author: JUSTICE WEBER

text:
    In the MATTER OF T.A.S., A Youth under the Age of Eighteen.
    No. 90-118.
    Submitted on Briefs July 20, 1990.
    Decided Sept. 4, 1990.
    797 P.2d 217.

      Diane R Leibinger and David E. Stenerson, Public Defense Office, Missoula, for appellant.
    Robert L. Deschamps, III, County Atty., Martha E. McClain, Deputy County Atty., Missoula, Marc Racicot, Atty. Gen., Patti Powell, Asst. Atty. Gen., Helena, for respondent.
   JUSTICE WEBER

delivered the Opinion of the Court.

T.A.S., a youth, appeals from an order entered January 18, 1990 by the District Court of the Fourth Judicial District, Missoula County. The Youth Court found: (1) that the youth had committed the offense of domestic abuse, a misdemeanor, (2) is ungovernable, and (3) that the youth had violated the terms of his probation. Based on these findings and pursuant to the options available to the Youth Court under § 41-5-523, MCA, the court found T.A.S. to be a delinquent youth and ordered that T.A.S. be committed to the custody of the Department of Family Services (Department) until he reaches the age of 19 years or sooner if released by the Department. The Youth Court also found that T.A.S. was in need of placement in other than his own home. From that order T.A.S. appeals. We affirm.

The issues before this Court are:

1. Is § 41-5-523, MCA, unconstitutionally broad and vague as it relates to the disposition of a delinquent youth?
2. Did procedural errors in commitment proceedings deprive appellant of equal protection under the law?
3. Did the Youth Court abuse its discretion when it committed appellant to the Department of Family Services until the age of 19?
4. Was it error for the Youth Court and the Department of Family Services to fail to seriously consider alternative placement?

Appellant T.A.S. is a 16 year old minor. T.A.S.’s first contact with Youth Court was on February 29,1988, when T.A.S. was 14 years old. At that time the Youth Court found T.A.S. to be a youth in need of supervision and ordered T.A.S. to be committed to the custody of the Department for a 45-day evaluation. Following the evaluation, a dispositional hearing was held and on July 13,1988 the Youth Court ordered that T.A.S. be committed to the custody of the Department with the recommendation that T.A.S. be placed at the Excelsior Program in Spokane, Washington. Upon T.A. S.’s completion of the Excelsior Program, a final dispositional hearing was held on September 29, 1989. The Youth Court ordered T.A.S. to be committed to the custody of the Department with the recommendation that T.A.S. be placed at Pine Hills School for Boys until he reached the age of 19 years or sooner released by the Department. The Youth Court then suspended the order and T.A.S. was placed on probation under the supervision of the Youth Court Probation Department.

On January 18,1990, T.A.S. again appeared in Youth Court. The court found (1) that T.A.S. had caused bodily injuiy to his sister by grabbing her around the throat and choking her which constituted the offense of domestic abuse, a misdemeanor, in violation of § 45-5-206, MCA, (2) that T.A.S. was ungovernable in violation of § 41-5-103(14), MCA, and beyond the control of his mother, and had left his mother’s home without permission and did not return, and (3) that T.A.S. had violated the terms of his probation by failing to report tohis probation officer as required by his probation and by failing to complete counseling as directed by his probation officer.

Consequently, the Youth Court found T.A.S. to be a delinquent youth as defined in § 41-5-103(13), and that the youth was in need of placement other than his own home. The court ordered that T.A.S. be committed to the custody of the Department until he reaches the age of 19 years or sooner released by the Department. It is from this order that T.A.S. appeals.

I

Is § 41-5-523, MCA, -unconstitutionally broad and vague as it relates to the disposition of a delinquent youth?

Section 41-5-523, MCA, gives authority to the Youth Court to commit a delinquent youth to the care and custody of the Department. The Department determines the appropriate placement and rehabilitation program for the youth after considering the recommendations made by a youth placement committee. Sections 41-5-523(2), 41-5-526, 41-5-527, MCA.

The Youth Court Act, § 41-5-101, MCA, et seq., allows the Department to place a youth in a youth correctional facility even when the youth has not been declared a serious juvenile offender by a youth court. T.A.S. challenges this authority as an unconstitutionally broad delegation of unbridled power.

In response we point out several statutory limitations on the Department’s power of placement. Section 41-5-523(2)(b), MCA, limits the maximum period a youth may be held in a youth correctional facility to the maximum period of imprisonment that could be imposed upon an adult convicted of the offense or offenses that brought the youth under jurisdiction of a youth court. This statute would require the Department to provide other appropriate placement and rehabilitation once the maximum period is reached. In addition, § 41-5-523(6), MCA, allows a youth court to modify any of its orders at any time upon notice to the Department and subsequent hearing. This Court has held that a youth court has the authority to review the decision of the Department to determine if the placement is in the best interests of the youth to assure that the youth retains his rights in case the Department exceeds or abuses its authority. In the Matter of Application of Peterson on Behalf of B.S.M., a youth, (1989), 235 Mont. 313, 316, 767 P.2d 319, 321.

In addition, the Youth Court Act provides a procedure whereby a youth placement committee makes recommendations for placement to the Department and outlines the procedure the Department must go through if it chooses to reject the committee’s recommendation. Section 41-5-527, MCA.

We hold that § 41-5-523, MCA, is not unconstitutionally broad on its face in giving the power to the Department to make placements of youth committed to its custody and care by a youth court.

T.A.S. also contends the statute is unconstitutionally vague. The standard to judge a statute for vagueness is stated in State v. Woods (1986), 221 Mont. 17, 22, 761 P.2d 624, 627.

“The general rule is that a statute is void on its face if it fails to give a person of ordinary intelligence fair notice that his contemplated conduct is forbidden. United States v. Harriss (1954), 347 U.S. 612, 74 S.Ct. 808, 98 L.Ed. 989; City of Choteau v. Joslyn (1984), 678 P.2d 665, 668, 41 St.Rep. 492, 497.”

[WJhere statutes are so vague and uncertain in their terms as to convey no meaning or if the means of carrying out those provisions are not adequate or effective, the courts must declare the penal provisions void. Missoula High School Legal Defense Association v. Superintendent of Public Instruction (1981), 196 Mont. 106, 112, 637 P.2d 1188, 1192.

The statute clearly outlines the options and limitations in disposition available to a youth court and clearly places limits on the Department in its placement and rehabilitation of youth committed to its care and custody. We hold § 41-5-523, MCA, is not vague.

II

Did procedural errors in commitment proceedings deprive Appellant of equal Protection under the Law?

T.A.S. argues that he was denied equal protection under the law based on two separate theories. The first theory is that the status of the youth, the financial resources of the parents, and the available funds of the Department all work together to result in some youthful offenders being treated differently than others who are similarly situated. The basis of T.A.S.’s argument appears to be that if the home environment of T.A.S. would have allowed return to his home or if his mother would have had adequate financial resources to provide alternative placement, T.A.S. would not be placed in a youth correctional facility. There is no basis in the record to indicate that the condition of T.A.S.’s home environment or the financial resources of his mother were determining factors in T.A.S.’s placement.

The second theory of T.A.S.’s equal protection argument is that T.A.S. claims the Department failed to establish a record of the placement committee proceedings that can be reviewed by this Court. There is no basis in the record to substantiate T.A.S.’s claim that no record was made.

Therefore, we hold that T.A.S. has failed to present any facts which establish an equal protection claim.

III

Did the Youth Court abuse its discretion when it committed appellant to the Department of Family Services until the age of 19?

It is well settled in Montana that absent a clear showing of abuse of discretion, the District Court judgment will not be overruled. Gray v. Gray (1990), [242 Mont. 69,] 788 P.2d 909, 47 St.Rep. 552.

T. A.S. claims that because the offense that led to the Youth Court’s determination that he is a delinquent youth was only a misdemeanor, he should not have been committed to the Department for three years. T.A.S. contends this is two and a half years longer than he could have been incarcerated for the offense if he had been convicted as an adult and therefore was a clear abuse of discretion.

Both the Youth Court Act and this Court have made it clear that a delinquent youth is not committed to the Department as punishment for a crime, but is committed as a delinquent youth for care, protection and rehabilitation. Section 41-5-102(2), MCA. In the Matter of C.S. (1984), 210 Mont. 144, 146, 687 P.2d 57, 59. Commitment is strictly for rehabilitation, not retribution. Section 41-5-106, MCA. C.S. 210 Mont. at 146, 687 P.2d at 59. The purpose of the Youth Court Act is “to provide a mechanism through which the state can act as the parens patriae of its youth.” Id. at 147, 687 P.2d at 59. The Department fulfills that roll under the Act and it was not an abuse of discretion to commit appellant to the Department until the age of 19.

IV

Was it error for the Youth Court and the Department to fail to seriously consider alternative placement?

Nothing in the record of the Youth Court proceedings in this case indicate that the judge failed to consider alternative placement. This was not the first time T.A.S. had been before the Youth Court. In the previous actions, T.A.S. had been placed in his mother’s care, in an attention home, and in an out-of-state rehabilitation program. Several times T.A.S. had run away. Under these facts there is no indication that the judge has failed to consider alternative placements for the appellant in this case.

Nothing in the record before this Court indicates a failure of the Department to consider alternative placement. Absent a proper record, this Court is not able to review T.A.S.’s claim.

Therefore, we hold that appellant has failed to establish his claim on this issue.

The District Court is affirmed.

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


source: Caselaw Access Project

author: JUSTICE BARZ

license: Public Domain

text:
    SCOTT L. GRABER, Individually, and Doing Business as Northwest Publishing Company, Plaintiff and Appellant, v. STATE FARM FIRE AND CASUALTY COMPANY, Colin C. Andrews, and Duane Paseman, Defendants and Respondents.
    No. 89-505.
    Submitted May 17, 1990.
    Decided Sept. 4, 1990.
    797 P.2d 214.

      Dana L. Christensen, Debra D. Parker, Murphy, Robinson, Heckathorn & Phillips, Kalispell, for plaintiff and appellant.
    Stephen C. Berg, Warden, Christiansen, Johnson & Berg, Kalispell, for defendants and respondents.
   JUSTICE BARZ

delivered the Opinion of the Court.

In the fall of 1983, Scott L. Graber purchased a business insurance policy from State Farm Fire and Casualty Company. On May 29, 1987, Scott L. Graber, individually and d/b/a Northwest Publishing Company, filed a complaint in the District Court of the Eleventh Judicial District, Flathead County, alleging damages as a result of the refusal by State Farm, Colin C. Andrews and Duane Paseman to offer a defense or coverage for a claim made against Graber. On March 10, 1989, State Farm and Duane Paseman moved for summary judgment pursuant to Rule 56, M.R.Civ.P., requesting that the District Court determine as a matter of law that no coverage existed under the business policy for the claim submitted by Graber. The court granted State Farm’s and Paseman’s motion for summary judgment, finding that no coverage existed because there was no damage to “tangible” property. Graber appeals this decision. We affirm.

The following issues were raised on appeal:

1. Did the District Court err in granting summary judgment in favor of State Farm and Paseman?
2. Did an “occurrence” exist as defined in the State Farm Policy?

In 1976 Graber established a publishing and advertising business in Kalispell, Montana, under the assumed name of Northwest Pub-fishing Company. Among other things, Graber published an annual, magazine- style, tourist information periodical known as Travel Guide. ClaraEllen Anderson had been employed by Graber at Northwest Publishing Co. since August of 1986. She had previously worked approximately one and one-half years with the company as a part-time employee. Her duties consisted of typesetting, lay-out, camera work and copyrighting. Anderson also assisted in the production of Travel Guide. Her involvement with the production of this publication consisted primarily of obtaining and/or writing copy relating to each geographical region. Graber was the owner of Northwest Publishing Co. at all times during Anderson’s employment.

Since 1969, Graber had purchased several insurance policies from Kalispell State Farm agent, Colin Andrews, for personal and business purposes. In the fall of 1983, Graber contacted Andrews for the purpose of purchasing a new business policy. Graber was purchasing a building on North Main Street in Kalispell to use as a new business location for bis publishing company. Andrews inspected the premises and thereafter issued Graber a business policy, effective on approximately November 1, 1983. The policy provided coverage for the building and personal property to the extent of $60,000 and $19,000, respectively. The policy also provided liability coverage in the aggregate amount of one million dollars per occurrence together with $25,000 per accident on medical coverage. Graber also contends that at the time he purchased this business policy, that State Farm’s agent, Andrews, assured him that the policy would afford Graber protection from copyright and editorial infringement claims. However, this issue is not presently before this Court.

On November 6, 1985, Graber was served with a complaint filed by Alaska Northwest Publishing Co. in the United States District Court for the Western District of Washington. In its complaint, Alaska Northwest alleged that a portion of its publication, The Milepost, was copied by Graber in his publication, Travel Guide. Graber gave notice of the lawsuit to State Farm by filling out a “Fire and Casualty Claim Report” form in agent Andrews’ office in Kalispell. Graber kept State Farm apprised of the subsequent developments in the litigation.

Graber agreed on May 2,1986 to settle with Alaska Northwest by paying them $40,000 plus costs and interests on that sum to be paid over a period of five years. Prior to settling with Alaska Northwest, Graber informed State Farm that settlement appeared imminent. He asked State Farm whether it would provide a defense or coverage. State Farm did not respond.

After the settlement agreement between Alaska Northwest and Graber was signed, Graber again asked State Farm to respond to his request for a defense or coverage. On May 21, 1986, State Farm, in writing, denied coverage due to the “intentional” nature of the alleged actions, and the definition of “occurrence” in the policy. On October 21,1986, State Farm, in writing, canceled Graber’s “Business Policy.”

On May 29, 1987, Graber, individually and d/b/a Northwest Publishing Co., filed a complaint in the District Court of the Eleventh Judicial District alleging damages as a result of the refusal by State Farm, Andrews and Paseman to offer a defense or coverage for a claim made against Graber. On March 10,1989, State Farm and Paseman moved for summary judgment, requesting that the District Court determine as a matter of law that no coverage existed under the “Business Policy” for the claim submitted by Graber. The court granted State Farm’s and Paseman’s motion for summary judgment after finding that no coverage existed because there was no damage to “tangible” property. Graber appeals the court’s decision in regard to these two defendants.

The first issue raised on appeal is whether the District Court erred in granting summary judgment in favor of State Farm and Paseman.

The business insurance policy which Graber bought provided that:

“[T]he Company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, property damage or personal injury caused by an occurrence to which this insurance applies.”

The essential question therefore is whether Alaska Northwest suffered “property damage” as a result of the plagiarism by Graber’s employee from Alaska Northwest’s publication, The Milepost. Graber first argues that Alaska Northwest’s publication is tangible property. Graber notes that the Alaska Northwest’s complaint stated that Graber’s employee’s plagiarism made its publication, The Milepost, less useful and therefore Graber argues that as a consequence “property damage” occurred to the publication.

The insurance policy that Graber purchased contained two definitions for “property damages,” one stating that property damage occurs if “physical injury to or destruction of tangible property” is found and the other stating that property damage occurs if there is “loss of use of tangible property which has not been injured.” Graber argues that the damage to Alaska Northwest’s publication, as a result of Graber’s plagiarism, fits within the second definition.

The publication, The Milepost, is indisputably tangible property. The dispute, however, lies in whether plagiarism of the publication constitutes property damage to the publication. While Graber argues that it does constitute property damage, respondents State Farm and Paseman argue that this case only involves copyright and trademark infringement which they argue is intangible property.

The publication The Milepost is clearly a piece of tangible property. The publication was not physically injured or destroyed and therefore it does not fit -under the first definition. However, we must also examine whether Graber may recover under the second definition which states that property damage occurs if there is “loss of use of tangible property which has not been injured.”

Because the trial court granted summary judgment in State Farm’s favor, we view the facts in the light most favorable to Graber. See Nitschke v. Blue Cross of Montana (1988), 231 Mont. 113, 751 P.2d 175. Only if an issue of material fact remains in dispute will we reverse the trial court’s grant of summary judgment. Graham v. Montana State University (1988), 235 Mont. 284, 287, 767 P.2d 301, 303.

Tangible property is property that is capable of being handled, touched or physically possessed. Lamar Truck Plaza, Inc. v. Sentry Ins. (Colo.App. 1988), 757 P.2d 1143, 1144. See also Sturges Manufacturing Co. v. Utica Mutual Ins. Co. (1973), 347 N.Y.S.2d 388, 75 Misc.2d 416 and Lay v. Aetna Ins. Co. (Tex.Civ.App. 1980), 599 S.W.2d 684. Alaska Northwest’s complaint against Graber alleged “lost advertising business, . . . substantial loss of revenues, . . . irreparable injury to its reputation and good will...” none of which qualifies as tangible property. As the trial court correctly noted, the complaint alleges economic losses. Montana courts have consistently held that in order for economic loss to be covered by insurance a direct physical injury to tangible property must occur. Safeco Ins. Co. v. Munroe (1974), 165 Mont. 185, 527 P.2d 64; Lindsay Drilling v. U.S. Fidelity & Guar. (1984), 208 Mont. 91, 676 P.2d 203; Aetna Casualty & Surety Co. v. First Security Bank (D. Mont. 1987), 662 F.Supp. 1126. Alaska Northwest did not allege direct physical injury to its tangible property, The Milepost, but alleged only economic loss. The trial court correctly concluded Alaska Northwest’s claims did not constitute property damage, or loss of use of tangible property.

The general rule is that the insurer has a duty to defend when a complaint filed against its insured sets forth facts which bring the event within the policy provisions. Atcheson v. Safeco (1974), 165 Mont. 239, 245, 527 P.2d 549, 552. The insurance company must look to the allegations of the complaint to determine if there is liability coverage. McAlear v. St. Paul Ins. Companies (1972), 158 Mont. 452, 456, 493 P.2d 331, 334. However, where the complaint alleges events not within the coverage of the policy, and the insurer would not be obligated to indemnify the insured if the complaining party recovered, then the insurer has no duty to defend. Id.

State Farm denied coverage and defense to Graber on the grounds that events alleged in Alaska Northwest’s complaint failed to meet the policy definition of “occurrence.” Part of the policy definition of “occurrence” requires resulting property damage. The economic loss alleged to have resulted from events is not, as a matter of law, property damage. Therefore, having determined that events failed to trigger indemnity, State Farm had no duty to defend.

The second issue raised on appeal is whether an “occurrence” existed as defined in the State Farm policy.

We do not have jurisdiction to address this issue. This issue has not yet been addressed by the District Court, and therefore is not properly before this Court.

We hold the trial court’s grant of summary judgment to be proper and, therefore, affirm.

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


text:
    RONALD KUNZ and ROSIE KUNZ, Plaintiffs and Appellants, v. BUTTE-SILVER BOW, A Political Subdivision of the State of Montana, and Dorothy K. Dugdale, Defendants and Respondents.
    No. 89-609.
    Submitted on Briefs May 3, 1990.
    Decided Sept. 4, 1990.
    797 P.2d 224.
    Leonard J. Haxby, Butte, for plaintiffs and appellants.

      Kathleen McBride, Butte, Brad Newman, Butte-Silver Bow Deputy County Atty., Mark V. Vucurovich, Butte, for defendants and respondents.
   JUSTICE BARZ

delivered the Opinion of the Court.

Ronald and Rosie Kunz appeal from an order of the District Court of the Second Judicial District, Silver Bow County, granting respondents’ motion to dismiss. We affirm.

Appellants own real property at 4809 Hope Road in Silver Bow County. Respondent Dorothy Dugdale owns an adjacent parcel at 4801 Hope Road. Appellants’ property is zoned residential while Dugdale’s property is part of a light industrial zone. Both parties acknowledge that the parcel including Dugdale’s property has been subject to fight industrial use for a substantial period. The surrounding property is zoned for commercial, residential and fight industrial use.

In August 1978, the Butte-Silver Bow government adopted a zoning ordinance which, after challenge by affected property owners, this Court found was enacted in accordance with Montana law. Martz v. Butte-Silver Bow Government (1982), 196 Mont. 348, 641 P.2d 426. The subject parcel was originally zoned fight industrial. On November 2, 1988, Butte-Silver Bow adopted a new zoning ordinance pursuant to § 76-2-301 et seq., MCA. This new ordinance included the original 1978 ordinance and its amendments.

Appellants contend the ordinance was adopted over their objections and they filed suit in District Court. Appellants filed a complaint against Butte-Silver Bow seeking a zoning change in the subject parcel from fight industrial to residential, or, in the alternative, creation of a buffer zone between their property and the business currently located at 4801 Hope Road. Following respondents’ motion to dismiss, appellants amended their complaint to add Dorothy Dugdale as a party and seeking review of Butte-Silver Bow’s adoption of the zoning ordinance. The District Court granted respondents’ second motion to dismiss concluding appellants lacked standing to challenge the zoning ordinance and failed to state a claim upon which relief could be granted by failing to exhaust their administrative remedies.

Appellants raise the following issues on appeal:

1. Did the District Court erroneously conclude that appellants had failed to exhaust their administrative remedies?

2. Did the District Court erroneously conclude appellants lacked standing to protest the zoning of the subject property?

Subsequent to filing of appellants’ reply brief, respondents moved to strike appendices A and B of that document for the reason that the matters contained therein were not part of the lower court record. We do not find it necessary to address this motion.

It is well settled that a district court properly grants a M.R.Civ.P. 12(b)(6) motion to dismiss only when the plaintiff could not prevail “[u]nder any set of facts which could be proved in support of the claim.” Mogan v. City of Harlem (1987), 227 Mont. 435, 437, 739 P.2d 491, 492-93. Respondents, by filing a motion to dismiss, admit all the well-plead allegations of appellants’ complaint, thus the District Court must “construe . .. [the complaint] in the light most favorable to . . . [appellant].” Mogan, 739 P.2d at 493, 739 P.2d 491.

The District Court concluded appellants lacked standing to challenge the zoning ordinance under question. The issue of standing has previously been addressed by this court in the case of Stewart v. Board of County Commissioners (1977), 175 Mont. 197, 573 P.2d 184. In Stewart this Court stated:

“[T]he issue presented for review must represent a ‘case’ or ‘controversy’ within the judicial cognizance of the state sovereignty. Additionally, the following minimum criteria are necessary to establish standing to sue a governmental entity: (1) the complaining party must clearly allege past, present or threatened injury to a property or civil right; and (2) the alleged injury must be distinguishable from the injury to the public generally, but the injury need not be exclusive to the complaining party.”

Stewart, 573 P.2d at 186.

Respondents emphasized before the District Court appellants’ failure to plead any specific injury incurred by them as a result of the enactment of the zoning ordinance. Appellants stated in their amended complaint:

“By adoption of a zone of M-l over the objections of the Plaintiffs and other residents in the area which is the subject of this Complaint, the Defendant, Butte-Silver Bow, committed an arbitrary and capricious act in violation of the Statutes of the State of Montana.
“The Plaintiffs herein in particular will suffer irreparable harm and damage if the subject M-l zone is allowed to exist in that they are not allowed the quiet and peaceful possession of their property. Their property has depreciated in value as a result of said zone. The M-l zone, by its very nature, is one that creates noise and certain pollutants which would harm the Plaintiffs’ property and in fact the Plaintiffs’ property is being harmed at the present time by the present use of the M-l zone and irreparable harm and damage will be caused the Plaintiffs and other users and owners in the neighborhood and area if said M-l zone is allowed to continue.”

From the above, we conclude the appellants’ recited facts which, if taken as true, afford appellants standing to challenge the zoning ordinance enacted.

The District Court further concluded appellants failed to state a claim for which relief can be granted on the grounds that appellants failed to exhaust their administrative remedies. We agree with this reason for denying relief.

The Butte-Silver Bow zoning ordinance was adopted by the Butte-Silver Bow Council of Commissioners pursuant to the municipal zoning procedures of §§ 76-2-301, et seq., MCA. Section 76-2-305, MCA, sets forth the procedure for formally protesting a proposed zoning regulation. Additionally, the Butte-Silver Bow Municipal Code at Chapter 17.52.010 et seq., provides for an administrative appeal remedy. Chapter 17.52.010 et seq., allows for the submission of a petition to the Council of Commissioners or the Zoning Commission asking for a resolution of intent to amend, change, modify or repeal the zoning boundaries or restrictions. While there are facts recited in appellants’ complaint showing they objected to the adoption of the zoning ordinance in question, there is nothing to show appellants followed the administrative appeal procedure available to them under the Butte-Silver Bow Municipal Code. Once appellants have exhausted their administrative remedies the District Court’s function is limited to a determination of whether adoption of the ordinance constituted an abuse of discretion. Schendel v. Board of Adjustment (Mont. 1989), [237 Mont. 278,] 774 P.2d 379, 382. The District Court could not order respondent, Butte-Silver Bow, to rezone or require buffer areas on the area in question. Such action would require the District Court to act as a “super zoning board” which is not a proper function. We hold the District Court properly concluded that appellants failed to exhaust their administrative remedies.

Affirmed.

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


text:
    SIDNEY BURGESS, Plaintiff and appellant, v. LEWIS AND CLARK CITY - COUNTY BOARD OF HEALTH, Defendant and Respondent.
    No. 90-067.
    Submitted on Briefs July 13, 1990.
    Decided Sept. 4, 1990.
    796 P.2d 1079.

      Frederick F. Sherwood, Reynolds, Motl and Sherwood, Helena, for plaintiff and appellant.
    K. Paul Stahl, Deputy County Attorney, Helena, for defendant and respondent.
   JUSTICE WEBER

delivered the Opinion of the Court.

The plaintiff-appellant, Sidney Burgess, brought a claim in the District Court for the First Judicial District, Lewis and Clark County, alleging violation of the Wrongful Discharge from Employment Act, breach of contract, and requesting enforcement of an agreement to arbitrate. Defendant, Lewis and Clark City-County Board of Health, made a motion to dismiss for failure to state a claim based on the theory that acts of county commissioners are immune under § 2-9-111, MCA. The District Court granted the motion to dismiss and plaintiff appeals. We affirm.

The issues presented on appeal are:

1. May an employee of a local government entity bring an action under the Wrongful Discharge from Employment Act, § 39-2-901, et seq., MCA, or is such an action prohibited by governmental immunity under § 2-9-111, MCA?

2. May an employee of a local government entity bring an action to enforce an arbitration agreement pursuant to the Uniform Arbitration Act, § 27-5-111, et seq., MCA?

Mr. Burgess was employed at Scratch Gravel Sanitary Landfill in April 1988. The Scratch Gravel Landfill District was created by the Lewis and Clark County Board of County Commissioners pursuant to § 7-13-203, MCA. The Board of Directors of a landfill district has the power and duty, with the approval of the county commissioners, to employ personnel. Section 7-13-215, MCA.

On July 1, 1988, the defendant, Lewis and Clark City-County Board of Health (Board) was designated by the Board of County Commissioners as the Board of Directors of Scratch Gravel Sanitary Landfill District, pursuant to § 7-13-214, MCA.

On July 7,1988, the Board sent a letter to Mr. Burgess terminating his employment as a result of budget changes in the new budget approved by the Board. In addition the letter encouraged Mr. Burgess to apply for a vacant position as a landfill equipment operator. The Board hired a different applicant for the equipment operator position. Alleging this violated the Board’s written personnel policies, Mr. Burgess brought a claim for wrongful discharge, breach of contract, and requesting enforcement of an agreement to arbitrate. The District Court held that the Board is immune from suit under § 2-9-111, MCA, and dismissed all three counts. Mr. Burgess appeals on the wrongful discharge and arbitration claims.

I.

May an employee of a local government entity bring an action under the Wrongful Discharge from Employment Act, § 39-2-901, et seq., MCA, or is such an action prohibited by governmental immunity under § 2-9-111, MCA?

Section 2-9-111, MCA, provides:

“Immunity from suit for legislative acts and omissions.
“(1) As used in this section:
“(a) the term ‘governmental entity’ includes the state, counties, municipalities, and school districts;
“(b)...
“(2) A governmental entity is immune from suit for an act or omission of its legislative body or a member, officer, or agent thereof.
“(3) Amember, officer, or agent of a legislative body is immune from suit for damages arising from the lawful discharge of an official duty associated with the introduction or consideration of legislation or action by the legislative body.”

Under this statute, acts of county commissioners are immune. Bieber v. Broadwater County (1988), 232 Mont. 487, 489, 759 P.2d 145, 147. Section 2-9-111, MCA, provides immunity even when the act is not legislative in nature. Peterson v. Great Falls School Dist. No. 1 & A (1989), 237 Mont. 376, 379, 773 P.2d 316, 318. The statute also provides immunity where an agent performs an act which is later ratified by the principal. Id. at 379-80, 773 P.2d at 318. Since § 7-13-215, MCA, requires the County Commissioners to approve the Board’s act of hiring and firing personnel, the Board was acting as an agent of the County Commissioners. Therefore, the Board is immune from suit for wrongful discharge under § 2-9-111, MCA.

Mr. Burgess argues that the Wrongful Discharge from Employment Act, § 39-2-901, et seq., MCA, has limited the County’s immunity in the area of wrongful discharge, citing the principle that the 1987 Act was passed later than the 1977 immunity statute.

Careful analysis of the Wrongful Discharge from Employment Act proves plaintiff’s argument unpersuasive. The purpose of the Act is to set limits on wrongful discharge claims by defining relevant terms, listing the elements necessary to establish a claim, limiting remedies available, and establishing a specific statute of limitations. Section 39-2-913, MCA, eliminates common-law remedies and provides that no claim is available except as outlined in the Act. In substance, the Act establishes various statutory limits for recovery upon claims for wrongful discharge. Nothing in the Act suggests a legislative intent to grant recovery where immunity statutes had previously denied recovery. Mr. Burgess has failed to present any logical support for his contention.

We hold that under § 2-9-111, MCA, the Board is immune from a wrongful discharge suit for terminating Mr. Burgess’ position at the Scratch Gravel Landfill.

II

May an employee of a local government entity bring an action to enforce an arbitration agreement pursuant to the Uniform Arbitration Act, § 27-5-111, et seq., MCA?

Mr. Burgess contends that he has a right to arbitration of his termination under the Lewis and Clark City-County Health Department Personnel Policies and Procedures Manual. Mr. Burgess’ affidavit, with the Manual attached, shows Mr. Burgess would have a right to arbitration only if he had completed the six-month probationary period. He has not done so and is therefore prohibited from seeking arbitration.

The District Court’s order granting dismissal on both counts is affirmed.

CHIEF JUSTICE TURNAGE and JUSTICES BARZ, HUNT and McDonough concur.


author: JUSTICE McDONOUGH

text:
    WILLIAM G. HARRIS, Petitioner and Appellant, v. CHARLENE BAILEY, Superintendent of Schools, Lincoln County, Montana, Sitting for Sonja Spannring, Superintendent of Schools, Park County, Montana, and Livingston School Districts Nos. 4 and 1, Park County, Montana, and Ed Argenbright, State of Montana, Superintendent of Public Instruction, Respondents and Respondents.
    No. 90-137.
    Submitted on Briefs July 13, 1990.
    Decided Sept. 4, 1990.
    798 P.2d 96.

      Chris J. Nelson, Nelson & Gai, Billings, for petitioner and appellant.
    Laurence R. Martin, Felt, Martin, Frazier & Lovas, Billings, Beda J. Lovitt, Office of Public Instruction, Helena, for respondents and respondents.
   JUSTICE McDONOUGH

delivered the Opinion of the Court.

This is an appeal from a judgment of the Sixth Judicial District, Park County, dismissing appellant William G. Harris’ (Harris) petition for judicial review. The District Court’s order affirmed the decision of the Livingston School District (School District) to terminate Harris for unfitness and incompetence. The order of the District Court is affirmed.

Harris raises seven issues with attendant sub-categories for review. Several of these issues can be combined, however, and we find the issues to be reduced as follows:

1) Whether subsequent to his termination for incompetence and unfitness, the School District was required to offer Harris the next available position in any area for which he was certified other than school psychologist;

2) Whether § 39-2-801, MCA, applies to this case;

3) Whether there was sufficient evidence to find that Harris was incompetent;

4) Whether the School District failed to follow proper procedure when it terminated Harris pursuant to § 20-4-207, MCA;

5) Whether the School District is immune from suit alleging a breach of the covenant of good faith and fair dealing.

The facts of this case constitute a long history, which includes two appeals to this Court. Although this appeal arises out of the School District’s termination of Harris for unfitness and incompetence on September 18, 1985, the initial controversy arose out of an earlier termination of Harris on April 14,1981, which was the subject of prior litigation and which was twice reviewed by this Court. The proceedings in both cases must be reviewed to understand the issues raised in this appeal.

Harris began his teaching career in the Gardiner school system in 1963. He taught in Gardiner until February 1973, when he was employed by the Livingston School District. During the school year 1980 — 1981, Harris’ position was changed by the School District to school psychologist.

During the greater portion of his career, Harris enjoyed the respect and admiration of his peers and his students. Unfortunately, the respect accorded him by some of his peers began to wane. Problems between Harris and certain employees of the School District arose and these problems eventually culminated in his termination by the Board of Trustees on April 14, 1981.

Harris appealed his termination and eventually the appeal reached this Court. See Harris v. Bauer (1983), 206 Mont. 480, 672 P.2d 26. [2 Ed. Law 196,] The principal issue on that appeal was whether Harris was a tenured teacher. This Court determined that he had obtained tenure and remanded the case to the District Court for a determination of the legality of the discharge procedures used by the School District in terminating Harris. The District Court remanded the case to the County Superintendent for a determination of this issue.

Upon remand, the Superintendent determined that the School District did not properly terminate Harris, and ordered that he be reinstated and awarded back pay and fringe benefits in the amount of $110,518.74. The County Superintendent further advised the School District to follow proper discharge procedures if it desired to discharge Harris.

Both Harris and the School District appealed the order of the County Superintendent. Harris maintained that the Superintendent failed to properly calculate the back salary owed to him and failed to award him a proper amount of interest and attorney’s fees. On appeal, the State Superintendent of Schools affirmed the decision in its entirety. Harris then appealed to the District Court. It also affirmed the decision of the County Superintendent. The decision of the District Court was appealed to this Court on October 22,1987. On appeal this Court adjusted Harris’ award by determining that the County Superintendent improperly deducted wages earned by Harris during the summer months. Harris v. Bauer (1988), 230 Mont. 207, 749 P.2d 1068.

During the course of this appeal, the School District again acted to terminate Harris for unfitness and incompetence pursuant to § 20-4-207, MCA. A letter was sent to Harris on July 23,1985 notifying him that a hearing would be held to determine whether he should be discharged. The termination hearing was held on September 18,1985 and at its conclusion the Board of Trustees voted to terminate Harris for incompetence and unfitness. Harris was represented by counsel at the hearing.

The decision of the Board of Trustees was appealed to the Acting County Superintendent of Schools who, after five days of hearing, affirmed the decision of the School District. Harris then appealed to the State Superintendent of Schools, who similarly affirmed the order terminating his employment. He then filed a petition for judicial review in the Sixth Judicial District, Park County. The matter was briefed by both parties and following oral argument, the Honorable Peter L. Rapkoch issued a written order affirming the decision. This appeal followed.

I

Whether the School District is required to offer Harris a teaching position in other areas of his certification.

When Harris was originally hired by the Livingston School District, he was certified to teach science, biology, chemistry and guidance counseling. It is his contention that subsequent to his discharge as a psychologist, the School District should have offered him a j ob teaching in one of the areas that he was certified. In making this argument Harris relies upon Massey v. Argenbright (1984), 211 Mont. 331, 683 P.2d 1332, [3 Ed. Law 142,] and Nye v. Dept. of Livestock (1982), 196 Mont. 222, 639 P.2d 498.

In Massey, a teacher with a fully satisfactory performance record was discharged as a result of a reduction in force. The school board in Massey, refused to offer the teacher a position that he was qualified to teach because he had never taught in that area and because a nontenured teacher already held the position. The District Court reversed and held that a school district cannot dismiss a competent tenured teacher and retain a nontenured teacher if the tenured teacher is qualified to teach in the area filled by the nontenured teacher. We affirmed the judgment of the district court. See Massey, 683 P.2d at 1335. In short Massey establishes the principle that under § 20-4-204, MCA, a tenured teacher who is discharged as part of a reduction of force has “bumping rights,” under certain conditions, over nontenured teachers.

The rule of law established in Massey does not apply to this case. We point out that the teacher in Masseyn was laid off for economic reasons under § 20-4-204, MCA. Harris, on the other hand was terminated for incompetence and unfitness pursuant to § 20-4-207, MCA. Therefore, the holding in Massey is not applicable to Harris’ case. However, public policy also dictates a rejection of his argument.

If Harris’ argument is followed to its logical conclusion the School District would have been required to terminate a nontenured teacher to make room for Harris, who was found to be incompetent. The goals of the State of Montana in educating its youth would not be served by such a result.

Harris also relies upon Nye v. Dept. of Livestock (1982), 196 Mont. 222, 639 P.2d 498. In Nye, the plaintiff worked for the Department of Livestock as a permit clerk. After two years of employment in that position, she was promoted. At the time of her promotion it was understood that she would go through a six-month probationary period before she received a permanent job at that level. The plaintiff failed at this job and was fired from the Department. On appeal, this Court found that Nye was properly terminated from the job that she was promoted to. However, we also held that because she had attained permanent status as a permit clerk, under § 2-18-101, MCA, the Department had an obligation to follow public policy expressed in its own regulations and conduct a hearing on the issue of her termination.

The holding of Nye does not apply to Harris’ case because it was not decided under school statutes. Harris’ termination occurred in accordance with § 20-4-207, MCA, a statute passed by the legislature to address the specific circumstance presented by this case, i.e., the termination of an incompetent teacher. Therefore, any reliance upon Nye, which involved completely different employment statutes, is misplaced.

Next, Harris argues that his employment was wrongfully terminated under § 20-4-207, MCA, because that section only applies to dismissal of teachers and not specialists such as school psychologists. This position is untenable. In Harris’ first appeal we held that he was a tenured teacher and was therefore entitled to all of the protections and benefits accorded tenured teachers under Title 20, Chapter 4 Montana Code Annotated. See Harris v. Bauer (1983), 206 Mont. 480, 672 P.2d 26 [2 Ed. Law 196]. This was a decision in his favor. His position at this juncture is totally at odds with this holding and is therefore contrary to both established law and his prior position which was taken in the earlier appeal. We hold that Harris was properly terminated under § 20-4-207, MCA.

II

Whether § 39-2-801, MCA, applies to this case.

We need not review the merits of Harris’ argument in regard to his allegation that the School District violated § 39-2-801, MCA, because we hold that this statute does not apply to the termination of teachers. Section 39-2-801, MCA, requires an employer, upon an employee’s request, to provide a discharged employee with a statement of the reasons for the discharge. If an employer refuses to abide by this request, he is forbidden from utilizing any reasons for discharge to justify the termination. Swanson v. St. John’s Lutheran Hospital (1979), 182 Mont. 414, 597 P.2d 702.

Harris maintains that the School District failed to provide him with a written statement for his discharge in 1981, when he was first terminated. Relying upon Swanson, he further argues that the School District is now precluded from utilizing any reasons at his second termination hearing, which occurred in 1985. We disagree.

Section 39-2-801, MCA, applies to employees and employers in general commerce. Termination of teachers is governed by § 20-4-207, MCA. Montana law provides that when there are two statutes, the more specific statute controls over the more general. See § 1-2-102, MCA; In re Stevenson’s Estate (1930), 87 Mont. 486, 289 P.2d 566. Section 20-4-207, MCA, is specific to teachers, and it controls and enumerates Harris’ remedies upon termination. Therefore, § 39-2-801, MCA, is inapplicable to this case.

Ill

Whether there was sufficient evidence to find that Harris was incompetent.

Findings of fact of an administrative agency are subject to the “clearly erroneous” standard of review. This Court cannot substitute its judgment for that of an agency on questions of fact. Section 2-4-704(2), MCA. If there is substantial credible evidence in the record, the findings are not clearly erroneous. Any agency’s conclusions of law are subject to the “abuse of discretion” standard of review. See § 2-4-704, MCA.

We must review the findings of fact and the ultimate conclusion of the County Superintendent that Harris was properly terminated according to the standard of review recited above. To begin, we note that there is ample testimony which was presented at Harris’ termination hearing which characterized him as a concerned, compassionate individual who is highly respected and appreciated by those who know him well. Apparently, Harris has enjoyed great popularity with his students. In fact, on at least one occasion he was picked by the students to speak at graduation ceremonies.

There is, however, sufficient evidence to support the conclusion that Harris was incompetent as a school psychologist. In May of 1981 it was recommended by school officials that Harris be terminated. Apparently, numerous complaints were lodged from teachers and parents concerning Harris’ work. Joy Waylander, the other psychologist employed by the School District, reviewed Harris’ testing score and psychological evaluations. She found the test scores inaccurate due to numerous, serious scoring and administration errors. She also noted deficiencies in Harris’ psychological reports in that they were vague and contradictory.

Mrs. Waylander’s findings ultimately led the School District to seek other experts to review Harris’ work. Eventually four experts reviewed 109 of the 400 cases prepared by Harris. As a result of their review, all experts agreed that Harris was incompetent.

In his brief on appeal, Harris does not contest the findings of the experts or the School District. Rather, he devotes a large portion of his brief arguing that because he has no formal training or education as a school psychologist it is unfair to judge his work according to the high standards set by the School District. We find this argument unpersuasive. Harris was employed as a school psychologist and he accepted the position. He must be judged according to the competencies expected of someone holding such a position. Any other role would effectively sanction the hiring of incompetent teachers and administrators in our public schools at the expense of the students.

The findings of the School District establishing Harris’ incompetence are supported by the record. They are not therefore clearly erroneous. Given this evidence, the conclusion of law stating that Hams was properly terminated for incompetence and unfitness was not an abuse of discretion. The judgment in this regard is affirmed.

IV

Whether the School District failed to follow proper procedures when it terminated Harris pursuant to § 20-4-207, MCA.

Harris next argues that the notice sent him by the School District informing him of the reasons for his dismissal was inadequate. He proceeds on two fronts in making this argument. First, he argues that the notice failed to adequately set forth specific deficiencies regarding his ability to teach. Second, he argues that because the School District inadequately set forth reasons for his termination in 1981, it should be precluded from amending its notice in 1985 to include further reasons for termination. In making this argument, he relies upon Lindgren v. Board of Trustees (1976), 171 Mont. 360, 558 P.2d 468.

We disagree with both of these assertions. To begin, we point out that Harris was fired due to his incompetence as a school psychol'ogist. He never taught at the Livingston School District and therefore it would have been impossible for the School District to enumerate instances of incompetency in this area. The reasons for Harris’ termination as a school psychologist are adequately set forth in the letter informing Harris of proposed action by the School District. He was therefore accorded adequate notice to present his case at his termination hearing. The fact that he was able to amass evidence in his favor and was accorded a five day hearing before the County Superintendent lends further credence to the opinion that he was not prejudiced due to lack of adequate notice.

Further, Harris’ reliance upon Lindgren v. Board of Trustees (1976), 171 Mont. 360, 558 P.2d 468, is unfounded. Lindgren involved a school district that attempted to dismiss a teacher for legally insufficient reasons. Shortly before Lindgren’s termination hearing the school district attempted to amend its notice to include additional reasons for dismissal. Upon review, this Court held that the school district was precluded from amending its notice.

The facts surrounding Harris’ case are completely different than those presented by Lindgren. The 1985 termination was a completely different proceeding than that of 1981. The procedures surrounding the 1985 termination were taken in response to the County Superintendent’s recommendation that the School District follow proper procedures if it wanted to discharge Harris. This recommendation was given by the Superintendent following the decision that Harris had not been properly terminated. Therefore, the notice sent Harris in 1985 was not an amendment to any notice given in 1981. Rather it was written notice, sent in compliance with statutory law to notify Harris of proceedings to be undertaken in order to bring about his termination.

V

Whether the School District is immune from suit alleging breach of the covenant of good faith and fair dealing.

Once again we need not address the merits of Harris’ argument concerning his allegations that the School District breached the covenant of good faith and fair dealing. Under § 2-9-111, MCA, the School District is immune from suits arising from the acts and omissions of its legislative body:

“2-9-111. Immunity from suit for legislative acts and omissions.
“(1) As used in this section:
“(a) the term ‘governmental entity includes the state, counties, municipalities, and school districts;
“(b) the term ‘legislative body” includes the legislature vested with legislative power by Article V of The Constitution of the State of Montana and any local governmental entity given legislative powers by statute, including school boards.
“(2) A governmental entity is immune from suit for an act or omission of its legislative body or a member, officer, or agent thereof.
“(3) Amember, officer, or agent of a legislative body is immune from suit for damages arising from the lawful discharge of an official duty associated with the introduction or consideration of legislation or action by the legislative body.
“(4) The immunity provided for in this section does not extend to any tort committed by the use of a motor vehicle, aircraft, or other means of transportation.”

The plain language of this statute shields the School District from any liability which may arise from Harris’ allegations concerning bad faith. See Peterson v. Great Falls School Dist. No. 1 & A (1989), 237 Mont. 376, 773 P.2d 316 [8 Ed.Law 61]. The term “governmental entity” is defined to include school districts. See § 2-9-111(1)(a), MCA. Under the plain language of § 2-9-111(2), MCA, governmental entities are immune from suit for actions taken by its legislative body, which is defined to include school boards. See § 2-9-111(1)(b), MCA.

VI

Conclusion

Having reviewed Harris’issues on appeal in full we find no reversible error committed by the District Court. Its judgment is therefore affirmed.

JUSTICES HARRISON, HUNT, BARZ and WEBER concur.


author: JUSTICE SHEEHY

text:
    JOHN HAROLD LEE, JR., and Sally Jean Lee, Plaintiffs and Respondents, v. JANE C. ARMSTRONG, a/k/a Clara Jane Armstrong, a/k/a Jane Armstrong Dunn, Victoria Kay Piedalue, Defendants and Appellants.
    No. 90-031.
    Submitted on Briefs May 16, 1990.
    Decided July 30, 1990.
    798 P.2d 84.

      Hugh G. Kidder, Missoula, for defendants and appellants.
    William R. Baldassin, Sullivan & Baldassin, Missoula, for plaintiffs and respondents.
   JUSTICE SHEEHY

delivered the Opinion of the Court.

Jane C. Armstrong appeals from the determination of the District Court, Fourth Judicial District, Missoula County, that Armstrong’s failure to convey real property to respondents constituted actual and constructive fraud entitling respondents to $17,838.50 in actual damages, $5,000 in punitive damages, $8,818.89 in attorney fees and costs. We affirm.

Appellant has raised numerous issues, several of which are not material to our determination whether to affirm the case. We therefore limit the issues raised by Armstrong to the following:

1. Whether the District Court erred in concluding that Armstrong’s acts and representations constituted actual fraud.

2. Whether the District Court erred in concluding that Armstrong’s acts concealed the true state of affairs concerning the property, constituting constructive fraud.

3. Whether the District Court erred in awarding Lee’s actual and punitive damages.

Jeanne A. Roth sold real property to Cunninghams in December, 1976. Cunninghams sold 20.1 acres of this property to Stiner in January, 1979. Stiner divided her property in two and sold 10 acres to Sheppard in May of-1979. Sheppard divided his property in two and sold 5 acres to appellant Clara Jane Armstrong and her husband, Byron John Armstrong, by contract for deed in May, 1979. Armstrongs acquired their interest as tenants in common.

Byr on J ohn Armstrong died in August, 1983. Prior to her husband’s death, Jane C. Armstrong, by certificate of survey, attempted to divide the parcel in two, as 1.25 acre and 3.75 acre plots. This certificate was not signed by the other owner, Byron John Armstrong, and was not signed by Jane C. Armstrong in the name in which she acquired her interest. No instrument of record was ever filed with the Missoula County Clerk and Recorder terminating the interest of Byron John Armstrong. After the death of her husband, Jane Armstrong again attempted to divide the property by certificate of survey, dividing the 3.75 acre portion into three 1.25 acre parcels. This second attempted division was deficient for the same reasons as the first.

Jane Armstrong attempted to transfer her interest in the 1.25 acre parcel at issue to her daughter, Victoria Kay Piedalue. No document transferring the interest of Jane Armstrong to Victoria Piedalue was ever recorded.

On or about August 1, 1984, respondents, John Harold Lee and Sally Jean Lee, entered into a contract for deed to purchase the property at issue from Victoria Kay Piedalue. All discussions and negotiations regarding the contract for deed occurred between the Lees and Jane Armstrong, acting as Piedalue’s attorney in fact. Piedalue had no involvement with the transaction.

The underlying Sheppard to Armstrong contract provided that “Grantees expressly understand that the property described herein is unrecordable in the Office of the Missoula County Clerk and Recorder until Grantor can qualify for an occasional sale exemption within the terms of the Montana Subdivision and Platting Act.” Jane Armstrong failed to include a similar provision in the Armstrong-Lee contract which she personally drafted.

Jane Armstrong also failed to include the following language mandated under § 76-3-303(5), MCA, to be included in all contracts for deed: “The real property which is the subject hereof has not been finally platted, and until a final plat identifying the property has been filed with the county clerk and recorder, title to the property cannot be transferred in any manner.” Nor did the contract provide that the payments by Lees were not to be distributed by the escrow agent to Piedalue or Armstrong until the final plat was filed, and that if the plat was not filed within two years of preliminary approval, all payments were to be refunded.

The contract for deed contained a covenant that Piedalue had marketable title to the property when, in fact, she had no recordable interest in the property whatsoever.

The contract was subject to underlying obligations, and states that Lees were purchasing the property subject to those obligations. However, the Lees were not permitted to review the underlying Sheppard-Armstrong contract despite repeated requests. Jane Armstrong had represented that Lees could prepay the entire remaining balance at any time upon two weeks’ advance notice. No restrictions are noted in either the contract or the escrow agreement. However, had Lees been able to review the Sheppard-Armstrong contract, they would have seen that Jane Armstrong could not freely prepay all consideration due -under the underlying contract until the year 1997.

Jane Armstrong indicated that she had filed the final certificate of survey, when in fact she had not done so. It was not filed until after this suit commenced. Armstrong also represented she would record the notice of purchasers interest, and took $50 from Lees for that purpose. That notice was not recorded.

On December 4, 1985, the Lees, through counsel, notified Armstrong and Piedalue of their default under the contract for failure to file the certificate of survey or notice of purchaser’s interest. In the letter, Armstrong and Piedalue were urged to take all curative measures. In follow-up correspondence dated May 9, 1986, counsel for Lees informed Piedalue and Armstrong that in light of their failure to act, the escrow agent had been instructed to hold all funds until status of the title had been resolved.

On August 1, 1986, Lees filed suit, alleging fraud, constructive fraud, deceptive practices, and breach of contract. Default was entered against Piedalue on June 3, 1987.

On November 17, 1987, Lees notified Armstrong’s attorney by certified mail that Lees were willing and able to pay the remaining balance on the contract, and stated that Armstrong had 10 days to provide proof of clear and unencumbered title to the property in order to forestall litigation. Armstrong failed to comply.

The case proceeded to a bench trial on July 17, 1989. The District Court found for the Lees on all issues. This appeal resulted.

Jane Armstrong contends that the District Court erred in attributing fraud to her acts. Specifically, Armstrong states that her representations that Piedalue could and would convey title to the Lees and that there was a legally established parcel were not acts constituting actual fraud.

The unrefuted facts of this case are that Jane Armstrong represented that Piedalue had good and merchantable title at the time of the contract, when Piedalue neither had title nor any recorded interest in the property whatsoever. Armstrong’s argument is that since she was not obligated to produce title until the entire contract price was paid, the fact that she could not produce good title at the beginning of the contract does not constitute fraud. This argument has no merit in this case. One of the bases for fraud was that Jane Armstrong represented that the seller had good and merchantable title when she did not. In addition, Armstrong failed to inform Lees that her late husband’s interest in the property had not been terminated. Armstrong told Lees that they could prepay the balance due at any time, and that the final certificate of survey relating to the property had been filed. These representations were false.

This Court has previously stated the nine requisite elements of fraud, in Van Ettinger v. Pappin (1978), 180 Mont. 1, 588 P.2d 988, 994:

“1. A representation;
“2. Falsity of the representation;
“3. Materiality of the representation;
“4. Speaker’s knowledge of the falsity of the representation or ignorance of its truth;
“5. Speaker’s intent it should be relied upon;
“6. The hearer’s ignorance of the falsity of the representation;
“7. The hearer’s reliance on the representation;
“8. The hearer’s right to rely on the representation;
“9. Consequent and proximate injury caused by the reliance on the representation.”

The trial court specifically found Armstrong’s above-stated representations to be false, and the materiality thereof. The court further found that Armstrong knew or should have known of their falsity, that Lees were unaware of the falsity and rightfully relied upon the representations. This Court will not set aside the lower court’s findings absent clear error. Rule 52(a), M.R.Civ.P. The evidence will be viewed in the light most favorable to the prevailing party, and credibility of witnesses and the weight accorded their testimony is for the District Court’s determination in non-jury settings. Bauer Ranch, Inc. v. Mountain West Farm Bureau Mutual Insurance Co. (1985), 215 Mont. 153, 695 P.2d 1307.

Jane Armstrong next contends that the lower court erred in its findings of constructive fraud. Specifically, Armstrong states that no constructive fraud was perpetrated upon the Lees regarding the true state of affairs of the property, as Lees had ample time and the duty to discover all pertinent facts.

However, the record is clear that Lees were persistent in their requests to view the underlying contract between Armstrong and her seller. Armstrong prevented Lees from viewing that contract, thereby denying Lees the opportunity to discover the defects in the title. Without viewing the underlying contract, Lees had no means of detecting the falsity of Armstrong’s assertions that Lees could prepay the amount due on their contract.

Also clear from the record is that Armstrong represented that Piedalue had an interest in the property, Armstrong having conveyed her interest to Piedalue. This representation was false, as no transfer of that interest was ever recorded and Armstrong was unable, as one of two tenants in common, to effect such a transfer.

Further, Armstrong repeatedly assured Lees that a final certificate of survey would be filed. Nonetheless, the final certificate was not filed until after Lees were compelled to file suit.

Section 28-2-406, MCA, describes constructive fraud:

“What constitutes constructive fraud. Constructive fraud consists in: (1) any breach of duty which, without an actually fraudulent intent, gains an advantage to the person in fault or anyone claiming under him by misleading another to his prejudice or to the prejudice of anyone claiming under him; or (2) any such act or omission as the law especially declares to be fraudulent, without respect to actual fraud.”

In Moschelle v. Hulse (1980), 190 Mont. 532, 622 P.2d 155, 158, this Court, in construing § 28-2-406, MCA, stated:

“Dishonesty of purpose or intent to deceive is not a requirement under this statute. Other jurisdictions hold that constructive fraud is invoked as a matter of law to prevent a party from being unjustly enriched as a result of false statements made, even if the deception is not knowingly made. (Cites omitted.)
❖ * * *
“Withholding relevant facts concerning purchased property can be a fraudulent act. (Cite omitted.) Furthermore, where a vendor by his conduct or words creates a false impression concerning a matter of vital importance to the purchaser, full disclosure of relevant facts may be required.”

This Court further stated in Jenkins v. Hillard (1982), 199 Mont. 1, 647 P.2d 354, 357, that:

“. . . [W]here a contract is induced by false representations as to material existent facts, which are made with the intent to deceive, and upon which the plaintiff relied, it is no defense, to an action for rescission or for damages arising out of the deceit, that the party to whom the representations were made might, with due diligence, have discovered their falsity, and that he made no searching inquiry into the facts . . . (Citing authority.)”

The District Court here found that Jane Armstrong had a duty to disclose the facts regarding the title and the underlying contract. Armstrong did not fully disclose all pertinent facts, which the lower court found constituted constructive fraud.

Armstrong next contends that the District Court erred in granting Lees damages under rescission of contract, rather than damages for breach of contract.

Armstrong misconstrues the damages awarded Lees. The court awarded the Lees $17,838.50 in actual damages resulting from Armstrong’s fraud and misrepresentation. This amount consisted of Lee’s down payment and monthly payments, property improvements and moving expenses. These were out-of-pocket expenses incurred by the Lees that the court found recoverable due to Armstrong’s actual or constructive fraud. These are clearly not rescission or breach of contract damages, as Armstrong was not a party to the contract. Armstrong argues that, at the least, the $7,965 in monthly payments (of $135 per month) should not be recoverable, but should be considered as rent. We disagree. Lees rightfully assumed at the time they entered the contract that their $135 per month payments would entitle them to use the property and to build equity in it. Because of Armstrong’s fraud, Lees built up no equity, and Armstrong should not prosper by her misrepresentation. The court’s actual damages award was proper.

Armstrong also takes issue with the court’s award of $5,000 in punitive damages, citing § 27-1-220, MCA, which prohibits punitive damages arising from a contract. However, § 27-1-220 was enacted in 1987, while this suit was filed in 1986. Compiler’s Comments to the Annotations state that § 27-1-220 affects only those claims arising after the effective date of the Act. The statute in effect at the time suit was filed was § 27-1-221, MCA (1985), which read:

“When exemplary damages allowed. (1) Subject to subsection (2), in any action for a breach of an obligation not arising from contract where the defendant has been guilty of oppression, fraud, or malice, actual or presumed, the jury, in addition to the actual damages, may give damages for the sake of example and by way of punishing the defendant.”

This Court has determined that if the conduct of a particular defendant is found to be fraudulent, under § 27-1-221, MCA, punitive damages may be awarded and an underlying contract does not defeat such an award. Purcell v. Automatic Gas Distributors, Inc. (1983), 207 Mont. 223, 673 P.2d 1246. The amount of punitive damages awarded is within the sound discretion of the trier of fact, Castillo v. Franks (1984), 213 Mont. 232, 690 P.2d 425, and where the District Court sits as trier of fact, it may award punitive damages. Shors v. Branch (1986), 221 Mont. 390, 720 P.2d 239.

Jane Armstrong raises the issue of whether the lower court erred in its determination that she is not entitled to attorney fees under § 28-3-704, MCA, and its provision for reciprocal contract rights to such fees. However, as Armstrong has been unsuccessful in both her suit and appeal, the application of the statute affords her no relief for attorneys fees.

Affirmed.

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


text:
    DANIEL DEBAR, Thomas V. Hornung and John S. Kochel, Plaintiffs and Appellants, v. TRUSTEES, YELLOWSTONE COUNTY ELEMENTARY SCHOOL DISTRICT NO. 2 and High School District No. 2, Defendants and Respondents.
    No. 89-620.
    Submitted on Briefs July 13, 1990.
    Decided Sept. 5, 1990.
    796 P.2d 1081.

      Emilie Loring, Hilley & Loring, Missoula, for plaintiffs and appellants.
    Laurence Martin, Felt & Martin, Billings, for defendants and respondents.
   JUSTICE WEBER

delivered the Opinion of the Court.

Three school teachers brought this action for monetary relief after being suspended without pay for 2V2 days. The District Court for the Thirteenth Judicial District, Yellowstone County, granted summary judgment in favor of the defendants. Plaintiffs appeal. We affirm.

The sole issue for our review is whether the District Court erred in granting summary judgment?

The facts in this case are simple and uncontested. Plaintiffs, three teachers (teachers), were seen drinking alcoholic beverages on the school bus on their way home from a mandatory staff-only field trip to Custer Battlefield. The drinking incident was reported to the building principal. The teachers admitted to drinking on the bus and the matter was referred to the School District’s central personnel administrators.

The administrators interviewed the teachers individually in separate meetings. At the end of each meeting, each teacher was informed that he was suspended pending further notice.

The next day, the teachers were notified that they were being suspended for 2V2 days without pay. School Board members were not involved in the decision.

After filing a grievance which was not arbitrated, and a petition in District Court for a writ of mandate which was denied, the teachers filed the present action as a wage claim, seeking wages for the V2 days salary that had been lost, plus statutory penalties and attorney fees under the Wage Protection Act. Concluding that the School District was immune under § 2-9-111, MCA; that § 20-4-207, MCA, does not apply to temporary suspensions; and that no wage claim existed; the District Court granted the School District’s motion for summary judgment and dismissed the case on its merits. From that decision, the teachers appeal.

Did the District Court err in granting summary judgment?

The teachers maintain that as teachers under contract with the School District, they may not be suspended without pay in the absence of action by the school board and compliance with the statutory requirements of § 20-4-207, MCA. In so contending, they argue that they were entitled to written notice and a hearing before they could be suspended.

The School District contends that because it is immune under § 2-9-111, MCA, this Court need not consider the merits of the case. It further maintains that § 20-4-207, MCA, is inapplicable to short-term suspensions. It urges that the statute only applies to dismissals, and a “suspension” is not a “dismissal”. The School District claims that the power to suspend is not a statutory power, but rather it is derived from the power to manage.

The question of whether a temporary suspension is governed by § 20-4-207, MCA, is a question of first impression in Montana. Section 20-4-207, MCA, provides (in part) as follows:

Dismissal of teacher under contract.
(1) The trustees of any district may dismiss a teacher before the expiration of his employment contract for immorality, unfitness, incompetence, or violation of the adopted policies of such trustees.
“(2) (a) The following persons may recommend the dismissal of a teacher for cause under subsection (1):
“(i) a district superintendent;
“(ii) in a district without a district superintendent, a principal; ...
“(b) Aperson listed in subsection (2)(a) who recommends dismissal of a teacher shall give notice of the recommendation in writing to each trustee of the district and to the teacher.
“(c) The notice must state the specific instances of behavior or acts that led to the recommendation for dismissal.
“(3) (a) ... the trustees shall notify the teacher of his right to a hearing before the trustees either by certified letter or by personal notification for which a signed receipt must be returned.”

The District Court differentiated between “dismissals” and “temporary suspensions”. It concluded that while the above statute explicitly deals with permanent dismissals, there is nothing to suggest any legislative intent that it apply to temporary suspensions. Therefore, the lower court held that “it is not a violation of that statute for a short-term disciplinary suspension to be imposed by school district central administrative personnel, without Board action.” We agree with the conclusion of the District Court. We hold that 2Vz day disciplinary suspensions imposed by administrative personnel do not constitute dismissals which come under the provisions of § 20-4-207, MCA.

The District Court further concluded that temporary suspensions are issues covered by the collective bargaining agreement which should be pursued through the contractual grievance/arbitration process provided in that agreement. The District Court then concluded that issues surrounding short-term disciplinary suspensions are grievable issues under the collective bargaining agreement, and therefore were not proper for consideration by the District Court. We agree with that conclusion.

We point out that the teachers filed this claim under the Wage Protection Act, §§ 39-3-201, MCA, et seq., claiming a statutory penalty and attorney fees. In Julian v. Montana State Univ. (1987), 229 Mont. 362, 747 P.2d 196, this Court ruled that where no labor is performed, no claim for wages existed under the Montana Wage Protection Act. In the present case, the plaintiffs did not perform any work during the 2V2 days of suspension. As a result the District Court concluded that the claim for compensation did not qualify as a wage claim. We affirm that conclusion.

We do not find it necessary to discuss the immunity aspect of the case. We hold that the District Court correctly granted summary judgment for the defendants.

JUSTICES HARRISON, BARZ, McDONOUGH and SHEEHY concur.


author: CHIEF JUSTICE TURNAGE

text:
    In the Matter of the ESTATE OF EDWARD E. LUGER, Deceased, David J. Lloyd, Petitioner and Appellant, v. INTERMOUNTAIN DEACONESS HOME FOR CHILDREN, and Montana Children’s Home and Hospital, Defendants and Respondents.
    No. 90-210.
    Submitted on Briefs July 19, 1990.
    Decided Sept. 5, 1990.
    797 P.2d 229.

      Craig W. Holt, Billings, for petitioner and appellant.
    John R. Sullivan, Helena, Gariy P. Bunke, Miles City, Jodie L. Johnson, Luxan & Murfitt, Helena, for defendants and respondents.
   CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

David J. Lloyd, nephew to the deceased Edward E. Luger, appeals the summary judgment of the Sixteenth Judicial District Court, Rosebud County, which found Edward E. Luger’s will valid. In his will, Luger devised all of his estate to Montana Children’s Home and Hospital and Intermountain Deaconess Home for Children, both located in Helena, Montana. The District Court held that no genuine issue of fact existed with regard to Luger’s testamentary capacity and that Luger’s will was valid as a matter of law. We affirm.

Lloyd raises the following issue:

Did the Sixteenth Judicial District Court properly grant the motion for Summary Judgment filed by the respondents Montana Children’s Home and Hospital and Intermountain Deaconess Home for Children?

One-hundred-year-old Edward E. Luger died testate on February 15,1988. He never married or had children. His surviving heirs were five nieces and two nephews, all of whom lived out-of-state and had little personal contact with Luger throughout the years. In his 1980 will, Luger devised his entire estate equally between Montana Children’s Home and Hospital (Shodair) and Intermountain Deaconess Home for Children (Deaconess), both located in Helena, Montana. Luger’s charitable intent of his 1980 will was consistent with his intent in a previous will dated 1948 and an unsigned copy of a 1976 will with the exception of adding Deaconess as a beneficiary in the 1980 will. Additionally, Luger specifically stated in his 1980 will that his nieces and nephews were to receive nothing from his estate because of their previous inheritances from Luger’s deceased parents’ estates.

David J. Lloyd, nephew to Luger, filed a petition contesting probate of the 1980 will on February 13, 1989, pursuant to § 72-3-308, MCA. Although Lloyd had not seen Luger since 1947, Lloyd claimed that Luger had been subject to undue influence by Robert Martinek, Luger’s accountant and the personal representative of Luger’s estate. Martinek was not a named beneficiary of the 1980 will. Additionally, Lloyd claimed that Luger was not of sound mind when he executed his 1980 will. Respondents Shodair and Deaconess moved for summary judgment, which was granted by the District Court on March 21, 1990. From this judgment, Lloyd appeals.

Rule 56(c) of the Montana Rules of Civil Procedure provides in part:

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

Lloyd argues that summary judgment was granted improperly by the District Court because disputed facts exist concerning Luger’s testamentary capacity, and these facts should be presented to a jury for determination. First, Lloyd asserts that there are disputed facts with regard to Robert Martinek’s undue influence over Luger, and cites the five criteria for establishing undue influence as set forth in Christensen v. Britton (Mont. 1989), [240 Mont. 393,] 784 P.2d 908, 911, 46 St.Rep. 2223, 2227 (Citations omitted.):

“(1) Confidential relationship of the person attempting to influence the testator;
“(2) The physical condition of the testator as it affects his ability to withstand influence;
“(3) The mental condition of the testator as it affects his ability to withstand the influence;
“(4) The unnaturalness of the disposition as it relates to showing an imbalanced mind or a mind easily susceptible to undue influence, and
“(5) The demands and importunities as they may affect the particular donor taking into consideration the time, the place, and all the surrounding circumstances.”

All of the above factors must be satisfied to prove that undue influence occurred. Christensen, 784 P.2d at 911.

Lloyd argues that the District Court, in its order for summary judgment, implied that doubt existed as to whether Lloyd could satisfy four of the five criteria with regard to Martinek’s undue influence over Luger. Accordingly, Lloyd argues that this implication means that disputed facts exist with regard to Martinek’s undue influence upon Luger. The District Court, however, found that Lloyd could prove none of the criteria. Moreover, the District Court specifically discussed the “naturalness” versus the “unnaturalness” of the disposition — the fourth criteria of Christensen. The District Court reasoned that because Luger’s charitable intent in his 1980 will was consistent with his intent in his 1948 will and the unsigned copy of the 1976 will, Luger’s disposition to Shodair and Deaconess appeared quite natural. Even though the District Court did not elaborate on all five Christensen criteria, it is clear that Lloyd could not satisfy the fourth criteria, and thus, in any event, could not prove undue influence. Accordingly, Lloyd’s first argument fails.

Second, Lloyd argues that summary judgment was improper because disputed facts exist with regard to Luger’s competency and argues that Luger was not of sound mind in 1980 when he executed his will. Lloyd bases this argument upon the depositions of Lois Fellows, Luger’s niece, and Faye Luger, Luger’s nephew. Rule 56(e) of the Montana Rules of Civil Procedure provides:

“When a motion for summary judgment is made and supported as provided in this rule, an adverse 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 that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.”

Both Lois Fellows and Faye Luger had little personal knowledge or contact with Luger over the years, and their depositions were based on their opinions and speculations, rather than on any substantive evidence. “Mere conclusory or speculative statements are insufficient to raise a genuine issue of material fact.” Mayer Brothers v. Daniel Richard Jewelers, Inc. (1986), 223 Mont. 397, 399, 726 P.2d 815, 816 (Citations omitted.). In contrast, the individuals who had personal knowledge of Luger’s mental state, Martinek, Luger’s physician, and nursing home personnel, all testified that Luger was mentally competent to execute a will in 1980. These depositions of Martinek, Luger’s physician, and the nursing home personnel, coupled with the presumption that Luger was of sound mind are sufficient to establish that no genuine issue of material fact with regard to Luger’s competency existed. In Re Choiniere’s Estate (1945), 117 Mont. 65, 71-72, 156 P.2d 635, 638. It is also important to note again that Lloyd himself had not even seen Luger since 1947. Based on the above, we hold that Luger was of sound mind and competent to execute his 1980 will.

Affirmed.

JUSTICES HARRISON, HUNT, SHEEHY and BARZ concur.


author: JUSTICE HARRISON

text:
    IN RE THE MARRIAGE OF DAVID L. OWEN, Petitioner and Respondent, and LORI L. OWEN, n/k/a Lori Ballinger, Respondent and Appellant, and LARRY OWEN AND MARILYN OWEN, Third Party Respondents.
    No. 90-211.
    Submitted on Briefs Aug. 9, 1990.
    Decided Sept. 4, 1990.
    797 P.2d 226.

      Paulette C. Ferguson, Missoula, Thomas W. Christie, Billings, for respondent and appellant.
    Dennis Lind, Datsopoulos, MacDonald & Lind, Missoula, for petitioner and respondent.
    Portia K. Brown, Morrill, Brown & Thomas, Rapid City, S.D., for third party respondents.
   JUSTICE HARRISON

delivered the Opinion of the Court.

This is an appeal from the District Court of the Fourth Judicial District, Missoula County, Montana. On August 10,1989, the District Court issued a decree dissolving the twelve-year marriage of David Owen and Lori Owen Ballinger. In addition to approving the Family Maintenance Agreement, the District Court held that the residence in which the parties lived during the latter years of their marriage properly belonged to the parents of the husband and denied the wife’s request that she be awarded attorney’s fees. From this judgment the wife appeals. We affirm.

Appellant presents the following issues:

1. Did the District Court err by failing to include the house purchased by the husband’s parents in the marital estate?

2. Did the District Court abuse its discretion by refusing to award the wife attorney’s fees?

David Owen and Lori Owen Ballinger were married in 1977. One daughter, now age 12, was bom to the marriage. When the couple separated in 1987, they entered into a separation agreement which provided child support and monthly maintenance payments to the wife from that date until six months after she completed law school. The husband assumed all debts of the marriage prior to the date of the agreement. The husband was required to pay the wife’s automobile insurance premiums until twelve months after the wife graduated from law school. He agreed to maintain the health insurance policy on the wife and child available through his employment. If his wife became ineligible for such insurance because of divorce, the husband agreed to pay for other health insurance for her until twelve months after completion of law school.

Payment of health insurance aided the wife in meeting expenses incurred in treatment of a rare chronic disease, sarcoidosis, at present controlled by extensive medications. The disease could eventually result in the wife’s partial or total disability.

When the husband received custody of the child in December, 1988, he declined to pay further maintenance payments. The wife moved to enforce the terms of the Family Maintenance Agreement. The District Court relieved the husband of child support payments and held that otherwise the agreement was binding and enforceable. The husband and the child reside in the home purchased by his parents.

During the twelve-year marriage the wife contributed primarily as a homemaker. Her financial contribution was not substantial. She completed paralegal training, a B.A. in business, and her first two years of law school by the time of the divorce in August, 1989.

In 1982, the husband’s parents purchased a home in which the couple resided until their separation. The couple entered into a written lease agreement with the husband’s parents, but made only sporadic payments. By the time of the dissolution, the value of the house had decreased by $15,000. The couple had paid $1,000 of the down payment, but otherwise had nothing invested in the house.

Other than personal property, the couple had no assets. At the time of the dissolution the husband earned a gross monthly income of $2,954 as Executive Vice-President of the Missoula Chamber of Commerce and an additional $2,000 per year as a part-time basketball referee. The husband testified that his monthly expenses totaled $2,696, an amount approximating his disposable income.

The wife’s income consisted of $490 per month maintenance payments plus a variable amount from part-time employment. Her estimated liabilities for loans received in law school totaled $25,000. The District Court found that while the wife’s type of legal employment and income were uncertain, her income-producing ability would be greatly enhanced upon her graduation from law school.

I.

Did the District Court err by failing to include the house purchased by the husband’s parents in the marital estate?

The wife urges that the District Court should have imposed a constructive trust on her share of an ownership interest that she claims she and her husband had in their residence, purchased by her husband’s parents. As evidence of an ownership interest, she cites the facts that the couple selected the house and handled the negotiations for its purchase. In addition, she and her husband believed that they would have been allowed to use the profits from the sale of the house as a down payment on another house.

Section 72-33-219, MCA, defines constructive trust:

“A constructive trust arises when a person holding title to property is subject to an equitable duty to convey it to another on the ground that the person holding title would be unjustly enriched if he were permitted to retain it.”

The courts impose constructive trusts because of “fraud, mistake, undue influence, the violation of a trust, or other wrongful acts” to work an equitable result. In re the Marriage of Malquist (1988), 234 Mont. 419, 422, 763 P.2d 1116, 1118. We need not pursue the theory of a constructive trust, since the record is silent as to any wrongful or fraudulent acts requiring such a remedy.

Nor does the record support any ownership interest in the residence by the husband and wife. In a dissolution proceeding courts must “equitably apportion between the parties the property and assets belonging to either or both, however and whenever acquired and whether the title thereto is in the name of the husband or wife or both.” 40-4-202(1), MCA.

In this case, neither spouse had title to the property. The title was in the names of the husband’s parents who assumed the rights and responsibilities of ownership. They paid the mortgage and entered into a written agreement leasing the residence to their son and his wife. At one point the parents sent the couple an eviction notice for failure to pay rent. The parents had also discussed selling the residence with a realtor.

The husband wrote the wife a note in which he expressed his belief that the couple could have used the equity from a sale of the property as a down payment on a new home. However, his hope or belief, in the absence of any other evidence of such an agreement, does not impose any legal obligation upon his parents.

Although the husband and wife did contribute $1,000 of the $15,000 down payment, the value of the house has decreased by $15,000 wiping out any gain which could be attributed to their investment. In short, little basis exists for the wife’s claim of an ownership interest in the property.

We find that the husband and wife had no ownership interest in the house and that the District Court properly excluded the residence from the marital estate.

II.

Did the District Court abuse its discretion by refusing to award the wife attorney’s fees?

The wife contends that the District Court should not have considered her future earning capacity in denying her request for attorney’s fees. Award of attorney’s fees in dissolution proceedings is provided for by § 40-4-110, MCA:

“The court from time to time, after considering the financial resources of both parties, may order a party to pay a reasonable amount for the cost to the other party of maintaining or defending any proceeding under chapters 1 and 4 of this title and for attorney’s fees . . .” (Emphasis added.)

Since the statute is permissive, the appropriate standard of review is whether the court abused its discretion. In re the Marriage of Smith (Mont. 1990), [242 Mont. 495,] 791 P.2d 1373, 1378, 47 St.Rep. 925, 931; In re the Marriage of Anderson (1988), 230 Mont. 89, 95, 748 P.2d 469, 472.

In evaluating the “financial resources of both parties,” this Court has not required that the trial court need only consider the parties’ present financial status. For instance, the court properly took into account the husband’s greater earning potential, as well as his larger salary, pension, and good health in Carr v. Carr (1983), 205 Mont. 269, 273, 667 P.2d 425, 427. Even though one party is in a stronger financial position, the court does not abuse its discretion if the other spouse has sufficient resources to be responsible for his own fees. In re the Marriage of J.J.C. (1987), 227 Mont. 264, 271, 739 P.2d 465, 469. Other factors courts have examined include whether the spouse has custody of the children, needs additional vocational training, or is under a physician’s care. In re the Marriage of Manus (1987), 225 Mont. 457, 465, 733 P.2d 1275, 1279-80.

In this case, although the husband has a far larger income, he testified that his expenses equaled his disposable income. Besides maintenance payments, he has the burden of family medical expenses exceeding the insurance coverage and the costs associated with child rearing. Although the wife’s health may eventually worsen, at this time she has successfully completed law school and plans to seek full-time employment. The record indicates that the trial court was well aware of the parties’ relative financial positions. We hold that the District Court did not abuse its discretion in considering the wife’s earning potential as a factor in refusing to award attorney’s fees.

The wife asserts that an award of attorneys fees is proper where the spouse receives maintenance. Here, the District Court did not order maintenance. In signing the Family Maintenance Agreement in 1987, the parties themselves agreed that the husband pay maintenance to the wife. The maintenance agreement was not necessarily based on the wife’s financial need and has no connection to the District Court’s award of attorneys fees.

The judgment of the District Court is affirmed.

JUSTICES HUNT, BARZ, SHEEHY and WEBER concur.