text:
    CAROL LAKEY, Claimant and Respondent, v. KERRIAN’S d/b/a Herbergers, Employer, and Safeco Insurance Company, Defendant and Appellant.
    No. 86-598.
    Submitted on Briefs May 22, 1987.
    Decided Aug. 18, 1987.
    741 P.2d 416.

      Jardine, Stephenson, Blewett & Weaver, Lon Holden, Great Falls, for defendant and appellant.
    Hartelius & Ferguson, Channing Hartelius, Great Falls, Utick & Grosfield, Norman H. Grosfield, Helena, for claimant and respondent.
   MR. JUSTICE GULBRANDSON

delivered the Opinion of the Court.

Safeco Insurance Company appeals a Workers’ Compensation Court order which awarded temporary total disability benefits to the claimant, Carol Lakey. The two issues on appeal are (1) whether substantial evidence supports the lower court’s finding that claimant’s knee condition is compensable, and (2) whether substantial evidence supports the court’s finding that claimant had not reached maximum healing. We affirm.

In July 1983, while working as a shoe salesperson at Herbergers Department Store in Great Falls, claimant suffered an injury to her right knee. The injury arose out of and in the course of claimant’s employment at Herbergers. She went to the Deaconess Hospital Emergency Room where hospital personnel took X-rays, prescribed an anti-inflammatory drug and recommended that claimant see an orthopedic surgeon.

In August 1983, orthopedic surgeon Dr. John Avery examined claimant’s knee and diagnosed the injury as a probable torn medial meniscus. On August 16, 1983, Dr. Avery performed a diagnostic and operative arthroscopy on claimant’s right knee. At that time, he found a torn medial meniscus (cartilage) and performed a partial meniscectomy on the knee. Claimant testified at trial that after surgery the pain in her knee decreased for four or five months and then started getting worse. She also testified that during the six months after surgery, the pain did not disappear completely. Dr. Avery saw claimant again in October 1983 and noted that her knee was essentially normal except for mild medial joint-line pain.

Dr. Avery next saw claimant in January 1985, when she went to him complaining or increased pain in her right knee. Dr. Avery again performed a diagnostic arthroscopy of claimant’s knee. He did not find the recurrent tear of the medial meniscus which he had suspected, but he did make a diagnosis of chondromalacia (a form of arthritis) of the right knee. Following the January 1985 arthroscopy, claimant continued to experience some pain in her right knee. She returned to work at Herbergers in March 1985 but experienced difficulty performing the tasks required of her job. Dr. Avery testified that claimant’s work, which involved kneeling and squatting, aggravated the chondromalacia to some extent. In March 1985, Dr. Avery calculated that under the American Medical Association guidelines and due to the meniscectomy on the right knee, claimant had a 10% partial permanent impairment of the right lower extremity which converted to a 4% partial permanent impairment of the whole person. In June 1985 apparently for the first time, Dr. Avery diagnosed chondrocalcinosis in claimant’s right knee. He stated that there is no permanent impairment in relation to either diagnosis of chondromalacia or chondrocalcinosis. The doctor also opined that both conditions predated the July 1983 injury. In November 1985, claimant resigned her job with Herbergers because of the pain in her right knee.

Although the insurer had paid temporary total disability benefits to claimant at times following her injury, a dispute developed between the insurer and claimant as to the extent of the former’s liability. The claimant filed a petition with the Workers’ Compensation Court to resolve the dispute and her case was heard in April 1986. The court found that claimant was entitled to temporary total disability benefits and this appeal followed.

The first issue is whether substantial evidence supports the lower court’s finding that claimant’s knee condition is compensable. This Court will not substitute its judgment for that of the Workers’ Compensation Court where there is substantial evidence to support that court’s findings of fact. Bremer v. Buerkle (Mont. 1986), [223 Mont. 495,] 727 P.2d 529, 43 St.Rep. 1942. The law in Montana is that,

“when claimants have preexisting conditions, that combined with their industrial accidents produce their disability, acceptable proof of disability is proof that it was medically possible for an industrial accident to aggravate a preexisting condition.” (Emphasis added.) Tocco v. City of Great Falls (Mont. 1986), [220 Mont. 221,] 714 P.2d 160, 164, 43 St.Rep. 310, 315; citing Viets v. Sweet Grass County (1978), 178 Mont. 337, 583 P.2d 1070.

The insurer insists that there is no evidence that claimant’s disabling pain in 1986 resulted from the July 1983 accident. The insurer relies heavily on Dr. Avery’s statement that claimant’s pain “apparently” did resolve after the August 1983 meniscectomy. We find little merit in these arguments. In this case, Dr. Avery repeatedly stated that it was possible that claimant’s July 1983 accident aggravated her preexisting conditions of chondromalacia and chondrocalcinosis. At one point, the doctor even stated that it was probable that the injury aggravated the two conditions. He explained that “the tear of the medial meniscus was torn at that time, which set up an irritative phenomena within the knee, and irritation set off or flared up these conditions, particularly the chondromalacia, I think.” Further, there is abundant evidence in the record that the pain in claimant’s knees, which prevents her from working as a shoe salesperson, is caused by chondromalacia and/or chondrocalcinosis. Dr. Avery agreed that the pain in this patient related to those two conditions. Finally, claimant stated that prior to the injury she had no problems with her knees and that since the injury, the pain has never gone away completely. Therefore, we affirm the decision that the claimant’s present knee condition is compensable.

The second issue is whether substantial evidence supports the lower court’s decision that claimant had not reached maximum healing. The insurer argues that under Section 39-71-116(19), MCA, claimant cannot have a temporary total disability because her injury had reached its maximum point of healing. The lower court disagreed and found that maximum healing had not been reached. The court correctly pointed out that Dr. Avery did not testify that maximum healing had been reached. Moreover, in April 1986, claimant testified that since August 1983, the pain in her knee has never gone away and has, in fact, gotten worse. We uphold the court’s determination that claimant had not reached maximum healing.

Affirmed.

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


source: Caselaw Access Project

author: MR. JUSTICE HUNT

license: Public Domain

text:
    DONALD D. CRISWELL, Plaintiff and Appellant, v. KEVIN BREWER and Mick McLeod, jointly and individually, Defendants and Respondents.
    No. 87-98.
    Submitted on Briefs June 4, 1987.
    Decided Aug. 18, 1987.
    741 P.2d 418.
    H.D. Buelow, Miles City, Huntley & Eakin, Baker, for plaintiff and appellant.
    Keefer, Roybal & Hanson; J. Dwaine Roybal, Billings, for defendants and respondents.
   MR. JUSTICE HUNT

delivered the Opinion of the Court.

Donald D. Criswell, plaintiff, appeals from an order of the Sixteenth Judicial District, Rosebud County, Montana, granting defendant, Kevin Brewer, summary judgment with prejudice.

We affirm.

The sole issue which we must address on appeal is whether the District Court erred in granting defendant Brewer’s motion for summary judgment.

Donald Criswell brought this action for injuries sustained as a result of a dog bite. The bite was received while Criswell was on the Hammond Ranch, which is owned by defendant Brewer. The ranch is located in a rural area outside of Forsyth, Montana.

Brewer hired Mick McLeod to live and conduct business as foreman for him on the ranch. For approximately eight years, McLeod and his wife lived in the ranch house on the Hammond Ranch. The McLeods own the dog which caused the injuries at issue. The dog had bitten someone approximately two years before the incident with Criswell. Brewer was aware of the earlier biting and provided materials to McLeod to build a fence and dog pen behind the ranch house. It was agreed that the dog would stay in the dog pen unless it was with McLeod. There was also a fenced enclosure surrounding the house. At the time of the attack, the fence around the house was apparently in disrepair with a section down or missing.

On April 30,1984, the date of the attack, Criswell was at the Hammond Ranch to read an electric meter and deliver a meter calendar as part of his job for Mid-Yellowstone Electric Company. Meters which were located in rural areas were read only once a year. The meter pole is located outside the fenced enclosure, but Criswell needed to go to the ranch home to deliver the calendar. The record shows that when he was approximately 15 feet outside the gate to the fence, the McLeod dog came around the house from the back, escaped through the gap in the fence and bit Criswell as he attempted to retreat to his car. Criswell states that he was aware of a “Beware of Dog” sign posted on the fence surrounding the house. The record does not disclose why the dog was out of the dog pen.

After being bitten, Criswell sought immediate medical treatment in Forsyth, Montana. Due to complications resulting from the wound, it was necessary for him to undergo surgery to relieve pressure on a trapped nerve.

Criswell filed a complaint against both Brewer and McLeod for his injuries and consequential expenses. Although McLeod is the acknowledged owner of the dog, Criswell maintains that Brewer was a “keeper” of the dog; that he was aware that the dog had previously bitten someone; and that he was therefore jointly responsible for the damages Criswell incurred.

Brewer filed a motion for summary judgment. His motion was granted by the District Court on the basis that there was no factual evidence to sustain the allegation that Brewer was the “keeper” of the dog.

From this order Criswell appeals.

In determining whether summary judgment is appropriate in this case, we must first determine whether there is a genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Rule 56(c), M.R.Civ.P. If there is a genuine issue as to any material fact, summary judgment is not appropriate. Summary judgment is never to be used as a substitute for trial if a factual controversy exists. Reaves v. Reinbold (Mont. 1980), [_ Mont. __,] 615 P.2d 896, 898, 37 St.Rep. 1500, 1502.

In the present case, Brewer owns the land upon which the dog bite occurred. He employed McLeod to work and do business for him on the ranch property as foreman. He was aware that McLeod had a dog and that the dog had previously bitten someone at least once in the approximately eight years in which it was kept on the ranch.

The District Court found that Brewer was not the “keeper” of the dog as described in 3A C.J.S. Animals Section 205(b), at 709-710:

“The keeper of an animal is one who, either with or without the owner’s permission, undertakes to manage, control, or care for an animal as owners are accustomed to do, or a person who exercises control over the animal on his premises with the knowledge of its presence.”

We agree. The facts in this case show that Brewer did not own, have possession of or “manage, control, or care for an animal as owners are accustomed to do . . .”

There is a duty of reasonable and ordinary care under the circumstances for landowners in Montana. Kaiser v. Town of Whitehall (Mont. 1986), [221 Mont. 322,] 718 P.2d 1341, 1343, 43 St. Rep. 846, 849. However, the record indicates that Brewer clearly met that duty.

We affirm the decision of the District Court.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, SHEEHY and McDONOUGH concur.


text:
    The FIRST NATIONAL BANK IN HAVRE, Plaintiff, Cross-Appellant and Respondent, v. ARNOLD E. NELSON, Defendant, Cross-Respondent and Appellant.
    No. 86-460.
    Submitted on Briefs Feb. 26, 1987.
    Decided Aug. 18, 1987.
    Rehearing Denied Sept. 10, 1987.
    741 P.2d 420.
    Morrison, Hauge, Ober, Young & Melcher, Stephen R. Brown, Jr., Havre, for plaintiff, cross-appellant and respondent.
    Thompson & Swenson, Bruce E. Swenson, Havre, for defendant, cross-respondent and appellant.
   MR. JUSTICE HUNT

delivered the Opinion of the Court.

This is an appeal and cross-appeal from an action on a promissory note brought before the Twelfth Judicial District Court in Hill County.

We remand for rehearing of the summary judgment proceeding.

The definitive issue on appeal is whether the District Court erred in granting partial summary judgment on the issue of liability.

The parties also raised the following issues not reached by this decision:

1. Did the District Court err in finding there was adequate consideration for this contract?

2. Did the District Court err in upholding the forced sale of certain interests in real property resulting from a mortgage foreclosure on a note signed by appellant and recorded before a declaration of homestead was filed by appellant’s wife as joint tenant and did it err in denying appellant’s motion for application of foreclosure proceeds?

3. Did the District Court err in granting certain pre-appeal attorney fees, paralegal fees and costs to the respondent?

First National Bank in Havre (hereinafter the Bank) brought this action to collect the amount due on a promissory note signed by defendant Nelson and to foreclose a mortgage securing repayment of the promissory note. The Bank had initially been a lender to Nelson’s adult daughter, Kay Pierson, owner of Pierson’s Parkway Grocery.

In May, 1984, Nelson signed the promissory note in favor of the Bank for the sum of $30,000. The Bank then distributed over $25,000 of the loan monies.

Pierson made payments on this distribution of $400 per month.

On February 6, 1985, Nelson signed an updated promissory note evidencing his indebtedness to the Bank in the amount of $25,326.59 and a mortgage securing repayment of the promissory note. The mortgage involved Nelson’s interest in his home in Lot 2, Block 1, Second Sunrise Addition, Havre, Hill County, Montana. This is the note at issue in this case.

Appellant Nelson contends that partial summary judgment was erroneously granted to the Bank on the issue of liability since he raised genuine issues of material fact which precluded summary judgment.

Unfortunately we do not have the transcript of the trial court’s proceedings on this issue for our reference as the tape was not re-tamed by the Clerk of Court. Appellant claims his answer to the complaint, along with two affidavits, supports the conclusion that genuine issues of material fact exist. He raises the issues of fraud and lack of consideration as affirmative defenses and argues that any allegations of violation of the parol evidence rule are inaccurate since fraud is an exception to the parol evidence rule.

In opposition, the Bank argues that fraud was improperly pleaded by appellant who therefore should not be allowed to use fraud as an affirmative defense nor parol evidence in the form of the two affidavits which bolstered the fraud claim. The Bank argues the District Court correctly excluded consideration of the defense and the affidavits.

For an allegation of fraud, the law requires a party to plead and prove nine elements. Krone v. McCann (1982), 197 Mont. 380, 642 P.2d 584. Those requisite elements are that there be: (1) a representation; (2) falsity of representation; (3) materiality of that representation; (4) speaker’s knowledge of falsity of representation or ignorance of its truth; (5) the speaker’s intent that it should be relied on: (6) the hearer is ignorant of the falsity of the representation; (7) the hearer relies on the representation; (8) the hearer has a right to rely on the representation; and, (9) consequent and proximate injury was caused by reliance on the representation.

The defendant’s answer attempts to plead fraud as an affirmative defense but fails to allege all of the above-mentioned nine required elements of fraud. The answer makes certain representations regarding the terms and nature of the promissory note. The trial court, however, found that fraud was not properly plead and proceeded to grant the plaintiff Bank’s motion for partial summary judgment. No transcript or record of the partial summary judgment proceedings is available for this Court upon appeal. A review of the remaining record on appeal indicates no amendment to defendant’s affirmative defense pleading of fraud was made at any later point.

Because of the missing record, we are unable to determine whether the defendant requested leave to amend his complaint and whether the court refused such a request. It appears an amendment would have been a simple, non-prejudicial way to eliminate the next question which was whether certain affidavits by defendant would cure his defective fraud pleading. This issue would not have arisen had the defendant been allowed to amend the complaint.

Rule 15(a), M.R.Civ.P. liberally permits a party to amend pleadings. A trial court may not unreasonably refuse to grant an application to amend a pleading. Section 310, Am.Jur.2d Pleadings at 297. A pleading may be amended provided that the original cause of action or ground of defense remains the same. Section 322, Am.Jur.2d Pleadings at 315. The purpose of this liberal amendment rule is to insure trial of all the issues on the facts of the case.

As a court of appeal, we cannot thus proceed beyond a determination of the summary judgment issue of law without a proper record. It is unfortunate that we must therefore remand this case to the District Court for rehearing on the issue of partial summary judgment with instructions to give full consideration of law to any motion to amend the fraud pleadings.

Because of our decision to remand this case on the issue of liability, we do not find it necessary to address the other issues raised by the parties at this time.

This case is remanded for rehearing in accordance with this Opinion.

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


author: MR. JUSTICE HARRISON MR. JUSTICE SHEEHY,

text:
    JEANNE MORLEDGE WHISTLER; Karl Morledge and Anita Morledge, husband and wife; Laura Morledge; and Lynn Morledge, Plaintiffs and Appellants, v. BURLINGTON NORTHERN RAILROAD COMPANY, a Delaware corp.; Steve Baker, in his official capacity as Superintendent of Building and Safety Dept., City of Billings, Montana; and Yellowstone County, Montana, Defendants and Respondents.
    No. 86-582.
    Submitted June 5, 1987.
    Decided Aug. 18, 1987.
    741 P.2d 422.

      MR. JUSTICE SHEEHY dissented and filed an opinion, in which MR. JUSTICE HUNT joined.
    Patten Law Firm, James A. Patten argued, Billings, for plaintiffs and appellants.
    Crowley Law Firm, Michael S. Dockery, Gerald Krieg argued, Billings, James Tillotson, City Atty., Harold Hanser, Co. Atty., Billings, for defendants and respondents.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

Plaintiffs appeal the denial of their application for a preliminary injunction entered by the District Court of the Thirteenth Judicial District in and for Yellowstone County. We affirm.

Plaintiffs (the “Morledges”) initiated this action to challenge the issuance of a building permit issued by Yellowstone County to the Burlington Northern Railroad. The permit was issued on February 6, 1986, and authorized construction of a 35,000 barrel diesel tank and excavation and site work for an accompanying retaining dike. The Morledges own land adjacent to the location of the fuel tank.

Burlington designed this fuel tank to facilitate the transportation of diesel fuel used in its everyday operations. The tank is located near the intersection of the Yellowstone and Powder River Pipelines. The Yellowstone Pipeline is a ten-inch line running east and west, originating in Billings, Montana and terminating in Moses Lake, Washington. Finished petroleum products are moved through this pipeline in ten day cycles, with separate batches of gasoline, distillate and diesel fuel transported in a patterned sequence during each cycle.

The Powder River Pipeline is a four-inch line running generally north and south, and was previously used to deliver crude oil to Laurel, Montana. The two pipelines intersect north of Laurel at a point named Alkali Creek Station.

For economic reasons, Burlington sought a way to transport diesel fuel from refineries in Billings to its Laurel railyards via pipeline rather than by railroad tank cars. Hence, Burlington designed a plan to transport fuel from the Billings refineries west through the Yellowstone Pipeline to Alkali Creek Station and then south to Laurel through the Powder River line.

However, because of the mismatched pipe diameters, the cycling of other products on the Yellowstone line and the amount of fuel to be transported, Burlington’s fuel could not pass directly from the Yellowstone to the Powder River line. Burlington therefore designed this fuel tank so that its fuel could be transported at high pressure along the Yellowstone line, directed into the fuel tank, and then repumped at a lower pressure into the Powder River line. By necessity with this design, this tank, in addition to orchestrating the change of flow of the fuel, would also have to store temporarily the fuel that would accumulate before it could all be repumped into the Powder River line.

With this design in mind, Burlington submitted its application for a building permit to construct the tank and related accessories. The property upon which Burlington sought to construct its tank is zoned Agricultural-Open Space (“A-O”) by the Yellowstone County Jurisdictional Area Zoning Plan.

Typically, this County Zoning Plan permits certain land uses within each particular zoning designation as well as certain other uses deemed accessory to the specified allowed uses. Under the terms of this Plan, pipelines are permitted uses within an A-0 zone. Liquid petroleum storage, on the other hand, is permitted as a primary use only in the Heavy Industrial Zone and in certain other (non A-O) zones pursuant to special exception.

Burlington submitted its building permit application on November 4, 1985. Upon initial review, the Zoning Coordinator and the City-County Planning Department determined the project was not permitted in an A-0 zone. Following this initial decision, Burlington and Continental Pipe Line Company (co-owner and operator of the Yellowstone line and owner and operator of the Power River line), through legal counsel, submitted a letter to the Zoning Coordinator. The letter contained additional factual information and legal authority supporting Burlington’s position that the fuel tank and associated facilities were permitted in an A-O zone. On December 23, 1985, a meeting was held to discuss the project and zoning issues, and shortly thereafter, the city-county zoning officials concluded this fuel tank was part of the pipeline and therefore permitted in an A-O zone. The county issued Burlington the necessary building permits and construction began.

The Morledges commenced this action in the District Court, requesting relief which included, inter alia, an order declaring the issuance of the building permit to Burlington arbitrary, capricious, an abuse of discretion and unlawful and an order permanently enjoining the construction of the fuel tank and retaining dike. In addition, the Morledges filed an application for preliminary injunction seeking to enjoin commencement or continuation of construction of the tank and its accessories. The District Court issued a show cause order regarding the preliminary injunction and set a hearing for March 13, 1986.

Following the hearing, the District Court denied the Morledges’ application for preliminary injunction. The parties later stipulated that the court’s findings and conclusions should be treated as final, thereby resolving the case on its merits before the District Court. Pursuant to the written stipulation, the District Court entered judgment denying the requests for all relief sought by the Morledges and dismissed their complaint with prejudice. The Morledges now appeal.

On appeal, appellants appear to present essentially two arguments. They first contend that the District Court erred in its conclusion that the zoning officials’ decision was lawful, regular and reasonable. Appellants instead insist that the zoning officials’ decision was arbitrary, capricious and an abuse of discretion. Second, appellants argue that as a matter of law, the District Court erred in its interpretation of the County Zoning Plan. Both arguments center upon the contention that this fuel tank, regardless of its stated purpose, will store fuel, and is therefore not permitted in an A-0 zone. Though the arguments are related, we will address each separately.

I

We are first asked to determine whether substantial, credible evidence supports the District Court’s conclusion that the zoning officials’ decision was lawful, regular and reasonable.

We initially note that when an administrative decision or order is reviewed by a district court, it is entitled to a rebuttable presumption in favor of the decision of the agency. Thornton v. Commissioner of the Dept. of Labor and Industry (Mont. 1980), [190 Mont. 442,] 621 P.2d 1062, 1064-65, 37 St.Rep. 2026, 2028. This rebuttable presumption is generally recognized in the zoning and planning context. See Gordon Paving Co. v. Blaine County Board of County Commissioners (1977), 98 Idaho 730, 731, 572 P.2d 164, 165. The Oregon Supreme Court, addressing the issuance of a building permit, stated in Murphy v. S.A. Hutchins & Associates Const. Co., Inc. (1972), 263 Or. 245, 501 P.2d 1273, 1275:

“[A] presumption of validity, regularity, and reasonableness accompanies the acts of the city officials charged with the enforcement of the ordinance.” [Citation omitted.]

The District Court correctly recognized this presumption. The burden of overcoming this presumption rests, of course, on the party attacking the administrative order. Thornton, 621 P.2d at 1065.

We next note that at the March 13 hearing, the District Court received relevant, evidence regarding the propriety of the decision-making process utilized by the zoning officials. The County Zoning Plan vests interpretation and enforcement of the Plan in a Zoning Coordinator. The Zoning Coordinator, in conjunction with the staff of the City-County Planning Department, is assigned the task of reviewing building permit applications to determine compatibility with the underlying zoning. Appellants do not contest that the proper officials made this decision.

Further, these officials reached their decision only after what the record reveals was a lengthy review of the underlying facts. As noted, the Zoning Coordinator and Planning Department initially denied Burlington’s permit. After Burlington and Continental challenged this denial via a letter written through counsel, the zoning officials again reviewed the entire project and conducted a meeting to discuss the relevant issues. Again, the District Court received ample evidence demonstrating that this decision was a considered one.

Finally, the District Court received evidence indicating that the decision itself was reasonable. Burlington introduced evidence illustrating the full measure of the project in question in support of its argument that this tank is permitted in an A-0 zone.

In short, we find the determination that this tank is a part of the pipeline was based upon a careful and conscientious review by the Zoning Coordinator and City-County Planning Department, the agent and agency vested with the discretion and authority to interpret the County Zoning Plan. The District Court’s determination that the decision of the Planning Department was lawful, regular and reasonable was based upon a full review of the decision-making process and the details of the project. The District Court’s conclusion is supported by substantial, credible evidence.

II

Appellants also argue that the District Court erred as a matter of law in its interpretation of the County Zoning Plan. They contend that under the terms of the Plan, liquid fuel storage in a tank, no matter how temporary or in what context, is not permitted in an A-0 zone. Appellants conclude that the District Court erred by not ruling that the express terms of the County Zoning Plan prohibit this tank in an A-0 zone.

We find that appellants’ argument presents too narrow and too rigid an interpretation of the zoning ordinance. It has been elsewhere established that since zoning laws and ordinances are in derogation of the common law right to free use of private property, such ordinances should be strictly construed. See e.g., Foster Village Community Ass’n v. Hess (1983), 4 Hawaii App. 463, 667 P.2d 850, 854; Specht v. City of Page (1981), 128 Ariz. 593, 627 P.2d 1091, 1095; Keller v. City of Bellingham (1979), 92 Wash.2d 726, 600 P.2d 1276, 1279. At the very least, such ordinances must be given a fair and reasonable interpretation with some regard given the proposed use.

As noted by the District Court, the County Zoning Plan does not contain any definition of “pipeline” decisive of the issue, nor are there any Montana statutes or decisional authorities which provide controlling guidance. Accordingly, the question fell to the zoning officials assigned to interpret and apply the zoning regulations consistent with the terms and purposes of the County Zoning Plan. These officials decided that pursuant to the County Zoning Plan, this fuel tank could be considered a part of the pipeline and is therefore permitted in an A-0 zone. We agree that when interpreting a zoning ordinance, considerable judicial deference should be accorded the interpretation provided by an officer charged with its enforcement. Keller, 600 P.2d at 1280.

The record supports the zoning officials’ interpretation. These officials impliedly found that this project was compatible with the nature of an A-O zone. The record supports such a finding. The primary purpose of this project was not liquid petroleum storage, but the facilitation of the transportation of diesel fuel. The storage that does occur is concededly brief, and the project does not present the typical fuel storage accessories, such as off-loading ramps and related traffic. In short, we find that the interpretation provided by those charged with the ordinance’s enforcement is not unreasonable. We find no error.

Affirmed.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES WEBER, GULBRANDSON and McDONOUGH concur.

MR. JUSTICE SHEEHY,

dissenting:

I dissent.

A 35,000 barrel tank sitting in the middle of a moat is exactly akin to any storage tank at any tank farm at any refinery in Montana. It mocks the zoning plan to assume such a tank is merely a part of a pipeline.

I cannot accept the purported logic of the majority that the primary purpose of the tank is not storage but the transportation Pf fuel. The primary purpose is indeed storage — storage until the fuel can be taken through a lesser pipeline to another location. In that use, again the storage tank is akin to any fuel storage tank.

These are strange days. The federal government names nuclear arms as peacemakers. Grocery stores sell turkey as ham. In Montana, a 35,000 barrel surface fuel tank is a buried pipeline. The law is a farce when words mean nothing and everything.

MR. JUSTICE HUNT concurs in the foregoing dissent of MR. JUSTICE SHEEHY.

FOOTNOTES

      . The County Zoning Plan provides that any person aggrieved by a decision of the Zoning Coordinator may appeal to the County Board of Adjustment. The Morledges chose, instead, to appeal directly to the District Court. Burlington did not contest this strategy.

      . A board of county commissioners is, of course, entitled to appoint officers to supervise the provisions of a zoning ordinance. Section 76-2-210(2), MCA.


author: MR. JUSTICE GULBRANDSON

text:
    In re the MARRIAGE OF JULIE J. GERLEMAN, Petitioner and Appellant, and GARY L. GERLEMAN, Respondent and Respondent.
    No. 87-83
    Submitted on Briefs June 4, 1987.
    Decided Aug. 19, 1987.
    741 P.2d 426.
    Hull & Sherlock, David N. Hull, Helena, for petitioner and appellant.
    J.C. Weingartner, Helena, for respondent and respondent.
   MR. JUSTICE GULBRANDSON

delivered the Opinion of the Court.

Julie Gerleman appeals a Lewis and Clark Cpunty District Court order which denies her motion to set aside the property settlement in this dissolution of marriage case. The issue on appeal is whether the court erred in denying her motion where she agreed to the property settlement without knowing the value of certain assets of the husband, respondent Gary Gerleman, or that those assets formed part of the marital estate. We affirm.

In November 1975, the parties were married in Helena, Montana. In March 1984, following marital difficulties, the parties signed a “Custody, Support and Property Settlement Agreement.” They apparently reached agreement as to division of their marital assets after consulting with counselors at a Family Teaching Center. The agreement divided the marital assets between the parties. The agreement states that each of the parties warranted that there had been a full disclosure of assets. An attorney prepared the agreement but neither party received advice from an attorney. In April 1984, the District Court issued its order dissolving the marriage and incorporated the agreement as part of the decree.

Section 40-4-201, MCA, provides for the type of agreement the parties executed. That statute provides in part:

“(1) To promote amicable settlement of disputes between parties to a marriage attendant upon their separation for the dissolution of their marriage, the parties may enter into a written separation agreement containing provisions for disposition of any property owned by either of them, maintenance of either of them, and support, custody, and visitation of their children.
“(2) In a proceeding for dissolution of marriage or for legal separation, the terms of the separation agreement, except those providing for the support, custody, and visitation of children, are binding upon the court unless it finds, after considering the economic circumstances of the parties and any other relevant evidence produced by the parties, on their own motion or on request of the court, that the separation agreement is unconscionable.”

In November 1986, the wife moved to set aside the child support and property settlement provisions of the divorce decree. She alleged the husband had committed fraud and/or misrepresentation at the time the agreement was executed. She complained that she was not informed of the husband’s retirement program, his stock shares in the company he worked for, or his actual income. The parties have stipulated that, at the time of the dissolution, the District Court was not aware of the husband’s actual income, retirement program or stock shares.

In December 1986, the District Court ruled against the wife, dedined to change the property settlement and held that Gary had not committed fraud or misrepresented his assets or income. This appeal followed.

The provisions of a property settlement may be modified under Section 40-4-208, MCA. This Court recently stated:

“The court may relieve a party under Section 40-4-208(3) (b), MCA from a final judgment or order for mistake, inadvertence, surprise, excusable neglect, newly discovered evidence, intrinsic and extrinsic fraud, misrepresentation, misconduct, and ‘any other reason justifying relief from the operation of the judgment.’ Rule 60(b], M.R.Civ.P.” (Citation omitted.]

In Re Marriage of Lorge (Mont. 1984), [207 Mont. 423,] 675 P.2d 115, 118, 41 St.Rep. 50, 55.

The wife asserted that she had been misled as to the husband’s income, his retirement program and fund with his employer and his shares of stock in his employer company. The District Court addressed the allegations of fraud and misrepresentation and stated:

“[W]hen Julie’s motion was heard on December 18, 1986, she testified that she knew that Gary was making $36,000 per year at the time and which she concedes was his actual income. She testified that the parties used his base rate of $26,000 per year for the purpose of negotiating the agreement, which did not include the amount he had made for overtime work. However, she testified several times that she knew what his actual income was .... [W]hen she took the stand, Julie testified that when the agreement was negotiated, she knew he had a retirement program and a retirement fund with his company, American Telephone and Telegraph Company and that she knew that he had shares of stock in that company . . . Julie also had retirement benefits from her job which she received. Gary took his and she took hers.” (Emphasis in original.) The court concluded that there was no fraud or misrepresentation and that the agreement was not unconscionable.

The wife does not challenge the court’s findings of fact. Given those findings (that the wife knew of the assets and the income), we affirm the court’s denial of the wife’s motion.

The wife’s principal complaint is that the lower court approved the property settlement agreement (as it was required to do under Section 40-4-201, MCA, upon finding that the agreement was not unconscionable) without knowing of the existence of the disputed items, which were properly part of the marital estate. Appellant overlooks the fact that in December 1986, when the court was aware of the disputed items, the court still found that there was nothing on the face of the agreement which makes it appear to be unconscionable. Moreover, substantial evidence supports the finding that there was no fraud nor misrepresentation. We defer to the District Court’s ruling.

Affirmed.

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


author: MR. JUSTICE WEBER

text:
    LAWRENCE E. WALKER and Darlene E. Walker, Plaintiffs and Appellants, v. MAURICE A. WARNER, JR., Defendant and Respondent.
    No. 87-111.
    Submitted on Briefs July 14, 1987.
    Decided Aug. 19, 1987.
    740 P.2d 1147.

      Wellcome, Frost & Bartlett, Albert A. Frost, Bozeman, for plaintiffs and appellants.
    Robert Kolesar, Bozeman, for defendant and respondent.
   MR. JUSTICE WEBER

delivered the Opinion of the Court.

The District Court for the Eighteenth Judicial District, Gallatin County, found Mr. Warner in contempt of court for failing to comply with a judgment ordering the parties to abide by a settlement agreement. The agreement established the Walkers’ right to control the level of a pond which Mr. Warner complained was causing flooding on his property. We affirm.

The issues are:

1. Did the District Court err in finding Mr. Warner in contempt?

2. Did the District Court err in failing to grant Mr. Warner injunctive relief?

3. Did the District Court err in assessing costs against Mr. Warner?

Mr. Warner also argues that the Walkers’ notice of appeal was untimely filed. Since the Walkers’ brief does not raise any new issues on cross-appeal, that issue need not be discussed.

The Walkers and Mr. Warner are neighbors. Their subdivision formerly included four ponds, for aesthetic purposes. Water from the ponds caused a leakage problem in Mr. Warner’s basement. This became one subject of an action previously appealed to this Court. See Haugen Trust v. Warner (1983), 204 Mont. 508, 665 P.2d 1132. After that action was remanded to District Court, the parties reached a settlement agreement whereby two of the ponds would be filled in and Pond 3 would be supplied with water and drainage through the use of culverts and pipes to be installed at shared expense. Specifically, the agreement provided:

“6. All the parties agree that a discharge culvert will be installed as the outlet from Pond Number 3 to Pond Number 4 (which is located north of Number 3). Said culvert will be installed within the 10 foot easement as set forth in the covenants (Section III, Subsection I) under the road known as Mallard Lane and will be the same size as the culvert currently used as the discharge culvert from Pond Number 3. Larry Walker shall be entitled to control the water level in Pond Number 3 by adjusting the inflow and outflow of said pond.
“7. All the parties agree to install a 12 inch underground pipe from Dry Creek along the path of the previous ditch located on the north side of Lot 3 (Block 9, Middle Creek Meadows Subdivision #3) to the existing concrete divider box, and from said divider to Pond #3 to serve as a water supply conduit. Walker shall maintain said pipe and control the flow of water therein.”

In a judgment nunc pro tunc, the court ordered the parties to comply with the provisions of their agreement.

The rerouting of waters through the pipe system was completed. Some of the pipes lay under Mr. Warner’s property. The Walkers chose not to use additional water available to supply the pond, from the “Haugen ditch.” Because of a disagreement among the parties as to the necessary height of the exit pipe from Pond 3 to Pond 4, the pipe was lowered and then raised again. Then the Walkers determined that in order to maintain adequate water depth in Pond 3, they needed to partially block the flow of water to its other destinations at the culvert where it was diverted from Dry Creek and in the concrete divider box. They placed boards in these places, to block the flow of water. The boards caused back pressure producing wet spots on Mr. Warner’s property. Mr. Warner spoke with Mrs. Walker about the problem, but they did not arrive at a mutually satisfactory solution. Each time the Walkers would place boards at the culvert or in the divider box, Mr. Warner would remove them.

Mr. Warner’s repeated removal of the boards led to this suit, in which he was accused of contempt of court for refusing to honor the Walkers’ right to control the water level in Pond 3. The Walkers also complained of stagnation in the pond and asked that Mr. Warner be enjoined from interfering with their control of the flow of water through the system. Mr. Warner counterclaimed for damages to his property caused by misuse of the water level controls. He requested an injunction prohibiting the Walkers from interfering with the culvert serving Pond 3. After 2 days of trial, the District Court viewed the property. Mr. Warner was found guilty of contempt, was assessed a $500 fine, and was ordered to pay the Walkers’ court costs. The court concluded that the stagnant conditions in the pond were caused by the Walkers’ refusal to use the Haugen ditch water to help fill the pond, not by any action of Mr. Warner’s.

I

Did the District Court err in finding Mr. Warner in contempt?

Mr. Warner argues that the system of pipes and culverts has engineering and operational shortcomings which became apparent shortly after installation. He asserts that he should not be held in contempt for his efforts to protect his property and to remedy these shortcomings within the few months following installation of the system.

Under Section 3-l-501(l)(e), MCA, it is a contempt of the authority of the court to act in “disobedience of any lawful judgment, order, or process of the court.” The District Court’s judgment nunc pro tunc requires the parties to abide by the settlement agreement, which allows the Walkers to control the pipeline system supplying water to Pond 3.

Mr. Warner admitted at the hearing that he removed the boards the Walkers placed to control the water level in Pond 3, and that he knew he was interfering with the Walkers’ right to control the water level. Although it is conceded that the system has intrinsic problems, nothing in the agreement or in the court’s order to comply with the agreement gave Mr. Warner the authority to correct these problems; control was clearly given to the Walkers. The District Court entered extensive findings demonstrating that it had considered this issue in depth. We conclude that the District Court did not err in finding Mr. Warner in contempt.

II

Did the District Court err in failing to grant Mr. Warner injunctive relief?

Mr. Warner argues that the Walkers’ use of boards to block the flow of water causes wet spots on his property and constitutes a temporary continuing nuisance. He suggests that the water level in the pond should be controlled through the use Of Haugen ditch water, lowering the boards in the divider box, unblocking the culvert from the divider box to Pond 4, and reinstalling the pipe from Pond 3 to Pond 4. His proposal, he says, would not cause water seepage and saturation on his property, yet would allow maintenance of the proper water level in Pond 3. He asked the District Court to enjoin the Walkers from allowing the water level in the divider box to rise above a certain level and from blocking Dry Creek during November, December, January, and February. The court did not grant any such injunction.

The District Court found that “[a]ny water spots on Warner’s property should be only temporary,” in the opinion of the builder of the water system, Ray Johnson. Mr. Johnson also testified and the court found that the water would back up toward Mr. Warner’s property, but not enough to be significant. A civil engineer testified, and the court found, that it was necessary to block the creek to get a water flow into Pond 3 and that if the boards were removed, the flow through the pipes reversed and the pond began to drain. The court found that the area in which water spots occur “is a hundred yards or more from the Warners’ residence and maintained grounds.” The court concluded that the consequences of the actions necessary to maintain an adequate water level in Pond 3 is “slight leakage at the joints of the underground culvert and small wet spots on the surface of defendants’ property,” and that “[tjhese wet spots are not significant, do not interfere with defendant’s use of his property and may, in time, disappear.”

After reviewing the record, we conclude that the District Court’s findings are supported by the testimony presented. Findings supported by substantial evidence will not be overturned. The District Court’s conclusions as to the insignificance of the wet spots are not clearly erroneous, based upon the record. We hold that the District Court did not err in denying Mr. Warner injunctive relief.

Ill

Did the District Court err in assessing costs against Mr. Warner?

Mr. Warner maintains that under State ex rel., Foss v. District Court (Mont. 1985), [216 Mont. 327,] 701 P.2d 342, 42 St.Rep. 845, costs should be taken out of the fine levied against the contemnor. He states that the $500 fine should be a part of, not in addition to, the $1,566.15 in costs awarded to the Walkers. Actually, the statement in Foss is that costs allowed in the court’s discretion under Section 25-10-103, MCA, are limited to those which can be taken out of the fine levied against the contemnor. Foss, 701 P.2d at 346. As the Walkers correctly point out, costs could be awarded to them under either Section 25-10-103, MCA, or under Section 25-10-101(6), MCA, because this was an action for an injunction. The District Court’s order does not state under which statute it took its authority to award costs. We must assume that the court correctly took its authority and calculated the judgment amount under Section 25-10-101(6), MCA.

The Walkers ask that they be awarded their costs and attorney fees incurred on appeal. Costs on appeal of a civil case are automatically awarded to the successful party under Rule 33, M.R.App.Civ.P. The Walkers assert that they are entitled to their attorney fees under Section 70-17-112(2), MCA, because this is an action to stop an encroachment on an easement. They also maintain that they are entitled to attorney fees under a provision in the subdivision’s protective covenants. That provision provides for attorney fees in successful actions to enforce the covenants.

The District Court did not conclude that Mr. Warner’s actions constituted an encroachment on an easement or a violatioñ of the restrictive covenants. The problems with the ponds would be best resolved if the parties ironed out their differences in a spirit of cooperation among themselves, rather than resorting to litigation. Costs on appeal are awarded to the Walkers, and each party shall pay its own attorney fees.

Affirmed.

MR. JUSTICES HARRISON, HUNT, SHEEHY and GULBRANDSON concur.


author: MR. JUSTICE SHEEHY

text:
    WES SPRUNK, Plaintiff and Appellant, v. FIRST BANK WESTERN MONTANA MISSOULA and First Bank System, a registered bank holding company, DEFENDANTS and Respondents.
    No. 87-32.
    Submitted on Briefs June 18, 1987.
    Decided Aug. 19, 1987.
    741 P.2d 766.

      Rossbach & Whiston, William A. Rossbach, Missoula, for plaintiff and appellant.
    Garlington, Lohn & Robinson, George Goodrich, Missoula, Murphy, Robinson, Heckathorn & Phillips, James A. Robischon, Kalispell, for defendants and respondents.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

Wes Sprunk appeals an order of summary judgment entered against him and in favor of First Bank Western Montana Missoula by the District Court, Fourth Judicial District, Missoula County. We affirm the order of the District Court.

Wes Sprunk owned an automobile dealership in Missoula, Montana from 1973 to 1982. He was backed in this business by First Bank Western Montana Missoula, which had a floor plan financing arrangement with him in addition to its financing of Sprunk’s customer retail installment contracts and Sprunk’s own personal and business loans. This arrangement appeared to be mutually satisfactory until 1979 and 1980, when the automobile industry was hit with increased gas prices, a change in the market to smaller cars, and increased interest rates. The concomitant drop in profits for banks involved in floor planning and financing retail purchases caused the First Bank System, parent company for First Banks throughout this region, to reassess its “total credit exposure to automobile dealers.”

Despite the general economic recession' and the down-turn in the automobile industry, Sprunk believed he would weather the bad times, and the Bank appeared to support him in this belief. In October, 1980, Sprunk refinanced his existing debt with the Bank by obtaining a $500,000.00 guaranteed loan from the Small Business Administration (SBA]. The SBA guaranteed 90% or $450,000.00 of the $500,000.00 loan. However, once this guaranty was obtained from SBA, Bank officers began pressuring Sprunk to liquidate his dealership. Sprunk hired a Seattle attorney who specialized in work-outs and began negotiating with the Bank. Sprunk’s goal was to restructure his business by selling his prime real estate on the Highway 93 “strip” in Missoula, and relocating to a smaller business location downtown.

After a year of negotiations, Sprunk and the Bank worked out a tentative agreement in April, 1982. In this draft agreement, Sprunk acknowledged his debts in excess of one million dollars to the Bank and agreed to sign over deeds to his Missoula and Lake County real estate as well as some personal property located in Lake County, in exchange for the Bank’s discharge of his business indebtedness. The draft agreement also provided for the Bank’s continued floor plan financing for Sprunk, contingent upon Sprunk’s timely payments on his debts. On April 28, 1982, Sprunk executed deeds in lieu of foreclosure conveying his Highway 93 auto dealership property to the Bank.

The next sequence of events is disputed by the parties. Sprunk claims the Bank,, having induced Sprunk to deed over his prime real estate and to reaffirm his personal guaranty on the SBA loan, now began pressuring him to voluntarily liquidate or be forced into foreclosure. The Bank claims that negotiations between the parties “broke down” for reasons not relevant to this appeal. In either event, the end product was an agreement entered into by Sprunk and the Bank on May 27, 1982. The agreement stated that the Bank and SBA agreed to accept deeds in lieu of foreclosure, on Sprunk’s Missoula and Lake County real property in exchange for the discharge of Sprunk’s indebtedness to the Bank. The agreement stated in relevant part:

“(3) Sprunk understands that the real properties conveyed to Bank will be owned and held by Bank for its account and the account of a Guarantor, United States Small Business Administration, “SBA”, and that he has no further interest therein and has absolutely and forever foregone any and all right or claim in and to said property, including any right or equity of redemption, and that all rights of Sprunk in and to said property are cut off and released by the execution of deeds to Bank and that no further interest in or right to said property remains in Sprunk.
“Sprunk further understands that a potential liability remains, as to SBA, under an October 9,1980 Promissory Note in favor of Bank, and his Guaranty, in favor of SBA, as reaffirmed, and that if a deficiency results from the sale of the real property in which SBA has an interest, a potential claim against Sprunk, as such Guarantor could be asserted by SBA. This Agreement is not meant to resolve any such potential claim by SBA, or any defenses or claims of Sprunk relating thereto.
“(10) Sprunk desires to be released from personal guarantys given to Bank by Wesley G. Sprunk guaranteeing the obligations of Sprunk corporations to Bank. In order to induce Bank to release such guarantys, Sprunk warrants and represents that his financial condition is such that such guarantees are essentially uncollectible and that neither he nor his corporations have any assets (except as needed for ongoing living needs and expenses), including bank accounts, or stock or bond investments which would support such guarantys. In reliance upon such representations, Bank agrees that as soon as matters relating to factory “buy-backs” and collection of receivables assigned to Bank have been resolved, but not later than September 1, 1982, if Sprunk is then in compliance with the terms of this Agreement, all liabilities of Sprunk to Bank shall be considered fully discharged and satisfied (with the sole exceptions of the potential liability in favor of SBA, as to ninety percent (90%) of the October 9, 1980 promissory note above described and those obligations specified in Paragraph (11), below). The obligations of Sprunk and Bank to comply with the terms of this Agreement shall survive such discharge. Except for the performance of things undertaken by each party hereto under the terms of this Agreement, and subject to the September 1, 1982 date above described as to release of Sprunk guarantees, each party releases the other from any claims which either might have against the other. This release does not affect the claims of SBA against Sprunk nor defenses or claims of Sprunk against SBA.”

Sprunk now claims this release agreement is void because he was induced to enter into it by the Bank’s fraudulent misrepresentations. He argues the Bank pressured him into signing the agreement by overstating the debt he owed it and overstating the losses it was suffering as a result of the liquidation. On March 1, 1984, Sprunk filed a complaint against the Bank alleging a bad faith breach of fiduciary duty, and actual and constructive fraud.

On December 21, 1984, the Bank filed its first motion for summary judgment, contending the May 27, 1982 agreement released the Bank from all claims brought by Sprunk. The District Court denied this motion on the grounds that “a genuine issue of material fact might exist as to the validity of the Agreement and the possibility of fraud in its procurement.” After further discovery, the Bank filed a second motion for summary judgment April 30, 1986. This motion was granted by the District Court and judgment was entered in favor of the Bank September 23, 1986. Sprunk moved to vacate the judgment October 6, 1986, such motion being denied by the District Court. Sprunk now appeals on the following issues:

1. Whether summary judgment was properly granted in an action for fraud?

2. Whether the District Court erred by placing the burden of proof on Sprunk, as the party opposing the motion for summary judgment, of putting forward and proving a material fact issue of actual and constructive fraud?

3. Whether the District Court erred by refusing to consider the post-judgment affidavit of Sprunk’s Seattle attorney and by deeming Sprunk to have constructive knowledge of what the Seattle attorney may have known but not communicated to Sprunk?

The first two issues raised by Sprunk question whether the District Court erred in granting summary judgment and in placing the burden of proof on the parties. Sprunk argues the District Court erred by deciding questions of fact, and by requiring Sprunk to prove his allegations of fraud rather than merely assert them.

The party seeking summary judgment is entitled to judgment when the record discloses no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P.; Mayer Bros. v. Daniel Richard Jewelers, Inc. (Mont. 1986), [223 Mont. 397,] 726 P.2d 815, 816, 43 St.Rep. 1821, 1823. The initial burden rests with the moving party to establish that the evidence raises no genuine issue of material fact. Id. If this burden is met, the burden then shifts to the party opposing the motion to show by presenting facts of a substantial nature that a material factual issue does exist. Id. The opposing party must set forth specific facts showing there is a genuine factual issue for trial. Rule 56(e), M.R.Civ.P.

In this instance, Sprunk filed a complaint against the Bank for actual and/or constructive fraud. The Bank first moved for summary judgment on the grounds that Sprunk had voluntarily entered into an agreement releasing all his claims against the Bank. Sprunk responded that the Bank had fraudulently induced him to sign the release by making material misrepresentations as to the size of Sprunk’s debt to the Bank. Sprunk maintained the Bank told him he owed it in excess of $1,500,000.00 when in actuality, that sum was reduced by $450,000.00 which the SBA had paid the Bank as guarantor on Sprunk’s SBA loan. In its first opinion and order denying the Bank’s motion for summary judgment, the District Court noted that “[t]he majority of facts of the present case are undisputed.” However the court found “that a genuine issue of material fact might exist as to the validity of the Agreement and the possibility of fraud in its procurement.”

Discovery continued on the issue of the validity of the release agreement, and on April 30, 1986, the Bank filed its second motion for summary judgment. The Bank attached to its brief in support of the motion a copy of a letter dated March 3, 1982 from counsel for the SBA to President Leland of First Bank Western Montana Missoula. The letter was carbon copied to counsel for the Bank and Sprunk’s Seattle attorney. In the letter, the SBA attorney advised President Leland that a conference call involving himself, Wes Sprunk, and Sprunk’s attorney was held concerning Sprunk’s reaffirmation of the SBA loan. The letter stated in pertinent part, “SBA has honored its guaranty of the $500,000 loan and this in the amount of 90%. At least that amount of the guaranty remains intact.” While the Bank conceded Wes Sprunk personally may not have been aware of the SBA payment, it argued that Sprunk’s counsel who received the March 3, 1982 letter did know of the payment. The Bank also stated it had never denied being paid by the SBA, or had ever made any positive assertion that it had not been paid. The Bank also noted, in its reply brief, that the April, 1982, draft agreement acknowledged Sprunk’s indebtedness to the Bank and SBA. Sprunk continued to assert he knew nothing of the SBA’s payment to the Bank, and that he had signed the release agreement based on a misrepresentation of how much money he owed and to whom he owed it.

The essence of Sprunk’s argument is that he signed a release in favor of the Bank in total ignorance of his liabilities to the Bank. He defends his ignorance on the grounds the Bank misrepresented his debt to it. We find the record does not support his allegations of fraud or misrepresentation.

A release may be set aside if it was obtained fraudulently or without adequate consideration. Krusemark v. Hansen (Mont. 1981), [_ Mont. __,] 627 P.2d 1202, 1205, 38 St.Rep. 594, 598. Fraud can never be presumed but must be proved by a preponderance of the evidence; mere suspicion of fraud is not sufficient. Poulsen v. Treasure State Industries, Inc. (Mont. 1981), [_ Mont. -,] 626 P.2d 822, 825, 38 St.Rep. 218, 221. In order to bring the question of fraud before a trier of fact, the party alleging fraud must make out a prima facie case on the following elements:

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

Brown v. Merrill, Lynch, Pierce, Fenner & Smith, Inc. (1982), 197 Mont. 1, 11, 640 P.2d 453, 458.

Even drawing all reasonable inferences in favor of Sprunk, as the party opposing summary judgment, we do not find he has made out an issue of material fact for fraud. Although he has alleged the Bank misrepresented the total Sprunk debt, he has not set forth any specific false representations made by the Bank. In fact, the financial statements estimating Sprunk’s liabilities, the draft release agreement and the final May 27 release all cite the SBA loan as a separate debt. Sprunk was involved in the conference call in which reaffirmation of the SBA loan was discussed, and Sprunk in fact reaffirmed it. The language in the May 27 release stated that Sprunk was conveying his property to the “Bank and SBA”, that the property would be “held by [the] Bank for its account and the account of a Guarantor, United States Small Business Administration,” and that:

“a potential liability remains, as to SBA, under an October 9, 1980 Promissory Note in favor of the Bank, and his Guaranty, in favor of SBA, as reaffirmed, and that if a deficiency results from the sale of the real property in which SBA has an interest, a potential claim against Sprunk, as such Guarantor could be asserted by SBA. This Agreement is not meant to resolve any such potential claim by SBA, or any defenses or claims of Sprunk relating thereto.”

Assuming the Bank was pressuring Sprunk with ultimata to voluntarily liquidate or be foreclosed, we question whether Sprunk relied or had a right to rely on the Bank’s “ultimatums.” Sprunk was well aware of the huge debt load he was carrying in trying to keep his business afloat. With the assistance of experienced counsel, he had negotiated with the Bank for over a year in an effort to restructure his business. The option of liquidation appears in the record months before the May 27 release was signed. The general rule is that a defrauded party has a right to rely on another’s representations when the parties are not on equal footing. Brown v. Merrill, Lynch, Pierce, Fenner & Smith, Inc., 197 Mont, at 12, 640 P.2d at 459. While it is arguable debtors and creditors are never on equal footing, the evidence in this case does not disclose two parties with unequal bargaining power.

The third issue raised by Sprunk is whether the District Court erred by refusing to consider the post-judgment affidavit of Sprunk’s Seattle attorney that Sprunk should not be charged with constructive knowledge of what his attorney knew regarding the March 3, 1982 letter from the SBA to the Bank. Our review of the District Court’s opinion and order on Sprunk’s motion to vacate judgment shows that the court did consider the attorney’s affidavit. The Seattle attorney, by affidavit, did not dispute he had received the March 3 letter; he did state neither he nor Sprunk understood the SBA had actually paid the Bank at that point. This affidavit does not add extra weight to Sprunk’s allegations that the Bank misrepresented his debt load. Whether the SBA paid in February, March or later does not change the language of the release in which Sprunk acknowledged his debts to the Bank and the SBA. We find no merit in this issue.

The judgment of the District Court is affirmed.

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


author: MR. JUSTICE SHEEHY MR. JUSTICE WEBER,

text:
    DEAN POLLARD and Pollard Finance Corporation, Plaintiffs and Appellants, v. CITY OF BOZEMAN, Gallatin County Tax Assessor’s Office, the County of Gallatin, and Does I through XX, Defendants and Respondents.
    No. 87-01.
    Submitted on Briefs June 4, 1987.
    Decided Aug. 20, 1987.
    741 P.2d 776.

      Jerry R. Bechhold, Bozeman, for plaintiffs and appellants.
    A. Michael Salvagni, Co. Atty., Landoe, Brown, Planalp, Kommers & Johnstone, Robert Planalp, Bozeman, for defendants and respondents.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

Plaintiff-Appellant Pollard Finance Corporation (Pollard) appeals an order of the District Court of the Eighteenth Judicial District, Gallatin County, granting defendant/respondent City of Bozeman’s motion for summary judgment.

The City of Bozeman (City) entered an agreement with Pollard Finance in November 1981 for the construction and lease of a vehicle storage building on City-owned land. The agreement provided that in consideration for construction and use the City would pay Pollard rent in the amount of $2,888 per month for five years with options to renew the agreement for three additional five year periods. The agreement included an option to purchase throughout the term of the lease, with a provision that after 20 years of leasing the City could purchase the building for $10.00.

The City apparently occupied the building in March 1982. In 1984 Pollard received notice that taxes had been assessed against the building and were owing. Pollard responded by filing a complaint for declaratory relief, attorneys’ fees and damages, asserting that the City had, by the terms of the lease agreement, purchased the building and that he was not responsible for taxes assessed against it. His argument before the District Court relied primarily on a citation of this Court’s dicta in Hunter v. City of Bozeman (Mont. 1985), [216 Mont. 251,] 700 P. 2d 184, 42 St.Rep. 784 where, in referring to the same building at issue here, it was said:

“There is substantial credible evidence to support the finding by the trial court that the ‘lease’ was in fact a sale of the building to the City and that this was in effect a public works project.”

Id. at 187, 42 St.Rep. at 787.

Pollard did not respond to the City’s argument, contained in its motion for summary judgment, that the lease clearly and unambiguously provided that Pollard was the owner of the building. The City also distinguished Hunter as addressing only the issue of prevailing wage rates, not ownership. The District Court agreed with the City’s assertions and granted its motion for summary judgment.

Pollard raises seven issues on appeal, three of which we will not address because they were not discussed at the trial court level. State v. Armstrong (1977), 172 Mont. 296, 562 P.2d 1129.

The remaining four issues can be consolidated as follows:

1. Did the District Court err in finding that Pollard was the owner of the building under the terms of the lease for purposes of assessment of taxes?

2. Did the District Court properly award the City of Bozeman attorney fees?

The language of the lease central to the first issue reads:

“WHEREAS, the Landlord [Pollard] has agreed to construct and own in its own name solely a vehicle storage building for the various utilities of the City of Bozeman, ....
“NOW, THEREFORE, in mutual consideration of the covenants contained herein, it is hereby agreed as follows:
“1. Description of Premises. Landlord leases to Tenant the structure to be construed [sic] and owned by the Landlord and more specifically described and set out in Exhibit “A” .... This structure, which shall be constructed by the Landlord, shall be located on real property owned by the Tenant . . .”
“21. Option of Tenant to Purchase. The Tenant shall have the option to purchase the leased premises at any time during the lease period or any renewals thereof. The purchase price shall be the total rent for one five-year period multiplied by four less all rent paid pursuant to this lease. If this lease is renewed for the third time, at the end of the twentieth year, the Tenant shall receive the building for the sum of $10.00 cash. The other consideration shall be the continuing of performance of this lease by the Tenant. The parties designate First Bank of Bozeman, Bozeman, Montana, as the escrow agent of this agreement. The Landlord shall deposit a copy of this lease together with a bill of sale and a quitclaim deed transferring the structure and improvements to the Tenant. The Landlord covenants not to allow any liens or encumbrances on the leased premises during the term of this agreement, and further covenants the transfer of the property to the Tenant shall be free and clear of all liens, encumbrances and restrictions of record.”

Pollard argues on appeal that the arrangement agreed to in the lease in fact constituted a sale of the property. Proof of the sale is found, he argues, in the fact that Pollard granted the property to the City of Bozeman by quit claim deed deposited in the escrow account. Further proof is found, he asserts, from the dicta in Hunter, supra, stating that the lease was in fact a sale, and from other lease provisions, such as the liquidated damage clause.

The City responds asserting that the language of the contract was clear and unambiguous in establishing a landlord-tenant relationship and that there was no present intention to convey title, an essential factor distinguishing a sales contract from a lease with an option to purchase. The City also explains that a liquidated damage clause does not convert a lease agreement to a sales contract.

The City’s assertions on appeal are based in large part on the reasoning and conclusions set out in the District Court’s memorandum in support of its order granting summary judgment. The District Court considered the matter entirely one of contract interpretation, stating that the “crystal clear” language of the document indicated it was a lease with an option to buy. It distinguished Hunter, supra, as a Department of Labor case dealing with prevailing wage rates, and ruled that it was inapplicable. The liquidated damage provision, it explained, was common in lease agreements, not purchase contracts. Hence, the contract was a lease agreement, the District Court concluded, and Pollard, as landlord, was liable for taxes.

Although we agree with the District Court’s conclusion that Pollard is liable for the tax, it is not necessary to conclude that the document at issue was a lease with an option to buy. The arrangement more nearly falls under the provisions regarding Retail Installment Sales Contracts.

An option to buy involves a contract wherein the owner agreed to give another the exclusive right to buy property at a fixed price within a specified time. Nielson v. Hendrickson (1922), 63 Mont. 518, 210 P. 905. The option is not a sale. It is not even an agreement for a sale. At best, it is but “a right of election in the party securing the same to exercise a privilege,” and only when that privilege has been exercised by acceptance does it become a contract to sell. Ide v. Leiser (1890), 10 Mont. 5, 24 P. 695. In other words, a contract of sale and purchase imposes upon the vendee an obligation to buy. An option confers a privilege or right to elect to buy, but it does not impose any obligation to buy. Ide v. Leiser, 10 Mont, at 11, 24 P. at 695; Miller v. Meredith, et al. (1967), 149 Mont. 125, 423 P.2d 595.

The rule pertaining to construing whether a writing transferring an interest in real estate is a contract for sale or an option to purchase depends not only on particular words and phrases, but on the intention of the parties to be derived from the instrument itself by consideration of its parts, and when that is doubtful, from the circumstances attending it. State Commissioner of Transportation v. Bakers Basin Realty Co. (1975), 138 N.J. Super. 33, 350 A.2d 236; DeFeyter v. Riley (1979), 43 Colo.App. 299, 606 P.2d 453.

Central to our determination that the parties’ agreement was not a lease with an option to purchase is the clause in the contract pertaining to liquidated damages.

“23. Liquidated Damages. As an inducement to enter into this lease and to grant to Tenant the extensions and renewals of this lease, the Tenant agrees that in the event the Tenant fails to renew the lease at the end of the original terms of the lease or after the first and second renewal periods, the Tenant shall deposit with escrow agent the sum of $175,000.00 cash as liquidated damages for the failure of the Tenant to renew said lease.
“It is further agreed that in the event of default for failure to renew this lease, the Tenant shall deposit a quitclaim deed to the real property beneath and immediately surrounding the building together with reasonable access thereto. The landlord shall be entitled to receive this quitclaim deed from the escrow agent upon termination of the Tenant’s occupancy of the building after default.”

Although liquidated damage clauses generally contribute to the conclusion that the agreement is a lease with an option contract, this applies only when the liquidated damage clause is construed as providing consideration for an option upon finding that the instrument did not affirmatively obligate the prospective purchaser to buy the property. DeFeyter, supra. The agreement between Pollard and the City is significantly different. The language of the liquidated damage clause imposes an affirmative obligation on the City to continue “leasing” the building or to pay a substantial amount as well as to forfeit title to the property on which the building stands. The circumstances clearly indicate that the parties did not contemplate or anticipate liquidated damage as an alternative. Rather, the evidence indicates that the parties intended that the agreement embody a contract of sale. Under these facts, the presence of the liquidated damage clause does not convert the contract into a lease with an option. The City has no economically feasible “option” under the terms of the agreement.

Our determination that the contract was not a lease with an option to buy is consistent with our conclusion in Hunter v. City of Bozeman (Mont. 1985), [216 Mont. 251,] 700 P.2d 184, 42 St.Rep. 784 and is also supported by our decision in Doll v. Major Muffler Centers, Inc. (Mont. 1984), [208 Mont. 401,] 687 P.2d 48, 41 St.Rep. 429. In Doll, we stated that a lease can be classified as a retail installment contract where the terms of the contract provide that a lessee will become owner on payment of nominal consideration, citing Section 31-1-202(1), MCA. That section provides:

“(n) ‘Retail installment contract’ or ‘contract’ means an agreement evidencing a retail installment transaction entered into in this state under which a buyer promises to pay in one or more deferred installments the time sale price of goods or services, or both. The term includes a chattel mortgage, conditional sales contract, and a contract for the bailment or leasing of goods by which the bailee or lessee contracts to pay as compensation for its use a sum substantially equivalent to or in excess of its value and by which it is agreed that the bailee or lessee is bound to become, or for no further or merely nominal consideration has the option of becoming, the owner of the goods upon full compliance with the provisions of the contract.”

We recognize that retail installment contracts usually relate to the sale of goods or services, and not to the sale or improvements to real estate, but the analogy holds in this case. Except for the object sold here, the definition of a retail installment contract fits this agreement.

The Pollard-City of Bozeman “lease” falls within the above definition, i.e., the lessee City has contracted to pay as compensation for the building a sum substantially equivalent to or in excess of its value, and the City will, after payment of nominal consideration, become owner of the building.

Note we find that the City will become owner, and not that the City is owner of the building. This is because title bestowing ownership has not transferred from Pollard to the City. Pollard deposited a copy of the lease, bill of sale and quitclaim deed in escrow with the intent that title to the building would pass from Pollard to the City only if the City met the conditions set out in the lease. The conditions precedent to conveyance of title have yet to occur. Delivery, one of the basic requirements for an effective conveyance, requires an intent of the parties to make the deed presently operable. Bull v. Fenich (1983), 34 Wash.App. 435, 661 P.2d 1012. “A grant cannot be delivered to the grantee conditionally.” Section 70-1-510, MCA.

Title bestowing ownership of the building has not transferred from Pollard to the City. Pending final payment, title remains with Pollard. The property is subject to tax under Pollard’s ownership. Section 15-6-101(1), MCA. Therefore we conclude that Pollard was the owner of the building for purposes of assessment of taxes.

The second issue raised is whether the District Court properly awarded attorneys’ fees to the City of Bozeman. We find that it did under Section 28-3-704, MCA, the reciprocal attorneys’ fee statute, which states:

“28-3-704. Contractual right to attorney fees treated as reciprocal. Whenever, by virtue of the provisions of any contract or obligation in the nature of a contract made and entered into at any time after July 1, 1971, one party to such contract or obligation has an express right to recover attorney fees from any other party to the contract or obligation in the event the party having that right shall bring an action upon the contract or obligation, then in any action on such contract or obligation all parties to the contract or obligation shall be deemed to have the same right to recover attorney fees and the prevailing party in any such action, whether by virtue of the express contractual right or by virtue of this section, shall be entitled to recover his reasonable attorney fees from the losing party or parties.”

This statute is directly applicable to the provision on attorneys’ fees in the contract between Pollard and the City. The contract provides:

“If the Landlord [Pollard] files an action to enforce any agreement contained in this lease, or for breach of any covenant or condition, Tenant [City] shall pay Landlord reasonable attorneys’ fees for the services of Landlord’s attorney in the action, all fees to be fixed by the Court.”

By virtue of Section 28-3-704, MCA, the contractual right to attorneys’ fees contained in the agreement is reciprocal and thereby the City, as the prevailing party, is entitled to an award of the fees. Lyle v. Moore (1979), 183 Mont. 274, 599 P.2d 336.

Half-heartedly, Pollard has claimed in brief that Section 28-3-704, MCA, is unconstitutional as adding provisions to the contract made between the parties. No citation of authority or further argument is advanced on the issue by Pollard. No response was made to this claim by the City. The grounds stated are insufficient for us to examine or decide the purported constitutional issue.

Affirmed.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HUNT and GULBRANDSON concur.

MR. JUSTICE WEBER,

specially concurring:

I concur with the majority decision to affirm the judgment of the District Court.

I do not join in the conclusion of the majority that the contract was not a lease with an option to buy but that the agreement constituted a contract of sale. I would affirm the District Court in its conclusion that the instrument constituted a lease with an option to buy.

I do not find it essential to determine whether the agreement was a lease with an option to buy or a contract of sale. The key fact is that title had not passed to the City and as a result the City had not become the owner. Because the title remained in Pollard, taxation to Pollard was the proper result.


author: MR. JUSTICE McDONOUGH

text:
    In the MATTER OF M.G.M., Youth in Need of Care.
    No. 86-538.
    Submitted on Briefs July 1, 1987.
    Decided Aug. 20, 1987.
    Rehearing Denied Sept. 17, 1987.
    741 P.2d 770.

      Ralph L. Herriott, Billings, for appellant.
    Mike Greely, Atty. Gen., Helena, Harold Hanser, Co. Atty., Greg Mullowney, Deputy Co. Atty., Damon Gannett, Guardian Ad Litem, Billings, for respondent.
   MR. JUSTICE McDONOUGH

delivered the Opinion of the Court.

The natural father of M.G.M. appeals the September 2, 1986, order of the Thirteenth Judicial District Court, County of Yellowstone, finding M.G.M. to be a youth in need of care and awarding temporary custody to the Montana Department of Social and Rehabilitation Services. We affirm.

This matter was previously before this Court in In the Matter of M.G.M. (1982), 201 Mont. 400, 654 P.2d 994. The pertinent facts of the case prior to 1982 are contained in that opinion. On appeal, we reversed the lower court’s termination of the natural father’s parental rights for failure to find that M.G.M. was a youth in need of care and remanded for further findings.

During the pendency of the previous appeal, M.G.M. was placed in a foster home in Missoula. Following remand, the termination of parental rights proceedings were halted midway through trial by agreement of the parties. In a court approved stipulation, the parties agreed that M.G.M. would be placed in the care and custody of the natural father for a period of six weeks. During that period, M.G.M. would meet once a week with psychologist Richard Agosto to monitor M.G.M.’s mental and emotional well-being. In the event Dr. Agosto found M.G.M. was suffering, or likely to suffer, identifiable and substantial impairment of her intellectual or psychological functioning due to the acts or omissions of the natural father, M.G.M. would return to her foster home on a permanent basis. The natural father would maintain visitation rights under the agreement.

Dr. Agosto issued a written report on August 2, 1985, concerning M.G.M.’s mental and emotional well-being during her stay with the natural father. Dr. Agosto found that M.G.M’s intellectual development was close to that of a fifteen year old while her emotional and social development was comparable to the nine or ten year old level. During M.G.M.’s six week stay with the natural father, Dr. Agosto noted symptoms of emotional stress by M.G.M. including sleep disruption, weight loss, fatigue, feelings of helplessness and increased levels of anger. M.G.M. considered the natural father and his new wife to be critical of her which diminished M.G.M.’s self-esteem.

In his report, Dr. Agosto concluded that M.G.M. suffered identifiable impairment of her psychological functioning during her stay with the natural father. Dr. Agosto described M.G.M. as a very vulnerable young teenager in need of a supportive and loving family. Dr. Agosto recommended that M.G.M. return to her foster family.

The natural father filed a contempt petition on September 12, 1985, alleging the State and guardian ad litem had violated the terms of the stipulation and that he was entitled to custody of M.G.M. Specifically, the natural father alleged that Dr. Agosto did not conclude M.G.M. had suffered substantial impairment of her intellectual or psychological functioning necessary to terminate his custody rights as provided in the agreement. A hearing on the contempt motion was held October 31, 1985.

Dr. Agosto testified at the hearing that he concluded M.G.M. had suffered substantial impairment of her psychological functioning during her stay with the natural father and would be at risk of greater emotional stress should the placement continue. Following hearing, the court denied the contempt motion of the natural father.

On January 8, 1986, the State filed a motion to set a hearing date to determine whether M.G.M. was a youth in need of care and whether the stipulation entitled the State to maintain M.G.M.’s placement with her foster family in Missoula. A hearing was held February 6, 1986, and testimony received from Vince Matule, director of the Casey Family Foundation which was responsible for monitoring M.G.M’s placement. Matule recommended that M.G.M. continue in her present foster home placement with the natural father retaining visitation rights. Matule believed that M.G.M. was in need of stability and a secure family during her adolescence and that her foster family in Missoula met these needs.

The District Court entered its findings of fact, conclusions of law, and order on September 2, 1986. The court found M.G.M. to be a youth in need of care, that it was in M.G.M.’s best interest to continue her placement with her foster family, and that the natural father shall be entitled to regular visitation. The natural father appeals and raises the following issue: Are the District Court’s findings of fact and conclusions of law supported by clear and convincing evidence?

The natural father first contends that the District Court erred in adopting previous findings of the District Court because such findings were rejected on appeal by this Court. We disagree. Our previous opinion in this matter clearly stated that the case was remanded “for further findings.” 201 Mont. at 401, 654 P.2d at 998. We reversed on appeal because the lower court failed to find that the natural father abused or neglected M.G.M. In order to deprive a parent of child custody pursuant to Sections 41-3-404 and -406, MCA, the court must find that the child is abused, neglected or dependent.

With the exception of the District Court finding relating to opinion testimony of the psychiatric nurse, this Court did not reject any of the District Court’s findings in our previous opinion. We find no error in the District Court adopting these findings on remand. Findings one through nine, objected to by the natural father, are supported by substantial credible evidence.

The natural father contends there is insufficient evidence to support Dr. Agosto’s. conclusion that M.G.M. suffered substantial impairment of her psychological functioning during her stay with the natural father and would be at risk of increased emotional stress if the placement continued. The record shows Dr. Agosto is well qualified as a clinical psychologist. Dr. Agosto had weekly sessions with M.G.M. during her stay with the natural father. Dr. Agosto noted that M.G.M. suffered the classic symptoms of depression and emotional stress during the period. Dr. Agosto’s testimony and affidavit reflect his belief that M.G.M. suffered substantial psychological impairment while in the custody of the natural father. We find no reason to doubt Dr. Agosto’s conclusions regarding M.G.M.

The natural father further contends that there is not clear and convincing evidence to support the District Court’s finding that M.G.M. was a youth in need of care and that the court again improperly applied the “best interest” test. In finding M.G.M. to be a youth in need of care, the District Court applied Section 41-3-102, MCA, which provides in part:

“(2) An ‘abused or neglected child’ means a child whose normal physical or mental health or welfare is harmed or threatened with harm by the acts or omissions of his parent or other person responsible for his welfare.”

M.G.M. spent the first five years of her life with her mother, who suffered from chronic schizophrenia. M.G.M. did not develop normally and adapted to a role-reversal with her mother. The testimony of mental health professionals in this case indicates that children of schizophrenics increase their risk of developing schizophrenia if raised by schizophrenic parents because they fail to properly develop their own self-identity. The natural father is also a diagnosed schizophrenic.

Testimony was given at the May 2 and 3, 1985, hearing by three mental health professionals involved with the case. Each witness favored placing M.G.M. with a foster family to prevent the possibility of M.G.M. developing schizophrenia as a result of being raised by a schizophrenic parent.

Dr. Wagner, a clinical psychologist, testified that it would be stressful for M.G.M. to be in the custody of the natural father, and recommended that M.G.M. continue to reside with her foster family. Testimony was also received from Dr. Tranel, a psychologist who interviewed and tested both M.G.M. and the natural father in 1980. Dr. Tranel stated his opinion that the acts, conduct, or omissions of the natural father posed imminent risk of harm to M.G.M’s psychological well-being.

Mary Honaker, a certified mental health professional who conducted therapy with M.G.M., testified that M.G.M. was distressed and apathetic during periods when she visited the natural father. Honaker testified that she felt further visits with the natural father would be harmful to M.G.M.

Dr. Tranel, Dr. Wagner and Ms. Honaker, were not actively involved with M.G.M. or the natural father after 1981. However, both Dr. Tranel and Dr. Wagner testified that the natural father’s schizophrenic condition would not improve without therapy and treatment. There is no evidence that the natural father has sought treatment for his condition.

We find clear and convincing evidence in the record to support the District Court’s determination that M.G.M. is a youth in need of care within the meaning of Section 41-3-102, MCA. The record clearly supports transferring custody to the State with M.G.M. continuing in her present foster home.

The District Court is affirmed.

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