text:
    In re the MARRIAGE OF KATHRYN SIGNE GRAY, Petitioner and Appellant, v. DENNIS KEITH GRAY, Respondent and Respondent.
    No. 89-387.
    Submitted Dec. 7, 1989.
    Decided March 12, 1990.
    788 P.2d 909.

      Laura Christoffersen, Gallagher, Archambeault & Knierim, Wolf Point, for petitioner and appellant.
    Ken W. Hoversland, 'Scobey, for respondent and respondent.
   JUSTICE SHEEHY

delivered the Opinion of the Court.

Kathryn Signe Gray appeals the findings of fact, conclusions at law and order of the Fifteenth Judicial District, Daniels County, determining modification of child support. We reverse and remand for a modification of child support consistent with this opinion.

Kathryn and Dennis Gray were married on December 9, 1972. The couple had two children, Daniel, born February 19, 1975, and Tessa, born August 28, 1978. The parties were divorced on July 13, 1985. At the time of the dissolution, the court reserved its ruling regarding child support for a later date. On September 26, 1985, the District Court ordered Dennis to pay $103.71 per child per month as support for the children.

On July 29, 1988, Kathryn petitioned the District Court to modify the previous decree asserting that she had suffered a substantial and continuing change in circumstances that caused the previous order to be unconscionable. Since the time of the dissolution, Kathryn has suffered from cataracts, and a dysfunctional pancreas. In addition, the parties’ daughter needs extensive orthodontic work. Kathryn’s medical insurance fails to cover a substantial portion of these medical and dental expenses.

Kathryn works at the Sheridan County A.S.C.S. office where she earns $795.62 per month. The District Court determined Kathryn’s yearly income to be $9,547.44. Her employer provides health insurance for herself and her children. At the time of the hearing, Kathryn had outstanding bills of $4,279.00. She testified that she charged her medications and groceries and paid whatever she could on these bills each month. Furthermore, she testified that she has never been able to pay the full amount of her bills each month, and thus her medical and grocery bills continue to mount.

Dennis Gray leases two separate farms in Sheridan County, Montana, from Bob Scott. One farm is known as the Bob Scott place and the other as the Neil Grinker place. The Scott lease provided that Scott would supply the farm land, and the machinery necessary to do the farming. In turn, Dennis provided all the labor, repairs, spray, fuel and expenses necessary for the farms. Dennis testified that he paid all of his own taxes, social security, insurance, and unemployment insurance.

There is conflicting evidence on the amount of crops Dennis was entitled to under the lease with Scott. According to the Sheridan County A.S.C.S. office, Dennis is entitled to one-half of the crop on the Bob Scott place and one-third of the crop on the Grinker place. At the hearing, however, Dennis testified that the lease entitled him to only one-fourth of the crop from the Grinker place.

Dennis also testified that he received $5,406 in crop insurance. In addition he received $9,474 from the government farm programs. He earned approximately $4,000 in livestock sales and $850 from truck driving. The District Court, relying on Dennis’ tax returns, determined that he earned $11,835 after subtracting his expenses.

Applying the child support guidelines to the facts the District Court arrived at the following:

Income Father $ 9,547.44
Income Father 11,835.00
Combined Income $ 21,382.44
Percentage from table for two children: (27.1 divided by 2) + (33.5 divided by 2) = 30.3%
Mother’s yearly & monthly obligations $2,892.74 divided by 12 = $241.06
Father’s yearly & monthly obligations $3,586.01 divided by 12 = $298.83
$120.53 Mother’s monthly obligation per child:
$149.42 Father’s monthly obligation per child:

Furthermore, the District Court found Kathryn in need of assistance for the orthodontia and optometrical expenses of the children and that Dennis was capable of paying 50% of such expenses.

Kathryn appeals the District Court’s findings of fact, conclusions of law and judgment on the following issues:

1. The court erred in failing to attribute unsold 1988 durum wheat to Dennis Gray’s income when calculating the child support obligation owed to Kathryn Gray.

2. The court erred in finding that Dennis Gray received only 913 bushels of barley and 1,474 bushels of durum wheat from his farming operations in 1988.

3. The court erred in failing to consider Dennis Gray’s employment benefits when calculating the amount of child support due to Kathryn Gray.

4. The Court erred in failing to consider Dennis’ trucking income in calculating his child support obligation.

This Court has adopted the Uniform District Court Rule on Child Support Guidelines (1987), 227 Mont. 1, 44 St.Rep. 828 (Guidelines). The Guidelines are a suggested procedure for the determination of child support. Although the Guidelines are not expressly binding, when used by the District Court, all findings are reviewable. Absent a clear showing of abuse of discretion, the District Court will be upheld. In Re the Marriage of Mitchell (1987), 229 Mont. 242-245, 746 P.2d 598, 600; In Re the Marriage of Ensign (1987), 227 Mont. 357, 361, 739 P.2d 479, 482; In Re the Marriage of Ryan (1986), 222 Mont. 188, 191, 720 P.2d 691, 693. We find the District Court abused its discretion.

I.

The court erred in failing to attribute unsold 1988 durum wheat to Dennis Gray’s income when calculating the child support obligation owed to Kathryn Gray.

The District Court in its findings of fact and conclusions of law found that all of the assets held by Dennis are used to provide a primary source of income. Thus, the District Court concluded that these income producing farm assets are properly excluded as income to determine Dennis’ child support obligation. The District Court determined the unsold wheat harvested during 1988 to be one of the income producing assets. Kathryn alleges this unsold wheat is not an income producing asset which can be excluded from the child support calculations under the Guidelines. Guidelines, Part 4, 227 Mont. at 6-7. The District Court is correct in its assertion that income producing assets are excluded from the child support formula, however, the unsold grain is not an income producing asset. The unsold grain kept on hand is the fruit of Dennis’ labor for the 1988 year. It is his income for that year and should be considered regarding his ability to pay child support.

The District Court seems to infer in its findings that all of the 1988 wheat crop should be utilized by Dennis to cover his 1989 farm expenses. Clearly, the District Court is incorrect. The 1988 wheat crop is income for that year to be considered when determining his child support obligation. The 1989 farm expenses should be paid by the proceeds of the 1989 crop, farm program payments and crop insurance benefits, not the unsold 1988 wheat crop.

Dennis contends that his 1988 tax returns are a true reflection of his income. We find no merit in Dennis’ contention. His tax returns fail to list the 1988 wheat crop as income. This Court held in In Re the Marriage of Mitchell (1987), 229 Mont. 242, 246-47, 746 P.2d 598, 602, that when determining income under the Guidelines, it is disposable income of the parent, and not their income tax returns alone, which must be considered by the Court. Clearly the unsold wheat is disposable income, and thus properly placed under the Guidelines.

II.

The court erred in finding that Dennis Gray only received 913 bushels of barley and 1,474 bushels of durum wheat.

According to the A.S.C.S. records submitted at trial, Dennis is entitled to one-half of the crop from the Bob Scott place and one-third of the crop from the Grinker place. At trial, Dennis testified he was only entitled to one-fourth of the crop from the Grinker place. Despite this testimony, after the trial, Dennis once again met with the A.S.C.S. office and reasserted that he was entitled to one-third of the crop from the Grinker place for the year 1989. The District Court in its original findings of fact and conclusions of law agreed with Dennis and stated the following:

“The Respondent testified he had on hand. 1,474 bushels of durum wheat, and had sold 913 bushels of barley. The Respondent arrived at this figure from the crop insurance worksheet under which he receives 50% of all grain grown on the Scott lands and 25% of all the grains raised on the Grinker farm. The crop insurance report shows 2485 bushels of durum and 1496 bushels of barley raised on the Scott farm and 926 bushels of durum and 660 bushels of barley raised on the Grinker property. The Respondent further testified that he sold the barley for approximately $2.00 a bushel and that the durum was worth $4.75 a bushel at the present time.”

After the District Court handed down its order, Kathryn filed a motion to amend the findings, or a motion for a new trial alleging, among other things, that, the District Court incorrectly determined the percentage of crops Dennis received from the Grinker place.

In response to Kathryn’s motion, Dennis argued the discrepancies in the bushels amounted to only $304.50 in A.S.C.S. disaster and deficiency payments. According to Dennis, the $304.50 would be “de minimis” and thus the District Court should refuse to grant a new trial. The District Court agreed, and refused to grant a new. trial.

Later, on June 5, 1989, after a further review of the evidence, the District Court amended its findings, and stated the following:

“In its earlier findings and conclusions issued by the Court on March 31, 1989, the Court considered the Respondent’s income from the Grinker land to be one-fourth of the government benefits and now believes it should be one-third. The difference in income to be credited the Respondent is $304.50. Applying the Montana Child Support Guidelines for child support, 30.3% of the $304.50 should be payable in child support [304.50 x .303 = 92.26 yearly, divided by 12 = 7.69 per month].

“Therefore, the Court amends the Findings of Fact and Conclusions of Law dated March 31, 1989, and order Respondent to pay child support of $157.11 per child per month, or a total of $314.22 per month.”

While the District Court recalculated the child support obligation in regard to the government crop payments, the District Court failed to determine how the change from one-fourth to one-third would effect the amount of crops Dennis was entitled from the Grinker place. Ultimately the change to one-third would guarantee Dennis a larger share in the wheat and barley crops harvested from the Grinker place. To complicate matters even worse, now Kathryn argues that evidence exists in the A.S.C.S. records that Dennis is entitled to all of the barley and wheat raised at the Grinker place. Rather than make a determination on the amount of crops from the Grinker place, Dennis is entitled to, we remand to the District Court to calculate the amount of crops belonging to Dennis from the Grinker place. We also note, as previously stated, the District Court should include the unsold 1988 wheat from the Grinker place in its calculations.

III.

The court erred in failing to consider Dennis Gray’s benefits when calculating the amount of child support due to Kathryn Gray.

Section III, Part 1 of the Guidelines provides that the court should consider employment benefits as income to the parent if such benefits provide something that the parent would otherwise have to provide. 227 Mont. at 5. Dennis Gray testified that Scott provides him with housing, utilities, housing fuel and telephone expenses. The District Court, however, failed to consider these employment benefits in calculating Dennis’ child support obligations under the Guidelines’ formula. These employment benefits constitute gross income under the Guidelines, and should be considered when the District Court calculates Dennis’ ability to pay child support.

IV.

The court erred in failing to consider trucking income in calculating his child support obligation.

Dennis testified that he received $850 from his truck driving in 1988. That income is not reported on his 1988 income tax returns. The District Court disregarded Dennis’ income earned from his truck driving due to the fact that it has not been reported on his 1988 tax returns. While tax returns are a valuable tool in the determination of the child support, the District Court should have looked beyond the tax returns and found the $850 as income under the Guidelines. In re the Marriage of Mitchell (1987), 229 Mont. 242, 246-47, 746 P.2d 598, 602.

Accordingly, we reverse and remand for modification of child support consistent with this Opinion.

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


source: Caselaw Access Project

author: JUSTICE SHEEHY

license: Public Domain

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. GORDON THIEL, Defendant and Appellant.
    No. 89-489.
    Submitted Jan. 18, 1990.
    Decided March 13, 1990.
    788 P.2d 337.
    Mike Weber, Fairview, for defendant and appellant.
    Marc Racicot, Atty. Gen., Jennifer Anders, Asst. Atty. Gen., Helena, Phillip Carter, Deputy County Atty., Sidney, for plaintiff and respondent.
   JUSTICE SHEEHY

delivered the Opinion of the Court.

The defendant Gordon Thiel appeals from two orders issued by the Seventh Judicial District Court, Richland County, revoking a suspended sentence and a deferred sentence. We clarify the effect of the sentences imposed.

The defendant’s issue on appeal can be summarized as follows:

Must defendant serve the sentence imposed on him in cause No. 1952 consecutively to the revoked deferred and suspended sentences imposed on him in other convictions?

The defendant first appeared before the Seventh Judicial District in cause No. 1737, where he pled guilty to two counts of sexual assault. On May 23, 1984, the District Court Judge sentenced the defendant to serve seven years on each count to run concurrently. All seven years were suspended.

The defendant next appeared before the Seventh Judicial District on February 10, 1986, in cause No. 1902 where he pled guilty to the felony charge of issuing a bad check in violation of § 45-6-316, MCA. In that case, on March 17, 1986, the District Court deferred the imposition of sentence.

On May 20, 1986, the State filed a petition to revoke both the suspended sentence in cause No. 1737 and the deferred sentence in cause No. 1902. The District Court stayed the revocation proceedings until completion of a third matter, cause No. 1952, in which defendant was charged with 26 counts of sexual intercourse without consent. Following the trial, on July 22, 1987, a jury found the defendant guilty of all counts in cause No. 1952.

On October 23, 1987, the District Court sentenced the defendant in cause No. 1952. The District Court made no mention of cause Nos. 1737 or 1902, the pending petitions in those matters, or the sentences in those matters in the judgment and sentence entered in cause No. 1952.

On April 4, 1988, a hearing was held before the District Court on the State’s petition to revoke defendant’s sentences in cause No. 1737 and cause No. 1902. The court revoked both sentences and ordered the defendant to serve seven years in cause No. 1737 and three years in cause No. 1902, with both terms to run concurrently. In its order the court stated that the sentences and judgments in the revocation matter were “strictly independent from the sentence and judgment found in cause No. 1952.”

On June 3,1988, defendant filed a timely notice of appeal from the court’s revocation orders. He had applied for sentence review on May 11, 1988, prior to filing the notice of appeal, but waived his appearance before the Sentence Review Division on March 1, 1989. On July 27, 1989, defendant affirmed his appeal of the revocation order to this Court.

I

Must defendant serve the sentence imposed on him in cause No. 1952 consecutively to the revoked deferred and suspended sentences imposed on him in other convictions?

Defendant argues that the sentences received as a result of the revocation proceedings must be merged with the sentence imposed by the District Court in cause No. 1952. This argument is based on the defendant’s interpretation of Montana’s merger statute, § 46-18-401, MCA (1987), which states in pertinent part:

“Merger of Sentences. (1) Unless the judge otherwise orders:

“(b) whenever a person under suspended sentence or on probation for an offense committed in this state is sentenced for another offense, the period still to be served on suspended or probation shall be merged in any new sentence of commitment or probation.

We agree with defendant’s interpretation of § 46-18-401(1) (b), MCA (1987). The defendant was under a suspended sentence in cause No. 1737 when he received his sentence in cause No. 1952. He was also under a deferred sentence for an offense committed in this State in cause No. 1902 when the District Court sentenced him in cause No. 1952. The District Court judge in the judgment and sentence in cause No. 1952 did not mention either of the other convictions or the pending motions for revocation. We find no judge’s order to the contrary on October 23, 1987, and thus the previous sentences had merged with the sentence in cause No. 1952 at that time.

The State contends that while the District Court did not refer to the outstanding sentences in its order in cause No. 1952, the court in the subsequent revocation proceedings specifically ordered that “the sentence and judgment in this matter is strictly independent from the sentence and judgment found in cause No. 1952 entitled the State of Montana v. Gordon Thiel.” According to the State, by expressly stating that the sentences were independent, the District Court clearly intended that the sentences run consecutively. What the contention misses is that at the revocation hearing, it was too late for any provision that the sentences be served consecutively. Our decision in In re the Petition of Arledge (1988), 232 Mont. 450, 756 P.2d 1169 is factually distinguishable from this case and has no application here.

Accordingly, we reverse with the instructions that the sentences imposed in cause Nos. 1737 and 1902 should be served concurrently with the sentences in cause No. 1952.

CHIEF JUSTICE TURNAGE and JUSTICES HARRISON, HUNT and WEBER concur.


author: JUSTICE McDONOUGH

text:
    The STATE OF MONTANA, Acting by and Through the DEPARTMENT OF HIGHWAYS of the State of Montana, Plaintiff and Respondent, v. RONALD L. McGUCKIN, Betty Steger Wicker, Frederick C. Jandron, Colette Renee Jandron, and Michelle A. Jandron, all of whom claim some interest in this action, and Bank of Columbia Falls, Mortgagee, Defendants and Appellants.
    No. 89-273.
    Submitted Feb. 6, 1990.
    Decided March 16, 1990.
    788 P.2d 926.

      Dale L. McGarvey, Allan McGarvey argued, McGarvey, Heberling, Sullivan & McGarvey, Kalispell, for defendants and appellants.
    James A. Lewis argued, Dept, of Highways, Helena, for plaintiff and respondent.
   JUSTICE McDONOUGH

delivered the Opinion of the Court.

This appeal arises out of a condemnation action brought before the Eleventh Judicial District Court, Flathead County. Appellants are defendant land owners of commercial properties located in Coram, Montana, condemned by the Department of Highways of the State of Montana (Department). A final settlement of the amount of just compensation was reached after some 2Vz years of negotiation and progress toward trial. The landowners submitted an itemized Memorandum of Litigation Expenses, including attorney fees, which the Department opposed. A hearing was held on the litigation expense issue. Landowners now appeal the February 1,1989 order of the District Court denying them an award of attorney fees incurred to prove attorney fees. We affirm.

The landowners raise a sole issue on appeal: Did the District Court err in denying the defendant landowners an award of attorney fees for time and effort expended in securing an award of necessary litigation expenses in the condemnation action, including costs and attorney fees?

After making an initial offer of $69,800.00 which was rejected by the landowners, the Department filed a condemnation action an served a complaint upon the landowners. The landowners answered demanding just compensation in the amount of $700,000.00. To obtain possession the Department deposited $321,000 and the landowners withdrew the entire amount on March 4, 1985.

After various discovery and other proceedings the case was set for jury trial. On April 6, 1987 the Department served and filed a copy of its final settlement offer as required by statute. The final settlement offer provided for just compensation in the amount of $227,300.00 and included an agreement to pay all of the landowners’ litigation expenses up until April 6, 1987, which was accepted by the landowners.

The landowners filed their Memorandum of Litigation Expenses, demanding a total of $145,137.62 in litigation expenses. The Department opposed this amount and filed a Motion to Retax Costs. A hearing was held to determine the amount of necessary expenses of litigation. After the evidentiary hearing the Department offered $63,000 to the landowners for all litigation expenses. In their proposed findings the landowners increased their claim for necessary litigation expenses to $161,972.95.

The court entered its Findings, Conclusions and Order awarding the landowners $76,540.12 as necessary expenses of litigation. This amount included $3,359.50 as costs of taking depositions incurred in proving costs of necessary litigation expenses. The court denied the request for attorney fees incurred in proving the necessary costs and fees. Landowners moved to amend the Order to include additional costs including attorney fees incurred as a result of the dispute over litigation expenses. On February 1, 1989 the District Court denied this motion in part and granted it in part. It increased the award by $4,897.00 to $81,437.12 to include some additional costs and expenses. The court again denied the request for attorney fees incurred in proving the litigation expense. Landowners now appeal the court’s Order denying them attorney fees incurred in proving the necessary expenses of litigation.

The State’s power of eminent domain is controlled by Article II, Section 29 of the Montana Constitution which provides:

“Section 29. Eminent Domain. Private Property shall not be taken or damaged for public use without just compensation to the full extent of the loss having been first made to or paid into court for the owner. In the event of litigation, just compensation shall include necessary expenses of litigation to be awarded by the court when the private property owner prevails.”

The policy underlying the constitutional provision is to make the landowner whole after the State takes his property. This constitutional mandate is further embodied in the condemnation statutes:

“(1) The condemnor shall,- within 30 days after an appeal is perfected from the commissioner’s award or report or not more than 60 days after waiver of appointment of condemnation commissioners, submit to condemnee a written final offer of judgment for the property to be condemned, together with the necessary expenses of condemnee then accrued ....

“(2) In the event of litigation and when the private property owner prevails by receiving an award in excess of the final offer of the condemnor, the court shall award the necessary expenses of litigation to the condemnee.”

Section 70-30-305, MCA. (Emphasis added.) Necessary expenses of litigation are defined as:

. . reasonable and necessary attorney fees, expert witness fees, exhibit costs, and court costs.

“(2) Reasonable and necessary attorney fees are the customary hourly rates for an attorney’s services in the county in which the trial is held. Reasonable and necessary attorney fees shall be computed on an hourly basis and may not be computed on the basis of any contingent fee contract entered into after July 1, 1977.

“(3) Reasonable and necessary expert witness fees may not exceed the customary rate for the services of a witness of such expertise in the county in which trial is held.”

Section 70-30-306, MCA.

Both the statute, § 70-30-305(1), MCA, and the State’s final offer of settlement contemplate that the Department’s final offer will only include the landowners’ necessary expenses of litigation accrued until the date a settlement is reached. The Department contends that this precludes the landowners from receiving any award of costs and attorney fees incurred in proving their litigation expense, since all such expenses were incurred after April 6, 1987, the date the Department served its final offer and allegedly terminated the accrual of further expenses.

We disagree with this contention. In doing so we note that the situation presented here is a novel one not contemplated by the Constitution or the condemnation statutes. For us to strictly construe the terms of the settlement agreement as unequivocally precluding an award of any expenses incurred after the date of settlement could result in denying a landowner just compensation in direct contravention of Article I, Section 29 of the Constitution.

The question of whether to award costs and attorney fees on proving litigation expenses is fraught with problems. For example, two extreme situations can arise. First, the State could object to every expense item claimed, as they did here, even if all expenses claimed were reasonable, thereby forcing the landowners to incur additional expenses in securing their award. If they are precluded from recovering any additional expenses after the date the initial settlement was reached, there is nothing to deter the State from making such an unreasonable objection in all cases and hope the Court might agree with them. The end result could deny the landowner a net recovery. On the other hand, the landowner and counsel should not be allowed to benefit from making unreasonable and inflated expense claims that force the State to object and lead to further litigation upon which a landowner’s counsel can claim further fees. This would create an incentive for a landowner’s counsel to make unreasonable and inflated claims in order to perpetuate litigation on which they can claim fees and also place an additional unwarranted cost burden on the State in defending overstated claims.

Here, we have a situation somewhere between the two extremes illustrated above. Not only did the Department object to each and every item listed in the landowners’ Memorandum of Litigation Expenses, but the Department alleges, and the District Court agreed in part, that the expenses claimed in the landowners’ Memorandum were inflated and unreasonable as shown by the court’s initial award of $76,540.12 out of the $145,137.62 initially claimed by the landowners. Thus, while an award of litigation expenses may be required under § 70-30-305, MCA, to afford the landowner a net recovery, it is within the discretion of the district court to determine what expenses are “necessary” and “reasonable.” See § 70-30-306, MCA.

With respect to attorney fees incurred in proving attorney fees, it is apparent that a landowner’s counsel is acting primarily in his own interest rather than for the benefit of his client. The landowner’s condemnation award already secured, the outcome of the litigation expense hearing becomes important to the attorney as well as the client, and with respect to attorney fees awarded, any result secured by the services of the attorney would be for his benefit rather than the client. See, e.g., Glenview Park District v. Redemptorists Fathers of Glenview (1980), 89 Ill.App.3d 623, 45 Ill.Dec. 29, 412 N.E.2d 162.

We therefore conclude that an award of attorney fees incurred in proving the amount of attorney fees incurred in the litigation is generally not a necessary and reasonable expense of the landowner. In this regard, we endorse the District Court’s reliance on this Court’s decision in In re the Marriage of Bliss (1980), 187 Mont. 331, 609 P.2d 1209, where we stated:

“We reject the notion that the court may require one party to pay opposing counsel for his time spent in seeking justification of the fees he desires. The practice of law has its burdens as well as benefits, and this is one burden that counsel must bear without an expectation of compensation.” (Emphasis by the District Court.)

Bliss, 609 P.2d at 1213. In applying Bliss to the case at bar, the District Court also concluded:

“Obviously, if it is counsel’s burden to bear the costs of proving attorney fees then it is not the burden of the opposing party nor of the attorney’s own client. Thus the amount awarded to the Defendant landowner in this case will not [be] diminished as they may not be charged by their attorney for time spent by him to prove the amount of his fees.”

Order of February 1, 1989, p. 3. We also conclude that it is counsel’s burden to bear this expense and not the opposing party in such cases. However, in order to achieve an equitable result in extraordinary circumstances, the District Court in its sound discretion may require the opposing party to bear this expense. This would be a rare exception and not the rule. Here, the State may not be charged for attorney fees incurred by landowners’ counsel in proving their attorney fees. Nor may counsel charge this expense to his client, as this could result in depriving landowner/client of a net recovery.

However, we conclude that costs and attorney fees incurred in proving necessary and reasonable litigation expenses other than attorney fees are chargeable to the client and to the other party, taking into consideration the other party’s litigation expenses in defending other costs and attorney fees disallowed or unnecessary and unreasonable. The duty of determination of necessary and reasonable litigation expenses, is within the sound discretion of the district court, and will not be disturbed upon review absent an abuse of that discretion. Shors v. Branch (1986), 221 Mont. 390, 402, 720 P.2d 239, 246; Talmage v. Gruss (1983), 202 Mont. 410, 412, 658 P.2d 419, 420.

Here, the District Court’s findings of fact and conclusions of law contain an itemized analysis of each expense claimed and an allowance for each expense to the extent that it is “reasonable” and “necessary.” The court did not allow attorney fees incurred in proving attorney fees based on our holding in Bliss, but did allow the costs of deposing witnesses for proving the amount of attorney fees. We find no abuse of discretion.

AFFIRMED.

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


author: CHIEF JUSTICE TURNAGE JUSTICE SHEEHY,

text:
    In the MATTER OF WAGE CLAIMS OF RANDALL P. STEWART, Allen W. Copeland, Lionel F. McKnire, Greg W. Branter, Arthur Briscoe, Petitioners and Respondents, v. REGION II CHILD AND FAMILY SERVICES, Respondent and Appellant.
    No. 89-082.
    Submitted Dec. 12, 1989.
    Decided March 15, 1990.
    788 P.2d 913.

      Richard Larson, Waite, Schuster & Larson, Great Falls, for respondent and appellant.
    Timothy J. McKittrick, McKittrick Law Firm, Great Falls, for petitioners and respondents.
    Melanie A. Symons, Dept, of Labor & Industry, Janice Van Riper, Meloy Law Firm, Montana Residential Child Care Assoc., Nick Rotering, Dept, of Institutions, Cary B. Lund, Dept, of S.R.S., Patrick M. Driscoll, Chronister, Driscoll & Moreen, Mt. Council of Mental Health Centers, Helena, Joe R. Roberts, Mt. Assoc, of Independent Disabilities Services, Helena, for amicus curiae.
   CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Region II, Child and Family Services, Inc., appeals the First Judicial District Court, Lewis and Clark County, review of administrative hearings held by the Montana Department of Labor and Industry. The District Court reversed the agency’s determination that live-in employees were not entitled to compensation for time spent sleeping during supervision of residential care facilities and ordered the appellant to pay back wages, liquidated damages, costs, and attorney fees against the employer. We reverse.

ISSUES

Appellant Region II, Child and Family Services, Inc., raises the following issues.

(1) Did the District Court err in substituting its own findings of fact for those of the Montana Department of Labor and Industry?

(2) Did the District Court err in holding that the respondents’ wage claims were subject to the Montana Minimum Wage and Maximum Hour Act as well as the federal Fair Labor Standards Act?

(3) Did the District court err in holding that the claimants’ sleep time was compensable?

(4) Did the District Court err in rejecting interpretative opinions of the Administrator of the Wage and Hour Division of the United States Department of Labor?

(5) Did the District Court err in holding that Region II was not entitled to use the good faith defense of the federal Portal to Portal Act?

(6) Did the District Court err in holding that the claimants were entitled to damages, penalties, costs and attorney fees?

The claimants cross-appeal the issue of whether the District Court erred in failing to award attorney fees based on the claimants’ contingency agreement or in the alternative to apply a multiplier to the award.

FACTS

Region II, Child and Family Services, Inc., is a private, nonprofit corporation which, under contract with the State of Montana, provides residential care facilities for the developmentally disabled and multiple handicapped.

The wage claimants worked at Region IPs group homes between 1983 and 1985 as either full-time or weekend trainers and supervisors. Weekend trainers reported to the group home Friday afternoon and remained until Sunday evening. Full-time trainers covered from Sunday night through Friday morning. The full-time employees were on duty, and required to actively supervise clients, from about 7:00 a.m. until 10:00 a.m., when the clients left to attend training programs at the Great Falls Easter Seals Center. Typically, full-time trainers were off duty and free to leave the facilities until the clients returned from school. This four- to nine-hour period was the only time they were free to leave the group home. As the Center provided no training on Saturday or Sunday, weekend employees were required to be on duty throughout each day.

Region II required both types of employees to remain at the group homes overnight and provided sleeping facilities. The overnight period lasted from about 10:00 p.m. to 7:00 a.m. Employees who received five consecutive hours of uninterrupted sleep during this period were compensated only for the time they spent attending clients. If employees did not receive five consecutive hours of uninterrupted sleep, Region II paid for the entire overnight period. Region II established this overnight policy in compliance with two interpretative opinions, known as the White and Cohen letters, issued by the Wage and Hour Division of the United States Department of Labor. The claimants understood the overnight policy when they went to work for Region II.

The claimants filed individual wage claims with the Montana Department of Labor and Industry [hereinafter the Department] for the uncompensated sleep time Region II required them to be present at the group homes. The Department consolidated the claims and held an administrative hearing. The hearing examiner rejected the claims after applying the federal Fair Labor Standards Act [hereinafter F.L.S.A.] (codified at 29 U.S.C. §§ 201 through 219) and interpretative opinions of the Administrator of the Wage and Hour Division of the United States Department of Labor.

The claimants appealed to the First Judicial District Court for judicial review of the Department’s decision, claiming error in the Department’s use of the F.L.S.A. as opposed to the Montana Minimum Wage and Maximum Hour Act [hereinafter M.W.M.H.A.] (codified at §§ 39-3-401 through -410, MCA). The District Court reversed the Department’s decision. It agreed with the Department that the F.L.S.A. applied to the claims, but rejected the White and Cohen opinion letters as contrary to legislative intent and held that the F.L.S.A. regulations required that overtime be paid in the claimants’ situation. The District Court remanded the claims to the Department directing it to determine damages.

Region II petitioned the court for another review arguing that the good faith defense of the federal Portal to Portal Act [hereinafter P.P.A.] (codified at 29 U.S.C. §§ 216, 251 through 262) barred the wage claims under federal law. The District Court denied second review reasoning that even if the P.P.A. barred the claims under federal law, the M.W.M.H.A. would apply and produce the same result.

In compliance with the District Court’s order, the Department ordered Region II to pay the claimants a total of $99,393.50 in back wages and an equal amount in penalties as required by § 39-3-206, MCA. The Department found that it had no authority to grant the claimants’ request for attorney fees. The District Court also reviewed this agency ruling at Region II’s request and approved the Department’s decision. The District Court further ordered Region II to pay the claimants $13,000 in attorney fees to cover expenses incurred by the claimants while before the District Court.

Region II now appeals the District Court’s reversal of the Department’s determination of no liability, denial of retrial, review of the Department’s determination of damages and penalties, and judgment on attorney fees.

We note that Judge Gordon R. Bennett issued all the substantive orders and opinions that are now the subject of this appeal. The judge of record, Jeffrey M. Sherlock, handled only the final procedural matters following Judge Bennett’s retirement in December of 1988.

FINDINGS OF FACT

A district court’s review of an agency’s findings of fact is strictly limited. The reviewing court may affirm the agency’s findings. Section 2-4-704(2), MCA. It may clarify the agency’s findings so long as it does not substitute its judgment for that of the agency. Montana State Highway Patrol Officers v. Board of Personnel Appeals (1984), 208 Mont. 33, 39, 676 P.2d 194, 198. The court may overrule an agency’s findings of fact if they are clearly erroneous. They are not clearly erroneous if the record contains substantial credible evidence supporting the findings. City of Billings v. Billings Firefighters (1982), 200 Mont. 421, 430-31, 651 P.2d 627, 632. In no case may the district court substitute its own findings of fact for those of the agency. Section 2-4-704(2), MCA. The rules of agency review rely on the principle that the agency, and not the district court, is the finder of fact. If a factual question is essential to an agency’s decision, and the agency’s findings of fact are so insufficient that they cannot be clarified or are entirely absent, the district court should remand the case to the agency for appropriate findings.

In the present case, the District Court violated this principle by relying on its own findings of fact in at least two instances. The first instance centers on the Department’s Finding of Fact No. 11 which states:

“Allen Copeland was viewed by the respondent as working periods in excess of 24 hour duty. The other claimants were viewed by the respondent as residing on the premises for an extended period of time.” (Emphasis added.)

The District Court correctly noted that this finding is little more than a recitation of the testimony. However, instead of clarifying the finding or remanding it to the Department, the court rejected the finding and proceeded as though the Department had come to the opposite conclusion. The court utilized 29 C.F.R. 785.21, a regulation which applied only if the claimants were not on duty in excess of twenty-four hours and did not live on the employer’s property for an extended period. The court thereby substituted its own findings of fact for those of the Department in violation of section 2-4-704(2), MCA.

The second instance resulted from a disagreement between the Department and the District Court as to what law controlled. The Department determined that the F.L.S.A. governed the wage claims, but did not then look to the regulations propagated under the Act. Instead, it went directly to the interpretative opinions of the Administrator of the United States Department of Labor found in the White and Cohen letters. The District Court initially agreed that the F.L.S.A. controlled the claims, but analyzed the case under the F.L.S.A. regulations.

While the findings of fact necessary to apply the interpretative opinions and those necessary to apply the regulations are substantially the same, the District Court came upon at least one discrepancy. The court refused to apply one regulation, 29 C.F.R. 785.22, because the Department did not make the requisite finding that the claimants usually enjoyed an uninterrupted night’s sleep. The Department apparently never considered the issue since the interpretative opinions relied upon by the Department required no such finding. The District Court, however, proceeded as though the examiner had found that the claimants usually did not enjoy an uninterrupted night’s sleep. The court thereby interjected its own findings of fact into the proceedings.

The reviewing court has the duty to determine whether the agency applied the appropriate law and whether its findings of fact are sufficient to justify the agency’s rulings. When the court determines that the agency’ findings are insufficient or that the agency applied the wrong law, it may not use the opportunity to usurp the agency’s role as the trier of fact. We hold that the District Court committed reversible error by failing to remand this case to the Department for suitable findings of fact.

DOES THE M.W.M.H.A. APPLY?

The determinative issue in this case is whether employees, such as the present claimants, who are subject to the federal Fair Labor Standards Act may also rely on the Montana Minimum Wage and Maximum Hour Act. The problem arises from the interaction of the federal Fair Labor Standards Act, the Montana Minimum Wage and Maximum Hour Act, and the federal Portal to Portal Act.

In 1938, Congress passed the Fair Labor Standards Act to prevent the use of unfair trade practices in interstate commerce leading to “labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers . . . .” 29 U.S.C. § 202(a). To ensure a minimum living standard, the F.L.S.A. establishes a minimum hourly wage, 29 U.S.C. § 206, and a maximum workweek without overtime compensation, 29 U.S.C. § 207. Part of the Act’s enforcement mechanism allows employees to recover all unpaid wages plus an equal amount in liquidated damages for any violation of its wage and hour provisions. 29 U.S.C. § 216(b). Although nationwide in scope, the F.L.S.A. does not cover all employees. See 29 U.S.C. § 203(e); 29 U.S.C. § 213.

In 1971, the Montana Legislature enacted the Minimum Wage and Maximum Hour Act. Like the federal Act, the M.W.M.H.A. ensures workers a minimum living standard by setting minimum hourly wages, § 39-3-404, MCA, and maximum allowable work hours per week, § 39-3-405, MCA. Also like the F.L.S.A., the M.W.M.H.A. allows employees to recover unpaid wages plus up to 100% in liquidated damages, § 39-3-407, MCA; § 39-3-206, MCA. In Plouffe v. Farm & Ranch Equipment Co. (1977), 174 Mont. 313, 570 P.2d 1106, this Court held that in passing the F.L.S.A., Congress declined to preempt the entire field of wage and hour regulation. Therefore, employees not covered by the F.L.S.A. gained analogous rights from the M.W.M.H.A. Plouffe, 174 Mont. at 319-20, 570 P.2d at 1109. The federal and Montana Acts differ, however, in one important aspect.

Nine years after passing the F.L.S.A., Congress determined that expansive judicial interpretation of the federal Act had placed “wholly unexpected liabilities, immense in amount and retroactive in operation, upon employers . . . .” 29 U.S.C. § 251(a). To correct the situation, Congress passed the Portal to Portal Act giving employers a good faith defense to wage claims.

“In any action . . no employer shall be subject to any liability or punishment for or on account of the failure of the employer to pay minimum wages or overtime compensation under the Fair Labor Standards Act ... if he pleads and proves that the act or omission complained of was in good faith in conformity with and in reliance on any written . . . interpretation of [the Administrator of the Wage and Hour Division of the Department of Labor]. Such a defense, if established, shall be a bar to the action or proceeding, notwithstanding that after such act or omission, such . . . interpretation ... is modified or rescinded or is determined by judicial authority to be invalid or of no legal effect.”

29 U.S.C. § 259. Similarly, if the employer satisfies the court that it believed in good faith that the act or omission complained of was not a violation of the F.L.S.A., the P.P.A. authorizes the court to reduce or eliminate liquidated damages. 29 U.S.C. § 260.

In the present case, the parties do not dispute that the claimants are subject to the F.L.S.A. Enterprises covered by the F.L.S.A. include:

“[A]n institution primarily engaged in the care of the sick, the aged, the mentally ill or defective who reside on the premises of such institution ...”

29 U.S.C. § 203(r)(1). There is also no doubt that the P.P.A.’s good faith defense protects Region II. Although it did not apply the Portal to Portal Act, the Department did find as a conclusion of law that Region II had relied on the written interpretations of the Administrator of the Wage and Hour Division of the Department of Labor found in the White and Cohen letters in formulating its overnight policies. This reliance satisfies the requirements of the good faith defense thereby barring the claims under the F.L.S.A. The issue now is whether the claimants can fall back on the M.W.M.H.A. to recover wages and liquidated damages for their sleep time.

The District Court relied on one F.L.S.A. provision to find that they could. The federal Act defers to state laws which provide greater benefits.

“No provision of this chapter or of any order thereunder shall excuse noncompliance with any . . . State law . . . establishing a minimum wage, higher than the minimum wage established under this chapter or a maximum workweek lower than the maximum workweek established under this chapter . . .”

29 U.S.C. § 218(a). The District Court reasoned that since the claims are barred by the P.P.A. good faith defense, the claimants are entitled to no benefit under the federal law. Montana law has no provision comparable to the P.P.A. good faith defense and, therefore, provides the claimants with a higher minimum wage. According to F.L.S.A. section 218(a), therefore, the M.W.M.H.A. should apply to the wage claims.

The District Court, however, failed to consider the effect of a limiting provision in the Montana Act; the M.W.M.H.A. explicitly excludes employees covered by the federal Act.

“The provisions of [the M.W.M.H.A.] shall be in addition to other provisions now provided by law for the payment and collection of wages and salaries but shall not apply to employees covered by the Fair Labor Standards Act.”

Section 39-3-408, MCA (1985). (Emphasis added.) The Montana law defers to the federal law while the federal law defers to the Montana law. Like two overly-polite gentlemen standing before a single door, the State and federal provisions are caught in a classic “you first” impasse.

Both parties and five amici curiae have extensively briefed and argued this issue. Most of the authority offered, however, does not solve the current impasse and leaves this issue a question of first impression.

In Glick v. Department of Institutions (1973), 162 Mont. 82, 509 P.2d 1, cert. den. 414 U.S. 856, 94 S.Ct. 158, 38 L.Ed.2d 106, we relied on Montana law to determine the number of hours necessary to trigger overtime compensation, Glick, 162 Mont. at 89, 509 P.2d at 5, but applied the F.L.S.A. in determining liquidated damages, Glick, 162 Mont. at 90-91, 509 P.2d at 6. This case provides no guidanee on the present issue because we did not apply the M.W.M.H.A. We relied instead on the Montana constitutional and statutory provisions guaranteeing an eight-hour work day. Glick, 162 Mont. at 86-87, 509 P.2d at 4.

In Plouffe v. Farm Ranch Equipment Co., the F.L.S.A. exempted the employer from federal wage regulation. We held that by enacting F.L.S.A. § 218, Congress declined to preempt the entire field of wage and hour regulations and, therefore, the employee could still rely on the M.W.M.H.A. Plouffe, 174 Mont. at 319-20, 570 P.2d at 1109. Because the F.L.S.A. never applied to the employee, we did not need to decide if the employee was covered by both the federal and the Montana Acts.

In State v. Holman Aviation Co. (1978), 176 Mont. 31, 575 P.2d 923, the issue was whether M.W.M.H.A. § 408 prevented the State as assignee from pursuing an F.L.S.A. employee’s wage claim under the Montana Wage Payment Act. The parties asked this Court to consider the effect of M.W.M.H.A. § 408’s limiting provision on F.L.S.A. claims, but we did not reach that issue. We held only that § 408 does not apply to acts other than the M.W.M.H.A., but noted in passing that the section

“by its plain meaning provides merely that the provisions of this act . . . shall be applicable to set minimum wages and maximum hours for certain Montana employees in occupations not covered by the F.L.S.A., and that the F.L.S.A. shall apply to those employees which the federal act specifies.”

Holman Aviation, 176 Mont. at 34, 575 P.2d at 925. (Quotations omitted.)

Following Plouffe and Holman Aviation, the Montana Attorney General issued an opinion on whether state and local government employees are covered by both M.W.M.H.A. and F.L.S.A. 41 Op. Mont. Att’y Gen. No. 58 at 240 (1986). In concluding that they are not, the Attorney General relied on the plain meaning of M.W.M.H.A. § 408, the above quoted statement from Holman Aviation, and the 1973 Legislature’s refusal to amend the limiting provision of M.W.M.H.A. § 408 to read “shall not apply to employees covered by the Fair Labor Standards Act, provided that act requires a higher standard.” H.B. 279, 43rd Leg. (1973) (text available from the Archives of the Mont. Historical Society; emphasis indicates proposed addition). Interpretations of the law by the executive branch provide persuasive authority when acquiesced in by the legislature. Cornwall v. Department of Justice (Mont. 1988), 231 Mont. 58, 64-66, 752 P.2d 135, 139, [45 St.Rep. 429, 435]. In this case, however, the legislature did not acquiesce in the opinion, but, as is noted below, acted in 1987 to reverse its effect.

Like Montana authority, cases from other jurisdictions provide little authority for resolving the present impasse, though two cases deserve mention.

In Cosme Nieves v. Deshler (1st Cir. 1986) 786 F.2d 445, cert. den. 479 U.S. 824, 107 S.C. 96, 93 L.Ed.2d 47, the federal court considered whether F.L.S.A. § 218(a) allowed civilian employees of the federal government covered by the F.L.S.A. to .bring wage claims under the more beneficial provisions of Puerto Rican law. The court held against the claimants because the commonwealth law specifically excluded federal employees. Cosme Nieves, 786 F.2d at 452 (citing P.R. Laws Ann. tit. 29 § 246e(a)(2)). While superficially similar to the present case, Cosme Nieves is distinguishable; the claimants in that case were not barred from bringing their claims under the F.L.S.A. Cosme Nieves, 786 F.2d at 453.

In Webster v. Bechtel Inc. (Alaska 1980), 621 P.2d 890, the Alaska Supreme Court considered whether the F.L.S.A.' preempted the Alaska Wage and Hour Act. In holding that it did not, the court found no conflict between the liquidated damages provisions of the state and federal acts because the Alaska act contained no good faith defense similar to that in the Portal to Portal Act. The court noted that the provisions are complementary; the Alaska statute would provide greater benefits furthering the purposes of F.L.S.A. § 216(b). Webster, 621 P.2d at 904. The same analysis would apply to the present case if not for the limiting provision of M.W.M.H.A. § 408. Webster is distinguishable from the present case in that the Alaska act does not exclude employees covered by F.L.S.A, as does M.W.M.H.A. § 408. See Alaska Stat. §§ 23.10.050 through .150.

Like case law, public policy considerations are insufficient to solve the issue. Policy considerations weigh heavily on both sides. The obvious intent of both the F.L.S.A. and the M.W.M.H.A. is to ensure the health, efficiency, and general welfare of employees through enhancement and protection of wages and reasonable work-hour requirements 29 U.S.C. § 202; § 39-3-401, MCA. Allowing F.L.S.A. employees to fall back on the M.W.M.H.A. when the federal law bars their claims would increase the protection of the present claimants and similarly situated employees.

On the other hand, extending M.W.M.H.A. protection to F.L.S.A. employees would have serious adverse consequences. In passing the good faith defenses of the Portal to Portal Act, Congress recognized that without amendment, F.L.S.A. claims would “bring about [the] financial ruin of many employers . . . curtailing employment, and the earning power of employees . . . .” 29 U.S.C. § 251(a)(1). A number of amici curiae argued that these same results will occur in Montana if group home operators are forced to pay greater wages for overnight periods. The effect in this time of fiscal restraint is likely to be fewer employees and a curtailment in services to a deserving clientele.

Although much of the authority presented by the parties and the amici curiae does not resolve the question, the language of the Montana statute is determinative. The judicial function in construing statutes is to give effect to the intention of the legislature. Legislative intent is determined by first looking to the plain meaning of the statute. Thiel v. Taurus Drilling Ltd. (1985), 218 Mont. 201, 205, 710 P.2d 33, 35. Section 39-3-408, MCA (1985), clearly states that the M.W.M.H.A. “shall not apply to employees covered by the Fair Labor Standards Act.” In passing F.L.S.A. § 218(a), Congress gave the states the option of providing more beneficial wage and hour protection than that available under the federal law. The Montana legislature explicitly declined to exercise that option for employees already protected by the F.L.S.A.

To hold that the limiting provision of M.W.M.H.A. § 408 does not prohibit the application of the M.W.M.H.A. to F.L.S.A. employees would be to hold that it is superfluous. In interpreting a statute, we may not ignore what is found in it, § 1-2-101, MCA, but must endeavor to give effect to each provision of the statute, Darby Spar, Ltd. v. Department of Revenue (1985), 217 Mont. 376, 379, 705 P.2d 111, 113. If the legislature intended to allow F.L.S.A. employees to also take advantage of the M.W.M.H.A., the limiting provision of M.W.M.H.A. § 408 would not have been necessary; F.L.S.A. § 218(a) already serves that function. When it acts, the legislature is presumed to have full knowledge of existing laws, Thiel, 218 Mont. at 207, 710 P.2d at 36, and is presumed to have intended to change those laws, Cantwell v. Geiger (1987), 228 Mont. 330, 333-34, 742 P.2d 468, 470. Therefore, we must assume that the legislature was aware that F.L.S.A. § 218(a) would allow F.L.S.A. employees to fall back on the M.W.M.H.A. when it provided greater benefits. And we must assume that by enacting the limiting provision of M.W.M.H.A. § 408, the legislature acted to counter the effect of F.L.S.A. § 218(a).

The 1971 Legislature’s intent to exclude F.L.S.A employees from M.W.M.H.A. coverage is further evidenced by the recent amendment to M.W.M.H.A. § 408. The 1987 Legislature amended the section to provide that the minimum wage provisions of the M.W.M.H.A. “shall apply to an employee covered by the Fair Labor Standards Act if state law provides a minimum wage that is higher than the minimum wage established under the federal law.” Act approved April 9, 1987, ch. 446, § 2, 1987 Mont. Laws 1012. Again presuming that the Legislature intended to change the law, the pre1987 version of the Montana law under which the present wage claims arose must have excluded F.L.S.A. employees.

CONCLUSION

In passing the Portal to Portal Act, Congress noted that if it failed to amend the F.L.S.A., “employees would receive windfall payments, including liquidated damages, of sums for activities performed by them without any expectation of reward beyond that included in their agreed rates of pay . . . .” 29 U.S.C. § 251(a)(4). This seems particularly true in the present case; the claimants were aware of the overnight policy when they agreed to work for Region II. Imposing an unexpected penalty upon Region II seems particularly inappropriate when the group-home operator formulated its overnight policy to conform with the government’s interpretation of the wage and hour laws.

We hold that § 39-3-408, MCA (1985), excludes the claimants from coverage under the Montana Minimum Wage and Maximum Hour Act. Any claim under the federal Fair Labor Standards Act is barred by 29 U.S.C. § 259 of the Portal to Portal Act because Region II relied in good faith upon the interpretations of the Administrator of the Wage and Hour Division of the United States Department of Labor in formulating its overnight policies. Because the claims are barred, we need not reach any other issue presented by either party. The claimants are not entitled to back wages, liquidated damages, costs, or attorney fees.

Reversed.

JUSTICES HARRISON, WEBER, BARZ and McDONOUGH concur.

JUSTICE SHEEHY,

dissenting:

A resident worker should be paid though he is sleeping on the job, where demands of work may interrupt his sleep-time. It is because he is on call, that he may not sleep at all, and it is otherwise too onerous to keep time.

At base this is a simple case, which gets lost in all of the rhetoric of the majority opinion. These employees are on the job most of the 24 hour day. The employer deducted from their pay the hours in the “overnight,” from 10:00 p.m. to 7:00 a.m. If the worker got at least five consecutive uninterrupted hours of sleep, he was compensated only for the time he was interrupted by the clients. If he did not enjoy five consecutive uninterrupted hours, he was compensated for the entire overnight. The majority opinion holds that even though the employee, sleeping or not, is at the command of his employer, and his sleep-time is given over entirely to his employer, it is not necessary for the employer to compensate the employee fully for that time. The majority opinion is akin to holding that a fireman need not be paid for the time he is at the fire station unless he is fighting fires.

To reach their indefensible result, the majority have several hurdles to clear. The first is that the district judge made no findings in this case. The majority leaped this hurdle nicely by asserting that the district judge did make findings. The record, however, belies their position.

The district judge in this case expressly relied on the findings of the hearing examiner. He relied not only on the findings of the examiner, but noted particularly findings that the examiner did not make. The district judge based his decision then upon the findings as the hearing examiner expressed them. When the district judge first issued his conclusion in a formal order, the employers moved for a new trial before the District Court. In its order denying new trial, the District Court expressly rejected the implication that he had departed from the findings of the hearing examiner. The District Court stated:

“Respondent’s brief implies this court found the findings of the hearings examiner were either totally insufficient or clearly erroneous. Additionally, it argues that we made new findings of fact. While we did comment on the hearings examiner’s failure to address certain pertinent issues, we did not hold that any of his findings were in error nor did we determine that the findings were wholly inadequate. We explicitly based our opinion on ‘. . . the facts properly found by the examiner . . .’ Specifically, respondent claims we made a factual finding that petitioners were not on duty five to eight hours a day and that they were on overnight status for eight hours. To the contrary, these facts were found by the hearings examiner and made part of his findings of fact by reference. Finding of fact number 3 adopts a stipulation by the parties as to the duration and terms of the shifts worked by the petitioners. That stipulation clearly shows there was a period of time during the day where the petitioners were relieved of their duties and that they were generally on overnight status from 10 p.m. to 7 a.m.

“Respondent suggests additional findings of fact are necessary before a proper decision can be rendered in this case. We reiterate that our original opinion was based upon the findings of fact actually made by the hearings examiner. Furthermore, § 2-4-704, MCA, provides for remand for additional fact findings only if they are essential to the decision and if they■ were not made although requested. As we noted in the original decision, neither party raised exceptions to the hearings examiner’s findings of fact or questioned their sufficiency.” (Emphasis added.)

Memorandum and Order re motion for a new trial, pages 4, 5.

The majority opinion makes no reference to this clear statement of the District Court as to the facts it based its opinion on, nor does the majority opinion attempt to state the purported new findings made by the District Court outside those made by the hearing examiner.

In truth, the District Court followed carefully the rule that it is bound, as is this Court, by factual findings of the hearing examiner and stipulations by the parties. Hutchin v. State (1984), 213 Mont. 15, 688 P.2d 1257.

In Wage Appeal of Highway Patrol Officers v. Board of Personnel Appeals (1984), 208 Mont. 33, 676 P.2d 194, we upheld the District Court, stating that it had acted correctly when it merely translated the hearing examiner’s findings of fact without substituting its judgment for that of the agency on the weight of the evidence on questions of fact. That is precisely what the district judge did at bar.

These then are the facts on which the District Court acted, which were found by the hearing examiner or stipulated to by counsel and which bound not only the District Court but this Court:

“Petitioners worked as trainers or supervisors of developmentally disabled clients at groups homes between 1983 and 1985. Their work schedules varied somewhat, but generally they were required to be present at the homes 24 hours a day except for a period (anywhere from 4 to 9V2 hours) during which the clients were at a day school, and during which time the trainers were free to leave the homes and do what they chose. They were ‘on duty’ (i.e., required to be actively supervising the clients) from 6:30 or 7:00 in the morning before the clients left for day school, and from the time when the clients returned until 10:00 p.m. Uniformly it seems, the trainer’s workday was suspended from 10:00 p.m. to 7:00 a.m., even though he was sometimes scheduled to begin supervising at 6:30 a.m., and even though he was generally the only trainer in the home during this period. This period was called the ‘overnight.’ If during the ‘overnight’ the trainer enjoyed at least five consecutive uninterrupted hours, he was compensated only for the time he was interrupted by the clients. If he did not enjoy at least five consecutive uninterrupted hours, he was compensated for the entire ‘overnight.’ The petitioners here, however, claim entitlement to full payment (usually at time-and-half overtime rates) for all of the ‘overnight’ time, 10:00 p.m. to 7:00 a.m. regardless of interruptions, most of which was in excess of 8 hours per day, 40 hours per week, and 80 hours per 14-day period.”

Opinion and Order on Petition for Judicial Review, District Court, page 2.

In this dissent, I rely on those facts and none other in determining what the legal results should be.

The next hurdle over which the majority stumble is the effect and applicability of the Federal Fair Labor Standards Act to the facts of this case. The majority either missed the application by the District Court of the Federal Acts, or they fail in their own interpretation.

The Fair Labor Standards Act, 29 U.S.C. § 207 is clear. It provides:

“(a)(1) Except as otherwise provided in this section, no employer shall employ any of his employees ... for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.

“(j) No employer engaged in the operation of a hospital or . . . the care of the sick, the aged, or the mentally ill or defective who reside on the premises shall be deemed to have violated subsection (a) of this section if, pursuant to an agreement or understanding arrived at between the employer and the employee before performance of the work, a work period of fourteen consecutive days is accepted in lieu of the workweek of seven consecutive days for purposes of overtime computation and if, for his employment in excess of eight hours in any workday and in excess of eighty hours in such fourteen-day period, the employee receives compensation at a rate not less than one and one-half times the regular rate at which he is employed.”

The Department of Labor has issued implementing regulations which provide (29 Code of Federal Regulations § 785):

“Section 785.20 General

“Under certain conditions an employee is considered to be working even though some of his time is spent in sleeping or in certain other activities.

“Section 785.21 Less than 24-hour duty.

“An employee who is required to be on duty for less than 24 hours is working even though he is permitted to sleep or engage in other personal activities when not busy. A telephone operator, for example, who is required to be on duty for specified hours is working even though she is permitted to sleep when not busy answering calls. It makes no difference that she is furnished facilities for sleeping. Her time is given to her employer. She is required to be on duty and the time is worktime.” (Citing cases.)

With respect to the Federal Act itself, the District Court pointed out that the applicable portion was Subsection (j) of 29 U.S.C. § 207(a). The District Court concluded, correctly, that that subsection simply allows agreement where overtime compensation would be computed on the basis of an 8-hour day in a 14-day period rather than an 8-hour day in a 7-day period. The District Court further stated that the subsection did not apply here because there was no agreement beforehand between the employer and the employees. Instead, the only overtime evidence of agreement was in the “employment agreement,” exhibit 38 which provided:

“Overnight Agreement: In addition to your 40 hours per week you will also be providing overnight supervision 5 nights a week. You will be paid for any documented hours you have to be awake attending client needs.”

There is no other evidence of any agreement with respecting pay than the foregoing phrase. In making that finding, the court relied expressly on the record and it made no independent findings of its own.

Turning now to regulation § 785.21, which is quoted above, it is obvious that that regulation requires sleeptime be compensated by the employer, and since his time is given to the employer, he is working even though he is permitted to sleep.

Another regulation of possible application here is § 785.22 which states:

“Section 785.22 Duty of 24 Hours or More.

“(a) General. When an employee is required to be on duty for 24 hours or more, the employer and the employee may agree to exclude bona fide meal periods and bona fide regularly scheduled sleeping period of not more than 8 hours from hours worked, provided adequate sleeping facilities are furnished by the employer and the employee can usually enjoy an uninterrupted night’s sleep. If sleeping period is of more than 8 hours, only 8 hours will be credited. Where no expressed or implied agreement to the contrary is present, the 8 hours of sleeping time and lunch periods constitute hours worked. (Citing cases.)

“(b) Interruptions of Sleep. If the sleeping period is interrupted by a call to duty, the interruption must be counted as hours worked. If the period is interrupted to such an extent that the employee cannot get a reasonable nights sleep, the entire period must be counted. For enforcement purposes, the Divisions have adopted the rule that if the employee cannot get at least 5 hours’ sleep during the scheduled period, the entire time is working time.” (Citing a case.)

In examining the application of § 785.22, the District Court determined that there was no finding of fact by the examiner as to an agreement to exclude the sleeping period nor a finding that the employee usually enjoyed an uninterrupted night’s sleep. Moreover, the application of the regulation is conditioned upon a prior finding that the employee “usually enjoyed an uninterrupted night’s sleep.” Without that, the District Court found that § 785.22 did not apply. Finally, the regulation applies only if the employee is on duty more than twenty-four hours.

The District Court then turned its attention to the third regulation, 29 CFR § 785.23 which follows:

“Section 785.23 Employees residing on employer’s premises or working at home.

“An employee who resides on his employer’s premises on a permanent basis or for extended periods of time is not considered as working all the time he is on the premises. Ordinarily, he may engage in normal private pursuits and thus have enough time for eating, sleeping, entertaining, and other periods of complete freedom from all duties when he may leave the premises for purposes of his own. It is, of course, difficult to determine the exact hours worked under these circumstances and any reasonable agreement of the parties which takes into consideration all the pertinent facts will be accepted. This rule would apply, for example, to the pumper of a stripper well who resides on the premises of his employer and also to a telephone operator who has the switchboard in her own home.” (Citing cases.)

The District Court was critical of the foregoing regulation, and properly so. Through the regulation, the United States Department of Labor is taking a position that “any reasonable agreement” between the employer and the employee which “takes into consideration all the pertinent facts” will overturn the basic command, of the Wages and Hours Act. The District Court said “This regulation, on its face, reduces the clear command of the statute to a plea to be reasonable.” The hearing examiner failed to make any findings of any kind that would show that the agreement between the employer and the employees here was reasonable, or that the agreement took into consideration all the pertinent facts. The District Court was correct in determining that this regulation should be cautiously applied, and only after a well-reasoned analysis by the hearing examiner that it did apply. Nothing of that sort appears in this case.

Of the three regulations which might apply, therefore, the one which directly applies, and which the District Court utilized, was 29 CFR § 785.21. The majority criticizes the District Court for utilizing this regulation although on the undisputed facts of this case it is the only regulation which is applicable. In so deciding, the District Court was making a conclusion of law; the majority state instead that he was making findings of fact; how and in what way the application by the District Court of § 785.21 is making a finding of fact is not explained in the majority opinion.

We come now to the administrative letters, the basis of the “good faith” defense. The first is a 1981 letter from Henry T. White, Jr., deputy administrator of the Wage and Hour Division of the United States Department of Labor, to representatives of privately-operated community residences for the mentally retarded. In that letter, White answered three posed questions. The questions relate (1) to employees who maintain separate residences, (2) to a clarification of the five day, eight-hour rule contained in § 785.23, and (3) to the application of § 785.21 to relief employees who come in for two or three days. The letter candidly stated that with respect to relief employees, a departure from the general rule of § 785.21 would be tolerated by the Department “because of the home-like environment afforded to these employees in community residences, with private quarters and other amenities.”

The second letter was written in 1985 by Herbert J. Cohen, a deputy administrator of the same federal agency. Again the letter concerns itself with relief employees in community residences for the mentally retarded. It again stated a “special rule” for employees of community residences where they are offered by their employer “a home-like environment.”

As a Court, we should give absolutely no heed to the letters of these administrators. The conclusions in the letters fly in the face of the regulations of the Department, and the basic command of the statute relating to compensable time. If the Congress intended that a “home-like environment” could be substituted for wages in the form of money the Congress did not say so. I agree with the District Court that administrative rulings and opinions may be used to explain and clarify regulations, and may not be used to nullify them. Teamsters v. Daniel (1979), 439 U.S. 551, 99 S.Ct. 790, 58 L.Ed.2d 808.

Based on the foregoing considerations, the District Court, in its order of January 14, 1988, held that under the Federal Act as properly interpreted, the employees worked and were entitled to be compensated for “overnight” time. The employers moved the court for a new trial and brought to the attention of the District Court for the first time, the provisions of the federal “Portal to Portal Act” (PPA) and especially the provisions of 29 USC § 259(a) of the Act:

“In any action or proceeding based on any act or omission on or after May 14, 1947, no employer shall be subject to any liability or punishment for or on account of the failure of the employer to pay minimum wages or overtime compensation under the Fair Labor Standards Act of 1938, as amended . . ., if he pleads and proves that the act or omission complained of was in good faith in conformity with and in reliance on any written administrative regulation, order, ruling, approval, or interpretation, of the agency of the United States specified in subsection (b) of this section, or any administrative practice or enforcement policy of such agency with respect to the class of employers to which he belonged. Such a defense, if established, shall be a bar to the action or proceeding, notwithstanding that after such act or omission, such administrative regulation ... is modified or rescinded . . .”

As the District Court stated, Montana does not have a state counterpart to the federal PPA. The federal law, however, does provide that if a state law would provide greater benefits to an employee respecting either minimum wages or maximum work weeks, state law applies. 29 USC § 218(a). Therefore, if under PPA, the employees were barred from any relief against their employer, the provisions of the Montana Act would apply:

“Section 39-3-406(2). The provisions of 39-3-405 do not apply to:

“(q) An employee of an hospital or other establishment primarily engaged in the care of the sick, disabled, aged or mentally ill or defective who is working under a work period not exceeding 80 hours in a 14-day period established through either a collective bargaining agreement when a collective bargaining unit represents the employee or by mutual agreement of the employer and the employee where no bargaining unit is recognized. Employment in excess of 8 hours per day or 80 hours in a 14-day period must be compensated for at a rate of not less than 1V2 times the hourly wage rate for the employee.”

The foregoing statute creates an issue which is another hurdle which the majority opinion clears in the exercise of legerdemain. The majority point to § 39-3-408, MCA, which states that Montana’s law shall not apply to employees who are covered by the Fair Labor Standards Act. The majority also take note of 29 USC § 218(a) under which the federal act defers to state laws which provide greater benefits. It is obvious that §§ 39-3-405 and 39-3-406(2), MCA, provide employees of the type involved here with greater benefits since their employment is in excess of 8 hours per day per 14-day period. The majority have concluded that Montana’s superior benefits may not be recovered because of (1) the majority’s dubious interpretation of nonaction by the legislature (deriving legislative intent from nonaction), and (2) by engaging in some spurious fact finding of their own, not based on the record, that group home operators forced to pay lawful wages will curtail their services and discharge employees.

There is, however, a clear legislative intent here to which the majority close their eyes. It is the intent of the Congress, that when state law provides greater benefits to a worker, the state law should apply. That beneficent purpose should override any other consideration and should motivate this Court, as it motivated the District Court, to cite Tennessee C, I, & R Company v. Muscoda Local 123 (1944), 321 U.S. 590, 597, 64 S.Ct. 698, 703, 88 L.Ed 949, 956:

We are not here dealing with mere chattels or articles of trade but with the rights of those who toil, of those who sacrifice a full measure of their freedom and talents to the use and profit of others. Those are the rights that Congress has specially legislated to protect. Such a statute must not be interpreted or applied in a narrow, grudging manner.”

One of the great social advances of this century was the adoption by Congress of laws to protect employees so as to guarantee reasonable wages and hours in their working conditions. In the long run, it would be more advantageous to society that we refuse to allow any inroads that delimit this great social policy.

Moreover, under the interpretation by the majority of the effect of § 39-3-408, MCA, the intention of Congress that greater benefits under state law should apply would never come into effect. The decision of the majority has the effect of repealing entirely § 39-3-408 and vitiating any application of 21 USC § 218(a) to a Montana case. In holding that the employees are covered by the Fair Labor Standards Act, even though the employees can make no recovery under the Act, the majority eliminate any possibility for an employee whose job is part of commerce, to have any benefit from § 39-3-408. The duty of courts, especially an appellate court, is to give effect to statutes, not to nullify them by interpreting them out of existence. The majority remind one of the Walrus and the Carpenter, who ate the oysters they were supposed to protect.

I dissent and would affirm the decision of the District Court.

JUSTICE HUNT joins in the foregoing dissent of JUSTICE SHEEHY.


text:
    STATE OF MONTANA, Plaintiff and Respondent, v. PAUL ANTHONY HEINRICH, Defendant and Appellant.
    No. 89-012.
    Submitted on Briefs Dec. 14, 1989.
    Decided Feb. 14, 1990.
    As Amended on Denial of Rehearing April 18, 1990.
    788 P.2d. 1346.
    J. Douglas Alexander, Sidney, for defendant and appellant.

      Marc Racicot, Atty. Gen. and Patricia J. Schaeffer, Asst. Atty. Gen., Helena, Victor G. Koch, County Atty., Phillip Carter, Deputy, Sidney, for plaintiff and respondent.
   HONORABLE JOEL G. ROTH, District Judge, sitting in place of JUSTICE McDONOUGH,

delivered the Opinion of the Court.

The defendant appeals his conviction of felony assault from the District Court of the Seventh Judicial District, Richland County. During the jury trial, the trial court admitted evidence of other crimes committed by the defendant. The defendant, on appeal, contends that by admitting said evidence prejudicial error was committed which requires reversal. We agree.

PRE-TRIAL PROCEEDINGS

As the result of a reported shooting incident on August 11, 1987, at the defendant’s trailer house near Sidney, Montana, and the subsequent investigation, the Richland County Attorney on August 17, 1987, filed two criminal charges against the defendant: Count I, alleged assault, a felony, and Count II, alleged criminal possession of dangerous drugs (marijuana), a felony. Count I alleged that the defendant purposely or knowingly caused reasonable apprehension of serious bodily injury in another by use of a weapon when, on or about August 11, 1987, the defendant pointed a revolver in the direction of a vehicle occupied by Henry David LaFever and John P. Knoop and caused Henry David LaFever to believe he might be seriously injured or killed by a shot from the revolver, in violation of § 45-5-202(2)(b), MCA. Count II alleged that on or about August 11, 12 or 13, 1987, or any combination of those three dates, the defendant possessed a dangerous drug by having in his possession more than sixty grams of marijuana, in violation of § 45-9-102(4), MCA.

The defendant pled not guilty to both charges on September 16, 1987, and filed a notice of defense of justifiable use of force as to the assault charge.

The State on October 30, 1987, gave its written notice of intent to introduce evidence of other crimes (commonly referred to as the Just notice). Pursuant to the Just notice, the State sought a pretrial ruling from the trial judge which would allow the State to offer evidence of three other crimes committed by the defendant. The Just notice described the evidence would be: (1) a July 27, 1983, offense of criminal possession of dangerous drugs, a felony, to which the defendant pled guilty on November 16, 1983 (offered to prove the defendant’s motive, intent, absence of mistake or accident in the instant drug charge); (2) a July 29, 1983, offense of intimidation, a felony, for which the defendant was sentenced on January 4, 1984 (offered to prove defendant’s motive, intent, preparation, plan, absence of mistake or accident in the instant assault charge); and (3) evidence of the seizure of dangerous drugs in defendant’s trailer house on August 12, 1987 (offered to prove defendant’s motive, intent, absence of mistake or accident and to disprove defendant’s claim that the drugs belonged to another person in the instant drug charge).

The defendant’s attorney moved on February 11, 1988, to exclude the evidence of the other crimes. The defendant’s motion to exclude and the State’s Just notice were heard by the trial court on the morning of the first day of the jury trial, March 7, 1988.

The jury trial commenced on March 7, 1988. The roll call of the summoned jurors was completed and the pre-voir dire panel was seated in the jury box. The prospective jurors were then excused and the defendant changed his plea to guilty to Count II, criminal possession of dangerous drugs, a felony. After questioning the defendant, the trial judge accepted the guilty plea. There is no appeal from the defendant’s conviction of Count II.

The State’s Just notice and the defendant’s opposition thereto were then argued to the trial court. The judge denied the defendant’s motion to exclude the other crimes evidence and allowed the State to offer evidence of the defendant’s 1983 drug conviction and 1983 intimidation conviction and the evidence of the August 12, 1987, seizure of marijuana at the defendant’s trailer house and evidence of the August 13, 1987, seizure of the bag of marijuana thrown from the defendant’s car. The reasoning of the trial judge was that the evidence of the other crimes would go to prove the motive of the defendant in assaulting Henry LaFever with the revolver. The motive was to scare and intimidate Henry LaFever because the defendant thought Henry LaFever was telling the Sidney law enforcement people that he (the defendant) was in possession of and dealing in dangerous drugs. Additionally, the evidence of the other crimes would go to rebut the defendant’s asserted defense of justifiable use of force for self-defense.

The trial then proceeded with the voir dire of the jury panel, the exercise of peremptory challenges, the opening statements of counsel and the presentation of evidence.

THE EVIDENCE AT TRIAL

Twelve witnesses testified at trial (including the defendant) and certain documents and items of physical evidence were admitted. The evidence established the following chain of events.

On August 11, 1987, about 4:45 p.m., Henry LaFever and John Knoop drove in LaFever’s Chevy pick-up truck to the defendant’s trailer house which was located near Sidney, Montana, in Richland County. LaFever intended to confront the defendant about rumors that he (the defendant) had been spreading around town that LaFever called the police on him (the defendant) for possessing or dealing dangerous drugs. When LaFever and Knoop arrived at the defendant’s trailer house, no one was there. A few minutes later they observed the defendant’s 1967 black Camaro approaching the trailer house on the gravel road. The Camaro pulled into the yard and stopped. The occupants of the Camaro were the defendant (driving) and passengers Gisele LaFever (Henry’s sister who was also the girlfriend of the defendant) and Robert Wagner.

Wagner testified that LaFever said, “Get out of the car. I’m going to kill you, you little bastard.” LaFever testified, “I asked him [the defendant] why he’d been spreading around town that I’d called the police on him.” The defendant testified that he suspected LaFever of telling the police that he (the defendant) was dealing drugs and he told that to LaFever during the ensuing fight. LaFever grabbed the defendant around the neck as the defendant was getting out of his car and threw him on the ground and banged his head on the ground. A wrestling match resulted between the two men which lasted for a few minutes with LaFever getting the best of the defendant. LaFever is 6’ tall and weighs about 180 to 200 pounds, while the defendant is 5’7” and weighs about 135 pounds. Wagner picked up a piece of pipe to assure that Knoop would not enter the fracas. While the two men were wrestling on the ground, Gisele grabbed her brother by the hair and told him to stop and to leave.

Henry LaFever backhanded Gisele across her face. The defendant broke away from Henry and ran into the trailer house where he obtained a .22 caliber Ruger Bearcat revolver from his dresser and came back outside. In the meantime, Henry LaFever and Knoop were in the process of getting into LaFever’s truck to leave. There was conflicting evidence about whether the defendant ever pointed the revolver at LaFever or Knoop or the truck. Two shots were fired by the defendant. Some of the testimony was to the effect that the defendant was pointing the revolver in the direction of the truck when the shots were fired. Other testimony was that the defendant pointed the revolver upward toward the sky when he fired the two shots. There were no bullet holes found in LaFever’s truck and no one was injured by the shots. There was conflicting testimony about whether or not LaFever was wearing a knife on his belt. The defendant testified that he did not use the gun to intimidate LaFever about informing on him but rather the defendant shot the revolver to drive LaFever and Knoop off. The defendant testified that he was trying to convey a message to LaFever that he had a gun and it was loaded and if LaFever came back to hurt him he had some protection.

Immediately after LaFever and Knoop left, the defendant told Gisele to go to the neighbor’s house and call the sheriff. She did, and shortly thereafter Deputy Richland County Sheriff Charles Greenough arrived at the trailer house. He asked the defendant, Gisele and Wagner to write out statements of what had occurred. Greenough learned from the three that LaFever had assaulted the defendant. Nothing was said about defendant’s use of the revolver. Greenough then went to Knoop’s house and took statements from both Knoop and LaFever. From them he learned that a revolver had been fired by the defendant.

Deputy Greenough knew that the defendant was on parole from the Montana State Prison and so he contacted Jack Fasig, the local parole officer, and informed Fasig of the fact that the defendant had fired a gun. Because it was a violation of the defendant’s parole conditions for him to possess a gun and the location of the gun was unknown, Fasig obtained a search warrant for the gun from the local justice of the peace on August 12, 1987. The search warrant authorized a search of the defendant’s trailer house and his two vehicles. During the evening of August 12, 1987, Fasig and Greenough went to the defendant’s trailer house (no one was there) and searched for the revolver. They did not find it. However, they did find (and seize) in the trailer house marijuana roaches, a marijuana cigarette, marijuana seeds and drug paraphernalia (a pipe).

During the morning of August 12, 1987, Gisele went to the Sidney police and to the county attorney to discuss the fight. There was a dispute in the testimony about whether or not the defendant was with her at the police station and at the county attorney’s office.

Later the same morning (August 12), the defendant, Gisele and Wagner drove to a town about seventy miles from Sidney to take Wagner to a carnival where he was working. The defendant and Gisele returned to Sidney later that night and were spotted by police officer John Dynneson about midnight. Dynneson knew there was a search warrant outstanding for the gun and so he reported the sighting to Greenough. Greenough contacted Fasig who said he was on his way.

Greenough and Bill Anderson, a jailer, left by car to find the defendant’s car (the Camaro). They found it and stopped the defendant. The defendant was driving and Gisele was a passenger. Greenough told the defendant that Fasig had a search warrant for the car to search for the gun and that Fasig was on his way. Greenough asked the defendant to give him the gun if he had it, and the defendant opened the trunk of the car voluntarily and produced the holstered revolver and placed it on the top of the car trunk as ordered by Greenough. Fasig had not yet arrived and it was cold so Greenough allowed the defendant and Gisele to get back into the car. The defendant and Gisele sat in the car about fifteen minutes and then unexpectedly and without permission from Greenough drove away quickly. The holstered revolver fell off the trunk and was retrieved by Anderson who then with Greenough gave chase. Fasig arrived about that time and both cars then pursued the defendant’s car for three or four miles but were unable to catch the car. However, during the chase, Greenough observed the defendant’s car stop momentarily and then continue on. After Greenough lost the defendant’s car, he returned to the place on the road where he had seen the defendant stop and found a bag of marijuana near the road.

Upon inspection of the .22 caliber Ruger Bearcat revolver, there were six cartridges in the cylinder; four live rounds and two empty rounds.

During Greenough’s pursuit of the defendant’s car, Greenough contacted the sheriff’s office in McKenzie County, North Dakota, for assistance in stopping the defendant. Later on August 13, 1987, North Dakota Deputy Sheriff Lloyd Clock found the defendant’s car empty and locked at a well site and reported the same to Greenough. The defendant’s car was impounded and towed into Sidney.

During the chase of the defendant’s car and when the car momentarily stopped, not only was the bag of marijuana thrown out, but the defendant got out and hid in the bushes while Gisele drove off. Gisele, after abandoning the car at the well site, went to a friend’s house and stayed there. A few days later the defendant telephoned her and Gisele then borrowed a car, picked up the defendant and they left the Sidney area. The defendant was later apprehended in the borrowed car in Park City, Montana.

EVIDENCE OF OTHER CRIMES

During the trial and over the continuing objections of defendant’s lawyer, evidence was admitted about the other crimes committed by the defendant. The trial judge gave the cautionary instruction as the evidence was presented and also gave it as a final instruction as required by the Just case. Fasig testified about executing the search warrant for the revolver at the defendant’s unoccupied trailer house on August 12, 1987. Although the revolver was not found, Fasig testified about finding and seizing marijuana roaches, a marijuana cigarette, marijuana seeds and drug paraphernalia (a pipe).

Also during trial, Greenough testified about finding the bag of marijuana (containing over 200 grams) along the side of the road where the defendant had momentarily stopped on August 13, 1987.

It is to be noted that the defendant had pled guilty to the drug charge at the beginning of this trial. There was no need for the State to present evidence relating to the drug charge as the defendant had admitted his possession of dangerous drugs.

We fail to understand how the August 12 and August 13 marijuana evidence is related or similar to the assault charge or how it tends to establish a common scheme, plan or system. The prejudice to the defendant by allowing the August 12 and 13 marijuana evidence to be admitted to prove the assault offense outweighs its probative value and is not harmless.

Also during the trial, Fasig testified about the defendant’s July 27, 1983, dangerous drug offense and his conviction thereof. In applying the four factors set out in the Just case to this prior crimes evidence, we consider the similarity of it to the present assault charge and find no similarity; the nearness in time of the 1983 drug conviction to the 1987 assault and find over four years intervened; the tendency of the 1983 drug conviction to establish a common scheme, plan or system and find no common scheme, plan or system. The prejudice to the defendant by admitting the prior 1983 drug conviction when it does not satisfy the four factors test of the Just case is evident and is not harmless error.

Finally, during the trial, both Fasig and witness Loren James Lowry testified about the defendant’s July 29,1983, felony intimidation offense. The testimony was to the effect that the defendant had intimidated a person named Steve Herman because the defendant thought Herman had informed (about having drugs) on either the defendant or the defendant’s then common-law wife, Pam Junso. Fasig testified that the defendant had threatened to kill Herman if Herman testified against the defendant in connection with the July 27,1983, drug offense. Lowry testified that the defendant wanted to know from Herman who had informed on him and there was an altercation between the defendant and Herman (a shoving match) but no fists were swung and no weapon was involved and no threats were made by the defendant. Unfortunately, a certified copy of the intimidation charge and conviction was not made part of the record to clarify whether it was the defendant or the defendant’s common-law wife on whom Herman had presumably informed.

Again, applying the four factors of the Just case to the defendant’s 1983 intimidation offense, we find the similarity of the intimidation offense to the present assault charge to be lacking (the victims in the two offenses were different, no weapon was used in the intimidation offense whereas a revolver was used in the assault, and the defendant sought out Herman in 1983 whereas LaFever sought out the defendant in the present assault offense); the 1983 intimidation offense was over four years prior to the present assault charge; and the 1983 intimidation offense does not tend to establish a common scheme, plan or system. The prejudice to the defendant in allowing the 1983 intimidation evidence is clear and is not harmless.

Rule 404(b) of the Montana Rules of Evidence provides:

“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.”

The Just case requires that the trial judge consider the proposed other crimes evidence at a pretrial hearing in light of the four factors set forth in Just: similarity of crimes; nearness in time; tendency to establish a common scheme, plan or system; and that the probative value of the other crimes evidence is not substantially outweighed by prejudice to the defendant. Other cases discussing the required Just case analysis are State v. Case (1980), 190 Mont. 450, 621 P.2d 1066, and State v. Hansen (1980), 187 Mont. 91, 608 P.2d 1083, aff’d after remand, 633 P.2d 1202, 38 St.Rep. 1541.

In light of our discussion above, we conclude that the trial judge erred in his pretrial ruling which would permit the State to present the other crimes evidence, and there was prejudicial error when the other crimes evidence was admitted during trial.

CONCLUSION

This case is an example of the State presenting other crimes evidence which does not satisfy the strict requirements of the Just decision. The admission of other crimes evidence is the exception and not the rule. The defendant was prejudiced by the other crimes evidence allowed into evidence in this case and his conviction of felony assault is reversed. This cause is remanded to the District Court of the Seventh Judicial District for a new trial.

CHIEF JUSTICE TURNAGE and JUSTICES HARRISON, SHEEHY, HUNT and WEBER and the HON. TED L. MIZNER, District Judge, sitting in place of JUSTICE BARZ, concur.