author: MR. JUSTICE MORRISON

text:
    WESTERN MEDIA, INC., a Montana corporation, Plaintiff and Appellant, v. WILLIAM A. MERRICK, Defendant and Respondent.
    No. 86-263.
    Submitted on Briefs Aug. 28, 1986.
    Decided Nov. 7, 1986.
    727 P.2d 547.

      Larry W. Moran, Bozeman, for plaintiff and appellant.
    Morrow, Sedivy & Bennett, Edmund P. Sedivy, Jr., Bozeman, for defendant and respondent.
   MR. JUSTICE MORRISON

delivered the Opinion of the Court.

Plaintiff Western Media, Inc., appeals the April 7, 1986, summary judgment awarded in favor of defendant William Merrick. We reverse and remand.

In 1975, William Merrick, was president and chief operating officer of KBMN, Inc., which operated radio station KBMN in Bozeman, Montana. At that time, Merrick entered negotiations to sell the radio station. The buyers formed the corporation Western Media, Inc., plaintiff herein, to effect the purchase. The parties understood that upon closing the sale, KBMN, Inc., would be dissolved and Merrick personally bound under the contract.

A sales contract was entered into on May 14, 1975, and the parties closed the transaction in August of 1975. Merrick signed the contract as president of KBMN, Inc., and in his individual capacity. The contract conveyed all assets, tangible and intangible, used in the operation of the station, with certain exceptions not relevant to this action.

The purchase price was $500,000 payable to Merrick. Included in this amount was $50,000 to be received by Merrick in return for his consultation services for five years, and $50,000 for his covenant not to compete for ten years. This covenant read as follows:

“For the further consideration of the sum of Fifty Thousand Dollars ($50,000.00), payable as hereinafter set forth, William A. Merrick, President of KBMN, Inc., agrees that from the closing date and thereafter for a period of ten (10) years, he will not directly or indirectly, alone or with others, individually or by a corporation or other entity, or through any representatives, engage in the operation of or as an employee of any AM or FM radio station or television station within a radius of fifty miles from the city of Bozeman, Montana. The said sum of Fifty Thousand Dollars shall be payable to William A. Merrick in One Hundred Twenty (120) successive monthly installments of Four Hundred Sixteen and 67/100 ($416.67) Dollars, commencing on the first day of each and every month following the closing date and the first day of each and every month thereafter during said period. No interest shall accrue on the unpaid balance if the installments are paid when due.”

On September 1, 1984, Merrick took a position as coordinator for KUSM, a public television station located on the Montana State University campus in Bozeman. Upon learning of Merrick’s involvement with KUSM, Western Media filed suit alleging Merrick had breached the covenant against competition contained in the sales contract. Merrick raised three affirmative defenses: 1) the covenant against competition was void as an unlawful restraint of trade; 2) KUSM was a non-commercial enterprise not in competition with KBMN; 3) Western Media’s failure to make required payments pursuant to the covenant excused any possible breach by Merrick.

Following summary judgment motions by both parties, the District Court ruled in favor of Merrick. The court found the covenant against competition to be void and unenforceable as an unlawful restraint of trade. Western Media appeals and raises the following issue: Whether the District Court erred in granting summary judgment to Merrick?

At the time the parties executed the sale contract Sections 13-807 and 808, R.C.M., 1947, were in effect and provided:

“Any contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind, otherwise than is provided for by the next two sections, is to that extent void.
“One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business within a specified county, city, or part thereof, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein.”

Western Media contends Merrick’s sale of the radio station included goodwill though not specifically mentioned. We agree. The contract transferred “all fixed and other assets, tangible and intangible” to Western Media. Goodwill is considered to be an intangible asset of a business. 38 Am.Jr. 2d Goodwill Section 3, pp. 913-14.

In Baldwin v. Stuber (1979) 182 Mont. 501, 597 P.2d 1135, we held that goodwill can pass by implication on the transfer of a business even though not mentioned in a written contract of sale. Where the seller of a business agrees in connection with the sale not to engage in the same business in the same place, the obvious intent of the seller is to transfer the goodwill of the business. 38 Am. Jr. 2d, Goodwill Section 10, p. 918.

Merrick cites Wylie v. Wylie Permanent Camping Co. (1920), 57 Mont. 115, 187 P. 279, for the proposition that a mere stockholder cannot sell the goodwill of a corporation. We do not find Wylie to be persuasive authority. In the present case, KBMN, Inc. was dissolved pursuant to the sale and Merrick personally bound under the contract. Merrick was president and chief operation officer of KBMN, Inc., not a mere stockholder.

Next we address whether the covenant against competition is void as an unlawful restraint of trade. We find that it is not. The covenant restricted Merrick from any involvement with a radio or television station within 50 miles of Bozeman for a period of ten years. The covenant is unenforceable to the extent it exceeded the guidelines of Section 13-803, R.C.M. 1947, which permit covenants against competition “within a specified county, city, or part thereof.” Treasure Chemical v. Team Laboratory Chemical (1980), 187 Mont. 200, 205, 609 P.2d 285, 288. This however does not void the covenant and for the purposes of this case the covenant was valid.

Merrick violated the covenant by taking a position as coordinator for KUSM television station which is within the city limits of Bozeman. The covenant prohibited Merrick from being an employee of or engaging in the operation of any AM or FM radio station or television station within 50 miles of Bozeman and made no distinction between commercial and non-commercial stations.

Merrick contends Western Media’s failure to make monthly payments pursuant to the covenant upon discovery of Merrick’s position at KUSM excused any possible breach on his part. We do not agree. Merrick took the position with KUSM September 1, 1984. Western Media stopped monthly payments to Merrick in January, 1985. The language of the covenant is clear that Western Media’s duty to make monthly payments pursuant to the covenant was dependent upon Merrick’s performance.

The parties dispute determination of damages. Western Media contends it is entitled to return of all monies paid under the covenant, approximately $46,666. In Havre Daily News, Inc. v. Floren (1973), 163 Mont. 131, 135, 515 P.2d 673, 675, we stated the following rule:

“The damages accruing to the purchaser if the seller improperly interferes with the good will transferred, or commits a breach of a restrictive covenant, are the loss which the purchaser sustains by reason of the wrongful conduct of the seller.”

Western Media did not sustain any damages prior to the breach by Merrick, but is entitled to return of payments made subsequent to such breach plus any other losses incurred due to Merrick’s employment at KUSM.

Summary judgment is reversed and entered in favor of Western Media. We remand to the District Court for a determination of damages.

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


source: Caselaw Access Project

author: MR. JUSTICE WEBER MR. JUSTICE MORRISON,

license: Public Domain

text:
    NORTHWESTERN NATIONAL BANK OF GREAT FALLS, A NATIONAL BANKING ASSOCIATION, PLAINTIFF AND APPELLANT, v. WEAVER-MAXWELL, INC., a corporation, et al., Defendants and Respondents.
    No. 85-419.
    Submitted Aug. 12, 1986.
    Decided Nov. 13, 1986.
    Rehearing Denied Jan. 13, 1987.
    729 P.2d 1258.

      Church, Harris, Johnson & Williams, Milton Wordal argued, Great Falls, for plaintiff and appellant.
    Graybill, Ostrem, Warner & Crotty; Turner C. Graybill argued, Great Falls, for defendants and respondents.
   MR. JUSTICE WEBER

delivered the Opinion of the Court.

Norwest Bank of Great Falls, N.A. (the Bank) appeals a $2,659,671 judgment entered against it in Cascade County District Court after a jury trial. The Bank brought the action as a foreclosure suit and to obtain a deficiency judgment. Defendants prevailed on their counterclaims for breach of contract, tortious interference with their franchise agreement, fraud, negligent misrepresentation, and bad faith in liquidation of the Weavers’ collateral. The Court also granted defendants equitable relief. We reverse and remand for a new trial.

The dispositive issue is whether the District Court erred in giving the jury a special verdict form which presented the issue of breach of contract in terms that adopted the defendants’ view of substantial disputed facts. For the guidance of the court and counsel on remand, we will consider briefly the other issues raised on appeal. They are:

2. Did the District Court err in the manner in which it submitted the issue of tortious interference with contract to the jury?

3. Did the District Court err in entering judgment upon the special verdict:

a. by entering judgment on the jury’s findings of damages both for breach of contract and for tort; and

b. because the special verdict’s award of punitive damages conflicted with the jury’s finding that the Bank had acted in good faith?

4. Did the District Court err in its resolution of the issues reserved for its decision by:

a. denying the Bank’s claim for a deficiency judgment;

b. ordering the Bank to surrender to defendants the proceeds of liquidation of collateral;

c. awarding prejudgment interest at a rate of 18%; and

d. basing an award of attorney fees to defendants on their recovery on both their contract and torts claims?

Weaver-Maxwell, Inc. was an International Harvester (IH) truck and farm equipment dealership. Its stockholders are the other defendants in this action. Beginning in 1977, it entered a series of transactions with the Bank. As of April 1980 Weaver-Maxwell owed the Bank slightly over $700,000 in principal and accrued interest on two SBA guaranteed loans and on its floor plan and accounts receivable lines of credit. The banker in charge of the Weaver-Maxwell account was Paul Hoffman.

As is typical of floor plan financing, Weaver-Maxwell’s floor plan arrangements with both IH and the Bank provided that the lenders had a security interest in all items of inventory financed and in the specific proceeds of sale of each item. Weaver-Maxwell had agreed to hold the proceeds of each sale, as well as the inventory, in trust for the respective lender, and it was required to remit a portion of these proceeds to the lender promptly upon receiving them without demand or notice. When Weaver-Maxwell failed to account for such proceeds, the sale was “out-of-trust.”

In March 1980, for the second time within a year, Weaver-Maxwell was in default of its payments on the two SBA loans. Mr. Weaver approached Mr. Hoffman at the Bank seeking another loan for Weaver-Maxwell. Mr. Hoffman refused to make a loan to Weaver-Maxwell. However, the Bank did agree to make a personal loan to Mr. and Mrs. Weaver in the amount of $84,291.69. The loan was secured by personal assets of the Weavers.

The terms of the loan were in dispute at trial. Mr. Hoffman testified that the amount was precisely calculated and all of its proceeds were earmarked for specific purposes. He testified that the $84,291.69 was to be applied as follows: $22,000 was to cover two IH trucks sold out-of-trust; $23,060 was to bring current delinquent payments to the Bank on an SBA-guaranteed loan; $17,492 was to bring the other SBA guaranteed Bank loan current; $21,669.04 was for the balance due the Bank on a 1979 individual loan to Mr. Weaver; and $70.65 was for interest. Mr. Weaver, on the other hand, testified that the loan was earmarked only to the extent necessary to cover the $22,000 in out-of-trust IH sales, and that the rest was to be used for Weaver-Maxwell’s general business needs. The loan was documented March 24, 1980, in a promissory note from the Weavers to the Bank. There was nothing in writing signed by the Weavers which mentioned any specific purpose or purposes for the loan. The cash was not immediately advanced to the Weavers, pending filing of documents showing the Bank’s security interest in Weaver assets.

On April 3, 1980, the Bank advanced $26,848.45 on the March 24 note, to cover the $22,000 IH out-of-trust previously disclosed and another $4,848.45 out-of-trust which had not been disclosed to the Bank previously and was not included in Mr. Hoffman’s calculation. The next day, (a Friday) Mr. Weaver requested another $47,000 to cover yet another out-of-trust amount owed to IH on a sale made several months earlier. The Bank had not been informed of this out-of-trust sale before this time. Mr. Weaver was to return to the Bank on Monday, according to his testimony, to receive the $47,000 out of the sums available from the March 24 note. He testified that when he went to the Bank to pick up the $47,000 on Monday morning, Mr. Hoffman told him, “We’re not going to advance you the money,” and that Mr. Hoffman would not say more than that. Mr. Hoffman’s testimony was substantially different. He testified that the $47,000 was a new loan request, and that he told Mr. Weaver a decision whether to grant it would be made by Monday. Mr. Hoffman testified that on Monday morning he concluded after talking with his supervisor that the $47,000 loan request should be declined because “I had lost my confidence in our borrower.”

IH immediately notified Mr. Weaver that it was terminating Weaver-Maxwell’s dealership because of the out-of-trust situation. To prevent IH from quickly repossessing Weaver-Maxwell’s assets, Mr. Weaver signed a document entitled “Peaceful Possession of Collateral Property.” The document allowed the Bank to take possession of the assets. The Bank viewed this as a means of protecting its security interests. That evening, the Bank changed the locks on the Weaver-Maxwell buildings. It thereafter excluded Mr. Weaver from the property except during business hours, when he was accompanied by bank representatives. After April 9, the Bank also seized and opened all mail addressed to Weaver-Maxwell. Defendants presented testimony that the Bank destroyed truckloads of Weaver-Maxwell records by hauling them to the Great Falls dump. Approximately two months later, the Bank held an auction of Weaver-Maxwell assets. The defendants argued that the auction was not well-run. The proceeds of the auction were applied to Weaver-Maxwell’s debts to the Bank, but they did not cover all the debts. The Bank also collected personal assets of the Weavers in which it had security interests.

The Bank commenced this action to collect sums remaining due on its loans to Weaver-Maxwell and the Weavers. The defendants asserted counterclaims based on their contention that the Bank had breached its March 24, 1980 contract to loan money to Mr. and Mrs. Weaver. They also raised claims arising from the Bank’s liquidation of their assets. The case was tried to a jury over a three-week period. The jury awarded damages to defendants of $300,000 for breach of contract, $800,000 on tort theories, and $40,000 for bad faith in the liquidation of the Weavers’ personal assets. It also awarded the defendants $140,000 in punitive damages. The District Court entered judgment on both the breach of contract and tort damages. It denied the Bank’s claim for a deficiency judgment of $377,702.73. It ordered the Bank to remit to defendants $729,073.74 from liquidation of the loan collateral. It also awarded defendants $266,597.26 in prejudgment interest and $384,000 in attorney fees, for a total judgment of $2,659,671 plus interest.

I

Did the District Court err in giving the jury a special verdict form which presented the issue of breach of contract in terms that adopted defendants’ view of substantial disputed facts?

The evidence on whether Mr. Weaver’s request for $47,000 should have been considered as part of the $84,291.69 loan was lengthy and conflicting. Both sides presented expert and lay opinion testimony on whether the Bank was obligated to advance the $47,000. The testimony of Mr. Weaver and of Mr. Hoffman also directly conflicted on whether Mr. Weaver requested the $47,000 as a disbursement of part of the $84,291.69 loan or as a new loan. This testimony was admitted into evidence without objection.

The jury was not asked whether Mr. Weaver was entitled to $47,000 cash out of the note for this application. Instead, the District Court adopted the defendants’ proposed special interrogatory as jury instruction Number 1:

“1. A. On April 4 or 7, 1980 did Art Weaver request Northwestern National Bank to advance approximately $47,000 on the Weavers’ note of March 24, 1980, in order to pay a debt of Weaver-Maxwell, Inc. to International Harvester?
“Answer:_(yes or no)
“B. If your answer to question No. 1 is ‘yes,’ please state the total amount of damages which the Bank’s breach of contract proximately caused each of the defendants to suffer when the Bank refused to advance such funds?
Answer: Weaver Maxwell, Inc. $_
Art & Grace Weaver $_
Darlow & Ruth Maxwell $_

In substance, this required the jury to determine whether Mr. Weaver asked the Bank to advance $47,000 on the March 24 note. If they answered “yes” then the next determination was the amount of damages which the breach caused the defendants.

“While it is within the trial court’s discretion to structure the form and frame the questions of a special verdict, the interrogatories must be adequate to enable the jury to determine the factual issues essential to judgment.” Kinjerski v. Lamey (Mont. 1981), 635 P.2d 566, 567, 38 St.Rep. 1703, 1705, citing Glick v. Knoll (1959), 136 Mont. 176, 346 P.2d 987; Coburn Cattle Co. v. Small (1907), 35 Mont. 288, 88 P.953. We conclude that the special verdict submitted on this record was inadequate. In fact, the Bank agrees that Mr. Weaver was still entitled to $47,000 out of the $84,291.69 loan. However, it was the province of the jury to decide if Mr. Weaver was entitled to apply $47,000 on the new out-of-trust obligation' to IH. That central issue was not submitted to the jury. Under this record, it was essential that the judge leave the factual determination of the nature of the agreement to the jury. Instead, the District Court reached the conclusion that the Bank was obligated to loan the $84,291.69 for any purpose Mr. Weaver desired and therefore only left the jury to determine whether Mr. Weaver asked for the $47,000. This totally disregarded the conflict of the evidence.

The dissent suggests that the note and mortgage are facially clear and that no parol evidence should have been admitted which would contradict the instruments. As previously pointed out, no objections were made to the admission of the Bank’s evidence in this regard. Further, the note and mortgage on their faces do not prove an obligation on the part of the Bank to deliver cash in any amount to Mr. Weaver. As an example, they would be appropriate as evidence of a debt already owed and past due. Clearly, it is necessary to go outside the terms of the instruments to determine what amount, if any, Mr. Weaver was entitled to apply on the $47,000 out-of-trust obligation to IH.

We hold that special interrogatory #1 was fatally deficient, and we remand for a new trial. For the guidance of court and counsel on remand, we will briefly consider the other issues raised on appeal.

II

Did the District Court err in the manner in which it submitted the issue of tortious interference with contract to the jury?

Over the Bank’s objection, the court instructed the jury that:

“The elements of interference with contract are that (1) there be a valid business relationship or reasonable expectation of economic advantage, (2) knowledge of the relationship on the part of the party interfering, (3) intentional interference inducing or causing a breach or termination of the relationship or expectancy, (4) resultant damage.”

The Bank contends that this instruction omits the element of unjustifiability or impropriety of the alleged tortious actions.

In Bolz v. Myers (Mont. 1982), 200 Mont. 286, 651 P.2d 606, 611, 39 St.Rep. 1747, 1752, this Court set forth the elements of interference with contract: on the part of the actor, and (4) that actual damage and loss resulted. Bermil Corp. v. Sawyer (Fla.App. 3rd Cir. 1977), 353 So.2d 579.”

“In order to establish a prima facie case of interference with contractual or business relations, it must be shown that the acts (1) were intentional and willful, (2) were calculated to cause damage to the plaintiff in his or her business, (3) were done with the unlawful purpose of causing damage or loss, without right or justifiable cause

The instruction given to the jury omits the requirement that the act is done “without right or justifiable cause on the part of the actor.” The instruction given ignores the Bank’s position that its refusal of the $47,000 loan, which led to the termination of the IH franchise, was not tortious because the refusal was justified and within the Bank’s rights. We conclude that an instruction on interference with contract must provide that the act is “without right or justifiable cause on the part of the actor.”

Ill a.

Did the District Court err in entering judgment upon the special verdict by entering judgment on the jury’s findings of damages both for breach of contract and for tort?

In addition to the special interrogatory mentioned in Issue I, the jury considered special interrogatories on several tort and statutory claims. The jury found that the Bank did not breach a duty of good faith and fair dealing to the defendants when it refused to advance $47,000. It found that the Bank did intentionally and wrongfully interfere with the franchise contract between Weaver-Maxwell and IH; that the Bank committed fraud, deceit, or constructive fraud causing Weaver-Maxwell loss of the IH franchise; that the Bank made negligent misrepresentations causing the loss of the franchise; and that the Bank liquidated Weaver assets in bad faith. The jury set the amount of damages to Weaver-Maxwell for the tort causes of action at $800,000. Under the contract theory, the jury found that damages to Weaver-Maxwell were $300,000. The Bank’s position is that $800,000 should be awarded as the larger of the alternative damage findings. However, the District Court found that the contract and tort damages were cumulative.

We conclude that the jury’s verdict on the tort claims is unclear because the special interrogatories do not state which acts of the Bank were considered under each theory. The instructions should be revised on remand to show which acts of the Bank should be considered under each theory. Then it can be determined which tort damages are cumulative to contract damages and which are alternative.

III b.

Did the District Court err in entering judgment upon the special verdict because the special verdict’s award of punitive damages conflicted with the jury’s finding that the Bank had acted in good faith?

The jury found that the Bank did not breach its duty to act in good faith and deal fairly when it refused to advance $47,000 to the Weavers, but it did find that the Bank omitted other torts — interference with contract, fraud, negligent misrepresentation, and bad faith in liquidating the Weavers’ collateral. Punitive damages could have been awarded under any of the tort theories presented, if the Bank was found guilty of oppression, fraud, or malice, actual or presumed. Section 37-1-221(1), MCA. The jury instructions should be revised on retrial so that the jury can state under which tort theory or theories it awards punitive damages.

IV a.

Did the District Court err in its resolution of the issues reserved for its decision, by denying the Bank’s claim for a deficiency judgment?

The Bank’s suit was for sums remaining due on unpaid notes after sale of the collateral, together with costs of preparing and liquidating the collateral. The District Court concluded that the Bank’s “liquidation of the assets and collateral . . . was not commercially reasonable and that the Bank is not entitled to any deficiency judgment.” It concluded that the Bank was not entitled to declare a default in the indebtedness of Weaver-Maxwell because the Bank had breached its loan agreement and destroyed Weaver-Maxwell’s franchise. It also concluded that because of its tortious acts toward the defendants, the Bank had no right to recover the principal amounts of its loans outstanding to Weaver-Maxwell. The court concluded that the rights of the Bank to any claim for a deficiency were extinguished.

The Bank argues that neither the amount remaining owing on the loans nor the fact that it had not been paid was disputed. It asserts that it was entitled as a matter of law to a judgment for the $377,702.73 remaining due.

We conclude there is nothing in the record to justify denial of a deficiency judgment to the Bank. The court’s conclusion that the liquidation of collateral was not commercially reasonable contradicts the jury’s finding in special interrogatory #4b that the liquidation of the assets was commercially reasonable. Whether the Bank breached the underlying loan agreements was never an issue before the court. No cases or statutes have been cited which lead reasonably to the conclusion that the Bank’s tortious conduct prohibited it from collecting on the underlying loans. In the absence of facts or legal theory beyond those in the present record, it would appear that the Bank is entitled to a deficiency judgment.

IV b.

Did the District Court err in its resolution of the issues reserved for its decision by ordering the Bank to surrender to defendants the proceeds of liquidation of collateral?

The District Court concluded that these proceeds should be surrendered on equitable grounds. No issue was raised by the defendants and no evidence was presented on a theory that the Bank should be required to surrender the proceeds of liquidation of collateral. We conclude that the jury’s verdict was intended to fully compensate the defendants for tortious actions of the Bank. The record demonstrates no basis to require that the Bank surrender the proceeds.

IV c.

Did the District Court err in its resolutions of the issues reserved for its decision by awarding prejudgment interest at a rate of 18 %?

The District Court awarded prejudgment interest on the $300,000 damages for breach of contract at a rate of 18%, the rate of interest on Weaver-Maxwell’s loans. The Bank argues that no prejudgment interest should have been allowed because the amount of contract damages was not subject to calculation prior to judgment.

Section 27-1-211, MCA, provides:

“Right to interest. Every person who is entitled to recover damages certain or capable of being made certain by calculation and the right to recover which is vested in him upon a particular day is entitled also to recover interest thereon from that day except during such time as the debtor is prevented by law or by the act of the creditor from paying the debt.”

The defendants argue that the amount of contract damages is reasonably certain of calculation. They assert that the amount the jury awarded represents the amount of working capital of Weaver-Maxwell. In their counterclaim, the defendants claimed contract damages of $2,000,000. At trial, they asked for $3,000,000. The jury awarded $300,000 in contract damages. We conclude these were not the type of damages which are “certain or capable of being made certain by calculation,” and that therefore prejudgment interest is not available. See Swenson v. Buffalo Bldg. Co. (Mont. 1981), 635 P.2d 978, 985, 38 St.Rep. 1588, 1597.

IV d.

Did the District Court err in its resolutions of the issues reserved for its decision by basing an award of attorney fees to defendants on their recovery on both their contract and tort claims?

The parties’ loan contracts provided for reasonable attorney fees in actions for their enforcement. Section 28-3-704, MCA, makes the right to attorney fees reciprocal. The District Court awarded defendants attorney fees of $384,000, or 30% of the total amount awarded by the jury.

Attorney fees are awardable only when statute or contract provides for their recovery. Sliters v. Lee (1982), 197 Mont. 182, 641 P.2d 475. In a lawsuit involving multiple claims or multiple theories, an award of attorney fees must be based on the time spent by the prevailing party’s attorney on the claim or theory under which attorney fees are allowable. Kadillak v. Montana Dept. of State Lands (1982), 198 Mont. 70, 74, 643 P.2d 1178, 1181. We conclude that in this case, attorney fees are awardable only on the contract claim.

Reversed and remanded.

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

MR. JUSTICE MORRISON,

dissenting:

It seems to me the majority opinion incorrectly decides all of the jury issues in this case.

The jury in this case was submitted special interrogatories with respect to various damage issues presented by way of counter-claim on the part of defendants. Plaintiffs foreclosure issues were reserved by the parties for decision through bench determination.

Assuming arguendo that the District Court erred in instructing the jury on the breach of contract action, then that special interrogatory to the jury should be set aside. However, such a finding does not infiltrate the tort case. Compensatory damages and punitive damages awarded by the jury should be affirmed and entry of judgment directed on those amounts totaling $980,000.

In any event, the majority incorrectly decides the breach of contract issue and that too should be affirmed. The crux of majority’s position relies upon an assumption that the bank officials could create a breach of contract issue by testifying the loan was for specific purposes. These purposes were from parol evidence in the form of scratch pad notations and verbal testimony. This evidence should have been excluded from the jury as it violated the parol evidence rule.

Section 28-2-904, MCA, provides as follows:

“Effective written contract on oral agreements. The execution of a contract in writing, whether the law requires it to be written or not, supersedes all the oral negotiations or stipulations concerning its matter which preceded or accompanied the execution of the instrument.”

The note and mortgage here at issue appear to be facially clear. The only exceptions, under these circumstances, to the parol evidence rule are stated in Sec. 28-2-905(1), MCA which provides:

“When extrinsic evidence concerning a written agreement may be considered.
“(1) Whenever the terms of an agreement have been reduced to writing by the parties, it is to be considered as containing all those terms. Therefore, there can be between the parties and their representatives or successors in interest no evidence of the terms of the agreement other than the contents of the writing except in the following cases:
“(a) when a mistake or imperfection of the writing is put in issue by the pleadings;
“(b) when the validity of the agreement is the fact in dispute.”

Neither of the two conditions set forth in Section 28-2-905(1), MCA, is present in this case. Even if there were an ambiguity in the instruments, the Bank, having drafted the same, could not raise the ambiguity to allow for the introduction of parol evidence. Section 28-3-206, MCA, provides:

“Uncertainty to be resolved against party causing it. In cases of uncertainty not removed by parts 1 through 5 of this chapter, language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist. The promissor is presumed to be such party, except that in the case of a contract between a public officer or body, as such, and a private party, it is presumed that all uncertainty was caused by the private party.”

Furthermore, the intention of the parties with respect to the note and mortgage must be ascertained only from the instruments themselves unless such intention is impossible to ascertain by reference to the agreements. Section 28-3-303, MCA. The majority opinion reverses court’s Instruction No. 1 by simply stating that there was a conflict in the evidence. There was in fact no conflict. Although plaintiff did not object to introduction of the parol evidence the trial court was perfectly justified, after hearing all evidence, to rule that such evidence could create no fact issue on the contract obligation to pay the $84,291.69.

The majority seems to feel the note and security agreement are not a complete contract and the parole evidence rule has no application. There is abundant authority that the parol evidence rule applies to negotiable instruments. In Perez-Lizano v. Ayers (Mont. 1985), [215 Mont. 95,] 695 P.2d 467, 42 St.Rep. 208, a similar issue was before the court. Ayers contended on appeal that his note to Perez-Lizano was conditioned by oral agreement. This Court held such representations violated the parol evidence rule. Lest there be any doubt that the rule applies to notes, this Court said:

“Section 28-2-905, MCA, provides that when the terms of an agreement have been reduced to writing by the parties, it is to be considered as containing all the terms, and there can be no evidence of the terms of the agreement other than the contents of the writing except when a mistake or an imperfection of the writing, is at issue, or when the validity of the agreement is the fact in dispute.

“Summary judgment in this case was proper. Ayers’ assertion that there is a material question of fact about the fraudulent purpose of the contract is immaterial because even if his assertions are true, the extrinsic evidence would be inadmissible under the parol evidence rule.”

Numerous cases hold that a negotiable instrument which is clear on its face cannot be altered by parol agreements or representations. See Evenson v. Hlebechuk (N.D. 1981), 305 N.W. 2d 13; Daniell Motor Co. Inc. v. Northwest Bank (Tex.App. 1986), 713 S.W.2d 808.

Instruction No. 1, given by the trial court, was proper because the instruments at issue were clear on their face. Upon demand by defendants, the Bank had an affirmative duty to pay that which they were obligated to pay. When the Bank refused, it breached its contract to defendants.

The balance of the majority’s position with respect to the jury verdict appears to be a cumulation of after-thoughts which would not have required reversal of the damage portion of the case. However, the majority is wrong on all counts.

The instruction on intentional interference is a correct one. The record supports separate damages for breach of contract and for tort. There is no indication that these damages duplicate or overlap. There is no legal requirement for the jury to be instructed that punitive damages relate to the contract or tort portion of the case. They were properly instructed that punitive damages are awarded for oppression, fraud or malice. Having found compensatory damages in tort, the jury was entitled to award punitive damages. The majority simply fails to adequately address or understand the issues in this case.

Next, the majority addresses whether the court erred in entering a judgment for defendants denying the Bank a deficiency judgment. The majority finds fault with the trial court’s determination that liquidation was not commercially reasonable by boldly stating there was nothing in the record to justify such a finding and that, in any event, it contradicts the special finding of the jury.

Obviously the jury was entitled to choose from alternative theories and chose fraud instead of other theories given to them. This is perfectly permissible and is so well established a citation of authority is unnecessary.

Foreclosure issues were, by stipulation, reserved for the court. The court specifically found that the method of liquidation was commercially unreasonable. This fact was properly decided by the court in its portion of the case.

The trial court found that Weaver-Maxwell, was not in default on the loans at issue on April 7, 1980. Only after the Bank’s tortious conduct caused Weaver-Maxwell to lose its franchises did the Bank seize upon these same losses to deem itself insecure. Consequently, in the foreclosure action, the court found the Bank’s reason for accelerating the loans to be commercially unreasonable. Abundant evidence in the record supported this finding.

Even if there had been a default on the part of Weaver-Maxwell, the trial court was justified in finding that liquidation was not commercially reasonable. As a part of its burden, the secured party must establish that it realized the full value of its collateral by means of a commercially reasonable disposition. Hubbard v. Farmers Bank Union Point (1980), 155 Ga.App. 720, 272 S.E.2d 510, aff’d 247 Ga. 431, 276 S.E.2d 622 (1980). To do this, the secured party must prove the value of the collateral at the time of repossession as well as a reasonable method of sale. Wood v. First National Bank of Commerce (1983), 167 Ga.App. 202, 305 S.E.2d 852. When a secured party fails to prove the value of the collateral liquidated, the law presumes the value of the collateral equaled the value of the underlying debt plus all expenses. Savoy v. Beneficial Consumer Discount Co., (1983), 503 Pa. 74, 468 A.2d 465; Lincoln First Bank v. Salvaterra (1980), 431 N.Y.S.2d 302, 106 Misc.2d 51, aff’d 437 N.Y.S.2d 611, 108 Misc.2d 453 (1980); First National Bank of Denver v. Cillessen (Col.App. 1980), 622 P.2d 598.

The issue of “commercially reasonable” was for the trial court. In the absence of evidence proving that liquidation was commercially reasonable the Bank should suffer by not being permitted a deficiency judgment.

At the time it took possession of Weaver-Maxwell’s assets, the Bank took no inventory of what it received. Nor did the Bank make any appraisals of the most valuable equipment or inventory. The Bank did not even keep a meaningful list of what it sold.

Based upon the evidence before it the trial court found:

“The Bank’s failure to maintain an inventory of what was sold or to make any appraisals of the more valuable pieces of collateral precludes this court from determining . . . the amount of any value lost as a result of the Bank’s negligence.”

Finding of Fact No. 15.

At the time of trial the Bank had collected $729,000 in liquidation proceeds against a total debt of $726,000. Actually the Bank owes defendants $3,000. All of the essential facts and applicable law are omitted in the majority’s discussion.

In my opinion the trial court did err in canceling the indebtedness and ordering return of the liquidation proceeds to defendants. This action by the court goes beyond the equitable remedies available to the judge here and may well duplicate the damages awarded by the jury. I also disagree with the trial court’s determination allowing interest because the amount was not liquidated. Attorneys’ fees are allowable on the contract action but not the tort action and in this respect I agree with the majority opinion.

The banking industry in Montana has complained to everyone within ear shot about obligations imposed upon the banks by this Court. At least in theory we have created obligations designed to assure bank customers fair treatment when they deal with the banking industry in this state.

The facts of this case illustrate the kind of banking practices which Court-imposed obligations were designed to correct. Weavers wished to borrow $84,291.69. The Bank wanted more security on the Weaver-Maxwell corporate debt. The Bank agreed to lend Weavers the money but demanded that Art Weaver personally collateralize the loan with a substantial portion of his family’s personal assets. The Bank did not inform the Weavers that the Bank had arranged for the security on this personal note to cross-collateralize the debt of Weaver-Maxwell, Inc. After obtaining the additional security on the corporate debt, the Bank breached its contract to Weavers and failed to advance the $84,291. Instead the Bank foreclosed and liquidated the security.

There are many fine bankers and banking institutions in the State of Montana. I can personally attest to that from having done business with them. However, the kind of practice which was engaged by the Norwest Bank of Great Falls in this case should not be countenanced. It is exactly the kind of business practice which the new legal duties seek to stop.

This case represents a blatant attempt by the majority of this Court to bail the Bank out where the Bank has caused serious and irreparable damage to a Montana business and its owners. This kind of banking practice creates an unfavorable business climate in Montana and should not be shielded by the majority’s result orientated judicial fiats.

There is no error in the jury trial and judgment should be entered on the jury verdict. The judgment entered by the trial court on the equity issues should be amended to reflect the views herein expressed.

MR. JUSTICES SHEEHY and HUNT concur.


author: MR. JUSTICE GULBRANDSON MR. JUSTICE HUNT,

text:
    MISSOULA COUNTY HIGH SCHOOL DISTRICT, Petitioner and Respondent, v. BOARD OF PERSONNEL APPEALS OF THE STATE OF MONTANA, and Missoula County High School Education Association, M.E.A., Respondents and Appellants.
    No. 86-42.
    Submitted on Briefs May 30, 1986.
    Decided Nov. 13, 1986.
    727 P.2d 1327.

      Hilley & Loring, Emilie Loring, Great Falls, Mary Anne Simpson, Bd. of Personnel Appeals, Helena, for respondents and appellants.
    Worden, Thane & Haines, Molly Shepherd, Missoula, for petitioner and respondent.
   MR. JUSTICE GULBRANDSON

delivered the Opinion of the Court.

The Montana Board of Personnel Appeals (the BP A) and the Missoula County High School Education Association (MCHSEA) appeal a Missoula County District Court order which ruled that the Missoula County High School District (the School District) did not commit an unfair labor practice in violation of Section 39-31-401, MCA. The District Court order reversed a BPA decision that the School District violated Section 39-31-401, MCA, by paying certain non-striking teachers for eighteen days of work where those teachers had agreed to work eighteen days but actually worked only one day. The issues on appeal are whether the District Court erred by reversing; (1) the BPA’s conclusion of law that the School District’s conduct was not justified by a legitimate, substantial, business necessity; (2) the BPA’s conclusion of law that the School District’s action was inherently destructive of protected labor rights; and (3) the BPA’s finding of fact that the non-striking teachers were not available and on-call after June 4, 1981. We affirm.

MCHSEA is the recognized exclusive bargaining representative of the School District’s non-supervisory certificated or licensed employees. On May 11, 1981, MCHSEA went on strike against the School District. The School District did not attempt to operate the Missoula schools during the first week of the strike. On June 1,1981, the School District superintendent sent a letter to all members of the bargaining unit. In pertinent part, that letter stated:

“The school district has just received definite legal advice that- our schools must be open for 180 days in the 1980-81 school year or we will lose $1,275 million in state aid.
“. . . A $1,275 million cut would necessarily mean much larger class sizes, reduced curricular and extra-curricular offerings.
“Schools must open June 4, 1981 if this community is to maintain the quality of our school program for the next year . . .
“High schools will open on June 5th for freshman, sophomore and junior classes ... All high school teachers should notify their principal by 4:00 p.m. June 3, 1981 indicating a willingness to work commencing with a PIR day at 8:00 a.m. June 4, 1981 . . .
“Teachers returning June 4th to completion of the school year shall receive for the 1980-81 school year an average 10.6% increase as per the attached salary schedule which includes increments and horizontal changes. This payment will be retroactive to August 27, 1980. All fringe benefits including insurance for June will be paid.”

Twenty teachers notified the School District’s administration that they would return to work if the School District attempted to operate. The School District opened the Missoula schools on June 4, 1981. Three teachers who had agreed to return did not do so because of either illness or family emergency. After the first day and with what is described as good and sufficient reasons, the School District’s Board of Trustees determined it would be inappropriate to continue the operation of the schools. The School District made no further attempt to operate the schools for the balance of the 1980-81 school year.

In April 1982, a Missoula attorney, representing one of the teachers who returned to work, sent a letter to the Missoula County High School Board of Trustees. The letter stated that the School District superintendent’s June 1 letter was an offer of employment for a specific term; that the School District did not reserve the right to terminate the offer or any agreement arising therefrom; that, in the attorney’s opinion, a contractual relationship existed between the School District and the teacher for employment for a specific number of days commencing on June 4, 1981, and ending on the 180th day of the 1980-81 school year; and that the School District breached the agreement by refusing to pay the teacher for work he was prepared to perform. In July 1982, the attorney sent another letter to the School District on behalf of the same teacher. That letter again explained the basis of the teacher’s claim and stated that the teacher was seriously contemplating legal action.

In September 1982, upon the advice of its attorney, the School District paid the twenty returning teachers for the remaining eighteen days they had agreed to teach. The School District did not pay any of the striking teachers for this period.

In October 1982, the MCHSEA filed an unfair labor practice charge with the BPA alleging that the School District had discriminated against those teachers who had supported the strike. The union sought: (1) reimbursement of all amounts deducted from the striking teachers’ salaries because of their participation in the strike, and (2) corresponding contributions to the teachers’ retirement system. In June 1983, counsel for MCHSEA and counsel for the School District agreed to a stipulation of facts which was submitted to the BPA. In December 1983, a hearing officer from the BPA issued his findings of fact, conclusion of law and order ruling that the School District had committed unfair labor practices violating Sections 39-31-401(1) and (3), MCA..

Specifically, the hearing officer ruled that the School District’s conduct was inherently destructive of the public employees’ self-organizational rights; that there was no substantial and legitimate business justification for the School District’s actions; and that the non-striking teachers were not on-call during the seventeen days in question. The School District filed exceptions to the hearing officer’s decision with the BPA. The full BPA held an oral argument on this case in March 1984. In June 1984, the BPA issued its final order adopting the hearing examiner’s findings of fact and conclusions of law. The BPA ordered the School District to stop violating Section 39-31-401(1) and (3), MCA, and fashioned two alternative remedies to compensate the striking teachers.

In July 1984, the School District filed a petition for judicial review and for declaratory judgment with the Missoula County District Court. The BPA and the MCHSEA filed answers and the District Court, sitting without a jury, heard oral arguments in June 1985. In November 1985, the court entered its findings of fact, conclusions of law and order. The court made the following conclusions of law: in view of the evidence, the BPA clearly erred in finding that the teachers did not make themselves available and did not remain on-call after June 4, 1981; the BPA abused its discretion and committed an error of law by concluding that the School District was under no obligation to pay the teachers for more than one day of work; the BPA abused its discretion and committed an error of law in concluding that the payment to the teachers was inherently destructive of protected rights and, therefore, no proof of anti-union motivation was required; and that the BPA abused its discretion and committed an error of law by concluding that the School District’s conduct was clearly prohibited under Section 39-31-401, MCA. This appeal followed.

Section 39-31-401, MCA, provides in part:

“It is an unfair labor practice for a public employer to:
“(1) interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in 39-31-201;
“(3) discriminate in regard to hire or tenure of employment or any term or condition of employment in order to encourage or discourage membership in any labor organization; however, nothing in this chapter or in any other statute of this state precludes a public employer from making an agreement with an exclusive representative to require, as a condition of employment, that an employee who is not or does not become a union member, must have an amount equal to the union initiation fee and monthly dues deducted from his wages in the same manner as checkoff of union dues; . . . Section 39-31-201, MCA, provides:
“Public employees shall have and shall be protected in the exercise of the right of self-organization, to form, join, or assist any labor organization, to bargain collectively through representatives of their own choosing on questions of wages, hours, fringe benefits, and other conditions of employment, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection free from interference, restraint, or coercion.”

These statutes are virtually identical to parts of the federal National Labor Relations Act (NLRA), 29 U.S.C. Section 157 and Section 158. This Court and the BPA both look to National Labor Relations Board and federal court interpretations of the NLRA for guidance in interpreting the equivalent Montana statutes. Teamsters, Etc. v. St. Ex rel. Bd. of Personnel (1981), 195 Mont. 272, 635 P.2d 1310; State v. Dist. Court of Eleventh Jud. Dist. (1979), 183 Mont. 223, 598 P.2d 1117.

Where, as here, a district court reviews an agency decision, the standard of review is set forth in the Montana Administrative Procedure Act at Section 2-4-704, MCA. The relevant portions of that statute state:

“(2) The court may not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings. The court may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are: “(a) in violation of constitutional or statutory provisions;
“(b) in excess of the statutory authority of the agency;
“(c) made upon unlawful procedure;
“(d) affected by other error of law;
“(e) clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record;
“(f) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion, or
“(g) because findings of fact, upon issues essential to the decision, were not made although requested.”

Addressing the statute, this Court has stated:

“ [Findings of fact by an agency have been subject to a ‘clearly erroneous’ standard of review by the courts . . . Conclusions of law are subject to an ‘abuse of discretion’ review. These standards differ due to the agency’s expertise regarding the facts involved and the court’s expertise in interpreting and applying the law. (Citations omitted.)”

City of Billings v. Billings Firefighters (1982), 200 Mont. 421, 430, 651 P.2d 627, 632.

The BPA held that the School District had violated Subsections (1) and (3) of Section 39-31-401, MCA. Under the equivalent federal statutes (29 U.S.C. Section 158(a)(1) and (3)), any violation of subsection (3) necessarily includes a derivative violation of subsection (1). N.L.R.B. v. Swedish Hospital Med. Center (9th Cir. 1980), 619 F.2d 33, 35. Subsection (1) “was intended as a general definition of employer unfair labor practices. Violations of it may be either derivative, independent, or both.” Fun Striders, Inc. v. N.L.R.B. (9th Cir. 1981), 686 F.2d 659, 661. In this case, the BPA did not specify whether the subsection (1) violation was derivative from the subsection (3) violation or whether it was an independent violation. However, language in the hearing examiner’s opinion indicates that he considered there to be an independent violation of Section 39-31-401(1), MCA. Thus, we proceed as if the BPA had found an independent violation of Subsection (1).

Section 39-31-401(3), MCA, makes it an unfair labor practice for a public employer to “discriminate in regard to hire or tenure of employment or any term or condition of employment in order to encourage or discourage membership in any labor organization . .. .” Addressing the federal counterpart to this section, the United States Supreme Court stated:

“[T]he intention was to forbid only those acts that are motivated by an anti-union animus . . . But an employer may take actions in the course of a labor dispute that present a complex of motives . . . and it is often difficult to identify the true motive.
“In these situations the Court has divided an employer’s conduct into two classes . . . Some conduct is so ‘inherently destructive of employee interests’ that it carries with it a strong inference of impermissible motive ... In such a situation, even if an employer comes forward with a nondiscriminatory explanation for its actions, the Board ‘may nevertheless draw an inference of improper motive from the conduct itself and exercise its duty to strike the proper balance between the asserted business justifications and the invasion of employee rights in light of the Act and its policy.’ ... On the other hand, if the adverse effect of the discriminatory conduct on employee rights is ‘comparatively slight,’ an antiunion motivation must be proved to sustain the charge if the employer has come forward with evidence of legitimate and substantial business justifications for the conduct.’ (Citations omitted.)”

Metropolitan Edison Co. v. NLRB (1983), 460 U.S. 693, 700-701, 103 S.Ct. 1467, 1473, 75 L.Ed.2d 387, 396. In this case, the BPA found that the School District had no substantial, legitimate business justification for making the payments to the teachers and that the payments were inherently destructive of the striking teachers’ union interests. Thus, the BPA found a violation of Section 39-31-401(3), MCA.

The first issue is whether the District Court erred by reversing the BPA’s conclusion of law that the School District had no legitimate business justification for making the payments. We first note that although the BPA and the hearing examiner characterized this conclusion as a finding of fact, it is more properly seen as a conclusion of law. Thus, that conclusion is subject to the “abuse of discretion” standard of review.

The stipulated facts show that the payment was made only after an attorney for one of the teachers threatened legal action. Two letters from that attorney are attached as exhibits to the stipulated facts. The attorney asserted that the superintendent’s letter was an offer of employment for a specific number of days; i.e. from June 4th to the completion of the 180th day of the school year. The attorney charged that the teacher was prepared to perform for the term of the contract and that the School District breached the agreement by refusing to pay him for the work he was prepared to perform. At the hearing before the full Board of Personnel Appeals, board members discussed and considered a letter from the School District’s superintendent. Although that letter was not part of the stipulated facts, no objection was made to consideration of that letter and it is properly part of the record before this Court. See Section 39-31-409(3), MCA. The superintendent’s letter shows (1) that an attorney advised the School District that the teacher’s claim was valid and (2) that the School District decided not to litigate the claim because of the increased cost to do so. The letter expressed concern that if the School District was unsuccessful in contesting the claim, the court would order the School District to pay the teacher’s attorney’s fees which would increase the loss by 30-40%. The hearing examiner disagreed with the School District and found that there was no obligation to pay the teachers except for the one day they worked. Thus, the hearing examiner and the BPA concluded there was no business justification for paying the claim. We agree with the District Court that the conclusion was an abuse of discretion.

We need not decide for the purposes of this opinion whether the School District or the BPA correctly determined the legitimacy of the teacher’s claim.

“The legitimacy of the [School District’s] conduct for purposes of the analysis prescribed by Great Dane depends not on the truth of its assertions regarding its contractual obligations but rather on the reasonableness and bona fides with which it held its beliefs.
“The First Circuit’s decision in NLRB v. Borden, Inc., Borden Chemical Division, 600 F.2d 313 (1st Cir. 1979), is persuasive in this regard. In Borden, the employer withheld accrued vacation pay because of the employees’ strike activity until after the contractual vacation period had expired. The Board rejected the employer’s assertion that it was acting pursuant to a contractual obligation, i.e., ‘employees shall not be paid vacation pay in lieu of vacation,’ and concluded that the denial of vacation benefits was inherently destructive of the employees’ rights. The First Circuit remanded the case, declaring:
“ ‘Borden did come forward with evidence of a business justification for its conduct, namely, the terms of the collective bargaining agreement and past practice.’
“The Board found this reason invalid because its interpretation of the contract differed from that of Borden’s. This, however, is not a question of contract interpretation. The Board had a duty to determine whether Borden was motivated by its reliance on the collective bargaining agreement or by anti-union animus when it withheld the accrued vacation benefits. We caution the Board that it is neither our function nor the Board’s to second-guess business deci sions. ‘The Act was not intended to guarantee that business decisions be sound, only that they not be the product of antiunion motivation’. (Emphasis in original.) (Citations omitted.)”

Vesuvius Crucible Co. v. N.L.R.B. (3rd. Cir. 1981), 668 F.2d 162, 167. See also Stokely-Van Camp, Inc. v. N.L.R.B. (7th Cir. 1983), 722 F.2d 1324.

In Vesuvius, the employer, interpreting a collective bargaining agreement, refused to pay allegedly accrued vacation benefits to any employee, striking or nonstriking. The NLRB found that this interpretation of the collective bargaining agreement was incorrect, that the employees’ right to the benefits had accrued, and that the employer committed unfair labor practices in refusing to pay. The Third Circuit reversed finding the company’s interpretation reasonable and arguably correct. The Vesuvius court found that the NLRB overstepped its authority in formulating its own interpretation of the contract.

The instant case is similar to Borden and Vesuvius. Here, the hearing examiner disagreed with the School District’s interpretation of the contract but he did not address the reasonableness of that interpretation. We find that the School District made a reasonable interpretation of the contract and paid the claim out of a bona fide belief that the claim was valid. The School District paid the claim only after the teacher threatened to file suit to collect. Moreover, the School District’s attorney advised the School District that this was a legal claim which should be paid. Finally, we find that the School District’s interpretation of the contract was arguably correct. Therefore, we affirm the District Court’s reversal of the BPA’s conclusion that the School District had no substantial, legitimate business justification for the payment.

The second issue is whether the lower court properly reversed the BPA’s conclusion that the School District’s action was inherently destructive of protected labor rights. Inherently destructive conduct, in this context, is conduct which carries with it, “. . . unavoidable consequences which the employer not only foresaw but which he must have intended” and thus bears “its own indicia of intent.” (Citation omitted.) N.L.R.B. v. Great Dane Trailers (1967), 388 U.S. 26, 33, 87 S.Ct. 1792, 1797, 18 L.Ed.2d 1027, 1034. The Ninth Circuit Court of Appeals describes those cases finding inherently destructive conduct as:

“[C]ases involving conduct with far reaching effects which would hinder future bargaining, or conduct which discriminates solely upon the basis of participation in strikes or union activity. Examples of inherently destructive activity are permanent discharge for participation in union activities, granting of superseniority to strike breakers, and other actions creating visible and continuing obstacles to the future exercise of employee rights. (Citation omitted.)” Portland Willamette Co. v. N.L.R.B. (9th Cir. 1976), 534 F.2d 1331, 1334. The Portland Willamette Co. court declined to find inherently destructive conduct in an employer’s proposal, during a strike, to grant a retroactive pay increase to workers who had returned to, and remained at, work by a certain date.

General Electric Co. (1948), 49 NLRB 510, 23 LRRM 1094, supports a conclusion that there was no inherently destructive conduct in this case. In General Electric the employees engaged in a strike and the employer, upon the strike’s termination, paid full wages for the entire strike period to those employees who had indicated a willingness to work during the strike. Although the compensated employees actually did not work during the strike, the NLRB found that those workers were “on call” and available for work. The NLRB found no unlawful disparity of treatment in paying full wages to those workers for the strike period.

In this case, the BPA found that the teachers were not on-call and did not make themselves available for work after the first day. The District Court ruled that this finding was clearly erroneous. The propriety of this ruling is the third issue on appeal. The facts support an inference that the teachers did make themselves available to work the entire period in question. The superintendent’s letter soliciting teachers (the offer) clearly contemplated that the teachers would work until the completion of 180 school days, i.e., for eighteen more days. By showing up for work the first day, the teachers accepted the offer and implicitly agreed to work, and make themselves available, for eighteen days.

The BPA found that the School District discriminated against the strikers solely on the basis of union activity. We disagree. The School District discriminated in favor of the non-strikers because they took the affirmative step of agreeing to teach for eighteen days and forego other options for those days. Moreover, the payments were made more than a year after the strike and only after the threat of a lawsuit. The School District’s conduct arose out of a unique situation and is not the equivalent of permanently discharging strikers or granting superseniority to non-strikers. The inherently destructive label simply does not fit this conduct. Therefore, we uphold the District Court’s reversal of the BPA on this point.

We concede that the School District’s conduct may have a comparatively slight impact on employee rights. Teachers may hesitate slightly in joining future strikes. To find a violation of Section 39-31-401(3), MCA, where the discriminatory conduct has comparatively slight effect, “[A]n antiunion motivation must be proved to sustain the charge if [as here] the employer has come forward with evidence of legitimate and substantial business justifications for the conduct.” Metropolitan Edison Co., 460 U.S. at 701, 103 S.Ct. at 1473. The BPA concedes, and the record shows, that there is no evidence that the School District acted with an anti-union motive. Therefore, we hold that there was no violation of Section 39-31-401(3), MCA.

Finally, we address the issue of whether there was an independent, as opposed to derivative, violation of Section 39-31-401(1), MCA.
“Such a violation is established by showing:
“(1) that employees are engaged in protected activities, (citation omitted);
“(2) that the employer’s conduct tends to ‘interfere with, restrain, or coerce employees’ in those activities, (citation omitted); and
“(3) that the employer’s conduct is not justified by a legitimate and substantial business reason, (citation omitted).”

Fun Striders, Inc., 686 F.2d at 661-662. We held above that the employer’s conduct was justified by a legitimate and substantial business reason. Therefore, there can be no independent violation of Section 39-31-401(1), MCA.

The District Court properly reversed the BPA order finding unfair labor practices.

Affirmed.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICE WEBER and THE HONORABLE HENRY C. LOBLE, District Court Judge, sitting for MR. JUSTICE HARRISON, concur.

MR. JUSTICE HUNT,

dissenting:

I dissent. I would uphold the BPA decision that the School District violated Section 39-31-401, MCA, by paying the non-striking teachers for eighteen days of work where those teachers actually worked only one day. The facts as set out by the majority refer to the letter sent to all teachers by the School District, however the majority opinion does not set out that letter in full. There is only one key sentence omitted. That sentence is the last sentence of the letter which reads:

“Teachers who do not report for duty by 8:00 a.m. on June 4, 1981 will be replaced.”

This sentence is the crux of that letter, as is shown by the fact that the School Board refers to this letter in the minutes of its meetings as the “replacement letter.” The letter further states, “Teachers returning June 4th to completion of the school year shall receive . . . an average 10.6% increase. . . .” Twenty teachers told the District’s agents that they would return on June 4. Seventeen actually worked June 4th, two of the teachers had a family emergency and one was sick. On the evening of June 4 the School District decided to close Missoula county high schools through Friday, June 5. On Sunday, June 7 the Board decided to close the schools for the remainder of the 1980-81 academic year.

The first issue raised on appeal, is whether the District Court erred in reversing the BPA’s finding of fact that non-striking teachers were not available and on-call after June 4, 1981. The School District urges that the payment for eighteen days of work when only one was in fact worked was approved in General Electric Co. (1948), 80 NLRB 510, 23 LRRM 1094. In General Electric, the employer paid employees who made their services available and remained on-call in a standby capacity. The employer refused to pay strikers. The NLRB held that the payment to non-strikers who did not work was not discriminatory because they remained subject to the employer’s call on a standby capacity which was compensable as a matter of law. Thus the factual issue of whether the returning teachers were on-call after June 4, 1981 becomes crucial. The BPA held they were not because the schools were closed and the school year was over. I agree that the returning teachers could not have remained on call for seventeen days after the schools had closed for the academic year, thus I would hold that General Electric has no application to this case. The conduct of the School District was to divide the work force into those who decided to go out on strike and those who did not and to reward the latter group.

The United States Supreme Court has set out the test to determine if discriminatory conduct constitutes an unfair labor practice in NLRB v. Great Dane Trailers, Inc. (1967), 388 U.S. 26, 34, 87 S.Ct. 1792, 1798, 18 L.Ed.2d 1027, 1035.

“First, if it can reasonably be concluded that the employer’s discriminatory conduct was ‘inherently destructive’ of important employee rights, no proof of an antiunion motivation is needed and the Board can find an unfair labor practice even if the employer introduces evidence that the conduct was motivated by business considerations. Second, if the adverse effect of the discriminatory conduct on employee rights is ‘comparatively slight,’ an antiunion motivation must be proved to sustain the charge if the employer has come forward with evidence of legitimate and substantial business justifications for the conduct. Thus, in either situation, once it has been proved that the employer engaged in discriminatory conduct which could have adversely affected employee rights to some extent, the burden is upon the employer to establish that he was motivated by legitimate objectives since proof of motivation is most accessible to him. (Emphasis in original.)”

The payment for seventeen days of unworked time is not so insignificant that the teachers will not reflect before participating in future strikes. The hearing examiner estimated the cost to the District to be approximately $40,000 or $2,000 per employee. There have been many decisions that have found unlawful interference with the right to strike under similar circumstances. NLRB v. Great Dane, supra (grant of vacation benefits to only nonstrikers was an unfair labor practice); NLRB v. Erie Resistor Corp. (1963), 373 U.S. 221, 83 S.Ct. 1139, 10 L.Ed.2d 308 (grant of super seniority to nonstrikers was an unfair labor practice); George Banta Co., Inc., Banta Div. v. NLRB (D.C. Cir. 1982), 686 F.2d 10 cert. den (1983), 460 U.S. 1082, 103 S.Ct. 1770, 76 L.Ed.2d 344 (grants of preferential reinstatement and seniority rights to employees who abandoned a strike early was an unfair labor practice.); Soule Glass and Glazing Co. v. NLRB (1st Cir. 1981), 652 F.2d 1055 (a 25 cents per hour wage increase to employees working as of the first day of a strike was an unfair labor practice.); NLRB v. Swedish Hospital Medical Center (9th Cir. 1980), 619 F.2d 33 (granting a one day vacation to non-strikers, those who returned early and those hired during the strike was an unfair labor practice); NLRB v. Rubatex Corp. (4th Cir. 1979), 601 F.2d 147 cert. den. (1979), 444 U.S. 928, 100 S.Ct. 269, 62 L.Ed.2d 185 (bonuses of $100 to $25 for those who worked during the strike paid after the strike was over were an unfair labor practice.); NLRB v. Frick Co. (3d Cir. 1968), 397 F.2d 956 (refusing vacation pay to strikers while paying non-strikers was an unfair labor practice.); Aero-Motive Manufacturing Co. (1972), 195 NLRB 790, 79 LRRM 1496, enf’d, (6th Cir. 1973), 475 F.2d 27 ($100 bonus to those who worked through a strike, not awarded or announced until after the strike was an unfair labor practice.). The Court in Aero-Motive stated that by distinguishing “solely on the basis of who engaged in protected, concerted activity and who did not.” Such payments “. . . not only created a divisive wedge in the work force, but also clearly demonstrated for the future the special rewards which lie in store for employees who choose to refrain from protected strike activity.” Aero-Motive, 195 NLRB at 792, 79 LRRM at 1498. I would adopt the rationale of Aero-Motive and conclude that the conduct of the School District was inherently destructive of the employees right to strike. Further, the business justification advanced by the School District does not constitute a legitimate substantial business necessity. The District received two letters from counsel for one of the teachers claiming he was due compensation for eighteen days although the terms of the agreement were, “to the completion of the school year” which ended June 4th. Further, the business necessity advanced by the School District does not explain why all twenty teachers were paid for the remaining seventeen days, even though three of those teachers did not work and were not paid for June 4th.

I would reverse the decision of the District Court and affirm the decision of the BP A.

MR. JUSTICE SHEEHY and MR. JUSTICE MORRISON concur with the above dissent.


author: MR. JUSTICE SHEEHY

text:
    The FEDERAL LAND BANK OF SPOKANE, a corporation, Plaintiff and Respondent, v. AGNES HEIDEMA, Jimmy Ray Heidema as Personal Representative of the Estate of Louis Heidema, Deceased; et al., Defendants and Appellants.
    No. 86-139.
    Submitted on Briefs Sept. 11, 1986.
    Decided Nov. 13, 1986.
    Rehearing Denied Dec. 9, 1986.
    727 P.2d 1336.

      Jim R. Heidema, pro se.
    Crowley, Haughey, Hanson, Toole & Dietrich, Malcolm H. Goodrich, Billings, for plaintiff and respondent.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

The Heidemas appeal the order and writ of assistance issued by the District Court, Thirteenth Judicial District, Yellowstone County, to deliver possession of real property deeded to Federal Land Bank (FLB) pursuant to a sheriff’s foreclosure sale. We affirm the District Court’s order and writ of assistance.

This action is Heidemas’ third appeal in this matter, and their fifth appeal to this Court since 1984. At all times, the Heidemas have appeared without counsel. The present action stems from a foreclosure sale held pursuant to a judgment and decree of foreclosure entered by the District Court on September 19, 1984. The Heidemas appealed that judgment on October 19,1984. On December 18,1985, this Court dismissed the appeal on the basis that Heidemas had failed to prosecute the appeal. We found Heidemas lacked good cause for failing to file an undertaking of costs, and for failing either to transmit the record of the trial court or to designate the portion of the proceedings required for appeal.

A brief summary of the facts is in order. In November, 1975, Louis Heidema, Jr. and Agnes Heidema, husband and wife, borrowed $221,000 from FLB. In exchange for the loan, they co-signed a promissory note which required them to repay the loan in 35 yearly installments of $29,194.53 per year. Heidemas pledged their property in Yellowstone County as collateral. In 1983, Heidemas failed to pay the annual installment on the loan. In December, 1983, FLB filed a foreclosure action against Agnes and Jimmy Ray Heidema (Jimmy Ray is the personal representative of Louis Heidema’s estate). On September 19, 1984, the District Court ordered a sheriifs foreclosure sale of the Heidema property.

The mortgaged property was sold to FLB at a sheriifs sale October 25, 1984 for $278,480.44. The sheriff’s certificate of sale was issued to FLB October 29, 1984, subject to a one year redemption period. Heidemas never redeemed the property within the one year, nor did they prosecute their appeal of the foreclosure decree, as previously mentioned. FLB was granted a sheriff’s deed under the foreclosure sale November 15, 1985.

After receiving the deed, FLB sent a letter to the Heidemas requesting they remove themselves from the property by December 5, 1985. Heidemas did not do so. By letter dated January 9, 1986, FLB again requested Heidemas remove themselves from the property, or FLB would seek a writ of assistance to evict them. In response to this letter, Heidemas filed a motion for an order staying the action of FLB in seeking the writ of assistance. On February 11, 1986, the District Court denied Heidemas’ motion and granted FLB a writ of assistance. Heidemas filed notice of appeal from the order for the writ on March 7, 1986.

Heidemas raise four issues on appeal:

1. Whether the sheriff’s mortgage foreclosure sale was valid because of a defect in the published notice of the sale?

2. Whether the sheriff’s mortgage foreclosure sale was valid where improper notice was given of Yellowstone County’s liens for property taxes?

3. Whether the sheriff’s mortgage foreclosure sale was valid where the sheriff failed to sell the property by parcel in accordance with Section 25-13-704, MCA?

4. Whether the District Court is required to confirm a sheriff’s mortgage foreclosure sale prior to issuing a writ of assistance.

The first three issues relate directly to the validity of the September 19, 1984 sheriff’s foreclosure sale; the fourth issue challenges the validity of the issuance of the writ of assistance.

We hold that the first three issues relating to the validity of the foreclosure sale are res judicata. An action is barred by the doctrine of res judicata when the following criteria are met:

1) The parties or their privities are the same;

2) The subject matter of the action is the same;

3) The issues relating to the subject matter are the same; and,

4) The capacities of the persons in reference to the subject matter and the issues are the same.

Fox v. 7L Bar Ranch Co. (1982), 198 Mont. 201, 206, 645 P.2d 929, 931.

All four criteria have been met in this case — in both this appeal and the appeal of October 19, 1984: 1) Heidemas and FLB were the named parties; 2) the mortgaged property was the subject matter of the appeal; 3) the validity of the foreclosure sale was at issue; 4) Heidemas were and continue to be the mortgagor in possession, FLB was and continues to be holder of the sheriffs deed of foreclosure. Heidemas’ first appeal on these issues was dismissed. Under Rule 12, M.R.App.Civ.P., a dismissal of an appeal acts as an affirmance of a district court’s judgment, unless the dismissal was made without prejudice. Our dismissal of Heidemas’ first appeal affirmed the District Court’s judgment of foreclosure, and Heidemas are now barred from raising challenges to the validity of the foreclosure sale a second time.

As to whether the District Court properly issued the writ of assistance, we hold that the issuance of the writ of assistance is not dependent upon judicial confirmation of a foreclosure sale. This point of law has been well settled in Montana since Thomas v. Thomas (1911), 44 Mont. 102, 119 P. 283. The proceedings for foreclosure of a mortgage are exclusively provided for in Section 71-1-222, MCA. Thomas, at 110, 119 P.2d at 284. The court, by its judgment in a mortgage foreclosure action, directs the sheriff to make the sale. Id. There is no need for the court to confirm that which it has already ordered. Here, once the sale was conducted according to the judgment and FLB received its sheriff’s deed, the District Court properly held FLB was entitled to possession of the property, and properly issued the writ of assistance.

FLB requests damages be assessed against Heidemas pursuant to Rule 32, M.R.App.Civ.P. Under Rule 32, damages may be assessed where this Court finds an appeal is taken without substantial or reasonable grounds, and is taken for purposes of delay only. As we have previously stated to the Heidemas, in the context of discovery, this Court will not tolerate dilatory tactics designed to clog the wheels of the judicial process. First Bank (N.A.)-Billings v. Heidema (Mont. 1986), [219 Mont. 373,] 711 P.2d 1384, 1386, 43 St.Rep. 22, 24-25. While pro se litigants may be given a certain amount of latitude in their proceedings, they may not proceed in such a fashion as to abuse the judicial process, prejudicing the opposing party’s interests as well as other litigants’ access to the judicial system.

We therefore remand this cause to the District Court for a determination of damages, costs and attorney fees against the Heidemas, pursuant to Rule 32, M.R.App.Civ.P.

The order and writ of assistance of the District Court are affirmed, and the case remanded for determination of damages, costs and attorney fees.

MR. JUSTICES MORRISON, WEBER, GULBRANDSON and HUNT concur.


text:
    HANS WEGMULLER, Claimant and Appellant, v. L.E. MYERS COMPANY, Employer, and National Union Fire Insurance Company of Pittsburgh, Defendant and Respondent.
    No. 86-260.
    Submitted on Briefs Sept. 4, 1986.
    Decided Nov. 13, 1986.
    727 P.2d 937.
    Keefer, Roybal, Hanson, Stacey & Jarussi, Gene R. Jarussi, Billings, for claimant and appellant.
    James G. Edmiston, Billings, for defendant and respondent.
   MR. JUSTICE MORRISON

delivered the Opinion of the Court.

Claimant, Hans Wegmuller, appeals the May 9, 1986, decision of the Workers’ Compensation Court holding that the doctrine of res judicata bars claimant from reopening the final judgment in his cause before that court. We affirm the order of the lower court.

Claimant injured his back while working as a supervisory foreman for the L.E. Myers Co. In claimant’s original action seeking Workers’ Compensation benefits, the parties had stipulated that given the claimant’s age and permanent total benefit rate, the present value of his future permanent total benefits would be $94,883. The Workers’ Compensation Judge was asked to determine two issues:

1) Was the claimant permanently totally disabled or permanently partially disabled?

2) Was the claimant entitled to receive benefits in a lump-sum?

After a hearing, the Workers’ Compensation Judge found claimant to be permanently totally disabled and entitled to a lump-sum payment of his benefits. Employer’s insurer, National Union Fire Insurance of Pittsburgh, paid claimant his lump-sum award less previous advances. Although no satisfaction of judgment was ever filed by claimant, it is undisputed that the award was paid.

Subsequently, Willis v. Long Construction Co. (Mont. 1984), [213 Mont. 203,] 690 P.2d 434, 41 St.Rep. 2050, was issued by this Court, holding that a lump-sum award of Workers’ Compensation benefits could not be discounted to present value. Claimant then sought, by petition filed February 28, 1985, to reinstate his bi-weekly benefit payments.

Another Workers’ Compensation claimant, Richard A. Cole, had filed similar action prior to Wegmuller’s. The Workers’ Compensation Judge dismissed Cole’s petition in an order grounded on res judicata. We affirmed the lower court’s judgment in Cole v. Greyhound Lines, Inc. (Mont. 1986), [220 Mont. 503,] 716 P.2d 611, 43 St.Rep. 562. Immediately after Cole, was issued, the Workers’ Compensation Judge, citing Cole, denied Wegmuller’s petition also.

On appeal, claimant presents this Court with one issue:

“Did the Workers’ Compensation Court err in applying the doctrine of res judicata and refusing claimant’s request for reinstatement of bi-weekly benefits for permanent total disability?”

We find no error.

Claimant seeks to distinguish Cole. In Cole, the precise issue of whether claimant’s benefit should be discounted to present value was raised by the parties. In the instant case, the parties merely stipulated to the value of claimant’s lump-sum award, assuming discounting applied. Thus, alleges claimant, the lower court never resolved the issue of whether the payment should be discounted and res judicata does not apply.

However, the issue of whether the award should have been discounted was not treated by the Workers’ Compensation Court because it was not raised by claimant. Claimant’s case, as presented to the lower court, was fully litigated and decided. Claimant’s stipulation with respect to his lump-sum award became part of the judgment. The judgment was not appealed to this Court. As in Cole, “[t]he litigation has ended. An award has been paid . . . The parties are entitled to final judgment.” Cole, 716 P.2d at 613, 43 St.Rep. at 564.

Finally,

“According to Wheeler v. Carlson Transport (Mont. 1985), [217 Mont. 254,] 704 P.2d 49, 42 St.Rep. 1177, a final judgment of the Workers’ Compensation Court can only be reopened upon one of two conditions: 1) the benefits may be changed, reviewed, diminished or increased only when ‘the disability of the claimant has changed.’ Section 39-71-2909, MCA; and 2) a decision may be vacated and a new trial granted when the applicant’s rights are materially affected by newly discovered evidence which could not, with reasonable diligence, have been discovered in time for the trial. Section 25-11-102(4), MCA.”

Cole, 716 P.2d at 613, 43 St.Rep. at 564-565. Claimant has failed to allege the existence of either of these criteria.

Affirmed.

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


text:
    JOHN KIEHL NUTTER, Plaintiff and Appellant, v. THE PERMIAN CORPORATION, Defendant and Respondent.
    No. 86-309.
    Decided Nov. 13, 1986.
    727 P.2d 1338.

      LaRue Smith, Great Falls, for plaintiff and appellant.
    Church, Harris, Johnson & Williams, Steven Johnson, Great Falls, for defendant and respondent.
    Anderson, Beatty & Lee, Marc G. Buyske, Shelby, for Somont Oil, intervenor.
   OPINION AND ORDER DISMISSING APPEAL

John Kiehl Nutter appeals to this Court from an order of the District Court, Eighth Judicial District, Cascade County, dated June 6, 1986, denying John Kiehl Nutter’s motion for summary judgment, denying his motion for the imposition of sanctions against The Permian Corporation, abstaining from further proceedings in the District Court case in Cascade County, and transferring the cause to the District Court of the Ninth Judicial District in and for the County of Toole.

John Kiehl Nutter filed his complaint on October 8, 1985 against The Permian Corporation, a Texas corporation, alleging that in 1984 Permian had purchased oil from Nutter in the value of $5,780.79 which Permian has never paid and praying for judgment against Permian for the full value of the oil purchased together with interest. Permian filed its answer denying the allegation of the complaint on December 4, 1985.

The Cascade County District Court was informed and took judicial notice of an action pending in the District Court for the Ninth Judicial District, Toole County, entitled Somont Oil Company, Inc. v. John Kiehl Nutter and Peggy Faye Nutter, Cause No. 12680 in that court. The proceeds from the sale of crude oil, which Nutter sought in the Cascade County action, were the subject of the proceedings, in addition to other matters, pending in the Toole County District Court action.

In the Cascade County action, Permian moved to consolidate the Cascade County action with the Toole County District Court action. Nutter on the other hand moved the Cascade County District Court for summary judgment in his favor in the Cascade County action, and for sanctions against Permian for denying discovery.

In addition, Somont Oil Company, the plaintiff in the Toole County District Court action, moved in the Cascade County District Court action, pursuant to Rule 24(a), M.R.Civ.P., for leave to intervene as a plaintiff so that it could assert its claim for the proceeds against the defendant Permian Corporation.

On the Nutter motion for summary judgment, the District court in the Cascade County action determined that there were genuine issues of material fact still to be decided because the District Court could not determine that Nutter owned the oil purchased by Permian, nor that Nutter had the right to sell the oil to Permian or anyone else and that the evidence was insufficient for summary judgment.

The District Court also noted that the resolution of litigation pending between Somont Oil and Nutter in the Toole County District Court action would determine the respective rights of the parties, especially the right to the proceeds of the oil sale, which was the subject of the Cascade County District Court action.

The Cascade County District Court further determined that the District Court in Toole County was “uniquely equipped to determine the subject matter of the litigation pending before this Court, i.e., the entitlement, if any, of Plaintiff, John Kiehl Nutter, to the oil sales proceeds held by the Permian Corporation.” Moreover the Toole County District Court had personal jurisdiction over all of the parties and the venue was proper since the producing lands were situated in Toole County.

Therefore the Cascade County District Court, on June 6, 1986, denied Nutter’s motion for summary judgment, denied sanctions as having no merit, abstained from the exercise of further jurisdiction over the suit brought by Nutter against Permian in the Cascade County District Court, and ordered the transfer of the cause to the District Court for Toole County. Nutter appeals from that order.

The order of the District Court is correct. Genuine issues of material fact exist which render a summary judgment at this stage in favor of Nutter improper. There is no appeal from a denial of summary judgment.

An order changing the place of trial is appealable. Rule 1(b), M.R.App.Civ.P. However in this case it is plain from the record that a change of venue is required as provided in Section 25-2-201(3), MCA. A court or judge must change the place of trial “when the convenience of witnesses and the ends of justice would be promoted by the change.”

It is clear in this case that the subject matter of the pending action in Toole County incorporates the subject matter of the action brought by Nutter in Cascade County. The possibility of conflicting results, multiple actions, and duplicate trials meets the statutory qualification of Section 25-2-201(3), MCA, for the convenience of witnesses and the promotion of the ends of justice.

Moreover, appellant in this case has filed no brief or transcript related to these proceedings, and nothing in the record tells us we should reverse the order denying sanctions against Permian in the Cascade County District Court cause.

Permian has moved for an order dismissing the appeal and on the grounds stated foregoing, we determine that dismissing the appeal is proper. Nutter’s rights may be fully preserved in the Toole County District Court action.

ACCORDINGLY, IT IS HEREBY ORDERED that the above entitled appeal be and the same is hereby dismissed.

DATED this 13th day of November, 1986.

s/J.A. Turnage, Chief Justice

s/Fred J. Weber, Justice

s/Frank B. Morrison, Jr., Justice

s/John C. Sheehy, Justice

s/L.C. Gulbrandson, Justice

s/William E. Hunt, Sr., Justice