, et al., COMPLIANCE SPECIALISTS, DEPARTMENT OF HEALTH AND HUMAN SERVICES, CHILD SUPPORT ENFORCEMENT DIVISION, Petitioners, Appellees, Cross-Appellants, v. DEPARTMENT OF PUBLIC HEALTH AND HUMAN SERVICES, STATE HUMAN RESOURCES DIVISION, DEPARTMENT OF ADMINISTRATION, Respondents and Appellants. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. BDV-2014-468 Honorable Jeffrey M. Sherlock, Presiding Judge COUNSEL OF RECORD: For Appellants: Amy D. Christensen, Christensen & Prezeau, PLLP; Helena, Montana Marjorie L. Thomas, Department of Administration; Helena, Montana Francis X. Clinch, Department of Public Health & Human Services; Helena, Montana For Appellees: Linda M. Deola, Morrison, Sherwood, Wilson & Deola, PLLP, Helena, Montana Submitted on Briefs: March 16, 2016 Decided: April 12, 2016 Filed: __________________________________________ Clerk April 12 2016 Case Number: DA 15-0410 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 The Department of Public Health and Human Services, Human Resources Division (the Department), appeals from an order entered by the First Judicial District Court, Lewis and Clark County, reversing the Board of Personnel Appeals and reentering the Hearing Officer’s decision that awarded damages to the Plaintiffs. We reverse. ¶2 The Department raises five issues on appeal and the Plaintiffs raise two issues on cross-appeal, but we address only the following issue: Did the hearing officer and the District Court err in concluding the Broadband Pay Plan factors, set forth in § 2-18-301(4), MCA, constitute stand-alone requirements that preempt the collective bargaining process? PROCEDURAL AND FACTUAL BACKGROUND ¶3 Plaintiffs are Compliance Specialists within the Child Support Enforcement Division of the Department. They constitute the majority of Compliance Specialists, Pay Band 6, employed by the State of Montana, and belong to MEA-MFT Local 4573, a bargaining unit of approximately 500 state employees. The collective bargaining agreements to which MEA-MFT Local 4573 and the State are parties have two-year terms, beginning on July 1st of odd years following the Legislative session, and ending two years later, on June 30th. ¶4 MEA-MFT Local 4573 negotiated collective bargaining agreements with the State that covered the 2007-2009, 2009-2011, and 2011-2013 contract years. In May 2011, while MEA-MFT Local 4573 was negotiating for the 2011-2013 contract period, Plaintiffs filed a complaint against the Department alleging Plaintiffs’ pay was not “internally equitable” in comparison with Pay Band 6 Compliance Specialists in other 3 State agencies, in violation of § 2-18-301(4), MCA. Plaintiffs did not contend the collective bargaining agreements were otherwise invalid or unenforceable. ¶5 The District Court initially certified as a class those union and non-supervisory employees of the Department who are or were Pay Band 6 Compliance Specialists. However, the District Court subsequently dismissed the complaint without prejudice on the ground that Plaintiffs had failed to exhaust their administrative remedies by pursuing a grievance before the Board of Personnel Appeals (BOPA). ¶6 In July 2012, Plaintiffs filed a grievance with BOPA. BOPA assigned the matter to a Hearing Officer, who conducted a hearing in May 2013 and issued his Findings of Fact, Conclusions of Law, and Recommended Order in November 2013. The Recommended Order held Plaintiffs were aggrieved by receiving pay that was not internally equitable with other Pay Band 6 Compliance Specialists for the years 2007-2013, and awarded damages. Both parties submitted objections to the Recommended Order to BOPA. In June 2014, BOPA issued its Final Order rejecting the Recommended Order and dismissing the grievance. BOPA held that Plaintiffs had no independent right to internally equitable pay with other Pay Band 6 Compliance Specialists, but, instead, internal equity was a factor to be considered during the collective bargaining process. BOPA reasoned that because Plaintiffs had entered into valid collective bargaining agreements for each year covered by the Hearing Officer’s Recommended Order, a disparity in pay between Plaintiffs and other Pay Band 6 Compliance Specialists provided no basis for an award of damages. 4 ¶7 Plaintiffs appealed to the District Court for judicial review of BOPA’s Final Order. The District Court vacated and reversed BOPA’s Final Order, agreeing with the Hearing Officer’s conclusions regarding Plaintiffs’ right to pay that is internally equitable with other Pay Band 6 Compliance Specialists. The Department appeals. STANDARD OF REVIEW ¶8 We review an order from a district court acting in an appellate capacity to determine whether the district court reached the correct conclusions under the appropriate standards of review. In re Transfer Terr. From Poplar Elem. Sch. Dist. No. 9 to Froid Elem. Sch. Dist. No. 65, 2015 MT 278, ¶ 10, 381 Mont. 145, 364 P.3d 1222. An agency’s conclusions of law will be upheld if the agency’s interpretation of law is correct. State Pers. Div. v. Dep’t of Public Health and Human Servs., 2002 MT 46, ¶ 20, 308 Mont. 365, 43 P.3d 305. DISCUSSION ¶9 Did the hearing officer and the District Court err in concluding the Broadband Pay Plan factors, set forth in § 2-18-301(4), MCA, constitute stand-alone requirements that preempt the collective bargaining process? ¶10 We construe a statute by “reading and interpreting the statute as a whole, without isolating specific terms from the context in which they are used by the Legislature.” MC, Inc. v. Cascade City-County Bd. of Health, 2015 MT 52, ¶ 14, 378 Mont. 267, 343 P.3d 1208 (citation and internal quotations omitted). “Statutory construction is a holistic endeavor and must account for the statute’s text, language, structure and object.” MC, ¶ 14 (citation and internal quotations omitted). “[T]his Court presumes the Legislature would not pass meaningless legislation and we must, as much as possible, harmonize 5 statutes relating to the same subject giving effect to each.” Wild v. Fregein Constr., 2003 MT 115, ¶ 20, 315 Mont. 425, 68 P.3d 855. We must also “read and construe each statute as a whole so as to avoid an absurd result and to give effect to the purpose of the statute.” MC, ¶ 14 (citation and internal quotations omitted). ¶11 Section 2-18-301(4), MCA, provides “[t]he department shall administer the pay program established by the legislature on the basis of competency, internal equity, and competitiveness to the external labor market when fiscally able.”1 Based on this statute, Plaintiffs argue they have a free standing right, independent of their collective bargaining agreements, to pay that is internally equitable. The Department argues that internal equity is a goal achieved through collective bargaining, not an independent actionable right that preempts the function of collective bargaining conducted by each agency and its employees to negotiate wages. We agree with the Department. ¶12 The primary error in the analysis employed by the Hearing Officer and the District Court is the interpretation of “internal equity” in isolation from the context in which the term is used by the Legislature, running afoul of a basic principle of statutory construction. MC, ¶ 14. Regardless of what the phrase “internal equity” means, the conclusion that it serves as a stand-alone right ignores the rest of the statute’s language. The preceding words “shall administer the pay program . . . on the basis of” mean that competency, internal equity, and competitiveness are the factors to be considered in administering the pay program. Merriam-Webster’s Dictionary 102 (11th ed. 2003) 1 Although this case implicates prior versions of the statute—2007, 2009, 2011, and 2013—we conduct our analysis under the current version because the minimal changes made to the statute from year to year have no effect on the analysis. 6 (“Basis” means “something on which something else is established.”). However, none of the factors are elevated above the others, thus indicating that competency, internal equity, and competiveness are factors to be weighed rather than comprising individual requirements. See Fellows v. Dep’t of Admin., 2011 MT 88, ¶ 16, 360 Mont. 167, 252 P.3d 196 (affirming District Court’s conclusion that § 2-18-301(4), MCA, did not mandate equal pay but required that pay be set on the basis of competency, internal equity, and competitiveness.). This is supported by the subsequent language “when fiscally able,” which allows the Legislature to consider financial constraints when administering the pay program. ¶13 The reason for the statute’s flexible construct becomes obvious when the statute is read in conjunction with the other Broadband Pay statutes and the Collective Bargaining statutes. The Broadband Pay statutes contemplate the role that collective bargaining is to play in setting pay. See § 2-18-301(3), MCA (“Total funds required to implement the pay increases . . . may not be increased through collective bargaining over the amount appropriated by the legislature.”); § 2-18-301(7), MCA (“The department may promulgate rules not inconsistent with the . . . collective bargaining statutes . . . .”); § 2-18-303(4)(b), MCA (“Methods of administration consistent with the purpose of this part . . . may be provided for in collective bargaining agreements.”). The Collective Bargaining statutes mandate that the State and the union representative have a duty to bargain collectively and in good faith. Section 39-31-305(1), MCA; see also § 39-31-101, MCA (“[I]t is the policy of the state of Montana to encourage the practice and procedure of collective bargaining to arrive at friendly adjustment of all disputes 7 between public employers and their employees.”). This duty expressly requires that the agency and union representative negotiate wages, hours, and fringe benefits. Section 39-31-305(2), MCA. In other words, an agency cannot set the pay of its employees without collective bargaining. See Fellows, ¶ 15. ¶14 Given that the Legislature has provided “[a]n agreement between the public employer and a labor organization must be valid and enforced under its terms when entered into in accordance with the provisions of this chapter . . . ,” § 39-31-306(3), MCA, it would be absurd, MC, ¶ 14, to conclude the Legislature had intended the mandatory collective bargaining process to be undone or circumscribed because there was not equal or near equal pay across all agencies—a point to which we have previously alluded. See Fellows, ¶ 15 (“[I]t is not clear from the record whether the change in pay sought by [the plaintiffs] would comply with their collective bargaining agreement.”). ¶15 Rather, the Legislature intended internal equity to be a primary bargaining point between those agencies and employees that are required to collectively bargain for wages, which “harmonize[s]” the Broadband Pay statutes with the Collective Bargaining statutes. Wild, ¶ 20. Thus, “internal equity” is a key factor in determining whether the agency bargained in good faith. This reading gives substance both to the Legislature’s intent that the pay program be administered “on the basis of competency, internal equity, and competitiveness . . . ,” § 2-18-301(4), MCA, and that “[a]n agreement between the public employer and a labor organization must be valid and enforced under its terms . . . ,” § 39-31-306(3), MCA. 8 ¶16 This understanding is amplified by recognition of the remedies that have been provided for union member employees dissatisfied with the collective bargaining process. Union members may file an unfair labor practice complaint against the State for failure to bargain in good faith. Section 39-31-401, MCA. Similarly, they can file an unfair labor practice complaint against the union if the union breaches its duty to bargain in good faith on the members’ behalf. Section 39-31-402, MCA. Union members can also refuse to make concessions, request mediation, or refuse to ratify the collective bargaining agreement. Sections 39-31-305(2), 307, MCA. ¶17 In sum, the statutory factor of “internal equity” is not a stand-alone right that may be pursued independently and in preemption of the work of the collective bargaining process. Therefore, we vacate the District Court’s Order and reinstate BOPA’s Final Order. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ PATRICIA COTTER /S/ LAURIE McKINNON

April 12, 2016

9b552c82-bb8f-49ab-b9d4-a1b9635ed314

In re S.G.R.

N/A

DA 15-0077

Montana

Montana Supreme Court

DA 15-0077 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 70 IN THE MATTER OF: S.G.R., Respondent and Appellant. APPEAL FROM: District Court of the Tenth Judicial District, In and For the County of Fergus, Cause No. DI-14-28 Honorable Jon A. Oldenburg, Presiding Judge COUNSEL OF RECORD: For Appellant: Amy Poehling Eddy, The Law Offices of Amy Eddy, PLLC, Kalispell, Montana Nicholas K. Brooke, Smith & Stephens, P.C., Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Mardell Ployhar, Assistant Attorney General, Helena, Montana Thomas P. Meissner, Fergus County Attorney, Craig R. Buehler, Special Deputy County Attorney, Lewistown, Montana Submitted on Briefs: February 24, 2016 Decided: March 22, 2016 Filed: __________________________________________ Clerk March 22 2016 Case Number: DA 15-0077 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 S.G.R. appeals the order of the Tenth Judicial District Court, Fergus County, extending his civil commitment to the Montana Mental Health Nursing Care Center (Nursing Care Center) for a period not to exceed one year. ¶2 S.G.R. raises two issues on appeal, which we combine and restate as follows: Whether the District Court’s order met the statutory requirements for extending commitment under §§ 53-21-127 and -128, MCA. ¶3 We affirm. PROCEDURAL AND FACTUAL BACKGROUND ¶4 S.G.R is a seventy-six year old man with a lengthy history of severe alcoholism, mental health issues, and multiple periods of institutionalization. He relies on a wheelchair for mobility. Prior to his initial commitment in 2014, S.G.R. had established a pattern of receiving his Social Security check on the first of each month, staying at a hotel, and drinking until his money ran out. He would then check in to the Community Crisis Center in Billings for the remainder of the month. While at the Community Crisis Center in early 2014, S.G.R. suffered a seizure as a result of alcohol withdrawal and was hospitalized. During his hospitalization, S.G.R. was diagnosed with dementia secondary to chronic alcoholism, which prompted the State to file a petition for involuntary commitment. 3 ¶5 On February 7, 2014, S.G.R. consented to his initial commitment to the Montana State Hospital for a period not to exceed three months. Before the initial commitment expired, the State filed a petition for extension of commitment. On May 9, 2014, S.G.R.’s commitment was extended without objection for a period not to exceed six months. He was transferred to the Nursing Care Center in June 2014. Upon admission to the Nursing Care Center, S.G.R. was diagnosed with depression and alcohol-induced dementia. ¶6 On October 23, 2014, Susan Stevens, a psychology specialist at the Nursing Care Center, petitioned the District Court to extend S.G.R.’s commitment based on her opinion that S.G.R. was in need of further evaluation and treatment and that S.G.R. required detention “to prevent injury to [himself] or to others.” The next day, the District Court appointed a “friend” and legal counsel for S.G.R. ¶7 On December 16, 2014, the District Court held a contested hearing at which S.G.R. was present and represented by counsel. Witnesses presented testimony that S.G.R. had received inpatient alcohol treatment numerous times over the years in several different states; had been to the Galen Chemical Dependency Unit at least seven times; had been admitted four times to the Montana State Hospital; and was presenting a “consistent pattern” of staying sober for a few months, then starting to drink, isolating himself and quitting his medications, leading to paranoid delusions and significant seizures that recently had nearly killed him. While at the Nursing Care Center, S.G.R. had attempted three times to elope from the facility (leave without permission). On one 4 elopement attempt, S.G.R. tried to take his wheelchair down a significant decline, over an embankment, toward several frog ponds. During the last elopement attempt, S.G.R. rolled his wheelchair into traffic attempting to flag down a ride. Stevens testified that in all three cases, especially the last incident, S.G.R. “presented himself in a very dangerous situation.” Steve Cummings, another member of the Nursing Care Center staff, testified that S.G.R. was “pretty aggressive, very verbally abusive,” when staff attempted to bring him back to the facility on the most recent occasion, and that they had to summon assistance from law enforcement. ¶8 Stevens testified that S.G.R. has “extremely poor” insight into his alcoholism, denying it until the day of the hearing, and has no insight into his dementia “and will deny it.” With his dementia, Stevens advised the court, S.G.R. lacked ability to understand his circumstances or needs, and had a disregard for his safety. Stevens concluded that S.G.R. presents as a danger to himself because of his dementia which is [ex]acerbated by his alcoholism, which he shows a consistent pattern of relapsing and drinking the alcohol which then aggravates his mental health symptoms to the point that either a) he nearly dies or [b)] he becomes paranoid and suicidal. I also believe he does not have the means to care for himself outside of a structured environment at this time. ¶9 Stevens’s written mental health assessment further substantiated her concerns. It concluded that S.G.R. presented a danger to himself because of his lack of insight and judgment into his illness and his continued belief that he can live independently, without assistance with his illness, “despite nearly dying and being homeless.” She opined that S.G.R. was not amenable to placement in a group home or release to the community “due 5 to his age and history of leaving placements to drink, which exacerbates his mental illness. . . . [and] his pervasive pattern of non-compliance to medical treatment.” ¶10 S.G.R. testified, describing himself as an “old cowboy” who does not like being kept in “captivity.” He stated that if he was released, he would maintain his sobriety by attending Alcoholics Anonymous meetings and by continuing to take his prescribed medications. S.G.R. claimed that he had money in a bank account and that he owned a home in Wyoming, which he could live in if released. ¶11 Cummings testified that S.G.R.’s placement options were limited because of the combination of his mental illness and his alcoholism. Cummings expressed concern that S.G.R. was unable to maintain sobriety, observing that during his stay at the State Hospital he “managed to get away from them and caught a ride to a bar and had drinks there.” Based on his conversations with S.G.R.’s family, Cummings testified that it was “not an option” for S.G.R. to return to the family home in Wyoming. Although Cummings committed to exploring admission into a veterans’ home or assisted living facility, he believed it would be “very difficult” as the veterans’ home tended to “refuse most people” with a mental health history, and an assisted living facility would not be suitable unless S.G.R. maintained sobriety. ¶12 At the conclusion of the hearing, the District Court granted the petition because S.G.R. “does suffer from a mental disease or defect, that being alcohol induced dementia, which leads to him being a danger to himself.” The court cited S.G.R.’s elopement risk and his inability to understand his own conditions as risks to his safety, particularly in 6 light of his history of seizures and the risk of his “get[ting] back on alcohol.” On January 12, 2015, the District Court issued its Order for Recommitment requiring that S.G.R. be committed to the Nursing Care Center for a period not to exceed one year from December 16, 2014, and directing that the staff begin looking for alternative placement for him. S.G.R. appeals. STANDARDS OF REVIEW ¶13 We review commitment orders to determine whether a district court’s findings of fact are clearly erroneous and its conclusions of law are correct. In re S.M., 2014 MT 309, ¶ 13, 377 Mont. 133, 339 P.3d 23. A finding of fact is clearly erroneous if it is not supported by substantial evidence, if the district court misapprehended the effect of the evidence or if, after a review of the entire record, we are left with a definite and firm conviction that a mistake has been made. In re L.K.-S., 2011 MT 21, ¶ 14, 359 Mont. 191, 247 P.3d 1100. Whether a district court’s findings of fact meet statutory requirements is a question of law that we review for correctness. In re L.L.A., 2011 MT 285, ¶ 6, 362 Mont. 464, 267 P.3d 1. DISCUSSION ¶14 Whether the District Court’s order met the statutory requirements for extending commitment under §§ 53-21-127 and -128, MCA. ¶15 Before a period of civil commitment expires, the “professional person in charge of the patient at the place of commitment may petition the district court in the county where the patient is committed for extension of the commitment period.” Section 53-21-128(1)(a), MCA. “If the court finds that the patient continues to suffer from a 7 mental disorder and to require commitment, the court shall order commitment as set forth in § 53-21-127.” Section 53-21-128(1)(d), MCA. Section 53-21-127(7), MCA, provides that commitment is justified so long as any one of the criteria listed under § 53-21-126(1), MCA, is satisfied. The criteria are as follows: (a) whether the respondent, because of a mental disorder, is substantially unable to provide for the respondent’s own basic needs of food, clothing, shelter, health, or safety; (b) whether the respondent has recently, because of a mental disorder and through an act or an omission, caused self-injury or injury to others; (c) whether, because of a mental disorder, there is an imminent threat of injury to the respondent or to others because of the respondent’s acts or omissions; and (d) whether the respondent’s mental disorder, as demonstrated by the respondent’s recent acts or omissions, will, if untreated, predictably result in deterioration of the respondent’s mental condition to the point at which the respondent will become a danger to self or to others or will be unable to provide for the respondent’s own basic needs of food, clothing, shelter, health, or safety. Section 53-21-126(1), MCA. Section 53-21-127(8)(a), MCA, requires the court to make certain findings of fact, including “a detailed statement of the facts upon which the court found the respondent to be suffering from a mental disorder and requiring commitment.” ¶16 In its Order for Recommitment, the District Court did not specify which of the § 53-21-126(1), MCA, criteria on which it relied to conclude that S.G.R. continued to require commitment. The court did, however, review procedural history and recount specific portions of testimony presented at the December hearing. Noting that they were “[b]ased on testimony given at the hearing and the Mental Health Assessment filed by 8 Sue Stevens,” the court then set forth the following five findings of fact: 1) “[S.G.R.] continues to suffer from the mental disorder of Dementia with behavioral disturbances, Alzheimer’s disease, Drug Induced Persisting Dementia, Alcohol Dependence and Insomnia”; 2) “Currently, the most appropriate alternative and least restrictive placement for [S.G.R.] is the [Nursing Care Center]. The Care Plan Team will start looking for other alternative placements”; 3) “The treatment care plan as filed with this court appears to be appropriate for [S.G.R.] and should be continued with regular review”; 4) It is necessary for the [Nursing Care Center] to be given the authority to administer all medications deemed necessary and appropriate for [S.G.R.] and to administer those medications involuntarily, if necessary, as he is unable to appreciate the necessity for a proper medication regimen to control his mental illness”; and 5) “Fergus County shall not be held responsible for any costs incurred in this matter. [S.G.R.] is a resident of Yellowstone County, which is the county responsible for any costs incurred in this matter as provided by MCA §§ 53-21-128(1)(c), 53-21-132, and/or 53-21-113.” ¶17 S.G.R. argues that the District Court’s findings in its Order for Recommitment were insufficient to satisfy the statutory requirements set forth above. The State counters that “[a]lthough that section of the order does not contain detailed factual findings about S.G.R., the section of the order where the court summarized [hearing] testimony should also be viewed as findings.” Additionally, the State suggests that this Court rely on the District Court’s oral findings to evaluate whether the requirements under § 53-21- 127(8)(a), MCA, were met. Specifically, the State proposes that we rely on the District 9 Court’s statement at the conclusion of the hearing, “Well the Court will find that [S.G.R.] does suffer from a mental disease or defect, that being alcohol induced dementia, which leads to him being a danger to himself.” Further, the State proposes that we rely on the District Court’s express comment that S.G.R.’s delusions, elopement risk, and inability to understand his own conditions “put him at risk.” ¶18 In L.L.A., L.L.A. challenged the sufficiency of a district court’s factual findings supporting her involuntary commitment. L.L.A., ¶ 6. In that case, the district court issued seven findings of fact supporting its order of commitment that were “derived almost exclusively from the language of § 53-21-126, MCA.” L.L.A., ¶ 13. We reversed the order of commitment, concluding that the court’s findings were insufficient because they lacked any references to L.L.A’s actual behavior to demonstrate why she required commitment. L.L.A., ¶ 13. ¶19 Conversely, in In re M.P.-L., 2015 MT 338, 381 Mont. 496, 362 P.3d 627, we upheld the involuntary commitment order in the face of M.P.-L.’s challenge to the sufficiency of the court’s factual findings. In that case, the district court issued four findings of fact supporting its order of commitment. M.P.-L., ¶ 18. We concluded: The District Court included information in the findings reflecting M.P.-L.’s circumstances leading to the court’s conclusions under § 53-21-126(1), MCA. The evidence included conclusions from testimony by [the professional who conducted an evaluation of M.P.-L.] that M.P.-L.: suffered from mental illness; made three suicide threats; and continued to be a threat to herself. 10 M.P.-L., ¶ 19. We noted that although the district court’s written findings are “bare-boned,” the court provided sufficient reasoning in its findings to justify commitment and satisfy the requirements under § 53-21-127(8), MCA. M.P.-L., ¶ 20. ¶20 We have applied the doctrine of implied findings in involuntary commitment cases, “consult[ing] hearing transcripts in addition to the written findings” where the latter are claimed to be insufficient to support commitment. S.M., ¶ 28. The doctrine of implied findings “holds that where ‘findings are general in terms, any findings not specifically made, but necessary to the determination, are deemed to have been implied, if supported by the evidence.’” S.M., ¶ 28 (quoting In re Mental Health of S.C., 2000 MT 370, ¶ 15, 303 Mont. 444, 15 P.3d 861). In S.M., we invoked the doctrine and held that a district court’s written order of commitment must be “minimally sufficient” and at least adequate to apprise the staff at the receiving facility, treatment professionals, and law enforcement of the particular condition and behaviors that gave rise to the need for commitment. S.M., ¶ 29. ¶21 There is not a substantive distinction between the order entered in this case and the commitment orders we affirmed in M.P.-L. and S.M. Although we noted in S.M. that the District Court “could have been more specific and listed more of the facts,” we relied on the record, the court’s oral and written findings, and the doctrine of implied findings to conclude that the order was “minimally sufficient” and properly based on the respondent’s “individual circumstances.” S.M., ¶ 22. Similarly, here, although the District Court’s written findings are spartan, they were stated in terms, like in M.P.-L., 11 that recounted specific witness testimony from the hearing. M.P.-L., ¶ 18. Here, in fact, the court expressly noted that its findings were “based on” that evidence. The record establishes that the court’s written, oral, and implied findings properly were based on S.G.R.’s “individual circumstances.” S.M., ¶ 22. ¶22 The order that we reversed in L.L.A. was insufficient because it “contain[ed] no indication of the facts upon which [the court] found that” L.L.A. was substantially unable to protect her life and safety, and no information specifically reflecting L.L.A’s circumstances or particular behaviors that supported the district court’s conclusions. L.L.A., ¶¶ 11, 13. Here, in contrast, the order identifies the testimony and evidence on which the court premised its findings. The evidence and testimony support the court’s conclusion that S.G.R.’s mental illness required extension of his commitment because he was a “danger to himself” and was “unable to appreciate the necessity for a proper medication regimen to control his mental illness.” ¶23 Although the District Court’s recommitment order is not a model, it does not suffer the same statutory defect as in L.L.A. because the order reflects the particular circumstances and behaviors that supported the court’s conclusions, and because the court provided sufficient reasoning to justify its decision. The District Court’s oral findings—which are appropriate for consideration under our precedent, S.M., ¶ 27—substantiate its determination that the standards for recommitment had been satisfied. We conclude that the District Court’s written order, when considered as a whole and together with the court’s oral findings, was “minimally sufficient” to meet the 12 involuntary commitment statute’s requirement for a “detailed statement” on which its conclusions were based, and that it was supported by substantial evidence. S.M., ¶ 22. ¶24 S.G.R. also faults the District Court for failing to identify which subsection of the applicable statute authorized the commitment. Based on the court’s oral statements, S.G.R. “assum[es]” that he was committed pursuant to § 53-21-126(1)(d), MCA, and argues that his commitment to the Nursing Care Center is not legally or factually supportable under that subsection. S.G.R. argues that because the court failed to tie its findings to any other subsection of the statute, it appears to have premised commitment on § 53-21-126(1)(d), MCA, which required the court to commit him to a community placement instead of to the Nursing Care Center. Section 53-21-127(7), MCA. The District Court’s oral finding that S.G.R.’s dementia and inability to understand his own condition “put him at risk” of danger does reflect the language of subsection (1)(d). But, although its findings about the reason for commitment were “general in terms,” they clearly imply that S.G.R. was recommitted because he was “substantially unable to provide for his own basic needs of food, clothing, shelter, health, or safety.” Section 53-21-126(1)(a), MCA. The District Court recognized that S.G.R. could not live independently, lacked appreciation for his condition, and was unable to keep himself safe. As discussed above, the record contains substantial evidence to support the District Court’s conclusions in this regard. 13 CONCLUSION ¶25 For the foregoing reasons, we hold that the District Court’s written order was minimally sufficient and supported by substantial evidence. Its January 12, 2015 Order for Recommitment is affirmed. /S/ BETH BAKER We concur: /S/ JAMES JEREMIAH SHEA /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ MIKE McGRATH Justice Laurie McKinnon, dissenting. ¶26 The order extending S.G.R.’s commitment was not “minimally sufficient,” as this Court holds today, and his involuntary commitment must be reversed.1 The District Court’s findings failed to detail the factual basis of its determination that Respondent continued to suffer from a mental disorder and required continued commitment. The 1 S.G.R. does not raise, and therefore I do not address, whether the time of Respondent’s second extension of commitment, of up to one year, violates the time limitations imposed by § 53-21-128, MCA. I note, however, that § 53-21-128(1) and (2), MCA, appear to place a time limitation of six months on any order extending commitment, while § 53-21-128(3), MCA, appears to prohibit further extensions from affecting a patient’s custody for more than one year. It does not appear that, under any construction of § 53-21-128, MCA, a second order for recommitment could be for as long as one year. However, the relationships between the various time limitations found in the subsections of § 53-21-128, MCA, have not been raised by the parties or addressed by the Court. 14 District Court’s findings, therefore, failed to satisfy the statutory criteria outlined in §§ 53-21-127 and -128, MCA. The court’s summarization of the testimony presented and restatement of Respondent’s diagnosis do not meet the minimum “bare-boned” findings found sufficient in M.P.-L. and S.M. and do not constitute strict compliance with the statutory mandate. Finally, this Court utilizes the doctrine of implied findings inappropriately to determine a conclusion of law: “that the standards for recommitment had been satisfied.” Opinion, ¶ 23. In fact, the District Court failed to indicate pursuant to which statutory subsection it found S.G.R. required recommitment— § 53-21-126(1)(a), (b), (c), or (d). ¶27 The situation in M.P.-L., is distinguishable from S.G.R.’s. There, the district court issued two orders. This Court determined that the first order was “deficient and failed to comply with § 53-21-127(8)(a), MCA,” because it did not include a detailed statement of facts. M.P.-L., ¶¶ 10-11. However, the district court issued an additional order, which, when viewed together with the first order, “provided proper facts and information the court used to determine that M.P.-L. was suffering a mental disorder requiring commitment.” M.P.-L., ¶ 22. More importantly, the statutory subsection upon which the court relied to find M.P.-L. required commitment was set forth in the court’s order. Particularly, the court’s factual findings that M.P.-L. attempted suicide on three occasions established that M.P.-L. presented an “imminent threat of injury to [herself],” under § 53-21-126(1)(c), MCA. M.P.-L., ¶ 22. We concluded this was minimally sufficient and went on to “reiterate that the statutory requirements of an involuntary commitment 15 must be strictly adhered to by the district courts, including the requirement of detailed findings under § 53-21-127(8)(a), MCA, in order to justify appropriate decisions and to follow proper procedure.” M.P.-L., ¶ 24. ¶28 S.M., is even less applicable to the case at bar than M.P.-L. In that case, S.M. did not primarily challenge the sufficiency of the district court’s factual findings, as the Court misstates. Opinion, ¶ 20. Instead, “S.M. argue[d] there was insufficient evidence to support the District Court’s determination that she was substantially unable to care for her own health and safety” or, alternatively, that the “District Court failed to make a ‘detailed statement of facts’ supporting this determination.” S.M., ¶ 19. This distinction is important and led to us utilizing the doctrine of implied findings, which was appropriate for our analysis of her insufficient evidence challenge, but inappropriate for our analysis of S.G.R.’s insufficient order challenge. In S.M., we also discussed whether the findings of fact were sufficient; however, the challenge was focused on whether evidence in the record supported the district court’s conclusion that she required commitment under § 53-21-126(1)(d), MCA. S.M., ¶ 19. ¶29 The findings here do not specify what the court relied on to find S.G.R. suffered from a mental disorder or what facts, statute, or subsection the court considered and utilized to determine his continued commitment was necessary. This failure confused the parties’ arguments on appeal. S.G.R., for the sake of his arguments on appeal, assumes the District Court extended his commitment under subsection (d) of § 53-21-126(1), MCA, while the State assumes the District Court relied on subsection (c). This Court 16 inexplicably determines that “although its findings about the reason for commitment were ‘general in terms,’ they clearly imply that S.G.R. was recommitted because he was ‘substantially unable to provide for his own basic needs of food, clothing, shelter, health, or safety’” under subsection (a). Opinion, ¶ 24. This confusion demonstrates perfectly what the District Court failed to accomplish in its order. Contrary to being “clear,” it is completely unclear which statutory subsection of § 53-21-126(1), MCA, the District Court relied upon in recommitting S.G.R. against his will. The District Court cannot rely on evidence in the record as a shortcut method to fill in gaps in its order that are required by statute. In light of the order’s deficiencies, the statutory requirements authorizing S.G.R.’s second extension of commitment were not satisfied and must be reversed. ¶30 S.G.R.’s second issue raised on appeal asks whether the District Court erred in extending his commitment to the Nursing Care Center instead of a community facility. He contends that the District Court was prohibited by statute from extending his commitment to the Nursing Care Center. Under § 53-21-127(7), MCA, “if the court relies solely upon the criterion provided in 53-21-126(1)(d)” (that if untreated, respondent “will become a danger to self or to others or will be unable to provide for the respondent’s own basic needs of food, clothing, shelter, health, or safety”), “the court may require commitment only to a community facility or program or an appropriate course of treatment . . . and may not require commitment at the state hospital, a behavioral health inpatient facility, or the Montana mental health nursing care center.” Section 53-21-127(7), MCA. Because we do not know which statutory subsection of 17 § 53-21-126(1), MCA, the District Court relied upon to extend S.G.R.’s commitment—it could be either subsection (a), (c), or (d) according to the parties and this Court—we cannot know whether § 53-21-127(7), MCA, applies or whether S.G.R.’s second argument on appeal has merit. Despite the Court’s efforts to assemble an order upon the basis of implied findings, a statement by the District Court during trial that S.G.R.’s mental condition “put him at risk” does not equate to a statutory determination being made by the trial court regarding the necessity of commitment. That S.G.R.’s mental condition “put him at risk” could have been logically construed as support for him being “substantially unable to provide for his own basic needs of food, clothing, shelter, health, or safety” under § 53-21-126(1)(a), MCA; an “imminent threat of injury to [himself]” under § 53-21-126(1)(c), MCA; or even “predictably result in deterioration of [his] mental condition to the point at which [he] will become a danger to self,” under § 53-21-126(1)(d), MCA. It does not, however, “clearly imply” any of these options. ¶31 I believe the District Court’s order extending S.G.R.’s commitment is insufficient and must be reversed. However, the most concerning error the Court makes is in failing to appreciate the role an appellate court has to review determinations of the trial court. When those determinations have not been made in the first instance, we cannot string a web of implied findings and baldly state that it is “clear” upon which statutory subsection the trial court relied in fashioning its order of commitment. We do more harm to litigants and our precedent through such faulty analysis and manipulation of the record than had 18 we simply reversed an individual’s order of commitment for its insufficiency, despite that individual’s need for assistance. /S/ LAURIE McKINNON Justice Jim Rice joins in the dissenting Opinion of Justice McKinnon. /S/ JIM RICE

March 22, 2016

6fcce5c0-5f25-4871-abe3-6acdc1ad1b88

In re J.B.

2016 MT 68

DA 15-0356

Montana

Montana Supreme Court

DA 15-0356 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 68 IN THE MATTER OF: J.B., Jr., A Youth in Need of Care. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DN 13-120 Honorable Karen Townsend, Presiding Judge COUNSEL OF RECORD: For Appellant: Tracy Labin Rhodes, Attorney at Law; Missoula, Montana (for Father) For Appellee: Timothy C. Fox, Montana Attorney General, Katie F. Schulz, Assistant Attorney General; Helena, Montana Karen P. Kane, Assistant Attorney General; Missoula, Montana Submitted on Briefs: February 10, 2016 Decided: March 22, 2016 Filed: __________________________________________ Clerk March 22 2016 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 J.B., Sr., appeals from an order entered by the Fourth Judicial District Court, Missoula County, terminating his parental rights to J.B., Jr. ¶2 We affirm, and address the following issues: 1. Did the District Court err by holding the treatment plan was appropriate? 2. Did the District Court abuse its discretion by terminating Father’s parental rights? PROCEDURAL AND FACTUAL BACKGROUND ¶3 J.B., Jr. (J.B.) was only a few weeks old when his parents, J.B., Sr. (Father), and K.S. (Mother), took him shoplifting at Missoula’s JC Penney store. When confronted by security, Mother fled in her car with J.B. Father pulled a knife, declaring he was “not returning to prison,” and fled on foot. At the time, Father was on probation, and two outstanding felony warrants for his arrest had been issued from Ravalli County. ¶4 Long before this incident, the Department of Public Health and Human Services, Child and Family Services Division (Department), were familiar with Mother and Father. The Department had previously been involved with proceedings regarding J.B.’s siblings, including the termination of Father’s parental rights to J.B.’s brother, E.B., on grounds of abandonment. After receiving the report of the shoplift-turned-robbery, the Department investigated the incident and filed a petition for Emergency Protective Services, Adjudication of J.B. as a Youth in Need of Care, and Temporary Legal Custody. The District Court granted the Department’s petition upon Mother’s and Father’s stipulation 3 to the adjudication of J.B. as a Youth in Need of Care. J.B. was then placed in a foster home with his sibling, E.B. ¶5 In the Ravalli County action related to the two outstanding felony warrants, Father was sentenced to ten years suspended on each felony, to run concurrently with an unspecified sentence Father was serving in another Ravalli County action. The record does not indicate the length of the other sentence. In the Missoula County robbery action that arose from the incident here, the District Court, citing Father’s seven prior felony convictions, sentenced him to the Department of Corrections for 20 years with 18 years suspended, to run concurrently with his sentences in Ravalli County. ¶6 The Department provided a treatment plan for Father while he was incarcerated, which was intended to preserve Father’s parent-child relationship with J.B. The treatment plan had several goals designed to provide the Department with “the necessary information to determine whether it will be safe for [J.B.] to return to [Father’s] care,” and to instill “long-term change and . . . lasting stability so that further intervention by [the Department] is no longer needed.” The treatment plan required Father to perform numerous tasks, including refraining from committing further criminal offenses, completing a chemical dependency evaluation, and attending available parenting classes. The treatment plan stated the completion date for these tasks was “ongoing.” Father, represented by counsel, stipulated to the treatment plan. ¶7 Although Father completed a chemical dependency evaluation and attended group therapy sessions, he was involved in numerous behavioral incidents while incarcerated, 4 including flooding his cell, breaking a sprinkler head, and not complying with orders. At the termination hearing, Father testified: Q: When you went into Missoula County Detention Facility in June of 2014, you were involved in several behavioral incidents in there, correct? A: Yes, a few. Q: Including flooding your cell? A: Yes. Q: Breaking a sprinkler head? A: Yes. Q: Disruptive behavior and not complying with orders? A: Yes. Q: And then just recently in boot camp you were disciplined for violating and refusing to comply with a direct order, correct? A: Yes. ¶8 The Department, alleging Father’s treatment plan had not been successful, petitioned the District Court to terminate Father’s parental rights to J.B. The District Court agreed, holding the treatment plan “was not successful” and that Father had an “inability to conform his conduct to the law” that was “unlikely to change within a reasonable time.” J.B. had been living in foster care with his brother, E.B., for over 15 months at that time. Father appeals.1 1 Mother’s parental rights to J.B., Jr., were also terminated by the District Court. She filed an appeal, which was initially consolidated with Father’s appeal herein but ultimately dismissed upon her counsel’s motion to withdraw and this Court’s independent examination of the record pursuant to Anders v. California, 386 U.S. 738 (1967), on the ground that an appeal in her case would be wholly frivolous. 5 STANDARD OF REVIEW ¶9 Conclusions of law are reviewed to determine whether the district court interpreted the law correctly. In re J.N., 1999 MT 64, ¶ 11, 293 Mont. 524, 977 P.2d 317. ¶10 A district court’s decision to terminate parental rights is reviewed for an abuse of discretion. In re A.N.W., 2006 MT 42, ¶ 29, 331 Mont. 208, 130 P.3d 619. Findings of fact are reviewed for clear error. In re D.B., 2007 MT 246, ¶ 18, 339 Mont. 240, 168 P.3d 691. A factual finding is clearly erroneous if it is not supported by substantial evidence, if the court misapprehended the effect of the evidence, or if review of the record convinces the Court a mistake was made. In re C.J.M., 2012 MT 137, ¶ 10, 365 Mont. 298, 280 P.3d 899. We view the evidence in the light most favorable to the prevailing party when determining whether substantial credible evidence supports the district court’s findings. In re B.D., 2015 MT 339, ¶ 5, 381 Mont. 505, 362 P.3d 636. ¶11 A district court’s decision will not be disturbed on appeal unless there is a mistake of law or a finding of fact clearly erroneous that amounts to an abuse of discretion. In re M.N., 2011 MT 245, ¶ 14, 362 Mont. 186, 261 P.3d 1047. DISCUSSION ¶12 Under § 41-3-609(1)(f), MCA, a court may terminate parental rights upon a finding, established by clear and convincing evidence, that the child is an adjudicated youth in need of care and both of the following exist: (i) an appropriate treatment plan that has been approved by the court has not been complied with by the parents or has not been successful; and 6 (ii) the conduct or condition of the parents rendering them unfit is unlikely to change within a reasonable time. ¶13 Father makes two challenges on appeal. First, he argues the District Court erred by concluding the treatment plan was appropriate. Second, he argues the District Court erred by concluding the treatment plan was not successful. ¶14 1. Did the District Court err by holding the treatment plan was appropriate? ¶15 Father argues the treatment plan was not appropriate because it provided no deadlines, instead stating the completion date for each task was “ongoing.” The Department counters that Father did not properly preserve this issue for review by timely objecting to the treatment plan. ¶16 “Where a parent fails to object to a treatment plan in a timely manner, the parent waives any argument regarding the propriety of the treatment plan.” In re T.S., 2013 MT 274, ¶ 25, 372 Mont. 79, 310 P.3d 538 (citing In re C.J.M., 2012 MT 137, ¶ 16, 365 Mont. 298, 280 P.3d 899); see also In re A.A., 2005 MT 119, ¶¶ 21-28, 327 Mont. 127, 112 P.3d 993 (parent who, with representation of counsel, stipulated to several treatment plans, and failed to object in a timely manner, waived her argument that the treatment plans were not appropriate). ¶17 The treatment plan, upon Father’s stipulation, was approved by the District Court in March 2014. Father was represented by counsel. It was not until just before the termination hearing, in March 2015, that Father raised an objection to the lack of deadlines in his treatment plan. If Father was legitimately concerned about the lack of 7 deadlines in the treatment plan, he could have raised the issue when the plan was before the District Court for approval. Neither did Father raise a concern about the lack of deadlines during the course of the plan’s implementation, waiting until right before the termination hearing to raise the issue. We agree with the Department. Under T.S., Father waived his argument. ¶18 2. Did the District Court abuse its discretion by terminating Father’s parental rights? ¶19 Father argues the District Court abused its discretion because its legal conclusion that Father’s treatment plan was not successful was based on the finding that Father’s incarceration rendered the plan unsuccessful—a rationale we expressly forbade in In re A.T., 2003 MT 154, 316 Mont. 255, 70 P.3d 1247. While we acknowledge Father’s point regarding sole reliance on incarceration contemplated by a treatment plan, we affirm the District Court because of additional findings sufficient to support the District Court’s conclusion that the plan was unsuccessful. ¶20 Section 41-3-609(1)(f)(i), MCA, is written in the disjunctive: the Department can meet its burden by showing either the treatment plan has not been complied with, “or has not been successful.” We have recognized that the disjunctive language indicates a district court may find a treatment plan unsuccessful “even if the parent has completed all the required tasks.” In re D.F., 2007 MT 147, ¶ 36, 337 Mont. 461, 161 P.3d 825 (citing In re A.F., 2003 MT 254, ¶ 25, 317 Mont. 367, 77 P.3d 266); see also In re D.A., 2008 MT 247, ¶ 22, 344 Mont. 513, 189 P.3d 631 (“Well-intentioned efforts toward successful completion of a treatment plan do not demonstrate either the completion or the success of 8 the plan.”) (citation omitted). However, a district court may not conclude the treatment plan has been unsuccessful simply because of a parent’s incarceration status when the parent’s incarceration status was known and considered by the Department when formulating the plan. A.T., ¶ 24. ¶21 The District Court’s conclusion that the treatment plan was unsuccessful was based in part on Finding of Fact 13, which stated Father “has been incarcerated since the inception of this case and was not released from his incarceration so that he could parent [J.B.].” The Department’s treatment plan expressly considered Father’s incarceration and nothing in the record indicates Father’s sentence was altered from that which the Department contemplated when it formulated the treatment plan. Had the District Court relied on nothing more, the District Court’s decision to terminate may well have conflicted with our decision in A.T. However, a review of additional findings establishes adequate grounds for termination. ¶22 To terminate parental rights under § 41-3-609(1)(f), MCA, a district court must make two basic findings. First, the district court must find the treatment plan “has not been complied with . . . or has been unsuccessful.” Section 41-3-609(1)(f)(i), MCA. Second, the district court must find “the conduct or condition of the parents rendering them unfit is unlikely to change within a reasonable time.” Section 41-3-609(1)(f)(ii), MCA. The phrase, “the conduct or condition” (emphasis added), indicates that § 41-3-609(1)(f)(ii), MCA, is referring to a prior finding of a conduct or condition that has rendered the parent unfit. Given the statute does not expressly require the district 9 court to make such a finding, the meaning of the statute is that the condition rendering the parent unfit is the condition(s) or reason(s) in § 41-3-609(1)(f)(i), MCA, that caused the treatment plan to be unsuccessful. ¶23 Finding of Fact 14 states “Father’s conduct or condition of inability to conform his conduct to the law resulting in incarceration, and inability to remain free of illicit drugs when out of incarceration, is unlikely to change within a reasonable time.” The District Court’s finding that Father had an “inability to conform his conduct to the law,” if supported by the evidence, establishes the condition that rendered Father unfit, i.e., the condition that rendered the treatment plan unsuccessful.2 ¶24 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). Further, it is presumed that terminating a parent’s rights is in the child’s best interests when the child has been in foster care for 15 of the last 22 months. D.B., ¶ 40 (citing § 41-3-604(1), MCA). The presumption is not a sufficient basis, by itself, to terminate parental rights. D.B., ¶ 40. 2 It is insignificant here that the District Court articulated this finding to follow the language in § 41-3-609(1)(f)(ii), MCA, and not § 41-3-609(1)(f)(i), MCA. The District Court could have satisfied both subsections by finding “the treatment plan was unsuccessful because of Father’s inability to conform his conduct to the law” and then finding “that condition is unlikely to change within a reasonable time.” As long as the condition found to render the parent unfit, i.e., the condition rendering the treatment plan unsuccessful, is clearly articulated in a district court’s findings, as here, the particular formulation of the finding will generally not matter. Section 1-3-219, MCA (“The law respects form less than substance.”). 10 ¶25 Although it appears Father had completed several tasks of his plan, the uncontroverted evidence establishes that Father had acted out while incarcerated, including flooding his cell, breaking a sprinkler head, disruptive behavior, and refusing to follow orders. While the District Court did not enter findings regarding Father’s conduct while incarcerated, the evidence was uncontested, admitted by Father, and was necessarily implied by the District Court’s finding that Father was unable to conform his conduct to the law. See In re S.M., 2014 MT 309, ¶ 28, 377 Mont. 133, 339 P.3d 23 (“[U]nder the doctrine of implied findings, we may consult hearing transcripts in addition to the written findings. This doctrine holds that where ‘findings are general in terms, any findings not specifically made, but necessary to the determination, are deemed to have been implied, if supported by the evidence.’”) (citation omitted). Father argues that his treatment plan required only that he refrain from committing further criminal offenses, and that the State has never charged him or proven the elements of a crime arising out of these incidents. However, while he was not criminally charged, Father’s admitted property destruction could well have supported a charge. The larger point is that Father was clearly not conforming his conduct to the legal requirements of his incarceration, and therefore not achieving the “long-term change and . . . lasting stability” required by the treatment plan for him to parent a child. ¶26 This evidence represents more than a “mere scintilla” in support of the District Court’s conclusion that Father had an inability to conform his conduct to the law, rendering the treatment plan unsuccessful. Given the presumption that termination was 11 in J.B.’s best interests, D.B., ¶ 40, and that a treatment plan may be found unsuccessful “even if the parent has completed all the required tasks,” D.F., ¶ 36, we cannot conclude the District Court’s finding that the treatment plan was unsuccessful was clear error. The termination of Father’s parental rights was therefore not an abuse of discretion. ¶27 Affirmed. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ JAMES JEREMIAH SHEA /S/ MICHAEL E WHEAT Justice Laurie McKinnon, concurring. ¶28 I agree with the Court that the District Court’s termination of Father’s parental rights to J.B. pursuant to § 41-3-609(1)(f), MCA, was not an abuse of discretion; that there was substantial evidence in the record supporting the court’s findings; and that the court correctly applied the law. The evidence establishes that, although not required given the provisions of § 41-3-609(4)(c), MCA, an appropriate treatment plan was approved by the court, but was not successful because Father remained unfit and unable to provide J.B. with parental care. I would affirm the District Court, however, on the alternative basis that Father had his rights to J.B.’s sibling, E.B., involuntarily terminated and that the circumstances relating to the prior termination were relevant to his ability to adequately care for J.B. 12 ¶29 The applicable criteria for termination of Father’s rights are set forth in § 41-3-609(1)(a-f), MCA.1 The State relied upon two of the criteria in its petition seeking termination: subsection (1)(f)—that J.B. was adjudicated a Youth in Need of Care, an appropriate treatment plan was approved, but unsuccessful, and Father’s condition was not likely to change within a reasonable time; and subsection (1)(d)—that Father had subjected a child to the circumstances listed in § 41-3-423(2)(e), MCA, in that Father had his “parental rights to [E.B.] involuntarily terminated and the circumstances related to the termination of parental rights are relevant to Father’s ability to adequately care for [J.B.].” We have explained that “[a] prior termination, followed by a parent’s demonstration of continuing unfitness, indicates that decisive termination of parental rights is the best way to protect a child’s welfare.” In re J.W., 2013 MT 201, ¶ 39, 371 Mont. 98, 307 P.3d 274 (internal quotation and citation omitted); In re T.S.B., 2008 MT 23, ¶ 48, 341 Mont. 204, 177 P.3d 429 (citation omitted) (“circumstances of a prior termination continue to be relevant in a later termination of a sibling under §§ 41-3-609(1)(d) and 41-3-423(2)(e), MCA, unless the circumstances have changed”); In re A.H.D., 2008 MT 57, ¶ 21, 341 Mont. 494, 178 P.3d 131; In re A.P., 2007 MT 297, ¶ 30, 340 Mont. 39, 172 P.3d 105. 1 I believe this Court incorrectly stated in A.T., that “[the Department] could have requested termination of father’s parental rights pursuant to § 41-3-609(4)(c), MCA.” A.T., ¶ 23. The criteria for termination are set forth in subsection (1) of § 41-3-609, MCA, and not subsection (4)(c). Section 41-3-609(4)(c), MCA, addresses whether a treatment plan is required in evaluating criteria pursuant to (1)(f), and does, not by itself, establish a basis for termination. 13 ¶30 In Father’s prior termination for abandoning E.B., Father chose not to participate in the legal proceedings and, as here, was unwilling to put the needs of E.B. ahead of his own interests. As here, Father was unavailable to parent E.B. because of criminal activity, including periods of incarceration, and demonstrated a lack of initiative or interest in parenting E.B. Father ignored efforts by the Department to establish visits and contact with E.B. and ignored court orders to appear at the prior termination proceeding, just as he has ignored court orders relevant to these proceedings. In the instant proceedings, Father testified he has five children, ages ten and younger—one of whom is deceased and one of whom his rights have been terminated. Father’s parenting with respect to two of his other children has been limited to occasionally “writing letters,” a few visits in between periods of incarceration, and phone calls. However, those communications are not recent because Father is uncertain about where those children, C. and X., live because he has “lost contact” with their respective moms. Father has failed to adequately provide for his children by remaining unemployed or incarcerated and demonstrates inadequate initiative to provide parental care for his children. ¶31 The District Court listened to this testimony and took judicial notice of two sentences for which Father would remain incarcerated for several years. Father, with respect to all of his children, has never parented and demonstrates a clear propensity to engage in criminal behavior knowing the consequences of incarceration will remove him from his children’s lives. The District Court’s finding that the circumstances leading to the prior termination of Father’s rights to E.B. remained relevant is supported by 14 substantial evidence in the record which establishes Father has refused to take the initiative to parent any of his children. Father’s termination of E.B. was a result of his demonstrated lack of interest and inability to make himself available to E.B. and is probative of Father’s conduct in the instant proceedings—Father has similarly chosen to be absent from J.B.’s life and remains unavailable to parent. ¶32 The guiding principle in determining whether to terminate parental rights is always the best interests of the child and the district court is bound to give primary consideration to the physical, mental, and emotional conditions and needs of the child—which take precedence over parental rights. Section 41-3-609(3), MCA; In re K.J.B., 2007 MT 216, ¶ 29, 339 Mont. 28, 168 P.3d 629. Here, there was substantial evidence to support the District Court’s findings that the circumstances surrounding Father’s prior termination remained relevant to his inability to parent J.B. Indeed, I believe Father’s lack of initiative to make the necessary changes in his life to adequately parent was exhibited in both termination proceedings. The termination criteria set forth in §§ 41-3-609(1)(d) and -423(2)(e), MCA, and relied upon by the District Court, is supported by substantial evidence. /S/ LAURIE McKINNON Justice Beth Baker, dissenting. ¶33 I would reverse the termination of Father’s parental rights on the record before the Court. The Department’s termination request focused on Father’s failure to comply with 15 his treatment plan pursuant to § 41-3-609(1)(f), MCA, and the Department failed to meet its burden of proof under that statute. ¶34 I do not take issue with the Court’s analysis of the law. In particular, I agree that whether the treatment plan was appropriate is not properly before us in this appeal and that, under our precedent, the District Court could not conclude that Father’s treatment plan was unsuccessful by virtue of his incarceration status alone, when that status “was known and considered by the Department when formulating the plan.” Opinion, ¶ 20. ¶35 “The Department has the burden of proving by clear and convincing evidence that the statutory criteria for termination have been satisfied.” In re K.L., 2014 MT 28, ¶ 14, 373 Mont. 421, 318 P.3d 691. As the Court observes, the Department sought termination primarily under § 41-3-609(1)(f), MCA. The District Court’s single finding addressing § 41-3-609(1)(f)(i), MCA, stated that “Father did not successfully complete his treatment plan because he has been incarcerated since the inception of this case and was not released from his incarceration so that he could parent [J.B.], Jr.” But Father’s treatment plan did not require that he be released from incarceration. The Phase I plan contemplated that Father would remain incarcerated throughout that Plan’s duration. ¶36 The Department offered no evidence at the termination hearing that Father had not complied with the tasks set forth in the treatment plan. Child Protection Specialist Amanda Graziano was the State’s only witness who testified regarding Father’s compliance with his treatment plan. Graziano testified extensively about Mother’s failure to complete her treatment plan, including Mother’s chemical dependency issues, 16 substance abuse, use of illicit drugs, and inability to obtain adequate housing for herself. In contrast, when asked whether Father had met the goals and addressed the Department’s concerns through his treatment plan, Graziano’s only explanation was that Father “was not able to follow through” because he had been incarcerated “for the duration of the case.” On cross-examination, Graziano admitted that Father had been present at all hearings throughout the case and that the Department had been made aware of Father’s status with the Department of Corrections (DOC) throughout the proceedings. ¶37 Father testified that during his incarceration he had completed one group therapy program and was in the process of completing two other group therapy programs. He also testified that he had not had any disciplinary issues while incarcerated with the DOC. Father explained that he was signed up to go to Connections Corrections and believed that after completing that program he would be able to be a better parent for his son. Father stated that when he gets to pre-release he intends to take parenting classes and participate in outpatient counseling programs. ¶38 Although Father acknowledged in his testimony that he had acted out during his detention at the Missoula Assessment and Sanctions Center (MASC) while awaiting DOC placement, he had since been admitted to the Sanction Treatment Assessment Revocation and Transition (START) program and was in full compliance with all conditions of his confinement. His case manager, Patrick McGee, testified that Father had been “very compliant” and “positive” during his time at START and that Father had completed “whatever is necessary,” including participating in mental health and chemical 17 dependency counseling. McGee also testified that Father was administratively transferred out of the boot camp program because it “was not a good fit for him,” and that Father had not had any disciplinary problems during his incarceration with the DOC. The Department offered no evidence that Father had any disciplinary infractions throughout his incarceration—including the incidents that Father acknowledged—and the District Court did not premise its decision on Father’s “disruptive behavior” while at MASC. ¶39 The Department also presented no evidence that Father’s incarceration was expected to be long-term. There are many parents who serve time in prison without losing all rights to their children. Further, although the Department presented evidence regarding the prior termination of Father’s rights to another child, it did not seek to forego the requirements of a treatment plan by filing its petition under § 41-3-609(4)(a) or (c), MCA. See A.T., ¶ 24. The Court does not rely on the prior termination or long-term incarceration in affirming the District Court. Rather, the Court essentially concludes that Father’s rights as a parent may be terminated because—despite the lack of any affirmative evidence from the Department—he acknowledged acting out while at the detention center and failing to follow an order. Opinion, ¶ 25. That is an awfully thin reed, and one the District Court did not even mention in its findings of fact. Rather, as noted, the court relied exclusively on Father’s incarceration to determine that he had not complied with his treatment plan. The Department well may have adequate grounds for termination in this case, particularly given Father’s history and the prior termination of 18 his parental rights to another child. It is perhaps the unlikelihood of Father’s ultimate success that influences the Court’s decision today. But the requirements of the law must be met, and the ruling has implications beyond this case. Having invoked § 41-3-609(1)(f), MCA, and given Father a treatment plan, the Department is bound to prove the elements of that statute before asking the court to terminate his rights. I would conclude that the Department failed to meet its burden. /S/ BETH BAKER

March 22, 2016

69b5095d-1ed6-4d31-baec-a60569193050

Missoula v. Tye

2016 MT 153

DA 15-0564

Montana

Montana Supreme Court

DA 15-0564 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 153 CITY OF MISSOULA, Plaintiff and Appellee, v. BRIEANA MARIE TYE, Defendant and Appellant. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DC-15-152 Honorable Robert L. Deschamps, III, Presiding Judge COUNSEL OF RECORD: For Appellant: Brett D. Schandelson, Sarah M. Lockwood, Tipp & Buley, P.C., Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy K Plubell, Assistant Attorney General, Helena, Montana Andrew F. Scott, Chief Prosecuting Attorney, Missoula, Montana Submitted on Briefs: May 18, 2016 Decided: June 21, 2016 Filed: __________________________________________ Clerk 06/21/2016 Case Number: DA 15-0564 2 Justice James Jeremiah Shea delivered the Opinion of the Court. ¶1 Brieana Tye appeals an opinion and order of the Fourth Judicial District Court, Missoula County, affirming the Missoula Municipal Court’s denial of Tye’s motion to suppress all evidence obtained from Missoula Police Department Officer J.P. Jones’ contact with her that culminated in her arrest for Aggravated Driving Under the Influence (DUI). We address the following issue: Whether the District Court erred in affirming the Municipal Court’s order denying Tye’s motion to suppress. ¶2 We affirm. PROCEDURAL AND FACTUAL BACKGROUND ¶3 At 1:37 a.m. on May 22, 2014, Rami Haddad reported a drunk driver to 911 in Missoula, Montana. Haddad told the 911 dispatcher that he was driving on Hillview Way toward downtown Missoula when a black Acura 2.0 CL with gold badging pulled out in front of him. Haddad reported that the driver unsuccessfully tried to rev her engine and was swerving. He told the dispatcher that he could not provide a physical description of the driver due to the vehicle’s tinted windows or see the vehicle’s license plate. Haddad stated that he would “possibly” be willing to sign a complaint if the vehicle was located. He provided his first and last name and phone number, but declined to provide his home address. At the end of the conversation, Haddad indicated he was willing to be contacted by law enforcement, stating: “No problem calling me.” ¶4 Missoula Police Department Officers Jones and Todd Horton responded to the 911 report. While driving on Hillview Way, Officer Horton passed a vehicle that fit the 3 description given by Haddad. Officer Horton encountered Officer Jones on Hillview Way and pointed out the vehicle. Officer Jones observed it turn eastbound onto 34th Street. He searched the area and found a black Acura 2.0 CL parked in an apartment complex parking lot at 3735 Stephens Avenue. Tye was standing near the vehicle. Officer Jones approached her on foot and conversed with her.1 Based on his observations that she was swaying, had watery eyes and slow, slurred speech, and smelled of alcohol, Officer Jones determined Tye was intoxicated. Tye admitted she had several drinks before driving down Hillview Way, and Officer Jones arrested her for DUI. ¶5 After arresting Tye, Officer Jones discovered that Haddad lied about his location when he called 911. Haddad informed Officer Jones that he did not observe Tye drive down Hillview Way, but rather called 911 from his residence at 116 Erika Court after Tye drove away from that location intoxicated. Haddad stated that he fabricated the information he provided to 911 because he and Tye were friends, and he did not want her to know he was the complainant. ¶6 Tye appeared in Missoula Municipal Court and pled not guilty to a DUI charge. She then moved to suppress all evidence obtained from Officer Jones’ contact with her, contending that Haddad’s 911 report did not give Officer Jones particularized suspicion to initiate an investigative stop. The Municipal Court held an evidentiary hearing on Tye’s motion. During the hearing, the City of Missoula called as a witness Chris 1 Although the City of Missoula (City) contends it argued below that Officer Jones did not seize Tye when he approached her, the City does not make this argument on appeal, stating: “Since the City chose not to call witnesses to support its argument that Officer Jones did not seize Tye, and there was no stipulation of facts regarding this issue, there is no record upon which the City can now argue this issue on appeal.” 4 Lounsbury, Director of the Office of Emergency Management for the City and County of Missoula, who oversees Missoula’s 911 dispatch center. Lounsbury explained that federal law requires cell phone service providers to collect and provide GPS data to 911 dispatch centers when 911 calls are placed from cell phones. This information is displayed as a set of coordinates, which do not provide a recognizable address. The 911 dispatch center in Missoula has a computer system through which dispatchers can plot the coordinates to retrieve an approximate physical address. Lounsbury explained that this system is only accurate 90% of the time, and the approximate location provided is as large as a football field. Therefore, Lounsbury explained, 911 dispatchers do not regularly use the system and instead rely on the information callers provide because it is more accurate. ¶7 After the hearing, the Municipal Court issued an order denying Tye’s motion to suppress. The Municipal Court concluded that Officer Jones reasonably relied on the information Haddad provided, even though he later learned some of the information was fabricated. Tye then entered a conditional guilty plea, reserving the right to appeal the Municipal Court’s order denying her motion to suppress. Tye appealed the Municipal Court’s order to District Court, which affirmed the Municipal Court’s decision. Tye now appeals the District Court’s opinion and order affirming the Municipal Court’s order denying her motion to suppress. STANDARDS OF REVIEW ¶8 “When reviewing the decision of a municipal court, a district court functions as an intermediate appellate court.” City of Missoula v. Armitage, 2014 MT 274, ¶ 11, 5 376 Mont. 448, 335 P.3d 736. We examine the record independently of the district court’s decision, applying the appropriate standards of review. Armitage, ¶ 11. “We review the grant or denial of a motion to suppress to determine whether the court’s findings of fact are clearly erroneous and whether the court correctly interpreted and applied the law to those facts.” State v. Wagner, 2013 MT 159, ¶ 9, 370 Mont. 381, 303 P.3d 285. A finding of fact is clearly erroneous if it is not supported by substantial evidence, if the lower court misapprehended the effect of the evidence, or if our review of the record leaves us with a firm and definite conviction that the lower court made a mistake. Wagner, ¶ 9. Whether particularized suspicion exists is a question of fact. Wagner, ¶ 9. DISCUSSION ¶9 Whether the District Court erred in affirming the Municipal Court’s order denying Tye’s motion to suppress. ¶10 The Fourth Amendment to the United States Constitution and Article II, Section 11 of the Montana Constitution protect individuals from unreasonable seizures. Therefore, an investigatory stop must be justified by “particularized suspicion.” Section 46-5-401(1), MCA. A law enforcement officer has particularized suspicion to justify a stop if he or she possesses: “(1) objective data from which the officer can make certain reasonable inferences and (2) a resulting suspicion that the person to be stopped has committed, is committing, or is about to commit an offense.” State v. Roy, 2013 MT 51, ¶ 16, 369 Mont. 173, 296 P.3d 1169. In evaluating whether particularized suspicion exists, we consider the totality of the circumstances, including the quantity and quality of 6 the information available to the officer at the time of the stop. City of Missoula v. Moore, 2011 MT 61, ¶ 16, 360 Mont. 22, 251 P.3d 679; State v. Flynn, 2011 MT 48, ¶ 11, 359 Mont. 376, 251 P.3d 143. ¶11 “When an officer’s particularized suspicion is based on a citizen informant’s report, the report must contain some indicia of reliability.” Moore, ¶ 17. In State v. Pratt, 286 Mont. 156, 951 P.2d 37 (1997), we adopted a three-factor test for assessing whether an informant’s report of a suspected DUI is reliable. We consider: (1) whether the informant identifies himself to law enforcement and thus exposes himself to criminal and civil liability if the report is false; (2) whether the report is based on the informant’s personal observations; and (3) whether the officer’s own observations corroborated the informant’s information. Pratt, 286 Mont. at 165, 951 P.2d at 42-43. ¶12 Tye contends that Officer Jones did not have reasonable suspicion to stop her under the Pratt test because: (1) Haddad did not willingly expose himself to criminal liability; (2) objective data indicated that Haddad’s tip was not based on his personal observations; and (3) Officers Jones and Horton did not observe Tye driving erratically and did not observe a vehicle following her. Under the first Pratt factor, “a tip may be considered more reliable if the informant provides his or her name to law enforcement authorities.” Pratt, 286 Mont. at 165, 951 P.2d at 42. Although Haddad did not provide his address to the 911 dispatcher or unequivocally agree to sign a complaint, he identified himself by providing his name and phone number. This information was sufficient for Officer Jones to contact him shortly after Tye’s arrest. 7 ¶13 Tye also contends that Haddad did not “identif[y] himself to law enforcement,” Pratt, 286 Mont. at 165, 951 P.2d at 42, because 911 dispatchers are not law enforcement. This contention is without merit. We consistently have held that an informant exposes himself to criminal and civil liability when he identifies himself to a 911 dispatcher. E.g., State v. Hall, 2004 MT 106, ¶ 15, 321 Mont. 78, 88 P.3d 1273; Pratt, 286 Mont. at 165, 951 P.2d at 43. Haddad exposed himself to potential criminal and civil liability when he identified himself to 911. See § 45-7-205(1)(a), MCA (providing criminal liability for false reports to law enforcement); Pratt, 286 Mont. at 165, 951 P.2d at 42. The District Court correctly applied the law and did not err in determining that Officer Jones’ investigative stop met the first Pratt factor. ¶14 Under the second Pratt factor, an officer may infer that a report is based on a citizen informant’s personal observations “if the report contains sufficient detail that ‘it is apparent that the informant ha[s] not been fabricating [the] report . . . [and] the report [is] of the sort which in common experience may be recognized as having been obtained in a reliable way . . . .” Moore, ¶ 21 (quoting Pratt, 286 Mont. at 165, 951 P.2d at 42-43) (changes in original). “[W]hen a tip has been relayed from dispatch and an officer has acted on that information, it is appropriate to look beyond the stopping or investigating officer to include the information known to the dispatching or reporting officer.” Hall, ¶ 15. However, officers are not required to personally assess the reliability of a citizen informant’s information, Pratt, 286 Mont. at 167, 951 P.2d at 44, and “need not consider every possible innocent explanation or legal exception before concluding that particularized suspicion exists,” Flynn, ¶ 11. 8 ¶15 For example, in Navarette v. California, __ U.S. __, __, 134 S. Ct. 1683, 1687-88 (2014), the U.S. Supreme Court held that information from an anonymous 911 caller— who reported that a truck ran her off the road and gave a detailed physical description of the vehicle—was sufficiently reliable to establish particularized suspicion for an investigative stop. The Court found that the following factors weighed in favor of finding the caller’s information reliable: (1) “the caller necessarily claimed eyewitness knowledge of the alleged dangerous driving” by providing specific information regarding the vehicle and the driver’s actions; (2) the caller’s report was substantially contemporaneous with her alleged observation of criminal activity; and (3) the caller used the 911 system, which “has some features that allow for identifying and tracing callers, and thus provide some safeguards against making false reports with immunity.” Navarette, __ U.S. at __, 134 S. Ct. at 1689. These factors conform with Pratt and its progeny in that they indicate that an informant’s report is based on personal observations. See Moore, ¶ 21; Pratt, 286 Mont. at 165, 951 P.2d at 42-43. ¶16 When Officer Jones initiated the stop, the following objective information was available to both him and the 911 dispatcher: an identified citizen informant called 911 to report that he was driving behind a drunk driver and provided a detailed description of the vehicle, including the direction in which it was travelling and that the driver was female. The detailed information Haddad provided, the contemporaneity of his report with the event he allegedly was observing, and his use of the 911 system all weigh in favor of finding his information reliable. Accordingly, Officer Jones reasonably inferred that Haddad’s report was based on Haddad’s personal observations. See Moore, ¶ 21; see 9 also Navarette, __ U.S. at __, 134 S. Ct. at 1689 (“[An informant’s] explicit and detailed description of alleged wrongdoing, along with a statement that the event was observed firsthand, entitles his tip to greater weight than might otherwise be the case.”) (citing Illinois v. Gates, 462 U.S. 213, 234, 103 S. Ct. 2317, 2330 (1983)) (changes in original). The District Court correctly applied the law and did not err in finding that Haddad’s report met the second Pratt factor. ¶17 Tye contends that, based on language in Navarette describing public policy considerations for providing cellphone GPS data to 911 dispatchers, the dispatcher had a duty to test the reliability of Haddad’s report by plotting the coordinates of Haddad’s cell phone’s location. We disagree. Navarette did not require 911 dispatchers to verify the location of the caller before passing the information along to law enforcement officers even though, as Tye points out, cell phone service providers have been required to instantaneously provide GPS data to identify a 911 caller’s geographic location since at least 2001. See 47 C.F.R. 20.18(e)-(h). Lounsbury explained that 911 dispatchers generally do not plot the GPS coordinates because they lack precision. Moreover, when Officer Jones stopped Tye, there was no indication that Haddad was fabricating the information in his report. Given his detailed description of Tye’s vehicle, Haddad’s statements that he was unable to see the license plate or identify Tye’s specific physical features do not weigh against this conclusion. Therefore, the District Court did not err in determining that the 911 dispatcher was not required to verify Haddad’s location using the GPS coordinates of his cell phone’s location before Officer Jones acted on the information Haddad provided. 10 ¶18 Under the third Pratt factor, “An officer corroborates an informant’s report by observing illegal activity or by finding ‘the person, the vehicle, and the vehicle’s location substantially as described by the informant.’” Moore, ¶ 25 (quoting Pratt, 286 Mont. at 165, 951 P.2d at 43) (emphasis omitted). If the report meets the first two Pratt factors, an officer may corroborate it “by observing wholly innocent behavior.” Moore, ¶ 25. For example, we have held that an officer sufficiently corroborated an informant’s report when the officer visually confirmed such innocent information as the vehicle’s make, model, color, obstructed license plate, location, and the direction in which it was heading. State v. Rutherford, 2009 MT 154, ¶ 18, 350 Mont. 403, 208 P.3d 389. ¶19 Officer Jones observed a vehicle matching the detailed description given by Haddad, travelling in the direction Haddad said it would be driving, in the approximate location Haddad provided, with a female driver. Given that Haddad’s report met the first two Pratt factors, this information—although innocent—was sufficient to corroborate it. That Officers Jones and Horton did not see a vehicle following Tye does not weigh against this finding; there are a number of reasonable explanations for this discrepancy, including that Haddad could have turned off of Hillview Way before the officers arrived on scene. The District Court correctly applied the law and did not err in finding that Haddad’s report met the third Pratt factor. 11 CONCLUSION ¶20 We affirm the District Court’s opinion and order affirming the Municipal Court’s denial of Tye’s motion to suppress. /S/ JAMES JEREMIAH SHEA We Concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ BETH BAKER /S/ MICHAEL E WHEAT

June 21, 2016

c745b2e6-7067-4121-bbad-cfde39146ae4

COOMBS v GAMER SHOE COMPANY

N/A

89-169

Montana

Montana Supreme Court

No. 89-169 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 DAVID COOMBS, Plaintiff and Appellant, -vs- GAMER SHOE COMPANY, A Montana corporation, Defendant and Respondent. APPEAL FROM: District Court of the First Judicial District, In and for the County of Lewis & Clark, The Honorable Henry Loble, Judge presiding. COUNSEL OF RECORD: For Appellant: Ronald F. Waterman; Gough, Shanahan, Johnson and Waterman, Helena, Montana For Respondent: Gary M. Zadick and Mark F. Higgins; Ugrin, Alexander, Zadick & Slovak, Great Falls, Montana Submitted on Briefs: Aug. 3, 1989 - C3 L . . -2 > 2 % Decided: August 25, 1989 - 9 c- I C Filed: - - I -. -, 4 .. I c \I 3 - ' - . - - - I -3 . - c , - - Justice John Conway Harrison delivered the Opinion of the Court. This case originated as a wrongful discharge action in the First Judicial District Court, Lewis and Clark County. Appellant asserted that his termination breached the implied covenant of good faith and fair dealing. The District Court granted respondent Gamer Shoe Company's (Gamers) motion for summary judgment and appellant Coombs appeals that decision. We affirm. Coombs presents essentially one issue for review. Did the District Court err in holding that no genuine issue of material fact existed regarding respondent's claim that Coombs lost his job as part of a legitimate reduction in work force . David Coombs began working for Gamers in 1 9 7 7 at the Carlson's store in Great Falls. Gamers had previously purchased Carlson's. Within a month Coombs was promoted to store manager. He worked as the manager of Carlson's until the fall of 1 9 8 3 when he was promoted to the position of buyer of children's and men's shoes. Another Gamers employee, Roger Howell, transferred to Carlson's from a recently closed Gamers store to fill the position of store manager. As Coombs' buying position was not full time, he continued to work as a floor salesperson when not engaged in his buying duties. Coombs held this position until he left Gamers . In August of 1986, Loren Miles, Coombs' supervisor, informed him that because of poor economic conditions, Gamers might close Carlson's at the end of its lease period in 1 9 8 7 . At that time, Carlson's personnel also suffered a wage reduction. Prior to this, Coombs had written a memo detailing the poor economic conditions facing the Carlson's store. Also, after August of 1986, Coombs and other Gamers' employees shared their concerns about the company's general economic viability. At that time appellant was aware specifically that the future of both the Carlson's store and his position were uncertain. Loren Miles did tell Coombs that Gamers would do what it could to find him a position. However, Gamers did not guarantee, either verbally or in writing, that Coombs would still have a position with Gamers if the Carlson's store closed. In mid-April of 1987, Miles informed Coombs that Gamers had decided to close Carlson's at the end of summer. Coombs' position, along with the two other Carlson's employees, both senior to Coombs in date of hire, would be eliminated. Management would assume Coombs' buying duties. Gamers gave Coombs the opportunity to continue working part-time as a salesperson until the store actually closed. Coombs declined the offer. The store did close and none of the Carlson's employees were retained as Gamers' employees. No one was hired to replace Coornbs as a buyer. Coombs does not contend that Gamers terminated him for cause. He does contend that Gamers should have found a place for him even though he testified that Gamers did not guarantee him a job. Gamers' management testified that Coombs was a loyal and satisfactory employee. Relying on facts from appellant's deposition, the District Court concluded that respondent was entitled to summary judgment. Summary judgment is proper when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. The movant has the burden of showing a complete absence of any genuine issue as to all facts considered material in light of the substantive principles that entitle the movant to a judgment as a matter of law, and all reasonable inferences that may be drawn from the offer of proof are to be drawn in favor of the opposing party. Cereck v. Albertson's, Inc. (1981), 195 Mont. 409, 637 P.2d 509. If the moving party makes the necessary showing, the burden of proof shifts to the party opposing the summary judgment motion to present evidence of a material and substantial nature raising a genuine issue of fact. Mayer Bros. v. Daniel Richard Jewelers, Inc. (1986), 223 Mont. 398, 726 P.2d 815. Appellant argues that the District Court erred because it overlooked issues of material fact raised by the record. Basically, Coombs urges this Court to recognize that two fact questions exist regarding his claim of breach of the implied covenant of good faith and fair dealing. Appellant contends that the record reveals a factual issue on whether Gamers' reason for eliminating Coombs' position was a pretext. Further, Coombs claims that a conflict exists on whether Gamers' actions breached the implied covenant of good faith and fair dealing because those actions led Coornbs to reasonably believe that Gamers would find a job for him. We disagree. Even if the implied covenant of good faith and fair dealing governs the employment relationship, an employer may still terminate an employee as long as the employer gives a fair and honest reason. Hobbs v. Pacific Hide and Fur Depot (Mont. 1989), 771 P.2d 125, 130, 46 St.Rep. 544, 550. The implied covenant of good faith and fair dealing does not prevent an employer from making legitimate reductions in workforce necessary to maintain business viability. Flanigan v. Prudential Savings and Loan (1986), 221 Mont. 419, 426, 720 P.2d 257, 261. Further, an employer "is entitled to be motivated by and serve its own legitimate business interest and must be given discretion in determining who it will employ and retain in employment." Hobbs, 7 7 1 P.2d at 130. In the instant case, it is undisputed that Gamers had for some period of time experienced financial difficulties that necessitated closing several stores including the Great Falls Carlson's store. Although appellant argues that respondent should have made a more particularized proof regarding economic necessity, facts and figures certainly are not required when all parties admit that the business was in trouble and the business actually closed. Coombs knew of the economic difficulties of Gamers in general and of the Great Falls Carlson's store in particular. For some time prior to his termination, he knew that the Carlson's store might close and that his job was in jeopardy. None of the Carlson's store employees from Great Falls were given other positions in the company. Although Gamers did tell Coombs that it would try to find a place for him, Coombs testified that these assurances were not promises and did not guarantee him continuing employment with Gamers. Coombs also concedes that he had no right to continued employment based on seniority. As well, Coombs testified that Gamers did not terminate him for cause. In short, the record establishes that Gamers discharged Coombs for legitimate economic reasons. Therefore, Gamers did not violate the covenant of good faith and fair dealing implied in its employment relationship with Coombs. As appellant points out, the record does disclose some conflict between his deposition testimony and that of Loren Miles regarding Coombs seeking manager positions in other Gamers stores. However, given the equivocal nature of Coombs' testimony on his efforts to transfer out of Great Falls, this conflict does not appear genuine. Even if the conflict raised a genuine issue of fact, the issue is not material to the substantive law in this case. Gamers admittedly did not have any obligation to find Coombs another position within the company, by either express personnel policy or any verbal or written promises of management. Further, this Court recognizes that employers must have discretion in making personnel decisions. Hobbs, 771 P.2d at 130. Thus, absent any evidence of dishonesty or pretext, even if Coombs had been passed over for manager positions, Gamers' actions would be appropriate given an employer's discretion to make personnel decisions it feels are in its best interests. No evidence of pretext exists in the record. Therefore, any issue that does exist on whether Coombs actively sought transfers is not a material issue and thus does not preclude summary judgment. Appellant also argues that Gamers constructively discharged him. The record does not support this theory. We affirm the District Court. We concur: ii

August 25, 1989

60317ab5-9a3c-4994-aa8b-b9d29a2b6a14

State v. Cooksey

2016 MT 75N

DA 15-0198

Montana

Montana Supreme Court

DA 15-0198 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 75N STATE OF MONTANA, Plaintiff and Appellee, v. BOBBY COOKSEY, Defendant and Appellant. APPEAL FROM: District Court of the Fourteenth Judicial District, In and For the County of Musselshell, Cause No. DC 09-13 Honorable Randal I. Spaulding, Presiding Judge COUNSEL OF RECORD: For Appellant: Bobby Cooksey, Self-Represented, Deer Lodge, Montana For Appellee: Timothy C. Fox, Montana Attorney General, C. Mark Fowler, Assistant Attorney General, Helena, Montana Kent Sipe, Musselshell County Attorney, Roundup, Montana Submitted on Briefs: March 2, 2016 Decided: March 29, 2016 Filed: __________________________________________ Clerk March 29 2016 Case Number: DA 15-0198 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 Bobby Cooksey (Cooksey) was convicted of deliberate homicide on September 20, 2010. On January 5, 2011, the District Court imposed Cooksey’s sentence, which included restitution to the victim’s family. Cooksey petitioned to have his firearms and ammunition exempted from the writ of execution, but after a hearing on the matter, the District Court denied his petition on April 28, 2011. We affirmed his conviction on appeal. State v. Cooksey, 2012 MT 226, 366 Mont. 346, 286 P.3d 1174. Cooksey then petitioned the United States Supreme Court for a writ of certiorari, which the Supreme Court denied on April 15, 2013. Cooksey v. Montana, 133 S. Ct. 1836 (2013). That day, April 15, 2013, is the day Cooksey’s conviction became final for purposes of postconviction review. Section 46-21-102(1)(c), MCA (“A conviction becomes final for purposes of this chapter when . . . (c) if review is sought in the United States supreme court, on the date that that court issues its final order in the case.”). ¶3 Cooksey had one year from the day his conviction became final to petition for postconviction relief (PCR). Section 46-21-102(1), MCA (A petition for postconviction relief “may be filed at any time within 1 year of the date that the conviction becomes final.”). On August 13, 2014, more than a year after his conviction became final, 3 Cooksey filed a motion requesting that the District Court vacate its April 28, 2011 Order denying his motion to have his firearms and ammunition exempted from execution. Cooksey’s motion could be construed as a PCR petition because he is attacking the legitimacy of his sentence, § 46-21-101(1), MCA, which included a restitution order but did not specifically list the personal property that would be subject to execution. The District Court concluded that Cooksey’s claims are barred whether they are construed as a PCR petition or not, and denied the motion to vacate. Cooksey appeals the denial of his motion to vacate. ¶4 If Cooksey’s motion to vacate is construed as a PCR petition, see § 46-21-101(1), MCA, his claims are time barred because he did not bring them within a year of the date on which his conviction became final, § 46-21-102(1), MCA. Further, the issues he raises are substantively barred because they could have been but were not raised on direct appeal. Section 46-21-105(2), MCA (“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.”); see e.g. Ellenburg v. Chase, 2004 MT 66, ¶ 19, 320 Mont. 315, 87 P.3d 473. ¶5 If Cooksey’s motion to vacate is construed as something other than a PCR petition, his claims are barred because he did not timely appeal the District Court’s April 28, 2011 Order denying his claimed exemptions. See M. R. Civ. P. 59(e)-(f), 60(b)(1); M. R. App. P. 4(5). Further, in his brief on appeal, Cooksey raises no error made by the District Court and states no basis for reversing the District Court’s decision. His only 4 argument seems to be based on his personal belief that his firearms and ammunition should not have been subject to execution. Because Cooksey has failed to support his appeal with any argument or authority, as he is required to do under Rule 12(1)(g) of the Montana Rules of Appellate Procedure, he has failed to carry his burden of proving error on the part of the District Court. “We have repeatedly held that it is not this Court’s obligation to conduct legal research on behalf of a party or to develop legal analysis that might support a party’s position.” State v. Cybulski, 2009 MT 70, ¶ 13, 349 Mont. 429, 204 P.3d 7. ¶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 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 did not err in concluding that Cooksey’s petition was time barred. ¶7 Affirmed. /S/ PATRICIA COTTER We Concur: /S/ JAMES JEREMIAH SHEA /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ BETH BAKER

March 29, 2016

1afc0e06-e9f6-4273-9fb3-ee3670dfa162

City of Kalispell v. Omyer Athy

2016 MT 63

DA 14-0511

Montana

Montana Supreme Court

DA 14-0511 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 63 CITY OF KALISPELL, Plaintiffs and Appellees, v. TYLER OMYER, CALVIN ATHY and GLORIA FERRARI, Defendants and Appellants. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause Nos. DC-13-326A, 13-263A and 13-264A Honorable Ted O. Lympus, Presiding Judge COUNSEL OF RECORD: For Appellants: Chad Wright, Chief Appellate Defender, Natalie Wicklund, Assistant Appellate Defender; Helena, Montana For Appellees: Timothy C. Fox, Montana Attorney General, Jonathan M. Krauss, Assistant Attorney General; Helena, Montana Charles A. Harball, Kalispell City Attorney, Emily Von Jentzen, Assistant City Attorney; Kalispell, Montana Submitted on Briefs: January 27, 2016 Decided: March 15, 2016 Filed: __________________________________________ Clerk March 15 2016 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Gloria Ferrari, Calvin Athy, and Tyler Omyer (jointly Appellants) were convicted in the City of Kalispell Municipal Court of various traffic violations including driving with a suspended license. They appealed their convictions to the Eleventh Judicial District Court, Flathead County. After the District Court affirmed the convictions, they appealed separately to this Court. While the factual backgrounds differ slightly, the legal issue and analysis are identical; therefore we have consolidated these cases for the purpose of appeal and this Opinion. Attorney Greg Rapkoch represented each of the Appellants in the Municipal and District Courts. Assistant Appellate Defender Natalie Wicklund represented all of the Appellants before this Court. We affirm. ISSUES 1. Did the District Court err in failing to determine whether § 61-5-212, MCA, imposed absolute liability on each of the Appellants? 2. Did the District Court abuse its discretion by holding that the evidentiary “letters of suspension” were admissible as “certified copies of public records” under M. R. Evid. 902(4) (Rule 902(4))? FACTUAL AND PROCEDURAL BACKGROUND Gloria Ferrari ¶2 On June 20, 2010, Gloria Ferrari was cited by Kalispell Police Officer A.J. McDonnell for various traffic violations including driving with a suspended license. The Kalispell Municipal Court conducted a bench trial on May 30, 2013. Ferrari was represented by appointed counsel Rapkoch but was not in attendance. McDonnell presented Ferrari’s “Certified Driver Record” generated by the State of Montana 3 Department of Justice, Motor Vehicle Division (MVD), as well as six letters from MVD to Ferrari informing her that her license was suspended. Counsel objected to the suspension letters as hearsay and in violation of Ferrari’s United States and Montana constitutional rights to confrontation. The Municipal Court admitted the evidence over counsel’s objection. Ferrari was found guilty and sentenced to 180 days in jail with 178 suspended and fined $325.00. She appealed to the District Court. Calvin Athy ¶3 On September 10, 2012, Calvin Athy was cited by Officer Stan Ottosen of the Kalispell Police Department for multiple traffic violations including driving with a suspended license. At the May 30, 2013 Municipal Court bench trial, Athy was represented by Rapkoch but Athy did not attend the trial. Ottosen testified at Athy’s trial and presented Athy’s “Certified Driver Record” as well as three letters from MVD to Athy notifying him that his license was suspended. Counsel objected to the letters on hearsay and Confrontation Clause grounds but the Municipal Court admitted the evidence and found Athy guilty. Athy was sentenced to a 180-day jail sentence with 178 days suspended and fined $325.00. On June 11, 2013, Athy appealed his judgment to the District Court. Tyler Omyer ¶4 On December 8, 2012, Tyler Omyer was cited by Sargent Allen Bardwell of the Kalispell Police Department for multiple traffic violations including driving a motor vehicle with a suspended license. The Kalispell Municipal Court conducted a bench trial on June 27, 2013, at which Omyer was present and represented by Rapkoch. Bardwell 4 presented Omyer’s “Certified Driver Record” as well as six letters sent by MVD to Omyer notifying him that his driver’s license was suspended for reasons stated in the letters. Omyer objected to the admission of the MVD suspension letters on hearsay and Confrontation Clause grounds. The Municipal Court admitted the evidence, convicted Omyer of all offenses, and sentenced him to 180 days in jail with 178 suspended. The court allowed him to serve his time at the community car wash or the animal shelter. Additionally, he was fined $325.00. On July 25, 2013, Omyer appealed to the District Court. ¶5 The three cases were consolidated by the District Court for purposes of appeal. Counsel for the Appellants had not objected to, nor did he appeal, the Municipal Court’s admission of the “Certified Driving Record” for each defendant as each record unequivocally established that the license for each driver was suspended at the time of the traffic stops and of citations to each. Rather, counsel argued that conviction of the offense of driving with a suspended license required the City to prove that each defendant had a culpable mental state, i.e., that they “knew” their licenses were suspended at the time of their offenses. Counsel claimed that the only evidence presented of the Appellants’ knowledge of their suspensions were the MVD suspension letters. Counsel asserted that these letters were inadmissible because they contained “testimonial hearsay” subject to the protections of the Confrontation Clauses of the United States and Montana Constitutions. The certificate of mailing language stamped onto the bottom of each notification letter and challenged by the Appellants read: 5 The undersigned hereby testifies that on the date below, he or she, as an officer or employee of the motor vehicle division, deposited in the United States mail at Helena, Montana, a copy of the paper to which this is affixed, in an envelope with the postage prepaid, addressed to the person named in the paper at his or her last address as shown by the records of the Department. ________________________________________________ Date Officer or Employee of Department Counsel argued that this language constituted testimony and was included in letters that were “prepared in anticipation of use at trial to prove historical facts relevant to prosecution.” Counsel claimed that had the evidence been properly excluded, there would have been no evidence presented at trial establishing a “knowing” culpable mental state and Appellants could not have been convicted under § 61-5-212, MCA. ¶6 The City of Kalispell responded that the MVD letters were properly admitted as self-authenticating business records under § 61-11-102, MCA, and Rule 902(4) of the Montana Rules of Evidence. The City further argued that the challenged letters did not constitute testimonial evidence triggering the Confrontation Clause and were admissible under Rule 803(8), M. R. Evid. Lastly, the City countered that under § 26-1-602(24), MCA, it is presumed that a correctly addressed and mailed letter is received by the intended recipient and none of the Appellants rebutted this presumption at trial. ¶7 The District Court determined that the stamped certificates of mailing included in each suspension letter did not constitute testimonial hearsay; rather, the letters were certified copies of public records and were admissible under Rules 902(4) and 803(8) of the Montana Rules of Evidence. The court also concluded that Appellants had not 6 rebutted the statutory presumption that they had received the suspension letters; therefore, the court presumed receipt. ¶8 Appellants filed timely appeals. STANDARD OF REVIEW ¶9 Section 3-6-110, MCA, governing a district court’s review of a municipal court’s ruling, confines the district court’s review to the record and questions of law. Section 3-6-110(1), MCA. In turn, when this Court reviews the district court, we undertake an independent examination of the record apart from the district court’s decision and will “affirm the district court when it reaches the right result, even if it reaches the right result for the wrong reason.” State v. Gai, 2012 MT 235, ¶ 11, 366 Mont. 408, 288 P.3d 164. Based upon our review of the trial court’s record, we review the trial court’s factual findings under the clearly erroneous standard, its discretionary rulings for an abuse of discretion, and its legal conclusions de novo. State v. Ellison, 2012 MT 50, ¶ 8, 364 Mont. 276, 272 P.3d 646. DISCUSSION ¶10 Each of the Appellants was convicted under § 61-5-212, MCA, which provides, in relevant part: (1)(a) A person commits the offense of driving a motor vehicle without a valid license or without statutory exemption or during a suspension or revocation period if the person drives: (i) a motor vehicle on any public highway of this state at a time when the person’s privilege to drive or apply for and be issued a driver’s license is suspended or revoked in this state or any other state . . . . 7 ¶11 Appellants assert on appeal that the District Court abused its discretion by admitting testimonial hearsay evidence at trial in violation of the Confrontation Clauses of the Montana and the United States Constitutions. They claim that testimonial hearsay is “an out-of-court statement offered for the truth of the matter asserted and where the declarant spoke in a manner as to create evidence.” They explain that in this case “unknown government agents purport to testify in writing that [defendant] should have had notice and knowledge of her [or his] suspended license.” Appellants claim that testimonial hearsay is only permissible if a court determines a declarant is unavailable and the defendant had a prior opportunity for cross-examination. They argue this did not occur. They request that we reverse and remand for new trials with instructions that the trial court reject admission of the suspension letters. ¶12 The State counters that the suspension letters were not testimonial hearsay but were contemporaneous business records created for the administration of the MVD’s operations and not for the purpose of establishing or proving some fact at trial. As such the letters were admissible. Additionally, the State asserts that even if the letters were erroneously admitted, the error was harmless because “driving with a suspended license” is an absolute liability offense that does not require knowledge of the suspension. ¶13 1. Did the District Court err in failing to determine whether § 61-5-212, MCA, imposed absolute liability on each of the Appellants? ¶14 We first address the State’s assertion that § 61-5-212, MCA, establishes that driving with a suspended license is an absolute liability offense which does not require proof of a mental state. Notably, we have not decided previously whether this offense 8 requires proof of a mental state or is an absolute liability offense. To determine whether the legislature intended an offense to be an absolute liability offense we look to the language of the statute and the statute’s apparent purpose. State v. Huebner, 252 Mont. 184, 827 P.2d 1260 (1992). ¶15 In Huebner, we concluded that § 87-3-102, MCA, prohibiting someone from killing a game animal and abandoning the meat, or removing only the parts suitable for trophy mounting, was an absolute liability statute based upon the State’s responsibility for protecting public wildlife resources. Huebner, 252 Mont. at 188, 827 Mont. at 1263. We relied upon § 45-2-104, MCA, which currently provides that “A person may be guilty of an offense without having, as to each element of the offense, one of the mental states of knowingly, negligently, or purposely only if the offense is punishable by a fine not exceeding $500 or the statute defining the offense clearly indicates a legislative purpose to impose absolute liability for the conduct described.” Huebner, 252 Mont. at 188, 827 Mont. at 1263. Applying a previous, but similar, version of § 45-2-104, MCA (1991), the Huebner Court determined that the language of the statute indicated a legislative purpose to impose absolute liability. ¶16 Turning to § 61-5-212, MCA, the statute does not contain any reference to a mental state, such as knowingly or purposely. It is clear based upon the many statutes in which the Legislature requires a specific mental state, for example, §§ 45-5-102, 45-5-201, 45-5-202, and 45-6-204, MCA, that had the Legislature intended to require one for this statute, it would have done so. Additionally, the legislative purpose of the statute is not difficult to discern. The State has a compelling interest in keeping unsafe drivers 9 off the road, especially drivers whose privileges have been suspended for various reasons such as unsafe driving, driving while under the influence of alcohol or drugs, or driving without liability insurance. State v. Pyette, 2007 MT 119, ¶ 27, 337 Mont. 265, 159 0P.3d 232. ¶17 Furthermore, while we note that § 45-2-104, MCA, is written in the disjunctive and requires only that the statutory penalty not exceed $500 or that the statute clearly indicates a legislative purpose to impose absolute liability, in this case both requirements are met in that § 61-5-212(1)(b)(i), MCA, provides with some exceptions, that a person convicted of driving during a period of license suspension may be fined “not more than $500.” For these reasons, we conclude that the statute clearly indicates a legislative purpose to impose absolute liability and that conviction under this statute does not require a culpable mental state. ¶18 The elements of driving while suspended include driving “a motor vehicle on any public highway” when the driver’s “privilege to drive . . . is suspended.” The evidence presented in each of the Appellant’s trials through admission of their Certified Driver Records established that they drove vehicles upon the public roads of this State while their licenses were suspended. As these were the only requirements necessary for conviction under § 61-5-212, MCA, the Municipal Court did not err in convicting the Appellants nor did the District Court err in affirming the Municipal Court. As we indicated above, we will not overturn a district court when it reaches the right result, even if it reaches the right result for a different or a wrong reason. Gai, ¶ 11. 10 ¶19 2. Did the District Court abuse its discretion by holding that the evidentiary “letters of suspension” were admissible as “certified copies of public records” under M. R. Evid. 902(4)? ¶20 We next address the Appellants’ assertion that the letters notifying them of their suspensions contained “testimonial hearsay” and should not have been admitted or used to support their convictions. As indicated above, the District Court affirmed the Municipal Court’s admission of the suspension letters, finding them to be certified copies of public records under Rule 902(4). The court further determined they were not testimonial in nature and were appropriately admitted under the public records hearsay exception set forth in Rule 803. ¶21 Rule 803(8), M. R. Evid. provides: The following are not excluded by the hearsay rule, even though the declarant is available as a witness: . . . (8) Public records and reports. To the extent not otherwise provided in this paragraph, records, reports, statements, or data compilations in any form of a public office or agency setting forth its regularly conducted and regularly recorded activities, or matters observed pursuant to duty imposed by law and as to which there was a duty to report, or factual findings resulting from an investigation made pursuant to authority granted by law. The following are not within this exception to the hearsay rule: (i) investigative reports by police and other law enforcement personnel; (ii) investigative reports prepared by or for a government, a public office, or an agency when offered by it in a case in which it is a party; (iii) factual findings offered by the government in criminal cases; (iv) factual findings resulting from special investigation of a particular complaint, case, or incident; and (v) any matter as to which the sources of information or other circumstances indicate lack of trust worthiness. Rule 902(4), M. R. Evid. provides: Extrinsic evidence of authenticity as a condition precedent to admissibility is not required with respect to the following: . . . 11 (4) Certified copies of public records. A copy of an official record or report or entry therein, or of a document authorized by law to be recorded or filed and actually recorded or filed in a public office, including data compilations in any form, certified as correct by the custodian or other person authorized to make the certification, by certificate complying with paragraph (1), (2), or (3) or complying with any law of the United States or of this state. ¶22 In Billings v. Lindell, 236 Mont. 519, 771 P.2d 134 (1989), we addressed the self-authenticating nature of the MVD’s driving records. We explained that the MVD has the duty to maintain records of license convictions and that it would be unreasonable for a custodian of the department to be present in court each time a record was necessary for a trial. Billings, 236 Mont. at 521, 771 P.2d at 136. We discussed some of the various methods developed by the Legislature through which authenticity is taken as established for purposes of admissibility. Two such methods were Rules 803(8) and 902(4), M. R. Evid. Billings, 236 Mont. at 521-22, 771 P.2d at 136. Based upon the plain language of these rules, the statutorily-mandated purpose of MVD’s record-keeping, and our analysis in Billings, we conclude the District Court did not abuse its discretion in holding that the suspension letters were admissible under Rules 803 and 902(4). ¶23 Lastly, we note that our ruling is consistent with multiple U. S. Supreme Court decisions. That Court distinguishes between testimonial and non-testimonial hearsay, but has repeatedly declined to offer an exhaustive or comprehensive definition of “testimonial.” Crawford v. Washington, 541 U.S. 36, 68, 124 S. Ct. 1354, 1374 (2004). See also Davis v. Washington, 547 U.S. 813, 822, 126 S. Ct. 2266, 2273 (2006). However, in Davis, the U. S. Supreme Court declared that statements are testimonial 12 when their “primary purpose . . . is to establish or prove past events potentially relevant to later criminal prosecution.” Davis, 547 U.S. at 822, 126 S. Ct. at 2273-74. Subsequently, in Melendez-Diaz v. Mass., 557 U.S. 305, 129 S. Ct. 2527 (2009), the Court further elaborated that “[b]usiness and public records are generally admissible absent confrontation not because they qualify under an exception to the hearsay rules, but because—having been created for the administration of an entity’s affairs and not for the purpose of establishing or proving some fact at trial—they are not testimonial.” Melendez-Diaz, 557 U.S. at 324, 129 S. Ct. at 2539-40. ¶24 In the case at bar, as in Melendez-Diaz, the primary purpose of the MVD’s suspension letters is not to provide evidence in future criminal prosecutions but rather to notify drivers of a license suspension and to create a statutorily-mandated database of driver’s license records. It is realistic to presume that the vast majority of suspension letters, and other MVD documentation, exist within the agency’s database and printed copies are never generated for purposes of criminal prosecutions. This analysis supports our conclusion that driver’s records are created for the administration of the MVD’s affairs and not for the purpose of proving a fact at trial. CONCLUSION ¶25 For the foregoing reasons, we conclude the District Court neither erred nor abused its discretion in affirming the Municipal Court’s convictions and judgments of the Appellants. /S/ MICHAEL E WHEAT 13 We Concur: /S/ JAMES JEREMIAH SHEA /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JIM RICE

March 15, 2016

aa17db06-f3e3-4ee7-a8d8-895a102d1442

Volk v. Goeser

2016 MT 61

DA 14-0747

Montana

Montana Supreme Court

DA 14-0747 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 61 PAMELA DEE VOLK, individually and in her capacity as Conservator for RBV, a minor child, Plaintiff and Appellant, v. VALERIE GOESER; ROY DONALD VOLK, DIANE NILSON VOLK and SARAYA ROBERSON, as Co-Personal Representatives of the Estate of Roy Craig Volk, and Does 1 through 10, Defendants and Appellees, v. SARAYA ROBERSON, Defendant and Appellant. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. DDV 13-340 Honorable Kenneth R. Neill, Presiding Judge COUNSEL OF RECORD: For Appellant Pamela Dee Volk: Jason T. Holden, Dana A. Henkel, Faure Holden Attorneys at Law, P.C., Great Falls, Montana For Appellee Valerie Goeser: Roberta Anner-Hughes, Anner-Hughes Law Firm; Billings, Montana For Appellee and Cross-Appellant Saraya Roberson: Gregory J. Hatley, James A. Donahue, Derek J. Oestreicher, Davis, Hatley, Haffeman & Tighe, P.C.; Great Falls, Montana March 8 2016 Case Number: DA 14-0747 2 Submitted on Briefs: October 21, 2015 Decided: March 8, 2016 Filed: __________________________________________ Clerk 3 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Pamela Dee Volk appeals from the Summary Judgment Order of the Montana Eighth Judicial District Court granting summary judgment for Valerie Goeser. The District Court determined that a constructive trust should not be imposed on $2,306,103.13 of Roy Volk’s life insurance proceeds for the benefit of his minor son, RBV, because Valerie Goeser was not unjustly enriched when she received Roy Volk’s life insurance proceeds. We reverse the summary judgment and remand for further proceedings in accordance with this opinion. ISSUE ¶2 Appellant raises one issue on appeal, which we address as follows: ¶3 Whether the District Court erred when it granted summary judgment to Valerie, and denied the imposition of a constructive trust on life insurance proceeds in favor of RBV, a minor child? FACTUAL AND PROCEDURAL BACKGROUND ¶4 Roy Volk was married to Pamela Dee Volk in April 1996. The couple had a son, RBV, in the fall of 2000. On June 25, 2010, Roy filed a Petition for Dissolution of Marriage in the Montana Eighth Judicial District Court. On the same day, as part of the dissolution proceeding, the District Court issued the statutorily-mandated Summons and Temporary Restraining Order. The divorce proceedings lasted over a year and a half, ending with the court’s hearing and dissolution of the marriage on December 21, 2011. ¶5 Roy and Pamela entered into a Marital Settlement Agreement (“MSA”) on December 20, 2011. Several agreements were included as part of the MSA including a “Future Instruments” clause where Roy agreed “[h]usband shall execute a will naming 4 his son as beneficiary of his estate, giving all of his assets to his son.” This clause included Roy’s agreement to leave all of his assets to RBV through a will that would be executed as a “future document.” Attached to the MSA as exhibit A, was a list of assets and liabilities for each party where Roy indicated that “[h]usband’s New York Life insurance policy” (Policy 936) was an asset. The MSA further provided that if either husband or wife failed to disclose an asset, “that finding is presented to be grounds for the Court, without taking into account the equitable division of the marital estate, to award the undisclosed asset to the opposing party . . . .” ¶6 At the time of the divorce, Roy owned two term life insurance policies. The policies are New York Life Policy No. 46689799 (“Policy 799”) with a benefit of $1,500,000; and New York Life Policy No. 76098936 (“Policy 936”) with a benefit of $1,000,000. Policy 799 was not disclosed in the divorce; Pamela was the sole beneficiary, but she was not aware the policy existed. Roy disclosed Policy 936 in the divorce, and Pamela and Volk Sand and Gravel (Roy’s business) were equal beneficiaries (50 percent to each) with a $200,000 collateral assignment to Stockman Bank. On July 15, 2010, while the restraining order was in effect, Roy changed the beneficiary designations on both policies and designated his sister, Valerie Goeser, as the new beneficiary. ¶7 Roy also had a daughter, Saraya Roberson. In June of 2005, Roy and Saraya’s mother, Serena C. Roberson, entered into a Child Support Agreement pertaining to Saraya. That agreement contained a provision requiring Roy, within 30 days of the court’s Order approving the agreement, to purchase a life insurance policy of $100,000 5 naming Saraya as the owner and sole beneficiary. The Child Support Agreement was approved and adopted by the Montana Eighth Judicial District Court on July 28, 2005. Roy never purchased the life insurance policy required by this Agreement, nor did Roy name Saraya as a beneficiary on any life insurance policy. ¶8 On April 30, 2012, just over four months after the divorce was final, Roy died unexpectedly at age 45. Roy did not have a will in place. Because Roy had changed his life insurance beneficiary designations in violation of the restraining order, Valerie received the life insurance proceeds from both policies in the total amount of $2,306,103.13. Valerie was shocked to learn upon Roy’s death that she was the recipient of the two life insurance policies. Valerie invested the proceeds in a home and real property in Newport Beach, California. ¶9 After Roy’s death, Pamela discovered that Valerie received the life insurance proceeds from Policy 936, due to Roy’s change of beneficiary during the divorce. Pamela wrote Valerie to inquire about the policy and notify her of RBV’s equitable claim. Valerie did not respond to the inquiry and Pamela subsequently sent a subpoena duces tecum to New York Life to determine how the policy benefit was dispersed. At that time she discovered the existence of the second life insurance policy, Policy 799, with the $1,500,000 benefit. Pamela also determined through discovery that she was the beneficiary on Policy 799 until Roy changed it to Valerie on July 15, 2010, while the restraining order was in effect. The New York Life records confirmed that both policies were paid to Valerie. 6 ¶10 A probate was opened to settle Roy’s estate. Pamela filed two creditor’s claims in the probate on October 23, 2012. The first claim was on her behalf for payment Roy had agreed upon, and the second was on behalf of RBV for child support and health insurance costs totaling about $77,500. Roy’s estate did not have sufficient funds to pay RBV’s child support claim. On April 29, 2013, Pamela, on behalf of RBV, filed this action against Valerie and Roy Craig Volk’s estate seeking a constructive trust over the insurance policy payouts for the benefit of RBV. The complaint named Saraya, as co-personal representative of Roy’s estate, as a defendant. Pamela also filed two additional actions in April 2013 that are not part of this appeal: an action to reopen the dissolution for award of the policy proceeds due to violation of the restraining order, and another similar action to seek policy proceeds through the probate. While Valerie was notified of Pamela’s equitable claim on RBV’s behalf, she was not served in the dissolution or probate actions. ¶11 Judge Neill of the Montana Eighth Judicial District presided over all three of the actions tied to this case: Roy and Pamela’s dissolution, the probate of Roy’s estate, and here, Pamela’s claims requesting a constructive trust for RBV. The three actions have significant overlap regarding parties, claims, and the equities of the case. This appeal arises out of the District Court’s grant of summary judgment in Valerie’s favor regarding Pamela’s constructive trust claims for RBV. ¶12 Saraya filed a cross-appeal seeking imposition of a constructive trust for her benefit to fulfill the $100,000 liability. Subsequently, and by admission of both parties, Saraya and Pamela entered an agreement (“October Agreement”) under which Pamela 7 would pay Saraya’s claim from RBV’s constructive trust if RBV prevails on his claims against Valerie. District Court Opinion ¶13 By May 2014, both parties moved for summary judgment. On May 16, 2014, Saraya sought leave from the District Court to file an Amended Answer and to assert cross-claims against Valerie. Several additional motions were made in the case, which were held in abeyance while the District Court considered the pending summary judgment motions. The District Court held hearings on both summary judgment motions. The court entered summary judgment in favor of Valerie on October 30, 2014. At that time the court also denied Saraya’s motion for leave to amend. Pamela and RBV timely appealed on November 19, 2014. Saraya timely appealed on December 8, 2014. ¶14 The District Court granted summary judgment to Valerie on all claims. The court concluded that even though Roy had changed the beneficiary designation on both policies while the court’s restraining order was still in effect, the case was different from this Court’s decision in Briese v. Mont. Pub. Employees Ret. Bd., 2012 MT 192, 366 Mont. 148, 285 P.3d 550, because Roy died after the divorce was final and the restraining order was lifted. The District Court reasoned the purpose of the restraining order is to maintain the status quo in regard to the parties’ property so long as the dissolution action is pending—a purpose that terminates once the dissolution action is complete. The court further reasoned that once the restraining order was lifted, Roy would have been free to change the beneficiary at any time. The court found had he not changed the beneficiaries, Pamela still would have been removed as a beneficiary by 8 operation of law under § 72-2-814, MCA. Under this analysis, the court concluded that equity did not require voiding Roy’s changes to the beneficiaries because Roy made no further changes after the dissolution. ¶15 The court rejected Pamela’s argument that because Roy disclosed Policy 936 as an asset in the MSA he considered his insurance policies to be assets and therefore intended RBV to be the beneficiary. The court found, however, that neither the MSA nor the stipulated final parenting plan made any mention of life insurance policies and the MSA only required that Roy create a will and name RBV as the beneficiary of his estate (which Roy failed to do during the four months following the MSA). The court concluded that an insurance policy is a non-probate transfer and would pass outside of any will Roy had executed; thus, Roy’s will would not have affected the insurance policies. Considering the intent of the parties and the language of the MSA, the court then concluded that the term “assets” clearly refers to Roy’s testamentary estate, not specifically including the life insurance policies. ¶16 The District Court also rejected Pamela’s argument that she should be awarded the proceeds of the second, undisclosed policy. The court agreed with Pamela that Roy should have disclosed the policy as an asset in the marital estate. Still, the court did not award the proceeds to Pamela on the basis that the term life policy does not receive any value until the holder’s death. The court reasoned that marital property is valued at the time of the divorce proceedings, and thus the court could not take into account the policy’s $1.5 million proceeds because they materialized only after Roy died, months after the divorce was finalized. Therefore, Roy’s nondisclosure of the second policy, 9 even if a violation of the MSA, had no monetary effect on the value of the marital estate. The court concluded that the parties did not discuss insurance specifically in the MSA so it would be speculative for the court to say what effect the disclosure of the policy might have had on the parties’ negotiations. ¶17 Finally, the District Court rejected Pamela’s contention that Valerie had been unjustly enriched and that a constructive trust must be imposed. Accordingly, the District Court declined to award summary judgment and equitable relief to Pamela. STANDARD OF REVIEW ¶18 We review the grant of summary judgment de novo, using the same M. R. Civ. P. 56 criteria used by the district court. Albert v. City of Billings, 2012 MT 159, ¶ 15, 365 Mont. 454, 282 P.3d 704. Summary judgment is appropriate when the moving party demonstrates both the absence of any genuine issues of material fact and entitlement to judgment as a matter of law. Albert, ¶ 15. Once the moving party has met its burden, the non-moving party must present substantial evidence essential to one or more elements of the case to raise a genuine issue of material fact. Styren Farms, Inc. v. Roos, 2011 MT 299, ¶ 10, 363 Mont. 41, 265 P.3d 1230. We further review a question of law to determine if the district court’s legal conclusions are correct. Palmer v. Bahm, 2006 MT 29, ¶ 11, 331 Mont. 105, 128 P.3d 1031. ¶19 The standard of review governing proceedings in equity is codified at § 3-2-204(5), MCA, which directs the appellate court to review and determine questions of fact as well as questions of law. Gitto v. Gitto, 239 Mont. 47, 50, 778 P.2d 906, 908 (1989). We review a district court’s findings of fact to ascertain whether they are clearly 10 erroneous. Daines v. Knight, 269 Mont. 320, 324, 888 P.2d 904, 906 (1995). A finding is clearly erroneous if it is not supported by substantial evidence, if the trial court misapprehended the effect of the evidence, or if our review of the record convinces us that the district court made a mistake. Kovarik v. Kovarik, 1998 MT 33, ¶ 20, 287 Mont. 350, 954 P.2d 1147. DISCUSSION ¶20 Section 40-4-101, MCA, provides that Montana’s law concerning separation and dissolution of marriage: shall be liberally construed and applied to promote its underlying purposes, which are to: (1) strengthen and preserve the integrity of marriage and safeguard family relationships; (2) promote the amicable settlement of disputes that have arisen between parties to a marriage; (3) mitigate the potential harm to the spouses and their children caused by the process of legal dissolution of marriage; and (4) make reasonable provision for spouse and minor children during and after litigation . . . . Section 40-4-101, MCA (emphases added.) ¶21 In an effort to support these goals and promote a proper and amicable settlement, the District Court entered the statutorily-mandated restraining order in the dissolution proceeding, stating: Petitioner and Respondent are both hereby restrained as follows under the authority of § 40-4-121(3), MCA, 2009: 3. Petitioner and Respondent are hereby restrained from cashing, borrowing against, canceling, transferring, disposing of, or changing the beneficiaries of any insurance or other coverage, including life, health, automobile, and disability coverage held for the benefit of a party or a child of a party for whom support may be ordered. 11 ¶22 This Court previously addressed the issue of changing beneficiaries under a restraining order in our decision in Briese. The dispute in Briese surrounded a retirement benefit beneficiary change made by a Yellowstone County deputy sheriff after a § 40-4-121(3), MCA, restraining order had been issued in conjunction with his petition for dissolution of marriage. While the marital dissolution proceedings were still pending with the restraining order in place, and without consent of his wife or the court, Briese changed his retirement beneficiary designation from his wife Erene, to his two minor children. The change of beneficiary was discovered after Briese died in the line of duty, while the dissolution proceedings were pending. We determined the change of beneficiary was invalid because it was made in violation of the statutorily-mandated restraining order. ¶23 We reasoned that “[t]he purpose of the law requiring a temporary restraining order is clearly to maintain the status quo with respect to all property of the parties.” Briese, ¶ 25. We stated that this policy is in place to “[mitigate] the potential harm to spouses and children caused by the dissolution process itself and ensure that reasonable provision is made for the spouse and children during the litigation.” Briese, ¶ 25. Further, we determined that “[t]he plain language of subsection (b) is quite broad, restraining both parties from unilaterally ‘changing the beneficiaries of any . . . coverage . . . held for the benefit of a party.’” Briese ¶ 25 (quoting § 40-4-121(3)(b), MCA) (emphasis added). In plain terms, the restraining order serves as a protective umbrella over all marital assets while the parties negotiate an MSA or proceed with litigation. If agreement is reached on division of property, the parties’ agreements are incorporated in 12 the MSA, the new contract between the parties. Then, with the MSA in place, the restraining order can be dissolved upon entry of the decree, and the MSA guides any further asset divisions and responsibilities of the parties. ¶24 As we determined in Briese, the remedy for restraining order violations in most cases is a “civil or criminal contempt action against the violator.” Briese, ¶ 38. This remedy was not available in Briese because, similar to this case, the violator was deceased. In Briese, we reviewed the approaches used by other jurisdictions to solve this problem. Of note was our recognition of the Michigan Supreme Court position: It needs no citation that for violation of an injunction, a court, under its general powers, may order a return to the status quo . . . . Transfers of property in violation of an injunction are invalid and may be set aside . . . and subsequent death of the injunction violator does not prevent the court from exercising such power. Briese, ¶ 39 (citing Webb v. Webb, 375 Mich. 624, 134 N.W.2d 673, 674-75 (Mich. 1965)). ¶25 In Briese, we determined that violation of a dissolution proceeding restraining order does not automatically void the beneficiary change. Briese, ¶ 40. Nonetheless, we found that the courts, at a minimum, possess “equitable power to order a return to the status quo when a party violating a temporary restraining order has died.” Briese, ¶ 41. We look to our precedent in Briese and to the statutes as we turn to the facts in this case. Roy’s Improper Change of Beneficiary on Policy 936 ¶26 On appeal, Pamela argues that the District Court erred in this case and abused its discretion when it determined that the violation of the restraining order had no actual effect on the beneficiary change and that the equities were not in favor of a constructive 13 trust for RBV. She further argues that equity requires the proceeds received by Valerie must be placed in a constructive trust for RBV. Pamela also asserts that Roy’s June 25, 2010, violation of the restraining order cannot be excused by the District Court. She further contends that even though Roy changed the beneficiary designation to his sister Valerie, he did not intend his violation to control the ultimate disposition of his life insurance. Instead, she argues that the evidence demonstrates that Pamela and Roy always thought of Roy’s life insurance as an asset and Roy intended to leave it, with all of his assets, to RBV. Pamela implies that Roy simply did not have his affairs in the order he would choose when he unexpectedly died and that if he had the opportunity, he would have set the affairs according to their MSA. ¶27 Valerie defends the District Court’s equitable determination. She argues that because life insurance proceeds pass outside the testamentary estate, the life insurance contract was properly executed. She also contends that the MSA and Final Parenting Plan fail to mention any agreement or intention to name a particular beneficiary. She notes that Roy, during the four months before his death after the divorce, could have changed the beneficiary to any person of his choosing. Instead, he retained Valerie as the beneficiary on Policy 936, which should be considered his final intention. ¶28 Roy purchased Policy 936 on May 16, 2002, with a $665 down payment. The policy originally listed Volk Sand & Gravel as the beneficiary. On August 9, 2002, Roy changed the original beneficiary with fifty-percent to Pamela and with the other fifty-percent to Volk Sand & Gravel. Roy also included a “second beneficiary” of “Estate of Roy C. Volk.” On August 22, 2002, Roy made a collateral assignment on the 14 policy with Stockman Bank, “up to $500,000” which apparently, based upon the record, was valued at approximately $200,000 at the time of his death. During the dissolution, with the statutorily-mandated restraining order in place, Roy changed the beneficiary on this policy to his sister Valerie, as sole beneficiary. ¶29 Roy’s beneficiary change resulted, upon his death, in the payment of this life insurance policy, less the Stockman Bank assignment, to his sister Valerie. If Roy had not changed the policy, his wife Pamela would have remained on the policy throughout the pendency of the divorce. As the District Court pointed out, upon finalizing the dissolution, Pamela would have been removed from the policy by operation of law pursuant to Montana’s Uniform Probate Code, § 72-2-814(2)(a)(i), MCA, which states: (2) Except as to a retirement system established in Title 19 or as provided by the express terms of a governing instrument, a court order, or a contract relating to the division of the marital estate made between the divorced individuals before or after the marriage, divorce, or annulment, the divorce or annulment of a marriage: (a) revokes any revocable: (i) disposition or appointment of property made by a divorced individual to the individual’s former spouse in a governing instrument and any disposition or appointment created by law or in a governing instrument to a relative of the divorced individual’s former spouse; Under the statute “revocable” is defined as: “Revocable,” with respect to a disposition, appointment, provision, or nomination, means one under which the divorced individual, at the time of the divorce or annulment, was alone empowered, by law or under the governing instrument, to cancel the designation in favor of the individual’s former spouse or former spouse’s relative, whether or not the divorced individual was then empowered to designate the divorced individual in place of the individual’s former spouse or in place of the former spouse’s relative and whether or not the divorced individual then had the capacity to exercise the power. 15 Section 72-2-814(1)(f), MCA. The Official Comments to the statute provide further specificity regarding the types of revocable instruments: The revisions expand the section to cover “will substitutes” such as revocable inter-vivos trusts, life-insurance, and retirement-plan beneficiary designations, transfer-on-death accounts, and other revocable dispositions to the former spouse that the divorced individual established before the divorce (or annulment). Tit. 72, Ch. 2, Mont. Code Ann., Annotations, Official Comments at 635 (2012) (see also Thrivent Fin. v. Andronescu, 2013 MT 13, 368 Mont. 256, 300 P.3d 117). ¶30 We determined in Thrivent that this revocation-upon-divorce statute operates at the time the “governing instrument is given effect” and the provision is to be treated as if the “divorced individual’s former spouse (and relatives of the former spouse) disclaimed the revoked provisions[.]” Thrivent, ¶ 8. Or, more simply, when the divorce is final between the parties, any designation (such as a life insurance beneficiary) by the divorced individuals of their former spouse is automatically revoked upon divorce. ¶31 Turning to Roy’s Policy 936, the effect of not removing Pamela as the beneficiary, or retaining the status quo, would have caused her share of the policy proceeds to pass to Roy’s estate under § 72-2-814, MCA. Because Roy had no will, after the proceeds passed to the estate they subsequently would have passed to Roy’s children in the probate by way of the intestacy statutes. Section 72-2-113, MCA. We note that in the MSA, the parties list Policy 936 as an asset. The MSA also indicates Roy’s intent to name RBV as the beneficiary of his estate specifically indicating Roy will leave RBV all of his assets. 16 The status quo prior to Roy’s improper change—had the restraining order not been violated—would have accomplished that end. ¶32 Here, Valerie argues the status quo was unaffected because the restraining order had already been lifted by the time Roy died, so there is no harm. The argument however, overlooks the statute’s purpose to protect the status quo at the time the statutorily-mandated restraining order is entered. It is misdirected, in addition to being speculative, to say that Roy could or would have changed the beneficiary after the dissolution anyway, because the policy of the law is to preserve the status quo, protect the spouse and the children, and to promote an amicable settlement. In addition, the evidence indicated that Roy—not anticipating that he would die within months—did not have his affairs in order. Roy’s disheveled affairs include failures to execute documents required in his parenting actions with both Pamela and his former partner, Serena. Ultimately, it is speculative of Valerie to argue that Roy would have changed the beneficiary to Valerie after the divorce—when it would have been legal to do so— particularly where both of his parenting agreements required him to ensure support for his children and he failed to do so. Roy’s Failure to Disclose Policy 799 and Improper Change of Beneficiary ¶33 Roy purchased Policy 799 on February 14, 2000, with a $924 down payment. Pamela Volk was the sole beneficiary from the inception of this policy until the couple’s dissolution proceeding. During the dissolution, with the statutorily-mandated restraining order in place, Roy changed the beneficiary on this policy to his sister Valerie, as sole 17 beneficiary. Pamela was never aware of the policy and he did not disclose the policy during the dissolution proceeding. ¶34 In its determination regarding Policy 799, the District Court found that Roy failed to disclose the existence of the policy in the MSA, but determined this failure had no effect on the value of the marital estate because, as a term policy, it had no value until Roy died. The parties make numerous arguments regarding Roy’s failure to disclose the policy. Pamela argues the District Court improperly relied on “value” in its equitable determination because she and Roy considered Roy’s life insurance an asset. She argues that Roy violated Paragraph 20 of their MSA by not disclosing the policy, which is grounds for the court to award it to her, and that it should be placed in trust for RBV. Pamela claims that the failure to disclose the policy unfairly affected negotiations in the dissolution. Valerie argues that any failure to disclose property under § 40-4-253, MCA, provides only a presumption that the property can be awarded to the other party. She contends that the District Court properly exercised discretion in declining to re-open and change the settlement. Valerie also argues that the policy was never part of the estate, because the insurance passes outside the estate, and that resolution of the policy is solely a contract issue. ¶35 The District Court concluded that Roy “likely should have disclosed Policy 799 as an asset in the marital estate.” The court noted that the restraining order statute, § 40-4-121, MCA, prohibiting beneficiary changes, bolsters this argument. The District Court found that the failure to disclose analysis is properly raised in a dissolution proceeding; nonetheless, the District Court possesses further authority under the 18 contractual terms of the MSA to determine whether failure to disclose is grounds for award of the property or benefit to the other party. In the Order, the District Court determined that the policy had zero value at the time of the dissolution and, because there was no value in the policy, the court could not determine what impact disclosure might have had on the MSA. The court concluded, under this analysis, that any remedy would only be based on speculation of how proper disclosure may have changed the MSA. ¶36 However, we determine that whether the failure to disclose the policy is material to the settlement agreement is not the dispositive issue regarding Policy 799. The dispositive issue on Policy 799 is the improper change of beneficiary while the § 40-4-121(3), MCA, dissolution restraining order was in place. The point is not whether disclosure of the policy would have affected the parties’ negotiations in the MSA; rather, the point is that had Roy not changed the beneficiary in violation of the restraining order, the status quo on the policy would have allowed the benefit to be passed to the existing beneficiary, Pamela, or—by operation of law—into Roy’s estate under the same analysis as we have made in Policy 936. ¶37 When Roy purchased these policies, and any time thereafter until he filed the dissolution, he was free to designate the beneficiary as he chose. When Roy filed the dissolution and the statutorily-mandated restraining order applied, Roy was no longer free to make those changes without the consent of the court and Pamela. Under § 40-4-121(3)(b), MCA, Roy was prohibited from changing his life insurance beneficiary during the marriage dissolution proceedings. When we made similar findings in Briese, we invalidated Briese’s change of designation from his wife to his children, even though 19 it did not affect the value or how the benefits were distributed, because § 40-4-121(3)(b), MCA, “does not include any exceptions for changes to beneficiaries from spouse to protected child or vice versa.” Briese, ¶ 31. The statute operates the same in this case and there are clearly no exceptions in the statute allowing for a change of beneficiary from wife to sister or vice versa, or otherwise. ¶38 In Briese, we determined that the courts possess “equitable power to order a return to the status quo when a party violating a temporary restraining order has died.” Briese, ¶ 41. There is no dispute that Roy’s changes of beneficiary were made while the statutorily-mandated restraining order was in place. Because Roy made improper changes to Policy 936 and Policy 799, those changes, in violation of the statute, are invalid and must be set aside. We conclude, as we did in Briese, that the District Court improperly interpreted the law regarding Roy’s improper change of beneficiary. The statute supports a conclusion that transfers of property in violation of an injunction, like that in Briese and in this case, are invalid and should be set aside. Death of the restraining order violator does not prevent this Court from exercising that power. Accordingly, we conclude that Roy’s improper changes to his beneficiary designations must be set aside and the designations returned to the status quo, as they were prior to the dissolution, in order to promote both the fairness and equity the statute is intended to provide and the agreements that Roy made to support his children. Unjust Enrichment and Constructive Trust ¶39 Returning the parties to the status quo in this case would require return of the life insurance proceeds to the estate, a task that is complicated because the funds have been 20 dispersed and invested in real property. Because Valerie received the proceeds under the express terms of the policies, the question arises whether she was unjustly enriched. If so, fashioning a remedy or return to the status quo by setting the judgment aside requires further action by the District Court. ¶40 Pamela brings her claim in this case, on behalf of RBV, under the theory of an alleged constructive trust. She argues that Valerie was unjustly enriched when she received the benefit of Roy’s insurance policies, a result of the improper beneficiary changes. Pamela argues that the District Court erred in this case and abused its discretion when it determined that the restraining order violation had no actual effect on the beneficiary change and that the equities were not in favor of a constructive trust for RBV. Pamela argues that Roy’s June 25, 2010 violation of the restraining order cannot be affirmed and excused by the District Court. ¶41 Valerie argues that the elements of unjust enrichment were not met and a constructive trust is improper in this case. Valerie contends that the violation of the restraining order is not relevant because after the dissolution, Roy could have changed the beneficiary to any person of his choice. Valerie also argues that the written agreements in the underlying divorce action, and life insurance contracts, control all of the issues in this case and that therefore, there is no equitable remedy because the issues are settled by contracts, where equity cannot apply. ¶42 In its Order, the District Court analyzed the three elements of unjust enrichment and sought to balance the equities. The District Court correctly concluded that the first two elements of unjust enrichment are met according to the facts of the case. First, a 21 benefit was conferred on Valerie by her brother Roy when she received the life insurance proceeds as a result of the improper designation. Second, the facts demonstrate that Valerie, as the conferee, appreciated and possessed knowledge of the conferred benefit as she acknowledged receipt of both policies, and she acknowledged she used the money from her brother to set up a trust, TVG trust, to hold the funds and invest in real estate, specifically, the house where she resides. The central dispute in this case surrounds the third element, where the district court was required to weigh the facts and evidence to determine whether the retention of the benefit Valerie incurred created an inequitable and unjust result. ¶43 In addressing this third element, the District Court weighed three separate arguments, and concluded: 1) Equity does not require voiding the beneficiary changes made by Roy in violation of the restraining order; 2) Roy’s failure to execute a will and properly execute his part of the MSA does not support a finding that Valerie was unjustly enriched; and 3) the “October Agreement” between Pamela and Saraya had no bearing on Valerie’s receipt of the insurance proceeds and does not bind Valerie to an unjust enrichment finding nor a constructive trust. After weighing the equities of these issues, the District Court refused to impose a constructive trust on the insurance proceeds. ¶44 This Court previously considered the law of unjust enrichment in the context of a constructive trust in N. Cheyenne Tribe v. Roman Catholic Church, 2013 MT 24, 368 Mont. 330, 296 P.3d 450. There, we concluded a constructive trust, “serves as a possible remedy to rectify the unjust enrichment of a party.” N. Cheyenne Tribe, ¶ 39. 22 ¶45 A constructive trust serves as a proper remedy to unjust enrichment. “A constructive trust arises when a person holding title to property is subject to an equitable duty to convey it to another on the ground that the person holding title would be unjustly enriched if he were permitted to retain it.” Section 72-38-123, MCA; (see also N. Cheyenne Tribe, ¶ 30, (citing In re Estate of McDermott, 2002 MT 164, ¶ 25, 310 Mont. 435, 51 P.3d 486)) (see generally 1 Dan B. Dobbs, Dobbs Law of Remedies: Damages-Equity-Restitution § 4.3(1), 587, § 4.3(2) (Pract. Treatise Series, 2d ed., West 1993)) [hereinafter Law of Remedies]. This Court has broad discretion afforded by the principles of equity to impose a constructive trust despite lack of any wrongdoing by the person holding the property. N. Cheyenne Tribe, ¶ 29, (citing McDermott, ¶¶ 25-26). The Court may simply declare a constructive trust to exist, “[n]othing else is required.” N. Cheyenne Tribe, ¶ 32 (citing Eckart v. Hubbard, 184 Mont. 320, 325, 602 P.2d 988, 991 (1979)). A claim for unjust enrichment, in the context of a constructive trust, requires proof of three elements: (1) a benefit conferred upon a defendant by another; (2) an appreciation or knowledge of the benefit by the defendant; and (3) the acceptance or retention of the benefit by the defendant under such circumstances that would make it inequitable for the defendant to retain the benefit without payment of its value. N. Cheyenne Tribe, ¶ 39. Unjust Enrichment ¶46 Here, Roy’s actions set in motion the series of events changing the status quo in regard to his life insurance and the ultimate receipt of the benefit by his sister Valerie. Because this benefit went to Valerie, we apply the unjust enrichment factors to determine 23 whether she was unjustly enriched. It is clear from the facts of the case that the first two elements of the test have been met: 1) a benefit has clearly been conferred upon Valerie through Roy’s improper insurance beneficiary change; and 2) Valerie has knowledge of the benefit, acknowledging receipt of the funds and investing them in a home and real property. ¶47 The third element of unjust enrichment and the circumstances created by Roy’s actions during and after the dissolution proceeding require further analysis. Thus, we consider whether Valerie’s acceptance and retention of the benefit from Roy, under these circumstances, makes it inequitable for Valerie to retain the benefit without payment of its value. The “circumstances” in this case are a result of Roy’s improper change of the beneficiary while the statutorily-mandated restraining order was in place. The final result of the circumstances is that Roy’s estate is unable to pay claims to his children or provide for their future as was intended and promised under the MSA and the parenting agreement providing for Saraya. If Roy had not made this improper change, the circumstances would be much different. Pamela would have been removed as the beneficiary upon the dissolution of their marriage, and the life insurance proceeds, under § 72-2-814, MCA, would have diverted into the estate upon Roy’s death, where it would have been distributed to Roy’s children under the intestacy statutes. ¶48 While we did not consider unjust enrichment in the Briese case, we did conclude that the remedy for the improper beneficiary designation was to set aside the change. In Briese, even when the effect of changing the benefit did not alter the final beneficiary upon whom the benefit was bestowed, we set the change aside because violation of the 24 statute invalidated Briese’s change. Here, similarly, the violation requires the Court to set aside the improper change and restore the status quo. Because the improper change must be set aside, we view the subsequent circumstances created by the change— Valerie’s receipt of the insurance proceeds—to be similarly improper because the benefits went to Valerie as a result of Roy’s mistakes. Accordingly, we conclude that the third element of unjust enrichment has been met because Valerie is holding the life insurance proceeds, which she received as a result of Roy’s improper change, “under such circumstances that in equity and good conscience [s]he ought not to retain it.” N. Cheyenne Tribe, ¶ 33. Constructive Trust ¶49 Because we conclude that Pamela, on RBV’s behalf, has established a claim showing that Valerie was unjustly enriched, we now consider the ramifications of the imposition of a constructive trust as a remedy for the unjust enrichment. “A party’s proof of unjust enrichment entitles it to restitution from the other party—regardless of any wrongdoing on the part of the unjustly enriched party.” N. Cheyenne Tribe, ¶ 37 (citing Lawrence v. Clepper, 263 Mont. 45, 53, 865 P.2d 1150, 1156 (1993)). As we stated in N. Cheyenne Tribe, “[u]njust enrichment serves as a unifying principle for a wide variety of equitable claims and . . . a court may order restitution to vindicate these types of equitable claims.” N. Cheyenne Tribe, ¶ 38, (citing Dobbs, Law of Remedies § 4.1(3), 564). The Court measures restitution for unjust enrichment “by the defendant’s gain.” N. Cheyenne Tribe, ¶ 38, (citing Dobbs, Law of Remedies § 4.1(1), 555). In the context of a constructive trust the plaintiff does not need to show deprivation of something to 25 recover, “it is sufficient that the defendant gained something that it should not be allowed to retain.” N. Cheyenne Tribe, ¶ 38 (citing McDermott, ¶¶ 25-26). ¶50 “A constructive trust arises when a person holding title to property is subject to an equitable duty to convey it to another on the ground that the person holding title would be unjustly enriched if he were permitted to retain it.” N. Cheyenne Tribe, ¶ 30 (citing McDermott, ¶ 25 (quoting § 72-33-219, MCA)). In this instance, the elements of unjust enrichment have been met and we conclude that Valerie has been unjustly enriched. In turn, in order to work an equitable result, we find that though Valerie has done nothing wrong, she is holding title to property and subject to an equitable duty to convey it, or a portion thereof, to another on the ground that she would be unjustly enriched if she were permitted to retain it. N. Cheyenne Tribe, ¶ 30. Accordingly, we determine that imposing a constructive trust on the proceeds of Roy’s two life insurance policies, Policy 799 and Policy 936, in favor of RBV is the proper remedy in this case. ¶51 As we noted, a significant issue emerges from this determination because Valerie has accepted the life insurance proceeds and spent or invested them on real property. This is not a case where the asset or money is being held in trust while a determination is made. We recently reviewed a similar circumstance in LeMond v. Yellowstone Dev., LLC, 2014 MT 181A, 375 Mont. 402, 336 P.3d 345, a case in which we imposed a constructive trust in LeMond’s favor because he lost title to lands promised to him in business dealings with Yellowstone Development. ¶52 In LeMond, LeMond entered an agreement to trade his work promoting sales for Yellowstone Development for a particular land parcel owned by Yellowstone 26 Development. Prior to completing the agreement, Yellowstone Development traded the promised parcel to a third party and it was unavailable to LeMond when he completed his part of the contract. LeMond asked for the traded parcels to replace the conveyed parcels as part of a constructive trust, and the District Court agreed. We concluded that, because the traded parcels had more acreage and likely a higher value, the District Court had to determine the extent of the remedy. LeMond was granted a constructive trust under an implied contract legal theory, unlike the unjust enrichment theory in this case. Nonetheless, the resulting constructive trusts are similar because LeMond, like RBV, did not have direct access to the property subject to the constructive trust; in other words, the property was not set aside awaiting the Court’s determination. In LeMond, we remanded to the District Court for a determination of value regarding other lands owned by Yellowstone Development to replace the lost parcels. There, as here, the District Court needed to determine the proper amount of the constructive trust to make a determination “if, in equity and conscience, it belongs to [the plaintiff].” LeMond, ¶ 51 (citation omitted). We explained that the “equity of the transaction must shape the measure of relief.” LeMond, ¶ 52 (citation omitted). ¶53 A court sitting in equity is empowered to determine all questions involved in the case, and to fashion an equitable result that will accomplish complete justice. Blaine Bank of Montana v. Haugen, 260 Mont. 29, 35, 858 P.2d 14, 18 (1993); Kauffman-Harmon v. Kauffman, 2001 MT 238, ¶ 11, 307 Mont. 45, 36 P.3d 408. As in LeMond, the measure of relief must be shaped by the circumstances of the affected parties and the equity of the transaction. We conclude it is necessary to remand this 27 matter to the District Court so that, acting in equity, it may fashion a result that will accomplish justice in light of the present circumstances of all affected parties. Among other matters, because we are directing that Roy’s changes of beneficiary designations be set aside and the designations returned to the previous status quo, the court must take account of any claim that may be asserted by Volk Sand & Gravel as co-beneficiary under Policy 936. The court may in addition consider any other factors it deems pertinent to its obligation to work an equitable result, and will be free to direct the nature and course of further proceedings on remand. Saraya Roberson and the “October Agreement” ¶54 Because we have determined that a constructive trust must be imposed on Roy’s insurance proceeds we conclude that we do not need to reach the arguments made on cross-appeal by Saraya Roberson. Pamela agreed on RBV’s behalf in her Amended Complaint of June 11, 2013, to pay Saraya’s creditor’s claim against Roy’s estate if a constructive trust was created in favor of RBV. Thus, we determine that this issue is moot as it is properly resolved under the parties’ agreement. CONCLUSION ¶55 We conclude that Valerie Goeser has been unjustly enriched because she has received a benefit that rightfully belongs to another. We make this determination in equity and conclude that Roy Volk’s errors in changing the beneficiary of his life insurance under the statutorily-mandated restraining order invalidates his designations on Policy 799 and Policy 936. We hold that a constructive trust was created on RBV’s behalf as a result of these errors, and that Valerie Goeser must return the insurance 28 proceeds or that portion of the proceeds by which she “would be unjustly enriched if [she] were permitted to retain [them].” Section 72-38-123, MCA. ¶56 Reversed and remanded for further proceedings consistent with this Opinion. /S/ MICHAEL E WHEAT We Concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ BETH BAKER Justice Jim Rice, concurring. ¶57 I concur with the Court’s decision to reverse and remand for further proceedings. I would add the observation that the Court has not ordered that all of the contested life insurance proceeds must necessarily be placed in trust for RBV. Rather, on remand, the District Court will need to design equitable relief based upon all of the circumstances of the affected parties. These factors could include the funds currently held for RBV’s benefit; the reasonable future needs of RBV; the fact that, by agreement, Saraya’s creditor’s claim would be paid from the proceeds of the constructive trust; Valerie’s financial situation, including any indebtedness she incurred or other disadvantage she assumed by virtue of receiving the insurance proceeds, and the costs of the disgorgement process; any claim asserted by Volk Sand & Gravel as co-beneficiary under Policy 936 as a result of our decision setting aside Roy’s final changes of beneficiary designations; and 29 any other factor that the District Court would deem appropriate to consider in working an equitable result in this matter. /S/ JIM RICE Justice Beth Baker joins in the concurring Opinion of Justice Rice. /S/ BETH BAKER Justice James Jeremiah Shea, concurring. ¶58 I concur with the Court’s analysis in this case and its ultimate conclusion that Valerie was unjustly enriched and a constructive trust should be imposed. I submit, however, that although the District Court should properly be afforded the discretion to fashion an equitable resolution of this issue on remand, we can provide more precise guidance as to what the equitable objective should be. ¶59 There is no dispute that Roy violated the District Court’s restraining order when he changed the beneficiary of both life insurance policies to name Valerie as the sole beneficiary. There is likewise no dispute that Valerie was not otherwise entitled to any of the life insurance proceeds and, but for Roy’s violation of the restraining order, she would not have received any of the proceeds. We also know the precise amount, down to the penny, of the money that Valerie received and to which she was not entitled: $2,306,103.13. So when we conclude “that Valerie Goeser must return the insurance proceeds or that portion of the proceeds by which she ‘would be unjustly enriched if she 30 were permitted to retain [them],’” Opinion, ¶ 55, I have to ask: What do we mean by “portion”? ¶60 Having determined that Valerie was not entitled to the life insurance proceeds, I would conclude that the portion of the proceeds by which Valerie would be unjustly enriched if she were entitled to retain it is anything above $0. That being noted, I recognize the Court’s concern that there is a significant issue in the imposition of the constructive trust because Valerie has spent or invested the life insurance proceeds on real property in California. Opinion, ¶ 51. It seems to me, however, that the primary significance of this issue is that it will likely require Valerie to sell the property if she is otherwise unable to pay the $2,306,103.13 that should have gone to Roy’s estate. While requiring Valerie to sell her home is indeed significant, it is certainly no more significant of an issue than ensuring that Roy’s estate is able to pay claims to Roy’s children and provide for their future as was intended and promised under the MSA and the parenting agreement providing for Saraya. ¶61 I agree that achieving an equitable result in this case will require the resolution of certain issues that are best left to the District Court on remand. For example, fluctuating real estate market values may affect Valerie’s ability to recoup and disgorge the full amount of the proceeds. A court sitting in equity is empowered to determine all questions involved in the case, and to fashion an equitable result that will accomplish complete justice. Kauffman-Harmon, ¶ 11. While the nuances of fashioning that equitable result are properly within the purview of the District Court on remand, I believe the facts of this case enable us to hold on appeal that the objective should be the 31 recoupment, to the fullest extent possible, of the entire life insurance proceeds. I would so instruct the District Court. /S/ JAMES JEREMIAH SHEA Chief Justice Mike McGrath joins the concurrence. /S/ MIKE McGRATH Justice Laurie McKinnon, dissenting. ¶62 I disagree with the Court’s decision on multiple grounds. ¶63 Preliminarily, the Court has not accorded proper deference to a trial court’s decision in matters of equity where there is no dispute of fact and the trial court has correctly applied the law. Although the District Court’s decision was rendered pursuant to summary judgment in a case of equity, see § 3-2-204, MCA, the decision of whether a constructive trust should be created; what, if anything, should be done for violation of an economic restraining order in a dissolution proceeding; and the remedy for failing to disclose a marital asset are all firmly committed to the discretion of the trial court for which an abuse of discretion must be found. Here, there were no disputed facts and the law—specifically § 40-4-252(4), MCA, and Briese, ¶ 39—allowed the trial court discretion in fashioning an appropriate remedy. In Briese, we specifically rejected a per se rule that automatically voids changes made in violation of an economic restraining order, holding that equitable principles should govern rather than a bright-line rule that beneficiary changes, as a matter of law, are void. Briese, ¶ 40 (“Other courts, while 32 holding that the violation does not serve to automatically void the beneficiary change, generally have found that courts have the authority to grant some form of relief through use of their powers of equity.”). Pursuant to § 40-4-202, MCA, a district court has broad discretion to distribute a marital estate equitably according to the circumstances of the case and, absent clearly erroneous findings, “we will affirm a trial court’s property distribution unless the court abused its discretion.” Marriage of Gebhart, 2003 MT 292, ¶ 16, 318 Mont. 94, 78 P.3d 1219. In my view, we have failed to account for the discretion of the trial court in our standard of review. The District Court presided over the dissolution, the probate, and claims of unjust enrichment and creation of a constructive trust. I would accord the trial court considerable latitude and discretion in applying and formulating an equitable remedy, and the trial court’s decision should not be overturned in the absence of an abuse of discretion. See Rawlings v. Rawlings, 2010 UT 52, ¶ 21, 240 P.3d 754 (2010). ¶64 The decision reached by the Court reforms the Marital Settlement Agreement, ignores the Final Parenting Plan, and invalidates life insurance contracts. The principal issue before the Court is whether a constructive trust should be imposed on $2,306,103.13 for the benefit of RBV, because Valerie was unjustly enriched when she received Roy’s life insurance proceeds due to the fact that: (1) Roy violated the TRO by changing beneficiaries of two life insurance policies; (2) Roy failed to execute a will giving all of his assets to RBV; and, alternatively, (3) Roy failed to disclose Policy 799 as an asset during their divorce. 33 ¶65 It is undisputed that Roy violated the economic TRO by changing his beneficiary designations in two term life insurance policies during the pendency of his dissolution proceeding and while the economic TRO was in effect. The issue, however, is whether Valerie—who was not a party to the dissolution proceeding—has been unjustly enriched. It is the third element of the test for unjust enrichment set forth in N. Cheyenne Tribe which is at issue in these proceedings: whether “the acceptance or retention by the conferee of the benefit under such circumstances as to make it inequitable for the conferee to retain the benefit without payment of its value.” N. Cheyenne Tribe, ¶ 36. The imposition of a constructive trust serves as a possible remedy to rectify the unjust enrichment of a party. Accordingly, it must be inequitable for Valerie to retain the benefit of Roy’s life insurance proceeds. ¶66 In Briese, the husband died while the divorce was pending and the economic TRO was in effect. We stated in Briese that the purpose of an economic restraining order in a dissolution proceeding is to “maintain the status quo” of the parties “so long as a dissolution action is pending.” Briese, ¶ 25. An economic restraining order “mitigates the potential harm to spouses and children caused by the dissolution process itself and ensures that reasonable provision is made for the spouse and children during the litigation.” Briese, ¶ 25. In fashioning an appropriate equitable remedy for a violation, a trial court must be cognizant of these principles and considerations. ¶67 We revisited the issue in In re Estate of Corrigan, 2014 MT 337, 337 Mont. 364, 341 P.3d 623, when the husband died prior to the dismissal of the dissolution proceeding. We held that the husband’s failure to serve his wife with the dissolution petition and 34 accompanying economic TRO within the three-year deadline for service of pleadings set forth in M. R. Civ. P. 4(t)(1) rendered the economic TRO ineffective after the three-year deadline lapsed. In re Estate of Corrigan, ¶ 21. Because the TRO was no longer effective, we refused to void the husband’s change in beneficiary designation to his adult children from his wife, finding Briese distinguishable because it involved “an active and ongoing divorce proceeding.” In re Estate of Corrigan, ¶ 21. We explained that “in Briese we declined to adopt a rule that would automatically void any change of beneficiary made by a decedent in violation of a divorce TRO. Rather, we gave the district court the discretionary authority to void such a change if equitable principles demanded it.” In re Estate of Corrigan, ¶ 20 (internal citation omitted). ¶68 Here, Roy’s death occurred after the divorce was finalized and the economic TRO had been dissolved. Once the TRO was dissolved, the District Court recognized that Roy would have been free to change his beneficiaries at any time. Pursuant to § 72-2-814 (2)(a)(i), MCA, Pamela, as an ex-spouse, would have been removed as a beneficiary of any of Roy’s life insurance policies as a matter of law. Therefore, while a change of beneficiary may have been voidable up until the dissolution was final, upon the economic TRO being dissolved there were no restraints on Roy’s ability to change the beneficiary. The District Court properly factored these considerations into its decision to deny Pamela equitable relief, finding that Roy’s change of beneficiary was evidence of his intent to make Valerie the beneficiary of his life insurance. Contrary to the Court’s conclusion, the fact that Roy actually did change his beneficiary requires no speculation about Roy’s intent and that he would have effectuated that intent subsequently through 35 executing a valid change of beneficiary. The District Court, unlike this Court, refused to speculate that Roy would not have followed through with a change when it concluded that Roy obviously intended Valerie to be the beneficiary having made no further changes after dissolution or the lifting of the economic TRO. The District Court observed that Valerie was not a party to the dissolution proceeding and, therefore, it was not “inequitable” for her to receive the proceeds which Roy obviously intended her to have and which had been memorialized in an insurance contract. This Court has not found the District Court’s refusal to speculate or its findings regarding Roy’s actions clearly erroneous. ¶69 Unjust enrichment is “the receipt of a benefit whose retention without payment would result in the unjust enrichment of the defendant at the expense of the claimant.” Restatement (Third) of Restitution and Unjust Enrichment § 1 cmt. a (2011); see also § 72-38-123, MCA. We relied upon 66 American Jurisprudence 2d Restitution and Implied Contracts § 11 (1973) in N. Cheyenne Tribe to establish the elements of unjust enrichment. N. Cheyenne Tribe, ¶ 39. “The doctrine of unjust enrichment or recovery in quasi contract applies to situations where there is no legal contract but where the person sought to be charged is in possession of money or property which in good conscience and justice he should not retain but should deliver to another.” 66 Am. Jur. 2d Restitution and Implied Contracts § 11 (emphasis added). Thus, to permit recovery on a theory of quasi contract where a written agreement exists would constitute a reformation of the contract and subversion of principles of law relating to contracts. A life insurance policy is issued pursuant to a contract. Moreover, “[a] life insurance policy owner, like a 36 testator, may alter or revoke designations at any time until death; thus, either instrument—whether will or insurance policy—must be interpreted and applied at death in order to effectuate the transferor’s final intent.” Thrivent Fin. For Lutherans v. Andronescu, 2013 MT 13, ¶ 7, 368 Mont. 256, 300 P.3d 117. The District Court determined that Valerie had not been unjustly enriched when she received proceeds pursuant to a valid insurance contract. The District Court did not make an incorrect conclusion of law or clearly erroneous factual finding in doing so. ¶70 The MSA, by its plain terms, provides that Roy was to execute a will making his son the beneficiary of his estate, not his life insurance. Life insurance proceeds are non-testamentary in nature and pass outside of the estate in accordance with the wishes of the insured. Section 72-6-111, MCA. Neither the MSA nor the Parenting Plan include any provision that states either party agreed to procure or maintain a life insurance policy for the benefit of anyone. Although it is common for marital settlement agreements or parenting plans to contain agreements requiring the procurement and maintenance of a life insurance policy with minor children, as an aspect of child support, designated as beneficiaries, neither the MSA nor Parenting Plan here mention anything about life insurance. In fact, although Pamela was aware of at least one of Roy’s life insurance policies she chose not to pursue Roy’s life insurance in the MSA. The District Court recognized that although Roy was required to make a will naming RBV as the beneficiary of his estate, Roy failed to do so prior to his untimely death. The District Court attempted to ascertain the intent of the parties when entering into the MSA and determined that it was not the parties’ intention to include Roy’s insurance policies in the 37 MSA or the Parenting Plan. Given the provisions of § 72-6-111, MCA, and that the policy that was disclosed was given to Roy in the MSA, I agree with the District Court that Roy’s failure to make a will does not support a finding that Valerie has been unjustly enriched. The Court thus incorrectly concludes that Valerie was unjustly enriched because “Roy’s estate is unable to pay claims to his children or provide for their future as was intended and promised under the MSA and the parenting agreement providing for Saraya.” Opinion, ¶ 47. Such a conclusion confuses principles of contract, the District Court’s findings of fact, and relevant statutory provisions. ¶71 As the Court appears to restrict its analysis only to Roy’s violation of the economic TRO, I will not address whether a term life insurance policy is an “asset” with a cash value and whether it was required to be disclosed or whether it would have been significant to the parties in negotiating their marital property settlement. I would affirm the District Court’s decision by applying a correct standard of review and the principle that the District Court be afforded latitude in fashioning an appropriate equitable remedy for violation of one of its orders. ¶72 I dissent. /S/ LAURIE McKINNON

March 8, 2016

dc2b62ef-57dd-4de1-a25f-934c6ead5d0c

State v. Shaffer

2016 MT 84N

DA 15-0597

Montana

Montana Supreme Court

DA 15-0597 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 84N STATE OF MONTANA, Plaintiff and Appellee, v. ZACHARY SHAFFER, Defendant and Appellant. APPEAL FROM: District Court of the Twenty-Second Judicial District, In and For the County of Carbon, Cause No. DC 12-26 Honorable Blair Jones, Presiding Judge COUNSEL OF RECORD: For Appellant: Zachary Shaffer (Self-Represented), Shelby, Montana For Appellee: Timothy C. Fox, Montana Attorney General, C. Mark Fowler, Assistant Attorney General, Helena, Montana Alex R. Nixon, Carbon County Attorney, Red Lodge, Montana Submitted on Briefs: March 2, 2016 Decided: April 5, 2016 Filed: __________________________________________ Clerk April 5 2016 Case Number: DA 15-0597 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 On February 22, 2013, Zachary Shaffer (Shaffer) entered and the District Court accepted a nolo contendere plea to a felony intimidation charge. On March 6, 2013, the District Court sentenced Shaffer to two consecutive ten-year sentences, one for the felony intimidation conviction, and one for a separate conviction stemming from a different incident. Shaffer appealed to this Court, arguing for various reasons that the judgments in both cases should be vacated. We affirmed the judgments and sentences. State v. Shaffer, 2014 MT 340N, 377 Mont. 436, 348 P.3d 172. On March 20, 2015, Shaffer filed a motion to withdraw his guilty plea in this case. The District Court denied his motion. Shaffer appeals the denial of his motion to withdraw his guilty plea. We affirm. ¶3 In his brief on appeal, Shaffer raises several claims that were not presented to the District Court. These include his claim that he entered the nolo contendere plea because he was under the mistaken belief that he risked a sentence enhancement due to a persistent felony offender (PFO) designation if he proceeded to trial; that he received ineffective assistance of counsel because his trial counsel should have informed him before he entered his plea that he was not subject to a PFO designation; that the charges 3 dismissed in exchange for his plea in this case offered no benefit to him because conviction on all of the charges was not possible; and that the time he served in incarceration exceeded the maximum penalty for the misdemeanors with which he was initially charged. ¶4 As we have said numerous times before, “this Court will not entertain new issues that were not raised in the District Court.” State v. Peterson, 2013 MT 329, ¶ 26, 372 Mont. 382, 314 P.3d 227 (citing State v. Osterloth, 2000 MT 129, ¶ 20, 299 Mont. 517, 1 P.3d 946 (no new issues may be raised on appeal of a motion to withdraw a plea); State v. McFarlane, 2008 MT 18, ¶ 12, 341 Mont. 166, 176 P.3d 1057 (this Court will not consider a claim of ineffective assistance of counsel at a change of plea proceeding when the claim was not raised in district court)). Because Shaffer did not raise the above claims in his motion to the District Court, we decline to address them now on appeal. ¶5 However, Shaffer’s remaining claim—that he is entitled to withdraw his plea because it was entered involuntarily—was raised in the District Court and is properly before us now. When reviewing an appeal of a denial of a motion to withdraw a plea, we review a district court’s findings of fact for clear error and its conclusions of law for correctness. State v. Jackson, 2013 MT 316, ¶ 9, 372 Mont. 312, 312 P.3d 462 (citing State v. Warclub, 2005 MT 149, ¶ 24, 327 Mont. 352, 114 P.3d 254). “The voluntariness of a plea is a mixed question of law and fact, which this Court reviews de novo.” Jackson, ¶ 9 (citing Warclub, ¶ 24). ¶6 Section 46-16-105(2), MCA, provides for the withdrawal of a plea of guilty or nolo contendere: 4 At any time before judgment or, except when a claim of innocence is supported by evidence of a fundamental miscarriage of justice, within 1 year after judgment becomes final, the court may, for good cause shown, permit the plea of guilty or nolo contendere to be withdrawn and a plea of not guilty substituted. We have determined that “good cause” includes a plea that was entered involuntarily. McFarlane, ¶ 11. A defendant’s plea is voluntary only if he is “fully aware of the direct consequences, including the actual value of any commitments made to him by the court, prosecutor, or his own counsel.” State v. Lone Elk, 2005 MT 56, ¶ 21, 326 Mont. 214, 108 P.3d 500 (quoting Brady v. United States, 397 U.S. 742, 755, 90 S. Ct. 1463, 1472 (1970)) (internal quotations omitted), overruled in part on other grounds by State v. Brinson, 2009 MT 200, ¶ 9, 351 Mont. 136, 210 P.3d 164. “[N]umerous case-specific considerations may bear on the question of whether good cause is shown to withdraw a guilty plea.” State v. Robinson, 2009 MT 170, ¶ 11, 350 Mont. 493, 208 P.3d 851 (citing Lone Elk, ¶ 23). Among these considerations are “[w]hether a district court adequately interrogated the defendant to determine whether the defendant understood his plea,” Lone Elk, ¶ 14, and “[w]hether the defendant’s plea was the result of a plea bargain in which the prosecutor exchanged the plea for dismissal of another charge,” Lone Elk, ¶ 16. The former bears on voluntariness because it tends to show the defendant had all the information necessary to make an informed decision. Lone Elk, ¶ 14. The latter “bears on voluntariness because it tends to show the defendant made an intelligent and calculated decision.” Lone Elk, ¶ 16. However, “[t]he rule that a plea must be intelligently made to be valid does not require that a plea be vulnerable to later attack if the defendant did not correctly assess every relevant factor entering into his decision.” 5 Lone Elk, ¶ 26 (quoting Brady, 397 U.S. at 757, 90 S. Ct. at 1473) (internal quotations omitted). The District Court need not allow the defendant to withdraw his guilty plea “[s]imply because the results failed to turn out as he expected or desired.” Lone Elk, ¶ 27. ¶7 We are satisfied in this case that Shaffer’s plea was entered voluntarily. Shaffer signed a plea agreement that enumerated his trial rights and explained that by signing the agreement, he was waiving those rights. The agreement explained that in exchange for Shaffer’s plea, the County Attorney would dismiss with prejudice the other counts charged in the information and would withdraw the PFO designation. The agreement further states that Shaffer had discussed the consequences of pleading “No Contest” with his attorney, that he has had no communication problems with his attorney, and that he was satisfied with his attorney’s services and advice. The agreement concludes with an affirmation that no physical or mental ailment prevents Shaffer from understanding what he is doing, and that he “voluntarily plead[s] no contest/nolo contendere to the offense of intimidation.” ¶8 During the February 22, 2013 change of plea hearing, the District Court then engaged in a thorough colloquy with Shaffer, during which Shaffer verbally confirmed the statements set forth in the written plea agreement. For instance, the court had the following exchanges with Shaffer: THE COURT: It’s my understanding that you have entered into a Section 46-12-211(1)(c) plea agreement with the state of Montana. You’ve indicated here by your filings that you’ve fully discussed the terms of the plea agreement with your attorney and it is your express and voluntary decision to enter into a plea agreement with the State. Please understand 6 that the Court does not participate in the making of plea agreements and the Court’s not bound by the terms and conditions of plea agreements. Under Section 46-12-211(1)(c) of the Montana Code the Court is, in fact, free to impose any lawful sentence which could be imposed for the offense to which you pled no contest and if the Court did impose a sentence greater than the one recommended in the plea agreement, you would not be allowed to withdraw your no contest plea as a matter of law. THE DEFENDANT: Yes, Sir. . . . THE COURT: Mr. Shaffer, do you acknowledge that you’ve had good communication with your counsel in this matter? THE DEFENDANT: Yes. THE COURT: And you’re satisfied with his services and advice here? THE DEFENDANT: Yes, sir. These exchanges demonstrate that the District Court adequately interrogated Shaffer to ensure that Shaffer understood the consequences of his plea. Lone Elk, ¶ 14. Together with the statements contained in the signed plea agreement and Shaffer’s repeated assurances that he was satisfied with the services provided by his attorney, Shaffer’s colloquy with the District Court at his change of plea hearing satisfies this Court that Shaffer’s plea was entered voluntarily. The fact that Shaffer’s sentencing did not turn out as he expected or desired does not entitle him to withdraw his guilty plea. Lone Elk, ¶ 27. ¶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 7 application of applicable standards of review. The District Court did not err in denying Shaffer’s motion to withdraw his plea. ¶10 Affirmed. /S/ PATRICIA COTTER We Concur: /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ BETH BAKER /S/ JIM RICE

April 5, 2016

183922a8-cbd4-46f9-a95e-64b8ebad6e26

Matter of K. B. YINC

2016 MT 73

DA 15-0549

Montana

Montana Supreme Court

DA 15-0549 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 73 IN THE MATTER OF: K.B., A Youth in Need of Care. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. DDN 2012-73 Honorable James P. Reynolds, Presiding Judge COUNSEL OF RECORD: For Appellant: Robin Meguire, Attorney at Law, Great Falls, Montana (Attorney for J.R.B./Father/Appellant) Mark Alan Mackin, Attorney at Law, Helena, Montana (Attorney for K.B.) For Appellee: Timothy C. Fox, Montana Attorney General, Micheal S. Wellenstein, Assistant Attorney General, Helena, Montana Leo Gallagher, Lewis and Clark County Attorney, Ann Penner, Deputy County Attorney, Helena, Montana Submitted on Briefs: February 24, 2016 Decided: March 29, 2016 Filed: __________________________________________ Clerk March 29 2016 Case Number: DA 15-0549 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 K.B.’s father, J.B. (Father), appeals from an order entered by the First Judicial District Court, Lewis and Clark County, terminating his parental rights. We affirm. ¶2 Father presents the following issues for review: 1. Whether the District Court lacked subject matter jurisdiction over K.B.’s abuse and neglect proceeding. 2. Whether Father received ineffective assistance of counsel. FACTUAL AND PROCEDURAL BACKGROUND ¶3 K.B. was born in 2007 and is the daughter of Father and M.H. (Mother). K.B. was living with Mother when she was removed from Mother’s care by the Department of Public Health and Human Services (the Department) on November 26, 2012, due to concerns regarding Mother’s ability to care for her and protect her from domestic violence. K.B. was placed in kinship foster care with her Aunt and Uncle, where she has remained. K.B.’s younger sister, T.H., also lives with Aunt and Uncle. K.B. was adjudicated a Youth in Need of Care on May 30, 2013. The Department drafted a treatment plan for Father. Father requested the name of the treatment plan be changed. The typewritten words “Treatment Plan” were stricken from the title with a pen. Above “Treatment Plan” the handwritten word “Checklist” was inserted. Otherwise, the substance of the document remained unchanged. The District Court referred to the document afterwards as the “non-offending parent checklist.” Father signed the document on June 25, 2013, and the District Court approved it. Summarized, its tasks required Father to: 1) remain law abiding; 2) address his substance abuse issues; 3) 3 establish a safe, stable home and obtain employment; 4) maintain visitation with K.B.; and 5) remain in contact with the Department. ¶4 The Department filed petitions to terminate Mother and Father’s rights on May 12, and September 29, 2014, respectively. On April 15, 2015, the District Court held a termination hearing. At the hearing, Mother consented to termination and relinquished her parental rights to K.B. Father opposed his termination, but did not argue he should be given custody of K.B. Instead, he asked the District Court for an additional six months to accomplish the tasks on his “checklist” before he could become a placement option for K.B. ¶5 At the termination hearing, evidence presented to the District Court showed that K.B. flourished while living with Aunt and Uncle during the 29 months preceding the termination hearing. At the time of the hearing, Aunt and Uncle wished to adopt K.B. and T.H. K.B.’s school principal testified that K.B.’s behavior and demeanor had drastically improved since being placed with Aunt and Uncle, who are very active in parenting her. K.B.’s kindergarten and first grade teacher testified that K.B. was initially a very angry and isolated student. Later, she testified, K.B. became a pleasant, eager to please student with vastly improved behavior. K.B.’s current, second grade teacher testified that she had not observed some of K.B.’s initial behavioral issues that others had witnessed and reported to her. She testified K.B. likes to be in control, is a pleasant student, and she enjoys having K.B. in her class. K.B.’s Court Appointed Special Advocate testified that after many attempts, he was never able to get in contact with Father and that Father’s termination was in K.B.’s best interests because of her need for 4 permanency. K.B.’s therapist testified that she had worked with K.B. since the beginning of 2013. In that time, she testified, K.B. had made substantial progress in her behavior and self-confidence. ¶6 Michelle Silverthorne (Silverthorne), Child Protection Specialist, has been K.B.’s case worker since her removal. At the termination hearing, Silverthorne testified that she initially looked to Father as the “non-offending” parent for K.B.’s placement, as is customary when a child is removed from one custodial parent. However, she did not think Father was an appropriate or safe choice because he admitted to her that he could not financially support K.B. or provide her a place to live. Also, Father was on probation as a result of an earlier conviction of partner-family member assault. When asked about the Department’s policy with regard to a treatment plan for a non-offending parent, Silverthorne responded: Well, if the non-offending parent is unable to take care of the child, then we still go forward with trying to get the child adjudicated as a Youth in Need of Care and then developing a treatment plan to get that parent to the point where they can parent the child full time. She testified that it was under this policy that she proceeded in developing a treatment plan for Father. ¶7 As of the termination hearing, Silverthorne testified that Father’s treatment plan had not been successful. Father had been incarcerated recently, had stopped visiting K.B., and failed to remain in contact with Silverthorne. Father’s visitation rights were suspended because reports alleged, and K.B. confirmed, that he had left K.B., age six, at a carousel alone while he went to pick up his girlfriend. Also, another report 5 alleged Father was abusing methamphetamines. During the summer of 2014, Silverthorne and Father’s attorney each notified Father that his unsupervised visits would be suspended until he underwent urinalysis testing. At the time of the termination hearing, Father had not had contact with K.B. since mid-2014, except for one visit made while K.B. was in the hospital recovering from a tonsillectomy. Silverthorne testified that Father had not called or visited her office to see why his visitation had been suspended, although he knew her phone number, which had not changed, and knew where her office was located. Silverthorne testified that as a result of not being in contact with Father, she had no way to verify whether he had established safe, stable housing or employment. Silverthorne testified that she did not believe Father would be able to turn his situation around in a reasonable amount of time to adequately care for K.B. Silverthorne testified that K.B. is well-bonded and feels safe with Aunt and Uncle. Silverthorne testified that termination of Father’s rights was in K.B.’s best interests, especially her need for permanency. ¶8 Father testified at the termination hearing and explained he was not allowed to see K.B. from August 2014 until February 2015 and he did not know why. He testified he had been told to call Silverthorne to find out and had tried to on several occasions, but had failed to reach her or get a call back from her. Father testified he had no issue taking a drug test, as he had been tested regularly while on probation. He also testified that he did not believe he should be required to undergo drug testing. Father testified he was employed part-time and was planning on moving to Butte where he believed he would be offered a full-time job. 6 ¶9 At the end of the termination hearing, the District Court terminated Father’s rights from the bench. On July 23, 2015, the District Court issued its findings of fact, conclusions of law, and order terminating Father’s parental rights pursuant to § 41-3-609(1)(f), MCA. In its order, the District Court concluded that clear and convincing evidence established that a treatment plan for Father had been approved, but had not been successful and that the condition rendering Father unfit was unlikely to change within a reasonable amount of time. The District Court also concluded that clear and convincing evidence established that K.B.’s best interests would be served by terminating Father’s parental rights and awarding the Department permanent legal custody with the lawful authority to consent to her adoption. Father appeals. STANDARD OF REVIEW ¶10 Whether a district court possesses subject matter jurisdiction is a question of law, which we review de novo. In re B.W.S., 2014 MT 198, ¶ 10, 376 Mont. 43, 330 P.3d 467 (citation omitted). This Court exercises plenary review of whether a parent was denied effective assistance of counsel. In re B.M., 2010 MT 114, ¶ 22, 356 Mont. 327, 233 P.3d 338; In re J.J.L., 2010 MT 4, ¶ 14, 355 Mont. 23, 233 P.3d 921. DISCUSSION ¶11 1. Whether the District Court lacked subject matter jurisdiction over K.B.’s abuse and neglect proceeding. ¶12 Father argues the District Court lacked subject matter jurisdiction to terminate his parental rights because the court never approved a treatment plan for him under § 41-3-609(1)(f), MCA, and because he was a “non-offending” parent. “Subject-matter 7 jurisdiction is a court’s fundamental authority to hear and adjudicate a particular class of cases or proceedings.” Lorang v. Fortis Ins. Co., 2008 MT 252, ¶ 57, 345 Mont. 12, 192 P.3d 186 (citations omitted). “Subject matter jurisdiction of the district courts is established by the Montana Constitution.” Lorang, ¶ 56 (internal quotations and citation omitted). Particularly, Article VII, Section 4(1) provides that district courts have “original jurisdiction in . . . all civil matters.” Therefore, a district court’s subject matter jurisdiction is extremely broad and covers “all civil matters,” including child abuse and neglect proceedings. A court’s subject matter jurisdiction is not affected by a court’s failure to follow statutory requirements. See B.W.S., ¶ 13 (citations omitted). ¶13 Father argues the District Court lacked subject matter jurisdiction to terminate his parental rights because his “checklist” did not satisfy the requirements of § 41-3-609(1)(f), MCA. However, conformity with the statute is unrelated to a court’s authority to hear child abuse and neglect cases. Trial courts have subject matter jurisdiction over child abuse and neglect proceedings because they are “civil matters.” ¶14 Subject matter jurisdiction over child abuse and neglect proceedings is conferred to the district courts by the Montana Constitution, not by statute. Even if the court failed to follow § 41-3-609(1)(f), MCA, it would nevertheless still have subject matter jurisdiction over the termination proceeding affecting K.B. Pursuant to § 41-3-103(1), MCA, “a person is subject to a proceeding under [the child abuse and neglect statutes] and the district court has jurisdiction over: (a) a youth who is within the state of Montana for any purpose;” and “(d) a youth or a youth’s parent . . . who resides in Montana . . . .” Therefore, there is no requirement that a parent be an “offending” parent before a court 8 may make decisions regarding the best interests of a child suspected of having been abused or neglected. Jurisdiction is conferred by virtue of the youth being within the state of Montana, and that jurisdiction extends to a parent pursuant to the provisions of § 41-3-103(1), MCA. The District Court correctly concluded it had subject matter jurisdiction over K.B.’s child abuse and neglect proceeding and authority to terminate Father’s parental rights. ¶15 2. Whether Father received ineffective assistance of counsel. ¶16 “[P]arents have a due process right to effective assistance of counsel in termination proceedings.” In re A.S., 2004 MT 62, ¶ 20, 320 Mont. 268, 87 P.3d 408. Whether assistance was effective requires review of counsel’s training, experience, and advocacy. B.M., ¶ 22 (citation omitted). Ineffective assistance of counsel requires reversal only if the parent suffered prejudice. B.M., ¶ 22 (citation omitted). ¶17 Father argues he received ineffective assistance of counsel because of his counsel’s inadequate advocacy of Father’s interests. Specifically, Father believes his counsel rendered ineffective assistance when he failed to object: (1) to K.B. being adjudicated a Youth in Need of Care; (2) to the District Court’s characterization of his “checklist” as a treatment plan; and (3) to the District Court exercising subject matter jurisdiction over K.B.’s proceeding. We address each contention in turn. A. Youth in Need of Care Adjudication ¶18 On May 30, 2013, Father stipulated to the District Court’s adjudication of K.B. as being a Youth in Need of Care. A Youth in Need of care is a youth who has been determined to be, or have been, abused, neglected, or abandoned. Section 41-3-102(34), 9 MCA. In his stipulation, Father admitted “that the State could prove by a preponderance of evidence that the youth is abused and neglected within the meaning of Mont. Code Ann. § 41-3-102 based upon the facts contained in the Affidavit of the Child Protection Specialist.” Child Protection Specialist Michelle Young filed an affidavit that included evidence that Mother was subjecting K.B. to domestic violence and drug abuse, by Mother’s use of methamphetamines. The affidavit alleged both of Mother’s children had fathers who were convicted of partner-family member assault while living with K.B. The affidavit alleged K.B. then “age 5, has had significant exposure to domestic violence her entire young life” and that both K.B.’s father and her sister’s father had received at least three charges of partner-family assault, for allegedly assaulting Mother. The affidavit alleged that K.B. had witnessed Mother and T.H., then age three, being beaten, hit, and kicked. The affidavit further stated that T.H.’s father, while incarcerated, accused Mother of physically abusing T.H. by kicking her in the face. ¶19 Had Father not stipulated and insisted on a contested hearing, the State was ready, willing, and able to present testimony regarding these allegations. The evidence was substantial and would have established by a preponderance that K.B. was a Youth in Need of Care. Thus, any objection or insistence by Father’s counsel to have a contested hearing, even assuming for the sake of argument that it constituted deficient performance by counsel, could not have prejudiced Father. Moreover, Father misunderstands the focus of child abuse and neglect proceedings—the child. He mistakenly argues that K.B. could only have been adjudicated a Youth in Need of Care “as to” Mother and not “as to” him because K.B. was living with Mother when she was removed. A child is not 10 determined to be a Youth in Need of Care “as to” anyone. The child is adjudicated a Youth in Need of Care because he or she is being, or have been, abused, neglected, or abandoned. The District Court had sufficient evidence to adjudicate K.B. a Youth in Need of Care. Father cannot show he suffered prejudice as a result of his counsel’s failure to object to that determination. B. “Checklist” or “Treatment Plan” ¶20 On June 25, 2013, Father signed and the District Court approved a document prepared by the Department as a treatment plan. Father asked that the document be renamed. The words “Treatment Plan” were marked through and replaced with the word “Checklist.” On appeal, Father contends his counsel was ineffective in failing to object to the District Court’s characterization of this document as a treatment plan. He argues that retitling the document changed its substance. We find Father’s argument unpersuasive. ¶21 If a child is found to be a Youth in Need of Care, the court may “order the department to evaluate the noncustodial parent as a possible caretaker.” Section 41-3-438(3)(b), MCA. The court may order a treatment plan for the child’s parent if “the court has made an adjudication under 41-3-437 that the child is a youth in need of care.” Section 41-3-443(1)(c), MCA. A treatment plan is a “written agreement between the department and the parent or guardian . . . that includes action that must be taken to resolve the condition or conduct of the parent or guardian that resulted in the need for protective services for the child.” Section 41-3-102(30), MCA. 11 ¶22 Here, the statute authorized the Department, following the court’s determination that K.B. was a Youth in Need of Care, to evaluate Father as a noncustodial parent and possible caretaker for K.B. Similarly, the District Court was authorized by statute to order Father to comply with a treatment plan because K.B. was adjudicated a Youth in Need of Care. The document in question was prepared for Father as a treatment plan. It specified actions Father must take to resolve the need for protective services to be involved in K.B.’s life, and for Father to become an appropriate placement option for K.B. The document, by whatever name Father chooses to subscribe to it, constituted a treatment plan as defined by statute. Father has not shown he suffered prejudice as a result of his counsel’s failure to object to the District Court’s characterization of the so-called “non-offending parent checklist” as a treatment plan because the document constituted a treatment plan. As such, the document satisfied one of the requirements of § 41-3-609(1)(f), MCA, for termination of Father’s rights. C. Subject Matter Jurisdiction ¶23 Father cannot show he suffered prejudice as a result of his counsel’s failure to object to the District Court’s subject matter jurisdiction because, as shown above, the District Court had subject matter jurisdiction over K.B.’s abuse and neglect proceeding. CONCLUSION ¶24 The District Court appropriately exercised subject matter jurisdiction over K.B.’s abuse and neglect proceeding. Father cannot demonstrate he received ineffective assistance of counsel. 12 ¶25 Affirmed. /S/ LAURIE McKINNON We Concur: /S/ MIKE McGRATH /S/ JAMES JEREMIAH SHEA /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JIM RICE

March 29, 2016

d338930c-3c59-4e54-ad05-d6bf9d841b50

Johnson v. Wayne S. Hansen Trust

2016 MT 46

DA 14-0478

Montana

Montana Supreme Court

DA 14-0478 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 46A DOUGLAS W. JOHNSON, Plaintiff and Appellee, v. WAYNE S. HANSEN TRUST; THE STATE OF MONTANA; THE DEPARTMENT OF REVENUE of the State of Montana; POWELL COUNTY, a body politic and corporate and political subdivision of the State of Montana; LISA D. SMITH, as Treasurer of Powell County, the unknown heirs, unknown devisees and unknown creditors of each of the above described individual Defendants who may now be deceased; and all other persons, unknown, claiming or who might claim any right title, estate or interest in or lien or encumbrance upon the real property described in the complaint adverse to Plaintiff’s title thereto, whether such claim or possible claim be present or contingent, Defendants, WAYNE S. HANSEN TRUST, Defendant and Appellant. APPEAL FROM: District Court of the Third Judicial District, In and For the County of Powell, Cause No. DV-13-41 Honorable John W. Larson, Presiding Judge COUNSEL OF RECORD: For Appellant: Jeffrey W. Dahood, Knight and Dahood, Anaconda, Montana For Appellee: Daniel Sweeney, Sweeney Law Firm, Butte, Montana May 3 2016 Case Number: DA 14-0478 2 Submitted on Briefs: February 3, 2016 Decided: March 1, 2016 Amended: May 3, 2016 Filed: __________________________________________ Clerk 3 Justice Jim Rice delivered the Opinion of the Court. ¶1 Justice Jim Rice delivered the Opinion of the Court. The Wayne S. Hansen Trust (Trust) appeals from two orders issued by the Third Judicial District Court, Powell County. The Trust acquired tax deeds to three tracts of real property located in Powell County, previously owned by Douglas W. Johnson (Johnson). The District Court’s first order granted summary judgment to Johnson, declaring the tax deeds void, and the second order addressed the calculation of the final amount to be paid to the Trust. We affirm and address the following issues:1 1. Did the District Court err by granting summary judgment to Johnson and declaring the tax deeds void? 2. Did the District Court err in determining the final amount due to the Trust as purchaser of the tax liens? PROCEDURAL AND FACTUAL BACKGROUND ¶2 Johnson owned three parcels of real property located in Powell County that were valued collectively for tax purposes at $260,478. After Johnson failed to pay the property taxes over several years, the Trust acquired tax deeds to the properties in December of 2012. The Trust filed three quiet title actions for the respective properties in March 2013, and Johnson responded by filing his own quiet title actions on the properties. Johnson alleged that the tax deeds issued to the Trust violated statutory procedural requirements and asked that the District Court set them aside and declare his ownership interest. 1 The Trust raises 19 issues on appeal. We refer counsel to M. R. App. P. 12(1)(b), providing: “Parties are encouraged to limit the number of issues to 4 or fewer.” 4 ¶3 In April 2013, upon the Trust’s motion, Johnson deposited $20,000 into the Clerk of Court’s trust account as a bond pursuant to § 15-18-411, MCA. Later, the District Court consolidated the six quiet title actions and dismissed Powell County and Powell County Treasurer Lisa Smith (Smith) as defendants, with the understanding that they would produce documents and other evidence as requested by the parties. In response to Johnson’s requests, Powell County and Smith produced several hundred pages of records pertaining to the tax liens and deeds on the subject properties. Following a motion from the Trust, the District Court issued an order in October 2013, directing Johnson to deposit an additional $17,497.48 into the Clerk of Court’s trust account, raising his deposit to $37,497.48.2 ¶4 Johnson moved for summary judgment in December 2013, citing evidence obtained from the County to argue that both the County and the Trust had failed to comply with several statutes, and that the tax deeds were therefore void. The District Court granted summary judgment to Johnson in May 2014, finding multiple instances of statutory noncompliance in the tax deed process, and declared the tax deeds void. In the same order, the District Court denied another request from the Trust to order Johnson to deposit additional bond funds. On June 30, 2014, the District Court entered judgment, 2 Although the District Court ordered Johnson to deposit additional bond funds, the amount Johnson was required to deposit was significantly less than what the Trust requested. In its motion, the Trust requested a deposit in the amount of $79,421.39. Included in that sum were accrued taxes for the years 2008, 2009, 2010, 2011, and 2012, penalties, interest, property insurance premiums, publication costs, court filing fees, trust administrative expenses, and legal fees. In ordering Johnson to deposit $37,497.48, the District Court specifically did not include trust administrative expenses or attorney fees. 5 ordering that Johnson’s deposit be remitted to the Trust, and that a Certificate of Redemption for each of the properties be issued to Johnson. ¶5 On July 15, 2014, the Trust filed objections and a request for relief from the judgment pursuant to M. R. Civ. P. 54(c) and 58(e). On July 28, the Trust also filed a Motion to Alter or Amend the Findings and Judgment or for a New Trial. In both of these motions, the Trust argued that the District Court erred in granting summary judgment by ignoring genuine issues of material fact, and by failing to properly calculate the final amount owed to the Trust. The Trust contended that the District Court erred by denying the Trust’s request for an additional bond deposit, arguing that the $37,497.48 deposited by Johnson, which had been calculated as of July 19, 2013, failed to account for additional taxes, interests, and costs paid by the Trust. In November 2014, the District Court issued an order partially granting and partially denying the Trust’s motions. Specifically, the District Court denied the request to alter or amend the grant of summary judgment, but acknowledged that the judgment failed to “address the issue of taxes accrued or paid by either party during the pendency of the proceedings.” Accordingly, the District Court ordered the parties to submit additional memorandum with supporting evidence “to address any discrepancy between the bond deposit returned to Defendant Hansen Trust and any final redemption amount that is still alleged owed.” ¶6 After receiving additional briefing from the parties, the District Court issued an Order Regarding Final Redemption Amount in February 2015. The District Court noted that the Trust, in its additional briefing, had submitted the affidavit of the Trustee 6 Christian Hansen that “references unsubstantiated amounts for an additional bond deposit, accrued interest, and other disbursements, including property taxes for 2014, property insurance renewal costs, and court filing fees.” However, the court further noted that “Defendant Hansen Trust does not provide any supporting documentation to show how it calculates the interest nor does it provide the Court with evidence of proof of payments . . . .” The District Court ruled that “based on the evidence presented to the Court, no additional redemption amount is due or owing to Defendant Hansen Trust.”3 The Trust appeals from the District Court’s orders granting summary judgment and determining the final amount owed to it. STANDARD OF REVIEW ¶7 The Court reviews a grant of summary judgment de novo, performing the same analysis as does a district court. Lorang v. Fortis Ins. Co., 2008 MT 252, ¶ 36, 345 Mont. 12, 192 P.3d 186 (citation omitted). “The judgment sought 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 3 The Trust filed a third post-judgment motion for relief pursuant to M. R. Civ. P. 60(b)(1) and (5) on March 2, 2015, requesting that the District Court consider the “excluding of those receipts from its Memorandum as being an inadvertent mistake.” The Trust included an affidavit and receipts that had not been submitted previously. This documentation contained the property insurance premium information, as well as receipts for the 2013 and 2014 tax year payments. The District Court denied this motion, finding the Trust’s supplemental documentation was untimely. On May 11, 2015, Johnson filed a motion that requested the District Court to order the Powell County Treasurer to mail the tax bills for the properties to him, and not to the Trust. In its answer, the Trust argued that the District Court should use its authority sua sponte to resolve the discrepancy between the bond deposit and the redemption amount, and that the matter of the tax bills should be held in abeyance. By then, the appeal had been filed to this Court, and the District Court concluded that it was “divested of jurisdiction to address this matter further.” 7 judgment as a matter of law.” M. R. Civ. P. 56(c)(3). “In determining whether genuine issues of material fact exist, we must view all evidence in the light most favorable to the non-moving party.” Lorang, ¶ 38. If the moving party meets its burden of demonstrating a complete absence of genuine issues of material fact, the burden then shifts to the non-moving party to set forth specific facts, not merely denials, speculation, or conclusory statements, in order to establish that a genuine issue of material fact does indeed exist. Finally, if no genuine issues of material fact exist, it must then be determined whether the facts actually entitle the moving party to judgment as a matter of law. Lorang, ¶ 39. ¶8 “Our standard of review relating to conclusions of law is whether the trial judge’s interpretation of the law is correct.” Moran v. Robbin, 261 Mont. 478, 482, 863 P.2d 395, 398 (1993) (citing Steer, Inc. v. Dep’t of Revenue, 245 Mont. 470, 474, 803 P.2d 601, 603 (1990)). DISCUSSION ¶9 1. Did the District Court err by granting summary judgment to Johnson and declaring the tax deeds void? ¶10 The Trust contends that the District Court improperly granted summary judgment and declared the tax deeds void. Generally, the Trust argues that summary judgment was improper because the record was incomplete and disputed issues remained. ¶11 Tax deed proceedings require strict compliance with the governing statutes: Tax deed proceedings implicate a property owner’s fundamental interests. The purpose behind the tax lien sales statutes is to protect property owners and their rights to due process. Due to the important interests at stake, every essential and material step required by the tax deed statutes must be strictly followed. Such exacting compliance with the statutes is necessary 8 because the owner risks losing his or her real property for the failure to pay the property taxes. Often, very valuable property is lost for a mere pittance. Hansen Trust v. Ward, 2015 MT 131, ¶ 26, 379 Mont. 161, 349 P.3d 500 (internal citations and quotation marks omitted). We have also held that “[i]n determining the sufficiency of the tax deed proceedings, the record alone is to be considered . . . .” Moran, 261 Mont. at 483, 863 P.2d at 398. ¶12 In his motion for summary judgment, Johnson asserted, among other claims of statutory violations, that Treasurer Smith had failed to provide the County Clerk and Recorder with a report of all persons and property owing taxes, in violation of § 15-16-301, MCA. The statute requires the county treasurer to “make a report to the county clerk and recorder in detail, showing the amount of taxes collected and a complete list of all persons and property then owing taxes.” Section 15-16-301(1), MCA. As evidence of this failure, Johnson included a copy of a memo sent from Smith to the Powell County Clerk and Recorder on March 31, 2011, in which she acknowledged: Per [§] 15-16-301, MCA, on the third Monday of June of each year, I am required to provide you with a report of the amount of taxes collected, a list of all persons and property then owing taxes and a separate report showing the amount of taxes suspended or canceled. I don’t know that this has ever been done. I know I haven’t prepared these reports for you since I started . . . . The attachments provide these reports to you for fiscal years 2007, 2008, 2009[,] and 2010. Although the statutory date requirement has not been met, this will provide a starting point for future compliance with this statute. In another memorandum, also dated March 31, 2011, Smith acknowledged that other reports required under § 15-17-214(2)(a), MCA, had likewise not been submitted to the 9 County Clerk and Recorder. Johnson also provided records of the procedures and notices employed in this case, and detailed how they failed to satisfy statutory requirements. ¶13 In Isern v. Summerfield, 1998 MT 45, 287 Mont. 461, 956 P.2d 28, the appellant taxpayer claimed that the district court had erred by granting summary judgment to the tax deed purchasers, and by concluding that multiple errors in the process did not void the tax deed. We agreed with the appellant taxpayer and reversed following a discussion of the statutory infractions, concluding, “[g]iven the requirement of strict compliance with statutory procedures for issuing a tax deed, . . . we hold that the errors and omissions discussed above void the subject tax deed . . . .” Isern, ¶ 21. The appellant taxpayer noted several statutory errors, including a failure to comply with § 15-16-301, MCA. Isern, ¶ 11. Similarly, here, Johnson demonstrated a violation of this same statute, as well as many other violations, from the records provided by the County. The District Court reviewed the records and correctly granted summary judgment to Johnson, identifying a total of thirteen errors in the tax deed process. ¶14 The Trust argues that the record was incomplete and that genuine issues of material fact remained, but fails to articulate exactly what those issues of fact are. The records cited by Johnson were clearly sufficient to establish several violations of the statutory tax deed process. After producing records regarding these tax deed transactions, Treasurer Smith submitted an affidavit wherein she stated that “additional documentation may exist that was not located during the week-long search” (emphasis added). The Trust emphasizes this statement in arguing that the District Court prematurely granted 10 summary judgment without giving the Trust the opportunity to conduct “original discovery.” However, the Trust fails to show how the discovery of additional documentation could have changed the outcome—multiple statutory violations, sufficient to void the tax deeds, were already established by the uncontested evidence presented.4 ¶15 We affirm the District Court’s order granting summary judgment. Montana law clearly requires “exacting compliance with the statutes” governing the tax deed process, and the host of errors in the statutory procedure in this case required voiding of the deeds. Hansen Trust, ¶ 26. ¶16 2. Did the District Court err in determining the final amount due to the Trust as purchaser of the tax liens? ¶17 The Trust argues that the District Court failed to determine a proper equation or formula for calculation of the redemption amount5 owed to it, that the District Court incorrectly ordered the bond deposit paid in lieu of redemption when the liens on the properties had not been properly extinguished, and that the final amount remitted by Johnson failed to include the proper interest, subsequent taxes, and costs. 4 The Trust also argues that summary judgment was improperly entered because “revelations of the county’s alleged nonfeasance, misfeasance, and knowledgeable contributions to the problems” in the tax deed process “constituted a genuinely disputed material issue.” However, this was a quiet title proceeding in which the County claimed no interest in the property, and in which no claims against the County were filed, if any could have been. The District Court’s dismissal of the county defendants was proper. 5 We use the term “redemption amount” here because it has been used throughout the course of this case (e.g., the District Court’s “Order Regarding Final Redemption Amount”), and has been used in our previous case law. See, e.g., Hansen Trust, ¶ 44. The term “redemption” is primarily used in statute to refer to the process of extinguishing a tax lien on a property by payment to the County, as codified in § 15-18-111, MCA, et seq., wherein the delinquent taxpayer or interested party is referred to as the “redemptioner.” Section 15-18-112(2)-(3), MCA. However, the use of the term within the context here clearly refers to the amount to be reimbursed directly to the tax purchaser in tax litigation. See also § 15-18-412(2)(a), MCA. 11 ¶18 A tax deed conveys to the tax purchaser, or “grantee,” the “absolute title to the property described in the deed . . . .” See § 15-18-413(1), MCA. In addition, this “conveyance” from the county gives to the tax purchaser “the right, if the tax deed . . . [is] attacked and held irregular or void, to recover the unpaid taxes, interest, penalties, and costs that would accrue if the tax proceedings had been regular and it was desired to redeem the property.” Section 15-18-413(2)(b), MCA.6 The delinquent taxpayer may seek to have the tax deed declared void via a quiet title action, as happened in this case, and is referred to by statute as the “true owner.” Section 15-18-411(1)(b), MCA. In such an action, the true owner may be ordered to deposit with the court: the amount of all taxes, interest, penalties, and costs that would have accrued if the property had been regularly and legally assessed and taxed as the property of the true owner and was about to be redeemed by the true owner; and the amount of all sums reasonably paid by the purchaser following the order and after 3 years from the date of the tax lien sale to preserve the property or to make improvements . . . . Section 15-18-411(1)(c)(i)(A)-(B), MCA. Then, if “the true owner is successful in the action and the tax proceedings are declared void, the amount deposited with the court must be paid to the purchaser” of the tax lien. Section 15-18-412(3), MCA. This deposit “encourages prompt return of the property to the tax rolls” and “prevents unjust enrichment of the owner at the expense of the tax purchaser should the owner win.” Ball v. Gee, 243 Mont. 406, 412, 795 P.2d 82, 86 (1990). “The deposit also lessens the 6 We take this opportunity to clarify our discussion of this statute in Hansen Trust, ¶ 42. In describing the rights of the tax purchaser after a tax deed has been declared void, as provided by § 15-18-413(2), MCA, we stated that the term “conveyance” in the statute refers to a “new deed,” presumably transferring the property back to the true owner. Hansen Trust, ¶ 42, n.4. However, as used here, the term “conveyance” actually describes the original conveyance from the county to the tax purchaser by way of the tax deed. 12 burden on the courts and the purchasers by precluding frivolous defenses.” Ball, 243 Mont. at 412, 795 P.2d at 86. ¶19 Here, the two parties and the District Court all used different equations to calculate the final amount due to the Trust after the tax deeds were declared void, and we hope to clarify the statutory equation herein. First, as used in Hansen Trust, ¶ 44, the term “redemption amount” means the “amount reflecting the taxes, interest, penalties, and costs that would have accrued under normal circumstances.” This amount, which a court may order to be deposited with the court, represents the amount the delinquent taxpayer or “true owner” would have had to pay to the County “if the property had been regularly and legally assessed and taxed as the property of the true owner and was about to be redeemed by the true owner.” Section 15-18-411(1)(c)(i)(A), MCA. In other words, the statute requires a calculation as if redemption were taking place by a payment to the County at that moment in the litigation,7 which consists of the “amount of taxes due, including penalties, interest, and costs, as of the date of the notice of pending tax deed issuance . . . .” Section 15-18-212(6)(e), MCA. In addition, “[t]he amount of interest and costs provided for in subsection (6)(e) continues to accrue until the date of redemption . . . .” Section 15-18-212(7), MCA. Thus, reading these provisions together, we conclude the redemption amount requires a calculation of a sum of the unpaid taxes, interest that accumulates at the statutory rate until the date of deposit, and the costs and 7 Section 15-18-413(2)(b), MCA, contains very similar language, entitling a tax purchaser, in the event that the tax deed is declared void, to recover the amount that would have accrued “if the tax proceedings had been regular and it was desired to redeem the property.” 13 penalties assessed up until the date of deposit. Additional interest that may accrue on this amount during further litigation and additional costs are discussed below. ¶20 The next amount required by statute to be repaid by the true owner is any property taxes on the property paid by the tax purchaser subsequent to issuance of the tax deed. Section 15-18-412(6), MCA, provides that the court “shall also determine the rights resulting from any additional taxes on the property accruing or being paid by either party during the pendency of the suit.” If the tax purchaser has paid property taxes on the property subsequent to issuance of the tax deed, the true owner must reimburse this cost. See also Hansen Trust, ¶ 44. ¶21 The next item in the equation is costs. By statute, the true owner must deposit “the amount of all sums reasonably paid by the [tax] purchaser,” after the court’s deposit order and at least 3 years after the date of the tax lien sale, “to preserve the property or to make improvements on the property while in the purchaser’s possession . . . .” See § 15-18- 411(1)(c)(i)(B), MCA. Further, “costs” are also defined as those that are incurred by the tax purchaser and are “required by law.” Section 15-17-121(2)(b), MCA; Hansen Trust, ¶ 42. We have held that, even if costs such as property insurance, administrative expenses, and attorney fees could be considered reasonable, they are not “required by law” and are not reimbursable. See Hansen Trust, ¶ 43. ¶22 Finally, there is the issue of additional interest that may be claimed during the course of litigation. As discussed above, the redemption amount necessarily includes the unpaid taxes, interest that accumulates until the date of deposit, and costs and penalties. 14 In Hansen Trust, we also affirmed the District Court’s award of interest to the tax purchaser that had accumulated on the true owner’s deposit during the litigation.8 Hansen Trust, ¶ 41. However, the decision to award any such interest lies within the discretion of the presiding court, and a tax purchaser is not automatically entitled to such an award. See § 15-18-412(7), MCA. ¶23 Here, the District Court ordered Johnson to deposit $37,497.48, which included property taxes for tax years 2008, 2009, 2010, 2011, and 2012, accumulated interest on that sum assessed by the Trust, insurance premiums, court filing costs, and publication costs. As explained herein, there is no provision in the statutes entitling a tax purchaser to collect interest on the redemption amounts owed or other costs not expressly required by law. See § 15-17-121(2), MCA; § 15-18-411(1)(c)(i)(B), MCA. On the other hand, the Trust points out that the $37,497.48 amount was calculated only as of July 19, 2013, and did not include the subsequent taxes it paid for tax years 2013 and 2014. However, the Trust failed to submit the necessary documentation when ordered by the District Court, leading the court to conclude that the Trust had waived further reimbursement. While further proceedings, in light of this opinion, may well have resulted in both positive and negative adjustments in the amount properly payable to the Trust, its waiver of further reimbursement, and Johnson’s lack of a challenge to the $37,497.48 ordered by 8 The Court cited to § 15-18-412(3), MCA, as authority for awarding interest that had accrued on the deposit during the litigation. See Hansen Trust, ¶¶ 41, 47. However, interest is not referenced in that provision, and authority for this award is more properly derived from § 15-18-412(7), MCA, which provides that “[i]n the quiet title action, the court has complete jurisdiction to fix the amount of taxes that should have been paid, including penalties, interest, and costs, and to determine all questions necessary in granting full relief . . . .” 15 the District Court, leads us to the conclusion that affirming the judgment as entered is appropriate. ¶24 Affirmed. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ JAMES JEREMIAH SHEA /S/ BETH BAKER

March 1, 2016

3bade945-38db-41fd-a1c1-75b3f66bdc32

Fink v. Meadow Lake Estates

2016 MT 108N

DA 15-0563

Montana

Montana Supreme Court

DA 15-0563 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 108N BARBARA FINK, Plaintiff and Appellant, v. MEADOW LAKE ESTATES HOMEOWNERS’ ASSOCIATION, MEADOW LAKE ESTATES HOMEOWNERS’ ASSOCIATION GOVERNING BOARD and WAYNE KELLY, an individual, Defendants and Appellees. APPEAL FROM: District Court of the Twenty-First Judicial District, In and For the County of Ravalli, Cause No. DV 14-423 Honorable John W. Larson, Presiding Judge COUNSEL OF RECORD: For Appellant: Barbara Fink, self-represented, Hamilton, Montana For Appellee: Martin S. King, Worden Thane P.C., Missoula, Montana Submitted on Briefs: March 16, 2016 Decided: May 10, 2016 Filed: __________________________________________ Clerk May 10 2016 Case Number: DA 15-0563 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 Appellant Barbara Fink (Fink), pro se, appeals from two orders entered by the Twenty-First Judicial District Court, Ravalli County, one granting summary judgment to the Defendants/Appellees (the Board), and the other awarding attorney fees to the Board. We affirm. ¶3 This case involves a residential development known as Meadow Lake Estates, located in Hamilton. The lots within the Meadow Lake Estates are subject to the Meadow Lake Estates Deed of Restriction (the Covenants). Pursuant to the Covenants, the Meadow Lake Estates Homeowners’ Association (HOA) was created, and all lot owners are members of the organization. The Covenants provide for a governing board of five members of the HOA to “prescribe rules and regulations” regarding the use and maintenance of the Meadow Lake Estates. Wayne Kelly, the individually named Defendant, sat on the Board for a period of time during which Fink alleges injury. Since 2003, the HOA has collected a $175 annual assessment on a flat per-lot basis to be used for road maintenance and other expenses associated with the development. 3 ¶4 In 2001, Fink purchased Lot 24 in the Meadow Lake Estates. In 2007, Fink subdivided Lot 24 into two separate parcels, and in 2009 returned the two parcels back to their original configuration. In 2010, Fink again subdivided her lot into two separate parcels, identifying them as Parcels 24-A-1 and 24-B-1. After doing so, Fink transferred Parcel 24-A-1 to her father. Then, Fink’s interest in Parcel 24-B-1, including her residence, was foreclosed upon and sold in 2012. In October 2013, Fink obtained a 1% interest in Parcel 24-A-1, with her father retaining a 99% interest in the property. ¶5 Fink initiated this action, alleging numerous claims against the Board, which the District Court summarized as follows: 1) failure to enforce easements per the Covenants; 2) failure to assess and collect road maintenance fees per the Covenants; 3) failure to maintain community roads per the Covenants; 4) failure to follow the Covenants’ voting procedures and fractionalization of member votes; 5) failure to follow corporate procedures as required by Montana law; 6) failure to allow inspection of records; 7) failure to maintain accurate financial records regarding income and expenditures; 8) failure to provide required financial information to HOA members; 9) failure to disclose to HOA members the details of a settlement of a legal action in which HOA was a party; 10) failure to file annual state and federal tax returns; 11) defamatory statements made about Fink; and 12) violations of the Montana Consumer Protection Act. After some discovery, the Board moved for summary judgment. After a hearing, the District Court granted the Board’s motion for summary judgment and the Board’s motion for an award of costs and attorney fees. In awarding fees, the District Court found Fink’s 4 “briefing and multitude of unsupported claims frivolous and meritless[,]” and determined that the Board was entitled to fees as a prevailing party under the Montana Consumer Protection Act. The District Court also held that the Board was entitled to fees because Fink had “unreasonably and vexatiously multiplied the proceedings by unsupported, contradictory claims[,]” and by her briefing, which exceeded the limits provided for in local rules. ¶6 We review the District Court’s granting of summary judgment de novo. See Grassy Mt. Ranch Owners’ Ass’n v. Gagnon, 2004 MT 245, ¶ 7, 323 Mont. 19, 98 P.3d 307. ¶7 Fink argues that summary judgment was improper because genuine issues of material fact existed, referencing the Board’s misconduct, lack of performance, and failure to adhere to the Covenants. However, the facts underlying these issues, including the provisions of the Covenants and subsequent amendments, were not in dispute, and we see no material factual issues remaining, rather only questions of interpretation of the Covenants. “Restrictive covenants are construed under the same rules of construction as other contracts: courts read declarations of covenants on their four corners as a whole, and terms are construed in their ordinary or popular sense.” Bordas v. Va. City Ranches Ass’n, 2004 MT 342, ¶ 24, 324 Mont. 263, 102 P.3d 1219 (citing Windemere Homeowners Ass’n, Inc. v. McCue, 1999 MT 292, ¶ 13, 297 Mont. 77, 990 P.2d 769). ¶8 Fink’s argument that the District Court failed to address her numerous other claims regarding the HOA’s practices is unavailing. While the District Court did not 5 provide a detailed discussion, the order mentions the wording of the Covenants. We conclude the District Court correctly determined that the Board’s practices, despite Fink’s disagreement with them, are permissible under the broad authority granted by the Covenants, entitling the Board to summary judgment on 1-4 of Fink’s claims. ¶9 The District Court also concluded that many of Fink’s “claims [under the Covenants] are barred by the tort and contract statute of limitations[,]” citing §§ 27-2- 202(1), and 27-2-204, MCA. Section 27-2-202(1), MCA, reads in pertinent part: “The period prescribed for the commencement of an action upon any contract, obligation, or liability founded upon an instrument in writing is within 8 years.” The District Court reasoned that, since 2003, Fink had been aware of the flat rate assessment, and had made numerous vocal challenges regarding the assessment, the HOA’s legal status, the Board’s authority, the procedures it employed to administer the Covenants, the Board’s decisions regarding road maintenance and use of the roads, and voting procedures since that time. Despite making numerous informal complaints during this period, Fink had failed to bring legal claims against the HOA until now. Fink argues that the HOA’s flat rate methodology did not harm her until 2013, “when the assessment began to exceed what she would owe pro rata,” but she does not provide evidence demonstrating how the flat rate assessment is calculated in a manner that is financially injurious. The District Court properly concluded that, without greater specificity in Fink’s pleadings, several of her claims regarding the enforcement of the Covenants are necessarily barred by the statute of limitations. 6 ¶10 Fink argues that the District Court erred by dismissing her claims related to HOA’s failure to meet non-profit corporate requirements. Section 35-2-214(1), MCA, provides that “the corporate existence begins when the articles of incorporation are filed by the secretary of state.” The HOA has never filed such documentation, and as such, is not a corporation. Fink argues that the HOA should be subject to corporate standards because it has held itself out to be a nonprofit, but we do not find this bare assertion persuasive. The HOA operates on a nonprofit basis but remains an unincorporated association, and the District Court correctly concluded that Fink “failed to create a genuine issue of material fact that the . . . HOA is a corporation and could have violated rules relating to nonprofit corporations.” ¶11 Fink argues that the District Court improperly granted summary judgment to the Board on her defamation claim. Fink video recorded a 2013 HOA meeting without asking permission of those present, an action that spurred a complaint to the Hamilton City Police Department, which investigated and sent a letter to Fink, Defendant/Appellee Wayne Kelly, and two other Board members on September 5, 2013. The letter stated that “[i]t is the determination of this office that there is insufficient probable cause to charge the offense of privacy in communications under [§] 45-8-213[, MCA,]” and indicated the Department would not pursue that matter further. The letter also stated that “[a]ny party who still feels aggrieved by the conduct . . . retains the right to . . . initiate a private civil lawsuit if they wish to pursue non-criminal legal remedies[,]” and noted “[t]he video surrendered to law enforcement as possible evidence or contraband is currently retained 7 in the custody of our office.” In support of her claim, Fink points to a set of minutes that the Board mailed to HOA members on September 26, 2013, which reported: After the meeting was adjourned and members were halfway out the door[,] it was announced that Ms. Fink had illegally videotaped the meeting without anyone’s permission. The Police Department has been notified and Ms. Fink has been visited by the Police and handed over the illegal tape. An investigation into this illegal act is ongoing. Fink argues that, because the Board had received the letter from the Police Department declining to prosecute by the time the minutes of the meeting were circulated, the uses of the term “illegal” in the minutes are libelous because they imply she performed a criminal act and “are considered libel ‘per se’ because they falsely state Barbara Fink committed a crime.” ¶12 “Libel is a false and unprivileged publication by writing, . . . 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. In order for defamatory words to be actionable, they “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.” McConkey v. Flathead Elec. Coop., 2005 MT 334, ¶ 45, 330 Mont. 48, 125 P.3d 1121 (brackets in original) (citing Wainman v. Bowler, 176 Mont. 91, 96, 576 P.2d 268, 271 (1978)). 8 ¶13 The published statements accused Fink of acting “illegally,” but did not state she had committed a crime, upon which she premises her claim. The Police Department’s letter informed the Board of the possibility of a civil liability suit as a form of redress for the incident, and the Board may have interpreted Fink’s actions as “illegal” on that basis. The statements did not necessarily imply Fink was committing a crime and, without more, are insufficient to support her libel claim. We conclude the District Court did not err in granting summary judgment on Fink’s 11th claim, defamation. ¶14 Fink argues that the District Court erred by concluding that “Defendants have not conducted any consumer transactions with Plaintiff, rendering her claim under the Consumer Protection Act meritless.” The Montana Consumer Protection Act prohibits “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce . . . .” Section 30-14-103, MCA. The Act defines a “consumer” as “a person who purchases or leases goods, services, real property, or information primarily for personal, family, or household purposes.” Section 30-14- 102(1), MCA. In her Complaint, Fink alleged that she “and other similarly situated HOA members purchased lots for personal, consumer-related purposes.” However, the District Court properly concluded that Fink had failed to establish that the HOA had conducted any consumer transaction with Fink in relation to purchasing her lot. While Fink argues on appeal that she also purchases “road maintenance” services from the HOA, she failed to raise this claim in the District Court, and we decline to address the new issue on appeal. The District Court did not err in granting summary judgment against Fink’s 9 claim under the Montana Consumer Protection Act, as she was not a “consumer” in relation to the HOA when purchasing her lot. ¶15 Finally, Fink argues the District Court erred by granting attorney fees to the Board. “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 (citations omitted). The District Court found that the Board was entitled to attorney fees under § 30-14- 133(3), MCA, for defending a claim under the Montana Consumer Protection Act, and under § 37-61-421, MCA, as a sanction for multiplying the proceedings in an unreasonable or vexatious manner. The District Court cited to Fink’s “unsupported, contradictory claims and filings” as reason for awarding attorney fees and costs, and reasoned that the HOA had hired an attorney in 2003 to address issues that Fink raised then, noting that “most [of the same issues] are the complaints currently before the Court.” We find no error of law or abuse of discretion in the District Court’s order awarding attorney fees. See Tripp v. Jeld-Wen, Inc., 2005 MT 121, ¶ 37, 327 Mont. 146, 112 P.3d 1018 (“When faced with a successful defendant, a district court should only award attorney fees [under the Act] ‘upon a finding that the plaintiff’s action was frivolous, unreasonable, or without foundation, even though not brought in subjective bad faith.’”) (citation omitted). 10 ¶16 The Board additionally requests attorney fees and costs for the appeal, citing the Covenants, which would allow a prevailing party to recover attorney fees and costs in an action to enforce them. However, the Board requested attorney fees in its Answer and Counterclaim based on Fink being a vexatious litigant, and pursuant to the Montana Consumer Protection Act in their motion for summary judgment. The District Court, in its Opinion and Order, cited to statutory criteria for awarding attorney fees and did not award them based on the Covenants. Although the language of the Covenants may entitle the Board to attorney fees, this was not the basis on which the Board sought attorney fees, nor the basis upon which they were granted by the District Court. In this circumstance, we have determined to affirm the District Court’s Order Granting Attorney’s Fees and Costs, but to decline to award fees and costs for this appeal. ¶17 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 District Court’s interpretation and application of the law were correct, and it did not abuse its discretion in any discretionary ruling. ¶18 Affirmed. /S/ JIM RICE We concur: /S/ JAMES JEREMIAH SHEA /S/ LAURIE McKINNON /S/ MICHAEL E WHEAT /S/ BETH BAKER

May 10, 2016

4115ba7d-d302-4d4d-aa9a-22d0f7d5934c

Bergum v. Musselshell County

2016 MT 47

DA 15-0328

Montana

Montana Supreme Court

DA 15-0328 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 47 BARBARA BROWN BERGUM, RICHARD BROWN, JEANNETTE STUDER, CAROLINE Y. HOUSTON, KATHY F. ARNOUX, ETHEL GENTRY, Plaintiffs and Appellants, v. MUSSELSHELL COUNTY, a quasi-municipal corporation; and the assignees, and creditors of the above named entity; and all other UNKNOWN persons claiming, or who might claim any right, title estate or interest in, or lien or encumbrance upon, the real property described in the complaint, or any thereof, adverse to plaintiffs’ ownership, or any cloud upon plaintiffs’ title thereto, whether such claim or possible claim be present or contingent, including any claim or possible claim of dower, inchoate or accrued, Defendants, Appellees and Cross-Appellants. APPEAL FROM: District Court of the Fourteenth Judicial District, In and For the County of Musselshell, Cause No. DV 07-28 Honorable Randal I. Spaulding, Presiding Judge COUNSEL OF RECORD: For Appellants: Jacquelyn M. Hughes, Hughes Law PLLC, Billings, Montana For Appellees and Cross-Appellants: R. Allan Payne, Marc G. Buyske, LL.M., Doney Crowley P.C., Helena, Montana Submitted on Briefs: January 20, 2016 Decided: March 1, 2016 Filed: __________________________________________ Clerk March 1 2016 Case Number: DA 15-0328 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Barbara Brown Bergum, Richard Brown, Jeannette Studer, Caroline Y. Houston, Kathy F. Arnoux, and Ethel Gentry (collectively Bergum) filed this action to quiet title in the Fourteenth Judicial District Court, Musselshell County, against Musselshell County. Both parties moved for summary judgment. The District Court granted judgment in favor of Musselshell County. Bergum appeals. Musselshell County cross-appeals from an order regarding attorney fees and costs. We affirm. ¶2 Bergum and Musselshell County raise several issues on appeal. We conclude the following issues are determinative: 1. Did the District court err in concluding that the statute of limitations in § 2214, RCM (1935), barred Bergum’s quiet title action? 2. Did the District Court err in denying Musselshell County its attorney fees under § 25-7-105, MCA? FACTUAL AND PROCEDURAL BACKGROUND ¶3 The controversy in this case centers on the disputed ownership of subsurface mineral rights to coal-rich land located in Musselshell County (Subject Real Property).1 The Subject Real Property has a lengthy and intricate history of ownership. Beginning in 1873, the United States Congress approved appropriations of vacant coal lands of up to 160 acres, provided the applicant was at least twenty one years old, a United States citizen, and paid $10 per acre.2 In 1908, both Lincoln Wescott and Annie Wescott 1 The legal description of the Subject Real Property is NW 1/4 W 1/2 SW 1/4, SE 1/4, SW 1/4, SW 1/4 SE 1/4 of Section 2, Township 6 North, Range 27 East P.M.M. 2 See 30 U.S.C.S. § 71 (LexisNexis, Lexis Advance through Pub. L. No. 114-15, approved December 28, 2015 (derived from Act of March 3, 1873, 17 Stat. 607 (1873)). 3 received patents for adjacent parcels of 160 and 160.58 acres, for which they paid $1,600 and $1,605.80 respectively. Also in 1908, Lincoln Wescott conveyed his patented 160 acres to Annie Wescott. This combined 320.58 acres comprises the Subject Real Property. ¶4 In 1935, Annie Wescott, now Annie Owen, conveyed the Subject Real Property to Charles Wilson. In 1936, county-assessed taxes on the Subject Real Property were not paid and the County Assessor listed the taxes as delinquent. The taxes remained delinquent until 1941 when Charles Wilson payed a portion of the taxes owed and redeemed the property. Critically, the Certificate of Redemption of Property Sold for Taxes, dated March 5, 1941, describes the Subject Real Property Charles Wilson redeemed and states “surface rights only.” From this point, the Subject Real Property’s subsurface rights (Subsurface Rights) and surface rights (Surface Rights) are severed. On the same day Charles Wilson redeemed the “surface rights only,” he conveyed his interest in the Subject Real Property and other property to E.K. Woodley and E.C. Woodley. ¶5 The Subsurface Rights were not redeemed in 1941. Subsequently, the unredeemed portion of the original tax delinquency, which began in 1936, remained delinquent until 1945 and was listed under Charles Wilson’s name. In 1945, Musselshell County applied for a tax deed. Affidavits of service, filed with both the Musselshell County Clerk and Recorder and the Treasurer’s office, verify that the County provided notice of an impending tax sale by publication and registered mail. In 1946, Musselshell County held a tax sale where it purchased the Subsurface Rights for $251.32. The 4 Treasurer of Musselshell County issued a tax deed to Musselshell County on February 5, 1946, for the Subject Real Property “less surface which has been redeemed.” ¶6 Regarding the Surface Rights after 1941, another tax delinquency occurred in 1945 and was listed under E.K. Woodley’s name. Also in 1945, E.K. Woodley and E.C. Woodley conveyed their interest in the Subject Real Property and other property to Francis Brown, Murry Brown, and Jim Brown. Still in 1945, Jim Brown and Murry Brown conveyed their interests to Francis Brown. In 1950, Francis Brown conveyed his interest in the Subject Real Property to Roy Gentry and Ethel Gentry. In this conveyance, Francis Brown attempted to retain a fifty percent mineral interest in the Subject Real Property (Mineral Right of Entry). ¶7 In 1955, Roy Gentry and Ethel Gentry filed an action to quiet title to the Subject Real Property. The title was quieted in their favor by decree recorded on January 6, 1956, but an exception was listed for Musselshell County’s interest in the Subsurface Rights. The decree stated Roy Gentry and Ethel Gentry “are entitled to a decree of this Court quieting title as to said real estate” except for “the interest of Musselshell County, Montana, in and to the minerals, including coal, pertaining to the [Subject Real Property], together with a right of entry on said lands.” Francis Brown, who claimed to have maintained a Mineral Right of Entry in the Subject Real Property, was not named as a party in this quiet title proceeding. ¶8 Finally, in 2007, Bergum initiated an action against Musselshell County to quiet title to the Subject Real Property as successor in interest to the Mineral Right of Entry Francis Brown purportedly retained when he transferred the Subject Real Property in 5 1950. Musselshell County and Bergum filed competing motions for summary judgment in 2012. On October, 3, 2012, the District Court held a hearing on the parties’ respective motions for summary judgment. Over two years later, on December 19, 2014, the District Court granted Musselshell County’s motion for summary judgment. On April 13, 2015, the District Court entered an order awarding costs, but not attorney fees. On April 28, 2015, the District Court entered its judgment in favor of Musselshell County from which Bergum appeals. Musselshell County cross-appeals from the District Court’s order regarding attorney fees and costs. STANDARD OF REVIEW ¶9 A district court’s grant of summary judgment is reviewed de novo. Omimex Can., Ltd. v. State, 2015 MT 102, ¶ 11, 378 Mont. 490, 346 P.3d 1125 (citation omitted). Summary judgment is appropriate where 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). “We review a district court’s conclusions of law for correctness.” Kiser v. Kiser, 2015 MT 315, ¶ 7, 381 Mont. 368, 360 P.3d 1139 (citation omitted). ¶10 If legal authority exists for a district court to award attorney fees, then a district court’s grant or denial of attorney fees is a discretionary ruling which we review for abuse of discretion. Swapinski v. Lincoln Cnty., 2015 MT 275, ¶ 8, 381 Mont. 138, 357 P.3d 329 (citation omitted). 6 DISCUSSION ¶11 1. Did the District court err in concluding that the statute of limitations in § 2214, RCM (1935), barred Bergum’s quiet title action? ¶12 At the District Court level, Bergum challenged the sufficiency of the tax deed procedure used by Musselshell County to purchase the Subject Real Property’s Subsurface Rights in 1946. The District Court, in its order granting Musselshell County summary judgment, concluded that “[e]ven if a problem existed with respect to Musselshell County’s tax deed procedure, the statute of limitations set forth in R.C.M. (1935) Section 2214 bars any claim by [Bergum] based on such problem(s).” ¶13 Bergum argues the District Court erred in applying § 2214, RCM (1935), to conclude her quiet title action was barred. Bergum claims that § 2214, RCM (1935), by its own language, does not apply for two alternative reasons; either because 1) “no taxes were delinquent on said lands” or 2) “redemption had been made from said tax sale.” Section 2214, RCM (1935). Essentially, Bergum argues the taxes assessed on the Subject Real Property were unconstitutional and, because they were never legally assessed, could never have become delinquent. Alternatively, Bergum argues that allowing a taxpayer to redeem only a portion of tax-delinquent property is unconstitutional and, therefore, asserts that Charles Wilson’s redemption of the property in 1941 effectively redeemed the entire Subject Real Property, not just the “surface rights only.” Under either alternative, Bergum maintains that § 2214, RCM (1935), does not apply or bar her quiet title action. ¶14 In response, Musselshell County argues § 2214, RCM (1935), applies and bars Bergum’s action because the taxes assessed on the Subject Real Property were 7 constitutional at the time they were assessed under Article 12, Section 3, of the 1889 Montana Constitution, which required mining claims be taxed. Further, Musselshell County points to § 2211, RCM (1935), entitled “Redemption from tax sales—piecemeal redemption” as support for its proposition that piecemeal redemption was constitutional and statutorily authorized. The District Court agreed with Musselshell County and concluded § 2214, RCM (1935), barred Bergum’s current quiet title action. We agree with the District Court and Musselshell County. ¶15 The law applicable at the time the taxes were assessed and the sale occurred must be used to determine the validity of the taxes and the procedure used. See Fariss v. Anaconda Copper Mining Co., 31 F. Supp. 571, 576 (D. Mont. 1940); King v. Rosebud Cnty., 193 Mont. 268, 275, 631 P.2d 711, 715 (1981) (The court looked to statutes in force in 1939 to determine the validity of tax sale proceedings which occurred in 1939). Here, this Court will look to the constitution and statutes in force at the time the challenged assessments and tax sale occurred. ¶16 Section 2214, RCM (1935), entitled “Of what deed is evidence—actions concerning,” provides that a duly acknowledged or proved deed is conclusive evidence of all other proceedings from the tax assessment up to the execution of the deed. Further it reads, in pertinent part: [N]o action can be maintained to set aside or annul a tax deed or to assert a title hostile to a tax deed upon any ground whatever, whether on the ground that said deed, or any prior proceeding, was irregular or void, other than that the deed was void because no taxes were delinquent on said lands, or because redemption had been made from said tax sale, unless the action is commenced within one year from and after the date of the issuance of said tax deed. 8 Section 2214, RCM (1935). Section 2214, RCM (1935), sets out a one-year statute of limitations and outlines two exceptions to its application. The one-year limitations does not bar an action if the “deed was void because no taxes were delinquent on said lands,” or “because redemption had been made from said tax sale.” Section 2214, RCM (1935). ¶17 In its order granting Musselshell County summary judgment, the District Court concluded that the 1946 deed was not void because the taxes assessed on the property and partial redemption of the “surface rights only” were proper. It follows that if the two exceptions to the statute of limitations do not apply, § 2214, RCM (1935), applies, and bars Bergum’s claim. If the District Court’s conclusion that the exceptions do not apply is correct, Bergum’s predecessors in interest had until February 5, 1947, or one year from the issuance of the tax deed to Musselshell County, to initiate an action to quiet title to the Subject Real Property’s Subsurface Rights. Instead, Bergum initiated this action by filing a complaint to quiet title on April 4, 2007, or over 60 years after the deadline imposed by § 2214, RCM (1935). We review the District Court’s conclusions that the exceptions of § 2214, RCM (1935), do not apply for correctness. We address their application in turn: a. Exception 1: “deed was void because no taxes were delinquent on said lands” ¶18 Bergum relies on Northern Pacific Railway v. Musselshell County, 54 Mont. 96, 169 P. 53 (1917), to support her contention that the taxes Musselshell County assessed on the Subsurface Rights after the Surface Rights were redeemed, from 1941 to 1945, were unconstitutional and, therefore, void. Bergum contends Northern Pacific Railway supports her proposition that “taxation of an undeveloped mineral estate was 9 unconstitutional.” We disagree. Article 12, Section 3, of the 1889 Montana Constitution states: All mines and mining claims, both placer and rock in place, containing or bearing gold, silver, copper, lead, coal or other valuable mineral deposits, after purchase thereof from the United States, shall be taxed at the price paid the United States therefor, unless the surface ground, or some part thereof, of such mine or claim, is used for other than mining purposes, and has a separate and independent value for such other purposes, in which case said surface ground, or any part thereof, so used for other than mining purposes, shall be taxed at its value for such other purposes. This constitutional provision was interpreted by the Court in Northern Pacific Railway and Hinz v. Musselshell County, 82 Mont. 502, 267 P. 1113 (1928). It was interpreted again in Superior Coal Co. v. Musselshell County, 98 Mont. 501, 41 P.2d 14 (1935), which, after discussing both Northern Pacific Railway and Hinz, held that “one who has purchased a mining claim from the United States is estopped from denying that it is a mining claim.” Superior Coal Co., 98 Mont. at 514, 41 P.2d at 20. Further, “[f]or the purpose of taxation, coal mining claims, lode mining claims and placer mining claims alike are governed by the provisions of the Constitution.” Superior Coal Co., 98 Mont. at 514, 41 P.2d at 20. The Court held that the taxable value of property is appropriately set by the constitution at the price paid for the property. Superior Coal Co., 98 Mont. at 515, 41 P.2d at 20. The risk that the property is not as valuable as the patentee paid, or worthless, is immaterial to the constitutionality of this scheme of taxation. Superior Coal Co., 98 Mont. at 515, 41 P.2d at 20. Finally, the Court concluded that the “surface ground by itself is not taxed at any value; it is part of the mine; it is presumed that it has no value except for use in working the mine. When the surface ground of a mining 10 claim, or some part thereof is used for some purpose other than mining, and the owner of the mining claim sells that surface . . . he is still the owner of the mining claim; all he has sold is the newly created estate ‘which in the eye of the law, is regarded as independent of the original estate.’” Superior Coal Co., 98 Mont. at 521, 41 P.2d at 23. ¶19 Here, Bergum does not dispute that Lincoln Wescott and Annie Wescott applied for and received coal patents for lands that now constitute the Subject Real Property. Applying Superior Coal Co. to the case at bar, Bergum is estopped from denying the Subject Real Property is a mining claim and can be taxed as such. Lincoln Wescott and Annie Wescott paid the United States a combined $3,205.80 for the Subject Real Property and the County Assessor gave it a taxable value of $3,207. Superior Coal Co. held that the taxable value should be set by what was paid for the mining claim and is constitutionally assessed on the minerals, even if undeveloped. Additionally if the surface of a mining claim is sold, it is legally separate, and may also be taxed. The taxes assessed on the Subsurface Rights from 1941 to 1945 were constitutional and valid. The validity of the taxes assessed disproves Bergum’s argument that no taxes were delinquent. Instead, the taxes were validly assessed and delinquent because they were unpaid. The first exception to § 2214, RCM (1935), does not apply. b. Exception 2: “redemption had been made from said tax sale.” ¶20 Bergum argues that Musselshell County’s practice, which allowed Charles Wilson to redeem only a portion of the Subject Real Property in 1941, was illegal. Bergum contends that Charles Wilson’s redemption in 1941 was for the entire Subject Real Property, not just for the “surface rights only,” as the redemption document states. 11 Bergum claims that the Subject Real Property was fully redeemed in 1941 and, as a result, the tax deed issued to Musselshell County in 1946 for the Subsurface Rights was invalid. A coal patent “carries with it the title to the surface included within the lines of the mining location, as well as to the land beneath the surface.” Hansard Mining, Inc. v. Mclean, 2014 MT 199, ¶ 20, 376 Mont. 48, 335 P.3d 711; citing Deffeback v. Hawke, 115 U.S. 392, 406, 6 S. Ct. 95, 101 (1885). At the time Charles Wilson partially redeemed the Subject Real Property in 1941, § 2211 RCM (1935), entitled “Redemption from tax sale—piecemeal redemption,” explicitly authorized property owners to partially redeem their property from a tax sale. If the redeemer pays a portion of the tax owed, “the county treasurer shall apportion the tax for the portion sought to be redeemed.” Section 2211, RCM (1935). Also, Superior Coal Co., addressed and clarified that it is possible to divide mining claims and subsequently create two independent legal estates—one for the surface and one for the subsurface. Superior Coal Co., 98 Mont. at 521, 41 P.2d at 23. Charles Wilson’s redemption in 1941 stated that it was partial, for the “surface rights only.” Piecemeal redemption was specifically authorized. The second exception to § 2214, RCM (1935), does not apply. ¶21 We conclude that the District Court correctly determined that neither exception to § 2214, RCM (1935), applied to Bergum’s current quiet title action. Therefore, the District Court also correctly determined that the one-year statute of limitations of § 2214, RCM (1935), applied and barred Bergum’s claim. 12 ¶22 2. Did the District Court err in denying Musselshell County its attorney fees under § 25-7-105, MCA? ¶23 On December 7, 2011, Bergum offered five dollars in exchange for Musselshell County’s consent to quiet title in her favor. On December 21, 2011, Musselshell County counter offered “a one-pound lump of coal, suitable for placement in a Christmas stocking” and to forgo recovery of its attorney fees and costs incurred during litigation in exchange for Bergum dismissing her action to quiet title. On appeal, Musselshell County contends that, under § 25-7-105, MCA, it was entitled to attorney fees, totaling $82,374, because of this counter offer. That statute reads, in pertinent parts: 1) At any time more than 60 days after service of the complaint and more than 30 days before the trial begins, any party may serve upon the adverse party a written offer to settle a claim for the money or property or to the effect specified in the offer. . . . If the final judgment is less favorable to the offeree than the offer, the offeree shall pay the costs incurred by the offeror after the offer was made. . . . . . . 3) For the purposes of this section, costs include reasonable attorney fees. 4) This section applies only to an action or claim for which the amount contained in a pleading is $50,000 or less, exclusive of costs, interest, and service charges, and the action or claim: a) arises from contract or breach of contract, other than a contract of insurance, bond, surety, or warranty; or b) involves real property. Section 25-7-105, MCA (emphasis added). ¶24 As an initial matter, the parties dispute whether Musselshell County’s counter offer was a valid offer or whether it was more favorable to Bergum than the final judgment. Bergum argues that Musselshell County’s letter did not constitute a legitimate offer. Bergum also argues that a one-pound lump of coal, shared between Barbara Brown 13 Bergum, Richard Brown, Jeannette Studer, Caroline Y. Houston, Kathy F. Arnoux, and Ethel Gentry is not a “more favorable” result than the final judgment, which quieted title in Musselshell County’s favor. In her briefing to this Court, Bergum claims that a one-pound lump of coal is worth $0.0058, and that she and the five other appellants would receive $0.000967 each. Bergum argues that offering six people half of a penny to share is not more favorable than the final judgment and should not be the basis for an award of attorney fees. ¶25 We decline to address whether Musselshell County’s offer was legitimate, as the District Court’s decision did not rest upon these grounds. We nevertheless observe that the portion of Musselshell County’s offer, relating to a one-pound lump of coal, strikes us as unprofessional and inconsistent with what we would expect from a public entity. Regardless of whether Musselshell County’s offer was valid or a more favorable result to Bergum than the final judgment, § 25-7-105(4), MCA, only allows attorney fees if the amount contained in the pleading is $50,000 or less. Without considering the legitimacy of Musselshell County’s offer, the District Court concluded that Musselshell County had “failed to establish that the value of the subject property is less than $50,000 as required by Mont. Codes [sic] Ann. § 25-7-105 (3) and (4).” As proof of the amount contained in Bergum’s complaint to quiet title to the Mineral Right of Entry in the Subject Real Property, Musselshell County offered a copy of a coal lease which had been executed on a parcel of land adjacent to the Subject Real Property. The District Court held that this evidence “is, without more, insufficient to establish that the value of the entire subsurface estate is worth less than $50,000.” 14 ¶26 Musselshell County argues the District Court erred by failing to hold an evidentiary hearing to determine whether the value contained in Bergum’s complaint is worth less than $50,000. Bergum counters that Musselshell County never requested the District Court hold a hearing. Musselshell County relies on several pages of its pleading entitled Response in Opposition to Motion to Have Memorandum of Costs Taxed and Reply in Support of Memorandum of Costs as evidence of its contention that “[t]he necessity of a hearing was made known to the District Court.” Upon review, that pleading notified the District Court that if attorney fees were awarded, a hearing would be required to determine whether the attorney fees were “reasonable.” However, the District Court did not award attorney fees, thus, under Musselshell County’s own reasoning, a hearing was not required. We conclude that the District Court’s failure to hold an evidentiary hearing on the amount in the complaint was not in error because Musselshell County did not request such a hearing. Instead, the District Court relied on evidence Musselshell County provided to conclude that it had failed to prove the amount contained in Bergum’s complaint was less than $50,000. ¶27 Musselshell County introduced insufficient evidence to establish that the requirements of § 25-7-105(4), MCA, were met. We conclude that the District Court did not abuse its discretion in denying Musselshell County its attorney fees under § 25-7-105, MCA. 15 CONCLUSION ¶28 Affirmed. /S/ LAURIE McKINNON We Concur: /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ JAMES JEREMIAH SHEA Justice Beth Baker, concurring. ¶29 I agree that the District Court should be affirmed on both issues, but for different reasons. ¶30 First, I agree that the one-year limitation period prescribed in § 2214, R.C.M. (1935) bars the action because neither exception applies. I do not believe that it is necessary, however, to analyze the constitutionality of Musselshell County’s actions in the 1940s in order to determine whether Bergum’s claim is barred. As the Court notes, § 2214 provided in pertinent part that no action can be maintained to set aside or annul a tax deed . . . upon any ground whatever, whether on the ground that said deed, or any prior proceeding, was irregular or void, other than that the deed was void because no taxes were delinquent on said lands, or because redemption had been made from said tax sale, unless the action is commenced within one year from and after the date of the issuance of said tax deed[.] ¶31 Bergum claims advantage of the first exception on the ground that “no taxes were delinquent” on the property. But her allegation that the tax deed was void is premised on the County’s allegedly unconstitutional action in retaining the mineral rights to the 16 property when it was reclaimed in 1941. Bergum argues that the 1941 certificate of redemption could not legally convey to Wilson the “surface rights only.” Bergum’s challenge is to the procedure by which the surface rights and mineral rights were severed and to the County’s authority to tax the two interests separately. ¶32 The statute’s reference to taxes not being delinquent on the property clearly allowed a property owner to challenge the taxing authority’s determination that the property owner failed to pay assessments levied against the property. The property owner’s challenge to the legality of the assessments in the first place is not the same thing as a claim that the owner paid the taxes assessed. When interpreting the language of the statute, the Court “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. Further, we recognize that “courts should avoid addressing constitutional issues whenever possible.” Sunburst Sch. Dist. No. 2 v. Texaco, Inc., 2007 MT 183, ¶ 62, 338 Mont. 259, 165 P.3d 1079. I would conclude that a taxpayer’s challenge to the constitutionality of a county’s tax assessment is not within the first exception to § 2214, R.C.M. (1935). For the same reason, the second exception does not save Bergum’s claims, which are premised on the alleged illegality of the County’s action in allowing Wilson to redeem only the surface rights. ¶33 I would therefore conclude that Bergum’s claim is barred by the one-year limitation period without reaching the merits of Bergum’s constitutional arguments about separate taxation of surface and mineral interests or redemption of surface rights only. “We may affirm a district court decision that is correct regardless of the district court’s 17 reasoning in reaching its decision.” PacifiCorp v. State, 2011 MT 93, ¶ 54, 360 Mont. 259, 253 P.3d 847. ¶34 With respect to Issue Two, I agree that the denial of attorney’s fees to the County was correct. In my view, the County’s argument that it made a valid settlement offer for purposes of § 25-7-105, MCA, is disingenuous. Though the County casts its offer as a benefit to the Plaintiffs that simply was made with “poetic wrapping and literary allusion,” no reasonable mind could conclude that the offer of a lump of coal made days before Christmas was a good faith settlement offer. I would conclude that in order to obtain the attorney’s fee benefit afforded by the statute, a party must make a legitimate, good faith offer of settlement. The County’s “offer” in this case does not by any measure meet that standard, and was especially in poor taste when coming from a public entity. /S/ BETH BAKER

March 1, 2016

5c691d82-e8fc-4e6f-9ae6-c3b76a21ad95

Ellenburg v. Wilson et al.

2016 MT 187N

DA 16-0057

Montana

Montana Supreme Court

DA 16-0057 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 187N MICHAEL ELLENBURG, Plaintiff and Appellant, v. T. WILSON, L. MURPHY, D. PENTLAND, K. COZBY, L. MIHELICH, V. HOSCHIED, et al. Defendants and Appellees. APPEAL FROM: District Court of the Third Judicial District, In and For the County of Powell, Cause No. DV-14-11 Honorable Ray Dayton, Presiding Judge COUNSEL OF RECORD: For Appellant: Michael Ellenburg, Self-Represented, Deer Lodge, Montana For Appellee: Ira Eakin, Special Assistant Attorney General, Montana Department of Corrections, Helena, Montana Submitted on Briefs: June 15, 2016 Decided: August 2, 2016 Filed: __________________________________________ Clerk 08/02/2016 Case Number: DA 16-0057 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 Michael Ellenburg appeals a memorandum and order of the Third Judicial District Court, Powell County, granting a “Motion to Enforce Settlement Agreement” filed by Montana Department of Corrections (DOC) employees Tom Wilson, Linda Murphy, David Pentland, Ken Cozby, Leonard Mihelich,1 and Vera Hoschied (collectively, “DOC Defendants”). We address whether the District Court properly granted the DOC Defendants’ motion. We affirm. ¶3 Ellenburg is an inmate at the Montana State Prison (MSP). In January 2014, Ellenburg filed a complaint against the DOC Defendants, claiming, among other things, that he was denied adequate due process in prison disciplinary proceedings, adversely affecting his chances for parole. The DOC Defendants denied Ellenburg’s allegations. On June 2, 2015, the parties entered into a settlement agreement, which provided: If Plaintiff maintains one hundred twenty (120) days of accumulated clear conduct within [MSP] a designated [MSP] official will submit a parole plan for Plaintiff which requests an in person appearance for Plaintiff before the Montana Board of Pardons and Parole [(Board)], . . . The parole plan will contain the following language: “The inmate’s past year of discipline is not relevant to the inmate’s likely success on parole, and for purposes of this plan will be disregarded and will not be discussed.” Further, the parole 1 The District Court case caption misspelled “Mihelich.” We have corrected this error on appeal. 3 plan will not contain any information concerning Plaintiff’s disciplinary record during the preceding twelve months. [MSP] will not issue any frivolous or unwarranted write ups to the Plaintiff. The settlement agreement further provided that Ellenburg would dismiss four pending lawsuits against the DOC Defendants, the DOC, MSP, and other employees of the DOC or MSP.2 Ellenburg accumulated 120 days of clear conduct on July 8, 2015. He appeared before the Board on August 27, 2015. The Board denied Ellenburg’s parole request but endorsed him for placement at a pre-release center. In August and September 2015, Ellenburg filed documents in the District Court alleging that the DOC Defendants breached the settlement agreement. In response, the DOC Defendants filed a motion to enforce the agreement by requiring Ellenburg to dismiss his pending lawsuits. The District Court granted the DOC Defendants’ motion, interpreting it as a motion for summary judgment. ¶4 “We review summary judgment orders de novo.” Mont. Dep’t of Revenue v. Priceline.com, Inc., 2015 MT 241, ¶ 6, 380 Mont. 352, 354 P.3d 631. Summary judgment is appropriate when the moving party demonstrates an absence of a genuine issue of material fact and entitlement to judgment as a matter of law. M. R. Civ. P. 56(c)(3). “Settlement agreements are contracts,” Murphy v. Home Depot, 2012 MT 23, ¶ 8, 364 Mont. 27, 270 P.3d 72, and “[t]he existence of a valid express contract is a question of law,” which we review for correctness. Lockhead v. Weinstein, 2003 MT 360, ¶ 7, 319 Mont. 62, 81 P.3d 1284. 2 These cases include Powell County cause numbers DV 14-11, DV 15-13, DV 15-17, and United States District Court cause number CV-00080-DLC-JTJ. 4 ¶5 Ellenburg maintains on appeal that he is not required to dismiss his pending lawsuits because the DOC defendants breached the settlement agreement in various ways. First, Ellenburg contends that the DOC Defendants breached the agreement by not scheduling him to appear before the Board in July. The settlement agreement does not specify a date or time frame for Ellenburg’s appearance before the Board. Pursuant to § 28-3-601, MCA, which governs the interpretation of contracts, “[i]f no time is specified for the performance of an act required to be performed, a reasonable time is allowed.” Via email, former DOC staff attorney McKenzie McCarthy informed Ted Mizner, the mediator who presided over the settlement agreement, that Ellenburg could not appear before the Board in July because, by the time he accumulated his 120 days of clear conduct, the Board’s schedule was set for the entire month. McCarthy indicated that the Board needed to set the schedule in advance to allow time to prepare for the hearings. Therefore, the earliest that Ellenburg could appear before the Board was August. Ellenburg does not dispute these facts. Given the Board’s need to adhere to scheduling procedures, Ellenburg’s hearing was scheduled for the earliest possible month. His appearance before the Board thus was within a reasonable time of his accumulation of 120 days of clear conduct. ¶6 Ellenburg next contends that the DOC Defendants violated the settlement agreement because a parole report submitted by Meaghan Mulcahy, a parole analyst for the Board, provides: “Since his last appearance, Ellenburg has accrued numerous write ups but is appearing today with clear conduct.” According to an affidavit filed by McCarthy, Mizner informed Ellenburg that the DOC could not order the Board to take 5 any action or bind the Board as part of the settlement discussions. A separate parole report filed by Irl Lambertson, Ellenburg’s prison case manager, provides: “The inmate’s past year of discipline is not relevant to the inmate’s likely success on parole, and for purposes of this plan will be disregarded and will not be discussed.” The most recent information regarding Ellenburg’s disciplinary record contained in Lambertson’s report is from May 2014. Lambertson’s report thus conforms to the settlement agreement’s requirement that “a designated [MSP] official will submit a parole plan,” containing specific language, and not containing any information concerning Ellenburg’s disciplinary record during the preceding twelve months. ¶7 Ellenburg also contends that the settlement agreement does not contain a certificate of service. However, contracts do not need to be formally served to be legally binding. Rather, “[a] party to a settlement agreement is bound if he or she manifested assent to the agreement’s terms . . . .” Murphy, ¶ 8. Formal service thus was not required for the settlement agreement to be valid and binding. ¶8 Finally, Ellenburg contends that MSP officials issued frivolous write-ups, and that the DOC Defendants evaded discovery requests. However, Ellenburg does not cite to any allegedly frivolous write-ups in the record, as required by M. R. App. P. 12(1)(d). Moreover, as the DOC Defendants point out, whatever disciplinary write-up Ellenburg may have received was disregarded by MSP officials for purposes of calculating Ellenburg’s 120 days of clear conduct and was not included or mentioned in his parole report. Similarly, Ellenburg does not specify how the DOC Defendants allegedly evaded discovery requests, and does not cite to the record to support this argument. A review of 6 Ellenburg’s appellate brief thus fails to clarify what specific write-ups or discovery responses he takes issue with. Accordingly, we will not consider these arguments. See M. R. App. P. 12(1)(d). ¶9 Ellenburg clearly manifested intent to be bound by the settlement agreement when he signed it, and again when he filed suit alleging the DOC Defendants breached it. Even if Ellenburg now contends that the settlement agreement is not binding on him, “[a] party’s latent intention not to be bound does not prevent the formation of a binding contract.” Hetherington v. Ford Motor Co., 257 Mont. 395, 399, 849 P.2d 1039, 1042 (1993). The District Court correctly found that a valid, enforceable contract existed between Ellenburg and the DOC Defendants. See Murphy, ¶ 8. Ellenburg has not shown that the DOC Defendants breached any of the settlement agreement’s terms. The DOC Defendants have shown that Ellenburg has not dismissed his pending lawsuits as required by the settlement agreement. The District Court did not err in enforcing the settlement agreement. ¶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’s interpretation and application of the law were correct, and its findings of fact are not clearly erroneous. We affirm. /S/ JAMES JEREMIAH SHEA 7 We Concur: /S/ JIM RICE /S/ PATRICIA COTTER /S/ BETH BAKER /S/ LAURIE McKINNON

August 2, 2016

bb380655-cdfc-4c9f-a770-b58b05f695c3

Matter of P.V. YINC

2016 MT 79N

DA 15-0421

Montana

Montana Supreme Court

DA 15-0421 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 79N IN THE MATTER OF: P.V., A Youth in Need of Care. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. BDN-14-048 Honorable Thomas M. McKittrick, Presiding Judge COUNSEL OF RECORD: For Appellant: Jennifer A. Giuttari, Law Office of Jennifer A. Giuttari, PLLC, Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Katie F. Schulz, Assistant Attorney General, Helena, Montana John W. Parker, Cascade County Attorney, Valerie M. Winfield, Deputy Cascade Attorney, Great Falls, Montana Submitted on Briefs: February 24, 2016 Decided: March 29, 2016 Filed: __________________________________________ Clerk March 29 2016 Case Number: DA 15-0421 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 F.V. (Father) appeals an order of the Eighth Judicial District Court, Cascade County, terminating his parental rights to his son, P.V. We affirm. ¶3 P.V. is an Indian child under the Indian Child Welfare Act (ICWA). P.V. is affiliated with the Blackfeet Tribe of Montana. On January 16, 2014, the District Court granted Father full custody of P.V. after terminating P.V.’s biological mother’s rights. On February 5, 2014, a Department of Public Health and Human Services (Department) child protection specialist (CPS) met Father at P.V.’s daycare. Father told the CPS that he was protecting P.V. from a Great Falls cult of police and probation staff. After other alarming statements, Father stated methamphetamine makes spirits more clear. Father accompanied the CPS to a pre-release center for a drug test and tested negative for all substances. Father continued to express bizarre statements to the CPS the next day. ¶4 On February 6, 2014, the Department received a report that Father had taken methamphetamine. The report also stated that other adults, under the influence of narcotics, were in the same house and taking care of P.V. On February 7, 2014, four- year-old P.V. tested positive for methamphetamine. 3 ¶5 Based on Father’s erratic mental stability, coupled with his admission to recent methamphetamine use, the District Court granted the Department Emergency Protective Services and Temporary Legal Custody. On March 17, 2014, Father appeared with counsel at a show cause hearing, where he stipulated to adjudicating P.V. as a youth in need of care and stipulated that the Department and the State met the ICWA standards in this matter. He also concurred with P.V.’s placement with his paternal grandmother. Because of his grandmother’s health, P.V. has moved back and forth throughout these proceedings between staying with his paternal grandmother and his foster family. Due to Father’s own health issues, Father was not present for his dispositional hearing on April 3, 2014, where the District Court granted the Department a six-month period of temporary legal custody and approved a treatment plan for Father. ¶6 On April 8, 2014, the State arrested Father after charging him with felony criminal endangerment of a child. The District Court found Father unfit to stand trial for mental competency reasons. Father then spent April through October 2014 either in jail or the Montana State Hospital (MSH). MSH doctors determined Father suffered from Post-Traumatic Stress Disorder and was in remission for Amphetamine Induced Psychosis. ¶7 Father met with a licensed addictions counselor before and after his time in MSH. Father also attended a relapse prevention group the counselor recommended. The Department held a group meeting with Father’s relatives and the Blackfeet Tribe to discuss Father’s mental health and chemical dependency, and also to determine how to 4 keep him in P.V.’s life. MSH discharged Father in October 2014. After his discharge, Father reengaged with his chemical dependency and mental health counselor. ¶8 After Father’s October 2014 discharge from MSH, he relapsed by drinking during Christmas and again in January 2015. Father also missed two urinalysis tests in February 2015. After these relapses, the social worker who had been working with Father counseled him on strategies for establishing and maintaining sobriety. ¶9 On March 20, 2015, the Department filed a petition for termination of Father’s parental rights. The District Court granted the petition after a termination hearing on April 23, 2015. During the termination hearing, the State presented six witnesses who testified, in part, about the Department’s active efforts to prevent the breakup of the Indian family. Those witnesses included Father’s chemical dependency and mental health counselor, Father’s parenting counselor, P.V.’s individual counselor, the State’s CPS acting as this matter’s caseworker, an ICWA expert, and P.V.’s foster mother. ¶10 On May 7, 2015, the District Court issued its findings of fact, conclusions of law, and order granting the Department’s petition to terminate Father’s parental rights and granting the Department custody of P.V. The District Court found that the Department provided the following services to the family: (1) counseling for Father; (2) counseling for P.V.; (3) parenting classes for Father; (4) medication for Father; and (5) a treatment plan. The District Court stated its findings of fact were “made by proof beyond a reasonable doubt.” The District Court concluded that terminating Father’s parental rights was proper, in part, because “returning [P.V.] to the custody of the Birth Father would likely result in serious emotional and/or physical harm to the child.” 5 ¶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 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 (citations 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. A district court’s application of law to a case’s facts is a legal conclusion we review for correct interpretation of the law. K.B., ¶ 18. ¶12 ICWA imposes a heightened standard of scrutiny on the termination of parental rights to an Indian child. In re H.T., 2015 MT 41, ¶ 42, 378 Mont. 206, 343 P.3d 159. Under ICWA, the court must determine “beyond a reasonable doubt . . . 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” before terminating parental rights. 25 U.S.C. § 1912(f). A party seeking to terminate parental rights to an Indian child “shall satisfy the court that active efforts have been made to provide remedial services and rehabilitative programs designed to prevent the breakup of the Indian family and that these efforts have proved unsuccessful.” 25 U.S.C. § 1912(d). 6 ¶13 Father contends the Department did not comply with ICWA’s “active efforts” requirement. Specifically, Father argues that the Department did not continue its “active efforts” during his time at MSH, nor after his discharge and up until the termination hearing. He argues that the District Court, and this Court, should not consider the four years of “active efforts” he received from the Department stemming from a 2011 proceeding also involving Father and P.V.; rather, he contends we should confine our analysis only to the most recent events.1 ¶14 Although § 1912(d) does not set forth detailed criteria to determine whether the Department made “active efforts,” it requires that the Department do more than simply give a parent a treatment plan and wait for him to complete it. In re J.S., 2014 MT 79, ¶ 25, 374 Mont. 329, 321 P.3d 103 (citing In re A.N., 2005 MT 19, ¶ 23, 325 Mont. 379, 106 P.3d 556). In J.S., we recognized that a “common sense” construction of the term “active efforts” requires “that ‘timely affirmative steps be taken to accomplish the goal which Congress has set: to avoid the breakup of Indian families whenever possible by providing services designated to remedy problems which might lead to severance of the parent-child relationship.’” J.S., ¶ 25 (quoting In re G.S., 2002 MT 245, ¶ 36, 312 Mont. 108, 59 P.3d 1063). In determining whether the Department has made active efforts, a district court may consider “a parent’s demonstrated apathy and indifference to 1 Father also asks this Court to analyze the Department’s “active efforts” by applying the Guidelines for State Courts and Agencies in Indian Child Custody Proceedings, 80 Fed. Reg. 10146, promulgated in 2015. Father did not request the District Court to consider the 2015 Guidelines in rendering its decision, and we decline to consider them on appeal. Generally, this Court will not review an issue raised for the first time on appeal. H.T., ¶ 14 (citing In re D.K.D., 2011 MT 74, ¶ 16, 360 Mont. 76, 250 P.3d 856). 7 participating in treatment,” as well as “actions taken by the State to provide services for the other parent and the child.” J.S., ¶ 25 (citations omitted). Further, “a parent’s incarceration may limit the remedial and rehabilitative services that the [Department] can make available to the parent to prevent the breakup of the Indian family.” In re D.S.B., 2013 MT 112, ¶ 15, 370 Mont. 37, 300 P.3d 702. We do not excuse the State’s obligation to make active efforts if a parent is incarcerated, but “will not fault the [Department] if its efforts are curtailed by the parent’s own criminal behavior.” D.S.B., ¶ 15. ¶15 D.S.B. provides an example of what can satisfy the “active efforts” determination. In D.S.B., the Department provided the father with “treatment plans, assistance of a CPS, supervised visitation, drug testing, chemical dependency treatment, counseling, referrals to treatment providers, in-home services, and parenting coaching.” D.S.B., ¶ 16. The Department also provided services to the Indian children at issue in the form of counseling and attempts to place them with Indian family members. D.S.B., ¶ 17. We affirmed the District Court’s determination that the Department satisfied its “active efforts” requirement. D.S.B., ¶ 17. ¶16 Similar to D.S.B., the Department in this case provided sufficient evidence to prove, beyond a reasonable doubt, that it used “active efforts” to provide services designed to prevent the breakup of the Indian family. In addition to a treatment plan, Father’s counselor from Discovery Family Counseling Services testified that he “provided two separate parenting classes for [Father] over the last few years . . . help[ed] [Father] individually to apply the Circle of Security parenting concepts and just make 8 sure [Father] understood those . . . [and] provided supervised visits with [P.V.] to work on communications and interactions with him.” The CPS testified to the “active efforts” Father received after his discharge from MSH. She “made referrals for [Father] to have assessments completed,” and continued to work with Father after his MSH discharge. She also testified that in September 2014 she “held a meeting in our office with [Father’s] family to support him, to try to keep his family involved with this child.” The participants included several relatives and a Blackfeet Tribe representative who tried “to determine how to support [P.V.] being with his family.” The ICWA expert testified that she believed the Department made active efforts to reunify P.V. with Father. ¶17 Active efforts in this case were also directed toward the family, not just Father. The Department repeatedly attempted to place P.V. with his paternal grandmother, while also facilitating a relationship between the grandmother and P.V.’s foster family. The Department also provided individual counseling for P.V. to help address his mental and emotional health issues. ¶18 Although the District Court did not specifically address “active efforts,” the record contains sufficient evidence for a rational trier of fact to conclude beyond a reasonable doubt that the Department made “active efforts” to provide remedial services and rehabilitative programs designed to prevent the breakup of the Indian family. In light of the Department’s “active efforts” and compliance with the rest of ICWA’s criteria, the District Court did not abuse its discretion in determining that terminating Father’s parental rights to P.V. was in P.V.’s best interests. 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 did not abuse its discretion in terminating Father’s rights. The District Court’s factual findings concerning the Department’s efforts were not clearly erroneous, and evidence beyond a reasonable doubt supported the District Court’s determination that the Department provided active, yet unsuccessful, efforts to provide remedial and rehabilitative services designed to prevent the breakup of Father and P.V. We affirm. /S/ JAMES JEREMIAH SHEA We Concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON

March 29, 2016

9b547fb6-9489-4a59-8435-e3014833d2e9

State v. Bruce

2016 MT 92N

DA 14-0620

Montana

Montana Supreme Court

DA 14-0620 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 92N STATE OF MONTANA, Plaintiff and Appellee, v. RICHARD CLAY BRUCE, Defendant and Appellant. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DC 14-66 Honorable Robert L. Deschamps, III, 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, Tammy K Plubell, Assistant Attorney General, Helena, Montana Kirstin Pabst, Missoula County Attorney, Karla Painter, Deputy County Attorney, Missoula, Montana Submitted on Briefs: February 24, 2016 Decided: April 19 2016 Filed: __________________________________________ Clerk April 19 2016 Case Number: DA 14-0620 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 Richard Clay Bruce (Bruce) appeals from his conviction of felony assault with a weapon entered by the Fourth Judicial District Court, Missoula County. We affirm. ¶3 The State charged Bruce with felony assault with a weapon and misdemeanor criminal trespass to property as a result of events that occurred at the Poverello Center on December 22, 2013. On that day, Bruce and Susan Poe (Poe) drank and panhandled together. Bruce is not allowed in Missoula area liquor stores, so when they earned enough money, Poe and another person went to a liquor store to buy a pint of alcohol. Bruce continued panhandling and earned enough to buy yet another pint of alcohol, which he did.1 According to Poe, after she got the pint, she could not find Bruce and began drinking it without him. Later, Bruce approached Poe, who was on Poverello Center property, and demanded Poe give Bruce the alcohol. Bruce is not allowed on Povorello Center property. Poe claimed Bruce held a knife to her throat and threatened to kill her. Poe testified that she was afraid because she thought Bruce was going to kill her. Bruce took the bottle from Poe. 1 The record is unclear how Bruce, who is not allowed in Missoula area liquor stores, was able to enter one and purchase this second pint of alcohol. 3 ¶4 Poe called the police. Police responded and noted that Poe was intoxicated, upset, shaking, and crying. Poe told the officer that Bruce held a knife to her throat and threatened her. Another police officer located Bruce and asked him whether something had happened at the Povorello Center. Bruce responded, “[t]hat woman is crazy.” The officer asked Bruce if he was carrying a knife. Bruce responded no. The officer arrested Bruce and found two knives, one in his coat pocket and another in his backpack, in addition to two pints of alcohol, one opened and partially drunk and another unopened. ¶5 At trial, Poe testified that Bruce had confronted her and threatened her with a knife. She testified she thought “he would kill me.” Poe’s testimony included various inconsistencies about what kind of knife Bruce used and where, specifically, he held it against her throat. At trial, Bruce admitted to misdemeanor criminal trespass to property, but argued he had not assaulted Poe with or without a weapon. Bruce testified that he was not all that concerned about the alcohol Poe had, because since they had separated, he purchased another bottle. Bruce testified that he approached Poe, Poe stood up, and the alcohol bottle dropped out of her coat and onto the ground. He testified that he picked it up and left. A jury convicted Bruce of both offenses. ¶6 The issue Bruce raises on appeal is whether the District Court erred in refusing to instruct the jury on the lesser-included offense of misdemeanor assault. “To determine if a lesser-included offense instruction should have been given at trial, we follow the two-step approach articulated in State v. Castle, 285 Mont. 363, 368, 948 P.2d 688, 690-91 (1997).” State v. Jay, 2013 MT 79, ¶ 39, 369 Mont. 332, 298 P.3d 396. “First, we determine if, as a matter of law, the offense for which the instruction is requested is a 4 lesser-included offense of the offense charged. Then, we determine if the lesser-included instruction is supported by the evidence of the case.” Jay, ¶ 39. ¶7 A lesser-included offense is an offense that “is established by proof of the same or less than all the facts required to establish the commission of the offense charged.” Section 46-1-202(9)(a), MCA. A person commits the offense of assault if the person purposely or knowingly causes reasonable apprehension of bodily injury in another. Section 45-5-201(1)(d), MCA. A person commits the offense of assault with a weapon if the person purposely or knowingly causes reasonable apprehension of serious bodily injury in another by use of a weapon. Section 45-5-213(1)(b), MCA. “[F]elony assault with a weapon differs from misdemeanor assault only in the degree of the injury that is feared and the use of a weapon.” State v. Feltz, 2010 MT 48, ¶ 20, 355 Mont. 308, 227 P.3d 1035. Under the first step articulated in Castle, we conclude misdemeanor assault is a lesser-included offense of felony assault with a weapon. ¶8 At trial, the State argued against instructing the jury on the lesser-included offense because there was no evidence presented that supported misdemeanor assault. The State commented, “there are only two sets of facts; one for assault with a weapon,” if you believe Poe’s testimony, “and one for no conviction at all,” if you believe Bruce’s testimony. The District Court agreed with the State and refused to instruct the jury on misdemeanor assault. There was no evidence presented that Bruce assaulted Poe without a weapon. Poe testified Bruce held a knife to her throat and threatened her. Bruce testified Poe dropped the bottle; he picked it up, and walked away. Under the second step articulated in Castle, we conclude the evidence in the case did not support misdemeanor 5 assault. The District Court did not err in refusing to instruct the jury on misdemeanor assault because no evidence was presented that would support a finding that Bruce assaulted Poe without a weapon. ¶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. This appeal presents no issues of first impression and does not establish new precedent or modify existing precedent. ¶10 Affirmed. /S/ LAURIE McKINNON We Concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT /S/ JIM RICE

April 19, 2016

409b8732-33ae-470c-ba58-14a9df0ff1ec

Welscott v. Allstate

2016 MT 83N

DA 15-0588

Montana

Montana Supreme Court

DA 15-0588 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 83N JAMES WELSCOTT, Plaintiff and Appellant, v. ALLSTATE FIRE AND CASUALTY INSURANCE CO., Defendant and Appellee. APPEAL FROM: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DV 13-180A Honorable Holly Brown, Presiding Judge COUNSEL OF RECORD: For Appellant: James Welscott (Self-Represented), Greenbush, Michigan For Appellee: Stephanie Oblander, Smith Oblander, PC, Great Falls, Montana Submitted on Briefs: March 9, 2016 Decided: April 5, 2016 Filed: __________________________________________ Clerk April 5 2016 Case Number: DA 15-0588 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 This matter arises from a breach of contract action filed by James Welscott against Allstate, his auto insurer. Welscott was involved in a traffic accident in August 2011. He recovered $25,000 from the other driver’s insurer and then sued Allstate seeking to recover underinsured motorist benefits under his own policy. The District Court conducted a jury trial in September 2015. The jury returned a special verdict finding that Allstate did not breach its contract with Welscott. Welscott appeals, contending that the District Court erred in submitting the special verdict form to the jury. We affirm. ¶3 Welscott does not explain his disagreement with the verdict form and there is no error apparent on the face of the document. While Welscott refers to his case as involving claims for insurance bad faith, he did not plead any such claim and did not submit any such claim to the jury. The record is clear that Welscott specifically agreed to the special verdict form proposed by the District Court. This Court generally does not consider issues that were not raised in the district court, and failure to object to a verdict form results in a waiver of the right to challenge it on appeal. Ammondson v. Northwestern Corp., 2009 MT 331, ¶ 68, 353 Mont. 28, 220 P.3d 1. 3 ¶4 Welscott has not presented any cogent argument that the District Court erred in any other manner. Specifically, we find no basis to disturb the District Court’s award of costs to Allstate, and no basis to disturb the District Court’s award of discovery sanctions against Welscott. ¶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 the Court, this case presents a question controlled by settled law or by the clear application of applicable standards of review. ¶6 Affirmed. /S/ MIKE McGRATH We Concur: /S/ MICHAEL E WHEAT /S/ JAMES JEREMIAH SHEA /S/ BETH BAKER /S/ JIM RICE

April 5, 2016

2e3d3400-d90d-412c-bf79-0a2fc156c59e

Olhausen v. H H Contracting

2016 MT 53N

DA 15-0367

Montana

Montana Supreme Court

DA 15-0367 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 53N JEFF T. OLHAUSEN, Plaintiff and Appellant, v. H&H CONTRACTING, INC., Defendant and Appellee. APPEAL FROM: District Court of the Third Judicial District, In and For the County of Deer Lodge, Cause No. DV-13-93 Honorable Ray J. Dayton, Presiding Judge COUNSEL OF RECORD: For Appellant: Jeff T. Olhausen (self-represented); Anaconda, Montana For Appellee: Daniel D. Manson, Manson Law Firm, P.C.; Butte, Montana Submitted on Briefs: February 3, 2016 Decided: March 8, 2016 Filed: __________________________________________ Clerk March 8 2016 Case Number: DA 15-0367 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 Jeff T. Olhausen appeals an order by the Third Judicial District Court, Deer Lodge County, regarding his wage claims against H&H Contracting, Inc. We restate the issues on appeal as follows: (1) whether the District Court correctly concluded that Olhausen’s claims were preempted by federal law, and his only potential recovery was a wage claim under state or federal law; (2) whether the District Court erred in determining the amount of wages H&H owed to Olhausen; and (3) whether the District Court erred in ruling that Olhausen could not introduce into evidence a draft collective bargaining agreement. We affirm. ¶3 On May 1, 2013, H&H, the International Union of Operating Engineers, Local 400 (Operators’ Union), and the Laborers’ International Union of North America, Local 1686, (Laborers’ Union) signed a collective bargaining agreement (Agreement). H&H hired Olhausen in June 2013 and terminated his employment on September 4, 2013. Olhausen retrieved his final paycheck from H&H on September 5, 2013. During the course of Olhausen’s employment at H&H, he was a member of the Operators’ Union. At trial, Olhausen produced a letter, dated October 1, 2013, which he allegedly sent to H&H and the Operators’ Union, stating that there were errors in his paychecks. Olhausen also 3 produced a second letter to the Operators’ Union, dated October 17, 2013, claiming he was owed wages. John Riordan, the Operators’ Union’s business manager, investigated Olhausen’s complaint. Riordan concluded that Olhausen was paid in full and in a timely manner for all hours worked and was not entitled to additional or penalty pay. ¶4 On December 12, 2013, Olhausen filed a complaint against H&H in the District Court, alleging that he was either underpaid or not paid at all for certain hours and days he worked between June and September. He requested relief in the form of missing wages, punitive damages, and a penalty pursuant to the Agreement. After ruling on pretrial motions, the District Court held a bench trial. On March 10, 2015, the District Court signed a proposed pretrial order that contained both parties’ signatures and superseded the pleadings. In the pretrial order, Olhausen again claimed that he was either not paid or underpaid for several hours and days worked between June and September. H&H contended that Olhausen was paid correctly for every hour and day that he worked as an employee of H&H. However, on March 10, 2015, H&H filed a notice of correction to the pretrial order, alleging that it discovered a miscalculation in Olhausen’s wages. H&H contended that, when originally calculating Olhausen’s wages, it was under the impression that Olhausen was a member of the Laborers’ Union, rather than the Operators’ Union, which receives a higher wage. Olhausen thus was underpaid for certain hours he worked. ¶5 On March 29, 2015, the District Court entered its findings of fact, conclusions of law, and final order. The court ordered H&H to pay Olhausen $432.66 to correct its error 4 regarding his pay and assessed a 15% penalty as required by § 39-3-206, MCA, for a total of $497.56. Olhausen appeals. ¶6 We review a district court’s findings of fact in a civil bench trial to determine whether they are supported by substantial credible evidence. DeNiro v. Gasvoda, 1999 MT 129, ¶ 9, 294 Mont. 478, 982 P.2d 1002. In doing so, we view the evidence in the light most favorable to the prevailing party. DeNiro, ¶ 9. We review the District Court’s conclusions of law to determine whether they are correct. DeNiro, ¶ 9. ¶7 Collective bargaining agreements are governed by federal law. Edwards v. Cascade Cnty. Sheriff’s Dep’t, 2009 MT 451, ¶ 50, 354 Mont. 307, 223 P.3d 893. “As a general rule . . . federal labor policy requires that individual employees wishing to assert contract grievances must attempt use of the contract grievance procedure agreed upon by employer and union as the mode of redress.” Small v. McRae, 200 Mont. 497, 503, 651 P.2d 982, 986 (1982) (quoting Republic Steel Corp. v. Maddox, 379 U.S. 650, 652, 85 S. Ct. 614, 616 (1965)) (emphasis in original); see also DelCostello v. Int’l Bhd. of Teamsters, 462 U.S. 151, 163, 103 S. Ct. 2281, 2290 (1983) (“Ordinarily, . . . an employee is required to attempt to exhaust any grievance or arbitration remedies provided in the collective-bargaining agreement.”). ¶8 Article V, Section 3 of the Agreement provides: Payrolls will be assumed to be correct and there will be no adjustment unless an employee makes a protest within ten (10) days in writing to the UNION and the EMPLOYER. This is not intended to by-pass State or Federal law concerning wages or the payment thereof; but only indicates that the UNION will not process a complaint unless within the ten (10) days. 5 Article VII of the Agreement sets forth the grievance and arbitration provisions, and requires the employer and the union to attempt to settle grievances regarding any violation of the Agreement’s terms. The letter Olhausen produced at trial indicates that he first notified the Operators’ Union of his wage claims on October 1, more than ten days after his employment was terminated and he retrieved his last paycheck. Nevertheless, Riordan investigated Olhausen’s complaint. At the end of his investigation, Riordan sent Olhausen a letter stating: “It was determined after reviewing payroll records that you were paid in full and in a timely manner for all hours worked. You are not entitled to any additional pay or penalty pay.” ¶9 Olhausen was bound by the result of the Agreement’s grievance procedure unless the union representing him in the procedure “act[ed] in such a discriminatory, dishonest, arbitrary, or perfunctory fashion as to breach its duty of fair representation.” DelCostello, 462 U.S. at 164, 103 S. Ct. at 2290. If this were the case, Olhausen’s remedy would be to bring suit against both his employer and the union. His suit against the employer would rest on § 301 of the Labor Management Relations Act (Act), 29 U.S.C. § 185, which provides a mechanism for individual employees to enforce personal rights, such as wage claims. See DelCostello, 462 U.S. at 164, 103 S. Ct. at 2290. His suit against the union would have to be based on a breach of the union’s duty of fair representation. See DelCostello, 462 U.S. at 164, 103 S. Ct. at 2290. Although such lawsuits comprise two causes of action, “the two claims are inextricably interdependent.” DelCostello, 462 U.S. at 164, 103 S. Ct. at 2291. Thus, to prevail against either H&H or the Operators’ Union, 6 Olhausen would have to demonstrate that the union breached its duty. See DelCostello, 462 U.S. at 165, 103 S. Ct. at 2291. ¶10 Throughout his various pleadings and the trial, Olhausen never alleged that the Operators’ Union breached its duty of fair representation. After filing his complaint, Olhausen continued to claim that he was owed wages for different hours and days worked, at times citing dates and times that he previously had not claimed. Olhausen never attempted to resolve these wage claims through the grievance and arbitration provisions set forth in Article VII of the Agreement. Olhausen thus is not entitled to recovery under the Agreement. By the same logic, the District Court did not err in not applying the penalty provision set forth in the Agreement. As the District Court recognized, Olhausen’s only possible source of recovery was a wage claim under state or federal law. Thus, the Court was correct in assessing a penalty under Montana’s wage protection statutes, while declining to impose any penalty under the Agreement itself. ¶11 In his appellate brief, Olhausen makes a blanket assertion that “the District Court erred in not holding [H&H] accountable for not paying Olhausen all wages due at [the] time of termination.” Olhausen does not allege any specific hours, days, or amounts for which he was not paid. Nor does he argue that the District Court’s decision was not supported by the evidence before it. Likewise, Olhausen’s brief contains no support for his naked assertion that the District Court erred “by not holding [H&H] accountable to all State and Federal Laws governing pay dispersal.” Though Olhausen cites to multiple state laws, he does not indicate how those laws apply to this case. 7 ¶12 While “we are willing to make accommodations for pro se parties by relaxing those technical requirements which do not impact fundamental bases for appeal. . . , a district court’s decision is presumed correct and it is the appellant who bears the burden of establishing error by that court.” In re Marriage of McMahon, 2002 MT 198, ¶ 7, 311 Mont. 175, 53 P.3d 1266. As far as Olhausen’s complaints about the District Court’s ruling may pertain to the court’s findings, a review of Olhausen’s appellate brief fails to clarify what specific findings he takes issue with. Accordingly, we will not disturb the District Court’s findings. See McMahon, ¶ 7. ¶13 Olhausen also contends that the District Court erred in sustaining H&H’s objection to Olhausen’s attempt to introduce a 2010 unsigned draft of the Agreement sent to him by the Operators’ Union. However, he does not present any argument to support this assertion. Accordingly, we will not consider his argument that the District Court erred in its evidentiary ruling. See McMahon, ¶ 6 (“This Court has repeatedly held that we will not consider unsupported issues or arguments.”); Wohl v. City of Missoula, 2013 MT 46, ¶ 48, 369 Mont. 108, 300 P.3d 1119 (“A party is responsible for developing legal analysis that supports its position on appeal.”). ¶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. The District Court’s interpretation and application of the law were correct and its findings of fact are not clearly erroneous. We affirm. 8 /S/ JAMES JEREMIAH SHEA We Concur: /S/ LAURIE McKINNON /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT /S/ JIM RICE

March 8, 2016

344247ba-a974-401d-92d7-db73e1b15fbe

State v. Maier

2016 MT 57N

DA 15-0164

Montana

Montana Supreme Court

DA 15-0164 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 57N STATE OF MONTANA, Plaintiff and Appellee, v. TROY ALAN MAIER, Defendant and Appellant. APPEAL FROM: District Court of the Twenty-First Judicial District, In and For the County of Ravalli, Cause No. DC 14-161 Honorable Jeffrey H. Langton, Presiding Judge COUNSEL OF RECORD: For Appellant: Matthew M. Stevenson, Attorney at Law, Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Brenda K. Elias, Assistant Attorney General, Helena, Montana William Fulbright, Ravalli County Attorney, Hamilton, Montana Submitted on Briefs: January 20, 2016 Decided: March 8, 2016 Filed: __________________________________________ Clerk March 8 2016 Case Number: DA 15-0164 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 Troy Alan Maier appeals from an order issued by the Twenty-First Judicial District Court, Ravalli County, concluding that particularized suspicion existed to effectuate a traffic stop of Maier’s vehicle. We affirm. ¶3 We address the following issue on appeal: whether the District Court correctly concluded that Officer Reichert possessed particularized suspicion to effectuate a traffic stop of Maier’s vehicle after Officer Reichert observed Maier’s vehicle drift over the centerline three times. ¶4 On February 2, 2014, at 2:17 a.m., Officer Reichert observed Maier, driving a full-size Dodge pick-up, pull out of the parking lot of the Rustic Hut bar and restaurant and drive north on Highway 93. After turning onto Old Highway 93, Officer Reichert observed Maier’s vehicle cross the centerline on three separate occasions within the course of a mile and half. Officer Reichert activated his emergency lights and initiated a traffic stop based on the traffic offenses of crossing the centerline in violation of § 61-8-328, MCA, as well as suspicion of driving under the influence in violation of § 61-8-401, MCA. 3 ¶5 After making contact with Maier, Officer Reichert smelled the odor of alcohol emanating from Maier’s breath. Maier admitted to consuming alcohol. Maier consented to perform Standardized Field Sobriety Tests and performed poorly on the tests. Maier agreed to take a preliminary breath test, revealing a blood alcohol concertation of 0.20 percent. Officer Reichert subsequently arrested Maier for driving under the influence of alcohol in violation of § 61-8-401, MCA. ¶6 On August 14, 2014, Maier filed a motion to suppress, arguing that Officer Reichert’s observation of Maier driving across the centerline three times did not constitute particularized suspicion to conduct the traffic stop. Maier maintained that the centerline of the highway was “unclearly marked” due to an accumulation of ice on the roadway. On December 16, 2014, the District Court conduced a hearing on Maier’s motion to suppress. The court heard testimony from both Officer Reichert and Maier, and the court watched the video recording taken by Officer Reichert’s in-car camera. On February 4, 2015, the District Court issued its order, denying Maier’s motion to suppress. The court found that prior to the stop the centerline was visible, and that Maier crossed the centerline three times. ¶7 On appeal, Maier argues that the District Court erred by concluding that the Officer Reichert possessed particularized suspicion to stop his vehicle for violating § 61-8-328, MCA, which requires a vehicle to be operated as nearly as practicable entirely within a single lane. Maier maintains that the District Court erred in finding that the centerline was visible and that Maier crossed the centerline. An investigative stop is valid if the “officer possesses particularized suspicion that the occupant of the vehicle has 4 committed, is committing, or is about to commit an offense.” City of Missoula v. Moore, 2011 MT 61, ¶ 16, 360 Mont. 22, 251 P.3d 679 (internal quotations omitted). “A statutory violation alone is sufficient to establish particularized suspicion for an officer to make a traffic stop.” State v. Schulke, 2005 MT 77, ¶ 16, 326 Mont. 390, 109 P.3d 744. ¶8 We review a district court’s findings of fact to determine if they are clearly erroneous. Kummerfeldt v. State, 2015 MT 109, ¶ 11, 378 Mont. 522, 347 P.3d 1233. Officer Reichert testified that the centerline of the highway was visible and that he observed Maier cross the centerline three times. Further, Maier conceded that he may have driven onto and possibly across the centerline. Sufficient evidence supports the District Court’s findings that Maier violated § 61-8-328, MCA. Therefore, Officer Reichert possessed particularized suspicion to effectuate a traffic stop of Maier’s vehicle. ¶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 present questions controlled by settled law and the applicable standard of review. ¶10 Affirmed. /S/ LAURIE McKINNON We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ JIM RICE /S/ JAMES JEREMIAH SHEA

March 8, 2016

1435fe3e-9fd5-42eb-b25f-653b23340262

State v. Reimer

2016 MT 71N

DA 15-0409

Montana

Montana Supreme Court

DA 15-0409 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 71N STATE OF MONTANA, Plaintiff and Appellee, v. CHAD K. REIMER, Defendant and Appellant. APPEAL FROM: District Court of the Twelfth Judicial District, In and For the County of Hill, Cause No. DC-89-010 Honorable John C. McKeon, Presiding Judge COUNSEL OF RECORD: For Appellant: Chad K. Reimer (self-represented), Deer Lodge, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Mardell Ployhar, Assistant Attorney General, Helena, Montana Gina Dahl, Hill County Attorney, Havre, Montana Submitted on Briefs: February 17, 2016 Decided: March 22, 2016 Filed: __________________________________________ Clerk March 22 2016 Case Number: DA 15-0409 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 1989, the Twelfth Judicial District Court, Hill County, convicted Chad K. Reimer of mitigated deliberate homicide pursuant to a plea agreement and sentenced him to forty years in prison with an additional fifteen years for his designation as a persistent felony offender (PFO) and an additional four years for a weapons enhancement. In 2015, this Court granted Reimer’s habeas corpus petition and ordered resentencing due to the separate PFO sentence. After holding a new sentencing hearing and considering extensive evidence, the District Court resentenced Reimer to fifty-five years in prison, and modified the weapons enhancement to eight years with four years suspended. Reimer appeals, challenging the modification to the weapons enhancement sentence on two constitutional grounds. ¶3 We review de novo whether a district court violated a defendant’s constitutional rights at sentencing. State v. Haldane, 2013 MT 32, ¶ 17, 368 Mont. 396, 300 P.3d 657. ¶4 Reimer argues that the District Court’s resentencing on the weapons enhancement violated Apprendi v. New Jersey, 530 U.S. 466, 120 S. Ct. 2348 (2000). A violation of Apprendi is a violation of a defendant’s Due Process right to have a jury determine that he “‘is guilty of every element of the crime with which he is charged, beyond a 3 reasonable doubt.’” Apprendi, 530 U.S. at 476–77, 120 S. Ct. 2356–57 (citing United States v. Gaudin, 515 U.S. 506, 510, 115 S. Ct. 2310, 2313 (1995)). Apprendi requires that “[o]ther than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury . . . .” Apprendi, 530 U.S. at 490, 120 S. Ct. at 2362–63. The United States Supreme Court has clarified “that the ‘statutory maximum’ for Apprendi purposes is the maximum sentence a judge may impose solely on the basis of the facts reflected in the jury verdict or admitted by the defendant.” Blakely v. Washington, 542 U.S. 296, 303, 124 S. Ct. 2531, 2537 (2004) (emphasis in original). When, as here, the defendant admits to using a firearm when committing a crime, Apprendi permits a district court to subject a defendant to an additional sentence for a weapons enhancement. Blakely, 542 U.S. at 303, 124 S. Ct. at 2537. Reimer admitted to using a firearm in his plea agreement. The District Court relied on Reimer’s admission in applying the weapons enhancement sentence. Therefore, the court did not increase the penalty beyond the prescribed statutory maximum in violation of Apprendi. ¶5 Reimer claims that the District Court’s resentencing on the weapons enhancement violates the Double Jeopardy Clause of the United States and Montana Constitutions because the court failed to articulate a reason for increasing the sentence. The United States Supreme Court has addressed whether a defendant can receive a harsher sentence when being sentenced for a second time. North Carolina v. Pearce, 395 U.S. 711, 89 S. Ct. 2072 (1969). The Court held that “neither the double jeopardy provision nor the Equal Protection Clause imposes an absolute bar to a more severe sentence upon 4 reconviction.” Pearce, 395 U.S. at 723, 89 S. Ct. at 2079. The Due Process Clause of the Fourteenth Amendment to the United States Constitution, however, prevents a court from imposing a harsher sentence vindictively, that is, in retaliation for the defendant’s choice to pursue an appeal. Pearce, 395 U.S. at 725, 89 S. Ct. at 2080; State v. Hubbel, 2001 MT 31, ¶ 26, 304 Mont. 184, 20 P.3d 111 (overruled on other grounds by State v. Hendricks, 2003 MT 223, 317 Mont. 177, 75 P.3d 1268) (reviewing a district court’s imposition of a harsher sentence following retrial and finding that the resentencing was not vindictive and not a violation of Due Process). A court rebuts the presumption of vindictiveness when increasing a sentence if the court affirmatively offers objective reasons to justify the increased sentence. Pearce, 395 U.S. at 726, 89 S. Ct. at 2081. ¶6 As the appellant, Reimer has a duty to provide this Court “with a record sufficient to enable it to rule upon the issues raised.” M. R. App. P. 8(2). Reimer failed to provide a transcript of the sentencing hearing. Therefore, he has not presented this Court with a record sufficient to determine whether the District Court acted vindictively in increasing the weapons enhancement sentence. The clerk of court’s minutes from the sentencing hearing show that the District Court considered factors such as Reimer’s criminal history, his behavior in prison, the circumstances of the crime, and psychological evaluations. These are appropriate factors to consider and indicate that the court did not act vindictively in resentencing on the weapons enhancement. Hubbel, ¶¶ 29–30 (providing examples of “constitutionally legitimate” reasons for increasing a sentence upon reconviction). Therefore, in the absence of a record showing otherwise, Reimer has not established a Due Process violation. 5 ¶7 Finally, Reimer asserts that resentencing on the weapons enhancement violates § 46-1-401(1)(a), MCA, because the enhancing fact did not appear in the amended information. Reimer waived his right to bring this challenge when he failed to raise it in the District Court. Section 46-20-104, MCA; State v. Kotwicki, 2007 MT 17, ¶ 22, 335 Mont. 344, 151 P.3d 892 (holding that the Court will not review an unpreserved objection to a sentence). ¶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. This appeal decides no constitutional issues, no issues of first impression, and does not establish new precedent or modify existing precedent. ¶9 The District Court did not violate Reimer’s constitutional rights when it resentenced him. Its judgment is affirmed. /S/ BETH BAKER We Concur: /S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA /S/ MICHAEL E WHEAT

March 22, 2016

4ee4fce5-bcae-4f1a-9063-606010e22aeb

Wohl v. City of Missoula

2016 MT 64N

DA 15-0274

Montana

Montana Supreme Court

DA 15-0274 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 64N GLEN and JOHANA WOHL, et al., Plaintiffs and Appellants, v. CITY OF MISSOULA and JOHN DOES 1-20, Defendants and Appellees. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DV-05-389 Honorable Ed McLean, Presiding Judge COUNSEL OF RECORD: For Appellants: Thomas C. Orr, Thomas C. Orr Law Offices, Missoula, Montana For Appellees: Martin S. King, Worden Thane PC, Missoula, Montana Jim Nugent, City Attorney, Missoula, Montana Submitted on Briefs: February 10, 2016 Decided: March 15, 2016 Filed: __________________________________________ Clerk March 15 2016 Case Number: DA 15-0274 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 Glen and Johanna Wohl, et al., appeal from the District Court’s Order for Satisfaction of Judgment and Final Relief, filed April 23, 2015. We affirm. ¶3 This case involves a right-of-way dispute between the City of Missoula and residents along a stretch of South Avenue. The dispute has been to this Court twice before. In Wohl v. City of Missoula, 2013 MT 46, 369 Mont. 108, 300 P.3d 1119, we affirmed the District Court’s decision that the City’s street improvements had taken plaintiffs’ property and that they were entitled to just compensation. We remanded for a determination of damages. In Wohl v. City of Missoula, 2014 MT 310, 377 Mont. 148, 399 P.3d 58, we affirmed the District Court’s award of attorney fees and costs to the plaintiffs, incurred during the prior appeal. ¶4 In February 2015 plaintiffs filed a request for supplemental relief, seeking a declaration that the retracement survey at issue, COS 5007, is null and void, and a declaration that the City be required to prepare plats of each of the landowners’ properties. The City filed a request that the District Court enter a final order closing the case. The District Court received briefs and held a hearing, and in April 2015 entered its 3 Order for Satisfaction of Judgment and Final Relief. The order denied the plaintiffs’ request for an order declaring COS 5007 null and void, and denied plaintiffs’ request for additional lot surveys. The order authorized the City to acquire all necessary rights of way along South Avenue and to then file and record a “Retracement Certificate of Survey” showing the “location of the entire South Avenue public right-of way.” Finally, the order granted the City’s request for an order requiring that plaintiffs execute a Satisfaction of Judgment in return for the City’s payment of $344,469.91 in damages, attorney fees and costs. The parties do not dispute that plaintiffs are entitled to that amount of money from the City and the District Court had authority to enter the order. ¶5 Plaintiffs contend that the District Court had authority under § 27-8-313, MCA, to grant “further relief” in a declaratory judgment action “whenever necessary or proper.” Plaintiffs contend that the District Court abused its discretion by denying their request for the supplemental relief. ¶6 We affirm the District Court’s order. While a district court has discretion to enter supplemental relief under § 27-8-313, MCA, it does so as an exercise of its sound discretion based upon the facts and circumstances of the case. Public Land & Water Access Assoc. v. Jones, 2013 MT 31, ¶ 8, 368 Mont. 390, 300 P.3d 675. Here the District Court has dealt with this dispute for years and is familiar with the facts and the issues. Prior to plaintiffs’ recent request, there had been no request to declare COS 5007 null and void. Prior to plaintiffs’ recent request, there had been no issue as to whether the City should be obligated to survey the properties of the adjoining landowners. As the District Court stated, the record reflected that COS 5007 is “a valid and accurate retracement” 4 that depicts the lot lines and boundaries of the properties along South Avenue. Further, COS 5007, as a public record, had been relied upon by other surveyors working in the area. ¶7 Over the years of this litigation, plaintiffs prevailed on their condemnation claim, on their claims for damages, and on their claims for attorney fees. The District Court was well within its discretion to consider the case “concluded” after the second appeal and to refuse to embark upon a new stage of litigation involving the issues raised by plaintiffs. We find no basis upon which to conclude that the District Court abused its discretion in entering the order at issue in this appeal. ¶8 The City requests that this Court award it attorney fees and costs for this appeal pursuant to M. R. App. P. 19(5). We find no basis upon which to award additional attorney fees to any party. However, the City is entitled to costs on appeal as the prevailing party pursuant to M. R. App. P. 19(3)(a). ¶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 a question controlled by settled law or by the clear application of applicable standards of review. ¶10 Affirmed. /S/ MIKE McGRATH We Concur: /S/ JAMES JEREMIAH SHEA /S/ LAURIE McKINNON /S/ BETH BAKER /S/ JIM RICE

March 15, 2016

8f1a1cac-8b74-4cfc-af16-6134d106b972

Matter of P.H.

2016 MT 72N

DA 14-0560

Montana

Montana Supreme Court

DA 14-0560 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 72N IN THE MATTER OF: P.H., Respondent and Appellant. APPEAL FROM: District Court of the Second Judicial District, In and For the County of Butte-Silver Bow, Cause No. DI-14-22 Honorable Brad Newman, Presiding Judge COUNSEL OF RECORD: For Appellant: Nick K. Brooke, Smith & Stephens, P.C., Missoula, 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: January 27, 2016 Decided: March 22, 2016 Filed: __________________________________________ Clerk March 22 2016 Case Number: DA 14-0560 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 This case concerns P.H., a transient woman in her late forties. On August 7, 2014, the Butte police received a call regarding a woman (P.H.) hiding in an alley. The police brought P.H. to the Western Montana Health Center, where she received emergency mental health services. Based on the recommendations arising from those services, the State filed a petition for involuntary commitment on August 8, 2014. On August 11, 2014, the District Court in Butte held a hearing to assess whether P.H. should be involuntarily committed. At the hearing, the State introduced the testimony of Michael Sawicki, (“Sawicki”) a licensed clinical social worker and a mental health professional. P.H. also testified at the hearing. At the conclusion of the hearing, the District Court granted the State’s petition for involuntarily commitment of P.H. to the Montana State Hospital for 90 days, and entered its Findings of Fact and Conclusions of Law on August 12, 2014. P.H. appeals. We affirm. ¶3 We review a district court’s order for civil commitment to assess whether the findings of fact are clearly erroneous and whether its application of the law is correct. In re Mental Health of L.K.-S., 2011 MT 21, ¶ 14, 359 Mont. 191, 247 P.3d 1100. 3 ¶4 Involuntary civil commitment is a statutory procedure outlined in § 53-21-126, MCA. Pursuant to that statute, the court must first determine whether the respondent is suffering from a mental disorder, and then assess whether the condition of the respondent requires commitment. Section 53-21-126(1), MCA; In re M.C.D., 2010 MT 15, ¶ 10, 355 Mont. 97, 225 P.3d 1214. Section 53-21-126(1), MCA, outlines four categories for assessing the need for civil commitment: (a) whether the respondent, because of a mental disorder, is substantially unable to provide for the respondent’s own basic needs of food, clothing, shelter, health, or safety; (b) whether the respondent has recently, because of a mental disorder and through an act or an omission, caused self-injury or injury to others; (c) whether, because of a mental disorder, there is an imminent threat of injury to the respondent or to others because of the respondent’s acts or omissions; and (d) whether the respondent’s mental disorder, as demonstrated by the respondent’s recent acts or omissions, will, if untreated, predictably result in deterioration of the respondent’s mental condition to the point at which the respondent will become a danger to self or to others or will be unable to provide for the respondent’s own basic needs of food, clothing, shelter, health, or safety. . . . The court must establish facts and physical evidence beyond a reasonable doubt, and all other matters under a clear and convincing standard. However, mental disorders must be proved to a reasonable medical certainty. Section 53-21-126(2), MCA. We have previously held that it is incumbent upon the courts to follow the strict statutory guidelines in cases of involuntary commitment, given the adverse effect such a procedure has on the respondent. In re C.R.C., 2004 MT 389, ¶ 16, 325 Mont. 133, 104 P.3d 1065. ¶5 Here, P.H. argues on appeal that the District Court lacked sufficient evidence to conclude that she suffers from a mental disorder. P.H. did not contest this issue at the 4 District Court. Indeed, she accepted that conclusion at the end of the hearing. Consequently, we decline to address that matter on appeal. ¶6 P.H. contends that the District Court lacked sufficient evidence as set out in the statute to conclude that she was unable to take care of her own needs and thereby commit her to the state hospital. The record shows that P.H. is homeless and has severe mental disorders. Her initial evaluation after she was provided emergency mental health services noted that she suffered from both physical and mental health issues. Prior to the hearing, Sawicki reviewed the limited records, conversed with P.H., and evaluated her mental and physical condition. At the hearing, Sawicki testified that P.H. suffered from “a very serious mental illness” which he diagnosed as schizoaffective disorder, bipolar type. She exhibited delusions, paranoia, and reality disorientation. Sawicki further asserted that P.H. did not appreciate her current predicament and consistently underestimated the gravity of her mental condition and physical and medical needs. He testified there is a risk she could decompensate because she is not on mental health medications: “[s]he’ll become more and more psychotic, more and more delusional, more and more paranoid.” Finally, Sawicki stated that he was seriously concerned for her well-being because “she’s is easily victimized and vulnerable on the street.” He indicated there were no available alternative treatments for her given her mental condition. ¶7 The District Court also heard testimony from P.H., which supported the evaluation from Sawicki. P.H. testified that she was wealthy and that her husband was on a secret mission and involved with the FBI, CIA, or Interpol. During her testimony she represented a deep immersion into an alternate reality in which other people are pursuing 5 her for financial purposes. She seemed to understand that her brain was cross-wired but categorically refused treatment that could help her. ¶8 Pursuant to § 56-21-126(1), MCA, a court may order commitment if it finds that because of a mental disorder, the respondent is substantially unable to provide for her own basic needs for food, clothing, shelter, health, or safety. P.H. has a basic need for treatment and although being homeless is not sufficient for commitment, being homeless with an inability to distinguish what is real from what is not raises concerns not just for her safety but also for her ability to care for her own basic mental health needs. Confronted with that record we cannot agree that the District Court was clearly erroneous. ¶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 a question controlled by settled law or by the clear application of applicable standards of review. ¶10 Affirmed. /S/ MIKE McGRATH We Concur: /S/ LAURIE McKINNON /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT /S/ JIM RICE

March 22, 2016

7fca5175-2cef-4700-8d35-cca15c5c4ea3

In re Marriage of Davis

2016 MT 52

DA 15-0619

Montana

Montana Supreme Court

DA 15-0619 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 52 IN RE THE MARRIAGE OF: JENNIFER M. DAVIS n/k/a JENNIFER MISSEL, Petitioner and Appellee, v. KENNETH R. DAVIS, Respondent and Appellant. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. BDR 11-936 Honorable Julie Macek, Presiding Judge COUNSEL OF RECORD: For Appellant: Robert L. Sterup, Holland & Hart LLP; Billings, Montana For Appellee: Marcia G. Birkenbuel, Attorney at Law; Great Falls, Montana Submitted on Briefs: February 17, 2016 Decided: March 8, 2016 Filed: __________________________________________ Clerk March 8 2016 Case Number: DA 15-0619 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 Kenneth Russell Davis, (hereinafter “Russell”), appeals from an order from the Eighth Judicial District Court, Cascade County, which affirmed the Standing Master’s Findings of Fact, Conclusions of Law and Order Amending Parenting Plan. The Amended Final Parenting Plan awarded primary custody of H.D., the parties’ child, to Appellee Jennifer Missel (hereinafter “Jennifer”), during the school year. We affirm and address the following issue on appeal: Did the District Court err by affirming the Standing Master’s Order Amending the Parenting Plan? PROCEDURAL AND FACTUAL BACKGROUND ¶2 Jennifer and Russell are the parents of H.D., who is five years old. Jennifer lives in Jackson, Wyoming, and Russell lives in Great Falls, Montana. The couple dissolved their marriage in 2012 (H.D. was two years old at the time), and when issuing the decree of dissolution, the District Court approved a stipulated parenting plan that the parties had entered. This stipulated plan provided that H.D. would split her time equally between the parties, spending two weeks at a time with each parent in their respective homes in different states. Both Jennifer and Russell contemplated enrolling H.D. in kindergarten in the fall of 2015, at which time it became apparent the stipulated plan would need to be revised. Russell filed a Motion to Modify the Parenting Plan in November 2014, and Jennifer responded with her own proposed parenting plan. The District Court’s Standing Master held a hearing in July 2015, and issued Findings of Fact, Conclusions of Law and Order Amending Parenting Plan on August 7 that placed H.D. with Jennifer during the 3 school year. The Standing Master found that both parents held a “very close and loving” relationship with H.D., and that “H.D. is well adjusted to both her communities and families” located in Jackson and in Great Falls. However, the Standing Master also found that “[d]uring Russ[ell]’s parenting time Jennifer has difficulty contacting H.D. Russ[ell] frequently does not answer the phone and Jennifer does not have uninterrupted Skype visits.” In addition, the Standing Master found that “[i]t is difficult for Jennifer to communicate with Russ[ell] regarding H.D. because Russ[ell] has blocked Jennifer’s phone number on his phone,” that “Russ[ell] has negative views of Jennifer and her home,” and that “Russ[ell] does not always discuss parenting issues with Jennifer. For example, the parties each take H.D. to the Baptist church in their area. Recently Russ[ell] has been taking H.D. to the Latter Day Saints church without discussing this with Jennifer.” ¶3 Russell filed objections to the Standing Master’s Order with the District Court, and the District Court affirmed the Order on September 29, 2015. Russell appeals. STANDARD OF REVIEW ¶4 “Two standards of review are relevant in cases involving both a standing master and the district court: the standard the district court applies to the master’s report and the standard we apply to the district court’s decision.” In re Marriage of Kostelnik, 2015 MT 283, ¶ 15, 381 Mont. 182, 357 P.3d 912 (citing In re G.J.A., 2014 MT 215, ¶ 11, 376 Mont. 212, 331 P.3d 835). We review a district court’s decision de novo to determine whether it applied the correct standard of review to a standing master’s findings of fact 4 and conclusions of law. See G.J.A., ¶ 11. “A district court reviews a standing master’s findings of fact for clear error, and its conclusions of law to determine if they are correct.” Kostelnik, ¶ 15 (citations omitted). DISCUSSION ¶5 Did the District Court err by affirming the Standing Master’s Order Amending the Parenting Plan? ¶6 Russell argues it was error for the Standing Master and the District Court to weigh his religious choice as a factor in determining child custody without a thorough evaluation of the effects of that religious choice on the child. Russell urges adoption by this Court of “an enhanced standard” that would “protect religious liberty while ensuring child custody decisions are made in the best interest of the child.” Russell offers that the new rule should require that “[b]efore placing any weight on custodial parent’s exercise of religious choice, . . . the Court must expressly determine, on competent evidence, whether that religious choice impairs the child’s emotional development. Absent that evaluation, religious choice should not be considered, whether directly or indirectly.” ¶7 Presented with the motion to amend the parenting plan, the Standing Master had to determine with which parent to place H.D. for the quickly-approaching school year. Both parents testified before the Standing Master. Jennifer testified that when H.D. was in Russell’s care for his two-week periods, she would have trouble communicating with H.D. through Skype or the phone. Jennifer further testified that she and Russell communicated exclusively through email, as Russell had blocked her number on his phone. In his testimony, Russell dismissed the breakdowns in communication during his 5 parenting time as occurring because “we get busy,” but stated that the breakdowns were not happening purposefully. He admitted that he had not been participating recently in transporting H.D. to the mutually agreed exchange location, half-way between the parties’ Wyoming and Montana homes, electing instead to have his parents take H.D. to the location in order to avoid contact with Jennifer. When asked if he had spoken to Jennifer about the decision to take H.D. to a different church in Great Falls, Russell acknowledged he had not consulted her. ¶8 In making her determination, the Standing Master entered detailed findings regarding the mandatory best interest factors set forth in § 40-4-212(1)(a)-(m), MCA. The Master found that both Jennifer and Russell “are fit and appropriate parents who provide a nurturing, secure and loving home for H.D.” She further determined, under § 40-4-212(1)(l), MCA, that “Russ[ell] has very negative views of Jennifer and her home, including long standing concerns that Jennifer is attempting to harm him. Russ[ell] does not communicate with Jennifer about important parenting issues and is not responsive to Jennifer’s efforts to stay in touch with H.D. during Russ[ell]’s parenting time.” The Master ultimately concluded that Jennifer’s proposed parenting plan was in H.D.’s best interest, and entered an Amended Final Parenting Plan accordingly. ¶9 The Standing Master’s concerns about the difficulties in communication between Russell and Jennifer were properly drawn from the evidence presented at the hearing. The Master’s reference to Russell unilaterally taking H.D. to a particular church during his parenting time was not a criticism of Russell’s religious preference, but rather an 6 example of the real problem—Russell’s deficits in cooperatively co-parenting with Jennifer. The District Court also recognized this, and after articulating the correct standard of review, affirmed the Standing Master’s Order and Amended Final Parenting Plan. See G.J.A., ¶ 11. ¶10 Upon an independent review of the record, we find no error in the District Court’s affirmance of the Standing Master’s Order. Because this case is resolved within the confines of the applicable standard of review, we decline to adopt a new constitutional standard in regard to consideration of religious factors in child custody determinations. Russell’s religious preference itself was not a factor in the Standing Master’s decision, and “as a matter of longstanding principle, courts avoid constitutional issues whenever possible.” State v. Kolb, 2009 MT 9, ¶ 13, 349 Mont. 10, 200 P.3d 504. ¶11 Affirmed. /S/ JIM RICE We concur: /S/ PATRICIA COTTER /S/ BETH BAKER /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA

March 8, 2016

de8ad33d-b291-47d6-a320-a056b91edcf8

Fellows v. Giese v. Saylor

2016 MT 45

DA 15-0392

Montana

Montana Supreme Court

DA 15-0392 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 45 CHARLES E. FELLOWS, an individual, Plaintiff and Appellee, MONTE GIESE, STEVE KELLY and WILLIAM REICHELT, Plaintiffs-Intervenors and Appellees, v. PATRICK SAYLOR, an individual; FARMERS COOPERATIVE CANAL COMPANY, ELDORADO COOPERATIVE CANAL COMPANY, TETON COOPERATIVE CANAL COMPANY; TETON COOPERATIVE RESERVOIR COMPANY; JOHN D. PEEBLES, an individual, WILLIAM S. PEEBLES, an individual; OTTIS BRYAN, an individual; and SYLVIA BRYAN, an individual, Defendants and Appellants, The Office of Water Commissioner for Perry v. Beattie Decree Case No. 371; TETON COOPERATIVE RESERVOIR COMPANY, Defendants. APPEAL FROM: Water Court of the State of Montana, Cause No. WC 2015-01, Honorable Douglas Ritter, Presiding Judge COUNSEL OF RECORD: For Appellants: Michael J.L. Cusick, Abigail R. Brown, Moore, O’Connell & Refling, PC, Bozeman, Montana March 1 2016 Case Number: DA 15-0392 2 For Appellees: Peter G. Scott, Gough, Shanahan, Johnson & Waterman, Bozeman, Montana (for Charles E. Fellows) Stephen R. Brown, Garlington, Lohn & Robinson, PLLP Missoula, Montana (for Intervenors) Submitted on Briefs: December 30, 2015 Decided: March 1, 2016 Filed: __________________________________________ Clerk 3 Justice Beth Baker delivered the Opinion of the Court. ¶1 Appellants1 appeal the order of the Water Court denying their motion to alter or amend its final order on certification that tabulated the water rights necessary to address Charles Fellows’s underlying complaint in the Ninth Judicial District Court, Teton County. This is the second time this matter has been before this Court on appeal. Fellows v. Office of Water Comm’r, 2012 MT 169, 365 Mont. 540, 285 P.3d 448 (hereafter Fellows I). The Perry Defendants raise several issues on appeal that we restate as follows: 1. Whether the water right claims in controversy were properly determined following this Court’s remand in Fellows I. 2. Whether the District Court erred in granting Fellows’s motion for substitution. ¶2 We affirm. PROCEDURAL AND FACTUAL BACKGROUND ¶3 Because the background facts are delineated in Fellows I, we restate the facts only briefly. ¶4 Montana’s Constitution requires the Legislature to “provide for the administration, control, and regulation of water rights” and to “establish a system of centralized records” for those rights. Mont. Const. art. IX, § 3(4). In implementing this constitutional mandate, the Legislature created the Water Court, which has jurisdiction over “all matters 1 Appellants are Patrick Saylor, Farmers Cooperative Canal Company, Eldorado Cooperative Canal Company, Teton Cooperative Canal Company, John D. Peebles, William S. Peebles, Ottis Bryan, and Sylvia Bryan. Appellants refer to themselves collectively as the Perry Defendants and we will do the same. 4 relating to the determination of existing water rights within the boundaries of the state of Montana.” Section 3-7-224(2), MCA. The law provides district courts with jurisdiction to enforce the provisions of water rights decrees and to supervise the distribution of adjudicated water. Tit. 3, Ch. 7, Pt. 2, MCA; Tit. 85, Ch. 2, MCA. The Water Court is in the process of adjudicating the water rights of all appropriators in Basin 41O, which includes the Teton River and Spring Creek—the sources of water at issue here. Although the Water Court has issued a temporary preliminary decree for Basin 41O, it has not yet issued a final decree. Therefore, the adjudication process in Basin 41O is still ongoing. ¶5 Fellows owns several water rights in Spring Creek near Choteau, Montana. His rights were decreed in Sands Cattle & Land Co. v. Jackson, Case 727 (Mont. 10th Judicial Dist. Ct., May 31, 1892). Fellows claims that Spring Creek is recharged by water seeping through a subsurface aquifer from a stretch of the Teton River known as the Springhill Reach. In other words, Fellows asserts that Spring Creek and the Teton River are hydrologically connected. Fellows therefore contends that maintaining the flow of Spring Creek is dependent upon maintaining water in the Springhill Reach. ¶6 The Perry Defendants own various water rights in the upper Teton River northwest of Choteau. Their rights were decreed in Perry v. Beattie, Case 371 (Mont. 11th Judicial Dist. Ct., March 28, 1908). The Ninth Judicial District Court, Teton County, now supervises the distribution of water pursuant to both Perry and Sands. The water rights decreed in Perry are administered by a water commissioner pursuant to § 85-5-101, MCA. In administering water rights under Perry, the Water Commissioner 5 has diverted water out of the Teton River into the Bateman Ditch above the Springhill Reach as a water management tool. Fellows I, ¶ 4; Eldorado Co-Op Canal Co. v. Lower Teton Joint Objectors, 2014 MT 272, ¶ 32, 376 Mont. 420, 337 P.3d 74 (hereafter Eldorado). Fellows alleges that water diversion through the Bateman Ditch diminishes the flow of water through the Springhill Reach and adversely affects the water available to satisfy his Spring Creek rights. ¶7 In February 2011, Fellows filed a complaint challenging the Water Commissioner’s administration of water under the Perry decree. Specifically, he challenged the Water Commissioner’s authority to divert water out of the Teton River by means of the Bateman Ditch. The District Court ultimately dismissed Fellows’s complaint under M. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief could be granted, and Fellows appealed. ¶8 In Fellows I, we reversed the District Court’s dismissal and remanded for further proceedings. Fellows I, ¶ 22. We agreed with the District Court that Fellows could not seek relief from the action of the Perry Water Commissioner under § 85-5-301, MCA, because he did “not derive his Spring Creek water right from the Perry decree . . . .” Fellows I, ¶ 16. We concluded, however, that Fellows could seek declaratory relief and that his allegations were sufficient to state a claim under M. R. Civ. P. 12(b)(6). Fellows I, ¶ 19. We concluded further that if Fellows could “prove hydrological connectivity between Spring Creek and the Teton River, then the next step should be certification to the chief water judge under § 85-2-406(2)(b), MCA.” Fellows I, ¶ 21. 6 ¶9 On remand, Fellows filed a motion for substitution of district court judge, which Judge Olson granted. After Judge Oldenburg assumed jurisdiction, Monte Giese, William Reichelt, and Steve Kelly (Intervenors) intervened.2 Fellows then moved for summary judgment on the issue of hydrological connectivity. Following consideration of the parties’ expert depositions, the District Court granted Fellows’s motion, concluding that Spring Creek and the Teton River are hydrologically connected. The court found it unnecessary “at this stage of the proceeding” to address the scope, extent, or timing of the connectivity. ¶10 Fellows then requested the court to certify a question to the Water Court. The Perry Defendants objected to the request; the District Court held, however, that the “applicable and appropriate scope of the determination of the rights involved in the controversy is best left to the processes of the Water Court.” Accordingly, the District Court certified the following issue for determination by the Water Court: Upon remand from the Montana Supreme Court in Cause No. 2012 MT 169, pursuant to this Court’s determination of the hydrological connectivity between the Teton River and Spring Creek, and pursuant to MCA Section 85-2-406(2)(b), the Ninth Judicial District Court certifies this matter to the Montana Water Court for determination of the existing rights involved in this controversy, pursuant to Chapter 2 of Title 85, MCA. Upon its determination, the Water Court shall issue to the District Court a list or tabulation of rights, priorities, and approved points of diversion in a form determined appropriate by the Water Judge. The Water Court issued its final order on certification on March 13, 2015. 2 Intervenors claim water rights from the Teton River and were parties in related cases before this Court. Eldorado, ¶ 1; Giese v. Blixrud, 2012 MT 170, ¶ 1, 365 Mont. 548, 285 P.3d 458. Both Eldorado and Giese concerned the Water Commissioner’s diversion of water from the Teton River into the Bateman Ditch. Eldorado, ¶ 7; Giese, ¶ 6. 7 ¶11 In its final order, the Water Court concluded that the purpose of certification under § 85-2-406(2)(b), MCA, is “to provide sufficient information to enable the District Court to resolve the immediate controversy.” Because it concluded that the underlying controversy stemmed from the Water Commissioner’s use of the Bateman Ditch as a water management tool, the Water Court determined that the scope of the controversy should be defined by Fellows’s water right claims and by the water right claims that historically utilized the Bateman Ditch. Consequently, the Water Court concluded that three Patrick Saylor Teton River water right claims, a Choteau Cattle Company Teton River water right claim, and Fellows’s Spring Creek water right claims “constitute the claims properly before the Water Court in this certification.” By the time of its certification order, all of the Saylor, Choteau Cattle Company, and Fellows water right claims had been adjudicated in the temporary preliminary decree. The court therefore concluded that further proceedings were not required in answering the certification issue. The Water Court tabulated the claims at issue and ordered that the matter be closed and returned to the District Court. ¶12 The Perry Defendants then filed a M. R. Civ. P. 59(e) motion to alter or amend the Water Court’s judgment. The motion requested that the Water Court withdraw its final order and return the matter to the District Court “to properly identify the water rights involved in the controversy, as defined by the allegations of Fellows’ First Amended Complaint.” The Water Court denied the motion. The Perry Defendants appeal. 8 STANDARDS OF REVIEW ¶13 We review a trial court’s denial of a M. R. Civ. P. 59(e) motion for abuse of discretion. In re Marriage of Anderson, 2013 MT 238, ¶ 13, 371 Mont. 321, 307 P.3d 313. A trial court abuses its discretion when it acts arbitrarily, without employment of conscientious judgment, or exceeds the bounds of reason resulting in substantial injustice. RN & DB, LLC v. Stewart, 2015 MT 327, ¶ 14, 381 Mont. 429, 362 P.3d 61. We review a trial court’s interpretation of a statute de novo. City of Livingston v. Mont. Pub. Emps. Ass’n ex rel. Tubaugh, 2014 MT 314, ¶ 11, 377 Mont. 184, 339 P.3d 41. Whether a court has jurisdiction over the parties or the subject matter is a legal conclusion that we review de novo. Pinnow v. Mont. State Fund, 2007 MT 332, ¶ 13, 340 Mont. 217, 172 P.3d 1273. DISCUSSION ¶14 1. Whether the water right claims in controversy were properly determined following this Court’s remand in Fellows I. ¶15 In its order denying the Perry Defendants’ motion to alter or amend its judgment, the Water Court first concluded that it had jurisdiction to determine the scope of the certification question because the Water Court’s role under § 85-2-406(2)(b), MCA, “is to provide sufficient information to the District Court to facilitate resolution of the underlying water distribution controversy.” The court next concluded that “Fellows has decreed rights from Spring Creek[;] he is not claiming the Teton River as the source for these water rights.” The court reiterated that “Fellows is seeking the ability to participate in any District Court proceedings on use of the Bateman Ditch as a water conservation 9 measure.” The Water Court therefore concluded that it correctly identified the scope of the controversy and appropriately tabulated “the rights that historically used the Bateman Ditch and the Spring Creek claims Fellows is seeking to protect.” ¶16 On appeal, the Perry Defendants raise several points of error in asserting that the Water Court abused its discretion in denying their M. R. Civ. P. 59(e) motion, including: that the Water Court did not follow the law of the case; that certification under § 85-2-406(2)(b), MCA, was inappropriate; and that the Water Court failed to define the scope of the controversy, improperly determined the purpose of the tabulation, and inadequately tabulated the rights in controversy. We address each argument in turn. ¶17 First, the Perry Defendants contend that the law of the case established in Fellows I was not followed because Fellows’s rights were not properly certified for determination with a modified Teton River source. They assert that in Fellows I, we implicitly contemplated that the purpose of certification “was for Fellows’ rights to be determined as Teton rights vis-à-vis the Perry Decree users.” They therefore contend that the Water Court abused its discretion in determining that Spring Creek is the source of Fellows’s water right claims in controversy. ¶18 We are not persuaded by the Perry Defendants’ contention that we implicitly concluded in Fellows I that Fellows’s rights must be determined with a modified Teton River source. The Perry Defendants rely on the well-established rule 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 10 progress . . . .” Fiscus v. Beartooth Elec. Coop., 180 Mont. 434, 437, 591 P.2d 196, 197 (1979) (citation and internal quotations omitted). In Fellows I, we stated multiple times explicitly that Spring Creek is the source of Fellows’s water right claims involved in the controversy. E.g., Fellows I, ¶¶ 2, 16, 21. We did not hold that the Water Court on certification must determine Fellows’s rights as Teton River rights. Accordingly, we conclude that the Water Court adhered to the law of the case and therefore did not abuse its discretion in concluding that the source of Fellows’s rights in controversy is Spring Creek, not the Teton River. ¶19 The Perry Defendants next argue that certification under § 85-2-406(2)(b), MCA, was improper based on a “holistic reading” of the statute. They contend that certification is appropriate under § 85-2-406(2)(b), MCA, only if the rights involved in the controversy have not yet been determined. Because the rights in controversy here are “determined claims,” the Perry Defendants assert that the Water Court could perform only an enforcement tabulation pursuant to § 85-2-406(4), MCA. They next argue that the Water Court lacked jurisdiction under § 85-2-406(2)(b), MCA, to determine which parties and water rights were involved in the underlying water distribution controversy. The statute, they contend, requires that the District Court make those determinations prior to certification. Without a determination by the District Court as to which parties and which water rights are involved in the controversy, the Perry Defendants claim that certification under § 85-2-406(2)(b), MCA, was inappropriate. 11 ¶20 In Fellows I, we pronounced that if Fellows could establish “hydrological connectivity between Spring Creek and the Teton River, then the next step should be certification to the chief water judge under § 85-2-406(2)(b), MCA.” Fellows I, ¶ 21. Upon remand, the District Court established hydrological connectivity on summary judgment and then followed this Court’s direction by certifying a question to the Water Court pursuant to § 85-2-406(2)(b), MCA. ¶21 The role of the judge in construing a statute “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. It is a well-established rule that “[w]hen construing a statute, it must be read as a whole, and its terms should not be isolated from the context in which they were used by the Legislature.” State v. Price, 2002 MT 229, ¶ 47, 311 Mont. 439, 57 P.3d 42 (citing State v. Nye, 283 Mont. 505, 510, 943 P.2d 96, 99 (1997)). It also is well-established that “statutes should be construed according to the plain meaning of the language used therein.” Price, ¶ 47 (citing Nye, 283 Mont. at 510, 943 P.2d at 99). Moreover, we have concluded, “Section 85-2-406(2)(b), MCA, should not be narrowly interpreted so as to frustrate solutions to water distribution controversies, but rather should be applied so as to allow for the expeditious resolution of these controversies.” Giese, ¶ 16. ¶22 Section 85-2-406(2)(b), MCA, initially requires that a “water distribution controversy” exist before a party may petition a district court for certification. As the Perry Defendants acknowledge, this matter “is undeniably a water distribution 12 controversy”; therefore, the first requirement for certification under § 85-2-406(2)(b), MCA, is met. Giese, ¶ 11. The statute further provides that, for certification to be proper, the water distribution controversy must “arise[ ] upon a source of water in which not all existing rights have been conclusively determined according to part 2 of this chapter . . . .” Section 85-2-406(2)(b), MCA. We determined in Giese that certification under § 85-2-406(2)(b), MCA, was appropriate based in part on the fact “that not all existing rights on the Teton River have been conclusively determined.” Giese, ¶ 15. We conclude that the plain meaning of the language used in § 85-2-406(2)(b), MCA, is that if all existing rights on the source of water in controversy have not been conclusively determined by final adjudication under the 1973 Water Use Act, then a party involved in a water distribution controversy may petition the court for certification. ¶23 Although the rights at issue here were decreed in Perry and Sands, those rights— along with other claimed existing water rights in Basin 41O—are subject to a temporary preliminary decree. Teton Co-Op Canal Co. v. Teton Coop Reservoir Co., 2015 MT 344, 382 Mont. 1, ___ P.3d ___; Teton Coop. Reservoir Co. v. Farmers Coop. Canal Co., 2015 MT 208, 380 Mont. 146, 354 P.3d 579; Eldorado; Skelton Ranch, Inc. v. Pondera Cnty. Canal & Reservoir Co., 2014 MT 167, 375 Mont. 327, 328 P.3d 644; Heavirland v. State, 2013 MT 313, 372 Mont. 300, 311 P.3d 813. Water right claims in Basin 41O are still working their way through the adjudication process. See § 85-2-231(1), MCA (providing that the Water Court “may issue a temporary preliminary decree prior to the issuance of a preliminary decree if the temporary preliminary decree is necessary for the 13 orderly adjudication or administration of water rights”). As such, all the existing rights in the sources of water at issue here have not been conclusively determined pursuant to Title 85, chapter 2, part 2, MCA. See § 85-2-227(1), MCA (providing in pertinent part, “For purposes of administering water rights, the provisions of a temporary preliminary decree or a preliminary decree, as modified after objection and hearings, supersede a claim of existing right until a final decree is issued.” (emphasis added)). Fellows is not seeking enforcement of a temporary preliminary decree under § 85-2-406(4), MCA, but determination of his rights and relative priorities in order to challenge delivery of water through the Bateman Ditch. Accordingly, Fellows’s petition for certification was proper pursuant to § 85-2-406(2)(b), MCA. ¶24 The Perry Defendants next assert that the plain language of § 85-2-406(2)(b), MCA, permits only district courts to identify which parties and water rights are involved in the underlying water distribution controversy. Section 85-2-406(2)(b), MCA, provides, in relevant part, “If a certification request is made, the district court shall certify to the chief water judge the determination of the existing rights that are involved in the controversy according to part 2 of this chapter.” We conclude that the plain language of the statute explicitly confers on the Water Court, when a district court requests, the authority to “determin[e] [ ] the existing rights that are involved in the controversy according to part 2 of this chapter.” Section 85-2-406(2)(b), MCA. ¶25 The Perry Defendants’ overly narrow interpretation of the statute would “frustrate solutions to water distribution controversies.” Giese, ¶ 16. Our construction of the terms 14 used in the statute is consistent with the context in which the terms were used by the Legislature. Under Montana law, “the water court is vested with exclusive jurisdiction relative to all matters relating to the determination of existing water rights within the boundaries of the State of Montana.” Baker Ditch Co. v. District Ct., 251 Mont. 251, 255, 824 P.2d 260, 260 (1992) (emphasis added) (citing § 3-7-501, MCA; Mildenberger v. Galbraith, 249 Mont. 161, 815 P.2d 130 (1991)). Given the Water Court’s comprehensive oversight of the adjudication process, its jurisdiction necessarily includes the authority to identify those parties and rights involved in a water distribution controversy based on the adjudication process, the claims made in the affected area, and the evidence before the Water Court. See Giese, ¶ 18 (instructing a district court “to certify all appropriate issues to the Chief Water Judge as provided in § 85-2-406(2)(b), MCA . . .” (emphasis added)). Accordingly, we conclude that under the plain language and the context of the terms used in § 85-2-406(2)(b), MCA, the Water Court has authority to determine which parties and rights are involved in a water distribution controversy certified by a district court. Such an application of the statute will “allow for the expeditious resolution of these controversies.” Giese, ¶ 16. ¶26 The Perry Defendants’ final contention is that the Water Court failed to define adequately the scope of the controversy based on the parties’ pleadings. They assert that the Water Court reframed the scope of the controversy too narrowly because “in order to fully determine the water distribution controversy pled by Fellows, it is necessary to determine the validity of the water right claims of [all of the named Defendants] allegedly 15 causing damage to Fellows.” The Perry Defendants allege that the underlying controversy is broader than the Water Commissioner’s use of the Bateman Ditch because Fellows alleged in his complaint that the named Defendants were appropriating his “recharge water,” giving rise to a claim for damages. Because the Water Court did not include all of the named Defendants in its order, they assert that the Water Court provided the District Court with an incomplete tabulation of the rights in controversy. Furthermore, they contend that the Water Court made an incorrect conclusion that the purpose of the certification was not enforcement of rights. ¶27 In its final order, the Water Court concluded that “[t]he scope of certification refers to the water right claims that require a review by the Water Court in order to provide the necessary information to the District Court.” The Water Court further determined that “[t]he point of certification is to provide sufficient information to the District Court to facilitate resolution of the underlying water distribution controversy,” and that “[t]he scope of the certification is typically defined by that underlying controversy.” In determining the scope and the purpose of the certification, the court concluded: Fellows requested certification for a limited purpose. He seeks the right to object if other water users ask to divert water into the Bateman Ditch as a water saving measure. He is not questioning the elements of any specific water right. He has not asserted the right to place a call on any specific water right. The water right claims involved need not include all Basin 41O water rights that may benefit from use of the Bateman Ditch as a water saving measure or all water rights that may, through their use, have an adverse impact on the Springhill Reach or Spring Creek. Fellows is specifically asking for the right to participate in any future proceeding on use of the Bateman Ditch as a water saving measure, he is not seeking 16 enforcement of all water rights and permits upgradient from his point of diversion. The Water Court noted that we had affirmed its prior tabulation of water right claims associated with the Bateman Ditch in Eldorado, and concluded that the “same water right claims identified in the [Eldorado] tabulation are at issue in this certification case.” As such, the Water Court concluded that Saylor’s, Choteau Cattle Company’s, and Fellows’s water right claims are the existing rights that are involved in the underlying controversy before the District Court. ¶28 We agree with the Water Court that the purpose of certification under § 85-2-406(2)(b), MCA, is to provide sufficient information to the District Court to facilitate resolution of the underlying water distribution controversy. See Giese, ¶ 16 (concluding that § 85-2-406(2)(b), MCA, “should be applied so as to allow for the expeditious resolution of [water distribution] controversies”). We therefore agree that the underlying water distribution controversy defines the scope of the certification. The Water Court’s order, like any court’s judgment, “must be within the issues presented to the court.” Nat’l Sur. Corp. v. Kruse, 121 Mont. 202, 205-06, 192 P.2d 317, 319 (1948). Accordingly, the Water Court properly looked to Fellows’s First Amended Complaint in determining the scope of the controversy and purpose of the certification. ¶29 A review of that complaint establishes that Fellows alleged that maintaining the flow of Spring Creek is dependent upon “Recharge Water” seeping through a subsurface aquifer located at the Springhill Reach. Fellows further alleged that the Water Commissioner “altered the delivery of water in [Perry] to allow for diversion and use of 17 Recharge Water by unknown water users (‘Defendants’)” by means of the Bateman Ditch. Fellows claimed that the Water Commissioner’s practice of diverting water through the Bateman Ditch impaired the use of his Spring Creek rights. Fellows therefore sought to enjoin the Water Commissioner from using the Bateman Ditch as a water management tool and pursued relief from the practice under both private and public nuisance as well as negligence theories. ¶30 The Perry Defendants’ assertions that the Water Court erred in defining the scope of the controversy and determining the purpose of the certification are unpersuasive. Based on our review of the issues presented in Fellows’s Amended Complaint, we conclude that the Water Court properly opined that Fellows requested certification for the limited purpose of obtaining the right to object when water was diverted through the Bateman Ditch. His complaint specifically sought an injunction “barring the distribution, diversion or use of Recharge Water” by means of the Bateman Ditch. Furthermore, the Water Court correctly determined that the scope of the certification was limited to use of the Bateman Ditch. Fellows’s complaint alleges that the groundwater aquifer located at the Springhill Reach is the primary source of water in Spring Creek; therefore, he asserts, the diversion of water through the Bateman Ditch impacts his Spring Creek rights. The Water Court appropriately confined its order to the controversy before the District Court—use of the Bateman Ditch to deliver water. ¶31 Moreover, the Water Court did not err in determining that the claims properly before the court on certification were Saylor’s and Choteau Cattle Company’s Teton 18 River water right claims and Fellows’s Spring Creek water right claims. Upon certification, the Water Court is tasked with determining “the existing rights that are involved in the controversy . . . .” Section 85-2-406(2)(b), MCA (emphasis added). As the Water Court noted, we concluded in Eldorado that it properly tabulated the “water rights that can be diverted through the Bateman Ditch.” Eldorado, ¶ 36. Because the scope of the instant controversy is limited to the use of the Bateman Ditch, it was unnecessary for the Water Court to tabulate rights beyond those that historically have used the Bateman Ditch and Fellows’s Spring Creek rights. The Water Court properly determined the existing rights involved in the controversy. ¶32 The only purpose of the certification order is the tabulation and relative priority of Fellows’s Spring Creek rights and the rights of those using the Bateman Ditch for delivery of their Teton River water. It will be in the District Court—when and if Fellows challenges use of the Bateman Ditch as a management tool—that he will need to prove that diverting water through the ditch actually and as a matter of hydrological fact impairs his water right. It is then the District Court’s function to “supervise the distribution of water among all appropriators.” Section 85-2-406(1), MCA. ¶33 Although the Perry Defendants make additional arguments, we conclude that the contentions discussed above are dispositive. Based on the foregoing analysis, we conclude the following: that the Water Court correctly determined that Spring Creek is the source of Fellows’s rights involved in the controversy; that certification pursuant to § 85-2-406(2)(b), MCA, was proper; and that the Water Court did not err in determining 19 the scope of the controversy, defining the purpose of the certification, or tabulating the applicable rights involved in the controversy. Accordingly, we hold that the Water Court did not abuse its discretion in denying the Perry Defendants’ motion to amend and that the water right claims in controversy were properly determined following this Court’s remand in Fellows I. ¶34 2. Whether the District Court erred in granting Fellows’s motion for substitution. ¶35 Section 3-1-804, MCA, provides for the substitution of district court judges; it provides, however, that there is no right of substitution of “a judge supervising the distribution of water under 85-2-406, including supervising water commissioners under Title 85, chapter 5, part 1.” Section 3-1-804, MCA. The Perry Defendants assert that the substitution of Judge Olson was improper because this case is “undeniably a water distribution controversy . . . .” The Perry Defendants further contend that the issue is properly before this Court on appeal. They rely on M. R. App. P. 6(1), which provides that this Court may review “all previous orders and rulings excepted or objected to which led to and resulted in the judgment.” Finally, they argue that the appeal is timely pursuant to M. R. App. P. 6(3)(k). ¶36 Under M. R. App. P. 6(3)(k), an aggrieved party in a civil case may appeal “[f]rom an order granting or denying a motion for substitution of judge” so long as “the order is the court’s final decision on the referenced matter.” In civil cases, M. R. App. P. 4(5)(a)(i) requires that “the notice of appeal shall be filed with the clerk of the supreme court within 30 days from the date of entry of the judgment or order from which the 20 appeal is taken.” M. R. App. P. 4(2)(c) provides, “Except where the supreme court grants an out-of-time appeal under section (6) of this rule, the timely filing of a notice of appeal or cross-appeal is required in order to invoke the appellate jurisdiction of the supreme court.” We conclude that an order pertaining to a motion for substitution of judge under M. R. App. P. 6(3)(k) must satisfy M. R. App. P. 4’s requirements for being timely. Substitution of a presiding judge is a right that is lost if not exercised early in the case. Section 3-1-804(1)(a), MCA (providing that a motion for substitution in a civil action must be filed within thirty days after either “the first summons is served or an adverse party has appeared[,] . . . [or] after service has been completed in compliance with M. R. Civ. P. 4,” depending on which party files the motion). ¶37 It would defeat the purpose of the rule to allow a party to appeal a substitution order only after the case has been finally decided. Here, the order granting Fellows’s motion for substitution of judge was entered in August 2013. The parties thereafter engaged in discovery and summary judgment proceedings in the District Court. That court certified the case to the Water Court, which conferred with the parties, reviewed the District Court record, issued its opinion and an order on certification, and then considered and denied a motion to alter or amend its order. The process consumed approximately two years. Now that the decision is made, the Perry Defendants seek to begin the process anew because the initial substitution of Judge Olson was improper. The rules do not support their argument. We conclude that the Perry Defendants’ appeal of the 21 substitution order is untimely because the notice of appeal from the order was not filed within 30 days. ¶38 Upon remand, however, the case will return to Judge Olson as the judge responsible under § 85-2-406(1), MCA, for supervising both the distribution of water under Perry and Sands and the Water Commissioners appointed to administer the water under both decrees. CONCLUSION ¶39 We affirm the Water Court’s order denying the Perry Defendants’ M. R. Civ. P. 59(e) motion and remand to the Ninth Judicial District Court, the Honorable Robert Olson presiding, for further proceedings. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT /S/ JAMES JEREMIAH SHEA

March 1, 2016

f7063357-62c9-4ecc-8643-d64d8ff3dd1d

State v. Langley

2016 MT 67

DA 15-0538

Montana

Montana Supreme Court

DA 15-0538 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 67 STATE OF MONTANA, Plaintiff and Appellee, v. JAMES WALLACE LANGLEY, Defendant and Appellant. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DC-14-062B Honorable Robert B. Allison, 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, C. Mark Fowler, Assistant Attorney General, Helena, Montana Edward J. Corrigan, Flathead County Attorney, Allison Howard, Deputy County Attorney, Kalispell, Montana Submitted on Briefs: February 24, 2016 Decided: March 22, 2016 Filed: __________________________________________ Clerk March 22 2016 Case Number: DA 15-0538 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 James Wallace Langley appeals a judgment of the Eleventh Judicial District Court, Flathead County, sentencing him to the Department of Corrections (DOC) for ten years, with five years suspended. We address the following issue on appeal: Whether the District Court erred when it denied Langley’s motion to withdraw his no contest plea. ¶2 We reverse and remand for further proceedings consistent with this Opinion. PROCEDURAL AND FACTUAL BACKGROUND ¶3 On February 6, 2014, the State charged Langley with one count of Arson, a felony, in violation of § 45-6-103(1)(a), MCA. Langley entered into a plea agreement with the State on January 22, 2015. The written plea agreement provides in part: Pursuant to § 46-12-211(1)(b), MCA, and conditioned upon the understandings specified below: The Defendant will enter into a Nolo Contendere plea to Count I, Arson, pursuant to § 46-12-212(2). The State will recommend to the Court that SENTENCING BE DEFERRED FOR 6 YEARS UNDER THE FOLLOWING TERMS AND CONDITIONS: . . . The State agrees that the Defendant shall be entitled to: A. Enter a Nolo Contendere plea. B. Withdraw his plea subsequent to the entry of it in the event the State fails to perform its obligations pursuant to this agreement; or C. If the Court refuses to accept the Defendant’s Nolo Contendere plea. 3 The agreement’s Acknowledgment of Rights section provides that “in exchange for a particular plea, the prosecutor will recommend a particular sentence” and that “the recommendation of the county attorney in no way binds the court when imposing sentence.” ¶4 At the January 22, 2015 change of plea hearing, the District Court conducted a colloquy to establish that Langley was entering into a knowing, intelligent, and voluntary plea. During questioning, Langley acknowledged his understanding that the court was not bound by the sentencing recommendation in the plea agreement and that the court could impose “something different than what the plea agreement calls for.” The court then set a sentencing hearing date for March 12, 2015. ¶5 During the March sentencing hearing, the District Court informed the parties that it was not inclined to impose a deferred sentence and asked how counsel would prefer to proceed. Langley’s attorney moved to withdraw the plea. The court replied, “I would normally grant that motion if it was a binding plea agreement but it’s not, so I think that would have to be filed and formally briefed.” The court stated that it would give Langley more time to present evidence as to why he should be given a deferred sentence, and postponed sentencing. ¶6 Before the next hearing, Langley filed a motion to withdraw his no contest plea and requested a hearing. Langley’s motion asserted, in part, that the District Court did not comply with the statutory procedures for rejecting plea agreements and that the court must allow him to withdraw his plea pursuant to § 46-12-211(1)(b) and (4), MCA. The 4 State opposed Langley’s motion, arguing that the plea agreement did not allow Langley to withdraw his plea, and that any ambiguity should be resolved against Langley because his attorney drafted it. ¶7 The court held a hearing on May 27, 2015, to discuss Langley’s motion to withdraw his no contest plea; however, Langley’s attorney informed the court that he was not prepared to proceed with the hearing because he “just got back into town last night, and [he] missed [the hearing] on the calendar.” The court allowed Langley’s attorney to file a reply brief despite missing the filing deadline. The court informed the parties that it had not yet decided whether to accept or reject the plea agreement. The court also determined that the motion to withdraw the no contest plea would be decided without a hearing and Langley’s attorney agreed to waive that hearing. Langley filed his reply brief two days later. ¶8 On June 3, 2015, the court denied Langley’s motion to withdraw his plea. The court based its order primarily on the conclusion that Langley entered the plea “voluntarily” and “knowingly.” The court concluded that it “fully complied with the statutory pleas [sic] agreement procedure set forth in Section 46-12-211, MCA,” because the court “discussed the fact that it was not bound by the plea agreement” and “specifically inquired whether, despite the fact that [Langley] could receive a different sentence, [Langley] was willing to enter a plea.” ¶9 The District Court held a sentencing hearing on June 11, 2015. After presenting witness testimony, Langley and the State—which had admitted to being bound by the 5 agreement—both asked the court to follow the plea agreement. The court then explained why it would not follow the plea agreement based on the facts of the case, and pronounced that it would sentence Langley to the DOC for ten years with five years suspended. ¶10 On July 20, 2015, Langley filed a petition for writ of habeas corpus with this Court. In his petition, Langley asserted that his sentence was illegal because the plea agreement was of the type contemplated in § 46-12-211(1)(b), MCA, and therefore the District Court should have allowed him to withdraw his plea pursuant to § 46-12-211(4), MCA. We denied Langley’s petition, concluding that habeas relief was not available and that Langley’s remedy was a direct appeal. Langley v. Batista, No. OP 15-0430, Or. (Mont. Sept. 1, 2015). ¶11 Thereafter, on August 5, 2015, the District Court entered final judgment, sentencing Langley to the DOC for ten years with five years suspended and recommending that Langley be placed in an appropriate treatment facility. Represented by a different attorney, Langley appeals. STANDARDS OF REVIEW ¶12 The appeal of an order denying a motion to withdraw a plea presents a question of law that we review de novo. State v. Zunick, 2014 MT 239, ¶ 10, 376 Mont. 293, 339 P.3d 1228. A plea agreement is a contract and is subject to contract law standards. State v. Shepard, 2010 MT 20, ¶ 8, 355 Mont. 114, 225 P.3d 1217. The construction and 6 interpretation of a contract are questions of law that we review for correctness. Ophus v. Fritz, 2000 MT 251, ¶ 19, 301 Mont. 447, 11 P.3d 1192. DISCUSSION ¶13 Whether the District Court erred when it denied Langley’s motion to withdraw his no contest plea. ¶14 Section 46-12-211, MCA, provides in pertinent part: (1) The prosecutor and the attorney for the defendant, or the defendant when acting pro se, may engage in discussions with a view toward reaching an agreement that, upon the entering of a plea of guilty or nolo contendere to a charged offense or to a lesser or related offense, the prosecutor will do any of the following: (a) move for dismissal of other charges; (b) agree that a specific sentence is the appropriate disposition of the case; or (c) make a recommendation, or agree not to oppose the defendants’ request, for a particular sentence, with the understanding that the recommendation or request may not be binding upon the court. (2) . . . [I]f a plea agreement has been reached by the parties, the court shall, on the record, require a disclosure of the agreement in open court or, on a showing of good cause in camera, at the time that the plea is offered. If the agreement is of the type specified in subsection (1)(a) or (1)(b), the court may accept or reject the agreement or may defer its decision as to the acceptance or rejection until there has been an opportunity to consider the presentence report. If the agreement is of the type specified in subsection (1)(c), the court shall advise the defendant that, if the court does not accept the recommendation or request, the defendant nevertheless has no right to withdraw the plea. . . . (4) If the court rejects a plea agreement of the type specified in subsection (1)(a) or (1)(b), the court shall, on the record, inform the parties of this fact and advise the defendant that the court is not bound by the plea agreement, 7 afford the defendant an opportunity to withdraw the plea, and advise the defendant that if the defendant persists in the guilty or nolo contendere plea, the disposition of the case may be less favorable to the defendant than that contemplated by the plea agreement. Section 46-12-211(1), (2), (4), MCA. ¶15 The State argues that the plea agreement is facially ambiguous because its language “is not reasonably susceptible to just one interpretation regarding the statutory type of plea agreement the parties formed.” The State contends that the language stating that “the prosecutor will recommend a particular sentence” and that “the court [is not] bound by the agreement” tracks some of the critical statutory language in § 46-12-211(1)(c), MCA. Such language, according to the State, contradicts the agreement’s express reference to § 46-12-211(1)(b), MCA. The State claims that the plea agreement is ambiguous because the two types of plea agreements implicated in the agreement are irreconcilable—each agreement entails different specific procedures owed to the defendant if a court chooses not to follow the recommendation. The State therefore argues that the rule of contract construction set forth in § 28-3-206, MCA, requires this Court to construe the agreement against Langley because his attorney drafted it. The State further argues that Langley’s acknowledgments during the plea colloquy support interpreting the plea agreement under § 46-12-211(1)(c), MCA. ¶16 Langley asserts that he and the State entered into an unambiguous plea agreement of the type contemplated in § 46-12-211(1)(b), MCA, because the plea agreement specifically references that section. Langley argues that the language about the court being “bound” by the agreement is insignificant because a district court is not bound by 8 the parties’ plea agreement under any circumstances. Langley contends that the District Court’s confusion of the law surrounding plea agreements does not render the agreement ambiguous. Consequently, Langley asserts that the court was required to afford Langley the opportunity to withdraw his plea under § 46-12-211(4), MCA, and, by not doing so, the court committed reversible error. Langley asks this Court to remand his case to the District Court with instructions to conduct another sentencing hearing and either accept the agreed sentence or give Langley the opportunity to withdraw the plea. ¶17 “‘A plea agreement is a contract between the State and a defendant and is subject to contract law standards.’” Shepard, ¶ 14 (quoting State v. Rardon, 2002 MT 345, ¶ 18, 313 Mont. 321, 61 P.3d 132). If the contract language is clear and unambiguous, it is a court’s duty to enforce the contract as drafted and executed by the parties. Shepard, ¶ 14. An ambiguity exists when the language of a contract, as a whole, is reasonably subject to two different interpretations. Richards v. JTL Group, Inc., 2009 MT 173, ¶ 26, 350 Mont. 516, 212 P.3d 264 (citation omitted). “An ambiguity’s existence must be determined on an objective basis.” Richards, ¶ 26. ¶18 Objectively, the plea agreement, as whole, could reasonably be interpreted as invoking either § 46-12-211(1)(b), MCA, or § 46-12-211(1)(c), MCA. While the plea agreement explicitly references § 46-12-211(1)(b), MCA, it also contains language that closely tracks § 46-12-211(1)(c), MCA. Section 46-12-211(1)(c), MCA, allows the prosecutor to “make a recommendation” for a particular sentence “with the understanding 9 that the recommendation or request may not be binding upon the court.” The plea agreement’s Acknowledgment of Rights section includes the following language: j) I understand that a plea bargain agreement is an agreement between a defendant and a prosecutor and that in exchange for a particular plea, the prosecutor will recommend a particular sentence. l) I understand that on my plea alone, I could lawfully be sentenced to the maximum punishment authorized for the offense to which I plead guilty and that the recommendation of the county attorney in no way binds the court when imposing sentence. (Emphasis added.) The agreement also states that Langley is entitled to withdraw his plea if the State fails to perform its obligations or if the court refuses to accept the nolo contendere plea, but does not state that Langley may withdraw if the court refuses to accept the recommended sentence. Because there is an incongruity between the language of the agreement and the type of agreement invoked by the statutory provision referenced in the plea agreement, we conclude that it is ambiguous. ¶19 Once we determine that a contract is ambiguous, we resolve the ambiguity by applying rules of construction, Morning Star Enterprises v. R.H. Grover, Inc., 247 Mont. 105, 111, 805 P.2d 553, 557 (1991), and by considering extrinsic evidence of the parties’ intent, Ophus, ¶ 29. We generally construe uncertainties in contracts “against the party who caused the uncertainty to exist,” Section 28-3-206, MCA, which typically is the party who drafted the agreement, Ophus, ¶ 31. ¶20 We have not had occasion to determine whether to apply this rule of construction to plea agreements. We have, however, resolved doubts and ambiguities in favor of criminal defendants in other circumstances. State v. Hendrickson, 2014 MT 132, ¶ 14, 10 375 Mont. 136, 325 P.3d 694 (“If any doubt exists on the basis of the evidence presented regarding whether a guilty plea was voluntarily or intelligently made, the doubt must be resolved in favor of the defendant.”); State v. Garcia, 2003 MT 211, ¶ 36, 317 Mont. 73, 75 P.3d 313 (“‘[C]lose questions’ regarding motions to continue should be resolved in favor of the defendant . . . .”); State v. Van Robinson, 248 Mont. 528, 534, 813 P.3d 967, 971 (1991) (“Any ambiguity regarding the applicability of [a statutory exception] must be resolved in favor of the defendant.”). ¶21 Federal courts consistently hold that ambiguities or inconsistencies in plea agreements are construed “‘in favor of the defendant, ordinarily placing on the government responsibility for any lack of clarity.’” United States v. Avery, 719 F.3d 1080, 1084 (9th Cir. 2013) (quoting United States v. Franco-Lopez, 312 F.3d 984, 989 (9th Cir. 2002)), accord United States v. Giorgi, 840 F.2d 1022, 1026 (1st Cir. 1988) (holding that “the government must shoulder a greater degree of responsibility for lack of clarity in a plea agreement”); United States v. Harvey, 791 F.2d 294, 300 (4th Cir. 1986) (holding that “both constitutional and supervisory concerns require holding the Government to a greater degree of responsibility than the defendant (or possibly than would be either of the parties to commercial contracts) for imprecisions or ambiguities in plea agreements”); Innes v. Dalsheim, 864 F.2d 974, 979 (2d Cir. 1988) (concluding that “the state must bear the burden for any lack of clarity in the [plea] agreement and ambiguities should be resolved in favor of the defendant”). 11 ¶22 We find this authority persuasive and conclude that an ambiguity in a plea agreement should be construed in favor of the defendant. Accordingly, we construe this plea agreement’s ambiguity in Langley’s favor and examine the record to ascertain evidence of the parties’ intent. ¶23 We are unconvinced by the State’s argument that the District Court’s statements during the January 2015 plea colloquy about not being “bound” by the sentencing recommendation in the plea agreement resolve the ambiguity in favor of § 46-12-211(1)(c), MCA. As Langley correctly points out, a court is not bound by a plea agreement between the parties—whether the agreement is made pursuant to § 46-12-211(1)(a), (b), or (c), MCA. Section 46-12-211(2), MCA (“If the agreement is of the type specified in subsection (1)(a) or (1)(b), the court may accept or reject the agreement . . . .”); § 46-12-211(1)(c) (providing that the “recommendation or request may not be binding upon the court”) (emphases added). Moreover, the court did not advise Langley at the time the plea was offered that he would have no right to withdraw the plea if the court chose not to accept the plea agreement—which is required for a § 46-12- 211(1)(c), MCA, plea agreement. Section 46-12-211(2), MCA (providing that “the court shall advise the defendant that, if the court does not accept the recommendation or request, the defendant nevertheless has no right to withdraw the plea”). ¶24 The plea agreement states expressly that it is entered pursuant to § 46-12-211(1)(b), MCA, and does not mention § 46-12-211(1)(c), MCA. Defense counsel’s statements during the sentencing hearing illustrate that he believed the plea 12 agreement to be a § 46-12-211(1)(b), MCA, agreement. Immediately after the court indicated that it was not inclined to follow the plea agreement, Langley’s counsel moved to withdraw the plea. After the court deferred imposing a sentence during that hearing, Langley filed a motion to withdraw the plea pursuant to § 46-12-211(1)(b), MCA. Again, Langley asserted that the plea was “specifically entered pursuant to § 46-12-211(1)(b)” in his reply brief on that motion. Defense counsel’s contemporaneous motion as soon as the court indicated rejection of the recommended sentence is strong indication of the Defendant’s intent. ¶25 Resolving the ambiguities in Langley’s favor, and upon consideration of the record, we conclude that the plea agreement in this case should be construed as a § 46-12-211(1)(b), MCA, agreement. At the time the court rejects a § 46-12-211(1)(b), MCA, plea agreement, it must, on the record, inform the parties of this fact and provide the ensuing advisories: 1) advise the defendant that the court is not bound by the plea agreement, 2) afford the defendant the opportunity to withdraw the plea, and 3) advise the defendant that if he persists in the nolo contendere plea, the disposition of the case may be less favorable to him than contemplated by the plea. Zunick, ¶ 16; § 46-12-211(4), MCA. As such, the District Court erred by not following the required procedures for rejecting the parties’ plea agreement. CONCLUSION ¶26 We reverse the District Court’s judgment and remand with instructions to conduct another sentencing hearing. If the court accepts the plea agreement at that time, the court 13 shall sentence Langley in accordance with the plea agreement. If the court rejects the plea agreement again, it must issue the full statutory advisement and give Langley the opportunity to withdraw his plea and proceed to trial. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ JAMES JEREMIAH SHEA /S/ MICHAEL E WHEAT

March 22, 2016

f4e3056f-03c8-43fd-85f2-c5882cf1bb04

State v. Colburn

N/A

DA 14-0181

Montana

Montana Supreme Court

DA 14-0181 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 41 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 2013-49 Honorable James A. Haynes, Presiding Judge COUNSEL OF RECORD: For Appellant: Jennifer A. Hurley (argued), Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, C. Mark Fowler (argued), Assistant Attorney General, Helena, Montana William E. Fulbright, Ravalli County Attorney, Hamilton, Montana Argued and Submitted: December 2, 2015 Decided: February 23, 2016 Filed: __________________________________________ Clerk February 23 2016 Case Number: DA 14-0181 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 James Colburn appeals from his October 2013 convictions in Ravalli County District Court of the offenses of incest, sexual intercourse without consent and sexual assault. We reverse the convictions and remand for a new trial. ¶2 We consider the following issues: ¶3 Issue 1: Whether the District Court erred when it disqualified Colburn’s expert witness from testifying at trial. ¶4 Issue 2: Whether the District Court erred in its application of the Rape Shield Law to exclude evidence that Colburn offered at trial. BACKGROUND ¶5 In 2013 the State charged Colburn with two counts of incest, § 45-5-507, MCA; one count of sexual intercourse without consent, § 45-5-503, MCA; and two counts of sexual assault, § 45-5-502, MCA, all felonies. In October 2013 the jury convicted Colburn of all of the charged offenses. In February 2014 the District Court entered judgment sentencing Colburn to terms of imprisonment on each of the convictions. Colburn appeals. STANDARD OF REVIEW ¶6 We review a district court’s rulings on the admission of evidence, including the admission of expert testimony, for abuse of discretion. Beehler v. Eastern Radiological Assoc., 2012 MT 260, ¶ 17, 367 Mont. 21, 289 P.3d 131. We review a district court’s application of a statute to determine whether the application was correct. Beehler, ¶ 17. 3 DISCUSSION ¶7 Issue 1: Whether the District court erred when it disqualified Colburn’s expert witness from testifying at trial. ¶8 Rule 702 of the Montana Rules of Evidence allows a person qualified by knowledge, skill, experience, training or education to testify “in the form of an opinion or otherwise” if “scientific, technical or other specialized knowledge” will assist the jury to understand the evidence or determine a fact in issue. We have encouraged district courts to “construe liberally the rules of evidence so as to admit all relevant expert testimony,” subject to “stringent cross-examination.” State v. Damon, 2005 MT 218, ¶ 19, 328 Mont. 276, 119 P.3d 1194; Beehler, ¶ 23. The District Court determined in this case that expert testimony would be appropriate in assisting the jury to understand issues concerning forensic interview techniques. ¶9 The sexual intercourse without consent and sexual assault charges against Colburn related to incidents between Colburn and a neighbor girl referred to as R.W. Those incidents occurred when she was age eleven. The State called R.W. as a witness at trial. She testified to encounters with Colburn in which he touched her private parts manually and with his penis. The two incest charges related to incidents between Colburn and his own daughter, referred to as C.C., also age eleven. The State called C.C. as a witness at trial. She denied generally that Colburn had done anything wrong to her. ¶10 The State also presented the testimony of Nurse Practitioner Mary Hansen, a clinical supervisor with a children’s advocacy and adult sexual assault program at St. Patrick Hospital in Missoula. She has an undergraduate degree in sociology and a 4 master’s degree in nursing. She is licensed and certified as a pediatric nurse practitioner. She has attended several courses in sexual assault examiner training for nurses, a course in medical assessments of children, as well as attending several conferences in San Diego on child abuse. She testified that a forensic interview is a “structured conversation” with a child who may have been a victim of a crime. She testified that she has been trained in several different schools of forensic interview techniques, including those offered by the American Prosecutor’s Research Institute, by First Witness, and by the American Professional Society on Abuse of Children. She testified that she has “a lot of familiarity with many different models” of forensic interviewing, and that there is no certification program or requirement for forensic examiners. Several times in her testimony she characterized forensic interviewing as both a science and an art that requires “a judgment call [to determine] when you’re done.” ¶11 Hansen interviewed both girls and testified that she followed “best practices” in her interviews. Hansen described disclosures that R.W. made to her about sexual incidents with Colburn. Hansen testified that in her opinion R.W.’s statements to her were consistent with those of a child who had experienced sexual abuse. Hansen opined that R.W. “provided details that were sexual knowledge that a child may not have unless they’ve had the experience of sexual abuse.” (Emphasis added.) ¶12 Hansen also testified about her interview with C.C. during which C.C. described inappropriate touching by her father. The prosecution played a video of Hansen’s interview with C.C., which was the major direct evidence to support the incest charges against Colburn. 5 ¶13 Prior to trial Colburn disclosed that he intended to call Dr. Donna Zook as an expert in child psychology and forensic interview techniques, to critique the techniques used by Hansen in her interview of C.C. The State interviewed Zook prior to trial. ¶14 At trial, Zook testified that she had a doctorate degree in clinical psychology and that her training included 2000 hours in a pre-doctoral internship dealing with juvenile offenders as well as a 3000-hour post-doctoral experience with the Golden Triangle Community Mental Health Center in Havre, Montana. She is a member of the American College of Forensic Examiners and is included in the National Register of Health Service Providers. She has taught psychology at the University of Great Falls. Zook testified that she has done hundreds of juvenile interviews as part of psychological assessments or evaluations. She has also done over twenty critiques of forensic interviews conducted by others and has testified as an expert forensic psychologist hundreds of times. ¶15 The defense made an offer of proof that Zook would testify that Hansen used leading or suggestive questions when interviewing C.C., and would describe the result of those questions as reflected in C.C.’s interview. The State objected to Zook’s qualification to criticize Hansen’s interviews with the victims. The District Court became involved in examining Zook as to her qualifications, focusing on her familiarity with an interviewing protocol adopted by the National Institute of Child Health and Human Development (referred to in the record as the “NICHD”). Zook testified that she was familiar with that forensic interviewing protocol, and that while it was only one of several such protocols, it had been developed by using empirical research. She testified that she had not completed a 40-hour course in the protocol offered by the Institute. 6 ¶16 The District Court determined that the area of forensic interviewing techniques was an area that would be appropriate for expert testimony to assist the jury. The District Court further determined that the NICHD interviewing technique was the “gold standard” for forensic interviews of children, and apparently that it was the technique employed by Hansen in her interviews with the victims in this case. Based upon Zook’s lack of specific training in the NICHD interviewing protocol, the District Court concluded that she was “not qualified in this area of NICHD criticism.” The District Court excluded Zook from testifying as an expert witness. ¶17 While the District Court concentrated on whether Zook had been extensively trained in the NICHD interview protocol, Hansen never mentioned that protocol in her testimony. She did not list it as one of the several interview protocols that she had been trained in, and did not testify that she used the protocol in the interview of either victim in this case. Colburn asserts on appeal that the NICHD interview protocol does not appear anywhere in the record except in the District Court’s questioning of Zook’s qualifications. The State does not refute this assertion. ¶18 It is clear to this Court that Zook was qualified by both education and experience to provide a critique of Hansen’s interviewing technique as it related to leading or suggestive questions and the effect that such questions could have on the results. Significantly, neither side contends that any properly-administered child forensic interview should rely upon results obtained through leading or suggestive questions. The District Court “too narrowly conceived the subject matter” at issue here by constraining it to whether Zook was qualified in the NICHD interview protocols. Beehler, ¶ 25. Given 7 the importance of the taped interview following CC’s general denial that Colburn had assaulted her, Zook’s expert opinion about the interview technique was a significant exclusion. The District Court abused its discretion in excluding Dr. Zook from testifying at trial. ¶19 Issue 2: Whether the District Court erred in its application of the Rape Shield Law to exclude evidence that Colburn offered at trial. ¶20 Colburn asserts that his defense to the charges involving R.W. was that the allegations were fabricated. Both before trial and at trial he sought to introduce evidence that R.W. had a motive to fabricate allegations against him, and that there was an alternative source for her knowledge of the details of sexual behavior other than anything he had done. The defense theory was that R.W. used her allegations against Colburn to determine whether her mother would believe her and, if so, to then disclose that her own father had abused her. Similarly, the defense theory was that the source of R.W.’s detailed knowledge of sexual abuse came not from Colburn but from abuse inflicted by her own father. ¶21 The District Court excluded any evidence that R.W. had any sexual encounter with any other person, based upon the Montana Rape Shield Law. That law provides: Evidence concerning the sexual conduct of the victim is inadmissible in prosecutions under this part except evidence of the victim’s past sexual conduct with the offender or evidence of specific instances of the victim’s sexual activity to show the origin of semen, pregnancy or disease that is at issue in the prosecution. 8 Section 45-5-511(2), MCA. The District Court determined that R.W. was absolutely protected by this statute, and that it prohibited introduction of any evidence that she had sexual contact with any other person.1 ¶22 In 1975, Montana joined most other states by adopting a rape shield law. See Ch. 129, L. 1975.2 Under the Rape Shield Law, “evidence concerning the sexual conduct of the victim” is inadmissible in a criminal prosecution, with very limited exceptions not at issue here.3 Section 45-5-511(2), MCA. Montana’s Rape Shield Law is designed to prevent the trial of the charge against the defendant from becoming a trial of the victim’s prior sexual conduct. State v. Higley, 190 Mont. 412, 422, 621 P.2d 1043, 1050-51 (1980). Rape shield laws generally protect victims from being exposed at trial to harassing or irrelevant questions concerning their past sexual behavior. Michigan v. Lucas, 500 U.S. 145, 146, 111 S. Ct. 1743, 1745 (1991); State v. Anderson, 211 Mont. 272, 283, 686 P.2d 193, 199 (1984). The statute reflects a compelling state interest in keeping a rape trial from becoming a trial of the victim. Anderson, 211 Mont. at 283, 686 P.2d at 199. Rape shield laws evolved from society’s recognition that a rape victim’s prior sexual history is irrelevant to issues of consent or the victim’s propensity for 1 Although this evidence did not go before the jury, the record reflects that R.W.’s father was charged with five counts of incest and eventually pled guilty to sexual assault. 2 In 1985, Montana broadened the applicability of its Rape Shield Law to include cases involving all types of sexual crimes. See Sec. 3, Ch. 172, L. 1985. 3 The statutory exceptions are evidence of the victim’s past sexual conduct with the offender, or evidence of specific instances of the victim’s sexual activity to show the origin of semen, pregnancy, or disease that is at issue in the prosecution. 9 truthfulness. Tanya Bagne Marcketti, Rape Shield Laws: Do They Shield the Children?, 78 Iowa L. Rev. 751, 754-55 (1993). ¶23 Although rape shield legislation originally focused on adult rape victims, most jurisdictions also include child victims of sexual abuse within the protections of their rape shield statutes. The policies underlying the application of rape shield statutes to adult victims apply to child victims, as well: rape shield statutes eliminate the need for victims to defend incidents in their past and minimize the trauma of testifying. Marcketti at 756. ¶24 Conflict can arise between rape shield statutes and a defendant’s rights to confront his accuser and to present evidence at trial in defense of the charge against him. A defendant charged with a crime has a right to confront his accusers, arising from the Sixth Amendment to the United States Constitution and Article II, Section 24 of the Montana Constitution. State v. MacKinnon, 1998 MT 78, ¶ 33, 288 Mont. 329, 957 P.2d 23. A defendant has a similarly-based right to present evidence in his defense. State v. Johnson, 1998 MT 107, ¶ 22, 288 Mont. 513, 958 P.2d 1182. ¶25 Neither the Rape Shield Law nor the defendant’s right to confront and present evidence are absolute. MacKinnon, ¶ 33; Johnson, ¶¶ 22-23. The Rape Shield Law therefore cannot be applied to exclude evidence arbitrarily or mechanistically, Johnson, ¶ 21, and it is the trial court’s responsibility to strike a balance in each case between the defendant’s right to present a defense and a victim’s rights under the statute. State v. Lindberg, 2008 MT 389, ¶ 53, 347 Mont. 76, 196 P.3d 1252. A court balancing the interests of the defendant with those protected by the Rape Shield Law should require that the defendant’s proffered evidence is not merely speculative or unsupported. 10 Johnson, ¶ 24; Lindberg, ¶ 56. Here, the proffered evidence that R.W. was abused by her father was neither speculative nor unsupported, given that he was convicted on charges stemming from his sexual assaults against his daughter. The court should consider whether the evidence is relevant and probative (Rules 401 and 402, M. R. Evid.); whether the evidence is merely cumulative of other admissible evidence; and whether the probative value of the evidence is outweighed by its prejudicial effect (Rule 403, M. R. Evid.). Commonwealth v. Fernsler, 715 A.2d 435, 440 (Pa. Sup. Ct. 1998). The purpose of these considerations is to ensure a fair trial for the defendant while upholding the compelling interest of the Rape Shield Law in preserving the integrity of the trial and keeping it from becoming a trial of the victim. Anderson, 211 Mont. at 283, 686 P.2d at 199. ¶26 Colburn contends that the District Court’s application of the Rape Shield Law in this case frustrated his ability to respond to two crucial pieces of evidence against him: R.W.’s statement that Colburn sexually abused her, and Hansen’s testimony that R.W.’s knowledge of sexual activity likely came from her having experienced sexual abuse. Colburn proposed to introduce evidence that R.W., following the allegation that he had abused her, alleged that she had been abused by her own father. He also proposed to introduce evidence that R.W. said that she determined that she could make the allegations about her father because her allegations about Colburn had been taken seriously, thus tying her disclosure in the two cases together. In addition, Colburn contended that evidence that R.W. had been abused by her own father was crucial to counter or at least 11 contextualize the testimony of Hansen that R.W.’s detailed knowledge of sexual activities must have arisen from her being sexually abused. ¶27 Colburn’s defense to the charges involving R.W. depended upon undermining the credibility of her account that he abused her. It substantially depended upon undermining Hansen’s endorsement of the credibility of R.W.’s account of Colburn’s acts of abuse.4 Thus, from Colburn’s point of view, the proposed evidence was an essential part of his important right to confront the witnesses against him and to mount a meaningful defense to the charges.5 ¶28 At the same time, the Montana Rape Shield Law has long been construed to not automatically exclude evidence that “can be narrowed to the issue of the complaining witness’ veracity.” Anderson, 211 Mont. at 284, 686 P.2d at 200.6 The district court has the power and responsibility to manage the defense evidence to prevent “sordid probes into a victim’s past sexual conduct.” Anderson, 211 Mont. at 284, 686 P.2d at 200. In Lindberg, for example, the district court allowed the defendant in a sexual abuse case to 4 State v. Stuit, 268 Mont. 176, 885 P.2d 1290 (1994), is not dispositive of the present case. There the defendant argued that he should have been allowed to present evidence of prior sexual encounters involving the victim because the prosecution “opened the door” in its opening statement. This Court affirmed the District Court’s ruling excluding the evidence because the defendant failed to make a contemporaneous objection. 5 Colburn’s ability to counter Hansen’s endorsement of R.W.’s credibility was also substantially hampered by the District Court’s exclusion of the proposed testimony of Zook. 6 The State cites State v. Van Pelt, 247 Mont. 99, 805 P.2d 549 (1991), for the proposition that attacking the credibility of a witness is insufficient reason for admitting evidence that may be covered by the Rape Shield Law. However, this Court held that the conduct involved in the prior abuse could not be the source of knowledge of sexual activity involved in the case, and later cases, including Anderson and Johnson, hold that an attack upon the complaining witnesses’ veracity does not per se run afoul of the Rape Shield Law. 12 present evidence that his objection to the victim’s relationship with another person provided motivation to fabricate charges of abuse to remove the defendant from the household. However, the defendant was not allowed to present evidence concerning the sexual nature of that relationship. ¶29 Such restrictions represent the balancing of the interests involved without wholly sacrificing the interests of the defense or the victim. In the present case the District Court’s statements excluding Colburn’s proffered evidence show no weighing of his rights to present a defense with the interests represented by the Rape Shield Law. The District Court abused its discretion by mechanistically applying the Rape Shield Law to exclude Colburn’s proffered evidence. ¶30 After careful consideration of the record and the parties’ arguments and authorities, we reverse the convictions and remand to the District Court for a new trial. /S/ MIKE McGRATH We Concur: /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA /S/ JIM RICE Justice Laurie McKinnon, concurring. ¶31 I agree with the ultimate resolution reached by the Court regarding Issue 2, but I offer the following analysis to help guide litigants and trial courts in applying the statute. 13 ¶32 To begin, some understanding of the facts is necessary. Colburn was charged with two counts of incest involving his minor daughter, C.C. Colburn was also charged with two counts of felony sexual assault and one count of sexual intercourse without consent involving C.C.’s friend, R.W. At the time of the offenses, both girls were age 11. ¶33 R.W. testified at trial that she and her friend, C.C., used to live in the same apartment building. While visiting C.C., R.W. described how C.C.’s father, Colburn, touched her “top area” and “private part” while she was in Colburn’s living room and, on another occasion, in Colburn’s bedroom. R.W. also described other occasions when Colburn used his “boy part” to touch the outside of her “private part” and used his mouth on her private part more than once. ¶34 C.C. testified at trial that she and her father would play a game in which she jumped and Colburn would catch her. Colburn’s hand touched her private area. Another time, C.C. testified to Colburn’s hugging her and that Colburn had one hand on her breast. Colburn also touched C.C.’s bottom underneath her nightgown when she was going to bed. C.C. said she saw the keywords “father-daughter sex” on Colburn’s laptop. ¶35 Mary Pat Hansen is a nurse practitioner and clinical supervisor at First STEP Resource Center at St. Patrick’s Hospital in Missoula. The Center is a children’s advocacy center and an adult sexual assault center. Hansen testified at trial that R.W. made several disclosures of sexual abuse by Colburn and stated that, in her opinion, the statements made by R.W. were consistent with a child who has experienced sexual abuse. Hansen related specific examples to the jury of R.W.’s sexual knowledge that a “child may not have unless they’ve had an experience of sexual abuse” which included talking 14 “about his genitals or penis being floppy and hard” and “weird, gross noises that she could hear coming from him while certain acts were going on.” Hansen’s video interview was admitted at trial and played to the jury. ¶36 Hansen also conducted an interview of C.C. C.C.’s trial testimony was consistent with her statements in her interview with Hansen. C.C. also told Hansen that her father told her not to tell anyone about the touching because he would get in trouble. C.C. related to Hansen that her father apologized and that the apologies seemed “sarcastic.” Hansen’s video interview of C.C. was admitted and played to the jury. ¶37 Colburn filed a motion in limine asking the District Court to allow him to introduce evidence of R.W.’s motive to fabricate and to offer evidence of an alternative source of R.W.’s sexual knowledge. More specifically, Colburn sought to introduce evidence that within one month after disclosing against Colburn, R.W. disclosed abuse by her father. Dr. Catherine Otway conducted a forensic interview of R.W. on March 28, 2013—only several weeks after Hansen’s interview—and reported “she [R.W.] just recently felt comfortable disclosing this information because her mom ‘believed’ her about the sexual abuse by the neighbor, James Colburn.” As a result of R.W.’s subsequent disclosures regarding her father, R.W.’s father was charged with five counts of incest and pleaded guilty to sexual assault. Although R.W. told Hansen in the earlier interview that Colburn was the only person to have ever touched her inappropriately and that she trusted her dad; in fact, R.W. had been abused by her father over a period of several years. Colburn argued that R.W.’s disclosures about Colburn during her earlier interview with Hansen were “testing the waters” to learn her mother’s reaction before 15 being safe to make a more dramatic disclosure regarding her father. Additionally, Colburn sought to introduce evidence of sexual abuse by R.W.’s father as an alternative source of R.W.’s sexual knowledge. The District Court excluded the evidence, concluding that Montana’s rape shield statute prevented admission of the evidence. ¶38 A trial court normally has discretion regarding questions of admissibility of evidence at trial, and we review the court’s evidentiary rulings for abuse of that discretion. State v. Patterson, 2012 MT 282, ¶ 10, 367 Mont. 186, 291 P.3d 556; State v. Stock, 2011 MT 131, ¶ 17, 361 Mont. 1, 256 P.3d 899. However, “in exercising its discretion, the trial court is bound by the Rules of Evidence or applicable statutes, and to the extent that the court’s ruling is based on an interpretation of an evidentiary ruling or statute, our review is de novo. Moreover, where the court’s conclusions of law involve the Constitution or the rules of evidence, our review is, likewise, de novo.” Patterson, ¶ 10; State v. Derbyshire, 2009 MT 27, ¶ 19, 349 Mont. 114, 201 P.3d 811. Here, Colburn raises a constitutional claim—that his right to a fair trial was violated by the trial court’s application of Montana’s rape shield statute. Since the District Court’s interpretation and application of this statute implicate Colburn’s state and federal constitutional rights to a fair trial, we review the court’s ruling de novo. ¶39 “Whether rooted directly in the Due Process Clause of the Fourteenth Amendment, or in the Compulsory Process or Confrontation clauses of the Sixth Amendment, the Constitution guarantees criminal defendants ‘a meaningful opportunity to present a complete defense.’” Crane v. Kentucky, 476 U.S. 683, 690, 106 S. Ct. 2142, 2146 (1986) (quoting Cal. v. Trombetta, 467 U.S. 479, 485, 104 S. Ct. 2528, 2532 16 (1984)) (internal citations omitted). This includes “the right to put before a jury evidence that might influence the determination of guilt.” Taylor v. Illinois, 484 U.S. 400, 408, 108 S. Ct. 646, 652 (1988). “We break no new ground in observing that an essential component of procedural fairness is an opportunity to be heard.” Crane, 476 U.S. at 690, 106 S. Ct. at 2147 (citing In re Oliver, 333 U.S. 257, 273, 68 S. Ct. 499, 507 (1948); Grannis v. Ordean, 234 U.S. 385, 394, 34 S. Ct. 779, 783 (1914)). “That opportunity would be an empty one if the State were permitted to exclude competent, reliable evidence bearing on the credibility of a confession when such evidence is central to the defendant’s claim of innocence. In the absence of any valid state justification, exclusion of this kind of exculpatory evidence deprives a defendant of the basic right to have the prosecutor’s case encounter and ‘survive the crucible of meaningful adversarial testing.’” Crane, 476 U.S. at 691, 106 S. Ct. at 2147 (quoting United States v. Cronic, 466 U.S. 648, 656, 104 S. Ct. 2039, 2045 (1984)). ¶40 “[S]tate and federal rulemakers have broad latitude under the Constitution to establish rules excluding evidence from criminal trials.” United States v. Scheffer, 523 U.S. 303, 308, 118 S. Ct. 1261, 1264 (1998); see also Crane, 476 U.S. at 689-90, 106 S. Ct. at 2146; Marshall v. Lonberger, 459 U.S. 422, 438, n.6, 103 S. Ct. 843 (1983); Chambers, 410 U.S. at 302-03, 93 S. Ct. at 1049; Spencer v. Texas, 385 U.S. 554, 564, 87 S. Ct. 648, 654 (1967). In Michigan v. Lucas, 500 U.S. 145, 111 S. Ct. 1743 (1991), the Supreme Court recognized that the Sixth Amendment right to present relevant evidence “may, in appropriate cases, bow to accommodate other legitimate interests in the criminal trial process.” Lucas, 500 U.S. at 149, 111 S. Ct. at 1746 (quoting Rock v. Arkansas, 483 17 U.S. 44, 55, 107 S. Ct. 2704, 2711 (1987)). However, when a state rule of evidence conflicts with the right of the accused to present witnesses, the “rule may not be applied mechanistically to defeat the ends of justice,” but must meet the fundamental standards of due process. Chambers, 410 U.S. at 302, 93 S. Ct. at 1049. ¶41 For example, in Chambers, the defendant was charged with the murder of a police officer. Chambers called a witness who had previously confessed to the murder. Chambers, 410 U.S. at 289, 93 S. Ct. at 1043. When the witness repudiated the confession on the stand, the defendant was denied permission to examine him as an adverse witness based on the State’s “voucher rule,” which barred parties from impeaching their own witnesses. Chambers, 410 U.S. at 294, 93 S. Ct. at 1045. In addition, the state hearsay rule did not include an exception for statements against penal interest, and the defendant was therefore not permitted to introduce evidence that the witness had made self-incriminating statements to three other persons. Noting that the State had not even attempted to “defend” or “explain [the] underlying rationale” of the “voucher rule,” Chambers, 410 U.S. at 297, 93 S. Ct. at 1047, the Supreme Court held that “the exclusion of [the evidence of the witness’s out-of-court statements], coupled with the State’s refusal to permit [the defendant] to cross-examine [the witness], denied [the defendant] a trial in accord with traditional and fundamental standards of due process.” Chambers, 410 U.S. at 302, 93 S. Ct. at 1049. ¶42 That a statute operates to prevent a criminal defendant from presenting an entire defense does not necessarily render it unconstitutional. Rules excluding evidence from criminal trials do not abridge an accused’s right to present a defense so long as they are 18 not arbitrary or disproportionate to the purposes they are designed to serve. State v. Johnson, 1998 MT 107, ¶ 22, 288 Mont. 513, 958 P.2d 1182 (citing United States v. Scheffer, 523 U.S. 303, 307-08, 118 S. Ct. 1261, 1264 (1998)). Thus, trial judges retain wide latitude to limit reasonably a criminal defendant’s right to cross-examine a witness “based on concerns about, among other things, harassment, prejudice, confusion of the issues, the witness’ safety, or interrogation that is repetitive or only marginally relevant.” Delaware v. Van Arsdall, 475 U.S. 673, 679, 106 S. Ct. 1431, 1435 (1986). Courts are required, on a case-by-case basis, to balance the interests of an evidentiary rule excluding evidence with the defendant’s constitutional right to present a defense. Lindberg, ¶ 56; Lajoie v. Thompson, 217 F.3d 663, 669 (9th Cir. 2000). ¶43 Montana’s rape shield statute, contained at § 45-5-511 (2), MCA, precludes “evidence concerning the sexual conduct of the victim.” The statute provides two narrowly-drawn exceptions: (1) evidence of past sexual conduct with the defendant, and (2) evidence of specific instances of the victim’s sexual activity to show the origin of semen, pregnancy, or disease that is at issue in the prosecution. Neither exception is at issue here. We have consistently recognized that the statutory prohibition of certain evidence in § 45-5-511, MCA, “reflects a compelling interest in favor of preserving the integrity of the trial and preventing it from becoming a trial of the victim.” Anderson, 211 Mont. at 283, 686 P.2d at 199 (brackets, ellipsis, and citation omitted). See also Johnson, ¶ 23; State v. Van Pelt, 247 Mont. 99, 805 P.2d 549 (1991); State v. Higley, 190 Mont. 412, 621 P.2d 1043 (1980). Therefore, to avoid an arbitrary and mechanical operation of the statute which would render it unconstitutional, a defendant’s right to 19 present his defense must be balanced against the interest in preserving the integrity of the trial and preventing it from becoming a trial of the victim. ¶44 This Court has previously recognized that the bar imposed by Montana’s rape shield statute is not absolute. Johnson, ¶ 23. For example, “evidence of prior false accusations of the same sexual crime involved in a more current case, while not admissible for the purpose of impeaching the general character or reputation of the witness, may be admissible if probative of the witness’ state of mind, motive, or biases with respect to making the more current accusations.” Anderson, 211 Mont. at 283, 686 P.2d at 199 (emphasis supplied). Evidence of alleged prior sexual acts of a victim which tend to impugn the victim’s reputation or character “is precisely the type of testimony that the rape shield law was designed to prohibit.” State ex rel. Mazurek v. District Court, 277 Mont. 349, 355, 922 P.2d 474, 478 (1996). However, the policy of protecting against the trial becoming a trial of the victim “is not violated or circumvented if the offered evidence can be narrowed to the issue of the complaining witness’ veracity.” Anderson, 211 Mont. at 284, 686 P.2d at 200. Accordingly, where the evidence is offered to demonstrate a prior false accusation, we have set forth a procedure for the trial court to employ in determining whether to admit the evidence. See Mazurek, 277 Mont. at 358, 922 P.2d at 479. ¶45 Inadmissible evidence under the rape shield statute is evidence of the victim’s sexual conduct offered for the purpose of impugning the victim’s reputation or character and, as a result, rendering the trial a trial of the victim. Mazurek, 277 Mont. at 355, 922 P.2d at 478; State v. Higley, 190 Mont. 412, 621 P.2d 1043, 1050 (1980). It is difficult to 20 imagine a factual situation where evidence would ever be relevant to an issue in the case which had as its only purpose the impugning the victim’s reputation or character. However, sexual conduct evidence which is otherwise inadmissible because it is reputation or character evidence of the victim may still be relevant and probative based upon an alternative theory of admissibility. Thus, we have recognized—in addition to veracity—that evidence of the victim’s sexual conduct may be admissible in rape shield cases when it is relevant and “probative of the witness’ state of mind, motive, or biases with respect to making the more current accusations.” Anderson, 211 Mont. at 283, 686 P.2d at 199. ¶46 Where the sexual conduct evidence is sought to be admitted under a permissible basis for admission, the trial judge must balance the probative value of the evidence, as it relates to the defendant’s presentation of his defense, against the interest in preventing prejudice to the victim and preserving the integrity of the trial, i.e., ensuring that the trial does not become a trial of the victim. The first step of the inquiry focuses on identifying the permissible basis for admission; the second step requires the trial court to balance the probative value of the evidence against the interest in protecting the integrity of the trial. “The constitution does not require a blanket exception to rape shield statutes for all evidence related to motive to fabricate. Speculative or unsupported allegations are insufficient to tip the scales in favor of a defendant’s right to present a defense and against the victim’s rights under the rape shield statute.” Johnson, ¶ 24. ¶47 Finally, the State’s reliance on Van Pelt is misplaced. Van Pelt argued that the victim could not have consented to any sexual acts because of her young age and that 21 raising prior acts of abuse would not violate § 45-5-511, MCA. Van Pelt, 247 Mont. at 100, 805 P.2d at 550. This Court found, based on the evidence presented, that the prior sexual abuse was not relevant to the issue of whether Van Pelt sexually molested the victim because the knowledge the victim exhibited at trial could not have been gained from the type of prior abuse the victim had endured. Van Pelt, 247 Mont. at 104, 805 P.2d at 552. Indeed, we recognized in Van Pelt that § 45-5-511, MCA, does not provide an “impenetrable wall” of protection for the victim and that the Montana Rules of Evidence certainly allow the credibility of the victim to be attacked. Van Pelt, 247 Mont. at 103, 805 P.2d at 552. The State’s reliance on State v. Stuit, 268 Mont. 176, 885 P.2d 1290 (1994), is similarly misplaced. The issue in Stuit was whether the State had opened the door to sexual abuse evidence during its opening statement and whether Stuit timely objected. Stuit, 268 Mont. at 177, 885 P.2d at 1291. We concluded that the court properly ruled that the prosecutor’s comment did not open the door to testimony regarding the victim’s prior sexual abuse. Stuit, 268 Mont. at 184, 885 P.2d at 1296. ¶48 Colburn contends that his inability to present evidence that the victim was “testing the waters” when she disclosed Colburn’s acts to a forensic interviewer impaired his ability to present an entire defense and to bring out all facts relevant to the issue of the child’s motive to fabricate. The result, Colburn argues, was a partial presentation of the relevant facts to the jury. In contrast, the State presented to the jury a picture of a young victim who made sexually knowledgeable and explicit allegations against her neighbor, with no apparent reason whatsoever to fabricate, supported by a professional’s undisputed assessment that the child was credible because she had sexual abuse-based 22 sexual knowledge. Colburn maintains that the State chose to make R.W.’s sexual knowledge a pivotal issue at trial—the kind that only comes from an experience of sexual abuse—to support the inference that Colburn must have been the source of that sexual knowledge. Colburn maintains that the evidence that R.W. was sexually abused by her father could have rebutted that powerful inference. Colburn also maintains that evidence presented through Dr. Catherine Otway that R.W. disclosed against her father because she “only recently felt comfortable disclosing this information because her mom ‘believed’ her about the sexual abuse by the neighbor, James Colburn” was highly probative of R.W.’s motive to fabricate. ¶49 I agree, after examining the particular facts and the excluded evidence, that evidence related to R.W. testing the waters was relevant to her motive to fabricate. Preventing Colburn from presenting this evidence to the jury violated his constitutional right to present an entire defense. The ability to explore a witness’s biases, prejudices, and motives to fabricate enjoys particular constitutional protection because of its critical role in a defense. Olden v. Kentucky, 488 U.S. 227, 231-32, 109 S. Ct. 480, 482 (1988); Davis v. Alaska, 415 U.S. 308, 317-20, 94 S. Ct. 1105, 1110-12 (1974). ¶50 Furthermore, evidence that R.W. had been a victim of sexual abuse of her father was relevant to show that R.W. could have learned about the sexual acts and male genitalia other than through sexual abuse by Colburn. The jury did not hear of situations from which R.W. could have gained sexual knowledge as a result of the undisputed abuse she suffered at the hands of her father. The State relied heavily on R.W.’s sexualization in the presentation of its case, supported by Hansen’s assessment of R.W.’s credibility 23 based on her sexual abuse knowledge. Colburn was unable to rebut this powerful inference that he was the only cause of R.W.’s sexualization. ¶51 For these reasons, and pursuant to this analysis, I would conclude that the District Court incorrectly applied the law when it failed to balance Colburn’s constitutional right to present a defense against the interests of the rape shield statute. I join the Court’s opinion regarding Issue 1. /S/ LAURIE McKINNON

February 23, 2016

86c9f8b0-f38a-4747-b75e-c0e44053e602

City of Kalispell v. Omyer

2016 MT 63

DA 14-0511

Montana

Montana Supreme Court

DA 14-0511 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 63 CITY OF KALISPELL, Plaintiffs and Appellees, v. TYLER OMYER, CALVIN ATHY and GLORIA FERRARI, Defendants and Appellants. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause Nos. DC-13-326A, 13-263A and 13-264A Honorable Ted O. Lympus, Presiding Judge COUNSEL OF RECORD: For Appellants: Chad Wright, Chief Appellate Defender, Natalie Wicklund, Assistant Appellate Defender; Helena, Montana For Appellees: Timothy C. Fox, Montana Attorney General, Jonathan M. Krauss, Assistant Attorney General; Helena, Montana Charles A. Harball, Kalispell City Attorney, Emily Von Jentzen, Assistant City Attorney; Kalispell, Montana Submitted on Briefs: January 27, 2016 Decided: March 15, 2016 Filed: __________________________________________ Clerk March 15 2016 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Gloria Ferrari, Calvin Athy, and Tyler Omyer (jointly Appellants) were convicted in the City of Kalispell Municipal Court of various traffic violations including driving with a suspended license. They appealed their convictions to the Eleventh Judicial District Court, Flathead County. After the District Court affirmed the convictions, they appealed separately to this Court. While the factual backgrounds differ slightly, the legal issue and analysis are identical; therefore we have consolidated these cases for the purpose of appeal and this Opinion. Attorney Greg Rapkoch represented each of the Appellants in the Municipal and District Courts. Assistant Appellate Defender Natalie Wicklund represented all of the Appellants before this Court. We affirm. ISSUES 1. Did the District Court err in failing to determine whether § 61-5-212, MCA, imposed absolute liability on each of the Appellants? 2. Did the District Court abuse its discretion by holding that the evidentiary “letters of suspension” were admissible as “certified copies of public records” under M. R. Evid. 904 (Rule 904)? FACTUAL AND PROCEDURAL BACKGROUND Gloria Ferrari ¶2 On June 20, 2010, Gloria Ferrari was cited by Kalispell Police Officer A.J. McDonnell for various traffic violations including driving with a suspended license. The Kalispell Municipal Court conducted a bench trial on May 30, 2013. Ferrari was represented by appointed counsel Rapkoch but was not in attendance. McDonnell presented Ferrari’s “Certified Driver Record” generated by the State of Montana 3 Department of Justice, Motor Vehicle Division (MVD), as well as six letters from MVD to Ferrari informing her that her license was suspended. Counsel objected to the suspension letters as hearsay and in violation of Ferrari’s United States and Montana constitutional rights to confrontation. The Municipal Court admitted the evidence over counsel’s objection. Ferrari was found guilty and sentenced to 180 days in jail with 178 suspended and fined $325.00. She appealed to the District Court. Calvin Athy ¶3 On September 10, 2012, Calvin Athy was cited by Officer Stan Ottosen of the Kalispell Police Department for multiple traffic violations including driving with a suspended license. At the May 30, 2013 Municipal Court bench trial, Athy was represented by Rapkoch but Athy did not attend the trial. Ottosen testified at Athy’s trial and presented Athy’s “Certified Driver Record” as well as three letters from MVD to Athy notifying him that his license was suspended. Counsel objected to the letters on hearsay and Confrontation Clause grounds but the Municipal Court admitted the evidence and found Athy guilty. Athy was sentenced to a 180-day jail sentence with 178 days suspended and fined $325.00. On June 11, 2013, Athy appealed his judgment to the District Court. Tyler Omyer ¶4 On December 8, 2012, Tyler Omyer was cited by Sargent Allen Bardwell of the Kalispell Police Department for multiple traffic violations including driving a motor vehicle with a suspended license. The Kalispell Municipal Court conducted a bench trial on June 27, 2013, at which Omyer was present and represented by Rapkoch. Bardwell 4 presented Omyer’s “Certified Driver Record” as well as six letters sent by MVD to Omyer notifying him that his driver’s license was suspended for reasons stated in the letters. Omyer objected to the admission of the MVD suspension letters on hearsay and Confrontation Clause grounds. The Municipal Court admitted the evidence, convicted Omyer of all offenses, and sentenced him to 180 days in jail with 178 suspended. The court allowed him to serve his time at the community car wash or the animal shelter. Additionally, he was fined $325.00. On July 25, 2013, Omyer appealed to the District Court. ¶5 The three cases were consolidated by the District Court for purposes of appeal. Counsel for the Appellants had not objected to, nor did he appeal, the Municipal Court’s admission of the “Certified Driving Record” for each defendant as each record unequivocally established that the license for each driver was suspended at the time of the traffic stops and of citations to each. Rather, counsel argued that conviction of the offense of driving with a suspended license required the City to prove that each defendant had a culpable mental state, i.e., that they “knew” their licenses were suspended at the time of their offenses. Counsel claimed that the only evidence presented of the Appellants’ knowledge of their suspensions were the MVD suspension letters. Counsel asserted that these letters were inadmissible because they contained “testimonial hearsay” subject to the protections of the Confrontation Clauses of the United States and Montana Constitutions. The certificate of mailing language stamped onto the bottom of each notification letter and challenged by the Appellants read: 5 The undersigned hereby testifies that on the date below, he or she, as an officer or employee of the motor vehicle division, deposited in the United States mail at Helena, Montana, a copy of the paper to which this is affixed, in an envelope with the postage prepaid, addressed to the person named in the paper at his or her last address as shown by the records of the Department. ________________________________________________ Date Officer or Employee of Department Counsel argued that this language constituted testimony and was included in letters that were “prepared in anticipation of use at trial to prove historical facts relevant to prosecution.” Counsel claimed that had the evidence been properly excluded, there would have been no evidence presented at trial establishing a “knowing” culpable mental state and Appellants could not have been convicted under § 61-5-212, MCA. ¶6 The City of Kalispell responded that the MVD letters were properly admitted as self-authenticating business records under § 61-11-102, MCA, and Rule 902(4) of the Montana Rules of Evidence. The City further argued that the challenged letters did not constitute testimonial evidence triggering the Confrontation Clause and were admissible under Rule 803(8), M. R. Evid. Lastly, the City countered that under § 26-1-602(24), MCA, it is presumed that a correctly addressed and mailed letter is received by the intended recipient and none of the Appellants rebutted this presumption at trial. ¶7 The District Court determined that the stamped certificates of mailing included in each suspension letter did not constitute testimonial hearsay; rather, the letters were certified copies of public records and were admissible under Rules 902(4) and 803(8) of the Montana Rules of Evidence. The court also concluded that Appellants had not 6 rebutted the statutory presumption that they had received the suspension letters; therefore, the court presumed receipt. ¶8 Appellants filed timely appeals. STANDARD OF REVIEW ¶9 Section 3-6-110, MCA, governing a district court’s review of a municipal court’s ruling, confines the district court’s review to the record and questions of law. Section 3-6-110(1), MCA. In turn, when this Court reviews the district court, we undertake an independent examination of the record apart from the district court’s decision and will “affirm the district court when it reaches the right result, even if it reaches the right result for the wrong reason.” State v. Gai, 2012 MT 235, ¶ 11, 366 Mont. 408, 288 P.3d 164. Based upon our review of the trial court’s record, we review the trial court’s factual findings under the clearly erroneous standard, its discretionary rulings for an abuse of discretion, and its legal conclusions de novo. State v. Ellison, 2012 MT 50, ¶ 8, 364 Mont. 276, 272 P.3d 646. DISCUSSION ¶10 Each of the Appellants was convicted under § 61-5-212, MCA, which provides, in relevant part: (1)(a) A person commits the offense of driving a motor vehicle without a valid license or without statutory exemption or during a suspension or revocation period if the person drives: (i) a motor vehicle on any public highway of this state at a time when the person’s privilege to drive or apply for and be issued a driver’s license is suspended or revoked in this state or any other state . . . . 7 ¶11 Appellants assert on appeal that the District Court abused its discretion by admitting testimonial hearsay evidence at trial in violation of the Confrontation Clauses of the Montana and the United States Constitutions. They claim that testimonial hearsay is “an out-of-court statement offered for the truth of the matter asserted and where the declarant spoke in a manner as to create evidence.” They explain that in this case “unknown government agents purport to testify in writing that [defendant] should have had notice and knowledge of her [or his] suspended license.” Appellants claim that testimonial hearsay is only permissible if a court determines a declarant is unavailable and the defendant had a prior opportunity for cross-examination. They argue this did not occur. They request that we reverse and remand for new trials with instructions that the trial court reject admission of the suspension letters. ¶12 The State counters that the suspension letters were not testimonial hearsay but were contemporaneous business records created for the administration of the MVD’s operations and not for the purpose of establishing or proving some fact at trial. As such the letters were admissible. Additionally, the State asserts that even if the letters were erroneously admitted, the error was harmless because “driving with a suspended license” is an absolute liability offense that does not require knowledge of the suspension. ¶13 1. Did the District Court err in failing to determine whether § 61-5-212, MCA, imposed absolute liability on each of the Appellants? ¶14 We first address the State’s assertion that § 61-5-212, MCA, establishes that driving with a suspended license is an absolute liability offense which does not require proof of a mental state. Notably, we have not decided previously whether this offense 8 requires proof of a mental state or is an absolute liability offense. To determine whether the legislature intended an offense to be an absolute liability offense we look to the language of the statute and the statute’s apparent purpose. State v. Huebner, 252 Mont. 184, 827 P.2d 1260 (1992). ¶15 In Huebner, we concluded that § 87-3-102, MCA, prohibiting someone from killing a game animal and abandoning the meat, or removing only the parts suitable for trophy mounting, was an absolute liability statute based upon the State’s responsibility for protecting public wildlife resources. Huebner, 252 Mont. at 188, 827 Mont. at 1263. We relied upon § 45-2-104, MCA, which currently provides that “A person may be guilty of an offense without having, as to each element of the offense, one of the mental states of knowingly, negligently, or purposely only if the offense is punishable by a fine not exceeding $500 or the statute defining the offense clearly indicates a legislative purpose to impose absolute liability for the conduct described.” Huebner, 252 Mont. at 188, 827 Mont. at 1263. Applying a previous, but similar, version of § 45-2-104, MCA (1991), the Huebner Court determined that the language of the statute indicated a legislative purpose to impose absolute liability. ¶16 Turning to § 61-5-212, MCA, the statute does not contain any reference to a mental state, such as knowingly or purposely. It is clear based upon the many statutes in which the Legislature requires a specific mental state, for example, §§ 45-5-102, 45-5-201, 45-5-202, and 45-6-204, MCA, that had the Legislature intended to require one for this statute, it would have done so. Additionally, the legislative purpose of the statute is not difficult to discern. The State has a compelling interest in keeping unsafe drivers 9 off the road, especially drivers whose privileges have been suspended for various reasons such as unsafe driving, driving while under the influence of alcohol or drugs, or driving without liability insurance. State v. Pyette, 2007 MT 119, ¶ 27, 337 Mont. 265, 159 0P.3d 232. ¶17 Furthermore, while we note that § 45-2-104, MCA, is written in the disjunctive and requires only that the statutory penalty not exceed $500 or that the statute clearly indicates a legislative purpose to impose absolute liability, in this case both requirements are met in that § 61-5-212(1)(b)(i), MCA, provides with some exceptions, that a person convicted of driving during a period of license suspension may be fined “not more than $500.” For these reasons, we conclude that the statute clearly indicates a legislative purpose to impose absolute liability and that conviction under this statute does not require a culpable mental state. ¶18 The elements of driving while suspended include driving “a motor vehicle on any public highway” when the driver’s “privilege to drive . . . is suspended.” The evidence presented in each of the Appellant’s trials through admission of their Certified Driver Records established that they drove vehicles upon the public roads of this State while their licenses were suspended. As these were the only requirements necessary for conviction under § 61-5-212, MCA, the Municipal Court did not err in convicting the Appellants nor did the District Court err in affirming the Municipal Court. As we indicated above, we will not overturn a district court when it reaches the right result, even if it reaches the right result for a different or a wrong reason. Gai, ¶ 11. 10 ¶19 2. Did the District Court abuse its discretion by holding that the evidentiary “letters of suspension” were admissible as “certified copies of public records” under M. R. Evid. 904 (Rule 904)? ¶20 We next address the Appellants’ assertion that the letters notifying them of their suspensions contained “testimonial hearsay” and should not have been admitted or used to support their convictions. As indicated above, the District Court affirmed the Municipal Court’s admission of the suspension letters, finding them to be certified copies of public records under Rule 902(4). The court further determined they were not testimonial in nature and were appropriately admitted under the public records hearsay exception set forth in Rule 803. ¶21 Rule 803(8), M. R. Evid. provides: The following are not excluded by the hearsay rule, even though the declarant is available as a witness: . . . (8) Public records and reports. To the extent not otherwise provided in this paragraph, records, reports, statements, or data compilations in any form of a public office or agency setting forth its regularly conducted and regularly recorded activities, or matters observed pursuant to duty imposed by law and as to which there was a duty to report, or factual findings resulting from an investigation made pursuant to authority granted by law. The following are not within this exception to the hearsay rule: (i) investigative reports by police and other law enforcement personnel; (ii) investigative reports prepared by or for a government, a public office, or an agency when offered by it in a case in which it is a party; (iii) factual findings offered by the government in criminal cases; (iv) factual findings resulting from special investigation of a particular complaint, case, or incident; and (v) any matter as to which the sources of information or other circumstances indicate lack of trust worthiness. Rule 902(4), M. R. Evid. provides: Extrinsic evidence of authenticity as a condition precedent to admissibility is not required with respect to the following: . . . 11 (4) Certified copies of public records. A copy of an official record or report or entry therein, or of a document authorized by law to be recorded or filed and actually recorded or filed in a public office, including data compilations in any form, certified as correct by the custodian or other person authorized to make the certification, by certificate complying with paragraph (1), (2), or (3) or complying with any law of the United States or of this state. ¶22 In Billings v. Lindell, 236 Mont. 519, 771 P.2d 134 (1989), we addressed the self-authenticating nature of the MVD’s driving records. We explained that the MVD has the duty to maintain records of license convictions and that it would be unreasonable for a custodian of the department to be present in court each time a record was necessary for a trial. Billings, 236 Mont. at 521, 771 P.2d at 136. We discussed some of the various methods developed by the Legislature through which authenticity is taken as established for purposes of admissibility. Two such methods were Rules 803(8) and 902(4), M. R. Evid. Billings, 236 Mont. at 521-22, 771 P.2d at 136. Based upon the plain language of these rules, the statutorily-mandated purpose of MVD’s record-keeping, and our analysis in Billings, we conclude the District Court did not abuse its discretion in holding that the suspension letters were admissible under Rules 803 and 904. ¶23 Lastly, we note that our ruling is consistent with multiple U. S. Supreme Court decisions. That Court distinguishes between testimonial and non-testimonial hearsay, but has repeatedly declined to offer an exhaustive or comprehensive definition of “testimonial.” Crawford v. Washington, 541 U.S. 36, 68, 124 S. Ct. 1354, 1374 (2004). See also Davis v. Washington, 547 U.S. 813, 822, 126 S. Ct. 2266, 2273 (2006). However, in Davis, the U. S. Supreme Court declared that statements are testimonial 12 when their “primary purpose . . . is to establish or prove past events potentially relevant to later criminal prosecution.” Davis, 547 U.S. at 822, 126 S. Ct. at 2273-74. Subsequently, in Melendez-Diaz v. Mass., 557 U.S. 305, 129 S. Ct. 2527 (2009), the Court further elaborated that “[b]usiness and public records are generally admissible absent confrontation not because they qualify under an exception to the hearsay rules, but because—having been created for the administration of an entity’s affairs and not for the purpose of establishing or proving some fact at trial—they are not testimonial.” Melendez-Diaz, 557 U.S. at 324, 129 S. Ct. at 2539-40. ¶24 In the case at bar, as in Melendez-Diaz, the primary purpose of the MVD’s suspension letters is not to provide evidence in future criminal prosecutions but rather to notify drivers of a license suspension and to create a statutorily-mandated database of driver’s license records. It is realistic to presume that the vast majority of suspension letters, and other MVD documentation, exist within the agency’s database and printed copies are never generated for purposes of criminal prosecutions. This analysis supports our conclusion that driver’s records are created for the administration of the MVD’s affairs and not for the purpose of proving a fact at trial. CONCLUSION ¶25 For the foregoing reasons, we conclude the District Court neither erred nor abused its discretion in affirming the Municipal Court’s convictions and judgments of the Appellants. /S/ MICHAEL E WHEAT 13 We Concur: /S/ JAMES JEREMIAH SHEA /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JIM RICE

March 15, 2016

c2d5627d-28e2-4d71-9e4e-07fa4ad3676f

Runkle v. Allen

2016 MT 55N

DA 15-0336

Montana

Montana Supreme Court

DA 15-0336 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 55N JOHN D. RUNKLE, Plaintiff and Appellant, v. DUANE ALLEN, Defendant and Appellee. APPEAL FROM: District Court of the Nineteenth Judicial District, In and For the County of Lincoln, Cause No. DV-13-261 Honorable James B. Wheelis, Presiding Judge COUNSEL OF RECORD: For Appellant: John D. Runkle, self-represented, Troy, Montana For Appellee: Amy N. Guth, Law Offices of Amy Guth, Libby, Montana Submitted on Briefs: January 13, 2016 Decided: March 8, 2016 Filed: __________________________________________ Clerk March 8 2016 Case Number: DA 15-0336 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 John D. Runkle appeals from the orders of the Nineteenth Judicial District Court, Lincoln County, granting summary judgment to Appellee Duane Allen, and sanctioning Runkle pursuant to M. R. Civ. P. 11 (Rule 11). This case arises from a dispute over a cabin in Yaak, Montana, which straddled portions of both Allen’s and Runkle’s land. ¶3 Runkle, through his LLC—World Famous Dirty Shame Saloon LLC—acquired real property in Yaak in April 2013. The Dirty Shame Saloon is located on this property. Allen purchased an adjacent five-acre parcel in November 2013. There are six small cabins located on Allen’s property. ¶4 Prior to Allen’s purchase, Runkle suspected that a portion of one of the cabins encroached on Runkle’s property. Runkle surmised that he owned the entire cabin because access to the cabin’s door was on his property. Runkle stored personal property in the cabin and posted a “no trespassing” sign on the cabin. ¶5 When Allen learned of the possible encroachment, he commissioned a survey of his property. According to Runkle, the survey disclosed that at least half of the cabin was located on Runkle’s property. Runkle and Allen never communicated directly regarding 3 ownership of the cabin and neither gave permission to the other to enter upon their respective properties. Runkle did not remove his personal property from the cabin interior. ¶6 Sometime after the survey, Allen removed the cabin from its foundation and relocated the cabin off the property line. He separated the porch and entry from the cabin proper and left the porch on Runkle’s property. In December 2013, Runkle, appearing on his own behalf, filed a complaint claiming damages for breach of contract, conversion, trespass, intentional infliction of emotional distress, and treble damages for waste. Runkle later amended his complaint to add claims against Geoff Decker for allegedly assisting with the cabin’s relocation. ¶7 The District Court denied Allen’s motion to dismiss the amended complaint. After the parties engaged in discovery, Runkle filed and then withdrew a second amended complaint. Runkle then requested permission to file a third amended complaint and add additional defendants. Allen opposed Runkle’s motion to file a third amended complaint and moved for summary judgment on all issues. The court heard oral argument from the parties on July 23, 2014. ¶8 Following oral argument, Allen moved for Rule 11 sanctions against Runkle for Allen’s attorney’s fees and costs on the ground that Runkle’s amended complaint was “based upon fanciful and frivolous legal theories that lack any authority or merit.” On August 7, 2014, the District Court granted Allen’s motion for summary judgment, and on October 22, 2014, it granted Rule 11 sanctions against Runkle for Allen’s attorney’s fees 4 and costs. The court denied Runkle’s subsequent motion to set aside the sanctions on the ground that it was time barred under M. R. Civ. P. 59(e). Runkle did not attend the hearing at which the court determined the amount of fees to award, and thereafter the court entered final judgment dismissing Runkle’s claims and awarding Allen attorney’s fees in the amount of $12,513.30 with interest accruing at a rate of ten percent per annum. ¶9 On appeal, Runkle argues that the District Court erred by granting summary judgment and by denying his motion to file a third amended complaint. Runkle also claims that the court erred in imposing Rule 11 sanctions against him and abused its discretion by issuing sanctions without first conducting a hearing. ¶10 We review a district court’s ruling on a motion for summary judgment de novo, applying M. R. Civ. P. 56(c)(3). Bailey v. State Farm Mut. Auto. Ins. Co., 2013 MT 119, ¶ 18, 370 Mont. 73, 300 P.3d 1149. We review de novo the district court’s determination that a pleading violates Rule 11. Byrum v. Andren, 2007 MT 107, ¶ 19, 337 Mont. 167, 159 P.3d 1062. We review a district court’s findings of fact underlying the conclusion to determine whether the findings are clearly erroneous. Byrum, ¶ 19. If the court determines that Rule 11 was violated, we review a district court’s choice of sanction for abuse of discretion. Byrum, ¶ 19. ¶11 In granting summary judgment, the District Court began by rejecting one of Allen’s arguments—that the complaint should be dismissed based on failure to prove that Runkle personally owns an interest in the Dirty Shame Property. The court concluded 5 that Runkle was “not non-suited by the failure to prove a property interest” because it was “clear from Runkle’s testimony that the World Famous Dirty Shame Saloon, LLC, is the alter ego of John D. Runkle, personally.” ¶12 In regard to Runkle’s claims, the District Court concluded that Runkle “fail[ed] to present any facts that support a claim for breach of contract” because he and Allen “had no communication with each other regarding the cabin or the survey findings.” Thus, the District Court concluded that the essential elements of a contract under § 28-2-301, MCA, did not exist. The court also concluded that Runkle’s trespass and conversion claims failed as a matter of law. The court determined that Runkle could not prove that he owned the cabin to establish a claim for conversion, and that Runkle could not prove that Allen acted intentionally or recklessly in entering upon Runkle’s property to establish a claim for trespass. Similarly, the court concluded that Runkle was not entitled to conversion damages for his personal property located in the portion of the cabin on Allen’s real property. According to the court, Runkle, not Allen, had the legal duty to remove the property and “[h]is failure to do so does not create a cause of action.” The court further concluded that Runkle’s claim for waste—which he based on § 70-16-106, MCA—fails because that statute pertains to property waste committed by persons with a shared interest in real property and Runkle and Allen do not have shared interest in real property. Finally, the court concluded that Runkle failed to set forth a prima facie case to support an award of emotional distress damages because Runkle “fail[ed] to present proof that [his] ‘stress’ is so severe as to warrant compensation.” 6 ¶13 Runkle asserts the following arguments on appeal: 1) that the District Court abused its discretion by stating that the World Famous Dirty Shame Saloon LLC, is the alter ego of Runkle because such an order “could open up the LLC to additional liability by making a ruling on such an issue”; 2) that the District Court erred in concluding that “relocation of a structure located on Allen’s property by Allen cannot be trespass or conversion against Runkle” because Allen had “admitted trespassing onto [Runkle’s] property, tearing down ‘no trespassing’ signs, [and] cutting the lock off of the front door of the [cabin]” in interrogatories and during oral argument; 3) that the District Court never decided the issue of ownership of the cabin and “therefore a triable issue still exists”; 4) that the District Court should have considered Runkle’s claim for waste because it was “feasible” for the District Court to conclude that Runkle and Allen shared or would have a shared interest in the property; and 5) that the District Court erred and abused its discretion in finding that Runkle failed to set forth a case for emotional distress damages because “it was a foreseeable certainty that [Runkle] would suffer such emotional distress and the infliction of such emotional distress is probably a motivation that inspired [Allen] to take such action to begin with.” ¶14 Our review of the record demonstrates that Runkle has failed to substantiate a genuine issue of material fact to defeat summary judgment. To avoid summary judgment, the non-moving party must establish substantial evidence, as opposed to mere denial, speculation, or conclusory assertions that a genuine issue of material fact exists or that the moving party is not entitled to prevail under applicable law. Hansard Mining, 7 Inc. v. McLean, 2014 MT 199, ¶ 10, 376 Mont. 48, 335 P.3d 711. To support his claims on appeal, Runkle relies on conclusory assertions that are unsupported by legal authority as well as his own oral arguments from summary judgment proceedings. These arguments do not establish substantial evidence to raise a genuine issue of material fact. ¶15 Moreover, this appeal is the first time Runkle has argued that he partially owned the cabin, that he and Allen jointly owned the cabin, or that the cabin was affixed to Runkle’s property. At all times before the District Court, Runkle argued that he alone owned the cabin because its entrance was on his property. We will not address an issue raised for the first time on appeal. Hansen Trust v. Ward, 2015 MT 131, ¶ 19, 379 Mont. 161, 349 P.3d 500. “This rule applies to both substantive and procedural matters, as well as to a change in a party’s theory of the case.” Hansen Trust, ¶ 19 (citation and internal quotation marks omitted). It is unfair to fault the trial court for an error when it was never given the opportunity to consider the issue. Hansen Trust, ¶ 19. We therefore decline to review these arguments on appeal. Accordingly, we affirm the District Court’s order granting summary judgment to Allen. ¶16 In granting Rule 11 sanctions, the District Court concluded that while some of Runkle’s claims were “arguably judicable,” the “vast majority” of Runkle’s legal theories were not supported by existing law and were not well-grounded in fact. For example, the court explained: [N]o law exists to support Runkle’s theory that joint ownership in real property permits a stranger to title or interest to sue for waste. No law exists that permits a real property owner who relocates personal property 8 located on his or her own real property to be sued for trespass. No law exists to support Runkle’s claim that the location of an encroaching structure’s entrance dictates the ownership of the encroaching structure and the ground beneath the encroaching structure. The court also took into account Runkle’s pro se status, noting that, “[w]hile the Court may give procedural leeway to Runkle based on his pro se status, the Court is not inclined to permit Runkle to use the judicial process to harass Allen or to cause him needless financial harm.” Quoting D’Agostino v. Swanson, 240 Mont. 435, 445, 784 P.2d 919, 925 (1990), the court determined that sanctions were appropriate in this case in order to punish Runkle for and deter the future use of “‘wasteful and abusive litigation tactics.”’ Therefore, the court concluded that it is “fair and appropriate that Runkle compensate Allen for his reasonable and necessary attorney’s fees.” ¶17 Runkle argues that the court denied him due process by failing to hold a hearing prior to issuing sanctions against him. Runkle also argues that the court erred in awarding sanctions because the court found at least part of his claims to be “arguably judicable.” ¶18 Rule 11(b) provides, in relevant part, b) Representations to the Court. By presenting to the court a pleading, written motion, or other paper -- whether by signing, filing, submitting, or later advocating it -- 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; 9 (2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law; (3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery . . . . M. R. Civ. P. 11(b)(1)-(3). ¶19 If a court determines that Rule 11(b) has been violated, the court may impose appropriate sanctions so long as the party being sanctioned has had “notice and a reasonable opportunity to respond.” M. R. Civ. P. 11(c)(1). We have held that before imposing Rule 11 sanctions, a district court “must provide the party with due process by giving [the party] notice to show cause and affording [him] an opportunity to be heard and to defend against the imposition of sanctions.” Brandt v. Sade, 2000 MT 98, ¶ 36, 299 Mont. 256, 1 P.3d 929 (citations omitted). “We will not review a district court’s procedural error unless the appellant has made a timely objection.” Kinsey-Cartwright v. Brower, 2000 MT 198, ¶ 19, 300 Mont. 450, 5 P.3d 1026. “[I]t has long been the rule of this Court that on appeal we will not put a District Court in error for a ruling or procedure in which the appellant acquiesced, participated, or to which appellant made no objection.” Kinsey-Cartwright, ¶ 19 (citation and internal quotation marks omitted). In Kinsey-Cartwright, we determined that the appellant was entitled to a hearing regarding the district court’s imposition of Rule 11 sanctions. Kinsey-Cartwright, ¶ 20. However, because the appellant did not cite to, and our review of the record did not reveal, an 10 objection to the district court’s failure to conduct a hearing, we held that the district court did not err in failing to conduct a Rule 11 hearing. Kinsey-Cartwright, ¶ 20. ¶20 Similar to Kinsey-Cartwright, Runkle has not cited to, and the record does not reveal, that he objected to the District Court’s failure to conduct a hearing prior to the court ordering sanctions against him. Runkle did not raise the issue of the hearing until he filed his motion to set aside the attorney’s fees award on April 7, 2015—nearly six months after the court issued its Order Granting Rule 11 Sanctions. Even if Runkle’s motion to set aside the sanctions order can be construed as raising an objection, Runkle cannot establish that his due process rights were violated because it is clear from the record that he had “notice and a reasonable opportunity to respond.” M. R. Civ. P. 11(c)(1). Runkle received Allen’s Motion and Memorandum in Support of Rule 11 Sanctions on August 4, 2014. On August 12, 2014, Runkle filed a seven-page response to the sanctions motion. The District Court did not issue its order granting sanctions until October 22, 2014. As such, Runkle had notice of potential sanctions against him, had a reasonable opportunity to respond to those allegations, and in fact did respond prior to the District Court’s imposition of sanctions. Runkle did not seek a hearing until long after after the motion had been granted. Further, the District Court’s statement that Runkle’s claims were “arguably judicable” is not an endorsement of the merits. “Judicable” means “capable of being judged; liable to judgment.” 2 The Compact Edition of the Oxford English Dictionary 1518 (Oxford Univ. Press, 1971). Having reviewed the record and 11 the basis for the District Court’s order, we conclude that the court did not commit legal error and acted within its discretion when it granted sanctions to Allen against Runkle. ¶21 Allen also requests that this Court impose sanctions upon Runkle for filing this appeal. We may award sanctions on appeal, including attorney’s fees and costs, if the claim for relief is “frivolous, vexatious, filed for purposes of harassment or delay, or taken without substantial or reasonable grounds.” M. R. App. P. 19(5). In evaluating the issue of sanctions, “‘we generally assess whether the arguments were made in good faith.’” Hilten v. Bragg, 2010 MT 273, ¶ 30, 358 Mont. 407, 248 P.3d 282 (quoting Wolf’s Interstate Leasing & Sales, L.L.C. v. Banks, 2009 MT 354, ¶ 13, 353 Mont. 189, 219 P.3d 1260). Applying this standard, we decline to award Allen his attorney’s fees and costs in this appeal. ¶22 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 precedent or modify existing precedent. The District Court’s orders granting summary judgment to Allen and imposing sanctions against Runkle are affirmed. /S/ BETH BAKER We concur: /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ JIM RICE

March 8, 2016

78d0be65-286a-4cf1-b253-3adaa9996bb3

Montana Cannabis et al. v. State

2016 MT 44

DA 15-0055

Montana

Montana Supreme Court

DA 15-0055 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 44 MONTANA CANNABIS INDUSTRY ASSOCIATION, MARC MATTHEWS, SHELLY YEAGER, JESSE RUMBLE, JOHN STOWERS, M.D., POINT HATFIELD, and CHARLIE HAMP, Plaintiffs, Appellees, and Cross-Appellants, v. STATE OF MONTANA, Defendant, Appellant, and Cross-Appellee. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. DDV-2011-518 Honorable James P. Reynolds, Presiding Judge COUNSEL OF RECORD: For Appellant: Timothy C. Fox, Montana Attorney General; J. Stuart Segrest (argued), Matthew T, Cochenour, Assistant Attorneys General, Helena, Montana For Appellees: James H. Goetz (argued), J. Devlan Geddes, Goetz, Baldwin & Geddes, P.C., Bozeman, Montana Argued and Submitted: November 4, 2015 Decided: February 25, 2016 Filed: __________________________________________ Clerk February 25 2016 Case Number: DA 15-0055 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 The State of Montana (State) appeals an order of the First Judicial District Court, Lewis and Clark County, granting a permanent injunction against the enforcement of certain provisions of the 2011 Montana Marijuana Act §§ 50-46-301 to -344, MCA (Act). Montana Cannabis Industry Association, Mark Matthews, Shelly Yeager, Jesse Rumble, John Stowers, M.D., Point Hatfield, and Charlie Hamp (collectively “Plaintiffs”) cross-appeal the District Court’s refusal to enjoin other provisions of the Act. We address the following issues on appeal: 1. Whether the District Court erred in determining that the Act’s provision requiring the Department of Public Health and Human Services (Department) to notify the Board of Medical Examiners of any physician who certifies 25 or more patients in a year for medical marijuana (§ 50-46-303(10), MCA) fails rational basis review. 2. Whether the District Court erred in determining that the Act’s commercial prohibitions (§ 50-46-308(3), (4), (6)(a),(b), MCA) fail rational basis review. 3. Whether the District Court erred in applying strict scrutiny review to the Act’s provision prohibiting advertising by providers of medical marijuana (§ 50-46-341, MCA), thereby concluding that the provision unconstitutionally infringes free speech. 4. Whether the District Court erred in determining that the Act’s provision prohibiting probationers from becoming registered cardholders for medical marijuana use (§ 50-46-307(4), MCA) withstands a facial challenge under rational basis scrutiny. 5. Whether the District Court erred in determining that the Act’s provision allowing warrantless inspections of medical marijuana providers’ businesses by the Department and law enforcement agencies (§ 50-46-329, MCA) comports with the U.S. and Montana Constitutions’ guarantees against unreasonable searches. ¶2 We affirm in part and reverse in part. 3 PROCEDURAL AND FACTUAL BACKGROUND ¶3 This is the State’s second appeal from the First Judicial District Court’s injunctions preventing implementation of certain provisions of the Act. Montana Cannabis Industry Association v. State, 2012 MT 201, 366 Mont. 224, 286 P.3d 1161 (hereafter MCIA I). The Act repealed the 2004 Medical Marijuana Act (2004 Act)— which was established by voter initiative (I-148)—and replaced it with a new statutory framework. The Act contains multiple provisions that limit both the eligibility of patients to qualify for its protections and the activities of medical professionals and providers of marijuana for medical purposes. ¶4 In the first case, the District Court preliminarily enjoined several of the Act’s provisions, including: its ban on the commercial sale of medical marijuana; its ban on provider advertising; its authorization of warrantless inspections; and the 25-patient physician review trigger. In its first order, the court reasoned that those provisions implicated Plaintiffs’ fundamental constitutional rights, triggering strict scrutiny analysis. The State agreed to a preliminary injunction against several of the challenged provisions pending consideration of the constitutional merits, but appealed the injunction against the commercial ban on the ground that the District Court erred in applying strict scrutiny analysis to the provisions in the absence of an infringement on fundamental rights. ¶5 In MCIA I, we determined that the commercial ban did not implicate the fundamental rights to employment, to health, or to privacy, and that Plaintiffs had no 4 fundamental right to medical marijuana. Accordingly, we reversed and remanded the case to the District Court to apply rational basis scrutiny. MCIA I, ¶ 35. ¶6 Following remand, Plaintiffs moved the District Court for a Temporary Restraining Order, Preliminary Injunction and Order to Show Cause. On October 26, 2012, the District Court granted a Temporary Restraining Order and set a Preliminary Injunction Hearing.1 At that hearing, Plaintiffs presented testimony from several witnesses to support their contention that many medical marijuana users and providers would suffer irreparable harm if certain provisions of the Act did not remain preliminarily enjoined. Several witnesses who suffered from debilitating medical conditions testified that they had very negative experiences with prescription drugs and that medical marijuana was the only treatment that provided them effective relief from their conditions. Providers of medical marijuana testified that without the injunction, it would not be feasible for them to continue their medical marijuana businesses. ¶7 The State urged the District Court to deny the preliminary injunction and to extend the temporary restraining order for a period to allow the Legislature to consider further amendments to the Act. To support its argument, the State referenced several abuses that occurred under the 2004 Act and that were discussed during the June 2011 preliminary injunction hearing. The State referenced telemedicine (the practice of some physicians to certify patients without ever actually seeing the patient), traveling caravans, and a disproportionate number of medical marijuana users in the “chronic pain category” who 1 The parties agreed that the District Court could consider testimony and evidence submitted at the June 2011 hearing on Plaintiffs’ previous motion for preliminary injunction. 5 falsified or exaggerated their need for medical marijuana. The State also emphasized that one-third of medical marijuana users were growing their own supply at that time. ¶8 Following the hearing, on January 16, 2013, the court issued an order maintaining its preliminary injunction against the Act’s commercial prohibitions. The court concluded that “[p]roperly registered and eligible cardholders will be injured or irreparably harmed if the Court does not preserve the status quo . . . [because] cardholders will be unable to grow their own medical marijuana or will be unable to obtain it from a provider.” Thereafter, the parties filed cross-motions for summary judgment. The District Court heard oral argument on the summary judgment motions on April 15, 2014. ¶9 On January 6, 2015, the District Court issued a Corrected Order on Motions for Summary Judgment. In its decision, the court reviewed the commercial ban and the 25-patient review trigger for a rational basis, and concluded that both provisions were invalid. The court applied strict scrutiny to the advertising prohibition, and enjoined it on the basis that the prohibition impermissibly restricted content-based political and educational speech. The District Court declined to enjoin the warrantless inspection provision and the ban on access to medical marijuana by probationers. The court entered its final judgment on January 8, 2015. ¶10 The State appeals the injunctions against the commercial ban, the 25-patient physician review trigger, and the advertising ban. Plaintiffs cross-appeal the District Court’s decision to uphold the warrantless inspection provision and the ban on probationer use. This Court heard oral argument on November 4, 2015. 6 STANDARDS OF REVIEW ¶11 We review summary judgment rulings de novo, applying the criteria set forth in M. R. Civ. P. 56. Walters v. Flathead Concrete Prods., 2011 MT 45, ¶ 8, 359 Mont. 346, 249 P.3d 913. Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Walters, ¶ 8. If there are no genuine issues of material fact, we review for correctness a district court’s conclusion that the moving party is entitled to judgment as a matter of law. Zinvest, LLC v. Hudgins, 2014 MT 201, ¶ 11, 376 Mont. 72, 330 P.3d 1135. ¶12 This Court exercises plenary review of constitutional issues. Big Sky Colony, Inc. v. Mont. Dep’t of Labor and Indus., 2012 MT 320, ¶ 16, 368 Mont. 66, 291 P.3d 1231 (citation omitted). The constitutionality of a statute is presumed, “unless it conflicts with the constitution, in the judgment of the court, beyond a reasonable doubt.” Powell v. State Comp. Fund., 2000 MT 321, ¶ 13, 302 Mont. 518, 15 P.3d 877. If any doubt exists, it must be resolved in favor of the statute. Powell, ¶ 13. The party challenging the constitutionality of a statute bears the burden of proof. Big Sky Colony, ¶ 16. DISCUSSION ¶13 We begin by acknowledging the proverbial “elephant in the room.” Marijuana is a Schedule I Controlled Substance under the federal Controlled Substances Act, 21 U.S.C. § 812, under which its cultivation and distribution are illegal. 21 U.S.C. §§ 841(a)(1), 844(a). In this case, no challenge is brought to the Act on the ground that it is preempted by federal law, U.S. Const. art. VI, cl. 2, and the State expressly disclaimed such a 7 challenge during oral argument. In the face of action in numerous states to legalize marijuana for medical or even recreational purposes,2 the United States Department of Justice has issued guidance (discussed below) concerning enforcement priorities in an apparent effort to minimize conflict with state actions while maintaining the primacy of federal law. The Act is the Montana Legislature’s attempt to navigate shifting public policy toward marijuana in the absence of Congressional action to resolve state and federal differences.3 We are not called upon in this case to review the broad question of Montana’s authority to act on the subject of medical marijuana. Rather, we address only the question whether, having taken action on the subject, the Legislature’s means of addressing this conflict are permissible under defined standards of constitutional analysis. 2 Alaska Stat. §§ 17.37.010 et seq. (medical), §§ 17.38.010 et seq. (recreational); Ariz. Rev. Stat. §§ 36-2801 et seq. (medical); Cal. Health & Safety Code §§ 11362.5 et seq. (medical); Colo. Rev. Stat. §§ 12-43.3-101 et seq. (medical), §§ 12-43.4-101 et seq. (recreational); Conn. Gen. Stat. §§ 21a-408 et seq. (medical); Del. Code Ann. tit. 16, §§ 4901A et seq. (medical); D.C. Code §§ 7.1671.01 et seq. (medical); Haw. Rev. Stat. §§ 329-121 et seq. (medical); 410 Ill. Comp. Stat. Ann. 130/1 et seq. (medical); Me. Rev. Stat. tit. 22, §§ 2421 et seq. (medical); Md. Code Ann. Health-Gen §§ 13-3301 et seq. (medical); Mass. Ann. Laws ch. 94C, §§ Appx. 1 et seq. (medical); Mich. Comp. Laws Serv. §§ 333.26421 et seq. (medical); Minn. Stat. Ann. §§ 152.27 et seq. (medical); Nev. Rev. Stat. §§ 453A.___ [2015 ch. 401, § 29] et seq. (medical); N.H. Rev. Stat. Ann. §§ 126-X:2 et seq. (medical); N.J. Stat. Ann. §§ 24:6I-1 et seq. (medical); N.M. Stat. Ann. §§ 26-2B-1 et seq. (medical); N.Y. CLS Pub. Health Law §§ 1004.1 et seq. (medical); Or. Rev. Stat. §§ 475.300 et seq. (medical), Or. Rev. Stat. §§ ___.___ [2015 c.1, § 3] et seq. (recreational); R.I. Gen. Laws §§ 21-28.6-1 et seq. (medical); Vt. Stat. Ann. tit. 18 §§ 4472 et seq. (medical); Wash. Rev. Code §§ 69.51A et seq. (medical), Wash. Rev. Code §§ 69.50.360, 69.50.363, 69.50.66, 69.50.401 (recreational). 3 A number of bills have been introduced during recent Sessions of Congress, none of which have moved forward. E.g., Respect State Marijuana Laws Act of 2015, H.R. 1940, 114th Cong. (2015); States’ Medical Marijuana Property Rights Protection Act, H.R. 262, 114th Cong. (2015); Marijuana Businesses Access to Banking Act of 2015, H.R. 2076, 114th Cong. (2015). Respect State Marijuana Laws Act of 2013, H.R. 1523, 113th Cong. (2013); National Commission on Federal Marijuana Policy Act of 2013, H.R. 1635, 113th Cong. (2013); States’ Medical Marijuana Property Rights Protection Act, H.R. 6335, 112th Cong. (2012); States’ Medical Marijuana Patient Protection Act, H.R. 1983, 112th Cong. (2011). 8 ¶14 Plaintiffs allege denial of equal protection and due process rights under article II, sections 4 and 17 of the Montana Constitution. Plaintiffs bring their constitutional claims as facial challenges to certain statutes within the Act. Analysis of a facial challenge to a statute differs from that of an as-applied challenge. See e.g., State v. Whalen, 2013 MT 26, ¶¶ 20-22, 368 Mont. 354, 295 P.3d 105. In order to prevail on their facial challenges, Plaintiffs must show that “no set of circumstances exists under which the [challenged sections] would be valid, i.e., that the law is unconstitutional in all of its applications.” Wash. State Grange v. Wash. State Republican Party, 552 U.S. 442, 449, 128 S. Ct. 1184, 1190 (2008) (citing United States v. Salerno, 481 U.S. 739, 745, 107 S. Ct. 2095, 2100 (1987)). See also In re Marriage of K.E.V., 267 Mont. 323, 336, 883 P.2d 1246, 1255 (1994) (Trieweiler, J., concurring and dissenting) (citation and internal quotation marks omitted) (noting that “a facial challenge to a legislative act is of course the most difficult challenge to mount successfully, since the challenger must establish that no circumstances exist under which the act would be valid”). Equal Protection ¶15 The principal purpose of the Montana Constitution’s Equal Protection Clause, art. II, § 4, is to ensure that Montana’s citizens are not subject to arbitrary and discriminatory state action. Powell, ¶ 16. When presented with an equal protection challenge, “we first identify the classes involved and determine whether they are similarly situated.” Rohlfs v. Klemenhagen, LLC, 2009 MT 440, ¶ 23, 354 Mont. 133, 227 P.3d 42. If we determine that the challenged statute creates classes of similarly situated persons, we next decide 9 whether the law treats the classes in an unequal manner. Caldwell v. MACo Worker’s Comp. Trust, 2011 MT 162, ¶ 16, 361 Mont. 140, 256 P.3d 923. Thus, to state a meritorious equal protection claim, Plaintiffs must demonstrate that “the state has adopted a classification that affects two or more similarly situated groups in an unequal manner.” Bustell v. AIG Claims Serv. Inc., 2004 MT 362, ¶ 20, 324 Mont. 478, 105 P.3d 286 (citing Powell, ¶ 22). ¶16 A law may create a classification even if the classification is not expressed “on the face” of the statute. State v. Spina, 1999 MT 113, ¶ 85, 294 Mont. 367, 982 P.2d 421 (citing John E. Nowak, et al., Constitutional Law, 600 (2d ed. 1983)). “[A] law may contain no classification, or a neutral classification, and be applied evenhandedly. Nevertheless the law may be challenged as in reality constituting a device designed to impose different burdens on different classes of persons.” Spina, ¶ 85 (citing Nowak, supra, at 600). Plaintiffs argue that the Act creates different classifications: 1. The class of persons with debilitating medical conditions: (a) some of whom have conditions for which marijuana is the single most effective medical treatment; (b) others who effectively may be treated with other pharmaceutical drugs. 2. Among those who are solely or optimally treated with marijuana: (a) those who have the physical ability and the means, including suitable space, to grow their own; (b) those who do not. The District Court concluded that the Act “do[es] impose different burdens on different classes of persons as described by [Plaintiffs] and, therefore, do[es] create a classification.” 10 ¶17 We concluded in Caldwell that a statute denying rehabilitation benefits to workers’ compensation claimants based on a claimant’s age-based eligibility for social security benefits created two classes of similarly-situated claimants because it distinguished by age between workers who had similar work-related injuries. Caldwell, ¶ 18. The statutes at issue here concern a group of persons who all suffer from a debilitating medical condition but are distinguished by the manner in which they may obtain relief. Some may be treated effectively with pharmaceutical drugs; for others, marijuana is the sole or most effective treatment. The identifying factor that distinguishes them is the method of treatment. As we recognized in MCIA I, the Act regulates a person’s right to a particular treatment for his or her medical condition. MCIA I, ¶ 24. We observed in Caldwell that whether the challenged statute creates a discriminatory classification is informed by the statute’s purpose. Caldwell, ¶ 19. In Caldwell, as in Reesor v. Montana. State Fund, 2004 MT 370, 325 Mont. 1, 103 P.3d 1019, age was “the only identifiable distinguishing factor between the two classes;” we concluded in both cases that age was “unrelated to a person’s ability to engage in meaningful employment.” Caldwell, ¶ 19; Reesor, ¶ 12. In contrast, we concluded in Wilkes v. Montana State Fund, 2008 MT 29, 341 Mont. 292, 177 P.3d 483, that where “actual wages” was the single distinguishing factor between workers’ compensation claimants, that was a “fundamental distinction” between the two classes sufficient to defeat similarity for purposes of the plaintiff’s equal protection claim. Wilkes, ¶ 20. We reasoned that one stated purpose of the Workers’ Compensation Act was that “the 11 wage-loss benefit should bear a reasonable relationship to actual wages lost as a result of work-related injury or disease.” Wilkes, ¶ 26 (internal quotation marks omitted) (quoting § 39-71-105(1), MCA). ¶18 The reasoning in Wilkes applies here. One stated purpose of the Act is to “provide legal protections to persons with debilitating medical conditions who engage in the use of marijuana to alleviate the symptoms of the debilitating medical condition.” Section 50-46-301(2)(a), MCA. There is no need for the Legislature to provide legal protections to persons using prescribed pharmaceutical medication. “The distinguishing factor between the two classes, [their use of medical marijuana], plainly relates to the underlying justification of the statute.” Wilkes, ¶ 20. We conclude that the distinctions in regulation of different substances for medical treatment does not create two legitimate classes for an equal protection challenge because the single identifying factor—use of a substance prohibited by federal law—is a fundamental difference that sufficiently distinguishes the two classes to render them dissimilar. Substantive Due Process ¶19 Although there is considerable overlap between an equal protection analysis and a substantive due process analysis, “each Clause triggers a distinct inquiry.” Evitts v. Lucey, 469 U.S. 387, 405, 105 S. Ct. 830, 841 (1985). Equal protection “emphasizes disparity in treatment by a State between classes of individuals whose situations are arguably indistinguishable,” while due process “emphasizes fairness between the State and the individual dealing with the State, regardless of how other individuals in the same 12 situation may be treated.” Evitts, 469 U.S. at 405, 105 S. Ct. at 841 (quoting Ross v. Moffitt, 417 U.S. 600, 609, 94 S. Ct. 2437, 2443 (1974)). “For example, if a state prohibited all persons from purchasing or using a certain drug or medicine, a challenge to that law would be based on substantive due process.” 2 Ronald D. Rotunda & John E. Nowak, Treatise on Constitutional Law: Substance and Procedure § 15.4(a) at 824 (5th ed. 2012). Because Plaintiffs essentially claim that the Act’s regulation of marijuana for medical purposes “restrict[s] the freedom of all persons in society without a constitutionally legitimate justification,” their challenges appropriately are analyzed under the due process clause, Montana Constitution Article II, Section 17. Rotunda & Nowak, supra, at 824. ¶20 Substantive due process also reflects a principle distinct from that protected by procedural due process: If an individual asserts that the government must provide him with some type of procedural safeguards before the government takes an interest from him, he must demonstrate that the interest constitutes life, liberty, or property. . . . There is no need to define life, property or liberty for substantive due process analysis . . . . All laws might be said to restrict [an] individual’s use of property rights or personal liberty, in the sense of restricting which actions the individual can take in society. Laws regulating property or liberty that do not restrict the exercise of a fundamental right should be upheld unless the person attacking the law can overcome the presumption of constitutionality and demonstrate that the law is not rationally related to a legitimate interest. Rotunda & Nowak, supra, § 15.5 at 847-48. ¶21 This Court analyzes substantive due process in the same fashion. Where a fundamental right is not implicated, “[s]ubstantive due process analysis requires a test of 13 the reasonableness of a statute in relation to the State’s power to enact legislation.” Satterlee v. Lumberman’s Mut. Cas. Co., 2009 MT 368, ¶ 33, 353 Mont. 265, 222 P.3d 566 (internal quotation marks omitted) (quoting Powell, ¶ 29). “Since the State cannot use its power to take an unreasonable, arbitrary or capricious action against an individual, a statute enacted by the legislature must be reasonably related to a permissible legislative objective in order to satisfy guarantees of substantive due process.” Satterlee, ¶ 33 (internal quotation marks omitted) (quoting Powell, ¶ 29). See Newville v. State Dep’t of Family Servs., 267 Mont. 237, 249, 883 P.2d 793, 800 (1994). We analyze substantive due process claims by examining (1) whether the legislation in question is related to a legitimate governmental concern, and (2) whether the means chosen by the Legislature to accomplish its objective are reasonably related to the result sought to be attained. Walters, ¶ 18. ¶22 In determining whether the statute’s objective is legitimate, we examine the legislation’s purpose, whether expressly stated or otherwise. Satterlee, ¶¶ 34, 37 (examining the purpose of worker’s compensation laws to determine whether they serve a permissible legislative objective); Goble v. Mont. State Fund, 2014 MT 99, ¶ 41, 374 Mont. 453, 325 P.3d 1211 (examining the stated policy provisions of the worker’s compensation system to determine whether it serves a legitimate governmental interest). The legislation’s purpose “does not have to appear on the face of the legislation or in the legislative history, but may be any possible purpose of which the court can conceive.” 14 Walters, ¶ 28 (internal quotation marks omitted) (quoting Satterlee, ¶ 34). See Kottel v. State, 2002 MT 278, ¶ 55, 312 Mont. 387, 60 P.3d 403. ¶23 In this case, we need not surmise possible purposes for the legislation because the Act makes explicit several purposes on its face. See Walters, ¶¶ 31-32; Goble, ¶ 41. Section 50-46-301, MCA, provides that the purposes of the Act are to: (a) provide legal protections to persons with debilitating medical conditions who engage in the use of marijuana to alleviate the symptoms of the debilitating medical condition; (b) allow for the limited cultivation, manufacture, delivery, and possession of marijuana as permitted by this part by persons who obtain registry identification cards; (c) allow individuals to assist a limited number of registered cardholders with the cultivation and manufacture of marijuana or marijuana-infused products; (d) establish reporting requirements for production of marijuana and marijuana-infused products and inspection requirements for premises; and (e) give local governments a role in establishing standards for the cultivation, manufacture, and use of marijuana that protect the public health, safety, and welfare of residents within their jurisdictions. Section 50-46-301(2), MCA. In addition, the legislative history demonstrates that the Act was enacted in response to the Legislature’s concern about a number of abuses that occurred following passage of the 2004 Act. As we noted in MCIA I, the 2011 Act was passed “in response to a drastic increase of caregivers and medical marijuana users.” MCIA I, ¶ 2. The goal of the Act, according to its sponsor, was “to repeal a system that is obviously broken, cleanse the system out, and then restore the laws of the State of Montana in a fashion that will recognize the intent of the Montana voters in 2004.” 15 Hearing on SB 423 Before the S. Jud. Comm. 62nd Leg. Reg. Sess. 07:46-08:01 (Mont. 2011). ¶24 Plaintiffs argue that they produced evidence proving the Legislature’s premises to be unfounded. They maintain that the District Court’s ruling correctly parsed the Act and struck down provisions that were shown not to be needed to address the Act’s legitimate objectives, while leaving intact other provisions that more effectively accomplished the Act’s purposes. Citing Brewer v. Ski-Lift, 234 Mont. 109, 115, 762 P.2d 226, 230 (1988), superseded by statute on other grounds as stated in Kopekin v. Moonlight Basin Mgmt., LLC, 981 F. Supp. 2d 936, 941 (Mont. 2013), Plaintiffs argue that the District Court properly enjoined provisions of the Act that are “needlessly overbroad and go far beyond the stated purposes of the statute.” ¶25 Brewer, however, says nothing about consideration of post-enactment evidence to prove a statute’s basis irrational. In concluding that the statute at issue in that case lacked a rational basis, this Court relied on the absence of reasons in the legislation to impose a strict assumption of risk standard on skiers in contradiction to state comparative negligence statutes that applied to other inherently dangerous activities. Brewer, 234 Mont. at 115, 762 P.2d at 230-31. We applied well-established principles of constitutional analysis: “‘The courts must reach and determine the question whether the classifications drawn in a statute are reasonable in light of its purpose . . . .’” Brewer, 234 Mont. at 112, 762 P.2d at 229 (quoting Laurence H. Tribe, American Constitutional Law, 1440 (2d ed. 1988)). Likewise, Plaintiffs’ reliance on Conant v. Walters, 309 F.3d 16 629 (9th Cir. 2002), is misplaced because that case involved consideration of empirical evidence to support an injunction, not a facial challenge to the constitutionality of a statute. ¶26 As in Conant, the District Court properly considered the Plaintiffs’ evidence in the context of their motions for preliminary injunctive relief. Section 27-19-201, MCA; Citizens for Balanced Use v. Maurier, 2013 MT 166, ¶ 28, 370 Mont. 410, 303 P.3d 794 (noting that a district court must consider “the equities of all interests involved”). But in the context of the constitutional analysis of the Act, “[o]ur role is not to second guess the prudence of a legislative decision.” Satterlee, ¶ 34. As with all legislative compromises, the [Act] is not infallible and the legislative decisions made in adopting the [Act] are subject to honest debate. Nevertheless, once a statute has been duly approved by the legislative branch, this Court’s role is not one of second guessing the prudence of the conclusions reached. Satterlee, ¶ 37. Rational basis is the most deferential standard of review. See e.g., Bankers Life & Cas. Co. v. Crenshaw, 486 U.S. 71, 83, 108 S. Ct. 1645, 1653 (1988); Mass. Bd. of Ret. v. Murgia, 427 U.S. 307, 314, 96 S. Ct. 2562, 2567 (1976). Under the due process clause, “the law need not be in every respect logically consistent with its aims to be constitutional.” Williamson v. Lee Optical of Okla., Inc., 348 U.S. 483, 487-88, 75 S. Ct. 461, 464 (1955). In light of the Act’s stated purposes, unless Plaintiffs establish that the statutes are unreasonable or arbitrary, the Legislature’s judgment should not be disturbed. Walters, ¶ 18. 17 ¶27 As we noted in Walters, it may be “easy to opine that the Legislature could have done better” in providing for available means of accessing treatment once it determined to authorize marijuana use for certain medical conditions; the law, however, “requires us to recognize that ‘such a debate involves issues and decisions about public policy that are clearly of the sort much better suited to the halls of the legislature.’” Walters, ¶ 33 (quoting Satterlee, ¶ 38). ¶28 We conclude that the Act’s purposes serve a legitimate state interest. The Legislature was highly cognizant of the fact that marijuana remains a Schedule I controlled substance, illegal for all purposes, under federal law. 21 U.S.C. §§ 812, 841, 845. The Legislature also took notice of the United States Attorney General’s direction to federal prosecutors that “[t]he prosecution of significant traffickers of illegal drugs, including marijuana, and the disruption of illegal drug manufacturing and trafficking networks continues to be a core priority in the Department’s efforts against narcotics and dangerous drugs . . . .” Memorandum from David W. Ogden, Deputy Attorney General, U.S. Dep’t of Justice, to Selected United States Attorneys, Investigations and Prosecutions in States Authorizing the Medical Use of Marijuana 1 (Oct. 19, 2009). (hereafter “Ogden Memorandum”).4 The Attorney General issued a new directive in August 2013 that refined and stated more clearly the objectives of particular importance to the United States government. They include, among numerous others, “[p]reventing 4 Indeed, while the Act was under consideration, federal law enforcement agencies conducted raids on medical marijuana facilities in multiple Montana communities, and the United States commenced prosecution against numerous individuals involved in the operations. 18 revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels; [and] [p]reventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity.” Memorandum from James M. Cole, Deputy Attorney General, U.S. Dep’t of Justice, to All United States Attorneys, Guidance Regarding Marijuana Enforcement, 1-2 (Aug. 29, 2013) (hereafter “Cole Memorandum”). While Plaintiffs emphasize that the Ogden and Cole Memoranda encourage federal prosecutors to decline prosecution of state-regulated marijuana dispensaries in most circumstances, “it’s Congress that passes the laws, Congress that saw fit to enact 21 U.S.C. § 841, and Congress that in § 841 made the distribution of marijuana a federal crime.” Feinberg v. Comm’r of Internal Revenue, 808 F.3d 813, 816 (10th Cir. 2015). As such, there is no basis for concluding that informal agency memoranda alter the U.S. government’s authority to enforce federal law. Moreover, “[t]here’s always the possibility, too, that the next (or even the current) Deputy Attorney General could displace th[o]se memoranda at anytime.” Feinberg, 808 F.3d at 816. After this case was argued, Plaintiffs called the Court’s attention to a recent Congressional Appropriations Act that prohibits the Justice Department from spending funds that would prevent states—including Montana—from implementing their own laws authorizing the use, distribution, possession, or cultivation of medical marijuana. Consolidated Appropriations Act, 2016, Pub. L. 114-113, § 542 Div. B, tit. V, 223 (2015). We take judicial notice of this action pursuant to M. R. Evid. 202(b). While the 19 measure does evince developing attitudes in Congress, the substantive criminal prohibitions in federal law remain intact. ¶29 The Legislature is presumed to be cognizant of guiding constitutional principles, under which federal law “shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” U.S. Const. art. VI, cl. 2. The Legislature sought to resolve prior abuses and to avoid entanglement with federal law while continuing to “provide legal protections” to qualified persons who engage in the medical use of marijuana, and to “allow individuals to assist a limited number” of qualified persons in obtaining marijuana or marijuana-infused products. Section 50-46-301(2)(a), (c), MCA. The careful regulation of access to an otherwise illegal substance for limited use by persons for whom there is little or no other effective alternative serves a legitimate state objective. ¶30 Having determined that the Act serves a legitimate objective, we proceed to consider whether the statutes are reasonably related to achieving that objective. Powell, ¶ 29. A statute that is unreasonable, arbitrary, or capricious and bears no reasonable relationship to a permissible government interest offends due process. Goble, ¶ 40. In contrast, a statute that is neither unreasonable nor arbitrary “when balanced against the purpose of the legislature in enacting the statute” does not offend due process. State v. Egdorf, 2003 MT 264, ¶ 19, 317 Mont. 436, 77 P.3d 517. This deferential standard demonstrates the Court’s recognition that we “have only the power to destroy, not to 20 reconstruct.” Stratemeyer v. Lincoln Cnty., 259 Mont. 147, 153, 855 P.2d 506, 510 (1993) (internal quotation and citation omitted). ¶31 In economic regulation cases, there are “good reasons for judicial self-restraint if not judicial deference to legislative judgment.” Stratemeyer, 259 Mont. at 152-53, 855 P.2d at 510 (internal quotation marks and citation omitted). “The legislature is simply in a better position to develop the direction of economic regulation . . . .” Stratemeyer, 259 Mont. at 153, 855 P.2d at 510. Because of this, we are “to assume that the Legislature was in a position and had the power to pass upon the wisdom of the enactment.” Rohlfs, ¶ 31. “[W]e cannot strike down [a statute] as a violation of substantive due process simply because we may not agree with the legislature’s policy decisions.” Satterlee, ¶ 34. “What a court may think as to the wisdom or expediency of the legislation is beside the question and does not go to the constitutionality of a statute.” Rohlfs, ¶ 31. Moreover, even if a court believes that statutes aimed at achieving the State’s interest could have been implemented “with greater precision,” those statutes likely still will withstand rational basis review because “rational distinctions may be made with substantially less than mathematical exactitude.” Ward v. Johnson, 2012 MT 96, ¶ 23, 365 Mont. 19, 277 P.3d 1216 (internal quotation marks omitted) (citing Burlington N. Ry. v. Ford, 504 U.S. 648, 653, 112 S. Ct. 2184, 2187 (1992) (quoting New Orleans v. Dukes, 427 U.S. 297, 303, 96 S. Ct. 2513, 2517 (1976))). ¶32 This restraint on judicial interference with legislative policy judgments has added significance here, because the Legislature took the unusual step in the Act of imposing 21 upon itself an obligation to continue examination of the issue and further consideration of changes in light of the evolving nature of the issue. Section 50-46-343, MCA, provides: [t]he children, families, health, and human services interim committee shall provide oversight of the department’s activities related to registering individuals pursuant to [the Act] and of issues related to the cultivation, manufacture, and use of marijuana . . . . The committee shall identify issues likely to require future legislative attention and develop legislation to present to the next regular session of the legislature. ¶33 We turn now to the application of the foregoing standards to the specific statutes at issue to determine whether they are “arbitrary or unreasonable,” or whether they instead are “rationally related to the recognized legitimate government objectives of the Act.” Walters, ¶ 34. ¶34 1. Whether the District Court erred in determining that the Act’s provision requiring the Department to notify the Board of Medical Examiners of any physician who certifies 25 or more patients in a year for medical marijuana (§ 50-46-303(10), MCA) fails rational basis review. ¶35 Under § 50-46-303(10)(a), MCA, the Department “shall provide the board of medical examiners with the name of any physician who provides written certification for 25 or more patients within a 12-month period. The board of medical examiners shall review the physician’s practices in order to determine whether the practices meet the standard of care.” Section 50-46-303(10)(b), MCA, requires that, “[t]he physician whose practices are under review shall pay the costs of the board’s review activities.” The District Court preliminarily enjoined these provisions on stipulation of the parties; the State withdrew from that stipulation following MCIA I. 22 ¶36 The District Court concluded that the 25-patient review trigger was not rationally related to the Act’s goals. The court relied in part on testimony from Ian Marquand, who appeared on behalf of the State Board of Medical Examiners. Marquand testified that there had been almost no reported problems with medical marijuana certifications following a standard of care directive issued by the Board in 2010 that disallowed certification exclusively by telemedicine. The court also relied on testimony from Roy Kemp, administrator of the Department’s medical marijuana registry program, who testified that “he knew of no rationale justifying the 25-patient limit.” Marquand’s and Kemp’s testimony, coupled with “the fact that this provision has never been in effect,” led the District Court to conclude that the 25-patient review trigger “is not rationally related—indeed not necessary at all—to the goals of the medical marijuana laws.” ¶37 The State argues that the District Court erred in its application of rational basis standards because it considered circumstances regarding the lack of problems with medical marijuana certifications following entry of the first preliminary injunction. The State contends that the court instead should have considered the “flagrant abuses” that were occurring in 2011, when the Legislature passed the Act. The State references testimony before a legislative conference committee to argue that the Legislature “realized that the abuse of the ‘chronic pain’ category was best controlled by increasing physician accountability.” The State also emphasizes the testimony of Dr. Stowers, one of the named plaintiffs, in the June 2011 preliminary injunction hearing. The State contends that Dr. Stowers acknowledged “serious problems with doctor 23 recommendations under the old law.” The State asserts that the 25-patient review trigger is rationally related to the Act’s goals because it creates a standard of care to ensure a bona fide physician-patient relationship and then “ensur[es] the standard is being followed by requiring review after a doctor certifies 25 or more patients in a year.” ¶38 We agree that the District Court incorrectly applied rational basis scrutiny to conclude that the 25-patient review trigger is not rationally related to the Act’s goals. The District Court based its conclusion on a finding that the 25-patient review trigger was “not necessary” to the goals of the medical marijuana laws. The question under rational basis review, however, is not whether the provision is necessary, but whether the provision is arbitrary or whether it has a “reasonable relation to some permitted end of governmental action . . . .” Powder River Cnty. v. State, 2002 MT 259, ¶ 79, 312 Mont. 198, 60 P.3d 357 (citations omitted). Although any limit the Legislature chooses may be attacked as an arbitrary number, we conclude that a 25-patient review trigger is not arbitrary in light of the statute’s objectives. The legislative history and testimony from the June 2011 preliminary injunction hearing show that there indeed were problems with over-certification under the 2004 Act. To address this problem, the Legislature created an objective standard of care for marijuana certification—set forth in § 50-46-302(2)(c), (18), MCA,—and the 25-patient review trigger. There is no arbitrary punishment for a doctor who certifies 25 or more patients because the Board of Medical Examiners is not required to suspend or otherwise take remedial action against the doctor under the statute. 24 Section 50-46-303(10)(a), MCA. Section 50-46-303(10)(a), MCA, requires only that the board review the doctor’s practices to determine whether they meet the standard of care. ¶39 While a 25-patient review trigger may or may not be the most effective way to prevent over-certification, it is beyond our purview to second-guess the “wisdom or expediency of the legislation.” Rohlfs, ¶ 31. And while there may not be precise statistical evidence that 25 patients is an ideal number to signal potential abuses, “rational distinctions may be made with substantially less than mathematical exactitude.” Ward, ¶ 23 (citations omitted). The review trigger also addresses the federal government’s expectation for “strong and effective regulatory and enforcement systems that will address the threat [that State marijuana laws] could pose to public safety, public health, and other law enforcement interests.” Cole Memorandum at 2. While a different scheme for preventing over-certification would have been permissible, the Legislature’s policy choice in this instance is not constitutionally invalid. See Ward, ¶ 24. ¶40 Finally, as noted above, the Legislature will continue to monitor its medical marijuana restrictions and recommend changes where circumstances warrant. Section 50-46-343, MCA. The 25-patient review trigger has never been in effect. Therefore, if the review provision turns out to be onerous or unworkable, the issue may be brought to the Legislature for consideration. ¶41 Because the 25-patient review trigger is rationally related to the legitimate state interest of carefully regulating the distribution of medical marijuana while allowing its limited use for people with debilitating medical conditions, we hold that the District 25 Court erred in determining that the 25-patient review trigger failed rational basis review. Accordingly, we vacate the District Court’s injunction against § 50-46-303(10), MCA, and uphold that provision of the Act. ¶42 2. Whether the District Court erred in determining that the Act’s commercial prohibitions (§§ 50-46-308(3), (4), (6)(a),(b), MCA) fail rational basis review. ¶43 The District Court enjoined several provisions of the Act that prohibit commercial trade in marijuana and marijuana products. The Act accomplishes its commercial restraint through two primary mechanisms: a three-patient limit for providers of marijuana products and a restriction against remuneration to providers. Section 50-46-308, MCA, provides: (3)(a)(i) A provider or marijuana-infused products provider may assist a maximum of three registered cardholders. (ii) A person who is registered as both a provider and a marijuana-infused products provider may assist no more than three registered cardholders. (b) If the provider or marijuana-infused products provider is a registered cardholder, the provider or marijuana-infused products provider may assist a maximum of two registered cardholders other than the provider or marijuana-infused products provider. (4) A provider or marijuana-infused products provider may accept reimbursement from a cardholder only for the provider’s application or renewal fee for a registry identification card issued under this section. . . . (6) A provider or marijuana-infused products provider may not: (a) accept anything of value, including monetary remuneration, for any services or products provided to a registered cardholder; (b) buy or sell mature marijuana plants, seedlings, cuttings, clones, usable marijuana, or marijuana-infused products. 26 Sections 50-46-308(3), (4), (6)(a), (b), MCA. The District Court analyzed the preceding sections as a whole, collectively referring to them as the “commercial provisions.” The court concluded that Plaintiffs met their initial burden by showing that the sections created distinct classes, and that the burden then shifted to the State to justify the distinction. The court found that one of the Act’s purposes is to “afford access to marijuana for persons with seriously debilitating conditions.” The court concluded that the commercial prohibitions “work in opposition to the goals of the statutes and the policy of the state” because the “compassionate purposes” of the statute are lost by the prohibition. According to the District Court, no provider “has come forward willing to invest the time, money, and labor to provide medical marijuana for free.” Therefore, the court concluded that the commercial prohibitions make it nearly impossible for people with the most serious debilitating conditions to get access to marijuana because the prohibitions essentially require them to grow their own marijuana—which they often are physically or financially unable to do. Based on these findings, the court held that there was no rational basis for the Act’s commercial prohibitions. ¶44 The District Court also addressed one of the State’s justifications for the commercial prohibitions—that marijuana is illegal under federal law. The court concluded that federal illegality cannot be a justification for the commercial prohibitions because the Act itself is “contrary” to federal law. To further support its conclusion, the court emphasized that the State had not provided evidence to show that certain abuses, prior to the Act’s passage, still existed. Based on this alleged lack of evidence, the court 27 concluded that the commercial prohibitions were irrelevant because “the medical marijuana laws, as enjoined . . . have accomplished their purpose.” ¶45 The State argues that the commercial prohibitions “easily pass” rational basis review for three reasons. First, the State claims that the court assumed an incorrect purpose for the Act because the explicit purpose of allowing “‘limited’ cultivation cannot be read to include affording commercial access—certainly not under rational basis review.” The State argues that the court inappropriately ruled on the “wisdom or expediency of the legislation” rather than providing the State the benefit of the doubt and assuming “any possible purpose” that may provide a legitimate interest. Second, the State claims that the District Court erred in refusing to consider federal illegality as a possible legitimate state interest for the commercial prohibitions. The State asserts that it has a legitimate interest in “lessening the conflict between a state law, its citizens, and federal law,” and that “taking the money out” of medical marijuana means that the federal government is less likely to get involved. Third, as discussed above, the State argues that the District Court erred by considering changed circumstances or the effects of the court’s preliminary injunctions. The State suggests that current circumstances support prohibition in any event because the growing number of cardholders evidences an increased potential for abuse. ¶46 Plaintiffs argue that the commercial prohibitions are an irrational response by the State to “perceived abuses.” According to Plaintiffs, “the State cannot, on the one hand, declare marijuana legally a medicine, but, on the other hand, arbitrarily discriminate as to 28 who may access it.” Plaintiffs contend that the State failed to provide “conceivable justifications” for the three-patient limit in its response to Plaintiffs’ Interrogatories. Plaintiffs respond to the State’s claimed justifications by arguing that: 1) selective scattered sound bites from legislative debates do not support rational basis because they are not authoritative and are “too general and not supported by evidence;” 2) according to Marquand’s testimony, there have been no problems with traveling caravans, doctor certification, and telemedicine since 2011; and 3) the federal ban is equivocal in that the State cannot definitively say whether there truly is a danger of federal prosecution because the U.S. Department of Justice, in the Ogden and Cole Memoranda, have “made it clear it will not interfere with the states as long as the states carefully monitor their laws.” ¶47 Our review of the commercial prohibitions focuses on whether they are rationally related to the State’s legitimate interest in carefully regulating access to an otherwise illegal substance for serious medical conditions. We analyze the three-patient limit separately from the remuneration restrictions. Three-Patient Limit: § 50-46-308(3), MCA ¶48 The three-patient limit is rational so long as it is not a capricious or arbitrary means of accomplishing the Act’s legitimate purpose. Powder River Cnty., ¶ 79. As noted previously, the Act was passed “in response to a drastic increase of caregivers and medical marijuana users.” MCIA I, ¶ 2. Because of this concern, one of the Act’s explicit purposes is to “allow individuals to assist a limited number of registered 29 cardholders with the cultivation and manufacture of marijuana or marijuana-infused products.” Section 50-46-301(c), MCA. ¶49 The Legislature determined that placing a limit on the number of registered cardholders a provider may assist serves the objectives of keeping marijuana away from large-scale manufacturing operations, making it less appealing to major traffickers. This relates directly to the federal government’s goals of preventing marijuana sales revenue from going to criminal enterprises and of keeping state-authorized marijuana activity from being used as a cover for other drug trafficking. Plaintiffs conceded during oral argument that, in light of these concerns, the State “probably could” set limits on the number of cardholders a provider could assist. The Legislature conceivably could have fixed a different number. But in the face of marijuana’s outright prohibition under federal law, and the U.S. government’s avowed intention to investigate and prosecute marijuana offenses where it finds “an important federal interest,” Cole Memorandum at 4, it is not irrational for the Legislature to put mechanisms in place to limit its commercial profitability. Whether a limit of just three patients is the best or the most effective means of achieving the State’s legitimate purpose is not for the Court to judge. Rohlfs, ¶ 31. Furthermore, it is outside our authority to opine on what number—if not three—would pass constitutional muster; “mathematical exactitude” is not required. Ward, ¶ 23 (citations omitted). Finally, the Legislature has committed itself to reviewing such matters if the three-patient limit proves unworkable. Section 50-46-343, MCA. 30 ¶50 Because the three-patient limit is reasonably related to the legitimate governmental concern of affording a means of treatment while avoiding large-scale commercial marijuana production, we hold that the District Court erred in concluding that the three-patient limit fails rational basis scrutiny. Walters, ¶ 18. Accordingly, we vacate the District Court’s injunction against § 50-46-308(3) MCA, and we uphold this subsection of the Act. Remuneration Restrictions: § 50-46-308(4), (6)(a), (b), MCA ¶51 In analyzing the remuneration restrictions for due process concerns we consider whether the restrictions bear a fair and substantial relation to the object of the legislation. Powell, ¶ 29. The State asserts that the purpose of the remuneration restrictions is to protect Montana from federal involvement by avoiding large-scale commercial marijuana operations. According to the State, the remuneration restrictions are rationally related to that goal. ¶52 Plaintiffs respond by pointing to Kemp’s testimony that if the three-patient limit and the remuneration restrictions were implemented, “that alone would completely disable it and invalidate the program.” While the initial choice to regulate is one for the legislative branch, Plaintiffs argue, “the Act’s attempt to prohibit all commercial traffic is completely out of proportion to any reasonable assessment of potential abuse.” ¶53 Legislative history indicates that the purpose of imposing restrictions against financial compensation of providers was to “keep the money out” of the marijuana business—presumably, to meet the federal government’s objectives of preventing 31 large-scale marijuana production operations that could serve as a front for other illegal drug trafficking and could funnel revenues to cartels, gangs, and criminal enterprises. While this is a legitimate objective, we must be able to ascertain a rational relationship between a complete prohibition against financial compensation and the objectives the Legislature sought to achieve. Walters, ¶ 18. We conclude that the remuneration restrictions fail this inquiry. ¶54 We first observe that the Act does not prohibit physicians from being compensated for their services or expenses when they examine a patient and provide written certification for the patient’s medical use of marijuana products. In addition, the State has not cited, and the Court has not found, any other service or product sanctioned by state law that the Legislature has mandated be provided for free. Although the State argues that the remuneration restrictions do effectively “keep the money out,” the restrictions are at odds with the Legislature’s stated purpose of allowing the limited possession and use of marijuana by persons with debilitating medical conditions in order to alleviate their symptoms. Section 50-46-301(2)(a), (b), MCA. More, the restriction is contrary to the purpose of keeping marijuana revenues out of the hands of criminals because it drives the business of medical marijuana to the black market. The Act allows marijuana to be used medically with approval by a physician. The complete prohibition against compensation is invidious because medical marijuana, even when approved by a physician, would have no commercially available source of supply. 32 ¶55 Finally, this provision also implicates equal protection concerns. See Evitts, 469 U.S. at 405, 105 S. Ct. at 841; Ross, 417 U.S. at 609, 94 S. Ct. at 2443 (recognizing that concerns of both clauses may be implicated in some cases and offer support for the Court’s conclusions). “A classification is not reasonable if it . . . ‘imposes peculiar disabilities upon [a] class of persons arbitrarily selected from a larger number of persons, all of whom stand in the same relation to privileges conferred or disabilities imposed.’” Kottel v. State, 2002 MT 278, ¶ 55, 312 Mont. 387, 60 P.3d 403 (quoting Leuthold v. Brandjord, 100 Mont. 96, 105, 47 P.2d 41, 45 (1935)). To withstand rational basis scrutiny, a legislative classification must rest upon a “real difference” and some reasonable consideration of difference or policy. Powder River Cnty., ¶ 79. As between all users of medical marijuana, the remuneration provision imposes a peculiar disability upon those unable to provide for themselves. To prohibit all compensation arbitrarily sets apart the patient who is unable to produce a medical marijuana product for her own use; this is not encompassed within any of the Act’s legitimate objectives and is not based on reasonable consideration of differences between people with debilitating medical conditions. ¶56 Accordingly, we conclude that the absolute prohibition against remuneration is not reasonable “when balanced against the purpose of the [L]egislature in enacting the [Act].” Egdorf, ¶ 19. We uphold the District Court’s permanent injunction against the remuneration restrictions, § 50-46-308(4), (6)(a), (b), MCA, and declare that those 33 provisions are invalid as violative of the equal protection and due process clauses of the Montana Constitution. ¶57 3. Whether the District Court erred in applying strict scrutiny review to the Act’s provision prohibiting advertising by providers of medical marijuana (§ 50-46-341, MCA), thereby concluding that the provision unconstitutionally infringes free speech. ¶58 Applying strict scrutiny, the District Court determined that the advertising prohibition violates the First Amendment. The court held that the provision restricts content-based speech because it “renders the ‘playing field’ for discussion of pros and cons of medical marijuana completely uneven.” Additionally, the District Court concluded that the advertising prohibition is “so vague and overbroad as to be meaningless as to what it prohibits,” because it leaves open the potential of banning political speech as well. The court also concluded that the statute is too narrow in that it limits only advertising by valid cardholders and because “[r]egulations which impose speech restrictions on one group are seldom upheld.” ¶59 The State asserts that this Court should apply basic rules of statutory construction to conclude that the statute unambiguously bars commercial speech only, thus affording it less protection. The State’s primary contention is that the District Court erred by applying strict scrutiny to the advertising ban when it should have applied the four-part commercial speech test set forth in Central Hudson Gas & Electric v. Public Service Commission of New York, 447 U.S. 557, 100 S. Ct. 2343 (1980). Citing City of Great Falls v. Morris, 2006 MT 93, ¶ 19, 332 Mont. 85, 134 P.3d 692, the State argues that the 34 court should have interpreted the statute narrowly in a way that avoids an unconstitutional interpretation. ¶60 Plaintiffs argue that the advertising ban is overbroad and implicates both political and educational speech. Plaintiffs therefore claim that the court was correct to apply strict scrutiny instead of rational basis. Plaintiffs further argue that the government failed to meet even a rational basis standard when it relied on an overly deferential interpretation of the standard and failed to provide a M. R. Civ. P. 30(b)(6) witness or other evidence to justify the ban. ¶61 The U.S. Supreme Court has defined commercial speech as an “expression related solely to the economic interests of the speaker and its audience.” Cent. Hudson, 447 U.S. at 561, 100 S. Ct. at 2349. This definition, together with our well-established rules of statutory interpretation, guides our determination of the speech that § 50-46-341, MCA, prohibits. ¶62 In construing a statute, we are “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. “Statutory language must be construed according to its plain meaning and if the language is clear and unambiguous, no further interpretation is required.” In re Adoption of Snyder, 2000 MT 61, ¶ 14, 299 Mont. 40, 996 P.2d 875. “[W]e construe statutes narrowly to avoid an unconstitutional interpretation if possible.” Farrier v. Teachers Ret. Bd., 2005 MT 229, ¶ 13, 328 Mont. 375, 120 P.3d 390. 35 ¶63 Applying these rules of construction to § 50-46-341, MCA, we conclude that the advertising ban prohibits only commercial speech. The statute provides: Advertising prohibited. Persons with valid registry identification cards may not advertise marijuana or marijuana-related products in any medium, including electronic media. Section 50-46-341, MCA. Advertising is “[t]he action of drawing the public’s attention to something to promote its sale.” Black’s Law Dictionary 65 (Bryan A. Garner ed., 10th ed. 2014). A product is “[s]omething that is distributed commercially for use or consumption . . . .” Black’s Law Dictionary, supra, at 1402. These commonly-understood terms the statute employs are not subject to multiple interpretations. The plain language clearly and unambiguously establishes that the statute is aimed solely at expression relating to the commercial sale of marijuana or marijuana products for use or consumption. We would impermissibly “insert what has been omitted” to hold that the statute implicates political speech or speech pertaining to education or advocacy. Section 1-2-101, MCA. ¶64 “Commercial speech is accorded less constitutional protection than noncommercial speech.” Mont. Media, Inc. v. Flathead Cnty., 2003 MT 23, ¶ 30, 314 Mont. 121, 63 P.3d 1129 (citing Metromedia Inc. v. City of San Diego, 453 U.S. 490, 506, 101 S. Ct. 2882, 2891-92 (1981)). To determine the validity of a commercial speech restriction, we apply the factors set forth in Central Hudson, which do not call for strict scrutiny. Mont. Media, Inc., ¶ 31. The Central Hudson factors are: (1) the speech must concern lawful activity and not be misleading; (2) the asserted government interest must 36 be substantial; (3) the regulation must directly advance the governmental interest asserted; and (4) the regulation must not be more excessive than necessary to achieve its purpose. Cent. Hudson, 447 U.S. at 566, 100 S. Ct. at 2351. ¶65 Considering the first factor, it bears repeating that marijuana use or possession unequivocally is an unlawful activity under federal law. 21 U.S.C. §§ 812, 841, 845; MCIA I, ¶ 32. Federal law controls our First Amendment commercial speech analysis, U.S. Const. amend. I; Mont. Media, ¶ 31, and Plaintiffs rely exclusively on federal law in their argument on this issue. Congress has acted upon the subject of marijuana and made it illegal. That a person possesses or uses medical marijuana in compliance with the laws of his or her state of residence provides no defense under the federal law. Gonzales v. Raich, 545 U.S. 1, 29, 125 S. Ct. 2195, 2212-13 (2005). “[A]ny legislation of a State, although in pursuance of an acknowledged power reserved to it, which conflicts with the actual exercise of the power of Congress over the subject of commerce, must give way before the supremacy of the national authority.” Smith v. Ala., 124 U.S. 465, 437, 8 S. Ct. 564, 566 (1888); U.S. Const. art. I, § 8, cl. 3. While the states retain police power to establish and enforce laws protecting the welfare, safety, and health of the public, U.S. Const. amend. X, if Congress acts upon the same subject, “the laws of the States, in so far as they cover the same field, are superseded, for necessarily that which is not supreme must yield to that which is.” Second Emp’rs Liab. Cases, 223 U.S. 1, 55, 32 S. Ct. 169, 177 (1912) (citations omitted). 37 ¶66 Because federal law governs the analysis of this issue, we conclude that an activity that is not permitted by federal law—even if permitted by state law—is not a “lawful activity” within the meaning of Central Hudson’s first factor. As such, the advertisement of marijuana is not speech that concerns lawful activity. There is no First Amendment violation and our analysis under Central Hudson therefore ends here. ¶67 Section 50-46-341, MCA, limits only commercial speech. The District Court accordingly erred in applying strict scrutiny instead of the Central Hudson test. Section 50-46-341, MCA, does not satisfy the first factor under Central Hudson, and thus does not unconstitutionally infringe on First Amendment free speech rights. Accordingly, we vacate the District Court’s injunction against § 50-46-341, MCA, and uphold the statute. ¶68 4. Whether the District Court erred in determining that the Act’s provision prohibiting probationers from becoming registered cardholders for medical marijuana use (§ 50-46-307(4), MCA) withstands a facial challenge under rational basis scrutiny. ¶69 Section 50-46-307(4), MCA, prohibits probationers from becoming registered cardholders for medical marijuana: “A person may not be a registered cardholder if the person is in the custody of or under the supervision of the department of corrections or youth court.” Section 50-46-307(4), MCA. ¶70 The District Court upheld § 50-46-307(4), MCA, because it was “able to perceive a substantial rational basis for th[e] provision.” The court noted that probationers “routinely have several limitations on their activities and rights.” While the court agreed with Plaintiffs’ argument that criminal sentences should have a “nexus with the underlying offense,” the court ultimately concluded that determining such a nexus 38 requires case-by-case consideration, which “raises genuine issues of material fact beyond the ability of this Court to determine on a motion for summary judgment.” ¶71 The State defends the District Court’s ruling, suggesting that Plaintiffs must bring any challenge to § 50-46-307(4), MCA, as applied to a particular case, rather than as a facial challenge, because there are “clearly circumstances in which the prohibition is constitutional.” ¶72 Plaintiffs contend that the “blanket prohibition” on probationers receiving medical marijuana is facially invalid because “the law, on its face, classifies persons for different treatment.” Plaintiffs maintain that § 50-46-307(4), MCA, undermines the purpose of the Act—to provide access to medical marijuana for those with debilitating medical conditions. Plaintiffs point out that under State v. Ashby, 2008 MT 83, 342 Mont. 187, 179 P.3d 1164, a sentencing court may, on a case-by-case basis, impose reasonable conditions on sentences so long as the conditions have “a nexus” either to the offense or to the offender. Ashby, ¶ 15. This case-by-case analysis, Plaintiffs suggest, is impossible under the current statute because the ban prohibits medical marijuana in all cases for probationers. Plaintiffs argue that the “complete ban on probationers’ use” should be declared unconstitutional, and that a sentencing court should consider on a case-by-case basis whether to allow marijuana use by an offender serving a suspended or deferred sentence, just as sentencing courts consider other appropriate conditions based on the characteristics of the offender and of the offense committed. 39 ¶73 We agree with the District Court. As noted above, a facial challenge may succeed only if the challenger can establish that “no set of circumstances exists under which the [challenged legislation] would be valid.” Salerno, 481 U.S. at 745, 107 S. Ct. at 2100. That the challenged provision “might operate unconstitutionally under some conceivable set of circumstances is insufficient to render it wholly invalid . . . .” Salerno, 481 U.S. at 745, 107 S. Ct. at 2100. Although Plaintiffs mount a facial challenge to the ban on probationer use, they recognize that a sentencing court is authorized by law to impose reasonable conditions on a sentence that the sentencing judge “considers necessary to obtain the objectives of rehabilitation and the protection of the victim and society.” Section 46-18-202(1), MCA. Whether a condition or restriction of a sentence bears the requisite “nexus” to the offender or to the underlying offense is a question of compliance with sentencing statutes. Ashby, ¶¶ 13-15. If, in a particular case, a district court imposes a sentence prohibiting medical marijuana use but the required nexus is not satisfied, an offender may be able to bring a claim that, as applied to that offender and to his or her sentence, § 50-46-307(4), MCA, is unconstitutional. Plaintiffs acknowledge that a sentencing court would have discretion, in particular cases, to prohibit an offender from using or possessing medical marijuana. In light of this concession, Plaintiffs cannot argue that the ban on probationer use is invalid under any conceivable set of circumstances. As such, § 50-46-307(4), MCA, is not facially invalid. We affirm the District Court’s ruling upholding the provision prohibiting probationers from becoming registered cardholders for medical marijuana use. 40 ¶74 5. Whether the District Court erred in determining that the Act’s provision allowing warrantless inspections of medical marijuana providers’ businesses by the Department and law enforcement agencies (§ 50-46-329, MCA) comports with the U.S. and Montana Constitutions’ guarantees against unreasonable searches. ¶75 The Act allows law enforcement agencies to inspect a provider’s premises during normal business hours without a warrant. Section 50-46-329, MCA, provides: Inspection procedures. (1) The department and state or local law enforcement agencies may conduct unannounced inspections of registered premises. (2) (a) Each provider and marijuana-infused products provider shall keep a complete set of records necessary to show all transactions with registered cardholders. The records must be open for inspection by the department and state or local law enforcement agencies during normal business hours. (b) The department may require a provider or marijuana-infused products provider to furnish information that the department considers necessary for the proper administration of this part. (3) (a) A registered premises, including any places of storage, where marijuana is cultivated, manufactured, or stored is subject to entry by the department or state or local law enforcement agencies for the purpose of inspection or investigation during normal business hours. (b) If any part of the registered premises consists of a locked area, the provider or marijuana-infused products provider shall make the area available for inspection without delay upon request of the department or state or local law enforcement officials. (4) A provider or marijuana-infused products provider shall maintain records showing the names and registry identification numbers of registered cardholders to whom mature plants, seedlings, usable marijuana, or marijuana-infused products were transferred and the quantities transferred to each cardholder. ¶76 In upholding this provision, the District Court relied on New York v. Burger, 482 U.S. 691, 107 S. Ct. 2636 (1987). In Burger, the U.S. Supreme Court established a rule that administrative or regulatory inspections of “closely regulated” industries can 41 constitute an exception to the warrant requirement even if the inspections are conducted by law enforcement officials to uncover and use evidence of criminal behavior. Burger, 482 U.S. at 703-11, 107 S. Ct. at 2646-48. The District Court concluded that the marijuana industry is a closely regulated industry. The court emphasized that “possession and use of marijuana remains a crime under federal law,” and that the “entire issue of marijuana use and possession generally has significant criminal overtones.” Moreover, the court concluded that § 50-46-329, MCA, “carefully defin[ed]” the premises subject to inspection, thereby avoiding concerns that inspections might be too broad or intrusive. ¶77 Plaintiffs contend that the court’s “lock-step adherence” to Burger is incorrect because 1) the search provisions relate to law enforcement functions rather than to administrative searches, and 2) Montana’s privacy rights are much stronger than those implicitly found under the United States Constitution. Relying on federal law, Plaintiffs argue that the authorization for warrantless inspections is unconstitutional because there are “no administrative regulations concerning specific neutral criteria governing warrantless searches under the Act.” According to Plaintiffs, the lack of a regulatory scheme makes it “abundantly clear that the so-called ‘inspection’ procedures of the Act are for the sole purpose of allowing law enforcement officers to develop evidence for enforcement of criminal laws.” Additionally, given Montana’s explicit privacy expectation, Plaintiffs argue that the State must have a compelling reason to invade someone’s privacy and that it has demonstrated none. Plaintiffs assert that the State 42 “failed to provide a meaningful answer and refused to produce a [M. R. Civ. P.] 30(b)(6) witness” when Plaintiffs questioned the inspections’ purposes in pre-trial discovery. ¶78 Plaintiffs’ argument that marijuana is not a heavily regulated industry in Montana because there are “no regulations . . . applying to growing operations or establishing inspection procedures for medical marijuana dispensaries” overlooks that the provision has been the subject of this litigation since its enactment. Thus, there has been no opportunity for its full implementation. Further, Plaintiffs acknowledge that marijuana is classified as a Schedule I drug—the most strictly regulated classification under the Controlled Substances Act. 21 U.S.C. § 812(c). “Schedule I drugs are categorized as such because of their high potential for abuse, lack of any accepted medical use, and absence of any accepted safety for use in medically supervised treatment.” Gonzales, 545 U.S. at 14, 125 S. Ct. at 2204. ¶79 Plaintiffs’ argument that the production of medical marijuana is not a closely regulated industry is in disaccord with their argument that many provisions of the Act are overly restrictive. By design, the Act distinguishes medical marijuana from other substances for which a prescription may be obtained and filled under an existing set of laws and regulations comprehensively controlling the sale and dispensing of lawful medications. Because marijuana cannot be prescribed within that regulatory framework, the Legislature imposed instead a series of restrictions to curb widespread distribution and to limit possession of the substance to individuals with debilitating medical conditions for whom there is little or no other effective treatment. Marijuana’s status as a 43 strictly prohibited drug under federal law required the Legislature to devise a substitute method of regulation. ¶80 Although Plaintiffs eschew “lock-step adherence” to federal law, they do not develop their argument that the result would be different under a Montana constitutional privacy analysis, except to fault the State for failing “to produce a 30(b)(6) witness” to establish a compelling state interest as required by Montana Constitution Article II, Section 10. Plaintiffs cite no authority that this determination requires an evidentiary foundation. ¶81 Rather, to determine what constitutes an unlawful intrusion by the government into one’s privacy, the Court considers the following factors: (1) whether the person has an actual expectation of privacy; (2) whether society is willing to recognize that expectation as objectively reasonable; and (3) the nature of the state’s intrusion. State v. Therriault, 2000 MT 286, ¶ 33, 302 Mont. 189, 14 P.3d 444. While individuals may have an actual expectation of privacy from warrantless searches, an expectation that a provider’s marijuana production and distribution facilities are entitled to the same privacy protections is not one that society is willing to recognize as objectively reasonable. Indeed, it is reasonable for owners of registered premises where marijuana—a uniquely regulated substance—is cultivated, manufactured, or stored to expect those premises to be subject to inspection during normal business hours to satisfy the State’s legitimate regulatory interests. 44 ¶82 Plaintiffs’ argument that the primary reason for the procedures under § 50-46-329, MCA, “is to allow for evidentiary searches for criminal enforcement purposes” is not only unsubstantiated, but also inappropriate for a facial challenge. Without any supporting evidence, Plaintiffs conclude that because Montana has no regulatory scheme regarding grow operations, “it is abundantly clear that the so-called ‘inspection’ procedures of the Act are for the sole purpose of allowing law enforcement officers to develop evidence for enforcement of criminal laws.” This conclusory assertion does not support a holding that the inspection procedures are facially invalid. Section 50-46-329, MCA, on its face addresses only the regulatory aspects of the medical marijuana industry, not the enforcement of criminal laws. If issues arise with a warrantless inspection against a particular facility, then it may be appropriate to challenge the statute “as applied” to that business. We conclude that Plaintiffs have failed to establish that “no set of circumstances exists under which the [challenged legislation] would be valid.” Salerno, 481 U.S. at 745, 107 S. Ct. at 2100. The District Court did not err in declining to enjoin § 50-46-329, MCA, and we affirm its ruling on this point. CONCLUSION ¶83 For the reasons stated above, the District Court’s judgment is affirmed in part and reversed in part. We vacate the District Court’s injunctions against the 25-patient physician review provision (§ 50-46-303(10), MCA), the three-patient limit (§ 50-46-308(3), MCA), and the advertising prohibition (§ 50-46-341, MCA), and uphold the constitutionality of those provisions; we declare the remuneration restrictions 45 (§ 50-46-308(4), (6)(a), (b), MCA), to be unconstitutional under the equal protection and due process clauses of the Montana Constitution and permanently enjoin the enforcement of those provisions; and we affirm the District Court in upholding the constitutional validity of the provision prohibiting probationers from becoming registered cardholders for medical marijuana use (§ 50-46-307(4), MCA), and the provision allowing warrantless inspections of medical marijuana providers’ businesses by the Department and law enforcement agencies (§ 50-46-329, MCA). /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ JAMES JEREMIAH SHEA /S/ ROBERT G. OLSON District Court Judge Robert G. Olson sitting for Justice Patricia Cotter Justice Laurie McKinnon specially concurs and dissents. ¶84 The Court provides an exhaustive substantive due process analysis of the Act after “acknowledging the proverbial ‘elephant in the room,’” that “[m]arijuana is a Schedule I Controlled Substance under the federal Controlled Substances Act,” which criminalizes its cultivation and distribution. Opinion, ¶ 13. The Court correctly notes that the parties are not challenging the Act on the ground that it is preempted by federal law, Opinion, 46 ¶ 13, and that “one stated purpose of the Act is to ‘provide legal protections to persons with debilitating medical conditions who engage in the use of marijuana to alleviate the symptoms of the debilitating medical condition.’” Opinion, ¶ 18 (citation omitted and emphasis added). The Court nevertheless fails to remain focused on this purpose for the legislation—to provide legal protections. ¶85 The State, pursuant to its police powers, may define what is and is not a criminal offense under the laws of Montana, including what constitutes a defense or immunity to a state prosecution. The Court’s analysis is led astray by Plaintiff’s arguments that are incorrectly premised upon the purpose of the Act as being one of providing access to marijuana. Opinion, ¶ 29 (“The careful regulation of access to an otherwise illegal substance for limited use by persons for whom there is little or no other effective alternative serves a legitimate state objective.”). ¶86 Marijuana is a Schedule I controlled substance under § 50-32-222(4)(x), MCA. It is considered a dangerous drug under §§ 50-32-101(6), -202, MCA. Distribution includes selling, bartering, exchanging, giving away, or offering to sell, barter, exchange, or give away. Section 45-9-101(1), MCA. The Act “provides exceptions to the illegality of distribution and possession, establishing certain privileges for those in compliance with its provisions.” Med. Marijuana Grower’s Ass’n v. Corrigan, 2012 MT 146, ¶ 25, 365 Mont. 346, 281 P.3d 210 (emphasis added). ¶87 In enacting the Act, the Legislature sought to “provide legal protections to persons . . . who engage in the use of marijuana to alleviate the symptoms of [a] debilitating 47 medical condition.” Section 50-46-301(2)(a), MCA. The Legislature intended to “allow for the limited cultivation, manufacture, delivery, and possession of marijuana” and “allow individuals to assist a limited number of registered cardholders with the cultivation and manufacture of marijuana.” Section 50-46-301(2)(b-c), MCA. Amounts that a registered cardholder may possess are limited, § 50-46-319, MCA, and places of use are similarly restricted, § 50-46-320, MCA. The Act provides that an individual “may not be arrested, prosecuted, or penalized in any manner” solely because “the individual cultivates, manufactures, possesses or transports marijuana in the amounts allowed under this section; or the registered cardholder acquires or uses marijuana.” Section 50-46-319(2), MCA. As previously explained by this Court, “the legislature, in its exercise of the State’s police powers, decided that it would legalize the limited use of medicinal marijuana while maintaining a prohibition on the sale of medical marijuana.” MCIA I, ¶ 21. ¶88 States use their inherent police powers to create crimes and also defenses, exceptions, or immunities to those crimes. The “State of Montana has a police power by which it can regulate for the health and safety of its citizens.” Wiser v. State, 2006 MT 20, ¶ 19, 331 Mont. 28, 129 P.3d 133 (citing State v. Skurdal, 235 Mont. 291, 294, 767 P.2d 304, 306 (1988)). Certain statutory provisions create affirmative defenses, exceptions, or immunities to crimes which grant defendants a limited immunity from prosecution. See generally State v. Archambault, 2007 MT 26, 336 Mont. 6, 152 P.3d 698. For instance, justifiable use of force provisions, §§ 45-3-101 through -115, MCA, create an affirmative defense to actions that would otherwise constitute crimes. Human trafficking statutes provide another example of immunity and an affirmative 48 defense provided to a child who is a victim. Sections 45-5-709, -710, MCA. Further, by its terms, § 45-8-109(3), MCA, provides a variety of exceptions to a charge of civil disorder, including actions of a peace officer committed during performance of their duties; training in nonviolent civil disobedience techniques; lawful self-defense or defense of others or an activity intended to teach or practice self-defense or self-defense techniques; or training in safe firearm handling and use. Under § 45-6-203, MCA, a person qualified to appraise or audit property for property tax purposes, a person qualified to survey land to delineate boundaries, or a firewarden exercising their duty are excepted from prosecution for criminal trespass by §§ 15-7-139, 70-16- 111, and 76-13-116, MCA. Finally, under § 45-8-206(2)(a), MCA, it is a defense to the crime of public display or dissemination of obscene material to minors to have had reasonable cause to believe the minor was 18 years of age. ¶89 Given that marijuana is illegal and the State, in the exercise of its police powers, has carved out a “legal protection” to a state prosecution for violation of Montana’s controlled dangerous substance laws, I cannot agree that the statute creates any sort of classification of persons necessary for an equal protection challenge or any substantive right necessary for a substantive due process challenge. The Court states that the Act concerns “a group of persons who all suffer from a debilitating medical condition but are distinguished by the manner in which they may obtain relief. Some may be treated effectively with pharmaceutical drugs” and for others, “marijuana is the sole or most effective treatment.” Opinion, ¶ 17. However, the Act simply fails to make any of the distinctions between “groups” which the Court implicitly considers. The Act does not provide marijuana for one group of persons and withhold it from another group; it does 49 not distinguish based upon type of prescription medication; and it does not distinguish based upon who is able to grow marijuana. The Act does, however, provide a benefit or privilege—not a right—to those using marijuana for medical purposes and correspondingly defines, as the State may do, the parameters of a defense for violation of Montana’s controlled dangerous substance laws.1 ¶90 To prevail on an equal protection challenge, the plaintiff “must demonstrate that the law at issue discriminates by impermissibly classifying individuals and treating them differently on the basis of that classification.” Egdorf, ¶ 15 (citation omitted). A plaintiff must first show that the challenged law creates a classification between two classes which are otherwise similarly situated. Farrier, ¶ 15. If a plaintiff is unable to show that the challenged law creates such a classification among similarly situated individuals, the inquiry ends and the court need not apply rational basis review. See Powell, ¶ 22 (“If the classes at issue are not similarly situated, then the first criteria for proving an equal protection violation is not met and we need look no further.”). To the extent the Court finds that the Act creates two groups of persons who are “distinguished by the manner in which they may obtain relief,” I disagree. The Act provides limited “legal protections” to 1 Physicians do not “prescribe” marijuana under the Act, but instead provide a “written certification.” Section 50-46-310, MCA. Thus, medical marijuana is not a prescribed drug which, if the State prohibited all persons from using, might serve as a basis for a substantive due process challenge. The Court appears to imply medical marijuana is a prescribed drug, the prohibition of which implicates due process concerns. See Opinion, ¶ 18. 50 those who use marijuana for medical purposes; all other persons are using marijuana in violation of state law.2 ¶91 After correctly concluding that the Act “does not create two legitimate classes for an equal protection challenge,” Opinion, ¶ 18, the Court is led afield when it conducts an exhaustive substantive due process analysis. I disagree with the Court’s conclusion that Plaintiff’s challenges are appropriately analyzed under Montana’s due process clause. Opinion, ¶ 19. The Court separates the various provisions of the Act and asks itself whether a legal protection which benefits medical marijuana users, is either “arbitrary or unreasonable” or is “rationally related to the recognized legitimate government objectives of the Act.” Opinion, ¶ 33. ¶92 Both the Fourteenth Amendment to the United States Constitution and Article II, Section 17 of the Montana Constitution provide that no person shall be deprived of life, liberty, or property without due process of law. “Substantive due process primarily examines the underlying substantive rights and remedies to determine whether restrictions . . . are unreasonable or arbitrary when balanced against the purpose of the legislature in enacting the statute.” Newville, 267 Mont. at 249, 883 P.2d at 800 (citation omitted); see also Egdorf, ¶ 19. The concept of substantive due process refers to “the ability of government to restrict the freedom of action (regarding life, liberty, or 2 The potential that some individuals who are eligible to use marijuana under the Act may not be able to grow marijuana themselves or locate a provider does not establish a class, as Plaintiffs argue, and is insufficient to prove an equal protection violation. Again, the purpose of the Act is to provide legal protections. The idea that some medical marijuana users who are unable to grow their own marijuana creates a class for purposes of an equal protection violation is akin to an argument that homeless people create a class because they are unable to raise a defense pursuant to Montana’s “castle doctrine,” § 45-3-103, MCA. 51 property) of all persons.” Rotunda & Nowak, supra § 15.4(a) at 823-24 (emphasis added). A substantive due process analysis must begin with a careful description of the asserted right, for the “doctrine of judicial self-restraint requires that we exercise the utmost care whenever we are asked to break new ground in this field.” Collins v. City of Harker Heights, 503 U.S. 115, 125, 112 S. Ct. 1061, 1068 (1992). The United States Supreme Court has held that due process specially protects the right to marry, to have children, to direct the education and upbringing of one’s children, to marital privacy, to use contraception, to bodily integrity, to abortion, and to refuse unwanted lifesaving medical treatment. Wash. v. Glucksberg, 521 U.S. 702, 720, 117 S. Ct. 2258, 2267 (1997) (citations omitted). ¶93 In explaining the nature of a substantive due process claim, the Supreme Court has: [A]lways been reluctant to expand the concept of substantive due process because guideposts for responsible decision making in this unchartered area are scarce and open-ended. By extending constitutional protection to an asserted right or liberty interest, we, to a great extent, place the matter outside the arena of public debate and legislative action. We must therefore exercise the utmost care whenever we are asked to break new ground in this field, lest the liberty protected by the Due Process Clause be subtly transformed into the policy preferences of the Members of this Court. Glucksberg, 521 U.S. at 720, 117 S. Ct. at 2267-68 (internal quotation marks and citations omitted). A “careful description of the asserted fundamental liberty interest” is required and a court must decide whether the asserted liberty interest, as described, is “objectively, deeply rooted in this Nation’s history and tradition” and “implicit in the concept of ordered liberty, such that neither liberty nor justice would exist if they were 52 sacrificed.” Glucksberg, 521 U.S. at 720-21, 117 S. Ct. at 2268 (internal quotation marks and citations omitted). In Glucksberg, four physicians representing three anonymous, terminally-ill patients challenged a state law prohibiting assisted suicide. They argued that the patients had a fundamental right to choose medical treatment that included assistance in committing suicide. The Court rejected this argument, stating that, in previously holding that individuals have a fundamental “right to refuse unwanted medical treatment,” that holding could not “be somehow transmuted into a right to assistance in committing suicide.” Glucksberg, 521 U.S. at 725-26, 117 S. Ct. at 2270 (citation omitted). ¶94 Applying this analysis, many other courts have held that smoking, using, possessing, or manufacturing marijuana is not a substantive due process right. See Raich v. Gonzales, 500 F.3d 850, 864-66 (9th Cir. 2007) (holding that, where the plaintiff’s asserted fundamental right was “the right to use marijuana to preserve bodily integrity, avoid pain, and preserve her life,” that “federal law does not recognize a fundamental right to use medical marijuana prescribed by a licensed physician to alleviate excruciating pain and human suffering” because the alleged right was neither “fundamental” nor “implicit in the concept of ordered liberty”) (internal quotation marks and citations omitted); U.S. v. White Plume, 447 F.3d 1067, 1074-76 (8th Cir. 2006) (holding that there is no substantive due process right to farm hemp, which, like marijuana, contains tetrahydrocannabinol or THC); U.S. v. Maas, 551 F. Supp. 645, 647-48 (D.N.J. 1982) (“Smoking marijuana receives no explicit or implicit constitutional protection. The act of 53 smoking does not involve the important values inherent in questions concerning marriage, procreation, or child rearing. Moreover, its use predominantly as a ‘recreational drug’ undercuts any argument that its use is as important as, e.g., use of contraceptives”) (citations omitted); U S. v. Wash., 887 F. Supp. 2d 1077, 1102 (D. Mont. 2012). ¶95 We clearly stated in MCIA I, that Plaintiffs “cannot seriously contend that they have a fundamental right to medical marijuana when it is still unequivocally illegal under the [federal] Controlled Dangerous Substances Act.” MCIA I, ¶ 32 (citations omitted). Plaintiffs have no right or claim to “access” marijuana; rather the State has chosen to provide a benefit to those medical marijuana users who comply with the terms of the Act. It cannot reasonably be argued that there is a “substantive right” to possess a substance illegal under both federal and state law. ¶96 I thus disagree with the premise implicit in the Court’s approach—namely, that it is appropriate to conduct a substantive due process analysis of a “legal protection” allowed in a state criminal prosecution which has the purpose of providing a benefit or privilege—as compared to a deprivation—to medical marijuana users. These proceedings are not proceedings in which a defendant has attempted to mount a defense to a criminal prosecution by invoking the Act’s limited protections. Plaintiffs have alleged constitutional challenges premised on a right of access to marijuana. To the extent we have addressed these challenges with a far-reaching constitutional analysis— 54 inappropriate outside the context of a criminal proceeding invoking the protections of the Act—I am concerned that we have distorted our constitutional jurisprudence. ¶97 In particular, we find that the remuneration restriction violates the equal protection clause, after earlier concluding that an equal protection analysis is undeserved, without even identifying the two classes of persons we considered. We find that a patient who is unable to grow marijuana on her own is set apart. Opinion, ¶ 55. We conclude, without any analysis, that such a prohibition is not encompassed within the Act’s legitimate objectives. Opinion, ¶ 55. We cherry pick a provision from the Act that we find offensive and, not surprisingly, are completely unable to support it with an appropriate constitutional analysis. Such a policy preference for members of this Court is precisely the danger inherent in expanding substantive due process to an interest that is neither a substantive nor a fundamental right. ¶98 Marijuana is a controlled dangerous substance under federal and Montana law. The State, pursuant to its police powers, may define what is and is not a criminal offense under state law, including defining what constitutes a defense or immunity to a state prosecution. The Legislature, through the provisions of the 2011 Montana Marijuana Act, chose to carve out and define a defense to a state prosecution for marijuana possession. I would uphold all provisions of the Act as related to this exercise of police power. /S/ LAURIE McKINNON 55 Justice Jim Rice, dissenting. ¶99 I concur with the Court’s Opinion on all issues except for the remuneration provision, from which I dissent. In striking down the provision, the Court fails to properly implement the standards our precedent has imposed for due process review. ¶100 The sheer deference we pay to the legislature under reasonableness review could not be clearer under our precedent: “the purpose of the legislation does not have to appear on the face of the legislation or in the legislative history, but may be any possible purpose of which the court can conceive.” Satterlee v. Lumberman’s Mut. Cas. Co., 2009 MT 368, ¶ 34, 353 Mont. 265, 222 P.3d 566 (citing Stratemeyer v. Lincoln County, 259 Mont. 147, 152, 855 P.2d 506, 509-10 (1993)) (emphasis added). Despite this standard, the Court proceeds to test each provision of the Act not against any possible purpose, but against a single purpose to which it latches on and won’t let go. We have previously expressly rejected such an approach in the context of rational basis review, which the Court also employs to strike down the remuneration provision. Opinion, ¶ 55. See Stratemeyer, 259 Mont. at 151-52, 855 P.2d at 509-10 (holding lower court erred by reasoning “the legislature must provide” a rational basis and that a court “may not speculate” about the legislature’s purpose). We should reject this approach once again. When we have determined, as the Court here concedes, that “the legislation in question is related to a legitimate government concern,” then the inquiry is simply whether the means chosen by the Legislature to accomplish its objective “are reasonably related to the result sought to be obtained.” Walters v. Flathead Concrete Products, 2011 MT 45, ¶ 18, 56 359 Mont. 346, 249 P.3d 913 (citing Plumb v. Fourth Jud. Dist. Ct., 279 Mont. 363, 372, 927 P.2d 1011, 1016 (1996)). This inquiry is the embodiment of judicial restraint and deference. ¶101 Given that marijuana is illegal under federal law, and that the State’s interest may be “any possible purpose of which the court can conceive,” Satterlee, ¶ 34, it requires a particularly uncreative judge indeed to be unable to articulate a legitimate state interest that justifies the remuneration provision. Further, against this first backdrop of federal illegality, there is a second backdrop: the abuses of the drug and of the access provided to it under the I-148 initiative. In response to this chaos, which Plaintiffs acknowledge, the Legislature chose to decisively restrict, limit and constrain all aspects of marijuana availability, and to impose heavy regulation by passing the Act. While the Court ties itself to the generally stated purpose clauses of § 50-46-301, MCA—to which, as stated above, we are not bound—such as providing protections to those with debilitating medical conditions, it fails to acknowledge that the Act provided not one provision that expanded upon or liberalized access to the drug for anyone, as compared to the I-148 initiative. The Act, in its entirety, is a clear constriction of access in response to the abuses under prior law. The Legislature specifically sought to impose new, heavy regulations upon the illegal drug, particularly by “eliminating commercial access,” as the State’s brief states. This is a legitimate purpose, given the concerns created by commercial access to medical marijuana, such as the need to police, license, and tax commercial goods. The Legislature may well have believed that eliminating commercial 57 access alleviated these concerns, as it has with other home products. See § 16-3-201(2), MCA (exempting from regulation the manufacture of beer not intended for sale). ¶102 The Court counters that the remuneration provision will likely drive the business of medical marijuana back to the black market. Opinion, ¶ 54. Perhaps so, but the proper inquiry does not permit the Court to entertain such policy speculations, and, in fact, as properly applied, mandates the Court do just the opposite: speculation and presumption is required in favor of upholding the provision. See Davis v. Union Pacific R.R., 282 Mont. 233, 240, 937 P.2d 27, 31 (1997) (“[E]very possible presumption must be indulged in favor of the constitutionality of the legislative act.”). Employing such a presumption here, the remuneration provision certainly seems likely to eliminate commercial access and alleviate the State’s concerns for purposes of due process analysis, as well as justifying its enactment and differential treatment of the purported similarly situated classes under equal protection. ¶103 I would uphold all of the provisions of the Act. /S/ JIM RICE Justice Michael E Wheat, dissenting. ¶104 Except as to the Majority’s conclusion regarding the remuneration provisions, I respectfully dissent from the Majority’s decision in this case. 58 ¶105 At the outset, I note that I-148 was passed by a majority of Montana voters who clearly wanted medical marijuana to be made available for those who need it to treat medical conditions. This was and is the underlying purpose of the law. Shortcomings in the original law subsequently lead to abuses that required the Legislature to step in and impose restrictions to control the abuses. The real question in this case is whether the statutory restrictions went too far and impaired the rights of those who need medical marijuana by severely limiting or eliminating their access to a drug made medicinally legal under the Act. The answer is determined by how one views the underlying purpose of the Act: whether it is to provide “access” to a medicinal drug, or to provide “protection” to those engaged in the business (producers, distributors, and consumers), because marijuana remains federally illegal. So, which analytical lens one uses will determine the outcome. While I recognize a need for regulatory framework, I believe the State has gone too far in this case by creating a law that focuses so heavily on curbing the abuses of medicinal marijuana that it violates the rights of patients by so severely limiting or eliminating access to it, which ultimately destroys the law’s purpose. I disagree with the Majority on nearly every issue brought before this Court. I would affirm the District Court’s decision to enjoin certain provisions of the Act, but I would go further and also enjoin the prohibition of medical marijuana use by probationers and the warrantless search provisions. ¶106 It is noteworthy that the landscape of the law regarding medical and recreational use of marijuana has changed significantly since this case began. Currently, twenty-three 59 states and the District of Columbia have statutes that allow for the legal use of marijuana for medicinal purposes, and four western states have passed laws that allow for legal recreational use of the drug. Opinion, ¶ 13, n.2. I believe that many more changes are coming in this area of law based on society’s evolving understanding of marijuana, including its medical benefits. The 25-Patient Certification Limit on Physicians ¶107 The District Court found that the Board of Medical Examiners reported no problems with medical marijuana certifications throughout the pendency of this action, even though the certification-limit provision was never in effect. The court heard testimony from State officials who testified that no problems exist, and further the State lacked any rationale to justify the limit. Opinion, ¶ 36. The court also determined that the Board possesses the authority to discipline doctors who violate the standard of care, that the Board had already made changes to completely disallow certification “exclusively by telemedicine,” and thus the Board is fully capable of regulating physicians in the State. Opinion, ¶ 36. ¶108 I agree with the District Court’s conclusion that the evidence regarding the ability of the Board to self-regulate and the lack of the State’s rationale to justify a 25-patient limit demonstrates that the provision is unnecessary, and further it is arbitrary. Under rational basis review this provision must be reasonable, not arbitrary, and bear a fair and substantial relation to the object of the legislation. Powder River Cnty., ¶ 79. It is my belief that the object of medical marijuana legislation is to provide legal medicinal access 60 to marijuana. This government regulation reaches beyond a substantial relation to the object of the legislation and instead sets a number so arbitrarily low that the object is stymied. By definition, an arbitrary act is one that is made without consideration or regard for facts, circumstances, fixed rules, or procedures. Black’s Law Dictionary, supra, at 125. This limit fails to consider the fact that the Board already eliminated the telemedicine certification process, which essentially resolved the prior certification problems. This limit fails to consider the circumstance of the Board’s continued authority and ability to properly regulate and discipline doctors for violations of the standard of care in all avenues of medicine. Finally, there is no indication that the Legislature followed any procedure to determine a patient-certification number that would substantially relate to providing regulated access to medicinal marijuana. Instead, the Legislature chose an arbitrary number of 25 that is not reasonable when balanced against the purpose of the legislation. Egdorf, ¶ 19. I therefore conclude that this provision of the law fails rational basis review and I would affirm the District Court’s injunction of the 25-patient limit on physicians. Commercial Provisions ¶109 At the outset, I would decline to split the provisions as the Majority did because both types of commercial provisions, not just the remuneration provisions, serve to limit the access of medical marijuana to a distinct class of persons. Opinion, ¶ 47. The remuneration restrictions and the three-patient commercial limit both impose “‘peculiar disabilities upon [a] class of persons arbitrarily selected from a larger number of persons, 61 all of whom stand in the same relation to privileges conferred or disabilities imposed.’” Kottel, ¶ 55 (quoting Leuthold, 100 Mont. at 105, 47 P.2d at 45). The District Court determined that the effect of these provisions renders access to medical marijuana nearly impossible for people with the most debilitating conditions. I agree with the District Court that the commercial provisions create different classes of persons by imposing different burdens on those who can provide medical marijuana for themselves and those who must purchase it in the marketplace, which then fail rational basis review. I agree with the conclusion the Majority reaches in respect to the remuneration decision. Opinion, ¶¶ 53-56. However, as stated, I would choose to analyze both commercial provisions as one because I believe both restrictions implicate equal protection. ¶110 As written, the statutes create an absurd result where those with the most debilitating medical conditions will have no access to medical marijuana because they will not be able to grow it due to inability, cannot pay someone else to grow it, and will not likely be able to find someone else to do so under the advertising prohibitions. As the Majority notes, this class of persons will likely be forced into the black market to acquire marijuana, creating business for the criminal enterprise the State seeks to avoid under the Act. Opinion, ¶ 54. Here, I agree with the District Court that the statutes fail because as written “[a] statute which is directly contrary to its justification cannot be rationally related to that justification.” Because the commercial provisions fail to protect those persons with the most debilitating conditions, I would likewise enjoin these commercial provisions as they violate equal protection of the laws. 62 Advertising Ban ¶111 I disagree with the Majority’s application of the Central Hudson test. Opinion, ¶¶ 64-67. I would apply strict scrutiny because I agree with the District Court’s conclusion that § 341 of the Act “renders the ‘playing field’ for discussion of the pros and cons of medical marijuana completely uneven.” I am not convinced by the Majority’s attempt to limit the language of the Act to a plain-language analysis to establish a commercial-speech basis for allowing the provision. Opinion, ¶¶ 62-63. Instead, I find the language of the statute overbroad and vague. While the Majority reaches a narrow interpretation of the language, I believe it is just as straightforward to come to the opposite conclusion that broad restrictions on political and educational speech have occurred under this law. Article II, section 7 of the Montana Constitution states: “No law shall be passed impairing the freedom of speech or expression. Every person shall be free to speak or publish whatever he will on any subject, being responsible for all abuse of that liberty.” Because the language of § 341 creates content-based restrictions as written, it fails an examination under strict scrutiny, which is the standard that should be applied. I would affirm the District Court and enjoin § 341. Prohibition on Probationer Use ¶112 I would reverse the District Court’s determination that the prohibition on probationer use under § 50-46-307(4), MCA, is constitutional because the State has shown a rational basis for the provision. In my view, the law undermines the purpose of the Act because it clearly bars a class of persons from access to a legally-recognized 63 medicine: medical marijuana. Under the law, all sentences imposed by the district courts include a prohibition on medical marijuana use, which precludes the district court’s ability to apply a case-by-case “nexus” analysis under Ashby. As written, the effect of the prohibition is unconstitutional because the blanket ban violates equal protection of the laws, by classifying persons for different treatment, and it should be analyzed as such. I would enjoin this provision. Warrantless Searches ¶113 I would reverse the District Court and enjoin the provisions allowing warrantless searches under § 50-46-329, MCA, because these provisions provide carte blanche to State and local law enforcement. I would uphold Montana privacy rights and use this opportunity to strengthen our State’s privacy rights. The inspection procedures under the Act result in a constant threat to potential business owners that law enforcement can enter their premises and gather and develop evidence. I believe this provision will only create hostility and enhance the State’s view of medical marijuana as a criminal endeavor rather than a medicine available to those in need. Ultimately, the search provisions would be better served by providing for warrantless administrative inspections to be carried out only by a State agency with no direct involvement by local or State law enforcement. Conclusion ¶114 I agree with the Majority that the remuneration restrictions do not bear a fair and substantial relation to the object of the legislation, and furthermore the provisions violate the equal protection clause of the Montana Constitution. Opinion, ¶¶ 53-56. I disagree 64 with the Majority on all of the remaining issues in this case and believe the Majority has erred in its interpretation of the statutes. For the reasons stated above, I dissent. /S/ MICHAEL E WHEAT

February 25, 2016

badb0a50-b0ba-449f-a629-10c71c65bd23

In re Parenting of C.J.

2016 MT 93

DA 15-0542

Montana

Montana Supreme Court

DA 15-0542 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 93 IN RE THE PARENTING OF C.J.: MATTHEW F. TUBAUGH, Petitioner and Appellant, v. STEVI JACKSON, Respondent and Appellee. APPEAL FROM: District Court of the Sixth Judicial District, In and For the County of Park, Cause No. DR-13-60 Honorable Brenda Gilbert, Presiding Judge COUNSEL OF RECORD: For Appellant: Jason Armstrong, Law Office of Jason Armstrong, P.C., Bozeman, Montana For Appellee: Christopher J. Gillette, Law Office of Christopher J. Gillette, PC, Bozeman, Montana Submitted on Briefs: March 30, 2016 Decided: April 20, 2016 Filed: __________________________________________ Clerk April 20 2016 Case Number: DA 15-0542 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Matthew Tubaugh appeals the findings of fact, conclusions of law, and order of the Sixth Judicial District Court, Park County, adopting a final parenting plan that provides Stevi Jackson with primary custody of Matthew’s and Stevi’s son, C.J., and allows Stevi to relocate to Vermont with C.J. Matthew alleges several errors in the District Court’s parenting determination. We affirm. PROCEDURAL AND FACTUAL BACKGROUND ¶2 Matthew and Stevi first met in or about 2004 and, although they had an “on and off” relationship for several years, the parties never lived together. C.J. was born in August 2012. ¶3 At the time of the District Court proceedings, Stevi resided in Belgrade, Montana, with C.J., her husband Tom, and the couple’s minor child. She has a degree in early childhood education and had been employed by Head Start in Bozeman since 2007. Stevi began her Head Start employment as an assistant teacher and eventually progressed to serve as both the site supervisor and the technology manager. In July 2015, she was offered a job as the Children’s Service Manager for a Head Start program in Newport, Vermont. ¶4 Matthew resides in Livingston with his domestic partner, who was pregnant with his child at the time of the final parenting plan hearing. Matthew has a daughter, P.J., from a previous relationship. He has part-time custody of P.J. Matthew served in the armed forces, worked as a police officer, and at the time of the hearing was working on a ranch. 3 ¶5 Although the parties dispute whether Matthew was given an opportunity to spend time with C.J. during the first fifteen months of his life, it is undisputed that Matthew saw C.J. only once during that time period. Stevi testified that Matthew did not provide her with any financial assistance during that time; Matthew did not offer any evidence to the contrary. In July 2014, the District Court ordered Matthew to pay $156 per month in child support. A Child Support Enforcement Division debt computation worksheet admitted at the hearing showed that Matthew was current on child support payments as of June 2015. ¶6 Prior to C.J.’s birth, Matthew sent Stevi an email stating that “a paternity test will be required” because he questioned whether or not he was C.J.’s father. After C.J.’s birth, Matthew continued to contest paternity before eventually filing a paternity action.1 Approximately six months after the court ordered paternity testing, Matthew took a paternity test. It confirmed that he was C.J.’s father. On June 14, 2013, after receiving the paternity test results, Matthew filed a petition for establishment of an interim parenting plan. While Matthew’s petition was pending, he and Stevi arranged for supervised visits between himself and C.J at Hearts & Homes in Bozeman. Stevi stopped the arrangement after three visits because she felt C.J. was demonstrating “very distressed behavior” during the visits. ¶7 The District Court held a hearing on Matthew’s petition for an interim parenting plan on February 3, 2014. Following the hearing, the parties attempted to reconcile their relationship and arranged parenting time on their own. The parties’ attempt at 1 The District Court took judicial notice of the paternity action. 4 reconciliation eventually failed and, in May 2014, Matthew filed a petition for an “emergency de facto” parenting plan. ¶8 In July 2014, the District Court issued an order that allowed Matthew two visits per week with C.J. and required both parties to attend counseling sessions. The court also appointed counselor Chantelle Plauche to assist in reunifying Matthew and C.J. The order required the parties to follow Plauche’s “recommendations for improving the relationship and parental contact between Matthew and [C.J.].” ¶9 Plauche worked with the parties for a year and testified that Matthew’s relationship with C.J. improved. Due to the improving relationship, Plauche recommended a number of times that Matthew incrementally increase his parenting time with C.J., and Matthew’s parenting time did increase. Plauche eventually recommended that Matthew be allowed to have C.J. for three days and two nights in a row per week. ¶10 On July 14, 2015, Stevi filed a proposed final parenting plan and a notice of intent to relocate. Her proposed plan called for C.J. to reside with her in Vermont during the school year and with Matthew in Livingston during the summer. Matthew also filed a proposed parenting plan in which C.J. would live with him during the school year and with Stevi in Vermont during the summer. ¶11 On August 18, 2015, the District Court held a hearing on Stevi’s notice of intent to relocate and the parties’ respective parenting plans. Stevi, Matthew, and Plauche testified at the hearing. Matthew also called Katherine McLaughlin as an expert witness to testify generally regarding childhood development. On August 27, 2015, the District Court issued its findings of fact, conclusions of law, and order regarding the final parenting 5 plan. The court’s order largely adopted Stevi’s proposed parenting plan. Matthew appeals. STANDARD OF REVIEW ¶12 We review a district court’s findings of fact supporting a parenting plan to determine whether they are clearly erroneous. In re the Parenting of M.C., 2015 MT 57, ¶ 10, 378 Mont. 305, 343 P.3d 569. A finding of fact 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. M.C., ¶ 10. We review a district court’s conclusions of law to determine if they are correct. M.C., ¶ 10. ¶13 A district court has “broad discretion when considering the parenting of a child, and we must presume that the court carefully considered the evidence and made the correct decision.” In re the Marriage of Woerner, 2014 MT 134, ¶ 12, 375 Mont. 153, 325 P.3d 1244 (quoting In re Marriage of Crowley, 2014 MT 42, ¶ 44, 374 Mont. 48, 318 P.3d 1031). Accordingly, absent clearly erroneous findings, we will not disturb a district court’s decision regarding parenting plans unless there is a clear abuse of discretion. Woerner, ¶ 12. A district court abuses its discretion if it acts arbitrarily, without employment of conscientious judgment, or exceeds the bounds of reason resulting in substantial injustice. Woerner, ¶ 12. DISCUSSION ¶14 While district courts “have broad discretion when considering the parenting of a child,” Woerner, ¶ 12, a district court must “determine the parenting plan in accordance 6 with the best interest of the child,” § 40-4-212(1), MCA; Woerner, ¶ 13. District courts are directed to consider “all relevant parenting factors” in making these determinations. Section 40-4-212(1), MCA. The statute’s non-exhaustive list of factors includes: (a) the wishes of the child’s parent or parents; (b) the wishes of the child; (c) the interaction and interrelationship of the child with the child’s parent or parents and siblings and with any other person who significantly affects the child’s best interest; (d) the child’s adjustment to home, school, and community; (e) the mental and physical health of all individuals involved; (f) physical abuse or threat of physical abuse by one parent against the other parent or the child; (g) chemical dependency . . . or chemical abuse on the part of either parent; (h) continuity and stability of care; (i) developmental needs of the child; (j) whether a parent has knowingly failed to pay birth-related costs that the parent is able to pay, which is considered to be not in the child’s best interests; (k) whether a parent has knowingly failed to financially support a child that the parent is able to support, which is considered to be not in the child’s best interests; (l) whether the child has frequent and continuing contact with both parents, which is considered to be in the child’s best interests unless the court determines, after a hearing, that contact with a parent would be detrimental to the child’s best interests. . . . ; (m) adverse effects on the child resulting from continuous and vexatious parenting plan amendment actions. 7 Section 40-4-212(1), MCA. Although “[w]e have encouraged district courts to make specific findings on each relevant statutory factor,” we require only “that the district court make findings sufficient for this court to determine whether the court considered the statutory facts and made its ruling on the basis of the child’s best interests.” Woerner, ¶ 15. ¶15 The District Court found that C.J. is attached primarily to Stevi because she “has parented him much more of the time, has arranged for his medical and dental care, has arranged for his play dates and other social interaction, and has provided for his day to day needs.” The court found further that Stevi did not prevent Matthew from spending time with C.J. during the first fifteen months of C.J.’s life. The court noted that Matthew “did not present any evidence that he was actually requesting and pursuing parenting time with [C.J.] in any significant fashion” during that time period. Although the court determined that C.J. “has a secure bond with [Matthew],” it decided that “Stevi should be entitled to relocate to Newport, Vermont[,] where she has the opportunity to pursue her career in a setting that has more room for advancement [and] more financial opportunity.” The court found that the final parenting plan “will deepen” C.J.’s bond with Matthew by virtue of its longer periods of uninterrupted parenting time, “involve far fewer parenting exchanges and less exposure to conflict for [C.J.] than what he is experiencing under the current schedule,” and “involve opportunities for frequent telephone and Skyping or similar communications.” ¶16 The court next addressed the competing constitutional rights implicated by the proposed parenting plans—Stevi’s right to travel and Matthew’s right to parent—before 8 analyzing whether it would be in the best interest of C.J. to move to Vermont with Stevi or to remain in Livingston with Matthew. The court thoroughly considered and made specific findings on each of the best interest factors set forth in § 40-4-212, MCA. Based upon its consideration of the factors, the court concluded that it would be in C.J.’s best interest to adopt a final parenting plan that allowed Stevi to maintain primary custody of C.J. and relocate to Vermont. ¶17 Matthew first asserts that the District Court’s finding that Stevi did not interfere with his relationship with C.J. is clearly erroneous. Matthew alleges that the evidence demonstrates that Stevi “willfully and consistently interfered with [Matthew’s] parenting time.” Matthew contends that the “reason that C.J. is primarily attached to [Stevi] is because she has consistently thwarted and interfered with [Matthew’s] ability to exercise parenting time of any kind[,] not just meaningful parenting time.” Consequently, Matthew asserts, the District Court’s finding adversely impacted its consideration of several of the best interest factors under § 40-4-212, MCA. ¶18 The District Court’s finding provides: 33. Stevi is the parent to whom [C.J.] is primarily attached. She parented him without contact from [Matthew] during the first fifteen months of [C.J.’s] life. The lack of contact between [C.J.] and [Matthew] during that time frame was not due to interference or blocking the contact on Stevi’s part. The District Court relied on evidence showing that for the first eight months of C.J.’s life, Matthew contested whether he was C.J.’s father. Although Matthew was ordered to take a paternity test on October 31, 2012, he did not take the test until April 29, 2013. Moreover, Matthew admitted that Stevi offered to allow him to visit C.J. so long as she 9 was present, but testified that he refused the opportunity because he did not want Stevi present during his visits with C.J. The parties’ testimony substantiates the District Court’s view that although Stevi has been C.J.’s primary parent, she has made efforts to have Matthew involved in C.J.’s life. ¶19 It is the District Court’s function to determine “the credibility of the witnesses and the weight assigned to their respective testimony.” In re the Parenting of N.S., 2011 MT 98, ¶ 25, 360 Mont. 288, 253 P.3d 863. “Whether we would have reached the same decision as the trial court is not the standard under which we review a court’s order for an abuse of discretion.” Woerner, ¶ 29 (citing In re Marriage of Lockhead, 2013 MT 368, ¶ 12, 373 Mont. 120, 314 P.3d 915). Rather, “[w]e review whether substantial evidence in the record supports the court’s findings regardless of whether the evidence could support a different outcome as well.” Woerner, ¶ 29 (citing Brimstone Mining, Inc. v. Glaus, 2003 MT 236, ¶ 20, 317 Mont. 236, 77 P.3d 175). Based on our review of the record, we conclude that the District Court did not misapprehend the effect of the evidence or clearly make a mistake in finding that Stevi did not interfere with Matthew’s relationship with C.J. The District Court’s finding of fact is supported by substantial evidence and is not clearly erroneous. Accordingly, we disagree with Matthew’s contention that the District Court’s finding led to an incorrect application of the best interest factors under § 40-4-212, MCA. ¶20 Next, Matthew alleges that the District Court misstated the law when it concluded that Matthew “bears a ‘heavy burden’ of establishing that the proposed travel restriction is consistent with the best interests” of C.J. Matthew contends that the burden of proof 10 for establishing a travel restriction is simply the best interest of the child standard. Therefore, Matthew claims, the District Court incorrectly required Matthew “to show that not moving was in C.J.’s best interest.” Matthew claims again that the District Court’s finding that Stevi did not interfere with his relationship with C.J. is not supported by substantial evidence. Matthew cites our holding in M.C. that “a parent’s decision to move may be considered against the best interests of a child if the parent’s decision exemplifies a willful and consistent attempt to frustrate or deny contact between the child and his or her other parent.” M.C., ¶ 20 (citation and internal quotations omitted). Finally, Matthew asserts that the court incorrectly elevated Stevi’s right to travel over C.J.’s best interests. ¶21 The right to travel “has long been recognized as a fundamental constitutional right.” M.C., ¶ 12 (citing Shapiro v. Thompson, 394 U.S. 618, 629-31, 89 S. Ct. 1322, 1328-29 (1969), overruled on other grounds by Edelman v. Jordan, 415 U.S. 651, 671, 94 S. Ct. 1347, 1360 (1974)). Accordingly, the right to travel “may be restricted only by a compelling state interest.” M.C., ¶ 12 (citing Dunn v. Blumstein, 405 U.S. 330, 339, 92 S. Ct. 995, 1001 (1972); In re Marriage of Cole, 224 Mont. 207, 213, 729 P.2d 1276, 1280 (1986)). Advancing the best interest of a child is a compelling state interest. M.C., ¶ 13 (citing Cole, 224 Mont. at 213, 729 P.2d at 1280). Therefore, “in cases implicating a parent’s exercise of his or her fundamental right to travel, ‘it is the court’s task to attempt to reconcile the interests of both parents with the best interests of the child.’” M.C., ¶ 13 (quoting Cole, 224 Mont. at 213, 729 P.2d at 1280). In such cases, we have cautioned: 11 A restriction on a parent’s fundamental right to travel must be imposed cautiously and only when there is sufficient proof that the restriction is in the best interest of the child. The parent seeking the restriction must provide case-specific proof that the restriction is in the child’s best interest: that is, legitimate, case-specific reasons and evidence pertaining to the particular child, rather than general discussion about the effects of relocation on children of separation or divorce. M.C., ¶ 14 (internal citations and quotations omitted). ¶22 Our precedent makes clear that Matthew—as the parent seeking to restrict Stevi’s fundamental right to travel—bears the burden of proving that the restriction is in C.J.’s best interest. Here, the District Court recognized correctly that Matthew bore such a burden. The court recognized further its responsibility to consider C.J.’s best interests and concluded, “Ultimately, in balancing the respective and competing constitutional rights of the parties and in determining the terms and parameters of any parenting plan, the Court is bound to consider the best interest standards of the child as contemplated in § 40-4-212, MCA.” The court then proceeded to consider, and make specific findings regarding, each of the best interest factors set forth in § 40-4-212, MCA. We conclude that the District Court correctly held Matthew to the burden of showing that the travel restriction was not in C.J.’s best interest, and that it correctly applied the best interest of the child standard. ¶23 As discussed above, there is substantial evidence supporting the District Court’s finding that Stevi did not interfere with Matthew’s relationship with C.J. Aside from his interference argument, Matthew has offered no other “legitimate, case-specific reasons and evidence” supporting his contention that restricting Stevi’s right to travel is in the 12 best interest of C.J. M.C., ¶ 14. Accordingly, we conclude that the District Court acted within its broad discretion in allowing C.J. to relocate to Vermont with Stevi. ¶24 For the foregoing reasons, we conclude that the District Court’s findings of fact were not clearly erroneous and its conclusions of law were correct. We therefore will not disturb the District Court’s decision regarding C.J.’s parenting plan. CONCLUSION ¶25 The District Court’s order adopting the final parenting plan is affirmed. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA

April 20, 2016

b749d6da-c77a-41a7-9977-6ddb4f7d1281

Wicklund v. Sundheim

2016 MT 62

DA 15-0263

Montana

Montana Supreme Court

DA 15-0263 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 62 EARLE D. WICKLUND, CLAUDE L. TEISINGER, and EDWARD J. STEVENS as Trustees of the Teisinger Stevens Wicklund Royalty Trust, Plaintiffs and Appellants, v. G’NELL SUNDHEIM, JERRY SUNDHEIM, JIMMY SUNDHEIM, SHARON SUNDHEIM, JUDEAN SUNDHEIM, PATRICIA SUNDHEIM, ORION SUNDHEIM, ELMA SUNDHEIM, ROBERT E. SUNDHEIM, DELORES FRISON, AUDREY SUNDHEIM ESTATE, JEFF SUNDHEIM as Personal Representative of Audrey Sundheim Estate, NANCY MARIE PAWLOWSKI, LAURA ANN PAWLOWSKI, SCOTT E. SUNDHEIM, JEFFRY J. SUNDHEIM, RHONDA CAYKO and ERIC L. SUNDHEIM, individually, and all other heirs of Ole Sundheim and Iver Sundheim, Defendants and Appellees. APPEAL FROM: District Court of the Seventh Judicial District, In and For the County of Richland, Cause No. DV 13-54 Honorable David Cybulski, Presiding Judge COUNSEL OF RECORD: For Appellants: Donald L. Harris, Harris & Associates, PLLC, Billings, Montana Michael E. Zimmerman, Attorney at Law, Sheridan, Wyoming For Appellees: Albert R. Batterman, Batterman Law Offices, P.C., Baker, Montana March 9 2016 Case Number: DA 15-0263 2 Submitted on Briefs: December 16, 2015 Decided: March 9, 2016 Filed: __________________________________________ Clerk 3 Justice Beth Baker delivered the Opinion of the Court. ¶1 Earle D. Wicklund, Claude L. Teisinger, and Edward J. Stevens1 (collectively Teisingers) appeal the findings of fact, conclusions of law, and order of the Seventh Judicial District Court, Richland County, denying their claim for a 3/5ths royalty interest in oil, gas, and minerals located on several sections of land in Richland County and quieting title to the royalty interest in Appellees’2 favor. We address the following issues on appeal: 1. Whether the District Court improperly admitted testimony from an English professor interpreting the language of the warranty deed’s royalty interest reservation. 2. Whether the District Court erred by resolving the ambiguity in the 1953 Warranty Deed in favor of Sundheims. 3. Whether the District Court erroneously applied the doctrine of laches to deny Teisingers’ claim to the 3/5ths royalty interest. ¶2 We reverse and remand with instructions consistent with this opinion. PROCEDURAL AND FACTUAL BACKROUND ¶3 On March 26, 1953, Chester L. Teisinger and Jennie M. Teisinger conveyed several sections of real property in Richland County (the Property) to Ole Sundheim and 1 Wicklund, Teisinger, and Stevens appeal as Trustees of the Teisinger Stevens Wicklund Royalty Trust. 2 Appellees are G’Nell Sundheim, Jerry Sundheim, Jimmy Sundheim, Sharon Sundheim, Judean Sundheim, Patricia Sundheim, Orion Sundheim, Elma Sundheim, Robert E. Sundheim, Delores Frison, Audrey Sundheim Estate, Jeff Sundheim as Personal Representative of the Audrey Sundheim Estate, Nancy Marie Pawlowski, Laura Ann Pawlowski, Scott E. Sundheim, Jeffry J. Sundheim, Rhonda Cayko, and Eric L. Sundheim, individually, and all other heirs of Ole Sundheim and Iver Sundheim. We refer to the Appellees collectively as Sundheims. 4 Iver Sundheim by a warranty deed (1953 Warranty Deed), which included the following reservation language: First parties reserve unto themselves three-fifths (3/5ths) of Land owners [sic] oil, gas and mineral royalties and three-fifths (3/5ths) of any and all delay rentals on present and existing oil and gas leases now of record against the lands herein described; the conveyance herein is made subject to such oil and gas leases and any and all assignments now of record. Prior to the sale, Teisingers’ predecessors granted an oil and gas lease to R.L. Hill (Hill Lease) on certain sections of the Property. The Hill Lease was released in 1958. Teisingers and Sundheims dispute whether the reservation of royalties in the 1953 Warranty Deed applies to all royalty interests in the deeded property or only to delay rentals on oil and gas leases existing at the time of conveyance. The parties did not memorialize the terms of their purchase and sale agreement except through the 1953 Warranty Deed, and there is no evidence as to which party drafted the deed. Ole Sundheim—the longest-living party to the 1953 Warranty Deed—died in 1998. ¶4 From 1953 until 2011 there were few additional leases for drilling or production on the Property. In 2011 and 2012, True Oil LLC, Brigham Oil & Gas, LLP, and Whiting Oil and Gas Corporation began exploration and drilling. In August 2012, Whiting Oil and Gas obtained a First Supplemental Drilling and Division Order Title Opinion from Sadler Law Firm, LLP. The examining attorney noted that “the reservation in the [1953 Warranty Deed] is arguably ambiguous,” and recommended that Whiting Oil and Gas obtain either a stipulation from the parties and other interest owners that 5 Teisingers own a 3/5ths landowners royalty interest or a judicial determination as to the meaning and effect of the reservation. ¶5 In December 2012, based on the Sadler attorney’s advice, Whiting Oil and Gas notified Teisingers that they would not receive payments for the 3/5ths royalty interest until they obtained a quiet title judgment or stipulation. Sundheims refused to stipulate to Teisingers’ 3/5ths royalty interest, and Teisingers filed this quiet title action on May 17, 2013, to confirm their royalty interest. ¶6 The District Court denied cross-motions for summary judgment and conducted a two-day bench trial. At the conclusion of the trial, the District Court entered findings of fact, conclusions of law, and an order denying Teisingers’ claim for a 3/5ths royalty interest. Teisingers appeal. STANDARDS OF REVIEW ¶7 We review for clear error the findings of fact of a district court sitting without a jury. Moerman v. Prairie Rose Res., Inc., 2013 MT 241, ¶ 17, 371 Mont. 338, 308 P.3d 75. Findings are clearly erroneous if they are not supported by substantial evidence, if the court misapprehended the effect of the evidence, or if we are convinced by our review of the record that the district court made a mistake. In re Estate of Quirin, 2015 MT 132, ¶ 10, 379 Mont. 173, 348 P.3d 658. We review a district court’s conclusions of law to determine whether the court’s interpretation of the law is correct. Moerman, ¶ 17. ¶8 We review a district court’s ruling on the admissibility of expert testimony for abuse of discretion. Hastie v. Alpine Orthopedics & Sports Med., 2015 MT 346, ¶ 14, 6 382 Mont. 21, 363 P.3d 435. Although a trial court’s evidentiary rulings are discretionary, the court is “bound by the Rules of Evidence,” and we review de novo its interpretation and construction of a statute or rule. Kluver v. PPL Mont., LLC, 2012 MT 321, ¶ 19, 368 Mont. 101, 293 P.3d 817. ¶9 Laches is a doctrine of equity that may apply when a person is negligent in asserting a right. Cole v. State ex rel. Brown, 2002 MT 32, ¶ 24, 308 Mont. 265, 42 P.3d 760. In reviewing a district court’s exercise of its equitable power, we review all questions of fact arising upon evidence presented in the record to determine if the court’s findings are clearly erroneous. LeMond v. Yellowstone Dev., LLC, 2014 MT 181A, ¶ 22, 375 Mont. 402, 334 P.3d 366. We determine if the court’s interpretation of the law is correct. LeMond, ¶ 22. DISCUSSION ¶10 1. Whether the District Court improperly admitted testimony from an English professor interpreting the language of the warranty deed’s royalty interest reservation. ¶11 Sundheims presented expert testimony from Dr. Nick Plunkey, an English professor from Rocky Mountain College, who analyzed the language of the deed. The District Court allowed Dr. Plunkey to give an expert opinion about his interpretation of the meaning of the reservation language in the 1953 Warranty Deed. Applying principles of grammar and sentence construction, Dr. Plunkey opined that the reservation language was ambiguous. Dr. Plunkey admitted that no rule of grammar mandates a particular interpretation of the reservation language. Nonetheless, Dr. Plunkey employed rules of sentence construction to conclude that the context and construction of the royalty 7 reservation support interpretation in favor of Sundheims. Dr. Plunkey opined that the reservation should be resolved by applying the prepositional phrase “on present and existing oil and gas leases” to modify both royalties and delay rentals. ¶12 Pre-trial, Teisingers objected to Dr. Plunkey’s testimony on the ground that his testimony was irrelevant and could not help the court determine the meaning that the parties intended for the reservation. At trial, Teisingers objected three more times on the same ground. The District Court overruled all of Teisingers’ objections and adopted Dr. Plunkey’s opinion. ¶13 On appeal, Teisingers argue that the court was required to apply statutory rules of construction to resolve the ambiguity and thus erred in admitting and adopting Dr. Plunkey’s opinion about how the ambiguity should be resolved. Teisingers assert that Dr. Plunkey’s grammatical expertise was appropriate only to confirm that the reservation was subject to two different interpretations. Teisingers argue that Dr. Plunkey’s opinion was based on speculation with no basis in fact and on the mistaken assumption that both royalties and delay rentals are dependent upon existing oil and gas leases. ¶14 Sundheims contend that Dr. Plunkey was not required to have expertise in the oil and gas industry in order for him to interpret and form an opinion regarding the language of the deed. According to Sundheims, the District Court did not err in adopting Dr. Plunkey’s interpretation because it was “reasonable” and because it “was the only expert interpretation of the contract language offered at trial.” 8 ¶15 Rules 702, 704, and 705 of the Montana Rules of Evidence govern the admissibility of expert testimony. M. R. Evid. 702 provides: “If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education may testify thereto in the form of an opinion or otherwise.” M. R. Evid. 704 allows a qualified expert to testify as to an ultimate issue of fact. Under M. R. Evid. 705, however, expert opinion that states a legal conclusion or applies the law to the facts is inadmissible. Cartwright v. Scheels All Sports, Inc., 2013 MT 158, ¶ 43, 370 Mont. 369, 310 P.3d 1080 (citing Perdue v. Gagnon Farms, Inc., 2003 MT 47, ¶ 28, 314 Mont. 303, 65 P.3d 570). 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. Perdue, ¶ 28. ¶16 When interpreting the language of a deed, we apply rules of contract interpretation. Whary v. Plum Creek L.P., 2014 MT 71, ¶ 10, 374 Mont. 266, 320 P.3d 973. Construction and interpretation of a contract present questions of law for the court to decide. Whary, ¶ 10 (citing Mattson v. Mont. Power Co., 2009 MT 286, ¶ 18, 352 Mont. 212, 215 P.3d 675). When a contract is ambiguous, the court may consider extrinsic evidence of the parties’ intent. Mary J. Baker Revocable Trust v. Cenex Harvest States, Coops., Inc., 2007 MT 159, ¶ 55, 338 Mont. 41, 164 P.3d 851. In the absence of relevant extrinsic evidence, any ambiguity in a written contract is resolved by the court as 9 a matter of law. 11 Richard A. Lord, Williston on Contracts § 30:7, 124-27 (4th ed. 2012). ¶17 While Dr. Plunkey couched his opinion in terms of the parties’ intent, he attempted to divine that intent by interpreting the deed’s terms based on technical principles of sentence construction. Dr. Plunkey’s testimony involved construing and interpreting the meaning of the royalty reservation’s language. Such interpretation is a legal conclusion for the court. Whary, ¶ 10. The District Court seemed to have acknowledged as much by adopting Dr. Plunkey’s analysis as a conclusion of law. Under M. R. Evid. 705, Dr. Plunkey’s testimony was inadmissible. The District Court erred by allowing his opinion on the meaning of the deed’s language. ¶18 2. Whether the District Court erred by resolving the ambiguity in the 1953 Warranty Deed in favor of Sundheims. ¶19 Section 70-1-513, MCA, provides that “[g]rants are to be interpreted in like manner with contracts in general, except so far as is otherwise provided in this part.” Section 28-3-301, MCA, provides that “[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, so far as the same is ascertainable and lawful.” “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. The language of a contract governs its interpretation if the language is clear and unambiguous. Section 28-3-401, MCA. ¶20 The District Court concluded that the royalty reservation in the 1953 Warranty Deed was ambiguous. An ambiguity exists when the language of the contract is 10 reasonably subject to two different interpretations. Ophus v. Fitz, 2000 MT 251, ¶ 23, 301 Mont. 447, 11 P.3d 1192. “An ambiguity’s existence must be determined on an objective basis.” Richards v. JTL Group, Inc., 2009 MT 173, ¶ 26, 350 Mont. 516, 212 P.3d 264 (citation omitted). What the “parties reserve[d] unto themselves” in the 1953 Warranty Deed reasonably could be interpreted in two different ways: 1. three-fifths (3/5ths) of landowners’ oil, gas and mineral royalties; and 2. three-fifths (3/5ths) of any and all delay rentals on present and existing oil and gas leases now of record against the lands herein described. or 1. three-fifths (3/5ths) of landowners’ oil, gas and mineral royalties on present and existing oil and gas leases now of record against the lands herein described; and 2. three-fifths (3/5ths) of any and all delay rentals on present and existing oil and gas leases now of record against the lands herein described. Objectively, and without demarcating punctuation, the “existing leases” language could apply either to just the delay rental reservation or to both the delay rental and the 3/5ths royalty reservation. We agree with the District Court that the deed is ambigious. ¶21 Once it is determined that an ambiguity in a contract exists, the ambiguity is resolved by applying rules of construction, Morning Star Enters. v. R.H. Grover, Inc., 247 Mont. 105, 111, 805 P.2d 553, 557 (1991), and by considering extrinsic evidence of the parties’ intent, Ophus, ¶ 29. ¶22 The District Court found that extrinsic evidence relating to the parties’ actions after 1953 was “of minimal relevance and not illustrative of the original intent of [Teisingers’ predecessors or Sundheims’ predecessors].” Relying on an oil and gas treatise, The Law of Oil and Gas Leases, 2nd Ed., Vol. 1, Ch. 6, Sec. 6.11, the court 11 concluded that “‘the language of the deed is the language of the grantor’” and that the royalty reservation in the 1953 Warranty Deed should be “‘construed in the light most favorable to the grantee.’” Because Sundheims’ predecessors were grantees under the 1953 Warranty Deed, the court resolved the ambiguity in favor of Sundheims. ¶23 Teisingers argue that the District Court erred in relying on the oil and gas treatise. Because the District Court concluded that the parties’ actions after 1953 did not serve as sufficient extrinsic evidence to clarify the parties’ original intent, Teisingers argue that the court “had no evidentiary basis upon which to resolve the ambiguous royalty reservation in favor of the Sundheims.” Therefore, they contend, the court should have resolved the ambiguity in favor of Teisingers in accordance with the rule of construction set forth in § 70-1-516, MCA. ¶24 Sundheims argue that we should not consider Teisingers’ argument for application of § 70-1-516, MCA, because Teisingers never presented argument regarding rules of construction at trial. In any case, Sundheims assert that Teisingers misinterpret § 70-1-516, MCA. Sundheims claim that the § 70-1-516, MCA, “does not require that ambiguity in a reservation be presumptively interpreted in a grantor’s favor,” but “requires only that a grantor receive that to which she is entitled in a reservation.” Sundheims argue that because the statute does not reference ambiguities, “[t]he Court should not insert into [the] statute that which does not exist.” Sundheims further argue that because deeds are interpreted in the same manner as other contracts, the court was required to resolve the ambiguity “most strongly against the party who caused the 12 ambiguity to exist . . . the promisor is presumed to be that party.” Based on § 28-3-206, MCA, Sundheims assert that the language of the 1953 Warranty Deed is “attributable” to Teisingers’ predecessors, who “should not be rewarded for making an ambiguous promise.” ¶25 Section 28-3-206, MCA, sets forth a general rule of construction for resolving uncertainties in contract language: “In cases of uncertainty . . . the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist. The promisor is presumed to be that party.” Under § 70-1-513, MCA, deeds are interpreted in the same manner as contracts “except so far as is otherwise provided in this part.” (Emphasis added.) Section 70-1-516, MCA, provides a specific rule of construction for reservations in grants of real property: “[A] reservation in any grant and every grant by a public officer or body, as such, to a private party is to be interpreted in favor of the grantor.” ¶26 We consider the applicability of § 70-1-516, MCA, notwithstanding Sundheims’ argument. Generally, we do not address an issue raised for the first time on appeal or a party’s change in legal theory. State v. Montgomery, 2010 MT 193, ¶ 11, 357 Mont. 348, 239 P.3d 929 (citations omitted). However, “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.” Montgomery, ¶ 12. See, e.g., Becker v. Rosebud Operating Servs., 2008 MT 285, ¶ 18, 345 Mont. 368, 191 P.3d 435; Whitehorn v. Whitehorn Farms, Inc., 2008 MT 361, ¶ 23, 346 Mont. 394, 195 P.3d 836. 13 In the District Court, Teisingers argued that the court should resolve the deed’s ambiguity in their favor. While Teisingers did not cite § 70-1-516, MCA, the statute is additional authority that supports their legal theory. Teisingers’ argument that the court applied inapposite authority is appropriate for consideration on appeal. ¶27 We agree with Teisingers that § 70-1-516, MCA, applies in this case. Teisingers’ predecessors—as grantors—granted the Property to Sundheims’ predecessors—as grantees—subject to a reservation. The District Court determined that the language of the reservation was ambiguous. When the court rejected the extrinsic evidence and looked to rules of construction instead, it overlooked a governing statutory rule of construction. ¶28 Sundheims’ contention that § 28-3-206, MCA, should be applied is unpersuasive. Section 70-1-516, MCA, plainly provides otherwise. Section 70-1-513, MCA. This section has been part of the Montana Code since 1895. Section 1473, Civ. C. 1895. See Henningsen v. Stromberg, 124 Mont. 185, 192, 221 P.2d 438, 442 (1950) (quoting § 6852, RCM (1935)) (“A grant is to be interpreted in favor of the grantee, except that a reservation in any grant, and every grant by a public officer or body, as such, to a private party, is to be interpreted in favor of the grantor.”); McReynolds v. McReynolds, 147 Mont. 476, 479, 414 P.2d 531, 533 (1966) (citing § 67-1518, RCM (1947)) (“Unless the grant is by a public officer or contains a reservation it is to be interpreted in favor of the grantee.”). We have recognized consistently that the rule of construction for reservations in a grant is governed by this statute, whether the grantor is a public entity or a private 14 individual. Missoula v. Mix, 123 Mont. 365, 372, 214 P.2d 212, 215 (1950) (concluding that “[b]y statutory rule the language of a reservation in a grant is to be interpreted in favor of the grantor, which is a different rule from that which existed at common law and under many other state statutes”); Van Hook v. Jennings, 1999 MT 198, ¶ 12, 295 Mont. 409, 983 P.2d 995 (“Ambiguities in a reservation of rights in any grant of property are to be interpreted in favor of the grantor.”); Ferriter v. Bartmess, 281 Mont. 100, 103, 931 P.2d 709, 711 (1997) (“While a grant of property is to be interpreted in favor of the grantee, any reservation is to be interpreted in favor of the grantor.”); Macpherson v. Smoyer, 191 Mont. 53, 60, 622 P.2d 188, 192 (1980) (“Section 70-1-516, MCA, provides that a reservation out of the grant of properties is to be interpreted in favor of the grantor.”). Therefore, the District Court should have interpreted the language of the reservation in favor of Teisingers pursuant to § 70-1-516, MCA. ¶29 We conclude further that the District Court erred by disregarding extrinsic evidence in construing the 1953 Warranty Deed. Such evidence is appropriate in ascertaining the parties’ intent when a contract is ambiguous. Section 28-3-301, MCA. As described in the Restatement (Second) of Contracts § 202(5) (1981), “[w]herever reasonable, the manifestations of intention of the parties to a promise or agreement are interpreted as consistent with each other and with any relevant course of performance, course of dealing, or usage of trade.” Our case law is consistent with this principle. Ophus, ¶ 29 (citations omitted) (“The practical interpretation of a contract, which the 15 parties placed upon by it their course of conduct, is entitled to great, if not controlling influence in ascertaining what they understood by its terms.”). ¶30 Following the release of the Hill Lease in 1958, the next recorded oil and gas activity on the Property occurred when Bertha Sundheim granted an oil and gas lease on July 30, 1973. Ole and Alvina L. Sundheim granted a similar lease on the same date. Both leases were extended to Clinton Oil Company in 1975. ¶31 In 1975, Teisingers’ predecessors signed and recorded a Stipulation and Disclaimer stating that they “disclaim any interest in minerals in the [Property], other than the landowner’s royalty reserved in [the] conveyance.” Shortly before the Stipulation and Disclaimer was recorded, Teisingers’ predecessors, Sundheims’ predecessors, and other interest owners signed a Communitization Agreement. The Agreement provided that the signing parties were those who owned “royalty, overriding royalty, working interest, or operating rights under the oil and gas leases and lands subject to this agreement.” The purpose of the Agreement was for the parties “to communitize and pool their respective mineral interests in [certain portions of the Property] for the purpose of developing and producing communitized substances . . . .” The Agreement was recorded on July 9, 1975, in Richland County. There is no evidence of production occurring under the 1973-1975 leases. ¶32 In 1976, Bertha Sundheim leased oil and gas interests on a different portion of the Property. In 1981, a producing well named the Four-Mile Creek 1-17 Well was developed on that portion. During the first two months of production, Sundheims’ 16 predecessors received all royalty payments from the well. Thereafter, Murphy Oil Corporation addressed Oil Division Orders regarding the Four-Mile Creek 1-17 Well to three of Teisingers’ predecessors—Kendall Teisinger, Arlene E. Stevens, and Dorcas L. Wicklund. Teisingers’ predecessors executed the Orders and returned them to Murphy Oil Corporation. ¶33 The Oil Division Orders credited each of the three Teisinger predecessors with 1/5th of 8/8ths of the royalty proceeds for a total of 3/5ths of 8/8ths of the royalty proceeds. Murphy Oil Corporation issued royalty payments to Teisingers’ predecessors based on that fractional interest. Teisingers produced evidence at trial that Arlene E. Stevens received a total of $21,980.57 in seventeen separate royalty interest payments based on a 3/5ths interest from August 1982 until February 1985. Shortly thereafter, production stopped on the Four-Mile Creek 1-17 Well. Sundheims’ predecessors received royalty payments based on a 2/5ths interest during the same time period. Sundheims’ predecessors did not object to their fraction of the royalty interest after Murphy Oil changed the payment allocation. ¶34 Following abandonment of the Four-Mile Creek 1-17 Well, no oil or natural gas operator explored, by drilling, any lands on the Property until 2011 when preliminary drilling work began on several wells, giving rise to the instant litigation. ¶35 The District Court found this evidence of little value, concluding that Sundheims did not have actual notice of the Stipulation and Disclaimer and that the Teisinger family was not listed in the Communitization Agreement as the owner of any specific, particular 17 interest. In regard to the 1980s royalty payments, the court found that there was no evidence showing that Sundheims’ predecessors were notified or aware of payments being received by Teisingers’ predecessors, and concluded that Teisingers’ assertions concerning what Sundheims’ predecessors “knew or should have known from the contents of a Division Order is pure speculation.” ¶36 We conclude that the District Court clearly erred in its findings regarding extrinsic evidence of the parties’ intent. In signing the Communitization Agreement, Sundheims’ predecessors voluntarily acknowledged Teisingers’ mineral interest in the Property nearly two decades after the Hill Lease terminated in 1958. The Communitization Agreement is relevant to rebut Sundheims’ argument that their predecessors believed that Teisingers’ royalty interest expired with the Hill Lease in 1958. Subsequent to that Agreement, Teisigners’ predecessors received royalty payments based on a 3/5ths fractional interest and Sundheims’ predecessors received royalty payments based on a 2/5ths fractional interest for approximately two-and-a-half years. Sundheims’ predecessors, including Ole Sundheim—an original party to the 1953 Warranty Deed—never objected to the fractional royalty payments. ¶37 “Where an agreement involves repeated occasions for performance by either party with knowledge of the nature of the performance and opportunity for objection to it by the other, any course of performance accepted or acquiesced in without objection is given great weight in the interpretation of the agreement.” Restatement (Second) of Contracts § 202(4). The parties’ conduct supports Teisingers’ contention that the 3/5ths 18 landowner’s royalty reserved in the 1953 Warranty Deed did not expire with termination of the Hill Lease. Following the 1982-1985 royalty payments, there was no other significant mineral development on the Property until the activity that spawned this action. ¶38 In summary, the evidence regarding the parties’ Communitization Agreement, their divided receipt of the Four-Mile Creek 1-17 Well royalty payments, and the Murphy Oil Division Orders, when construed under the principle set forth in § 70-1-516, MCA, supports construing the reservation language in favor of Teisingers. We conclude that the District Court erred in resolving the ambiguity in favor of Sundheims. ¶39 3. Whether the District Court erroneously applied the doctrine of laches to deny Teisingers’ claim to the 3/5ths royalty interest. ¶40 Laches is an equitable remedy and applies only if the court finds “lack of diligence by the party against whom the defense is asserted and prejudice to the party asserting the defense.” Anderson v. Stokes, 2007 MT 166, ¶ 19, 338 Mont. 118, 163 P.3d 1273 (emphasis in original) (citing In re Marriage of Deist, 2003 MT 263, ¶ 17, 317 Mont. 427, 77 P.3d 525; Gue v. Olds, 245 Mont. 117, 120, 799 P.2d 543, 545 (1990)). “Laches is not simply a matter of elapsed time; it is also the question of the inequity of permitting a claim to be enforced.” Anderson, ¶ 19. Laches is an affirmative defense. M. R. Civ. P. 8(c)(1). Therefore, the party asserting the defense bears the burden of proof. Dollar Plus Stores, Inc. v. R-Mont. Assocs., L.P., 2009 MT 164, ¶ 32, 350 Mont. 476, 209 P.3d 216. ¶41 The District Court primarily relied on Hunter v. Rosebud County, 240 Mont. 194, 783 P.2d 927 (1989), to support its conclusion that Teisingers’ claim is barred by the 19 doctrine of laches. In Hunter, we identified eight specific factors that may be considered in determining laches. Hunter, 240 Mont. at 199-201, 783 P.2d at 930-31. The District Court relied on three of the Hunter factors to reach its conclusion: 1) the length of time that the present owners have used and occupied the land; 2) the length of time during which the plaintiffs and their predecessors abandoned the property and have not claimed any right; and 3) whether the property interest claimed has become extremely valuable. The court found in favor of Sundheims on each factor and determined the following: that Sundheims have used and occupied the land for 62 years; that Teisingers did not claim any interest in the property for 22 years and then “failed to resolve questions of title to royalties for an additional 40 years thereafter” by failing to timely probate the estate of C.L. and Jennie Teisinger; and that the Property is “now subject to significant oil production netting thousands of dollars in royalty payments each year.” The District Court concluded that Teisingers’ alleged delay in bringing this action “so prejudiced [Sundheims’] preparation of their case as to be inequitable” because Sundheims lost any opportunity to document their ancestors’ position regarding the meaning of the royalty reservation or otherwise prepare to defend their ownership. ¶42 Teisingers argue that Hunter is distinguishable because in this case the District Court analyzed only three of the eight factors. Even then, Teisingers contend that the court erred by concluding that Teisingers had failed to claim or enforce their royalty interest for over 60 years. Teisingers point out that there was no justiciable issue giving rise to a quiet title action until late 2012 when Sundheims challenged Teisingers’ royalty 20 interest. Moreover, Teisingers argue that the record demonstrates that each time there was oil and gas activity on the Property they consistently asserted their royalty interest. Teisingers emphasize that since 1953 there were only three instances where significant oil and gas activity occurred on the property: between 1973 and 1975, between 1981 and 1985, and from 2011 to the present. Teisingers point out that they signed both the Stipulation and Disclaimer and Communitization Agreement in 1975, that they were paid 3/5ths royalty interest without any objection from Sundheims from 1982-1985, and that they filed this quiet title action in early 2013 when they first learned that Sundheims objected to Teisingers’ royalty interest ownership. ¶43 We conclude that the District Court erred in applying the doctrine of laches to bar Teisingers’ claim. The court’s finding that Teisingers failed to timely assert their royalty interest ownership claim is not supported by substantial evidence. The evidence demonstrates that Teisingers asserted their royalty interest each time there was or was about to be oil or gas development on the Property. Sundheims did not object to Teisingers’ royalty interest until late 2012 when they received the letter from Whiting Oil and Gas. Shortly thereafter, Teisingers filed this quiet title action. ¶44 Furthermore, Sundheims have not established that any delay caused them prejudice. In Anderson, we upheld a district court’s rejection of the defendant’s laches defense because the defendant focused solely on the question whether the plaintiffs unreasonably delayed asserting their claims and ignored the question whether he had been prejudiced by the alleged delay. Anderson, ¶¶ 20-21. Like in Anderson, both the 21 District Court and Sundheims focused primarily on the length of time between the 1953 Warranty Deed and this action. Sundheims’ only claim of prejudice was that, due to the alleged delay, they had no notice of Teisingers’ royalty interest and therefore did not document their ancestors’ position regarding the meaning of the royalty reservation. Sundheims’ claim is unpersuasive. As discussed already, the record shows that based on Teisingers’ conduct, Sundheims’ ancestors were aware or should have been aware of Teisingers’ claimed royalty interest prior to this action and did not object to it. Ole Sundheim lived until 1998—well after Teisingers had asserted their interest at least two times—and never objected to Teisingers’ conduct. Therefore, the fact that Sundheims failed to document their ancestors’ position was not due to any alleged delay by Teisingers. Without evidence to support the required showing of prejudice to Sundheims, it was inequitable for the court to apply the doctrine of laches to bar Teisingers’ claim. CONCLUSION ¶45 We reverse the District Court’s order granting judgment to Sundheims and remand for entry of judgment quieting title to the 3/5ths royalty interest reserved in the 1953 Warranty Deed in favor of Teisingers. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ JIM RICE 22 Justice Laurie McKinnon, dissenting. ¶46 I dissent from the Court’s decision for a number of reasons. First, the Court applies a statute, § 70-1-516, MCA, which was never raised by the parties at trial or considered by the District Court. The Court departs from our well-recognized rule that we will not consider an issue raised for the first time on appeal, reasoning that the Teisingers argued “the court should resolve the deed’s ambiguity in their favor” and that the “statute is additional authority that supports their legal theory.” Opinion, ¶ 26. This begs the question of when an argument or issue that supports a party’s position would ever be considered unpreserved for appellate review. In cherry picking what arguments we deem to be raised—based perhaps upon the outcome we would like to reach—we fail to provide appropriate guidance to litigants regarding what issues may be raised on appeal and inevitably invite a multitude of unpreserved claims. Here, in particular, the decisive factor in the Court’s analysis is the presumption contained in § 70-1-516, MCA—an issue never raised or considered by the District Court. ¶47 Second, the rule that we will not consider issues raised for the first time on appeal exists for good reason. Primarily, it assures that through the adversarial process, all arguments and contingencies are raised and considered before this Court establishes a new rule of law or binding precedent. Simply put, it ensures accuracy of the decision making process, as well as its integrity. Here, we have held that § 70-1-516, MCA, is a legislative directive to interpret language of a reservation in a grant in favor of the grantor. Although we state the statute “plainly” requires such an interpretation, it is my 23 opinion that we have failed to observe a distinction made by the statute between a public grant and one that is between private parties. ¶48 “A grant is to be interpreted in favor of the grantee, except that a reservation in any grant and every grant by a public officer or body, as such, to a private party is to be interpreted in favor of the grantor.” Section 70-1-516, MCA (emphasis added). The Court has seized upon the language of the statute’s exception to apply a presumption contrary to the general rule requiring interpretation in favor of the grantee. However, “[a]ccording to the general rule a public grant is to be interpreted in favor of the grantor, whereas one between private parties is to be interpreted in favor of the grantee.” U.S. v. Eldredge, 33 F. Supp. 337 (D. Mont. 1940); citing § 6852, RCM (1935). Deeds that convey mineral interests are subject to general rules governing contract interpretation, including the rule that “the deed will be construed against the grantor rather than against the grantee, because the grantor selects his or her own words.” 53 Am. Jur. 2d Mines and Minerals § 185 (2016); see also § 28-3-206, MCA. However, “[b]y statute or rule of public policy, grants of property, including mineral interests, by the state may be required to be construed in favor of the state as grantor.” 53 Am. Jur. 2d Mines and Minerals § 185 (2016); see also Schwarz v. State, 703 S.W.2d 187, 29 Tex. Sup. J. 145 (Tex. 1986) (distinguishing between a conveyance between private parties and one where the State of Texas is the grantor; the latter providing an example of the exception to the rule that the reservation is to be construed in favor of the grantee). Thus, far from being plain, the 24 Court embarks on territory heretofore never precisely addressed in our precedent and which has not been raised or considered by the trial court. ¶49 The Court relies upon Missoula v. Mix for the rule that the “language of a reservation in a grant is to be interpreted in favor of the grantor, which is a different rule from that which existed at common law and under many other state statutes.” Opinion, ¶ 28 (emphasis added). This language recognizes a distinction and was applied in the context of the grantor, in fact, being a public body—the City of Missoula. A political body was also the grantor in Mineral Cnty. v. Hyde, 111 Mont. 535, 111 P.2d 284 (1941), which was relied upon by the Court in Missoula v. Mix. We simply have never addressed the interpretation of the exception found in § 70-1-516, MCA, as it relates to a reservation between private parties. Accordingly, I would not reach the conclusion the Court has respecting § 70-1-516, MCA, given that it was neither raised nor argued at trial. ¶50 Regardless of whether a statutory presumption was appropriately applied, it is my opinion that the District Court, given the ambiguity of the reservation, correctly weighed and considered the extrinsic evidence in finding that the reservation was limited to then-existing oil and gas leases. The Teisingers claim entitlement to royalties based upon: (1) their heirs’ interpretation of two documents recorded in 1975; and (2) the payment pursuant to a title opinion of royalties to the heirs between 1976 and 1985. ¶51 The first document recorded in 1975 is entitled “Stipulation and Disclaimer” and was authored by the Teisinger themselves. The document claimed that the Teisingers had 25 a continuing royalty interest. There was no evidence, either through testimony or service of the document, that the Sundheims were aware of the document. The District Court properly afforded the “Stipulation and Disclaimer” little weight because of its inherently self-serving nature. The second document was a “Communitization Agreement,” which allowed development of the minerals on the property. The District Court found that that agreement reflects typical oil industry practice to obtain signatures from every person who conceivably has an interest in the minerals when development occurs. The document reflects that the Sundheims held an interest in the minerals; however, it does not identify any specific mineral or royalty interest owned by the Teisingers. The District Court similarly attributed little weight to this document. ¶52 Finally, royalty payments made to the Teisingers between 1976 and 1985 were based upon a title report subsequently determined to be in error by two title attorneys and the District Court. There was no evidence, as noted by the District Court, that the royalty payments were proper or that the Sundheims were aware of them. Our analysis circuitously adopts the title report, regardless of whether it was correct, without any basis in law. ¶53 Grants of real property should generally be interpreted in the same manner as contracts. Section 70-1-513, MCA. “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 (emphasis added). The Teisingers failed to present any evidence of the parties’ intentions at the time the 1953 Warranty Deed was executed. Their claim rests 26 solely on self-serving actions and upon the payment of royalties, which there is no evidence the Sundheims were aware of. ¶54 Finally, and importantly, the District Court recognized that the unusual size of the reservation—a 3/5ths interest—counseled against finding that it continued beyond 1958. Moreover, the size of the royalty payment was identical to the portion of delay rentals and both were contained within a single sentence of the 1953 Warranty Deed. The context and practice of the oil industry and the construction of the royalty reservation supports the conclusion that the royalty payment was to terminate in 1958 upon termination of the lease related to the delay rentals. ¶55 In my opinion, the District Court’s factual findings were supported by substantial evidence and the court did not misapprehend the effect of the evidence. The Court has failed to indicate how the District Court’s findings were clearly erroneous and not supported by substantial evidence. While we may disagree with the weight to be given to the testimony of witnesses and evidence, these matters are left to the district court’s discretion. In re Marriage of Kovarik, 287 Mont. 350, 954 P.2d 1147 (1998). Finally, our decision rests squarely on the “principle set forth in § 70-1-516, MCA,” Opinion, ¶ 38, which, in my view, is inappropriate to address. To the extent that we have supplanted our judgment for that of the District Court, ignored that the District Court relied on substantial evidence, and entertained an argument raised for the first time on appeal, I dissent. /S/ LAURIE McKINNON

March 9, 2016

70568c21-719d-4456-81ae-f55ba5fb20b8

Stonehocker v. Gulf Ins. Co.

2016 MT 78

DA 15-0139

Montana

Montana Supreme Court

DA 15-0139 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 78 MARILYN “MITZI” STONEHOCKER, Plaintiff and Appellant, v. GULF INSURANCE COMPANY and TRAVELERS INDEMNITY COMPANY OF AMERICA, Defendants and Appellees. APPEAL FROM: District Court of the Ninth Judicial District, In and For the County of Glacier, Cause No. DV 05-15 Honorable Robert G. Olson, Presiding Judge COUNSEL OF RECORD: For Appellant: James G. Hunt, Hunt Law Firm, Helena, Montana For Appellees: Kevin M. Funyak, Stacey & Funyak, Billings, Montana Submitted on Briefs: February 17, 2016 Decided: March 29, 2016 Filed: __________________________________________ Clerk March 29 2016 Case Number: DA 15-0139 2 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 Marilyn Stonehocker (Stonehocker) was seriously injured while working for her employer, Bear Creek Outfitters Inc. (Bear Creek). Because her injury was caused by the use of her personal automobile, she was able to recover benefits under her auto insurance policy. She then sought benefits under Bear Creek’s commercial auto policy, but Bear Creek’s insurer, Travelers Indemnity Company (Travelers), denied coverage. Stonehocker brought a claim for coverage in the Ninth Judicial District Court, Glacier County, arguing that she was a named insured under Bear Creek’s policy, and that she was occupying a temporary substitute for an insured vehicle at the time of her injury. Stonehocker and Travelers filed cross motions for summary judgment. The District Court granted summary judgment to Travelers on both of Stonehocker’s coverage theories. We affirm in part and reverse in part. ISSUES ¶2 We address the following issues on appeal: ¶3 Did the District Court err in granting summary judgment to Travelers on the grounds that Stonehocker was not a named insured under the uninsured motorist provision of the Travelers policy? ¶4 Did the District Court err in granting summary judgment to Travelers on the grounds that at the time of Stonehocker’s injury her personal pickup was not a “temporary substitute auto” under the Travelers policy? 3 FACTUAL AND PROCEDURAL BACKGROUND ¶5 Marilyn Stonehocker worked as a camp cook for Bear Creek Outfitters, a guest ranch located west of East Glacier. Bear Creek offered guests the opportunity to accompany wranglers on multi-day cattle drives. Stonehocker owned a 1995 Dodge pickup, which she used to pull an 18-foot gooseneck horse trailer that her husband had modified to include a mobile kitchen and sleeping quarters. Under normal circumstances, Stonehocker would drive her pickup and trailer to each new campsite, and the guests’ luggage would be transported in a 1996 GMC Suburban owned and insured by the ranch. Stonehocker stated in her affidavit that “[b]ecause the cook is always the first one up and makes noise when cooking, [her] final evening parking place was always away from the wall tents so [she] did not wake [the guests] when cooking in the morning.” ¶6 On June 4 and 5, 2000, as guests were arriving for a cattle drive, Bear Creek’s Suburban was undergoing mechanical work and was out of use. Consequently, although Bear Creek normally used its Suburban to transport guests and luggage, Stonehocker used her pickup to transport guests from Cut Bank and East Glacier to the ranch. She had to make multiple trips to transport all the guests because her pickup seats only two people in addition to the driver. Stonehocker then used her pickup and trailer to take the guests’ luggage to the first campsite, also a task normally handled by an employee driving Bear Creek’s Suburban. ¶7 During the course of the multi-day cattle drive, Stonehocker continued using her pickup and trailer to transport the mobile kitchen and the guests’ luggage from campsite to campsite. Each night she would park the pickup near the guests’ tents so they would 4 not have far to carry their luggage, and then she would move the pickup away from the tents so as not to disturb the guests in the morning. On the last night of the drive, before moving her pickup away from the guest tents, Stonehocker fell asleep in her trailer with the pickup doors unlocked and the key still in the ignition. She awoke around 5:00 am to the sound of her pickup being started. She saw a man she did not recognize in the driver’s seat. The stranger drove the pickup and attached trailer away from the campsite. When Stonehocker realized that her pickup and trailer were being stolen, she called 911. At some point, she either jumped or was thrown from the trailer and sustained a head injury that has prevented her from recalling other details of the incident. ¶8 Stonehocker’s pickup was insured by State Farm Insurance Company. State Farm paid Stonehocker the uninsured motorist (UM) benefits owed to her under her policy, but denied liability coverage because the pickup had been stolen by a man who was not a permissive driver under the policy. Stonehocker then sought to recover UM benefits from Bear Creek’s corporate auto policy, issued by Travelers.1 Travelers denied UM coverage to Stonehocker, which resulted in this litigation. The parties filed two sets of cross motions for summary judgment. On July 19, 2012, the District Court found that Stonehocker was not a named insured under Bear Creek’s policy and granted Travelers’ motion for summary judgment. Then on February 18, 2015, the District Court found that Stonehocker’s pickup was not an insured vehicle under Bear Creek’s policy and granted Travelers’ second motion for summary judgment. Stonehocker appeals from both orders. 1 Bear Creek’s auto policy was issued by Gulf Insurance Company, but Gulf was merged into/acquired by Travelers. 5 STANDARD OF REVIEW ¶9 We review a district court’s entry of summary judgment de novo. McClue v. Safeco Ins. Co., 2015 MT 222, ¶ 8, 380 Mont. 204, 354 P.3d 604 (citing Albert v. City of Billings, 2012 MT 159, ¶ 15, 365 Mont. 454, 282 P.3d 704). “Summary judgment is appropriate when the moving party demonstrates both the absence of any genuine issues of material fact and entitlement to judgment as a matter of law.” Albert, ¶ 15 (citing M. R. Civ. P. 56). ¶10 The interpretation of an insurance contract is a question of law which we review de novo. Tidyman’s Mgmt. Servs. v. Davis, 2014 MT 205, ¶ 13, 376 Mont. 80, 330 P.3d 1139 (citing Newman v. Scottsdale Ins. Co., 2013 MT 125, ¶¶ 20-24, 370 Mont. 133, 301 P.3d 348). DISCUSSION ¶11 The UM portion of Bear Creek’s commercial auto policy says that Travelers “will pay all sums the ‘insured’ is legally entitled to recover as compensatory damages from the owner or driver of an ‘uninsured motor vehicle.’ The damages must result from ‘bodily injury’ sustained by the ‘insured’ caused by an ‘accident.’” The policy goes on to define an “insured” as “you,” a “family member,” or “[a]nyone else ‘occupying’ a covered ‘auto’ or a temporary substitute for a covered ‘auto,’” as long as “[t]he covered ‘auto’ [is] out of service because of its breakdown, repair, servicing, loss or destruction.” ¶12 Stonehocker relied on this language to make two arguments for coverage. First, she argued that as an employee of Bear Creek, she was insured as a “you” under the policy. Second, she argued that her pickup was a temporary substitute for the covered 6 Suburban at the time of her injury, and she is thus entitled to coverage because the Suburban was out of service for repairs.2 The District Court denied coverage under both theories. We address both arguments below. ¶13 Did the District Court err in granting summary judgment to Travelers on the grounds that Stonehocker was not a named insured under the uninsured motorist provision of the Travelers policy? ¶14 The declarations page of Bear Creek’s commercial auto insurance policy, entitled “Business Auto Declarations,” is addressed to “Bear Creek Outfitters, Inc.” and lists the insured’s form of business as “Guest Ranch.” The “named insured” on the “Montana Uninsured Motorist Coverage” page is also “Bear Creek Outfitters, Inc.” Stonehocker argued to the District Court and argues now on appeal that the insured entity under the policy is not a corporation but rather a guest ranch. According to Stonehocker, Montana’s statutory definition of “guest ranch,” found at § 50-51-102(5), MCA, implies that a guest ranch cannot function without employees, and because Stonehocker is an employee of Bear Creek, she is an insured under the policy. Stonehocker’s interpretation of the policy language is incorrect. ¶15 We have had occasion to apply the reasonable expectations doctrine to resolve coverage questions; “the objectively reasonable expectations of insurance purchasers regarding the terms of their policies should be honored.” Am. States Ins. Co. v. Flathead Janitorial & Rug Servs., 2015 MT 239, ¶ 22, 380 Mont. 308, 355 P.3d 735. When we 2 Stonehocker raised a third issue—whether ambiguous definitions of “you” in the policy extend UM coverage to Stonehocker—but noted in her brief that if this Court decides in her favor on one or more of the other issues, this Court should decline to reach her ambiguity argument. Because we are reversing the District Court’s decision regarding the temporary substitute auto provision, we decline to reach Stonehocker’s ambiguity argument. 7 apply the doctrine, we interpret an insurance contract “from the viewpoint of a consumer with average intelligence, with no training in the law or insurance.” Flathead Janitorial, ¶ 22 (citing Leibrand v. National Farmers Union Property & Casualty Co., 272 Mont. 1, 7, 898 P.2d 1220, 1224 (1995)). The parties agree that Montana law allows an insurer to limit coverage to a corporation or other business entity. See e.g. Lee v. Great Divide Ins. Co., 2008 MT 80, ¶ 16, 342 Mont. 147, 182 P.3d 41 (interpreting a policy that “limit[s] coverage to the corporation and to anyone else occupying a covered auto or temporary substitute for a covered auto”). ¶16 The District Court concluded that a reasonable person of average intelligence would understand the insured party under the Travelers policy to be the business entity Bear Creek. We agree. The mailing address on the declarations page is a P.O. Box for “Bear Creek Outfitters, Inc.” The “Inc.” clearly identifies Bear Creek as a corporate entity. Immediately below the address, the insured’s form of business is identified as a “Guest Ranch,” thereby indicating the kind of business in which the corporate entity engages. Throughout the rest of the policy, the named insured is identified as “Bear Creek Outfitters, Inc.” At no point in the policy is the named insured identified as a human person or persons or as a business entity other than a corporation. A reasonable person of average intelligence would not take the fact that the corporation Bear Creek Outfitters, Inc. engages in the business of operating a guest ranch to mean that an entity other than a corporation is the insured under the policy. Thus, contrary to Stonehocker’s assertions, the “You” under “Who Is An Insured” for purposes of UM coverage is the policy holder, Bear Creek. 8 ¶17 In previous cases interpreting similar policies under which a corporation was the named insured, “[w]e have not expanded coverage to injured persons involved in the corporation who are not occupying vehicles covered under the policy at the time of the accident.” Lee, ¶ 16 (citing Lierboe v. State Farm Mut. Auto. Ins. Co., 2003 MT 174, 316 Mont. 382, 73 P.3d 800; Chilberg v. Rose, 273 Mont. 414, 903 P.2d 1377 (1995)). Stonehocker is not entitled to UM coverage under the Travelers policy simply because she is an employee of a corporation that operates a guest ranch. The District Court did not err in granting Travelers’ motion for summary judgment on this issue. ¶18 Did the District Court err in granting summary judgment to Travelers on the grounds that at the time of Stonehocker’s injury her personal pickup was not a “temporary substitute auto” under the Travelers policy? ¶19 Stonehocker is entitled to UM coverage under Bear Creek’s commercial auto policy if she can prove she was occupying a “temporary substitute for a covered ‘auto’” at the time of her injury, and that the covered auto was out of service for repairs. Travelers does not dispute that the covered auto, the 1996 Suburban, was out of use for repairs at the time of Stonehocker’s injury. Coverage hinges then on whether Stonehocker’s pickup was being used as a temporary substitute for the Suburban at the time of her injury. ¶20 Stonehocker attested in her affidavit that “[t]he Suburban would have normally hauled the guests’ luggage but it was not available so I took the guest luggage in my horse trailer to the first night camp.” She also attested that [a]fter each day during the cattle drive, when camp was moved, I took the guest luggage in my pickup and trailer because the Suburban remained out of order. Although the Suburban could not have pulled the fifth wheel 9 trailer kitchen and sleeping quarters, if the Suburban had been available, I would not have had the guest luggage in with me. Travelers did not dispute these facts at any point. ¶21 Stonehocker argued to the District Court that at the time of her injury, her pickup was a temporary substitute for the Suburban because her pickup was being used to store and transport guest luggage, a function normally performed by the Suburban. Travelers responded that Stonehocker must be able to show that she would have been using the insured Suburban at the time of her accident if it had been available, and that because she admitted she would not have been using the Suburban (it would have been driven by another ranch employee), her pickup is not a temporary substitute for the Suburban. In essence, the parties disagree about the proper way to identify a temporary substitute vehicle. According to Stonehocker, the key is similarity of use—the substitute vehicle must have performed substantially the same function the covered vehicle would have performed but for its needed repairs. According to Travelers, the question of similarity of use is only relevant if the claimant can first prove that he or she would have been using the insured vehicle at the time of the accident had it been available. The District Court agreed with Travelers, and concluded that “the undisputed fact that [Stonehocker] would not have been using the Suburban at the time of the underlying accident is fatal to her claim.” We disagree, and we now hold that the proper test for identifying a temporary substitute vehicle is whether it is put to the same use to which the covered vehicle would have been put but for its withdrawal from service. 10 ¶22 We have no precedent that specifically addresses the issue of what constitutes a temporary substitute vehicle under Montana law. In reaching its conclusion that Stonehocker’s pickup was not a temporary substitute for the Suburban, the District Court relied on a Ninth Circuit case originating in Montana, Progressive Casualty Insurance Co. v. Owen, 519 F.3d 1035 (9th Cir. 2008), and the Second Edition of Couch on Insurance. Our review of the same authority leads us to conclude that the District Court erred in its interpretation of the policy language. ¶23 The policy language at issue says an insured for purposes of UM coverage is “[a]nyone else ‘occupying’ a covered ‘auto’ or a temporary substitute for a covered ‘auto.’” The term “temporary substitute” is not defined in the policy. A reasonable insurance consumer, Flathead Janitorial, ¶ 22, would understand that the word “anyone” indeed means any person, and that the focus of the policy provision is on the vehicle being substituted and not on the person occupying the substituted vehicle. This interpretation is borne out by the Ninth Circuit’s application of Montana law and Couch on Insurance. ¶24 In Progressive Casualty Insurance Company v. Owen, the Ninth Circuit was asked to apply Montana law to interpret a commercial auto policy similar to the one before us now. In that case, Arlene Owen and her husband were the sole shareholders of Owen Trucking, a corporation in the business of hauling talc from talc mines. Owen, 519 F.3d at 1037. Owen Trucking, the named insured, had a commercial auto insurance policy issued by Progressive that covered twelve of its vehicles. Owen, 519 F.3d at 1037. On the day of the accident that gave rise to the lawsuit, Arlene was helping a friend load hay 11 bales onto a semi-truck owned by the friend. Owen, 519 F.3d at 1037. The friend was not an Owen Trucking employee and his truck was not insured under Owen Trucking’s policy. Owen, 519 F.3d at 1037. While Arlene was standing next to the truck, the hay bales shifted and one bale fell on her, causing serious injury. Owen, 519 F.3d at 1037. After exhausting the insurance benefits to which she was entitled under her own auto policy and her friend’s auto policy, Arlene sought underinsured (UIM) coverage from Progressive under Owen Trucking’s policy. Owen, 519 F.3d at 1037. ¶25 The Ninth Circuit concluded that Arlene was not a named insured under the commercial auto policy and that she was not occupying an insured auto at the time of her injury, so she was entitled to coverage only if the semi-truck was a temporary substitute for an Owen Trucking vehicle that was “withdrawn from normal use due to breakdown, repair, servicing, loss, or destruction.” Owen, 519 F.3d at 1040. In denying Arlene UIM coverage, the Ninth Circuit held that “[t]here is no evidence in the record . . . regarding which covered vehicle or vehicles Arlene would have used but for its unavailability,” and that “Progressive is therefore entitled to summary judgment because Arlene has presented no evidence that she was using [her friend’s] truck in place of an Owen Trucking vehicle that was withdrawn from use because of breakdown, repair, servicing, loss, or destruction.” Owen, 519 F.3d at 1040. ¶26 Owen differs from the case at bar because in Owen, Arlene was unable to satisfy the second requirement of the temporary substitute auto provision: that the covered auto was withdrawn from use for repairs. In the present case, the requirement that the covered auto be withdrawn from use for repairs is established and undisputed. The only 12 remaining question is whether Stonehocker’s pickup qualified as a temporary substitute for the out-of-use Suburban. Owen does not help this Court answer that question. The District Court incorrectly read into the language of Owen a requirement that a claimant first prove that she and no one else would have been using the covered auto before a court needs to address whether the substitute auto was put to a use normally reserved for the insured auto. Owen imposes no such requirement. ¶27 The District Court also found that requirement to be imposed on claimants by Couch on Insurance. The Second Edition of Couch, relied upon by the District Court, provides, [a] substitute automobile within the meaning of the substitute automobile policy clause is one actually but only temporarily, used in place of the specified automobile. That is, for the same use the insured car would have been used except for its withdrawal from all normal use because of its breakdown, repair, servicing, loss, or destruction. 12 Couch on Insurance 2d (Rev ed) § 45:232 (1981). This emphasis on the use of the vehicle appears in the Third Edition as well: “[u]ninsured motorist (UM)/underinsured motorist (UIM) policies also generally cover a vehicle used temporarily as a substitute for an insured vehicle when the insured vehicle is incapacitated from normal use because of breakdown, repair, servicing, loss, or destruction.” 9 Couch on Insurance 3d § 123:28 (2015). However, according to the District Court’s interpretation, “Couch requires that [Stonehocker] show that her personal pickup was actually used as a substitute for the Suburban, and that the Suburban would have been used by [Stonehocker] for the trip on which her accident occurred had it been available” (emphasis added). The former is the 13 crux of this case; the latter is not a requirement this Court finds to be imposed on claimants by Couch. ¶28 A reasonable consumer’s interpretation of the policy language at issue in this case, as well as a review of the Ninth Circuit’s application of Montana law and an esteemed treatise on insurance law satisfy this Court that the proper test for what constitutes a temporary substitute auto is the use to which it is put, and that a claimant need not first prove that he or she and no one else would have been occupying the covered auto. ¶29 Stonehocker acknowledged that under normal circumstances, she would have driven her pickup with the mobile kitchen in the trailer, and another ranch employee would have driven the guests’ luggage in the Suburban. In other words, under normal circumstances, she would not have been driving the covered auto at all. But on the day of her injury, because the Suburban was out of use for repairs, she drove her pickup with both the mobile kitchen and the guests’ luggage in the horse trailer. The fact that she would not have driven the Suburban under normal circumstances does not negate the fact that on the day of her injury, she was using her pickup to perform a task normally performed by the Suburban. ¶30 Travelers also emphasizes that Stonehocker had to have her mobile kitchen trailer with her on the cattle drive at all times and, because the Suburban could not tow the gooseneck trailer, Stonehocker would have been driving her pickup truck even if the Suburban had been in good working condition. Travelers argues that Stonehocker’s interpretation of the policy improperly would expand coverage to more than one vehicle, as long as each was transporting an item that the Suburban otherwise would have 14 transported. But this argument assumes that the Suburban would not have been used for transporting guests and luggage had it been available, and there is no evidence in the record to support that assumption. Had the Suburban been available and used to transport the guests’ luggage, it would be the only vehicle covered by the policy. The critical focus under the temporary substitute auto provision is whether the pickup truck was in fact being used as a substitute for the Suburban. ¶31 Travelers and Stonehocker filed cross motions for summary judgment before the District Court, both arguing that there was no genuine dispute of material fact. Thus, summary judgment is proper if either party can show it is entitled to judgment as a matter of law. M. R. Civ. P. 56(c)(3). As indicated above, Travelers has not disputed Stonehocker’s assertion that she had undertaken the responsibility of carrying the guests’ luggage in her pickup and trailer on the day her vehicle was stolen, nor has it disputed her contention that, had the Suburban been available, she would not have had the luggage with her that day and she would not have been parked near the guest tents at the time her vehicle was stolen. In fact, Travelers did not file any opposing affidavits contesting Stonehocker’s version of these facts. ¶32 In order to prevent the entry of summary judgment, “the party opposing summary judgment must present facts of a substantial nature showing that genuine issues of material fact remain for trial.” Cape v. Crossroads Correctional Ctr., 2004 MT 265, ¶ 12, 323 Mont. 140, 99 P.3d 171 (citing Klock v. Town of Cascade, 284 Mont. 167, 174, 943 P.2d 1262, 1266 (1997)). “Moreover, the opposing party cannot rest upon mere allegations in the pleadings, but has an affirmative duty to respond by affidavits or other 15 sworn testimony containing material facts that raise genuine issues; conclusory or speculative statements will not suffice.” Klock, 284 Mont. at 174, 943 P.2d at 1266 (citing Groshelle v. Reid, 270 Mont. 443, 447, 893 P.2d 314, 316 (1995)) (internal quotation marks omitted). The entry of summary judgment is proper if the party opposing summary judgment fails to demonstrate the existence of a genuine dispute of material fact. Pipinich v. Battershell, 232 Mont. 507, 515, 759 P.2d 148, 153 (1988). ¶33 Stonehocker’s undisputed testimony that she was using her pickup to perform a task that the ranch Suburban normally would have performed satisfies the “same use” test. That same use is sufficient to establish that Stonehocker’s pickup was a temporary substitute for the Suburban, entitling her to judgment on her coverage claim. Stonehocker need not prove that she and no one else would have been occupying the Suburban on the day of her injury. Since there is no genuine dispute of material fact and Stonehocker is entitled to judgment as a matter of law, the District Court erred in granting summary judgment in favor of Travelers on this issue. CONCLUSION ¶34 For the foregoing reasons, we affirm the District Court’s July 19, 2012 Order granting Travelers’ motion for summary judgment on the issue of whether Stonehocker was a named insured under the Bear Creek commercial auto policy, and we reverse the District Court’s February 18, 2015 Order granting Travelers’ motion for summary judgment on the issue of whether Stonehocker’s pickup was a temporary substitute for a covered auto. We direct the District Court to enter judgment in favor of Stonehocker on her coverage claim. 16 /S/ PATRICIA COTTER We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA /S/ JIM RICE

March 29, 2016

993328e0-75fe-42cf-9d73-a7609d5e3d25

Shockley v. Cascade Co.

2016 MT 34

DA 15-0361

Montana

Montana Supreme Court

DA 15-0361 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 34 J.G. SHOCKLEY, Petitioner and Appellant, v. CASCADE COUNTY, JASON CARROLL, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, LOCAL 2, Respondents and Appellees. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. DV-10-534C Honorable Kenneth R. Neill, Presiding Judge COUNSEL OF RECORD: For Appellant: Peter Michael Meloy, Attorney at Law, Helena, Montana For Appellee: D. Patrick McKittrick, Timothy J. McKittrick, Attorneys at Law, Great Falls, Montana Carey Ann Shannon, Deputy County Attorney, Great Falls, Montana Submitted on Briefs: January 6, 2016 Decided: February 16, 2016 Filed: __________________________________________ Clerk February 16 2016 Case Number: DA 15-0361 2 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 Following a successful petition under Article II, section 9 of the Montana Constitution for disclosure of certain documents, J.G. Shockley (Shockley) filed a motion for attorney fees and costs under § 2-3-221, MCA. The District Court granted Shockley his costs but denied his request for attorney fees. Shockley appeals the denial of his motion for an award of attorney fees, and requests that this Court impose upon district courts clear guidelines for denying motions for attorney fees in right to know cases. We decline to articulate such guidelines, and we affirm the District Court. ISSUE ¶2 We address the following issue on appeal: Did the District Court abuse its discretion by declining to award Shockley attorney fees under § 2-3-221, MCA? FACTUAL AND PROCEDURAL BACKGROUND ¶3 This is the second time this matter has come before us. In Shockley v. Cascade County (Shockley I), 2014 MT 281, 376 Mont. 493, 336 P.3d 375, we held that Shockley had standing under Article II, section 9 of the Montana Constitution to assert a claim against Cascade County for disclosure of certain documents. Shockley was seeking disclosure of a settlement agreement entered into by Jason Carroll (Carroll), a Cascade County detention officer, Carroll’s employer, Cascade County (the County), and Carroll’s collective bargaining unit, the International Brotherhood of Teamsters, Local 2 (the Union). Shockley I, ¶ 3. Early in the litigation, the County admitted it had no 3 objection to disclosure of the settlement agreement. Then on July 25, 2013, the District Court entered Carroll’s default. From July 2013 onward, the only barrier to disclosure of the settlement agreement was the resistance of the Union. In opposing disclosure, the Union relied on the confidentiality provision of the settlement agreement, to which it was a party. ¶4 Following our decision in Shockley I, the District Court balanced the public’s right to know against the individual privacy interests at stake, granted Shockley’s motion, and ordered the County to disclose the settlement agreement. As the prevailing party, Shockley then filed a motion under § 2-3-221, MCA, for an award of costs and attorney fees. In his motion for fees, Shockley requested only the fees incurred after Carroll’s default was entered and the County conceded that it had no objection to release of the settlement agreement. Thus, his fee request was directed solely against the Union. The Union opposed Shockley’s motion. The District Court awarded Shockley his costs but denied his request for attorney fees. Shockley appeals the denial of his request for attorney fees. STANDARD OF REVIEW ¶5 We review for abuse of discretion a district court’s decision to award or deny attorney fees. Billings High Sch. Dist. No. 2 v. Billings Gazette, 2006 MT 329, ¶ 23, 335 Mont. 94, 149 P.3d 565 (citing Pengra v. State, 2000 MT 291, ¶¶ 24, 27, 302 Mont. 276, 14 P.3d 499). 4 DISCUSSION ¶6 Did the District Court abuse its discretion by declining to award Shockley attorney fees under § 2-3-221, MCA? ¶7 After successfully petitioning under Article II, section 9 for disclosure of the settlement agreement, Shockley sought an award of attorney costs and fees under § 2-3-221, MCA. Section 2-3-221, MCA, provides that “[a] person alleging a deprivation of rights who prevails in an action brought in district court to enforce the person’s rights under Article II, section 9, of the Montana constitution may be awarded costs and reasonable attorney fees.” An award of attorney fees for prevailing parties in suits brought under Article II, section 9 is discretionary. Yellowstone Cnty. v. Billings Gazette, 2006 MT 218, ¶ 30, 333 Mont. 390, 143 P.3d 135. ¶8 Although we have declined to articulate firm guidelines for a district court’s denial of a request for attorney fees under § 2-3-221, MCA, “it is well-established that outright denial of a motion for attorney fees without rationale, is ‘not an exercise of discretion, but is an abuse of that discretion.’” Yellowstone Cnty., ¶ 30 (citing Matter of Investigative Records, 265 Mont. 379, 383, 877 P.2d 470, 472 (1994)). In his brief in support of his motion for attorney fees, Shockley contended that a defendant’s acting reasonably and in good faith has not been held to be a sufficient defense to a request for attorney fees and costs in right to know cases. See e.g. Bozeman Daily Chronicle v. City of Bozeman Police Dep’t, 260 Mont. 218, 232, 859 P.2d 435, 443-44 (1993); The Associated Press v. Board of Pub. Educ., 246 Mont. 386, 393, 804 P.2d 376, 380 (1991). Nevertheless, the District Court determined that “the unique procedural history of this case takes this 5 matter beyond mere reasonableness and good faith on the part of the Union.” The District Court granted Shockley his costs but denied his request for attorney fees, on the grounds that the “extraordinary development of case law evolving as the case was in progress [makes it] hard to find any justice in assessing attorney’s fees against the Union.” ¶9 We decline to reach the question of whether the District Court’s rationale for denying fees satisfies abuse of discretion review. Instead, we conclude that an award of attorney fees under any rationale is inappropriate in this case because the sole entity from which such fees are sought—the Union—is not a public or governmental body. As we have said before, “[w]e will affirm a district court decision if the right result was reached, though for the wrong reason, and we do so here.” Hinebauch v. McRae, 2011 MT 270, ¶ 25, 362 Mont. 358, 264 P.3d 1098 (citing Wells Fargo Bank v. Talmage, 2007 MT 45, ¶ 23, 336 Mont. 125, 152 P.3d 1275). ¶10 Article II, section 9 of the Montana Constitution, entitled “Right to know,” ensures that “[n]o 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.” Review of a claim brought under the right to know is a three-step process. First, we consider whether the provision applies to the particular political subdivision against whom enforcement is sought. Second, we determine whether the documents in question are “documents of public bodies” subject to public inspection. Finally, if the first two requirements are satisfied, we decide whether a privacy interest is present, and if so, whether 6 the demand of individual privacy clearly exceeds the merits of public disclosure. Becky v. Butte-Silver Bow Sch. Dist. No. 1, 274 Mont. 131, 136, 906 P.2d 193, 196 (1995). The District Court conducted this analysis in determining whether to grant Shockley’s petition for disclosure of the settlement agreement. But the requirements are also relevant to a determination of whether to award attorney fees to a party who prevailed in a right to know action. ¶11 We have in the past affirmed a district court’s denial of a motion for attorney fees when the party that objected to disclosure on privacy grounds was not a public body. In Pengra v. State, 2000 MT 291, 302 Mont. 276, 14 P.3d 499, we concluded that the district court did not abuse its discretion when it declined the petitioner’s request for attorney fees, and we noted that “[t]he State has not asserted a right of privacy-that right has instead been asserted in this case by Pengra, a private party.” Pengra, ¶ 26. As in Pengra, the party in this case asserting a right to privacy and against whom attorney fees are being sought is not a public or governmental body. Rather, that party, the Union, is a private collective bargaining group. As a private entity, the Union is not subject to Article II, section 9 of the Montana Constitution. Bryan v. Yellowstone Cnty. Elementary Sch. Dist. No. 2, 2002 MT 264, ¶ 25, 312 Mont. 257, 60 P.3d 381 (explaining that Article II, section 9 applies to public bodies and governmental agencies and that a “public or governmental body” is “a group of individuals organized for a governmental or public purpose.”). For this reason the District Court did not abuse its discretion in denying Shockley’s motion for attorney fees. 7 ¶12 On a final note, we acknowledge we are resolving this case on grounds not addressed by the parties on appeal. Although we generally do not address issues not raised by the parties, Pinnow v. Mont. State Fund, 2007 MT 332, ¶ 15, 340 Mont. 217, 172 P.3d 1273 (citing In re Parenting of D.A.H., 2005 MT 68, ¶ 7, 326 Mont. 296, 109 P.3d 247), we have done so out of necessity before, see e.g. State v. Dickinson, 2008 MT 159, ¶¶ 20-24, 343 Mont. 301, 184 P.3d 305 (determining “that the question of whether items would have been inevitably discovered pursuant to execution of a valid search warrant is one we can answer sua sponte”); Pinnow, ¶¶ 15-17 (determining sua sponte whether a district court judge “had authority to assume jurisdiction over this case”); Knowlton v. Knowlton, 193 Mont. 448, 450, 632 P.2d 336, 337 (1981) (sua sponte setting aside an order granting a modification of custody because “the parties and the trial court failed to abide by” an applicable statute). We do so here because the parties and the District Court failed to acknowledge that right to know fees are recoverable under § 2-3-221, MCA, only when the prevailing party is successful in enforcing his rights under Article II, section 9 of the Montana Constitution, and only against a public body or governmental agency. Were we to resolve this case premised on the rationale adopted by the District Court, our Opinion would by implication suggest that under other circumstances, right to know fees could be recovered against a non-public or non-governmental entity. It is important for purposes of this and future cases to clearly announce that this is not permitted under the law. 8 CONCLUSION ¶13 For the foregoing reasons, we affirm the District Court’s May 13, 2015 Order granting Shockley’s motion for costs but denying his motion for attorney fees. /S/ PATRICIA COTTER We Concur: /S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ BETH BAKER /S/ JIM RICE

February 16, 2016

65167935-2a8e-4980-891e-7016c23b0bbb

Heavygun v. State

2016 MT 66

DA 14-0815

Montana

Montana Supreme Court

DA 14-0815 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 66 GARY DUANE HEAVYGUN, Petitioner and Appellant, v. STATE OF MONTANA, Respondent and Appellee. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. CDV-12-610 Honorable Kenneth R. Neill, Presiding Judge COUNSEL OF RECORD: For Appellant: Joseph P. Howard, Joseph P. Howard, P.C.; Great Falls, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Mardell Ployhar, Assistant Attorney General; Helena, Montana John W. Parker, Cascade County Attorney; Great Falls, Montana Submitted on Briefs: February 3, 2016 Decided: March 22, 2016 Filed: __________________________________________ Clerk March 22 2016 Case Number: DA 14-0815 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Gary Duane Heavygun (Heavygun) was convicted of deliberate homicide, and other related felonies and misdemeanors. Heavygun appealed his convictions, which were affirmed by this Court in State v. Heavygun, 2011 MT 111, 360 Mont. 413, 253 P.3d 897 (Heavygun I). Heavygun filed a petition for postconviction relief and now appeals from an order entered by the Eighth Judicial District Court, Cascade County, denying him postconviction relief. We affirm. ¶2 On appeal, Heavygun asks whether he received ineffective assistance of counsel during his trial. FACTUAL AND PROCEDURAL BACKGROUND ¶3 On January 25, 2009, Heavygun and Justin Wells (Wells) spent several hours drinking together at Heavygun’s home. Heavygun and Wells had grown up together. Heavygun’s wife, Wilma, from whom Heavygun was separated, was also at Heavygun’s home intermittently, despite Wilma having an order of protection against Heavygun. Heavygun and Wells argued throughout the evening about whether Wells’ cousin had molested Heavygun when he was a child. ¶4 After Wilma left, Heavygun walked over to her house. Wilma was home, but did not answer the door and, at around 8:51 p.m., called the police to report his presence. Heavygun left Wilma’s house driving their Suburban, which could be started without a key. Heavygun drove in the opposite direction of his home and out of town. At about 8:57 p.m., Heavygun caused a traffic accident when he sped through a red light and 3 struck another vehicle. Accident witnesses and emergency responders noted that Heavygun was driving very fast, smelled of alcohol, and that he had blood on his hands. Heavygun admitted to a paramedic that he had been driving fast and was under the influence of alcohol. At the accident scene, Heavygun stated repeatedly that his brother1 was dying on his porch. A witness obtained his home address and notified officers. Officers responded to Heavygun’s home where they found Wells outside and unresponsive, with two stab wounds in his back. Wells died as a result of the stab wounds, one of which punctured his lung. ¶5 Heavygun was transported from the traffic accident scene to the hospital. Heavygun had a shallow cut on the inside of his right thumb, which testimony later revealed was an injury consistent with having stabbed someone, striking a bone, and the hand slipping off the knife’s grip and onto its blade. A blood sample drawn on January 26, 2009, at 2:38 a.m. indicated Heavygun’s blood alcohol content at that time was .07. Heavygun called his wife from the hospital and told her that he needed an attorney because he was “going to jail for a long time.” Heavygun told officers at the hospital that he was a “bad man” and asked if he would be charged with a DUI. He then predicted that if he was charged with a DUI, he would be getting two felonies that night. ¶6 At trial, held in April 2010, Heavygun asserted the defense of justifiable use of force. He testified that Wells had a history of beating people up and that he and Wells had physically fought in the past. Heavygun testified that he wanted Wells to leave his 1 Heavygun refers to Wells as his brother, the State refers to Wells as Heavygun’s friend, and the District Court referred to Wells as Heavygun’s cousin. We describe him as Wells. 4 house on the night of the incident because they were arguing. Heavygun testified that the two began physically fighting and that Wells grabbed a knife and came at him. He said he was able to get the knife from Wells and used it to stab Wells “[t]o get him away from me.” According to Heavygun, Wells then agreed to leave and walked out of Heavygun’s house, but Heavygun later found Wells on his front porch having trouble breathing. Heavygun testified that he told Wells he would go get help and then went to Wilma’s house. However, evidence presented of a large blood stain located toward the bottom of the inside of Heavygun’s front door contradicted Heavygun’s assertion that Wells had walked out after being stabbed because it indicated that Wells had bled considerably from his wounds while still present inside Heavygun’s home. ¶7 A jury found Heavygun guilty of deliberate homicide, felony DUI, violation of an order of protection, felony criminal endangerment, driving with a suspended or revoked license, and felony tampering with physical evidence. Heavygun was sentenced to life in prison for deliberate homicide and various concurrent sentences for the other offenses. Heavygun filed a motion for a new trial arguing ineffective assistance of counsel. The District Court denied his motion. Heavygun appealed his convictions. Heavygun raised two issues on appeal. He claimed his right to be present at all critical stages of his criminal proceeding was violated and that he had received ineffective assistance of counsel. This Court determined that his right to be present at all critical stages had not been violated, but dismissed his ineffective assistance claim without prejudice because it would be “better addressed in postconviction proceedings.” Heavygun I, ¶ 23. On 5 August 13, 2012, Heavygun petitioned the District Court for postconviction relief, which was denied. Heavygun appeals. STANDARD OF REVIEW ¶8 The standard of review of a district court’s denial of a petition for postconviction relief is whether the district court’s findings of fact are clearly erroneous and whether its conclusions of law are correct. DeSchon v. State, 2008 MT 380, ¶ 16, 347 Mont. 30, 197 P.3d 476 (citation omitted). Ineffective assistance of counsel claims constitute mixed questions of law and fact which are reviewed de novo. DeSchon, ¶ 16 (citation omitted). DISCUSSION ¶9 Whether Heavygun received ineffective assistance of counsel during his trial. ¶10 The right to effective assistance of counsel is encompassed by the right to counsel guaranteed by the Sixth Amendment to the United States Constitution and by Article II, Section 24 of the Montana Constitution. DeSchon, ¶ 18 (citation omitted). This Court adopted the two-prong test set forth in Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052 (1984), to determine if an ineffective assistance of counsel claim is substantiated. DeSchon, ¶ 18 (citation omitted). To prevail under Strickland, the defendant must show that: 1) counsel’s representation fell below an objective standard of reasonableness; and 2) counsel’s deficient performance prejudiced the defense. Sartain v. State, 2012 MT 164, ¶ 11, 365 Mont. 483, 285 P.3d 407 (citations omitted). If the defendant makes an insufficient showing under either prong, the other prong need not be addressed. Sartain, ¶ 11 (citations omitted). 6 ¶11 Under the first prong of the test, the deficiency prong, counsel’s performance should be evaluated without the “distorting effects of hindsight.” Strickland, 466 U.S. at 689, 104 S. Ct. at 2065. There is a strong presumption that counsel’s actions are within the broad range of reasonable professional assistance because “[t]here are countless ways to provide effective assistance in any given case.” Strickland, 466 U.S. at 689, 104 S. Ct. at 2065. “The proper measure of attorney performance remains simply reasonableness under prevailing professional norms.” Strickland, 466 U.S. at 688, 104 S. Ct. at 2065. Under the second prong of the test, the prejudice prong, “[t]he defendant must show that there is a reasonable probability that, but for counsel’s unprofessional errors, the result of the proceeding would have been different. A reasonable probability is a probability sufficient to undermine confidence in the outcome.” Strickland, 466 U.S. at 694, 104 S. Ct. at 2068. ¶12 Heavygun argues he received ineffective assistance of counsel because: 1) he was represented by more than one attorney; 2) his attorney failed to investigate and present evidence of Wells’ history of violence; and 3) his attorney failed to adequately prepare him to testify. Heavygun also argues the cumulative effect of his claims caused him prejudice and warrants reversal of his conviction. We will address each argument in turn. A. Representation by multiple attorneys ¶13 Heavygun argues he received ineffective assistance of counsel when he was represented by six different attorneys from the Office of the State Public Defender (OPD). Heavygun was represented by three attorneys of record; Carl Jensen (Jensen) 7 from February 12 until October 9, 2009, when Jensen left OPD for private practice; Matthew McKittrick (McKittrick) from October 9 until October 29, 2009; and Scott Spencer (Spencer) from October 29 until the conclusion of Heavygun’s trial. Three additional attorneys also appeared on Heavygun’s behalf. Melissa Edwards and Jeff Olson each appeared once, in place of the attorney of record, at a status hearing. Jennifer Streano, who acted as Spencer’s co-counsel, appeared at one status hearing and at one other hearing. Heavygun argues this “revolving door of attorneys” prohibited the formation of an attorney-client relationship, demoralized him, and made him feel like he was “being processed by the system.” Heavygun asserts that his representation violated OPD’s own standard guidelines. ¶14 The OPD’s standard guidelines recognize that continuous and uninterrupted representation by one attorney is the most effective method of representation and that even if an assigned public defender leaves OPD’s employment, the defender can be directed to continue representing his or her current clients. Section III(3) Standards for Counsel Representing Individuals Pursuant to the Montana Public Defender Act, (Oct. 2009) (OPD Standard(s)). Heavygun argues OPD’s failure to follow OPD Standards and retain Jensen after he left OPD, “fell below an objective standard of reasonableness” and caused him prejudice. Although the OPD Standards may be relevant to a judicial evaluation of counsel’s performance, they are explicitly “not intended to be used as criteria for the judicial evaluation of alleged misconduct of counsel to determine the effectiveness of representation.” Section I(2) OPD Standards. 8 ¶15 As the District Court correctly noted, these guidelines are not the “sole measure of whether a public defender has fallen below the standard of care.” Six attorneys appeared on Heavygun’s behalf and three were attorneys of record; however, Heavygun was primarily represented by two: Jensen and Spencer. Jensen initially undertook Heavygun’s representation, but left OPD’s employment before Heavygun’s trial. Jensen could have been directed to continue representing Heavygun under OPD guidelines, but the guidelines did not require his continuation. Jensen was starting his own private practice and, according to McKittrick, Jensen continuing to represent Heavygun was not believed to be in Heavygun’s best interests. Instead, Heavygun’s representation was reassigned. McKittrick undertook Heavygun’s representation for a brief, twenty-day period between Jensen and Spencer. The record indicates McKittrick acted as attorney of record for such a brief period because his own demanding workload precluded him from providing Heavygun appropriate long-term representation. Additionally, McKittrick planned to assign Heavygun’s representation to “the recently formed Major Crimes Unit of the [OPD], which was staffed by [OPD] attorneys with lower caseloads for the purpose of representing clients charged with very serious crimes.” Spencer, an attorney in the Major Crimes Unit, was then assigned to represent Heavygun in October 2009 and did so until Heavygun’s trial concluded in April 2010. The other three attorneys filled in for the attorney of record at four hearings, three status hearings and one arraignment hearing, which was rescheduled. The record shows it is “common practice” for defense attorneys 9 to appear on each other’s behalf, when asked to do so because of illness or scheduling conflicts, and especially for more routine matters, such as status hearings. ¶16 Heavygun focuses on the number of counsel involved in his defense and speculates “that if Heavygun received continuous representation he would have had a better understanding of trial strategy and the risks of failing to plead to some of the charges.” Allowing alternate counsel to appear at hearings when the attorney of record could not appear was appropriate and substituting the attorney of record was necessary. Indeed, it would not have been preferable to leave Heavygun without counsel at these hearings when stand-in counsel could competently represent Heavygun’s interests. These actions were not unreasonable and did not render counsel’s representation deficient. We conclude that Heavygun’s claim that he was unreasonably represented by multiple attorneys is inaccurate in that Jensen and Spencer were his primary attorneys of record. Furthermore, the allowance of stand-in counsel for hearings did not constitute deficient performance or otherwise fall below an objective standard of reasonableness sufficient to establish the deficiency prong of Strickland. Thus, respecting his claim that he was denied effective assistance of counsel because he was represented by multiple attorneys, the District Court was correct in denying Heavygun’s petition for postconviction relief. B. Failure to investigate ¶17 Heavygun argues Spencer was ineffective in failing to investigate and present evidence of Wells’ history of violence, which was the crux of his justifiable use of force 10 defense. Heavygun argues that discovery identified several witnesses to Wells’ violence and that Spencer failed to investigate and present their testimony at trial. ¶18 Defense counsel has a duty to make reasonable investigations or make a reasonable decision that further investigation is not necessary. DeSchon, ¶ 23 (citation omitted). Evidence of a victim’s character is admissible when it relates to the reasonableness of force used by the accused. M. R. Evid. 405(b); State v. Sattler, 1998 MT 57, ¶ 44, 288 Mont. 79, 956 P.2d 54. Admissible character evidence of a victim is limited to what the defendant knew at the time he used force against the victim, and it is also required that the defendant show this knowledge led him to use the level of force he did. DeSchon, ¶ 24 (citations omitted). “When defense counsel is accused of failing to investigate adequately, the focus is on whether the information obtained from such an investigation would have produced a different result.” DeSchon, ¶ 23 (citation omitted). ¶19 Investigation into a victim’s history of violence is relevant to the extent it may help to establish the accused knew about the victim’s violent history at the time of the incident. In DeSchon, DeSchon claimed ineffective assistance of counsel based on his counsel’s failure to adequately investigate his victim’s violent past. DeSchon, ¶ 21. DeSchon argued that, under M. R. Evid. 404 and 405, he was allowed to introduce an unlimited amount of character evidence concerning the victim. DeSchon, ¶ 22. DeSchon argued that if his attorney had conducted an adequate investigation, counsel would have learned of DeSchon’s family members who knew of, and could have testified to, specific instances of the victim’s violent history. DeSchon, ¶ 22. However, this Court concluded 11 that, because there was no evidence DeSchon was aware of these incidents, the evidence would have been inadmissible. DeSchon, ¶ 25. We held that “trial counsel’s decision to limit their investigation into [the victim’s] violent past to what their client knew at the time of the stabbing did not fall below an objective standard of reasonableness because it was soundly based in Montana law.” DeSchon, ¶ 26. ¶20 The record does not support Heavygun’s claim that counsel failed to adequately investigate Wells’ history of violence. At trial, Heavygun testified that Wells sometimes had “a shiner or his knuckle would be all skinned up,” and he would brag that he had beaten somebody up. He testified that Wells appeared angry the day of their altercation and that he wanted Wells to leave his home. Heavygun also testified that a year before their argument, Wells and Heavygun had physically fought, but that it had been broken up and that Wells wanted to finish the fight. Critically, Heavygun testified during his direct examination that Wells’ prior violence was not on his mind when Wells allegedly grabbed a knife and came toward him. As Wells’ history of violence was not a factor in Heavygun’s use of deadly force, any further investigation into Wells’ history could only have led to inadmissible evidence. ¶21 Pursuant to the prejudice prong of the Strickland test, the focus is on whether the result would have been different if Spencer had conducted further investigation or presented additional testimony. Heavygun does not assert specifically who Spencer failed to interview or what their testimony may have been. He speculates generally that witnesses could be found to testify to Wells’ violent history; however, he testified that 12 Wells’ violent history was not on his mind when he stabbed Wells. No matter what other witnesses may have testified to, Heavygun admitted he was not thinking of Wells’ prior violence, which foreclosed his opportunity to use justifiable use of force as a defense. ¶22 Additionally, Heavygun argues that, without any other witnesses, he was the only one to testify about Wells’ history of and propensity toward violence and that the State used the lack of other witnesses to attack his credibility. However, even if Heavygun had presented additional witness testimony concerning Wells’ history of violence, the State’s argument—that Heavygun did not stab Wells in self-defense—made Wells’ violent history largely tangential. In its closing argument, the State asked the jurors to focus on the evidence that indicated Wells was not stabbed in self-defense; including that Heavygun disarmed Wells, by taking the knife away from Wells, before stabbing him. The evidence the State urged the jurors to focus on stressed that Heavygun was the aggressor at the time of the stabbing and it was no longer reasonable or necessary for him to use lethal force to defend himself against Wells. The State’s argument demonstrates that Heavygun did not suffer prejudice because of his counsel’s failure to present additional witnesses to Wells’ history of violence. ¶23 Finally, Heavygun argues that Spencer inadequately prepared him for trial by specifically advising Heavygun to avoid testifying that Wells’ history of violence was on his mind during the stabbing. This contention is simply not credible given the requirements for successfully presenting a defense of justifiable use of force and for the further reasons set forth below. In any event, Spencer’s alleged failure to investigate 13 could not have prejudiced Heavygun’s defense because Heavygun’s admission that Wells’ violent history was not a consideration in Heavygun’s stabbing of Wells completely undermined his defense of justifiable use of force. Furthermore, Heavygun was still able to testify to what he knew about Wells’ history of violence. We conclude, under the prejudice prong of Strickland, that any alleged failure of Spencer to further investigate Wells’ history of violence did not prejudice Heavygun in his defense and that Heavygun’s claim of ineffective assistance of counsel must fail. The District Court correctly concluded Heavygun did not receive ineffective assistance of counsel because of his counsel’s failure to investigate and properly denied him postconviction relief on this ground. C. Inadequate preparation ¶24 Heavygun argues his representation was ineffective because he was not adequately prepared to testify on his own behalf. Heavygun’s testimony was critical to his defense of justifiable use of force. Spencer’s failure to meaningfully prepare him to testify, Heavygun argues, led to testifying being a “difficult experience” for him and Heavygun accidentally undermining his own defense by testifying that Wells’ history of violence was not on his mind when he stabbed Wells. ¶25 “That a person who happens to be a lawyer is present at trial alongside the accused . . . is not enough to satisfy the constitutional command” of effective assistance of counsel. Strickland, 466 U.S. at 685, 104 S. Ct. at 2063. Counsel must act and prepare as a reasonable attorney would under prevailing professional norms. Strickland, 14 466 U.S. at 688, 104 S. Ct. at 2065. Counsel has an “overarching duty to advocate the defendant’s cause and the more particular duties to consult with the defendant on important decisions and to keep the defendant informed of important developments in the course of the prosecution.” Strickland, 466 U.S. at 688, 104 S. Ct. at 2065 (citation omitted). Under Strickland, Spencer must have prepared Heavygun to testify as a reasonable attorney would have. ¶26 In Riggs v. State, 2011 MT 239, 362 Mont. 140, 264 P.3d 693, Riggs petitioned for postconviction relief from his convictions of various crimes involving sexual abuse. Riggs, ¶¶ 2-3. Riggs argued he received ineffective assistance of counsel because his attorney failed to prepare him to testify. Riggs, ¶ 29. There, evidence showed Riggs’ attorney met with Riggs in person four or five times and spent at least twelve hours preparing Riggs to testify. Riggs, ¶ 32. We noted that Riggs did not explain what his attorney should have done, or how further preparation would have resulted in a different outcome at trial. Riggs, ¶ 32. We concluded that Riggs had failed to prove the prejudice prong of Strickland. Riggs, ¶ 33. ¶27 At the time Spencer represented Heavygun, Spencer had 30 years of experience practicing criminal law. Spencer met with Heavygun in person “at least 7 times” prior to trial. Each time, Spencer would ask Heavygun to recount the events of January 25, 2009, from beginning to end. Spencer found that Heavygun’s recitation of the events changed over time. Spencer communicated with Heavygun by telephone and by letters indicating the status of Heavygun’s case, updating him on Spencer’s investigation, and notifying 15 him of various issues and trial strategies. For example, the record shows that in the letters, Spencer discussed and explained relevant law to Heavygun and the wisdom of advancing a justifiable use of force defense versus an accident defense and the wisdom of revealing Heavygun was on probation and wearing an ankle bracelet at the time of the incident. Spencer advised Heavygun that it was ultimately Heavygun’s decision what defense to advance and whether to reveal he was on probation. Spencer estimated that he and other attorney’s from the OPD had spent at least 340 hours preparing Heavygun’s case for trial. ¶28 Spencer used the notes he took from his numerous meetings with Heavygun to prepare an outline of the testimony he expected Heavygun to give at trial. Spencer provided this outline to Heavygun one month prior to his trial so that Heavygun could review it and prepare to be questioned about the facts contained within it. Before trial began, Heavygun went through his testimony with Spencer using the outline Spencer had prepared. Spencer made minor alterations to the outline based on Heavygun’s responses during their preparation. At trial, Heavygun’s testimony was inconsistent with what he had indicated to Spencer during their preparation. For example, Heavygun admitted he was on probation, even though he and Spencer had discussed whether to do that and Heavygun had decided he would not reveal it in his testimony. Heavygun’s testimony also revealed he was not thinking about Wells’ history of violence during the incident and made it seem more like an accident. Spencer had explained to Heavygun that his testimony about Wells’ violent past, Wells’ very angry demeanor that night, Heavygun’s 16 resulting fear, and the previously unfinished fight between the two were “the key to getting the jury to find that you acted in self-defense.” ¶29 Heavygun generally claims he was not sufficiently prepared to testify; however, as in Riggs, he does not explain what Spencer should have done or how further preparation would have resulted in a different outcome at trial. Conversely, there is ample evidence that Spencer’s preparation of Heavygun for trial was extensive. Heavygun has thus failed to demonstrate that Spencer’s preparation of Heavygun for trial was deficient or unreasonable. Additionally, evidence shows Spencer’s attempts to prepare Heavygun to testify were undermined by Heavygun himself when, for instance, he changed his theory of defense by describing his actions as accidental and by admitting he was on probation. Based upon this record, we conclude that Spencer’s preparation of Heavygun for trial was not deficient and did not fall below an objective standard of reasonableness under the deficiency prong of Strickland. The District Court correctly denied Heavygun’s petition for postconviction relief on this ground. CONCLUSION ¶30 Heavygun has failed to establish that he received ineffective assistance of counsel. Because we find no ineffective assistance of counsel on Heavygun’s individual claims, there can be no cumulative error. ¶31 Affirmed. /S/ LAURIE McKINNON 17 We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ JIM RICE

March 22, 2016

5c128e9b-0f64-4238-b3dc-a498e1911d09

State v. Kant

2016 MT 42

DA 15-0403

Montana

Montana Supreme Court

DA 15-0403 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 42 STATE OF MONTANA, Plaintiff and Appellee, v. BRADLEY ROBERT KANT, Defendant and Appellant. APPEAL FROM: District Court of the Sixth Judicial District, In and For the County of Park, Cause No. DC 15-06 Honorable Brenda R. Gilbert, Presiding Judge COUNSEL OF RECORD: For Appellant: Karl Knuchel, Shena Roath, Karl Knuchel, P.C., Livingston, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy K Plubell, Assistant Attorney General, Helena, Montana Bruce Becker, Park County Attorney, Kathleen Carrick, Deputy Park County Attorney, Livingston, Montana Submitted on Briefs: January 6, 2016 Decided: February 23, 2016 Filed: __________________________________________ Clerk February 23 2016 Case Number: DA 15-0403 2 Justice Patricia Cotter delivered the Opinion of the Court.. ¶1 Bradley Kant was arrested and charged with three drug-related criminal charges, two of which were felonies. The charges were brought following a warranted search of Kant’s home and the seizure of 67 live marijuana plants and numerous miscellaneous paraphernalia. Kant appeals the Sixth Judicial District Court’s denial of his combined motion to suppress and dismiss. We affirm. ISSUE ¶2 A restatement of the issue on appeal is: ¶3 Did the District Court err in denying Kant’s motion to suppress and dismiss? FACTUAL AND PROCEDURAL BACKGROUND ¶4 During 2010 and 2011, Bradley Kant and his wife, Crystal, held registered caregiver’s licenses under the Montana Marijuana Act authorizing them to grow and distribute marijuana in accordance with then-applicable statutes and regulations. Upon expiration of their licenses, they failed to renew them but continued growing and distributing marijuana. ¶5 In 2012, Detective Tim Barnes, an acting detective for the Park County Sheriff’s Office and the Missouri River Task Force, executed a search warrant on a Livingston, Montana home and seized numerous marijuana plants and arrested one individual. This individual informed Barnes that he had gotten his original plants from his neighbor, Brad Kant, who was also growing numerous plants in his home. ¶6 On January 5, 2015, Barnes was informed by a separate confidential source (CS) that Crystal was growing multiple marijuana plants in her home and was delivering 3 marijuana to Vicki Jefferies’ home every Wednesday at approximately 7:00 p.m. The CS claimed that Jefferies in turn supplied Mark Harrison with marijuana. Mark Harrison was the CS’s roommate at that time. The CS provided Barnes with cellphone number, address, and vehicle information about Crystal, Jefferies, and Harrison. Additionally, the CS made statements against self-interest by admitting to smoking marijuana with Jefferies and trading prescription drugs to Jefferies for marijuana. ¶7 On January 14, 2015, Barnes submitted an application for a search warrant to conduct a search of the Kants’ residence. Among other things, Barnes asserted in the application that on Wednesday, January 7, 2015, at 6:43 p.m., a vehicle bearing a license plate registered to Kant was seen arriving at Jefferies’ home. A single unidentified occupant exited the vehicle and entered the home. Barnes also referenced the 2012 tip that Kant was then growing marijuana in his home. On January 9, Barnes interviewed a Livingston Police Officer who lives near Kant. The officer reported that during the hot summer months, a strong odor of fresh marijuana can be detected outside of the Kants’ home. The magistrate granted the warrant and on January 16, 2015, Barnes and another detective executed it. The Kants were cooperative and the detectives seized 67 plants, 12 pounds of prepared product, and multiple items of paraphernalia for growing and distributing. ¶8 On February 3, 2015, the Park County Deputy County Attorney filed an Information against Bradley and Crystal Kant asserting the following criminal offenses: criminal production or manufacture of dangerous drugs, a felony; criminal possession with intent to distribute dangerous drugs, a felony; and criminal possession of drug 4 paraphernalia, a misdemeanor. On February 17, 2015, Kant made his initial appearance and entered a plea of not guilty. On February 25, 2015, Kant moved to suppress all evidence seized during the search of his residence on the grounds that Barnes’ application for the warrant lacked sufficient facts to establish probable cause that the Kants’ home contained drugs or drug-related evidence. Kant sought dismissal of the action against him. The State opposed the motion. ¶9 On April 7, 2015, the District Court denied Kant’s suppression motion. On June 15, 2015, Kant entered into a plea agreement under which charges against Crystal were dismissed, and he pled guilty to criminal possession with intent to distribute dangerous drugs. Kant reserved the right to appeal the denial of his suppression motion, and the State agreed to dismiss the remaining charges. Kant was sentenced to 5 years to the Department of Corrections, all suspended, subject to a fine and other conditions. ¶10 Kant filed a timely appeal. STANDARD OF REVIEW ¶11 The grant or denial of a motion to dismiss in a criminal proceeding is a question of law which we review de novo to determine whether the district court’s conclusion of law is correct. State v. Willis, 2008 MT 293, ¶ 11, 345 Mont. 402, 192 P.3d 691. ¶12 We review a district court’s ruling on a motion to suppress to determine whether the court’s findings of fact are clearly erroneous and whether those findings were correctly applied as a matter of law. State v. Deshaw, 2012 MT 284, ¶ 13, 367 Mont. 218, 291 P.3d 561. 5 ¶13 This Court’s function as a reviewing court is to ensure that the magistrate or the lower court had a “substantial basis” to determine that probable cause existed. A magistrate’s determination that probable cause exists will be paid great deference and every reasonable inference possible will be drawn to support that determination. State v. Rinehart, 262 Mont. 204, 211, 864 P.2d 1219, 1223 (1993) (internal citations omitted); State v. Reesman, 2000 MT 243, ¶ 19, 301 Mont. 408, 10 P.3d 83 (overruled in part on other grounds by State v. Barnaby, 2006 MT 203, ¶ 42, 333 Mont. 220, 143 P.3d 809 (Cotter, Nelson, JJ., dissenting)). DISCUSSION ¶14 Did the District Court err in denying Kant’s combined motion to suppress and dismiss? ¶15 Kant presents several arguments on appeal. He argues that the District Court (1) misconstrued and misapplied State v. Reesman and State v. Barnaby; (2) erroneously ruled on the issue of staleness of certain evidence; (3) incorrectly accorded the magistrate too much inferential latitude; and (4) erroneously denied his motions to suppress and dismiss. ¶16 In Reesman, we addressed the sufficiency of the application for a search warrant employing the “totality of the circumstances” standard set forth in Illinois v. Gates, 462 U.S. 213, 103 S. Ct. 2317 (1983). We reviewed years of case law following the adoption of the Gates standard and observed that “certain indelible threshold rules have emerged.” Reesman, ¶ 27. Relying on these rules, we compiled a three-prong test to determine whether probable cause exists for the issuance of a search warrant: 6 (1) Was the informant anonymous or was the information provided hearsay? If so, independent corroboration of the information is required; (2) If the informant is not anonymous, was the information provided based upon personal observation of criminal activity or was the information hearsay? If hearsay, independent corroboration is required; and (3) If the information from a non-anonymous informant was gathered by personal observation of criminal activity, is the informant reliable? Reesman, ¶¶ 28-31. We further explained that under this standard, the court reviewing an application for a warrant “evaluates the facts asserted within the four corners of the application and makes a practical, common-sense decision as to whether there is a fair probability that incriminating items will be found in the place to which entry is sought.” Reesman, ¶ 24. ¶17 In Barnaby, the Court “deviate[d] slightly” from Reesman’s “strict rules requiring independent police corroboration” when it determined that the “critical question when evaluating probable cause is not whether an individual report meets the requirements of a particular test, but whether the application as a whole states sufficient facts to support a determination of probable cause.” Barnaby, ¶¶ 39-41. Kant argues that Barnaby wrongly relaxed the Reesman test. ¶18 Kant asserts that the District Court erroneously implied that Barnaby overruled Reesman. However, the Barnaby Court specifically admonished “police officers to corroborate independently information from sources of questionable reliability.” Barnaby, ¶ 42. Kant claims that the only information contained in the warrant application actually corroborated by Barnes was Crystal’s cellphone number and Jefferies’ and Harrison’s address and vehicle information. In other words, he complains 7 that the District Court’s application of Barnaby resulted in the court’s failure to properly analyze the warrant application contents under Reesman. ¶19 Additionally, Kant challenges the District Court’s acceptance of or reliance on stale information contained in the warrant application, i.e., the Livingston police officer’s comment that summer temperatures caused the smell of marijuana to be detectable near Kant’s home, and a statement by an arrestee in June 2012 that he had gotten his marijuana plants from Kant. Kant contends that this stale information was insufficient to corroborate other information contained in the application and should have been disregarded. ¶20 Kant also argues that the magistrate erroneously inferred the existence of certain facts from the application for the search warrant, when the application itself did not categorically assert these facts. Specifically, he maintains that the magistrate inferred from the application that: (1) the CS had “first-hand” knowledge of the Kants’ criminal activity based on personal observation; (2) it was Barnes himself who observed a single occupant exiting Kant’s truck at Jefferies’ house; and (3) the marijuana being supplied to Harrison by Jefferies was marijuana grown and distributed by the Kants. He maintains that the magistrate was required to rely solely on the information contained within the four corners of the search warrant application and supporting documentation in determining whether probable cause exists, but that she instead engaged in unsupported inferences to justify the issuance of the search warrant. ¶21 We first address Kant’s complaint that a neighbor’s June 2012 claim that he obtained marijuana plants from Kant, and Officer Leonard’s claims that during the hot 8 summer months, the scent of fresh marijuana was evident near the Kants’ home, were too stale to be considered. As we are not basing our decision on either of these reports, we need not address them further. ¶22 Reviewing the remaining information included in the application, we analyze it under Reesman and Barnaby. In his affidavit, Barnes stated that the confidential source who provided information about Crystal, Jefferies, and Harrison was “known to law enforcement.” As such, the CS was not anonymous, as addressed in the first prong of the Reesman test. Under the second prong, we ask whether the CS’s information was based on his or her personal observation of the criminal activity or on hearsay. The affidavit provided little information about the CS. We do not know how the CS was “known to law enforcement,” whether the CS had provided reliable information previously, or how the CS discovered the information supplied to Barnes. Under prong two of Reesman, without this information, Barnes was required to independently corroborate the information provided. ¶23 While some of the language of the application is less than clear, reasonable and acceptable extrapolations may nonetheless be made. After receiving all of the CS’s information, Barnes independently, through personal surveillance or review of law enforcement records, corroborated what the CS had told him, including the phone number, addresses, and vehicle registration information for Crystal, Jefferies, and Harrison. We note that while Barnes did not expressly identify himself in his affidavit as the person who observed Kant’s car at Jefferies’ residence on the expected day and time, he did not identify anyone else as the surveillant, unlike the remainder of his application 9 in which he specifically identified each source of the information obtained. Based upon Barnes’ statement that he conducted personal surveillance while corroborating the CS’s information, it is reasonable to conclude from a “practical and common-sense” review of the application that Barnes was the surveillant. His failure to affirmatively so state could have been an oversight or the result of poorly drafted language, but we conclude it is not fatal. Because we conclude that Barnes corroborated the CS’s information, we need not consider the remaining prongs of the Reesman test except to note that the CS’s admissions against interest further support a finding of CS reliability under the third prong of the test. For these reasons, we conclude that the application satisfies the Reesman test. Having determined that the warrant application satisfies the stricter Reesman test, we need not engage in further analysis under Barnaby. ¶24 As noted above, we are tasked with ensuring that the magistrate had a “substantial basis” to determine there was probable cause for the issuance of the warrant. We will pay the magistrate’s determination great deference and every reasonable inference will be drawn to support that determination. Rinehart, 262 Mont. at 211, 864 P.2d at 1223. Moreover, probable cause does not require facts sufficient to show criminal activity, but rather requires a determination that there exists a probability of criminal activity. Barnaby, ¶ 30. We conclude that the magistrate had a substantial basis for concluding there was a probability of criminal activity, and that the District Court did not err in denying Kant’s suppression motion. 10 CONCLUSION ¶25 For the foregoing reasons, we affirm the District Court’s denial of Kant’s motion to suppress and dismiss. /S/ PATRICIA COTTER We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ BETH BAKER Justice James Jeremiah Shea dissents. ¶26 I dissent from the majority’s conclusion that the search warrant application contained probable cause to search Kant’s residence. I would reverse the District Court’s order denying Kant’s motion to suppress evidence of the marijuana plants and drug paraphernalia found at Kant’s residence on the ground that the warrant application did not demonstrate sufficient independent corroboration of the CS’s tip. ¶27 As the majority recognizes, the CS’s tip falls under the second prong of the Reesman test for determining probable cause: the informant was not anonymous, and the information provided was hearsay, so independent corroboration was required. Opinion, ¶ 22. The majority concludes that the following facts constituted sufficient independent corroboration to warrant a finding of probable cause to search the Kant’s home: the CS provided Crystal’s phone number and Jefferies’ and Harrison’s addresses and vehicle information; and the CS stated that Crystal brings marijuana to Jefferies’ home every Wednesday at around 7:00 p.m., and Barnes observed an unidentified person emerge 11 from a vehicle registered to Kant enter Jefferies’ residence on a Wednesday at 6:43 pm.1 Opinion, ¶ 23. For the reasons discussed below, I respectfully disagree with my colleagues that this constitutes sufficient independent corroboration. ¶28 In State v. Griggs, 2001 MT 211, ¶ 40, 306 Mont. 366, 34 P.3d 101, we held: The focus of a court in reviewing [a search warrant application] that relies on corroboration of non-criminal activity is the degree of suspicion that attaches to particular types of corroborated non-criminal acts and whether the informant provides details which are not easily obtained. The purpose of the inquiry is to determine if the informer’s statements regarding non-incriminatory facts indicate familiarity with the implicated individual or the alleged criminal activity that would allow an inference that the informer’s allegations of criminal activity are reliable. (Emphasis in original). The warrant application in this case does not indicate how the CS obtained information that Crystal was growing marijuana at her residence or supplying marijuana to Jefferies. Only two of the facts corroborated by Barnes relate to the Kants: (1) Crystal’s cell phone number, and (2) the vehicle from which the unidentified person emerged at Jefferies’ house was registered to Kant. The application does not allege that the CS was “familiar” with the Kants or, for that matter, that the CS ever even interacted with the Kants. ¶29 “[C]orroboration must consist of more than merely innocent, public information.” State v. Tackitt, 2003 MT 81, ¶ 34, 315 Mont. 59, 67 P.3d 295 (citing Griggs, ¶ 50). Apparently, none of the majority has been party to a group text, but there are myriad innocent ways that the CS could have obtained Crystal’s cell phone number from any 1 Although the warrant application does not identify Barnes as being the surveillant of the unidentified person, I agree with the majority that “it is reasonable to conclude . . . that Barnes was the surveillant.” Opinion, ¶ 23. 12 number of people, including Jefferies, without ever interacting with Crystal in any manner, legal or illegal. The fact that the CS had Crystal’s cell phone number bears no weight on the CS’s reliability regarding a marijuana grow operation in Crystal’s home. Likewise, Barnes’ corroboration of Jefferies’ and Harrison’s addresses and vehicle information does not lend weight to the reliability of the CS’s tip that Crystal was growing and distributing marijuana. According to the CS, she and Harrison are roommates; so as far as that information goes, the corroboration consisted of the CS’s knowledge of her own address. More to the point, the information regarding Jefferies’ and Harrison’s addresses and vehicle information bears no relation to the Kants. ¶30 I also would not find the CS’s reliability bolstered by her admission to using drugs with Jefferies and trading prescription drugs with Jefferies in exchange for marijuana. While this might bolster the CS’s credibility if the goal was to search Jefferies’ home, none of the CS’s self-incriminating admissions were related to the crime at issue in this case or implicated the CS in any way into the investigation of the Kants. ¶31 I also must disagree with the majority’s conclusion that Barnes’ observation of an unidentified individual driving Kant’s vehicle to Jefferies’ house supports a finding of probable cause to search the Kant’s residence. The suspicion that results from police corroboration of otherwise innocent information “must reveal a pattern of human behavior associated with the alleged criminal activity, or a particular activity necessary to carry out the alleged criminal activity, or activities which, when viewed as a whole, are consistent with the alleged criminal activity.” Griggs, ¶ 46. According to the warrant application, the CS “stated that Crystal Kant brings marijuana to Vicki Jefferies every 13 Wednesday around 7:00 pm.” This was corroborated by Barnes’ observation that “on Wednesday, January 7, 2015, at 6:43 p.m., a vehicle bearing a license plate registered to Kant was seen arriving at Jefferies’ home[,]” and “[a] single unidentified occupant exited the vehicle and entered the home.” Opinion, ¶ 7. There is no indication that the individual emerging from the vehicle was Crystal, or even that the individual was female. Nothing in the warrant application indicates that the unidentified individual was carrying anything into the house, let alone a suspicious package. Nor does the application state how long the unidentified individual remained at Jefferies’ residence, whether he or she emerged empty-handed after entering with a package, or whether there were other individuals at Jefferies’ home at the time. ¶32 If the unidentified individual entered Jefferies’ home carrying a package of some sort and emerged empty-handed minutes later, this may fairly be considered corroboration of criminal activity. On the other hand, if the unidentified individual entered Jefferies’ home carrying a bottle of wine and a Bundt cake and emerged empty-handed two hours later, this is pretty solid corroboration of a previously scheduled dinner party. Therein lies the problem. Either of these scenarios is equally supported by the facts—or more precisely, lack thereof—asserted “within the four corners of the application.” Reesman, ¶ 24. ¶33 Furthermore, law enforcement corroboration of an informant’s tip “must independently test not only the veracity of the informant’s account itself . . . but also to some measured degree provide the reviewing magistrate with a factual indication that criminal activity has occurred and that contraband may be found in a particular place.” 14 Griggs, ¶ 28 (emphasis added). Accord Barnaby, ¶ 29 (“[T]he issuing 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 will be found in a particular place.”). As discussed above, the warrant application does not state how the CS obtained information that Crystal was growing marijuana at her house. The application does not indicate whether the CS even knew the location of the Kant’s residence. Moreover, the CS’s statements provided in the application were inconsistent as the CS both stated that Crystal was growing marijuana at her residence, which is located in Livingston, and that Crystal “was bringing marijuana to Livingston.” Finally, there was no independent verification of the location of the marijuana grow operation, or an independent indication that marijuana and drug paraphernalia would be found at the Kant’s residence.2 ¶34 The entire sum and substance of what the majority determines provides a substantial basis for concluding there was a probability of criminal activity is a CS who provided the following information: two home addresses, one of which was the CS’s own address, and neither of which was the subject of the search warrant; information regarding vehicles owned by two individuals, neither of whom were the Kants; Crystal’s cell phone number which could have been obtained in any number of innocent ways; and an allegation that Crystal delivered marijuana to Jefferies’ home every Wednesday at approximately 7:00 p.m., which was then corroborated by an observation of a male or 2 The majority does not base its decision on either of the reports that Kant challenged as too stale to be considered; therefore, my analysis does not consider them either. 15 female of unknown description, arriving at Jefferies’ home in a car registered to Kant near 7:00 p.m. on the Wednesday following the tip, but with no other facts regarding the circumstances of that single visit from which could be inferred criminal activity. Assuming this constitutes corroboration of the CS’s information, the question remains: Corroboration of what? As noted above, “corroboration must consist of more than merely innocent, public information.” Tackitt, ¶ 34 (citing Griggs, ¶ 50). ¶35 For the foregoing reasons, I dissent. /S/ JAMES JEREMIAH SHEA

February 23, 2016

8d9f5b60-01e2-4097-bae9-034341edcab2

Matter of E.O. and N.B. YINC

2016 MT 59N

DA 15-0413

Montana

Montana Supreme Court

DA 15-0413 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 59N IN THE MATTER OF: E.O. and N.B., Youths in Need of Care. APPEAL FROM: District Court of the Sixth Judicial District, In and For the County of Park, Cause Nos. DN 13-11 and DN 13-12 Honorable Brenda R. Gilbert, Presiding Judge COUNSEL OF RECORD: For Appellant: Paul 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 Bruce E. Becker, Park County Attorney, Livingston, Montana Submitted on Briefs: January 13, 2016 Decided: March 8, 2016 Filed: __________________________________________ Clerk March 8 2016 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 This case pertains to the parental rights of M.B. over her two children, E.O. (born in 2001) and N.B. (born in 2007). E.O. and N.B are Indian children with different fathers, and neither of the fathers is a party to the case. On November 13, 2013, the Department of Public Health and Human Services (“DPHHS”) filed petitions for emergency services, adjudication as youths in need of care, and temporary legal custody regarding E.O. and N.B. The petitions arose out of reports that M.B.’s consumption of alcohol and medications was interfering with her ability to care for the children. M.B. had a history with child protective services both in Montana and South Dakota prior to November 2013. ¶3 The District Court granted the petition for emergency protective services on November 14, 2013, and by February 20, 2015, the District Court had adjudicated the children as youths in need of care and granted DPHHS legal custody of the children for six months. DPHHS developed a treatment plan for the benefit of the children, which included a number of tasks for M.B. She stipulated to the plan and the District Court approved it on April 3, 2014. On September 24, 2014, DPHHS requested a six-month 3 extension of the temporary legal custody, to which M.B. agreed and the court granted on November 24, 2014. DPHHS then filed a petition to terminate M.B.’s parental rights on January 26, 2015. A hearing was conducted over the course of three days. The District Court made oral findings of fact and conclusions of law that terminated M.B.’s parental rights on June 2, 2015. A written order was issued on June 12, 2015; M.B. appeals from this order. We affirm. ¶4 The District Court found that M.B. had failed to complete several integral parts of the treatment plan. The treatment plan required M.B. to keep an adequate home for the children, stop using controlled substances and alcohol, and continue seeing a trauma therapist for treatment, all of which M.B. failed to successfully perform. M.B. argues that DPHHS failed to properly consider the root causes of her addiction and substance abuse issues. Consequently, M.B. posits that since DPHHS did not adequately provide her with assistance for the treatment of abuse and trauma, they failed to make reasonable efforts to reunite her with her children. ¶5 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. We review a district court’s findings of fact under the clearly erroneous standard. In the Matter of J.C., 2008 MT 127, ¶ 34, 343 Mont. 30, 183 P.3d 22. We review a district court’s application of the law for correctness. In re C.J.M., ¶ 10. ¶6 In cases involving the termination of parental rights over Indian children, there are federal obligations imposed on the State pursuant to the Indian Child Welfare Act (“ICWA”). 25 U.S.C. § 1912. Congress enacted ICWA to protect and preserve Indian 4 culture and curtail the high rate of non-tribal agencies’ breakup of Indian families. “ICWA sets minimum federal standards that must be followed strictly by state courts.” In re H.T., 2015 MT 41, ¶ 42, 378 Mont. 206, 343 P.3d 159 (quoting In re K.B., 2013 MT 133, ¶ 21, 370 Mont. 254, 301 P.3d 836); 25 U.S.C. § 1902. Under ICWA, the State must show that it made active efforts to “provide remedial services and rehabilitative programs designed to prevent the breakup of the Indian family and that these efforts have proved unsuccessful.” 25 U.S.C. § 1912(d). Additionally, ICWA requires the State to prove beyond a reasonable doubt that absent termination of parental rights, the children would suffer serious physical or emotional harm. 25 U.S.C. § 1912(f). We have previously held that ICWA obligates the State to take timely and affirmative steps to prevent the breakup of Indian families. In re J.S., 2014 MT 79, ¶ 25, 374 Mont. 329, 321 P.3d 103. ¶7 E.O. and N.B. are Indian children, and M.B. does not dispute that ICWA applies in this case. However, in her brief, she contends that in addition to the “active efforts” standard required by ICWA, the State must also follow a “reasonable efforts” standard required by state law. See § 41-3-423(1), MCA. However, in our previous cases concerning the termination of parental rights over Indian children, we have never combined federal and state standards. See e.g., In re H.T., ¶ 42; In re K.B., ¶ 21. Rather, we have held that ICWA outlines the correct procedure for handling the adjudication of parental rights involving Indian children. In re H.T., ¶ 42; In re K.B., ¶ 21. In this case, the District Court assessed whether DPHHS had made active efforts to keep the family 5 together, which is an application of the correct standard under federal law. Thus, we cannot agree that the District Court made an error in law. ¶8 We have construed “active efforts” to mean that timely steps be taken by the agency to prevent the breakup of Indian families. In re J.S., ¶ 25. ICWA also requires a heightened responsibility on the part of the agency seeking to protect the children. In re J.S., ¶ 25. The State cannot simply issue a treatment plan and wait for the parent to complete it. Under ICWA, there is a burden on the State to encourage and provide assistance to the parent to ensure the highest chance of successful completion of the treatment plan. In re A.N., 2005 MT 19, ¶ 23, 325 Mont. 379, 106 P.3d 556. Still, the parent must demonstrate a willingness to comply and to conform his or her lifestyle to the best interests of the child. In re A.N., ¶ 23. ¶9 M.B. argues that DPHHS’s efforts on her behalf were inadequate because her mental state in the aftermath of her rape in early 2013 needed to be addressed before she could treat her substance abuse issues. She also posits that the District Court erred in concluding that it was unlikely that M.B. would make significant progress on her treatment plan within a reasonable amount of time. However, the record shows that M.B. had substance abuse problems before 2013 and that she started using controlled substances in her teenage years. Consequently, tying her current substance abuse issues with the trauma she suffered in 2013 confuses the source of her addiction. Further, DPHHS referred M.B. to a licensed professional counselor for therapy weeks after E.O. and N.B. were adjudicated as youths in need of care. This demonstrates DPHHS’s timely action in attempting to keep the family together. The counselor began therapy at the end 6 of January 2014 and DPHHS provided these services to M.B. at its cost before ultimately incorporating it in the April 3, 2014 treatment plan. M.B. attended therapy for 16 sessions and was diagnosed with PTSD. The counsellor noted that M.B. had suffered abuse and violence as a youth and needed more treatment, but the counseling sessions stopped when M.B. moved from Livingston to Billings in July 2014. The counselor recommended continued treatment in Billings, and DPHHS would have paid for it. During this process DPHHS was actively monitoring M.B.’s development and treatment. After moving to Billings, M.B. did not independently seek further therapy. Nevertheless, DPHHS encouraged M.B. to enter chemical dependency programs at the Indian Health Board in Billings. Eventually, after providing financial assistance, rent money, encouragement, and careful monitoring, the DPHHS’s efforts to provide assistance were hampered by M.B.’s decision to move to Minneapolis. ¶10 Furthermore, an ICWA expert testified that DPHHS had met its “active efforts” burden in M.B.’s case. DPHHS made a concerted effort to encourage and facilitate M.B.’s need for trauma and addiction treatment. The Department did not simply write a plan and wait for M.B. to follow through. Rather, it provided active monitoring and logistical and financial assistance until M.B. moved to Minneapolis. DPHHS’s actions were both timely and affirmative, and they continued over the span of two years. In re J.S., ¶ 25. Confronted with that record, the District Court concluded that DPHHS had met its “active effort” burden as required under ICWA. Upon review we cannot agree that the District Court’s findings were clearly erroneous. 7 ¶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, this case presents a question controlled by settled law or by the clear application of applicable standards of review. ¶12 Affirmed. /S/ MIKE McGRATH We Concur: /S/ LAURIE McKINNON /S/ PATRICIA COTTER /S/ JIM RICE /S/ JAMES JEREMIAH SHEA

March 8, 2016

8e76729d-6844-4ce1-8cde-fbab339ac3d8

State v. Kant

2016 MT 42

DA 15-0403

Montana

Montana Supreme Court

DA 15-0403 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 42 STATE OF MONTANA, Plaintiff and Appellee, v. BRADLEY ROBERT KANT, Defendant and Appellant. APPEAL FROM: District Court of the Sixth Judicial District, In and For the County of Park, Cause No. DC 15-06 Honorable Brenda R. Gilbert, Presiding Judge COUNSEL OF RECORD: For Appellant: Karl Knuchel, Shena Roath, Karl Knuchel, P.C., Livingston, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy K Plubell, Assistant Attorney General, Helena, Montana Bruce Becker, Park County Attorney, Kathleen Carrick, Deputy Park County Attorney, Livingston, Montana Submitted on Briefs: January 6, 2016 Decided: February 23, 2016 Filed: __________________________________________ Clerk February 23 2016 Case Number: DA 15-0403 2 Justice Patricia Cotter delivered the Opinion of the Court.. ¶1 Bradley Kant was arrested and charged with three drug-related criminal charges, two of which were felonies. The charges were brought following a warranted search of Kant’s home and the seizure of 67 live marijuana plants and numerous miscellaneous paraphernalia. Kant appeals the Sixth Judicial District Court’s denial of his combined motion to suppress and dismiss. We affirm. ISSUE ¶2 A restatement of the issue on appeal is: ¶3 Did the District Court err in denying Kant’s motion to suppress and dismiss? FACTUAL AND PROCEDURAL BACKGROUND ¶4 During 2010 and 2011, Bradley Kant and his wife, Crystal, held registered caregiver’s licenses under the Montana Marijuana Act authorizing them to grow and distribute marijuana in accordance with then-applicable statutes and regulations. Upon expiration of their licenses, they failed to renew them but continued growing and distributing marijuana. ¶5 In 2012, Detective Tim Barnes, an acting detective for the Park County Sheriff’s Office and the Missouri River Task Force, executed a search warrant on a Livingston, Montana home and seized numerous marijuana plants and arrested one individual. This individual informed Barnes that he had gotten his original plants from his neighbor, Brad Kant, who was also growing numerous plants in his home. ¶6 On January 5, 2015, Barnes was informed by a separate confidential source (CS) that Crystal was growing multiple marijuana plants in her home and was delivering 3 marijuana to Vicki Jefferies’ home every Wednesday at approximately 7:00 p.m. The CS claimed that Jefferies in turn supplied Mark Harrison with marijuana. Mark Harrison was the CS’s roommate at that time. The CS provided Barnes with cellphone number, address, and vehicle information about Crystal, Jefferies, and Harrison. Additionally, the CS made statements against self-interest by admitting to smoking marijuana with Jefferies and trading prescription drugs to Jefferies for marijuana. ¶7 On January 14, 2015, Barnes submitted an application for a search warrant to conduct a search of the Kants’ residence. Among other things, Barnes asserted in the application that on Wednesday, January 7, 2015, at 6:43 p.m., a vehicle bearing a license plate registered to Kant was seen arriving at Jefferies’ home. A single unidentified occupant exited the vehicle and entered the home. Barnes also referenced the 2012 tip that Kant was then growing marijuana in his home. On January 9, Barnes interviewed a Livingston Police Officer who lives near Kant. The officer reported that during the hot summer months, a strong odor of fresh marijuana can be detected outside of the Kants’ home. The magistrate granted the warrant and on January 16, 2015, Barnes and another detective executed it. The Kants were cooperative and the detectives seized 67 plants, 12 pounds of prepared product, and multiple items of paraphernalia for growing and distributing. ¶8 On February 3, 2015, the Park County Deputy County Attorney filed an Information against Bradley and Crystal Kant asserting the following criminal offenses: criminal production or manufacture of dangerous drugs, a felony; criminal possession with intent to distribute dangerous drugs, a felony; and criminal possession of drug 4 paraphernalia, a misdemeanor. On February 17, 2015, Kant made his initial appearance and entered a plea of not guilty. On February 25, 2015, Kant moved to suppress all evidence seized during the search of his residence on the grounds that Barnes’ application for the warrant lacked sufficient facts to establish probable cause that the Kants’ home contained drugs or drug-related evidence. Kant sought dismissal of the action against him. The State opposed the motion. ¶9 On April 7, 2015, the District Court denied Kant’s suppression motion. On June 15, 2015, Kant entered into a plea agreement under which charges against Crystal were dismissed, and he pled guilty to criminal possession with intent to distribute dangerous drugs. Kant reserved the right to appeal the denial of his suppression motion, and the State agreed to dismiss the remaining charges. Kant was sentenced to 5 years to the Department of Corrections, all suspended, subject to a fine and other conditions. ¶10 Kant filed a timely appeal. STANDARD OF REVIEW ¶11 The grant or denial of a motion to dismiss in a criminal proceeding is a question of law which we review de novo to determine whether the district court’s conclusion of law is correct. State v. Willis, 2008 MT 293, ¶ 11, 345 Mont. 402, 192 P.3d 691. ¶12 We review a district court’s ruling on a motion to suppress to determine whether the court’s findings of fact are clearly erroneous and whether those findings were correctly applied as a matter of law. State v. Deshaw, 2012 MT 284, ¶ 13, 367 Mont. 218, 291 P.3d 561. 5 ¶13 This Court’s function as a reviewing court is to ensure that the magistrate or the lower court had a “substantial basis” to determine that probable cause existed. A magistrate’s determination that probable cause exists will be paid great deference and every reasonable inference possible will be drawn to support that determination. State v. Rinehart, 262 Mont. 204, 211, 864 P.2d 1219, 1223 (1993) (internal citations omitted); State v. Reesman, 2000 MT 243, ¶ 19, 301 Mont. 408, 10 P.3d 83 (overruled in part on other grounds by State v. Barnaby, 2006 MT 203, ¶ 42, 333 Mont. 220, 143 P.3d 809 (Cotter, Nelson, JJ., dissenting)). DISCUSSION ¶14 Did the District Court err in denying Kant’s combined motion to suppress and dismiss? ¶15 Kant presents several arguments on appeal. He argues that the District Court (1) misconstrued and misapplied State v. Reesman and State v. Barnaby; (2) erroneously ruled on the issue of staleness of certain evidence; (3) incorrectly accorded the magistrate too much inferential latitude; and (4) erroneously denied his motions to suppress and dismiss. ¶16 In Reesman, we addressed the sufficiency of the application for a search warrant employing the “totality of the circumstances” standard set forth in Illinois v. Gates, 462 U.S. 213, 103 S. Ct. 2317 (1983). We reviewed years of case law following the adoption of the Gates standard and observed that “certain indelible threshold rules have emerged.” Reesman, ¶ 27. Relying on these rules, we compiled a three-prong test to determine whether probable cause exists for the issuance of a search warrant: 6 (1) Was the informant anonymous or was the information provided hearsay? If so, independent corroboration of the information is required; (2) If the informant is not anonymous, was the information provided based upon personal observation of criminal activity or was the information hearsay? If hearsay, independent corroboration is required; and (3) If the information from a non-anonymous informant was gathered by personal observation of criminal activity, is the informant reliable? Reesman, ¶¶ 28-31. We further explained that under this standard, the court reviewing an application for a warrant “evaluates the facts asserted within the four corners of the application and makes a practical, common-sense decision as to whether there is a fair probability that incriminating items will be found in the place to which entry is sought.” Reesman, ¶ 24. ¶17 In Barnaby, the Court “deviate[d] slightly” from Reesman’s “strict rules requiring independent police corroboration” when it determined that the “critical question when evaluating probable cause is not whether an individual report meets the requirements of a particular test, but whether the application as a whole states sufficient facts to support a determination of probable cause.” Barnaby, ¶¶ 39-41. Kant argues that Barnaby wrongly relaxed the Reesman test. ¶18 Kant asserts that the District Court erroneously implied that Barnaby overruled Reesman. However, the Barnaby Court specifically admonished “police officers to corroborate independently information from sources of questionable reliability.” Barnaby, ¶ 42. Kant claims that the only information contained in the warrant application actually corroborated by Barnes was Crystal’s cellphone number and Jefferies’ and Harrison’s address and vehicle information. In other words, he complains 7 that the District Court’s application of Barnaby resulted in the court’s failure to properly analyze the warrant application contents under Reesman. ¶19 Additionally, Kant challenges the District Court’s acceptance of or reliance on stale information contained in the warrant application, i.e., the Livingston police officer’s comment that summer temperatures caused the smell of marijuana to be detectable near Kant’s home, and a statement by an arrestee in June 2012 that he had gotten his marijuana plants from Kant. Kant contends that this stale information was insufficient to corroborate other information contained in the application and should have been disregarded. ¶20 Kant also argues that the magistrate erroneously inferred the existence of certain facts from the application for the search warrant, when the application itself did not categorically assert these facts. Specifically, he maintains that the magistrate inferred from the application that: (1) the CS had “first-hand” knowledge of the Kants’ criminal activity based on personal observation; (2) it was Barnes himself who observed a single occupant exiting Kant’s truck at Jefferies’ house; and (3) the marijuana being supplied to Harrison by Jefferies was marijuana grown and distributed by the Kants. He maintains that the magistrate was required to rely solely on the information contained within the four corners of the search warrant application and supporting documentation in determining whether probable cause exists, but that she instead engaged in unsupported inferences to justify the issuance of the search warrant. ¶21 We first address Kant’s complaint that a neighbor’s June 2012 claim that he obtained marijuana plants from Kant, and Officer Leonard’s claims that during the hot 8 summer months, the scent of fresh marijuana was evident near the Kants’ home, were too stale to be considered. As we are not basing our decision on either of these reports, we need not address them further. ¶22 Reviewing the remaining information included in the application, we analyze it under Reesman and Barnaby. In his affidavit, Barnes stated that the confidential source who provided information about Crystal, Jefferies, and Harrison was “known to law enforcement.” As such, the CS was not anonymous, as addressed in the first prong of the Reesman test. Under the second prong, we ask whether the CS’s information was based on his or her personal observation of the criminal activity or on hearsay. The affidavit provided little information about the CS. We do not know how the CS was “known to law enforcement,” whether the CS had provided reliable information previously, or how the CS discovered the information supplied to Barnes. Under prong two of Reesman, without this information, Barnes was required to independently corroborate the information provided. ¶23 While some of the language of the application is less than clear, reasonable and acceptable extrapolations may nonetheless be made. After receiving all of the CS’s information, Barnes independently, through personal surveillance or review of law enforcement records, corroborated what the CS had told him, including the phone number, addresses, and vehicle registration information for Crystal, Jefferies, and Harrison. We note that while Barnes did not expressly identify himself in his affidavit as the person who observed Kant’s car at Jefferies’ residence on the expected day and time, he did not identify anyone else as the surveillant, unlike the remainder of his application 9 in which he specifically identified each source of the information obtained. Based upon Barnes’ statement that he conducted personal surveillance while corroborating the CS’s information, it is reasonable to conclude from a “practical and common-sense” review of the application that Barnes was the surveillant. His failure to affirmatively so state could have been an oversight or the result of poorly drafted language, but we conclude it is not fatal. Because we conclude that Barnes corroborated the CS’s information, we need not consider the remaining prongs of the Reesman test except to note that the CS’s admissions against interest further support a finding of CS reliability under the third prong of the test. For these reasons, we conclude that the application satisfies the Reesman test. Having determined that the warrant application satisfies the stricter Reesman test, we need not engage in further analysis under Barnaby. ¶24 As noted above, we are tasked with ensuring that the magistrate had a “substantial basis” to determine there was probable cause for the issuance of the warrant. We will pay the magistrate’s determination great deference and every reasonable inference will be drawn to support that determination. Rinehart, 262 Mont. at 211, 864 P.2d at 1223. Moreover, probable cause does not require facts sufficient to show criminal activity, but rather requires a determination that there exists a probability of criminal activity. Barnaby, ¶ 30. We conclude that the magistrate had a substantial basis for concluding there was a probability of criminal activity, and that the District Court did not err in denying Kant’s suppression motion. 10 CONCLUSION ¶25 For the foregoing reasons, we affirm the District Court’s denial of Kant’s motion to suppress and dismiss. /S/ PATRICIA COTTER We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ BETH BAKER Justice James Jeremiah Shea dissents. ¶26 I dissent from the majority’s conclusion that the search warrant application contained probable cause to search Kant’s residence. I would reverse the District Court’s order denying Kant’s motion to suppress evidence of the marijuana plants and drug paraphernalia found at Kant’s residence on the ground that the warrant application did not demonstrate sufficient independent corroboration of the CS’s tip. ¶27 As the majority recognizes, the CS’s tip falls under the second prong of the Reesman test for determining probable cause: the informant was not anonymous, and the information provided was hearsay, so independent corroboration was required. Opinion, ¶ 22. The majority concludes that the following facts constituted sufficient independent corroboration to warrant a finding of probable cause to search the Kants’ home: the CS provided Crystal’s phone number and Jefferies’ and Harrison’s addresses and vehicle information; and the CS stated that Crystal brings marijuana to Jefferies’ home every Wednesday at around 7:00 p.m., and Barnes observed an unidentified person emerge 11 from a vehicle registered to Kant enter Jefferies’ residence on a Wednesday at 6:43 pm.1 Opinion, ¶ 23. For the reasons discussed below, I respectfully disagree with my colleagues that this constitutes sufficient independent corroboration. ¶28 In State v. Griggs, 2001 MT 211, ¶ 40, 306 Mont. 366, 34 P.3d 101, we held: The focus of a court in reviewing [a search warrant application] that relies on corroboration of non-criminal activity is the degree of suspicion that attaches to particular types of corroborated non-criminal acts and whether the informant provides details which are not easily obtained. The purpose of the inquiry is to determine if the informer’s statements regarding non-incriminatory facts indicate familiarity with the implicated individual or the alleged criminal activity that would allow an inference that the informer’s allegations of criminal activity are reliable. (Emphasis in original). The warrant application in this case does not indicate how the CS obtained information that Crystal was growing marijuana at her residence or supplying marijuana to Jefferies. Only two of the facts corroborated by Barnes relate to the Kants: (1) Crystal’s cell phone number, and (2) the vehicle from which the unidentified person emerged at Jefferies’ house was registered to Kant. The application does not allege that the CS was “familiar” with the Kants or, for that matter, that the CS ever even interacted with the Kants. ¶29 “[C]orroboration must consist of more than merely innocent, public information.” State v. Tackitt, 2003 MT 81, ¶ 34, 315 Mont. 59, 67 P.3d 295 (citing Griggs, ¶ 50). Apparently, none of the majority has been party to a group text, but there are myriad innocent ways that the CS could have obtained Crystal’s cell phone number from any 1 Although the warrant application does not identify Barnes as being the surveillant of the unidentified person, I agree with the majority that “it is reasonable to conclude . . . that Barnes was the surveillant.” Opinion, ¶ 23. 12 number of people, including Jefferies, without ever interacting with Crystal in any manner, legal or illegal. The fact that the CS had Crystal’s cell phone number bears no weight on the CS’s reliability regarding a marijuana grow operation in Crystal’s home. Likewise, Barnes’ corroboration of Jefferies’ and Harrison’s addresses and vehicle information does not lend weight to the reliability of the CS’s tip that Crystal was growing and distributing marijuana. According to the CS, she and Harrison are roommates; so as far as that information goes, the corroboration consisted of the CS’s knowledge of her own address. More to the point, the information regarding Jefferies’ and Harrison’s addresses and vehicle information bears no relation to the Kants. ¶30 I also would not find the CS’s reliability bolstered by her admission to using drugs with Jefferies and trading prescription drugs with Jefferies in exchange for marijuana. While this might bolster the CS’s credibility if the goal was to search Jefferies’ home, none of the CS’s self-incriminating admissions were related to the crime at issue in this case or implicated the CS in any way into the investigation of the Kants. ¶31 I also must disagree with the majority’s conclusion that Barnes’ observation of an unidentified individual driving Kant’s vehicle to Jefferies’ house supports a finding of probable cause to search the Kants’ residence. The suspicion that results from police corroboration of otherwise innocent information “must reveal a pattern of human behavior associated with the alleged criminal activity, or a particular activity necessary to carry out the alleged criminal activity, or activities which, when viewed as a whole, are consistent with the alleged criminal activity.” Griggs, ¶ 46. According to the warrant application, the CS “stated that Crystal Kant brings marijuana to Vicki Jefferies every 13 Wednesday around 7:00 pm.” This was corroborated by Barnes’ observation that “on Wednesday, January 7, 2015, at 6:43 p.m., a vehicle bearing a license plate registered to Kant was seen arriving at Jefferies’ home[,]” and “[a] single unidentified occupant exited the vehicle and entered the home.” Opinion, ¶ 7. There is no indication that the individual emerging from the vehicle was Crystal, or even that the individual was female. Nothing in the warrant application indicates that the unidentified individual was carrying anything into the house, let alone a suspicious package. Nor does the application state how long the unidentified individual remained at Jefferies’ residence, whether he or she emerged empty-handed after entering with a package, or whether there were other individuals at Jefferies’ home at the time. ¶32 If the unidentified individual entered Jefferies’ home carrying a package of some sort and emerged empty-handed minutes later, this may fairly be considered corroboration of criminal activity. On the other hand, if the unidentified individual entered Jefferies’ home carrying a bottle of wine and a Bundt cake and emerged empty-handed two hours later, this is pretty solid corroboration of a previously scheduled dinner party. Therein lies the problem. Either of these scenarios is equally supported by the facts—or more precisely, lack thereof—asserted “within the four corners of the application.” Reesman, ¶ 24. ¶33 Furthermore, law enforcement corroboration of an informant’s tip “must independently test not only the veracity of the informant’s account itself . . . but also to some measured degree provide the reviewing magistrate with a factual indication that criminal activity has occurred and that contraband may be found in a particular place.” 14 Griggs, ¶ 28 (emphasis added). Accord Barnaby, ¶ 29 (“[T]he issuing 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 will be found in a particular place.”). As discussed above, the warrant application does not state how the CS obtained information that Crystal was growing marijuana at her house. The application does not indicate whether the CS even knew the location of the Kants’ residence. Moreover, the CS’s statements provided in the application were inconsistent as the CS both stated that Crystal was growing marijuana at her residence, which is located in Livingston, and that Crystal “was bringing marijuana to Livingston.” Finally, there was no independent verification of the location of the marijuana grow operation, or an independent indication that marijuana and drug paraphernalia would be found at the Kants’ residence.2 ¶34 The entire sum and substance of what the majority determines provides a substantial basis for concluding there was a probability of criminal activity is a CS who provided the following information: two home addresses, one of which was the CS’s own address, and neither of which was the subject of the search warrant; information regarding vehicles owned by two individuals, neither of whom were the Kants; Crystal’s cell phone number which could have been obtained in any number of innocent ways; and an allegation that Crystal delivered marijuana to Jefferies’ home every Wednesday at approximately 7:00 p.m., which was then corroborated by an observation of a male or 2 The majority does not base its decision on either of the reports that Kant challenged as too stale to be considered; therefore, my analysis does not consider them either. 15 female of unknown description, arriving at Jefferies’ home in a car registered to Kant near 7:00 p.m. on the Wednesday following the tip, but with no other facts regarding the circumstances of that single visit from which could be inferred criminal activity. Assuming this constitutes corroboration of the CS’s information, the question remains: Corroboration of what? As noted above, “corroboration must consist of more than merely innocent, public information.” Tackitt, ¶ 34 (citing Griggs, ¶ 50). ¶35 For the foregoing reasons, I dissent. /S/ JAMES JEREMIAH SHEA

February 23, 2016

7107cdb6-a828-494e-9a28-df80b5734f69

In re K.B.

2016 MT 73

DA 15-0549

Montana

Montana Supreme Court

DA 15-0549 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 73 IN THE MATTER OF: K.B., A Youth in Need of Care. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. DDN 2012-73 Honorable James P. Reynolds, Presiding Judge COUNSEL OF RECORD: For Appellant: Robin Meguire, Attorney at Law, Great Falls, Montana (Attorney for J.R.B./Father/Appellant) Mark Alan Mackin, Attorney at Law, Helena, Montana (Attorney for K.B.) For Appellee: Timothy C. Fox, Montana Attorney General, Micheal S. Wellenstein, Assistant Attorney General, Helena, Montana Leo Gallagher, Lewis and Clark County Attorney, Ann Penner, Deputy County Attorney, Helena, Montana Submitted on Briefs: February 24, 2016 Decided: March 29, 2016 Filed: __________________________________________ Clerk March 29 2016 Case Number: DA 15-0549 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 K.B.’s father, J.B. (Father), appeals from an order entered by the First Judicial District Court, Lewis and Clark County, terminating his parental rights. We affirm. ¶2 Father presents the following issues for review: 1. Whether the District Court lacked subject matter jurisdiction over K.B.’s abuse and neglect proceeding. 2. Whether Father received ineffective assistance of counsel. FACTUAL AND PROCEDURAL BACKGROUND ¶3 K.B. was born in 2007 and is the daughter of Father and M.H. (Mother). K.B. was living with Mother when she was removed from Mother’s care by the Department of Public Health and Human Services (the Department) on November 26, 2012, due to concerns regarding Mother’s ability to care for her and protect her from domestic violence. K.B. was placed in kinship foster care with her Aunt and Uncle, where she has remained. K.B.’s younger sister, T.H., also lives with Aunt and Uncle. K.B. was adjudicated a Youth in Need of Care on May 30, 2013. The Department drafted a treatment plan for Father. Father requested the name of the treatment plan be changed. The typewritten words “Treatment Plan” were stricken from the title with a pen. Above “Treatment Plan” the handwritten word “Checklist” was inserted. Otherwise, the substance of the document remained unchanged. The District Court referred to the document afterwards as the “non-offending parent checklist.” Father signed the document on June 25, 2013, and the District Court approved it. Summarized, its tasks required Father to: 1) remain law abiding; 2) address his substance abuse issues; 3) 3 establish a safe, stable home and obtain employment; 4) maintain visitation with K.B.; and 5) remain in contact with the Department. ¶4 The Department filed petitions to terminate Mother and Father’s rights on May 12, and September 29, 2014, respectively. On April 15, 2015, the District Court held a termination hearing. At the hearing, Mother consented to termination and relinquished her parental rights to K.B. Father opposed his termination, but did not argue he should be given custody of K.B. Instead, he asked the District Court for an additional six months to accomplish the tasks on his “checklist” before he could become a placement option for K.B. ¶5 At the termination hearing, evidence presented to the District Court showed that K.B. flourished while living with Aunt and Uncle during the 29 months preceding the termination hearing. At the time of the hearing, Aunt and Uncle wished to adopt K.B. and T.H. K.B.’s school principal testified that K.B.’s behavior and demeanor had drastically improved since being placed with Aunt and Uncle, who are very active in parenting her. K.B.’s kindergarten and first grade teacher testified that K.B. was initially a very angry and isolated student. Later, she testified, K.B. became a pleasant, eager to please student with vastly improved behavior. K.B.’s current, second grade teacher testified that she had not observed some of K.B.’s initial behavioral issues that others had witnessed and reported to her. She testified K.B. likes to be in control, is a pleasant student, and she enjoys having K.B. in her class. K.B.’s Court Appointed Special Advocate testified that after many attempts, he was never able to get in contact with Father and that Father’s termination was in K.B.’s best interests because of her need for 4 permanency. K.B.’s therapist testified that she had worked with K.B. since the beginning of 2013. In that time, she testified, K.B. had made substantial progress in her behavior and self-confidence. ¶6 Michelle Silverthorne (Silverthorne), Child Protection Specialist, has been K.B.’s case worker since her removal. At the termination hearing, Silverthorne testified that she initially looked to Father as the “non-offending” parent for K.B.’s placement, as is customary when a child is removed from one custodial parent. However, she did not think Father was an appropriate or safe choice because he admitted to her that he could not financially support K.B. or provide her a place to live. Also, Father was on probation as a result of an earlier conviction of partner-family member assault. When asked about the Department’s policy with regard to a treatment plan for a non-offending parent, Silverthorne responded: Well, if the non-offending parent is unable to take care of the child, then we still go forward with trying to get the child adjudicated as a Youth in Need of Care and then developing a treatment plan to get that parent to the point where they can parent the child full time. She testified that it was under this policy that she proceeded in developing a treatment plan for Father. ¶7 As of the termination hearing, Silverthorne testified that Father’s treatment plan had not been successful. Father had been incarcerated recently, had stopped visiting K.B., and failed to remain in contact with Silverthorne. Father’s visitation rights were suspended because reports alleged, and K.B. confirmed, that he had left K.B., age six, at a carousel alone while he went to pick up his girlfriend. Also, another report 5 alleged Father was abusing methamphetamines. During the summer of 2014, Silverthorne and Father’s attorney each notified Father that his unsupervised visits would be suspended until he underwent urinalysis testing. At the time of the termination hearing, Father had not had contact with K.B. since mid-2014, except for one visit made while K.B. was in the hospital recovering from a tonsillectomy. Silverthorne testified that Father had not called or visited her office to see why his visitation had been suspended, although he knew her phone number, which had not changed, and knew where her office was located. Silverthorne testified that as a result of not being in contact with Father, she had no way to verify whether he had established safe, stable housing or employment. Silverthorne testified that she did not believe Father would be able to turn his situation around in a reasonable amount of time to adequately care for K.B. Silverthorne testified that K.B. is well-bonded and feels safe with Aunt and Uncle. Silverthorne testified that termination of Father’s rights was in K.B.’s best interests, especially her need for permanency. ¶8 Father testified at the termination hearing and explained he was not allowed to see K.B. from August 2014 until February 2015 and he did not know why. He testified he had been told to call Silverthorne to find out and had tried to on several occasions, but had failed to reach her or get a call back from her. Father testified he had no issue taking a drug test, as he had been tested regularly while on probation. He also testified that he did not believe he should be required to undergo drug testing. Father testified he was employed part-time and was planning on moving to Butte where he believed he would be offered a full-time job. 6 ¶9 At the end of the termination hearing, the District Court terminated Father’s rights from the bench. On July 23, 2015, the District Court issued its findings of fact, conclusions of law, and order terminating Father’s parental rights pursuant to § 41-3-609(1)(f), MCA. In its order, the District Court concluded that clear and convincing evidence established that a treatment plan for Father had been approved, but had not been successful and that the condition rendering Father unfit was unlikely to change within a reasonable amount of time. The District Court also concluded that clear and convincing evidence established that K.B.’s best interests would be served by terminating Father’s parental rights and awarding the Department permanent legal custody with the lawful authority to consent to her adoption. Father appeals. STANDARD OF REVIEW ¶10 Whether a district court possesses subject matter jurisdiction is a question of law, which we review de novo. In re B.W.S., 2014 MT 198, ¶ 10, 376 Mont. 43, 330 P.3d 467 (citation omitted). This Court exercises plenary review of whether a parent was denied effective assistance of counsel. In re B.M., 2010 MT 114, ¶ 22, 356 Mont. 327, 233 P.3d 338; In re J.J.L., 2010 MT 4, ¶ 14, 355 Mont. 23, 233 P.3d 921. DISCUSSION ¶11 1. Whether the District Court lacked subject matter jurisdiction over K.B.’s abuse and neglect proceeding. ¶12 Father argues the District Court lacked subject matter jurisdiction to terminate his parental rights because the court never approved a treatment plan for him under § 41-3-609(1)(f), MCA, and because he was a “non-offending” parent. “Subject-matter 7 jurisdiction is a court’s fundamental authority to hear and adjudicate a particular class of cases or proceedings.” Lorang v. Fortis Ins. Co., 2008 MT 252, ¶ 57, 345 Mont. 12, 192 P.3d 186 (citations omitted). “Subject matter jurisdiction of the district courts is established by the Montana Constitution.” Lorang, ¶ 56 (internal quotations and citation omitted). Particularly, Article VII, Section 4(1) provides that district courts have “original jurisdiction in . . . all civil matters.” Therefore, a district court’s subject matter jurisdiction is extremely broad and covers “all civil matters,” including child abuse and neglect proceedings. A court’s subject matter jurisdiction is not affected by a court’s failure to follow statutory requirements. See B.W.S., ¶ 13 (citations omitted). ¶13 Father argues the District Court lacked subject matter jurisdiction to terminate his parental rights because his “checklist” did not satisfy the requirements of § 41-3-609(1)(f), MCA. However, conformity with the statute is unrelated to a court’s authority to hear child abuse and neglect cases. Trial courts have subject matter jurisdiction over child abuse and neglect proceedings because they are “civil matters.” ¶14 Subject matter jurisdiction over child abuse and neglect proceedings is conferred to the district courts by the Montana Constitution, not by statute. Even if the court failed to follow § 41-3-609(1)(f), MCA, it would nevertheless still have subject matter jurisdiction over the termination proceeding affecting K.B. Pursuant to § 41-3-103(1), MCA, “a person is subject to a proceeding under [the child abuse and neglect statutes] and the district court has jurisdiction over: (a) a youth who is within the state of Montana for any purpose;” and “(d) a youth or a youth’s parent . . . who resides in Montana . . . .” Therefore, there is no requirement that a parent be an “offending” parent before a court 8 may make decisions regarding the best interests of a child suspected of having been abused or neglected. Jurisdiction is conferred by virtue of the youth being within the state of Montana, and that jurisdiction extends to a parent pursuant to the provisions of § 41-3-103(1), MCA. The District Court correctly concluded it had subject matter jurisdiction over K.B.’s child abuse and neglect proceeding and authority to terminate Father’s parental rights. ¶15 2. Whether Father received ineffective assistance of counsel. ¶16 “[P]arents have a due process right to effective assistance of counsel in termination proceedings.” In re A.S., 2004 MT 62, ¶ 20, 320 Mont. 268, 87 P.3d 408. Whether assistance was effective requires review of counsel’s training, experience, and advocacy. B.M., ¶ 22 (citation omitted). Ineffective assistance of counsel requires reversal only if the parent suffered prejudice. B.M., ¶ 22 (citation omitted). ¶17 Father argues he received ineffective assistance of counsel because of his counsel’s inadequate advocacy of Father’s interests. Specifically, Father believes his counsel rendered ineffective assistance when he failed to object: (1) to K.B. being adjudicated a Youth in Need of Care; (2) to the District Court’s characterization of his “checklist” as a treatment plan; and (3) to the District Court exercising subject matter jurisdiction over K.B.’s proceeding. We address each contention in turn. A. Youth in Need of Care Adjudication ¶18 On May 30, 2013, Father stipulated to the District Court’s adjudication of K.B. as being a Youth in Need of Care. A Youth in Need of care is a youth who has been determined to be, or have been, abused, neglected, or abandoned. Section 41-3-102(34), 9 MCA. In his stipulation, Father admitted “that the State could prove by a preponderance of evidence that the youth is abused and neglected within the meaning of Mont. Code Ann. § 41-3-102 based upon the facts contained in the Affidavit of the Child Protection Specialist.” Child Protection Specialist Michelle Young filed an affidavit that included evidence that Mother was subjecting K.B. to domestic violence and drug abuse, by Mother’s use of methamphetamines. The affidavit alleged both of Mother’s children had fathers who were convicted of partner-family member assault while living with K.B. The affidavit alleged K.B. then “age 5, has had significant exposure to domestic violence her entire young life” and that both K.B.’s father and her sister’s father had received at least three charges of partner-family assault, for allegedly assaulting Mother. The affidavit alleged that K.B. had witnessed Mother and T.H., then age three, being beaten, hit, and kicked. The affidavit further stated that T.H.’s father, while incarcerated, accused Mother of physically abusing T.H. by kicking her in the face. ¶19 Had Father not stipulated and insisted on a contested hearing, the State was ready, willing, and able to present testimony regarding these allegations. The evidence was substantial and would have established by a preponderance that K.B. was a Youth in Need of Care. Thus, any objection or insistence by Father’s counsel to have a contested hearing, even assuming for the sake of argument that it constituted deficient performance by counsel, could not have prejudiced Father. Moreover, Father misunderstands the focus of child abuse and neglect proceedings—the child. He mistakenly argues that K.B. could only have been adjudicated a Youth in Need of Care “as to” Mother and not “as to” him because K.B. was living with Mother when she was removed. A child is not 10 determined to be a Youth in Need of Care “as to” anyone. The child is adjudicated a Youth in Need of Care because he or she is being, or have been, abused, neglected, or abandoned. The District Court had sufficient evidence to adjudicate K.B. a Youth in Need of Care. Father cannot show he suffered prejudice as a result of his counsel’s failure to object to that determination. B. “Checklist” or “Treatment Plan” ¶20 On June 25, 2013, Father signed and the District Court approved a document prepared by the Department as a treatment plan. Father asked that the document be renamed. The words “Treatment Plan” were marked through and replaced with the word “Checklist.” On appeal, Father contends his counsel was ineffective in failing to object to the District Court’s characterization of this document as a treatment plan. He argues that retitling the document changed its substance. We find Father’s argument unpersuasive. ¶21 If a child is found to be a Youth in Need of Care, the court may “order the department to evaluate the noncustodial parent as a possible caretaker.” Section 41-3-438(3)(b), MCA. The court may order a treatment plan for the child’s parent if “the court has made an adjudication under 41-3-437 that the child is a youth in need of care.” Section 41-3-443(1)(c), MCA. A treatment plan is a “written agreement between the department and the parent or guardian . . . that includes action that must be taken to resolve the condition or conduct of the parent or guardian that resulted in the need for protective services for the child.” Section 41-3-102(30), MCA. 11 ¶22 Here, the statute authorized the Department, following the court’s determination that K.B. was a Youth in Need of Care, to evaluate Father as a noncustodial parent and possible caretaker for K.B. Similarly, the District Court was authorized by statute to order Father to comply with a treatment plan because K.B. was adjudicated a Youth in Need of Care. The document in question was prepared for Father as a treatment plan. It specified actions Father must take to resolve the need for protective services to be involved in K.B.’s life, and for Father to become an appropriate placement option for K.B. The document, by whatever name Father chooses to subscribe to it, constituted a treatment plan as defined by statute. Father has not shown he suffered prejudice as a result of his counsel’s failure to object to the District Court’s characterization of the so-called “non-offending parent checklist” as a treatment plan because the document constituted a treatment plan. As such, the document satisfied one of the requirements of § 41-3-609(1)(f), MCA, for termination of Father’s rights. C. Subject Matter Jurisdiction ¶23 Father cannot show he suffered prejudice as a result of his counsel’s failure to object to the District Court’s subject matter jurisdiction because, as shown above, the District Court had subject matter jurisdiction over K.B.’s abuse and neglect proceeding. CONCLUSION ¶24 The District Court appropriately exercised subject matter jurisdiction over K.B.’s abuse and neglect proceeding. Father cannot demonstrate he received ineffective assistance of counsel. 12 ¶25 Affirmed. /S/ LAURIE McKINNON We Concur: /S/ MIKE McGRATH /S/ JAMES JEREMIAH SHEA /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JIM RICE

March 29, 2016

b7f0fb84-0d80-419a-8151-ce5092e871ed

State v. Strizich

2016 MT 36N

DA 14-0164

Montana

Montana Supreme Court

DA 14-0164 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 36N STATE OF MONTANA, Plaintiff and Appellee, v. JORY STRIZICH, Defendant and Appellant. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. CDC-12-436 Honorable Kenneth R. Neill, Presiding Judge COUNSEL OF RECORD: For Appellant: Koan Mercer, Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Katie F. Schulz, Assistant Attorney General, Helena, Montana John W. Parker, Cascade County Attorney, Amanda Lofink, Deputy County Attorney, Great Falls, Montana Submitted on Briefs: October 21, 2015 Decided: February 16, 2016 Filed: __________________________________________ Clerk February 16 2016 Case Number: DA 14-0164 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 Jory Strizich (“Strizich”) appeals from the denial of his motion to dismiss the case under the Double Jeopardy Clause of both the U.S. and Montana Constitutions. We affirm. ¶3 On October 19, 2012, Strizich was charged with felony theft; two counts of misdemeanor theft; careless driving; driving without insurance; driving a vehicle with fictitious plates; and failure to give notice of an accident. These charges arise from allegations that in June 2012 Strizich stole a truck from a car dealer, stole gasoline from a gas station in Vaughn and another in Ulm, and then fled the scene with another male after crashing the truck. ¶4 Strizich raised several defenses and pre-trial motions at the omnibus hearing on January 9, 2013, and the jury trial began on September 9, 2013. At trial, the State introduced evidence in the form of testimony from an employee of the gas station in Ulm from which the gas was stolen. The State had shown the witness a photo lineup that included Strizich, and counsel for the State admitted that they had not disclosed that event to the defense. The defense objected and moved for a mistrial. The objection was 3 sustained, but the motion was denied. After cross-examination of the witness and on the State’s re-direct, the witness was asked to make an in-court identification of the person who stole the gas. The witness identified Strizich. The defense renewed its objection and moved for a mistrial. After oral arguments on the motion, the District Court granted the motion. A new trial was set for January 13, 2014, and on January 6, 2014, Strizich filed a motion to dismiss the case under the Double Jeopardy clause. ¶5 During a hearing on January 9, 2014, the court heard arguments from counsel regarding the motion to dismiss and the scope of testimony that the State could elicit from the gas station employee. Counsel for the State admitted that it had made a mistake and submitted that it had no nefarious intent in introducing inadmissible evidence. Further, the State argued that based on the limitations placed on the witness’s testimony, there could be no unfair advantage. Defense counsel argued that the State had committed a Brady violation and that the State had gained an advantage in learning the defense strategy and hearing the attorney’s cross-examination questions and opening statement. ¶6 The District Court denied the motion to dismiss pursuant to State v. Mallak, 2005 MT 49, 326 Mont. 165, 109 P.3d 209 and City of Billings v. Mouat, 2008 MT 66, 342 Mont. 79, 180 P.3d 1121. The District Court found that the prosecution had made a mistake and that introduction of the inadmissible evidence was not a ploy designed to gain more time to bolster the State’s case. The court also held that although the State had gained an advantage in seeing the defendant’s presentation of the case, the advantage was not unfair because the defense likewise was able to preview the State’s case. 4 ¶7 Strizich’s jury trial took place on January 13-14, 2014, and he was found guilty of three misdemeanors. Strizich then appealed the denial of his motion to dismiss under the Double Jeopardy Clause. ¶8 A district court’s denial of a motion to dismiss criminal charges under the Double Jeopardy Clause is a question of law which we review for correctness. State v. Cates, 2009 MT 94, ¶ 22, 350 Mont. 38, 204 P.3d 1224; Mallak, ¶ 14. ¶9 Strizich contends on appeal that the District Court erred in not granting the motion to dismiss. Under both the Montana and U.S. Constitutions, defendants are protected by the Double Jeopardy Clause insofar as no “person [shall] be subject [to] the same offence to be twice put in jeopardy of life or limb.” U.S. Const. amend. V; see also Mont. Const. art. II § 25. Still, the right not to be tried twice for the same offense is not an absolute right. City of Helena v. Whittinghill, 2009 MT 343, ¶ 15, 353 Mont. 131, 219 P.3d 1244. In cases in which the defendant successfully moves for a mistrial, “double jeopardy does not bar retrial on the same charge.” Whittinghill, ¶ 14 (citing § 46-11-503(2), MCA; Cates, ¶ 27; Mallak, ¶ 18). ¶10 However, there is a narrow exception to this rule if the prosecution, “through intentional misconduct, goad[ed] the defendant into moving for a mistrial.” Whittinghill, ¶ 14. To establish the applicability of this exception, there must be a finding of “Machiavellian” design and a vision of future moves worthy of a chess master: first the prosecutor’s perception that the case has gone amiss in some unanticipated way, coupled with an assessment that if only the trial could start over things would improve; then, the decision to goad defense counsel into naively doing the prosecutor’s concealed bidding by moving for the mistrial that the prosecutor secretly desires; followed by some feigned but half-hearted 5 opposition to the defense counsel’s motion; all the while hoping that the trial court thereby has been successfully manipulated into granting it. Mallak, ¶ 20 (internal citations omitted). Additionally, there must exist “objective facts and circumstances” to demonstrate the prosecution’s nefarious intention in compelling a motion for mistrial from the defense. Whittinghill, ¶ 14 (quoting Oregon v. Kennedy, 456 U.S. 667, 675, 102 S. Ct. 2083, 2089, (1982)). ¶11 In this case, the District Court applied the proper legal standard in denying the motion to dismiss on double jeopardy grounds. Strizich seeks the application of the exception outlined in Whittinghill and Mallak on appeal. However, Strizich does not present objective facts suggestive of the level of prosecutorial misconduct we have described in previous cases. Strizich dedicates little space in his appellate briefs, unsubstantiated by any other evidence, to demonstrate the weakness of the prosecution’s case and their motivation to “goad” the defense into making a motion for a mistrial. ¶12 Thus, considering the District Court’s application of the proper legal standard and the scant evidence of prosecutorial misconduct, we cannot agree that the District Court erred in denying the motion to dismiss pursuant to the Double Jeopardy Clause. ¶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. ¶14 Affirmed. 6 /S/ MIKE McGRATH We Concur: /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA

February 16, 2016

6889f4f7-8ac4-4e7a-a717-d44e7c53dfb2

State v. Awbery

2016 MT 48

DA 14-0255

Montana

Montana Supreme Court

DA 14-0255 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 48 STATE OF MONTANA, Plaintiff and Appellee, v. CHRISTOPHER MICHAEL AWBERY, Defendant and Appellant. APPEAL FROM: District Court of the Tenth Judicial District, In and For the County of Fergus, Cause No. DC-2013-19 Honorable Jon A. Oldenburg, Presiding Judge COUNSEL OF RECORD: For Appellant: Jennifer A. Hurley, Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Mardell Ployhar, Assistant Attorney General, Helena, Montana Thomas P. Meissner, Fergus County Attorney, Jean A. Adams, Deputy County Attorney, Lewistown, Montana Submitted on Briefs: December 16, 2015 Decided: March 1, 2016 Filed: __________________________________________ Clerk March 1 2016 Case Number: DA 14-0255 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Christopher Michael Awbery appeals from his October 2013 conviction on six felony charges in the Montana Tenth Judicial District Court. We affirm. ¶2 We restate the issues on appeal as follows: Issue One: Did the District Court properly exclude evidence that some of the victims suffered prior sexual abuse by others? Issue Two: Is Awbery entitled to a new trial based upon prosecutorial misconduct? Issue Three: Is Awbery entitled to a new trial based upon the cumulative effect of the alleged errors? FACTUAL AND PROCEDURAL BACKGROUND ¶3 The State charged Awbery with two counts of incest against his daughter A.A. when she was age 12 or younger; with sexual assault and sexual intercourse without consent against A.A.’s half-sister J.G. when she was age 16 or younger; with sexual intercourse without consent against I.A. when she was age 12 or younger; and with sexual assault against N.H. when she was age 16 or younger. All of the charges and the convictions were felonies. ¶4 Each of the victims testified at trial, describing how they were sexually abused by Awbery. His daughter A.A. testified that she awoke with Awbery on top of her, and that he dragged her by her hair to another room and raped her. She described other incidents of rape; of Awbery penetrating her with a vibrator; and of Awbery touching her vaginal area with his fingers in a “game” that he called “check the oil.” She testified that Awbery threatened to hurt people close to her if she told anyone what he had done. 3 ¶5 A.A.’s half-sister J.G. testified that Awbery repeatedly touched her vaginal area with his fingers and for a period of time raped her almost every day. Awbery similarly threatened J.G. that if she told anyone what he had done he would kill her mother. A.A.’s friend I.A. testified that Awbery also played “check the oil” with her; that he raped her on more than one occasion; and that he used a vibrator on her vaginal area. N.H., another friend of A.A., testified that Awbery touched her inappropriately on several occasions, and that she observed Awbery take other girls into rooms after which she would hear a scream and see the girl run out with her pants down. ¶6 The State presented the testimony of three expert witnesses. Dr. Wendy Dutton did not testify about the victims, the assaults against the victims, or whether the assaults had happened. Rather, she described the processes used by perpetrators of child abuse and the typical behaviors exhibited by girls who have been abused. Clinical counselor Michelle Feller testified about counseling she provided to A.A., J.G., and N.H. She had been a counselor for A.A. and J.G. since before the assaults by Awbery. She first diagnosed them with Post Traumatic Stress Disorder in March 2013, after the assaults by Awbery, and testified that they did not have the symptoms necessary to make a PTSD diagnosis prior to that time. Feller testified that N.H. had less severe symptoms, and diagnosed her with acute stress disorder. Feller described the general symptoms exhibited by victims of child sexual abuse and that she had seen those symptoms in A.A., J.G. and N.H. The State also presented the testimony of Morgan Mitchell, a therapist who provided counseling to I.A. She also described symptoms typically exhibited by child sexual abuse victims, and testified that she had observed them in I.A. 4 ¶7 The District Court instructed the jury that the testimony of the experts “cannot be used to show that a crime here was committed or that the defendant committed it; nor can it be considered as an opinion by them that the alleged victims are telling the truth.” ¶8 Awbery testified in his own defense, denying that he committed any of the acts described by the victims. The jury convicted him on all counts. ¶9 In March 2014 the District Court sentenced Awbery to terms in prison. STANDARD OF REVIEW ¶10 We review a district court’s rulings on the admission of evidence to determine whether there was an abuse of discretion. Beehler v. Eastern Radiological Assoc., 2012 MT 260, ¶ 17, 367 Mont. 21, 289 P.3d 131. We review a district court’s application of a statute to determine whether it was correct. Beehler, ¶ 17. DISCUSSION ¶11 Issue One: Did the District Court properly exclude evidence that some of the victims suffered prior sexual abuse by others? ¶12 Prior to trial the State moved that the defense be precluded from introducing evidence that A.A., J.G. and N.H. had each been sexually assaulted by others prior to Awbery’s offenses. The State relied upon the exclusions of the Rape Shield Law, § 45-5-511, MCA. The apparent perpetrator against A.A. and J.G. was a man named Thompson who was convicted of sexual offenses as a result. The alleged perpetrator against N.H. was a man named Gallagher. That incident was not fully investigated because of the wishes of the victims’ parents, and no charges were ever filed. 5 ¶13 The defense argued that Awbery’s constitutional right to present a defense was implicated and that it overcame the exclusions of the Rape Shield Law. According to the defense, the prior assaults increased the chance that the victims suffered PTSD as a result, and increased the chance that the allegations against Awbery were erroneous because the victims suffered from PTSD. Further, the defense stated that it did not intend to ask the girls themselves about the incidents, but predicted that the testimony of “perhaps family members, counselors, or Ms. Dutton might make [the prior incidents] relevant.” ¶14 After hearing argument of counsel, the District Court refused to exclude the prior assault evidence outright, but warned that if it were admitted it would have to be “very, very relevant” and limited. The District Court stated that the prior “incidents are generally covered by the rape shield law and not admissible unless testimony or an exception makes it so.” (Emphasis added.) The defense subsequently argued that Dutton’s general background testimony established that PTSD could be a cause for subsequent erroneous allegations of sexual assault and that the PTSD diagnosed in some of Awbery’s victims could come from the prior assaults. ¶15 The District Court ultimately excluded the defense from presenting evidence of the prior assaults against three of the victims because it would cause undue prejudice and would confuse and distract the jury. The District Court further noted that the record reflected that Feller’s PTSD diagnosis was specific to the time of Awbery’s offenses and that she testified that the PTSD did not exist as a diagnosable condition before Awbery’s offenses. In addition, the District Court noted that there was no evidence that there was 6 any similarity between the prior incidents and Awbery’s offenses and that the jury could be confused and distracted by hearing about other incidents. ¶16 The Montana Rape Shield Law provides: Evidence concerning the sexual conduct of the victim is inadmissible in prosecutions under this part except evidence of the victim’s past sexual conduct with the offender or evidence of specific instances of the victim’s sexual activity to show the origin of semen, pregnancy or disease that is at issue in the prosecution. Section 45-5-511(2), MCA. ¶17 In 1975, Montana joined most other states by adopting a rape shield law. See Ch. 129, L. 1975. Under the Rape Shield Law, “evidence concerning the sexual conduct of the victim” is inadmissible in a criminal prosecution, with very limited exceptions not at issue here. Section 45-5-511(2), MCA. Montana’s Rape Shield Law is designed to prevent the trial of the charge against the defendant from becoming a trial of the victim’s prior sexual conduct. State v. Higley, 190 Mont. 412, 422, 621 P.2d 1043, 1050-51 (1980). Rape shield laws generally protect victims from being exposed at trial to harassing or irrelevant questions concerning their past sexual behavior. Michigan v. Lucas, 500 U.S. 145, 146, 111 S. Ct. 1743, 1745 (1991); State v. Anderson, 211 Mont. 272, 283, 686 P.2d 193, 199 (1984). They evolved from society’s recognition that a rape victim’s prior sexual history is irrelevant to issues of consent or the victim’s propensity for truthfulness. Tanya Bagne Marcketti, Rape Shield Laws: Do They Shield the Children?, 78 Iowa L. Rev. 751, 754-55 (1993). The statute reflects a compelling state interest in keeping a rape trial from becoming a trial of the victim. Anderson, 211 Mont. at 283, 686 P.2d at 199. 7 ¶18 Although rape shield legislation originally focused on adult rape victims, most jurisdictions also include child victims of sexual abuse within the protections of their rape shield statutes. In 1985 the Montana Legislature broadened the applicability of the Rape Shield Law to include cases involving all types of sexual abuse. See Sec, 3, Ch. 172, L. 1985. The policies underlying the application of rape shield statutes to adult victims apply to child victims as well: rape shield statutes eliminate the need for victims to defend incidents in their past and minimize the trauma of testifying. Marcketti at 756. ¶19 Conflict can arise between rape shield statutes and a defendant’s Sixth Amendment rights to confront his accuser and to present evidence at trial in defense of the charge against him. A defendant charged with a crime has a right, arising from the Sixth Amendment to the United States Constitution and Article II, Section 24 of the Montana Constitution, to confront his accusers. State v. MacKinnon, 1998 MT 78, ¶ 33, 288 Mont. 329, 957 P.2d 23. A defendant has a similarly-based right to present evidence in his defense. State v. Johnson, 1998 MT 107, ¶ 22, 288 Mont. 513, 958 P.2d 1182. ¶20 Neither the Rape Shield Law nor the defendant’s right to confront and to present evidence are absolute. MacKinnon, ¶ 33; Johnson, ¶¶ 22-23. The Rape Shield Law cannot be applied to exclude evidence arbitrarily or mechanistically, Johnson, ¶ 21, State v. Colburn, 2016 MT 41, ¶ 25, 382 Mont. 223, ___ P.3d ___, and it is the trial court’s responsibility to strike a balance between the defendant’s right to present a defense and a victim’s rights under the statute. State v. Lindberg, 2008 MT 839, ¶ 53, 347 Mont. 76, 196 P.3d 1252. A court balancing the interests of the defendant with those protected by the Rape Shield Law should require that the defendant’s proffered evidence is not merely 8 speculative or unsupported. Johnson, ¶ 24; Lindberg, ¶ 56. The court should consider whether the evidence is relevant and probative (Rules 401 and 402, M. R. Evid.); whether the evidence is merely cumulative of other admissible evidence; and whether the probative value of the evidence is outweighed by its prejudicial effect (Rule 403, M. R. Evid.); Commonwealth v. Fernsler, 715 A.2d 435, 440 (Pa. Sup. Ct. 1998). The purpose of these considerations is to ensure a fair trial for the defendant while upholding the compelling interest of the Rape Shield Law in preserving the integrity of the trial and keeping it from becoming a trial of the victim. Anderson, 211 Mont. at 283, 686 P.2d at 199. ¶21 We conclude that the District Court properly applied the Rape Shield Law and properly precluded the defense from presenting evidence and argument concerning the prior incidents involving three of Awbery’s victims. The District Court ruled that Awbery had not established a sufficient foundation to admit the evidence, and recognized that Awbery could not make a showing that the evidence was admissible as an exception to the Rape Shield Law, properly balancing the interests involved. It is clear that the defense theory—that three of his victims suffered prior abuse which left them suffering from PTSD which caused them to make erroneous reports against Awbery—never progressed past conjecture and speculation. There was no evidence that any of the victims suffered from PTSD prior to Awbery’s assaults, and no evidence that any condition the victims suffered resulted in their making false accusations. The testimony of the State’s experts did not support the defense theories, and it specifically defused the theory of infliction of PTSD prior to Awbery’s offenses. 9 ¶22 Further, there was no clear evidence of the prior acts, either the facts of the abuse or the effects of it upon the victims. While Thompson was convicted of offenses, the defense presented no evidence or offer of proof about the nature of those offenses or whether there was any similarity to the acts allegedly perpetrated by Awbery. Further, in the case of the allegations involving Gallagher, there was no evidence that the prior acts even occurred. The defense disclaimed any intent to ask the girls themselves about the prior incidents, and it was never made clear how or to what extent the defense intended to present evidence of the nature and extent of the prior incidents. This clearly, as the District Court recognized, presented a considerable risk of turning the trial into a second case involving incidents unrelated to Awbery’s offenses. We agree with the District Court that there would have been a high risk of jury confusion. ¶23 This Court recently considered similar issues in Colburn, in which the defendant was convicted of sexual intercourse without consent, sexual assault, and incest. The victims were the defendant’s own daughter and a second girl, who were both age 11 at the time of the offenses. Defendant’s daughter testified at trial and generally denied that her father abused her. However, a nurse practitioner who had experience interviewing assault victims interviewed the daughter and testified to statements that the daughter made about the defendant’s abusive conduct. The State also played a tape of that interview for the jury. The tape was the “major direct evidence to support the incest charges.” Colburn, ¶ 12. The second girl also testified, and described Colburn’s abuse in detail. The State’s expert also interviewed the second girl and testified that in her opinion 10 the second girl would not have exhibited her detailed sexual knowledge unless she had actually experienced abuse. ¶24 Colburn’s defense was based upon showing that the nurse who interviewed his daughter used leading and suggestive questions, and that proper interviewing technique could have yielded different results. The defense proposed to call an expert to critique the interview techniques used to obtain the statements from defendant’s daughter. The defense further contended that the second victim may have fabricated her allegations against the defendant. In particular, the defense sought to introduce evidence that a month after making her allegations against the defendant, the second girl disclosed to another forensic interviewer that she had been sexually abused by her own father. The defense sought to introduce evidence that the second girl stated that she made the allegations against Colburn to “test the waters,” to determine whether adults would believe her allegations. When adults accepted her allegations against the defendant, she felt comfortable with making the accusations against her own father. ¶25 The District Court in Colburn excluded the defense expert’s testimony on forensic interviewing techniques, and, based upon the Rape Shield Law, prohibited any evidence that the second victim had suffered prior abuse from her own father. This Court determined that the district court in that case wrongly excluded the defense expert on interviewing techniques, and that it applied the Rape Shield Law without considering and balancing the defendant’s right to present a defense with the interests of the victims. The defense laid a proper foundation for its proposed evidence and its theories were not based 11 upon mere speculation. Therefore, we reversed the conviction in Colburn and remanded for a new trial. ¶26 In this case, by contrast, the District Court carefully considered Awbery’s right to present a defense to the charges; weighed it against the interests protected by the Rape Shield Law; and ruled that Awbery might be allowed to present evidence of prior abuse if it were made relevant by trial testimony. While there was expert prosecution testimony in Colburn that tied one victim’s sexual knowledge to her having been abused, there was not that same kind of testimony in Awbery’s case. Further, there was no evidence to tie prior abuse of Awbery’s victim to the development of PTSD as a reason for mistaken testimony. The two cases are factually distinct. ¶27 The District Court properly precluded Awbery from raising issues regarding prior offenses against three of the four victims. ¶28 Issue Two: Is Awbery entitled to a new trial based upon prosecutorial misconduct? ¶29 Awbery contends that remarks by the County Attorney in closing argument were prejudicial, improper and denied him a fair trial. He contends that the County Attorney urged the jury to consider the charges together, rather than to consider each charge separately; that the County Attorney improperly described the victims as “courageous” girls who should be supported; and that the County Attorney personally vouched for the credibility of witnesses. The defense did not object to any part of the closing argument, and requests that this Court undertake plain error review. 12 ¶30 This Court generally does not consider allegations of prosecutorial misconduct in closing argument unless there was a contemporaneous objection at trial. However, those allegations can be reviewed under the plain error doctrine. State v. Hayden, 2008 MT 274, ¶¶ 29-30, 345 Mont. 252, 190 P.3d 1091. Plain error review is discretionary and occurs only when the situation implicates the defendant’s fundamental constitutional rights, and when failing to review 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. Aker, 2013 MT 253, ¶ 21, 371 Mont. 491, 310 P.3d 506. We do not presume prejudice to the defendant from alleged improper argument, and the defendant must show that the argument violated his substantial rights. Aker, ¶ 24. ¶31 Upon reviewing Awbery’s arguments on this issue, we decline to undertake plain error review of the alleged errors. The prosecutor may comment on conflicts and contradictions in testimony and upon the evidence, and may suggest inferences that the jury can draw from the evidence. The prosecutor may comment on the gravity of the crime, the volume of the evidence, the credibility of the witness and the instructions given by the court. Aker, ¶¶ 26-27. Awbery has not demonstrated that the prosecutor’s statements during closing rose to a level that trigger the threshold for undertaking plain error review. 13 ¶32 Issue Three: Is Awbery entitled to a new trial based upon the cumulative effect of the alleged errors? ¶33 Based upon our disposition of the first two issues, we decline to consider Awbery’s contention that he is entitled to a new trial based upon cumulative error. CONCLUSION ¶34 After careful consideration of the arguments and authorities of the parties, we affirm the convictions. ¶35 Affirmed. /S/ MIKE McGRATH We Concur: /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ BETH BAKER /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA /S/ JIM RICE Justice Patricia Cotter, concurring. ¶36 I concur in the decision of the Court upholding the defendant’s convictions. I write separately to set forth the basis for my concurrence. ¶37 As the Court observes, we recently issued an opinion in State v. Colburn, in which we reversed the defendant’s conviction on two grounds. We concluded the District Court abused its discretion in disqualifying Colburn’s expert witness from testifying at trial, and erred in its application of the Rape Shield law to exclude evidence that Colburn offered at 14 trial. Colburn, ¶¶ 18, 29. The evidence that Colburn sought to introduce at trial centered upon the fact that the victim, R.W., had been abused by her father who had been convicted of assault, and thus the source of her detailed knowledge concerning sexual activity (a centerpiece of the case against Colburn) came not from Colburn but from the abuse her father inflicted. Colburn, ¶ 20. ¶38 Similarly, in this case, the defendant alleged that victims A.A. and J.G. were victims of prior assaults by an individual who was convicted of assault. As the Court notes, the defendant attempted throughout the trial to present evidence that the prior assaults increased the chance that the allegations against Awbery were based upon the victims’ PTSD, and/or that the PTSD diagnosed in some of the victims actually resulted from their prior assaults. Although Colburn and this case share the important unrefuted fact that the respective victims had been previously assaulted, I would conclude for the reasons set forth below that Colburn does not control here, and that the District Court did not abuse its discretion in excluding evidence of the previous assaults from the jury’s consideration. ¶39 In Colburn, the State introduced the testimony of nurse practitioner Hansen, who interviewed R.W. and testified that her statements were consistent with those of a child who had experienced sexual abuse. She stated a child would not have the detailed sexual knowledge R.W. possessed unless the child had been sexually abused. Colburn, ¶ 11. The State relied upon Hansen’s testimony to argue that R.W.’s sexual knowledge must have resulted from Colburn’s abuse. Colburn countered that the fact that R.W. had been assaulted by her father would establish that her sexual knowledge was gained from those 15 assaults rather than from any assault by him. Thus, there was an immediate relevant straight-line connection between the lynchpin of the State’s case against Colburn (R.W.’s sexual knowledge) and the fact that R.W. had been previously assaulted by her father. ¶40 Connecting the dots in this case is far less certain and far more complicated. Awbery sought to offer an alternative explanation for the victims’ psychological symptoms, alleging that their PTSD and anxiety could have been the result of sexual abuse by others and could also have caused them to fabricate allegations against him. There are evidentiary impediments to establishing this defense. First, it is not clear from the record how Awbery intended to introduce into evidence the prior incidents involving the victims so as to illuminate the cause of their psychological conditions, as he represented to the court that he did not intend to ask the victims any such questions. He said he would instead introduce the evidence “perhaps [through] family members, counselors, or Ms. Dutton.” He later advised the court during trial that he could introduce evidence of these other incidents through another named witness, counselor Feller, and/or a police officer. However, he never identified the witness through whom the evidence would be introduced, nor did he make an offer of proof in this regard. M. R. Evid. 103(2). ¶41 Second, even if Awbery had been allowed to introduce evidence of the prior assaults, the task remained for him to elicit testimony tying the victims’ PTSD and other psychological conditions to the prior assaults, and/or establishing that their PTSD led them to fabricate the evidence against him. The defendant called no expert witness to render these conclusions, and the prospect of gaining such admissions on 16 cross-examination of the state’s expert and the children’s therapists was dubious. As the State pointed out during argument in chambers, it was not the prior instances of alleged abuse that were speculative or unsupported; rather, it was the claimed defenses of fabrication and erroneous reporting (as well as the defense that the victims’ PTSD and other psychological conditions could have resulted from prior abuse) that were speculative and unsupported. ¶42 In denying Awbery’s request to introduce into evidence allegations of prior abuse, the District Court concluded that the proposed evidence would confuse and distract the jury and get the court into “time consuming sideshows.” The court reasoned that “we could go on weeks on weeks trying to determine what the PTSD in these children[,] given their lifestyle and given the things that have happened to them in the past, is.” The court further observed that the testimony of counselor Feller was specific to the symptoms she has observed in these victims and very specific to this defendant. ¶43 Regardless of whether a case involves the Rape Shield law or another statutory or common law evidentiary rule, it is axiomatic that the District Court has broad discretion to exclude potentially relevant evidence where its probative value is substantially outweighed by the danger of confusion of the issues, the misleading of the jury, or by considerations of waste of time. M. R. Evid. 403; State v. Passmore, 2010 MT 34, ¶ 64, 355 Mont. 187, 225 P.3d 1229. Given the protracted and confusing lengths to which the defendant would have to go to connect the prior assaults to the victims’ various psychological conditions and the lack of any clear path to get there, I conclude that the 17 court did not abuse its discretion in excluding the subject evidence. I would therefore affirm. /S/ PATRICIA COTTER Justices Beth Baker and Laurie McKinnon join the concurrence. /S/ BETH BAKER /S/ LAURIE McKINNON

March 1, 2016

99a6e1ff-f516-4a59-8d41-e39fb01a3b30

Matter of K.J.M.

2016 MT 141N

DA 15-0422

Montana

Montana Supreme Court

DA 15-0422 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 141N IN THE MATTER OF: K.J.M., Respondent and Appellant. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DI-12-68 Honorable Robert L. Deschamps, III, Presiding Judge COUNSEL OF RECORD: For Appellant: Anna S. Felton, Law Offices of Anna Felton, PLLC, Libby, Montana For Appellee: Timothy C. Fox, Montana Attorney General, C. Mark Fowler, Assistant Attorney General, Helena, Montana Kirsten Pabst, Missoula County Attorney, Eli Parker, Deputy County Attorney, Missoula, Montana Submitted on Briefs: May 11, 2016 Decided: June 7 2016 Filed: __________________________________________ Clerk June 7 2016 Case Number: DA 15-0422 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 K.J.M. appeals from an Order entered by the Montana Fourth Judicial District Court committing her to the Montana State Hospital (MSH) for a period not to exceed three months. We affirm. ¶3 K.J.M. is a 23-year-old female with a history of psychiatric illness and treatment. She has been diagnosed with a mental disorder known as “schizoaffective disorder, bipolar type.” She has a history of aggression in both the community and against peers in inpatient psychiatric settings. She has previously been admitted to St. Patrick’s Hospital Neurobehavioral Unit and 6 times to the MSH, including the most recent admission. Following her release on June 15 she was involved in an incident where she allegedly attacked a bystander at a Missoula bus stop. This incident resulted in the June 21, 2015 Renewed Petition for Commitment from the Missoula County Attorney’s Office alleging K.J.M. suffered from a mental disorder and required commitment. On June 23, 2015, the District Court held a hearing on the State’s petition and ordered her involuntary commitment. ¶4 K.J.M. appeals from the District Court Order on two issues. She argues that the District Court erred when it failed to address her hearsay objection regarding the alleged 3 outpatient attack, and that the court erred in failing to address whether MSH was the least restrictive environment for her commitment. Hearsay Objection ¶5 K.J.M. argues that the District Court erred when it failed to address her hearsay objection to testimony regarding her outpatient altercation. The State responds that the issue was not properly preserved at the District Court and may not be reviewed. ¶6 The District Court allowed testimony by Thomas Hodgetts, certified mental health professional, after an initial hearsay objection by K.J.M., objecting generally to Hodgetts’ testimony regarding K.J.M.’s allegedly aggressive and threatening behavior in the underlying incident. The court allowed the testimony because Hodgetts was recognized as an expert and he informed the court that he was relying on K.J.M.’s medical records for this specific testimony. On appeal K.J.M. questions the foundation of Hodgetts’ testimony, arguing that Hodgetts was relying on hearsay that was not in K.J.M.’s medical records and suggesting that Hodgetts got the information from law enforcement. The District Court did not have an opportunity to rule on this issue because it was not properly preserved at the hearing. ¶7 Generally, this Court will not review an issue when a party has failed to object and preserve it for appeal because the objecting party never gave the trial court an opportunity to address and correct any perceived errors. State v. Johnson, 2011 MT 286, ¶ 14, 362 Mont. 473, 265 P.3d 638 (citing In the Matter of K.M.G., 2010 MT 81, ¶ 36, 356 Mont. 91, 229 P.3d 1227). Here, K.J.M. failed to obtain a ruling on the evidentiary objection 4 and thus did not give the District Court an opportunity to address the issue. Therefore, we decline to review this issue because it was not properly preserved for appeal. Least Restrictive Commitment Alternative ¶8 K.J.M. argues that the District Court erred because it failed to address whether MSH was the least restrictive environment for her involuntary commitment. K.J.M. asserts that the District Court’s findings of fact on this issue fall short of the statutory requirements under § 53-21-127(8), MCA. The State responds that the District Court’s findings are adequate and regardless, given the detail of the record as a whole, the error was harmless. ¶9 The District Court found that MSH is the least restrictive placement for K.J.M. at this time. The court supported this conclusion with Hodgetts’ recommendations including a placement in a secure setting. The court also noted that Providence Hospital previously declined her admission due to K.J.M.’s past violence and accordingly determined that MSH was the least restrictive placement. The District Court also determined in its conclusions of law that the MSH was “currently” the least restrictive alternative for K.J.M.’s commitment. ¶10 We review a district court’s civil commitment order to determine whether the court’s findings of fact are clearly erroneous and its conclusions of law are correct. In re S.L., 2014 MT 317, ¶ 20, 377 Mont. 223, 339 P.3d 73 (citing In re R.W.K., 2013 MT 54, ¶ 14, 369 Mont. 193, 297 P.3d 318). A finding of fact is clearly erroneous if it is not supported by substantial evidence, if the district court misapprehended the effect of the evidence, or if we are left with a definite and firm conviction that a mistake has been 5 made after reviewing the entire record. In re S.L., ¶ 20. We do not find error with the District Court’s findings of fact because the court’s determination that MSH is the least restrictive placement alternative for K.J.M. is supported by substantial evidence. ¶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/ MIKE McGRATH /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA /S/ BETH BAKER

June 7, 2016

0a1eded7-4c25-41ce-abf6-30aef973fe2a

State v. Guill

2016 MT 56N

DA 15-0416

Montana

Montana Supreme Court

DA 15-0416 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 56N STATE OF MONTANA, Plaintiff and Appellee, v. DOUGLAS JAMES GUILL, Defendant and Appellant. APPEAL FROM: District Court of the Twentieth Judicial District, In and For the County of Sanders, Cause No. DC 06-54 Honorable Deborah Kim Christopher, Presiding Judge COUNSEL OF RECORD: For Appellant: Douglas James Guill, Self-Represented, Shelby, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Jonathan M. Krauss, Assistant Attorney General, Helena, Montana Robert Zimmerman, Sanders County Attorney, Thompson Falls, Montana Submitted on Briefs: February 10, 2016 Decided: March 8, 2016 Filed: __________________________________________ Clerk March 8 2016 Case Number: DA 15-0416 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 Douglas James Guill appeals from an amended judgment entered by the Twentieth Judicial District Court, Sanders County, awarding Guill credit for time served in the amount of 650 days. We affirm. ¶3 We address the following issue on appeal: whether the District Court imposed a legal sentence when it amended Guill’s judgment to include credit for time served. ¶4 After a two-week trial, a jury found Guill guilty on multiple counts of felony sexual intercourse without consent against his underage daughter. The District Court sentenced Guill to concurrent 50-year terms in the Montana State Prison on each count. Guill appealed his conviction to this Court, raising the sole issue of whether the District Court erred by allowing the prosecution to present evidence of uncharged misconduct. We affirmed Guill’s conviction. State v. Guill, 2010 MT 69, 355 Mont. 490, 228 P.3d 1152. Guill filed a motion for postconviction relief, and the District Court issued a final judgment on April 30, 2012. Guill failed to timely file his opening brief on appeal to this Court. We permitted him, however, an additional opportunity to file his opening brief and imposed a new deadline. Guill again failed to timely file his opening brief, and we dismissed his appeal with prejudice. 3 ¶5 On February 8, 2013, Guill filed a pro se petition for a writ of habeas corpus in which he challenged the legality of his arrest, alleged ineffective assistance of counsel, and presented two claims that his counsel deliberately violated his rights. We dismissed Guill’s petition because Guill had already exhausted his remedy of appeal for the trial issues raised. ¶6 In February 2015, Guill again filed a pro se petition for writ of habeas corpus, requesting that he be given credit for time served from the time of his arrest through sentencing. Guill alleged, and the State conceded, that the District Court did not properly include credit for time served. We thus granted Guill’s petition and remanded to the District Court to determine the number of days to credit Guill for the presentence incarceration and to enter an appropriate order or amended judgment. ¶7 On remand, Guill and the State stipulated that Guill should be given credit for 650 days toward his sentence. The District Court issued an amended judgment incorporating the grant for 650 days of time served. ¶8 On appeal, Guill challenges the District Court’s amended judgment. However, Guill does not contend that the court erred in granting him 650 days of time served. Instead, Guill asserts a number of trial errors, including that the District Court Judge failed to recuse herself, that the District Court failed to instruct the jury on a lesser-included offense, and that the State committed plain error by presenting evidence of uncharged misconduct. ¶9 Having already pursued the direct appeal of his judgment as well as postconvction proceedings, the claims of trial error presented by Guill are barred and may not be raised 4 in an appeal of a writ entered in a habeas corpus proceeding. We granted Guill’s petition for habeas corpus for the limited purpose “to determine the number of days to credit Guill for presentence incarceration and to enter an appropriate order or amended judgment.” The direct appeal and postconviction proceedings remain binding and conclusive as to trial issues. “The writ of habeas corpus is not available to attack the validity of the conviction or sentence of a person who has been adjudged guilty of an offense in a court of record and has exhausted the remedy of appeal.” Section 46-22-101(2), MCA. Guill has exhausted his remedy for appeal on all the trial issues raised. The District Court’s amended judgment is affirmed. ¶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. ¶11 Affirmed. /S/ LAURIE McKINNON We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ JAMES JEREMIAH SHEA

March 8, 2016

ac7b557c-1615-408a-8d16-6fb89f3ba446

State v. Kant

2016 MT 42

DA 15-0403

Montana

Montana Supreme Court

DA 15-0403 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 42 STATE OF MONTANA, Plaintiff and Appellee, v. BRADLEY ROBERT KANT, Defendant and Appellant. APPEAL FROM: District Court of the Sixth Judicial District, In and For the County of Park, Cause No. DC 15-6 Honorable Randal I. Spaulding, Presiding Judge COUNSEL OF RECORD: For Appellant: Karl Knuchel, Shena Roath, Karl Knuchel, P.C., Livingston, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy K Plubell, Assistant Attorney General, Helena, Montana Bruce Becker, Park County Attorney, Kathleen Carrick, Deputy Park County Attorney, Livingston, Montana Submitted on Briefs: January 6, 2016 Decided: February 23, 2016 Filed: __________________________________________ Clerk February 23 2016 Case Number: DA 15-0403 2 Justice Patricia Cotter delivered the Opinion of the Court.. ¶1 Bradley Kant was arrested and charged with three drug-related criminal charges, two of which were felonies. The charges were brought following a warranted search of Kant’s home and the seizure of 67 live marijuana plants and numerous miscellaneous paraphernalia. Kant appeals the Sixth Judicial District Court’s denial of his combined motion to suppress and dismiss. We affirm. ISSUE ¶2 A restatement of the issue on appeal is: ¶3 Did the District Court err in denying Kant’s motion to suppress and dismiss? FACTUAL AND PROCEDURAL BACKGROUND ¶4 During 2010 and 2011, Bradley Kant and his wife, Crystal, held registered caregiver’s licenses under the Montana Marijuana Act authorizing them to grow and distribute marijuana in accordance with then-applicable statutes and regulations. Upon expiration of their licenses, they failed to renew them but continued growing and distributing marijuana. ¶5 In 2012, Detective Tim Barnes, an acting detective for the Park County Sheriff’s Office and the Missouri River Task Force, executed a search warrant on a Livingston, Montana home and seized numerous marijuana plants and arrested one individual. This individual informed Barnes that he had gotten his original plants from his neighbor, Brad Kant, who was also growing numerous plants in his home. ¶6 On January 5, 2015, Barnes was informed by a separate confidential source (CS) that Crystal was growing multiple marijuana plants in her home and was delivering 3 marijuana to Vicki Jefferies’ home every Wednesday at approximately 7:00 p.m. The CS claimed that Jefferies in turn supplied Mark Harrison with marijuana. Mark Harrison was the CS’s roommate at that time. The CS provided Barnes with cellphone number, address, and vehicle information about Crystal, Jefferies, and Harrison. Additionally, the CS made statements against self-interest by admitting to smoking marijuana with Jefferies and trading prescription drugs to Jefferies for marijuana. ¶7 On January 14, 2015, Barnes submitted an application for a search warrant to conduct a search of the Kants’ residence. Among other things, Barnes asserted in the application that on Wednesday, January 7, 2015, at 6:43 p.m., a vehicle bearing a license plate registered to Kant was seen arriving at Jefferies’ home. A single unidentified occupant exited the vehicle and entered the home. Barnes also referenced the 2012 tip that Kant was then growing marijuana in his home. On January 9, Barnes interviewed a Livingston Police Officer who lives near Kant. The officer reported that during the hot summer months, a strong odor of fresh marijuana can be detected outside of the Kants’ home. The magistrate granted the warrant and on January 16, 2015, Barnes and another detective executed it. The Kants were cooperative and the detectives seized 67 plants, 12 pounds of prepared product, and multiple items of paraphernalia for growing and distributing. ¶8 On February 3, 2015, the Park County Deputy County Attorney filed an Information against Bradley and Crystal Kant asserting the following criminal offenses: criminal production or manufacture of dangerous drugs, a felony; criminal possession with intent to distribute dangerous drugs, a felony; and criminal possession of drug 4 paraphernalia, a misdemeanor. On February 17, 2015, Kant made his initial appearance and entered a plea of not guilty. On February 25, 2015, Kant moved to suppress all evidence seized during the search of his residence on the grounds that Barnes’ application for the warrant lacked sufficient facts to establish probable cause that the Kants’ home contained drugs or drug-related evidence. Kant sought dismissal of the action against him. The State opposed the motion. ¶9 On April 7, 2015, the District Court denied Kant’s suppression motion. On June 15, 2015, Kant entered into a plea agreement under which charges against Crystal were dismissed, and he pled guilty to criminal possession with intent to distribute dangerous drugs. Kant reserved the right to appeal the denial of his suppression motion, and the State agreed to dismiss the remaining charges. Kant was sentenced to 5 years to the Department of Corrections, all suspended, subject to a fine and other conditions. ¶10 Kant filed a timely appeal. STANDARD OF REVIEW ¶11 The grant or denial of a motion to dismiss in a criminal proceeding is a question of law which we review de novo to determine whether the district court’s conclusion of law is correct. State v. Willis, 2008 MT 293, ¶ 11, 345 Mont. 402, 192 P.3d 691. ¶12 We review a district court’s ruling on a motion to suppress to determine whether the court’s findings of fact are clearly erroneous and whether those findings were correctly applied as a matter of law. State v. Deshaw, 2012 MT 284, ¶ 13, 367 Mont. 218, 291 P.3d 561. 5 ¶13 This Court’s function as a reviewing court is to ensure that the magistrate or the lower court had a “substantial basis” to determine that probable cause existed. A magistrate’s determination that probable cause exists will be paid great deference and every reasonable inference possible will be drawn to support that determination. State v. Rinehart, 262 Mont. 204, 211, 864 P.2d 1219, 1223 (1993) (internal citations omitted); State v. Reesman, 2000 MT 243, ¶ 19, 301 Mont. 408, 10 P.3d 83 (overruled in part on other grounds by State v. Barnaby, 2006 MT 203, ¶ 42, 333 Mont. 220, 143 P.3d 809 (Cotter, Nelson, JJ., dissenting)). DISCUSSION ¶14 Did the District Court err in denying Kant’s combined motion to suppress and dismiss? ¶15 Kant presents several arguments on appeal. He argues that the District Court (1) misconstrued and misapplied State v. Reesman and State v. Barnaby; (2) erroneously ruled on the issue of staleness of certain evidence; (3) incorrectly accorded the magistrate too much inferential latitude; and (4) erroneously denied his motions to suppress and dismiss. ¶16 In Reesman, we addressed the sufficiency of the application for a search warrant employing the “totality of the circumstances” standard set forth in Illinois v. Gates, 462 U.S. 213, 103 S. Ct. 2317 (1983). We reviewed years of case law following the adoption of the Gates standard and observed that “certain indelible threshold rules have emerged.” Reesman, ¶ 27. Relying on these rules, we compiled a three-prong test to determine whether probable cause exists for the issuance of a search warrant: 6 (1) Was the informant anonymous or was the information provided hearsay? If so, independent corroboration of the information is required; (2) If the informant is not anonymous, was the information provided based upon personal observation of criminal activity or was the information hearsay? If hearsay, independent corroboration is required; and (3) If the information from a non-anonymous informant was gathered by personal observation of criminal activity, is the informant reliable? Reesman, ¶¶ 28-31. We further explained that under this standard, the court reviewing an application for a warrant “evaluates the facts asserted within the four corners of the application and makes a practical, common-sense decision as to whether there is a fair probability that incriminating items will be found in the place to which entry is sought.” Reesman, ¶ 24. ¶17 In Barnaby, the Court “deviate[d] slightly” from Reesman’s “strict rules requiring independent police corroboration” when it determined that the “critical question when evaluating probable cause is not whether an individual report meets the requirements of a particular test, but whether the application as a whole states sufficient facts to support a determination of probable cause.” Barnaby, ¶¶ 39-41. Kant argues that Barnaby wrongly relaxed the Reesman test. ¶18 Kant asserts that the District Court erroneously implied that Barnaby overruled Reesman. However, the Barnaby Court specifically admonished “police officers to corroborate independently information from sources of questionable reliability.” Barnaby, ¶ 42. Kant claims that the only information contained in the warrant application actually corroborated by Barnes was Crystal’s cellphone number and Jefferies’ and Harrison’s address and vehicle information. In other words, he complains 7 that the District Court’s application of Barnaby resulted in the court’s failure to properly analyze the warrant application contents under Reesman. ¶19 Additionally, Kant challenges the District Court’s acceptance of or reliance on stale information contained in the warrant application, i.e., the Livingston police officer’s comment that summer temperatures caused the smell of marijuana to be detectable near Kant’s home, and a statement by an arrestee in June 2012 that he had gotten his marijuana plants from Kant. Kant contends that this stale information was insufficient to corroborate other information contained in the application and should have been disregarded. ¶20 Kant also argues that the magistrate erroneously inferred the existence of certain facts from the application for the search warrant, when the application itself did not categorically assert these facts. Specifically, he maintains that the magistrate inferred from the application that: (1) the CS had “first-hand” knowledge of the Kants’ criminal activity based on personal observation; (2) it was Barnes himself who observed a single occupant exiting Kant’s truck at Jefferies’ house; and (3) the marijuana being supplied to Harrison by Jefferies was marijuana grown and distributed by the Kants. He maintains that the magistrate was required to rely solely on the information contained within the four corners of the search warrant application and supporting documentation in determining whether probable cause exists, but that she instead engaged in unsupported inferences to justify the issuance of the search warrant. ¶21 We first address Kant’s complaint that a neighbor’s June 2012 claim that he obtained marijuana plants from Kant, and Officer Leonard’s claims that during the hot 8 summer months, the scent of fresh marijuana was evident near the Kants’ home, were too stale to be considered. As we are not basing our decision on either of these reports, we need not address them further. ¶22 Reviewing the remaining information included in the application, we analyze it under Reesman and Barnaby. In his affidavit, Barnes stated that the confidential source who provided information about Crystal, Jefferies, and Harrison was “known to law enforcement.” As such, the CS was not anonymous, as addressed in the first prong of the Reesman test. Under the second prong, we ask whether the CS’s information was based on his or her personal observation of the criminal activity or on hearsay. The affidavit provided little information about the CS. We do not know how the CS was “known to law enforcement,” whether the CS had provided reliable information previously, or how the CS discovered the information supplied to Barnes. Under prong two of Reesman, without this information, Barnes was required to independently corroborate the information provided. ¶23 While some of the language of the application is less than clear, reasonable and acceptable extrapolations may nonetheless be made. After receiving all of the CS’s information, Barnes independently, through personal surveillance or review of law enforcement records, corroborated what the CS had told him, including the phone number, addresses, and vehicle registration information for Crystal, Jefferies, and Harrison. We note that while Barnes did not expressly identify himself in his affidavit as the person who observed Kant’s car at Jefferies’ residence on the expected day and time, he did not identify anyone else as the surveillant, unlike the remainder of his application 9 in which he specifically identified each source of the information obtained. Based upon Barnes’ statement that he conducted personal surveillance while corroborating the CS’s information, it is reasonable to conclude from a “practical and common-sense” review of the application that Barnes was the surveillant. His failure to affirmatively so state could have been an oversight or the result of poorly drafted language, but we conclude it is not fatal. Because we conclude that Barnes corroborated the CS’s information, we need not consider the remaining prongs of the Reesman test except to note that the CS’s admissions against interest further support a finding of CS reliability under the third prong of the test. For these reasons, we conclude that the application satisfies the Reesman test. Having determined that the warrant application satisfies the stricter Reesman test, we need not engage in further analysis under Barnaby. ¶24 As noted above, we are tasked with ensuring that the magistrate had a “substantial basis” to determine there was probable cause for the issuance of the warrant. We will pay the magistrate’s determination great deference and every reasonable inference will be drawn to support that determination. Rinehart, 262 Mont. at 211, 864 P.2d at 1223. Moreover, probable cause does not require facts sufficient to show criminal activity, but rather requires a determination that there exists a probability of criminal activity. Barnaby, ¶ 30. We conclude that the magistrate had a substantial basis for concluding there was a probability of criminal activity, and that the District Court did not err in denying Kant’s suppression motion. 10 CONCLUSION ¶25 For the foregoing reasons, we affirm the District Court’s denial of Kant’s motion to suppress and dismiss. /S/ PATRICIA COTTER We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ BETH BAKER Justice James Jeremiah Shea dissents. ¶26 I dissent from the majority’s conclusion that the search warrant application contained probable cause to search Kant’s residence. I would reverse the District Court’s order denying Kant’s motion to suppress evidence of the marijuana plants and drug paraphernalia found at Kant’s residence on the ground that the warrant application did not demonstrate sufficient independent corroboration of the CS’s tip. ¶27 As the majority recognizes, the CS’s tip falls under the second prong of the Reesman test for determining probable cause: the informant was not anonymous, and the information provided was hearsay, so independent corroboration was required. Opinion, ¶ 22. The majority concludes that the following facts constituted sufficient independent corroboration to warrant a finding of probable cause to search the Kant’s home: the CS provided Crystal’s phone number and Jefferies’ and Harrison’s addresses and vehicle information; and the CS stated that Crystal brings marijuana to Jefferies’ home every Wednesday at around 7:00 p.m., and Barnes observed an unidentified person emerge 11 from a vehicle registered to Kant enter Jefferies’ residence on a Wednesday at 6:43 pm.1 Opinion, ¶ 23. For the reasons discussed below, I respectfully disagree with my colleagues that this constitutes sufficient independent corroboration. ¶28 In State v. Griggs, 2001 MT 211, ¶ 40, 306 Mont. 366, 34 P.3d 101, we held: The focus of a court in reviewing [a search warrant application] that relies on corroboration of non-criminal activity is the degree of suspicion that attaches to particular types of corroborated non-criminal acts and whether the informant provides details which are not easily obtained. The purpose of the inquiry is to determine if the informer’s statements regarding non-incriminatory facts indicate familiarity with the implicated individual or the alleged criminal activity that would allow an inference that the informer’s allegations of criminal activity are reliable. (Emphasis in original). The warrant application in this case does not indicate how the CS obtained information that Crystal was growing marijuana at her residence or supplying marijuana to Jefferies. Only two of the facts corroborated by Barnes relate to the Kants: (1) Crystal’s cell phone number, and (2) the vehicle from which the unidentified person emerged at Jefferies’ house was registered to Kant. The application does not allege that the CS was “familiar” with the Kants or, for that matter, that the CS ever even interacted with the Kants. ¶29 “[C]orroboration must consist of more than merely innocent, public information.” State v. Tackitt, 2003 MT 81, ¶ 34, 315 Mont. 59, 67 P.3d 295 (citing Griggs, ¶ 50). Apparently, none of the majority has been party to a group text, but there are myriad innocent ways that the CS could have obtained Crystal’s cell phone number from any 1 Although the warrant application does not identify Barnes as being the surveillant of the unidentified person, I agree with the majority that “it is reasonable to conclude . . . that Barnes was the surveillant.” Opinion, ¶ 23. 12 number of people, including Jefferies, without ever interacting with Crystal in any manner, legal or illegal. The fact that the CS had Crystal’s cell phone number bears no weight on the CS’s reliability regarding a marijuana grow operation in Crystal’s home. Likewise, Barnes’ corroboration of Jefferies’ and Harrison’s addresses and vehicle information does not lend weight to the reliability of the CS’s tip that Crystal was growing and distributing marijuana. According to the CS, she and Harrison are roommates; so as far as that information goes, the corroboration consisted of the CS’s knowledge of her own address. More to the point, the information regarding Jefferies’ and Harrison’s addresses and vehicle information bears no relation to the Kants. ¶30 I also would not find the CS’s reliability bolstered by her admission to using drugs with Jefferies and trading prescription drugs with Jefferies in exchange for marijuana. While this might bolster the CS’s credibility if the goal was to search Jefferies’ home, none of the CS’s self-incriminating admissions were related to the crime at issue in this case or implicated the CS in any way into the investigation of the Kants. ¶31 I also must disagree with the majority’s conclusion that Barnes’ observation of an unidentified individual driving Kant’s vehicle to Jefferies’ house supports a finding of probable cause to search the Kant’s residence. The suspicion that results from police corroboration of otherwise innocent information “must reveal a pattern of human behavior associated with the alleged criminal activity, or a particular activity necessary to carry out the alleged criminal activity, or activities which, when viewed as a whole, are consistent with the alleged criminal activity.” Griggs, ¶ 46. According to the warrant application, the CS “stated that Crystal Kant brings marijuana to Vicki Jefferies every 13 Wednesday around 7:00 pm.” This was corroborated by Barnes’ observation that “on Wednesday, January 7, 2015, at 6:43 p.m., a vehicle bearing a license plate registered to Kant was seen arriving at Jefferies’ home[,]” and “[a] single unidentified occupant exited the vehicle and entered the home.” Opinion, ¶ 7. There is no indication that the individual emerging from the vehicle was Crystal, or even that the individual was female. Nothing in the warrant application indicates that the unidentified individual was carrying anything into the house, let alone a suspicious package. Nor does the application state how long the unidentified individual remained at Jefferies’ residence, whether he or she emerged empty-handed after entering with a package, or whether there were other individuals at Jefferies’ home at the time. ¶32 If the unidentified individual entered Jefferies’ home carrying a package of some sort and emerged empty-handed minutes later, this may fairly be considered corroboration of criminal activity. On the other hand, if the unidentified individual entered Jefferies’ home carrying a bottle of wine and a Bundt cake and emerged empty-handed two hours later, this is pretty solid corroboration of a previously scheduled dinner party. Therein lies the problem. Either of these scenarios is equally supported by the facts—or more precisely, lack thereof—asserted “within the four corners of the application.” Reesman, ¶ 24. ¶33 Furthermore, law enforcement corroboration of an informant’s tip “must independently test not only the veracity of the informant’s account itself . . . but also to some measured degree provide the reviewing magistrate with a factual indication that criminal activity has occurred and that contraband may be found in a particular place.” 14 Griggs, ¶ 28 (emphasis added). Accord Barnaby, ¶ 29 (“[T]he issuing 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 will be found in a particular place.”). As discussed above, the warrant application does not state how the CS obtained information that Crystal was growing marijuana at her house. The application does not indicate whether the CS even knew the location of the Kant’s residence. Moreover, the CS’s statements provided in the application were inconsistent as the CS both stated that Crystal was growing marijuana at her residence, which is located in Livingston, and that Crystal “was bringing marijuana to Livingston.” Finally, there was no independent verification of the location of the marijuana grow operation, or an independent indication that marijuana and drug paraphernalia would be found at the Kant’s residence.2 ¶34 The entire sum and substance of what the majority determines provides a substantial basis for concluding there was a probability of criminal activity is a CS who provided the following information: two home addresses, one of which was the CS’s own address, and neither of which was the subject of the search warrant; information regarding vehicles owned by two individuals, neither of whom were the Kants; Crystal’s cell phone number which could have been obtained in any number of innocent ways; and an allegation that Crystal delivered marijuana to Jefferies’ home every Wednesday at approximately 7:00 p.m., which was then corroborated by an observation of a male or 2 The majority does not base its decision on either of the reports that Kant challenged as too stale to be considered; therefore, my analysis does not consider them either. 15 female of unknown description, arriving at Jefferies’ home in a car registered to Kant near 7:00 p.m. on the Wednesday following the tip, but with no other facts regarding the circumstances of that single visit from which could be inferred criminal activity. Assuming this constitutes corroboration of the CS’s information, the question remains: Corroboration of what? As noted above, “corroboration must consist of more than merely innocent, public information.” Tackitt, ¶ 34 (citing Griggs, ¶ 50). ¶35 For the foregoing reasons, I dissent. /S/ JAMES JEREMIAH SHEA

February 23, 2016

251ee789-6d5a-48c8-b83c-2c75f675c970

Reed v. Indigo Faith

2016 MT 49N

DA 15-0459

Montana

Montana Supreme Court

DA 15-0459 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 49N ROBERT REED and BETTY REED, Plaintiffs, Counter-Defendants, and Appellants, v. INDIGO FAITH PROPERTIES, LLC and DIRK BEYER, Individually, Defendants, Counter-Claimants, and Appellees. APPEAL FROM: District Court of the Twenty-First Judicial District, In and For the County of Ravalli, Cause No. DV-14-512 Honorable Jeffrey H. Langton, Presiding Judge COUNSEL OF RECORD: For Appellants: Quentin M. Rhoades, Nicole L. Siefert, Rhoades & Siefert, PLLC, Missoula, Montana For Appellees: Kevin S. Jones, Joseph D. Houston, Christian, Samson & Jones, PLLC, Missoula, Montana Submitted on Briefs: February 3, 2016 Decided: March 1, 2016 Filed: __________________________________________ Clerk March 1 2016 Case Number: DA 15-0459 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 Indigo Faith Properties, LLC, (Indigo) owns real property in Hamilton, Montana, near the West Fork of the Bitterroot River. Dirk Beyer is Indigo’s registered agent and managing member. Indigo’s property borders Robert and Betty Reed’s property. The West Fork of the Bitterroot River runs through a portion of the Reeds’ property. ¶3 In 1995, the Reeds’ predecessors in interest executed an easement (1995 Easement) in favor of Indigo’s predecessors in interest. The 1995 Easement provides that it is “a non-exclusive 30’ easement for roadway and utility purposes . . . .” Indigo’s predecessors in interest paid $12,000 in consideration for the 1995 Easement. The 1995 Easement further provides that it “shall be binding upon and inure to the benefit of the heirs and assigns of the parties hereto.” ¶4 The Reeds claim that the purpose of the 1995 Easement was to provide Indigo’s predecessors in interest with access to a contemplated bridge over the river; however, the bridge was never built at the proposed location. In 2005, Indigo’s predecessors in interest entered into an easement and road and bridge maintenance agreement (2005 Easement) with a different party. The 2005 Easement provided Indigo’s predecessors in interest 3 with access to a public roadway by means of a bridge across a different portion of the river. ¶5 Indigo purchased its property in 2010 and the Reeds purchased their property in the spring of 2014. After purchasing the property, Indigo’s members and guests utilized the 1995 Easement to access the river for recreational purposes by vehicle. After the Reeds purchased their property, they demanded that Indigo cease accessing the river via their property and Indigo refused. The Reeds filed suit against Indigo and Beyer alleging trespass and seeking to extinguish the 1995 Easement. Both parties filed motions for summary judgment. On July 7, 2015, the District Court issued an order denying the Reeds’ motion and granting Indigo’s motion. The Reeds appeal. ¶6 We review an entry of summary judgment de novo. Albert v. City of Billings, 2012 MT 159, ¶ 15, 365 Mont. 454, 282 P.3d 704. Summary judgment is appropriate when the moving party demonstrates the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. M. R. Civ. P. 56(c)(3); Albert, ¶ 15. ¶7 On appeal, the Reeds assert that the 1995 Easement’s “original purpose” was to provide access to Indigo’s property by means of a bridge. They assert that the 1995 Easement no longer serves this purpose; therefore, the Reeds claim that the 1995 Easement should be extinguished under the doctrine of “changed circumstances.” They further contend that the 1995 Easement is general in terms of its scope. Accordingly, the Reeds assert that the scope of the 1995 Easement should be defined by the surrounding circumstances of the easement’s actual use at the time of its creation. They argue that 4 until 2005, no one actually utilized the 1995 Easement and that, since Indigo acquired the property, it has utilized the 1995 Easement only to access the river for recreational purposes. They claim that the conduct of Indigo’s predecessors in interest makes clear that the 1995 Easement “is solely for the purpose of ingress and egress to and from the [Indigo property],” not for recreational access to the river. ¶8 An express easement is one that is “created by a written instrument.” Woods v. Shannon, 2015 MT 76, ¶ 10, 378 Mont. 365, 344 P.3d 413. The 1995 Easement was created by a written instrument and is therefore an express easement. As such, the easement’s scope “is determined by the terms of the grant.” Woods, ¶ 12 (citing § 70-17-106, MCA; Clark v. Pennock, 2010 MT 192, ¶ 25, 357 Mont. 338, 239 P.3d 922). The terms of the 1995 Easement specifically grant “a non-exclusive 30’ easement for roadway and utility purposes.” We conclude that the grant in the 1995 Easement is specific in nature. See Clark, ¶ 27 (concluding that an easement was specific because its language “specifically creates a road easement . . .”). Therefore, contrary to the Reeds’ assertions, we need not “look beyond the plain language of the grant or consider the situation of the property and the surrounding circumstances, including historical use of the easement” to determine the 1995 Easement’s scope. Woods, ¶ 12 (citing Clark, ¶ 25). ¶9 The Reeds’ contention that the 1995 Easement should be extinguished under the doctrine of “changed circumstances” likewise is unpersuasive. Although we have not adopted the doctrine in Montana—and we decline to do so here—we conclude that it is not applicable. The changed circumstances doctrine is described in the Restatement 5 (Third) of Property: Servitudes, § 7.10 (3d ed. 2000), which provides in relevant part that “[w]hen a change has taken place since the creation of a servitude that makes it impossible as a practical matter to accomplish the purpose for which the servitude was created, a court may modify the servitude to permit the purpose to be accomplished.” Contrary to the Reeds’ contentions, a change has not taken place that makes it impossible to accomplish the purpose of the 1995 Easement. The specific terms of the 1995 Easement do not reference access for ingress and egress, nor do its terms condition the easement upon a bridge being built. We will not read those terms into the 1995 Easement. Clark, ¶ 25 (concluding, “If an easement is specific in nature, the breadth and scope of the easement are strictly determined by the actual terms of the grant.”). If the Reeds’ predecessors in interest had intended to limit the 1995 Easement to access for ingress and egress, or condition the easement upon a bridge being built, they could have said as much in the granting language. See Clark, ¶ 27 (concluding, “If YBP wanted to limit tract owner’s access to one road, it would have said as much in the deeds and covenants.”). The stated purpose of the 1995 Easement is for “roadway and utility purposes.” Indigo’s use of the easement to access the river is consistent with this purpose. Accordingly, the circumstances have not changed. ¶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. We agree with the 6 District Court that Indigo demonstrated the absence of a genuine issue of material fact. We affirm its grant to Indigo of judgment as a matter of law. /S/ BETH BAKER We concur: /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA /S/ JIM RICE

March 1, 2016

4ef271c1-8b61-43f4-a59a-3001f8e680a7

Curry v. Pondera County Canal & Reservoir Co.

2016 MT 77

DA 14-0529

Montana

Montana Supreme Court

DA 14-0529 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 77 GENE R. CURRY, CHERYL S. CURRY, and CURRY CATTLE CO., Plaintiffs, Counterclaim-Defendants and Appellants, v. PONDERA COUNTY CANAL & RESERVOIR COMPANY, Defendant, Appellee and Cross-Appellant. APPEAL FROM: Montana Water Court, Cause No. WC 2006-01 Honorable Russ McElyea, Chief Water Judge COUNSEL OF RECORD: For Appellants: Holly Jo Franz (argued), Ada C. Montague, Franz & Driscoll, PLLP, Helena, Montana For Appellee: John E. Bloomquist (argued), Bloomquist Law, P.C., Helena, Montana For Amicus Curiae Montana Trout Unlimited: Laura S. Ziemer, Patrick Byorth, Meg Casey, Montana Trout Unlimited, Bozeman, Montana March 29 2016 Case Number: DA 14-0529 2 For Amicus Curiae Montana Water Resources Association: Michael J.L. Cusick, Abigail R. Brown, Moore, O’Connell & Refling, PC, Bozeman, Montana Argued and Submitted: September 30, 2015 Decided: March 29, 2016 Filed: __________________________________________ Clerk 3 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Gene R. Curry, Cheryl S. Curry, and Curry Cattle Co. (Curry) appeal from an order of the Montana Water Court that determined Pondera County Canal & Reservoir Company (Pondera) is entitled to claim beneficial use based on the maximum number of shares authorized by the Montana Carey Land Board (MCLB), a service area for its place of use, the extent of the acreage included in the service area, the adjustment of the flow rate for Claim Nos. 41M 162000-00 and 41M 162109-00, and the reversal of the dismissal of Claim No. 41M 199797-00. Pondera cross-appeals from the portion of the order regarding the tabulation for Claim Nos. 41M 131103-00 and 41M 199796-00. We affirm in part, reverse in part, and remand for further proceedings. ISSUES ¶2 We review the following issues: 1. Did the Water Court err when it determined the water rights of an entity developed under the Carey Land Act for the purpose of sale or rental are not limited by the stockholders’ actual historic water use? 2. Did the Water Court err when it granted Pondera a “service area” rather than a place of use based on historically irrigated land? 3. Did the Water Court err by ruling Pondera’s storage rights were beneficially used on the Birch Creek Flats prior to 1973? 4. Did the Water Court err by substituting its judgment for the trier of fact in regard to Claim Nos. 41M 162000-00 and 41M 162109-00 (Gray Right), and Claim No. 41M 199797-00? 5. Should the Water Court’s tabulation for Claim Nos. 41M 131103-00 (Curry claim) and 41M 199796-00 (Pondera claim) include volume measurements? We address each issue in turn. 4 FACTUAL AND PROCEDURAL BACKGROUND ¶3 The present case originates from a water distribution controversy on Birch Creek, a tributary of the Marias River. Both Curry and Pondera own rights to divert waters from Birch Creek. This case is before this Court as a result of a certification order from the Ninth Judicial District Court, Pondera County, which referred the case to the Water Court for the “determination of the existing water rights that are involved in [the] matter.” The water rights that are the subject of this appeal are located in the Marias River Basin, 41M, which has yet to receive final adjudication. Subsequent to the filing of this appeal a preliminary decree was entered, and now it controls the rights in the Basin. Accordingly, the Court recognizes all water users in this Basin, including the parties to this appeal, will have an opportunity to fully participate in the adjudication process and additional litigation related to the rights at issue herein may occur. A. Historical and Factual Background ¶4 Pondera is a water supply company organized under Montana law, which supplies water to Pondera County residents primarily for irrigation. Pondera owns rights to divert water from Birch Creek. In addition to its Birch Creek water rights, it owns a complete distribution system, including canals, ditches, siphons, and headgates. ¶5 Pondera’s predecessors secured some of its water rights through use of the Carey Land Act, a federal act that encouraged settlement of the arid West.1 43 U.S.C. §§ 641-644 (2012). This federal law provided for the passage of fee title to federal lands 1 See also Valier Co. v. State, 123 Mont. 329, 215 P.2d 966 (1950) for a discussion of the procedures of the Carey Land Act. 5 to state settlers if the state complied with various prerequisites. To ensure the procedures were properly followed states created Carey Land Boards to manage the process. Typically, Carey Land Act projects occurred and passed title in a systematic fashion. First, the federal government promised title to arid lands to a state upon the conditions of both reclamation and actual settlement of the land. Next, the state contracted with a construction company to construct an irrigation system to service the land and to secure settlement of the land by settlers. Once construction of the irrigation system was complete, the state could request the patents of the land from the federal government. Upon approval by the Carey Land Board, the construction company could sell shares of stock in an operating company to settlers and the state could sell the patented land serviced by the irrigation system to the stockholder-settlers. Thus, the operating company was comprised of stockholders who had the right to water per acre of land owned, and also proportionate ownership in the irrigation system. Once 90% of the total stock was sold by the construction company to settlers, the ownership of the system was turned over to the operating company. Ultimately, the settler-shareholders owned the land upon which the water was used, had ownership in the operating company, but the operating company itself retained ownership of the water rights. ¶6 The original appropriators of the rights now owned by Pondera began appropriating water for the purpose of irrigating and selling water to other irrigators. The Conrad brothers acquired these rights and appropriated water in order to irrigate approximately 50,000 acres of their land in the Marias River Valley. At some point in the late 1800s, the Conrads hired an engineer to construct a ditch system to divert water 6 from Birch and Dupuyer Creeks, which was approximately fifty miles in length and irrigated a portion of their land, in the range of five to six thousand acres. This land was irrigated under the Conrad Investment Company. The Conrads also organized the Pondera Canal Company to sell water they diverted from the Lake Francis Reservoir into a diversion to the Dry Fork of the Marias. This company project irrigated approximately 13,000 acres of shareholder land. The current Pondera project is an extension of these two original systems. ¶7 In 1908 the Conrads sold their land and holdings to W.G. Cargill. Cargill and the same engineer hired to develop the Conrads’ first original system then began efforts to irrigate under the then recently-enacted Carey Land Act provisions. Pursuant to the Carey Land Act, two companies were formed: a construction company and an operating company. The operating company went through various name changes and was eventually organized as Pondera in 1927. In 1948, the physical construction of the project was completed and a request for final approval was filed with the MCLB. The MCLB approved the project as complete in 1953, at which time Pondera took ownership of the project from the construction company. Prior to the MCLB’s final approval, the development of the project required an independent assessment of the ability to provide an adequate supply of water. Both the MCLB and the federal government were involved in determining whether the Pondera project could properly supply water to its shareholders. ¶8 Similar to other operating companies formed under the Carey Land Act, Pondera is owned by its membership and water is distributed to shareholders on a 7 per-share-owned basis. Generally, the water rights are appurtenant to the land described in the share certificates issued by Pondera to its shareholders. Under the development of the project the settler-shareholders did not receive individual water rights to irrigate their land, but instead they received the right to available water in common with other settler-shareholders regardless of when they purchased their shares or when they initially irrigated their land. ¶9 Initially the Pondera project sought to irrigate 160,000 acres. Over time this irrigable acreage amount was reduced. The State engineer assigned to the project concluded in his final evaluation that the lands contemplated would be serviced by the issuance of a maximum of 72,000 shares, with each share equivalent to one acre of irrigable land.2 Pondera’s bylaws contemplate the movement of water within the project’s boundaries. Specifically, they state: [T]he shares and water rights evidenced thereby shall become and forever be inseparably appurtenant to such lands, subject, nevertheless, to the power of the Board of Directors of this corporation, for good cause shown, at the request and with the consent of the owner thereof, to make said certificate of stock appurtenant to other land which is so located that the Irrigation System as then and now constructed can readily and efficiently serve the same. ¶10 Curry is a private landowner with irrigation water rights at various locations in an area known as the Birch Creek Flats (the Flats). Curry came into possession of his lands and appurtenant water rights beginning in 1988. Some of Curry’s rights are of the oldest in Basin 41M. For many years, Curry and Pondera both received water from Birch Creek 2 While there was no volume determination made by the MCLB, Pondera has followed the issuance of 18 inches of water per acre of land, ultimately dependent on the availability of water for that season, and subject to change throughout the season. 8 despite disagreeing over the priorities of each other’s rights. In 2004, Pondera advised Curry of what it believed to be the extent of Curry’s water rights, which was less than what had been previously indicated by a former Pondera employee. Then in 2005 Pondera locked Curry’s headgate, which left him without water and ultimately led to the current dispute. B. Procedural History ¶11 In June 2005, Curry filed a complaint in the Ninth Judicial District Court, Pondera County, which alleged interference with his water rights by Pondera. In August 2005, Curry filed a motion for preliminary injunction and certification to the Water Court for a determination of Curry’s and Pondera’s competing water right claims. The District Court certified the case to the Water Court regarding the determination of the water rights, and conducted a hearing regarding the issuance of a preliminary injunction. In May 2006, the District Court issued a preliminary injunction that enjoined Pondera from interfering with Curry’s water diversion from Birch Creek. ¶12 Upon certification to the Water Court, the case was referred to a Water Master to hear all matters in the case. In August 2008, Curry filed a motion for partial summary judgment and to compel discovery. Initially Pondera claimed a “service area” of 377,813.5 acres as its place of use. In its summary judgment briefing, Pondera conceded that the 377,000-acre service area did not accurately represent actual irrigated acreage, and agreed it would not oppose the removal of the acreage amount as its place of use. Instead, it stated it would agree to use the legal descriptions of the land within the service area, as identified by Township and Range, as the appropriate descriptor of the service 9 area. A six day hearing was held that involved extensive testimonial and documentary evidence regarding all of Curry’s and Pondera’s water right claims on Birch Creek. ¶13 In April 2013, the Water Master issued a report with findings of fact and conclusions of law regarding each claimed water right. The Water Master found, in part, that the maximum number of acres Pondera is allowed to irrigate is 57,073 acres within the designated place of use. The Master found although the MCLB authorized the sale of 72,000 shares (i.e. representing 72,000 irrigable acres), the evidence showed the greatest number of actual irrigated acres prior to the implementation of the Montana Water Use Act (WUA) in 19733 was 56,556 in 1921. Further, even post-WUA the greatest number of actual irrigated acres was 70,030 in 2003. Thus, according to the Master, 72,000 acres were never historically irrigated since the project’s completion and the 57,073-acre figure represents the greatest number of actually irrigated acres pre-WUA, plus an allotment for an amount of water to service the shareholder city of Conrad. ¶14 In regard to the place of use, the Master found Pondera’s claim of a service area of over 377,000 acres was based on convenience because it was the amount of land Pondera’s entire infrastructure could potentially service, but had never historically serviced. In lieu of Pondera’s requested use of a service area for its place of use, the Master found the land described on the share certificates with appurtenant water rights is the only land that can and should be irrigated by Pondera water. The Master cited McDonald v. State, 220 Mont. 519, 722 P.2d 598 (1986), and Schwend v. Jones, 163 3 The implementation of the WUA, codified at Title 85, MCA, is significant because after this date all water users are required to comply with the Act for any changes made to a water right. 10 Mont. 41, 515 P.2d 89 (1973) in support of the appurtenance requirement. The Master requested Pondera supplement the record with a list of share certificates issued with the appurtenant acres stated as of July 1, 1973, the date the WUA went into effect. According to the Master, after allowing Curry to respond to the list, the historical place of use could then be accurately determined. The Master noted: The place of use so delineated will be larger than the number of historically irrigated acres, because shareholders have the flexibility to irrigate less than all of their acreage at any time . . . . For example, if a share certificate is for 40 acres and describes the S2SE section 17 (80 acres), the place of use will be S2SE of section 17. The shareholder may use the allotment of 40 shares’ water on any of the 80 acres described in any given year. If the shareholder wishes to use those shares to irrigate land in the N2SE of section 17, a [Montana Department of Natural Resources and Conservation (DNRC)] change authorization is required. This is no more and no less than is required of any other water right holder in Montana. ¶15 The Master also excluded the Flats from Pondera’s service area. The Master stated that while Pondera did at times release water to ditches on the Flats, the water used on the Flats prior to 1973 was non-Pondera water. The Master explained: There is evidence that [Pondera] accommodated other water users on the Flats from time to time. [Pondera] asserts that it released water to non-project users in order to be a good neighbor, without regard for priority dates, and that it did not distinguish whether it was using direct flow water or stored water. . . . . When [Pondera] accommodated its neighbors, at times it was effectively honoring their senior rights. Senior direct flow rights in priority are by definition using the unstored flow of the source. [Pondera] may have voluntarily substituted stored water [but]. . . [t]hat practice did not create storage rights for the neighbors who were accommodated. [Pondera] may have had no idea what the instantaneous natural flow of Birch Creek was at the time. In comparison to the size of the [Pondera] enterprise, the few second feet needed by a user on the Flats were minimal. [Pondera’s] practice of accommodating non-[Pondera] water users on the Flats from time to time did not make the users’ ditches on the Flats part of [Pondera’s] historical delivery system. 11 ¶16 In April 2014, the Water Court issued an order amending and partially adopting the Master’s report. The court disagreed with the Master’s conclusions regarding the maximum number of acres that Pondera could irrigate, the size of the place of use, or service area, and the exclusion of the Flats in the service area. Instead, the court found the number of shares authorized by the MCLB accurately reflects the number of acres Pondera is allowed to irrigate. The court reasoned that at the time the MCLB fixed the 72,000 share limit 69,257 acres had already been sold to landowners. Thus, due to the intent of the project and the State’s determination of the maximum allowable irrigable acres, the Master improperly diluted the value of the shares. ¶17 The court further determined there was no legal basis for the Master’s conclusion that the land described on the share certificates as of July 1, 1973, was the place of use or service area. It found Pondera is entitled to claim a service area for its place of use. Furthermore, it found the 377,000-plus acres Pondera originally claimed as its service area is appropriate. The court stated Curry was unable to sufficiently meet his burden of proof to show Pondera’s service area of 377,255.5 acres as claimed in 2007 is not the appropriate assessment. The court also found the Flats to be within Pondera’s service area. The court stated the Flats should be included because Pondera had historically delivered direct flow along with stored water to the Flats for use by non-shareholders. ¶18 Curry timely appeals, and Pondera timely cross-appeals, from the Water Court’s order. 12 STANDARDS OF REVIEW ¶19 Two standards of review are relevant to this case because it involves a Water Master and the Water Court. First, the Water Court must review the factual findings in the Water Master’s report for clear error, and the conclusions of law in the report for correctness. Second, whether the standard of review was correctly applied by the Water Court is a question of law, which we review de novo. Heavirland v. State, 2013 MT 313, ¶¶ 13-14, 372 Mont. 300, 311 P.3d 813. Therefore, we review the Water Court’s order to determine whether it correctly applied the appropriate standards of review to the Master’s findings of fact and conclusions of law. If we find the Water Court correctly set aside a factual determination made by the Master, we review its substitute or additional findings for clear error. Skelton Ranch, Inc. v. Pondera Cnty. Canal & Reservoir Co., 2014 MT 167, ¶ 26, 375 Mont. 327, 328 P.3d 644 (citations omitted). ¶20 We have previously set forth a three-part test for determining clear error. First, the reviewing court reviews whether the findings of fact are supported by substantial evidence. Second, even if the findings are supported by substantial evidence, a finding may still be clearly erroneous if the trial court misapprehended the effect of the evidence. Third, even if the findings are supported by substantial evidence and the court has not misapprehended the effect of the evidence, a finding may be clearly erroneous when although there is evidence to support the finding, when looking at the evidence as a whole the court is left with the definite and firm conviction that a mistake has been committed. Marks v. 71 Ranch, LP, 2014 MT 250, ¶ 12, 376 Mont. 340, 334 P.3d 373. Substantial evidence is evidence that a reasonable mind might accept as adequate to 13 support a conclusion, even if the evidence is weak or conflicting. It need not equal a preponderance of the evidence, but it must be more than a scintilla. Although the standard is deferential, it is not synonymous with clearly erroneous and a reviewing court may find a finding clearly erroneous even though there is evidence to support it. Skelton Ranch, Inc., ¶ 27 (citations omitted). DISCUSSION ¶21 1. Did the Water Court err when it determined the water rights of an entity developed under the Carey Land Act for the purpose of sale or rental are not limited by the stockholders’ actual historic water use? ¶22 In his report, the Master determined Pondera’s water rights developed under the Carey Land Act should be limited to the actual acreage historically irrigated by the shareholders. The Water Court, however, determined the water rights should be limited to the number of shares authorized by the MCLB upon completion of the system. Both the Master and the court based their determinations in the principles of Montana water law. ¶23 Curry argues beneficial use of water is “the basis, the measure, and the limit of all water rights in Montana, including the rights of water supply companies” such as Pondera. Curry maintains the Water Court’s order and reasoning improperly places Pondera’s water rights in an advantageous position over those of any other water user. Curry argues that the court incorrectly interpreted Bailey v. Tintinger, 45 Mont. 154, 122 P. 575 (1912), by removing the requirement that water used for sale or rental be limited by historic beneficial use. 14 ¶24 Pondera argues its beneficial use is not the actual irrigation of lands, but instead putting the water into service for shareholders for irrigation. Thus, it maintains the Water Court correctly held, pursuant to Bailey, that Pondera has the right to rely on the maximum number of shares authorized by the MCLB (72,000) as the amount of acreage it can irrigate, not the historic number of acres actually irrigated by the shareholders. ¶25 The controlling principle of Montana water law is the right to beneficially use water—without beneficial use the right ceases. Power v. Switzer, 21 Mont. 523, 529, 55 P. 32, 35 (1898); Quigley v. McIntosh, 110 Mont. 495, 505, 103 P.2d 1067, 1072 (1940). Whether an appropriation is made for a beneficial or useful purpose is a question for the courts to determine based on the appropriator’s intent, and contemplated and actual use. Toohey v. Campbell, 24 Mont. 13, 17-18, 60 P. 396, 397 (1900). The appropriation of water for sale has long been accepted as a beneficial use. Bailey, 45 Mont. at 175, 122 P. at 582; Sherlock v. Greaves, 106 Mont. 206, 218, 76 P.2d 87, 91-92 (1938); State ex rel. Normile v. Cooney, 100 Mont. 391, 408, 47 P.2d 637, 645-646 (1935); Mont. Const. art. III, § 15 (1889); Mont. Const. art. IX § 3 (1972). Our first Constitution in 1889 explicitly recognized the right to sell and rent water to others as a beneficial use. Mont. Const. art. III, § 15 (1889).4 The verbiage used in the 1889 Constitution referencing the sale of water was imported almost verbatim nearly one hundred years later into the 1972 Constitution. Compare Mont. Const. art. IX, § 3 (1972) with Mont. Const. art. III, § 15 4 Article III, Section 15 of the 1889 Montana Constitution states in part: “The use of all water now appropriated, or that may hereafter be appropriated for sale, rental, distribution or other beneficial use and the right of way over the lands of others, for all dithes [sic], drains, flumes, canals and acque-ducts, necessarily used in connection therewith, as well as the sites for reservoirs necessary for collecting and storing the same, shall be held to be a public use.” 15 (1889). This constitutional provision, along with its interpretations in our case law, clearly shows a steadfast commitment to recognizing the ability to appropriate water for its ultimate use by a third party. ¶26 The parties rely on Bailey as the guidepost decision, but disagree over its meaning. We agree Bailey applies to the instant case, and highlight its applicability with the following analysis. To begin, the crux of Bailey was a dispute between landowners with individual water rights and those who received water from an irrigation system operated by a canal company. Bailey, 45 Mont. at 160, 122 P. at 576. ¶27 In Bailey, the defendant canal company began construction of its water distribution system pursuant to the Carey Land Act with the intention to service settler-irrigators from Big Timber Creek. Bailey, 45 Mont. at 160-161, 122 P. at 577; Bruffey v. Big Timber Creek Canal Co., 137 Mont. 339, 341, 351 P.2d 606, 607 (1960). The defendants’ predecessors began appropriating water in 1892 with the intent to irrigate and provide water for sale. Bailey, 45 Mont. at 160-161, 122 P. at 577. A canal company succeeded the original appropriators’ interests and continued to expand the system, completing most of the system by 1896. Bailey, 45 Mont. at 161, 122 P. at 577. Eventually the defendants acquired the original canal company’s rights, and “did considerable work on” the irrigation system in 1910. Bailey, 45 Mont. at 161, 122 P. at 577. ¶28 The plaintiffs brought suit to determine the extent of the defendants’ water rights and the case was tried in December 1910. Bailey, 45 Mont. at 161, 122 P. at 577. The trial court found the defendants furnished to their customers: 835 miner’s inches in 1908; 16 926 inches in 1909; and a maximum of 1,150 inches in 1910. Bailey, 45 Mont. at 161, 122 P. at 577. The trial court did not enter any specific findings of fact, but determined the defendants’ rights were limited to 1,000 miner’s inches. Bailey, 45 Mont. at 161, 122 P. at 577. The defendants appealed arguing the trial court’s determination was not supported by the evidence. Bailey, 45 Mont. at 161, 122 P. at 577. The plaintiffs-respondents argued the defendants’ “considerable work” amounted to “an enlargement of the [system], as distinguished from repairs or cleaning[.]” Bailey, 45 Mont. at 162, 122 P. at 577. ¶29 On appeal, this Court concluded that the carrying capacity of the system prior to the 1910 work was 1,240 inches, and after the work, which we determined was cleaning not enlargement, was 2,200 inches. Bailey, 45 Mont. at 162-163, 164-165, 122 P. at 577-578. We also held in certain circumstances water possession can either be actual or symbolized by the completion of preparatory work necessary to take actual possession. Bailey, 45 Mont. at 174, 122 P. at 582. We stated: [W]e base our conclusion that, as to a public service corporation, its appropriation is complete when it has fully complied with the statute and has its distributing system completed and is ready and willing to deliver water to users upon demand, and offers to do so. The right thus obtained may be lost by abandonment or nonuser for an unreasonable time (1 Wiel, sec. 569), but cannot be made to depend for its existence in the first instance upon the voluntary acts of third parties— strangers to its undertaking. Bailey, 45 Mont. at 177-178, 122 P. at 583. ¶30 Finally, we concluded the appropriator’s needs and capacity measure the extent of the appropriation. “If [the] needs exceed the capacity . . . of [the] diversion, then the capacity of [the] ditch, etc., measures the extent of [the] right. (McDonald v. Lannen, 19 17 Mont. 78, 47 P. 648). If the capacity of [the] ditch exceeds [the] needs, then [the] needs measure the limit of [the] appropriation.” Bailey, 45 Mont. at 178, 122 P. at 583. ¶31 As applied to the facts here, the main propositions that emerge from Bailey are that either the system’s capacity or the company’s needs will determine the extent of the water right, wherein if the needs are less than the capacity, then the measurement of the needs becomes the cap to the water right, and beneficial use is not in-fact use of water by the irrigators, but the company’s ready availability of water to the irrigators. Bailey does not circumvent the fundamental water law maxim that water must be put to beneficial use. Instead, it clarifies a specific way in which water is put to beneficial use that is different from the typical actual, on-the-ground use of water. Still, water’s beneficial use is required for all water appropriators; however, pursuant to Bailey whether it has occurred may be determined by the company’s actions, not those of the shareholders who decide if and when to apply the water to its ultimate, actual use. Bailey, 45 Mont. at 176, 177-178, 122 P. at 582-583. ¶32 Pondera and its predecessors sought to make water available for sale to irrigators in the Basin. In fact, the sole purpose of Pondera’s existence was to sell water availability to its shareholders. The federal Carey Land Act, ratified by the states’ own sister Acts, required that there be enough water available to adequately irrigate the settlers’ land. 43 U.S.C. § 641. The availability of water was determined by the state Carey Land Board and reviewed by the federal government. Here, the final report by the State engineer for the MCLB fixed the maximum number of shares that could be issued by Pondera at any single time at 72,000. This meant Pondera had the ability to issue to 18 shareholders the right to use water to irrigate no more than 72,000 acres of irrigable lands within the area developed under the Carey Land Act and serviced by the system. An additional requirement under the Montana Carey Land Act statutes was that 90% of the authorized shares must be sold by the construction company to settlers prior to the operating company taking ownership of the project, which occurred in this case. Section 81-2111, RCM (1947) (repealed 1965). Therefore, there was enough water available to irrigate 72,000 acres, as determined by the MCLB, and there were enough qualified settlers who bought into the system and began using the water, as determined by the ownership transfer to the operating company Pondera. After the MCLB certified the project in 1953, Pondera had the ability to continue to issue shares to shareholders until it reached the issuance maximum of 72,000 allowed shares for a reasonable amount of time, and the record indicates Pondera continued to do so. ¶33 We have held: [A] corporation [that] does not own, control, or possess any land is organized for the purpose of selling or renting water to settlers to irrigate arid lands; that it proceeds under the statute to make its appropriation and fully complies with all the statutory requirements, completes its distributing system, and is ready and offers to supply water to settlers upon demand. Now, if the corporation can ever make an appropriation, it has done so, for it has performed every act which it can perform. It cannot use the water itself, for it has no land or other means of use. Any further acts must be performed by its customers who are to be the users. Bailey, 45 Mont. at 175-176, 122 P. at 582. Furthermore, “[i]t is clearly the public policy of this state to encourage these public service corporations in their irrigation enterprises, and the courts should be reluctant to reach a conclusion which would militate against that policy.” Bailey, 45 Mont. at 177, 122 P. at 583. Therefore, it would be against the policy 19 and intent of the Carey Land Act, as well as Montana law, to hold the acreage actually irrigated by the irrigators should limit Pondera’s water rights developed pursuant to the Carey Land Act. Instead, these rights are limited by the actual shares issued by Pondera within a reasonable amount of time after the completion of the Carey Land Act project in 1953, in the amount determined by the MCLB. Bailey, 45 Mont. at 178, 122 P. at 583. See also Aberdeen-Springfield Canal Co. v. Peiper, 982 P.2d 917, 922 (Idaho 1999) (concluding, “A finding of forfeiture in this case, where the appropriator [canal company] did nothing to cause the nonuse of the water, would have troubling consequences for all Carey Act operating companies. Such a ruling would give stockholders, who are not appropriators, the power to determine the fate of [the canal company’s] water rights.”). ¶34 As stated, because beneficial use is a key tenet of water law Pondera must continue to put its water to beneficial use within the confines of the law. While the sale of water is unquestionably a beneficial use, Bailey clearly states that though the right cannot be lost based upon the acts by a third-party shareholder, it can nevertheless be lost by nonuse or abandonment. Mont. Const. art. IX, § 3 (1972); Bailey, 45 Mont. at 178, 122 P. at 583. The nonuse or abandonment would then be measured by the acts of the company, which we note are not issues contained in this appeal before this Court. ¶35 We do not agree with Curry that the Water Court’s interpretation of Bailey removes the beneficial use requirement for water rights developed under the Carey Land Act. Under Bailey, Pondera put to beneficial use water rights it perfected under the Carey Land Act by providing water for sale and issuing shares of stock up to its allowed acreage maximum as determined by the MCLB. Accordingly, the Water Court did not 20 err, and we therefore affirm the Water Court’s decision that the Master incorrectly determined Pondera’s rights were limited by the actual acreage irrigated by its shareholders. ¶36 2. Did the Water Court err when it granted Pondera a “service area” rather than a place of use based on historically irrigated land? ¶37 Curry contends the Water Court erred by misinterpreting Bailey to mean Pondera is entitled to a service area that is larger than any historic place of use. Curry also argues Pondera’s rights, like any other water user’s, are appurtenant to the land and therefore the Water Court erred by allowing Pondera a service area instead of a historical place of use. ¶38 Pondera argues that the service area is the appropriate boundary definition for Pondera’s place of use. Further, Pondera contends that the use of a service area is consistent with DNRC guidelines, the Water Court’s precedent, and Montana law’s interpretation of a “public service corporation,” as described in Bailey. Pondera argues its project is similar to an irrigation district, and because it uses no water itself and its sole purpose is to supply water to others, it should be entitled to claim a service area instead of a specific place of use. ¶39 In his report, the Water Master determined that a service area is the incorrect means of defining the boundary of where Pondera can put its water to use. Instead, the Master requested an accounting of the lands described on Pondera’s stock certificates to determine the lands upon which the rights could be used. The Water Court disagreed with this analysis and found a service area properly embodies the intent and history of the project, and is allowed under Montana law. 21 A. Appurtenance ¶40 All parties discuss the issue of whether the water rights developed under the Carey Land Act should be appurtenant to the land where the water is put to ultimate use. In Montana the right to water is a usufructuary right. Thus, an appropriator has the right to use water but does not outright own the water. Mont. Const. art. IX, § 3(3); Quigley, 110 Mont. at 505, 103 P.2d at 1072. At various times the Montana legislature has enacted and then revised the statutory requirements for appropriators to follow in order to perfect water rights. In addition to the requirements involving beneficial use, a delineated place of use has historically been necessary for perfection, even prior to its necessity by statute. Quigley, 110 Mont. at 505, 103 P.2d at 1072. ¶41 The appurtenance of water to land is a general water rule in Montana.5 Smith v. Denniff, 24 Mont. 20, 23-24, 60 P. 398, 399-400 (1900). Typically an appropriator applies appropriated water to his own land, thus unifying the water right and the title to the land. Other water-appropriating entities, such as irrigation districts, state water projects, and private corporations, also may own water rights, but at the same time it is possible they do not own the land upon which the water is put to use. These entities define the relationship between the water right owner and the water user in their organization’s documents (i.e. bylaws, contracts, shares of stock, etc.). ¶42 In regard to water projects organized under the Carey Land Act, Bruffey summarized the purpose of appurtenance provisions found in the Carey Land Act’s 5 The current WUA requires the Water Court to state “the place of use and a description of the land, if any, to which the right is appurtenant” when issuing a final decree. Section 85-2-234(6)(e), MCA (2015) (emphasis added). 22 statutory language and operating companies’ organizational documents, like the one found in Pondera’s bylaws. In Bruffey we stated: [T]he purpose of making the water right appurtenant to the land and inseparable therefrom was to enable the construction company to retain an enforceable lien on both the land and water right, and that after the lien is satisfied the water right may be transferred to other lands with the same freedom that water rights generally may be transferred, so long as the rights of others are not adversely affected. Bruffey, 137 Mont. at 345, 351 P.2d at 609. It was necessary to tie the water right to the land because under the statutory arrangement the construction company, which constructed the water infrastructure at the behest of the State, was to turn over the ownership of the system to the operating company upon completion of the system and at 90% sale of stock. Valier Co., 123 Mont. at 332, 215 P.2d at 968. The construction company itself neither owned the land nor the water right but had considerable investment in the project by way of the hardware. Intertwining the water right and landownership in this way helped to ensure the construction company would receive payment for its role in the project. ¶43 Here, Pondera’s stock provisions specifically contemplate the movement of water within the project’s boundaries. Likewise, the specifics of the Carey Land Act support the idea of water movement. Further, as explained in Bruffey, the appurtenance of water was an important tool to help ensure the success of the project as a whole. The share of stock, once issued, ties the right to water to the land upon which the water is to be used as described in the certificate. However, an unissued or reclaimed share of stock still holds a measure of a perfected right to water, but will have no appurtenant attached land. Thus, 23 a strict requirement of appurtenance in this type of water right developed under the Carey Land Act cannot be followed. ¶44 Looking to the intent of the project under the Carey Land laws, the purpose of the arrangement was to bring water to the lands identified by the MCLB as irrigable within the project. As described in the Master’s report, one given share of stock may be attached to more land than one irrigable acre. The landowner then would have the option of selecting which portion of his land to actually irrigate. However, it is Pondera who remained the owner of the water right, not the landowner; the landowner is merely the conduit for beneficial use. Aberdeen-Springfield Canal Co., 982 P.2d at 921; Twin Falls Salmon River Land & Water Co. v. Caldwell, 266 U.S. 85, 45 S. Ct. 22 (1924). Curry cites Schwend and Adams v. Chilcott, 182 Mont. 511, 597 P.2d 1140 (1979) for the proposition that water rights transfer with the sale of land. While this proposition is correct, Schwend and Adams do not apply here. In the event a landowner with stock in Pondera sells his land his water use-right via Pondera transfers to the new ownership, unless specifically reserved. But, this does not mean the right is tied indelibly to the land itself; the right is tied to the issuance of stock by Pondera for use upon land as determined irrigable within the project. The water right ownership and the land ownership remain distinct even if there is a substantial likelihood they will remain together. If a shareholder fails to properly abide by his contractual payment obligations to Pondera for the continued use of the water right, then Pondera would be able to follow its corporate procedures to recall the share. In this situation the water right would remain with the company, never with the shareholder even though the water itself is not being used at that 24 moment in time. Therefore, in a Carey-Land-Act context the individual stock certificates’ appurtenant land should not define the overall water right’s place of use. B. Service Area ¶45 We now turn to the issue, as the parties have framed it, of a service area as opposed to a historical place of use. At the outset we note, along with the Water Court, that the rights discussed herein in regard to the service area are those that Pondera acquired prior to the WUA. The rights acquired after the WUA are subject to use within their historic places of use. As previously stated, where water is put to use is an element of a water right. Quigley, 110 Mont. at 505, 103 P.2d at 1072. Under statute a statement of claim for an existing water right is prima facie proof of its contents. Section 85-2-227(1), MCA. This may be overcome if an objector proves, by a preponderance of the evidence, that the claim does not accurately reflect the water right as it existed prior to the WUA. Nelson v. Brooks, 2014 MT 120, ¶ 37, 375 Mont. 86, 329 P.3d 558 (quoting W. R. Adj. R. 19). ¶46 Bailey again is instructive in this discussion. There may be lands available for irrigation at the time the corporation’s system is completed; but the corporation cannot compel people to utilize their lands, and, if they do, it cannot compel them to use its water. If the appropriation is not completed until the water is actually used, it is apparent at once that the corporation’s right, if any it has, is so intangible and uncertain as to be of no value, whatever amount of money may have been expended on the work. If the land sought to be reclaimed should be government land, the corporation would be confronted with the additional difficulty that it cannot compel people to settle upon such lands, and its appropriation would depend upon the tide of immigration and the wishes of the settlers when they do come in, if use is necessary to complete the appropriation. 25 Bailey, 45 Mont. at 176, 122 P. at 583. While Bailey certainly does not contemplate removing all limitations to a water right secured under the Carey Land Act method, it highlights the need for prospectivity in such a development project. Over time the project was modified to adapt to a size in relation to the amount of water available as determined by the MCLB, amongst other factors. Similar to Bailey where the operating company acquired the rights of the original appropriators who sought to develop a distribution system, Pondera’s predecessors likewise intended to distribute water for irrigation sale. Both in this case and in Bailey the water distribution companies ultimately availed themselves of the Carey Land Act, which is an explicit federal and state statutory construct to settle and bring water to arid land. The water rights developed in this manner were perfected upon the completion of the water distribution system, and thus deemed to satisfy the beneficial use requirement at that time. Bailey, 45 Mont. at 170-171, 122 P. at 580-581. This contrasts to a typical use or filed right where the beneficial use is the actual, in-fact use of the water. ¶47 As previously discussed, because beneficial use occurs prior to the application of the water on the land, the right cannot be constrained by the actual use of the water, nor can it be indelibly constrained by the exact land upon which the water is put to ultimate use. Aberdeen-Springfield Canal Co., 982 P.2d at 922. The rights developed for future sale have their place of use determined by the lands irrigable under the system when it was completed. The prospectivity necessary in such a project, and recognized in Bailey, is still subject to limitations. While we recognize the intent of the specific statutory method of acquiring these water rights provides for flexibility, we concurrently recognize 26 they are still subject to principles of Montana water law. Water rights like these at issue may “be transferred to other lands with the same freedom that water rights generally may be transferred, so long as the rights of others are not adversely affected.” Bruffey, 137 Mont. at 345, 351 P.2d at 609. ¶48 Based on the reasons outlined above, we therefore hold the idea of a service area is the proper method of satisfying the place-of-use requirement in the context of Carey Land Act projects. The boundaries of the service area are then subject to the project as it was developed and completed, and by the lands identified by the MCLB, as well as the fundamental tenets of water law in this state. C. Boundaries of the Service Area ¶49 Because we agree with the court’s determination that a service area is the appropriate method to define a place of use for a Carey Land Act project, we review its factual determination of the boundary for clear error. Pursuant to the Water Rights Claim Examination Rules, Pondera filed these claims on an irrigation district claim form. The record shows Pondera originally used Township and Range to describe its service area. In 2007, Pondera apparently sought to amend its service area to the 377,255.5-acre figure that Curry now contests.6 The Water Court found that the project’s boundaries have remained largely unchanged since its completion. The court further found the service area acreage amount as of 2007 was based on the DNRC’s review of Pondera’s claims. The court stated because it determined Pondera was entitled to claim a service area, and 6 Initially Pondera claimed a service area of 377,813.5 acres. The DNRC reviewed Pondera’s service area claim and was able to verify the currently-claimed number of 377,255.5 acres. 27 Curry was unable to produce evidence to refute the area’s bounds, it accepted Pondera’s service area of 377,255.5 acres. The court evaluated the evidence presented before it, and based on the substance of the evidence determined the acreage amount appropriately described the area of lands under the project. We hold the court did not commit clear error. ¶50 The Water Court stated in its order: The [c]ourt recognizes that the service area is large relative to the amount of historic irrigation within the service area. It is possible that a smaller service area could have been defined with better evidence. Given that this proceeding is a certification action and not a final determination of the water rights at issue, and given that claims and amendments thereto are afforded prima facie status by statute, the service area described in this order is sufficient to address the Water Court’s obligations under § 85-2-406, MCA. Similarly, while we agree a service area is the proper method of defining the place of use for the water rights developed under the Carey Land Act, we do not definitively determine the size of the service area in this Opinion and at this stage in the adjudication process. Merely, we agree with the Water Court that the 377,255.5 acres described as the service area will be sufficient for the purposes of its certification order, less our ruling below in regard to Issue three. ¶51 3. Did the Water Court err by ruling Pondera’s storage rights were beneficially used on the Birch Creek Flats prior to 1973? ¶52 The Master found the water used on the Flats was non-Pondera water prior to the implementation of the WUA in 1973. The Master did note, however, at times Curry and other non-Pondera users would call upon Pondera to honor what they believed to be their senior water rights. The record indicates the parties have disputed the priority of their 28 rights, and for a long period of time essentially agreed to disagree as to seniority. However, Pondera would from time to time accommodate and respond to the non-Pondera water users irrigating on the Flats and release water from its storage facilities that would eventually flow into the canals utilized by the non-Pondera water users on the Flats. The Master found this release of water to the Flats did not amount to historical water use by Pondera in the area of the Flats, but instead was equivalent to the action of a junior water right holder responding to the call of a senior. According to the Master, such a response by Pondera maintained the status quo in the region and allowed the water users to irrigate relatively harmoniously. ¶53 Conversely, the Water Court found the evidence of the travel of some Pondera water to the Flats to indicate historic water use by Pondera on the Flats. It concluded the Flats should be considered within the bounds of the service area because the Flats can be reached by Pondera’s system. ¶54 The Flats area is within the boundary of the service area as currently claimed by Pondera. Both the Water Court and the Master appear to evaluate the issue based on the acts of the irrigators on the Flats. Because we have determined beneficial use in the context of this case is decided not by the acts of the irrigators themselves but by the company through its issuance of shares, we must likewise evaluate the beneficial water use on the Flats by the acts of Pondera. Based on various testimonies it appears the water itself was discharged to irrigators on the Flats. However, it is clear that Pondera’s definite water rights in the Flats area were acquired after July 1, 1973. 29 ¶55 To exclude the Flats from the service area the prima facie status of Pondera’s claim must be overcome by a preponderance of the evidence. Section 85-2-227(1), MCA. In the event the Flats were originally included in the project Pondera can nonetheless lose its right to the area due to nonuse or abandonment. Bailey, 45 Mont. at 178, 122 P. at 583. While the Master anchored his analysis in the irrigators’ beneficial water use, which we reject, we agree with his general outline of the evidence in regard to Pondera’s interaction with users on the Flats, as presented at this stage in the adjudication process. In regard to the Flats, the Master found the evidence supported the following findings: “all of the water use on the Flats before 1973 was non-[Pondera]”; Pondera “accommodated its neighbors, at times . . . effectively honoring their senior rights”; and as quoted from an MCLB report “[Pondera] was ‘inclined to satisfy [non-shareholder water users] in every way possible to prevent controversies over these rights.’” Further, a report generated by Pondera’s predecessor stated the Flats were actually not included in the project. ¶56 To summarize, while there is some evidence of water use by irrigators on the Flats, there is more evidence to support that the Flats were either not included in the project or Pondera’s lack of issuance of stock to water users on the Flats prior to 1973 equates to nonuse in the area. We cannot agree that the Water Court’s legal conclusion that water was beneficially used on the Flats prior to 1973 is correct. Instead, we find Curry met his burden of proof. Therefore, the Water Court’s order regarding the inclusion of the Flats in the service area is reversed. We remand to the court to remove 30 the inclusion of the Flats from the service area and to retabulate the bounds of the service area to the extent the removal of the Flats affects the acreage assessment. ¶57 4. Did the Water Court err by substituting its judgment for the trier of fact in regard to Claim Nos. 41M 162000-00 and 41M 162109-00 (Gray Right), and Claim No. 41M 199797-00? ¶58 Curry argues the Water Court erroneously substituted its judgment for the trier of fact, the Water Master, when it increased the flow rate of the Gray Right from 0.95 cubic feet per second (cfs) to 5.67 cfs. Curry claims there is substantial evidence to support the Master’s finding in regard to the Gray Right. Curry also argues the court erred when it reversed the Master’s dismissal of Claim No. 41M 199797-00 because the Master found the right to be a duplicate of another right claim. Curry contends the court contradicted its determination that Claim No. 41M 199797-00 should be reinstated when during its analysis of other claims it found the right to be duplicative. In response to the Gray Right, Pondera argues the Master’s report contained contradictory findings regarding the flow rates for the rights. It contends the court properly evaluated the flow rate based on ditch capacity measurements. ¶59 A water right’s flow rate is a factual determination. Worden v. Alexander, 108 Mont. 208, 213, 90 P.2d 160, 162 (1939) (quoting Tucker v. Missoula Light & Water Co., 77 Mont. 91, 108, 250 P. 11, 18 (1926)). The Master made a flow rate finding that was subsequently reversed by the court. We first review de novo whether the court correctly applied the appropriate standard of review. Heavirland, ¶ 15. Again, the Water Court is obliged to review the Master’s determination to see whether there is substantial evidence to support the factual findings. If there is substantial evidence the court may still 31 determine the Master was in error if he misapprehended the effect of the evidence. Finally, even if there is substantial evidence and no misapprehension of the evidence, the court may still find clear error if upon viewing the evidence as a whole the court has a firm and definite opinion that a mistake has been made. Skelton Ranch, Inc., ¶ 27. We address the arguments in the order Curry has raised them. A. Gray Right ¶60 Both the Master and the court effectively relied on the same report (the Atwood Report) as evidence to support their respective flow rate determinations. The Atwood Report made conflicting statements regarding the flow rate for this right. The Master found the flow rate to be 0.95 cfs based on the duty of water at the time, which is both a common water law assumption, and is also used in the Atwood Report in reference to this right. The court disagreed and stated the Gray Right, which was originally claimed as 12.5 cfs in the notice of appropriation, should be based on the ditch capacity of 5.67 cfs, which is also stated in the Atwood Report in reference to this right. ¶61 Curry argues first there is substantial evidence to support the Master’s findings, and second the court does not appropriately apply the applicable standard of review because it does not state whether substantial evidence supports the Master’s finding. While it would certainly be useful for the court to use the exact terminology found in the applicable standard of review, the court indeed discussed the substance of the Master’s findings regarding the Gray Right. The court indicated that while the Master’s determination that the evidence showed a flow rate of 0.95 cfs, the Master misapprehended the effect of this evidence. Specifically, the Court stated it was 32 “concerned about the use of a duty of water equivalent to one cfs for 80 acres” for this right. It further looked at the evidence regarding the general duty 0.95 cfs and ditch capacity 5.67 cfs, and found, in light of the latter’s accuracy and relationship to this specific right, ditch capacity more appropriately depicted the extent of the Gray Right. Again, while the court could have more clearly stated its rationale for overturning the Master’s decision, we hold it did in fact apply the appropriate standard of review. ¶62 Next, we turn to the court’s determination of 5.67 cfs. This substitute finding we review under the clearly erroneous standard. Skelton Ranch, Inc., ¶ 26. The evidence available regarding this right, the Atwood Report, makes two competing statements regarding the flow rate. Again, it states the ditch capacity was identified as 5.67 cfs at the time of the ditch’s completion. Yet also, it states the duty of water at that time was one cfs for 80 irrigable acres, a standard water assumption. Thus, based on the 76 irrigable acres under the right, the Atwood Report assumes a 0.95 cfs flow rate to further analyze the right. It does not, however, definitively note that 0.95 cfs was in fact used to irrigate. Further, as the court notes, ditch capacity, when it is available to be determined, is preferable to the standardized duty of water assumption. See McDonald, 220 Mont. 519, 722 P.2d 598. Therefore, based on the substance of the evidence regarding this right and in light of the evidence as a whole, we hold the court’s finding of 5.67 cfs for the Gray Right is not clearly erroneous. B. Claim No. 41M 199797-00 ¶63 The court’s finding that Claim No. 41M 199797-00 should not be dismissed because it was not duplicative is a legal conclusion that we review for correctness. 33 Heavirland, ¶ 14; see also State v. Todd, 262 Mont. 108, 112, 863 P.2d 423, 425 (1993). The court properly set forth that a water claim is prima facie proof of its contents. Section 85-2-227(1), MCA. To overcome the prima facie proof, the burden of proof is upon the challenger to produce enough contrary evidence to meet the evidentiary standard of a preponderance of the evidence. Marks, ¶ 15. The court found the challenger, Curry, did not meet this burden of proof and the Master’s determination was not supported, thus the claim should not be dismissed. Upon review of the record, we agree with the court’s conclusion. Therefore, we affirm its decision to reverse the Master’s dismissal and reinstate Claim No. 41M 199797-00. ¶64 5. Should the Water Court’s tabulation for Claim Nos. 41M 131103-00 (Curry claim) and 41M 199796-00 (Pondera claim) include volume measurements? ¶65 Pondera contends on cross-appeal that the tabulations for the Curry and Pondera claims should both include volume measurements. Pondera argues a volume determination would “greatly assist in the proper administration of water on Birch Creek by the district court and significantly lessen the chances of ongoing distribution disputes.” ¶66 In regard to volume determinations the WUA states, in part, a final decree must state the “flow rate and volume for rights that a water judge determines require both volume and flow rate to adequately administer the right.” Section 85-2-234(6)(b)(iii), MCA. The decision by the Water Court to limit a water right by volume is a matter of discretion. Section 85-2-234(6)(b), MCA. While we recognize a volume determination may potentially be helpful to Pondera and the ultimate administration of these rights, we 34 are aware of no Montana law, and Pondera has not provided us with any, that requires the Water Court to make a volume determination for these rights. Such a determination is in the purview of the Water Court and we will not substitute our judgment for the court’s judgment when it is not required by law. Therefore, the Water Court’s tabulation of these Curry and Pondera claims without a volume determination is affirmed. CONCLUSION ¶67 In summary, we affirm the Water Court’s conclusion that Pondera’s rights are not limited by the shareholders’ actual historical acreage irrigated. We further affirm the Water Court’s conclusion that Pondera is entitled to a service area. However, we hold the Water Court erred when it determined the acreage included in the service area and we remand this issue to the court for further proceedings in accord with the discussion and decision under Issue 3. ¶68 With respect to Curry’s appeal and Pondera’s cross-appeal regarding the specific water rights, Issues 4 and 5, we hold the Water Court did not err in its determinations. ¶69 Affirmed in part; reversed in part; and remanded to the Water Court for further proceedings consistent with this Opinion. /S/ MICHAEL E WHEAT We Concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA /S/ JIM RICE 35 Justice Beth Baker, specially concurring. ¶70 I concur in the Court’s decision and write separately to emphasize several points. ¶71 I agree with the Court’s application of Bailey in holding that Pondera’s water rights are not measured by the stockholders’ actual historic water use. Bailey makes clear that a public service corporation’s water rights are limited by beneficial use—as are all water rights in Montana. Bailey, 45 Mont. at 178, 122 P. at 583 (concluding that a public service corporation “must have an intention to apply the water to a useful and beneficial purpose”). Bailey clarifies further that a public service corporation’s beneficial use is not measured by the acts of the shareholders, but rather, by the acts of the public service corporation. Bailey, 45 Mont. at 178, 122 P. at 583 (concluding that a public service corporation’s water right “cannot be made to depend for its existence in the first instance upon the voluntary acts of third parties”). ¶72 Bailey held unequivocally that, by express language in Montana’s constitution, appropriating water for sale is a beneficial use. Bailey, 45 Mont. at 175, 122 P. at 582. This principle remains true under the 1972 Constitution. Mont. Const. art IX, § 3. Provided that Pondera had a bona fide intention “to apply the water to a useful or beneficial purpose,” its appropriation was complete when it “fully complied with the statute and ha[d] its distributing system completed[, was] ready and willing to deliver water to users upon demand, and offer[ed] to do so.” Bailey, 45 Mont. at 177-78, 122 P. at 583. Unlike in Toohey v. Campbell, 24 Mont. 13, 18, 60 P. 396, 397 (1900), where the squatter Flannery did not show intent, and “could not possibly” have intended, to use water upon a larger area than the portion he actually cultivated, the state engineer’s report 36 and Carey Land Board’s approval of the project are sufficient evidence of Pondera’s bona fide intention to support the Water Court’s decision to cap Pondera’s irrigated acreage at 72,000. ¶73 As the Water Court acknowledged and this Court points out, however, a water service entity’s right may be lost by nonuse or abandonment. Opinion, ¶ 34; Bailey, 45 Mont. at 178, 122 P. at 583. The Water Master recognized in his report, “The parties did not raise or brief the partial abandonment issue that 34 years of non-use of several thousand acre-feet suggests, along with possible late-priority use rights, but it could become an issue when Basin 41M is adjudicated.” That Pondera continues to provide water for sale by offering its shares of stock does not foreclose Curry or other objectors from attempting to show in the adjudication process that Pondera has lost its priority to sufficient water for irrigating 72,000 acres. At that point, evidence of the amount of water actually applied to irrigation certainly will be relevant. There also may be relevant evidence, not before us in this record, regarding how Pondera’s issued stock represents water it actually sold. But the Water Court correctly applied the law when it concluded that the actual historical use by irrigators was not the measure of Pondera’s right in the first instance. Bailey, 45 Mont. at 177, 122 P. at 583 (recognizing “the right of a public service corporation to make an appropriation independently of its present or future customers, and to have a definite time fixed at which its right attaches”). ¶74 The same principles hold true for defining the limits of Pondera’s service area. The Court properly declines to define the boundaries and size of the service area “in this Opinion and at this stage in the adjudication process.” Opinion, ¶ 50. Its conclusion that 37 the service area should be determined in part by “the project as it was developed and completed, and by the lands identified by the MCLB,” does not foreclose further arguments in the adjudication process concerning the size of Pondera’s place of use, or service area. ¶75 The evidence demonstrates that the Carey Land Board based its determination of the project’s boundaries on the “lands available for irrigation at the time the corporation’s system [was] completed.” Bailey, 45 Mont. at 176, 122 P. at 583. The Board’s determination, however, does not consider whether Pondera lost its right through “abandonment or nonuser for an unreasonable length of time.” Bailey, 45 Mont. at 178, 122 P. at 583. Furthermore, it is indisputable that a water user who has been decreed the right to use a certain [amount] of water upon lands for which a beneficial use has been proven, cannot subsequently extend the use of that water to additional lands not under actual or contemplated irrigation at the time the right was decreed, to the injury of subsequent appropriators. Quigley v. McIntosh, 110 Mont. 495, 505, 102 P.2d 1067, 1072 (1940). Although Quigley did not involve a public service corporation, the underlying principle that “place of diversion, or place or purpose of use, may be changed only ‘if others are not thereby injured,’” Quigley, 110 Mont. at 505, 102 P.2d at 1072 (quoting sec. 7095, RCM (1935)), applies to all appropriators. The Court’s holding on the Birch Creek Flats issue, Opinion, ¶¶ 54-55, reflects a similar rationale. /S/ BETH BAKER 38 Justice Jim Rice and Justice Patricia O. Cotter join in the concurring Opinion of Justice Baker. /S/ JIM RICE /S/ PATRICIA COTTER Justice Laurie McKinnon, dissenting. ¶76 I respectfully dissent from the Court’s opinion. I would reverse the Water Court’s opinion regarding Pondera’s annual irrigation and place of use. I would affirm the Water Master’s finding limiting Pondera’s annual irrigation to 56,556 acres. I would affirm the Water Master’s finding limiting Pondera’s place of use to the approximately 85,000 acres described on the share certificates. I would reinstate the Water Master’s order requiring Pondera to comply with Curry’s discovery request to produce the share certificates. I. ¶77 The standard adage teaches us that “hard cases make bad law.” Northern Securities Co. v. United States, 193 U.S. 197, 364 (1904) (Holmes, J., dissenting). Today the Court reinforces the adage. Several issues make this case quite difficult to discuss and decide with any amount of clarity. First, the parties litigated this case—regarding Pondera’s annual irrigation and place of use—as if Pondera has a single appropriation. As a consequence, the Water Master and the Water Court both analyze Pondera’s water rights in the collective regarding these two issues. We are now forced to do the same. The problem with this methodology is that the rules of water law were intended to deal with individual appropriations and do not lend themselves to limiting appropriations as a 39 whole, particularly with a public service corporation where the original intent of each of the individual appropriators is of the utmost importance. ¶78 Second, the Water Court uses the term “service area” as if it is a term of art and fails to provide an actual definition for the term. Service area is not a recognizable term in Montana law or western water law and does not have a specific definition. Because the Water Court fails to define the term, it is inherently challenging to determine whether Pondera is entitled to a “service area” and even more challenging to define the limits.1 ¶79 Third, both Curry and Pondera misread this Court’s seminal decision in Bailey. On one hand, Curry maintains that under Bailey—even for a public service corporation— actual beneficial use is a necessary prerequisite to a completed appropriation and an appropriator cannot obtain an appropriation of water in an amount greater than actual beneficial use. However, in Bailey, the public service corporation was permitted a water right in the amount of 2,200 miner’s inches despite only actually beneficially using 1,430 miner’s inches. Pondera, on the other hand, contends that Bailey recognizes that offering water for sale is a beneficial use for a public service corporation. Bailey cannot be read to stand for such a proposition. Such a view, if adopted, would fundamentally alter Montana water law, leading to unchecked speculation without any requirement that water be actually used. As explained more fully below, Bailey does not recognize that offering 1 The term is an engineering term, not a water law term. Because the term merely adds confusion, I would suggest not adding it to this Court’s lexicon. It is not as if we need to create a new term because Pondera does not have a place of use. Both the Water Master and the Water Court agree Pondera has a place of use. The Water Master found Pondera’s place of use to be an approximately 85,000 acre area and the Water Court found it to be an approximately 377,000 acre area. 40 water for sale is a beneficial use. Instead, Bailey adopts principles consistent with the so-called “growing communities” doctrine wherein a water right may be perfected based on future beneficial use, rather than actual beneficial use. Thus, neither party has advanced an interpretation of Bailey which assists in resolving the particular issues here and which maintains the integrity of certain basic principles of western water law and water law long recognized in this State. ¶80 Fourth, in addition to delineating a place of use, the Water Court and the Water Master both place an annual acreage limitation on Pondera’s water rights. The elements of an appropriative water right are: (1) quantity of water, typically expressed in flow rate (cubic feet per second) and/or volume (acre-feet); (2) place of use (total acreage); (3) period of use (months, days); (4) point of diversion (legal description); (5) purpose of use (e.g., irrigation, domestic, culinary use, commercial use, or otherwise); and (6) priority date of the appropriation (date). An annual acreage limitation does not fit into any of these categories. While annual acres irrigated is a necessary component in determining flow rate, volume, and place of use, the parties do not offer any authority to support incorporation of an annual acreage limit as an express element of an appropriative water right. Nor do the parties explain why the Water Master and the Water Court did so in this case.2 2 The Water Master was concerned with Pondera’s total volume. And, in addition to the express limitation on annual irrigation, the Master used Pondera’s annual irrigation to limit volume, concluding that Pondera’s volume is limited to the “amount needed to provide 1.5 af/acre for 56,556 irrigated acres plus a reasonable amount for transportation and evaporation losses of 30%.” The Water Court’s opinion does not appear to contain a similar volume limitation. It is unclear whether the volume limitation now exists on Pondera’s water rights. I will discuss the 41 ¶81 Fifth, the Water Court removed jurisdiction of this case from the Water Master prior to the Master finishing its proceedings. While the Water Master issued a report with findings of fact and conclusions of law, the Water Master stayed its final determination until Pondera produced the share certificates pursuant to Curry’s discovery request. As a result, the Water Master did not complete a tabulation of Pondera’s water rights and its final conclusions are necessarily incomplete. We are thus left to guess regarding the Master’s final disposition of Pondera’s water rights. ¶82 Lastly, the Water Court fails to articulate the standard of review it used to consider and ultimately reverse the Water Master regarding the two most salient issues on appeal: the annual acreage limitation and place of use. Although the Water Court carefully and prudently reviewed other issues in the Water Master’s report, with respect to these two issues, there is noticeably absent any language in the Water Court’s opinion indicating whether the Water Master clearly erred in making a certain finding of fact, misapprehended the effect of certain evidence, or otherwise misapplied applicable law. The most that can be gleaned from the Water Court’s opinion is that the Water Court appears to conclude that the Water Master erred by failing to grant Pondera a “service area,” while nonetheless concluding that the “Master’s decision amounted to creation of a service area.” Thus, rather than having the benefit of another court’s review prior to our own, we are essentially left with two standalone opinions. annual limitation as if it is a basis to limit volume—though it is unclear if that is why the parties dispute the annual acreage or if the parties merely dispute the annual acreage as an independent element of the water rights. 42 II. ¶83 Given the aforementioned difficulties, I will nevertheless endeavor to set forth why the principles the Court announces here today cannot withstand scrutiny and will ultimately be proven unsound in future cases. I offer my analysis with the hope that when these principles are revisited—which I believe to be certain—parties may brief their arguments accordingly. ¶84 Our decision in Bailey enunciates most of the applicable law in determining the extent of Pondera’s water rights. Read without context, Bailey is a difficult case to decipher. However, read in the broader context of background principles of western water law, Bailey is a straightforward decision. In Bailey, this Court broke from traditional principles of water law—requiring actual beneficial use to perfect a water right—and adopted principles consistent with the so-called “growing communities” doctrine. The growing communities doctrine is an infrequently invoked exception to the common law requirement of actual beneficial use for perfection of a water right, which permits appropriators—typically only municipalities—to perfect a water right based on anticipated future or contemplated beneficial use. ¶85 Before addressing the issues on appeal, I will address the governing law by: first, laying out traditional principles of the prior appropriation doctrine; second, discussing the limited exception to those principles, i.e., the growing communities doctrine; and finally, discussing Bailey. Traditional Water Law: The Requirement of Actual Beneficial Use and a Completed Appropriation 43 ¶86 Fundamental to water law in the west is the principle that “beneficial use shall be the basis, the measure and the limit of all rights to the use of water.” McDonald v. State, 220 Mont. 519, 530, 722 P.2d 598, 605 (1986) (emphasis in original). “State constitutions, statutes, and judicial decisions throughout the western states recognize the concept.” A. Dan Tarlock, et al., eds., Water Resource Management: A Casebook in Law & Public Policy 195 (4th ed. 1993). ¶87 Equally important to the prior appropriation doctrine is the principle that “application of water to beneficial use is essential to a completed appropriation.” State ex rel. State Eng’r v. Crider, 78 N.M. 312, 315, 431 P.2d 45, 48 (1967). “Judicial opinions and scholarly commentators have repeatedly stated the rule that application to a beneficial use is the touchstone of the appropriation doctrine.” In re Adjudication of Existing Rights to the Use of all Water, 2002 MT 216, ¶ 10, 311 Mont. 327, 55 P.3d 396. In Montana, like all other western states, to complete a valid appropriation an appropriator must: (1) demonstrate a bona fide intention to apply the water to some existing or contemplated beneficial purpose, and (2) actually beneficially apply the water to the intended lands. Toohey v. Campbell, 24 Mont. 13, 14, 60 P. 396, 396 (1900); In re Adjudication of Existing Rights to the Use of all Water, ¶ 10 (“the true test of appropriation of water is the successful application thereof to the beneficial use designed”). Both elements need not occur simultaneously. Rather, an appropriator is permitted a reasonable amount of time to actually apply the water to the intended lands. McDonald, 220 Mont. at 529, 722 P.2d at 604. However, until the appropriator perfects his water right by actual use, the appropriator holds only an “inchoate right” to the 44 water.3 Mont. Dep’t of Natural Res. & Conservation v. Intake Water Co., 171 Mont. 416, 436, 558 P.2d 1110, 1121 (1976). Thus, the ultimate “application of the water to the intended beneficial use is the final step taken by the appropriator in acquiring an appropriative right” and the “[a]pplication of the water to such use is absolutely essential to acquisition of the right.” 1 Wells A. Hutchins, Water Rights Laws in the Nineteen Western States 442 (1971) (hereinafter, Hutchins) (emphasis added). ¶88 As a necessary corollary, the extent of the appropriation is measured by: (1) the appropriator’s bona fide intent at the time of the appropriation, and (2) the appropriator’s actual beneficial use at the time of perfection. Jacobs v. Harlowton, 66 Mont. 312, 320, 213 P. 244, 246 (1923). In turn, actual beneficial use is limited by: (1) the needs of the appropriator and (2) the capacity of the diversion. Skelton Ranch, Inc. v. Pondera Cty. Canal & Reservoir Co., 2014 MT 167, ¶ 55, 375 Mont. 327, 328 P.3d 644. “If an appropriator’s needs exceed the capacity of his means of diversion . . . then the capacity of the diversion measures the extent of his water right.” Skelton Ranch, ¶ 55. Accordingly, an appropriator’s water right is measured by the lesser of the following: (1) the appropriator’s bona fide intent at the time of the appropriation; (2) the actual needs of the appropriator at the time of perfection; and (3) the capacity of the diversion at the time of perfection.4 3 An inchoate water right is “an incomplete appropriative right in good standing.” Hutchins, 226. 4 In McDonald, this Court expressly recognized that these principles are enshrined in the Montana Constitution, stating: 45 Growing Communities Doctrine: The Exception from Actual Beneficial Use and the Reservation of Water for Future Needs ¶89 “Municipalities occupy a unique place in the water appropriation philosophy of the West.” Hutchins, 245. As western municipalities grew both in number and in population, “it became the accepted practice to give them special treatment in appropriating water for the service of their inhabitants.” Hutchins, 246. The growing communities doctrine affords municipalities such special treatment by breaking from the fundamental rule of the prior appropriation doctrine requiring prior actual beneficial use. As such, the doctrine is generally “characterized as a subset of the prior appropriation doctrine.” Janis E. Carpenter, Symposium on Northwest Water Law: Water for Growing Communities: Refining Tradition in the Pacific Northwest, 27 Envtl. L. 127, 134-35 (1997) (hereinafter, Carpenter, Symposium on Northwest Water Law). ¶90 Under the growing communities doctrine, the traditional requirement of actual beneficial use is relaxed, permitting “cities to perfect a water right to the amount of water The foregoing cases and many others serve to illustrate that what is preserved to owners of appropriated or decreed water rights by the provision of the 1972 Constitution is what the law has always contemplated in this state as the extent of a water right: such amount of water as, by pattern of use and means of use, the owners or their predecessors put to beneficial use. Thus an owner may have a decreed right to a certain number of miner’s inches of water; or a statutory appropriative right to a stated amount; or a right depending upon mere use; or even a prescriptive right to a stated amount; nonetheless, the Water Use Act contemplates that all water rights, regardless of prior statements or claims as to amount, must nevertheless, to be recognized, pass the test of historical, unabandoned beneficial use. . . . To that extent only the 1972 constitutional recognition of water rights is effective and will be sustained. McDonald, 220 Mont. at 529, 722 P.2d at 604. 46 that they will need to meet reasonably anticipated future growth.” A. Dan Tarlock, Law of Water Rights and Resources § 5:71 (2015) (hereinafter, Tarlock). The theory of the “doctrine reflects a concept of constructive beneficial use because it includes an amount of probable future municipal use, as well as actual use.” Dep’t of Ecology v. Theodoratus, 135 Wash. 2d 582, 615, 957 P.2d 1241, 1257 (1998) (Sanders, J., dissenting) (quoting Carpenter, Symposium on Northwest Water Law, 27 Envtl. L. at 136) (internal quotation marks omitted) (emphasis added). ¶91 The growing communities doctrine is generally recognized throughout the western states. See State ex rel. Reynolds v. Rio Rancho Estates, Inc., 95 N.M. 560, 564, 624 P.2d 502, 506 (1981) (“When determining the extent of a municipal water right, it is appropriate for the court to look to a city’s planned future use of water from the well caused by an increasing population.”); City & Cnty. of Denver v. Northern Colo. Water Conservancy Dist., 130 Colo. 375, 384, 276 P.2d 992, 997 (1954) (“when appropriations are sought by a growing city, regard should be given to its reasonably anticipated requirements.”); Hutchins, 246-49 (discussing the growing communities doctrine and the various ways different states allow municipalities to “appropriate water for contemplated future reasonable needs”) (emphasis added). The Montana Legislature has codified the growing communities doctrine in § 85-2-316, MCA, which provides, in part: “The state, any political subdivision or agency of the state . . . may apply to the department to 47 acquire a state water reservation for existing or future beneficial uses . . . .” (Emphasis added.)5 ¶92 However, the “doctrine is not without limits.” Tarlock, § 5:71. An appropriation under the doctrine is limited in the same way as a traditional appropriation, with the exception of a relaxed allowance for anticipated needs. Under the doctrine, an appropriation is measured by the lesser of: (1) the appropriator’s bona fide intent at the time of the appropriation; (2) the reasonably anticipated needs (rather than the actual needs); and (3) the capacity of the diversion. Pagosa Area Water & Sanitation Dist. v. Trout Unlimited (In re Application for Water Rights), 170 P.3d 307, 314-17 (Colo. 2007);6 Theodoratus, 135 Wash. 2d at 609-10, 957 P.2d at 1254 (Sanders, J., dissenting). ¶93 Additionally, unlike traditional appropriations, courts impose a condition subsequent on the right, requiring that the “water must be actually applied to beneficial use within a reasonable period of time.” Tarlock, 5:71. If the appropriator fails to apply the water right to actual beneficial use within a reasonable period, the water right is lost. Tarlock, 5:71. See also Crider, 78 N.M. at 316, 431 P.2d at 49 (“We add, however, that 5 The Department of Natural Resources and Conservation is required to review an appropriator’s reservation every ten years under the statute to determine whether the objectives of the reservation are still being served. All parties agree that Pondera cannot avail itself of § 85-2-316, MCA, because it is not a state entity. 6 Colorado deals with future water appropriations through the use of “conditional” water rights. Although I discuss a water right acquired under the doctrine as if it is a completed or a perfected water right, I also explain below that a “condition subsequent” is imposed on the right— requiring that it be put to beneficial use within a reasonable time—which arguably makes the water right a conditional right. Based on the legal issues presented and the facts of this case, it is inconsequential what a right acquired under the doctrine is labeled. Thus, though I speak of a right acquired under the doctrine as a completed or perfected water right, I leave open the possibility that the right may be better characterized in future cases as a conditional water right. 48 the cities’ rights to the appropriation of water for future use is subject to the condition that the needed water be applied to beneficial use within a reasonable time. If not so applied such right may be lost.”). ¶94 The growing communities doctrine thus seeks to establish a balance between preserving use of water for actual use and the need for development in the arid west. Nonetheless, the “doctrine clearly conflicts with the basic common law tenet of prior beneficial use and can only be viewed as an exception.” Darryl V. Wareham, Washington Water Rights Based on Actual Use or on Delivery System Capacity? Department of Ecology v. Theodoratus, 24 Seattle Univ. L. R. 187, 205 (2000). Consequently, the growing communities doctrine typically applies only to municipalities. Hutchins, 382 (explaining that, to the best of the author’s knowledge, applying the doctrine outside of municipalities has “[n]ever . . . been sanctioned by any high court in the West.”); but see Theodoratus, 135 Wash. 2d at 617, 957 P.2d at 1258 (Sanders, J., dissenting) (contending that the “doctrine is equally applicable to private developments.”). Because the doctrine breaks from bedrock principles of actual beneficial use, an appropriator’s attempt to perfect a water right in an amount for future beneficial use is often met with both skepticism and resistance from courts. See, e.g., Pagosa Area Water & Sanitation Dist., 170 P.3d at 317 (explaining that the “water court should closely scrutinize a governmental agency’s claim” for future beneficial use). Bailey 49 ¶95 In Bailey, this Court adopted the principles of the growing communities doctrine for a public service corporation. Aside from extending the doctrine outside the applicability of only municipalities, Bailey is typical in its understanding of the doctrine. ¶96 In Bailey, a public service corporation sought to perfect a water right larger than the amount the corporation had put to beneficial use, attempting to perfect a water right in the amount of 2,200 miner’s inches when the company had only ever sold 1,430 miner’s inches for beneficial use. Bailey, 45 Mont. at 162, 122 P. at 577. In accordance with traditional prior appropriation principles, the objectors maintained that the company’s appropriation should be limited by actual beneficial use to 1,430 miner’s inches. Bailey, 45 Mont. at 160, 122 P. at 576. ¶97 This Court disagreed. We addressed the following issues: (1) whether an appropriator could perfect a water right for future or contemplated beneficial use; (2) when such a right is perfected for a public service corporation; and (3) the measure and extent of a perfected right that is based on future or contemplated beneficial use. Bailey, 45 Mont. at 166, 122 P. at 579. ¶98 Before reaching our conclusion on the issues, we discussed the parties’ varying views on whether actual beneficial use is necessary to perfect a water right for a public service corporation. We explained that under the corporation’s “theory thus advanced, the claimant who proceeds under the statute, and performs the acts required as set forth [in the statute], has a completed appropriation of water upon the completion of the work on his ditch, canal, or other means of diversion, even before the water is actually applied to a beneficial use.” Bailey, 45 Mont. at 174, 122 P. at 582 (emphasis added). We 50 contrasted this view with the traditional principles advanced by the objectors wherein “it is held that actual application of the water to a beneficial use is a necessary prerequisite of a completed appropriation.” Bailey, 45 Mont. at 174, 122 P. at 582 (emphasis added). We rejected the latter view “as to a public service corporation” because the “public policy of this state [is] to encourage these public service corporations” to develop the arid regions and corporations would be unwilling to do so without the certainty of a completed appropriation. Bailey, 45 Mont. at 177, 122 P. at 583. ¶99 We made the following holdings. First, we agreed with the corporation that it could perfect a water right based on future beneficial use, explaining that, while the statute requires “beneficial use,” the beneficial use “may be prospective or contemplated.” Bailey, 45 Mont. at 175, 122 P. at 582. Second, we held that “as to a public service corporation, its appropriation is complete when it has fully complied with the statute and has its distributing system completed and is ready and willing to deliver water to users upon demand, and offers to do so.” Bailey, 45 Mont. at 177-78, 122 P. at 583. Lastly, we concluded that the extent of the appropriation is limited by: (1) the corporation’s “bona fide intention at the time” the appropriation is made; (2) the corporation’s reasonably anticipated “needs”; and (3) the “capacity” of the corporation’s diversion. Bailey, 45 Mont. at 178-79, 122 P. at 583-84. We further imposed a condition subsequent on the right, concluding that the right may be lost by “nonuser for an unreasonable length of time.” Bailey, 45 Mont. at 179, 122 P. at 584. ¶100 Therefore, Bailey expressly acknowledged that actual beneficial use is not required for a public service corporation to complete an appropriation of water and made 51 clear that a public service corporation may perfect a water right based upon anticipated future beneficial use. Bailey also made clear that a right perfected based upon anticipated future beneficial use is not without limits, expressly imposing a requirement that the water, within a reasonable length of time, be put to actual beneficial use. In doing so, Bailey embraced principles inherent in the growing communities doctrine and balanced the preservation of water for actual use with the need for development in the arid west. III. ¶101 Having developed the applicable law and explained Bailey in the context of the broader principles of water law, I will address the issues presented by the instant appeal. (1) Whether the Water Court correctly concluded that the Water Master clearly erred in finding that Pondera’s water rights are limited to an annual irrigation of 56,556 acres. ¶102 Curry argues that the Water Court erred in reversing the Water Master’s finding that limits Pondera’s annual irrigation to 56,556 acres. He maintains that Pondera’s water rights should be “limited by the extent of historic[al] beneficial use” and the “maximum extent of Pondera’s beneficial use of water is for the irrigation of 56,556 acres.” ¶103 Pondera appears to agree with Curry that its annual irrigation is limited by historical beneficial use, but disagrees with Curry over the meaning of beneficial use. Pondera maintains that it has historically put 72,000 acres per year to beneficial use by issuing its shares of stock. Relying on Bailey and the Montana Constitution, Pondera reasons that its ready availability of the water for sale to the irrigators is a beneficial use. 52 ¶104 We initially review the Water Court’s order de novo. Skelton Ranch, ¶ 26. Our de novo review begins by determining whether the Water Master’s findings are clearly erroneous. Skelton Ranch, ¶ 38. “The Water Court does not have unfettered discretion in reviewing a master’s findings.” Skelton Ranch, ¶ 69 (Baker, J., concurring in part and dissenting in part). “Differences of opinion or interpretation regarding evidentiary issues cannot constitute clear error.” Skelton Ranch, ¶ 69 (Baker, J., concurring in part and dissenting in part). Rather, “[s]tated more colorfully, a clearly erroneous finding of fact must strike the reviewing court as wrong ‘with the force of a five-week-old, unrefrigerated dead fish.’” Skelton Ranch, ¶ 69 (Baker, J., concurring in part and dissenting in part) (quoting Parts & Elec. Motors, Inc. v. Sterling Elec., Inc., 866 F.2d 228, 233 (7th Cir. 1988)). ¶105 I agree with Curry that the Water Master did not clearly err by limiting Pondera’s water rights based on Pondera’s historical beneficial use. In the case of a public service corporation,7 a valid appropriation is limited by: (1) the appropriator’s bona fide intention at the time the appropriate is made; (2) the appropriator’s reasonably anticipated needs; and (3) the capacity of the appropriator’s infrastructure.8 Bailey, 45 Mont. at 178-79, 122 P. at 583-84. (a) Bona fide intent 7 Curry does not dispute that Pondera is a public service corporation within the meaning of Bailey. 8 I do not address the capacity limitation below. It is unclear from the record the extent of Pondera’s system. 53 ¶106 This Court has “long recognized the importance of an appropriator’s intent at the time of appropriation.” Teton Co-Op Canal Co. v. Teton Coop Reservoir Co., 2015 MT 344, ¶ 33, 382 Mont. 1, __ P.3d __. An appropriator’s “intent at the time of appropriation must be determined by his act[s] and by surrounding circumstances, its actual and contemplated use, and the purpose thereof.” Wheat v. Cameron, 64 Mont. 494, 501, 210 P. 761, 763 (1922). An appropriator’s bona fide intent must be objectively reasonable and “not mere expressions of hope or desire reflecting a ‘gleam-in-the-eye philosophy’ regarding future use of the water.” In re Adjudication of the Existing Rights Within the Clark Fork River Drainage Area, 274 Mont. 340, 908 P.2d 1353, 1355 (1995). While an appropriator’s bona fide intent may be based upon future use, his intent cannot be based on “mere future speculative profit or advantage.” Toohey, 24 Mont. at 17, 60 P. at 397. Rather, the appropriator’s intent must be “bona fide” and cannot be a “mere afterthought.” Bailey, 45 Mont. at 178, 122 P. at 583. “The intention of the claimant is therefore a most important factor in determining the validity of an appropriation of water.” Miles v. Butte Elec. & Power Co., 32 Mont. 56, 67, 79 P. 549, 553 (1905). Accordingly, it “becomes the duty of the courts to try the question of the claimant’s intent,” and thereby separate bona fide intent from mere future speculation. Miles, 32 Mont. at 67, 79 P. at 554. ¶107 Here, the passage of time afforded the Water Master with over a hundred years of hindsight to help decipher bona fide intent from mere future speculation. The Water 54 Master made express findings regarding Pondera’s annual irrigation.9 The Master found that in the 100 year time span between 1884 and 1994 the most Pondera beneficially irrigated in any year was 56,556 acres, which the Master found occurred in 1921. The Master further noted that—prior to the installation of sprinkler systems in the 1990s and the subsequent acquisition of lands in the 2000s—Pondera’s system peaked in 1921. Summarizing the Water Master’s findings of beneficial use by decade, the Master found that Pondera’s maximum annual irrigation was 49,278 acres in the 1910s; 56,556 acres in the 1920s; 46,517 acres in the 1930s; 42,804 acres in the 1940s; 25,941 acres in the 1950s; 37,378 acres in the 1960s; 44,505 acres in the 1970s; and 51,006 acres in the 1980s. ¶108 Pondera’s historical beneficial use provided the Water Master with overwhelming evidence of intent. While there may be some room for disagreement in trying the original appropriators’ bona fide intent, sufficient evidence supports the Master’s finding that limits Pondera’s water rights to an annual irrigation of 56,556 acres. Pondera’s beneficial use in the hundred years following the undertaking of original appropriations—wherein the most Pondera irrigated in a single year was 56,556 acres—provided substantial evidence of an intent to irrigate no more than 56,556 acres per year. Additionally, there is no evidence in the record demonstrating that the original appropriators—at the time they undertook their respective appropriations—desired to irrigate 72,000 acres per year. Furthermore, even if evidence did exist in the record showing an initial desire to irrigate 9 I frequently use “Pondera” in this section to also include its predecessors, but also use “original appropriators” and “Pondera’s predecessors” as well when emphasizing that original intent is the limiting factor of a water right. 55 that amount annually, the last 130 years make clear that such a desire was an expression of conjecture, reflecting a “gleam-in-the-eye philosophy” regarding the future use of the water. Substantial evidence supports the Water Master’s finding. The Water Master did not clearly err by limiting Pondera’s water rights based on historical evidence of beneficial use. ¶109 Our decision in Bailey does not require a different result. First, and foremost, unlike in Bailey, where this Court determined the corporation’s bona fide intent based on 20 years of evidence, in the present case, we are 130 years removed from the undertaking of the original appropriations. As a result, we have considerable more evidence of bona fide intent than we had in Bailey. The importance of the 130 years of retrospection to the task of determining bona fide intent cannot be overstated. Second, the facts differ greatly from those in Bailey. In Bailey, the original appropriators expressed a desire to appropriate 5,000 miner’s inches when they undertook the appropriation; the corporation built a ditch with a capacity of 2,200 miner’s inches within 4 years; and the corporation put 1,430 miner’s inches to actual beneficial use within 15 years. Bailey, 45 Mont. at 161-65, 122 P. at 577-78. Here, the original appropriators did not express a desire to irrigate 72,000 acres per year when they undertook the appropriations; Pondera did not have the ability to irrigate 72,000 acres per year until 60 years after the undertaking of the appropriations; and Pondera has failed to put water to beneficial use on 72,000 acres in any year within the last 130 years. Bailey is readily distinguishable from the present case. The Water Court erred by concluding that the Water Master clearly erred in limiting Pondera’s irrigation rights to 56,556 acres per year when substantial evidence 56 exists in the record showing that Pondera’s predecessors did not have a bona fide intent to irrigate more than that amount per year. (b) Reasonably Anticipated Needs ¶110 The requirement that an appropriator demonstrate that his reasonably anticipated needs require the use of water and the requirement of bona fide intent are closely related. The reasonably anticipated needs of an appropriator limit the water right “irrespective of the excessive size or number of ditches by him constructed or the amount of water claimed.” O’Shea v. Doty, 68 Mont. 316, 320, 218 P. 658, 659 (1923). ¶111 Here, the evidence of Pondera’s historical beneficial use—showing over a hundred years of irrigating less than 56,556 acres per year—is also relevant to Pondera’s reasonably anticipated needs. Additionally, Pondera’s outstanding shares—the number of shares held by the landowners—may have also been relevant to this inquiry. However, both the outstanding shares and treasury shares were unavailable to the Water Master.10 Despite discovery requests from Curry and a subsequent order by the Water Master, Pondera steadfastly refused to provide its stock certificates. Curry seemingly did manage to procure copies of Pondera’s stock certificates for the year 1948, however, and introduce the certificates into evidence. Based on this information, the Master found that, 10 I use the term “issued shares,” as did the Water Master, to denote the sum of the “outstanding shares” and the “treasury shares.” An “outstanding share” is a share of a corporation that has been authorized, issued, and purchased by subscribers and held by them. Black’s Law Dictionary 1643 (Bryan A. Garner ed., 10th ed. 2014). A “treasury share” is a share of a corporation that has been authorized, issued, but retained or reclaimed by the corporation. Black’s Law Dictionary at 1643. Thus, I use the term outstanding shares to represent the shares sold and held by the landowners, and I use the term treasury shares to represent those shares that are held by Pondera. Although there seems to be some confusion over the meaning of these terms, this appears to be the way in which the parties generally understood the terminology. 57 in 1948, Pondera issued approximately 72,000 shares of stock. The Master also found that—of the approximately 72,000 shares issued—only 54,213 shares were outstanding. As the stock certificates were unavailable, the record does not reveal when, if ever, Pondera sold the full 72,000 issued shares to landowners. Testimony from Fay Stokes, the former general manager of Pondera, indicated that prior to the installation of sprinkler systems, Pondera was unable to sell the shares because of a lack of demand by landowners. The available evidence of Pondera’s needs further demonstrates that the Water Master did not clearly err by limiting Pondera’s water rights based on historical beneficial use. ¶112 Pondera persists that the Water Master and Curry are incorrect in their understanding of Pondera’s historical beneficial use. Pondera maintains that it has historically put 72,000 acres per year of water to beneficial use since 1953, reasoning that issuing stock up to its allowed acreage maximum as authorized by the MCLB is a beneficial use. Pondera maintains that both Bailey and the Montana Constitution expressly recognize this principle. ¶113 Pondera’s reliance on Bailey and the Montana Constitution is misplaced. While Bailey arguably recognized that the “sale of water” for a beneficial use is itself a beneficial use, Bailey certainly did not recognize that “offering to sell water” is a beneficial use. Contrary to Pondera’s understanding, this Court in Bailey did not permit the public service corporation, at issue there, a water right in the amount of 2,200 miner’s inches—in lieu of 1,430 miner’s inches—based upon the principle that offering to sell water is an actual beneficial use. Rather, the Court permitted the corporation the 58 additional 770 miner’s inches because it recognized that a completed appropriation for a public service corporation could rest on future beneficial use; that is to say, the future sale of water to irrigators to be put to beneficial use. Whether the 770 miner’s inches in Bailey is characterized as future beneficial use, contemplated beneficial use, prospective beneficial use, or constructive beneficial use, it does not represent actual beneficial use. That Pondera has continually offered water for sale on 72,000 acres per year is not representative of its existing beneficial use. Pondera’s actual beneficial use is represented by the water that it sells for a beneficial use, not the water that it offers to sell. ¶114 To conclude otherwise would be tantamount to sanctioning speculation, permitting water rights to be created without any actual use and then held indefinitely without any actual use until the appropriator sees fit. While speculation is commonplace with other commodities, it has long been settled in this State that water is far too scarce of a resource to speculate with. Thorp v. Freed, 1 Mont. 651 (1872). The adoption of Pondera’s interpretation of Bailey would without a doubt fundamentally alter Montana water law. ¶115 I believe the Court makes the gravest of mistakes in doing so today. As the Colorado Supreme Court explained in rejecting a similar argument, “The right to appropriate is for use, not merely for profit.” Colo. River Water Conservation Dist. v. Vidler Tunnel Water Co., 197 Colo. 413, 417, 594 P.2d 566, 568 (1979) (emphasis in original). Allowing an appropriator to obtain an appropriation and hold the appropriation based merely on his ability to provide water for sale will “encourage those with vast monetary resources to monopolize, for personal profit rather than for beneficial use, 59 whatever unappropriated water remains.” Colo. River Water Conservation Dist., 197 Colo. at 417, 594 P.2d at 568. We should emphatically reject the argument advanced by Pondera and refuse to countenance the “claim that mere speculators, not intending themselves to appropriate and carry water to a beneficial use or representing others so intending, can by survey, plat, and token construction compel subsequent bona fide appropriators to pay them tribute by purchasing their claims in order to acquire a right guaranteed them by our Constitution.” Colo. River Water Conservation Dist., 197 Colo. at 417, 594 P.2d at 568-69. ¶116 In sum, Pondera’s offering 72,000 shares of stock for sale does not represent beneficial use. Pondera’s offering water for sale represents nothing more than an attempt to speculate with a resource owned by the People of the State of Montana. Our Constitution guarantees a right to appropriate for beneficial use; it does not guarantee a right to speculate. I would thus reject Pondera’s argument that issuing shares of stock— or, for that matter, any other method of offering water for sale—is an actual beneficial use of water. ¶117 Lastly, in the face of a hundred years of irrigating less than 56,556 acres per year and in the absence of any evidence showing in the last century it has ever irrigated 72,000 acres in a year, Pondera argues that its compliance with the Carey Land Act demonstrates intent to irrigate 72,000 acres per year. ¶118 Assuming, for the purposes of argument, that the demonstration of a desire to follow a legislative act is adequate to overcome the bona fide intent that can be gleaned from actual beneficial use over the past century, the Water Master correctly rejected 60 Pondera’s reliance on the Carey Land Act. The Water Master concluded that Pondera’s suggestion that its early predecessors intended to take advantage of that legislation is speculative and unfounded. The Master noted generally that Pondera’s early water rights largely fall into two main categories: (1) water rights established by individual appropriators in the late 19th century, with priority dates ranging from April 9, 1884, through September 18, 1901, and (2) water rights established by the Conrad brothers in the early 20th century, with priority dates ranging from June 21, 1900, through April 12, 1906. ¶119 The Water Master found that neither of these two categories of water rights were initiated with the Carey Land Act in mind. First, the Master explained that Congress enacted the Carey Land Act into law on August 18, 1894, and that “[n]o claim with a priority date before then can be credibly urged as intended to take advantage of the [A]ct.” Second, the Master noted that, even after the passage of the Carey Land Act, the Act further required Montana to enact enabling legislation before landowners could utilize the Act, which occurred in 1903.11 Third, the Water Master found that the earliest any appropriator formed a construction company in the Valier area, which is necessary to comply with the Act, was in 1908. Lastly, the Water Master found that the intention of the Conrad brothers “was to serve their own empire” and that the “Carey Land Act idea came later.” The Water Master explained the Conrad brothers “were looking to irrigate 9,600 acres, not 72,000.” Thus, the Water Master expressly rejected Pondera’s 11Section 18-2001, RCM (1903), et seq. 61 suggestion “that the early rights of its predecessors were acquired for gradual development of what became the Carey Land Act project.” ¶120 Our decision in Toohey is consistent with the Water Master’s decision. In that case, an appropriator, Flannery, evinced intent to appropriate water in 1868 by the construction of ditches and the installation of fencing surrounding his property. Toohey, 24 Mont. at 17, 60 P. at 397. In 1873, Congress passed the Timber Culture Act, permitting homesteaders to acquire up to an additional 160 acres of land provided they met certain requirements. In 1876, Flannery claimed an additional 160 acres under the Act. Thirteen years later, in 1889, Flannery applied water to beneficial use on both the lands owned prior to the passage of the Act as well as the lands subsequently acquired under the Act. Toohey, 24 Mont. at 18, 60 P. at 397. ¶121 On appeal to this Court, Flannery maintained that he could acquire enough water for use on all his lands. We rejected his argument, explaining that a person cannot acquire any part of a stream for “mere future speculative profit or advantage.” Toohey, 24 Mont. at 17, 60 P. at 397. We reasoned: “As the timber-culture act was not passed until 1873, and was not proceeded under by Flannery until 1876, he could not have had in contemplation [irrigation of the additional lands] under this law before its enactment by congress.” Toohey, 24 Mont. at 18, 60 P. at 397. Thus, we concluded that “his intent, in 1868, in the then present and contemplated use of the water then diverted, never reached beyond the purpose of irrigating the part of the [original] tract.” Toohey, 24 Mont. at 18, 60 P. at 397. 62 ¶122 Here, like Flannery, Pondera cannot rely on a legislative act to establish intent when its claims predate the passage of the legislative act; predate the enabling legislation; and predate an attempt by its predecessors to proceed under the legislation. Congress enacted the Carey Land Act into law on August 18, 1894; Montana enacted enabling legislation to implement the Act in 1903; and none of Pondera’s early predecessors proceeded under the Carey Land Act until the earliest 1908. Four of Pondera’s consolidated claims entirely predate the passage of the Carey Land Act; twenty-one predate the passage of Montana’s enabling legislation; and all of the early claims predate any attempt by Pondera’s predecessors to procced under the Act. Thus, “[a]s the [Carey Land] act was not passed until 18[94], and was not proceeded under by [Pondera’s predecessors] until [1908], [they] could not have had in contemplation [irrigation of lands] under this law.” Toohey, 24 Mont. at 18, 60 P. at 397. ¶123 Moreover, even if we were to break from this long-standing precedent and overrule Toohey, there is an absence of evidence in the record showing that any original appropriators of its early claims actually did intend to rely on the Carey Land Act. In fact, Pondera appears to agree that its predecessors did not contemplate taking advantage of the Carey Land Act until W.G. Cargill purchased the Conrad brothers’ interest in 1907, which is well after original appropriators undertook appropriations—in several instances, two full decades afterwards. ¶124 If there is one universal rule in western water law, it is that the future beneficial use of the water “must have been within the appropriator’s original intent in undertaking such appropriations.” Hutchins, 496 (emphasis in original). We have reiterated this rule 63 on numerous occasions, stating it is the appropriator’s “intent at the time of appropriation” that controls the extent of the water right. In re Adjudication of Existing Rights to the Use of all Water, ¶ 22 (emphasis in original). Accord Wheat, 64 Mont. at 501, 210 P. at 762; Toohey, 24 Mont. at 18, 60 P. at 397; Teton Co-Op Canal Co., ¶ 33. Further, in case there be any doubt, we expressly adhered to this principle in Bailey, concluding that “at the time of the initiation of appellant’s right in 1892 [the original appropriators] had the bona fide intention at the time to apply the water, which they sought to appropriate, to a useful and beneficial purpose.” Bailey, 45 Mont. at 178-79, 122 P. at 583 (emphasis added). ¶125 I see no reason to deviate from over a hundred years of precedent and thereby create a special exception for Pondera. The Water Master correctly rejected Pondera’s reliance on the Carey Land Act to show intent to irrigate 72,000 acres per year. The record supports the Water Master’s determination that Pondera’s early predecessors did not contemplate irrigation under the Carey Land Act. ¶126 Based upon the foregoing, I would conclude that the Water Master did not clearly err by limiting Pondera’s water rights based on historical beneficial use. Pondera presented the Water Master with a number of different claims; with a number of different priority dates; and with a number of different original appropriators. Using historical beneficial use was not only an acceptable way to determine the extent of Pondera’s 64 collective water rights, it was likely the only way.12 In light of the overwhelming evidence of historical beneficial use and in the absence of other clear evidence of original intent, the Water Master correctly limited Pondera’s water rights based on historical beneficial use. Substantial evidence supports the Water Master’s finding limiting Pondera’s irrigation rights to 56,556 acres per year. Accordingly, the Water Court erred in reversing the Water Master’s finding.13 (2) Whether the Water Court correctly concluded that the Water Master clearly erred in finding Pondera’s place of use should be the approximately 85,000 acres listed on the share certificates. ¶127 Curry contends that the Water Court erred in reversing the Water Master’s finding that Pondera’s place of use should be the acres listed on Pondera’s share certificates and maintains that the Water Master’s order that requires Pondera to supplement the record with a list of the share certificates should be reinstated. 12 The Court also appears to place great emphasis on the MCLB to show intent. Neither the MCLB nor any other public agency had jurisdiction over the acquisition of appropriative water rights in 1953. Sections 89-848, -849, -851, RCM (1969). And, more importantly, the MCLB’s function was not to try the intent of the original appropriators. 13Alternatively, assuming Ponderas completed appropriations with an annual irrigation of 72,000 acres, as Curry correctly argues in the alternative “that claim was lost by failure to put the water to a beneficial use within a reasonable time.” Thus, assuming Pondera perfected water rights in 1921 with a total annual irrigation of 72,000 acres, the rights were lost by Pondera’s “nonuser for an unreasonable length of time.” Bailey, 45 Mont. at 179, 122 P. at 584. The Court’s reasoning to the contrary is unsupported. The Court maintains that “Bailey clearly states that . . . the right cannot be lost based upon the acts by a third-party shareholder . . . .” Opinion, ¶ 34. Bailey does not stand for such a proposition. Rather, Bailey clearly states that the appropriation “cannot be made to depend for its existence in the first instance upon the voluntary acts of third parties— strangers to its undertaking.” Bailey, 45 Mont. at 178, 122 P. at 583 (emphasis added). In other words, a public service corporation must be able to complete an appropriation unaided by third parties, which the growing communities doctrine allows an appropriator to do. However, under Bailey, an appropriator’s beneficial use remains entirely dependent on the individual appropriators. The corporation’s beneficial use depends on the amount of water it “sells” for a beneficial use—which, in turn, wholly depends on the amount of water the irrigators buy and put to beneficial use. Thus, Pondera’s nonuse is based entirely on the irrigators’ nonuse. 65 ¶128 The Water Master found that Pondera’s place of use should be the total acres described on the share certificates. Testimony at trial indicated that the acres described on the share certificates correlated to historical use. The Water Master noted, however, that if the area described on the share certificates deviates substantially from 85,000 acres the acreage listed is in error. The Master explained that the Department of Natural Resources and Conservation (DNRC) verified 85,296 irrigable acres under Pondera’s system using data from the Pondera County Water Resources Survey (WRS) and 85,357 irrigable acres using data from the United States Department of Agriculture (USDA). Thus, the Water Master stayed the proceedings and its final determination until Pondera produced its share certificates. ¶129 There is no error in the Water Master’s analysis limiting Pondera’s place of use to the area described on the share certificates. Here again, the Water Master’s reliance on historical beneficial use was an acceptable method to determine the extent of Pondera’s rights. The evidence in the record indicates that Pondera has historically irrigated an area no larger than 85,000 acres in the last 130 years. In 1920, Pondera’s chief engineer, C.E. Atwood, compiled a list of irrigable acres under Pondera’s system and concluded that 85,527 acres were irrigable. Similarly, the WRS Report, written by the State Engineer in 1964, concluded that Pondera’s irrigation project has been “operated and maintained adequately with approximately 80,000 acres of land being served.” The WRS Report further concluded that Pondera “had 83,303.20 acres irrigated in 1963 and 2,438 acres potentially irrigable.” Testimony at trial also indicated that Pondera irrigates approximately 80,000 acres. Lastly, Pondera conceded in its motion for summary 66 judgment that it currently irrigates 85,375.8 acres. Thus, based on this overwhelming evidence of intent to irrigate 85,000 acres, the Water Master did not clearly err in delineating a place of use for Pondera that is approximately 85,000 acres. ¶130 The question then becomes the location of the 85,000 acres that Pondera is entitled to claim as its place of use. The Water Use Act required the Water Master to determine Pondera’s place of use as it existed prior to July 1, 1973. Section 85-2-227(1), MCA. Based on the testimony at trial, the share certificates accurately reflect each and every acre Pondera irrigated prior to July 1, 1973, which testimony established totals approximately 85,000 acres. Pondera did not offer any evidence of historical use at trial. Nor did Pondera take issue with the testimony at trial that the acres described on the share certificates accurately reflect the historical use of its water rights. Given the evidence of historical use, the Water Master did not clearly err by finding that Pondera’s place of use as it existed prior to July 1, 1973, was the approximately 85,000 acres described on the share certificates. The Water Court erred by reversing the Water Master’s finding. I would reinstate the Water Master’s order requiring that Pondera produce its share certificates pursuant to Curry’s discovery request.14,15 14 The Court maintains that Curry merely was unable to successfully refute the evidence of the size of the service area at this stage in the process. Opinion, ¶ 50. But it is unclear what evidence Curry could have presented to do so. In the course of a five-day trial, Curry produced witnesses whose testimony indicated that Pondera did not intend to irrigate 377,000 acres, including Pondera’s former general manager, Fay Stokes; Curry produced data from the USDA, data from the DNRC, the WRS Report from the State Engineer, and the report from Pondera’s former chief engineer, C.E. Atwood, all showing no intent to irrigate 377,000 acres; and Curry introduced aerial mapping showing no intent to irrigate 377,000 acres. Furthermore, during oral argument, Pondera’s counsel conceded that Pondera does not contemplate irrigating 377,000 acres. A claimed place of use under § 85-2-227(1), MCA, is prima facie proof, not conclusive proof. The fundamental problem appears to be with the Court’s use of the term “service area.” 67 IV. ¶131 I believe that the principles the Court announces today will ultimately prove unsound. The Court today allows an appropriator to claim an appropriation to irrigate 72,000 acres per year and permits the appropriator to irrigate a 377,000 acre area. It does so despite the fact that the appropriator has failed to irrigate 72,000 acres in any year or irrigate a 377,000 acre area since the inception of the appropriator’s rights some 130 years ago. Worse yet, the Court holds that for those appropriators, who are engaged in the business of selling water, beneficial use does not require actual use, but instead is the availability of water for sale. There is no doubt in my mind that the rampant speculation that will ensue from this decision will force this Court’s hand to either expressly overrule the decision or distinguish it from future cases based on inconsequential facts. ¶132 The Court seems to acknowledge as much already and attempts to use the general adjudication as a fail-safe, remarking that its decision is not definitive “at this stage in the adjudication process.” Opinion, ¶ 50. In my view, the Court’s fail-safe is woefully The term is undefined and thus unable to be qualified. However, it does appear clear that bona fide intent is not a limiting factor. If so, Curry would have easily rebutted the presumption. 15 As a final note, there is language in the Water Master’s report that would seem to suggest that Pondera cannot reassign its corporate shares to lands within or outside its place of use without seeking authorization from the DNRC. However, despite this language, the Water Master did not add a remark to any of Pondera’s claims to this effect. Nor did the Water Master, in its final recommendation to the Water Court, recommend that the Water Court add such a remark. And neither Curry nor Pondera brief the issue. Thus, I will not attempt to ascertain the meaning of the Water Master’s comments or provide a definitive ruling on them. If in the event the Water Master adds a remark on Pondera’s claims stating that it cannot reassign corporate stock to a different area within or outside its place of use without authorization by the DNRC, Pondera can certainly appeal the issue. I would add, however, that if Pondera seeks to change its place of use from the place delineated on its individual appropriations—the total lands described on the share certificates—Pondera would certainly need to seek DNRC approval. See §§ 85-2-302, -402, MCA. 68 unacceptable. First, I cannot see how the “adjudication process” will change the Court’s rules of law or its express holdings regarding the facts of this case. Pondera’s beneficial use will remain nonuse in the general adjudication. And, if over a century of nonuse does not persuade this Court that Pondera’s water rights are less than Pondera claims, nothing will. Second, even if the Court’s rules were so malleable that the general adjudication would somehow change them, in my view the looming general adjudication is an unacceptable excuse to kick the can down the road. I am sure Curry would have wished to wait for the general adjudication as well, but that was not an option he was presented with. Beginning in the 2000s, Pondera started irrigating more acres per year and in more places than it had done in the previous century. In aid of its growing needs, Pondera locked Curry’s headgate, thereby threatening Curry’s way of life. In short, Pondera sought to compel Curry to pay tribute for a century of Pondera’s existence in the area and to finally earn a reward for decades of speculation, Colo. River Water Conservation Dist., 197 Colo. at 417, 594 P.2d at 568-69, which left Curry with no choice but to seek redress and a court determination of the extent of Pondera’s water rights. There is no excuse for this Court to wait until the general adjudication to determine the annual acreage and place of use for Pondera’s water rights. The parties raised those issues below and now have squarely presented those issues to this Court for review. ¶133 I agree with the Court’s resolution of Issue 5. In respect to Issue 4, it is my view the Water Court substituted its judgment for that of the Water Master regarding the Gray Right, and I would affirm the Water Master on the Gray Right. After a review of the 69 record, substantial evidence supports the Water Master’s finding of a flow rate of 0.95 cfs. /S/ LAURIE McKINNON

March 29, 2016

aaaf1ad2-80c4-42c5-942d-ec4ada13ca6c

Marriage of Plotner

2016 MT 18N

DA 15-0244

Montana

Montana Supreme Court

DA 15-0244 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 18N IN RE THE MARRIAGE OF: LESTER ALVIN PLOTNER, Petitioner and Appellant, v. ALEXANDRA LEA PLOTNER, Respondent and Appellee. APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DR-14-0273 Honorable Gregory R. Todd, Presiding Judge COUNSEL OF RECORD: For Appellant: Elizabeth J. Honaker, Honaker Law Firm, Billings, Montana For Appellee: Stephen C. Mackey, Yvette K. Lafrentz, Towe, Ball, Mackey, Sommerfeld & Tuner, P.L.L.P., Billings, Montana Submitted on Briefs: December 30, 2015 Decided: January 19, 2016 Filed: __________________________________________ Clerk January 19 2016 Case Number: DA 15-0244 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 Lester Alvin Plotner (Lester) appeals from an order issued by the Thirteenth Judicial District Court, Yellowstone County, adopting a final parenting plan and granting his former spouse, Alexandra Lea Plotner (Alex), primary custody of their two minor children. Alex requests this Court impose sanctions pursuant to M. R. App. P. 19(5) for an appeal taken without reasonable grounds. We affirm the decision of the District Court and deny Alex’s request for sanctions. ¶3 We address the following issues on appeal: 1. Whether the District Court abused its discretion in entering its findings of fact. 2. Whether the District Court erred in determining the best interests of the Plotner children. 3. Whether the District Court abused its discretion in admitting evidence. 4. Whether Alex is entitled to attorney’s fees for the cost of this appeal. ¶4 Lester and Alex Plotner were married in Yellowstone County, Montana, in March 2009. They have two minor children born of the marriage, K.P., born in 2008, and A.P., born in 2011. Lester is employed full time with the Army National Guard. Alex is employed full time at Sports Authority and is a part-time member of the Army National 3 Guard. The parties separated in December 2013, after which they shared parenting equally with the children spending alternating weeks with each parent. ¶5 On March 21, 2014, Lester filed a petition for dissolution of marriage and a proposed parenting plan. He asked that the court adopt the current parenting arrangement wherein he and Alex would continue to alternate weeks with the children. Alex responded with a proposed parenting plan under which she would receive primary custody, the children would spend alternating weekends and holidays with Lester, and the children would reside with Lester for a consecutive three-week period in the summer. After a hearing, the District Court entered findings of fact, conclusions of law, and order adopting the parenting plan proposed by Alex. ¶6 Lester appeals. ¶7 1. Whether the District Court abused its discretion in entering its findings of fact. ¶8 Lester contends that the District Court abused its discretion in entering several findings of fact, namely: Finding of Fact 10: Lester has a propensity not to be civil when communicating with Alex; Finding of Fact 11: Lester refuses to allow Alex to communicate with the girls when he has them during his week; Finding of Fact 12: Photos have been posted on Facebook of Lester and various others playing beer pong in the garage of the marital residence, and of Lester drinking at a bar; and Finding of Fact 13: On May, 10, 2014, during Lester’s week with the children, Lester left the girls in the care of his brother, who unknowingly permitted A.P. and a friend to wander out of the house and a substantial distance into the neighborhood. Ultimately, a neighbor 4 discovered the children and they were returned, but not until after the police were notified of the incident. ¶9 We have carefully reviewed the record and conclude the District Court’s findings are all supported by substantial evidence. At the hearing, Alex introduced evidence of email communications from Lester in which he directed several disparaging remarks towards her, including: I can’t stand you . . . . You are dirty. Enough with the contacting me on my parenting week. You are harassing me. Stop asking, you fucked that up not me. Also, I don’t care if you miss them it’s not your week. Lester further agreed during cross-examination that he referred to Alex as “the dirty barracks whore” in an email, and that he deliberately attempted to frustrate or deny contact between the children and Alex during his parenting weeks. Similarly, photos of Lester and others playing beer pong in his garage and Lester drinking beer at a bar were introduced into evidence. Lastly, Lester admitted during the hearing that his brother had lost the children during Lester’s parenting week and they were not returned until a neighbor found them wandering in the street. The District Court did not abuse its discretion in entering its findings of fact. ¶10 2. Whether the District Court erred in determining the best interests of the Plotner children. ¶11 Lester argues that the District Court erred in determining the best interests of his children by failing to select the parenting plan he proposed. Lester contends that 5 continuing the current parenting arrangement is in the best interests of the children because it promotes frequent and continuing contact with both parents. Pursuant to § 40-4-212, MCA, a district court must “determine the parenting plan in accordance with the best interest of the child” after considering “all relevant parenting factors.” Section 40-4-212(1), MCA, sets forth a number of factors for a district court to consider, including “whether the child has frequent and continuing contact with both parents, which is considered to be in the child’s best interests.” While a district court must consider the statutorily enumerated factors when making its determination, we have held it need not make a specific finding as to each. In re the Marriage of Graham, 2008 MT 435, ¶ 19, 347 Mont. 483, 199 P.3d 211. ¶12 Here, the District Court provided express findings as to each of the § 40-4-212(1), MCA, factors. Specifically, in regard to the statutory factor of “frequent and continuing contact” the court made extensive factual findings supporting its decision to grant Alex primary custody. The court explained that the parenting plan proposed by Lester “has not worked well.” The court found that when the children were with him during his week, Lester failed to take K.P. to extracurricular activities, refused to take the children to birthday parties of the children’s friends, and exhibited a pattern of isolating the children from any contact or communication with their mother. These findings are supported by substantial evidence. The District Court adequately considered the children’s best interests in adopting Alex’s proposed parenting plan. 6 ¶13 3. Whether the District Court abused its discretion in admitting evidence. ¶14 Lester argues that the District Court abused its discretion in “admitting into evidence, over objection, certain emails between Lester and Alex, as well as other exhibits.” Lester contends that he “had requested in discovery the production of all trial exhibits, and Alex had not produced these.”1 We review a trial court’s decision regarding the imposition of sanctions for an alleged discovery violation to determine whether the court abused its discretion. Richardson v. State, 2006 MT 43, ¶ 21, 331 Mont. 231, 130 P.3d 634. In doing so, we will generally “defer to the district court because it is in the best position to determine both whether the party in question has disregarded the opponent’s rights, and which sanctions are most appropriate.” Richardson, ¶ 21. In reviewing whether sanctions are appropriate, we examine “the extent of the prejudice to the opposing party which resulted from the discovery abuse.” Schuff v. A.T. Klemens & Son, 2000 MT 357, ¶ 72, 303 Mont. 274, 16 P.3d 1002. During the hearing, Alex offered eleven exhibits into evidence, Exhibits A through K. Exhibits A through H were admitted without objection from Lester. We will not place the District Court in error for a ruling in which Lester made no objection. In re Marriage of Anderson, 2013 MT 238, ¶ 28, 371 Mont. 321, 307 P.3d 313. In regard to the admission of Exhibits I, J, and K— which consist of a Google Earth image of Lester’s neighborhood and phone logs of dates and times of communications between the parties—Lester has failed to sufficiently 1 It is not entirely clear which “certain emails” and “other exhibits” Lester is arguing the District Court abused its discretion in admitting. Nonetheless, for purposes of this appeal, we will assume that Lester is challenging the admission of all the exhibits Alex offered. 7 explain on appeal how he was unduly prejudiced by their admission. We conclude that the District Court did not abuse its discretion in admitting this evidence. ¶15 4. Whether Alex is entitled to attorney’s fees for the cost of this appeal. ¶16 Alex requests that this Court impose sanctions pursuant to M. R. App. P. 19(5) for an appeal that is frivolous, vexatious, filed for purposes of harassment or delay, or taken without substantial or reasonable grounds. To determine whether sanctions are appropriate under M. R. App. P. 19(5), we generally assess whether the arguments were made in good faith. Cooper v. Glaser, 2010 MT 55, ¶ 16, 355 Mont. 342, 228 P.3d 443. While we reject Lester’s arguments, we believe that he exercised his right to appeal the decision of the District Court in good faith. We decline Alex’s request for attorney’s fees under M. R. App. P. 19(5). ¶17 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 standards of review and settled law. ¶18 Affirmed. /S/ LAURIE McKINNON We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA

January 19, 2016

19230087-6b82-422e-a55e-9e69f044cedf

Howard v. State

2016 MT 58N

DA 15-0014

Montana

Montana Supreme Court

DA 15-0014 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 58N HARLEY HOWARD, 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. ADV-2013-252 Honorable Mike Menahan, Presiding Judge COUNSEL OF RECORD: For Appellant: Harley Howard, Self-Represented, Deer Lodge, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Mardell Ployhar, Assistant Attorney General, Helena, Montana Leo Gallagher, Lewis and Clark County Attorney, Helena, Montana Submitted on Briefs: February 10, 2016 Decided: March 8, 2016 Filed: __________________________________________ Clerk March 8 2016 Case Number: DA 15-0014 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 On December 17, 2009, a jury in Lewis and Clark County convicted Harley Howard (Howard) of one count of incest against his daughter, D.H. Howard’s son, C.H., testified at trial. We affirmed the conviction on appeal. State v. Howard, 2011 MT 246, 362 Mont. 196, 265 P.3d 606. Howard then filed a petition for post-conviction relief on March 29, 2013, alleging ineffective assistance of counsel. On November 7, 2014, the District Court denied Howard’s petition. Howard appeals the denial of his petition for post-conviction relief. “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.” Heath v. State, 2009 MT 7, ¶ 13, 348 Mont. 361, 202 P.3d 118 (citing Jordan v. State, 2007 MT 165, ¶ 5, 338 Mont. 113, 162 P.3d 863). We affirm. ¶3 Howard raises five issues in his brief on appeal: (1) did the State fail to disclose evidence in violation of Brady v. Maryland, 373 U.S. 83, 83 S. Ct. 1194 (1963); (2) were Howard’s attorneys constitutionally deficient in their investigation of his case, and was he prejudiced as a result; (3) were Howard’s attorneys constitutionally deficient in failing to provide an expert witness, and was he prejudiced as a result; (4) were Howard’s 3 attorneys constitutionally deficient in their investigation of the child witnesses’ mental health and competency to testify, and was he prejudiced as a result; and (5) were Howard’s attorneys constitutionally deficient in failing to investigate and introduce into evidence alleged incidents of prior sexual abuse of his children, and was he prejudiced as a result? ¶4 Howard raised the ineffective assistance of counsel claims in his petition for post-conviction relief before the District Court. But the first claim, a Brady violation claim, is raised for the first time on appeal. Howard now argues that the State suppressed favorable evidence and that his counsel participated in the suppression of evidence by failing to admit it at trial. However, “[a]ll grounds for relief claimed by a petitioner [seeking post-conviction relief] must be raised in the original or amended original petition.” Section 46-21-105(1)(a), MCA. We have also “stated on numerous occasions that [we] will not review issues that were not preserved for appeal in the district court.” Ellenburg v. Chase, 2004 MT 66, ¶ 14, 320 Mont. 315, 87 P.3d 473 (citing State v. Schmalz, 1998 MT 210, ¶¶ 11-13, 290 Mont. 420, 964 P.2d 763; State v. Spotted Blanket, 1998 MT 59, ¶ 13, 288 Mont. 126, 955 P.2d 1347). Howard’s claim that evidence was suppressed in violation of Brady was not raised in the original petition and was not preserved for appeal, and accordingly, we will not review it. ¶5 The remainder of Howard’s claims are ineffective assistance of counsel claims. In order to establish that his counsel was constitutionally deficient, Howard must show “that counsel’s performance was deficient and that the deficient performance prejudiced the defense.” Baca v. State, 2008 MT 371, ¶ 16, 346 Mont. 474, 197 P.3d 948 (citing 4 Whitlow v. State, 2008 MT 140, ¶ 10, 343 Mont. 90, 183 P.3d 861). An attorney’s performance was deficient if his or her “conduct fell below an objective standard of reasonableness measured under prevailing professional norms and in light of the surrounding circumstances.” Baca, ¶ 17 (internal quotations omitted) (quoting Whitlow, ¶ 20). However, “[w]e indulge a strong presumption that counsel’s actions fell within the broad range of reasonable professional assistance, [. . .] and a defendant must overcome the presumption that, under the circumstances, the challenged act or omission might be considered sound trial strategy.” Baca, ¶ 17 (citing Whitlow, ¶ 21). In order to show prejudice, Howard must “demonstrate a reasonable probability that, but for counsel’s deficient performance, the result of the proceeding would have been different.” Baca, ¶ 17 (citing State v. Hagen, 2002 MT 190, ¶ 18, 311 Mont. 117, 53 P.3d 885). ¶6 Additionally, Howard must satisfy the pleading requirements for petitions for post-conviction relief set out in § 46-21-104, MCA. He must identify in his petition “all facts supporting the grounds for relief set forth in the petition and [he must] have attached affidavits, records, or other evidence establishing the existence of those facts.” Section 46-21-104(1)(c), MCA. Thus, “a petition for postconviction relief must be based on more than mere conclusory allegations.” Ellenburg, ¶ 16. Howard must prove by a preponderance of the evidence that he is entitled to relief. Ellenburg, ¶ 12 (citing State v. Peck, 263 Mont. 1, 3-4, 865 P.2d 304, 305 (1993)). ¶7 Howard alleges in his first claim of ineffective assistance of counsel that his attorney, Randi Hood (Hood), failed to investigate his theory that his children were coerced by their mother into making the allegations of incest against Howard. Attorneys 5 have a duty to conduct reasonable investigations or to make a reasonable decision not to investigate something. Riggs v. State, 2011 MT 239, ¶ 16, 362 Mont. 140, 264 P.3d 693. We assess these decisions “for reasonableness in light of all the circumstances of the case,” and we apply “a heavy measure of deference to counsel’s judgments.” Riggs, ¶ 16 (internal quotations omitted). ¶8 Howard asserts in his affidavit that “[t]rial counsel failed to investigate defense strategies,” “[s]he did not pursue or investigate [D.H.’s] motive to fabricate,” and “[s]he failed to properly investigate and prepare for trial.” These statements are conclusory allegations that are not supported by evidence establishing the fact of his attorney’s constitutional deficiencies. In contrast, Hood stated in her affidavit that she retained an investigator to interview D.H. and her counselors, that she read and considered the documents and articles furnished to her by Howard, and that she developed and relied at trial on a strategy of arguing that D.H.’s mother had implanted the allegations in D.H.’s mind in an attempt to cut Howard out of their lives. Hood’s affidavit demonstrates that she conducted a reasonable investigation, and Howard has not proven by reference to any evidence that his counsel’s performance was deficient or that his defense was prejudiced by such a deficiency. The District Court correctly denied Howard’s first claim for ineffective assistance of counsel. ¶9 Howard alleges in his second claim of ineffective assistance of counsel that Hood failed to provide an expert witness at trial, and that without a favorable witness “it is impossible for any defendant to receive a fair and impartial trial.” Howard did not raise 6 this claim in his petition for post-conviction relief, so he is barred from raising it now on appeal. Ellenburg, ¶¶ 14-15. ¶10 Howard alleges in his third claim of ineffective assistance of counsel that Hood failed to investigate his children’s mental health issues and their competency to testify. The District Court declined to address the merits of this claim because “[t]he Montana Supreme Court [already] addressed Howard’s claim that Hood failed to challenge the competency of his children to testify at trial” in Howard’s direct appeal. Indeed, in State v. Howard, we devoted six paragraphs of our Opinion to an analysis of Howard’s claim that Hood’s failure to challenge his children’s competency amounted to ineffective assistance of counsel. Howard, ¶¶ 23-28. “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 post-conviction proceeding. Section 46-21-105(2), MCA; see e.g. Ellenburg, ¶ 20 (holding that petitioner’s claim was barred under § 46-21-105(2), MCA, because the claim was raised on direct appeal). The District Court correctly denied Howard’s third claim for ineffective assistance of counsel. ¶11 Howard alleges in his fourth and final claim of ineffective assistance of counsel that Hood failed to investigate and introduce into evidence alleged incidents of prior sexual abuse of his children, and that such evidence would have revealed an alternative source of their knowledge concerning sexual conduct. The District Court found that Howard did not meet his burden to prove ineffective assistance of counsel because under Montana’s rape shield law, evidence of a victim’s prior sexual abuse is inadmissible, 7 State v. Weeks, 270 Mont. 63, 89, 891, P.2d 477, 493 (1995), and “[t]he Montana Supreme Court has repeatedly held that ineffective assistance of counsel claims cannot succeed when based upon counsel’s failure to make motions or objections which, under the circumstances, would be without procedural or substantive merit.” See e.g. Heddings v. State, 2011 MT 228, ¶ 33, 362 Mont. 90, 265 P.3d 600; State v. Frasure, 2004 MT 305, ¶ 12, 323 Mont. 479, 100 P.3d 1013; State v. Hildreth, 267 Mont. 423, 432-33, 884 P.2d 771, 777 (1994). The District Court concluded that “Hood’s assistance cannot be deemed ineffective for failing to raise an issue she knew was unlikely to succeed.” ¶12 However, we recently noted in State v. Colburn, 2016 MT 41, ___ Mont. ___, ___ P.3d ___, that “[c]onflict can arise between rape shield statutes and a defendant’s rights to confront his accuser and to present evidence at trial in defense of the charge against him.” Colburn, ¶ 24. Since neither the rape shield law nor the defendant’s rights to confront his accusers and present evidence are absolute, State v. Johnson, 1998 MT 107, ¶¶ 22-23, 288 Mont. 513, 958 P.2d 1182, it is the trial court’s responsibility to balance the competing rights of the victim and the defendant, State v. MacKinnon, 1998 MT 78, ¶¶ 33-35, 288 Mont. 329, 957 P.2d 23. ¶13 In Colburn, we reversed Colburn’s conviction and remanded the case for a new trial because the District Court mechanistically applied the rape shield law to exclude evidence of the victim’s past sexual abuse without balancing the victim’s rights against Colburn’s right to present evidence that the source of the victim’s sexual knowledge was the similar abuse by another person, in that case her father. Colburn, ¶ 29. We relied in that case on the existence in the record of direct evidence that the victim had in fact been 8 sexually abused by someone other than the defendant. Colburn, ¶ 25. Colburn differs from the case at bar because in Colburn, the evidence of prior abuse was “neither speculative nor unsupported.” Colburn, ¶ 25. The identity of the prior abuser and a confirmation that abuse had occurred was before the Court. That is not the case here; no evidence in the record indicates that D.H. was sexually abused by anyone other than Howard. ¶14 Given the lack of evidence of prior abuse in the record, any testimony regarding possible prior sexual abuse of D.H. likely would have been inadmissible pursuant to Rule 602 of the Montana Rules of Evidence, which precludes a witness from testifying to a matter of which he or she has no personal knowledge. Further, given that Howard did not present records or other evidence in the PCR proceeding establishing that such abuse occurred, we will not deem counsel ineffective for failing to investigate and introduce evidence of “alleged incidents” of prior sexual abuse. Howard has failed to prove by a preponderance of the evidence that Hood’s representation in this respect was constitutionally deficient. Hood’s decision not to pursue such speculative and unsupported testimony at trial is not constitutionally defective representation, but rather a “sound trial strategy.” Baca, ¶ 17. The District Court correctly denied Howard’s fourth claim for ineffective assistance of counsel. ¶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. 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. 9 ¶16 Affirmed. /S/ PATRICIA COTTER We Concur: /S/ BETH BAKER /S/ LAURIE McKINNON /S/ MICHAEL E WHEAT /S/ JIM RICE

March 8, 2016

5ecd3cdd-837c-4e65-8c68-82ef1d487743

Fellows v. Saylor

2016 MT 45

DA 15-0392

Montana

Montana Supreme Court

DA 15-0392 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 45 CHARLES E. FELLOWS, an individual, Plaintiff and Appellee, MONTE GIESE, STEVE KELLY and WILLIAM REICHELT, Plaintiffs-Intervenors and Appellees, v. PATRICK SAYLOR, an individual; FARMERS COOPERATIVE CANAL COMPANY, ELDORADO COOPERATIVE CANAL COMPANY, TETON COOPERATIVE CANAL COMPANY; TETON COOPERATIVE RESERVOIR COMPANY; JOHN D. PEBBLES, an individual, WILLIAM S. PEEBLES, an individual; OTTIS BRYAN, an individual; and SYLVIA BRYAN, an individual, Defendants and Appellants, The Office of Water Commissioner for Perry v. Beattie Decree Case No. 371; TETON COOPERATIVE RESERVOIR COMPANY, Defendants. APPEAL FROM: Water Court of the State of Montana, Cause No. WC 2015-01, Honorable Douglas Ritter, Presiding Judge COUNSEL OF RECORD: For Appellants: Michael J.L. Cusick, Abigail R. Brown, Moore, O’Connell & Refling, PC, Bozeman, Montana March 1 2016 Case Number: DA 15-0392 2 For Appellees: Peter G. Scott, Gough, Shanahan, Johnson & Waterman, Bozeman, Montana (for Charles E. Fellows) Stephen R. Brown, Garlington, Lohn & Robinson, PLLP Missoula, Montana (for Intervenors) Submitted on Briefs: December 30, 2015 Decided: March 1, 2016 Filed: __________________________________________ Clerk 3 Justice Beth Baker delivered the Opinion of the Court. ¶1 Appellants1 appeal the order of the Water Court denying their motion to alter or amend its final order on certification that tabulated the water rights necessary to address Charles Fellows’s underlying complaint in the Ninth Judicial District Court, Teton County. This is the second time this matter has been before this Court on appeal. Fellows v. Office of Water Comm’r, 2012 MT 169, 365 Mont. 540, 285 P.3d 448 (hereafter Fellows I). The Perry Defendants raise several issues on appeal that we restate as follows: 1. Whether the water right claims in controversy were properly determined following this Court’s remand in Fellows I. 2. Whether the District Court erred in granting Fellows’s motion for substitution. ¶2 We affirm. PROCEDURAL AND FACTUAL BACKGROUND ¶3 Because the background facts are delineated in Fellows I, we restate the facts only briefly. ¶4 Montana’s Constitution requires the Legislature to “provide for the administration, control, and regulation of water rights” and to “establish a system of centralized records” for those rights. Mont. Const. art. IX, § 3(4). In implementing this constitutional mandate, the Legislature created the Water Court, which has jurisdiction over “all matters 1 Appellants are Patrick Saylor, Farmers Cooperative Canal Company, Eldorado Cooperative Canal Company, Teton Cooperative Canal Company, John D. Peebles, William S. Peebles, Ottis Bryan, and Sylvia Bryan. Appellants refer to themselves collectively as the Perry Defendants and we will do the same. 4 relating to the determination of existing water rights within the boundaries of the state of Montana.” Section 3-7-224(2), MCA. The law provides district courts with jurisdiction to enforce the provisions of water rights decrees and to supervise the distribution of adjudicated water. Tit. 3, Ch. 7, Pt. 2, MCA; Tit. 85, Ch. 2, MCA. The Water Court is in the process of adjudicating the water rights of all appropriators in Basin 41O, which includes the Teton River and Spring Creek—the sources of water at issue here. Although the Water Court has issued a temporary preliminary decree for Basin 41O, it has not yet issued a final decree. Therefore, the adjudication process in Basin 41O is still ongoing. ¶5 Fellows owns several water rights in Spring Creek near Choteau, Montana. His rights were decreed in Sands Cattle & Land Co. v. Jackson, Case 727 (Mont. 10th Judicial Dist. Ct., May 31, 1892). Fellows claims that Spring Creek is recharged by water seeping through a subsurface aquifer from a stretch of the Teton River known as the Springhill Reach. In other words, Fellows asserts that Spring Creek and the Teton River are hydrologically connected. Fellows therefore contends that maintaining the flow of Spring Creek is dependent upon maintaining water in the Springhill Reach. ¶6 The Perry Defendants own various water rights in the upper Teton River northwest of Choteau. Their rights were decreed in Perry v. Beattie, Case 371 (Mont. 11th Judicial Dist. Ct., March 28, 1908). The Ninth Judicial District Court, Teton County, now supervises the distribution of water pursuant to both Perry and Sands. The water rights decreed in Perry are administered by a water commissioner pursuant to § 85-5-101, MCA. In administering water rights under Perry, the Water Commissioner 5 has diverted water out of the Teton River into the Bateman Ditch above the Springhill Reach as a water management tool. Fellows I, ¶ 4; Eldorado Co-Op Canal Co. v. Lower Teton Joint Objectors, 2014 MT 272, ¶ 32, 376 Mont. 420, 337 P.3d 74 (hereafter Eldorado). Fellows alleges that water diversion through the Bateman Ditch diminishes the flow of water through the Springhill Reach and adversely affects the water available to satisfy his Spring Creek rights. ¶7 In February 2011, Fellows filed a complaint challenging the Water Commissioner’s administration of water under the Perry decree. Specifically, he challenged the Water Commissioner’s authority to divert water out of the Teton River by means of the Bateman Ditch. The District Court ultimately dismissed Fellows’s complaint under M. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief could be granted, and Fellows appealed. ¶8 In Fellows I, we reversed the District Court’s dismissal and remanded for further proceedings. Fellows I, ¶ 22. We agreed with the District Court that Fellows could not seek relief from the action of the Perry Water Commissioner under § 85-5-301, MCA, because he did “not derive his Spring Creek water right from the Perry decree . . . .” Fellows I, ¶ 16. We concluded, however, that Fellows could seek declaratory relief and that his allegations were sufficient to state a claim under M. R. Civ. P. 12(b)(6). Fellows I, ¶ 19. We concluded further that if Fellows could “prove hydrological connectivity between Spring Creek and the Teton River, then the next step should be certification to the chief water judge under § 85-2-406(2)(b), MCA.” Fellows I, ¶ 21. 6 ¶9 On remand, Fellows filed a motion for substitution of district court judge, which Judge Olson granted. After Judge Oldenburg assumed jurisdiction, Monte Giese, William Reichelt, and Steve Kelly (Intervenors) intervened.2 Fellows then moved for summary judgment on the issue of hydrological connectivity. Following consideration of the parties’ expert depositions, the District Court granted Fellows’s motion, concluding that Spring Creek and the Teton River are hydrologically connected. The court found it unnecessary “at this stage of the proceeding” to address the scope, extent, or timing of the connectivity. ¶10 Fellows then requested the court to certify a question to the Water Court. The Perry Defendants objected to the request; the District Court held, however, that the “applicable and appropriate scope of the determination of the rights involved in the controversy is best left to the processes of the Water Court.” Accordingly, the District Court certified the following issue for determination by the Water Court: Upon remand from the Montana Supreme Court in Cause No. 2012 MT 169, pursuant to this Court’s determination of the hydrological connectivity between the Teton River and Spring Creek, and pursuant to MCA Section 85-2-406(2)(b), the Ninth Judicial District Court certifies this matter to the Montana Water Court for determination of the existing rights involved in this controversy, pursuant to Chapter 2 of Title 85, MCA. Upon its determination, the Water Court shall issue to the District Court a list or tabulation of rights, priorities, and approved points of diversion in a form determined appropriate by the Water Judge. The Water Court issued its final order on certification on March 13, 2015. 2 Intervenors claim water rights from the Teton River and were parties in related cases before this Court. Eldorado, ¶ 1; Giese v. Blixrud, 2012 MT 170, ¶ 1, 365 Mont. 548, 285 P.3d 458. Both Eldorado and Giese concerned the Water Commissioner’s diversion of water from the Teton River into the Bateman Ditch. Eldorado, ¶ 7; Giese, ¶ 6. 7 ¶11 In its final order, the Water Court concluded that the purpose of certification under § 85-2-406(2)(b), MCA, is “to provide sufficient information to enable the District Court to resolve the immediate controversy.” Because it concluded that the underlying controversy stemmed from the Water Commissioner’s use of the Bateman Ditch as a water management tool, the Water Court determined that the scope of the controversy should be defined by Fellows’s water right claims and by the water right claims that historically utilized the Bateman Ditch. Consequently, the Water Court concluded that three Patrick Saylor Teton River water right claims, a Choteau Cattle Company Teton River water right claim, and Fellows’s Spring Creek water right claims “constitute the claims properly before the Water Court in this certification.” By the time of its certification order, all of the Saylor, Choteau Cattle Company, and Fellows water right claims had been adjudicated in the temporary preliminary decree. The court therefore concluded that further proceedings were not required in answering the certification issue. The Water Court tabulated the claims at issue and ordered that the matter be closed and returned to the District Court. ¶12 The Perry Defendants then filed a M. R. Civ. P. 59(e) motion to alter or amend the Water Court’s judgment. The motion requested that the Water Court withdraw its final order and return the matter to the District Court “to properly identify the water rights involved in the controversy, as defined by the allegations of Fellows’ First Amended Complaint.” The Water Court denied the motion. The Perry Defendants appeal. 8 STANDARDS OF REVIEW ¶13 We review a trial court’s denial of a M. R. Civ. P. 59(e) motion for abuse of discretion. In re Marriage of Anderson, 2013 MT 238, ¶ 13, 371 Mont. 321, 307 P.3d 313. A trial court abuses its discretion when it acts arbitrarily, without employment of conscientious judgment, or exceeds the bounds of reason resulting in substantial injustice. RN & DB, LLC v. Stewart, 2015 MT 327, ¶ 14, 381 Mont. 429, 362 P.3d 61. We review a trial court’s interpretation of a statute de novo. City of Livingston v. Mont. Pub. Emps. Ass’n ex rel. Tubaugh, 2014 MT 314, ¶ 11, 377 Mont. 184, 339 P.3d 41. Whether a court has jurisdiction over the parties or the subject matter is a legal conclusion that we review de novo. Pinnow v. Mont. State Fund, 2007 MT 332, ¶ 13, 340 Mont. 217, 172 P.3d 1273. DISCUSSION ¶14 1. Whether the water right claims in controversy were properly determined following this Court’s remand in Fellows I. ¶15 In its order denying the Perry Defendants’ motion to alter or amend its judgment, the Water Court first concluded that it had jurisdiction to determine the scope of the certification question because the Water Court’s role under § 85-2-406(2)(b), MCA, “is to provide sufficient information to the District Court to facilitate resolution of the underlying water distribution controversy.” The court next concluded that “Fellows has decreed rights from Spring Creek[;] he is not claiming the Teton River as the source for these water rights.” The court reiterated that “Fellows is seeking the ability to participate in any District Court proceedings on use of the Bateman Ditch as a water conservation 9 measure.” The Water Court therefore concluded that it correctly identified the scope of the controversy and appropriately tabulated “the rights that historically used the Bateman Ditch and the Spring Creek claims Fellows is seeking to protect.” ¶16 On appeal, the Perry Defendants raise several points of error in asserting that the Water Court abused its discretion in denying their M. R. Civ. P. 59(e) motion, including: that the Water Court did not follow the law of the case; that certification under § 85-2-406(2)(b), MCA, was inappropriate; and that the Water Court failed to define the scope of the controversy, improperly determined the purpose of the tabulation, and inadequately tabulated the rights in controversy. We address each argument in turn. ¶17 First, the Perry Defendants contend that the law of the case established in Fellows I was not followed because Fellows’s rights were not properly certified for determination with a modified Teton River source. They assert that in Fellows I, we implicitly contemplated that the purpose of certification “was for Fellows’ rights to be determined as Teton rights vis-à-vis the Perry Decree users.” They therefore contend that the Water Court abused its discretion in determining that Spring Creek is the source of Fellows’s water right claims in controversy. ¶18 We are not persuaded by the Perry Defendants’ contention that we implicitly concluded in Fellows I that Fellows’s rights must be determined with a modified Teton River source. The Perry Defendants rely on the well-established rule 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 10 progress . . . .” Fiscus v. Beartooth Elec. Coop., 180 Mont. 434, 437, 591 P.2d 196, 197 (1979) (citation and internal quotations omitted). In Fellows I, we stated multiple times explicitly that Spring Creek is the source of Fellows’s water right claims involved in the controversy. E.g., Fellows I, ¶¶ 2, 16, 21. We did not hold that the Water Court on certification must determine Fellows’s rights as Teton River rights. Accordingly, we conclude that the Water Court adhered to the law of the case and therefore did not abuse its discretion in concluding that the source of Fellows’s rights in controversy is Spring Creek, not the Teton River. ¶19 The Perry Defendants next argue that certification under § 85-2-406(2)(b), MCA, was improper based on a “holistic reading” of the statute. They contend that certification is appropriate under § 85-2-406(2)(b), MCA, only if the rights involved in the controversy have not yet been determined. Because the rights in controversy here are “determined claims,” the Perry Defendants assert that the Water Court could perform only an enforcement tabulation pursuant to § 85-2-406(4), MCA. They next argue that the Water Court lacked jurisdiction under § 85-2-406(2)(b), MCA, to determine which parties and water rights were involved in the underlying water distribution controversy. The statute, they contend, requires that the District Court make those determinations prior to certification. Without a determination by the District Court as to which parties and which water rights are involved in the controversy, the Perry Defendants claim that certification under § 85-2-406(2)(b), MCA, was inappropriate. 11 ¶20 In Fellows I, we pronounced that if Fellows could establish “hydrological connectivity between Spring Creek and the Teton River, then the next step should be certification to the chief water judge under § 85-2-406(2)(b), MCA.” Fellows I, ¶ 21. Upon remand, the District Court established hydrological connectivity on summary judgment and then followed this Court’s direction by certifying a question to the Water Court pursuant to § 85-2-406(2)(b), MCA. ¶21 The role of the judge in construing a statute “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. It is a well-established rule that “[w]hen construing a statute, it must be read as a whole, and its terms should not be isolated from the context in which they were used by the Legislature.” State v. Price, 2002 MT 229, ¶ 47, 311 Mont. 439, 57 P.3d 42 (citing State v. Nye, 283 Mont. 505, 510, 943 P.2d 96, 99 (1997)). It also is well-established that “statutes should be construed according to the plain meaning of the language used therein.” Price, ¶ 47 (citing Nye, 283 Mont. at 510, 943 P.2d at 99). Moreover, we have concluded, “Section 85-2-406(2)(b), MCA, should not be narrowly interpreted so as to frustrate solutions to water distribution controversies, but rather should be applied so as to allow for the expeditious resolution of these controversies.” Giese, ¶ 16. ¶22 Section 85-2-406(2)(b), MCA, initially requires that a “water distribution controversy” exist before a party may petition a district court for certification. As the Perry Defendants acknowledge, this matter “is undeniably a water distribution 12 controversy”; therefore, the first requirement for certification under § 85-2-406(2)(b), MCA, is met. Giese, ¶ 11. The statute further provides that, for certification to be proper, the water distribution controversy must “arise[ ] upon a source of water in which not all existing rights have been conclusively determined according to part 2 of this chapter . . . .” Section 85-2-406(2)(b), MCA. We determined in Giese that certification under § 85-2-406(2)(b), MCA, was appropriate based in part on the fact “that not all existing rights on the Teton River have been conclusively determined.” Giese, ¶ 15. We conclude that the plain meaning of the language used in § 85-2-406(2)(b), MCA, is that if all existing rights on the source of water in controversy have not been conclusively determined by final adjudication under the 1973 Water Use Act, then a party involved in a water distribution controversy may petition the court for certification. ¶23 Although the rights at issue here were decreed in Perry and Sands, those rights— along with other claimed existing water rights in Basin 41O—are subject to a temporary preliminary decree. Teton Co-Op Canal Co. v. Teton Coop Reservoir Co., 2015 MT 344, 382 Mont. 1, ___ P.3d ___; Teton Coop. Reservoir Co. v. Farmers Coop. Canal Co., 2015 MT 208, 380 Mont. 146, 354 P.3d 579; Eldorado; Skelton Ranch, Inc. v. Pondera Cnty. Canal & Reservoir Co., 2014 MT 167, 375 Mont. 327, 328 P.3d 644; Heavirland v. State, 2013 MT 313, 372 Mont. 300, 311 P.3d 813. Water right claims in Basin 41O are still working their way through the adjudication process. See § 85-2-231(1), MCA (providing that the Water Court “may issue a temporary preliminary decree prior to the issuance of a preliminary decree if the temporary preliminary decree is necessary for the 13 orderly adjudication or administration of water rights”). As such, all the existing rights in the sources of water at issue here have not been conclusively determined pursuant to Title 85, chapter 2, part 2, MCA. See § 85-2-227(1), MCA (providing in pertinent part, “For purposes of administering water rights, the provisions of a temporary preliminary decree or a preliminary decree, as modified after objection and hearings, supersede a claim of existing right until a final decree is issued.” (emphasis added)). Fellows is not seeking enforcement of a temporary preliminary decree under § 85-2-406(4), MCA, but determination of his rights and relative priorities in order to challenge delivery of water through the Bateman Ditch. Accordingly, Fellows’s petition for certification was proper pursuant to § 85-2-406(2)(b), MCA. ¶24 The Perry Defendants next assert that the plain language of § 85-2-406(2)(b), MCA, permits only district courts to identify which parties and water rights are involved in the underlying water distribution controversy. Section 85-2-406(2)(b), MCA, provides, in relevant part, “If a certification request is made, the district court shall certify to the chief water judge the determination of the existing rights that are involved in the controversy according to part 2 of this chapter.” We conclude that the plain language of the statute explicitly confers on the Water Court, when a district court requests, the authority to “determin[e] [ ] the existing rights that are involved in the controversy according to part 2 of this chapter.” Section 85-2-406(2)(b), MCA. ¶25 The Perry Defendants’ overly narrow interpretation of the statute would “frustrate solutions to water distribution controversies.” Giese, ¶ 16. Our construction of the terms 14 used in the statute is consistent with the context in which the terms were used by the Legislature. Under Montana law, “the water court is vested with exclusive jurisdiction relative to all matters relating to the determination of existing water rights within the boundaries of the State of Montana.” Baker Ditch Co. v. District Ct., 251 Mont. 251, 255, 824 P.2d 260, 260 (1992) (emphasis added) (citing § 3-7-501, MCA; Mildenberger v. Galbraith, 249 Mont. 161, 815 P.2d 130 (1991)). Given the Water Court’s comprehensive oversight of the adjudication process, its jurisdiction necessarily includes the authority to identify those parties and rights involved in a water distribution controversy based on the adjudication process, the claims made in the affected area, and the evidence before the Water Court. See Giese, ¶ 18 (instructing a district court “to certify all appropriate issues to the Chief Water Judge as provided in § 85-2-406(2)(b), MCA . . .” (emphasis added)). Accordingly, we conclude that under the plain language and the context of the terms used in § 85-2-406(2)(b), MCA, the Water Court has authority to determine which parties and rights are involved in a water distribution controversy certified by a district court. Such an application of the statute will “allow for the expeditious resolution of these controversies.” Giese, ¶ 16. ¶26 The Perry Defendants’ final contention is that the Water Court failed to define adequately the scope of the controversy based on the parties’ pleadings. They assert that the Water Court reframed the scope of the controversy too narrowly because “in order to fully determine the water distribution controversy pled by Fellows, it is necessary to determine the validity of the water right claims of [all of the named Defendants] allegedly 15 causing damage to Fellows.” The Perry Defendants allege that the underlying controversy is broader than the Water Commissioner’s use of the Bateman Ditch because Fellows alleged in his complaint that the named Defendants were appropriating his “recharge water,” giving rise to a claim for damages. Because the Water Court did not include all of the named Defendants in its order, they assert that the Water Court provided the District Court with an incomplete tabulation of the rights in controversy. Furthermore, they contend that the Water Court made an incorrect conclusion that the purpose of the certification was not enforcement of rights. ¶27 In its final order, the Water Court concluded that “[t]he scope of certification refers to the water right claims that require a review by the Water Court in order to provide the necessary information to the District Court.” The Water Court further determined that “[t]he point of certification is to provide sufficient information to the District Court to facilitate resolution of the underlying water distribution controversy,” and that “[t]he scope of the certification is typically defined by that underlying controversy.” In determining the scope and the purpose of the certification, the court concluded: Fellows requested certification for a limited purpose. He seeks the right to object if other water users ask to divert water into the Bateman Ditch as a water saving measure. He is not questioning the elements of any specific water right. He has not asserted the right to place a call on any specific water right. The water right claims involved need not include all Basin 41O water rights that may benefit from use of the Bateman Ditch as a water saving measure or all water rights that may, through their use, have an adverse impact on the Springhill Reach or Spring Creek. Fellows is specifically asking for the right to participate in any future proceeding on use of the Bateman Ditch as a water saving measure, he is not seeking 16 enforcement of all water rights and permits upgradient from his point of diversion. The Water Court noted that we had affirmed its prior tabulation of water right claims associated with the Bateman Ditch in Eldorado, and concluded that the “same water right claims identified in the [Eldorado] tabulation are at issue in this certification case.” As such, the Water Court concluded that Saylor’s, Choteau Cattle Company’s, and Fellows’s water right claims are the existing rights that are involved in the underlying controversy before the District Court. ¶28 We agree with the Water Court that the purpose of certification under § 85-2-406(2)(b), MCA, is to provide sufficient information to the District Court to facilitate resolution of the underlying water distribution controversy. See Giese, ¶ 16 (concluding that § 85-2-406(2)(b), MCA, “should be applied so as to allow for the expeditious resolution of [water distribution] controversies”). We therefore agree that the underlying water distribution controversy defines the scope of the certification. The Water Court’s order, like any court’s judgment, “must be within the issues presented to the court.” Nat’l Sur. Corp. v. Kruse, 121 Mont. 202, 205-06, 192 P.2d 317, 319 (1948). Accordingly, the Water Court properly looked to Fellows’s First Amended Complaint in determining the scope of the controversy and purpose of the certification. ¶29 A review of that complaint establishes that Fellows alleged that maintaining the flow of Spring Creek is dependent upon “Recharge Water” seeping through a subsurface aquifer located at the Springhill Reach. Fellows further alleged that the Water Commissioner “altered the delivery of water in [Perry] to allow for diversion and use of 17 Recharge Water by unknown water users (‘Defendants’)” by means of the Bateman Ditch. Fellows claimed that the Water Commissioner’s practice of diverting water through the Bateman Ditch impaired the use of his Spring Creek rights. Fellows therefore sought to enjoin the Water Commissioner from using the Bateman Ditch as a water management tool and pursued relief from the practice under both private and public nuisance as well as negligence theories. ¶30 The Perry Defendants’ assertions that the Water Court erred in defining the scope of the controversy and determining the purpose of the certification are unpersuasive. Based on our review of the issues presented in Fellows’s Amended Complaint, we conclude that the Water Court properly opined that Fellows requested certification for the limited purpose of obtaining the right to object when water was diverted through the Bateman Ditch. His complaint specifically sought an injunction “barring the distribution, diversion or use of Recharge Water” by means of the Bateman Ditch. Furthermore, the Water Court correctly determined that the scope of the certification was limited to use of the Bateman Ditch. Fellows’s complaint alleges that the groundwater aquifer located at the Springhill Reach is the primary source of water in Spring Creek; therefore, he asserts, the diversion of water through the Bateman Ditch impacts his Spring Creek rights. The Water Court appropriately confined its order to the controversy before the District Court—use of the Bateman Ditch to deliver water. ¶31 Moreover, the Water Court did not err in determining that the claims properly before the court on certification were Saylor’s and Choteau Cattle Company’s Teton 18 River water right claims and Fellows’s Spring Creek water right claims. Upon certification, the Water Court is tasked with determining “the existing rights that are involved in the controversy . . . .” Section 85-2-406(2)(b), MCA (emphasis added). As the Water Court noted, we concluded in Eldorado that it properly tabulated the “water rights that can be diverted through the Bateman Ditch.” Eldorado, ¶ 36. Because the scope of the instant controversy is limited to the use of the Bateman Ditch, it was unnecessary for the Water Court to tabulate rights beyond those that historically have used the Bateman Ditch and Fellows’s Spring Creek rights. The Water Court properly determined the existing rights involved in the controversy. ¶32 The only purpose of the certification order is the tabulation and relative priority of Fellows’s Spring Creek rights and the rights of those using the Bateman Ditch for delivery of their Teton River water. It will be in the District Court—when and if Fellows challenges use of the Bateman Ditch as a management tool—that he will need to prove that diverting water through the ditch actually and as a matter of hydrological fact impairs his water right. It is then the District Court’s function to “supervise the distribution of water among all appropriators.” Section 85-2-406(1), MCA. ¶33 Although the Perry Defendants make additional arguments, we conclude that the contentions discussed above are dispositive. Based on the foregoing analysis, we conclude the following: that the Water Court correctly determined that Spring Creek is the source of Fellows’s rights involved in the controversy; that certification pursuant to § 85-2-406(2)(b), MCA, was proper; and that the Water Court did not err in determining 19 the scope of the controversy, defining the purpose of the certification, or tabulating the applicable rights involved in the controversy. Accordingly, we hold that the Water Court did not abuse its discretion in denying the Perry Defendants’ motion to amend and that the water right claims in controversy were properly determined following this Court’s remand in Fellows I. ¶34 2. Whether the District Court erred in granting Fellows’s motion for substitution. ¶35 Section 3-1-804, MCA, provides for the substitution of district court judges; it provides, however, that there is no right of substitution of “a judge supervising the distribution of water under 85-2-406, including supervising water commissioners under Title 85, chapter 5, part 1.” Section 3-1-804, MCA. The Perry Defendants assert that the substitution of Judge Olson was improper because this case is “undeniably a water distribution controversy . . . .” The Perry Defendants further contend that the issue is properly before this Court on appeal. They rely on M. R. App. P. 6(1), which provides that this Court may review “all previous orders and rulings excepted or objected to which led to and resulted in the judgment.” Finally, they argue that the appeal is timely pursuant to M. R. App. P. 6(3)(k). ¶36 Under M. R. App. P. 6(3)(k), an aggrieved party in a civil case may appeal “[f]rom an order granting or denying a motion for substitution of judge” so long as “the order is the court’s final decision on the referenced matter.” In civil cases, M. R. App. P. 4(5)(a)(i) requires that “the notice of appeal shall be filed with the clerk of the supreme court within 30 days from the date of entry of the judgment or order from which the 20 appeal is taken.” M. R. App. P. 4(2)(c) provides, “Except where the supreme court grants an out-of-time appeal under section (6) of this rule, the timely filing of a notice of appeal or cross-appeal is required in order to invoke the appellate jurisdiction of the supreme court.” We conclude that an order pertaining to a motion for substitution of judge under M. R. App. P. 6(3)(k) must satisfy M. R. App. P. 4’s requirements for being timely. Substitution of a presiding judge is a right that is lost if not exercised early in the case. Section 3-1-804(1)(a), MCA (providing that a motion for substitution in a civil action must be filed within thirty days after either “the first summons is served or an adverse party has appeared[,] . . . [or] after service has been completed in compliance with M. R. Civ. P. 4,” depending on which party files the motion). ¶37 It would defeat the purpose of the rule to allow a party to appeal a substitution order only after the case has been finally decided. Here, the order granting Fellows’s motion for substitution of judge was entered in August 2013. The parties thereafter engaged in discovery and summary judgment proceedings in the District Court. That court certified the case to the Water Court, which conferred with the parties, reviewed the District Court record, issued its opinion and an order on certification, and then considered and denied a motion to alter or amend its order. The process consumed approximately two years. Now that the decision is made, the Perry Defendants seek to begin the process anew because the initial substitution of Judge Olson was improper. The rules do not support their argument. We conclude that the Perry Defendants’ appeal of the 21 substitution order is untimely because the notice of appeal from the order was not filed within 30 days. ¶38 Upon remand, however, the case will return to Judge Olson as the judge responsible under § 85-2-406(1), MCA, for supervising both the distribution of water under Perry and Sands and the Water Commissioners appointed to administer the water under both decrees. CONCLUSION ¶39 We affirm the Water Court’s order denying the Perry Defendants’ M. R. Civ. P. 59(e) motion and remand to the Ninth Judicial District Court, the Honorable Robert Olson presiding, for further proceedings. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT /S/ JAMES JEREMIAH SHEA

March 1, 2016

88242349-8598-4ca1-827b-461749fae281

JAS, Inc. v. Eisele

2016 MT 33

DA 15-0177

Montana

Montana Supreme Court

DA 15-0177 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 33 JAS, INC., Plaintiff and Appellant, v. RICHARD D. EISELE; LAURIE EISELE; INDYMAC BANK, FSB/DOCUMENT MANAGEMENT; INDYMAC BANK, FSB; CHARLES J. PETERSON, ESQ.; COUNTRYWIDE HOME LOANS, INC.; LSI RECORDING DEPARTMENT; NATIONAL TITLE CLEARING; ONEWEST BANK, FSB; FIRST AMERICAN TITLE COMPANY OF MONTANA, INC.; MACKOFF KELLOGG LAW FIRM; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; CITY FINANCE DEPARTMENT; YELLOWSTONE COUNTY TREASURER; MONTANA DEPARTMENT OF REVENUE; and all other persons, unknown, claiming or who might claim any right, title, estate, or interest in or lien or encumbrance upon the real property described in the complaint adverse to plaintiff's ownership or any cloud upon plaintiff's title thereto, whether such claim or possible claim be present or contingent, Defendants and Appellees. APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DV 12-0173 Honorable Mary Jane Knisely, Presiding Judge COUNSEL OF RECORD: For Appellant: W. Scott Green, Patten, Peterman, Bekkedahl & Green, PLLC; Billings, Montana February 16 2016 Case Number: DA 15-0177 2 For Appellees: Charles K. Smith, Poore, Roth & Robinson, PC; Butte, Montana Submitted on Briefs: November 4, 2015 Decided: February 16, 2016 Filed: __________________________________________ Clerk 3 Justice James Jeremiah Shea delivered the Opinion of the Court. ¶1 Plaintiff JAS, Inc. appeals the order of the Thirteenth Judicial District Court, Yellowstone County, which granted the defendants’ motion for summary judgment and voided the Trustee’s Sale at which JAS purchased the property at issue. After the Trustee’s Sale, JAS brought a quiet title action to the property against all the defendants listed in the caption of this case including Mortgage Electronic Systems, Inc. (MERS), Countrywide Home Loans, Inc., and OneWest Bank, FSB. MERS is the only original defendant remaining in this appeal. Bank of America, N.A. (BOA), the successor to Countrywide, intervened. We affirm. ¶2 We restate the issues on appeal as follows: 1. Whether Bank of America’s actual or constructive notice of the Trustee’s Sale precludes it from objecting to the sale on the basis of failure of strict compliance with the Small Tract Financing Act of Montana. 2. Whether Bank of America was entitled to notice of the Trustee’s Sale when it did not have a recorded interest in the property at the time of the sale. 3. Whether JAS is entitled to repayment of the funds it paid to OneWest Bank for the property purchased at the Trustee’s Sale. PROCEDURAL AND FACTUAL BACKGROUND ¶3 In 2004, Richard and Laurie Eisele entered into a loan with IndyMac, FSB to purchase a residence located at 6333 Bristlecone Place. The loan was secured by a Deed of Trust dated May 18, 2004. In November 2005, the Eiseles entered into a loan with Countrywide. This loan was secured by a second position lien on the Bristlecone property and a Deed of Trust dated November 23, 2005. In 2008, BOA purchased 4 Countrywide. BOA contends that Countrywide’s interest in the Bristlecone property was transferred to it at that time. ¶4 On March 5, 2010, IndyMac assigned the May 18, 2004 Deed of Trust to OneWest Bank. In early 2011, the Eiseles defaulted on their loan to OneWest Bank. The Trustee and Beneficiary associated with the Bristlecone property agreed to sell the property by Trustee’s Sale. ¶5 The Trustee prepared a Notice of Trustee’s Sale on May 6, 2011, indicating that the Bristlecone property would be sold on September 13, 2011. An Affidavit of Mailing, filed on May 16, 2011, indicates that the May 6 Notice was mailed to the Eiseles, Countrywide, and MERS. On June 30, 2011, the Trustee issued a Cancellation of Notice of Trustee’s Sale. On July 11, 2011, the Trustee issued a second Notice of Trustee’s Sale, stating the sale would be conducted on November 15, 2011. No Affidavit of Mailing pertaining to the November sale was issued; therefore, we do not know who was served with the second Notice. It is undisputed, however, that BOA was not personally served with notice of either scheduled Trustee’s Sale. ¶6 At the Trustee’s Sale on November 15, 2011, JAS purchased the Bristlecone property for $282,488.08. A Deed of Sale was issued on November 17, 2011. JAS is a company owned by Steve Zimmer through which Zimmer purchases properties at trustee sales, remodels or repairs the properties, and then resells them. Zimmer testified that he purchased the Bristlecone property with the intent that it serve as his family’s residence. ¶7 Several days after the Trustee’s Sale, a representative of Northwest Trustee Services, Inc. (NTS) approached Zimmer and offered to purchase the Bristlecone 5 property. According to the District Court’s order, NTS had been hired to represent the interests of BOA at the Trustee’s Sale. Following negotiations, JAS agreed to sell the property to NTS for $473,000. On December 2, 2011, NTS presented JAS with a cashier’s check issued by BOA for the agreed-upon amount. ¶8 While awaiting the completion of the sale of the Bristlecone property to NTS, Zimmer and his wife made several visits to the house. On or around December 9, 2011, they found a notice indicating that Field Assets Services, LLC had winterized the house. Not having requested such services, the Zimmers called Field Assets and were told that BOA had requested and paid for the winterizing services. During this time, the Zimmers also learned that BOA had retained an engineering firm to perform a structural assessment of the house. ¶9 On approximately December 15, 2011, NTS withdrew its offer to purchase the property and requested the return of BOA’s cashier’s check. NTS claimed that there had been a flaw in the way the Trustee’s Sale was conducted, and that the sale to JAS was therefore void. JAS returned the check as requested. ¶10 JAS filed a quiet title action in the Thirteenth Judicial District Court on February 8, 2012. JAS named as defendants those parties listed in the caption of this case and served them with the complaint. JAS did not name or serve BOA as a defendant. Subsequently, numerous defendants were dismissed from the proceeding after disclaiming an interest in the property, while others, including Countrywide, MERS, and OneWest Bank, were defaulted. 6 ¶11 On July 11, 2012, the District Court entered its Final Judgment and Decree, quieting title to JAS. Notice of entry of this final judgment was filed the same day. On July 16, 2012, apparently without knowledge that default judgment had been entered on July 11, 2012, Countrywide and MERS filed a joint motion to have the entries of default against them set aside. On July 24, 2012, BOA moved to intervene under M. R. Civ. P. 24(a) and to have the default judgment against Countrywide set aside. BOA also filed an answer to JAS’s complaint. ¶12 On June 26, 2013, the District Court granted MERS’s motion to have the entry of default set aside and BOA’s motion to intervene. JAS appealed the rulings to this Court. We concluded that the District Court did not manifestly abuse its discretion in granting MERS’s motion to set aside the default judgment, nor did it err in granting BOA’s motion to intervene. JAS, Inc. v. Eisele et al., 2014 MT 77, ¶ 38, 374 Mont. 312, 321 P.3d 113 (JAS I). We did not analyze the order setting aside the default judgment against Countrywide “[b]ecause the [District Court] properly allowed BOA to intervene[,] and it is the actual party in interest.” JAS I, ¶ 28. ¶13 Following the 2014 appeal, JAS moved for summary judgment against BOA and MERS. BOA moved for summary judgment against JAS. The District Court held a hearing on the motions on November 24, 2014. Neither JAS nor BOA requested or conducted additional discovery; therefore, no additional facts were presented for consideration by the court. ¶14 On January 15, 2015, the District Court issued an order granting BOA’s motion for summary judgment and denying JAS’s motion. The court held that the November 15, 7 2011 Trustee’s Sale of the Bristlecone property was void ab initio for failure to strictly follow Montana’s foreclosure laws. It held that a new Trustee’s Sale of the Bristlecone property must occur. ¶15 On February 3, 2015, JAS moved to alter or amend the January 15, 2015 order. JAS requested that the court substitute JAS for the original foreclosure entity, OneWest Bank, so that JAS could conduct a new Trustee’s Sale. JAS also asked the court to limit the notice requirements to the only remaining defendants, BOA and MERS, because all other interested parties previously defaulted in the action. In its reply brief in support of its motion, JAS alternatively requested that the court order OneWest Bank to return the $282,488.08 that JAS paid for the Bristlecone property in the first Trustee’s Sale. ¶16 On March 9, 2015, the District Court denied JAS’s motion to alter or amend. The court held that JAS could have raised all of its arguments in the summary judgment proceedings, and JAS had ample time to consider the consequences of the November 15, 2011 Trustee’s Sale being found void ab initio. The District Court further noted that it was inappropriate for JAS to request limited notice requirements for a new Trustee’s Sale because the November 15, 2011 Trustee’s Sale was found void ab initio “precisely because the Court could not determine who properly received notice” of the sale. The court also denied the repayment of the $282,488.08 JAS paid for the Bristlecone property because it was not raised in JAS’s original summary judgment motion. ¶17 JAS appeals the District Court’s January 15, 2015 order, denying summary judgment to JAS and granting summary judgment in favor of BOA. 8 STANDARDS OF REVIEW ¶18 “We review a district court’s grant of summary judgment de novo.” Knucklehead Land Co., Inc. v. Accutitle, Inc., 2007 MT 301, ¶ 10, 340 Mont. 62, 172 P.3d 116. We apply the same criteria as M. R. Civ. P. 56. Summary judgment is proper when the moving party meets its burden and establishes both the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Knucklehead, ¶ 10. “The burden of proof then shifts to the non-moving party to prove beyond mere speculation and denial that a genuine issue of material fact exists.” Knucklehead, ¶ 10. DISCUSSION ¶19 1. Whether Bank of America’s actual or constructive notice of the Trustee’s Sale precludes it from objecting to the sale on the basis of failure of strict compliance with the Small Tract Financing Act of Montana. ¶20 The Small Tract Financing Act of Montana (STFA), §§ 71-1-301 to -321, MCA, allows the use of trust indentures to finance estates of real property that are smaller than 40 acres. Section 71-1-302, MCA. A Trustee may foreclose a trust indenture by advertisement and sale. Section 71-1-313, MCA. “[T]he trustee is subjected to strict notice requirements before crying the sale . . . .” Knucklehead, ¶ 13 (citing §§ 71-1-313, -315, -319, MCA). Notice of the sale must be mailed to “any successor in interest to the grantor whose interest and address appear of record at the filing date,” and “any person who has a lien or interest . . . whose lien or interest and address appear of record at the filing date . . . .” Section 71-1-315(1)(a)(iv)-(v), MCA. The STFA also requires that, “[o]n or before the date of sale, there must be recorded in the office of the clerk and 9 recorder . . . affidavits of mailing, posting, and publication showing compliance with the requirements of this section.” Section 71-1-315(2), MCA. ¶21 JAS argues that the November 15, 2011 Trustee’s Sale was valid despite the failure to file an Affidavit of Mailing with the Clerk and Recorder. JAS contends that BOA had actual knowledge of the Trustee’s Sale because BOA hired NTS to attend the sale and bid on the Bristlecone property. JAS argues that BOA had constructive notice through publication of the Trustee’s Sale and should be precluded from objecting to the sale on the basis of failure of strict compliance with the STFA. ¶22 BOA argues that the STFA requires strict compliance, and the failure to file an Affidavit of Mailing voided the sale. In Terry L. Bell Generations Trust v. Flathead Bank of Bigfork, 2013 MT 152, 370 Mont. 342, 302 P.3d 390, the District Court voided a Trustee’s Sale for failure to follow the notice provisions of § 71-1-315, MCA. Bell, ¶ 9. In Bell, Flathead Bank held deeds of trust to property on Flathead Lake, and Bell held a later-recorded easement over the property. Bell, ¶¶ 4-5. When the property owners defaulted on their loans, Flathead Bank held a Trustee’s Sale, but Bell did not receive proper notice of the sale. Bell, ¶ 6. The Trustee held a second sale, however, of which Bell was given proper notice. Bell, ¶ 6. The District Court held that the first Trustee’s Sale was invalid for failure to give Bell proper notice, and it held that holding a second sale was proper relief. Bell, ¶ 9. This Court affirmed, holding that, “[w]hen the notice requirements are not followed, the only recourse is a second trustee’s sale where each interest holder who did not previously receive notice receives appropriate notice and has an opportunity to purchase the subject property.” Bell, ¶ 18. 10 ¶23 In this case, we cannot know which, if any, party with an interest of record received notice of the November 15, 2011 Trustee’s Sale because no Affidavit of Mailing was filed with the District Court. The STFA contains strict notice requirements. It does not provide for an actual or constructive notice exception, and we decline to adopt one here. The District Court properly voided the sale because no Affidavit of Mailing was filed as required by § 71-1-315(2), MCA. The District Court also correctly found that, as in Bell, the proper relief is to hold a second Trustee’s Sale of the Bristlecone property. ¶24 2. Whether Bank of America was entitled to notice of the Trustee’s Sale when it did not have a recorded interest in the property at the time of the sale. ¶25 JAS argues that BOA was not entitled to notice of the November 15, 2011 Trustee’s Sale because BOA did not have a recorded interest in the property at the time of the Trustee’s Sale. It bears noting that Countrywide, BOA’s predecessor-in-interest who undisputedly had an interest of record in the Bristlecone property, was entitled to notice of the Trustee’s Sale under the STFA, and we have no way of knowing whether Countrywide received the required notice because of the failure to file the required Affidavit of Mailing. ¶26 More to the point for our consideration, however, JAS did not raise this argument in the District Court. As a general rule, “this Court will not address either an issue raised for the first time on appeal or a party’s change in legal theory.” Unified Indus., Inc. v. Easley, 1998 MT 145, ¶ 15, 289 Mont. 255, 961 P.2d 100. This is because “‘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.’” Easley, ¶ 15 (quoting Day v. Payne, 11 280 Mont. 273, 277, 929 P.2d 864, 866 (1996)). Accordingly, we do not consider this argument. ¶27 3. Whether JAS is entitled to repayment of the funds it paid to OneWest Bank for the property purchased at the Trustee’s Sale. ¶28 Because we are holding that the November 15, 2011 Trustee’s Sale is void ab initio, JAS requests this Court to order the return of the $282,488.08 JAS paid to OneWest Bank for the Bristlecone property. The District Court denied this request because JAS raised it for the first time in its reply brief in support of its motion to alter or amend the judgment. The District Court noted that, during the summary judgment hearing, “the parties represented to the Court that they would be able to resolve damage issues without further court involvement once the Summary Judgment motions were addressed.” Accordingly, the District Court denied JAS’s request because it concluded “[t]his argument could have been made at the Summary Judgment hearing.” ¶29 As reflected in its notice of appeal, JAS appealed only the District Court’s denial of its motion for summary judgment; it has not appealed the District Court’s order denying its motion to alter or amend the judgment. The issue of whether JAS is entitled to the return of funds it paid to OneWest Bank was not raised in its motion for summary judgment. As the District Court noted, this issue was raised for the first time in JAS’s reply brief in support of its motion to alter or amend the judgment. This Court has previously held that we will not consider an appeal from an order that is not designated in the notice of appeal. In re K.C.H., 2003 MT 125, ¶ 29, 316 Mont. 13, 68 P.3d 788. 12 ¶30 In its January 15, 2015 order granting summary judgment to BOA, the District Court recognized that “the nullity of the sale has grave implications for the Zimmers” and expressed its expectation that the parties would pursue an “equitable result” in resolution of this case. We likewise recognize that, in light of the need to conduct a new Trustee’s Sale, equity favors JAS’s recovery of the funds it paid to OneWest Bank rather than those funds bestowing a windfall on another party. However, the District Court did not err by refusing to consider this issue, which it correctly concluded had not been properly raised. Nor is this issue properly before this Court on appeal. While it may conceivably become an issue after the second Trustee’s Sale is concluded, it is not within our province to address it at this juncture. CONCLUSION ¶31 The District Court properly voided the November 15, 2011 Trustee’s Sale for failure to comply with the notice requirements of the STFA. The issue of JAS’s recovery of the funds it paid to OneWest Bank at the November 15, 2011 Trustee’s Sale is not properly before this Court. Affirmed. /S/ JAMES JEREMIAH SHEA We Concur: /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ JIM RICE 13 Justice Beth Baker, concurring. ¶32 I concur with the disposition of this appeal, but on different grounds as to Issue Two. It is undisputed that, at the time of the Trustee’s Sale, Bank of America did not have a recorded interest in the property. Under § 71-1-315(1)(a), MCA, notice of a Trustee’s sale must be provided to: (i) the grantor, at the grantor’s address as set forth in the trust indenture or if the grantor’s address is not set forth in the trust indenture at the grantor’s last-known address; (ii) each person designated in the trust indenture to receive notice of sale whose address is set forth in the trust indenture, at that address; (iii) each person who has filed for record a request for a copy of notice of sale within the time and in the manner provided in this section, at the address of the person as set forth in the request; (iv) any successor in interest to the grantor whose interest and address appear of record at the filing date and time of the notice of sale, at that address; (v) any person who has a lien or interest subsequent to the interest of the trustee and whose lien or interest and address appear of record at the filing date and time of the notice of sale, at that address. Bank of America had neither recorded its interest nor filed a request for copies of any notices of sale as allowed by § 71-1-314, MCA. ¶33 If Bank of America had no recorded interest, it was not entitled to notice of the sale. Section 71-1-315, MCA. If it was not entitled to notice of the sale, it has no standing to object to a defect in the notice. Standing is a threshold issue that this Court considers even if it is not raised by a litigant. Baxter Homeowners Ass’n v. Angel, 2013 MT 83, ¶ 14, 369 Mont. 398, 298 P.3d 1145. I would conclude that Bank of America 14 lacks standing to assert a claim that the Trustee’s sale did not comply with the notice and recording requirements of the STFA. Contrary to Bank of America’s argument, our decision in JAS I does not establish law of the case on this point because that decision addressed only whether the District Court properly allowed Bank of America to intervene in the quiet title action. ¶34 This conclusion would not dispose of the appeal, however, because MERS also was named as a defendant in the case, is represented by the same counsel as Bank of America, and is listed in the Appellee’s Brief. MERS did have a recorded interest in the property and would have standing to object to the lack of notice or deficiencies in the process. Although Bank of America asserted in the District Court that MERS “has set forth no affirmative claims in summary judgment against JAS,” the parties do not develop adequately the relative positions of these two separate entities to justify dismissing the matter altogether for lack of standing. Nor does JAS develop its argument that MERS should be dismissed as a party to the case, save for a single reference to the Court’s decision in Pilgeram v. GreenPoint Mortgage Funding, Inc., 2013 MT 354, 373 Mont. 1, 313 P.3d 839. “It is not our obligation to conduct legal research or develop legal analysis supporting a party’s position.” In re Estate of Harmon, 2011 MT 84A, ¶ 28, 360 Mont. 150, 253 P.3d 821; (citing M. R. App. P. 12(1)(f)). ¶35 Accordingly, I concur in the decision to affirm. /S/ BETH BAKER

February 16, 2016

ac621aff-598d-41da-b22c-14de6c053d1d

In re J.H.

2016 MT 35

DA 15-0368

Montana

Montana Supreme Court

DA 15-0368 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 35 IN THE MATTER OF: J.H., A Youth in Need of Care. APPEAL FROM: District Court of the Tenth Judicial District, In and For the County of Fergus, Cause No. DN 12-07 Honorable Jon A. Oldenburg, Presiding Judge COUNSEL OF RECORD: For Appellant: Julie Brown, Montana Legal Justice, PLLC; Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy A. Hinderman, Assistant Attorney General; Helena, Montana Jim Lippert, Jim Lippert Attorney at Law, P.C.; Big Timber, Montana (Guardian Ad Litem) Thomas P. Meissner, Fergus County Attorney; Lewistown, Montana Submitted on Briefs: January 20, 2016 Decided: February 16, 2016 Filed: __________________________________________ Clerk February 16 2016 Case Number: DA 15-0368 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 C.L. appeals from an order entered by the Tenth Judicial District Court, Fergus County, approving the Department of Public Health and Human Service’s (Department) proposed permanency plan, and granting the Department long-term custody of J.H. ¶2 We address the following issues: 1. Did the District Court err by finding the Department made reasonable efforts to reunify J.H. with C.L.? 2. Did the District Court err by finding that J.H.’s best interests were served by living with E.J., and not C.L.? 3. Did the District Court err by approving the permanency plan without first holding an age-appropriate consultation with J.H.? PROCEDURAL AND FACTUAL BACKGROUND ¶3 J.H., a seven-year-old boy, is the biological child of A.H. (Mother) and C.L. (Father). Mother and Father were never married, a custody order or parenting plan was never entered, and J.H. saw Father only occasionally. When this case originated, J.H. was living in Lewistown, Montana, with Mother, Mother’s boyfriend, J.H.’s half-sister B.S., J.H.’s maternal grandmother, and his grandmother’s boyfriend. Father was living in Lancaster, Texas, with his girlfriend, their two children, and two of his girlfriend’s children from a prior relationship. ¶4 In November 2012, the Department initiated a petition for Emergency Protective Services, for Adjudication of J.H. as a Youth in Need of Care, and for Temporary Legal Custody of J.H. The petition alleged Mother had abused and neglected J.H. by exposing him to illegal drug use and failing to protect him from her abusive boyfriend. Father was 3 served with the Department’s petition, and shortly thereafter signed and filed an acknowledgement of service of the petition. Father expressed to Rose McLees (McLees), the Department social worker assigned to J.H.’s case, that he wanted custody of J.H. ¶5 At the January 2013 show cause hearing, at which Father was not present, Mother stipulated that J.H. was a Youth in Need of Care. The District Court granted the Department Temporary Legal Custody of J.H. for 180 days, including the initial plan to reunite J.H. with Mother. Shortly after the show cause hearing, Mother and Father participated by telephone in a Family Group Decision Making meeting with the Department. Father stated he wanted custody of J.H., but Mother objected to placing J.H. with Father. McLees stated she would not place J.H. with Father in Texas until Texas child authorities conducted a home study pursuant to the Interstate Compact on the Placement of Children (ICPC) and ensured Father’s home was a safe environment for J.H. ¶6 The Department returned J.H. to Mother’s care in February 2013, but Mother failed to comply with her treatment plan. J.H. was again removed from her care in July 2013 and returned to foster care, and the Department filed a petition to extend temporary legal custody of J.H. At the hearing, McLees stated the Department would continue to provide reunification services to Mother while simultaneously seeking a home study under the ICPC to determine whether J.H. could be placed with Father in Texas. The District Court granted the Department’s extension of temporary legal custody. ¶7 In September 2013, McLees asked Texas child protective services to conduct, under the ICPC, a home study and determine whether placement with Father was viable. 4 After obtaining the results of criminal and child protective services background checks on Father, Texas authorities refused to conduct a home study. The background checks revealed Father had committed multiple crimes from 2006 to 2010, including two charges for selling dangerous drugs and an aggravated assault on his girlfriend involving a knife. Further, an incident involving Father and a girlfriend had resulted in the loss of the custody of two of his children to Texas child protective services. ¶8 The Department filed its first permanency plan proposal in January 2014, stating it would continue to attempt reunification of J.H. with Mother but would seek termination of her parental rights if she was noncompliant with her treatment plan. The concurrent plan was to place J.H. with a relative, and if no suitable relative could be found, to petition for long-term custody of J.H. and a permanent living arrangement in Montana. The permanency plan did not include the option of placing J.H. with Father, although that option had apparently not yet been ruled out by the Department. Meanwhile, Father filed a Motion for Disposition and to Dismiss, requesting the District Court place J.H. with Father as the non-custodial and non-offending parent. The District Court approved the permanency plan, but declined to rule on Father’s motion at that time. ¶9 In March 2014, the Department petitioned to terminate Mother’s parental rights and to extend temporary legal custody of J.H. The Department asserted that an extension of custody was necessary because, although Texas had denied an ICPC placement with Father, the Department needed additional time to determine if placement with Father could still be achieved. Father had commissioned a private home study at his own expense, and both the Department and the guardian ad litem had agreed to consider the 5 results of the private home study. The District Court terminated Mother’s parental rights and granted the Department’s extension of temporary legal custody, which Father did not contest. ¶10 In September 2014, Texas child authorities approved J.H.’s maternal great aunt, E.J., as a kinship placement for J.H., as well as for J.H.’s half-sister B.S., with whom J.H. was very close. E.J. resided in Texas. In October 2014, the Department filed a petition to extend temporary legal custody of J.H. Father’s private home study was not yet complete and the Department wanted more time to determine whether placement with Father was viable. In the meantime, the Department planned to move J.H. and B.S. to live with E.J. in Texas, and stated that if the home study was not completed within three months, or if the home study did not recommend placement with Father, the Department would file for long-term custody of J.H. or for termination of Father’s parental rights. In December 2014, J.H. and B.S. moved to live with their Great Aunt E.J. in Texas. In January 2015, Father’s private home study was received. The study was inconclusive and the evaluator was unable to recommend Father as a viable placement for J.H. ¶11 The Department then filed a petition for long-term custody of J.H. and a second permanency plan, which sought placement of J.H. with E.J. under a guardianship. The District Court held a hearing on the permanency plan in February 2015. Michelle Feller (Feller), a licensed clinical professional counselor who counseled J.H. bi-weekly from September 2013 until he moved to Texas, testified J.H. was very close with B.S., and that it would be in J.H.’s best interests to stay with E.J., “for the reason of being with his sister and for the reason of being in a safe, secure, consistent environment.” J.H.’s 6 guardian ad litem testified J.H.’s relationship with B.S. was critical to his well-being, that J.H. was “in an ideal place,” and that there was no reason why J.H. should not be with E.J. An ICPC social worker in Texas reported J.H.’s placement with E.J. was going well, and that E.J. was providing consistency, structure, and meeting J.H.’s basic needs. The District Court approved the permanency plan but stated the approval did not preclude a later determination that the child should be placed with Father. ¶12 The District Court later held a hearing on the petition for long-term custody and Father’s motion to dismiss. The testimony largely mirrored that of the February 2015 permanency plan hearing. Additionally, E.J. testified she was committed to caring for the children for the long term, explaining “[t]hey are mine. I mean I didn’t birth them, but they are attached to me and I’m attached to them. It’s like a blessing. They’ve been through so much.” The District Court granted the Department’s petition for long-term custody until J.H. reached the age of 18, holding that J.H. remained a youth in need of care, the Department made reasonable efforts to place J.H. with Father, it was contrary to J.H.’s best interests to be placed with Father, and J.H.’s placement with E.J. was in his best interests, particularly because B.S. also resides there. Father appeals. STANDARD OF REVIEW ¶13 Whether a district court complied with the statutory requirements presents a question of law that this Court reviews for correctness. In re H.T., 2015 MT 41, ¶ 10, 378 Mont. 206, 343 P.3d 159. We review a district court’s finding of fact for clear error. In re R.M.T., 2011 MT 164, ¶ 27, 361 Mont. 159, 256 P.3d 935 (citation omitted). A factual finding is clearly erroneous if it is not supported by substantial evidence, if the 7 court misapprehended the effect of the evidence, or if review of the record convinces the Court a mistake was made. In re C.J.M., 2012 MT 137, ¶ 10, 365 Mont. 298, 280 P.3d 899 (citation omitted). We view the evidence in the light most favorable to the prevailing party when determining whether substantial credible evidence supports the district court’s findings. In re B.D., 2015 MT 339, ¶ 5, 381 Mont. 505, 362 P.3d 636. A district court’s decision will not be disturbed on appeal unless there is a mistake of law or a finding of fact clearly erroneous that amounts to an abuse of discretion. In re M.N., 2011 MT 245, ¶ 14, 362 Mont. 186, 261 P.3d 1047 (citation omitted). DISCUSSION ¶14 Under § 41-3-445(8)(e)(v), MCA, a district court may approve a permanency plan and grant long-term custody of the child in a planned permanent living arrangement if it is established by a preponderance of the evidence that: (A) the child has been adjudicated a youth in need of care; (B) the department has made reasonable efforts to reunite the parent and child, further efforts by the department would likely be unproductive, and reunification of the child with the parent or guardian would be contrary to the best interests of the child; (C) there is a judicial finding that other more permanent placement options for the child have been considered and found to be inappropriate or not to be in the best interests of the child; and (D) the child has been in a placement in which the foster parent or relative has committed to the long-term care and to a relationship with the child, and it is in the best interests of the child to remain in that placement. 8 ¶15 Father argues the District Court violated the statute in two ways. First, Father argues the Department did not engage in reasonable efforts to reunify J.H. with Father because its efforts consisted solely of the ICPC request. Second, Father argues the District Court’s finding that J.H.’s best interests were served by living with E.J., and not Father, was clearly erroneous because it was not supported by substantial evidence.1 ¶16 1. Did the District Court err by finding the Department engaged in reasonable efforts to reunify J.H. with Father? ¶17 The determination of whether the Department made “reasonable efforts” to reunify a family requires that “each case [] be evaluated on its own facts.” In re K.L., 2014 MT 28, ¶ 41, 373 Mont. 421, 318 P.3d 691. The term is not defined by statute, but “clearly the statute does not require herculean efforts.” In re K.L., ¶ 41. Rather, “the child’s health and safety are of paramount concern,” when determining what efforts are required. Section 41-3-423(1), MCA; see also In re K.L., ¶ 41 (citing “the child’s need for permanency and stability” in considering whether the Department’s efforts were reasonable). 1 We initially note that the parties do not dispute that the District Court’s order approving the permanency plan and granting the Department long-term custody of J.H. is an appealable order. The Montana Rules of Appellate Procedure designate as not appealable orders of temporary custody in abuse and neglect proceedings. Mont. R. App. P. 6(5)(c); see also In re S.S., 2012 MT 78, ¶ 10, 364 Mont. 437, 276 P.3d 883. We have defined an appealable order as “one which constitutes a final determination of the rights of the parties; any judgment, order or decree leaving matters undetermined is interlocutory in nature and not a final judgment for purpose of appeal.” In re Matter of D.A., 2003 MT 109, ¶ 13, 315 Mont. 340, 68 P.3d 735; see also M. R. App. P. 4(1)(a). The long-term custody order and permanency plan entered herein give the State the power to infringe upon Father’s fundamental liberty interest in parenting until J.H. reaches 18, and cannot be said to be interlocutory. 9 ¶18 The parties and the Guardian ad litem also argue concerning the proper application of the ICPC in this case. Under the ICPC, which Montana has joined by statute and for which the Department has adopted by rule the regulations of the Association of Administrators of the ICPC (AAICPC), neither a state court nor a child protective services agency may send a child to another state until the public authorities in the receiving state notify the sending state that “the proposed placement does not appear to be contrary to the interests of the child.” Section 41-4-101, MCA, Art. III, § 4; Mont. Admin. R. 37.50.901. An open dependency and neglect case requires compliance with Article III of the ICPC unless (1) the court places the child with a parent from whom the child was not removed, (2) the court has no evidence the parent is unfit and seeks none from the receiving state, and (3) relinquishes jurisdiction over the child immediately upon placement with the parent. AAICPC Reg. 3, §§ 2(b), 3(a). After finding a child is a youth in need of care, a district court may dismiss the proceeding—ending the Department’s obligations and the applicability of the ICPC—and order placement with the noncustodial parent to protect the welfare of the child. Section 41-3-438(3)(d), MCA. ¶19 The Department argues its efforts were reasonable because as long as the case remained open it was required to follow the ICPC, which precluded placement with Father until Texas approved the placement. Father responds that the Department could have simply agreed to dismiss the case, which would have made the ICPC inapplicable, and placed J.H. with Father pursuant to § 41-3-438(3)(d), MCA. Father further argues the Department did not “set out any goals or objectives that could have resulted in J.H.’s placement with Father.” We agree with the Department. 10 ¶20 The very goal of the Department’s ICPC request to Texas child services was to determine whether placing J.H. with Father was viable. When Texas denied the request after conducting a criminal background check and child protective services background check, the Department was left only two avenues to place J.H. with Father: dismissal of the case under § 41-3-438(3)(d), MCA, to remove the applicability of the ICPC, or establish Father met the exception under AAICPC Reg. 3, § 3(a). That exception could not be satisfied because the District Court had evidence before it that Father was potentially unfit, including that Father had dealt crack cocaine and was party to a domestic violence incident involving a knife.2 The Department investigated the possibility of placing J.H. with Father—by dismissal under § 41-3-438(3)(d), MCA— when it agreed to consider the results of the private home study commissioned by Father This effort to reunite J.H. with Father also proved futile when the examiner of that study could not recommend placement with Father. Although Father had apparently made progress, the Department was understandably reluctant to agree that dismissal and placement with Father would protect the welfare of J.H., given Father’s recent criminal history and the failure to be approved by his private home study. At that point, the Department had exhausted the three main avenues to place J.H. with Father, and began seeking an alternative, stable, placement that was in J.H.’s best interests. The Department’s efforts to reunify J.H. with Father constituted reasonable efforts under these facts. 2 Father was still on felony probation for these offenses when this case began. 11 ¶21 2. Did the District Court err by finding that J.H.’s best interests were served by living with E.J., and not Father? ¶22 Father argues the District Court was required to explicitly find he was an “unfit” parent before it could determine whether J.H.’s best interests were served by living with his Great Aunt E.J., and that there was no substantial evidence supporting the District Court’s finding that it was in J.H.’s best interests to live with E.J., and not with Father. The Department counters that a finding of “unfitness” is not required in a long-term custody proceeding, and that the District Court’s findings were supported by substantial evidence. We agree with the Department. ¶23 Nothing in the statutes or our precedents suggests a district court must explicitly find a parent is unfit before it may determine the best interests of the child in a long-term custody proceeding. It is correct that we have adopted the presumption that the best interests of a child are served in the custody of the natural parents. In re Guardianship of J.R.G., 218 Mont. 336, 342, 708 P.2d 263, 267 (1985). Further, § 41-3-445(8)(e)(v)(B), MCA, requires that a district court find “reunification of the child with the parent or guardian would be contrary to the best interests of the child,” thus codifying and applying this presumption to long-term custody proceedings. But nowhere is it suggested a district court must find more than this before ordering an alternative placement in a long-term custody proceeding. We reject Father’s position that the District Court erred as a matter of law by not explicitly finding that Father was “unfit” before determining it was in J.H.’s best interests to be placed with E.J. 12 ¶24 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). ¶25 There was significantly more than a “scintilla” of evidence supporting the District Court’s finding that J.H.’s best interests were served by a placement with E.J. and not Father. Feller testified it was in J.H.’s best interests to stay with E.J., “for the reason of being with his sister and for the reason of being in a safe, secure, consistent environment.” The guardian ad litem testified it was critical J.H. reside in the same place as B.S., calling the placement with E.J. an “ideal place” for J.H.’s well-being. E.J. herself testified and committed to the long-term care of J.H. and B.S., stating “they are attached to me, and I’m attached to them.” The Texas social worker reported E.J. was providing consistency, structure, and meeting J.H.’s basic needs. In contrast, the District Court had evidence before it that Father had sold crack-cocaine, been in a domestic violence incident, and had been in a dispute that resulted in two of his children being taken away by Texas child services. A reasonable mind could well weigh these facts and conclude it was in J.H.’s best interests to live with E.J., and not with Father. The District Court’s findings were therefore not clearly erroneous. ¶26 It is worth noting that Father’s parental rights to J.H. were not terminated in this proceeding, that he lives relatively close to where J.H. is residing with E.J. in Texas, and that he may well have an opportunity to further his relationship with J.H. in the future. 13 ¶27 3. Did the District Court err by approving the permanency plan without first holding an age-appropriate consultation with J.H.? ¶28 Father argues the District Court failed to hold an age-appropriate consultation with J.H. prior to approving the Department’s second permanency plan as required by § 41-3-445(4), MCA. However, Father failed to raise this issue before the District Court. “[I]t is well settled that issues raised for the first time on appeal will not be reviewed.” In re Transfer Terr. From Poplar Elem. Sch. Dist. No. 9 to Froid Elem. Sch. Dist. No. 65, 2015 MT 278, ¶ 18, 381 Mont. 145, ___ P.3d ___ (citation omitted). This issue is therefore not properly before us for review. Poplar, ¶ 13. ¶29 Affirmed. /S/ JIM RICE We concur: /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ PATRICIA COTTER /S/ BETH BAKER

February 16, 2016

200c2d85-ff0a-47a6-a02a-21b5567c6482

In Marriage of Bliss

2016 MT 51

DA 15-0381

Montana

Montana Supreme Court

DA 15-0381 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 51 IN RE THE MARRIAGE OF: DAVA D. BLISS, Petitioner and Appellee, and CREED MILES EVANS II, Respondent and Appellant. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. DDR-11-656 Honorable Dirk M. Sandefur, Presiding Judge COUNSEL OF RECORD: For Appellant: Creed Miles Evans II (self-represented); Bozeman, Montana For Appellee: Shari M. Gianarelli, Gianarelli & Reno, PLLC; Conrad, Montana Submitted on Briefs: January 27, 2016 Decided: March 8, 2016 Filed: __________________________________________ Clerk March 8 2016 Case Number: DA 15-0381 2 Justice James Jeremiah Shea delivered the Opinion of the Court. ¶1 Creed Miles Evans II appeals orders by the Eighth Judicial District Court, Cascade County, adopting the Standing Master’s declaratory judgment that Evans’ and Dava Bliss’ Antenuptial Agreement (Agreement) is valid and enforceable; denying Evans’ motion to alter or amend the District Court’s adoption of the Standing Master’s declaratory judgment; and adopting the Standing Master’s findings of fact, conclusions of law, and decree of dissolution. ¶2 We restate the issues on appeal as follows: 1. Whether the District Court erred in finding the Agreement valid and enforceable. 2. Whether the District Court erred or abused its discretion in determining that more than 150 firearms belonged to Bliss. ¶3 We affirm. PROCEDURAL AND FACTUAL BACKGROUND ¶4 Evans and Bliss were married on October 31, 1996. Their marriage was dissolved in 2015. The Agreement is dated October 30, 1996, one day before Bliss and Evans were married. It contains both parties’ notarized signatures. The Agreement provides that all property held individually by a party before and during the marriage remains that party’s sole property upon dissolution. ¶5 During the dissolution proceedings before the Standing Master, Bliss filed a motion for a declaratory judgment that the Agreement governed the distribution and allocation of marital property and debt. Evans filed a response to Bliss’ motion, disputing the validity of the Agreement. On January 18, 2013, after conducting a I 3 hearing, the Standing Master issued a declaratory judgment that the Agreement was enforceable. ¶6 The Standing Master’s declaratory judgment contained the following relevant factual findings: The Agreement was signed by Bliss and Evans on October 30, 1996, before notary Debbie Hicks in Conrad, Montana. Before Evans signed the Agreement, he met with an attorney in Conrad to obtain independent legal advice. There was only one original Agreement signed by the parties. The Agreement incorporated two exhibits—Exhibit A and Exhibit B—which listed assets compiled from information sent by Bliss and Evans, respectively. Dale Keil, the attorney who prepared the Agreement, retained the original Agreement with its exhibits in his files. Keil credibly testified that the Agreement admitted as Bliss’ Exhibit 1 during the dissolution hearing was the Agreement signed by the parties on October 30, 1996, and was unaltered and in its original condition. Two assets owned by Bliss at the time of marriage—a Scottish Fold cat-breeding business and a pet-grooming business—were not listed in the Agreement; however, Evans was aware of the existence of both. In an October 14, 2005 affidavit, Evans acknowledged the existence and enforceability of the Agreement and stated that he signed the Agreement “after careful consideration and of my own free will.” ¶7 Based on these findings, the Standing Master concluded that Bliss’ Exhibit 1 was a true and correct copy of the Agreement. The Standing Master further concluded that the parties signed the Agreement before the wedding, and that Evans entered into the Agreement after careful consideration and of his own free will. Therefore, the Standing 4 Master concluded that the Agreement was valid and enforceable and governed the rights between Bliss and Evans in the dissolution of their marriage. ¶8 On March 27, 2013, after reviewing the record and holding a hearing, the District Court issued an order affirming and adopting the Standing Master’s declaratory judgment. The District Court determined that the Standing Master’s findings of fact were not clearly erroneous, her conclusions of law were correct, she did not abuse her discretion, and the interests of justice did not warrant the taking of supplemental evidence upon review. Evans filed a motion to alter or amend the District Court’s order. On June 13, 2013, the District Court denied Evans’ motion. ¶9 The dissolution proceeding continued and, on January 7, 2015, the Standing Master issued her findings of fact, conclusions of law, and decree of dissolution. The Standing Master reiterated many of the facts in her declaratory judgment and made additional findings regarding the division of the parties’ personal property. Relevant to the issues before us, the Standing Master made the following findings regarding ownership of 186 firearms: Evans is prohibited by federal court order from owning firearms and ammunition due to his conviction of a federal felony. This includes all breech-loading guns, which are “firearms” under federal law. Before the parties’ marriage, Evans gifted a number of breech-loading guns and parts to Bliss due to his conviction. Bliss kept these firearms and purchased additional breech-loading guns at Evans’ suggestion. Evans legally cannot possess these firearms, and they belong to Bliss. Though Evans is prohibited from owning breech-loading guns, he is not prohibited from 5 owning muzzle-loading guns because they are not considered “firearms” under federal law. Bliss was in possession of twenty-six muzzle-loading guns that belong to Evans. ¶10 On June 4, 2015, after holding a hearing, the District Court affirmed and adopted the Standing Master’s findings of fact, conclusions of law, and decree of dissolution. The District Court found that the Standing Master’s findings of fact were not clearly erroneous, her conclusions of law were correct, and she did not abuse her discretion. ¶11 Evans appeals the District Court’s March 27, 2013 order adopting the Standing Master’s declaratory judgment; its June 13, 2013 order denying his motion to alter or amend; and its June 4, 2015 order adopting the Standing Master’s findings of fact, conclusions of law, and decree of dissolution. Evans contends that the District Court erred in finding the Agreement valid and enforceable and in finding that all breech-loading firearms belong to Bliss. STANDARDS OF REVIEW ¶12 We review de novo a district court’s decision to adopt a standing master’s report to determine whether it applied the correct standards of review to the standing master’s findings of fact and conclusions of law. Patton v. Patton, 2015 MT 7, ¶ 17, 378 Mont. 22, 340 P.3d 1242. We apply the same standards of review to an adopted standing master’s report that we do to any other district court order. Maloney v. Home & Inv. Ctr., Inc., 2000 MT 34, ¶ 28, 298 Mont. 213, 994 P.2d 1124. ¶13 In reviewing a district court’s division of marital property, we first determine whether the findings of fact upon which the division is based are clearly erroneous and whether the district court’s conclusions of law are correct. Patton, ¶ 18. “A finding is 6 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, ¶ 18. If there are no clearly erroneous findings or incorrect conclusions of law, we next determine whether the district court abused its discretion. Patton, ¶ 19. “In a dissolution proceeding, the test for an abuse of discretion is whether the district court acted arbitrarily without employment of conscientious judgment or exceeded the bounds of reason resulting in a substantial injustice.” Patton, ¶ 19. DISCUSSION ¶14 1. Whether the District Court erred in finding the Agreement valid and enforceable. ¶15 Antenuptial agreements are premarital agreements subject to the Uniform Premarital Agreement Act, §§ 40-2-601 through 40-2-610, MCA. Pursuant to § 40-2-605(1)(a), MCA, “[p]arties to a premarital agreement may contract with respect to . . . the rights and obligations of each of the parties in any of the property of either or both of them, whenever and wherever acquired or located.” A premarital agreement is enforceable unless the party against whom enforcement is sought proves that: (a) that party did not execute the agreement voluntarily; or (b) the agreement was unconscionable when it was executed and, before execution of the agreement, that party: (i) was not provided a fair and reasonable disclosure of the property or financial obligations of the other party; (ii) did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided; and (iii) did not have or reasonably could not have had an adequate knowledge of the property or financial obligations of the other party. 7 Section 40-2-608(1), MCA. Evidence of lack of capacity, duress, fraud, and undue influence is relevant to determining whether a premarital agreement is involuntary. In re Marriage of Shirilla, 2004 MT 28, ¶ 13, 319 Mont. 385, 89 P.3d 1 (citation omitted). ¶16 Evans contends that the Standing Master and the District Court erred in their factual findings regarding the validity of the Agreement. According to Evans, the Agreement is fraudulent. Although the Agreement is dated October 30, 1996, Evans contends that he was not presented with the Agreement until minutes before his wedding on October 31, 1996. Evans contends that the execution of the Agreement thus was unconscionable. Evans further contends that evidence presented at trial—phone records and markings on Bliss’ personal agenda—proves that the Agreement was not correctly dated. Evans contends that this evidence conclusively demonstrates that it would have been physically impossible for the parties to drive from Vaughn, where they resided, or Great Falls, where Bliss worked that day, to Conrad, where the Agreement was signed, and back on October 30, 1996. Evans also contends that the Agreement was fraudulent because Bliss’ cat-breeding and dog-grooming businesses were not included in her list of assets (Exhibit A) and Exhibit B does not accurately reflect his assets and liabilities at the time of the marriage. ¶17 “A trial court acting as a finder of fact is in the best position to observe the witnesses, including their demeanor and credibility.” In re Seizure of $23,691.00 in U.S. Currency, 273 Mont. 474, 485, 905 P.2d 148, 155 (1995) (citation omitted). We will not substitute our judgment for that of the lower court “regarding the credibility of witnesses and the weight of their testimony.” In re Seizure of $23,691.00 in U.S. Currency, 8 273 Mont. at 485, 905 P.2d at 155 (citation omitted). This is because “[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 Seizure of $23,691.00 in U.S. Currency, 273 Mont. at 485, 905 P.2d at 155 (citation omitted). Evans’ testimony from the declaratory judgment hearing before the Standing Master reflects many of the same contentions he maintains on appeal. The Standing Master found Evans’ testimony overwhelmingly not credible, particularly in light of conflicting testimony from multiple witnesses. ¶18 Before adopting the Standing Master’s declaratory judgment, the District Court reviewed the transcript of the hearing before the Standing Master and held a separate hearing with the parties and their counsel. At the hearing before the Standing Master, Hicks testified that she notarized Bliss’ and Evans’ signatures on the Agreement on October 30, 1996. Keil testified that he received a fax of Evans’ assets from Evans’ business fax number, which he used to prepare Exhibit B. Although Bliss’ cat-breeding and dog-grooming businesses were not listed under Bliss’ assets, Evans acknowledged that, when he signed the Agreement, he was aware of both businesses. ¶19 Evans also testified that he met with an attorney before signing the Agreement, though he maintained that he did not see a draft of the Agreement at that time. Evans testified that he had experience working for three different attorneys doing legal research, investigating, and drafting legal documents. Peggy Engel, a licensed notary, testified that she notarized Evans’ October 14, 2005 affidavit, in which Evans stated that he signed the 9 Agreement “after careful consideration and of my own free will.” Evans admitted that he signed the affidavit but claimed he was under duress at the time because Bliss told him she would commit suicide if he did not sign it. Engel testified that she would not have notarized Evans’ affidavit if Evans appeared unwilling or under duress to sign it. ¶20 The record contains sufficient evidence to support the District Court’s finding that Evans voluntarily signed the Agreement. See § 40-2-608(1), MCA. Apart from Evans’ self-serving testimony, the record contains no evidence that the Agreement was fraudulent or that Evans lacked capacity, was under duress, or was subject to undue influence when he signed the agreement. See Shirilla, ¶ 13. Although Evans contends that he was not provided a fair disclosure of Bliss’ property because her list of assets did not include her dog-grooming or cat-breeding businesses, Evans does not dispute that he had knowledge of both businesses at the time he signed the Agreement. The District Court found that both businesses produced minimal profit when the parties were married, that Evans lived with Bliss when she was operating the cat-breeding business out of her home, and that Evans occasionally helped with small tasks involving Bliss’ pet-grooming business. Evans does not dispute these facts. Given Evans’ familiarity with both businesses, the fact that neither was listed under Bliss’ assets did not prevent Evans from being provided a fair and reasonable disclosure of Bliss’ property. See § 40-2-608(1)(b)(i), MCA. ¶21 The District Court applied the correct standards of review to the Standing Master’s declaratory judgment by reviewing the Standing Master’s findings of fact for clear error and its conclusions of law to determine whether they were correct. The District Court 10 determined the credibility of witnesses and weighed the evidence before it. There is substantial evidence in the record to support the District Court’s adoption of the Standing Master’s findings. Therefore, the District Court’s factual findings regarding validity of the Agreement are not clearly erroneous. We further conclude that the District Court correctly applied the law to the facts. ¶22 2. Whether the District Court erred or abused its discretion in determining that more than 150 firearms belonged to Bliss. ¶23 The only specific distribution of property Evans appeals is the distribution of 186 firearms. Premarital agreements are contracts. See Deschamps v. Deschamps, 2009 MT 431, ¶¶ 14-15, 354 Mont. 94, 223 P.3d 324. Pursuant to § 28-3-201, MCA, “[a] contract must receive such an interpretation as will make it lawful, operative, definite, reasonable, and capable of being carried into effect if it can be done without violating the intention of the parties.” The contract’s language “shall govern its interpretation, provided that the language is clear and explicit” and there are no absurdities. Deschamps, ¶ 15. ¶24 The Agreement clearly states that “[a]ny property inherited or gifted to either party shall be owned as separate property by the inheriting party.” Regarding gifts between the parties, the Agreement provides: “Nothing in this agreement shall be construed as a waiver or renunciation by either party of any gift, bequest, or devise which may be made by the other party in addition to any benefit given to them by reason of this agreement.” Evans does not dispute that he gave all of his breech-loading firearms to Bliss before and during the parties’ marriage. Bliss was the sole owner of those firearms upon dissolution 11 of the parties’ marriage. Therefore, under the clear and explicit language of the Agreement, the firearms belong to Bliss. ¶25 The District Court did not err in finding that all breech-loading firearms belong to Bliss. The District Court correctly applied the law to the facts. The court did not act arbitrarily without employment of conscientious judgment, and its distribution of the parties’ assets was just. CONCLUSION ¶26 We affirm the District Court’s March 27, 2013 order adopting the Standing Master’s declaratory judgment; its June 13, 2013 order denying Evans’ motion to alter or amend; and its June 4, 2015 order adopting the Standing Master’s findings of fact, conclusions of law, and decree of dissolution. The District Court did not err in finding the Agreement valid and enforceable. Nor did the District Court err or abuse its discretion in determining that more than 150 firearms belong to Bliss. /S/ JAMES JEREMIAH SHEA We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ JIM RICE

March 8, 2016

3051ece1-b6e2-484a-b13e-940750c9f667

Parenting of Ludeman

2016 MT 37N

DA 15-0436

Montana

Montana Supreme Court

DA 15-0436 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 37N IN RE THE PARENTING OF: G.C.L., Minor, BRIAN R. BERTOGLIO, Petitioner and Appellee, and JENNY M. LUDEMAN, Respondent and Appellant. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DR-11-341 Honorable Robert L. Deschamps, III, Presiding Judge COUNSEL OF RECORD: For Appellant: Howard Toole, Attorney at Law, Missoula, Montana For Appellee: Brad L. Belke, Attorney at Law, Butte, Montana Submitted on Briefs: January 20, 2016 Decided: February 16, 2016 Filed: __________________________________________ Clerk February 16 2016 Case Number: DA 15-0436 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 Jenny Ludeman (Ludeman) appeals from an order entered by a Standing Master of the Fourth Judicial District Court dismissing this case. We affirm. ¶3 Ludeman gave birth to a child, G.C.L., on December 17, 2009. Brian Bertoglio (Bertoglio) is the child’s father. Ludeman and Bertoglio were never married and their relationship deteriorated. On May 20, 2011, Bertoglio petitioned the Fourth Judicial District Court, Missoula County for an order establishing a parenting plan and granting him primary custody of G.C.L. At the time of the petition, G.C.L. lived with her mother in Missoula. Ludeman responded pro se on July 26, 2011, and requested that the District Court adopt her proposed parenting plan and enter an order requiring Bertoglio to pay child support. Ludeman filed her proposed parenting plan on October 26, 2011. It is undisputed that since October, 2011, neither party has actively pursued the case in Missoula County. In 2013, Ludeman moved to California. G.C.L. remained with her maternal grandparents in Missoula for over a year before Ludeman brought G.C.L. to live with her in California. ¶4 On May 27, 2014, Bertoglio filed another petition for a parenting plan and an order granting him primary custody of G.C.L., this time with the Second Judicial District 3 Court, Silver Bow County. Bertoglio has been stationed with the U.S. Army in various locales, but he maintains his legal residency in Butte. Ludeman failed to appear or respond to this petition, and her default was entered. On December 19, 2014, the District Court in Butte granted Bertoglio primary custody of G.C.L. and authorized him to travel to California to enforce the order and take custody of G.C.L. ¶5 In March of 2015, a California Children’s Social Worker was alerted to possible neglect of G.C.L. by Ludeman. This allegation initiated a months-long inquiry into G.C.L.’s welfare. On May 27, 2015, a court in California granted a Children’s Social Worker’s request to remove G.C.L. from Ludeman’s custody. The child was removed and placed with Bertoglio on June 1, 2015, and she remains with her father. ¶6 On April 29, 2015, Bertoglio moved to dismiss the case pending in the Fourth Judicial District Court, Missoula County for failure to prosecute. Ludeman opposed the motion. The Standing Master dismissed the case on other grounds; Ludeman appeals the dismissal. ¶7 Although Ludeman brings her appeal on the basis that the District Court abused its discretion in dismissing the Missoula case, she does not present any argument on appeal to support her claim. Rather, she complains in her briefs of actions taken in the Silver Bow County and California custody cases—matters outside the jurisdiction of the Fourth Judicial District Court and thus beyond the ambit of this appeal. We can address here only the propriety of the order dismissing the instant case. Because Ludeman has failed to support her claim of error with any argument or authority, as she is required to do under Rule 12(1)(g) of the Montana Rules of Appellate Procedure, she has failed to carry 4 her burden of proving error on the part of the District Court. “We have repeatedly held that it is not this Court’s obligation to conduct legal research on behalf of a party or to develop legal analysis that might support a party’s position.” State v. Cybulski, 2009 MT 70, ¶ 13, 349 Mont. 429, 204 P.3d 7 (citing State v. Torgerson, 2008 MT 303, ¶ 36, 345 Mont. 532, 192 P.3d 695). Therefore, we affirm the decision of the Fourth Judicial District Court dismissing the case. ¶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. ¶9 Affirmed. /S/ PATRICIA COTTER We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ JIM RICE

February 16, 2016

2b5cc6e8-c795-4231-ba8c-d0a491021119

Stafford v. Fockaert

2016 MT 28

DA 15-0345

Montana

Montana Supreme Court

DA 15-0345 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 28 GAIL STAFFORD, Plaintiff and Appellee, v. CHARLES FOCKAERT, Defendant and Appellant. APPEAL FROM: District Court of the Second Judicial District, In and For the County of Butte/Silver Bow, Cause No. DV 12-302 Honorable Kurt Krueger, Presiding Judge COUNSEL OF RECORD: For Appellant: Charles Fockaert, Self-Represented, Somers, Montana For Appellee: Quentin M. Rhoades, Nicole L. Siefert, Rhoades & Siefert, P.L.L.C., Missoula, Montana Submitted on Briefs: January 6, 2016 Decided: February 9, 2016 Filed: __________________________________________ Clerk February 9 2016 Case Number: DA 15-0345 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Charles Fockaert appeals pro se from an order issued by the Second Judicial District Court, Silver Bow County, granting default judgment in favor of Gail Stafford and awarding her prejudgment interest. We affirm. ¶2 We address the following issues on appeal: 1. Whether the District Court abused its discretion by entering a default judgment in favor of Stafford as a sanction for Fockaert’s failure to comply with the court’s order requiring mediation. 2. Whether the District Court erred in awarding prejudgment interest. FACTUAL AND PROCEDURAL BACKGROUND ¶3 Stafford initiated this action against Fockaert on September 12, 2012, alleging that Fockaert defrauded her out of $100,000. Stafford and Fockaert both agree that Stafford transferred $100,000 to Fockaert with the Korea Exchange Bank in July 2010, and that in August 2010 Fockaert refused to return the money after Stafford requested that he do so. ¶4 Stafford’s complaint further sets forth the following facts. On July 4, 2010, Fockaert sent an email to Stafford detailing the various ways he could invest Stafford’s money, including primarily investing her funds in a gold account. Fockaert stated that he would provide Stafford with the necessary information to access her account and detail her investments. On July 19, 2010, Stafford completed a foreign wire transfer in the amount of $100,000 to Fockaert’s bank account with the Korea Exchange Bank, and Fockaert received notification from the Bank that the $100,000 had been transferred. In August 2010, Fockaert visited Stafford in Montana and failed to provide any account information or documentation to Stafford regarding her investment. While Fockaert was 3 in Montana in August 2010 Stafford requested Fockaert return the full $100,000. Despite continued assurances from Fockaert that he would return her money, Fockaert has failed to return any of Stafford’s $100,000. ¶5 On September 12, 2012, Stafford filed a complaint alleging claims of unjust enrichment, constructive trust, and fraud. After Stafford filed a motion for judgment on the pleadings, Fockaert moved to amend his answer. The District Court denied Fockaert’s motion and granted Stafford’s motion for judgment on the pleadings. Fockaert appealed the District Court’s decision to this Court. We reversed the District Court and permitted Fockaert to amend his pleadings. See Stafford v. Fockaert, 2014 MT 51N, 374 Mont. 542. ¶6 After remand, Fockaert filed an amended answer on August 11, 2014, and the District Court entered a scheduling order setting trial for April 6, 2015. The District Court’s order required that the parties participate in a mandatory settlement conference at least 45 days prior to trial. ¶7 On February 7, 2015, Stafford sent an email to Fockaert explaining that the District Court imposed mandatory mediation in its scheduling order and suggesting that the parties engage in the mediation with non-profit mediators in Missoula. Two days later, Fockaert responded, stating he would not comply with the court’s order requiring mediation. Fockaert stated that “once Stafford deposed me, all possible negotiation options were off the table.” ¶8 On February 23, 2015, Stafford filed a motion for sanctions, requesting the court enter a default judgment against Fockaert as a sanction for violating the District Court’s 4 scheduling order requiring mediation. The District Court conducted a hearing on Stafford’s motion on February 26, 2015. The court explained to Fockaert that it expressly required mediation in its scheduling order, and that he must attend mediation or risk a default judgment. The court explained: Mediation is required. It’s not discretionary. Mediation must occur. All parties with settlement authority—with the ultimate settlement authority, which in this case it would be the parties themselves, are required to attend in person and participate in the mediation. . . . I’ve required this mandatory mediation consistently in my 15 years on the bench. . . . I have not ever granted a waiver of the mediation. I will not do so today, and I expect parties to go to the mediation and participate in good faith, meaning that they—that they go to the mediation with the idea to see if the matter can be resolved. And so the Court’s not going to change that position. At the close of the hearing, Fockaert indicated that he understood the court’s order, and Stafford withdrew her motion for sanctions. Stafford requested that she retain the right to refile the motion, however, if Fockaert continued to interfere with the court ordered mediation process. The court granted her request. ¶9 On March 11, 2015, the District Court issued a written order, reiterating that “mediation is mandatory and both parties must participate prior to the final pretrial conference,” and that Stafford withdrew her motion on the condition that should Fockaert refuse to participate in mediation Stafford would resubmit her motion. ¶10 The next day, Stafford emailed Fockaert and asked when Fockaert would be willing to conduct the mediation conference. Initially, Fockaert deflected Stafford’s request for mediation by referencing his previous response to Stafford’s motion for 5 default judgment wherein Fockaert contended that he did not need to mediate. This caused Stafford to inquire whether Fockaert was again refusing to mediate. Fockaert then replied that he would indeed mediate and requested that Stafford “propose possible dates for my consideration.” On March 30, 2015, Stafford emailed Fockaert explaining that she had confirmed mediation for April 8, 2015, in Missoula. Fockaert responded that he had “prior engagements for April 8.” Over the next couple days, Stafford attempted to schedule a mediation date with Fockaert without success. Fockaert repeatedly refused to suggest a date he could attend and remarked to Stafford that he could not “afford to lose any more income on a frivolous case because you don’t know how to coordinate a meeting.” Finally, Stafford emailed Fockaert stating: “Since you have failed to suggest any alternatives there’s little I can do. If you care to suggest some alternatives, I’ll check with my calendar and the mediator.” Fockaert then emailed Stafford suggesting April 6, 2015. Stafford agreed and confirmed the mediation date with the non-profit Community Dispute Resolution Center in Missoula. On April 3, 2015, Stafford forwarded an email confirmation to Fockaert from the Community Dispute Resolution Center confirming the mediation date with the mediators for April 6, 2015. ¶11 On the morning of April 6, 2015, Stephan Edwards of the Community Dispute Resolution Center emailed Stafford informing her that he spoke with Fockaert over the weekend and Fockaert indicated he would not be attending the mediation and that the mediation was therefore cancelled. Edwards also explained that Fockaert had asked him to forward a letter to Stafford. The letter stated: “There are no issues to mediate. I’m fully prepared and looking forward to the trial.” By the time Stafford received Edwards’ 6 email informing her of the cancellation, she had driven to Missoula from Butte to participate in the mediation. Edwards subsequently submitted a sworn affidavit stating Fockaert had emailed him over the weekend and stated multiple times that he would not participate in meditation. ¶12 On April 7, 2015, Edwards emailed Stafford notifying her that Fockaert had, in fact, showed up at the mediation center on April 6. Edwards explained: “Fockaert showed up in Missoula yesterday morning for the mediation, though he did not intend to actually negotiate. He simply wanted to fulfill the letter of the Court order.” Edwards further notified Stafford that Fockaert gave him another copy of the earlier letter stating: “There are no issues to mediate. I’m fully prepared and looking forward to the trial.” ¶13 On April 9, 2015, Stafford renewed her motion for sanctions, requesting that the court enter a default judgment against Fockaert as a sanction for violating the District Court’s scheduling order requiring mediation. After a hearing on Stafford’s motion, the District Court granted default judgment in favor Stafford. The District Court awarded Stafford prejudgment interest on the judgment from July 19, 2010, the date Stafford transferred the funds to Fockaert. ¶14 Fockaert appeals. STANDARD OF REVIEW ¶15 We review a district court’s decision to impose sanctions for failure to comply with M. R. Civ. P. 16(f) for an abuse of discretion. Watson v. West, 2009 MT 342, ¶ 17, 353 Mont. 120, 218 P.3d 1227. We also review the severity of the sanction imposed for an abuse of discretion. Watson, ¶ 17. 7 ¶16 “The decision to grant or deny prejudgment interest is reviewed to determine whether the district court correctly interpreted the law.” Tidyman’s Mgmt. Servs. v. Davis, 2014 MT 205, ¶ 13, 376 Mont. 80, 330 P.3d 1139. DISCUSSION ¶17 1. Whether the District Court abused its discretion by entering a default judgment in favor of Stafford as a sanction for Fockaert’s failure to comply with the court’s order requiring mediation. ¶18 M. R. Civ. P. 16(f) permits a court to impose any just sanctions, including those authorized by M. R. Civ. P. 37, on a party who fails to appear at a court ordered pretrial conference or who does not participate in good faith in the conference. M. R. Civ. P. 37 further expressly provides a court with the authority to “render[] a default judgment against the disobedient party.” ¶19 In reviewing a district court’s decision regarding the imposition of sanctions, we engage in a two-step inquiry: (1) “whether there was an actual failure to comply with the judicial process,” and (2) “whether the severity of the sanction was appropriate.” Xin Xu v. McLaughlin Research Inst. for Biomedical Sci., Inc., 2005 MT 209, ¶ 21, 328 Mont. 232, 119 P.3d 100. We generally defer to the district court on both questions because the court is in the best position to determine whether the party in question has, in fact, ignored the court’s order, and the extent to which the disobedient party disregarded his opponent’s rights. Richardson v. State, 2006 MT 43, ¶ 21, 331 Mont. 231, 130 P.3d 634. ¶20 Here, Fockaert focuses on the initial inquiry: whether he actually failed to comply with the judicial process. Rather than taking issue with the severity of the sanction imposed, Fockaert argues only that the District Court lacked authority to impose the 8 sanction in the first instance. He contends that he complied with the court’s order by arriving on time for the mediation in Missoula and that he did nothing to violate the court’s order. By way of explanation, Fockaert offers that Edwards simply misunderstood his comments and that he always intended to participate in the mediation. ¶21 We are unpersuaded by Fockaert’s argument and defer to the judgment of the District Court. The District Court was in the best position to assess the merits of Fockaert’s explanation for the cancellation and to determine whether Fockaert complied in good faith with court’s order requiring that the parties mediate. Before sanctioning Fockaert, the court conducted a lengthy hearing in which both parties submitted evidence. Fockaert testified and the court listened to Fockaert’s explanation for the cancellation. Fockaert conceded that he told Edwards that he did not need to mediate and that he would not “negotiate” with Stafford, but that he nonetheless always intended to “mediate” and Edwards misunderstood his comments. The court also reviewed several exhibits submitted by Stafford. Those exhibits included: (1) the email communications between the parties in which Fockaert repeatedly refused to suggest a date for mediation, rejected a date proposed by Stafford, and blamed Stafford for the failure to coordinate the meeting; (2) Edwards’ sworn affidavit stating that Fockaert emailed him over the weekend and stated “multiple times that he would not mediate”; and (3) the letter Fockaert gave to Edwards to forward to Stafford on the day the mediation was to occur in which Fockaert wrote, “There are no issues to mediate. I’m fully prepared and looking forward to the trial.” After reviewing the evidence presented to the District Court, we conclude that sufficient evidence existed for the court to find that Fockaert failed to 9 participate in good faith in the court ordered mediation. The District Court did not abuse its discretion by imposing default judgment pursuant to M. R. Civ. P. 16(f) for Fockaert’s failure to comply with the court’s order. ¶22 2. Whether the District Court erred in awarding prejudgment interest. ¶23 The parties dispute whether Stafford is entitled to prejudgment interest, and if so, when such interest accrues. As an initial matter, both parties base their arguments on § 27-1-211, MCA, entitled “Right to interest,” and not on § 27-1-210, MCA, entitled “Interest on torts.” We have not previously discussed, at any length, the interplay between the two prejudgment interest statutes and decline to do so today. We merely highlight that there are these two separate prejudgment interest statutes and leave it to future parties to brief the relationship between the statutes as well as the applicability of § 27-1-210, MCA. ¶24 Section 27-1-211, MCA, provides: 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. We have explained that the statute has three requirements: “(1) an underlying monetary obligation, (2) an amount of recovery that is certain or capable of being made certain by calculation, and (3) a right to recover that vests on a particular day.” Amour v. Collection Prof’ls, Inc., 2015 MT 150, ¶ 24, 379 Mont. 344, 350 P.3d 71. If these elements are met an award of interest is not discretionary; instead, a trial court is required to award prejudgment interest. New Hope Lutheran Ministry v. Faith Lutheran Church of Great 10 Falls, Inc., 2014 MT 69, ¶ 70, 374 Mont. 229, 328 P.3d 586. Section 27-1-211, MCA, requires a court to award an injured party prejudgment interest “from the particular day that the right to a sum certain in damages vests.” Dew v. Dower, 258 Mont. 114, 126, 852 P.2d 549, 556 (1993). ¶25 Fockaert contends that Stafford’s damages were uncertain until the court entered default judgment and thus prejudgment interest is inappropriate. Relying on our decision in Montana Petroleum Tank Release Compensation Board v. Crumleys, Inc., 2008 MT 2, 341 Mont. 33, 174 P.3d 948, he reasons that because he disputed Stafford’s claim of fraud the damages were incapable of being made certain until after the court entered default judgment and conclusively determined liability. ¶26 We disagree. A dispute over the defendant’s liability giving rise to the damages does not suffice to make damages uncertain. Swank Enters. v. All Purpose Servs., Ltd., 2007 MT 57, ¶ 40, 336 Mont. 197, 154 P.3d 52. “The fact that a claim is disputed does not make it uncertain and therefore incapable of supporting an award of prejudgment interest.” Kraft v. High Country Motors, Inc., 2012 MT 83, ¶ 69, 364 Mont. 465, 276 P.3d 908. Rather, the statute “merely requires that the damages be certain, or capable of ascertainment by calculation.” James Talcott Constr., Inc. v. P&D Land Enters., 2006 MT 188, ¶ 41, 333 Mont. 107, 141 P.3d 1200. ¶27 Here, Stafford’s damages were readily ascertainable. There was no factual dispute regarding whether Fockaert obtained $100,000 from Stafford and then deposited those funds in his account with the Korea Exchange Bank. That Fockaert disputed Stafford’s claim of fraud does not render Stafford’s damages uncertain. The statutory requirement 11 that the amount of Stafford’s damages be certain, or capable of ascertainment by calculation, is satisfied. ¶28 Our decision in Montana Petroleum is not inconsistent with this conclusion. Contrary to Fockaert’s understanding, Montana Petroleum does not stand for the proposition that so long as ultimate liability is contested prejudgment interest is inappropriate. Rather, we merely explained in Montana Petroleum that in cases involving breach of contract, this Court has consistently refused to award prejudgment interest where “‘the amount of damages due upon breach was not clearly ascertainable until determined by the trial court.’” Montana Petroleum, ¶ 100 (quoting Northern Montana Hosp. v. Knight, 248 Mont. 310, 321, 811 P.2d 1276, 1282 (1991)). Unlike in Montana Petroleum, however, the damages in this case were clearly ascertainable prior to the court’s entry of liability. While Fockaert contested Stafford’s allegations of fraud, Fockaert agreed he received $100,000 from Stafford. Thus, though Fockaert contested the claim, he did not contest the damages arising from the claim. ¶29 We next turn to whether Stafford’s right to recover the $100,000 vested on a particular day, and if so, the particular day on which that occurred. Our analysis here is guided by the court’s issuance of default judgment in favor of Stafford on her claim of actual fraud. We have explained the effect of a default judgment is that “the facts alleged by the plaintiff in the complaint are deemed admitted.” Lane v. Farmers Union Ins., 1999 MT 252, ¶ 25, 296 Mont. 267, 989 P.2d 309 (citing 10 Moore’s Federal Practice § 55.12(1) (3d ed. 1999)) (ellipsis omitted). In her complaint, Stafford alleged that Fockaert committed actual fraud. “The elements of actual fraud ‘hinge on the knowledge 12 and intent of the defendant.’” McCulley v. U.S. Bank, 2015 MT 100, ¶ 34, 378 Mont. 462, 347 P.3d 247 (quoting Durbin v. Ross, 276 Mont. 463, 470, 916 P.2d 758, 762 (1996)). Consequently, Stafford alleged in her complaint that Fockaert knew he would not invest Stafford’s funds and intended to deceive Stafford prior to the transfer of the funds. Stafford further alleged that the elements of fraud were met on July 19, 2010, when Fockaert received the $100,000 from Stafford and thereby caused her injury. ¶30 Accepting Stafford’s allegations as true, the underlying monetary obligation due to Stafford was sum certain, in the amount of $100,000, on July 19, 2010, and Stafford had a right to recover that sum certain on that particular day. The elements of fraud were satisfied as soon as Stafford was injured by her reliance on Fockaert’s misrepresentation, which occurred when Stafford transferred $100,000 into Fockaert’s account on July 19, 2010. Since that date, Stafford has had a right to recover, and Fockaert has been obligated to return, the fraudulently obtained funds. ¶31 Furthermore, accruing the interest from July 19, 2010, is fully consistent with the purpose of prejudgment interest. Prejudgment interest is “simply an ingredient of full compensation that corrects judgments for the time value of money.” Donell v. Kowell, 533 F.3d 762, 772 (9th Cir. 2008). It reflects the victim’s loss due to her inability to use the money for a productive purpose and serves to compensate the injured party for the loss of use of her money “from the time the claim accrues until judgment is entered, thereby achieving full compensation for the injury th[e] damages are intended to redress.” West Virginia v. United States, 479 U.S. 305, 310 n.2, 107 S. Ct. 702, 706 (1987). Stafford has shown that her cause of action accrued on July 19, 2010, and she has been 13 denied the use of her money for a productive purpose from that time. Using any other date for accrual would run counter to the purpose of prejudgment interest and would not fully compensate Stafford for her loss. Therefore, we conclude that Stafford is entitled to prejudgment interest beginning on July 19, 2010, which is the particular day that her right to a sum certain in damages vested. ¶32 Affirmed. /S/ LAURIE McKINNON We Concur: /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JIM RICE

February 9, 2016

f836aed7-7e56-41c3-8261-727b24337b60

Davis v. Montana Patriot LLC

N/A

DA 15-0331

Montana

Montana Supreme Court

DA 15-0331 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 32N CARL E. AND COLLEEN R. DAVIS, Defendants and Appellants, v. MONTANA PATRIOT, LLC, Plaintiff and Appellee. APPEAL FROM: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DV 14-918C Honorable John C. Brown, Presiding Judge COUNSEL OF RECORD: For Appellants: Carl E. Davis, Colleen R. Davis, self-represented; Manhattan, Montana For Appellee: Paul Grigsby, Paul Grigsby, PLLC; Bozeman, Montana Submitted on Briefs: January 20, 2016 Decided: February 9, 2016 Filed: __________________________________________ Clerk February 9 2016 Case Number: DA 15-0331 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 Carl and Colleen Davis (hereinafter “the Davises”), pro se, appeal from an order denying their Motion to Dismiss and awarding attorney’s fees entered against them by the Eighteenth Judicial District Court, Gallatin County. Although the final order entered by the District Court, from which the Davises appeal, deals only with their last several filings, the Davises’ arguments broadly challenge the foreclosure of the property, trustee’s sale, and unlawful detainer proceedings, asserting that the District Court erred in multiple ways. We affirm as to all issues. ¶3 The Davises executed a Deed of Trust, conveying the property as security for a loan to Countrywide Home Loans, Inc., in February 2006. This Deed of Trust was recorded. In March 2009, the Davises stopped making payments on their home loan, and the record indicates that they have not made a payment since. However, the Davises continued living on the premises, and did so for six years until evicted in early 2015. A trustee’s sale was held, and U.S. Bank National Association took title to the property in May of 2014, after placing the highest bid at the trustee’s sale. In turn, Montana Patriot, 3 LLC, (hereinafter MTPLLC), bought the property from U.S. Bank National Association, receiving a special warranty deed in September of 2014. ¶4 After the purchase, a member of MTPLLC entered the property, which the Davises still occupied, and informed the Davises that MTPLLC owned the property. After attempts to negotiate a voluntary surrender of the property by the Davises failed, MTPLLC filed an unlawful detainer action in the Gallatin County Justice Court. The Davises moved to dismiss, claiming that they had rescinded their mortgage contract (Deed of Trust) in 2009, and then sold the property to the Carl E. Davis Trust, which sold the property to the Colleen R. Davis Trust (CRD Trust). The Justice Court transferred the case to the Eighteenth Judicial District Court, which held a hearing on January 30, 2015. The District Court issued an order on February 9, 2015, concluding that MTPLLC “is entitled to immediate possession of the Premises,” and further ordering the Davises to remove themselves from the property. The same day, the District Court issued an Order to Vacate the Premises and Writs of Assistance. On February 12, 2015, the Davises moved to vacate the Order to Vacate, and on February 13, 2015, the District Court stayed the eviction and Writs of Assistance, pending the Davises’ motion. After consideration, the District Court lifted the stay and again issued Writs of Assistance. On April 9, 2015, the Davises filed a Notice of Judicial Issue, claiming that their Motion to Dismiss had not been addressed, and asking for fees and costs. On April 28, 2015, the District Court issued an order specifically denying the Motion to Dismiss, reaffirming its previous conclusion that MTPLLC was “vested with title to the Premises,” and awarding fees to 4 MTPLLC. The Davises claimed then, and continue to do so, that the property currently belongs to the CRD Trust, that the trustee’s sale and subsequent sale to MTPLLC were based upon fraud, and that the unlawful detainer proceeding and subsequent orders are void. ¶5 Black’s Law Dictionary defines a deed of trust as a “deed conveying title to real property to a trustee as security until the grantor repays a loan. This type of deed resembles a mortgage.” Black’s Law Dictionary 502 (Bryan A. Garner ed., 10th ed. 2014). The Small Tract Financing Act of Montana (hereinafter “the Act”), codified at §§ 71-1-301, et seq., MCA, provides for this transfer of interest in real property. “A transfer in trust of an interest in real property . . . may be made to secure the performance of an obligation of a grantor . . . .” Section 71-1-304(1), MCA. “When a transfer in trust of an interest in real property is made to secure the performance of the obligation referred to in subsection (1), a power of sale is conferred upon the trustee to be exercised after a breach of the obligation for which the transfer is security.” Section 71-1-304(2), MCA. ¶6 Here, title was granted to the trustee, a third party (Fidelity National Title Insurance Company), when the Davises executed the Deed of Trust in 2006. This third party was to hold the property in trust until the Davises either paid off the loan or breached their obligation, i.e., defaulted on their loan. See § 71-1-304(1), MCA. Upon default, the trustee had the power to sell the property, which it did in May 2014. See § 71-1-304(2), MCA. While the Davises claim they “sold the property” to the CRD Trust before the trustee sale, they could not have properly done so, as the trustee, and not the 5 Davises, held title to the property. The quitclaim deed and bills of sale that the Davises provided to the District Court do not overcome the fact that a third party actually held title to the property at the time of the alleged sales. The Act mandates that the trustee “shall reconvey the interest in real property described in the trust indenture to the grantor” in the event that the obligation is performed. Section 71-1-307(1), MCA. The Davises do not claim, nor does the record contain any support, that they performed the obligation or that the trustee ever reconveyed title to the property back to them, even if their Deed of Trust was “extinguished” as they claim. The District Court did not err in rejecting Davises’ claims, ordering the Davises to vacate the property, denying their Motion to Dismiss the unlawful detainer action, and awarding attorney’s fees to MTPLLC. ¶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. ¶8 Affirmed. /S/ JIM RICE We concur: /S/ PATRICIA COTTER /S/ BETH BAKER /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA

February 9, 2016

ab4b0ee8-4bd0-4d35-adda-9d6eaaf6606e

Lindeen v. Converse

2016 MT 19N

DA 15-0342

Montana

Montana Supreme Court

DA 15-0342 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 19N MONICA J. LINDEEN, STATE AUDITOR and EX-OFFICIO, MONTANA SECURITIES COMMISSIONER, Petitioner and Appellee, v. RICHARD CONVERSE d/b/a DC TAX SERVICE, INC., Respondents and Appellants. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. ADV 2015-117 Honorable Mike Menahan, Presiding Judge COUNSEL OF RECORD: For Appellants: Richard Converse, self-represented; Great Falls, Montana For Appellee: Brett W. O’Neil, Jennifer Lee Hudson, Office of the Commissioner of Securities and Insurance, Montana State Auditor; Helena, Montana Submitted on Briefs: December 9, 2015 Decided: January 19, 2016 Filed: __________________________________________ Clerk January 19 2016 Case Number: DA 15-0342 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 Richard Converse appeals from the District Court’s order enjoining him from transacting securities business in Montana with respect to several foreign currencies. Converse had engaged in numerous securities transactions regarding the Iraqi Dinar, which he sold as investments with an unusually high rate of return. Instead of investors actually taking possession of the currency, Converse informed investors they would need to utilize Victorious Financial Bank to purchase and sell their investments. A Commissioner of Securities and Insurance (CSI) investigation subsequently revealed that Victorious Financial Bank was fictitious. The District Court permanently enjoined Converse from transacting securities business in Montana, concluding Converse had defrauded or deceived investors by telling investors they would need to utilize the fictitious Victorious Financial Bank to cash in their dinars, when he promised unusually high rates of return on dinar investments, and when he promised unusually high rates of return on promissory notes. ¶3 Converse makes five arguments on appeal. First, Converse argues the Commissioner lacked standing because the Commissioner did not post a bond or provide 3 a copy of the Commissioner’s oaths and qualifications. Section 30-10-305(1)(b), MCA, provides that the Commissioner may “bring an action in any court of competent jurisdiction to enjoin any acts or practices and to enforce compliance with [the Securities Act]” and “may not be required to post a bond.” We are unaware of any authority that requires the Commissioner to provide the District Court with a copy of the Commissioner’s oaths and qualifications before filing an injunction, and Converse has cited to none. The absence of a bond and the Commissioner’s oaths therefore did not deprive the Commissioner of standing. ¶4 Converse next argues the District Court lacked jurisdiction to issue the injunction. District courts have original jurisdiction over “all civil matters and cases at law and in equity.” Mont. Const. art. VII, § 4(1). The District Court therefore had subject matter jurisdiction. ¶5 Converse then argues the District Court erred in allowing witnesses to testify against him. The nature of the error is unclear as is the specific witness to whom Converse refers. Only two witnesses testified against Converse: Joyce Bowman and Deputy Securities Commissioner Lynne Egan. Given Converse’s citation to Bonamarte v. Bonamarte, 263 Mont. 170, 866 P.2d 1132 (1994), it appears Converse objects to Bowman testifying via Vision Net. In Bonamarte, this Court held telephonic testimony improperly deprived the respondent from a meaningful opportunity to confront and cross- examine the witness. Bonamarte, 263 Mont. at 174, 866 P.2d at 1134. However, in City of Missoula v. Duane, 2015 MT 232, 380 Mont. 290, 355 P.3d 729, we distinguished 4 Bonamarte, holding video technology alleviated the concerns present in Bonamarte because video technology allowed the fact finder “to observe and hear the testimony of the witness firsthand.” City of Missoula, ¶¶ 19-20. The District Court therefore did not err in allowing Bowman to testify via Vision Net. ¶6 Converse’s fourth argument is that the District Court denied his right to appeal. This is apparently related to Converse’s objection to the video testimony, wherein Converse requested the District Court halt the hearing and issue a written denial of the objection. The District Court explained Converse’s objection was preserved regardless of whether the denial was oral or written. It is clear Converse’s right to appeal was not denied by the District Court’s refusal to issue a written order, given that we accepted review of the video testimony issue above. ¶7 Converse’s final argument is that the District Court erred when it allowed Deputy Securities Commissioner Lynne Egan to testify. Although Converse appeared to make a general objection to Egan’s testimony, it was clarified that Converse was actually renewing a motion to continue the hearing and not objecting to the testimony on any evidentiary grounds. We therefore decline to review Converse’s evidentiary argument because it is being raised for the first time on appeal. Schuff v. A.T. Klemens & Son, 2000 MT 357, ¶ 53, 303 Mont. 274, 16 P.3d 1002. ¶8 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 5 presents no constitutional issues, no issues of first impression, and does not establish new precedent or modify existing precedent. ¶9 Affirmed. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA /S/ BETH BAKER

January 19, 2016

ea685679-a006-4944-8a92-1d6de549abe3

Kohler v. Keller

2016 MT 11N

DA 12-0600

Montana

Montana Supreme Court

DA 12-0600 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 11N RONALD L. KOHLER and BARBARA J. KOHLER, husband and wife; THOMAS F. JONES and RITA A. JONES, husband and wife; DENNIS A. ARNOLD and GERALDINE N. ARNOLD, husband and wife; and DEBRA L. SYKES, Plaintiffs and Appellees, v. KELLER TRANSPORT, INC.; WAGNER ENTERPRISES, LLC; AND DOES 1-10, Defendants. WESTCHESTER SURPLUS LINES INSURANCE COMPANY, Appellants. APPEAL FROM: District Court of the Twentieth Judicial District, In and For the County of Lake, Cause No. DV 09-1 Honorable Jeffrey H. Langton, Presiding Judge COUNSEL OF RECORD: For Appellants: Jonathan D. Hacker (argued), O’Melveny & Myers LLP; Washington, District of Columbia Allan H. Baris, Moore, O’Connell & Refling, P.C.; Bozeman, Montana Robert J. Slavik, Cozen O’Connor; Seattle, Washington For Appellee Debra L Sykes: Trent N. Baker, Datsopoulos, MacDonald, & Lind, PC; Missoula, Montana January 12 2016 Case Number: DA 12-0600 2 For Appellees Tom and Rita Jones, Ronald and Barbara Kohler, and Dennis and Geraldine Arnold: Roger M. Sullivan (argued), McGarvey, Heberling, Sullivan & McGarvey, PC; Kalispell, Montana Timothy M. Bechtold, Beachtold Law Firm PLLC; Missoula, Montana Alan J. Lerner, Lerner Law Firm; Kalispell, Montana For Amici Montana Trial Lawyers Association: John L. Amsden, Beck & Amsden, PLLC; Bozeman, Montana Argued: September 11, 2015 Submitted: September 16, 2015 Decided: January 12, 2016 Filed: __________________________________________ Clerk 3 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 Westchester Surplus Lines Insurance Company (Westchester) appeals from an order by the Twentieth Judicial District Court, Lake County, which denied Westchester’s motion to intervene to contest the reasonableness of a stipulated judgment entered between its insureds, Defendants Keller Transport, Inc. (Keller) and Wagner Enterprises, LLC (Wagner), and the Plaintiffs (Homeowners). We affirm. ¶3 The factual and procedural background of this matter is fully set forth in our opinion in Westchester Surplus Lines Insurance Company v. Keller Transport, Inc., 2015 MT 6, ___ Mont.___, ___ P.3d ___.1 Briefly, in April 2008, Keller leased a tanker truck from Wagner to transport gasoline to Kalispell, Montana. On Highway 35, adjacent to Flathead Lake, the truck’s trailer traveled off the road, overturned, and spilled 6,380 gallons of gasoline. The gasoline flowed underneath the highway and beneath Homeowners’ properties. Homeowners initiated a tort action against Keller and Wagner in Lake County. 1 These two cases were consolidated for purposes of oral argument only. See Order, July 22, 2015. 4 ¶4 Keller and Wagner were insured by Carolina Casualty Insurance Company (CCIC) under the same Commercial Transportation Policy. Keller and Wagner also had an excess insurance policy issued by Westchester. In late 2008, CCIC exhausted what it believed to be the limits of its policy and referred the defense of the matter to Westchester. Westchester undertook the defense until it exhausted what it believed to be the limits of its excess policy, at which point it referred the case back to CCIC. CCIC agreed to resume the defense. There was a brief delay before defense payments were re-initiated by CCIC. Months later, CCIC filed a declaratory action in Missoula County seeking a determination of the duties of CCIC and Westchester to Keller and Wagner. Homeowners then made claims that asserted there was additional coverage under both of the policies. CCIC and Westchester pled this coverage question in the declaratory action. Later, months after payments for defense of Keller and Wagner in this action were re-initiated, Homeowners entered stipulated judgments with Keller and Wagner in the amount of $13,066,474, in which Homeowners agreed to “limit collection by any legal means only upon and against” Keller’s and Wagner’s insurers. ¶5 CCIC and Westchester then moved to intervene in this action, arguing they had a right to a reasonableness determination of any damage award. The District Court issued an order stating it would not rule on the insurers’ motion to intervene until the coverage issue had been determined in the Missoula County declaratory judgment action. The District Court in the declaratory judgment action held that both policies provided additional coverage, and that Westchester had breached its duty to defend. The District 5 Court in this action then dismissed CCIC’s and Westchester’s motion to intervene, holding they were liable for the entire confessed judgment. Westchester timely appealed that order. CCIC has since settled all of its claims with Homeowners. ¶6 An issue is moot if the issue presented at the outset of the action has ceased to exist. Progressive Direct Ins. Co. v. Stuivenga, 2012 MT 75, ¶ 17, 364 Mont. 390, 276 P.3d 867. “Mootness is a threshold issue which we must resolve before we may address the substantive merits of a dispute.” Stuivenga, ¶ 17 (citation omitted). ¶7 Whether the District Court abused its discretion in denying Westchester’s motion to intervene has been mooted by our decision in Westchester. There, we held that Westchester did not breach the duty to defend and was not liable for the stipulated judgment. Westchester, ¶ 33. Therefore, Westchester no longer has an interest in intervening in this action to determine the reasonableness of a judgment for damages to which it is not bound. ¶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. This appeal presents no constitutional issues, no issues of first impression, and does not establish new precedent or modify existing precedent. ¶9 Affirmed. /S/ JIM RICE 6 We concur: /S/ MIKE McGRATH /S/ JAMES JEREMIAH SHEA /S/ PATRICIA COTTER /S/ LAURIE McKINNON /S/ MICHAEL E WHEAT /S/ BETH BAKER

January 12, 2016

61a2a8dd-7e5c-4e37-8107-8ca9afc1c7b3

In re K.A.

2016 MT 27

DA 15-0160

Montana

Montana Supreme Court

DA 15-0160 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 27 IN THE MATTER OF: K.A., A.A., & A. A., Youths in Need of Care. APPEAL FROM: District Court of the Ninth Judicial District, In and For the County of Glacier, Cause Nos. DN 13-01, DN 13-02, DN 13-03 Honorable Robert G. Olson, Presiding Judge COUNSEL OF RECORD: For Appellant: Nancy G. Schwartz, N.G. Schwartz Law, PLLC; Billings, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Katie F. Schulz, Assistant Attorney General; Helena, Montana Emily Von Jentzen, Assistant Attorney General, Child Protection Unit; Kalispell, Montana Submitted on Briefs: November 18, 2015 Decided: February 2, 2016 Filed: __________________________________________ Clerk February 2 2016 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 The Ninth Judicial District Court, Glacier County, entered an order terminating the parental rights of the birth father (Father) to his three minor children, K.A., A.A., and A.A. Father appeals the District Court’s decision. We affirm, and address the following restated issue on appeal: ¶2 Did the District Court err in terminating Father’s parental rights? PROCEDURAL AND FACTUAL BACKGROUND ¶3 The subject family consists of Father, the birth mother (Mother), and three minor children, ages seven, two and one, respectively, at the time of removal. Concerns were initially raised regarding this family in early 2013, when the Department of Public Health and Human Services (DPHHS or Department) received anonymous reports about the parents using methamphetamines “as often as they can get their hands on it,” and reports of physical violence in front of the children. Stephanie Moran (Moran), a social worker, met with the oldest child, K.A., at school on March 7, 2013. K.A. appeared to be clean and adequately dressed, and spoke highly of his parents, but mentioned that the family had moved a lot and that his father had lost his job. Moran reviewed K.A.’s school attendance record, and found that he had a significant number of absences and tardies. K.A. explained to Moran that his mother was not waking up in time to get K.A. off to school. ¶4 Moran again met with K.A. at school on March 26, 2013, and K.A. told the case worker that he had not eaten breakfast that day because there was very little food in the 3 home, and he wasn’t sure he was going to eat dinner that night. K.A. also described physical violence between his parents, but denied that Father was physically violent towards him. During this interview, Moran noted with some concern that K.A.’s clothes were dirty and that his shoes had no soles on them and appeared to be falling apart. ¶5 On the same day, Moran made contact with Mother. The family was living in a motel room at this point and Moran observed only a jar of peanut butter and a can of chili on top of the refrigerator, and only bottled water in the refrigerator. Mother told the case worker that the family was out of money and out of public assistance funds until after the first of the month. Later that day, Moran returned to the motel room to meet with both Mother and Father, and questioned both parents about reports of their drug use. Both parents admitted to using methamphetamine within the past two months, and Father admitted to current use of cannabis and alcohol. When Moran asked, both parents agreed to submit to a urinalysis (UA) test that afternoon. When neither parent showed up for the scheduled UA, Moran returned to the motel. ¶6 No one answered the door when Moran knocked, although she knew the family was at home because she had seen K.A. arrive there from school, and she could hear the television and a baby crying from within the room. Fearing for the children’s well-being, and due to the lack of cooperation by the parents, Moran contacted law enforcement, who eventually forced open the door to the motel room. Once inside, Moran informed the parents that she was removing the children. Moran testified that Father became very upset, “bouncing all over” the motel room, yelling and screaming with his hands raised. 4 Moran believed that Father’s behaviors were consistent with being under the influence of methamphetamine. All three children sat on the bed next to their mother, crying. Backup law enforcement officers were called to the scene; at one point the officers pulled out their Tasers to prevent a physical altercation with Father when he stood on the bed. Moran and law enforcement removed the children from the premises. ¶7 The next day, Father had been arrested on a charge of disorderly conduct arising out of an incident separate from removal of the children, and was unavailable for a UA. Mother submitted to a UA that day and tested positive for cannabis, methamphetamine, and Ecstasy. On April 2, 2013, DPHHS filed a petition seeking emergency protective authority, adjudication of the children as youth in need of care, and temporary legal custody. Attached to the petition was Moran’s affidavit, which averred that Father and Mother did not have the resources to meet the basic needs of their children, that both parents were violent and aggressive, and that both parents were currently unable or unwilling to perform parental duties and responsibilities. The District Court promptly granted emergency protective custody, and an adjudicatory hearing was held on April 17. ¶8 At the hearing, Moran provided testimony concerning the above facts to the District Court. She added that Mother had failed to appear for UAs on two separate occasions since the children were removed, but that Mother and Father had provided a UA on April 6, 2013, and both tests were negative for illegal substances. Father testified that he and Mother had never used drugs in front of the children, that he had never physically abused Mother or the children, and that at the time the children were removed, 5 there had been food in the freezer in the motel room. However, the District Court found that both parents had failed to take drug tests when requested, failed to provide for the basic needs of the children, abused the children by using illegal drugs, specifically methamphetamine, neglected to have K.A. attend school regularly, and that returning the children to the home would place them in unreasonable risk of harm. The court adjudicated all children as youths in need of care, granted temporary legal custody to DPHHS, and ordered that treatment plans be developed. ¶9 On June 4, 2013, the District Court signed treatment plans for both Mother and Father, each of which stated a primary goal of reunifying the children with their parents. At the time the plans were signed, Mother had engaged in initial services, but Father had not. The plan required Father to obtain a chemical dependency evaluation and follow all recommendations of that evaluation, and listed as a specific goal to maintain sobriety for “a period of six months.” In addition, the Treatment Plan required Father to obtain individual counseling to address mental health issues, to complete parenting and anger management classes, and to stay in regular contact with Moran. ¶10 In early August 2013, DPHHS placed the children with Mother, who was then living with her parents, for a trial home visit. Since that date, the children have remained with Mother. In October 2013, DPHHS filed a petition to extend temporary legal custody of the children for another six months in order to allow the parents more time to complete their treatment plans. At that point, Father had completed in-patient treatment at Montana Chemical Dependency Center, but had not yet begun out-patient treatment, 6 mental health counseling, or parenting and anger management classes. Upon a stipulation of all the parties, the District Court granted an order extending temporary legal custody for another six months. ¶11 In April 2014, DPHHS again requested an extension of temporary legal custody, given developments in the case, and a hearing was held in May 2014. Moran testified that, although Father had completed his chemical dependency evaluation, was participating in classes again (after having stopped for a period of time), and had completed anger management and parenting classes, he had returned to using alcohol. He was arrested for fighting at a bar and creating a disturbance in April 2014, and had brought “turmoil within the home.” Father “went back to the home knowing that he had just been arrested,” causing the District Court to express concerns about his drug and alcohol use and for the family’s safety. Because Father and Mother were living together at this point with the children, Moran expressed concern about turmoil in the home and Mother’s ability to display her protective capacity, concluding that DPHHS wanted additional time to monitor the family situation. Moran reported that Mother had made progress in her Treatment Plan, but that DPHHS still had some lingering concerns, specifically, that while Mother displayed that she was able to recognize threats to her and her children, a question remained about whether Mother was able to actually assert her protective role. The District Court granted DPHHS’ petition, noting the family had made progress, but that DPHHS still had reason to be involved, especially in light of Father’s recent setbacks in treatment. The results of Father’s recent UA had not yet been returned, 7 and Moran testified that if the UA was positive, the Department believed Father should live separately from the family. The District Court stated that Father had made a serious mistake in continuing to consume alcohol but that, before the Department could remove the children or either parent from the home, the court would conduct an emergency hearing. ¶12 DPHHS received the results of Father’s drug test on June 19, 2014, which indicated that he had been using alcohol, methamphetamine, and amphetamines. Days later, DPHHS filed an expedited motion requesting that the District Court order Father to move from the family residence. The District Court held a hearing on July 2 and Father testified that he had been taking cold medication at the time of the drug test, and had not used methamphetamine, to which the District Court responded: I don’t believe you. Point blank. I don’t believe that you didn’t use methamphetamines, I think you got up here and lied. I am just gonna say it point blank. I think that’s what you did. The Court would have had a much easier time with being less restrictive if you had owned your actions, took responsibility and tried to do something to prevent it from happening again and that’s not what I heard. Despite testimony that Father had already moved out of the house, the District Court ordered that Father live separately from the family until further order of the court, and that the visits between him and the children be supervised. The District Court also ordered that Mother begin work on a supplemental treatment plan, focusing on obtaining financial independence from Father, before the next hearing. 8 ¶13 A week later, on July 9, 2014, Father showed up at the family residence intoxicated. When Mother asked him to leave, he refused. Mother called police to remove Father from the premises, reporting that, while Father was not physically violent, she wanted him removed. Mother did not advise police that Father was there in violation of a court order. Father left the premises before police were able to make contact with him. ¶14 Mother filed an objection to the supplemental treatment plan and a motion to dismiss the proceeding on August 18, 2014. At a hearing in September 2014, the drug testing agency testified that it was having problems obtaining drug tests because Father was evading the testing. Testimony was also taken that Father had been unsuccessfully discharged from his out-patient chemical dependency treatment program, had failed to stay in contact with DPHHS, had failed to notify DPHHS of his address changes, and had stopped participating in his treatment plan at all. The District Court continued the restriction on Father living in the family residence, and also took Mother’s motion to dismiss under advisement. ¶15 DPHHS filed its own motion to dismiss in November 2014. DPHHS’ motion sought to dismiss the case as to both Mother and Father, but to place continuing restrictions on Father, specifically, prohibiting Father from unsupervised contact with his children until he had completed UA testing, mental health treatment, and chemical dependency treatment. DPHHS’ motion stated that only Mother had met the “minimum standards for appropriate parenting at this time.” 9 ¶16 Mother and Father responded by filing objections to any continuing restrictions upon Father and a joint motion to dismiss the proceeding as against both of them, relying on Mother’s progress under her treatment plan. Mother and Father argued that “mother has demonstrated she can adequately protect the children,” “the children are safe,” and “it is therefore illogical to argue that additional restrictions are needed to protect the children.” In its reply, DPHHS requested that, alternatively, if the District Court did not grant its motion to dismiss against Mother and impose restrictions upon Father, that the District Court grant DPHHS leave to pursue termination of Father’s parental rights. Stating that it lacked authority to impose continuing restrictions upon the parties after dismissal, the District Court granted leave for DPHHS to petition the court for termination of Father’s parental rights, which it did. ¶17 The District Court conducted a hearing on the petition for termination of Father’s parental rights in January 2015. Father was represented by counsel but did not attend the hearing. Moran testified to the Department’s concerns with Father, including his unaddressed chemical dependency, including his positive testing for alcohol and methamphetamines, his lack of compliance with his court-ordered treatment plan, his complete disengagement from services, and his lack of any contact with the Department since September of 2014. ¶18 In terminating Father’s parental rights, the District Court found that Father had completed several treatment plan tasks, but that “the treatment plan has not been successful in addressing birth father’s issues with chemical dependency and mental 10 health which led to the children’s removal in this matter.” Also noting that Father “stopped participating in Department services over seven months ago and failed to attend the hearing despite having notice,” the District Court reasoned that Father’s condition was “unlikely to change within a reasonable time” based on his unresolved chemical dependency and mental health issues, and that continuation of the parental relationship would likely result in continued abuse or neglect of the children, concluding that Father’s behavior “convinces the Court that continuation of the parent-child legal relationship is not in the children’s best interests.” The District Court granted DPHHS’ motion to dismiss with respect to Mother. Father appeals. STANDARD OF REVIEW ¶19 This Court reviews a district court’s decision to terminate parental rights for an abuse of discretion. In re E.Z.C., 2013 MT 123, ¶ 19, 370 Mont. 116, 300 P.3d 1174 (citing In re T.W.F., 2009 MT 207, ¶ 17, 351 Mont. 233, 210 P.3d 174). A district court abuses its discretion when it acts arbitrarily, without employment of conscientious judgment, or in excess of the bounds of reason, resulting in substantial injustice. This Court will not disturb a district court’s decision on appeal unless “there is a mistake of law or a finding of fact not supported by substantial evidence that would amount to a clear abuse of discretion.” We review a district court’s findings of fact to determine whether they are clearly erroneous and its conclusions of law to determine whether they are correct. In re T.S., 2013 MT 274, ¶ 21, 372 Mont. 79, 310 P.3d 538 (quoting In re D.B., 2012 MT 231, ¶ 17, 366 Mont. 392, 288 P.3d 160) (internal citations omitted). 11 ¶20 The question of whether a district court properly denied a motion to dismiss is a conclusion of law, which this Court will review de novo to determine if the court’s interpretation and application of the law are correct. In re L.V.-B., 2014 MT 13, ¶ 12, 373 Mont. 344, 317 P.3d 191 (“We review de novo a district court’s decision on a motion to dismiss.”). DISCUSSION ¶21 Did the District Court err in terminating Father’s parental rights? ¶22 Father argues that the District Court’s decision to terminate his parental rights was in error, citing his bond with the children, his ability to support the family, and the absence of evidence that he put his children at risk. He argues the termination of his parental rights was not in the best interest of his children, and that the District Court erred by not dismissing the case. ¶23 Pursuant to § 41-3-609(1)(f), MCA, termination of the parent-child legal relationship may be ordered upon a finding that the child is an adjudicated youth in need of care, and 1) an appropriate treatment plan that has been approved by the court has not been complied with by the parent, or has not been successful; and 2) the conduct or condition of the parent rendering the parent unfit is unlikely to change within a reasonable time. ¶24 Under this statute, Father first contests the adjudication of the children as youths in need of care (YINC). Section 41-3-102(34), MCA, defines a YINC as “a youth who has been adjudicated or determined, after a hearing, to be or have been abused, neglected, or 12 abandoned.” Section 41-3-102(7)(a), MCA, further provides that “child abuse or neglect” is defined as “(i) actual physical or psychological harm to a child; (ii) substantial risk of physical or psychological harm to a child; or (iii) abandonment.” We review a district court’s conclusion of law for correctness. See In re T.S., ¶ 21. The District Court found after the adjudication hearing that Mother had tested positively for methamphetamine, cannabis, and Ecstasy, both parents had failed to provide UAs upon request, both parents had admitted to using illegal drugs, the parents were failing to meet their children’s basic needs, and that the parents were not ensuring that K.A. attended school on a regular basis. These findings were supported by substantial evidence and the children were properly adjudicated as YINC, as the District Court correctly noted several conditions that would have placed the children in substantial risk of physical or psychological harm. ¶25 Regarding compliance with and successful completion of a treatment plan under § 41-3-609(1)(f)(i), MCA, Moran testified at the termination hearing that, although Father completed in-patient chemical dependency treatment, he had been dismissed from out-patient chemical dependency treatment for lack of participation, thereafter tested positive for methamphetamines and alcohol, failed to maintain sobriety, and failed to complete his mental health tasks. There was substantial evidence to support the District Court’s factual finding and conclusion of law that “the majority of his plan was not complied with” and “has not been successful.” Indeed, Father concedes in his briefing that he did not complete his court-ordered plan. 13 ¶26 Regarding whether Father’s conduct or condition rendering him unfit is unlikely to change within a reasonable time, § 41-3-609(1)(f)(ii), MCA, Moran testified that, “[a]t this time the Department’s been involved with these children for over 15 months. We have not seen behavioral changes from [Father]. So it’s in the children’s best interest for permanency.” The Court Appointed Special Advocate (CASA) submitted a report to the District Court, stating, “I regret that this action has to be taken with [Father]. I feel that the court has been given no choice but to terminate his rights. . . . [Father] is the one losing out by not complying to[] the rules and not completing his requirements.” The record demonstrates that Father was engaging in the same kind of behaviors over a year after the treatment plan was implemented as he was when the children were originally removed from his care. At times he was blatantly resistant to the Department and with his treatment goals and, as the District Court found, deceptive about his behavior. As we have stated on multiple occasions, “[W]e do not have a crystal ball to look into to make this determination, so it must, to some extent, be based on a person’s past conduct.” In re M.A.E., 1999 MT 341, ¶ 37, 297 Mont. 434, 991 P.2d 972 (citing In re C.A.R., 214 Mont. 174, 187, 693 P.2d 1214, 1221 (1984)). The record of Father’s behavior provides abundant support for the District Court’s conclusion that “[t]he conduct or condition of birth father is unlikely to change within a reasonable time based on his unresolved mental health and chemical dependency issues.” The District Court’s conclusion that continuation of the parent child legal relationship will likely result in continued abuse or neglect was supported by the evidence of Father’s conduct over the 15 months of the 14 proceeding. Perhaps testimony crucial to establishing Father’s potential to change his conduct within a reasonable time would have come from Father himself; however, he did not participate in the termination hearing. In terminating Father’s parental rights, the District Court clearly did not abuse its discretion. “A child’s need for a permanent placement in a stable, loving home supercedes [sic] the right to parent a child.” In re Custody & Parental Rights of D.A., 2008 MT 247, ¶ 21, 344 Mont. 513, 189 P.3d 631. ¶27 Finally, Father contends that the District Court should have dismissed this case when “requested to do so by the parents and by DPHHS.” He argues that both Mother’s motion to dismiss, and the parents’ joint motion, met the statutory criteria for dismissal, as evidenced by DPHHS’ own motion to dismiss. Section 41-3-424, MCA, provides, in pertinent part, that the court shall dismiss an abuse and neglect petition if all the following criteria are met: (1) a child who has been placed in foster care is reunited with the child’s parents and returned home; (2) the child remains in the home for a minimum of 6 months with no additional confirmed reports of child abuse or neglect; and (3) the department determines and informs the court that the issues that led to department intervention have been resolved and that no reason exists for further department intervention or monitoring. Section 41-3-424, MCA. In its motion to dismiss, DPHHS expressed its continuing concerns regarding Father’s issues that led to its original intervention with this family, asking either for restrictions to be placed on Father’s visitation, or alternatively, that DPHHS be granted leave to petition to terminate Father’s parental rights. The District Court recognized these continuing concerns, and correctly denied the motions to dismiss 15 for not satisfying the statutory criteria. The District Court ultimately granted DPHHS’ motion as to Mother, but only in conjunction with terminating Father’s parental rights, as that action resolved the need for further intervention with Father or for placement of restrictions upon his interaction with the family. ¶28 Affirmed. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT Justice Laurie McKinnon, dissenting. ¶29 I disagree with the Court’s conclusions that the conduct or condition rendering Father unfit was unlikely to change within a reasonable time and that; therefore, continuation of the parent-child legal relationship will likely result in his children’s continued abuse or neglect. Factors the trial court must consider in determining whether the conduct or condition rendering a parent unfit is “unlikely to change within a reasonable time” are found in § 41-3-609(2), MCA. They are: 16 (a) emotional illness, mental illness, or mental deficiency of the parent of a duration or nature as to render the parent unlikely to care for the ongoing physical, mental, and emotional needs of the child within a reasonable time; (b) a history of violent behavior by the parent; (c) excessive use of intoxicating liquor or of a narcotic or dangerous drug that affects the parent’s ability to care and provide for the child; and (d) present judicially ordered long-term confinement of the parent. Overall, “the court shall give primary consideration to the physical, mental, and emotional conditions and needs of the child.” Section 41-3-609(3), MCA. ¶30 The relevant factors the District Court must have considered in this case concern whether Father had a history of violent behavior, subsection (b), and whether Father’s excessive use of alcohol or drugs affected his ability to care and provide for his children, subsection (c). Related to subsection (b), there were allegations of physical abuse, but no evidence of any specific instance of physical abuse concerning Father and Mother or the children. The first tip DPHHS received concerning the family alleged physical violence in front of the children; however, there was no evidence supporting that allegation. Both Mother and Father denied any physical abuse occurred between them or against the children. K.A. told Moran that Father had never hit him. Father was arrested twice for disorderly conduct and for being involved in a disturbance at a bar; however, those two events did not involve anyone in Father’s family or occur within their presence. The record does not establish that Father has a history of violent behavior which will result in continued abuse or neglect of his children. ¶31 Regarding subsection (c), there is evidence Father used drugs and alcohol; however, no evidence that the drug or alcohol use caused any specific danger to the 17 children or was done in the children’s presence. Review of the record indicates Father tested negative for all substances on April 6, 2013. Father failed to attend several UAs. Father completed in-patient treatment at Montana Chemical Dependency Center on October 15, 2013, and afterwards participated in, but did not complete, out-patient treatment. After removal, Father tested positive, on one occasion, for methamphetamine in a hair sample taken on June 13, 2014 and reported to DPHHS on June 19, 2014. Father was intoxicated when Mother called the police to remove him from her and the children’s home on July 9, 2014. Although there was one positive methamphetamine test and one instance of Father being intoxicated at the children’s home, these instances are insufficient to clearly and convincingly establish that Father’s use was “excessive” or affected his “ability to care and provide” for his children. ¶32 Furthermore, in this case, there was evidence that continuation of the parent-child relationship was not likely to result in continued abuse or neglect because testimony indicated Mother had, over the course of the 18-month proceeding, developed an ability to protect her children. Mother complied with DPHHS recommendations in her Treatment Plan and learned to protect her children. Review of the record shows she demonstrated an ability to protect the children when she removed them from the home when she and Father argued or when Father was intoxicated. She asked Father to move out of the family home after his methamphetamine-positive hair test. She further demonstrated her ability and commitment to protect her children by calling the police 18 when Father came to where she and the children were living, when he was not supposed to be there at all, and refused to leave. ¶33 Children have been in Mother’s care since August 2013 without incident. Father is likely living with Mother and the children, in violation of the District Court’s order, as he was served with notice of the termination hearing at the Mother and the children’s home. Although we have recognized that a child’s placement with one parent has no bearing on the parental rights of the other parent, In re L.V-B, ¶ 19, placement with a parent who has demonstrated an ability to protect may be relevant to whether the child will likely be subjected to continued abuse or neglect by the other parent. Had Mother been unable to demonstrate an ability to protect the children absent termination of Father’s rights, then termination may have been appropriate to preserve at least one parent’s relationship with the children. Here, there was not, in the first instance, clear and convincing evidence that continuation of Father’s relationship with the children would result in continued abuse or neglect. The finding that Mother was able to protect the children in the event of hostility or drug abuse on the part of Father should have further informed the trial court in its discretion regarding the termination of Father’s parental rights. We recognize that these distinctions are difficult to observe given the complexity of family dynamics. Nevertheless, the court must always be guided by considerations of the best interests of the children, despite the unearned benefit which may be reaped by the parent unable to fully comply with the responsibilities and obligations of parenting. 19 ¶34 Terminating a parent-child relationship “divests the child and the parents of all legal rights, powers, immunities, duties, and obligations with respect to each other . . . except the right of the child to inherit from the parent.” Section 41-3-611(1), MCA. One such divested obligation is that of support and education. Section 40-6-211, MCA. Here, Father’s children were ages nine, four, and two at the time of termination. Terminating Father’s parental rights also extinguished Father’s obligation to provide for their support. The record establishes that Father is employed in the oil industry and capable of providing support to his children. Thus, Father’s ability to provide support for up to sixteen years should have been a consideration in determining whether the children’s best interests necessitated termination. ¶35 Additionally, the record establishes Mother wanted her relationship with Father to continue and that the children had a “strong bond” with Father. CASA and the children’s attorney counseled against termination. DPHHS stated they wanted Father to have supervised visits with his children but could not achieve that result in the pending proceeding. Instead, DPHHS advocated for termination, even though Moran testified she otherwise did not think termination was in the children’s best interests because Mother would not be able to receive child support from Father and the children have a strong relationship with Father. ¶36 The District Court failed to appropriately give primary consideration to the needs of the children. There is insubstantial evidence that Father posed a risk or danger to his children or that continuation of their relationship would result in continued abuse or 20 neglect. The District Court conceded at the end of the termination hearing that it did not know whether Father represented a danger at all, telling Mother, “The father of your children. They think he’s a danger. And quite frankly, I’m not certain if he is or not.” If the District Court was uncertain whether Father posed a danger to his children, than its conclusion that continuation of the parent-child legal relationship would result in continued abuse or neglect was certainly not supported by clear and convincing evidence. The District Court’s order terminating Father’s parental rights should be reversed. /S/ LAURIE McKINNON

February 2, 2016

5b5f8bfc-279a-4804-95e7-b4ae3ee47d8f

State v. Paquette

2016 MT 54N

DA 14-0360

Montana

Montana Supreme Court

DA 14-0360 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 54N STATE OF MONTANA, Plaintiff and Appellee, v. JENNIFER LYNN PAQUETTE, Defendant and Appellant APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DC-12-382(D) Honorable David M. Ortley, Presiding Judge COUNSEL OF RECORD: For Appellant: Paul 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 Ed Corrigan, Flathead County Attorney, Kalispell, Montana Submitted on Briefs: February 17, 2016 Decided: March 8, 2016 Filed: __________________________________________ Clerk March 8 2016 Case Number: DA 14-0360 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 In October 2012, Jennifer Paquette was involved in an altercation to which officers of the Flathead County Sheriff’s Office responded. Paquette was charged with felony assault with a weapon, felony attempted assault on a peace officer, and misdemeanor assault with bodily fluid. ¶3 Paquette has a lengthy history of mental illness and at the February 13, 2013 omnibus hearing, Paquette indicated that she would rely on a mental illness defense. Following plea negotiations, Paquette pled no contest to attempted assault on a peace officer and the remaining charges were dropped. Subsequently, sentencing was delayed for multiple reasons, including Paquette’s involuntary commitment to the Montana State Hospital (MSH). The Eleventh Judicial District Court, Flathead County, conducted a sentencing hearing on November 14, 2013, at which both Paquette and her attorney were present. The court ordered that Paquette be committed to the Department of Public Health and Human Services (DPHHS) for a period of five years to be placed in an appropriate facility that will provide care and treatment for her mental health issues. The court urged that DPHHS not incarcerate her in a correctional facility. The District Court judge indicated at sentencing that he had read Paquette’s lengthy medical records, 3 including the mental evaluation in the presentence investigation and the records generated during Paquette’s April 2013 commitment to MSH, and that the sentence was designed to provide Paquette with treatment that could possibly allow her to function as a law-abiding citizen upon release. The court included numerous parole conditions but waived assessment of fees based upon Paquette’s indigency. Paquette appeals. We affirm. ¶4 Paquette claims on appeal that the District Court erred by sentencing her without complying with §§ 46-14-311 and -312, MCA. These statutes instruct sentencing courts that are dealing with mentally impaired defendants to order and consider mental evaluations designed to assist the sentencing court in making the best treatment, care, and custody sentencing decisions for the defendant. Paquette argues that because the court did not order the evaluation before sentencing her, “there is the appearance that all necessary information was not considered and [Paquette’s] fundamental constitutional rights were violated.” ¶5 Paquette failed to preserve this argument for appeal by failing to raise the issue before the District Court. It is well-established that to properly preserve an issue or argument for appeal, a party must raise it in the district court. In State v. West, 2008 MT 338, ¶ 17, 346 Mont. 244, 194 P.3d 683, we explained: “[T]he rationale underlying the timely-objection rule is judicial economy and ‘bringing alleged errors to the attention of each court involved, so that actual error can be prevented or corrected at the first opportunity.’” Here, Paquette had ample opportunity to notify the court of its obligations under the statutes but she failed to do so. On appeal, she acknowledges that she did not 4 raise this argument but requests that we review her argument under the plain error doctrine. We invoke our “plain error review” sparingly and decline to do so here. State v. Main, 2011 MT 123, ¶ 53, 360 Mont. 470, 255 P.3d 1240. Moreover, because the record establishes that the District Court had before it an extensive medical account of Paquette’s past and current mental status when making its sentencing decision, there is no evidence to support her contention that her fundamental constitutional rights were violated. ¶6 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. ¶7 Affirmed. /S/ PATRICIA COTTER We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ JIM RICE /S/ JAMES JEREMIAH SHEA

March 8, 2016

f721f5e2-8b3d-410c-9d0b-a488f84fac8c

Matter of L.A.A. and C.C. YINC

2016 MT 135N

DA 15-0784

Montana

Montana Supreme Court

DA 15-0784 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 135N IN THE MATTER OF: L.A.A. and C.C., Youths in Need of Care. APPEAL FROM: District Court of the Nineteenth Judicial District, In and For the County of Lincoln, Cause Nos. DN 15-03 and DN 15-04 Honorable James B. Wheelis, Presiding Judge COUNSEL OF RECORD: For Appellant: Shannon Hathaway, Montana Legal Justice, PLLC, Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Katie F. Schulz, Assistant Attorney General, Helena, Montana Bernard Cassidy, Lincoln County Attorney, Libby, Montana Submitted on Briefs: May 11, 2016 Decided: May 31, 2016 Filed: __________________________________________ Clerk May 31 2016 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 Mother appeals the order of the Nineteenth Judicial District Court terminating her parental rights to her two minor daughters on the ground that the condition or conduct rendering Mother unfit to parent her children was not likely to change in a reasonable time. ¶3 L.A.A. and C.C., aged 10 and 6 respectively, are Mother’s biological children but they have different biological fathers. The Department of Public Health and Human Services, Child and Family Services Division (the Department) first became involved with Mother in 2009 when it received a report that C.C.’s father physically abused L.A.A. The Department received numerous subsequent but unsubstantiated reports of physical neglect of the children during 2013 and 2014. The children were removed from Mother’s home in January 2015. Neither father was available to provide care for his child. ¶4 A show cause hearing was conducted on March 2, 2015, at which the children were declared youths in need of care and the court granted temporary legal custody of the children to the Department for six months. On March 23, 2015, a scheduled dispositional hearing was continued to April 13, 2015, because the parents failed to appear. The 3 dispositional hearing was held on April 13 and the court ordered the parents’ treatment plans to be put into effect. Mother stipulated to her plan which required that she complete psychological and chemical dependency evaluations, find adequate housing, maintain a steady and legal income, visit with her children, complete parenting classes, implement the learned parenting techniques, and maintain weekly contact with the Department. In September 2015, the County Attorney petitioned for permanent legal custody and termination of Mother’s parental rights based upon her failure to complete an appropriate treatment plan and asserting that the conduct or condition rendering her unfit to parent was unlikely to change in a reasonable time. On November 2, 2015, the District Court terminated the parental rights of Mother and both fathers. Mother appeals. Fathers do not. We affirm. ¶5 Mother argues the District Court violated her constitutional right to parent her children and abused its discretion by terminating her rights without meeting the proper statutory criteria set forth in § 41-3-609(1)(f), MCA, and upon finding that the condition that prevents her from currently parenting the children is unlikely to change within a reasonable time. Mother asserts the District Court should have granted her request for additional time to complete her treatment plan. The State counters that the District Court did not abuse its discretion when it terminated Mother’s rights because adequate and substantial evidence had been presented to support the court’s findings and conclusion that Mother’s condition was unlikely to change in a reasonable period of time. ¶6 Section 41-3-609(1)(f), MCA, provides that a court may order termination of a parent’s rights when clear and convincing evidence is presented that (1) the child is an 4 adjudicated youth in need of care, (2) an appropriate and court-approved treatment plan has not been complied with or has been unsuccessful, and (3) the conduct or condition rendering the parent unfit is unlikely to change within a reasonable time. In determining that the conduct or condition of the parents is unlikely to change within a reasonable time, the court must find that continuation of the parent-child legal relationship will likely result in continued abuse or neglect or that the conduct or the condition of the parents renders the parents unfit, unable, or unwilling to give the child adequate parental care. The court must consider the following, among other things: emotional or mental illness, a history of violent behavior by the parent, and excessive use of intoxicating liquor or a narcotic or dangerous drug that affects the parent’s ability to care and provide for the child. Section 41-3-609(2), MCA. ¶7 In the case before us, the District Court heard evidence from Mother, Mother’s departmental case workers, and a family support worker. Additionally, one of the Department case workers testified to the results of a psychological evaluation performed on Mother stemming from theft and criminal-endangerment charges brought against her. While some of the evidence presented supported Mother’s request for additional time, other evidence revealed the severity of Mother’s mental health condition, her use of alcohol and drugs in the presence of her children, and her neglect of the children’s health and dental needs. Along with other evidence, these factors supported the District Court’s decision to deny Mother additional time and to terminate her parental rights. ¶8 It is within the district court’s province and discretion to weigh witness testimony and evaluate the credibility of the witnesses. In re A.K., 2015 MT 116, ¶ 31, 379 Mont. 5 41, 347 P.3d 711. Additionally, it is well-established that “in reviewing a district court’s findings . . . we do not consider whether the evidence could support a different finding; nor do we substitute our judgment for that of the fact-finder regarding the weight given to the evidence.” In re S.H., 2003 MT 366, ¶ 10, 319 Mont. 90, 86 P.3d 1027. Moreover, the existence of conflicting evidence does not preclude a trial court’s determination that clear and convincing evidence exists to support a finding of fact.” A.K., ¶ 31. ¶9 In the case at bar, the District Court was presented with sufficient evidence to support its determination that the conditions rendering Mother unfit were unlikely to change within a reasonable period of time. ¶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. The court’s findings of fact are not clearly erroneous and the legal issues are controlled by settled Montana law, which the District Court correctly interpreted. Furthermore, there was no abuse of discretion. ¶11 We affirm. /S/ PATRICIA COTTER We Concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA /S/ LAURIE McKINNON

May 31, 2016

fd5689e2-3ddd-4dee-bcf0-4d79c67f9baa

Sparks v. Emmert

2016 MT 43

DA 15-0530

Montana

Montana Supreme Court

DA 15-0530 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 43 BARBARA SPARKS, PERSONAL REPRESENTATIVE OF THE ESTATE OF KURT R. HEIGIS, Plaintiff and Appellant, v. FRANCES EMMERT, Defendant and Appellee. APPEAL FROM: District Court of the Twenty-Second Judicial District, In and For the County of Stillwater, Cause No. DV 14-56 Honorable Randal I. Spaulding, Presiding Judge COUNSEL OF RECORD: For Appellant: Douglas D. Howard, Heard & Howard Law Office, PLLC, Columbus, Montana For Appellee: Ann E. Davey, Vincent Law Office, Columbus, Montana Submitted on Briefs: January 27, 2016 Decided: February 23, 2016 Filed: __________________________________________ Clerk February 23 2016 Case Number: DA 15-0530 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Barbara Sparks (Sparks) appeals from an order entered by the Twenty-Second Judicial District Court, Stillwater County, granting Frances Emmert (Emmert) summary judgment. We reverse and remand. ¶2 Restated, Sparks presents the following issue for review: Did the District Court err in granting summary judgment in Emmert’s favor? FACTUAL AND PROCEDURAL BACKGROUND ¶3 This case concerns the disputed validity of a quitclaim deed (Deed) executed by Kurt Heigis (Heigis) purportedly conveying certain real property to Emmert, Heigis’ long-time friend and former short-term girlfriend. The Deed’s subject real property was Heigis’ home, which is located on approximately fifty seven acres in Columbus, Montana and has been owned by Heigis’ family for three generations (Heigis Property).1 Heigis and Emmert met and became friends in the early 1970’s. For a short time in 2000, Heigis employed Emmert as a hand in his landscaping business. Heigis and Emmert dated for approximately four months beginning in late 2000. After their more intimate relationship ended amicably, Heigis and Emmert remained friends. Emmert describes their relationship as “like family.” ¶4 On June 17, 2001, Heigis executed and a notary notarized the Deed. According to Emmert, on the same day the Deed was executed, Heigis personally delivered it to Emmert at her home in Reed Point, Montana. Heigis told her to keep it and not record it 1 The legal description of the Heigis Property is S 1/2 SE 1/4 less Tract as shown on Certificate of Survey No. 260899, Section 24, Township 3 South, Range 19 East, Principal Meridian of Montana. 3 until “something happened to him.” Also, according to Emmert, she and Heigis agreed that Heigis would continue to live on the Heigis Property, maintain it, and pay for its expenses. Heigis explained to Emmert that he was giving her the Deed because he knew she would not sell the Heigis Property. Emmert stored the Deed in her safe. After physically delivering the Deed to Emmert, Heigis continued to live in his home on the Heigis Property. He also maintained the property and paid for its insurance and taxes. On October 31, 2001, Heigis executed a mortgage on the Heigis Property acting as its mortgagor. ¶5 At some point in 2003, while Heigis was at Emmert’s house visiting her, Emmert explained to Heigis that she was planning to move to Wyoming and asked if he would take back the Deed. Emmert attempted to physically return the Deed to Heigis, but Heigis refused it and reiterated to her that he wanted her to keep it. Emmert replaced the Deed in her safe. Emmert did not move to Wyoming. ¶6 On November 1, 2007, Heigis executed an additional mortgage on the Heigis Property acting as its mortgagor. On August 23, 2010, Heigis requested a survey be prepared of the Heigis Property for the purpose of a gift or sale to a family member. The landowner certification on the survey states, “Tract A,” comprising approximately twenty acres, “is to be transferred to my daughter Joanna Mong.” Heigis told Emmert about his plan to give his daughter some of the Heigis Property and she agreed it was “okay” with her. This contemplated transfer never occurred, apparently because Heigis’ daughter moved to Billings, Montana instead. Heigis executed three loan modifications to the 4 additional, November 1, 2007, mortgage on December 17, 2010, December 6, 2011, and November 26, 2013. ¶7 On February 9, 2014, Heigis was murdered while vacationing in Costa Rica. On March 5, 2014, Emmert recorded the Deed in the Stillwater County Clerk and Recorder’s Office. Sparks, Heigis’ daughter, acting as personal representative of his estate, initiated an action against Emmert to quiet title to the Heigis Property. Both parties filed motions for summary judgment. Emmert argued the facts were undisputed and that the Deed was legally delivered on June 17, 2001. Sparks agreed that the facts were undisputed, but countered that the Deed was inoperative because it was never delivered. The District Court concluded that the Deed was legally delivered and granted Emmert summary judgment. Sparks appeals. STANDARD OF REVIEW ¶8 We review an entry of summary judgment de novo, applying the same criteria of M. R. Civ. P. 56 as the district court. Davis v. State, 2015 MT 264, ¶ 7, 381 Mont. 59, 357 P.3d 320. DISCUSSION ¶9 Did the District Court err in granting summary judgment in Emmert’s favor? ¶10 Summary judgment is appropriate 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). The party opposing entry of summary judgment “must establish with substantial evidence, as opposed to mere denial, speculation, or conclusory assertions, 5 that a genuine issue of material fact exists or that the moving party is not entitled to prevail under applicable law.” Hansard Mining Co. v. McLean, 2014 MT 199, ¶ 10, 376 Mont. 48, 335 P.3d 711 (citation omitted). ¶11 On appeal, Sparks contends that summary judgment was granted in error because an issue of material fact existed—whether delivery occurred—and substantial evidence supported a conclusion that delivery did not occur. The delivery necessary to legally convey real property did not occur, she argues, because after executing the Deed, Heigis continued to retain exclusive dominion and control over the Heigis Property until his untimely and unfortunate death. Sparks contends further, that because the Deed is ineffective and invalid under § 70-1-508, MCA, because it was not delivered, Heigis’ estate owns the Heigis Property. Emmert counters that, under § 70-1-509, MCA, if a deed is executed, its delivery is presumed and the evidence that Heigis continued to live on and manage the property after executing the Deed does not clearly or convincingly rebut that presumption. Emmert argues the District Court correctly granted summary judgment in her favor. ¶12 “A grant takes effect so as to vest the interest intended to be transferred only upon its delivery by the grantor.” Section 70-1-508, MCA. “A grant duly executed is presumed to have been delivered at its date.” Section 70-1-509, MCA. This presumption may be rebutted. Clear and convincing evidence contrary to the presumption is necessary for rebuttal. Gross v. Gross, 239 Mont. 480, 482, 781 P.2d 284, 285 (1989) (citations omitted). A grant may not be delivered conditionally; instead, delivery is deemed to be absolute. Section 70-1-510, MCA. Transfer vests title “unless a different intention is 6 expressed or is necessarily implied.” Section 70-1-519, MCA. An unrecorded deed is valid as between the parties. Section 70-21-102, MCA. ¶13 Delivery is a question of intent. 23 Am. Jur. 2d Deeds § 106 (2013); Roman v. Albert, 81 Mont. 393, 407, 264 P. 115, 120 (1928) (citation omitted). “To be valid and effective, the act of delivery of a deed must be accompanied by the intent that it becomes presently operative as such and presently pass title.” 23 Am. Jur. 2d Deeds § 106 (2013). The grantor must intend to divest himself of his title so as to lose all dominion, power or control over it and place it beyond the right of recall. Miller v. Talbot, 115 Mont. 1, 10- 11, 139 P.2d 502, 507 (1943). “[T]he failure of the grantor to reserve a life estate, and the grantor’s remaining in possession of the property and the deed until death, strongly indicates that there was never a delivery of the deed to the grantees.” 23 Am. Jur. 2d Deeds § 143 (2013). “The facts and circumstances which have been held sufficient to constitute the actual or constructive delivery of a deed are exceedingly numerous and varied.” Springhorn v. Springer, 75 Mont. 294, 300, 243 P. 803, 804 (1926). ¶14 Acts or declarations of the grantor subsequent to physically delivering a deed to the grantee to hold until a future time are admissible as bearing on the intention of the grantor to make delivery. 23 Am. Jur. 2d Deeds § 146 (2013). Examples of subsequent statements of the grantee that were considered as evidence to dispute whether delivery had occurred in other jurisdictions include declarations that: 1) the grantor proposed or desired to sell the property purportedly conveyed by the deed; 2) the instrument was in effect a will; 3) the delivery was contingent upon certain eventualities; 4) the grantor intended to destroy the deed; 5) the grantor was under duress during the execution of the 7 instrument; and 6) the grantor, expressly or by necessary inference, indicated that the grantor considered himself or herself to be the owner of the property. 23 Am. Jur. 2d Deeds § 146 (2013). ¶15 The grantor’s right to recall a deed has been a determining factor in several cases which have similarly focused on whether a deed had been effectively delivered. See Hayes v. Moffatt, 83 Mont. 214, 226-27, 271 P. 433, 437 (1928); Miller, 115 Mont. at 8-9, 139 P.2d at 506. Often, the facts presented involve either a third party or a safety deposit box holding an executed deed. Typically, courts hold that where both the grantee and grantor have access to the document, the deed has not been delivered because it is still subject, at least in part, to the grantor’s dominion and control. Courts have held that where a grantor has access to and could destroy or retake the Deed if they changed their mind, the document was not delivered. ¶16 Here, the record indicates Heigis and Emmert enjoyed a decades-long friendship. The Deed was executed on June 17, 2001, and is presumed by statute to have been delivered on that date. Emmert had possession and exclusive control over the deed, which she kept in her personal safe at her home. Heigis explained to Emmert that he wanted her to have the Heigis Property because he knew she would not sell it. The parties agreed that Heigis would continue to live on, and maintain, the Heigis Property. This evidence is substantial and lends to a conclusion that Heigis intended to transfer title to Emmert upon delivery, presumably June 17, 2001, and during his lifetime. ¶17 Conversely, the record also indicates that after executing the Deed, Heigis continued to live on the Heigis Property and pay for its taxes, insurance, and 8 maintenance. Subsequent to his manual delivery of the Deed, Heigis executed two mortgages on the Heigis Property and three amendments to the second mortgage as its mortgagor and owner. Further, Heigis had the land surveyed, as its owner, for the purpose of a family transfer he was contemplating wherein he planned to give roughly twenty acres to his daughter, Joanna Mong. Emmert admits she agreed to Heigis’ plan to give a portion of the Heigis Property to his daughter. Heigis purportedly asked Emmert to wait until “something happened” to him before recording the Deed. This evidence is substantial as well and supports a conclusion that Heigis considered himself to be the owner of the Heigis Property until his death. It suggests Heigis intended the Deed to be a will-replacement and that delivery, and transfer of ownership, not occur during his lifetime or at all. This evidence also indicates Emmert acknowledged that the Heigis Property belonged to Heigis during his lifetime and was his to maintain, mortgage, recall, and, even, give away. ¶18 Additionally, the record indicates Emmert attempted to return the Deed to Heigis in 2003 when Emmert was considering moving to Wyoming. This action could be construed as evidence indicating either that the parties believed Heigis could simply retake the Deed or that the parties understood the property was Emmert’s and that she was generously willing to give it back. ¶19 This case asked the District Court to address whether the facts presented represented the legal delivery of a deed that is necessary to convey real property in Montana. Delivery is a question of intent. The District Court relied on evidence in the record to conclude that delivery had occurred. However, substantial evidence in the 9 record also supported the opposite conclusion—that delivery had not occurred. Because the issue of delivery, and its concomitant determination of Heigis’intent, was material to the resolution of Sparks’ and Emmert’s dispute, and because substantial evidence supported either conclusion, the existence of the issue precluded the District Court from granting summary judgment to either party. CONCLUSION ¶20 The District Court erred in granting summary judgment in Emmert’s favor because an issue of material fact, whether the Deed was legally delivered, existed and Emmert was not entitled to judgment as a matter of law. Reversed and remanded for further proceedings consistent with this Opinion. /S/ LAURIE McKINNON We Concur: /S/ MIKE McGRATH /S/ JAMES JEREMIAH SHEA /S/ BETH BAKER /S/ JIM RICE Chief Justice Mike McGrath, concurring. ¶21 Montana law allows landowners to transfer property, effective upon the death of the grantor, without a will or a probate proceeding, by executing a beneficiary deed. Section 72-6-121, MCA. To be valid, a beneficiary deed must be properly executed and recorded in the office of the clerk and recorder of the county in which the property is located, prior to the death of the owner. Section 72-6-121(5), MCA. 10 ¶22 Had Mr. Heigis signed and recorded a beneficiary deed, this litigation could have been avoided. Emmert would have been the owner of the property. Now, however, this action has been commenced and the law regarding beneficiary deeds is not available to aid the court in resolving this matter. Section 72-6-121(9), MCA, provides in pertinent part: “This section does not invalidate any deed otherwise effective by law to convey title to the interests and estates provided in the deed that is not recorded until after the death of the owner.” As the majority holds, the District Court must determine whether the deed was legally delivered. ¶23 But for the provisions in subsection (9), I would hold that the deed was a beneficiary deed, but invalid for failure to be properly recorded prior to Heigis’s death. /S/ MIKE McGRATH

February 23, 2016

0c3b6d3a-d4f4-4d7a-a955-f80f7a4bd7a3

Matter of T. A. D. a Youth

2016 MT 31N

DA 15-0042

Montana

Montana Supreme Court

DA 15-0042 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 31N IN THE MATTER OF T. A. D., A Youth. APPEAL FROM: District Court of the Ninth Judicial District, In and For the County of Pondera, Cause No. DJ 14-03 Honorable Robert G. Olson, Presiding Judge COUNSEL OF RECORD: For Appellant: Colin M. Stephens, Smith & Stephens, P.C.; Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Jonathan M. Krauss, Assistant Attorney General; Helena, Montana MaryAnn D. Ries, Pondera County Attorney; Conrad, Montana Submitted on Briefs: January 13, 2016 Decided: February 9, 2016 Filed: __________________________________________ Clerk February 9 2016 Case Number: DA 15-0042 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 T.A.D. appeals from a dispositional and restitution order from the Ninth Judicial District Court, Pondera County. T.A.D. argues that his right to confront witnesses against him, as guaranteed under the U.S. and the Montana Constitutions, was violated during the restitution hearing. This case is a companion to a simultaneous delinquent youth proceeding that arose from the same facts, and was appealed on similar grounds. See In re D.G.J., 2015 MT 347N, __ Mont. __, __ P.3d __. We affirm. ¶3 The facts of this matter, arising out of a series of vehicular break-ins and thefts, are set forth in In re D.G.J., ¶¶ 3-4. The State filed petitions against both involved youths, seeking to name them as delinquent youths on the grounds that their actions, if committed by an adult, would constitute criminal offenses. The Petition alleged that T.A.D. had perpetrated conduct which would constitute felony Theft by Accountability, in violation of §§ 45-2-301 and 45-6-301, MCA (2013), misdemeanor Criminal Trespass to Vehicles by Accountability, in violation of §§ 45-2-301 and 45-6-202, MCA (2013), and misdemeanor Theft by Accountability, in violation of §§ 45-2-301 and 45-6-301, MCA (2013). After the parties reached an agreement on the charges, the State dismissed 3 the felony Theft count, and T.A.D. entered a no contest plea to each of the two misdemeanor counts. The youth court accepted the no contest pleas and conducted a disposition and restitution hearing. ¶4 At the hearing, only one victim of the thefts was present to give in-court testimony concerning restitution. The Chief of Police for the City of Conrad, Gary Dent (Dent), gave testimony and compiled a list of the values of the items taken from the victims. Dent testified that he had prepared the list by finding values of the stolen items in the police reports, and from talking to the victims themselves. Counsel for both youths raised wholesale continuing objections to Dent’s testimony, citing “best evidence, hearsay, confrontation,” which the youth court overruled. Ultimately, the youth court placed T.A.D. on probation until age 18 and imposed joint and several liability on the two youths for restitution in the amount of $888, which was substantially less than the victims had requested. T.A.D. appeals. ¶5 T.A.D. argues that because the actual victims did not testify about the value of the stolen goods, the valuation provided by Dent violated his right to confront and meaningfully cross examine witnesses, as guaranteed by the U.S. and the Montana Constitutions. A prerequisite for review by the Court requires that an argument have been properly preserved for appeal. See In re Transfer Territory from Poplar Elementary Sch. Dist. No. 9 to Froid Elementary Sch. Dist. No. 65, 2015 MT 278, ¶ 13, 381 Mont. 145, __ P.3d __. To properly preserve an issue for appeal, the party objecting has an “obligation . . . to make the basis and grounds for his objection clear to the court.” 4 State v. Weeks, 270 Mont. 63, 85, 891 P.2d 477, 490 (1995). “We will not reverse a district court when it was not given an opportunity to correct the error alleged. . . . Broad, general objections do not suffice.” Siebken v. Voderberg, 2015 MT 296, ¶ 19, 381 Mont. 256, 359 P.3d 1073 (citations and quotation marks omitted). T.A.D.’s trial counsel’s broad one-word objection of “confrontation” at the restitution hearing failed to adequately raise the issue before the District Court for preservation of the complex, albeit well-articulated, constitutional confrontation arguments presented on appeal. ¶6 Further, we note that T.A.D.’s appellate arguments are largely theoretical in that he does not challenge the restitution amount he was ordered to pay. T.A.D. fails to show that the amount ordered by the District Court, which was substantially less than requested by the victims, is excessive or unreasonable. As the State points out, “T.A.D. does not argue on appeal that the restitution amount was arrived at in an inequitable manner, that restitution was not ‘appropriate,’ or even that the amount was incorrect given the evidence presented.” ¶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. ¶8 Affirmed. /S/ JIM RICE 5 We concur: /S/ PATRICIA COTTER /S/ BETH BAKER /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA

February 9, 2016

e3141038-8c9b-449b-b690-43b3f08e0d3f

State v. Deshazer

2016 MT 8

DA 14-0551

Montana

Montana Supreme Court

DA 14-0551 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 8 STATE OF MONTANA, Plaintiff and Appellee, v. TANRE DESHAZER, Defendant and Appellant. APPEAL FROM: District Court of the Twenty-First Judicial District, In and For the County of Ravalli, Cause No. DC 2013-243 Honorable James A. Haynes, Presiding Judge COUNSEL OF RECORD: For Appellant: Natalie Wicklund, Assistant Appellate Defender; Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Katie F. Schulz, Assistant Attorney General; Helena, Montana William Fulbright, Ravalli County Attorney, Thorin Geist, Deputy County Attorney; Hamilton, Montana Submitted on Briefs: October 28, 2015 Decided: January 12, 2016 Filed: __________________________________________ Clerk January 12 2016 Case Number: DA 14-0551 2 Justice James Jeremiah Shea delivered the Opinion of the Court. ¶1 Tanre Deshazer appeals an order of the Twenty-First Judicial District Court, Ravalli County, denying his motion to dismiss a charge of felony theft by common scheme for improper venue. We address the following issue: Whether the District Court erred when it denied Deshazer’s motion to dismiss for improper venue. ¶2 We affirm. PROCEDURAL AND FACTUAL BACKGROUND ¶3 In December 2013, the State of Montana charged Deshazer with felony theft by common scheme for double-cashing seven paychecks issued by SS Staffing Inc., an employment agency located in Ravalli County. SS Staffing issued the paychecks for Deshazer’s work as a temporary employee at The Springs, a senior living community in Missoula County. ¶4 Between October and December 2012, Deshazer electronically deposited the seven paychecks to his Bank of America account via a mobile banking application on his smartphone. Using the application, Deshazer sent a photograph of each paycheck and a note of its amount to Bank of America for deposit. After making the electronic deposits, Deshazer retained the physical paychecks; then, between February and April 2013, Deshazer endorsed, submitted, and received cash for those same paychecks at either a 3 Walmart or an Albertson’s in Missoula. Bitterroot Valley Bank in Ravalli County,1 where SS Staffing does its banking, honored all fourteen deposits and later reimbursed SS Staffing for the duplicate charges. ¶5 In April 2013, an SS Staffing employee reported the double-cashed paychecks to the Hamilton Police Department in Ravalli County. Deshazer admitted to double-cashing the paychecks, and the State charged him in Ravalli County with one count of felony theft by common scheme. Deshazer moved to dismiss the charges against him, alleging that they were brought in an improper venue. At a May 8, 2014 pre-trial hearing, the District Court verbally denied Deshazer’s motion, concluding that Ravalli County was a proper venue. The District Court issued its written opinion and order denying Deshazer’s motion on June 2, 2014. The District Court concluded that the State could charge Deshazer with theft in Ravalli County because the stolen funds were unlawfully transferred from SS Staffing’s bank account at Bitterroot Valley Bank in Ravalli County. ¶6 On June 3, 2014, at the conclusion of a non-jury trial, Deshazer was convicted of felony theft by common scheme. The parties stipulated to $1,549.03 in restitution, and Deshazer was sentenced to a five-year commitment to the Department of Corrections. On appeal, Deshazer contends that the District Court erred by denying his motion to dismiss for improper venue. 1 Deshazer requests that this Court take judicial notice of the Secretary of State’s Registry that Bitterroot Valley Bank is located in Lolo, in Missoula County. We decline to do so, as that fact was not presented below and we “will not consider on appeal facts that are not found in the record.” State v. Bromgard, 273 Mont. 20, 23, 901 P.2d 611, 613 (1995). 4 STANDARD OF REVIEW ¶7 We review de novo a district court’s grant or denial of a motion to dismiss in a criminal case. State v. Young, 2007 MT 323, ¶ 24, 340 Mont. 153, 174 P.3d 460. DISCUSSION ¶8 Whether the District Court erred when it denied Deshazer’s motion to dismiss for improper venue. ¶9 The Montana Constitution safeguards a criminal defendant’s right to a trial by a “jury of the county or district in which the offense is alleged to have been committed.” Mont. Const. art II, § 24. In line with this provision, § 46-3-110(1), MCA, requires criminal charges to be filed “in the county where the offense was committed.” However, when the requisite acts of a criminal offense occur in more than one county, “the charge may be filed in any county in which any of the acts or offenses occurred.” Section 46-3-112(1), MCA. Similarly, “if the county in which the offense was committed cannot be readily determined, the offender may be charged in any county in which it appears that an element of the offense occurred.” Section 46-3-114(1), MCA. ¶10 The State charged Deshazer with the crime of felony theft by common scheme pursuant to § 45-6-301(1), MCA. “A person commits the offense of theft when the person purposely or knowingly obtains or exerts unauthorized control over property of the owner” with “the purpose of depriving the owner of the property.” Section 45-6-301(1), MCA. Felony theft thus consists of two elements: “a knowing exertion of control and a purpose to deprive.” State v. Eagle Speaker, 2000 MT 152, ¶ 13, 300 Mont. 115, 4 P.3d 1 (citing § 45-6-301(1)(a), MCA (Compiler’s Cmts.)). 5 Under the Montana Constitution, the State had the authority to bring charges against Deshazer in any county in which either of these elements occurred. See Eagle Speaker, ¶ 24 (“[T]he offense of theft occurs for jurisdictional purposes where the elements of that offense take place.”). ¶11 The parties dispute the moment in time at which Deshazer “knowingly exert[ed] unauthorized control” over the property of SS Staffing. See § 45-6-301(1), MCA. In its order denying Deshazer’s motion to dismiss, the District Court concluded that Ravalli County was an appropriate venue because “the requisite act of exerting unauthorized control over money occurred when Deshazer cashed each of the 7 checks a second time, causing funds to be unlawfully transferred from SS Staffing’s bank account at Bitterroot Valley Bank, thereby acting negatively upon these two Ravalli County based entities.” On appeal, Deshazer contends that Ravalli County was not a proper venue because “Mr. Deshazer completed the theft when he accepted the cash” and, thus, “[e]very element of Mr. Deshazer’s theft transpired within Missoula County.” By contrast, the State contends that “[u]nauthorized control did not occur until Bitterroot Valley Bank transferred the funds” for the duplicate checks. ¶12 “[A] theft is complete once all the elements of the theft transpired.” Eagle Speaker, ¶ 15. The State cites State v. Cline, 170 Mont. 520, 555 P.3d 724 (1976), to support its argument that Deshazer’s theft was not complete until the funds for the duplicate checks were retracted from SS Staffing’s bank account at Bitterroot Valley Bank. In Cline, we held that Lewis and Clark County was a proper venue to charge a defendant with obtaining money by false pretenses because one of the elements of that 6 crime—“fraud in obtaining the state’s settlement money”—occurred “in Lewis and Clark County where the settlement money was disbursed.” Cline, 170 Mont. at 533, 555 P.3d at 732-33. Deshazer attempts to distinguish Cline by arguing that, in Cline, “the disbursal action completed the element of fraud.” By contrast, Deshazer argues, a theft charge does not require a victim to assent to action, so Deshazer committed a theft “as soon as” he received cash for his paychecks at Albertson’s or Walmart. ¶13 Section 45-6-301(1), MCA, specifically requires the exertion of “unauthorized control over the property of the owner” (emphasis added). The parties do not dispute that SS Staffing owned the bank account from which the money for Deshazer’s duplicate paychecks was retracted. Until the funds were transferred out of SS Staffing’s account, Deshazer did not exert unauthorized control over SS Staffing’s property. We find Deshazer’s attempt to distinguish Cline unpersuasive. ¶14 SS Staffing, based in Ravalli County, issued Deshazer’s paychecks. Deshazer first electronically deposited seven paychecks into his own bank account. He then took the same seven paychecks to retailers in Missoula County and received cash in exchange for them. Deshazer did not obtain control of SS Staffing’s property until the duplicate amounts were transferred from SS Staffing’s bank account at Bitterroot Valley Bank. ¶15 Had Deshazer’s theft been interrupted immediately after he had cashed the checks, or had Bitterroot Valley Bank refused to honor the checks before retracting the money from SS Staffing’s bank account, then Deshazer’s theft would have been perpetrated against Walmart and Albertson’s, since they would have been the “owners” of the money over which he had exercised “unauthorized control.” See § 45-6-301(1), MCA. But that 7 is not what happened in this case. The checks were honored, and duplicate funds were retracted from SS Staffing’s account, thus completing Deshazer’s theft of SS Staffing’s funds. Accordingly, the element of theft requiring the exertion of unauthorized control over property of the owner occurred in Ravalli County when the stolen funds were transferred out of SS Staffing’s bank account. The District Court did not err in concluding that Ravalli County was a proper venue for the State to charge Deshazer with felony theft by common scheme. CONCLUSION ¶16 We affirm the District Court’s decision and order denying Deshazer’s motion to dismiss for improper venue. /S/ JAMES JEREMIAH SHEA We Concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ LAURIE McKINNON /S/ JIM RICE

January 12, 2016