author: JUSTICE ERDMANN

text:
    RANDY PEUSE, Plaintiff and Respondent, v. JAMES R. MALKUCH and BETTY MALKUCH, husband and wife, Defendants and Appellants.
    No. 95-388.
    Submitted on Briefs January 18, 1996.
    Decided February 22, 1996.
    53 St.Rep. 135.
    275 Mont. 221.
    911 P.2d 1153.

      For Appellants: Richard L. Burns, Attorney at Law, Glendive.
    For Respondent: Marvin L. Howe, Simonton, Howe & Schneider, Glendive.
   JUSTICE ERDMANN

delivered the opinion of the Court.

This is an appeal from a decision of the Seventh Judicial District Court, Dawson County, granting partial summary judgment in favor of respondent Randy Peuse, and denying appellants James R. Malkuch and Betty Malkuch’s motion for reconsideration of summary judgment order and motion for leave to amend answer. We affirm.

The issues on appeal are as follows:

1. Did the District Court err in granting Peuse’s motion for partial summary judgment?

2. Did the District Court err in denying the Malkuchs the opportunity to amend their answer?

FACTS

In March 1990 Peuse and the Malkuchs entered into an agreement to sell and purchase certain real property in Dawson County, Montana. The agreement provided for specific performance and the Malkuchs were to deliver possession and occupancy to Peuse on the closing date. The agreement also provided that if the Malkuchs’ title was not merchantable and could not be made merchantable before the closing date, an additional thirty day grace period would be allowed to make the title merchantable. At the time the agreement was executed there existed an unsatisfied judgment against the Malkuchs.

The Malkuchs had enrolled this particular property in the United States Department of Agriculture’s Conservation Reserve Program (CRP). The agreement provided that Peuse would receive the CRP payments but it did not address whether the property would be kept in the program after the sale. After executing the agreement, the Malkuchs sought assurances that Peuse would keep the property in CRP so that the Malkuchs would not incur penalties on payments already received. Peuse refused.

The agreement’s closing date was originally set for April 21,1990. On September 24,1990, Peuse and James Malkuch agreed to extend the closing date to January 15,1991, in order to reduce the Malkuchs’ tax burden. Betty Malkuch refused to sign the amendment for the extension of time. No other amendments to agreement were made.

The closing date of January 15, 1991, passed with no sale occurring, and on May 27, 1992, Peuse filed suit for specific performance. The Malkuchs answered, alleging that Peuse breached the agreement and thus the Malkuchs were not obligated to perform. The Malkuchs also retained the right to file an amended answer when they obtained the necessary information through discovery to fully answer Peuse’s complaint.

On November 24, 1992, Peuse sent a set of interrogatories and a request for admissions to the Malkuchs’ attorney. The Malkuchs complied with the discovery request but initiated no discovery efforts of their own.

On January 15, 1993, Peuse filed a motion for continuance of the pretrial conference acknowledging that the Malkuchs’ original attorney had been in ill health. On March 31, 1993, the Malkuchs filed a motion continuing all proceedings because their attorney was undergoing treatment for cancer and had insufficient time to prepare his case. Due to this illness, the Malkuchs’ attorney withdrew from representation of the Malkuchs on December 20, 1993.

Apreliminary pretrial conference was scheduled for March 1,1994. The Malkuchs obtained new counsel immediately prior to the scheduling conference. Trial was set for October 6, 1994. On April 5, 1994, Peuse filed a motion for partial summary judgment. On April 29, the Malkuchs filed an opposition to the motion alleging two questions of fact not alleged in the Malkuchs’ original answer.

On May 19, the Malkuchs filed a motion for leave to amend their answer to include two new affirmative defenses which corresponded to the new questions of fact raised in the Malkuchs’ response to the summary judgment motion. The District Court granted partial summary judgment in favor of Peuse on June 9, 1994. On June 17, the Malkuchs moved the court to reconsider its order. The District Court denied both the Malkuchs’ motion for leave to amend the answer and their motion to reconsider on August 9, 1994. From the District Court’s orders of June 9 and August 9, 1994, the Malkuchs appeal.

ISSUE 1

Did the District Court err in granting Peuse’s motion for partial summary judgment?

In our review of a district court’s grant of summary judgment, we use the same standard as that used by the court under Rule 56(c), M.R.Civ.P. — “[sjummary judgment is proper only when no genuine issue of material fact exists and the moving party is entitled to a judgment as a matter of law.” Spain-Morrow Ranch, Inc. v. West (1994), 264 Mont. 441, 444, 872 P.2d 330, 331-32 (citing Minnie v. City of Roundup (1993), 257 Mont. 429, 431, 849 P.2d 212, 214).

In Sprunk v. First Bank Western Montana Missoula (1987), 228 Mont. 168, 172, 741 P.2d 766, 768, we ruled that the moving party in a motion for summary judgment has the initial burden of establishing that there are no genuine issues of fact. If this burden is met, the party opposing the motion has the burden to show that a material factual issue does exist. In meeting that burden, the opposing party must set forth specific findings showing that there is a genuine factual issue for trial.

As the District Court noted, the agreement provided that Peuse could demand that the Malkuchs specifically perform their obligations. The court also noted that the Malkuchs admitted they failed to perform their obligations under the agreement at the time appointed for their performance, and that Peuse claimed he was ready and willing to purchase the property at all times on and between the two closing dates.

The court found that while “there is a disagreement between the parties as to whether or not Peuse agreed to keep the Malkuch property on the CRP program, there is no dispute that continuing the Malkuch property on the CRP program was not a term written into the ‘Agreement to Sell and Purchase’.” The court reasoned that even if Peuse had agreed to keep the property on the CRP program a breach of that term was not a material breach of the agreement entitling the Malkuchs to terminate the agreement. The court found no material issues of fact and thus concluded the interest of justice, judicial economy, and existing law required the granting of Peuse’s motion for partial summary judgment based on specific performance.

The Malkuchs assert that summary judgment was not appropriate because there were genuine issues of material fact. First, they contend they did not have merchantable title to the property pursuant to the terms of the agreement. Therefore, a question exists as to whether there was a valid agreement in existence after the closing date and grace period. Second, they contend that Betty Malkuch did not initial the extension of the closing date which creates a genuine issue of material fact regarding whether any provision extending the closing date was binding upon her. Finally, they argue that Peuse’s obligation to keep the property in CRP is implicit in the agreement’s reference to CRP payments and a question exists as to whether Peuse breached the agreement.

Peuse asserts that the issues of merchantable title and the extension of the agreement’s closing date were not presented by the Malkuchs prior to their response to Peuse’s motion for summary judgment. Therefore, Peuse contends the District Court’s grant of partial summary judgment on the issues set forth by the parties at the time the summary judgment motion was filed was proper. Peuse reasons that in any event the District Court considered the Malkuchs’ new defenses and concluded they were not material to an award of summary judgment based on specific performance.

Specific performance may be compelled pursuant to § 27-1-411(4), MCA, when “it has been expressly agreed in writing, between the parties to the contract, that specific performance thereof may be required by either party or that damages shall not be considered adequate relief.” In Halcro v. Moon (1987), 226 Mont. 121, 125, 733 P.2d 1305, 1307, we held that summary judgment based on specific performance was appropriate when the buyer attempted to rescind on a buy/sell agreement after he discovered water problems in the house he was purchasing. We said:

“A breach which goes to only part of the consideration, is incidental and subordinate to the main purpose of the contract and may be compensated in damages does not warrant a rescission of the contract; the injured party is still bound to perform his part of the agreement, and his only remedy for the breach consists of the damages he has suffered therefrom.”

Halcro, 733 P.2d at 1307 (quoting Johnson v. Meiers (1946), 118 Mont. 258, 164 P.2d 1012). In Smith v. Johnson (1990), 245 Mont. 137, 798 P.2d 106, we held that negotiations of terms beyond the buy/sell agreement do not destroy the right to seek specific performance. We concluded in that case that the sellers could seek specific performance because they were willing to conform in accordance with the provisions of the buy/sell agreement. Smith, 798 P.2d at 110.

In this instance, Peuse was willing to close on the property on the first closing date and continually thereafter. The agreement clearly had no provision requiring that the property continue in CRP. The Malkuchs’failure to perform the agreement was due to the Malkuchs’ concern over the continuation of the property in CRP. We agree with the District Court’s reasoning that the disagreement concerning the property’s participation in CRP was not material to the main purpose of the agreement and did not abrogate the remedy of specific performance. As the District Court noted in this case, the agreement to sell and purchase explicitly provided for the remedy of specific performance. Accordingly, we conclude that there were no questions of material fact, and under the facts presented in this case specific performance could be enforced as a matter of law. We therefore affirm the District Court’s grant of summary judgment in favor of Peuse.

ISSUE 2

Did the District Court err in denying the Malkuchs the opportunity to amend their answer?

We review a district court’s denial of a party’s motion for leave to amend the pleadings to determine if the district court abused its discretion. Trout v. Bennett (1992), 252 Mont. 416, 429, 830 P.2d 81, 88. Rule 15(a), M.R.Civ.P., provides that a party may amend its pleading by leave of court and leave shall be freely given when justice so requires. An opportunity to amend a pleading is not appropriate, however, when the party opposing the amendment would incur substantial prejudice as a result of the amendment. Kearns v. McIntyre Construction Co. (1977), 173 Mont. 239, 248, 567 P.2d 433, 438.

In this case, the Malkuchs moved for leave to amend their answer after a motion for partial summary judgment on those issues had been filed. In addition, we note that the Malkuchs’ request to amend their answer was filed two years after the original pleadings were filed. The Malkuchs contend that their request was timely because additional defenses became apparent after discovery documents were given to the Malkuchs’ new attorney. However, the discovery documents the Malkuchs refer to were the Malkuchs’ answers to Peuse’s request for admissions. The Malkuchs were therefore already aware of the matters “discovered” in those documents.

Although the attorney who composed the original answer withdrew from the case, no evidence was presented that the attorney lacked the skills to adequately represent the Malkuchs. In fact, the Malkuchs retained his services without apparent complaint until he was forced to withdraw because of illness. The fact that the new attorney “discovered” additional defenses not contemplated by the original attorney does not excuse an inopportune request for amendments when those defenses were available to the original attorney. Otherwise

[t]he result contended for would allow seriatim assertion of claims. Under such a process, one of the important thrusts of the rules of civil and appellate procedure — that actions contain all related claims and parties in order that cases proceed in an orderly and expeditious manner to final judgment — would be completely rm-done. The detriment to parties litigant, as well as the burden such a process would place on Montana courts, cannot be overstated.

Stanford v. Rosebud County (1992), 254 Mont. 474, 477-78, 839 P.2d 93, 95.

While the rule [15(a), M.R.Civ.P] favors allowing amendments, a trial court is justified in denying a motion for an apparent reason “such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by allowance of the amendment, futility of the amendment, etc.”

Lindeys v. Professional Consultants (1990), 244 Mont. 238, 242, 797 P.2d 920, 923 (quoting Foman v. Davis (1962), 371 U.S. 178, 182, 83 S. Ct. 227, 230, 9 L. Ed. 2d 222, 226).

The delays in this case, although not necessarily undue, were all for the benefit of the Malkuchs. The Malkuchs were represented and there was sufficient time to make any necessary amendments prior to the time summary judgment was requested. If the amendments were allowed after the motion for summary judgment, Peuse would be unduly prejudiced since his motion was based on the original pleadings which remained unchanged for almost two years. Litigants should be allowed to change legal theories after a motion for summary judgment has been filed only in extraordinary cases. Therefore, the District Court was within its discretion in denying the Malkuchs leave to amend their answer, and we affirm the District Court’s order.

We affirm.

JUSTICES HUNT, GRAY, NELSON and LEAPHART concur.


source: Caselaw Access Project

license: Public Domain

text:
    DAVID MAURER, Plaintiff, Appellant, and Cross-Respondent, v. CLAUSEN DISTRIBUTING CO., a Montana corporation, and MICHAEL A. TUCKER, Defendants, Respondents, and Cross-Appellants.
    No. 95-124.
    Submitted on Briefs January 4, 1996.
    Order Denying Rehearing March 14, 1996.
    Decided February 8, 1996.
    53 St.Rep. 78.
    275 Mont. 229.
    912 P.2d 195.

      For Appellant: Monte D. Beck and John J. Richardson, Beck Law Offices, Bozeman.
    For Respondents: Keith Keller, Keller, Reynolds, Drake, Johnson & Gillespie, Helena.
   JUSTICE ERDMANN

delivered the Opinion of the Court.

This is an appeal from an order of the First Judicial District Court, Lewis and Clark County, granting a new trial on the jury’s award of damages against Clausen Distributing Co. and Michael A. Tucker, and a cross-appeal from the District Court’s exclusion of evidence and giving of jury instructions. We reverse in part and affirm in part.

We restate the issues as follows:

1. Did the District Court err in ordering a new trial on the issue of punitive damages?

2. Did the District Court err in ordering a new trial on the issue of compensatory damages?

3. Did the District Court err in excluding evidence of events other than the accident that could have lead to Maurer’s depression?

4. Did the District Court err in denying a new trial on the issue of punitive damages because evidence of Clausen’s employees’ work-related convictions for driving under the influence (DUIs) was excluded?

5. Did the District Court err in denying a new trial because instructions were given to the jury on Clausen’s vicarious liability for punitive damages?

FACTS

Michael Tucker was a salesperson for Clausen Distributing Co., a Helena beverage and bar supply wholesaler and distributor. On November 25, 1991, Tucker was returning from his Townsend sales route when he ran into the rear of a Montana Highway Patrol vehicle parked on the side of the highway. David Maurer, a motorist who had been stopped by the patrolman, was sitting in the front passenger seat of the patrol car and was injured when he was thrown to the floor of the car.

Tucker pled guilty to a charge of driving while under the influence of alcohol. His blood alcohol content over an hour after the accident was .17 percent. Defendants Clausen and Tucker admitted liability for the accident and a trial was held to award compensatory damages and determine liability for punitive damages. At trial, Tucker testified that he drank five or six beers that day while he was servicing his Townsend customers. Clausen’s policy permitted salespersons to use their discretion in consuming alcohol while working. Clausen did not amend this policy as it pertained to Tucker, even though Clausen was aware that Tucker had received two citations for DUIs prior to this accident.

As a result of the accident, Maurer suffered pain in his neck and back which he alleged prevented him from performing duties essential to running a ranch. Maurer became severely depressed, quit the family ranch, and moved from Montana. Clausen and Tucker attempted to introduce evidence of non-related felony charges against Maurer which could have caused his depression and disrupted his established course of life. The District Court did not allow the evidence because of its prejudicial effect.

Clausen also attempted to introduce evidence that no Clausen driver had, until this accident, received a DUI while working. The District Court excluded this evidence, finding it was not relevant to the issue of punitive damages.

At the proposal of jury instructions, the District Court ruled that a pattern instruction on vicarious liability would be given. Clausen objected to the giving of this instruction.

The jury awarded $1,000,000 in punitive damages against Clausen and $75,000 in punitive damages against Tucker. Clausen filed a motion for a new trial and the District Court concluded that the jury’s awards for punitive damages were based on passion and prejudice and exceeded the amount necessary to punish Clausen and Tucker. Accordingly, the District Court ordered a new trial on the determination of punitive damages.

The jury also awarded Maurer $570,349 in actual damages, $500,000 of which was for loss of established course of life, and $50,000 for pain and suffering. Maurer had requested $90,000 for loss of established course of life. Although requested by Maurer, the jury did not award any damages for loss of earnings or loss of earning capacity. The District Court concluded that the jury’s award for compensatory damages was excessive and granted a new trial on the issue of compensatory damages as well.

Maurer appeals the District Court’s granting of a new trial on the issues of punitive and compensatory damages. Clausen and Tucker cross-appeal the District Court’s evidentiary and legal rulings relevant to a new trial.

ISSUE 1

Did the District Court err in ordering a new trial on the issue of punitive damages?

The District Court vacated the jury’s award for punitive damages of $1,000,000 against Clausen and $75,000 against Tucker. The District Court ordered a new trial because it concluded that these awards were excessive. This Court will not disturb a district court’s decision to grant or deny a new trial absent a manifest abuse of discretion. Baxter v. Archie Cochrane Motors, Inc. (1995), 271 Mont. 286, 287-88, 895 P.2d 631, 632.

Section 25-11-102(5), MCA, provides that a district court may vacate a jury’s verdict and grant a new trial when the jury’s award of damages is excessive and appears to have been given under the influence of passion or prejudice. As required by § 27-l-221(7)(c), MCA, the District Court reviewed the jury’s verdict and considered the factors set forth in subsection (7)(b). Those factors include:

(i) the nature and reprehensibility of the defendant’s wrongdoing;
(ii) the extent of the defendant’s wrongdoing;
(iii) the intent of the defendant in committing the wrong;
(iv) the profitability of the defendant’s wrongdoing, if applicable;
(v) the amount of actual damages awarded by the jury;
(vi) the defendant’s net worth;
(ix) any other circumstances that may operate to increase or reduce, without wholly defeating, punitive damages.

The court found that Clausen had a net worth of $944,534 in 1993 and taxable income of $31,662 (average for 1990 to 1993). The court found that Tucker had no evidence of net worth but that he had been rehired by Clausen at a yearly salary of $27,000. Based on those findings, the court concluded:

Although an award of punitive damages was proper in this case, it appears that the award was the result of passion or prejudice. Passion and prejudice can, of course, be strong when drinking and driving result in an accident. The significant factor here, however, is the excessive amount of the award.
There was no evidence regarding Tucker’s net worth. The award against him was almost three times his annual salary. While Tucker’s conduct was certainly reprehensible and should in no way be condoned, the amount awarded exceeds the amount necessary to punish him.
The amount awarded against Clausen Distributing exceeded the company’s net worth. The award must be sufficient to get the company’s attention, but in this case, the award exceeds the amount necessary to adequately punish this Defendant and to serve as an example to it and others.

A review of the record reveals that the punitive damages assessed against Clausen were not excessive when compared to Clausen’s overall financial condition. Section 27-l-221(7)(a), MCA, states that “[i]n the separate proceeding to determine the amount of punitive damages to be awarded, the defendant’s financial affairs, financial condition, and net worth must be considered.” We note that Clausen declared taxable income of $0 to $49,000 between 1990 and 1993, even though its yearly sales were between $3,400,000 to $4,600,000. Actually, Clausen had a policy of retaining profits within the corporation. Clausen’s general manager testified that Clausen’s yearly retained profits averaged between $850,000 and $1,000,000. In addition, Clausen kept $300,000 to $400,000 in cash on hand for expenditures. Clausen’s balance sheet valued many of the company’s assets at their historic cost when purchased up to thirty-five years ago. Testimony was presented that at this time the warehouse alone is worth between $550,000 and $800,000. Nevertheless, the District Court failed to consider the appreciation of these assets, as well as Clausen’s policy of retaining profits, which resulted in a decrease of the company’s taxable income.

Tucker’s financial condition was also valued improperly by the District Court. After noting there was no evidence of Tucker’s net worth, the District Court concluded that Tucker’s salary did not support an award of punitive damages in the amount of $75,000. In Gurnsey v. Conklin Co., Inc. (1988), 230 Mont. 42, 55, 751 P.2d 151, 158, we stated a plaintiff is not required to show proof that a defendant’s net worth supports an award of punitive damages. If the defendant’s net worth does not support an award of punitive damages, the defendant must produce evidence to that fact. Gurnsey, 751 P.2d at 158. Tucker should not gain an advantage from failing to produce evidence of his net worth. Accordingly, there was no evidence that Tucker’s net worth could not support a punitive damage award of $75,000, and so, the District Court erred in vacating the jury’s award of punitive damages against Tucker.

For these reasons, we conclude that the District Court’s order for a new trial on the issue of punitive damages was a manifest abuse of discretion, and therefore, reverse the District Court on this issue.

ISSUE 2

Did the District Court err in ordering a new trial on the issue of compensatory damages?

The issue of damages was submitted to the jury on a line item verdict form. Maurer asked the jury to return a verdict of:

Past medical expenses $ 12,598.80
Future medical expenses 20,000.00
Out-of-pocket expenses 440.00
Pain and suffering 65.520.00
Loss of established course of life 90,000.00
Loss of earnings 35.642.00
Loss of earning capacity 2,241,761.00

The jury returned a verdict of:

Past medical expenses $ 12,598.80
Future medical expenses 7,310.50
Out-of-pocket expenses 440.00
Pain and suffering 50,000.00
Loss of established course of life 500,000.00
Loss of earnings -0-
Loss of earning capacity -0-

The District Court noted that the jury’s award for loss of established course of life was more than five times the amount requested by Maurer. On these facts, the court concluded that an award of $500,000 for loss of established course of life was excessive and appeared to have been given under the influence of passion or prejudice. Accordingly, the court ordered a new trial on compensatory damages pursuant to § 25-11-102(5), MCA. We will review the court’s decision to grant a new trial to determine if the court abused its discretion. See Baxter, 895 P.2d at 632.

Maurer attempts to justify the jury’s award for his loss of established course of life by pointing to the fact the jury awarded less compensation as a whole than was requested. This justification is fallacious. The jury’s award for Maurer’s loss of established course of life cannot be considered as damages to offset the jury’s refusal to award damages for Maurer’s loss of earnings and earning capacity. On the contrary, the jury found that Maurer suffered no loss of earning capacity.

Maurer produced evidence to support an award of $90,000 for loss of established course of life. Instead, the jury awarded $500,000. Unreasonable damages cannot be recovered. Section 27-1-302, MCA. Thus, an award must be reduced when it substantially exceeds that which the evidence can sustain. Safeco Ins. Co. v. Ellinghouse (1986), 223 Mont. 239, 254, 725 P.2d 217, 226. The record does not support the jury’s award of $500,000 for loss of established course of life. Therefore, the District Court did not abuse its discretion in ordering a new trial for compensatory damages on this issue and we affirm that portion of the District Court’s order.

ISSUE 3

Did the District Court err in excluding evidence of events other than the accident that could have lead to Maurer’s depression?

During trial, Maurer produced evidence that after the car accident he was depressed. This depression lead Maurer to leave the family ranch and contributed to his “course of life” damages. Clausen and Tucker attempted to introduce evidence that Maurer became depressed and left the ranch because of other reasons. Specifically, an event occurred in August 1990 where Maurer’s former girlfriend’s neck was broken during an altercation with him and which resulted in her being rendered quadriplegic (the Miller incident). In December 1990, she filed a civil suit against him which was settled in August 1991. In addition, Maurer was criminally charged with aggravated assault, a felony. Following a jury trial he was acquitted from the felony charge in January 1993.

Maurer claims the evidence was inadmissible because the defendants offered no proof linking Maurer’s psychological condition with the Miller incident and that the defendants merely wanted to ask a highly prejudicial question. The defendants counter that the incident’s link to Maurer’s depression was self-evident and that the jury could consider the evidence from a common sense viewpoint. The District Court acknowledged the significant stress of the incident and its resulting criminal charges. Nevertheless, the court excluded the evidence because of its prejudicial nature.

Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice. Rule 403, M.R.Evid. The decision whether or not to exclude such evidence will not be reversed by this Court unless the district court has abused its discretion. Newville v. State, Dept. of Family Svcs. (1994), 267 Mont. 237, 260, 883 P.2d 793, 806 (citing Kimes v. Herrin (1985), 217 Mont. 330, 333, 705 P.2d 108, 110).

We conclude that the Miller incident was certainly a stress provoking event which may have contributed to Maurer’s depression and its probative value was not substantially outweighed by its prejudicial nature. We further conclude that the District Court abused its discretion in excluding evidence of the Miller incident for that reason. The jury should have been given the opportunity to determine to what degree, if any, the stress from the Miller incident contributed to Maurer’s loss of established course of life. See § 26-1-202, MCA.

The defendants intended to introduce evidence of the Miller incident during cross-examination of Maurer and his witnesses in order to rebut evidence that Maurer was depressed as a result of his injury. Before this rebuttal could be admitted, the defendants must have produced testimony to the fact that the Miller incident contributed to Maurer’s depression and his leaving the ranch.

[W]hen the admissibility of evidence depends upon proof of other connecting facts, the court may admit such evidence subject to the condition that further evidence be introduced sufficient to support a finding of those connecting facts.

Rule 104(b), M.R.Evid. In Kimes and Newville, we'held that evidence of an event which may have contributed to an injury is not admissible unless the evidence establishes a causal connection between the event and the injury. Newville, 883 P.2d at 806; Kimes, 705 P.2d at 110.

As we are remanding this case to the District Court for a new trial on compensatory damages for loss of established course of life, the District Court should admit evidence of the Miller incident if such evidence is offered and the proper foundation has been laid.

ISSUE 4

Did the District Court err in denying a new trial on the issue of punitive damages because evidence of Clausen’s employees’ work-related DUI convictions was excluded?

At trial, the defendants’ counsel asked Clausen Distributing’s general manager the following:

During that period of time until Mr. Tucker’s work-related DUI, how many other DUIs have your employees had that were work related?

The District Court sustained Maurer’s objection to the question.

On the defendants’ motion for new trial, the District Court reviewed its ruling and concluded that evidence of whether any of the employees of Clausen Distributing had ever had a work-related DUI was irrelevant. We will review the District Court’s denial of a new trial for an abuse of discretion. See Baxter, 895 P.2d at 632.

The defendants assert that prior to Tucker’s accident there were no work-related DUIs among Clausen’s employees. The defendants claim that evidence to this fact would vindicate Clausen’s policy of tolerating drinking on the job and would therefore be relevant to whether punitive damages should be assessed against Clausen. The court, however, found that the jury’s award for punitive damages was based on Clausen’s conduct in placing Tucker in a position where he was permitted to drink and drive despite Clausen’s knowledge of Tucker’s two previous DUIs. We have stated that evidence is irrelevant when it does not tend to make any requisite factors for punitive damages more or less probable. Derenberger v. Lutey (1983), 207 Mont. 1, 11, 674 P.2d 485, 489. Accordingly, the DUI records are irrelevant because they do not tend to disprove the egregiousness of Clausen’s conduct for which the jury assessed an award of punitive damages.

We therefore conclude the District Court did not abuse its discretion in denying a new trial for admissibility of evidence and hold that the District Court did not err in denying a new trial on the issue of punitive damages.

ISSUE 5

Did the District Court err in denying a new trial because instructions were given to the jury on Clausen’s vicarious liability for punitive damages?

The District Court instructed the jury on vicarious liability. Clausen contends that the pattern instruction given was not intended for punitive damage actions and was thus not appropriate in this case. On a motion for new trial, the court concluded that the instruction was a correct statement of Montana law and giving it was not grounds for a new trial.

The jury returned a verdict against Clausen finding that Clausen should “be assessed punitive damages as a result of its conduct.” Clausen’s argument that the jury instruction was not appropriate is moot because the jury found Clausen liable for punitive damages based on its own conduct under § 27-1-221, MCA, rather than under a vicarious liability theory. In seeking review of an instruction, the party claiming error must show prejudice in order to prevail. Hall v. Big Sky Lumber & Supply, Inc. (1993), 261 Mont. 328, 332, 863 P.2d 389, 392 (citing Walden v. State (1991), 250 Mont. 132, 818 P.2d 1190). In this case, Clausen was not prejudiced by the court’s instruction because the jury did not assess damages against Clausen for Tucker’s conduct but for its own.

We will not overturn the court’s denial of a new trial absent an abuse of discretion. Baxter, 895 P.2d at 632. We conclude the District Court did not abuse its discretion, and therefore, did not err in denying a new trial because the appropriateness of the instruction was a moot point.

In summary, we reverse the District Court’s grant of a new trial on the issue of punitive damages, and we affirm the District Court’s grant of a new trial on the issue of compensatory damages for loss of established course of life. We also affirm the District Court’s denial of a new trial on the issues of employee work-related convictions and jury instructions. On remand to the District Court for new trial, we direct the court to admit evidence of the Miller incident so long as the proper foundation has been laid.

CHIEF JUSTICE TURNAGE, JUSTICES GRAY, HUNT and LEAPHART concur.

ORDER

Respondents Clausen Distributing Co. and Michael A. Tucker request that we rehear our decision of February 8, 1996, reversing the District Court’s order for a new trial on punitive damages. Pursuant to Rule 34, M.R.App.P.

[a] petition for rehearing may be presented upon the following grounds and none other: That some fact, material to the decision, or some question decisive of the case submitted by counsel, was overlooked by the court, or that the decision is in conflict with an express statute or controlling decision to which the attention of the court was not directed.

Respondents contend a rehearing is appropriate because our attention was not directed to § 27-1-22 l(7)(b)(v), MCA, which conflicts with our decision. Respondents claim our decision is in error because we affirmed the District Court’s grant of a new trial on actual damages, and therefore, the amount of those damages could not have been considered in an award of punitive damages as required by § 27-l-221(7)(b)(v) and (c), MCA.

A finding of actual damages, rather than a determined amount, is required for an award of punitive damages. Doll v. Major Muffler Centers, Inc. (1984), 208 Mont. 401, 414, 687 P.2d 48, 55 (citing Lauman v. Lee (1981), 192 Mont. 84, 626 P.2d 830; Miller v. Fox (1977), 174 Mont. 504, 571 P.2d 804.) In the present case, respondents admitted liability, and the jury’s award of $70,439.30 in compensatory damages for past and future medical expenses, out-of-pocket expenses, and pain and suffering was upheld. The only damages left undetermined were for loss of established course of life due to the jury’s award of more than five times that which was requested. In upholding the jury’s award of punitive damages, we directed our attention to § 27-l-221(7)(b), MCA, and considered all of the factors set forth in that section. We were aware that the amount of compensatory damages in this case would be between $70,439 and something less than $570,439. Under the facts of this case, the punitive damage award was reasonably given the egregiousness of the defendants’ conduct and their overall financial status. Therefore, our decision was not in error and a rehearing on that issue is inappropriate.

Respondents also claim an error in fact in what we considered to be their overall financial condition. The last sentence beginning the bottom of page six and the top of page seven of the slip opinion reads “Clausen’s general manager testified that Clausen’s yearly retained profits averaged between $850,000 and $1,000,000.” While this language was in error, our decision was based on the understanding that Clausen Distributing Co.’s yearly retained profits were in fact cumulative retained earnings averaging between $850,000 and $1,000,000. We did not assume Clausen Distributing Co. retained that amount of profit from each year’s income. A rehearing on that issue is therefore inappropriate. To correct the erroneous factual statement in the opinion, the sentence will be amended as follows:

Clausen’s general manager testified that Clausen’s cumulative retained profits averaged between $850,000 and $1,000,000.

IT IS HEREBY ORDERED that respondent’s petition for rehearing is DENIED.

JUSTICE GRAY would grant rehearing on the issue of punitive damages and would deny rehearing on our consideration of Clausen’s financial condition.


author: JUSTICE TRIEWEILER JUSTICE GRAY, JUSTICE ERDMANN

text:
    DIANA L. WEBB, Plaintiff and Appellant, v. T.D., D.C.; R.K.S., M.D.; and C.H.A., M.D., Defendants and Respondents.
    No. 95-234.
    Submitted on Briefs November 21, 1995.
    Rehearing Denied March 21, 1996.
    Decided February 20, 1996.
    53 St.Rep. 117.
    275 Mont. 243.
    912 P.2d 202.

      For Appellant: John M. Morrison, Meloy & Morrison, Helena.
    For Respondents: Richard F. Cehull, Brown, Gerbase, Cebull, Fulton, Harman & Ross, Billings (for Respondent R.K.S., M.D.); Ronald L. Lodders, Crowley, Haughey, Hanson, Toole & Dietrich, Billings (for Respondent C.H.A., M.D.).
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

On September 9, 1991, Diana Webb filed a claim with the Medical Legal Panel against R.K.S., an orthopedist, and C.H.A., a radiologist. After the Panel rendered its decision, Webb filed a timely complaint against the two doctors in the District Court for the Thirteenth Judicial District in Yellowstone County. On August 2, 1993, Webb filed an application with the Chiropractic Legal Panel against T.D. and named R.K.S. and C.H.A. as necessary and proper parties to the action. On August 3, 1993, Webb voluntarily dismissed the pending district court action against R.K.S. and C.H.A. without prejudice. The Chiropractic Legal Panel rendered its decision on November 16,1993. On December 13, 1993, Webb filed a second complaint in the Thirteenth Judicial District Court against all defendants. On February 3, 1995, the District Court granted R.KS.’s and C.H.A.’s motions for summary judgment on the ground that Webb’s complaint was barred by the applicable statute of repose. Webb appeals the District Court’s order which granted summary judgment. We reverse the District Court and remand for further proceedings.

There is one issue on appeal:

Is Webb’s complaint barred by the five-year statute of repose set forth at § 27-2-205, MCA?

FACTUAL BACKGROUND

Diana Webb suffered a back injury during the course of her employment in May 1986. After her accident, Webb consulted T.D., a chiropractor, concerning her symptoms. In October 1986, her employer’s workers’ compensation insurer referred her to R.K.S., an orthopedist, for further evaluation. On October 7, 1986, R.K.S. performed a clinical evaluation and ordered a CT-scan, which was read by C.H.A., a radiologist. The next day, R.K.S. wrote Webb a letter in which he stated that he had reviewed the CT-scan and it looked “excellent.” He assigned Webb a two percent impairment rating and released her to perform heavy work without restriction.

In 1989, while Webb was working for a construction company in California, she suffered a severe aggravation of her earlier injury. Afterward, on August 22,1989, Webb again consulted T.D. about her back condition. T.D. treated Webb until the end of 1989 without referring her to a physician for evaluation. In January 1990, allegedly at the insistence of Webb’s husband, T.D. referred Webb to Arturo Echeverri, a neurologist. Dr. Echeverri ordered magnetic resonance imaging of Webb’s spine, which revealed “a massive herniation of the L-5 disc on the right side compressing the S-l nerve root as well as the rest of the cauda equina.” Neurosurgeon Maurice Smith performed a laminotomy, but Webb was left with residual nerve damage as a result of prolonged nerve root compression from the massively herniated and fragmented disc. The January 10, 1990, MRI results were the first indication to Webb that she had a disc herniation.

On September 9,1991, Webb filed a medical legal panel application naming R.K.S. and C.H.A., in which she alleged that R.K.S. performed a negligent physical examination and C.H.A. negligently interpreted the CT-scan on October 7,1986. The Medical Legal Panel rendered its decision on March 18, 1992. On April 16, 1992, within thirty days of the Panel decision, Webb filed a complaint against R.K.S. and C.H.A. in the Thirteenth Judicial District Court in Yellowstone County. The summonses were issued on that date, but were never served.

On June 29, 1992, Webb’s attorney died in an airplane crash. On June 29, 1993, a new attorney appeared on Webb’s behalf. Shortly thereafter he decided that T.D. should have been a defendant in the original action. Accordingly, on August 2, 1993, Webb filed an application with the Chiropractic Legal Panel for review of her treatment by T.D. and named R.K.S. and C.H.A. as necessary and proper parties to the action. On August 3, 1993, Webb voluntarily dismissed the pending district court action against R.K.S. and C.H.A. without prejudice. The Chiropractic Legal Panel rendered its decision on November 16,1993. Webb filed her second complaint in District Court against all defendants on December 13, 1993, within thirty days of the Chiropractic Legal Panel decision.

On February 3, 1995, the District Court granted the motions for summary judgment filed by R.K.S. and C.H.A. The court held that Webb’s injury occurred in October 1986 when the defendants failed to diagnose a damaged intervertebral disc; that six years had passed from the date of injury before Webb filed her complaint in district court; and therefore, that Webb’s complaint is barred by the five-year statute of repose found at § 27-2-205, MCA.

DISCUSSION

Is Webb’s complaint barred by the five-year statute of repose set forth at § 27-2-205, MCA?

This Court reviews a district court’s order granting summary judgment based on the same criteria applied originally by the district court. Bruner v. Yellowstone County (1995), 272 Mont. 261, 263-64, 900 P.2d 901, 903. Rule 56(c), M.R.Civ.P., provides that summary judgment is proper only when “there is no genuine issue as to any material fact and ... the moving party is entitled to judgment as a matter of law.”

In this case, the District Court granted summary judgment in favor of R.K.S. and C.H.A. because it held that Webb’s malpractice claim was barred by the five-year statute of repose found at § 27-2-205, MCA. Section 27-2-205, MCA (1985), in effect at the time of Webb’s treatment in 1986, provides:

Action for injury or death against a physician or surgeon ... [or] chiropractor ... based upon such person’s alleged professional negligence or for rendering professional services without consent or for error or omission in such person’s practice, shall be commenced within 3 years after the date of injury or 3 years after the plaintiff discovers or through the use of reasonable diligence should have discovered the injury, whichever occurs last, but in no case may such action be commenced after 5 years from the date of injury. However, this time limitation shall be tolled for any period during which such person has failed to disclose any act, error, or omission upon which such action is based and which is known to him or through the use of reasonable diligence subsequent to said act, error, or omission would have been known to him.

(Emphasis added).

Webb contends that the five-year statute of repose set forth in § 27-2-205, MCA, did not begin to run until 1989 because the “date of injury” was the date on which she herniated the bulging disc which respondents failed to diagnose. Because she filed her complaint in 1993, she contends that it was filed well within the five-year period. The defendants contend, and the District Court agreed, that Webb’s date of injury, if there was an injury, occurred on October 7, 1986, when the defendants allegedly failed to diagnose her true condition.

Webb further asserts that even if the “date of injury” was in 1986, when R.K.S. and C.H.A. allegedly misread her CT-scan, the statute of repose still would not have run because the statute was tolled continuously from the time she filed her original application with the Medical Legal Panel. Based on our resolution of this issue, we decline to address the first issue, and therefore, draw no conclusion about Webb’s “date of injury.”

The date of discovery has not been contested, and therefore, is not an issue in this case.

Section 27-2-205, MCA, requires that a medical malpractice action be “commenced” within three years from the date of injury or within three years after the plaintiff discovers the injury, but in no case, later than five years from the date of the injury. Section 27-2-102(l)(b), MCA, states that “[flor the purposes of statutes relating to the time within which an action must be commenced... an action is commenced when the complaint is filed.” Section 27-6-702, MCA (1985), provides that “ [t]he running of the applicable limitation period in a malpractice claim is tolled upon receipt by the director of the application for review ... [and] does not begin again until 30 days after ... the panel’s final decision ....” Diana Webb filed her application on September 9, 1991, and effectively tolled the running of the applicable limitation period four years, eleven months, and two days after the date of defendants’ alleged malpractice on October 7, 1986. Her action was commenced on April 16, 1992, before the limitation period began to run again, and therefore, within five years from the date defendants rely on as the “date of injury.”

Webb’s district court complaint was still pending when she filed her application with the Chiropractic Legal Panel which named T.D. as the subject care provider, and R.K.S. and C.H.A. as necessary and proper parties to the action. The statute of limitations remained tolled throughout the pendency of the Chiropractic Legal Panel decision pursuant to § 27-12-701, MCA, which provides:

(1) Upon receipt of an application by the director, the running of an applicable limitation period in a malpractice claim is tolled as to each chiropractic physician named as a party and as to each other person or entity named as a necessary or proper party for a court action that might subsequently arise out of the factual circumstances set forth in the application.
(2) The running of the applicable limitation period in a malpractice claim does not begin again until:
(a) 30 days after an order of dismissal, with or without prejudice against refiling, is issued; or
(b) after the panel’s final decision is entered in the permanent files of the panel and a copy is served upon the complainant or his attorney.

The Chiropractic Legal Panel rendered its decision on November 16, 1993. Webb filed her second complaint in District Court in which she named all three defendants on December 13,1993, fewer than thirty days after the Panel’s decision was rendered.

In this case, both parties agree that the statute of limitations for Webb’s claim was tolled during the pendency of her application before the Medical Legal Panel, and for thirty days thereafter. The parties disagree, however, on the effect of Webb’s first complaint in the District Court, which was filed on April 16, 1992, and which was voluntarily dismissed on August 3, 1993. Webb maintains that the filing of the complaint tolled the statute of limitations, and that the statute remained tolled while that suit was pending. Webb further maintains that her voluntary dismissal of the district court action did not have the effect of nullifying that tolling period, because her claim continued to pend in another forum. The respondents, however, contend that the filing of a complaint which was never served on a defendant does not toll the statute of limitations. They further contend that Rule 41(e), M.R.Civ.R, prohibits the refiling of a claim against a defendant when the plaintiff has failed to serve a summons and the complaint before its dismissal.

Rule 41(e), M.R.Civ.R, provides:

No action heretofore or hereafter commenced shall be further prosecuted as to any defendant who has not appeared in the action or been served in the action as herein provided within 3 years after the action has been commenced, and no further proceedings shall be had therein, and all actions heretofore or hereafter commenced shall be dismissed by the court in which the same shall have been commenced, on its own motion, or on the motion of any party interested therein, whether named in the complaint as a party or not, unless summons shall have been issued within 1 year, or unless summons issued within one year shall have been served and filed with the clerk of the court within 3 years after the commencement of said action, or unless appearance has been made by the defendant or defendants therein within said 3 years. When more than one defendant has been named in an action, the action may within the discretion of the trial court be further prosecuted against any defendant who has appeared within 3 years, or upon whom summons which has been issued within 1 year has been served and filed with the clerk within 3 years as herein required.

Respondents contend that pursuant to Rule 41(e) Webb was prohibited from refiling her claim because she failed to serve the summons on her first complaint before she voluntarily dismissed it. They cite First Call, Inc. v. Capital Answering Service, Inc. (1995), 271 Mont. 425, 898 P.2d 96, for the proposition that the dismissal of Webb’s first complaint bars her second complaint based on principles of res judicata. We disagree, however, with respondents’ characterization of First Call. In First Call, the district court dismissed the plaintiff’s complaint without prejudice because the summons was not served within three years, as required by Rule 41(e), M.R.Civ.R We held that when a district court dismisses a complaint because of a failure by the plaintiff to serve the summons within three years, the action may not be refiled. In this case, however, the court did not dismiss the complaint, and Webb did not fail to serve her summons within three years from the date on which she filed her complaint. In fact, the service of Webb’s summons and second complaint was accomplished within three years from the date on which the first complaint was filed. First Call and Rule 41(e) are, therefore, inapplicable to this case.

We hold that the statute of limitations and the statute of repose are tolled by the commencement of an action, and that an action is commenced when a complaint is filed. Section 27-2-102(l)(b), MCA. See also Rule 3, M.R.Civ.R This interpretation is consistent with the language of § 27-2-205, MCA, and is supported both by Montana case law, and by the case law of other jurisdictions. See, e.g., Blasdel v. Montana Power Co. (1982), 196 Mont. 417, 426, 640 P.2d 889, 894 (holding that “the statute of limitations was tolled when the first complaint was filed”); King v. Lujan (N.M. 1982), 646 P.2d 1243, 1244 (holding that the “[fliling of the complaint is commencement of the action which generally tolls the applicable statute of limitations”).

In this case, the statute of limitations was tolled on April 16,1992, when Webb filed her complaint with the District Court. The question is whether Webb’s voluntary dismissal of the suit without prejudice on August 3,1993 — one day after she filed her chiropractic legal panel application — had the effect of nullifying the prior tolling of the statute. We previously held in Tietjen v. Heberlein (1918), 54 Mont. 486, 488, 171 P. 928, 928, that where an action is voluntarily dismissed prior to the commencement of a second action, the first action does not toll the statute of limitations. That decision was based on the predecessor of Montana’s “saving statute,” which provides that if an action is commenced within the applicable statute of limitations, and is thereafter terminated “in any other manner than by voluntary discontinuance,” the plaintiff may commence a new action for the same cause after the expiration of the time so limited and within one year after such a termination. Section 27-2-407, MCA (emphasis added).

Tietjen is not dispositive of the tolling issue raised in this case, however. In the first place, Tietjen was neither a medical nor chiropractic malpractice case, but rather, was an action brought to recover the amount of a succession tax. Furthermore, Tietjen was decided in 1918, years prior to 1977 when the Montana Medical Legal Panel Act was enacted, and years prior to 1989, when the Montana Chiropractic Legal Panel Act was enacted, each Act with its respective tolling provisions. Sections 27-6-702 and 27-12-701, MCA. The same is true of the predecessor to § 27-2-407, MCA, which was originally enacted in the 1870s.

Accordingly, neither the statute nor our decision could have accounted for the tolling provisions of the Panel Acts. While Tietjen correctly applied the “saving statute” to the facts at issue in that case, given the legislature’s enactment years later of specific tolling provisions uniquely applicable to medical and chiropractic malpractice cases pending before the malpractice panels, we conclude that neither § 27-2-407, MCA, nor our decision in Tietjen, is controlling based on the facts here. Rather, §§ 27-6-702 and 27-12-701, MCA, specifically provide for tolling while a claim is pending before the respective panels, and it is those statutes which must be given controlling effect in a medical or chiropractic malpractice case where, as in the instant case, the facts implicate both the statute of repose, § 27-2-205, MCA, and the panel tolling statutes.

Applying the panel tolling statutes compels the conclusion that, in a medical or chiropractic malpractice case, if a plaintiff’s first complaint was timely filed but is voluntarily dismissed while the case is pending before a malpractice panel in proceedings which name the original defendants as necessary parties, §§ 27-2-702 and 27-12-701, MCA, provide, as to those originally named defendants, a continuous tolling “bridge” between the first complaint and the subsequently filed complaint, assuming the latter is timely filed under the Panel Acts and names the original defendants.

Furthermore, Montana’s “saving statute” does not address the situation that presents itself in this case in which Webb’s cause of action was tolled by a separate action filed before the dismissal of the original suit. When the second action is filed prior to dismissal of the original suit, we hold that the commenced action continues to pend, and so long as the second forum has jurisdiction over the action the statute of limitations remains tolled, even after the voluntary discontinuance of the first action. Only by allowing and encouraging consolidation of actions in this manner can the objectives of avoiding duplication and unnecessary expense (which are recognized in both the Montana Medical Legal Panel Act at § 27-6-702, MCA, and the Chiropractic Legal Panel Act at § 27-12-701, MCA) be accomplished.

A similar situation was addressed by the Fourth Circuit Court of Appeals in Louisiana in Levy v. Stelly (La. App. 1973), 277 So. 2d 194. In Levy, the plaintiff filed suit in state court on September 27, 1967, within one year of his January 1967 accident, as required by the Louisiana statute of limitations. While the state court action was pending, he filed a second suit in federal district court on November 22, 1968, more than one year from the date of his accident. The state court action was dismissed without prejudice in January 1972, and the plaintiff refiled in state court on March 17, 1972. The state trial court, however, dismissed the second action as barred by the applicable one-year statute of limitations.

On appeal, the plaintiff contended that the original state court action tolled the statute of limitations, and therefore, that the subsequent suit in federal court, filed while the first case was pending, was timely. The plaintiff also asserted that, because the statute of limitations remained tolled while the federal action was pending, the second state court action was not barred by the statute of limitations. The defendants, however, maintained that the first tolling period had been nullified by the dismissal of the first state court action, and therefore, that the statute of limitations had run prior to the date on which the plaintiff filed the federal court suit. The defendants relied on a Louisiana statute, La. Civ. Code Ann. art. 3519, which provided:

If the plaintiff in this case, after having made his demand, abandons, voluntarily dismisses, or fails to prosecute it at the trial, the [tolling of the statute of limitations] is considered as never having happened.

The Louisiana Court of Appeals, however, construed the statute to apply only to suits filed after a plaintiff abandoned, voluntarily dismissed, or failed to prosecute his case; in the situation where a plaintiff had filed a second suit prior to that abandonment, the court held that the statute was continuously tolled. Levy, 277 So. 2d at 195-96.

In effect, Louisiana’s statute, La. Civ. Code Ann. art. 3519, parallels our prior interpretation of Montana’s “saving statute,” in Tietjen, 171 P. 928, where this Court held that when an action is voluntarily dismissed prior to the commencement of a second action, the first action did not toll the statute of limitations. Therefore, we conclude that the language and reasoning of Levy and its progeny are persuasive. See Tug Alamo, Inc. v. Electronic Service, Inc. (La. App. 1973), 275 So. 2d 419; Pfiffner v. Correa (La. App. 1994), 640 So. 2d 281, rev’d on other grounds (La. 1994), 643 So. 2d 1228.

We note also that Levy’s holding was recently affirmed in the medical malpractice context by Pfiffner, 640 So. 2d 281, in which the Fourth Circuit Court of Appeals in Louisiana held that:

A second suit which was filed after the original suit was dismissed or abandoned is considered as never having been filed and prescription is applicable. To the contrary, a second suit filed before the original suit was abandoned or dismissed interrupts prescription.....If the second suit is filed prior to abandonment of the first suit, the interruption provided by the first suit continues until the second suit is filed and interruption continues after the suit is dismissed because the second suit is pending.

Pfiffner, 640 So. 2d at 285 (citations omitted; emphasis added).

Contrary to the concerns expressed in the dissenting and concurring opinions, we are not adopting Louisiana law. We are merely citing the Levy and Pfiffner decisions as examples of what has been done in one other jurisdiction under similar circumstances. Furthermore, whether the source of Louisiana law is the Napoleonic Code or the Code of Hammurabi is really irrelevant. The fact is that Louisiana has 183 years of case law which interprets its statutes and which is as valid for purposes of persuasion as the case law of any other jurisdiction within the United States. Furthermore, we have not hesitated in the past to cite authority from Louisiana where we felt that the decisions of that state’s courts were persuasive. The Montana Supreme Court has relied on Louisiana case law no fewer than sixty-six times since 1945. The Court has, in fact, relied heavily on Louisiana case law in several instances. See, e.g., Patton v. Madison County (1994), 265 Mont. 362, 368, 877 P.2d 993, 996 (holding that a Louisiana Supreme Court case “is instructive as to the rationale for not extending standing rights to those persons not a part of the subdivision,” and quoting extensively from that case); Iowa Mutual Ins. Co. v. Davis (1988), 231 Mont. 166, 171-72, 752 P.2d 166, 170 (holding that a Louisiana Second Circuit Court of Appeals decision was “persuasive” on the issue of whether mandatory liability insurance protection prohibits the exclusion of named drivers from coverage under a motor vehicle liability policy); In re Estate of McLaughlin (1969), 154 Mont. 318, 321-22; 462 P.2d 882, 884-85; and Interstate Mfg. Co. v. Interstate Products Co. (1965), 146 Mont. 449, 454, 408 P.2d 478, 481.

We conclude that based on the facts in this case, all of the objectives of the statute of repose have been accomplished. Webb’s original application was filed within five years from the date which respondents contend was her “date of injury,” and therefore, within the time period the Legislature has deemed reasonable. Upon receipt of that application, the panel director notified respondents of Webb’s claim. See § 27-6-305, MCA. Webb’s application or complaint has been, at all times since that date, pending before a tribunal with authority to entertain her claim, and in a manner that tolled the statute of limitation and repose. Webb’s summons and complaint were served within three years from the date on which the original timely complaint was filed, and the respondents demonstrate no prejudice from the chronology of events. To require more would elevate form over substance.

We therefore hold that Webb commenced this action within five years from the date of her injury, as required by § 27-2-205, MCA. We further hold that the statute of limitations was thereafter continuously tolled, and therefore, that the District Court erred when it granted respondents’ motions for summary judgment. Because we hold that Webb’s complaint is not barred by the five-year statute of repose found at § 27-2-205, MCA, we reverse the District Court’s order and remand for further proceedings.

JUSTICES NELSON, HUNT and LEAPHART concur.

JUSTICE GRAY,

specially concurring.

I concur in the result the Court reaches and in the analysis and application of Montana law on which it relies to reach that result. I write separately to note my disagreement with that section of the Court’s opinion which discusses Louisiana statutory and case law.

Specifically, I do not agree thatLeuy addresses a similar situation since, unlike the case before us, it involved a second suit filed before the first suit was abandoned. Nor do I find the language or reasoning of Levy and its progeny “persuasive.” I will not repeat here the cogent discussion regarding the Court’s use of Louisiana law in general, and Levy in particular, set forth in Justice Erdmann’s dissent. Suffice it to say that I agree with that discussion.

Notwithstanding my disagreement with the inclusion of the Levy section in the Court’s opinion, however, I join in the result the Court reaches because it is my view that the Court properly analyzes and applies Montana law to reach that result. For that reason, it also is my view that the Court’s Levy discussion is dicta because it is unnecessary to the resolution of the issue before us, which is fully and properly reached on the basis of Montana law.

JUSTICE ERDMANN

dissenting.

In reversing the District Court, the majority holds that Webb’s December 13, 1993, complaint for an injury which occurred on October 7, 1986, was not time-barred. The majority allows Webb to “bridge” an untolled period of time and therefore nullifies the five-year statute of repose. This “bridge” is not supported by either Montana precedent or relevant Montana statutes. Despite this lack of legal support, the “bridge” will undoubtedly see a good deal of traffic in years to come as otherwise time-barred plaintiffs find it a useful detour.

The running of the applicable limitation period in a malpractice claim is tolled upon receipt of an application for review by the director of the medical legal panel. Section 27-6-702, MCA. The statute does not begin running again until thirty days after the panel’s final decision. In the present case, the statute was tolled on September 9, 1991, when Webb filed her application for review with the medical legal panel — four years, eleven months, and two days after her date of injury. The medical legal panel reached its final decision on March 18,1992. Thus, had nothing tolled the statute, the statute would have began running again on April 17, 1992, and the five-year statute of repose would have therefore expired in mid-June 1992.

Webb claims, and the majority so holds, that when she filed her initial district court complaint on April 16,1992, the limitation period was again tolled pending resolution of the complaint. Furthermore, the majority holds that Webb’s voluntary dismissal of the complaint on August 3,1993, did not nullify any tolling effect that the complaint had. The majority states that the complaint was still pending on August 2, 1993, when Webb filed her application for review with the chiropractic legal panel and the statute again remained tolled during the pendency of that action. The majority therefore determined that Webb’s second district court complaint, filed on December 13, 1993, within thirty days after the chiropractic legal panel’s final decision, was not time-barred. Webb was originally injured in May 1986. By constructing this bridge, the majority has allowed the filing of a complaint on December 13,1993, almost one and one-half years after the five-year statute of repose expired.

Under Montana’s “saving statute” and prior precedent, the first complaint failed to toll the statute of limitations. The defendants were never served with the April 16, 1992, complaint and they were therefore not placed on notice that Webb had commenced legal action against them. Webb should not now be allowed to claim that the statute was tolled by simply filing the complaint. The majority’s reliance on Blasdel v. Montana Power Co. (1982), 196 Mont. 417, 640 P.2d 889, for the proposition that the statute is tolled when the first complaint is filed, is misleading. In Blasdel the complaint was in fact served on the defendants and the issue was whether the complaint tolled the statute of limitations for subsequent amendments which were determined to relate back to the original complaint.

Even if the first complaint initially had the effect of tolling the statute, Montana law is clear that once it was dismissed its tolling effect was nullified. In Tietjen v. Heberlein (1918), 54 Mont. 486, 171 P. 928, we interpreted Montana’s “saving statute” (presently codified at § 27-2-407, MCA) and held that where an action is voluntarily discontinued prior to the commencement of a second action, the first action does not toll the statute of limitations. Here, Webb voluntarily dismissed her April 16, 1992, complaint prior to commencing her December 13, 1993, action. Thus, the statute was not tolled by the 1992 complaint and her 1993 complaint was time-barred.

The majority mixes apples and oranges when it attempts to distinguish Tietjen by stating that it was decided prior to the enactment of the Medical and Chiropractic Legal Panel Acts and their respective tolling provisions. Our holding in Tietjen that the tolling effect of a properly filed first cause of action is nullified when it is later voluntarily dismissed remains vital today. While in Tietjen we relied on the version of § 27-2-407, MCA, which predated the Medical and Chiropractic Legal Panel Acts, the relevant language that a plaintiff may commence a new action within one year after the original action is terminated “in any other manner than by a voluntary discontinuance” remains in the current version of the “saving statute.” (Emphasis added.)

Section 27-1-101, MCA, states that “[¡Judicial remedies are such as are administered by the courts of justice or by judicial officers ....” Section 27-1-102, MCA, divides judicial remedies into two classes— “actions” and. “special proceedings” — defining the former as “an ordinary proceeding in a court of justice ...” and further stating that “[ejvery other remedy is a special proceeding.” There is no indication that the legislature intended the term “action” in § 27-2-407, MCA, to apply to proceedings brought under the Medical and Chiropractic Legal Panel Acts. The majority, however, has done just that.

Finally, I disagree with the majority’s reliance on and adoption of Louisiana law. While the courts of Louisiana are extremely competent in construing and interpreting Louisiana statutes, it must be remembered that Louisiana is the only state which does not follow the English common law, but rather relies on the Napoleonic Code for its legal traditions and interpretations. Not only is the terminology different, Louisiana’s entire legal tradition is different from Montana’s and we should be extremely reluctant to adopt Louisiana case law as controlling authority in Montana. This is particularly true where we have both Montana case law and statutes which directly address the issue under consideration.

The majority notes that this Court has relied on Louisiana case law no fewer than sixty-six times since 1945 as support for its reliance on Louisiana authority in this case. Since 1945 this Court has issued over 10,500 opinions and its reliance on Louisiana law in only .6 percent of those cases certainly reflects this Court’s reluctance to rely on Louisiana authority.

The Louisiana statute (La. Civ. Code Ann. art. 3519) cited by the majority provides:

If the plaintiff in this case, after having made his demand, abandons, voluntarily dismisses, or fails to prosecute it at the trial, the [tolling of the statute of limitations] is considered as never happened.

Rather than supporting the majority’s position, the plain language of the statute supports our interpretation of the Montana saving statute made in Tietjen. Nevertheless, the Louisiana court, in Levy v. Stelly (La. App. 1973), 277 So.2d 194, construed the statute to hold that if a second suit is filed prior to the abandonment of the first suit, the tolling effect of the first suit continues. The facts of the present case are distinguishable from Levy in that Webb did not file a second suit prior to voluntarily dismissing her initial complaint. Filing applications with the medical and chiropractic legal panels is not analogous to filing district court complaints and the majority’s reliance on the rationale in Levy is not persuasive.

Five years from October 7, 1986, is October 7, 1991. Giving Webb credit for the period of time the statute was tolled while her claim was under review by the medical legal panel, the five-year statute of repose expired in June 1992. In building this “continuous tolling bridge” the maj ority has subverted the legislature’s intent in adopting the five-year statute of repose for medical malpractice cases and provided a road to the courthouse which neither Montana statutes nor prior cases would allow.

I would affirm the District Court’s determination that Webb’s December 13, 1993, complaint was time-barred by § 27-2-205, MCA.

CHIEF JUSTICE TURNAGE joins in the foregoing dissenting opinion.

      . In Louisiana, the term "prescription” “is very nearly equivalent to what is elsewhere expressed by ‘limitation of actions,’ or rather, the ‘bar of the statute of limitations.’ ” Black’s Law Dictionary 11183 (6th ed.1990).

      . The majority reaches no legal conclusion as to the “date of injury” but assumes, for purposes of the opinion, that the date of injury was 1986.


author: JUSTICE TRIEWEILER

text:
    BRIAN J. ANDERSON, Petitioner and Appellant, v. STATE OF MONTANA, DEPARTMENT OF JUSTICE, MOTOR VEHICLE DIVISION, Respondent and Respondent.
    No. 95-277.
    Submitted on Briefs January 11, 1996.
    Decided February 22, 1996.
    53 St.Rep. 125.
    275 Mont. 259.
    912 P.2d 212.

      For Appellant: Gary R. Thomas, Thomas Law Office, Red Lodge.
    For Respondent: Hon. Joseph P. Mazurek, Attorney General, Patricia Jordan, Assistant Attorney General, Helena; Alan Hall, Deputy City Attorney, Billings.
   JUSTICE TRIEWEILER

delivered the opinion of the Court.

Brian Anderson petitioned the District Court for the Thirteenth Judicial District in Yellowstone County for reinstatement of his driver’s license pursuant to § 61-8-403, MCA. Following a hearing, the District Court denied Anderson’s petition. The court found that the arresting officer had reasonable grounds to believe that Anderson had committed the offense of driving under the influence of alcohol, and therefore, concluded that the officer’s stop of Anderson was lawful. Anderson appeals the judgment of the District Court. We affirm the District Court.

There are two issues on appeal:

1. Did the District Court err when it found that the officer had reasonable grounds to believe that Anderson had been driving while under the influence of alcohol?

2. Did the District Court err when it concluded that the officer’s initial detention of Anderson constituted an investigative stop rather than an arrest?

FACTUAL BACKGROUND

On January 17, 1995, between 1 a.m. and 2 a.m., Officer Sandra Leonard was on a routine patrol of the downtown area in Billings. As she approached the intersection of Montana Avenue and 28th Street, she observed a man walking across 28th Street toward a yellow 1980 Chevrolet Citation. The man, later identified as Brian Anderson, appeared to Officer Leonard to be having difficulty walking, and was “shuffling” and “stumbling” across the street.

Although Officer Leonard did not see Anderson get into the yellow Citation, she saw the vehicle driving south on 28th Street a few minutes later and positively identified the driver as the same person she had seen walking across the street. She followed the Citation for several blocks, and observed that Anderson failed to use his turn signal at every turn. Based on Anderson’s driving behavior and on her own police training, Officer Leonard concluded that Anderson was attempting to elude her.

At one point, Anderson pulled into the “drive-through” of the Chinese Kitchen restaurant, which was closed at the time. Officer Leonard thought Anderson would turn into the alley, so she turned east and entered the alley between 28th Street and 29th Street. When she did not see the yellow Citation she turned out of the alley and parked at the corner of 2nd Avenue and 29th Street. As she sat in her car, she observed Anderson walking south on 29th Street in the same shuffling manner. Officer Leonard positively identified Anderson as the same man she had seen driving the yellow Citation.

At that point, Officer Leonard informed the dispatcher that she was going after a DUI suspect. Officer Leonard then got out of her patrol car and “loped across the street” toward Anderson. She testified that when she was ten to fifteen feet behind Anderson she could smell a “very strong odor of intoxicants.” Officer Leonard told Anderson to stop because she needed to talk to him, but Anderson kept walking. She then approached Anderson from behind and applied a “gooseneck hold” on his left arm to detain him. Anderson was not cooperative, and “borderline resist[ed]” Officer Leonard. As she was putting the hold on Anderson, Officer Leonard could smell a very-strong odor of intoxicants coming from him. She walked Anderson back to her patrol car and told him he was under arrest.

Officer Leonard transported Anderson to the Yellowstone County Detention Center. She read Montana’s Implied Consent Law to him, but he refused to submit to a breathalyzer test. Officer Leonard issued Anderson a citation for driving under the influence of alcohol in violation of § 61-8-401, MCA, and seized his Montana driver’s license. The Department of Justice later issued an order suspending Anderson’s driving privileges within the state of Montana.

On January 20, 1995, Anderson filed a petition for reinstatement of his driver’s license. Following a hearing, the Thirteenth Judicial District Court found that Officer Leonard had reasonable grounds to believe that Anderson had been driving a vehicle while under the influence of alcohol. Based on that finding, the court denied Anderson’s petition.

ISSUE 1

Did the District Court err when it found that Officer Leonard had reasonable grounds to believe that Anderson had been driving while under the influence of alcohol?

Our review of a district court’s denial of a petition for reinstatement of a driver’s license is two-fold. We review the court’s findings of fact to determine whether they are clearly erroneous. In re Bauer (1996), [275 Mont. 119], 910 P.2d 886, 887. We then review the court’s conclusions of law to determine whether they are correct. Bauer, [275 Mont. 119], 910 P.2d at 887.

Pursuant to § 61-8-403(4), MCA, the District Court’s review of Anderson’s petition for the reinstatement of his driver’s license was limited to three issues: (1) whether Officer Leonard had reasonable grounds to believe that Anderson had been driving or was in actual physical control of a vehicle upon ways of this state open to the public while under the influence of alcohol, drugs, or a combination of the two; (2) whether Anderson was placed under arrest; and (3) whether Anderson refused to submit to a blood, breath, or urine test, as required by § 61-8-402, MCA. In this case, Anderson maintains only that Officer Leonard did not have reasonable grounds upon which to base her investigative stop. In particular, Anderson maintains that Officer Leonard lacked a “particularized suspicion of some kind of wrongdoing,” and therefore, that her detention of Anderson was unlawful.

We have held that a finding of “reasonable grounds” to make an investigative stop, as required by § 61-8-403, MCA, is in effect, the equivalent of a finding of “particularized suspicion” to make an investigative stop, as set forth in § 46-5-401, MCA. Bauer, [275 Mont. 119], 910 P.2d at 889. Section 46-5-401, MCA, provides:

In order to obtain or verify an account of the person’s presence or conduct or to determine whether to arrest the person, a peace officer may stop any person or vehicle that is observed in circumstances that create a particularized suspicion that the person or occupant of the vehicle has committed, is committing, or is about to commit an offense.

(Emphasis added). The issue of whether a particularized suspicion existed is a question of fact which is dependent on the totality of the circumstances. State v. Reynolds (1995), 272 Mont. 46, 50, 899 P.2d 540, 542-43. Because an investigative stop must be justified by some objective manifestation that the person stopped might be engaged in some criminal activity, this Court has adopted a two-part test to determine whether an officer had sufficient cause to stop a person. State v. Gopher (1981), 193 Mont. 189, 631 P.2d 293. First, the state must show objective data from which an experienced officer can make certain inferences. Gopher, 193 Mont, at 194, 631 P.2d at 296. Second, the state must demonstrate a resulting suspicion that the occupant of a certain vehicle is or has been engaged in wrongdoing or was a witness to criminal activity. Gopher, 193 Mont, at 194, 631 P.2d at 296.

In In re Blake (1986), 220 Mont. 27, 712 P.2d 1338, we upheld a finding of particularized suspicion where a driver exhibited patterns of driving while under the influence of alcohol by swerving into the other lane and driving in the vicinity of several bars at around 2 a.m. More recently, in Bauer, [275 Mont. 119], 910 P.2d at 889, we agreed that particularized suspicion existed where a driver crossed the center line and braked hard around corners while exceeding the speed limit.

In this case, Officer Leonard observed Anderson shuffling and staggering toward his car between 1 a.m. and 2 a.m., just prior to the closing of the bars in downtown Billings. When she followed Anderson in his car, Leonard observed that Anderson employed what she interpreted as evasive driving tactics and failed to use his turn signal in violation of § 61-8-336, MCA. In addition, when Officer Leonard again spotted Anderson shuffling down the sidewalk and attempted to stop him, he failed to respond. At that time, Officer Leonard smelled a strong odor of intoxicants emanating from Anderson. Clearly the combination of Anderson’s stumbling walk, his failure to use his turn signal, his failure to stop when requested to do so by a peace officer, and the smell of intoxicants coming from his person was sufficient to create a particularized suspicion that Anderson may have been driving while under the influence of alcohol. We therefore hold that the totality of the circumstances supports the District Court’s finding that Officer Leonard had a particularized suspicion that Anderson had committed an offense, and therefore, that the court’s finding that Officer Leonard had reasonable grounds to believe that Anderson had been driving under the influence of alcohol was not clearly erroneous.

ISSUE 2

Did the District Court err when it concluded that Officer Leonard’s initial detention of Anderson constituted an investigative stop rather than an arrest?

Anderson contends that Officer Leonard’s detention of him exceeded the lawful bounds of an investigative stop. Anderson specifically maintains that the “gooseneck hold” was so intrusive that it constituted an arrest, and that Officer Leonard did not have probable cause to make an arrest at that time.

This Court has held that three elements must coexist before an arrest occurs: (1) authority to arrest, (2) assertion of that authority with intention to affect an arrest, and (3) restraint of the person arrested. City of Billings v. Whalen (1990), 242 Mont. 293, 297, 790 P.2d 471, 474.

In this case, although Officer Leonard clearly had the authority to arrest Anderson and did in fact restrain him, there is no support for the proposition that at the time she placed the “gooseneck hold” on him she had an intention to arrest him. In fact, Officer Leonard testified without contradiction that she did not intend to arrest him until he resisted her hold and she could clearly identify the odor of intoxicants coming from him. At that time, she walked Anderson to her patrol car and told him he was under arrest.

The fact that Officer Leonard’s decision to arrest was made very soon after the investigative stop does not invalidate the stop, but in fact, furthers the intent of § 46-5-403, MCA, that “[a] stop ... may not last longer than is necessary to effectuate the purpose of the stop.” In addition, this Court has held that an officer who makes an investigative stop is not precluded from making an arrest based on observations made during the stop. As we stated in Jess v. State (1992), 255 Mont. 254, 261, 841 P.2d 1137, 1141, “[a] founded suspicion to stop for investigative detention may ripen into probable cause to arrest through the occurrence of facts or incidents after the stop.” In Jess, we held that the arresting officers had probable cause to arrest after an investigative stop based on their observations of the driver’s bloodshot eyes and slurred speech. Jess, 255 Mont. at 261, 841 P.2d at 1141.

In this case, Officer Leonard attempted to stop Anderson for questioning after observing several incidents which reasonably led her to suspect that Anderson had been driving while under the influence of alcohol. Only when Anderson resisted her verbal attempts to detain him did Officer Leonard apply the “gooseneck hold.” At that point, when Anderson “borderline resisted” and when Officer Leonard could clearly smell the odor of intoxicants coming from him, her suspicions ripened into probable cause. Only then did she walk Anderson toward her patrol car and tell him he was under arrest. The use of the gooseneck hold was nothing more than a reasonable means of detaining Anderson during the execution of an investigative stop, and without more, did not elevate the stop into an arrest. See, e.g., State v. Morsette (1982), 201 Mont. 233, 243, 654 P.2d 503, 508 (holding that the officer’s use of a shotgun to effectuate a stop “was fully justified ... during the execution of the investigatory stop, for [the officer’s] own protection”).

We conclude that the District Court’s finding that Officer Leonard’s initial stop of Anderson was reasonable and was based on the necessary particularized suspicion of unlawful conduct was not clearly erroneous. We conclude that Officer Leonard’s initial detention constituted an investigative stop which led to further observations which established probable cause to arrest. Therefore, we affirm the District Court’s denial of Anderson’s petition for reinstatement of his driver’s license.

JUSTICES NELSON, HUNT, GRAY and LEAPHART concur.


author: JUSTICE LEAPHART

text:
    BILLY A. SLATER, Plaintiff and Respondent, v. CENTRAL PLUMBING AND HEATING COMPANY, Defendant and Appellant, and EDSALL CONSTRUCTION COMPANY, INC., (AMERICAN STATES INSURANCE COMPANY, SUBROGEE), Defendant and Respondent.
    No. 95-369.
    Submitted on Briefs January 18, 1996.
    Rehearing Denied March 21, 1996.
    Decided February 22, 1996.
    53 St.Rep. 132.
    275 Mont. 266.
    912 P.2d 780.

      For Appellant: George D. Goodrich; Garlington, Lohn & Robinson, Missoula.
    For Respondent: James R. Walsh; Smith, Walsh, Clarke & Gregoire, Great Falls.
   JUSTICE LEAPHART

delivered the Opinion of the Court.

Central Plumbing & Heating Company (Central) appeals from the March 17, 1995, order of the Eighth Judicial District Court, Cascade County, granting American States Insurance Company’s (American) summary judgment on a cross-claim, brought in the name of Edsall Construction Company (Edsall), concluding that Central had breached its contract with Edsall. We reverse.

We consider the following issues on appeal:

1. Did the District Court err in granting summary judgment to Edsall concluding that Central breached the subcontract agreement?

2. Did the District Court err in awarding prejudgment interest and attorney’s fees to Edsall?

Edsall was the general contractor on a project to build a commissary building, over 30 feet high, on Malmstrom Air Force Base, located near Great Falls, Montana. Edsall contracted with Central, a subcontractor, to perform work on the project. In turn, Central sub-subcontracted with other construction companies, including Building Sprinkler Company. On March 10, 1988, Billy Slater (Slater), an employee of Building Sprinkler, was injured when a wheel on the motorized scaffolding he was using to install a fire control system fell into a floor drain grate causing the scaffolding to tip and Slater to fall. Defendant Central had installed the floor drains.

Slater filed suit against Edsall and Central for his injuries. Slater moved for partial summary judgment as to liability against Edsall. The District Court found that “the party originally responsible for job safety has a non-delegable duty to employees of subcontractors.” The District Court determined that, by virtue of its prime contract with the United States Government, Edsall had a nondelegable duty to provide for the safety of workers and ensure the compliance of subcontractors. The District Court ruled that Edsall, in failing to properly cover or protect the floor openings, had violated its own contractual duties as well as the Montana Scaffolding Act, §§ 50-77-101 to 50-77-107, MCA, (the Act). Further, the District Court recognized that as the party in control of the work, Edsall was absolutely liable for any violation of the Act. Thus, the District Court granted the motion for partial summary judgment against Edsall on the issue of liability.

In addition, Slater moved for partial summary judgment against Central; the court, however, denied that motion. Before trial, Slater settled with Central. The District Court directed a verdict for Slater against Edsall on the questions of duty, breach and causation, thus, the jury determined only the amount of damages. The jury awarded Slater $675,000. No appeal was taken from this verdict. American, Edsall’s insurer, paid the judgment.

Subsequently, American, in Edsall’s name, filed an amended cross-claim against Central claiming indemnification due to Central’s breach of the subcontract agreement between Central and Edsall. American’s complaint alleged that:

The contract between Edsall and Central, and in particular the first paragraph thereof, was breached by Central .... These breaches caused the judgment against Edsall and payment by Edsall to Billy Slater described herein, and for that reason, Edsall is entitled to be fully indemnified by Central Plumbing and Heating for its loss.
Alternatively, and in addition to the foregoing, the contract between Edsall and Central provides at paragraph 9 that Central will protect and indemnify Edsall against any loss or damage suffered by anyone arising through the negligence of Central, or those employed by it, or its agents or servants. Under this provision, Central is liable to Edsall for all damages caused by its negligence, the negligence of its sub-sub-contractor, or of Billy Slater himself.

Both Central and American moved for summary judgment. Central claimed that “Edsall, by virtue of its prime contract with the United States Government, had a non-delegable duty to provide for the safety of workers and ensure the compliance of subcontractors.” Further, because Central was not the party in control of the workplace, it was not liable as a matter of law. American argued that Central had breached the subcontract agreement by not complying with the Act and the Occupational Safety and Hazard Act (OSHA). On April 18, 1992, the District Court granted summary judgment in favor of American on the breach of contract claim leaving the question of damages for a later determination. On March 17, 1995, the District Court awarded judgment against Central in the amount of $630,044.31 (the amount that American had paid Slater), together with interest accruing at the rate of 10% per annum from June 3, 1991. The District Court, pursuant to a clause in the subcontract agreement, also awarded American attorney’s fees and costs incurred in the defense of Slater’s claim against Edsall and in the prosecution of the cross-claim against Central. Central appeals from this determination.

1. Did the District Court err in granting summary judgment to Edsall concluding that Central breached the subcontract agreement?

Our standard in reviewing a district court’s grant of a motion for summary judgment is the same as that used by the district court; we are guided by Rule 56(c), M.R.Civ.P. Chilberg v. Rose (1995), [273 Mont. 414], 903 P.2d 1377, 1378-79 (citing Minnie v. City of Roundup (1993), 257 Mont. 429, 431, 849 P.2d 212, 214). Thus, we determine whether a genuine issue of material fact exists and whether the moving party is entitled to judgment as a matter of law. Chilberg, 903 P.2d at 1378-79. In this case, the underlying facts are not in dispute,' therefore, we consider whether the District Court was correct in concluding that American was entitled to damages for breach of the subcontract agreement as a matter of law.

A violation of the duties imposed by the Montana Scaffolding Act imposes absolute liability. Mydlarz v. Palmer / Duncan Constr. Co. (1984), 209 Mont. 325, 336, 682 P.2d 695, 701. Once the District Court determined that Edsall was liable for Slater’s injuries because of its violations of the Act, American should not have the opportunity to pin that liability on the subcontractor. Edsall did not appeal from the judgment finding that it was liable for violations of the Act. It is, therefore, inconsistent for American to claim that Central breached the subcontract and assert that the damages it paid on behalf of Edsall, the party found to be responsible, were due to Central’s violation of OSHA rather than Edsall’s violations of the Act. The District Court’s instructions to the jury, as well as its original order, were premised on Edsall’s violations of the Act. Although American argues that health and safety requirements were incorporated by reference into Edsall’s subcontract with Central, the Act was not one of the safety requirements referenced in the prime contract. Thus, when the prime contract did not even mention the Act, Central could not have assumed duties under the Act by reference to the prime contract. In addition, Central did not expressly assume duties under the Act in its subcontract with Edsall.

The District Court determined that Edsall violated the Act in its own right by failing to properly secure or protect the floor openings. The District Court instructed the jury that:

I have also ruled that Edsall Construction Company violated another section of the Scaffolding Act. Specifically, they violated a section of the Act which required all floor openings, be covered or otherwise properly protected to prevent persons or equipment from falling into the openings of the floor.

Thus, the District Court determined that Edsall itself had violated § 50-77-104, MCA.

The Montana Scaffolding Act subjected Edsall to absolute liability. Section 50-77-101, MCA. To allow American to recover for breach of the subcontract is, in effect, to grant indemnity to American for its insured’s violations of the Act. This Court has held that a party cannot be indemnified against its own negligence unless the contract provisions are clear and unequivocal. Sweet v. Colborn Sch. Supply (1982), 196 Mont. 367, 369-70, 639 P.2d 521, 523. We note that American relies on our opinion in Howard S. Wright Constr. v. F.E. DeBeer Mechanical (1980), 185 Mont. 47, 49, 604 P.2d 323, 325, which expresses a contrary holding on facts similar to the instant case. However, since Howard S. Wright was decided, this Court has adopted a standard under which contractual provisions that indemnify a party for its own negligence must be “clear and unequivocal” to be enforceable. Sweet, 639 P.2d at 523.

In light of Sweet, the indemnity clause in Howard S. Wright and the clause at issue in the instant case are not sufficiently “clear and unequivocal” to indemnify a general contractor for its own negligence. Although the contract requires Central to indemnify Edsall for damages arising out of Central’s negligence, it does not require Central to indemnify Edsall for Edsall’s own negligence. In addition, Edsall’s cross-claim alleges that it is entitled to indemnification due to Central’s breach of the subcontract. In seeking indemnification, American is attempting to hold Central responsible for Edsall’s own violation of the Act; a finding that Edsall did not appeal.

As the District Court noted, “the contract does not clearly and unequivocally indemnify Contractor/Edsall for its negligent acts. Since this Court has found that Edsall was negligent per se, Edsall may not use the indemnification clauses of the contract in order to recover against Central.” However, that is precisely the effect of the District Court’s determination that Central was liable for breach of the subcontract. The underlying “breach of contract” arguably resulted in Slater’s injury, an injury that the District Court already determined was completely attributable to Edsall based on Edsall’s nondelegable duty of safety and Edsall’s violations of the Act.

American asserts that Camp, Dresser & McKee v. Technical Design Assoc. (2d Cir. 1991), 937 F.2d 840, is relevant to our inquiry. In Camp, the Second Circuit Court of Appeals stated that the case was:

[a]n indemnification case only in the sense that the amount of damages, which the trial court awarded to [plaintiff] is the amount of money which [plaintiff] paid the City as a result of the consent judgment. The cause of action on which [plaintiff] recovered below, however, is not an indemnification theory, but a breach of contract theory.

Camp, 937 F.2d at 843. In Camp, the underlying suit involved a defective heating and cooling system which had been installed by a subcontractor. The prime contractor settled with the owner of the project and then sued the subcontractor for breach of contract. In Camp, no underlying nondelegable duty was imposed on the prime contractor. Further, there is no indication that the prime contractor had breached any of its duties.

In the instant case, however, the District Court found Edsall to be the responsible party pursuant to Edsall’s own violations of the Act. Recently, we determined that where the duties imposed on the general contractor by virtue of the prime contract are nondelegable, the general contractor cannot avoid liability by attempting to shift responsibility for those duties to someone else. Steiner v. Department of Highways (1994), 269 Mont. 270, 276, 887 P.2d 1228, 1232 (citing Nave v. Harlan Jones Drilling (1992), 252 Mont. 199, 202-03, 827 P.2d 1239, 1241). Here, the District Court determined that Edsall had a nondelegable duty of safety, and that Edsall’s violation of that duty and Edsall’s own violations of the Act were the proximate cause of Slater’s injuries. Once these determinations had been made, and absent a clear and unequivocal indemnity clause in the contract, the District Court erred when it, in effect, granted Edsall indemnity for its own negligence.

We determine that American was not entitled to indemnification based upon breach of contract. Accordingly, as the underlying claim is reversed, we need not consider the amount of the damage award, the award of attorney’s fees and costs, or the award of prejudgment interest raised in issue two.

Reversed.

CHIEF JUSTICE TURNAGE, JUSTICES HUNT, TRIEWEILER and GRAY concur.