author: MR. JUSTICE HARRISON

text:
    WAYNE RONEK and Roger Ronek, Plaintiffs and Appellants, v. GALLATIN COUNTY, Montana, Defendant and Respondent.
    No. 86-575.
    Submitted June 2, 1987.
    Decided July 29, 1987.
    Rehearing Denied Aug. 26, 1987.
    740 P.2d 1115.

      Larry Jent argued, Bozeman, for plaintiffs and appellants.
    Harrison, Loendorf & Poston; Stephen R. McCue argued, Helena, A. Michael Salvagni, Co. Atty., Bozeman, for defendant and respondent.
    Mark Murphy, Asst. Atty. Gen., Montana County Attys. Assoc., Helena, for amicus curiae.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

Appellants appeal an order of the District Court of the Eighteenth Judicial District in and for Gallatin County, Montana, dismissing their complaint for failure to state a claim on which relief can be granted. We affirm.

This case arose out of a criminal prosecution in which the complaint, filed in Gallatin County justice court, charged common scheme theft in violation of Section 45-6-301(2)(a), MCA. Roneks, appellants here, purportedly contracted to build garages for certain named owners of property in Gallatin County and then failed to pay the materialmen who provided materials used in the construction. The County dismissed the complaint almost two months after the charges were brought. Roneks then filed a complaint against the County, premised on the theory of malicious prosecution, specifically that the charge was brought without probable cause, and for false imprisonment. The County filed its answer denying all material allegations.

Gallatin County then filed an application for a writ of supervisory control with this Court, directed to the District Court and ordering the Roneks’ complaint be dismissed. The application was denied. Meanwhile, Roneks successfully moved to amend their complaint to reflect a cause of action for violation of their constitutional rights under 42 U.S.C. Section 1983, part of the Civil Rights Act of 1871. In this count Roneks alleged that Gallatin County was liable for the action of the Gallatin County Attorney “while carrying out the policy of [Gallatin County].” The action was directed at the County only and not against any individuals. Gallatin County moved to dismiss that count, the parties submitted briefs, including an amicus brief from the Montana County Attorney’s Association. At oral argument the court granted Gallatin County leave to renew its motion to dismiss the entire complaint, including the first count alleging malicious prosecution, which the court previously had denied. Roneks were permitted to amend their complaint a second time. The District Court dismissed the entire second amended complaint in August 1986, concluding the County was not the proper entity for either of the two counts. Roneks appeal.

The dispositive issue in this case is whether Gallatin County is the proper defendant, whether the charge is malicious prosecution or violation of Section 1983 of the Civil Rights Act. Appellants apparently concede the immunity of the county attorney.

The common law powers and duties of the prosecutor can be traced back to the English common law and have been part of our system of jurisprudence since the days of the Bannack statutes. State ex rel. Ford v. Young (1918), 54 Mont. 401, 403, 170 P. 947, 948. The prosecutor is a quasi-judicial officer who enjoys common law immunity from civil liability for conduct within the scope of his duties. This allows him “to speak and act freely and fearlessly in enforcing the criminal laws.” State ex rel. Dept. of Justice v. District Court (1977), 172 Mont. 88, 90, 560 P.2d 1328, 1329.

“The common-law immunity of a prosecutor is based upon the same considerations that underlie the common-law immunities of judges and grand jurors acting within the scope of their duties. These include concern that harassment by unfounded litigation would cause a deflection of the prosecutor’s energies from his public duties, and the possibility that he would shade his decisions instead of exercising the independence of judgment required by his public trust.”

Imbler v. Pachtman (1976), 424 U.S. 409, 422-423, 96 S.Ct. 984, 991, 47 L.Ed.2d 128, 139.

We have made clear that abolition of sovereign immunity in Art. II, Section 18 of the 1972 Montana Constitution does not abolish prosecutorial immunity.

“They are different concepts and are supported by different considerations of public policy. Art II, Section 18 . . . did not abolish prosecutorial immunity. When a prosecutor acts within the scope of his duties by filing and maintaining criminal charges he is absolutely immune from civil liability, regardless of negligence or lack of probable cause.”

State ex rel. Dept. of Justice, supra, 172 Mont. at 92, 560 P.2d at 1330. The doctrine must encompass the state and its agencies, as well as the prosecutor, or its efficacy will be lost. Id. The Court finds it unnecessary to confront the thorny problem of whether the county attorney in his prosecutorial capacity is an agent of either the county or the state in order to reach a decision in this case.

We extend the holding in State ex rel. Dept. of Justice to include prosecutorial immunity for counties. Nonetheless, we will address certain of Roneks’ arguments in an effort to clarify the holding. They argue the District Court ignored the distinction between personal capacity suits and official capacity suits. Their contention is Gallatin County, the only named defendant in this action, cannot use the personal prosecutorial immunity of the county attorney as a shield for its own liability in an official capacity action. We do not find that is what the County is doing, however.

Personal capacity suits seek to impose personal liability on a governmental official for actions he takes under color of state law. Scheuer v. Rhodes (1974), 416 U.S. 232, 237, 94 S.Ct. 1683, 1687, 40 L.Ed.2d 90, 98. Clearly the case at bar is not such a case. By contrast, however, Roneks argue that official capacity suits “generally represent only another way of pleading an action against an entity of which an officer is an agent.” Monell v. N.Y. City Dept. of Social Services (1978), 436 U.S. 658, 690, n. 55, 98 S.Ct. 2018, 2035, n. 55, 56 L.Ed.2d 611, 635, n. 55. The Court in Monell continued, however:

“[L]ocal government officials sued in their official capacity are “persons” under Section 1983 in those cases in which, as here, a local government would be suable in its own name.”

Id.

In Monell, the New York City Department of Social Services and the City Board of Education, as a matter of official policy, compelled pregnant employees to take unpaid leaves of absence before such leaves were required for medical reasons. The named defendants, the Department and its Commissioner, the Board and its Chancellor, the City of New York and its Mayor, were sued solely in their official capacities.

In the case at bar, the county attorney is not a named defendant in either his personal or official capacity. Further, Gallatin County is immune from suit when prosecutorial misconduct is at issue by virtue of our holding in State ex rel. Dept. of Justice, supra. In order to apply the reasoning in Monell, an official of the governmental entity must be named in his official capacity, and the governmental entity must be suable in its own name. Neither circumstance pertains here.

The prosecutorial duties of the county attorney are' defined statutorily and include drawing all indictments and informations. Section 7-4-2712, MCA. The county attorney also must:

“(1) attend the district court and conduct, on behalf of the state, all prosecutions for public offenses and represent the state in all matters and proceedings to which it is a party or in which it may be beneficially interested, at all times and in all places within the limits of his county;
“(2) when ordered or directed by the attorney general to do so, promptly institute and diligently prosecute in the proper court and in the name of the state of Montana any criminal or civil action or special proceeding;
“(3) defend all suits brought against the state.”

Section 7-4-2716, MCA. A determination by the county attorney to bring an action is discretionary, and is his duty under the law. There is no evidence or specific allegation the county attorney exceeded his authority or was derelict in his duty under the law.

Roneks are not aided by amending their complaint to include a Section 1983 action.

42 U.S.C. Section 1983 provides:

“Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress

Local government entities can be sued under Section 1983

“[w]here . . . the action that is alleged to be unconstitutional implements or executes a policy statement, ordinance, regulation, or decision officially adopted and promulgated by that body’s officers. However, . . . [there must be] an allegation that official policy is responsible for a deprivation of rights protected by the Constitution.”

Monell v. N. Y. City Dept. of Social Services, supra, at 690, 98 S.Ct. at 2035-2036, 56 L.Ed.2d at 635.

“[P]laintiffs have failed to allege with specificity that any particular action was taken pursuant to any particular policy, [or] that any specified policy exists . . .”

Whelehan v. County of Monroe (W.D.N.Y. 1983) 558 F.Supp. 1093, 1103.

A careful examination of the pleadings does not enlighten the Court as to which of Roneks’ constitutional rights were violated. A suspect who is jailed pursuant to a valid warrant has no claim under the Fourteenth Amendment to the United States Constitution that he was deprived of his liberty without due process. Baker v. McCollan (1979), 443 U.S. 137, 143-146, 99 S.Ct. 2689, 2694-2695, 61 L.Ed.2d 433, 441-442. (In the case at bar, Roneks allege the arrest warrant was not valid, but fail to allege the nature of the infirmity.) Nor does the allegation of malicious prosecution automatically include the elements of a Section 1983 action. Bretz v. Kelman (9th Cir. 1985), 773 F.2d 1026.

Nor can a local government be held liable solely because it employs a tortfeasor. That is, a local government cannot be held liable under Section 1983 on a respondeat superior theory. Only when an injury results from execution of a government policy or custom is the governmental entity responsible under Section 1983. See Monell, supra, 436 U.S. at 691-694, 98 S.Ct. at 2035-2037, 56 L.Ed.2d at 635-637.

There are strong policy reasons for absolute prosecutorial immunity for governmental entities, as well as for personal immunity of the prosecutor.

“It can scarcely be denied that a defendant who has been acquitted of criminal charges has nothing to lose by commencing a Section 1983 action against the prosecutor’s municipal employer. The costs to the public from frivolous claims of malicious prosecution, however, are great, and far outweigh the minimal deterrent effect of civil suits on actual prosecutorial misconduct. Whether the government’s case is weak or strong, if there is evidence establishing probable cause to believe criminal acts have been performed, the prosecutor should be given every incentive to submit the evidence to the “crucible of the judicial process so that the factfinder may consider it. . . to determine where the truth lies.” Imbler v. Pachtman, 424 U.S. 409, at 440, 96 S.Ct. 984, 999, 47 L.Ed.2d 128 (1976) White J., concurring in the judgment. These incentives are not provided if the prosecutor is to be constantly distracted by civil actions under Section 1983 that require a judge and jury to second guess the propriety of his acts performed in discharging his core responsibilities.” Armstead v. Town of Harrison (S.D.N.Y. 1984), 579 F.Supp. 777, 782-783. See also State ex rel. Dept. of Justice, supra, and cases cited therein.

This lawsuit illustrates the importance of prosecutorial immunity.

“Prosecutorial immunity does not reflect judicial or social approval of prosecutorial misconduct, but rather reflects a balance between an individual’s right to be treated fairly by prosecutors and society’s need to keep the criminal justice system functioning without undue interference and protracted delay.”

Siano v. Justices of Massachusetts, (1st Cir. 1983), 698 F.2d 52, 57. Cert. denied (1983), 464 U.S. 819, 104 S.Ct. 80, 78 L.Ed.2d 91.

The order dismissing the complaint is affirmed.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES WEBER, SHEEHY, GULBRANDSON, HUNT and McDONOUGH concur.


source: Caselaw Access Project

author: MR. JUSTICE HUNT

license: Public Domain

text:
    R. WESLEY MAPSTON, Personal Representative of the Estate of Raegan Ann Mapston, and R. Wesley Mapston and Carol Sue Mapston, Plaintiffs and Appellants, v. JOINT SCHOOL DISTRICT NO. 8, Lake, Missoula, Sanders Counties and Glen Paulson, Defendants and Respondents.
    No. 87-133.
    Submitted on Briefs June 11, 1987.
    Decided July 29, 1987.
    740 P.2d 676.

      Victor F. Valgenti, Missoula, for plaintiffs and appellants.
    Worden, Thane & Haines; Sam Warren, Missoula, for defendants and respondents.
   MR. JUSTICE HUNT

delivered the Opinion of the Court.

This is an appeal from the Fourth Judicial District, Missoula County, Montana, from an order granting defendant’s motion for a change of venue from Missoula County to Lake County.

We affirm the District Court.

The sole issue raised on appeal is whether Lake County is the proper county of venue for this tort action.

The facts in this case are simple, but tragic. Raegan Ann Mapston and another female student were killed on December 29, 1983 when the tractor tire innertube which they were using as a sled, hit a tree. The sledding outing was a school sponsored event supervised by Glen Paulson, a teacher at the Arlee High School. The accident occurred on a steep snow covered hill in the Jocko Canyon area of Lake County, Montana. Raegan was a 15 year old freshman at Arlee High School at the time of her death. She lived with her parents in Missoula County and was bused to high school in Arlee, which is located in Lake County.

Joint School District No. 8 services Lake, Missoula and Sanders counties. Approximately two thirds of the students who attend school within the district reside in Lake County. The principal offices of the school district are located in the Arlee High School. All permanent physical facilities of the school district are located in Lake County. The sledding accident occurred in Lake County.

Appellant agrees that defendant, Glen Paulson, resides in Lake County. Appellant also acknowledges that the alleged tort was committed in Lake County. However, appellant asserts that Section 25-2-122, MCA, which would unequivocally place this tort action as properly triable in Lake County, is not controlling. Appellant contends that Section 25-2-126, MCA, is the decisive statute and, as worded, labels Missoula County as a proper place of venue. We disagree. The pertinent language in Section 25-2-126(3) states:

“(3) The proper place of trial against a political subdivision is in the county in which the claim arose or in any county where the political subdivision is located.”

Case law in Montana has not addressed whether a school district is properly labeled a “political subdivision.” As this case can be decided without making such a distinction, we will not address it here.

Montana case law has analyzed the question of venue concerning a Montana corporation which does business in more than one county within the State. In such cases, this Court has held that a corporation does not reside in any county in which it happens to do business. A corporation in Montana has only one residence. That residence is the county in which it has it’s principal place of business. Platt v. Sears, Roebuck & Co. (Mont. 1986), [222 Mont. 184,] 721 P.2d 336, 338, 43 St.Rep. 1160, 1162.

Although a school district is not a corporation, it is similar in that it has a principal place of business which is easily identifiable.

In the present case some students attend Arlee High School in Lake County while residing in Missoula and Sanders counties for reasons of convenience and efficiency. The district includes these families living outside of Lake County because they live closer to the Arlee School than to the those located in their own respective counties. The extent of the school district’s contact with Missoula County is when buses cross the county border, pick the children up, take them to school and return them to their homes in the afternoon. This limited contact with Missoula County does not make it a county in which a school district, primarily located in and operating from Lake County, can be sued.

The proper place for a tort action is: (1) the county in which defendants, or any of them, reside at the commencement of the action; or (2) the county where the tort was committed. Section 25-2-122, MCA. See also Bradley v. Valmont Industries, Inc. (Mont. 1985), [216 Mont. 429,] 701 P.2d 997, 998, 42 St.Rep. 925, 927.

The proper county in which to try this tort action is Lake County.

The order of the District Court granting defendant’s motion for a change of venue to Lake County is affirmed.

MR. JUSTICES WEBER, HARRISON, GULBRANDSON and SHEEHY concur.


author: MR. JUSTICE WEBER MR. JUSTICE HUNT,

text:
    LARRY THORNOCK, Plaintiff and Appellant, v. PACK RIVER MANAGEMENT CO., Pack River Investment Co., and Mission Insurance Company, Defendants and Respondents.
    No. 86-326.
    Submitted on Briefs Jan. 8, 1987.
    Decided July 30, 1987.
    740 P.2d 1119.

      Michael J. McKeon, Anaconda, for plaintiff and appellant.
    Larry W. Jones; Garlington, Lohn & Robinson, Missoula, for defendants and respondents.
   MR. JUSTICE WEBER

delivered the Opinion of the Court.

In this personal injury action, Mr. Thornock appeals from the Lake County District Court’s summary judgment in favor of defendant Pack River Management Company. We affirm.

The issues are:

1. Was summary judgment improper because factual issues remain in dispute?

2. Did the District Court err in granting summary judgment before discovery was completed?

Mr. Thornock’s arm was traumatically amputated while he was operating a piece of equipment at work. His employer was Flathead Lumber Company (Flathead Lumber). Mr. Thornock has received a full settlement from Flathead Lumber through workers’ compensation.

Mr. Thornock brought this action to recover damages from entities other than his employer. This appeal involves only the claim against Pack River Management Company (Pack River). Mr. Thornock abandons any further claim against defendant Pack River Investment Company in his brief on appeal. The claim against defendant Mission Insurance Company has been stayed because Mission is in conservatorship.

Pack River is a Washington partnership whose members own 85% of the stock in Flathead Lumber, a Montana corporation. Mr. Thornock sued Pack River on a theory that it owed him a duty to provide a safe place to work, based on its relationship with his immediate employer, Flathead Lumber. He relied upon this Court’s opinion in Reynolds v. Burlington Northern, Inc. (Mont. 1980), [190 Mont. 383,] 621 P.2d 1028, 37 St.Rep. 1883, as authority for the duty. The District Court concluded that because of factual differences, a casting aside of the corporate cloak was not justified in this case as it was in Reynolds. It ruled that Mr. Thornock had presented no factual situation which would allow him to pursue a separate claim against Pack River. Mr. Thornock appeals from the resulting summary judgment for Pack River.

I

Was summary judgment improper because factual issues remain in dispute?

Mr. Thornock argues that summary judgment was improperly granted. He says material issues of fact remain, under his theory that Pack River is liable as a parent company to its subsidiary Flathead Lumber. He also maintains that Pack River is liable under either an alter-ego or a principal/agency theory.

In a deposition, the manager of Flathead Lumber characterized the relationship between Pack River and Flathead Lumber as a parent-subsidiary relationship. Mr. Thornock argues that under this Court’s opinion in Reynolds, that admission prohibits summary judgment because it requires Pack River to provide a safe place for him to work.

In Reynolds, plaintiff was a lumber company employee who was badly injured while loading woodchips into defendant Burlington Northern’s railroad cars. Plaintiff’s place of employment was a railroad siding leased from the defendant railroad by plaintiff’s employer, the wholly-owned subsidiary of a wholly-owned subsidiary of the railroad. Several railroad cars had been placed on the siding by railroad employees, and the brakes had not been set. A string of empty cars began to roll and struck a cable on which the plaintiff was working, throwing him into the air and breaking his leg. This Court stated that “[t]he plaintiff was performing work more directly connected to the operations of a railroad than to the operations of a lumber company,” and that “[t]he plaintiff was working directly in the operations of the railroad in every sense of the word.” Reynolds, 621 P.2d at 1037 and 1038. The Court held that the defendant railroad company owed plaintiff the duty to provide him with a safe place to work. Reynolds, 621 P.2d at 1038.

In the present case, Mr. Thornock was injured while working in the Flathead Lumber mill using equipment owned by Flathead Lumber. There is no suggestion that Pack River was or is engaged directly in the lumber business, or in a directly related business. In addition, nothing has been presented to show that Pack River was an operating entity engaged in operating its business at the place of injury. This is in direct contrast to the operation of the railroad by Burlington Northern in Reynolds. We conclude that these factual differences are controlling and that as a result Mr. Thornock has failed to prove that Pack River owed him the duty to provide a safe place to work under Reynolds.

Under his alter ego and principal/agency theories, Mr. Thornock argues that Flathead Lumber was so controlled by Pack River that it “amounts to nothing more than a facade that should be disregarded.” He contends that the corporate cloak should therefore be cast aside, allowing the Flathead Lumber shareholders to be sued. The rule, as cited by Mr. Thornock, is that the corporate cloak will not be cast aside under either an agency or an alter ego theory unless it appears “not only that the corporation is controlled and influenced by one or a few persons, but, in addition . . . that the corporate cloak is utilized as a subterfuge to defeat public convenience, to justify wrong, or to perpetrate fraud.” 18 C.J.S., Corporations, Section 6, p.378, cited in State v. Holmes (1942), 113 Mont. 303, 308, 124 P.2d 994, 996.

Mr. Thornock refers to deposition testimony in which the manager of Flathead Lumber stated that Flathead Lumber was a subsidiary of Pack River and that major corporate decisions were discussed with the managers of the Pack River partnership. The manager also testified, however, that he himself made the day-to-day decisions and conducted the day-to-day operation of Flathead Lumber. Further, Mr. Thornock has not shown by affidavit or deposition any indication that Flathead Lumber was utilized as a subterfuge to defeat public convenience, to justify wrong, or to perpetrate fraud. We conclude that summary judgment is not precluded under the alter ego or principal/agency theory.

We further point out that Mr. Thornock has failed to show a legal theory under which recovery would be allowed had he been able to prove that Pack River in fact was the principal for which Flathead Lumber was the agent, or that Pack River was the alter ego of Flathead Lumber. Had he been successful in proof of either the principal/agency or alter ego theory, the result would be that Pack River would be classed as the same entity as Flathead Lumber. Flathead Lumber has discharged its responsibility for Mr. Thornock by securing workers’ compensation insurance, with the result that neither Flathead Lumber nor Pack River would be separately subject to liability for the injury which was covered by the Workers’ Compensation Act.

II

Did the District Court err in granting summary judgment before discovery was completed?

Mr. Thornock maintains that summary judgment was improperly granted before he received answers to two sets of interrogatories, two requests for production, and a request for an admission. He cites Rule 56(c), M.R.Civ.P.:

“. . . The [summary] judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law . . . .”

When Pack River moved for summary judgment, it also moved for and was granted an extension of time to answer the discovery requests at issue here. The District Court was clearly aware of the pending discovery requests. It had before it the undisputed affidavit of a Pack River partner that Pack River was a Washington partnership and that it owned 85% of the stock of Flathead Lumber, a Montana corporation. Copies of the Flathead Lumber corporate records from the office of the Secretary of State were before the court. It was undisputed that the piece of equipment on which Mr. Thornock was injured belonged to Flathead Lumber and that the area of injury was under the operational control of Flathead Lumber. A copy of Mr. Thornock’s petition for full and final workers’ compensation settlement with Flathead Lumber was a part of the District Court file. The discovery requests which remained unanswered related essentially to the business arrangements between Pack River and Flathead Lumber. There was nothing in these discovery requests which was aimed at determining whether or not Pack River in some way itself was an operating company in the specific area where the injury took place. The interrogatories were aimed at determining the nature of the control Pack River exercised over Flathead Lumber. We conclude that none of the requests are aimed at bringing forth information regarding the operations of Pack River in such a manner as to establish that Pack River owed Mr. Thornock a duty of providing a safe workplace. Under the facts of this case we hold that the District Court did not err in granting summary judgment before discovery was completed.

Affirmed.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, GULBRANDSON and McDONOUGH concur.

MR. JUSTICE HUNT,

dissenting:

I dissent from the majority opinion and would hold that summary judgment was inappropriate. The plaintiff is entitled to show, after discovery, that material issues of fact remain.

The lower court granted summary judgment to defendant finding that Pack River owned 85% of the Thornock’s employers stock; Flathead Lumber Company, not Pack River, owned the equipment which injured Thornock; and that Thornock failed to counter defendant’s claim that defendant was not engaged in duties closely connected to Flathead Lumber Company.

I do not believe these stated findings are dispositive of the issues. An entity is not necessarily immune from tort liability to an employee of another entity that it controls for its own independent acts of negligence. It may be held liable under common law principles for any harm resulting from its own reckless conduct or negligence. Reynolds v. Burlington Northern, Inc. (Mont. 1980), [190 Mont. 383,] 621 P.2d 1028, 37 St.Rep. 1883; 30 A.L.R.4th 948.

This rule is not limited to the facts in Reynolds. A rainbow of factual scenarios may create such a duty. See 2A Larson, Workmen’s Compensation Law, Section 72.40; 30 A.L.R.4th 948 Workers’ Compensation Immunity As Extending to One Owning Controlling Interest In Employer Corporation.

Further, the fact that Thornock had received Workers’ Compensation benefits is not dispositive of the duties owed to him by Pack River. Thornock is entitled to thoroughly discover facts to support his theories.

Discovery had not yet been completed by the parties. Two sets of plaintiff’s interrogatories to defendant which requested information about the interrelationship of Flathead Lumber Company and defendant Pack River, are unanswered. Two sets of requests J&íyarQduction of documents and a request for admission remained unanswered.

In its final order the trial court noted that Thornock did not counter Pack River’s claim that the defendants were not engaged in duties “closely-connected” to Flathead Lumber Company. The discovery method was the only method available to Thornock to show a “close connection” or to show other factors indicative of a duty owed to him since respondent was in possession of that information. He may have been able to establish the existence of a duty owed to him by Pack River had he been allowed to complete discovery.

I would hold that appellant is entitled to present his full case to the court after discovery is complete and would therefore reverse and remand this case with instructions to allow the parties to proceed with discovery.

MR. JUSTICE SHEEHY concurs in the foregoing dissent of MR. JUSTICE HUNT.


author: MR. JUSTICE GULBRANDSON

text:
    ELMER A. ERBAN, Plaintiff and Respondent, v. JOSEPH F. MONFORTON, Defendant and Appellant.
    No. 86-510.
    Submitted on Briefs March 19, 1987.
    Decided Aug. 3, 1987.
    740 P.2d 677.
    Morrow, Sedivy & Bennett; Lyman H. Bennett, III, Bozeman, for defendant and appellant.
    J. David Penwell, Bozeman, for plaintiff and respondent.
   MR. JUSTICE GULBRANDSON

delivered the Opinion of the Court.

Joseph Monforton appeals a decision from Gallatin County District Court finding him liable for unjust enrichment as a result of unreasonably withholding written consent to an assignment of respondent Elmer Erban’s interest in a tract of land. The issue on appeal is whether there is substantial credible evidence to sustain the decision of the District Court. We affirm.

In 1979, Erban entered into a contract for deed with Monforton for the purchase of real property located in Gallatin County, Montana. The total purchase price was $162,500. Erban made a downpayment of $8,382.12 when the contract was signed, a payment of $5,000 in early 1980, and in October 1980, a payment of $10,849.13, to bring the total payments to $24,231.25. Erban also made improvements to the property in the amount of $3,889.77. Erban purchased the property for use and occupancy by his daughter and her husband, Ray McReynolds. The couple began occupancy in October 1979 and the arrangement was that the couple would begin making payments in 1981. The couple made the 1981 payment and were divorced in September 1982. McReynolds, the son-in-law, decided to stay on the premises and expressed his intentions to Erban. In August 1982, or one month before the couple’s divorce was completed, Erban executed an “assignment and novation” with McReynolds and signed a quitclaim deed conveying the property to McReynolds. The quitclaim deed was delivered to the escrow agent by the attorney representing Erban’s daughter in the divorce proceedings. Erban acknowledges that the attorney was acting on his behalf. In July 1983, or nearly one year later, Erban asked for Monforton’s written consent to the assignment to McReynolds.

The 1979 contract between Erban and Monforton provided:

“3. Assignment. This Agreement shall not be assigned, nor shall the real property which is the subject of this Agreement be encumbered by the second party without receiving written consent from the first party, said written consent not to be unreasonably withheld by the first party.”

Monforton responded through his attorney saying that “consent was not extended by Joe [Monforton].” No explanation was given for Monforton’s refusal to consent to the assignment. Monforton alleges in his brief that he refused to consent because McReynolds was late with the 1982 payment under the Erban-Monforton contract and had been recently divorced. Notices of default and acceleration were sent to Erban in late 1983. Erban failed to respond, assuming that the contract with Monforton had been canceled. In March 1984, Monforton accepted a $152,000 cash payment and a promissory note for $22,341 from McReynolds. This allowed McReynolds to break escrow and record the warranty deed from Monforton to Erban, which, together with the deed from Erban to McReynolds, provided for a clear chain of title from Erban to McReynolds and allowed McReynolds to purchase the property at a price of $174,341. Erban then filed suit against Monforton for unreasonably withholding his consent to the assignment to McReynolds. Erban also filed suit against McReynolds and that suit is still pending. Monforton did not appear on the trial date and his counsel made motions to withdraw as counsel and for a continuance of trial proceedings. Both motions were denied.

The District Court found that Monforton had unreasonably withheld his consent to the assignment and that Erban had been damaged in the amount of $28,120.96, Erban’s investment cost. The court also awarded Erban attorney fees and costs totaling $2,045.17. If a contract states that written consent shall not be unreasonably withheld, equity principles will apply. The court stated that reasons of sound business judgment, or where the justification for refusing consent is clearly explained, would suffice. Here the court found a provision in the Erban-Monforton contract that written consent to an assignment could not be unreasonably withheld; it concluded that Monforton breached the contract with Erban by failing to provide sufficient reason for refusing to consent to the assignment and therefore was responsible for Erban’s damages of $28,120.96.

The standard of review was stated in Lima School Dist. No.12 v. Simonsen (Mont. 1984), [210 Mont. 100,] 683 P.2d 471, 476-477, 41 St.Rep. 944, 950:

“In reviewing findings of fact in a civil action tried without a jury, this Court may not substitute its judgment in place of the trier of facts. Our function is confined to determining whether there is substantial credible evidence to support the court’s findings. We view the evidence ‘in a light most favorable to the prevailing party, recognizing that substantial evidence may be weak or conflicting with other evidence yet still support the findings.’ Lacey v. Herndon (Mont. 1983), [205 Mont. 379,] 668 P.2d 251, 255, 40 St.Rep. 1375, 1380.”

Upon consideration of the contentions presented by both parties, we conclude that there is substantial credible evidence to support the decision of the lower court.

Affirmed.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, WEBER, SHEEHY, McDONOUGH and HUNT concur.


text:
    ROBERT C. ANDERSON and Violet C. Anderson, Plaintiffs and Appellants, v. TW CORPORATION, Canteen Corporation, TWA Services, Inc., a/k/a TW Services, Inc., Hal Ritchie Lauren Miles and Theodore R. Woolsey, Defendants and Respondents.
    No. 86-476.
    Submitted June 9, 1987.
    Decided Aug. 4, 1987.
    741 P.2d 397.

      Berg, Coil, Stokes & Tollefsen; Michael Coil, argued, Bozeman, for plaintiffs and appellants.
    Moulton, Bellingham, Longo & Mather; W. Anderson Forsythe, argued, Billings, for defendants and respondents.
   MR. JUSTICE HUNT

delivered the Opinion of the Court.

Appellants, Robert C. Anderson and Violet C. Anderson, brought an action in the Sixth Judicial District, Park County, to recover damages resulting from an alleged “constructive” discharge of Robert C. Anderson and other related torts arising from violations of good faith and fair dealing by his employer. Violet C. Anderson alleges negligent and intentional infliction of emotional distress arising from her husband’s charges against respondents.

On January 24, 1984, at a hearing before the District Court, several pending motions were decided, including motions by both parties for summary judgment. At that hearing, the judge dismissed appellants’ case, holding that it was preempted by federal labor law according to Allis-Chalmers v. Lueck (1985), 471 U.S. 202, 105 S.Ct. 1904, 85 L.Ed.2d 206.

The issues presented for our review on appeal are as follows:

1. Are appellants’ tort claims preempted by the National Labor Relations Act, thereby denying the State District Court subject matter jurisdiction?

2. Does the District Court dismissal deny appellants due process of law and equal protection as guaranteed by the Montana Constitution?

3. Did the District Court err by dismissing the claims of appellant, Violet C. Anderson?

4. Did the District Court err by denying appellants’ motion for partial summary judgment on the question of vacation pay?

We affirm the District Court on all issues.

Appellant, Robert C. Anderson, was employed by TW Services, a concessionaire in Yellowstone National Park. In 1970, appellant began work as a mechanic in the company’s garage located near Gar-diner, Montana, just inside the Park boundary. From May of 1971 through July 1, 1982, appellant was the shop foreman at this facility. TW Services operates a fleet of cars, buses, trucks, snowmobiles, boats and snow cats in Yellowstone. These vehicles are maintained and repaired by the mechanics at the Gardiner garage.

On June 4, 1982, appellant removed a number of rags which had been used to clean up a 55 gallon drum spillage of a degreaser called Tensene. Anderson developed contact dermatitis (skin allergy), and was forced to go on sick leave. Appellant is allergic to all petroleum-based products. In July, 1982, appellant was advised by his doctor to avoid contact with all such petroleum-based substances.

Anderson alleges that while oif work on sick leave, the management improperly changed his job description. He claims that the new position required him to spend 75% of his time acting as a mechanic and 25% of his time as a supervisor. Due to this job description, he was required to come in contact with numerous petroleum-based products which caused the reoccurrence of his allergic reaction and made him unable to return to his prior employment.

As an employee of TW Services, Anderson was a member of the International Association of Machinists and Aerospace Workers (Union). As a member of this Union, the terms and conditions of Anderson’s employment were governed by a collective bargaining agreement (CBA) outlined in the Union contract.

On Anderson’s behalf, the Union objected to the job description of “working shop foreman” and proceeded with the grievance procedure provided for in the Union agreement. This resulted in a mutual agreement that Anderson would be returned to the position which he held at the time of his accident with no changes in wages or working conditions as per contract, which were in effect at the time of injury. The agreement required that Anderson obtain a physician’s release and be able to perform the duties associated with “working shop foreman.” Anderson continued to object to the job description but alleges that the Union refused to proceed any further with his claim.

After leaving work, appellant returned to the garage to retrieve his personal files containing documents important for his personal use. Appellant contends that these files were destroyed, but the record does not show any evidence of intentional destruction of his files.

Appellant’s wife, Violet C. Anderson, filed a complaint against the same defendants alleging that both she and her husband had suffered great emotional distress and mental anguish due to defendant’s intentional negligent acts.

Before dismissal of appellants claims, defendants payed Robert Anderson money owed him for unused vacation time. This unpaid money was the subject of appellants’ count 9 of the original complaint. Appellants requested partial summary judgment on this issue after the money was paid. The District Court denied the motion and dismissed both appellants’ claims.

Issue #1

Are the appellants’ tort claims preempted by the NLRA, thereby denying the State District Court jurisdiction?

The District Court relied upon Allis-Chalmers in holding that plaintiffs-appellants’ claims were preempted by federal labor law. We agree that Allis-Chalmers is controlling in this case. See also Smith v. Montana Power Company (Mont. 1987), [225 Mont. 166,] 731 P.2d 924, 44 St.Rep. 124, a case where we considered the rule in the Allis-Chalmers case and reached the same conclusion as the District Court did here.

The federal law which preempts appellants’ claims is Section 301 of the Labor Management Relations Act of 1947 (LMRA), 61 Stat. 156, 29 U.S.C. Section 185(a). Section 301 states in part:

“Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce . . . may be brought in any district court of the United States having jurisdiction of the parties . . .”

The preemptive effect of Section 301 was first stated in Teamsters v. Lucas Flour Co. (1962), 369 U.S. 95, 103, 82 S.Ct. 571, 7 L.Ed.2d 593. The United States Supreme Court in Lucas Flour concluded that “in enacting Section 301 Congress intended doctrines of federal labor law uniformly to prevail over inconsistent local rules.” 369 U.S. at 104, 82 S.Ct. at 577.

In Allis-Chalmers, the United States Supreme Court applied the Lucas Flour analysis to hold that plaintiffs may not avoid the preemptive effect of federal labor law when a dispute involves an interpretation of a union contract by pleading in tort.

“Since nearly any alleged willful breach of contract can be restated as a tort claim for breach of a good-faith obligation under a contract, the arbitrator’s role in every case could be bypassed easily if Section 301 is not understood to pre-empt such claims. Claims involving vacation or overtime pay, work assignment, unfair discharge — in short, the whole range of disputes traditionally resolved through arbitration — could be brought in the first instance in state court by a complaint in tort rather than in contract. A rule that permitted an individual to sidestep available grievance procedures would cause arbitration to lose most of its effectiveness, Republic Steel Corp. v. Maddox, 379 U.S. 650, 653, 85 S.Ct. 614, 616, 13 L.Ed.2d 580, (1965), as well as eviscerate a central tenet of federal labor-contract law under Section 301 that it is the arbitrator, not the court, who has the responsibility to interpret the labor contract in the first instance.”

471 U.S. at 219-220, 105 S.Ct. at 1915-1916.

Although Montana does have statutory laws which coincide and seem to overlap the federal labor laws, “[a] state rule that purports to define the meaning or scope of a term in a contract suit therefore is pre-empted by federal labor law.” Id. at 210, 105 S.Ct. at 1911.

“Were state law allowed to determine the meaning intended by the parties in adopting a particular contract phrase or term, all the evils addressed in Lucas Flour would recur. The parties would be uncertain as to what they were binding themselves to when they agreed to create a right to collect benefits under certain circumstances. As a result, it would be more difficult to reach agreement, and disputes as to the nature of the agreement would proliferate. Exclusion of such claims ‘from the ambit of Section 301 would stultify the congressional policy of having the administration of collective bargaining contracts accomplished under a uniform body of federal substantive law.’ Smith v. Evening News Assn., 371 U.S. 195, 200, 83 S.Ct. 367, 270, 9 L.Ed. 246 (1962).”

Id. at 211, 105 S.Ct. at 1911.

In Smith v. MPC, this Court considered a wrongful discharge allegation in violation of the covenant of good faith and fair dealing. This Court found that because his employment was governed by a collective bargaining agreement, which included a mandatory and binding arbitration and grievance procedure, Smith’s state law claim was preempted by federal labor law.

The Union contract at issue specifically provides for a discharge dispute. The grievance procedure also provides for arbitration which is final and binding on the parties.

Robert Anderson failed to exhaust the grievance procedure outlined in his employment contract. There is nothing on the record that shows defendants acted in any way to interfere with the arbitration process. Regardless of fault for failing to exhaust the collective bargaining agreement remedies, the issue of preemption by federal labor law is separate from the issue of whether the plaintiff has exhausted his grievance procedure remedies.

“The full scope of the pre-emptive effect of federal labor-contract law remains to be fleshed out on a case-by-case basis. We do hold that when resolution of a state-law claim is substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract, that claim must either be treated as a Section 301 claim, see Avco Corp. v. Aero Lodge 735, 390 U.S. 557, 88 S.Ct. 1235, 20 L.Ed.2d 126, (1968), or dismissed as pre-empted by federal labor-contract law. This complaint should have been dismissed for failure to make use of the grievance procedure established in the collective-bargaining agreement, Republic Steel Corp. v. Maddox, 379 U.S. at 652, 85 S.Ct. at 616, or dismissed as preempted by Section 301.”

Allis-Chalmers, 471 U.S. at 220-221, 105 S.Ct. at 1916.

We affirm the District Court on issue No. 1.

Issue #2

Does the District Court’s dismissal deny appellants due process of law and equal protection as guaranteed by the Montana Constitution?

Appellants’ assertions of due process and equal protection violation are without merit. If federal law did not preempt appellants’ causes of action, they would be free to proceed in state court. If their causes of action are preempted, their rights under the Montana Constitution would not apply because of the United States Constitution’s supremacy clause, Art. VI, cl.2, and Congress’s power to preempt any state law. In that case, federal laws under the United States Constitution would provide appellants due process and equal protection.

We affirm the District Court on this issue.

Issue #3

Did the District Court err by dismissing the claims of Violet C. Anderson?

The District Court was correct in dismissing Violet Anderson’s cause of action. Her claim for the loss of consortium and consequential intentional infliction of emotional distress is inextricably intertwined with the federal interpretation of her husband’s employment contract. In Montana, one who has a proper tort action for negligence resulting in injury to himself may claim, as a damage, emotional distress. Johnson v. Super Save Markets, Inc. (Mont. 1984), [211 Mont. 465,] 686 P.2d 209, 41 St.Rep. 1495.

Montana case law has established that a cause of action for emotional distress to a third party can arise when a close relative witnesses a death or physical injury to the victim of a tort. See Versland, v. Caron Transport (Mont. 1983), [206 Mont. 313,] 671 P.2d 583, 40 St.Rep. 1681.

Violet Anderson has not alleged that she was a victim of a tort, but rather that she is entitled to compensation for loss of consortium and mental suffering which resulted from her husband being a victim of a tort.

We affirm the District Court’s dismissal of Violet Anderson’s claim.

Did the District Court err by denying appellants’ motion for partial summary judgment on the issue of vacation pay?

Appellants claim that since respondent paid Robert Anderson past due vacation pay during the discovery period for this case, the employer thereby acquiesced to the charges against the company. According to appellants, summary judgment on this issue should have been granted, along with attorney fees and costs because the amount was not paid in a timely fashion. Appellants cite Sections 39-3-201(5), 39-3-205(1)(2), 39-3-206, and 39-3-214, MCA, in support of their allegations. They claim that the issue of vacation pay is not preempted by federal labor law, as it is a right protected by these state laws.

As previously discussed, Allis-Chalmers specifically lists vacation pay as one of those items preempted by the operation of federal labor law. Also, vacation pay was grievable under Anderson’s collective bargaining agreement and covered by federal labor law interpretation. For this Court to find that state law applies to this issue would render the binding grievance and arbitration procedure ineffectual and frustrate the uniform federal interpretation outlined in Allis-Chalmers.

Affirmed.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, WEBER, GULBRANDSON and McDONOUGH and MR. CHIEF JUSTICE HASWELL, Retired, sitting for MR. JUSTICE SHEEHY, concur.


author: MR. JUSTICE HARRISON MR. JUSTICE HUNT,

text:
    LAVERNE I. LARSON, Claimant and Appellant, v. WILLIAM S. CRISSMORE, Employer, and State Compensation Insurance Fund, Defendant and Respondent.
    No. 86-310.
    Submitted April 9, 1987.
    Decided Aug. 5, 1987.
    741 P.2d 401.

      Trieweiler Law Firm, Judith L. Wang argued, Whitefish, for claimant and appellant.
    Warden, Christiansen, Johnson & Berg, Stephen C. Berg argued, Kalispell, for defendant and respondent.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

LaVerne I. Larson appeals from a June 3, 1986, denial of benefits requested in addition to those granted to him by the Workers’ Compensation Court between April 15, 1971, and April 3, 1980.

We affirm the lower court’s decision and remand to determine proper rates for the temporary total and permanent disability benefits. We order payment of temporary total disability benefits not to exceed 300 weeks in addition to the permanent disability benefits to which claimant is entitled and as instructed below.

The issues on appeal are:

1. Under the 1971 Workers’ Compensation laws, was claimant entitled to additional temporary total disability benefits up to 300 weeks and should this amount have been granted in addition to the 500 weeks of permanent disability benefits already granted to the claimant? (Emphasis added.)

2. Did the lower court err when it denied claimant’s request for a discretionary award by ruling that claimant was required to show that he had lost both hands, or both arms, or both feet, or both legs, or both eyes?

3. Was claimant paid incorrectly low disability benefit rates and was he entitled to permanent partial or permanent total disability benefits?

In December 1985, the appellant filed a petition for hearing with the Workers’ Compensation Court. The petition generally sought benefits in addition to those paid to the appellant from April 15, 1971, through April 3, 1980. A hearing was held on March 5, 1986, before the Workers’ Compensation Court Judge Timothy W. Rear-don. Following the receipt of post trial briefs and proposed findings and conclusions, the court entered its judgment based on its findings of fact and conclusions of law, dated June 3, 1986. The court’s decision denied additional benefits to the claimant. This appeal followed.

At the time of trial, on March 5, 1986, claimant was a 59 year old married father of 4 children, with one daughter still dependent upon him for support.

Claimant’s work history includes railroad work as a switch tender, switchman, and road brakeman. He has also worked as an oiler, laborer, woods worker, sawmill laborer, welder, service station mechanic and attendant and as a heavy equipment operator.

Prior to his accident on April 15, 1971, claimant owned his own business, Larson Logging, and he was a healthy and active person. His accident occurred when a winch he was operating pulled a tree down which landed on his head. His injuries required multiple surgeries and treatments. Claimant’s injuries were primarily to his head and neck as well as his back.

Claimant was diagnosed as having a herniated disk which was surgically removed in August 1971. On June 28, 1973, cervical fusion was performed and an abnormal disk removed. On January 31, 1974, a fusion was performed from his L-4 vertebrae to his sacrum.

In 1976, claimant fell off a flat-bed truck after loading some equipment onto it. He injured his head and was treated at the Veterans’ Administration Hospital in Spokane, Washington as an in-patient from September 28 though October 15, 1976. His main complaint was that he suffered from headaches. A brain scan was performed which suggested that claimant’s headaches were related to the injury to the temporal mandibular joint on his right side.

During the summers of 1983 and 1984, claimant took a job as brushcat operator because he needed the income. He could take breaks as needed but at the end of the day he would take pain pills and soak in a bathtub to ease the pain. In 1985, he did not take that position because he was physically unable to do so. He has done a few miscellaneous welding and other tasks but basically has not worked since 1984.

Claimant now has a limited ability to move his dorsal spine which affects his general mobility. Lower back motion and motion in his cervical spine is also less than normal. Muscles in his right hand have atrophied and he can not reach, grasp with or flatten out his dominant right hand. He does not have full use of one of his feet and has no hot or cold sensation in his feet. He can sit for about fifteen minutes before getting lower back pains. He is no longer a very coordinated person and cánnot work, fish or hunt.

In his present physical condition, claimant is unemployable. According to the lower court’s findings, given his age, limited education, work history and multiple major surgeries, claimant is totally disabled from competitive employment.

Claimant’s Workers’ Compensation benefits were discontinued on April 3, 1980, after he received 26 weeks of temporary total disability benefits at $60 a week and 500 weeks of permanent partial benefits at $55 per week. Claimant currently receives $510 a month from Social Security as his only source of income.

Claimant believes he incorrectly received only 26 weeks of temporary total disability benefits and is entitled to between 222.56 and 274 additional weeks of temporary benefits as well as the maximum number of permanent partial and permanent total disability benefit weeks. At a minimum, claimant argues he is entitled to 222.56 weeks of temporary total disability benefits pursuant to Section 92-701, R.C.M. (1947). This minimum number of. weeks is based on a statement by Dr. Klassen on February 23, 1975, that claimant would not reach maximum healing for an estimated six months.

With a “liberal construction” mandate claimant argues that a different calculation entitles him to a maximum of 300 weeks of benefits. We agree. This computation is based on Dr. Blaisdell’s opinion and claimant’s testimony concerning healing time following spinal injuries. Dr. Blaisdell stated the maximum healing would occur between six months and two years after the last surgery. Claimant’s last lumbar surgery was January 31, 1974.

Claimant contends that the court below concluded that claimant reached a maximum healing two years after January 31, 1975 or on January 31, 1977. Computing the benefit weeks from 1971 through 1977, he concludes that they add up to 302.12 weeks thus entitling him to 300 weeks of temporary total disability benefits minus the 26 weeks of temporary total disability already paid to him.

Respondent agrees Section 92-701, R.C.M. (1947) limits temporary total disability benefits to 300 weeks from the date of injury. However, Section 92-708 of that code states the total period for which compensation may be paid cannot exceed 500 weeks and that compensation shall run consecutively, not concurrently. Respondent contends the lower court did not err in applying the black letter of the law and, if anything, appellant was actually overpaid and is entitled to no further benefits.

Conflicting testimony exists as to when claimant’s temporary total disability status actually ceased. An examination of the record does not answer that question. We hold that the claimant is entitled to temporary total disability benefits of up to 300 weeks. This should be sufficient to help the Workers’ Compensation Court in determining the proper , amounts due on remand.

The parties agree that claimant was entitled to some temporary disability benefits and some type of permanent disability benefits. The problem here is whether claimant should have been granted benefits in excess of the 526 weeks of benefits he already received. Inclusive in this issue is whether claimant’s temporary total disability was actually only 26 weeks in duration or whether it extended to 300 weeks duration (274 plus the 26 he has received) as claimant contends; whether he is entitled to the full 500 weeks of permanent total disability benefits, and whether he is entitled to any amount of permanent partial benefits.

Section 92-701, R.C.M. (1947) (amended 1969) was the applicable statute governing payment of temporary total disability benefits in 1971. The statute set out a payment schedule based upon the injured worker’s wage and number of dependents. It states:

“Such compensation shall be paid during the period of disability, but for the period not exceeding three hundred (300) weeks from the date of injury . . . provided that after twenty-six (26) weeks of disability such compensation shall be decreased by the sum of $5.00 per week during the period of disability.”

The purpose of the temporary total disability statute was to provide temporary total benefits during the claimant’s healing period.

In 1971, the term temporary total disability was not specifically defined in the Workers’ Compensation Act. It was amended in Chap. 23, Laws 1975. The later enacted definition has been interpreted to involve a two-pronged test. First, a claimant must not have been as far restored as the permanent character of his injuries will permit. Secondly, the claimant must experience a total loss of wages. Wilson v. Sun River Cattle Co. (Mont. 1983), [206 Mont. 63,] 670 P.2d 931, 40 St.Rep. 1509.

Although testimony was presented on claimant’s temporary total disability period, no finding of fact was made as to the actual duration of the healing period. In light of our decision on the rest of this issue, we remand this case for a determination of the extent of claimant’s temporary total disability period and note that, in accordance with the applicable statute, claimant is allowed up to 300 weeks of temporary total disability benefits if he is found eligible.

This Court recognizes the legitimacy of granting a claimant different categories of benefits consecutively as a claimant comes to qualify for them. For instance, in Jones v. Claridge (1965), 145 Mont. 326, 331, 400 P.2d 888, 890, we stated:

“[W]e may now have, under a given set of circumstances, an award for temporary total disability payments during the period wherein the claimant is entirely disabled; . . . and an additional award (indemnity benefits) for loss of prospective future earnings as the result of permanent partial disability under Section 92-709 ...”

Similarly, in McDanold v. BN Transport, Inc. (Mont. 1981), [_ Mont. _,] 634 P.2d 175, 179, 38 St.Rep. 1466, 1471, we stated:

“Construing the section liberally in favor of the injured worker as required under former Section 92-838, R.C.M., 1947, now Section 39-71-104, M.C.A., we hold that the period during which claimant received temporary total disability benefits under former Section 92-701, was separate from and in addition to the period during which he would receive benefits under 92-709, the specific injury ‘indemnity’ statute. Therefore, the claimant here may not have exceeded his statutory benefits, depending upon the extent of his injury and the length of his healing period.”

In this case the Court is further faced with interpreting and reconciling several inconsistent statutes in the 1971 code regarding the total number of weeks for which a claimant may collect benefits. We note Section 92-708, R.C.M. (1947) (amended 1969) provides the total period for which compensation may be paid cannot exceed 500 weeks and that compensation shall run consecutively, not concurrently. Section 92-701, R.C.M. (1947) (amended 1969) provides that temporary total disabilities are limited to 300 weeks of benefits.

Appellant contends that limiting his benefits to a total of 500 weeks is internally inconsistent with the Workers’ Compensation Act and with existing caselaw including the Jones and McDanold cases quoted above. We disagree and find Section 92-708, R.C.M. (1947) (amended 1969) controlling. Other statutes in 1971 provided for more than 500 weeks of benefits. Section 92-702, R.C.M. (1947) (amended 1969), provided for an excess of 500 weeks of permanent total disability benefits in cases of hardship, but such exception occurs only under the Board’s discretion. Section 92-704, R.C.M. (1947) (amended 1969), provided for a maximum of 600 weeks for death benefits.

In construing a statute, the whole act must be read together and where there are several provisions or particulars, a construction is, if possible, to be adopted that will give effect to it all. Yurkovich v. Industrial Accident Board (1957), 132 Mont. 77, 84, 314 P.2d 866, 870.

Recognizing that under special circumstances, the above cited statutes can give a worker more than 500 weeks, we find none here nor did the Board make an exception under its statutory discretionary power. Claimant, as previously noted, is entitled to no more than 500 weeks of compensation under Section 92-708, R.C.M. (1947) (amended 1969), totaling temporary total disability benefits and permanent partial or permanent total benefits.

The lower court found the plain meaning of the statutes clearly acted to deny benefits at a 526 rate week level already received by the claimant between 1971 and 1975. However, the court went on to consider the possible effect of this Court’s ruling in McDanold, supra, upon the case. In view of the fact that the claimant relied upon McDanold before the lower court and continues to rely upon it before this Court, we note that there are serious factual distinctions between McDanold and the case at bar: (1) as the Workers’ Compensation Court noted, McDanold is an extremity case of 180 weeks which is significantly less than the 500 weeks whole-man partial disability entitlement of the claimant in this case; (2) the lower court stated that the permanent partial determination in McDanold was for a maximum benefit period of 180 weeks; (3) in McDanold, although construing basically the same statutes relevant to the instant case, it does not construe the most important statute, Section 92-708 which limits benefits to 500 weeks regardless of the class of disability. We find McDanold is not controlling in the case at bar.

Here, the interpretation is that claimant was entitled to up to 300 weeks of temporary total disability benefits and 200 weeks of permanent partial or permanent total disability benefits. Allowing a combination of the two the claimant is limited to the maximum number of weeks of benefits being 500 weeks.

Claimant’s second issue is whether the lower court erred by denying his request for a discretionary award under Section 92-702, R.C.M. (1947) (amended 1969), when it ruled that he did not show he had lost both hands, or both arms, or both feet, or both legs, or both eyes. He contends the court below used this incorrectly strict standard in its refusal to grant a discretionary award.

Under the Act in eifect at the time of claimant’s injury, additional permanent total disability benefits were provided for in hardship cases as follows:

“Such compensation shall be paid during the period of disability, but for the period not exceeding five hundred (500) weeks from the date of the injury. Provided, that in case of hardship and where the Board, in its discretion, deems it necessary, the Board may order compensation for such further period as it decides proper. Such additional compensation, if ordered, shall be limited to cases of total disability, permanent in character resulting from the loss of or the loss of use of both hands, or both arms, or both feet, or both legs, or both eyes. (Emphasis added.)”

Section 92-702, R.C.M. (1947) (amended 1969).

The lower court properly denied claimant’s request for a discretionary award as follows:

“The conditions for implementing the discretionary award do not exist. Claimant herein has not lost both hands, or both arms, or both feet, or both legs, or both eyes.”

The statute requires a “loss of’ or “loss of use” of both hands, arms, feet, legs or eyes when implementing a discretionary award. The lower court most certainly may refuse a discretionary award as it did here.

The last issue on appeal is whether claimant was paid an incorrectly low rate for his temporary total and permanent disability benefits.

Respondent contends this issue was not raised before the lower court and should not be addressed on appeal. We find the rate question was generally raised before the Workers’ Compensation Court and is properly before this Court on appeal.

Claimant received 26 weeks of temporary total disability benefits at $60 per week and 500 weeks of permanent benefits at $55 per week. Claimant contends he is entitled to temporary total disability benefits of $65 per week for the duration of his temporary total disability of between 222 and 300 weeks. The parties stipulated that the appropriate temporary total disability rate is $65 per week and that appears to be the proper rate under Section 92-701, R.C.M. (1947) (amended 1969). Additionally, claimant contends he was entitled to the maximum rate for permanent total disability benefits of $60 per week pursuant to Section 92-702, R.C.M. (1947) (amended 1969), rather than the $55 per week he received.

Claimant’s proper rate of compensation under Sections 92-701 and -2, R.C.M. (1947) (amended 1969) is based in part on the number of dependents of claimant and is subject to change when the number of dependents changes. We do not have sufficient evidence in the record to determine claimant’s proper rate. Therefore, on remand we direct the Workers’ Compensation Court to examine claimant’s proper rate of compensation pursuant to Sections 92-701 and -2, R.C.M. (1947) (amended 1969).

Remanded for proceedings consistent with this opinion.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES WEBER and GULBRANDSON concur.

MR. JUSTICE HUNT,

dissenting:

I dissent with the majority decision to limit claimant’s total benefits to 500 weeks.

I do agree with the majority decision to remand this case for a more specific determination of claimant’s temporary total disability period but would hold that the claimant is entitled to temporary total disability in addition to the 500 weeks of permanent disability benefits he has already received.

The court is charged here with reconciling several inconsistent statutes in the 1971 Montana Workers’ Compensation Code on temporary and permanent disability benefits and duration of total combined benefits.

Some 1971 statutes in the Act provided for more than 500 weeks of benefits in spite of the limitation in Section 92-708, R.C.M. (1947). For example, Section 92-702, R.C.M. (1947), provided for an excess of 500 weeks of permanent total disability benefits in cases of hardship under the Board’s discretion. Section 92-704, R.C.M. (1947), provided for a maximum of 600 weeks for death benefits. This indicates to me that the 500 week limitation is not an absolute maximum but a general guideline for benefit limits.

The majority’s decision could deprive a permanently totally disabled claimant from receiving any temporary total disability benefits. A permanently totally disabled claimant would be absolutely limited to 500 weeks under Section 92-708, R.C.M. (1947) which is the same as the maximum total disability entitlement minus hardship factors under Section 92-702, R.C.M. (1947). With this reasoning, it would appear that only permanently partially disabled claimants or ones who suffer no permanent disability would be entitled to claim temporary total disability benefits.

I do not believe this was the intent of the Workers’ Compensation Act in effect at that time.

In Yurkovich v. Industrial Accident Board (1957), 132 Mont. 77, 314 P.2d 866, this Court stated:

“In construing a statute, the whole act must be read together and where there are several provisions or particulars, a construction is, if possible, to be adopted that will give effect to it all.”

Id. at 84, 314 P.2d 870.

The majority opinion would not “give effect to the whole act” as required by this Court in Yurkovich. These statutes can be harmonized by considering Section 92-708, R.C.M. (1947) to be a general guideline for benefit limits rather than an absolute maximum. We have further held that:

“When two interpretations are a possibility, one favorable to the claimant and the other against him, the Act must be interpreted in a fashion favorable to the claimant. Geary v. Anaconda Copper Mining Co. (1947), 110 Mont. 485, 489, 188 P.2d 185, 186.

The majority’s interpretation is not consistent with this mandate.

I would hold that appellant is entitled to up to 300 weeks of temporary total disability benefits and the 500 weeks of permanent partial or permanent total disability benefits he has already received. Such a holding would resolve the inconsistencies in the 1971 statutes and also be in keeping with the McDanold, Yurkovich and Geary cases.

Appellant, for his second issue, contends the trial court used an incorrectly strict standard to determine that a discretionary award under Section 92-702, R.C.M. (1947) would not be granted.

It is apparent from the trial court’s finding that it did not consider the full standard. Section 92-702, R.C.M. (1947) requires a “loss of or “loss of use” of both hands, arms, feet, legs or eyes when implementing a discretionary award.

While the trial court may refuse a discretionary award, I would hold the lower court erred by not considering the “loss of use” standard in determining the existence of hardship. This issue should be remanded to the trial court for a determination of eligibility of hardship benefits utilizing the statutory standard of “loss of’ or “loss of use” of both hands, or both arms or both feet or both legs, or both eyes pursuant to Section 92-702, R.C.M. (1947).

I would reverse and remand the case.

MR. JUSTICE SHEEHY concurs in the dissent MR. JUSTICE HUNT.


text:
    STATE OF MONTANA, Plaintiff and Respondent, v. BRADLEY KEITH CLAUSEN, Defendant and Appellant.
    No. 86-393.
    Submitted on Briefs May 14, 1987.
    Decided Aug. 5, 1987.
    740 P.2d 679.
    E. June Lord, Great Falls, for defendant and appellant.
    Mike Greely, Atty. Gen., Helena, Joe R. Roberts, Asst. Atty. Gen., Helena, Patrick L. Paul, Co. Atty., Great Falls, for plaintiff and respondent.
   MR. JUSTICE GULBRANDSON

delivered the Opinion of the Court.

Bradley Keith Clausen appeals his conviction in Cascade County District Court for possession of dangerous drugs with intent to sell, a felony, and possession of dangerous drugs, a felony. He was also designated a persistent felony offender.

The issues on appeal are:

(1) Whether the District Court erred in allowing into evidence Clausen’s prior conviction for selling two grams of cocaine.

(2) Whether Clausen had standing to challenge the search of the storage shed in which the illegal drugs were discovered.

We affirm.

Clausen and his wife separated in late May or early June 1985. The wife thereafter filed a petition for dissolution of marriage and obtained a court order in June 1985 directing the sheriff to take and return to the wife certain items of marital property that Mr. Clausen was concealing from his wife. The order included a provision for taking property from any third party acting as Clausen’s agent. The sheriff was informed that some of the marital property had been moved to a storage shed listed under the name of Clausen’s friend, Michael Brown. Brown freely admitted renting the space after receiving rental funds from Clausen. Brown also admitted taking the storage keys to Clausen after executing the rental agreement. Brown denies having helped Clausen move property to the shed or visiting the shed subsequent to making the rental agreement. The owner of the storage shed opened the shed for the sheriff and Clausen’s wife. Shortly after beginning the removal of marital property as listed in the court order the wife discovered a garbage bag filled with marijuana. Further investigation revealed a total of 37.6 pounds of marijuana, five grams of psilocybin, magic mushrooms, two scales used to weigh the drugs and ZigZag cigarette papers. The storage manager testified that after the sheriff and the wife left the premises, two unidentified men requested keys to the shed but their request was denied. The manager reported that he did not recognize the two men but that they seemed a little upset. Defendant testified at trial that he sold some of the property in the shed and gave or sold the storage keys to a Mexican native on June 2, 1985, shortly before the drug seizure took place. Despite the issuance of a subpoena, this person was never located. Before trial, Clausen dismissed his counsel and was appointed new counsel.

The jury convicted Clausen of criminal possession of dangerous drugs with intent to sell, a felony, and criminal possession of dangerous drugs, a felony. The District Court noted in its findings that Clausen’s employment record indicated that his income over the last several years was not from legitimate employment and that incarceration was necessary to get Clausen out of drug trafficking. We note that Clausen was convicted in federal court in 1982 for the criminal sale of dangerous drugs, namely cocaine. The court sentenced Clausen to two five-year sentences for the offenses of which he was convicted and a third five-year sentence for being a persistent felony offender. The court ordered the sentences to run consecutively.

The first issue is whether the District Court erred in allowing into evidence Clausen’s prior conviction for selling two grams of cocaine. Rule 404(b), M.R.Evid., states:

“(b) Other crimes, wrongs, acts. Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show that he acted in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident.”

In determining whether evidence of “other crimes or acts” should be admitted, inquiry should be made into four areas as enunciated in State v. Just (1979), 184 Mont. 262, 269, 602 P.2d 957, 961:

“1. similarity of crimes or acts;
“2. nearness in time;
“3. tendency to establish a common scheme, plan or system; and
“4. the probative value of the evidence is not substantially outweighed by the prejudice to the defendant.”

In State v. T.W. (Mont. 1986), [220 Mont. 280,] 715 P.2d 428, 430, 43 St.Rep. 368, 371, we said that “[f]ailure of questioned evidence to meet only one element of the Just test is not sufficient to refuse its admission . . . “ and that “the four factors must be considered together.” We note that the State filed notice in this case that it would introduce Clausen’s prior conviction in federal court as evidence.

Applying the Just case to the facts before us, we see that both cases involve the criminal offense of selling dangerous drugs. In the federal case, Clausen was convicted of selling two grams of cocaine, while here Clausen was convicted of possessing 37.6 pounds of marijuana with intent to sell and possessing five grams of psilocybin. The fact that the type of drugs and the quantities involved are different is irrelevant. What is important is the substantial similarity of Clausen’s actions which goes to the issue of his intent under Rule 404(b), M.R.Evid.

As to the nearness in time factor, we note that Clausen was released on parole from federal prison in June 1984 and allegedly committed the offenses herein on June 9, 1985. Since the crimes were committed just over a year from when Clausen was released from prison, we believe that sufficient nearness in time has been proven.

The third factor in Just is the tendency to establish a common scheme, plan, or system. A similarity does exist between the federal conviction and the case here which goes to the issue of intent under Rule 404(b): the sale of illegal drugs. We therefore believe that the third factor of Just has been met.

The final factor in Just is whether the probative value of the evidence outweighs its prejudicial effect to the defendant. Being that the federal offense and the one here are quite similar, i.e., the sale of illegal or dangerous drugs, we believe the probative value of the evidence is sufficient in strength to overcome the prejudicial effect to the defendant. Our reasoning is that the lower court followed the procedure for protecting the defendant’s interests when evidence of “other crimes or acts” is to be introduced. The requirements are, as discussed in Just, 602 P.2d at 963-964, (1) notice should be given before trial of the State’s intention to introduce evidence of other crimes; (2) at the time of introduction, the trial judge should give a special instruction to the jury advising them that the evidence is being submitted for the limited purposes allowed in Rule 404(b); and (3) the same instruction should be included in the full instructions given to the jury at the close of the case.

Our review of the record reveals that the prosecutor and District Judge followed the above requirements. We conclude that since Clausen denied knowledge of the illegal drugs at the storage shed, the prior conviction in federal court was admissible in respect to the issue of intent under Rule 404(b), M.R.Evid.

The second issue is whether Clausen had standing to challenge the search of the storage shed in which the illegal drugs were discovered. Clausen argues that he had a legitimate expectation of privacy in the shed while at the same time he disclaims any interest in the shed’s contents by virtue of the fact that he allegedly sold the keys and the shed’s contents to a Mexican native. We fail to see an issue of standing before us. The facts are that Clausen and his wife were involved in a marital property dispute at the time of Clausen’s arrest. Clausen admitted taking marital assets without his wife’s, consent or a court order and selling some or most of those assets. The wife obtained a court order directing the sheriff to find and return the marital assets as listed in the order. In addition, there was clear evidence that Clausen was renting storage space under his friend’s cover. The sheriff obtained valid entry to the shed and in the course of retrieving the marital property, the illegal drugs were discovered. The court correctly characterized the process:

“THE COURT: This search was conducted in compliance with lawful Court Order. It wasn’t a search for any contraband or any illegally possessed property. It was in compliance with the Order of — a lawful Order of the Court to secure marital property.”

We conclude that the search was proper.

Affirmed.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES SHEEHY, HUNT and McDONOUGH concur.


text:
    LEE McDONALD, Plaintiff and Respondent, v. WALLACE C. GRASSLE, Eloise B. Grassle and Fern Hart, Defendants and Respondents, and Darrell Tvaruzek, Intervenor and Appellant.
    No. 86-491.
    Submitted on Briefs May 28, 1987.
    Decided Aug. 5, 1987.
    Rehearing Denied Sept. 3, 1987.
    740 P.2d 1122.

      Snavely & Phillips, Robert J. Phillips, Missoula, for Darrell Tvaruzek.
    Geiszler, Taylor, Newcomer & McClain, Timothy D. Geiszler, Missoula, for Wallace C. & Eloise B. Grassle.
    Ellingson & Moe, Nancy K. Moe, Missoula, for Lee McDonald.
    Michael Sehestedt, Deputy Co. Atty., Missoula, for Fern Hart.
   MR. JUSTICE GULBRANDSON

delivered the Opinion of the Court.

The intervenor, Darrell Tvaruzek appeals a Missoula County District Court order rejecting his claim to recover the purchase price of a tract of land sold to him by McDonald. McDonald obtained the property through a tax sale, but the court found that the original owners, the Grassles, timely redeemed the title to the property. The District Court ordered McDonald to pay attorney fees incurred by Tvaruzek in defending his unsuccessful claim of title against the Grassles.

Tvaruzek appeals the following issue:

Whether the District Court erred in refusing to award Tvaruzek the purchase price paid to McDonald because Tvaruzek had been reimbursed pursuant to a title insurance policy?

McDonald cross-appeals the following two issues:

1) Whether Montana statutes on tax sales and tax deeds have the plain meaning of the statutory language;

2) Whether the attorney fee award to intervenor Tvaruzek was proper despite evidence that Tvaruzek’s attorney was also retained by the title insurance company.

We affirm.

In 1976, the Grassles purchased real property in Missoula County near Seeley Lake, Montana for $7,000. The property is adjacent to property owned by intervenor Tvaruzek. As a result of new job opportunities, the Grassles moved to Oregon in 1979 and to Minnesota in 1980. In July 1980, the property was sold to Missoula County because of an unpaid 1979 tax assessment. In January 1983, the county executed an assignment of certificate of tax sale to McDonald. McDonald filed a complaint seeking the issuance of a deed of conveyance and personal service was made on the county treasurer, Fern Hart. Personal service on the Grassles at their address in the county was unsuccessful. In addition, copies of the summons and complaint sent to the Grassles’ last known address were returned as undeliverable. Service upon the Grassles was subsequently accomplished through legal publication. On August 24, 1983, the court entered a default judgment against the Grassles, and ordered the issuance of a deed of conveyance to McDonald. McDonald paid a total of $592.14 in costs to acquire property for which the Grassles had paid $7,000 in 1976. The Grassles visited Missoula and learned for the first time on August 26, 1983, that title to their property had been conveyed to McDonald as a result of an unpaid 1979 tax assessment. The Grassles allege that they sent a personal check to their son in Missoula in June 1981 with instructions to pay all taxes on the property. The son paid the 1980 taxes but not the 1979 taxes for reasons unknown. On September 8, 1983, McDonald conveyed title by warranty deed to Tvaruzek for $6,500. On October 25, 1983, the Grassles moved to set aside the default order under Rule 60(b), M.R.Civ.P. Tvaruzek alleges that at the time title was conveyed to him he was unaware of the Grassles’ prior ownership interest. The court set aside the default order on November 16, 1983. Tvaruzek tendered the defense of title to the property to McDonald in December 1983, but McDonald refused to defend on that basis. Tvaruzek subsequently retained counsel and incurred attorney fees of $2,332.71 in defending his claim of title to the property. The court then ordered the dismissal of Fern Hart, the Missoula County treasurer, from the action. Tvaruzek filed his complaint in intervention in February 1984 and alleged he had no notice of the Grassles’ right of redemption claim until November 16, 1983, when the court decided to set aside the judgment of default against the Grassles. Both Tvaruzfek and the defendants moved for summary judgment and in November 1984, the court ruled for defendants Hart and the Grassles, holding that the Grassles’ title to the property was superior to the claims of all other parties.

In June 1985, Tvaruzek received $6,500 from Fidelity National Title Insurance Company pursuant to a title insurance policy paid by the seller, McDonald. In 1986, trial was held on Tvaruzek’s breach of warranty claim against McDonald. Tvaruzek argued he was entitled to damages resulting from McDonald’s failure to convey a clear chain of title to him and a failure to defend Tvaruzek’s possession of the property. After trial, the court granted McDonald’s motion to amend his complaint to include the affirmative defense of payment by the insurance company to Tvaruzek. Tvaruzek admitted in his trial testimony to having received $6,500 from the title insurance company. The court also allowed Tvaruzek time to prepare an affidavit of attorney fees he incurred in defending title to the property. The court’s rationale for granting McDonald’s post-trial motion to amend was as follows: “In the interest of justice, the Court will allow the amendment since there is no genuine surprise to Tvaruzek nor will Tvaruzek be prejudiced by the amendment.” In essence, the court ruled that Tvaruzek’s title claim was subrogated to the insurance company and therefore Tvaruzek no longer had a cause of action against McDonald for the sum of $6,500. However, the court said that Tvaruzek “may still seek recovery of any other detriment caused by the breach of warranty.” (Emphasis added.) The court concluded that McDonald breached his duty to defend and as a result Tvaruzek was entitled to attorney fees and costs ($3,416.71) incurred in defending his title against the Grassles up to the time title was restored to the Grassles in December 1984.

The issue raised by Tvaruzek is whether the District Court erred in refusing to award Tvaruzek the purchase price paid to McDonald because Tvaruzek had been reimbursed pursuant to a title insurance policy. The question involves subrogation, discussed in detail in Skauge v. Mountain States Tel. & Tel. Co. (1977), 172 Mont. 521. 524-25. 565 P.2d 628. 630:

“Subrogation is a device of equity which is designed to compel the ultimate payment of a debt by the one who in justice, equity and good conscience should pay it. Bower v. Tebbs, 132 Mont. 146, 314 P.2d 731. A property insurer who has indemnified the insured is usually subrogated to any rights the insured may have against the third party who is responsible for the loss. The theory behind this principle is that absent repayment of the insurer the insured would be unjustly enriched by virtue of recovery from both the insurer and the wrongdoer, or in absence of such double recovery by the insured, the third party would go free despite his legal obligation in connection with loss. (Emphasis added.)”

Subrogation in a legal sense arises upon the fact of payment by the insurer, rather than by contract between the parties. Skauge, 565 P.2d at 630. It is the substitution of another person in place of the creditor, so that the person substituted will succeed to the rights of the creditor in relation to the debt or claim. Skauge, 565 P.2d at 630.

We concur with the lower court’s ruling on this matter despite our reservations on granting a post-trial motion to amend. Equity deems it necessary that the insurance company be subrogated to Tvaruzek’s interests against McDonald, as the court held:

“5. Upon receipt of $6,500 from the Fidelity National Title Insurance Company, the claim of Tvaruzek was subrogated to Fidelity National Title Insurance Company, and Tvaruzek no longer had a right of action against McDonald for the sum of $6,500. If Fidelity National Title Insurance Company desires to recover $6,500 from McDonald, they must bring an action in their own name. Tvaruzek may still seek recovery of any other detriment caused by the breach of warranty. State ex rel. Nawd’s TV and Appliance, Inc. v. District Court, 168 Mont. 456 [543 P.2d 1336] (1975).”

We conclude that since Tvaruzek has already been compensated, it would not be just to permit him to pursue McDonald for the purchase price of $6,500. Legal subrogation arose by the fact of the insurance company’s $6,500 payment to Tvaruzek in 1985. At that point the insurance company succeeded to Tvaruzek’s rights on the title claim as against McDonald. We note that the court did not foreclose Tvaruzek from seeking other means of recovery on the breach of warranty claim. We believe that the ends of justice have been well-served by the disposition of the issue raised by Tvaruzek.

McDonald raises two issues on cross-appeal. The first is whether Montana statutes on tax sales and tax deeds have the plain meaning of the statutory language. We point out that a tax deed is not derivative but creates a new title in the nature of an independent grant from the sovereignty, extinguishing all former titles and liens not expressly exempted from its operation. Rist v. Toole County (1945), 117 Mont. 426, 442, 159 P.2d 340, 347. Since this case involves the setting aside of a default judgment in a tax deed setting, we refer to Rule 60(b), M.R.Civ.P., which reads in part:

“When from any cause the summons in an action has not been personally served on the defendant, the court may allow, on such terms as may be just, such defendant or his legal representative, at any time within 180 days after the rendition of any judgment in such action, to answer to the merits of the original action. (Emphasis added.)”

The statutory expression “any cause” indicates the legislature did not intend to preclude a party in a tax deed action from using the rule if the court’s discretion would so allow.

At this point, we wish to summarize two important aspects of this case. First, the Grassles received no personal service of this action. Service was accomplished through legal publication. The Grassles did not learn of the suit until they personally checked the records in Missoula in August 1983. Since the Grassles were not personally served they were entitled to use Rule 60(b) to set aside the order of default.

Second, the facts show that the Grassles moved promptly to set aside the August 24, 1983 default judgment, having filed a motion on October 25, 1983 to set aside the judgment. The Grassles’ response was taken within 180 days of the judgment as required by Rule 60(b) and we conclude that the Grassles’ action was timely.

McDonald’s second issue on cross-appeal is whether the attorney fee award to intervenor Tvaruzek was proper despite evidence that Tvaruzek’s attorney was also retained by the title insurance company. The facts reveal that Tvaruzek contacted his attorney for legal representation. Subsequently, the title insurance company agreed to undertake the title defense of the case and began paying attorney fees to Tvaruzek’s counsel. The fees related to Tvaruzek’s efforts to defend title subsequent to McDonald’s refusal to do so, and the court found that the fees were recoverable against McDonaid. We conclude that the attorney fee award to Tvaruzek was proper.

Affirmed.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES WEBER, SHEEHY and McDONOUGH concur.


author: MR. JUSTICE McDONOUGH

text:
    INTERMOUNTAIN INSURANCE CO., Petitioner/Insurer, v. CHURCH MUTUAL INSURANCE COMPANY, Insurer/ Respondent, and Mary Jean Marron, Claimant/Respondent.
    No. 86-556.
    Submitted on Briefs June 18, 1987.
    Decided Aug. 5, 1987.
    740 P.2d 682.

      Mulroney, Delaney & Scott, P. Mars Scott, Missoula, for petitioner/insurer.
    Keller, Reynolds, Drake, Sternhagen & Johnson, William Sternhagen, Helena, Milodragovich, Dale & Dye, Michael J. Milodragovich, Missoula, for respondent.
   MR. JUSTICE McDONOUGH

delivered the Opinion of the Court.

Intermountain Insurance Company appeals the November 13, 1986, judgment of the Workers’ Compensation Court which found Intermountain to be the insurer on risk for claimant Mary Jean Marron’s injury sustained on September 1, 1981. We affirm.

Claimant Mary Jean Marrón, hereinafter “claimant”, injured her back on December 24, 1980, attempting to prevent a patient from falling at the Missoula Community Hospital Rehabilitation Facility. The insurer on risk at the time of claimant’s December 24, 1980, injury was Church Mutual Insurance Company. Claimant received treatment for her injury by Dr. Robert Seim on January 16, 1981. Dr. Seim determined that claimant had strained her back, prescribed anti-inflammatory drugs for her condition and recommended decreased activity.

Church Mutual paid the medical bill submitted by Dr. Seim for the January 16,1981, visit. Claimant did not file a claim for workers’ compensation benefits regarding the December 24, 1980, injury and no benefits were paid. Claimant did not miss any work due to her injury.

On September 1, 1981, claimant again injured her back attempting to prevent a patient from falling. Claimant was treated for this injury by Dr. Susan Bertrand. Dr. Bertrand prescribed pain pills and muscle relaxants and recommended that claimant not return to work for three weeks. Intermountain Insurance Company (Inter-mountain) was the insurer on risk at the time of claimant’s second injury. Initially, claimant did not file a claim for workers’ compensation benefits, but following a Workers’ Compensation Division order waiving claim period time, claimant filed a claim in October, 1984, relative to her second injury.

On July 9, 1982, claimant injured her back attempting to move a patient. A third insurer, n»t a party to this action, was on risk at the time of claimant’s third injury. Claims relating to claimant’s third injury have been settled and are not at issue.

Intermountain has been paying claimant temporary total benefits since July 12, 1982. Intermountain petitioned the Workers’ Compensation Court to transfer liability for claimant’s benefits to Church Mutual, Intermountain contended that claimant had not reached a medically stable condition from her December 24, 1980, injury at the time of her September 1, 1981, injury.

The Workers’ Compensation Court entered its findings of fact, conclusions of law, and judgment on November 13, 1986. The court found that Intermountain failed to meet its burden of proof necessary to shift liability to Church Mutual. Intermountain appeals from the decision of the Workers’ Compensation Court and raises the following issue: Whether the Workers’ Compensation Court erred in finding that claimant had reached maximum healing from her first injury and that Intermountain failed to meet its burden of proof to shift liability for claimant’s second injury?

A similar case was before this Court in Belton v. Hartford Accident and Indemnity Co. (1983), 202 Mont. 384, 658 P.2d 405. In Belton we addressed the appropriate standard to determine whether the insurer on risk during the first accident or the insurer on risk during the second accident should pay the benefits where a dispute exists as to the claimant’s extent of recovery from the first accident. The standard adopted was whether the claimant had reached a point of “maximum healing” or a “medically stable condition” at the time of the second accident. We further held that the burden of proof lies with the insurer on risk at the time of the accident to shift liability. Thus, in the present case Intermountain bears the burden of proof to show by a preponderance of the evidence that claimant had not reached maximum healing at the time of her second accident. See also Perry v. Tomahawk Transportation (Mont. 1987), [_ Mont. _,] 735 P.2d 308, 44 St.Rep. 686.

Intermountain contends the evidence is clear and convincing that claimant had not reached maximum healing at the time of her second accident. Intermountain cites Dr. Seim’s deposition testimony wherein he states his belief that claimant never reached a medically stable condition following her first injury. However, as noted by the court below, Dr. Seim’s testimony was very inconclusive. Dr. Seim went on to say that his opinion of claimant’s recovery from her first injury would vary depending on the definition of “medically stable.” Dr. Seim stated that claimant’s motor function was stable yet she still experienced pain. Dr. Seim discussed back injuries as being insidious with recovery appearing to be complete one day but not the next. The court below found Dr. Seim’s testimony to be contradictory but leaning towards a finding that claimant had not reached maximum healing on the date of her second injury.

An orthopedic surgeon, Dr. Friedrick, examined claimant on April 24, 1986. Additionally, Dr. Friedrick interviewed claimant, reviewed claimant’s medical history, Dr. Seim’s testimony, and claimant’s answers to interrogatories. Based upon the foregoing, Dr. Friedrick stated his opinion that claimant had reached maximum recovery by the date of her second injury.

Claimant’s deposition testimony and answers to interrogatories reflect claimant’s belief that she had reached maximum recovery the date of her second injury.

We agree with the Workers’ Compensation Court that the medical evidence is inconclusive on the question of maximum recovery. Claimant states that she was fully recovered at the time of her second injury and Dr. Friedrick reached a similar conclusion. Although Dr. Seim appears to have concluded claimant did not reach maximum healing, Dr. Seim did not examine claimant between January, 1981 and July, 1982.

The Workers’ Compensation Court found that Intermountain did not meet its burden of proof necessary to shift liability Church Mutual to regarding claimant’s second injury. Where there is substantial evidence to support the findings of the Workers’ Compensation Court, this Court cannot overturn the decision. Dumont v. Wickens Bros. Construction Co. (1979), 183 Mont. 190, 598 P.2d 1099. In this instance, we find that the record supports the conclusions of the court below. The Workers’ Compensation Court is affirmed.

MR. JUSTICES HARRISON, SHEEHY, GULBRANDSON and HUNT concur.