author: MR. JUSTICE GULBRANDSON

text:
    CARL A. ROWLAND, Plaintiff and Appellant, v. FORREST L. KLIES, Defendant and Respondent.
    No. 85-552.
    Submitted on Briefs April 24, 1986.,
    Decided Oct. 6, 1986.
    726 P.2d 310.

      Small, Hatch, Doubek & Pyfer, Richard J. Pyfer, Helena, for plaintiff and appellant.
    Poore, Roth & Robinson, Douglas A. Buxbaum, Butte, for defendant and respondent.
   MR. JUSTICE GULBRANDSON

delivered the Opinion of the Court.

Carl Rowland appeals a Jefferson County District Court order granting partial summary judgment to the respondent, Forrest Klies. The two issues on appeal are, (1) whether the District Court erred in granting summary judgment to respondent where the Judge previously sitting on this case had denied respondent’s motion for summary judgment; and (2 ) whether the District Court properly entered partial summary judgment in respondent’s favor. We affirm.

In the summer of 1979, appellant was camping out in the mountains near Basin, Montana, on the property of his friend, Leon Dolence. Appellant is, and was at that time, suffering from progressive muscular atrophy. Appellant had quit his job in 1978 because of this disability. In the summer of 1979, Dolence told appellant that appellant could build a cabin at any place on Dolence’s land and stay there for the rest of his life. During that summer, appellant first met the respondent, Forrest Klies, and they entered into the agreement which gives rise to this appeal. Appellant and respondent orally agreed that respondent would build and furnish a cabin on respondent’s land for appellant to live in for the rest of his life. The respondent’s land was located very near to Dolence’s property. In return, appellant, to the best of his ability, was to prevent people from poaching, trespassing, cutting firewood, and damaging respondent’s other cabins on respondent’s property. Appellant also stated that he was obligated, when he was able to do so, to check respondent’s other cabins in the area. Appellant understood that the respondent would occasionally come and stay with him at appellant’s cabin. Appellant states that he fully informed respondent of his disability prior to entering this agreement and that respondent agreed that appellant would fulfill his obligations “to the best of his abilities” knowing that appellant’s disability would hamper his physical activities. Upon his agreement with respondent, appellant abandoned his plans to construct a cabin on Dolence’s property.

Respondent’s version of the agreement is somewhat different from appellant’s. Respondent concedes that under the agreement he was to provide a cabin for appellant so long as appellant lived up to his obligations. According to respondent, appellant’s obligations were to maintain trespassing signs on respondent’s property, keep all trespassers off the property, and periodically inspect respondent’s property. The main difference in the parties’ versions of the agreement is respondent’s assertion that appellant was to maintain trespassing signs on the property. According to respondent, the parties also understood that respondent would occasionally stay in the cabin.

The respondent offered this arrangement to appellant in the summer of 1979. In November or December of 1979, the appellant first moved into a mountain cabin and began living there under the above-described agreement. In November 1979, respondent sold an option to buy to his brother. The respondent wrote out a document embodying the option to buy and in December 1979, he recorded that document with the Jefferson County Clerk and Recorder. The document refers to the agreement between appellant and respondent and states that appellant “has been granted permission to live out his life in a good livable cabin at no charge and not to pay any property taxes on and or house maintenance cost. In turn, Carl Art Rowland will do his best at seeing to it that no one bothers any of’ respondent’s property.

As stated, appellant moved into a cabin in November 1979, under his agreement with respondent. That cabin had been constructed by respondent and had been sold, with a small lot, to another individual. Apparently with that individual’s consent, appellant was to live there until respondent constructed another cabin for appellant to live in. In the spring of 1980, respondent began constructing another cabin for appellant to live in. Appellant began living there in the fall of 1980 and respondent occasionally stayed with him there. In the fall of 1980, appellant and respondent began to have disagreements over the living arrangement. Respondent testified by deposition that appellant simply was not fulfilling his end of the agreement. The parties’ differences eventually resulted in appellant signing another agreement in November 1980 which stated that appellant would only stay on respondent’s property until July 1981. Appellant testified by deposition that respondent gave him the choice of either immediately leaving the premise or signing the document. In July 1981, appellant vacated the premises.

The second agreement was the result of an incident which had caused a further split between the parties. Both parties agree that appellant told two of respondent’s acquaintances that respondent had made very derogatory remarks about them. Respondent denied making the derogatory remarks. Respondent acknowledged that this incident was the reason he asked appellant to vacate the premises. Appellant asserted that he only repeated exactly what respondent had said. Appellant agreed that shortly after this incident the respondent wanted him to leave.

In May 1982, appellant filed his first complaint against respondent. Respondent moved for, and the District Court granted, summary judgment as to all issues of the first complaint except for one count of the complaint which alleged that respondent had negligently damaged appellant’s vehicle. In April 1983, appellant filed an amended complaint against respondent which set forth numerous alternative theories of recovery. The amended complaint again alleged that respondent had negligently damaged appellant’s vehicle. The remaining eight counts of the amended complaint arose from appellant’s agreement with respondent to live on respondent’s property. The respondent renewed his motion for summary judgment as to all issues of the amended complaint except that issue alleging that respondent had negligently damaged appellant’s vehicle. In December 1983, the Jefferson County District Court, the Honorable Frank M. Davis presiding, denied respondent’s motion for summary judgment, stating:

“The court, in denying Defendant’s renewed Motion for a summary judgment, has done so despite a feeling that the Amended Complaint appears to state no new facts — only the same facts under different legal labels.
“All courts are reluctant to summarily deny an aggrieved party of the right to have the merits of his grievances determined by the trier of fact. But he must have facts which the jury can apply to a tenable legal theory.
“The only disputed questions of fact in this case are some of the minor ones on the issue of just what the employment arrangement between the Plaintiff and the Defendant was. There is a genuine issue of fact as to Count V of the original Complaint.
“Thus, this case will be set for trial, with the caveat that the Defendant could very possibly be entitled to a directed verdict at the close of the Plaintiff’s case.
“This Court, as it did in the ‘life estate’ summary judgment, has gone the last mile to keep this Plaintiff in court for equitable reasons. But even equity must be grounded not on sympathy, but on tenable legal principles. “

In August 1984, Judge Davis voluntarily recused himself from further proceedings in this case upon appellant’s request. In the memorandum to the order recusing himself, Judge Davis stated:

“In withdrawing from this cause, this Judge does not concede that he has in any way prejudged the Plaintiff’s case. The record clearly demonstrates otherwise. The formal motion to disqualify for cause is not only untimely under the statute, but it is wholly without merit. Even the certificate of good faith is suspect in light of the record. The disqualification statute has been sorely abused. Nevertheless, this Judge feels that he should not continue to preside where a party has even a groundless feeling that he has been and would be treated unfairly. This Judge feels that to continue to preside would not be in the best interest of either party.
“The fact is, this Judge may have committed error already in an effort to keep this Plaintiff in Court, but the wisdom of this decision will have to be decided by another Judge or tribunal.”

Subsequently, the Honorable Byron Robb, District Judge, assumed jurisdiction over this case. In January 1985, Judge Robb issued an order “ [T]hat plaintiff’s counsel shall forthwith complete a proposed pre-trial order which will replace, not supplement, the pleadings herein . . .” (Emphasis added. ) For unexplained reasons, the pretrial order, containing eighteen appellant’s contentions and incorporating the contentions set forth in the amended complaint, was drafted to supplement the pleadings, in direct contravention of the January order. In July 1985, the respondent again moved for summary judgment on all claims contained in the amended complaint except that claim alleging that respondent had negligently damaged appellant’s vehicle. In August 1985, Judge Robb granted respondent’s motion for partial summary judgment. Subsequently, the parties reached an out of court settlement for $1,300 on the one remaining claim, the automobile damage claim, which had survived the summary judgment motion.

The first issue is whether the District Court improperly granted summary judgment where Judge Davis, who had previously sat on this case, had earlier denied a motion for summary judgment. Appellant argues that Judge Davis’s ruling denying summary judgment formed “the law of the case” and that Judge Robb abused his discretion in subsequently granting summary judgment. In this regard, this Court has stated:

“Under the ‘law of the case’ principle, judges of coordinate jurisdictions sitting in the same court and in the same case may not ordinarily overrule the decisions of each other. It is simply a rule of practice that articulates the sound policy that when an issue is once judicially determined, that should be the end of the matter as far as judges and courts of coordinate jurisdiction are concerned. The ‘law of the case’ is not an imperative; does not go to the power of the court; and does not mean that a court does not have discretion to reconsider a ruling made by another judge in the same case.” (Citations omitted.)

Mereness v. Frito-Lay, Inc. (Mont. 1985), [216 Mont. 154,] 700 P.2d 182, 183-184, 42 St.Rep. 716, 718; quoting State u. Carden (1976), 170 Mont. 437, 440, 555 P.2d 738, 740. In this case, we hold that the District Court did not abuse its discretion simply because it reconsidered Judge Davis’ denial of summary judgment and then granted summary judgment. The District Court had additional deposition information upon which to base its order granting summary judgment. In this situation, we find that there was no error under this issue.

The second issue is the propriety of the District Court’s granting summary judgment.

“The standard of review is clear. Summary judgment is only proper under Rule 56 (c), M.R.Civ.P., where the record discloses that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. “ Mutual Service Cas. Ins. Co. v. McGehee (Mont. 1985), [219 Mont. 304,] 711 P.2d 826, 827, 42 St.Rep. 2038, 2039-2040. Using this strict standard, we will examine the eight theories of recovery which were dismissed by the District Court order granting summary judgment. Because the pre-trial order, containing appellant’s eighteen contentions, supplemented the pleadings rather than replacing them, it has been a time-consuming chore to fairly summarize the issues raised. We have summarized the claims as: (1) a claim for a violation of the employer-employee relationship; (2) a claim for a violation of Section 39-2-303, MCA, which deals with employer deception and misrepresentation; (3) a claim for negligent misrepresentation; (4) a claim for the negligent infliction of mental distress; (5) a claim for a breach of the covenant of good faith and fair dealing; (6) a claim for promissory fraud; (7) a claim for fraudulent misrepresentation; (8) a claim for wrongful interference with peaceful possession of property.

We address the first two claims listed above together as both claims require a finding of an employment relationship. Summary judgment would be proper as to both these claims if, as a matter of law, there was no employment relationship between the appellant and the respondent. In February 1983, after appellant had filed his first complaint but prior to the filing of the amended complaint, appellant filed a sworn affidavit with the Jefferson County District Court Clerk of Court. In that affidavit, appellant swears that he was not “employed” by respondent; that the use of the word “hired” in his complaint was not intended to be defined as hired in the sense of an employer-employee relationship; that he was not hired as an employer hires an employee; that he merely agreed to occupy the cabin and do his best to keep off trespassers and poachers; and that the word hired as used in the complaint did not mean that [respondent] was paying a wage for services rendered by [appellant]. The District Court, in considering this affidavit, stated that it “seems to me to work a fraud upon the court for plaintiff to now claim damages from any sort of employment status. “ We also question the propriety of allowing appellant to now assert that there was an employment relationship.

“The rule is well established that during the course of litigation a party is not permitted to assume or occupy inconsistent and contradictory positions, and while this rule is frequently referred to as ‘judicial estoppel,’ it more properly is a rule which estops a party to play fast-and-loose with the courts . . .

“Although the rule . . . may be regarded as a form of estoppel, it is not strictly one of estoppel, but partakes rather of positive rules of procedure based on manifest justice and, to a greater or lesser degree, on considerations of the orderliness, regularity, and expedition of litigation . . .

“. . . those elements such as reliance and injury, or prejudice to the individual, which are generally essential to the operation of equitable estoppel, may not enter into judicial estoppel, at least not to the same extent ... In order to work a judicial estoppel, the position first assumed must have been taken knowingly and free of inducement by the opposite party.

“. . . the doctrine of judicial estoppel applies with particular force to admissions or statements made under sanction of oath . . . “

31 C.J.S. Estoppel, Section 117B, pgs. 623-627, (1964).

Although there is not an abundance of case law on this rule, various courts have employed it. In Hurd v. DiMento & Sullivan (1st Cir. 1971), 440 F.2d 1322, the federal court of appeals held that the plaintiff was estopped from claiming that the defendant attorneys had agreed to represent her. The estoppel was predicated upon the plaintiff’s letter written in support of a motion for continuance, that stated that one defendant (a member of the firm) was unable to represent her because of prior commitments. In LaChance v. McKown (Tex.Ct.App. 1983), 649 S.W.2d 658, 660, the court recited the Texas rule on judicial estoppel:

Judicial estoppel may arise when a person has taken a position or asserted a fact under oath in a judicial proceeding contrary to a position he is taking in the present litigation . . . The rule’s purpose is to suppress fraud and prevent abuse of the judicial process by deliberate shifting of positions to suit the exigencies of a particular action, and it will not be applied when the previous act or statement is uncertain or based on undetermined facts, but only when it is clear and certain. (Citations omitted.)”

We agree with the goal stated above.

This Court has stated that, “[t]he rule is that parties are bound by and estopped to controvert admissions in their pleadings.” Fey v. A.A. Oil Corporation (1955), 129 Mont. 300, 323, 285 P.2d 578, 590. We find no reason why this rule should not be extended, at least in the peculiar context of this case, to estop a party from controverting admissions in his affidavit. Especially where it appears that appellant is shifting his position on the issue of an employment relationship simply to suit his legal maneuvering at the time. When appellant filed the affidavit, he was advancing a property law theory that respondent had conveyed a life estate in the cabin to him. He apparently disclaimed an employment relationship fearing it would defeat his life estate theory. Appellant changed his position after the District Court rejected the life estate claim, holding such an estate cannot be created orally.

We hold that appellant is estopped from asserting that an employment relationship existed and summary judgment on the first two claims for relief was appropriate.

Appellant’s third claim is entitled negligent misrepresentation. We read this long and rambling portion of the complaint as setting forth two separate theories of recovery. The first theory is the tort of negligent misrepresentation, recognized by this Court in Brown v. Merrill Lynch, Pierce, Fenner, Etc. (1982), 197 Mont. 1, 640 P.2d 453. We described that tort as follows:

“One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information. “

Brown, 640 P. 2d at 458-459, quoting Restatement (Second) of Torts Section 552 (1977).

The appellant has developed no basis upon which to claim that false information was supplied or that the respondent failed to exercise reasonable care or competence in obtaining or communicating information. It is not disputed that the caretaker relationship between the parties deteriorated because of problems that developed subsequent to the original arrangement.

The other possible theory which appellant advances under his claim entitled negligent misrepresentation is a theory of constructive fraud. Appellant, in his claim, uses some of the statutory language defining constructive fraud at Section 28-2-406(1), MCA. However, for appellant to succeed on a claim under this section, he must allege and demonstrate a fiduciary relationship between the respondent and himself.

“Constructive fraud is a breach of fiduciary duty. (Citation omitted.) If there is no fiduciary duty in the first place, constructive fraud will not be.” Morse v. Espeland (Mont. 1985), [215 Mont. 148,] 696 P.2d 428, 430, 43 St.Rep. 251, 253. Here, there is nothing in the record to show a fiduciary relationship. Instead, appellant and respondent were dealing with each other at arm’s length. The District Court properly granted summary judgment on the issue of negligent misrepresentation.

The fourth claim dismissed by summary judgment was a claim for breach of the implied covenant of good faith and fair dealing. Under this claim, appellant alleged that respondent recklessly disregarded the rights of appellant and interfered with appellant’s rights to the cabin, all in bad faith.

In the recent case of Nicholson v. United Pacific Ins. Co. (Mont. 1985), [219 Mont. 32,] 710 P.2d 1342, 42 St.Rep. 1822, this Court articulated its concept of the tort of breach of the implied covenant of good faith and fair dealing. We established that, at least in Montana, the covenant does not arise from every contract and, in fact, is not an obligation arising out of contracts. The covenant does arise out of the justifiable expectations of the parties. One comment in Nicholson is especially relevant here;

“[A] helpful distinction should be noted between an intentional breach or one motivated by self-interest, giving rise to only contract damages, and the action which would give rise to a breach of the implied covenant, resulting in tort damages. Historically, a party to a contract generally had the right to breach and pay damages rather than perform. The non-breaching party, theoretically, is ‘made whole’ from the damages paid following the breach and thus still receives benefits from the agreement.
“Contract law is based in part upon the assumption that certain intentional breaches are to be encouraged. Permitting parties to breach their contracts promotes an efficient economy, at least when the gains from the breach exceed the expected pecuniary injuries of the promise. “

Nicholson, [219 Mont. 32,] 710 P.2d at 1348, quoting Diamond, “The Tort of Bad Faith Breach of Contract: When, If At All, Should It Be Extended Beyond Insurance Transactions,” 64 Marq.L.Rev. 425, 453-454 (1981) .

We have carefully examined appellant’s 129 page deposition, the respondent’s 123 page deposition, the appellant’s eighteen contentions in the pre-trial order, the eleven page amended complaint, and various exhibits in the record. This examination persuades us that as a matter of law, respondent’s conduct was not the arbitrary, capricious, unreasonable or impermissible activity which, under Nicholson, would justify a claim for breach of the implied covenant. The record shows that respondent provided appellant with a cabin for twenty months; that respondent built a cabin for appellant; that respondent assisted appellant in many ways in living in the mountains; that appellant, because of his disability, was severely restricted in acting as a caretaker; that appellant did not always act in the best interests of respondent; and that respondent gradually grew dissatisfied with his relationship with appellant. The District Court did not err in granting summary judgment on the claim for breach of the implied covenant.

The fifth claim dismissed by summary judgment was appellant’s claim for negligent infliction of emotional distress. In Johnson v. Supersave Markets, Inc. (Mont. 1984), [211 Mont. 465,] 686 P.2d 209, 213, 41 St.Rep. 1495,1500, this Court addressed the tort of negligent infliction of emotional distress and stated:

“[T]his Court adopts the species of case approach which requires a factual analysis of each case to determine whether the alleged ‘emotional distress’ merits compensation. In determining whether the distress is compensable absent a showing of physical or mental injury, we will look to whether tortious conduct results in a substantial invasion of a legally protected interest and causes a significant impact upon the person of plaintiff.”

See also, Proto v. Elliot (Mont. 1986), [222 Mont. 393,] 722 P.2d 625, 43 St.Rep. 1358.

Here, the record fails to establish a material issue of fact as to tortious conduct by the defendant, resulting in a substantial invasion of a legally protected interest and causing a significant impact upon the plaintiff. In addition, this issue was previously adjudicated by Judge Davis.

The District Court also granted summary judgment as to appellant’s claim for fraudulent misrepresentation. In order to go to the jury on this claim, appellant must make out a prima facie case of the nine elements of fraud:

“(1) a representation; (2) its falsity; (3) its materiality; (4) the speaker’s knowledge of its falsity or ignorance of its truth; (5) the speaker’s intent that it should be acted upon by the person and in the manner reasonably contemplated; (6) the hearer’s ignorance of its falsity; (7) the hearer’s reliance upon its truth; (8) the right of the bearer to rely thereon; and (9) the hearer’s consequent and proximate injury or damage.”

Brown v. Merrill Lynch, Pierce, Fenner, Etc. (1982), 197 Mont. 1, 11, 640 P.2d 453, 458. We find that under the undisputed facts in the record appellant’s claim of fraud is deficient in certain elements cited above. Under these elements, appellant asserts that respondent falsely represented that appellant would have peaceful possession of the property and that respondent knew that he would not allow appellant peaceful possession. However, appellant’s testimony in deposition belies these assertions upon which his claim rests. Appellant’s deposition establishes that respondent provided appellant with a cabin in 1979-1980; respondent built a different cabin for appellant in the spring of 1980; appellant understood that respondent would occasionally stay with appellant in the cabin on respondent’s land; respondent supplied appellant several times with venison or elk meat; respondent assisted appellant in obtaining a generator for the cabin; appellant did live in a cabin provided by respondent for approximately twenty months; respondent provided appellant with six cords of wood one fall, that respondent and appellant began to have disagreements over appellant’s hosting other people at the cabin; and that the relationship deteriorated, and respondent evicted appellant, after appellant told two of respondent’s acquaintances that respondent had made derogatory remarks about them.

Appellant’s testimony establishes that there was simply a deterioration in the relationship and that respondent did not know, at the time he made the statement, that he would not allow appellant peaceful possession of the property. Because appellant’s testimony establishes the absence of various elements of a prima facie case of fraud, the District Court properly granted summary judgment on that claim.

For the same reason, we hold that the District Court properly granted summary judgment on appellant’s seventh claim, for promissory fraud. Under this claim, appellant alleges that respondent fraudulently promised him that he would have an exclusive possessory interest in the cabin. Again, appellant’s claim is deficient because his own testimony establishes that respondent did not know of the falsity of his representations. Furthermore, “the mere making of a promise which the promisor fails to keep is not actionable fraud.” Svennungsen v. Svennungsen (1974), 165 Mont. 161, 169, 527 P.2d 640, 644.

The last claim of appellant which was dismissed by summary judgment is entitled “Wrongful Interference With Peaceful Possession of Property. “ It is not entirely clear what theory of recovery appellant is advancing under this claim. Paragraph two of this count contends that “plaintiff was entitled to the peaceful enjoyment and possession of said cabin for the term of his employment with the defendant . . .” (Emphasis added.) From that and other contentions, it appears that this count is predicated upon a finding of an employment relationship between appellant and respondent. We have held previously in this decision that the appellant is estopped from successfully alleging an employment relationship. Therefore, the District Court properly granted summary judgment.

In addition, it appears that the appellant’s contentions set forth in the pre-trial order were considered by Judge Davis in his March 4, 1983, order granting summary judgment as to all counts in the original complaint except Count V, regarding property damage to appellant’s vehicle. Having been the subject of prior adjudication they would be barred under the doctrine of law of the case, which doctrine is not being used in the resolution of this appeal, but which has been strenuously urged by counsel for appellant.

We agree with the following comments made by Judge Robb in granting summary judgment:

“1. No valid life estate was created, Judge Davis previously so ruled on an earlier motion for summary judgment, and I concur. Plaintiff’s counsel state they are not now pursuing claims on that basis, so the point would seem moot, but yet plaintiff’s other claims and theories overlap this in many respects and it is difficult to separate such alleged fact and theory from the other claims.
“2. The record indicates no employer-employee relationship was created, at least certainly not in the ordinary sense, and although plaintiff originally claimed there was not, now he does allege an employment status of some sort. This seems grossly inconsistent with plaintiff’s affidavit of 2/22/83 filed herein, and seems to me to work a fraud upon the court for plaintiff to now claim damages from any sort of employment status. In any event, if an employer-employee relationship existed at all, it was one terminable at will by either party.
“5. What the record does establish is a very loose, vague and ambiguous oral agreement of the parties, with both claiming the other failed to fulfill his end of it in some respect. The contract consideration appears quite illusory to me as defendant had no way of compelling plaintiff Rowland to stay in the cabin if he chose not to, as that would be involuntary servitude, and if it was not permanently binding on plaintiff, it should not be on defendant. This brings the situation back to one terminable at will by either party, is clearly contractual in nature, and punitive damages would not be recoverable.
“6. Plaintiff executed a written resignation or agreement to vacate the premises, and although he argues this was under coercion and he had no choice, the obvious facts do not bear this out. That is, Rowland certainly could have simply refused to sign such document and sat tight, or he could have sought counsel then or during the additional seven months he lived in the cabin, or much earlier than he did after leaving. He also could have signed a criminal complaint against Klies if defendant in fact threatened him with a gun at some time. Unlike Gates v. Life of Montana, there is no failure or refusal to return the written resignation letter alleged, and a bad faith fact basis does not appear.
“7. In summary, plaintiffs numerous claims for emotional distress, negligent misrepresentation, promissory fraud, punitive damages etc. simply are too factually vague, inconsistent, and legally unsound to justify trial, notwithstanding an extensive and persistent effort by his attorney.”

Affirmed.

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


source: Caselaw Access Project

license: Public Domain

text:
    RONALD D. BAKER and Andrea D. Baker, Plaintiffs and Appellants, v. GERALDINE BINK and the Mill Levy for School District No. 97, Defendants and Respondents.
    No. 85-512
    Submitted on Briefs July 10, 1986.
    Decided Oct. 9, 1986.
    726 P.2d 822.
    Alexander & Baucus, Ward E. Taleff, Great Falls, for plaintiffs and appellants.
    Jardine, Stephenson, Blewett & Weaver, Lon T. Holden, Patrick L. Paul, Co. Atty., Great Falls, for defendants and respondents.
   MR. JUSTICE GULBRANDSON

delivered the Opinion of the Court.

Ronald and Andrea Baker appeal an order from the Cascade County District Court denying their petition to invalidate the election and mill levy held in School District No. 97 in April, 1984.

Appellants ask whether it can be said to a mathematical certainty that irregularities in the election had no effect on the election results, while the respondents phrase the issue as one of mootness. We affirm.

On April 3, 1984, an election was held in School District No. 97 in the City of Sun River, Montana. The voters were to select three trustees to the School Board and to approve or disapprove a mill levy. Respondent Geraldine Bink was seeking a one-year term as a trustee and her opponent was Stanley Reeverts. Appellant Ronald Baker was seeking election to a three-year term on the Board.

Bink received 105 votes in the election to Reevert’s 97, for an eight vote margin of victory. The mill levy was approved by a similar eight vote margin. Ronald Baker lost his bid for a seat on the Board by 60 votes.

On April 9, 1984, the Bakers filed a complaint with the Cascade County District Court challenging the validity of the entire election. The complaint was dismissed without prejudice on April 23, 1984. On August 20, 1984, the Bakers filed a petition contesting the election of Bink and the passage of the mill levy pursuant to Section 13-36-101, MCA. They contended that Bink received illegal votes in the election and gave two reasons for their contention. First, the Bakers argued that several voters did not meet the residency requirements as mandated by Montana law. Second, the Bakers argued that several absentee ballots were tainted due to improper distribution and tabulation of the ballots by election officials.

A trial was held before the District Court on May 13, 1985, one month after Geraldine Bink’s one-year term as a school board trustee had expired. The court upheld the election as to both Bink and the mill levy finding that:

(1) no candidate returned as elected participated in the irregularities alleged by the Bakers;

(2) the number of contested votes would not affect the outcome of the elective position sought by Mr. Baker;

(3) there was no evidence that anyone other than the proper person voted on the absentee ballots, nor was there any evidence to show that any absentee ballot envelope had been opened by someone other than the election judges;

(4) that whatever voting irregularities occurred did not stem from any corrupt or illegal purpose but were caused by election officials or third parties and had no effect on the election results.

The School District argues the issue of mootness. We have repeatedly held that we will not pass upon moot questions. Adkins v. City of Livingston (1948), 121 Mont. 528, 194 P.2d 238. In State ex rel. Miller v. Murray (1979), 183 Mont. 499, 503, 600 P.2d 1174, 1176, we stated that “a moot question is one which existed once but because of an event or happening, it has ceased to exist and no longer presents an actual controversy.”

The Bakers rely on Section 13-36-101, MCA, in their argument. The statute reads as follows:

“An elector may contest the right of any person to any nomination or election to public office for which the elector has the right to vote, for any of the following causes:
“(1) On the ground of a deliberate, serious, and material violation of any provision of the law relating to nominations or elections;
“(2) whenever the person whose right is contested was not, at the time of the election, eligible to such office;
“(3) on account of illegal votes or an erroneous or fraudulent count or canvass of votes.”

The remedy in the event illegal votes have been counted is stated in Section 13-36-212, MCA:

“If, in any case of a contest on the ground of illegal votes, it appears that a person other than the one returned has the highest number of legal votes after the illegal votes have been eliminated, the court must declare such person nominated or elected, as the case may be.”

We believe that questions as to the validity of the election are moot. Our reasoning is that due to the passage of time, an actual controversy no longer exists and no remedy for the situation is possible. Mrs. Bink’s one-year term of office expired in May 1985 and therefore, she cannot be ousted from an office she no longer holds.

As to the sufficiency of the evidence, appellants did not prove to the District Court’s satisfaction that illegal or fraudulent votes had been tallied. We discussed the burden of proof in an election contest in Martin v. State Highway Commission (1939), 107 Mont. 603, 614, 88 P.2d 41, 47.

“It is a rule of well-nigh uniform recognition that, after an election has been held, a party will not be permitted to challenge it unless he can show that a different result would have been reached but for the conditions of which he complains.”

The Bakers, neither of whom testified at trial, were unable to prove that Bink had received any illegal votes or was involved in any election irregularities. Honest mistakes of public officials should not be permitted to disenfranchise duly qualified electors. State ex rel. Van Horn v. Lyon (1946), 119 Mont. 212, 173 P.2d 891. It is admitted that the election officials could have been more prudent in following the procedure for absentee voting. Evidence was presented that sevbral ballots were distributed to acquaintances of the absentee voters and that ballots were counted even though the signatures on the absentee application envelopes and the ballots themselves were not in their proper places. However, the number of contested ballots would not have affected the election of the trustee position sought by Mr. Baker since he lost by some 60 votes. Further, the evidence supports the finding that the absentee ballots were opened by the election judges and no one else.

Lastly, we find sufficient evidence to support the District Court’s finding that whatever voting irregularities occurred were caused by election officials or third parties and had no effect on Bink’s election or the mill levy election.

Affirmed.

MR. JUSTICE HARRISON, SHEEHY, MORRISON and HUNT concur.


author: MR. JUSTICE HUNT

text:
    KINGSBURY DITCH CO., Petitioner and Respondent, v. DEPARTMENT OF NATURAL RESOURCES AND CONSERVATION, et al., Respondents and Appellants.
    No. 85-554.
    Submitted Sept. 11, 1986.
    Decided Oct. 9, 1986.
    725 P.2d 1209.
    Jardine, Stephenson, Blewett & Weaver, K. Dale Schwanke argued, Great Falls, for Pondera Canal.
    Candace West, Dept, of Natural Resources, Donald D. MacIntyre argued, Helena, for Dept, of Natural Resources.
    Loble & Pauly, Lester Loble argued, Helena, for Kingsbury Ditch Co.
   MR. JUSTICE HUNT

delivered the Opinion of the Court.

Kingsbury Ditch Company filed an application with the Department of Natural Resources and Conservation (DNRC) to change the point of use of a water right as required by the Water Use Act of 1973, Section 85-2-402, MCA (1983). Pondera County Canal and Reservoir Company and many others filed objections to the proposed change, and a hearing date was set. During the course of the proceedings, the DNRC hearing examiner made several procedural rulings. Kingsbury asked the Water Court to review two of those rulings. The Water Court reversed both rulings. The DNRC and Pondera appeal. We vacate and remand.

Pondera raises this issue on appeal. Did judicial review properly lie from the interlocutory rulings of the hearing examiner? Both appellants raise the following two issues: (1) Whether The District Court erred in ordering that the burden of proof must be placed on the objector in a contested case hearing for a change of use application before the DNRC? (2) Whether The District Court erred in ordering the hearing examiner to impose discovery sanctions prior to hearing to assure compliance with petitioner’s request for discovery?

Kingsbury Ditch Company has a pre-1973 water right. Subsequent to the passage of the Water Use Act of, 1973, they applied for DNRC approval to change the point of use of that water right as required by Section 85-2-402, MCA (1983). Public notice of the proposed change was given and a prehearing conference was scheduled. The hearing examined detailed the issues for the prehearing conference in her order of October 18, 1983. The order read:

“The issues in the Hearing will be whether the Applicant has shown existence of the statutory criteria for change in place and method of use pursuant to MCA Section 85-2-402. The Objectors have the burden of proof to show that their rights will be adversely affected by the change proposed the Application.” (Emphasis added.)

This order was clarified by another order issue by the hearing examiner, on October 19, 1984. It read:

“[A]s in all administrative proceedings, the Applicant bears the burden of persuasion on 211 ultimate issues, i.e.: the scope of the existing right subject to the change request, and lack of adverse affect to other appropriators. The Objectors herein bear the burden of production on the scope [and] existence of their rights, and the kind and character of adverse affect alleged.” (Emphasis added. )

After the prehearing conference was scheduled, the hearing examiner ordered all parties to participate in discovery. Kingsbury served a discovery request on all parties on December 21, 1983. On December 23, 1983 the hearing examiner, in response to Kingsbury’s motion, issued an order for discovery, requiring all parties to respond within 30 days to Kingsbury’s discovery request. On January 27, 1984, Kingsbury moved the hearing examiner to dismiss the objections of the objectors who failed to respond to the discovery request.

The hearing examiner stated that she has discretion as a hearing examiner to order discovery and impose sanctions for failure of a party to comply with her order. She noted that numerous objectors were unrepresented by counsel, and their ability to respond to discovery requests was limited. One such objector who attended the prehearing status conference indicated a willingness to respond to the discovery request but an understandable inability to comprehend exactly what a response should entail. The hearing examiner ruled that dismissal is a harsh sanction, especially against one unrepresented by counsel in an administrative proceeding where water users typically appear pro se. Further, there had been no allegations of bad faith on the part of non-responsive parties. She held there was a less drastic means to protect Kingsbury’s fundamental right to fairness and procedural due process. She denied the motion to dismiss the objections without prejudice and ruled that if the objectors appeared at the hearing with substantive testimony of which Kings-bury was unaware, a continuance sufficient for Kingsbury to meet the evidence would be granted.

Kingsbury sought judicial review of these two orders in the District Court. Judge Loble deemed himself disqualified and Judge Lessley assumed jurisdiction. The acts on appeal were stipulated to and following briefing Judge Lessley reversed both orders.

He ruled:

“[T]he Hearing Examiner below will return to her original Order . . . namely ‘The objectors have the burden of proof to show that their rights will be adversely affected by the change proposed by the Applicant.’ ”

and

“[B]efore the time set for the next hearing in this Cause, the Examiner shall prepare such Orders as are necessary to assure compliance with Petitioner’s request for Discovery; that such Order will carry the condition of Sanctions for failure to comply.”

On Appeal, Pondera argues judicial review was not appropriate. Pondera contends that pursuant to MAPA, the only types of administrative orders that are subject to judicial review are final decisions in which the aggrieved party has exhausted his administrative remedies. Section 2-4-702, MCA. The exception to that rule is Section 2-4-701, MCA, which allows review of a “preliminary, procedural, or intermediate agency action or ruling ... if review of the final agency decision would not provide an adequate remedy.” Pondera contends adequate relief is available by way of a review of the final agency decision.

Pondera also argues that pursuant to Section 2-4-704, MCA, when judicial review is undertaken, the reviewing court may reverse or modify “if substantial rights of the appellant have been prejudiced” by administrative findings which are: violative of constitutional or statutory provisions; in excess of the statutory authority of the agency; made upon unlawful procedures; affected by other error of law; arbitrary or capricious; characterized by abuse of discretion or clearly unwarranted exercise of discretion. Pondera argues no prejudice to Kingsbury has ever been shown or alluded to and that the reviewing court did not have grounds to reverse.

The orders appealed here are clearly intermediate, procedural orders of the hearing examiner. There has been no final decision as yet, nor an exhaustion of administrative remedies as required by Section 2-4-702, MCA. A preliminary, procedural, or intermediate agency ruling may be reviewed if review of the final agency action would not provide an adequate remedy. Section 2-4-701, MCA. There has been no showing in this case that a review of the final agency action would provide an inadequate remedy. We therefore hold that judicial review did not lie from the orders of the hearing examiner.

Since we have decided that judicial review is not proper, we decline to address the two remaining issues raised by appellants, instead we vacate the decision of the lower court and remand for further proceedings.

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


text:
    In re the MARRIAGE OF KAREN RAYE JOHNSTON, Petitioner and Respondent, and GAROLD DAVE JOHNSTON, Respondent and Appellant.
    No. 85-637.
    Submitted on Briefs July 24, 1986.
    Decided Oct. 9, 1986.
    726 P.2d 322.

      Torger S. Oaas, Lewistown, for respondent and appellant.
    R.W, Heineman, Wibaux, for petitioner and respondent.
   MR. JUSTICE HUNT

delivered the Opinion of the Court.

Appellant, Garold Dave Johnston, appeals from the property settlement and award of attorney fees granted to respondent, Karen Raye Johnston, by the Dawson County District Court in a marital dissolution proceeding.

We affirm.

Appellant does not contest the grant of custody of their three minor children to respondent or the child support award. The issues on appeal are:

1. Did the District Court improperly deny appellant an in-kind distribution of the marital estate’s minority shares in a closely-held family corporation and improperly required the corporation to finance the distribution of these shares?

2. Did the District Court improperly determine the value of the minority interest in the corporate shares of stock?

3. Did the District Court improperly award attorney fees to respondent?

Karen and Garold Johnston were married in 1967. In 1977, when their net worth was $47,801, they joined with the husband’s family in forming a family farm and ranch corporation. The family members exchanged their real and personal property for corporate shares. Karen and Garold Johnston initially received 1250 shares for their contribution of properties accumulated during the 10 years of their marriage. They later received 180 shares as gifts for a total of 1430 shares. Garold Johnston received $500 per month for his work with the corporation. Each shareholder’s family, including Karen and Garold Johnston’s family, was provided with living expenses such as a home, vehicles, utilities, health and vehicle insurance and groceries,

The parties’ marriage was dissolved in 1983. The marital property consisted primarily of corporate assets and some personal property. The District Court found the corporation’s net worth to be $1,732,789 or $217 per share. Consequently it valued the marital estate at $310,310. The court gave appellant a choice of two alternative methods whereby the value of the marital estate could be equitably distributed.

The first method provided that the 1430 shares be distributed to Garold Johnston and a 25% discount of the marital estate would be made. Garold would pay Karen Johnston $116,366 within 30 days of the judgment. Each party would pay their own attorney fees.

The second method grants Karen Johnston $155,155 from the marital estate plus costs and attorney fees. No discount is provided on the value of the shares. Payment would be made in ten equal annual installments with 10% interest per annum. Karen would have a first security interest in the 1430 shares assigned to Garold for the total sum of the judgment. If an annual installment is not paid, Garold would promptly offer to sell and assign to the corporation and the shareholders the number of shares necessary to raise the installment amount at the price the offerees would be willing to pay per share. If the corporation or the shareholders are unwilling to buy, Garold would assign to Karen the number of shares necessary to pay the installment payment. The price of the shares would be determined by what Karen can sell the shares for on the open market. Both parties must make reasonable efforts to find a buyer. If a buyer cannot be found within 30 days, Karen may then buy the shares at her price in place of receipt of the annual installment.

Appellant argues that the District Court improperly divided the marital assets. First appellant contends that the District Court should have made an in-kind distribution of the shares in place of awarding annual payments to respondent. The extensive findings of fact indicate that appellant received a $500 monthly wage and annual bonuses ranging from $1,000 to $2,000. The corporation provided each family with a home, food, vehicles, utilities and insurance. The District Court found these corporate benefits constituted a substantial income substitute to appellant — at least the equivalent of a $15,000 annual income when wages, bonuses, fringe benefits and tax advantages were taken into account.

Besides respondent, appellant and his parents and brothers are the only other shareholders and the sole actors in the corporation. They have a supportive and common interest in the preservation of their family enterprise. Testimony was presented which indicated appellant’s father, the corporation’s president, was opposed to purchasing any minority shares respondent might own.

Appellant continues to receive all of the above benefits from the corporation. Respondent has received nothing from the corporation since her separation from appellant in 1983.

This Court has previously held that simply because the option of making a distribution of stock in-kind was open to the court, this is no reason the District Court had to select it. Burleigh v. Burleigh (Mont. 1982), 650 P.2d 753, 757, 39 St.Rep. 1538, 1543, followed in In re the Marriage of Wessel (Mont. 1986), [220 Mont. 232,] 715 P.2d 45, 43 St.Rep. 405.

The District Court found that dividing the stock evenly between the husband and wife would not produce an equitable result. It reasoned that while the corporate by-law restrictions reduce the actual value of the shares individually owned by the parties, they do not reduce the underlying value of the shares in the hands of the family corporation.

Even if half of the 1430 shares were retained by respondent, she would remain an outsider in this closely-held family corporation. She would not receive income or benefits from the corporation because she is not longer a part of the farming operation. She would not receive dividends as the corporation has never issued them.

An in-kind distribution of closely-held corporate shares is not required when this would not produce an equitable settlement between the parties. Sufficient evidence appears on the record to uphold the District Court’s conclusion that an in-kind distribution of these shares would provide little benefit to respondent. The District Court was correct in presenting other methods of distribution for the estate.

Appellant contends that the District Court required the closely-held corporation, Johnston/Will, Inc., to finance the distribution of the marital estate’s minority shares and that this was improper as such since the corporation was not a party to this suit. The record does not support this contention. Johnston/Will, Inc.’s corporate bylaws restrict the sale of stock by shareholders. The stock must first be offered to the corporation for sale. If the corporation does not buy within 30 days, the shares are offered to the shareholders for sale. Shareholders then have 30 days to match the asking price before an outside sale can be made.

The alternative methods presented by the court took these restrictions into account. The corporation was not required to fund the distribution. Under the second method, the method chosen by appellant, the corporation was simply provided with a chance to purchase shares pursuant to the by-law restrictions should appellant not meet the annual installment obligations due to respondent. This is fully in keeping with the provisions Section 40-4-202, MCA.

Appellant next contends that District Court improperly valued the jointly owned stock by failing to take into account the net worth of the husband and wife before they joined Johnston/Will, Inc. and improperly failed to discount the shares of stock in its valuation. Appellant notes that this Court has previously held that a district court must consider the matter of a discount of minority stock in making its decision. In re the Marriage of Buxbaum (Mont.1984), [214 Mont. 1,] 692 P.2d 411, 41 St.Rep. 2243. Appellant argues the District Court was in error when it failed to discount the stock in question because of its minority position. He contends that appropriate significance was not given to the preincorporation net worth. The value of the shares was based solely on the underlying value of the corporation. Appellant argues that as a result they were given too high a value.

The District Court found the parties’ net worth to be $47,801 just prior to incorporation in December, 1977. At trial, the corporation’s accountant testified for appellant and projected the corporation’s net worth to be $1,284,839. In contrast, respondent’s expert witness stated it was $2,179,738. The District court found the net worth to be $1,732,789 or $217 per share.

The record indicates that the District Court did consider the possibility of discounting the value of the parties’ minority shares. Under the method chosen by appellant, the court concluded that it was not proper to discount the value per share of stock for market value purposes even though it was a minority interest. This was not found to be a situation where a discount would accurately reflect a minority stockholder’s lack of ability to control salaries, dividends or other corporate benefits. In re the Marriage of Buxbaum (Mont. 1984), [214 Mont. 1,] 692 P.2d 411, 41 St.Rep. 2243. Valuation of the shares was done by looking to the underlying value of the corporation.

In valuing the assets in a marital dissolution case, it must be noted that the District Court has broad discretion to determine net worth. In re the Marriage of Kaasa (1979), 181 Mont. 18, 22, 591 P.2d 1110, 1112, We will not set aside a district court’s finding of fact unless the finding represents an abuse of discretion. Reese v. Reese (1977), 185 Mont. 52, 55, 604 P.2d 326, 328 followed in In re the Marriage of Reich (Mont. 1986), [222 Mont. 192,] 720 P.2d 286, 288, 43 St.Rep. 1167, 1168. The record indicates the District Court considered the preincorporation net worth and the valuation testimony of both parties. There was no abuse of discretion by the District Court and the findings on this matter will not be disturbed.

Finally on this issue, the Court is aware that no testimony exists in the record that the net worth of the corporation was exactly $1,732,789, or $217 per share. We have held that a district court is free to find a value for marital property within the range of evidence submitted. In re the Marriage of Staudt (Mont.1985), [216 Mont. 196,] 700 P.2d 175, 178, 42 St. Rep. 740, 744. This value was well within that range of evidence submitted and was thoughtfully arrived at by the District Court. We uphold the District Court’s valuation of the corporate stock owned by the marital estate.

Appellant’s final contention is that the District Court erred in awarding attorney fees to respondent. Section 40-4-110, MCA, allows attorney fees after both parties’ financial resources are considered. After hearing on the matter, the District Court awarded $7,205.00 in attorney fees to respondent.

An award under this statute is “largely discretionary with the District Court, and we will not disturb its judgment in the absence of an abuse of that discretion. “ In re the Marriage of Milanovich (Mont. 1985), [215 Mont. 367,] 697 P.2d 927, 929, 42 St.Rep. 436, 439, quoting Talmage v. Gruss (1983), 202 Mont. 410, 412, 658 P.2d 419, 420. The record indicates that the parties financial resources were fully considered. No abuse of discretion was made by the District Court. The award of attorney fees to respondent is affirmed.

The judgment of the District Court is affirmed in full.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, WEBER and MORRISON concur.


author: MR. JUSTICE WEBER MR. JUSTICE MORRISON,

text:
    UNIVERSITY OF MONTANA FOUNDATION, a Montana NONPROFIT CORPORATION, PLAINTIFF AND RESPONDENT, v. HUMAN RIGHTS COMMISSION, and its Administrator, Anne MacIntyre, Defendants and Appellants.
    No. 86-06
    Submitted on Briefs July 31, 1986.
    Decided Oct. 9, 1986.
    726 P.2d 817.

      MR. JUSTICE MORRISON dissented and filed opinion.
    Janice Frankino Doggett, Human Rights Com’n, Helena, for defendants and appellants.
    Gough, Shanahan, Johnson & Waterman, Thomas E. Hattersley, Frederick F. Sherwood, Helena, for plaintiff and respondent.
   MR. JUSTICE WEBER

delivered the opinion of the Court.

The Montana Human Rights Commission appeals the order of the First Judicial District which restrained the Commission from any further proceedings regarding a discrimination complaint filed by Gayle Walton against the University of Montana Foundation. The order also required the Commission Administrator to immediately issue a right to sue letter to Gayle Walton. We affirm.

The issues are:

1. Did the District Court err in its interpretation of Section 49-2-509, MCA, when it restrained the Commission from further proceedings and required the Commission to issue a right to sue letter7

2. Did the District Court err when it refused to admit evidence regarding the cause of the delay in the Commission’s investigation?

On January 20, 1984 Gayle Walton filed three discrimination complaints with the Montana Human Rights Commission (Commission) against the University of Montana Foundation (Foundation). About sixteen months later, the Foundation requested that the Commission issue a right to sue letter regarding Walton’s complaints pursuant to Section 49-2-509, MCA. Anne MacIntyre, administrator for the Commission, refused the request and stated she was unable to determine whether Commission efforts to settle the case had been unsuccessful, and that a right to sue letter would not be issued until such a determination had been made.

On September 27, 1985 the Foundation applied to the District Court for writ of review and writ of prohibition. The Foundation claimed the Commission lost jurisdiction of Walton’s complaints by failing to meet the time limits set forth in Section 49-2-509, MCA, and should be barred from further proceedings in the matter. The Commission responded with a motion to quash the Foundation’s writ of prohibition. Additionally, Walton was permitted to intervene, Following briefing and oral argument, the District Court issued an order restraining the Commission from any further proceedings in the matter and requiring Anne MacIntyre, as Division Administrator, to issue a right to sue letter. Commission appealed.

I

Did the District Court err in its interpretation of Section 49-2-509, MCA, when it restrained the Commission from further proceedings and required the Commission to issue a right to sue letter?

Section 49-2-509(1), MCA, provides:

“(1) The commission staff shall, at the request of either party, issue a letter entitling the complainant to file a discrimination action in district court if:
“(a) the commission has not yet held a contested case hearing pursuant to 49-2-505 and has determined that it will be unable to hold a contested case hearing within 12 months of the date the complaint was filed under 49-2-501; and
“(b) 180 days have elapsed since the complaint was filed and the efforts of the commission staff to settle the complaint after informal investigation pursuant to 49-2-504 have been unsuccessful.”

In determining legislative intent, the Court must first look to the plain meaning of the language used in the statute. State ex rel. Palmer v. Hart (1982), 201 Mont. 526, 655 P.2d 965, 39 St.Rep. 2277; Dorn v. Board of Trustees of Billings School District No. 2 (Mont. 1983), [203 Mont. 136,] 661 p.2d 426, 40 St.Rep. 348.

The Commission believes the statute does not permit removal of a case to district court until an attempt to settle the case has been made, even though the time requirements of the statute have been exceeded. In a letter from Anne MacIntyre to the Foundation’s attorney, this position was clearly enunciated. In part, the letter stated:

“I am unable to determine that the “efforts of the commission staff to settle the case after informal investigation pursuant to 49-2-504 have been unsuccessful.” Section 49-2-509(1) (b), MCA and A.R.M. 24.9.262(2)(c). (Emphasis added.) I am unable to make such a determination because the informal investigation has not been concluded, and will not be concluded until the commission staff issues its findings. The reasonable cause or lack of reasonable cause finding in a case under investigation is the staffs determination whether the allegations of the complaint are supported by substantial evidence. Section 49-2-504, MCA, requires the staff to make such a determination and then attempt to settle the case and eliminate the discriminatory practice through conference, conciliation and persuasion, Section 49-2-509(1) (b), MCA, does not permit removal to district court until these steps have been completed, even though the time requirements have been met. (Second emphasis added for this opinion.)

The position of the Commission as stated above is not a correct interpretation of the statute.

We conclude that Section 49-2-509(1), MCA, provides that on the request of either party, a right to sue letter should issue where 180 days have elapsed since the filing of the complaint without the completion of an informal settlement, and in addition, where 12 months have elapsed from the filing date so that a contested case hearing cannot be held within such 12 month period. Gayle Walton filed her complaints on January 20, 1984. As a result, an informal settlement must have been completed by the Commission by July 19, 1984 — 180 days from filing. As an alternative, the Commission must have held a contested case hearing by January 19, 1985 — 12 months from January 20, 1984. Neither of these statutory deadlines were met. This statute then provides that upon the request of either party, a right to sue letter should issue.

As the District Court’s well-phrased order stated:

“The language of the statute is clear on its face. The Commission staff must issue a right to sue letter at the request of either party if two conditions are met; (1) a contested case has not and cannot be held within 12 months of the filing of the complaint; and (2) efforts to informally settle the matter pursuant to Section 49-2-504, MCA, have been unsuccessful and 180 days have elapsed. Here, no contested case has been held and more than 12 months have passed since the filing of the complaint. In addition, more than 180 days have elapsed since the filing of the complaint, and there has not been a successful settlement. Since the Foundation has requested the Commission staff to issue a right to sue letter, it must do so . . .
“Section 49-2-509, MCA, does not say that the Administrator has the authority or the discretion to determine whether efforts at informal settlement have been unsuccessful. To hold that the Administrator has such discretion would be to insert something which was omitted by the Legislature. This the Court cannot do. Furthermore, to hold that the 180 days begins to run only after the Administrator has made a determination that efforts to settle have been unsuccessful, would permit the Commission staff to informally do what it could not formally do, that is, the staff could continue with the matter well beyond the 12 month time limit for holding a contested case. The plain language of the statute clearly shows that such was not the intent of the Legislature.”

Rule 1 of the Montana Rules of Civil Procedure in part provides that the rules shall be construed to secure “the just, speedy, and inexpensive determination of every action.” The same guidelines properly may be applied to the administrative proceeding requirements of Section 49-2-509, MCA. The aim of the administrative process is to secure a just and inexpensive determination which is just as speedy as the court process. The legislature has placed a reasonable time limit on the administrative process by granting a total of 12 months within which to complete that process. Nothing has been presented which demonstrates that the 12 month period is an unreasonable period. We hold that the District Court did not err when it restrained the commission from further proceedings and required the commission to issue right to sue letter.

II

Did the District Court err when it refused to admit evidence regarding the cause of the delay in the Commission’s investigation?

In the present case, the District Court refused to consider evidence that settlement had not been reached due to delay caused by the Foundation. If the time periods set forth in the statute have passed, then upon request a right to sue letter must be issued. The statute does not address delays, not provide for additional time if one side or the other caused a delay. We hold the District Court did not err when it refused to admit evidence regarding the cause of the delay in the Commission’s investigation.

We affirm the District Court.

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

MR. JUSTICE MORRISON,

dissenting:

I dissent.

The wording in Section 49-2-509(l)(b), MCA, is ambiguous. Subsection (b) may be read as having one or two conditions. To determine legislative intent we should look to the legislative history of Section 49-2-509, MCA.

Section 49-2-509, MCA, was introduced as House Bill 660 in the 1983 legislative session. Comments submitted by Commission Administrator MacIntyre indicate the bill was intended to provide an alternative forum for a complainant whose case was not being expeditiously investigated and settled by the Commission.

“There are several reasons the Commission has requested the introduction of this legislation. First, many complainants who are represented by counsel from the outset would prefer to pursue their complaints in court rather than at an administrative hearing. Secondly, because of the inadequate funding of the Commission, the number of cases awaiting hearing is large and growing. While the number is not large compared to the number of cases which are resolved by the Commission staff through investigation and conciliation prior to hearing, it does contribute to the Commission backlog. Furthermore, in many cases, damages continue to accrue while cases are awaiting hearing and this seems particularly inequitable to Respondent.

“Because of the fact that the Commission staff is able to resolve more than 90% of the cases filed with it through conciliation and investigation, the Commission believes that all complaints should be filed with the Commission initially. If the Commission staff cannot resolve the complaint within 180 days through conciliation and investigation, the complainant can then exercise the election provided for in this bill.”

Senate Judiciary Committee minutes, March 9, 1983.

The bill was amended to provide both complainant and respondent with the right to request a right to sue letter.

Sections 49-2-509, MCA, establish the administrative remedy for resolving discrimination complaints. The federal district court for the District of Montana found that the legislature intended to create a procedure whereby the Commission would informally eliminate discriminatory practices by conference, conciliation, and persuasion, and that the statutory remedy is exclusive. Walker v. The Anaconda Co. (D.C.Mont.1981) 520 F.Supp. 1143, 38 St.Rep. 1557. I agree with this analysis.

In the present case, the District Court refused to consider evidence that settlement had not been reached due to delay caused by the Foundation. This was error. If a party is permitted to stall its way into district court, the statutory remedy can be rendered meaningless. Pursuant to Section 49-2-504, MCA, the Commission staff shall informally investigate a filed complaint promptly and impartially. This task becomes exceedingly difficult where the respondent refuses to comply with discovery requests.

I would interpret Section 49-2-509(l)(b), MCA, to require a look into the progress of settlement efforts after 180 days have elapsed. The legislative history reveals Section 49-2-509, MCA, was implemented to provide an alternative remedy where administrative delay is preventing resolution of a complaint. In the present case, the district judge should have determined whether the Foundation or the Commission was responsible for the delay.

The Commission’s interpretation of Section 49-2-509(1), MCA, is found at A.R.M 24.9.262:

“(2) The division administrator shall issue the right to sue letter on behalf of the Commission upon receipt of a written request from either party if the administrator determines:
“(a) No contested case hearing has been held in the case;
“(b) 180 days have elapsed since the complaint was filed;
“(c) the efforts of the division to settle the case after informal investigation have been unsuccessful; and
“(d) the Commission will be unable to hold a contested case hearing in the matter within 12 months of the date the complaint was filed.”

The District Court found this rule to be an incorrect interpretation of the statute as it contains four enumerated conditions rather than two, and it allows the division administrator to determine whether settlement efforts have been unsuccessful.

The rule is, in my opinion, proper under the statute. Subsection (c) of the rule does not give the administrator unbridled discretion to extend a case beyond the 12 month time limit for holding a contested case hearing. The Commission has a duty to promptly investigate complaints and immediately try to eliminate discriminatory practices. Neither party should be permitted to circumvent the administrative remedy by using dilatory tactics. The legislative history and time limits contained within the statute support this result.

The District Court should be reversed and the case remanded for further proceedings.


author: MR. JUSTICE SHEEHY

text:
    MAYER BROS., A Washington Corporation, Plaintiff and Respondent, v. DANIEL RICHARD JEWELERS, INC., Daniel McCloy and Richard Embry, Defendants and Appellants.
    No. 86-91.
    Submitted on Briefs Aug. 21, 1986.
    Decided Oct. 9, 1986.
    726 P.2d 815.
    Morrow, Sedivy & Bennett, Edmund P. Sedivy, Jr., Bozeman, for defendants and appellants.
    Moore, Rice, O’Connell & Refling, Christopher L. Manos, Bozeman, for plaintiff and respondent.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

Defendants appeal the summary judgment against them granted in the District Court, Eighteenth Judicial District, Gallatin County. Defendants contend a genuine issue of material fact exists regarding the personal liability of the defendants for debts incurred on behalf of the corporation, Daniel Richard Jewelers, Inc.

On March 10, 1982, Dan McCloy and Dick Embry filled out a commercial credit application for the purpose of obtaining merchandise from Mayer Bros., a wholesale jewelers. The merchandise was to be on account for Daniel Richard Jewelers, which defendants indicated was owned as a corporation. At the bottom of the one-page typewritten application was the following paragraph:

“If credit is granted, the undersigned agrees to pay for all merchandise purchased. If the applicant is now or later becomes a corporation, the undersigned agrees to be personally liable for payment of all purchases. ” (Emphasis supplied. )

Defendants placed their signature below this paragraph.

On January 1, 1984, defendants executed four promissory notes, two for $11,500 and two for $15,000. The notes were signed “Daniel Richard Jewelers of Helena” or “Daniel Richard Jewelers, Inc.” and were also signed by McCloy and Embry personally, without language showing they were signing as officers or agents of the corporation. A total of three payments have been made on the various notes, leaving a balance of $9,700.38, $10,605.78 and $30,000 owing. In May, 1984, Mayer Bros, filed a complaint against defendants for default on various payments due. In July, 1984, Mayer Bros, filed an amended complaint adding a count alleging defendants owed Mayer Bros. $30,000 on an open account. In response to Mayer Bros.’ request for admissions, defendants admitted corporate liability on the notes, but denied personal liability.

Mayer Bros, moved for a summary judgment on the pleadings, pursuant to Rule 56 of M.R.Civ.P., which was granted in June, 1985. The District Court found there was no genuine issue of material fact and ordered defendants to pay the amounts due. With respect to the personal liability of defendants McCloy and Embry, the court found each personally liable since each admitted signing the commercial credit application which provided for personal liability on payment for all purchases.

In reviewing an order for summary judgment, the standard of review for the appellate court is the same as that used by the trial court under Rule 56, M.R.Civ.P. Kronen v. Richter (Mont. 1984), [211 Mont. 208,] 683 P.2d 1315, 1317, 41 St.Rep. 1312, 1314. Thus, we may find summary judgment proper when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. “ Rule 56(c) M.R.Civ.P.

The initial burden is on Mayer Bros., as the moving party, to establish that the evidence raises no genuine issue of material fact. Morales v. Tuomi (Mont.1985), [214 Mont. 419,] 693 P.2d 532, 535, 42 St.Rep. 60, 62. In this instance, Mayer Bros, has alleged in its complaint and amended complaint that defendants breached their agreement to complete payment as scheduled on their promissory notes. Mayer Bros, attached copies of the commercial credit application agreement and the promissory notes to the complaints. The credit application clearly stated that defendants would be personally liable for merchandise purchased on behalf of the corporation. Thus the record reflects defendants, both personally and as a corporation, agreed to pay for the merchandise and assume the debts of the corporation.

Once the record discloses no genuine issue of material fact, the burden of proof shifts to the party opposing the motion for summary judgment to show by present facts of a substantial nature that a material fact issue does exist. Farmers Ins. Exchange v. Christen-son (Mont. 1985), [215 Mont. 260,] 697 P.2d 460, 462, 42 St.Rep. 337, 339; National Gypsum Co. v. Johnson (1979), 182 Mont. 209, 212, 595 P.2d 1188, 1189. Mere conclusory or speculative statements are insufficient to raise a genuine issue of material fact. National Gypsum Co. at 212, 595 P.2d at 1189. The opposing party “may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing there is a genuine issue for trial.” (Emphasis added.) Rule 56(e), M.R.Civ.P.

With this standard in mind, we turn to the record. There are two instances in the record where defendants address the issue of their personal liability. The first instance is the following exchange in the Requests for Admission:

“Admission No. 6: Admit that Exhibit ‘A ‘ provides that ‘if the applicant is now or later becomes a corporation, the undersigned agree to be personally liable for payment of all purchases.’
“Response to Admission No. 6: Denied.”

The second instance is in defendant’s brief in opposition to the motion for summary judgment. Defendants state:

“[T]here are issues of fact remaining for determination by this Court, including:
“(1) Are Richard Embry and Daniel McCloy individually responsible and liable for the two Promissory Notes executed in favor of the Plaintiff by Daniel Richard Jewelers, Inc.;
“(2) Are Richard Embry and Daniel McCloy individually liable for either of the two Promissory Notes executed in favor of the Plaintiff Daniel Richard Jewelers of Helena;
“(3) Is Daniel Richard Jewelers, Inc., liable for either of the Promissory Notes executed in favor of the Plaintiff by Daniel Richard Jewelers of Helena.”

Defendants’ brief goes on to argue that the admission of corporate liability does not establish “Richard Embry’s personal liability . . . [Or] . . . Daniel McCloy’s liability with respect to the Promissory Notes executed by Daniel Richard Jewelers, Inc. or Daniel Richard Jewelers of Helena . . .” This is the extent of defendants’ evidence of a material, actual issue for trial. Defendants offer no affidavits or testimony in support of their argument for no personal liability. In their brief on appeal, defendants argue that if the case is remanded for trial, they will testify that their intent at the time of signing the credit application was to be liable in a corporate capacity only. However, defendants present no evidence of a contrary intent except for this conclusory statement in their brief .

We have recently held that a party opposing a motion for summary judgment may not rest upon the mere allegations of the pleadings, but has an affirmative duty to respond by affidavits or sworn testimony with specific facts that show there is a genuine issue of fact for trial. B.M. By Berger v. State (Mont. 1985), [215 Mont. 175,] 698 P.2d 399, 401, 42 St.Rep. 272, 274-75; Rule 56(e), M.R.Civ.P. Without such specific factual evidence, we are unable to determine that any real factual controversy exists. Accordingly, we find the record indicates Mayer Bros, is owed the accrued sums plus interest, and defendants Embry and McCloy are liable on the debts in their personal capacities.

The judgment of the District Court is affirmed.

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


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    In re the MARRIAGE OF DAVID J. WARD, Petitioner and Appellant, and RUTH ANN WARD, Respondent and Respondent.
    No. 86-175.
    Submitted on Briefs June 24, 1986.
    Decided Oct. 9, 1986.
    725 P.2d 1211.
    Mark Bauer, Great Falls, for petitioner and appellant.
    John Iwen, Great Falls, for respondent and respondent.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

David J. Ward, the father, appeals from a November 8, 1985 order issued by the District Court of the Eighth Judicial District, Cascade County, granting a fixed visitation schedule. We affirm.

The issue raised on appeal is whether the District Court erred in granting the father approximately 75 days of visitation a year under the terms of Section 40-4-224(2), MCA (1985).

The mother and father were divorced on March 14, 1980. In September, 1982, the District Court amended the dissolution decree to provide that the only child, a son, be placed in joint custody, giving the mother primary residential custody. Throughout this time, until June, 1985, both parents lived in Great Falls. In June, 1985, however, the mother indicated that she was planning on moving to Butte.

Because the parties were unable to work out a mutually acceptable visitation schedule, appellant father filed a motion for filed visitation with the District Court. After hearing the matter and reviewing proposed visitation schedules submitted by the parties, the District Court entered its order on visitation, dated November 8, 1985. This order gave the father visitation on every third weekend, alternating holidays, four weeks during the summer and freedom to visit the child whenever the father is in Butte, provided he, gives the mother at least 24 hours notice.

The appellant father filed a motion to amend this visitation order, on which the District Court did not act. This appeal resulted.

Father contends on appeal that the District Court failed to follow the language of Section 40-4-224(2), MCA, which states:

“For the purposes of this section, ‘joint custody’ means an order awarding custody of the minor child to both parents and providing that the physical custody and residency of the child shall be allotted between the parents in such a way as to assure the child frequent and continuing contact with both parents. The allotment of time between parties shall be as equal as possible; however, each case shall be determined according to its own practicalities with the best interests of the child as the primary consideration.”

The District Court order gave the father about 75 days of visitation out of a total of approximately 170 available (non-school) visitation days. Father’s proposed plan would have awarded him an average of 119 days visitation a year. He requested alternating weekends and holidays as well as almost the entirety of his son’s summer vacation. His plan, the father contends, allots visitation time as equally as possible. Father argues that under the recently adopted language of Section 40-4-224(2), MCA, the District Court must automatically provide equal amounts of the child’s time with each of his parents. He also contends that if the District Court fails to do this, it should specifically set forth its reasons for deviating from the equal time “mandate. “

The District Court has no duty to make the findings which the father is demanding. The statute states: “The allotment of time between parties shall be equal as possible; however, each case shall be determined according to its own practicalities with the best interests of the child as the primary consideration.” Section 40-4-224(2), MCA. To impose the father’s interpretation of this statute would be an unreasonable burden that would further hamper the already beleaguered judges of the district courts in custody and visitation cases. Further, it must be noted that the statute requires that the equal time recommendation be balanced by the practicalities of providing for the best interests of the child. The best interests of the child are a “primary consideration.”

The standard of review for custody and visitation is as follows:

“This Court will not substitute its judgment for that of the trier of fact. We will consider only whether substantial credible evidence supports the findings and conclusions. Findings will not be overturned unless there is a clear preponderance of evidence against them, recognizing that evidence may be weak or conflicting, yet still support the findings.”

Jensen v. Jensen (Mont. 1981), 629 P.2d 765, 768, 38 St.Rep. 927, 930. Further, the appellant must overcome the presumption that the District Court’s order is correct. Jensen v. Jensen (Mont. 1979), 597 P.2d 733, 36 St.Rep. 1259. Finally, a reviewing court is never justified in substituting its discretion for that of the trial court.

“In determining whether the trial court abused its discretion, the question is not whether the reviewing court agrees with the trial court, but, rather, did the trial court in the exercise of discretion act arbitrarily without the employment of conscientious judgment or exceed the bounds of reason, in view of all the circumstances, ignoring recognized principles resulting in substantial injustice.” Porter v. Porter (1970), 155 Mont. 451, 457, 473 P.2d 538, 541.

The instant case is clearly a matter where the trial court is in the best position to observe the witnesses and acquire a feel for their credibility and character. The trial court is also best able to appreciate their ability to cooperate within the requirements set by. the visitation order and to determine a course of visitation that is in the child’s best interest. The District Court order is neither arbitrary nor beyond the bounds of reason. Father charges that the District Court did nothing more than look at the parties’ written custody proposals and draw middle ground between them. However, the court’s order is in keeping with the court’s perception of what is in the best interest of the child and the statutory requirement that “each case shall be determined according to its own practicalities,” Section 40-4-224(2), MCA. A very real practicality was recognizing that the allotment of time need only be as equal as it is possible to make it. Here, the District Court recognized that it was neither practical, possible, nor in the best interests of the child to follow the father’s proposed visitation schedule.

Affirmed.

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


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    INTERSTATE PRODUCTION CREDIT ASSOCIATION, a corporation, Plaintiff and Respondent, v. ROBERT K. ABBOTT and Rita Abbott, husband & wife, Defendants and Appellants.
    No. 86-188.
    Submitted on Briefs Aug. 14, 1985.
    Decided Oct. 9, 1986.
    726 P.2d 824.

      Robert K. Abbott, pro se.
    Craig R. Buehler, Lewistown, for plaintiff and respondent.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

This is an appeal from the order of the District Court, Tenth Judicial District, Fergus County, authorizing plaintiff to take possession of collateral pursuant to a security agreement between plaintiff and defendants. We affirm the District Court order.

Defendants raise two issues on appeal. Defendants first argue that plaintiff Interstate Production Credit Association (PCA) was not the real party in interest and therefore had no right to seize the collateral. Defendants contend they entered into an agreement with Central Montana Production Credit Association, and that it was incumbent on plaintiff Interstate PCA to prove it had an interest in the security agreement. Interstate PCA responds that the issue of real party in interest was not raised at the hearing, and is therefore barred from being considered for the first time on appeal.

Rules 17(a) and 9(a), M.R.Civ.P. are identical to the federal rules. Rule 17(a) states: “Every action shall be prosecuted in the name of the real party in interest.” Under Rule 9(a), M.R.Civ.P., challenges to a party’s capacity to sue or be sued must be raised by specific negative averment in the pleadings. Failure of a party to raise the issue of capacity by specific negative averment in the responsive pleading or in a motion before the pleadings results in a waiver of that defense. Summers v. Interstate Tractor & Equipment Co. (9th Cir.1972), 466 P.2d 42, 49.

In his opening statement, counsel for Interstate PCA explained that Central Montana PCA and Interstate PCA were “one and the same identities” [sic]. Defendants did not object to Interstate PCA’s standing at that time, or at any other time during or after the hearing. Their first challenge to PCA’s standing is here on appeal. We therefore hold defendants’ failure to assert plaintiff’s lack of standing in a timely manner is a waiver of their right to this defense.

The second issue raised by defendants is whether the District Court erred in finding the security agreement debt was not discharged by an accord and satisfaction. Defendants’ claim of accord and satisfaction is based on the following facts.

On January 2, 1985, defendants entered into a loan and security agreement with the PCA. They used their farm machinery, livestock and crops as collateral. The defendants defaulted on their regular loan installment in July, 1985. As of December 5, 1985, the date of the notes’ maturity, defendants owed PCA over $130,000. In the fall of 1985, defendants offered to settle the debt with PCA. Defendants proposed to give PCA the machinery listed on the security agreement, listed at $66,000 plus the proceeds from sale of cattle in exchange for extinguishment of the debt. PCA refused the offer.

On December 7, 1985, defendants received a $3,126.60 check from the sale of cattle at the Public Auction Yards in Billings. The check was made jointly payable to defendants and PCA, since there was a chattel mortgage on defendants’ brand to the PCA. Defendants took the check to a print shop in Billings and had the following language printed on the back of the check:

“Payee Abbott offers his interest in this draft to co-payee as an accord between payees, whereby acceptance of his interest herein will extinguish all obligation existing as allowed by 28-1-1401, M.C.A. 1983. Endorsement hereof by co-payee is acceptance of this offer and is meant to be evidence of full satisfaction extinguishing all debt as specified 28-1-1402 etal supra, [sic] Co-payee intends hereby that its endorsement is acceptance of part performance after breach and that same operates as a full and separate receipt for the consideration and evidences full execution of accord and releases Abbot fully from all obligation existing now and forever. “

The typeset used was similar to that already printed on the check by the Public Auction Yards.

On December 18, 1985, defendants presented the above endorsed check to a PCA receptionist-cashier at the Lewistown office, saying they had a check for payment on cattle they had sold. The receptionist took the check, stamped it for deposit, and gave defendants a receipt crediting their loan account. Defendants argue that since the receptionist could have read the printed endorsement and rejected the check, but did not do so, she accepted the terms of the endorsement. They argue that the printing on the back of the check is an accord, and that by cashing the check, PCA performed the satisfaction. Defendants rely on Sections 28-1-1401 through - 1403, MCA, as support for their contention.

Montana statutes define accord and satisfaction as follows:

“28-1-1401. Accord — definition and effect. An accord is an agreement to accept in extinction of an obligation something different from or less than that to which the person agreeing to accept is entitled. Though the parties to an accord are bound to execute it, yet it does not extinguish the obligation until it is fully executed.
“28-1-1402. Satisfaction — definition and effect. Acceptance by the creditor of the consideration of an accord extinguishes the obligation and is called satisfaction.”

The critical language is that “an accord is an agreement.” This presupposes a meeting of the minds of the parties as to the terms of the accord. This Court has held “[a]n accord and satisfaction is founded upon contract . . . .” Sawyer v. Somers Lumber Company (1929), 86 Mont. 169, 177, 282 P. 852, 854. The essential elements of a contract are 1) parties capable of contracting; 2) their consent; 3) a lawful object and 4) adequate consideration. Section 28-2-102, MCA. As to the element of consent, it must be free, mutual and communicated by each party to the other. Section 28-2-301, MCA.

The element of mutual consent is clearly lacking in the alleged agreement between defendants and PCA. Defendants, in an otherwise routine transaction, presented the PCA receptionist with a Public Auction Yard check, merely telling her they were there to present a check from sale of their cattle. They did not indicate to her that they were there to negotiate an accord. The language printed on the back of the check by which the defendants purport to bind PCA, was typeset in such a manner as to make the language appear to be boilerplate. Defendants admitted at the hearing below that they hoped no one at PCA would read the language before cashing the check.

This Court has held that the endorsement of a check by a creditor for the purpose of cashing it is not such a writing as would give rise to an accord under the Montana statutes. Geissler v. Nelson (Mont. 1986), [222 Mont. 409,] 722 P.2d 632, 635, 43 St.Rep. 1372, 1376; Sawyer v. Somers Lumber Co (1929), 86 Mont. 169, 177, 282 P. 852, 854. The presentation of a check in order to trick the creditor into extinguishing an existing obligation does not rise to the level of a new agreement. Our review of the record indicates the District Court’s finding that no accord and satisfaction was executed, and that PCA was entitled to take possession of the collateral pursuant to the security agreement, is supported by substantial, credible evidence.

We affirm the District Court.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES MORRISON, WEBER and HUNT concur.