author: JUSTICE REGNIER JUSTICE LEAPHART, JUSTICE TRIEWEILER

text:
    SAM DOBLE, d/b/a DOBLE LOGGING, Plaintiff and Appellant, v. CECIL BERNHARD, BERNHARD BUSINESS TRUST, Defendant and Respondent.
    No. 97-470.
    Submitted on Briefs January 8, 1998.
    Rehearing Denied June 11, 1998.
    Decided May 20, 1998.
    1998 MT 124.
    55 St.Rep. 489.
    959 P.2d 488.
    289 Mont. 80.

      See C.J.S. Logs and Logging § 27.
    For Appellant: S. Charles Sprinkle; Douglas Law Firm, PC.; Libby.
    For Respondent: Thomas R. Bostock; Warden, Christiansen, Johnson & Berg, PLLP; Kalispell.
   JUSTICE REGNIER

delivered the opinion of the Court.

¶1 In April 1992, plaintiff and appellant Sam Doble, d/b/a Doble Logging, filed an action in the District Court for the Nineteenth Judicial District in Lincoln County against Cecil Bernhard, Bernhard Business Trust. Doble, a logging contractor, brought suit against Bernhard alleging breach of a logging contract, and breach of the implied covenant of good faith and fair dealing. Bernhard subsequently filed a motion for summary judgment, which the District Court granted in an April 14, 1997, order. Doble filed a motion to alter or amend the court’s judgment, which the court denied on June 25,1997. It is from the court’s order granting Bernhard’s motion for summary judgment, as well as from the court’s order denying Doble’s motion to alter or amend, that Doble presently appeals. For the reasons stated below, we reverse.

¶2 Generally at issue on appeal is whether the District Court erred in granting Bernhard’s motion for summary judgment. More specifically, we find the following issues dispositive:

¶3 1. Did the District Court err in concluding that the logging contract entered into by Doble and Bernhard expired on July 1, 1989?

¶4 2. Did the District Court err in concluding the parties had not entered into an enforceable oral agreement altering the terms of the logging contract?

¶5 3. Did the District Court err in concluding that, as a matter of law, Bernhard had not breached the covenant of good faith and fair dealing?

FACTUAL AND PROCEDURAL BACKGROUND

¶6 On December 31,1987, Sam Doble, an independent contract logger, entered into a logging agreement with his uncle, Cecil Bernhard, who owned 480 acres of timberland located in Lincoln County, Montana. The December 31, 1987, logging contract set forth the terms pursuant to which Doble was to log portions of Bernhard’s property. The contract provided, in pertinent part, as follows:

LOGGING AGREEMENT
Agreement made on the 31 day of December, 1987 between Cecil Bernhard and Bernhard Business Trust, a Montana Business Trust, organized and existing under the laws of the State of Montana, herein referred to as “Company” and Sam Doble an individual doing business under the name of Doble Logging herein referred to as “contractor.”
In consideration of the mutual promises hereinafter stated, company and contractor agree as follows:
LOCATION
Contractor shall log designated timber from the following described real property: said property being described on the attached Exhibit “A” and by this reference made a part hereof. Parcels or pieces of these areas are to be issued to the contractor for logging as agreed upon between contractor and company. Company reserves the right to limit area or volume to approval of logging job completed and to performance bond advanced and to time contractor will need to complete the job.
TERM OF CONTRACT
The contract shall extend for a period of eighteen (18) months but considerable progress must be made on the contract by 60 days after approval by FSLIC as time is of the essence. An extension of six (6) months can be obtained at the discretion of company.
STARTING DATE
Contractor shall begin logging within thirty (30) days from the date of approval of FSLIC unless otherwise agreed to by the parties.
MISCELLANEOUS
4.Time is of the essence of this contract.

¶7 According to Doble, the Federal Savings and Loan Insurance Company (FSLIC) approved the contract sometime in the late summer of 1988. Doble spent that fall completing another logging project, and thus did not begin logging Bernhard’s property until approximately November 15,1988. Between November 15,1988 and July 14, 1989, Doble’s logging efforts generated a total of roughly $264,800 in gross proceeds.

¶8 In June 1989, Doble learned of yet another logging project available near Big Sandy, in eastern Montana. In mid-June, Doble met in Kalispell with Bernhard and Gregory Paskell, Bernhard’s attorney. Doble asserts that, during this meeting, he told both Bernhard and Paskell of his interest in pursuing the Big Sandy logging project, but that Bernhard and Paskell urged him to complete Bernhard’s project instead. Doble continued logging on Bernhard’s property until July 14,1989, when Bernhard mailed Doble a written notice terminating the contract.

¶9 Doble filed an action in District Court, seeking a preliminary injunction in an attempt to prevent Bernhard from removing him from the project. The District Court denied Doble’s motion for temporary injunctive relief on August 3,1989, and Doble subsequently vacated Bernhard’s property.

¶10 Doble initiated the present action on April 28,1992, asserting claims against Bernhard for breach of contract and breach of the covenant of good faith and fair dealing. Roughly two and one-half years later, on November 22, 1994, Bernhard filed a motion to dismiss for failure to prosecute. Little developed, and on October 30, 1996, approximately four and one-half years after Doble filed his complaint, Bernhard filed a second motion to dismiss for failure to prosecute. In light of the public policy favoring resolution of disputes on their merits, and in light of Doble’s renewed efforts in pursuing his case, the court denied Bernhard’s motion to dismiss in a January 29,1997, order.

¶11 Bernhard filed a motion for summary judgment on March 3, 1997. On April 14,1997, the District Court entered an order granting Bernhard’s motion for summary judgment. On April 16, 1997, the court supplemented its earlier order, and entered a document explaining the rationale in support of its decision to grant Bernhard’s motion for summary judgment. Doble subsequently filed a motion to alter or amend the court’s summary judgment ruling, which the court denied in a June 25,1997, order. Doble filed a timely notice of appeal on July 2,1997.

DISCUSSION

¶12 This Court’s standard of review in appeals from summary judgment rulings is de novo. Treichel v. State Farm Mut. Auto. Ins. Co. (1997), 280 Mont. 443, 446, 930 P.2d 661, 663 (citing Motarie v. Northern Montana Joint Refuse Disposal Dist. (1995), 274 Mont. 239, 242, 907 P.2d 154, 156; Mead v. M.S.B., Inc. (1994), 264 Mont. 465, 470, 872 P.2d 782, 785). This Court reviews a summary judgment order en tered pursuant to Rule 56, M.R.Civ.P. based on the same criteria applied by the district court. Treichel, 280 Mont. at 446, 930 P.2d at 663 (citing Bruner v. Yellowstone County (1995), 272 Mont. 261, 264, 900 P.2d 901, 903).

¶13 In proving that summary judgment is appropriate:

The movant must demonstrate that no genuine issues of material fact exist. Once this has been accomplished, the burden then shifts to the non-moving party to prove by more than mere denial and speculation that a genuine issue does exist. Having determined that genuine issues of material fact do not exist, the court must then determine whether the moving party is entitled to judgment as a matter of law. [This Court] reviews the legal determinations made by the district court as to whether the court erred.

Bruner, 272 Mont. at 264-65, 900 P.2d at 903.

¶ 14 Moreover, the “moving party has the burden of showing a complete absence of any genuine issue as to all facts considered material in light of the substantive principles that entitle the moving party to judgment as a matter of law and all reasonable inferences are to be drawn in favor of the party opposing summary judgment.” Kolar v. Bergo (1996), 280 Mont. 262, 266, 929 P.2d 867, 869.

ISSUE 1

¶ 15 Did the District Court err in concluding that the logging contract entered into by Doble and Bernhard expired on July 1, 1989? ¶16 In granting Bernhard’s motion for summary judgment, the District Court concluded that the contract at issue took effect on December 31,1987, and extended for a period of eighteen months, terminating on July 1,1989. The court determined that the terms of the contract were clear and unambiguous on this point, and rejected Doble’s assertion that the contract did not take effect until its approval by the FSLIC.

¶17 On appeal, Doble argues the court erred in concluding the contract expired on July 1, 1989, instead asserting that the question of when the contract commenced, and when it expired, constitutes a genuine issue of material fact precluding summary judgment in Bernhard’s favor. Doble asserts that those portions of the logging agreement which govern the contract’s term and its starting date are in conflict and, therefore, ambiguous. More specifically, Doble argues that portion of the contract which provides the term of contract “shall extend for a period of eighteen (18) months,” conflicts with that portion mandating that the “[contractor shall begin logging within thirty (30) days from the date of approval of FSLIC.” Doble argues it was the parties’ intent that the contract not take effect until approved by the FSLIC. Doble asserts the FSLIC did not approve the contract until late summer of 1988, and correspondingly argues that the eighteen-month contract term did not expire until well after the July 1, 1989, date relied upon by the District Court. Doble thus maintains that whether the parties intended the contract to take effect on the date it was signed, or upon approval by the FSLIC, is a question of material fact precluding summary judgment in Bernhard’s favor.

¶18 In contrast, Bernhard argues the terms of the contract were clear, and asserts the contract took effect when entered by the parties on December 31,1987, and expired eighteen months later on July 1, 1989. Because the terms of the contract are clear on this point, Bernhard asserts, the parol evidence rule precludes the court from looking beyond the terms of the contract itself for evidence of the parties’ intent.

¶19 It is well-settled by this Court that, “[w]here the language of an agreement is clear and unambiguous and, as a result, susceptible to only one interpretation, the duty of the court is to apply the language as written.” Carelli v. Hall (1996), 279 Mont. 202, 209, 926 P.2d 756, 761 (citing Audit Services, Inc. v. Systad (1992), 252 Mont. 62, 65, 826 P.2d 549, 551). Whether or not an ambiguity exists is a question of law for the court to decide. Carelli, 279 Mont. at 209, 926 P.2d at 761. Only where an ambiguity exists may the court turn to extrinsic evidence of contemporaneous or prior oral agreements to determine the intent of the parties. Carelli, 279 Mont. at 209, 926 P.2d at 761; Monte Vista Co. v. Anaconda Co. (1988), 231 Mont. 522, 529, 755 P.2d 1358, 1362. We have recognized that “[a]n ambiguity exists when the contract taken as a whole in its wording or phraseology is reasonably subject to two different interpretations.” Wray v. State Comp. Ins. Fund (1994), 266 Mont. 219, 223, 879 P.2d 725, 727 (quoting Morning Star Enterprises v. R.H. Grover (1991), 247 Mont. 105, 111, 805 P.2d 553, 557). If the terms of the contract are clear, however, “there is nothing for the courts to interpret or construe” and the court must determine the intent of the parties from the wording of the contract alone. Wray, 266 Mont. at 223, 879 P.2d at 727; Martin v. Community Gas & Oil Co. (1983), 205 Mont. 394, 398, 668 P.2d 243, 245.

¶20 That portion of the logging agreement governing its effective term provides that the contract would “extend for a period of eighteen (18) months.” We conclude, as did the District Court, that the foregoing language clearly and unambiguously establishes that the contract took effect when signed by the parties on December 31, 1987, and was to extend for a period of eighteen months. That the agreement required Doble to “begin logging within thirty (30) days from the date of approval of FSLIC” did not alter the explicit starting date of the contract term, but simply set forth the time by which Doble was to begin his logging operations. In other words, as the District Court reasoned, the FSLIC’s approval of the contract was merely a “condition precedent to the commencement of logging activity,” and did not delay the effective date of the contract or otherwise “extend the term of the contract.” Similarly, we conclude that portion of the contract requiring Doble to have made “considerable progress ... on the contract by 60 days after approval by the FSLIC” does not alter the fact that the contract took effect when signed by the parties on December 31, 1987.

¶21 We thus conclude, as did the District Court, that the contract entered into by the parties on December 31,1987, expired pursuant to its own terms on July 1, 1989. Based on the foregoing, we conclude that Doble has failed to demonstrate the presence of a genuine issue of material fact with respect to the question of when the eighteen-month contract term commenced and expired sufficient to withstand Bernhard’s motion for summary judgment.

ISSUE 2

¶22 Did the District Court err in concluding the parties had not entered into an enforceable oral agreement altering the terms of the logging contract?

¶23 With respect to the modification of written contracts, § 28-2-1602, MCA, specifically provides that “[a] contract in writing may be altered by a contract in writing or by an executed oral agreement, and not otherwise.” For an oral agreement, such as the one alleged by Doble in the present case, to effectively alter the terms of a written contract, that oral agreement must be fully executed “on both sides of the agreement.” Westfork Const. Co. v. Nelcon, Inc. (1994), 265 Mont. 398, 402-03, 877 P.2d 481, 484 (citing Kraft v. Hodson (1992), 254 Mont. 262, 264, 836 P.2d 1234, 1236.) We have recognized that “[a]n oral agreement modifying a written agreement is executed when its terms have been fully performed.” Eagle Watch Investments, Inc. v. Smith (1996), 278 Mont. 187, 194-95, 924 P.2d 257, 261 (quoting Lemley v. Allen (1983), 203 Mont. 37, 41, 659 P.2d 262, 265).

¶24 On appeal, Doble argues the District Court erred in concluding there existed “no enforceable oral modification of the Logging Agreement which would extend the term of the contract.” Doble asserts that, even if the contract as drafted would have expired on July 1, 1989, the parties entered into an oral agreement pursuant to which they effectively altered the date by which the contract would expire. More specifically, Doble asserts that during his meeting with Bernhard and Bernhard’s attorney in June 1989, both Bernhard and his attorney “orally agreed to modify the contract in such manner as to require that [Doble] forsake the Big Sandy job to complete the Bernhard job.” Thus, as he did before the District Court, Doble argues he and Bernhard orally modified the terms of the written contract, extending the term of the agreement to permit Doble to continue working with Bernhard until all of Bernhard’s timber had been harvested. Doble argues Bernhard then “breached the contract by wrongfully terminating [Doble’s] performance” by way of the July 14, 1989, notice of termination. In light of the foregoing, Doble asserts there exists a genuine issue of material fact as to whether the parties executed an oral agreement that altered the terms of the written contract, thereby extending the date by which it would terminate.

¶25 Bernhard, in contrast, argues there exists neither a written agreement nor an executed oral agreement which would serve to effectively alter the terms of the agreement as originally written. Bernhard argues “Doble simply alleges that Bernhard and his attorney insisted that he perform the Logging Agreement as originally written,” and has therefore failed to even raise a question of fact as to whether the parties altered and extended the original eighteen-month contract term. Bernhard concedes that “the only oral agreements that would make any difference to the outcome of this case were if Bernhard were to have orally agreed to extend the term of the contract,” but argues Doble has failed to even allege the existence of an agreement to that effect. Rather, Bernhard argues Doble has himself conceded that the two never discussed extending the eighteen-month contract term, and asserts Doble has “not even allegefd] an express agreement by Bernhard to modify the contract, but submits allegations that amount to no more than vague and unsubstantiated inferences.”

¶26 As noted, Doble argues Bernhard orally agreed to effectively extend the contract term to permit Doble to “complete the Bernhard job” by removing all remaining harvestable timber. Thus, although Bernhard concludes otherwise, Doble has indeed alleged the existence of an oral agreement with Bernhard effectively extending the term of the contract. For the purposes of the pending appeal, we must determine whether Doble has supported this allegation “with substantial and material evidence raising a genuine issue of material fact.” Herron v. Columbus Hospital (1997), 284 Mont. 190, 943 P.2d 1272, 1274 (citing Clark v. Eagle Systems, Inc. (1996), 279 Mont. 279, 284, 927 P.2d 995, 998). In evaluating the offered evidence, we will draw all reasonable inferences in Doble’s favor. Herron, 943 P.2d at 1274 (citing Clark, 279 Mont. at 284, 927 P.2d at 998).

¶27 As reflected by the following deposition testimony, Doble has conceded that he and Bernhard never specifically discussed extending the eighteen-month contract term:

Q [Bernhard’s attorney]: Did your uncle ever specifically agree to extend the term of the contract beyond what’s set out in the contract?
A [Doble]: What do you mean “extend the term”?
Q: The contract provides that a term of 18 months, unless extended. Was there ever any discussion regarding an extension of a contract?
A: No.

¶28 Instead, Doble described the conversation during which he alleges he and Bernhard agreed to modify the contract so that it would remain in effect until all timber had been harvested from Bernhard’s property as follows:

Q [Bernhard’s attorney]: So the first time that you told them about the Big Sandy job would have been in Mr. Paskell’s office in June of 1989. Who was present at the time that you had this discussion?
A [Doble]: Like Mr. Bernhard said, there was Mr. Paskell, Mr. Bernhard and myself in his office. My wife was waiting out in the waiting room. But she remembers when we came out and we was finishing up conversation, like everybody does, she remembers Paskell said to me that my main priority was with Cecil and staying there and getting that debt paid off. You know, if I wanted to sign off the contract completely, I could, but otherwise just stick to it and don’t look right nor left. Just finish it.
Q: You knew that there was time limit to the contract that you had with Cecil, didn’t you?
A: Oh, yes. And I knew that I was way ahead of schedule.
Q: The contract was due to expire 18 months after December —
A: After it had been accepted by FSLIC.

¶29 Although Doble conceded that he and Bernhard never specifically discussed extending the eighteen-month contract term, Doble asserted Bernhard and his attorney nevertheless led him to believe they would effectively extend the contract until all the trees had been harvested from Bernhard’s property:

Q: [Bernhard’s attorney]: So as I understand what you’re saying, it was a statement made by Cecil or a statement made by Greg Paskell during the course of conversation that you had in Paskell’s office in June of 1989 to the effect that you were to stay on that — stay focused on Cecil’s project?
A [Doble]: Right.
Q: And because of that statement, you felt that they were promising —that Cecil was promising you the rest of the job until completion?
A: Cecil and Paskell.
Q: Okay. Anything other than that statement?
A: They led me to believe that they [were] perfectly happy the way things were going, the amount of volume of timber, everything, except they wanted more money. You know, up until then everything was rosy, and then there was — then it became a few minor things with the clipper and you have got to take more and more of this small timber and stay focused on your job right here.

¶30 Thus, although Doble concedes that neither he nor Bernhard specifically discussed extending the eighteen-month contract term, he nevertheless asserts Bernhard and his attorney led him to believe they wished him to work beyond the contract’s pending July 1,1989, termination date. For example, Doble alleges they asked him to forego the Big Sandy job and instead complete the Bernhard project, which Doble asserts he interpreted as an invitation to continue logging until all of the harvestable timber had been removed. Moreover, although Doble agrees they never specifically discussed extending the contract’s precise expiration date, he asserts Bernhard and his attorney led him to believe they were happy with the way things were going, and urged him to stay focused on the Bernhard project. Whether Bernhard and his attorney agreed to permit Doble to continue logging his property until all harvestable timber had been removed, thereby agreeing to effectively extend the contract term, is a question of material fact precluding summary judgment in Bernhard’s favor.

¶31 Doble additionally argues that the fact that Bernhard sent him a written notice, dated July 14,1989, terminating the contract means Bernhard himself believed the contract was still in effect at the time and, therefore, supports his assertion that he and Bernhard had in fact entered an enforceable oral agreement amending the logging contract. Doble also argues the termination notice’s reference to “other oral agreements” amounts to a concession by Bernhard that the written contract was in fact orally modified.

¶32 In response, Bernhard maintains he sent the written notice of contract termination simply to get Doble off of his property, and asserts the reference to “other oral agreements” was to conversations during which he and Doble had specifically identified the parcels of land Doble was to log.

¶33 Whether Bernhard sent Doble written notice terminating the contract because he believed the contract was still in effect pursuant to their alleged oral agreement, or whether he did so merely because he could think of no other way to get Doble off his land, is a question of fact. Moreover, whether the notice’s reference to “other oral agreements” was intended to refer to their alleged oral agreement to extend the term of the contract, or to conversations during which he and Doble had specifically identified the parcels of land Doble was to log, is an additional question of fact precluding summary judgment in Bernhard’s favor.

¶34 Based on the foregoing, we conclude there exists a question of fact as to whether Doble and Bernhard entered into an enforceable oral agreement altering the terms of the logging contract, and accordingly hold the District Court erred in granting Bernhard’s motion for summary judgment on this issue.

ISSUE 3

¶35 Did the District Court err in concluding that, as a matter of law, Bernhard had not breached the covenant of good faith and fair dealing?

¶36 In granting Bernhard’s motion for summary judgment, the District Court concluded that, “[o]nce the contract between the parties expired on July 1, 1989, there was no contractual relationship between the parties and therefore no breach by Bernhard of the covenant of good faith and fair dealing.” As the court noted, Doble alleged in his pretrial order that “[t]he termination by Defendants of [Doble’s] logging of the timber was a breach by the Defendants of the implied covenant of good faith and fair dealing which, in turn, constituted a breach by Defendants of the altered contract.” The court recognized that, although “a breach of the covenant of good faith and fair dealing does not necessarily require that there first be a breach of the contract, the covenant does require that there be a contract in existence in the first instance.”

¶37 Because the court concluded the logging contract had expired on July 1, 1989, it accordingly concluded there was no contract between the parties at the time Bernhard terminated Doble’s logging efforts on July 14,1989. The court thus held that “Doble’s cause of action for breach of the covenant of good faith and fair dealing must necessarily fail with the Court’s ruling that the term of the contract expired, and there was no oral contract to extend the written contract.”

¶3 8 In light of our conclusion that the District Court erred in determining Doble failed to establish a question of fact regarding the presence of an executed oral agreement extending the eighteen-month contract term, we conclude the court erred in granting summary judgment in Bernhard’s favor with respect to Doble’s claim for breach of the implied covenant of good faith and fair dealing.

¶39 Based on the foregoing, we reverse the District Court’s order granting summary judgment in Bernhard’s favor and remand to the District Court for further proceedings consistent with this opinion.

CHIEF JUSTICE TURNAGE, JUSTICES HUNT and GRAY concur.

JUSTICE LEAPHART,

specially concurring.

¶40 I concur in the Court’s reversing the summary judgment under issues number two and three since there exists a question of fact as to whether the parties entered into an enforceable oral agreement altering the terms of the logging contract. I disagree, however, with the Court’s holding on issue number one; that is, whether there was an ambiguity as to when the logging contract commenced.

¶41 Bernhard contended, and the Court agrees, that the contract provided that: “[t]he contract shall extend for a period of eighteen months ...” and that this language clearly meant that the term commenced upon signing. Doble, on the other hand, focused on the contract language that “considerable progress must be made on the contract by 60 days after approval by FSLIC as time is of the essence.” As Doble points out, the contract further provides “Contractor shall begin logging within thirty (30) days from the date of approval of FSLIC unless otherwise agreed to by the parties.” Based upon these two provisions which reference FSLIC approval, Doble asserts that there was an ambiguity as to whether the term commenced upon signing (December 1987) or upon FSLIC approval (summer of 1988).

¶42 Whether an ambiguity exists is a question of law for the court to decide. Carelli v. Hall (1996), 279 Mont. 202, 209, 926 P.2d 756, 761. The Court holds that the specified term of 18 months “clearly and unambiguously establishes that the contract took effect when signed by the parties on December 31, 1987, and was to extend for a period of eighteen months.” I disagree. I find it incongruous to hold, as does the Court, that the contract term commenced some 6 months before Doble received FSLIC approval to begin logging. When the contract required Doble to begin logging within 30 days of FSLIC approval, FSLIC approval was the event which would trigger commencement of the 18-month term.

¶43 In any event, despite my view that commencement of the term was clearly tied to FSLIC approval, the most that can be said of the contract is that it is reasonably subject to two different interpretations. That being the case, an ambiguity exists, see Wray v. State Comp. Ins. Fund (1994), 266 Mont. 219, 223, 879 P.2d 725, 727, and the court erred in entering summary judgment. Accordingly, I would reverse on the first as well and the second and third issues.

JUSTICE TRIEWEILER

concurring in part and dissenting in part.

¶44 I concur with the majority’s decision to reverse the judgment of the District Court; however, I disagree with majority’s reasons for doing so. Specifically, I concur with the opinion of Justice Leaphart that the contract is at least ambiguous with regard to the date on which the contract commenced. However, I disagree with the majority’s disposition of Issue 2. Doble concedes there was no agreement to extend the term of the contract, and nothing allegedly said by the defendant or his attorney effectively modified the contract so as to extend its date of expiration.

JUSTICE NELSON joins in the foregoing dissenting opinion.


source: Caselaw Access Project

author: CHIEF JUSTICE TURNAGE

license: Public Domain

text:
    COLLEEN CONNERY, Petitioner and Respondent, v. LIBERTY NORTHWEST INSURANCE, CORP., Respondent, Appellant and Insurer for WINTER SPORTS, INC., Employer.
    No. 97-630.
    Submitted on Briefs March 26, 1998.
    Decided May 26, 1998.
    1998 MT 125.
    55 St.Rep. 496.
    960 P.2d 288.
    289 Mont. 94.

      See C.J.S. Workmen’s Compensation 8 19.
    For Appellant: Larry W. Jones, Missoula.
    For Respondents: David W. Lauridsen, Columbia Falls.
   CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

¶ 1 In this action, the Workers’ Compensation Court declared unconstitutional the benefit reduction provision of § 39-71-416(1), MCA. The employer’s insurer, Liberty Northwest Insurance Corporation (Liberty), appeals. We affirm.

¶2 The issue is whether the Workers’ Compensation Court erred in ruling that § 39-71-416(1), MCA, violates a worker’s right to full legal redress under Article II, Section 16 of the Montana Constitution.

¶3 Colleen Connery was injured on December 10, 1995, when a co-employee, Mark Roy, collided with her on the Big Mountain Ski Hill. The injury occurred within the course and scope of Connery’s employment. Connery v. Liberty Northwest Ins. Corp. (1996), 280 Mont. 115, 929 P.2d 222.

¶4 In addition to filing for workers’ compensation benefits, Connery filed a claim against Roy’s homeowner’s insurance carrier. The elements of the claim against Roy’s insurer were past medical expenses of $3,451.27; future medical expenses of $500; past wage loss of $2,280; pain and suffering of $25,255; and loss of enjoyment of an established course of life of $25,255. In February 1997, Connery settled her claim with Roy’s insurer for $27,500.

¶5 Liberty has paid Connery wage loss benefits of $1,352.34 and medical benefits of $2,570.95 and $376.57. The parties agree that Connery has a 7 percent impairment rating as a result of her injury, entitling her to permanent partial disability benefits of $1,354.12. However, Liberty has refused to pay Connery’s impairment rating on the basis that an offset under the 30 percent reduction of benefits pursuant to § 39-71-416(1), MCA, relieves it of that liability.

¶6 Section 39-71-416(1), MCA, provides:

If an employee is injured or dies and obtains a third-party recovery, settlement, or award, an insurer may reduce by 30% the benefits paid or that are required to be paid to the employee or beneficiary pursuant to chapter 71 or 72 as a result of the injury or death. The reduction applies to any recovery, settlement, or award regardless of the form of action or the nature of damages. The total of any reductions may not exceed 30% of any third-party recovery, settlement, or award.

Liberty asserts that Connery in fact owes it $340.08 if the full 30 percent reduction is taken.

¶7 The Workers’ Compensation Court reviewed this case on an agreed statement of facts. The court ruled that on its face, § 39-71-416(1), MCA, ignores a worker’s right to full legal redress as guaranteed under Article II, Section 16, Mont. Const. It declared § 39-71-416(1), MCA, unconstitutional and void, and concluded that Liberty was liable to Connery for the full amount of benefits otherwise due her under the Workers’ Compensation Act without reduction on account of § 39-71-416(1), MCA.

DISCUSSION

¶8 Did the Workers’ Compensation Court err in ruling that § 39-71-416(1), MCA, violates a worker’s right to full legal redress under Article II, Section 16 of the Montana Constitution?

¶9 Our standard of review of a trial court’s conclusions of law is simply whether the lower court’s interpretation of the law is correct. Francetich v. St. Comp. Mut. Ins. Fund (1992), 252 Mont. 215, 218, 827 P.2d 1279, 1281. When the constitutionality of a statute is challenged, we begin with the presumption that the statute is constitutional, and the party attacking it has the burden of proving it unconstitutional. Francetich, 252 Mont. at 218-19, 827 P.2d at 1282.

¶10 Liberty points out that this Court has previously endorsed the legislature’s elimination of certain types of work-related injuries from coverage under the Workers’ Compensation Act. In Stratemeyer v. Lincoln County (1993), 259 Mont. 147, 855 P.2d 506, the Court affirmed the exclusion of mental-mental and mental-physical claims from workers’ compensation coverage. In Watson v. Seekins (1988), 234 Mont. 309, 763 P.2d 328, we upheld a statute requiring an insurer to reduce its payment of total disability benefits to partially offset social security benefits, which result, as the concurring opinion pointed out, was dictated by federal law limiting total social security and workers’ compensation benefits. And, in Murer v. State Compensation Mut. Ins. (1994), 267 Mont. 516, 885 P.2d 428, the Court upheld a temporary cap on maximum permanent and temporary total disability benefit amounts. Liberty maintains that like the laws approved in those cases, the 30 percent statutory reduction results in an insurer’s decreased liability for the payment of benefits without invading a claimant’s third-party recovery.

¶11 Unlike the provisions upheld in the cases cited by Liberty, the statute here at issue does not create a new class of benefits or eliminate any benefits, nor is it dictated by federal law. Instead, the statute gives the insurer a separate right to reduce benefits whenever an injured worker has obtained a third-party settlement or award. Article II, Section 16, Mont. Const., provides:

Courts of justice shall be open to every person, and speedy remedy afforded for every injury of person, property, or character. No person shall be deprived of this full legal redress for injury incurred in employment for which another person may be liable except as to fellow employees and his immediate employer who hired him if such immediate employer provides coverage under the Workmen’s Compensation Laws of this state. Right and justice shall be administered without sale, denial, or delay.

In none of the cases cited by Liberty did the benefit entitlement reduction provision at issue conflict with this full legal redress provision of Montana’s Constitution.

¶12 Liberty wisely does not claim a subrogation interest in Connery’s third-party settlement. An insurer may subrogate only if a client has been “made whole” by a third-party recovery. In 1987, the legislature attempted to statutorily abolish the “made whole” rule by expressly providing insurers with the right to recover the full amount of their subrogation interests regardless of whether a claimant had been made whole for his entire loss. Section 39-71-414(6)(a), MCA (1987). The statute was challenged as violative of Article II, Section 16, Mont. Const., and this Court struck it down. In doing so, we stated:

Section 39-71-414(6)(a), MCA, restricts an injured worker’s right to obtain a full legal redress against third-party tortfeasors. The second sentence of Article II, Section 16, states this cannot be done. The record of the debate at the Convention is clear that this was the delegates’ intent in amending the provision. The second sentence is mandatory, prohibitive, and self-executing and it prohibits depriving an employee of his full legal redress, recoverable under general tort law, against third parties.

Francetich, 252 Mont. at 224, 827 P.2d at 1285.

¶13 In the present case, as the Workers’ Compensation Court correctly reasoned, § 39-71-416( 1), MCA, facially ignores the worker’s right to full legal redress. If an injured worker gets anything, however short of full legal redress, the insurer is entitled to reduce by 30 percent the benefits otherwise payable to the injured worker. The net effect of the statute is to transfer dollars recovered from the third-party tortfeasor back to the insurer. That transfer is plainly contrary to the full legal redress provision.

¶14 Liberty argues that the 30 percent reduction does not affect Connery’s third-party recovery and that the statute merely deals with a claimant’s entitlement to benefits. This argument is without merit. But for her third-party recovery, Connery would be entitled to full workers’ compensation benefits without reduction. It is the third-party recovery which triggers the insurer’s right to reduce her benefits. As the Workers’ Compensation Court pointed out, the effect of the statute is more lethal than any subrogation provision because the reduction is automatic and arbitrary.

¶ 15 We conclude that the Workers’ Compensation Court did not err in holding unconstitutional § 39-71-416( 1), MCA. We therefore affirm the court’s decision.

JUSTICES HUNT, TRIEWEILER, REGNIER and LEAPHART concur.


author: JUSTICE REGNIER

text:
    IN RE PETITION OF SUTEY OIL COMPANY, INC., Petitioner and Appellant, v. ANACONDA-DEER LODGE COUNTY PLANNING BOARD and THE ANACONDA-DEER LODGE COUNTY BOARD OF ADJUSTMENT, Respondents and Respondents.
    No. 97-475.
    Submitted on Briefs March 26, 1998.
    Decided May 28, 1998.
    1998 MT 127.
    55 St.Rep. 499.
    959 P.2d 496.
    289 Mont. 99.

      See C.J.S. Intoxicating Liquors § 95.
    For Appellant: Leonard J. Haxby; Haxby & Somers; Butte.

      For Respondents: Michael B. Grayson; Anaconda-Deer Lodge County Attorney; Anaconda.
   JUSTICE REGNIER

delivered the opinion of the Court.

¶1 In June 1995, Sutey Oil Company, Inc., filed a petition for a writ of certiorari in the District Court for the Third Judicial District in Anaconda-Deer Lodge County, asking that the court review the Anaconda-Deer Lodge County Planning Board’s and the Anaconda Deer Lodge County Board of Adjustment’s denial of Sutey Oil’s application for a special use permit. The District Court issued a writ of certiorari, and on July 3,1997, issued an opinion and order affirming the denial of Sutey Oil’s special use permit. It is from the court’s July 3,1997, order that Sutey Oil presently appeals. For the reasons stated below, we affirm.

¶2 The sole dispositive issue on appeal is whether the District Court abused its discretion in concluding that the Board of Adjustment did not abuse its discretion in denying Sutey Oil’s application for a special use permit.

FACTUAL AND PROCEDURAL BACKGROUND

¶3 Sutey Oil owns a business establishment known as the Thriftway Super Stop #7, located in Anaconda, Montana. In early 1994, David Sutey, the president of Sutey Oil, became interested in expanding his business by adding a room with four or five gambling machines. Sutey contacted the Anaconda-Deer Lodge County Planning Department, and spoke with permit official Scott H. Hurley about the possibility of adding gambling machines to his establishment. The record indicates that the two did not, however, discuss the possibility that Sutey might seek a beer and wine license.

¶4 On April 5,1994, Hurley wrote to Sutey and advised him “that Thriftway Super Stops would not be required to file for and obtain a special use permit for the establishment of gambling machines” because the “establishment is deemed as an expansion of an existing retail and service use.” Although Hurley did not specifically address the possibility that Sutey might be required to obtain a special use permit were he to seek a beer and wine license, Hurley did note that Thriftway would have to adhere to “all county and state requirements ... before the commencement of any type of construction.”

¶5 Sutey obtained a building permit and began remodeling his facility. On January 9,1995, Sutey submitted an application to the State Liquor Division for a retail on-premises consumption beer and wine license. In March 1995, the State Liquor Division notified Anaconda-Deer Lodge County of Sutey’s application to provide the county with “the opportunity to evaluate whether the applicant has met all laws and ordinances your office is responsible for regulating.” It was upon receipt of this notice that the Anaconda-Deer Lodge County Planning Department first learned that the expansion proposed by Sutey would not only include gambling machines, but would also involve the issuance of a retail on-premises consumption beer and wine license.

¶6 On March 20, 1995, James Manning, the Planning Director of Anaconda-Deer Lodge County, advised the State Liquor Division that the county “would strongly protest the issuance of a on-premise license for Thriftway Super Stop of Anaconda #7.” Manning explained that “an on-premise consumption license for this location would constitute a change in use for the premises,” and that “to be in compliance with Zoning regulations, a Special Use Permit would need to be approved by the Planning Board.” Sutey received a copy of Manning’s letter, and filed an application for a special use permit with Anaconda-Deer Lodge County on March 30,1995.

¶7 On April 20,1995, the Anaconda-Deer Lodge County Planning Board held a public hearing to address Sutey Oil’s application for a special use permit. Following public comment, the Planning Board denied Sutey Oil’s application. On April 21, 1995, Manning wrote a letter to Sutey Oil, explaining that the Planning Board had denied its application for a special use permit, and advising it of its right to appeal to the Anaconda-Deer Lodge County Board of Adjustment. Sutey Oil pursued an appeal, and on May 17,1995, the Board of Adjustment held a public hearing during which it voted to uphold the Planning Board’s decision.

¶8 On June 7,1995, Sutey Oil filed a petition for a writ of certiorari in District Court, asking that the court review the Planning Board’s and the Board of Adjustment’s denial of its application for a special use permit. The District Court issued a writ of certiorari on October 11, 1995. On November 25, 1996, following review of the record and oral argument, the court issued an opinion rejecting Sutey Oil’s equitable estoppel argument, but remanding the case “to the Planning Board for determination of the basis for denial of Petitioner’s Special Use Permit.”

¶9 The Planning Board met on December 2,1996, and explained its “reason for denying the Special Use Permit for Sutey Oil, Thriftway West, to acquire an on-premise beer/wine license, is that it would be incompatible to neighboring land which is designated single family residential land use.” On July 3,1997, the District Court issued a second opinion and order in which it affirmed the Planning Board’s denial of Sutey Oil’s application for a special use permit.

STANDARD OF REVIEW

¶10 Pursuant to § 27-25-102(2), MCA, the district court may grant a writ of certiorari, or writ of review

when a lower tribunal, board, or officer exercising judicial functions has exceeded the jurisdiction of the tribunal, board, or officer and there is no appeal or, in the judgment of the court, any plain, speedy, and adequate remedy.

¶11 Ordinarily, the district court’s scope of review upon a writ of certiorari “cannot be extended further than to determine whether the inferior tribunal, board, or officer has regularly pursued the authority of such tribunal, board, or officer.” Section 27-25-303, MCA. In a case involving an appeal from a decision by the Board of Adjustment, however, § 76-2-327, MCA, provides the district court with a broader scope of review than that generally available upon a writ of certiorari. For example, § 76-2-327, MCA, provides, in pertinent part, as follows:

(1) Any person or persons, jointly or severally, aggrieved by any decision of the board of adjustment or any taxpayer or any officer, department, board, or bureau of the municipality may present to a court of record a petition, duly verified, setting forth that such decision is illegal, in whole or in part, specifying the grounds of the illegality. ...
(2) Upon the presentation of such petition, the court may allow a writ of certiorari directed to the board of adjustment to review such decision of the board of adjustment....
(3) If, upon the hearing, it shall appear to the court that testimony is necessary for the proper disposition of the matter, it may take evidence or appoint a referee to take such evidence as it may direct and report the same to the court with his findings of fact and conclusions of law, which shall constitute a part of the proceedings upon which the determination of the court shall be made.
(4) The court may reverse or affirm, wholly or partly, or may modify the decision brought up for review.

¶12 Although § 76-2-327, MCA, contemplates relief by certiorari, it simultaneously authorizes the reviewing court to hold a hearing and reverse, affirm, or modify a decision made by the Board of Adjustment. In so doing, § 76-2-327, MCA, clearly provides the district court with a broader scope of review than that generally available upon a writ of certiorari. See Bryant Development Ass’n v. Dagel (1975), 166 Mont. 252, 257, 531 P.2d 1320, 1323 (interpreting identical language in § 16-1706, RCM (1947)). Thus, the District Court in this case was bound to review the Board of Adjustment’s decision for an abuse of discretion.

¶13 Having identified the standard by which the District Court is bound to review the Board of Adjustment’s decision, we must now determine the standard by which we are bound to review the District Court’s decision. In so doing, we turn first to the terms of § 76-2-327, MCA, which specifically empower the district court to “take evidence” if “necessary for the proper disposition of the matter.” In Lambros v. Board of Adjustment of Missoula (1969), 153 Mont. 20, 26, 452 P.2d 398, 401, we held that “upon review of a determination by a district court where it is hearing a petition for variance and takes additional testimony the question for this Court to determine is whether the court committed an abuse of discretion.” Indeed, in cases where the district court exercises its statutory option to take additional evidence, we have consistently reviewed the district court’s decision for an abuse of discretion and to determine whether that decision is supported by substantial evidence. See, e.g., Whistler v. Burlington Northern R.R. Co. (1987), 228 Mont. 150, 155, 741 P.2d 422, 425 (noting that district court “received evidence indicating that the decision itself was reasonable,” and holding the district court’s conclusion was “supported by substantial, credible evidence”); Cutone v. Anaconda Deer Lodge (1980), 187 Mont. 515, 518, 610 P.2d 691, 693 (where district court “allowed the appellant a full hearing and testimony was introduced by both parties,” we reviewed the court’s decision for an abuse of discretion).

¶14 In the present case, review of the record indicates that the District Court did not take any additional witness testimony during the oral argument held on September 18,1996. Although the court did not take any additional evidence during the parties’ oral argument, the parties did supplement the record with affidavits from David Sutey and Brian Bossard. Because the District Court exercised its statutory option and took additional evidence before making its decision, we review the District Court’s decision for an abuse of discretion.

DISCUSSION

¶15 Did the District Court abuse its discretion in concluding the Board of Adjustment did not abuse its discretion in denying Sutey Oil’s application for a special use permit?

¶16 On appeal, Sutey Oil argues the District Court erred in upholding the Board of Adjustment’s decision on several grounds. Sutey Oil first argues that, pursuant to Chapter XII of the Anaconda-Deer Lodge County Development Permit System, its proposed gaming facility was a permitted use, and it was thus not required to obtain a special use permit. Even assuming it were required to secure a special use permit, however, Sutey Oil argues the District Court erred in affirming the Board of Adjustment’s decision in the absence of any evidence that the proposed expansion would materially or adversely impact any of the zoning regulation criteria set forth in § 76-2-304, MCA, and recognized by this Court in Lowe v. City of Missoula (1974), 165 Mont. 38, 41, 525 P.2d 551, 552-53. Finally, Sutey Oil argues Anaconda-Deer Lodge County was equitably estopped from denying Sutey Oil’s application in light of permit official Hurley’s initial opinion that Sutey Oil “would not be required to file for and obtain a special use permit for the establishment of gambling machines.” Based on the foregoing, Sutey Oil argues the District Court erred in affirming the Board of Adjustment’s denial of its application for a special use permit.

A. Necessity of special use permit

¶17 As noted, Sutey Oil first argues the provisions of the Anaconda-Deer Lodge County Development Permit System did not require that it obtain a special use permit in this case. Sutey Oil points specifically to Chapter XII of the County’s Development Permit System which governs development in the Highway Commercial Development District in which Sutey Oil’s Thriftway Super Store is located. Sutey Oil argues that the expansion it proposed constituted a permitted use pursuant to the provisions of Chapter XII, and asserts it was thus not required to obtain a special use permit. Because it did not need a special use permit, Sutey Oil argues, that the Planning Board subsequently denied its application “should have no legal effect upon Mr. Sutey’s right to operate a gaming room and acquire an on-premise beer and wine license at his present commercial location.”

¶18 In response, respondents note that Sutey Oil did not appeal the Development Permit System administrator’s decision to require a special use permit in this case, but instead “agreed to follow the process and submitted an application for a special use permit.” Respondents assert that, because Sutey Oil did not appeal from the Development Permit System administrator’s decision requiring that it obtain a special use permit, Sutey Oil failed to exhaust its administrative remedies on this issue.

¶19 Neither the District Court’s initial order remanding this case to the Planning Board, nor its final decision affirming the Board of Adjustment’s decision contain a discussion regarding the propriety of the Development Permit System administrator’s decision requiring that Sutey Oil obtain a special use permit to proceed with its proposed expansion. Moreover, nowhere does Sutey Oil dispute the respondents’ assertion that it failed to exhaust its administrative remedies and is thus precluded from objecting on appeal to the requirement that it secure a special use permit. In light of the foregoing, we decline to address Sutey Oil’s argument that it should not have been required to secure a special use permit under the circumstances of this case.

B. Review of Planning Board and Board of Adjustment decisions

¶20 Sutey Oil next argues the District Court erred in affirming the Board of Adjustment’s decision denying its application for a special use permit because there existed no evidence that the proposed expansion would materially or adversely impact any of the statutory zoning regulation criteria set forth in § 76-2-304, MCA, and recognized by this Court in Lowe, 165 Mont. at 41, 515 P.2d at 552-53.

¶21 Sutey Oil argues it was incumbent upon the Planning Board, in making its decision regarding Sutey Oil’s application for a special use permit, to consider and comply with the following statutory provisions:

76-2-304. Purposes of zoning. (1) Such regulations shall be made in accordance with a comprehensive plan and designed to lessen congestion in the streets; to secure safety from fire, panic, and other dangers; to promote health and the general welfare; to provide adequate light and air; to prevent the overcrowding of land; to avoid undue concentration of population; to facilitate the adequate provision of transportation, water, sewerage, schools, parks, and other public requirements.
(2) Such regulation shall be made with reasonable consideration, among other things, to the character of the district and its peculiar suitability for particular uses and with a view to conserving the value of buildings and encouraging the most appropriate use of land throughout such municipality.

¶22 Relying on our decision in Lowe, Sutey Oil argues the Planning Board was compelled to consider and comply with the criteria set forth in § 76-2-304, MCA, in making its decision regarding Sutey Oil’s application for a special use permit. In Lowe, we concluded the district court had abused its discretion in upholding a decision by the Missoula City Council to adopt a rezoning ordinance. Lowe, 165 Mont. at 41, 525 P.2d at 553. In so concluding, we considered the twelve criteria set forth in § 76-2-304, MCA, and held the factual information upon which the Missoula City Council had relied in adopting the rezoning ordinance at issue was so lacking, that its action, as well as that of the district court, constituted an abuse of discretion. Lowe, 165 Mont. at 41, 525 P.2d at 553.

¶23 In the present case, Sutey Oil argues the Planning Board’s decision to deny Sutey Oil’s application for a special use permit on the grounds that the proposed use “would be incompatible to neighboring land which is designated single family residential land use,” does not take into account the statutory criteria set forth in § 76-2-304, MCA. Sutey Oil asserts “[t]here has been absolutely no evidence that the operation of on-premises gambling of the type that was to be used in this convenience store would materially or adversely impact any of those mandatory criteria outlined in § 76-2-304, MCA.” In light of the foregoing, Sutey Oil suggests, the Planning Board abused its discretion in denying Sutey Oil’s application for a special use permit and the District Court erred in affirming the Board’s decision.

¶24 Upon remand, the Planning Board explained that it was denying Sutey Oil’s application because the proposed expansion “would be incompatible to neighboring land which is designated single family residential land use.” Moreover, the Planning Board noted that “[t]he Public Hearing, held on April 20,1995, clearly indicated that the adjoining neighborhood did believe that the beer/wine license would have a detrimental impact on the neighborhood designated for single family residential.”

¶25 As discussed above, we review the District Court’s order upholding the Board of Adjustment’s decision for an abuse of discretion. Lambros, 153 Mont. at 26, 452 P.2d at 401. In its order affirming the Board of Adjustment’s decision, the District Court rejected Sutey Oil’s argument that it was necessary for the Planning Board to specifically evaluate each of the twelve criteria set forth in § 76-2-304, MCA, before making a decision with respect to Sutey Oil’s application. Instead, the court noted that the Planning Board had acted in accordance with the terms of its authority pursuant to the Anaconda-Deer Lodge County Development Permit System, which provides in pertinent part that:

The purpose of the special use permit procedure is to implement the plan by requiring intensive public review of any development that may have a significant impact on the landscape setting, neighboring land uses, or public facilities and services, and requiring that such developments comply with performance standards designed to assure their compatibility with the landscape setting, neighboring land uses, and the capacity of public facilities and services.

¶26 By its terms, the County’s Development Permit System required that the Planning Board ensure that proposed developments “comply with performance standards designed to assure their compatibility with... neighboring land uses.” In denying Sutey Oil’s application on the grounds of incompatibility with neighboring land use, the Planning Board was thus acting within its authority pursuant to the express terms of the County’s Development Permit System.

¶27 In its order upholding the Board of Adjustment’s decision, the District Court improperly identified its scope of review as that traditionally available upon a writ of certiorari, and thus primarily discussed the question of whether the Planning Board had acted legally and within its jurisdiction in denying Sutey Oil’s application for a special use permit. Although the court set forth the incorrect standard of review, it nevertheless concluded that the Planning Board “had sufficient information upon which to base its denial of Petitioner’s Special Use Permit.” That the court so concluded indicates it additionally reviewed the Planning Board’s decision for an abuse of discretion.

¶28 Although the District Court did not discuss the basis for its determination that the Planning Board had sufficient information upon which to base its decision, review of the record indicates the court did not abuse its discretion in so concluding. More specifically, the minutes from the Planning Board’s April 20,1995, public meeting chronicle testimony from a number of citizens concerned about the impact of the proposed expansion. For example, citizens voiced concerns regarding property values, increased traffic, parking problems, and raising their children in the vicinity of an establishment licensed to serve alcoholic beverages. Having reviewed the record, we conclude the District Court did not err in holding the Planning Board had sufficient evidence before it upon which it could base its decision denying Sutey Oil’s application for a special use permit. Accordingly, we hold the District Court did not abuse its discretion in upholding the Board of Adjustment’s decision.

C. Equitable estoppel

¶29 Sutey Oil points to the District Court’s November 25,1996, order and argues the court erred in concluding Anaconda-Deer Lodge County was not equitably estopped from denying Sutey Oil’s request for gaming machines in light of permit official Hurley’s initial opinion that Sutey Oil “would not be required to file for and obtain a special use permit for the establishment of gambling machines.”

¶30 Respondents, in contrast, argue that the District Court’s review upon a writ of certiorari “cannot be extended further than to determine whether the inferior tribunal, board, or officer has regularly pursued the authority of such tribunal, board, or officer.” Section 27-25-303, MCA. Respondents thus assert that “equitable estoppel is not an available remedy” in light of the limited scope of review available pursuant to a writ of certiorari.

¶31 Having already recognized that the scope of review available upon an appeal from a decision by the Board of Adjustment is broader than that generally available upon a writ of certiorari, we will turn to the merits of Sutey Oil’s argument.

¶32 In its November 25,1996, order, the District Court held that, were it “to consider equitable estoppel, it would find in favor of Respondent.” More specifically, the court determined that Sutey Oil had failed to demonstrate “conduct, acts, language, or silence amounting to a representation or a concealment of material facts,” and had thus failed to demonstrate the first element of equitable estoppel.

¶33 In Dagel v. City of Great Falls (1991), 250 Mont. 224, 234, 819 P.2d 186, 192, we indeed recognized that one of the six essential elements of equitable estoppel is that “there must be conduct, acts, language, or silence amounting to a representation or a concealment of material facts.” In the present case, although Hurley initially advised Sutey Oil that it “would not be required to file for and obtain a special use permit for the establishment of gambling machines,” he also instructed Sutey Oil to adhere to “all county and state requirements ... before the commencement of any type of construction.” Moreover, as the District Court noted, “there is nothing in the record about beer or wine on-premises consumption until March of 1995.” Based on the foregoing, we hold, as did the District Court, that “[t]he record does not reveal any conduct, act, language, or silence on the part of Anaconda-Deer Lodge County which would lend itself to estoppel.”

¶34 Affirmed.

JUSTICES GRAY, HUNT, TRIEWEILER and LEAPHART concur.


text:
    IN THE MATTER OF THE CUSTODY AND THE PARENTAL RIGHTS OF J.H., R.H., D.H., and R.H., Youths in Need of Care.
    No. 97-650.
    Submitted on Briefs April 9, 1998.
    Decided May 28, 1998.
    1998 MT 128.
    55 St.Rep. 504.
    958 P.2d 1191.
    289 Mont. 111.

      See C.J.S. Adoption of Persons §10 .
    For Appellant: Jeremy Gersovitz, Assistant Public Defender, Helena.
    For Respondents: Honorable Joseph P. Mazurek, Attorney General; Mark Mattioli, Assistant Attorney General, Helena; Mike McGrath, County Attorney; Carolyn Clemens, Deputy County Attorney, Helena; Randi Hood, Helena (Guardian Ad Litem).
   CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

¶ 1 In proceedings before the First Judicial District Court, Lewis and Clark County, Michelle Hamlin’s custodial rights as the mother of J.H., R.H., D.H., and R.H. were awarded to the Montana Department of Public Health and Human Services. Hamlin appeals. We affirm.

¶2 The issue is whether the District Court abused its discretion when it awarded Hamlin’s custodial rights to the Department.

¶3 J.H., R.H., D.H., and R.H. were declared youths in need of care in November 1995. At that time, the children were living with their maternal aunt and uncle because their father was in jail for domestic abuse and their mother, Hamlin, was having trouble seeing to their needs, such as getting them to school. Hamlin and the children’s father were divorced. The aunt and uncle’s home became the children’s foster care placement. At the time of the June and July 1997 hearing on the Department’s petition to terminate Hamlin’s parental rights, J.H., R.H., D.H., and R.H. ranged in age from three to eleven years old and had been living with their aunt and uncle for two years.

¶4 When the children were declared youths in need of care, Hamlin and the Department entered into a treatment plan agreement which, by its terms, could be completed within six months. The plan required Hamlin to: submit to therapy for co-dependency, self-esteem, and other issues relating to her failure to adequately care for the children; successfully complete an anger management program to address domestic violence issues; successfully complete parenting classes; attend a survivor group to deal with victimization; demonstrate her ability to parent through employment, stable housing, and attending to her emotional needs; schedule and maintain visits with the children without entertaining others during those visits; continue to work in the Healthy Start program; and obtain a chemical dependency evaluation and follow the recommendations of that evaluation.

¶5 The Department presented evidence that Hamlin initially had been consistent about visiting her children under her treatment plan, but when she was reminded that she was not to bring others with her to visit her children, she began missing visits. In January 1996, she told her sister with whom the children were living that she was leaving town permanently, but told her sister not to tell the children. Hamlin then moved to Wyoming with her boyfriend.

¶6 After Hamlin moved to Wyoming, her Helena, Montana, caseworker arranged for an interstate compact to allow her to complete her treatment plan in Wyoming. However, Hamlin did not keep her Wyoming caseworker informed of her changing whereabouts. The Wyoming caseworker notified the Montana caseworker in September 1996 that he wanted to close the case because he was unable to locate Hamlin.

¶7 The Department presented testimony that although Hamlin’s chemical dependency evaluation resulted in a recommendation that she obtain inpatient chemical dependency treatment, she did not show up for such treatment when it was arranged for her. In Wyoming, she attended one mental health counseling session and had not started parenting classes. She did not complete other counseling as required under her treatment plan. She had not maintained stable housing or employment. She claimed that she underwent a second chemical dependency evaluation which concluded that she was not chemically dependent, but she did not have the written results because she was unable to pay for the evaluation.

¶8 After she moved to Wyoming, Hamlin initially maintained telephone contact with the children but that ceased in October 1996. Although she sent the children Christmas presents and birthday presents from Wyoming, the birthday presents all arrived late. Hamlin visited her children on three days in May 1996 when she had a court appearance in this matter. There were no other visits between Hamlin and the four children between January 1996 and the June and July 1997 hearing.

¶9 The three oldest children were all receiving mental health counseling. All three suffered from psychological problems which the counselor identified as resulting from living in their parents’ violent and chaotic household and then being confused about why they no longer lived with their parents. Their counselor testified that they did not view living with their mother as a possibility for them in the future. Hamlin’s oldest son suffered from a chronic, low-grade depression. The second-oldest child, R.H., suffered from an anxiety disorder. D.H. had some depression and repression of emotions and had “acted out” by starting fires. The youngest child, R.H., was less than one year old when he moved in with his aunt and uncle and did not remember Hamlin.

¶10 All the professionals agreed that the children desperately need permanency — to know where they will be living for the long term. By all accounts, the children have improved in school attendance and performance and emotionally while living with their aunt and uncle’s family. The aunt testified that the children love their mother and miss her, but that they do not want to move to Wyoming. She further testified that she and her husband were willing to commit to long-term foster care of all four children.

¶ 11 The court determined that Hamlin had failed to comply with the provisions of her treatment plan and that she had abandoned the children by failing to have any contact with them between May of 1996 and the hearing. The court further determined that the children needed to be placed permanently, and that this needed to happen immediately: “The children cannot wait any longer to see if their mother might someday become an adequate parent to them.” The court determined that it was in the best interests of the children to remain in the home of their aunt and uncle, and awarded their care and custody to the Department until they are eighteen years of age, with the recommendation that they be placed with the aunt and uncle. The court further ordered that Hamlin shall have contact with the children only if the Department determines contact to be in the children’s best interests, and that any visits shall be therapeutically supervised unless the children’s therapist determines that supervision is not necessary.

¶12 In a companion case, the District Court placed the custodial rights of the children’s father with the Department. The father did not appeal, but Hamlin does.

DISCUSSION

¶13 Did the District Court abuse its discretion when it awarded Hamlin’s custodial rights to the Department?

¶ 14 Although Hamlin, in her brief, characterizes the District Court’s decision as one terminating her parental rights to her children, the court did not terminate her parental rights. The court concluded in part as follows:

The State has presented a compelling case to terminate [Hamlin’s] parental rights to the children and to place the children with the Department with the right to consent to the adoption of the children. Under the unique circumstances of this case, however, the Court concludes that it would not be appropriate to do so, at least at this time.

Instead, the court declared J.H., R.H., D.H., and R.H. youths in need of care and awarded Hamlin’s custodial rights to the children to the Department until each child reaches the age of eighteen.

¶15 This Court reviews findings of fact to determine whether the findings are clearly erroneous, and we review conclusions of law to determine whether they are correct. The transfer of a child’s custody from his or her parents to the Department is dependent upon an initial determination that the child is abused or neglected and is then a discretionary determination which this Court reviews for abuse of discretion. Matter of C.M. (1997), 281 Mont. 183, 186, 932 P.2d 1063, 1065.

¶16 Section 41-3-404, MCA (1995), provides for adjudicatory hearings to declare a child a youth in need of care. Then § 41-3-406(1), MCA (1995), goes on to provide:

If a youth is found to be a youth in need of care under 41-3-404, the court may enter its judgment, making any of the following dispositions to protect the welfare of the youth:
(a) permit the youth to remain with the youth’s parents or guardian, subject to those conditions and limitations the court may prescribe;
(b) grant an order of limited emancipation to a youth who is 16 years of age or older as provided in 41-3-408;
(c) transfer legal custody to any of the following:
(i) the department;
(ii) a child-placing agency that is willing and able to assume responsibility for the education, care, and maintenance of the youth and that is licensed or otherwise authorized by law to receive and provide care of the youth; or
(iii) a relative or other individual who, after study by the department or a licensed child-placing agency designated by the court, is found by the court to be qualified to receive and care for the youth;
(d) order any party to the action to do what is necessary to give effect to the final disposition, including undertaking medical and psychological evaluations, treatment, and counseling that does not require an expenditure of money by the department unless the department is notified and a court hearing is set in a timely manner on the proposed expenditure. The department is the payor of last resort after all family, insurance, and other resources have been examined.
(e) order further care and treatment as the court considers in the best interest of the youth that does not require an expenditure of money by the department unless the department is notified and a court hearing is set in a timely manner on the proposed expenditure. The department is the payor of last resort after all family, insurance, and other resources have been examined. [Emphasis added.]

Under this statute, a stipulation that a child is a youth in need of care empowers a district court, in its discretion, to transfer legal custody of the child from the parent(s) to the Department. See Matter of C.M., 281 Mont. at 187, 932 P.2d at 1066.

¶17 In this case, as the Department points out, Hamlin stipulated that her children were youths in need of care. Under Matter of C.M., it was then within the discretion of the District Court to determine whether the welfare of the children would be protected by transferring their legal custody to the Department.

¶18 Hamlin disputes the court’s conclusion that she “totally” failed to comply with provisions of the treatment plan and that it was highly unlikely that she could or would remedy her problems within a reasonable amount of time. She submitted records of counseling she independently obtained in Wyoming. However, those records indicate that the counseling Hamlin sought in Wyoming related almost exclusively to issues between her and her boyfriend. The record also contains a letter from Hamlin’s Wyoming caseworker stating that Hamlin had stopped attending parenting classes in September 1996. Two letters from agencies in Wyoming state that Hamlin did not complete anger management classes and that she attended a battered women’s support group only one or two times.

¶19 Hamlin also disputes the court’s conclusion that she abandoned her children by failing to have any contact with them from May 1996 to June 1997. This apparently relates to her allegation that her rights should not be terminated because any evidence to that effect relates to domestic abuse she suffered at the hands of her former husband, the children’s father. However, she does not elaborate upon that claim, and the evidence does not support the statement that her problems parenting her children were due solely to abuse she suffered at the hands of their father.

¶20 The only contact Hamlin initiated with her children from Wyoming — phone calls— terminated when her sister stopped accepting collect calls from her after she called irregularly and insisted on having her boyfriend participate in the calls. The Montana caseworker testified that he wrote to Hamlin in January 1997 concerning acceptable conditions and scheduling of phone calls from her to her children, but Hamlin did not respond to his letter. The children’s counselor testified that the children made a videotape and sent it to their mother, but they never received any response.

¶21 Hamlin’s plan for the future, as she related to the children’s counselor, was to return to Wyoming, to try to see the children every six months, and to resume her telephone contact with them. Twenty months after the children were declared youths in need of care, she did not have a residence large enough to accommodate four children, and she had not arranged for the children to visit her in Wyoming. Hamlin had not completed her treatment plan and had in fact been out of contact with her children for the majority of time since her treatment plan was initiated. Hamlin’s position is that she needs more time to get her life in order. However, the evidence clearly established that, for their emotional health, these children need finality of placement now.

¶22 Hamlin cites the goal set forth at § 41-3-101(l)(d), MCA, of preserving the unity and welfare of the family whenever possible. After reviewing the record, we conclude that goal has been forwarded by the recommendation of the District Court that the children be placed with their aunt and uncle and the provisions regarding visitation by the parents.

¶23 We hold that the District Court did not abuse its discretion in determining that to protect the welfare of J.H., R.H., D.H., and R.H., their custody should be transferred to the Department. We therefore affirm the decision of the District Court.

JUSTICES GRAY, LEAPHART, NELSON and TRIEWEILER concur.