author: JUSTICE NELSON

text:
    BOZEMAN DAILY CHRONICLE, Plaintiff, Respondent, and Cross-Appellant, v. CITY OF BOZEMAN POLICE DEPARTMENT, Defendant, Appellant, and Cross-Respondent, and GALLATIN COUNTY SHERIFF’S DEPARTMENT, Defendant and Respondent.
    No. 93-127.
    Submitted on Briefs July 29, 1993.
    Decided August 27, 1993.
    50 St.Rep. 1014.
    260 Mont. 218.
    859 P.2d 435.

      For Plaintiff, Respondent and Cross-Appellant: James P. Reynolds and David K. W. Wilson, Jr., Reynolds, Motl, Sherwood & Wright, Helena.

      For Defendant, Appellant and Cross-Respondent: Paul J. Luwe, Bozeman City Attorney, Bozeman.
    For Defendant and Respondent: Mike Salvagni, Gallatin County Attorney, Bozeman.
   JUSTICE NELSON

delivered the Opinion of the Court.

This is an appeal from a Memorandum and Order of the Eighteenth Judicial District Court. Defendant City of Bozeman Police Department (City) appeals that portion of the judgment which requires the City to pay the plaintiff’s attorney’s fees. The plaintiff Bozeman Daily Chronicle (Chronicle) appeals that portion of the judgment which denies its request for the release of investigative documents. We affirm the award of attorney’s fees and remand with instructions to the District Court with respect to the release of investigative documents.

The issues on appeal are as follows:

1. Must the investigative documents requested by the Chronicle be released by the City and the Gallatin County Sheriff’s Department (Sheriff)?

2. Is the Chronicle entitled to an award of its attorney’s fees?

On or about March 8, 1992, a cadet at the Montana Law Enforcement Academy (Academy) in Bozeman, Montana, made an allegation of sexual intercourse without consent against an off-duty Bozeman city police officer (police officer). The Sheriff conducted an investigation and made a request for prosecution to the Gallatin County Attorney’s Office.

The Gallatin County Attorney recused his office and referred the case to the Montana Department of Justice, County Prosecutor Services Bureau. That office referred the case to the Missoula County Attorney. The police officer was placed on administrative leave with pay pending the outcome of the investigation.

The Missoula County Attorney, Robert Deschamps, III, and two of his deputies reviewed the file and conducted follow-up interviews with the alleged victim. On April 20, 1992, Mr. Deschamps sent a letter to John Connor, Chief of the County Prosecution Services Bureau. Mr. Deschamps concluded that no criminal charges should be filed. However, Mr. Deschamps stated that it was the collective opinion of him and his deputies that “[the police officer] should not be allowed to continue working as a law enforcement officer because of inappropriate use of his position in relation to his contacts with women.” On April 21,1992, the police officer resigned.

Approximately a week after the incident at the Academy which prompted the investigation, Mario Milliken, a Chronicle reporter, was informed by Greg Noose, the administrator of the Academy, that an “incident” had occurred. Ms. Milliken went to the Sheriff’s Office, where she was given some general information concerning the incident and was shown the initial offense report.

Ms. Milliken and the editor of the Chronicle, Bill Wilke, attempted to obtain the police officer’s name and the investigative documents regarding the incident from the City and from the Sheriff. The City and the Sheriff refused to turn over this information to the Chronicle, claiming that it was confidential criminal justice information.

On April 30, 1992, the Chronicle filed a Complaint and a Petition for an Order to Show Cause (Petition) as to why the police officer’s name and the investigative documents should not be released. The Complaint and Petition alleged that the failure to release that information violated Article II, Section 9 of the Montana Constitution. The Chronicle also requested its attorney's fees incurred in enforcing its constitutional rights, pursuant to § 2-3-221, MCA.

A hearing on the Petition was held on May 22, 1992. At the close of the hearing, the District Court ruled from the bench that the name of the police officer should be released, citing this Court’s decision in Great Falls Tribune v. Cascade County (1989), 238 Mont. 103, 775 P.2d 1267. The District Court took under advisement the matter of the release of the investigative documents and award of attorney’s fees and ordered the parties to file briefs by May 29, 1992.

On July 31, 1992, the District Court entered a Memorandum and Order requiring the City and the Sheriff to provide the Chronicle with a copy of the initial offense report but denying the Chronicle’s request for investigative documents. The reason given for this ruling by the District Court was that the demands of individual privacy of the alleged victim and witnesses exceeded the merits of public disclosure. This Memorandum and Order did not address attorney’s fees and, on September 3,1992, the Chronicle moved the District Court to amend its Order to include an award of such fees.

All parties briefed the issue of attorney’s fees and, on October 26, 1992, the District Court ordered that the City pay the Chronicle’s reasonable attorney’s fees in bringing its action, pursuant to § 2-3-221, MCA. Thereafter, the Chronicle and the City stipulated to a reasonable amount of attorney’s fees, with the City reserving the right to object to the award of attorney’s fees itself. On December 8, 1992, a final judgment in this case was entered. The City appealed the award of attorney’s fees and the Chronicle cross-appealed the denial of the release of the investigative documents.

Our standard of review relating to discretionary trial court rulings, such as awarding attorney’s fees, is whether the trial court abused its discretion. Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 604. Our standard of review relating to conclusions of law is whether the trial court’s interpretation of the law is correct. Steer, 803 P.2d at 603.

I - RELEASE OF INVESTIGATIVE DOCUMENTS

In addition to the name of the police officer, the Chronicle sought release of the investigative documents prepared in connection with the alleged sexual assault by the police officer against an Academy cadet. The District Court determined that such documents were primarily confidential criminal justice information and refused to release the same to the Chronicle.

Criminal justice information under the Montana Criminal Justice Information Act of 1979 (the Act), §§ 44-5-101, et seq., MCA, is classified as public criminal justice information and confidential criminal justice information.

Public criminal justice information means information:

(a) made public by law;
(b) of court records and proceedings;
(c) of convictions, deferred sentences, and deferred prosecutions;
(d) of postconviction proceedings and status;
(e) originated by a criminal justice agency, including:
(i) initial offense reports;
(ii) initial arrest records;
(iii) bail records; and
(iv) daily jail occupancy rosters;
(f) considered necessary by a criminal justice agency to secure public assistance in the apprehension of a suspect; or
(g) statistical information.

Section 44-5-103(12), MCA.

Confidential criminal justice information means:

(a) criminal investigative information;
(b) criminal intelligence information;
(c) fingerprints and photographs;
(d) criminal justice information or records made confidential by law; and
(e) any other criminal justice information not clearly defined as public criminal justice information.

Section 44-5-103(3), MCA.

With some qualifications, public criminal justice information may be disseminated without restriction. Section 44-5-301, MCA. The dissemination of confidential criminal justice information, on the other hand, is restricted

to criminal justice agencies, to those authorized by law to receive it, and to those authorized to receive it by a district court upon a written finding that the demands of individual privacy do not clearly exceed the merits of public disclosure!.]

Section 44-5-303, MCA.

In this case, because the Chronicle is not a criminal justice agency, the only way that the Chronicle can obtain access to the confidential criminal justice information at issue is (1) if it is authorized by law to receive such information; or (2) upon order by a district court after the statutory written finding is made.

A. Authorized by Law

Article II, Section 9 of the Montana Constitution, the “Right to Know” provision, provides:

No person shall be deprived of the right to examine documents or to observe the deliberations of all public bodies or agencies of state government and its subdivisions except in cases in which the demand of individual privacy clearly exceeds the merits of public disclosure.

We have previously held that a person is “authorized by law” to receive confidential criminal justice information on the basis of that constitutional provision. Allstate Ins. Co. v. City of Billings (1989), 239 Mont. 321, 325, 780 P.2d 186, 188.

In Allstate, an insurance company sought police investigation files relating to the death of its insured. The insured, who was HIV positive at the time of his death, died of an intravenous drug overdose. Allstate, 780 P.2d at 187. In his application with the insurance company, the insured denied ever being treated for AIDS and denied prior illegal drug use. Allstate, 780 P.2d at 186-87. The insurance company believed that the investigative files would assist it in determining whether the insured had misrepresented facts in his insurance application, which would preclude coverage. Allstate, 780 P.2d at 187.

The trial court interpreted § 44-5-303, MCA, to mean that “authorized by law” required specific authorization by statute. We concluded that the trial court’s interpretation was too narrow and held that the word “law” includes constitutional law as well as statutory law. Allstate, 780 P.2d at 188.

Accordingly, one is “authorized by law” to receive criminal justice information by the Right to Know provision of the Constitution. The only limitation on the right to receive this information is the constitutional right to privacy.

Allstate, 780 P.2d at 188.

In accordance with Allstate, we reaffirm that a person — in this case, the Chronicle — is “authorized by law” to receive confidential criminal justice information under the Right to Know provision of the Montana Constitution, qualified only by Article II, Section 10, of the Constitution, the “Right to Privacy” provision, which provides:

The right of individual privacy is essential to the well being of a free society and shall not be infringed without a showing of a compelling state interest.

While the Chronicle has a right to know under the Constitution and is, therefore, “authorized by law” to receive the investigatory documents at issue, our inquiry must not stop there. We must, of necessity, also consider the constitutional limitation of the right to privacy on the Chronicle’s right to know.

B. Proper Showing to Receive Information

The public’s right to know and the individual’s right to privacy inevitably conflict in cases involving a request for confidential criminal justice information under the Act. Accordingly, in view of the purpose to protect individual privacy underpinning the Act, as set forth in § 44-5-102, MCA, “it is incumbent upon a party to make a proper showing in order to be eligible to receive such specific confidential information.” Allstate, 780 P.2d at 189.

In this case, the Chronicle maintains that its right to the confidential criminal justice information at issue exceeds the privacy rights of the police officer because the police officer was accused of improper sexual activity with an Academy cadet and by reason of the conclusion of Mr. Deschamps that “because of [his] inappropriate use of his position in relation to contacts with women,” the police officer should not be allowed to continue working in law enforcement.

The Chronicle contends that it has not asked for the names of the alleged victim or witnesses and that the privacy rights of these people can be protected under a protective order.

In order to evaluate whether the Chronicle has met its burden and has made a proper showing of entitlement to receive the investigatory documents at issue, we look to two previous decisions of this Court. In Great Falls Tribune, we utilized the now-familiar two-part test to determine whether an individual has a protected privacy interest under Article II, Section 10, of the Montana Constitution. This test requires answering two queries: first, we determine whether the person involved has a subjective or actual expectation of privacy; next, we evaluate whether society is willing to recognize that expectation as reasonable. Great Falls Tribune, 775 P.2d at 1268.

In Great Falls Tribune, holding that “[wjhatever privacy interest the officers have in the release of their names as having been disciplined ... is not one which society recognizes as a strong right,” we stated that “it is not good public policy to recognize an expectation of privacy in protecting the identity of a law enforcement officer whose conduct is sufficiently reprehensible to merit discipline.” Great Falls Tribune, 775 P.2d at 1269. We observed that:

law enforcement officers occupy positions of great public trust... [and] ... the public has a right to know when law enforcement officers act in such a manner as to be subject to disciplinary action. The public health, safety, and welfare are closely tied to an honest police force. The conduct of our law enforcement officers is a sensitive matter so that if they engage in conduct resulting in discipline for misconduct in the line of duty, the public should know. We conclude that the public’s right to know in this situation represents a compelling state interest.

Great Falls Tribune, 775 P.2d at 1269.

In that case, we only required the release of the identities of the police officers who were terminated and those who resigned, declining to rule that the entirety of any personnel files need also be revealed. Similarly, in the instant case, the District Court required only the release of the police officer’s name (along with the initial offense report, which was public criminal justice information).

It is important to point out, however, that in Great Falls Tribune, the newspaper’s petition only sought the release of the names of the law enforcement officers. Additionally, since our decision in that case, we have had occasion to consider and rule upon a request for the release of a report detailing the results of an investigation of a public official’s alleged sexual harassment of a city employee.

In Citizens to Recall Mayor v. Whitlock (1992), 255 Mont. 517, 844 P.2d 74, the Hamilton City Judge filed a complaint with the Human Rights Commission against the City of Hamilton and the mayor, alleging that the mayor sexually harassed and discriminated against her. The City hired an investigator to inquire into the allegations, and the investigator prepared a report with his findings. Whitlock, 844 P.2d at 76. Thereafter, the City entered into negotiations and, ultimately, into a settlement with the City Judge. The City, however, refused to release the investigative report to the public. Whitlock, 844 P.2d at 76. A citizens group in Hamilton filed a complaint in the district court, requesting the district court to order the City to release copies of the investigator’s report. After a hearing, the district court held that an elected official had no reasonable expectation of privacy when accused of misconduct in office and ordered the release of the investigator’s report. Whitlock, 844 P.2d at 76.

On appeal, we found that the investigator’s report did not discuss protected information such as personnel records or job performance evaluations. Whitlock, 844 P.2d at 78. Rather, the report, while not generated by a criminal justice agency (§ 44-5-103(7), MCA), and while not criminal justice information (§ 44-5-103(8), MCA), was the result of an investigation into the mayor’s alleged misconduct related to the performance of his official duties. Applying the two-part test, we held that the mayor’s expectation of privacy was unreasonable as a matter of law. Whitlock, 844 P.2d at 77-78. We also stated that the merits of public disclosure were great because public funds were used to settle the dispute. Whitlock, 844 P.2d at 78. Therefore, we held that the public’s right to know outweighed the mayor’s right to privacy. Whitlock, 844 P.2d at 78.

Our decision in Whitlock was based on two reasons that apply equally to police officers, given our discussion in Great Falls Tribune regarding the position of great public trust which law enforcement officers occupy. Specifically, the nature of the office [job] mandates that the office holder [officer] be properly subject to public scrutiny in the performance of his duties, and the public has the right to be informed of the actions and conduct of such office holders [officers]. Whitlock, 844 P.2d at 77. In Whitlock, we pointed out that allegations of sexual misconduct went directly to the official’s ability to properly carry out his duties and, therefore, should not be withheld from public scrutiny. Whitlock, 844 P.2d at 78.

Similarly, in the instant case and notwithstanding that the police officer was off-duty at the time of the alleged incident, the nature of the alleged misconduct ran directly counter to the police officer’s sworn duty to uphold the law, to prevent crime, and to protect the public. We note the allegations of sexual misconduct by the police officer; the fact that, before he resigned, the City planned to take further disciplinary action against the police officer regardless of whether he was criminally charged; and the conclusion of Mr. Deschamps that the police officer should not have been allowed to continue working as a law enforcement officer because of inappropriate use of his position in relation to his contacts with women. We hold that, notwithstanding the police officer’s resignation, such alleged misconduct went directly to the police officer’s breach of his position of public trust; that, therefore, this conduct is a proper matter for public scrutiny; and that, accordingly, the Chronicle has met its initial burden to make a proper showing to receive the confidential criminal justice information at issue.

C. Right to Privacy

Once a party authorized by law to receive confidential criminal justice information has met his initial burden to make a proper showing to receive that information, it then becomes incumbent upon the agency or person in possession of the information to demonstrate why all or portions thereof should not be released because the rights of individual privacy outweigh the merits of public disclosure.

In Allstate, we required the district court to balance the competing right to know and right to privacy to determine what, if any, information should be given to the party requesting the information from the government. Allstate, 780 P.2d at 189.

While, as indicated above, the police officer’s right to privacy in the investigative documents at issue does not clearly exceed the public’s right to know, we must, nevertheless, also consider the competing privacy rights of other persons involved in the investigation of the alleged sexual assault. The alleged victim and possibly witnesses and other persons have constitutional privacy rights that must be considered in the release of the investigative documents at issue. As we pointed out in Allstate:

Obviously in certain situations investigatory material must be shielded from public review. Victims of sex crimes, for example, may have a legitimate expectation of privacy. On the other hand, suspects may have such an expectation in certain circumstances because criminal investigations occasionally result in the designation of the innocent as suspects, particularly in the early stages of investigation.

Allstate, 780 P.2d at 188.

Similarly, in Engrav v. Cragun (1989), 236 Mont. 260, 769 P.2d 1224, we reemphasized that the public’s right to know is not absolute and that the privacy rights of individuals, which, in Montana, are more substantial than such rights guaranteed in the United States Constitution, must be fully respected. Engrav, 769 P.2d at 1229. In that case, applying the two-part test, we held that a student’s request for a broad category of confidential criminal justice information for a research project was beyond the reach of the public sector and that the public’s right to know was outweighed by the right of privacy protected by the Act and the Montana Constitution. Engrav, 769 P.2d at 1227-29.

In the instant case, the District Court ruled that the alleged victim and witnesses have an expectation of privacy which exceeds the merits of public disclosure. We agree. In this case, especially in view of the fact that criminal charges were not filed, the victim of the alleged sexual assault and the witnesses involved in the investigation have a subjective or actual expectation of privacy which society is willing to recognize as reasonable. Accordingly, the privacy rights of the alleged victim and of the witnesses outweigh the public’s right to know and must be accorded adequate protection in the release of any of the investigative documents at issue.

While not directly related to privacy concerns, we also pointed out in Engrav that public exposure of law enforcement files relating to ongoing criminal investigations would have a disastrous effect upon law enforcement agencies in the performance of their duty to protect the lives, safety and property of persons within their jurisdictions and would have the potential effect of allowing criminals and their allies to track the progress of investigations into their activities. Engrav, 769 P.2d at 1227. Here, a criminal investigation will not be compromised as the investigation of the alleged incident is not ongoing. It was determined that no criminal action would be pursued against the police officer; the investigation has terminated and he has resigned.

D. In Camera Inspection and Protective Order

Given our holding that the Chronicle is authorized by law and has made a proper showing to receive the investigative documents at issue; that the privacy rights of the police officer in such information do not outweigh the public’s right to know; and that the privacy rights of the alleged victim and witnesses in such information do outweigh the public’s right to know, we must also address the proper method of giving effect to the public’s right to know about the conduct of the police officer, while, at the same time, protecting the rights to privacy of the alleged victim and witnesses involved in the investigation of this case.

In Allstate, we spelled out the proper procedure to effect the protection of the privacy rights of persons who are legitimately entitled to such protection under the Constitution and under the Act while, at the same time, balancing the public’s competing right to know as set forth above. Specifically, we required the district court to conduct an in camera inspection of the documents at issue in order to determine what material could properly be released, taking into account and balancing the competing interests of those involved, and conditioning the release of information upon limits contained within a protective order. Allstate, 780 P.2d at 189.

While the Chronicle has not requested the names of the alleged victim and witnesses, the above procedure should, nevertheless, be utilized in this case. Here, there is no indication from the record that the District Court reviewed the investigative documents requested by the Chronicle. The District Court simply ruled that the investigative documents could not be released.

A review of such documents is, however, essential in determining whether or not the privacy interests of the victim and witnesses can be protected while disseminating the remainder of the information. The District Court’s failure to review the documents at issue and its subsequent refusal to release any of them to the Chronicle, while understandable because of the limited information requested and released in Great Falls Tribune, was, nevertheless, error, given our discussion in that case of the unique position of police officers and our subsequent holding in Whitlock.

Accordingly, we remand this case to the District Court with instructions to conduct an in camera inspection of the investigative documents at issue in order to determine what material can be released to the Chronicle. To the extent that they have not already had an opportunity to do so, and while keeping in mind our application of Great Falls Tribune and Whitlock to this case, the City and the Sheriff should be given the opportunity to demonstrate why all or portions of the investigative documents should not be released because the rights of individual privacy outweigh the merits of public disclosure. The Chronicle should be given as much information as possible while maintaining the privacy rights of the alleged victim and witnesses. If, on remand, the District Court determines that the privacy rights of other persons involved in this case, besides the police officer, also merit protection under the two-part test, then those persons’ privacy rights should be-protected, as well. To the extent the District Court deems necessary, the release of any information should be conditioned upon limits contained within a protective order.

II - AWARD OF ATTORNEYS FEES

The District Court awarded the Chronicle its attorney’s fees against the City. This award was based upon § 2-3-221, MCA, which provides:

A plaintiff who prevails in an action brought in district court to enforce his rights to know under Article II, Section 9 of the Montana Constitution may be awarded his costs and reasonable attorney fees.

This section is discretionary. See Associated Press v. Bd. of Pub. Educ. (1991), 246 Mont. 386, 804 P.2d 376.

In the instant case, the Chronicle’s complaint alleged that the refusal of the City and Sheriff to release the police officer’s name and the investigative documents violated Article II, Section 9 of the Montana Constitution. The Chronicle prevailed in obtaining the name of the police officer involved, and therefore an award of attorney’s fees is within the purview of § 2-3-221, MCA.

The City, nevertheless, argues that it should not have to pay attorney’s fees because it complied with § 44-5-303, MCA, and the directive of Allstate. The City states that it is faced with Hobson’s choice: if it releases investigative documents upon request, it runs the risk of invasion of privacy lawsuits, whereas if it does not release the demanded documents, it faces paying attorney’s fees if a plaintiff prevails in obtaining such information under the Right to Know provision of the Constitution.

The City bases its argument on the proposition that the Chronicle is not “authorized by law” to receive confidential criminal justice information and that it becomes eligible to receive such information only when so authorized by a district court upon a written finding that the demands of individual privacy do not clearly exceed the merits of public disclosure. The City argues that the latter language was added to § 44-5-303, MCA, by the 1991 Legislature in response to our decision in Allstate.

In effect, the City maintains that the amendment to that statute requires a lawsuit and order from the district court each time there is a request for confidential criminal justice information under the Act, and that, in having to comply with the statutorily mandated procedure, it should not, thereafter, be required to pay attorney’s fees if a requesting party prevails in obtaining the information demanded.

While we appreciate the damned-if-you-do, damned-if-you-don’t choice which criminal justice agencies face in these types of cases, nevertheless, the City’s argument must fail. We held in Allstate, and reaffirm in this case, the principle that one is “authorized by law” to receive criminal justice information by the Right to Know provision of the Constitution. As we pointed out in the former case, the Right to Know provision of the Constitution is “self-executing” — that is, legislation is not required to give it effect.

The clear language contained within Article II, Section 9, indicates that there was no intent on the part of the drafters to require any legislative action in order to effectuate its terms.
The legislature does not have the power to provide through the passage of statute who can exercise this right unless it finds that such curtailment is necessary to protect the right of individual privacy. Accordingly, any interpretation of § 44-5-303, MCA, which requires specific legislative authorization to review criminal justice information would render the statute unconstitutional.

Allstate, 780 P.2d at 188-89.

We have reviewed the legislative history associated with the 1991 amendment to § 44-5-303, MCA, and are amable to locate any direct reference to our Allstate decision. We do note that one proponent of the bill, John MacMaster, stated that “[w]ithout this [the amendment] in there, the District Court cannot allow someone to look at [the infoimation].”

While the legislature may have determined that it was necessary or advisable to provide a classification of persons eligible to receive criminal justice information, i.e., those authorized by court order and a written finding, the fact remains that one is still “authorized by law” to receive criminal justice information by the Right to Know provision of the Constitution, and no further statutory authority is required to give that constitutional right effect. The Chronicle premised its request on its right to know under Article II, Section 9, and not on the provision of § 44-5-303, MCA, requiring a court order and written finding. Although the legislature amended § 44-5-303, MCA, it nevertheless did not repeal or modify the district court’s discretionary authority to award attorney’s fees under § 2-3-221, MCA.

Furthermore, and recognizing that the City and the Sheriff acted conservatively in a good faith effort to comply with the Act and our decision in Allstate, we nevertheless held in Associated Press that such motives will not preclude a discretionary award of attorney’s fees under § 2-3-221, MCA. Associated Press, 804 P.2d at 380. As in that case, here, the public benefits from receiving full disclosure of relevant information, and will benefit because of the Chronicle’s efforts. By awarding attorney’s fees against the City, the cost of litigation is properly spread among the beneficiaries.

Finally, the City urges us to limit § 2-3-221, MCA, to actions under the Open Meetings Law, codified at Title 2, Chapter 3, Part 2, MCA. While that argument has some superficial appeal given the fact that § 2-3-221, MCA, is found in the Open Meetings Law, nevertheless, the plain language of the statute militates against the City’s position.

Section 2-3-221, MCA, allows a discretionary award of attorney’s fees when a plaintiff prevails in its rights under Article II, Section 9 of the Constitution. That Article and Section guarantee the right of the public to observe deliberations and examine documents. Accordingly, unless and until the legislature repeals or modifies § 2-3-221, MCA, we decline to limit the plain meaning of that statute to the interpretation urged by the City.

Because the Chronicle’s complaint was grounded in the Montana Constitution, and because the Chronicle prevailed in this action, the District Court’s award of attorney’s fees is affirmed. Attorney’s fees on appeal are also allowable and should be determined and awarded on remand.

REMANDED to the District Court for further proceedings consistent with this opinion.

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


source: Caselaw Access Project

author: JUSTICE TRIEWEILER

license: Public Domain

text:
    COLLIN J. O’FALLON and HAROLD CASE, Plaintiffs and Appellants, v. FARMERS INSURANCE EXCHANGE, a reciprocal or interinsurance exchange, TERRY FALCON and JOHN DOES 1, 2, 3, and 4, Defendants and Respondents.
    No. 92-024.
    Submitted on Briefs June 11, 1992.
    Decided August 30, 1993.
    50 St.Rep. 1022.
    260 Mont. 233.
    859 P.2d 1008.

      For Plaintiffs and Appellants: Alexander Blewett, III, Hoyt & Blewett, Great Falls; Michael J. McKeon, McKeon & Anderson, P.C., Butte.
    For Defendants and Respondents: Shelton C. Williams and Richard Ranney, Williams & Ranney, PC., Missoula.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

Plaintiffs brought this action to recover damages based upon defendants’ alleged violation of § 33-18-201, MCA, and for malicious prosecution. The District Court dismissed both claims pursuant to Rule 12(b)(6), M.R.Civ.P., for failure to state a claim upon which relief can be granted. Plaintiffs appeal from the judgment entered pursuant to the District Court’s order of dismissal. We reverse the District Court.

The issues are:

1. Did the District Court err when it dismissed, with prejudice, plaintiffs’ claim for malicious prosecution?

2. Did the District Court err when it dismissed, with prejudice, plaintiffs’ claim for damages pursuant to §§ 33-18-201 and -242, MCA?

3. Did the District Court err when it held that Terry Falcon, the claims adjuster employed by Farmers Insurance Exchange, was individually liable for his bad faith adjustment of plaintiffs’ claim pursuant to § 33-18-201, MCA?

FACTUAL BACKGROUND

The following facts are taken from plaintiffs’ complaint; and for purposes of reviewing the District Court’s order dismissing the complaint pursuant to Rule 12(b)(6), M.R.Civ.P., they are assumed to be true. Hoveland v. Petaja (1992), 252 Mont. 268, 270-71, 828 P.2d 392, 393.

On August 31, 1990, Collin J. O’Fallon and Harold Case were operating their motor vehicles in the City of Missoula and were stopped in a line of cars waiting for a red light to change at the intersection of Orange Street and Third Avenue South. Alfreda Case was riding as a passenger in Harold’s car.

While plaintiffs were waiting for the light to change, Teddy Burgmaier approached them from behind in an extremely intoxicated condition and smashed into the Case vehicle, causing it to smash into O’Fallon’s vehicle. As a result of the collision, both O’Fallon and Alfreda sustained physical injuries.

At the time of Burgmaier’s collision with plaintiffs, he was insured against liability arising out of the operation of his motor vehicle by defendant Farmers Insurance Exchange. Defendant Terry Falcon was a claims agent for Farmers who had the responsibility for investigating this collision and adjusting the claims against Burgmaier.

On February 8, 1991, O’Fallon and Alfreda filed a complaint against Farmers and Burgmaier in the District Court for the Fourth Judicial District in Missoula County in an effort to recover damages for their physical injuries.

On March 25, 1991, the attorneys hired by Farmers filed a counterclaim against O’Fallon, alleging that he negligently caused the collision and requesting contribution or indemnity for any damages that Burgmaier would be liable to pay as a result of Alfreda’s claim against him. A third-party complaint alleging similar grounds for relief was filed against Harold.

In this case, plaintiffs allege that the counterclaim and third-party complaint filed in the underlying personal injury action were instigated by Farmers and Falcon and were filed with malice and without probable cause. They also allege that those claims were terminated in favor of plaintiffs and that they suffered damages as a result of defendants’ malicious prosecution.

For a second cause of action, plaintiffs allege that the conduct of Farmers and Falcon, as set forth above, violated their statutory duties pursuant to § 33-18-201(4) and (6), MCA, to conduct a reasonable investigation and settle their claims in good faith after liability had become reasonably clear.

Both defendants moved to dismiss plaintiffs’ complaint for failure to state a claim upon which relief can be granted. On September 13, 1991, the plaintiffs’ claims were dismissed without prejudice by the District Court because the underlying personal injury action was still pending. The District Court concluded, therefore, that the favorable termination requirement for a malicious prosecution claim could not be satisfied, and that the statutory bad faith claim was barred pursuant to § 33-18-242, MCA.

Plaintiffs moved for reconsideration, and on October 23,1991, the counterclaim and the third-party complaint were dismissed with prejudice in the underlying personal action. However, on October 31, 1991, the District Court entered a second opinion and order in this case dismissing plaintiffs’ complaint. This time the complaint was dismissed with prejudice pursuant to Rule 12(b)(6), M.R.Civ.P.

In its opinion, the District Court explained that since the underlying counterclaim and third-party complaint had been dismissed pursuant to defendants’ motion to dismiss, rather than pursuant to plaintiffs’ motion for summary judgment, the dismissal must have been pursuant to settlement, and therefore, the underlying proceeding did not terminate favorably for plaintiffs. The District Court relied on our previous decision in Vehrs v. Piquette (1984), 210 Mont. 386, 684 P.2d 476.

The District Court dismissed the statutory bad faith claim, but gave no explanation for dismissing that claim. Falcon’s motion to dismiss the bad faith claim against him on the basis that he was not subject to personal liability under §§ 33-18-201 and -242, MCA, had been denied by the District Court on September 13, 1991.

Plaintiffs have appealed from the District Court’s order dismissing their complaint, and defendant Falcon has cross-appealed from the District Court’s preliminary order to the effect that he could personally be sued for statutory bad faith pursuant to §§ 33-18-201 and -242, MCA.

On appeal, plaintiffs contend that because defendants’ motions were made pursuant to Rule 12(b)(6), M.R.Civ.P, the District Court was limited to the four corners of the complaint; that it should not have considered information other than the pleadings; and that assuming the allegations in plaintiffs’ complaint are true, plaintiffs have stated two claims against both defendants for which relief can be granted under Montana law.

In their original brief filed in this Court, defendants suggested that since the District Court considered matters outside the pleadings, we should consider plaintiffs’ appeal to be from an order granting summary judgment pursuant to Rule 56, M.R.Civ.P. In response to that suggestion, plaintiffs moved this Court for an order clarifying the scope of our review and requesting that if this matter was being reviewed pursuant to Rule 56, that plaintiffs be allowed to bring to our attention the results of additional discovery that was conducted while this case was pending in the District Court.

Defendants objected to our consideration of anything other than the pleadings in this case, and the court file in the underlying personal case; and in response to plaintiffs’ motion, submitted authorities for the principle that information which is part of the public record may be considered by a District Court in addition to the pleadings when ruling on a motion to dismiss pursuant to Rule 12(b)(6), M.R.Civ.P. Stillman v. Fergus County (1986), 220 Mont. 315, 316, 715 P.2d 43; Washington v. Office of Comptroller of Currency (11th Cir. 1988), 856 F.2d 1507; Fudge v. Penthouse Int'l Ltd. (1st Cir. 1988), 840 F.2d 1012, cert. denied, 488 U.S. 821, 109 S.Ct. 65, 102 L.Ed.2d 42; 2A Moore’s Federal Practice ¶ 12.07 (2.-5) pp. 12-68 (2d ed. 1990).

On April 28, 1992, we issued an order stating that:

This case shall be considered as an appeal from a ruling on a motion to dismiss pursuant to Rule 12(b)(6), M.R.Civ.P., and in the course of that appeal, this Court will take judicial notice of O’Fallon, et al. v. Burgmaier, Cause No. 73915, Missoula County.

While this order would seemingly expand the scope of materials which can be considered pursuant to a motion to dismiss under Rule 12(b)(6), M.R.Civ.P., we need not decide that issue in this case because we hold that with or without consideration of the District Court file in the personal injury action, defendants’ motion to dismiss should have been denied.

I.

MALICIOUS PROSECUTION

Did the District Court err when it dismissed, with prejudice, plaintiffs’ claim for malicious prosecution?

In First Bank (N.A.)-Billings v. Clark (1989), 236 Mont. 195, 204-05, 771 P.2d 84, 90, we set forth the essential elements of a claim for malicious prosecution. They are as follows:

1. A judicial proceeding commenced against the party alleging malicious prosecution;
2. the other party’s responsibility for instigating the proceeding;
3. a want of probable cause for the other party’s action;
4. the existence of malice as the motivator behind the other party’s action;
5. the termination of the proceeding in favor of the alleging party; and
6. damages suffered by the party alleging malicious prosecution.

In this case, all six of the above elements have been alleged in plaintiffs’ complaint, and if we assume those allegations to be true, then plaintiffs have stated a claim upon which relief can be granted under Montana law. Furthermore, nothing found in the public record of the underlying personal injury action requires a different conclusion. The facts apparent from that record are as follows:

O’Fallon and Alfreda filed a complaint for damages based on their personal injuries on February 8, 1991. Defendant Burgmaier answered that complaint on March 25, 1991. As part of his answer, he filed a counterclaim against O’Fallon, and a third-party complaint against Harold, claiming that they were responsible for plaintiffs’ injuries and asking for contribution, or in the alternative, complete indemnification from them for any damages that Burgmaier might be found liable to pay.

O’Fallon and Harold both then retained new attorneys who appeared on their behalf and responded to the counterclaim and third-party complaint. On April 23,1991, they took Burgmaier’s deposition. On the following day, they moved the District Court to dismiss the counterclaim and third-party complaint by summary judgment. In support of that motion, plaintiffs represented to the court that in Burgmaier’s deposition and response to their requests for admissions he admitted that he had been intoxicated at the time of the collision; that he had been careless and reckless in the operation of his motor vehicle; and that he also admitted that neither O’Fallon nor Harold were negligent. That motion was originally scheduled to be heard on May 9, 1991. On the day before that motion was scheduled to be heard, Burgmaier moved the court to dismiss the counterclaim and third-party complaint that he had filed. Both motions were eventually argued before the District Court on May 23, 1991. On October 23, 1991, the District Court dismissed Burgmaier’s counterclaim and third-party complaint with prejudice. However, that order provided no explanation of the District Court’s basis for the dismissal of those claims.

The District Court, in this case, concluded that the claims must have been dismissed as part of the overall settlement in the underlying personal injury action, and therefore, were not terminated in favor of plaintiffs. However, there is no factual basis for concluding that the claims were dismissed as a result of settlement. It is just as reasonable to conclude from the record before us that they were dismissed because they had no merit and plaintiffs had moved for summary judgment. However, even if the claims had been dismissed as part of an overall settlement, that fact alone would not preclude a finding that they were terminated in favor of plaintiffs.

The District Court relied on our decision in Vehrs. However, the facts in Vehrs are clearly distinguishable from those in this case, and we do not find it controlling. In Vehrs, the plaintiff had been charged with three criminal offenses, all arising from alleged improprieties while he served as Director of the Food Service at the University of Montana. After a jury trial, he was acquitted of one charge, and two others were dismissed in exchange for his agreement to plead guilty to a substituted charge. We held that under those circumstances, “the prosecution cannot be said to have terminated favorably for the defendant.” Vehrs, 684 P.2d at 479.

However, there is no indication in this case that O’Fallon’s or Alfreda’s claims were compromised in consideration for dismissal of the counterclaim and third-party complaint. Neither is there any indication that O’Fallon or Alfreda contributed anything to Burgmaier’s settlement of the underlying personal injury claims. The only thing clear from the record before us is that, after taking Burgmaier’s deposition, plaintiffs moved for summary judgment and defendants beat them to the courthouse in an effort to get the counterclaim and third-party complaint dismissed.

Under these facts, we find the decision of the Supreme Court of Arizona in Bradshaw v. State Farm Mutual Auto Insurance (Ariz. 1988), 758 P.2d 1313, more on point and more persuasive. In Bradshaw plaintiff was a deputy sheriff who was responding to a fellow officer’s distress call when he was struck by William Ivie while passing through an intersection. At the time of the collision, his siren and overhead flashing lights were activated. Ivie died as a result of injuries sustained in the collision. State Farm insured Ivie at the time of the collision. The police report concluded that Ivie had failed to yield the right-of-way. Apparently, all witnesses to the accident agreed with that conclusion.

When State Farm was unable to settle Bradshaw’s claim for his personal injuries, it sought and received permission from Ivie’s widow to file an action on behalf of his estate against Bradshaw in Federal District Court. Mrs. Ivie at first objected, but later agreed, so long as there was no litigation expense incurred by the estate.

Bradshaw answered that claim and counterclaimed for his own injuries. After the completion of discovery, the case was completely resolved when State Farm paid $60,000 to Bradshaw in settlement of his claim.

Bradshaw subsequently brought an action against State Farm alleging malicious prosecution. After a jury trial, he was awarded compensatory and punitive damages.

On appeal, State Farm contended, as defendants contend in this case, that since the wrongful death claim had been concluded by settlement, rather than judgment, there had not been a termination in favor of the plaintiff. The Arizona Supreme Court disagreed and held that:

The wrongful death case was concluded by settlement, rather than judgment. Ivie’s complaint and the Bradshaws’ counterclaim were dismissed with prejudice. Notwithstanding dismissal of the action, settlement may be a favorable termination. See Frey v. Stoneman, 150 Ariz. 106, 110-11, 722 P.2d 274, 278-79 (1986). The true facts, not the form of disposition, are determinative. Id. In this case, State Farm withdrew Ivie’s action, paid the Bradshaws $60,000 and stipulated to the dismissal of the wrongful death complaint with prejudice. Under these facts, the jury could con-elude that Ivie’s lawsuit was terminated favorably to the Bradshaws. Id.; see also Restatement § 674 comment j (favorable termination may arise from “the withdrawal of the proceedings by the person bringing them”).

Bradshaw, 758 P.2d at 1321.

Likewise, we hold that under the facts before us the jury could conclude that Burgmaier’s counterclaim and third-party complaint were terminated favorably to plaintiffs. Therefore, we reverse the District Court’s judgment dismissing plaintiffs’ complaint for malicious prosecution and remand to the District Court for the resolution of that factual issue.

II.

BAD FAITH CLAIM

Did the District Court err when it dismissed, with prejudice, plaintiffs’ claim for damages pursuant to §§ 33-18-201 and -242, MCA?

There was no explanation in the District Court’s opinion and order explaining its dismissal of plaintiffs’ claim against defendants for bad faith violation of § 33-18-201, MCA. Furthermore, plaintiffs’ complaint clearly sets forth sufficient facts to state a claim pursuant to that statute for which relief can be granted. However, on appeal, defendants contend that the District Court’s dismissal should be affirmed because neither plaintiff has sued in his or her capacity as an “insured” nor “third-party claimant” as those terms are used in § 33-18-242, MCA; and that, therefore, plaintiffs have no standing to bring this action under the Unfair Trade Practices Act found at §§ 33-18-201 to -1005, MCA.

Section 33-18-201, MCA, provides in relevant part that:

No person may, with such frequency as to indicate a general business practice, do any of the following:
(4) refuse to pay claims without conducting a reasonable investigation based upon all available information;
(6) neglect to attempt in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear....

Section 33-18-242, MCA, provides for an independent cause of action when § 33-18-201, MCA, has been violated. It states that:

An insured or a third-party claimant has an independent cause of action against an insurer for actual damages caused by the insurer’s violation of subsection (1), (4), (5), (6), (9), or (13) of 33-18-201. [Emphasis added.]

It is clear that the Legislature intended to distinguish between people making claims for bad faith against their own insurer as opposed to people who are damaged by an insurance company’s conduct but have no contractual relationship to that company. Other than that distinction, there is no definition of “third-party claimant” in the Unfair Trade Practices Act.

We conclude that where plaintiffs have alleged a violation of subsections (4) and (6) of § 33-18-201, MCA, and where they have further alleged that they were personally damaged as a result of those violations, they are third-party claimants within the meaning of § 33-18-242, MCA, and have properly set forth a claim for violation of Montana’s Unfair Trade Practices Act.

In this case, Farmers contends that if it had unreasonably denied O’Fallon’s claim it could be subj ect to liability under the Act. However, it argues that filing a frivolous counterclaim for the sole purpose of establishing leverage with which to negotiate settlement of his claim is not prohibited by the Act. To accept Farmers’ position would exalt form over substance and we are not inclined to do so. Furthermore, if, as plaintiffs allege, Harold had to retain an attorney to represent him as a third-party defendant based on a complaint filed against him for the sole purpose of improving Farmers’ bargaining position with his wife, it is of no consequence that he had not originally filed a claim for personal injuries. The purpose of these provisions in the Unfair Trade Practices Act is to protect members of the public from damage caused by an insurer’s unreasonable efforts to avoid the obligations it assumed when it accepted premiums for insurance coverage.

For these reasons, we reverse the District Court’s dismissal of plaintiffs’ second cause of action in which they sought damages for bad faith pursuant to §§ 33-18-201 and -242, MCA.

III.

LIABILITY OF TERRY FALCON

Did the District Court err when it held that Terry Falcon, the claims adjuster employed by Farmers Insurance Exchange, was individually liable for bad faith adjustment of plaintiffs’ claim pursuant to § 33-18-201, MCA?

In addition to the reasons set forth above, Falcon moved the District Court to dismiss the complaint against him on the basis that he was not an “insurer” under the provisions of the Unfair Trade Practices Act, and therefore, not subject to liability for violation of its terms. However, in its opinion and order dated September 13, 1991, the District Court concluded that the definitions in the Unfair Trade Practices Act were broad enough to bring Falcon “under the provisions of both § 33-18-242 and § 33-18-201, MCA ...” and held that “Count II is a valid claim against that defendant.” Falcon cross-appeals from that conclusion.

Section 33-18-201, MCA, provides that “no person” may engage in the prohibited conduct. Person is defined in § 33-1-202(3), MCA, as “an individual, insurer, company ... or any other legal entity.” [Emphasis added.]

In Klaudt v. Flink (1983), 202 Mont. 247, 658 P.2d 1065, we held that § 33-18-201, MCA, did confer an obligation on those covered by the Act to deal reasonably with claimants and that a civil action could be maintained for breach of that obligation. It is clear from the language of § 33-18-201, MCA, that not just insurers, but also claims adjusters, are prohibited from engaging in the acts that are prohibited. It is clear from our decision in Klaudt that a common law cause of action exists to redress violations of the Act’s provisions set forth in § 201. That part of the Klaudt decision has never been reversed nor modified by any subsequent decision of this Court.

In the 1987 session of the Legislature, Representative Fred Thomas introduced House Bill No. 240 which was subsequently passed and codified as § 33-18-242, MCA. As amended and voted upon, House Bill No. 240 was entitled:

AN ACT PROVIDING A CAUSE OF ACTION FOR AND THE SUSPENSION OF LEGAL PROCEEDINGS IN CERTAIN INSURANCE CLAIMS SETTLEMENT CASES; INCREASING THE FINE THAT MAY BE IMPOSED FOR VIOLATION OF THE INSURANCE CODE; AMENDING SECTION 33-18-317, MCA; REPEALING SECTION 33-18-241, MCA; AND PROVIDING AN APPLICABILITY DATE AND AN EFFECTIVE DATE.

The substance of House Bill No. 240 provided a direct cause of action against “insurers” who violate certain parts of § 33-18-201, MCA, and provided that contrary to our decision in Klaudt, an action brought pursuant to this statutory cause of action would not require that violations of the code “were of such frequency as to indicate a general business practice.” The bill also limited the types of claims that could be brought based on claim settlement practices, defined with greater particularity the conduct which would form the basis for this statutory claim, required that a third-party complaint not be filed until the underlying claim was resolved, and established a statute of limitations for the newly created statutory claim. However, nothing in the title of the bill, nor in the text of the newly created statute, suggested that the bill would limit the parties against whom the common law claim established by Klaudt could be brought. Neither is there anything in the bill’s legislative history to suggest that that was the Legislature’s intent.

When testifying in support of his bill, Representative Thomas stated that its purposes were to limit the types of claims that could be brought against insurers, to protect insurers where they had a reasonable basis for denying a claim, to postpone third-party claims under the statute until the underlying claim had been resolved, and to increase the fine that could be assessed against companies that violate provisions of the Act. No other purpose was articulated. Neither did any of the supporters of House Bill No. 240 suggest that its purpose was to in any way limit the “persons” against whom the common law cause of action provided for in Klaudt could be brought. All of the testimony in support of House Bill No. 240 related to the bill’s provision to increase the statutory penalty, its provision for separate trials, and its limits on the type of violations for which third-party actions could be brought.

When the common law, as established by the decisions of this Court, is not in conflict with the statutes, the common law shall be the law. Section 1-1-108, MCA. We conclude that our decision in Klaudt, which authorized a direct cause of action against “persons” who violate § 33-18-201, MCA, is not in conflict with § 33-18-242, MCA, which provides for a statutory cause of action against “insurers,” but does not otherwise limit previously created common law causes of action.

Based on the foregoing history, we conclude that individuals, as well as insurers, are prohibited from engaging in the unfair trade practices set forth in § 33-18-201, MCA, and that when an individual breaches the obligations imposed by that statute, the claimant who is damaged by that breach has a common law cause of action against that individual. However, the statutory cause of action provided for in § 33-18-242, MCA, and the different standard of proof which that statute provides for, apply only to insurers as defined in § 33-1-201(6), MCA.

For these reasons, we affirm the District Court’s conclusion that Falcon is subject to liability for any personal violations of § 33-18-201, MCA. However, we conclude that the burden of proof in the action against Falcon is the burden set forth in Klaudt, while the burden of proof in plaintiffs’ claim against Farmers Insurance Exchange is governed by the terms of § 33-18-242, MCA.

This case is reversed in part, affirmed in part, and remanded to the District Court for resolution of the factual issues raised by the pleadings in this case.

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


text:
    IN RE THE MARRIAGE OF JAMES C. ANDERSON, Petitioner and Appellant, and LINDA K. ANDERSON, Respondent and Respondent.
    No. 92-532.
    Submitted on Briefs March 25, 1993.
    Rehearing Denied Sept. 28, 1993.
    Decided August 31, 1993.
    50 St.Rep. 1028.
    260 Mont. 246.
    859 P.2d 451.

      For Appellant: James C. Anderson, Pro se, Salt Lake City, Utah.
    For Respondent: Klaus D. Sitte, Montana Legal Services Association, Missoula.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

James A. Anderson appeals from a custody decision of the District Court for the Fourth Judicial District, Missoula County. The court awarded the parties joint custody of their minor child and designated Linda K Anderson as the primary residential custodian for two years. The court also granted J ames limited visitation rights. Finally, the court ordered James to pay Linda child care costs, in addition to existing child support payments. We affirm in part and reverse in part.

There are three issues on appeal.

1. Did the District Court abuse its discretion when it designated Linda as the primary residential custodian for two years?

2. Did the District Court abuse its discretion when it awarded James limited visitation rights?

3. Did the District Court err when it ordered James to pay Linda child care costs in addition to existing child support payments?

James and Linda Anderson were married in Billings, Montana, on June 16, 1976. Their only child, Sari Nicole Anderson, was born on July 31, 1987. The parties lived in Montana for approximately one and one-half years after Sari was born. During their marriage, James was employed as an equipment serviceman for Northwest Airlines. Linda worked at home, but was not employed outside the home. In February 1989, the parties separated and Linda moved with Sari to Rigby, Idaho. The parties’ employment situation remained unchanged after their separation.

On March 15, 1989, James filed a petition for dissolution of the parties’ marriage. On February 12, 1990, the District Court entered a decree of dissolution and reserved all other issues for trial. Section 40-4-104(d), MCA, provides that a district court shall enter a decree of dissolution if:

[T]o the extent it has jurisdiction to do so, the court has considered, approved, or made provision for child custody, the support of any child entitled to support, the maintenance of either spouse, and the disposition of property.

The District Court acted contrary to this statute when it did not make a determination about maintenance, property, child support, and child custody at the time that it dissolved the marriage. However, this is not an issue before the Court.

On June 6, 1991, following several days of hearings, the court issued detailed findings, conclusions, and a judgment regarding maintenance, property division, and the support, custody, and visitation of the parties’ child, Sari.

In the June 1991 order, the court found that both James and Linda were fit parents and awarded them joint custody of Sari. The court implemented a temporary custody plan in which Sari was to alternate between living 60 days with her mother and 30 days with her father. The court ordered the alternating custody plan to commence on March 15,1991, and continue until Sari entered school in the fall of 1992. The court instructed the parties to either submit a permanent plan for Sari’s custody during her school-age years by January 1992, or submit to a professional custody evaluation which would be considered by the court during further proceedings in the summer of 1992.

Additionally, in the June 1991 decree, the court awarded James reasonable visitation with Sari: James was allowed to visit with his daughter during the 1992 Christmas holidays, and on every fourth weekend of the year during the 60-day periods that Sari was living with her mother. The weekend visits were to occur in Idaho. Finally, the court ordered James to pay Linda $236 a month for the support, care, maintenance, and education of Sari.

In October 1991, James filed an affidavit with the court, informing the cotut that he was being forced by his employer to relocate from Missoula, Montana, to another location. This was the beginning of a series of changes in residence by James. In December 1991, James was transferred temporarily by his employer to Phoenix, Arizona. That move was followed by a brief return to Missoula and a subsequent and final move to Seattle, Washington.

On October 28,1991, James filed a motion for an advance custody determination. On November 25, 1991, the court granted James’ motion and directed Drs. Philip and Marcy Tepper Bomstein, Ph.D., licensed clinical psychologists, to conduct a comprehensive custody evaluation of James and Linda.

The Bornsteins performed the evaluation in December 1991. The assessment involved diagnostic clinical interviews and the administration of approximately eight objective psychological tests to both parents and Sari. On February 18, 1992, the Bornsteins submitted their evaluation report to the District Court. They reported that James and Linda are both concerned and well-intentioned parents; and although they exhibit hostility toward one another, they both love Sari deeply. The Bornsteins determined that “a sense of stability [for Sari] with free access to both parents would clearly be in Sari’s best interest.”

The Bornsteins recommended that the parties have joint custody of Sari. They determined, however, that given Sari’s age (four years old) and her educational needs, her adjustment would be best served by having a residential custodian. The Bornsteins recommended that Linda be Sari’s residential custodian for the 1992-93 school year because she has generally played that role for Sari thus far. Further, they suggested that Sari have ample visitation with her father on all major holidays, two months of the summer, and extended weekends one time per month during the school year, to continue the development of the positive relationship that James shares with Sari.

The District Court held a hearing on June 2, 1992, to consider James’ motion for an early custody determination and to address James’ request for court direction regarding where he should live to best facilitate the eventual custody arrangement. Dr. Philip Born-stein testified at the hearing that James’ lack of residential or employment stability was “one of the primary considerations” in making his recommendation that Linda have residential custody, but not the only consideration. Bornstein also testified that if James and Linda lived in the same community that the Bornsteins would “have recommended a more shared custodial arrangement,” which would allow Sari to split her residency between households.

The court ordered the June 2,1992, hearing to continue in August 1992, and directed the parties to agree to a custody plan. The court also ordered James to have summer visitation with Sari from mid-June 1992 to mid-August 1992.

In the interim, Linda filed a motion with the District Court on July 21,1992, to amend the findings, conclusions, and judgment entered on June 6, 1991. Specifically, Linda requested the court to modify James’ child support payment to include child care payments of $320 per month, to enable Linda to attend Career Beauty College to retrain for future employment.

On August 20, 1992, the District Court resumed the June 2, 1992, hearing and addressed the issue of Sari’s custody and Linda’s motion to amend the decree. The parties were unable to reach an agreement regarding custody prior to the resumption of this hearing. In an order entered on August 20, 1992, the court concluded that both James and Linda were fit parents and awarded them joint custody of Sari. The corut designated Linda as the primary residential custodian for the 1992-93 and 1993-94 school years. The court awarded James visitation with Sari for 60 days each summer, the 1992-93 and 1993-94 Christmas school holidays, and unlimited, but reasonable, phone calls.

Additionally, the court ordered that a custody evaluation shall be performed by Drs. Philip and Marcy Bornstein after the 1993-94 school year to determine if, ultimately, an altemating-school-year custody arrangement would be in Sari’s best interest.

Finally, the court determined that it is in all parties’ best interests that Linda obtain marketable skills. Accordingly, the court ordered James to pay Linda up to $50 per week to cover child care costs to enable Linda to attend school. The court ordered the original child support payments of $236 per month to continue as previously ordered.

On September 21, 1992, the District Court denied a motion by James for a new trial. James appeals.

I.

Did the District Court abuse its discretion when it designated Linda as the primary residential custodian for two years?

On appeal, James argues for several reasons that the District Court abused its discretion when it ordered Linda to have residential custody of Sari for two years. First, he contends that the court failed to adequately consider the best interest factors set forth in § 40-4-212, MCA. Second, James asserts that the court’s decision to award Linda residential custody of Sari for two school years was not supported by the testimonial evidence of the psychologists in this case. The Bomsteins recommended that Linda have primary custody for one school year.

Finally, James claims that Linda’s past conduct has not been in Sari’s best interest and that her actions have prevented Sari from bonding with her father. J ames contends that this lack of bonding has been detrimental to Sari, and he urges this Court to remedy the situation by reversing the District Court’s custody decision.

The standard of review in a child custody determination is well settled in Montana. When evaluating a district court’s decision, this Court will consider whether substantial credible evidence supports the court’s findings. In re Marriage of Jensen (1981), 192 Mont. 547, 552, 629 P.2d 765, 768. The findings will be sustained unless they are clearly erroneous. In re Marriage of Susen (1990), 242 Mont. 10, 13-14, 788 P.2d 332, 334. We will not substitute our judgment for that of the trier of fact. That is because the trial court is in a better position than the Supreme Court to resolve child custody issues. We will only overturn a lower court’s custody decision when there is a clear showing of an abuse of discretion. In re Marriage of Rolfe (1985), 216 Mont. 39, 44, 699 P.2d 79, 82.

Section 40-4-212, MCA, is central to child custody determinations. This statute requires the district court to determine custody in accordance with the best interest of the child. Section 40-4-212, MCA, sets forth a list of best interest factors for the district court to consider when determining custody. Pursuant to the statute, the court shall consider the parents’wishes; the child’s wishes; the child’s interaction with the parents and others; the child’s adjustment to home, school, and the community; the mental and physical health of all individuals involved; physical abuse or threatened physical abuse; and chemical dependency.

The list of best interest factors set forth in § 40-4-212, MCA, is not exclusive. This Court has recognized that when a lower court determines whether to award joint custody, as the court did in this case, the parents’ willingness to cooperate and the geographical proximity of the parents’ residences should also be considered. In re Custody and Support of B.T.S. (1986), 219 Mont. 391, 395-96, 712 P.2d 1298, 1301.

The district court must consider all of the statutory factors listed in § 40-4-212, MCA. In re Marriage of Converse (1992), 252 Mont. 67, 71, 826 P.2d 937, 939. However, the trial court is not required to make specific findings regarding each and every factor listed in § 40-4-212, MCA. Converse, 826 P.2d at 939.

As we stated in Converse, 826 P.2d at 939:

The custody determination must be based on substantial evidence relating to the statutory factors and [the evidence] must be set forth explicitly in the findings. The findings should, at a minimum, set forth the “essential and determining facts upon which the District Court rested its conclusion on the custody issue.” [Citations omitted].

Based on our review of the record, we conclude that the District Court acted in accordance with § 40-4-212, MCA, and considered Sari’s best interest when it made its custody determination.

The record reflects that the court (1) considered the statutory factors set forth in § 40-4-212, MCA, (2) addressed unlisted best interest factors, (3) made appropriate findings that are supported by substantial credible evidence, (4) set forth findings that explained the basis of the court’s decision, and (5) entered an independent judgment regarding Sari’s custody.

James argues that the District Court failed to consider Sari’s wishes regarding custody, as is required by § 40-4-212, MCA. James is correct that § 40-4-212, MCA, requires the court to consider the child’s wishes; however, his assertion that the District Court did not do so in this case is erroneous. Athough the court’s findings do not specifically refer to Sari’s wishes regarding custody, the record reveals that the court did examine the Bomsteins’ written evaluation which included evidence that they inquired into Sari’s custody wishes. They found that the child enjoys time with both parents; however she is “conflicted and fearful” about their disputes and “clearly uncomfortable in her perception that she must choose between her parents.” We conclude that the court did not err when it consulted the evaluators’ report to ascertain the child’s wishes. Moveover, we hold that the court satisfied all requirements of § 40-4-212, MCA.

We also conclude that the court did not err when it awarded Linda primary custody of Sari for two school years rather than the one year recommended by the Bomsteins.

Because of uncertainty about the location of James’ residence, and the court’s concern for offering Sari stability, the court implemented a longer-term plan than the evaluators had recommended. The court explained that it would award Linda primary residential custody for two years; however, after such time the court would “automatically go into much more father-directed custody.”

The court in this case relied on both the evaluators’ assessment and the court’s own independent analysis of the facts of the case to make its custody decision. The record reflects that the court’s custody decision was supported by substantial credible evidence and that Sari’s best interest was at all times the court’s primary concern. We conclude that there was no abuse of discretion.

II

Did the District Court abuse its discretion when it awarded James limited visitation rights?

On appeal, James contends that the District Court abused its discretion in its August 20,1992, order when it limited his visitation with Sari to the Christmas holidays and two months in the summer. James points out that, according to the June 1991 order, he was allowed to visit with Sari on one weekend a month during the time that she was in Linda’s custody. This was in addition to his having custody of Sari for one-third of the year and his right to visit Sari during the Christmas holidays and during two months of the summer.

James contends that the District Court did not act in accordance with § 40-4-217(3), MCA, when it denied him his existing right to visit Sari one weekend per month. Moreover, he contends that the court erroneously ignored the experts’ suggestion that James have visitation with Sari on all major holidays and extended weekends one time per month.

The effect of the District Court’s August 1992 order is that Linda will have primary custody of Sari for ten months of the year; and although James will be allowed to visit with Sari during the Christmas holidays and for two months of the summer, he will not be allowed to visit his child from September through mid-December. Nor will he be allowed visitation for the six months from January through mid-June.

We conclude that the August 1992 order does restrict the visitation rights that James was awarded in the June 1991 order.

Section 40-4-217(3), MCA, which pertains to visitation, provides: The court may modify an order granting or denying visitation rights whenever modification would serve the best interest of the child; but the court may not restrict a parent’s visitation rights unless it finds that the visitation would endanger seriously the child’s physical, mental, moral, or emotional health ....

In the case of In re Marriage of Firman (1980), 187 Mont. 465, 610 P.2d 178, we held that the district court abused its discretion when it restricted a parent’s visitation rights without first finding that the existing visitation arrangement seriously endangered the child’s physical, mental, moral, or emotional health.

Similarly, the District Court in the present case did not make a finding in its August 1992 order that the existing visitation schedule, which was ordered in June 1991, seriously endangered Sari’s physical, mental, moral, or emotional health. In fact, the court found to the contrary when it determined that Sari’s and James’ visitation with one another “substantially improved their relationship.”

The District Court made only one finding which served as the basis for its visitation decision in its August 1992 order. The court explained that “[bjecause of travel problems associated with the distance between the Mother and the Father, Father’s visitation should occur in blocks of time such as the Christmas holiday and summer visitation.” While travel problems may be a practical consideration, they are not a basis for the court’s restriction of visitation nor for its failure to comply with the requirements set forth in § 40-4-217(3), MCA.

We conclude that the District Court abused its discretion when it denied James the weekend visitation that he was allowed under the June 1991 order, particularly when the uncontroverted evidence was that such visitation, when practically possible, would be in Sari’s best interest.

Ill

Did the District Court err when it ordered James to pay Linda child care costs in addition to existing child support payments?

On appeal, James asserts that the District Court erred when it ordered him to supplement previously ordered child support payments with a separate child care payment of up to $50 per week. He claims that such an order was redundant. James asserts that he was excessively assessed under both the old and new versions of the Uniform Child Support Guidelines; and that there was no legal basis for the child care payment.

The standard of review for child support awards is whether the district court abused its discretion. In re Marriage of Nash (1992), 254 Mont. 231, 235, 836 P.2d 598, 601. Section 40-4-204, MCA, sets forth the factors a court must consider in setting support orders. This statute also directs the court to apply the uniform child support guidelines when determining support obligations.

Section 40-4-204(3)(a), MCA, provides in pertinent part:

Whenever a court issues or modifies an order concerning child support, the court shall determine the child support obligation by applying the standards in this section and the uniform child support guidelines adopted by the department of social and rehabilitation services pursuant to § 40-5-209, MCA.

On June 6, 1991, the District Court ordered James to pay Linda $236 monthly for the “support, care, maintenance and education” of Sari; the court entered its order in accordance with the Uniform Child Support Guidelines in effect in June 1991. The court did not address child care at that time because Sari was not enrolled in day care. The court specifically stated in its decree that Linda was unemployed and the court reserved the right to determine support issues with regard to both parties in the future.

Linda decided that once Sari started school, she would pursue further employment training. On July 21, 1992, she requested the court to amend its June 1991 decree regarding child support to provide for child care costs so that she could return to school.

On August 20, 1992, the District Court granted Linda’s request and ordered James to supplement the previous child support payment with a child care payment of up to $50 per week. The court acted in accordance with the child support guidelines in effect at the time of the court’s original June 1991 child support decree. The guidelines in effect in 1991 provided that the court should consider child care costs a supplement to child support. Rule 46.30.1525(1) through (l)(b)(i), ARM, effective July 13,1990.

In 1992, the child support guidelines were amended to combine child care costs with child support. Rule 46.30.1525(2), ARM, effective July 31, 1992. Under the new guidelines, when the District Court awarded child care costs of up to $50 per week, it effectively modified James’ child support obligation. The amendments became effective on July 31, 1992. The effective date of the amended guidelines was after Linda’s request for child care costs but before the court issued its findings, conclusions, and order regarding Linda’s request.

This Court recently held that district courts are to determine child support obligations according to guidelines in effect at the time that the court makes its decision. Paternity of W.L. (Mont. 1993), 855 P.2d 521, 50 St. Rep. 751, 752.

Therefore, we conclude that the District Court erred when it did not apply the child support guidelines in effect on August 20,1992, which was the date when the court made its decision regarding Linda’s request for child care costs. We remand this case to the District Court to redetermine child support and child care costs in accordance with the guidelines in effect on August 20,1992, the date of the court’s decision.

We affirm the District Court’s custody decision. However, we reverse the District Court’s judgment regarding visitation and child support and remand this case to the District Court for modification of its decree in conformity with this decision.

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

JUSTICE McDONOUGH, retired, did not participate in this opinion.