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STATE v HAGERUD

N/A

13760

Montana

Montana Supreme Court

No. 13760 IN THE SUPREME COURT OF THE STATE OF MONTANA THE STATE OF MONTANA, Plaintiff and Appellant, DARYL D. HAGERUD, Defendant and Respondent. Appeal from: District Court of the Eleventh Judicial District, Honorable Robert C. Sykes, Judge presiding. Counsel of Record: For Appellant: /n r'kc Hon. Greely, Attorney General, Helena, Montana William A . Douglas, County Attorney, argued, Libby, Montana Ian Christopherson argued, Libby, Montana For Respondent : Morrison & Hedman, Whitefish, Montana Frank Morrison, Sr. argued, Whitefish, Montana Submitted: September 15, 1977 Decided : Filed: Mr. Justice Frank I. Haswell delivered the Opinion of the Court. Following a nonjury evidentiary hearing, the District Court of Lincoln County entered judgment acquitting defendant of deliberate homicide on the grounds of mental defect exclud- ing responsibility. The state appeals from this judgment, or in the alternative seeks review and reversal by writ of super- visory control. During the late afternoon, September 13, 1976, at the Frontier Bar in Rexford, Montana, defendant was drinking and playing pool with Wilma Eisenman, Fred Wales and Marilyn Mullin. Defendant, who had been divorced several months earlier, was "involved" with Wilma to the point they were considering marriage. During the pool game Wales made several comments to Wilma about certain things she had done at a party a few years earlier. De- fendant, upset by these remarks, stormed into the rest room. Wales followed defendant into the rest room, carrying a pool cue and laughing about his conversation with Wilma. When defendant and Wales emerged from the rest room, defendant was holding the pool cue in one hand and Wales by the shirt with the other. Defendant shoved Wales into a corner and began striking him with the pool cue and beating him with his fists. At this point Wilma and Marilyn left the bar and Marilyn called the law. After she completed the phone call, Marilyn saw defendant leave the bar. When Marilyn re-entered the bar, Wales was sprawled across the pool table. Wales said to her: "I can't figure out why Daryl did what he did to me." Wales then stood up, staggered around the bar, and collapsed dead. The broken pool cue and a broken beer bottle lay nearby. An autopsy by a forensic pathologist revealed that, in addition to numerous bruises about Wales' body, Wales had sustained four blows on his upper forehead and the top and back of his head. Two of these blows could have been inflicted by an in- strument similar to a pool cue; the other two blows could have been inflicted by an instrument such as a beer bottle. The pathologist concluded that any one or all of these four blows were the direct and proximate cause of Wales' death. The defendant could not remember what happened in the rest room. The Lincoln County attorney charged defendant with the crime of deliberate homicide by information filed in the District Court. Defendant timely filed a notice of intent to interpose two defenses: (1) mental incompetence excluding responsibility, and (2) self-defense. The district judge ordered defendant to Warm Springs State Hospital for psychiatric examination. Dr. William Alexander, the clinical director at Warm Springs State Hospital, made a psychiatric examination and eval- uation of defendant and rendered a report to the District Court. Dr. Alexander reported defendant had suffered severe head in- juries in an industrial accident in 1966 resulting in organic brain damage. He indicated defendant was suffering from non- psychotic brain syndrome associated with mild brain trauma and classified defendant as having a passive-aggressive personality, dependent type. Dr. Alexander concluded with an explanation of defendant's present condition in this language: "Patient is aware of the nature of the charges against him and he is able to assist his lawyer in his own defense. He is aware of the criminal- ity of the alleged charges. He is able to con- duct himself according to the requirements of the law, and although he is able to have a particular state of mind which is an element of the offense charged, it seems a certainty that there was never any intention on his part to produce the actual end result of the fight. It is felt that this patient, in many ways, is a victim of circumstances." In a later deposition, Dr. Alexander further explained his evaluation. He concluded that at the time of commission of the offense defendant was unable to conform his conduct to the requirements of the law because of a combination of his mental defect, his consumption of alcohol prior to the alter- cation, and his " * * * being in a particular situation at a particular time." A psychological report by Katherine Gallagher, a psychol- ogist at Warm Springs State Hospital, accompanied Dr. Alexander's report. She concluded that defendant suffered from a pressing deep-smted anxiety, hysterical neurosis and nonpsychotic organic brain syndrome. At defense counsel's request, defendant was additionally examined by psychiatrists Dr. Robert Wetzler and Dr. Sol Levy, both of Spokane, Washington, and by a Kalispell, Montana psycholo- gist, Dr. Herman Androes. At the county attorney's request, defendant was also examined by Dr. Richard Jarvis, a psychiatrist from Seattle, Washington. All concurred with Dr. Alexander's diagnosis that on the day of the altercation defendant suffered from organic brain syndrome. In addition some of the examiners classified defendant as a passive-aggressive personality type; others thought he might have hysterical neurosis. The defendant's and the state's examiners disagreed con- cerning the effect of defendant's mental defect on his conduct at the time of the alleged offense. Drs. Levy and Androes con- cluded that at the time of the alleged offense, defendant was un- able to appreciate the criminality of his conduct or to conform his conduct to the requirements of the law. Dr. Wetzler thought de- fendant's mental disorder impaired his ability to appreciate the criminality of his conduct or to conform his conduct to the require- ments of law. Dr. Jarvis concluded that defendant was not impaired t o t h e e x t e n t of l e g a l i n s a n i t y , b u t r a t h e r t h a t he had " i n t a c t " criminal r e s p o n s i b i l i t y a t t h e beginning of t h e a l t e r c a t i o n . D r . J a r v i s conceded t h a t defendant may have been c a r r i e d away by overwhelming emotion i n t h e course of t h e a s s a u l t "going berserk, s o t o speak". O n January 20, 1977, t h e District Court, s i t t i n g without a jury, conducted a p r e t r i a l hearing on t h e defense of mental d e f e c t excluding r e s p o n s i b i l i t y . The r e p o r t s of a l l examiners and various depositions w e r e admitted i n evidence. O n February 3 , t h e D i s t r i c t Court entered f i n d i n g s of f a c t , conclusions of l a w , and a judgment of a c q u i t t a l on t h e grounds of mental d e f e c t excluding r e s p o n s i b i l i t y . Defendant was committed t o Warm Springs S t a t e Hospital. Following d e n i a l of t h e state's motion t o recon- s i d e r , t h e state appealed from t h e judgment and a l t e r n a t i v e l y requested t h i s Court t o review and reverse t h e D i s t r i c t Court judgment by supervisory c o n t r o l i n t h e event t h i s Court f e l t t h e s t a t e had no r i g h t of d i r e c t appeal. The i s s u e s r a i s e d by t h e p a r t i e s i n t h i s proceeding can be summarized i n t h i s manner: (1) Does t h e state have t h e r i g h t of d i r e c t appeal from t h e judgment? ( 2 ) Is t h e judgment s u b j e c t t o review by t h i s Court by w r i t of supervisory c o n t r o l ? (3) I f t h e judgment is reviewable on t h e m e r i t s , should it be affirmed, modified o r reversed? The state contends t h a t it has a s t a t u t o r y r i g h t of d i r e c t appeal from t h e judgment under s e c t i o n 9 5 - 2 4 0 3 ( b ) ( l ) , R.C.M. 1947, granting t h e state t h e r i g h t of appeal " * * * from any c o u r t o r d e r o r judgment t h e s u b s t a n t i v e e f f e c t of which r e s u l t s i n * * * dismissing t h e case". The s t a t e argues t h a t t h e s u b s t a n t i v e e f f e c t of t h e D i s t r i c t Court judgment i s a dismissal of t h e case because the state will not be able to prove an essential element of the offense--the required mental state. The defendant asserts that the state has no right of appeal under common law, the Montana Constitution, or by statute. He urges that section 95-2403 (b) (1) does not grant the state the right of appeal in this case because the substantive effect of the judgment is an acquittal of the defendant rather than a dis- missal of the case and any statutory right of appeal granted the state is in derogation of the common law and must be strictly construed. The state's right to a direct appeal from the District Court judgment in this case is governed exclusively by statute. Such right did not exist at common law. State v . Peck, 83 Mont. 327, 271 P. 707 (1928). The Montana Constitution does not specifi- cally address the state's right of appeal in a criminal case. The controlling statute is section 95-2403 which provides in pertinent part : "(a) Except as authorized by this code, the state may not appeal in a criminal case. "(b) The state may appeal from any court order or judgment the substantive effect of which results in: " (1) dismissing a case * * *" . Although it is generally agreed that a statute in dero- gation of the common law must be strictly construed, this rule of statutory construction cannot be used to defeat the obvious purpose of the legislature, nor to lessen the scope plainly intend- ed to be given the statute. 3 Sutherland, Statutory Construction, Sec. 61.02, p . 46 (4th Ed. 1974). Here the intention of the legislature is clear from the language of the statute and ex- trinsic rules of statutory construction may not be employed to ascertain legislative intent. W . R. Grace Co. v. Dept. of Revenue, Mont . , 567 P.2d 913, 34 St.Rep. 713 (1977), and cases cited therein. Here the legislature clearly granted the state the right of appeal "from any court order or judgment the substantive effect of which results in * * * dismissing the case1'. Nonetheless, the language of the statute grants the state no right of direct appeal in this case. The substantive effect of the judgment here is not dismissal of the case. The substantive effect is acquittal of the defendant. The two terms are neither mutually inclusive nor synonymous. In a dismissal of the case, defendant is entirely free from further restrictions on his liberty or further control by the court; in an acquittal by reason of mental defect excluding responsibility, defendant must be committed to the Warm Springs State Hospital and must remain there until the committing court finds that he may be discharged or conditionally released without danger to himself or others. Section 95-508, R.C.M. 1947. In the alternative, the state seeks to obtain review of the ~istrict Court's decision by writ of supervisory control. Both Montana's 1889 Constitution and 1972 Constitution vested in the Supreme Court supervisory control over the ~istrict Courts. The 1889 Constitution provided that this Court " * * * shall have a general supervisory control over all inferior courts, under such regulations and limitations as may be prescribed by law" in addition to its appellate jurisdiction. Art. VIII, Section 2, 1889 Montana Constitution. In 1928 this Court held that the process of "appeal" is a creature of statute. State v. Peck, supra. Under the 1972 Montana Constitution, the Supreme Court " * * * has general supervisory control over all other courts" in addition to appellate jurisdiction. Art. VII, Section 2(2), 1972 Montana Constitution. his Court is further granted "original jurisdiction to issue, hear, and determine writs of habeas corpus and such other writs as may be provided by law". Art. VII, Section 2(1), 1972 Montana Constitution. We have previously held that one of the functions of supervisory control is to enable this Court to control the course of litigation in the District Courts where these courts are proceeding within their jurisdiction, but by a mistake of law, or willful disregard of it, are doing a gross injustice, and there is no appeal, or the remedy by appeal is inadequate. State ex rel. Whiteside v. District Court, 24 Iont. 539, 63 P. 395 (1900). Thus where a District Court is acting under a mistake of law and no direct appeal exists, a review of the District Court's decision through a writ of supervisory control may be entertained. See State ex rel. Nelson v . Dist. Ct., Mont . , 566 P.2d 1382, 34 St.Rep. 688 (1977). Montana's Code of Criminal Procedure provides a pretrial method for determining a defendant's competency at the time he allegedly committed the crime charged. Section 95-501 through 509, R.C.M. 1947. Upon defendant's interposing a defense of mental disease or defect excluding responsibility, or upon its own motion, the District Court must order a psychiatric exam- ination of defendant. Section 95-505(1), R.C.M. 1947. Section 95-507 (1) , R.C.M. 1947, then provides: "If the report filed under section 95-505 finds that the defendant at the time of the criminal conduct charged suffered from a mental disease or defect which rendered him unable to appreciate the criminality of his conduct or to conform his conduct to the requirements of law, and the court, after a hearing if a hearing is requested by the attorney prosecuting or the defendant, is satis- fied that the mental disease or defect was suf- ficient to exclude responsibility, the court on motion of the defendant shall enter judgment of acquittal on the ground of mental disease or defect excluding responsibility." Then,what is the proper standard for measuring the proof required to satisfy the court "that the mental disease or defect was sufficient to exclude responsibility?" The Revised Commission Comment to Section 95-507(1) states in part: "Under subdivision (a) [now subdivision (I)] in cases of extreme mental disease or defect where exclusion of responsibility is clear, trial can be avoided and the defendant immediately committed as irresponsible." In State ex rel. Krutzfeldt v . Dist. Court, 163 Mont. 164, 170, 515 P.2d 1312 (1973), we said: "That comment makes it clear that if, in the judge's opinion and after a hearing if requested by either attorney, a defendant was cZearZy suf- fering from mental disease at the time of the crime then the judge can acquit the defendant and have him committed to a state institution forthwith. The purpose is plain--to avoid a costly trial where the mental defect is plain and obvious." The state contends that the proper standard of proof was not met in this case because there was conflicting medical testimony in the record. The state argues that it was the legislature's intent to allow the District Court to acquit a defendant by reason of such a mental disease or defect only when there was absolutely no question or conflict of medical records, medical opinion or testimony that defendant was in fact suffering from such a mental disease or defect. While we do not agree with the state's strict formulation of this standard of proof, we do agree that the District Court did not apply the proper standards here. Section 95-507(1) requires that if the court "is satisfied" that the mental disease or defect is sufficient to exclude re- sponsibility, the court must enter a judgment of acquittal by reason thereof. In satisfying itself of defendant's mental dis- ease or defect, the court cannot act arbitrarily or capriciously. Nor does the term "satisfied" indicate that the court's belief of defendant's mental incompetence may be based upon a mere pre- ponderance of the evidence. The standard of proof required is proof such as to leave no room for a difference of opinion among reasonable minds. McRuffin v. State, 91 Tex.Crim.R. 569, 240 S.W. 309 (1922); Wilcoxin v . Commonwealth, 138 Ky. 846, 129 S . W . 309, (1910). Our decisions in State ex rel. Main v. Dist. Court, 164 Mont. 501, 525 P.2d 28 (1974) and State ex rel. Nelson v. District Court, supra, are not to the contrary. In Main the relator petitioned for a writ of supervisory control when the District Court refused to acquit him by reason of mental disease or defect excluding responsibility. Although conflicting medical opinions existed in the record, this Court held that the testimony of the state's medical expert did not raise a factual question. The overwhelming weight of all the testimony was that relator suffered from such a mental disease or defect as to ex- clude responsibility. In Nelson, relator also petitioned for a writ of super- visory control upon a similar refusal by the District Court. There relator asserted the defense of temporary insanity in which the facts surrounding the commission of the offense were critical to his defense. While Dr. Alexander, the only medical expert testifying, concluded from the facts Nelson related to him that Nelson was temporarily insane, we approved the trial court's ruling that Dr. Alexander's opinion was based upon deter- minations of disputed facts which were for a jury to determine. The circumstances surrounding the commission of the offense in the instant case are as important here as they were in Nelson. Although Hagerud's defense was not one of temporary insanity, experts for both sides stated that their evaluations of Hagerud's responsibility were based on the facts immediately surrounding the commission of the offense as related to them by Hagerud, and their evaluations could change depending upon what those facts were. Where, as here, the state contests those facts, and where they are crucial to establishing defendant's nonresponsi- bility under section 95-507(1), it is error for the District Court in this type of summary pretrial procedure to acquit a defendant by reason of mental disease or defect excluding re- sponsibility. Defendant contends that to permit the state to obtain review of the district court's decision acquitting defendant by reason of mental disease or defect excluding responsibility under section 95-507(1) would put defendant in double jeopardy and violate his constitutional rights. We disagree. The United States Constitution provides that no person shall " * * * be subject for the same offense to be twice put in jeopardy of life or limb * * *". Fifth Amendment, United States Constitution. The Fifth Amendment's prohibition applies to state court criminal proceedings through the "due process clause" of the Fourteenth Amendment. Benton v . Maryland, 395 U.S. 784, 23 L ed 2d 789, 89 S.Ct. 2056 (1969). This Court has previously recognized that principle. State v. Cool, Mont . , 568 P. 2 d 567, 34 St-Rep. 1029 (1977); State v . Cunningham, 166 Mont. 530, 535 P.2d 186 (1975). Additionally, the 1972 Montana Constitution declares: " * * * No person shall be again put in jeopardy for the same offense previously tried in any jurisdiction." Montana Constitution, Art. 11, Section 25. In order for an accused to be twice put in jeopardy, he must first be put in jeopardy once. Montana law provides that jeopardy attaches in a criminal trial when the first witness is sworn. State v. Cunningham, 166 Mont. 530, 535 P.2d 186 (1975). The federal rule provides that jeopardy attaches when the jury is sworn. Downum v. United States, 372 U.S. 734, 10 L ed 2d 100, 83 S.Ct. 1033 (1963). The constitutional validity of Montana's rule is currently before the United States Supreme Court in the appeal of Bretz v. Crist, 546 F.2d 1336 (9th Cir. 1976), appeal filed sub-nom. Crist v. Cline, 45 U . S . L . W . 3684 ( U . S . Feb. 18, -- No. 76-1200), 1977,/(this was a habeas corpus proceeding in Federal Court after relief was denied in state court sub. nom. State ex rel. - - Bretz and Cline v . Sheriff, 167 Mont. 363, 539 P.2d 1191 (1975)). However, under neither the federal rule nor the Montana rule does jeopardy attach prior to the commencement of the trial of the accused. The proceeding in this case was simply a pretrial hearing to determine whether defendant at the time of the offense charged was so clearly unable to appreciate the criminality of his conduct or conform his conduct to the requirements of law that trial would be useless. Defendant was never once placed in jeopardy because his trial on the crime charged was never held. The double jeopardy principle here is similar to that involved in Serfass v. United States,420 U.S. 377, 43 L ed 2d 265, 95 S.Ct. 1055 (1975), where a Federal Court had dismissed an indictment by pretrial order. In Serfass petitioner argued that although formal or technical jeopardy had not yet attached, the court's ruling was the functional equivalent of an acquittal on the merits because the dismissal was based on evidentiary facts outside the indictment which would constitute a defense on the merits. Petitioner argued that thus constructive attachment of jeopardy had occurred barring further prosecution. However, the United States Supreme Court held that although an accused may raise defenses or objections before trial which are capable of determination without a trial of the general issue, the accused had not been placed in jeopardy because he had not been subjected to the hazards of trial and possible conviction. In this case defendant was never once placed in jeopardy because he was never subjected to the possibility of conviction of the crime charged. As jeopardy has never attached in the first instance, t h e bar of double jeopardy must f a i l . The judgment of t h e D i s t r i c t Court i s vacated and t h e cause remanded t o t h e D i s t r i c t Court f o r f u r t h e r proceedings i n conformity with t h i s opinion. J u s t i c e W e concur:

November 1, 1977

d5f12181-56f0-4ea3-80fc-cac30c99633a

MILLER v FOX

N/A

13445

Montana

Montana Supreme Court

No. 13445 I N T H E SUPREME COURT O F THE STATE O F IIONTANA 1977 ROBERT W. MILLER, P l a i n t i f f and A p p e l l a n t , -vs- FLOYD FOX, Defendant and Respondent. Appeal from: D i s t r i c t Court of t h e E l e v e n t h J u d i c i a l D i s t r i c t , Honorable M. James S o r t e , Judge p r e s i d i n g . Counsel of Record: For A p p e l l a n t : Robert Hurly a r g u e d , Glasgow, Montana For Respondent : W i l l i a m J. McCarvel a r g u e d , Spokane, Washington Submitted: October 7 , 1977 Decided: MQV 2 1 1 9 n F i l e d : $\J?l (7 9 Mr. Chief Justice Paul G. Hatfield delivered the Opinion of the Court. Plaintiff Robert Miller sued defendant Floyd Fox in District Court, Valley County, for the unpaid balance on a con- tract for the sale of horses. Plaintiff obtained a writ of attachment against defendant's property. Defendant posted a cash bond for release of the attachment and counterclaimed on various grounds including wrongful attachment. After a nonjury trial, District Judge M. James Sorte found that there had been no breach of contract by defendant and that plaintiff had wrong- fully attached defendanfs property. Judge Sorte awarded defendant $400 in exemplary damages for plaintiff's wrongful attachment. In the spring, 1966, defendant, a resident of Cardston, Alberta, made an oral agreement with plaintiff at plaintiff's ranch near Jordan, Montana, for plaintiff to sell five horses to defendant. In April, 1966, plaintiff delivered the five horses to defendant at his farm in Cardston. Defendant accepted all five horses as satisfactory and made part-payment, with a balance on the contract remaining unpaid. Three of the horses were geldings, valued at $500 each, to be used for general purposes. A fourth gelding, later used as a race horse, was sold for $600. The fifth horse was a stud horse, sold for $1,500 (plaintiff's version) or for $1,200 (de- fendant's version). The remaining unpaid balance for the horses was approximately $1,700. Plaintiff did not deliver the registra- tion certificate for the stud horse, and both plaintiff and de- fendant testified that without the certificate the stud horse was valueless to defendant for either breeding or racing. In the fall, 1966, plaintiff sent defendant a letter ask- ing for the balance of his money. Defendant, in the fall, 1966, wrote plaintiff a letter and, on more than one occasion tried to telephone him, all without success. ~uring 1966,and until 1968, plaintiff resided at Jordan, had a telephone there, and received mail there. Defendant did not contact plaintiff nor offer him any payment during that time. In late June (defendant's version) or early July (plain- tiff's version) 1968, plaintiff found defendant at a horse race in Fort Benton, racing the gelding race horse plaintiff had sold him. Defendant voluntarily returned the gelding to plaintiff whereupon plaintiff credited $600 to defendant's account. De- fendant, at the time of the original horse delivery in Cardston, had paid plaintiff an amount equal to the price of three general purpose geldings; when defendant returned the gelding race horse, the only amount due under the contract was the price of the stud horse. Defendant testified that when he saw plaintiff at Fort Benton he asked plaintiff to travel to defendant's farm in Cardston to choose cattle to take in satisfaction of the contract balance. Defendant further testified that he had the cows on hand for plaintiff to select; or, if plaintiff preferred, defendant could have sold the cows and paid plaintiff in cash. Defendant alleges plaintiff never traveled to Cardston to pick out his cows or re- ceive his cash. After their Fort Benton meeting in 1968, defendant did not again contact plaintiff and offer to pay the balance of the con- tract price. Defendant, however, testified that he tried to con- tact plaintiff in both Jordan and Roundup, Montana, but nobody there knew plaintiff's whereabouts. Defendant's testimony on this point was consistent with plaintiff's statements at trial that, starting in 1968, plaintiff lived in California for about 1-1/2 years. During that time, plaintiff never tried to contact defendant to inform him of his new address. In 1971, plaintiff learned that defendant was in Glasgow, Montana, for a horse race. Plaintiff filed suit against defen- dant in District Court, Valley County, obtained a writ of attachment, and attached defendant's pickup truck, camper, four-horse trailer, and horses. Defendant, who was accompanied by his wife and daughter, was served with the attachment papers in front of the grandstand at Glasgow, in view of the race crowd. Defendant had to stay in Glasgow for about four days to make travel arrangements and to wait for money to be sent from his bank in Cardston. The district judge found that presentation of a certifi- cate of registration by plaintiff to defendant was a condition precedent to defendant's obligation to ?ay the remainder due under the contract. The judge held that defendant did not breach his contract with plaintiff since plaintiff never produced the registration papers, and frustrated defendant's performance by not apprising defendant of his whereabouts during his protracted absences from his ranch near Jordan. Defendant thus never had a duty to tender payment. The judge noted that the "Plaintiff's Affidavit in support of his Writ of Attachment stated that the contract between the parties called for a direct payment of money * * *." Because the judge concluded that plaintiff, when he sub- mitted his affidavit, knew that the contract did not call for "direct payment of money", but rather, required further perform- ance (presentation of registration papers) as a condition of pay- ment, he awarded defendant exemplary damages for plaintiff's wrongful attachment. Plaintiff raises the following issues on appeal: 1. Was tendering stud registration papers a condition precedent, failure of which would bar plaintiff from recovering under the contract? 2. Did plaintiff wrongfully attach defendant's property? 3. Did the district court err in awarding defendant exemplary damages? The s p e c i f i c terms of an o r a l c o n t r a c t must he deter- mined by t h e t r i e r of f a c t where t h e p a r t i e s t o t h e c o n t r a c t p r e s e n t c o n f l i c t i n g statements and opinions. See, Waite v. C.E. Shoemaker & Co., 50 Mont. 264, 285, 146 P. 736 (1915). I n t h i s case, p l a i n t i f f t e s t i f i e d t h a t he and defendant agreed t h a t p l a i n t i f f would r e t a i n t h e stud r e g i s t r a t i o n papers u n t i l defendant f u l l y paid t h e c o n t r a c t purchase p r i c e . Defendant, however, t e s t i f i e d t h a t t h e agreement was t h a t p l a i n t i f f would keep t h e s t u d r e g i s t r a t i o n papers u n t i l f i n a l payment only i f p l a i n t i f f f i r s t showed t h e papers t o defendant. Defendant s t a t e d t h a t p l a i n t i f f agreed t o send t h e s t u d r e g i s t r a t i o n papers defendant, b u t r e f r a i n from t r a n s f e r r i n g ownership u n t i l defen- dant tendered f i n a l payment. Both p l a i n t i f f and defendant agreed t h a t p l a i n t i f f never d i d produce t h e s t u d r e g i s t r a t i o n papers before t r i a l , and defendant t e s t i f i e d t h a t " * * * I would have been glad t o pay him b u t I g o t kind of l e a r y because t h e papers were not t h e r e , he wouldn't show them t o m e . I j u s t wanted t o see them." From t h e s e con£ l i c t i n g versions presented by p l a i n t i f f and defendant a s t o t h e t e r m s of t h e i r c o n t r a c t , t h e t r i a l judge chose t o believe defendant and r u l e d "That t h e p a r t i e s agreed a t t h a t time t h a t t h e Defendant would pay t h e remaining balance due i n t h e f a l l upQn p r e s e n t a t i o n of a c e r t i f i c a t e of r e g i s - t r a t i o n . " This Court must s u s t a i n t h e t r i a l judge's r u l i n g on t h i s point. " * * * The c r e d i b i l i t y and weight given t h e witnesses, however, i s not f o r t h i s Court t o determine. This i s a primary function of a t r i a l judge s i t t i n g without a jury; it is of s p e c i a l consequence where t h e evidence is con- f l i c t i n g . ( C i t a t i o n s omitted)." Hellickson v. B a r r e t t Mobile Home Transport, Inc., 161 Mont. 455, 459, 507 P.2d 523 (1973). Because t h e t r i a l judge found t h a t p l a i n t i f f ' s presenta- t i o n of a s t u d horse c e r t i f i c a t e of r e g i s t r a t i o n w a s a condition precedent to defendant's duty to pay the balance, the failure of plaintiff to present the certificate at any time before trial meant that defendant never before trial had the duty to tender payment. See, White v. Hulls, 59 Mont. 98, 104, 195 P. 850 (1921). Defendant, therefore, did not breach his contract for failure to tender payment for the stud horse. Plaintiff did satisfy the condition precedent, however, when he presented the stud registration paper in District Court on the date of the trial, November 6, 1975. Defendant still has possession of the stud horse and must make just compensation to plaintiff. The amount which defendant owes plaintiff for the stud horse, more than nine years after the contract date, is a factual question properly determinable by the trial judge. Plaintiff also claims that the district judge erred in finding that plaintiff had wrongfully attached defendant's property. Section 93-4301, R.C.M. 1947, allows prejudgment attachments only in actions upon contracts for the "direct payment of money". In this case, the trial judge found the contract did not call for direct payment of money, but required further performance (presen- tation of stud horse registration paper) as a condition to payment. Plaintiff's attachment therefore did not meet the statutory require- ments and was wrong, Plaintiff's final assertion of error is that the district judge improperly awarded exemplary damages of $400 for the wrongful attachment. It is true, as plaintiff claims, that under section 17-208, R.C.M. 1947, " * * * there can be no recovery of exemplary or punitive damages unless the plaintiff is entitled to actual damages." Smith v . Krutar, 153 Mont. 325, 335, 457 P.2d 459 (1969). Although the trier of fact, as a prerequisite for awarding exem- plary damages, must find the claimant suffered actual damages, it is unnecessary that the trier of fact place a monetary value on the actual damages or make any award of actual damages. Fauver v. Wilkoske, 123 Mont. 228, 239, 211 P.2d 420 (1949). The trial judge, without putting a money value on the damages, found "that the Defendant incurred expenses and inter- ruption of his business affairs caused by his having to stay in Montana to initiate legal proceedings to release the Attachment * * *" and that defendant suffered much embarrassment when he was served with the writ of attachment at the Glasgow fairground grandstand in the presence of his friends, wife and child. Be- cause the judge found actual damages, he could legally award exemplary damages. The other requirements of section 17-208 were also met, notwithstanding, plaintiff's assertions to the contrary. Plain- tiff states that section 17-208 precludes recovery of exemplary damages in actions "arising from contract". The trial judge in this case, however, awarded exemplary damages not for breach of contract, but for wrongful attachment, a tort independent of the sales contract. See, Paulson v. Kustom Enterprises, Inc., 157 Mont. 188, 202, 483 P.2d 708 (1971). A plaintiff may recover exemplary damages in an action for wrongful attachment. See Larson v. Daily, 158 Mont. 231, 236, 490 P.2d 355 (1971). Plaintiff maintains that even if the attachment was wrongful it was not done with the malice necessary under section 17-208 to sustain an award of exemplary damages. Malice neces- sary for an award of exemplary damages need not consist of spite or hatred; it is sufficient proof of malice in a wrongful attach- ment action that the defendant knew when the attachment was made that it was wrongful. See, Galindo v. Western States Collection Company, 82 N.M. 149, 477 P.2d 325, 330 (1970). In this case, plaintiff stated in his affidavit for attachment that the action was on a "contract for the direct payment of money now due", and that the payment of the contract obligation "has not been secured by any mortgage or lien upon real or personal property". Plain- tiff, however, knew when he filed the affidavit that the money was not "now due" until he showed defendant the stud registration paper and that defendant's contract debt was "secured" by plain- tiff's retention of that registration paper. For the reasons stated, the judgment of the district court as to plaintiff's liability for wrongful attachment is affirmed. The district court's judgment that defendant was not in breach of contract until the time of trial is affirmed, and the case is remanded to determine the amount on the contract price defendant owes plaintiff for a stud horse whose registration papers were not presented until the time of trial, nine years after the contract was made. The trial judge is also instructed to place a dollar amount (if any or if merely nominal) on the actual damages which he has found that defendant sustained, and order that plaintiff pay that amount to defendant as actual damages for the wrongful attachment. - ) We concur: a a . 4 J - J ' %4--- -------------- ------- f-a

November 21, 1977

214ac7f8-08a7-464d-b97e-b114cbd0ab3c

STATE v MARSHALL

N/A

13739

Montana

Montana Supreme Court

No. 13739 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 STATE OF MONTANA, Plaintiff and Appellant, VS . NORMAN BENJAMIN MARSHALL, Defendant and Respondent. Appeal from: District Court of the First Judicial District, Honorable Peter G. Meloy, Judge presiding. Counsel of Record: For Appellant: Hon. Mike Greely, Attorney General, Helena, Montana Thomas Budewitz, County Attorney, Townsend, Montana Robert Yunck argued, Cut Bank, Montana For Respondent: Hooks and Sherlock, Townsend, Montana Patrick F. Hooks argued, Townsend, Montana Submitted: September 15, 1977 -. Decided: h; v - Filed: M r . Justice Gene B. Daly delivered the Opinion of the Court. The s t a t e of Montana brings this appeal from an order of the District Court, Broadwa t e r County, suppressing certain evidence the s t a t e sought t o introduce i n the t r i a l of defendant, Norman Benjamin Marshall, charged with possession of dangerous drugs. The evidence i n question is a container of marijuana seized from under the seat of a truck driven by defendant. The order suppressing the evidence did not specify findings of fact or conclusions of law, and therefore the issue is whether the search of the truck driven by defendant and the seizure of dangerous drugs found therein was lawful. O n Saturday afternoon, October 16, 1976, Officer Walrod, driving on Highway 287 north of Townsend, Montana, saw a truck driven by Marshall with two companions, Larry Wing and M i s s Cathy Cross. Walrod knew Wing did some fishing and they were headed toward the Missouri River. H e then radioed the f i s h and game warden, because he "thought they might be doing some fishing and it might not hurt t o check them out." There was no evidence any of the three occupants of the truck ever got near the river and the f i s h and game warden, J i m Bird, admitted he did not check them out for fishing. Warden Bird was dispatched by Walrod t o check the truck and its occupants. Warden Bird t e s t i f i e d that as he drove up the Indian Creek Road he approached the tsuek which was stopped on the road and thought Cathy Cross said, from h i s l i p reading, "Here comes J i m Bird", Bird stated he thought they were a l l hiding something so he went up on a h i l l about 200 yards distant and looked a t them through a 60 power spotting scope. I n answer t o questions from the t r i a l judge, Bird stated he was looking i n the rear window of the truck a t the occupants from behind and admitted he could not see below the seat level. The significant fact of ~ i r d ' s testimony, relied upon by the s t a t e , is h i s statement: "* * * I saw M r . Marshall get something from right here (indicating) and reach down underneath the vehicle or underneath the seat with h i s l e f t hand, leaning towards Cathy Cross, and stuff it under the seat, and I informed Officer Walrod of t h i s when I called him on the radio." Warden Bird admitted that a l l he saw was an arm movement and he could not see what the object was from h i s position. Further, Bird t e s t i f i e d he saw the occupants smoking, but did not know whether it was a pipe, a cigarette or what, but as far as he knew it could have been tobacco. Walrod t e s t i f i e d Bird radioed him about the driver leaning over and putting something under the seat and that they were smoking something. A t that time Walrod did not have any idea how f a r away Bird was from the vehicle. There were no reports of any fishing violation. Acting solely on the information supplied by radio from Bird, Walrod drove t o a point near the intersection of the highway and the Indian Creek Road and stopped the vehicle. Walrod then went up t o the truck, stated he detected an odor of marijuana and ordered Marshall t o get out of the truck and empty h i s pockets. Before t h i s Court concerns i t s e l f with the issue of the search and seizure, we face the threshold question which is: Was the ''stop" of the defendant supported by probable cause and thus reasonable and therefore constitutional? A recent decision of t h i s Court which is very close in point of fact and law is State v. Lahr, - M o n t . , 560 P. 2d 527, 34 St.Rep. 90 (1977). There, an officer was watching the defendant and two other persons through binoculars. A s i n the instant case, the officer was aware of the individual's reputation as a known drug user, The officer t e s t i f i e d a package appeared hands t o chang& he had no idea what kind of package, only that the circumstances were somewhat suspicious and he saw something, but he did not know what it was. I n - Lahr the observing officer radioed another officer who stopped the vehicle on an alleged driving violation. While making the a r r e s t on the driving violation, the officer saw marijuana on the console of defendantb car and defendant was arrested for i l l e g a l possession of danger- out drugs. The defendant was never charged with a driving viola- tion. Again, compare with the instant case. Here, Officer Walrod did not even look for a pretext. H e stopped the car when it came down the Indian Creek Road and clearly t h i s was before he could detect any smell of marijuana. This Court, i n - 2 Lahr held that neither officer had probable cause t o a r r e s t the defendant and stated: "The evidence required t o establish g u i l t is not necessary t o prove probable cause for an a r r e s t , however good f a i t h or mere suspicion on the part of arresting officers is not enough. * * * Furthermore, an a r r e s t is not justified by what the subsequent search discloses ," 34 S t .Rep. 93. Warden Bird i n the instant case had only h i s suspicions, related heretofore. Officer Walrod, the arresting officer, was not present a t the scene and had only the suspicions that Warden Bird told him over the radio. Thereafter, based solely on Warden Bird's conjecture and speculation the automobile being driven by defendant Marshall down a country road on a Saturday afternoon was stopped, The stop of the automobile and subsequent events were without probable cause, therefore the District Court' s order t o suppress the evidence i s affirmed. W e Concur: \. - - _ i < d - - Chief Justice K

November 1, 1977

77fc900f-8108-40d9-88fc-b9cf07869155

ZELL v ZELL

N/A

13892

Montana

Montana Supreme Court

No. 13892 IN THE SUPREME COURT OF THE STATE OF MONTANA 197 7 VICTORIA M . ZELL, Defendant and Appellant, -vs- RAYMOND W. ZELL, Plaintiff and Respondent. Appeal from: District Court of the Ninth Judicial District, Honorable B. W . Thomas, Judge presidinq. Counsel of Record: For Appellant: Smith, Emmons, Baillie & Walsh, Great Falls, Montana For Respondent : Frisbee and I l l o o r e , Cut Bank, Montana Argument submitted on briefs Submitted: August 9, 1977 SEP 2 1 190 Decided: - Mr. Chief Justice Paul G. Hatfield delivered the Opinion of the Court. This is an appeal by the wife from the property division rendered in a divorce action. No issue is taken to the granting of the divorce nor the custody decree. This appeal marks the second time these parties have been before this Court. On June 6, 1977, this Court rendered its opinion in Zell v. Zell, Mont . , 565 P.2d 311, 34 St.Rep. 492 (1977). That opinion was limited to the motion to dismiss on the grounds the notice of appeal was not timely filed and did not address itself to the merits of the appeal. The parties to this appeal were married on November 21, 1945. Four children have been born from this marriage. All but one, Gay Loree, are of majority age. At the time of the marriage the parties owned no material property. Mr. Zell had a net worth of about $2,000. After their marriage the parties came to Montana and acquired property. All of the property involved in this appeal was acquired during the marriage. The property in question is as follows: Parcel A: The residence presently occupied by Victoria M . Zell and children of the parties located at 800 First Street South in Shelby, Montana and described as: Lots 1, 2, 3 and 4 of Block 33, of Johnsons First Addition to the Townsite of Shelby, Montana which has a reasonable value of $75,000.00, and title to which is in the name of defendant. Parcel B: Rental property consisting of a house located at 327 Eighth Avenue North in Shelby, Montana described as: Lots 4 and 5 in Block 41 of the Original School Addition to the Townsite of Shelby, Toole County, Montana which has a reasonable value of $25,000.00, and title to which is in the joint names of the parties. Parcel C: Country Farm Land in Toole County described as: Township 31 North, Range 2 West Section 7: E 1/2 Section 17: W 1/2 NW Section 18: NE 1/4 Section 5: W 1/2 SE 1/4, E 1/2 SW 1/4 Section 8: SW 1/4, less 6 acres taken for a Missle Site, which has a reasonable value of $132,000,00, and title to which is in the joint names of the parties. Parcel D: Various farm leases consisting of written leases or verbal leases or extensions of verbal leases standing in the name of Raymond W . Zell and covering the following described property, to-wit : All in Toole County, Montana: Township 31 North, Range 2 West Section 5: NE 1/4, NW 1/4 Section 8: NE 1/4, SE 1/4 Township 32 North, Range 2 West Section 31: W 1/2 Township 32 North, Range 3 West Section 24: SE 1/4 Section 25: E 1/2, SW 1/4 Section 26: E 1/2 No value for these leases, separate and apart from the value of Parcel C, was established by the evidence. Parcel E: Farm machinery, vehicles and equipment having a reasonable value of $50,000.00. Parcel F: 1975 crop and summerfallow. Parcel G: Household furnishings and miscellaneous pers~nal property. Parcel H : Bank accounts and grain. Parcel I: Real property interests inherited by Raymond W . Zell. The district court made the following disposition of the property in question: Parcel A: The residence occupied by Victoria M. Zell was left in the wife's name. Parcel B: The rental house was given to the husband. Parcel C: The farm land was partitioned equally between the parties. Parcel D: The leases were divided between the two parties. Parcel E: The farm machinery was given to the husband. Parcel F: All of the 1975 crops were divided equally between the parties after the husband was reimbursed for the costs of production. Parcel G: Miscellaneous personal property was to remain in the name of the party in whose name it is already in. Parcel I: Parcel I is the sole property of Raymond W. Zell being property which he recently inherited consisting of un- divided interests in real estate. The basic breakdown of the property division was as follows: To the Husband: Rental House $25,000 Machinery 50,000 $75,000 To the Wife: Family Home The district court made a finding that the parties had made approx- imately an equal contribution to the accumulation of the property in question and that each party owned an equal interest in that property. From this finding and judgment, the wife appeals. The wife raises this issue on appeal; Did the district court err in its division of property, in this action for divorce by failing to make an equal division of the property? The wife contends that the district court abused its dis- cretion in taking into account the family residence and that equity requires that the family house be left in the wife's name and that equal distribution of the remaining property be ordered. We disagree. The trial transcript supplied to this Court refutes the wife's claim that she provided all of the funds to purchase the family home. While being cross-examined the husband made this statement: "Q. And then your wife put up most of that money to buy the house initially, is that correct? A. I believe that she had -- let's see -- if I recall it right I believe she told me she had $35,000.00 in savings, and that came off the farm originally, I think. She took some of that money to make the down payment on the house." Nowhere in the record is this statement refuted. The statement thereby evidences contribution by the husband. The money used for the down payment came originally from the farm proceeds which were generated by the joint efforts of both parties. The husband's practice was to divide equally the crops without de- ducting any costs of production. The district court did not abuse its discretion by including the family house with the other property which was accumulated during the marriage by the joint efforts of the parties. Section 48-321(1), R.C.M. 1947, controls the district court's consideration and disposition of the marital property. Guidelines for the district court's consideration in a property division were outlined by this Court in Biegalke v . Biegalke, Mont. , 564 P.2d 987, 34 St.Rep. 401 (1977). Here, the district court in its finding of fact No. 7 found : "7. The parties have made approximately equal contributions to the accumulation of the property described as Parcels A through H and in fact and equity own equal interests in that property." The district court then went on and awarded an approxi- mately equal division of the property to each party. It is well settled in Montana that a district court has far reaching discretion in resolving property divisions and its judgment will not be altered unless a clear abuse of that dis- cretion is shown. Eschenburg v. Eschenburg, Mont . 557 P.2d 1014, 1016, 33 St.Rep. 1198 (1976). The criteria for re- viewing the district court's discretion is: Did the district court in the exercise of its discretion act arbitrarily without employment of conscientious judgment, or exceed the bounds of reason in view of all the circumstances. Berthiaume v. Berthiaume, Mont . - 1 - P.2d , 34 St.Rep. 921 (1977). A reading of the trial record, the findings of fact and conclusions of law adopted by the district court indicates that the presiding judge took into consideration each of the assets claimed by the parties, as well as the individual contribution of each party. The district court concluded that the parties made approximately equal contributions to the accumulation of the property. We find no abuse of discretion in the district court's judgment which affects an equal property division based upon equal contributions by each party. As this Court stated in Eschenburg at p. 1016: "Each case depends upon its own facts and circumstances and this case warranted an equal distribution." The judgment is Chief Justice L' w d & - & d f L 2 & - - Justices

September 21, 1977

33826694-2b0f-4675-81dc-277785daf04c

WESTERN BANK v MONT STATE BANKING

N/A

13753

Montana

Montana Supreme Court

No. 13753 IN THE SUPREME COURT OF THE STATE OF MONTANA WESTERN BANK OF BILLINGS, Petitioner and Appellant, THE MONTANA STATE BANKING BOARD and the PROPOSED RIMROCK BANK OF BILLINGS, Respondents and Respondents. Appeal from: District Court of the First Judicial District, Honorable Peter G. Meloy, Judge presiding. Counsel of Record: For Appellant: Berger, Anderson, Sinclair & Murphy, Billings, Montana Arnold Berger argued, Billings, Montana For Respondents: Crowley, Haughey, Hansen, Toole and Dietrich, Billings, Ion tana George Dalthorp argued, Billings, Montana James H. Wood argued, Helena, Montana Submitted: September 19,1977 Decided: NO'i ' 1 1 9 7 1 , - ? < 5 r - . - - ;'I' g d .a , -2 i? Filed : M r . Justice John Conway Harrison delivered the Opinion of the Court: This i s an appeal from the judgment of the d i s t r i c t court, Lewis and Clark County, affirming the decision of the respondent Montana State Banking Board (Board) granting a c e r t i f i c a t e of authorization t o respondent Rimrock Bank of Billings (Rimrock) for a new bank i n Billings, Montana. Appellant is the Western Bank of Billings (Western), the nearest existing bank t o Rimrock's location and the only protestant t o appear a t the hearing. In early February 1976, an application was presented t o the Board seeking a c e r t i f i c a t e of authorization t o organize a new Montana bank t o be called the Rimrock Bank of Billings and t o be located i n the western part of Billings. The appli- cation consisted of the basic application form provided by the Board and completed by the applicant, together with 1 1 exhibits attached thereto. When the application was received by the Board, the applicant was notified of certain delinquencies therein. After correction the Board f i l e d the application and scheduled a hearing thereon for March 29, 1976. The Board gave notice of the hearing as required by law t o a l l financial institutions within 100 miles of the location of the proposed bank. Letters of protest were f i l e d by two or three banks, but only Western appeared in opposition t o the application a t the hearing. A t the time s e t for commencement of the hearing, Western f i l e d a motion t o deny the application as insufficient as a matter of law, or, in the alternative, t o vacate the hearing and grant the applicant 60 days t o cure the alleged deficiencies i n the application. The Board took the motion under advisement and proceeded with the hearing. Both motions were l a t e r denied. The hearing l a s t e d f o r two and one-half days. Rimrock and Western presented documentary evidence a s well a s o r a l testimony. Both exercised t h e i r r i g h t s of cross-examination. The Board allowed Western t o submit additional evidence i n the form of exhibits approximately one month a f t e r t h e hearing. The Board issued an order granting Rimrock' s application on August 3, 1976. Western appealed from the order and the d i s t r i c t court, Lewis and Clark County, affirmed t h e Board's decision on January 3, 1977. Findings of f a c t made by the Board and not challenged by Western include the following background information : Rimrock w i l l be located i n an area which has experienced rapid and substantial r e s i d e n t i a l and commercial growth over the past f i v e years and the evidence indicates t h a t continued s i g n i f i c a n t growth i s l i k e l y i n the future. The primary service area of the bank increased i n population from about 20,000 i n 1970 t o over 25,000 i n 1975 and evidence indicates the population i n the area w i l l continue t o grow. I n the f a l l of 1975, there were approximately 254 businesses i n the primary service area and by the time of t h e hearing i n March 1976, t h a t number had increased t o 293. The bank w i l l be loca ted near a regional shopping center which opened on September 11, 1975, c a l l e d the Rimrock Mall. A t the time of t h e hearing there were 50 businesses i n operation i n the Rimrock Mall and it was pro- jected t h a t within one year there would be approximately 50 additional businesses and business type o f f i c e s open i n the area. Gross s a l e s f o r businesses i n the Rimrock Mall complex a r e projected t o be $24,000,000 f o r the year 1976 and $32,000,000 for the year 1977. Evidence indicated that future development in the general area of the Rimrock Mall is likely. Rimrock can reasonably be expected a t the end of the f i r s t f u l l three years of operation t o have achieved a deposit volume of $5.5 million and to show net operating earnings. Western assigns nine issues for review which we consolidate into three principal issues: 1. Was Rimrock's application, as f i l e d , sufficient t o allow the Board t o proceed with the hearing? 2. Does the record contain sufficient evidence t o support the conclusions of the Board and the d i s t r i c t court? 3. Were the regulations under which the Board proceeded legally adopted? The essence of the f i r s t issue (encompassing Western's f i r s t four basic issues presented for review) is whether Rimrock's application as f i l e d was sufficient t o allow the Board t o proceed with the hearing. Western argues the appli- cation was totally devoid of any "evidencpe that existing banks i n the area were falling short of offering adequate services t o a l l deserving bank customers in the area" as required by the Montana Administrative Code ( M A C ) 8-3.22(6) -S1000(d), then i n effect. Therefore, argues Western, the Board should not have gone ahead with the hearing and should not have issued the c e r t i f i c a t e of authorization for the new bank. Western's contention is tantamount t o saying that the slightest defect i n the application a t the time of the adminis- t r a t i v e hearing, deprives the Board of jurisdiction t o proceed with the hearing. W e have found no law and have been cited none giving any support t o that premise. To the contrary i s Columbine State Bank v. Banking Board, Colo.App.1973, 505 P. 2d 391, where the court rather summarily dealt with a similar contention, holding that the jurisdiction of the Board was not l o s t by a failure t o provide a l l required information i n the application. See: Wyoming Bancorporation v. Bonham, Wyo. 1974, 527 P.2d 432; American Farm Lines v. Black Ball Freight Service, 397 U.S. 332, 90 S.Ct. 1288, 25 L ed 2d 547. The application contains a great deal of detailed informa- tion a s required by the regulations. It had been accepted by the Department of Business Regulations a s conforming t o its requirements and thereupon filed. Western concedes that the application complied with every section and subsection of the regulations except one. Western remained s i l e n t as t o t h i s alleged defect u n t i l it f i l e d its motion to dismiss the application or t o continue the hearing a t a time when the Board, counsel for a l l parties, numerous witnesses, and the reporter were assembled i n Helena for the purpose of commencing the hearing. Rimrock then offered t o amend its application t o remedy the alleged defect while maintaining the application was sufficient. The Board took the motion under advisement and proceeded with the hearing. A t the end of the hearing, Rimrock . moved t o amend the application t o conform t o the evidence. The Board took t h i s motion under advisement also, and ultimately denied a l l motions, ruling that the application was adequate a s f i l e d and therefore no amendments were necessary. Applications i n administrative proceedings are roughly analogous t o pleadings in c i v i l actions. Many authorities hold that technical rules of pleadings such as sometimes govern c i v i l or criminal actions are not applicable t o pleading or applica- tions f i l e d with administrative agencies. See: Community of Woodston v. S t a t e Corporation Commission, 186 Kan. 747, 353 P.2d 206 (1960). Professor Davis i n h i s writings on administrative law emphasizes the unimportance of pleading i n the administrative process and s t a t e s t h a t the important thing is t h a t the p a r t i e s affected by orders of an adminis- t r a t i v e body be f u l l y heard. Davis, Administrative Law Text, 3rd Ed. 1972, 58.02, pp. 196,197. See Also: 2 Am J u r 2d Administrative Law, 55 370,371, pp. 179,180. Should the pleadings i n an administrative proceeding be construed by s t r i c t e r standards than pleadings i n c i v i l liti- gation? Rule 8 ( f ) , Montana Rules of C i v i l Procedure, provides: " A l l pleadings s h a l l be so construed a s t o do substantial j u s t i c e ." W e hold t h a t pleadings and applications i n an administrative matter should a l s o be construed a s t o do substantial j u s t i c e . Assuming, f o r the moment, t h a t the application f a i l e d t o contain evidence on one specific point, t h a t existing banks i n the area were f a l l i n g short of providing adequate services, a s alleged by Western, it i s appropriate t o inquire a s t o whether substantial r i g h t s of Western were prejudiced thereby. ! Section 82-4216(7), R.C.M. 1947. I n Martello v. Darlow and Lovely, 151 Mont. 232, 236, 441 P.2d 175 (1968), it is stated: "* * * On appeal, prejudice is never presumed but it must affirmatively appear t h a t the e r r o r has affected a substantial r i g h t of the party on the merits of the case. (Conway v. Fabian, 108 Mont. 287, 89 P.2d 1022.)" Western contends it was denied r i g h t s of discovery by reason of the f a i l u r e of t h e application t o contain any evidence on the point. Western did not, however, a t any stage of the proceedings point out how further discovery would have a s s i s t e d it i n rebutting adverse evidence presented a t the hearing. More- over the evidence most damaging t o Western on the question of the adequacy of its services was the testimony of i t s own president, Lawrence F. Walton. Western has never suggested t o the Board o r t o the courts what further evidence it could have or would have presented on t h i s issue. W e note that subsequent to the hearing, Western asked and was granted the right t o submit additional evidence on another point, but offered no new evidence on t h i s issue. W e f a i l t o see where Western has been prejudiced, even i f the application omitted evidence on the one point as alleged. W e hold the application was sufficient t o give the Board jurisdiction t o proceed with the hearing. The Board and the d i s t r i c t court found that the applica- tion as f i l e d satisfied the requirements of the regulations. While it i s not necessary t o t h i s decision i n view of our holdings above, we w i l l discuss t h i s issue. Section 5-6U, R.C.M. 1947, prescribes the statutory minimum standards under which an application for a new bank is t o be determined and requires the Board t o adopt appropriate rules t o that end. Section 5-611, provides: "Rules adopted by board--new banks. The board s h a l l adopt rules necessary for the administration of t h i s act in accordance with the Montana Adminis- t r a t i v e Procedure Act [82-4201 t o 82-42251. "In particular, the board s h a l l adopt rules con- cerning the authorization of new banks. Such rules s h a l l contain minimum standards under which an application for a new bank s h a l l be determined in- cluding the following: "(1) a persuasive showing that there is a reason- able public necessity and demand for a new bank a t the proposed location; (2) that the bank w i l l be owned and managed by persons of good moral character and financial integrity, and w i l l be safely and soundly operated; "(3) a persuasive showing that the new bank w i l l have a sufficient volume of business t o assure solvency and that establishment of the new bank w i l l be i n the public interest." , Pursuant t o the statutory mandate, the Board adopted rules setting forth a number of requirements for applications including the specification that it contain " (c) evidence demonstrating a persuasive showing of public necessity and demand a s required by Rule 8-3.22(6)-S1OOOtl. MAC J 8-3.22(2)- P2230. Rule 8-3.22(6)-S1000 provided i n part: "8-3.22(6)-SlOOO PERSUASIVE S H O W I N G O F R E A S O N A B L E PUBLIC NECESSITY AND DEMAND. "(1) The applicants for authority t o organize a new bank must present t o the Board exhibits, research data, and detailed projections t o make a persuasive showing that there is a reasonable necessity and demand for a new bank a t the proposed location. Such information s h a l l include but not be limited to: "(d) Evidence that existing banks i n the area are falling short of offering adequate services t o a l l deserving bank customers i n the area." Rule 8-3.22(6)-S1000 appears t o require that evidence be contained i n the application i t s e l f . The statute, section 5.611, contains no such requirement, stating only that the Board should adopt rules containing "minimum standards under which an application for a new bank s h a l l be determined''. This tends t o infer that such evidence i f presented a t a hearing rather than i n the application i t s e l f would be sufficient. The regulation l i s t i n g the specific i t e m s (S1000) states merely that the applicant must present the specific information t o the Board without specifying that it be i n the application i t s e l f . Rimrock suggests the Board may not have intended t o require that the evidence i t s e l f be contained in the application, and i f it did, the regulation was beyond the statutory authority therefor. In view of our conclusions, it is unnecessary t o determine these issues. Rimrock contends that the application does, indeed, contain evidence which by inference tends t o show tha't existing banks in the area, particularly Western, were falling short of offering adequate service t o a l l deserving bank customers. W e take note of the basic application which contains a projection of the volume of business Rimrock might expect a t the end of its f i r s t three years i n business and the exhibit attached t o the application, which is an economic f e a s i b i l i t y study prepared by Rimrock's expert, Dean C. Coddington, of the research firm of Bickert , Browne, Codding- ton & Associates, Inc. of Denver, Colorado. W e summarize Rimrock's arguments on t h i s issue: 1. The application states that Western is the only commercial bank in the proposed institution's primary service area containing about 25,000 people. The f e a s i b i l i t y study s t a t e s that Western had not grown rapidly and had a low r a t e of market penetration in i t s area. From these facts the deduction follows that Western is falling short of offering adequate services t o a l l deserving customers in the area. I n other words, i f Western were offering adequate services t o a l l deserving customers, it would have had a greater market penetration and would have grown considerably faster. 2. The fact that Western is the only commercial bank i n an area containing some 25,000 people shows a lack of local area competition for the bank. Lack of competition may not be conducfiPe t o good banking services, and that combined with the slow growth r a t e tends t o indicate a failure t o offer services which the great majority of banking customers i n the area considers adequate, or a t l e a s t attractive enough t o motivate them t o bank there. 3. The f e a s i b i l i t y study contains t h i s comment: "Western Bank of Billings is the only commercial bank in the proposed institution's primary service area. Western Bank opened i n 1970 and, with $5.5 million i n September 1975 deposits, t h i s bank has not grown rapidly. This is partially attributable t o capitalization problems prior t o opening, owner- ship changes, and a relatively unattractive banking f a c i l i t y * * *." A t the hearing evidence was presented through Western's witnesses of continuing capitalization problems resulting in Western's inability t o ameliorate its drive-in problems, enlarge its parking l o t , and maintain an adequate supply of safety deposit boxes because of the statutory l i m i t on capital investment in r a t i o to the bank's capital structure. Evidence a t the hearing also illustrated how ownership changes of Western resulted i n an unfavorable a t t i t u d e i n the community, discouraging deserving customers i n the area from using the bank. 4. The application projects that within three years Rimrock would have deposits of $5.5 million and would have net profits in the third year of operation. This projected success tends t o indicate that other banks may not be offering adequate services t o a l l deserving customers or a new bank would not be so popular. 5. The application shows that the nearest downtown Billings bank is nearly four miles through c i t y s t r e e t s from ~imrock's location. The other banks are therefore not in a location adequate t o serve a l l deserving bank customers in the area. Testimony a t the hearing illustrated how important it is for small businessmen and some housewives t o have banking f a c i l i t i e s i n a convenient location. Without weighing the merits of any particular one of these points, we hold the Board and the d i s t r i c t court were not in error in finding that the application as f i l e d s a t i s - fied the requirements of the regulations. The second principal issue presented for review relates to whether the record contains sufficient evidence to support the conclusion of the Board and the d i s t r i c t court. Section 82-4216, R.C.M. 1947, provides for judicial review of agency action and so f a r as it relates to the suffi- ciency of the evidence provides: "(7) The court s h a l l not substitute i t s judgment for that of the agency as t o the weight of the evidence on questions of fact. * * * The court may reverse or modify the decision i f substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclu- sions or decisions are: "(e) clearly erroneous i n view of the reliable, probative and substantial evidence on the' whole record * * *.Ir This Court has repeatedly held that its function on appeal is t o determine whether there is substantial evidence in the record t o support the judgment. Strong v. Williams, 154 Mont. 65, 460 P.2d 90 (1969). Western makes no general challenge t o the sufficiency of the evidence t o f u l f i l l the minimum statutory standards con- tained i n section 5-611, under which an application for a new bank is t o be determined. It does challenge the sufficiency of the evidence presented, even a t the hearing, t o indicate the inadequacy of services t o the area of other banks. However the testimony of Western's president, without more, is suffi- cient a s t o its own deficiencies i n service. With respect t o other banks, the testimony a s t o the distances involved and the d i f f i c u l t i e s i n reaching them through c i t y t r a f f i c constitutes substantial evidence. W e find no merit i n Western's contentions a s t o the sufficiency of evidence. Western also objected t o the testimony of Rimrock's expert witness, Dean C. Coddington, and t o the admissibility of the feasibility study prepared by him. W e note that Western concedes that M r . Coddington was educationally and professionally qualified t o conduct a feasibility study and t o express an opinion thereon, but contends that some of the facts upon which he based h i s opinion were inaccurate or inadequate. W e conclude that whatever merit any particular point of attack may have, the attacks go t o the weight of the evidence rather than t o the admissibility of e i t h e r the testimony or the study. W e also note that the record contains a great deal of evidence from other witnesses which tends t o corroborate the factual basis for M r . Coddington's testimony. W e find the evidence presented amply f u l f i l l s each and every one of the statutory and regulatory requirements for a new bank. The third principal issue on appeal concerns Western's challenge t o the legality of the regulations under which the Board proceeded on the grounds they were adopted without a hearing, and,therefore, Western contends the Board did not have jurisdiction t o entertain the application of Rimrock or any other proposed bank. The circumstances were that a f t e r the Board published notice of i t s intent t o adopt MAC Rule 8-3.22(6)-S1000 i n 1973, it received a petition requesting a public hearing on the proposed rules. Section 82-4204, R.C.M. 1947, provides i n pertinent part: "Prior t o the adoption, amendment or repeal of any rule, the agency shall: "(a) Give written notice of its intended action. * * *, I' (b) Afford interested persons fourteen (14) days t o submit data, views or arguments, orally or in writing. In the case of substantive rules, opportunity for o r a l hearing s h a l l be granted i f requested by either ten per cent (10%) o r twenty-five (25) of the persons who w i l l be directly affected by the proposed rule * * *.I' The petition requesting the hearing contained 27 signatures without any recitation that any of the persons signing would be directly affected by the proposed rule. Investigation by the Board revealed that 16 of the signatories were connected with the F i r s t Citizens Bank of Billings and it was undetermined what interests, i f any, the remaining signatories had i n the proposed rules. The Board therefore rejected the form on the grounds that it was not a qualified petition and so notified the president of the F i r s t Citizens Bank, one of the signers. In h i s l e t t e r to the president, the Director of the Department of Business Regulations explained in d e t a i l the Board's reasons for adopting the proposed rule. Nothing further was heard from the signers, and the rule was adopted. It went unchallenged by anyone u n t i l Western raised the issue i n t h i s case on appeal t o the d i s t r i c t court three years l a t e r . In our opinion, there is no m e r i t t o western's challenge t o the validity of the rule making process. In any event, t h i s issue was raised for the f i r s t time on appeal from the administrative action. Section 82-4216(1), R.C.M. 1947, prohibits the raising on appeal of any question not raised before the administrative agency except the validity of the statute under which the agency i s proceeding, unless it i s shown to the satisfaction of the Court that there was good cause for failure t o raise the question before the administrative agency. Good cause was not shown here. The order of the d i s t r i c t court i s affirmed. W e Concur: . C Chief Justice I 2% t I Justices .

October 31, 1977

604b89bd-a4b7-42fc-ace2-10901fd365df

ENGEBRETSON v PUTNAM

N/A

13679

Montana

Montana Supreme Court

No. 13679 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 GERALDINE T. ENGEBRETSON, Plaintiff and Respondent, BRYCE C. PUTNAM and BETTE J. PUTNAM, Defendants, Counter-claimants and Appellant. Appeal from: District Court of the Fourth Judicial District, Honorable E . Gardner Brownlee, Judge presiding. Counsel of Record: For Appellant: Boone, Karlberg and Haddon, Missoula, Montana Sam E. Haddon argued, Missoula, Montana For Respondent : Skelton and Knight, Missoula, Montana Robert Skelton argued, Missoula, Montana Submitted: September 29, 1977 Decided: WGV - 4 1977 ' , ? -- U Filed: I V C , - , , M r . Justice Frank I. Haswell delivered the Opinion of the Court. Defendants appeal from a summary judgment granted t o plaintiff by the District Court, Missoula County, in her s u i t on a promissory note. Plaintiff Geraldine T. Engebretson was the owner of certain real property located i n Missoula County, Montana. O n October 29, 1970, she listed t h i s property for sale with Trail Realty owned by defendants Bryce C. and Bette J. Putnam. Defendants prepared a listing agreement for the property using a standard form l i s t i n g contract which plaintiff signed. Defendants l a t e r decided to purchase plaintiff' s property for themselves. On January 18, 1971, defendant Bryce C, Putnam executed a promissory note i n part payment, payable t o Geraldine T. Engebretson for $3,000 a t 8 percent interest due in one year. Plaintiff signed a warranty deed whereby she did "grant, bargain, s e l l and convey" her property to the Putnams. B y the same deed Engebretson convenanted that she would: "* * * forever WARRANT and DEFEND a l l right, t i t l e and interest in and t o the said premises and the quiet and peaceable possession thereof unto the [Putnams] * * * against a l l acts and deeds of [Enge- bretson] and a l l and every person and persons whom- soever lawfully claiming or to claim the same," [Bracketed material paraphrased.] The warranty deed stated Engebretson's grant was subject to a f i r s t mortgage in favor of the Missoula F i r s t Federal Building & Loan Association, which mortgage the Putnams agreed to assume and pay according t o its terms. A t the time Engebretson sold her property to the Putnams, it was subject to the liens of Special Improvement District No. 296 for engineering fees and Special Improvement District No. 304 for sewer. Prior t o the execution of the warranty deed, plaintiff had paid a l l matured special improvement d i s t r i c t installsreats, however $1,244 i n unmatured installments remained to be paid. The l i s t i n g agreement which defendants prepared for plaintiff indicated \ the property was subject to an annual special improvement d i s t r i c t payment of $21.50 for sewer installation. The warranty deed made no provision for the assumption of or proration of the unmatured payments by either party. Defendants l a t e r paid the $1,244 t o release the special improvement d i s t r i c t liens from the property. A s compensation for paying these installments, Putnams claimed a setoff against the amount owing on the $3,000 promis- sory note Bryce Putnam signed. Consequently, when the note matured on January 18, 1972, Putnams did not make any payment toward the amount due. In M a y 1972, they offered to pay Engebret- son an amount less than the $3,000 plus interest then due. She refused t o accept the lesser amount. On June 2, 1972, Engebretson filed a complaint against Bryce Putnam alleging Putnam executed the promissory note; that he failed t o pay the note upon maturity; and that the note provided for a reasonable attorney fee i n case of s u i t to recover it. She prayed for judgment for $3,000, interest and a reasonable attorney fee. Putnam filed an answer admitting the existence of the note and that he had made no payment on it, but alleging, as a defense, that the amount due on the note was subject t o a setoff for the special improvement d i s t r i c t installments he had paid. H e counterclaimed for a setoff of $1,244 and for a reasonable attorney fee. H e also moved to join h i s wife as a defendant and counter- claimant in the action. Plaintiff filed a reply t o defendants' counterclaim alleging,, among other things, that Bryce Putnam was a real estate broker; that she had listed her real property with him for sale; that a t the time plaintiff listed her real property with the defendants and a t the time she sold the property t o them, they knew of the unnsatured special improvement d i s t r i c t installments previonaiy assessed on the property. Each side moved for summary judgment. O n the basis of the pleadings, the exhibits thereto, and the memoranda of law submitted by the parties, the District Court granted summary judgment in plaintiff's favor and awarded her $1,450 i n attorney fees. De- f endant s appealed. Three issues developed on appeal: 1. Did the District Court e r r i n granting summary judgment? 2. Did the District Court e r r in denying defendants' counterclaim? 3. Did the District Court e r r i n awarding plaintiff attorney fees in the amount of $1,450. The purpose of the summary judgment procedure is to encourage judicial economy through the elimination of unnecessary t r i a l , Mont . delay and expense. Bonawitz v. Bourke, , 567 P.2d 32, 33, 34 St.Rep. 638, 640 (1977); Guthrie v. Dept. of Social & M o n t . Rehabilitative Services, , 563 P.2d 555, St.Rep. 255, 257 (1977). Summary judgment i s not a substitute for t r i a l , however, and is inappropriate when genuine issues of material fact remain t o be litigated. Rule 56(c), M.R.Civ.P. ; Duncan v. Rockwell Manufacturing Co., Mont . - , 567 P.2d 936, 938, 34 St.Rep. 821, 823 (1977). Additionally, whether a court should grant a motion for summary judgment or require a t r i a l rests in the sound discretion of the court even though the movant may have made out a case for summary judgment. 6 Pt. 2 Moore's Federal Practice 156.15[6] ; John Blair & Co. v. Walton, 47 F.R.D. 196 (1969). I f there is any doubt as to the propriety of a motion for summary judgment, the court should deny it. Fulton v. Clark, 167 Mont. 399, 403, 538 P.2d 1371, 1373 (1975); Kober & Kyriss v. Billings Deaconess Hospital, 148 Mont. 117, 122, 123, 417 P.2d 476, 479 (1966). During oral argument on appeal, certain facts were brought to light making it apparent that genuine issues of material fact remained t o be litigated. Summarizing from the pleadings and oral argument, p l a i n t i f f ' s allegations are: (a) that plaintiff listed her property with the defendant realtors for sale, thus creating a principal/agent relationship between plain- t i f f and defendants a t the time of the listing; (b) that defendants prepared both the l i s t i n g agreement and, a f t e r they decided to purchase the property themselves, the warranty deed; and (c) that a t a l l times defendants knew of the unmatured special improvement d i s t r i c t installments, yet no mention was made of them i n the warranty deed. The pretrial proceedings l e f t undecided such issues as: 1. Did the principaI/agent relationship between plaintiff and defendants s t i l l exist a t the time plaintiff sold her property to defendants? 2. What was the intent of the parties regarding payment of the unmatured special improvement d i s t r i c t installments? 3. Did defendants breach any fiduciary duty they may have owed plaintiff? This Court has previously held that summary judgment is usually inappropriate where the intent of the contracting parties is an important consideration. Fulton v . Clark, supra; Kober & Kyriss v . Billings Deaconess Hospital, supra. Because this and other questions heretofore mentioned remain at issue, we hold summary judgment was improperly granted in this case. Because this case must be remanded, we feel some direction to the District Court on the remaining two issues is appropriate. The first issue in essence is whether unmatured installments of a special improvement district assessment constitute an encum- brance upon the real property upon which they are assessed from the date the special improvement district assessment was levied, or from the date the individual installments of the assessment mature. By statute, a special improvement district assessment "shall constitute a lien upon and against the property upon which such assessment is made and levied" and the assessment attaches as a lien to the property assessed "from and after the date of the passage of the resolution levying such assessment * * * . " Section 11-2229, R . C . M . 1947. The only way in which the lien created by the assessment can be extinguished is by payment of the assessment including all penalties, costs and interest. Section 11-2229, R . C . M . 1947. Clark v . Demers, 78 Mont. 287, 254 P. 162 (1927) and State ex rel. Malott v . Board of Commissioners, 89 Mont. 37, 296 P. 1 ( 1 9 3 1 ) , relied on by plaintiff, do not stand for the proposition that special improvement district assessment installments become liens upon the property assessed only upon maturity of the install- ments. Clark and Malott are distinguishable from the instant case in that they dealt with irrigation district assessments rather than special improvement district assessments. Both kinds of assess- ments are statutorily controlled; thus, one must look to the statutes creating them to determine the time the lien of assess- ment attaches. The statutory provisions regarding special improvement dis- t r i c t s are set out i n sections 11-2201 through 11-2288, R.C.M. 1947. To create a special improvement d i s t r i c t , the c i t y council must f i r s t pass a resolution of intent and give public notice .thereof. After the protest time has elapsed, the council must pass a resolution actually creating the special improvement d i s t r i c t . Section 11-2207, R.C.M. 1947. The council then determines the entire cost of the proposed improvements and establishes a method by thich it shall assess the cost o f - the improvements against the property owners who are subject t o the assessment. Section 11-2214, R.C.M. 1947. B y a separate resolution, the council levies and assesses a tax upon a l l taxable property in the special improvement dis- t r i c t . This resolution contains a description of each l o t and parcel of land with the name of the owner i f known, the amount of each payment to be made, and the date when it becomes delinquent. The assessment may be paid i n equal annual installments spread over a term not exceeding twenty years. Section 11-2222, R.C.M. 1947. The statute under which irrigation d i s t r i c t assessments i n Clark were made, provided that the board of directors of each irrigation d i s t r i c t should make a yearly determination of the t o t a l amount of money needed for that year for the administrative expenses of the district. The board would then levy a proportionate amount of the yearly cost against each landowner i n the d i s t r i c t . The tax thus determined would become a lien upon the land and the lien would attach "as of the f i r s t Monday of March of that year". Laws of Montana 1921, Ch. 153, 522 (repealed 1929). The statutory schemes for special improvement d i s t r i c t s and for irrigation d i s t r i c t s thus differed i n two important ways: (1) the entire cost of the special improvement d i s t r i c t is made i n one determination and assessed accoedingly, whereas the irrigation d i s t r i c t assessment is determined yearly and the amount of the yearly assessment fluctuates according t o the needs of the d i s t r i c t ; and (2) the specific statutory times a t which the ass-nts attach to the property a s liens, i.e., the assessment date of the resolution levying the special improvement d i s t r i c t / versus "the f i r s t ~ & d a ~ of March of [each] year." Section 67-1617, R.C.M. 1947, provides that the term "encumbrances" includes taxes, assessments, and a l l liens upon real property, Therefore, a lien created by a. special improve- ment d i s t r i c t assessment is an encumbrance upon the property which dates from the passage of the resolution creating the assessment. The remaining issue involves what evidence is sufficient to support an award of attorney fees. The promissory note upon which plaintiff sued provided for recovery of a reasonable attorney fee i n case s u i t was brought to recover on the note, The only eddence plaintiff presented t o establish a reasonable attorney fee was a copy of her retainer agreement with her attorney. This was a contingent fee agreement authorizing her attorney to retain one-third of any monies received a s compensa- tion for h i s services. On the basis of this agreement alone, the court awarded plaintiff $1,450 a s a reasonable attorney fee. W e disapprove of an award of attorney fees based on t h i s type of documentation. W e have previously approved guidelines for such an award. Crncevich v. Georgetown Recreation Corp., 168 Mont. 113, 541 P.2d 56 (1975). Those zguidelines, which enumerated the items to be considered in making an award, include: " * * * the amount and character of the services rendered, the labor, time, and trouble involved, the character and importance of the litigation in which the services were rendered, the amount of money or the value of property to be affected, the professional skill and experience called for, the character and standing in the profession of the attorneys. * * * The result secured by the services of the attorneys may be considered as an important element in determining their value . " 168 Mont . 119,120. The retainer agreement between plaintiff and her attorney does not conform to the above requirements. The result of the negotiations between an attorney and his client as to their fee agreement is not controlling in fixing a reasonable attorney fee to assess against the opposing party. Such an award must be determined in accordance with the guidelines enumerated in Crncevich. The cause is reversed and remanded with instructions to proceed in accordance with this Opinion. Justice

November 3, 1977

edc41b1b-7314-4b42-8622-513ac9024a70

STATE v WILLIAMS

N/A

13769

Montana

Montana Supreme Court

No. 13769 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 THE STATE OF MONTANA, Plaintiff and Respondent, DIONISIO WILLIAMS, Defendant and Appellant. Appeal from: District Court of the Thirteenth Judicial District, Honorable Charles Luedke, Judge presiding. Counsel of Record: For Appellant: John L. Adams argued, Billings, Montana For Respondent: Hon. Mike Greely, Attorney General, Helena, Montana J. Mayo Ashley argued, Assistant Attorney General, argued, Helena, Montana Harold Hanser, County Attorney, Billings, Montana - * 7 2 7 Filed: L,. - - - ~ - Submitted: October 4, 1977 Decided : M r . Justice John Conway Harrison delivered the Opinion of the Court . Defendant Dionisio Williams was charged by a two count Information f i l e d October 25, 1976, with the crimes of carrying a concealed weapon and intimidation, both felonies. A jury t r i a l was held i n the d i s t r i c t court, Yellowstone County, on January 11, 1977. A t the close of t r i a l , the jury returned a verdict acquitting defendant of the crime of carrying a con- cealed weapon, but convicting him of the crime of intimidation. Defendant was subsequently sentenced t o serve five years i n the s t a t e penitentiary and has been incarcerated since early March 1977. Defendant appeals the conviction and the denial of h i s motion for a miswial made a t r t h e close of the s t a t e ' s case. The facts introduced by the s t a t e through testimony a t the t r i a l were, i n certain essential respects, a t variance with those offered by defendant i n h i s t r i a l testimony. The principal witness for the s t a t e was the complaining witness, Joe Thomas. Thomas t e s t i f i e d , over objection, that three weeks prior t o October 19, 1976, the date of the alleged crimes, he purchased $10 worth of the drug "speed" from de- fendant. The purchase was made "on credit". Defendant denied the sale of the drug, and stated he had, in fact, merely "loaned" $10 t o Thomas. On October 19 defendant saw Thomzs a t a Billings bar and demanded payment. Thomas was unable t o pay. Later that day Thomas, together with h i s g i r l friend and two others, were stopped for gas a t a self-service gas station. Defendant arrived a t the station in a car belonging t o and driven by h i s friend, Raymond Best. Defendant got out of the car and approached Thomas, again demanding payment of the $10. Thomas t e s t i f i e d that upon h i s explaining he could not get the $10, defendant opened h i s coat, exposing what appeared t o Thomas t o be the butt of a revolver and "said he was going t o drop me" i f pay- ment was not then made. Defendant, however, denied having a p i s t o l on h i s person a t the time, or that he threatened Thomas. I n any event, Thomas obtained $10 from h i s g i r l friend and immediately gave it t o defendant. A t the close of the s t a t e ' s case, defendant orally moved for a mistrial on the ground the court erred in permitting testimony concerning the drug transaction between defendant and Thomas. Defendant also moved t o dismiss the intimidation charge on the grounds of insufficiency of evidence o r , a l t e r - natively, for a direct verdict. A l l motions were denied. Defendant bases h i s appeal on two grounds: 1. Evidence of the alleged drug transaction was erron- eously permitted by the d i s t r i c t court. 2. The evidence was insufficient t o support the conviction of the crime of intimidation. Defendant contends the evidence pertaining to the alleged drug transaction was irrelevant and immaterial and should have been excluded a s being highly prejudicial. H e maintained the evidence had no probative value and operated t o place defendant i n the position in the eyes of the jurors as a "pusher" who would by inference possess propensities for violent criminal behavior. Further, the evidence had minimal o r no value i n establishing the elements of the crime of intimidation, and should have been excluded, or a mistrial granted. A fundamental principal, applicable t o every criminal proceeding, is that the evidence must be relevant t o the facts in issue a t the t r i a l and must logically tend t o prove or dis- prove such facts. Evidence of collateral facts which f a i l s t o afford any reasonable presumption or inference as t o a principal fact or matter i n dispute, o r evidence too remote, i s irrelevant and inadmissible. State v. Sanders, 158 Mont. 113, 489 P.2d 371 (1971). I n Sanders, defendant was charged with three counts of assault. During the course of t r i a l testimony was presented t o the jury which, among other things, indica ted defendant previously threatened a police officer upon receiving a speeding citation, wrongfully failed t o pay wages due an employee, made improper use of credit cards, and possibly burglarized h i s own business. This Court, i n applying the above mentioned rule, concluded : "* * * The admissibility of such collateral, irrelevant, and prejudicial evidence i n a criminal proceeding constitutes reversible error ." 158 Mont . 118. Here, admission of evidence of the underlying reason for the $10 debt, the alleged drug sale, was such a s t o have made an impression on the jury and was highly prejudicial t o defendant. Given the obvious collateral nature of such evi- dence and the prejudice engendered thereby, its admission over proper objection was error. Defendant's motion for a mistrial should have been granted. I n view of the Court's finding on defendant's f i r s t issue, it i s unnecessary t o discuss the second issue. Accordingly, the conviction i s reversed. I t i s ordered that defendant be released from confinement at the Montana state prison. The case i s dismissed. W e Concur: i / & fi Chief Justice

October 18, 1977

ec4f9c28-46a3-4d01-8b3d-4fe3d27eadcd

KUDRNA v COMET CORP

N/A

13572

Montana

Montana Supreme Court

No. 13572 IN THE SUPREME COURT OF THE STATE OF MONTANA JOSEPHINE KUDRNA et al., Plaintiffs and Appellants, COMET CORPORATION et al., Defendants and Respondents. Appeal from: District Court of the Seventh Judicial District, Honorable L. C. Gulbrandson, Judge presiding. Counsel of Record: For Appellants: Gene Huntley argued, Baker, Montana Maurice R. Hunke, Dickinson, North Dakota For Respondents: Crowley, Haughey, Hanson, Gallagher & Toole, Billings, Montana Bruce Toole argued, Billings, Montana Anderson, Symmes, Forbes, Peete & Brown, Billings, Montana Weymouth Symmes argued, Billings, Montana Submitted: June 9, 1977 Mr. Justice Daniel J. Shea delivered the Opinion of the Court. his is an appeal from a judgment in favor of defendants in a survivorship and wrongful death action entered on a jury verdict in the ~istrict Court, Dawson County. Plaintiff further appeals from an order denying plaintiff's motion for a directed verdict, and from an order denying motion for judgment notwithstanding the verdict or in the alternative a new trial. Gilbert J. Kudrna was killed while riding as a rear seat pas- senger in a 1975 Dodge van owned by the McQuade Distributing Co., Inc., of Bismarck, North Dakota, and driven at the time of the col- lision by Gerard McQuade. McQuade was also killed. Two other pas- sengers riding in the McQuade van were not injured. The collision was with a semi-truck and trailer leased by the Comet Corp. Gilbert Kudrna's widow, Josephine Kudrna, brought a survivorship action on behalf of her husband's estate and a wrongful death action on behalf of herself and four children. The events leading to the collision were: On February 7, 1975, Interstate 90 was closed between Laurel, Montana on the east and Livingston, Montana on the west because of winter storm conditions. On the following morning the highway was reopened for traffic in both directions. It was clear and sunny but very cold; the tem- perature was approximately five degrees below zero Fahrenheit. The surface of the highway in the general area where the collision oc- curred was snow packed and slippery; the pavement was covered and the center line obscured. The area where the collision occurred is approximately 6.5 miles west of Big Timber, Montana, on U.S. Highway 10, which is, at this location, a two lane undivided asphalt paved highway that is a interconnecting portion of Interstate 90. At about 9 o'clock a.m. a semi-truck leased and operated by the defendant Mid-West Coast Company, driven by defendant James Kennely with defendant Richard Hendrick as codriver, left Livingston, Montana proceeding in an easterly direction on Interstate 90. It was followed a short time later by a semi-truck leased and operated by the defendant Comet Corp., driven by defendant Robert D. Hamblen, also traveling east on Interstate 90. Approximately 6.5 miles west of Big Timber, the first truck (Mid-West Coast) slowed to a stop in its eastbound lane of traffic. Its brakes had "frozen" and its driver was unable to release them. Because of snow kicked up at the rear of the vehicle as it traveled down the highway, the rear brake and clearance lights of the Mid-West Coast truck were completely covered by the time the truck began to slow. As the second truck (Comet) approached, at a speed of between 40 and 50 miles per hour, its driver could see the Mid-West Coast truck from a distance of approximately 1700 feet. At some point between 100 and 500 feet behind Mid-West Coast's truck, the Comet driver realized Mid-West was not moving and that his truck could not be stopped in the distance separating them. Deciding to pass, rather than either going into the ditch or running into the rear of Mid-West Coast's trailer, Comet's driver turned into the westbound lane as he pulled out to get around the stationary vehicle. As he began his passing maneuver, Comet's driver looked up the westbound lane for oncoming traffic and saw the McQuade van approaching at a distance he estimated to be three quarters of a mile. Comet's semi-truck passed the Mid-West Coast truck and was completing the motion of returning to its proper lane, when the left front side of the McQuade van collided with the left side of comet's trailer at its rearmost axle, near the back end of the trailer. The exact point of impact on the highway could not be deter- mined because of the snow cover on the surface of the road, but the highway patrol investigation found the impact to be "near" the center line of the highway. The driver of the McQuade van and Gilbert Mudrna were killed as a result of the collision. Two other van passengers were not injured. Neither the driver nor the codriver of the Comet semi- truck was hurt. The trailer was damaged, its rear axle assembly torn loose by the impact of the collision. On July 8, 1975, the estate, widow and children of Gilbert J. Kudrna brought suit against Comet Corp. and its driver; Mid-West Coast Company and its two drivers; and McQuade Distributing Co., Inc., alleging that the death of Kudrna had been proximately caused by the negligence of the defendants. Trial of the cause began on the June 7, 1976. Plaintiffs and defendant McQuade Distributing Co., Inc., settled upon a covenant not to sue and the action against McQuade was ordered dismissed on June 8, 1976. On June 11, the jury found in favor of defendants. Judgment was entered on the verdict. Following the District Court's denial of plaintiffs' motion for judgment notwithstanding the ver- dict or alternatively, for a new trial, plaintiffs appealed. The issues raised for review are: (1) Whether the District Court's grant to defendants Comet Corp. and Mid-West Coast Company of a total of eight peremptory challenges constitutes reversible error? Defendants contend they had interests and defenses antagonistic in fact and thus were entitled to four peremptory challenges each. (2) Whether the District Court's refusal to admit an allegedly res gestae statement offered by plaintiffs is reversible error? (3) Whether the District Court should have directed a verdict of liability against Comet Corp., or should have granted plaintiffs' motion for judgment notwithstanding the verdict or for a new trial? Comet Corp. contends the issues of sudden emergency and proximate cause entitled the case to go to the jury. (4) Whether the District Court should have directed a verdict against Mid-West Coast Company or should have granted plaintiffs' motion for judgment notwithstanding the verdict or for a new trial as against Mid-West Coast? Mid-West Coast contends that, even as- suming negligence for statutory safety regulations, the issue of proximate cause was a jury question. Issue ( 1 ) . Montana's jury challenge statute, section 93-5010, R.c.M. 1947, provides in part: " * * * Challenges to individual jurors are for cause or peremptory. Each party is entitled to four peremptory challenges * * *." Plaintiffs rely on Mullery v. Great Northern Ry. Co., 50 Mont. 408, 148 P. 323 (1915), and cases following Mullery, where this Court allowed a total of four peremptory jury challenges to multiple defendants. Plaintiffs contend both defendants in the pre- sent action together constitute a "party" and should have been allowed no more than four peremptory challenges between them. In a recent decision, Leary v. Kelly Pipe Co., 169 Mont. 511, 549 P.2d 813, 816, 33 St.Rep. 413, 416 (1976), this Court stated: " * * * Mullery stands for the proposition that under our jury challenge statute * * * the words 'each party' in reference to the permitted four peremptory challenges means 'each side' unless the positions of the codefendants are hostile to each other. The opinion suggests that hostility between nominal defendants may be shown 'by plead- ing, representation, or evidence.'" Leary expressly overruled an earlier decision, Ferron v. Intermountain Trans. Co., 115 Mont. 388, 143 P.2d 893 (1943), to the extent that Ferron may be interpreted as requiring a collective total of four peremptory challenges irrespective of the number making up either parties plaintiff or parties defendant. In Annotation - Jury: NUMBER OF PEREMPTORY CHALLENGES ALLOW- ABLE IN CIVIL CASE WHERE THERE ARE MORE THAN TWO PARTIES INVOLVED, 32 ALR3d 747, 761, it is stated: "In the absence of a statutory provision expressly requiring parties to join in peremptory challenges, it has been held or recognized that where it is determined that the interests of multiple parties are diverse, or their respective defenses are dif- ferent or hostile, each of the multiple parties is entitled to the full number of peremptory chal- lenges allowed by law to a 'party'." From the earliest stages of this action, Comet Corp. and Mid-West Coast Company shared neither an identity of interest nor a common defense. Each was charged with a separate act of negligence alleged to have proximately caused the collision, and each presented a separate defense. In their respective answers, and in the pretrial order, Comet and Mid-West each maintained the other's negligence caused the collision. During trial, each defendant's case tended to place responsibility on the other. These defendants had interests and defenses antagonistic in fact. The District Court recognized this hostility and properly allowed each defendant four peremptory challenges. Issue (2). This issue questions the exclusion of a statement made between two and ten minutes before the collision by Hector Rogers, who was eastbound on Interstate 90 when he was passed by Comet's semi-truck. Immediately after he was passed, Rogers exclaimed to passengers in his vehicle, with respect to the Comet vehicle, "you wait and see; just a few miles down the road he'll either be in the ditch or have killed someone." This statement was ruled inadmissible by the District Court. Plaintiffs contend it tends to show that Comet's truck was traveling too fast at the time of the collision, and it should have been admitted as within the res gestae exception to otherwise objectionable testimony. Section 93-401-7, R.C.M. 1947, states: "Where, also, the declaration, act, or ommission forms part of a transaction, which is itself the fact in dispute, or evidence of that fact, such declaration, act, or ommission is evidence, as part of that transaction." This Court has held on several occasions that statements made from one to ten minutes after an accident may be admissible as part of the res gestae. In Blevins v. Weaver Const. Co., 150 Mont. 158, 164, 432 P.2d 378 (1967), this Court stated: " * * * Declarations relative to a transaction * * * must be deemed competent when they are so connected with the main transaction as to form a part of it. Callahan v. Chicago, etc., R. Co., 47 Mont. 401, 133 P. 687 [1913]; * * * Tanner v. Smith, 97 Mont. 229, 33 P.2d 547 [1934]". Plaintiffs and Comet Corp. are in conflict with respect to whether Rogers' statement is sufficiently "connected with" the trans- action involved in the present action to be within the res gestae exception. The District Court granted a motion in limine to prevent any reference to the statement during the trial. In Sullivan v. Metropolitan Life Ins. Co., 96 Mont. 254, 267, 29 P.2d 1046 (1934), this Court stated: " * * * Whenever a question of fact arises upon conflicting evidence as to whether declarations are a part of the res gestae or depends upon con- tradictory inferences, either of which may fairly be drawn from such evidence, the solution of the question of admissibility of the evidence must in every case be left largely to the sound legal discretion of the trial court, subject to review only in the case of manifest abuse." While the collision occurred on a two lane portion of highway, the Rogers vehicle was passed by the Comet truck as the two vehicles were traveling on four lane Interstate 90. Rogers testified the statement was made at a point two miles from the scene of the colli- sion. However, testimony of the investigating highway patrolman, indicated the collision occurred at least 6.5 miles east of the termination of the four lane portion of highway. Rogers would have been passed at least that far from the scene of the collision between the McQuade van and the Comet truck, on a portion of highway where driving conditions were different from those prevailing in the area of the collision. We cannot say the discretion of the District Court was abused; the testimony was properly excluded. Issue (3). Plaintiffs question whether the evidence shows Comet Corp. and its driver Robert D. Hamblen liable as a matter of law. Plaintiffs contend Gilbert Kudrna's injuries and death were proximately caused by these defendants' failure to observe highway traffic regulations, and therefore, the District Court should have directed verdicts of liability against them. Plaintiffs rely on a series of decisions where this Court held the following driver inrear.endcollision cases negligent as a matter of law for following too closely, in violation of section 32-2160(a), R.C.M. 1947, which provides: "(a) The driver of a motor vehicle shall not follow another vehicle more closely than is reasonable and prudent, having due regard for the speed of such vehicles and the traffic upon and the condi- tion of the highway. " Plaintiffs contend Comet Corp. would have been negligent per se had it collided with the Mid-West Coast truck, and argue that Comet should not escape responsibility for violating the duty im- posed by this statute merely because it moved over into the oncoming lane rather than striking the Mid-West Coast truck. Plaintiffs also contend that when the Comet truck driver pulled over into the opposing lane of traffic without looking for oncoming traffic and assuring himself he could pass in safety, he violated section 32-2155, R.C.M. 1947. Comet Corp. contends any statutory violations were excused by a sudden emergency created by the immobilized Mid-West Coast truck, and, in any event, the proxi- mate cause of Kudrna's death was not due to the negligence of the driver of the Comet truck. Comet contends the sole proximate cause of Kudrna's death was the negligence of the immobilized Mid-West Coast truck. Cases cited by plaintiffs involve various situations where liability was ultimately imposed as a matter of law or where statutory violations amounted to contributory negligence as a matter of law. However, none involve a consideration of the sudden emergency rule asserted in behalf of defendant Comet. In Custer Broadcasting Corp. v. Brewer, 163 Mont. 519, 522, 515 P.2d 257 (1974), this Court held a driver who collided with the vehicle ahead negligent as a matter of law for following too closely. The defendant testified that as he was driving on the highway between Miles City and Billings, Montana, snow kicked up by other vehicles obscured his vision and he did not see plaintiffs' vehicle until the impact. There, as in the present case, the jury returned a verdict for the defendant. This Court reversed, and held that a directed verdict should have been granted in favor of the plaintiffs. This Court in Farris and Seneca1 v. Clark, 158 Mont. 33, 37, 487 P.2d 1307 (1971) held the District Court properly granted the plaintiffs' motion for summary judgment on the issue of liability against the defendant, who collided with a vehicle he was attempting to pass. Defendant was held liable as a matter of law for following too closely. In Rader v. Nicholls, 140 Mont. 459, 462, 373 P.2d 312 (1962), this Court affirmed the District Court's grant of the defendants' motion for nonsuit, holding that plaintiff's conduct in pulling out to pass another vehicle within 100 feet of an intersection established contributory negligence as a matter of law. The controlling statute, section 32-2156, R.C.M. 1947, prohibits driving on the left side of the highway when approaching within 100 feet of an intersection. There, we stated: " * * * we have long been committed to the doc- trine that the violation of a statute enacted for the safety of the public is negligence per - se * * *." 140 Mont. 462. 7 In Hurly v. Star Transfer Co., 141 Mont. 176, 182, 376 P.2d 504 (1962), the driver of a semi-truck backed his rig onto the high- way so that a portion of the trailer extended into the oncoming lane where it was struck by a vehicle driven by plaintiff's decedent. The trial court granted a directed verdict on liability for defend- ant's failure to keep its vehicle in its proper lane. This Court affirmed stating: "Since * * * defendant's driver was negligent as a matter of law, the case, as to those questions, presented only a question of law. When a case presents only a question of law a directed verdict is proper. Section 93-5205, R.C.M. 1947; Richardson v. Crone, 127 Mont. 200, 258 P.2d 970." 141 Mont. 182, 183. While Comet Corp. does not argue with these cited cases, it contends they do not apply here because Comet truck driver's conduct was justified by a sudden emergency and, in any event, the jury was entitled to find that any statutory violations were not the proximate cause of Kudrna's death. To constitute negligence per se, a statu- tory violation must also be the proximate cause of the injuries sustained. However, we do not agree that the driver's conduct was justified by a sudden emergency. The evidence in this case shows that Comet's driver noticed the Mid-West Coast truck ahead of him near the the collision scene, from a distance of approximately 1700 feet. It was not until Comet was within four to five hundred feet of the Mid-West Coast truck, and closing the gap at a speed of forty to forty-five miles per hour, that Hamblen realized the truck ahead was stopped or moving only very slowly. He testified as to what occurred at that time: "Q. Do you recall seeing anything at all about the roadway ahead of [the Mid-West Coast truck] east and the half or three quarters of a mile east to the Mid-West Coast truck? A. No, sir. "Q. Do you think that you saw just a clear road- way then? A. I wasn't looking at the roadway, I mean as far as to see what was in it or if it was clear or not. "Q. What were you looking at? A. At the truck in front of me. "Q. Now, what did you do from that point when you were four to five hundred feet behind the Mid- West Coast truck and realized that it was stopped? What did you do next? A. When I realized that it was stopped you have to make a decision whether to ditch it or -- "Q. Decision about what? A. A decision; I first of all, I tapped my bralres and no way could I stop without colliding with the back end. "Q. Why not? A. I was too close at that point." It is clear the Comet truck driver paid no attention to the stalled Mid-West Coast truck until he was so close he could not stop without rear-ending it. It was then he made his choice to pull out into the opposite lane of traffic and attempt to pass the Mid-West Coast truck. Comet does not argue that it did not follow the Mid-West Coast truck too closely, but rather, that it should not be held negligent for following too closely because the unanticipated stop of the Mid-West Coast truck created a condition of sudden emer- gency. However, we hold the doctrine of sudden emergency does not apply in this situation. This Court has recognized the doctrine of sudden emergency, but a party asserting sudden emergency cannot obtain the benefit of that rule where the emergency itself has been created by the actor's own negligent or other tortious conduct. See: Erickson v. Perrett, 169 Mont. 167, 545 P.2d 1074, 33 St.Rep. 109 (1976); 2 Restatement of Torts 2d 1[296, Comment d; Peabody v. Northern Pacific Railway Co., 80 Mont. 492, 497, 261 P. 261 (1927); Marsh v . Ayers, 80 Mont. 401, 260 P. 702 (1927); Maynard v. City of Helena, 117 Mont. 402, 160 P.2d 484 (1945). In the present case, the Comet truck driver created his own emergency. Although the stalled Mid-West Coast truck did present an obstacle to the Comet truck's progress, it did not suddenly appear in front of the Comet truck. The situation confronting the Comet truck driver was "sudden" only with respect to his realization that the Mid-West Coast truck was not moving and that he was then too close behind it to avoid a collision, if he remained in the east- bound lane. Comet argues that its driver's failure to determine whether the Mid-West Coast truck was stopped or moving until a few hundred feet behind it, was the fault of Mid-West Coast. We disagree. The fact that Mid-West Coast's rear lights were not visible does not excuse the Comet truck driver's failure to follow the vehicle ahead at a safe distance. Sufficient distance separated the two trucks when Comet's driver first noted the Mid-West Coast truck near the collision scene on the highway ahead to enable him to approach safely. It was a clear and sunny day. Surely a motorist has a duty to see that which is in plain sight and he is presumed to see that which he could see by looking. Marsh v. Ayers, supra; Boepple v. Mohalt, 101 Mont. 417, 54 P.2d 857 (1936); Nissen v. Johnson, 135 Mont. 329, 339 P.2d 651 (1959). At most, any negligence of Mid- West Coast would have been a concurring proximate cause. In Transport Indemnity Company v. Page, Okl. 1963, 406 P.2d 980 the court ruled in a similar case that sudden emergency did not apply. In the Oklahoma case the first in a string of three eastbound trucks stopped at the entrance of a narrow bridge to allow the on- coming plaintiff sufficient clearance to pass through. The second truck was able to stop behind the first, but the third could not; he attempted to pass and collided with the plaintiff's vehicle. The court rejected the contention of the passing truck that its maneuver was excused because of the sudden emergency caused by the stopping of the preceding trucks, stating: " * * * truck # 3 , by virtue of its own acts, i.e., following too closely, failing to maintain a proper lookout and failing to maintain a proper speed * * * had placed himself in a position where he could not stop within the assured clear distance ahead." 406 P.2d 983. The same can be said of the Comet truck driver's conduct in the present case. Also, in a similar casetothe present case, ~odriguez v. Savage Trans. Co., 77 C.A.2d 162, 175 P.2d 37 (1946), a string of traffic had to slow down; the third truck in the string did not signal to slow down; and, the fourth truck, not having time to slow down without rear-ending the third truck, pulled out into the oppo- site lane of traffic and struck the plaintiff who was coming from the other direction. The case was tried to the court and it found the third and fourth trucks were concurrently negligent in causing plaintiff's injuries. The third truck was negligent in not sig- nalling to slow down and the fourth truck was negligent in following too close and in passing the third truck when it was not safe to do so. On appeal the fourth truck argued that the collision was ex- cused by the unanticipated slowing down of the truck immediately ahead. In affirming judgment for plaintiff, the court stated: " * * * these defendants assume that [the driver of the following truck] was proceeding in a reasonable manner just prior to the accident. Based on this erroneous premise, they then argue that [the driver] was faced with a sudden peril and that his course of conduct was reasonable and prudent under the circumstances." 175 P.2d 41. Here, Comet also argues from an erroneous premise that it was pro- ceeding in a reasonable manner just prior to the accident. The facts are to the contrary. While we do not reject the concept of sudden emergency, we emphasize that it has limited application in the law of negligence, and trial courts should be very cautious in instructing the jury on sudden emergency. In Finley v. Wiley, 103 N.J. Super. 95, 246 A.2d 715 (1968), the court criticized the sudden emergency rule: "Further we entertain grave doubt whether a sudden emergency charge should ever be given in an ordinary automobile accident case. There is a modern view that it is argumentative, unnecessary, and confusing, and should be eliminated. * * * " * * * defendant was faced with no more than an everyday traffic problem for which he should have been prepared. The ordinary rules of negligence were applicable and afforded a sufficient gauge by which to appraise his conduct." (Emphasis added.) Further, this Court in Erickson v. Perrett, 169 Mont. 167, 545 P.2d 1074, 33 St.Rep. 109 (1976) cited Prosser on Torts, 4th ed., p. 170, with approval as to the limited application of the rule: "A further qualification [to the sudden emer- gency rule] which must be made is that some 'emergencies' must be anticipated, and the actor must be prepared to meet them when he engages in an activity in which they are likely to arise. Thus under present day traffic conditions, any driver of an automobile must be prepared for the sudden appearance of obstacles in the highway * * *." (Bracketed material added.) Clearly, the trial court was in error to instruct the jury on sudden emergency. As we discuss hereinafter, this instruction was ultimately prejudicial to Comet Corp. as well as to plaintiffs. Plaintiffs further contend that in addition to following too closely, the Comet truck failed to pass in safety, in violation of section 32-2155, R.C.M. 1947, which provides in pertinent part: "No vehicle shall be driven to the left side of the center of the roadway in overtaking and passing another vehicle proceeding in the same direction unless such left side is clearly visible and is free of oncoming traffic for a sufficient distance ahead to permit such overtaking and passing to be completely made without interfering with the safe operation of any vehicle approaching from the opposite direction or any vehicle overtaken. * * *". Comet Corp. argues its truck driver did not violate section 32-2155, and further, that any statutory violation of the truck driver is also excused by the doctrine of sudden emergency. Testimony previously quoted, indicated the Comet truck driver did not look for approaching traffic as he drew near to the Mid-West Coast truck. At a point approximately four hundred feet behind the Mid-West Coast truck, he decided to pass, having deter- mined his truck could not be stopped in the distance remaining be- tween them. Comet's truck driver testified as to what occurred from the point he made his decision to pass: "Q. When you made that decision what did you do? Did you do anything to implement the de- cision that you made? A. I started turning out into the eastbound or -- correction, west- bound lane. "Q. First you started turning out into the westbound lane, is that correct? A. Yes. "Q. And that means that you were crossing or had crossed the center line; is that also correct? A. Well, I started to at that point I started to cross the center line; yes, sir. "Q. How much of your rig had already crossed the center line at that point? A. I have no way of -- I mean -- "Q. But you definitely were partially into the westbound lane. Is that a fair statement? A. Yes, sir. "Q. What did you do next at that point? A. Well, I looked up the westbound lane to see if there was oncoming traffic. "Q. Was that the first time you looked for on- coming traffic? A. Yes, sir. "Q. You didn't look for oncoming traffic before you made your decision to pass? A. Well, at the same time you're pulling out you're looking ahead. "Q. But still you have just stated and you said two or three times you first made your decision to pass and then you pulled out into the west- bound lane and then you looked for westbound traffic. A. This all happened in one motion." Comet Corp. argues that this "one motion" of its driver was not in violation of section 32-2155, since the driver thought he had ample distance between his truck and the McQuade van which he first noticed after he pulled out and was committed to passing the Mid-West Coast truck. Comet Corp. seeks to excuse the fact its truck driver did not determine whether the oncoming lane was clear before his passing maneuver began on the ground that he was con- fronted with the sudden emergency of the Mid-West Coast truck stopped on the highway ahead of him. We have heretofore disposed of the sudden emergency argument and also reject it here, for the same rea- sons. The driver's negligence created his own emergency. Comet Corp. is not relieved of responsibility to pass in safety. In McDonough v. Smith, 86 Mont. 545, 550, 551, 284 P. 542 (1930), this Court stated: "The person passing is negligent if he so care- lessly directs or manages his automobile that a collision results, or if he attempts to pass at a time or under conditions which are not reasonably safe. * * * " * * * It is also negligence on the part of one to drive at a rapid rate of speed so close to a car ahead that, if the driver of the latter slows down, it becomes necessary for him to turn to the left to avoid striking it, and particularly when in doing so he must turn in front of a vehicle coming from the opposite direction." 86 Mont. 550, 551. To the same effect, see Cowden v. Crippen, 101 Mont. 187, 207, 53 P.2d 98 (1936); State v. Biering, 111 Mont. 237, 240, 107 P.2d 876 Comet Corp.'s last argument relating to the failure to obey the rule of assured clear distance ahead, and to the failure to pass in safety, is that even if there was negligence on the part of its driver, the jury could still reasonably find that the collision between the Comet Corp. truck and the McQuade van was not proximately caused by the violation of any highway traffic statutes. Accordingly, Comet Corp. argues, a directed verdict in plaintiffs' favor would be improper. We do not accept this argument. The facts of this case show negligence and proximate causation. Comet Corp. argues the jury was entitled to determine that the collision took place after the Comet truck completely passed the Mid-West Coast truck and had swung back in its own lane of traffic. The plain implication of its argument is that the jury was entitled to determine the McQuade van, at the last moment, veered over into the wrong lane of traffic and struck the rear trailer wheels of the Comet truck. Comet Corp.'s argument is based on the fact the high- way patrolman could not find the precise point of impact in relation to the center line. The investigating highway patrolman could not rely on skid marks to reconstruct the event and pinpoint the impact with respect to the center line of the highway because the center line was not visible until the snow had been scraped away. The evidence is overwhelmingly against the jury making such a "reasonable" conclusion. The highway patrolman could only estimate the point of impact; he testified that it was "approximately at the center line of the highway." The driver of the Mid-West Coast truck could not see the impact as his view was shielded by Comet's trailer. However, he did testify that although the Comet truck had returned substantially to the eastbound lane when he heard the impact, the trailer's left rear wheels were still on the north (westbound) side of the center line when the impact occurred. The Comet truck's relief driver, Roy Huestess, who was riding in the cab at the time of the collision, testified that at the time of impact the trailer was not in a straight line with the tractor, that the left rear of the trailer was "one or two feet" farther north than the front of the trailer. The driver of the Comet truck , Hamblen, testified concerning his belief as to the point of impact: "Q. Do you, from the location of your trailer and the recollection you have of where the two vehicles were, where do you think the impact occurred with respect to the center of the road? "A. To the best of my knowledge it would be -- again you can't use center line -- it would be to the center of the road somewhat; I don't know exactly how you would say which side. There was no center line on the road as we know it. "Q. That is what you mean today when you say that you think it occurred at the center line? You don't mean to say that as an exact statement on your part? A. No. That is approximately. I don't know the exact center of the road. Like I say, we don't know where the center line was. "Q. Even though you don't know where it occurred then exactly you're satisfied that the McQuade van was in its proper driving lane at all times that - . - - you observed it? A. When it was coming toward me, "Q. Until it passed your tractor? A. Yes, sir." (Emphasis added.) Victor Vetter, who was sitting in the right front passenger seat of the McQuade van at the time of the collision, testified that as the Comet Corp. rig came around Mid-West Coast, its trailer came to the tractor around at an angle/so that at the time of the collision, Comet's trailer was "mostly" in the westbound lane. Ernest Ibach, another passenger in the McQuade van, was sitting in the rear seat when the collision occurred. He testified the passing Comet truck was "way over on our side of the lane" and appeared to be jackknifing when the McQuade van and Comet's trailer collided. From this evidence we conclude that Comet Corp. and its driver, Robert D. Hamblen, were liable as a matter of law. The District Court should have granted a directed verdict against them. This negligence started when Comet's truck driver carelessly placed himself in a position of not being able to stop behind the Mid-West Coast truck without colliding with it, in violation of section 32- 2160(a), R.C.M. 1947. It continued when the Comet truck driver, in an effort to avoid a rearend collision with the stalled Mid-West Coast truck, without first looking to see if he could pass safely, pulled into the westbound lane, in violation of section 32-2155. This negligence persisted right up to the moment of impact with the McQuade van. The evidence is overwhelming that the Comet Corp. truck was in the wrong lane of traffic at the time of impact. Even if we were to assume some negligence on the part of the driver of the McQuade van, this negligence could not be imputed to plaintiff's husband who was a passenger. Wolf v. O'Leary, Inc., 132 Plont. 468, 318 P.2d 582 (1957). Moreover, any such negligence would at most be a concurring proximate cause of the accident and Comet Corp. and its driver would still be liable. Halsey v. Uithof, 166 Mont. 319, 532 P.2d 686 (1975). Plaintiffs' final issue is whether Mid-West Coast was liable as a matter of law in failing to keep its brakes in proper working order in violation of section 32-21-143.3, R.C.M. 1947; in failing to keep its brakes from freezing; and, in failing to display brake lights and keep them free from snow. The trial court properly refused to grant a directed verdict in plaintiffs' favor on this issue. Even assuming the statutory violations as asserted by plaintiffs, whether such violations proxi- mately caused Kudrna's death was a question of fact for the jury to determine. Sztaba v. Great Northern Ry., 147 Mont. 185, 411 P.2d In Halsey v. Uithof, supra, this Court stated as to proximate cause and intervening cause: "We agree with the proposition that where one has negligently caused a condition of danger, he is not relieved of responsibility for damage caused to another merely because the injury also involved the later misconduct of someone else. Eut, this is true only if both negligent acts are in fact concurring proximate causes of the injury; and it is not true if the later negligence is an indepen- dent, intervening sole cause of the incident. Boepple v. Mohalt, 101 Mont. 417, 54 P.2d 857. "In determining whether the negligence in creating a hazard (the truck stalled on the highway) was a proximate cause of the accident, this test is to be applied: Did the wrongful act, in a natural, continuous sequence of events, which might rea- sonably be expected to follow, produce the injury?" 166 Mont. 327, 328. We cannot say as a matter of law that the stalled Mid-West Coast truck was a concurring proximate cause of the collision between the Comet Corp. truck and the McQuade van. Here there were inter- vening acts between any alleged statutory violations by the Mid-West Coast truck and the actual collision. Since the causal connection between Mid-West Coast's truck stopping on the highway and the sub- sequent collision between the other two vehicles was a question of fact, the trial court did not err in presenting the issue of Mid- West Coast's liability to the jury. It was error, however, to instruct the jury on the sudden emergency doctrine in a manner which could have allowed the jury improperly to apply the doctrine to the conduct of Mid-West Coast. The court's Instruction No. 21 states: "You are instructed that when a person is faced with a sudden emergency which is not created by his own negligence, his conduct is to be tested by what an ordinarily prudent person would have done under the same or similar circumstances, and he is not chargeable with negligence for failing to adopt the most judicious course as disclosed by subsequent events." This instruction correctly states the sudden emergency doctrine as it has been adopted by this Court. See: Peabody v. Northern Paci- fic Railway Co., 80 Mont. 492, 261 P. 261 (1927); Maynard v. city of Helena, 117 Mont. 402, 160 P.2d 484 (1945). While correct as an abstract statement of the law, Instruc- tion No. 21 as given fails to limit application of the doctrine to the question of Comet Corp.'s liability. This is further underscored by the giving court's Instruction No. 13: "Although there are several defendants in this action, it does not follow that if one is liable, all are liable. Each defendant is entitled to a fair consideration of his own defenses and is not to be prejudiced by any finding that you may make against the other. Except -- as otherwise indicated, all instructions given to you govern the case as to each defendant." (Emphasis supplied.) Plaintiffs' case against defendants Mid-West Coast Company and its drivers James Kennely and Richard Hendrick was not "governed" by the sudden emergency doctrine. These defendants neither asserted the doctrine applied to them nor relied upon it in any way. Under the above instructions, however, the jury could have been led to erroneously assume that Mid-West Coast's conduct was legally excusable. We have previously held that the trial court should have granted a directed verdict of liability against Comet Corp. and that it was improper to give Comet Corp.'s offered sudden emergency instruction. Here, there are parties defendant other than Comet Corp. and the question thus becomes whether the giving of this in- struction without any indication that the doctrine's application must be confined to Comet Corp. constitutes reversible error as to the verdict and judgment in favor of these other defendants? We conclude that it does. In an action such as the present one, involving multiple defendants whose interests and theories of the case are antagonistic to each other as well as to the plaintiff, it is most important the jury instructions be accurate and precise. It is not enough that an instruction which might lead to one party being relieved of liability correctly states the law; the instruc- tion should also state to which of the parties it properly may be applied. When, as here, there is no such limitation, and the jury therefore may be misled, its verdict and the judgment based thereon cannot stand. Plaintiffs are not the only parties who were prejudiced by the given sudden emergency instruction. Since we have held Comet Corp. and its driver, Robert Hamblen, liable as a matter of law, plaintiffs' eventual money recovery will be their responsibility. ~ffirming the judgment relieving Mid-West Coast Company and its drivers of liability would result in Comet Corp. being solely respon sible for the entire amount found to be due plaintiffs, in spite of the fact that the issue of liability was improperly presented to the jury. We acknowledge that plaintiffs did not object at trial to the giving of the sudden emergency instruction on the grounds that the jury might misapply the instruction to Mid-West Coast Company; their objection was that Comet Corp., the party offering the instruction, was not entitled to it as a matter of law. It is also acknowledged that neither plaintiffs nor Comet Corp. specified the giving of this instruction as reversible error as to the judgment in favor of Mid- West Coast Company. Under the narrow circumstances of this case, we do not think these facts preclude this Court's review of this issue on its own motion. The Supreme Court of Indiana, in Big Creek Stone Co. v. Seward, 144 Ind. 205, 43 N.E. 5 (1896), stated: " * * * If the court were limited to the arguments and reasoning of counsel in its decisions of cases, to the exclusion of its own observations, many cases would lead us far from what we understand to be the true object of the court." In a later case, the Indiana Supreme Court again addressed the ques- tion of whether it is proper for an appellate court to go beyond the issues as narrowly presented. In Cleveland, C.C. & St.L. Ry. Co. v . Moore, 170 Ind. 328, 84 N.E. 540 (1908), it stated: " * * * Where resort to the record is necessary, the case will be determined by the record, and in such a case the court will not regard itself as bound down to the conceptions of counsel on either side as to the nature of the controlling facts." To the same effect see Van Winkle v. Van Winkle, 124 1nd.App. 626, 119 N.E.2d 328, 329 (1954). By this decision this Court is not repudiating the sound rules of practice which require timely, specific objections to instructions and the full presentation of issues for review on appeal. On the facts having carefully reviewed the entire record, we hold that a serious error which appears on the face of that record is reviewable, although not presented by the parties. The sudden emergency instruc- tion should not have been given at all in this case. As given, it was too general and allowed the sudden emergency doctrine to be erroneously applied to parties defendant who neither offered the instruction nor relied on it at any stage of the proceedings. The instruction was prejudicial ultimately to two of the three sets of parties. Substantial injustice resulted from the giving of this instruction, an injustice which this Court cannot and will not ignore. Accordingly, the judgment in favor of Mid-West Coast Company and its drivers, James Kennely and Richard Hendrick, is reversed, and the cause remanded for a new trial on the issue of liability. The judgment in favor of Comet Corp. and its driver, Robert Hamblen, is reversed and the cause remanded to the District Court for trial on the issue of damages alone. We Concur: , ----F---7 i ' \ Chief Justice /&(;?is&-- k Justices

November 23, 1977

5e564972-c815-41e1-bb0b-0eeb04ef75ed

WESTERN LITHO v BRD OF COUNTY COM

N/A

13694

Montana

Montana Supreme Court

No. 13694 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 WESTERN LITHO, a Montana corporation, et al., Plaintiffs and Appellants, THE BOARD OF COUNTY COMMISSIONERS OF YELLOWSTONE COUNTY, MONTANA et al., Defendants and Respondents. Appeal from: District Court of the Thirteenth Judicial District, Hon. LeRoy L. McKinnon, Judge presiding. Counse of Record: For Appellant: Hibbs, Sweeney & Colberg, Billings, Montana Maurice Colberg argued, Billings, Montana For Respondents: Morrow, Nash and Sedivy, Bozeman, Montana Edmund P . Sedivy argued, Bozeman, Montana C. W. Jones argued, Deputy County Attorney, Billings, Montana Submitted: September 23, 1977 ' i ,-, p Decided: .)v 1 A 8 377 Filed: , L I - - : &Q-iT .+A% M r . Justice John Conway Harrison delivered the Opinion of the Court, Plaintiff filed a complaint i n the d i s t r i c t court, Yellowstone County, requesting a declaratory judgment. The d i s t r i c t court dismissed the complaint on the ground plaintiff lacked standing t o bring the action and was not the real party i n interest. Plaintiff appeals. Plaintiff is Western Litho, a printing establishment located in Billings, Montana. Defendants are the Board of County Commissioners of Yellowstone County and The Artcraft Printers, Inc., another printing firm loca ted in Bozeman, Montana. The facts as alleged in the complaint are: For the two year period preceding January 1, 1976, Campbell Calvert, d/b/a Laurel Outlook, a newspaper in Yellowstone County, hereinafter referred t o as Calvert, had the contract for legal advertising, publications and printing for Yellowstone County, and subcontracted the printing portion of the work to plaintiff. Calvert also submitted a bid for the period commencing in 1976 and agreed again to subcontract the printing t o plaintiff, i f his bid was accepted. Plaintiff contends Calvert's bid was the only qualified bid on the entire contract, and therefore the Board of County Commissioners was required t o accept it under sections 16-1230 through 1233, R. C,M. 1947. The Board, however, chose to s p l i t the contract and awarded the printing portion to Artcraft and the remainder to Calvert. Plaintiff instfhted a declaratory judgment action, naming the Board and Artcraft as defendants and requesting sections 16-1230, et-seq., be interpreted t o mean: "* * * that i f there is a low bid from any newspaper for a l l of the legal advertising, publications and printing work of the county and i f that newspaper owns and operates a commercial printing establishment, then a l l of the county legal advertising, publications and printing work must be awarded to that particular newspaper and the contract cannot be divided into two parts, one for legal advertising and publications and the other for printing and further that the phrase I commercial printing establishment' as used i n 516-1230 does not contemplate that a l l of the printing work must be accomplished by the particular newspaper upon its premises but may be subcontracted to other qualified firms , 'I Defendants moved for dismissal of the complaint on the grounds that plaintiff lacked standing to sue and was not the real party in interest. Plaintiff subsequently moved t o amend i t s complaint t o add Calvert as a party plaintiff and to add a prayer for lost prof its. Without ruling on plaintiff' s motion, the d i s t r i c t court granted the motion to dismiss. The threshold question here is whether plaintiff has the requisite standing to bring an action under Montana's Uniform Declaratory Judgments Act, Section 93-8902, R.C.M. 1947 provides, so far as is pertinent here: "Any person * * * whose rights, status or other legal relations are affected by a statute * * * may have determined any .question of construction or validity arising under the * * * statute * * * and obtain a declaration of rights, status or other legal relations thereunder. " The complaint alleges plaintiff has a contract with Calvert for printing work conditioned upon the acceptance by the Board of County Commissioners of Calvert's entire bid. Further, it alleges Calvert's entire bid was not accepted because the Board acted in contravention of sections 16-1230, e t seq., R.C.M. 1947, i n accepting Artcraft's bid for the printing work. The United States Supreme Court stated i n Flast v. Cohen, 392 U . S . 83, 99, 88 S.Ct. 1942,1952, 20 L ed 2d 947, "* * * The ' g i s t of the question of standing' is whether the party seeking relieQ has 'alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult consti- tutional questions.' Baker v. Carr, 369 U.S. 186, 204, 7 L Ed 2d 663, 82 S.Ct. 691 (1962)." Here plaintiff has alleged a substantial and personal economic injury that is the direct result of what it claims to be the unlawful action of the Board of County Commissioners. The "concrete adverseness" required by Baker and Flast is assured. Defendants rely on Chovanak v. Matthews, 120 Mont. 520, 188 P.2d 582 (1948), for the proposition that plaintiff lacks standing t o seek a declaratory judgment. Such reliance is misplaced. The Court i n Chovanak denied standing t o a citizen who challenged the constitutionality of a law relating to the licensing of s l o t machines for certain purposes. The Court noted plaintiff's only interest was that of a citizen, elector, resident and taxpayer, and stated: "It is held i n Montana, as it i s held by the United States Supreme Court, and by courts throughout the nation, that a showing only of such interest i n the subject of the s u i t as the public generally has is not sufficient t o warrant the exercise of judicial power. * * *" 120 Mont. 527. The instant case is clearly distinguishable. Here, plaintiff asserts a right of a subcontractor under the statutes governing the letting of bids for county printing work. Far from being shared with the public a t large, this right is shared by, a t most, one other person, the contractor, Calvert. Plaintiff has standing to bring the action for a declaratory judgment. Defendants concede Calvert is the r e a l party i n interest, but the d i s t r i c t court dismissed the action without giving plaintiff a reasonable opportunity t o join Calvert a s a party p l a i n t i f f . I n view of our holding, w e find it unnecessary t o discuss the other questions on appeal. The order of the d i s t r i c t court is reversed. The case is remanded for further proceedings in accordance with t h i s opinion. W e Concur:

October 18, 1977

3203ec68-f689-4497-9ae8-ceff9f2c3d72

BRABENDER v KIT MANUFACTURING CO

N/A

13642

Montana

Montana Supreme Court

No. 13642 IN THE SUPREME COURT OF THE STAT OF MONTANA 1977 EDWARD V. BRABENDER and FRANCES BRABENDER, husband and wife, Plaintiffs and Appellants, KIT MANUFACTURING COMPANY, a corporation, and FALLS MOBILE HOME CENTER, INC., Defendants and Respondents. Appeal from: District Court of the Eighth Judicial District, Honorable Truman G. Bradford, Judge presiding. Counsel of Record: For Appellants: John R . Christensen argued, Stanford, Montana For Respondents: John Atkins argued, Helena, Montana Submitted: June 3, 1977 ~ecided:AU 6 3, :Sf7 Filed Nc 3 C. 1977 I / U - Clerk Mr. Justice Frank I . Haswell delivered the Opinion of the Court. Plaintiffs appeal from a summary judgment granted to defendant in which the court refused to rescind a purchase con- tract and awarded defendant attorney fees. Plaintiffs Edward V . Brabender and his wife entered into a purchase contract with Falls lobile Home Center, Inc. (Falls) of Great Falls, Montana, on September 21, 1971 for the purchase of a new 1972 Golden State Mobile home to be manufactured by Kit Manufacturing Company (Kit) of Caldwell, Idaho. The purchase contract referred to an attached Kit Manufacturing Company Order form which designated the specifications the Brabenders desired included on their new mobile home. On November 16, 1971, plain- tiffs and Falls executed a retail installment contract which Falls assigned to the First National Bank of Great Falls. After a down payment and trade-in allowance on their old mobile home, the plaintiffs owed $1,604.22 which was to be paid in six equal con- secutive installments beginning in January, 1972, and ending in June, 1972. In case of a delinquent installment, the retail in- stallment contract provided for a late charge plus a reasonable attorney fee if the matter was referred to an attorney. On November 25, 1971, the mobile home was delivered to plaintiffs at Green Acres Trailer Park, Lewistown, Montana. Plaintiffs inspected the mobile home and found fault with it in various particulars. In a letter to Kit dated November 29, 1971, plaintiffs complained among other things that the frame of the mobile home was bent, that the roof was buckled and banging, that the siding and trim were loose and rattling, that the floor boards were loose and nails were coming through, that there was an un- patched hole in the underflooring, that the rear bedroom window screen was torn, and that the kitchen countertops were not joined properly. They concluded their letter stating: "We cannot and will not accept this mobile home and we want immediate action from you on this or we will be obliged to take action ourselves." That same day A1 Lawson, the president of Falls and Gene Bumgarner, sales manager of Kit, inspected the mobile home. On December 7, 1971, Gene Bumgarner responded to plaintiffs' Novem- ber 29 letter, stating that he did not see any structural damage to the mobile home's frame, but that he would send a serviceman to perform the other necessary repairs to plaintiffs' home. Kit's serviceman arrived December 13, 1971 to make the repairs, but plaintiffs, contrary to the advice of their then counsel, refused to let the serviceman make them. On December 30, 1971 Gene Bum- garner sent a letter to plaintiffs by certified mail reciting the prior events and informing them that Kit still stood ready to perform warranty repair, but because plaintiffs refused to allow Kit to make the repairs, they would not assume responsibility for damages which might occur due to nonrepair of existing warranty claims. Plaintiffs did not communicate further with either Falls or Kit until the filing of this law suit over four years later. On the advice of their then counsel, plaintiffs paid on schedule the installments due First National Bank of Great Falls, as assignee of the retail installment contract. That contract was fully executed with the payment of the June, 1972 installment. Plaintiffs continued to live intermittently in the mobile home from the time of its delivery to the Green Acres Trailer Park until May, 1973. From 1973 to present the mobile home has re- mained at the trailer park unoccupied. On February 20, 1976 plaintiffs filed suit against Falls and Kit seeking rescission of the purchase contract and a refund of the purchase price plus interest, or in the alternative, seek- ing damages in the amount of $7,000 plus interest. Defendant Falls answered alleging several affirmative defenses, among other things. Falls alleged that the attempted rescission was ineffective and that plaintiffs had not acted soon enough in bringing suit and should not, more than four years later, be heard to complain of the defects in the mobile home. As a counterclaim Falls claimed attorney fees under the contract. Defendant Falls filed affidavits, requests for ad- missions, and interrogatories. It then filed a motion for sum- mary judgment on the grounds that plaintiffs had failed to comply with the statutory requirements for rescission, that the purchase contract was fully executed and that plaintiffs had accepted the mobile home. Later it filed supplemental grounds alleging that the suit was not commenced within four years after the cause of action accrued and therefore plaintiffs' claims were barred by section 87A-2-725, R.C.M. 1947. Defendant Kit answered plaintiffs' complaint alleging as defenses that plaintiffs' claims were barred by section 87A-2-725, and by laches, waiver and estoppel. Defendant Kit was granted summary judgment. Defendant Falls was later granted summary judgment. Follow- ing a further hearing, the district court granted defendant Falls judgment against plaintiffs for $1,200 attorney fees. Plaintiffs appealed from the judgment in favor of defendant Falls. The district court based summary judgment in favor of defendant Falls on its findings and conclusions that; (1) Plain- tiffs did not comply with the statutes governing rescission of contracts; (2) plaintiffs waived their objections to the alleged defects in the mobile home by their wrongful refusal to allow de- fendant Kit's repairman to remedy their objections; (3) plaintiffs accepted the mobile home by their continued use and occupancy of it and by their full payment of the contract; (4) plaintiffs suit to rescind the contract was barred by laches and estoppel; and (5) the amount and existence of damages claimed was purely speculative and conjectural. The district court's award of attorney fees to defendant Falls was based on its findings and conclusions that: (1) There was a single integrated contract consisting of the purchase contract, the Kit order form, and the retail installment contract; (2) the retail installment contract provided for attorney fees in case of default; and (3) this pro- vision was reciprocal under section 93-8601.1, R.C.M. 1947. Plaintiffs raise two issues on appeal: 1. Whether the pleadings, interrogatories, affidavits, and records show any genuine issues of material fact precluding summary judgment; and 2. Whether the award of attorney fees to defendant Falls was proper. Summary judgment is not a substitute for trial; it can only be granted where the record discloses no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Where the absence of any genuine issue of material fact is disclosed by the record, the burden is on the party opposing summary judgment to come forward with evidence creating a genuine issue of material fact to be determined at trial. Johnson v . Johnson, Mont . , 561 P.2d 917, 919, 34 St.Rep. 162 (1977); Harland v. Anderson, 169 Mont. 447, 548 P.2d 613, 615, 33 St.Rep. 363 (1976). The party opposing the motion will be indulged to the extent of all inferences which may be reasonably drawn from the offered proof. Harland v. Anderson, 548 P.2d at 615. We turn our attention to the defense of laches. Laches is negligence in the assertion of a right. It exists when there has been an unexplained delay of such duration or character as to render the enforcement of an asserted right inequitable. Quoting from Johnson we stated: " * * * Considerations of public policy and the difficulty of doing justice between the parties are sufficient to warrant a court of equity in refusing to institute an investi- gation where the lapse of time in the assertion of the claim is such as to show inexcusable neglect on the part of the plaintiff, no matter how apparently just his claim may be; and this is particularly so where the relations of the parties have been materially altered in the meantime." Johnson v. Johnson, 561 P.2d 920; Riley v. Blacker, 51 Mont. 364, 152 P. 758 (1915). Prior to the filing of this law suit, the record shows that the last written communication from the plaintiffs to either defen- dant was plaintiffs' letter of November 29, 1971 to defendant Kit. The last oral communication between the parties was on December 7, 1971. After defendant Kit's letter of December 30, to plaintiffs, plaintiffs had no further contact with either defendant until this suit was filed on February 20, 1976. The record is barren of any excuse for this long delay. The applic- able statute of limitations, section 87A-2-725(1), R.C.M. 1947, provides : "An action for the breach of any contract for sale must be commenced within four years after the cause of action has accrued. * * *" In Shell v. Strong, 151 F.2d 909, 911 (10th Cir. (1945), . . it is stated: "A court of equity is not bound by the statute of limitations, but, in the absence of extra- ordinary circumstances, it will usually grant or withhold relief in analogy to the statute of limitations relating to actions at law of like character. Under ordinary circumstances, a suit in equity will not be stayed for laches before, and will be stayed after, the time fixed by the analogous statute, but if unusual conditions or extraordinary circumstances make it inequitable to allow the prosecution of a suit after a briefer, or to forbid its maintenance after a longer, period than that fixed by the analogous statute, a court of equity will not be bound by the statute, but will determine the extraordinary case in accordance with the equities which con- dition it. When a suit is brought within the time fixed by the analogous statute, the burden is on the defendant to show, either from the face of the complaint or by his answer, that extraordinary circumstances exist which require the application of the doctrine of laches. On the other hand, when the suit is brought after the statutory time has elapsed, the burden is on the complainant to aver and prove circumstances making it inequitable to apply laches to his case." 151 F.2d 911. Plaintiffs did not bring this suit within the time fixed by the analogous statute of limitations, nor have they given any reason for their delay in bringing suit. To the contrary, they used the mobile home for 1-1/2 years after it was delivered to them, and after moving out of it, they left it unoccupied. De- fendant Kit notified plaintiffs that in light of plaintiffs re- fusal to allow Kit to make the requested repairs, it would not assume responsibility for damages resulting from failure to make those repairs. In view of these facts, we hold that it would now be inequitable to allow plaintiffs to attempt to rescind the contract. Plaintiffs' suit for rescission is barred by their laches. Plaintiffs' second claim seeks damages for breach of contract. This claim is now barred by the applicable four year statute of limitations. Section 87A-2-725(1). Plaintiffs contend that defendant Falls may not rely on the affirmative defenses of laches and the statute of limitations to bar plaintiffs' suit because they were not affirmatively plead in its answer as required by Rule 8(c), M.R.Civ.P. Rule 8(c) must be read in connection with Rule 8(e), M.R.Civ.P., which states that no technical forms of pleading or motion are required, and with Rule 8(f), M.R.Civ.P., which requires that all pleadings be construed so as to do substantial justice. Defendant Falls' answer denominates three affirmative defenses which in substance are: (1) Failure to state a claim for relief, (2) ineffective rescission and waiver of the defects, and (3) estoppel, laches and statute of limitations. Although defendant Falls did not specifically denominate his defenses as laches or statute of limitations, the allegations of the second and third affirma- tive defenses, which are detailed at length, contain certain dates of all oral and written communications between plaintiffs and defendants, show that more than four years elapsed between the signing of both the purchase and retail installment con- tracts and plaintiffs' filing of the law suit, and state: "Plaintiffs should be estopped by their conduct, both their affirmative acts and subsequent inaction, and the lapse of time, from now attempting to re- pudiate or rescind the contract * * * or to seek any of the relief asked for in the complaint." A reading of defendant Falls affirmative defenses reveals that plaintiffs had adequate notice that defendant Falls intended to raise the defenses of laches and statute of limitations. In light of Rules 8 (e) and 8 (f) , M.R. Civ.P. , we hold that those defenses were adequately plead in defendant Falls' answer. Plaintiffs' second issue on appeal is whether defendant Falls was entitled to an award of attorney fees. The purchase contract between plaintiffs and defendant Falls made no provision for attorney fees in case of suit on the contract. The retail installment contract between plaintiffs and defendant Falls provided for attorney fees in case suit was brought to recover delinquent payments. Section 93-8601.1, R.C.M. 1947, states: "Whenever by virtue of the provisions of any contract or obligation in the nature of a contract, made and entered into at any time after the effective date of this act, one party to such contract or obligation has an express right to recover attorney fees from any other party to the contract or obligation in the event the party having that right shall bring an action upon the contract or obligation, then in any action on Such contract or obligation all parties to the contract or obligation shall be deemed to have the same right to recover attorney fees, and the prevailing party in any such action, whether by virtue of the express contractual right, or by virtue of this act, shall be entitled to recover his reasonable attorney fees from the losing party or parties." Plaintiffs contend that the provision in the retail in- stallment contract cannot be made a basis for an award of attorney fees under section 93-8601.1 where the retail install- ment contract has been fully executed. Defendants argue that the purchase contract and the retail installment contract should be read together as an integrated contract. The purchase contract did not specifically incorporate the terms of this retail installment contract, but provided that in case the purchase contract was not a cash transaction, the purchaser " * * * before, or at the time of delivery of the trailer, mobilehome or vehicle ordered * * * will either execute a chattel mortgage, conditional sales contract, or such other form of agreement as may be required by law." Nor were the two contracts executed contemporaneously. The purchase contract was signed September 21, 1971; the retail installment contract was signed November 16, 1971. Most significantly, the retail install- ment contract was fully executed in July 1972, over 3-1/2 years prior to the filing of this suit. In light of these facts we deem it inequitable to award defendant Falls attorney fees in plaintiffs' action to rescind the purchase contract. Defendant Falls contends that this case is indistinguish- able from Compton v. Alcorn, Mont . , 557 P.2d 292, 33 St. Rep. 1185 (1976), in which defendant, the seller of a mobile home, was awarded attorney fees in the purchasers1 suit to rescind a retail installment contract. Compton is distinguishable on two bases: (1) It was on suit to rescind a retail installment contract, not a purchase contract; (2) the retail installment contract was not fully executed, whereas here it was. The portion of the summary judgment awarding defendant Falls attorney fees is reversed. The award of summary judgment in favor of defendant Falls is affirmed. Justice We concur: -

August 30, 1977

73c70ec6-0bf3-4082-ab00-abcc84bb9422

CASSIDY v FINLEY HAGERTY

N/A

13543

Montana

Montana Supreme Court

No. 13543 I N THE S U P R E M E COURT O F THE STATE O F MONTANA 1977 KEN CASSIDY, P l a i n t i f f and Appellant, GLENN FINLEY and WRIGHT W. HAGERTY, Defendants and Respondents. Appeal from: D i s t r i c t Court of t h e Ninth J u d i c i a l D i s t r i c t , Honorable Nat A l l e n , Judge presiding. Counsel of Record: For Appellant: Moses, T o l l i v e r and Wright, B i l l i n g s , Montana R. Allen Beck araued, B i l l i n g s , Montana For Respondents: GOUCJ~, Booth, Shanahan and Joynson, Helena, Montana Ronald Waterman argued, Helena, Montana Filed: f i k ! ! ~ 7 1977 Submitted: June 13, 1977 . . , * + z 2 . U ** 2 , ' * - " - Z Clerk Mr. Justice John Conway Harrison delivered the Opinion of the Court. Plaintiff Ken Cassidy seeks to recover damages from defend- ants Glenn Finley and Wright W. Hagerty for alleged negligence, arising from an incident which occurred February 8, 1970. The action was initially filed in the district court, Glacier County, on August 8, 1973. On April 8, 1976, plaintiff moved for and was granted leave to amend his complaint. Thereafter, upon motion of defendant Finley and following written and oral arguments, the dis- trict court issued an order granting summary judgment to defendant Finley. Plaintiff appeals. On February 8, 1970, plaintiff entered the Babb Bar in Babb, Montana. The bar was owned and operated by a partnership consisting of defendants Finley and Hagerty. An altercation occurred between plaintiff and the bartender, Arnold "Red" Savage. Savage subseqently drew a .22 caliber pistol from behind the bar and fired into plain- tiff's face, causing injuries. On January 22, 1973, plaintiff commenced an action in the United States District Court for the District of Montana, Great Falls Division, seeking damages for intentional assault. The action was brought against defendant Finley alone. Plaintiff therein alleged: "That Red Savage in response to the argument aimed a .22 caliber pistol from behind the bar where it was kept and he did then and there without warning, fire the same into the face of the plaintiff, causing him severe and pain- ful injuries." On June 21, 1974, the United States District Court ordered dismissal of the cause for lack of federal jurisdiction. During pendency of the federal action plaintiff on August 8, 1973 filed the present action in state court; wherein plaintiff elected to sue both Finley and his business partner, Hagerty. The pleadings in the present case allege a cause of action in negligence, rather than intentional assault: " * * * That Red Savage, in response to the argument, seized a .22 caliber pistol from behind the bar where it was kept and he did then and there accidentally discharge the same into the face of plaintiff causing him severe and painful injuries. "Plaintiff alleges that the direct and proximate cause of the injury was negligence on the part of the employee * * * ." (Emphasis added.) No service of process was ever obtained upon defendant Hagerty. He has made no appearance in this action. The amended complaint, filed April 8, 1976, also is grounded in negligence, and alleges additional counts of negligent conduct. On April 27, 1976, defendant Finley filed a motion to dismiss the amended complaint on the ground the statute of limitations had ex- pired. The issue was fully briefed by both parties. The district court, on June 25, 1976, ordered summary judgment in favor of defend- ant Finley, treating the motion to dismiss as one for summary judg- ment. Plaintiff appeals from that order. The issues presented on appeal are: 1. Whether plaintiff's cause of action originally instituted in federal court was "renewed" by the provisions of section 93-2708, R.C.M. 1947, thus preventing the running of the statute of limitations against the subsequent action in state court. 2. Whether the filing of the second cause of action in state court, prior to the termination of the first cause of action, defeats the operation of the renewal statute. Plaintiff argues the statute of limitations does not bar the present action because an action on the same matter, having the same set of operative facts, was instituted in federal court prior to the running of the statute. It is argued section 93-2708, applies and that the original federal action was "renewed" in state court, thus effectively preventing the operation of the three year statute of limitations applicable to actions for negligence. Section 93-2708 provides: "If an action is commenced within the time limited therefor, and a judgment therein is reversed on appeal, without awarding a new trial, or the action is terminated in any other manner than by a voluntary discontinuance, a dismissal of the complaint for neglect to prosecute the action, or a final judgment upon the merits, the plaintiff * * * may commence a new action for the same cause, after the expiration of the time so limited, and within one year after such a reversal or termination." We note here that plaintiff's original complaint filed in federal court was plainly phrased in terms of an intentional tort. The applicable statute of limitations is section 93-2606, R.C.M. 1947, it provides: "Within two years: "3. An action for * * * assault * * *." A statute of limitations commences to run from the time the cause of action accrues to the plaintiff. Stagg v. Stagg, 90 Mont. 180, 300 P. 539. Any cause of action existing in this case, whether based upon intentional or negligent conduct, accrued to plaintiff on February 8, 1970, the date of injury. The two year statute of limitations had clearly expired, prior to institution of the federal action on January 22, 1973. The primary prerequisite to the applicability of section 93-2708, the "renewal" statute, is that the original action be "commenced within the time limited therefor." Here, the prerequi- site was not met, for the original action was not timely filed. Hence, there was nothing to be renewed under section 93-2708. While the federal court dismissed the action for lack of jurisdiction, it certainly could also have done so on the ground the statute of limitations had run. We agree with plaintiff's argument that section 93-2708 would permit renewal in Montana district courts of actions filed in federal courts within the proper time limitations, but subse- quently dismissed for lack of jurisdiction. Johnson v. United States, 68 F. 2d 588 (9th Cir., Mont.) ; Gilmore v. Gilmore, 270 F. 260 (D.C. Mont.). See: Anno. 6 ALR3d, 1043. This principle is representative of the majority position. However, the rule is inapplicable where, as here, the initial federal action is not timely filed. The present cause of action, in negligence, must stand or fall without regard to the renewal statute. The negligence action operative is not the same action filed in the federal court. The set of/facts in the present action differs greatly from that of the prior federal action. Alleged negligent conduct is simply not the equivalent of an intentional assault. We find the present cause of action is also barred by the statute of limitations. Applicable to negligence actions is sec- tion 93-2605, R.C.M. 1947, which provides: "Within three years: I f * * * "3. An action upon an obligation or liability not founded upon an instrument in writing, other than a contract, account or promise." As pointed out, the tort, if any,accrued on February 8, 1970. The present negligence action was filed on August 8, 1973, well past the three year limitation. This Court has often stated one of the objects of a true statute of limitations is to prevent potential plaintiffs from sitting on their rights, and to suppress stale claims after the facts concerning them have become obscured by lapse of time, defective memory, or death or removal of witnesses. No11 v. City of Bozeman, 166 Mont. 504, 534 P.2d 880. The district court was correct in granting summary judgment to defendant Finley on the ground the action is barred by the statute of limitations. Given this holding, there is no need to resolve the second issue on appeal. The judgment is affirme We Concur: Chief ~ u k t w e '

August 17, 1977

ef31abe4-a94a-40e4-a512-957923e70c45

STATE v MOORE

N/A

13788

Montana

Montana Supreme Court

N o . 13788 I N T H E SUPREME C O U R T O F T H E STATE O F M O N T A N A 1977 T H E STATE O F MONTANA, P l a i n t i f f and Appellant, MARVIN M O O R E , Defendant and Respondent. Appeal from: D i s t r i c t Court of t h e Eighth J u d i c i a l D i s t r i c t , Honorable Joel G. Roth, Judge presiding. Counsel of Record: For Appellant: Mike Greely, Attorney General, Helena, Montana J a m e s T i l l o t s o n , A s s i s t a n t Attorney General, argued, Helena, Montana J. Fred Bourdeau, County Attorney, G r e a t F a l l s , Montana Carroll Blend, Deputy County Attorney, argued, G r e a t F a l l s , Montana For Respondent: Howard F. Strause argued, Great F a l l s , Montana - - - Submitted: September 12, 1977 ~ e c i d e d : D t T 1 $j 5 9 7 7 - t;jr?' : ' =;v Filed: - V 1 Clerk Mr. Justice Frank I. Haswell delivered the Opinion of the Court. The question in this case is whether a defendant accused of deception in causing Cascade County to execute warrants in excess of $150 for welfare assistance can be prosecuted for the felony of deceptive practices or whether prosecution is limited to the misdemeanor charge of welfare fraud. The district court dismissed the felony charge. We reverse. The substance of the accusation underlying the felony charge is that the defendant orally stated and subsequently signed a welfare form declaring he was receiving no Veteran's Adminis- tration benefits when in fact he was; that as a result of defen- dant's statements Cascade County issued welfare warrants for de- fendant's rent in the amount of $682 and for groceries in the amount of $125; and by reason thereof defendant is guilty of the crime of deceptive practices, a felony. The direct information filed in the district court charged defendant with the crime of deceptive practices, a felony, com- mitted in Cascade County on July 2, 1975 in that defendant did "purposely and knowingly cause the County of Cascade, by decep- tion to execute documents by which pecuniary obligations were incurred, namely warrants for rent and groceries. The value of the obligations incurred was in excess of $150.00, in viola- tion of Section 94-6-307(1)(a), R.C.M. 1947 as amended." Defendant moved to dismiss the information on the grounds that he was charged under the wrong statute. Following hearing, the district court dismissed the case. The state appeals. The focus of this appeal is whether defendant is sub- ject to prosecution for the felony of deceptive practices under Mgntana's Criminal Code or whether prosecution is limited to the misdemeanor charge of welfare fraud under our W f a r e - . . The two statutes involved provide in pertinent part: "94-6-307. Deceptive practices. (1) A person commits the offense of deceptive practices when he purposely or knowingly: "(a) causes another, by deception * * *, to execute a document * * * by which a pecuniary obligation is incurred * * * "(2) A person convicted of the offense of deceptive practices shall be fined not to exceed five hundred dollars ($500) or be imprisoned in the county jail for any term not to exceed six (6) months or both. If the deceptive practices are part of a common scheme or the value of any property * * * obtained * * * exceeds one hundred fifty dollars ($150) then the offender shall be imprisoned in the state prison for any term not to exceed ten (10) years." This statute is a part of the Montana Criminal Code (Title 94); is classified as a felony where the amount of property obtained or attempted to be obtained exceeds $150; and is punish- able by a maximum sentence of 10 years in prison. "71-226. Fraudulent acts. Whoever knowingly obtains * * * by means of willfully false state- ments or representation * * * public assistance to which he is not entitled, [or] assistance greater than that to which he is justly entitled; * * * with the intent to defeat the purposes of this act shall be guilty of a misdemeanor. In assessing the penalty the court shall take into consideration, among other factors, the amount of money fraudulently received." This statute is a part of the Welfare Code (Title 71); is classified as a misdemeanor; and is punishable by a fine of from $25 to $1,000 to which may be added a county jail sentence not exceeding 60 days. Section 71-231.3, R.C.M. 1947. The gist of the State's contention is that the existence of a specific statute in the Welfare Code encompassing the alleged crime does not preclude prosecution for the alleged crime under the general Criminal Code provided the facts support a charge under either statute. The core of defendant's argument, on the other hand, is that where the legislature enacts a comprehensive body of law dealing with a particular subject (welfare), such law controls to the exclusion of a more general statute in the Criminal Code (deceptive practices) particularly where, as here, the classification of the offense and the penalties on convic- tion are inconsistent, incompatible and repugnant. In our view, resolution of these opposing contentions turns on legislative intent. Specifically, did the legislature intend to make the welfare fraud statute (section 71-226) the exclusive remedy for cases falling within its provisions or did the legislature intend to provide an alternative remedy under the Criminal Code (section 94-6-307 (1) (a) ) ? It is conceded that there is no language in either legislative act specifically expressing legislative intent on this subject. We must therefore attempt to determine legislative intent by resort to rules of statutory construction. Defendant urges application of the rule that the specific statute controls to the exclusion of the general, citing a number of cases so holding in criminal prosecutions in other jurisdic- 94 , tions, principally State v . Becker, 39 Wash.2d/234 P.2d 897 (old age assistance fraud); People v. Silk, 138 C.A.2d 899, 291 P.2d 1013 (welfare fraud); People v . Gilbert, 82 Cal.Rptr. 724, 462 P.2d 580 (ADC fraud). Cases to the contrary can be cited with equal effect: State v . Dumont, 3 0r.App. 189, 471 P.2d 847 (unlawful use of a credit card); People v. Licauor, 23 Misc.2d 75, 200 N.Y.S.2d 582 (unemployment insurance fraud); State v . Drake, 79 N.J.Super. 458, 191 A.2d 802 (unemployment compensation fraud); People v . Gulisano, 57 Misc.2d 243, 292 N.Y.S.2d 545 (labor bene- fits fraud). None of these cases are particularly persuasive concerning whether the rule should be applied in Montana under the circumstances of the instant case due to differences in the statutes involved, legislative history of the enactments, related statutes, and comprehensiveness of the subject matter. As additional support for the rule that the specific statute controls to the exclusion of a more general statute, defendant cites Montana civil cases so holding, principally McAlear v. Unemployment Compensation Commission, 145 Mont. 458, 405 P.2d 219; Martel Construction v. Gleason Equipment, Inc., 166 Mont. 479, 534 P.2d 883; Fickes v. Missoula County, 155 Mont. 258, 470 P.2d 287; and Monarch Lbr. Co. v. Haggerd, 139 14ont. 103, 360 P.2d 794. As there is a specific statute in the Civil . Code that when a general and a particular provision of a statute are inconsistent, the latter is controlling (section 93- 401-16, R . C . M . 1947) the decision in these civil cases is under- standable. However, these civil cases are not controlling for reasons hereafter noted. This Court has previously declined to apply this rule of statutory construction to criminal prosecutions where defen- dant's conduct violated both misdemeanor and felony statutes. State v. Lagerquist, 152 Mont. 21, 30, 31, 445 P.2d 910; State v . Evans, 153 Mont. 303, 306, 456 P.2d 842. Lagerquist and Evans impliedly, although not expressly, overruled the earlier case of State v . Holt, 121 Mont. 459, 194 P.2d 651, holding that where the penalty provisions of a later misdemeanor statute were in- consistent and irreconcilable with an earlier felony statute, the prior felony statute was repealed by implication. For clarif- ication, we now expressly overrule this holding in - Holt on the authority of Lagerquist and Evans. Defendant points out and we recognize that Laqerquist and Evans are not identical to the instant case in that they do not involve a comprehensive body of law on a particular subject vis-a-vis a more general criminal statute. Nonetheless we find them similar and persuasive as this distinction does not compel a different result for reasons discussed later in this opinion. In Lagerquist the criminal conduct was falsifying weight slips on hay sold to defendant. Three statutes were applicable: (1) a misdemeanor statute prohibiting misrepresentation in the quantity or weight of a commodity sold (section 90-620, R.C.M. 1947); (2) a misdemeanor statute requiring the seller to give the purchaser full weight on all sales of hay and other commodi- ties usually sold by the ton (section 94-1904, R.C.M. 1947); and (3) a felony statute covering obtaining money or property by false pretenses (section 94-1805, R.C.M. 1947). As in any case involving felony and misdemeanor statutes, the penalty under the misdemeanor statutes was inconsistent and irreconcilable with the more severe penalty under the felony statute. In affirming the conviction of the defendant under the felony statute, this Court held there was no conflict between the felony and misdemeanor statutes as they set forth separate and distinct crimes. Lagerquist expressed its rationale and the applicable rule of statutory construction in this language: "The appellant argues that because his acts violated more than one criminal statute the more specific statute controls. This argument is premised upon the contention that the misdemeanor and felony statutes are in conflict. We find this contention erroneous in view of previous rulings. The statutes set forth separate and distinct crimes. This Court in State v. Marchindo [citation omitted] quoted from a Massachusetts case holding: 'A single act may be an offense against two statutes; and if each statute requires proof of an additional fact which the other does not, an acquittal or conviction under either statute does not exempt the defendant from prose- cution and punishment under the other.' "Here the charge [under the felony statute] * * * required numerous facts not required under either of the misdemeanor statutes necessitating different proof. The fact that the legislature provides a course of action by more than one statute allows the state to choose either applicable law, and where different proof is required for each offense, a single act or transaction may violate more than one criminal statute. This problem was answered by the Supreme Court of New Jersey in State v. Fary [citation omitted]. There in a similar fact situation, the court said: 'By leaving both statutes on the books * * * the Legislature clearly intended that the two offenses should remain, one as an indictable crime and the other as a disorderly persons offense. * * * The fact that there is an area in which two statutes overlap and prohibit the same act, as in this case, does not mean that the defendant can only be prosecuted under the statute provid- ing for the lesser penalty.' "It is a cardinal principle of construction that repeals by implication are not favored. When there are two acts upon the same subject, the rule is to give effect to both if possible. The intention of the legislature to repeal must be clear and manifest. Reading the statutes in question here we find no such intention on the part of the legislature." State v . Lagerquist, 152 at 30,31. Evans reached the same result in a felony prosecution under the same statute where defendant cashed checks with improper signatures as against the contention that defendant could only be prosecuted for the misdemeanor of uttering fraudulent checks be- low a specified amount. After quoting from Lagerquist, we stated: "This Court has no intention of changing the position stated in the above cited case." State v. Evans, 153 at 306. Here, although there is an overlap in the two statutes, they set forth separate and distinct crimes. The gist of the felony statute is causing execution of pecuniary documents by deception, while the thrust of the misdemeanor statute is receiving welfare assistance by willfully false statements. The alleged criminal conduct violates both statutes, but different proof is required under each. The misdemeanor statute requires proof of receipt of public assistance or an attempt therefor, while the felony statute does not; conversely the felony statute requires proof of execution of a document while the misdemeanor statute does not. Thus the two statutes cover separate and distinct crimes. Under such circumstances Lagerquist and Evans permit the state to prosecute under either applicable statute absent a clear and manifest legislative intent to the contrary. Defendant urges us to find such clear and manifest in- tention on the part of the legislature in the different classi- fications of the two crimes and the lesser range of penalties for welfare fraud in the misdemeanor statute. We find no such legis- lative intent here for the reasons expressed in Lagerquist and Evans. Finally defendant contends that the comprehensive nature of the Welfare Code indicates a legislative intent to preempt therein the entire field of welfare fraud to the exclusion of applicable statutes found in the Criminal Code, thus distinguish- ing Lagerquist and Evans. We are not persuaded by this argument. We note that the misdemeanor statute in question covers only one species of welfare fraud, viz., receiving public assistance by willfully false statements. Other kinds of welfare fraud are not encompassed by the Welfare Code, for example, embezzlement of welfare funds or forgery of welfare warrants. Did the legis- lature intend to allow these crimes to go unpunished by pre- empting the entire field of criminal prosecution in welfare mat- ters to the exclusion of applicable statutes in the Criminal Code? We perceive no rational basis for finding such legislative intent to preempt by enactment of the Welfare Code. For the foregoing reasons we hold that the misdemeanor statute and felony statute are to be construed in pari materia giving effect to both. We decline to give sole effect to the misdemeanor statute to the exclusion of the felony statute for reasons heretofore expressed. We have considered the peripheral arguments advanced by defendant in support of his contentions. We find them without merit and unnecessary to discuss in detail in this opinion as they would neither change the rationale nor the result in this case. The order dismissing the felony charge is reversed and the case remanded to the district court for further proceed- ings. Justice Chief Justice Paul G. Hatfield, deeming himself disqualified, did not participate in this decision.

October 19, 1977

7f22b07b-4df9-4668-b7a9-c1a1ee276da4

KENECO KENIK v CANTRELL

N/A

13551

Montana

Montana Supreme Court

No. 13551 IN THE SUPREME COURT OF THE STATE OF MONTANA KENECO, a corporation and RAYMOND KENICK and BETTY KENIK, Plaintiffs and Respondents, CLYDE CANTRELL and HELEN CANTRELL, Defendants and Appellants. Appeal from: District Court of the Eighth Judicial District, Honorable Paul Hatfield, Judge presiding Counsel of Record: For Appellants: Jardine, Stephenson, Blewett & Weaver, Great Falls, Montana Dale Schwanke argued, Great Falls, Montana For Respondents: Cure and Borer, Great Falls, Montana Orin R . Cure argued, Great Falls, Montana Submitted: June 6, 1977 Decided: SEP 1 6 1 9 n q='p 1 : ' J$rT Filed: V // Clerk' Honorable W. W . Lessley, District Judge, sitting in place of Mr. Chief Justice Paul G . Hatfield. This litigation arises from a conflict of brothers-in-law in the creation and operation of a family corporation. Keneco is the family corporation; it sells, installs, and repairs service station equipment. From 1965 to 1970 the only directors and stockholders were Kenik, his wife Elizabeth, and Cantrell and his wife Helen; Helen Cantrell is Raymond Kenik's sister. The wives did not actually participate in the corpora- tion's business. In 1962 Kenik purchased Marketing Specialties and operated it selling, installing and repairing service station equipment. From 1962 to 1964 Kenik and Cantrell talked of Cantrell becoming an owner with Kenik of the Marketing Specialties business. Before this Cantrell had lived in Great Falls and served as a comptroller in a large department store; he had left that position, purchased and ran a sporting goods store. Finally, Cantrell sold his sporting goods store and joined Kenik in his business. Cantrell was to, and did run the bookkeep- ing and all business phases of the corporation. Kenik did actually manage and labor in the day to day operation of the business. Articles of Incorporation were filed May 12, 1964 and Kenik's small business became Keneco, a corporation on that day. The corporation operated with ~enik as president and Cantrell as vice-president until May 1970, when Cantrell left the corporation. August 31, 1970, Cantrell filed suit to liquidate Keneco because of a claimed management deadlock. September, 1970, Kenik on behalf of Keneco and himself filed suit against Cantrell for damage alleging fraud and malfeasance by Cantrell. The district court consolidated the two actions for trial. The court referred the matter to a certified public accountant as referee. The referee's findings of fact and conclusions with amendments are 88 in number and cover 27 legal pages. The district court adopted the referee's findings of fact and conclusions of law and made the following conclusions: (1) That Raymond Kenik is not indebted to Keneco; ( 2 ) That Raymond Renik is the owner of 19,825 shares of stock of Keneco and Clyde Cantrell is the owner of 12,675 shares of stock of Keneco and that the total is 32,500 shares which is the total number of shares of Keneco stock issued; (3) That Keneco is indebted to Clyde Cantrell in the sum of $7,432.25 and Clyde Cantrell is indebted to Keneco in the amount of $7,948.28, and that the interest on both of said amounts would approximately offset each other and said total amounts shall be paid without interest; (4) That Raymond Kenik is the owner of 19,825 shares of stock of Keneco and Clyde Cantrell is the owner of 12,675 shares of stock of Keneco and all stock in excess thereof issued to either Raymond Kenik or Clyde Cantrell shall be cancelled and all stock in excess of such amount shall be by the holder surrendered to Keneco for cancellation; (5) That Keneco shall pay to Clyde Cantrell the sum of $7,432.25 without interest; (6) That Clyde Cantrell shall pay to Keneco the sum of $7,948.28 without interest; (7) That each of the parties hereto shall pay their own costs and attorney's fees; (8) That Keneco shall pay the costs and expenses of Mack J. Hamilton, referee, with the provision that the same would be apportioned and charged to the parties as determined by the Court; (9) That the costs and expenses of Mack J. Hamilton, referee, are allowed and approved in the amount of $3,980, which amount has been paid to him by Keneco,and Raymond ~enik shall pay to Keneco one-half thereof and Clyde Cantrell shall pay to Keneco one-half thereof. Appellant appeals from both the findings and conclu- sions and judgment and the cross-appellant appeals only from the conclusions. The task of the referee and the district court was to determine an equitable and fair redistribution of the issued stock in Keneco in proportion to the correct total owner's equity or ownership of both Kenik and Cantrell. Before the referee or district court could redistribute the stoclcthey had first to determine Kenik's and Cantrell's correct ownership of that stock. In this determination the referee and the district court were really involved in an accounting of the operations of this small corporation and the valid, many, and conflicting claims of Kenik and Cantrell. The referee and the lower court approached the factual problem in a two-step process. They first determined what Kenik's and Cantrell's equity or ownership were as of January 1, 1975. Second, they determined for both Kenik and Cantrell which of the ten stock issuances which took place in issue from November 1, 1965, until February 28, 1969, were valid stock issuances in that they were stock issuances supported by adequate consideration for the issuances of that stock. Kenik's 1965 equity or ownership in Marketing Specialties was then added to the value of the issued stock validly issued to him to deter- mine Kenikts total equity or ownership. A small addition of the 1965 equity or ownership plus the value of the validly issued stock was made on behalf of Cantrell to determine the ownership or equity. To determine the owners' equities as of January 1, 1965, the referee first calculated the assets transferred to Keneco as of January 1, 1965. He then calculated the liabilities assumed by Keneco as of the same date. By subtracting the liabilities from the assets ($44,626.00 - $33,191.31) the total owners' equi- ties as of January 1, 1965 were determined to be $11,434.69. By determining Cantrell's January 1, 1965 equity to have been $1,040 and by subtracting the $1,040 from the 1965 total owners' equity of $11,434.69, the referee was able to determine Kenik's equity to have been $10,394.69, as of January 1, 1965. The second step in determining total owners' equities was to determine which of the ten stock issuances were valid stock issuances supported by adequate consideration. The referee determined that $1,200 worth of shares (1,200 shares at $1 per value per share) had been validly issued to Kenik. This $1,200 combined with his 1965 equity of $10,394.69 gave Kenik a total equity of $11,594.69. Cantrell was found to have had $6,353.06 worth of shares validly issued to him. This $6,353.06 combined with his 1965 equity of $1,040 gave Cantrell a total equity of $7,393.06. In conclusion 111 the referee reapportioned the 32,500 shares in the same proportions as the total equities determined in conclusion 11. As a result of the reapportionment, Kenik was awarded 61 percent or 19,825 of the total 32,500 shares of stock; Cantrell was awarded the remaining 39 percent or 12,675 shares. In substance the district court adopted all of the referee's findings and amendments to his findings. Two peripheral questions of law are argued by the appel- lants. We look at them before considering the basic issue pre- sented us on this appeal. First, they argue Kenik's acceptance and retention of the stock issuances was ratification. Second, they contend Kenik's claim of fraud (if proven) is barred by the two year statute of limitations, section 93-2607(4), R.C.M. 1947. We disagree and find no merit in those positions. Cantrell argues that because Kenik signed, accepted and retained the stock issuances that this amounted to ratifi- cation by acceptance of the benefits (i.e., the stock issuances). It is true as contended by Cantrell that " * * * Nonassenting stockholders also may be estopped by acts recognizing and amount- ing to an acquiescence in, or ratification of, the irregular issue * * *." 18 Am Jur 2d, Corporations 5 251, p. 774. See also 19 C.J.S. Corporations § 1016 et seq.; State ex rel. Howeth v. D. A. Davidson & Co., 163 Mont. 355, 517 P.2d 722; American B. & T. Co. v. Farmers' E. & M. Co., 63 Mont. 612, 208 P. 594. Ratification, however, is valid only if all of the material facts are known. "The general rule as to ratification by accep- tance of benefits, of course, applies only where the corporation through its proper officers has knowledge of the facts, and not where it receives and retains the benefits of the unauthorized act or contract in ignorance of the facts, and re- pudiates the act or contract when it acquires knowledge thereof * * *." 19 C.J.S. Corporations 5 1020, p. 503. Similarly, the Montana Supreme Court has held that "Knowledge is an essential element of 'ratification by acceptance of benefits.'" Alward v. Broadway Gold Min. Co., 94 Mont. 45, 20 P.2d 647, 650, citing Stanton v. Occidental Life Ins. Co., 81 Mont. 44, 261 P. 620. Kenik had no knowledge that Cantrell was not going to adjust the shares issued to Kenik, as Cantrell said he would; Kenik did not ratify the issuances by signing, accepting and retaining them. Cantrell is estopped from the use of the statute of limitations. Estoppel is used to promote justice, honesty, fair dealing and to prevent injustice. Morris v. Langhausen, 155 Mont. Whenever possible, courts will construe statutes of limitations so as to prevent hardship. State ex rel. Steinfort v . District Court, 111 Mont. 216, 107 P.2d 890. This Court believes that Kenik has established the six essential elements of estoppel including: (1) There must be conduct--acts, language, or silence--amounting to a representa- tion or a concealment of material facts. (2) These facts must be known to the party estopped at the time of his said conduct, or at least the circumstances must be such that knowledge of them is necessarily imputed to him. (3) The truth concerning these facts must be unknown to the other party claiming the benefit of the estoppel, at the time when it was acted upon by him. ( 4 ) The conduct must be done with the intention, or at least with the expectation, that it will be acted upon by the other party, or under such circumstances that it is both natural. and probable that it will be so acted upon. This is clearly the case here. Cantrell arranged ten stock issuances between November 1, 1965 and February 28, 1969. The record indicates that Kenik believed he was not getting his fair share of the issued stock. When he complained about the stock issuances, Cantrell told him that he, Cantrell, was honest and that he was going to make it right; that Cantrell knew what he was doing and it would be taken care of; and that this was a matter of bookkeeping and that things would get straightened out. As a result, Kenik was lulled into a sense of security that "everything would get straightened out." Consequently, his posi- tion was changed for the worse. Had he not been lulled into a sense of security, he could have prevented the wrongful issuance of stock to Cantrell. He also could have brought his action much sooner and not have been faced with a statute of limitations problem. The briefs and positions of appellant and cross-appellant present to us the basic question of whether there was suffi- cient evidence to support the district court's findings, conclusions of law and judgment. This case is primarily a question of fact. Our duty on this appeal is to review the findings of fact and conclusions of law. This we have done from the findings of the referee adopted by the Court, from the findings of the district court, and from the transcript that included direct and cross-examination of the referee as to his findings. We determined that the findings and conclusions of law and judgment are supported and justified by evidence. Johnson v . Jarrett, 169 Mont. 408, 548 P.2d 144, 33 St. Rep. 320. In short, there was evidence presented to the referee and to the district court that was in conflict, but that evidence was substantial and credible. That evidence supports the court's findings and judgment. were The referee's findings/adopted by the district court, the district court's findings and judgment are sufficiently sup- ported by evidence before the referee and district court. Further the direct and cross-examination of the referee as to the basis and reason for his findings and conclusions of fact are before this Court in the transcript of the cause. Our Court, as recently as Kearns V. McIntyre Construction Co., Mont. P.2d , 34 St.Rep. 703 (July 19771, and -' - cases cited there, restated the rule that we need only determine whether there is substantial evidence to support the findings and we will notreverse such findings unless there is a clear prepon- derance of evidence against the findings. See Cope v. Cope, 158 Mont. 388, 493 P.2d 336; Smith v. Krutar, 153 Mont. 325, 457 P.2d 459, and Spencer v. Robertson, 151 Mont. 501, 445 P.2d 48; Crncevich v . Georgetown Recreation Corporation, 168 Mont. 113, 541 P.2d 56. Most if not all of the testimony is Kenik's statements against the statements of Cantrell and the documentation con- cerned. Clearly, this evidence is conflicting. See McGuire v. American Honda Company, Mont . , 566 P.2d 1124, 34 St.Rep. 632. Just as clearly there is not a preponderance of evidence against the court's findings and judgment. / The judgment is affirmed. Paul G. Hatfield. We concur: - Justices C/

September 16, 1977

ef207fea-b600-4574-a514-babb952ee2ed

CAPITAL HILL SHOPPING CENTER v MI

N/A

13233

Montana

Montana Supreme Court

No. 1.3233 I N THE SUPREME COURT O F THE STATE O F MONTANA 1977 CAPITAL HILL SHOPPING CENTER ASSOCIATES, a l i m i t e d p a r t n e r s h i p , Defendant and Third-Party P l a i n t i f f and Appellant, W. R. MILES, J R . , Third-Party Defendant, and Respondent. Appeal from: D i s t r i c t Court of t h e F i r s t J u d i c i a l D i s t r i c t , Honorable P e t e r G. Meloy, Judge p r e s i d i n g . Counsel of Record: For Appellant: Loble, P i c o t t e , Pauly, Helena, Montana L e s t e r Loble, I1 argued, Helena, Montana For Respondent: Mahan and S t r o p e , Helena, Montana Thomas H. Mahan argued, Helena, Montana Submitted: January 18, 1977 c q ? :. ,$j5[ F i l e d : '- ' Hon. Harold W. Coder, J r . , d i s t r i c t judge, delivered the Opinion of the Court. This Court i s asked t o review a determination by the d i s - t r i c t court, Lewis and Clark County, denying l i a b i l i t y of s e l l e r f o r attorney fees incurred by the purchaser of a shopping center i n defense of a claim by a tenant asserting an exclusive lease. The f a c t s , o r so much of them a s are necessary t o s a t i s f y t h i s inquiry are: Third party defendant and respondent W. R. Miles, Jr. (Miles) promoted and developed the Capital H i l l Shopping Center i n Helena and i n 1964 leased space t o W. A . Brown, Jr . (Brown) , f o r the operation of a card and g i f t shop. The lease was renewed in 1970 f o r a f i v e year term. During Brown's tenancy he requested and received from Miles an o r a l agreement t h a t during the l i f e of t h i s tenancy, Brown would have the only card and g i f t shop i n the center. I n June 1971, Miles sold the center t o appellant, Capital H i l l Shopping Center Associates for $1.6 million and an addi- t i o n a l $150,000 t o serve a s a consultant t o Capital H i l l f o r a-period of 5 years. The contract for s a l e executed by Miles, a s s e l l e r , and Capital H i l l , a s buyer contained, i n t e r a l i a , the following: "4. Warranties. S e l l e r represents and warrants as t o the following, which warranties s h a l l survive the closing hereunder * * *: "* 7 ' c * "4.10 9~ * >k There a r e no f a c t s i n existence on the date hereof and known t o the S e l l e r which might reasonably serve a s a basis f o r any material l i a b i l i - t i e s o r obligations not disclosed i n t h i s agreement o r i n exhibits hereto. "4.1 S e l l e r in c e r t i f i c a 3 N o representations o r warranties by t h i s agreement o r any document, statement, t e o r schedule furnished o r t o be furnished t o the Buyer pursuant hereto o r i n connection with the transactions contempla ted hereby, contain or w i l l con- t a i n any untrue statements of a material f a c t o r w i l l omit t o s t a t e a material f a c t necessary t o make the statements o r f a c t s contained therein not misleading. Except a s is expressly herein otherwise provided, the representations and warranties of the S e l l e r a s s e t f o r t h i n t h i s agreement s h a l l be t r u e on and a s of the date hereof and the closing date a s though such representations and warranties were made on and a s of each such time. "5. Indemnification. The S e l l e r agrees t o and s h a l l indemnify the Buyer, i t s successors and assigns, - - i n respect of each of the following matters, which indemnification s h a l l be i n addition t o any other r i g h t s of Buyer hereunder: "5.2 Any damage or deficiency resulting from any misrepresentation, a breach of warranty, o r n o n f u l f i l l - ment of any agreement on the p a r t of the S e l l e r under t h i s agreement, o r from any misrepresentation i n o r omission from any instrument furnished o r t o be furnished t o the Buyer hereunder or i n any exhibit t o t h i s agree- ment, except t h a t such idemnification under t h i s sub- paragraph s h a l l not exceed the greater of the t o t a l amount owed t o S e l l e r pursuant t o t h i s agreement a t the date of notice t o S e l l e r of such damage o r deficiency. "5.3 A l l costs and expenses r e l a t i v e t o any actions, s u i t s , proceedings, demands, assessments o r judgment incident t o any of the foregoing, including reasonable attorney's fees. "8. Possession; Closing. "8.4 When a l l such prorations have been made o r agreed upon, the p a r t i e s s h a l l complete the closing of the s a l e transaction by delivering: "(a) To the Buyer " ( i i ) A l l leases, subleases o r other documents respecting the Shopping Center. "(v) A l l other agreements and leases o r sub- leases affecting the Shopping Center (or copies of t h e same c e r t i f i e d by S e l l e r oq the holder thereof) .I' I Subsequently, Capital H i l l cancelled an existing lease l and on July 30, 1972 executed a prelease agreement with a party named Hatch's f o r the purpose of opening a card and g i f t shop. Whereupon Brown n o t i f i e d Capital H i l l o r a l l y , and l a t e r i n writing, t h a t he possessed an "exclusive" lease. Notwith- standing such notice, Capital H i l l proceeded under i t s prelease agreement and finalized i t s lease with Hatchl,s on August 15, 1972. Brown then sued Capital H i l l ; Capital H i l l , i n turn, tendered the defense t o Miles, which tender was refused. Capital H i l l then joined Miles a s t h i r d party defendant. Before t r i a l , the issues raised by Capital ill' s ' t h i r d - party pleadings were severed by s t i p u l a t i o n , and the jury then returned a verdict i n favor of Capital H i l l against Brown. Thereafter, by bench t r i a l , the issues involving Miles' l i a b i l i t y t o Capital H i l l were resolved i n favor of Miles. The t r i a l court found: ( I ) "Miles advised Brown t h a t he, (Brown) would, a t and during the time he was a tenant, have the only card and g i f t shop i n the center. Brown believed t h a t he had an exclusive t o the only card and g i f t s t o r e based upon the con- versation with Miles'!, and (2) " A t the time of the negotiations f o r s a l e t o Capital, Miles represented t h a t there were no r e s t r i c - t i v e clauses i n Brown's lease. Capital understood a t t h a t time, and up t o the time Brown informed Capital t h a t he had an exclu- sive, t h a t there was no exclusive i n ~ r o w n ' s lease." Respondent Miles i n support of the t r i a l c o u r t ' s deter- mination, argues: a) That the o r a l agreement between Miles and Brown was not enforceable against Capital H i l l , because the jury said so; t h a t , given i t s v a l i d i t y between Miles and Brown, the o r a l agreement terminated upon the s a l e by Miles of the center t o Capital H i l l ; therefore, without an enforceable exclusive r i g h t there was no violation by Miles of the indemnity agreement; b) That such exclusive r i g h t is void under the s t a t u t e of frauds since it was not reduced t o writing; c ) Assuming t h a t Miles' f a i l u r e t o disclose violated the indemnity agreement, h i s l i a b i l i t y was cancelled by ~ c u w n ' s notice t o Capital H i l l one year a f t e r the s a l e , and t h a t Capital H i l l , therefore, was responsible f o r i t s own damages inasmuch it could have avoided the s u i t by leasing t o someone other than a card or g i f t shop, thus avoiding any c o n f l i c t with Brown's i n t e r e s t . The vice of t h i s rationale, a s we view it, i s t h a t the o r a l agreement i s declared t o be dead f o r the purpose of relieving Miles of h i s l i a b i l i t y a s an indemnitor, but must immediately t h e r e a f t e r be resurrected t o support the proposi- tion t h a t Capital H i l l must avoid it by leasing t o some one other than a card and g i f t shop. Thus, what we have is an obligation on the part of Capital H i l l t o l i t i g a t e the v a l i d i t y of a verbal agreement t o which it was not a party; the outcome served t o s t r i p Capital H i l l , as the v i c t o r , of i t s warranties and indemnifications f o r which it had bargained under i t s s a l e agreement. Capital H i l l argues that Miles' failure to disclose t o it, during the sale negotiations, the existence of the oral he agreement between/and Brown regarding the exclusive nature of Brown's lease was violative of the warranty provisions of their sale agreement; that Miles' failure t o accept the tender of defense of Brown's s u i t against it constituted a breach by Miles of h i s duty t o indemnify; and the notice by Brown t o Capital H i l l one year a f t e r the sale did not cure Miles' defalca- tions. W e agree. I n i t i a l l y , we believe the existence of the oral agreement between Miles and Brown was a fact of sufficient materiality t o require disclosure t o Capital H i l l during the sale negotia- tions and the failure of Miles to do so was an omission within the purview of the warranty provisions s e t out above. Unquestionably, had the fact of t h i s agreement been known t o Capital H i l l a t the time of the negotiations, i t s existence would have weighed heavily upon Capital ill's determinations t o enter into the purchase and its nondisclosure served no interest other than that of Miles. The warranty and indemnity provisions were i n that agreement t o protect the buyer from the very thing that came t o pass---the assertion of a claim by a third party against the buyer, which claim draws i t s sustenance from an unwritten and unrecorded agreement between such third party and the seller. A covenant of warranty is for the purpose of indemnifying the purchaser against a loss or injury he may sustain by reason of a defect i n the vendor's t i t l e . Davis v. Andrews, (Texas Ct.. of Appeals 1962), 361 S.W.2d 419. This i s , w e think, expressive of the general rule. Fagan v. Walters, 115 Wash. 454, 197 P. 635 (1921); Jones v. Grow Investment and Mortgage Co., 1 1 Utah 2d 326, 358 P.2d 909, 911 (1961); Matlock v. Wheeler, (Ckla. 1957), 306 P.2d 325; Newmyer v. Roush, 21 Idaho 106, 120 P. 464 (1912); Reinhardt v. Meyer, 153 Colo. 296, 385 P.2d 597 (1963). Nor do we believe t h a t Brown's notice t o Capital H i l l of h i s purported exclusive lease, coming, a s it did, some t h i r t e e n months a f t e r the s a l e by Miles t o Capital H i l l could e f f e c t i v e l y relieve Miles of h i s l i a b i l i t i e s under the express warranty and indemnity provisions of the s a l e agreement. For whatever e l s e may be said of Brown's communication, it is s u f f i c i e n t t o observe t h a t , a s a notice, it came too l a t e . Nor do we believe the indemnity language s e t out above, can be construed t o mean anything other than what it plainly s e t s out. ~ r o w n ' s s u i t against Capital H i l l was f o r the enforcement of some r i g h t which arose under an alleged agreement between Brown and Miles. A s an indemnitor under the s a l e s agreement, Miles' l i a b i l i t y t o Capital H i l l arose a t the time of the execution of t h a t agreement, and no subsequent notice, o r cornrnuni- cation by Brown t o Capital H i l l would serve t o v i t i a t e t h a t l i a b i l i t y . A t the t i m e of ~ r o w n ' s s u i t against Capital H i l l , and the tender of defense by Capital H i l l t o Miles, Miles' obligation arose t o defend Capital i ill's t i t l e against such claim. A s an indemnitor, Miles was not e n t i t l e d , a s a matter of subjective judgment, t o make a determination t h a t Brown's claim was without merit; nor was he e n t i t l e d a t t h a t time t o make an independent determination regarding h i s l i a b i l i t y t o Capital H i l l , a s an indemnitor under the terms of the s a l e s agreement. Left i n i t s present stance, t h i s case would have Capital H i l l indemnifying Miles notwithstanding the express contractual l i a b i l i t i e s of Miles f o r which Capital H i l l bargained and paid consideration. I n view of the e x p l i c i t tender of the defense by Capital H i l l and i t s rejection by Miles, and the subsequent t h i r d party pleading, we need not consider notice, i f any, which would be required t o r a i s e Miles' l i a b i l i t y a s an indemnitor. Ireland v. Linn County Bank, 103 Kan. 618, 176 P. 103, 2 A L R 184 (1918); Miller v. N e w York O i l Co., 34 Wyo. 272, 243 P. 118 (1926); Boston and Maine Railroad v. Bethlehem S t e e l , 311 F.2d 847, 849 (1963); Henderson Realty v. Mesa Paving Company, 27 Ariz. App. 299, 554 P.2d 895, 897 (1976). Nor need we be concerned regarding the v a l i d i t y of contracts f o r indemnification; and t h a t they a r e t o be " l i b e r a l l y construed i n favor of the party intended t o be indemnified." Lesofski v. Ravalli Co, Electric Coop., 151 Mont. 104, 107, 439 P.2d 370 (1968), and a u t h o r i t i e s c i t e d therein. The decision of the d i s t r i c t court is reversed and dismissed. Judge, s i t t i n g f o r M r . J u s t i c e John Conway Harrison. W e Concur: - -, n , 1 ,"" :.;/A& Chief ~ u s t l c e I N T H E SUPREME COURT O F THE STATE OF M O N T A N A No. 13233 CAPITAL HILL SHOPPING CENTER, ASSOCIATES, a l i m i t e d p a r t n e r s h i p , Defendant and Third-Party P l a i n t i f f and Appellant, V S . W. R. MILES, J R . , ~ h i r d - p a r t y Defendant, OCT- 3 I977 and ~ e s p o n d e n t . " CLERK OF SUPREF,$,riE COURT S-TAT-E QE iMxxax.gp!A O R D E R IT IS O R D E R E D t h a t t h e l a s t sentence of t h e above named opinion i s d e l e t e d and t h e following paragraph i n s e r t e d i n its place: "The d e c i s i o n of t h e d i s t r i c t c o u r t i s reversed and t h e cause remanded t o t h e d i s t r i c t c o u r t f o r t h e determination of a reasonable a t t o r n e y s f e e f o r p u r c h a s e r ' s a t t o r n e y t o be paid by seller and e n t r y of judgment thereon." D A T E D t h i a g ? ! a * of September, 1977. Hon. Harold W. Coder, District \ Judge, s i t t i n g i n p l a c e of M r . J u s t i c e John Conway Harrison. r-- - 7 /"

September 8, 1977

b0eb059e-55d3-4514-a68a-1330628368f4

Matter of J. F.

2016 MT 15N

DA 15-0204

Montana

Montana Supreme Court

DA 15-0204 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 15N IN THE MATTER OF: J.F., Respondent and Appellant. APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DI 15-017 Honorable Ingrid G. Gustafson, Presiding Judge COUNSEL OF RECORD: For Appellant: Kathryn McEnery, McEnery Law Offices, P.C., Hot Springs, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Micheal S. Wellenstein, Assistant Attorney General, Helena, Montana Scott Twito, Yellowstone County Attorney, Kevin Gillen, Deputy County Attorney, Billings, Montana Submitted on Briefs: December 16, 2015 Decided: January 19, 2016 Filed: __________________________________________ Clerk January 19 2016 Case Number: DA 15-0204 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 J.F. appeals an order entered by the Thirteenth Judicial District Court, Yellowstone County, involuntarily committing him to Montana State Hospital (MSH) for a period not to exceed three months. We affirm. ¶3 On February 22, 2015, eighteen-year-old J.F. was admitted to the Billings Clinic Psychiatric Center (Billings Clinic) by the police for disruptive behavior reported by his family after they witnessed him repetitively striking his head against a steering wheel. J.F. had also recently gotten into a physical altercation with his father and damaged property at his sister’s house. J.F. was no longer welcome at either his parents’ or sister’s home because they were fearful of his behavior. J.F. had been a patient of the Billings Clinic until he reached age eighteen, when he began refusing treatment because he thought he did not need it. After being admitted to the Billings Clinic, J.F. refused medication, acted sexually inappropriate by removing his clothing and propositioning staff, responded to nonexistent voices, and attempted to leave. ¶4 On February 27, 2015, psychiatrist Dr. Amy Schuett (Dr. Schuett), acting as the court appointed professional person, evaluated J.F. and reported her opinion to the District Court. In her report, Dr. Schuett stated J.F. suffers from the mental disorder of 3 schizophrenia and that J.F. is paranoid, has auditory hallucinations, and is disorganized in his thought, behavior, and speech. Further, Dr. Schuett commented that J.F. is a threat to himself, refuses treatment, and denies the existence of his symptoms. Dr. Schuett recommended commitment to MSH as the least restrictive treatment option for J.F. because J.F. was unable to protect or care for himself, had recently begun and dropped out of college, was unemployed, and living in his vehicle. On March 2, 2015, the District Court issued an order involuntarily committing J.F. to MSH for a period not to exceed three months. A notice of pending discharge, ending J.F.’s commitment, was filed with the District Court on April 8, 2015, and set a tentative discharge date of April 13, 2015. ¶5 J.F. raises two issues on appeal. The first issue is whether the District Court relied on sufficient evidence to support J.F.’s involuntary commitment. “If the court determines that the respondent is suffering from a mental disorder, the court shall then determine whether the respondent requires commitment” based on a determination of “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.” Section 53-21-126(1)(a), MCA. The standard of proof is beyond a reasonable doubt with respect to any physical facts or evidence and clear and convincing evidence as to all other matters and a Respondent’s mental disorder must be proved to a reasonable medical certainty. Section 53-21-126(2), MCA. ¶6 Here, the District Court reviewed evidence that J.F. suffered from the mental disorder of schizophrenia and that, because of that disorder, he was not able to provide food, clothing, or shelter because he was unemployed and not welcome at his family’s 4 homes; he was not able to provide for his own health because he refused medication and treatment and denied his symptoms; and he was not able to provide for his own safety because he was engaging in self-harm. We conclude that the District Court relied on sufficient evidence that supported J.F.’s involuntary commitment. ¶7 The second issue J.F. raises on appeal is whether the District Court’s reliance on hearsay evidence constituted reversible plain error. J.F. argues the District Court admitted hearsay evidence from his family members, who were not present at his commitment hearing, when it allowed Dr. Schuett to testify as to what she had been told by his parents and sister. We generally refuse to review an issue on appeal that a party failed to object to at the trial court. State v. Lenihan, 184 Mont. 338, 341, 602 P.2d 997, 999 (1979). At the District Court, J.F. did not object to the admission of evidence introduced by Dr. Schuett. We will not fault a trial court for an error where that court has not been given the opportunity to rule on the admissibility of evidence or correct itself. State v. Vukasin, 2003 MT 230, ¶ 29, 317 Mont. 204, 75 P.3d 1284 (quotation and citations omitted). ¶8 We invoke the plain error doctrine sparingly to reverse an unpreserved claim of error only if the appealing party: 1) shows that the claimed error implicates a fundamental right and 2) firmly convinces this Court that a failure to reverse the claimed error would result in a manifest miscarriage of justice, leave unsettled the question of the fundamental fairness of the trial or proceedings, or compromise the integrity of the judicial process. State v. Favel, 2015 MT 336, ¶ 23, 381 Mont. 472, ___ P.3d ___ (quotation and citations omitted). J.F.’s argument is not preserved for appeal and we decline to invoke the plain 5 error doctrine to reverse because we are not firmly convinced that a failure to do so will result in a manifest miscarriage of justice, leave unsettled the question of fundamental fairness, or compromise the integrity of the judicial process. ¶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/ JAMES JEREMIAH SHEA /S/ BETH BAKER /S/ JIM RICE

January 19, 2016

36289182-d5ad-466e-8737-8253037afbbc

ALPHA REAL ESTATE v AETNA LIFE

N/A

13776

Montana

Montana Supreme Court

No. 13776 I N THE S U P R E M E COURT O F THE STATE O F MONTANA 1977 A L P H A REAL ESTATE DEVELOPMENT, I N C . , P l a i n t i f f and Appellant, -vs- AETNA LIFE & C A S U A L T Y C O M P A P T Y , Defendant and Respondent. Appeal from: D i s t r i c t Court of t h e Fourth J u d i c i a l D i s t r i c t , Honorable Edward T. Dussault, Judge presiding. Counsel of Record: For Appellant: Jordan, Sullivan and Baldassin, Missoula, Kontana Lee Jordan argued, Missoula, Montana For Respondent : Garlington, Lohn and Robinson, Missoula, Montana Gary Graham argued, Missoula, Montana Submitted: September 2 2 , 1977 Decided: o c i 1371 r l - G * V J q Filed: b L i 6 % I , , M r . Justice John Conway Harrison delivered the Opinion of the Court: This i s an appeal from an order of the d i s t r i c t court, Missoula County, granting summary judgment t o defendant. Plaintiff Alpha Real Estate Development, Inc . (Alpha) brought an action against i t s insurance c a r r i e r , Aetna Life and Casualty Company (Aetna) t o recover on a certain insurance policy for the t h e f t of a commercial carpet cleaner. Aetna moved for summary judgment on the ground the policy expressly excluded coverage for theft of such equipment. B y its order of February 3, 1977, the d i s t r i c t court granted Aetna's motion. Alpha appeals. A commercial carpet cleaner valued a t $1400 t o $1500, owned and utilized by Alpha i n the maintenance of i t s apartment building, was stolen on or about June 7, 1975. The carpet cleaner was used exclusively t o clean and maintain the hallway carpet i n the apartment building. A t that time, Alpha was covered by a property insurance policy issued by Aetna. Following the loss, Alpha submitted a claim t o Aetna for reimbursement due t o the loss of the carpet cleaner. The claim was denied on the ground the cleaner was not an "integral part of a building or structure" covered by the policy, and a s such, was expressly excluded from t h e f t coverage by the terms of the policy. The pertinent portion of the policy, Form MLB-101, provided : "I. INSURING AGREEMENT "This policy insures against a l l risks of direct physical loss to Coverage A - Building(s) , subject t o the provisions and stipulations herein and in the policy of which this,- form i s made a part. "11. P R O P E R T Y COVERED "When the insurance under t h i s policy covers buildings, such insurance shall also cover a l l additions and extensions attached thereto; a l l fixtures, machinery and equipment constituting a permanent part of and pertaining t o the service of the building; materials and supplies intended for use i n construction, alteration o r repair of the buildings, yard fixtures; personal property of the insured a s landlord used for the maintenance or service of the described buildings * * *. "VI . EXCLUSIONS ''This policy does not insure under t h i s form against : "D. Loss caused by: 5 theft (including but not limited t o burglary and robbery) of any property which a t the time of loss is not an integral part of a building or structure * * *." A t the hearing on the motion for summary judgment, Aetna argued the carpet cleaner was not an "integral part of a building or structure1' such that its t h e f t was expressly excluded by Clause V I , D. , 5 of Aetna' s Form MLB-101. The d i s t r i c t court granted summary judgment for defendant Aetna. Thus, the determinative inquiry is whether the d i s t r i c t court was correct in granting summary judgment t o defendant on the basis of the language of the insuring agreement. Alpha's position is that the carpet cleaning machine was an "integral part" of the structure of the insured apartment building, and i s expressly covered under the general provision, Clause 11. P R O P E R T Y C O V E R E D as "personal property of the insured as landlord used for the maintenance o r service of the des- cribed buildings':. The policy, it is contended, i s ambiguous i n i t s terms a s , on the one hand, it provides for wide coverage, including fixtures and nonf ixture maintenance equipment, but on the other hand negates such coverage in the case of the loss of such items due t o theft. When a contract i s thus ambiguous, the ambiguity should be resolved i n the insured's favor. Aetna' s argument refutes the positions taken by Alpha and asserts, i n essence, that the contract is plain and clear upon its face in excluding nonintegral items of personal property, such as a commercial carpet cleaner, from t h e f t coverage. A n "integral part" it is maintained, is something akin t o a fixture, such a s a heating device, a door, a water pump, etc. There being nothing for the court t o construe, the d i s t r i c t court was correct in granting summary judgment. W e do not c i t e , nor have we been able t o find, any case authority which precisely defines the term "integral part" i n the context of the dilemma presented by t h i s case. The insurance contract i t s e l f nowhere defines the term. The situation is further clouded by the fact the clause of general coverage refers to "fixtures" and various items of personalty, such as construction, service, and maintenance equipment. The sole reference t o the phrase "integral part" appears i n the exclu- sionary clause. The general and exclusionary clauses, read together, 9ield a contractual ambiguity necessitating judicial construction. Indeed, the d i s t r i c t court appears t o have recognized the ambiguity engendered by the contractual language i n its mder granting summary judgment. - 4 - Therefore our discussion s t a r t s with the proposition the contract in question contains a patent ambiguity. W e focus on the language of the exclusionary clause in the light of the general provisions. In Terry v. National Farmers Union Life Ins. Co., 138 Mont. 333, 356 P.2d 975 (1960), the Court stated: " W e keep in mind that in construing an exclusion policy, in case of uncertainty, every doubt should be resolved i n favor of the insured, and the policy should be construed s t r i c t l y against the insurer company. * * * Otherwise stated a contract of insur- ance w i l l be cons trued s t r i c t l y against the insurer and liberally in favor of the insured. * * *I1 138 Mont. 339. See also: Johnson v. Equitable Insurance Co., 142 Mont. 128, 381 P.2d 778 (1963) ; Holmstrom v. Mutual Benefit Health & Accident Ass'n., 139 Mont. 426, 364 P.2d 1065 (1961). Further, it is uncontroverted that in construction of a contract a particular clause of a contract is subordinate to the general intent of the contract. Section 13-716, R.C.M. 1947. For a general discussion of this rule see: 17A C.J.S. Contracts, 5 9 294(b), 295 (f) . Both of the rules find applicability here. The conclusion to be drawn from a reading of the general provision i s that service and maintenance equipment, including an item such as a commercial carpet cleaner, i s to be grouped together with fixtures and the buildings themselves for purposes of coverage. W e find such language governs the interpretation and defines the parameters of the term "integral part" in the exclusionary clause. Hence, the carpet cleaner was covered as an "integral part1' of the apartment building. To ratify defendant Aetna's position would be to l i m i t theft coverage t o items virtually incapable of being stolen. This Court i n the case of St. Paul Fire & Marine Ins. Co. v. Thompson, 150 Mont. 182, 187, 433 P.2d 795, adopted the t e s t for interpreting t h i s contract: "* * * Again, looking t o the Kansas rule which we have adopted, we find that, 'the t e s t is not what the insurer intended the words of the policy t o mean but what a reasonable person in the position of an insured would understand them t o mean. ' " I f an insurer desires t o l i m i t its coverage i n certain areas, it should employ language clearly and precisely out- lining such restrictions . Johnson v. Equitable Insurance C o . , supra. The order granting summary judgment is reversed and the cause is remanded for proceedings in accordance with t h i s opinion. W e Concur: M r . Justice Frank I. Haswell, dissenting: I would affirm the d i s t r i c t court judgment. The theme of the majority opinion is that the insurance policy is ambiguous and doubts concerning i t s meaning must be resolved i n favor of the insured. I n m y view the policy coverage is unambiguous, clear and certain leaving no room for judicial construction of i t s terms. The policy contains a specific exclusion for theft. The operative language of t h i s exclusion reads: "EXCLUSIONS. This policy does not insure * * * against * * * loss caused by * * *theft * * * of any property which * * * is not an integral part of a building or structure * * *.It A s I see it, a carpet cleaner simply cannot be considered a part of a building or structure without doing violence t o the plain meaning of the English language. The descriptive adjective "integral" further expands the exclusion, but in no sense transforms a carpet cleaner into an "integral part of a building or structure". I n common usage, the language cannot be tortured t o a c h k such meaning in m y opinion. Nor can an ambiguity be created by reading together the general coverage clause and the specific exclusion i n my judgment. A s i n a l l insurance policies excluding certain perils, the general coverage clause is stated in broad terms and the exclusionary clause specifically excludes those p e r i l s for which insurance is not purchased. Thus the insurance policy here is neither internally inconsistent nor ambiguous i n its terms, and there is no basis in law for interpreting the contract against the insurer. This Court cannot rewrite a new policy under the guise of judicial construction contrary to that expressed in the policy agreed upon and purchased by the insured. Johnson v. Metropolitan Life Insurance Co., 107 Mont. 133, 83 P.2d 922 For these reasons, I respectfully dissent. Justice. Mr. Justice Daniel J. Shea dissenting: I agree with the foregoing dissent of Mr. Justice Frank I . Haswell.

October 24, 1977

963527e2-52ef-4ead-9fc9-7dbdbe8111f4

TAYLOR v PETRANEK

N/A

13665

Montana

Montana Supreme Court

No. 13665 IN THE SUFREBQ7 COURT OF THE STATE OF MONTANA 1977 JAMES C. TAYLOR, Plaintiff and Respondent, CHARLES PETRANEK and MRS. CHARLES PETRANEK, his wife, and GEORGE A. FETMNEK and MRS. GEORGE A. FETRANEK, his wife, Defendant and Appellant. Appeal from: District Court of the Tenth Judicial District, Honorable Nat Allen, Judge presiding. Counsel of record: For Appellant: Bradley Parrish argued, Lewistown, Montana For Respondent: Morrow, Nash and Sedivy, Bozeman, Montana James Morrow argued, Bozeman, Montana Filed: Submitted: June 8, 1977 ! - , . , Decided: '( ,'I Clerk Mr. Justice Frank I. Haswell delivered the Opinion of the Court. ~efendants appeal from a decree quieting title in plaintiff to certain land in north central Fergus County and denying defend- ants either a public or private easement across plaintiff's ranch. Plaintiff is James C. Taylor, the successor in interest to his father and brother who purchased the "Horse Ranch" south- east of Suffolk in Fergus County, Montana in 1946. Defendants are Charles and George A. Petranek and their respective wives; they own a ranch adjacent to plaintiff's on the north and east sides. A road, known as the Suffolk-East Road, runs easterly from the town of Suffolk toward the Petranek ranch. The first six miles of this road is a dedicated county road. The next seven miles runs easterly along the top of a ridge, over a hill, down into Murphy's Coulee, across the coulee and through a school section where it splits. One fork joins a trail which leads south for about five miles to the "Horse Ranch" buildings; the other fork leads east to the Petranek ranch buildings, then becomes a trail leading south to the "Horse Ranch" buildings. Initially, the "Horse Ranch" lands did not include any part of the Suffolk-East road. However, in the early 19401s, the Taylor family's predecessor in interest expanded the "Horse Ranch" holdings. Today the Suffolk-East road passes through a part of the "~orse Ranch" property. In 1914 the Petraneks' father purchased the land upon which defendants' ranch buildings are now located. At that time the country between Suffolk and the Petranek ranch was occupied by homesteaders who forged trails across the countryside to reach Suffolk by the shortest possible routes. As the homesteaders' ranches were fenced in, a common practice developed among them to allow one another to cross the fenced lands when traveling to ~uffolk. Although many trails covered the countryside, the Suffolk-East road was the main route into Suffolk from that area. By the mid-1920's most of the homesteaders' operations had failed. heir fences fell into disrepair and were eventually re- moved. For awhile, the country through which the Suffolk-East road passes became open range. Then in 1930 defendant Charles Petranek and his father fenced in the west side of their property where it adjoins what is now the "Horse Ranch" property and installed a gate where the fence line crossed the Suffolk-East road. In 1936 Milton Butcher bought the property immediately west of the present day "Horse Ranch" and fenced in his property. After the Taylor family acquired the "Horse Ranch" in 1940, they fenced in their property and installed a gate at the point where the Suffolk-East road crosses from the Butcher property to the "Horse Ranch". In 1952 the Taylors' gate was replaced by a cattle guard. In 1973, the Butchers' removed this cattle guard and the foreman of the "Horse Ranch" installed a gate. The "Horse Ranch" foreman locked this gate from July to October, 1972, and again in October, 1973. He offered keys to the Butchers and the Petraneks, but the Petraneks refused to accept one. The Petraneks persisted in cutting locks on this gate after its closing in 1973, claiming a right to use the Suffolk-East road where it crossed the "Horse Ranch". The present lawsuit followed. Plaintiff Taylor filed a complaint seeking to quiet title to his lands under claim of ownership and denying any claim of interest in these lands by defendants or any of them. Defendants filed an amended answer in which they denied any claim of ownership in plaintiff's lands, but they asserted that the public, or in the alternative they as private individuals, had acquired an easement by prescription in the road which crossed plaintiff's property and that this road could not be closed by a quiet title action. Judge Nat Allen assumed jurisdiction and granted a pre- liminary injunction restraining defendants from going upon plain- tiff's property during the pendency of the action. Following trial by the court sitting without a jury, Judge Allen entered findings of fact, conclusions of law and a decree quieting title in plain- tiff, denying defendants' claims of public or private easement by prescription in the roadway, and enjoined defendants from asserting any interest in plaintiff's property or any claim of right to use any roadway across it. Defendants have appealed from this decree. The issues on appeal can be summarized in this manner: (1) The sufficiency of the evidence to establish a private road easement by prescription across plaintiff's land; (2) The sufficiency of the evidence to establish a public road easement by prescription across plaintiff's land; (3) Whether Fergus County is an indispensable party to defendants' claim of easement. The legal principles governing defendants' attack on the sufficiency of the evidence to support the district court's findings are clear. Rule 52(a), M.R.Civ.P., provides in pertinent part: " * * * Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses * * *." This Court's function on appeal is simply to determine whether there is substantial evidence to support the district court's findings and will not reverse them unless there is a clear preponderance of evi- dence against them. Merritt v. Merritt, 165 Mont. 172, 526 P.2d 1375; Finley v. Rutherford, 151 Mont. 488, 444 P.2d 306. The law on acquiring a public or private easement by pre- scription is equally clear: "To establish the existence of an easement by prescription, the party so claiming must show open, notorious, exclusive, adverse, continuous and uninterrupted use of the easement claimed for the full statutory period." Scott v. Wein- heimer, 140 Mont. 5 5 4 , 560, 374 P.2d 91; White v. Kamps, 119 Mont. 102, 171 P.2d 343. The controversy between plaintiff and defendants in this case boils down to whether defendants1 use of the road was adverse or permissive. To be adverse, the use must be exercised under a claim of right and not as a mere privilege or license revocable at the pleasure of the owner of the land; such claim must be known to, and acquiesced in by, the owner of the land. White v. Kamps, supra. If there has been use of an alleged easement for the full statutory period, unexplained, it will be presumed to be under a claim of right, and adverse, and will be sufficient to establish a title by prescription and to authorize the presumption of a grant. Scott v. Weinheimer, supra; Te Sellev. Storey, 133 Mont. 1, 319 P.2d 218; Glantz v. Gabel, 66 Mont. 134, 141, 212 P. 8 5 8 . This presumption exists to overcome " ' * * * the general infirmity of human nature, the difficulty of preserving the muniments of title * * * " ' and to promote the public policy of supporting long and uninterrupted possessions. Glantz v. Gabel, supra. Defendants rely heavily on this presumption. They argue that this Court in Te Selle substituted this presumption for "the tortured and burdensome definition of what is and what isn't ad- verse use contained in the White v. Kamps case". In our view, White sets out very clearly what the law on adverse and permissive use is, contrary to defendants1 assertion. The presumption upon which defendants1 rely, first adopted in Glantz, was not at issue in White.: Defendants contend that plaintiff has not overcome the presumption by adequately explaining defendants' use of plaintiff's land. Rebuttable presumptions may be overcome by other evidence, direct or indirect. Section 93-1301-5, R.C.M. 1947; Lunceford v. Trenk, 163 Mont. 504, 518 P.2d 266; O'Connor v. Brodie, 153 Mont. 129, 454 P.2d 920. Here the record is replete with testimony from both plaintiff's and defendants' witnesses that the homesteaders who initially lived in the area developed common practice of allow- ing others to cross their lands to reach Suffolk. This evidence is sufficient to support a use permissive in its inception and not under a claim of right. Although a use permissive in its inception may ripen into a prescriptive right, it cannot do so unless there is a later dis- tinct and positive assertion of a right hostile to the owner, which must be brought to the attention of the owner, and the use continued for the full prescriptive period. White v. Kamps, supra; also, see Poepping v. Neil, 159 Mont. 488, 499 P.2d 319. Here the evidence shows that when the Taylors purchased the "Horse Ranch" in 1946, they fenced in their property, inst,alled gates, and posted "No Hunting" and "No Trespassing" signs. The record does not clearly reveal who the intermediate owners of that part of the present "Horse Ranch" crossed by the Suffolk-East road were. However, in our view, the record does reveal that defendants' first distinct and positive assertion of a hostile right to the rights of the owner which was brought to the attention of the owner was when Charles Petranek cut the locked gates of the "Horse Ranch" in October, 1973. The full statutory period to establish an ease- ment by prescription did not elapse thereafter. Defendants' claim that the general public had acquired an easement across the plaintiff's land fails for the same reason. Although defendants point out that hunters occasionally used the road, plaintiff's testimony that he considered the road a private road and his foreman's testimony of posting "No ~unting" and "NO re spas sing" signs on the gates supports permissive rather than adverse use. This Court recently held that use of a road for recre- ation, hunting or fishing in itself was not sufficient to raise a presumption of adverse use or claim of right. Harland v. Anderson, (1976) Mont . , 548 P.2d 613, 33 St.Rep. 363. Additionally, this Court has considered gates which must be opened and closed by persons passing over the land as strong evidence of a mere license to the public to pass over the designated way. Kostbade v. Metier, 150 Mont. 139. 432 P.2d 382. Defendants additionally challenge the district court's find- ing that there is no instrument in writing conveying right of way across plaintiff's land on file with the Fergus County clerk and recorder. The evidence does not support defendants' contention. In summary we hold that there is substantial evidence sup- porting the district court's determination that neither the general public nor the defendants individually have acquired an easement by prescription across plaintiff's land. In view of our holding against defendants on the first two issues, the third issue becomes immaterial as it would not change the result in this case. The decree of the district court is affirmed. Justice We Concur: Mr. Justice Daniel J. Shea did not participate in this Cause.

August 17, 1977

82eeda7e-cfe9-4821-9068-18c333c7043d

STATE v BENBO

N/A

13491

Montana

Montana Supreme Court

No. 13491 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 STATE OF MONTANA, Plaintiff and Respondent, -vs- GEORGE BENBO , Defendant and Appellant. Appeal from: District Court of the Twelfth Judicial District, Honorable B. W. Thomas, Judge presiding. Counsel of Record: For Appellant: Donald A. Ranstrom argued, Chinook, Montana For Respondent : Hon. Mike Greely, Attorney General, Helena, Montana Allen Chronister argued, Assistant Attorney General, Helena William Solem, County Attorney, Chinook, Montana Submitted: April 13, 1977 Decided : 3 C T 26 19771 Filed: 3C) 26 ' Y f l Mr. Justice Daniel J. Shea delivered the Opinion of the Court. ~efendant George Benbo appeals from a conviction of felony theft under section 94-6-302(3), R.C.M. 1947, following a jury trial in the district court, Blaine County. On August 20, 1975, a complaint was signed and arrest war- rant issued from the Cascade county justice court charging defendant with two counts of felony theft under section 94-6-302(1) (a), R.C.M. 1947. Defendant was arrested in Blaine County, and without being arraigned there, he was immediately taken by the police to Yellowstone County to recover the stolen items. From there he was taken to Cascade County. He was later tried and convicted in Blaine County. Defendant's appeal contends the trial court should have granted a motion to suppress evidence and that he was denied effec- tive assistance of counsel by his retained counsel at the pretrial and trial level. He contends the trial court should have granted his motion to suppress because the complaint and arrest warrant issued from Cascade County were defective because the Cascade County justice of the peace had no jurisdiction to issue them. He relies on section 95-1503(c)(4), R.C.M. 1947, which provides: "A charge shall * * * [state] the time and place of the offense as definitely as can be done * * *." He also contends the trial court should have granted the motion to suppress evidence of statements he al- legedly made to the police while on the way to Yellowstone County fromBlaineCounty to recover the stolen guns. In this regard, he contends the police violated his rights under section 95-901(a), R.C.M. 1947, and 95-603 (d) ( 3 ) , R.C.M. 1947, which provide that upon an arrest the person must be taken "without unnecessary delay" for an initial appearance before a judge in the county where the arrest is made. The facts leading up to defendant's arrest and conviction are : On August 8, 1975, approximately 30 handguns were stolen from the Coast to Coast hardware store in Great Falls, Montana, Cascade County. A semi-automatic rifle was also stolen from the weapons room of the Great Falls police department. Defendant was not involved in either burglary. The day after the burglaries, defendant was approached in Chinook, Montana, by John Bauman, his nephew by marriage. Bauman and his brother had earlier purchased the stolen weapons. Bauman asked defendant if he would be interested in buying some "merchandise" without indicating the nature of the "merchandise1'. Defendant indi- cated he would look at the "merchandise". At his own request, Bauman borrowed defendant's pickup truck, drove it to the point near Great Falls where the handguns had been cached, picked up the guns and returned to Chinook. On August 10, after examining the weapons at Bauman's brother's home in Chinook, defendant bought the handguns and took the semi-automatic rifle to sell on consignment. Defendant later brought the weapons to Billings, Montana. On August 19, 1975, the Bauman brothers were arrested in Chinook by officers of the Great Falls police department. The offi- cers learned the weapons had been sold in Chinook to defendant, George Benbo. On August 20, 1975, a complaint was presented in Great Falls justice court, charging defendant with two counts of felony theft under section 94-6-302(1)(a), R.C.M. 1947, alleging the offenses had been committed in Great Falls. A warrant for defendant's arrest was issued by a Great Falls justice of the peace. On the afternoon of August 20, three Great Falls police officers drove to Chinook. The proceeded from there with a ~laine County deputy sheriff to a ranch south of Chinook in Blaine County where defendant was working. They arrived at the ranch at about 8 o'clock that evening. Defendant identified himself, was placed under arrest, and given copies of the complaint and the arrest warrant, both of which he read. Defendant was told he had the right to remain silent and that anything he said could and would be used against him. He also was told he had the right to an attor- ney and if he could not afford an attorney, one would be provided for him. Defendant acknowledged he understood these rights. The officers told defendant they knew he had the guns and recovery of the guns would be in his best interest. Defendant ad- mitted he had the guns and stated they were at his house in Billings. After the officers explained a warrant could be obtained allowing them to search the house, defendant indicated a search warrant would not be necessary, that he would voluntarily give them the guns. The officers then decided to go directly to Billings with defendant rather than returning immediately to Great Falls. Defend- ant went inside the ranch house to get his personal gear and returned with a small satchel. One of the officers opened the satchel and found a .36 caliber black powder pistol, one of the weapons taken in the Coast to Coast store burglary. The three Great Falls officers, with defendant in custody, left the ranch for Billings at about 9 o'clock p.m. The officers testified defendant was very cooperative and relaxed throughout the trip and that he freely engaged in a conversation covering a variety of topics. One of the officers testified he considered the conver- sation to be an interrogation of defendant, and conceded that although defendant was asked several times if he was "aware of his rights" the full "Miranda" warning was given only once, before the trip began. Defendant and the police officers arrived in ~illings shortly after midnight. After picking up a Yellowstone county deputy sheriff, they proceeded to defendant's house. ~efendant showed the officers the suitcase in which the pistols were kept, and told them the rifle was under the bed. The officers recovered the weapons, loaded them into the patrol car, and after stopping for a meal, drove to Great Falls, arriving there at 5:30 on the morning of August 21. The record does not disclosewhen, or whether, defendant was given an initial appearance before a judge in Cascade County. The action against defendant in that county was dismissed by the county attorney on September 3, 1975. The information under which defendant's conviction was obtained was filed in Blaine County on October 16, 1975. Defendant was found guilty on March 24, 1976. Following denial of his motion for a new trial, he appealed. By his motion to suppress, defendant sought to exclude all evidence gathered by the Great Falls police from the time he was arrested at the ranch. This included the gun found in the satchel, the guns recovered from his Billings house, and statements he al- legedly made during the trip from the ranch to Great Falls, con- cerning his belief or knowledge that the guns had been stolen when he purchased them. After a hearing, the district court denied the motion. At trial all of the guns were admitted into evidence, and two of the arresting officers testified defendant told them he knew or believed the guns were stolen. In his testimony, defendant denied making any statements to the officers concerning the origin of the guns. Defendant first contends the motion to suppress should have been granted because the complaint issued from the Cascade county justice court was defective. The complaint states defendant com- mitted felony theft on August 10, 1975, in Great ~alls, cascade County. Defendant contends the police knew at the time they applied for the arrest warrant out of Cascade County that he had nothing to do with the burglaries committed there and he had purchased the guns in Blaine County. Therefore, defendant argues the complaint fails to meet the requirement of section 95-1503(c)(4), R.C.M. 1947, that a charging document must state "the time and place of the offense as definitely as can be done." Here, however, the purpose of the complaint was not to charge the offense but to establish the basis for an arrest warrant. While the police knew defendant had purchased the guns in Blaine County, they also knew his truck was used to retrieve the handguns that had been hidden in Cascade County. One of the arresting offi- cers testified the complaint and arrest warrant were issued out of Cascade County for that reason. In any event, the charging document was the Information filed in Blaine County subsequent to the dismissal of the Cascade County action, and its sufficiency is not questioned. The fact that the complaint places the offense in Cascade County does not invali- date either the complaint itself or the arrest warrant issued and served upon the complaint. Defendant's second challenge to the district court's denial of his motion to suppress is grounded on the failure of the arrest- ing officers to take him before a Blaine County judge promptly after his arrest. Section 95-901(a), R.C.M. 1947, sets forth the duty of a person making an arrest to provide the arrested person with an ini- tial appearance. In relevant part ik provides: " * * * If an arrest is made in a county other than the one in which the warrant was issued the arrested person shall be taken without unnecessary delay be- fore the nearest and most accessible judge in the county where the arrest was made." Identical language, imposing the same duty, is found in section 95- 603 (d) (3) , R.C.M. 1947. Defendant was arrested in Blaine County on the Cascade County warrant, taken from there to Yellowstone County and finally jailed in Cascade County. It does not appear the arresting officers made any attempt to bring defendant before any judge for the initial appearance required by section 95-901(a), R.C.M. 1947, and 95- 603 (d) (3), R.C.M. 1947. The question becomes whether this failure to provide de- fendant with a prompt initial appearance is to have the effect of excluding the guns recovered and statements allegedly made after his arrest. The key requirement of these statutes is that an arrested person is to be taken before a judge "without unnecessary delay". The Revised Commission Comment to section 95-901 indicates the pro- vision for an appearance before a judge in the county where the arrest is made is designed to reduce the time between the arrest and initial appearance. The Comment states: " * * * [This provision] allows a first appearance in the county where the arrest is made rather than forcing the arrested person to be removed to another county for the purpose of stating the charge and setting bail. I' This Court has considered the effect of a delay between ar- rest and initial appearance in a variety of factual situations. In Cline v. Tait, 113 Mont. 475, 129 P.2d 89 (1942), a false imprison- ment action turned on whether a sheriff's failure to promptly take the plaintiff before a judge rendered the detention unlawful. This Court held that while the reasonableness of the length of the delay was a jury question, it was not unreasonable as a matter of law to wait until ordinary working hours before providing an initial ap- pearance. The judgment was reversed, and following retrial, this Court again considered the question of the reasonableness of a delay between arrest and initial appearance. In Cline v. Tait, 116 Mont. 571, 155 P.2d 752 (1945), emphasis was placed on evidence tending to show the sheriff did not intend to provide the plaintiff with a prompt initial appearance, rather than the time that transpired between arrest and initial appearance. In two cases concerning the admissibility of confessions made during a delay between arrest and initial appearance, this Court held such confessions are not rendered inadmissible solely by reason of the delay. In State v. Nelson, 139 Mont. 180, 189, 362 P.2d 224 (1961), this Court, quoting from the New Jersey Supreme Court case, State v. Pierce, 4 N.J. 252, 72 A.2d 305, stated: "'A confession is not rendered inadmissible solely by reason of a delay in taking the arrested person before a magistrate but that circumstance becomes an important factor to be given serious considera- tion in determining whether or not the confession was voluntarily made. The mere failure to follow the procedural rule, however, does not of itself destroy the voluntariness of the confession if the abuses the rule seeks to prevent did not in fact take place. ' 'I In State v . White, 146 Mont. 226, 235, 405 P.2d 761 (1965), this Court cited Nelson with approval in holding that failure to meet the statutory requirement of a prompt initial appearance is not determinative of the admissibility of a confession made in the interim between arrest and initial appearance. The state contends defendant voluntarily agreed to turn over the stolen guns and voluntarily admitted he knew they were stolen when he purchased them, and the delay between his arrest and initial appearance therefore cannot have the effect of causing the guns and statements to be excluded. Under this reasoning, the statutory requirement of an ini- tial appearance without unnecessary delay after an arrest is prac- tically meaningless. Only when a defendant can affirmatively show statements, admissions, or confessions attributed to him were either not made at all, or were involuntarily made, would the fail- ure to provide him with a prompt initial appearance be taken into account. This would put an almost impossible burden on a defendant. Furthermore, there would be no incentive for arresting officers to conform their procedures to statutory guidelines. Assurance that statements are voluntarily made is not the only objective of the requirement of a prompt initial appearance. In Nelson this Court considering a statute which required that a person arrested without a warrant was to be provided with an initial appearance without unnecessary delay, stated: "The purpose of this statute is to insure that the person arrested is advised of the charge against him in order to enable him to prepare a defense, and to protect him from being held incom- municado for protracted periods of time." 139 Mont. 188. The full range of protections afforded a prisoner at an ini- tial appearance is set forth in section 95-902, R.C.M. 1947. The duty of the court is: "The judge shall inform the defendant: " (a) Of the charge against him; " (b) Of his right to counsel; " (c) Of his right to have counsel assigned by a court of record, in accordance with the provisions of section 95-1001; "(d) That he is not required to make a statement and that any statement made by him may be offered in evidence at his trial; "(e) Admit the defendant to bail in accordance with the provisions of this code." It is necessary the defendant be informed of these rights by the court. The fact that an arrested person is read his "Miranda" rights by the arresting officers, as in the present case, does not release the officers from their obligation to provide that person with an initial appearance before a judge. Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L Ed 2d 694, 717 (1966); Commonwealth v. Tingle, 451 Pa. 241, 301 A.2d 701, 703 (1973). As the Montana cases cited above indicate, this Court has not previously emphasized the importance of the statutory requirement of a prompt initial appearance. In false imprisonment cases, this requirement has been con- sidered in the context of the reasonableness of the length of the delay between arrest and initial appearance. Cline v. Tait, 113 Mont. 475, 129 P.2d 89 (1942); Cline v. ~ a i t , 116 Mont. 571, 155 P.2d 752 (1945); Rounds v. Bucher, 137 Mont. 39, 349 P.2d 1026 In cases involving confessions made during the interim be- tween arrest and initial appearance, the requirement of a prompt initial appearance has been considered in the context of the volun- tariness of the confession. State v. Nelson, supra; State v. White, supra. In a criminal case not involving the admissibility of a con- fession, a 21 day delay between arrest and initial appearance was found to have not prejudiced the defendant in the presentation of his defense at trial. The delay was treated as having no effect on the defendant's conviction, and this Court indicated the only remedy available to the defendant was a possible false imprisonment action. State v. Johnston, 140 Mont. 111, 114, 367 P.2d 891 (1962). By their terms sections 95-603(d)(3), R.C.M. 1947, and 95- 901(a), R.C.M. 1947, impose a duty on persons making an arrest to take their prisoner "without unnecessary delay before the nearest and most accessible judge" in the county where the arrest is made. It is time to recognize the importance of this requirement. The Supreme Court of Pennsylvania has developed a test for deter- mining whether evidence obtained during a delay between arrest and initial appearance will be excluded. In Commonwealth v. Futch, 447 Pa. 389, 290 A.2d 417, 419 (1972), that court stated: "This Court has similarly been conscious of the possible adverse effects of police conduct which deviates from the unequivocal language of Rule 118 [which requires an initial appearance without unnecessary delay]. We have held that failure to comply with Rule 118 does not ipso facto render inadmissible evidence obtained by the police during the 'unnecessary delay' and that it is incumbent upon defendant to show some prejudice from the delay. [Citing cases.] While this Court has never articulated precisely what constitutes 'prejudice' in the context of 'unnecessary delay' proscribed by Rule 118, we think it appropriate to follow the federal amroach and exclude all L a . evidence obtained during 'unnecessary delay' ex- cept that which * * * has no reasonable rela- tionship to the delay whatsoever." (Emphasis and paraphrased material added.) Having considered the language of sections 95-603(d)(3), R.C.M. 1947, and 95-901(a), R.C.M. 1947, and the purposes for their requirement of a prompt initial appearance that have been articu- lated by this and other courts, we approve the test set forth above. Henceforth, the effect of a failure to take a person before a judge without unnecessary delay after his arrest is to be deter- mined as follows: When a defendant bases a motion to suppress evidence upon a claim that he was not provided a prompt initial appearance, the burden is first on the defendant to show the delay was unnecessary. The district court should focus on the diligence of the persons who made the arrest in bringing the defendant before the nearest and most accessible judge. While the length of the time between arrest and initial appearance is not determinative of the "necessity" of the delay, it is a factor to be considered. Once a defendant has established the delay was unnecessary, the burden shifts to the prosecution. The state must show the evidence obtained during the delay was not reasonably related to the delay. Absent such a showing the evidence will be excluded. Applying this test to the facts of the instant case, we conclude the pistol found in defendant's satchel before the trip to Billings began was properly admitted. The recovery of this pistol was in no way related to the delay between arrest and ini- tial appearance caused by the failure of the arresting officers to take defendant before the nearest and most accessible judge subse- quent to his arrest. The weapons taken from defendant's Billings house and the statements he allegedly made while being taken from the ranch where he was arrested and ultimately to Great Falls, however, should have been excluded. The delay was unnecessary. The arresting officers made no attempt to find an available judge in Blaine County after the arrest there. They made no attempt to find a judge in Yellow- stone County after they had taken defendant to Billings to recover the stolen guns. The officers took no action indicating in any way they intended to provide defendant with a prompt initial appearance. There is no record that defendant was brought before a judge for an initial appearance after he was taken to Great Falls. The statements allegedly made by defendant during the trip from the ranch to Billings concerning his knowledge or belief that the guns were stolen were reasonably related to the delay between arrest and initial appearance. The fact that defendant was coopera- tive after his arrest does not operate as a waiver of his right to an initial appearance and cannot be used to excuse the officers' failure to bring him without unnecessary delay before the nearest and most accessible judge. It is bare conjecture to claim that defendant's waiver of his right to remain silent and his right to counsel at that point reflects what he would have said had he been promptly brought before a judge. One of the purposes of the initial appearance is to give a defendant the opportunity to be judicially informed of the charge against him. Here, the Cascade County com- plaint which defendant read immediately after his arrest, alleged he had stolen the guns in Great Falls. Only after defendant was told by the arresting officers that they knew he had not taken the guns did defendant admit to having them. The effect of this assurance is unknown, but a judge's explanation of what the complaint on its face indicated would have eliminated any possible doubt concerning the nature or gravity of the offense charged. Since we hold for the above reasons that the district court should have granted defendant's motion to suppress the evidence gathered in Billings and statements defendant allegedly made to the arresting officers, it is unnecessary to determine whether defendant's conviction should be reversed on the ground of inade- quacy of counsel. The judgment is reversed and defendant granted a new trial in accordance with this opinion. We Concur:

October 26, 1977

05020e8d-ac7b-4a05-accd-6ebb1e04d1cb

S-W COMPANY v SCHWENK

N/A

13422

Montana

Montana Supreme Court

No. 13422 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 S-W COMPANY, Plaintiff and Respondent, FRED E. SCHWENK, JR., PACIFIC NATIONAL BANK OF WASHINGTON and SHELL OIL COMPANY, Defendants and Appellants. Appeal from: District Court of the Sixteenth Judicial District, Honorable Alfred B. Coate, Judge presiding. Counsel of Record: For Appellants: Denzil R. Young argued, Baker, Montana Moulton, Bellingham, Lbngo & Mather, Billings, Montana For Respondent: Berger, Anderson, Sinclair and Murphy, Billings, Montana Arnold Berger argued, Billings, Montana For Amicus Curiae: Fillner and Pitet, Billinas, Montana Patrick Pitet argued, Billings, Montana Submitted: May 31, 1977 D e c i d e d : / . : ' , < A 1 BUG 1 7 15n Filed: P W n m r t w 1 f d > ~ ~ : y - clerk Mr. Justice Daniel J. Shea delivered the Opinion of the Court. Fred E. Schwenk, Jr., appeals from an order of the district court granting summary judgment for S-W Company and from the denial of the district court to amend the court's findings of fact and conclusions of law. The action is on a contract involving interests in land in Fallon County. S-W Company, a promisor to. the contract, brought the action against Schwenk, Pacific National Bank of Washington and Shell Oil Company, promisees. The latter two parties are stake- holders who do not join Schwenk on appeal. John Wight was a co- promisor on the contract. He was not made a party to the action but filed a brief on leave of this Court as amicus curiae on appeal after receiving notice of the judgment of the district court. On appeal Wight requests joinder as an interested party to the action. In settlement of a former dispute, Schwenk agreed to accept the sum of $15,000 as full payment to him for his interest in the particular lands described in the agreement with S-W Company and Wight. The agreement stated: "First Party [Schwenk] shall accept the sum of Fifteen Thousand ($15,000.00) Dollars as full payment to him for his right, title, interest and claims in to the above described lands and working interest embracing those lands, which shall be paid in the following manner: One- half of the net proceeds derived by S-W Company from its working interest in and to said lands, and one-half of the net proceeds to be derived from the Wight Trust interest held by the First National Bank of Denver embracing the said de- scribed lands." (Bracketed material added.) According to the agreement, instruments regarding the interests in the land were to be held in escrow and delivered to S-W Company "when the terms and conditions of this agreement and the escrow agreement have been complied with fully." Shell Oil, the producer of oil from the lands, later made monthly payments towards the $15,000 debt, applying one-half the monthly income of S-W Company. Wight Trust funds, meanwhile, were indefinitely impounded by another unrelated lawsuit. When more than $7,500 had been paid to Schwenk by income from S-W Company, S-W Company sued Schwenk, the Bank and Shell Oil alleging that it had fulfilled its obligations of the agreement. Schwenk answered, alleging that the agreement did not limit S-W Company's obligation to one-half of the $15,000 debt, and that instead, S-W Company was jointly and severally liable for the whole amount. Wight, the cosigner on the debt, was not joined or notified of the proceedings until after judgment. Neither party to the action nor the court raised the question of joinder prior to appeal. The only evidence submitted to the court for interpretation was a copy of the agreement itself. The trial court granted a motion of S-W Company ruling that the language in dispute was not ambiguous and accordingly that S-W Company was liable to pay only $7,500 of the $15,000 debt. After the trial court refused to amend any of its findings and conclusions, Schwenk appealed from the granting of the summary judgment. Schwenk's appeal raises three main issues: 1. Was the district court in error in determining there was no ambiguity in the contract? 2. Did issues of fact exist which precluded the granting of summary judgment? 3. Should the district court have required the joinder of Wight as an interested party whose interests were affected by the judgment? If the district court was correct in determining that the disputed language was not ambiguous, it would follow that there were no material questions of fact as to the liability of S-W Com- pany. However, we determine that the language is ambiguous and accordingly that there were material facts in dispute. Where ambiguity does exist on the face of the contract, the question of the parties' intent as to the language involved is sub- mitted to the trier of fact. Schell v. Peters, 147 Mont. 21, 410 P.2d 152. Ambiguity exists when a contract taken as a whole in its wording or phraseology is reasonably subject to two different inter- pretations. Watson v. Barnard, 155 Mont. 75, 82, 469 P.2d 539. Here, the crux of the case is whether S-W Company is jointly and severally liable for the total $15,000 debt, or only severally liable for half, $7,500. The only language in the agreement relating to liability is phrased in terms of the source of funds to pay the debt: "One-half of the net proceeds derived by S-W Company from its working interest in and to said lands, and one-half of the net proceeds to be derived from the Wight Trust interest * * * - 1 ' What was meant by this language? Does it mean that the S-W Company is liable to pay only $7,500 as the trial court held, Or does it mean that one-half of the net proceeds (however large or small that amount may be) of the S-W Company's working interest in the land involved, shall go towards payment of the $15,000 debt? Similarly, does it mean that one-half of the net proceeds of the Wight Trust (however large or small that amount may be) shall go towards payment of the $15,000 debt? We cannot conclude as a matter of law that the meaning of this contract language was clearly stated or unambiguous. Nowhere in the agreement is the extent of each promisor's liability defined other than to the extent of one-half of each source of income. There are no time limitations, furthermore, on payment from either S-W Company or Wight Trust; documents in escrow were to be released only after the agreement was fully performed. Under Montana law, obligations imposed upon several persons may be (1) joint, (2) several, or, (3) joint and several. Section 58-201, R.C.M. 1947. Section 58-202, R.C.M. 1947, states: "When joint and several. All joint obligations and covenants shall hereafter be taken and held to be joint and several obligations and covenants." Sections on the interpretation of contracts, sections 13-725 and 13-726, R.C.M. 1947, raise the presumption of joint and several liability. They provide: "13-725. Where all the parties who unite in a promise receive some benefit from the consideration, whether past or present, their promise is presumed to be joint and several." "13-726. A promise, made in the singular number, but executed by several persons, is presumed to be joint and several." These sections correspond directly with their California predeces- sors and present counterparts, sections 1659 and 1660, Ca1.Civ.C. No Montana cases are clearly on point here. California courts, however, have made numerous distinctions regarding these statutes. In a recent case, Vincent v. Grayson, 106 Cal.Rptr. 733, 738, 30 C.A.3d 899, 906, the court stated that the language of 'I8I/We hereby promise and agree to pay * * *I1' imparts joint and 7Q2 several liability. In Kaneko v. Okuda, 15 Cal.Rptr. 4-93, 195 C.A.2d 217, the court held that three signers of a contract and option to purchase had benefited from the consideration and hence were liable jointly and severally. In Williams v. Reed, 113 C.A.2d 195, 248 P.2d 147, the court held, comakers of a mortgage liable jointly and severally when each note was in the form of a promise made in the singular and executed by each of the makers. Finally, in Olson v. Foster, 42 C.A.2d 493, 109 P.2d 388, the court held that a number of trusts were jointly and severally liable for the balance due on legal services made on behalf of and benefiting all of the trusts. In the present case, there is no language expressly defining the liabilities of the two promisors. There is no language compa- rable to "I/We agree * * *". The debt, however, is named as a total $15,000, and nowhere is it explicitly broken down into two halves of $7,500 each. It is not clear what benefit each of the promisors received from the agreement, but it specifically stated that the $15,000 was to be satisfaction of an earlier "disagreement between all of the parties." What relationship the promisors each had to the earlier disagreement, or to each other, is not apparent from the papers or the court files. A prior debt, however, is sufficient to constitute consideration in a later promise regarding that debt, sections 13-501 and 13-502, R.C.M. 1947, and both promisors here received a benefit from the contract. These facts raise the presump- tion of joint and several liability of each promisor, and as a matter of law, Schwenk is entitled to this presumption. The burden of proof is on S-W Company to rebut this presumption. When a contract is ambiguous, the language of the parties must be considered in light of subject matter and the surrounding circumstances, as well as the positions of the parties at the time the contract was made. Kintner v. Harr, 146 Mont. 461, 408 P.2d 487; McNussen v. Graybeal, 146 Mont. 173, 405 P.2d 447. The con- struction that the district court gave to the language was just one of many constructions which could reasonably be given it. The dis- trict court erred in determining that there was no ambiguity in the contract. It follows that the court erred in granting summary judg- ment for S-W Company. This Court stated in Fulton v. Clark, 167 Mont. 399, 404, 538 P.2d 1371, "Summary judgment is usually inap- propriate where the intent of the contracting parties is an important consideration." 6Moore's Federal Practice, Para. 56.17[41.-11. In Fulton the contract did not specifically provide for the payment of the fees in question. The Court stated: " * * * To determine if the agreement precludes management fees for long range services, the dis- trict court must inquire as to the conduct of the parties and as to the existence and substance of the alleged oral agreement. Whether there was an executed oral agreement, as well as whether the conduct of the parties modified the written agreement, are material questions of fact bear- ing on the intent of the parties. * * * " 167 Mont. 404. Similarly, here the contract does not state the extent of liability of each promisor. The intent of the parties to the contract is a genuine issue of fact and hence summary judgment is inappropriate. The following considerations for example, would have been appropriate inquiry for the trial court to arrive at the facts. Which party was the source of the language used in the agreement regarding how payment of the debt was to be made and how and why was this language chosen? What interests, if any, did each of the promisors to the agreement, namely S-W Company and John Wight or his predecessor in interest, have in the prior dispute upon which the agreement was based? What were the income-producing capacities of each of the two parcels of land in which the promisors owned interests at the time of the agreement, and was this information within the knowledge of all parties at the time? What was the rela- tionship between the promisors at the time of the agreement? The remaining issue is whether Wight (the Wight Trust) should have been joined as a party at the district court level. Neither S-W Company nor Schwenk raised the issue of joinder before appeal. In his amicus brief Wight claims, however, that he should have been joined as a party, and it appears that he did not know of the action pending in district court. Under Rule 19(a), M.R.Civ.P., the court is required to join a person subject to service of process if: "(2) he claims an interest relating to the subject of the action and is so situated that the disposi- tion of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest * * * ." Since Wight did not claim an interest in the case below the court was not required to join him as a party, but because his interests would clearly have been affected by the court's judgment, the court should have joined him as a party. Under Rule 21, M.R.Civ.P., the district court may drop or add parties on motion of any party "or of its own initiative" at any time during the proceedings. In this situation Wight was not bound by the court's conclu- sions of law and judgment since he was not a party. However, he would be limited in exercising his right of contribution from S-W Company on the debt if S-W's liability was decided in Wight's absence. The basis of the rule on joinder is founded on due process considerations of notice and a right to be heard. On remand Wight should be joined as a party so that he is not deprived of due process. We reverse the summary judgment of the district court, set aside the findings of fact and conclusions of law, and order further proceedings not inconsistent with this opinion. @-/$I@ Justice & *

August 17, 1977

1b48c98b-86fe-43cb-826c-67b0c4355977

MATTER OF BREWINGTON

N/A

13618

Montana

Montana Supreme Court

No. 13618 IN THE SUPREP4E COURT OF THE STATE OF MONTANA 1977 IN THE MATTER OF TEE ESTATE OF HELEN HARMON BREWINGTON, Deceased. Appeal from: District Court of the Fourth Judicial District, Honorable Nat Allen, Judge presidina. Counsel of Record: For Appellant: Julio Elorales argued, Missoula, Montana For Respondents: Glen Neier argued, and John V. Potter appeared, White Sulphur Springs, Montana Submitted: -. May 18, 1977 Filed: Mr. Justice Daniel J. Shea delivered the Opinion of the Court. Lawrence rew wing ton appeals from an order of the district court, lleagher County, denying his petition to amend a determination of heirs to include him as an heir of decedent, Helen Harmon Brew- ington. Raymond Brewington died intestate in the 1950's. His wife, Helen Harmon Brewington, survived him. Raymond had several brothers and sisters, but under the laws of intestate succession Helen inherited the entire estate. Helen did not remarry and died intestate September 12, 1975. Several cousins survived her. During the probate of Helen's estate, her cousins were listed as heirs in a petition for adjudication of intestacy. At the time of Helen's death several brothers and sisters of her deceased husband Raymond were still living. One of them, Lawrence Brewington, filed a peti- tion in Helen's estate proceedings asking the district court to amend the determination of heirs, claiming he was one of her next of kin under Montana's laws of succession. Because of his claim he asserted he had the right to notice of the adjudication of intestacy. The district court ruled he was not next of kin under Montana's laws of succession and was therefore not entitled to notice of the probate of Helen's estate. We agree. Lawrence does not contend he is entitled to inherit all of Helen's estate, to the exclusion of her cousins. Rather, he contends under the common law doctrine of "ancestral succession", he is entitled to inherit that portion of her estate which came to her when her husband Raymond died. He contends he should be allowed to trace this property. The sole issue here is whether Lawrence rew wing ton, as the brother of Helen Brewington's predeceased husband, ~aymond Brewington, is "next of kin" under section 91A-2-103, R.C.M. 1947, and therefore entitled to inherit part of Helen Brewington's estate. Under the common law doctrine of ancestral succession, property reverted to the line of family from which property was descended or devised. Because "next of kin" is not defined in the Montana version of the Uniform Probate Code, and the doctrine of ancestral succession has not expressly been abrogated by statute or overruled by court decision, Lawrence argues that collateral rela- tives of a predeceased spouse should be included among next of kin as to property which descended from that spouse. Lawrence refers this Court to annotations under former Section 91-403, R.C.M. 1947, (repealed Laws 1974) which governed succession to an intestate estate. It is important to note, however, that none of the cases cited under this statute held that relatives by affinity, other than a spouse, could inherit from an intestate. In fact, the laws of Montana indicate the contrary. In the earliest territorial laws of Montana, it is true relatives of a predeceased spouse inherited by law the estate of a decedent who died intestate leaving no relatives of his own. Sec. 254, Cod. Stat. 1871, p. 362. Even under that statute, however, cousins of an intestate fell under the category of "paternal or maternal kindred" and preempted the rights of the relatives of the predeceased spouse. That statute was expressly repealed by Sec. 558, Laws of 1877, p. 370. All later statutory enactments indicate "next of kin" or "kindred" was never intended to include relatives by affinity as those who would inherit under the laws of intestate succession. In 1877, the laws of succession included for the first time the words "next of kin". Sec. 534, p. 365, Sixth Clause, read: "If the decedent leave no issue, nor husband, nor wife, and no father, nor mother, nor brother, nor sister, the estate must go to the next of kin, in equal degree, excepting that when there are two or more collateral kindred in equal degree, but claiming through different ancestors, those who claimed through the nearest ancestors must be preferred to those claiming through an ancestor more remote * * *." "Kindred" was then defined in terms of ancestors, and therefore, blood relatives. Sec. 538 and Sec. 539, Laws of 1877, pp. 366-367, provide: "Sec. 538. The degree of kindred is established by the number of generations, and each generation is called a degree. "Sec. 539. The series of degrees forms the line; the series of degrees between persons who descend from one another, is called direct or lineal con- sanquinity; and the series of degrees between persons who do not descend from one another, but spring from a common ancestor, is called the collateral line, or collateral consanquinity." It is significant that in none of these succession stat- utes is there reference to relatives by affinity. Sec. 543, Laws of 1877, the original statute regarding blood line descent, in fact preferred whole blood relatives to half-blood relatives: "Sec. 543. Kindred of the half blood inherit equally with those of the whole blood in the same degree, unless the inheritance came to the intestate by descent, devise, or gift of some one of his ancestors, in which case all those who are not of the blood of such ancestor must be excluded from such inheritance." A notable exception to the preference to blood relatives in the scheme of inheritance is the right of adopted children to inherit in the same manner as natural children. However, this right was created especially by statute and did not exist previously under common law. The 1877 statutes on intestate succession were reenacted in essentially the same form (sections 91-403, 91-407 through 91- 411, R.C.M. 1947) and were effective up to the adoption of the Montana Uniform Probate Code in 1974. Even the new code incorporates much of the same language, including section 91A-2-103, R.C.M. 1947, which reads in pertinent part: "Share of heirs other than surviving spouse. The part of the intestate estate not passing to the surviving spouse under section 91A-2-102, or the entire intestate estate if there is no sur- viving spouse, passes as follows: " (5) if there is no surviving issue, parent, brother, sister, or children or grandchildren of a deceased brother or sister, to the next of kin, in equal degree, except that where there are two (2) or more collateral kindred, in equal degree, but claiming through different ancestors, those who claim through the nearer ancestors must be preferred to those claiming through an ancestor more remote." A simple reading of this statute indicates relatives by affinity are not explicitly included as "next of kin" under this statute. The new code, Title 91A, does not include provisions regarding "kindred". In absence of such provisions, this Court adopts the interpretation of "kindred" under the former laws. In a case supporting this restricted definition, In re Bernheim's Estate, 82 Mont. 198, 208, 266 P. 378, 57 A.L.R. 1169, Anno., 5 ALR3d 715, 717, the Court held that the word "relatives" in a will included only relatives by blood unless words to the con- trary are expressed: "The word 'relatives' has two meanings: (1) an enlarged meaning which includes all persons who are related in any way, by consanquinity or affinity, lineal and collateral relatives; (2) a restricted meaning which is confined to such relatives as are heirs, under the law of succession. It is the universal holding that, when used in a will, the word is presumed to mean relatives in the restricted sense, unless a contrary intention is apparent from the con- text of the will." 82 Mont. 205. Although Bernheim revolved around the wording of a will, it did confine "relatives * * * under the law of succession" to those related to a decedent by consanquinity and not affinity, and there- fore, is pertinent here. Cases cited in support of the argument for the rights of blood relatives of a predeceased spouse are based on statutes to that effect, and in at least half of the cited jurisdictions, these statutes have been repealed. The trend is definitely towards eliminating the rights of such relatives. Lawrence correctly states the "law favors one's own blood relatives as the natural object of one's bounty". He does not allege, however, that he was entitled to priority over his bro- ther's wife on the death of his brother 20 years ago, and by statute, Raymond's "bounty" passed in full to Helen at that time. Raymond's estate should not be open to new claims 20 years later. Lawrence also argues that in equity less distant rela- tives through marriage should receive the benefit of an estate over more distant cousins by blood. In this connection, this Court recognizes the general comments of the Uniform Probate Code, 8 U.L.A. Probate--Intestate Succession, pp. 322, 323: "While the prescribed patterns may strike some as rules of law which may in some cases defeat intent of a decedent, this is true of every statute of this type. In assessing the changes it must therefore be borne in mind that the decedent may always choose a different rule by executing a will." Moreover, as the district court stated in its denial of Lawrence's request, if the laws of intestate succession work to the detriment of certain classes of individuals, it is for the legisla- ture, and not the courts, to rectify. We conclude that blood relatives of a predeceased spouse are not next of kin of the spouse last to die, and Lawrence has no claim to a portion of Helen Brewington's estate. While we do not discuss the argument that assets from Raymond's estate are no longer identifiable, we note in most cases it would be extremely unlikely they would be identifiable after a passage of 20 years. We affirm the district court order. We Concur: Chief Justice

August 17, 1977

03998809-da32-472e-a744-4402ba0838f2

STATE EX REL BRICENO v DIST COUR

N/A

13832

Montana

Montana Supreme Court

No. 1 3 8 3 2 I N THE SUFREME COURT OF THE STATE OF MONTANA 1 9 7 7 THE STATE OF ElONTANA ex rel. SOL BRICENO and J E S S I E BRICENO, R e l a t o r s , THE D I S T R I C T COURT OF THE THIRTEENTH J U D I C I A L DISTRICT OF THE STATE OF MONTANA, I n and for t h e C o u n t y of Y e l l o w s t o n e , and the Hon. C. B. Sande, R e s p o n d e n t s . O r i g i n a l P r o c e e d i n g : C o u n s e l of R e c o r d : For R e l a t o r s : M o s e s , T o l l i v e r & Wright, B i l l i n g s , M o n t a n a R a l p h A l l a n B e c k argued, B i l l i n g s , M o n t a n a For R e s p o n d e n t s : H a r o l d F. H a n s e r , C o u n t y A t t o r n e y , B i l l i n q s , M o n t a n a C h a r l e s B r a d l e y argued, D e p u t y C o u n t y A t t o r n e y , B i l l i n g s , IvlOntana S u b m i t t e d : June 2 2 , 1 9 7 7 F i l e d : - =w<q ,~~ clerk M r . Justice Frank I. Haswell delivered the Opinion of the Court. This is an original proceeding. Relators Sol Briceno and Jessie Briceno, defendants i n a criminal action, seek a w r i t of supervisory control or other appropriate w r i t from t h i s Court to require the presiding judge of the d i s t r i c t court, Yellowstone County, annul and s e t aside the denial of relators' motion to dismiss for lack of a speedy t r i a l . Defendants Sol and Jessie Briceno, father and son respectively, were arrested i n Billings on November 20, 1975, and charged with the crime of aggravated assault, a felony. The offense was alleged to have occurred on July 7, 1975. Defendants appeared i n justice court on November 20, 1975, and were released upon posting bond the next day. On April 28, 1976, the Yellowstone County attorney and de- fendants, accompanied by counsel, appeared in d i s t r i c t court. The county attorney moved for and was granted leave t o f i l e an Inform- tion formally charging defendants with aggravated assault. De- fendants were arraigned during the proceedings and pled "NOT GUILTY" to the charge. T w o weeks thereafter the t r i a l date was s e t for M a y 26, 1976. O n M a y 18, 1976, counsel for defendants moved for a continuance and, i n addition t o other matters, for a dismissal of the charges for lack of a speedy t r i a l . The motion stated i n part : "The defendants agree that they w i l l waive any right they have by law t o complain as t o a speedy t r i a l by reason of any delay i n their t r i a l date caused by t h i s mot ion ." The t r i a l was reset for September 1976. Defendants, on September 2, 1976, renewed their motion t o dismiss. Various pre- t r i a l proceedings were had between September 1976 and March 1977. O n April 12, 1977, following a hearing, the d i s t r i c t court orally denied defendants' motion to dismiss for lack of a speedy t r i a l . Thereupon defendants filed the instant applica- tion for a w r i t of supervisory control with t h i s Court, seeking that the d i s t r i c t court order of April 12, 1977, denying the motion to dismiss be s e t aside and annulled. The sole issue on appeal is whether the Information should be dismissed because defendants have been denied their constitu- tional right to a speedy t r i a l . Defendants argue that, under the facts of this case, a delay of 4 1/2 months between the date of the alleged offense and their arrest and of over 6 months between the arrest and the filing of the Information is sufficiently long to s h i f t to the s t a t e the burden of explaining the delay and showing the absence of pre- judice t o defendants. Their argument is grounded in the constitu- tional principles outlined by the United States Supreme Court i n . Fs . L j 4 t Klopfer v. North Carolina, 386 U.S. 213, 87 S.Ct. 99&, 18 L ed 2d and Barker v. Wingo, 407 U.S. 514, 92 S.Ct. 2182, 33 L ed 2d 101; as further developed by this court's decisions in State ex rel. Thomas v. District Court, 151 Mont, 1, 438 P.2d 554; Fitzpatrick v. C r i s t , 165 Mont, 382, 528 P.2d 1322; State v. Steward, 168 Mont. 385, 543 P.2d 178; and State v. Keller, Mont . , 553 P.2d 1013, 33 St. Rep. 795. These cases involve a sensitive balancing of four factors, in which the conduct of the prosecution and the defendant are weighed i n determining whether there has been a denial of the right to a speedy t r i a l . The four- factors t o be evaluated and balanced are: . (1) Length of delay; (2) Reason for delay; (3) Assertion of the right by defendant; and (4) Prejudice to the defendant. Defendants aseert the facts of the instant case, when con- sidered and balanced in the context of the above four factors, clearly demonstrate they have been denied the right t o a speedy t r i a l . They stress (1) the Iefigth of the delay was unreasonable; (2) the delay was aggravated by the fact the investigation which formed the basis for the Information was completed during August 1975, more than 8 months prior to the filing of the Information, aad the entire period of delay can be characterized as one of t o t a l inaction on the part of the prosecution, chargeable as such t o the prosecution; (3) the denial of the right to a speedy t r i a l was asserted through counsel shortly following the f i l i n g of the Information and arraignment i n d i s t r i c t court; and (4) severe actual prejudice has resulted through the loss of an essential defense witness, The state concedes the applicability of the four factor balancing process of Barker,,as accepted in the various Montana decisions, It contends the inability to resolve one of the four factors i n favor of the accused is sufficient gmetwd for rejecting a lack of speedy t r i a l argument. The s t a t e argues the delay i n the instant case was neither purposeful nor oppressive; that the anxiety and concern of the defendants were minimized by reason of no pretrial incarceration, and no actual prejudice resulted from the loss of the defense witness. The state relies on t h i s Court's decision in State v. Carden, - Mont . - 9 P.2d , 34 St.Rep. 420, wherein the Court indicated that not every delay i n a criminal action is properly chargeable to the state. It is maintained the delays i n the instant case f a l l 'under the rule of Carden and, as such, are not chargeable t o the state. No attempt is made to distinguish Fitzpatrick, Steward or Keller . The right to a speedy t r i a l is expressly guaranteed by the United States and Montana Constitutions. The Sixth Amendment to the United States Constitution provides: "In a l l criminal prosecutions the accused shall enjoy the right to a speedy and public t r i a l * * *." A r t . 11, Section 24, 1972 Montana Constitution states: "In a l l criminal prosecutions the accused shall have the right t o * * * a speedy public t r i a l * * *." The right to a speedy t r i a l has been classified as a funda- mental right, applicable t o the states by virtue of the Fourteenth Amendment to the United States Constitution. Klopfer v. North Carolina, supra. The touchstone i n any analysis of the speedy t r i a l issue is Barker v. Wingo, supra. Both parties, a t least implicitly, recognize the primary authority of Barker. W e find no need to reiterate the theoretical foundations of the four factor balancing approach of Barker a s adopted by numerous Montana decisions. It is suf fieient to say the balancing t e s t involves a weighing of these four factors with consideration given to the conduct of the accused and prosecution, respectively: (1) Length of delay; (2) Reason for delay; (3) ~efendant's assertion of the right; and (4) Prejudice to the defendant. First, the length of delay in t h i s case. There were two basic delays involved (a) 4 1/2 months between the alleged offense and the actual arrest, and (b) 6 months between the arrest and the filing of the Information. A-similar delay was considered by t h i s Court i n Fitzpatrick: "Length of delay: Seven months. W e emphasize t h i s delay is not considered a per se violation of peti- tioner's right t o a speedy trix, but under the c i r - cumstances here it is thought long enough t o s h i f t t o the s t a t e the burden of explaining the reason for the delay and showing absence of prejudice t o petitioner." 165 Mont. 382, 388. Here, a s i n Fitzpatrick, we find the burden t o have shifted to the s t a t e by reason of the delays. Unlike the situation i n Carden, the entire 10 1/2 month delay i n t h i s case consists primarily of "dead t i m e " . The prosecution simply was not pursued with reasonable diligence u n t i l the time the Information was filed. Indeed, the investigation of the case which furnished the information necessary t o charge these defendants was com- pleted a t least 8 months prior t o the filing of the Information. Second, the reason for the delay. The state argues it was not made aware of the fact defendants were arrested and brought before the justice court on November 20, 1975, u n t i l shortly prior to the time the Information was filed. This is not *a case involving delays occasioned i n any manner, whether thcough time consuming investigations or good f a i t h motions, by the conduct of the defendants. It is true the state, i n a given case, is not automatically chargeable with a l l delays not attributable to the defendant. State v. Carden, supra. The delays here appear to be unintentional rather than deliberate, nevertheless they are substantial delays resulting directly from a breakdown i n the chain of prosecution, for which the s t a t e w i l l be held responsible. The reason for the delay advanced by the s t a t e is insufficient to justify the lengthy delay. Third, w e find defendants' assertion of the right t o a speedy t r i a l was timely. A s stated in Steward: "The 'appropriate motion' i s a motion to dismiss for denial of a speedy t r i a l . The proper time to assert the right t o a speedy t r i a l is prior t o the actual commencement of the t r i a l , usually a t the t i m e the t r i a l date is s e t , or the time the case is called t o trial." 168 Mont. 385, 390. Here, defendants moved t o dismiss for lack of a speecy t r i a l two weeks following arraignment in d i s t r i c t court and less than a week a f t e r the f i r s t t r i a l date was set. Under these circumstances w e find the assertion of the right was properly and timely made. Defendants' waiver of the right regarding any delay occasioned by their motion t o dismiss has no effect on the propriety of the assertion. Fourth, prejudice, both presumptive and actual, to defendants. The primary interests which l i e a t the heart of thPs factor are s e t forth i n Barker: "* * * Prejudice, of course, should be assessed i n the light of the interest of defendants which the speedy t r i a l right was designed t o protect. This Court has identified three such interests: ( i ) t o prevent oppressive pretrial incarceration; ( i i ) t o minimize anxiety and concern of the accused; and ( i i i ) to l i m i t the possibility that the defense w i l l be impaired. O f these, the most important is the l a s t , because the inability of a defendant adequately to prepare his case skews the fairness of the entire system. I f witnesses die or disappear during a delay, the prejudice is obvious. There is also prejudice i f defense witnesses are unable to recall accurately events of the distant past. Loss of memory, however, is not always reflected in the record because what has been forgotten can rarely be shown." 407 U.S. 514, 532. Defendants acknowledge they were not prejudiced with regard t o oppressive pretrial confinement. There was no pretrial con£ iaement . The second interest t o be protected by a speedy t r i a l , minimization of an accused's anxiety and concern, is difficult to show as such is not readily subject t o proof by objective evidence. State v. Steward, supra. Here, while the record contains no facts conclusively showing anxiety and concern have been caused t o defendants, various statements appearing i n defendants' brief support the conclusion defendants have likely been subject t o substantial anxiety and emotional abuse because of the delays. W e find, under the facts, some prejudice i n the nature of anxiety and concern can be presumed t o have occurred. It is the third and most important OF the interests outlined above which concerns us here. The defense was seriously impaired by the death of an essential witness and it has resulted i n actual prejudice to defendants. Its deleterious effect on the a b i l i t y of defendants to prepare an adequate defense is more than obvious. It is no argument t o say the testimony of the deceased witness might have been controverted by testimony of state's witnesses. W e cannot allow any defendant's right t o an adequately prepared case t o be dismissed i n t h i s manner. After considering the circumstances i n the light of the factors established by Barker, we hold there has been an excessive delay; that no viable justification for the delay has been demonstrated; that defendants' assertion of the right to a speedy t r i a l was proper and timely; and that some preaudice, both actual and presumptive, resulted directly from the delay. Accordingly, it is ordered the district court annul and set aside its oral order of April 12, 1977, denying defendants' motion to dismiss and substitute therefor an order of dismissal. Justice W e Concur: n Cbief Justice f

August 18, 1977

1485f14b-38a6-4d70-9a55-3a855e492097

STATE v DAVISON

N/A

13733

Montana

Montana Supreme Court

No. 13733 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 STATE OF MONTANA, Plaintiff and Respondent, -vs- JOHN STOCKTON DAVISON, Defendant and Appellant. Appeal from: District Court of the Sixth Judicial District, Honorable Jack Shanstrom, Judge presiding. Counsel of Record: For Appellant: James A. Tulley argued, Big Timber, Montana For Respondent : Hon. Mike Greely, Attorney General, Helena, Montana Allen B. Chronister, Assistant Attorney General, argued, Helena, Montana Kenneth Olson, County Attorney, Big Timber, Montana Submitted: May 27, 1977 Decided:. . ~ d Filed: Mr. Justice Daniel J. Shea delivered the Opinion of the Court. Defendant appeals from an order of the district court, Sweet Grass County, denying his motion for a new trial on the grounds of jury misconduct during deliberations. On October 21, 1976, defendant was charged with theft in violation of section 94-$-302(1) (a), R.C.M. 1947, and was tried on November 29, 1976, in the Sweet Grass County courtroom in Big Timber. Because of bad weather and a cold jury room, the trial judge suggested, at the conclusion of the case, that he would clear the courtroom and permit the jury to deliberate there rather than in the colder jury room. Both counsel agreed to this arrangement. The jury found defendant guilty and sentencing was set for December 2, 1976. On the day after the jury verdict, defense counsel was discussing the case with one of the jurors when the juror men- tioned the jury did not understand some material contained in the police report. Counsel recalled that neither party had in- troduced a police report in evidence and immediately went to the clerk of court's office and asked to see the exhibits used at trial. The clerk of court produced the exhibits including: (1) a police report prepared by the undersheriff and marked state's exhibit 7, but not introduced in evidence,and (2) a police teletype originating from the Big Timber sheriff's office dated October 11, 1976, marked as state's exhibit 8, but not introduced in evidence. On the sentencing date defense counsel moved for a new trial on grounds the jury had viewed the police report and police teletype. All parties acknowledged the nonadmitted exhibits had been inadvertently left in the courtroom when the jury started its deliberations in the courtroom. Defense counsel offered to obtain juror affidavits stating the documents were circulated by the jury during its deliberations, and the county attorney admitted that they had been circulated. The trial court then postponed sentencing to consider the matter. The county attorney later filed a motion allowing him to take juror affidavits to establish that the exhibits involved did not prejudice defendant. Defense counsel objected to this motion, and again renewed his motion for a new trial. The trial court granted the county attorney's motion to obtain juror affi- davits. he county attorney then filed four affidavits which in substance declared the jurors had looked at the nonadmitted exhibits but that they did not affect their deliberations. At the sentencing hearing the court received the affida- vits in evidence over defendant's objection, overruled defen- dant's motion for a new trial, and sentenced defendant to ten years in the state penitentiary. On appeal, defendant urges his motion for a new trial should have been granted because of jury misconduct. He claims (1) that the exhibits in question were prejudicial to the de- fendant, and (2) that the offered affidavits could not be re- ceived to demonstrate the lack of prejudicial effect of the jury's misconduct. We hold the district court should have granted defen- dant's motion for a new trial. The existence of the unauthorized exhibits in the jury room during deliberations, when considered with their tendency to give credibility to the testimony of the prosecution witnesses, clearly demonstrated their prejudicial nature. While the jurors' affidavits were admissible to show the existence of juror misconduct, they were not admissible to show the jurors were not actually influenced by the unauthorized evidence. Section 95-1913(c), R.C.M. 1947, provides that evidence which may be taken into the jury room for deliberation may include " * * * all papers which have been received as evidence in the cause * * *". Where a jury has improperly (though inno- cently) taken nonadmitted papers or documents and other articles into the jury room, it is generally held the mere act of doing so does not entitle a defendant to a new trial. Rather, he must establish he has been prejudiced. Putro v . Baker & Mannix Electric, 147 Mont. 139, 147, 410 P.2d 717; United States v. Downen, 496 F.2d 314, cert.den. 419 U.S. 897, 95 S.Ct. 177, 42 L ed 2d 142. If one can demonstrate material prejudice it is axiomatic, of course, that one who would be so affected would be entitled to a new trial. Otherwise the defendant would be de- prived of an impartial jury, the right to confront witnesses, and the assistance of counsel at every critical stage of the trial. This kind of situation is prima facie incompatible with the Sixth Amendment to the United States Constitution, Government of the Virgin Islands v. Gereau, 523 F.2d 140, and of course, im- compatible with Article 11, Section 24 and the due process guarantee of Article 11, Section 17 of the 1972 Montana Constitution. Since both sides agree that the jury improperly considered evidence which was not part of the trial record, the question to consider is whether it was prejudicial. We confine our discussion to the police report because we conclude the jury's use of the police report constituted prejudice that was not overcome by the prosecution. The State contends that Officer Brannin could have testified to the information contained in the police report any- way and therefore that State v . Nelson, Mont. , 560 P.2d 897, 34 St-Rep. 80 (1977) (inadmissible hearsay upon hearsay in a police report) does not apply. The State however, did not call Officer Brannin, and the defendant was deprived of an opportunity to cross-examine him. Nevertheless, through the police report, the jury had evidence that helped support the credibility and statements of the prosecution witnesses who testified to the facts contained in the report. Under these circumstances the trial court could not presume the police report was not preju- dicial. The jury deliberations had been tainted by their read- ing of the nonadmitted police report. Admittedly, the only alternative left to the county attorney was to obtain jury affidavits to the effect that their deliberations were not influenced by the nonadmitted police re- port. Surely the affidavits were proper to show that the non- admitted evidence was considered by the jury, but they were not proper to show whether they in fact influenced the jury. This Court stated in Putro: " * * *'This court * * * has never held, and does not now hold, that, if the contact of the juror with outside, prejudicial influences be clearly demonstrated and uncontroverted, the juror may purge himself by testifying that such influences did not affect his judgment in forming his ver- dict.' * * * " * * *'There is no practicable method to so analyze the mental operation of the jurors as to determine whether, in point of fact, the verdict would have been the same if the trial had been conducted, as both parties had a right to expect, according to law and upon the evidence in court.' * * *" 147 Mont. 147, 148. As stated in United States v . Wilson, 534 F.2d 375, 378, the juror's testimony regarding misconduct in that case could go to " "' * * * facts bearing upon the question of the existence of any extraneous influence, although not as to how far that influence operated upon his nind."'" In the present case the State presented only the affi- davits of four jurors who admitted to having considered the two exhibits before the final vote. All admitted that at least one juror had not made up his mind before this last vote, and there is no way of knowing which of the jurors held out until the final vote. Similarly, there is no way of knowing whether one of the jurors who had considered the exhibits was one whose decision was influenced by the exhibit. Moreover, improper conduct of one juror is chargeable to the whole panel. Goff v. R f i x z e b 148 Mont. 61, 417 P.2d 105. Even assuming proper use of the affidavits, it is clear the State did not demonstrate the lack of prejudice when it offered only the affidavits of four jurors that their consider- ation of extraneous evidence did not affect their verdict. In Putro, 147 Mont. 147, 148, this Court commented on improper influences affecting one's right to a fair trial: "The guiding principle of our legal system is fairness. We must tenaciously adhere to the ideal that both sides of a lawsuit be guaranteed a fair trial. * * * We cannot be too strict in guarding trials by juries from improper influences. The strictness is necessary to give due confidence to parties in the results of their causes, and to en- lighten the public who have recourse to our courts that any improper influence which has the natural tendency to prejudice the verdict is grounds for a mistrial." Defendant's right to fairness can only be guaranteed by a new trial. We reverse the order of the district court and remand the case for a new trial. ustice

August 17, 1977

76142caf-a246-4775-b645-676c850d1a99

STATE v BERHARD

N/A

13430

Montana

Montana Supreme Court

No. 13430 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 STATE OF MONTANA, Plaintiff and Respondent, CECIL BERNHARD, Defendant and Appellant. Appeal from: District Court of the Eleventh Judicial District Honorable Robert C. Sykes, Judge presiding. Counsel of Record: For Appellant: Cecil Bernhard argued Pro Se, Eureka, Montana For Respondent: Hon. Mike Greely, Attorney General, Helena, William Douglas, County Attorney, Libby, Montana Joe Roberts argued, Libby, Montana Submitted: January 12, 1977 Decided : Filed : Mr. Justice Frank I. Haswell delivered the Opinion of the Court. Defendant Cecil Bernhard appeals from a judgment entered on a jury verdict in the district court, Lincoln County, con- victing him of operating a motor vehicle wrecking facility without a license, a misdemeanor. On November 6, 1975, a complaint charging defendant with operating a motor vehicle wrecking facility without a license, in violation of section 69-6802, R.C.M. 1947, was filed in Lincoln County justice court. On November 26, 1975, following a jury trial in which defendant was found guilty of the charge, he was fined $300 and sentenced to 30 days in the county jail. Defen- dant appealed to the district court and on March 1, 1976, was again found guilty by a six person jury. The district court im- posed a fine of $250 and a jail sentence of 30 days, both of which were to be suspended provided defendant procured a license to operate a motor vehicle wrecking facility within 30 days of the judgment date. Defendant appeals from this judgment. At all stages of the proceedings herein defendant appeared and at his request, acted as his own counsel. Defendant owns a parcel of land located approximately one-half mile from Eureka. This land is abutted by two county roads. On a portion of this land defendant kept between 60 and 100 unlicensed, discarded motor vehicles. Effective May 1, 1974, Lincoln County began administer- ing a "junk vehicle" program pursuant to Ch. 68, Title 69, Revised Codes of Montana, 1947. This act and the regulation promulgated thereunder provide for the licensing and regulation of motor vehicle wrecking facilities, the control of junk vehicles in nonwrecking yard locations, and the establishment of motor vehicle graveyard facilities. Terrence Schultz, Lincoln County sanitarian, was given authority to administer the program by the Lincoln County commissioners. Schultz first met with defendant on May 16, 1974, and explained to him that the discarded vehicles on his property did not comply with the law. A letter dated June 3 , 1974, from the sanitarian to defendant further explained the new law and the consequences of noncompliance. Defendant responded with a letter to the sanitarian in which he expressed a desire to "work something out" with respect to his use of the property involved. On July 2, 1974, defendant and Schultz met again and discussed alternative means of conforming defendant's property to the stat- utory requirements. Defendant's failure to comply with those requirements resulted in a charge of operating a motor vehicle wrecking facility without a license being filed against him in Lincoln County justice court. Defendant was convicted following a jury trial on December 17, 1974. Defendant's continued refusal to procure a license after his first conviction triggered a second prosecution for violating the act, initiated on November 6, 1975. The present appeal is taken from the district court judgment following conviction on the second charge of operating a motor vehicle wrecking facility without a license. Defendant challenges the constitutionality of section 69-6802 in this appeal. Specifically, he contends that this statute unconstitutionally allows a taking of property without due process and that the statute under which he was convicted is an ex post facto law. Defendant also contends that the first conviction for violating the statute was a bar to a second prose- cution under the sane statute and he was therefore subjected to double jeopardy. Defendant contends that due process requires just com- pensation to be given to a landowner whose use of his property is restricted by the statute. The state argues the statute is a valid exercise of its police power and that as such no com- pensation need be given. Clearly, when the police power has been properly invoked, compensation is not required. Atlantic Coast Line R.R. Co. v . City of Goldsboro, 232 U . S . 548, 34 S.Ct. 364, 58 L.Ed. 721. The license required when a person has four or more junk vehicles at a single location constituting a motor vehicle wrecking facility is not granted unless the vehicles are shielded from public view, pursuant to M.A.C. 16-2.14(2)-S 14261. Defendant's argument seems to be that the shielding re- quirement is without foundation and therefore cannot support the state's exercise of its police power. On the other hand, the state contends its police power is broad enough to include aesthetic considerations which under- lie the shielding requirement, and therefore the statute is a valid exercise of the state's police power. Aesthetic considerations have supported an exercise of the police power to force removal of roadside advertising with- out compensation. Markham Advertising Company v. State, 73 Wash.2d 405, 439 P.2d 248, appeal dismissed 393 U.S. 316, reh-den. 393 U.S. 1112. Other jurisdictions have taken the view that aesthetic considerations alone may warrant the exercise of police power with respect to motor vehicle junkyard requirements. Oregon City v. Hartke, 240 Or. 35, 400 P.2d 255; Xotenmg v. Fort Pierce, (Fla. 1967) 202 So.2d 782; Racine County v. Plourde, 38 Wis.2d Article 11, Section 3, 1972 Montana Constitution, declares that the right to a "clean and healthful environment" is an in- alienable right of a citizen of this state. consistent with this statement and the cases cited, we hold that a legislative pur- pose to preserve or enhance aesthetic values is a sufficient basis for the state's exercise of its police power in section 69-6802 and M.A.C. 16-2.14(2)-S 14261. Defendant alleges also that section 69-6802 is an ex post facto law. However, he was charged with maintaining four or more junked vehicles on his property after the statute was in effect; he was not subjected to a penalty for having the vehicles prior to that time. His contention therefore, that this is an ex post facto application of the statute is ground- less. In Samuels v. McCurdy, 267 U.S. 188, 45 S.Ct. 264, 69 L.Ed 568, 570, the United States Supreme Court rejected de- fendant's argument that his conviction under a law prohibiting possession of liquor was invalid since his possession of the liquor predated the effective date of the prohibition act. There the court stated: "This law is not an ex post facto law. It does not provide a punishment for a past offense. It does not fix a penalty for the owner for having become possessed of the liquor. The penalty it imposes is for continuing to possess the liquor after the enactment of the law. * * *" 69 L.Ed. 570. Applying this test to defendant's maintenance of his vehicles, it is clear that there was no ex post facto application of section 69-6802. Neither is there merit in defendant's contention that his conviction on the second charge of failure to license his junk vehicle accumulation was constitutionally barred by the earlier conviction for violating the same statute. Defendant argues that his refusal to procure a license or shield his property is a single, ongoing act for which he can be prosecuted only once. In State v. Boe, 143 Mont. 141, 146, 388 P.2d 372, this Court stated with respect to the constitutional protection against double jeopardy: "The controlling word is offenses, it does not refer to acts. " One test used by this Court to measure the necessary identity of offenses was enunciated in State v. Parmenter, 112 Mont. 312, 316, 116 P.2d 879. There the test was whether: " * * * all the evidence relied upon to support the conviction under the second information would have been admissible and would have sustained a conviction under the first information." In the present case, the two separate complaints charged distinct offenses. The second charge was based on defendant's failure to have a license for a motor vehicle wrecking facility on November 6, 1975. The first complaint alleged that he did not have the necessary license on August 28, 1974. The prosecution could not have known of the second offense at the time of charg- ing defendant for the first offense. As the United States Supreme Court stated in United States v. Ewell, 383 U.S. 116, 86 S.Ct. 773, 15 L ed 2d 627, 633, Fifth Amendment protection against being twice put in jeopardy: " * * * is not properly invoked to bar a second prosecution unless the 'same offense' is involved in both the first and the second trials. " * * * If the two offenses are not, however, the same, then the Double Jeopardy Clause by its own terms does not prevent the current prosecution * * * * I 1 Another question raised by defendant as a part of his attack on the constitutionality of the statute under which he was charged properly concerns the construction of the statute as it applies to defendant's use of his property. Defendant was charged with violating section 69-6802, R.C.M. 1947, which provides in part: "A person may not conduct, maintain, or operate a motor vehicle wrecking facility without a license issued by the department." Section 69-6801(1), R.C.M. 1947, defines a motor vehicle wrecking facility: " (1) '14otor vehicle wrecking facility' means a facility buying, selling, or dealing in four (4) or more vehicles per year of a type required to be licensed, for the purpose of wrecking, dis- mantling, disassembling, or substantially changing the form of the motor vehicle, or which buys or sells integral secondhand parts or component material thereof, in whole or in part, and deals in secondhand motor vehicle parts. The term does not include a garage where wrecked or disabled motor vehicles are temporarily stored for a reason- able period of time for inspection, repairs, or subsequent removal to a junkyard." Defendant concedes in this appeal, as he conceded at the district court trial, that he possesses four or more junk vehicles on his property. He testified that he has neither done business at the site nor added or removed any vehicles since the statute went into effect. Defendant argues that he was not operating a motor vehicle wrecking facility. In Cosgrove v. Industrial Indemnity Company, Mont . , 552 P.2d 622, 624, 33 St.Rep. 675, this Court stated: "In construing a statute, the Court must deter- mine the plain meaning of the words used. The language is to be interpreted in accordance with its usual, ordinary, and accepted meaning, and the intention of the legislature in enacting it must be gathered from the language employed there- in. Section 93-401-15, R.C.M. 1947; County of Hill v. County of Liberty, 62 Mont. 15, 203 P. 500; * * * State v. Midland Nat'l Bank, 132 Mont. 339, 317 P.2d 880." Section 69-6801(1) states that a facility must "buy, sell, or deal" in motor vehicles or parts or materials thereof to con- stitute a "motor vehicle wrecking facility." This language is not ambiguous. The legislature clearly intended to require licensing of facilities at which business activity related to junk vehicles is being carried on. The definition of "motor vehicle wrecking facility" by its own terms does not include mere accumulations of junk vehicles. In analyzing the proof at the trial, we note: "Possession at a single location, of four (4) or more junk vehicles of a type required to be licensed, is prima facie evidence that the possessor is operating a motor vehicle wreck- ing facility. " Section 69-6803 (I), R.C.M. 1947. Additionally, the presence of between 60 and 100 junk vehicles on defendant's property, unexplained, is some evidence of "dealing" in junk motor vehicles within the meaning of section 69-6801 (I), R.C.M. 1947. The opposing evidence consists solely of defendant's testimony. In substance, defendant denied that he was "oper- ating a wrecking yard"; stated that he had not "sold enough parts in the last year to pay for a license"; and testified: "Over the years I have sold a few parts now and then when someone would contact me and come to me. I have given some away and I have sold some for a few dollars but not since this law has gone into effect. 'I Two different juries weighed this opposing evidence and convicted the defendant of operating a motor vehicle wreck- ing facility without a license. It is axiomatic that the function of the jury is to determine the credibility of the witnesses and the weight to be given their testimony and so resolve the ultimate question of fact in this case, viz. did defendant operate a motor vehicle wrecking facility? The jury resolved this factual dispute by their verdict and we, as the appellate court, will not interfere where as here, there is substantial evidence to support the verdict. Judgment affirmed. Justice Chief Justice 1 - 8 - u ............................ Justices Mr. Justice Daniel J. Shea, dissenting: I would reverse the conviction. while I concur with the majority's findings that the Motor vehicle Wrecking Facilities Act is constitutional, I do not agree with the conclusion that there was "substantial credible evidence to support the verdict." The state brought forth no evidence at trial tending to prove that defendant had bought, sold, or dealt in motor vehicles or motor vehicle parts or materials since the effective date of the act. Defendant's testimony, that he had done no business with re- spect to his junk vehicle accumulation since the licensing requirement went into effect, was wholly uncontradicted. Granted, section 69-6803(1), R.C.M. 1947, creates a rebut- table presun~ption that possession alone of four or more junk vehicles at a single location is "prima facie evidence that the possessor is operating a motor vehicle wrecking facility." However, I cannot believe that this presumption of possession can operate to convict one of something more than possession, that of conducting an ongoing business of buying, selling, or dealing in wrecked motor vehicles or used parts. Furthermore, the defendant did explain the presence of the 60 to 100 vehicles, simply by stating that he had acquired them all before the effective date of the statute. The state made repeated attempts to get him to admit that he had done business since the effective date of the act, and the defendant consistently denied he had. Moreover, the state's chief witness, Mr. Schultz, the sanitarian, in response to a question from the trial judge, testified that he did not know whether defendant had acquired any additional vehicles since the effective date of the statute. Up until the passage of the laws herein, the defendant had no duty to shield his cars from public view. He was entitled to keep them there, however obnoxious or odious it might have been to the aesthetic values of the public. It was only after the passage of the act here complained of that there was a duty imposed on defendant to do something about shielding his wrecked cars. If he carried on a motor vehicle wrecking facility, he was required to get a license. An administrative condition precedent to his obtaining a license was that he shield his vehicles from public view. On the other hand, if he did not operate a wrecking facility the state could still re- quest him to shield his vehicles from public view. See section 69- 6810, R.C.M. 1947, and M.A.C. 16-2.14 (2) -S14261(2) (a) . However, the state chose to charge him with operating a motor vehicle wrecking facility without a license. The record does not reveal whether the state knew of the other option, to simply request him to shield his property from public view. The facts clearly demonstrate that the state did not prove that after the effective date of the statute defendant was operating a motor vehicle wrecking facility; that is, buying, selling or dealing in wrecked vehicles or used parts. The state relied exclusively on the presumption that the possession of four or more wrecked vehicles at a single location is translated into an ongoing business of w, selling, or dealing in wrecked vehicles or used parts, and is, therefore, a motor vehicle wrecking facility. The person charged with enforcing the statutes, Terrence Schultz, the Lincoln County sanitarian, was the state's star witness, and he did not even intimate that the defendant was engaged in the buying, selling, or dealing in wrecked vehicles or used parts after the effective date of the act. He testified he did not know. And, after defendant rested his case, it would have been a simple matter for the state to put witnesses on the stand testifying to his business activity after the effective date of the statute, if the state had the evidence. It is interesting to note here that despite the several conversations between the defendant and the sanitarian, the state could not elicit testimony from the sanitarian that the defendant had admitted to him that he was buying, selling or dealing after the effective date of the statute. The only evidence was the uncontradicted testimony of defend- ant that after the effective date of the act he did not buy, sell or deal in wrecked motor vehicles or used parts. Other than by his own testimony, how else could he establish that he was not operating a wrecking facility? Certainly the state would have objected (and probably successfully) to the defendant parading many witnesses on the stand to establish negatively that they did not buy, sell or deal with defendant after the effective date of the statute. Defendant's conviction stands on the fact that he possessed four or more junk vehicles at a single location within public view. Under these circumstances it is shocking to allow a presumption of possession convict defendant of a crime the heart of which is not possession, but the active ongoing business of buying, selling, or dealing in wrecked vehicles or used parts. This kind of presumption has no place in the criminal law.

August 17, 1977

f22fb457-6bab-41f4-8837-61ba0c60ec6c

PLOUFFE v FARM RANCH EQUIPMENT C

N/A

13725

Montana

Montana Supreme Court

No. 13725 IN THE SUPREMI3 COURT OF THE STATE OF MONTANA AMOS A. PLOUFFE, Plaintiff and Appellant, FARM & RANCH EQUIPMENT COMPANY, a corporation, Defendant and Respondent. Appeal from: District Court of the Eighth Judicial District, Honorable R. J. Nelson, Judge presiding. Counsel of Record: For Appellant: McKittrick and Duffy, Great Falls, Montana Joseph Duffy argued, Great Falls, Montana For Respondent: Burton and Waite, Great Falls, Montana Charles M. Cruickshank, I11 argued, Great Falls, Montana Submitted: September 13, 1977 Decided : N T 2 5 1977 Filed: ?CT 2 5 !QV Mr. Justice Frank I . Haswell delivered the opinion of the Court. A former employee filed a civil action against his em- ployer to recover overtime wages and vacation pay, statutory penalties, attorney fees and costs. The district court of Cascade County denied him summary judgment and dismissed his complaint. He appeals. Plaintiff is Amos A . Plouffe who was employed for over three years as a farm equipment mechanic by defendant Farm & Ranch Equipment Company, a corporation, engaged in sales and repair of farm equipment. Plouffe claims that between July 15, 1971 and July 28, 1972, he worked a total of 438-3/4 hours in excess of 40 hours per week for which he was paid straight time rather than the overtime rate of time and a half. He claims he is entitled to an additional $669.39 overtime pay, a statutory penalty in an equal amount, attorney fees of $350 and costs. He bases his overtime pay claim on Montana's Minimum Wages and Hours Act, section 41-2301 et seq., R . C . M . 1947. He bases his civil suit for collection of the overtime pay, statutory penalties, attormy fees and costs on Montana's Wage Payment Act, section 41-1301 et seq., R.C.M. 1947. Plouffe also claims an additional 80 hours vacation pay in the sum of $240, a statutory penalty in an equal amount, and costs. On August 5, 1972, Plouffe filed his claim with the Montana Department of Labor and Industry, Labor Standards ~ivision. Subsequently, at a date unclear from the record before us, the department denied his claim. On February 23, 1973, Plouffe filed his complaint in the district court of Cascade County seeking recovery by civil suit of the amounts set forth above. His employer answered by a general denial and plead the affirmative defenses of (1) exemption from payment under the federal Fair Labor Standards Act, 29 USCA, Sec. 201 et seq. as amended, and (2) the bar of the statute of limitations. His employer also sought an award of $350 attorney fees as the prevailing party. Following pretrial discovery, plaintiff Plouffe moved for summary judgment. Thereafter the district court entered findings of fact, conclusions of law and judgment to the effect that defendant employer, by the nature of its business, is ex- empt from the wage and overtime provisions of Montana's Mini- mum Wages and Hours Act and dismissed plaintiff's entire complaint. Plaintiff now appeals. The ultimate issue for review is whether the judgment of the district court is correct. The underlying issues can be summarized as follows: (1) Is the employer exempt from payment of overtime wages under the federal Fair Labor Standards Act? (2) Is the employer exempt from payment of overtime wages under Montana's Minimum Wages and Hours Act? (3) Does the federal Fair Labor Standards Act preempt the field of wage and hour regulation to the exclusion of Montana's Minimum Wages and Hours Act? (4) Should plaintiff's entire complaint have been dis- missed? We hold that the federal Fair Labor Standards Act expressly exempts the employer in this case from paying overtime wages to plaintiff. Section 207 of the Fair Labor Standards Act provides that no employer shall employ any of his employees for a work- week longer than 40 hours unless such employee receives time and a half his regular rate of pay for the excess. Section 213 pro- vided : "Exemptions * * * " (b) The provisions of Section 207 of this title shall not apply with respect to-- * * * "(10) Any salesman, partsman, or mechanic primarily engaqedn selling or servicing automobiles, trailers, trucks, farm implements, or aircraft if employed by a nonmanufacturinq establishment primarily engaged in the business of sellinq such vehicles to ultimate purchasers." (Emphasis added.) Act of September 23, 1966, P.L. 89-601, 80 Stat. 836 (1966) (Current version at 29 U.S.C. S 213(b) (10) (Supp.1V 1974)). This exemption from payment of overtime wages clearly applies under the admitted facts of this case. We further hold that the employer in this case is not exempt from the payment of overtime wages under Montana's Mini- mum Wages and Hours Act. This Act provides: "41-2303. Compensation. (a) Except as may other- wise be provided pursuant to this act, every employer shall pay to each of his employees wages at a rate not less than provided in subsection (1) and (2) save and except for farm workers as herein defined: "(b) No employer shall employ any of his employees for a work week longer than forty (40) hours, unless such employee receives for his employment in excess of forty (40) hours in a work week at a rate of not less than one and one-half (1-1/2) times the hourly wage rate at which he is employed. No overtime pro- vision shall apply for farm workers * * *." Farm worker as defined in section 41-2302(f) " * * * means any person employed to do any service performed on a farm or ranch." Thus the situs of the work performed is the basis of the exemption. Here the work was not performed on a farm or ranch; the exemption does not apply; and the employee is entitled to overtime wages at the rate of 1-1/2 times his regular hourly rate of pay for the hours worked in excess of 40 hours per week. The employer argues that it is exempt from Montana's Minimum Wages and Hours Act because: (1) The employer is subject to all the provisions of the Fair Labor Standards Act except the overtime pay provisions indi- cating a congressional intent to substantially cover him by its provisionsand grant him an exemption therein, (2) the Minimum Wages and Hours Act exemption of "farm workers", and (3) the Mont- ana Labor Department ruling that the employer is not covered by our Minimum Wages and Hours Act. The first argument is answered hereafter in our discus- sion of preemption. The second argument has already been answered by the definition of "farm worker" in our Minimum Wages and Hours Act. The short answer to the third argument is that the Montana Labor Department's ruling that the employee is not covered by Montana's Minimum Wages and Hours Act is incorrect. As heretofore noted, the language of the Minimum Wages and Hours Act requires payment of overtime wages to all employees and there is no exemp- tion covering this case. The exemption of overtime wages under the federal Fair Labor Standards Act and the absence of such exemption under Mon- tana's Minimum Wages and Hours Act posits the principal issue on appeal: Does the federal Fair Labor Standards Act preempt the entire field of wage and hour regulation precluding state legislation on this subject? It is conceded that Congress has the power to preempt under the commerce clause of the United States Constitution. It is equally clear that where Congress preempts the field, state laws to the contrary must yield. The supremacy clause, Art. VI, United States Constitution provides: "This constitution and the laws of the United States which shall be made in pursuance thereof, and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the constitution or laws of any state to the contrary notwithstanding." The question in this case is whether Congress did in fact preempt the entire field of wage and hour regulation by enactment of the Fair Labor Standards Act. The issue turns on the legislative intent of Congress. The employer asserts that when Congress moved to regulate commerce by enactment of the Fair Labor Standards Act it pre- empted the entire field of wage and hour regulation and the states are precluded from enacting legislation concerning the same subject matter. The employer argues that it is covered by all provisions of the Fair Labor Standards Act except the over- time pay provision indicating an intention by Congress to occupy the whole field and in so preempting to grant it a specific exemption from payment of overtime wages based on a legislative policy to protect agriculture, a financially fragile industry. The time is long past for this contention to prevail. The language of the Fair Labor Standards Act itself indicates a con- gressional intent not to preempt to the exclusion of state wage and hour laws. "Section 218. Relation to other laws. "(a) No provision of this chapter or of any order thereunder shall excuse noncompliance with any Federal or State law or municipal ordinance es- tablishing a minimum wage higher than the minimum wage established under this chapter or a maximum workweek lower than the maximum workweek es- tablished under this chapter * * *." Case law interpreting the Fair Labor Standards Act like- wise destroys the employer's contention of congressional pre- emption. Maneja v . Waialua Agri. Co., 349 U.S. 254, 99 L ed 1040, 75 S.Ct. 719 (1955); Divine v. Levy, 36 F.Supp. 55 (1940); Eastern Sugar Associates v. Pena, 222 F.2d 934 (1955), cert.den. 355 U.S. 900. Perhaps the best example of denial of the employer's preemption argument and at the same time establishing state power to eliminate exemptions granted in the Fair Labor Standards Act, is the following holding: "This section [Sec. 218, FLSA] expressly contem- plates that workers covered by state law as well as the FLSA shall have any additional benefits pro- vided by state law--higher minimum wages; or lower maximum work week. By necessary implication it permits state laws to operate even as to workers exempt from the FLSA." Williams v. Transit Co., 472 F.2d 1258 (1972) State courts have similarly held no federal preemption by the Fair Labor Standards Act: "Anticipating such an apparent conflict between the federal act and similar state legislation, the congress provided in 29 USCA Section 218(a) * * * for enforcing compliance with a state mini- mum wage higher and a state 'maximum workweek' lower than that established by the federal act, i-e., the statute specifically prohibits preenp- tion, by the federal act, of any state minimum wage or maximum hour/overtime ('maximum workweek') pro- vision more favorable to the employee than that prescribed by the federal act." State v. Comfort Cab, Inc., 118 N . J . Super. 162, 286 A.2d 742. To the same effect see Hendrix v. Delta Airlines, La.App. 234 So.2d 93; Yellow Cab Co. v. New Jersey, 126 N.J.Super. 81, 312 A.2d 870. The Montana attorney general has ruled likewise: "Since the Montana Constitution and statutes enacted pursuant thereto set a lower maximum hour standard than does the Federal Act it follows as a matter of course that the Montana Eight Hour Law takes precedence and must be complied with regardless of the provisions of the Fair Labor Standards Act." Opinion 89, Opinions of the Attorney General, Feb. 8, 1950. In summary, we hold that the Fair Labor Standards Act does not preempt the subject of wage, hour or overtime regulation to the exclusion of Montana's Minimum Wages and Hours Act; that the employer here is not exempt from payment of overtime wages under either the Fair Labor Standards Act exemption or Montana's Minimum Wages and Hours Act; and that the employee is entitled to overtime pay of $669.39 pursuant to our Minimum Wages and Hours Act under the admitted facts of this case. Accordingly, the district court was in error in dismissing plaintiff's complaint. The findings of fact, conclusions of law and judgment of the district court are vacated. The case is remanded to the district court with directions to reinstate plaintiff's complaint; grant plaintiff partial summary judgment in the amount of $669.39 for overtime wages; for a hearing and determination of the amount to be awarded plaintiff as reasonable attorney fees; for such further proceedings as may be necessary to determine plaintiff's right to vacation pay and the statutory penalties in section 41- 1302, R.C.M., on his overtime pay award and his claim for vaca- tion pay, and for the determination and award of such costs and disbursements to plaintiff as are authorized by statute. Justice

October 25, 1977

f9c8fd0c-c548-4023-887e-68c58c75a52b

KNIGHT v OMI CORPORATION

N/A

13641

Montana

Montana Supreme Court

No. 13641 IN THE SUPREME COURT OF THE STATE OF MONTANA KENNETH K . KNIGHT and GRACE L . KNIGHT, his wife, Plaintiffs and Appellants, -vs- OM1 CORPORATION et al., Defendants and Respondents. Appeal from: District Court of the Sixth Judicial District, Honorable Jack D. Shanstrom, Judge presiding. Counsel of Record: For Appellants: Dzivi, Conklin, Johnson and Nybo, Great Falls, Montana William Conklin argued, Great Falls, Montana McDonald & Blackwood, Livingston, Montana For Respondents: Church, Harris, Johnson and Williams, Great Falls, Montana Earl J. Hanson argued, Great Falls, Montana Submitted: June 2, 1977 Decided : i f C Clerk M r . Justice Daniel J. Shea delivered the Opinion of the Court. Plaintiffs Kenneth K. Knight and Grace L. Knight appeal from a judgment entered pursuant to an order granting partial summary judgment t o defendant OM1 Corporation (OMI) i n the d i s t r i c t court, Park County. The d i s t r i c t court ruled that under the language of a lease between plaintiffs, as lessors, and OM1 a s lessee, plaintiffs were entitled t o neither future rentals nor damages based upon future rentals following plaintiffs' cancellation of the lease. The action concerns the lease of a motel, restaurant, and bar complex in Livingston, Montana. O n November 27, 1973, plaintiffs entered into a twenty year lease and supplemental agreement with J. Reid Hoggan, Patrick R. Hoggan, and Kent A. Hoggan, doing business as a partnership. O n June 26, 1974, Hoggans assigned their interest in the lease and the supplemental agreement t o defendant OMI. Plaintiffs consented to t h i s assign- ment i n an "Acknowledgement and Consent" dated April 15, 1975. OMI became delinquent i n its rent payments for the months of September, October, and November 1975 and pdaintiffs delivered written notice of their intention to cancel the lease. Following plaintiffs' voluntary termiration of the lease, on December 15, 1975 they reentered and took f u l l possession of the property. O n January 27, 1976, plaintiffs filed the instant action seeking damages for being deprived of future rent throughout the entire term of the lease, less any sums recoverable i n mitigation thereof. O n August 20, 1976, OM1 filed a motion for partial summary judgment raising the issue of whether plain- t i f f s could recover future rentals a f t e r termination of the lease. Thereafter p l a i n t i f f s f i l e d their motion for p a r t i a l summary judgment on the issue of future rentals a f t e r termination. The issue was briefed and argued by the parties and the d i s t r i c t court issued i t s opinion and order granting OMI'S motion for p a r t i a l summary judgment on October 26, 1976. Final judgment on the order was entered on November 22, 1976. P l a i n t i f f s appeal. Plaintiffs, on appeal, present two issues for review: ( 1 Whether the lease a t issue contains any savings clause preserving lessor's right upon breach by lessee to sue lessee for damages based upon rent falling due a f t e r cancellation of the lease. (2) Whether such a savings clause is a prerequisite t o the right of lessor t o sue the breaching lessee for damages based on rent falling due a f t e r cancellation. The parties agree that generally, following forfeiture, cancellation of a lease and reentry by the landlord terminates the lease and with it a l l obligations, covenants, and stipula- tions dependent upon continuation of the term. 49 Am Jur 2d, Landlord and Tenant, 51054; Bonnet v. Seekins, 126 Mont. 24, 30, 243 P.2d 317. There is also no dispute that a lease may provide for the performance of certain obligations or impose certain l i a b i l i t i e s a f t e r forfeiture. Such a provision, a savings clause, gives the landlord the right t o reenter and resume possession of the demised premises following nonpayment of rent and to hold the tenant still liable for subsequently accruing rents or for any deficiency i n the rent resulting from reletting. 49 Am Jur 2d, Landlord and Tenant, 51055. Provisions preserving the landlord's right t o recover future rent have been given effect i n many - 3 - jurisdictions. See: McIntosh v. Gitomer, (D.C. Municipal Court of @peals 1956), 120 A.2d 205, 206; Broniewicz v. Wysocki, 306 I11.App. 187, 28 N.E.2d 283,284; Walling v. Christie & Hobby, Inc., (1932, Tex.Civ.App.), 54 S.W.2d 186,188. I n the absence of clear language expressly preserving such right, courts generally w i l l not construe a lease as providing that, upon reentry or forfeiture, the tenant shall remain liable for unaccrued rent. Anno. 99 A.L.R. 42,45; Grommes v. St. Paul Trust Co., 147 Ill. 634, 35 N . E . 820, 822 (1893) ; Rohrt v. Kelley Manufacturing Company, 162 Tex. 534, 349 6.W.2d 9 5 3 8 Plaintiffs contend two clauses of the lease in issue expressly preserve their right t o recover future rent or damages based upon future rent following cancellation and reentry. The pertinent language, from the default provision, states: " 15 . D E F A U L T "If an event of default a s provided above shall occur, Lessor shall have the right, on notice, immediately t o cancel this lease, and the lease shall immediately terminate, and Lessor shall have the immediate right to re-enter and repossess the demised premises * * * and Lessor may re-enter the demised premises, and remove a l l persons therefrom without being guilty of trespass and without prejudice to any remedies for accrued rents or damages * * *. "In addition to the right of Lessor to cancel the lease a s above provided for i n t h i s Section and without waiver of such right, Lessor may sue Lessee for damages - for non-compliance with any covenant, agreement or warranty contained in t h i s lease or for non-payment of such sum required to be paid by Lessee to Lessor or for specific performance of any covenant of t h i s lease. * * *It (Emphasis added.) P l a i n t i f f s argue that under the f i r s t paragraph above, which provides that the lessor is authorized t o reenter the premises "without prejudice t o any remedies for accrued rents o r damages'' they have a right t o recover, a s damages, future unaccrued rent. Cases cited by p l a i n t i f f s i n support of t h i s argument are clearly distinguishable from the instant case. I n C.D. Stimson Co. v. Porter, (10th Cir.1952) 195 F.2d 410, the lessor's claim was founded on federal bankruptcy law which allows claims based on unexpired lease terms. I n United States Rubber Company v. White Tire Company, 231 S.C. 84, 97 S.E.2d 403 (1956), and i n Employment Advisors, Inc. v. Sparks (1963 Tex.Civ.App.), 364 S.W.2d 478, the lessee abandoned the premises prior t o the lessor's reentry. This clause does give p l a i n t i f f s the right t o cancel and reenter without losing t h e i r right t o recover rent and damages accrued t o the t i m e of cancellation. It cannot reasonably be interpreted t o continue defendant's obligation t o pay rent following cancellation under the t h e ~ r y that i n t h i s context, "damages" by definition includes future rent. P l a i n t i f f s argue the second paragraph quoted from the default provision, gives them the right t o suettfor damages for ~lon-ompliance with any covenant * * * o r for non-payment of such sum required t o be paid'' and the right t o recover future rent i n addition t o t h e i r right t o cancel the lease. N o such sure interpretation follows from the language of the clause. I f p l a i n t i f f s desired t o preserve their right t o recover damages for nonpayment of rent whether o r not and before o r a f t e r the lease has been cancelled, they should have s o ~ a t e d . This clause does not expressly continue defendant's l i a b i l i t y for rent unaccrued a t the time of cancellation and reentry by plaintiffs. Plaintiffs contend even i f the lease does not expressly preserve their right to recover future rent, it can be so construed as t o contemplate such recovery. W e hold, however, a lease must contain clear language to the effect that a tenant is to remain liable for rent accruing subsequent to the land- lord's cancellation, i f such l i a b i l i t y is to be imposed. Here, the lease language was not clear; it i s therefore unnecessary to resort to construction of the lease t o find whether or not such a savings clause was intended. Finally, plaintiffs argue the lease i n issue should be treated as a contract rather than a conveyance of an interest in land. They c i t e Wright v. Baumann, 239 Or.410, 398 P.2d 119, which concerned the duty of a lessor t o mitigate damages following the lessee's repudiation of a contract t o make a lease. In Wright the court indicated the business lease transaction in- volved was "essentially" a contract, and that contract law principles would apply. The present case involves a lease, not a contract t o make a lease. Plaintiffs contend Wright supports the argument that following cancellation for nonpayment of rent, damages based on rent due for the entire term of the lease should be recover- able. Whether or not plaintiffs' contention is correct, w e reject the argument that contract principles apply i n t h i s context. Section 17-301, R . C . M . 1947, pertaining t o the measure of damages for breach of contract, is also not applicable here. As stated, the general rule is that cancellation and reentry by the landlord, as in the present case, terminates the lease agreement. A savings clause imposes a special liability on the tenant which would othede not exist. To have effect, a savings clause must be explicit as to the right reserved. The language here was not explicit, and the decision of the district court was correct. Judgment is a£ f inned. Chief Justice w w Justices.

August 30, 1977

851635d8-5847-48c7-9722-5bc1ab99e4dd

ANDERSON v APPLEBURY

N/A

13431

Montana

Montana Supreme Court

No. 13431 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 CARL F. ANDERSON et al., Plaintiffs and Appellants, JAMES S. APPLEBURY et al., Defendants and Respondents. Appeal from: District Court of the Fourth Judicial District, Honorable Jack L. Green, Judge presiding. Counsel of Record: For Appellant: Patterson, Marsillo, Harris and Tornabene, Missoula, Montana Wm. George Harris argued, Missoula, Montana For Respondents : Boone, Karlberg and Haddon, Missoula, Montana Sam E. Haddon argued, Missoula, Montana Johnson and Greef, Hamilton, Montana Submitted: May 27, 1977 Decided : 1 5 1 9 n Mr. Justice John Conway Harrison delivered the Opinion of the Court. This is an action wherein plaintiffs Carl F. and Joyce A. Anderson, husband and wife, by their amended complaint sought damages, statutory penalties and attorney fees against defendants Andrew T. Lund and Anvil R. Summers and their sureties under the provisions of the Montana Real Estate License Act. This action arose out of the purchase by plaintiffs of a motel from defendants James S. and Ruth M. Applebury. Following depositions of all parties, Lund and Summers separately moved for summary judgment. The motion was submitted upon briefs, oral arguments and depositions. The district court, Ravalli County, granted the motion and summary judgment was entered in favor of defendants Lund and Summers. Plaintiffs appeal. The sole substantive issue presented for review by this Court is whether the district court erred in ruling that no genuine issue of material fact existed between the parties and that defend- ants Lund and Summers were entitled to judgment as a matter of law. In the fall of 1971, plaintiffs contacted Anvil R. Summers, a real estate salesman employed by Western States, Inc. of Hamilton, Montana, to locate a business in Hamilton available for purchase. Two businesses were shown and rejected. Summers indicated the SportsmanMotel might be for sale. Andrew T. Lund, a real estate broker d/b/a Western States, Inc., contacted James and Ruth Applebury, then owners of the SportsmanMotel, concerning a possible sale. The Appleburys subsequently informed him of their desire to sell. They indicated their selling price and stated the motel stood on land leased from the Burlington Northern Railway Co. Summers informed the Andersons of the availability of the motel for purchase. Plaintiffs were shown the motel, its supplies and the surrounding property by James Applebury, in the company of Lund and Summers. At no time did Lund or Summers make representations regarding the location of the building or related structures upon the leased premises, the condition of the motel, the potential profitability of the business, or the availability of title insurance. plaintiffs later conducted a second brief inspection of the premises. On November 8, 1971, plaintiffs agreed to purchase the SporfsmanMotel, admittedly relying in substance upon their inspec- tions of the premises and the small amount of information given them by James Applebury regarding the property. Lund and Summers repre- sented both parties in drafting the resultant "Contract for Sale of Property" executed on December 20, 1971. Attached to the contract and included as an exhibit to plaintiffs' amended complaint, was a copy of the lease agreement between the Appleburys and Burlington Northern. The lease contained a legal description of the property and referred to its depiction in a related plat. Plaintiffs took possession of the motel in January, 1972. Various problems with the physical structure of the building sur- faced immediately, and the motel was promptly listed for sale. In 1974 plaintiffs were informed by the Montana Department of Highways that a portion of their motel parking lot, sign, and canopy en- croached upon a highway right-of-way. Plaintiffs on July 3, 1975, filed their initial complaint against the Appleburys and Lund. Summers was added as a defendant by the amended complaint, filed on October 23, 1975. Plaintiffs alleged various violations of the Montana Real Estate License Act by Lund and Summers, specifically sections 66-1937 and 66-1940, R.C.M. 1947. The alleged violations essentially involve elements of fraud and misrepresentation in the inducement of the contract to purchase the motel. Here, we point out the district court, in granting summary judgment, failed to specify any grounds therefor, in its order, by memorandum or otherwise. Defendants maintain that summary judg- ment issued solely on the ground the statute of limitations had run. Plaintiffs however, argue a much broader range of issues, including questions of fraud and misrepresentation by Lund and Summers. Therefore, while the focus of our review relates to the propriety of summary judgment, the facts of the instant case sug- gest two areas of inquiry: (1) Whether any acts of Lund and Summers constitute vio- lations of the Montana Real Estate License Act, section 66-1937, R.C.M. 1947? (2) Whether plaintiffs' action based upon the alleged violations, if any, is barred by the running of the applicable statute of limitations? The principles governing summary judgment under Rule 56(c), M.R.Civ.P., were recently detailed in Harland v. Anderson, Mont . , 548 P.2d 613, 33 St.Rep. 363. Summary judgment is proper if the pleadings, depositions, answers to interrogatories, and ad- missions on file show there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. The initial burden of establishing the absence of any genuine issue of material fact is upon the movant. The party opposing the motion will be afforded the benefit of all reasonable inferences which may be drawn from his offered proof. Mally v. Asanovich, 149 Mont. 99, 423 P.2d 294; Johnson v. St. Patrick's Hospital, 148 Mont. 125, 417 P.2d 469. However, where the record before the court discloses no genuine issue of material fact, the burden shifts to the party opposing the Rule 56(c) motion to come forward with proof establishing such a genuine factual issue. Harland v. Anderson, supra.; Rickard v. Paradis, 167 Mont. 450, 539 P.2d 718; Barich v. Ottenstror, Mont . , 550 P.2d 395, 33 St.Rep. 481. In determining the propriety of summary judgment within the above principles, we first look to the acts of defendants, Lund and Summers, the basis of plaintiffs' complaint. Plaintiffs, in their amended complaint, elected to ground their cause of action for damages against Lund and Summers not in fraud within the common acceptance of the term, but rather under the provisions of the Montana Real Estate License Act. The pertinent provision creates a cause of action in favor of one injured through certain acts of a real estate salesman or broker. Section 66-1940 (c) provides: "(c) Any person sustaining damages by failure of a real estate broker or real estate salesman to comply with the provisions of this act, shall have the right to commence an action in his own name against the real estate broker and his surety, or the real estate salesman and his surety, or both the broker and any salesman employed directly or indirectly by such broker and their respective sureties, for the recovery of any damages sus- tained as a result of any act specified in section 66-1937 herein or as a result of the failure of the real estate broker or real estate salesman to com- ply with the provisions of this act. * * * " The specific acts alleged to have been committed by Lund and Summers in violation of section 66-1937 include: " (1) Intentionally misleading, untruthful, or inaccurate advertising, whether printed or by radio, display, or other nature, which advertising in any material particular or in any material way misrepresents any property, terms, values, poli- cies, or services of the business conducted; "(2) Making any false promises of a character likely to influence, persuade or induce; " (3) Pursuing a continued and flagrant course of misrepresentation or making false promises through agents or salesmen, or any medium of advertising, or otherwise; " (15) Failing voluntarily to furnish a copy of any written instrument to any party executing the same at the time of its execution; "(17) Intentionally violating any reasonable rule of regulation promulgated by the commission in the interests of the public and in conformance with the provisions of this act; "(19) Demonstrating his unworthiness or incompetency to act as a broker or salesman; Plaintiffs apparently abandoned reliance upon the latter three violations above mentioned, as the record contains no facts per- taining to such charges. They argue only their cause for fraud. It is well settled that a prima facie case of fraud is not established unless plaintiff proves the making of a material mis- representation, and reliance upon the truth of such misrepresentation. Dunlap v. Nelson, 165 Mont. 291, 529 P.2d 1394; Clough v. Jackson, 156 Mont. 272, 479 P.2d 266; Young v. Handrow, 151 Mont. 310, 443 1n the instant case the question is the making of material misrepresentations and reliance thereon by plaintiffs. However, the record indicates the parties are in complete agreement, in all material respects, that virtually no representations were made by Lund and Summers regarding the motel or the property upon which it is situated. The deposition testimony of plaintiff Joyce A. Anderson is replete with statements supporting that conclusion. In her August 11, 1975 deposition, she testified: "Q. In other words, at that point you and your husband felt that you had all the information that you needed to make up your minds to buy? A. We had all the information that we -- we had gotten, and we couldn't get, like I said, a financial state- ment of any sort. We simply relied on the honesty and integrity of these people and on their word. In her November 22, 1975 deposition, she testified: "Q. Then I would be correct in summing all these up that inasfar as your contacts with Mr. Summers is concerned, that at no time did he make any statement to you or your husband in your presence concerning any of the aspects of the motel? A. I would say that you were correct in saying that. "Q. And when I say any of the aspects, I'm referring specifically to the grounds of the Complaint that you have set forth in your Amended Complaint, is that correct? A. Yes, sir. "Q. Do you have any present recollection that Mr. Lund told you anything about that lease other than the fact that the lease was in exist- ence at that time? A. No, I believe we got the figures from Mr. Applebury when we were talking in the lobby after he had shown us the motel. "Q. So that with respect to the lease, then we start out with the fact that Mr. Lund had told you that there was a lease and that the Sports- man was located on the Burlington leased property? A. I believe this is correct." (Emphasis added.) It is plain that there is no genuine issue of material fact disclosed in the record, particularly in the depositions of the parties, which relates to the alleged fraud. Clearly, plaintiffs offer nothing in contraposition to defendants' proof no material misrepresentations were made and none relied upon. We hold, there being no genuine issue of material fact as to whether fraudulent representations were made or relied upon, defendants Lund and Summers were entitled to judgment on this point as a matter of law. Also, there is a second ground which supports the district court in its order granting summary judgment. As heretofore stated plaintiffs' amended complaint against Lund and Summers seeks re- covery of damages and penalties for alleged statutory violations. Applicable to such claims is the two year period of limitations. Section 93-2606(1), R.C.M. 1947, provides: "Within two years: "1. An action upon a statute for a penalty or forfeiture, when the action is given to an individual, or to an individual and the state, except when the statute imposing it prescribes a different limitation." Section 93-2607 (1) , R.C.M. 1947, provides: "Within two years: "1. An action upon a liability created by statute other than a penalty or forfeiture." Finch v. Kent, 24 Mont. 268, 61 P. 653; ~risbee v. Coburn, 101 Mont. 58, 52 P.2d 882; Falls Sand & Gravel Co. v. Western Concrete Inc., 270 F.Supp. 495. All of the acts giving rise to plaintiffs' cause of action occurred in late 1971 and early 1972. The above periods of limita- tion had run by early 1974, regardless of plaintiffs' knowledge or lack of knowledge of the existence of their claims. " ' * * * The fact that a person entitled to an action has no knowledge of his right to sue, or of the facts out of which his right arises, does not, as a general rule, prevent the running of the statute, or postpone the commencement of the period of limitation until he discovers the facts or learns of his right thereunder. * * * ' " Kerrigan v. OIMeara, 71 Mont. 1, 8, 227 P. 819. Plaintiffs argue the statutory period applicable to fraud actions in general, containing the "discovery" exception, is control- ling. Section 93-2607(4), R.C.M. 1947, provides: "Within two years: "4. An action for relief on the ground of fraud or mistake, the cause of action in such case not to be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud or mistake." Plaintiffs maintain their cause of action accrued in 1974, when they were notified of the encroachment, therefore, the complaint of July 3, 1975 was timely filed. It is argued such absence of actual knowledge, together with reliance upon the direction and advice of Lund and Summers, effectively prevented "discovery" by plaintiffs until 1974. However, we find that even if plaintiffs had a right to rely upon the statute of limitations for fraud and its "discovery" excep- tion, their claims would be barred by the running of the statute. Plaintiffs admit they were aware of the problems concerning the structure of the motel and the income of the business shortly fol- lowing the purchase in early 1972. Indeed, plaintiffs placed the motel on the market for sale almost immediately upon acquisition. Plaintiffs made no efforts to list their complaints to Lund and Summers, the Appleburys, or an attorney until mid-1975. One object of any given statute of limitations is to suppress stale claims and prevent aggrieved persons from sitting on their rights. No11 v. City of Bozeman, 166 Mont. 504, 534 P.2d 880. Likewise plaintiffs claim, in regard to the encroachment, is barred by the running of the statute. Plaintiffs rely on the excep- tion to the rule that there must be an affirmative act, representa- tion or concealment which is intended to and in fact does prevent discovery of facts giving rise to the cause of action. " * * * Unless there is some relation of trust or confidence between the parties which imposes upon a defendant the duty of making a full dis- closure of the facts, there must be some active affirmative concealment of the fraud, something said or done to continue the deception or to prevent inquiry and lull plaintiff into a sense of security, in order to postpone the running of the statute." Kerrigan v. O'Meara, 71 Mont. 1, 7, 227 P. 819. Neither Lund nor Summers was shown to have made any repre- sentations regarding the boundaries of the motel property. Neither was shown to have had knowledge of the encroachment. Therefore, there could have been no affirmative concealment. While there may have been a relation of trust or confidence between the parties, the fact that neither Lund nor Summers knew of the encroachment negates any duty they may have had to disclose it. The district court was correct in granting summary judgment to defendants, Lund and Summers. Justices -9- M r . J u s t i c e Frank I. Haswell specially concurring: I concur i n the r e s u l t , but not i n a l l that is said i n the foregoing opinion. Justice.

August 15, 1977

d714bacc-5eb4-4aec-bd0d-cf2a2e94811f

DENNING CADY v MISSOULA STUDY CO

N/A

13531

Montana

Montana Supreme Court

No. 13531 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 DELOY DENNING and LEW CADY, Petitioners, MISSOULA CITY AND COUNTY LOCAL GOVERNMENT STUDY COMMISSION et al., Respondents. Appeal from: District Court of the Fourth Judicial District, Honorable E. Gardner Brownlee, Judge presiding. Counsel of Record: For Petitioners: Robert L. Deschamps 111, County Attorney, Missoula, Montana Fred C. Root, Missoula, Montana Milodragovich, Dale & Dye, Missoula, Montana For Respondents: Garnaas, Hall, Riley and Pinsoneault, Missoula, Montana For Amicus Curiae: Mae Nan Ellingson, Missoula, Montana Submitted on briefs. Submitted: May 11, 1977 Mr.Justice Gene B. Daly delivered the Opinion s f the Court. Appeal from judgment of the d i s t r i c t court, Missoula County. O n M a y 11, 1976, the Missoula City and County Local Government Study Commission contracted with the Kathleen Walford Senior Citizen's Center t o conduct a voter attitude survey a f t e r the June 1, 1976 election and authorized an expenditure of $1,000 for t h i s purpose. The proposal submitted by the study commission was defeated in the June 1 election. O n June 15, 1976, Deloy Denning and Lew Cady, respondents here, secured a w r i t of prohi- bition directing the study commission t o desist from proceeding further with t h i s survey which would result i n the $1,000 ex- penditure. O n June 28, 1976 a show cause hearing was held. O n July 21, 1976, the d i s t r i c t court entered judgment making the w r i t of prohibition permanent. From t h i s judgment the study commission appeals. Respondents f i l e d no brief and no o r a l argument was had, The only issue on appeal i s whether the study commission had the authority to contract before the election t o spend $1,000 for a voter attitude survey to be taken a f t e r the election a t which the proposed charter was defeated. Y e t - , t h i s was not a consideration when the contract was entered into. Respondents contend the $1,000 expenditure by the study commission is unlawful i n that the purpose of the expenditure is not s e t out i n section 16-5104, R.C.M. 1947, and the spending of such funds are not authorized by section 16-5105, R.C.M. 1947. Statutes governing local government study commissions were enacted by the Montana Legislature in 1974 by the passage of approximately 35 new sections to implement the creation of the study commissions. Respondents claim section 16-5105 granted the study com- mission the power t o submit one proposal t o the electors and when t h i s proposal had been submitted the cornmission's job was over. This interpretation, however, is i n direct conflict with section 16-5108, R.C.M. 1947, which specifically states: " A l l study commissions s h a l l terminate June 30, 1977." 'I* * * I n the construction of a statute the intention of the legislature is t o be pursued i f possible; and when a general and particular provision are inconsistent, the l a t t e r is para- mount to the former. So a particular intent w i l l control a general one that is inconsistent with it. (Section 93-401-16, R.C.M. 1947) . I 1 City of Billings v. Smith, 158 Mont. 197, 211, 490 P.2d 221. Therefore, the study commission's powers did not end a t the election on June 1, 1976, but terminated June 30, 1977. Section 16-5115.9 gives the study commission permissive power t o prepare additional reports as a supplement t o its report, which is the proposed alternate form of government. Under t h i s section a study commission would have jurisdiction t o conduct a survey t o determine the reasons why the electorate defeated o r approved a proposed alternate+form of government t o establish the features of the existing foam of government with which the electorate is satisfied and those with which it i s dissatisfied. Such a survey i s , a s one study commissioner put it, rather like an autopsy, it does not benefit the deceased, but may shed light on similar problems i n the future. Section 16-5112(4), R.C.M. 1947, provides: ''The study commission may contract and cooperate with other agencies, public or private, a s it con- siders necessary for the rendition and affording of such services, f a c i l i t i e s , studies and reports t o the study commission a s w i l l best a s s i s t it t o carry out the purposes for which the study commission was- es- tablished.* * *I1 (Emphasis added.) Section 16-5112(5) , provides : "The study commission may do any and a l l other things as are consistent with and reasonably required t o perform i t s function under t h i s act." The information gained from a voter attitude survey, whether before or a f t e r the approval or rejection of an alternative form of government would be consistent with the commission's authority granted by Ch.51, T i t l e 16, R.C.M. 1947, i f reasonable and not an abuse of discretion. Since the sole purpose of the 1972 Montana Constitutional provision on local government was t o improve the delivery of local government services t o the people, any reasonable attempt t o ascertain voters' dissatisfaction with current or proposed governmental structure should be within the commission' s jurisdiction. I n conformity with the foregoing interpretation, the judgment of the d i s t r i c t court is reversed and the cause remanded with instructions t o dismiss the w r i t of prohibition. Aust ice &/ / ~ h y e f Just ice

August 8, 1977

8c3954fe-8af9-4fc3-9f0b-a3cc45652cb3

BRADBROOK v CITY OF BILLINGS

N/A

13693

Montana

Montana Supreme Court

N o . 13693 I N THE S U P R E M E COURT O F THE STATE O F M O N T A N A 1977 ROBERT S. BRADBROOK, P e t i t i o n e r and Appellant, -vs- THE CITY O F BILLINGS e t a l . , Respondents and Respondents. Appeal from: D i s t r i c t Court of t h e Thirteenth J u d i c i a l D i s t r i c t , Honorable C. B. Sande, Judge presiding. Counsel of Record: For Appellant: Moses, Tolliver and Wright, B i l l i n g s , Montana Charles F. Moses argued, B i l l i n g s , Montana For Respondents : Harold Hanser, County Attorney, B i l l i n g s , Montana Peterson and Hunt, B i l l i n g s , Montana Kenneth Peterson argued, B i l l i n g s , Montana Submitted: May 27, 1977 Decided: ' - F i l e d : Mr. Justice Frank I. Haswell delivered the Opinion of the Court. This is an appeal from the district court's denial of appellant's application for the issuance of a writ of prohibition. Proceedings were originally had before the Yellowstone County-Wide Gambling Commission. The gambling commission ordered a temporary suspension of appellant's license to conduct gambling activities. Thereafter, appellant applied to the district court, Yellowstone County, for the issuance of a writ of prohibition. Appellant is part owner of the General Custer Hotel in Billings, Montana, and the Royal Flush, a bar located therein. The Royal Flush has been licensed by the Yellowstone County-Wide Gambling Commission to conduct gambling activities on the premises. Appellant participates in the management of the Royal Flush and in the operation of the licensed games that take place in that bar. During the evening of March 23, 1976, appellant partici- pated in a game of poker in the Royal Flush. Poker is a gambling game authorized by and within the contemplation of the state laws and local ordinances regulating gambling. Appellant was subsequently charged with violation of Section 5.70.66(a), Ordinances of City of Billings. It provides: "Interest Holders Ineligible. No person who owns any interest of any sort whatever in or to any licensed gaming operation and who also actively participates in the management or conduct of the licensed games or establishment shall play or be permitted to play either in person or through an agent at any gaming table in such establishment * * *." Notice of hearing before the gambling commission, dated April 6, 1976, was served upon appellant. At the hearing oral argument was had and briefs were submitted. On June 18, the gambling commission ordered the gambling license issued to the Royal Flush and appellant be suspended for a period of seven days, as a result of appellant's violation of Section 5.70.66(a), Ordinances of City of ~illings. The order further provided the suspension of license would be stayed in the event appellant appealed to the district court. Rather than appealing the decision of the gambling commis- sion to the district court as provided in the gambling ordinances, appellant filed an application for a writ of prohibition. This application was heard by the district court and denied. Appellant seeks reversal of the order denying the issuance of a writ of pro- hibition and raisesfour issues for review on appeal: 1. Whether prohibition is an appropriate remedy; 2. Whether sections 62-707 and 62-708, R.C.M. 1947, which grant local governing bodies the power to issue gambling licenses are unconstitutional as violating Art. V, Section 12, 1972 Montana Constitution; 3. Whether the Montana legislature has given local govern- ing bodies power to control or regulate gambling as opposed to the power to merely issue licenses to conduct gambling activities; 4. Whether a local governing body can validly delegate to an appointed body (the gambling commission) the power to issue licenses. The writ of prohibition lies to arrest the proceedings of any tribunal, corporation, board or person whether exercising func- tions judicial or ministerial, when such proceedings are without or in excess of the jurisdiction of such tribunal, corporation, board or person. Section 93-9201, R.C.M. 1947. It may be issued by the Supreme Court or a district court in cases where there is no plain, speedy, and adequate remedy in the ordinary course of law. Section 93-9202, R.C.M. 1947; State ex rel. Myersick v. is- trict Court, 53 Mont. 450, 164 P. 546; State ex rel. Morales v. The City Commission of the City of Helena, Mont . I P.2d , 34 St.Rep. 697. To determine whether a remedy is speedy this Court has set forth the following test: " * * * A remedy is speedy when, having in mind the subject matter involved, it can be pursued with expedition and without essential detriment to the party aggrieved; and it is neither speedy nor adequate if its slowness is likely to produce immediate injury or mischief." State ex rel. Marshall v. District Court, 50 Mont. 289, 292, 146 P. 743. See also: State ex rel. Taylor v. District Court, 131 Mont. 397, Upon examination of the instant case we find appellant had a plain, speedy, and adequate remedy in the ordinary course of law. Section 5.70.72, Ordinances of City of Billings, specifically pro- vides for an appeal from a ruling of the gambling commission to the district court. In addition to having a specific remedy, it is clear appel- lant's remedy was plain, speedy, and adequate. The gambling com- mission's order stated the suspension would be stayed during the pendency of appellant's appeal to the district court. Therefore, the bringing of an appeal would not have required appellant to suffer any injury during the pendency of such appeal. The district court was correct in its denial of appellant's application for a writ of prohibition as appellant had a plain, speedy, and adequate remedy in the ordinary course of law. Appellant's issue 2 is a challenge to the constitutionality of sections 62-707 and 62-708, R.C.M. 1947. This issue is not properly before this Court because of noncompliance with Rule 38, M.R.App.Civ.P. This Court in Grant v. Grant, 166 Mont. 229, 232, 531 P.2d 1007, stated: "Rule 38, M.R.App.Civ.P., requires that when the state of Montana or its agencies or employees are not parties to a suit, the appellant must, upon filing the record, give immediate notice in writing to the Supreme Court of the existence of constitu- tional questions, specifying the section of the code or chapter of the session law to be construed so that the Court can notify the attorney general of the state of Montana. Failure to comply with this rule prevents the notice from being given the attorney general and therefore he has no opportunity to appear and defend the acts of the Montana legislature. Under these circumstances this Court will not proceed to answer the con- stitutional questions as Rule 38, M.R.App.Civ.P., was not followed." See also: Clontz v. Clontz, 166 Mont. 206, 531 P.2d 1003; Gilbert v. Gilbert, 166 Mont. 312, 533 P.2d 1079. We therefore decline to rule on the constitutional issues here. Resolution of appellant's issue 1 concerning the propriety of the remedy of prohibition makes discussion of issues 3 and 4 unnecessary. The judgment of the district court is affirmed. Justice We Concur: I I / ; , , / li. Justices , ,

August 17, 1977

d56a1b72-94eb-408b-8ae7-a946779b55a6

MARRIAGE OF BERTHIAUME

N/A

13584

Montana

Montana Supreme Court

No. 13554 I N T H E S U P R E M E C O U R T O F THE STATE OF MONTANA 1977 I N RE: THE MARRIAGE OF SIFROY J. BERTHIAUME, P e t i t i o n e r and Respondent, -vs- PAULINE H . BERTHIAUME , Defendant and Appellant. Appeal from: District Court of t h e F i r s t J u d i c i a l D i s t r i c t , Honorable P e t e r Meloy, Judge presiding. Counsel of Record: For Appellant: / ; ; j 1 & C h r i s t i a n , McCurdy, Ingr9,ham & Wold, - & - , Montana Keith McCurdy argued, For Respondent: G a r r i t y and Keegan, Helena, Montana Donald A. Garrity argued, Helena, Montana . . Filed: Submitted: May 2 4 , 1977 Decided : M r . Justice John Conway Harrison delivered the Opinion of the Court : This i s an appeal by the wife from the provisions of a - , divorce decree granted July 14, 1976, in the d i s t r i c t court, Lewis and Clark County, concerning property settlement and support of minor children. N o issue i s taken t o the granting of the divorce. Appellant presents three issues for review: Issue 1. Whether the d i s t r i c t court abused i t s discretion i n mhking the property division and distribution a s s e t forth in i t s decree? Issue 2. Whether the d i s t r i c t court abused i t s discretion b.fai1in.g t o provide for the support of the minor children of the parties i n i t s decree? Issue 3. Whether the d i s t r i c t court kbused its discretion by denying appellant's motion for a new t r i a l and overruling her objections to the court's findings of fact and conclusions of law? Sifroy and Pauline Berthiaume were married in June 1970. Both were employed and continued to be so u n t i l Pauline quit her job in August 1974 t o take care of their two children. While employed, Pauline earned $6,100 and Sifroy $8,100 per year. Their earningswere put into a joint account and used for family pur- poses. Following Pauline's termination of employment, she drew unemployment compensation for 14 months a t the r a t e of $68 per week, which was deposited t o the joint account. The parties used their t o t a l earnings for the family with the exception of $100 per montb paid by Sifroy for support of a child of a previous marriage. A t the time of the marriage the p a r t i e s bought a home i n Helena. Sifroy paid $5,500 a s a down payment by cashing c e r t i - f i c a t e s of deposit. I n August 1973 the p a r t i e s purchased another home with 2 112 acres a t Elliston, Montana. They borrowed $6,000 from Pauline's parents t o ,make the down payment, paying it back when the Helena home was sold. I n addition, from the proceeds of the Helena s a l e they purchased some c a t t l e . The purchase price. of the E l l i s t o n property was $25,000 and a t the date of hearing approximately $16,000 remained t o be paid on the mortgage. The estimated value of the home and property was between $30,000 and $35,000. During the period they lived a t Elliston,they raised a few c a t t l e . The maximum number was 27 head. 7 head were given t o Pauline by her parents. Both p a r t i e s t e s t i f i e d t o the ownership of various items of personal property and the desired distribution. A t the time of t r i a l the minor children were aged 5 and 3 and were i n Pauline's custody. A t t h a t time Sifroy was earning $821 per month and Pauline, who was working f o r hourly wages a s a waitress and j a n i t r e s s , was making approximately $400 per month. Issue 1. Section 48-321(1), R.C.M. 1947, controls the t r i a l c o u r t ' s consideration and disposition of the marital property. This s t a t u t e provides: "Disposition of property. (1) I n a proceeding f o r dissolution of a marriage, l e g a l separation, o r disposition of property following a decree of dis- solution of marriage o r legal separation by a court which lacked personal jurisdiction over the absent spouse o r lacked jurisdiction t o dispose of the property, the.court, without regard t o marital misconduct, s h a l l , and i n a proceeding f o r l e g a l separation may, f i n a l l y equitably apportion between the p a r t i e s the property and a s s e t s belonging t o e i t h e r or both however and whenever acquired, and whether the t i t l e thereto i s i n the name of the husband or wife or both. In making apportionment the court shall consider the duration of the marriage, and prior marriage of either party, antenuptial agreement of the parties, the age, health, station, occupation, amount and sources of income, vocational s k i l l s , employability, estate, l i a b i l i t i e s , and need of each of the parties, custodial provisions, whether the apportionment i s i n l i e u of o r i n addition to maintenance, and the opportunity of each for future acquisition of capital assets and income. The court shall also consider the contribution ,or dissipation of value of the respective estates, and the contribution of a spouse as a homemaker or t o the family unit. I n disposing of property acquired prior t o the marriage; property acquired by g i f t , bequest, devise or descent; property acquired i n exchange for property acquired before the marriage o r i n exchange for property acquired by g i f t , bequest, devise, or descent; the increased value of property acquired prior to marriage; and property acquired by a spouse a f t e r a decree of legal separation, the court shall consider those contributions of the other spouse t o the marriage, including the nonmonetary contribution of a homemaker; the extent t o which such contributions have facilitated the maintenance of t h i s property and whether or not the property disposition serves a s an alternative to maintenance arrangements. I t Here, the t r i a l court i n i t s findings of fact No. V I I I , found : "That the parties accumulated real and personal property which i s held mostly i n joint tenancy. "The properties of the parties should be divided as equally as possible." Then, the court went on, and awarded Sifroy Che family home without making anif6ffsetting provision for Pauline. Under the evidence, the t o t a l market value of the property awarded Pauline amounts t o less than $1,000 while that awarded Sifroy amounts t o over $17,000. I n percentages, Sifroy apparently re- ceived well over 90 percent of the combined r e a l and personal property --and such award -5s direcfly- contraryJ- to? the ;df'stri&t -court1 s finding of fact No. V I I I , that the property should be divided as equally as possible. Accordingly, it amounts t o a clear abuse of discretion by the t r i a l court and must be reconsidered. I n Porter v.! Porter, 155 Mont. 451, 457, 473 P.2d 538, t h i s Court stated the scope of review by the Supreme Court on appeal i n cases involving a claim that the d i s t r i c t court abused its discre t ion : "* * *a reviewing court i s never justified in substituting its discretion for that of the t r i a l court. In determining whether the t r i a l court abused i t s discretion, the question is.-not whether the reviewing court agrees with the t r i a l court, but, rather, did the t r i a l court i n the exercise of .its dis&retio~i'a~t~arbitsariity',wfthout ,the: ; c 3 : employment of conscientious judgment or exceed the bounds of reason, i n view of a l l the circum- stances, ignoring recognized principles resulting i n substantial injustice." 155 Mont. 457. Issue 2 is directed a t the failure of the t r i a l court t o make provisions i n its judgment decree for the support and maintenance of the minor children. The d i s t r i c t court did make i t s finding of fact No. V I and i t s conclusion of law No. 3, providing : I . That the petitioner i s an able-bodied person who is capable of contributing t o the support and maintenance of the said minor children of the parties hereto. That the petitioner is a t the present time employed by the State Motor Pool, State of Montana, and holding a position with that department which pays approximately $800 a month. That $50 a month per child is a reasonable sum t o be contributed by the petitioner for the support of said minor children. That support payments should continue for each of said children u n t i l said child reaches the age of 18, or is emancipated, whichever should occur first." "3. That petitioner s h a l l pay t o respondent the reasonable sum of $50 per month per child for the support of said minor children of the parties hereto; that said support payments shall continue for each of said children u n t i l said child reaches the age of 18, o r is emancipated, whichever should occur f i r s t ; that the petitioner s h a l l maintain i n force and effect an insurance policy providing for medical and hospitali- zation coverage for the minor children of the parties hereto; that both petitioner and respondent are able- bodied persons capable of providing for the reasonable medical, dental and optical expenses incurred for the proper care and maintenance of the minor children of the parties hereto over and above those amounts covered by the insurance policy presently i n effect on said children; that, therefore, a l l medical, dental and optical expenses incurred for the proper care and maintenance of the minor children of the parties hereto, over and above those amounts covered by the insurance policy presently in effect on said children, s h a l l be divided equally between petitioner and respondent." The failure of the t r i a l court t o make provision i n the decree for the support of the minor children was an obvious oversight and must be corrected. The controlling statute i n t h i s respect is section 48-323, R.C.M. 1947: "In a proceeding for dissolution of marriage, legal separation, maintenance, or child support, the court may order either or both parents owing a duty of support t o a child t o pay an amount reasonable or necessary for h i s support, without regard t o marital misconduct, a f t e r considering a l l relevant factors including: "(1) the financial resources of the child; "(2) the financial resources of the custodial parent ; "(3) the standard of living the child would have enjoyed had the marriage not been dissolved; "(4) the physical and emotional condition of thechild, and h i s educational needs; and " (5) the financial resources and needs of the noncustodial parent. " O n remand, the d i s t r i c t court is directed t o make an award of support money i n its decree i n conformity with section 48-323. Issue three concerns denial by the d i s t r i c t court of appel- lant ' s motion for a new t r i a l and the overruling of her objections t o i t s findings of fact and conclusions of law. Section 93-5602, R:C.M. 1947, provides: "New t r i a l i n equity cases. N o new t r i a l shall be granted i n equity cases, o r i n cases t r i e d by the court without a jury, except on the grounds mentioned i n the f i r s t , third, and fourth subdivision of section 93-5603 ." Section 93-5603, R.C.M.1947, provides in relevant part: "When a new t r i a l may be granted. The former verdict or other decision may be vacated and a new t r i a l granted, on the application of the party aggrieved, for any of the following causes, materially affecting the substantial rights of such party: "1. Irregularity i n the proceedings of the court, jury, or adverse party, or any order of the court, o r abuse of discretion, by which'either party was pre- vented from having a f a i r t r i a l ; "-3. Accident or surprise, which ordinary prudence could not have guarded against; 4 . Newly discovered evidence, material for the party making the application, which he could not, with reasonable diligence, have discovered and produced a t the t r i a l * * *.Ir This Court i n Downs v. Downs, , Mont . , 551 P.2d 1025, 1026, 1027, 33 St.Rep. 576, 578, 579, remanded the cause t o the d i s t r i c t court with directions t o hold a new t r i a l stating: "In view of the unreliability of the record a s t o the true net worth of defendant a t the time of the marriage and a t the time of the divorce, the judgment i s s e t aside." Further i n Downs in support of its conclusion, t h i s Court stated: 'I* * * This failure t o fully put before the t r i a l court proper valuation of a l l the property caused the t r i a l court t o make an inequitable distribution of the property -;insofar?: as p l a i n t i f f ' s needs are concerned .I' Paulinet s motions t o amend the findings of fact and conclu- sions of law and t o a l t e r o r amend the judgment should have been granted by the d i s t r i c t court for the reasons hereinbefore recited. A s an alternative, Pauline asked for a new t r i a l . This motion was also denied. This denial constituted an abuse of discretion i n that the d i s t r i c t court should have required testimony on the value of the real and personal property, thus enabling it to make an equal distribution of the marital assets and provide for the support of the minor children. The t r i a l court's decree i s s e t aside and the cause i s remanded for new t r i a l on the issues of equitable division of r e a l and personal property of the parties and for determination and inclusion i n the decree of a provision for the support of the minor children. W e Concur: c h i e m u s t ice' /\.

August 18, 1977

504311c9-87e4-407e-8750-8660cce8dd68

SCHOOL DIST NO 1 v DRISCOLL

N/A

13604

Montana

Montana Supreme Court

No. 1 3 6 0 4 I N THE SUPREME COURT O F THE STATE O F M O N T A N A 1977 SCHOOL DISTRICT No. 1 o f S i l v e r Bow County, a P o l i t i c a l s u b d i v i s i o n o f t h e S t a t e o f Montana e t a l . , P l j i n t i f f and A p p e l l a n t , MAURICE DRISCOLL, Defendant and Respondent. Appeal from: D i s t r i c t Court o f t h e Second J u d i c i a l D i s t r i c t , Honorable James D. Freebourn, Judge p r e s i d i n g . Counsel o f Record: For A p p e l l a n t : John G. Winston, County A t t o r n e y , B u t t e , PTontana C r a i g P h i l l i p s a r g u e d , Deputy County A t t o r n e y , B u t t e , Montana For Respondent: Robert Holland argued, B u t t e , Montana For Amicus C u r i a e : McKittrick and Duffy, G r e a t F a l l s , Montana Joseph W. Duffy argued, G r e a t F a l l s , Montana James D r i s c o l l argued, Helena, Montana Submitted: June 7 , 1977 P . i Decided: "2+1G , i : *.. 4. F i l e d : C l e r k M r . J u s t i c e John Conway Harrison delivered the Opinion of the Court. This is an appeal from a judgment of the d i s t r i c t court, Silver B o w County, awarding defendant school supervisor accrued sick and annual leave, and h i s contractual salary f o r the months of May and June, 1975. A t the outset we note i n view of the f a i l u r e of appellant School D i s t r i c t t o s e t f o r t h the issues of i t s case a s provided by Rule 23, M.R.App,Civ.P., we w i l l discuss t h i s matter on the issues a s delineated and s e t f o r t h by respondent. Issues I and 11 ask t h i s Court t o determine whether the d i s t r i c t court properly interpreted the clauses of the c o l l e c t i v e bargaining contract concerning wages, hours and working condi- tions entered into by and between Butte Teamsters Union, Local No. 2 and the School D i s t r i c t . Issue I11 is directed a t the c o u r t ' s finding t h a t respondent was e n t i t l e d t o h i s contract pay f o r the months of May and June, 1975. The t r i a l court found respondent Maurice Driscoll was a party t o three contracts with School D i s t r i c t No. 1, not two a s alleged by the School D i s t r i c t . The f i r s t contract was a collec- t i v e bargaining agreement executed by and between the School D i s t r i c t and Butte Teamsters Union, Local No. 2 a s the sole bar- gaining representative f o r a l l administrative personnel i n the school system. The second contract was an individual contract executed on July 1, 1974, between Driscoll and the School D i s t r i c t providing f o r an annual salary of $24,217.40. The t h i r d contract was the contract of employment of Driscoll, a s a consultant t o the a s s i s t a n t director of the Vo-Tech Center, and the Vo-Tech Center. I t became e f f e c t i v e on February 28, 1975, t o run through t h e months of March, April, May and June, 1975. The employment f a c t s a r e not i n dispute. Driscoll had been Director of the Vo-Tech Center f o r several years. O n January 25, 1975, he n o t i f i e d the School D i s t r i c t t h a t he in- tended t o r e t i r e on June 30, 1975. He requested a temporary director be appointed e f f e c t i v e February 28, 1975 and t h a t he would remain a s a consultant through June 30, 1975. O n February 18, 1975, Dave Keltz was appointed a s s i s t a n t director i n charge of operations e f f e c t i v e February 28, 1975. Driscoll was paid as a consultant through April 1975. He was informed on April 29, 1975 t h a t the Board of Trustees had rescinded i t s motion of January 20, 1975 and he was dismissed from a l l duties e f f e c t i v e M a y 5, 1975. Driscoll performed services i n May and June, but was not paid f o r them. Issue I. The d i s t r i c t court did not e r r i n finding t h a t Driscoll was e n t i t l e d t o receive 71 days s i c k leave multiplied by h i s d a i l y r a t e of pay which i s determined by dividing h i s annual salary by 190 a s s e t f o r t h i n Article XXIV of the c o l l e c t i v e bargaining agreement entered i n t o by and between Butte Teamsters Union, Local No. 2 and School D i s t r i c t No. 1. The relevant p a r t of the collective bargaining agreement, A r t i c l e XXIV, Sick Leave, reads: "Every administrator of School D i s t r i c t No. 1 s h a l l be allowed an annual f i f t e e n (15) days s i c k leave with f u l l salary cumulative f o r one hundred f i f t y (150) days. Retirement pay w i l l be 50% of accumulated sick leave and s h a l l be included a s p a r t of the administrator's yearly salary f o r the year i n which he r e t i r e s . * * * Said d a i l y r a t e of pay s h a l l be deter- mined by dividing h i s annual salary o r wage-:by 190." It was stipula tEd between the parties that Driscoll had accumulated 142 days of annual sick leave. The School District contends that in determining how much accumulated sick leave should be paid to Driscoll as retirement pay, h i s yearly salary of $24,000 should be divided by 260, and then, that figure should be multiplied by 7 1 days (50% of the accumulated sick leave -- Article XXIV, Sick Leave). Driscoll contends, and dt:was.+found by the d i s t r i c t court, that he should be paid sick leave pay in terms of retirement a t the rate of $127.46 by dividing h i s annual salary of $24,000 by 190 x 7 1 days, as i s clearly s e t forth in Article XXIV of the contract. W e note the quoted portion of Article XXIV of the contract relates t o benefits and coverage for every administrator. The School District concedes that the contract generally, and that clause particularly,covers Driscoll. There i s nothing whatsoever i n t h i s particular clause indicating the parties should use the figure "260" i n the formula for determining how much accumulated sick leave w i l l be received a s retirement pay by the adminis- trator. The chairman of the Board of Trustees admitted that the figure "260" was picked out of the a i r ; while the school clerk asserted that the figure "260" should be used because it has reference t o the number of days Driscoll was employed under h i s contract. That is not part of the contract agreed upon by the parties; rather, the parties agreed t o use the figure "190". It i s clear the language of the particular contract clause was what was contracted for. J i m Roberts, secretary-treasurer of the Teamsters Union, who negotiated the contract testified: YOU "Q. w i l l / relate to the Court, i f you can remember that, particularly in the 1974 negotiations the meetins cumerning t h i s particular provision? A. During the course of a l l collective bargaining processes with the administrators w e have submitted demands to the Board t o improve sick leave as it i s spelled out in the current contract and during a l l of the collective bargaining negotiations you reach a point where some of the things have to go by the wayside and during the '74 and '75 negotiations w e reached that point and we went into caucus without committees and it was decided that based on the, as our understanding of the negotiated provisions as it exists, that w e were adequately protected and t o back off on our proposals and i n doing so w e tried to make it known to the school board that we f e l t , with the fact that the 190 days was a formula used that we were adequately protected on our sick leave. "Q. It was your interpretation that the 190 figure divided into t h e i r annual salary applied t o every administrator i n the d i s t r i c t ? A. Without question. "Q. And the Board, to your understanding, fully understood that? A. Yes, definitely. "Q. I n regard to that, what have they done as f a r as the negotiations that are presently involved i n t h i s regard to that a r t i c l e ? A. A t the l a s t bar- gaining session w e had with the Board of trustees on February 24, I believe that's when it was, the Board submitted a proposal t o us even though it may have been untimely t o modify the current sick leave provisions t o spell out that the 190 days be changed t o read the actual number of days that each adminis- t r a t o r has worked, h i s work year schedule." Again, there i s nothing i n the contract as it pertains t o sick leave wherein 260 is interjected into the formula t o establish the sick leave. While the sick leave provision clearly contemplates having every administrator of the School District come under i t s coverage, a casual look a t the clause pertaining to vacations, Article XXVII, specifies that it only applies t o administrators employed on a twelve-month basis. I f the School Board desired t o have the formula for twelve- month employees based on 260 rather than 190, obviously the place to bring t h i s up was a t the bargaining table. The School District wants t h i s Court t o interpret the sick leave clause i n such a way as t o give effect t o i t s posi- tion which, up to the time i n question, it has been unsuccessful in accomplishing through the collective bargaining process. The courts have no power t o make contracts for parties. Horst v. Staley, 101Mont. 543, 54 P.2d 876; Reeves v. L i t t l e f i e l d , 101 Mont. 482, 54 P.2d 879. The language of the contract is clear and unambiguous, and the courts have no authority t o change the contract or disregard the express language used. Williams v. Insurance Co. of North America, 150 Mont. 292, 434 P. 2d 395. This Court i s not a t liberty under the guise of construction t o a l t e r the contract of the parties. Ryan Mer- cantile Co. v. Great Northern Railway Co., 186 F.Supp. 660, affirmed 294 F.2d 629. In the interpretation of contracts, the language employed must be given i t s ordinary meaning. Quirk v. Rich, 40 Mont. 552, 107 P. 821, There are no incon- sistencies in the contract clause i n question. There are no ambiguities i n question. The clause is clear, Driscoll was t o receive retirement pay a s decreed by the d i s t r i c t court. The School District attempted t o justify its rationale by premising i t s argument on a survey of Montana administrative salaries. The court properly sustained the objection of Driscoll that t h i s exhibit was not relevant t o the issues here. The School District erroneously reldes upon Zderick v. Silver B o w County, 154 Mont. 118, 460 P.2d 749, for the proposition that it had no authority t o enter into a contract for sick leave or severance pay. That case involved a county, not a school d i s t r i c t , and held that because, i n 1969, the l e g i s l a t u r e had not yet granted t o county commissioners the authority t o contract over the subject matter, to-wit: the accumulation of unused sick leave t o be used a s severance pay, the p a r t i c u l a r clause was t o be stricken. I n 1973 the s t a t e l e g i s l a t u r e enacted i n t o law T i t l e 59, Chapter 16, R.C.M. 1947, granting a l l public employers the r i g h t t o bargain collec-- t i v e l y with t h e i r employees over r a t e s of pay, hours, fringe benefits and other conditions of employment. Sections 59- 1601 through 59-1617, R.C.M. 1947. However, since 1971 school d i s t r i c t s have had the authority t o enter i n t o binding c o l l e c t i v e bargaining contracts over such matters. Sections 75-6115 through 75-6128, R.C.M. 1947 (repealed 1975). Zderick man- dated the l e g i s l a t u r e must a c t i n t h i s area before such a clause could be enforced, and t h a t is p r e c i d y what the l e g i s l a t u r e has done. A d d i t h a l l y , i n 1974 the s t a t e l e g i s l a t u r e enacted Chapter 374, Montana Session Laws, which amended section 68- 1602, R.C.M. 1947. That p a r t i c u l a r law concerns the propo- s i t i o n t h a t a public employee who i s a member of a retirement system funded through monies established under a c o l l e c t i v e bargaining agreement a l s o remains e l i g i b l e a s a member of a public employment retirement system. By enacting t h a t p a r t i - cular provision i n t o law, it is c l e a r the s t a t e l e g i s l a t u r e reaffirmed its policy t h a t the p a r t i e s could collectively bar- gain f o r such things a s retirement pay. The School D i s t r i c t c i t e s Bitney v. School D i s t r i c t No. 44, 167 Mont. 129, 135, 535 P.2d 1273, which d e a l t i n p a r t with the amount of unused sick leave pay a superintendent of schools was t o receive when h i s contract was terminated. Here, Bitney does l i t t l e t o support the School D i s t r i c t ' s position; rather it supports the d i s t r i c t c o u r t ' s decision. I n Bitney there was no c o l l e c t i v e bargaining contract covering the issue, and the School D i s t r i c t policy was s i l e n t on the matter. This Court held t h a t the terms of the contract entered i n t o by and between the superintendent and the school d i s t r i c t should be enforced and said: "Therefore, we find p l a i n t i f f contracted f o r the regular sick leave granted t o a l l teachers of the school d i s t r i c t . " (Emphasis added.) 167 Mont. 135. Similarly, in the i n s t a n t case, it is contended the contract r i g h t s , a s the d i s t r i c t court held, should be enforced. W e agree. Issue 11. The court did not e r r i n finding t h a t Driscoll was e n t i t l e d t o receive additional s i c k leave a t the r a t e of 17.5 days multiplied by $109.46 which is determined pursuant t o Article XXIV of the collective bargaining agreement. The relevant p a r t of t h e collective bargaining agreement, Article XXIV, Sick Leave, reads: "* * * I n addition, f i v e (5) days per year cumulative t o t h i r t y - f i v e (35) days s h a l l be allowed a t the difference between $18 per day and the administrator's d a i l y r a t e of pay. Said daily r a t e of pay s h a l l be determined by dividing h i s annual salary o r wage by . 190." Pursuant t o the quoted language, t h e d i s t r i c t court found and decreed t h a t Driscoll was t o receive the additional sick leave pay of 17.5 days i n the amount of $1,915.53. The School D i s t r i c t a s s e r t s t h i s Court should Fgnore the language "In sddi- tion" found i n the language contracted f o r by the p a r t i e s o r , t h a t the Court should give it some type of abortive meaning t o deny Driscoll the benefits t o which he has a l e g a l r i g h t . The words "In addition" a r e not ambiguous and should be interpreted i n t h e i r usual sense. Section 13-710, R.C.M. 1947. Black's Law Dictionary, Fourth Edition, contains these definitions: "Add. To unite, attach; annex; join." "Addition. Extension; increase, augmentation. 11 The d i s t r i c t court did i n t e r p r e t these words i n t h e i r usual sense denoting t h a t something is added t o what preceded it. Clearly, the ruling of the d i s t r i c t court is supported by substantial evidence. Roberts' testimony is d i r e c t l y on t h i s point. Even Grant, the Chairman of the Board of Trustees, ad- mitted the School D i s t r i c t was "remiss" i n not getting other language i n the contract i f it intended something d i f f e r e n t by the p a r t i c u l a r clause. The contract clause i t s e l f , a s well a s the applicable case law c i t e d heretofore, demonstrates without a doubt t h a t the d i s t r i c t c o u r t ' s finding, conclusions and judg- ment should not be disturbed. Issue 111. The court did not e r r i n finding the School D i s t r i c t owed t o Driscoll $4,036 pursuant t o the consultant contract entered i n t o by and between the p a r t i e s . Maurice Driscoll was a teacher and administrator i n School D i s t r i c t No. 1 f o r approximately 35 years. I n February 1975, he advised the School Board he wished t o r e t i r e on June 30, 1975. H i s retirement was approved by the School Board which indicated t h a t f o r the months of March, April, May, June 1975, Driscoll would serve a s a consultant t o Dave Keltz, who was named acting director i n ~ r i s c o l l ' s stead. Driscoll's pay f o r these four months was t o be $2,018 per month. The only termination notice Driscoll received was a l e t t e r written pursuant t o action of the Educational Committee indicating h i s contract had been rescinded. Driscoll then n o t i f i e d the Teamsters Union,Local No. 2 of the l e t t e r he received concerning the rescission of the contract, and the Teamsters Union immediately protested the action pursuant t o terms of the c o l l e c t i v e bargaining agreement. Driscoll continued t o serve a s a consultant from March u n t i l June 30, 1975, advising Keltz, the acting d i r e c t o r , and insuring t h a t the orderly t r a n s i t i o n was accomplished. He received h i s monthly salary f o r April, but not f o r May o r June, 1975. Throughout t h i s period (1) Driscoll worked and made himself available on a bonsulting basis a s per h i s contract, and (2) he maintained h i s o f f i c e i n the vocational educational building. Further, no one i n an o f f i c i a l capacity advised him throughout the period of May and June t h a t he should not perform h i s duties. This was substantiated by Keltz who t e s t i f i e d t h a t Driscoll, f o r the months of May and June 1975, did advise and consult with him and maintained h i s o f f i c e u n t i l June 30, 1975. O n t h a t p a r t i c u l a r date, the School Board cleared out ~ r i s c o l l ' s f i l e s , a s it was the l a s t day of the contract. During t h i s e n t i r e period Keltz was never o f f i c i a l l y o r otherwise n o t i f i e d by the School Board, the Superintendent of Schools, o r the Clerk of the School D i s t r i c t t h a t Driscoll had been f i r e d o r t h a t h i s contract had been rescinded. Again, the only indication t h a t he had i n t h i s regard was seeing t h e l e t t e r Driscoll received on the matter, written pursuant t o the action of the Education Committee. W e note here t h a t the Board of Trustees, s i t t i n g a s a School Board, did not take any action a t a public regular meeting o r a properly called special meeting o r a t a l l , r e l a t i v e t o the rescission of Driscoll's contract o r h i s f i r i n g . I n f a c t , the chairman of the board, J i m Grant, admitted the manner of the attempted discharge did not conform even t o the policy of the - 10 - School Board i t s e l f , and t h a t , i n f a c t , it was not normal action to attempt t o cancel a contract in t h i s fashion. Even though the Teamsters Union protested the discharge, there was never a hearing s e t up pursuant t o the terms and conditions of the collective bargaining agreement. Moreover, the attorney for Driscoll, i n Driscoll' s presence, requested from the School D i s t r i c t notice of when the e n t i r e Board of Trustees was going to a c t on the discharge. However, no meeting o r hearing was ever set pursuant t o contract o r law. The record is c l e a r the l e t t e r attempting t o rescind ~ r i s c o l l ' s contract was not a r e s u l t of any meeting whatsoever of the School Board, rather it was a product of the Education Committee, meeting a s a committee. Thus, t h e attempted rescis- sion o r f i r i n g was void since it was i n v i o l a t i o n of section 75-5930, R.C.M. 1947, which provides i n pertinent part: "No business s h a l l be transacted by the t r u s t e e s of a d i s t r i c t unless it is transacted a t a regular meeting o r a properly called special meeting. * * *" See: Wyatt v. School D i s t r i c t No. 104, 148 Mont. 83, 417 P.2d 221. Consequently, the attempt t o rescind the contract and t o f i r e Driscoll a r e both void. I n Lowery v. Garfield County, 122 Mont. 571, 584, 208 P.2d 478, the Court said: "A 'void thing' is no thing; it has no l e g a l e f f e c t whatsoever and no r i g h t whatever can be obtained under it o r grow out of it. I n law it is the same thing a s i f the 'void thing' had never existed." Thus, i n Lowery, even a subsequent a c t of the l e g i s l a t u r e could not cure something t h a t was void. I n the probate case of S t a t e v. McCracken, 91 Mont. 157, 163, 6 P.2d 869, the Court said: "If the order of July 1, is void, a l l proceedings founded upon it a r e ineffective f o r any purpose. It was open t o c o l l a t e r a l attack, and may be s e t aside a t any time. f 1 See also: In re Takahashi's Estate, 113 Mont. 490, 129 P.2d A s i n Wyatt, here there was no regularly scheduled or special meeting held by the School Board of Trustees i n rescinding Driscoll' s contract o r discharging him. I n Wyatt, the teacher a l s o was dismissed without a meeting. The Court in t h a t case found t h a t since the School Board had f a i l e d t o follow the law i n the dismissal of Wyatt: "* * * the very dismissal was void f o r want of jurisdiction. N o proceedings on appeal could have validated the dismissal t h a t o r i g i n a l l y was void f o r want of jurisdiction." 148 Mont. 83, 91. The School D i s t r i c t c i t e s School D i s t r i c t No. 4 , Lincoln County v. Colburg, Mont . , 547 P.2d 84, 33 St. Rep. 296. W e find t h a t case not i n point since the decision of the School Board was i n question there. I n the i n s t a n t case, the School Board did not meet and did not rescind D r i s c o l l ' s contract. Further,Driscoll continued t o perform and did perform h i s duties pursuant t o contract i n the months of May and June, 1975, and was not thwarted i n any way whatsoever by the School Board i n performing i n h i s o f f i c i a l capacity and pursuant t o h i s con- t r a c t . W e find Driscoll i s e n t i t l e d t o h i s contractual salary f o r the months May and June, 1975, i n the t o t a l amount of $4,036. Wyatt v. School D i s t r i c t No. 104, supra; Lindgren v. Board of Trustees, Mont . , 558 P.2d 468, 33 St. Rep. 1226. There i s substantial credible evidence t o support the rulings of the d i s t r i c t court and its judgment is affirmed. We Concur: Chief Justice \ I\

August 17, 1977

4a80e884-b188-49ad-baa1-e69c2903fe0c

WHITTAKER v SCHREINER

N/A

13667

Montana

Montana Supreme Court

No. 13667 IN THE S U P R E I ' T E COURT OF THE STATE OF MONTANA 1977 WILLIAM HENRY WHITTAKER and LaVERNA WHITTAKER, husband and wife, Plaintiffs and Respondents, ALEXANDER SCHREINER and DAMNIE SUE SCHREINER, husband and wife, Defendants and Appellants. Appeal from: District Court of the Eighth Judicial District, Honorable Paul G. Hatfield, Judge presiding. Counsel of Record: For Appellants: A. Evon Anderson argued, Fort Benton, Montana For Respondents: Cameron Ferguson argued, Great Falls, Montana - - Submitted: September 13, 1977 Decided: 3 C i 5 q-- Filed: - v - 2 Honorab1e.Leonard.H. Lan en, ~istrict Jud e, sitting in-place of Mr. Chlef Justlce ~ a u ? G . Hatfleld, deqlvered the oplnlon of the Court. This is an appeal from a judgment entered in favor of Whittakers (plaintiffs and respondents) and against Schreiners (defendants and appellants) by the eighth judicial district court, Cascade County. The lawsuit between the parties arose out of a contract for sale of land, Whittakers claiming damages for breach of contract and for unjust enrichment of Schreiners at the expense of Whittakers. On September 28, 1964, Schreiners mortgaged two separate tracts of real property located in Cascade County with the Small Business AdministrationF~f 2,0 0 0, one tract known as the Big Sky Vista property and the other property located near Vaughn and hereinafter referred to as the Vaughn property. On September 30, 1965, Schreiners and Whittakers entered into a contract for deed whereby Schreiners agreed to convey the Vaughn property to Whittakers by warranty deed upon payment of the purchase price of $3,300 by way of monthly installment pay- ments of $50 each with interest at 3% per a n n u r n . The case was tried to the court without a jury. In its findings of fact the trial court found: that under the contract for sale Schreiners were required to apply Whittakers' monthly installment payments on the monthly mortgage payments which Schreiners were required to make to the Small Business Administra- tion; that upon paying up the contract in full, Schreiners were required to convey title to the Vaughn property free and clear of the Small Business Administration mortgage. However, by September, 1969, Schreiners had become delin- quent in their mortgage payments and in December, 1969, the Whittakers learned the United States of America had filed a mortgage foreclosure action on behalf of the Small Business Ad- ministration in the United States District Court. In said action, both whittakers and Schreiners were named parties defendant. At this time Whittakers discontinued their monthly in- stallment purchase payments, which up to this date had totaled $2,500. On May 5, 1971, the Federal District Court entered judg- ment of foreclosure and decreed deficiency judgment against Schreiners for any deficiency following execution sale of the mortgaged properties which included the Big Sky Vista property plus the Vaughn property which had been sold to Whittakers. Pursuant to the federal forclosure decree the Big Sky Vista property was sold at execution sale for $6,000, leaving a deficiency judgment against Schreiners in the amount of $5,811.14. Between September 30, 1965, which was the date of the sale of the Vaughn property to Whittakers, and December 1969, when the Small Business Administration mortgage foreclosure action was instituted, Whittakers had made substantial and costly improve- ments to the Vaughn property. In order to prevent execution sale of said Vaughn property, Whittakers purchased it from the Small Business Administration for $5,465.71 and executed a mortgage to the Small ~usiness Administration in this amount at 8% interest. On October 6, 1971, the Small Business ~dministration filed satisfaction of judgment in the Federal ~istrict Court action, thus discharging Schreiners in full so far as the Small Business Administration obligation was concerned. For the sake of argument it may be conceded that under F.R.Civ.P. 13(g), Whittakers could have filed a cross-claim against Schreiners in the federal forclosure action, but for some reason not disclosed, this was not done. Instead ~hittakers subsequently filed this action in the eighth judicial district court for Cascade County and after trial the district court entered judgment in favor of Whittakers and against Schreiners in the sum of $6,197.16, and Schreiners were ordered to convey the Vaughn property to Whittakers by quitclaim deed. It is from this judgment that Schreiners appeal. In their brief they state: "The issue is whether the rights of the WHITTAKERS to performance of the contract should have been litigated in the Federal foreclosure action, thus making this action res judicata." Rule 13 (g), F.R.Civ.P. is identical to Rule 13 (g) , M.R.Civ.P. and reads: "Cross-Claim Against Co-Party. A pleading may - state as a cross-claim any claim by one party against a co-party arising out of the transaction or occurrence that is the subject matter either of the original action or of a counterclaim therein or relating to any property that is the subject matter of the original action. Such cross-claim may include a claim that the party against whom it is asserted is or may be liable to the cross- claimant for all or part of a claim asserted in the action against the cross-claimant." (Emphasis added. ) The Schreiners would have us change the word "may" appear- ing in 13(g) to "must". In their brief they state: "While the applicable Montana Rule, MRCP, Rule 13g, regarding 'cross-claim against co-party' is couched in the 'may' term, it is apparent that the framers of that rule did not contemplate the sit- uation presented by the instant case. * * *" Later in their brief appellants argue: "To the well established rule that the doctrine of res judicata applies not only to those matters that were previously litigated but to those that 'could have been litigated' or 'might have been litigated', it now appears that we must add the phrase 'Should have been litigated'." This Court cannot adopt the argument of appellants. Insofar as Rule 13(g) is concerned we agree with the statement of 6 Wright & Miller, Federal Practice and Procedure: Cross-claims, pp. 164, 165, where it is stated: "Several important distinctions between cross-claims and counterclaims should be kept in mind other than the obvious difference in the alignment of the parties. Rule 13 (g) , unlike Rule 13 (a) , always is permissive. A party who decides not to bring his claim under Rule 13(g) will not be barred by res judicata, waiver, o r estoppel from asserting it i n a l a t e r action, a s he would i f the claim were a compulsory counterclaim under Rule 1 3 ( a ) . * * *" See St. Paul F i r e Ins. Co. v. Thompson, 152 Mont. 396, 451 P.2d 98 (1969), where we held t h a t cross-claims were not compulsory and t h a t under Rule 1 3 ( g ) , M.R.Civ.P. it is dis- cretionary with the party whether t o a s s e r t h i s claim a s a cross- claim o r t o reserve it f o r l a t e r independent l i t i g a t i o n . I n accord i s Temperance Insurance Exchange v. Carver, 365 P.2d 824, 83 Idaho 487 (1961). The judgment of t h e d i s t r i c t court is affirmed. I--" H O ~ . Leonard Langen, D i s t r i c t ~ u d ~ e , s i t t i n g i n place of M r . J u s t i c e Paul G. Hatfield.

October 19, 1977

9ad1385a-5dde-409b-a5ab-196070631568

MASCARENA v BOOTH

N/A

13279

Montana

Montana Supreme Court

No. 13279 I N THE S U P R E M E C O U R T O F THE STATE O F MONTANA 1977 T H O M A S M A S C A R E N A , a Minor Child and U R B A N 0 TORRES, guardian and l i t e m , P l a i n t i f f and Appellant, -vs- DARRELL BOOTH e t a l . , Defendants and Respondents. Appeal from: District Court of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , Honorable Robert PJilson, Judge presiding. Counsel of Record: For Appellant: C a t e , Lynaugh, F i t z g e r a l d & Huss, B i l l i n g s , Montana Thomas Lynaugh argued, B i l l i n g s , Montana For Respondents: Crowley, Kilbourne, Haughey, Hanson and Gallagher, B i l l i n g s , Montana Jack S. Ramirez argued, B i l l i n g s , Montana Submitted: March 18, 1977 Decided: hbc 2 4 , s l n F i l e d : J3\j i' " I ) ! Mr.'Justice Gene B. Daly delivered the Opinion of the Court. This i s an appeal from an order and f i n a l judgment of the d i s t r i c t court, Yellowstone County,granting defendants' motion for summary judgment and decreeing that judgment be entered in favor of defendants and against p l a i n t i f f . The sole issue on appeal is whether defendants are entitled t o summary judgment considering the underlying question of whether 339(b) (c) , Restatement, Second, Torts, presentsquestions of law or fact. P l a i n t i f f , an eleven year old child a t the time t h i s action arose, and h i s grandfather, the child's duly appointed guardian ad litem, f i l e d a complaint in the d i s t r i c t court alleging that on September 1;?, 1973, a t approximately 6:00 p.m., p l a i n t i f f slipped from a monkey bar or parallel bar apparatus located a t Orchard School, within School District No. 2, Billings, Montana. A t the time of the accident plaintiff and two friends were engaged i n an activity where they would take turns riding their stingray bicycles beneath the monkey bar, reaching up and grabbing the horizontal bar, while swinging off t h e i r bicycles, allowing the bicycles t o continue in a forward direction. O n the f i f t h or sixth occasion on which plaintiff engaged in t h i s activity on the day i n question, plaintiff grabbed the horizontal bar a s he rode beneath it on h i s bicycle, but h i s hands slipped and he f e l l t o the asphalt surface, striking the right rear side of h i s head, fracturing h i s skull. I n h i s complaint plaintiff contends defendants were negligent in maintaining a monkey bar or parallel bar apparatus anchored i n an asphalt surface and in allowing such a dangerous condition t o exist on school premises in an area where defendants knew the apparatus was freely accessible t o children. Plaintiff further contends defendants were negligent in failing t o supervise and control the use of the monkey bar or parallel bar apparatus and i n failing t o l i m i t access to the apparatus during after-school hours. ~efendants' answer generally denied p l a i n t i f f ' s allega- tions, specifically denying any negligence on the part of the Board of Trustees and asserted the affirmative defenses of contributory negligence and assumption of the risk. Subsequent t o the f i l i n g of p l a i n t i f f ' s complaint and defendants' answer, motions were f i l e d , interrogatories were submitted and answered, stipulations were f i l e d and depositions were taken. O n March 20, 1975, defendants f i l e d a motion for summary judgment asserting there were no genuine issues a s t o any material facts and defendants were entitled t o judgment a s a matter of law. Plaintiff took additional depositions and briefs were f i l e d in support of and i n opposition t o the motion for summary judgment. O n August 29, 1975, the d i s t r i c t court issued i t s order granting defendants ' motion for summary judgment and judgment was entered in favor of defendants on September 4, 1975. Rule 56, M.R.Civ.P. is controlling on the granting o r denial of a motion for summary judgment. In pertinent part Rule 56 provided : "(c) MOTION AND PROCEEDINGS THEREON. * * * The judgment sought shall be rendered forthwith i f the pleadings, depositions, answers t o interrogatories, and admissions on f i l e show that there is no genuine issue as t o any material fact and that the moving party i s entitled t o a judgment as a matter of law. * * *" The general rule of law a s stated i n 6 Pt.2 Moore's Federal Practice 756.17 [42], p. 56-946, is that: "* * * issues of negligence, including such related issues as wanton or contributory negligence, are ordinarily not susceptible of summary adjudication either for or against the claimant, but should be resolved by t r i a l in the ordinary manner." See: Mally v. Asanovich, 149 Mont. 99, 423 P.2d 294 (1967). However, where the d i s t r i c t court finds it appropriate t o grant a defendant's motion for summary judgment i n a negligence action, the moving party must clearly establish there are no genuine issues of material fact and the moving party is entitled See t o judgment as a matter of law. / ~ a r l a n d v. Anderson, 169 Mont. 447, 548 P.2d 613, 33 St. Rep. 363 (1976), for a discussion of summary judgment under Rule 56(c), M.R.Civ.P. This Court notes here that the d i s t r i c t court failed t o issue any opinion o r memorandum of decision in support of i t s ruling in the instant case. Since w e do not have the benefit of the d i s t r i c t court's rationale, w e w i l l examine defendants' briefs in support of the motion for summary judgment and from them determine those argu- ments asserted in support of the motion. Defendants contend that for plaintiff t o recover against defendants on a negligence theory plaintiff must establish a duty of care owed the plaintiff by defendants. Any duty of care i s determined by the relationship between p l a i n t i f f and the school d i s t r i c t a t the time of the accident, i.e., the status of the plaintiff while playing on the school ground a f t e r school hours, Defendants assert that from the three possibilities of status - trespasser, licensee and invitee, p l a i n t i f f stands a s a licensee, i.e,, one who enters the property by implied per- mission or by sufferance, but only for h i s own pleasure, convenience or benefit. Defendants contend that absent application of the doctrine of attractive nuisance, defendants would not be l i a b l e for p l a i n t i f f ' s injuries since, under Montana law, a landowner's duty of care to a licensee i s simply t o refrain from acts of willful or wanton negligence. Furthermore, even i f the doctrine of .attractive nuisance is applicable, p l a i n t i f f has f a i l e d t o e s t a b l i s h elements of the doctrine and a s a matter of law defendants a r e e n t i t l e d t o summary judgment. W e note defendants' i n t e r e s t i n distinguishing p l a i n t i f f ' s s t a t u s a t the time of t h e accident. I f the child could recover i f he were trespassing he would be i n no worse position i f he were a licensee o r an invitee on the premises. The e f f e c t is t h a t consideration must be given t o the c h i l d ' s a b i l i t y o r i n a b i l i t y t o understand and appreciate the purported danger and t o the c h i l d ' s propensity f o r meddling. See: Ranard v. OINeil, 166 Mont. 177, 531 P.2d 1000; 62 Am.Jur.2d Premises L i a b i l i t y , 5 143. The American. Law I n s t i t u t e drafted 5 339, Restatement, Second, Torts, t h a t section departed from the theory of allurement t o trespass and treated the rule a s one of ordinary negligence l i a b i l i t y . Restatement, Second, Torts 5339, provides: "339. A r t i f i c a l Conditions Highly Dangerous To Trespassing Children. "A possessor of land i s subject t o l i a b i l i t y f o r physical harm t o children trespassing thereon caused by an a r t i f i c i a l condition upon the land i f "(a) the place where the condition e x i s t s i s one upon which the possessor knows o r has reason t o know t h a t children a r e l i k e l y t o trespass, and "(b) the condition i s one which the possessor knows o r has reason t o know and whdch he realizes o r should r e a l i z e w i l l involve an un- reasonable r i s k of death o r serious bodily harm t o such children, and "(c) the children because of their youth do not discover the condition or realize the r i s k involved i n intermeddling with it or in coming within the area made dangerous by it, and "(d) the u t i l i t y to the possessor of maintaining the condition and the burden of eliminating the danger are slight as compared with the r i s k t o children involved , and '' (e) the possessor f a i l s t o exercise reasonable care to eliminate the danger or otherwise to protect the children ." Restatement, Second, Torts, 5339 was adopted by Montana as part of the attractive nuisance rule previously i n effect. Gagnier v. Curran Const. Co., 151 Mont. 468,'443 P.2d 894; Nichols v. Consolidated Dairies of Lake County, Inc., 125 g Mont. 460, P. 2d \ Defendants contend "substantial questions exist a s t o several of the elements of the doctrine of attractive nuisance." Defendants i n s i s t "elements (b) and (c) [of $3391 do not exist as a matter of law and consequently the defendants were entitled t o summary judgment1,' since recovery is premised on p l a i n t i f f establishing each of the elements. Subparagraph (b) of 9339 requires the condition to be one which involves an unreasonable r i s k of death or serious bodily harm. While defendants admit there is some r i s k of bodily harm attributed t o activity involving the monkey bar apparatus, they conclude it is not an unreasonable r i s k of death or serious bodily harm. Defendants further argue subparagraph (c) of 5339 requires that the child not discover the condition o r realize the r i s k involved. I n the instant case, defendants contend p l a i n t i f f w a s of such an age or mentality that he should, or could reason- ably be expected to, understand, appreciate and avoid the danger or hazard of the condition t o which he was exposed o r that plaintiff did i n fact understand and appreciate the condition, but nevertheless exposed himself t o it. Defendants summarize t h e i r argument by l i s t i n g three c r i t e r i a which purportedly e n t i t l e defendants t o judgment as a matter of law: 1. The monkey bar apparatus, as it existed on the day of the accident, did not, as a matter of law, involve an unreasonable r i s k of death or serious bodily harm t o an eleven year old boy. 2. A s a matter of law, an eleven year old boy of the intelligence of p l a i n t i f f should have perceived the danger of falling and hurting himself. 3. Plaintiff did perceive the danger of falling and hurting himself. W e note defendants' conclusions of law are based upon determinations of f a c t involving the character of the instru- mentality which caused the injury and p l a i n t i f f ' s a b i l i t y t o observe, understand, appreciate and avoid the danger of the instrumentality. These are the very questions of fact which 5339 considers. Our inquiry a t t h i s juncture i s whether the p l a i n t i f f ' s a b i l i t y or failure to establish the elements of 5339 i s a question of fact or a question of law. Our research mrraled the majority of jurisdictions which have considered t h i s question concluded that whether the conditions of Restatement, Second, Torts 5339 were met is a question of fact for the jury t o determine. MacNeil v. Perkins, 84 Ariz. 74, 324 P.2d 211; Greene v. DiFazio, 148 Conn. 419, 1 7 1 A. 2d 411; Ridgewood Groves, Inc. v. Dowel1 (Fla.App.) , 189 So.2d 188; Harris v. Mentes-Williams Co., 1 1 N.J. 559, 95 A.2d 388; Clifton v. Patroon Operating Corp., 271 App.Div. 122, 63 N.Y.S.2d 597; Stanolind O i l & Gas Co. v. Jamison, 204 Okla. 93, 227 P.2d 404, 23 ALR2d 1141; Nechodomu v. Lindstrom, 273 Wis.313, 77 N.W.2d 707, 62 ALR2d 884, rehoden. 273 W i s . 327a, 78 N.W.2d 417, 62 ALR2d 896. Furthermore, we find additional questions of material fact which remain unresolved and act to defeat defendants' motion for summary judgment. An example of such a fact question is whether the school custodian's observation of the children's afterschool activities on the monkey bar apparatus put defendants on notice children were engaging in activities involving a risk of serious bodily harm. This issue concerns subparagraphs ( a ) and ( b ) of 5 339 which seek a determination of the land possessor's knowledge of the presence of the trespassing children and realization the dangerous condition exists. Another factual question to be resolved is whether the burden of defendants eliminating the dangerous condition by procuring protective ground coverings, which are manufactured for use beneath playground equipment, was slight as compared to the risk of children being injured by defendants maintaining the monkey bar apparatus in its present condition. This issue concerns subparagraph ( d ) of 5339 which balances the utility of the possessor maintaining the condition and the burden of eliminating the danger, as compared to the risk of harm. We find genuine issues of material fact exist. Such a holding defeats defendants' conclusion that no genuine issues of material fact remain to be determined and defendants are entitled to judgment as a matter of law. Defendants rely heavily on Callahan v. Buttrey, 1 8 6 F.Supp, 715 (D.C.Mont. 1960), affirmed 300 F.2d 899 (9th Cir. 1962), for the proposition that whether the conditions of Restatement, Second, Torts 5339 have been met is a question of law. We dis- tinguish Callahan from the present case. In Callahan a seven year old boy was attempting to recover against landlords for injuries sustained when the boy f e l l from a second story roof deck to asphalt paving below, The deck was protected by a guardrail which p l a i n t i f f alleged was negligently constructed. A t the close of the evidence defendants moved for a directed verdict and were denied. The court submitted the case t o the jury and when the jury failed t o return a verdict, the jury was discharged. Defendants then moved the court for judgment in accordance with t h e i r motion for directed verdict previously made and denied. The motion was granted and judgment was entered for defendants. After a careful review of Judge Jameson's opinion i n Callahan, it is clear the presiding judge's concern a t the time the jury failed t o return a verdict was t o review the sufficiency of the evidence i n determining whether the motion for directed verdict had merit. I n weighing the sufficiency of the evidence the court was s i t t i n g the t r i e r of fact a s well as the t r i e r of law. The concluding paragraph of the opinion supports the position that, had the jury been able t o arrive a t a verdict or had the t r i a l judge seen f i t t o grant a new t r i a l , questions of fact would have properly been determined by the jury and not by the judge: "I a m unable t o find that Joe's injury was proximately caused by the breach of any duty owed t o him by the defendants. The motion for directed verdict accordingly must be granted. Prior t o submission t o the jury, it seemed advisable t o defer a ruling on the legal questions herein discussed. N o w that the jury has failed t o agree, no useful purpose would be served by a r e t r i a l prior to f i n a l determination of the questions considered Yn t h i s opinion. I f m y conclusions are erroneous and the appellate court should order a new t r i a l , a l l issues may then be submitted to the jury i n accordance with the views of the appellate court ." 186 F.Supp. 715, 723. Our evaluation of the significance of the United States District Court opinion i s further supported by the United States Court of Appeals' comment on the d i s t r i c t court opinion: I 1 I n essence, the opinion held t h a t under Montana law there was no evidence t h a t the defendants breached a duty owing t o Joe. The t r i a l judge thought the f a c t s did not lay the b a s i s f o r l i a b i l i t y e i t h e r outside o r within the a t t r a c t i v e nuisance doctrine." 300 F.2d 899, 900. Thus, we distinguish t h i s federal case where the t r i a l court ruled on the sufficiency of the evidence i n deciding t h e merit of a motion f o r directed verdict and the i n s t a n t case where the d i s t r i c t court granted a motion f o r summary judgment when genuine issues of material f a c t remained t o be decided and the moving party was not e n t i t l e d t o a judgment a s a matter of law. Therefore, the order and judgment of the d i s t r i c t court is reversed and the cause i s remanded f o r t r i a l on the merits, consis t e n t with t h i s opinion. We Concur: I / # , #,Z.--> / , y..+...=/ , , - ' ,&:iC4[,-4d Chief Justice t , / 1 Mr. Justice John Conway Harrison dissenting: I dissent.

August 29, 1977

dbd82fdd-05cc-4f62-aa4c-32f1c2720434

RONCHETTO v RONCHETTO

N/A

13637

Montana

Montana Supreme Court

No. 13637 I N T H E SUPREME COURT O F THE STATE O F M O N T A N A 1977 R O N A L D M. RONCHETTO, P l a i n t i f f and Respondent, -vs- S U S A N KAY R O N C H E T T O e t a1 . , Defendant and Appellant. Appeal from: D i s t r i c t Court of t h e Second J u d i c i a l D i s t r i c t , Honorable Arnold Olsen, Judge presiding. Counsel of Record: For Appellant: J a r d i n e & McCarthy, Whitehall, Montana Jack McCarthy argued, Whitehall, Montana For Respondent : Corette, Smith and Dean, Butte, Montana Dolphy 0. Pohlman, Jr. argued, Butte, Montana Submitted: June 2 , 1977 Filed: 4U6 -5 -- im -P * Clerk Mr. Chief Justice Paul G. Hatfield delivered the Opinion of the Court. Defendant appeals from an order of the district court, Silver Bow County, modifying her divorce decree with plaintiff and awarding permanent legal custody of their daughter to plaintiff. Defendant, Susan Ronchetto, a/k/a Susan Tavares, and plaintiff, Ronald Ronchetto, were divorced on May 5, 1970 in the state of Nevada. The Nevada court placed Julie Ronchetto, the couple's minor child, in the custody of her mother and gave her father reasonable rights of visitation. Shortly after her divorce from plaintiff, defendant married David Tavares. De- fendant subsequently divorced David Tavares and later married and divorced another man. On October 18, 1974, plaintiff filed an action against defendant in district court, Jefferson County, the county in which defendant at that time resided. Plaintiff, in his com- plaint, alleged that defendant had refused to allow him to visit with their daughter, Julie, and requested the court to modify the divorce decree to protect plaintiff's visitation rights. Plaintiff and defendant settled the visitation dispute out of court and, on December 30, 1974, stipulated that the court action be dismissed with prejudice. On July 12, 1976, plaintiff filed a petition in the dis- trict court, Silver Bow County, asking for a temporary restrain- ing order and a temporary custody order. Plaintiff requested the court to order defendant to relinquish temporary custody of the minor child, Julie Ronchetto, and to restrain defendant from molesting the child. Plaintiff requested that the court order that temporary custody of the child, pending a full hearing, be placed in plaintiff and his wife. The court issued the temporary custody and temporary restraining orders in reliance upon state- ments in plaintiff's affidavit that defendant had on occasion abandoned and abused the child. At the time plaintiff filed this action, plaintiff, defendant and the child were residents of Silver Bow County. The district court held a nonjury hearing on July 19, 1977, to determine if the divorce decree should be modified so as to transfer permanent custody of the parties' minor child, Julie Ronchetto, from defendant to plaintiff and his wife. Several witnesses were called for both plaintiff and defendant. After the hearing, the judge ordered the Department of Social and Rehabilitation Services (SRS) to conduct an investigation into the welfare of Julie Ronchetto. On the basis of both the testimony at the hearing and the statements in the SRS investi- gative report, the court ordered that the divorce decree be modified to give permanent legal custody of Julie Ronchetto to plaintiff and his wife. Defendant raises two issues in her appeal from the district court's order: 1. Was proper jurisdiction and venue to hear this case vested in the district court, Silver Bow County? 2. Did the district court err in granting plaintiff the permanent custody of the parties' minor child, based on the testimony at the hearing and the statements in the SRS investi- gative report? Defendant first asserts that the district court, Silver Bow County, was without jurisdiction to order that Julie Ronchetto's permanent legal custody be taken from defendant and given to plaintiff. Defendant maintains that because plaintiff's petition to modify the divorce decree was dismissed with prejudice on December 30, 1974, the court was precluded, under section 48- 339, R . C . M . 1947, from modifying the custody decree until at least two years after the dismissal with prejudice. Because plaintiff instituted this custody proceeding on July 12, 1976, less than two years after the previous court action, defen- dant claims the court had no jurisdiction to change custody. Section 48-339(1), R.C.M. 1947, provides: "No motion to modify a custody decree may be made earlier than two (2) years after its date, unless the court permits it to be made on the basis of affidavits that there is reason to believe the child's present environment may endanger seriously his physical, mental, moral, or emotional health." Section 48-339(1) therefore prohibits modification of a custody decree which has been issued or modified within the two previous years. The prior district court action cited by defen- dant dealt only with clarification of plaintiff's visitation rights and not with child custody. The last child custody order for Julie Ronchetto, prior to this action, was contained in the divorce decree of May 5, 1970. The petition to modify child custody that is the subject of appeal in this case was filed by plaintiff on July 12, 1976, more than six years after the prior custody order. Section 48-339(1), therefore, did not prevent the district court from modifying the child custody provision of the parties' divorce decree. The district court, Silver Bow County, had jurisdiction under section 48-331 (1) (a) (i) , R.C.M. 1947, to modify Julie Ronchetto's custody, because Montana was the home state of the child at the time the action was commenced. Venue of the case was properly in Silver Bow County. Section 93-2904, R.C.M. 1947, provides that actions such as the one involved in this case "shall be tried in the county in which the defendants * * * may reside at the commencement of the action * * *." Defendant, at the time plaintiff filed his pe- tition, was a resident of Silver Bow County. While defendant's claim that the district court did not exercise proper jurisdiction or venue is without merit, we must sustain defendant's assertion that custody of Julie Ronchetto was improperly taken from defendant on the basis of the evi- dence presented. After the July 12, 1976 custody hearing, the district judge ordered SRS to investigate the welfare of Julie Ronchetto and to prepare the court a report of the investigation, The district judge did not issue his custody order until "after reviewing the investigative report". The out of court state- ments of the SRS workers, which were contained in their investi- gative report constitute hearsay evidence. This Court recently held that consideration of investigation reports in a child custody case, without requiring the authors to testify at a hear- ing, constitutes reversible error. In re Declaring Swan Children Youths in Need of Care, Mont . P.2d - 1 - , 34 St.Rep. 390 (1977). To satisfy the due process rights of the custodial parent and to accurately assess the best interests of the minor child, the trial judge must require " * * * the authors of the report to testify at a hearing and be subject to cross-examina- tion" before he may consider the statements in the report. In re Moyer Children, Mont . P. 2d - 1 - , 34 St.Rep. 682 (1977). This case is, therefore, remanded to the trial court for the purpose of conducting another permanent custody hearing. To modify the custody award, the judge must find that, since the 1970 divorce decree, a change has occurred in the circumstances of the child or defendant and that modification is necessary to serve the child's best interests. Section 48-339, R.C.M. 1947. The trial court must determine the fitness of both parents, plaintiff and defendant, and not just the fitness of defendant. Love v . Love, 166 Mont. 303, 533 P.2d 280. The court must con- sider the wishes of the child as to her custodian. Section 48- 332(2), R.C.M. 1947. The court may interview the child in chambers to ascertain her wishes, because the child's wishes as to who should be her custodian may be highly probative of her best interests and may have a substantial effect on her emotional development with her custodial parent. See Hurly v. Hurly, 147 Mont. 118, 411 P.2d 359. If it grants such an in- terview, the court must "cause a record of the interview to be made and to be part of the record of the case." Section 48- 334 (1) , R.C.M. 1947. The court must determine the best interests of the child in accordance with the facts as they exist at the time of the new hearing. If defendant can now provide a more stable home environment than she could have provided at the time of the initial custody modification hearing, the trial court must consider this factor on rehearing. Finally, if the trial judge considers an investigative report in his custody decision, the court must mail the report to defendant's counsel at least ten days prior to the hearing, and afford defendant the privilege of cross-examining the authors of the report at the hearing. Section 48-335(3), R . C . M . 1947. The judgment of the district court is reversed and re- manded for rehearing in accordance with this opinion. ,7 / Chief Justice 1)

August 5, 1977

c71918ed-ea95-47df-add2-50167f6ca0aa

SEIFERT v SEIFERT

N/A

13607

Montana

Montana Supreme Court

No. 13607 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 EDWIN A. SEIFERT, JR., Plaintiff and Appellant, EDWIN A. SEIFERT and CHRISTINE SEIFERT and EDWIN A. SEIFERT RANCH, a Montana Corporation, Defendants and Respondents. Appeal from: District Court of the Eighteenth Judicial District, Honorable Jack D. Shanstrom, Judge presiding. Counsel of Record: For Appellant: William Gilbert argued, Bozeman, Montana For Respondents: Bennett and Bennett, Bozeman, Montana Lyman Bennett, Jr argued, Bozeman, Montana Submitted: May 24, 1977 Mr. Chief Justice Paul G . Hatfield delivered the Opinion of the Court. This is an appeal from a judgment entered in the district court, Gallatin County, denying plaintiff's motion for summary judgment, but granting defendants' motion for summary judgment. This case comes to this Court from the district court where the parties stipulated no disputed facts existed and the district court might consider the parties' motions for summary judgment upon the filed briefs. The district court granted defendants' motion for sum- mary judgment. No reasons for its conclusion were given by the district court. On March 1, 1965, the parties here entered into a written lease and option agreement. From this lease option agreement, plaintiff, Edwin A. Seifert, Jr., was granted the option to pur- chase the real property owned by defendants Edwin A. Seifert and Christine R . Seifert for the sum of $150,000. The lease period was 5 years beginning March 1, 1965. The terms of the lease in- cluded 2000 acres of the Edwin A . Seifert Ranch, together with all equipment, farm machinery and buildings, except defendants' residence. Plaintiff was given the privilege to renew the lease for an additional 5 years, upon the same terms, at any time during the original term. Under the lease portion of the agreement, defendants were to receive 1/2 of all crops harvested and pay 1/2 of all expenses for fuel, seed, repairs and other incidental farm ex- penses. For the consideration of $1.00, plaintiff was given the exclusive option to purchase the Edwin A. Seifert Ranch at any time during the term of the lease, or any renewal thereof, for the sum of $150,000. On February 28, 1970, plaintiff sent a written notice to renew the lease and option for an additional 5 years. $1.00 consideration was submitted with the notice. Defendants requested their attorney return the $1.00 consideration and refused to sign acknowledging receipt of the notice. Plaintiff and defendants continued operating the ranch as before, but defendant, Edwin, Sr., stated in his deposition: "Q. Up to that time, Ed, had you and Eddy been working back and forth farming, you helping him with his farming and he helping you with yours? A. Right. "Q. Has there ever been any real change in that? A. Well, not until starting of 1971, where it got to be more of a load for me and he has done less. "Q. Has Ed Jr. ever made any arrangements to give you any compensation for your labor? A. Never mentioned it. "Q. Was it ever discussed? A. No. "Q. Was the fact of repair ever discussed? A. No. "Q. Did it seem to you like you had a tenant? Or, it was the same old ranch? A. Well, I began to think I was the boss and the hired man both." On January 17, 1975, plaintiff sent a letter to de- fendants with his personal check of $150,000 in payment of the purchase price under the option agreement. In that letter, plaintiff gave notice he was exercising his option to purchase the land as outlined in the lease option agreement dated March 1, 1965. On January 21, 1975, defendants through their attorney, refused to accept the personal check of plaintiff. A second tender of a bank money order was submitted, but this also was rejected by defendants. After various attempts to settle their dispute failed, plaintiff filed suit for specific performance. Following joint motions for summary judgment the district court ruled in favor of defendants. Plaintiff appeals from that order. The issues on appeal are: 1 . Did the district court err by not granting plaintiff's motion for summary judgment? 2 . Did the district court err by granting defendants' motion for summary judgment? Plaintiff brought this suit to compel specific perform- ance of the contract dated March 1, 1965. Specific performance is an equitable remedy which compels the performance of a con- tract in the precise terms agreed on. The foundation of a suit for specific performance of a contract is that, by compelling the parties to do the very things they agreed to do, more com- plete and perfect justice is attained than by giving damages for breach of a contract. Specific performance is purely an equitable remedy; presenting a purely equitable controversy and is governed by equitable principles. 81 C.J.S. Specific Per- formance S1, p. 408. See also: State ex rel. Victor's Inc. v. District Court, Mont . , 545 P.2d 1098, 33 St.Rep. 23, 27. In 81 C.J.S. Specific Performance S3, p . 411, it is stated: " * * * specific performance will be ordered only on equitable grounds in view of all the conditions surrounding the particular case. * * * "A bill in equity for specific performance is an appeal to the conscience of the court, and gener- ally, in such a proceeding, the inquiry must be whether, in equity and good conscience, the court should specifically enforce the contract. Accordingly, specific performance will be granted when it is apparent from a view of all the circumstances of the particular case that it will serve the ends of justice, and it will be withheld when, from a like view, it appears that it will produce hardships or injustice to either party * * *." (Emphasis added.) Section 17-809, R.C.M. 1947, states that specific per- formance cannot be enforced in favor of a party to a contract if that party "has not fully and fairly performed all conditions precedent on his part to the obligation * * *." In Si*well v. New Mine Sapphire Syndicate, 130 Mont. 189, 197, 297 P.2d 299, this Court stated: "Section 17-803, supra, was construed in McDonald v. Stewart, 127 Mont. 188, 199, 259 P.2d 799, 805, where the court in affirming a judgment for defendant said: 'Before McDonald is entitled to specific performance by Stewart, he must show that he has performed his part of the agreement. This he has failed to do. R.C.M. 1947, section 17-803, provides: "Neither party to any obligation can be compelled specifically to perform it, unless the other party thereto has performed * * *". "'Unless performance is waived or excused, a plaintiff seeking to enforce a contract must perform his obligations thereunder, and plain- tiff's wilful violation of an essential covenant of a contract is a defense to specific enforcement of the contract. 81 C.J.S., Specific Performance, section 94, page 614.'" Therefore, this Court is required to examine the facts and cir- cumstances of this case to determine whether plaintiff fully and fairly performed his obligations under the contract. The facts show plaintiff farmed approximately 500 acres as his own, and defendants farmed approximately 2000 acres during the time the contract was in existence. Defendants and plaintiff exchanged work and machinery between the two properties, but no showing was made that plaintiff took possession or control of the ranch in any manner different from the operation before the contract. According to the contract, defendants were to receive 1/2 of the crop as rent and pay 1/2 of all expenses for fuel, seed, repairs and other incidental farm expenses. In reality, Seifert Sr.'s statements show this was not the case. "Q. You took a little more because of the extra work. A . Of course a11 the way through and all the time he has had that farm or supposed to have been renting and when his lease was up -- we t when I say we, the wife and I, have paid for all fuel, paid for all the oil, paid for all the grease, we have paid for all repairs, and all the farm machinery, plus all repairs on the combines, plus I am safe in saying 95 percent of the hired help we have paid for. When I say 'we', I say the wife and I. So when you figure that all out, that runs into quite a little sum of money. "Q. That is the reason you have taken more of the crop, then? A. Right. "Q. Did the two of you provide various parts of the work that went in to operate your ground in 1972? A. He didn't help much after I got that big tractor at my place. I done my own work on my own place, and then he was there to get the tractor to go down and do his. "Q. So, therefore, since you were doing most of the work on your place, you took most of the crop? A. Right. "Q. He only took a smaller portion of the crop, and he didn't get any 50 percent; is that correct? A. Right." Seifert Sr.'s statements also show plaintiff did not take over the ranch repair work: "A. Well, there was times when we were caught up, there was a lot of fence fixing, things he could do. But he didn't. He hasn't set a fence post even on his own place since he bought it. What fence fixing has been done, I have had done or done myself and paid for it. "Q. I see. And then you have taken a little more of the crop because of that? A. Yeah." Under the circumstances, plaintiff failed to show he fully and fairly performed the lease according to its terms. For plaintiff to secure the desired relief (specific performance) he is required to come into court with clean hands, and with a cause whose ethical qualities were such as to commend it to the conscience of the court. Schlegel v. Moorhead, Mont . I w P . 2 d 1009, 33 St.Rep. 836, 840; section 49-109, R.C.M. 1947. This action seeks an equitable remedy. In view of the fact plaintiff did not perform his obligations under the con- tract, this Court cannot in good conscience grant specific performance to plaintiff. We agree with the district court in not granting plaintiff's motion for summary judgment. Plaintiff's second issue challenges the granting of of defendants' motion for summary judgment. The facts show plaintiff continued the work-trade arrangement from 1970 through 1974 with the knowledge of de- fendants' contention as to the lease. Defendant, Seifert Sr., stated: "Q. Ed, after you sent back the document that was sent to you in 1970, I mean after you had me do it for you by certified mail--and that is a document that is here as a copy--what did Eddy say; anything? And you are looking at Exhibit 2. Did he protest to you when you sent that back? A. Nope. "Q. Did he continue to work with you the same as before? A. Right. "Q. Right up to about 1974? A. Yeah. But as I say, he started slacking off the last few years and he has been doing less. "Q. Well, I understand. But, I mean, did he start asserting any rights until last fall? A. No." Plaintiff admitted this in his deposition of December 11, 1975: "Q. You talked to your folks. And did they repeatedly advise you that they thought you didn't have a lease? A. Yes. "Q. And from the spring of 1970, did they so advise you everytime it came up? A. Sometime after that we mentioned it. "Q. Everytime it came up for discussion, they didn't change their position, did they? A. Well, I suppose they didn't. "Q. And it was known to you that that was their position throughout the period; wasn't it? I mean, from 1970 on? A. Yes; yes." Thus, from 1970 to 1974, plaintiff did nothing to enforce his claim, knowing defendants contended that he had no lease. Plaintiff brought this suit in equity. Since plaintiff raised this question in equity, the equitable defense of laches and unreasonable delay is applicable. In Adair v . Capital Invest Co., 165 Mont. 26, 29, 525 P.2d 548, this Court reviewed the equitable doctrine of laches, quoting from Riley v. Blacker, 51 Mont. 364, 152 P. 758, 759: "'Laches, considered as a bar independent of the statute of limitations, is a concept of equity; it means negligence in the assertion of a right; it is the practical application of the maxim, "Equity aids only the vigilant"; and it exists when there has been unexplained delay of such duration or character as to render the enforce- ment of the asserted right inequitable. There- fore has it often been held by this court that: While a mere delay short of the period of the statute of limitations does not of itself raise the presumption of laches [citing cases], yet "good faith and reasonable diligence only can call into activity the powers of a court of equity, and, independently of the period fixed by the statute of limitations, stale demands will not be entertained or relief granted to one who has slept upon his rights. Considerations of public policy and the difficulty of doing justice be- tween the parties are sufficient to warrant a court of equity in refusing to institute an investigation where the lapse of time in the assertion of the claim is such as to show in- excusable neglect on the part of the plaintiff, no matter how apparently just his claim may be; and this is particularly so where the relations of the parties have been materially altered in the meantime." * * * ' " 165 Mont. 29, 30. In the instant case, plaintiff waived his claim by doing nothing to enforce his rights once defendants' contention of no lease came to his knowledge. Further, plaintiff allowed defen- dants to change their circumstances. Defendant, Seifert Sr., bought larger and more expensive equipment to farm all of the land, he testified: "A. Right. It was getting to be more work. And in 1971, I bought that big four-wheel tractor, the first one, because with his tractor and the one I had and him buying the rest of that ranch was too much. "Q. That was in 1971 that you bought the big out- fit? A . Yes, sir. "Q. Was the reason you bought that, was that so you could get all the land taken care of? A . Right." Also, in 1974 the ranch belonging to Seifert, Sr. and his wife, was incorporated. This incorporation took place with the knowledge of plaintiff and was aided by suggestions of plaintiff. As a result of plaintiff's negligence in asserting his rights, and the change in defendants' circumstances, the ends of justice are served by granting defendants' motion for summary judgment. The order of the district court is affirmed. 1 / ' Chief Justice R

August 17, 1977

17419b5a-7dd4-4577-bb34-8acf886a6540

LEE v GEBHARDT

N/A

13617

Montana

Montana Supreme Court

No. 13617 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 BONNIE GEBHARDT LEE, Plaintiff and Respondent, -vs- GARY B. GEBHARDT, Defendant and Appellant. Appeal from: District Court of the Eighteenth Judicial District, Honorable W . W. Lessley, Judge presiding. Counsel of Record: For Appellant: William E. Gilbert argued, Bozeman, Montana For Respondent: Berg, Angel, Andriolo & Morgan, Bozeman, Montana Gregory 0 . Morgan argued, Bozeman, Montana Filed: -- " .r Submitted: April 19, 1977 Decided: ,. I I , , :* i % ---" \ I t , ! Mr. Justice Gene B. Daly delivered the Opinion of the Court. his is an appeal from an order of the district court, Gallatin County, awarding custody of minor children to Bonnie Gebhardt Lee and restricting the visitation rights of Gary Gebhardt. Gary and Bonnie Gebhardt were married July 2, 1965. Two children were the issue of this marriage: Shawn, age 8 and Shannon, age 10, at the time of the October 22, 1976, modification. Bonnie filed an action for divorce on September 8, 1972. The decree was entered January 8, 1973, providing that custody of the children be awarded to her, subject to "reasonable rights of visitation" by their father, Gary. On August 1, 1973, Bonnie petitioned the court for an order to modify the divorce decree to increase child support to $400 a month, from $50 per child or $100 per month, as provided in the divorce decree. Hearing was set for September 17, 1973. On Septem- ber 13, 1973, the father responded to the petition for modification and filed a petition to modify the decree to take custody in himself. Pursuant to the petition for modification filed for the mother, an agreement and stipulation was entered into between the parties on November 20, 1973, increasing support as requested by Bonnie, and specifying visitation to Gary, the father, to include every weekend, alternate holidays, and a period of temporary custody of two months during the summer months. On May 16, 1974, Gary filed a petition for modification of the divorce decree, seeking full and complete custody of the minor children. This petition was not pursued due to the mother's remarriage. On August 20, 1976, Gary filed a petition for modification of the decree for full and complete custody. A hearing was held and subsequently on October 15, 1976, the district court entered findings of fact and conclusions of law that there was no material change of circumstances, sufficient to warrant modification of the decree. Further, it was in the best interest of the children that the decree be modified to limit the father's visitation rights to one weekend per month and one month in the summer. Gary, the father, appeals the order of the court and pre- sents two issues for this Court's review: (1) Whether the trial judge abused his discretion in fail- ing to modify the decree of divorce to award custody of the minor children to the father? (2) Whether the trial judge abused his discretion in modify- ing the decree to limit the father's visitation to one weekend per month and one month during the summer? The applicable law in Montana governing modification of a divorce decree is section 48-339, R.C.M. 1947. The father claimed custody should be given to him under section 48-339 (2) (b) (c) , which states: "(2) The court shall not modify a prior custody decree unless it finds upon the basis of facts that have arisen since the prior decree or that were unknown to the court at the time of entry of the prior decree, that a change has occurred in the circumstances of the child or his custodian and that modification is necessary to serve the best interest of the child. In applying these standards the court shall retain the custodian appointed pursuant to the prior decree unless: "(b) the child has been integrated into the family of the petitioner with consent of the custodian; or "(c) the child's present environment en- dangers seriously his physical, mental, moral, or emotional health, and the harm likely to be caused by a change of environ- ment is outweighed by its advantages to him. The father contends the children have been integrated into his family with the consent of the mother. This contention is unsup- ported by the facts. The district court found as a result of the visitation schedule, the children were required to be split between two environments with separate homes, separate clothes and separate fathers for each home. The mother has been required to perform all the duties of seeing to the children's education, feeding, and care during the weekdays when the entire family is occupied with the daily task of making a living. As a result of the visitation sched- ule the mother is deprived of the opportunity of enjoying the week- end periods with her children, when the pace is relaxed. The record shows the mother consented to the schedule to provide her children with their needs, including visitation with their father. Therefore it appears there has been no integration into the family of petitioner- father and certainly not with the consent of their custodian-mother. The father further alleges that section 48-339(2) (c), applies in this case, but he does not allege the mother's home is an unwhole- some environment for the children, but rather that the mother shows little, if any, interest in the children. It is admitted the two children are left alone after school for a period of two hours during the day, however, there is no evidence this adversely affects their welfare or severely endangers their physical, mental, moral, or emotional health. The record indicates and the trial judge in his findings of fact found, that the mother and her present husband both express a desire and need for an expanded opportunity to spend time with the children. We find no evidence from which the court could determine, as required by section 48-339(2), that a change has occurred in the circumstances of the children or their custodian requiring modifica- tion. This Court is committed to the view that the welfare of the child is the paramount consideration in awarding custody and it must, of necessity, be left largely to the discretion of the trial judge. He hears the testimony, sees the witnesses1 demeanor and has an advantage in determining these difficult problems and we will not disturb the custody decision unless a clear abuse of discretion by the trial court is demonstrated. Brooks v. Brooks, Mon t . , 556 P.2d 901, 33 St.Rep. 1114. It is argued the district court abused its discretion in modifying the divorce decree to limit the father's visitation to one weekend per month and one month during the summer. Section 48-337(2), R.C.M. 1947, states: "The court may modify an order granting or denying visitation rights whenever modification would serve the best interest of the child; but the court shall not restrict a parent's visitation rights unless it finds that the visitation would endanger seriously the child's physical, mental, moral, or emotional health." The district court in its findings of fact determined the weekly visitation by the children to their father's home has prevented the mother and her husband a full opportunity to see to the mental, emotional and religiousgrowth of the children during a period when they are not occupied with school activities. From its findings the court concluded the best interest of the children will be served by a single custodian whose duty it is to consistently oversee and participate in the development of the children. Therefore the court found it necessary to modify the November 20, 1973 order. Section 48-339(3), R.C.M. 1947, provides that attorney fees and costs shall be assessed against a party seeking modification if the court finds the modification action is vexatious and con- stitutes harassment. Here, the father's modification petition lacked sufficient merit to prevail, but could hardly be considered vexatious or harassing. The request for attorney fees is denied. Judgment of the district court is adirmed. Justice We Concur: Chief Justice

August 8, 1977

9fe20a2e-a394-4fab-bdfb-f6c6e2ee021c

STATE v COOL

N/A

13655

Montana

Montana Supreme Court

No. 13655 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 THE STATE OF B I O F J T A N A , Plaintiff and Appellant, -vs- ELONE ELAINE COOL, Defendant and Respondent. Appeal from: District Court of the First Judicial District, Honorable Gordon R. Bennett, Judge presiding. Counsel of Record: For Appellant: Mike Greely, Attorney General, Helena, Fontana Charles A. Graveley argued, County Attorney, Helena, Montana Michael McCabe argued, Deputy County Attorney, Helena, Montana For Respondent: David N. Hull argued, Helena, Montana Submitted: May 31, 1977 Decided : QCG ; ; , 1- ; ; z L -aa 9 Cle Mr. Justice Gene B. Daly delivered the Opinion of the Court. A criminal complaint was filed May 17, 1976, in the district court, Lewis and Clark County, charging defendant Elone Elaine Cool with the crime of theft, a felony, in violation of section 94-6- 302 (1) (a), R.C.M. 1947. Trial commenced November 8, 1976 and at the close of the state's case-in-chief, the defense moved for acquittal alleging the state failed to prove a prima facie case against defendant. That motion was denied. The defense went forward with its case and at the close of all evidence made a motion for a directed verdict of acquittal for the reason the evidence as presented by the state was insufficient as a matter of law to allow it to go to the jury. The judge granted that motion and dismissed the case. The state filed a notice of appeal on November 10, 1976. On April 20, 1977, defendant's counsel filed a motion to dismiss the appeal on the grounds it violated the double jeopardy clause, Fifth Amendment, United States Constitution, and on May 18, 1977, counsel filed an amended motion to dismiss the appeal adding the ground that this Court lacked jurisdiction to hear the state's appeal. The controlling question here is whether this Court has jurisdiction to hear the state's appeal of a district court's judgment of acquittal. Section 95-2403, R.C.M. 1947, controls the appeals the state may take in a criminal proceeding, it provides: "Scope of appeal. (a) Except as authorized by this code, the state may not appeal in a criminal case. " (b) The state may appeal from any court order or judgment the substantive effect of which results in: " (1) dismissing a case; "(2) modifying or changing the verdict as provided in section 95-2101 (c) (3) ; " (3) granting a new trial; "(4) quashing an arrest or search warrant; " (5) suppressing evidence ; "(6) suppressing a confession or admission; or "(7) granting or denying change of venue." Here the state contends the state of Montana has a statutory right to appeal under section 95-2403(b)(l). It argues the district court's ruling was in fact a dismissal. Defendant argues this was a motion for acquittal and such a motion does not constitute a dis- missal of the case as contemplated in section 95-2403(b) (1). We find no merit in the state's argument in relation to section 95-2403 (b) (1) , because subsection (b) (1) simply does not apply to the instant fact situation, no matter how the state tortures the language used by the district court. The court very clearly and with precision informed the state in reference to the evidence: "I am just saying that it's insufficient." There can be no question from the record before this Court that the district court's dismissal was an acquittal in substance as well as form. The United States Supreme Court in United States v. Ball, 163 U.S. 662, 16 S.Ct. 1192, 41 L ed 300 and Fong Foo v. United States, 369 U.S. 141, 82 S.Ct. 671, 7 L ed 2d 629, emphasized that what constitutes an acquittal is not to be controlled by the form of the judge's action. Rather, this Court must determine whether the ruling of the judge, whatever its label, actually represents a resolution, correct or not, of some or all of the factual elements of the offense charged. This Court in State v. Peck, 83 Mont. 327, 330, 271 P. 707, stated that statutes granting the right of appeal to the state in criminal actions must be strictly construed and the right limited to the instances mentioned; if the right is not clearly and unequivocably conferred, an action does not lie, nor can the right, if conferred, be enlarged by construction of the statute. In an early Montana case, Territory of Montana v. Philip Laun, 8 Mont. 322, 20 P. 652, the district court directed the jury to find a verdict of acquittal and the state appealed contending that the action was in effect a dismissal of the case and thus appeal- able under the precurser to section 95-2403. This Court disagreed stating that an acquittal is not appealable by the state. This rule is still the law in Montana. Perhaps the most fundamental rule in the history of criminal jurisprudence has been that a verdict of acquittal cannot be reviewed, on error or otherwise, without putting a defendant twice in jeopardy and therefore violating the Fifth Amendment, United States Constitu- tion. United States v. Ball, supra. The due process clause of the Fifth Amendment has been applied to the states through the Fourteenth Amendment to the United States Constitution. In Benton v. Maryland, 395 U.S. 784, 794, 89 S.Ct. 2056, 23 L ed 2d 707, the United States Supreme Court stated: " * * * the double jeopardy prohibition of the Fifth Amendment represents a fundamental ideal in our constitutional heritage, and that it should apply to the States through the Fourteenth Amendment. " See also: United States v. Martin Linen Supply Co., No. 76-120, 21 Crim. L.R. 3001, 45 United States Law Week 4337, April 4, 1977. For the foregoing reasons defendant's amended motion to dismiss the state's appeal is granted. ,lLx Justice i We Concur: qmbdb Chief Justice i i Justices State of Montana v. Elone Elaine Cool ---No. 13655 M r . Justice Daniel J. Shea separately concurring: I concur in the result of t h i s case but I do not agree with the implications of t h i s decision holding that a d i s t r i c t court has the power t o dismiss a criminal case before it goes t o the jury on the grounds of insufficiency of the evidence. Whether the d i s t r i c t judge was right or wrong i n dismissing t h i s case, it is clear double jeopardy would prevent defendant from again being t r i e d for the same offense. Whether it was an acquittal or dismissal for insufficiency of the evidence it makes no difference. Double jeopardy attaches. I a m not convinced however, that a d i s t r i c t judge has the right t o take a case away from a jury on the grounds of insuffi- ciency of the evidence, whether the motion be one t o acquit or one t o dismiss. I n relying on Territory of Montana v. Philip Laun, 8 Mont. 322, 327, 20 P. 652 (1889), the court s t a t e s that t h i s case has never been overruled and is s t i l l the law i n Montana. While it has not been overruled, it is no longer the law in Montana. I n Laun, the Court stated: "The practice of directing an acquittal whenever the evidence, i n the discretion of the judge, f a i l s t o support the charge, is well recognized as a proper order i n criminal procedure. * * * There is no law i n our statutes, express or implied, which forbids the exercise of t h i s power i n the t r i a l judge * * *." (Emphasis added.) 8 Mont. 327. By t h i s language it is clear that in Laun the Court f e l t it was clearly within the power of the legislature t o expressly or impliedly take t h i s power away from the d i s t r i c t courts. I believe that subsequent statutes have taken that power away from d i s t r i c t courts, f i r s t expressly, and presently, by impli- cation. Section 94-7227, R.C.M. 1947, was enacted a f t e r Laun was decided and remained in effect u n t i l 1967, when the present statutes were adopted. It provided i n relevant part: 'I* * * I f , a t any t i m e a f t e r the evidence on either side is closed, the court deems it in- sufficient t o warrant a conviction, it may advise the jury t o acquit the defendant; but the jury is not bound by the advice. I I It is clear t h i s statute prevented a d i s t r i c t judge from taking a case away from the jury on the grounds of insuffi- cient evidence, or directing it t o find a verdict of not guilty because of insufficient evidence. H e could only advise that, i n h i s opinion, the jury should acquit because of insufficient evidence. Accordingly, when section 94-7227 went into effect, Laun was no longer the law. - Section 94-7227 remained i n effect u n t i l 1967. It is true that even while it was i n effect, it was held it did not apply t o situations where there was - no evidence t o support a conviction. State v. Labbitt, 117 Mont. 26, 35, 156 P.2d 163 (1945) ; State v. Widdicombe, 130 Mont. 325, 330, 301 P.2d 1116 (1956); State v. Perschon, 131 Mont. 330, 337, 310 P.2d 591 (1957). These cases distinguish between situations i n which the t r i a l court deems the evidence, although tending t o prove every element necessary t o constitute the crime charged, insufficient, and situations where there was a lack of any evidence on a material element of the crime charged. I n the f i r s t instance the d i s t r i c t court could not dismiss the case (section 94-7227,R.C.M. 1947), but in the second situation he could dismiss the case before it went t o the jury. Such was the s t a t e of the law when section 94- 7227 was repealed and section 95-2101, R.C.M. 1947, replaced it. Section 95-2101 details the powers of d i s t r i c t judges a f t e r the t r i a l of criminal actions and provides: "New Trial. (a) Definition and Effect. A new t r i a l is a -xamination of the issue in the same court, before another jury, a f t e r a verdict or finding has been rendered and the granting of a new t r i a l places the parties in the same position as i f there had been no t r i a l . " (b) Motion for a N e w Trial. "(1) Following a verdict or finding of guilty the court m a y grant the defendant a new t r i a l i f required in the interest of justice. '(2) The motion for a new t r i a l shall be in writing and shall be filed by the defendant within thirty (30) days following a verdict or finding of guilty. Reasonable notice of the motion shall be served upon the state. "(3) The motion for a new t r i a l shall specify the grounds therefor. " (c) Alternative Authority of the Court on Hearing Motion for N e w Trial. O n hearing the motion for a new t r i a l , i f justified.by law, and the weight of the evi- dence, the court may: "1. Deny the motion, "2. Grant a new t r i a l , or 3 Modify or change the verdict or finding by finding the defendant guilty of a lesser degree of the crime charged, finding the defendant guilty of a lesser included crime or finding the defendant not guilty .I' (Emphasis added. ) The underlined portion of the above quoted statute, I believe, was designed t o give the d i s t r i c t courts a l l the power they needed to correct an injustice caused by an erroneous jury verdict of guilty. The t r i a l judge can, among other things, either modify a jury verdict by changing it t o a lesser included offense, or he can find the defendant not guilty. The salient point, however, is that i f the d i s t r i c t court does this, and since it is a f t e r the t r i a l , the state has the right t o appeal as expressly provided i n section 95-2403, R.C.M. 1947. Section 95-2403(b) (2) provides: "(b) The s t a t e may appeal from any court order or judgment the substantive ef fect of which results in: 'I* * * "(2) modifying o r changing the verdict as provided i n section 95-2101(c) (3)". It is clear then that i f the court does nrodify or change the verdict, the s t a t e can appeal. Allowing the s t a t e t o appeal under these circumstances does not subject the defendant t o double jeopardy. I f the s t a t e loses the appeal, the d i s t r i c t court's order modifying the jury verdict or finding the defendant not guilty, stands and that is the end of the case. I f the s t a t e wins its appeal, the effect is that the guilty verdict is reinstated and de- fendant s t i l l has been subjected t o but one t r i a l . The only thing l e f t then is the sentencing. This s t a t u t e protects both the rights of the s t a t e and those of defendant. The s t a t e ' s right t o appeal is protected and the more important right of the defendant not t o be twice put i n jeopardy is protected. The majority decision did not deal a t a l l with t h i s problem and I can conceive its decision is going t o cause problems i n Montana. For the foregoing reasons, I would uphold the decision of the d i s t r i c t court i n dismissing --- solely f o r the reason that double jeopardy attached under the factual situation here. How- ever, I would also hold that a d i s t r i c t court has no right t o enter an order of dismissal o r an order of acquittal on the grounds of insufficiency of the evidence. The remedy of defendant is provided i n section 95-2101. A

August 31, 1977

5ef58378-2b86-4fb3-b22d-c08e134990ea

CUSTODY OF DALLENGER

N/A

13493

Montana

Montana Supreme Court

No. 13493 I N THE S U P R E M E COURT O F THE STATE O F MONTANA I N RE T H E C U S T O D Y O F S U Z A N N E DAWN D A L L E N G E R and CHRISTOPHER MICHAEL D A L L E N G E R Appeal from: D i s t r i c t Court of t h e Eighth J u d i c i a l D i s t r i c t , Honorable R.D. McPhillips, Judge presiding. Counsel of Record: For Appellant: S c o t t , L i n n e l l , N e i l l & Newhall, Great F a l l s , Montana Kenneth R. N e i l l argued, Great F a l l s , Montana For Respondent: Swanberg, Koby, Swanberg & Matteucci, Great F a l l s , Montana Arthur G. Matteucci appeared, Great F a l l s , Montana John Albe argued, Great F a l l s , Montana Submitted: March 15, 1977 Decided : AUG 2 2 1977 M r . J u s t i c e John Conway Harrison delivered the Opinion of the Court. This i s an appeal from an order of the d i s t r i c t court, Cascade County, granting respondent's p e t i t i o n for modif ica- t i o n of the decree a s t o custody of the p a r t i e s ' two children. Appellant Ronald Dallenger was awarded custody of the children, Suzanne and Christopher, pursuant t o a decree of divorce entered May 24, 1974. Appellant has since remarried and presently l i v e s i n Great F a l l s , Montana. Respondent, Martha Herren, a l s o i s remarried and resides i n Florida. O n February 20, 1976, respondent f i l e d a p e t i t i o n f o r modification of custody. She f i l e d an amended p e t i t i o n t o the same e f f e c t on March 25, 1976. The matter was referred t o the court of conciliation f o r investi- gation and hearing was held June 30, 1976, on the modification issue. After the hearing the d i s t r i c t court granted respondent's p e t i t i o n f o r modification and awarded custody of the children t o her. The court expressed the standards it employed i n these findings and conclusions: "* * * Without going into the nature and p a r t i c u l a r s of a l l such testimony, the Court finds a s a matter of f a c t , t h a t Suzanne's and Christopher's physical, mental, moral and emotional health would be best served i f Herren had the care, custody and control of said children subject t o reasonable r i g h t s of v i s i t a t i o n by Dallenger a t reasonable times, places and i n t e r v a l s a s f u l l y s e t f o r t h i n the order herein. A change i n custody would serve said children's b e s t i n t e r e s t . "Martha F. Herren (Dallenger) has shown by a preponderance of the evidence introduced herein t h a t the physical, mental, moral and emotional health are best served by she acquiring custody of Suzanne and Christopher Dallenger, and t h a t t o change custody arrangements forthwith is t o the environ- mental benefit of said children." Appellant urges two specifications of e r r o r : (1) The d i s t r i c t court applied incorrect standards i n i t s decision t o change custody of the children t o respondent. (2) That even i f the proper standards were applied, the decision was not supported by the evidence. W e hold the f i r s t specification of e r r o r requires a reversal of the d i s t r i c t c o u r t ' s order and new hearing, therefore we express no opinion regarding the sufficiency of the evidence presented a t the p r i o r hearing. The action f o r modification of custody a r i s e s under the Uniform Marriage and Divorce Act, section 48-339, R.C.M. 1947, it provides : "(1) N o motion t o modify a custody decree may be made e a r l i e r than two (2) years a f t e r i t s date, unless the court permits it t o be made on the b a s i s of a f f i d a v i t s t h a t there is reason t o believe the c h i l d ' s present en- vironment may endanger seriously h i s physical, mental, moral, o r emotional health. "(2) The court s h a l l not modify a p r i o r custody decree unless it finds, upon the basis of f a c t s t h a t have a r i s e n since the p r i o r decree o r t h a t were unknown t o the court a t the time of entry of the p r i o r decree, t h a t a change has occurred i n the circumstances of the child or h i s custodian, and t h a t the modification i s necessary t o serve the b e s t i n t e r e s t of the child. I n applying these standards the court s h a l l r e t a i n the custodian appointed pursuant t o the p r i o r decree unless: "(a) the custodian agrees t o the modification; "(b) the child has been integrated i n t o the family of the p e t i t i o n e r with consent of the custodian; o r "(c) the c h i l d ' s present environment endangers seriously h i s physical, mental, moral, o r emotional health, and the harm l i k e l y t o be caused by a change of environment i s out- weighed. by i t s advantages t o him. "(3) Attorney fees and costs s h a l l be assessed against a party seeking modification i f the court finds t h a t the modification action i s vexatious and constitutes harassment. I f Section 48-339 requires a showing of a change i n circum- stances and that modification i s necessary t o serve the best interests of the child. The statute i s specific, however, i n pointing out how these standards are t o be applied. N o change i n custody may be made unless subsections (a), (b) , o r (c) under section 48-339(2) are satisfied. Here only sub- section 2(c) i s applicable, and it requires: (1) the physical, mental, moral, o r emotional health of the child be endangered i n i t s present environment; and (2) the advantages t o the child of a change i n custody outweigh :the harm likely t o be caused by such a change. This burden put on the party seeking a change i n custody was developed' intentionally t o further the policy that custody ought t o be d i f f i c u l t t o change a f t e r a decree is made. The Comment of the National Conference of Commissioners on Uniform State Laws, quoted by t h i s Court i n Holm v.i-'Holm, Mont . , 560 P.2d 905, 908, 34 St.Rep. 118, 121, s t a t e s i n part: "Most experts who have spoken t o the problems of post-divorce adjustment of children believe that insuring the decree's f i n a l i t y i s more important than determining which parent should be the custodian. See Watson, The Children of Armageddon: Pfoblems of Custody Following Divorce, 21 Syracuse L.Rev. 55 (1969). This section i s designed t o maximize f i n a l i t y (and thus assure continuity for the child) without jeopardizing the child's interest. * * *" I n light of these policy considerations i n addition t o the clear language of the statute, we cannot hold the statute i s satisfied where the court finds only that the interests of the children would be "best served" by a change in custody, and that such a change would be "to the environmental benefit" of the children. For the court in t h i s case t o have j u r i s d i c t i o n t o modify a custody decree under section 48-339, there must be a finding of danger t o the physical, mental, moral, o r emotional health of the children i n t h e i r present environment, and a finding t h a t the harm l i k e l y t o be caused by such a change i s outweighed by i t s advantages t o them. Here, there simply were no such findings. Respondent argues the ultimate determination under the s t a t u t e i s s t i l l the b e s t i n t e r e s t s of the c h i l d and a finding to t h a t e f f e c t necessarily includes a finding t h a t one of the subsections t o section 48-339(2) i s s a t i s f i e d . W e agree the f i n a l decision remains the t r a d i t i o n a l "best interests" decision. Eoss v. Leifer, Mont . , 550 P.2d 1309, 33 St.Rep. 528; Erhardt v. Erhardt, - Mont . - 2 554 P.2d 758, 33 St.Rep. 883. But the subsections t o section 48-339(2) a r e j u r i s d i c t i o n a l prerequisites t o modification which were placed there t o serve the basic policy behind the e n t i r e section, the policy of custodial continuity. To allow these c r u c i a l issues t o be resolved merely by references t o the b e s t i n t e r e s t s of the children would seriously weaken the s t a t u t e . W e hold the d i s t r i c t court did not comply with the correct statutory standards s e t out i n section 48-339(2)(c), R.C.M. 1947. The order granting modification of the custody decree is reversed. The case i s remanded t o the d i s t r i c t court f o r a new hearing i n compliance with t h i s opinion. We Concur: i , I \ Chief Justice

August 22, 1977

0bc8ef5d-fc21-49ef-b092-5a11e2ebb40c

SOVEY v CHOUTEAU COUNTY DIST HOSP

N/A

13585

Montana

Montana Supreme Court

No. 13585 I N T H E SUPREME COURT O F T H E STATE O F M O N T A N A 1977 D O Y L E SOVEY, P l a i n t i f f and Appellant, -vs- C H O U T E A U C O U N T Y DISTRICT HOSPITAL e t a l . , Defendants and Respondents. Appeal from: D i s t r i c t Court of t h e Eighth J u d i c i a l D i s t r i c t , Honorable R. J. Nelson, Judge p r e s i d i n g . Counsel of Record: For Appellant: Morrison, E t t i e n and Barron, Havre, Montana Robert D. Morrison argued, For Respondent: Douglas C. Allen, Great F a l l s , Montana J. Morris Ormseth argued, Great F a l l s , Montana Joseph Marra argued, Great F a l l s , Montana Sub3itted.: June 1, 1977 Decided : AUG 1 5 1 9 n F i l e d : 1 5 1977' V I " Clerk Mr. Justice John Conway Harrison delivered the Opinion of the Court. Plaintiff Doyle Sovey appeals from an order of the district court, Chouteau County, dismissing plaintiff's amended complaint. Plaintiff filed his original complaint on December 3, 1975, alleging he was employed by defendants as administrator of Chouteau County Hospital, and that defendants wrongfully discharged him prior to the expiration of his contract. Plaintiff alleged he became aware of the fact one of the trustees of the hospital was receiving allegedly illegal and improper payments from an insurance company, and his continual insistence that the trustee resign was the reason for plaintiff's discharge. Plaintiff alleged five separate causes of action in his original complaint: (1) Breach of the employment contract; (2) intentional infliction of injury; (3) the willful and malicious action of two of the individual defendants, giving rise to a right to punitive damages; (4) bad faith on the part of the defendants; and ( 5 ) defamation arising out of a statement allegedly made by defendants to the local press that plaintiff was relieved of his duties because of "insubordination". On May 11, 1976, Judge Truman Bradford ordered the com- plaint dismissed in its entirety for failure to state a claim upon which relief can be granted pursuant to Rule 12, M.R.Civ.P. The complaint was dismissed for these reasons: "1. Under R.C.M. 1947, Section 16-4308, the Defendant hospital district, acting by its duly elected board of trustees, has both the power to appoint and remove a hospital administrator who is a 'supervisory employee', under R.C.M., 1947, Section 59-1602, 'without limitation'; "2. Under R.C.M. 1947, Section 83-4323, the defendants are immune from personal liability; and "3. Under R.C.M. 1947, Section 64-208, any statements made by any of the defendants are privileged." Plaintiff did not appeal from this order but filed an amended complaint on May 18, 1976. On May 24, 1976, plaintiff filed an affidavit of disqualification of the presiding judge. Judge R. J. Nelson assumed jurisdiction, and on September 28, 1976, he dismissed plaintiff's amended complaint on the grounds: "* * there are no new substantive facts contained in the amended Complaint, and that the Court's Order dated May loth, 1976 is a final adjudica- tion on the merits and the claims asserted* * *." We emphasize that plaintiff is appealing from Judge Nelson's order of September 28, not Judge Bradford's order of May 11. As such, plaintiff's notice of appeal, filed October 21, is timely. Rule 5, M.R.App.Civ.P. However, while plaintiff argues at length concerning the merits of Judge Bradford's order, the only issue properly before this Court is whether Judge Nelson erred in dis- missing plaintiff's amended complaint for failure to state any new substantive facts. Therefore, we examine plaintiff's amended com- plaint with reference to the original complaint to determine if any new substantive facts were alleged. Plaintiff's amended complaint contains six causes of action: The first is for breach of an alleged five year employment contract and is practically identical to the first cause of action in the original complaint. There are a few additional phrases emphasizing the allegation of the existence of a contract, and adding that plaintiff requested the trustee to resign "to avoid any possible charge that he might be obstructing justice in viola- tion of Section 94-7-303, R.C.M. 1947". The second is for intentional infliction of injury and alleges defendants were "acting beyond the scope of their authority as trustees....". Plaintiff's original complaint alleged defendants were acting ' ! i n their capacity as the Board of Trustees." Plaintiff's amended complaint also alleges he has not been able to find new employment since he was fired, and he does not expect to find such employment in the future. The third is new and is also for intentional infliction of injury, but alleges alternatively that defendants acted "within the course and scope of their office as trustees....". Thus, this cause of action is substantially identical to the second cause of action in the original complaint. The fourth is for punitive damages and is identical to the third cause of action in the original complaint. The fifth alleges bad faith and is identical to the fourth cause of action in the original complaint. The sixth is for defamation and differs from the original fifth cause of action only in that it adds the allegation defendants were acting outside the scope of their official duty in making the alleged libelous statements to the press. It is clear plaintiff's amended complaint is essentially the same as his original complaint. Any changes were purely cosmetic, except for the bare alternatively plead conclusions of law that defendants acted outside the scope of their employment as trustees. In Holtz v. Babcock, 143 Mont. 341, 355, 389 P.2d 869, this Court stated: "Professor Moore in Moore's Federal Practice, Vol. 2, P. 2244, puts it this way: I1 I * * * For the purposes of the motion [to dismiss under Rule 121 the well-pleaded material allegations of the complaint are taken as admitted; but conclu- sions of law or unwarranted deductions of fact are not admitted. I ' This reasoning is pertinent here. Plaintiff cannot merely add sweeping alternative conclusions of law to his original com- plaint and claim that his amended complaint contains substantive changes. In substance, plaintiff refiled what is essentially his original complaint before another district judge, in order to mount a collateral attack upon the order dismissing his original complaint. Judge Nelson correctly refused to exercise appellate jurisdiction over another district judge. State ex rel. State Highway Commis- sion v. Kinman, 150 Mont. 12, 15, 430 P.2d 110. The order of the district court dismissing plaintiff's amended complaint for failure to state any new substantive facts is affirmed. We Concur: Chief Justice Justices

August 15, 1977

7b6f0d97-5f3d-4835-aa30-50b932dda202

State v. Hancock

2016 MT 21

DA 14-0596

Montana

Montana Supreme Court

DA 14-0596 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 21 STATE OF MONTANA, Plaintiff and Appellee, v. ANTHONY PHILLIP HANCOCK, Defendant and Appellant. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. ADC-13-214 Honorable Gregory G. Pinski, Presiding Judge COUNSEL OF RECORD: For Appellant: Haley Connell, Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Brenda Elias, Assistant Attorney General, Helena, Montana John Parker, Cascade County Attorney, Ryan Ball, Deputy County Attorney, Great Falls, Montana Submitted on Briefs: October 7, 2015 Decided: January 26, 2016 Filed: __________________________________________ Clerk January 26 2016 Case Number: DA 14-0596 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Anthony Phillip Hancock appeals from the order of the Montana Eighth Judicial District Court, Cascade County, denying his motion to dismiss his 1999 DUI conviction for constitutional infirmity. We affirm but remand for correction of a clerical error in the judgment. ¶2 We address the following issues: ¶3 Issue one: Did the District Court err by denying Hancock’s motion to dismiss a DUI conviction based on his claim that his 1999 DUI conviction, used to support the felony charge, was constitutionally infirm? ¶4 Issue two: Did the District Court err by stating that Hancock was convicted of a DUI rather than a DUI per se? PROCEDURAL AND FACTUAL BACKGROUND ¶5 On May 22, 2013, the State charged by Information Anthony Phillip Hancock (“Hancock”) with driving under the influence of alcohol fourth or subsequent offense (“DUI”), a felony. Section 61-8-731, MCA. The Information provided that Hancock had been convicted of DUI offenses on three previous occasions, once in 1999 and twice in 2004. ¶6 On August 19, 2013, Hancock filed a motion to dismiss the 1999 DUI conviction in Great Falls Municipal Court, alleging that his constitutional right to counsel was violated in that proceeding. In addition to his brief, Hancock filed an affidavit in which he represented that at the initial appearance, he pled not guilty and informed the municipal court that he would retain private counsel. The affidavit also states that at a 3 later date Hancock returned to court and requested court-appointed counsel, which he was denied because it was too late. On the day set for trial, June 2, 1999, Hancock pled guilty to the DUI charge. ¶7 The District Court conducted a hearing on October 21, 2013, to assess Hancock’s assertions regarding the 1999 DUI conviction. Both Hancock and the Hon. Nancy Luth, who presided over Hancock’s 1999 trial, testified. The 1999 proceeding was set in municipal court, which was not a court of record at the time. However, there was a docket sheet with minutes from the initial appearance; Judge Luth explained that the docket sheet indicated that Hancock was advised of his rights. Hancock confirms that he declined a court-appointed attorney at that appearance. There is no record that Hancock requested an attorney following the initial appearance. Judge Luth testified that it was her general practice to grant a request for a court-appointed attorney unless the request was made on the day of trial and thereby requiring that the trial be postponed. ¶8 On November 7, 2013, the District Court denied Hancock’s motion to dismiss the 1999 DUI conviction. Hancock pled guilty to the offense of “operation of noncommercial vehicle by person with alcohol concentration of 0.08 or more,” pursuant to § 61-8-406, MCA, reserving his right to appeal the denial of his motion to dismiss. STANDARD OF REVIEW ¶9 The issue concerning the use of prior convictions to support a felony charge of DUI is a question of law and is reviewed de novo. State v. Maine, 2011 MT 90, ¶ 12, 360 4 Mont. 182, 255 P.3d 64. The district court’s factual findings regarding the validity of a prior conviction are reviewed under the clearly erroneous standard. Maine, ¶ 12. DISCUSSION ¶10 Issue one: Did the District Court err by denying Hancock’s motion to dismiss a DUI conviction based on his claim that his 1999 DUI conviction, used to support the felony charge, was constitutionally infirm? ¶11 The State may not rely on a constitutionally infirm conviction for sentence enhancement purposes because doing so violates a defendant’s due process rights. State v. Haas, 2011 MT 296, ¶ 14, 363 Mont. 8, 265 P.3d 1221 (internal citations omitted). In State v. Okland, 283 Mont. 10, 941 P.2d 431 (1997), we outlined a procedural framework for assessing collateral challenges to previous convictions. Okland, 283 Mont. at 18, 941 P.2d at 436. The framework establishes that a “presumption of [validity] attaches to a prior conviction during a collateral [challenge]” and a defendant who raises the constitutional validity of the prior conviction “has the burden of producing direct evidence of its invalidity.” Okland, 283 Mont. at 18, 941 P.2d at 436. ¶12 In State v. Howard, 2002 MT 276, ¶ 3, 312 Mont. 359, 59 P.3d 1075, and State v. Walker, 2008 MT 244, ¶ 14, 344 Mont. 477, 188 P.3d 1069, we held that an unequivocal statement in the form of a sworn affidavit is sufficient direct evidence to overcome the presumption of validity. Nevertheless, the defendant has the ultimate burden of proof to both produce and persuade “by a preponderance of the evidence that the conviction is invalid.” Maine, ¶ 12. Consequently to meet his or her burden of proof, [he or she] may not simply point to an ambiguous or silent record, but must come forward with affirmative 5 evidence establishing that the prior conviction was obtained in violation of the Constitution. Self-serving statements by the defendant that his or her conviction is infirm are insufficient to overcome the presumption of regularity and bar the use of the conviction for enhancement. Maine, ¶ 34. A defendant’s affidavit merely alleging the unconstitutionality of a previous conviction is not sufficient to rebut the presumption of validity of the conviction. State v. Nixon, 2012 MT 316, ¶ 19, 367 Mont. 495, 291 P.3d 1154. ¶13 The District Court correctly applied this standard in considering Hancock’s 1999 DUI conviction. The District Court held an evidentiary hearing during which both Hancock and Judge Luth testified about events prior to the 1999 DUI conviction. In 1999, the Municipal Court in Great Falls was not a court of record. The District Court had to rely on the credibility of the witnesses testifying about the events that occurred 14 years earlier. ¶14 Hancock testified that he saw Judge Luth prior to trial and requested court-appointed counsel. However, according to Hancock, his request for counsel was denied because he was too late in making the request. Judge Luth testified that she had no recollection of Hancock but she presented what she considered the likely course of events based on her experience and custom as municipal court judge for 25 years. Hancock does not dispute that he was advised of his rights and that he initially declined a court-appointed attorney. There are no court records that suggest that he, at a later time, requested an attorney. Judge Luth testified that it is unlikely that he appeared prior to his trial date to request an attorney, and that it is her common practice to appoint counsel if requested prior to the date of trial. In light of Judge Luth’s testimony, we are not 6 convinced by Hancock’s assertions in his affidavit and testimony that he timely requested appointment of counsel. Hancock has not satisfied his burden of proof. Nixon, ¶¶ 20-21. Given the testimony and evidence presented by Hancock to the District Court at the hearing, we cannot conclude that the court’s factual findings constitute clear error. ¶15 Issue Two: Did the District Court err by stating that Hancock was convicted of a DUI rather than a DUI per se? ¶16 Pursuant to § 46-20-703, MCA, this Court may “modify the judgment or order” that originated the appeal. We have in the past directed the district court to correct clerical errors in the record. State v. Goff, 2011 MT 6, ¶¶ 32-33, 359 Mont. 107, 247 P.3d 715. In this case, we note that there is a difference between the offense to which Hancock pled and the offense stated in the District Court’s judgment. Although it has no bearing upon the integrity of the felony conviction pursuant to § 61-8-731, MCA, Hancock technically pled to a DUI per se pursuant to § 61-8-406, MCA, as his fourth offense. Thus, to avoid any confusion and future litigation, we remand this cause to the District Court with instructions to amend the judgment so that it states the correct offense for which Hancock was convicted. ¶17 We affirm the order of the District Court and remand for further proceedings consistent with this Opinion. /S/ MIKE McGRATH We Concur: /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA

January 26, 2016

7780967a-2379-49ba-8b1f-47a6d2aceb87

STATE v ZIMMERMAN

N/A

13684

Montana

Montana Supreme Court

No. 13684 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 STATE OF MONTANA, Plaintiff and Respondent, -vs- ROBERT R. ZIMMERMAN, Defendant and Appellant. Appeal from: District Court of the Fourth Judicial District, Honorable Jack L. Green, Judge presiding. Counsel of Record: For Appellant: Edward A. Cumrnings argued, Missoula, Montana For Respondent: Hon. Mike Greely, Attorney General, Helena, Montana Robert Deschamps 111, argued, County Attorney, Missoula, Montana Submitted: September 14, 1977 Q c y ~ 9 5 r3-7 L i ; . L; ; , iY! ( Decided: ,- Filed: Mr. Justice Frank I. Haswell delivered the Opinion of the Court. This is an appeal by defendant from his conviction of 22 counts of embezzlement following a jury trial in the District Court, Missoula County. Defendant, a former psychology professor at the University of Montana, was in charge of a research project involving the effects of malnutrition in monkeys. This project was funded by various research grants from the federal government (through the Department of Health, Education and Welfare) and from private sources (through Nutrition Foundation, Inc., a nongovernmental entity). These grant funds were physically commingled with other moneys of the University of Montana in its "local pool of funds" on deposit in several banks in the Missoula area. Separate book- keeping entries were kept on each grant by the University so that a purchase made under a certain grant would be charged against the funds available in that particular grant on the University's books, but payment would be made to the creditor by University check drawn on its "local pool of funds". Any money remaining in a particular grant account on the University's books at the ter- mination of that particular project would be returned to the grantor. Defendant allegedly embezzled funds from the Department of Health, Education and Welfare and from the Nutrition Foundation by means of false claims charging against their respective grant accounts various purchases intended for defendant's personal use. For a prior history of this case and a pretrial opinion of this Court, see State ex rel. Zirnmerman v. Dist. Court (1975), 168 Mont.289, 541 P.2d 1215. On November 30, 1973, an indictment was filed in United States District Court accusing defendant of 16 counts of using documents containing a false statement in connection with charges against HEW research grants. The alleged crimes were in violation of 18 U.S.C., Sec. 1001 and covered the period between September 18, 1970 and October 20, 1972. Thereafter on December 13, 1972 defendant was charged with 36 counts of embezzlement by Information filed in the District Court of Missoula County. These alleged crimes covered the period from September 16, 1969 to December 29, 1972 and charged violation of state law, former section 94-1501, R.C.M. 1947. In substance, these charges accused defendant of appropriating public moneys to his own use by means of claims against Nutrition Fund grants covering items intended for his personal use. Subsequently defendant plead guilty to one of the federal counts and the remaining counts were dismissed. The federal court sentenced defendant to 3 years imprisonment, suspending 2 years and 305 days thereof on the condition that defendant be imprisoned for 60 days and contribute 40 hours per month to public service. Thereafter defendant filed a motion in state court seeking dismissal of the state charges on the grounds, among other things, that the state prosecution was barred by section 95-1711. Following denial by the District Court,Missoula County, defendant sought review of the District Court's ruling by writ of supervisory control. We accepted jurisdiction and denied petitioner's appli- cation on the merits. State ex rel. Zimmerman v. District Court, supra. Defendant was then tried by jury in state court and con- victed of 22 counts of embezzlement. He was sentenced to 10 years imprisonment on each count to be served concurrently with all but approximately 9 months suspended. Defendant appeals from this condition. Two issues are presented for review on appeal: (1) Was the admission of testimony that defendant appeared intoxicated on amphetamines reversible error? (2) Did the federal conviction bar the state prosecution? As part of its case-in-chief, the state called Dr. James A. Walsh, chairman of the psychology department of the University. During his direct examination by the county attorney, Dr. Walsh testified that during September, October and early November, 1972, he observed defendant in the psychology building at the University " * * * behaving in such a way that I believe that he was intoxicated on amphetamines". This testimony was admitted over the strenuous and protracted objections of defense counsel. On appeal the state contends this evidence was properly admitted as part of the state's proof that public moneys were appropriated by defendant to his own use and not for his research projects, an element of the crimes charged. Defendant contends the admission of this testimony is reversible error because it is simply evidence of a past, remote and unrelated issue without probative value and highly prejudicial. This issue concerns counts I11 through XI of the Infor- mation. These counts in substance charge defendant with unlaw- fully appropriating public money to his own use by causing pay- ment to be made on various University claims covering items intended for his own use. The nine counts cover drug purchases (amphetamines and tranquilizers) totalling $407 between March 25, 1970 and December 15, 1971. We note that the evidence in question is somewhat remote. The behavior of defendant which Dr. Walsh witnessed occurred in the fall, 1972. The state's proof indicated the last purchase of ampheta- mines was either March 23, 1971 (state's exhibit 10) or April 7, 1971 (state's exhibit 37). The probative value of an observation 18 months after the last purchase of amphetamines in proving that the items were purchased for defendant's own use is open to question. We further note that the evidence, at best, is simply cumulative. The state called Dr. Charles R. Geist, a research assistant to defendant, who testified: "Q. (By county attorney) Let's examine the Nutrition Foundation grant particularly. Pre- vious to 1973, were you using amphetamines in the Nutrition Foundation research? A. No." This is direct and uncontradicted proof that the amphetamines covered by claims submitted by defendant were not purchased for use in the research project. It also supports the conclusion that they were intended for defendant's own use. The evidence further indicated that defendant reimbursed the University for these and other items to the tune of $11,762.92. Without detail- ing each other specific instance of proof, we can fairly state that the evidence at the trial permits the single conclusion that the amphetamines were intended for defendant3 own use without resort to the challenged testimony of Dr. Clark. The prejudicial effect of the challenged testimony re- quires little comment. A University professor allegedly intox- icated on amphetamines in a college building on the campus of a state university obviously raises deep emotions and prejudice against him by reason of an alleged collateral crime with which he was not charged. In such a case the probative value, if any, of the challenged testimony to prove the crime charged must be weighed against its unfair prejudice in determining the admissi- bility of the challenged evidence. Montana has applied this approach in a number of cases. In State v. Rollins (1967), 149 Mont. 481, 428 P.2d 462, we said: " * * * In passing on the admissibility of such evidence, (gruesome color photographs of the victim's wounds), the court should weigh its probative value against its prejudicial effect." Other Montana cases applying this rule are State v.Bis- chert (1957), 131 Mont. 608, 308 P.2d 973; State v. Frates (1972), 160 Mont. 431, 503 P.2d 47; State v. Skinner (1973), 163 Mont. 58, 515 P.2d 81. The new Montana Rules of Evidence, although not applicable to this case tried before their effective date, contains the same rule : "Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by con- siderations of undue delay, waste of time, or needless presentation of cumulative evidence." Rule 403, M.R.Ev. The Commission Comment to this rule indicates no intention to change existing Montana law. The probative value, if any, of the challenged testimony is clearly outweighed by its unfair prejudice. The challenged testimony at best is remote, cumulative, and tends to confuse the issues the jury is to decide by proof of an alleged collateral crime with which defendant was not charged. The challenged testi- mony of Dr. Clark should have been excluded and failure to do so was an abuse of discretion constituting reversible error. Since this conviction must be reversed and the case remanded, discussion of the second issue is in order. In 1975 this Court in a 3-2 decision held on a writ of supervisory control that the prior federal conviction did not bar state prosecution in this case. State ex rel. Zimmerman v. Dist. Ct., supra. The basis of the majority decision was that 7 the federal and state prosecutions were not based on the "same transaction" but were separate "offenses" and that the requisite concurrent jurisdiction of state and federal courts to bar the subsequent state prosecution under section 95-1711, R.C.M. 1947, was lacking. All members of this Court are convinced that this former decision is fundamentally wrong and constitutes manifest error. The state argues in this appeal that the former decision is res judicata and further consideration is foreclosed. Defendant contends that the evidence at the trial differed from the representa- tions made to this Court in the previous decision and goes on to argue the merits of this issue as if it were an original matter. Without splitting definitional hairs to determine whether res judicata or law of the case principles are involved, we will refer to the principle as law of the case. Irrespective of its label, the gist of the principle espoused by the state is that the issue has been once finally decided and cannot again be liti- gated. Prior Montana cases disclose the general rule that where a decision has been rendered by the Supreme Court on a particular issue between the same parties in the same case, whether that decision is right or wrong, such decision is binding on the parties and the courts and cannot be relitigated in a subsequent appeal. Carlson v. Northern Pac. Ry. Co. (1929), 86 Mont. 78, 281 P. 913; Libin v. Huffine (1950), 124 Mont. 361, 224 P.2d 144; Little v. Little (1953), 127 Mont. 152, 259 ~ . 2 d ' j j f 3 : G. N. Ry. Co. v. State Bd. of Eq. (1952), 126 Mont. 187, 246 id 20. This general rule extends back to territorial days. Creighton v. Hershfield (1874), 2 Mont. 169; Barkley v. Tieleke, (1876) 2 Mont. 433. Also see 1 A.L.R. 1033 and 8 A.L.R. 1267 for varying decisions in other jurisdictions on whether an erroneous decision is the law of the case on a subsequent appeal. In any event an exception to this general rule exists where the case must be remanded to the District Court for further proceedings because of reversal on an unrelated issue. In such case this Court may correct a manifest error in its former opinion and announce a different ruling to be applied prospectively to future proceedings in the case. This exception to the general rule is recognized in Montana at least since 1955 when we held that the law of the case announced in the first appeal, and which governed the second trial, does not prevent the appellate court from correcting a manifest error in its former opinion to apply to future proceedings where doing so promised justice without substantial injury to anyone. State v. Hale (1955), 129 Mont. 449, 291 P.2d 229. Such exceptions are more readily applied where, as here, the prior decision is by a divided court. Perkins v. Kramer (1948), 121 Mont. 595, 198 P.2d 475. For criticism of our former majority opinion, see Survey of Montana Law, Part I, Criminal Procedure, Vol. 38, No. 1, Montana Law Review, wherein Professor Elison uses this language: "In State ex rel. Zimrnerman v. District Court, the court allowed a second prosecution in state court after the defendant had been tried, convicted, and sentenced on virtually the same facts and for the same criminal episode in fed- eral court. The applicable statute provides: I ' 'When conduct constitutes an offense within the concurrent jurisdiction of this state and of the United States or another state or of two courts of separate and/or concurrent jurisdiction in this state, a prosecution in any such other jurisdiction is a bar to a subsequent prosecution in this state under the following circumstances: "'(a) The first prosecution resulted in an ac- quittal or in a conviction as defined in sub- section (3) and the subsequent prosecution is based on an offense arising out of the same transaction. ' "It is difficult to imagine a case fitting more completely within both the language and purpose of the statute. As noted by the dissent, there was a single research project, a single fund, a single purpose or plan, and a series of the same acts. Any factual differences were at most technical, legal distinctions. Nonetheless, the majority restated the position taken in an earlier case: 'A single act may be an offense against two statutes; and if each statute requires proof of an additional fact which the other does not, an acquittal or conviction under either statute does not exempt the defendant from prosecution and punishment under the other.' "This statement is not applicable, however, to Montana's double jeopardy statute. It misconstrues the express statutory language. It renders the phrase 'same transaction' meaningless. First, the court struggled to find that the offenses involved were different transactions, by deciding that the money taken belonged to two different funds -- Nutrition Fund, Inc. and HEW grant money -- even though the money was co-mingled. The court found there was a different offense because proof of a different fact was required. Then, it moved gracelessly from 'different offense' to 'different transaction'. This narrow, technical misapplication of Plontana's double jeopardy statute is unfortunate, and in the long run is injurious to the criminal justice system. Further, its effect on this defendant is distressing. The defendant was again tried, again convicted, and given a severe sentence in state court for the crime. Society's interest had been vindicated by the earlier trial and the defendant was on a course which would assure early reentry into a productive, socially valuable life. This course was interrupted by the lengthy, expensive state court process to the value and credit of no one." ~dditionally, defendant's conduct constituted an offense within the concurrent jurisdiction of the United States and Montana raising the bar against subsequent state prosecution under section 95-1711. This concurrent jurisdiction does not arise from the unproven claim that the research projects were carried on in a building allegedly located on a federal reservation as indi- cated in our former majority opinion. Concurrent jurisdiction arises because defendant's conduct constituted embezzlement under both federal law (18 U.S.C. Sec. 641) and state law (section 94-1501, R.C.M. 1947). The fact that federal authorities chose to prosecute and convict him for making false statements to secure the funds (18 U.S.C., Sec. 1001) rather than for appropriating the funds to his own use (embezzlement) does not destroy the required concurrent jurisdiction. The measure of concurrent jurisdiction is whether defendant's conduct subjected him to prosecution in both jurisdictions. The state prosecution is based on offenses arising out of the same transaction as the federal prosecution and therefore barred under section 95-1711 (4) (a), R.C.M. 1947. The "same trans- action" as the term is used therein means conduct consisting of "a series of acts * * * motivated by a common purpose or plan and which result in the repeated commission of the same offense or affect the same person * * * or the property thereof." Section 95-1711 (1) (a) (ii), R.C.M. 1947. The prior federal conviction is based on the same transaction as the state prosecution under this definition. All 36 charges in state court are based on a series of acts by the defendant (submitting false claims) motivated by a common purpose or plan (securing research funds for his personal use) resulting in the repeated commission of the same offense (embezzlement). His conduct also affected the same person or entity (the University of ~ontana) and its property (its local pool of funds). There is but one research project, one fund, a single pur- pose or plan, a series of the same acts, and the repeated commission of the same offense against the same institution. The initial source of the grants, the internal accounting and bookkeeping procedures of the University, and technical legal distinctions between the charges filed in the two courts cannot alter these basic facts. Section 95-1711 fits this case like a glove and bars the subsequent state prosecution after the initial federal conviction. This rule herein announced shall be applied prospectively to further proceedings in this case and not retrospectively to past proceedings under authority of State v. Hale, supra. Defendant's conviction is vacated and the cause remanded to the District Court for further proceedings in conformity with this opinion. Conc-3r: m i e f Justice /' y/45p_

December 29, 1977

13706830-e69b-4e17-bc81-0e30d60c2fcf

DOUGLAS v JUDGE

N/A

13627

Montana

Montana Supreme Court

No. 13627 I N THE SUPREPIIF, C O U R T O F THE STATE O F M O N T A N A 1977 K A R E N M. DOUGLAS, P l a i n t i f f and Appellant, -vs- T H O M A S L. JUDGE, Governor, e t a l . , Defendants and Respondents. ORIGINAL PROCEEDING: Counsel o f Record: For Appellant: G a r r i t y and Keegan, Helena, Montana Donald A. G a r r i t y argued, Helena, Montana For Respondents: Hon. Mike Greely, Attorney General, Helena, flontana Walter S. M u r f i t t , S p e c i a l A s s i s t a n t Attorney General, argued, Helena, Montana Submitted: June 13, 1977 Decided: . . . ? 3 ; 2, , q-fit r- d , : . ; ; F i l e d : : ' - Mr. Justice Frank I . Haswell delivered the Opinion of the Court. Appellant brought this action in the district court, Lewis and Clark County, seeking a declaratory judgment that Chapter 533, Laws of 1975, is unconstitutional. On cross motions for summary judgment, the district court held the challenged legislation to be valid and enforceable. ~ppellant appeals the district court ruling to this Court. Appellant is a citizen of the United States and the State of Montana and is a resident of Lewis and Clark County, Montana. Appellant owns both real and personal property in Lewis and Clark County, and pays taxes thereon. Appellant is also a registered elector within the county. Respondents were at all times relevant to this action the duly elected, qualified and acting members of the Board of Examiners of the State of Montana. The Board of Examiners is the body authorized to issue and sell state revenue bonds. Chapter 533, Laws of 1975, was enacted by the 1975 Mon- tana Legislature. This act, now codified as Title 89, Chapter 36, R.C.M. 1947, is an act providing for the development of renewable natural resources. The purpose of this act and the policies to be promoted thereby are set forth in section 89-3601, R.C.M. 1947, as follows: "In the development of the natural resources of the state it is essential to distinguish between those which are and those which are not renewable; to make proper charges through taxation and other- wise for the depreciation of nonrenewable resources; and to invest a proper proportion of the tax and other revenues from nonrenewable resources in the replacement thereof with developments of renewable natural resources that will preserve for the citizens the benefit of the state's natural heritage and to ensure that the quality of existing public re- sources such as land, air, water, fish, wildlife and recreational opportunities are not significantly diminished by developments supported by this act. In order to finance such developments it is neces- sary to borrow in anticipation of the receipt of the revenues, so that replacement will not lag behind consumption. The purpose of this act is to provide a procedure for borrowing in the most economical way for this purpose, and to author- ize the creation of debt to finance the first stage of the program, and to describe the types of projects, loans, and grants to be included in the program. " Three distinct programs for the development of renewable resources are contemplated by this act: (1) renewable resource development loans to farmers and ranchers, section 89-3603, R.C.M. development 1947; (2) state renewable resource/grants to public agencies, section 89-3604, R.C.M. 1947; and (3) state and local renewable resource development loans to public agencies, section 89-3605, R.C.M. 1947. Only the first program is challenged by appellant in this action and therefore, all discussion found herein spec- ifically relates only to this program. In furtherance of the stated purposes and policies, the act authorizes respondents, upon the request of the Department of Administration or the Board of Natural Resources and Conserva- tion, to issue and sell general obligation bonds of the state in an amount not to exceed five million dollars. The purpose of the bond sale is to finance the renewable resource development program as described in and pursuant to the terms and conditions of the act. The full faith and credit and taxing powers of the state are pledged for the prompt and full payment of all renew- able resource development bonds issued pursuant to this act. The proceeds of a11 renewable resource development bonds issued pursuant to this act, other than refunding bonds, are required to be deposited as received in a clearance fund account. The moneys on hand in this account may be used only to pay costs of the renewable resource development program upon the order of the Department of Administration or the Board of Natural Resources and Conservation. The Board of Natural Resources and Conservation is author- ized upon proper application and upon recommendation of the Department of Natural Resources to make renewable resource development loans from the account established by this act to farmers and ranchers of the state who, without regard to their form of business organization: (a) Are citizens of the United States and are citizens and residents of the State of Montana; (b) have sufficient farming or ranching training and experience which, in the opinion of the Department, is sufficient to assure the likelihood of the success of the proposed operations; and (c) are or will become owner-operators of farms and ranches. These private loans to farmers and ranchers may be made for any worthwhile project for the conservation, management, utilization, development or preservation of the land, water, fish, wildlife, recreational and other renewable resources in the state; and for the refinancing of existing indebtedness incurred in the expansion or rehabilitation of projects for those purposes. The loans may not exceed the lesser of $100,000 or 80 percent of the fair market value of the security given therefor, may not exceed a term of thirty years, and shall bear interest at a rate estab- lished by the Board of Natural Resources and Conservation not to exceed one percentage point greater than the prevailing interest rate on renewable resource development bonds authorized by the act. Private loans are to be secured by a lien upon the project constructed with the proceeds thereof. By a resolution adopted December 5, 1975, the Board of Natural Resources and Conservation requested the Board of Examiners to issue and sell bonds of the state to implement this act. his action was filed thereafter and the sale and issuance of the bonds has been stayed during the pendency of this appeal. Three issues are before this Court on appeal: (1) Whether the use of the bond moneys authorized by Chapter 533, Laws of 1975, for the purpose of lending money to private individuals is a violation of Article VIII, Section 1, 1972 Montana Constitution, as authorizing the levy of taxes for other than a "public purpose"? (2) Whether the use of the proceeds of said bonds for loans to private individuals violates Article V, Section 11, 1972 Montana Constitution, as an appropriation to a private individual not under control of the state? (3) Whether Chapter 533, Laws of 1975 constitutes an invalid delegation of legislative authority to the Department of Natural Resources and Conservation? Article VIII, Section 1, 1972 Montana Constitution provides: "Taxes shall be levied by general laws for public purposes." The crux of this issue is a determination of what is a "public purpose" within the framework of this action. The clear purpose of this act is to provide for the develop- ment of renewable resources in order that future generations of Montanans may enjoy such resources. In view of the mandate of Article I Montana Con- stitution that: "The state and each person shall maintain and improve a clean and healthful environment in Montana for present and future generations" we feel the purpose of this act is a "public purpose". Furthermore, we have previously stated that " * * * What is a 'public purpose' is a question primarily for legislative determination, with which we will not interfere un- less there has been a clear abuse of power. * * *" Willett v. State Board of Examiners, 112 Mont. 317, 322, 115 P.2d 287; Huber v. Groff, Mont . , 558 P.2d 1124, 33 St.Rep. 1304. We find no hint of such abuse of power in the instant case. Appellant further charges that the renewable resource development act violates Article V, Section 11(5), 1972 Montana Constitution. This section provides: "No appropriation shall be made for religious, charitable, industrial, educational or benevolent purposes to any private individual, private asso- ciation, or private corporation not under control of the state." In effect, appellant argues that the sale of the renewable re- source development bonds and the lending of the proceeds there- from to farmers and ranchers constitutes an appropriation of money for persons not under the control of the state. There can be no doubt that Article V, Section 11(5), 1972 Montana Constitution, prohibits the appropriation of funds for the use of any private individual, association or corpor- ation not under state control. We have previously held, however, that the sale of revenue bonds in order to raise money for resi- dential loans to low income citizens under the supervision of the Montana Housing Board, a public corporation, was not a vio- lation of this section. Huber, supra. We are confronted with a similar situation herein and the result must be the same. Initially it is important to recognize that the funds in question herein are not appropriated for the use of private persons, corporations or associations. The funds are appropriated for the use of the Department of Natural Resources and Conserva- tion. This department is then in turn directed by the renewable resource development act to dispose of these funds as directed by this act. All funds derived from the sale of the renewable resource development bonds are to be deposited in the clearance fund account. Sections 89-3606 and 89-3609, R.C.M. 1947. These moneys are to be used by the Board of Natural Resources and Conservation to make loans to farmers and ranchers for the development and preservation of renewable resources. The loans may be made only upon the proper application and recommendation of the Department of Natural Resources and Conservation. Section 89-3603, R.C.M. 1947. Total control over the granting of these loans is vested in the Department of Natural Resources and Conseryation. We hold that sufficient control over the appropriated funds is vested in the state and the mandate of Article V, Section ll(5) is met. Finally, appellant assails this act on the grounds of an unconstitutional delegation of legislative power to the Board of Natural Resources and Conservation since the legislature failed to establish adequate standards and guides for the deter- mination of projects eligible for renewable resource development loans. When the Legislature confers authority upon an adminis- trative agency, it must lay down the policy or reasons behind the statute and also prescribe standards and guides for the grant of power which has been made to the administrative agency. Bacus v. Lake County, 138 Mont. 69, 354 P.2d 1056. The following gen- eral rule found in 73 C.J.S. Public Administrative Bodies and Procedure, S 29, pp. 324, 325, has been often cited by this Court: "The law-making power may not be granted to an administrative body to be exercised under the guise of administrative discretion. Accordingly, in delegating powers to an administrative body with respect to the administration of statutes, the legislature must ordinarily prescribe a policy, standard, or rule for their guidance and must not vest them with an arbitrary and uncontrolled dis- cretion with regard thereto, and a statute or ordinance which is deficient in this respect is invalid. In other words, in order to avoid the pure delegation of legislative power by the creation of an administrative agency, the legislature must set limits on such agency's power and enjoin on it a certain course of procedure and rules of decision in the performance of its function; and, if the legislature fails to prescribe with reasonable clarity the limits of power delegated to an admin- istrative agency, or if those limits are too broad, its attempt to delegate is a nullity. " * * * On the other hand, a statute is complete and validly delegates administrative authority when nothing with respect to a determination of what is the law is left to the administrative agency, and its provisions are sufficiently clear, definite, and certain to enable the aqency to know its rights and obligations." (Emphasis supplied.) Bacus, supra; City of Missoula v. Missoula County, 139 Mont. 256, 362 P.2d 539; Huber, supra. What are the standards and guides supplied to the Board of Natural Resources and Conservation to be used in its deter- mination of projects eligible for renewable resource development loans? Section 89-3603(3) authorizes the Board of Natural Resources and Conservation to make loans to farmers and ranchers " * * * for any worthwhile project for the conservation, management, utilization, development, or preservation of the land, water, fish, wildlife, recreational and other renewable resources in the state * * *". The act further specifies the eligibility require- ments of prospective borrowers, maximum loan limits, maximum re- payment periods and requires the establishment of a lien in favor of the state upon the project. The Montana rule to be used in the evaluation of the validity of delegations of power to administrative agencies was carefully analyzed in Bacus at pp. 80, 81, where we stated: "In the case of Chicago, M. & St. P. R. Co. v. Board of R. R . Com'rs, 76 Mont. 305, 314, 315, 247 P. 162, 164, this court has stated: "'We think the correct rule as deduced from the better authorities is that if an act but author- izes the administrative officer or board to carry out the definitely expressed will of the Legislature, although procedural directions and the things to be done are specified only in gen- eral terms, it is not vulnerable to the criti- cism that it carries a delegation of legislative power.' This rule has been approved in Northern Pacific R . Co. v . Bennett, 83 Mont. 483, 272 P. 987; Barbour v. State Board of Education, 92 Mont. 321, 13 P.2d 225; State ex rel. City of Missoula v. Holmes, 100 Mont. 256, 47 P.2d 624, 100 A.L.R. 581; State v. Andre, 101 Mont. 366, 54 P.2d 566; State ex rel. Stewart v. District Court, 103 Mont. 487, 63 P.2d 141; and Thompson v. Tobacco Root Co-op State Grazing Dist., 121 Mont. 445, 193 P.2d 811. See also State v. Johnson, 75 Mont. 240, 243 P. 1073. "We do not disagree with this established rule as enunciated by these Montana authorities. However, the case at bar does not fall within the purview of this rule." The Court in Bacus continued by laying down the follow- ing rule to be used to determine the sufficiency of guidelines laid down by legislative enactments: "In the case of State v. Stark, 100 Mont. 365, 371, 52 P.2d 890, 892, this court has stated: "'Delegation of power to determine who are within the operation of the law is not a delegation of legislative power. * * * But it is essential that the Legislature shall fix some standard by which the officer or board to whom the power is delegated may be governed, and not left to be controlled by caprice.' "We agree with this statement of the law and go further by saying that the standard must not be so broad that the officer or board will have un- ascertainable limits within which to act." This rule has been followed closely by a number of subsequent cases. Pattie v. Oil & Gas Cons. Comm'n, 145 Mont. 531, 402 P.2d 596; State ex rel. Bennett v. Stow, 144 Mont. 599, 399 P.2d 221; City of Billings v. Smith, 158 Mont. 197, 490 P.2d 221. The standards and guides laid down by this act prove to be insufficient when analyzed by the Bacus test. In effect, the only limit on the power to loan money for a certain project is the Board of Natural Resources and Conservation's subjective determination of whether a project is worthwhile. The parameters which define a project eligible for the loans contemplated by this act must be more clearly defined. In its present form, in- sufficient guidelines are provided to the Department of Natural Resources and Conservation in order for it to fully know its rights and obligations under this act. The constitutional infirmity discussed above relating to the loan program to farmers and ranchers is not present in the remaining two programs contemplated by this action. Section 89- 3604,which deals with state renewable resource grants to public agencies, provides : "The department of administration may recommend to the governor that grants from the renewable resource development account * * * be made to any department, agency, board, commission, or other division of state government. Unless specifically authorized by the legislature, no bond proceeds shall be used for the purpose of making grants * * **I' This section further provides: "The governor shall submit those grant proposals having his approval to the legislature. * * * Those grant proposals approved by the legislature shall be administered by the department." Section 89-3605, R.C.M. 1947, which deals with state and local renewable resource development loans,provides: "The department of administration may recommend to the governor that loans be made * * * to any de- partment, agency, board, commission or other divi- sion of state government or to any city, county, or other political subdivision or local government body of the state." Again, legislative approval of these loans is required. In the programs contemplated by sections 89-3604 and 89-3605 strict control is maintained by the legislature over the disbursement of funds from this program in the form of grants or loans. No unconstitutional delegation of legislative power is present herein. We therefore, reverse the judgment of the district court and remand this matter with instructions to declare those portions of Title 89, Chapter 36, R.C.M. 1947, which provide for renewable resource development loans to farmers and ranchers unconstitutional as an unlawful delegation of legislative power.

August 22, 1977

552d9039-68dc-4b27-bf44-e2ad03ed62fa

DIEHL ASSOCIATES INC v HOUTCH

N/A

13586

Montana

Montana Supreme Court

No. 13586 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 DIEHL AND ASSOCIATES, INC., A Montana Corporation, Plaintiff and Respondent, -vs- L. R. HOUTCHENS, Defendant and Appellant. Appeal from: District Court of the First Judicial District, Honorable Gordon R. Bennett, Judge presiding. Counsel of Record: For Appellant: Smith and Harper, Helena, Montana Charles A. Smith argued, Helena, Montana For Respondent : Kline and Niklas, Helena, Montana John R. Kline argued, Helena, Montana Filed: Submitted: April 27, 1977 Decided: RlfG - $ 5977 - Mr. Justice Gene B. Daly delivered the Opinion of the Court. Defendant appeals from the judgment of the district court, Lewis and Clark County, sitting without a jury. The district court entered judgment for plaintiff and decreed that plaintiff recover from defendant the sum of $5,450 in real estate broker's commissions plus reasonable attorney fees in the amount of $400. Plaintiff initiated this action to recover real estate broker's commissions purportedly due and owing from the sale of two parcels of real property owned by defendant. On March 19, 1975, plaintiff and defendant entered into two listing agreements entitled REAL ESTATE BROKER'S EMPLOYMENT CONTRACT. One of the contracts was for the sale of 80 acres of agricultural land in the vicinity of Applegate Road (the Applegate property). The employment contract specified a purchase price of $50,000 cash or possible contract for deed with a sizeable down payment. The rate of brokerage commission was to be 10% of the stated selling price and the agreement was to expire on June 1, 1975. The second listing agreement was for the sale of a trailer park referred to as the Broadwater Trailer Court. This employ- ment contract specified a purchase price of $55,000 cash or terms of $15,000 down payment with the buyer assuming defendant's outstanding contract for deed, the balance to be financed by defendant on a contract for deed at 8% interest. The rate of brokerage commission was to be 6% of the stated selling price and the agreement was to expire on June 1, 1975. On April 18, 1975, plaintiff obtained the signatures of Courtney B. Atlas and defendant on a buy/sell agreement entitled EARNESTMONEY RECEIPT AND AGREEMENT TO SELL AND PURCHASE. Atlas deposited $500 as earnest money toward the purchase of the Applegate property. The buy/sell agreement provided for a purchase price of $35,000 with Atlas to pay $5,000 to defendant, assume defendant's existing contract for deed at existing terms, the balance of the purchase price to be financed by defendant on a contract for deed at 7-1/2% interest for 15 years. The buy/sell agreement specified the sale was to be closed on or before May 30, 1975, with a 30 day grace period allowed for the completion of financing, if necessary. The buy/sell agreement further pro- vided that the earnest money was to be returned if the purchaser was unable to assume defendant's existing contract for deed at the existing terms; plaintiff was to receive a brokerage conmis- sion in the amount of 7% of the stated selling price; in the event of a forfeiture of the deposit, the deposit was to be used to pay the agent's incurred expenses related to the sale and the balance was to be apportioned to the seller and agent equally, provided the amount to the agent would not exceed the agreed commission. Courtney B . Atlas failed to complete the purchase o f the Applegate property by May 30, 1975. Atlas attempted to substitute his wife, Donna Jean Atlas, as the purchaser and upon defendant's refusal to accept Ms. Atlas as a purchaser the negotiations terminated. On April 25, 1975, plaintiff obtained the signatures of Ray R . Buck and defendant on a similar buy/sell agreement en- titled EAIFJESTMONEY RECEIPT AND AGREEMENT TO SELL AND PURCHASE. Buck deposited $200 as earnest money toward the purchase of the Broadwater Trailer Court. The buy/sell agreement provided for a purchase price of $50,000 with Buck to pay $10,000 as down payment, assume defendant's existing contract for deed, the bal- ance of the purchase price to be financed by defendant on a con- tract for deed at 8% interest for 10 years. The buy/sell agree- ment further provided for the return of any earnest money in the same manner as in the previous buy/sell agreement; plaintiff was to receive a brokerage commission in the amount of 6% of the stated selling price; and the earnest money was accepted ''subject to the easement being granted and recorded for the disputed western boundary line of the above property". The sale of the Broadwater Trailer Court was not con- pleted by June 1, 1975. Defendant's reason for failing to consumate the sale to Buck was the failure to reconcile the boundary dispute, the condition precedent contained in the buy/ sell agreement. No easement was granted or recorded, nor was the lawsuit settled prior to the June 1, 1975, termination date of the buy/sell agreement. On July 3, 1975, plaintiff filed his original complaint which was subsequently amended on September 12, 1975. In the amended complaint plaintiff sought to recover $3,000 as the brokerage commission for procuring a purchaser for defendant's Broadwater Trailer Court, $2,450 as the brokerage commission for procuring a purchaser for defendant's Applegate property, plus reasonable attorney fees and costs. Defendant filed an answer and counterc~aim seeking the $500 earnest money deposit made by Courtney B. Atlas and held by plaintiff, plus attorney fees and costs. Plaintiff and defendant instituted discovery and both parties filed motions for summary judgment. On May 20, 1976, the district court issued its order vacating the June 1, 1976, date for trial and ordered: "The matter will be submitted to the Court for decision on the basis of the record, in- cluding all written discovery, as of June 1, 1976, by stipulation of counsel, the Court reserving the right to hold a hearing on factual issues, if necessary." On August 13, 1976, the district court issued its find- ings of fact and conclusions of law holding the defendant, by virtue of his acceptance and execution of the contracts entitled EARNEST MONEY RECEIPT AND AGREEMENT TO SELL AND PURCHASE " * * * is thereupon obligated to pay the plaintiff broker its commissions, as beyond doubt the plaintiff broker had complied with the terms of its listing agreement and has done all that could be done by it." Judgment was accordingly entered in plaintiff's favor on August 19, 1976, and defendant appealed to this Court. In defendant's brief on appeal and on oral argument before this Court defendant's counsel contends the sole issue for review is whether the district court erred "in granting Plaintiff's motion for summary judgment and not Defendant's." Apparently defendant's counsel overlooked the effect of the pretrial conference held with the district court on May 20, 1976, and the district court order which provided the matter to be submitted to the district court for decision on the basis of the record, pursuant to the oral stipulations of both parties. For purposes of our discussion, we characterize the district court's judgment as a final judgment on the merits and view defendant's arguments as challenging the sufficiency of the evidence relied on by the district court in its findings of fact, conclusions of law and judgment. Our resolution of this matter is simplified by a brief summation of the law in the area of a real estate broker's right to compensation for commissions. It is a generally accepted law that a real estate broker is entitled to commissions when he has, in pursuance of his employment and within the time specified in the contract of employment, procured a purchaser able, ready and willing to purchase the seller's property on the terms and conditions specified in the contract of employment. Roscow V. Bara, 114 Mont. 246, 135 P.2d 364; 12 Am Jur 2d 921, Brokers S182. When the broker procures a buyer who makes a counteroffer or agrees to terms at variance to the terms specified in the employment contract, the seller has the option of accepting or rejecting the counteroffer. If the seller accepts the counteroffer of the procured buyer, the seller is legally obligated to pay com- missions to the broker, either under the terms of the contract of employment or the mutually agreed terms of a contract for sale. The broker's ability to recover commissions is premised on the broker's ability to accomplish what he undertook to do in his contract of employment. 32 ALR3d 321, section 2. The broker is not entitled to compensation for unsuccessful efforts under his contract of employment, irrespective of how great his efforts were or how meritorious his services. Roscow v. Bara, supra. It is generally necessary to refer to the specific terms of the particular employment contract in order to determine whether or not the broker's duties have been performed. Plaintiff contends it completed performance under the employment contract when it obtained the signatures of Courtney B. Atlas and Ray R. Buck on the buy/sell agreements, the terms of which were agreed to by defendant. Plaintiff insists that any failure to complete the sale transaction is due to the de- fault or refusal of defendant and is not attributable to the actions of the buyers. In order to resolve what the broker's duties were under the enployment contract, we look to the list- ing agreements which provide: "FOR VALUE RECEIVED, you hereby are employed to sell or exchange the property described hereon at the selling price and on the terms noted. You hereby are authorized to accept a deposit on the purchase price. You may, if desired, secure the cooperation of any other broker, or group of brokers, in procuring a sale of said property. In the event-that you, or any other brokers cooperating with you, shall find a buyer ready and willing to enter into a deal for said price and terms, or such other terms and price as I may accept, or that durinq your employment you place me in contact with a buyer to or throuqh whom at any time within 90 days after the termination of said employment I may sell or convey said property, I hereby aqree to pay you in cash for your services a commission equal in amount to % of the above stated selling price. I agree to convey said real estate to the purchaser by a good and sufficient deed, to transfer and deliver said personal property, if any, by good and sufficient bill of sale and to furnish title insurance insuring marketable title to said real estate and good right to con- vey. I hereby warrant that the information shown hereon below is true, that I am the owner of said property, that my title thereto is a good and marketable title, that the same is free of en- cumbrances except as shown hereafter under "Finan- cial Details" and except taxes levied on said property for the current tax year which are to be pro rated between the seller and buyer. In case of an exchange, I have no objection to your rep- resenting and accepting compensation from the other party to the exchange as well as myself. I hereby authorize you and your customers to enter any part of said property at any reasonable time to show same. Also, I authorize you, at any time, to fill in and complete all or any part of the "Informative Data" below, except financial details. This agree- ment expires at midnight on , 19 I but I further allow you a reasonable time there- after to close any deal on which earnest money is then deposited. In case of suit or action on this contract, I agree to pay such additional sum as the court, both trial and appellate, may adjudge reasonable as plaintiff's attorneys fees. It is further agreed that my signature affixed to the renewal clause below shall have the effect of re- newing and extending your employment to a new date to be fixed by me on the same terms and all with the same effect as if the said new date had been fixed above as the expiration date of your employ- ment. "THIS LISTING IS AN EXCLUSIVE LISTING and you hereby are granted the absolute, sole and exclusive right to sell or exchanqe the said described property. In the event of any sale, by me or any other person, or of exchanqe or conveyance of said property, or any part thereof, durinq the term of your exclusive employ- ment, or in case I withdraw the authority hereby given prior to said expiration date, I agree to pay you the said commission just the same as if a sale had actually been consummated by you." (Emphasis added. ) We note the distinction between a brokerage contract which requires a broker to merely find a purchaser and a brokerage contract which requires a broker to sell, make or effect a sale. In the first case the broker earns his commission when he procures a buyer able, ready and willing to purchase on the seller's terms. A broker employed to sell or effect a sale does not earn his commission until he completes the sale. Completion of the sale, where real property is involved, amounts to payment of the purchase price and conveyance of title. OtNeill v. Wall, 103 Mont. 388, 62 P.2d 672. The employment contract or listing agreement in the present case provides for the broker's employment to "sell or exchange the property described hereon * * * THIS LISTING IS AN EXCLUSIVE LISTING and you hereby are granted the absolute, sole and exclusive right to sell or exchange the property." The plain and clear meaning of the language in the listing agree- ment specifies a contract to sell or effect a sale, not a con- tract merely requiring the broker to find a purchaser. In order for plaintiff to recover commissions in the present case it must have completed the sale of the properties owned by defendant. In determining whether the sales were completed we must look to the provisions of the buy/sell agreements and the actions of the parties. The buy/sell agreement for the Applegate prop- erty specified Courtney B. Atlas as the purchaser and depositer of $500 earnest money. On May 30, 1975, Atlas refused to sign a sale contract or otherwise complete the sale in accordance with the buy/sell agreement. In lieu of Courtney B. ~tlas' performance under the buy/sell agreement, Ms. Atlas was offered as a signatory to all closing papers and the contract for deed. We fail to find merit in plaintiff's argument that the sub- stitution of Ms. Atlas benefited defendant in that defendant gained "an additional signatory to the obligation". Courtney B. Atlas was the contracted purchaser and no party except Courtney B. Atlas was entitled to perform under the buy/sell agreement, absent the assignment of Courtney B. Atlas' rights under the contract with the written permission of defendant. We fail to find any legal compulsion which would compel de- fendant to accept a substituted purchaser. The failure of Courtney B . Atlas to perform under the buy/sell agreement amounted to a material breach of contract and plaintiff's attempt to perform under the listing agreement was defeated. The buy/sell agreement for the Broadwater Trailer Court was a conditional contract, i.e., the buy/sell agreement con- tained the condition precedent of "the easement being granted and recorded for the disputed western boundary line". The conditional contract became binding only in the event the ease- ment was granted and recorded. Cochran v. Ellsworth, 272 P.2d 904, 126 C.A.2d 429; Blaine v. Stinger, 290 P.2d 732, 79 Ariz. 376; Diamond v. Haydis, 356 P.2d 643, 88 Ariz. 326. Since no evidence was ever presented that the easement was granted and recorded, the legal effect is that no binding contract was ever consummated between defendant and Ray R . Buck. Plaintiff's attempt to perform under the listing agreement failed. The plaintiff failed to accomplish what he undertook to do as set forth in his contracts of employment with defendant and plaintiff is neither entitled to brokerage commissions for his unsuccessful efforts nor reasonable attorney fees for plaintiff's prosecution of the two actions. Lastly, we consider the subject of the $500 earnest money deposit made by Courtney B. Atlas. Atlas' failure to perform under the terms of the buy/sell agreement amounted to a material breach of contract and pursuant to the terms of the buy/sell agreement "said earnest money shall be forfeited to the seller as liquidated damages * * *". The buy/sell agreement further provides : "In the event of a forfeiture of the deposit as above provided, the said deposit shall be used to pay the agents incurred expenses related to this sale and the balance shall be apportioned to the seller and agent equally, provided the amount to the agent shall not exceed the agreed commission." Therefore, we remand this matter to the district court for determination of any "agents incurred expense related to this sale", the balance of the deposit to be equally apportioned between plaintiff and defendant. The judgment of the district court is reversed and the cause is remanded to the district court for further consideration consistent with this opinion. Justice We concur,: P Chief Justice ( 1 Justices 6 '

August 8, 1977

c83a2e25-175b-48cb-82ff-05bf2545f6bb

PRUDENTIAL FEDERAL v McDOUGALL

N/A

13381

Montana

Montana Supreme Court

No. 13381 I N T H E SUPREME COURT O F T H E STATE O F M O N T A N A 1977 PRUDENTIAL FEDERAL SAVINGS AND L O A N e t a l . , P l a i n t i f f and Respondent, -vs- G L E N N M c D O U G A L L e t a l . , Defendants and Respondents, -vs- BUILDING AGENCIES, I N C . , a c o r p o r a t i o n , Third-Party Defendant and A p p e l l a n t . Appeal from: D i s t r i c t Court of t h e F i f t h J u d i c i a l D i s t r i c t , IJonorable James D. Freebourn, Judge p r e s i d i n g . Counsel of Record: For Appellant: Robert P. Ryan argued, B i l l i n g s , Montana For Respondents: McCaffery, P e t e r s o n and Murray, B u t t e , Montana W. D. Murray, Jr. argued, B u t t e , Montana C h e s t e r Lloyd Jones argued, V i r g i n i a C i t y , Montana Submitted: June 6 , 1977 Decided: 4UG 2 1917 \!I6 ,j $n F i l e d : X r . dhiei J u s ~ i c e !>aul G. Hatfield delivered the Opinion of the Court . 3uilding Agencies, Inc. , appeals from a judgment of the d i s t r i c t court, Madison County, for $2,858.40 plus attorney fees of $250 and court c o s t s , and f o r additional attorney fees of $250 adjudged upon a t h i r d party complaint. Defendants McDougall arrived i n Sheridan, Montana from Xegina, Saskatchewan, February 3, 1967, and purchased a log house south of Sheridan. I n July 1967, they were contacted by a salesman f o r Building Agencies, Inc. The s o l i c i t a t i o n by the Agencies' agent was t o refurbish the e x t e r i o r of the log home by coating it with a p l a s t i c ~ o a t i n g carrying the trade name of Tex-Cote. O n July 26, 1967, McDougalls and Agencies entered i n t o an ~greernent t o apply the coating a s specified f o r the agreed sum of 32,850 with $50 paid i n advance. As a p a r t of the agreement Agencies was t o secure financing, which it did, through Prudential Federal Savings and Loan Associa- tion. O n August 7 , 1967, McDougalls signed a note, t h e subject $21: t h i s action, running t o Agencies i n the amount of $2,998.80 to be paid i n 96 monthly installments of $45.50, commencing October 7 , 1-967. Agencies immediately assigned the note t o Prudential ~11d Prudential issued i t s payment to Agencies i n the amount of j2,800. The work was completed by Agencies within a few days and Xcihugalls made the f i r s t $45.50 payment on October 12, 1967. Payments were made each month thereafter u n t i l January 1969, when ~ n i y $23. was paid; March 10, 1969 when $20 was paid; March 20 when $20 was paid; (oddly enough, according t o the exhibit received ~t t r i a l , his $40 was credited t o reduce principal); on May 26, 1969, $20 was paid and credited t o i n t e r e s t and the f i n a l payment of $20 was paid on June 18, 1969, credited t o i n t e r e s t for a balance owing on June 18, 1969 of $2,684.71. During the time January 1969 t o a t l e a s t May 25, 1969, Waneta McDougallls response t o Prudential's requests f o r payment was t h a t the McDougalls were having financial problems but "we s h a l l g e t these paid a s soon a s possible." She t e s t i f i e d she complained of cracking and peeling of the coating t o Prudential, and Prudential on July 9, 1969, wrote McDougalls t h a t Prudential was "going t o g e t i n touch with the dealer regarding h i s workmanship." The t r i a l judge found t h a t within a year a f t e r application Agencies' work proved improperly performed. I n the agreement of July 26, 1967 Agencies agreed t o perform much preparatory work. In Agencies1 b r i e f t h i s i s s e t out: "The contract called for extensive preparation of the log surfaces, including sandblasting, silicone water- proofing, sealer coat and other measures and then a f i n a l coat of Tex-cote, a p l a s t i c material. 'I* * * Tex-Cote1 s f u l l guarantee, with underlining added, reads: '"This i s t o c e r t i f y t h a t the Tex-Cote applied on che above property i s hereby guaranteed f o r a ten year period against flaking, chipping or peeling. This guarantee is t o be i n force f o r a period of ten years from the r e g i s t r a t i o n date (Date of Application) and f u l l material replacement s h a l l be made should t h i s replacement be necessary a s a r e s u l t of a defect i n t h i s product only. * * >k ! f ' . * i ' ; * I "Building Agencies warranted the workmanship. The c o n ~ r a c t u a l provision (underlining added) reads : " ' ( 1 ) Tex-Cote is guaranteed by Textured Coating - of Americar,, Inc. and no warranty o r guaranty i s made by Building Agencies, Inc. ~ u i l d i n g ~ ~ e n c i e ; , Inc . does warrant the workmanship f o r a period of one year from the date of completion of che work. The warranty of workmanship is expressly limited t o correc- tion of the work which w i l l be done promptly a f t e r written notice of defective work i s received by Building Agencies, Inc. Building Agencies, Inc. s h a l l have no l i a b i l i t y f o r consequential damages, or any other l i a b i l i t y not herein expressed. I : I McDougalls refused further payments a f t e r June 18, 1969 assigning as t h e i r reason Agencies' f a i l u r e t o perform the work and labor s e t o u t i n the agreement.in a satisfactory manner. Prudential f i l e d s u i t against McDougalls on December 18, 1969. McDougalls answered and f i l e d a t h i r d party complaint against Building Agencies, Inc. The t h i r d party complaint and sunimons thereon was served on Agencies' president January 14, 1971. Shortly thereafter Waneta McDougall returned home t o find a "machine" i n her yard. According t o her testimony she did not know who it belonged t o or why i t was there. She called the sheriff t o have it towed away. She l a t e r learned the machine belonged t o Agencies and was there t o patch up the work. Her uncontradicted testimony was: "He said it was t o patch up the job, i s h i s words.'' She refused. The matter went t o t r i a l before the court without a jury. iiter testimony, the court granted summary judgment t o Prudential dgainst McDougalls i n the amount of $2,858.40 plus $250 attorney feds and costs. T h e t r i a l court further found: ' x * * t h a t the Defendants, GLENN and WANETA M c D O U G A L L , have judgment against the Third Party Defendant, BUILDING b~GENCIES, I N C . , a s follows : " ( I ) For the sum of Two Thousand Eight Hundred 41iity Eight and 40/100 Dollars ($2858.40) plus Two qundred F i f t y Dollars ($250.00) and Court costs a s provided f o r i n the Judgment against the Defendants [McDougalls ] above. ' ( 2 ) For attorney fees in the amount of Two HuriilreJ F i f t y Dollars ($250.00) .'I '[he issues on appeal are: (1) \&ether Agencies' warranty limited t o "correction of the work", limits the remedy of the purchaser t o correction aP the work only? (2) Can the purchaser prevent correction of the work and chen refuse payment on the contract price on the ground the work i s useless and there is a f a i l u r e of consideration? Both p a r t i e s agree t h a t Agencies warranted the work. Agencies presented no testimony. McDougallsl expert t e s t i - fied that i n May 1970 he inspected the house and the coating was deteriorating and coming o f f ; t h a t the "underpart of it showed the building had not been properly prepared for the product t o adhere t o it. + C * * Due t o foreign matter underneath the product i s general reason f o r it not adhering t o the building". Further, i n h i s opinion, proper preparation was not done -- T I - k Jc M y there w a s other foreign matter, paint, grease o r something t h a t had not been cleaned off so t h a t paint did not adhere t o it and it j u s t came off i n big flakes and I assume t h a t t h a t was due t o some foreign matter being underneath the coating." Agencies r e l i e s on section 878-2-719, R.C.M. 1947, Montana's Uniform Commercial code, a s t o whether the agreement may l i m i t the buyer's remedy and c i t e s M t . States Tel. & Tel. Co. v. D i s - t r i c t Court, 160 Mont. 443, 503 P.2d 526 a s authority f o r i t s contention. See also: Whitaker v. Farmhand, Inc., Mont . - 9 P.2d 3 S t .Rep. , No. 13228, handed down by t h i s Court on August 2, 1977 , and cases c i t e d therein. The problem here i s that no such issue i s presented. The t r i a l judge found,based upon the only evidence presented, and t h i s Court finds it t o be substantial and credible, (McGuire v. American Honda Company, Mont . Y P.2d Y 34 S t . Rep. 632), t h a t Agencies warranted and guaranteed i t s work and the work was improperly performed. Further, a l l the dtidence i n the record indicates f a i l u r e t o properly prepare the log surface was the cause of the Tex-Cote coating t o chip, flake, and peel. Therefore, the question of limitation of remedies i n the contract i s not presented on t h i s appeal. The cause of the defect was the breach of the express warranty. As t o whether Waneta McDougall prevented performance, again a l i i s the evidence i s t h a t she did not. ~ c ~ o u g a l l s ' expert t e s t i f i e d it would be necessary t o clean the building and coat it with a primer and sealer and then repaint. These a r e the exact things Agencies agreed t o do in the o r i g i n a l agreement and, according t o the only testimony presented, it did not do. There i s no testimony Agencies i n 1971 agreed t o s t a r t over and re-do the job. Therefore t h a t issue f a i l s . Mitchell v. Carlson, 132 Mont. 1, 313 P.2d 717. As a secondary issue the amount of the judgment i s questioned. The prayer of Prudential was f o r $2,684.71, i n t e r e s t , costs and attorney fees. Summary judgment was granted. N o appeal was taken from the summary judgment. P l a i n t i f f s t a t e s a balance of $2,684.71 a s of June 18, 1969. From the pleadings, not amended, the most t h a t could be awarded would be $2,684.71 plus i n t e r e s t . There was no testimony a s t o attorney fees i n the s u i t by Prudential against McDougalls, and there i s no pleading o r evi- dence of attorney fees by McDougalls against Agencies. Compton v. A1cor11, Mont . ----- , 557 P.2d 292, 33 St.Rep. 118.5; F i r s t Security Bank of Bozeman v. Tholkes, IvIon t . 547 P.2d 1328, 33 St.Rep. 341. Therefore, the judgment of the t r i a l court i s affirmed a s modified. The judgment f o r Prudential against McDougalls s h a l l > . a be i n the amount of $2,684.71, with i n t e r e s t from June 18, 1969 t o Yarch 19, 1976, together with i n t e r e s t a t 6% on t h i s amount i l r ~ r i l paid. Judgment s h a l l be entered i n the same amount against t h i r d p a r t y defendant Building Agencies, Inc. A Chief J u s t i c e

August 2, 1977

84ac3449-7a4f-4683-bb04-efa659c101d7

STATE v SWAZIO

N/A

13449

Montana

Montana Supreme Court

No. 1 3 4 4 9 I N THE S U P R E M E COURT O F THE STATE OF MONTANA 1977 THE STATE OF MONTANA, P l a i n t i f f and Respondent, -vs- ANTHONY MARTIN SWAZIO, Defendant and Appellant. Appeal from: D i s t r i c t Court of t h e Thirteenth J u d i c i a l D i s t r i c t , Honorable Robert H. Wilson, Judge presiding. Counsel of Record: For Appellant: Moses, Kampfe, T o l l i v e r and Wright, B i l l i n g s , Montana For Respondent : Hon. Mike Greely, Attorney General, Helena, Montana Dennis Moreen, A s s i s t a n t Attorney General, Helena, Montana Arthur W. Ayers, Jr. County Attorney, argued, Red Lodge, Montana Submitted: A p r i l 1 4 , 1977 Decided : 2 6 1977 M r . J u s t i c e Gene B. Daly delivered the Opinion of the Court. O n June 27, 1974, an Information was f i l e d i n the d i s t r i c t court, Carbon County, charging Anthony Martin Swazio with aggravated assault. The victim of the alleged assault was Deputy Sheriff Robert Peters. O n April 21, 1976, defendant was found g u i l t y by a jury verdict. Defendant was sentenced t o the s t a t e prison a t Deer Lodge, Montana, f o r a period of one year. From t h i s verdict and f i n a l judgment defendant appeals. O n June 22, 1974, a t approximately 10:45 p.m., Swazio was informed by h i s wife t h a t Deputy Sheriff Robert Peters had been t o t h e i r home during the day looking for a Steve Hull, a friend of Swazio. This upset defendant a s there existed bad blood between he and Deputy Sheriff Peters. Swazio drove t o the Peters' residence with a Bruce Brush. Brush accompanied defendant t o show him where Deputy Sheriff Peters lived. Swazio parked h i s car i n front of the Peters' residence, then walked through a gate i n the fence enclosing the house and yard, and to the door of the house, Brush remained inside defendant's vehicle the e n t i r e time. The wife of Deputy Sheriff Peters, Phyllis Peters, answered the door. Swazio reques tEd t h a t Peters come out of the house and speak with him. Deputy Sheriff Peters came outside and went through the gate of the fence and there met defendant. A t t h i s time an argument ensued between them regarding the of c o n d u c t / ~ e p u t ~ Sheriff Peters e a r l i e r t h a t day and both were yelling a t each other. Phyllis Peters, seeing the discussion had escalated into a violent argument, came from the house with a gun and f i r e d it into the a i r , apparently i n an attempt t o stop t h e argument. The f i r i n g of the shot had no e f f e c t on defendant o~ 3eputy Peters. A t t h i s time Depucy bheriff Peters took the gun from h i s wife and informed defendant he was going t o place him under a r r e s t f o r disturbing the peace. A t t h i s point there i s con- f l i c t i n the f a c t s . Peters and h i s wife t e s t i f i e d t h a t a s Peters was about t o f r i s k defendant, defendant made a sudden move turning toward Peters. The gun discharged and defendant was shot i n the back. Prior t o the shooting Deputy Peters and h i s wife claim defendant assaulted Deputy Sheriff Peters by s t r i k i n g him with h i s f i s t . Defendant t e s t i f i e d t h a t when Peters said he was arresting him, he threw up h i s arms, turned, and walked away from Peters toward h i s vehicle. After taking a few steps he was shot i n the back. Defendant claimed he never he struck Deputy Peters, u n t i l after/ Nas shot i n the back. As a r e s u l t of t h e shooting defendant f i l e d a c i v i l claim against the s t a t e of Montana. Defendant's attorney moved t o have any evidence of the c i v i l claim excluded from t r i a l . The motion i n limine was denied. Brush, defendant's companion, gave a statement t o Deputy Sheriff Peters soon a f t e r the incident. Brush could not be found t o be served with a subpoena t o appear a t t r i a l so defendant's attorney attempted t o introduce the statement given t o the deputy s h e r i f f i n t o evidence. The t r i a l court disanmed the introduction of the statement a t t r i a l . O n appeal defendant presents three issues f o r review by t h i s Court; 1. Whether the d i s t r i c t court erred i n denying defendant's motion i n limine, thereby allowing evidence t o be presented t o the jury regarding defendant's c i v i l claim against the s t a t e of .<on tana ? 2. 'dhether the d i s t r i c t court erred i n refusing t o allow into evidence signed statements by an impartial eyewitness t o the alleged crime, Bruce Brush, i n absence of Brush's testimony? 3. Whether there was s u f f i c i e n t evidence t o support a verdict of g u i l t y ? Issue 1 concerns the t r i a l c o u r t ' s denial of the motion i n Limine. This issue cannot be reviewed due t o the voluntary actions taken by defendant's attorney. After the defendant's motion i n limine was denied h i s attorney brought the matter of the c i v i l s u i t before the jury while questioning defendant on d i r e c t examination. The rule concerning preservation of exceptions and objections a t t r i a l i s s e t f o r t h i n 5 Am J u r 2d, Appeal and Error 5562. It s t a t e s : I I Even where exceptions have been duly taken t o a matter the appellate court may refuse review where the exception i s deemed waived by subsequent inconsistent conduct of the party complaining.;k * *" I n t h i s case defendant waived h i s r i g h t t o object t o the evidence by the introduction into the t r i a l of the subject matter t h a t the motion i n limine was meant t o suppress. Defendant cannot object t o the consequences of h i s own voluntary actions. Croteau v. Allbee, 117 V t . 332, 9 1 A.2d 803; Frederick v. Gay's Express Inc., 1 1 1 V t . 411, 17 A.2d 248. Defendant i n h i s Issue 2 contends the court erred i n not allowing the statement taken from Bruce Brush t o be admitted i n t o evidence. He r e l i e s on the doctrine of r e s gestae and the b e s t and secondary evidence rule. Res gestae i s recognized a s an exception t o the hearsay rule. The statement Brush gave t o Deputy Peters was a narrative statement followed by questions and answers. This Court i n Sullivan v. Metropolitan Life Ins. Co., 96 Mont. 254, 268, 29 P.2d 1046, stated: ''9; * ; ? N o precise rule has been, nor can be, formulated for determining what statements a r e a p a r t of the r e s - gestae; consequently, each case i n i n a sense a law unto i t s e l f and must be decided on i t s p a r t i c u l a r f a c t s , so t h a t precedents a r e valuable more £or the purpose of i l l u s t r a t i o n than f o r establishment of a rule which may be generally followed." 96 Mont. 268. The amount of time between the incident and the time the statement was taken by the deputy sheriff i s not c l e a r from the record, however it does appear the statement was completed within an hour o r two a f t e r the incident occurred. This Court in Sullivan said: "The element of time elapsing a f t e r the accident and before the utterance sought t o be proved i s not decisive, but important.'' 96 Mont. 268. Therefore a lapse of time does not automatically exclude hearsay statements from the res gestae rule. However, the lapse of time taken i n combination with other factors may well indicate the rule i s not applicable t o the statement. This Court i n State v. Newman, 162 Mont. 450, 457, 513 P.2d 258, divided the r e s gestae r u l e into four categories: " g c * * I n modem usage the Ires gestae' exception actually involves four d i s t i n c t types of cases (1) excited utterances, (2) declarations of present sense impressions, (3) declarations as t o s t a t e of mind, and (4) declarations a s t o body condition. I n each of these instances the basic rationale underlying the ' r e s gestae' exception t o the hearsay rule i s t h a t the statements a r e spontaneous and contemporaneous, lending a p a r t i c u l a r r e l i a b i l i t y of trustworthiness t o the statement. 162 Mont. 457. The only category i n t o which Brush's statement could f a l l is the second: declaration of present sense impressions. Brush' s statement may have been describing an event, but there was no showing the statement was made while the speaker was laboring under excitement and before he.had time t o r e f l e c t o r otherwise come within the rule enunciated by t h i s Court. Therefore, the statement was not a declaration t h a t formed p a r t of the transaction and there was no abuse on the p a r t of the d i s t r i c t court i n denying rhe admission of hearsay evidence. Counsel f o r defendant also argues i n support of the admiss- i b i l i t y of Brush's statement under the best and secondary evidence rule. Counsel argues since Brush was outside of the s t a t e of Montana, t h a t h i s statement t o the deputy s h e r i f f was admissible as the best-evidence available. 2 Jones on Evidence, 6th Ed., § 7:2, s t a t e s : "The best evidence r u l e is generally, i f not almost exclusively, invoked where proof i s t o be made of a record i n writing o r where there i s an attempt t o substitute o r a l for documentary evidence of the content of .a writing. I n f a c t it has been said t h a t the term 'best evidence' i s a convenient short description of the rule governing proof of the contents of a writing." The question of the a p p l i c a b i l i t y of the best evidence r u l e , other than t o documents, has not been reached d i r e c t l y i n Montana and has not been extended t o a s i t u a t i o n of t h i s kind. Issue 3 i s whether there was s u f f i c i e n t evidence t o support a verdict of g u i l t y ? The t e s t i s whether there i s s u f f i c i e n t credible evidence, i f believed by the jury, t o support i t s verdict. I f there i s s u f f i c i e n t credible evidence the verdict w i l l stand. State v. Farnes, M o n t . , 558 P.2d 472, 33 St.Rep. 1270, 1274. The evidence here i s i n conflict. Deputy Sheriff Peters and h i s wife claim Peters was struck by defendant before defendant was shot, yet neither one could agree on how many times he was struck nor exactly when. Defendant, on the other hand, claims he did not h i t Peters u n t i l a f t e r he was shot. This was the base l i n e testimony of a l l witnesses t o the incident. I n S t a t e v. Fitzpatrick, 163 Mont. 220, 226, 516 P.2d 605, t h i s Court s e t f o r t h i t s position i n determining questions of sufficiency of the evidence : "As t h i s Court has held many times over, the jury i s the f a c t finding body i n our system of jurisprudence, and i t s decision i s controlling. The jury i s f r e e t o consider a l l evidence presented and t o pick and choose which of the witnesses it wishes to believe. I f s u f f i c i e n t testimony was introduced, a s well a s exhibits t o j u s t i f y the j u r y ' s findings, then i t s conclusions w i l l not be disturbed unless i t i s apparent there was a c l e a r misunder- standing by the jury o r t h a t there was a misrepre- sentation made t o the jury.!' 163 Mont. 226. Defendant contends the uncontradicted physical evidence in t h i s case was ignored by the jury. The general law i n Montana i s t h a t uncontradicted credible evidence cannot be disregarded by a court o r by a jury. Holenstein v. Andrews, 166 Mont. 60, 530 P.2d 476. I n reviewing the d i s t r i c t court record there i s considerable physical evidence which supports defendant's conten- tions, but t h i s evidence was not uncontroverted evidence. Both b a l l i s t i c s witnesses t e s t i f i e d defendant was probably shot from a t l e a s t 36 inches away, yet neither expert could rule out the p o s s i b i l i t y of a contact shot. The jury i s not bound by expert opinion evidence. In short, the jury is the t r i e r of f a c t . In S t a t e v. Glidden, 165 Mont. 470, 473, 529 P.2d 1384, t h i s Court stated: "In a criminal prosecution the weight of evidence and c r e d i b i l i t y of the witness is a matter exclusively within the province of the jury and should not be disturbed by a court of appeal." While defendant's story, i f believed, would lead t o the conclusion he was not g u i l t y of aggravated a s s a u l t , the jury was not required t o believe the testimony of the defendant o r the testimony of the expert witnesses. Viewing the evidence i n the l i g h t most favorable t o the s t a t e , these factors support the j u r y ' s conclusion: (1) Deferlclant went t o the Deputy s h e r i f f ' s home a t approximately 1 1 : O O p.m. because he was extremely upset with Deputy Peters' conduct; (2) they proceeded t o have a heated argument; (3) the o f f i c e r was placing defendant under a r r e s t , and (4) Peters and h i s wife t e s t i f i e d defendant struck Deputy Sheriff Peters p r i o r t o the time defendant was shot. There being no reversible t r i a l e r r o r and the record does reveal s u f f i c i e n t substantial and credible evidence t o support the verdict of the jury, the judgment of the t r i a l court is affirmed. W e Concur: chief J u s t i c e , J u s t i c e s .

July 26, 1977

7868aefa-1af2-4b0b-bff6-9abf77a1b8a3

NILES v CARBON COUNTY

N/A

13724

Montana

Montana Supreme Court

No. 13724 IN THE SUPREPIE COURT OF THE STATE OF MONTANA FRANK K . NILES, Plaintiff and Appellant, -vs- CARBON COUNTY et al., Defendants and Respondents, and MIKE M. VUKELICH, Defendant, Respondent and Cross-Appellant Appeal from: District Court of the Thirteenth Judicial District, Honorable Robert H. Wilson, Judge presidinq. Counsel of Record: For Appellant: Joseph E. Mudd argued, Bridger, Montana Reno and Dolve, Billings, Montana For Respondents: Ayers and Alterowitz, Red Lodge, Montana Michael Alterowitz argued, Red Lodge, Montana Submitted: June 10, 1977 Decided : q [ i ~ 1 - c r -- a -. is, i Clerk Mr. Justice Frank I. Haswell delivered the Opinion of the Court. This action involves defendant's motion to dismiss plain- tiff's appeal from a summary judgment in defendant's favor. On July 7, 1971, Carbon County assigned to plaintiff, Frank K. Niles, a tax sale certificate for certain real property which had previously been struck off to the county. On August 14, 1973, plaintiff filed action to obtain a tax deed from the county and to quiet title to the property. Plaintiff named Mike M . Vukelich, Trustee, and others as defendants. The action was later dismissed against all defendants save Vukelich. In a January 6, 1977 hearing on motions for summary judgment, the district court found that Vukelich had properly redeemed the property. It granted summary judgment in Vukelich's favor, directing the Carbon County treasurer to issue a certifi- cate of redemption to Lila K. Vukelich, successor trustee to Mike M. Vukelich, and directing the clerk of district court to pay plaintiff the money (representing taxes, penalty and interest) which Vukelich had paid into court. On January 12, 1977, plain- tiff's cocounsel instructed the clerk as to the desired method of payment. The clerk issued two warrants both of which were subsequently cashed. On February 14, 1977, plaintiff filed notice of appeal. Lila K. Vukelich filed notice of cross-appeal. Briefs were filed and argument set for Friday, June 10, 1977. On June 8, 1977, defendant filed a motion for an order dismissing plaintiff's appeal claiming the issue was moot because plaintiff and his attorneys had accepted payment of the redemption money. Defendant accompanied her motion with an affidavit of the clerk of the district court for Carbon County stating that the warrants issued to plaintiff and plaintiff's attorneys had been cashed and that no attempt had been made to tender the proceeds into court. Oral argument was heard on plaintiff's appeal and defendant's cross-appeal; briefs were requested on the motion to dismiss plaintiff's appeal. Rule 7 (a) , M . R.App. Civ.P. , states: "Upon entry of a judgment or order a party may apply to the district court on notice or ex parte for a stay of the execution of the judgment or order. The court in its discretion may grant said stay for such period of time and under such condi- tions as the court deems proper * * * Upon service of notice of appeal, if the court has made no such order * * * [the appellant] may present to the dis- trict court and secure its approval of a super- sedeas bond * * *." This Court in Gallatin Trust & Savings Bank v. Henke, 154 Mont. 170, 177, 461 P.2d 448, held: " * * * a supersedeas bond to preserve the rights of the unsuccessful party may be required and fail- ure to post it makes the rights of the parties subject to execution, subsequent satisfaction of the judgment and possible mootness so far as appeals are concerned. * * * " * * * Rule 7(a) clearly provides the only methods of staying judgments." 154 Mont. 177 After entry of judgment against him, plaintiff neither applied for a stay of execution nor filed a supersedeas bond; instead, he accepted and cashed the warrants issued to him. The general rule is: " * * * the right to accept the fruits of a judg- ment and at the same time to prosecute an appeal from it are not concurrent; on the contrary, they are wholly inconsistent rights. The election of one necessarily excludes the enjoyment of the other." Peck v. Bersanti, 101 Mont. 6, 8, 52 P.2d 168, 169; In re Black's Estate, 32 Mont. 51, 53, 79 P. 554. This rule is subject to the exception that: " * * * where the reversal of a judgment cannot possibly affect an appellant's right to the benefit accepted under a judgment, then appeal may be taken and will be sustained despite the fact that the ap- pellant has sought and secured such benefit." Peck v . Bersanti, 101 Mont. 6, 9, 52 P.2d 168; In re Black's Estate, 32 Mont. 51, 79 P.2d 554. Plaintiff's case does not come within the exception to the general rule. Plaintiff is entitled either to a tax deed to the property or to a sum representing the delinquent taxes and penalties he had paid plus interest. He may not have both. Although this Court has not faced this factual situation before, other jurisdictions have. McKain v. Mullen, 65 W.Va. 558, 64 S.E. 829. In McKain, Mullen purchased real estate at a tax sale for which he later received a tax deed. McRain sought to set aside Mullen's deed. The court entered a decree annull- ing the deed and directing the clerk to pay Mullen the amount necessary to reimburse him. Mullen accepted this amount, but later appealed. McKain moved to dismiss the appeal. The West Virginia court reasoned: "The money he [Mullen] accepted represented what he had paid for the title declared void. It was tendered him by the decree as essential to the ac- tion of the court in setting aside the tax deed. Its tender to him was a substantial portion of the decree made upon the equities arising between the parties. That portion of the decree was inseparably connected with the order annulling the tax title. And so inseparably was it connected therewith that it could not be recognized by Mullen without his recognizing the decree annulling his tax deed. As the decree stood, it gave him benefit. True, it gave him not what he had sought in the litigation, but it gave him the fruits of the controversy that the court in equity and law deemed to be his. He voluntarily accepted these fruits, yet he seeks by appeal to destroy the rights under the decree belong- ing to the other party. He cannot have the one and deny the other. The acceptance of the taxes tendered and deposited was a recognition of McKain's title, and it is inconsistent with the prosecution of this appeal which attacks the title. * * *." McKain, 64 S.E. 830. We find the reasoning of McKain applicable to the present case. Niles' acceptance without reservation of what the judgment gave him was implied recognition of the validity of the judgment against him. "'Any act on the part of [an appellant] by which he impliedly recognizes the validity of a judgment against him operates as a waiver of his right to appeal therefrom * * * I " . McKain, 64 S.E. 831. See also: Freeman, 2 Law of Judgments, In his cross-appeal defendant claims a reasonable attorney fee and seeks damages under Rule 32, M.R.App.Civ.P., for a frivolous appeal by plaintiff. Vukelich's original answer, filed October 10, 1973, did not contain a pleading for reasonable attorney fees, but it did include a prayer for (among other things) defendant's " * * * costs and disbursements herein expended" and for " * * * such other and further relief as the Court may deem proper." On March 3, 1975, Vukelich's attorney filed an amended answer which alleged a separate defense. his amended answer did not contain a pleading for reasonable attorney fees nor did it con- tain any prayer. On December 29, 1976, ~ukelich's new attorney moved for an order granting defendant leave to file a second amended answer "to include a prayer for reasonable attorney fees." The district court file reflects the district court took no action on this motion. On January 6, 1977, the district court granted summary judgment in defendant's favor allowing defendant "her costs of suit amounting to $15.00." Defendant cross-appealed claiming she was entitled to a reasonable attorney fee. Rule 54(c), M.R.Civ.P., provides in part: " * * * Except as to a party against whom a judgment is entered by default, every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in his pleadings." We recently considered this rule in Smith v. Zepp, Mont. , P.2d , 34 St.Rep. 753, (1977). In Smith, the plaintiffs ' only prayer was for forfeiture of a contract. Although the facts at trial showed that the plaintiffs were not entitled to for- feiture, they did show plaintiffs were entitled to a damage award. We held that Rule 54(c) required such an award even though the plaintiffs had not prayed for it. The same rule is applicable here. Section 84-4167, R.C.M. 1947, provides that in an action for a tax deed "The court shall allow the successful party his costs to be fixed by the court including a reasonable attorney's fee in all cases where the county is not the applicant." (Emphasis added.) Defendant was the successful party. Even though defendant had not prayed for a reasonable attorney fee, the district court under Rule 54(c), M.R.Civ.P., should have allowed her one. The cause must therefore be remanded to determine a reasonable attorney fee in accordance with the guidelines enumerated in Crncevich v. Georgetown Rec. Corp., 168 Mont. 113, 541 P.2d 56. Plaintiff contends he too should be allowed a reasonable attorney fee as a "successful party" because, while he did not obtain a tax deed, he was reimbursed for the taxes, penalties, and interest he had previously paid. Plaintiff's contention is without merit. The statutes under which he brought suit were ones to obtain a tax deed. Sections 84-4162 to 4170, R.C.M. 1947. The "successful party" designated in section 84-4167, the statute providing for attorney fees, is the party who is success- ful in obtaining the tax deed. This plaintiff was not. Finally, defendant claims thatshe should be awarded damages for a frivolous appeal by plaintiff. Rule 32, M.R.App.Civ.P., states: "If the Supreme Court is satisfied from the record and the presentation of the appeal, that the same was taken without substantial or reasonable grounds, but apparently for purposes of delay, only, such damages may be assessed on determination thereof as under the circumstances are deemed proper." The Court does not feel that plaintiff's appeal was without sub- stantial or reasonable grounds and for purposes of delay only. No damages shall therefore be awarded to defendant. Plaintiff's appeal is dismissed. The cause is remanded to the district court on defendant's cross-appeal with instructions to hold a hearing to fix reasonable attorney fees for the services of defendant's attorneys in the district court to be included in the judgment. Justice Chief Justice /

August 11, 1977

f9222c79-dce8-471b-91b2-cd455f19f68a

STATE EX REL CHEMICAL TRANSPORT v

N/A

13557

Montana

Montana Supreme Court

No. 13557 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 STATE ex rel., CHEMICAL TRANSPORT et al., Relator and Appellant, -vs- GORDON E. BOLLINGER et al., Respondent and Respondent. Appeal from: District Court of the First Judicial District, Honorable Gordon R. Bennett, Judge presiding. Counsel of Record: For Appellant: Scribner and Huss, Helena, Montana A. W. Scribner argued, Helena, Montana For Respondent: Geoffrey L. Brazier argued, Helena, Montana Charles H . Dickman, Helena, Montana Robert Smith argued, Helena, Montana Submitted: April 20, 1977 Decided: AUG 2 2 1 9 ~ Filed: 'AUG 2 2 1 9 n M r . Justice Gene B. Daly delivered the Opinion of the Court. Relator appeals from the order and f i n a l judgment of the d i s t r i c t court, Lewis and Clark County. The d i s t r i c t court order granted the Consumer Counsel's motion t o dismiss relator's application for w r i t of mandate. Judgment was entered i n favor of the Consumer Counsel, intervenor respondent here. Relator i s a motor vehicle common c a r r i e r operating i n interstate and intrastate commerce. I t s intrastate operations are conducted under certificates issued by the Montana Public Service Commission and under the provisions of T i t l e 8, Chapter 1, Revised Codes of Montana. O n June 26, 1975, relator f i l e d with the Public Service Commission i t s Supplement No. 6 t o Commodity Tariff No. 2(A), specifying proposed increases in intrastate motor carrier rates on acid chemicals and other commodities, t o be effective August 1, 1975. O n or about the time of f i l i n g i t s Supplement No. 6, relator also f i l e d i t s sworn statements and exhibits supporting the proposed changes and revisions. O n July 22, 1975, the Public Service Commission entered a suspension order, pursuant t o section 8-104.5, R,CbM.1947, suspending r e l a t o r ' s proposed t a r i f f schedule, pending a hearing as t o the reasonableness of the proposed increased rates. The Public Service Commission s e t the matter to be heard on November 18, 1975. In i t s pleadings t o the Public Service Commission, a t the administrative level, the Consumer Counsel requested a public hearing. Prior t o the date of the hearing, the Consumer Counsel served written interrogatories upon relator demanding the same be answered before the hearing. Relator objected t o the interro- gatories. The Public Service Commission notified the parties that oral argument upon the objections would be heard a t the time s e t for hearing on the merits. O n the date s e t for hearing, the Public Service Commission heard o r a l arguments on the objections t o interrogatories, but declined t o hear the case on i t s merits and postponed,the matter to a date and time t o be s e t by the commission. A t that time 119 days had elapsed since the date of the order suspending relator's new t a r i f f schedules. During oral argument the Public Service Commission ehairman asked r e l a t o r ' s counsel whether relator was willing t o waive the 180 day period of suspension. Counsel replied relator was unwilling t o do so. The matter was never rescheduled for hearing. O n December 3 , 1975 (15 days a f t e r the prior hearing and 134 days a f t e r the suspension order) the Public Service Commission overruled relator's general objections t o the interrogatories. The Public Service Commission did not notify the parties of t h i s action u n t i l January 5, 1976 (33 days a f t e r the action was taken and 167 days a f t e r the suspension order). The ruling purported t o give relator u n t i l January 19, 1976, (181 days a f t e r the suspension order) to answer o r object t o the Consumer Counsel's interroga- tories. B y l e t t e r dated January 16, 1976, relator advised the Public Service Commissionf "Please be advised that the 180 day-: period which i s prescribed i n section 8-104.5, R.C.M. 1947, expires on January 18, 1976. N o hearing having been held nor order issued within such period, pursuant t o the afore- mentioned section, the t a r i f f revisions proposed i n t h i s docket are deemed approved and effective as filed. "For t h i s reason we consider the interrogatories submitted i n connection with a hearing in t h i s proceeding as moot, and do not intend t o respond to them." Relator thereafter tendered t o the Public Service Commission for f i l i n g i t s Supplement No. 7, notifying customers of the increased rates. By l e t t e r dated January 21, 1976, the Public Service Commission rejected Supplement No. 7 and ordered relator: "* * * not t o assess or collect the f u l l amount of the various chemical r a t e increases requested * * * u n t i l such time as the Montana Public Service Commission makes a f i n a l determination as t o the validity and lawfulness of such increase i n rates. * * * "* * * the Commission feels the interrogatory question i s s t i l l a t issue." O n January 28, 1976, relator f i l e d an application for w r i t of mandate i n the d i s t r i c t court. Upon issuance of the w r i t of mandate or other appropriate w r i t , relator sought the d i s t r i c t court's directive (1) instructing the Public Service Commission t o accept for f i l i n g relator's Supplement No. 7 to i t s Commodity Tariff No. 2(A), thus implementing the rate increases provided for i n Supplement No. 6; (2) that judgment be entered i n favor of relator for reasonable attorney's fees and costs; and ( 3 ) that respondents be ordered t o appear and show cause why: the relief sought should not be granted. The d i s t r i c t court issued an order t o show cause compelling respondents t o appear before the court on February 11, 1976. O n February 6, 1976, the Consumer Counsel f i l e d a motion to intervene and a motion t o dismiss relator's petition on the ground it failed t o s t a t e a claim upon which r e l i e f could be granted. The d i s t r i c t court granted Consumer Counsel's motion t o dismiss and judgment was entered i n favor of Montana Consumer Counsel, the intervenor respondent. The judgment of the d i s t r i c t court held: "* * * that insofar a s the noted provisd of Section 8-104.5 works or can work t o shut out a hearing re- quested by the consumer counsel it conflicts with out constitutional and legal provisions having t o do with the counsel." The parties t o t h i s action list several issues for review. However, w e find the central and controlling issue is whether the Public Service Commission is justified i n refusing t o accept for f i l i n g relator's proposed t a r i f f schedule on the grounds section 8-104.5 conflicts with the Montana Constitution, 'the Montana Consumer Counsel Act, the Montana Administrative Procedure Act and other pertinent statutory provisions affecting the Montana Consumer Counsel. Sections 8-104-;I., 8-104.2 and 8-104.5, R.C.M. 1947, s e t forth the procedures for revising motor vehicle: common c a r r i e r r a t e schedules: "8-104.1. Board's duty t o f i x rates. It shall be the duty o f t h e board t o f i x , a l t e r , regulate and determine j u s t , f a i r , reasonable, nondiscriminatory, and suffi- cient rates, fares, charges, classifications, and rules - - of service for the operation of class A and B motor carriers within t h i s state. The board also may f i x and determine reasonable maximum or minimum t a t e s for the operations of any class C motor c a r r i e r when the same are required for the best interests of public transporta- tion." (Emphasis added. ) "8-104.2. Rate schedules, f i l i n g with board. Every class A o r B motor - carrier holding a c e r t i f i c a t e must maintain on f i l e . with the board a f u l l and complete schedule of its rates, fares, charges, classifFcations, rules of service, and any and a l l t a r i f f provisions relating t o such rates, fares, charges, classifications, o r rules. Every schedule on f i l e with and approved by the board on the effective date of t h i s a c t shall remain i n f u l l force and effect u n t i l changed o r modified by the board or by the c a r r i e r with the approval of the board. "No change, modification, alteration, increase, o r decrease i n any rate, fare, charge, classification, or rule of service shall be made by any motor carrier without f i r s t obtaining the approval of the board. The board shall prescribe rules and/or regulations providing for the form and style of a l l schedules and t a r i f f s and for the procedures t o be followed i n f i l i n g or publishing any changes o r modifications of the same." (Emphasis added.) "8-104.5. Changes, revisions of r a t e schedules, how made. N o motor carrier shall change or revise any r a t e , fare, charge, classification, or rule of service contained i n i t s shedule without f i r s t obtaining approval therefor from the board. Such changes o r revisions shall be made by f i l i n g with the board the t a r i f f sheet o r sheets con- taining such changes o r revisions, plainly stating the change o r changes, o r revision o r revisions, t o be made; provided further, that the public s h a l l be provided with such notice of the proposed changes o r revisions as the board shall, by rule, require. The t a r i f f sheet o r sheets containing such changes or revisions shall be deemed approved and effective t h i r t y (30) days a f t e r the same are f i l e d unless the proposed revisions or changes are sus- pended o r disallowed by the board prior t o the expiration of the t h i r t y (30) day period; provided however, that the board may, for good cause, allow any change or revision t o become effective on less than t h i r t y (30) days a f t e r the f i l i n g thereof. Upon f i l i n g such changes or revisions, a l l t a r i f f sheet or sheets, when suspended by the board, must be supported by such prepared testimony and exhibits from the motor carrier a s w i l l support such changes o r revisions. The prepared testimony and exhibits must be f i l e d with the commission t h i r t y (30) days a f t e r the effective date of such suspension. Such testimony and exhibits may be supplemented prior to, or a t the time of hearing, and supplemental exhibits may be f i l e d a f t e r the close of the hearing a t the direction o r with permission of the commission. "Upon i t s own i n i t i a t i v e , or upon the complaint of any interested party f i l e d with the board within twenty (20) days a f t e r the date upon which a change or revision of any r a t e , fare, charge or classification is f i l e d with the board, the board may suspend the operation of such rate, fare, charge, o r classification for a period not to exceed one hundred eighty (180) days, provided however that the order directing such suspension must be issued by the board not less than two (2) business days prior t o the proposed effective date; and provided further, that the motor carrier o r carriers , - "_filing; such rate, fare, charge, o r classification s h a l l be given prompt notice by the complaining party mailing a copy of the complaint concerning such proposed change o r revision t o the carrier or publishing agent, and such c a r r i e r o r carriers also s h a l l be given an opportunity t o reply t o any such complaint. I f the proposed change o r revision i s i n a t a r i f f issued by a t a r i f f publishing bureau for a motor carrier o r carriers, notice t o such bureau of any complaint w i l l constitute notice t o the participating carriers i n such t a r i f f . When the suspension of any proposed change or revision i n a t a r i f f i s ordered by the board, it s h a l l also order a public hearing t o consider the reasonableness of the proposed change or revision; due notice shall be given for such hearing t o a l l known interested,or affected persons and the same shall be allowed t o appear and present evidence. After considering the evidence presented a t such hearing, the board shall issue an order approving, denying, or modifying the proposed change o r revision; provided however, that unless such hearing is'held and such order is issued within one hundred eighty (180) days from the date upon which the suspension was ordered, the proposed chanp.e o r revision shall be deemed approved and effective as filed." (Emphds addedJ Relator contends the plain, clear and unambiguous language of section 8-104.5- specifies t a r i f f revisions become effective 30 days a f t e r they a r e f i l e d , unless within that period the Public Service Commission issues a suspension otder, which may cover a period of no longer than 180 days. The Public Service Commission i s empowered t o approve, deny o r modify the submitted t a r i f f schedules, within the suspension period, a f t e r notice and hearing. Unless a hearing i s held and an order issued by the Public Service Commission, the t a r i f f revisions are deemed approved and effective as filed. Since the Public Service Commis-' sion did not hold a hearing i n the instant case, within 180 days from the date the suspension was ordered, relator concludes a w r i t of mandate should be issued compelling the Public Ggrvice Commission t o accept for f i l i n g , a s approved and effective, r e l a t o r ' s t a r i f f schedule. Respondents argue "changing legal relationships i n t h i s case1' a c t t o amend or modify the 180 day suspension rule i n the Motor Carrier Act when the 180 day rule deprives the Consumer Counsel of its right t o a hearing. Respondents specifically c i t e : (1) A r t . 11, Section 8, 1972 Montana Constitution, which insures the right of public participation i n the operation of s t a t e agencies prior t o f i n a l decision; (2) A r t . X I I I , Section 2, 1972 Montana Constitution, which establishes the office of Consumer Counsel for the representation of consumer interests before the Public Service Commission, and (3) the Montana Adminis- t r a t i v e Procedure Act a s the catalysts precipitating the changing roles i n the field of u t i l i t y and transportation r a t e regulation. We believe respondents have incorrectly characterized the issue in this case as a conflict between statutory mandat~s and constitutional guarantees. The present action arose only be- cause the Public Service Commission failed to hold a procedural hearing within the 180 day statutory limitation. The sole obstacle which confronted the Public Service Commission was a determination of whether or not relator was compelled to answer written interrogatories submitted by the Consumer Counsel. We fail to see how such a deterent could be the basis for the Public Service Commission failing to timely schedule the requested procedural hearing. The Montana legislature Eixed 1 8 0 days as the maximum period of suspension. It seems clear to this Court that our extension of that period would in effect amend the statute and that is a matter beyond this Court's power. Art. 111, Section 1, 1972 Montana Constitution; Arrow Transportation Co. v. Southern Railway Co., 308 F.2d 181 (1962), cert. granted 371 U.S. 859, 372 U . S . 658, 83 S.Ct. 984, 10 L ed 2d 52 ( 1 9 6 3 ) . We likewise fail to find any constitutional basis for overturning the statute. Even if this Caurt was empowered to amend the 180 day period of suspension, the Consumer Counsel would have no assurance a timely hearing would be scheduled by the Public Ser- vice Commission. Without any statutory period of maximum suspension, motor carriers could incur substantial time lags in obtaining rate increases since the Public Service Commission could postpone and reschedule hearings without restriction. If the 180 day period of suspension is inadequate the proper recourse is for respondents to seek legislative amendment of the statute, not judicial interference. W e note the resultant effect of the 180 day period of suspension is not to deprive the ~onsumerOtnrn~f?zbor any other interested member of the public, a vehicle for challenging the reasonableness of a motor carrier's proposed intrastate r a t e increase. Section 8-104.4, R.C.M. 1947, i n part speci- f i c a l l y provides: "The board may, upon its own i n i t i a t i v e o r upon the complaint of any interested party, investi- gate any rate, fare, charge, classification, or rule of service contained i n the schedule of any motor carrier; i f the board shall find, a f t e r such investigation, that any such rate, fare, charge, classi- fication, or rule of service is unfair, unjust, un- reasonable, o r discriminatory, it s h a l l disallow the same and f i x a rate, fare, charge, classification, o r rule of service which shall be f a i r , just, reason- able , and nondiscriminatory, and it s h a l l order the affected motor carrier o r carriers t o conform t o such modified schedule; provided, however, that each motor carrier affected by any complaint o r investigation s h a l l f i r s t be given notice of the same and an opportunity t o be heard before the board." I n t h i s opinion t h i s Court refrains from considering either the propriety or reasonableness of relator's proposed r a t e increases. W e hold only that the Public Service Commission, i n refusing t o approve and give effect t o relator's proposed t a r i f f schedules, has failed t o perform a clear legal duty arising under the Montana Motor Carrier Act. The order and judgment of the d i s t r i c t court a r e reversed and the cause is remanded for issuance of the w r i t of mandate sought by relator, consistent with t h i s opinion. Chief Justice - . . . . . . . . . . . . . . . . M r . Justice Daniel J. Shea took no part i n t h i s Opinion. . . . . . . * . . . . . . * . .

August 22, 1977

598ccf1b-2537-4a1b-8566-876b7d5d89ee

DUNCAN v ROCKWELL MANUFACTURING CO

N/A

13675

Montana

Montana Supreme Court

No. 13675 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 ROY C. DUNCAN, Plaintiff and Appellant, ROCKWELL MANUFACTURING COMPANY et al., Defendants and Respondents. Appeal from: District Court of the Fourth Judicial District, Honorable E. Gardner Brownlee, Judge presiding. Counsel of Record: For Appellant: Jon E. Ellingson argued, Missoula, Montana James E . Congdon, Missoula, Montana For Respondents: Garlington, Lohn and Robinson, Missoula, Montana Gary Graham argued, Missoula, Montana Worden, Thane and Haines, Missoula, Montana Ronald A . Bender argued, Missoula, Montana Submitted: May 26, 1977 Decided : ~ b & 3 + -L77 - & & - s > + - - +- L::L 2 , Filed: Clerk M r . Justice John Conway Harrison delivered the Opinion of the Court. This is an appeal by the plaintiff i n a personal injury action from an order of the d i s t r i c t court, Missoula County, granting summary judgment t o a l l defendants. The complaint proceeded upon the theories of s t r i c t l i a b i l i t y i n t o r t and implied wa ranty of fitness for a particular purpose, against the I manufactur$r and r e t a i l e r of an allegedly defective, injury causing prqduct, and the sales agent of the product. The record conslists of the pleadings, interrogatories t o the de- fendants, equests f o r admissions of the defendants, p l a i n t i f f ' s Ii deposition, defendants ' motion for summary judgment together with affidavits in support and i n opposition, and the order of the d i s t r i c t court granting the motion. Plaintiff appeals the order. Plaintiff Roy C. Duncan purchased a table saw manufactured by defendant Rockwell Manufacturing Company, from defendant Allied Stores Marketing Corporation, through its agent, defendant Wallace W. Payson, i n Missoula, Montana i n April 1971. The saw was fully assembled a t the time of the purchase. Duncan was able t o observe and inspect the saw prior t o the sale and noticed no defect. The saw was then placed on its back i n the rear of Dun- can's pickup truck and taken 80 m i l e s t o the vicinity of Flathead Lake for use i n the building of a structure. The building job lasted approximately three t o four months, and the saw was used a t l e a s t once each day. N o trouble was experienced with the saw a t that t i m e . I n June 1971, following the completion of the work, Duncan again loaded the saw i n the rear of h i s pickup, laying it on its back. The saw was transported t o Missoula, placed i n a storage area behind ~ u n c a n ' s garage and remained there u n t i l September 1972. On September 25, 1972, Duncan and h i s son removed the saw from the storage area and placed it i n the center of h i s garage floor. Duncan commenced t o ripsaw a long, narrow board without checking the saw for stability. Fifteen seconds l a t e r , a s he was pushing the board through the saw, the saw t i l t e d and the board jammed. Duncan's right hand was pulled into the moving blade, resulting i n the amputation of h i s index finger below the f i r s t joint and lacerations t o h i s second finger. Subse- quent t o the accident, it was discovered one of the four legs of the table saw was one-fourth inch shorter than the other three. I n h i s deposition Duncan indicated he had been actively involved a s a carpenter since 1950 and was presently qualified a s a master carpenter. Duncan admitted he was fully familiar with both the table saw i n question and table saws generally, being aware of the dangers associated with the use of such equipment and the necessary precautions therefor. Plaintiff urges three contentions on appeal: 1. The d i s t r i c t court erred i n granting summary judgment where genuine issues of material fact exist between appellant and respondents. 2. That any defense raised by respondents, particularly that of contributory negligence, cannot be established a s a matter of law i n a summary judgment proceeding. 3. S t r i c t l i a b i l i t y i n t o r t i s properly applicable to a r e t a i l e r of a defective product. Here the legal problem presented i s essentially one of the propriety of summary judgment i n the context of a particular products l i a b i l i t y action. Rule 56(c), M.R.Civ.P., provides i n part: "* * * The judgment sought shall be rendered forth- with i f the pleadings, depositions, answers to interro- gatories, and admissions on f i l e , together with the affidavits, i f any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment a s a matter of law. * * *" This Court has held that, under Rule 56, the party moving for summary judgment has the i n i t i a l burden of establishing the complete absence of any genuine issue of material fact. Mustang Beverage Co. v. Jos.Schlitz Brewing Co., 162 Mont. 243, 511 P.2d 1; Harland v. Anderson, Mont . 9 548 P.2d 613, 33 St.Rep. 363. Further, in Kober & Kyriss v. Billings Deaconess Hospital, 148 Mont. 117, 122, 417 P.2d 476, t h i s Court quoting with approval from 6 Moore's Federal Practice 2d, 156.15, said: "'The courts hold the movant t o a s t r i c t standard. To satisfy his burden the movant must make a showing that i s quite clear what the truth i s , and that excludes any real doubt as to the existence of any genuine issue of material fact.'" This Court has also held that the party opposing the motion i s afforded the benefit of a l l reasonable inferences which may be drawn from his offered proof. Kober & Kyriss v. Billings Deaconess Hospital, supra. Certainly,, summary judgment is not a viable substitute for a t r i a l where a factual controversy exists. "* * * Summary judgment i s not a proper tool for resolving disputed issues of fact and is accordingly improper whenever material factual matter i s i n dis- pute. * * *I1 Flanagan v. Curran, 164 Mont. 262, 265, 521 P.2d 200. However, the summary judgment procedure does not end here. Since the purpose of the procedure is t o promote the stream- lining of the judicial process through a "screening-out" and elimination of questions which do not merit resolution by liti- gation, the burden is shifted to the party opposing the motion where the record reveals no genuine issue of material fact. Such burden i s as substantial as that i n i t i a l l y imposed upon the movant . ' I 1 * * * the opposing party's facts must be material and of a substantial nature, not fanciful, frivolous, 1 1 1 gauzy, nor merely suspbcious. Silloway v. Jorgenson, 146 Mont. 307, 310, 406 P.2d 167, quoting from 6 Moore's Federal Practice 2d, 156.11. A plaintiff in a products l i a b i l i t y action has the i n i t i a l burden of establishing three elements prior to recovery, regard- less of whether h i s cause of action is phrased in terms of negligence, warranty or s t r i c t liability: First, the plaintiff must show that he was injured by the product. Second, he must present proof the product was defective and unreasonably unsafe. Third, it must be demot-strated such defect existed when the product l e f t the hands of the particular defendant. Prosser Torts 4th ed. 5103. It is the third element w e are concerned with here. The theory of 5402A, Restatement of Torts 2d,adopted by t h i s Court i n Brandenburger v. Toyota Motor Sales, 162 Mont. 506, 513 P.2d 268, only imposes l i a b i l i t y on the manufacturer or seller i f : "* * * the product is, a t the time it leaves the s e l l e r ' s hands, in a condition not contemplated by the ultimate consumer, which w i l l be unreasonably dangerous to him. * * *" Restatement of Torts 2d 5402A, Comment: g. It is clear the conduct of the s e l l e r or manufacturer i n placing the product i n the stream of commerce i n a defective condition, to which the injury must be identified, is the cornerstone of the p l a i n t i f f ' s proof i n a s t r i c t l i a b i l i t y case. The law i n Montana i s well established that unless evidence is offered supporting the conclusion the product was defective a t the time it l e f t the hands of the particular seller or manufacturer, there can be no l i a b i l i t y . Barich v. Ottenstror, Mont . , 550 P.2d 395, 33 St.Rep. 481. The law w i l l not automatically presume the defect to have been extant a t the time the product was under the control of the defendant, from a mere demonstration of a possible defect a t the time of the acci- dent. Barich v. Ottenstror, supra. In other words, from the nature of the alleged defect, coupled with evidence of the surrounding circumstances, it may be reasonable to infer the defect did not exist a t the time of manufacture or sale. Upon a review of the record, w e find respondents sustained their i n i t i a l burden of proof as parties movant under Rule 56, M.R.Civ .P. , by demonstrating the product involved was subjected t o substantial wear by moving it long distances and by continued actual use. Continued usage of a product w i l l not i t s e l f prevent recovery where satisfactory proof of an original defect i s offered. However, where no direct evidence of such defect exists and proof must be made by inference, as here, continued use by plaintiff may well preclude a finding the product was defective when placed i n the stream of trade. This case is t o be distinguished from those where there is a malfunction of a recently acquired machine, which manifests a latent defect. On the contrary such a defect as is involved - 6 - here, had it exis t ~ d prior to the accident, would be obvious t o anyone using the product for even the shortest period of time upon a simple inspection. Appellant offers no real evidence i n opposition to respon- dents' proof, other than the mere assertions he was present whenever the saw was moved and was aware of the occasions of its use and the identities of the various users. As the party opposing the movant under the rule of Harland, appellant had the substantial burden of refuting the inferences drawn from undis- puted facts concerning the continued use and consequent wear upon the table saw,to raise again a genuine and material factual issue, Appellant's mere assertions do not constitute facts which are "material and of a substantial nature" such a s would prevent summary judgment, When the complaint i s viewed i n the light of appellant's statements i n his deposition and affidavit i n opposition to the motion for summary judgment, together with a l l exhibits presented, it i s apparent there is no genuine, material factual issue i n t h i s case. The d i s t r i c t court was correct i n ruling that respondents were entitled t o judgment as a matter of law, Appellant's second contention i s that under the general rule as enunciated in Hagen v. Great Northern Railway Co., 153 Mont. 309, 456 P.2d 51 and Dean v, First National Bank of Great Falls, 152 Mont. 474, 452 P.2d 402, the affirmative defense of contributory negligence raised by respondents is not susceptible to summary adjudication. While there may be exceptions i n unusual circum- stances, w e find appellant's contention to be a correct statement of the law. It cannot be disputed that in most cases the presence or absence of negligence remains a question of fact which i t s e l f requires a trial under traditional negligence principles. However where, as here, appellant's own claim is defective and respondents' demonstration of a complete absence of material issues of fact remains uncontroverted, more than adequate grounds exist for summary judgment. Therefore we need not consider whether summary judgment was the proper vehicle in the instant case for establishing contributory negligence as a matter of law. Because this case is decided on other grounds, it is not necessary to discuss the question of whether a retailer of a defective product may be held strictly liable. The summary judgment of the district court is affirmed. We Concur: Justices. Mr. Justice Frank I . Haswell, dissenting: I would vacate the summary judgment and remand the case for trial on the merits. My disagreement with the majority is on the facts, not upon the law. Admittedly the record is barren of direct testimonial proof that the defect existed at the time the saw left the hands of defendants. However, in my view the record supports an inference that it did. Proof of a defect in the product may be made through inferences drawn from && circumstantial evidence as well as by evidence. Barich v. Ottenstror, Mont . , 550 P.2d 395, 33 St.Rep. 481 (1976); Kober & Kyriss v. Billings Deac. Hosp., 148 Mont. 117, 417 P.2d 476; Brandenberger v. Toyota Motor Sales, 162 Mont. 506, 513 P.2d 268, Because this inference must be weighed against oppos- ing evidence to determine where the truth lies, this case presents a genuine issue of material fact precluding summary judgment in my opinion. Justice M r . Justice Daniel J. Shea dissenting: I concur with the dissent of Justice Haswell and I further dissent because the d i s t r i c t court used h i s own personal standards in assessing plaintiff's conduct and also because the d i s t r i c t court erred i n ruling the plaintiff was guilty of contributory negligence. The d i s t r i c t court's summary judgment order stated: "One of the instructions t h i s court always gives t o the t r i a l jury is that ' i n considering the evidence you have a right t o do so based upon your conmhon general knowledge formed by ordinary experiences and observations i n your daily affairs of l i f e . ' In this action the defendants have moved for a sunnnary judg- ment based upon the facts presented by the pleadings and a s further explained by depositions and other papers i n the court f i l e . "In determining whether or not there is a genuine issue of fact for the jury t h i s judge deems himself bound by the same rules a s would apply to the jury. This judge has been the owner of a Rockwell Table Saw for over 40 years. That saw has been used often and it has been used to cut many short pieces of both one- inch and two-inch lumber to be used a s ' j o i s t bracing. I This judge has also suffered an injury t o his l e f t index finger from that saw. This judge has often moved that e m and has always f e l t it necessary t o t e s t the stability of the saw before use and often has found it necessary to shim one leg as was done by the p l a i n t i f f ' s employee when the saw here in question was used. "The court holds a s a matter of l a w that the plaintiff was contributorily negligent i n failing t o take the most elementary precautions before attempting t o use the saw. The court also holds that a s a matter of law the injury could not have happened because of the 1/4 inch shorter leg unless the plaintiff was himself negligent i n the feeding of the material into the saw blade. "The motion for summary judgment is granted." It is clear the t r i a l court relied on his own personal experiences i n determining the standard to which the plaintiff in t h i s case must be held. While it is laudable that the d i s t r i c t court takes the precautions he does when he operates a table saw, nevertheless, this is not the standard he must use when deter- mining a motion for summary judgment. The basis of the ruling was that the plaintiff was guilty of contributory negligence. However contributory negligence is not a defense in a case involving s t r i c t liability. Prosser 9 L on Torts, 4th Ed., pp. 522-525;l~estatement of Torts 2d, $402~4, p. 356. The Restatement provides: "since the l i a b i l i t y with which t h i s Section deals is not based upon negligence of the seller, but is s t r i c t l i a b i l i t y , the rule applied to s t r i c t liability/ @#ffes. Contributory negligence of the plaintiff is not a defense when such negligence consists merely in a failure t o discover the defect in the pro- duct, or to guard against the possibility of the existence. On the other hand the form of contributory negligence which consists i n voluntarily and unreasonably proceeding to encounter a knwwn danger, and commonly passes under the name of assumption of risk, is a defense under this Section a s i n other cases of s t r i c t liability. I f the user or consumer discovers the defect and is aware of the danger, and nevertheless proceeds unreasonably t o make use of the product and is injured by it, he is barred from recovery." I n t h i s case plaintiff i n his deposition testified that he had seen the saw standing two times before he was injured, and a t neither time was he aware of its instability. It is clear that a t least on the basis of the p l a i n t i f f ' s testimony, and there was no other proof, that he was not even aware of a defect in the saw a t the time he was injured. Under these c i r - cumstances the defense of assumption of r i s k would not efen be available. Moreover, even i f it were, t h i s defense should not be subject t o summary adjudication, but rather, is a question for the jury. Williams v. Brown Manufacturing Company, I would reverse the summary judgment order and order the case be tried t o a jury on its merits.

August 11, 1977

45dd7caf-934b-4972-9a12-fc82d0730a97

Guymon v. Corrigan

2016 MT 3N

DA 15-0467

Montana

Montana Supreme Court

DA 15-0467 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 3N SHAWN GUYMON, Petitioner and Appellant, v. EDWARD CORRIGAN, Respondent and Appellee. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV 12-1084C Honorable Heidi Ulbricht, Presiding Judge COUNSEL OF RECORD: For Appellant: Shawn Guymon, self-represented, Kalispell, Montana For Appellee: David W. Randall, Tara R. Fugina, Deputy County Attorneys, Kalispell, Montana Submitted on Briefs: December 9, 2015 Decided: January 5, 2016 Filed: __________________________________________ Clerk January 5 2016 Case Number: DA 15-0467 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 Shawn Guymon appeals an order of the Eleventh Judicial District Court, Flathead County, dismissing with prejudice his petition for a writ of mandamus to compel Flathead County Attorney Edward Corrigan to investigate Guymon’s allegations of criminal activity at his former workplace. ¶3 Guymon alleges that he worked as a delivery truck driver for High Country Linens from 2003 through 2006. Guymon alleges that he was severely injured during his employment due to a faulty exhaust system in one of the delivery trucks. Guymon claims that his former manager was criminally negligent in maintaining the delivery truck. Guymon alleges that he contacted various law enforcement agencies and the Flathead County Attorney’s Office, and requested an investigation into his criminal complaint against his former manager. Corrigan declined to investigate the matter. ¶4 On September 19, 2012, Guymon filed a Petition for Writ of Mandamus asking the District Court to compel the County Attorney’s Office to investigate the alleged criminal activity. Guymon served Corrigan with a summons on May 18, 2015. On 3 May 29, 2015, Corrigan filed a Motion to Dismiss with Prejudice. The District Court granted Corrigan’s motion on July 2, 2015. Guymon appeals. ¶5 We review de novo a district court’s decision on a motion to dismiss. Hartsoe v. McNeil, 2012 MT 221, ¶ 4, 366 Mont. 335, 286 P.3d 1211 (citation omitted). A district court’s ruling on a petition for writ of mandamus is a legal conclusion that we review de novo. Jefferson Cnty. v. Dep’t of Envtl. Quality, 2011 MT 265, ¶ 16, 362 Mont. 311, 264 P.3d 715 (citation omitted). ¶6 A district court may grant a writ of mandamus if the following two requirements are met: 1) the party applying for it is entitled to the performance of a clear legal duty by the party against whom the writ is sought, and 2) there is no speedy and adequate remedy in the ordinary course of law. Section 27-26-102, MCA; Jefferson Cnty., ¶ 16. If the first requirement is not met—if no clear legal duty is established—the court is barred from issuing a writ. Best v. Police Dep’t of Billings, 2000 MT 97, ¶ 14, 299 Mont. 247, 999 P.2d 334 (citing Newman v. Wittmer, 277 Mont. 1, 11-12, 917 P.2d 926, 932 (1996)). ¶7 Under § 27-26-102, MCA, “the clear legal duty must involve a ministerial act, not a discretionary act.” Smith v. Cnty. of Missoula, 1999 MT 330, ¶ 28, 297 Mont. 368, 992 P.2d 834 (citation omitted). In Smith, we described the distinction between a discretionary and ministerial act: Where the law prescribes and defines the duty to be performed with such precision and certainty as to leave nothing to the exercise of discretion or judgment, the act is ministerial, but where the act to be done involves the exercise of discretion or judgment, it is not to be deemed merely ministerial. 4 Smith, ¶ 28 (citation omitted). ¶8 The District Court concluded that Corrigan’s decision whether to investigate Guymon’s claim was a discretionary act, not a ministerial duty. The court cited State v. Ridge, 2014 MT 288, 376 Mont. 534, 337 P.3d 80, to support its conclusion that “[p]rosecutors have wide discretion to determine when a person should be charged with a crime.” Ridge, ¶ 11 (citations omitted). The court determined that Corrigan acted within the discretion entrusted to him as a prosecutor when he made the decision not to investigate Guymon’s complaint, and as such Guymon’s petition was “barred as matter of law.” ¶9 Guymon argues that the District Court erred in allowing Corrigan “by judicial fiat” to “basically cancel[ ] the criminal act” by declining to investigate Guymon’s claim. Guymon alleges that he continues to suffer from injuries and disorders stemming from the faulty exhaust system. Guymon contends that due to Corrigan’s inaction, Guymon has been deprived of numerous constitutional rights including the right to dignity, the right to participate, and the right to know. Guymon argues that he “deserves a hearing of the facts and evidence claimed.” ¶10 We conclude that the District Court did not err in dismissing Guymon’s petition. Corrigan’s decision not to investigate Guymon’s claim was discretionary. The court noted, and it is well settled, that county attorneys have broad discretion to determine whether to prosecute an alleged offender and what offense to charge. State v. Tichenor, 5 2002 MT 311, ¶ 26, 313 Mont. 95, 60 P.3d 454 (citing State ex rel. Fletcher v. Dist. Ct., 260 Mont. 410, 414-15, 859 P.2d 992, 995 (1993)). Corrigan’s actions as a county attorney involve the exercise of discretion and judgment. As such, his decision not to investigate Guymon’s criminal complaint is not ministerial because it is not a “duty to be performed with such precision and certainty as to leave nothing to the exercise of discretion or judgment.” Smith, ¶ 28. The first requirement for a writ of mandamus—entitlement to the performance of a clear legal duty by the party against whom the writ is sought—is not met. The District Court correctly concluded that Guymon’s petition for a writ of mandamus is barred. ¶11 Moreover, Guymon’s contention that the District Court should have held “a hearing of the facts and evidence claimed” is contrary to a court’s constitutional mandate: When they are acting lawfully and within their constitutional and statutory authority, the district court may not interfere in the prosecutorial functions of the Attorney General and the county attorney—the executive branch— without violating the separation of powers embodied in Article III, Section 1 of the Constitution of the State of Montana. Fletcher, 260 Mont. at 418, 859 P.2d at 997. Therefore, the District Court correctly declined to interfere with Corrigan’s prosecutorial functions as county attorney. ¶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 application of applicable standards of review. The District Court’s interpretation and 6 application of the law were correct. Its order dismissing Guymon’s petition with prejudice is affirmed. /S/ BETH BAKER We concur: /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA

January 5, 2016

728bbdef-f9b7-4bdd-9737-980738e30882

STATE v SAWYER

N/A

13731

Montana

Montana Supreme Court

No. 13731 I N T H E SUPREME C O U R T O F T H E STATE O F M O N T A N A 1977 T H E STATE O F M O N T A N A , P l a i n t i f f and Appellant, W A D E T U R N E R SAWYER, Defendant and Respondent. Appeal from: D i s t r i c t Court of t h e F i r s t J u d i c i a l D i s t r i c t , Honorable Gordon R. Bennett, Judge p r e s i d i n g . Counsel of Record: For Appellant: Hon. Mike Greely, Attorney General, Helena, Montana Robert Yunck argued, Cut Bank, Montana For Respondent : Hooks and Sherlock, Townsend, Montana J e f f r e y M. Sherlock argued, Townsend, Montana F i l e d : Submitted: September 30, 1977 Decided: 9C-T l c 1 ' 5 - M r . Justice John Conway Harrison delivered the Opinion of the Court: The s t a t e appeals from an order of the d i s t r i c t court, Broadwater County, suppressing evidence obtained in an inven- tory search of defendant's automobile. Defendant was apprehended August 14, 1976, a f t e r Under- sheriff Michael Walrod observed him making an i l l e g a l turn on the s t r e e t s of Townsend, Montana. Officer Walrod recognized defendant and proceeded with Ted Ingersoll, a forest service director who was accompanying the officer, t o look for de- fendant. They found defendant's car a t a bar parking l o t and noticed the car had a ten-day registration sticker which had expired. The officer found defendant i n the bar and informed him he was charged with reckless driving and improper vehicle registration, and that he would be ticketed a t the s h e r i f f ' s office. Officer Walrod rode t o the s h e r i f f ' s office with de- fendant, in defendant's car. A t the sheriff' s off ice Officer Walrod informed defendant bond would be $125; $100 for reckless driving and $25 for i m - proper vehicle registration. Defendant was unable t o meet the bond, so he was booked and placed i n the county j a i l . A t that time officers impounded defendant's automobile and made a complete inventory of its contents, discovering p i l l s they believed t o be amphetamines under the driver's seat. A s a result, defendant was charged with criminal possession of dangerous drugs. The d i s t r i c t court suppressed the evidence obtained in the inventory, based on these conclusions of law: "1. That the action of the arresting officer, in setting bond without reference t o any schedule established by a judicial officer, was a violation of Section 95-1103, R.C.M. 1947, and resulted i n the i l l e g a l detention of the defendant. "2. That the inventory search of defendantt s vehicle was unreasonable in l i g h t of the Fourth Amendment t o the U.S. Constitution. 11 F i r s t , we consider the stae's contention the d i s t r i c t court erred i n its finding that b a i l was improperly s e t by a law enforcement officer. Although it is a constitutional and statutory requirement that b a i l be s e t by a judicial officer, section 95-1103, R.C.M. 1947, allows a peace officer t o accept b a i l i n limited circumstances: "Setting and accepting b a i l i n minor offenses. A justice of the peace or police judge may in h i s discretion establish and post a schedule of cash b a i l for offenses not amounting t o a felony. A peace officer may accept b a i l i n behalf of the justice of the peace or police judge in accordance with the schedule. * * *" The s t a t e argues there is no evidence in the record t o support the conclusion of the d i s t r i c t court that bond was not accepted "in accordance with the schedule" as required by section 95-1103. While the officer admitted he did not physically refer t o the bond schedule s e t by the justice of the peace, he explained: "A. O n the Reckless Driving charge 1 used what I assumed was correct, the correct bond, what the Highway Patrol had been using and what the Judge had been using i n the past . I t W e decline t o hold that a peace officer may not rely on h i s everyday experience and memory i n accepting bond i n behalf of a magistrate. There was no evidence the bond accepted by the officer i n the instant case was any different from that l i s t e d i n the bond schedule. The d i s t r i c t court finding of a violation of section 95-1103 is not supported by substantial evidence. Second, is the question of the constitutionality of the inventory search of defendant' s vehicle. The s t a t e freely admits the officers had no probable cause or even any suspicion that contraband might be found in the vehicle. N o search warrant was ever obtained. The inventory was conducted, according t o the officers who t e s t i f i e d , solely as a matter of standard police procedure for the protection of any valuable items which the owner may have l e f t i n the automobile. The constitutionality of such a search is a question of f i r s t im- pression in Montana. It is axiomatic that a search must comport with s t a t e and federal constitutional law. The reasonableness of an inventory search under the Fourth Amendment of the United States Consti- tution was discussed in the recent United States Supreme Court decision South Dakota v. Opperman, 428 U.S. 364, 96 S.Ct. 3092, 49 L ed 2d 1000 (1976). The Court i n Opperman upheld, by a 5-4 majority, an inventory search of an abandoned automobile impounded for multiple overtime parking violations. The d i s t r i c t court in the instant case factually distinguished Opperman and found a violation of the Fourth Amendment. W e need not consider the Fourth Amendment issue because we view the Montana Constitution t o afford an individual greater protec- tion i n t h i s instance than i s found under the Fourth Amendment i n Opperman. The 1972 Montana Constitution, A r t . 11, Sections 10 and 11, provide: "Section 10. Right of privacy. The right of individual privacy is essential t o the well-being of a free society and s h a l l not be infringed without the showing of a compelling s t a t e interest. "Section 11. Searches and seizures. The people s h a l l be secure i n their persons, papers, homes and effects from unreasonable searches and seizures. N o warrant t o search any place, or seize any person or thing s h a l l issue without describing the place t o be searched or the person or thing t o be seized, or without probable cause, supported by oath or affirma- tion reduced t o writing." The importance of the right of individual privacy t o the framers of the Montana Constitution i s obvious from these provisions. This Court has previously noted the significance of the explicit guarantee of the right of individual privacy contained i n Section 10, a s no comparable provision exists i n the United States Constitution. State v. Coburn, 165 Mont. It is also clear that an inventory search such a s the one considered here is a significant invasion of individual privacy. One of the officers t e s t i f i e d that the standard in- ventory search is no different in scope than a warranted search of an autoraobfle, As'was noted i n Mozzetti v. Superior Court, "It seems undeniable that a routine police inventory of the contents of an automobile in- volves a substantial invasion into the privacy of the vehicle owner. Regardless of professed benevolent purposes and euphemistic explication, an inventory search involves a thorough explora- tion by the police into the private property of an individual. I n that process suitcases, brief- cases, sealed packages, purses--anything l e f t open o r closed within the vehicle--is subjected without limitation to the prying eyes of authorities. * * *'I While we have recognized the difference, for constitutional purpoees, between an automobile and a home o r office, State v. Spielmann, 163 Mont. 199, 203, 516 P.2d 617 (19731, t h i s Court has also approved t h i s statement i n State v. Amor, 164 Mont. 182, 185, 520 P.2d 773 (1974), quoting Coolidge v. N e w Hampshire, 403 U.S. 443, 461, 91 Sect. 2022, 29 L ed 2d 564, 580 (1971): ""Phe word "automobile" is not a talisman i n whose presence the Fourth Amendment fades away and disappears, 111 A s a substantial infringement upon individual privacy, the inventory search must meet the "reasonableness" and "compelling s t a t e interest1'standards of the Montana Constitution. There are two basic justifications for an inventory search that could possibly have any application t o the instant case: (1) protection of the contents of the vehicle for the benefit of the owner; and (2) protection of the police from claims for l o s t property for which the police are responsible. While the f i r s t justification has merit in the case of an abandoned vehicle, it is particularly not helpful where, as here, the owner of the vehicle is present and can be questioned about valuable items and possible arrangements for t h e i r disposition. It would be anomalous t o justify a search of an automobile t o be for the owner's benefit, when the owner is available but does not consent t o the search. Surely the pro- perty owner is an adequate judge of the treatment of the pro- perty that would most benefit him. The inventory, then, must be based upon the protection of the officers from claims for l o s t property. While t h i s is a reasonable concern, it bears l i t t l e weight i n Montana. A s the custodian of an impounded vehicle, a police o r s h e r i f f ' s de- partment is a "gratuitous depositary" within the meaning of section 20-211, R.C.M. 1947. A s such, the depositary owes a duty of "slight Wre'' for the preservation of the property, and is l i a b l e t o the owner only for losses occasioned by "gross I I negligence. Boyd v. Harrison State Bank, 102 Mont. 94, 56 P.2d 724 (1936). Certainly t h i s duty would be satisfied by simply securing and taking an inventory of any valuable items i n plain view from outside the vehicle, rolling up the windows, locking the doors, and returning the keys t o the owner. Mozzetti v. Superior Court, supra. Viewed i n t h i s l i g h t , these justifications simply do not bear up under the countervailing force of the right of the individual t o privacy and freedom from unreasonable searches i n Montana. The Supreme Court of South Dakota, on the remand of State v. Opperman, (So.Dak.1976), 247 N.W.2d 673,675, asserted as a matter of s t a t e constitutional law: "* *' * noninvestigative police inventory searches of automobiles without a warrant must be restricted t o safeguarding those a r t i c l e s which are within the plain view of the officer's vision. * * *" This standard reasonably balances the needs of the police a s custodians of a lawfully impounded vehicle with the rights of privacy and freedom from unreasonable searches and seizures held by individuals i n Montana. W e adopt it a s applicable t o Montana constitutional law. I n the instant case the contra- band was found under a seat and admittedly was never in plain view. It was seized i n violation of the 1972 Montana Constitu- tion and was properly suppressed. To avoid misunderstanding, we wish t o note the limitations of our present hozding. W e i n no way l i m i t the right of an officer t o seize items i n plain view where the officer' s presence is justifiable. State v. Emerson, 169 Mont. 285, 546 P.2d 509, 33 St.Rep. 261 (1976); State v. Gallagher, 162 Mont. 155, 509 P.2d 852 (1973). This is not a case where there was any probable cause t o search o r where the search was i n any manner related t o the arrest. See: State v. Turner, 164 Mont. 371, 523 P.2d 1386 (1974); State v. Armstrong, 149 Mont. 470, 428 P.2d 611 (1967); State v. Houchin, 149 Mont. 503, 428 P.2d 971 (1967). W e hold only that where the sole justification for an inventory search is the fact i t is incident t o the lawful custody of an impounded vehicle and pursuant t o standard police procedure, such search must be limited i n scope t o a r t i c l e s i n plain view from outside the vehicle. The order of the d i s t r i c t court suppressing evidence is af f inned.

October 18, 1977

36ddf73a-bfc6-4e79-90fa-6875b026c474

MATTER OF BAIER

N/A

13687

Montana

Montana Supreme Court

No. 13687 I N T H E SUPREME C O U R T O F T H E STATE O F M O N T A N A 1977 I N THE M A T T E R O F T H E ESTATE OF G R A C E C. BAIER, Deceased. Appeal from: D i s t r i c t Court of t h e Eighteenth J u d i c i a l D i s t r i c t , Honorable W. W. Lessley, Judge p r e s i d i n g Counsel of Record: For Appellant: Donald Smith argued, Helena, Montana For Respondent : Drysdale, McLean and Screnar, Bozeman, Montana James J. Screnar argued, Bozeman, Montana Submitted: May 27, 1977 Decided : AUG 1 5 197? F i l e d : 1'5 j m Mr. Justice John Conway Harrison delivered the Opinion of the Court. This is an appeal by the Department of Revenue of the state of Montana, from an order of the district court, Gallatin County,- allowing a deduction from the value of property held by decedent in joint tenancy with her husband, of the total amount of the obligations in respect of such property, in determining the amount of inheritance tax due. Grace C. Baier, died on June 25, 1975. Her sole legatee under her last will and testament was her spouse Jack Baier, who was named as personal representative in the will. The bulk of her estate consisted of property, both real and personal, held in joint tenancy with Jack Baier, with a total value of $62,071.32. The estate filed Department of Revenue Form INH-2, an Application for a Determination of Inheritance Tax, and it in- cluded one-half the total value of the property in computing the clear value of the estate subject to inheritance tax. The dece- dent's taxable interest regarding the joint property was therefore listed as $31,035.66. The value of other property was also in- cluded, resulting in a total clear value of $41,483.10. The es- tate proceeded to deduct the full amount of joint and several debts owed by decedent and Jack Baier, which were secured by the joint tenancy property. The total of the claimed deductions by virtue of the joint obligations amounted to $16,973.58. Other deductions in the amount of $2,839.38 were also taken, yielding a total claimed deduction figure of $19,812.96. The estate subject to taxation was thus asserted to be $21,670.14. After taking the $25,000 exemption available to the legatee under Montana law, the estate contended the total amount taxable was reduced to zero and that no tax was therefore due or payable on the inheritance. The Department of Revenue, on October 20, 1976, filed a Certificate of Inheritance Tax indicating that $206.24 was due and payable. Its computation was based on a deduction of only one-half rather than the full amount of the debts secured by the property held in joint tenancy. Following objections to such determination by Jack Baier, as personal representative of decedent's estate, a hearing was held and an order issued permitting deduction of the full amount of the debts. The Department of Revenue appeals from this order. The sole issue on appeal is whether the total value of obligations outstanding against joint tenancy property is de- ductible in arriving at a determination of the value of the estate subject to tax. The district court held it was. We affirm. In determining the value of a decedent's estate which is subject to inheritance tax, only one-half of the value of property held in joint tenancy by decedent and another is required to be included. Section 91-4405, R.C.M. 1947, provides: "Whenever any property, however acquired, real or personal, tangible or intangible * * * inscribed in co-ownership form, or held in joint tenancy by two or more persons * * * the right of the survivor or survivors to the immediate possession or ownership is a taxable transfer. The tax is upon the transfer of de- cedent's interest, one-half or other proper fraction, as evidencdby the written instrument creating the same, as though the property to which the transfer relates belonged to the joint tenants * * * and had been, for inheritance tax purposes, bequeathed or devised to the survivor or survivors by will * * *." Inclusion of but one-half or other proper fraction in the case of a joint tenancy is recognized by Montana case law. Estate of Parks, 145 Mont. 333, 401 P.2d 83; In re McAnelly's Estate, 127 Mont. 158, 258 P.2d 741. The Department of Revenue does not contest the inclusion of only one-half the value of joint tenancy property. Certain deductions from the "clear market value" of the estate subject to taxation are made available by statute. One such deduction is allowed for " * * * debts of the decedent owing at the date of death * * *". Section 91-4407, R.C.M. 1947. The tax is then assessed upon the net estate, the personal representative being liable only for the tax chargeable on the property actually passing, or, as here, treated by law as pass- ing through his hands. This Court in Board of Equalization v . Power, 156 Mont. 100, 103, 476 P.2d 506, established what the statutory term "clear market value" is in Montana: " * * * In our view the term is self-explanatory without further definition. Market value by its very language simply means value in the open market, i.e. the price which a buyer willing but not obliged to buy would pay a seller willing but not obliged to sell, both having full knowledge of all pertinent facts affecting value. 'Clear' as used in the phrase 'clear market value' is synonymous with the word 'net,' i.e. the market value after allowable deductions. "From the foregoing it is apparent that 'clear market value' for Montana inheritance tax purposes has but one established meaning equally applicable to all estates, and such meaning does not vary when applied to different estates. A single uniform standard is established by which value is determined for inheritance tax purposes. Thus, while facts and circumstances of the individual case may affect the market value of a given item of property, they cannot vary or alter the standard of market value by which inheritance tax valuations are determined." 156 Mont. 103. Applying this standard to the instant case, where creditors have the right to enforce the entire obligation against the obligors personally or individually, Morgen & Oswood Co., Inc. v. U.S.F. & G. Co., 167 Mont. 64, 535 P.2d 170, we find that the entire amount of the obligation is a deductible "debt of the decedent" joint tenant under section 91-4407, R . C . M . 1947. The crux of this case is whether the entire indebtedness secured by property held in joint tenancy by decedent and her surviving husband is deductible in computing the net taxable estate. Although the amount of tax in controversy here is minimal, the ramifications of any other result would be far-reaching and substantial. In effect, to charge only half the indebtedness to the estate would permit inheritance taxation on a valuation that exceeds the value of the inheritance. The controlling statute is section 91-4407, R.C.M. 1947. This statute permits a deduction for inheritance tax purposes of "debts of the decedent owing at the date of death". In this case the indebtedness in controversy is evidenced by four separate and unrelated notes executed by decedent and her husband as co- makers secured by four different joint tenancy properties. All parties concede that the liability evidenced by these notes is joint and several. By reason of decedent's several liability on these notes, she was indebted for the entire balance owing on each note at the time of her death. Such unpaid balances constitute "debts of the decedent owing at the date of death" deductible under section 91- 4407. We cannot torture this statutory language to mean one-half of such debts. In construing a statute, the intention of the legislature is controlling. Section 93-401-16, R.C.M. 1947. The intention of the legislature must first be determined from the plain meaning of the words used, and if the meaning of the statute can be so determined, the courts may go no further and apply any other means of interpretation. Dunphy v. Anaconda Co., 151 Mont. 76, 438 P.2d 660, and cases cited therein. Where the language of a statute is clear and unambiguous on its face, the statute speaks for itself and there is nothing for the Court to construe. Treasure State Games, Inc. v. State of Montana, Mont . , 551 P.2d 1008, 33 St.Rep. 626; Montana Ass'n of Tobacco & Candy Distributors v. St. Bd. of Equal., 156 Mont. 108, 476 P.2d 775. The function of the Court is simply to ascertain and declare what in terms or in substance is contained in the statute and not to insert what has been omitted. Section 93-401-15, R.C.M. 1947. In short, it is simply the duty of the Supreme Court to construe the law as it finds it. Dunphy v. Anaconda Co., supra, and cases cited therein. It is not a question of adding to the statutory language "debts of the decedent" the further words "and her joint tenant" simply because the several liability of decedent on the notes makes her indebted for the entire unpaid balance. Instead, it is a refusal to add the words "one-half of the" to the statutory language "debts of the decedent". The Department of Revenue urges the use of the principle of contribution to support its argument, citing In re Kershaw's Estate, 352 Pa. 205, 42 A.2d 538, and in Matter of Estate of Hoffman, 15 Wash.App. 307, 548 P.2d 1101. Although both cases are distinguishable on the facts, the real vice of using the right of contribution to slice the deduction in half lies in the arbi- trary and unjust results it produces in individual cases. For example, if the total unencumbered value of the joint tenancy property cannot be reduced by the full amount of indebtedness owing thereon, the taxpayer is being taxed on a value exceeding his inheritance. Or, if the surviving co-maker of a note is bankrupt or otherwise judgment proof, the right of contribution is purely theoretical, illusory and meaningless. Or if the surviving co-maker's assets are encumbered by prior security agreements covering indebtedness not dischargeable for years, the value of the right of contribution is sharply reduced. We find it is unjust and contrary to the intent of the legislature to permit inheritance taxation based upon inflated and fictitious values. In summary, decedent's liability for the indebtedness arose as co-maker of the notes, not as a joint tenant in the property securing payment thereof. As co-maker, her liability was several. On the date of her death, she owed and was liable for the entire unpaid balance of the notes. This constituted a debt deductible in full under section 91-4407. To hold other- wise would violate the clear language of the statute and deny the taxpayer full deductibility of offsetting indebtedness that would reduce the gross value of the property subject to inheri- tance tax. The judgment of the district court is affirmed. ---- ................................ Justices

August 15, 1977

c4616d4e-9040-4068-866e-1a1a16ee476a

GRANGER v TIME INC

N/A

13579

Montana

Montana Supreme Court

No. 13579 I N T H E SUPREElE C O U R T O F T H E STATE O F M O N T A N A JEFFREY GRANGER and DAVID GRANGER, P l a i n t i f f s and Appellants, -vs- TIME, I N C . , a Corporation, Defendant and Respondent. .................................................... PHOEBE ANN GOLD; DR. ALLAN J. GOLD; ERNEST P. COHEN; JESSE M. COHEN; OLIVER R. LEVY; J . M . SHERICK and DIANE M. SHERICK, Husband and Wife, and J O D I , INC., P l a i n t i f f s and Appellants, -vs- TIME, INC., a Corporation, Defendant and Respondent. Appeal from: District Court of t h e Second J u d i c i a l D i s t r i c t , Honorable Robert J. Royd, Judge p r e s i d i n g . Counsel of Record: For Appellants: Henningsen, P u r c e l l & Genzberger, Butte, Montana Rex F. Benningsen appeared, Butte, Montana Corette, Smith & Dean, Butte, Montana Kendrick Smith argued, Butte, Montana For Respondents: Crowley, Haughey, Hanson, Gallagher and Toole, B i l l i n g s Montana Bruce R. Toole argued, B i l l i n g s , Montana Harold R. Medina, Jr. argued, New York, New York Submitted: May 19, 1977 Decided: A U G 3 ( 1 1977 F i l e d : RUG 3 797 Mr. Chief Justice Paul G. Hatfield delivered the Opinion of the Court. Plaintiffs appeal from the district court's ruling in this libel action granting defendant's motions for summary judgment. Defendant, Time, Inc., publishes a national weekly news magazine. The subject of this lawsuit concerns an article which defendant published in its September 22, 1975, issue, entitled "Into the Pit". The article described how the City of Butte, which owed its birth and former prosperity to first gold, and then copper mining was being relentlessly swallowed by Anaconda Company's ever expanding open pit copper mining operation. De- fendant in the article noted the economic deterioration in "the once-stylish uptown district", observed that virtually no major construction had taken place in Butte since 1962, and asserted that "Arson has become common as people who are unable to sell their devalued buildings burn them for the insurance." Each of the plaintiffs had ownership interests in either the Penney Building or the Pennsylvania Building. Fire destroyed the Penney Building on February 28, 1972, and destroyed the Penn- sylvania Building on August 20, 1975. Plaintiffs, in a letter dated October 29, 1975, informed defendant that they believed the statement in the article concerning arson referred particularly to them and was false and libelous. Plaintiffs informed defen- dant of its opportunity under section 64-207.1, R.C.M. 1947, to correct the allegedly libelous matter. Defendant failed to re- tract its statement concerning arson in the manner prescribed by the statute, and plaintiffs, on December 19, 1975, filed a complaint in district court, Silver Bow County, alleging that defendant had libeled them by the statements concerning arson in the article, "In the Pit". Defendant filed a motion to dismiss plaintiffs1 complaints for failure to state a claim upon which relief could be granted. The district judge denied defendant's motion to dismiss. Defen- dant subsequently filed its answer, denying the assertions in plaintiffs' complaints that the arson statement was made of and concerning plaintiffs and that the article was prepared with a reckless disregard of the truth, and asserting that the statements contained in the article were protected by the freedom of speech and press guarantees of the First Amendment. Plaintiffs and defendant thereafter filed the following four exhibits: (1) An "Editorial Reference File", containing the refer- ence material upon which defendant based its article and the suc- cessive drafts of the article; (2) a "Memorandum for Counsel", containing interviews with the persons involved in the investigation, writing, and pub- lishing of the article; (3) "The Butte Fire Memorandum", containing copies of the fire incident statistical reports of the State Fire Marshall Bureau of the State of Montana, Department of Justice, for the years ending 1974 and 1975 and an analysis of fires during 1965- 1975 in an arbitrarily selected 58 square block area in the central business district of Butte; and, (4) a "Memorandum of Testimony" on behalf of plaintiffs, containing interviews with each of the plaintiffs and with their attorney. Plaintiffs and defendants stipulated that the state- ments of t i l e Time, Inc., employees and statements of plaintiffs and their attorney as contained in the exhibits, were what " * * * in substance and effect" they would testify to "for the purpose of any motion or for the purpose of trial * * *." Defendants, on May 6, 1976, filed a motion for summary judgment and a memorandum in support of their motion. Plaintiffs, on May 17, 1976, filed a cross-motion for summary judgment, solely on the issue of liability, and likewise supported their motion with a legal memorandum. On May 19, 1976, defendant moved to disqualify the district judges of the second judicial district, Silver Bow County. The Honorable Robert J. Boyd, judge of the third judicial district, was thereupon appointed to hear all further matters in the cause. Plaintiffs and defendant argued the merits of their re- spective motions for summary judgments before Judge Boyd on July 9, 1976. The district judge entered summary judgments far defen- dant because: "Viewing the matter as a stranger and with no special knowledge possessed of the parties, the Court is unable to ascertain any language in the article which refers to some ascertainable or ascertained person * * *." Plaintiffs raise the following issues in their appeal from the district court ruling: 1. Did the district judge, by granting defendant's motions for summary judgment, reverse the previously disqualified district judge's denial of defendant's motion to dismiss and thereby im- properly exercise appellate jurisdiction? 2. Did the evidence support the district court's granting of defendant's motions for summary judgment? Plaintiffs contend that Judge Boyd was without jurisdic- tion to grant defendant's motions for summary judgment. District Judge James Freebourn had earlier denied defendant's motions to dismiss plaintiffs' complaints for failure to state a claim. After Judge Freebourn was disqualified and Judge Boyd was assigned to the case, Judge Boyd granted defendant's motions for summary judgments. Plaintiffs assert that Judge Boyd's granting of de- fendant's motion for summary judgments was the equivalent of a reversal of Judge Freebourn's denial of defendant's motions to dismiss, and an improper exercise of appellate jurisdiction by a trial judge. The obvious flaw in plaintiffs' argument is that motions to dismiss for failure to state a claim and motions for summary judgment are distinct motions involving different questions of law, and having different legal effects. Rule 12 (b) (6) , M.R. Civ.P., motion to dismiss is based solely on the allegations that a plaintiff has made in his complaint. The denial of defendant's motions to dismiss by Judge Freebourn was the law of the case solely as to the sufficiency of the complaint. The denial of the motions to dismiss meant that, in light of the complaint alone, the trial court could not state " * * * for certain that plaintiff is entitled to no relief under any state of facts which might be proved in support of the claim." Keilrnann v. Mogan, 156 Mont. 230, 233, 478 P.2d 275. Judge Boyd's granting of defendant's Rule 56, M.R.Civ.P., motions for sumnzary judgment, however, was a decision on the merits of the case, and not merely a determination of the suffi- ciency of the allegations in the complaint. In granting defen- dant's motions for summary judgment, Judge Boyd considered matters outside the complaint, including briefs and oral arguments of counsel, written statements of witnesses, and various statistical data concerning fires in Butte. The granting of the motions for sumnzary judgment signified that, in light of the complaint and the evidence before the court, there remained no disputed material issue of fact which plaintiffs could prove to entitle them to re- cover. Judge Boyd properly exercised his trial court jurisdic- tion in ruling on the motions for summary judgment. See Amann v. Northern Pacific Railway Co., 130 Mont. 11, 18, 292 P.2d 753 (1955), for an expression of this rationale in a pre-rules case. Plaintiffs next contend that the trial judge erred in granting defendant's motions for summary judgments. The trial judge held, as a matter of law, that the statement that "Arson has become common as people who are unable to sell their devalued buildings burn them for the insurance" does not point to any ascertainable person. The judge further noted that nothing in the record indicated that the buildings owned by plaintiffs were "devalued". Finally, the trial judge recognized that, based on the information contained in the "Butte Fire Memorandum" exhibit, the group of "people who are unable to sell their devalued build- ings" could include from 204 to 481 persons. Because plaintiffs had not, in the trial court's view, presented evidence sufficient to raise a factual question as to whether they were the specific people in the group referred to, the court held that the common law group libel rule precluded their recovery. Plaintiffs agree that there is no material issue of fact as to liability, but assert that, as a matter of law, they should be granted summary judgment as to liability, with damages to be determined at trial. Plaintiffs assert that defendant is clearly liable for libel under section 64-203, R.C.M. 1947, because the article was printed by defendant, distributed in Montana and nation- wide, falsely accused plaintiffs of a crime (arson) and was written "of and concerning the Plaintiffs." The crucial issue in this case, as to defendant's lia- bility for defamation under Montana law, is whether the article was published "of and concerning" plaintiffs. See Rowan v. Gazette Printing Co., 74 Mont. 326, 331, 239 P. 1035; Schaffroth y . he Tribune, 61 Mont. 14, 17, 201 P. 271. Where a plaintiff is not named in the allegedly libelous statement, he may present evidence of the surrounding circumstances and facts to meet his burden of proving that he was the person to whom the statement referred, Nolan v. Standard Publishing Co., 67 Mont. 212, 216 P. 571. If the arson charge in the article was false and was understood by readers to specifically refer only to plaintiffs or to refer to plaintiffs as members of a group small enough that the defamation may reasonably be understood to apply to each group member, plain- tiffs could recover. If, however, the statement concerning people burning their buildings was reasonably understood by readers of the article to refer to a large group, of which plaintiffs were members, neither plaintiff nor any other member of the large group has a cause of action for defamation. 3 Restatement of Torts 2d, 5564A. "As the size of the group increases, it becomes more and more difficult for the plaintiff to show he was the one at whom the article was directed, and presently it becomes impossible.* * * " Louisville Times v. Stivers, 252 Ky. 843, 68 S.W.2d 411, 412. The district judge, in granting defendant's motions for summary judgment, relied on information contained in the "Butte Fire Memorandum" exhibit. The memorandum, which contained records of the Butte Fire Department and the State Fire Marshall Bureau of the Montana Department of Justice, showed that during the period 1965-1975 in uptown Butte there were 159 fires, 56 of which were attributed to arson, in buildings owned by a minimum of 204 persons. In the entire city of Butte during 1974-1975, there were 481 fires, 108 of which were attributed to arson or suspicious acts. The district judge held that using either the 204 or 481 figures, the group of owners of buildings which had burned was too large to cause a reader of the article to reasonably believe that the arson charge was directed at plaintiffs. Did plaintiffs prove by extrinsic facts and circumstances that there remained a material issue of fact as to whether the seemingly broad statement in the article, charging "people" with burning their devalued buildings for the insurance, in fact was reasonably understood by certain readers to be specially directed at these plaintiffs? Plaintiffs rely on the following facts in the court's exhibits: The investigator and author of defendant's article talked with people about only four fires in uptown Butte, two of which fires are the subject of this litigation; defendant had no information at the time it published its article as to any of the other fires listed in the "Butte Fire Memorandum"; no stip- ulation was made as to the cause of the fires or their relevancy; a prior draft of the article referred to "businessmen" burning their devalued buildings, which was changed to the published reference to "people" on the advice of the article's author that they could not state as a fact that local businessmen were the ones committing the arson. Plaintiffs assert that these facts show that defendant specifically had plaintiffs in mind by its reference in the article to "people" and that printing the arson charge, despite the author's warning that they could not prove that businessmen were arsonists, constituted actual malice due to a "deliberate disregard of the truth and a reckless disregard of the falsity of the statement." Plaintiffs have failed to show that the arson charge, applicable on its face to a very large group, was reasonably under- stood to apply specifically to plaintiffs. Even if we assume arguendo that the author of defendant's article had knowledge of only four fires in the business district, and that defendant meant in its article to refer only to those four fires, and even if we further igno~defendants statements to the contrary, plaintiffs have failed to meet their burden of establishing a case for de- famation. Whom the author has in mind when he publishes his article is not determinative of the issue of liability. Libel and damage consist in the apprehension of the hearers, not in the mind of the author of the statement. Goldborough v. Orem & Johnson, 103 Md, 671, 64 A. 36. " * * * Plaintiff sought to show by circumstances that the writer of the published article had him in mind, but his unpublished intention is not material." Brodsky v. Journal publishing Co., 73 S.D. 343, 42 N.W.2d 855, 857; Accord, Helmicks v. Stevlingson, 212 Wis. 614, 250 N.W. 402. Nor is it relevant to establishing a libel cause of action that plaintiffs perceived that the allegedly defamatory statement applied to them. In order that there be actionable libel, under section 64-203, R.C.M. 1947, a plaintiff must show that people in the community other than the plaintiff perceived the statement to refer to the plaintiff. Without satisfying this requirement, there clearly would not be the injury to reputation or occupation that the statute requires. " * * * the test is neither the intent of the author nor the recognition of the plaintiff himself that the article is about him, but rather the reasonable understanding of the recipient of the communication." Robinson v . Guy Gannett Publishing Company, 297 F.Supp. 722, 726 (D. Maine 1969). Plaintiffs in this case could have introduced as evidence the statements of readers familiar with the circumstances in Butte at the time the article was published to show that on reading the article the readers knew the arson accusation was directed at plaintiffs. Marr v. Putnam, 196 Or. 1, 246 P.2d 509, 516; Hous- ton Printing Co. v. Moulden, 15 Tex.Civ.App. 574, 41 S.W. 381, 386. Plaintiffs evidence in their exhibit "Memorandum of Testi- mony and Statement", however, dealt solely with plaintiffs own emotional reactions to the article. The only references to re- actions of others were statements by plaintiffs themselves con- cerning a comment made to one plaintiff at a cocktail party that the statement in the article was a terrible thing to do to him and other property owners, and the statement of another plaintiff that, although people told her the article was inaccurate and an unfair statement, no one accused her of setting the fire, except perhaps in a joking manner. Plaintiffs have agreed that all matters were before the court, from the pleadings and exhibits, on which to render a decision as to liability. If readers of the allegedly libelous article reasonably concluded that the arson charge was directed at plaintiffs, plaintiffs failed to introduce any readers' state- ments to that effect, and failed to offer any reason for their failure to include such statements in the exhibits offered to the district court. " * * * When on the record there is no genuine issue as to any material fact before the court the bur- den is on the party opposing the motion for summary judgment to present facts of a material and substantial nature raising a genuine issue. The trial judge has no duty to anticipate possible proof that might be offered." Brown v. Thornton, 150 Mont. 150, 155, 432 P.2d 386 (1967). From the pleadings and exhibits, we can discern no evidence to show the general statement in the article as to arson was reasonably understood by readers to specially apply to plaintiffs rather than to the large group of 200-400 "people" whose buildings in Butte were destroyed by fire. In denying relief to a taxicab driver who was a member of a defamed group of 60 taxi drivers, the District of Columbia District Court stated: "In case of a defamatory publication directed against a class, without in any way identifying any specific individual, no individual member of the group has any redress. The reason for this rule is that ordinarily a defamatory statement relating to a group as a whole, does not necessarily apply to every single member. A minority not in- tended to be castigated has no legal cause for complaint * * *." Fowler v. Curtis Pub. Co., 78 F.Supp. 303, 304-305 (D. D.C. 1948), aff'd., 182 F.2d 377 (D.C. Cir. 1950). Because the allegedly defamatory statements cannot reason- ably be interpreted as applying specifically to plaintiffs, the common law group libel rule precludes their recovering in a defamation action. We adhere to this common law principle be- cause the definition of libel in section 64-203, R.C.M. 1947 "is but a statement of the common law rule". Manley v. Harer, 73 Mont. 253, 260, 235 P. 757. It is therefore unnecessary to discuss whether the statement in the article concerning arson was in fact true, or whether plaintiffs even fell within the article's description of owners of "devalued" buildings. Plaintiffs and defendant have also extensively and ably argued the issue of whether defendant's statements in the article would be protected by the First Amendment, in the event that the statements ran afoul of Montana's libel law. The parties have discussed the Supreme Court decisions in New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L Ed 2d 686, 95 ALR2d 1412; Gertz v. Welch, 418 U.S. 323, 94 S.Ct. 2997, 41 L Ed 2d 789; and Time, Inc. v. Firestone, 424 U.S. 448, 96 S.Ct. 958, 47 L Ed 2d 154, and have argued what standard of fault this state should re- quire a plaintiff to prove in libel actions involving a defamed private party plaintiff and a broadcaster or publisher defendant. This issue requires a careful balancing of the First Amendment freedoms of speech and press, and the personal dignity interests underlying the law of defamation. Because this case has been settled on a nonconstitutional basis, we save for another day the determination of whether a publisher who defames a private party shall be liable in this state for "negligent" publishing of the libelous statements or only for libelous statements published with "actual malice". The judgment of the Chief Justice. We concur: Justices V

August 30, 1977

572effa4-dafc-4162-9a90-0726afbb412c

HENDERSON RIPHENBURG v HENDERSON

N/A

13564

Montana

Montana Supreme Court

No. 13564 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 MARLYS D. HENDERSON, Plaintiff and Appellant, KENNETH A. HENDERSON, Defendant and Respondent, ______________-___---------------------------------- DONNA RIPHENBURG, Petitioner, MARLYS D. HENDERSON, Respondent. Appeal from: District Court of the Eighth Judicial District, Honorable Truman G. Bradford, Judge presiding. Counsel of Record: For Appellant: Marra, Wenz & Iwen, Great Falls, Montana John Iwen argued and David Hopkins argued, Great Falls, Montana For Respondent : Howard Strause argued, Great Falls, Montana Submitted: April 27, 1977 ~ecided: AUG - 2 3 i 9 n Mr. Justice Daniel J. Shea delivered the Opinion of the Court. The natural mother, Marlys Henderson, appeals from a judgment of the district court, Cascade ~ o u n t ~ , awarding permanent custody and guardianship of her two minor children to their paternal aunt, Donna Riphenburg. Three issues are raised on appeal: 1. Whether the aunt has standing to bring an action for temporary custody of the children. 2. Whether the aunt can obtain temporary custody without filing a petition or giving notice to the mother. 3. Whether the court can grant permanent custody to the aunt without a showing the mother caused the children to be abused, neg- lected or dependent. Three proceedings were consolidated for hearing in the dis- trict court and are involved in this appeal. The first proceeding began with the divorce of Marlys and Kenneth Henderson on June 12, 1975. At that time, Marlys received custody of their daughter Jennifer, born March 24, 1972, and Kenneth received custody of their son Joel, born August 11, 1974. In December 1975 Marlys and Kenneth returned to the district court, each seeking custody of both chil- dren. They eventually agreed Kenneth would retain custody of Joel and take temporary custody of Jennifer, pending investigation of the question of permanent investigation of the question of permanent custody of both children by the court of conciliation. This pro- ceeding was never concluded because of Kenneth's untimely death in an automobile accident April 2, 1976. The second proceeding began immediately upon ~enneth's death. Kenneth's attorney appeared that same day before the district court and submitted only an affidavit in support of a proposed order giving Donna Riphenburg, Kenneth's sister, temporary custody of the children. The court granted the order without giving notice to the natural mother. On April 12, 1976, the aunt filed a petition for appointment as guardian of the children, and without notice to the mother, the court appointed the aunt temporary guardian on April 13, 1976. On April 13, 1976, the mother's attorney was given notice the court would hold a hearing on the guardianship petition. The third and last proceeding in the district court was com- menced by a petition filed by the aunt, June 7, 1976, seeking per- manent custody of the children. All three proceedings were tried together July 6, 1976. On July 13, 1976, judgment was entered ap- pointing the aunt guardian of the children and also awarding her permanent custody of the children. One of the reasons for the guardianship proceeding was to allow the aunt to administer the pro- ceeds of a life insurance policy on the father's life on behalf of his children. The court's granting temporary custody to the aunt without notice to the mother was error. Section 48-331(4), R.C.M. 1947, of the Uniform Marriage and Divorce Act, provides: "(4) A child custody proceeding is commenced in the district court: "(a) by a parent, by filing a petition R h " (i) for dissolution - or legal separation; - - p a ~ " a n A . f l ) ' . R - r m - g . + + i - 7 4 e cr o w ~ y J* & , , W P ~ : d~ "(b) by a person other than a parent, by filing a petition for custody of the child in the county in which he is permanently resident or found, but only if he is not in the physical custody of one of his parents." (Emphasis supplied.) The aunt did not have standing to begin a custody proceeding under section 48-331(4)(b). The aunt argues the requirement that the children not be in the physical custody of one of the parents was met because at the time of the father's death and at the time the aunt picked the children up, they were being cared for by a baby- sitter. We find no merit to this argument. "Physical custody" is not limited to having actual, immediate control of the physical presence of the child. Rather, this phrase relates to the custodial rights involved in the care and control of the child. Burge v. City and County of San Francisco, 41 C.2d 608, 262 P.2d 6 (1953). To interpret this phrase otherwise would allow a nonparent to file a petition for custody anytime the child is out of the physical presence of the parent or parents, even if for a few minutes, or under the watchful eyes of an authorized babysitter, as here. It must be emphasized that at the moment of the father's death, the mother, as the surviving parent of the children, automatically as- sumed the legal right to custody of the children under section 61- 105, R.C.M. 1947: " * * * If either parent be dead, or unable, or refuse to take the custody, or has abandoned his or her family, the other is entitled to its cus- tody, services, and earnings." Section 48-333(1), R.C.M. 1947, sets out the procedures for a temporary order of child custody: "(1) A party to a custody proceeding may move for a temporary custody order. The motion must be supported by an affidavit as provided in section 48-340. The court may award temporary custody under the standards of section 48-332 after a hear- ing, or, if there is no objection, solely on the basis of the affidavits." (Emphasis supplied.) Here, the aunt was not a party to the original custody proceeding, nor did she become one by filing an affidavit after the father's death. Under section 48-331(5), R.C.M. 1947, " * * * The court, upon a showing of good cause, may permit intervention of other interested parties." Nothing in the record suggests, however, that the aunt tried to intervene in the original action before the father's death. Accordingly, after the father's death, the aunt lacked stand- ing in the original proceeding to move for temporary custody. Finally, section 48-340, R.C.M. 1947, sets out the procedure for submitting affidavits in custody proceedings: "A party seeking a temporary custody order or modification of a custody decree shall submit together with his moving papers an affidavit setting forth facts supporting the requested order or modification and shall give notice, together with a copy of his affidavit, to other parties to the proceeding, who may file opposing affidavits. The court shall deny the motion un- less it finds that adequate cause for hearing the motion is established by the affidavits, in which case it shall set a date for hearing on an order to show cause why the requested order or modifi- cation should not be granted." Even if the aunt did have standing to bring the action for temporary custody, under the above statute she failed to follow correct procedures. First, no motion was filed with the affidavit. Second, no notice was given to the mother, who was among "other parties to the proceeding". Third, and most important, the affidavit was deficient because it did not set forth evidentiary facts in sup- port of the requested order. This statute requires the facts to be set out in detail so the court can make an informed decision, but here there was simply no basis upon which the court could determine the aunt should have temporary custody. The affidavit stated in relevant part: "That approximately on the 2nd day of April, 1976, Kenneth A. Henderson was killed in an automobile accident, That it would be in the best interests of the children involved for Donna Riphenburg to be granted the temporary care, custody and control of the minor children. That Donna Riphenburg is the sister of Kenneth A. Henderson and is responsible and capable of caring for the needs of said children. That this affidavit is made in support of a Court order directing that Donna Riphenburg be granted the temporary care, custody and control of Joel Henderson and Jennifer Henderson." This affidavit is devoid of even an attempt to comply with section 48-340. It does not even acknowledge the existence of the children's mother. Under these circumstances the district court had no juris- diction to grant temporary custody to the aunt. The dangers of failure to comply with this statute are illustrated by what happened here. Regardless of any deficiency in obtaining temporary custody, the aunt argues the issue is moot since a full hearing on the merits of the petition for permanent custody was held on July 6, 1976. We disagree. The transcript on appeal indicates the district judge conducting the hearing on permanent custody mistakenly assumed that another district judge had conducted a hearing and found misconduct on the part of the mother before he awarded temporary custody of the children to the aunt. This temporary custody order in effect created a presumption in favor of the aunt and shifted the burden of proof to the mother, and was in direct violation of section 48-333(1), R.C.M. 1947. We next discuss the aunt's petition for permanent custody. The petition was filed under the Montana Uniform Marriage and Divorce Act, and the pertinent part of the petition stated: "That Donna Riphenburg is a fit and proper person to have the permanent care, custody and control of said minor children. That it would be in the best interests of said minor children to grant their care, custody and control to Donna Riphenburg. That Marlys D. Henderson is not a fit and proper person to have the care, custody and control of said minor children. That during the short time that Marlys D. Henderson had custody of Jennifer Henderson, she did not conduct herself as a proper mother and by her actions indicated that she is not a proper person to be granted custody of said minor children." To this allegation the mother answered in her affirmative defenses that the petition: " * * * contains no allegations, whatsoever, that said minor children are abused, neglected or dependent as defined in Section 10-1301, R.C.M., 1947, and that Section 48-331(d) (4) (b) , R.C.M., 1947, requires such a showing before a natural mother can be stripped of her rights to the care, custody and control of her children by an individ- ual who is not a natural parent of said children." The district court did not directly rule on this affirmative defense and concluded at the end of the hearing that the mother was not a fit and proper person to have custody of her children. We hold the district court should have allowed this affirmative defense and ruled the proper procedure for the aunt to undertake was a sep- arate proceeding under the dependent and neglect statutes, rather than under the Uniform Marriage and Divorce Act. The record shows the district court reached its decision on the basis of the "best interest" test set out in section 48-332, R.C.M. 1947, of the Uniform Marriage and Divorce Act, which was not designed to give nonparents the same standards for determining cus- tody of children. The Uniform Code Commissioners' note on this section states in 9 Uniform Laws Annotated, Marriage and Divorce Act, § 401, p. 504: " * * * if one of the parents has physical custody of the child, a non-parent may not bring an action to contest that parent's right to continuing cus- tody under the 'best interest of the child' standard of Section 402. If a non-parent (a grandparent or an aunt or uncle, perhaps) wants to acquire custody, he must commence proceedings under the far more stringent standards for intervention provided in the typical Juvenile Court Act. In short, this sub- section has been devised to protect the 'parental rights' of custodial parents and to insure that in- trusions upon those rights will occur only when the care the parent is providing the child falls short of the minimum standard imposed by the community at large--the standard incorporated in the neglect or delinquency definitions of the state's ~uvenile Court Act." (Parenthetical matter in original.) This is not a radical departure from existing law. This Court stated 50 years ago in August v. Burns, 79 Mont. 198, 219-220, 255 P. 737 " * * * in a proper proceeding a child may be taken from a surviving parent, or from both parents, when it appears that such are not proper persons to have the custody of the child. However, the surviving parent is legally entitled to the custody of the children * * * and is required by law to support and care for such children * * * and the paramount interest of the child, or its wish, will not justify the court, in the absence of a showing of unfitness or inability to support a child, in arbitrarily taking a child from its natural guardian and turning it over to a stranger." Clearly, no petition to take the children away was filed here under the abuse, neglect and dependency statutes. It is important to note the mother was never, either before or after the father's death, declared to be unfit to have the custody of the children. This being so, the district court had no jurisdiction to take the children away from their natural mother. The "best interest of the child" test is correctly used to determine custody rights between natural parents in divorce pro- ceedings. In this situation the "equal rights" to custody which both the father and mother possess under section 61-105, R.C.M. 1947, are weighed in relation to each parent's ability to provide best for the child's physical, mental, and emotional needs upon the breakdown of the marital relationship. "Fitness" of each parent is determined only in relation to the other and not to society as a whole. However, where third parties seek custody, it has long been the law in Montana that the right of the natural parent prevails until a showing of a forfeiture of this right. Ex parte Bourquin, 88 Mont. 118, 290 P. 250 (1930). See also Matter of Fisher, 169 Mont. 254, 545 P.2d 654, 33 St.Rep. 183 (1976). The Uniform Marriage and Divorce Act does not change this law. This forfeiture can result only where the parent's conduct does not meet the minimum standards of the child abuse, neglect and dependency statutes. The remaining question concerns guardianship. It is clear that the district court appointed the aunt guardian because of its decision on her petition for permanent custody. If the district court would have awarded permanent custody to the mother, we cannot envision the court still would have appointed the aunt guardian of the estates and persons of the children. It stands, therefore, that the guardianship, with one exception, must also be set aside. One of the reasons the aunt petitioned the court to be appointed guardian was so she could administer on behalf of the children the proceeds of a life insurance policy on their father's life. The aunt was named as beneficiary of the policy with the understanding that she administer the money for the children. No good purpose would be achieved in changing the guardianship with regard to the insurance proceeds. Accordingly, the aunt is retained as a limited guardian only, to administer the insurance policy proceeds on behalf of the children. The permanent custody order of the district court is set aside and the children are ordered returned to their mother. This decision is without prejudice to the aunt to start proceedings under Title LO, Chapter 13, Revised Codes of Montana, 1947. The guardianship appointments are also vacated with the exception stated. This cause is remanded to the district court for further proceedings in accordance with this opinion. We Concur: \ f \ Chief Justice

August 23, 1977

4f3e6aa8-a991-40fa-9017-5c42a47a8c2d

STATE v DOTY

N/A

13689

Montana

Montana Supreme Court

No. 1 3 6 8 9 I N THE SUPREME COUXT OF THE STATE OF MONTANA 1 9 7 7 STATE OF KONTANA, -vs- CHARLES RAY DOTY, R e s p o n d e n t . ORIGINAL PROCEEDING: C o u n s e l of R e c o r d : For A p p e l l a n t : D o u g l a s H a r k i n arqued, C o u n t y A t t o r n e y , H a m i l t o n , M o n t a n a For R e s p o n d e n t : G a r n a a s , H a l l , R i l e y and P i n s o n e a u l t , M i s s o u l a , M o n t a n a J. R o b e r t R i l e y argued, Ilissoular M o n t a n a S u b m i t t e d : Play 1 8 , 1 9 7 7 D e c i d e d : jUL 2 9 1 9 7 7 Filed: J'UL 28 1Vj- Mr. Justice John Conway Harrison delivered the Opinion of the Court . This is an original proceeding. Petitioner state of Montana seeks a writ of supervisory control or other appropriate relief directing the district court, Ravalli County, the Hon. Edward T. Dussault presiding, to vacate its order reversing the order of Justice of the Peace Ruth A. Daniels denying defendant's motion to withdraw his plea of guilty, and to substitute therefor an order affirming the denial of defendant's motion in the cause entitled State of Montana, Plaintiff v. Charles Ray Doty, Defendant, Criminal Cause No. C/1569, Ravalli County. On April 15, 1976, defendant Charles Ray Doty was charged with the criminal offense of misdemeanor theft, pursuant to section 94-6-382, R.C.M. 1947. The complaint was filed in the justice court, Ravalli County, before Justice of the Peace Ruth A. Daniels. Defendant Doty was found to be an officer of the Missoula City Police Department with approximately nineteen years of law enforce- ment experience. On April 27, 1976, Doty appeared in Ravalli County justice court with his attorney, Harold Holt of Missoula, for arraignment. At that time, Doty entered a plea of not guilty. The court set June 16, 1976 as the date of trial. The trial date was subse- quently continued to June 22, 1976. Doty conferred with his attorney on several occasions between the arraignment and the date of trial concerning his defense to the charge. On June 17, 1976, following a telephone conversation with a friend, Doty telephoned Douglas Harkin, the Ravalli County attorney, and arranged for a meeting concerning the pending criminal action. Prior to the meeting, Doty attempted to contact his attorney of record for advice on the matter. in ding him unavailable, Doty consulted Missoula attorneys H. L. Garnaas and J. Robert Riley concerning the upcoming trial. He was advised the attorneys could not be prepared for trial upon such short notice. No further advice was given. Doty proceeded to Hamilton to discuss the case with the county attorney, unaccompanied by counsel. The county attorney was apprised of the fact Doty was unable to reach his attorney prior to the meeting. During the discussion, the county attorney detailed the evidence he intended to use against Doty. The re- mainder of the conversation concerned the legal and non-legal ramifications of a change of plea to guilty and failure to so change the plea, although the substance of this portion of the conversation is unclear. Doty returned to Missoula to again seek the advice of his attorney, who was still not available. Doty did speak briefly with his attorney's partner, William Murray, who indicated he was insufficiently informed to be able to render advice. On that same afternoon, and without discussing the matter with his attorney of record, Doty returned to Hamilton. Approxi- mately two hours after the meeting with the county attorney, he appeared in justice court unaccompanied by counsel, and withdrew his plea of not guilty, entering a plea of guilty in substitution. Doty was sentenced at that time. On June 22, 1976, Doty filed a motion to withdraw his plea of guilty, together with an affidavit in support of his motion. In sum, Doty alleged in his affidavit the change of plea was improvidently made, in that it was made without the advice of counsel, and that at the time of the change of plea, he was "* * * distraught, unable to think clearly or to fully appreciate the significance of his act * * *." A hearing was held on the motion on June 25, 1976. The motion was subsequently denied. The decision was appealed to the district court, the case being submitted on the record, including the transcript of the hearing held on June 25, 1976, and the briefs of the respective parties. The district court on December 6, 1976, entered an order reversing the decision of the justice court and remanding it for a trial on the merits. It is from this order the state brings its application for a writ of supervisory control or other appropriate writ. This Court is asked to determine whether the district court erred or abused its discretion in reversing the order of the justice court; in allowing withdrawal of the guilty plea; and ordering that a trial be had on the merits. Whether defendant Doty should have been permitted to discuss his case directly with the county attorney and shortly thereafter change his plea from not guilty to guilty without the assistance of his counsel of record is the focus of determination here. The state of Montana has but a limited right of appeal in criminal cases. Such right to appeal is statutory, and is confined to certain specific and narrowly defined instances, set forth in section 95-2403, R.C.M. 1947. The state has no statutory right of appeal from a district court order which, as here, has the effect of granting a defendant's motion to withdraw a plea of guilty. It is clear where a party has no plain, speedy or adequate remedy at law, and when there is no right of appeal from an order of a district court, a writ of supervisory control may issue to review the action of the district court. State ex rel. Woodahl v. District Court, 166 Mont. 31, 530 P.2d 780; State ex rel. Ryder v. District Court, 148 Mont. 56, 417 P.2d 89. The vast weight of authority establishes the granting or refusal of permission to withdraw a plea of guilty and substitute therefor a plea of not guilty rests in the discretion of the trial court, and is subject to review only upon a showing of an abuse of discretion. State v. Nance, 120 Mont. 152, 184 P.2d 554; State v. McAllister, 96 Mont. 348, 30 P.2d 821; State ex rel. Foot v . ~istrict Court, 81 Mont. 495, 263 P. 979. Each case must necessarily be resolved upon its own set of facts and circumstances. There is no rule or standard which can be relied upon in any given case. State v. Morgan, 131 Mont. 58, 307 P.2d 244; State v. Nance, supra. The Ravalli County justice court was, in this case, the trial court, being vested with original jurisdiction of the misdemeanor offense by virtue of section 95-302(a), R.C.M. 1947. Therefore, it was the exercise of discretion by the justice court that was reviewed on appeal by the district court. The trial court, in determining the validity of a plea of guilty, must determine that the plea is entirely voluntary, and made not inadvisedly, but rather with an understanding of the consequences. State v. McBane, 128 Mont. 369, 275 P.2d 218; State v. Casaras, 104 Mont. 404, 66 P.2d 774. It is not merely the province, but the duty of the court to make such a determination. The absence of counsel of record for the defendant at the time of the entry of the plea of guilty is a factor to be considered by the court in reaching its decision. The transcript of the hearing held in justice court on the motion for a change of plea indicates defendant Doty steadfastly maintained his innocence of the charge until the moment he changed his plea to guilty. It further appears that prior to both the meeting with the county attorney and the subsequent change of plea, Doty had actively sought legal counsel from Harold Holt, his attorney of record, regarding the m a t t e r . The county attorney and the justice of the peace were aware at the time of the change of plea that Doty was still represented by ~arold Holt. Yet, in determining that Doty's change of plea was understandingly and advisedly made, the court failed to ascertain that Doty had in fact consulted with his attorney of record regarding his action, and the reason his attorney was not present for the proceedings. Failure to do so, despite Doty's prior experience with courtroom procedures as a police officer, raises serious doubt as to the validity of the change of plea to guilty. This Court has, on numerous occasions, enunciated the principle applicable in cases of doubt: " * * * If there is any doubt that the plea is not voluntary, the doubt should be resolved in his [the defendant's] favor. On application to change a plea, all doubts should be resolved in favor of a trial on the merits." State v. Casaras, 104 Mont. 404, 413, See also: State v. McAllister, 96 Mont. 348, 30 P.2d 821. Here, any irregularity and doubt should have been resolved by the trial court in favor of defendant, in his motion for a change of plea; then that doubt could properly be resolved by a jury. Only through trial on the merits following a change of plea would the ends of justice best be served in this case. Therefore, it cannot be said the district court erred in finding an abuse of discretion on the part of the trial court. We find no impropriety in the action of the district court suf- ficient to invoke the supervisory control of this Court. Relator's petition is denied. We Concur:

July 29, 1977

13aaf51b-39e0-454a-9f0d-3031aaf7d79a

CREDIT COUNSELLORS INC v ALCORN

N/A

13407

Montana

Montana Supreme Court

Yo. '-3407 1N THE S U P R E M E COURT O F THE STATE O F MONTANA 1977 CREDIT COUNSELLOK5, IIdC. , P l a i n t i f f - Respondent, v. NEWT ALCORN, Defendant -Appellant. Appeal from: D i s t r i c t Court of the Eighth J u d i c i a l D i s t r i c t , Honorable R. J. Nelson, Judge presiding. Counsel of Record: For Appellant: Angstman & Gilbert, Havre, Montana Gary W. Gilbert argued For Respondent: J. Vaughn Barron, Great F a l l s , Montana. Submitted: June 1, 1977 Decided : JUL - 1 ISTI P i l e d : JUL J. ,$/;j M r . Chief J u s t i c e Paul G. Hatfield delivered the Opinion of the Court. This is an appeal from the d i s t r i c t court judge's r e f u s a l t o s e t aside a default judgment entered i n Cascade County, January 13, 1976. Complaint was f i l e d March 6 , 1973 t o c o l l e c t the sum of $6,275.92 with i n t e r e s t on several accounts: (1) Rail Ops Credit Union of S a l t Lake City, Utah, a promissory note with a balance of $3,432.18; (2) Mountain Bell Telephone, S a l t Lake City, Utah, open account $54.77; (3) Anthony's, Great F a l l s , Montana, insufficient funds check f o r $30; (4) Freed Motor Co., S a l t Lake City, Utah, unpaid account f o r merchandise $2,508.35. A motion t o dismiss was f i l e d April 16, 1973. The motion was summarily overruled on May 3, 1973. A motion f o r default was f i l e d May 30, 1973 f o r f a i l u r e of defendant t o plead. The motion was s e t f o r hearing on June 13, 1973. O n June 12, 1973, ananswer was- f i l e d i n the form of a general denial and a demand f o r jury t r i a l . O n Marsh 12, 1974, a notice of readiness f o r t r i a l was f i l e d . O n April 19, 1974 t r i a l without a jury was scheduled f o r April 24, 1974 a t 1 1 : O O a.m. on t h a t day. The t r a n s c r i p t shows t h i s s e t t i n g was vacated a t the request of defendant's counsel. O n June 11, 1974, a second notice of readiness f o r t r i a l was f i l e d , apparently no t r i a l was scheduled and a t h i r d notice of readiness was f i l e d August 6, 1974. O n February 21, 1975 the court scheduled t r i a l without jury f o r March 20, 1975, a t 3:00 p.m. O n March 19, 1975 an order issued s e t t i n g a pre- t r i a l conference f o r March 20, a t 3:00 p.m. From the t r a n s c r i p t , it appears the change was made from t r i a l t o p r e t r i a l a t the request of defendant's counsel because it was t o be a jury t r i a l . Defendant flew front b i l l i n g s t o be a i t h e t r i a l and was accompanied by three witnesses, one of whom came from S a l t Lake City. A t the p r e t r i a l , attended by attorneys f o r both p a r t i e s on March 20, 1975 a t 3:00 p.m., the issues were defined by the court a s : Suit on promissory note with Credit Union--Unpaid balance a t date of s u i t 3/6/73-$3432.18, plus i n t e r e s t and costs; Mountain B e l l claim a t date of s u i t $54.77, plus i n t e r e s t ; Anthony's claim $30.00, plus i n t e r e s t ; and, Freed Motor Co. $2508.35, plus i n t e r e s t . The defense tendered was a general denial. O n December 2, 1975 an order was made t h a t on December 16, 1975 a t 2:00 p.m. the court would s e t t l e preliminary instruc- t i o n s , draw jurors and s e t a t r i a l date. O n December 16, 1975, an order was made t o the c l e r k with copies t o counsel t h a t 23 jurors were t o report f o r duty on Monday, January 12, 1976 a t 9:30 a.m. f o r the t r i a l of said cause. O n December 2, 1975 preliminary instructions were drafted by the judge and f i l e d . O n January 12, 1976 the case was called f o r t r i a l with 20 jurors present, together with p l a i n t i f f and counsel. Defendant did not appear i n person o r by counsel a t 9:30 a.m. Court adjourned the matter u n t i l 10:OO a.m. A t 10:OO a.m. the court took testimony and found p l a i n t i f f e n t i t l e d t o judgment f o r $6,275.92,being the principal and i n t e r e s t due and owing a t the time the complaint was f i l e d together with the s u i t costs when f i l e d March 6, 1973, and i n t e r e s t from March 6, 1973 t o January 13, 1976 of $1,066.92, f o r a t o t a l demand of $7,342.84, together with costs. The court further found defendant owed: (1) Rail Ops Credit Union of Salt Lake City, Utah, $3,432.18 with interest from the 12th day of June, 1967; (2) Mountain Bell of Salt Lake City, Utah, $54.77 with interest from April 1970; (3) Anthony's of Great Falls, Montana, $30 with interest from January 1970; and, (4) Freed Motor Co. of Salt Lake City, Utah, $2,508.35 with interest from August 4, 1971; or a t o t a l of $7,342.84. O n February 25, 1976 defendant with a new attorney f i l e d a motion t o s e t aside default judgment entered January 13, 1976, together with an affidavit of defendant that the judgment was entered against him through mistake, inadvertence, surprise and excusable neglect i n that h i s attorney failed t o notify him of the t r i a l date. O n March 17, 1976 a hearing was held'and defendant t e s t i f i e d h i s attorney did not notify him of the t r i a l . and that he had been ready with h i s witnesses on March 20, 1975. H i s new attorney stated that the defense, apparently against the Freed Motor Co. claim only, would be that a repossessed car was sold without notice t o defendant and an amount applied by Freed t o the note balance, but defendant'had a witness who would t e s t i f y the car was sold for an amount enough:' to pay off what was supposedly owed on both cars covered by the note, i f properly applied. P l a i n t i f f ' s attorney objected that t h i s would be an affirmative defense not raised i n the answer or the pleadings and not an issue. O n March 30, 1976 the t r i a l judge denied the motion t o s e t aside the default judgment. ~ e f e n d a n t ' s notice of appeal was f i l e d on April 29, 1976. O n M a y 10, 1976, a cost bond on appeal was f i l e d , Transcript on appeal was f i l e d June 16, 1976. O n October 14, 1976, a motion t o dismiss appeal was f i l e d under Rule 26(c), M.R.App.Civ.P. for appellant's failure t o f i l e h i s brief on appeal. Appellant's brief on appeal was f i l e d February 14, 1977. The issue presented i s whether the t r i a l judge abused h i s discretion i n denying the motion t o s e t aside the default judg- ment under Rule 60(b), ~ . ~ . c i v . P . F i r s t , w e note that no defense i s made as to three of the four claims making up the judgment. Second, the only fact presented t o move the discretion of the t r i a l judge was that the attorney for defendant failed t o notify the defendant of the t r i a l and failed t o appear a t the t r i a l . Rule 60(b), M.R.Civ.P., provides i n part: "On motion and upon such terms as are j u s t , the court may relieve a party or h i s legal representative from a f i n a l judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect * * &.I' It i s axiomatic requiring no authority that appellant must show the t r i a l judge abused h i s discretion i n failing t o grant the motion t o set aside the judgment. I n Davenport v. Davenport, 69 Mont. 405, 410, 222 P. 422, t h i s Court stated: "* * * The cause was tried without notice to defendant that it had been s e t for t r i a l . I n her affidavit defendant stated that she did not have any notice whatever that the cause had been s e t for t r i a l ; but she does not challenge the authority of M r . Chapple t o a c t a s her attorney or intimate that he was not duly retained by her. Since he appeared for her and h i s authority i s not questioned, the presumption w i l l be indulged that he acted with her consent and by virtue of h i s retainer. I n view of t h a t presumption, her statement above becomes immaterial. Notice t o her attorney was notice t o her.!' 69 Mont. 410. Also Rule 6b(b) ,M.R.Civ.P., provides for excusing the party o r "his legal representative". As stated in Rieckhoff v. Woodhull, 106 Mont. 22, 32, 75 P. "* * * Assuming that t h i s situation establishes neg- l e c t on the part of the attorneys, the record f a i l s t o show any excuse therefor. The neglect of h i s attorneys was the neglect of the p l a i n t i f f , and, unless excused, no relief may be granted under t h i s section. (First State Bank v. Larsen, 72 Mont. 400, 233 Pac. 960.)". 106 Mont. 32. S o - i t i s i n the instant case. There i s no showing of what excuse the attorney for defendant may have had t o not appear for jury t r i a l or t o apprise the defendant of the t r i a l date. In the absence of such evidence the t r i a l judge would not have the power t o s e t aside the default judgment,there being no evi- dence to move h i s discretion. Therefore, the judgment i s affirmed.

July 1, 1977

874ebf6f-ccdc-4d25-ab76-0b07943f2f3e

TREASURE STATE INDUSTRIES INC v

N/A

13528

Montana

Montana Supreme Court

No. 13525 I N T H E SUPREME C O U R T O F T H E STATE O F MONTANA TREASURE STATE INDUSTRIES I N C . , a c o r p o r a t i o n , P l a i n t i f f and Respondent, .DEL WELCH, d/b/a D E L WEI,CH CONSTRUCTION CO., A E T N A LIFE AND CASUALTY CO., a c o r p o r a t i o n e t a l . , Defendants and Appellants. Appeal from: D i s t r i c t Court of t h e Eighth J u d i c i a l D i s t r i c t , Honorable Paul G. H a t f i e l d , Judge p r e s i d i n g . Counsel of Record: For Appelllants: J a r d i n e , Stephenson, B l e w e t t & Weaver, Great F a l l s , Montana Alexander B l e w e t t I11 argued, Great F a l l s , Montana For Respondent: Dzivi, Conklin, Johnson & Nybo, Great F a l l s , Montana Dennis C. McCafferty argued, Great F a l l s , Montana Submitted: May 25, 1977 Decided : F i l e d : M r . J u s t i c e Gene B. Daly delivered the Opinion of the Court. O n December 19, 1974, Treasure S t a t e Industries, Inc., f i l e d a complaint against four defendants t o recover c e r t a i n monies allegedly due f o r supplying materials f o r use on a public works construction project. The defendants named were: (1) Sletten Construction Co., the general contractor, who entered into the project with the s t a t e of Montana f o r the construction of a highway and c e r t a i n bridges i n Mineral County, Montana; (2) St. Paul F i r e and Marine Insurance Co., S l e t t e n ' s surety, who issued a bond f o r the benefit of the s t a t e of Montana with Sletten a s principal; (3) Del Welch Construction Co., S l e t t e n ' s subcontractor, who was furnished c e r t a i n materials by Treasure S t a t e f o r which Treasure S t a t e i s attempting t o recover from a l l defendants; and (4) Aetna Life and Casualty Co. the surety f o r De1,Welch Construction Co., who issued a bond with S l e t t e n a s obligee and with Welch a s principal. The d i s t r i c t court, Cascade County, granted a p a r t i a l summary judgment against Aetna on the issue of l i a b i l i t y , and judgment was entered f o r damages, which for the purpose of t h i s appeal only, were agreed upon by Treasure State and Aetna. Aetna appeals from t h i s judgment. The major issue presented on appeal i s whether Treasure State, a third-party materialman, is e n t i t l e d t o a cause of action against Aetna on i t s surety bond, which names S l e t t e n , the general contractor a s the sole obligee. I n the Aetna bond there i s no promise t o pay f o r any materials, although the underlying subcontract provides such an obligation f o r Welch, the subcontractor. ~ e t n a ' s obligations under t h i s bond a r e not specifically conditioned upon the pay- ment of any supplied materials. O n the contrary, the obligation of Aetna under t h i s bond is merely conditioned upon the f a i t h f u l performance of the subcontract o r , i n the a l t e r n a t i v e , indemni- fication of Sletten, the obligee. A surety bond i s simply a contract and should be interpreted i n the same manner a s other contracts. Section 13-702, R.C.M. 1947, i s the Montana s t a t u t e which governs the interpretation of contracts: "Contracts--how t o be interpreted. A contract must be so interpreted a s t o give e f f e c t t o the mutual intention of the p a r t i e s a s it existed a t the time of contracting so f a r a s t h e same i s ascertainable and lawful .I' In interpreting the obligation of Aetna under t h i s surety bond, which incorporated by reference the subcontract between Sletten and Welch, it i s necessary t o construe the surety bond and the underlying contract together. Watson v. ~ ' N e i l l , 14 Mont. 197, 35 P. 1064; Section 13-708, R.C.M. 1947. Neither the language of the bond nor the language of the underlying subcontract specifically mentions Treasure S t a t e i n any way and f o r Treasure S t a t e t o recover from Aetna on t h i s bond, Treasure S t a t e must do so a s a third-party beneficiary pursuant t o section 13-204, R.C.M. 1947, which provides: "When contract f o r benefit of t h i r d person may be enforced. A contract, made expressly f o r the benefit of a t h i r d person, may be enforced by him a t any time before the p a r t i e s thereto rescind it." Unless it was the i n t e n t of Sletten, Welch and Aetna at the time of the execution of the bond t o expressly benefit o r protect Treasure State, it cannot recover from Aetna on the bond. Therefore, it becomes necessary t o examine the mutual determination a s t o the intent of the parties as it existed a t the time of the contracting. Aetnamntends t h i s bond i s a true indemnity bond. According to t h i s view, the insertion i n a bond or contract made part of the bond, of a condition t o pay laborers and materialmen and of a condition t o indemnify the obligee, indica t e s an intent that the former condition was intended for the protection of the obligee and not for the benefit of laborers and materialmen. I n other words, the condition for the indemnification of the owner modi- f i e s and explains the condition for the payment of laborers and materialmen. Treasure State contends t h i s i s not a true indemnity bond and that it was the intent of a l l parties that the materialmen - should have a cause of action on the Aetna bond i n the event they remained unpaid. It i s argued that performance of the subcontract includes payment of the materialmen and therefore, an intent t o directly benefit a l l materialmen is evidenced by the bond. Treasure State contends Weissman & Sons, Inc.,v. St. Paul Insurance Co., 152 Mont. 291, 448 P.2d 740, i s controlling. W e f e e l Weissman can be distinguished on the facts. In Weissman the surety bond and the contract contained an express provision t o pay materialmen. The bond i n the instant case contained no such provision. I n Weissman the surety bond contained no condition of indemnification of the named obligee. The sub- contract in Weissman did not contain a special provision whereby the subcontractor agreed t o indemnify the contractor. Such a provision i s present in the instant case. Finally, since Weissman did not deal with a public works contract, there was no statutory provision (section 6-401, R.C.M. 1947) allowing a l l materialmen a right of action on the prime contractor's bond. Therefore, the materialmen were not specifically protected i n Weissman u n t i l the prime contractor required a bond from the surety company specifically conditioned upon the payment of a l l materialmen. Weissman is clearly distinguishable from the instant case on the facts and therefore would not control. This Court in Gary Hay & Grain Co., Inc. v. Carlson, 79 Mont. 111, 255 P. 722, made it clear that although the surety bond and the underlying contract must be read together t o ascertain the parties' intentions, the surety's obligations are not coextensive with obligations of the underlying contract. For t h i s proposition the Court cited Blyth-Fargo Co. v. Free, 46 Utah 233, 148 P. 427, a case concerning a surety bond which was conditioned upon the performance of the underlying contract and upon indemnification of the obligee. I n Blyth-Fargo the court found there was no intent on the part of the surety o r contractor t o protect o r benefit third-plrty materialmen, even though the underlying contract contained a promise on the part of the contractor to pay a l l materialmen. This Court made special note of the fact that, unless a promise of the principal i s contained i n the underlying contract was also specifically mentioned o r made a condition in the surety bond, the surety would not have obligations coextensive with and measured by the promises of the principal i n the underlying contract. I n the instant case, even though there exists a promise on the part of Welch in the subcontract t o pay a l l materialmen, there was no condition i n Aetna's bond which would make t h i s obligation on the part of Welch coextensive with the obligations of Aetna. The decision i n Gary Hay & Grain Co., Inc. v, Carlson, supra, was approved by the 9th Circuit Court of Appeals i n National Surety Co. of N e w York v, Ulmen, 68 F.2d 330, 336, i n t h i s lan- guage : "In view of the foregoing decisions of the Supreme Court of Montana, it is our view that, i n that s t a t e , a third person who i s a stranger t o a con- t r a c t or a bond thereunder, cannot recover from the surety even when the contract and bond, as here, contain some reference t o him o r t o the class t o which he belongs, unless there is a specific promise t o pay such third person or such class, contained i n the contract and bond." This decision further supports the rule that the mere f a c t the underlying subcontract of Welch contained a promise t o pay a l l materialmen in no way creates an obligation on the part of Aetna, the surety, unless the bond i t s e l f contains a similar promise t o pay the materialmen. Clearly a t the time Sletten and Welch executed the sub- contract agreement, a l l materialmen were adequately protected by the St. Paul Fire and Marine Insurance Co.'s bond given pursuant t o section 6-401 and section 6-404, R.C.M. 1947. The same protection s t i l l existed for a l l materialmen on August 7, 1972, when Aetna's bond was executed. This raises the question of whether Sletten required Aetna's bond for its own benefit or whether it required t h i s bond for the benefit of the material- men who were already protected by the St. Paul bond. McGrath v. American Surety Company >of N e w York, 307 N.Y. 552, 122 N.E.2d 906, deals with a factual situation similar t o the instant case. I n McGrath, a contractor entered into a public works contract with the United States. The federal statute, T i t l e 40 USCA, $ 5 270a and 270b, known as the Miller Act, was i n existence and required a contractor t o furnish a performance bond guaranteeing the completion of the work and a payment bond guaranteeing the protection of a l l persons supplying labor and material. For a l l intents and purposes, t h i s federal a c t is identical t o section 6-401, et.seq., R.C.M. 1947. The con- tractor i n McGrath subcontracted a portion of the work. The p l a i n t i f f , who provided labor and services for the subcontractor, attempted t o recover on the subcontractor's bond which was con- ditioned upon payment by the subcontractor of i t s obligations t o laborers and materialmen. The court held the p l a i n t i f f had no right of action upon the subcontractor's bond because the bond was executed merely for the benefit of the contractor, and not the materialmen. In McGrath, the bond i n question was conditioned upon pay- ment of a l l materialmen. In the instant case the obligation of Aetna is merely conditioned upon indemnifying Sletten or, i n the alternative, the performance of the subcontract. Therefore, the intent of the contractor, the subcontractor, and the surety, i n : McGrath, was not a s clearly expressed a s i n the instant case where there is no promise whatsoever on the part of Aetna, the surety, t o pay materialmen. The object i n Sletten's requiring Welch and Aetna t o execute the indemnity bond was only t o pro- t e c t Sletten against the contingency which would a r i s e i f Sletten or i t s surety, St. Paul, suffered any damages because of an action brought by a laborer or materialman pursuant t o section 6-401. There i s no intent whatsoever expressed i n the bond of Aetna t o provide any greater rights for materialmen than were already provided by section 6-401, e t seq. I n Spokane ~ e r c h a n t s ' Association v. Pacific Surety Co., 86 Wash. 489, 150 P. 1054, a bond executed with a subcontractor as the principal and conditioned upon the payment of a l l laborers and materialmen was found t o be only for the benefit of the prime concracror who had a public works contract with the s t a t e of Washington. Washington had s t a t u t e s similar t o section 6-401, e t seq., R.C.M. 1947, and the court found the i n t e n t of the subcontracto~s bond was merely t o benefit the prime contractor since it was l i a b l e under its statutory bond t o the s t a t e f o r a l l debts incurred by the subcontractor a s well a s any other debts incurred by i t s e l f . Here, under the f a c t s and i n l i g h t of the a u t h o r i t i e s heretoiore c i t e d , Sletten, Welch and Aetna did not intend t o benefit o r protect any third-party materialmen by the execution of Aetna's bond, but merely meant t o protect Sletten, the named sole obligee. A l l third-party materialmen were already adequately protected by the s t a t u t o r i l y required bond executed by S t . Paul F i r e and Marine Insurance Co. I n City of Butte v. Bennetts, 51 Mont. 27, 30, 149 P.92, t h i s Court stated: "'Sureties have the r i g h t t o r e l y upon the l e t t e r of t h e i r undertakings, and t h e i r l i a b i l i t y cannot be extended by implication. ' I ' The provisions of Aetna's bond a r e c l e a r and its obligation under that.bond i s conditioned upon the f a i t h f u l performance of the subcontract o r , i n the a l t e r n a t i v e , indemnification of Sletten, the named obligee. The bond does not contain any condition o r promise concerning payment of materialmen. The subcontract between Welch and Sletten contains a similar provi- sion f o r the indemnification of Sletten and a l s o contains a promise on the p a r t of Welch t o pay a l l materialmen. Although both documents must be construed together, Aetna intended t o l i m i t its obligation under the bond and did so. Sletten, the obligee, agreed with t h i s limitation and the express i n t e n t of the p a r t i e s cannot be overturned because Treasure S t a t e desired to sue Aetna i n l i e u of St. Paul. I n summary, the provisions in Aetna's bond which provide for indemnity of Sletten only evidence an intent to protect Sletten, not Treasure State. For t h i s reason, Treasure State has no right of action against Aetna on the bond. The f i n a l issue on appeal is whether t h i s Court should grant summary judgment for the defendant surety against p l a i n t i f f although motLon for summary judgment was not made by defendant surety com- pany t o the d i s t r i c t court. Section 93-216, R.C.M. 1947, i n pertinent part, states: "Powers and duties of supreme court on appeals, The supreme court may affirm, reverse, o r modify any judgment o r order appealed from, and may direct the proper judgment or order t o be entered, o r direct a new t r i a l or further proceedings t o be had." 6 Pt.2 Moore's Federal Practice, 7 56.27[2] gives support t o entry of summary judgment by an appellate court and s t a t e s that an appellate court has the power t o I f * * * order summary judgment for appellant, both where he made no motion and also where he made a cross-motion in the t r i a l court * * *." There can be no doubt that as a matter of law Aetna is entitled t o judgment against Treasure State. The summary judgment granted Treasure State is reversed. j u d g m ~ t for Aetna against Treasure State i s ordered. W e Concur: Judge, s i t t i n y Chief Just Paul G. Hatfie d.

August 15, 1977

29ef8553-e949-4fb4-937d-1fc490209d8f

STATE v MILLER

N/A

13236

Montana

Montana Supreme Court

No. 13236 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 STATE OF MONTAPJA, Plaintiff and Respondent, -vs- ROBERT WAYNE MILLER, Defendant and Appellant. Appeal from: District Court of the Second Judicial District, Honorable James D. Freebourn, Judge presiding. Counsel of Record: For Appellant: Garnaas, Hall, Riley and Pinsoneault, Missoula, Montana Harold L. Garnaas argued, Missoula, Montana For Respondent : Mike Greely,-Attorney General, Helena, Montana Allen B. Chronister argued, Assistant Attorney General, Helena, Montana John G. Winston, County Attorney, Butte, Montana Nadine D. Scott argued, Deputy County Attorney, Butte, Montana Submitted: June 3, 1977 Decided: Mr. Justice Gene B. Daly delivered the Opinion of the Court. his is an appeal from the district court, Silver Bow County, in which Robert Wayne Miller was convicted of the crime of possession of dangerous drugs. From this conviction, he appeals. Defendant was charged on January 15, 1975, in Butte with the crime of possession of dangerous drugs. On January 16, 1975, the court appointed public defender Mark Sullivan as defendant's counsel. On Thursday, May 21, 1975, the date the trial was to commence, Sullivan filed a motion to suppress evidence. This mo- tion was denied as being untimely. Trial commenced and after the state presented its case, discussion was had between the court and defendant regarding Sulli- van's competency as his attorney. Defendant openly stated to the court that he was not satisfied with his counsel, Sullivan, and he wanted to obtain another attorney at his own expense. Sullivan moved for a mistrial. This motion for a mistrial was denied. Judge Freebourn continued the case until May 23, 1975. Sullivan and defendant both contacted H. L. Garnaas, a Missoula attorney, to find out if Garnaas would take over the de- fense. Over the Memorial Day weekend, Miller did obtain the services of Garnaas and Garnaas appeared in court on Tuesday morning, May 26, 1975, with Sullivan. Garnaas moved for permission to represent defendant and to release Sullivan. The court discharged Sullivan from representing defendant, however, he was to remain in the court- room as an officer of the court to aid Garnaas. Defense counsel was ordered to proceed with its case at which time Garnaas made an opening statement and rested. Instructions were settled, closing arguments were made and the case went to the jury. The jury re- turned a verdict of guilty. Defendant appeals. The issue presented for review is whether defendant was denied effective assistance of counsel by reason of his conduct or otherwise. It is defendant's contention he was denied the assistance of counsel, a right guaranteed by the Sixth and Fourteenth Amend- ments of the United States Constitution. He feels that Sullivan was ineffective in his representation by not submitting his motion to suppress certain evidence until the day of the trial. Defendant contends Garnaas's representation was inadequate because he had an unreasonably short period of time in which to prepare for trial, and he was not present to hear the state's case presented and to cross-examine witnesses. Understandably, the standard against which an inadequacy of counsel claim must be measured is an extremely rigorous one. In the eyes of a convicted defendant, the judgment against him may well stand as incontrovertible proof that his counsel was inadequate. United States ex rel. Rosner v. Commissioner, N.Y. State Depart. of Corrections, 421 F. Supp. 781, 790. Thus, to prevail on a claim of constitutionally inadequate representation, a defendant must meet the burden of proving his counsel's performance was so woefully inadequate as to shock the conscience of the court and make the resultant proceeding a farce and mockery of justice. United States v. Currier, 405 F.2d 1039, 1043, cert. denied 395 U.S. 914, 89 S.Ct. 1761, 23 L ed 2d 228. On January 16, 1975, the trial court appointed the public defender in Butte, Mark Sullivan, to represent defendant, and he did so at the arraignment on January 28, 1975. At the arraignment the court cautioned defendant there would be a jury trial sometime between February and June and he should maintain close contact with his attorney. In the interval between arraignment and trial ~ulli- van lost contact with defendant. Defendant finally called Sullivan a week to ten days prior to the May 21 trial date and stated he knew ~ullivan was no longer the public defender and that he had been trying to retain his own counsel. Sullivan cautioned defend- ant to do so promptly and to call him back the next day. Sullivan heard nothing further from defendant until the night before trial. This obviously placed Sullivan in the untenable position of having to prepare a case defendant had led him to believe would be pre- pared by another attorney. Defendant's conduct, in not keeping in contact with his attorney, put himself in a situation of not having ten days before trial to file a motion to suppress. This Court stated in McDonald v. McNinch, 63 Mont. 308, 316, 206 P. 1096, that a party who participates in or contributes to an error cannot com- plain of it. Defendant cannot complain of his attorney's failure to file the suppression motion timely, because the untimely filing was caused by his own inadvertance. From a review of the district court record it appears Sullivan did an outstanding job in defendant's behalf during the state's case-in-chief, and came close to persuading the trial court to dismiss the charges when the state rested. Despite this record, defendant maintained he was not having a fair trial and that he was being inadequately represented. By the third day of trial (Friday) defendant had contacted and retained his present counsel, Garnaas, and the court granted a continuance until the next Tuesday. When trial reconvened on that day, it was developed in the record that defendant contacted Garnaas's office in Missoula the preceding Thursday afternoon, but that Garnaas was only able to talk to defendant by phone on Saturday. During that conversation, defendant refused to go to Missoula to consult with his new attorney, Garnaas, because he was busy preparing the case himself! Thus, Garnaas was likewise placed in an untenable situation, since, while he would have had three full days (Saturday, Sunday, ond day) to consult with his client and prepare a defense, he was reduced to a single telephone call. However, Mark Sullivan did drive to Missoula on Saturday and brought Garnaas up to date on the case, the best he could. Although the attorney client relationship is ordinar- ily a private matter, a defendant does not have the unbridled right to discharge counsel on the eve of trial. United States v . Grow, 394 F.2d 182, 209; State v. Bubnash, 139 Mont. 517, 366 P.2d 155. While it is incumbent upon a trial court to allow new counsel time to prepare for trial, (State v. Blakes- lee, 131 Mont. 47, 51, 306 P.2d 1103),the trial court allowed defendant from Friday afternoon until Tuesday morning to con- sult with Garnaas, which defendant declined to do. Further, Garnaas had the assistance of Sullivan during the recess and, by the court's order, during the remainder of the trial as an officer of the court. Defendant cannot discharge counsel who had adequately represented him and then complain of a violation of his constitutional rights. State v. Forsness, 159 Mont. 105, 495 P.2d 176. It is clear defendant was not denied effective assist- ance of counsel and the problems presented here were the re- sult of defendant's own actions. The judgment of the trial court and its denial of motion for a new trial are affirmed. W e Concur: / .-- C h i e f Justic

August 15, 1977

1984bd79-c47a-4638-b88c-7d8c67f2d4dd

BUTTE TEACHERS UNION v BOARD OF E

N/A

13603

Montana

Montana Supreme Court

N o . 13603 I N THE SUPREME C O U R T O F THE STATE 0FNI)PJTANA 1977 BUTTE TEACHERS' UNION, No. 332, AFL-CIO, P l a i n t i f f and Respondent, BOARD O F EDUCATION O F SCHOOL DISTRICT No. 1, S i l v e r Bow County, Montana e t a l . , Defendants and Appellants. Appeal from: District Court o f t h e Second J u d i c i a l D i s t r i c t , Honorable Nat Allen, Judge p r e s i d i n g . Counsel of Record: For Appellants: Poore, McKenzie, Roth, Robischon and Robinson, Butte, Montana Donald C. Robinson argued, B u t t e , Montana For Respondent : Maurice F. Hennessey and Robert McCarthy, B u t t e , Montana Maurice F. Hennessey argued, B u t t e , Montana Submitted: May 2 5 , 1977 Decided : JuL 2 9 im- F i l e d : JUL- 2 9 Mr. Chief Justice Paul G. Hatfield delivered the Opinion of the Court . This is an appeal from a judgment of the district court, Silver Bow County, sitting without a jury, Hon. Nat Allen, pre- siding. The judgment ordered: (1) That the parties are bound by the contract and are required to submit the grievances filed by plaintiff to binding arbitration pursuant to Rule 44 of the contract; (2) that the arbitor, pursuant to the contract, after a hearing is empowered to make a decision as to the validity of the grievance. Plaintiff Butte Teachers' Union No. 332, AFL-CIO, brought action against the Board of Education of School District No. 1 Silver Bow County, alleging defendant School Board had a contrac- tual duty to arbitrate its decision to substitute time clocks for sign-in sheets as a means of reporting attendance. The suit was brought pursuant to two collective bargaining agreements; one contract covering teachers and the other covering secretarial, clerical and computer personnel. Each contract contained identical provisions as they pertain to this suit: "Rule 31 UNION RECOGNITION "The Board recognizes the Union as the exclusive bargaining representative for the purpose of representing all teachers * * * as to rates of pay, salaries, hours of employment, and all other items and conditions of employment." "Rule 44 GRIEVANCE PROCEDURE "(a) A grievance shall mean a complaint by an employee that (1) he has been treated unfairly or inequitably, (2) there has been a violation, misinterpretation, or misapplication of the provisions of this agreement or of established policy or practice.* * *" The School Board proposed to establish a more efficient and accurate method for teachers and all other employees of the district to record attendance and absence from work. The time clock system was adopted as a policy of operation and substituted for the manual sign-in sheet. Every district employee was required to punch-in at the beginning of each shift and all non-certified personnel were to punch-out at the end of their shift. The Union opposed this policy of operation contending the time clocks were a change of the working conditions under the contract and therefore subject to arbitration. Accordingly, the Union felt this unilateral change not only violated the past attend- ance procedure, but also amounted to unfair and inequitable treat- ment. The Union requested arbitration of this change of policy. The School Board declined to negotiate or arbitrate claiming this change was a nonmandatory arbitration matter, and a managerial prerogative under section 59-1603(2), R.C.M. 1947. The School Board contended that some form of attendance procedure existed; thus, the implementing of time clocks constituted a mere substitution of one procedure for another as allowed under section 59-1603(2). The Union sued to compel the School Board to submit this change to binding arbitration under Rule 44 and Rule 31 of the master contract. The district court ordered binding arbitration. From that order the School Board appeals. The issues presented are: 1. Did the district court err when it required the School Board to submit to an arbitrator the question of whether it could substitute time clocks for the existing attendance procedure, pursuant to the provisions of the collective bargaining agreement between the parties? 2. Did the district court err when it required this issue to be the subject of negotiation, and if necessary, arbitra- tion under the Collective Bargaining for Public Employees Act, section 59-1601 et seq., R.C.M. 1947. The School Board argues the district court erred in sub- mitting the question of time clocks to arbitration. In McEwen v. Big Sky of Montana, Inc., Mont . , 545 P.2d 665, 668, 33 St.Rep. 79, 83, this Court discussed a situation where the determination of the district court was in question: "An appellate court's function in a case such as this was set forth in Hornung v. Lagerquist, 155 Mont. 412, 420, 473 P.2d 541, 546, wherein this Court said: " I * * * Our duty in reviewing findings of fact in a civil action tried by the district court without a jury is confined to deter- mining whether there is substantial credible evidence to support them. * * * ' "The meaning of 'substantial credible evidence' was thoroughly considered in Staggers v. U.S.F.&G. Co., 159 Mont. 254, 496 P.2d 1161. "In Hellickson v. Barrett Mobile Home Transp., 161 Mont. 455, 459, 507 P.2d 523, 525, this Court said: " I * * * In examining the evidence, we must view the testimony in a light most favorable to the prevailing party. [citations] However, while the presumption is in plaintiff's favor, he is also the appealing party and as such, the burden is upon him to overcome the pre- sumption of the correctness of the trial court's findings of fact.'" In reviewing the district court's findings, this Court needs only determine whether there is substantial evidence to support the findings. Unless there is a clear preponderance of evidence against such findings, the Court will not reverse. Crncevich v. Georgetown Recreation Corp., 168 Mont. 113, 541 P.2d The evidence presented by the School Board regarding an established sign-in attendance policy shows that only approximately 1/2 of the professional people covered by the contract used some type of sign-in procedure. The remaining professional members of the Union were required to do nothing. The School Board cites Rust Craft Broadcasting of New York, Inc. and National Association of Broadcast Employees & ~echnicians, AFL-CIO, 225 NLRB No. 65, 92 Labor Relations Reference ~anual (LRRM) 1576 (1976), as a case precisely identical to the instant case, and, in support of its position. While the facts are similar, a close reading reveals that in Rust Craft each employee was required to enter his or her working time manually on printed cards. Thus, while the change to a mechanical procedure for recording working time marked a departure from previous prac- tice, the rule itself remained intact. The instant case differs factually from Rust Craft. No attendance rule existed for each employee. The School Board failed to show an attendance procedure rule existed and every employee was subject to that rule. Instead, additional rules governing employee attendance were unilaterally promulgated, which substan- tially changed old rules on the same subject. Murphy Diesel Company v. N.L.R.B., 454 F.2d 303; N.L.R.B. v. Amoco Chemicals Corp., 529 F.2d 427. The burden to overcome the correctness of the district court's findings was upon the School Board. This presumption was not overcome. The School Board's second issue questions the district court's action in requiring the substitution of time clocks for the existing attendance procedure to be the subject of negotiation, and if necessary, arbitration. This Court recognizes that section 59-1603(2) grants to public employers certain management preroga- tives to operate and manage their affairs. Had the School Board established an attendance policy applying to every member under the union contract, then the unilateral initiating of a more dependable method to enforce this attendance policy would have been merely a change from previous practice, not a change from the established rule. Had there been an established rule applying to every union member, the substituting of time clocks as a more efficient method to record attendance, would be a managerial pre- rogative and not subject to mandatory and binding arbitration under section 59-1603 (2) . The facts of this case do not lead to that conclusion. The School Board initiated additional rules, substantially changing old rules on the same subject. The findings and conclusions of the district court are affirmed. - n Chief Justice / 1 F J e Concur:

July 29, 1977

09080522-eb3f-4dba-ac11-b91dc8efd283

WHITAKER v FARMHAND INC

N/A

13228

Montana

Montana Supreme Court

No. 13228 I N T H E SUPREME COURT OF THE STATE O F MONTANA 1977 DONALD WHITAKER, D O U G L A S WHITAKER, and G R A C E M. WHITAKER, P l a i n t i f f s and Respondents, F A R M H A N D , INC., a corporation, and H A L W. BICK, Defendants and Appellants. Appeal from: D i s t r i c t Court of t h e Seventeenth J u d i c i a l D i s t r i c t , Honorable Thomas Dignan, Judge p r e s i d i n g . Counsel of Record: For Appellants: Moulton, Bellingham, Longo and Mather, B i l l i n g s , Montana Ward Swanser argued, B i l l i n g s , Montana L-L~ I-~ly _ _ I I bl For Respondents : Robert Hurly argued, Glasgow, Montana John M. Kline, M i l e s City, Montana Submitted: May 4 , 1977 Decided. Hon. Peter G. Meloy, D i s t r i c t Judge, s i t t i n g f o r M r . J u s t i c e Frank I. Haswell, delivered the Opinion of the Court. This i s an appeal by defendants from a judgment of the d i s t r i c t court, P h i l l i p s County, in favor of p l a i n t i f f s . The l i t i g a t i o n a r i s e s from the s a l e of a c i r c u l a r sprinkling i r r i g a t i o n system t o p l a i n t i f f s by defendants. The d i s t r i c t court found f o r p l a i n t i f f s . The issues presented f o r review are: A . Did the d i s t r i c t court e r r i n finding l i a b i l i t y on behalf of Bick and Farmhand, Inc. i n s t r i c t l i a b i l i t y , negligence i n design, manufacture and i n s t a l l a t i o n , breach of warranties, and the implied warranty of f i t n e s s ? B. Did the court e r r i n rejecting the disclaimer of warranty and damages provision of the warranty and contract. C. Did the d i s t r i c t court e r r i n not applying the proper measure of damages t o a commercial loss case? P l a i n t i f f s are Donald Whitaker, Douglas Whitaker and Grace Whitaker, farm owners i n P h i l l i p s County, Montana. Defendants a r e Farmhand, Inc., and Hal. W. Eick, Farmhand's exclusive dealer i n the area. I n May 1972 p l a i n t i f f s instigated t h i s s u i t against defendants f o r breach of warranties, negligence i n design and i n s t a l l a t i o n , and s t r i c t l i a b i l i t y , a l l having t o do with a Farmhand i r r i g a t i o n system which p l a i n t i f f s bought through Bick. Bick counterclaimed f o r an amount alleged due from p l a i n t i f f s and crossclaimed f o r indemnity from Farmhand. Prior t o t r i a l Bick and Farmhand stipulated t h a t i f l i a b i l i t y i s found, they would be l i a b l e i n the following manner: 25% Bick and 75% Farmhand, with a t o t a l maximum l i a b i l i t y against Bick of $20,000. A nonjury t r i a l was held commencing on February 17, 1975. A t the close of t r i a l the p a r t i e s submitted proposed findings of f a c t and conclusions of law t o the court. The court adopted t h e p l a i n t i f f s ' proposed findings and conclusions and entered judgment f o r p l a i n t i f f s . A motion f o r a new t r i a l made by defendants was denied. Bick and Farmhand stipulated t h a t armh hand's attorney would perfect t h i s appeal f o r both defendants. ~ l a i n t i f f s ' ranch consists of 6,280 acres of deeded land and 2,000 acres of leased land. Prior t o the purchase of the i r r i g a t i o n system, p l a i n t i f f s farmed 1,000 acres and another 1,000 acres was i r r i g a t e d by a flood and dike i r r i g a t i o n system. Before the purchase of the i r r i g a t i o n system the 1,000 acres t h a t was i r r i g a t e d was roughly divided---200 acres i r r i g a t e d pasture, 250 acres a l f a l f a , and 600 acres hay and a l f a l f a . Also p r i o r t o the system p l a i n t i f f s carried approximately 400 head of c a t t l e and 100 head of sheep. P l a i n t i f f s f i r s t became interested i n obtaining a sprinkler i r r i g a t i o n system i n about 1964. They wrote t o several companies and obtained l i t e r a t u r e about several brands. I n the spring of 1969 they f i r s t contacted Farmhand requesting information about i t s systems. Farmhand sent p l a i n t i f f s a brochure on i t s i r r i g a t i n g systems and arranged f o r Bick, i t s authorized dealer, t o contact them. The brochure represented and described the system as: (1) It has portable,(2) it would provide f a l l pasture, (3) l i t t l e o r no land preparation was necessary, (4) it was dependable, (5) it was s a f e , (6) it was trouble f r e e , and (7) it had a long l i f e . O n September 15, 1969, Bick came t o p l a i n t i f f s ' ranch t o t a l k about Farmhand's systems. A t t h i s time Bick made representations about the system, i . e . , how it was designed t o be portable, e t c . P l a i n t i f f s took Bick on a tour of t h e i r farm and t o l d Bick of t h e i r plans f o r two c i r c l e s of sprinkler i r r i g a t i o n . P l a i n t i f f s a l s o took Bick t o meet t h e i r banker t o discuss t h i s project. A t a l a t e r date Eick took p l a i n t i f f s and t h e i r banker on a t r i p t o see some Farmhand systems i n operation. They saw several Farmhand sys tems , but none had towing wheels. P l a i n t i f f s then hired Bick t o do survey work necessary f o r s e t t i n g up the two c i r c l e s - f o r i r r i g a t i o n . Bick was t o b i l l p l a i n t i f f s $500 f o r the survey work i n the event p l a i n t i f f s did not purchase the system. I f p l a i n t i f f s decided t o buy the system, the work was t o be free. O n October 15, 1969, p l a i n t i f f s contracted with Bick t o buy the Farmhand 18 tower towable i r r i g a t i o n system. There i s some c o n f l i c t a s t o whether t h i s was an o r a l o r written contract. P l a i n t i f f s a t t h a t time made a down payment of $11,715. The t o t a l amount of the contract was $45,800. The Farrrrhand system i t s e l f was $25,540. The balance was f o r pump, engine, pipe and i n s t a l l a - tion. Most of the i n s t a l l a t i o n work was t o be done by Bick and h i s crew but p l a i n t i f f s agreed t o do some of the work t o keep the cost down. Eick ordered the system from Farmhand, complete with towing wheels. The system arrived a t ~ l a i n t i f f s ' farm i n November 1969, without the towing wheels. Bick's crew, under Farmhand super- vision, finished the majority of the erection of the machine i n November 1969. Weather prevented finishing. The Farmhand warranty was contained i n the operator's manual which arrived a t the time the system arrived, subsequent t o the i n i t i a l contract. O n December 15, 1969, the original contract was replaced by a formal written contract. P l a i n t i f f s paid $43,272.52 on these contracts. Prior t o e i t h e r contract with Farmhand, p l a i n t i f f s contracted t o s e l l the a l f a l f a off of the proposed south c i r c l e , beginning in 1971 f o r $12 per ton i n 1971 and 1972, and $25 per ton i n 1973 and 1974. Bick' s crew and p l a i n t i f f s completed erection of the machine in the spring of 1970. The system, without the towing mechanism, was f i r s t s t a r t e d i n May 1970 on the north c i r c l e . Immediately it was discovered t h e Cummin's pump engine and impeller were too small, a s was the propelling engine. Bick replaced the propelling engine a t no cost t o p l a i n t i f f s and ordered a larger Cummin's pump engine and impeller. The impeller was t o be f r e e t o p l a i n t i f f s and the pump engine was t o be replaced f o r $880. A t t h i s time a dispute arose between p l a i n t i f f s and Bick. The dispute concerned the amount of work i n erecting the system contributed by p l a i n t i f f s and the amount done by Bick; it a l s o concerned $3,267 withheld by p l a i n t i f f s from the contract price. This was never res6lved and p l a i n t i f f s refused t o pay the additional $880 f o r the larger pump engine. Bick then sent the new pump engine and impeller back and refused any further service t o p l a i n t i f f s . P l a i n t i f f s thereafter did business d i r e c t l y with Farmhand. Throughout the summer of 1970, the system only made 5 rotations. During each of these rotations the system stuck i n the d i t c h which Bick designed. Farmhand personnel came t o a s s i s t p l a i n t i f f s on two occasions during t h a t summer. The towing system arrived i n the spring of 1971. The system was not complete and p l a i n t i f f s had t o manufacture some p a r t s on t h e i r own. A Farmhand crew came t o p l a i n t i f f s ' farm i n the spring of 1971 t o do some repair work on the system. P l a i n t i f f s planted the south c i r c l e i n a l f a l f a t h a t spring, a year l a t e r than originally planned. O n the f i r s t attempt t o move the system from the north c i r c l e , where it had been, t o t h e south c i r c l e , p l a i n t i f f s noticed substantial damage caused by the move. The machine was moved twice more during 1971, back t o the north c i r c l e and back again t o t h e south c i r c l e . The l a s t move was some time i n July. During each of these moves, the machine was damaged and needed substantial repair before it could be used. I n l a t e July 1971, p l a i n t i f f s attended a meeting i n Billings with Farmhand representatives and Bick. The meeting was t o work out problems with the system and a l s o the problems between Bick and p l a i n t i f f s . A t t h i s meeting Farmhand representatives t o l d p l a i n t i f f s the towing mechanism was not working properly and the machine should not be towed. To provide f o r p l a i n t i f f s ' need f o r i r r i g a t i o n on the second c i r c l e Farmhand a t t h i s meeting offered t o s e l l p l a i n t i f f s a new Farmhand system f o r t h e reduced cost of $26,500 complete. This o f f e r was rejected by p l a i n t i f f s and/or t h e i r banker. The system was used i n the south c i r c l e during the years 1972 and 1973, when it was towed out t o make room f o r a new Valley system. I n early 1972, Farmhand offered t o s e l l p l a i n t i f f s a used Farmhand system f o r t h e i r second c i r c l e f o r $10,000 on a 50% recourse basis. This o f f e r , too, was rejected by p l a i n t i f f s and/or t h e i r banker. From t h i s point on p l a i n t i f f s ' relation- ship with Farmhand disintegrated. They never contacted Farmhand for additional service, nor did Farmhand tender any service o r further proposals. - 6 - l i a b i l i t y , negligence i n design, aanufacture and i n s t a l l a t i o l ~ , breach of express warranties, and the implied warranty of f i t n e s s . dc w i l l discuss these i n order. Z. S t r i c t l i a b i l i t y . This theory f i r s t came i n t o being because of the problem sf i:he lack of p r i v i t y i n warranty cases. 2 Restatement of Torts %d accepted t h i s theory i n $ 402A which reads: "(1) One who s e l l s any product i n a defective condition unreasonably dangerous t o the user o r consumer or t o h i s property I s subject t o l i a b i l i t y for physical harm thereby caused t o t h e ultimate ~ i s e r o r consumer o r t o h i s property, i f "a) the s e l l e r i s engaged i n the business of .jeLLi~lg such a product, and "b) it i s expected t o and does reach the user . ~ r zoilsumer without substantial change i n the condition In which it i s sold. ( 2 ) The rule s t a t e d i n Subsection (1) applies d Lthough "a) the s e l l e r has exercised a l l possible L d i e i-n the preparation and s a l e of h i s product, and b The user or consumer has not bought the pioduct from o r entered i n t o any contractual r e l a t i o n d t h the s e l l e r . " vlo~ltana adopted the Restatement i n Brandenburger v. Toyota 3ocor Sales, 162 Mont. 506, 513 P.2d 268. This decision provided qzh*t although the burden t o prove the defect i s on the p l a i n t i f f , i h i s burden can be met by circumstantial evidence and inferences cheref rom. W e have b r i e f l y discussed the doctrine of s t r i c t l i a b i l i t y brcdase it was plead and considered by the t r i a l court. O n dppeal i t s application is claimed a s e r r o r by defendants. t~ i s not reversible error when considered i n l i g h t of the !:acts of t h i s case. A more precise l e g a l analysis of the case ac the inception would more correctly have confined the course of the l i t i g a t i o n within the bounds discussed hereafter, where it properly belongs and upon which t h i s Court w i l l r e s t i t s determination. 11. Negligence i n design, manufacture and i n s t a l l a t i o n . The d i s t r i c t court i n i t s finding of f a c t No. 35(1) found t h a t the system "was so negligently,carelessly and recklessly manufactured, designed and i n s t a l l e d by the defendants t h a t it never operated f o r the purpose for which it was sold.'' The theory of negligence has been applied against the rernote manufacturer i n several cases, the leading one MacPherson v . Buick Motor Co., 217 N.Y. 382, 1 1 1 N.E. 1050. This doctrine has been accepted i n 2 Restatement of Torts 2d, $395. Montana hds followed t h i s r u l e i n Knudson v. Edgewater Automotive Divi- jion, 157 Mont. 400, 486 P.2d 596 and Duchesneau v. Silver B o w County, 158 Mont. 369, 492 P.2d 926. The f a c t s here c l e a r l y show such negligence. !~1. Implied warranties of merchantability and f i t n e s s f o r s u d r ~ i c u l a r purpose. The Uniform Commercial Code provisions f o r these warranties are 5ection 87A-2-314, R.C.M. 1947, f o r merchantability and section 31~-2-315, R.C.M. 1947, f o r f i t n e s s for a p a r t i c u l a r purpose. hey 87A-2-314. "Unless excluded or modified f c 9 ; * a warranty t h a t the goods s h a l l be merchantable i s implied i n a ~ o n t r a c t for t h e i r s a l e i f the s e l l e r i s a merchant with respect t o goods of t h a t kind. ' k fc fc ( 2 Goods t o be merchantable must be a t l e a s t S U i i l d S "(c) are f i t f o r the ordinary purposes f o r which s ~ h 300ds a r e used + c * +. 87A-2-315. "Where the s e l l e r a t the time of con- t r a c t i n g has reason t o know any p a r t i c u l a r purpose f o r which the goods a r e required and t h a t the buyer is relying on the s e l l e r ' s s k i l l o r judgment t o s e l e c t o r furnish suitable goods, there is unless excluded o r modified under the next section an implied warranty t h a t the goods s h a l l be f i t f o r such purpose." Most courts now follow the r u l e s e t f o r t h i n Henningsen v. Bloomfield Motors, Inc., 32 N . J . 358, lGlA.2d 69, which holds the remote manufacturer l i a b l e f o r implied warranties. The evidence supports the d i s t r i c t c o u r t ' s findings t h a t such implied warranties did e x i s t and they were breached. I V . Express Warranties. The Uniform Commercial Code, section 87A-2-313, R.C.M. 1947, provides i n pertinent p a r t : "(1) Express warranties by the s e l l e r a r e created a s follows : "(a) Any affirmation of f a c t o r p r ~ m i s e made by the s e l l e r t o the buyer which r e l a t e s t o the goods and becomes p a r t of the basis f o r the bargain creates an express warranty t h a t the goods s h a l l conform t o the affirmation o r promise. "(b) Any description of the goods which i s made a p a r t of the basis of the bargain creates an express warranty t h a t the goods s h a l l conform t o the description. "(c) Any sample o r model which i s made p a r t of the basis of the bargain creates an express warranty t h a t the whole of the goods s h a l l conform t o the sample o r model. "(2) It i s not necessary t o the creation of an express warranty t h a t t h e s e l l e r use formal words such a s t warrant' o r 'guarantee' o r t h a t he have a specific intention t o make a warranty * ; k * Jc." Such affirmations, promises o r descriptions were made by Bick t o p l a i n t i f f s . Such affirmations, promises o r descrip- tions were a l s o s e t f o r t h i n the Farmhand brochure. The law appears t o be well s e t t l e d t h a t a remote manufacturer without p r i v i t y with the purchaser i s l i a b l e f o r breach of warranty by advertising on radio and television, i n newspapers and magazines, and i n brochures made available t o prospective purchasers, i f the purchaser r e l i e s on them t o h i s detriment. Rogers v. Toni Home Permanent Co., 167 Ohio St. 244, 147 N.E.2d 612; Baxter v. Ford Motor Co., 168 Wash. 456, 12 P.2d 409, 88 A.L.R. 521; Randy Knitwear, Inc., v. American Cyanamid Co., 1 1 N.Y.2d 5, 181 N.E.2d 399. The Montana case c i t e d by defendants, Jangula v. United States Rubber Co., 147 Mont. 98, 410 P.2d 462, did not speak t o the point. I n another case c i t e d by defendants, Jacobson v. Colorado Fuel and Iron Corp., 409 F.2d 1263, the court held t h a t a statement i n a brochure did not give r i s e t o an express warranty under every condition. The court, however, implied t h a t it might very well give r i s e t o such a warranty i n some cases. Lander v. Sheehan, 32 Mont. 25, 79 P. 406, held t h a t whether a statement i s t o be treated a s an express warranty i s a f a c t t o be determined by the t r i e r of f a c t . The evidence here supports the d i s t r i c t c o u r t ' s finding t h a t Bick and Farm- hand made express warranties t o p l a i n t i f f s , and t h a t they were breached. Defendants contend the court erred i n rejecting the disclaimer of warranty and damage provision of the warranty and the contract. Defendants claim t h a t even i f the court did find such implied and express warranties, they were effectively disclaimed by the Farmhand warranty contained i n the erection manual. They r e l y on several Montana cases which upheld such disclaimers. S t a t e ex r e l . Mountain States Tel. & Tel, Co. v. D i s t r i c t Court, 160 Mont. 443, 503 P.2d 526; Ryan v. Ald, Inc., 146 Mont. 299, 406 P.2d 373; Spurgeon v. Jamieson Motors, 164 Mont. 296, 521 P.2d 924; R i e f f l i n v. Hartford Ins. Co., 164 Mont. 287, 521 675. See also: Section 87A-2-719, R.C. M. 1947. - 10 - The question before t h i s Court i s not the v a l i d i t y and enforceability of such disclaimers, rather it i s the timeliness of the disclaimer. The express and implied warranties were made t o p l a i n t i f f % p r i o r t o the entering i n t o of the contract on October 15, 1969. P l a i n t i f f did not and could not know of the disclaimer u n t i l November 1969, v~hen the erection manual came with the machine. A disclaimer o r limitation of warranty contained i n a manufacturer's manual received by the purchasers subsequent t o the s a l e does not l i m i t recovery f o r implied o r express warranties made p r i o r t o o r a t t h e time of the sale. Marion Power Shovel Co. v. Huntsman, 246 Ark. 152, 437 S.W.2d 784; Cooper Paintings & Coatings, Inc., v. S C M Corp., 62 Tenn.App. J @ G 13, 457 S.W.2d 864; Rehurek v. Chrysler Credit Corp., Fla. 2 262 So.2d 452; Dougall v. Brown Bay Boat Works and Sales, Inc., 287 Minn. 290, I78 N.W.2d 217. Even i f the Farmhand disclaimer had been made p r i o r t o the s a l e , such disclaimer would not have been e f f e c t i v e t o destroy the express warranties made i n the brochure and by Bick. I n 1 Anderson Uniform Commercial Code, $ 2-316:28, p. 698, it is stated: "When there i s a c o n f l i c t between a specific express warranty and a clause which i n general language ex- cludes a l l warranties, the specific warranty provision prevails ." Nor w i l l a disclaimer of warranty stop a purchaser from recovering on s t r i c t l i a b i l i t y . 2 Restatement of Torts 2d, 5 402A, Comment m; Arrow Transportation Co. v. Fruehauf Corp., The d i s t r i c t court found the implied and express warranties made by Bick and Farmhand remained v a l i d and enforceable. W e agree. - I1 - Defendants contenj. i f there is l i a b i l i t y and daniages allos~ed for loss of production such a r e not proper a f t e r the year 1971, the time the defendants claim the system would not serve the purpose for which i t was purchased. It i s the law of Montana that consequential damages cannot accrue past the time the injured party has knowledge of the f a i l u r e of the equipment and a reasonable time thereafter within which t o make other arrangements. Such i s the e f f e c t of the decision of Bos v. Dolajak, 167 Mont. 1, 7 , 534 P.2d 1258. The reasonable man rule of damages i s applied i n Baden v. Curtiss Breeding Service, 380 F.Supp. 243. Spackman v. Ralph M. Parsons Co., 147 Mont. 500, 414 P. 2d 918, points out t h a t i n awarding compensatory damages ingenious methods have been propounded and: "a +f * while such methods serve a s useful guides, the f i n a l answer r e s t s i n good sense rather than mechanical application of formulas." 147 Mont . 506. I n t h i s respect the d i s t r i c t court made i t s finding of f a c t , No. 46: "That P l a i n t i f f s made reasonable e f f o r t t o get said Farmhand system t o i r r i g a t e both t h e i r f i e l d s and t o get the Defendants t o f i x said system SO it would i r r i g a t e both f i e l d s ; t h a t when they once deter- mined t h a t the Defendants would not f i x said machine LO i r r i g a t e both f i e l d s , they made reasonable e f f o r t s t o acquire other means of i r r i g a t i o n ; and they did acquire one other pivot i r r i g a t i o n system; t h a t t h e i r financial condition prevented them from acquiring t h a t i r r i g a t i o n system any sooner; and t h e i r finan- c i a l condition prevents them from acquiring a second i r r i g a t i o n system up t o and including the date of t r i a l ; t h a t P l a i n t i f f s have done everything reasonably required of them t o cover and t o mitigate t h e i r damages . ' I The instant case i s not unlike the f a c t u a l situation of Bos v. Doiajalc, supra, where the Court found t h a t the s i l o 'was a 1 1 i.tern of property with special characteristics. It could not be replaced the next day a t the local hardware s t o r e o r automobile dealership .!' Here, the p l a i n t i f f s were engaged i n a large a g r i c u l t u r a l business and wanting t o improve produc- tion contracted f o r a complete new method of production of hay. To accomodate the new method defendant Bick surveyed the premises and made the necessary recommendations which required the removal of the old dike and flood system and ditches. I n reliance on the contemplated increase i n hay production p l a i n t i f f s contracted t o s e l l the hay t o be produced. Concerning the date p l a i n t i f f s became aware the machine would not work, it appears t h a t u n t i l the f a l l of 1973 p l a i n t i f f s with the urging of defendants attempted t o make the machine serve the purpose f o r which it was designed and sold. There was no evidence produced by defendants a s t o the e f f o r t s upon the p a r t of p l a i n t i f f s t o mitigate. The burden of proof a s t o mitigation is upon the defendants. Klemens & Son v. Reber Plumbing & heating Co., 139 Mont. 115, 360 P.2d 1005. This burden includes establishing t h a t p l a i n t i f f s could have mitigated the damages but f a i l e d t o do so. See: LTV Aerospace Corp. v. Bateman, Tex.Am1973, 492 S.W.2d 703. There i s substantial evidence the p l a i n t i f f s did not have the financial capability t o acquire other satisfactory devices t o accomplish the purpose f o r which they arranged t h e i r operation a s designed by the defendants u n t i l a f t e r the 1974 season. The d i s t r i c t court so found. This Court i s an appellate court and i s confined t o the record made before the d i s t r i c t court. The findings of f a c t and conclusions of law of the d i s t r i c t judge who heard the witnesses t e s t i f y , a r e t o be sustained i f there i s substantial credible evi- dence t o support them. Bender v. Bender, 144 Mont. 470, 397 P.2d 957; Spencer v. Robertson, 151 Mont. 507, 445 P.2d 48; Cope v. Cope, 158 Mont. 388, 493 P.2d 336.. The record here discloses substantial evidence t o support the d i s t r i c t c o u r t ' s findings, conclusions and judgment. The judgment i s affirmed I. Haswell. W e Concur: . . Chief J u s t i c e I \

August 2, 1977

e82e7991-dce1-4013-bd8c-aba0f8a5ca11

PURINGTON v SOUND WEST

N/A

13632

Montana

Montana Supreme Court

N o . 13632 I N THE SUPREME C O U R T O F THE STATE O F M O N T A N A 19 77 MICHAEL PURINGTON, P l a i n t i f f and Respondent, -vs- S O U N D WEST, A Corporation, Defendant and Appellant. Appeal from: District Court of t h e Fourth J u d i c i a l D i s t r i c t , Honorable Edward T,Dussault, Judge presiding. Counsel of Record: For Appellant: Jordan, Sullivan and Baldassin, Missoula, Montana Lee A. Jordan argued, Missoula, Montana For Respondent : Worden, Thane and Haines, Missoula, Montana Ronald A. Bender argued, Missoula, Montana Submitted: K A Y 26 1977 Decided: JUN 2 9 1977 Filed: F J U N 2 9 1 9 n M r . Justice Frank I. Haswell delivered the Opinion of the Court. This is an appeal from the d i s t r i c t court's denial of defendant's motion t o set aside a default judgment entered i n Missoula County. Plaintiff is Michael Purington, a professional musician with the Lost Highway Band, who purchased a sound system for $1,350 from defendant Sound West, a corporation,in the summer of 1975. In the f a l l of 1975 the sound system ceased to work properly and eventually ceased functioning altogether. According t o the complaint, defendant assured plaintiff the malfunction would be repaired,but plaintiff was compelled t o obtain a substi- tute sound system. Plaintiff alleged that on November 3, 1975, defendant represented t o him that i f he would return the sound system, defendant would refund the purchase price. Plaintiff alleged he returned the sound system, but no refund was made. On April 20, 1976 plaintiff filed a complaint against de- fendant i n three counts: Count I sought refund of the $1,350 purchase price with interest a t 6% from November 3, 1975 t o date of judgment; Count I1 sought damages of $10,000 for breach of implied warranties of merchantability and fitness for a particular use; and, Count 1 1 1 sought $10,000 compensatory damages d and $10,000 punitive damages for false repres&ations by defendant inducing plaintiff t o return the sound system to defendant. The sheriff's return showed personal service was made on J i m Rhines, president of defendant corporation, on April 21, 1976. On M a y 20 default of defendant was entered by the clerk of court. On June 10 plaintiff testified i n support of h i s com- plaint, but h i s testimony was not reported and is not before us. O n June 24 a default judgment was entered by the d i s t r i c t court awarding plaintiff $1,350 with interest a t 8% from July 1, 1975 to date of judgment; damages of $3,000 for loss of wages, use and reputation; andplnitive damages of $1,500. Notice of entry of judgment was mailed t o defendant on June 25. O n July 1 defendant filed a written motion to set aside the judgment on the grounds defendant was never served i n the action and had no notice of the action a t any time. The motion also sought a hearing and a stay of execution pending hearing. On the same day, the d i s t r i c t court s e t a hearing for July 1 2 and stayed execution on the judgment. On July 12 a substitution of attorneys for defendant occurred. A t the commencement of the hearing on that date, defendant's new attorney moved the d i s t r i c t court t o add two additional grounds to its motion t o set aside the default judgment: (1) Inad- vertence and excusable negligence of defendant, and (2) that the default judgment differs substantially from the prayer of the complaint. A n affidavit of merits was filed together with a proposed answer to p l a i n t i f f ' s complaint. The substance of these documents was that defendant had not been served i n the action and defendant had a meritorious defense to the action, viz. the mal- functioning of the sound system was caused entirely by p l a i n t i f f ' s misuse of the equipment. J i m Rhines, president of defendant corporation, testified i n support of the motion t o s e t aside the default judgment. The g i s t of his testimony was that he had never been served i n the action; that had he been served, he would never have permitted the default; and that he had a meritorious defense to the action, The d i s t r i c t court continued the hearing for the purpose of locating the sheriff's deputy who signed the certificate of service, O n September 27 plaintiff filed a motion to dissolve the stay order and permit execution on the judgment. Attached to t h i s motion was the affidavit of the sheriff's deputy, who had been located by p l a i n t i f f ' s attorney in the state of Utah, that she personally served J i m Rhines, the president of defendant corporation, with a copy of the summons and complaint i n the action on April 21, 1975, in the offices of defendant a t 2701 Brooks Street i n Missoula, Montana. A further hearing was held on September 30. A t t h i s hearing Rhines testified again. H e again denied he had been served and indicated only two other suits against the corpora- tion had gone by default, one for $300.60 and one for $133. H e testified that these defaults were permitted on advice of counsel as the costs of defense would exceed the amounts sued for. A t the conclusion of the hearing, defendant's motion to set aside the judgment was denied. Plaintiff's motion to dissolve the stay of execution was denied. On October 28, defendant filed its notice of appeal from the order of the d i s t r i c t court, Missoula County, denying de- fendant's motion to set aside the default judgment. Defendant alleges an abuse of discretion by the d i s t r i c t court i n four particulars: 1) Refusing t o s e t aside the default judgment on the grounds of defendant's inadvertence o r excusable neglect. 2) Awarding interest greater than prayed for i n the complaint. 3) In granting any judgment on Counts I1 and 1 1 1 . 4 ) I n awarding punitive damages i n an action upon a contract. Rule 55(c), M.R.Civ.P., provides i n pertinent part: "For good cause shown the court may s e t aside an entry of default and, i f a judgment by default has been entered, may likewise set it aside i n accordance with Rule 60(b) * * *.I1 Rule 60(b), M.R.Civ.P., provides i n relevant part: "* * * upon such terms a s are just, the court may relieve a party * * * from a final judgment * * * for the following reasons: (1) mistake, inadvertence, suprise, or excusable neglect * * *." A motion to s e t aside a default judgment is addressed t o the sound discretion of the t r i a l court and t h i s Court w i l l not interfere except upon a showing of manifest abuse. Keller v. Hanson, 157 Mont. 307, 485 P.2d 705; Johnson v. Matelich, 163 Mont. 329, 517 P.2d 731. Here the only showing of inadvertence or excusable neglect was the testimony of J i m Rhine that he had never been served i n the action. To the contrary was the certificate of service of the deputy sheriff and the absence of any evidence that defendant attempted t o locate her, depose her, or secure her testimony i n person. It is axiomatic that the burden of proof i s on the moving party, here the defendant, to establish inadvertence or excusable neglect. The testimony of J i m Rhines created no more than a conflict i n the evidence on the issue of service which was resolved against defendant by the t r i a l judge. Under such circumstances, w e find no abuse of discretion by the t r i a l judge i n refusing to set aside the default judgment on t h i s ground. A n error i n awarding interest on the purchase price of the sound system is clear on the face of the record. The prayer i n p l a i n t i f f ' s complaint asks for interest a t the rate of 6% per year on $1,350 from November 3, 1975 to date of judgment. The judgment awards interest a t the rate of 8% per year on $1,350 from July 1, 1975 t o date of judgment. Rule 54(c), M.R.Civ.P., provides: "A judgment by default shall not be different i n kind from or exceed i n amount that prayed for i n the demand for judgment. * * *I1 Accordingly, the interest award is ordered amended i n conformity with the prayer i n the complaint. The third claim of error is that Counts I1 and I11 f a i l t o allege any damass or cause of action. I n our view Count 11 clearly states a claim for breach of implied wananties and seeks $10,000 damages by reason thereof. W e also find Count I11 states a claim for relief based on false representations by defendant and seeks $10,000 campensatory and $10,000 punitive damages therefor. However, w e find that on its face the judgment awarding damages on those counts i s beyond the power of the d i s t r i c t court to award. On Count 11 the d i s t r i c t court made a specific finding that "the Plaintiff has been damaged i n the amount of Three Thousand and ~ o / 1 0 0 Dollars ($3,000.00) for loss of wages, use, and reputation" and awarded damages i n that amount. Such damages for breach of warranties are defined as incidental and consequen- t i a l damages i n the Uniform Commercial Code. Section 87A-2-715, R.C.M. 1947. Also see sections 87A-2-11 and 87A-2-714, R.C.B. 1947. They are special damages, not general damages. The distinction is---special damages are the natural but not necessary result of the wrong or breach; whereas general damages are damages the law would impute as the natural, necessary and logical consequence of the wrong or breach. 25 C.J.S. Damages 5 131. Special damages must be specifically pleaded t o be recover- able. Rule 9(g), M.R.Civ.P. Here, these items of special damages were not pleaded, defendant had no notice that special damages were claimed, and the d i s t r i c t court had no power or authority to award special damages in i t s default judgment. The award of $3,000 damages for these items is ordered stricken from the judgment . The f i n a l claim of error concerns the award of $1,500 punitive damages on Count 1 1 1 . Defendant contends punitive damages are not recoverable i n an action arising from contract, citing section 17-208, R.C.M. 1947. W e have no quarrel with this general proposition or this statute. However, Count 1 1 1 is based on t o r t , not contract, being a claim for damages based on false representations of a refund of the purchase price, i f plaintiff would return the sound system. See Paulson v. Kustom Enterprises, Inc., 157 Mont. 188, 483 P.2d 708. Again, however, w e find that the judgment on i t s face is beyond the power and authority of the court t o the extent it awards plaintiff punitive damages. Punitive damages cannot be awarded where there are no actual damages. Gilham v. Devereaux, 67 Mont. 75, 214 P. 606. Here the judgment denied p l a i n t i f f ' s claim of actual or compen- satory damages on Count 1 1 1 , so an award of punitive damages was beyond the power or authority of the d i s t r i c t court. The award of $1,500 punitive damages is ordered stricken from the judgment . This cause i s remanded t o the d i s t r i c t court for entry of judgment i n accordance with t h i s opinion; or a t the election of plaintiff, within 15 days of the date hereof for vacation of the entire judgment, the f i l i n g and service of an amended com- plaint and adversary r e t r i a l . Each party shall bear i t s own costs. Justice

June 29, 1977

4c6a21f5-0fb7-41fb-8673-b9fc6734017c

SMITH SATTERFIELD v ZEPP FARNE

N/A

13118

Montana

Montana Supreme Court

No. 13118 I N THE S U P R E M E COURT O F THE STATE O F MONTANA 1 9 7 7 PERL SMITH, S. C H A R L E N E SMITH, and EVERETT SATTERFIELD, P l a i n t i f f s and Respondents, W I L B U R J. ZEPP, W E S L E Y FARNER, C. E. K N O W L E S , and WOLVERINE M I N I N G , INC., a Montana corporation, Defendants and Appellants. Appeal from: D i s t r i c t Court of t h e Third J u d i c i a l D i s t r i c t , Honorable Robert Boyd, Judge presiding. Counsel of Record: For Appellant: Crowley, Haughey, Hanson and Toole, B i l l i n g s , Montana Stephen Foster argued, B i l l i n g s , Montana Boone, Karlberg and Haddon, Missoula, Montana Sam E. Haddon argued, Missoula, Montana For Respondents: William R. Taylor , Deer Lodge, Montana Radonich, Brolin and Reardon, Anaconda, Montana John N. Radonich argued, Anaconda, Montana ?&It;L. "gri - . Filed: Submitted: April 2 0 , 1977 Decided : U G z Isn Mr. Chief Justice Paul G. Hatfield delivered the Opinion of the Court. This is an appeal by defendants from a district court judg- ment granting forfeiture of a contract for purchase of mining prop- erty by defendants and cancellation of a deed to a number of patented and unpatented mining claims. In 1964, plaintiff Perl Smith purchased numerous patented and unpatented mining claims in Granite and Powell Counties known as the "Master Mine". Plaintiff thereafter obtained a personal bank loan and mortgaged the Master Mine property as security. When plaintiff failed to repay the loan, the bank obtained a judgment of foreclosure. The property was sold at a foreclosure sale on May 28, 1971, after which plaintiff's sole interest in the property was a year's statutory right of redemption under section 93-5835, R.C.M. 1947. In late April, 1972, plaintiff met with defendants Zepp and Farner and discussed the sale of the Master Mine. On May 15, 1972, the parties entered into a contract whereby plaintiff agreed to sell, and defendants agreed to purchase, the Master Mine properties. As consideration for plaintiff's granting of his ownership rights in the property to defendants, defendants agreed to pay approximately $69,000 for the redemption of the first mortgage on the Master Mine property, and to pay $31,455 to various creditors of plaintiff. In addition, defendants agreed to pay plaintiff Perl Smith a monthly consultation fee of fifteen percent (15%) of the net operating profit of the Master Mine. The parties contracted that defendants would pay the 15% consultation fee to plaintiff Perl Smith or to his wife, plaintiff Charlene Smith, during their lifetimes; if both plaintiffs predeceased their son, defendants agreed to pay the son a commission of 7-1/2% of the net profits. To insure that the income from the mine, and consequently, the consultation fee or commission, were maximized, defendants agreed to produce an average of 300 yards of material each working day. The material would then be taken to the mine's washing plant where the gravel would be washed from the gold. There was not sufficient machinery at the gold mine to excavate 300 yards of material per day, but defendants agreed to purchase the larger Caterpillar, dragline with three yard bucket, and dump truck neces- sary to achieve a 300 yard per day production level. The parties provided in the contract that in lieu of the consultation fees or commissions to be paid from the net mining profits, they might at a later date negotiate a fixed monthly pay- ment. In case of any dispute between the parties as to the provi- sions of the contract, plaintiff Per1 Smith and defendants agreed to submit the controversy to arbitration. The contract also contained a provision which provided for a reversion of the property to the seller if defendants defaulted in their "payment of said property", and failed to cure their default within thirty days from receiving the seller's notice of default . After plaintiff and defendants signed the contract, plain- tiff fully performed his contract obligations. Plaintiff gave to defendants a quitclaim deed for all his interests in the Master Mine property and the buildings thereon. The buildings consisted of a main building with dining room, kitchen, bedrooms, showers, five furnished cottages, an assay building, and several other shops, light plants, storage and machinery repair buildings. The land consisted of approximately 360 acres of patented and 1,680 acres of unpatented mining claims. According to a local appraiser, the mining land was also valuable for recreation, timber and livestock grazing. The appraiser set the value of the land on ~ebruary 12, 1968, at approximately $148,000, excluding mineral rights. ~ccording to the report of a geophysicist who took random samples of the earth at the mine site, the property contained an estimated $615 million worth of gold and other noble metals. Defendants paid the approximately $69,000 necessary to redeem the property from the mortgage foreclosure and paid the approximately $31,455 of plaintiff Per1 Smith's debts, as they had agreed to do in the contract. Defendants also successfully prepared the property for mining, by clearing the mine road of snow, repair- ing damaged equipment, and building dams and settling ponds so as to comply with state and federal environmental regulations. Defend- ants thereafter, however, failed to meet the contract condition that required them to produce 300 yards of material each day. It was defendants' failure to satisfy this contractual provision which gave rise to plaintiff's successful lawsuit in district court, and defendants' appeal to this Court. At the time that defendants commenced mining operations on July 16, 1972, they had not acquired the equipment necessary to remove 300 yards of material each day. Rather than using the three yard or bigger dragline that defendants had agreed to obtain, defendants provided a 3/4 yard dragline for excavation of gravel. The gravel was then hauled from the excavation pit to the washing plant in a truck which held five yards of material. Defendants hauled six to eight truckloads of material per day, so that total daily mining production averaged between thirty and forty yards. In August, 1972, defendants twice negotiated without suc- cess for the purchase of used large draglines. Defendants also ran advertisements in various Montana newspapers and talked to heavy equipment dealers regarding the purchase of a Caterpillar. These efforts likewise were unsuccessful, and defendants continued to mine only thirty to forty yards per day until late August, 1972. On August 30, 1972, the man whom defendants had hired to operate the Master Mine resigned from his job because he felt that the equipment at the mine was grossly inadequate. At that time, after little more than one month of mining thirty to forty yards of material daily, defendants ceased their mining operation. For the entire month of mining, defendants recovered one ounce of gold. Because expenses of operation far exceeded mining income, there was no net profit, and plaintiff received nothing under the contract provision granting him a 15% commission fee from net mining profits. On October 29, 1972, plaintiff Perl Smith and defendant C. E. Knowles attempted without success to negotiate a monthly payment to plaintiff to replace the contract's percentage of net profit commission clause. This matter was not submitted for arbi- tration under the contract's arbitration clause. Plaintiff Perl Smith sent defendants notice of default in a letter dated March 15, 1973. Plaintiff stated in the letter that defendants were in breach of the contract for failure to mine 300 yards of material per working day. Plaintiff alleged that if 300 yards per day were mined, much gold and silver would be recovered and a net operating profit would be received from which plaintiff could receive his monthly percentage commission payment. Defendants failed to cure the alleged default within the thirty days allowed in the contract. Plaintiffs on November 13, 1973, filed a complaint in district court, Granite County, alleging that defendants had breached their contract and asking that defend- ants forfeit all rights under the contract and all money paid pursuant to the contract, and that title to the Master Mines property be quieted in plaintiffs. On December 9, 1974, the case was tried in district court before the Honorable Robert J. Boyd, sitting without a jury. he district judge found that the 300 yard per day production require- ment was a basic term of the contract which required strict com- pliance by defendants. Defendant2 failure to produce 300 yards of material per day was caused, the judge found, by their failure to obtain adequate equipment. The judge concluded that defendants' failure to produce more than fifty yards of material per day when the mine was worked, and their total failure to mine the claims in 1973 and 1974 was a substantial failure of performance. The judge concluded, as a matter of law, that the contract required that defendantsf failure to mine 300 yards of material per day would result in cancellation of the contract, cancellation of the deed transferring the property from Perl Smith to defendants, and rever- sion of the title to the mining claims to plaintiffs Perl Smith and Everett Satterfield. Defendants assert that the district court erred in ordering a forfeiture of their rights under the contract, which resulted in the loss to defendants of both the mining property and $96,000 in contract payments. Defendants claim that the evidence failed to show that a significant breach of the agreement occurred. Defend- ants next assert that, even if they did significantly breach the contract, forfeiture was an improper remedy. Defendants' claim that the evidence failed to support a finding that they significantly breached the contract is without merit. The evidence at trial clearly showed that defendants failed to meet the express contract requirement that they produce 300 yards of material per working day. Defendants do not assert that they performed their contractual duty; rather, they claim that their failure to perform was excused due to impossibility of performance and commercial frustration. The general rule is that, where a party to a contract obligates himself to a legal and possible performance, he must perform in accordance with the contract terms. Brown v. First Fed. Savings and Loan Assn., 154 Mont. 79, 460 P.2d 97. Defend- ants, however, would have had no duty to perform their contractual promise to produce 300 yards of material daily if, due to facts of which neither plaintiffs nor defendants had reason to know, the promise was impossible of performance at the time the contract was made. 2 Rest. Contracts, section 456. Impossibility encom- passes "not only strict impossibility but impracticability because of extreme and unreasonable difficulty, expense, injury or loss involved." 2 Rest. Contracts, section 454. Defendants assert that it was a basic assumption of all the parties to the contract that the Master Mine contained substan- tial gold, and that when their aborted efforts to mine yielded only about one ounce of gold, their failure to produce 300 yards of material daily was excused. Defendants contend that even if they had produced the ,300 yards per day, there would have been no profit from which plaintiffs could receive a commission, because there was no gold. Defendants therefore concluded that it was impossible to operate the mine at a profit. Defendants cite 2 Rest. Contracts, section 460, which says: "(1)Where the existence of a specific thing * * * is, either by the terms of a bargain or in the contemplation of both parties, necessary for the performance of a promise in the bargain, a duty to perform the promise (a) never arises if at the time the bargain is made the existence of the thing * * * within the time for seasonable performance is impossible * * *." The flaw in defendants' argument, however, is that they never proved that the "specific thing", gold, did not exist in the Master Mine properties in sufficient quantities to make a placer mining operation profitable. Plaintiffs had no duty to prove that marketable quantities of gold did exist in the Master Mine. Rather, the burden of proving impossibility rested on the party asserting the defense. Hensler v. City of Los Angeles, 124 Cal.App.2d 71, 268 P,2d 12. Defendant Wilbur Zepp testified that only one ounce of gold was recovered. Yet defendants presented no expert testi- mony to establish that production of merely 30-40 yards of material per day for one month was conclusive evidence that substantial quantities of gold did not exist on the property. Defendants did not introduce any evidence of geologists' or geophysicists' reports as to the minerals contained in the land. Furthermore, a geophysi- cist's report prepared at the request of plaintiff Per1 Smith prior to the sale of the property indicated that the Master Mine contained valuable gold and other noble metals. Defendants, during the one month in which they operated the mine, were unable to achieve a 300 yard per day production because their mining equipment was insufficient. "The party pleading im- possibility must demonstrate that it took virtually every action within its powers to perform its duties under the contract." Kama Rippa Music, Inc. v. Schekeryk, 510 F.2d 837. Defendants explained that they advertised in the state newspapers and con- tacted two private parties and one dealer concerning larger equip- ment, but failed to explain why other sources in nearby states were not contacted. A final reason why the failure of defendants to satisfy the contract provision requiring 300 yards of production per day was not excused due to impossibility is that the possible absence of gold at the mine was a risk of the bargain. It is uncertain whether or not an appreciable amount of gold exists at the Master Mine. In a gold mining venture such as this one, however, where defendants failed to inspect the mine or geologically test the soil before purchase, the possibility existed that the rewards might range from lucrative to nonexistent. Defendants could have hired geologists to study the mineral content in the Master ~ i n e prior to signing their contract with plaintiff rather than relying solely on geological reports prepared several years previously for Per1 Smith. This they failed to do. 2 Rest. Contracts, section 456,excuses a promisor from performing a contractual promise due to impossibility only when the promisor and promisee had no reason to know of the impossibility when they contracted. In this case, the possibility of an unprofitable mine should have been foreseen by defendants and specifically provided for in the contract. It is possible that the Master Mine properties contain so trifling an amount of gold that further mining would be economically disastrous. If this is the case, defendants did not prove it at trial. If such is the case, however, defendants merely made a bad bargain by not providing for this very foreseeable contingency in the contract or by themselves inspecting and testing the mining property before the purchase. This Court may not rewrite the terms of the contract in this case. Rather, we follow the law as stated by this Court in Hein v. Fox, 126 Mont. 514, 520-521, 254 P.2d 1076: "Courts can give no solace where parties to a contract find themselves minus expected profit through failure to exercise care in draw- ing up such contract. What this court said in Hinerman v. Baldwin, 67 Mont. 417, 433, 215 Pac. 1103, 1108, well applies here, viz: ' * * * The court has no right to make a contract for the parties different from that actually entered into by them. * * * "'Whether the plaintiff made a good or a bad bargain is of no concern to the court. * * * Merely because the terms of the contract now appear unreasonable or burdensom affords no rea- son to permit him to avoid his contract. * * * " I * * * The duty of the court is to enforce contracts, not to make new ones for the parties, however unwise the terms may appear.'" The doctrine of commercial frustration is also inapplicable to the facts of this case. To relieve a promisor from a duty to perform under this doctr-ine, the expected value of the performance must be destroyed by an unforeseeable, intervening event. Lloyd v. Murphy, 25 Cal.2d 48, 153 P.2d 47. The possibility that there is negligible gold at the Master Mine was foreseeable at the time the parties contracted. Furthermore, no intervening event has reduced the quantity of gold at the mine. Defendants are not excused from breaching their contractual duty to mine 300 yards of material daily. The remaining issue on appeal is the propriety of forfeiture as a remedy for defendants' breach. The district judge based his judgment that the defendants should forfeit their payments and rights under the contract on the contract provision which stated in pertinent part that "In case of default by purchaser in payment of said property, it shall immediately revert to the seller, Perl Smith, provided first seller gives purchaser thirty (30) days' written notice of any default and purchaser shall then have thirty (30) days from receipt of said notice to remedy said default * * *." Plaintiff Perl Smith did give defendants written notice of their default in failing to produce 300 yards of material per day. De- fendants did fail to remedy the default within thirty days of receiving the notice. Defendants' default, however, was not of the type that would trigger the contract's forfeiture provision. Montana law does not favor forfeitures. Table Mtn. Farms v. Burton, 128 Mont. 434, 278 P.2d 213; State ex rel. Green v. Bird, 62 Mont. 408, 205 P. 241. Section 58-212, R.C.M. 1947, provides : "A condition involving a forfeiture must be strictly interpreted against the party for whose benefit it is created." This Court has consistently given section 58-212 and its predecessor statutes an expansive interpretation, enforcing for- feiture provisions only in situations where "the strict letter of the contract requires it" and language of forfeiture is "plainly expressed". Finley v. School District No. 1, 51 Mont. 411, 416, 153 P. 1010 (1915); Lipsker v. Billings Boot Shop, 129 Mont. 420, 288 P.2d 660; Cedar Creek Oil & Gas Co. v. Archer, 112 Mont. 477, 117 P.2d 265. Interpreting the forfeiture clause against plaintiffs, the parties for whose benefit the provision was created, it can hardly be said that the contract requires forfeiture for failure to produce 300 yards of material each working day. The provision required reversion of the property to the seller "In case of default by purchaser in payment of said property * * *." Defendants made all the'payments for the property" that were required under the contract. These payments included furnishing the redemption price for the property, and paying various debts of Per1 Smith. The production clause on which defendants defaulted, directly related to a consultation fee or commission to be paid from the net mining profits. The forfeiture clause, strictly interpreted, did not relate to this contract provision or to any provision other than the property payment clauses. Section 58-212, R.C.M. 1947, is borrowed from Section 1442, Ca1.Ci.v. Code. The California Court of Appeals refused to declare that mine buyers' contract rights and purchase moneys were for- feited in a case in which the buyers failed to perform a contract obligation to mine for a minimum amount of hours per month. The court stated that "if an agreement can be reasonably interpreted so as to avoid forfeiture, it is the duty of the court to avoid it." Nelson v. Schoettgen, 1 Cal.App.2d 418, 36 P.2d 665. Plaintiffs claim that the clause is not a forfeiture clause, but is a reversion clause for which the rules regarding forfeitures are inapplicable. A forfeiture by any other name is still a forfeiture. There has been a forfeiture where parties such as defendants lose all the money they have paid on a contract, as well as all their rights and interests in the property. Although plaintiffs and defendants have themselves provided in their contract for all future contract disputes to be decided by arbitration, this Court cannot order that the question of damages be submitted to arbitration, pursuant to this contract clause. The parties may agree that this specific issue of the "value" of damages be submitted to binding arbitration, and then they will be bound by the arbitrators' decision. School District No. 1 v. Globe & Republic Ins. Co., 146 Mont. 208, 404 P.2d 889. The arbitration provision as written, however, was nearly identical to the arbitration clause which this Court held to be unenforce- able in Green v. Wolff, 140 Mont. 413, 372 P.2d 427. Any contract provision which states that all future contract disputes shall be submitted to arbitration is void under section 13-806, R.C.M. 1947, which invalidates any contract provision restricting access to the courts. Although arbitration may be the most speedy and economical means available to parties for a binding resolution of their disputes, this Court cannot enforce as broadly worded an arbitration clause as exists in this contract until the legislature amends or repeals section 13-806. The legislature intended, in section 17-301, R.C.M. 1947, to insure that one who is injured by another's wrongful breach of contract has a right to recover such damages as will make him whole again. Bos v. Dolajak, 167 Mont. 1, 534 P.2d 1258. The contract in this case provided that plaintiff Perl Smith, his wife, or son would receive consultation fees or commissions for a limited period of time, measured by how long they should live. plaintiffs can never recover those lost years of fees or commissions from net profits except by way of damages. The proper measure of damages so as to make the seller in this case "whole again", therefore, is the amount which the district judge finds that plaintiff Perl Smith would have received in consultation fee royalties from net mining profits if defendants had produced 300 yards of material each working day since the property was made ready to be mined in 1972, plus interest from the date the royalties would have accrued. See Freeport Sulpher Co. v. American sulph@-r Royalty Co. , 117 Tex. 439, 6 S.W.2d 1039. Plaintiffs have the burden of proving, by competent evidence, the amount of damages which they suffered due to defend- ants failure to produce 300 yards of material during each working day. Rigney v. Swingley, 112 Mont. 104, 113 P.2d 344. Plaintiffs will not be denied recovery merely because the damages in this case are difficult to ascertain, as long as they prove damages with reasonable certainty. In Brown v. Homestalte Exploration Co., 98 Mont. 305, 337, 39 P.2d 168, this Court stated plaintiff must provide the district judge with: "A reasonable basis for computation and the best evidence obtainable under the circumstances and which will enable [the judge] to arrive at a reasonably close estimate of the loss * * *." (Bracketed material substituted.) Such evidence may include, but is not limited to, the testimony of geologists and geophysicists who test the mine's soil, the past history of the mine, the cost of mining 300 cubic yards of gravel per day and the value of gold and other noble metals in the soil during the time that defendants failed to mine. Although plaintiffs in their complaint asked solely for forfeiture as a remedy for defendants' contract breach, the trial judge must grant such other relief as is proper under the proven facts of the case. Rule 54(c), M.R.Civ.P., which is identical with Rule 54 (c) , Fed. R.Civ.P., provides: "* * * Except as to a party against whom a judgment is entered by default, every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in his pleadings." In Garland v. Garland, 165 F.2d 131, the plaintiff, in her complaint, asked soleJyfor recission and cancellation of a contract. The court held that Rule 54(c), Fed.R.Civ.P., authorized the trial court to grant the plaintiff damages, as well as specific perfor- mance, even though the plaintiff did not request that relief in her pleadings. In the case at bar, plaintiffs have proven that defendants breached their contract and have made a case for possible damages, though this was not the relief they requested. Although they are not entitled to forfeiture, under Rule 54(c), M.R.Civ.P., the trial judge has the duty to give plaintiffs a hearing on damages, the remedy to which they are entitled under the facts proven at trial. See also: Columbia Nastri & Carta Carbone v. Columbia Mfg. Co., 367 F.2d 308; Hutches v. Renfroe, 2 0 0 F.2d 3 3 7 . The district judge's findings that defendants breached their contract is affirmed. The judge's ruling that defendants forfeited all rights and money paid under the contract is reversed. The cause is remanded, with instructions to proceed in accordance with this opinion. vw , . 4 & /- Chief Justice i

August 2, 1977

0142b955-d1a9-4f34-b49a-c4fa25514b67

DIERUF v CITY OF BOZEMAN

N/A

13645

Montana

Montana Supreme Court

No. 13645 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 GEORGE DIERUF , Petitioner, -vs- THE CITY OF BOZEMAN, et al., Respondents. Appeal from: District Court of the Eighteenth Judicial District, Honorable Jack D. Shanstrom, Judge presiding. Counsel of Record: For Petitioner: Drysdale, McLean and Screnar, Bozeman, Montana James J. Screnar argued, Bozeman, Montana Bennett and Bennett, Bozeman, Montana Lyman Bennett Jr. argued, Bozeman, Montana McKinley Anderson argued, Bozeman, Montana For Respondents: Berg, Angel, Andriolo and Morgan, Bozeman, Montana Ben E . Berg argued, Bozeman, Montana Mike Greely, Attorney General, Helena, Montana . . I 4 , \ Filed: Submitted: May 24, 1977 Decided: . 4 % - * < * 4 Clerk Mr. Justice John Conway Harrison delivered the Opinion of the Court. petitioner George Dieruf sought a writ of mandamus to compel the city of Bozeman to submit a proposed ordinance and resolution to the electors of the city of Bozeman. Writ of mandamus was denied, petitioner appeals. On July 21, 1976, the city commission of the city of Bozeman (commission) passed Ordinance No. 962 adopting a formula for asses- sing property for the purpose of creating an offstreet parking facil- ity. On July 28 the Commission passed and adopted Resolution No. 1808 creating special improvement district No. 565 to establish that facility. Thereafter signed referendum petitions were presented to the Commission demanding both the ordinance and resolution be submitted to the electors of the city of Bozeman for their approval or rejec- tion. On August 25, 1976, at a regular meeting of the Commission, the petitions were rejected by the Commission for the reason that under section 11-3237, R.C.M. 1947, referendum petitions must con- tain the signatures of 25% of the registered voters of a city before it becomes the duty of the Commission to order an ordinance repealed or submitted to the voters. Here, the petitions contained only 18% of the electors of the city of Bozeman. Petitioner Dieruf alleges that section 11-3237, R.C.M. 1947, is inapplicable and the question of whether the matter should be submitted is controlled by section 11-1107, R.C.M. 1947, arguing that the submission of Resolution No. 1808, creating special improve- ment district No. 565, needs only 10% of the qualified electors' signatures. Petitioner further alleges the failure to submit the issue to the electors violates Article 111, Section 5 and ~rticle XI, Section 8, 1972 Montana constitution. The district court made an order ,qranting an alternative writ of mandamus. Thereafter the Commission filed an answer and a motion to quash. The cause was briefed and heard on October 25, 1976, be- fore Hon. Jack Shanstrom, who granted the motion to quash and dis- missed with prejudice. On appeal to this Court seven issues are set forth by petitioner, however we find the determining issue to be: Whether the ordinance and resolution relating to special improvement dis- trict No. 565 are subject to either referendum or initiative proce- dures? This Court has long exercised judicial restraint in reaching and deciding the constitutionality of legislative acts, particularly where, as here, the case can be decided on nonconstitutional grounds. Declining unnecessary decisions on the constitutionality of legislative enactments and the reasons therefor is summarized in 16 A m Jur 2d, Constitutional Law S111, p. 298. State ex re1 ~ammond v. Hager, 160 Mont. 391, 503 P.2d 52. The instant case can be decided on other than constitutional grounds. Appellant-petitioner contends that initiative lies to repeal Ordinance No. 962 of the city of Bozeman. We disagree. Courts have consistently held initiative and referendum procedures are applicable to those acts that are legislative in character and are not applicable to procedures that are administrative in character. This Court in City of Billings v. Nore, 148 Mont. 96, 104, 417 P.2d 458, noted: "Montana has for many years followed the rule that initiative does not lie concerning matters adminis- trative in nature. See Carlson v. City of Helena, 39 Mont. 82, 102 P. 39; Allen v. City of Butte, 55 Mont. 205, 175 P. 595." The Court in Nore then went on to distinguish legislative from administrative action noting: "The problem of differentiating between legislative actions and administrative or executive actions is often difficult. Appellants suggest, and we accept, that one reasonable test to be used in making such differentiation is whether the act was one creating new law (legislative) or executing an already exist- ing law (administrative). See Keigley v. Bench, 97 Utah 69, 89 P.2d 480, 122 A.L.R. 756." In Nore the question before the Court was whether an ordinance establishing sewer rates for the city of Billings, pursuant to section 11-2219, R.C.M. 1947, was an administrative act of the city council and not subject to either initiative or referendum? The district court found it was and the same reasoning can be applied in the instant case. To hold otherwise would make the everyday administra- tion of municipal affairs unworkable. Every dissatisfied bidder or disappointed job applicant could invoke the machinery of refer- endum and thereby suspend the taking effect of valid administrative acts. To do so would seriously affect the efficiency and economy in the business administration of a city. Section 11-2214, R.C.M. 1947, entitled "Methods of payments of improvements." provides: "(1) To defray the cost of the making of any of the improvements provided for in this act, the city council or commission shall adopt one of the follow- ing methods of assessment; unless otherwise provided in subsection 1 (c) : "(d) When the purpose of the assessment is for the establishment and/or improvement of offstreet parking as provided in this act, the city council or commis- sion shall assess against the real property speci- fically benefited by the offstreet parking facilities, the cost of the developments involved, in proportion to the benefits received by each tract of land within said district. In determining the benefit to be re- ceived by each parcel of land, the city council or commission shall consider: "(i) the relative distance of the parking facility from each parcel of land within the area of the special improvement district; "(ii) the relative needs of parking spaces for each parcel of land located within the boundaries of said district, either as established by the city zoning ordinance, if any, or otherwise, with relation to the use of said parcel; "(iii) the assessed value of each parcel within said district; "(iv) the square footage of each parcel within said district as it relates to the whole; "(v) the square footage of floor space in any im- provements on the parcel and the various uses of such floor space; "(vi) the availability of existing on-site parking space on any parcel of land within the district. Provided, however, that before any improvement dis- trict can be created or financed under the provisions of this section, the city council or commission must, prior to the creation of said district, pass a city ordinance setting forth therein the formula to be used in determining the assessment of each lot or parcel within said district, which said formula must includebut shall not be limited to the items to be considered as set forth hereinabove. And provided further that prior to the adoption of any such ordinance by the city council or commission, the city council or commission shall make a determination of the formula for the method of assessment as set forth above, con- sidering all of the factors above set forth, and shall hold a public hearing after due notice and at such hearing all persons concerned may present their objec- tions to the formula or any part of it and point out errors and inequities and submit reasons for amendments and corrections. The council may continue the hearing from time to time. After the council has heard all objections and suggestions, it shall correct any errors which it finds in the formula for assessment as orig- inally made and shall finally establish and settle the formula for assessment in the same manner as any other city ordinance. With the provisions of the above statute in mind, a careful reading of Ordinance No. 962, shows the Commission was performing an administrative function and therefore was not subject to initiative. In support of the Court's holding that courts do not, in dealing with local improvement ordinances, hold them subject to muni- pal-wide referendum or initiative process, see: Chase v. Kalber, 28 Cal.App. 561, 153 P. 397; City of Globe v. Willis, 16 Ariz. 378, 146 P. 544; St. John v. King, 130 Cal.App. 356, 20 P.2d 123; Village of Crotty v. Domm, 338 111. 228, 170 N.E. 308: Alexander v. Mitchell, 119 C.A.2d 816, 260 P.2d 261; Dewey v. Doxey-Layton Realty Co., 3 Utah2d 1, 277 P.2d 805; Anno. 122 A.L.R. 769, 786. The decision of the district court is affirmed. We Concur: Ch' f J u s t i c e ,A J%?

August 8, 1977

640c916a-7666-42a6-a32e-e318b92e30c1

STATE v KELLER

N/A

13447

Montana

Montana Supreme Court

No. 13447 I N T H E SUPREME COURT O F THE STATE O F MONTANA 1977 STATE O F MONTANA, ACTING BY AND THROUGH T H E STATE FISH AND GAME COJpMISSION, P l a i n t i f f and Appellant, PAUL T. KELLER, Executor of t h e E s t a t e o f Kay Kuhns, Deceased e t a l . , Defendants and Respondents. Appeal from: D i s t r i c t Court of t h e F i r s t J u d i c i a l D i s t r i c t , Honorable P e t e r G. Meloy, Judge p r e s i d i n g . Counsel of Record: For Appellant: Clayton R. Herron argued, Helena, Montana For Respondents : Keller, Reynolds and Drake, Helena, Montana Paul T. Keller argued, Helena, Montana Tipp and Hoven, Missoula, Montana Vernon Hoven argued, Missoula, Montana Submitted: May 2 5 , 1977 ~ e c i d e d : AU G 2 2 1977 -- F i l e d : 4UL 2 ; ! i97? Mr. Justice Frank I. Haswell delivered the Opinion of the Court. Plaintiff appeals from the district court's determination in a declaratory judgment suit to construe a will that there was no ambiguity in the the will and defendants were entitled to distribution of certain real property. Plaintiff is the state of Montana Fish and Game Commission. In his will executed October 22, 1971, Ray Kuhns devised to the State Fish and Game Commission certain real property which con- stituted the bulk of a ranching and farming operation he owned near Kalispell, Montana. He specifically excepted from the devise a 3-1/2 acre area surrounding the ranch buildings, the original homestead. Kuhns then disposed of the remainder of his estate by a residuary clause which gave a11 his remaining property to his heirs at law. This included real property he owned near Essex, Montana, his home outside of Helena, Montana, and the 3-1/2 acre area excepted from the devise to plaintiff. The paragraph devising the ranch lands to the State Fish and Game Commission stated: "SECOND: I hereby give, devise and bequeath to the STATE OF MONTANA all of my interest in the land in Sections Twenty (20), Twenty-one (21), Twenty-eight (28) , Twenty-nine (29) , Thirty (30) , and Thirty- three (33), Township Thirty (30) North, Range Twenty- two (22) West in Flathead County, Montana, with the exceptions of three and one-half (3-1/2) acres here- tofore surveyed surrounding the ranch buildings, the same is being given to the State of Montana for the use and benefit of the FISH AND GAME COMMISSION for wildlife management and for public outdoor recreation." At his death on September 2, 1973, Ray Kuhns did not have an interest in Section 30, Township (30) North, Range 22 West in Flathead County, Montana, nor did he ever have an interest in that section. Section 30 was owned partly by the state of Montana and partly by other private individuals. Kuhns did, however, own 160 acres of land in Section 32 of that same township and range. This land was adjacent to the lands owned by him in Sections 29 and 33 devised to the State Fish and Game Commission by paragraph SECOND of decedent's will. After the filing of decedent's will for probate, the district court entered a "DECREE OF PARTIAL DISTRIBUTION" dis- tributing to plaintiff lands in Sections 20, 21, 28, 29 and 33 as provided for in decedent's will. The decree did not distribute to plaintiff any land in Section 32. Plaintiff reserved the right to bring before the district court a determination of the questions and issues presented in the instant action. Plaintiff filed a complaint for declaratory judgment naming Paul T. Keller, the executor of Kuhns' estate, and Kuhns' heirs as defendants. Plaintiff alleged decedent intended to devise to plaintiff the 160 acres in Section 32 and the scrivener merely erred in writing "Section Thirty (30)" in decedent's will rather than "Section Thirty-two (32)". Defendants answered the will was not ambiguous and, therefore, was not subject to inter- pretation. The district court found the will was clear and that the description in controversy was a "completely, total, adequate and legal description of existing private real property." It concluded the will was unambiguous and plaintiff was not entitled to distribution under decedent's will of any property in Section 32, Township 30 North, Range 22 West. The court entered a decree declaring defendants Edith Kuhns, Myrtle Schump, Thomas W. Mullin and Anthony J. Mullin were entitled to distribution of the lands decedent owned in Section 32. Plaintiff appealed. Plaintiff raises four issues on appeal: 1. Does the evidence support the district court's findings that the will was unambiguous and that the description in controversy was a complete, total, adequate and legal descrip- tion of existing private property? 2. Do the district court's findings support its con- clusions of law? 3 . Did the district court err in refusing to admit plaintiff's exhibit two into evidence? 4. Did the district court err in admitting defendants' exhibit 4 into evidence? The first two issues may be consolidated into whether a party may show by extrinsic evidence that by a devise of certain described real property which the testator never owned nor had an interest in, the testator actually intended to devise certain other real property which he did own. This issue has not previous- ly been before this Court. In construing a will the paramount rule is that the in- testator's intent gathered from the words of the will governs the interpretation of the will. Section 91-201, R.C.M. 1947 (repealed by Sec. 2, Ch. 365, Laws 1974, and replaced by section 91A-2-603, R.C.M. 1947.) In re Hume's Estate, 128 Mont. 223, 272 P.2d 999 (1954). Extrinsic evidence is not admissible to add words to, or to take words away from, those in the will, or to contradict the will's language. Section 91-206, R.C.M. 1947; 4 Bowe-Parker: Page on Wills, S32.1, p . 230. Extrinsic evidence is admissible to show the existence of a latent ambiguity. Section 91-224, R.C.M. 1947 provides: "When, applying a will, it is found that there is an imperfect description, or that no person or property exactly answers the description, mistakes and omissions must be corrected, if the error appears from the context of the will or from extrinsic evidence; but evidence of the declarations of the testator as to his intentions cannot be received." Plaintiff contends that because testator did not own property in Section 30, a latent ambiguity exists, thus allowing the admission of extrinsic evidence of the testator's intent to explain the ambiguity. Defendants counter the description "all of my interests in the land in Sections * * * Thirty (30) * * *" perfectly describes existing real property. They contend the description is not made ambiguous by the fact the decedent never had any interest in land in Section 30. They conclude be- cause the description is unambiguous, extrinsic evidence is in- admissible to show what the decedent meant by it. Section 91-224, requires that if extrinsic evidence shows there is either an imperfect description or that no property exactly answers the description, the mistake must be corrected. Was there, then, an imperfect description or no property that exactly answers the description? The district court found that real property exists which exactly answers the description "Section Thirty (30) , Township Thirty (30) North, Range Twenty- Two (22) West, in Flathead County, Montana." The district court also found it was a perfect description of real property. It was not, however, a perfect description of real property owned by the testator, as the testator had no interest in that particular section. A testator is presumed to have intended to dispose of property which he owned, rather than property of another over which he had no power of testamentary disposition. Gano v. Gano, 239 Ill. 539, 88 N.E. 146, 147 (1909); Collins v. Capps, 235 Ill. 560, 85 N.E. 934, 935 (1908); 4 Bowe-Parker: Page on Wills, 533.18, p . 320 (1961). Contra, In re Lynch's Estate, 142 Cal. 373, 75 P. 1086, 1088 (1904). In light of this presumption, we hold a description of property is an "imperfect description" within the meaning of section 91-224, if it is a description of property over which the testator had no power of testamentary disposition. The description is "imperfect" because it describes property in which the testator had no interest. As the testator Kuhns had no interest in "Section Thirty (30), Township Thirty (30) North, Range Twenty-two (22) West, in Flathead County, Montana"; it is an imperfect description. Section 91-224 requires that when there is an imperfect description, the mistake or omission must be corrected. The question remains how to correct the mistake or omission. The court will not rewrite a testator's will for him by substituting what the court thought the testator intended for the erroneous provision. In re Kahoutek's Estate, 39 N.D. 215, 166 N.W. 816, 818 (1918). The court must be guided by the testator's intent as expressed in his will. " * * * if, after the false description or part of a description is discarded, there remains in the devise language sufficiently full and accurate to identify the subject of the gift with sufficient certainty, the property thus indicated will pass; but if, on the other hand, when the false description is eliminated from the will there is not enough left to afford a basis for identifying the subject of the gift, nothing can pass,* * *"4 Bowe-Parker: Page on Wills S33.16, p. 314. ' f z f c h v. White, 117 U.S. 210, 6 S.Ct. 617, 29 L.ed. 860. When the false words are struck from testator's descrip- tion, we have left "I hereby give, devise and bequeath to the STATE OF MONTANA all of my interest in the land in Sections Twenty (20) , Twenty-one (21) , Twenty-eight (28) , Twenty-nine (29) , I and Thirty-three (33) * * *." No language remains in the devise to demonstrate with sufficient certainty the testator intended Section 32 to pass under this paragraph. In re Lynch's Estate, supra. In re Kahoutek's Estate, supra. This is not an instance of a general description of property sought to be devised followed by a specific description of that property which is uncertain. Stuesse v . Stuesse, (Mo. 1964) 377 S.W.2d 389. To allow plaintiff to show by extrinsic evidence that the testator allegedly intended to devise to plaintiff his lands in Section 32 without any indication of such an intent expressed in the will would be to rewrite the testator's will. This we cannot and will not do. Before such extrinsic evidence is admissible, plaintiff must show from the face of the will that that was the testator's intent. Thus, the devise of "Section Thirty (30)" passes nothing to the plaintiff. Given our conclusion as to the first two issues raised by plaintiff, we find it unnecessary to discuss the evidentiary issues. Judgment affirmed. Justice We concur:

August 22, 1977

205e8f44-b14b-46db-bae1-73b831a0ed2d

STATE v BRINER

N/A

13394

Montana

Montana Supreme Court

No. 13394 I N T H E SUPREME C O U R T O F THE STATE O F M O N T A N A 1977 THE STATE O F M O N T A N A , P l a i n t i f f and Respondent, / ' D O N A L D E. BRINER, Defendant and Appellant. Appeal from: D i s t r i c t Court of t h e Ninth J u d i c i a l D i s t r i c t , Honorable R. D. McPhillips, Judge p r e s i d i n g . Counsel of Record: For Appellant: Kampfe and Perhacs, Red Lodge, Montana D. Frank Kampfe argued, Red Lodge, Montana For Respondent: Mike Greely, Attorney General, Helena, Montana Dennis Moreen argued, A s s i s t a n t Attorney General, Helena, Montana R a e V. Kalbfleisch, County Attorney, argued, Shelby, Montana Submitted: June 9, 1977 M r . Chief J u s t i c e Paul G. Hatfield delivered the Opinion of the Court. Defendant Donald E. Briner was charged and convicted of burglary i n the d i s t r i c t court, Toole County. From the jury verdict and subsequent sentence of 8 years, with 6 years sus- pended, defendant seeks t h i s Court's review of four issues: I ) Whether the d i s t r i c t court erred i n denying defendant's various motions t o suppress and dismiss. 2) Whether the testimony of the accomplice had the s u f f i c i e n t independent corroboration required by section 95-3012, R.C.M. 1947. 3) Whether t h e Information f i l e d against defendant was s u f f i c i e n t t o inform defendant of the nature of the charges against him. 4 ) Whether the d i s t r i c t court erred i n f a i l i n g t o grant defendant's motion f o r a new t r i a l based upon newly discovered evidence. The charges against defendant Briner arose i n Sunburst, Montana from the burglary of the Farmers Co-op O i l Co. between the hours of 6:15 p.m., July 11, 1975 and 6:45 a.m., July 12, 1975. Three individuals were charged with the burglary-- Donald E. Briner, George Cain, and 'William Felton. Briner and co-defendants were stopped on July 13, 1975 out- side Shelby, Montana by deputies possessing t h i s information: [ I ) Three hours p r i o r t o defendant's a r r e s t , s h e r i f f deputies responded t o a burglary i n progress a t the Co-op i n Devon, Montana; (2) on reaching Devon a highway patrolman observed the pickup defendant was l a t e r driving when arrested; (3) t h i s pickup had l e f t the v i c i n i t y by the time the deputies reached the Devon Co-op; (4) a t the Co-op the phone lfnes were c u t , a window broken, and a door l e f t open; (5) the dEputies observed footprints leading from the Co-op t o and across a creek i n the direction where the pickup had been parked. The footprints were similar t o those found a t t h e Sunburst Co-op the previous evening. The t i r e tracks observed a t both Co-ops were similar; and (6) the deputies had information the pickup defendant was driving was equipped with a radio scanner tuned t o police frequencies. O n July 13, 1975 upon stopping the Briner vehicle, the deputies examined the pickup t i r e s and determined they were similar i n design t o t h e tracks found a t the Devon and Sunburst Co-ops. Deputies a l s o observed defendant's and Cain's pant legs were wet; t h a t a p a i r of wet waffle stomper boots was on the pickup's floor- board; and t h a t a radio scanner was present. Arrest was made without a warrant, the pickup was seized. O n the same day a search warrant was issued t o search the vehicle defendant was driving. This warrant was r'eturned on the same day, together with the waffle stompers and gloves. Later, on July 25, 1975, deputies removed the v e h i c l e ' s radio scanner and on July 26, 1975, the vehicle's t i r e s . The defendant was charged by Information on September 4, 1975 with t h e burglary of the Farmers Co-op O i l Company of Sunburst, Montana, !'on o r about July 12, 1975". Evidence presented t o the jury showed: 1 ) . Footprints from waffle stompers were found inside and outside the Co-op a f t e r the burglary; defendant owned a p a i r of waffle stompers which was i n h i s pickup a t the time of h i s a r r e s t ; expert opinion found the p r i n t s t o be made by boots with a similar tread design and wear pattern a s those of defendant. 2). The vehicle defendant was driving was seen parked on t h e I n t e r s t a t e highway ramp overlooking the Co-op during the early morning hours a f t e r t h e night of the burglary; f r e s h t i r e tracks were found a t the Co-op; expert opinion found the t i r e tracks and the t i r e s from the pickup defendant was driving t o be of similar t i r e design and tread wear. 3). Defendant's vehicle was equipped with a radio scanner tuned t o the major law enforcement frequencies. 4). A n accomplice of defendant t e s t i f i e d t o the participa- t i o n of defendant i n the burglary. From t h i s evidence the jury convicted defendant of burglary. O n the f i r s t day of t r i a l , a f t e r the jury had been voir dired and passed f o r cause by the county attorney, the attorney f o r defendant attempted t o f i l e various motions t o suppress evidence and t o dismiss. The d i s t r i c t court recessed and took testimony and argument on the motions; l a t e r it denied a l l motions. From t h a t denial defendant r a i s e s h i s f i r s t issue on appeal. Counsel f o r defendant argues it i s h i s c l i e n t ' s constitu- t i o n a l r i g h t t o use the exclusionary r u l e a t any time. I n S t a t e v. Dess, 154 Mont. 231, 235, 462 P.2d 186, t h i s Court reviewed the exclusionary rule: "The exclusionary r u l e fashioned i n Weeks v. United S t a t e s , 232 U.S.383, 34 S.Ct. 341, 58 L.Ed 652 (1914), and Mapp v , Ohio, 367 U.S. 643, 81 S.Ct. 1684, 6 L.Ed. 2d 1081 (1961) excludes from a criminal t r i a l any evi- dence seized from the defendant i n v i o l a t i o n of h i s 4 t h Amendment rights. I n Mapp and Weeks the defendant against whom the evidence was held t o be inadmissible was the victim of the search. I n the recent case of Alderman v. United States, 394 U.S. 165, 89 S.Ct. 961, 22 L.Ed.2d 176 (1969) the Supreme Court rejected any expansion of the 4th Amendment and the exclusionary r u l e t o include those who a r e aggrieved solely by the introduction of damaging evidence, o r those whose r i g h t s were not violated by the search i t s e l f . * * *I1 L n a recent case the United States Supreme Court r e i t e r a t e d t h a t the exclusionary rule was not a personal constitutional r i g h t of the aggrieved party and again rejected the fourth and most c r i t i c a l j u s t i f i c a t i o n f o r the exclusionary r u l e enunciated in Mapp. I n United States v. J a n i s , 428 U.S. 433, 96 S.Ct. 3021, 49 L ed 2d 1046, 1056, the Court said: "The debate within the court on the exclusionary r u l e has always been a warm one. * * * The Court, however, has established t h a t the 'prime purpose' of the r u l e , i f not the sole one, ' i s t o deter future unlawful police conduct! [Cited cases omitted] "Thus " ' [1]n sum, the rule i s a j u d i c i a l l y created remedy designed t o safeguard Fourth Amendment r i g h t s generally through i t s deterrent e f f e c t , rather than a personal constitutional r i g h t of the party aggrieved. I United States v. Calandra, 414 U.S. a t 348, 38 L Ed 2d 561, 94 S.Ct. 613, 66 Ohio Ops.2d 320.'' 49 L ed 2d 1056. The question of "timeliness" i s well defined i n Montana. Section 95-1806, R.C.M. 1947, s e t s f o r t h the procedure f o r f i l i n g motions t o suppress evidence i l l e g a l l y seized and provides i n p a r t : " (a) A defendant aggrieved by an unlawful search and seizure may move the court t o suppress a s evidence anything so obtained. "(b) The motion s h a l l be made before t r i a l unless f o r good cause shown the court s h a l l otherwise d i r e c t . "(c) The defendant s h a l l give a t l e a s t ten (10) daysi notice of such motion t o the attorney prosecuting o r such other time a s the court may d i r e c t . The de- fendant s h a l l serve a copy of the notice and motion upon the attorney prosecuting. In S t a t e v. Gotta, 71 Mont. 288, 290, 229 P. 405, t h i s Court, speaking t o the issue of "timeliness" stated: " : k * * One wishing t o preclude the use of evidence obtained through a violation of h i s constitutional r i g h t s must protect himself by timely action, I f he has had opportunity to suppress the evidence before t r i a l and has failed to take advantage of h i s remedy, objection t o the evidence upon t r i a l w i l l not avail him. * * *" 7 1 Mont. 290. See also: State v. Gallagher, 162 Mont. 155, 509 P.2d 852. I n the instant case defendant was aware of the facts and circumstances surrounding the arrest and the possibility of the introduction of certain evidence, long before the f i r s t day of t r i a l . Upon f i l i n g of defendant's various motions t o suppress, no offer of evidence nor showing of good cause was given which prevented defendant from f i l i n g h i s motions before t r i a l . I f under section 95-1806, we assume the evidence was obtained by an unlawful search and seizure, it ?was necessary for the accused, who desired t o exclude such evidence from h i s t r i a l , t o make a timely objection t o i t s introduction. Such was not the fact i n t h i s case, as the t r i a l judge found. Also a review of the record would allow the evidence i n any event. Defendant's second issue concerns whether the testimony of William J. Felton, an accomplice, was sufficiently corroborated by independent evidence. Defendant and p l a i n t i f f agree section 95-3012, i s the applicable statute and the numerous prior opinions of t h i s Court concerning requirements for corroboration of an accomplice's testimony have continued validity. Section 95- 3012 replaces section 94-7220, R.C.M. 1947. The only difference between the present provision and i t s predecessor i s the substitu- tion of the words "one responsible or legally accountable for the same offense, a s defined by section 94-2-106'1 for the term "an acc~mplice'~. The -question whether there i s sufficient, independent corroboration of an accomplice's testimony, tending t o connect a defendant with the commission of a crime i s one of law and must be decided by the t r i a l court. State v. Spielmann, 163 Mont. 199, 207, 516 P.2d 617. See also: State v. Moran, 142 Mont. 423, 452, 384 P.2d 777; State v. Dess, supra. The requirements of section 94-7220 the predecessor of sec- tion 95-3012, are well established i n Montana. This Court i n Spielmann repeats the requirements of section 94-7220 as ex- plained i n Dess: "'* * * Appellant suggests that the evidence, independent of the testimony of an accomplice, must prove him guilty beyond a reasonable doubt. This i s not the law i n Montana, however. Though there must be some independent evidence connecting the defendant t o the crime, it .need not be sufficient alone t o sustain a conviction. The jury can consider the testimony of the accomplice and give the t e s t i - mony whatever weight they desire. In State v. Donges, 126 Mont. 341, 251 P.2d 254,(1952), the Court stated a t page 347, 251 P.2d a t page 257: " "'The evidence which corroborated Bungard could be furnished by the defendants. It could be circumstan- t i a l , It need not extend t o every f a c t t o which Bungard t e s t i f i e d and need not be sufficient t o justify a con- viction or establish a prima facie case of g u i l t ; it being sufficient i f it tends t o connect defendants with the commission of the crime. Whether it tends t o do so i s a question of law, while i t s weight-its efficacy t o f o r t i f y the testimony of Eungard and render h i s story trustworthy - i s a matter for the consideration of the jury. State v. Cobb, 76 Mont. 89, 245 P. 265."'" 163 Mont. 207,208. I n t h i s case there i s sufficient corroborating evidence in the record for the d i s t r i c t court judge, as a matter of law, t o warrant the submission of the case to the jury: (a) waffle stomper footprints were discovered inside and outside the Co-op a f t e r the burglary; (b) defendant owned a pair of waffle stomper boots seized on the same day as h i s a r r e s t ; (c) expert comparison of defendant's boots to footprints found a t the Co-op demonstrated the prints were made by boots similar t o defendantis; (d) the pickup defendant was driving was seen parked on the Sunburst Interstate 15 exit ramp overlooking the Co-op i n the early morning hours following the night of the burglary; (e) fresh t i r e tracks were found a t the Co-op a f t e r the burglary; (f) expert comparison of the t i r e tracks found a t the Co-op and the t i r e s on the pickup defendant was driving determined the tracks were made by t i r e s with similar tread design and wear as those of the pickup; (g) eyewitnesses who saw the pickup defendant was driving on the Sunburst e x i t ramp, observed the pickup proceed down the ramp and repark a t the Texaco station across the s t r e e t from the Co-op; (h) waffle stomper footprints led from the ramp towards the Co-op; and ( i ) the pickup defendant was driving was equipped with a radio scanner tuned t o Montana law enforcement channels. Defendant's third issue claims the time alleged i n the Information was not sufficiently definite t o inform defendant of the nature of the charge against him. This Court finds t h i s issue without merit. Defendant's motion t o dismiss, which challenged the sufficiency of 'the Information, was properly denied as untimely filed. Defendant's fourth issue contends the court erred i n denying h i s motion for a new t r i a l , based on newly discovered evidence. This Court i n State v. Gallagher, supra, s e t forth requirements for t h i s motion: "* * * (1) That the evidence must have come t o the knowledge of the applicant since the t r i a l ; (2) that it was not through want of diligence that it was not discovered e a r l i e r J ; * *." 162 Mont. 161. B y raising t h i s issue, defendant requires t h i s Court t o review the discretion of the t r i a l court. Section 95-2101, R.C.M. 1947, states i n part: "(b) Motion for a N e w T r i a l "(1) Following a verdict or finding of guilty the court may grant the defendant a new t r i a l i f required in the interest of justice." The t r i a l court using sound discretion must decide i f a new t r i a l i s required "in the interest of justice". Where the t r i a l court acts within i t s discretion, t h i s Court has no right of review. State v. Laughlin, 105 Mont. 490, 497, 73 P.2d 718; State v. Quigg, 155 Mont. 119, 147, 467 P.2d 692. Here defendant supported h i s motion for new t r i a l with four affidavits. Three were from a l i b i witnesses who purportedly saw defendant on the night in question, and one was from John S. Lindsey Jr., an investigator, who knew of and t r i e d t o locate one a l i b i witness before t r i a l . This affidavit from Lindsey shows the a l i b i witness was known before t r i a l . State v. Gallagher, supra. The t r i a l judge was i n the best position to weigh the merits of the other three affidavits. State v. Quigg, supra. W e find there was no abuse of discretion by the t r i a l court i n denying the motion for a new t r i a l . The judgment i s affirmed. Chief Just ice A W e Concur: Justices. - . g - M r . J u s t i c e Daniel J. Shea specially concurring: I agree with the r e s u l t of t h i s case but I do not agree with a l l t h a t i s s a i d i n r e l a t i o n t o the search and seizure question. The t r i a l court did not find the motion t o suppress was untimely. After the motion t o suppress was f i l e d the t r i a l judge heard t h e evidence and denied the motion without s t a t i n g h i s reasons. H e l e f t it f o r t h i s Court t o speculate a s t o the reasons he denied the motion. I do agree however, t h a t the evidence was not i l l e g a l l y seized. With regard t o the exclusionary r u l e and i t s application t o searches and seizures, I f e e l t h i s Court i s paying too much a t t e n t i o n t o the United States Supreme Court i n interpreting the 4th Amendment t o the United States Constitution, and not paying enough a t t e n t i o n t o A r t . 11, Section 11, of Montana's 1972 Constitution which provides: "The people s h a l l be secure i n t h e i r persons, papers, homes and e f f e c t s from unreasonable searches and seizures. N o warrant to search any place, o r seize any person o r thing s h a l l issue without describing the place t o be searched o r the person o r thing t o be seized, o r without probable cause, supported by oath o r a f f irmation reduced t o writing ." Undoubtedly we a r e bound by the United States Supreme Court i n i t s interpretations of the United States Constitution but we a r e not bound by it when we implement and give meaning t o Montana's Constitution. W e certainly can reach a contrary r e s u l t by interpreting similar provisions of ~ o n t a n a ' s Constitution. Without specifically referring t o the Montana Constitution t h i s Court seems t o be holding t h a t the exclusionary r u l e i s not a personal r i g h t of the accused, although the right t o be f r e e from unreasonable searches and seizures i s h i s personal right. Without the exclusionary rule the right t o be free from un- reasonable searches and seizures would be meaningless. I would hold the exclusionary rule i s part and parcel of A r t . 11, Section 1 1 of the 1972 Montana Constitution and accordingly i s a personal right of the defendant. This does not mean that a defendant can f e e l free t o raise the issue a t any time during the proceedings. But it does mean that a defendant must be informed, in sufficient time ahead of t r i a l , that he has a right t o make a motion t o suppress, I f a defendant f i l e s no motion t o suppress, the court should obtain an informed, intelligent waiver. Here, the defendant has shown no prejudice however, because the t r i a l court did hear the motion to suppress and a review of the evidence clearly shows the motion was properly denied.

July 15, 1977

d68cf645-e923-4f44-b0e9-4405f2d6b87c

STATE EX REL MORALES v CITY COMM

N/A

13660

Montana

Montana Supreme Court

No. 1 3 6 6 0 I N THE SUPREME COURT OF THE STATE OF MONTANA 1 9 7 7 THE STATE OF MONTAEJA, ex rel. J U L I O E. MORALES, HELENA CITY JUDGE, R e l a t o r , THE C I T Y COMMISSION OF THE C I T Y OF HELENA, R e s p o n d e n t . A p p e a l f r o m : D i s t r i c t C o u r t of t h e F i r s t J u d i c i a l D i s t r i c t , Hon. A r n o l d O l s e n , Judge presiding. C o u n s e l of R e c o r d : For R e l a t o r : J u l i o M o r a l e s argued, Missoula, M o n t a n a For R e s p o n d e n t : C. W. L e a p h a r t , Jr. argued, H e l e n a , M o n t a n a p ~ p S u b m i t t e d : May 18, 1 9 7 7 D e c i d e d : J u l y 2 7 , 1 9 7 7 Filed: J u l y 2 7 , 1 9 7 7 Mr. Justice Frank I . Haswell delivered the Opinion of the Court. This case concerns an appeal from a judgment entered in the district court, Lewis and Clark County, denying appel- lant's writ of prohibition and dismissing the case. Appellant, Julio Morales, was appointed to the position of police judge for the City of Helena on June 25, 1973. The appointment was made in accordance with the terms of section 11-3271, R.C.M. 1947, by the Helena City commissioners. Res- pondent City of Helena had adopted and is operating under the Commission-Manager form of government pursuant to Title 11, Chapter 32, R.C.M. 1947. Appellant was notified by a letter dated December 20, 1976, that respondent intended to terminate his services as police judge on January 31, 1977, at 5:00 p.m. To this date, no cause has been alleged by respondent for appel- lant's dismissal. Appellant filed a petition with this Court on January 11, 1977, seeking to invoke the original jurisdiction of the Supreme Court. Appellant sought a declaratory judgment and a writ of prohibition. This Court, by its order dated January 11, refused to take jurisdiction of the matter and ordered the dis- trict court of Lewis and Clark County to assume jurisdiction. The Hon. Arnold Olsen assumed jurisdiction on January 27, and ordered a writ of prohibition to issue until such time as a hear- ing could be held on the matter. On February 3, the date set to show cause why the writ should not be made peremptory, respon- dent filed motions to dismiss and quash. Oral argument was heard but an evidentiary hearing was not conducted. Subsequently, both parties filed briefs and the district court entered a judg- ment and order on March 2, denying the writ and dismissing the cause. Appellant appeals from the decision of the district court. Two issues are before this Court upon appeal: 1) Whether the provision of section 11-3271, R.C.M. 1947, which allows the termination of a police judge at the will of the city commission is unconstitutional on its face. 2) Whether prohibition lies in the instant case. Section 11-3271, prior to its amendment by the 45th Montana Legislature in 1977, read: "Police Judge--appointment and powers. The commission shall appoint a police judge who shall have the pow&% and authority-now con- ferred by existing laws and shall hold his office at the will of the commission." Appellant challenges the constitutionality of the provision stating that the police judge " * * * shall hold his office at the will of the commission". The alleged constitutional in- (Senate Bill 349, Forty-fifth Le islature) firmity has since been corrected by amendment/effectlve Aprl i! 4, 1977, and now reads: (1) "In each municipality having a commission- manager form of government, a city judge shall be elected every 4 years in a nonpartisan elec- tion held in conjunction with the regularly scheduled municipal election. The city judge shall hold office for a term of 4 years." (2) "The qualifications to hold the office of city judge shall be set by ordinance by the commission. The ordinance shall be consistent with any rules adopted by the Montana Supreme Court on city judge qualifications." (3) "The first election of a city judge under this act shall be held in conjunction with the next regularly scheduled municipal election held 30 days or more after the effective date of this act." (4) "If a vacancy occurs in the office of city judge, the commission shall appoint a qualified individual to serve for the remainder of the term. " One of the cornerstones of our system of government is the separation of powers of the three branches of government. Each branch is separate and distinct and is immune from the control of its two branches of government in the absence of express constitutional authority to the contrary. State ex rel. Public Service Commission v. District Court, 107 Mont. 240, 84 P.2d 335. This doctrine is found in the 1972 Montana Constitution, Article 111, Section 1, as follows: "The power of the government of this state is divided into three distinct branches--1egis- lative, executive, and judicial. No person or persons charged with the exercise of power properly belonging to one branch shall exer- cise any power properly belonging to either of the others, except as in this constitution expressly directed or permitted." We have previously stated in State ex rel. Schneider v. Cunningham, 39 Mont. 165, 168, 101 P.2d 962, in regard to the predecessor of Article 111, Section 1, found in the 1889 Montana Constitution: " * * * It is within the knowledge of every intell- igent man that its purpose is to constitute each department an exclusive trustee of the power vested in it, accountable to the people alone for its faithful exercise, so that each may act as a check upon the other, and thus may be prevented the tyranny and oppression which would be the inevitable result of a lodgment of all power in the hands of one body. It is incumbent upon each department to assert and exercise all its power whenever public necessity requires it to do so; otherwise, it is recreant to the trust reposed in it by the people. It is equally incumbent upon it to refrain from asserting a power that does not belong to it, for this is equally a violation of the people's confidence." We find, therefore, that the provision of section 11- 3271 which allows the removal of the police judge from office at the will of the city commission is a clear violation of the mandate of the doctrine of separation of powers. The city commissioners, acting as the legislative branch of city government, may not infringe upon the duties of the judicial branch. The power to remove the police judge following a ruling adverse to the city commission is an impermissible infringement upon the duty of each and every judge to render a fair and impartial decision. Subsequent to the filing of the instant case, section 11-3271 was amended. This amendment, which became effective on April 4, 1977, provides in part for a change in name from police judge to city judge for the position in question and an elected four year term. The latter provision corrects the constitutional infirmity found in the unamended version of section 11-3271. The amended statute further provides that the initial election of a city judge shall be held in conjunction with the next regularly scheduled municipal elec- tion held 30 days or more after the effective date of the act. Appellant must therefore be restored to his position as city judge until such time as the next regularly scheduled munici- pal election is held. Furthermore respondent must pay to appellant all back pay accrued during the pendency of this action. The second issue deals with the propriety of the remedy of prohibition in the instant case. The writ of prohibition lies to arrest the proceedings of any tribunal, corporation, board or person whether exercising functions judicial or mini- sterial, when such proceedings are without or in excess of the jurisdiction of such tribunal, corporation, board or person. Section 93-9201, R.C.M. 1947. It may be issued by the Supreme Court or district courts in cases where there is no plain, speedy and adequate remedy in the ordinary course of law. Section 93-9202, R.C.M. 1947. In addition we have held that a writ of prohibition lies to arrest only judicial or quasi- judicial functions. State v. Montana Livestock Sanitary Board, 135 Mont. 202, 339 P.2d 487. After careful consideration of the applicable law we hold that prohibition is the proper remedy in the instant case. The issuance of a writ of prohibition to arrest the proceedings of a municipal corporation acting in excess of its jurisdiction is not novel in this jurisdiction. See State ex rel. Griffin v. Butte, 151 Mont. 546, 445 P.2d 739. We find no merit in respondent's contention that pro- hibition is improper because the city commission's action was ministerial rather than judicial or quasi-judicial. "A mini- sterial act may perhaps be defined to be one which a person performs in a given state of facts, in a prescribed manner, in obedience to the mandate of legal authority, without regard to or the exercise of his own judgment upon the propriety of the act done." Montana Livestock Sanitary Board, supra. The dis- missal involved herein is not a ministerial act done in further- ance of legal authority. The crux of our holding above is the city commission's lack of legal authority to infringe upon the duties of the judiciary. Respondent, in its oral argument before this Court, al- leged that appellant had failed to comply with Rule 38, M.R.App. Civ.P., and therefore the constitutional issue is not properly before the Court. In substance, Rule 38 provides that the attor- ney general of the State of Montana must be notified of any proceeding in the Supreme Court which challenges the constitution- ality of any act of the Montana Legislature. The record reflects that such a "notice of existence of constitutional question" was filed with this Court on January 11, 1977, as a portion of appel- lant's application for a writ of supervisory control. Apparently such notice was not refiled prior to this appeal. While Rule 38 was not strictly complied with in the in- stant case, we feel the spirit and intent of the rule was met. We therefore hold that the constitutional issue is properly be- fore us. It is ordered that this matter be remanded to the district court, Lewis and Clark County, with instructions to order the restoration of appellant to his position as Helena City Judge until an election may be held pursuant to section 11-3271. In addition that court is to determine reasonable attorney fees and costs and award such moneys to appellant. Respondent must also pay appellant all back pay accrued during this action and other benefits withheld. Respondent argues that appellant's proper remedy is quo warranto and therefore, prohibition does not lie because appellant has a remedy in the ordinary course of law. Quo warranto lies to test the authority of a person allegedly wrongfully holding a public office. Section 93-6401, R.C.M. 1947; State ex rel. Casey v. Brewer, 107 Mont. 550, 88 P.2d 49. A quo warranto proceeding may be commenced by a private person under certain circumstances. Section 93-6405, R.C.M. 1947. Respondent argues that such circumstances exist in the instant case. We disagree. Section 93-6405 states in part: "A person claiming to be entitled to a public office unlawfully held and exercised by another, by himself or by an attorney and counselor at law, may bring an action therefor in the name of the state, as provided in this chapter. * * *" The mandate of the above statute is clear. A private person may institute a quo warranto proceeding to attempt to prove another is wrongfully holding a public office. It is clear, therefore, that quo warranto does not lie in the instant case as appellant actually held the office of police judge at the time this action was instituted. Justice We concur: n Chief Justice 1 '* Justices 6 ' Justice John.Conway Harrisordid not participate in this cause. IN THE SUPREME COURT OF THE STATE OF MONTANA No. 13660 THE STATE OF MONTANA, EX REL. JULIO E. MORALES, Helena City Judge, Relator, VS. THE CITY COMMISSION OF THE CITY OF HELENA, Respondent. O R D E R IT IS ORDERED that the following amendment be made on the above named opinion. The last two paragraphs on page 7 of the opinion should be removed from that page and inserted between the first and second paragraphs on page 6. DATED this 28th day of July, 1977. I

July 27, 1977

a7c4f087-37fd-4082-aef3-8d3c654a76e6

O NEIL v LIPINSKI

N/A

13313

Montana

Montana Supreme Court

No. 13313 IN TEE SUPREME COURT OF THE STATE OF MONTANA 1977 LAWRENCE E. O'NEIL, CHARLES H. O'NEIL and WYNONA M. O'NEIL, Plaintiffs and Respondents, JOHN 2. LIPINSKI and ANN LIPINSKI, Defendants and Appellants. Appeal from: District Court of the Eleventh Judicial District, Honorable Robert C. Sykes, Judge presiding. Counsel of Record: For Appellants: Hash, Jellison and O'Brien, Kalispell, Montana M. Dean Jellison argued, Kalispell, Montana For Respondents: Warden, Walterskirchen and Christiansen, Kalispell, Montana William C. Walterskirchen argued, Kalispell, Montana Submitted: May 4, 1977 Decided : tjuf 1 $ ,jf -: ; , Filed: Clerk M r . J u s t i c e John Conway Harrison delivered the Opinion of the Court. This i s an appeal by defendants Lipinski from a judgment of the d i s t r i c t court, Flathead County, f o r p l a i n t i f f s 0 ' ~ e i l granting specific performance of an agreement t o r e p a i r an i r r i g a t i o n dam and t o replace c e r t a i n pipe. Lipinski presents three issues on appeal: I. bfiether specific performance of a contract should be granted where alleged unreasonable delay by p l a i n t i f f renders timely performance of t h i s contract impossible and defeats the primary consideration f o r the contract? 2. Whether p l a i n t i f f had an adequate remedy a t law? 3 . Whether s p e c i f i c performance i s an adequate remedy t o compel performance of a construction contract? P l a i n t i f f 0 'Neil owns a g r i c u l t u r a l land i n Flathead County i r r i g a t e d by the waters of Ashley Creek. I n addition, he owns a water r i g h t and a d i t c h r i g h t over and across lands purchased by defendant Lipinski. O'Neil's water i s diverted by a concrete dam and concrete pipes over land Lipinski purchased. Following the purchase of the property by Lipinski a dispute arose between the p a r t i e s and Lipinski denied OINeil access t o the dam and alleged O'Neil did not own e i t h e r the water r i g h t o r the d i t c h r i g h t . O'Neil f i l e d s u i t i n 1968 against Lipinski seeking t o e s t a b l i s h h i s water r i g h t , d i t c h r i g h t and t o recover $7,415.05 f o r damages caused by Lipinski's denial of water and $5,000.00 punative damages. That case was s e t t l e d on the> day s e t , f o r t r i a l . Stipulated findings of f a c t s and conclusions of law were entered and signed by a l l p a r t i e s and a judgment entered. A t the same time, June 16, 1969, the memorandum agreement involved i n t h e i n s t a n t case was entered into between the parties. That agreement, among other things, s e t t l e d O'Neil's claim f o r damages against Lipinski and s e t up the method and manner of repairing the dam and the d i s t r i b u t i o n l i n e s . It provided OfNeil was t o see and approve the plans and specifica- tions, and the project was t o be completed by December 10, 1969. O n November 21, 1969, Lipinski discharged h i s counsel and obtained new counsel who advised O'Neil t h a t Lipinski refused t o comply with the agreement. The court found according t o the agreement t h a t (1) Lipinski desired t o have a l l of the pipeline underground, (2) Lipinski was t o have f u l l control and supervision of the repair project, subject t o O'Neilt s approval of the plans and specifications, (3) on June 16, 1969 LZpinski employed an engineering firm t o draw up such plans but the firm f a i l e d t o do so, (4) on August 15, 1969 another engineer was employed who submitted plans and specifications t o O'Neil's attorney on August 26, 1969, (5) these were submitted t o O'Neilts engineer on o r about September 19, 1969, and a f t e r a conference c e r t a i n changes were proposed, and (6) t h a t these changes were incorporated i n t o t h e plans by Lipinski's engineer and resubmitted t o O'Neil who requested nine further changes. O n November 21, 1969, Lipinski discharged h i s attorney and engineer and terminated the agreement.' The court further found the nine changes were a l l i n accord with accepted engineering practices, save and except the requiring of a lowering of the intake entry 12 inches below the spillway s l a b and the requirement of 12 rather than 6 inches of f i l l . These l a t t e r two requirements were found t o be substantial and unreasonable but the other 7 were reasonable. I n addition, the court found t h a t had the work been done i n 1969, the cost would have been approximately $9,000 and a t the time of t h i s t r i a l i n 1975, the cost had increased t o $19,710.00. The t r i a l court found a breach of the agreement by Lipinski and ordered t h e repairs be made, excepting the two above referred t o exceptions by December 1, 1976. Lipinski appeals from t h a t judgment. During the period from December 1969 t o the t r i a l on December 26, 1975, c e r t a i n negotiations took place between counsel and on September 20, 1974, by agreement of t h e p a r t i e s , the court appointed Douglas Daniels a s a special master and he submitted a report t o the court and t e s t i f i e d a t the t r i a l . Issue 1. W e note appellant argues t h a t he was excused from performing because delays by respondent prevented work completion by December 10, 1969. W e find no merit t o t h i s argument. The settlement agreement was signed on June 16, no engineer was hired by appellant u n t i l August 15; t h e revised plan of appellant's engineer Marquardt was not given t o respondent u n t i l October 15 and t h a t plan was not i n accord with accepted engineering practices. Respondent's engineer Wiedenman had h i s revised plan before appellant by October 28, but he did not respond u n t i l November 21 when h i s new attorney n o t i f i e d respondent the agreement would not be performed. W e note Marquardt t e s t i f i e d i f h i s Plan B , dated October 15, had been immediately approved he could not have met the December 10 deadline. Obviously, t h e recommended changes of Wiedenman would have extended t h a t date. Marquardt was n o t i f i e d by appellant t o cease work on November 6. The record speaks f o r i t s e l f . I f anyone i s t o be charged with delay, it is appellant not respondent. Lipinski a t t r i a l on cross-examination revealed h i s r e a l reason when he said: ' I * * * i n hindsight t h a t was a poor decision because I wouldn't do it today, make t h a t agree- ment * Jc Jc." Issue 2. Did respondent have an adequate remedy a t law and therefore is not e n t i t l e d t o equitable r e l i e f ? Appellant argues t h a t respondent's l e g a l remedy is of such a character a s t o preclude r e l i e f by way of specific performance. I n support he c i t e s Philbrick v. American Bank and Trust Co., 58 Mont. 376, 193 P. 59; J e f f r i e s Coal Co. v. I n d u s t r i a l Acc~Board 126 Mont. 411, 252 P.2d 1046, but these cases a r e not applicable factually. He argues he wrote respondent a l e t t e r authorizing the him t o proceed with the work and thatthe costs of doing/work would be the same i f one o r the other did it. However, a s noted i n 7 1 Am.Jur.2dY Specific Performance 59: "* * 2 k It i s c l e a r , however, t h a t the mere f a c t t h a t a party can avail.himself of some r e l i e f a t law does not preclude o r defeat the j u r i s d i c t i o n of equity t o decree specific performance. * * *" Such i s the case here where the t r i a l court found respondent had no plain, speedy o r adequate remedy a t law. This i s t h e second law s u i t over the water and d i t c h r i g h t s and some 8 years have passed t o the detriment of respondent. The-court here :was "eonfronted with a multiplicity of s u i t s , the f a c t situa- t i o n i s unique,so the court properly exercised i t s equitable powers. I n the settlement agreement of 1969 Lipinski i n s i s t e d on having absolute control and management of the repairs and i n s t a l l a t i o n because it was on h i s property. I n the years leading up t o 1969, he had threatened t o r e s t r a i n O'Neil from coming onto h i s property t o make repairs and had ordered workmen off the property. The t r i a l court granted h i s demands i n t h e 1969 agreement and i n i t s e f f o r t s t o avoid continued l i t i g a t i o n the court had authority t o grant the equitable r e l i e f here. W e find no e r r o r . Issue 3. The f i n a l issue questions whether specific performance i s an available remedy t o enforce a construction contract. To support h i s position appellant c i t e s Lubin v. Lubin, 144 C.A.'2d'781, 302 P.2d 49 and Moklofsky v. Moklofsky, 79 C.A.2d 259, 179 P.2d 628. These cases a r e not on point and can be distinguished. Lubin i s a property settlement i n a divorce action and has nothing t o do with a construction contract. Moklofsky deals with an agreement t o construct an outside s t a i r - case, but t h i s was not the controlling issue i n the case. Here, the court did not grant specific performance nor did t h e complaint, ask f o r it. The court ordered Lipinski t o repair and replace the dam and pipeline i n accord with the plans o r i n the a l t e r n a t i v e , i f he f a i l e d t o do so within a specific time, 0 ' ~ e i l could do the work under the supervision 6f an engineer appointed by the court and he would have judgment f o r the costs. Contrary t o Lipinski's position, the court could have ordered f u l l and complete specific performance of the construction contract. While there a r e diverse views on the specific performance of construction contracts, we find and adopt the position taken by the Massachusetts Court i n Jones v. Parker, 163 Mass. 564, 40 N.E. 1044,1045, where M r . J u s t i c e Holmes stated: "There i s no universal r u l e t h a t courts of equity never w i l l enforce a contract which requires some building t o be done. They have enforced such con- t r a c t s from the e a r l i e s t days t o the present time." That;view was adopted i n a more recent case, Grayson-Robinson Stores, Inc. v. I r i s Const. Corp., 8 N.Y.2d 133, 202 N.Y.Supp.2d 303, 168 N.E.2d 377,379. There the court i n reviewing the problem of specific performance of construction contracts said: "Tbere is of course, an old t r a d i t i o n o r approach according t o which courts have been reluctant t o enforce 'Contracts which require the performance of varied and continuous a c t s , o r the exercise of special s k i l l , t a s t e , and judgment' 1 because the execution of the decree would require such constant superintendence a s t o make j u d i c i a l control a matter of extreme d i f f i c u l t y ' . Standard Fashion Co. v. Siegel-Cooper Co., 157 N.Y. 60,66, 51 N.E. 408,409, 43 L.R.A. 854. I n some instances courts of equity i n other States have f o r some such reasons refused t o order specific performance of building contracts. [Citing cases] Other courts of equity have gone the other way (see Jones v. Parker, 163 Mass. 564, 40 N.E. 1044, which a l s o was a contract t o build f o r a lessee). 'There is no universal r u l e t h a t courts of equity never w i l l enforce a contract which requires some building t o be done. They have enforced such contracts from the e a r l i e s t days t o the present time' (Jones v. Parker, supra, 163 Mass. a t page 567, 40 N.E. a t page 1045). O n varying f a c t s our N e w York decisions take one o r the other position. [Citing cases]. Modern writers think t h a t the ' d i f f i - c u l t y of enforcement' idea is exaggerated and t h a t the trend i s toward specific performance (5 Corbin, Contracts [I951 ed.], 5 1172; 5 Williston, Contracts [rev.ed.], p. 3977; Restatement, Contracts, 5 371, comment a ) . Clearly there i s no binding r u l e t h a t deprives equity of j u r i s d i c t i o n t o order specific performance of a building contract. A t most there i s discretion i n the court t o refuse such a decree. And here we do not even have an equity s u i t but a motion made a s of r i g h t t o confirm a completely valid a r b i t r a t i o n award con- forming i n a l l respects t o the express conferral of authority on the a r b i t r a t o r s and meeting a l l s t a t u t o r y requirements f o r confirmation * * * . I 1 While not raised a s an issue on appeal the s p l i t t i n g of the costs over $9,000 was c l e a r l y e r r o r i n view of the record and must be reversed. The t r i a l court i n i t s conclusion of law No. 7 found Lipinski should pay the f i r s t $9,000 and t h a t t h e r e a f t e r the, two p a r t i e s would share a l l expenses over and above t h a t figure. W e find t h e court erred i n t h i s holding and d i r e c t a l l costs be paid by appellant i n the construction and i n s t a l l a t i o n of the i r r i g a t i o n system a s proposed by the Marquardt plans and specifi- cations, incorporating i n same the recommended changes of Wiedenman a s referred t o i n the findings of f a c t and conclusions of law of the t r i a l court. To hold ~othenrcSiee would be t o penalize respon- dent O'Neil who did what he could t o g e t t h e 1969 agreement carried out i n 1969. He has been deprived of the use of h i s water f o r over 8 years, due t o l i t i g a t i o n and obstinance of appellant Lipinski. The judgment of the t r i a l court i s affirmed and the cause remanded t o the t r i a l court with directions t o correct i t s conclusion of law No. 7 i n accordance with t h i s opinion. I W e Concur: Chief J u s t i c e

July 14, 1977

76d57e00-f0ea-450a-ac25-7eb260490d0c

MATTER OF MOYER

N/A

13704

Montana

Montana Supreme Court

No. 13704 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 IN THE MATTER OF RICKY MOYER a/k/a STEWART MOYER, KENNY PIOYER, STEVE MOYER AND SHANNON MOYER, Youths in Need of Care. Appeal from: District Court of the Thirteenth Judicial District Honorable Robert Wilson, Judge presiding. Counsel of Record: For Appellant: Vernard C. Anderson, Jr. argued, Billings, Montana F o r Respondent: Harold F. Hanser, County Attorney, Billings Montana Charles Bradley, argued, Deputy County Attorney, Billings, Montana Richard Webber argued, Helena, Montana Submitted: June 22, 1977 Filed: & - L 2 6 19ff M r . Chief J u s t i c e Paul G. Hatfield delivered t h e Opinion of t h e Court. This is an appeal from an o r d e r of t h e d i s t r i c t c o u r t , Yellowstone County, awarding permanent custody of a p p e l l a n t ' s four minor c h i l d r e n t o t h e Child Welfare Services Division, Department of Public Welfare, S t a t e of Montana. Appellant, Ethel Rebecca Moyer, is t h e mother of Ricky Moyer, a l s o known a s Ricky Stewart, Kenny, Steve and Shannon Moyer. O n December 31, 1975, t h e Yellowstone county a t t o r n e y f i l e d i n t h e d i s t r i c t c o u r t a p e t i t i o n f o r temporary investiga- t i v e a u t h o r i t y and p r o t e c t i v e s e r v i c e s on behalf of t h e Moyer c h i l d r e n , pursuant t o s e c t i o n 10-1311, R.C.M. 1947. The county a t t o r n e y supported t h e p e t i t i o n with an a f f i d a v i t and with a r e p o r t t o t h e c o u r t which had been prepared by t h e Yellowstone County Department of Public Welfare, and which was submitted t o t h e d i s t r i c t c o u r t i n accordance with s e c t i o n 10-1311. The re- p o r t t o t h e c o u r t l i s t e d t h e p o l i c e records of Ricky and Kenny Moyer, complaints from t h e i r school a u t h o r i t i e s regarding emo- t i o n a l problems of Ricky, Kenny, and Steve, and a l l e g a t i o n s by t h e welfare department t h a t a p p e l l a n t f a i l e d t o provide adequate d i s c i p l i n e and supervision of t h e c h i l d r e n . The d i s t r i c t c o u r t , on January 5, 1976, issued an order f o r temporary custody of t h e Moyer c h i l d r e n , r e q u i r i n g a p p e l l a n t t o cooperate with an i n v e s t i - g a t i o n i n t o t h e youths' home s i t u a t i o n and giving temporary cus- tody of t h e youths during t h e pendency of t h e a c t i o n t o t h e Yellow- s t o n e County Department of Welfare. O n March 11, 1976, t h e Yellowstone county a t t o r n e y f i l e d a p e t i t i o n pursuant t o s e c t i o n 10-1310 (10) (d) , R.C.M. 1947, re- questing t h e d i s t r i c t c o u r t t o g r a n t permanent l e g a l custody of t h e Moyer c h i l d r e n t o t h e Child Welfare Services Division. The county a t t o r n e y i n h i s p e t i t i o n a l l e g e d t h a t t h e Moyer c h i l d r e n were neglected and abused youths i n need of c a r e , within t h e meaning of s e c t i o n 10-1301, R.C.M. 1947, and set f o r t h c e r t a i n general a s s e r t i o n s i n support of h i s a l l e g a t i o n s . Because t h e whereabouts of t h e p u t a t i v e f a t h e r s of t h e Moyer c h i l d r e n w e r e unknown, t h e d i s t r i c t c o u r t authorized s e r v i c e of process by publication pursuant t o Rule 4 ( d ) , M.R. Civ.P. None of t h e p u t a t i v e f a t h e r s appeared a t t h e A p r i l 16, 1976 custody hearing and none appeals t h e d e c i s i o n of t h e d i s - t r i c t c o u r t . A t t h e nonjury hearing t o determine permanent l e g a l custody of t h e c h i l d r e n , e i g h t witnesses t e s t i f i e d f o r respon- d e n t Child Welfare Services Division and s i x witnesses t e s t i f i e d f o r a p p e l l a n t Ethel Rebecca Moyer. Based on t h e testimony a t t h e hearing, t h e d i s t r i c t judge on May 13, 1976 issued f i n d i n g s of f a c t and conclusions of l a w . The c o u r t concluded t h a t t h e Moyer c h i l d r e n were youths i n need of c a r e within t h e meaning of s e c t i o n 10-1301, R.C.M. 1947, and ordered t h a t t h e i r permanent custody, including t h e r i g h t t o consent t o t h e i r adoption, be awarded t o t h e Child Welfare Services Division. Appellant raises t h e following i s s u e s i n her appeal: 1. Is it l e g a l l y impermissible f o r a county a t t o r n e y t o f i l e a prehearing " r e p o r t t o t h e c o u r t " i n support of a s e c t i o n 10-1310, R.C.M. 1947, p e t i t i o n f o r permanent l e g a l custody of dependant and neglected c h i l d r e n ? 2. W a s t h e evidence presented a t t h e custody hearing s u f f i c i e n t t o support t h e judge's d e c i s i o n t o award permanent custody of t h e Moyer c h i l d r e n t o t h e Child Welfare Services Division? Appellant contends t h a t t h e county a t t o r n e y ' s r e p o r t t o t h e c o u r t w a s inadmissible i n a permanent custody a c t i o n under s e c t i o n 10-1310, R.C.M. 1947. Section 10-1310 n e i t h e r r e q u i r e s nor p r o h i b i t s t h e f i l i n g of a prehearing r e p o r t t o t h e c o u r t . The district court record in this case, however, contains only one report to the court, a report which the county attorney filed in support of his December 31, 1975 petition for temporary investigative authority and protective services. Section 10- 1311(3), R.C.M. 1947 specifically authorizes the filing of a welfare department report in support of a temporary investigative authority and protective services petition. We need not, there- fore, decide whether it would have been proper for a county attorney to file a prehearing report in support of a section 10-1310 petition for permanent custody. Appellant next contends that the evidence presented at the custody hearing does not support the district judge's find- ing that the Moyer children were dependent and neglected within the meaning of 10-1301, R.C.M. 1947, or his decision to award permanent legal custody to the Child Welfare Services Division. Appellant claims that the aforementioned report to the court contained hearsay statements which were prejudicial to appellant and which strongly influenced the judge in his custody decision. It is true that a judge violates due process requirements if he bases his child custody order on statements in a welfare depart- ment report without requiring the authors of the report to testi- fy at a hearing and be subject to cross-examination. In re Appeal in Maricopa Cty., Juv. Action No. J-75482, 111 ~ r i z 588, 536 P.2d 197; C.B. v. People in Interest of J.T.B., 30 ~olo.~pp. 269, 493 P.2d 691; In re Baum, 8 Wash.App. 337, 506 ~ . 2 d 323. In a civil case, such as the one at bar, which is tried before the court without a jury, there is a presumption that the trial judge has disregarded all inadmissible evidence in reaching his decision. OfSullivan v. Simpson, 123 Mont. 314, 212 P.2d 435; Healy v. First Nat. Bank, 108 Font. 180, 89 P.2d 555, There is nothing in the record and appellant has cited nothing to this Court to rebut this presumption or show that the district judge based his decision on any evidence other than that presented by the witnesses who testified at the permanent custody hear- ing. We must, therefore, examine the record to determine if there is sufficient evidence to support the district judge's permanent custody order. Appellant claims that absent the report to the court, there was insufficient evidence to sustain the district court's findings. Appellant asserts that the district court's custody judgment must be reversed in light of this court's recent de- cision in In re Declaring Swan Children Youths in Need of Care, Mont . - P.2d , 34 St.Rep. 390 (1977). The facts which demanded reversal in Swan are not present in this case. In Swan we held that hearsay evidence was inadmissible in a custody hearing. We reversed the decision of the district court in Swan because the record established that the judge's decision to award custody of appellant's three minor children to the Montana Department of Social and Rehabilitative Services (SRS) was based mainly on hearsay evidence. " * * *the record is replete with oral and written hearsay evidence, admitted over proper objection." Swan, 34 St.Rep. 392. The only evidence which SRS submitted in Swan was written reports prepared by SRS and other state agencies, a written medical report, and the test- imony of two SRS employees. The reports contained written hear- say and the testimony oral hearsay, none of which fell under the exceptions to the hearsay rule. Without the inadmissible hearsay evidence, there was insufficient evidence in Swan to sustain the district judge's permanent custody order. The facts in the case at bar are markedly different from the facts in Swan. Whereas in Swan the record indicated that " * * * certain written reports * * * were considered by the court in its decision", (34 St-Rep. 391) ,there is nothing in the record in this case to indicate that the district judge con- sidered the welfare department report in his permanent custody decision. While the testimony at the custody hearing in Swan consisted solely of largely hearsay statements of two SRS employees, the district court in the instant case heard testi- mony from a clinical psychiatrist, a police officer, school nurse, school principal, school attendance officer, teacher and social worker, all of whom had had personal contact with either the Moyer children, the appellanttor both. In addition, the court heard testimony from appellant herself and from friends and neighbors of appellant. The district court in this case had the opportunity to examine the statements and judge the credi- bility of all the witnesses before making a decision as to cus- tody. This Court will not reverse the child custody decision of a trial judge in the absence of a clear showing of abuse of discretion. In re Declaring Burgdorf and Berry,Dependent and Neglected Children, Mont . , 551 P.2d 656, 33 St.Rep. 605 (1976); In re Declaring Bessette Children Youths in Need of Care, Mont . , 551 P.2d 653, 33 St.Rep. 600 (1976). The district court must exercise its discretion in child custody cases to further the welfare and best interests of the children. In re Declaring Henderson a Dependent and Neglected Child, 168 Mont. 329, 542 P.2d 1204, 32 St-Rep. 1154; In re Declaring Olson Children Dependent and Neglected Children, 164 Mont. 431, 524 P.2d 779. Did the district court's decision further the children's best interests and satisfy the statutory requirements of Title 10, Chapter 13, R.C.M. 1947? Section 10-1314 (1) (b) (i) , R.C.M. 1947 authorizes a district judge to transfer custody of abused or neglected youths to SRS. Section 10-1301 (2) (a) , R.C.M. 1947 defines abuse or neglect as the " * * * commission or omission of any act or acts which materially affect the normal physical or emotional development of a youth * * *". The testimony at the custody hearing produced ample evidence to support both the district judge's finding that the children were abused and neglected while in the custody of their mother, and his judgment that it would be in the children's best interests to transfer their legal custody to Child Welfare Services, a division of SRS. A clinical psychologist testified that he had tested the two oldest children and had found them to have learning disabilities and behavior problems which he concluded were caused by inade- quate home care and supervision. A police officer listed the numerous times that he had apprehended one of the children on juvenile offenses. The officer also testified that he once had discovered one of the children burning lighter fluid on the living room floor of the family home and was informed by appellant that she had given her son permission to play with the fluid. The school nurse testified that on numerous occasions the children had come to school with serious injuries and that they were often inadequately dressed for the time of year. When the school nurse visited the Moyer home, she noticed that the house had a strong smell of vomit, that there were dog feces on the floor, that the two youngest children were very dirty, and that appellant had a very difficult time controlling or disciplining her children. Other witnesses testified that the three school aged children often roamed the city streets unsupervised late at night, often came to school hungry and sleepy, and were oft- times unwilling to associate or play with their classmates. In addition, various witnesses testified as to appellant's admissions that she often did not know where her children were, and that she was unable to discipline them. Finally, a social worker testified appellant had failed to follow the recommen- dations of public agencies which had worked with her, and that when the children had been temporarily taken from appellant and placed in a receiving home, they had progressed well emotionally. We do not dispute the assertions of appellant and the neighbors who testified in her behalf that appellant loves her children. It is clear from the record, however, that appellant is unwilling or unable to provide the care necessary for the physical and emotional well-being of her children. The testi- mony at the custody hearing supports the district judge's find- ing that the children were abused and neglected youths in need of care within the meaning of section 10-1301, R.C.M. 1947, and his judgment, pursuant to section 10-1314(1) (b) (i), R.C.M. 1947, transferring permanent legal custody of the children to SRS. The judgment of the district court is affirmed. --\ /- / We concur: I- Chief Justice i --- ........................... L) Justices

July 26, 1977

dc741014-228f-49d1-b2ac-289f9c0d4365

McGUIRE v AMERICAN HONDA CO

N/A

13490

Montana

Montana Supreme Court

No. 13490 I N THE S U P R E M E COURT O F THE STATE O F MONTANA 1977 D O U G L A S R. McGUIRE, P l a i n t i f f and Respondent, V S . AMERICAN HONDA C O M P A N Y , Defendant and Appellant. Appeal from: District Court of t h e Eighteenth J u d i c i a l D i s t r i c t , Honorable W. W. Lessley, Judge presiding. Counsel of Xccord: For Appellant: Richard W. Anderson argued, B i l l i n g s , Montana Berger, Anderson, S i n c l a i r & Murphy, B i l l i n g s , Montana For Respondent: Jerome Anderson argued, B i l l i n g s , Montana Anderson, Symmes, Forbes, Peete & Brown, B i l l i n g s , Montana Submitted : Decided: JbL - 3 4,: F i l e d : M r . Chief J u s t i c e Paul G. Hatfield d e l i v e r e d t h e Opinion of t h e Court. Defendant American Honda Company appeals from a judgment entered i n t h e d i s t r i c t c o u r t , eighteenth j u d i c i a l d i s t r i c t , G a l l a t i n County. The c o u r t t r i e d t h e i s s u e of l i a b i l i t y without a jury and pursuant t o i t s findings of f a c t and conclusions of law entered judgment i n favor of p l a i n t i f f Douglas R. McGuire. Following d e n i a l of Honda's combined motion t o amend f i n d i n g s of f a c t and conclusions of law and judgment and motion f o r a new t r i a l , Honda appealed. The a c t i o n was brought by p l a i n t i f f t o recover damages sustained i n a motorcycle accident involving a motorcycle owned by p l a i n t i f f and manufactured by Honda. P l a i n t i f f purchased a used 1966 Honda T r a i l 90 motorcycle i n April, 1970. Shortly t h e r e a f t e r he replaced t h e f r o n t t i r e with one purchased by h i s present wife (then fiancee) a t a Bozeman motorcycle d e a l e r ' s shop. O n J u l y 5, 1970, while operating t h e motorcycle i n an a r e a near Bozeman, p l a i n t i f f was thrown over t h e handlebars when t h e f r o n t wheel locked a s he was descending a h i l l . P l a i n t i f f received a broken p e l v i s ; h i s wife, who was r i d i n g on t h e back of t h e motorcycle, was n o t injured. P l a i n t i f f o r i g i n a l l y brought a negligence a c t i o n a g a i n s t Howard Nelson, d/b/a Harmony house, t h e l o c a l Honda d e a l e r , a l l e g - ing t h e d e a l e r n e g l i g e n t l y sold p l a i n t i f f ' s wife a t i r e t h a t was t h e wrong s i z e f o r t h e f r o n t wheel of t h e motorcycle. Honda s p e c i f i e d a 2.50 x 17 t i r e s i z e f o r t h e f r o n t wheel of its T r a i l 90 model, and a 2.75 x 17 t i r e s i z e f o r t h e rear; t h e l a r g e r s i z e was sold t o p l a i n t i f f ' s wife. P l a i n t i f f a l l e g e s t h a t t h e i n j u r i e s he suffered were caused by t h e sudden s e i z u r e of t h e f r o n t wheel when t h e t i r e was forced up a g a i n s t t h e f r o n t fender. P l a i n t i f f was awarded $45,000 by t h e jury which found f o r him i n t h a t action. Nelson appealed and t h i s c o u r t i n McGuire v. Nelson, 162 Mont. 37, 508 P.2d 558, held t h a t testimony of p l a i n t i f f ' s expert witness had been improperly received s i n c e no foundation had been given f o r an i n c o u r t demonstration i n which t h e motorcycle's f r o n t suspension w a s compressed through t h e use of f u r n i t u r e clamps. It w a s held t h a t p l a i n t i f f had f a i l e d t o show a s u b s t a n t i a l s i m i l a r i t y of conditions between t h e f o r c e employed i n t h e demonstration and t h e force applied a t t h e t i m e of t h e accident. The cause w a s remanded t o t h e d i s t r i c t c o u r t f o r a new t r i a l . P l a i n t i f f then f i l e d an amended complaint adding Amer- ican Honda Company as a defendant, a l l e g i n g negligent design and manufacture of a d e f e c t i v e product i n t h a t t h e narrowness of t h e f r o n t fork allowed t h e f r o n t wheel t o lock when f i t t e d with an oversize t i r e , with no warning given f o r such a dangerous condition. P l a i n t i f f alleged t h a t Honda should be held s t r i c t l y l i a b l e i n t o r t . Following t h e presentation of p l a i n t i f f ' s case before a jury, Honda's motion f o r a d i r e c t e d v e r d i c t was granted and judgment i n favor of Honda entered. P l a i n t i f f and defendant Nelson then s e t t l e d , upon a covenant not t o sue, f o r t h e amount of $3,750, P l a i n t i f f appealed. I n McGuire v. Nelson, 167 Mont. 188, 536 P.2d 768, t h i s Court held t h a t testimony of p l a i n t i f f ' s expert witness, Roy Prussing, a s t o h i s opinion concerning t h e s a f e t y and/or d e f e c t s of t h e design of t h e f r o n t suspension and t h e cause of t h e accident had been improperly excluded. This Court held t h a t expert testimony is proper t o explain t h e cause of an accident when t h e subject i s complex and t h e expert quali- f i e d , and t h a t witness Prussing was duly q u a l i f i e d . The cause was returned t o t h e d i s t r i c t c o u r t f o r a t h i r d t r i a l . The p a r t i e s then entered upon a s t i p u l a t i o n pursuant t o which t h e i s s u e s of l i a b i l i t y and damages would be s p l i t and t h e l i a b i l i t y i s s u e t r i e d before t h e d i s t r i c t c o u r t without a jury. It was s t i p u l a t e d t h a t t h e testimony and evidence sub- mitted by p l a i n t i f f would c o n s i s t of testimony and e x h i b i t s on t h e l i a b i l i t y i s s u e received during t h e second t r i a l of t h e case, and supplemental testimony of witness Prussing presented by h i s May 29, 1974 desposition. It was agreed t h a t s u b j e c t r t o Honda's r i g h t t o appeal, a jury t r i a l would be held t o d e t e r - mine t h e i s s u e of damages i n t h e event t h e d i s t r i c t c o u r t found t h e i s s u e of l i a b i l i t y i n p l a i n t i f f ' s favor. P l a i n t i f f submitted t o t h e c o u r t t h e record of t h e pre- vious t r i a l a s it concerned h i s proof of Honda's l i a b i l i t y , and t h e deposition of witness Prussing. Honda presented four expert witnesses a t t h i s t r i a l and had twenty e x h i b i t s entered i n t o evidence. P l a i n t i f f t e s t i f i e d i n r e b u t t a l . The d i s t r i c t c o u r t made and entered i t s f i n d i n g s of f a c t and conclusions of law on June 23, 1976. The c o u r t found t h a t p l a i n t i f f ' s Honda 90 motorcycle would not s a f e l y accomodate on i t s f r o n t wheel t h e t i r e s p e c i f i e d f o r t h e r e a r wheel and t h a t Honda had displayed no warnings a g a i n s t t h e interchange of tires. It a l s o found t h a t t h e f r o n t suspension was so designed t h a t when it "bottomed" t h e r e was i n s u f f i c i e n t clearance t o prevent c o n t a c t between t h e fender and f r o n t t i r e . The d i s t r i c t c o u r t found t h a t p l a i n t i f f ' s i n j u r i e s were proximately caused by Honda's f a i l u r e t o warn a g a i n s t interchange of t h e f r o n t and r e a r tires, by negligent design of t h e f r o n t suspension system, and by Honda's marketing a product deceptively and unreasonably dangerous t o t h e user. The d i s t r i c t c o u r t concluded a s a matter of law t h a t t h e motorcycle was negligently and deceptively designed i n t h a t t h e tolerances between t h e f r o n t wheel and fender w e r e dangerously c l o s e ; t h a t t h e f r o n t and r e a r tires could not be s a f e l y interchanged although deceptively similar; and that there was no warning to the user of the dangers involved in the foreseeable practice of tire substitution. The court concluded that the negligent design, failure to warn and resulting defects were a proximate cause of plaintiff's injuries; that plaintiff neither assumed the risk of injury in his operation of the motorcycle nor was guilty of contributory negligence; and that plaintiff had proven by a preponderance of the evidence his allegations concerning the strict liability in tort of American Honda Company. Pursuant to its findings of fact and conclusions of law the district court entered judgment in favor of plaintiff on the issue of liability and ordered the trial of the damage issue. Honda specifies five issues for review: Whether the evidence supports the district court's deter- minations (1) that the interchange of the front and rear tire caused the front wheel to lock, being thereby deceptively danger- ous to the user; (2) that Honda's failure to warn against such interchange caused plaintiff's injuries; (3) that the close toler- ance between the front fender and tire constituted negligent design and caused plaintiff's injuries; (4) that plaintiff was not guilty of contributory negligence; (5) that plaintiff had not assumed the risk of his actions. Honda contends that the evidence shows no danger of a front wheel seizure when the front and rear tires are interchanged. From this, Honda argues, it follows that the interchange did not cause plaintiff's injuries, that there was no need to warn against such interchange, and that the Honda 90 motorcycle was not neg- ligently designed. Honda invites this Court to disregard the testimony of plaintiff's expert witness concerning the design of the front suspension and t h e cause of p l a i n t i f f ' s i n j u r i e s and t o accept a s more c r e d i b l e t h e evidence o f f e r e d by Honda i n t h e nonjury t r i a l . This Court has s a i d t h a t a t r i a l c o u r t may not d i s r e g a r d uncontradicted c r e d i b l e evidence. F a i t h Lutheran Retirement Home v. V e i s , 156 Mont. 38, 46, 473 P.2d 503. The evidence presented by Honda w a s n o t , however, un- contradicted. The t r i a l c o u r t a l s o received t h e opinion of p l a i n t i f f ' s expert witness, evidence it was d i r e c t e d t o r e c e i v e by t h i s Court i n i t s d e c i s i o n on t h e second appeal of t h e cause, McGuire v. Nelson, 167 Mont. 188, 197, 536 P.2d 768. The former appeal e s t a b l i s h e d t h e law of t h e case. Solberg v. Sunburst O i l & Gas Co., 76 Mont. 254, 246 P. 168; Anderson v. Border, 87 Mont. 4 , 285 P. 174. I n ~ c G u i r e it s t a t e s : "All t h a t testimony, combined with Prussing's testimony as t o whether o r not he considered t h e design t o be dangerous, had it been allowed i n t o testimony, would have been s u f f i c i e n t evidence t o allow t h e c a s e t o go t o t h e jury * * *." 167 Mont. 197. The exact same evidence was s t i p u l a t e d i n t h i s case. Therefore a prima f a c i e c a s e f o r p l a i n t i f f w a s made o u t a s a matter of law. Conceding t h a t t h i s Court i n t h e second appeal found witness P r u s s i n g ' s testimony t o have m e t t h e threshold require- ments f o r consideration by t h e trier of f a c t , Honda contends t h a t such evidence f a i l s t o prove a causal connection between t h e a l l e g e d d e f e c t i n t h e design of t h e f r o n t suspension and t h e i n j u r i e s suffered by p l a i n t i f f . Honda relies on Brandenburger v. Toyota Motor Sales, 162 Mont. 506, 515, 518, 513 P.2d 268, where t h i s Court s t a t e d : "The adoption of t h e d o c t r i n e of strict l i a - b i l i t y does not r e l i e v e t h e p l a i n t i f f from t h e burden of proving h i s case. V i t a l t o t h a t proof i s t h e n e c e s s i t y of proving t h e e x i s t e n c e of a d e f e c t i n t h e product and t h a t such d e f e c t caused t h e i n j u r y complained o f . " The standard of proof adopted i n Brandenburger i s set f o r t h i n p a r t a s follows: "The most convincing evidence is an e x p e r t ' s pinpointing t h e d e f e c t and giving h i s opinion on t h e p r e c i s e cause of t h e accident a f t e r a thorough inspection." 162 Mont. 518. The testimony of p l a i n t i f f ' s e x p e r t witness included a d e s c r i p t i o n of t h e elements of t h e design of t h e motorcycle's f r o n t suspension which he judged t o be d e f e c t i v e , and h i s opinion t h a t t h i s d e f e c t i v e design caused p l a i n t i f f ' s i n j u r i e s . Witness Prussing's testimony was based upon tests he performed and ob- s e r v a t i o n s he made i n t h e course of examining t h e f r o n t suspen- s i o n of t h e motorcycle. P l a i n t i f f , h i s wife, and h i s cousin George Barclay a l s o t e s t i f i e d i n support of p l a i n t i f f ' s theory of causation. Some- time a f t e r t h e accident, they noticed c o n t a c t between t h e f r o n t tire and fender of p l a i n t i f f ' s Honda 90. While denying t h a t t h i s c o n t a c t could slow t h e f r o n t wheel t o a s t o p , Honda's expert witnesses conceded t h a t such c o n t a c t occurred during t h e i r tests of a s i m i l a r motorcycle on which an o v e r s i z e f r o n t t i r e w a s mounted. Judge W. W. Lessley, eighteenth j u d i c i a l d i s t r i c t , presided over t h e t r i a l of t h e o r i g i n a l a c t i o n , McGuire v. Nelson, 162 Mont. 37, 508 P.2d 558. H e a l s o presided over t h e jury t r i a l f o r which Honda w a s added a s a defendant, McGuire v. Nelson, 167 Mont. 188, 536 P.2d 768, and t h e nonjury t r i a l from which t h e p r e s e n t appeal i s taken. The t r i a l c o u r t considered a l l of t h e evidence before finding i n p l a i n t i f f ' s favor. I n a l l proceedings, 57 e x h i b i t s were received, and t h e record t o t a l s 612 pages. I n Strong v. Williams, 154 Mont. 65, 68, 460 P.2d 90, t h i s Court s t a t e d : " I t i s well s e t t l e d i n t h i s j u r i s d i c t i o n t h a t wherever t h e r e i s a c o n f l i c t i n t h e evidence t h i s Court may only review t h e testimony f o r t h e pur- pose of determining whether t h e r e i s any sub- s t a n t i a l evidence i n t h e record t o support t h e v e r d i c t * * *. Where t h e evidence i s c o n f l i c t i n g , but s u b s t a n t i a l evidence appears i n t h e record t o support t h e judgment, t h e judgment w i l l n o t be disturbed on appeal, and t h i s i s e s p e c i a l l y t r u e when t h e d i s t r i c t c o u r t , as here, has passed upon t h e s u f f i c i e n c y of t h e evidence on motion f o r a new t r i a l and upheld i t s s u f f i c i e n c y . Batchoff v. Craney, 119 Mont. 157, 172 P.2d 308; Wallace v. Wallace, 85 Mont. 492, 279 P. 374 * * *." To t h e same e f f e c t , see Kirby v. Kelly, 161 Mont. 66, 504 P.2d 683; Davis v. Davis, 159 Mont. 355, 497 P.2d 315. W e f i n d t h e r e was s u b s t a n t i a l evidence submitted t o t h e trier of f a c t f o r it t o f i n d t h a t p l a i n t i f f was not g u i l t y of contributory negligence nor assumed t h e r i s k of h i s a c t i o n s and t h a t p l a i n t i f f ' s i n j u r i e s w e r e proximately caused by t h e defec- t i v e design of h i s Honda 90 motorcycle. Judgment is affirmed. Chief J u s t i c e -----

July 14, 1977

2b1575d7-b5cb-4f03-9a8e-077298160cda

BONAWITZ v BOURKE

N/A

13520

Montana

Montana Supreme Court

No. 13520 I N T H E SUPREME C O U R T O F THE STATE O F M O N T A N A 1977 N O R V A L C. BONAWITZ, P l a i n t i f f and Respondent, LOIS BOURKE as Executrix of t h e Estate of PAT BOURKE, Defendant and Third P a r t y P l a i n t i f f and Appellant, RUSSELL FLEHARTY, G E N E MOSSEY, WILLIAM H. WEBSTER, and WILLIAM J. WEBSTER, Third Party-Defendants and Respondents. Appeal from: D i s t r i c t Court of t h e Tenth J u d i c i a l D i s t r i c t , Honorable LeRoy L. McKinnon, Judge p r e s i d i n g . Counsel of Record: For Appellant: Cure and Borer, Great F a l l s , Montana Charles Borer argued, Great F a l l s , Montana P a t t e r s o n and Marsillo, Missoula, Montana For Respondent: Robert Johnson Lewistown, Montana Torger Oaas argued, Lewistown, Montana Marra, Wenz & Iwen, Great F a l l s , Montana David Hopkins argued, Great F a l l s , Montana Rapkoch and Knopp, Lewistown, Montana Robert L. Knopp argued, Lewistown, Montana #fl JFLL 1!3L F i l e d * Submitted: A p r i l 19, 1977 Clerk M r . J u s t i c e John Conway Harrison d e l i v e r e d t h e Opinion of t h e Court. P l a i n t i f f Norval Bonawitz brought s u i t i n t h e d i s t r i c t c o u r t , Cascade County, a g a i n s t t h e E s t a t e of Pat Bourke, deceased, t o recover damages f o r i n j u r i e s s u f f e r e d when a s c a f f o l d upon which he was working collapsed. Bourke d i e d a f t e r t h e accident, b u t p r i o r t o commencement of t h i s a c t i o n . The E s t a t e of Bourke ( ~ o u r k e ) f i l e d a t h i r d p a r t y complaint f o r indemnity a g a i n s t t h i r d p a r t y defendants R u s s e l l Fleharty, Gene Mossey, W i l l i a m H. Webster and William J. Webster. After extensive formal d i s - covery by a l l p a r t i e s , t h i r d p a r t y defendants f i l e d motions f o r summary judgment. The c o u r t entered summary judgment i n favor of a l l t h i r d p a r t y defendants. Bourke appeals t h i s r u l i n g . Bonawitz and Bourke were t h e s o l e stockholders of a corporation known a s Bonawitz & Bourke, Inc. Bourke was t h e p r e s i d e n t and owned 75% of i t s s t o c k . Bonawitz was t h e vice- p r e s i d e n t and owned 25% of t h e s t o c k . Bonawitz & Bourke, Inc. owned a ranch south of Lewistown, Montana known a s t h e " ~ e w i s Place". Bourke was l e a s i n g t h i s ranch from t h e corporation pursuant t o an o r a l l e a s e . O n t h e morning of t h e accident, a work p a r t y c o n s i s t i n g of Bourke, Bonawitz, and t h e f o u r t h i r d p a r t y defendants met a t a ranch house l o c a t e d on t h e Lewis Place. The purpose of t h i s g a t h e r i n g was t o r e s h i n g l e t h e roof of t h e ranch house. The work was undertaken a t t h e r e q u e s t of Bourke. There is some question whether Bourke i n d i v i d u a l l y , o r t h e corporation, supplied t h e s h i n g l e s and a t l e a s t a portion of the m a t e r i a l s t o be used i n t h e construction of a s c a f f o l d . A l l labor was on a volunteer b a s i s . The four t h i r d p a r t y defendants a r r i v e d a t t h e Lewis Place first, and commenced b u i l d i n g t h e s c a f f o l d t o be used i n che r e s h i n g l i n g process. The Websters and Mossey had previous experience i n t h e construction of s c a f f o l d s . Neither Bourke rlor Bonawitz p a r t i c i p a t e d i n t h e a c t u a l c o n s t r u c t i o n o r e r e c t i o n 01' the s c a f f o l d . During t h i s time they were engaged i n hauling the s h i n g l e s from a s t o r a g e shed and various o t h e r d u t i e s i n c i d e n t a l t o t h e s h i n g l i n g operation. When t h e s c a f f o l d i n g was f u l l y e r e c t e d , Bonawitz and t h e thi1.d p a r t y defendants climbed upon it and began removing t h e old s h i n g l e s . They had been working about an hour and were j u s t beginning t o put on t h e new s h i n g l e s when t h e c e n t e r support f o r t h e s c a f f o l d collapsed. A s he f e l l , Bonawitz apparently put h i s arm through t h e g l a s s of a nearby window i n an attempt t o c a t c h himself. Severe and p a r t i a l l y d i s a b l i n g i n j u r i e s r e s u l t e d . P r e t r i a l discoveryindicated t h e cause of t h e s c a f f o l d f a i l u r e was improper construction, r a t h e r than weakness of t h e component p a r t s . Bonawitz's complaint a l l e g e s he was i n t h e employ of Pat Bourke a t t h e time of t h e accident and Bourke, a s t h e employer, had an o b l i g a t i o n t o f u r n i s h p l a i n t i f f with a s a f e place t o work and s a f e appliances and i n s t r u m e n t a l i t i e s w i t h which t o work. After discovery was completed, Bourke f i l e d a t h i r d p a r t y com- p l a i n t f o r indemnity a g a i n s t t h e t h i r d p a r t y defendants a l l e g i n g it was t h e i r a c t i v e and primary negligence i n t h e c o n s t r u c t i o n of the s c a f f o l d t h a t caused p l a i n t i f f ' s i n j u r i e s . Two i s s u e s a r e presented upon appeal: I. Whether t h e d i s t r i c t court e r r e d i n g r a n t i n g summary judgment i n favor of t h i r d p a r t y defendants? 2. Whether Bourke is l i a b l e t o Bonawitz by v i r t u e of t h e Scaffold Act under t h e f a c t s and circumstances of t h i s case? Rule 5 6 ( c ) , M.R.Civ. P., s t a t e s t h a t summary judgment s h a l l be rendered only i f : "* * * the pleadings, depositions, answers t o i n t e r r o g a t o r i e s , and admissions on f i l e show t h a t t h e r e i s no genuine i s s u e as t o any m a t e r i a l f a c t and t h a t t h e moving p a r t y i s e n t i t l e d t o a judgment as a matter of law." * *" The general purpose underlying Rule 56, M.R.Civ. P., is t o promptly dispose of a c t i o n s which have no genuine i s s u e of f a c t , thereby encouraging j u d i c i a l economy through t h e elimina- t i o n of unnecessary trial, delay and expense. Guthrie v. Dept. of S o c i a l and Rehab. Services, Mont . 9 563 P.2d 555, 34 S t . Rep. 255; Silloway v. Jorgenson, 146 Mont. 307, 406 P.2d 167. Nevertheless, summary judgment is n o t a s u b s t i t u t e f o r a t r i a l . Guthrie, supra; Johnson v. Johnson, Mon t . J 561 P.2d 917, 34 S t . Rep. 162. This Court has c o n s i s t e n t l y h e l d t h a t t h e p a r t y moving f o r summary judgment has t h e burden of showing t h e complete absence of any genuine i s s u e as t o a l l f a c t s which are deemed m a t e r i a l i n l i g h t of those s u b s t a n t i v e p r i n c i p l e s which e n t i t l e d him t o a judgment a s a m a t t e r of l a w . Harland v. Anderson, Mon t , , 548 P.2d 613, 33 St.Rep. 363. This r u l e imposes a s t r i c t standard upon t h e movant and i n Kober &. Kyriss v. B i l l i n g s Deaconess Hosp., 148 Mont. 13.7, 122, 417 P.2d 476, t h i s Court, quoting from 6 Moore's Fed.Prac .2d 956.15[3], held: ""* * *To s a t i s f y h i s burden t h e movant must make a showing t h a t is q u i t e c l e a r what t h e t r u t h is, and t h a t excludes any r e a l doubt as t o t h e e x i s t e n c e of any genuine i s s u e of m a t e r i a l f a c t . ' I 1 It is c l e a r t h e r e f o r e t h a t t h e p a r t y opposing t h e motion w i l l be indulged t o t h e e x t e n t of a l l inferences which may be reasonably drawn from t h e o f f e r e d proof. Harland v. Anderson, supra; Mally v. Asanovich, 149 Mont. 99, 423 P.2d 294; Johnson v. S t . P a t r i c k ' s Hospital, 148 Mont. 125, 417 P.2d 469. Considering t h e f a c t s of t h e i n s t a n t case, we f e e l genuine i s s u e s of m a t e r i a l f a c t remain unresolved. The t h i r d p a r t y defendants a r e t h e r e f o r e n o t e n t i t l e d t o summary judgment as a matter of law. While we f i n d s e v e r a l material i s s u e s of f a c t remain unresolved, we f e e l t h e most s i g n i f i c a n t i s found i n t h e d i s t r i c t c o u r t ' s f i n d i n g of f a c t No. 4. This f i n d i n g s t a t e s : "The m a t e r i a l s were furnished by Bourke, o r by t h e Corporation * * *." C e r t a i n l y t h e f a c t of whether Bourke i n d i v i d u a l l y o r t h e corpora- t i o n furnished t h e c o n s t r u c t i o n m a t e r i a l s is of relevance determining f o r whom t h e work was being done. The f a c t of whether Bourke i n d i v i d u a l l y o r the corporation was i n immediate supervision o r c o n t r o l of t h e r e s h i n g l i n g operation i s of g r e a t import i n l i g h t of p l a i n t i f f ' s r e l i a n c e on Montana's S c a f f o l d Act, s e c t i o n 69-1401, e t seq., R,,C.M. 1947. The i n t e r p r e t a t i o n given Montana's Scaffold Act i n regard t o t h e person who owes t h e duty of c a r e t o workers was discussed i n S t a t e e x r e l . Great F a l l s National Bank v. D i s t r i c t Court, 154 Mont. 336, 343, 463 P.2d 326, where t h e Court s t a t e d : ' I * * * a g a i n s t whom i s t h e i n j u r e d workman e n t i t l e d t o recover? Qr s t a t e d another way, who owes t h e b a s i c duty imposed by t h e Scaffold Act? W e must look t o t h e Scaffold Act i t s e l f t o determine t h e answer t o t h i s question. Section 69-1402, R.C.M. 1947, imposes a duty on 'every owner, person, o r corporation who s h a l l have t h e d i r e c t and immediate --- ~ ~ r : m i r \ n h w n ~ m t n n l nf' thn n n n n t - w r r n t i n n nr, supel V I D I V L I V L b V L I bL VI U I V L L G C I V I I U Ub U I V I I remodeling of any b u i l d i n g having more than t h r e e framed f ' - - - - I "- ----- ' 2 - - 4- , , , , , , , , . n - l n " . l . r r A LUUL'Y ' ( r u P L ' U V L U ~ d ~ e ~ i ~ p u ~ ' a ~ - y pLallncu : 'which s h a l l be l a i d t o form a good sub- s t a n t i a l temporary f l o o r f o r t h e p r o t e c t i o n of employees and a l l persons engaged above o r below, o r on such temporary f l o o r i n such b u i l d i n g . ' ( ~ m p h a s i s supplied. ) " ~ e c t i o n 69-1404, R.C.M. 1947, provides t h a t 'It - s h a l l be t h e duty of a l l owners, c o n t r a c t o r s , b u i l d e r s , o r persons having t h e d i r e c t and immediate c o n t r o l o r supervision of any buildings under c o n s t r u c t i o n t o p r o t e c t stairways, e l e v a t o r openings, f l u e s , and a l l o t h e r openings i n t h e . f l o o r s . ( ~ m p h a s i s supplied. ) I' 154 Mont . 343 See a l s o : Boyer v. Kloepfer, Mont . , , 554 P.2d 1116, This Court has h e l d t h a t t h e f i r m , person o r corporation having d i r e c t and immediate c o n t r o l of t h e work involving t h e use of s c a f f o l d i n g i s t h e one upon whom t h e duty is imposed by t h e S c a f f o l d Act. S t a t e e x r e l . Great F a l l s National Bank v. D i s t r i c t Court, supra. This is a c l a r i f i c a t i o n of dictum contained i n e a r l i e r case l a w which appeared t o impose a non- delegable duty upon t h e landowner. See: Pollard v. Todd, 148 Mont. 171, 418 P.2d 869; J o k i v. McBride, 150 Mont. 378, 463 P. 2d 78. Resolution of a p p e l l a n t ' s first i s s u e makes d i s c u s s i o n of t h e second i s s u e unnecessary. The summary judgment i s vacated and t h e cause remanded t o t h e d i s t r i c t c o u r t f o r f u r t h e r pro- ceedings n o t i n c o n s i s t e n t with t h i s opinion. W e Concur: @&A~+~~ Chief J u s t i c e

July 14, 1977

d9b67ecc-5281-4ada-9c0e-29220067f198

W R GRACE CO v DEPT OF REVENU

N/A

13489

Montana

Montana Supreme Court

No. 13489 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 W.R. GRACE & CO., a Conn- ecticut Corporation, Plaintiff and Respondent, THE DEPARTMENT OF REVENUE OF THE STATE OF MONTANA, Defendant and Appellant. Appeal from: District Court of the First Judicial District, Honorable Peter G. Meloy, Judge presiding. Counsel of Record: For Appellant: William D. Dexter argued, Ol.ympia, Washington For Respondent : Hughes, Bennett and Cain, Helena, Montana George T. Bennett argued, Helena, Montana Submitted: March 23, 1977 Decided: j j l , k # 'f)77 Filed: J U b k' ;ii]i. Mr. Justice Frank I. Haswell delivered the Opinion of the Court. Respondent W. R . Grace and Co. (Grace) brought this action in the district court, Lewis and Clark County, for a declaratory judgment challenging the Department of Revenue's (DOR) asserted right to compel Grace to answer certain inter- rogatories. The interrogatories were propounded to Grace sub- sequent to a deficiency assessment of corporation license taxes by DOR, but prior to protest hearing concerning the amount of the assessment. The district court granted Grace's motion for sum- mary judgment in the declaratory judgment action and DOR appeals to this Court. Grace is a Connecticut corporation which was at all times relevant, qualified to do, and doing business in Montana. For the calendar years 1967 through and including 1971, which are the taxable years in question, Grace filed Montana corporation license tax returns with DOR's predecessor, the State Board of Equaliza- tion. Thereafter, the auditors of the Multistate Tax Commis- sion, of which Montana is a member, conducted a field audit of Grace's records. There is no contention that the auditors were denied access to any relevant documents or personnel during the course of the audit. On the basis of this field audit, DOR assessed additional corporation license taxes. The amount of the deficiency assessment is the underlying cause of the instant controversy. DOR formally notified Grace by letter dated October 16, 1973, that it had made deficiency assessments for the taxable years in question in the total amount of $123,706.38, including interest. Pursuant to section 84-1508.1, R.C.M. 1947, Grace timely filed a protest of DORIS deficiency assessments. This notice of protest, dated November 7, 1973, requested an oral hearing and opportunity to present evidence in support of its protest. On April 24, 1974 and again on October 23 and 24, 1974, counsel for Grace met with counsel for and representatives of DOR to discuss a possible solution to the dispute over the amount of the deficiency assessments. At the latter meeting a protest hearing was scheduled to begin on December 4, 1974. On November 1, 1974, DOR sent to Grace a set of inter- rogatories consisting of thirty-nine questions. On November 20, Grace answered twenty-nine of these interrogatories and objected to the remaining ten questions on grounds of irrelevancy or be- cause compilation of the requested information by Grace would be unreasonably burdensome. In addition, on or about November 1, DOR requested that Grace submit to a re-audit of its books and records at its corporate offices in New York City. Grace acquiesced to the re-audit and DOR continued the hearing originally scheduled for December 4, to April 9, 1975. Thereafter, on or about Feb- ruary 10, DOR cancelled the April 9 hearing and informed Grace that it had retained additional counsel. On February 18 DOR served a second set of interrogatories upon Grace. Grace, deem- ing the second set of interrogatories to be untimely, irrelevant, and unreasonable, filed this action for a declaratory judgment on April 30, 1975. On March 2, 1976, Grace filed a motion for summary judgment. Following extensive briefing and oral argument, the district court granted Grace's motion. Two issues are presented for review in this appeal: 1. Whether DOR may discover additional information from a taxpayer after entering deficiency assessment, but prior to the protest hearing provided for by section 84-1508.1, R.C.M. 1947. 2 . Whether the interrogatories submitted by DOR to Grace are material and relevant in the instant case. The portion of section 84-1508.1 which is controlling in the instant case states: "(a) Deficiency assessments. If, the state department of revenue determines that the amount of tax due is greater than the amount disclosed by the return, it shall mail to the taxpayer a notice of the additional tax proposed to be assessed. Within thirty (30) days after the mail- ing of the notice, the taxpayer may file with the state department of revenue a written protest against the proposed additional tax, setting forth the grounds upon which the protest is based, and may request in its protest an oral hearing or an opportunity to present additional evidence relat- ing to its tax liability. If no protest is filed, the amount of the additional tax proposed to be assessed becomes final upon the expiration of the thirty (30) day period. If such protest is filed, the state department of revenue shall reconsider the proposed assessment, and if the taxpayer has so requested, shall grant the taxpayer an oral hearing. After consideration of the protest and the evidence presented in the event of an oral hearing, the state department of revenue's action upon the protest is final when it mails notice of its action to the taxpayer." The crux of this case is the interpretation of that portion of section 84-1508.1 which provides for a protest hearing before DOR. DOR argues that the statute contemplates a full blown evi- dentiary hearing at which both parties are allowed to present evidence supporting their respective positions. Grace on the other hand urges that the statute contemplates not an evidentiary hearing, but merely an opportunity for the taxpayer to request a review of the administrative procedures used to calculate the assessment and to present evidence in support of his tax cal- culations. We agree with the latter interpretation. We recently examined the law dealing with statutory in- terpretation in Department of Revenue v. American Smelting and Refining Co., Mont . - P. 2d , 34 St.Rep. 597, where we stated: "The function of the Supreme Court when constru- ing a statute is simply to ascertain and declare what is in substance stated therein, and not to insert what has been omitted or to omit what has been inserted. Dunphy v. Anaconda Co., 151 Mont. 76, 438 P.2d 660; In re Transportation of School Children, 117 Mont. 618, 161 P.2d 901; Section 93-401-15, R.C.M. 1947. The fundamental rule of statutory construction is that the intent of the legislature controls. Matter of Senate Bill No. 23, Chapter 491, Montana Session Laws of 1973, 168 Mont. 102, 540 P.2d 975, 32 St.Rep. 954; Hammill v. Young, 168 Mont. 81, 540 P.2d 971, 32 St-Rep. 935; Dunphy v. Anaconda Co., supra; Section 93-401- 16, R.C.M. 1947. Where the intent of the legis- lature can be determined from the plain meaning of the words used, the courts may not go further and apply any other means of interpretation. State ex rel. Huffman v. District Court, 154 Mont. 201, 461 P.2d 847; Dunphy v. Anaconda Co., supra." Here, the plain meaning of the words used by the legis- lature unmistakably discloses its intent. Section 84-1508.1 does not contemplate "a true adversary hearing" and accordingly, there is no need for DOR to develop a "full and complete record" at such hearing. Section 84-1508.1 provides the taxpayer with a speedy remedy to be used to challenge possible administrative error in the calculation of the proposed deficiency assessment. By its terms this section grants DOR only the power to "reconsider the proposed assessment." This necessarily means that it is incumbent upon DOR to be prepared for a protest hearing on its proposed deficiency assessment at the time such notice of assess- ment is mailed to the taxpayer. To permit DOR to routinely com- pel the taxpayer to submit to after-the-fact interrogatories would be directly in opposition to the initial presumption that the assessment was validly made after a complete investigation of all the relevant facts by DOR. In sum, the protest hearing is nothing more than a final opportunity for the taxpayer to convince DOR that its deficiency assessment is in whole or in part erroneous. We find no merit in DOR's argument that the hearing contemplated by section 84-1508.1 is a "contested case" governed by the Montana Administrative Procedure Act (Title 82, Chapter 42, R.C.M. 1947). As stated above, section 84-1508.1 does not provide for a true adversary hearing, but only for a presentation of additional evidence by the taxpayer and a reconsideration by DOR thereafter. This is not the type of hearing contemplated by the MAPA. Secondly, the procedure outlined within section 84-1508.1 governs the protest hearing. This procedure is con- trary to MAPA procedure thereby indicating a legislative intent to prescribe procedure by statute to the exclusion of MAPA. DOR will not suffer prejudice by this Court's refusal to require Grace to submit to further discovery prior to the protest hearing. At an oral hearing below, both parties agreed that DOR cannot enlarge the amount of the deficiency assessment following the protest hearing. Furthermore, any appeal to the State Tax Appeal Board from DOR's final determination of tax de- ficiency is a trial de novo. Therefore, DOR will have full discovery power at the time of appeal from the protest hearing. The resolution of the first issue renders discussion of the second issue unnecessary. The judgment of the district court is affirmed. Justice Justices L///

July 28, 1977

adf03e01-fcc9-43c4-9349-b728657e30df

LINK v STATE

N/A

13686

Montana

Montana Supreme Court

No. 13686 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 HENRY A. LINK et al., Plaintiffs and Respondents, THE STATE OF MONTANA, Acting by and through the DEPARTMENT OF FISH AND GAME et al., Defendants and Appellants. Appeal from: District Court of the First Judicial District, Honorable Nat Allen, Judge presiding. Counsel of Record: For Appellants: Clayton Herron argued, Helena, Montana For Respondents: Hutton, Sheehy and Cromley, Billings, Montana John C. Sheehy argued, Billings, Montana Submitted: May 25, 1977 ~ecided: JUL22 1 9 1 7 Filed: J U 2 2 )gpl- M r . J u s t i c e John Conway Harrison delivered t h e Opinion of the Court. This is an appeal from an order granting partial summary judgment i n an a c t i o n f o r s p e c i f i c performance of c o n t r a c t o r damages f i l e d i n the d i s t r i c t court, Lewis and Clark County. Prior t o January 1, 1950 p l a i n t i f f had a concession t o operate a mountain r a i l r o a d and tram i n Lewis and Clark Caverns S t a t e Park. The tram took v i s i t o r s from a parking l o t up a mountainside t o the entrance of the L e w i s and Clark Caverns. I n 1950 the S t a t e Park Commission (appellant Fish and Game Commission is the successor agency c o n t r o l l i n g s t a t e parks, formerly under the j u r i s d i c t i o n of t h e S t a t e Park commission) entered i n t o an agreement with Link Bros., Concessionaires, p l a i n t i f f and respondent herein, whereby the S t a t e Park Commission took over the operation and maintenance of the r a i l r o a d and tram. That agreement provided: "The Commission hereby agrees t o take over the operation and maintenance of' the said mountain r a i l r o a d , a l s o known and designated as a h o i s t and tramway, a t L e w i s and Clark Caverns S t a t e Park, Montana, as of January 1, 1950, and t o operate and maintain same a t i t s own expense. The equity of s a i d Concessionaires i n t h e business of said mountain r a i l r o a d as provided i n s a i d agreement of June 15, 1946, s h a l l be recognized by the payments t o the concessionaires by t h e s a i d Commission the following amounts* * * . I 1 The agreement a l s o provided: "Said Commission f u r t h e r agrees t o operate s a i d mountain r a i l r o a d , tram and h o i s t , and handle t h e v i s i t i n g public thereon i n such a way as t o encourage s a i d public t o use t h e other f a c i l i t i e s o$ the Concessionaries a t s a i d Lewis and Clark Caverns S t a t e Park, and t o operate said r a i l r o a d i n a manner that is b e n e f i c i a l t o the business of the Concessionaires* * *.I1 P l a i n t i f f ' s complaint a l l e g e s that t h e s t a t e of Montana, through its Fish and Game Commission, has refused t o operate and maintain s a i d r a i l r o a d , as it agreed t o do under the contract, and has disbanded and set a s i d e the equipment and machinery r e l a t i n g t o the r a i l r o a d . Based upon a f f i d a v i t s and answers t o i n t e r r o g a t o r i e s , p l a i n t i f f concessionaire made a motion f o r a p a r t i a l summary judgment t o the e f f e c t t h a t t h e s t a t e of Montana, through its Fish and Game Commission, had breached, was now i n breach, and intended i n the f u t u r e t o breach its contractual duty t o operate and maintain the mountain r a i l r o a d and tram. The d i s t r i c t court granted the p a r t i a l summary judgment on November 4, 1976. The operative language of the c o u r t ' s order f o r p a r t i a l summary judgment is: "IT IS HEREBY ORDERED t h a t p l a i n t i f f s be and a r e hereby granted p a r t i a l summary judgment t o the e f f e c t t h a t the defendants breached, do now breach, and intend i n the future t o breach t h e i r contractual duty t o operate and maintain the mountain r a i l r o a d and tram i n U w i s and Clark S t a t e Caverns; and t h e Court hereby reserves the f u r t h e r decision whether t h e defendants a r e e n t i t l e d t o any r e l i e f by v i r t u e of t h e i r amended and supplemental answer and counterclaim, and, i f p l a i n t i f f s are e n t i t l e d t o r e l i e f , whether such r e l i e f s h a l l be by s p e c i f i c performance o r by compensation i n damages. " Respondent Concessionaire moved t o deny the Comrnissionts appeal on t h r e e grounds: 1. That the order is non-appealable because it is i n t e r l o c u t o r y i n character and not a f i n a l judgment. 2. That t h e appeal is frivolous and taken f o r the purpose of delay only. 3. That t h e n o t i c e of appeal was not timely. In view of t h i s Court's holding that the order i n t h i s case granting partial summary judgment is not appealable, w e w i l l not consider the second and t h i r d grounds. Rule 56, M.R.Civ.P., grants the d i s t r i c t court power t o e n t e r summary judgment. Subdivisions ( c ) and (d) thereof provide: I' (c ) Motion and Proceedings Thereon. The motion s h a l l be served a t l e a s t 10 days before the time fixed f o r t h e hearing. The adverse party p r i o r t o the day of hearing may serve opposing a f f i d a v i t s . The judgment sought s h a l l be rendered forthwith i f t h e pleadings, depositions, answers t o i n t e r r o g a t o r i e s , and admissions on f i l e , together with t h e a f f i d a v i t s , i f any, show that t h e r e is no genuine i s s u e as t o any material f a c t and t h a t the moving party is e n t i t l e d t o a judgment as a matter of law. A summary judgment, i n t e r l o c u t o r y i n character, may be rendered on the i s s u e of lia- b i l i t y alone although t h e r e is a genuine i s s u e as t o the amount of damages. "(d) Case Not Fully Adjudicated on Motion. If on motion under t h i s r u l e judgment is not rendered upon the whole case o r f o r a l l the r e l i e f asked and a t r i a l is necessary, the court a t the hearing of the motion, by examining t h e pleadings and t h e evidence before it and by i n t e r r o g a t i n g counsel, s h a l l i f practicable a s c e r t a i n what m a t e r i a l f a c t s e x i s t without s u b s t a n t i a l controversy and what m a t e r i a l f a c t s are a c t u a l l y and i n good f a i t h controverted. It s h a l l thereupon make an order specifying t h e f a c t s t h a t appear without s u b s t a n t i a l controversy, including the e x t e n t t o which the amount of damages o r other r e l i e f is not i n con- troversy, and d i r e c t i n g such f u r t h e r proceedings i n t h e a c t i o n as a r e just. Upon the t r i a l of the a c t i o n the f a c t s s o specified s h a l l be deemed established, and t h e t r i a l s h a l l be conducted accordingly. 11 Under the provisions of Rule 56, M.R.Civ.P., t h i s Court has held t h a t a summary judgment may be interlocutory i n charac' and t h a t t h e t r i a l court can reserve f o r f u t u r e decision o r trii such other matters as a r e i n controversy and that the c o u r t may consider such f u r t h e r proceedings as are j u s t . I n Schultz v. Adams, 161 Mont. 463, 466, 507 P.2d 530, t h i s Court noted, c i t i n g from Russell v. Barnes Foundation, 136 F.2d 654, decided on t h e f e d e r a l r u l e i d e n t i c a l t o Montana's Rule 56, M.R.Civ.P.: " I * * * The motion must be granted s i n c e the order appealed from, although it determines t h e l i a b i l i t y of t h e defendant t o the p l a i n t i f f , w i l l not become a f i n a l adjudication of the controversy between them u n t i l the damages t o which the p l a i n t i f f is e n t i t l e d have been assessed. See also: Tye v. Hertz Drivurself Stations, 173 F.2d 3. The s p e c i f i c a u t h o r i t y f o r e n t e r i n g a p a r t i a l summary judgment on t h e i s s u e of l i a b i l i t y alone, leaving the i s s u e of damages f o r trial, is contained i n Rule 5 6 ( c ) ( d ) , M.R.Civ.P., which designates t h i s type of summary judgment as " i n t e r l o c u t o r y ~ i n character". The appeal is therefore premature. I For the above reasons the motion t o dismiss the appeal ~ is granted. The appeal is ordered dismissed. I W e Concur: , , / - 7 \-- Ad 4 s - CHief J u s t i c e

July 22, 1977

cb240300-9140-4d66-b9bf-aea8581908c4

STATE v FITZPATRICK RADI

N/A

13253

Montana

Montana Supreme Court

No. 13253 I N T H E SUPREME COURT O F T H E STATE O F M O N T A N A 1977 T H E STATE OF MONTANA, P l a i n t i f f and Respondent, BERNARD JAMES FITZPATRICK, GARY RADI, TRAVIS HOLLIDAY, PAUL BAD HORSE, J R . , and EDWIN R. B U S H M A N , Defendants and Appellants. Appeal from: D i s t r i c t Court of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , Honorable Nat Allen, Judge p r e s i d i n g . Counsel of Record: For Appellants: John L. Adams, Jr. argued, B i l l i n g s , Montana Robert L. Stephens, Jr. argued, B i l l i n g s , Montana Reno and Dove, B i l l i n g s , Montana James Reno argued, ~ i l l i n g s , Montana Chris J. Nelson argued, B i l l i n g s , Montana Clarence T. Belue, Hardin, Montana Cate, Lynaugh, F i t z g e r a l d & Huss, B i l l i n g s , Montana For Respondent: Hon. Michael Greely argued, Attorney General, Helena, Montana James Seykora argued, County Attorney, Hardin, Montana James S i n c l a i r argued, S p e c i a l Deputy C o . Attorney, B i l l i n g s , Montana .jf)t- F i l e d : - Submitted: January 28, 1977 Decided: $ ! @ i = & g j 9 ; 4 7 M r . J u s t i c e Gene B. Daly delivered t h e Opinion of t h e Court. This i s a n appeal from t h e f i n a l judgment of t h e d i s t r i c t c o u r t , Big Horn County, following a jury t r i a l . Defendants F i t z p a t r i c k and Radi appeal from judgments of conviction f o r d e l i b e r a t e homicide, aggravated kidnapping and robbery. Defen- d a n t s Holliday and Bad Horse appeal from judgments of conviction f o r robbery. O n May 20, 1975, t h e S t a t e of Montana f i l e d an Informa- t i o n charging defendants F i t z p a t r i c k , Radi, Holliday, Bad Horse and Bushman with d e l i b e r a t e homicide, i n v i o l a t i o n of s e c t i o n 94-5-102 (1) ( a ) (b) , R.C .M. 1947; aggravated kidnapping i n v i o l a - t i o n of s e c t i o n s 94-5-303 (1) (b) (c) , 94-5-303 (2) and 94-5-304, R.C.M. 1947; and robbery, i n v i o l a t i o n of s e c t i o n 94-5-401 (1) (b) , R.C.M. 1947. The a f f i d a v i t of probable cause i n d i c a t e s t h e s e charges s t e m from t h e April 5, 1975 robbery of t h e Safeway s t o r e i n Hardin, Montana and t h e murder of Monte Dyckman, a Safeway s t o r e employee. Following defense motions f o r severance of t r i a l , change of venue and d i s q u a l i f i c a t i o n of judges, t r i a l was held i n B i l l i n g s , Montana i n October 1975. Defendant Bushman testi- f i e d i n behalf of t h e s t a t e and was granted immunity from prose- c u t i o n . A t t h e conclusion of t h e s t a t e ' s case-in-chief, a l l defendants r e s t e d without o f f e r i n g evidence. Defendants F i t z p a t r i c k and Radi were found g u i l t y of d e l i b e r a t e homicide, aggravated kidnapping, and robbery. Defendants Holliday and Bad Horse w e r e found g u i l t y only of robbery. O n October 29, 1975, defendants F i t z p a t r i c k and Radi were each sentenced t o 100 years imprisonment f o r t h e crime of d e l i b e r a t e homicide; 100 years imprisonment f o r t h e c r i m e of robbery a s p e r s i s t e n t felony offenders pursuant t o s e c t i o n 95-2206.5, R.C.M. 1947; and death by hanging f o r t h e c r i m e of aggravated kidnapping. Defendants Holliday and Bad Horse w e r e each sentenced t o 4 0 years imprisonment f o r t h e crime of robbery. Defendants Radi and F i t z p a t r i c k ' s sentences of death were stayed by t h e d i s - t r i c t c o u r t pending appeal t o t h i s Court. A t t r i a l t h e state o f f e r e d evidence t o prove t h a t de- fendants m e t i n B i l l i n g s , Montana on A p r i l 5, 1975 and conspired t o rob t h e Safeway grocery s t o r e i n Hardin, a small community 50 miles south of B i l l i n g s . The state o f f e r e d d i r e c t and circum- s t a n t i a l evidence tending t o prove t h a t on t h e evening of A p r i l 5, 1975 defendants F i t z p a t r i c k and Radi drove t o Hardin i n Radi's automobile, while ~ o l l j . d a y , ~ a d Horse and Bushman together drove t o ~ a r d i n i n another automobile. Defendants parked i n f r o n t of t h e Safeway s t o r e and waited u n t i l c l o s i n g t i m e when E v e r e t t S t o l t z , t h e s t o r e manager, and Monte Dyckman, a s t o r e employee locked t h e s t o r e doors and drove away i n d i f f e r e n t automobiles. F i t z p a t r i c k and Radi followed t h e s t o r e manager. The remaining defendants purportedly followed Monte Dyckman but l o s t s i g h t of him when he stopped a t t h e p o s t o f f i c e t o d e p o s i t mail. When t h e s t o r e manager drove t o h i s home, Radi and F i t z p a t r i c k r e a l i z e d t h e s t o r e r e c e i p t s were c a r r i e d by Dyckman and they proceeded t o t h e bank where t h e d e p o s i t w a s t o be dropped. It i s a l l e g e d F i t z p a t r i c k and Radi abducted Monte Dyckman a t t h e bank, p r i o r t o h i s depositing t h e s t o r e ' s r e c e i p t s , robbed him, and then k i l l e d him i n t h e v i c i n i t y of t h e Toluca Interchange, 12 m i l e s w e s t of Hardin, within t h e boundaries of Big Horn County. Defendants r a i s e numerous i s s u e s on appeal. W e hold t h e judgments of conviction must be reversed and t h e causes remanded f o r new t r i a l s . Therefore, w e d i s c u s s only t h e following i s s u e s t o i n s u r e t h a t w e do not comment on m a t t e r s t o come before t h e d i s t r i c t c o u r t i n a new t r i a l : I. Whether t h e Montana s t a t u t o r y provisions f o r jury s e l e c t i o n are c o n s t i t u t i o n a l l y v a l i d and, i f so, whether t h e jury i n t h e i n s t a n t c a s e was s e l e c t e d and drawn i n s u b s t a n t i a l compliance with t h e law? 11. Whether t h e defendants were prejudiced by t h e joinder of t h e i r t r i a l s ? 111. Whether t h e r e was s u f f i c i e n t corroboration of de- fendant Bushman's testimony? I V . Whether t h e convictions of defendants Holliday and Bad Horse should be reversed and t h e charges a g a i n s t them d i s - missed on t h e grounds t h e jury was inadequately i n s t r u c t e d on t h e a p p l i c a b l e law and returned i n c o n s i s t e n t v e r d i c t s ? Issue I. Defendants i n i t i a l l y contend t h e i r convictions should be reversed and t h e causes remanded on t h e grounds t h e Montana s t a t u t o r y provision f o r s e l e c t i n g j u r o r s i s unconstitu- t i o n a l and, even i f t h e s t a t u t e i s found t o be c o n s t i t u t i o n a l , t h a t t h e jury panels i n t h e i n s t a n t c a s e w e r e s e l e c t e d and drawn i n t o t a l disregard of t h e a p p l i c a b l e Montana l a w . Section 95-1908, R.C.M. 1947, sets f o r t h t h e procedure i n challenging t h e s e l e c t i o n of a jury panel: "Motion t o discharge jury panel. (a) Any o b j e c t i o n t o t h e manner i n which a jury panel has been selected o r drawn s h a l l be r a i s e d by a motion t o discharge t h e jury panel. The motion s h a l l be made a t l e a s t f i v e (5) days p r i o r t o t h e t e r m f o r which t h e jury i s drawn. For good cause shown, t h e c o u r t may e n t e r t a i n t h e motion a t any t i m e t h e r e a f t e r . " (b) The motion s h a l l be i n w r i t i n g supported by a f f i d a v i t and s h a l l s t a t e f a c t s which show t h a t t h e jury panel was improperly s e l e c t e d o r drawn. " ( c ) I f t h e motion s t a t e s f a c t s which show t h a t t h e jury panel has been improperly s e l e c t e d o r drawn, it s h a l l be t h e duty of t h e c o u r t t o conduct a hear- ing. The burden of proof s h a l l be on t h e movant. " ( d ) I f t h e c o u r t f i n d s t h a t t h e jury panel was improperly s e l e c t e d o r drawn, t h e c o u r t s h a l l order t h e jury panel discharged and t h e s e l e c t i o n o r drawing of a new panel i n t h e manner provided by law. I' A t t h e o u t s e t w e note defendants have f a i l e d t o comply with s e c t i o n 95-1908. Defendants r a i s e d t h e i s s u e of improper jury s e l e c t i o n and drawing i n a t i m e l y and s p e c i f i c manner, b u t t h e d i s t r i c t c o u r t record f a i l s t o d i s c l o s e t h e submission o f any a f f i d a v i t i n support of t h e a l l e g a t i o n . Defense counsel contend, on o r a l argument b e f o r e t h i s Court, t h a t t h e t i m e l y submission o f a supporting a f f i d a v i t , r e q u i r e d by s e c t i o n 95-1908, was p r o h i b i t i v e s i n c e counsel lacked t h e means of determining t h e manner i n which t h e jury panel was s e l e c t e d and drawn. Absent such knowledge, d e f e n s e counsel conclude t h e f i l i n g of a f f i d a v i t s b e f o r e t h i s Court a t t h e t i m e of appeal i s s u f f i c i e n t . W e d i s a g r e e . The d i s t r i c t c o u r t f i l e c l e a r l y r e v e a l s t h a t a t l e a s t one defense counsel was cognizant of t h e p r o v i s i o n s of s e c t i o n 95- 1908. The motion of defendant Bad Horse t o d i s c h a r g e t h e jury panel s t a t e s : "COMES NOW t h e Defendant, PAUL BAD HORSE, J R . , and moves t h e Court t o Discharge t h e J u r y Panel h e r e i n pursuant t o S e c t i o n 95-1908, R.C.M. 1947. "Said motion w i l l be supported by a f f i d a v i t when t h e jury panel i s s e l e c t e d and made known t o t h i s defendant. "Dated t h i s 29th day of August, 1975." The d i s t r i c t c o u r t f i l e i s d e p l e t e of any a f f i d a v i t supporting t h i s motion t o d i s c h a r g e t h e j u r y panel. Absent such a showing of good cause t o s u b s t a n t i a t e t h e i r motion, defendants cannot c h a l l e n g e t h e j u r y panel f o r t h e f i r s t t i m e on appeal on t h e ground t h a t t h e d i s t r i c t c o u r t f a i l e d t o s e l e c t and draw jury p a n e l s i n accordance w i t h a p p l i c a b l e Montana law. Ledger v. McKenzie, 107 Mont. 335, 85 P.2d 352; S t a t e v. C o r l i s s , 150 Mont. 4 0 , 430 P.2d 632. The means of e s t a b l i s h i n g good c a u s e , s p e c i f i - c a l l y t h e sworn a f f i d a v i t s of t h e c h i e f deputy c l e r k o f t h e d i s - t r i c t c o u r t of Yellowstone County and t h e Yellowstone county r e g i s t r a r of v o t e r s , were a s a c c e s s i b l e a t t h e t i m e of t r i a l a s a t t h e t i m e o f appeal. Y e t , defendants' f a i l u r e t o comply w i t h s e c t i o n 95-1908, w i l l n o t f o r e c l o s e our c o n s i d e r a t i o n of whether t h e j u r y panel was properly selected and drawn where t h e fundamental c o n s t i - t u t i o n a l r i g h t s of t h e defendants a r e a t stake. S t a t e v. P o r t e r , 125 Mont. 503, 242 P.2d 984; S t a t e ex rel. Henningsen v. ~ i s t r i c t Court, 136 Mont. 354, 348 P.2d 143; S t a t e v. Chapman, 139 Mont. 98, 360 P.2d 703. Thus we consider t h e question of whether t h e s e l e c t i o n of j u r o r s and drawing of jury panels i n t h e i n s t a n t case infringed on defendants' fundamental c o n s t i t u t i o n a l r i g h t s ? This Court has long held t h e accused i n a criminal prose- c u t i o n is c o n s t i t u t i o n a l l y guaranteed a t r i a l by an i m p a r t i a l jury s e l e c t e d and drawn i n accordance with t h e law. S t a t e ex rel. Henningson v. D i s t r i c t Court, supra; S t a t e v. Hay, 120 Mont. 573, 194 P.2d 232; Dupont v. McAdow, 6 Mont. 226, 9 P. 925. Any m a t e r i a l d e v i a t i o n o r d e p a r t u r e i n procuring a jury has been held t o c o n s t i t u t e a d e n i a l of fundamental c o n s t i t u t i o n a l r i g h t s . S t a t e v. P o r t e r , supra; S t a t e v. Groom, 49 Mont. 354, 1 4 1 P. 858; S t a t e v. Tighe, 27 Mont. 327, 71 P. 3; reversed on o t h e r grounds 35Mont. 512, 90 P. 981. The Revised Codes of Montana are e x p l i c i t l y c l e a r i n defining t h e procedure t o be followed i n s e l e c t i n g j u r o r s and drawing jury panels. Section 93-1301, R.C.M. 1947, provides t h a t r e g i s t e r e d e l e c t o r s whose names appear on t h e most r e c e n t list of a l l r e g i s t e r e d e l e c t o r s , a s prepared by t h e county r e g i s - trar, a r e competent t o serve a s jurors. Section 93-1401, R.C.M. 1947, provides t h a t a list of persons t o s e r v e a s j u r o r s must be prepared by t h e chairman of t h e county commissioners, o r i n h i s absence, any member of t h e board of county commissioners, t h e county t r e a s u r e r and t h e county a s s e s s o r o r any two cf such o f f i c e r s . Once t h e jury l i s t is composed, s e c t i o n 93-1402, R.C.M. 1947, r e q u i r e s t h a t each name on t h e l i s t be assigned a number and t h e l i s t of t h e names of t h e persons be d e l i v e r e d by those o f f i c e r s t o t h e c l e r k of t h e d i s t r i c t c o u r t pursuant t o section 93-1403, R.C.M. 1947. Section 93-1404, R.C.M. 1947, mandates that the clerk of court place the individual pieces of paper, embossed with the number assigned each juror, in a box and from this box the numbers are to be drawn by the district judge in the presence of the clerk of court pursuant to section 93-1502, R.C.M. 1947. Section 93-1512, R.C.M. 1947, provides that in the event additional jurors are needed, their numbers must also be drawn by the district judge. Defendants contend section 93-1301, regarding the com- petency of jurors, is unconstitutional in that voter registra- tion lists fail to provide a true cross-section of the community in violation of equal protection requirements of the state and federal constitutions. It is argued the voter registration system excludes residents who are qualified for jury service, but are not qualified to vote or do not choose to vote. The issue of whether voter registration lists are a proper instrument for selecting jurors was recently discussed in United States v. Ramos Colon, 415 F.Supp. 459, 464: "From a constitutional standpoint it is well settled that voting lists may be used as a basis for jury selection unless it appears that in the comm;nity there is systematic, intentional and deliberate exclusion from those lists of a partic- ular economic, social, religious, racial, geograph- ical or political group. [Citing cases.] From Colon and Foster v. Sparks, 506 F.2d 805, we glean the prima facie case for establishing a statutory challenge to a jury selection system on the ground of jury composition: 1) Proof that the jury selection system is disadvantageous to a cognizable class, and 2) proof that the disadvantage is occasioned by discrimination in the selection process. Defendants bear the burden of establishing the cognizable class which is discriminated against by the jury selection process. Purposeful discrimination may not be assumed or merely asserted. Swain v . Alabama, 380 U.S. 202, 85 S.Ct. 824, 13 L ed 2d 759; Smith v . Texas, 311 U . S . 128, 61 S.Ct. 164, 85 L ed 84. De- fendants' only allegation of discrimination was that the jury panel was composed of all whites, with the exception of two Indians, and that the convicting jury was exclusively white in composition. Such allegation falls short of establishing a prima facie case challenging the jury selection system on the ground of racial composition. Petition of Boe, 156 Mont. 303, 481 P.2d 45; State v. Johnson, 149 Mont. 173, 424 P.2d 728. It is a well accepted proposition of law that the voter registration list, from which the jurors are selected, and the jury panel need not perfectly mirror the racial composition of the community. Taylor v. Louisiana, 419 U.S. 522, 95 S.Ct. 69242 L ed 2d 690; Foster v. Sparks, supra; State v. Taylor, 168 Mont. 142, 542 P.2d 100, 32 St.Rep. 993. Defendants further contend the jury panels in the instant case were selected and drawn in total disregard of the applicable Montana law. We find merit in defendants' claim that the manner in which jurors were selected and drawn substantially deviated from the procedures mandated in Title 93, Revised Codes of Montana, 1947. Specifically, all duties delegated to the jury commission and district court judge were performed by the clerk of court without any apparent overseeing. While we have no cause to question the good faith of the public officers involved, it is obvious the statutory scheme for selecting and drawing a jury was completely circumvented. The rule in Montana is that juries must be selected and drawn in substantial compliance with the law. Where the disregard for legislative mandates amounts to more than technical irregularity substantial compliance has not been achieved. State ex rel. Henningsen v. District Court, supra; State v. Porter, supra. We stated initially that this m a t t e r was n o t p r o p e r l y r a i s e d on appeal, b u t it i s of suf- f i c i e n t import t o warrant a f u l l d i s c u s s i o n f o r f u t u r e guidance. I s s u e 11. Defendants contend t h a t t h e joinder of t h e i r t r i a l s , a f t e r timely and s p e c i f i c f i l i n g of motions f o r severance, brought about t h e s e e r r o r s : 1. The j u r y was allowed t o c o n s i d e r hearsay evidence which was inadmissible a g a i n s t c e r t a i n defendants, y e t admissible a g a i n s t o t h e r s . 2. The admission of hearsay evidence denied i n d i v i d u a l defendants t h e i r fundamental c o n s t i t u t i o n a l r i g h t t o confronta- t i o n under t h e S i x t h Amendment of t h e United S t a t e s C o n s t i t u t i o n . 3 . The joinder of defendants' t r i a l s denied defendants t h e i r r i g h t t o e f f e c t i v e a s s i s t a n c e of counsel. The only s p e c i f i c example of t h e admission of e x t r a j u d i - c i a 1 hearsay c i t e d t o u s is Bushman's testimony of statements a l l e g e d l y made by defendant Radi. Bushman t e s t i f i e d t h e s e state- ments w e r e made a t R a d i ' s home i n B i l l i n g s on A p r i l 6, 1975, a t approximately 2:30 a . m . , s e v e r a l hours a f t e r t h e commission of t h e a l l e g e d crimes. A l l of defendants, w i t h t h e exception of F i t z p a t r i c k , w e r e p r e s e n t when t h e statements w e r e made. Bushman t e s t i f i e d Radi s t a t e d : "A. ' F i t z d i d n ' t have t o shoot t h e k i d . ' I ! * * * "A. And he s a i d , ' F i t z s h o t him.' H e s a i d , 'Boom, boom, he blew h i s head o f f . ' "A. * * * he s a i d , ' F i t z p a t r i c k is p r e t t y p i s s e d o f f . ' he said, ' H e i s uptown g e t t i n g drunk be- cause him having t o shoot t h e k i d f o r nothing because tlere w a s no money i n t h e bag."' The c o u r t ' s I n s t r u c t i o n No. 1, s t a t e d : "You a r e i n s t r u c t e d t h a t where one defendant testifies about what was said by a second de- fendant, it is ordinarily not admissible as evidence against any other defendant if that other defendant was not present at the time and place where it was said. "However, what is said is admissible against the defendants that are present when it is said. "In your deliberation, you are not to consider what was said against any defendant who was not present at the time and place where it was said. "You may consider what was said as evidence against those defendants present at the time and place it was said. "The reason for this is that a defendant who is not present when something was said about him, cannot, of course, deny that it was said because it is quite obvious he was not there to know the facts. Therefore, you will not use it as evidence against him." Defendants contend the instruction of the district court was insufficient and failed to erase from the minds of the jurors the crucial and devastating prejudice naturally flowing from the testimony. In support of their argument defendants cite Bruton v. United States, 391 U.S. 123, 88 S.Ct. 1620, 20 L ed 2d 476. In Bruton the codefendants Bruton and Evans were tried jointly and convicted of armed postal robbery. During the trial a postal inspector testified Evans confessed that Bruton and Evans com- mitted the robbery. Evans' conviction was later reversed be- cause the oral admission had been elicited by police officers in disregard of Evans' Miranda rights. Bruton's conviction was upheld on the theory the trial court sufficiently instructed the jurors not to consider Evans' confession as evidence against Bruton. The United States Supreme Court disagreed and reversed Bruton's conviction stating: " * * * because of the substantial risk that the jury, despite instructions to the contrary, looked to the incriminating extrajudicial statements in determining petitioner's guilt, admission of Evans' confession in this joint trial violated petitioner's r i g h t of cross-examination secured by t h e Con- f r o n t a t i o n Clause of t h e S i x t h Amendment." 391 U.S. 126. I n a footnote t h e Court s a i d : "We emphasize t h a t t h e hearsay statement incul- pating p e t i t i o n e r was c l e a r l y inadmissible a g a i n s t him under t r a d i t i o n a l r u l e s of evidence * * * t h e problem a r i s i n g only because t h e statement was * * * admissible a g a i n s t t h e d e c l a r a n t Evans. * * * There i s not before u s , t h e r e f o r e , any recognized excep- t i o n t o t h e hearsay r u l e i n s o f a r a s p e t i t i o n e r is concerned and we intimate no view whatever t h a t such exceptions n e c e s s a r i l y raise questions under t h e Confrontation Clause." 391 U . S . 128. The s t a t e argues Bruton is d i s t i n g u i s h a b l e from t h e in- s t a n t case s i n c e t h e hearsay statements t e s t i f i e d t o by Bushman w e r e admissible under t h e coconspirator exception t o t h e hearsay r u l e . Section 93-401-27, R.C.M. 1947, provides i n p a r t : "Facts which may be proved on t r i a l . I n conformity with t h e preceding provisions, evidence may be given upon a t r i a l of t h e following f a c t s : "6. After proof of a conspiracy, t h e a c t o r declara- t i o n of a conspirator a g a i n s t h i s coconspirator, and r e l a t i n g t o t h e conspiracy." The s t a t e f u r t h e r argues even i f Radi's d e c l a r a t i o n s w e r e not admissible under t h e coconspirator exception t o t h e hearsay r u l e , they were admissible under s e c t i o n 93-401-7, R.C.M. 1947, which provides : "Declarations which a r e a p a r t of t h e t r a n s a c t i o n . Where, a l s o , t h e d e c l a r a t i o n , a c t , o r omission forms p a r t of a t r a n s a c t i o n , which i s i t s e l f t h e f a c t i n d i s p u t e , o r evidence of t h a t f a c t , such d e c l a r a t i o n , a c t , o r omission i s evidence, a s p a r t of t h e t r a n s a c t i o n . " The s t a t e contends t h e coconspirator exception t o t h e hearsay r u l e i s a v a i l a b l e i n t h i s c a s e , s i n c e t h e s t a t e prose- cuted t h e c a s e on t h e theory t h e r e was a conspiracy t o commit robbery. It i s argued t h a t , even though t h e crime of conspiracy was not charged a s a s e p a r a t e offense i n t h e Information, t h e s t a t e could properly p r e s e n t evidence t o show t h e r e w a s a con- spiracy. Defendants urge t h e s t a t e i s barred from u t i l i z i n g t h e coconspirator exception t o t h e hearsay r u l e s i n c e t h e s t a t e d i d not charge defendants with t h e c r i m e of conspiracy; t h a t t h e s t a t e ' s evidence was i n s u f f i c i e n t t o prove a conspiracy; and, t h a t t h e hearsay statements t e s t i f i e d t o by Bushman were made a f t e r t h e conspiracy ended, i f t h e r e was one, and w e r e not made i n furtherance of a conspiracy. W e d i s a g r e e with defen- d a n t s ' i n t e r p r e t a t i o n of t h e coconspirator exception t o t h e hearsay r u l e . The s t a t e may present evidence e s t a b l i s h i n g a conspir- acy even though t h e crime of conspiracy was not charged as a separate offense i n t h e Information. S t a t e v. Dennison, 94 Mont. 159, 2 1 P.2d 63. Whether o r not a conspiracy was proved f o r t h e purpose of permitting a p p l i c a t i o n of t h e coconspirator exception was a t o t h e hearsay r u l e j q u e s t i o n t o be decided by t h e d i s t r i c t c o u r t . The existence of a conspiracy can be shown by c i r c u m s t a n t i a l evi- dence. To e s t a b l i s h a conspiracy it i s not necessary t o prove by d i r e c t evidence an agreement t o commit a crime. S t a t e v. Alton, 139 Mont. 479, 365 P.2d 527; S t a t e v. C o l l i n s , 88 Mont. 514, 294 P. 957; S t a t e v. Hopkins, 68 Mont. 504, 219 P. 1106. A n examination of t h e record d i s c l o s e s t h a t t h e d i s t r i c t c o u r t made a finding, without a d i s c l o s u r e of i t s grounds, con- cerning t h e a d m i s s i b i l i t y of e x t r a j u d i c i a l statements made by a defendant a g a i n s t a nonpresent codefendant, by another co- defendant. The c o u r t admitted t h e testimony, then admonished t h e jury by its I n s t r u c t i o n No. 1 ( h e r e t o f o r e c i t e d i n f u l l ) t h a t t h e statement could not be used a g a i n s t a codefendant not present when t h e statement was made. This procedure was approved by t h e United S t a t e s Supreme Court i n P a o l i v. United S t a t e s , 352 U.S. 232, 77 S . C t . 294, 1 L ed 2d 278. I n P a o l i a confession of one defendant was admitted inculpating t h e o t h e r defendants. A five-four Court approved t h e giving of a cautionary i n s t r u c t i o n , i f s u f f i c i e n t l y c l e a r , and reasoned t h a t it could be assumed t h e jury would follow t h e c o u r t ' s i n s t r u c t i o n . Y e t , t h i s s t a r t e d a series of cases based on t h e Sixth Amendment command t h a t a l l defendants i n a criminal prosecution s h a l l enjoy t h e r i g h t t o confront t h e witnesses a g a i n s t them. I n 1968, Bruton presented a f a c t s i t u a t i o n where Bruton was j o i n t l y t r i e d with a codefendant named Evans and convicted of robbery. A p o s t a l inspector t e s t i f i e d a t t r i a l t h a t Evans had o r a l l y confessed t o him and a l s o implicated Bruton. The United S t a t e s Supreme Court held t h i s added s u b s t a n t i a l weight t o t h e c a s e i n a form not subject t o cross-examination, s i n c e Evans d i d not take t h e stand. The Court of Appeals, Eighth C i r c u i t , 375 F.2d 355, set a s i d e t h e Evans conviction f o r a "Miranda" v i o l a t i o n but affirmed t h e conviction of t h e nonconfessor Bruton. The c o u r t r e l i e d on P a o l i because t h e jury w a s i n s t r u c t e d not t o con- s i d e r Evans1 confession i n determining Bruton1s innocence o r g u i l t . The Supreme Court i n Bruton s p e c i f i c a l l y overruled P a o l i and challenged t h e naive assumption t h e p r e j u d i c i a l e f f e c t of such testimony could be overcome by jury i n s t r u c t i o n s . The Court held t h a t since s u b s t a n t i a l weight was added t o t h e government's case by t h e testimony i n a form not subject t o cross-examination, Bruton's S i x t h Amendment r i g h t t o confront witnesses a g a i n s t him was v i o l a t e d , and t h e v i o l a t i o n was not cured by t h e c o u r t ' s in- s t r u c t i o n t o disregard t h e testimony of t h e p o s t a l inspector concerning Evans1 confession inculpating Bruton. For a case by case examination of t h e application of t h e "Bruton r u l e " see Harrington v. California ( 1 9 6 9 ) , 395 U . S . 250, 89 S.Ct. 1 7 2 6 , 2 3 L ed 2d 284. I n Harrington t h e r e a r e demonstrations of con- s t i t u t i o n a l v i o l a t i o n s of t h e "Bruton r u l e " , i n Bruton type s i t u a t i o n s where it i s not r e v e r s i b l e e r r o r . W e do not f i n d these exceptions present i n t h e f a c t s i t u a t i o n i n t h e i n s t a n t case. - 13 - The United States Supreme Court has long recognized the right of the defendant to confront his witnesses at the time of trial. In Mattox v. United States, 156 U.S. 237, 242, 243, 15 S.Ct. 337, 39 L ed 409, 411, the Court said: "The primary object of the constitutional provision in question was to prevent depositions or ex parte affidavits, such as were sometimes admitted in civil cases, being used against the prisoner in lieu of a personal examination and cross-examination of the witness in which the accused has an opportunity, not only of testing the recollection and sifting the conscience of the witness, but of compelling him to stand face to face with the jury in order that they may look at him, and judge by his demeanor upon the stand and the manner in which he gives his testi- mony whether he is worthy of belief. * * *" The United States Court of Appeals in United States v. Adams, 446 F.2d 681, 683, cert. den. 404 U.S. 943, found the relevant factual inquiry in determining whether the Confronta- tion Clause is violated to be: " * * * whether under the circumstances, the un- availability of the declarant for cross-examina- tion deprived the jury of a satisfactory basis for evaluating the truth of the extrajudicial declaration." The criteria to be considered in making this factual inquiry are: (1) the declarant's knowledge of the identities and roles of the other coconspirators; (2) the possibility that declarant was relying on faulty recollection; (3) the circumstances under which the statements were made, indicating declarant might be lying about the codefendant's involvement in the crime; (4) the possibility defendants could have shown by cross-examination the declarant's statements were unreliable; and (5) whether the testimony is so "crucial" to the prosecution or "devastating" to the defense as to require reversal of the conviction. United States v. Snow, 521 F.2d 730; United States v. Baxter, 492 F.2d 150, cert. den. 416 U.S. 940. Whether a defendant was denied the right to confront and cross-examine witnesses must be resolved case-by-case, based on an examination of all the circumstances and evidence. A r i a s v. United S t a t e s , 388 F.Supp. 736. There is l i t t l e doubt t h a t d e c l a r a n t Radi c l e a r l y knew F i t z p a t r i c k ' s r o l e i n t h e a l l e g e d crime and t h e i d e n t i t i e s and r o l e s of t h e o t h e r c o n s p i r a t o r s . The e v e n t s w e r e f r e s h i n h i s mind. Y e t , without d i s c u s s i n g t h e t r u t h and v e r a c i t y of t h e d e c l a r a n t , w e recognize t h a t Radi had good reason t o l i e about who s h o t t h e victim. Without F i t z p a t r i c k p r e s e n t , Radi might e a s i l y persuade h i s c o c o n s p i r a t o r s t h a t a l l f a t a l s h o t s w e r e f i r e d by F i t z p a t r i c k and t h u s avoid some conceived c r i m i n a l c u l p a b i l i t y . I n any event, w e recognize t h e d e v a s t a t i n g e f f e c t t h i s testimony would have upon a j u r y and hold, a t least as t o F i t z p a t r i c k , t h e r e was a d e n i a l of t h e r i g h t t o c o n f r o n t t h e d e c l a r a n t on cross-examination before t h e trier of f a c t . The d i s t r i c t c o u r t ' s i n s t r u c t i o n admonishing t h e jury was i n s u f f i - c i e n t a s f a r a s o f f s e t t i n g any p r e j u d i c e which r e s u l t e d from t h e admission of t h e e x t r a j u d i c i a l statements. Bruton v. United S t a t e s , supra; Roberts v. R u s s e l l , 392 U.S. 293, 88 S.Ct. 1921, W e acknowledge t h e i n h e r e n t d i s c r e t i o n of t h e d i s t r i c t c o u r t i n determining whether defendants j o i n t l y charged with p u b l i c o f f e n s e s a r e t o be provided s e p a r a t e t r i a l s o r t r i e d j o i n t l y . However, w e recognize a need f o r j u d i c i a l g u i d e l i n e s i n t h e i n s t a n c e where t h e prosecution i n t e n d s t o i n t r o d u c e i n t o evidence t h e e x t r a j u d i c i a l statement of one defendant t h a t im- p l i c a t e s a codefendant. This i s s u e was discussed i n People v . Aranda, 63 C.2d 518, 47 Cal.Rptr. 353, 407 P.2d 265, 272: "When t h e prosecution proposes t o i n t r o d u c e i n t o evidence an e x t r a j u d i c i a l statement of one defendant t h a t i m p l i c a t e s a codefendant, t h e t r i a l c o u r t must adopt one of t h e following procedures: (1) It can permit a j o i n t t r i a l i f a l l p a r t s of t h e e x t r a j u d i c i a l statements i m - p l i c a t i n g any codefendants can be and a r e e f f e c t i v e l y d e l e t e d without p r e j u d i c e t o t h e d e c l a r a n t . By e f f e c t i v e d e l e t i o n s , w e mean not only d i r e c t and i n d i r e c t i d e n t i f i c a t i o n s of codefendants but any statements t h a t could be employed a g a i n s t nondeclarant codefendants once t h e i r i d e n t i t y i s otherwise e s t a b l i s h e d . ( 2 ) It can g r a n t a severance of trials i f t h e prosecution i n s i s t s t h a t it must use t h e extra- j u d i c i a l statements and it appears t h a t e f f e c - t i v e d e l e t i o n s cannot be made. (3) I f t h e prosecution has s u c c e s s f u l l y r e s i s t e d a motion f o r severance and t h e r e a f t e r o f f e r s an extra- j u d i c i a l statement implicating a codefendant, t h e t r i a l c o u r t must exclude it i f e f f e c t i v e d e l e t i o n s a r e not possible. Similar r u l e s concerning j o i n t t r i a l have been adopted i n o t h e r j u r i s d i c t i o n s and have been found work- able. [Citing c a s e s . ] " 407 P.2d 272. W e a r e i n agreement with t h e e f f e c t of t h e s e j u d i c i a l g u i d e l i n e s . Our f i n a l inquiry i n t h i s a r e a of joinder concerns de- fendants' contention t h e joinder of t h e i r t r i a l s denied them t h e e f f e c t i v e a s s i s t a n c e of counsel. Defendants claim: (1) The number of defendants and independent counsel m81.de it impossible t o employ e f f e c t i v e t r i a l t a c t i c s ; (2) one defendant o r another d i s q u a l i f i e d a d i s t r i c t judge o r challenged a juror t h a t another defendant would have allowed t o remain i n t h e case; (3) c e r t a i n counsel delved i n t o a r e a s on cross-examination t h a t merely re- peated t h e s t a t e ' s case a g a i n s t p a r t i c u l a r defendants; and ( 4 ) a l l defendants, with t h e exception of Radi, e l e c t e d t o rest t h e i r cases following t h e state's case-in-chief, t h u s compelling Radi t o rest. W e note t h a t most of t h e s e o b j e c t i o n s a r e of a general n a t u r e and could be r a i s e d i n almost any m u l t i p l e de- fendant-counsel proceeding. It would be most unusual, i n our opinion, i f four defense counsel representing i n d i v i d u a l c l i e n t s d i d agree on every question of t r i a l t a c t i c s . Further, a de- fendant has no r i g h t t o have h i s c a s e t r i e d by a s p e c i f i c judge o r have a p a r t i c u l a r person s i t on h i s jury. S t a t e v. Moran, 1 4 2 Mont. 423, 384 P.2d 777. I n concluding discussion of t h e i s s u e of joinder, we r e i t e r a t e our position. Defendants incurred s u b s t a n t i a l preju- d i c e through t h e joinder of t h e i r t r i a l s because of a f a i l u r e to protect individual defendant's right to confrontation. We fully realize the benefits of joint trials, specifically, the conservation of state funds, diminished inconvenience to witnesses and public authorities, and the avoidance of delay in bringing those accused of crime to trial. Yet, where we obtain speed, economy and convenience in the administration of the law at the cost of fundamental constitutional rights, that price is too high. Trial courts must examine joinder of defendants' trials more closely, particularly where separate counsel is required because of potential conflicts of interest between the defendants. Issue 111. This issue attacks the sufficiency of evi- dence which the state presented to corroborate Bushman's testi- mony. Section 95-3012, R.C.M. 1947, provides: "Testimony of person legally accountable. A con- viction cannot be had on the testimony of one responsible or legally accountable £ 0 ; the same offense, as defined in section 94-2-106, unless he is corroborated by other evidence, which in it- self, and without the aid of the testimony of the one responsible or legally accountable for the same offense, tends to connect the defendant with the commission of the offense; and the corroboration is not sufficient, it merely shows the commission of the offense, or the circumstances thereof." In State v. Orsborn, Mont . , 555 P.2d 509, 514, 33 St.Rep. 935, 940, this Court said: "State v. Cobb, 76 Mont. 89, 92, 245 P.2d 265, has been cited many times as to the general guidelines for determining the sufficiency of evidence corrob- orating the testimony of one legally accountable. Though Cobb was decided under section 11988, R.C.M. 1921, since repealed, the language of the old statute is nearly identical to that of section 95- 3012, R.C.M. 1947, in pertinent part. * * *" State v . Cobb, 76 Mont. 89, 92, 245 P. 265, set out these general rules: "(a) The corroborating evidence may be supplied by the defendant or his witnesses. "(b) It need not be direct evidence--it may be circumstantial. "(c) It need not extend to every fact to which t h e accomplice t e s t i f i e s . " ( d ) It need pot be s u f f i c i e n t t o j u s t i f y a con- v i c t i o n o r t o e s t a b l i s h a prima f a c i e case of g u i l t . " ( e ) It need not be s u f f i c i e n t t o connect t h e defendant with t h e commission of t h e crime; it i s s u f f i c i e n t i f it tends t o do so. " ( f ) Whether t h e corroborating evidence tends t o connect t h e defendant with t h e commission of t h e offense is a question of l a w , b u t t h e weight of t h e evidence--its e f f i c a c y t o f o r t i f y t h e testi- mony of t h e accomplice and render h i s s t o r y t r u s t - worthy--is a matter f o r t h e consideration of t h e jury. '' A t t r i a l t h e s t a t e presented two minor g i r l s who t e s t i - f i e d they were with a l l f i v e defendants on t h e day of t h e robbery and murder. The g i r l s t e s t i f i e d a l l f i v e defendants planned t o go t o Hardin and t h e g i r l s themselves accompanied Bushman, Bad Horse and Holliday on t h e t r i p t o Hardin and t h e r e t u r n t r i p t o B i l l i n g s , a t about midnight on April 5, 1975; t h a t F i t z p a t r i c k and Radi were i n R a d i l s automobile a t a s e r v i c e s t a t i o n i n B i l l i n g s j u s t before Bushman, Holliday, Bad Horse and t h e two g i r l s l e f t f o r Hardin; t h a t R a d i l s automobile passed them on t h e highway t o Hardin; and t h a t two men, who t h e g i r l s presumed t o be Radi and F i t z p a t r i c k , g o t o u t of R a d i l s automobile i n Hardin. Both g i r l s t e s t i f i e d they observed a hole i n t h e windshield of Radi's automobile on t h e morning following t h e crimes. Carol Broach t e s t i f i e d Bushman, Bad Horse and Holliday were i n Hardin from approximately 10:45 p.m. t o midnight on April 5, 1975; t h a t she returned t o B i l l i n g s with t h e s e t h r e e defendants and t h e two minor g i r l s ; and, t h a t t h i s group a r r i v e d a t Radi's house a t approximately 2:00 a.m. on ~ p r i l 6 , 1975. Raleigh Kraft, Jr. t e s t i f i e d he had discussed with Bushman and Bad Horse t h e p o s s i b i l i t y of robbing t h e Safeway s t o r e . - 18 - Ronald Potts and Lyle Doane testified they were custo- mers at the Safeway store on the evening of April 5, 1975, and observed an automobile, blue or green in color,parked in front of the Safeway store, with two male occupants approxi- mately the same ages as Radi and Fitzpatrick. Radi's automo- bile was metallic blue in color. Agent Dieckman of the Federal Bureau of Investigation testified Fitzpatrick was arrested in Spokane, Washington on June 3, 1975, and Fitzpatrick told him he had been drinking with Radi in Billings on the evening of April 5 . The witness established that Fitzpatrick used a fictitious name while in Spokane and possessed a newspaper clipping stating Fitzpatrick was wanted by the police for the crimes committed in Hardin on April 5, 1975. Robert Balko, employed by Nyquist Financial Services in Billings, testified Radi indicated in a conversation with him that someone had shot a hole through his windshield. The testimony of Mary Jenkins and Helen Jones established that Radi had changed his Montana automobile license plates for Nevada license plates shortly after the crimes. Roger Asbury of the Federal Bureau of Investigation testified the bullet found in Radi's automobile was fired from the same gun as the slug found in the victim's automobile and the slug which killed the victim. This evidence sufficiently corroborates Bushman's test- imony. Issue IV. The final issue we will consider is whether the convictions of defendants Holliday and Bad Horse should be reversed on the ground the jury was inadequately instructed on the applicable law and returned inconsistent verdicts. Holliday and Bad Horse contend that since the state prosecuted its case on the theory of conspiracy it is logically inconsistent to find them guilty of robbery, but not guilty of deliberate homicide and aggravated kidnapping. In support of this contention de- fendants direct our attention to the court's Instruction No. 28, an instruction on the felony-murder doctrine, which provided: "You are instructed that when two or more persons agree to commit a crime under such cir- cumstances as may * * * result in the taking of human life, either in the furtherance of, or the resistance to their unlawful agreement, then each party * * * will be held responsible for the consequences which might reasonably be ex- pected to flow * * * from carrying into effect their unlawful agreement * * *. "The law is that, if two or more persons agree to commit a felony and death happens in the fur- therance of the common object, all are alike guilty of the homicide. The act of one of them done in the furtherance of the original design, in the contemplation of the law, is the act of all. And if such an agreement is to do or per- form an unlawful act constituting a felony, and in the prosecution of such unlawful act constitut- ing a felony, an individual is killed, such killing is deliberate homicide." A general principle of law is that consistency in crim- inal verdicts is unnecessary. Dunn v. United States, 284 U.S. 390, 52 S.Ct. 189, 76 L ed 356. Where two or more defendants are tried together in a criminal case the verdicts need not demonstrate rational consistency. United States v. Anderson, 509 F.2d 312, cert. den. 420 U.S. 991. The United States Supreme Court explained the rationale for the Dunn holding when it said: "That the verdict may have been the result of compromise, or of a mistake on the part of the jury, is possible. But verdicts cannot be upset by speculation or inquiry into such matters." 284 U.S. 394. Defendants Holliday and Bad Horse distinguish Dunn from the instant case. They contend the jury in Dunn correctly followed the instructions of law given to it in reaching that verdict, but the jury here when finding Holliday and Bad Horse not guilty on two counts and guilty on the other count, completely disregarded Instruction No. 28 and relied on Instruction No. 36 which provided the jury might "find any one of the follow- ing verdicts" as to each defendant: "1. Guilty of Count One, deliberate homicide; "2. Not guilty of Count One, deliberate homicide; "3. Guilty of Count Two, aggravated kidnapping; "4. Not guilty of Count Two, aggravated kidnapping; "5. Guilty of Count Three, robbery; "6. Not guilty of Count Three, robbery." The jury verdicts returned in this case can be distinguished from the inconsistent verdicts which were the subject of the general rule announced in Dunn. These verdicts are not merely inconsistent, they are legally unsupportable. his case was prosecuted on a conspiracy to commit robbery theory and each de- fendant prosecuted under the felony murder rule or doctrine which contemplates, as set forth in the trial court's Instruction No. 28, that each defendant is guilty of deliberate homicide or must be acquitted. This jury was improperly and inadequately instructed on that point of law and could not reach a proper verdict. State v. Bean, 135 Mont. 135, 337 P.2d 930; State v. Jackson, 88 Mont. 420, 293 P. 309. The inconsistency between the court's Instruction No. 28 and Instruction No. 36 is apparent and the resulting confusion in the minds of the jury is evidenced by its request for clar- ification of Instruction No. 28: "Question on Instruction #28 "If we find one defendant guilty of robbery does Inst. No. 28 require guilty verdict on two remaining counts." The district court responded: "Instruction number 36 answers this question." No further clarification was provided, the jury completed d e l i b e r a t i o n and reached i t s v e r d i c t . This Court has held t h a t t h e need f o r giving addi- t i o n a l i n s t r u c t i o n s t o t h e jury i s a m a t t e r of d i s t r i c t c o u r t d i s c r e t i o n . S t a t e v. Hawkins, 165 Mont. 4 5 6 , 529 P.2d 1377. However, here t h e jury was d i r e c t e d t o examine I n s t r u c - t i o n N o . 36, which i s an improper i n s t r u c t i o n c o n t r a r y t o t h e l a w of t h e case. The c o u r t should have f u r t h e r i n s t r u c t e d t h e jury i n a manner t h a t would s u f f i c i e n t l y and c l e a r l y p r e s e n t t h e a p p l i c a b l e law. Such f a i l u r e i s r e v e r s i b l e e r r o r . The judgments of conviction of a l l defendants a r e reversed. The causes a r e remanded t o t h e d i s t r i c t c o u r t f o r new t r i a l s . J u s t i c e ( Chief J u s t i c e A J u s t i c e s 0 M r . J u s t i c e John Conway Harrison concurring i n p a r t and dissenting i n p a r t : I concur with the majority's opinion a s t o a l l defendants except Radi whose conviction I would affirm. By h i s own s t a t e - ments he was one of two men who kidnapped a young man (who unlike any of the defendants worked f o r a l i v i n g ) , took him outside h i s hometown robbed and ruthlessly murdered him. I n ~ a d i ' s case it makes l i t t l e o r no difference who f i r e d the shots, f o r h i s very a c t s i n participating i n the kidnapping and robbery make him a principal t o the murder. A s t o Fitzpatri'ck, who was not present a t the time of Radi's statement on who f i r e d the shots, t h i s Court i s compelled t o follow the decision of the United States Supreme Court i n Bruton v. United States, supra, and i t s progeny. To do otherwise would be t o delay the ultimate decision on r e t r i a l . Bruton i s based upon the r i g h t of defendant Fitzpatrick, guaranteed by the Sixth and Fourteenth Amendments, t o cross-examine witnesses. Bruton thus held t h a t , i n a j o i n t t r i a l where one defendant did not take the stand the introduction of h i s e x t r a j u d i c i a l confession which incriminated the second defendant, violated the second defendant's Sdxth and Fourteenth Amendment r i g h t s even though the jury was instructed the confession was not t o be considered against him. Subsequent cases i l l u s t r a t e Bruton does not invalidate use of codefendant statements in a l l j o i n t t r i a l situations. When, f o r example, the declarant codefender takes the stand and subjects himself t o cross-examination, there i s no infringement of any constitutional r i g h t t o cross-examine. Nelson v. O'Meil, 402 U.S. 622, 91 S.Ct. 1723, 29 L ed 2d 222. The Bruton rule cannot be invoked by a defendant who i n s i s t s upoi~ a join^ trial, knowing the prosecution intends t o use codefendants' inculpatory scatements. United States v. Sullivan, 435 F.2d 650, c e r t . denied +d2 U.S. 912, 91 S.Ct. 1392, 28 L ed 2d 654. See a l s o Anno. 29 I f the inculpatory codefendant's confession i s admissible u n d e ~ an exception t o the hearsay r u l e , a s f o r example an admis- sion of a coconspirator, the Bruton r u l e w i l l not be invoked. : ~ n i t e d States v. Kelley, 526 F.2d 615,620. Also where extra- j u d i c i a l statements of both defendants interlock, and do not c o n f l i c t on v i t a l points, courts have held t h a t no reversal i s required. United States ex r e l . Stanbridge v. Zelker, 514 F.2d 45. For the above reasons I would confirm a s t o defendant Radi.

July 29, 1977

05fb430a-22b3-4665-a333-4bb829af0224

WILSHIRE INSURANCE CO v CARRINGTO

N/A

13735

Montana

Montana Supreme Court

No. 13735 IN THE SUPREME COURT OF THE STATE OF MONTANA WILSHIRE INSURANCE COIqTANY a California Corporation, and GENE STREITZ, Petitioners and Respondents, and Cross-Appellant, JANICE S. CARRINGTON, Justice of the Peace, Missoula County, Montana, Respondent and Appellant. Appeal from: District Court of the Fourth Judicial District, Honorable Edward Dussault, Judge presidinq. Counsel of Record: For Appellant: Robert L. Deschamps 111, argued, County Attorney, Missoula, Montana For Respondents: Skelton and Knight, Missoula, Montana Robert Skleton argued, Missoula, Montana Submitted: October 3, 1977 Decided : OCT 2 4 1 9 i Q M r . Justice John Conway Harrison delivered the Opinion of the Court: Petitioners, Wilshire Insurance Company (Wilshire) and Gene S t r e i t z , respondents herein, brought an action f o r a w r i t of mandamus seeking to require appellant Missoula County Justice of the Peace Janice S. Carrington, to accept respondents' b a i l bonds. Following a hearing the d i s t r i c t , Missoula County, granted the requested w r i t and i n addition awarded $175 in damages and attorney fees of $500 t o respon- dents. Appellant thereafter moved for an amendment of judgment seeking t o have the award of damages and attorney fees deleted. The court amended the judgment by deleting the award of attorney fees only. Appellant appeals from the amended judgment. ~espondents' crossappeal from that portion of the court's order denying attorney fees has been abandoned on t h i s appeal. Wilshire is a California Corporation authorized by the Montana State Commissioner of Insurance t o do business i n Montana as a commercial surety. S t r e i t z is a licensed agent of Wilshire. They have provided b a i l bonds for criminal defendants i n the court of Justice Carrington for some time. On a t l e a s t one occasion prior t o the present case, respondents were directed i n writing t o pay over a bond immediately upon the bonded defendant's failure t o appear, and were advised it was Justice Carrington's policy that t h i s be done i n future cases. On December 8, 1976, respondents supplied b a i l bonds i n the amount of $2000 on each of two criminal defendants. Before bonding out of j a i l , defendants were notified by the sheriff t o appear on the morning of December 9, 1976. Defendants failed t o appear. Justice Carrington immediately entered an order forfeiting the bonds and orally notified respondents the bonds were immediately due and payable. Respondents advised the money would be paid by 4:00 p.m. on December 10. However, no payment was made. Thereafter, Justice Carrington and William Monger, Missoula County Justice of the Peace, Division 2, entered orders directing the sheriff t o accept no further bonds from respondents. S t r e i t z received no written notice of the forfeiture u n t i l December 13. Later that day, he unsuccessfully attempted t o obtain Justice Carrington' s approval for two additional bonds, thereby failing t o collect a t l e a s t $175 i n bonding fees. This action f i l e d on December 14 ensued. Respondents have not yet paid the $4000 in forfeited bonds. The issues presented on t h i s appeal are: 1. May a Montana justice of the peace court order that forfeited surety bonds be paid immediately? 2. May such court refuse t o accept further bonds from a surety u n t i l its previously forfeited bonds are paid? Issue 1. Immediate payment upon forfeiture. The exclusive procedure t o be followed upon a failure of an accused t o appear i n court or otherwise comply with the conditions of the b a i l bond is prescribed by sections 95-1116 and 95-1117, R.C.M. 1947: "95-1116. Conditions of b a i l - when performed - when not performed. "(b) I f the accused does not comply with the conditions of the b a i l bond, the court having jurisdiction shall enter an order declaring the b a i l t o be forfeited. "If such forfeiture is declared by a d i s t r i c t court, notice of such order of forfeiture s h a l l be mailed forthwith by the clerk of the court t o the accused and h i s sureties a t t h e i r l a s t known address. "(c) I f a t any time within t h i r t y (30) days a f t e r the forfeiture the defendant or h i s b a i l appear and satisfactorily excuse h i s negligence or failure t o comply with the conditions of the b a i l , the court, i n its discretion, may direct the forfeiture of the b a i l t o be discharged upon such terms a s may be just. "If such forfeiture i s declared by a d i s t r i c t court and i f the forfeiture i s not discharged as provided i n t h i s section, the court s h a l l enter judg- ment for the s t a t e against the accused and h i s sureties for the amount of the b a i l and the costs of the pro- ceedings. 11 "95-1117. Disposition of judgment and execution. "(c) When judgment is entered i n favor of the state and against the sureties or the surety company or when the forfeiture has not been discharged, execu- tion may be issued against che sureties or the surety company in the same manner a s executions in c i v i l actions. I t Appellant takes the position the statutory scheme i s of dual application. That is, the statutes distinguish between d i s t r i c t courts and other courts, such as justice courts, holding the former t o a s t r i c t e r standard of written notification of forfeiture and a t h i r t y day "waiting period" during which the forfeiture may be discharged, prior t o automatic entry of judgment and an ensuing execution. Justice courts, she argues, are subject t o no such restrictions, and need only enter an order of forfeiture upon noncompliance a s a precondition t o immediate payment of the face amount of the bond. W e find such a position untenable. . I ' W e hold statutory procedures detailed i n sections %-I116 and 95-1117 are equally applicable t o bond forfeiture proceedings i n 3ustice courts. A n order requiring imrnedia k payment on the forfeited bond is tantamount t o an immediate and automatic judgment not provided for by statute. Such a procedure would afford justice courts broad powers and an unlimited range of discretion not enjoyed by d i s t r i c t courts. W e note i n t h i s regard that d i s t r i c t courts, a s contrasted with justice courts, are courts of record staffed by judges professionally trained i n the practice and principles of law and legal procedure. Such judges are, by virtue of sections 95-1116 and 95-1117, held t o a standard of accountability. Such a standard is no less 'applicable t o justice courts. Referring t o various principles and statutes pertaining t o contract law, appellant maintains a surety bond i s i n the nature of a contract. Contractual terms, i f capable of being performed instantly, must be so performed. While a bond is i n the nature of a contract, a procedure for forfeiture and en- forcement mandated by s t a t u t e i s exclusive and must be followed. See: 8 Am Jr 2d Bail and Recognizance, 5 5 139, et.seq. Appellant's argument in t h i s regard is without merit. Finally, appellant offers policy reasons i n support of her position. She argues the traditional procedure whereby de- fendants charged with minor offenses typically f o r f e i t bonds i n justice court, in l i e u of an appearance, would be frustrated and substantial delay i n the administration of justice would result from imposition of the requirements of sections 95-1116 and 95-1117. This argument is not compelling. The Revised Commission Comment t o section 95-1103, R.C.M. 1947, indicates the procedure for determination, acceptance and forfeiture of b a i l for certain minor offenses is t o be distinguished from the forfeiture procedures outlined in sections 95-1116 and 95-1117. The usually speedy forfeiture procedure advocated by appellant is in no manner impaired by our holding in t h i s case. Issue 2. Refusal to accept further bonds. Relying primarily upon broad textual authority, appellant asserts a justice court has the discretion t o refuse a surety's tendered bonds, although that surety is authorized t o do business by the s t a t e commissioner of insurance and has i n a l l other respects complied with statutes regulating the b a i l bond bus ine s s . Article 11, Section 21, 1972 Montana Constitution specifically provides : " A l l persons shall be bailable by sufficient sureties except for capital offenses, when the proof is evident or the presumption great. 1' (Emphasis added. ) I n addition, section 40-4501, R.C.M. 1947, provides, in part: "A surety insurer authorized as such under t h i s code s h a l l have the power t o b-ecome the surety on bonds and undertakings required by law * * *.I1 (Emphasis added.) W e hold that the above provisions, taken separately or together, mandate approval by courts of a l l bonds offered by those commercial sureties properly authorized t o do business i n t h i s state. Here, it is not disputed that respondents were i n com- pliance with the pertinent provisions of law and were authorized t o do business a s commercial sureties i n the s t a t e of Montana. W e conclude appellant's refusal t o accept respondents' bonds was error. Suchbonds should be approved in a l l similar cases. The amended judgment granting respondents ' requested writ of mandate i s affirmed. 1 \ ' . ~ h 1 7 f Justice

October 24, 1977

d52edf31-4e5b-433e-ab22-8791d5e0864f

MARRIAGE OF ISLER

N/A

13565

Montana

Montana Supreme Court

No. 13565 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 IN RE THE MARRIAGE OF ROBERT ISLER, Petitioner and Respondent, and CHRISTINE M. ISLER, Defendant and Appellant. Appeal from: District Court of the Sixteenth Judicial District, Honorable Alfred B . Coate, Judge presiding. Counsel of Record: For Appellant: William J. Miele argued, Miles City, Montana For Respondent : Kenneth R . Wilson argued, Miles City, Montana Submitted: April 18, 1977 Decided: JUN 2 1 1 9 7 z Filed: JUN 22 ]gin M r . J u s t i c e Daniel J. Shea delivered the Opinion of the Court. This i s an appeal by ,the mother from a judgment of the d i s t r i c t court, Rosebud County, awarding custody of the p a r t i e s ' two minor children t o t h e i r father. Christine and Robert I s l e r were married i n September 1970, and divorced i n April 1976. Although the d i s t r i c t court found both parents f i t and proper persons, it awarded custody of David, then four years old, and Douglas, then one year old, t o the father. The mother contends the award of custody t o the f a t h e r was an abuse of discretion on the p a r t of the d i s t r i c t court because : 1) Evidence a t t r i a l on the factors l i s t e d i n section 48-332, R.C.M. 1947, of the Uniform Marriage and Divorce Act, favored the mother. 2) The award was erroneously based on the r e l a t i v e earning capacity of the p a r t i e s . 3) The d i s t r i c t court erred i n finding t h a t the presumption i n favor of awarding children of tender years t o t h e i r mother was overcome by the evidence. I n determining t h e issue of custody t h e paramount considera- t i o n i s the welfare of the children and must of necessity be l e f t largely i n the discretion of the d i s t r i c t court. The deci- sion of the d i s t r i c t court w i l l not be overruled on appeal absent a showing of a c l e a r abuse of discretion. Tweeten v. Tweeten, Mont . 9 P.2d , 34 St.Rep. 337,339. Section 48-332, R.C.M. 1947, s t a t e s : "Best i n t e r e s t of child. The court s h a l l determine custody i n accordance with the best i n t e r e s t of the child. The court s h a l l consider a l l relevant factors including : "(1) the wishes of the child's parent or parents as t o h i s custody; "(2) the wishes of the child as t o h i s custodian; 'I (3) the interaction and interrelationship of the child with h i s parent or parents, h i s siblings, and any other person who may significantly affect the child's best interest; "(4) the child's adjustment t o h i s home, school, and community; and "(5) the mental and physical health of a l l indivi- duals involved ." The f i r s t two factors of section 48-332 are not helpful i n t h i s case. Both parents seek custody and the children were too young a t the time'of t r i a l t o express a preference, The f i f t h factor also provides l i t t l e guidance. The record indicates that.both parties coped well with the s t r a i n of t h i s dispute and none of the persons involved, including the children, were shown t o have a physical or mental problem that would have an effect on the custody issue. The third factor involves the interaction of the children with t h e i r parents and others "who may significantly affect1' their best interests. The d i s t r i c t court found both the mother and father expressed their love for the children and: "That both of the minor children of the parties are healthy, normal children that love each other and both of their parents, and have benefited from a healthy home environment .I1 The record supports these findings. However, the mother t e s t i f i e d she intended t o move t o the San Francisco area i n Cali- fornia and live temporarily with her parents while searching for a permanent home for herself and the children. During t h i s time she planned t o work as an accounting clerk for a stockbroker in San Francisco and commute the 40 miles from her parents' home. She argues i f she were given custody her plan would enable the children to form a close and rewarding relationship with t h e i r maternal grandparents which they would otherwise lose. The fourth factor relates t o the children's adjustment t o home, school, and community. The mother contends she can provide a more stable environment for the children. She notes the father, an engineer for Bechtel Power Corporation, is sub- ject t o many geographical disruptions in h i s career. Although the family had lived in Colstrip, Montana, for over three years a t the time of t r i a l , it was the father's third duty assignment in the s i x and one-half years he had worked for Bechtel, and h i s stay i n Colstrip was not projected t o l a s t beyond 1981. The mother argues i f she were given custody the children would not be subject t o these constant and predictable relocations, but instead would have the benefit of a stable and secure l i f e with her near their maternal grandparents. However, the record shows a stable home i n Colstrip. The family lived i n a modern three-bedroom home. The father spent a l o t of time with the children and they had a close relation- ship. H e shared i n the housekeeping duties and helped discipline the children. H i s place of work was only a few minutes drive from the home and he was available i f an emergency arose. But the mother, a t least temporarily, would be 40 miles away from the children, working i n San Francisco. Considering the factors applicable i n section 48-332, w e find no abuse of discretion i n granting custody t o the father. The mother next argues the d i s t r i c t court erroneously based i t s custody decision on the superior earning power of the father. The father earned approximately $1,800 per month and the mother would earn substantially less i n her position as an accounting clerk. Nothing i n the record expressly s t a t e s the d i s t r i c t court considered t h i s factor i n determining the custody issue, but the mother argues the court must have done so because that was "the only distinction between the parties1' favorable t o the father that was set forth i n the d i s t r i c t court's findings of fact. That i s not enough. Absent any other indication i n the record we w i l l not presume the d i s t r i c t court's custody award t o the father was based on h i s superior earning power. The mother's f i n a l argument is that the d i s t r i c t court erred i n finding the evidence rebutted the presumption i n favor of awarding custody of children of tender years t o t h e i r mother when a l l things are equal. I n Tweeten v. Tweeten, Mont . 9 P. 2d , 34 St.Rep. 337, 341, w e stated t h i s presumption continues under the Uniform Marriage and Divorce Act, but held that it i s not conclusive and each custody case must be decided on i t s own facts "rather than by the use of 'controlling o r con- clusive' presumption. * * *" I n The Matter of the Adoption of Redcrow, Mont . - 3 P.2d , 34 St.Rep. 306, 308, the Court stated that a finding that both competing couples are f i t and suitable adoptive parents i s "not equivalent t o a finding that each would equally promote the best interests of the child." This i s also true i n custody cases. Accordingly, the d i s t r i c t court was correct i n concluding that "* * * t h i s presumption, like any other disputable presumption, may be overcome by contrary evidence." The mother relies on Casale v. Casale, (Ky.1977' No. 76- 273) , S.W.2d , where the Supreme Court of Kentucky reversed an a&rd of custody of the parties' infant child t o the father, stating: "* * * W e are not prepared t o define precisely the quantum of proof necessary to overcome the pref- erence that the mother should be the custodian of children of tender years. This i s a value judgment that has to be decided on a case-by-case basis. Here the evidence i s so close, we are of the opinion that the natural preference for the mother should prevail." It thus appears that the preference for the mother comes into F . I play i n Kentucky a t the close of the evidence. That is not the case i n Montana. Here, the parties proceed from the presumption and once it i s overcome by a preponderance of the evidence there i s no preference for the mother. I n meeting t h i s burden, the father need not prove the mother t o be unfit. In the instant case the d i s t r i c t court found the presumption i n favor of the mother had been overcome by the evidence and the interests of the children would be best served by granting custody to the father. W e affirm the judgment . W e Concur: . . .---.--- I*'

June 21, 1977

4e0ed2e4-bfe8-4eb9-9909-6a190c9397ff

HOUSER v HOUSER

N/A

13205

Montana

Montana Supreme Court

No. 13205 I N THE SUPREME C O U R T OF THE STATE OF M O N T A N A 1977 BARBARA J. HOUSER, P l a i n t i f f and Respondent, -vs- JAMES A. HOUSER, Defendant and Appellant. Appeal from: D i s t r i c t Court of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , Honorable Charles Luedke, Judge p r e s i d i n g . Counsel of Record: For Appellant: Joseph E. Mudd argued, Bridger, Montana For Respondent : James Reno argued, B i l l i n g s , Montana Submitted: January 2 6 , 1977 Decided : .luN 2 9 1977 ~iled:,!bN L J Y j l M r . J u s t i c e Daniel J. Shea delivered the Opinion of the Court. This i s an appeal by the husband from a judgment of the d i s t r i c t court, Yellowstone County, awarding the marital home t o the wife i n an annulment action and declaring the husband's name was placed on the deed only a s security f o r the down payment loan made on the house. The sole issue raised by the husband's appeal is h i s assertion the d i s t r i c t court had no r i g h t t o award t o the wife property acquired i n t h e i r j o i n t names before the marriage. This issue was not raised i n the t r i a l court. Moreover, defendant husband i n h i s answer and counterclaim t o the wife's request t h a t the property be equitably divided, a l s o requested an equitable division of the property. The i n s t a n t annulment was the second marriage between Barbara J. Houser and James A. Houser. During the f i r s t marriage they had one child, Jennifer. After the divorce the p a r t i e s s t a r t e d dating again, and i n March 1973 they made a down payment on a home which Barbara was renting. T i t l e was placed i n both names a s j o i n t tenants. James Houser, through h i s f a t h e r , furnished the $4,000 down payment t o be repaid a t the r a t e of $100 per month which included a 6% i n t e r e s t charge. I n December 1973, Barbara and James remarried but the marriage lasted only a few months. I n 1974, Barbara Houser f i l e d an action f o r annulment and asked the court t o equitably divide the personal and r e a l property acquired by the parties. I n h i s answer and counterclaim James Houser a l s o requested the court t o make an equitable division of the property. H e made no attempt t o l i m i t the court t o considera- t i o n of property acquired a f t e r they were married. A t t r i a l , Barbara Houser contended the $4,000 down payment was a loan t o her and James Houser's name was on the deed only a s security f o r the loan. James disputed the loan a l l e g a t i o n and contended the p a r t i e s agreed t o j o i n t ownership of t h e property. A t t r i a l , he did not contend the t r i a l court had no r i g h t t o divide the property; he was merely asking f o r a d i f f e r e n t disposi- t i o n than t h a t awarded. The d i s t r i c t court found t i t l e t o the home (subject t o a mortgage f o r the balance of the purchase price) was i n Barbara Houser's name and James Houser's name was placed on the deed 1 I f o r security purposes only, and was meant t o secure the repay- ment of said loan [the down payment] ." By h i s pleadings and by h i s approach a t t r i a l , defendant James Houser c l e a r l y requested the d i s t r i c t court t o use i t s equitable powers t o make a disposition of the home. He cannot now complain the d i s t r i c t court had no r i g h t t o do so. Epletveit v. Solberg, 119 Mont. 45, 169 P.2d 722. The d i s t r i c t court was not compelled t o order the home sold and the proceeds divided equally between the p a r t i e s , a s defendant i n s i s t s . Rather, the court found t h a t defendant James Houser had no ownership r i g h t s i n the property, except a security i n t e r e s t f o r repayment of the $4,000. W e emphasize t h a t James Houser did not challenge the findings of the d i s t r i c t court. W e affirm the judgment. We Concur: 3

June 29, 1977

550ee033-ce7f-4cce-86f9-7dff994f7763

MCGUINN v STATE

N/A

13744

Montana

Montana Supreme Court

No. 13744 IN THE SUPREME COURT OF THE STATE OF MONTANA 1978 THOLMAS P. McGUINN, Defendant and Appellant, THE STATE OF MONTANA, Plaintiff and Respondent. Appeal from: District Court of the Second Judicial District, Honorable Arnold Olsen, Judge presiding. Counsel of Record: For Appellant: Leonard J. Haxby argued, Butte, Montana Daniel R. Sweeney argued, Butte, Montana For Respondent: Hon. Mike Greely, Attorney General, Helena, Montana Denny Moreen argued, Assistant Attorney General, Helena, Montana John G. Winston, County Attorney, Butte, Montana Craig G. Phillips argued, Deputy County Attorney, Butte, Montana Submitted: March 7, 1978 Decided: ?U# ' 1378 i ,:g 1 L .' % d l Filed: dub' M r . Justice John C. Harrison delivered the Opinion of the Court: This is an appeal by defendant Thomas P. McGuinn from the f i n a l judgment entered on a jury verdict of guilty of de- liberate homicide i n the District Court, Silver B o w County. The body of Mrs. LaRae Alley was found on M a y 30, 1976, a t approximately 2:00 p.m. i n an area located approximately 10 miles south of Butte, Montana. The cause of death was four bullet wounds i n the head. Time of death was estimated to be between 5 a.m. of the morning of M a y 30 and 1 p.m. that after- noon. Defendant was f i r s t questioned concerning the murder on or about M a y 30, 1976. N o charges resulted from t h i s questioning. Later, on June 2, 1976, defendant was arrested and placed i n custody by the Silver B o w County sheriff's office on another charge. A t that time the clothing of the defendant was taken from him and sent t o the FBI laboratory i n Washington, D.C. for analysis i n connection with the murder of LaRae Alley. O n August 5, 1976, defendant was charged by Information with the crime of deliberate homicide. T r i a l commenced on February 15, 1977. During the t r i a l the s t a t e offered direct and circum- s t a n t i a l evidence tending t o prove defendant committed the crime. Contrarily, defendant maintained h i s innocence throughout the t r i a l , testifying on h i s own behalf and insisting he was not i n the area a t the time the crime was committed. On February 23, 1977, defendant was found guilty of the crime of deliberate homicide by a jury verdict. From t h i s verdict and subsequent judgment, defendant appeals. Defendant presents numerous issues for review by t h i s Court. The determinative issue is whether there is sufficient substantial, credible evidence t o support the jury verdict? The balance of the claimed errors is alleged to be cumulative and taken together amounts t o reversible error. The standard used by t h i s Court when reviewing the verdict of a jury is s e t forth i n State v. Merseal, (1975), 167 Mont. 412, "This Court remains evermindful of one fundamental rule -- that questions of fact must be determined solely by the jury, and that given a certain legal minimum of evidence, t h i s Court on review w i l l not substitute i t s judgment for that of the jury. * * * "On appeal w e examine the evidence t o de- termine whether the verdict i s supported by sub- s t a n t i a l evidence. In so doing, w e view the evidence i n the l i g h t most favorable t o the State. * * *" 167 Mont. 415. The s t a t e offered evidence t o show defendant had the opportunity to-murder M r s . Alley. The time element connecting defendant with the crime is: O n M a y 30, M r s . Alley l e f t her home a t approximately 8:25 t o 8:30 a.m. t o deliver gasoline t o her husband on Continental Drive. O n that same morning, de- fendant l e f t the D & M Bar, located i n Butte, a t approximately 7:30 a.m. H i s vehicle was seen on the road leading t o the scene of the crime a t approximately 8:00 a.m. Defendant's vehicle was again seen on that road driving toward Butte from the scene of the crime a t a high r a t e of speed between 8:45 and 8:50 a.m. A detective investigating the crime t e s t i f i e d t o making several t r i p s between the victim's house and the murder scene. H e found it took from 10-12 minutes t o cover the route, i f one traveled within the speed l i m i t s . In addition t o the time element, a pair of sunglasses found a t the crime scene, a f t e r the i n i t i a l discovery of the body, was circumstantiZilly linked t o defendant. Testimony was also given that a man matching defendant's description purchased a new pair of sunglasses on the evening of M a y 30. Next, the s t a t e produced evidence t o demonstrate defendant had the means t o murder Mrs. Alley. Defendant consented t o a search of h i s home which produced an unusual .38 short S & W box of bullets and a suspected .38 Smith & Wesson weapon. Three Federal Bureau of Investigation laboratory experts gave testimony: I r a Holland, a special agent for the FBI, t e s t i f i e d con- cerning the neutron activation analysis performed on the bullets removed from the victim's head. From t h i s analysis the agent stated the bullets were similar enough i n elemental composition t o have come from the same box of cartridges as those taken in the consent search a t defendant's home. This finding was confirmed by the defense expert. The bullets recovered from the victim were identified as .38 S 6 W caliber bullets. The bullets taken a t defendant's home were also .38 S & W . Ballistics indicated the bullets were fired from a barrel with five grooves plus a right-hand t w i s t . Testimony was given that the .38 S & W bullet i s an unusual .38 short cartridge intended for use in revolvers. James B. Bollenbach, an FBI agent, t e s t i f i e d the .38 S & W short cartridge when compared t o modern ammunition i s of relatively low power. This evidence corresponded with the pathologist's testimony that the bullets removed from the victim were of a low energy type, not often seen i n modern times. The pathologist, basing h i s observation on 30 years of experience, was of the opinion that modern ammunition is sufficiently powerful that the skull i s massively fractured and i n most instances the bullet penetrates t o the opposite side of the skull or exits. In t h i s case the bullet only penetrated the brain for a distance of approximately one inch a f t e r passing through the skull. Defendant's .38 f i t the general description of the .38 S & W but it was not identified a s the murder weapon. James Hilverda, another FBI special agent, t e s t i f i e d that fibers on the clothing of the victim- microscopically similar t o fibers contained i n a sweater belonging t o defendant. Those fibers could have come from the defendant's sweater, but not to the exclusion of a l l the other garments. Finally, impeaching evidence was given by defendant while testifying i n h i s own behalf. A t t r i a l , defendant stated he went t o a M r . ~ o g e r ' s residence on Continental Drive. The s t a t e pro- duced a prior statement taken by Sheriff Hagel where defendant denied making any t r i p s on Continental Drive on M a y 30. Defendant claimed he was i n a bar a t 8:00 a.m. on the morning of M a y 30. Two witnesses t e s t i f i e d to seeing defendant traveling on Continental Drive around 8 a.m. Defendant submitted t o a swab t e s t t o determine the l a s t t i m e he fired a gun. During the t e s t , defendant gave four separate stores concerning the l a s t time he fired a gun. The f i n a l story !t was two days ago", which was the day of the homicide. John Whelan t e s t i f i e d defendant requested him t o get defendant a substitute gun while both were i n the Silver B o w County j a i l . Defendant denied t h i s testimony. Finally, defendant t e s t i f i e d he barely knew the victim and had never socialized with her. John Whelan t e s t i f i e d defendant told him he knew the victim. Carol Ann Gilmore t e s t i f i e d she saw defendant and the victim, arm-in-arm, going into a restaurant approximately a year before the shooting. She was positive of her identification of both persons. Defendant was placed near the scene of the crime. De- fendant was shown t o have the means t o commit the crime. Finally, defendant cast doubt on h i s own plea of innocence by being impeached on topics closely related t o h i s a c t i v i t i e s surrounding the crime. Defendant's remaining issues w i l l be reviewed i n accord with h i s theory of cumulative error. In urging the doctrine of cumulative error, defendant raises 16 specifications of alleged errors claiming that the aggregate of these errors, when taken as a whole, constlitntes prejudicial error and hence are reversible. This Court is not obligated t o refute a l l of these alleged errors where the errors are bald assertions, absent any specific argument or authority, o r are allegations which can be classified as nitpicking and void of definable prejudice. W e w i l l , however, briefly answer these contentions i n l i g h t of the Court's ruling on the doctrine of cumulative error i n State v. Meidinger, (1972), 160 Mont. 310, 321, 502 P.2d 58, where the Court said: " * * * W e cannot accept t h i s contention. Defendant i n interpreting t h i s doctrine points out 33 separate specifications of alleged errors and claims that the aggregate of these errors when taken a s a whole constitutes prejudicial error. This doctrine, i f it in fact exists, presumes that a l l 33 allegations are errors. I f (Emphasis supplied.) Here, defendant a t the outset contends the Information was not based on sufficient probable cause. Section 95-1301, R.C.M. 1947, provides i n pertinent part: "* * *If it appears there is probable cause t o believe that an offense has been committed by the defendant the judge shall grant leave t o f i l e the information * * *.I1 The court may rely on the presence of probabilities. "* * * a mere probability is sufficient for probable cause, a prima facie showing not being necessary. Also af f idavits of probable cause are subject t o much less rigorous standards than the admissibility of evidence." State v. Miner, (1976), 169 Mont. 260, 264, 546 P.2d 252. W e have reviewed the application for leave t o f i l e the Information. The county attorney presented a large array of facts. Probable cause t o believe that an offense was committed by the defendant appears from these facts. Defendant's second contention is that a t o t a l of 17 exhibits were improperly admitted into evidence. Defendant has apparently raised as error every exhibit to which he objected i n some manner during t r i a l . Eight of the exhibits were objected t o on the grounds of lack of proper foundation. " * * * A determination of whether a foundation has been properly l a i d i n order t o introduce exhibits into evidence r e s t s with the lower court and such a determination w i l l not be overturned unless there i s a clear abuse of discretion * * *." State v. Olsen, (1968), 152 Mont. 1, 10, 445 P.2d 926. N o abuse of discretion is present i n t h i s case. I f an exhibit has been shown t o be connected with the crime and identified a s such, it is sufficient. State v. Wilroy, (1967), 150 Mont. 255, 259, 434 P,2d 138. The i t e m s i n question were shown t o be connected with the crime. Eight other exhibits were objected t o on the grounds of relevancy. Evidence is considered relevant i f it naturally and logically tends t o establish a fact i n issue. State v. Sanders, (1971), 158 Mont, 113, 117,118, 489 P.2d 371. Exhibits con- taining bullets from the crime and photographs of the crime scene have been found t o be admissible. State v. Allison, (1948), 122 Mont. 120, 133, 199 P.2d 279; State v. McKenzie, (1976), Mont . , 557 P.2d 1023, 1037, 33 St.Rep. 1043 (Remanded by the United States Supreme Court for further consideration, see: State v. McKenzie, Mont . , P.2d , 35 St.Rep. 759). A l l of the questioned items were sufficiently connected t o the crime. Defendant raises a s error the admission into evidence of Exhibit 7A, a p i s t o l introduced for i l l u s t r a t i v e purposes only. The county attorney upon presenting t h i s p i s t o l stated: "Q. I ' m going t o show you a weapon and have it marked. (Whereupon, State' s proposed Exhibit 7A i s marked for identification. ) "Q. F i r s t of a l l , I ' m going t o t e l l you t h i s was not the weapon that did the shooting. * * *I1 Af t e r some discussion and an objection by defendant that Exhibit 7 A was not the gun that shot the victim and therefore it was t o t a l l y immaterial and irrelevant t o the case, the t r i a l court apparently admitted the exhibit into evidence without a motion from either party. On appeal defendant now alleges since no attempt was made t o introduce the exhibit, the erroneous admittance of the exhibit into evidence misled the jury into believing the defendant was the owner of the murder weapon. The county attorney clearly stated that the exhibit was t o be used for i l l u s t r a t i v e purposes only. While neither party moved t o admit t h i s exhibit into evidence, they did not object when the t r i a l court stated " ~ x h i b i t 7A may be admitted into evidence. I' I n addition t o lacking a specific objection for admitting t h i s exhibit without a motion, w e see no substantial prejudice. Both the s t a t e and defendant clearly stated the exhibit was not the murder weapon. Defendant next raises an additional series of error concerning the introduction of hearsay testimony. Many of the allegations of error deal with the introduction of statements made by defendant and admitted by the trial court as a verbal act exception to the hearsay rule. The law on admissions against interest is well estab- lished. Section 93-401-27, R.C.M. 1947, dealing with facts which may be proven at trial, provides in pertinent part: "2. The act, declaration or omission of a party, as evidence against such party. 1 I An admission has been defined as any voluntary statement by an accused relating to some particular fact or circumstance which indicates a consciousness of guilt and tends to connect the accused with the crime charged. State v. Allison, (1948), 122 Mont. 120, 144, 199 P.2d 279. The state questioned the sheriff regarding statements made by the defendant's son. Defendant objected on the grounds that any statements made by the son concerning the sunglasses would be hearsay, The county attorney responded to this objection by stating: "It's the same verbal act that we're talking about now. We're not asking Mr. Hagel to tell the statement was true, but that the statement was made * * * . I 1 These statements would have been hearsay had they been offered to prove the truth of the matter stated. However, as the county attorney stated, they were not offered for that purpose but rather to show how the investigation focused on the defendant as a suspect, Going further through the transcript we note defendant's son's subsequent testimony. The son stated he had not identified the sunglasses but rather said: "Those look like my dad's sunglasses. II - 9 - Accordingly, w e find no substantial prejudicial effect on the defendant. A s stated by t h i s Court i n State v. Rornero, (1973), 161 Mont. 333, 341, 505 P.2d 1207, under section 95- 2425, R.C.M. 1947: "Any error, defect, irregularity or variance which does not affect substantial rights shall be disregarded. * * *'I Additional error i s alleged resulting from the comments and remarks made by the prosecutor. Defendant contends the comments were inflammatory and prejudicial. The lack of significance of t h i s alleged error is particularly found i n defendant's failure t o take any corrective measure during t r i a l . State v. Caryl, (1975), 168 Mont. 414, 432, 543 P.2d 389. Defendant had the burden t o show that the remarks and comments affected h i s substantial right. I n the absence of such showing there can be no prejudice. State v. Meidinger, supra. A like contention of error i s made by defendant concerning alleged comments on the evidence made by the District Court. For similar reasons, no merit i s found i n t h i s argument. The references cited from the transcript a r e nitpicky and f a i l t o qualify as comments on either the weight or interpretation of the evidence. During t r i a l defendant did not object t o any of the statements of the court now alleged t o be prejudicial, nor did he take any other corrective action. State v. Jensen, (1969), 153 Mont. 233, 236, 455 P.2d 631. Finally, defendant contends the t r i a l court gave 7 improper jury instructions and failed t o submit 14 proper in- structions on behalf of the defendant. Briefly, 2 of the 7 specifications of error concerning improper instructions were not objected t o a t the time the instructions were settled. These instructions, Court's In- structions #7 and #16, cannot now be challenged on appeal for the f i r s t time. State v. Meidinger, supra. A third alleged improper instruction, Court's Instruction #3, was objected t o on the grounds that a shorter more concise instruction was available. Court's Instruction #3 i s recommended and found i n the Montana Jury Instruction Guide. Court's Instruction /I18 was objected t o by defendant on the grounds of being repetitious of a prior court instruction. A reading of the instructions reveals the instruc- tion objected to defined circumstantial evidence, whereas the prior court instruction differentiated direct and circumstantial evidence and explained how the jury should consider circumstantial evidence. W e find no merit i n defendant's objection. The remainder of defendant's alleged improper jury in- structions f a i l t o establish any reversible error and w e deem them not worthy of discussion. Of the 14 instructions proposed by defendant, but not given, 1 1 were rejected on the grounds of being repetitious of given instructions. A f a i r reading of a l l of the jury instructions as a whole demonstrates they are sufficient and properly in- structed the jury on the law governing t h i s case. Those jury instructions rejected as repetitious were not an abuse of discretion by the court. The remaining 3 proposed instructions also f a i l t o provide grounds for reversal. Defendant attempted t o offer an instruction concerning the defense of a l i b i . This instruction was properly rejected as defendant's case was not founded upon an a l i b i defense. N o notice of such a defense was given as required by section 95-1803(3), R.C.M. 1947. N o claim was made by defendant i n keeping with the defense of a l i b i . Defendant also proposed 2 instructions providing a legal definition for the words "could" and ''similar". The District Court refused these instructions stating: ' I * * * They [the jury] heard the testimony of the similarities and it's up to them to determine the similarities and its not within the province of this court to say what similarity is or is not. 11 We find no error on the part of the trial court in refusing these instructions. This Court has carefully reviewed the issues for review presented by the defendant. We find sufficient substantial evidence, if believed by the jury. We find no abuse of judicial discretion or reversible error. The judgment of the trial court is affirmed. We Concur: $LJ&tQQ\ Chief Justice Judge, sitting with the Court.

June 28, 1977

c5a01809-1ccc-4b57-b370-e476e5df2741

COFFEE (FORMERLY WOLFE) v WOLFE

N/A

13163

Montana

Montana Supreme Court

No. 13163 I N THE SUPREME COURT O F THE STATE O F M O N T A N A 1977 MARILYN J O COFFEE, formerly MARILYN J O WOLFE, P l a i n t i f f and Respondent, DELOIT RAY WOLFE, Defendant and Appellant. Appeal from: D i s t r i c t Court of t h e Fourth J u d i c i a l D i s t r i c t , Honorable Edward Dussault, Judge p r e s i d i n g Counsel of Record: For Appellant: Worden, Thane, Haines and Williams, Missoula, Montana Ronald Bender argued, Missoula, Montana For Respondent : Ilulroney, Delaney, Dalby & Mudd, Missoula, Montana Dexter L. Delaney araued, Missoula, Montana F i l e d : Submitted: June 2 , 1977 ~ecidea\:l\. 2 6 I / ? C l e r k M r . J u s t i c e John Conway Harrison delivered the Opinion of the Court. This i s an appeal from an order disallowing a loan i n a termination of a t r u s t proceeding. O n August 24, 1961, p l a i n t i f f was granted a divorce from defendant. Two children of the marriage Melinda Sue, age 4, and Deloit Ray, age 3, were placed i n p l a i n t i f f ' s custody. A property settlement agreement provided defendant was t o pay $200 per month f o r the support and maintenance of the children, plus a $10,000 l i f e insurance policy on defendant's l i f e . De- fendant agreed t o pay a l l the premiums incident thereto and the beneficiary of the policy was t o be the F i r s t National Bank of Missoula, a s trustee. I n the event of defendant's death the proceeds were t o be paid t o the bank t o be used f o r the care, education and support of the children with the provision t h a t any amount remaining when the youngest child became 25 years of age would be payable t o the children i n equal shares. O n December 4 , 1964, following p l a i n t i f f ' s remarriage, the p a r t i e s entered into a new agreement modifying the terms of the 1961 agreement as t o support f o r the children. Under the new agreement defendant paid $50 per month f o r child support of the minor children and $150 per month was t o be paid i n t o a fund t o be used f o r the future use of the children's education. This money was deposited i n the Southside National Bank of Missoula and time savings c e r t i f i c a t e s were purchased. I n November 1974, defendant borrowed $2,743.63 a t 4% i n t e r e s t on the l i f e insurance policy so that he could purchase a $13,000 Federal Land Bank bond which would n e t approximately 3% i n t e r e s t to the t r u s t fund. To make t h i s purchase defendant also put i n h i s own funds, along with t h a t borrowed on the l i f e insurance policy. The bond was f o r the benefit of the children. O n June 6 , 1975, Melinda Sue became 18 years of age and p l a i n t i f f petitioned the court f o r an order t o have an accounting of the funds which had been accumulated and s e t aside f o r the children's education and t o pay over t o Melinda Sue "one-half of the proceeds of t h a t fund f o r her use and benefit i n connection with defraying her future education expenses." Defendant f i l e d h i s accounting and petitioned t h e court f o r an order authorizing payment of one-half of the proceeds of the t r u s t fund, together with accumulated i n t e r e s t and dividends, t o Melinda Sue i n four equal annual payments beginning i n 1975. The accounting revealed a t o t a l fund of $21,953.41. Defendant deducted from t h a t amount $2,743.63 the loan he made from the insurance policy and $3,963.55, the amount he contributed t o purchase the Federal Land Bank bond. That l e f t a n e t value i n the account of $15,246.23 a t the date of the hearing. The court entered an order approving the accounting i n a l l regards, except the deduction of the loan made t o defendant by the insurance company and further denied defendant's request f o r the d i s t r i b u t i o n t o Melinda Sue i n four annual payments. I n addition, the court ordered Melinda Sue was e n t i t l e d t o one-half of the cash surrender value of the l i f e insurance policy p r i o r t o the securing of the loan thereon and ordered defendant t o d i s t r i b u t e t o Melinda Sue the sum of $8,994.93. Defendant r a i s e s f o r t h i s Court's consideration four issues on appeal: I. Whether the triaL court >5xred i-n ordering payment or one-half the cash surrender value of the policy when such r e l i e f was not sought i n p l a i n t i f f ' s p e t i t i o n ? 2. Whether the t r i a l court had the power t o modify a prior p r o p e r t y settlement agreement? 3 . Whether there i s s u f f i c i e n t evidence t o support the t r i a l c o u r t ' s finding t h a t defendant must pay one-half of the cash surrender value of the l i f e insurance policy p r i o r t o securing the loan thereon? 4. Whether the loan on the insurance policy i s a proper charge against the t r u s t funds? Issue 1. This issue i s directed t o the c o u r t ' s ordering a d i s t r i b u t i o n of one-half the value of the insurance policy when such r e l i e f was not sought by the p e t i t i o n . Defendant argues the l i f e insurance policy was not a p a r t of Che m u s t fund but was a provision of the property s e t t l e - ment a t the time of the divorce i n 1961, and t h a t the insurance policy was t o cover the children's minority i n case he died. Further, t h a t the t r u s t fund came i n t o being l a t e r , i n 1964, when he petitioned the court t o lower the child support payments t o $50 per month and he be allowed t o put $150 per month i n t o a t r u s t fund f o r the children's education. The p e t i t i o n f i l e d by p l a i n t i f f on June 5, 1975, stated: "AND WHEREAS, M E L I N D A SUE W O L F E has presently applied for and been accepted a t an i n s t i t u t i o n of higher education and i s i n need of and e n t i t l e d t o t h a t share of t h a t fund, "NOW, THEREFORE, the P l a i n t i f f p e t i t i o n s the Court for i t s Order requiring the Defendant "I) t o make a f u l l accounting of the funds which have been accumulated and s e t aside f o r said purposes, and, "2) t o pay over t o the said M E L I N D A S U E W O L F E one-half of the proceeds of t h a t fund f o r her use and benefit i n connection with defraying her future edu- cational expenses." N o e f f o r t was made t o modify the o r i g i n a l property settlement with regard t o the l i f e insurance policy and defendant argues no evidence was shown the l i f e insurance policy was considered a p a r t of the t r u s t fund created i n 1964. P l a i n t i f f counters these arguments by noting they a r e not only misleading but avoid the issue. She alleges her p e t i t i o n sought a f u l l accounting of the funds which had been accumulated and s e t aside f o r Melinda Sue's educational expenses. Also, t h a t the language of the order concerning the insurance policy proceeds indicated it was f o r the purpose of helping t o defray the educa- t i o n a l expenses of the children. While defendant makes much of h i s argument t h a t no evidence was introduced concerning the l i f e insurance policy a t the hearing, t h i s is contested by p l a i n t i f f and defendant did not demand a record. P l a i n t i f f argues, and we agree, t h a t defendant is making an argument on the f a c t s , but he has f a i l e d t o provide a record of the hearing. Absent the record, and considering the case on the b a s i s of the court f i l e s , we find the court properly exercised i t s discretion i n determining the nature of the corpus of the t r u s t . S i t t i n g a s a court of equity, the d i s t r i c t court had f u l l j u r i s - diction t o look i n t o the contributions made by defendant f o r the benefit of h i s children and determine what each child was en- t i t l e d t o upon attaining majority. Thisted v. Country Club Tower Corp., 146 Mont. 87, 405 P.2d 432; Dutton v. Rocky Mtn. Phosphates, 151Mont. 54, 438 P.2d 674. Issue 2. Under the f a c t s i t u a t i o n before the Court i n t h i s case we find the d i s t r i c t court did not change the property settlement agreement a s argued by defendant. The court was s i t t i n g i n equity and had jurisdiction t o consider t h e f a c t s before it. Here defendant, when the children were young, took out a l i f e insurance policy t o insure t h e i r support and education during the period of t h e i r minority i n the event he should die. That period, a s t o Melinda Sue, is now over and one of the purposes f o r which t h e policy was taken out, her education, has arrived. The very needs defendant anticipated have occurred and the court properly included Melinda Sue's i n t e r e s t i n the policy a s p a r t of her educational fund. Issues 3 and 4. For the purposes of t h i s opinion we combine Issues 3 and 4 , because they r e l a t e t o the loan made t o defendant from the insurance policy t o purchase the Land Bank bond. Defendant argues there was insufficient evidence before the court t o support i t s finding t h a t he pay one-half of the cash surrender value p r i o r t o securing t h e loan. Without a record o r a memorandum opinion of the d i s t r i c t court on i t s reasons, we a r e a t a l o s s t o understand the c o u r t ' s rationale. What the court f i l e reveals i s t h a t defendant i n November 1974, was allowed by the court t o borrow from the policy t o be invested i n a b e t t e r i n t e r e s t paying bond so t h a t the children's educational fund would be enhanced. The cash surrender value of the policy as of June 28, 1975, the time of the accounting, including the outstanding loan, amounted t o $3,017.33. I f the loan were deducted from t h a t figure the cash surrender value of the policy would be $193.11. I n denying the amount of the loan charge against the t r u s t corpus the court added $2,824.22 t o the cash surrender value of the policy p r i o r to the loan and defendant was required t o use a s the cash surrender value of the policy the sum of $5,841.55. I n e f f e c t , the t r i a l court in denying the loan on the insurance policy a s a proper debt against the t r u s t property requires defendant t o repay the loan out of h i s own funds. I n doing so the court cormitted e r r o r f o r defendant had already paid once i n complying with the court order t o d i s t r i b u t e one- half of the cash surrender value p r i o r t o the securing of the loan. W e find the loan incurred by defendant a s t r u s t e e of the educational fund was a proper charge against the fund. The judgment of the t r i a l court i s affirmed i n p a r t and remanded t o the court f o r compliance with t h i s opinion a s t o the remaining part. Justices.

July 26, 1977

8b761fd6-7548-47ab-94d3-dd32af10623c

BROWN v WEBB CATTLE CO

N/A

13643

Montana

Montana Supreme Court

No. 13643 I N T H E SUPREME C O U R T O F T H E STATE O F MONTANA 1977 RUSSELL BROWN, P l a i n t i f f and Respondent, JOHN W E B B , d/b/a W E B B CATTLE C O M P A N Y , Defendant and Appellant. Appeal from: D i s t r i c t Court of t h e Fourteenth J u d i c i a l D i s t r i c t , Honorable LeRoy McKinnon, Judge presiding. Counsel of Record: For Appellant: McKeon and McKeon, Malta, Montana John C. McKeon argued, Malta, Montana For Respondent : Ask and P r a t t , Roundup, Montana Thomas M. Ask argued, Roundup, Montana For Amicus Curiae: W i l l i a m E. O'Leary argued, Helena, Montana Submitted: May 31, 1977 ~ e c i d e d & ~ G 4 197: &&4 Filed: Clerk Mr. Justice Frank I. Haswell delivered the Opinion of the Court. Plaintiff brought this action in the district court, Musselshell County, seeking to recover damages for the loss of three cows due to the alleged negligence of defendant in hauling and transporting the cows. Trial was had without a jury. At the close of plaintiff's case-in-chief, defendant moved the court for dismissal under Rule 41(b), M.R.Civ.P. Defendant's motion alleged plaintiff's evidence demonstrated no right to the relief sought, and plaintiff was barred from recovery by the provisions of Item 45 of the Montana Livestock Tariff No. 1. The trial court reserved ruling on this motion until all evidence was introduced. At the close of trial, the court requested briefs on defendant's motion to dismiss and ordered the case be deemed sub- mitted upon the filing of the requested briefs. Thereafter on August 20, 1976, the court entered its findings of fact, conclusions of law and judgment. A specific ruling was never made on defendant's motion. Defendant appeals from the judgment which awarded damages to plaintiff in the sum of $1,242, plus costs. In May 1974 Russell Brown, a long time cattle rancher, purchased 225 cows from a ranch located near Big Sandy, Montana. All of the 225 cows had young calves at their side. The evidence is not conclusive as to the age of the calves. Brown contracted with John Webb, d/b/a Webb Cattle Company (Webb), for the trans- portation of a portion of the 225 cows and calves from the ranch near Big Sandy to his ranch near Musselshell, Montana. The rates and charges agreed upon by the parties were in accord with existing tariffs on file and approved by the Montana Public Service Commission. Webb is a common carrier of livestock and was engaged in such business in May 1974, operating as a class B carrier under M.R.C. Permit No. 3448 issued by the Montana Public Service Commission. In addition, Webb was a participating member carrier in the Montana ~ivestock Tariff Bureau. The Livestock Tariff Bureau represents approximately 170 member carriers on whose behalf the Bureau files tariff rates, charges, and applicable rules and regulations for approval by the Public Service Commission. On the evening of May 24, 1974, 45 cows and their calves were loaded in each of two of Webb's tractor-trailer trucks. John Webb was the driver of one truck and one of his employees drove the second truck. During the nightlong trip from Big Sandy to Musselshell, Webb and his driver stopped several times to check the livestock in their trailers. Upon arrival in Roundup, Montana, Webb noticed one cow was down in one of the trailers. He prodded her with an electric prod, but the cow would not or could not get to her feet. Instead of taking further efforts to aid the injured cow, Webb decided to proceed to Brown's ranch, some 34 miles away, to off-load the cattle. Upon arrival at Brown's ranch the cows and calves were off-loaded into a corral. One cow could not get up and had to be assisted from the trailer by Webb and Brown. The cows from these two loads were not co-mingled with cows from previous loads, nor with cows other than the 225 purchased at Big Sandy. Within 24 hours after arrival at the ranch one cow died in the corral where the off-loading took place. Webb was notified of the loss and a claim for reimbursement was made by Brown. A second cow died two or three days later. At that point, Webb requested Dr. Orley Arthur, a veterinarian from Roundup, to go to the ranch and perform a post-mortem on the cows to determine the cause of death. Dr. Arthur testified he performed a post-mortem on only one of the dead cows. He further testified he observed a second cow lying dead in the corral and a third cow lying a short dis- tance away. The third cow was alive, but seriously injured. This animal later died about five days after its arrival at Brown's ranch. All three animals were covered with a large amount of manure and mud, especially on their sides and backs. The post-mortem indicated the cow examined died of a pulmonary hemorrhage. Dr. Arthur concluded the animal was sub- jected to a considerable amount of trauma while down in the truck as evidenced by the hemorrhage in the lungs. Numerous bruises, hematomas, and blood clots were found underneath the skin along the rib cage and over the muscular surface of the body. No sign of disease or other defect was found. Dr. Arthur indicated the two other cows he observed exhibited injuries, leading him to believe the cause of death of the other two was the same as the cow he examined. Dr. Arthur, Brown, and an expert witness familiar with livestock hauling, a11 testified the large amount of foreign material on the cows' sides and backs would indicate they were down in the trailers for some time and trampled by the other cows. The average cost of a cow and calf pair was $400. Commis- sion on their purchase and hauling charges amounted to $5 and $9 per pair respectively. The court awarded Brown damages for the loss of the three cows in the amount of $ 4 1 4 each or a total of $1,242. Webb presents five issues on appeal: 1. Whether a district court must rule on a motion to dis- miss made pursuant to Rule 41(b), M.R.Civ.P., before it can issue its findings of fact, conclusions of law and judgment? 2. Whether Item 45 of the Montana Livestock Tariff No. 1 is binding upon the shipper in the instant case? 3. Whether the evidence was sufficient to support the district court's finding of negligence on the part of ebb? 4. Whether Brown's claim for loss was properly processed by Webb under the statutes in effect at the time of the claim? 5. Whether the district court properly calculated Brown's damages in the instant case? Rule 41(b), M.R.Civ.P., provides a procedure whereby a defendant may move for dismissal of an action after plaintiff has presented his case-in-chief "on the ground that upon the facts and the law plaintiff has shown no right to relief." This rule expressly provides that "The court as trier of the facts may then determine them and render judgment against the plaintiff or may decline to render any judgment until the close of all the evidence." Webb argues this rule is mandatory upon the district court and the court in the instant case erred when it failed to specifically rule on the motion to dismiss prior to entering its findings of fact, conclusions of law and judgment. We find no Montana authority which specifically discusses Court this issue. The Fifth Circuit/of Appeals, however, has specifically considered the issue in regard to Rule 41(b), Fed.R.Civ.P., identi- cal to and the basis of the Montana rule. In Smith Petroleum Service, Inc. v. Monsanto Chemical Co., 420 F.2d 1103, 1116 the court stated: "* * * Under Rule 41(b), when the defendant moves for a dismissal at the completion of the plain- tiff's presentation of evidence, the trial court has two options: (1) The court as 'trier of the facts may then determine them and render judgment against the plaintiff' or (2) the court 'may decline to render any judgment until the close of all the evidence.'* * *" Therefore, we hold that a district court, when confronted with a Rule 41(b) motion to dismiss, must rule on the motion when made at the close of plaintiff's evidence, or reserve its ruling until the close of all evidence and then render its judgment. In either event a specific ruling must be made on the motion prior to the rendering of a final decision in the case. Here, although the district erred when it failed to rule on Webb's motion prior to final judgment, this error was harmless. Rule 61, M.R.Civ.P., states: or defect "* * *no error/in any ruling or order or in anything done or omitted by the court or by any of the parties is ground for granting a new trial or for setting aside a verdict or for vacating, modifying or otherwise disturbing a judgment or order, unless refusal to take such action appears to the court inconsistent with substantial justice.* * *" No substantial injustice was suffered by Webb in light of the fact the court's ruling on his motion was clearly indicated by the final judgment. Webb argues in his second issue that Item 45 of the Montana Livestock Tariff No. 1 is binding upon Brown and he is therefore precluded from recovery. We disagree. Under the provisions of section 8-103, R.C.M. 1947, the Montana Public Service Commission is: "* * * vested with power and authority, and it is hereby made its duty to supervise and regulate every motor carrier in this state; to fix specific, just, reasonable, equal and nondiscriminatory rates, fares, charges and classifications for class A and class B motor carriers; to regulate the properties, facilities, operations, accounts, services, prac- tices, affairs and safety of operations of all motor carriers; to require the filing of annual and other reports, tariffs, schedules or other data by such motor carriers and to supervise and regulate motor carriers in all matters affecting the rela- tionship between such motor carriers and the travel- ing and shipping public. * * *" Livestock carriers, such as Webb, came under the jurisdic- tion of the Public Service Commission in 1971 and were required to file tariffs of rates, charges and classifications of commodities pursuant to section 8-103. Such a tariff was filed with the Public Service Commission by the Montana Livestock Tariff Bureau, Inc., of which Webb is a member. One of the provisions contained in this tariff is Item 45; it provides: "Livestock subject to parturition within thirty (30) days before or after date of ship- ment will be accepted only at owner's risk." P a r t u r i t i o n is defined a s " t h e a c t o r process of giving b i r t h * * *". The American I l l u s t r a t e d Medical Dictionary, 2 1 s t Edition, (W. B. Saunders Company, 1947). The record r e f l e c t s t h a t a t l e a s t a p o r t i o n of t h e c a t t l e hauled by Webb had given b i r t h within t h e preceding t h i r t y days. Even i f t h i s Court were t o assume t h e l o s t cows had given b i r t h t o t h e i r c a l v e s within t h i s time period, we cannot agree with Webb's contention f o r t h i s reason: A common c a r r i e r ' s l i a b i l i t y f o r l o s s o r i n j u r y t o i t s cargo i s c l e a r l y and s u c c i n c t l y s t a t e d i n former s e c t i o n 8-812 and s e c t i o n 8-813, R.C.M. 1947 ( i n e f f e c t a s of t h e d a t e of l o s s ) : "8-812. Unless t h e consignor accom- panies t h e f r e i g h t and r e t a i n s exclusive c o n t r o l t h e r e o f , an inland common c a r r i e r of property i s l i a b l e , from t h e t i m e t h a t he accepts u n t i l he r e l i e v e s himself from l i a b i l i t y , pursuant t o s e c t i o n s 8-414 t o 8-417, f o r t h e l o s s o r i n j u r y thereof from any cause whatever, except: "1. An inherent d e f e c t , v i c e , weakness, o r a spontaneous a c t i o n of t h e property i t s e l f ; "2. The a c t of a public enemy of t h e United S t a t e s , o r of t h i s s t a t e ; "3. The a c t of t h e law; o r " 4 . A n i r r e s s i s t i b l e superhuman cause. "8-813. A common c a r r i e r i s l i a b l e , even i n t h e cases excepted by t h e l a s t s e c t i o n , i f h i s ordinary negligence exposes t h e property t o t h e cause of t h e l o s s . " Item 45 of t h e Montana Livestock T a r i f f No. 1 urged by Webb a s a defense, completely changes t h e meaning of t h e c i t e d s e c t i o n s and i n its p r a c t i c a l a p p l i c a t i o n completely changes t h e law. I n e f f e c t , I t e m 45 s t a t e s t h a t any cow hauled w i t h i n t h i r t y days before o r a f t e r giving b i r t h t o a c a l f w i l l be accepted only a t t h e owner's r i s k . This completely ignores f a c t o r s such a s t h e condition and h e a l t h of t h e cow, the equipment and method of handling used by t h e c a r r i e r , and t h e provisions of s e c t i o n 8-813. That s e c t i o n provides f o r l i a b i l i t y on t h e p a r t of t h e c a r r i e r even if an inherent defect, for example, is present, if the carrier's ordinary negligence is the cause of the loss. It is axiomatic that a statute cannot be changed by admin- istrative regulation. State ex rel. Swart v. Casne, Mont . I 564 P.2d 983, 34 St.Rep. 394 and cases cited therein. We therefore hold that here Item 45 is invalid in that it conflicts with section 8-812. When stripped of all extraneous material, Webb's third issue is simply a challenge to the sufficiency of the evidence supporting the district court's finding of negligence on the part of the carrier. This Court has many times stated the function of the Court is to determine whether there is substantial evidence to support the findings of fact of the district court. We will not reverse such findings of fact unless there is a clear preponderance of evidence against such findings. Crncevich v. Georgetown Recrea- tion Corporation, Mont . , 541 P.2d 56, 32 St.Rep. 963; Cope v. Cope, 158 Mont. 388, 493 P.2d 336. Even where the evidence is conflicting, the judgment will not be disturbed unless there is no substantial evidence in the record to support the judgment. Strong v. Williams, 154 Mont. 65, 460 P.2d 90. Applying the foregoing principles to the relevant facts contained in the instant case, there is an abundance of substantial evidence supporting the findings. Dr. Arthur, the veterinarian who performed the post-mortem on one of the dead cows, testified: "A. * * * So based on these facts, I had reason to believe that the animal had been down in the truck or trailer or whatever, and had been obviously subjected to a considerable amount of trauma while down there, because it takes a con- siderable amount of trauma to produce hemorrhage in the lungs." This testimony together with the testimony of Brown and his wife that all three cows were covered with manure up to their backs and had large bruises on their sides would indicate that all three were down in the truck for a considerable time and were trampled on by the other cows. Further, a representative of the company which manufactured the trailers used by Webb testified that under proper load and manure removal conditions the floors of the trailers should not become so slippery that cattle would fall and become unable to regain their feet. The district court's findings of fact contained this finding : "That the Plaintiff submitted a claim for the three cows to the Defendant immediately after their death and offered to give the calves from the dead cows to the Defendant upon payment of the claim for the three cows; that the defendant never processed the claim in the manner provided by law and never advised the Plaintiff of the disposition of the claim from the time it was submitted up until the date of the trial." At the time of loss there was no statutory procedure for the proces- sing of claims against carriers by property owners who suffered losses. Webb argues that the phrase "in the manner provided by law" in the quoted finding is in error. We agree. However, we again find this to be a harmless error governed by Rule 61, M.R.Civ.P. There is no indication this rather minor error in the finding sub- stantially prejudiced Webb's rights. Webb's final contention is that the district court impro- perly calculated the damages awarded to Brown. The amount of damages allowable for the loss of personal property is the market value of the property lost, plus special costs or fees incurred in its purchase. Farris and Seneca1 v. Clark, 158 Mont. 3 3 , 487 P.2d 1307, and cases cited therein. Applying this rule to the instant case we find no error in the district court's calculation of damages. It is uncontroverted that the market value of the cow and calf pairs was $ 4 0 0 per pair. The sale commission and transportation costs of $5 and $9 respec- tively must be added to the above amount yielding a total cost of per pair of $414. This was the amount awarded per cow by the district court. Webb argues the market value of the orphaned calves must be deducted from the total cost per pair. There was no conclusive proof as to the actual market value of the three calves. The court found they had no value and we find substantial evidence to support this finding. In the absence of substantial evidence to the con- trary we refuse to disturb the finding made by the district court. Crncevich v. Georgetown Recreation Corp., supra. The judgment of the district court is affirmed. 3 Justice hJj!A $9 ~ & - h We Concur: Chief Justice

August 4, 1977

d9ed0231-d205-422b-9a1c-f0660f64a01d

BAKER NTNL INS AGENCY v MONT DEP

N/A

13608

Montana

Montana Supreme Court

N o . 13608 I N T H E SUPREME COURT O F THE STATE O F M O N T A N A B A K E R NATIONAL INSURANCE AGENCY, e t a l . , P l a i n t i f f s and A p p e l l a n t s , M O N T A N A DEPARTMENT O F REVENUE, Defendant and Respondent. Appeal from: D i s t r i c t Court o f t h e F i r s t J u d i c i a l D i s t r i c t , Honorable Gordon R. B e n n e t t , Judge p r e s i d i n g . Counsel o f Record: For A p p e l l a n t s : Towe, B a l l & E n r i g h t , B i l l i n g s , Montana N e i l E n r i g h t a r g u e d , B i l l i n g s , Montana For Respondent : R. B. McGinnis argued, Helena, Montana Submitted: September 26, 1977 Decided: N(jV 22 j g n --- , i F i l e d : '$b\' d ~ d d!] Mr. Justice Frank I. Haswell delivered the Opinion of the Court. Appellants appeal from the denial of their petition to file consolidated tax returns for the taxable year 1972. We affirm. On June 29, 1973, the Department of Revenue issued deter- mination letters on appellants Bozeman Insurance Agency, Inc., Baker National Insurance Agency, Inc., and Baker National Bank, denying them permission to consolidate for the taxable year 1972. On July 25, 1973, these appellants filed timely protests and petitioned for a re-evaluation of the determination letters. The petition was denied. On September 11, 1973, respondent issued determination let- ters on appellants Roundup Insurance Agency, Inc., Miners & Merchants Bank, Robert Agency, Inc., First Security Bank of Red Lodge and Red Lodge Insurance Agency, Inc., denying them permission to file con- solidated returns. Again, protests were timely filed and denied by respondent. Subsequently, all appellants were joined for a single appeal before the State Tax Appeal Board (STAB) on December 18, 1973. On March 19, 1974, following submission of briefs by both parties, STAB rendered its opinion and order, wherein it found appellants were not eligible to file consolidated returns because: (1) Permission was not granted by respondent pursuant to section 84-1509, R.C.M. 1947; and (2) Appellants do not qualify as a "unitary business" as defined by section 84-1509, R.C.M. 1947. Appellants' request for reconsideration by STAB was denied by an order dated May 13, 1974. Thereafter, on May 17, pursuant to the provisions of section 84-709.1, R.C.M. 1947, as amended, appel- lants petitioned the District Court of the FhstJudicial District for review of the STAB decision. The STAB decision was affirmed by the District Court on September 23, 1976. During the tax year in question, the controlling interest in all corporations involved herein was owned by one entity. The appellant corporations were engaged in the banking and insurance businesses in four Montana cities. A similar mode of operation was used in each of these cities whereby a parent-subsidiary relationship was created between the insurance agency and the bank. Each insurance agency acted as a one-bank-holding-company and owned in excess of 80 percent of the stock of its subsidiary bank. The insurance agencies provided managerial services to their respec- tive banks and charged a fee for the services rendered. Each bank owned its building and provided office space to the insurance agency through a rental agreement. The relationship of the appellant cor- porations may be set forth as follows: Tax year in Parent Company Subsidiary Lowest % of quest ion ownership (1) ( 2 ) 1968-1972 Roundup Insurance Agency Robert Agency, Inc. 100% Robert Agency Montana Nat'l Bank of Roundup ( 3 ) 91% (1969) 1970-1972 Red Lodge Ins. Agency, Inc. Mont. Nat'l Bk of Red Lodge(4) 87.3% 19 72 Bozeman Ins. Agency, Inc. Mont. Nat'l Bk of Bozeman 96.6% 1972 Baker Nat'l Ins. Agency Baker Nat'l Bk 94.4% [l] Formerly Woodbury Investment Corporation - renamed in 1969. [2] ~i~uidated in 1969 by transferring all assets to Woodbury Invest. Corp. [3] Formerly Miners & Merchants Bank. [ 4 ] Formerly First Security Bank of Red Lodge. The management fees paid by the banks to the insurance agencies were arbitrarily determined and not at arms length. Similarly, the rent paid by the insurance agencies to the banks was arbitrarily determined. The acknowledged purpose for the bank- insurance agency relationship was to provide a medium by which pro- fit and loss could be shifted between the corporations by means of the management fees and rent. Appellants sought permission from respondent to file con- s o l i d a t e d corporate l i c e n s e t a x r e t u r n s f o r each insurance agency and its subsidiary bank. Respondent took t h e p o s i t i o n a p p e l l a n t s d i d n o t q u a l i f y t o f i l e consolidated r e t u r n s pursuant t o t h e requirements of s e c t i o n 84-1509, R.C.M. 1947. Appellants appealed t o STAB and STAB held t h a t s e c t i o n 84-1509 does not g r a n t taxpayers an absolute r i g h t t o f i l e consolidated r e t u r n s , b u t r a t h e r gives respondent t h e d i s c r e t i o n - a r y a u t h o r i t y t o determine when consolidated r e t u r n s are appro- p r i a t e . STAB concluded by holding a p p e l l a n t s d i d n o t q u a l i f y a s a u n i t a r y business and, t h e r e f o r e , were n o t e l i g i b l e t o f i l e con- s o l i d a t e d r e t u r n s . Two i s s u e s are before t h i s Court on appeal: 1. Whether t h e parent-subsidiary corporations a r e con- ducting a u n i t a r y business a s defined by s e c t i o n 84-1509, R.C.M. 2. Whether respondent has t h e d i s c r e t i o n a r y a u t h o r i t y t o determine when consolidated r e t u r n s are appropriate. This case c e n t e r s around an i n t e r p r e t a t i o n of s e c t i o n 84-1509, R.C.M. 1947, which s t a t e s i n p a r t : " ( 1 ) Corporations which a r e a f f i l i a t e d may n o t f i l e a consolidated r e t u r n unless a t l e a s t e i g h t y p e r c e n t (80%) of a l l classes of stock o f each corporation involved i s owned d i r e c t l y o r i n d i r e c t l y by one (1) o r more members of t h e a f f i l i a t e d group. " ( 2 ) Corporations may not f i l e a consolidated r e t u r n unless t h e operation of t h e a f f i l i a t e d group c o n s t i t u t e s a u n i t a r y business and permis- s i o n t o f i l e a consolidated r e t u r n i s given by t h e s t a t e department of revenue. For purposes of t h i s s e c t i o n , a ' u n i t a r y business operation' means one i n which t h e business operations con- ducted by t h e corporations i n t h e a f f i l i a t e d group a r e i n t e r r e l a t e d o r interdependent t o t h e e x t e n t t h a t t h e n e t income of one corporation cannot reasonably be determined without reference t o t h e operations conducted by t h e o t h e r corpor- a t i o n s . " ( 3 ) I f t h e conditions of subsections (1) and ( 2 ) of t h i s s e c t i o n a r e m e t , t h e state department of revenue may r e q u i r e corporations t o f i l e a con- s o l i d a t e d r e t u r n when t h e department considers a consolidated r e t u r n necessary." Section 84-1509 contains three conditions that must be fulfilled prior to filing a consolidated tax return: (1) Common ownership of at least 80% of all classes of stock of each affiliated corporation; (2) A unitary business operation; and (3) Permission from the Department of Revenue to file a consolidated tax return. The record reflects appellants fulfill the 80% ownership requirement as to all the involved corporations. The crux of appellants' first issue, however, is the District Court's finding that appellants were not conducting a unitary business for the tax year in question. A test for the identification of a unitary business oper- ation is found in section 84-1509(2) wherein it is stated: " * * * a 'unitary business operation' means one in which the business operations conducted by the corporations in the affiliated group are inter- related or interdependent to the extent that the net income of one corporation cannot reasonably be determined without reference to the operations conducted by the other corporations." Substantial and convincing evidence is found in the record to support the District Court's finding that appellants were not conducting a unitary business operation for the taxable year 1972. Examples of such evidence are: (1) Mr. Les Alke, the Administrator of the Financial Division of the Department of Business Regulations of the State of Montana, testified as follows: "Q. Would you say that in the case of one of the banks in question, you could reasonably determine its net income, standing alone and separate -- just of the banking institution, itself? A. It's practically a requirement in reporting income expense and performance and solvency and what have you. We do not allow them to intermingle other business accounting or operations with the bank's records. "Q. Even if it's an insurance agency operating in the same building, they would have to keep their books and records separate? A . Absolutely. "Q. Are you familiar with Section 84-1509, R.C.M. 1947, dealing with consolidated returns? A. To some extent, yes. "Q. You have read the statute? A. Yes, I have. "Q. Would it be your opinion, based on some 20 years as a bank examiner and working in this field, that with a bank and an insurance company in this situation, you could reasonably determine the net income of the bank without reference to the operations conducted by the insurance company? A. Without a question. " (2) Harry A. Maschera, Chief Insurance Examiner for the Montana State ~uditor's Office, testified in regard to the independence of the insurance agencies' net income: "Q. Is it your opinion, as a regulation of the in- surance agencies, that a corporation which is an insurance agency and a parent holding company of a bank, is it your opinion that they would not be able to file or would not be able to determine their net income without reference to the operations of the bank? A. The insurance company would be required to determine their net income." (3) Mantz Hutchinson, Assistant Administrator of the property assessment division, Department of Revenue, who had recently completed an audit of one of the appellant banks was also called to testify. Upon questioning, Mr. Hutchinson stated in his opinion the income of the banks could be determined standing alone: "Q. In determining the net income of the bank in question, was it necessary for you to look at the activities of the insurance company located with that bank? A . No, it was not. "Q. Are you familiar with Section 84-1509, R.C.M. 1947? A. I am. "Q. Would it be your opinion after just recently conducting an audit of this corporation, that you were able to determine the net income of that cor- poration without reference to the operations con- ducted by the other corporations; namely, the insurance company? A. Yes, we were." The evidence is abundantly clear the business operations of the insurance agencies are not so interrelated or interdependent with the banks' operations that the net income of such agencies cannot reasonably be determined without reference to the banks' operations. Conversely, the banks' operations are not inter- dependent on the operations of its parent insurance agencies. We, therefore, hold the record contains substantial evidence to support the District Court's finding that appellants were not conducting a unitary business operation. Appellants' second issue is that the District Court erred by holding respondent did not abuse its discretion by denying appellants' request for permission to file a consolidated tax return. The crux of this issue i . s a determination of whether the Department of Revenue may exercise its discretion in grant- ing permission to file a consolidated tax return to an otherwise qualified unitary business, or whether it is mandatory that such permission be granted once the business meets the 80% common stock ownership test and proves its business operation is unitary in nature. The cardinal principle of statutory construction is that the intent of the legislature is controlling. Section 93-401-16, R.C.M. 1947; Montana Association of Underwriters v. State of Montana, Mont. , 563 P.2d 577, 34 St.Rep. 297 (1977); Keller v. Smith, Mont. , 553 P.2d 1002, 33 St.Rep. 828 (1976); Dunphy v . Anaconda Co., 151 Mont. 76, 438 P.2d 660 (1968), and cases cited therein. In the instant case, the plain meaning of the statute is not readily gleaned from its language. We, there- fore, resort to material supplementary to the statute in order to detern~ine legislative intent. The committee records maintained in conjunction with the consideration of and the ultimate passage of section 84-1509 clearly reveal the legislative intent of this section. The following entry, which relates to the section in- volved herein, is found in the January 23, 1969, record of the Ways and Means Committee meeting: "Howard Vralstad, Director of Income and License Tax Department spoke briefly and stated under existing law it is left entirely up to the State Board of Equalization whether to allow a corporation to file a consolidated return. This bill just makes into law the regulations the Board is now following." We, therefore, hold section 84-1509, R.C.M. 1947, is permissive rather than mandatory and respondent did not abuse its discretion in denying appellants' request for permission to file a consolidated return. Affirmed. Justice / I / Justices

November 22, 1977

393d92b0-e8b9-4af1-b2cf-938364733e83

BAUER v CHAUSSEE

N/A

13467

Montana

Montana Supreme Court

No. 13467 I N THE S U P R E M E COURT O F THE STATE O F MONTANA 1977 JOHN B. BAUER and EDNA BAUER, P l a i n t i f f s and Appellants, WILFRED CHAUSSEE and CHAUSSEE SAPPHIRE MINES, a Montana Corporation, Defendants and Respondents. Appeal from: D i s t r i c t Court of t h e Third J u d i c i a l D i s t r i c t , Honorable Edward T. Dussault, Judge presiding. Counsel of Record: For Appellant: Skelton and Knight, Missoula, Montana Robert R. Skelton argued, Missoula, Montana For Respondents: Radonich, Brolin and Reardon, Anaconda, Montana W i l l i a m A. Brolin argued, Anaconda, Montana ! 1 " q y , Filed: - Submitted: April 18, 1977 Decided: AUG 2 -- - I X V M r . Chief J u s t i c e Paul G. Hatf i e l d delivered the Opinion of the Court. This i s an appeal from an order of the d i s t r i c t court, Granite County, granting a temporary injunction restraining p l a i n t i f f s from any media advertising of t h e i r trade and ordering the removal of p l a i n t i f f s ' mobile home from defendants' land. The p a r t i e s hereto a r e related. Defendant Wilfred Chaussee i s the brother of p l a i n t i f f Edna Bauer. The p a r t i e s mutually effected an agreement i n 1971. The substance of t h a t agreement i s the subject of t h i s s u i t . Defen.dants a r e purchasing the Chaussee Sapphire Mine and adjoining land by contract. P l a i n t i f f s claim a parcel of land located a t the mine, upon which t h e i r mobile home i s located and base t h e i r claim upon defendants' alleged o r a l promises which induced p l a i n t i f f s t o move from S e a t t l e , Washington, t o Montana. Defendants deny p l a i n t i f f s ' allegations, but admit t h a t i f p l a i n t i f f s placed a permanent residence upon the premises, defendants would have a f i r s t option t o purchase t h a t residence. P l a i n t i f f s terminated t h e i r employment with defendants a t the end of the 1974 t o u r i s t season. Upon termination of the working arrangement, defendants requested, and l a t e r acquired a court order requiring p l a i n t i f f s t o remove t h e i r mobile home from the premises. I n addition t o the dispute over the parcel of land, p l a i n t i f f John Bauer became associated with a competing sapphire mine and proceeded t o advertise h i s a v a i l a b i l i t y f o r faceting and h i s disassociation with defendants' mine. Defendants petitioned the d i s t r i c t court t o enjoin t h i s advertising. A show cause hearing was held. From t h i s hearing, the d i s t r i c t court continued the temporary injunction restraining p l a i n t i f f s from any media advertising of t h e i r trade and ordered p l a i n t i f f s t o remove t h e i r mobile home from defendants ' property. P l a i n t i f f s appeal from t h a t order. The issues raised by p l a i n t i f f s are: 1. Did the d i s t r i c t court e r r i n restraining p l a i n t i f f s from advertising :their business? 2. Did the d i s t r i c t court e r r i n ordering p l a i n t i f f s t o remove t h e i r mobile home from defendants' property? The f i r s t issue r a i s e s the subject of commercial speech. Commercial speech has long been protected by the United S t a t e s Supreme Court, even though the speaker's i n t e r e s t i s largely economic. Bates v. S t a t e Bar of Arizona, No. 76-316, 45 U.S. Law Week 4895,4899 (June 27, 1977): "* * * Nonetheless, we held t h a t commercial speech of t h a t kind was e n t i t l e d t o the protection of the F i r s t Amendment. "Our analysis began * * * with the observation t h a t our cases long have protected speech even though it is i n the form of a paid advertisement * *. I n s h o r t , such speech serves individual and s o c i e t a l i n t e r e s t s i n assuring informed and r e l i a b l e decision- making. * * *." Montana's Constitution protects freedom of speech. A r t . 11, Section .,7, 1972 Montana Constitution: I1>k * * Every person s h a l l be f r e e t o speak o r publish whatever he w i l l on any subject, being responsible f o r a l l abuse of t h a t l i b e r t y . * 9~ *" The t r i a l record establishes p l a i n t i f f s made no agreement prohibiting advertising. I n addition, a contract t o r e s t r a i n trade o r business i s void except f o r two exceptions. Section 13-807, R.C.M. 1947. Contractual r e s t r a i n t of trade i s allowed when: ( I ) Good w i l l of a business i s sold, section 13-808, R.C.M. 1947; o r (2) a partnership dissolution agreement so provides, section 13-809, R.C.M. 1947. These two exceptions require s t r i c t compliance before a r e s t r i c t i o n becomes valid. Western Montana Clinic v. Jacobson, Mont . , 544 P.2d 807, 811, 33 St.Rep. 37 (1976). N o showing was made by defendants t h a t an agreement r e s t r i c t i n g advertising existed, nor t h a t p l a i n t i f f s f e l l within e i t h e r exception. Under the f a c t s the e f f e c t of the above stated authority is t o guarantee the r i g h t of p l a i n t i f f s t o advertise the avail- a b i l i t y , nature and. prices of t h e i r products and services. The temporary injunction restraining p l a i n t i f f s from exercising t h e i r r i g h t of commercial speech was error. Plaintiffs' second issue challenges t h e order requiring p l a i n t i f f s t o remove t h e i r mobile home from defendants' property. Following the show cause hearing, the d i s t r i c t court stated: "It is the opinion of the Court t h a t a t t h i s heari-ng the testimony of the p a r t i e s t o t h i s action, and p a r t i c u l a r i l y t o the testimony of the Respondents, t h a t they have not shown cause s u f f i c i e n t t o convince the Court t h a t they should continue t o occupy the property i n question with t h e i r t r a i l e r and improve- ments, which a r e additions which have been made ." I n Luppold v. Lewis, Mont . , 563 P.2d 538, 34 St.Rep. 227, 229 (1977), the Court stated: "When reviewing findings of f a c t and conclusions of law of a d i s t r i c t court, s i t t i n g without a jury, t h i s Court has repeatedly held such findings and cbnclusions w i l l not be- disturbed i f supported b3 substantial evidence and by the law. Compton v. Alcorn, Mont . , 557 P.2d 292, 33 St.Rep. 1186 (1976); Brady v. S t a t e Highway Comm'n, 163 Mont. 416, 517 P.2d 738; Timmerman v. Gabriel, 155 Mont. 294, 470 P.2d 528; Wash. Water Power Co. v. Morgan E l e c t r i c Co., 152 Mont . 126, 448 P. 2d 683. When reviewing evidence it w i l l be viewed i n the l i g h t most favorable t o the pre- v a i l i n g party i n the d i s t r i c t court, and the c r e d i b i l i t y of witnesses and the weight assigned t o t h e i r testimony i s f o r the determination of the d i s t r i c t court i n a nonjury t r i a l . Johnson v. Johnson, Mont . , 560 P.2d 1331, 34 St.Rep. 101; Hellickson v. Barrett Mobile Home Transp. 161 Mont. 455, 507 P.2d 523; Strong v. Williams, 154 Mont. 65, 460 P.2d 90; Eliason v. Eliason, 151 M0nt.409~443 P.2d 884." This Court finds substantial evidence t o support the d i s t r i c t c o u r t ' s order requiring p l a i n t i f f s t o remove t h e i r mobile home from defendants' property. Further, the d i s t r i c t court order applied only t o p l a i n t i f f s ' mobile home and was made without pre- judice f o r any claim which p l a i n t i f f s may l a t e r pursue. This cause is affirmed i n p a r t and reversed i n p a r t . It is remanded t o the d i s t r i c t court t o amend i n accord with t h i s decision. --- * \ (L Chief J u s t i c e &T/&~

August 2, 1977

da2c5652-b557-48bf-bdd7-113a6da82f28

MYSKEWITZ v BERG

N/A

13468

Montana

Montana Supreme Court

NO. 13468 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 MICHAEL b.XSKEWITZ, Plaintiff-Respondent, vs. CLAYTON BERG I Defendant-Appellant. Appeal from: District Court of the r & h Judicial District, Honorable Truman G. Bradford, Judge presiding. Counsel of Record: For Appellant: Smith & Harper, Helena, Montana Charles A. Smith argued. For Respondent : Smith, Emmons, Baillie & Walsh James R. Walsh argued Submitted: June 6, 1977 Decided : jUk 2 2 9 9 7 7 Filed: JuN 22 ! w d Honorable Leonard H. Langen, D i s t r i c t Judge, s i t t i n g i n place of M r . chief J u s t i c e Paul G. H a t f i e l d , d e l i v e r e d t h e Opinion of t h e Court. This i s an appeal from an order of t h e d i s t r i c t c o u r t , f i r s t j u d i c i a l d i s t r i c t , Lewis and Clark County, denying defen- d a n t ' s motion t o vacate t h e d i s t r i c t c o u r t order changing t h e venue of t h i s a c t i o n back t o Cascade County entered on May 2 0 , 1976. The a c t i o n seeks recovery of money a l l e g e d l y due under an o r a l c o n t r a c t . O n September 30, 1975, p l a i n t i f f ' s complaint was f i l e d i n t h e d i s t r i c t c o u r t , eighth j u d i c i a l d i s t r i c t , Cascade County, and a f t e r motion made by defendant t h e d i s t r i c t c o u r t moved t h e place of t r i a l t o Lewis and Clark County. After t h e f i l e a r r i v e d i n t h e o f f i c e of t h e c l e r k of c o u r t , L e w i s and Clark County, p l a i n t i f f moved t h e c o u r t t o r e t u r n t h e c a s e t o Cascade County and by order made and entered April 12, 1976, t h e motion was granted. The order s t a t e d : "The Motion of t h e p l a i n t i f f f o r Change of Venue having been submitted together with supporting Brief and no opposing Brief o r Memorandum having been f i l e d by defendant, and t h e same being deemed an admission by defendant t h a t p l a i n t i f f ' s Motion is meritorious, and it appearing i n any event t o t h e Court t h a t t h e Motion of p l a i n t i f f f o r Change of Venue should be allowed f o r t h e reason t h a t t h e o r i g i n a l Change of Venue t o L e w i s and Clark County was improvidently granted. "NOW, THEREFORE, I T I S ORDERED AND THIS D O E S ORDER t h a t p l a i n t i f f ' s Motion f o r Change of Venue from t h e above e n t i t l e d Court t o t h e D i s t r i c t Court of t h e Eighth J u d i c i a l D i s t r i c t i n and f o r t h e County of Cascade be and t h e same i s hereby granted." Two days a f t e r t h e April 12 o r d e r , defendant f i l e d h i s motion t o vacate t h e April 1 2 order. The motion was set f o r hearing f o r April 27, 1976, but a t t h e request of t h e movant t h e April 27, 1976, hearing d a t e was vacated without d a t e . F i n a l l y on May 21, 1976, t h e Lewis and Clark Court f i l e d i t s order s t a t i n g t h a t t h e motion of defendant t o vacate t h e order changing venue is denied and on May 25, 1976, t h e f i l e was returned t o t h e c l e r k of c o u r t , e i g h t h j u d i c i a l d i s t r i c t , Cascade County. Thereafter and on June 16, 1976, a Cascade County d i s t r i c t judge was d i s q u a l i f i e d and another judge assumed j u r i s d i c t i o n . O n June 2 1 , 1976, p l a i n t i f f f i l e d and served h i s n o t i c e of readi- ness f o r t r i a l . Three days l a t e r , on June 24, 1976, defendant f i l e d h i s n o t i c e of appeal which s t a t e s : "Notice i s hereby given t h a t C L A Y T O N BERG, Defen- dant above-named, hereby appeals t o t h e Supreme Court of t h e S t a t e of Montana from t h e order of t h e D i s t r i c t Court of t h e F i r s t J u d i c i a l D i s t r i c t i n and f o r t h e County of Lewis and Clark denying Defendant's Motion t o vacate t h e D i s t r i c t Court order changing venue of t h i s a c t i o n back t o C a s - cade County entered herein on t h e 20th day of May, 1976." W e f i n d t h a t defendant's appeal should be dismissed f o r t h e reason t h a t t h e order t o vacate i s not an appealable o r d e r and, i f it w e r e t o be t r e a t e d a s an appeal from t h e order dated April 12, changing t h e place of t r i a l t o Cascade County, t h e appeal should be dismissed f o r t h e reason t h a t it was not timely made. Rule 5, M.R.App.Civ.P., provides: "The t i m e within which an appeal from a judgment o r an order must be taken s h a l l be 30 days from t h e e n t r y t h e r e o f , except t h a t i n cases where s e r v i c e of n o t i c e of e n t r y of judgment i s required by Rule 77(d) of t h e Montana Rules of C i v i l Pro- cedure t h e t i m e s h a l l be 30 days from t h e s e r v i c e of n o t i c e of e n t r y of judgment * * *." Rule 7 7 ( d ) , M.R.Civ.P. r e q u i r e s t h a t upon e n t r y of an order t h e Clerk s h a l l serve a n o t i c e of t h e e n t r y by mail upon each p a r t y who is not i n d e f a u l t and s h a l l make a note i n t h e docket of t h e mailing. W e could f i n d no e n t r y t h a t t h e April 12 order f o r change of venue was served pursuant t o Rule 7 7 ( d ) . However t h e f i l e does show t h a t defendant f i l e d h i s motion t o vacate t h e A p r i l 1 2 order on April 14, 1976. Therefore we hold that in order for defendant to have made a timely appeal, his notice of appeal should have been filed on or before May 14, 1976. Rule 5, M.R.App.Civ.P., also provides for certain in- stances where the running of the time for filing a notice of appeal is suspended. However we are unable to find that de- fendant's situation comes within any of these exceptions. Rule 5 also permits the district court to extend the time for filing of notice of appeal upon a showing of excusable neglect. However, by the time defendant got around to filing his notice of appeal in this case, the time for this relief had expired. Rule 1, M.R.App.Civ.P., specifies from what judgment or order an appeal may be taken. The rule specifically allows an appeal from an order changing or refusing to change the place of trial when the county designated in the complaint is not the proper county, but we find nothing in Rule 1 which permits an appeal from an order denying a motion to vacate an order changing venue. Defendant raised other issues in his brief and during his oral argument. Since the appeal is being dismissed for the reasons stated, these issues are not being discussed. Judgment affirmed. ------------- ---- Hon. Leonard H. Langen, district' judge, sitting in place of Mr. Chief Justice Paul G. Hatfield.

June 22, 1977

cf834709-0535-42ae-a9bb-2018ba22b0f6

MASSEY-FERGUSON CREDIT CORP v BRO

N/A

13506

Montana

Montana Supreme Court

No. 13506 I N T H E SUPREME COURT O F THE STATE O F MONTANA 1977 MASSEY-FERGUSON CREDIT CORPORATION, a c o r p o r a t i o n , P l a i n t i f f and Appellant, -vs- B R U C E BROWN, Defendant and Respondent. Appeal from: D i s t r i c t Court o f t h e Tenth J u d i c i a l , Honorable LeRoy L. McKinnon, Judge p r e s i d i n g . Counsel of Record: For Appellant: Leonard H. McKinney argued, Lewistown, Montana For Respondent : James Wilkins argued, Lewistown, Montana Submitted: May 26, 1977 ~ e c i d e d : JUL e g Jut z 9 1 m , F i l e d : Mr. Chief Justice Paul G. Hatfield delivered the Opinion of the Court. This is an appeal from an order of the district court, Fergus County, awarding defendant his counterclaim of $2,450 and costs of $279.85. Defendant Bruce Brown is a local farmer and rancher in the Lewistown, Montana area. Plaintiff Massey-Ferguson Credit Corporation (M-F) is the assignee of the former Dan Morrison & Sons, a now defunct Massey-Ferguson implement dealer in the city of Lewistown. The original district court action was brought by M-F against Bruce Brown for a deficiency judgment. Brown answered and counterclaimed for the price of a combine which plaintiff's assignor, Dan Morrison & Sons, had taken as a trade-in. The district court found for M-F. Defendant appealed. This Court reversed and remanded for consideration of Brown's counterclaim. Massey-Ferguson Credit Corporation v. Brown, Mont . , 547 P.2d 846, 33 St.Rep. 314 (1976). On remand the district court entered judgment for Brown in the amount of $2,450 with interest from August 8, 1972, and for costs in the sum of $279.85. After denying the motion for new trial and to amend findings of fact and conclusions of law, the district court cited Brown saying M-F cannot be considered among those whose protection is contemplated by section 87A-9-206(1), R.C.M. 1947. M-F ap- peals from this decision on remand. The findings of fact by the district court show: "1. That defendant traded in to Dan Morrison & Sons an International 141 combine valued at $2,450.00 on a secondhand New Holland 990 combine valued at $7,700.00 as evidenced by a retail installment con- tract dated October 1, 1970. "2. That Dan Morrison & Sons concurrently assigned the contract to plaintiff, Massey-Ferguson Credit Corporation. "3. That Dale K o c ~ , Massey-Ferguson's Credit Corporation representative, made certain rep- resentations to the defendant concerning the combine, and signed the contract as witness, giving the plaintiff knowledge of the claims and defenses which might arise from the con- tract. "4. That plaintiff and its assignor failed to perform the required repair work on the New Holland 990 combine and thereafter on the 8th day of August, 1972, took possession of the combine and thereby repudiated the contract. "5. That defendant did not recover his trade-in combine valued at $2,450.00, nor that sum of money. " The question on appeal is whether Brown is entitled to receive from M-F the value of the trade-in over and above being absolved from making any payments on the contract. The parties to this appeal are bound by the law of the case as determined on prior appeal. OtBrien v. Great Northern R . Co., 148 Mont. 429, 421 P.2d 710. In Brown, 547 P.2d 849, this Court stated: "In our view, respondent Massey-Ferguson Credit Corporation cannot be considered among those whose protection is contemplated by section 87A-9-206(1). The evidence shows that respon- dent's representative participated, at least to some degree, in making the sale by orally affirming the seller's promises to appellant buyer. It is clear from the exhibits that the contract was executed and assigned at about the same time and upon the same instrument, and the blank form sales contract employed was in this case furnished by respondent corporation. Under these circumstances, it has been held the assignee does not take the assignment 'without notice of a claim or defense' and is therefore not entitled to the enforcement pro- tection provided by section 87A-9-206(1), R.C.M. 1947." Since the defense of section 87A-9-206(1) is not applicable to M-F, the remaining question to be determined is to what extent an assignee is liable to the buyer for claims against the assignor. 3 U.L.A.-U.C.C. S9-318(1) incorporates the general rule that an assignee of contract rights stands in the shoes of the assignor and has no greater rights against the account debtor than the assignor. The assignee is also subject to all the equities and defenses which could have been raised by the debtor against the assignor. Farmers Acceptance Corporation v. DeLozier, 178 Colo. 291, 496 P.2d 1016, 1018. See also the official comment to section 9-318(1) which states that no sub- stantial changes are made to prior law. Uniform Laws Annotated, Volume 3, 9-318. Section 87A-9-318(1) is Montana's incorpor- ation of this section. Section 87A-9-318(1) provides that the rights of an assignee. of contract rights. are subject to all terms of the contract between the account debtor and assignor, and any defense or claim arising therefrom. The term "claim" includes set-offs and counterclaims. See DeLozier, 496 P.2d 1018, where the Colorado Supreme Court, while interpreting a like statute, concluded that "claim" includes set-offs and counter- claims. See also Hudson Supply & Equipment Co. v. Home Factors 1 A t u - - 4 - - e , Corp.,/210 A.2d 837 (D.Ct.App. 1965). By virtue of the assignment, M-F was subject to the same defenses and claims of Brown as would be the assignor, Dan Morrison & Sons. This Court in Brown determined that the seller breached its oral contract to Brown, and that this defense could be applied against the assignee M-F. M-F's rights under this assignment of the sales contract are subject to claims arising out of the sales contract. Plaintiff alleges that he is not liable for the defen- dant's counterclaim since the transaction, where the assignor accepted the trade-in, arose between defendant and Dan Morrison & Sons. Plaintiff cites DeLozier as a correct pronouncement on the law. In DeLozier, the plaintiff, Farmers Acceptance Cor- poration (FAC), accepted assignment of the right to monies under the assignor's contract with DeLozier. When the assignor failed to perform DeLozier cancelled the contract and sued FAC for the assignor's indebtedness arising out of the contract. The Colorado Court resolved this question of claims arising out of the contract according to the Uniform Commercial Code, 496 P.2d at " * * * Consequently, FAC was not entitled to any payments which were made pursuant to the underlying contract and which were conditioned upon performance. "FAC was not, however, obligated to perform the contract upon Diviney's failure to perform. Neither was FAC liable for Diviney's indebted- ness to DeLozier arising out of the contract. The reason is that an assignee of contract rights is not subject to the contract or tort liabilities imposed by the contract on the assignor, in the absence of an assumption of such liabilities. C.R.S. 1963, 155-9-317; 6 Am.Jur.2d Assignments S109. "In instances such as this, where the assignee obtains money which the assignor could only retain upon performance of a contract, the following rule applies: '[Wlhere the assignor fails to perform the contract, the assignee cannot retain mistaken, or even negligent, payments made to it by the [debtor] unless there has been a subsequent change of position by the assignee.bilmore, The Assignee of Contract Rights and His Precarious Security, 74 Yale L.J. 217, 235, n. 35 (1964-65); see Firestone Tire & Rubber Co. v. Central Nat'l Bank, 159 Ohio St. 423, 112 N.E.2d 636 (1953). See also, Westing v. Marlatt, 124 Colo. 355, 238 P.2d 193 (1951) ." See corresponding Montana sections 87A-9-318(1), 87A-9-317. While this Court agrees with the general law cited by the Colorado Court, the case in question is factually distin- guishable. In DeLozier the assignee, FAC, did not have a close relationship, nor participate in the transaction with Howard DeLozier. The only contact FAC had with DeLozier came from the assignment of the assignor's right to monies under the contract between DeLozier and the assignor. In Brown, M-F's representative participated in making the sale by orally affirm- ing the seller's promises to defendant; the contract was exe- cuted and assigned concurrently to M-F; the blank form sales contract employed was furnished by M-F. The Colorado Court denied the assignee a payment that the debtor had made to it, but the Court did not order the assignee to make additional payments due to debtor from the assignor after all set-offs had been made, nor to perform the contract as the assignor was obligated to. Under section 87A-9-317, R.C.M. 1947, this Court agrees with Colorado. In the case at bar the close re- lationship and participation between the assignor and assignee requires a departure from the general rule of law. Under certain circumstances an assignee has been held to have impliedly assumed the contractual obligations of the assignor. In Northern Pac. Ry. Co. v. Sunnyside Valley Irr. Dist., 11 Wash.App. 948, 527 P.2d 693, 694, the Washington Court considered all facts pertaining to the conduct of the assignee: " * * * While there is no express assumption of the underlying agreement, a consideration of all the facts compels the inference that the defen- dant assumed the conditions of the permit. McGill v . Baker, 147 Wash. 394, 266 P. 138 (1928). * * * The defendant argued that it had not assumed any of the duties of the dissolved corporation and that it was not an assignee under the contracts containing the indemnity agreements. In answer, the court stated: "A third person may, of course, assume the obli- gation expressly in writing, or he may do so by implication where his conduct manifests an intent to become bound * * *.In the latter event all the circumstances must be considered, such as the sub- ject matter of the contract, the third person's acts and words, whether he acquiesced in the terms of the contract, performed its obligations, or accepted its benefits." In Thompson v. Lincoln Ins. Co., 114 Mont. 521, 530, 138 P.2d 951, this Court reached the same conclusion: "The dissent perforce admits the undeniable rule that the assignment of a contract does not ordinarily operate to cast the contract liabilities upon the assignee in the absence of an assumption thereof by him. The dissent further says, what is obvious, that the assignee may assume the assignor's liabilities, that under certain circumstances and conduct the law will imply such assumption, and that he may not enforce the contract without performing its terms. * * *" The facts and circumstances surrounding M-F's acceptance of Brown's contract put M-F in the position of more than a mere assignee accepting rights to monies under a sales contract. The ability of a court to consider all facts and circum- stances is given support by the Kentucky court in Massey- Ferguson v. Utley, (Ky. 1969), 439 S.W.2d 57, 59: "However, Massey-Ferguson maintains that a breach of any implied warranty made by the dealer cannot be asserted against Massey- Ferguson as assignee of the sales contract * * *. "In a substantial number of cases, annotated in 44 ALR2d 8 @ 157 to 161, it was held that a manufacturer to whom a dealer had assigned commercial paper was not a holder in due course. As indicated in the annotation, it appears that in most of the cases the circumstances were held to warrant a conclusion that the manufacturer was the real vendor in the trans- action. The circumstances most frequently held to be significant were (1) a manufacturer's representative assisted or participated in the sale by the dealer, and (2) the manufacturer's course of dealing was for it to furnish blank sales contracts to its dealer, and for the dealer to immediately and routinely assign the contract to the manufacturer as soon as a sale was made. "In the instant case the evidence was that a factory representative visited Utley with the dealer and participated in making the sale. Also, that Massey-Ferguson followed the course of dealing above described as to supplying blank forms and receiving immediate and routine assignments. So we have present here the two circumstances most frequently relied upon by other courts as a basis for holding the manu- facturer-assignee not to be a holder in due course. "It is our opinion that under the circumstances of this case Massey-Ferguson cannot be considered to be within the class of those who are protected by the covenant against assertion of defenses, at least as to the defense of breach of an implied warranty of fitness. We base our conclusion on the proposition that Massey-Ferguson's conduct put it in the status of a 'seller' and that its status as a 'seller' outweighs its status as an 'assignee,' as those terms are used in KRS 355.9- 206 and were used in the contract. It should not be accorded the protection of an assignee against defenses that derived from its actions as a seller." Utley was cited by this Court in Brown, 547 P.2d at 850. The facts of this case in question are similar to Utley. M-F's representative participated in the sale, M-F furnished the blank sales contract, and M-F received the concurrently executed and assigned contract. Based on Sunnyside Valley Irr. Dist. and Utley, the district court, in looking at the facts and circum- stances of the transaction, did conclude that M-F was acting as more than a mere assignee and impliedly accepted the obliga- tions of its assignor. The plaintiff looks to the pre-code situations in Montana for support to limit his liability. Apple v. Edwards, et al., 92 Mont. 524, 16 P.2d 700. Apple, as discussed in 87 A.L.R. 179, shows that in an action by an assignee of a conditional sales contract, the breach of the contract, occurring after assignment and notice thereof, might be shown by way of recoupment. The account debtor's right to claim damages existed at the time the contract was made and continued as a defense against the assignee. Apple is factually distinguishable in the same manner as was DeLozier. No close relationship nor participation between the assignor and the assignee was present. The false and fraud- ulent representations relied on by defendant for rescission of the contract arose during dealings with the assignor. The facts show that when defendant became aware of the falsity of the assignor's representations, he also learned of the assignment to plaintiff. Plaintiff had not participated in the formation of the contract between the assignor and defendant, nor was any close relationship shown between plaintiff and the assignor. In the case at bar, the close relationship and partici- pation between the assignor and assignee put M-F on notice of the claims which might arise. Due to this knowledge and partici- pation, M-F was vulnerable to defendant's counterclaim. This Court is confronted with a situation similar to that faced by the Supreme Court of Texas. Dallas Farm Machinery Company v. Reaves, 158 Tex. 1, 307 S.W.2d 233. The facts are similar, except that in Reaves, the plaintiff was the implement seller suing on the installment sales contract. M-F and Dallas Farm Machinery Company are similar in that, according to the criteria of Utley, M-F is more a seller than an assignee and from Brown, M-F is without the protection of section 87A-9-206(1). In Reaves the Texas Supreme Court allowed the defendant to recover the value of the trade-in tractor and rescinded the contract due to plaintiff's fraudulent representations and induce- ment. Reaves, though a pre-code Texas case, is relied on today for authority. See Robert v. Sumerour (Tex. 1976) 543 S.W.2d 890; Johnson v. Buck (Tex. 1976) 540 S.W.2d 393. Plaintiff also submits that the counterclaim is not a proper claim against M-F and that there is no basis to afford Brown relief. This claim is without merit. Plaintiff is an assignee. An assignee stands in the shoes of the assignor and is liable for the claims arising out of the contract. Under these particular facts, M-F is more than a mere assignee. The Court agrees with the handling of the claim against the assignee in DeLozier. Section 87A-9-317 would control in the normal case. As has been established, this case requires an exception to the general rule as a result of M-F's representative orally affirming the seller's promises and participating in the sale. Had M-F not taken the assignment under these circumstances, participation in the sale and knowledge of the seller's obliga- tions, the assignee would not be obligated to perform the contract upon the assignor's failure to perform, nor liable for the assignor's indebtedness arising out of the contract. Had M-F not taken the assignment under these circumstances, section 87A- 9-317 would have applied. Brown's recourse would have then been against the assignor for the indebtedness arising out of the contract. This was not the case. The judgment of the district court is affirmed. The defendant may recover from M-F the value of the trade-in over and above being absolved from making any payment on the contract. ---- -7 Chief Justice C

July 29, 1977

30cf1477-258f-4ebe-bc13-9e2e95dc20b9

PHILLIPS v MONT EDUCATION ASSN

N/A

13685

Montana

Montana Supreme Court

No. 13685 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 LARRY L . PHILLIPS, Plaint iff and Appellant, THE MONTANA EDUCATION ASSOCIATION, a non-profit corporation, et al., Defendants and Respondents. Appeal from: District Court of the First Judicial District, Honorable Peter G. Meloy, Judge presiding. Counsel of Record: For Appellant: McKittrick & Duffy, Great Falls, Montana Carroll Blend argued, Great Falls, Montana For Respondents: Jardine, Stevenson, Blewett & Weaver, Great Falls, Montana Hilley & Loring, Great Falls, Montana Alexander Blewett 111, argued, Great Falls, Montana Submitted: June 8, 1977 Decided: JUN 2 2 l g n Filed: JU( 2 2 1 9 7 7 Clerk. M r . Justice Gene B. Daly delivered the Opinion of the Court. Plaintiff Larry L. Phillips brought t h i s action i n the d i s t r i c t court against defendant Montana Education Association, a non-profit corporation, e t al., t o recover damages f o r termina- tion of h i s contract of employment a s executive secretary of defendant association. The d i s t r i c t court granted a motion t o strike a portion of Count V of the complaint relating t o attorney fees, and also t o s t r i k e Paragraph 8 of Count 11, seeking exemplary damages. Plaintiff appealed t h i s order of the d i s t r i c t court. Defendant association (MEA) f i l e d a motion with t h i s Court t o dismiss p l a i n t i f f ' s appeal a s the order appealed from is not an appealable order under Rule No. 1, MoR0App.Ci~.P. Briefs were f i l e d and o r a l arguments had on Wednesday, June 8, 1977. The Court took the matter under advisement. Rule No. 1, M.R.App.CSv.P., provides i n pertinent part: "Rule 1. Scope of rules--From what judgment o r order an appeal may be taken. "These rules govern procedure i n appeals i n c i v i l cases t o the supreme court of Montana from Montana d i s t r i c t courts and original proceedings i n the supreme court of Montana. The party applying for original relief is known as the petitioner and the adverse party a s the defendant. The party appealing is known a s the appellant, and the adverse party a s the respondent. "A party aggrieved may appeal from a judgment or order, except when expressly made f i n a l by law, i n the following cases: "(a) From a f i n a l judgment entered i n an action or special proceeding commenced i n a d i s t r i c t court, o r brought into a d i s t r i c t court from another court o r administrative body.'' (Emphasis added.) I n light of t h i s rule, the question becomes whether or not an order granting a motion to strike certain portions of a p l a i n t i f f ' s complaint is a "final judgment" and hence appealable. This question was answered i n the negative by this Court i n two separate decisions. 1 ) ' I n State ex rel. Great Falls National Bank v. District Court, 154 Mont. 336, 340, 463 P.2d 326, t h i s Court i n reference to an order of the d i s t r i c t court striking material from the pleadings, stated: "The f i r s t issue involves procedural matters * * *. (1) the order striking two defenses from i t s answer, viz. plaintiff's own acts and omissions were the sole proximate cause of the accident, and (2) the order granting plaintiff summary judgment on the issue of liability. These orders are not directly appealable, neither being denominated an appealable order i n Rule 1, M.R.App.Civ.P., presumably because each is interlocutory i n character and reviewable on appeal from final iudg- ment .'I (Emphasis added. ) 2) In Campanella v. Bouma, 164 Mont. 214, 227, 229, 520 P.2d 1073, t h i s Court, i n determining the Assue of appealability of an order granting a motion to strike, said: "* * * Essentially a single issue is determina- tive of the appeal. That i s whether an order such a s t h i s striking portions of a pleading a s being frivolous, impertinent and immaterial is appealable. " W e hold that it i s not. "* * * A n order striking such matters i s not appealable prior to final judgment .I' The motion of defendant MEA to dismiss t h i s appeal is granted and the cause ordered remanded to the d i s t r i c t court for further 9 proceedings. W e Concur: Mr. Chief Justice Paul G . Hatfield deeming himself dis- qualified, did not participate in this Opinion

June 22, 1977

873b52df-868a-40d8-85dd-26200a0a5b06

MONT DEPT OF REVENUE v ASARCO

N/A

13249

Montana

Montana Supreme Court

No. 13249 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 MONTANA DEPARTMENT OF REVENUE, STATE OF MONTANA, Petitioner and Appellant, THE AMERICAN SMELTING AND REFINING COMPANY, Defendant and Respondent. Appeal from: District Court of the First Judicial District, Honorable Peter Meloy, Judge presiding. Counsel of Record: For Appellant: Terry B. Cosgrove argued, Helena, Montana Theodore W. $.e~ooze argued, Salem, Oregon For Respondent: Hughes, Bennett and Cain, Helena, Montana George T. Bennett argued, Helena, Montana Charles Smith, Helena, Montana For Amicus Curiae: William D. Dexter appeared, Olympia, Washington Submitted: January 27, 1977 Decided : 'mL 1 - 1 1 9 7 7 Filed JUL 1 9 1972. Mr. Chief Justice Paul G. H a t f i e l d delivered the Opinion o f the Court. This i s an appeal by the Montana Department o f Revenue (DOR) from a judgment entered i n the d i s t r i c t court, Lewis and Clark County, a f f i r m - i ng a f i n a l decision o f the State Tax Appeal Board (STAB). The STAB decision ordered a recomputation o f the deficiency assessment l e v i e d by DOR against American Smel t i n g and Refining Company (ASARCO) . I n 1972 the auditors o f the Mu1 t i s t a t e Tax Commission conducted an audit o f ASARCO's records f o r the tax years 1967-1970. Subsequent t o t h i s audit, additional corporation license taxes were assessed against ASARCO by DOR. The amount o f t h i s deficiency assessment i s the underlying issue upon appeal . ASARCO i s a New Jersey corporation engaged i n national and i n t e r - national operations i n the business o f mining, smelting, refining, manu- facturing, buying and s e l l i n g nonferrous metals and minerals. ASARCO b a s i c a l l y engages i n two separate, but r e l a t e d areas o f operation. The f i r s t i s a primary metal operation consisting o f the mining, m i l l i n g , smelt- ing and r e f i n i n g o f nonferrous metals. The second i s a nonferrous a1 l o y operation consisting o f the manufacture and sale o f a l l o y products. For the tax years i n question ASARCO owned mines i n Colorado, Washington, Arizona, New Mexico and Idaho i n addition t o mines i n Canada and other foreign countries. It operated smelters and r e f i n e r i e s i n Texas, Maryland, Colorado, Montana, Missouri, Arizona, Nebraska, New Jersey, Wash- ington and California f o r the years i n question. A l l o y manufacturing plants were located i n Texas, New Jersey, California, Oklahoma and Indiana. ASARCO sales o f f i c e s were located i n New York, Baltimore, Boston, Cincinnati, Cleveland, Detroit, Milwaukee, Philadelphia, Rochester and S t . Louis. ASARCO owns and operates a smelter i n East Helena which i s i t s prin- c i p a l operation i n Montana. This smelter receives lead ores and concentrates from company mines as well as unrelated suppliers. The smelted, but un- refined lead product i s then shipped t o other u n i t s o f ASARCO f o r f u r t h e r treatment and eventual sale. Anaconda Company purchased various by-products of the East Helena smelter for the years in question. In addition to the East Helena smelter A S A R C O owns certain active and inactive mining properties i n Montana. Prior to 1962 A S A R C O reported i t s income from i t s Montana properties by separate accounting, pursuant to section 84-1503, R.C.M. 1947. Under that method A S A R C O determined the gross receipts from i t s Montana properties and deducted all expenses incurred by or attributable to such properties to arrive a t Montana income. Where overhead expenses such as the cost of trans- portation were attributable to more than one state, they were apportioned to determine the Montana portion. In 1962 ASARCO recognized that i t s business was unitary in nature and i t could no longer use separate accounting for i t s income. Pursuant to section 84-1503 i t requested permission from DOR to change from separate accounting to the unitary method of accounting. Permission was granted by DOR and a "hybrid" system of reporting income was instituted. Under this hybrid system, a l l b u t a negligible amount of total company income from rents, royalties, dividends, interest and sales of tangible and intangible properties was allocated to sources outside Montana. After deductions for the allocated income, ASARCO's operating net income was apportioned to Montana sources by the use of a three factor formula. An in-depth examination of ASARCO's hybrid system indicates the fol lowing procedure was used to compute tax 1 iabil i t y for the years i n question. A S A R C O classified the income listed below as nonbusiness income under DORIS 1967 regulations, deducted i t from i t s apportionable income, and allocated i t as indicated: (a) Income from mine royal t i e s paid by the lessees of ASARCO's Keystone Mine previously operated by A S A R C O and located in the State of Colo- rado was allocated to the State of Colorado; (b) Income from patents and copyrights on items developed by ASARCO's research department and used i n ASARCO's operations and licensed to others, was a1 located to commercial domici 1 e; (c) Income from rental o f housing u n i t s on mining properties and rented t o employes was allocated t o the state where such rental u n i t s are 1 ocated : (d) Interest income from United States obl igations , customers notes and bonds, notes on the sale o f a plant and General Cable stock, from state and municipal bonds, time c e r t i f i c a t e s , bankers acceptances, and commercial paper was allocated t o the state o f commercial domicile; (e) Gains from the sales o f tangible properties were allocated t o the state o f sale; ( f ) Dividends paid on stocks were allocated t o state o f commercial domicile; (g) Gains from the sale o f stock were allocated t o the state o f commercial domicile; and (h) Income from securities deposited w i t h Montana state agencies and from money deposited i n Montana was allocated t o Montana. The percentage o f apportionable income o r loss a t t r i b u t a b l e t o Montana sources was calculated by the use o f t h i s formula: Montana property + Montana Payroll + Montana Sales Total ASARCO Total ASARCO Total ASARCO Property Payroll Sales - - % Averaged by d i v i d i n g by 3 The percentage obtained was then m u l t i p l i e d by ASARCO's t o t a l apportionable income t o determine the Montana contribution. DOR contends the hybrid system used by ASARCO t o calculate i t s Montana income i n c o r r e c t l y interpreted section 84-1503, R.C.M. 1947. That section a t the time i n question, stated: "If the income o f any corporation from sources w i t h i n the state cannot be properly segregated from income without the state, then, i n t h a t event, the amount o f the net i n - come returned shall be t h a t proportion o f the taxpayer's t o t a l net income which the taxpayer's gross business done i n the state o f Montana bears t o the t o t a l gross business o f the taxpayer, and apportionment shall be made under the r u l e s and regulations prescribed by the state board o f equal ization, giving consideration t o sales, property and payroll and such other factors as may be deemed appli- cable; provided, however, t h a t the state board o f equal- i z a t i o n shall , upon the presentation o f satisfactory evidence, determine t h a t the income from sources w i t h i n the state o f Montana may be properly segregated from income from sources without the state o f Montana and shall allow separate accounting. The board shall pub- l i s h not less than once a year, a l l rules and regulations pertaining t o t h i s section. A l l decisions by the board under t h i s section shall be subject t o j u d i c i a l review i n an action prosecuted by the corporation i n the dis- t r i c t court o f Lewis and Clark county. The taxpayer cannot change from one method o f accounting t o another method o f accounting without f i r s t obtaining permission from the board. " DOR interprets the above statute as creating only two methods o f determining income from sources w i t h i n Montana--separate accounting o r apportionment o f t o t a l net income. Separate accounting i s available only i f income from sources w i t h i n the state may be segregated from sources without the state. I n the absence o f the above conditions, t o t a l business net income must be apportioned. D O R determined t h a t the income c l a s s i f i e d by ASARCO as nonbusiness income was, i n fact, business income as defined by DOR's 1967 regulations. DOR therefore restored t h i s income bapportionable net income. I n addition, DOR included i n apportionable net income the net income o f s i x o f ASARCO's wholly owned subsidiaries. DOR contends t h a t ASARCO and the s i x subsidiary corporations were engaged i n a u n i t a r y business and therefore the combina- t i o n was merely an extension o f the apportionment method o f taxation dic- tated by section 84-1503. Pursuant t o DOR's calculations o f ASARCO's Montana income additional corporate license taxes were assessed. Protest was made by ASARCO and a hear- i n g was held before the d i r e c t o r o f DOR. The d i r e c t o r ' s decision affirmed the deficiency assessment. Thereafter ASARCO appealed t o STAB which re- versed the d i r e c t o r ' s decision. D O R then petitioned the d i s t r i c t court, Lewis and Clark County, requesting a review o f the STAB order. O n December 17, 1975, the d i s t r i c t court entered judgment a f f i r m i n g the decision o f STAB. DOR appeals the d i s t r i c t court judgment. Three issues are before the Court upon appeal: 1) Whether DOR had the authority, pursuant t o sections 84-1503 and 84-1508, R.C.M. 1947, t o adopt i t s Regulations 1001-1020 (Chapter 10) concerning rules for the apportionment of corporate net income? 2) Whether ASARCO was correct in its deduction of a1 leged non- business income from apportionable net income prior to apportionment? 3) Whether the income from six of ASARCO's wholly owned subsi- aries was properly included in apportionable net income? On December 30, 1966, DOR adopted its Regulations 1001-1020 (Chapter 1 0 ) . These regulations were effective with respect to tax years beginning on and after January 1 , 1967. Included within these regulations are specific rules for allocation and apportionment of corporate income derived from sources both within and without Montana. In addition key terms are specifically defined as to their application to the regulations. The regulations provide for two methods of accounting for income; apportionment according to a three-factor formula and separate accounting. Separate accounting is allowed only in situations where income can be specifically segregated as to source.Apportionment of income must be used in all other cases. The apportionment system adopts what may be categorized as a "business vs. nonbusiness" test in regard to determining what income is apportioned and what income may be allocated to source. Under this system all business income is apportioned by use of the three-factor formula while only nonbusiness income may be allocated to source. Business income is defined as all income arising from transactions and activity in the regular course of the taxpayer's trade or business and includes income from tangible and intangible property if the acquisition, management and disposition of the property constitute integral parts of the taxpayer's regular trade or bus- iness operations. Nonbusiness income is defined as all income other than business income. ASARCO urges these regulations were ineffective as applied to it for the tax years 1967-1970 for two reasons: 1. DOR by virtue of section 84-1503 had the authority to adopt rules and regulations only as to the apportionment of such income as could not be segregated as to source. 2 . The regulations adopt a "business vs. nonbusiness" income test - 6 - rather than the "source" o f income t e s t found i n section 84-1503 and are therefore f a t a l l y inconsistent. Any contention t h a t DOR lacks the a u t h o r i t y t o adopt r u l e s and regulations i n t e r p r e t i n g taxation statutes i s without merit. I n regard t o the s t a t u t e i n question, the power t o adopt r u l e s and regulations i s c l e a r l y and unambiguously stated w i t h i n the t e x t o f the statute. Furthermore section 84-1508, R.C.M. 1947, gives DOR power t o provide "such other regu- l a t i o n s as may from time t o time be found necessary." W e affirmed t h i s p r i n c i p l e i n State ex r e l . Fulton v. D i s t r i c t Court, 139 Mont. 573, 366 P.2d 435. The crux o f t h i s e n t i r e case i s the i n t e r p r e t a t i o n o f section 84-1503 and DOR Regulations 1001-1020. There i s no m e r i t i n ASARCO's con- t e n t i o n t h a t DOR has only a u t h o r i t y t o adopt r u l e s and regulations f o r the apportionment o f income incapable o f segregation as t o source. The function o f the Supreme Court when construing a s t a t u t e i s simply t o ascertain and declare what i s i n substance stated therein, and not t o i n s e r t what has been omitted o r t o omit what has been inserted. Dunphy v. Anaconda Co., 151 Mont. 76, 438 P.2d 660; I n r e Transportation o f School Children, 117 Mont. 618, 161 P.2d 901 ; Section 93-401-15, R.C.M. 1947. The fundamental r u l e o f statutory construction i s t h a t the i n t e n t o f the l e g i s - l a t u r e controls. Matter o f Senate B i l l No. 23, Chapter 491, Montana Session Laws o f 1973, 168 Mont. 102, 540 P.2d 975, 32 St.Rep. 954; Hammill v. Young, 168 Mont. 81, 540 P.2d 971, 32 St.Rep. 935; Dunphy v. Anaconda Co., supra; Section 93-401-16, R.C.M. 1947. Where the i n t e n t o f the l e g i s l a t u r e can be determined from the p l a i n meaning o f the words used, the courts may not go further and apply any other means o f interpretation. State ex r e l . Huffman v. D i s t r i c t Court, 154 Mont. 201, 461 P.2d 847; Dunphy v. Anaconda Co., supra. Here, the p l a i n meaning o f the words used by the l e g i s l a t u r e unmistakably discloses i t s intent. DOR c l e a r l y has the a u t h o r i t y t o adopt r u l e s and reg- ulations as t o the apportionment o f corporate income without regard t o source. There also i s no m e r i t i n ASARCO's second contention. ASARCO argues that section 84-1503 contains a "source of income" test to be used in determining apportionable income vs. allocatable income. ASARCO concludes that this apparent conflict with the business vs. nonbusiness income test found in the regulations makes the regulations ineffective as applied to ASARCO. As support for its theory of inconsistency between the statute and the regulations, ASARCO points out that section 84-1503 was amended in 1974, and the amended statute conforms to the regulations. In the construction of an amendatory act it will be presumed that the legislature, in passing it, intended to make some change in the existing law, and therefore the Court should endeavor to give effect to the amendment. Pilgeram v. Hass et al., 1 1 8 Mont. 431, 167 P.2d 339; Nichols v. School District No. 3, 87 Mont. 181, 287 P.624. However this presumption of change is not conclusive. This Court stated in School Dis- trict No. 12 v. Pondera County, 89 Mont. 342, 297 P. 498, that a change in a statute may be made merely to express more clearly the original intent of the legislature. Such is the case here. The unamended statute is not a model of clear draftmanship in regard to guide1 ines for the apportion- ment of corporate income. DOR therefore adopted Regulations 1001-1020 to provide clear guidelines for taxpayer compliance. The legislature there- after saw fit to clarify the section by the 1974 amendment to section 84- 1503. The unamended version of section 84-1503 is not in conflict with the regulations and therefore ASARCO must report its income in compliance with those regulations. Regarding ASARCO's second issue, we find the hybrid system of report- ing income used by ASARCO to be invalid under section 84-1503. As above, the crux of this issue is the interpretation of section 84-1503 and Regulations 1001-1020. The intent of the legislature in regard to the determination of what income is apportionable income is clear and unambiguous. Section 84- 1503 provides for two methods of accounting for income; separate accounting and apportionment. Section 84-1503 provides a test for the determination of the correct method of accounting to be used by a corporation in reporting i t s Montana corporation license tax. If income from all sources within Montana can "be properly segregated from income without the state" then and only then, may the separate accounting method be used. Furthermore if the separate account- ing method i s applicable, total net income must be allocated to source rather than the hybrid system used by A S A R C O . A S A R C O recognized i t s business was unitary in nature in 1962. I t requested and was granted permission b y DOR to discontinue the separate accounting system then i n use. Hence both parties agree that A S A R C O must apportion i t s income and the question becomes what income i s included in apportionable net income. The regulations are clear and simple. All business income i s appor- tionable and nonbusiness income i s allocated to source. ASARCO argues that certain items of income listed above are nonbusiness income and therefore properly deductible from apportionable net income. This contention i s in- correct. The regulations state that business income includes income derived from tangible and intangible property if the acquisition, management, and disposition of the property constitute integral parts of the taxpayer's reg- ular trade or business operation. After an in-depth examination of the in- come in question, w e find this income i s derived from sources that are integral portions of i t s business. This finding i s i n direct conflict with the district court's finding of fact which state this income i s nonbusiness income. The test of whether this income i s i n reality business or nonbusiness income i s a matter of statutory interpretation. W e feel therefore that the finding of the district court i s i n error. W e are confronted herein w i t h a conclusion of law, rather than a finding of fact. Listed below are examples of the relationship of this alleged nonbusiness income to A S A R C O . 1 ) Royalty Income--The royalty income arose from two sources, mine royalties and patent royalties. The mine royalties arose when A S A R C O leased i t s Keystone mine in Colorado t o an unrelated mining concern. A S A R C O had operated this mine prior to the leasing. The royalty was computed on the basis of mine production. The patent income arose from royalties paid for the use of devices developed by ASARCO1s research department. These devices were developed initially for ASARCO1s use in i t s various plants and mines. The main item included herein was a vertical feed furnace. 2) Rental Income. The majority of this income i s derived from homesites rented to employees working near A S A R C O mines and plants. M r . Pecca, an A S A R C O official, testified a t the DOR hearing: "This i s the, i t ' s almost exclusively rents received from employees working a t the company mines which are located in remote areas and the company i s required to provide houses. " 3) Interest Income--The interest income arose from customers ' notes on bonds, U. S. government notes, notes taken on the sale of a plant and stock, state and municipal bonds, and time certificates and other commercial paper. All were clearly 1 iquid securities and were therefore readily avail- able for use in meeting company obligations and debts. 4) Gains on the Sale of Stock--ASARC0 bought and sold stock i n various corporations during the years in question. Included within the sales were stock of General Cable, Revere Copper, Kennicott Copper, and Hecla Mining Company. These corporations are all engaged i n the business of either producing metal ore or manufacturing the refined product into goods. The stock was used by A S A R C O for business purposes, such as gaining access to raw materials or access to potential customers for i t s refined metals. Therefore all the above income was generated by the unitary business operation of ASARCO. The concept of including income from the sale of tangible and intangible property and income derived from rents, royalties and interest within apportionable net income i s not new nor unique. In Sperry and Hutch- inson Co. v. Department of Revenue, 270 Or. 329, 527 P.2d 729, 731, short term securities held to satisfy the need for liquid capital were held to be apportionabl e. The Oregon court stated: 'IS & H argues that because this income i s the return on an intangible i t must be allocated to legal situs. Nothing i n our former law requires such an arbitrary result and our current law expressly prohibits i t . " 527 P.2d 731. The current law referred to by the Oregon court i s in pertinent part identical to the DOR regulations here in question. A similar result deal- ing w i t h short term intangibles was reached i n Montgomery Ward & Co., Inc. v. C o m m . of Taxation, 276 Minn. 479, 151 N.W.2d 294. In Cleveland-Cliffs Iron Co. v. Michigan Corporation and Securities Commission, 351 Mich. 652, 88 N.W.2d 564, 572, the issue was whether an investment portfolio containing certain steel stocks should be included in determining the book net worth of the corporation. The court held the stocks were closely related to the company's business, quoting w i t h approval from Flint v. Stone Tracy Company, 220 U.S. 107, 31 S.Ct. 342, 55 L.Ed. 389: "Nor can i t be justly said that investments have no real relation t o the business transacted by a corpor- ation. The possession of large assets i s a business advantage of great value; i t may give credit which will result i n more economical business methods; i t may give a standing which shall f a c i l i t a t e purchases; i t may enable the corporation t o enlarge the field of i t s ac- t i v i t i e s and in many ways give i t business standing and prestige." 88 N.W.2d 572. See also: Great Lakes Pipe Line Co. v. Commissioner of Taxation, 272 Minn. 403, 138 N.W.2d 612. Concerning the final issue, DOR i s correct i n i t s contention that net income and apportionment factors of six of ASARCO's wholly owned sub- sidiaries must be included i n ASARCO's computation of apportionable net income. This i s merely an extension of the unitary method of taxation. Simply stated, the traditional concept of a combination of various units of a corporation for unitary method tax computation i s extended t o a com- bination of various related or affiliated corporations. In the instant case, the six affiliated corporations are clearly separate and distinct from A S A R C O . However a l l are wholly owned by A S A R C O and share common members of their respective boards of directors w i t h A S A R C O . A close relationship exists between ASARCO's business operation and the sub- sidiaries in that the subsidiaries a l l provide A S A R C O w i t h material, services, or a market for i t s products. From the discussion of the individual corporation's operations l i s t e d below, it i s clear the corporations are dependent upon each other and each i n t u r n contributes t o the other's business success. 1) Federated Metals of Canada--Federated Metals i s a Canadian corporation which b a s i c a l l y operates the same business i n Canada as ASARCO's American operation. ASARCO provides Federated w i t h c e r t a i n central services such as operations technology and accounting and f i n a n c i a l services. I n addition, sales between the two corporations are s i g n i f i c a n t . 2) ASARCO Mercanti 1 e Company--ASARC0 Mercanti 1 e i s engaged sol e l y i n the purchase and sale o f machinery f o r ASARCO's subsidiaries. A l l central services are provided by ASARCO. 3) Enthone, Inc. --Enthone i s a Connecticut corporation engaged i n the manufacture and sale o f metal f i n i s h i n g chemicals and supplies used i n metal plating. About 16% o f Enthone's raw materials were purchased from ASARCO. Central services were provided by ASARCO. 4) International Metal Company--This company i s ASARCO's exclusive sales o u t l e t f o r materials delivered t o foreign countries. ASARCO provides a1 1 central services. 5) Lone Star Lead Construction Co.--Lone Star i s a Texas corpor- a t i o n engaged i n l i n i n g tanks w i t h lead f o r protection against corrosive contents. The vast m a j o r i t y o f i t s lead requirements are purchased from ASARCO . 6) Northern Peru Mining Co. --A1 1 production from Northern Peru's mines are sold t o ASARCO and r e f i n e d i n i t s plants. I n addition t o the foregoing, M r . Pecca t e s t i f i e d as t o other ser- vices provided by ASARCO t o a l l i t s subsidiaries. These include: 1. ASARCO handles central insurance o f the subsidiaries. 2. Services provided by ASARCO are b i l l e d t o the subsidiaries, including top management. 3. A l l United States and state returns are prepared by ASARCO for the subsidiaries. 4. Legal services are provided by ASARCO f o r the subsidiaries whenever necessary. 5 . Essential c a p i t a l i s provided f o r the subsidiaries, who do not go t o outside sources without f i r s t going t o ASARCO. Coca Cola Company v. Department o f Revenue, 271 O r . 517, 533 P.2d 788, 790, 792, i s on a l l fours w i t h the i n s t a n t case. There the Oregon court said: "The principal issue i n t h i s case i s whether the income from Coca Cola and i t s wholly owned subsidiaries may be combined and the apportionment formula applied t o the sum t o determine the income properly a t t r i b u t a b l e t o Oregon. " 533 P. 2d 790. The Oregon court f i r s t stated t h a t i n order t o properly combine the incomes of the parent and subsidiary, the business operation must be unitary. The u n i t a r y t e s t was defined as whether the business units, o r i n t h i s case corporations, are dependent upon each other and contribute t o the operation o f the other's business. Zale-Salem, Inc. v. Tax Com., 237 O r . 261, 391 P.2d 601. Unquestionably t h i s t e s t i s met i n the i n s t a n t case. The Oregon court i n Coca Cola Company then stated: "We must now decide whether the fact t h a t Coca Cola and i t s wholly owned subsidiaries are organized as separate corporate e n t i t i e s precludes the Department o f Revenue from combining t h e i r incomes t o r e f l e c t the t r u e character o f t h e i r u n i t a r y business. W e hold t h a t it does not. "The question i s fundamentally one o f whether a busi- ness should stand i n a b e t t e r p o s i t i o n f o r purposes o f determining income merely because i t chooses t o use a mu1 t i p l e corporation organizational scheme. W e do not f e e l t h a t it should. W e agree w i t h the following statement o f the C a l i f o r n i a Supreme Court: " ' * * * [Alccepting, as we must, the application o f the law t o unincorporated wholly controlled branches o r businesses located i n other j u r i s d i c t i o n s as set f o r t h i n B u t l e r Brothers v. McColgan, 17 Cal.2d 664, 111 P.2d 334; Id., 315 U.S. 501, 62 S.Ct. 701, 86 L.Ed. 991, the conclusion i s i r r e s i s t i b l e t h a t the same r u l e should apply t o incorporated wholly controlled branches o r businesses so located. * * *' Edison C a l i f o r n i a Stores v. McColgan, supra a t 473-74, 183 P.2d a t 17." The decision o f the d i s t r i c t court i s reversed. This case i s remanded t o the d i s t r i c t court w i t h instructions t o enter judgment i n favor o f the Montana Department of Revenue i n the amount 07 the original defi iency 5 assessment. Chief Justice / i Justices

July 11, 1977

6bc97126-d74d-472d-bc40-1aa2872fb282

1ST NAT L BANK OF CIRCLE v GARNER

N/A

13441

Montana

Montana Supreme Court

No. 13441 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 FIRST NATIONAL BANK OF CIRCLE, Circle, Montana, Plaintiff and Appellant, -vs- GRAHAM CHARLES GARNER and SYDNEY MORRIS et al., Defendants, Graham Charles Garner and Sydney Morris et al., Cross Plaintiffs, -vs- FEDERICO CRUZ, et al., Cross Defendants, Frederico Cruz , Cross-Plaintiff, -vs- BERNARD GADD , Cross-Defendant. Appeal from: District Court of the Seventh Judicial District, Hon. C.B. Sande, Judge presiding. Counsel of Record: For Appellants: Towe, Ball & Enright Thomas Towe argued, Billings, Montana For Respondents : George Dalthorp argued, Billings, Montana Crowley, Kilbourne, Hanson, Gallagher & Toole, Billings, Montana Gene Huntley, Baker, Montana J.B. Casas, Jr., Los Angeles, California Submitted: March 21, 1977 Yr. jusrice Gene 3 . Daly delivered the Opinion of the Court. P l a i n t i f f , F i r s t National Bank of Circle, Circle, Montana, filec; t h i s action on May 22, 1972, i n the d i s t r i c t court, McCone dounty, f o r a declaratory judgment t o determine i t s l e g a l obliga- Lions regarding c e r t a i n bank deposits and c a s h i e r ' s checks. 3 1 1 W a y 6 , 1975, p l a i n t i f f ' s motion f o r summary judgment was granted, p l a i n t i f f then f i l e d a motion f o r award of attorney fees. This motion was denied on May 5 , 1976 and from t h a t denial p l a i n t i f f appeals. I n 1971, D r . Federico Cruz acquired control of the B r i t i s h .4merican Bank Limited of the Bahamas. D r . Cruz was president ; I £ the bank when i t s license was suspended by the government oi tlhe Bahamas i n early 1972. O n March 23, 1972, D r . Cruz, cepresenting himself t o be the president of the British-American Yank, Ltd.(Glasgow, scotland), opened a corporate checking account with p l a i n t i f f F i r s t National Bank of Circle, Montana. de presented checks endorsed t o the B r i t i s h American Bank Limited from depositors located a l l over the world, i n the approximate rlinount of $1,600,000.00. O n May 8, 1972, the account balance was approximately $1,542,868.01 and D r . Cruz requested a with- drawal of $1,327,788.00. The Circle Bank issued cashier's checks t o him personally t o t a l i n g t h i s amount. O n M a y 15, 1972, the Circle Bank received a telephone c a l l and a celegram from a Bernard Gadd who informed the Circle Bank he had been appointed Provisional Liquidator f o r the British- American Bank,Ltd., on May 11, 1972, and demanded the Circle Bank stop payment on the c a s h i e r ' s checks issued t o D r . Cruz on !day 8, 1972. Gadd l a t e r demanded t h a t a l l remaining funds be Lro~erl and returned t o him. M a y 15, 1972, was the f i r s t notice co the Circle Bank of such liquidation proceedings. O n May 22, 1972, the Circle Bank f i l e d t h i s action against deielldarlts. Although the action was styled "Complaint f o r 9eclaratory Judgment!', the d i s t r i c t court treated it a s an interpleader. The Circle Bank asked the d i s t r i c t court (1) t o ddjudicate i t s legal obligations t o defendants regarding the bank deposits and cashier's checks, (2) f o r a determination whether it should freeze the account and stop payment on the cashier's checks, and (3) f o r reasonable attorney fees and costs. D r . Federico Cruz f i l e d a counterclaim demanding damages against the Circle Bank f o r the face amount of the c a s h i e r ' s zhdcks, which D r . Cruz alleged were wrongfully dishonored by the i l r c l e Bank. The Liquidator f i l e d a counterclaim f o r a f u l l accounting of a l l monies deposited i n the Circle Bank i n the name of the British-American Bank Ltd. O n November 1, 1972, the Circle Bank f i l e d a motion f o r the discharge of i t s e l f and i t s o f f i c e r s . After a lengthy l i t i g a t i o n process, on May 7, 1975, the d i s t r i c t court ordered: "yc 9~ t h a t the motions f o r summary judgment of the F i r s t National Bank of Circle a r e i n a l l respects granted and t h a t the motion f o r summary judgment of the B r i t i s h American Bank Limited and the O f f i c i a l Liquidators thereof against Federico Cruz a r e granted with respect t o a l l matters dealt with herein and with respect t o the ownership of the funds i n the custody of the Court * * *.I' Jw11drship was granted t o the O f f i c i a l Liquidator. All questions !were s e t t l e d , except f o r the F i r s t National Bank of C i r c l e ' s :lain1 f o r attorney fees. P l a i n t i f f presents one issue for review by t h i s Court-- whether p l a i n t i f f F i r s t National Bank of Circle i s e n t i t l e d t o attorney fees and costs t o be paid out of t h e interpleader fund? To answer t h i s question the Court must decide whether the Circle Bank was a disinterested stakeholder, I f the stakeholder does not stand indifferent between the claimants, it i s not entitled t o an allowance for attorney fees. Defendant Bernard Gadd contends t h i s action was not an interpleader and that plaintiff had an interest in keeping the funds i n i t s bank as long as possible. This Court i n Central Montana Stockyards v. Fraser; 133 Mont, 168, 193, 320 P.2d 981, stated: "'An attitude of perfect disinterestedness, excluding even an indirect interest on the part of the p l a i n t i f f i s indispensable to the maintenance of the b i l l [of interpleader! * J c *. "' However, Rule 22(a), M.R.Civ.P., removes t h i s restriction and expressly provides it i s not a ground for objection when a plaintiff in an interpleader action avers he i s not l i a b l e i n whole or in part to any or a l l of the claimants. Since the award of costs and attorney fees i s within the discretion of the court, such award i s commonly denied when the stakeholder, although disinterested, i s i n some way culpable as regards the subject matter of the interpleader proceeding, but not sufficiently culpable to warrant denial of interpleader altogether. Merrimack Manufacturing Co. v. Bergman, 154 F.Supp. 688. Plaintiff contends the reason it did not f i l e a s t r i c t interpleader action was to make sure t h i s money would continue t o receive interest. The money did receive interest i n the amount of approximately $345,000.00. Defendants, on the other hand, con- tend p l a i n t i f f ' s motive was not a l l that a l t r u i s t i c . They f e l t the bank's reason for not f i l i n g an interpleader was t o keep the funds as a deposit i n i t s bank as long as possible. The record shows a motion was made demandi~ig t h a t p l a i n t i f f pay i n t o the registry of court o r deposit for safekeeping i n a bank not a pal-ty t o t h i s action, designated by the court, a l l sums in the dccount i n question. The F i r s t National Bank of Circle r e s i s t e d the t r a n s f e r 02 the funds from i t s custody, arguing t h a t it should be released from a l l l i a b i l i t y i n consideration of i t s releasing the funds. 3n Wovember 6 , 1972, the funds were ordered transferred t o the jecurity Trust and Savings Bank of Billings, Montana. During t h e period the p l a i n t i f f had control of the funds, 4Zron1 :<larch 23, 1972, u n t i l they were paid over t o the Security Crust and Savings Bank, the p l a i n t i f f paid an i n t e r e s t r a t e of 4% compounded quarterly. The Security Trust and Savings Bank paid an i n t e r e s t r a t e of 5 118% compounded quarterly. A t 4% the o r i g i n a l deposit would have produced $7,700 i n t e r e s t during rhe period from the date of the i n i t i a l deposit, March 23, 1972, t o the date of the f i l i n g of the action, May 22, 1972. During t h i s period p l a i n t i f f Circle Bank paid no i n t e r e s t on the funds, thus f o r t h i s period it had the use of t h i s money i n t e r e s t f r e e to invest as it saw f i t . It appears from the d i s t r i c t court record t h a t p l a i n t i f f was i n no hurry t o release the funds. M r . Towe, attorney f o r plain- t i f f stated: ''We are not anxious t o release the funds u n t i l we receive discharge, a t l e a s t f o r the l i a b i l i t y . " Thus it seems p l a i n t i f f i n t h i s action was not a disinterested stakeholder. The Circle Bank indicated before it would release these funds it desired further protection from the court i n exon- erating it from any l i a b i l i t y . When the action is not one of s t r i c t interpleader, and p l a i n t i f f i s more than a mere stakeholder, attorney fees a r e not allowable. Metropolitan Life Insurance Co. v. Enright, 231 F.Supp. 275, 278. I n t h i s case the record reveals the Circle Bank was not a disinterested stakeholder. The Bahama Bank Liquidator was attempting t o hold p l a i n t i f f l i a b l e f o r $97,000 withdrawn from the account p r i o r t o the time the liquidation procedure started. Such a claim can hardly be characterized a s a minor p a r t of t h e l i t i g a t i o n . Circle Bank had a great deal riding on the outcome of t h i s l i t i g a t i o n . It i s generally recognized t h a t when a party interpleading claimants t o funds o r property disputes the amount of the fund o r t o the extent of the property, has some other substantial i n t e r e s t i n the subject matter o r the outcome of the l i t i g a t i o n , o r does not stand indifferent between t h e claimants, he stands on the same footing a s any other l i t i g a n t and i s not e n t i t l e d t o an allowance f o r attorney fees. Groves v. Sentell, 153 U.S.465, 14 S.Ct. 898,:38 L ed 785. Where a p l a i n t i f f has placed himself i n a position necessitating interpleader t o avoid double vexation, he i s not e n t i t l e d t o attorney fees. Gresham S t a t e Bank v. 0 and K Con- struction Co., 231 O r . 106, 370 P.2d 726. Here, it appears from the record p l a i n t i f f used l e s s than prudent banking practices i n handling t h i s account. O n March 24, 1972, Edward Towe, president of the Circle National Bank called the Office of the Comptroller of the Treasury i n Washington D. C. t o make sure D r . Cruz was president of the BritSsh-American Bank, Ltd., of Scotland. H e never received a response and no further inquiries were made. Subsequently p l a i n t i f f issued $1,327,788.00 i n cashier's checks t o D r . Cruz a t h i s request, including one check i n the sum of $914,288.00 payable personally t o D r . Cruz, out of the account regiseered L n the name of the British-American Bank, Ltd., of Scotland without further confirmation. These c a s h i e r ' s checks 5ecame an issue in the lawsuit and i n the p l a i n t i f f ' s plead.ings it asked the court t o adjudicate the r i g h t s and obligations of defendants t o the funds represented by the cashier's checks. To deny the award of counsel fees t o the stakeholder w i l l not 5e to leave i t s attorney uncompensated. It simply represents a decision t h a t a l l or part of the fees incurred by the stake- holder should be paid out i t s pocket, rather than out of the pocket of the prevailing claimant. 3 A Moore's Federal Practice $~22.16[2], p. 3144, s t a t e s : "The prevailing principle i n interpleader actions brought i n the federal courts, whether under the interpleader s t a t u t e o r under Rule 22(1), i s t h a t it i s within the discretion of the court t o award the stakeholder costs including a reasonable attorneys' fee out of the deposited fund." The d i s t r i c t court did not abuse i t s discretion i n denying attorney fees t o the F i r s t National Bank of Circle. The judgment of the d i s t r i c t court i s affirmed, J u s t i c e chief J u s t i c e / ' I Justices.

July 26, 1977

2c6a70be-bad5-43b1-9ad5-7413fcd37b8e

STATE v DeGEORGE KENNEDY HOLMA

N/A

13562

Montana

Montana Supreme Court

No. 13562 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 THE STATE OF MONTANA, Plaintiffs and Respondents, ED DeGEORGE, WILLIAM KENNEDY and E. J. HOLMAN, Defendants and Appellants. Appeal from: District Court of the Second Judicial District, Honorable James D. Freebourn, Judqe presiding. Counsel ofbRecord: For Appellants: Mark P. Sullivan argued, Butte, Plontana For Respondents: John G. Winston argued, County Attorney, Butte, Montana Jack Parker argued, Deputy County Attorney, Butte, P4ontana For Amicus Curiae: Terry Cosgrove argued, Helena, Montana Submitted: May 23, 1977 Decided: .lull 2 3 W" Honorable J o e l G. Roth, s i t t i n g i n place of M r . J u s t i c e Daniel J. Shea, delivered t h e Opinion of t h e Court. This is an appeal from convictions of t h r e e S i l v e r Bow County Commissioners of two counts of o f f i c i a l misconduct, each a misdemeanor, under s e c t i o n 94-7-401 (1) ( a ) and (b) , R.C.M. 1947, which provides : "A public servant commits t h e o f f e n s e of o f f i c i a l misconduct when, i n h i s o f f i c i a l capacity, he commits any of t h e following a c t s : " ( a ) purposely o r n e g l i g e n t l y f a i l s t o perform any mandatory duty as required by law * * * o r " ( b ) knowingly performs an act i n h i s o f f i c i a l capacity which he knows i s forbidden by l a w * * *." A twelve person jury reached unanimous g u i l t y v e r d i c t s i n d i s t r i c t c o u r t , S i l v e r B o w County, on September 29, 1976. Judge James D. Freebourn pronounced sentence on October 4 , 1976, and t h e commis- s i o n e r s f i l e d n o t i c e of appeal on October 7, 1976. One count charges t h a t t h e commissioners purposely o r n e g l i g e n t l y f a i l e d t o perform a mandatory duty of a d v e r t i s i n g a county road c o n t r a c t of over $10,000 f o r bid, as required by s e c t i o n 16-1803 (1) , R.C.M. 1947, which provides: "No c o n t r a c t s h a l l be entered i n t o by a county governing body * * * f o r t h e construction of any * * * road * * * f o r which must be paid a sum i n excess of t e n thousand d o l l a r s ($10,000), without f i r s t publishing a n o t i c e c a l l i n g f o r b i d s f o r furnishing t h e same, which n o t i c e must be published a t l e a s t once a week, f o r t h r e e (3) consecutive weeks before t h e d a t e f i x e d t h e r e i n f o r receiving bids, i n t h e o f f i c i a l newspaper of t h e county, and every such c o n t r a c t s h a l l be l e t t o t h e lowest and b e s t responsible bidder * * *." The o t h e r count charges t h a t t h e commissioners knowingly performed forbidden a c t s by d i v i d i n g a s i n g l e road c o n t r a c t i n t o p a r t s s o as t o circumvent t h e bidding requirements. The p r o h i b i t i o n is contained i n s e c t i o n 16-1803.1, R.C.M. 1947, and provides: "Whenever any l a w of t h i s s t a t e provides a l i m - i t a t i o n upon t h e amount of money t h a t a county can expend upon any public work o r construction p r o j e c t without l e t t i n g such public work o r construc- t i o n p r o j e c t t o c o n t r a c t under competitive bidding procedures, a county s h a l l not circumvent such provision by dividing a public work o r con- s t r u c t i o n p r o j e c t o r quantum of work t o be per- formed thereunder which by its n a t u r e o r c h a r a c t e r i s i n t e g r a l t o such public work o r construction p r o j e c t , o r serves t o accomplish one of t h e b a s i c purposes o r functions thereof, i n t o s e v e r a l con- t r a c t s , s e p a r a t e work o r d e r s o r by any similar device. " The s o l e i s s u e on appeal i s whether t h e r e w a s s u f f i c i e n t evidence t o s u s t a i n t h e g u i l t y v e r d i c t s . W e b e l i e v e t h e r e was and a f f i r m t h e v e r d i c t s and judgment of t h e d i s t r i c t c o u r t . The f a c t s a s developed a t t r i a l w e r e b r i e f l y as follows: a new elementary public school ( t h e Margaret Leary School), ded- i c a t e d , September 1975, near Butte, w a s serviced by a d i r t county road which was inadequate f o r t h e increased vehicular t r a f f i c occasioned by t h e opening of t h e school. There had been discussions from June u n t i l September 12, 1975, between t h e commissioners and t h e county surveyor r e l a t i n g t o c u t t i n g , graveling, and paving 1800 f e e t of t h e road. When t h e road work was not commenced, t h e commissioners issued a memo dated September 1 2 , 1975, t o t h e county road department t o c u t , g r a v e l and pave t h e road i n question. Again t h e road work was not commenced and t h e commis- s i o n e r s then signed a c o n t r a c t dated October 1, 1975, with a Butte c o n t r a c t o r , Dugdale Construction Co., Inc . , t o grade, g r a v e l and s t r a i g h t e n t h e road f o r an agreed p r i c e of $2,898. Subsequently, on October 3 0 , 1975, another c o n t r a c t w a s signed by t h e same p a r t i e s t o pave t h e road f o r an agreed p r i c e of $9,901. The t o t a l c o n t r a c t p r i c e to grade, g r a v e l , s t r a i g h t e n and pave t h e road was $12,799, l e t on two c o n t r a c t s which were not a d v e r t i s e d f o r bids. Commissioner Kennedy t e s t i f i e d during t r i a l t h a t t h e commissioners on October 1, 1975, d i d not expect any paving t o be done until Spring 1976, thereby justifying dividing the work into two separate contracts each for less than $10,000. The jurors resolved the conflict between the commissioners' memo, dated September 12, 1975, contemplating one undivided job, and Commissioner Kennedy's testimony, justifying two separate con- tracts, against the commissioners, and under proper instructions from the court, found the commissioners had purposely and negli- gently failed to advertise a county road project of over $10,000 for bid, and had knowingly divided a single road contract into two parts so as to circumvent the bidding requirements. The scope of this Court's review is to determine whether or not there is substantial evidence to support the jury's verdicts and the court's judgment. Section 95-2404 and 95-2425, R.C.M. 1947. This Court has frequently observed that disputed questions of fact and the credibility of witnesses will not be considered on appeal but that determination of such matters is within the province of the jury. As long as there is substantial evidence to support the verdict, it will not be disturbed on appeal. State v . Bouldin, 153 Mont. 276, 456 P.2d 830; State v. Lagge, 143 Mont. 289, 388 P.2d 792. Where there is sufficient substantial evidence to support the jury's verdict of guilty, it must stand. State v. Feeley, Mont. , 522 P.2d 66, 33 St.Rep. 648. From a review of the record we find that there was suffi- cient substantial evidence to support the jury's verdicts of guilty. The judgment of the district court is affirmed. sitting in place of Mr. Justice Daniel J. Shea. Chief T u s t i c e n

June 21, 1977

df13cb4f-e47c-4586-b3c8-eb2d0f7aed0d

GROVES v GROVES

N/A

13566

Montana

Montana Supreme Court

No. 13566 I N THE S U P R E M E COURT O F THE STATE O F MONTANA 197 7 O P A L L A U R E E N GROVES, P l a i n t i f f and Appellant, -vs- G E R A L D HARVEY G R O V E S Defendant and Respondent. Appeal from: D i s t r i c t Court of t h e Thirteenth J u d i c i a l D i s t r i c t , Honorable Charles Luedke, Judge presiding. Counsel of Record: For Appellant: Peterson and Hunt, B i l l i n g s , Montana Kenneth D. Peterson argued, B i l l i n g s , Montana For Respondent : Berger, Anderson, S i n c l a i r and Murphy, B i l l i n g s , Montana James J. S i n c l a i r argued, B i l l i n g s , Montana Submitted: February 16, 1977 AUG - 5 1977 Decided: - AuG -- 5 ;m F i l e d : --.. Mr. Justice John C. Harrison delivered the Opinion of the Court. Plaintiff appeals from an order of the district court, Yellowstone County, denying her petition for permanent custody of her daughter, Renee, and granting permanent custody to de- fendant, the father of the child. This litigation began April 17, 1973, when plaintiff filed for divorce in Billings, Montana. The parties were sep- arated and defendant was living in Alberta, Canada at the time. Defendant had physical custody of the child in accordance with the wishes of both parties. On May 18, 1973, defendant obtained an ex parte order from the Alberta court granting him legal cus- tody. On June 4, 1973, plaintiff was awarded the divorce and custody of the child by default in the Montana proceeding. Thereafter, the parties agreed defendant should have custody of Renee with liberal visitation rights granted to plain- tiff. Pursuant to stipulation, decrees were entered in the Alberta court on September 27, and in the Montana court on October 9, granting custody to defendant. This arrangement lasted until the summer of 1974, when plaintiff, who had the child in Montana for visitation, filed an affidavit and petition for modification of custody. This was filed on August 14, 1974, the day before defendant was to arrive in Billings to pick up the child. The affidavit stated plaintiff had remarried to Dr. Walter Francke and that she and Dr. Francke would "provide a secure and loving home" for Renee. On the basis of this affidavit, the court granted temporary custody to plaintiff and ordered defendant to appear on August 21 for a hearing to show cause why such custody should not be made permanent. Defendant was served with this order when he arrived in Billings to pick up the child. The show cause hearing was held August 21 in chambers. While there is no record of what transpired, apparently no testimony was taken. The court was concerned about the parties1 tendencies to obtain ex parte orders in different jurisdictions and desired that the parties agree to a single forum for an adjudication binding in Montana and Canada. As a result of this hearing the court ordered: (1) "that the hearing on the Order to Show Cause shall be continued indefinitely to be reset at a later date at a time convenient to Court and Counsel," and (2) "that temporary custody of the minor child * * * shall remain with Plaintiff * * * until further order of this Court." This temporary arrangement was still in effect March 18, 1975, when plaintiff filed another affidavit and petition for permanent custody. Defendant filed a similar affidavit and petition February 4, 1976, alleging plaintiff and Dr. Francke had exposed the child to constant fighting and violence arising out of the excessive use of alcohol. Defendant further stated he was remarried and in a position to offer the child an excel- lent family situation. A full hearing on the petitions of both parties was held April 5, 1976. On May 3, at the direction of the district court, the parties entered into a stipulation whereby they agreed to be bound by the order of the district court and to apply to the Canadian court for a consent order in conformity thereto. On May 19, 1976, the court ordered plaintiff's petition for custody be denied and defendant's petition for custody be granted. Four issues are presented on appeal: 1. Did plaintiff waive her right to appeal by stipula- ting that she would be bound by the order of the district court? 2 . Was defendant's petition for custody barred by section 48-339, R.C.M. 1947, which prohibits, absent special circumstances, any motion to modify a custody decree within two years after its date? 3. Did the district court err in granting custody to defendant in light of the evidence presented? 4. Did the court err in its refusal to admit the depo- sition of one Mlora Smith MacKay into evidence at the April 5 hearing? Issue 1. Before the district court made its final order the parties entered into a "STIPULATION FOR ENTRY OF A CONSENT ORDER". It provided : "The Parties hereto, OPAL LAUREEN FRANCKE, f/k/a OPAL LAUREEN GROVES, individually, by and through her attorney * * * and GERALD HARVEY GROVES, in- dividually, by and through his attorney * * * stipulate and agree that they shall be bound by the Order, Judgment and Decree entered by this Court in this matter, regardless of the juris- diction in which they reside, and further, that application shall be made to the trial division of the Supreme Court of Alberta, Judicial District of Calgary, for a Consent Order to conform all legal proceedings therein involving the Parties hereto and their child, RENEE ADELE GROVES, to the Order, Judgment and Decree of this Court. The Parties further stipulate and agree that they will sign and execute any and all documents and papers necessary to secure said Consent Order." This stipulation was made at the direction of the district judge, who was seeking to resolve the jurisdictional conflict. While it is possible to waive any errors and give up any right of appeal in Montana, the general rule is as stated in 4 Am Jur 2d, Appeal and Error 5236 p . 7 3 3 : "Such an agreement should be very clear on its terms, and leave no doubt of the intention of the party to cut himself off from the right of appeal. * * *" Here the stipulation was made before the district court made its decision and both parties agree the overriding purpose of the stipulation was to end the jurisdictional problems which had plagued this case since 1973. Although the parties clearly agreed to be bound by the order of the district court, it was not clear whether the order referred to was before appeal, or after either an appeal was taken or the time for appeal lapsed. Certainly, the language of the stipulation does not amount to a clear showing the parties intended to preclude any right of appeal. Accordingly, we hold the stipulation did not prevent the parties from taking an appeal-, but merely bound them by the final order of the district court, as the case is finally resolved. Issue 2 . Section 48-339, R.C.M. 1947, provides: "(1) No motion to modify a custody decree may be made earlier than two (2) years after its date, unless the court permits it to be made on the basis of affidavits that there is reason to believe the child's present environ- ment may endanger seriously his physical, mental, moral, or emotional health. "(2) The court shall not modify a prior custody decree unless it finds, upon the basis of facts that have arisen since the prior decree or that were unknown to the court at the time of entry of the prior decree, that a change has occurred in the circumstances of the child or his cus- todian, and that the modification is necessary to serve the best interest of the child. In applying these standards the court shall retain the custodian appointed pursuant to the prior decree unless: "(a) the custodian agrees to the modification; " (b) the child has been integrated into the family of the petitioner with consent of the custodian; or " (c) The child's present environment endangers seriously his physical, mental, moral, or emotional health, and the harm likely to be caused by a change of environment is outweighed by its advantages to him. " ( 3 ) Attorney fees and costs shall be assessed against a party seeking modification if the court finds that the modification action is vexatious and constitutes harassment." Plaintiff received temporary custody based on her August 14, 1974 affidavit and petition for change of custody. On August 22, the district court held a hearing on the order to show cause and ordered: (1) that temporary custody be left with plaintiff; and (2) that the hearing be continued indefinitely. This order, plaintiff argues, amounted to a "custody decree" within the meaning of section 48-339, thus leaving the court without jurisdiction to change custody for two years, absent a showing of special circumstances. Holm v. Holm, Mont. , 560 P.2d 905, 34 St.Rep. 118. However, we do not agree the August 22, 1974 order was ever intended to be a final custody decree. It arose out of an in-chambers hearing at which no testimony on the merits of the custody issue was taken. In its memorandum with the final order of May 19, 1976, the district court expressed its rationale for the August 22, 1974 order : " * * * Because of the way the parties were using the Montana and Alberta courts in ex parte proceedings, the hearing was continued pending resolution of which court the parties could agree upon for jurisdiction since the allegations before the Montana court stated that an application for court action was also pending in Calgary. As a consequence, the child has remained with the mother * * *". Clearly the August 22, 1974 order was intended to be interlocu- tory in nature; express the court's continuing jurisdiction; and hold the matter in abeyance until the jurisdictional diffi- culties could be resolved. The custody issue was merely left alone for the moment. A temporary custody order is not equiva- lent to a custody decree within the meaning of section 48-339. To hold otherwise would be to defeat the purpose of a temporary order. Here, it is peculiar that the temporary custody order remained in effect for one and one-half years, but this does not change the fact it was granted ex parte and was never intended to be a final custody decree. Thus defendant's petition for custody was not barred by section 48-339. The last "custody decree" was entered in Montana October 9, 1973, and that decree granted custody to defendant. In reality, then, it is plaintiff who is seeking modification of a custody decree under section Issue 3. Our reasoning in Issue 2 applies to the issue of whether the district court erred in granting custody to de- fendant. To modify the custody decree of October 9, 1973, it is plaintiff who must meet the provisions of section 48-339. It is plaintiff's responsibility to prove that modification is necessary to serve the best interests of the child, and to do so she must satisfy one of the conditions specified in sub- sections (a), (b) and (c), section 48-339(2). Subsection (a) does not apply because defendant never agreed to a modification. Subsection (b) does not apply because, while it is arguable the child has been integrated into plaintiff's family for one and one-half years, it was not with the consent of defendant. Therefore, in order to be entitled to a modification, plaintiff must prove that under subsection (c) : "the child's present environment endangers seriously his physical, mental, moral, or emotional health, and the harm likely to be caused by a change of environment is outweighed by its advantage to him." In the unique context of this case, in which the non- custodial parent was awarded temporary custody, "present environ- ment" must be taken to mean the environment of the child while with the parent who held the child under the prior decree and before custody was temporarily taken from him. Generally, the evidence brought forth on plaintiff's behalf was that the child was well cared for and has undergone temporary normal development while in plaintiffts/custody, and plaintiff has shielded the child from much of the trouble encountered in her stormy marriage with Dr. Francke. Plaintiff also attempted to show that her lifestyle has changed since this marriage and that she no longer drinks and is an active member of the Mormon Church. There is, however, no evidence the child was any- thing but well-adjusted while she lived with defendant, and there is certainly no evidence her physical, mental, moral, or emotional health was in danger. On the contrary, the evidence shows defendant has provided and is in a position to continue to provide an excellent home for the child. Matters of child custody are within the discretion of the district court, and under these circumstances we cannot say the district court abused its discretion in awarding custody to defendant. Gilmore v. Gilmore, 166 Mont. 47, 530 P.2d 480. To prevent just the sort of ping-pong custody litigation that has occurred in the instant case, section 48-339 places a heavy burden on the person seeking to modify a prior custody decree. Plaintiff has not met this burden and cannot shift it to defendant by an ex parte, temporary order of custody. Issue 4. Plaintiff argues the court erred in refusing to admit into evidence the deposition of Mlora Smith MacKay. The circum- stances surrounding the taking of this deposition are: The parties stipulated defense counsel would take plain- tiff's deposition at a certain time. At the conclusion of this deposition, counsel for plaintiff announced, for the first time, that he planned to take the deposition of Mlora MacKay immediate- ly, as she lived in Canada, was in Montana visiting her family, and planned to return to Canada right away. Counsel asked if counsel for defendant would stipulate this was a deposition for the perpetuation of her testimony, but counsel for defendant refused to so stipulate. The deposition was taken with counsel for defendant present, who asked a few questions of MacKay re- garding the notice she had that her deposition was going to be taken. At the hearing, the district court refused to allow the deposition into evidence. Although there was no stipulation regarding the depo- sition and no notice at all of its taking until the deposition was about to be taken, plaintiff argues it should have been admitted because defendant filed no written objection to the lack of notice. Rule 32 (d) (1) , M. R. Civ. P. , provides : " As to notice. A11 errors and irregularities in the notice for taking a deposition are waived unless written objection is promptly served upon the party giving the notice." However, this is not a case of a technical error or irregularity in notice, it is a case of no notice at all. We cite with approval this statement from 4A Moore's Federal Practice, 1132.09: "Depositions should not be admitted where they are taken without giving the adverse party reasonable notice of the taking and there is no opportunity for a protective order." Here there clearly was no notice of the deposition and no oppor- tunity for counsel for the defendant to move the court for a protective order; the deposition was going to be taken immediately. It was impossible for defense counsel to prepare any effective cross-examination of the witness, and the admission of such deposition into evidence at the trial would be unfair and preju- dicial to defendant. The district court did not commit reversible error by excluding it. The order of the district court granting custody of the child to defendant is affirmed. Justice --- Justices M r . J u s t i c e Frank I. H a s w e l l , s p e c i a l l y concurring: I concur i n t h e r e s u l t , but n o t i n a l l t h a t is s a i d i n t h e discussion of t h e second i s s u e i n t h e opinion. J u s t i c e

August 5, 1977

bb53dd30-d482-4b08-9654-42633fc29485

STATE v OPENSHAW MAXWELL

N/A

13316

Montana

Montana Supreme Court

No. 13316 I N THE S U P R E M E C O U R T O F THE STATE OF MONTANA THE STATE OF MONTANA, P l a i n t i f f and Respondent, DERYL O P E N S H A W and CHARLES MAXWELL, Defendants and A.ppellants. Appeal from: D i s t r i c t Court of t h e Thirteenth J u d i c i a l D i s t r i c t , Honorable Robert Wilson, Judge presiding. Counsel of Record: For Appellant: Moses, Kampfe, T o l l i v e r and Wright, B i l l i n g s , Montana J l . Frank Kampfe argued, B i l l i n g s , Montana For Respondent : Hon. Michael Greely, Attorney General, Helena, Montana Harold Hanser, County Attorney, B i l l i n g s , Montana Charles A. Bradley, Deputy County Attorney, argued, B i l l i n g s , Montana Submitted: January 2 4 , 1977 Decided: -JZ$ - '- ,977 Filed: M r . Justice Gene B. Daly delivered the Opinion of the Court, Defendants appeal from the judgment of the d i s t r i c t court, Yellowstone County, which denied defendants' motion t o reinstate their not guilty pleas and deferred defendants' sentence for one year upon the condition defendants serve one year in the Yellowstone County j a i l , while participating i n a work release program. O n October 20, 1975, the Yellowstone County attorney f i l e d an Information charging defendants with theft of a Black Angus steer, i n violation of section 94-6-302(1), R0C.M. 1947. Defendants were taken into custody and, a f t e r pleading not guilty t o the offense a s charged, released on bond pending t r i a l before Hon. Rbbert H. Wilson. O n February 9 , 1976, defendants appeared for arraignment before Hon. Charles Luedke. During the arraignment defendants made a motion t o withdraw t h e i r former pleas of not guilty t o plead guilty t o felony theft. The d i s t r i c t court accepted defendants' guilty pleas and ordered pre-sentence investi- gative reports be submitted t o the court prior t o pronouncement of judgment and sentencing, s e t for February 20, 1976. O n February 20, 1976, defense counsel reasserted defendants' desire to withdraw t h e i r original pleas of not guilty and enter pleas of guilty t o the charge i n the Information. The d i s t r i c t court granted defendants' motion a f t e r ascertaining that defendants were acting voluntarily and were aware of the consequences of a guilty plea. O n March 5, 1976, defense counsel f i l e d an affidavit i n sup- port of a motion to withdraw the guilty pleas previously entered. O n March 23, 1976, the d i s t r i c t court, Hon. Robert H. Wilson pre- siding, denied defendants' motion to withdraw the guilty pleas and proceeded to pronounce judgment and sentence defendants. The district court ordered defendants' sentence be deferred for one year, the defendants to be placed on probation under the supervision of the State Board of Pardons. One of the condi- tions of the one year deferred sentence was that defendants serve one year in the Yellowstone County jail while taking part in a work release program which would allow defendants to continue in their employment. Defendants present two issues for review: 1 . Did the district court err when it refused to grant defendants' motion for withdrawal of guilty plea? 2. Did the district court abuse its discretion when it deferred imposition of defendants' sentence, but required defendants to serve one year in the Yellowstone County jail with release for working hours? Defendants initially contend the district court erred when it denied defendants' motion to withdraw their guilty pleas and reenter their original pleas of not guilty. Defendants' argue that when they plead guilty to theft they misunderstood the element of intent. Since defendants shot the steer while "spotlighting" deer, they conclude the taking of the property was accidental and the criminal theft fails. The prima facie case for theft is set forth in section 94-6-302(1), R . C . M . 1947: " ( 1 ) s . A person commits the offense of theft when he purposely or knowingly obtains or exerts unauthorized control over property of the owner, and: " ( a ) has the purpose of depriving the owner of the property; or " ( b ) purposely or knowingly uses, conceals, or aban- dons the property in such manner as to deprive the owner of the property; or " ( c ) uses, conceals, or abandons the property knowing such use, concealment or abandonment probably will deprive the owner of the property," Criminal intent at the time of the shooting of the steer is unnecessary under the present facts. Even if the steer was shot "accidentally1', defendants satisfied the prima facie case for theft when they knowingly butchered a steer belonging to another and carred the carcass to their home, thus depriving the lawful owner of his personal property. When defendants initially withdrew their plea of not guilty in order to enter a plea of guilty the district court judge thoroughly questioned defendants on the voluntariness of their act and their knowledge of the con- sequences of the guilty plea: "THE COURT : " 9 : * * Now, under this charge what they're saying is that you stole and butchered a steer, and when you plead guilty you're telling me that's ( w ) h a t you did. Is that what you did?" Defendants answered in the affirmative. We hold the district court fully discharged its duty to insure that defendants submitted their guilty plea voluntarily and understood the consequences of the plea. Once defendants entered a plea of guilty they admitted all issues of fact and nothing remained to go before a jury. The district court did not err when it failed to grant defendants' subsequent motion to withdraw the plea of guilty and reenter the plea of not guilty. State v. Scalise, 131 Mont. 238, 309 P.2d 1 0 1 0 . Defendants' second issue on appeal attacks the district coutt's pronouncement of sentence. The district court deferred defendants' sentence for one year but imposed a one year term in the Yellowstone County jail with release during normal working hours. Section 95-2206 ( I ) , R.C.M. 1947, is controlling: "Whenever any person has been found guilty of a crime or offense upon a verdict or a plea of guilty the court may: " ( 1 ) Defer imposition of sentence for a period not to exceed one ( 1 ) year for any misdemeanor; for a period not to exceed three ( 3 ) years for any felony. The sentencing judge may impose upon the defendant any rea- sonable restrictions or conditions during the period of the deferred.imposition. Such reasonable restrictions or conditions may include: " ( a ) jail base release; " ( b ) jail time not to exceed ninety ( 9 0 ) days; " (c) conditions for probation; " ( d ) restitution;. " ( e ) any other reasonable conditions deemed necessary for rehabilitation or for the protection of society; " ( f ) any combination of the above ." The significant phrase in section 95-2206(1) is "The sentencing judge may impose upon the defendant any reasonable restrictions or conditions during the period of the deferred imposition." In the instant case the district court confined defendants to the Yellowstone County jail to be released during normal working hours, but required them to spend all weekends and all evenings in the Yellowstone County jail for the entire year of the deferred imposition of sentence. We find such a restriction or condition of deferred imposition of sentence to be unreasonable in light of the conditions of deferred sentence set out in section 9 5 - 2 2 0 6 ( 1 ) ( b ) . We remand the cause to the district court for modification of sentence in accordance with section 9 5 - 2 2 0 6 ( 1 ) ( b ) , which limits "jail time not to exceed ninety (90) days". The judgment of the district court is affirmed in part and reversed in part, consistent with this op ii/jL.e, fig&zjziz Chief Justice

June 7, 1977

947adfd0-f6e4-49a8-a7b9-adfddb167b88

RAUSER v TOSTON IRRIGATION DIST

N/A

13243

Montana

Montana Supreme Court

No. 1 3 2 4 3 I N THE SUPREME COURT OF THE STATE O F MONTANA 1 9 7 7 GEORGE RAUSER and PHYLLIS A. RAUSER, husband and w i f e , P l a i n t i f f s and R e s p o n d e n t s , THE TOSTON IRRIGATION D I S T R I C T , MAURICE L . HUNSAKER, FRANK J. S L I F K A , and SAMUEL F. KIRSKEY, t h e m e m b e r s of t h e B o a r d of C o m m i s s i o n e r s of said TOSTON IRRIGATION D I S T R I C T , D e f e n d a n t s and A p p e l l a n t s . A p p e a l f r o m : D i s t r i c t C o u r t of t h e F i r s t J u d i c i a l D i s t r i c t , H o n o r a b l e P e t e r M e l o y , Judge presiding. C o u n s e l of R e c o r d : For A p p e l l a n t s : C o r e t t e , S m i t h and D e a n , B u t t e , M o n t a n a K e n d r i c k S m i t h argued and G e r a l d A l l e n argued, B u t t e , Montana H o l t e r , H e a t h and K i r w a n , B o z e m a n , M o n t a n a For R e s p o n d e n t s : H a r r i s o n , L o e n d o r f and P o s t o n , H e l e n a , M o n t a n a J a m e s T. H a r r i s o n , Jr. argued, H e l e n a , M o n t a n a For A m i c u s C u r i a e : T h o m a s O l s o n , B i l l i n g s , M o n t a n a A l v i n E. B i e l e f e l d argued, B i l l i n g s , M o n t a n a S u b m i t t e d : M a r c h 1 7 , 1 9 7 7 D e c i d e d : bjUN -6 F i l e d : f 6 i$n M r . Justice John Conway Harrison delivered the Opinion of the Court. George Rauser and Phyllis Rauser, husband and wife, brought t h i s action i n the d i s t r i c t court, Broadwater County, against the Toston Irrigation District and members of the Board of Commissioners of t h a t District. The complaint alleged a portion of Rausers' land was taken without compensation, and construction of the irrigation project with resultant seepage caused water t o stand stagnant on approximately forty acres of p l a i n t i f f s ' land situated along Warm Spring Creek. It alleged t h i s amounted t o the taking of a flood easement. Defendant's motion t o strike the individual board members a s parties was granted. T r i a l was had before a jury and a verdict returned i n favor of Rausers i n the amount of $100,000. The Toston Irrigation Project consists of the Crow Creek pump unit and a water delivery system b u i l t a s a part of the Missouri River Basin Project. The land t o be irrigated was t o serve a s a replacement for lands flooded by Canyon Ferry Reservoir. The pro- ject began i n 1955 with fewer than a thousand acres under irrigation. A t present it covers nearly five thousand acres. Plaintiffs are not members of the Toston Irrigation District but t h e i r land i s bounded one one side by land i n the District. The acreage alleged taken i s a t a lower elevation than land i n the District. Each party presented expert hydrological testimony and expert valuation testimony. Plaintiffs' hydrological expert t e s t i f i e d the source of the water on the Rauser property was t o the south and east, basing h i s opinion on well readings taken over a substantial number of years. Along with other factors, he took into consider- ation the extent of irrigation i n the District and the rainfall. H e also read into evidence from a United States Geological Survey document entitled "Geology and Occurrence of Ground Water i n Town- send Valley, Montana" the following statement : "The application of additional irrigation water t o the benchland flanking Warm Spring Creek w i l l increase the extent of waterlogging i n the bottom land unless provi- sion is made for more adequate drainage. In t h i s part of the valley the Tertiary sand and gravel deposits, which are mantled by permeable windblown s o i l , are underlain by beds of hardened clay, locally referred t o as 'hardpan. I I f water is applied t o these lands, a gradual r i s e i n the water table w i l l take place. This r i s e w i l l result i n the increased flow of existing springs i n the lower part of the valley, and new springs w i l l appear along the slope from the benchland to the valley bottom. In t h i s area the valley bottom is underlain by relatively impermeable fine- textured clay. The capillary fringe above the water table w i l l r i s e t o the surface i n much of the bottom land, saline s o i l w i l l develop, and the land w i l l eventually become unpro- ductive. Water logging w i l l become more extensive i f irri- gation water i s applied to the benchland that l i e s a t a higher elevation than the present irrigated land unless provision is made for more adequate drainage. This condi- tion w i l l exist not only i n the Crow Creek area but also i n other parts of the valley where additional irrigation i s planned .I1 The expert indicated h i s findings confirmed t h i s prediction, George Ranser t e s t i f i e d the diminution of value because of the "taking" totaled $100,000. Plaintiffs' expert valuation w i t - ness t e s t i f i e d the loss was i n the range of $35,000 basing his opinion on comparable sales of three nearby parcels. Defendant's hydrological expert t e s t i f i e d the cause of the flooding on p l a i n t i f f s ' land was the enlargement of p l a i n t i f f s ' own irrigation ditch which created a barrier t o the natural drainage of the land. Defendant's valuation expert placed the t o t a l loss a t $26,000. - 3 - The parcel affected by the water includes the land where p l a i n t i f f s ' home, shop and outbuildings are located. The United States government b u i l t and owns the physical assets of the irriga- tion system. Almost from the beginning of irrigation on the project, there have been negotiations between Rausers and the District about the flooding of the land and proposals t o drain it. The District went so f a r a s t o draw up plans and obtain bids for a drain system, but because the bid was substantially more than expected nothing further was done. The Toston Irrigation District appeals. W e summarize the issues a s these: (1) May an irrigation d i s t r i c t exercise the power of eminent domain on a project whose-.physical assets are owned by the federal government? (2) May there be a condemnation of property without a showing of negligent design, construction, o r operation of the project. (3) Was the action barred by laches? ( 4 ) Was the verdict supported by substantial credible evidence ? (5) A r e attorney fees allowable? ( 6 ) Was there an adequate description of the land here involved? Issue (1) The power t o condemn property i s granted t o irrigation d i s t r i c t s by Montana statute, section 89-1301(3), R.C.M. 1947, and states: "(3) The board * * * shall also have power and authority t o acquire by purchase, lease, contract, condemnation, o r other legal means, lands (and rights i n lands) for rights of way, for reservoirs, for the storage of needful waters, and for dam s i t e s , and necessary appurtenances, and such other lands and property as may be necessary for the construction, use, maintenance, repair, improvement, enlargement and operation of any d i s t r i c t system of irrigation works." That the physical assets are owned by the United States government does not l i m i t the power t o condemn. Section 89-1301(7) clearly indicates substantial federal involvement i s contemplated i n "construction, operation, and maintenance of the necessary works for the delivery and distribution of water therefrom * * *.'I De- fendant argues the t r i a l court lacked jurisdiction because the physical assets are owned-by the United States. This argument must f a i l for no e f f o r t s were made on the part of defendant t o remove the case t o federal court and no case authority is cited o r relied upon t o support defendant ' s position. While the District questions whether there was i n fact a taking here and the compensability of it, case law holds there can be a taking without a t o t a l physical appropriation of land. Here the District did not condemn the land, rather it caused the land to be permanently invaded by the percolation of water. Similar fact cases have been considered by the United States Supreme Court recog- nizing the rights of the damaged landowner. United States v. Kansas City Life Ins. Co., 339 U.S. 799, 70 S.Ct. 885, 94 L ed 1277; United States v. Lynah, 188 U.S. 445, 23 S.Ct. 349, 47 L ed 539; 2 Nichols on Eminent Domain, Taking and Damage 56.32. Issue (2). Whether there may be a taking by the District without a showing of negligence i n design, construction, or operation of the District? I n actions for damage for seepage the rule a s stated i n Fleming v. Lockwood, 36 Mont. 384, 391, 92 P. 962, and quoted i n Rhodes v. Weigand, 145 Mont. 542, 549, 402 P.2d 588, is: "* * * I f , i n fact, the seepage occurred a s p l a i n t i f f contends, it must have been the result of negligence on ~ockwood's part, e i t h e r i n constructing o r operating the ditch, since it is not contended that it was the result of inevitable accident or was caused'by an.act of God; and therefore the plaintiff had the burden of proof, in the first instance, to show negligence on the part of the defendant." The District cites Fleming as authority for the fact that to have a recovery here there must be intentional or negligent acts. Fleming,a negligence case, provided for payment in the case of intentionally caused torts. The District cites Rhodes as authority, but there this Court provided for the issuance of an injunction, noting : "The record in this cause discloses with clarity that appellant in the year 1947, again in 1961 and again, after complaint had been made to him of flooding in the year 1962, persisted in his negligent and deliberate acts .I1 Montana's case law does not require a showing of negligence or a theory of negligence when faced with deliberate or intentional acts. In Calvert v. Anderson, 73 Mont. 551, 555, 236 P . 847, the Court held: "It is the rule in this state that the owner of an irrigating ditch is not an insurer thereof and is liable only for damages caused by his willful acts or by his negligence in constructing, maintaining or using his ditch." However, as we will discuss later, Fleming and Rhodes are not applicable to the facts of the instant case. In Rhodes the court found that the rule which requires a showing of negligence was met by deliberate acts, the flooding of plaintiff's land. The instant action is one for inverse condemnation. The 1972 Montana Constitution, Art. 11, Section 29, provides: "Private property shall not be taken or damaged for public use without just compensation to the full extent of the loss having been first made to or paid into court for the owner. In the event of litigation, just compensation shall include necessary expenses of litigation to be awarded by the court when the private property owner prevails." An early Montana case, Less v . City of Butte, 28 Mont. 27, 32, 72 P. 140, in construing this identical language in the 1889 Consti- tution "Private property shall not be taken or damaged for public use without just compensa-tion * * *I' said: "* * * Under constitutions which provide that property shall not be 'taken or damaged' it is universally held that 'it is not necessary that there be any physical invasion of the individual's property for public use to entitle him to compensation.' * * *'These easements are property, protected by the constitution from being taken or damaged without just compensation. ' * * * Moreover, it may frequently occur that 'the consequential damage may impose a more serious loss upon the owner than a temporary spoliation or invasion of the property. ' " In the ordinary condemnation case necessity, valuation and the like are the issues to be determined---fault or negligence are not considered authority. The rule stated in Fleming that an irrigation district is not an insurer of its ditches from damage as a result of acts of God or against occasional damage which occurs even though the district has exercised due care, does not apply to the facts here. Here the damage done by the project was foreseeable and foreseen. It was inevitable that Rausers' land would be damaged by the construction of the project, absent remedial work. Almost from the outset Rausers sought to have the damage remedied and as the amount of water used by the project increased, so did the Rausers' complaints. Where, as here, the damages are known or knowable and are an inevitable result of the intentional undertaking of the project, there is no need to show negligent design, construction or operation. It is enough to show the damages were proximately caused by the undertaking of the project and a reasonable foresee- able consequence of the undertaking. It is implicit in inverse con- demnation that the extent of the damage be of such a degree as to amount to a taking of an interest in the property damaged. Albers v. County of Los Angeles, 42 Cal.Rptr. 89, 96, 398 P.2d 129, 136; 20 Hastings Law Journal 431. Historically it appears inevitable t o each new irrigation project that certain unexplained and unplanned for problems a r i s e that damage adjacent property owners. In many instances there i s no negligence or other wrongful conduct or omission on the part of defendant. The injured property owners have sought redress for damages on the alternative theories of inverse condemnation and t o r t , as applied t o the facts. Bauer v. County of Ventura, 45 Cal.2d 276, 289 P.2d 1; Granone v. County of Los Angeles, 231 Cal.App.2d 629, 42 Outstanding i n the cases of t h i s type i s the holding of the California Supreme Court i n Albers: "From the foregoing analysis of the cases and other legal authorities it i s apparent that we are not required t o choose between two absolute rules, one of l i a b i l i t y and one of nonliability, but are faced with a more limited issue. The question is not whether i n a l l cases, a property owner should not be permitted t o recover i n an inverse condemnation action i f a private party would not be liable for damages similarly inflicted, but whether there i s o r should be a qualification or limitation of that rule t o the effect that the property owner may recover i n such an action where actual physical damage is proximately caused t o h i s property by a public improvement as deliberately planned and b u i l t * * *." 398 P.2d 136. The California Court concluded that such damages are compensable and adopted five factors for consideration. W e find t h i s case applicable to the instant case and adopt a s guides the five factors. 1) The damage t o t h i s property, i f reasonably foreseeable, would have entitled the property owners t o compensation; 2) the likelihood of public works not being engaged i n because of unforeseen and un- foreseeable possible direct physical damage t o real e s t a t e is remote; 3) the property owners did suffer direct physical damage t o t h e i r properties a s the proximate result of the works as deliberately planned and carried out; 4) the cost of such damage can b e t t e r be absorbed, and with infinitely less hardship, by the taxpayers a s a whole, than by owners of the individual parcels, and t5) t o quote from Clement v. State Reclamation Board, 35 Cal.2d 628,642, 220 P.2d 897, 905, "the owner of the damaged property i f uncompensated would contribute more than h i s proper share t o the public undertaking." The California Court then noted, quoting from an ea~rly opinion, Bacich v. Board of Control, 23 Cal.2d 343, 351, 144 P.2d 818, 823, quoting from Sedgwick on Constitutional Law: ""'The tendency under our system is too often t o sacrifice the individual t o the community; and it seems very d i f f i c u l t i n reason t o show why the State should not pay for property which it destroys or impairs the value, a s well a s for what it physically takes. * * ,*.""' a Issue 3. The District argues the action i s barred by laches. The project was begun i n 1955 and t h i s actions was not i n i t i a t e d u n t i l 1973. The evidence reveals that complaints were made t o the District almost from the outset and remedial action was discussed u n t i l sometime just prior t o the commencement of t h i s action. Laches is an equitable defense. This Court i n Davis v. Steingruber, 131 Mont. 468, 470, 311 P.2d 784, said: "Laches means negligence i n the assertion of a right, and exists where there has been a delay of such duration a s t o render enforcement of the asserted right inequitable ." there i s no unexplained delay which would j u s t i f y > , ths application of the doctrine of laches and there is no prejudice sufficient t o justify the application of. laches. Thus the action i s not barred by laches. The districtI1s actions lulled p l a i n t i f f s throughout the years between the beginning of the District and the f i l i n g of the action. Issue (4). Is the verdict supported by the evidence? This involves two questions. F i r s t , was the United States Geological report entitled "Geology and Occurrence of Ground Water i n the Townsend Valley,Montana1' admissible into evidence over a hearsay objection? This document contains a detailed description of the geography, geomorphology, geology, ground water, and chemical quality of the water and has a short summary and conclusion section. Plain- t i f f s ' hydrology expert used the data i n the nearly 50 pages of measurements of water level observation wells along with the general information i n the document, as an aid i n h i s analysis of the ~ a u s e r s ' probdkm. The expert t e s t i f i e d as foundation that (1) the information was available t o the public and others i n h i s profession; (2) the document and others like it were recognized a s authorities and relied upon by professionals i n t h e i r f i e l d of work, and (3) the document was prepared i n the normal course of business by the agency prior t o the building of the irrigation project. Section 93-1101-8, R.C.'M. 1947, states: "Historical works, books of science o r a r t , and published maps o r charts, when made by persons indifferent between the parties, are prima-facie evidence of facts of general notoriety and interest." I A n early case interpreting section 93-1101-8, Lynes v. Northern Pacific Ry. Co., 43 Mont. 317, 329, 117 P. 81, discussed t h i s section a s it related t o the admissibility of certain tables of results of t e s t s made on a i r brakes on trains of different tonnage. The tables were offered t o corroborate the expert's opinion and as independent evidence of the facts shown. The Court said: "* * * i f the proper preliminary proof is made, viz., that the book or chart offered i s by a person indifferent between the parties l i t i g a n t , is standard among the pro- fession, trade o r occupation t o which it relates, and is accepted and acted upon as accurate, it should be admitted, upon the theory that the matters which it contains are facts , , of ,general riotariety'and inte?est ." The document here involved is similar t o the one involved i n Lynes and was offered for substantially the same purposes. The foundation required for the admission, that it was prepared prior to l i t i g a t i o n by parties indifferent between the parties and that it i s accepted a s an authority and relied on a s such, is s u f f i c i e n t assurance of the t r u t h of the matters contained therein and thus excepts it from the requirement t h a t the speaker be available f o r cross-examination. W e note here t h a t the portion of the summary and conclusion read i n t o evidence does not speak t o the existence of present harm, only predicts such harm. It goes not t o the t r u t h of the issue, but t o the knowledge o r i n t e n t of the builders of the project. The D i s t r i c t argued the jury disregarded the evidence t h a t the D i s t r i c t was not responsible f o r any seepage past the point of delivery a t the headgates. The evidence of where the seepage came from was a matter f o r the jury t o decide and was decided against the contentions of the D i s t r i c t . There was considerable evidence t o support the jury' s decision. Second, a s t o the other challenges made t o the determination of cause and the valuation--is there substantial credible evidence t o support the verdict and judgment? That is the scope of t h i s Courts review, S t a t e Highway ~omrn'n v. Vaughan, 155 Mont. 277, 470 P.2d 967. A s t o cause, both p a r t i e s presented a number of witnesses, including two highly qualified and extremely convincing expert witnesses who gave conflicting explanations of the cause of the injury. There i s substantial credible evidence f o r the j u r y ' s findings of cause. As t o valuation, it is t r u e the amount the jury returned a s ~ t s verdict i s the highest amount t e s t i f i e d t o and t h i s testimony was by the landowner. This Court has permitted the landowner t o t e s t i f y a s t o the value of h i s land within c e r t a i n l i m i t s . I n S t a t e Highway Comm'n v. Barnes, 151 Mont. 300, 305, 443 P.2d 16, t h i s Court, quoting a p r i o r case, said: "we now restate the rule to be that an owner, upon prima facie proof of ownership, s h a l l be qualified t o estimate i n a reasonable way the value of h i s property for the use t o which he has been putting it. Such owner i s not qualified by virtue of ownership alone t o t e s t i f y a s t o its value for other purposes unless he possesses, a s any other witness a s t o value, "some peculiar means of forming an intelligent and correct judgment as t o the value of the property i n question beyond what i s presumed t o be possessed by men generally." '" Here, as i n Barnes, the landowner t e s t i f i e d t o the value of the land as it was being used. While the District argues that Rauser's value ..testimony i s incredible, it should be noted that within the 40 acres involved are a l l the buildings of the ranch. H e t e s t i f i e d the water problems began with the commencement of the project: that h i s two separate basements were flooded; the septic tank would not function; that land near the home i s inundated the year around; that he could not - use h i s calving area i n the winter and a new one had t o be b u i l t ; that he could not keep corrals clean because of the water; and that he had t o get out of the hog business a value t o the ranch operation. With that as a background, he went on t o t e s t i f y a s t o the value of h i s ranch before and a f t e r the taking. The t r i a l judge did not abuse h i s discretion i n allowing t h i s testimony. Issue (5). This issue involves attorney fees and consists of two questions. F i r s t , does the court have the power t o award attorney fees i n an inverse condemnation case? Second, were attorney fees properly awarded i n t h i s case? F i r s t . A r t . XI, Section 29, 1972 Montana Constitution provides: "Private property shall not be taken o r damaged for public use without just compensation t o the f u l l extent of the loss having been f i r s t made t o or paid into court for the owner. In the event of l i t i g a t i o n , just compensa- tion shall include necessary expenses of l i t i g a t i o n t o be awarded by the court when the private property owner pre- vails. I I The s t a t u t e implementing the l a s t sentence of A r t . 11, Section 29, is section 93-9921.1, R.C.M. 1947, which provides: h he condemnor, s h a l l within t h i r t y (30) days a f t e r an appeal i s perfected from the commissioner's award o r report, submit t o condemnee a written f i n a l o f f e r of judgment f o r the property t o be condemned, together with necessary expenses of condemnee then accrued. " I f any time p r i o r t o ten (10) days before t r i a l the condemnee serves written notice t h a t the o f f e r i s accepted, e i t h e r party may then f i l e the o f f e r and notice of acceptance together with proof of service thereof and thereupon judgment s h a l l be entered. A n o f f e r not accepted s h a l l be deemed withdrawn and evidence thereof i s not admissible a t the t r i a l except i n a proceeding t o determine costs. The f a c t t h a t an o f f e r i s made but not accepted does not preclude a subsequent offer. I n the event of l i t i g a t i o n , and when the private property owner prevails, by receiving an award i n excess of the f i n a l o f f e r of the condemnor, t h e court s h a l l award necessary expenses of l i t i g a t i o n t o the condemnee ." For future reference i n such controversies, we note here t h a t the 1977 Montana Legislature passed House B i l l No. 483, now Chapter 48, 1977 Session Laws. This i s an a c t t o define and provide a manner f o r computing the amount of necessary expenses of l i t i g a t i o n required by section 93-9921.1, R.C.M. 1947. While not e f f e c t i v e f o r the i n s t a n t case, a l l cases a r i s i n g a f t e r July 1, 1977, the e f f e c t i v e date of the a c t , w i l l come under t h i s a c t . I n S t a t e v. Olsen, 166 Mont. 139, 147, 531 P.2d 1330, the Court found the 1972 Constitution and the s t a t u t e implementing it required payment of expert witnesses and attorney fees. W e note t h a t section 93-9921.1, R.C.M. 1947, does not use the terms " p l a i n t i f f " and "defendant" a s do most of the p r i o r sections i n the eminent domain chapter, Chapter 99, T i t l e 93. I n Frustuck v. City of Fairfax, 41 Cal.Rptr. 56, attorney fees were denied i n an inverse condemnation case. There the court rested i t s decision on two factors (1) t h a t the word "defendant" was used in the eminent domain attorney's fee s t a t u t e indicating t h a t t h e attorneyFs fee statute applied only to the statutory procedure, and ( 2 ) there was no constitutional requirement that attorney fees be paid in an eminent domain action in California. However, in a recent case, Holtz v. San Francisco Bay Area Rapid Transit District, 131 Cal.Rptr. 646, 552 P.2d 430, 436, footnote the court notes : "It is asserted that since federal law makes it clear that litigation costs are not recoverable in an inverse condemnation if a 'tort' is alleged, section 1246.3 must be interpreted so as to prohibit the award of litigation costs in actions alleging damage to real property. Aside from the fact that no such limitation is made by section 1246.3 and that, as we conclude above, the loss of lateral support may be characterized as a taking of an interest in real property, this argument ignores the established principle that recovery in inverse condemnation is based on the constitutional pro- vision requiring just compensation,not on a theory of tort. (Reardon v. San Francisco, supra, 66 Cal. 492, 505, 6 P. 317.) We have consistently rejected the contention that the right to recover in eminent doxhafn .derives from'tort doetrine,'em- phasizing that as a matter of policy the owner of property taken or damagd for public use should not contribute a dis- proportionate share of the cost of a public undertaking. {Citing cases]" In Montana, precisely the opposite is true. "Condemnor" and 11 condemneel' are used in the attorney's fee statute in contrast to the rest of the chapter which speaks of "defendant1' and "plaintiff" . Further, there is a clear constitutional requirement that attorney fees be paid in condemnation cases where the landowner prevails. Attorney fees are permissible in inverse condemnation cases in Montana. Second. The District alleges no attorney fee is proper in this case because there was no final offer as required by statute. This same objection was discussed in Olsen where the Court said: "To adopt such a theory here would contravene the intent of the statute and would violate the constitutional mandate. Article 11, Section 29, 1972 Constitution requires that a landowner be compensated for necessary expenses of litigation if he prevails. This constitutional directive cannot be frustrated by inadvertent or intentional violations of statu- tory procedure." 166 Mont. 147. While it i s understandable the District i n t h i s inverse condemnation action did not wish t o follow the statutory condemnation procedure, that may not be used t o deny p l a i n t i f f s their attorney fees. In the instant case a $30,000 bid for work that would have cured the problem was rejected a s being too costly. The amount the project was expected t o cost was around $6,000. B y inference it seems clear the $100,000 verdict exceeded the "final offer" of the condemnor. Defendant next questions whether such fee may be awarded where no evidence was taken as required by Crncevich v. Georgetown Recreation Corp., 168 Mont. 113, 541 P.2d 56, 59, 32 St.Rep. 963 and F i r s t Security Bank of Bozeman v. Tholkes, Mont * - 9 547 P.2d 1328, 33 St. Rep. 341'. In Tholkes t h i s Court vacated the judgment on attorney fees and remanded the cause for an evidentiary hearing on attorney fees. Here, since the s t a t e or p o l i t i c a l sub- division must pay the attorney fees, there is even stronger reason t o remaidcl the instant case for consideration of the factors s e t out i n Crncevich and Tholkes. Under the 1889 Constitution fees i n condemnation cases were percentage contingency fees. In the private agreements the parties protected their own interests but where the fee i s t o be paid by the s t a t e there i s no incentive for the land- owner t o bargain t o keep the percentage reasonable. Clearly success is an important factor i n setting an attorney fee. The "result secured" is among the factors s e t out i n Crncevich and Tholkes, but it i s not the only factor and a l l must be considered and weighed t o arrive a t a reasonable fee. W e wish t o make clear that there i s absolutely no intent t o imply i n any way that the fee i n the instant case i s unreasonable, but only t o require that the reasonableness of the fee be shown by evidence. Often those unfamiliar with the difficulties and complexities involved in an action, especially such a one as the instant inverse condemnation action, see only the lump sum figure for attorney fees and think it unreasonable. By producing evidence as to the amount of time and effort involved, that simplistic judgment should disappear. Issue ( 6 ) . The sufficiency of the description of what was taken. It was clear to the jury,which had viewed the land,and the parties what land was involved, but as to third parties and subsequent takers a legal description of the land including a survey of metes and bounds should be furnished and made a part of the judg- ment. Judgment is affirmed in part, and remanded in part to the trial court for further hearings as directed by this opinion. We Concur: - - - Justices. M r . J u s t i c e Frank I. Haswell: I c o n c u r i n t h e r e s u l t .

June 6, 1977

cecb110c-c4ab-4f72-8de0-ea85cea6a1ea

SCHOOL DISTRICTS v HUMAN RIGHTS CO

N/A

13656

Montana

Montana Supreme Court

/3&4 No. ft36%F IN TKE SUPREME COURT OF THE STATE OF MONTANA 1977 SCHOOL DISTRICT NO. 7, BOZEMAN, MONTANA; OPHIR SCHOOL DISTRICT NO. 72, GALLATIN COUNTY, MONTANA ; WILLOW CREEK SCHOOL DISTRICT No. 15, GALLATIN COUNTY, MONTANA; THREE FORKS SCHOOL DISTRICT No. 24, GALLATIN COUNTY, MONTANA, Plaintiffs and Respondents, VS. HUMAN RIGHTS COMMISSION, STATE OF MONTANA, AND RAYMOND D. BROWN, Administrator thereof, Defendants and Appellants. Appeal from: District Court of the Eighteenth Judicial District, Honorable Nat Allen, Judge presiding. Counsel of Record: For Appellant: Rosemary B . Zion, Helena, Montana For Respondent: Donald E. White County Attorney's Office, Bozeman, Montana Brian Sullivan, argued, Bozeman, Montana d L 1 4 1 ' " " Filed: Submitted: June 7, 1977 Decided : a 2 - I d . Clerk. Mr. Justice Frank I . Haswell delivered the Opinion of the Court. Defendants appeal from an order of the district court, Gallatin County, denying their motion for change of venue to Lewis and Clark County. Plaintiffs are four school districts in Gallatin County. They brought an action against the defendants, Human Rights Commission, State of Montana, and Raymond D . Brown, its adminis- trator, seeking a writ of prohibition, or in the alternative to quash defendants' interrogatories. The action sought to halt proceedings of the defendants in investigating complaints filed with the Commission concerning alleged discriminatory practices of the school districts in violation of what we will call the anti-discrimination act, section 64-301, et.seq., R . C . M . 1947. The petition alleges defendants' submission of interrogatories and attempted interrogation of administrators of plaintiff school districts violates plaintiffs' constit~tional rights against self- incrimination under the federal and state constitutions. Fifth Amendment, United States Constitution; Art.11, Section 25, 1972 Montana Constitution. The district court entered an order prohibiting defendants from compelling plaintiffs to answer the interrogatories sent to them and quashing the interrogatories during the pendency of the action, and set a hearing on making the order permanent. Thereafter, among other things, defendants filed a motion for change of venue to Lewis and Clark County. Following sub- mission of briefs, the district court denied defendants' motion for change of venue. Defendants appeal from that order. The issue on appeal i s whether venue is properly i n Gallatin County or Lewis and Clark County. Defendants contend that venue properly l i e s i n Lewis and Clark County under section 93-2902(2), R.C.M. 1947, because that is where "the cause, o r some part thereof, arose". They claim the s i t u s of o f f i c i a l acts of a public agency or o f f i c i a l i s i n the county of o f f i c i a l residence which is the decision-making hub from which a l l o f f i c i a l a c t s emanate, here Lewis and Clark County. Defendants view p l a i n t i f f s ' petition a s an action t o l i m i t or extinguish t h e i r statutory investigative powers; thus they contend that the underlying question i s whether they may exercise t h e i r investigative powers a t a l l and not whether the effects of t h e i r a c t i v i t i e s are f e l t i n Gallatin County. They c i t e Lunt v. Division of Workmen's Compensation (1975), 167 Mont. 251, 537 P.2d 1080, i n support of their venue claim, and contend that Guthrie v. Department of Health and Environ- mental Sciences, e t a l . (1977), Mont . , 561 P.2d 913, 34 St.Rep. 155, does not require a contrary result. Additionally, they claim that public policy against dissipating the time and resources of s t a t e agencies i n defending t h e i r actions a t far- flung locations throughout the s t a t e of Montana supports their position on venue. They deny that p l a i n t i f f s ' right against self- incrimination i s involved i n determining venue; they say such constitutional right can only be asserted by a natural person and not a governmental entity [United Sta tes v: White (1944), 322 U.S. 694, 64 S.Ct. 1248, 88 L ed 15421 and the right cannot be invoked a s a general bar t o inquiry, but can only be asserted t o specific disclosures sought [Kastigar v. United States (1972), 406 U.S. 441, 92A S.Ct. 1653, 32 L ed 2d 2121. Plaintiffs, on the other hand, agree that section 93-2902 governs venue i n t h i s action, but disagree as to the nature of their action and where it arises. They view their action as fundamentally one t o establish and give effect to their constitu- tional right against self-incrimination. They assert that a l l of the conduct of defendants which they seek t o prohibit occurred i n Gallatin County; that is where the cause of action arose, and that is where venue lies. They c i t e Guthrie v. Department of Health and Environmental Sciences, supra; and the California case Cecil v. Superior Court (1943), 59 C.A.2d 793, 140 P.2d 125, i n support of their position. The statute controlling venue i n t h i s case i s section 93- 2902, which provides i n pertinent part: "Actions for the following causes must be tried in the county where the cause, or some part thereof, arose * * *. "2. Against a public officer, or a person specially appointed to execute h i s duties, for an act done by him i n virtue of h i s office; or against a person who, by h i s command or i n h i s aid, does anything touching the duties of such officer." A "public officer" within the meaning of t h i s statute encompasses a governmental agency which can only act through its public officers and employees. Lunt v. Division of Workmen's Compensa- tion, supra. Thus defendant Human Rights Commission, as well a s defendant Brown its administrator, is a public officer within the meaning of t h i s statute. The crux of venue i n t h i s case is where "the cause, or some part thereof, arose" within the meaning of section 93-2902. Prior decisions of t h i s Court have a l l turned upon t h i s question with varying results, depending upon our view of the nature of the action involved i n each case. In Montana-Dakota Utilities Co. v . Public Service Commission (1940), 111 Mont. 78, 107 P . 2 d 533, an action to enjoin enforcement of an order of the Commission reducing utility rates for natural gas service in Valley and Phillips Counties, this Court held that venue was properly in Valley County where the action was originally filed, rather than Lewis and Clark County the official residence of the Commission and the place where the order was issued. Venue was determined-under the statutory predecessor of section 93-2902 on the basis that plaintiff sought relief from operation of the order which would occur in Valley and Phillips Counties where the cause of action arose. State ex rel. Fulton v . District Court ( 1 9 6 1 ) , 139 Mont. 573, 366 P.2d 435, an original petition seeking a writ of prohibi- tion to restrain the district court of Cascade County from further proceeding with an action against the State Board of Equaliza- tion relating to its regulations concerning the corporation license tax, contains dictum to the effect that section 93-2902 requires the action to be filed in Lewis and Clark County, the official residence of the Board and the place where the regulations were issued. Gildroy v. Anderson (1972), 159 Mont. 325, 497 P.2d 688, was an action for injunction to prevent the governor of Montana from implementing an executive order establishing multi-county planning and administration districts and changing the composition of existing districts. We held venue properly belonged in Lewis and Clark County, the county of the governor's official residence, rather than Musselshell County, one of the affected counties. We construed the objective of plaintiff's complaint as a challenge to an official act of the governor, allegedly exceeding his power and authority vis-a-vis the s t a t e legislature, rather than a challenge t o the merits of the operation of the executive order i n redistricting the affected counties. I n Lunt v. Division of workmen's Compensation, supra, an action for a w r i t of mandate t o compel the s t a t e agency t o s e t a hearing on petitioner's claim for worker's compensation bene- f i t s , we held venue property belonged i n Lewis and Clark County, the s i t u s of the agency's office, rather than Yellowstone County where the action was f i l e d , because the action only involved a function of the agency's offices i n Lewis and Clark County. Finally, in Guthrie v. Montana Department of Health and Environmental Sciences e t a l . , surpa, w e again looked t o the nature of the action i n holding that venue properly lay i n Teton County rather than Lewis and Clark County. This was an action by recreational and business users of land i n Teton County near a subdivision development against the State Department of Health, the Teton County Commissioners and the subdivision developers. The action sought an injunction against the defendants t o restrain further action that would physically a l t e r the land i n the sub- division u n t i l sanitary restrictions were properly l i f t e d and p l a t approval properly secured. W e construed the nature of the action a s seeking t o restrain alleged irreparable harm t o Teton County land. Accordingly, we held Teton County was where the action arose and where venue was proper. The root of the venue issue i n the instant case i s the con- f l i c t i n g view of the parties a s t o the nature of the action. P l a i n t i f f s contend their action fundamentally involves t h e i r con- s t i t u t i o n a l right against self-incrimination being denied them by conduct of defendants i n Gallatin County. Defendants claim plaintiffs' action is basically an attack seeking destruction or at least limitation of their statutory powers and authority to investigate complaints of discrimination under the act. The merits of plaintiff&' action are not before us. Conway v . Fabian, 103 Mont. 574, 63 P . 2 d 1022. Venue must be deter- mined on the basis of the allegations in plaintiffs' petition. Johnson v . Clark, 131Mont. 454, 311 P.2d 772. In our view, the gist of plaintiffs' petition is that their constitutional right against self-incrimination is allegedly being infringed upon by defendants' investigatory activities and conduct in Gallatin County which they seek to arrest by a writ of prohibi- tion. Plaintiffs' attack is not upon the statutory power and authority of the Commission to investigate complaints under the anti-discrimination act. Rather it is an attack on the Comis- sion's method or manner of exercising those powers in conducting its investigation in Gallatin County, in alleged violation of constitutional guarantees. The attack is not upon the statutory powers of the Commission, but upon the conduct of defendants in Gallatin County in the exercise or operation of those powers. The cause of action arose in Gallatin County because the conduct of defendants there allegedly violated constitutional rights of Gallatin County residents and entities. Thus venue properly lies in Gallatin County under section 93-2902. Public policy considera- tions do not change our view. We have considred the remaining contentions of defendants but consider them irrelevant to venue. They attack the merits of plaintiffs' petition, which is not before us on this appeal The order of the district court denying a change of venue to Lewis and Clark County is af f irmed. Justice. We Concur: Justices. M r . Justice Daniel J . Shea specially concurring : I concur i n the venue decision and the Court's refusal t o consider the merits of defendants' claim that p l a i n t i f f s a s e n t i t i e s , were asserting constitutional rights t h a t belonged only t o individuals. The d i s t r i c t court has not yet ruled on that question. However, the d i s t r i c t court and t h i s Court should have considered the obvious conflict of interest which the attorney county/has i n asserting self-incrimination rights for h i s clients. The conflict i s between h i s function as prosecuting attorney of Gallatin County and h i s function a s c i v i l legal advisor t o the school d i s t r i c t s and trustees. One of those functions must prevail, and since the county would be without a prosecutor i f he chose h i s duty t o be c i v i l advisor t o the school d i s t r i c t s and trustees, the duty t o prosecute must prevail. The school d i s t r i c t s involved should h i r e an independent lawyer. Under section 16-3101, R.C.M. 1947, it is the function of each county attorney to "conduct on behalf of the s t a t e , a l l prosecutions for public offenses * * *." The anti-discrimina- tion a c t , section 64-312, R.C.M. 1947, provides that a w i l l f u l violation of the a c t , whether in committing a prohibited act or i n interfering with the a c t i v i t i e s of the Human Rights Commis- sion, is a misdemeanor for which one can be fined and jailed. Therefore, any violation of t h i s a c t may ultimately f a l l i n the lap of the county attorney t o prosecute. I n fact, there i s no other o f f i c i a l who can bring a criminal prosecution under the anti-discrimination act. Under these circumstances the county attorney has no right t o prevent the disclosure of evidence which may be incriminating. Rather, it is h i s duty t o obtain the evidence and to prosecute if he determines there is a criminal violation. To allow him to proceed in this case is to strip the people of Montana of a prosecutor in Gallatin County for criminal proceedings under the anti-discrimination act. Section 75-8305.1, R.C.M. 1947, expressly provides school districts may hire independent counsel in the event of a conflict of interest. The county attorney should advise the school boards they should retain independent counsel if they desire to raise the privilege against self-incrimination as a defense to the interrogatories propounded by the Human Rights Commission. If the county attorney will not voluntarily withdraw from the case, the district court should order that he withdraw and that plaintiffs hire independent counsel. 2 - - Justice.

July 14, 1977

5afdb172-457c-4ff0-9541-d4a19760ec3e

STATE v SANFORD

N/A

13145

Montana

Montana Supreme Court

NO. i3i45 I N 'fh6 3UPKhME d O U K T OF THE ATAIL 3F XOLTIANA 1977 THE STHTE OF NONTANk, P l a i n t i f f dnd Respondent, v. 'WLSON ''BUCK'' SANFORD, Defendant and Appellant. Appedl from; 3 i s t r i c t Court of the Sixth J u d i c i a l Distarict Honorable Jack D. Shanstrom, Judge presiding. Counsel of Record: For Appellant : Moses, Kampfe, Tolliver 6L Wright, Billings, Montana Charles F. Moses, argued, Billings, Montana. For Respondent: ~n s, 4.I U . A . J m , Clayton R. Herron, Helena, Montana Jack Yardley , County Attorney, Livingston, Montana Mike Greely, Attorney General, Helena, Montana Clayton R. Herron, argued, Helena, Montana. submitted: June 9, 1977 Decided : JUN 2 2 797 - Clerk. ?Ir. Justice Gene B . Daly delivered dhe dpirlion d f he Z u u r t . This i s an appeal from a f i n a l judgment of the d i s t r i c t court P a r k County, from a jury verdict of g u i l t y of l i t t e r i n g public property. Nelson "Buck" Sanford was issued a c i t a t i o n by a s t a t e gdme warden on July 1 7 , 1973, charging him with the crime of leaving l i t t e r on public property i n violation of section 94- 3336, R.C.M. 1947, claimed t o have been committed a t "Wolverine Pass" on o r about October 20, 1972. Section 94-3336 a t the time involved provided : "Littering public o r private properties unlawful-- exceptions. It i s unlawful f o r any person o r persons t o dump, deposit, throw o r leave, o r t o cause o r permit dumping, depositing, placing, throwing, o r leaving of l i t t e r on any public o r private property i n t h i s s t a t e , o r any waters i n t h i s s t a t e , unless: ' I ( I ) Such property i s designated by the s t a t e or by any of i t s agencies or p o l i t i c a l subdivisions for the disposal of such material, and such person i s authorized by the proper public authority t o use such property; "(2) Into a l i t t e r receptacle, o r container i n s t a l l e d on such property; "(3) He i s the owner o r tenant i n lawful posses- sion of such property, o r has f i r s t obtained consent of the owner o r tenant i n lawful possession o r unless the a c t is done under the personal direction of said tenant o r owner." A formal complaint was f i l e d i n the j u s t i c e court, Livingston, Montana, before the j u s t i c e of the peace on July 1 7 , 1973, charging Sanford with a misdemeanor on o r about October 15, 1972, a t Nolverine Pass, i n t h a t he did "wilfully, wrongfully and unlaw- f u l l y leave l i t t e r on public property located i n Section Eight (8), Township Nine (9) South, Range Fourteen (14) East, M.P.M., Park Coimty , Montana". L'rlal w a s 5el-d b e ~ o r e che justice jr :he peace w i t h o u ~ d j u r y arid a verdict a£ g u i l t y entered therein. Appeal was perfected t o the d i s t r i c t court, Park County. Thereafter a jury t r i a l was held before the d i s t r i c t court Qn May 12 and 13, 1975, and a jury verdict of g u i l t y entered. ,+ppeal was then perfected from the f i n a l judgment of the dis- t r i c t court t o t h i s Court. The principal f a c t s a r e largely uncontradicted. Sanford has Seen an o u t f i t t e r and licensed f o r about 20 years; he kept and maintained a camp i n Park County, Montana, known a s the "Wolverine Pass" campsite f o r over 25 years. For many years t h i s business was conducted under h i s name alone, but a f t e r h i s son, Ron Sanford, returned from the service and se- cured an o u t f i t t e r ' s license, the business was conducted under the name of Sanford and Sons; Buck Sanford and h i s three sons, Pori, Lon, and Rick. A t the time of the incident i n question i n 1972, Sanford and Sons applied f o r and was granted a permit from the f o r e s t service f o r the use of t h i s p a r t i c u l a r Wolverine Pass campsite. A t d i f f e r e n t times during the hunting season i n the F a l l of 1972, Suck Sanford and a l l three of h i s sons were there guiding and : ~ u t f i t t i n g hunters. Each a t d i f f e r e n t times took d i f f e r e n t parties i n t o t h i s area, and a t d i f f e r e n t times used the campsite. O n October 2, 1972, Vern Waples, a law o f f i c e r , served e r r t a f r i c i v i l papers on Buck Sanford a t the campsite. Those papers had no bearing on the present matter. While Waples was a t the campsite, he made an inspection of the premises which was ane of h i s duties, H e found no actionable violations as of 3crober 2 , 1972. Several days a r t e ~ receipc 2L r h r papers, Buck Sanford Lekt the campsite and did not return u n t i l t h e following year. Thereafter h i s sons used the campsite and did so u n t i l October 28, 1972. A t t h a t time winter storm conditions and increasing snow required the camp be closed and so Rick and Lon Sanford and three other persons proceeded t o arrange t o remove a l l equipment, a r t i c l e s and l i t t e r from t h e campsite. When the sons returned t o the campsite with a tracked v e h i c l e , they found one person had suffered a broken arm and they removed t h a t person, the horses and what equipment they :odd. They were unable t o return because of weather conditions for t h e remainder of t h e i r property and t h e l i t t e r . I n j u s t i c e court the s t a t e admitted the defendant called and explained the riiacter t o the forest service and apparently was assured t h a t a l l was well i f the remainder o f o t h e items were removed the next summer. This was denied i n the d i s t r i c t court. During the t r i a l i n d i s t r i c t court, it was never established the defendant was present o r had anything t o do with the l i t t e r . T o the contrary, one of h i s sons t e s t i f i e d he was the responsible party, i f there was a criminal violation, i n l i g h t of the circum- stances. Defendant presented eight issues t o t h i s Court f o r review, which include sufficiency of the evidence; improper evidence admitted and denial of a number of defendant's proposed jury instructions. W e could burden t h i s opinion with a d i s s e r t a t i o n on the poi-ntls raised by defendant, but the pertinent point i s t h a t che s t a t e never proved i t s case under any theory. The record does not e s t a b l i s h t h a t defendant did l i t t e r i l a y . The testimony of Vern Waples proves t h a t up t o October 2, 1972, there was no l i t t e r . Defendant l e f t several days l a t e r and there i s no testimony t h a t he l i t t e r e d o r per- mitted l i t t e r i n g a t any time. The camp was i n operation u n t i l nearly t h e end of October 1972. Defendant i s charged with w i l f u l l , wrongful, and unlawful leaving of l i t t e r on public property. The s t a t e admits defendant i s only being prosecuted f o r t h e reasons he i s "a named permittee responsible f o r the area which became l i t t e r e d and was l e f t a s l i t t e r e d while i n the scope and mantle of h i s responsibility." (Emphasis supplied.) This i s not even a proven f a c t . The permit was issued t o San- ford and Sons and one of the sons, i n court, admitted t o being the responsible party a f t e r h i s father l e f t the campsite. The judgment of conviction is reversed and the case i s dismissed. , ' A - ~kkief J u s t i c e

June 22, 1977

390d9325-ee64-4501-8047-b151117aedcf

SANT v BARIL

N/A

13180

Montana

Montana Supreme Court

No. 13180 I N THE S U S R E M E COUKT O F THE STATE OF MONTANA 1977 ARTHUR H. S A N T and EDNA SANT, P l a i n t i f f s and Appellants, v. LAURA THELMA BARIL, A s Administratrix of t h e Estate of A.R. SMITH, Deceased, Defendant and Respondent. And LAURA THELMA BARIL, A s Administratrix of the Estate of A.R. Smith, Deceased, P l a i n t i f f and Respondent, ROBERT SANT, Defendant and Appellant. Appeal from: D i s t r i c t Court of the F i f t h J u d i c i a l D i s t r i c t , Honorable Peter Meloy, Judge presiding. Counsel of Record: For Appellants : Landoe, Gary and Planalp, Bozeman,Montana Robert Planalp argued, Bozeman, Montana For Respondent : Chester Lloyd Jones argued, Virginia City, Montana Douglas Smith argued, Sheridan, Montana. F i l e d : . I@ i g f i aamw 2 t " i G a " . , L < -7" - Clerk. Submitted: March 9, 1977 Decided : J - 9 I977 M r . Justice Gene B. Daly delivered the Opinion of the Court. This appeal arises out of two causes of action which were consolidated for t r i a l by jury in the d i s t r i c t court, Madison County. The f i r s t cause i s a s u i t for damages under a land lease executed between lessors, A. R. Smith and Laura Smith, and lessee Arthur H. ' Sant. This s u i t was brought by Arthur H. Sant and Edna Sant (Sants), against the Administratrix of the Estate of A. R. Smith (Administratrix). Plaintiffs appeal from the d i s t r i c t court granting defendant's motion t o dismiss, a f t e r p l a i n t i f f s presented t h e i r case and rested. The second cause is a s u i t t o recover on a promissory note held by the F i r s t National Bank of Twin Bridges, Twin Bridges, Montana, and executed by the Sants and t h e i r son, Robert Sant. The promissory note was assigned t o the Administratrix and s u i t was brought by the Administratrix against Robert Sant. The dis- t r i c t court treated t h i s action as a counterclaim. Robert Sant appeals from the d i s t r i c t court's order directing the jury t o return a verdict for the Administratrix. In F i r s t National Bank v. Sant, 161 Mont. 376, 506 P.2d 835, t h i s Court discussed some of the legal problems existing i n the present action. A s a means of introduction and clarification, we review our holding i n that case. I n F i r s t National Bank v. Sant, supra, the Sants appealed from a d i s t r i c t court judgment granting foreclosure on t h e i r r e a l and personal property. This judgment of foreclosure was rendered i n favor of the F i r s t National Bank of Twin Bridges which sought t o foreclose on a mortgage executed by Arthur H. Sant on July 9, 1970, and held by the F i r s t National Bank of Twin Bridges. The mortgage instrument was entitled "(Plan of Paris Robert)". Paris Robert was the president of the First National Bank of Twin Bridges. The plan purported to relieve the Sants of ldAbility for certain creditor debts and balances due the bank on existing notes. This release was to be accomplished through the b a n k ! s disbursement of funds made available to the Sants by virtue of their executing three promissory notes. The notes were in the amounts of $17,690.62; $2,788.05; and $12,968.74, and each bearing interest at the rate of ten percent per annum. Certain real and personal property of the Sants was listed as collateral for the mortgage and $50 was charged by the bank as an expense for organizing the credit plan and overseeing the payments. The plan was divisible into three parts with the promissory notes for $17,690.62 and $2,788.05 to mature February 5, 1971; while the note for $12,968.74 matured on April 1, 1971. At the time First National Bank v. Sant was heard none of the promissory had been paid by the obligors. The notes for $2,788.05 and $12,968.74 were held by the bank and no actual disbursements were made to Continental Oil Co. via Russell Lepp, or to A. R . Smith, both listed as corresponding creditors to these notes. It is the $12,968.74 debt which confronts us in the instant case in the form of the July 9, 1970 promissory note and the assignment of that note. The plan indicates the $12,968.74 debt was a consolidation of debts owed by the Sants to A. R. Smith. Specifically, these debts are listed as an old promissory note of $8,240; $728.74 in interest on this old note; and $4,000 consideration for a 1970 lease. These items are of importance later in this opinion. W e held i n F i r s t National Bank v. Sant that the bank was barred from foreclosing on the promissory notes i n the amount of $2,788.05 and $12,968.74 and the Sants were entitled t o a credit i n the amount of $1,214.32 on the promissory note for $17,690.62. The basis for the $1,214.32 credit was the finding that while the bank had charged $50 as expense for setting up the plan and had charged ten percent interest on the promissory notes, Paris Robert, as agent for the bank, had secretly negotiated with the Sants' creditors for discounts o r rebates as a collection fee. W e found the bank's failure t o disclose such negotiations a breach of a duty owed the principal by h i s agent and held the Sants entitled to the amount of the rebates, $1,214.32. The basis for denying the bank foreclosure on the $2,788.05 and $12,968.74 promissory notes was the finding that the notes were not supported by legal consideration. For example, the $12,968.74 promissory note was purportedly executed t o evidence debts owed by the Sants to A. R. Smith. However, the promissory note was drafted and held by the F i r s t National Bank of Twin Bridges and executed by the Sants and Robert Sant. Since there has never been a showing of any o r a l or express t r u s t , partnership, agency, joint venture o r other such relationship between A. R. Smith and the bank, the promissory note is void for the purpose of establishing the $12,968.74 debt between A. R. Smith and the Sants. The only evidence of any agency relationship is the penciled words "A.R.Smith Trust" which emboss the promissory note and were allegedly written by Paris Robert. In F i r s t National Bank v. Sant w e s e t forth those policy reasons which directed why such evidence should not be equated with an express o r o r a l agreement creating a partner- ship, agency, or t r u s t relationship and, though w e refrain from repeating those policy reasons here, we affirm thebask for that holding . - 3 - W e note that F i r s t National Bank v. Sant never discussed the legal sufficiency of the debts embodied i n the $12,968.74 promissory note: "This holding does not affect any preexisting or present debt between Sant and Smith * * *." 161 Mont. 387. That case held only that the $12,968.74 promissory note could not be sued upon because it was not supported by legal considera- tion. Such a holding i s f a t a l to any attempt by the Administratrix here t o collect on the same promissory note assigned by the bank, apparently without consideration. Any attempt by the Administra- t r i x t o recover a debt of $12,968.74 must be by an action indepen- dent of the promissory note and must be proven by evidence estab- lishing anobligee/obligor relationship. A s u i t t o recover on .the promissory note held by the bank and executed by the Sants and Robert Sant f a i l s to establish such a debt. Therefore, w e hold the d i s t r i c t court erred when it directed the jury t o return a verdict for the Administratrix on the counterlclaim t o recover on the promissory note and that action is dismissed. The remaining issue i s whether the d i s t r i c t court erred when it granted the Administratrix' motion t o dismiss a f t e r the Sants had presented t h e i r case and rested i n the action for damages under the land lease. W e i n i t i a l l y recognize that counsel for the Administratrix incorrectly moved for dismissal i n t h i s jury t r i a l and the d i s t r i c t court inadvertently granted the motion. Rule 41(b), M.R.Civ.P., i s controlling: "(b) INVOLUNTARY DISMISSAL--EFFECT THEREOF. For failure of the p l a i n t i f f t o prosecute o r t o comply with these rules or, any order of court, a defendant may move for dismissal of an action or of any claim against him. After the p l a i n t i f f , i n an action t r i e d by the court without a jury, has completed the presenta- tion of h i s evidence, the defendant, without waiving h i s right t o offer evidence i n the event the motion is not granted, may move for a dismissal on the ground that upon the facts and the law the plaintiff has shown no right t o r e l i e f . The court a s t r i e r of the facts may then determine them and render judgment against the plaintiff o r may decline t o render any judgment u n t i l the close of a l l the evidence, I f the court renders judgment on the merits against the p l a i n t i f f , the court shall make findings as provided i n Rule 52(a). Unless the court i n i t s order for dismissal otherwise specifies, a dismissal under t h i s subdivision and any dismissal not provided for in t h i s rule, other than a dismissal for lack of jurisdiction or failure t o join a party under Rule 19, operates as an adjudication upon the merits." ' The Advisory Committee's note t o the September 29, 1967 Amendment t o Rule 41(b), states: I I Source: F ~ ~ . R , , C ~ V . P . 41(b), as amended 1963 and 1966. "Explanation of change: Under the prior text of the second sentence of t h i s subdivision [Rule 41(b) 1, the motion for dismissal a t the close of the p l a i n t i f f ' s evidence may be made i n a case t r i e d t o a jury as well a s i n a case t r i e d without a jury. But when made i n a jury-tried case, t h i s motion overlaps the motion for a directed verdict under Rule 50(a), which i s also available i n the same situation, This overlap has caused confusion. Accordingly it is amended t o provide that the motion for dismissal a t the close of the p l a i n t i f f ' s evi- dence shall apply only t o nonjury cases (including cases t r i e d with an advisory jury). Hereafter the correct motion i n jury-tried cases would be a motion for a directed verdict. This amendment .involves no change of substance. "The f i r s t sentence of Rule 41(b), providing for dismissal for failure t o prosecute or t o comply with the Rules o r any order of court, and the general provisions of the l a s t sentence remain applicable i n jury as well as nonjury cases. "This amendment also changes the l a s t sentence of t h i s subdivision t o accord with the amendment t o Rule; 19,': . (Emphasis added.) A motion for directed verdict was not offered i n the instant case. However, both parties recognize the error and counsel t r e a t the motion for dismissal as a motion for directed verdict i n t h e i r briefs. Thus, for purposes of t h i s review w e w i l l likewise t r e a t the motion for dismissal as a motion for directed verdict under Rule 50(a), M,R.Civ.P.; 9 Wright & Miller, Federal Practice and Procedure: C i v i l 5 2371; Warren v. Hudson Pulp & Paper Corp., 477 F.2d 229,232; Haugen v. Minnesota Mining and Manufacturing Co., 15 Wash.App. 379, 550 P.2d 71. The basic r u l e governing our analysis of t h e granting of a motion f o r directed verdict is s e t out i n section 93-5205, R.C.M. 1947: "Where, upon the t r i a l of an issue by a jury, the case presents only questions of law, the judge may d i r e c t the jury t o render a verdict i n favor of the party en- t i t l e d thereto ." Case authority i n Montana has established three basic r u l e s which apply i n interpreting section 93-5205. 1. Upon a motion f o r directed verdict i n favor of defendant, the evidence introduced by p l a i n t i f f w i l l be considered i n the l i g h t most favorable t o p l a i n t i f f and a s proving whatever it tends t o prove. 2. A cause should never be withdrawn from the jury unless the conclusion sought t o be drawn from t h e f a c t s must follow a s a matter of law and recovery cannot be had upon any view which could be reasonably drawn from the f a c t s which the evidence tends t o prove, 3, I n reviewing an order directing a verdict f o r defendant, the reviewing court w i l l only consider the evidence introduced by the p l a i n t i f f and i f t h a t evidence, viewed i n the l i g h t most favorable t o the p l a i n t i f f , tends t o e s t a b l i s h the case made by the p l a i n t i f f ' s pleadings the order w i l l be reversed. See: Hannifin v. R e t a i l Clerks, 162 Mont. 170, 511 P.2d 982; M d l e r v.,Svejkovsky, 153 Mont. 416, 458 P.2d 265; Pickett v. Kyger, 151 Mont. 87, 439 P.2d 57; McIntosh v. Linder-Kind Lumber Co., 144 Mont, 1, 393 P,2d 782, The t e s t commonly employed t o determine i f the evidence i s legally s u f f i c i e n t t o withdraw cases and issues from the jury is whether reasonable men could draw d i f f e r e n t conclusions from the evidence. Collins v. Itoh, 160 Mont. 461, 503 P.2d 36; Hoffman v. Herzog, 158 Mont. 296, 491 P.2d 713; Shields v. Murray, 156 Mont. 493, 481 P.2d 680; Bridges v. Moritz, 149 Mont. 273, 425 P.2d 721. I f only one conclusion i s reasonably proper, then the directed verdict i s proper. I n the instant case the Sants presented evidence i n the d i s t r i c t court which tended t o prove: (1) That a written lease for the years 1966 through 1968 was executed between the lessors, A . R. Smith and Laura Smith, and the lessee, Arthur H. Sant; (2) t h a t the written lease was o r a l l y extended f o r a period of two years, through April 1971; (3) t h a t the terms of the lease provided the lessee was e n t i t l e d t o the exclusive possession and control of the leased premises, including a house on the leased property; (4) t h a t the Britton family was a tenant of the Sants, residing i n the house on the leased property, and the Sants were legally within t h e i r r i g h t s i n attempting t o e v i c t the Brittons; (5) t h a t A . R. Smith and members of h i s family restrained the Sants from evicting the Brittons, and thus interfered with the ants' exclusive possession of the premises; (6) t h a t i n t e r f e r - ence with the ants' exclusive possession of the premises was a violation of the lease provisions; (7) t h a t a s a r e s u l t of the ants' i n a b i l i t y t o e v i c t the Brittons the Sants were unable t o house employees who could work i n the Sants' potato f i e l d s ; (8) t h a t a s a r e s u l t of the Sants' i n a b i l i t y t o house employees t h e i r unattended potato crop f o r the 1970 crop season was damaged by disease, substantially affecting the s a l e p r i c e of the crop; (9) t h a t the Sants' incurred monetary damages resulting from the diseased c ~ ~ n ~ d i t i o n 3-f: Eheir potaco crop, the spread of the disease being proximately caused by A. R. Smith and members of h i s family by preventing the Sants from providing housing f o r 2mployees. I n establishing t h e i r case the Sants presented evidence in i h s 2orm of : (1) The written lease and option executed by che lessors and lessee; (2) t h e testimony of workers who t e s t i - f i e d they and t h e i r families were prepared t o work f o r the Sants and aid i n saving the Sants' diseased potato crop, but were com- pelled t o find other employment when the Sants were unable t o supply housing; (3) the testimony of h o r t i c u l t u r e experts who t e s t i f i e d regarding the blackleg disease which infected t h e Sants' 1970 potato crop and the potential f o r recovering c e r t i f i - cation of the potato crop by manual roguing of the potato plants. The evidence, when viewed i n the l i g h t most favorable t o the Sants, could persuade reasonable men t o conclude the damages incurred by the Sants was a t t r i b u t a b l e t o A. R. smith's alleged interference with the Sants' exclusive possession of the leased premises. The evidence c l e a r l y presents questions of f a c t a s to the proximate cause of the damages incurred by the Sants i n the 1970 crop season. I n any event, the Administratrix was not e n t i t l e d t o judgment a s a matter of law. Therefore, the d i s t r i c t court ' s order and judgment granting the Administratrix' motion t o dismiss i s reversed and the cause is remanded f o r t r i a l on the issues. W e note t h e record f a i l s t o disclose any payment by the Sants on the purported o r a l lease f o r the 1970 crop season. Absent proof of payment, any p o t e n t i a l recovery by the Sants for damages would b e setoff agair~sc the lease consideration. The judgment of the d i s t r i c t court i s reversed and t h e cause is remanded, consistent with t h i s opinion. 4 4 ' J u s t i c e . W e Concur: -1 /.

June 9, 1977

4a49f2a6-aa94-429f-b8c9-6f7d7ad5e015

STATE EX REL SWART v CASNE

N/A

13561

Montana

Montana Supreme Court

No. 13561 I N THE S U P R E M E COURT O F THE STATE O F MONTANA 1977 THE STATE O F MONTANA, ex rel. CHARLES R. SWART, P e t i t i o n e r and Respondent, EDWARD W. CASNE, Chief, Subdivision Bureau, Environmental Sciences Division, Montana Department of Health and Environmental Sciences; C A R L STUCKY, Clerk and Recorder f o r t h e County of G a l l a t i n , S t a t e of Montana; and t h e MONTANA D E P A R T M E N T O F COMMUNITY AFFAIRS, Respondents and Appellants. Appeal from: District Court of t h e Eighteenth J u d i c i a l D i s t r i c t , Honorable W.W. Lessley, Judge presiding. Counsel of Record: For Respondent: James Goetz argued, Bozeman, Montana For Appellants: Richard M. Weddle argued, Helena, Montana Stan Bradshaw argued, Helena, Montana John P. S i l l y argued, Deputy County Attorney and Thomas Budewitz appeared, Deputy County Attorney, Bozeman, Montana Submitted: March 9 , 1977 Decided : & ! Y 1 9 1 $ a 4 Mr. Justice Frank I . Haswell delivered the Opinion of the Court. Defendants appeal from a writ of mandate issued by the district court, Gallatin County, Hon. W. W. Lessley, dis- trict judge, ordering them (1) to lift sanitary restrictions and record a certificate of survey on certain property within the City of Bozeman, and (2) assessing $750 attorney fees plus costs against the State Department of Community Affairs. Relator is Charles R. Swart, a licensed and registered land surveyor. The three defendants are Edward W. Casne, chief of the Subdivision Bureau of the Environmental Sciences Division of the Montana Department of Health and Environmental Sciences (MDH); Carl Stucky, the clerk and recorder of Gallatin County; and the Department of Community Affairs of the State of Montana (DCA) . The subject property is a parcel of land containing 9,361 square feet located in Block 50, Northern Pacific Addition to the City of Bozeman, Gallatin County, Montana. The original plot was recorded many years ago and shows 24 lots in Block 50. The subject property consists of five lots numbered 13, 14, 15, 16, and 17, located in the southwest corner of Block 50. A house which is connected to city water and sewage facilities is located on the subject property. Relator surveyed the five lots and prepared a certificate of survey showing a straight line dividing each lot into sub- stantially equal parts. The owner attached a certificate of exemption from the requirements of the Montana Subdivision and Platting Act as an "occasional sale" pursuant to section 11- 3862(6) (d), R.C.M. 1947. Apparently the owner wants to sell the east half of the five lots comprising a square shaped parcel. The certificate of survey was presented to defendant Casne who refused to remove the sanitary restrictions on the subject property because two administrative regulations of DCA provided, in effect, that any resubdivision or redesign of a recorded subdivision plat had to be filed as an amended plat after review and approval of local authorities. MAC 22-2.4B(6)- S420(4)(a), Procedural Requirements for Local Regulations and MAC 22-2.4B (30) -S4090 (3) (a) , Uniform Standards for Certificates of Survey. Thereafter the Gallatin County clerk and recorder re- fused to accept for filing the certificate of survey because he believed that under the foregoing DCA regulations and under Gallatin County subdivision regulations an amended plat was required and the sanitary restrictions had not been lifted. Relator then filed the present action seeking a writ of mandate to compel the lifting of sanitary restrictions, the filing of the certificate of survey, and payment of his attorney fees and costs in the action. The case was submitted to the district court on the basis of a stipulation of facts and an evidentiary hearing. The district court entered findings of fact, conclusions of law, and a writ of mandate granting relator the requested relief. Among other things, the district court made findings of fact that no genuine problems existed relating to water availability, sewage disposal, solid waste disposal, or other environmental factors, and that the refusal to lift sanitary restrictions and file the certificate of survey was not based on any such factors. The essence of the district court's con- clusions of law was that the certificate of survey qualified as an "Occasional sale" under the Subdivision and Platting Act and was accordingly exempt from the surveying and platting re- 11- quirements for subdivisions (Sec./3862 (6) (d) , R.C .M. 1947) ; that the two administrative regulations of DCA, Gallatin County sub- division regulations, and the City of Bozeman subdivision regula- tions, were in conflict with the statute and void; that there was a clear legal duty to lift the sanitary restrictions and file the certificate of survey; that a writ of mandate was a proper remedy; and that attorney fees of $750 and costs should be awarded relator against DCA. All defendants appeal from the judgment. We summarize the issues for review in this manner: (1) Are the administrative regulations of DCA void? (2) Is a writ of mandate a proper remedy? (3) Should attorney fees be awarded? The substance of defendants argument on the first issue is that the DCA regulations simply implemented the Subdivision and Platting Act; were within the rule-making authority delegated to it by the legislature; and the DCA regulations were not in conflict with the Subdivision and Platting Act. They view MAC 22-2.4B (6) -S420 (4) (a) and MAC 22-2.4B (30) -S4090 (3) (a) as providing standards by which local authorities can determine whether the "occasional sale" exemption in the Subdivision and Platting Act in fact constitutes an evasion of its requirements. They argue that the DCA administrative regulations carry out the broad objectives of the Subdivision and Platting Act and that absent these regulations, two conflicting sets of boundary records and haphazard land development would result. They fur- ther contend that the DCA regulations do not conflict with the Subdivision and Platting Act; that the district court's finding that they do conflict ignores established rules of statutory construction; and that the district court's implied finding that the "occasional sale" exemption applies to resub- division and redesign of lots in recorded plats is error. Section 11-3862(6), R.C.M. 1947, of the Subdivision and Platting Act provides the "occasional sale" exemption: "(6) Unless the method of disposition is adopted for the purpose of evading this act, the follow- ing divisions of land are not subdivisions under this act but are subject to the surveying re- quirements of this section for divisions of land not amounting to subdivision. "(d) A single division of a parcel when the trans- action is an occasional sale." Section 11-3861(13), R.C.M. 1947, of the Subdivision and Platting Act defines an "occasional sale": "As used in this act, unless the context or sub- ject matter clearly requires otherwise, the following words or phrases shall have the follow- ing meanings: "(13)'Occasional sale' means one sale of a division of land within any twelve (12) month period." Section 11-3861(12), R.C.M. 1947, of the Subdivision and Platting Act provides that "any resubdivision" is a subdivision within the meaning of the act. These statutes are clear and unambiguous. They plainly provide that although a resubdivision or redesign of an existing subdivision constitutes a subdivision under the act, an "occa- sional sale" is exempt from the requirements applicable to sub- divisions, i.e., the lifting of sanitary restrictions by MDH, the preparation of an amended plat with review and approval of local authorities, and the filing of an amended plat instead of a certificate of survey. Where the language of a statute is plain, unambiguous, direct and certain the statute speaks for itself and there is nothing left for the court to construe. Keller v . Smith, Mont. , 553 P.2d 1002, 33 St.Rep. 828; Dunphy v. Anaconda Co., 151 Mont. 76, 438 P.2d 660, and cases cited therein. Our function is simply to declare what in terms or substance is contained in the statute, and neither insert what has been omitted nor omit what has been inserted. Section 93-401-15, R.C.M. 1947; Clark v. Hensel Phelps Construction Co., Mont . , 560 P.2d 515, 34 St.Rep. 61; Hammill v. Young, b l o n t . , 540 P.2d 971, 32 St.Rep. 935. Defendants argue, however, that such construction of the pertinent provisions of the Subdivision and Platting Act conflict with many recognized principles of statutory construc- tion including the rule that a particular provision of a statute controls over a general provision (section 93-401-16, R.C.M. 1947; City of Billings v. Smith, 158 Mont. 197, 490 P.2d 221); that legislative intent must be determined by a consideration of the act as a whole (State ex rel. Jones v. Giles, Mont . I 541 P.2d 355, 32 St.Rep. 983; State ex rel. Cashmore v. Anderson, 160 Mont. 175, 500 P.2d 921, cert. denied Burger v. Anderson, 410 U.S. 931, 93 S.Ct. 1372, 35 L Ed 2d 593; Sutherland, Stat- utory Construction, 4th Ed., Vol. 2A, Sec. 46.05, p. 56); that in construing a statute, the court should, where possible, adopt a construction which will give effect to all provisions (section 93-401-15, R.C.M. 1947; State Board of Equal. v. Cole, 122 Mont. 9, 195 P.2d 989); and that statutes should be construed to produce a reasonable result (section 49-134, R.C.M. 1947; Keller v. Smith, supra; Sutherland, Statutory Construction, 4th Ed., Vol. 2A, Sec. 46.05, p. 56). The short answer to this contention is that these rules of statutory construction apply to cases involving conflicting or ambiguous provisions of a statute where the court is required to construe and interpret the meaning of a statute. They have no application where, as here, the language of the statute is clear and unambiguous. In the latter case, courts cannot go beyond the language of the statute and apply extrinsic rules of construction but must declare what the statute plainly states. Keller v. Smith, supra; Dunphy v. Anaconda, supra. The two DCA regulations in question are identical. They were promulgated and adopted by DCA as part of the Montana Administrative Code, MAC 22-2.4B (6) -S420 (4) (a) and MAC 22-2.4B (30) -S4090 (3) (a) . They provide: "Procedures for divisions of land exempted from public review as subdivisions--use of exemptions for the purpose of evading the act. Unless the method of disposition is adopted for the purpose of evading the Montana Subdivision and Platting Act, divisions of land meeting the criteria set out in section 11-3862(6), R.C.M. 1947, are not subdivisions subject to review under the Act. To assure that the method of disposition is not used to evade the act the following requirements must be met in the use of exemptions. "(a) The exemptions contained in section 11-3862(6), R.C.M. 1947, do not apply to the resubdivision or redesign of subdivisions platted and filed with the clerk and recorder. Any such resubdivision or redesign must be reviewed and approved by the govern- ing body and an approved amended plat thereof must be filed with the clerk and recorder." These regulations are in direct conflict with the provisions of the Subdivision and Platting Act heretofore set forth in section 11-3862. They eliminate the statutory exemption as applied to "resubdivisions or redesign" of platted and recorded subdivisions. They require an amended plat reviewed and approved by the govern- ing body to be filed with the clerk and recorder in direct con- tradiction to the statutory exemption. They engraft additional and contradictory requirements on the statute in the guise of defining and implementing the evasion of statutory requirements. They frustrate the purpose of the "occasional sale" exemption of the Act. As such, the DCA regulations are void on their face. See Bartels v. Miles City, 145 Mont. 116, 399 P.2d 768. It is axiomatic that a statute cannot be changed by administrative regulation. See Begay v. Graham, 18 Ariz.App. 336, 501 P.2d Defendants further contend that the DCA regulations are clearly within the powers delegated to DCA by the legislature and cite section 11-3863(2), R.C.M. 1947, providing that DCA has authority to prescribe reasonable minimum requirements for subdivision regulations under the Subdivision and Platting Act which shall include detailed criteria for the content of the environmental assessment required by the Act and shall provide for review of preliminary plats. This grant of authority does not include the right to promulgate regulations in direct conflict with the Act. Where, as here, the Act provides for exemption of occasional sales from the subdivision requirements, DCA cannot prescribe subdivision regulations eliminating the exemption for the reasons heretofore stated. An administrative agency is not a "super legislature" empowered to change statutory law under the cloak of an assumed delegated power. Defendants next contend that a writ of mandate is not a proper remedy in this case. They argue that there is no clear legal duty to lift the sanitary restrictions or file the certifi- cate of survey. They point out that the thrust of relator's complaint is that the DCA regulations are invalid which requires a declaratory judgment action rather than extraordinary relief by writ of mandate. We hold there was a clear legal duty to lift the sanitary restrictions and file the certificate of survey. The DCA regu- lations were patently void on their face for reasons heretofore discussed and furnish no justification for refusal. The Bozeman Area Subdivision Regulations (Sec. 16.2) were void for the same reasons. The refusal to file the certificate of survey was not justifiable on the basis of section 69-5003(2) and (3), as this applies to subdivision plats and is inapplicable to the certificate of survey here and under our decision in State ex rel. Swart v. Stucky, Mont . , 536 P.2d 762. The Sub- division and Platting Act (section 11-3872, R.C.M. 1947) speci- fically authorized the filing of the certificate of survey here. A writ of mandate "may be issued * * * to compel the performance of an act which the law specially enjoins as a duty resulting from an office, trust or station * * *". Sec- tion 93-9102, R.C.M. 1947. The writ will issue only where the person seeking to invoke it is entitled to have the de- fendant perform a clear legal duty and there is no speedy or adequate remedy in the ordinary course of law. State ex rel. Kennedy v. Dist. Ct., 121 Mont. 320, 194 P.2d 256, 2 ALR2d 1050. Here there was a clear legal duty the defendants were required to perform for the reasons heretofore stated. A declaratory judgment action would not necessarily get the certificate of survey filed in the light of previous difficulties between petitioner and the clerk and recorder in getting such certificates filed as evidenced in State ex rel. Swart v. Stucky, supra. A declaratory judgment action would not make petitioner whole as attorney fees are not allowable in such an action. A writ of mandate is the only remedy available to secure the ulti- mate relief sought by petitioner--to compel the lifting of sani- tary restrictions, the filing of the certificate of survey, and an award of relator's attorney fees. The award of attorney fees and costs solely against DCA is proper. The void DCA regulations are the root of relator's difficulties here. Accordingly, the assessment of attorney fees and costs entirely against DCA is justifiable. We award additional attorney fees and expenses on appeal to relator solely against DCA in the amount of $973 as itemized in the affidavit filed herewith. The judgment of the district court is affirmed. Justice Justices Y 4 N THE SUPREME COURT OF THE STATE OF MONTANA No. 1 3 5 6 1 THE STATE OF MONTANA, ex rel. CHARLES R. SWART, P e t i t i o n e r and R e s p o n d e n t , VS. EDWARD W. CASNE, CHIEF, SUBDIVISION BUREAU, ENVIRONMENTAL SCIENCES D I V I S I O N , MONTANA DEPARTMENT OF HEALTH AND ENVIRONMENTAL SCIENCES; JUN 9 - 1971 CARL STUGKY, CLERK AND RECORDER FOR THE COUNTY OF GALLATIN, STATE OF MONTANA; AND THE MONTANA . 5 ! k , , , d J ( 8 n m O g . I DEPARTMENT OF COMMUNITY AFFAIRS, CLERK OF SUPREWE COUBI STATE PE MONTANA R e s p o n d e n t s and A p p e l l a n t s . O R D E R PER CURIAM: T h e p e t i t i o n of t h e M o n t a n a D e p a r t m e n t of C o m m u n i t y A f f a i r s and E d w a r d W. C a s n e for rehearing and t h e response of C h a r l e s R. S w a r t thereto w i t h request for a l l o w a n c e of addi- t i o n a l attorney's fees having been s u b m i t t e d t o t h e C o u r t for decision, I T I S ORDERED: ( 1 ) T h a t t h e f o l l o w i n g phrase be s t r i c k e n f r o m l i n e 1 1 f r o m t h e b o t t o m of page 5 of t h e opinion: " t h e l i f t i n g of sanitary restrictions by MDH", ( 2 ) T h a t the f i n a l paragraph on page 8 be s t r i c k e n and the f o l l o w i n g language s u b s t i t u t e d : "While MDH has t h e s t a t u t o r y a u t h o r i t y under section 6 9 - 5 0 0 3 ( 3 ) t o r e v i e w a certificate of survey regarding s a n i t a r y r e s t r i c t i o n s , t h i s provides no j u s t i f i c a t i o n either f o r the MDH or t h e clerk and recorder t o refuse t o process relator's certificate of survey. MDH's a u t h o r i t y t o r e v i e w a certificate of survey under section 6 9 - 5 0 0 1 , e t seq., R.C.M. 1 9 4 7 , relates t o s e w a g e disposal, w a t e r q u a l i t y and a v a i l a b i l i t y , solid w a s t e disposal and other e n v i r o n m e n t a l factors such a s r e c r e a t i o n and w i l d l i f e . Section 69-5001, R.C.M. 1947. H e r e it is admitted t h a t no such problems e x i s t e d w i t h r e s p e c t t o r e l a t o r ' s cer- t i f i c a t e of survey. Rather, t h e s o l e reason f o r M D H ' s r e f u s a l t o process r e l a t o r ' s c e r t i f i c a t e of survey was its r e l i a n c e on t h e i n v a l i d DCA r e g u l a t i o n s . " ( 3 ) Charles R. S w a r t ' s r e q u e s t f o r a d d i t i o n a l a t t o r n e y ' s f e e s i s denied. (4) A s s o modified, t h e opinion of t h e Court is approved and confirmed and r e h e a r i n g i s denied. D A T E D t h i s 9 t h day of June, 1977. Chief J u s t i c

May 19, 1977

83a39db9-4748-4458-9fa4-d6b2fae60d88

EQUITY COOPERATIVE ASSN v BECHTOL

N/A

13613

Montana

Montana Supreme Court

id09 N o . T36-36- I N THE SUPREME COURT OF THE STATE OF MONTANA EQUITY COOPEIiATIVE ASSOCIATION, A M o n t a n a C o r p o r a t i o n , P l a i n t i f f and A p p e l l a n t , JOHN F. BECHTOLD, D e f e n d a n t and R e s p o n d e n t . A p p e a l f r o m : D i s t r i c t C o u r t of t h e S i x t e e n t h J u d i c i a l D i s t r i c t , H o n o r a b l e A l f r e d B. C o a t e , Judge presiding. C o u n s e l of R e c o r d : For A p p e l l a n t : John R. C a r r argued, M i l e s C i t y , Plontana For R e s p o n d e n t : G e n e H u n t l e y argued, B a k e r , M o n t a n a S u b m i t t e d : June 7 , 1 9 7 7 D e c i d e d : dMLIl 1977 F i l e d : JuL 11 1 9 7 7 M r . J u s t i c e John Conway Harrison d e l i v e r e d t h e Opinion of t h e Court. P l a i n t i f f Equity Cooperative Association appeals from a summary judgment i n a complaint f i l e d i n t h e d i s t r i c t c o u r t , Fallon County, f o r a breach of c o n t r a c t t o d e l i v e r g r a i n . The s o l e i s s u e on appeal is whether t h e d i s t r i c t c o u r t ' s f i n d i n g s of f a c t , conclusions of law and judgment were proper i n awarding summary judgment t o defendant John F. Bechtold. O n October 31, 1972 a w r i t t e n c o n t r a c t was e n t e r e d i n t o between Equity Cooperative Association, purchaser, and John F. Bechtold, s e l l e r , f o r 50,200 bushels of wheat. The c o n t r a c t was signed i n two p a r t s , both signed on t h e same day and covered t h e same wheat. The first c o n t r a c t , designated "Contract of S a l e o f Grain No. 4-0 60644" provided f o r an advance of $5,000 on wheat t o be d e l i v e r e d l a t e r and payable a f t e r October 1973. Later, on t h e same day, t h e p a r t i e s e n t e r e d i n t o t h e second c o n t r a c t , a more s p e c i f i c one, providing f o r t h e s a l e of 50,200 bushels of wheat a t a p r i c e of $1.65 per bushel, except f o r 14,400 bushels which were t o be purchased a t $1.63 per bushel, p l u s 4,742 bushels which r e q u i r e d a p r o t e i n check b e f o r e determining t h e a c t u a l p r i c e . This c o n t r a c t was designated No. 4-0 60660. I n a d d i t i o n t o t h e advance made t o Bechtold of $5,000 on October 31, 1972, a n o t h e r i n t h e same amount of $5,000 was made on December 21, 1972, a t t h e r e q u e s t of Bechtold. I n January 1973, Bechtold d e l i v e r e d t o t h e Equity e l e v a t o r 12,700 bushels of wheat. Equity paid Bechtold, deducting t h e $10,000 advance, and he accepted and cashed a n e t check i n t h e amount of $10,387.55. A l l t h e wheat was paid f o r a t a p r i c e of $1.63 per b u s h e l . There is c o n f l i c t i n t h e statements of Bechtold and Novak, E q u i t y ' s manager, on whether Bechtold o b j e c t e d t o t h e $1.63 p r i c e . 5 y b i . t ~ 3ldirris ally .dii'I?el)er~ce i r l 2rice was t o be adjusted upon ;ampletion of the c o n t r a c t . Bechtold delivered wheat t o Squity over a four month ,~erjiod, being paid each time. The l a s t d e l i v e r y was made on \iiay 5, 1973 when he was paid $4,175.24. A l l t o l d some 15,069 bushels were delivered and Equity sought s p e c i f i c performance 31' the contract seeking the d e l i v e r y of 35,161 bushels of grain ' ~ r ; i.n the a l t e r n a t i v e damages f o r breach of contract i n the dmount of $5.00 per bushel or $175,805. Rule 5 6 ( c ) , M.R.Civ.P. provides t h a t summary judgment is proper i f : "* * * the pleadings, depositions, answers t o i n t e r r o g a t o r i e s , and admissions on f i l e show t h a t there i s no genuine issue a s t o any material f a c t and t h a t the moving party i s e n t i t l e d t o a judgment a s a matter of l a w * * *." See: Harland v. Anderson, Mont . , 548 P.2d 613, 33 St.Rep. 363. Here the record i s r e p l e t e wi.th f a c t questions. The d l s t r i c t zourt erred i n granting summary judgment. The d i s t r i c t court does not function t o adjudicate genuine i-ssues of f a c t on a motion f o r summary judgment cause--it merely determines whether such issues e x i s t . Thus the party opposing the motion, Equity, w i l l be indulged t o the extent of a l l i-nferences which may be reasonably drawn. Mally v. Asanovich, 149 Mont. 99, Some of the genuine f a c t issues r a i s e d here a r e these questions : 1. Whether under the contract t h e r e was t o be an adjustment i n the price paid of $1.63 and $1.65 and the number 01' bushels a t those prices? 2 . Was there a breach by Bechtoldfs f a i l u r e t o d e l i v e r ? . Did Bechtold f a i l t o d e l i v e r a f t e r being requested 50 lo sd Sy 3quity! ' 4 . W a s Bechtolcl's i'ai l u r e !;o ~~erl'orm t h e contraci; due co g r e a t i n c r e a s e i n t h e p r i c e of g r a i n - - a f t e r he s i g n e d t h e 2 drl t r a c t ? 5. Why d i d he n o t d e l i v e r ? L'nei;e Are 3. few of t h e f a c t s t h a t must be answered by a jury t;~lia 1 . Judgment of t h e d i s t r i c t c o u r t i s r e v e r s e d and t h e c a u s e r.emailileJ f o r f u r t h e r proceedings. Chief J u s t i c e

July 11, 1977

6c8efbc9-9a09-4231-8e4f-daaa69dfc32f

STANDARD INS CO v STURDEVANT

N/A

13470

Montana

Montana Supreme Court

No. 13470 I N T H E SUPREME C O U R T O F T H E STATE O F MONTANA 1977 S T A N D A R D INSURANCE COMPANY, a c o r p o r a t i o n , P l a i n t i f f and Respondent, H A R O L D L. STURDEVANT, Defendant and Appellant. Appeal from: D i s t r i c t Court of t h e Fourth J u d i c i a l D i s t r i c t , Honorable Edward Dussault, Judge p r e s i d i n g . Counsel of Record: For Appellant: Tipp and Hoven, Missoula, Montana Raymond Tipp argued, Missoula, Montana For Respondent : Raymond J. Fox argued, Missoula, Montana F i l e d : Submitted: A p r i l 1 9 , 1977 Decided : j u ~ 2 1 1 9 n X r . Zus'iice 3auiel 2. Shea delivered the dpinion of the Court. This i s an appeal from a nonjury judgment of the d i s t r i c t c o u r t , Missoula County, i n an action t o recover on a promissory note. Harold L. Sturdevant, appellant, entered into an agency- manager employment contract with Standard Insurance Company, respondent, i n 1962. Under the terms of the contract, Sturdevant w d s appointed manager of Standard's agency i n Missoula, Montana. 5e agreed t o maintain the agency and r e c r u i t and t r a i n sub-agents, A S well a s personally procure insurance applications. The p a r t i e s diltered i n t o similar contracts i n 1963 and 1968 a s t o new business dZter those dates. Sturdevant also executed a promissory note i n 1968 t o repay loans made t o him by Standard. Income derived from ~ t u r d e v a n t ' s contracts was t o be applied t o the note. Standard sued t o c o l l e c t the balance due on the note and Sturdevant counterclaimed seeking vested renewals under the con- Eracts, which he alleged were s t i l l i n e f f e c t . I n i t s reply T V he counterclaim Standard alleged termination of the contracts. The p a r t i e s agreed t o determine a f t e r t r i a l the amount due each ~ t h e r based upon the termination date found by the d i s t r i c t court. Judgment was entered i n favor of Standard establishing 3eptember 15, 1969 a s the termination date of the contracts and provided f o r further hearing, i f the parties could not agree on the dinounts due. The only issue presented for review by Sturdevant i s whether the d i s t r i c t court erred i n determining the agency-manager con- tracts were terminated on September 15, 1969. Sturdevant contends Lhe contracts extended through 1971. On August 14, 1969, Frank Burger, Sturdevant ' s supervisor with Standard, wrote this letter to Sturdevant: "Dear Harold: "This is to confirm our conversation of August 12, at which time you tendered verbal notice of intent to resign effective September 15. It is the purpose of this letter to acknow- ledge your intent. "Once we have determined who the replacement will be, I will advise. I will appreciate very much your effort to make the transition a orderly and trouble- free one from a service standpoint. "We ' 11 be in touch.' * * *" Burger testified that on August 12, 1969, Sturdevant told him he to resign and was "throwing in the and Burger accepted the resignation. Sturdevant, on the other hand, testified Burger and he had disagreements during the conversation, but when Burger asked if he intended to resign, Sturdevant merely replied it might come to that. Sturdevant testified he did not intend to resign and he did not think his contracts and position as manager were terminated. Therefore, he ignored the letter. Sturdevant's testimony was supported at trial by several agents in the Missoula office. Agent Swenson testified Sturdevant told him he would not resign; and agent Moffett testified Sturde- vant showed him Burger's letter and said he did not resign. Sturdevant, however, did leave the office in September 1969 and according to Moffett, he never again worked/as manager. After Sturdevant left Standard's office, Burger testified he had no knowledge of any work performed by Sturdevant for Standard. Although Sturdevant took only personal family pictures when he left the office, Burger collected the rest of Sturdevant's property and later delivered it to him. After his departure from Standard, Sturdevant opened another insurance office, hired new agents and had contracts with and was licensed to sell for other companies. He testified however, that he kept Standard's insurance in force and serviced Standard policies at his new office. There is no evidence he sold more insurance for Standard, after opening his new office. In urging a different termination date than September 1969, Sturdevant makes three arguments: ( 1 ) The letter from Burger to Sturdevant did not comply with contract provisions allowing termination upon thirty days written notice since it did not specifically mention termination of the contracts, but only referred to intent to resign. ( 2 ) Since Standard obtained an agent's license for Sturdevant until 1971, the agency-manager contract could not have been terminated before 1971 when the license was not renewed. ( 3 ) The evidence was not sufficient to show the contracts were terminated by mutual consent. Concerning the first argument it is true that Burger's letter does not explicitly refer to "termination of the contracts1', but its meaning is clear and unambiguous, and constitutes adequate notice under the contracts. Clearly, Sturdevant understood its meaning enough to remove himself from Standard's offices and to open up another insurance business as an agent for other com- panies . In his second argument, Sturdevant misconstrues the appli- cation of Title 40, Chapter 33, R.C.M. 1947, concerning the licensing of insurance agents. This chapter provides, for purposes here, that an insurance license cannot be issued unless the recipient is appointed an agent by an authorized insurer. Since Standard somehow licensed Sturdevant until 1971, Sturdevant 3rgues h i s agency-manager contracts with Standard could not be ~erminated before 1971. But this licensing requirement is pri- marily for the protection of the public and is not meant to ereate private rights between the agent and insurance company as contended in this case. 16 AppLleman Insurance Law and Prac- While innocent third parties would be protected against any attempt by Standard or Sturdevant to repudiate its agency rela- tionship between 1969 and 1971, this does not by itself entitle Sturdevant to assert a contractual right of agency-manager with Standard between the years 1969 and 1971. It is certainly a factor to be considered, but only in light of all the circumstances, and here there was evidence that Standard renewed the license because of a clerical oversight. Sturdevant is clearly wrong in his last argument that the evidence was not sufficient to establish a mutual rescission. Termination of a contract by mutual consent is a question of fact for the district court. Cruse v. Clawson, 137 Mont. 439, 35.2 P.2d 989. In West River Equipment Co. v. Holzworth, 134 Yont. 582, 587, 335 P.2d 298, we held that a written contract may be cancelled by mutual consent and the cancellation may be oral. The Court stated: I t However, mutual cancellation must be clearly expressed and shown, and acts and conduct of the parties to be sufficient must be clear, convincing and inconsistent with the existence of the contract. [Citing cases] ." In support of his contention there was no mutual agreement to terminate the contracts, Sturdevant relies on evidence that he did not submit a written resignation; his license was ,. renewed until 1971; he ignored Burger's letter; he took only pictures from the office; he continued t o keep the insurance i n force and service policies; and, he t o l d h i s agents he did not resign. While t h i s evidence c l e a r l y put the issue i n dispute, there was substantial evidence t o the contrary s u f f i c i e n t t o support the d i s t r i c t c o u r t ' s determination the contracts t e r - minated on September 15, 1969. The d i s t r i c t court was j u s t i f i e d i n concluding t h a t Sturdevant's departure from Standard's o f f i c e a l s o resulted i n h i s departure from the agency-manager contract he had with Standard. W e note t h a t determination of the amount of money due was deferred u n t i l a f t e r t r i a l and appeal, apparently pursuant t o Rule 4 2 ( b ) , M.R.Civ.P. Multiple t r i a l s and appeals a r i s i n g from a single dispute may create a severe burden i n terms of increased cost t o the l i t i g a n t s , delay i n resolution of the controversy, and court congestion. Where there i s no danger of prejudice and the issues a r e not complex the necessity of separate t r i a l s should be carefully weighed by the d i s t r i c t court t o ensure the rule i s not abused. W e affirm the judgment and remand t h i s cause f o r further proceedings consistent with t h i s opinion. W e Concur:

June 21, 1977

c86bf991-e1ca-4fd3-8f68-0eed90540ec9

BIEGALKE v BIEGALKE

N/A

13362

Montana

Montana Supreme Court

No. 13362 IN THE SUPREME COURT OF THE STATE OF MONTANA PAUL RIEGALKE, Plaintiff and Appellant, Counter-Claim-Defendant, MADELINE BIEGALKE, Defendant and Counter-Claim Plaintiff. Appeal from: District Court of the Sixteenth Judicial District, Honorable A. B. Martin, Judge presiding. Counsel of Record: For Appellant: Sandall, Cavan and Edwards, Billings, Montana John Cavan argued, Billings, Montana For Respondent : Cate, Lynaugh, Fitzgerald and Huss, Billings, Montana Jerome J. Cate argued, Billings, Montana Filed : Submitted: January 25, 1977 Decided : dday 2 3 I $ ? - 1 ad)l+ Clerk M r . Justice Gene B. Daly delivered the opinion of the Court, This is an appeal from the property division contained i n a decree of divorce granted t o both parties i n the d i s t r i c t court, Custer County. Plaintiff i s now 55 years of age. A s a young man before h i s marriage and upon the death of h i s father, he took over and operated the family farm near Havre, Montana. H e has spent h i s e n t i r e adult l i f e up t o t h i s time operating farms and ranches. Defendant i s approximately the same age a s p l a i n t i f f and has the same l i f e - s t y l e background. The parties were married i n 1948. They resided on the Havre farm u n t i l 1951, when they purchased the present farm- ranch which i s located 14 miles west of Miles City, Montana, consisting of approximately 6,000 acres. The purchase price i n 1951 was $120,000.00. Since 1951, several additional t r a c t s have been added t o the family holdings. A t the original purchase, $57,000.00 was paid into the farm-ranch by p l a i n t i f f out of funds received from the sale of the Havre holdings. When purchased the Miles City farm-ranch was run down, with some old buildings, no water, plumbing o r electricity, After the purchase a t Miles City the defendant contributed a l l the finances she possessed for living expenses and a down payment on farm machinery, for a t o t a l of approximately $1,800.00 t o $1,900.00. During the next 8 years, 6 children were born. In addition t o performing farm chores, defendant raised the children under extremely adverse conditions. There was never more than the bare necessities of l i f e available to the family on the farm o r elsewhere. Defendant drove the children t o school for a number of years and then the family obtained a 3 o r 4 plex i n Miles City which defendant and children occupied during the school years. Defendant t e s t i f i e d she sold books door t o door t o pay tuition for the children's schooling and t o supplement the food budget, etc. The standard of living seemed unnecessarily harsh i n view of an unoccupied, almost complete brick home of 3,000 square feet a t the farm, standing next t o the family housetrailer for some 19 years. This demonstrates that defendant gave a l l she was capable of giving i n labor, self-denial and money aver a period of years, during which farm buildings were erected and the farm improved into one of the finest farm-ranches i n that area of Montana, together with a financial improvement of around a million dollars over the original purchase price. The divorce action was tried September 18, 1975. The court entered i t s findings of facts and conclusions of law and decree January 20, 1976. The parties were each granted an absolute decree of divorce one from the other. Plaintiff was awarded custody of one minor g i r l and defendant awarded custody of the remaining minor boy, Paul Eric, a retarded child. The court found 1) the husband and wife had during the course of their marriage increased the net value of t h e i r assets approximately $1,000,000.00 over and above money o r property contributed a t the time of the marriage; 2) that the accumula- tion of wealth was the result of hard work and sacrifice contri- buted by the parties and the immediate members of t h e i r family; and 3) that the wife's contribution a s a ranch wife, homemaker and mother is equal i n value to the husband's contribution a s a ranch laborer and manager. The property of the p a r t i e s was divided i n t h i s manner: (1) P l a i n t i f f received the ranch-farm and a l l personal property, e t c . i n connection with i t s operation. (2) Defendant received the property i n Miles City. (3) Defendant t o be paid her i n t e r e s t i n marital a s s e t s of $325,000.00, i n t h i s way: a. Miles City property $20,000.00 (Mortgage $9,000.00). b. $5,000.00 immediately. c. $50,000.00 within 60 days following entry of decree ( t h i s date s h a l l be the anniversary date of payment of annual subsequent installments). d. One year from date of decree $50,000.00. e. Remaining balance of $200,000.00 t o be paid i n annual installments of $20,000.00, no i n t e r e s t i f payment paid when due. f . After payment of $75,000.00 by p l a i n t i f f ; upon showing of losses beyond h i s control he can apply t o the court f o r equitable adjustment of payment of the balance. The division was based on the premise t h a t the ranch be kept i n t a c t and operated. I f t h e ranch i s sold by p l a i n t i f f o r h e i r s before payment schedule i s complete, defendant's equity w i l l be $500,000.00 l e s s $27,083.00 ($325,000.00 divided by 12) f o r each f u l l year of operation a s a ranch unit. I f the ranch i s sold on a contract the formula is changed, but defendant's i n t e r e s t remains the same figure. Plaintiff appeals from the portion of the findings of fact and conclusions of law and f i n a l decree which divides the assets i n the manner s e t forth, on the ground the court abused its discretion and that portion of the findings, conclusions and decree is not supported by the evidence o r the law. Plaintiff i n h i s brief on appeal discussed the major cases since 1960 t o date which had t o do with formulation of the law on division of property accumulated during a marriage and has extracted the following guidelines from those cases: 1. The d i s t r i c t court does have the jurisdiction t o make an equitable adjustment of property rights between the husband and wife . 2. N o particular pleading i s necessary, nor i s any recog- nized cause of action necessary t o give the court such jurisdic- tion. The only requirement i s that the language i n the pleading puts the parties on notice that the court i s being asked t o make such an add U s tment . 3. The jurisdiction of the court t o make such adjustment i s founded on its inherent power i n equity cases t o grant complete r e l i e f . 4. The t i t l e t o o r possession of property (except a s t o property not acquired by the joint efforts of the parties) cannot defeat the power of the court t o make such an adjustment. 5. There i s no presumption of g i f t a s between husband and wife i n property matters. 6 . The court's exercise of i t s discretion i n adjusting property rights between husband and wife must be reasonable under the circumstances of the case and there i s no fixed formula o r r a t i o t o be applied i n each instance. 7. I n exercising i t s discretion, the court' s adjustment of property rights must be reasonable and equitably related t o the "contribution" of the parties t o the acquisition of such assets. 8. I n determining "contribution", the court may consider cash contributions; work o r effort directly furthering the acquisition or increase i n value of marital assets; the per- formance of the ordinary duties of the wife o r husband and any extraordinary services performed by the wife o r husband; any other matters i n the individual case which the court reasonably feels constitutes a 'lcontribution", direct o r indirect, t o such acquisition. 9. The court should consider the size o r value of the estate t o be adjusted and the needs of the respective parties for support and t h e i r respective a b i l i t i e s t o support themselves. 10. Th&_ court should consider the nature of the marital assets; whether o r not they are readily divisible; whether o r not they, o r any part thereof, are necessary t o one party o r the other t o carry out the terms of the court's decree, such a s a payment of money i n l i e u of property. W e agree that these guidelines have been established i n the l i n e of cases on t h i s subject during the past 15 years. Although the instant case pre-dates the effective date of the Uniform Marriage and Divorce Act, the provisions of that act for consideration of Property division are very similar t o the case law. Section 48-321, R.C.M. 1947. Plaintiff suggests the d i s t r i c t court's finding of contri- bution by the defendant is not supported by the evidence. Her cash contributions are i n the record. The statement that she took no active part i n the farming as such, is not correct. This kind of selective treatment of the record disregards the t e s t i - mony of defendant, which is credible and was not refuted, about doing a man's work and wearing out her wedding band chopping wood, turning bales i n the f i e l d , chasing c a t t l e on foot and most important the assistance rendered while p l a i n t i f f was period- i c a l l y disabled for periods of several months a t a time with a chronic disease. The reason she could not spend more time i n the fields seems t o be due i n part t o the fact p l a i n t i f f blessed her with something l i k e 6 children i n 8 years, the care of them somewhat limiting the time a woman could spend out-of-doors. The allegation the family moved t o Miles City i n 1965 and defendant has only occasionally been t o the ranch since i s not a f a i r statement of the record. Plaintiff t e s t i f i e d he moved the family t o town and then sold the t r a i l e r house they occupied and there was no other home for them. Defendant t e s t i f i e d she continued t o cook--do a l l things asked of her a t the farm u n t i l she got her divorce papers. The testimony has not been rebutted. The record does not support the allegation by p l a i n t i f f that the t r i a l judge abused h i s discretion when he found the contribution of the parties t o the accumulation of marital assets t o be equal. Additionally the law cited and approved by p l a i n t i f f supports the t r i a l court. The remaining issue presented by p l a i n t i f f concerns the appraisal of the r e a l and personal property of the parties by Don Mullen, of Mullen Realty, Miles City, Montana. It was agreed by the parties that Mullen be appointed by the court. H i s appraisal was accepted a s Exhibit "N", by the court without objection. H i s qualifications were stipulated. Plaintiff advised the court that he only wished t o examine the witness because of a disagreement with a portion of the contents of the exhibit. Defendant contends the appraiser missed 640 acres of property, 125 cows, 90 yearlings, 7 bulls, 35 steers and 15 heifers owned by the parties. H e did not appraise min6ral rights, cash on hand, o r a $14,000.00 Mercedes automobile owned by p l a i n t i f f . Plaintiff questions and objects t o values placed on the land by the appraiser, i.e. admits i n court he was high on the grazing land. Plaintiff questions the $250.00 per acre on crop land and questions the method of appraisal. W e could continue on with t h i s argument but the fact remains that both parties accepted the appraiser and h i s report and did not object t o h i s qualifications or Exhibit "N", the appraisal. A t t h i s point the t r i e r of the facts has the discretion t o give whatever weight he sees f i t t o the testimony of the expert from 0 t o 100%. Nelson v. C &C Plywood Corp. 154 Mont. 414, 422, 465 P.2d 314. The t r i a l judge has done this. Considering a l l of the evidence a t the t r i a l , the court found (1) a one million dollar increase i n value of the marital assets over and above contribution a t the time of the marriage, (2) defendant's contribution was equal t o p l a i n t i f f ' s ; (3) de- fendant received approximately 26% of the value but t h i s also includes the care and education of Eric, a retarded boy, who i n a l l probability w i l l not be emancipated a t the legal age of majority but w i l l remain with h i s mother. The only obligation p l a i n t i f f h i s i s t o assume major medical, dental and education ex- pense, undefined. Finding no abuse of the court's discretion and no errors i n law, the judgment of the t r i a l cou - 8 - We Concur:

May 23, 1977

ef278d17-f8be-4ee3-a5a6-dfe91dee934d

NOLL v CITY OF BOZEMAN

N/A

13329

Montana

Montana Supreme Court

No. 13329 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977 VIRGINIA NOLL, et al., Plaintiffs and Appellants, THE CITY OF BOZEMAN, an incorporated municipality and WALTER L. BATES, Defendants and Respondents. Appeal from: District Court of the Eighteenth Judicial District, Honorable W. W. Lessley, Judge presiding. Counsel of Record: For Appellants: McKinley Anderson, Bozeman, Montana Murphy, Robinson, Heckathorn and Phillips, Kalispell, Montana Douglas Dasinger argued, Kalispell, Montana For Respondents : Brown, Pepper and Kommers, Bozeman, Montana Anderson, Symrnes, Forbes, Peete and Brown, Billings, Montana Richard Cebull argued, Billings, Montana Submitted: April 20, 1977 Decided : JUN -2 19q Filed: Jkgm 8 QS?? M r . J u s t i c e Frank I. H a s w e l l delivered t h e Opinion of t h e Court. P l a i n t i f f s appeal from a jury award of damages r e s u l t - ing from an automobile accident. P l a i n t i f f s w e r e injured on August 17, 1973, when a street pavement r o l l e r operated by Bates i n t h e scope of h i s employment by t h e C i t y of Bozeman s t r u c k t h e back of a parked c a r i n which p l a i n t i f f s were s i t t i n g . Defendants admitted l i a b i l i t y . The s o l e i s s u e a t t h e t r i a l w a s t h e amount of dam- ages t o be awarded p l a i n t i f f s . The jury returned a v e r d i c t of $800 f o r No11 and $1,100 f o r Keneady. Both p l a i n t i f f s appeal, claiming t h e awards a r e inadequate. They both claim i n j u r i e s t o t h e i r back and neck. I n a d d i t i o n , No11 claims aggravation of a pre-existing a r t h r i t i c condition and Keneady claims aggravation of a neurotic condition i n a d d i t i o n t o damage t o t h e car owned by her. Two i s s u e s are presented f o r review on appeal: (1) Was r e f u s a l of p l a i n t i f f s ' o f f e r e d i n s t r u c t i o n No. 5 r e v e r s i b l e e r r o r ? ( 2 ) Was t h e evidence s u f f i c i e n t t o support t h e v e r d i c t ? P l a i n t i f f s ' o f f e r e d i n s t r u c t i o n N o 5 reads: "You a r e i n s t r u c t e d t h a t t h e negligence of t h e Defendant need not be t h e s o l e cause of t h e i n j u r y , it being s u f f i c i e n t t h a t it was one of t h e e f f i c i e n t causes t h e r e o f , without which t h e i n j u r y would not have r e s u l t e d ; but it must appear t h a t t h e negligence of t h e person sought t o be charged w a s responsible f o r a t least one of t h e causes r e s u l t i n g i n t h e i n j u r y . " For supporting a u t h o r i t y p l a i n t i f f s c i t e F l e t c h e r v. C i t y of Helena, 163 Mont. 337, 344, 517 P.2d 365. They argue it was c r i t i c a l l y important t h e jury understand t h a t i f t h e accident was one of t h e causes of p l a i n t i f f s ' condition, then - defendants would be l i a b l e ; and t h a t it was not necessary de- fendants be t h e s o l e cause. Further, they contend t h a t an apportionment of damages between t h e p r i o r condition and aggravation caused by defendants can only be made where t h e r e i s a l o g i c a l b a s i s f o r such apportionment. Otherwise, where no b a s i s can be found, such a d i v i s i o n would be a r b i t r a r y and t h e only p r a c t i c a l course would be t o hold defendants l i a b l e f o r t h e e n t i r e l o s s notwithstanding t h e f a c t t h a t o t h e r causes may have contributed t o such l o s s . Kegel v. United S t a t e s , 289 F.Supp. 790 (1968). F i n a l l y , they submit t h e jury was misled by t h e f a i l u r e of t h e c o u r t t o allow t h e i r proposed in- s t r u c t i o n No. 5, e s p e c i a l l y i n view of defendants' cross- examination tending t o p o i n t t o o t h e r p o s s i b l e causes of plain- t i f f s ' condition. W e disagree. The p o i n t was adequately covered by plain- t i f f s ' o f f e r e d i n s t r u c t i o n No. 6 given by t h e c o u r t . This in- s t r u c t i o n reads: "In an a c t i o n f o r damages f o r personal i n j u r i e s caused by t h e wrongful a c t o r omission of another, t h e i n j u r e d person is e n t i t l e d t o f u l l compensa- t i o n f o r a l l i n j u r i e s proximately r e s u l t i n g from t h e defendant's a c t even though such i n j u r i e s may have been aggravated by reason of her pre-existing physical condition and w e r e rendered more d i f f i - c u l t t o c u r e by reason of her e x i s t i n g state of h e a l t h , o r because of a l a t e n t d i s e a s e t h e i n j u r i e s were rendered more s e r i o u s t o her than they would have been had she been i n robust health. "The Defendant cannot invoke t h e previous condition of t h e person injured f o r t h e purpose of escaping t h e consequences of h i s own negligence o r reducing t h e damages f o r which he is l i a b l e , b u t of course t h e r e can be no recovery f o r any elements due t o t h e pre-existing condition and i n no way r e s u l t i n g from t h e i n j u r y . The recovery i n such c a s e should include no damages f o r i n j u r i e s which r e s u l t purely from t h e o r i g i n a l condition. It must be confined t o those which a r e due t o i t s enhancement and aggravation. The defendant must respond i n damages f o r such p a r t of t h e diseased condition a s h i s neg- l i g e n c e has caused, and i f t h e r e can be no apportion- ment, o r it cannot be s a i d t h a t t h e d i s e a s e would have e x i s t e d a p a r t from t h e i n j u r y , then he i s responsible f o r t h e diseased condition. But where t h e d i s e a s e i s more than a mere l a t e n t tendency t h e defendant can be held l i a b l e only t o t h e e x t e n t t h a t her negligence proximately aggravated t h e condition. " This i n s t r u c t i o n adequately covers t h e law r e l a t i n g t o p l a i n t i f f s ' theory of damages. Accordingly, r e f u s a l of plain- t i f f s ' o f f e r e d i n s t r u c t i o n No. 5 was not e r r o r . Directing our a t t e n t i o n t o t h e s u f f i c i e n c y of t h e evi- dence t o support t h e damage awards, w e note t h a t p l a i n t i f f s argue t h e i r evidence i s e s s e n t i a l l y uncontradicted because de- fendants presented no medical witnesses and t h a t t h e i r evidence proves damages f a r i n excess of t h e amounts awarded by t h e jury. No11 argues t h e evidence shows she had t o r e s i g n her teaching p o s i t i o n on her d o c t o r ' s recommendation because of t h e pain she was s u f f e r i n g i n a r e a s t h a t had never bothered her be- f o r e t h e accident; t h a t she had been making $12,000 p e r year; t h a t a t t h e t i m e of t r i a l she had a c t u a l wage l o s s of $7,200; t h a t being 55 years of age she would have a f u t u r e l o s s of wages f o r 1 0 more working y e a r s of a t least $12,000 per year; and t h a t she had medical expenses of $512.87 besides pain and s u f f e r i n g , a l l a s a r e s u l t of t h e accident. Keneady argues t h e evidence shows t h a t she had medical expenses i n excess of $100; t h a t she l o s t 13 weeks work t o t a l i n g $2,067; and t h a t property damage t o her car amounted t o $306.56; besides pain and s u f f e r i n g , a l l as a r e s u l t of t h e accident. This case is very s i m i l a r t o Holenstein v. Andrews, 166 Mont. 60, 530 P.2d 476, where a v e r d i c t f o r p l a i n t i f f of zero damages w a s affirmed under s i m i l a r contentions. O n appeal w e must review t h e evidence i n t h e l i g h t most favorable t o t h e p r e v a i l i n g p a r t y i n t h e d i s t r i c t c o u r t . Holen- s t e i n , supra. Further, t h e jury may accept testimony of a w i t - ness i n whole o r i n p a r t o r may r e j e c t it a l t o g e t h e r . I b i d . The jury was so i n s t r u c t e d by t h e usual omnibus i n s t r u c t i o n given by t h e c o u r t without objection: " I n weighing t h e testimony of any witness you should t a k e i n t o account h i s i n t e r e s t o r want of interest in the result of the case, his appearance upon the witness stand, his manner of testifying, his apparent candor or want of candor, and whether he is supported or contradicted by the facts and circumstances as shown by the evidence. You have a right to believe all the testimony of a witness or believe it in part and disbelieve it in part, or you may reject it altogether as you may find the evidence to be. You are to believe as jurors under the instructions of this Court and the evidence what you would believe as men and women, and there is no rule of law which requires you to believe as jurors what you would not believe as men or women." Defendants were able on cross-examination to deflate the thrust of plaintiffs' testimony and thus show plaintiffs' injuries attributable to the accident were perhaps minimal. The cross- examination revealed that perhaps Mrs. Noll's resignation from her teaching position was motivated by her marriage and result- ing move to Arizona. Her medical testimony under cross-examin- ation was equivocal concerning whether her present difficulties were a result of a progression of her prior condition notwith- standing the accident. As to plaintiff Keneady, her testimony under cross ex- amination was similarly equivocal concerning whether her diffi- culties and job loss were attributable to the accident or inde- pendent emotional problems. At the time of the accident she was suffering from continuing emotional problems brought on by con- cern with her home, family and advancing age. She had suffered a nervous breakdown years earlier and her testimony would support a jury finding that her difficulties were the result of a con- tinuing emotional condition. Also several years earlier she had suffered a spinal strain similar to that complained of here. The testimony of the driver of the pavement roller and of the investigating police officer was introduced tending to show the car had not been moved by the impact of the collision. Although this is in conflict with the two plaintiffs' testimony that the car had been jolted forward 2 or 3 feet, the evidence is capable of supporting the conclusion that the occupants could not have suffered a very severe whiplash. In summary the jury weighed the positive statements of the witnesses against the adverse circumstantial evidence and equivocating testimony revealed on cross-examination and found the damages attributable to the admitted negligence of the de- fendants were much less than claimed. We cannot retry factual determinations made at trial. Dyksterhouse v. Doornbos, Mont . - P.2d , 34 St.Rep. 415 , (decided May 25, 1977) , - - quoting Hellickson v. Barrett Mobile Home Transp., 161 Mont. 455, 462, 507 P.2d 523. We find sufficient evidence in the record to support the amount of damages awarded. Judgment affirmed. Justice We con ur: - F /-

June 2, 1977

b0ba7e7b-2fb7-469c-aeee-c59520079e38

AGRILEASE iNC v GRAY

N/A

13495

Montana

Montana Supreme Court

No. 1 3 4 9 5 I N T H E SUPREME COURT OF THE STATE O F MONTANA 1977 AGRILEASE, INC. , P l a i n t i f f and A p p e l l a n t , T H E L M A GRAY, Defendant and Respondent. _______-_-_____--_-___--------_----__------------ T H E L M A GRAY, Third P a r t y P l a i n t i f f and Respondent, AGRILEASE, I N C . , Third P a r t y Defendant and Appellant. Appeal from: District Court of t h e S i x t h J u d i c i a l D i s t r i c t , Honorable Jack D. S h a n s t r m , Judge p r e s i d i n g . Counsel of Record: For Appellant: Hutton, Sheehy and Cromley, B i l l i n g s , Montana John C. Sheehy argued, B i l l i n g s , Montana For Respondent: David DePuy argued, Livingston, Montana Submitted: May 2 3 , 1977 Decided: JuL SF 1971 F i l e d : J U L I P igiii M r . J u s t i c e John Conway Harrison d e l i v e r e d t h e Opinion of t h e Court. This appeal from the d i s t r i c t c o u r t , Park County, a r i s e s from a judgment where two causes of a c t i o n were consolidated f o r t r i a l and t r i e d by a jury. Agrilease, Inc. is p l a i n t i f f i n one a c t i o n and t h i r d p a r t y defendant i n t h e o t h e r . Thelma Gray i s defendant i n one a c t i o n and t h i r d p a r t y p l a i n t i f f i n t h e o t h e r . Agrilease appeals i n both c a s e s . I n February 1974, Thelma Gray, a rancher along t h e Yellowstone River, south of Livingston, Montana, contracted with Agrilease, I n c . of B i l l i n g s , Montana, f o r a pumping and irriga- t i o n system designed t o take water from t h e Yellowstone River and t o r a i s e it over 100 f e e t t o undeveloped land f o r t h e purpose of r a i s i n g a l f a l f a . The o r i g i n a l c o n t r a c t was f o r $34,235.00. Thereafter changes r e q u i r i n g e x t r a work and material u l t i m a t e l y r a i s e d t h e t o t a l c o s t t o $42,559.29. Gray made two payments on t h e contract--$15,000 on February 26, 1974; and $7,500 on May 31, 1974. No o t h e r payments were made. Thelma Gray owned water r i g h t s of approximately l,OOO miner's inches out of t h e Yellowstone River. The plan was f o r a pumping system t h a t would t a k e 500 inches of water o u t of t h e r i v e r t o be used t o irrigate previously undeveloped land. M r . Bick, a c t i n g f o r Agrilease, placed a purchase order w i t h Worthington V e r t i c a l Pump Corporation on February 21, 1974, f o r a pump t h a t would pump and raise some 4,000 g a l l o n s per minute t o t h e lands t o be i r r i g a t e d . He requested shipment by May 21, but t h e company i n its acknowledgement of t h e order gave September 13 a s t h e d e l i v e r y d a t e f o r t h e pump. The pump did n o t a r r i v e u n t i l l a t e October when it was i n s t a l l e d . Gray t e s t i f i e d and was supported by witnesses who worked on t h e ranch, t h a t Bick assured h e r he would have t h e system i n s t a l l e d and working before June 1, 1974. Bick denies t h i s and t e s t i f i e d he d i d everything he could t o g e t t h e pump by June 1, b u t due t o t h e Arabian o i l c r i s i s of 1973 i n d u s t r i a l goods were hard t o get, went up i n p r i c e , and he had problems of supply, shipment and d e l i v e r y . The testimony c l e a r l y shows Gray i n d i c a t e d t o Bick she planned t o break up and p l a n t some 85 a c r e s of previously un- developed land t o r a i s e a l f a l f a . I n f a c t , t h a t was t h e reason f o r t h e p r o j e c t and Bick t o get t h e c o n t r a c t surveyed t h e land f o r d i t c h e s and l e v e l i n g . He was aware t h e land was plowed, planted and harvested. Due t o the f a i l u r e of t h e pump t o a r r i v e on time f o r t h e 1974 hay crop, the h a r v e s t was a d i s a s t e r . The crop burned up i n May and June and only 70 tons were r e a l i z e d , when 155 t o 160 tons were a n t i c i p a t e d i f i r r i g a t i o n had been a v a i l a b l e . Even t h e 70 tons would n o t have been possible, except Bick furnished a small pump t o get some water t o the acreage. He testified it c o s t him more than $5,000 t o do t h i s t o assist Gray. I n a d d i t i o n Gray t e s t i f i e d she l o s t pasture i n 1974, due t o t h e f a i l u r e of t h e pump t o a r r i v e and she had t o purchase hay t h a t year. To e s t a b l i s h t h e pumping system Bick had t o b u i l d a r e t a i n i n g w a l l near t h e r i v e r and t o provide i n l e t s from t h e lower p a r t of t h e w a l l i n t o two sumps o r wet walls i n t o which t h e Worthington pump was t o be i n s e r t e d t o remove water from t h e r i v e r and out i n t o t h e p i p e l i n e and then i n t o t h e d i t c h e s . Approximately 2,200 f e e t of 12 inch p i p e l i n e was t o be used. Although t h e c o n t r a c t w a s signed i n February and o r d e r s were placed f o r the pump and t h e pipe i n February, Bick d i d n o t s t a r t c o n s t r u c t i o n of t h e r e t a i n i n g walls u n t i l e a r l y May. This proved t o be a bit l a t e f o r as usual. i n t h e s p r i n g the r i v e r r i s e s r a p i d l y and i n 1974 t h e r e was an unusually heavy run-off. Bick t e s t i f i e d he b u i l t a dike f i v e times, the water coming over each time, t o g e t r e t a i n i n g wall footings and foundations estab- lished. The s t e e l pipe a r r i v e d i n l a t e A p r i l , the motor t o drive the pump came i n May, the sump i n s t a l l a t i o n was finished i n l a t e August, a l l too l a t e t o be of much help t o the 1974 crop. The pump a r r i v e d and was i n s t a l l e d and was attached t o the pipe already i n place i n October. Bick t e s t e d the operation of the pumping system i n the presence of Mrs. Gray and her employees and no problems were found with t h e system a t t h a t time. The contract c a l l e d f o r a f i n a l payment upon the ~ o m p l e t i ~ o n of the i n s t a l l a t i o n of the system and it being put i n t o operation. It was completed i n l a t e Qctober but Gray made no payment then o r a f t e r t h a t date, although she admits it was due. Statements were s e n t monthly t h e r e a f t e r and no p r o t e s t s were heard from Gray. To p r o t e c t i t s e l f Agrilease, Inc. f i l e d a mechanic's l i e n a g a i n s t Mrs. Gray's ranch i n the amount of $20,059.29. In May 1975, Bick was c a l l e d t o the ranch t o start the system working. After s t a r t i n g up it seemed t o work, s o he shut it off and then s t a r t e d it up when a " ~ u r p h y switch", a s a f e t y device broke and had t o be removed and taken t o B i l l i n g s . This was not replaced u n t i l June 15, 1975. Thereafter, e a r l y i n July a vibration developed and on August 7 o r 8, Bick removed the pump from i t s well and found the s t r a i n e r surrounding the suction end of the pump had collapsed, and a rock had entered and lodged i n the impeller. Bick agreed t o take the pump t o h i s shop i n B i l l i n g s but asked Gray t o pay o f f t h e balance of the contract, o r a t l e a s t $10,000. She agreed but d i d not pay, so Bick refused t o go ahead with the r e p a i r s . He took the pump and i t s motor and held them i n h i s shop. A s a r e s u l t Gray alleged a l o s s of the 1975 hay crop. Bick a l l e g e d t h e system would have worked without t h e " ~ u r p h y switch", b u t t h a t made l i t t l e d i f f e r e n c e t o t h e f i n d i n g of t h e jury. The i s s u e of negligence i n n o t screening t h e i n l e t s t o t h e t h e sump pump was submitted to/jury and it found a g a i n s t Bick. A judgment awarded Agrilease, Inc. damages a g a i n s t Mrs. Gray i n an amount of $20,059.29; and an award f o r Mrs. Gray a g a i n s t Agrilease i n t h e sum of $22,397 o r a n e t amount t o Mrs. Gray of $2,337.71. Appellant Agrilease, Inc. r a i s e s s e v e r a l i s s u e s on appeal: 1. Did t h e c o u r t err i n amending t h e v e r d i c t form, over objection, and submitting t o t h e jury a f t e r i n s t r u c t i o n s were s e t t l e d , an i s s u e of damages t o t h e pump, when such damages were n o t plead, were n o t based on evidence and were n o t covered by jury i n s t r u c t i o n s ? 2 . Did t h e c o u r t e r r i n submitting t o t h e jury, over objections, t h e i s s u e of damages f o r t h e l o s s of the hay crop f o r t h e year 1974, where t h e only evidence of t h e market value of the hay crop was based on gross market value, without deducting t h e c o s t of production and marketing such crop? 3. Is Agrilease Inc. e n t i t l e d t o i n t e r e s t on t h e unpaid balance of t h e c o n t r a c t a s a matter of law? 4. Did t h e c o u r t e r r i n allowing t h e jury t o consider an o f f s e t t o t h e Agrilease claim f o r t h e payment of t h e L i n v i l l e [subcontractor under ~ g r i l e a s e ] l i e n i n excess of $2,139.36? I s s u e 1. This i s s u e concerns amendment of t h e v e r d i c t form a f t e r a l l i n s t r u c t i o n s had been s e t t l e d . The posture of t h e case was t h a t both s i d e s had r e s t e d , t h e i n s t r u c t i o n s were s e t t l e d , and Agrilease, Inc. had o f f e r e d a v e r d i c t form f o r submission t o t h e jury. A t t h a t point counsel f o r Gray moved t h e c o u r t t o amend t h e v e r d i c t form, s o t h e jury could make specific findings on several additional issues. One amendment allowed permitted the jury t o award a sum f o r damages t o the pump and the jury awarded $4,799 damages. A t the time the t r i a l judge allowed the amendment he noted: "There was no proof i n there a t a l l a s t o what it would cost t o r e p a i r it." W e agree and find the court erred i n allowing t h i s amendment. Here, the complaint s e t f o r t h seven counts; none covered the cost of r e p a i r t o the pump or the damages t o the pump. N o e f f o r t was made t o prove the cost of repair or t h a t the pump or the system sustained any loss i n market value by virtue of the damaged pump. The sole evidence a s t o the value of the pump appears from Agrileasels exhibit, the purchase order, indicating a cost of $4,000. There was nothing i n the record for the jury t o base a market value on, due t o the damage t o the pump or the cost of r e p a i r . N o instructions were given on the cost t o r e p a i r the pump, nothing supports the $4,747 figure. Gray argues there was evidence the pump cost $4,000; t h a t it was badly damaged and the cost t o r e p a i r it would be a t l e a s t $4,000. Gray c i t e s a s authority t o amend a verdict form the case of Smith v'. Jacobsen, 224 O r . 627, 356 P.2d 421. . Neither t h i s case nor cases l a t e r c i t i n g it a s authority for amending pleadings allowed an amendment a t t h i s stage of the case. Dorr v. Janssen, 233 O r . 505, 378 P.2d 999; Beard v. Beard, 232 O r . 552, 376 P.2d 404, 406; Eck v. Market Basket, 264 O r . 400, 505 P.2d 1156. In Beard the Oregon Court noted: "* * * amendment is allowed with reasonable l i b e r a l i t y , particularly where the matter covered by the amendment i s s u f f i c i e n t l y brought t o the notice of the adversary i n the original pleading and during the t r i a l so t h a t he can be prepared t o meet the issue." 376 P'.2d 406. That i s not the case before us. Here, Gray did not move t o amend her pleadings t o conform t o the evidence, r a t h e r she moved t o amend t h e v e r d i c t form t o include an i s s u e r e l a t i n g t o damages t o t h e motor caused by negligence. The holding of t h i s Court i n Lovely v. Burroughs Gorp., 165 Mont. 209, 217, 527 P.2d 557, c o n t r o l s : a am ages may properly be awarded when they serve t o compensate t h e p l a i n t i f f f o r detriment proximately caused by t h e defendant. Section 17-301, R.C.M. 1947. Before an award can be made, t h e damages must be c l e a r l y a s c e r t a i n a b l e i n both t h e i r n a t u r e and o r i g i n . Section 17-302, R.C.M. 1947. Damages which a r e a m a t t e r of mere s p e c u l a t i o n cannot be t h e b a s i s of recovery. [ c i t i n g c a s e s ] " 165 Mont. 217. Gray's r e l i a n c e on Bos v. Dola jak, 167 Mont. 1, 534 P.2d 1258, does not bear f r u i t . There t h e damages were c e r t a i n and capable of determination. Here, they a r e n o t . To recover t h e p a r t y seeking damages f o r l o s s of personal property must show i t s value before and a f t e r o r t h e c o s t of Yepair. Bos v . Dola jak, supra; Spackman v. Ralph M. Parsons Co., 147 Mont. 500, 414 P.2d 918. I s s u e 2 . This i s s u e concerns a l l e g e d e r r o r by t h e t r i a l c o u r t on damages f o r l o s s of t h e 1974 hay crop. Agrilease a l l e g e s evidence of t h e market value of t h e hay was based on t h e gross market value, without deducting t h e c o s t of production and marketing. Here, t h e jury awarded $13,585 f o r t h e l o s s of t h e hay crop and f o r use of pasture occasioned by A g r i l e a s e f s f a i l u r e t o g e t water t o t h e crop. No value was a s s e s s e d t o the 1974 hay crop l o s s i n t h e v e r d i c t . While Gray claimed damages f o r a l o s s of 155 tons, valued a t $43 per ton, she d i d recover about 70 t o n s from t h e first c u t t i n g , b u t t h e r e was no evidence i n t h e record on t h e c o s t of plowing, weeding, o r h a r v e s t i n g t h a t crop. The c o u r t i n s t r u c t e d as t o damages: "YOU a r e i n s t r u c t e d t h a t t h e measure of damages f o r t h e l o s s of crops and forage i s t h e market value l e s s c o s t s of growing t h e crops and forages i f s o l d by t h e grower, however, i f t h e grower of t h e crops o r forage uses t h e crops and forage l o s t f o r o t h e r feed f o r t h e grower's l i v e s t o c k then t h e measure of damages is t h e market value of t h e crops and forage 10s t . I' This i n s t r u c t i o n was improper and caused e r r o r due t o t h e f a c t it gave no consideration t o the c o s t f a c t o r s . W e f i n d no a u t h o r i t y f o r t h a t portion of t h e i n s t r u c t i o n r e l a t i n g t o where t h e crops a r e used t o feed t h e grower's c a t t l e , t h e pro- duction c d s t s a r e t o be deducted. While Gray t e s t i f i e d she had t o purchase hay t o r e p l a c e h e r 1974 crop l o s s , she d i d n o t t e s t i f y how much was purchased o r a t what p r i c e . Gray r e l i e s on t h i s Court's holding i n Eablonski v. Close, 70 Mont. 292, 225 P. 129. That case is n o t i n p o i n t f o r t h e r e testimony was permitted, because t h e r e w a s n o t an e s t a b - l i s h e d o r known market value f o r timothy hay. Here, t h e market value was e s t a b l i s h e d by Gray and o t h e r witnesses. I n a: l a t e r case involving t h e l o s s of a hay crop, . Goetschius v. Lasich, 137 Mont. 465, 476, 353 P.2d 87, t h e Court e s t a b l i s h e d t h i s r u l e f o r a s c e r t a i n i n g damages: "NO c a l c u l a t i o n was made of t h e expense of h a r v e s t i n g o r marketing t h e drop, which should have been f i g u r e d i n showing n e t l o s s . I n e s t i m a t i n g h i s damages, he included $114.20 f o r t h a t which was necessary t o be done i n order t o r a i s e a crop, and t h e a c t u a l damages he could recover, would be $244, i f no con- s i d e r a t i o n be given c o s t of marketing, o r h a r v e s t i n g crop, The c o u r t gave him a judgment f o r $395.55 on account of l o s s of crop a g a i n s t a l l defendants. "on t h e face of t h e record, it would appear t h a t i f t h e p l a i n t i f f s should have grossed $244 from t h e i r crop, with necessary prepara- t i o n , and had an expense i n producing t h e crop of $114.20, t h e i r n e t l o s s would be $129.80. W e know of no r u l e of law which would j u s t i f y t h e allowances which were made i n t h i s case. " 137 Mont. 476. This case follows t h e long e s t a b l i s h e d r u l e of law i n t h i s s t a t e t h a t only t h e n e t value, n o t t h e g r o s s value of l o s t crops can be recovered. Carron v. Wood, 10 Mont. 500, 26 P. 388; Hopkins v. Butte & Montana Commercial Co., 16 Mont. 356, 40 P. 865; Rass v. Sharp, 46 Mont. 474, 128 P. 594. I s s u e 3. This i s s u e is d i r e c t e d t o whether o r n o t Agrilease is e n t i t l e d t o i n t e r e s t on t h e unpaid balance of t h e c o n t r a c t . Section 17-204, R.C.M. 1947, provides as t o c o n t r a c t claims, t h a t every person who i s e n t i t l e d t o recover damages c e r t a i n , o r capable of being c e r t a i n by c a l c u l a t i o n , and t h e r i g h t t o recover which is vested i n him on a day c e r t a i n i s a l s o e n t i t l e d t o recover i n t e r e s t thereon from t h a t day. Respondent Gray argues t h a t Agrilease, Inc. claimed items t o which it was n o t e n t i t l e d , s o t h e account between them was n o t " c e r t a i n by c a l c u l a t i o n " , t h e r e f o r e no i n t e r e s t . I n support respondent c i t e s Daly v. Swift & Co., 90 Mont. 52, 300 P. 265; School D i s t . No. 1. v. Globe & Republic I n s . Co., 146 Mont. 208, 404 P.2d 889. W e f i n d t h e s e cases n o t a p p l i c a b l e t o t h e f a c t s i t u a t i o n i n t h e i n s t a n t c a s e . I n e f f e c t , what respondent argues is t h a t t h e recovery of i n t e r e s t on a l i q u i d a t e d claim can be defeated by a counterclaim f o r an u n l i q u i d a t e d amount. W e do n o t agree, nor do we f i n d a u t h o r i t y i n support of r e s p o n d e n t t s argument. The c o n t r a c t i n t h e i n s t a n t case provided f o r t h e f i n a l payment on t h e day the system w a s placed i n operation. That date came i n l a t e October 1974, and Gray received monthly statements t h e r e a f t e r by c e r t i f i e d mail. A t t r i a l t h e jury returned a v e r d i c t i n t h e exact amount of those monthly statements $20,059.29, b u t f a i l e d t o consider i n t e r e s t due t o an e r r o r by the t r i a l c o u r t i n f a i l i n g t o approve an i n s t r u c t i o n on an account s t a t e d . Several California cases properly construe section 17- 204, R.C.M. 1947, as it was taken from the California Code, Section 3287. The most recent California case Tripp v. Swaap, 131 Cal. Rptr. 789, 552 P.2d 749, 757, s e t s out the f a c t o r s necessary t o s a t i s f y Section 3287: "Under Section 3287, subdivision ( a ) as i n t e r - preted i n Mass, supra, a claimant must s a t i s f y three conditions f o r the recovery of i n t e r e s t i n a mandamus a c t i o n against a s t a t e : (1) There must be an underlying monetary obligation; (2) the recovery must be c e r t a i n o r capable of being made c e r t a i n by calculation; and (3) the r i g h t t o recover must vest on a p a r t i c u l a r day. I t 552 P.2d 757 See a l s o : Hansen v. Covell, 218 Cal. 622, 24 P.2d 772; Lineman v. Schmid, 32 C.2d 204, 195 P.2d 408; Anno. 60 ALR3d 487, 512. Here Agrilease f u l f i l l e d the t h r e e conditions s e t f o r t h i n Tripp t o recover i n t e r e s t . I t s r i g h t t o payment accrued as of October 1974, and the payment was f o r an amount c e r t a i n . A l l t h a t happened t h e r e a f t e r i n the summer of 1975 t o the " ~ u r p h y switch" and t o the pump does not a f f e c t the f i n a l c o n t r a c t payment d a t e . A s f o r the items t h a t might reduce t h a t sum, the unused pipe, the use of Gray's t r a c t o r , e t c . , a r e a l l e a s i l y ascertainable and can be made c e r t a i n a t any time. O n f i e t r i a l Agrilease is e n t i t l e d t o i n t e r e s t as a matter of law. Issue 4. This i s s u e i s d i r e c t e d a t the c o u r t ' s e r r o r i n allowing the jury t o consider the o f f s e t t o the Agrilease claim f o r the payment of the Linville l i e n i n excess of $2,139.49. L i n v i l l e was the subcontractor who f i l e d a l i e n on Gray's property f o r payment of its account f o r e l e c t r i c a l services perfomed on the pump and the i r r i g a t i o n system. The a c t i o n t o foreclose the l i e n was s e t t l e d j u s t p r i o r t o t r i a l . I f Gray had paid Agrilease the balance of the contract when t h a t account was due, the mechanic's l i e n by L i n v i l l e would not have been f i l e d , f o r L i n v i l l e would then have been paid by Agrilease, Inc. The t r i a l court allowed the jury t o award, by i t s i n s t r u c t i o n , Gray the sum of $2,481. This amounted t o a payment of i n t e r e s t t o L i n v i l l e and its a t t o r n e y fees. This award was improper and should not be considered a t r e t r i a l . The judgment of the t r i a l court is reversed and the case is remanded f o r new t r i a l , unless i n the a l t e r n a t i v e , Gray agrees t o accept a reduction of $12,113.51 plus i n t e r e s t from h e r t o t a l recovery within 30 days. W e Concur: J u s t i c e s

July 12, 1977

0aba510c-d377-4611-bafa-e25004f26578

GARTNER v MARTIN

N/A

13540

Montana

Montana Supreme Court

No. 13540 I N T H E SUPREME COURT O F T H E STATE O F M O N T A N A 1977 WILBERT F. GARTNER, P l a i n t i f f and Appellant, T H O M A S C. MARTIN, Defendant and Respondent. Appeal from: D i s t r i c t Court of t h e Tenth J u d i c i a l D i s t r i c t , Honorable LeRoy L. McKinnon, Judge p r e s i d i n g . Counsel of Record: For Appellant: B. M i l e s Larson argued, Stanford, Montana For Respondent: Theodore P. Cowan argued, Lewistown, Montana Submitted: March 9, 1977 Decided : JUN 8 F i l e d : M r . Chief Justice Paul G. Hatfield delivered the Opinion of the Court. Plaintiff Wilbert F. Gartner brings t h i s appeal from an adverse suIing.:of t h e - d i s t r i c t court, Judith Basin.County, granting summary judgment to defendant Thomas C. Martin and denying summary judgment t o plaintiff a f t e r cross-motions for summary judgment were submitted by both parties and a hearing held. Plaintiff Gartner brought an action i n d i s t r i c t court t o quiet t i t l e to Montana Retail Beer and Liquor License No. 36-452-3630-01, City Club Bar, Hobson, Montana. Defendant Martin answered admitting Gartner was the owner and i n possession of said beer and liquor license and admitted claiming an interest i n the license. Martin also f i l e d a counterclaim, again admitting Gartner t o be the t i t l e holder of the license, alleging that i n 1956 Martin owned the license i n question. A t that time he assigned the license t o Dewey Meyer, who in turn signed a chattel mortgage i n the sum of $16,000 against the license t o protect Martin's interest therein and the chattel mortgage was f i l e d for record with the State Department of Revenue, Montana Liquor Control Board on July 18, 1956; that Martin i s and has been the owner of Lots 1 and 2, Block 13, Original Townsite of Hobson, Judith Basin County, Montana, upon which i s located the City Club Bar where the dis- puted license was used. Thereafter several different persons were assigned the license and i n each case Martin was acknowledged in writing by each assignee a s mortgagee on the license. Gartner i s the l a s t person t o date who was assigned the license. Gartner con- sented i n writing that Martin be placed on the license as a mortgagee on March 26, 1971. Martin further alleged a general lease agreement between himself and Gartner for one year a f t e r M a y 1, 1974, and a breach of that lease. In reply, Gartner states the general lease agreement expired by its terms on M a y 1, 1975. Both parties moved f o t summary judgment and a f t e r a hearing and testimony by Martin, the court, a f t e r consideration of the cross-motions for summary judgment, found that Montana Retail Beer and Liquor License No. 36-452-3630-01 was subject t o the chattel mortgage held by.-Martin; that p l a i n t i f f knowingly received said license subject to the mortgage; that defendant has never been paid a reasonable purchase price for said license; and, that Gartner violated the terms of the mortgage i n claiming ownership of the license. The d i s t r i c t court found as a conclu- sion of law, that Martin i s the rightful owner of Montana Retail Beer and Liquor License No. 36-452-3630-01. These issues are presented for t h i s Court's review: (1) Did the d i s t r i c t court e r r in entering i t s judgment determining that Montana Retail Beer and Liquor License No. 36-452-3630-01 was subject t o the chattle mortgage held by Martin? (2) Did the court e r r i n finding that Gartner never paid a reasonable price for the r e t a i l beer and liquor license and Martin is the rightful owner of Montana Retail Beer and Liquor License No. 36-452-3630-Ol? Testimony shows there was no note evidencing the $16,000 stated i n the chattel mortgage and Martin himself drafted the mortgage on the advice of Howard King, the liquor inspector a t that time. Much discussion could be had, however t h i s case i s con- trolled by Beard v. McCormick, 147 Mont. 361, 364, 411 P.2d ,964, where the Court stated: "There can be no question that the lease of the premises and the assignment of the licenses were both part of the same transaction between the parties.* * *. Our Codes require that those dispensing liquor be licensed (R.C.M. 1947, $4-401) and that such licensing be only a f t e r approval of the Liquor Control Board. R.C.M. 1947, $4-410, states i n part: "'No transfer of any license as t o person or location shall be effective unless and u n t i l approved by the board * * *. ' "The defendant could not, within the law, operate the p l a i n t i f f s ' tavern under the existing lease u n t i l approval of the Board was given. Assignment of the p l a i n t i f f s ' licenses to the defendant was an essential step toward such approval, the same being necessary i f the Board was t o effectively preserve i t s powers and authority over the tavern operator and exercise i t s statutory duties a s pre- scribed by our codes. The lease would have been t o t a l l y useless without such assignment since the building could be used only as a tavern. A s between the parties therefore, the instruments stand together and are inseparable. "But one case i s found i n Montana similar t o the one a t bar. In Sullivan v. Marsh, 124 Mont. 415, 225 P.2d 868, the plaintiff Sullivan leased h i s hotel and bar to the defendant for five years a t $3,000 per year. The lease period was from 1944 to 1949. The defendant and one Tappa executed the agreement M a y 27, 1944, and took possession of the premises July 1, 1944, the day a f t e r the p l a i n t i f f ' s liquor licenses expired. For the next five years, the de- fendant paid for and was issued i n h i s name the necessary liquor licenses t o operate the tavern. The lease contained no provision for i t s renewal and renewal was refused by the plaintiff a few weeks prior t o i t s expiration. The defendant turned back t o the plaintiff the properties and fixtures covered by the lease but refused t o return the liquor license and applied t o the Board for a transfer to a different loca- tion. This court eventually held that the defendant had a right t o the license. The important differences i n that case from t h i s one are that (1) no assignment was necessary from Sullivan t o Marsh. Sullivan l e t h i s license expire and Marsh applied for one in h i s own name, and, (2) liquor licenses were not limited in 1944 by our quota law. They were easily obtained and held l i t t l e greater value than the renewal expenses. W e feel, therefore, that the Sullivan case i s not applicable t o the one a t bar. A t the time the lease i n the Sullivan case was executed, r e t a i l beer and liquor licenses were not the treasure they appear t o be today, because of the quota system now i n effect. " I * * * Courts of equity are not bound by cast-iron rules. The rules by which they are governed are flexible and adapt themselves t o the exigencies of the particular case. Relief w i l l be granted when, i n view of a l l the circumstances, t o deny it would permit one party t o suffer a gross wrong a t the hands of the other! Parchen v. Chess- man, 49 Mont. 326, 339, 142 P. 631, 635. " W e feel the t r i a l court erred i n not binding the lease and the assignment together and causing one t o be dependent upon the other. In her testimony, the de- fendant said she paid only the rent required - $50 - under the lease. She admitted she paid no additional sums i n connection with the tavern business t o the p l a i n t i f f . N o money was paid directly for the transfer of the unexpired licenses and no profits were shared. About a year and one-half before the lease expired, defendant admitted she told the plaintiff she thought the licenses were then worth $10,000 or more. "It i s inconceivable that the p l a i n t i f f intended t o relinquish h i s valuable license privileges for as l i t t l e a s $3,000 collected i n the form of rent over a give-year period by $50 monthly installment payments." The instant case presents sufficiently similar facts. Therefore, the findings of fact and conclusion of law of the t r i a l judge are affirmed, in that Martin i s the rightful owner of Montana Retail Beer and Liquor License No. 36-452-3630-01. m i e f Justice 1'1 W e Concur: % I , d S ( a / , ~

June 22, 1977

de8578bd-c2b8-4be7-b1f4-7a6322ba5bd1

STATE v CARDEN

N/A

13478

Montana

Montana Supreme Court

No. 13478 I N T H E SUPREME C O U R T O F T H E STATE O F MONTANA 1977 T H E STATE O F M O N T A N A , P l a i n t i f f and Appellant, JOHN J. CARDEN, a/k/a JAMES J. C A R D E N and GLORIA (EUSEK) CARDEN, Defendants and Respondents. Appeal from: ~ i s t r i c t Court of t h e F i r s t ~ u d i c i a l D i s t r i c t , Honorable M. James S o r t e , Judge p r e s i d i n g . Counsel o f Record: For Appellant: Hon. Mike Greely, Attorney General, argued, Helena, Montana Robert S. Keller, S p e c i a l A s s i s t a n t Attorney General, argued, Helena, Montana For Respondents: Smith, Emmons, B a i l l i e and Walsh, G r e a t F a l l s , Montana Robert J. Emmons argued, Great F a l l s , Montana Knight, Dahood and Mackay, Anaconda, Montana Wade J. Dahood appeared, Anaconda, Montana - - - - - Submitted: February 1 6 , 1977 Decided : MAY 2 5 19n - . . ? F i l e d : -w 2 s 1977 Clerk Mr. Justice Frank I . Haswell delivered the Opinion of the Court. Defendants James J. Carden and his wife Gloria Eusek Carden were charged with several crimes arising out of a $5,000 settle- ment of her Workmen's Compensation claim. The district court, Lewis and Clark County, dismissed the case on the ground that defendants had been denied their constitutional right to a speedy trial. The state appeals. We reverse. On December 20, 1974, the attorney general filed a direct Information against the defendants in the district court of Lewis and Clark County. Defendant James J. Carden is the former administrator of the Workmen's Compensation Division, Department of Labor and Industry, of the State of Montana. Defendant Gloria Eusek Carden is the wife of defendant James J. Carden. The Information contained 19 counts charging defendants with the following crimes in connection with a $5,000 settlement of Gloria Eusek Carden's claim under the Workmen's Compensation Act: Embezzlement by a public officer; grand larceny; obtaining money or property by false pretenses; presenting false proofs on a policy of insurance; officer illegally interested in a contract; offering false or forged document to be recorded; preparing false evidence; and offering false evidence. Defendants made their initial appearance on January 3, 1975, before District Judge Gordon R. Bennett. Defendants were granted additional time to brief the Information and were released on their own recognizance. On January 9, 1975, District Judge Nat Allen assumed, jurisdiction of the case upon request of Judge Bennett. O n January 17, 1975, Judge Allen granted defendants an _ extension of time t o February 10 i n which t o f i l e t h e i r motions and b r i e f s . O n February 10 defendants f i l e d 56 motions attacking the Information i n various particulars. Defendants received an extension of time t o February 26 t o f i l e t h e i r supporting b r i e f . O n March 18, Judge Allen revised the briefing schedule on defendants' motions so t h a t defendants' b r i e f was due on April 21, t h e s t a t e ' s answering b r i e f was due on May 21 and defendants' reply b r i e f was due on May 30. The s t a t e contends t h i s was done t o synchronize the briefing schedule i n t h i s case with the briefing schedule i n S t a t e v. James J. Carden, Cause /,3937 i n the d i s t r i c t court. Defendants deny t h i s . O n May 20,the s t a t e received an extension of time t o June 4 t o f i l e i t s answering b r i e f . Thereafter defendants received an extension of time t o July 3 i n which t o f i l e t h e i r reply b r i e f . O n August 4, the s t a t e moved t o disqualify Judge Allen resulting i n an appeal t o t h i s Court. W e ruled t h a t Judge Allen was disqualified. O n September 30, D i s t r i c t Judge Jack D. Shan- strom assumed jurisdiction. O n October 21, Judge Shanstrom s e t a l l pending motions f o r hearing on November 17. On November 3, defendants disqualified Judge Shanstrom. On December 9, D i s t r i c t Judge Paul G. Hatfield assumed jurisdiction. Judge Hatfield s e t all motions by t h e defendants f o r hearing on February 4 , 1976. A t the hearing, Judge Hatfield requested counsel t o submit proposed orders and requested the s t a t e t o review i t s Information f o r consolidation of counts. According t o the s t a t e , it subsequently wrote Judge Hatfield suggesting t h a t the Information could be reduced t o 6 counts and t h e judge concurred. - 3 - On April 14, 1976, Judge Hatfield entered an order ( 1 ) dismissing 13 counts of the Information, ( 2 ) granting the state leave to file an amended Information, ( 3 ) indicating that many of the defendants' original motions were rendered moot by the dismissal of the 13 counts, and ( 4 ) setting a further hearing for April 27. This was subsequently continued to May 4 due to incle- ment weather. In the meantime, on April 21, the state filed an amended Information containing 6 counts. In the amended Information the defendants were charged with 6 crimes generally corresponding to the remaining counts in the original Information. The crimes charged in the amended Information were: Embezzlement by a public officer; grand larceny; offering a forged or false document to be recorded; and preparing false evidence. Following the hearing on May 4, Judge Hatfield set May 1 4 as the date for arraignment of defendants on the amended Informa- tion; May 17 was set for hearing further motions to be filed by defendants; and June 17 was set as the tentative trial date. On May 11, defendants filed their motion to dismiss the case for denial of a speedy trial in violation of the Sixth Amendment to the United States Constitution and Art. 11, Section 24, 1972 Montana Constitution. On May 17, defendants presented the state with 25 motions attacking the amended Information; a motion to dismiss all charges because of prejudicial pretrial publicity; a motion for change of place of trial; a demand for production of documents for trial; a motion for production of documents; and a motion to compel the state to furnish defendants with a copy of any oral or written confessions or admissions with a list of witnesses. O n May 27, defendant Gloria Eusek Carden moved f o r a severance of her t r i a l from t h a t of James J. Carden. O n June 8, Judge Hatfield, who was then engaged i n a s t a t e - wide campaign f o r election a s Chief J u s t i c e of t h i s Court, removed himself from jurisdiction i n the case, following a motion by defendants. D i s t r i c t Judge James Sorte then assumed j u r i s d i c t i o n and s e t a l l motions by defendants f o r hearing on June 17. Following hearing a l l motions by defendants were denied, except those r e l a t i n g t o discovery. T r i a l was s e t f o r August 16. O n July 16, defendants requested a rehearing on the issue of a speedy t r i a l . The rehearing was held on July 28, i n Kalispell during the annual convention of the State Bar of Montana. Judge Sorte ruled from the bench t h a t the case be dismissed f o r lack of a speedy t r i a l . The s t a t e f i l e d i t s notice of appeal the following day. O n August 1, Judge Sorte f i l e d a memorandum opinion s e t t i n g f o r t h the reasons f o r h i s ruling. The appeal was o r i g i n a l l y argued on October 22, 1976 and reargued on February 9, 1977. The sole issue on appeal i s whether the defendants have been denied t h e i r constitutional r i g h t t o a speedy t r i a l . W e note defendants have presented 16 additional issues f o r review re- l a t i n g t o other p r e t r i a l aspects of the case, which we w i l l not review a t t h i s time a s t h e d i s t r i c t c o u r t ' s dismissal i s based exclusively on denial of a speedy t r i a l . Although the arguments of the respective p a r t i e s on the speedy t r i a l issue consist of hundreds of pages of b r i e f s f i l e d i n the d i s t r i c t court and i n t h i s Court on appeal, we w i l l endeavor - 5 - summarize the principal positions of the respective parties i n b r i e f , understandable form. In so doing, we w i l l confine our- selves t o the basic thrust of the arguments as w e view them, directing our attention t o the forest rather than the individual trees. The defendants principally contend that they have been denied t h e i r constitutional right t o a speedy t r i a l under the principles enunciated by the United States Supreme Court i n Barker v. Wingo, 407 U.S. 514, 92 S.Ct. 2182, 33 L ed 2d 101, and our decisions i n State v. Steward, 168 Mont. 385, 543 P.2d 178, 32 St.Rep. 1185; State ex r e l . Sanford v. D i s t . C t . , Mont . 9 551 P.2d 1005, 33 St.Rep. 644; and state.:^. Keller, - Mont . , 553 P.2d 1013, 33 St.Rep. 795. These cases generally involve a sensitive balancing of four principal factors i n the individual case t o determine whether a given defendant has been denied a speedy t r i a l : (1) length of delay, (2) reasons for the delay, (3) assertion of the right by defendant, and (4) prejudice t o defendant. Defendants contend that when these four factors are properly evaluated and balanced under the circumstances of t h i s case, defendants have clearly been denied t h e i r right t o a speedy t r i a l , They emphasize the length of the delay here i s excessive and un- reasonable; that the principal reason for the delay i s the manner i n which the s t a t e chose t o prosecute the case by a 19 count Information covering an essentially simple factual transaction; that the duty is on the s t a t e ta afford defendants a speedy t r i a l , which defendants have neither waived nor consented to; and that defendants have suffered severe actual prejudice by the failure of the s t a t e to bring them t o t r i a l within a reasonable time. L n shuris, defendants clainl the state is responsible and charge- able with unreasonably delaying the trial of defendants without justification entitling defendants to dismissal of the charges against them. The basic position of the state, on the other hand, is that while the four factor balancing test of Barker and its Montana progeny Steward, Sanford and Keller is controlling, a proper evaluation and balancing of these factors demonstrates that de- fendants have not been denied a speedy trial within constitutional requirements. The state argues it has pursued the prosecution of this case with dispatch and cites several cases where delays substantially in excess of those here were held not to constitute violations of constitutional speedy trial guarantees: Barker, supra; United States v. Ewell, 383 U . S . 116, 86 S.Ct. 773, 15 L ed 2d 627; United States v. Lane, 465 F.2d 408; United States v. Jones, 475 F.2d 322; United States v. Skeens, 494 F.2d 1050; United States v. Churchill, 483 F.2d 268; Ricon v. Garrison, 517 F.2d 628; United States v. Fairchild, 526 F.2d 185; United States v. Stein, 456 F.2d 844; Constabile v. State, (0kla.Cr.) 513 P.2d 588. The state emphatically denies that it is responsible or chargeable with the principal delays involved in this case, viz. the time necessarily consumed in researching, briefing, arguing, and securing a decision on the voluminous motions filed by the defendants and the time necessarily consumed incident to dis- qualification of judges by both the defendants and the state. The state further contends that the defendants have never sought a speedy trial and are not now prepared to go to trial. Finally, che s c a r e distinguishes Steward, Sanford and Keller but requests us to review our prior holdings in Steward and Sanford on assertion of the right to a speedy trial by defendants. As a further preface to our decision herein, we note the prior rulings of the district court on defendants' motion for Jismissal of this case for denial of a speedy trial. The district court initially denied defendants' motion. Subsequently a rehearing was granted and the district court granted defendants' motion. Briefly stated, the district court reasoned that the long delay in bringing the defendants to trial in this case established a prima facie case of denial of a speedy trial; that both presumptive and actual prejudice to defendants resulted from this delay; that three principal reasons accounted for the delay in this case (1) the Montana disqualification law and the procedural practicalities attendant on changing judges, (2) the filing of multiple counts (19) by the prosecution in a relatively simple factual situation, and (3) the state's disqualification of Judge Allen after he had considered the case for over 7 months; that none of these delays was chargeable to defendants; and therefore the defendants were entitled to dismissal for lack of a speedy trial. Implicit in the district court's reasoning although not specifically stated therein is the proposition that delays not chargeable to the defendants are the responsibility of the state. The starting point in our analysis of the speedy trial issue is Barker v. Wingo,407 U.S. 514, 92 S.Ct. 2182, 33 L ed 2d 101, which both the state and the defendants concede is controlling. Barker rejects the two arbitrary approaches to the issue of speedy trial in favor of a balancing test in this language : "We, therefore, reject both of the inflexible approaches-- the fixed-time period because it goes further than the Constitution requires; the demand-waiver rule because it is insensitive to a right which we have deemed fundamental. The approach we accept is a balancing test, in which the conduct of both the prosecution and the defendant are weighed." 407 U . S . 529, d.530. The substance of the balancing test in Barker is described in these words: "A balancing test necessarily compels courts to approach speedy trial cases on an -- ad hoc basis. We can do little more than identify some of the factors which courts should assess in determining whether a particular defendant has been deprived of his right. Though some might express them in different ways, we identify four such factors: Length of delay, the reason for the delay, the de- fendant's assertion of his right, and prejudice to the defendant." 407 U . S . 530, 531. Montana has adopted and applied the four factor balancing test in Barker determining the speedy trial is sue under Art. 11, section 24, 1972 Montana Constitution, as well as under the United States Constitution in three principal cases: State v. Steward, supra; State ex rel. Sanford v . Dist. Ct., supra; State v. Keller, supra. The length of the delay between the filing of the Information and the date set for trial (544'days) triggers the inquiry here. Barker v. Wingo, supra. It establishes a prima facie case of denial of a speedy trial. State ex rel. Sanford v. Dist. Ct., supra. If this prima facie case remains unrebutted, the issue is settled. In this case, the state's rebuttal must be weighed and considered in the light of the four factor test of Barker. The first factor to be considered is the length of the delay. In this case the state concedes that the time lapse is sufficient to trigger an inquiry into the other three elements of the balancing test. We agree. We note that speed alone is not the determining factor. Rather it is the manner in which the s t a t e has p~lmraued the pzosecutio~i in the l i g h t of the t o t a l i t y of the circumstances i n the case. The United States Supreme Court has placed t h i s consideration i n perspective i n the following passage from United States v. Ewell, 383 U.S. 116, 86 S.Ct. 773, 11 However, i n large measure because of the many procedural safeguards provided an accused, the ordinary procedures f o r criminal prosecution a r e designed t o move a t a deliberate pace. A requirement of unreasonable speed would have a deleterious e f f e c t both upon the r i g h t s of the accused and upon the a b i l i t y of society t o protect i t s e l f . Therefore, t h i s Court has consistently been of the view t h a t 'The r i g h t of a speedy t r i a l i s necessarily r e l a t i v e . It is consistent with delays and depends upon circumstances. It secures r i g h t s t o a defendant. It does not preclude the r i g h t s of public justice. ' ik * ff 'Whether delay i n completing a prosecution * * amounts t o an unconstitutional depriva- rion of r i g h t s depends upon the circumstances +C * *. The delay must not be purposeful o r oppressive.' yc fi ffl[T]he e s s e n t i a l ingredient i s orderly expedition and not mere speed. 1 1 1 I n our view the s t a t e has pursued the prosecution with reasonable diligence. There i s l i t t l e "dead time'' i n which nothing was done which distinguishes t h i s case from Steward, Sanford and Keller. Although defendants argue the s t a t e could have proceeded more expeditiously had it chosen t o charge the defendants with a single crime o r no more than the 6 charges they eventually ended up with i n the amended Information, t h i s is largely speculative and unconvincing i n l i g h t of the 25 motions f i l e d by defendants attacking the amended Information and the additional discovery motions, venue motion, severance motion, and motion r e l a t i n g t o p r e t r i a l publicity. I n any event, we cannot s a y the law of Montana i s so clear t h a t the manner of charging defendants i n t h i s case rendered the i n i t i a l f i l i n g of a 19 count Information i n t h i s case unreasonable. I n our view the prosecution in t h i s case has proceeded i n orderly and reasonable progression ~cep-by-step towdrcl r r i a l ilrider the irirninal procedural s t a t u t e s of t h i s s t a t e . The second factor t o be weighed and considered under Barker involves the reasons for the delay. This has been par- t i a l l y touched upon i n the preceding discussion. To be more precise, t h e principal delays i n t h i s case were occasioned by the time necessarily consumed i n researching, briefing, and arguing defendants' 56 original motions, disqualification of judges by both the s t a t e and defendants with resulting procedural delays, requests f o r extensions of time by both the s t a t e and defendants, and the l a t e f i l i n g of b r i e f s . W e do not suggest f o r a moment t h a t defendants were not e n t i t l e d t o f i l e t h e i r 56 motions, disqualify 2 judges, o r request extensions of time. What we do say i s t h a t the resulting delays a r e not the responsi- b i l i t y of nor chargeable t o the s t a t e . This brings us t o one of the principal bones of contention between the s t a t e and defendants. The s t a t e contends it i s not chargeable with delays inherent i n the criminal j u s t i c e system i n the absence of f a u l t on i t s p a r t . Defendants contend t h a t such delays a r e chargeable t o the s t a t e because it i s the s t a t e ' s obligation t o afford the defendants a speedy t r i a l and the defendants have no control over the s t a t e ' s criminal procedure s t a t u t e s o r its criminal j u s t i c e system. W e r e j e c t the basic approach t o t h i s problem taken by defend- ants and impliedly by the d i s t r i c t court. This approach indi- cates t h a t i f defendant i s chargeable with a given number of days delay, the s t a t e is automatically chargeable with the re- mainder without regard t o other considerations. Such an a r b i t r a r y and mechanical approach is unreasonable and goes f a r beyond the speedy trial provisions of the federal and s t a t e constitu- rions. It leaves society naked of the means t o protect i t s e l f in the face of any protracted and s p i r i t e d defense. It i s d i r e c t l y contrary t o the four factor balancing t e s t i n Barker where the conduct of both the prosecution and the defendant is weighed under the circumstances of the p a r t i c u l a r case under W e have previously held the time reasonably consumed by a defendant's good f a i t h motions requiring research, hearing and determination a r e not chargeable t o defendant. S t a t e v. Keller, supra. Logic and reason compel application of the same rule t o the s t a t e ' s good f a i t h e f f o r t s . I n our view the circumstances of t h i s case indicate no intentional or deliberate delay by the s t a t e , an insignificant amount of "dead time", no " i n s t i t u t i o n a l delays" i n the criminal j u s t i c e system beyond the statutory procedural r i g h t s of the p a r t i e s , and no substantial delays f o r which the s t a t e i s responsible o r chargeable. The t h i r d factor i n the balancing process, defendants' assertion of t h e i r r i g h t t o a speedy t r i a l , weighs most heavily against defendants under the circumstances of t h i s case. A l - though f a i l u r e t o a s s e r t t h i s r i g h t does not c o n s t i t u t e a waiver of the r i g h t t o a speedy t r i a l , it i s a factor t o be considered i n the balancing t e s t . I n Barker t h i s consideration was expressed thusly: "7k * * The defendant's assertion of h i s speedy t r i a l r i g h t , then, i s e n t i t l e d t o strong evidentiary weight i n determining whether the defendant is being deprived of the right.. W e emphasize t h a t f a i l u r e t o a s s e r t the r i g h t w i l l make it d i f f i c u l t f o r a defendant t o prove t h a t he was denied a speedy t r i a l . " 407 U.S. 531. In our view the record in this case amply demonstrates that the defendants did not really want a speedy trial. They first asserted this right after protracted proceedings resulting in dismissal of 13 of the 19 counts. For 507 days after they were charged, defendants failed to even hint they desired a faster pace in the proceedings. Defendants asked for and received extensions of time. They failed to object to extensions of time granted the state. They delayed for 40 days after the closing of filings for Chief Justice of this Court before seeking Judge Hatfield's removal because of his candidacy for a statewide elective judicial office. At the time defendants filed their motions for dismissal for lack of a speedy trial, they had not pursued any pretrial discovery and were in no sense ready for trial. Six days after filing their motions for dismissal for lack of a speedy trial, defendants filed, among other things, three pretrial discovery motions and a motion to change the place of trial. Fifteen days after filing their motion for dismissal for lack of a speedy trial, defendant Gloria Eusek Carden sought severance of her trial from that of her husband and codefendant. Under these circumstances defendants' claim of deprivation of a speedy trial loses its vitality. United States v. Churchill, 483 F.2d 268; United States v. Dornau, 356 F.Supp. 1091. The further circum- stance that defendants waited until the eve of trial to file their motions illustrates the transparent nature of their claim that they were deprived of their constitutional right to a speedy trial. United States v. Churchill, supra; United States v. Fasanaro, 471 F.2d 717; United States v. Jones, 475 F.2d 322; United States v. Toy, 482 F.2d 741; Day v. State, 61 Wis.2d 236, 212 N.W.2d 489; United States v . Saglimbene, 471 F.2d 16. 'Che s t a t e requests us t o review our p r i o r holding i n Steward and Sanford on the t h i r d factor i n the Barker balancing process. The s t a t e reads these cases a s holding t h a t the f i l i n g of a motion t o dismiss f o r lack of a speedy t r i a l by defendant a t ? x i s arraignment i s a s u f f i c i e n t assertion of the right. Steward, unlike t h i s case, involved e s s e n t i a l l y "dead time" between the r i l i n g of charges and arraignment and motion on the eve of t r i a l so t o speak; Sanford involved the f a i l u r e of three d i f f e r e n t judges t o s e t defendant's motion f o r hearing over an eight month period despite h i s repeated requests. Although isolated s t a t e - ments i n the opinions may support the s t a t e ' s view of what t h i s Court held, these statements must be read and interpreted i n the context of the f a c t s of the case i n which they were made. As the United States Supreme Court recently stated: "While it i s possible t o excise various portions of the p l u r a l i t y opinion t o support the r e s u l t reached below, divorcing the language from the f a c t s of the case serves only t o d i s t o r t i t s holdings. 11 I l l i n o i s v. Somerville, 410 U.S. 458, 469, 93 S.Ct. 1066, 35 L ed 2d 425, 434. W e view t h i s a s p a r t i c u l a r l y t r u e i n speedy t r i a l cases where each case must be considered on an ad hoc basis under i t s p a r t i - cular f a c t s i n applying the balancing t e s t of Barker. W e in- tended no elimination of the t h i r d f a c t o r i n the Barker balancing t e s t , but simply held t h a t under the f a c t s and c i r - cumstances of those particular cases, defendants had properly asserted t h e i r right. The f i n a l factor i n the balancing process involves the question of whether defendants were prejudiced by the delay. W e need not belabor t h i s point. Both presumptive and actual prejudice are present t o some degree i n t h i s case. Barker describes the approach t o t h i s factor i n t h i s 'I* * Prejudice, of course, should be assessed i n the li$ht of the i n t e r e s t s of defendants which the speedy t r i a l r i g h t was designed t o protect. This Court has identified three such i n t e r e s t s : ( i ) t o prevent oppressive p r e t r i a l incarceration; ( i i ) t o minimize anxiety and concern of the accused; and ( i i i ) t o l i m i t the p o s s i b i l i t y rhat the defense w i l l be impaired. Of these, the most serious i s the l a s t , because the i n a b i l i t y of a defendant adequately t o prepare h i s case skews the fairness of the e n t i r e system. I f witnesses d i e o r disappear during a delay, the prejudice i s obvious. There i s a l s o prejudice i f defense witnesses a r e unable t o r e c a l l accurately events of the d i s t a n t past. Loss of memory, however, i s not always reflected i n the record because what has been forgotten can rarely be shown." 407 U.S. 532. Here there is nothirg i n the record t o suggest t h a t the defense has been impaired by the delay. There a r e no l o s t o r missing witnesses. There i s no showing of l o s s of memory. There has been no p r e t r i a l incarceration, oppressive o r otherwise. There has been substantial anxiety and concern on the p a r t of defendants. This has manifested i t s e l f physically, mentally and emotionally. It is perhaps more severe i n t h i s case than i n the usual case. But t h i s i s an unusual case. W e do not see how thLs anxiety and concern can be eliminated o r minimized a s f a r a s these defendants a r e concerned u n t i l t h i s e n t i r e workmen's cornpensation investigation and prosecution i s completely finished. I n summary then, the circumstances of t h i s p a r t i c u l a r case involve substantial delay resulting primarily from the exercise of statutory procedural r i g h t s inherent i n ~ o n t a n a ' s criminal j u s t i c e system f o r which neither the s t a t e nor the defendants a r e chargeable; t h a t defendants' assertion of lack of a speedy t r i a l has been belated and transparent, indicating t h a t defendants did not r e a l l y want a speedy t r i a l and were not yet ready f o r t r i a l whea they f i l e d t h e i r motion; and t h a t prejudice has resulted co defendants from the delay i n the form of anxiety and concern. O n the balance, we hold defendants have not been denied a speedy t r i a l i n the constitutional sense. The order and judgment of dismissal i s reversed. The case i s remanded t o the d i s t r i c t court f o r t r i a l . J u s t i c e W e Concur: M r . Justice Gene B. Daly dissenting: During o r a l argument the attorney general characterized t h i s as "a p o l i t i c a l case". It was not made clear what significance was intended. The majority here has scrupulously avoided any refer- ence t o the p o l i t i c a l background of t h i s o r related Workmen's Com- pensation cases but does s e t the case apart a t p. 15 of the opinion with "It is perhaps more severe i n t h i s case than i n the usual: case. But t h i s is an unusual case." (Emphasis supplied). - Appellate judges have said i n the past that it i s not necessary that a court pretend to be more ignorant than it actually is, nor more ignorant than the public generally. I believe t h i s t o be true. The p o l i t i c a l history and excessive media treatment has not escaped m y notice. Be t h i s a s it may, I cannot agree that cases should be viewed o r treated a s p o l i t i c a l or unusual or whatever. This case i s what it is, a single offense $5,000 fraud case, alleged by the s t a t e t o be a crime. The kind of case where the facts, not names, are important. The kind of case the average county attorney sees frequently and disposes of within several weeks o r a month with no problems. The majority opinion r e l i e s almost exclusively on Barker v. Wingo, 407 U.S. 514, 92 S.Ct. 2182, 33 L ed 2d 101 (1972), and I do not deny i t s authority. However, i n explaining the application of Barker t o the Montana cases of Steward, Sanhord and Keller, the majority s t a t e s a t p. 6 "These cases generally involve a sensitive balancing of four principal factors * * *." (Emphasis added.) Again the majority s t a t e s a t p. 9, that "Montana has adopted and applied the four factor balancing t e s t i n Barker * * *." (Emphasis added.) Further, _that l'FIn.;this case, the s t a t e ' s rebuttal must be weighed and considered in the light of the four factor test of Barker." (Emphasis added.) Thus it is obvious that the majority over-simplifies the principles of Barker. The case is not so narrow and restricted as the majority would lead us to believe. In it, the United States Supreme Court stated: "We regard none of the four factors identified above as either a necessary or sufficient condition to the finding of a deprivation of the right of speedy trial. Rather, they are related factors which must be considered together with such other circumstances as may be relevant. In sum, these factors have no talismanic qualities; courts must still engage in a difficult and sensitive balancing process. But, because we are dealing with a fundamental right of the accused, this process must be carried out with full recogni- tion that the accused's interest in a speedy trial is speci- f ically affirmed in the Constitution." (Emphasis added. ) 407 U . S . 533. Many cases following Barker have recognized that the principles are not so constricted as the majority assumes. The foregoing quotation was set out and approved in its entirety in Moore v. Arizona, 4 1 4 U . S . 25, 94 S . C t . 188, 38 L ed 2d 183, 185, 186. As stated in United States v. Dreyer, 533 F.2d 112, 115: "* * * The Court emphasized that it did not intend the list to be exhaustive nor any one factor dispositive and that other relevant circumstances should also be considered." (Emphasis added. ) It is the "other relevant circumstances" set forth above in this opinion, which cannot be ignored for a proper application of Barker. The majority opinion purports to give full support to the rejection by Barker of the "demand-waiver doctrine". Af ter doing so, however, the majority goes all the way around the horns of their dilemma and gives actual effect to the "demand-waiver" rule. For this reason, we should look at the United States Supreme Court's statement in connection with the rule in Barker: "Such an approach, by presuming waiver of a fundamental right from inaction, is inconsistent with this Court's pronouncements on waiver of constitutional rights. The Court has defined waiver a s 'an intentional r e l i n - quishment o r abandonment of a known r i g h t o r privilege. I * * * Courts should 'indulge every reasonable presumption against waiver.' * * * and they should 'not presume acquiescence i n the loss of fundamental rights.' * * * I n Carnley v. Cochran, 369 U.S. 506, 8 L.Ed.2d 70, 82 S.Ct. 884 (1962), we held: I I I Presuming waiver from a s i l e n t record is imper- missible * * * there must be an allegation and evidence * * *."I 407 U.S. 525,526. By, i n e f f e c t , applying the "demand-waiver rule" , the majority does further violence t o the law enunciated i n Barker: "The nature of the speedy t r i a l r i g h t does make it impossible t o pinpoint a precise time i n the process when the r i g h t must be asserted o r waived, but t h a t f a c t does not argue f o r placing the burden of protecting the r i g h t solely on defendants. A defendant has no duty t o bring himself t o t r i a l ; the S t a t e has t h a t duty a s well as the duty of insuring t h a t the t r i a l is consistent with due process. Moreover, f o r t h e reasons e a r l i e r ex- pressed, society has a p a r t i c u l a r i n t e r e s t i n bringing swift prosecutions, and society's representatives a r e the ones who should protect t h a t i n t e r e s t .I' (~mphasis added. ) 407 U.S. 527. The majority opinion a t page 7 attempts t o support its ultimate conclusion by c i t i n g t h e cases r e l i e d on by the s t a t e , wherein delays i n excess of t h a t Judge Sorte was confronted with were involved. It should be noted the only United States Supreme Court case c i t e d is United States v. Ewell, 383 U.S. 116, 86 S e c t . 773, i5 L ed 2d 627, decided February 23, 1966, over 6 years p r i o r t o Barker. Since Barker is universally accepted a s the Bible on speedy t r i a l issues, and since it has been a foundation f o r the new federal r u l e s and the decisions d r a s t i c a l l y reducing permissible delays i n bringing a case t o t r i a l , any authority of "Ewell" is diluted, and t o some extent superseded by Barker. Further, the f a c t s i n Ewell are not a t a l l similar t o those of the i n s t a n t case, nor a r e the f a c t s i n the other cases c i t e d by the s t a t e and the majority. It should be noted also that the delay i n Ewell was not "substantially i n excess" of that i n t h i s case, as stated by the majority. In t h i s case, the time between the f i l i n g of the Informa- tion and the order of Judge Sorte was 585 days, as compared t o 576 in Ewell. A t any rate, the quotation of the majority from Ewell a t page 10 of the majority opinion, is not consonant with the national trend since 1966. The substance of the quotation is that unless 11 prosecution is ,.purposeful or oppressive" i n delaying a prosecution, there i s no denial of a speedy t r i a l . This i s not the law under the 1972 Barker decision and the cases and rules applied since then. This has not been the law i n Montana, prior t o the majority decision i n t h i s case. The majority opinion makes t h i s charitable statement a t p. 13: "In our view the record i n t h i s case amply demonstrates that the defendants did not really want a speedy trial." (Emphasis added.) This is an exceedingly transparent e f f o r t t o bring t h i s case within the result of Barker,but t h i s case i s i n no manner o r way similar under the facts of Barker. There, Barker was anxiously awaiting the outcome of t r i a l s and appeals i n the related case of Manning, who was charged with the same crime. Barker was gambling that h i s case would be dismissed i f Manning were eventually acquitted. The s t a t e obtained 16 continuances of t r i a l dates, and Barker made no objection t o 13 of these continuances. H e thoroughly approved of the delays u n t i l he l o s t h i s bet. There are absolutely no similar facts in t h i s case. Moreover, a search of the record f a i l s t o disclose any evidence t o support t h i s gratuitous statement of the majority. Likewise, i f there was any issue of fact before Judge Sorte as t o whether or not the Cardens wanted t o go t o t r i a l , it i s not apparent from the record. Under the established rules of appellate procedure neither an issue of law nor an issue of fact can be raised for the first time on appeal. The majority completely by-passes this principle. The discretion vested in the trial court and the presumptions in the trial court's favor recognized in Steward seem to have no meaning in this case. This Court stated in Steward: "This Court has held many times that all presumptions are in favor of the trial court's decision. [Citing cases.] The district court had ample opportunity to view the record and determine the inferences to be drawn from the actions of the parties. We find no substantial evidence on the record rebutting the presumption the district court acted properly in holding the actions of defendant and his attorney did not waive the ripht to a speedy trial." (Emphasis added.) 543 P.2d 183. This Court further recognized the discretion vested in the trial court in connection with the question of dismissal with prejudice. In Steward, we said: "* * * The State may exercise discretion as to whether the accused will be reprosecuted. The trial court should possess similar discretion to disallow repmsecution if the prejudice caused the accused and his defense by the denial of a speedy trial would be compounded by a subsequent prosecution for the same offense." 543 P.2d 184. If we continue to recognize the presumption in favor of the < . ,-,. - . - ,- - . - , - A ; -\.- 4 r . 1 ruling of the trial court there is no basis for reversal on this record. If the majority bases its holding on manifest abuse or lack of substantial evidence, it should so state. The contention that the state has no responsibility for the time consumed in connection with defendants' 56 motions attacking the Information creates a bit of a "stench". There is no way or no case to support any angle the state can use to avoid responsi- bility for the time attendant to disposing 13 of the 1 9 counts. The majority opinion denies that "the initial filing of a 19 count Information in this case [was] unreasonable'! at page 10, but the - state admitted 13 counts were untenable. To say they were improvi- dently filed would be undeservedly apologetic and charitable. (See also in this connection: 5 3 . 9 ( c ) ( e ) of Std. for Criminal Justice of American Bar Association and Disciplinary Rules 7-103A and 1 - 1 0 2 ( A ) ( 4 ) ( 5 ) ; Montana Cannons of Professional Ethics 3 . 9 ( a ) ( c ) ( e ) . ) See also: United States v. Pauline Pipe, (Mont.) Havre-Glasgow Div., Federal District Court CR-77-10-HG, April 1977, for a discussion concerning repeated indictment as denial of due process which doctrine would not exclude application to untenable Information counts. The majority further condemns the defendants in relation to the number of counts at p . 10 of its opinion, saying "this is largely speculative and unconvincing in light of the 25 motions filed by the defendants attacking the amended Information and the addi- tional discovery motions, venue motion, severance motion, and motion relating to pretrial publicity." This charitable statement seems to assume that all motions should be filed at the outset of the proceedings. After a declaration of "unusual case", I fail to see any justification for the characterization "speculative and unconvincing" to describe motions relating to venue and pretrial publicity prior to the time the grounds had fully accrued, or not filing discovery motions prior to the time when it was determined whether or not the Information would be dismissed. The majority on p . 9, recognizes that 5 4 4 days between filing Information and trial date was sufficient to trigger an inquiry as to speedy trial in the following language: "It establishes a prima facie case of denial of a speedy trial. State ex rel. Sanford v . Dist.Ct., supra. If this prima facie case remains unrebutted, the issue is settled." (Emphasis added.) Having purported to recognize the rule, the majority emasculates it by ignoring that the burden is upon the state to rebut the the presumption of a denial of a speedy trial and it is the duty of the state to bring the case to trial. On p. 10 of its opinion, the majority blandly states: "In our view the state has pursued the prosecution with reasonable diligence .I1 This statement cannot be justified by the record and particularly the state's belated disqualification of Judge Allen after presiding for 264 days, but, more that that, it sidesteps the issues. The question is not limited to whether the prosecution proceeded with !'reasonable diligence" but whether or not the defendants were deprived of a constitutional right. If they were so deprived at the hands of the state, it matters not whether it was the executive, legislative or judicial branch at fault. (In this regard, see admissions by state in Petition for Supervisory Control v. Arnold Olsen (Goldman dismissal), April 26, 1977.) The majority states at p . 13: "* * * The further circumstance that defendants waited until the eve of trial to file their motions illustrates the transparent nature of their claim that they were deprived of their constitutional right to a speedy trial." (Emphasis added.) Let us take a good look at the above statement and then compare it with the unanimous expression of the Court in Steward. It was there said: "The 'appropriate motion' is a motion to dismiss for denial of a speedy trial. The proper time to assert the right to a speedy trial is prior to the actual commencement of-the trial, usually at the time the trial date is set, or the time the case is called to trial. Morse v . Munici- pal Court, et al., 1 3 Cal.3d 149, 118 Cal.Rptr. 14, 529 ~ . 2 d 46. -~efendant, in the instant case, made his motion to dismiss at the proper time." (Emphasis added.) 543 P.2d 182. We also stated in Steward: "The district court here was correct in holding: "' * * * the Defendant's attorney would not be representing the Defendant if he would raise the question of the fair speedy trial. This was incumbent upon the County Attorney to do so under the circumstances. 1 1 1 (Emphasis added.) 543 P.2d 182. Here, the "tentative trial date" was June 17, 1976 and on May 11, 1976 defendants filed their motion to dismiss for lack of a speedy trial. How does this differ from the law announced in Steward? The majority attempts to circumvent Barker by constant reference to lack of "dead time", pp. 10, 12 and 1 4 of its opinion, apparently on the theory that if there is no extended interlude without some activity there can be no deprivation of a speedy trial. There is a very conspicuous lack of authority cited for this theory, and the only mention in Barker of "dead time" is in a totally different context. There Justice Powell observed: "* * * Most jails offer little or no recreational or rehabilitative programs. The time spent in jail is simply dead time." (Emphasis added.) 407 U . S . 532,533. Any application of this statement to the instant case is difficult to see or understand. In passing I must comment that at p . 12 of its opinion the majority takes the position that the state or "society" is left "naked of the means to protect itself in the face of any protracted or spirited defense." In light of the facts of this case, the statement can only be viewed as an apology for incompetence. If nothing else it is a new concept that the state needs protection from individual defendants. Society does have an interest in speedy trials, but it is not adversary. It is in upholding and protecting the integrity of the judicial system against the deficiencies and abuses of its agencies which are in total control of the state government. The defendants and society, rather than arch adversaries, are in a position of parallel interests. It is ludicrous to make the assertion, particularly in what the state has termed an "unusual case" backed by state appropriation of approximately $1,933,737.00, against a handful of defendants. This imbalance is not a naked society but approaches tyranny. The thread of misunderstanding runs all through the majority opinon and finally in the summary, p . 15, asserts: 'I* * * the circumstances of this particular case involve substantial delay resulting primarily from the exercise of statutory procedural rights inherent in Montana's criminal justice system for which neither the state nor the defendants are chargeable * * * . I 1 ( % $ h a s i s added) This statement like the rest of the opinion misses the principal point, that this is not a 2 or single element matter, such as how the prosecution proceeded, that controls. Rather it is the total effect of the system. If the "Montana criminal justice system1' is so structured that a relatively simple, single transaction, alleged to be criminal, results in a 544 day delay of trial, then there has been a denial of a speedy trial, and it matters not whether it resulted in action or inaction by the courts, prosecution or legislature, or all in concert, the state is the system and totally responsible for "statutory procedures inherent in Montana's criminal justice system". Again, the majority persists in ignoring the basic rule of Barker: "* * * But the rule we announce today, which comports with constitutional principles places the primary burden on the courts and the prosecutors to assure that cases are brought to trial. * * *I1 407 U . S . 529. Again, on the matter of prejudice, I point out to-the majority that: ( 1 ) District Judge Sorte in the memorandum supporting his "order and judgment dismissing with prejudice" stated: "In t h i s S t a t e the law is t h a t long delay establishes a prima-facie case of denial of a speedy t r i a l . This case, a s of July 28, 1976, was 586 days from t h e date of the f i l i n g of the Information and i s presently s e t f o r t r i a l August 16th, 1976, which i s 605 days. Sanford (July 8th, 1976) held delay of ten months (299':days) between arraign- ment and t r i a l establishes a prima-facie case of denial of the r i g h t t o a speedy t r i a l . That s i t u a t i o n , ,‘ { vr: A is present here a s is the presumption of prejudice (Sanford v. D i s t r i c t Court, 33 S t a t e Reporter 644, S t a t e v. Steward, 32 St. Reporter 1185 and cases cited. Uncontradicted t e s t i - mony given by defendants a t a hearing held May 17, 1976, i n Great F a l l s , Montana, c l e a r l y establishes prejudice beyond the presumption. (See Exhibits admitted June 17, 1976.)" (2) The s t a t e has offered no evidence t o contradict t h i s testimony. (3) The s t a t e has the burden t o not only produce proof of no prejudice but overcome the presumption of correctness of Judge Sorte' s judgment. (4) I n S t a t e .v. Keller, Mont . 9 553 P.2d 1013, 1017, 33 St-Rep. 795,798, t h i s Court again s t a t e d one of t h e major purposes of a speedy t r i a l is t o protect the accused i n the following language: "In h i s concurring opinion i n Barker, a t page 121, J u s t i c e White emphasizes one of the major purposes i n protecting the accused. Wholly aside from possible prejudice t o a defense on the merits, the accused w i l l be subject t o sub- s t a n t i a l r e s t r i c t i o n s on h i s l i b e r t y pending t r i a l , e i t h e r i n j a i l o r while f r e e on bond, ' I 1 * * * t h a t may disrupt h i s employment, drain h i s financial resources, c u r t a i l h i s associations, subject him t o public obloquy, and c r e a t e anxiety i n him, h i s family and h i s friends."' U.S. v. Marion, 404 U.S. 307, 320, 92 S.Ct. 455, 463, 30 L ed 2d 468, (1971)." In United States v. Dreyer, 3 C.C.A. March 1976, 533 F.2d 112, 115, it was stated: "This reading of Barker, which conf ines ' prejudice' t o impairment t o the defense, was e x p l i c i t l y rejected by the United States Supreme Court i n ~ o o r e - v . Arizona, 414 U.S. 25, 26-27, 94 S.Ct. 188, 189-190, 38 L.Ed.2d 183, 185-186 (1973) (per curiam). There the Court quoted approvingly from J u s t i c e White's concurring opinion i n Barker v. Wingo, supra, 407 U.S. a t 537, 92 S.Ct. a t 2195, 33 L.Ed.2d a t 121: "'Inordinate delay "wholly aside from possible pre- I judice t o a defense on the merits, may seriously i n t e r f e r e with the defendant's liberty, whether he is free on b a i l or not, and * * * may disrupt h i s employment, drain h i s financial resources, c u r t a i l h i s associations, subject him t o public obloquy, and create anxiety i n him, h i s family and h i s friends. ' I ' United States v. Marion, 404 U.S. 307, 320, 92 S.Ct. 455, 30 L.Ed.2d 468 (1971). These factors are more serious for some than for others, but they are inevitably present i n every case t o some extent, for every . defendant w i l l either be incarcerated pending t r i a l or on b a i l subject t o substantial restrictions on h i s liberty.' "The majority i n Barker also recognized that an accused is 'disadvantaged by restraints on h i s liberty and by living under a cloud of anxiety, suspicion, and often h o s t i l i t y . ' Barker v. Wingo, supra, 407 U.S. a t 533, 92 S.Ct. a t 2193, 33 L.Ed.2d a t 118. A proper reading of Barker, therefore, must include within the meaning of 'prejudice' any threat t o what the Second Circuit recently has termed 'an accused's significant stakes--psychological, physical and financial--- i n the prompt termination of a proceeding which may u l t i - mately deprive him of l i f e , liberty or property.' United States v. Roberts, 515 F.2d 642, 645 (2d C i r . 1975).lt (Emphasis added.) (5) Our f i l e s do not reveal the defendants are proceeding forma pauperis, but are using their own assets. (6) Hence, the prejudice found and within the contemplation of Barker, Marion and Dreyer and adopted by Montana i n Keller, has not been recognized by the majority beyond "this is an unusual case". (7) There has been no burden established by the majority and no burden met by the state. (8) The s t a t e has disposed of the entire issue of prejudice summarily and t o t a l l y ignored the uncontroverted principle that the burden i s upon the s t a t e t o establish that there has been no prejudice. The majority i n stating "there i s nothing i n the record (Emphasis added.) t o suggestt'/any of these types of prejudice has unwittingly conceded that the prejudice element must be resolved 100% i n favor of de- fendants. Even i f the burden was on the defendants the conclusion of the majority would be untenable under the authority of Dreyer and cases cited therein, and Keller. I would ask the majority i n t h i s opinion, what is the s r a t e of the L a w a s it has been announced i n the many decisions s e t t i n g rorth the doctrine t h a t the judgment of the d i s t r i c t court i s presumed t o be correct and a l l doubt resolved i n favor of the prevailing party on appeal. H o w a r e we t o view the doctrine estab- lished by Steward, Sanford and Keller? Are they s t i l l the law, except i n "unusual" o r " p o l i t i c a l cases" ? I, f o r the reasons s t a t e d , f e e l Judge Sorte's judgment should be affirmed. J u s t ice. Hon. L.C. Gulbrandson, D i s t r i c t Judge, s i t t i n g f o r Chief J u s t i c e Paul G o Hatfield, agrees w i t h the dissent of M r . J u s t i c e Daly, t o the extent said dissent imposes responsibility upon the S t a t e of Montana for " i n s t i t u t i o n a l delays" i n the criminiil j u s t i c e system.

May 25, 1977

f8b32424-72fc-405f-8af3-4e5d38b2d2dd

TSCHACHE v BARCLAY

N/A

13252

Montana

Montana Supreme Court

No. 13252 I N THE SUPREPIE COURT O F THE STATE OF M O N T A N A J U N I O R W. TSCHACHE and ELIZABETH A. TSCHACBE, husband and w i f e , P l a i n t i f f s and Respondents, CLARENCE L. BARCLAY and GLADYS BARCLAY, husband and w i f e , Defendants and A p p e l l a n t s . Appeal from: D i s t r i c t Court of t h e E i g h t e e n t h J u d i c i a l D i s t r i c t Honorable Gord-on R. B e n n e t t , Judge p r e s i d i n g Counsel of Record: F o r A p p e l l a n t s : B e n n e t t and B e n n e t t , Bozeman, Montana Lyman H. B e n n e t t I11 argued and Lyman B e n n e t t , Jr. a r g u e d , Bozeman, Montana For Respondents : Landoe, Gary and P l a n a l p , Bozenan, Montana Robert P l a n a l p argued, Bozeman, hlontana Submitted: J a n u a r y 1 0 , 1977 Decided: - . W 2 6 F i l e d : &fiY 2:i M r . J u s t i c e Daniel J. Shea delivered the Opinion of the Court. S e l l e r s appeal from a judgment entered i n the d i s t r i c t court, Gallatin County, by the t r i a l judge s i t t i n g without a jury, allowing buyers t o terminate t h e i r amended contract f o r deed under a con- t r a c t u a l r i g h t of rescission and ordering s e l l e r s t o return a l l money paid on the purchase price. S e l l e r s sued buyers t o terminate t h e i r r i g h t s under t h e contract and buyers countersued, asking f o r rescission of the contract. S e l l e r s r a i s e four issues on appeal: (1) They were fraudulently induced i n t o entering the amended contract f o r deed; (2) buyers a r e bound t o perform the contract under the doctrine of estoppel; (3) the d i s t r i c t court improperly refused testimony t h a t would show the circumstances under which s e l l e r s entered i n t o an agreement t o place the contract f o r deed i n escrow; and (4) buyers f a i l e d t o completely restore s e l l e r s t o t h e i r position p r i o r t o the contract. S e l l e r s a r e Clarence and Gladys Barclay; buyers a r e Junior and Elizabeth Tschache. O n December 24, 1971 the p a r t i e s entered i n t o a contract f o r deed f o r approximately 81 acres of land located i n Gallatin County. Buyers intended t o subdivide the land and s e l l l o t s f o r houses o r t r a i l e r homes, The contract provided, however, t h a t the buyers could terminate the contract and recover a l l money paid on the purchase price, i f they determined within two years the land could not be developed. Buyers paid $15,000 a s a down payment and l a t e r paid two annual installments of $8,000 each. The dispute here centers around an amended contract f o r deed signed by the p a r t i e s a t o r near the end of the expiration of the f i r s t 2 year contract. Buyers conducted extensive t e s t s on the land and discovered problems with zoning, sewage disposal and flood plain regulations. A s a r e s u l t , t h e i r preliminary p l a t s were not approved. I n 1973 they sought a bank loan t o pay the annual installment due on December 15. The bank o f f i c i a l s knew buyers could not obtain approval of t h e i r development plans and accordingly requested,before granting the loan, t h a t buyers f i r s t obtain a new contract extending the r i g h t t o terminate the transaction and place i n escrow with the bank a warranty deed running t o the buyers. O n December 24, 1973 the p a r t i e s did sign an amended contract f o r deed, which gave buyers two more years t o terminate the trans- action,and an escrow agreement. I n February 1974, s e l l e r s deposited the amended contract f o r deed and the warranty deed i n escrow. However, buyers f a i b d t o pay the annual installment due on December 15, 1974 and s e l l e r s on February 28, 1975 sent them a notice of default. Buyers responded by invoking the rescission agreement i n the contract, and on March 18, 1975 they sent the rescission notice t o s e l l e r s , claiming the land could not be developed because of flood p l a i n r e s t r i c t i o n s and because its elevation and s o i l condi- t i o n s precluded proper drainage. S e l l e r s f i r s t claim the buyers fraudulently induced them t o enter i n t o the amended contract f o r deed. Although the contract is dated December 24, 1973, s e l l e r s maintain it was not executed u n t i l l a t e i n February 1974, a t about the time the warranty deed and escrow agreement were signed. S e l l e r s then argue buyers concealed from them the f a c t the l o c a l planning board on February 14, 1974 rejected buyers' subdivision plans, and a l s o concealed the f a c t the bank required a new contract before it would loan money t o buyers. S e l l e r s maintain buyers had already decided the land could not be developed and sought the new contract solely t o revive t h e i r right t o terminate the transaction which expired on December 24, 1973, under the f i r s t contract. However, the d i s t r i c t court found contrary to these contentions. The d i s t r i c t court found the amended contract for deed was executed on December 24, 1973, prior t o the rejection of buyers' subdivision plans i n February 1974. Further, that s e l l e r s were well aware of buyers' d i f f i c u l t i e s i n developing the land and signed the new contract t o allow buyers more time t o solve the problems. The d i s t r i c t court found no proof of fraud. In Cowan v. Westland Realty Co., 162 Mont. 379, 383, 512 P.2d 714, t h i s Court said: "This Court has stated many times that i t s function on appeal i s t o determine whether there is substantial evidence t o support the findings of the d i s t r i c t court. This Court w i l l not reverse the findings of the t r i a l court unless there i s a clear preponderance of the evidence against such findings. [Citing cases. 1" Contrary t o s e l l e r s ' claim on appeal, one of s e l l e r s (Mr. Barclay) t e s t i f i e d the parties did execute the amended contract for deed on December 24, 1973, and a t that time buyers told him they were having trouble satisfying flood plain regulations. There was substantial testimony buyers continued t h e i r efforts t o formu- l a t e an acceptable plan for subdivision i n 1974. They sent t h e i r notice t o rescind more than one year a f t e r they executed the amended contract for deed and t h i s was done only a f t e r buyers t r i e d t o f o r f e i t sellers' rights under the contract. Sellers contend buyers did not t e l l them the bank required an amended contract for deed before it would loan more money t o buyers t o make that year's annual installment. However, there i s testimony i n the record that one of the buyers so informed sellers. Moreover, even assuming non-disclosure of t h i s fact from the s e l l e r s , it was not material t o the contractual relationship between the parties and cannot serve as a basis for fraud. Ray v. Divers, 72 Mont. 513, 234 a The s e l l e r s next claim that buyers, by the act of signing the escrow agreement and putting the contract i n escrow (a departure and from the f i r s t contract), accepted the land/are estopped t o assert otherwise. Sellers rely on section 93-1301-6(3), R.C.M. 1947, which provides : "Whenever a party has, by h i s own declaration, a c t , o r omission, intentionally and deliberately led another t o believe a particular thing true, and t o act upon such belief, he cannot, i n any l i t i g a t i o n arising out of such declaration, a c t , o r omission, be permitted t o f a l s i f y it." The 1971 and 1973 contracts provided that upon buyers' acceptance of the land, s e l l e r s were t o convey the land t o a bank a s a trustee. Sellers admit signing the escrow agreement without reading it, but i n s i s t buyers misled them into believing, the escrow agreement was really the t r u s t arrangement s e t forth i n the contracts. Then, they contend, when buyers asked t o put the warranty deed and amended contract for deed i n escrow "according t o the contract" they thought they were doing it according t o the t r u s t arrangement and t h i s consti- tuted an acceptance of the contract. Sellers claim an estoppel based on these facts. The d i s t r i c t court found that s e l l e r s possessed a copy of the amended contract for deed and the original escrow agreement for "a considerable length of time and had ample opportunity t o examine them". Sellers did not explain why they failed t o read the escrow agreement and amended contract for deed, other than.their reliance on buyers' alleged representations. Such reliance was unjustified. Estoppel has no application where the "'means of knowledge of both parties i s equal"'. Colwell v. City of Great Falls, 117 Mont. 126, 139, 157 P.2d 1013. Sellers next claim the court improperly excluded sellers' offered testimony they signed the warranty deed and escrow agreement solely i n reliance on the buyers' representation that the instruments would establish the t r u s t described i n the amended contract for deed. While par01 evidence is generally excluded under section 93-401-13, R.C.M. 1947, t h i s statute provides exceptions for i t s admission, and states i n pertinent part: "But t h i s section does not exclude other evidence of the circumstances under which the agreement was made, or t o which it relates, a s defined i n section 93-401-17, or t o explain an extrinsic ambiguity, or t o establish i l l e g a l i t y or fraud. The term agreement includes deeds and w i l l s , a s well as contracts between parties. TI Section 93-401-17, R.C.M. 1947, provides: "For the proper construction of an instrument, the circumstances under which it was made, including the situation of the subject of the instrument, and of the parties to it, may also be shown, so that the judge be placed i n the position of those whose language he i s t o interpret. I I I f fraud had been properly pleaded s e l l e r s should have been allowed t o offer the testimony, which was t o show that these instruments constituted an acceptance of the land under the doctrine of estoppel. But, when the question came up during t r i a l and the court excluded the evidence, only a feeble e f f o r t was made t o make an offer of proof as to what fraud s e l l e r s would attempt t o prove. Sellers made no effort either before, during, o r a t the conclusion of the t r i a l , t o amend t h e i r pleadings as required by Rule 15, M.R.Civ.P. There being no fraud pleaded, sellers were not entitled t o present evidence on t h i s theory. Rule 8(a) and Rule 9(b), M.R.Civ.P. Notwithstanding s e l l e r s ' failure t o comply with these pleading requirements however, they s t i l l were permitted t o t e s t i f y that buyers told them the escrow agreement and warranty deed should be executed "according t o the contract." This testimony was sufficient t o put s e l l e r s ' theory of fraud and estoppel i n the record before the d i s t r i c t court, and under these circumstances refusal t o allow the testimony would be harmless error. Hackley v. Waldorf- Hoerner Paper Co., 149 Mont. 286, 425 P.2d 712; Kraft v. Pattyn, 135 Mont. 574, 342 P.2d 1060. Further, even though s e l l e r s were not entitled t o pursue their claim of fraud, the d i s t r i c t court made a specific finding there was no fraud. Sellers' f i n a l claim of error i s that buyers did not restore everything of value t o the s e l l e r s as i f the contract had not been made, even though they offered t o do so i n their notice of rescission. Sellers claim buyers removed the top s o i l from four o r five acres without the consent of s e l l e r s , and l e f t the land so rough it was even d i f f i c u l t t o drive over it with a tractor. O n the other hand, buyers alleged they removed only earth and gravel lying beneath the top s o i l and then replaced and reseeded the top s o i l , with the acquiescence of sellers. This conflict i n testimony created a question of fact within the province of the d i s t r i c t court t o resolve. The d i s t r i c t court judge saw and heard the witnesses t e s t i f y and was i n a superior position t o evaluate their credibility. Richardson v. Howard Motors Inc., 163 Mont. 347, 516 P.2d 1153. The d i s t r i c t court adopted the buyers' version of the facts and found no cornpensable damage had been done t o the land. W e find no error. W e affirm the judgment of the d i s t r i c t court. We Concur: Chief Justice

May 26, 1977