author: MR. JUSTICE HARRISON MR. JUSTICE HUNT,

text:
    JOHN A. BROERS, Petitioner and Appellant, v. MONTANA DEPARTMENT OF REVENUE and its Liquor Division, Respondent.
    No. 88-490.
    Submitted March 30, 1989.
    Decided May 12, 1989.
    773 P.2d 320.

      Hash, O’Brien & Bartlett, James C. Bartlett argued, Kalispell, for petitioner and appellant.
    Eric J. Fehlig argued, Dept, of Revenue, Legal Affairs, Helena, for respondent.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

The Department of Revenue denied renewal of appellant’s all-beverages liquor license. Appellant challenges the sufficiency of the evidence and the constitutionality of the statutes upon which the renewal was denied. We affirm.

John Broers (Broers) was the owner of Stanton Creek Lodge & Outfitters, near Essex, Montana. In June, 1986, Broers applied with the Department of Revenue (Department) for a renewal of the all-beverages liquor license. On September 19, 1986, the Department denied the renewal because Broers had not demonstrated he was likely to operate his establishment in compliance with applicable state and local laws. Broers sought administrative review before the Department, and judicial review before the District Court of the Eleventh Judicial District, Flathead County, Montana. At each stage, the denial was affirmed.

Broers raises the following issues for review:

1. Are the statutory provisions upon which the license was denied unconstitutionally vague and overbroad?

2. Must the Department limit its examination to violations of the Montana Alcoholic Beverage Code, zoning and nuisance laws when considering applications for liquor licenses?

3. Was there sufficient evidence to deny Broers’ application for a license renewal?

Broers was granted an all-beverages liquor license for his Stanton Creek Lodge each year since 1975. The five years which preceded the denial of the liquor license were punctuated by instances of criminal conduct by Broers. These instances, all of which resulted in misdemeanor convictions, included DUI, outfitting without a federal license, disorderly conduct, reckless driving, criminal mischief, and assault. Of greatest importance to this case were two incidents which directly involved the liquor establishment.

In August, 1985, Herb Strong, his wife and three children stopped at Broers’ Lodge because his two boys had to use the restroom. Soon after the boys entered the Lodge, they emerged very upset because Broers had confronted them about making a purchase in order to use his restroom. As Mr. Strong had his children get back into their vehicle, Broers called for Mr. Strong to come to him. Strong retorted using a two-word expletive, climbed into his vehicle and began to drive away.

As Strong’s vehicle left the Lodge parking lot, Mrs. Strong saw Broers pointing a rifle at them from the doorway of the Lodge. Mrs. Strong had her children duck from view as Mr. Strong drove them from the area.

Broers followed the Strongs in his pickup and confronted them a short distance away where the Strongs were stopping to tie down gear on their fishing boat. Broers asked Mr. Strong whether the boys owed him something for using the restroom. Strong stated that they did not, backed up his vehicle and proceeded down the road.

Again Broers followed. Although it is not exactly clear what happened next, the two vehicles collided when Broers was passing the Strong vehicle. Neither vehicle stopped. Broers drove ahead to a farmhouse to call the sheriff. Strong notified the sheriff in Kalispell. Broers was convicted on four counts of misdemeanor assault.

In another incident at the Lodge, on January 1, 1986, Broers plowed the snow from the Lodge parking lot onto U.S. Highway 2 during a heavy snowfall. The resulting large snow berm caused a two car collision and Broers was convicted of misdemeanor criminal mischief.

The Department informed Broers by letter dated September 19, 1986 that his application for renewal was denied. Broers requested administrative review and on December 17, 1986 and January 23, 1987, a hearing was held before an examiner from Agency Legal Services Bureau. The hearings examiner concluded Broers had failed to demonstrate he would operate his establishment in accordance with Montana law. Exceptions and legal arguments were made to the Director of the Department of Revenue. The Director adopted the findings of the hearings examiner and ordered the denial be the final decision of the Department.

The matter was appealed to the District Court. The Department’s decision was affirmed by District Judge Michael Keedy.

Issue No. 1

Are the statutory provisions upon which the license was denied unconstitutionally vague and overbroad?

We begin by noting that under the Twenty-first Amendment to the United States Constitution, states are granted extensive regulatory power of the liquor industry. California v. LaRue (1972), 409 U.S. 109, 115, 93 S.Ct. 390, 395, 34 L.Ed.2d 342, 350. The Montana Alcoholic Beverage Code is an exercise of our State’s police power and as such should be interpreted to further its declared policy: to protect the welfare, health, peace, morals and safety of the people of Montana. Section 16-1-101(3), MCA.

The statute at issue here, § 16-4-401, MCA, formed the basis upon which the Department denied Broers’ renewal of his liquor license. That statute reads in part:

“(2) Except as provided in subsection (6), in the case of a license that permits on-premises consumption, the department must find in every case in which it makes an order for issuance of a new license [or renewal of a license, 42.12.121(2), ARM] . . .:
“(a) in the case of an individual applicant:
“(iv) the applicant’s past record and present status as a purveyor of alcoholic beverages and as a businessman and citizen demonstrate that he is likely to operate his establishment in compliance with all applicable laws of the state and local governments; . . .”

It is Broers’ contention this section is unconstitutionally vague because it does not describe prohibited conduct sufficiently to give a person of ordinary intelligence fair notice. Additionally, Broers claims the statute impermissibly gives unbridled discretion to the Department to grant or deny licenses upon any facts it wishes to accept. We disagree.

VAGUENESS

Broers argues the statute is unconstitutionally vague because it does not specifically declare what past record and present status is to be considered by the Department. Similarly, Broers argues the statute does not inform an applicant or licensee that violations of Montana’s criminal code can result in a denial.

The United States Supreme Court has held that noncriminal statutes are unconstitutionally vague if persons of common intelligence must necessarily guess at their meaning. Broadrick v. Oklahoma (1973), 413 U.S. 601, 607, 93 S.Ct. 2908, 2913, 37 L.Ed.2d 830, 837; Keyishian v. Board of Regents (1967), 385 U.S. 589, 604, 87 S.Ct. 675, 684, 17 L.Ed.2d 629, 641. However, an unreasonable interpretation and dissection of a statute will not render it void for vagueness. It is the duty of the courts to uphold the constitutionality of a statute if such can be accomplished by reasonable construction. North Central Services, Inc. v. Hafdahl (Mont. 1981), [191 Mont. 440,] 625 P.2d 56, 58, 38 St.Rep. 372, 374.

Undoubtedly the legislature has granted substantial discretion to the Department of Revenue to investigate applicants and grant or deny licenses. Still, the statute is not without standards. As the District Court of Appeals of Florida noted in a challenge to statutes which limit the issuance of a beverage license to “persons of good moral character”:

“. . . We doubt that the legislature could in its infinite wisdom detail each salient standard for good moral character. What constitutes good moral character is a matter to be developed by facts, evaluated by the agency, with a judicial review of same ever available. The subject statute is constitutional . . .”

Zemour, Inc. v. State Division of Beverage (Fla.App.1977), 347 So.2d 1102, 1103, citing White v. Beary (Fla.App. 1970), 237 So.2d 263, 265-66.

The discretion granted to the Department is not without limit. The “past record and present status” is clearly limited and defined within the remainder of the statute. The scope of the Department’s investigation is limited to a person’s past record and present status “as a purveyor of alcoholic beverages” and as a businessman and citizen which demonstrates likely operation of the liquor establishment in compliance with all applicable laws of the state and local governments.

A person’s past record or present status as an income tax protestor, or, as argued at bar, a trespasser at Malmstrom Air Force Base bears no relation to the operation of a liquor establishment. A denial on those grounds would constitute an abuse of the Department’s discretion and would not survive judicial review.

Additionally, Broers argues the phrase “all applicable laws of the state and local governments” is vague because it does not adequately inform a person which laws he or she may disobey before a liquor license will be denied. We disagree. The statute is capable of reasonable interpretation and construction. As stated in 1 Am.Jur.2d, Administrative Law § 38:

“While the words of a statute are the basic data from which to draw its meaning, not every problem of statutory construction should be solved simply by a literal reading of the language. Particular language may and should be construed in the light of the purposes of the legislation, especially a declared purpose and policy. The meaning of a particular word may be determined by the purposes of the legislation; for a word may take color from its surroundings and derive meaning from the context of the statute, which must be read in the light of the mischief to be corrected and the end to be attained.”

There is no question but that Montana’s Alcoholic Beverage Code has a definite and substantial public policy goal. That public policy is clearly stated in § 16-1-101(3), MCA:

“This code is an exercise of the police power of the state, in and for the protection of the welfare, health, peace, morals, and safety of the people of the state, and its provisions shall be construed for the accomplishment of such purposes. ’’(Emphasis added.)

The meaning of the statute’s “all applicable laws” language is obvious. All applicable laws are those which are designed to protect the welfare, health, peace, morals, and safety of the citizens of this State as they relate to the manufacture, sale, and distribution of alcoholic beverages within the State of Montana. Neither income tax protestation nor advocation of nuclear disarmament bear any relation to the manufacture, sale, or distribution of alcoholic beverages. However, assault with a firearm upon a family who innocently stops to use a restroom in a liquor establishment licensed by the State definitely falls within the logical nexus of laws designed to protect our citizens where the sale and distribution of alcoholic beverages are concerned. The statute is set out in terms the ordinary person exercising ordinary common sense can understand and comply with, and therefore, is not unconstitutionally vague.

OVERBREADTH

Broers contends the statute is unconstitutionally overbroad because a liquor license could be denied to one who “is not popular with the general public” and could curtail the right of free speech and association. Broers’ overbreadth argument spills over to his contention that the statute is vague. Therefore, in light of our conclusion regarding the vagueness challenge, we will only briefly examine this issue.

Recently, the United States Supreme Court has held that statutes should be construed narrowly, where possible, to bring them in line with constitutional requirements of due process.

“It has long been a tenet of First Amendment law that in determining a facial challenge to a statute, If it be ‘readily susceptible’ to a narrowing construction that would make it constitutional, it will be upheld. Erznoznik v. City of Jacksonville, 422 U.S. 205, 95 S.Ct. 2268, 45 L.Ed.2d 125 (1975); Broadrick v. Oklahoma, 413 U.S. 601, 93 S.Ct. 2908, 37 L.Ed.2d 830 (1973).”

Virginia v. American Booksellers Assn., Inc. (1988), 484 U.S. 383, _, 108 S.Ct. 636, 644-45, 98 L.Ed.2d 782, 796. Additionally, the Supreme Court stated in City of Houston v. Hill (1987), 482 U.S. 451, 458, 107 S.Ct. 2502, 2508, 96 L.Ed.2d 398, 410:

“Only a statute that is substantially overbroad may be invalidated on its face. New York v. Ferber (1982), 458 U.S. 747, 769, 102 S.Ct. 3348, [3361] 73 L.Ed.2d 1113; Broadrick v. Oklahoma, supra. ‘We have never held that a statute should be held invalid on its face merely because it is possible to conceive of a single impermissible application . . . ‘ Id., at 630, 93 S.Ct. 2908, [2925], [413 U.S. 601], 37 L.Ed.2d 830.”

See also, Members of City Council of City of Los Angeles v. Taxpayers for Vincent (1984), 466 U.S. 789, 104 S.Ct. 2118, 80 L.Ed.2d 772. We conclude our interpretation and construction of § 16-4-401(2)(a)(iv) adequately protects First Amendment rights. Broers’ overbreadth and vagueness challenges must fail.

Issue No. 2

Must the Department limit its examination to violations of the Montana Alcoholic Beverage Code, zoning and nuisance laws when considering applications for liquor licenses?

Broers erroneously believes the phrase “all applicable laws of the state and local governments” does not extend beyond the specific provisions of the Alcoholic Beverage Code and the zoning and nuisance laws. Laws under the Alcoholic Beverage Code include prohibitions against the sale of alcohol to intoxicated person and persons under the age of 21, and the sale of alcohol not purchased from the State liquor store. However, a renewal of a liquor license is granted under the same criteria as a new license. Under Broers’ interpretation, such limitation would have no practical application to first-time applicants since the Department would have no prior history on which to base its decision. More importantly, this narrow reading of the statute would unreasonably limit the Department’s investigative ability and restrict its power to grant licenses to qualified applicants. The very purpose of the Code, to secure the welfare, health, peace, morals and safety of the people of Montana would be lost.

Issue No. 3

Was there sufficient evidence to deny Broers’ application for a license renewal?

The standard of review of agency decisions is whether the findings of fact are clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record. Section 2-4-704(2), MCA. We conclude the findings of the hearings examiner are not clearly erroneous and are based upon reliable, probative and substantial evidence on the whole record.

The Department did consider Broers’ criminal acts which did not have a direct connection with the operation of the Stanton Creek Lodge. These acts included misdemeanor convictions for DUI, reckless driving, barroom brawling, and discharging a firearm in the direction of a passing motorist. These incidents alone may not have been sufficient to deny the license renewal. However, viewed as a whole, Broers’ actions indicated to the Department that he had a disregard for the safety of others, a violent temperament and a tendency toward alcohol abuse. When viewed in connection with the Strong family and snowplowing incidents, there was ample evidence to support the Department’s conclusion that Broers’ license renewal must be denied.

As noted earlier, a license renewal is granted under the same criteria as any new license. Broers’ license was not revoked or suspended. Section 16-4-401(1), MCA, clearly states that a “license under this code is a privilege which the state may grant to an applicant and is not a right to which any applicant is entitled.” The Alcoholic Beverage Code also provides grounds upon which a license may be denied. Under § 16-4-405(3), MCA, a license may not “be issued if the department finds from the evidence . . . that the purposes of this code will not be carried out by the issuance of such license.” After its investigation^ the Department concluded the purposes of the Code, to protect the welfare, health, peace, morals and safety of Montana’s citizens, would not be carried out by a renewal of Broers’ liquor license.

The judgment of the District Court is affirmed.

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

MR. JUSTICE HUNT,

dissenting:

I dissent. The statute is overbroad and I believe the legislature has gone too far in delegating its responsibility and authority to the Department of Revenue.

The purpose of the Department of Revenue is to raise revenues and not to establish or enforce the moral standards of businessmen or anyone else.

MR. JUSTICE SHEEHY concurs in the foregoing dissent.


source: Caselaw Access Project

author: MR. JUSTICE GULBRANDSON MR. JUSTICE SHEEHY, MR. JUSTICE HUNT,

license: Public Domain

text:
    VICKI PETERSON, Plaintiff and Appellant, v. GREAT FALLS SCHOOL DISTRICT NO. 1 AND A, Cascade County, Montana, Defendant and Respondent.
    No. 88-493.
    Submitted on Briefs Feb. 9. 1989.
    Decided May 12, 1989.
    773 P.2d 316.

      Cameron Ferguson and Hartelius, Ferguson & Baker, Great Falls, for plaintiff and appellant.
    J. David Slovak and Ugrin, Alexander, Zadick & Slovak, Great Falls, for defendant and respondent.
   MR. JUSTICE GULBRANDSON

delivered the Opinion of the Court.

Vicki Peterson appeals the July 20, 1988 order of the Eighth Judicial District, Cascade County, granting the defendant-respondent’s motion for summary judgment. The District Court found Peterson’s cause of action against the school district is barred by § 2-9-111, MCA, and recent decisions interpreting that statute. We affirm the order of the District Court.

Peterson was terminated from her employment as a custodian with the Great Falls School District Number 1 and A (District) in May of 1984. According to the complaint, the basis for the termination was Peterson’s alleged refusal, for safety reasons, to empty 55 gallon trash drums into a dumpster. Prior to her termination, Peterson alleges she attempted to have the District change her duties so she would not be required to lift and empty these containers. The answer indicates the District declined to change her duties, allegedly directing her to obtain assistance in emptying the containers. When Peterson later refused to empty the 55 gallon drums, her employment was terminated. The termination was carried out by an administrative assistant employed by the District. Peterson then brought this action for wrongful discharge alleging the District’s requirement that she empty the 55 gallon containers created an unsafe work place and violated a Great Falls city ordinance prohibiting the use of 55 gallon drums for garbage purposes. In an amended answer, the District raised legislative immunity as an affirmative defense, citing § 2-9-111, MCA. Section 2-9-111, MCA, provides:

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

The District then moved for summary judgment based upon legislative immunity. The District Court granted the motion for summary judgment. On appeal of that order the appellant presents the following two issues:

1. Does § 2-9-111, MCA, provide Great Falls School District Number 1 and A immunity for the act of its administrative assistant in terminating Vicki Peterson?

2. Does § 2-9-111, MCA, violate Vicki Peterson’s right to full legal redress guaranteed by Article II, § 16, of the Montana Constitution?

In her first issue, Peterson contends that the act of terminating her was an administrative action, not a legislative action and therefore the immunity granted in § 2-9-111, MCA, is not applicable to this case. However, we find the question of what immunity is provided may be answered by simply examining the plain meaning of the words used in § 2-9-111, MCA. W.D. Construction, Inc. v. Board of County Commissioners of Gallatin County (1985), 218 Mont. 348, 707 P.2d 1111. While the title of the statute infers that the immunity granted is for legislative acts or omissions, the actual language employed in defining and granting the immunity is much broader. Subsection (2) (the primary enabling subsection) grants immunity to a governmental entity for an act or omission of its legislative body. Further, this immunity applies to the acts or omissions of members, officers, or agents of those legislative bodies. Section 2-9-111(2), MCA. Subsection (l)(a) expressly includes school districts in the definition of governmental entities, and Subsection (l)(b) includes school boards under the term legislative body. Subsection (3) provides that such immunity to the aforementioned members, officers, or agents of a legislative body is for their “lawful discharge of an official duty associated with the introduction or consideration of legislation or action by the legislative body.” (Emphasis added.) Section 2-9-111(3), MCA. The only specific limitation on this governmental immunity is found in Subsection (4) which provides that this immunity “does not extend to any tort committed by the use of a motor vehicle, aircraft, or other means of transportation.” Section 2-9-111(4), MCA.

Based upon the plain language of the statute and case law interpreting the statute, the court found that the action of the legislative body need not be legislative in nature to afford immunity. Citing W.D. Construction v. Board of County Commissioners of Gallatin County, supra; Barnes v. Koepke (Mont. 1987), [226 Mont. 470,] 736 P.2d 132, 44 St.Rep. 810; and Bieber v. Broadwater County (Mont. 1988), [232 Mont. 487,] 759 P.2d 145, 45 St.Rep. 1218. Recently in the Bieber case we upheld the granting of summary judgment in a wrongful discharge case involving § 2-9-111, MCA. There a county commissioner terminated a county road worker for damaging county equipment. The other county commissioners later ratified this termination. On appeal, we held that § 2-9-111, MCA, provides immunity to the county commissioners and the individual commissioner who lawfully discharges an official duty of that legislative body.

Comparing the Bieber case with the facts in this case, we find the only differences are that the governmental entity in this case is a school board, rather than the comity commissioners, and that the party performing the act is an agent/employee of the legislative body, rather than a member. The statute clearly extends immunity coverage to school districts, to the school boards governing those school districts and to agents of those school boards. Further, school districts have the authority and duty to hire, retain or dismiss custodians pursuant to § 20-3-324(2), MCA. The administrative assistant, as an agent of and on behalf of the school board, legitimately exercised this authority when he discharged Peterson. The discharge was ratified by the school board at its next regularly scheduled meeting. Where an agent performs an act which is later ratified by their principal, that act is considered an action of the principal. Restatement of Agency 2d, § 218.

The District Court properly interpreted § 2-9-111, MCA, as providing immunity from suit for the Great Falls School District 1 and A, for the action of its agent in executing an official duty of the School District in discharging Peterson. Since there were no material issues of fact and the defendant was immune from suit for the alleged cause of action as a matter of law, the court correctly granted the defendant’s motion for summary judgment. Evans v. Montana National Guard (Mont. 1986), [223 Mont. 482,] 726 P.2d 1160, 1161, 43 St.Rep. 1930, 1932.

Peterson also argues that the granting of immunity under § 2-9-111, MCA, violates her fundamental right to full legal redress contained in Article II, § 16, of the 1972 Montana Constitution. She contends the State must show a compelling state interest in order to restrict, limit or modify her right to full legal redress. Pfost v. State (Mont. 1985), [219 Mont. 206,] 713 P.2d 495, 42 St.Rep. 1957. (The Pfost case dealt with limitations upon the State’s liability for personal injury actions imposed by § 2-9-107, MCA.)

This Court, however, has found the right involved in this type of action is that of access to the courts under Article II, § 16, of the 1972 Montana Constitution. In the Bieber case, in construing § 2-9-' 111, MCA, we found Article II, § 16, of the 1972 Montana Constitution guarantees access to the courts, but that that access to the courts is not a fundamental right. Bieber, 759 P.2d at 148, citing Linder v. Smith (Mont. 1981), [_ Mont. _,] 629 P.2d 1187, 1190, 38 St.Rep. 912, 915. As a fundamental right is not involved, the constitutionality of the statute is presumed and the State need only show a rational relationship to a legitimate State interest. Small v. McRae (1982), 200 Mont. 497, 524, 651 P.2d 982, 996, citing New Orleans v. Dukes (1976), 427 U.S. 297, 96 S.Ct. 2513, 49 L.Ed.2d 511.

This Court has identified that rational relationship to a legitimate State interest which justifies § 2-9-111, MCA, as follows:

“The oft articulated rationale for retaining government immunity (specifically in this case legislative immunity) is to insulate a decision or law making body from suit in order to prevent its decision or law making processes from being hampered or influenced by frivolous lawsuits.”

Bieber, 759 P.2d at 148. The statute has previously passed this rational relationship test and we find Peterson’s argument of unconstitutionality must fail.

The District Court’s order granting summary judgment based upon § 2-9-111, MCA, is affirmed.

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

MR. JUSTICE SHEEHY,

dissenting:

The decision of the majority in this case has carried immunity of the school district beyond the orbit of legislative action and into the sphere of administrative immunity. That decision is an incorrect reading of the statute.

As the majority opinion pointed out, the title of act which became § 2-9-111, MCA, is “immunity from suit for legislative acts and omissions.” While the title is no part of the act, and we have in other cases held that the entitlement of an act does not control the meaning of the act itself, there is at least an indication here that the intent of the legislature was to grant immunity for legislative action by a legislative body, and no more.

That this was the intent of the legislature can be gleaned from a parsing of the difference between Subsection (2) and Subsection (3) of the act. They follow:

“(2) A governmental entity is immune from suit for an act or omission of its legislative body or a member, officer, or agent thereof.
“(3) A member, officer, or agent of a legislative body is immune from suit for damages arising from the lawful discharge of an official duty associated with the introduction or consideration of legislation or action by the legislative body.” (Emphasis supplied.)

By ordinary rules of English, it will be seen that Subsection (2) grants complete immunity to the governmental entity for acts or omissions of its legislative body. Subsection (3) limits immunity to persons for the “lawful discharge of official duty associated with the introduction or consideration of legislation or action by the legislative body.” The entity has complete immunity. The persons have immunity only for actions by the legislative body.

One of the great positions taken by the Constitutional Convention in 1971 was to eliminate state immunity from suit. The purpose evinced by the constitutional framers was to place governmental entities and their agents on the same footing as agents of private entities, including municipal corporations, where tortious acts were concerned. The legislature, through various acts, and goaded by fearful bureaucrats, has nibbled away at the idea of state immunity, and § 2-9-111, MCA, passed in 1977 is an example. There is no doubt that the Act is poorly phrased and nebulous in meaning, but the whole tenor of the act indicates the intention of the legislation to confine the withdrawal of immunity only to legislative acts performed by governmental units. Under the Court’s interpretation of § 2-9-111, MCA, as now espoused by the majority, no governmental unit except the state itself will have any liability for the tortious acts of its agents, because all actions or omissions can be construed to be those of agents either of the school board, the city council, or the county commissioners. Thus administrators, foremen, and janitors are covered under legislative immunity. That I submit is a bad result, and is a bad interpretation of § 2-9-111, MCA.

The purpose of a grant of legislative immunity is to allow a legislative body to exercise its legislative duties without hampering its discretion. A body acts legislatively when it sets policy, or adopts regulations for the enforcement of its policies. Beyond that, the entity or its agents are acting administratively and should not come within the ambit of legislative immunity. Our cases construing § 2-9-111, MCA, leading up to this decision gave no hint that this Court would , interpret § 2-9-111, MCA, as a complete grant of immunity to every substate governmental entity, employee and agent.

In W.D. Construction, Inc. v. Board of County Commissioners Gallatin County (1985), 218 Mont. 348, 707 P.2d 1111, the county commissioners were acting quasi-legislatively in applying zoning regulations. This Court properly allowed immunity under § 2-9-111, MCA. In Barnes v. Koepke (1987), [226 Mont. 470,] 736 P.2d 132, this Court held that the decision of the county commissioners not to renew a lease of a hospital and nursing home was a legislative action and so within the legislative immunity. In Bieber v. Broadwater County (Mont. 1988), [232 Mont. 487,] 759 P.2d 145, the Court, in upholding immunity for a county commissioner who fired an employee for abusing county equipment, this Court said:

“It is clear that the Broadwater county Commissioners are a legislative body of the governmental entity of Broadwater County under the language of the statute. The decision to fire Bieber, although initially made by only one Commissioner, Duede, was later ratified by the rest of the Commission. It was an act of a member of a legislative body and is covered by the express language of the statutes

The decision in this case takes the grant of immunity far beyond the members of the Commission themselves, and grants immunity both to the entity and to the employee or agent where no legislative act is involved. Thus are the citizens of our State unprotected from the insolence of office.

Because I would hold that legislative immunity does not apply in this case, there would be no need as far as I am concerned to discuss the effect of Article II, Section 16 of the Montana Constitution on § 2-9-111, MCA. When Bieber was decided, I was not a member of the panel to which the case had been assigned. Unfortunately that decision was made without oral argument by less than a full Court. Ordinarily this Court does not decide constitutional questions unless the full Court is represented. I have a profound disagreement with the majority members of this Court that Article II, Section 16 does not provide as a fundamental right both a ready access to the courts and a full legal remedy. I will wait for another case to discuss this issue. It is enough to say here that in my view § 2-9-111, MCA, carried to the extent decided by the majority in this case, violates Article II, Section 16 in every particular.

I would reverse the District Court.

MR. JUSTICE HUNT,

dissenting:

I dissent. The case of Bieber v. Broadwater County (Mont. 1988), [232 Mont. 487,] 759 P.2d 145, 45 St.Rep. 1218, simply stands for the proposition that, when a county commissioner or other legislative body appoints one of its members to fill a vacant managerial position, the appointed commissioner acts under the delegated authority of the legislative body. The commissioner’s actions while performing the official duties of the managerial position may be ratified by the commission, thus entitling the commissioner to governmental immunity. Bieber does not grant this same immunity to a member of the government who is not also engaged in legislative functions. The case does not stand for the proposition that governmental immunity in the State of Montana has been stricken.


text:
    STATE OF MONTANA, Plaintiff and Respondent, v. WALLIS J. THOMPSON, Defendant and Appellant.
    No. 88-445.
    Submitted on Briefs March 31, 1989.
    Decided May 17, 1989.
    Rehearing Denied June 1, 1989.
    773 P.2d 722.

      Moses Law Firm, Charles F. Moses, Billings, for defendant and appellant.
    Marc Racicot, Atty. Gen., Helena, Clay R. Smith, Asst. Atty. Gen., Helena, C. Ed Laws, Stillwater County Atty., Columbus, for plaintiff and respondent.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

This case comes to us on appeal from a jury verdict in the Thirteenth Judicial District, Stillwater County, the Honorable Diane G. Barz presiding, finding the appellant, Wallis J. Thompson, guilty of the offense of Driving Under the Influence of Alcohol, a violation of § 61-8-401, MCA. We affirm.

On January 7, 1987, Deputy Clifford Brophy arrested appellant for the offense of driving under the influence of alcohol. After his arrest, Officer Brophy drove appellant to the sheriff’s office in Columbus, Montana. At trial, the parties stipulated that during the drive to Columbus, Officer Brophy informed appellant of his rights under Miranda v. Arizona (1966), 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694.

Once at the sheriff’s office, Officer Brophy advised appellant of his rights under Montana’s Implied Consent Law, pursuant to § 61-8-402, MCA. Appellant refused to take a blood, breath or urine test. Next, appellant performed a series of field sobriety tests, including reciting the alphabet, walking a straight line and holding his foot six inches off the floor for approximately thirty seconds. Upon completion of the sobriety tests, Officer Brophy again advised appellant of his Miranda rights. Appellant signed a waiver of his Miranda guarantees. Thereafter, Officer Brophy questioned appellant in detail regarding the incident. An audio-video tape recorded appellant’s com-merits and actions while in the sheriff’s office, including those made during the sobriety tests, the reading of Miranda warnings, his waiver of rights, and questioning by Officer Brophy.

On March 4, 1987, appellant was found guilty of Driving Under the Influence of Alcohol by a justice court jury. Appellant appealed to the District Court. On April 21, 1988, a District Court jury also found appellant guilty of the offense of Driving Under the Influence of Alcohol. The District Court sentenced appellant to 60 days in jail with all but one suspended, issued a $300 fine, required attendance in an Assessment Course and Treatment School (ACT) and ordered payment of court costs totaling $421.57.

Appellant raises the following issues on appeal.

1. Did the District Court err when it allowed the audio-video tape into evidence?

2. Did the District Court err when it limited the evidentiary purpose of appellant’s Exhibits A and B?

The Fifth Amendment to the United States Constitution and Art. II, § 25 of the Montana Constitution, provides that no person mar be compelled to testify against himself in a criminal proceeding. However, we distinguish compelling “communications” or “testimony” from real or objective evidence taken from the accused. Schmerber v. California (1966), 384 U.S. 757, 86 S.Ct. 1826, 16 L.Ed.2d 908; State v. Jackson (1983), 206 Mont. 338, 672 P.2d 255; State v. Armfield (1984), 214 Mont. 229, 693 P.2d 1226. In these instances, we have consistently stated that the privilege against self-incrimination does not extend to real or objective evidence. State v. Finley (1977), 173 Mont. 162, 566 P.2d 1119.

Appellant contends the video tape should have been excluded as a denial of his constitutional rights, arguing that the actions and verbal comments made during the field sobriety tests were testimonial in nature. Further, because he was in the custody of the police, appellant argues his comments made during the taping were a result of custodial interrogation and therefore, required Miranda warnings.

The crucial inquiry in this case — whether the audio-video tape of the comments and actions of the appellant constituted constitutionally prohibited testimonial compulsion or merely real, physical, or objective evidence — is similar to the inquiry presented in Finley. In that case, we held that the video tape was objective evidence and, therefore, outside the protection of the Fifth Amendment to the United States Constitution and Art. II, § 25 of the Montana Constitution. Finley, 566 P.2d at 1121. The video tape demonstrated defendant’s performance of sobriety tests and his manner of speaking:

“[T]he audio-video tape was introduced into evidence not for the incriminating content of the words uttered by defendant, but as evidence helpful to the jury in understanding the testimony of the police officers and employees who observed defendant’s unsteady walk and slurred speech in the police station.”

Finley, 566 P.2d at 1121. See also, State u. Johnson (1986), 221 Mont. 503, 719 P.2d 1248, 43 St.Rep. 913; Armfield. We conclude the audio-video tape in the present case is objective evidence and not entitled to Fifth Amendment protection.

Appellant attempts to distinguish Finley by stating that Finley was advised of his Miranda rights prior to the taping and appellant Thompson was not so advised. While we find appellant’s assertion questionable in light of the stipulation entered into between the parties before trial, our earlier holding eliminates the need for discussion of this issue.

“Because we hold the audio-video tape of defendant in the police station was objective evidence, unprotected by defendant’s constitutional privilege against self-incrimination, the holding in Miranda is inapplicable to the facts of this case.”

Finley, 566 P.2d at 1122. Therefore, we do not determine whether the Miranda warning, stipulated by the parties as given to appellant in the police car, would have sufficed to sustain any incriminating testimonial statements.

Further, we reject appellant’s charge of custodial interrogation. Officer Brophy merely requested appellant perform a series of sobriety tests. At trial, Judge Barz viewed the audio-video tape and concluded that defendant’s spoken words did not include any testimonial information. We agree. Our reading of the transcribed audio-video tape reveals that the officer did not interrogate appellant prior to advising him of his Miranda rights, nor question appellant while he performed the sobriety tests. Though appellant chose to make voluntary comments during the tests, these comments were not the result of interrogation. Voluntary statements are not entitled to constitutional protection under Miranda. Miranda, 384 U.S. at 478, 86 S.Ct. at 1630, 16 L.Ed.2d at 726.

The second issue raised on appeal is whether the District Court erred in limiting the purpose for which appellant’s Exhibits A and B were admitted into evidence. Exhibits A and B are pamphlets published by the Montana Highway Traffic Safety Division of the Department of Justice containing information regarding alcohol consumption. The District Court admitted the pamphlets for the limited purpose that they were publications of the Department of Justice of the State of Montana, and admonished the jury that the pamphlets were not admitted for their truth or accuracy.

Appellant argues that under Rule 902(5), M.R.Evid., the pamphlets are authentic and an exception to hearsay prohibitions under the public records or reports exception, Rule 803(8), M.R.Evid. While we agree that the pamphlets are self-authenticating, they do not fall within the public records exception.

Rule 803(8), M.R.Evid., provides in part:

“The following are not excluded by the hearsay rule, even though the declarant is available as a witness:
“(8) Public records and reports. To the extent not otherwise provided in this paragraph, records, reports, statements, or data compilations in any form of a public office or agency setting forth its regularly conducted and regularly recorded activities, or matters observed pursuant to duty imposed by law and as to which there was a duty to report, or factual findings resulting from an investigation made pursuant to authority granted by law. The following are not within this exception to the hearsay rule: (i) investigative reports by police and other law enforcement personnel; (ii) investigative reports prepared by or for a government, a public office, or an agency when offered by it in a case in which it is a party; (iii) factual findings offered by the government in criminal cases; (iv) factual findings resulting from special investigation of a particular complaint, case, or incident; and (v) any matter as to which the sources of information or other circumstances indicate lack of trustworthiness.”

Appellant’s argument relies upon a federal decision addressing the public records exception. We note, however, that the commission rejected the Federal Rule, and instead adopted the Uniform Rule because “[i]t was clearer than the Federal Rule and because it expressed better policy with certain reports in requiring the official to testify rather than admitting his report as a hearsay exception.” Rule 803(8), M.R.Evid., Commission Comment, reprinted in 3 MCA Annotations at 354 (1988). Appellant’s reliance is therefore inappropriate.

To meet this exception, appellant must demonstrate the pamphlets were either derived from the public office or agency’s regularly conducted and recorded activities, published as a result of a duty imposed by law upon the public office or agency, or resulted from an investigation made pursuant to authority granted by law. Rule 803(8), M.R.Evid. Appellant failed to lay a proper foundation to demonstrate that the informational pamphlets fit within one of these three categories.

We find the District Court properly admitted the exhibits for the limited purpose that they are publications of the Department of Justice of the State of Montana.

Affirmed.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES McDON-OUGH, SHEEHY, GULBRANDSON and WEBER concur.

MR. JUSTICE HUNT,

dissenting:

I dissent. The statements made by Thompson during the videotaping are not objective evidence. Therefore, the statements are protected under the Fifth Amendment.


author: MR. JUSTICE McDONOUGH

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. KATHY (DAVIS) KORANG, Defendant and Appellant.
    No. 88-420.
    Submitted on Briefs March 31, 1989.
    Decided May 18, 1989.
    773 P.2d 326.

      Edmund F. Sheehy, Jr., Helena, for defendant and appellant.
    Marc Racicot, Atty. Gen., Patricia J. Schaeffer, Asst. Atty. Gen., Mike McGrath, County Atty., Leo Gallagher, Deputy County Atty., Helena, for plaintiff and respondent.
   MR. JUSTICE McDONOUGH

delivered the Opinion of the Court.

Kathy Davis Korang appeals from the judgment of the District Court of the First Judicial District, Lewis and Clark County, entered upon a jury verdict finding her guilty of theft and tampering with public records, both felonies. We affirm.

Korang presents three issues for review:

1. Whether the evidence is sufficient to sustain her conviction.

2. Whether the District Court interfered with her right to a fair trial by limiting her counsel’s cross-examination of the State’s witnesses in order to conclude the trial before a certain date.

3. Whether the District Court erred in its determination of the amount of restitution that Korang was required to pay as a condition of her suspended sentence.

Korang worked in the Lewis and Clark County Clerk and Recorder’s Office from 1976 until she was suspended in June of 1987. Beginning in 1980, her duties centered around the operation of the “records counter.” She recorded documents in the official County records, as well as searching for and making copies of previously recorded documents requested by members of the public. She collected fees for these services set by state law. The fees were rung up on a cash register, with the various services assigned to different “code keys.” Fees for filing and recording documents were each assigned a particular code key, and were also entered separately in a “reception book.” Miscellaneous small transactions such as making photocopies were assigned to key three, but were not entered in the reception book.

Korang also had bookkeeping responsibility for this operation and deposited collected fees with the County Treasurer’s Office. During busy periods, she was assisted at the counter by other members of the Clerk and Recorder’s staff. The deputy clerk did the books for Korang when she was on vacation or ill.

In June of 1987, staff members Dori Kuhl and Marylin Bracken met with Clerk and Recorder Sue Bartlett. They expressed concern about problems with the books being kept by Korang. Their concern stemmed from an incident several weeks before. Both women had issued a large number of death certificates one day and had rung up the fees for them on the cash register. They were curious as to how much money their effort had made for the County, and looked at the book entry for such fees at the end of the day. Instead of an entry approximating the $80 that the women had estimated, the book showed that they had taken in only $8. They began keeping track of amounts they collected when assisting at the records counter, and checking them against the books. They concluded that money was missing, and came to Bartlett.

Bartlett began her own investigation. She counted the cash and photocopied the checks in the till at the end of each day; monitored the register tape, books and deposits; and observed Korang as she went about her work. After several days, Bartlett also began to examine adding machine tapes taken from Korang’s waste basket at the end of each day, and kept track of checks and money orders received by mail with requests for copies of birth and death certificates, which Korang kept in her desk. The pattern Bartlett discovered was roughly as follows: (1) miscellaneous transactions entered on cash register key three were voided later in the day; (2) cash in the amount of the voided transactions was taken from the till; (3) either fictitious transactions were then rung up on another code key and checks from Korang’s desk substituted to make up the difference and balance the books, or recording and filing transactions entered in the reception book were not rung up on the cash register. It also appeared to Bartlett that when the amount of cash taken from the till did not exactly match the amount of the checks used to replace it, Korang would make an entry on the cash register to make the total from the register tape for that particular day match the corresponding daily total in the book.

When Bartlett became convinced that Korang was taking money, she suspended her without pay. Mary Craig, a certified public accountant, was then hired to perform an audit of the books. Based on Bartlett’s observations and the results of the audit, Korang was charged by information with two felonies: theft (common scheme) and tampering with public records or information. She was tried before a jury and convicted of both charges. The District Court sentenced Korang to two consecutive 10-year terms in the Women’s Correctional Facility at Warm Springs, but suspended all but 180 days of the terms on the condition that Korang make restitution in the amount of $37,891.25. This appeal followed.

I.

Korang first argues that the evidence presented by the State at trial was insufficient to sustain her convictions. The test applied by this Court to determine whether evidence is sufficient is whether, after reviewing the evidence in the light most favorable to the State, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. If the evidence conflicts, it is for the trier of fact to determine which evidence is dispositive. State v. Tracy (Mont. 1988), [233 Mont. 529,] 761 P.2d 398, 45 St.Rep. 1705.

Korang was charged with theft under § 45-6-301, MCA, which states in part:

“(1) A person commits the offense of theft when he purposely or knowingly obtains or exerts unauthorized control over property of the owner and:
“(a) has the purpose of depriving the owner of the property;
“(6) . . .A person convicted of the offense of theft of property exceeding $300 in value . . . shall be fined not to exceed $50,000 or be imprisoned in the state prison for any term not to exceed 10 years, or both.”

At trial, the State presented testimony by seven witnesses, including Bartlett, Korang’s co-workers, and CPA Mary Craig. These witnesses described Korang’s behavior at work and how that behavior fit the pattern of missing money discovered by Bartlett. The testimony included direct observation of Korang voiding entries on the cash register and making other, unusual entries; direct observation of Korang making unusual calculations when balancing the books; and direct observation of the results of Korang’s work, which produced the altered cash register entries and deposits.

Mary Craig testified that her audit confirmed the pattern observed by Bartlett, and estimated that the money missing as a result of the alterations to the bookkeeping system amounted to approximately $6,000 per year. Her testimony was accompanied by several exhibits, some of which showed actual work done by Korang and some of which summarized Korang’s work. Craig also testified that her audit showed irregularities in the bookkeeping system while Korang was at work, but not when she was ill or on vacation.

Our review of the record shows that a rational trier of fact could conclude from the State’s evidence that Kathy Korang purposely altered entries in the bookkeeping system used by the Clerk and Recorder’s Office in order to gain control of moneys belonging to Lewis and Clark County. Korang’s counsel introduced evidence calling the State’s theory into doubt and attempting to explain the alterations, but as we said in Tracy, it was for the jury to decide which evidence was convincing. We therefore hold that there was sufficient evidence to sustain Korang’s conviction for theft.

The offense of tampering with public records or information is defined in § 45-7-708, MCA:

“(1) A person commits the offense of tampering with public records or information if he:
“(a) knowingly makes a false entry in or false alteration of any record, document, legislative bill or enactment, or thing belonging to or received, issued, or kept by the government for information or record . . .”

As described above, the State introduced testimony including firsthand observations of Korang altering the cash register tapes and deposit slips in order to substitute checks from her drawer for cash removed from the till. This evidence could convince a rational trier of fact that Korang knowingly made false entries or alterations in financial records kept by the Clerk and Recorder’s Office. We therefore hold that there was sufficient evidence to support Korang’s conviction for tampering with public records or information.

II.

Counsel for Korang next argues that the District Court interfered with Korang’s right to a fair trial by inhibiting the cross-examination of State’s witness Mary Craig. At trial, counsel for Korang requested the court’s permission to cease his cross-examination of Ms. Craig, and reserve the right to recall her for further cross-examination after he reviewed the evidence upon which he was basing his questions. The court refused this request, citing the time being taken by the trial and counsel’s ample opportunity to examine all of the evidence before Ms. Craig took the stand.

The parties agree that the applicable rule of evidence, Rule 611, M.R.Evid., authorized the court to exercise reasonable control over the proceedings in order to avoid “needless consumption of time.” Korang cites our decision in State v. Stafford (1984), 208 Mont. 324, 678 P.2d 644, in which we stated that a trial judge must be careful to insure that he remains impartial, and avoids becoming an advocate for one side or the other through his behavior. We also said in that case that the judge must be given sufficient latitude to conduct the trial in an orderly and expeditious fashion. Stafford, 678 P.2d at 648.

The transcript reveals that the court asked counsel for the State if copies of the exhibits had been provided to Korang’s counsel prior to trial, and was told that they had. It appears from the record that Korang’s counsel had ample opportunity to examine the exhibits prior to trial, and the court was within its authority and discretion in denying counsel’s request to suspend cross examination in the interests of avoiding needless consumption of time.

III.

Korang’s final argument takes issue with the restitution ordered by the District Court in consideration for suspending most of Korang’s sentences. According to Korang, the restitution order was improper for two reasons; the amount of restitution went beyond the scope of the offenses charged, and any claim for amounts taken more than two years prior to the filing of the information was barred by the applicable statute of limitations. We disagree.

Korang claims that the restitution order went beyond the scope of the offenses charged by exceeding the authority granted by §§ 46-18-241 through 46-18-249, MCA. Section 46-18-241, MCA, authorizes a court to require an offender to make restitution to the victim of the offense. Under § 46-18-242, MCA, the amount of restitution is based on the pecuniary loss suffered by the victim and the offender’s ability to pay. Section 46-18-243, MCA, defines “pecuniary loss” as follows:

“(a) all special damages, but not general damages, substantiated by evidence in the record, that a person could recover against the offender in a civil action arising out of the facts or events constituting the offender’s criminal activities, including without limitation the money equivalent of loss resulting from property taken, destroyed, broken, or otherwise harmed and out-of-pocket losses, such as medical expenses; and
“(b) reasonable out-of-pocket expenses incurred by the victim in filing charges or in cooperating in the investigation and prosecution of the offense.”

At the sentencing hearing, the District Court received evidence concerning the County’s losses resulting from Korang’s activities, Korang’s ability to pay restitution and the County’s out-of-pocket expenses incurred in prosecuting Korang. On appeal, Korang assigns error to the amount of loss asserted by the County.

Korang points out that the information charging her with theft and tampering with public records or information alleged that she had committed both offenses between July of 1985 and June of 1987. The restitution ordered by the District Court was based in part on the final report of Mary Craig’s audit. Craig’s report concluded that the pattern of Korang’s activities began in 1983 and continued until her suspension in 1987, resulting in losses to the County amounting to approximately $30,250.00. Korang asserts that this amount was not “substantiated by evidence in the record” as required by the statute because she was not being tried for her activities prior to July of 1985. In essence, Korang argues that she has been sentenced for .two years of “criminal activities” for which she was not convicted.

The sentencing hearing is part of the record reviewed by this Court when considering an appeal in a criminal case. In fact, by posing this issue, Korang’s counsel requests that our review of the record include the sentencing hearing in this case. At the sentencing hearing, the State submitted evidence of the County’s loss resulting from Korang’s common scheme theft and attendant records tampering. The evidence showed that Korang’s common scheme began in 1983, and gave a figure for the total loss suffered by the County “arising out of the facts or events” constituting Korang’s common scheme — her “criminal activities.” The court’s restitution order was based on pecuniary loss substantiated in the record.

Korang’s assertion that the statute of limitations bars any claim for amounts taken more than two years prior to the filing of the information is based on § 46-18-244, MCA. That section allows an offender to raise any defense against restitution that he could utilize in a civil action for the losses sought as restitution. According to Korang, one defense available to her was § 27-2-211, MCA, which imposes a two-year period of limitations for an action for penalty, forfeiture, or other statutory liability. We need not address this contention, as Korang did not raise specifically the statute of limitations before the District Court. Section 46-20-701, MCA.

We affirm the decision of the District Court.

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


author: MR. JUSTICE WEBER

text:
    In re the MARRIAGE OF CONNIE A. DIRNBERGER, Petitioner and Respondent, and JEROME A. DIRNBERGER, Respondent and Appellant.
    No. 88-500.
    Submitted on Briefs March 31, 1989.
    Decided May 18, 1989.
    773 P.2d 330.

      Paul Neal Cooley, Skelton & Cooley, Missoula, for respondent and appellant.
    Paulette C. Ferguson, Missoula, for petitioner and respondent.
   MR. JUSTICE WEBER

delivered the Opinion of the Court.

This is an appeal from a dissolution proceeding in the Fourth Judicial District Court, Missoula County. Husband appeals. We affirm in part, reverse in part and remand for further proceedings consistent with this opinion.

The issues are:

1. Did the District Court err in failing to make adequate findings of fact before dividing the marital property?

2. Did the District Court err by not awarding specific visitation rights to husband?

3. Did the District Court err in awarding attorney fees to wife?

4. Did the District Court err in certain rulings?

The parties were married January 24, 1982. Dissolution proceedings were initiated on December 12, 1986. Husband has two minor children from a prior marriage. Wife has a minor daughter whom husband adopted.

Jerome Dirnberger (husband) has a bachelor’s degree in theology and has done graduate studies in anthropology. Connie Dirnberger (wife) has a high school diploma. Husband’s work experience includes bank teller, bank officer, and bank manager. He has also owned and managed several businesses, including Schrader Stoves, Montana Glass, Inc., United Building Services, and Business Advisory Services. Wife has worked as a telephone operator, interior designer, and as alcohol counselor for the Confederated Salish and Kootenai Tribes. Wife is an enrolled member of these Tribes.

When the parties were married wife owned a home in East Missoula, Montana. Husband had just closed the Schrader Stoves business. Soon after marriage the parties sold the East Missoula home and moved to Denver, Colorado. The parties received approximately $2,300 in equity from the Missoula home. During the marriage, husband received approximately $62,000 by bequest from his father. When the parties moved to Denver they purchased a home using proceeds from the home sold in Missoula, combined with money from husband’s inheritance.

The parties later sold the home in Colorado and moved back to Missoula, reinvesting the proceeds from the Denver home into a home in Missoula. At dissolution the equity in the Missoula family home was valued at $13,000. The court ordered that the family home be sold and the proceeds divided equally.

The parties owned two businesses at the time of dissolution: Montana Glass, Inc., and West Pine Partnership which owns rental properties. Montana Glass, Inc. was purchased by the parties in 1985 for $404,000. The purchase price of Montana Glass, Inc. actually comprised the purchase of stock, inventory, and the West Pine Partnership. Husband contributed $40,000 to the purchase price from funds obtained by bequest from his father, and assumed a contract in the amount of $347,000. Husband’s brother contributed $15,000 to the business and husband’s two children each contributed $1,500. Husband and wife owned 70% of this business.

Montana Glass, Inc. was found by the court to have a net market value of $100,000. Because the parties owned 70% of the business, their interest was valued at $70,000. From this value the court deducted $44,000 which was attributable to husband’s inheritance, leaving a value of $26,000 attributable to the marital estate. The court determined the net value of the West Pine Properties to be $2645. Thus the combined net value of the two businesses was $28,645. The court awarded $15,000 of this interest to wife, ordering husband to pay this at the rate of $500 per month until paid. Wife was to transfer her interest in these businesses to husband.

I

Did the District Court err in failing to make adequate findings of fact before dividing the marital property?

“A District Court has far-reaching discretion in dividing the marital property. Our standard of review is that the District Court’s judgment, when based upon substantial credible evidence, will not be altered unless a clear abuse of discretion is shown.” In re Marriage of Stewart (Mont.1988), [232 Mont. 40,] 45 St.Rep. 850, 852, 757 P.2d 765, 767; In re Marriage of Watson (1987), [227 Mont. 383,] 44 St.Rep. 1167, 1170, 739 P,2d 951, 954.

In a marital dissolution the guidelines for property division are enumerated in § 40-4-202, MCA. This statute lists many factors to consider in this apportionment, specifically providing that the court shall consider the estate and liabilities of the parties. The basic goal is that the court must “finally equitably apportion between the parties the property and assets . . .” In construing this statute, this Court has consistently held that this apportionment must be predicated upon a finding of the net worth of the marital estate. Only after a finding of net worth can the trial court make an equitable apportionment. The District Court must make complete findings of fact, including assets and liabilities, from which can be established a net worth of the parties. Schultz v. Schultz (1980), 188 Mont. 363, 613 P.2d 1022, and cases cited therein; Cook v. Cook (1980), 188 Mont. 472, 614 P.2d 511. Additionally, “[i]f the District Court’s findings and conclusions do not reflect the net worth of the parties’ marital assets at the time of their divorce, this Court on appeal cannot determine if the property was equitably divided.” Robertson v. Robertson (1979), 180 Mont. 226, 231, 590 P.2d 113, 116.

The District Court found the marital estate of the parties included the family home, Montana Glass, Inc., and the West Pine Partnership. However, the court made no specific finding as to marital debt, or as to the value of the parties’ personal property. The court simply allocated the unpaid debt to husband. Husband produced evidence at trial demonstrating debts exceeding $55,000, which have been incurred by both husband and wife. The amounts and sources of these debts are uncontroverted. Husband argues that if this debt is subtracted from his share of the marital estate, he is left with a negative net value of over $35,000. In the case of In re Marriage of Metcalf, 183 Mont. 266, 598 P.2d 1140, the trial court failed to consider $12,000 worth of unsecured debt before distributing the marital property, resulting in a net deficit to one party. This Court stated, “This factor, if considered by the court, should have alerted it that the property distribution was inequitable.” Metcalf, 598 P.2d at 1143. Similarly, in the present case, there is no basis for determining whether the apportionment of assets is equitable without a finding on the parties’ liabilities.

We conclude that the District Court’s failure to make a specific finding as to liabilities, thereby precluding a determination of net worth, was an abuse of discretion. Additionally, we note that the court’s decree should include a finding regarding the parties’ personal property in this case, as husband alleges that this value is substantial. “If contested evidence is presented regarding the existence of a marital asset and no findings are made regarding that asset or no explanation provided as to why the District Court did not include or explain the exclusion of such property, the District Court has abused its discretion.” Hammeren v. Hammeren (1982), 201 Mont. 443, 447, 663 P.2d 1152, 1154. We vacate the property division in this case and remand for a redetermination of the property division, using all relevant factors including the consideration of net worth and personal property in a manner consistent with this opinion.

Husband also contends that the court erred in not taking his inheritance into consideration in dividing the proceeds from the family home. While the court subtracted the husband’s inheritance from the parties’ equity in the business, it did not subtract any amount from the equity in the family home which might be attributable to inheritance. The court is required to take an inheritance into consideration in dividing the assets. However, this Court has previously stated that “no definite rule could be established as to how the trial court was to consider this asset. Each case has to be decided on its own facts.” Metcalf, 598 P.2d at 1143, quoting Vivian v. Vivian (1978), 178 Mont. 341, 583 P.2d 1072. In the present case the court took husband’s inheritance into consideration in the property division. We conclude that the District Court did not err in its determination that the equity in the family home should be divided equally.

II

Did the District Court err in not awarding specific visitation to husband?

The dissolution decree awarded custody of the minor child to wife and gave husband “reasonable rights of visitation.” The court also decreed that “Husband may petition the Court for a specific visitation schedule with the minor child if the granting of ‘reasonable visitation’ becomes unworkable.” The child involved in this custody issue is wife’s daughter, Sari, whom husband adopted. Sari is now 16 years old.

Husband contends that it was error for the court not to establish a specific visitation schedule because there is recognized animosity between him and his wife, and because wife has previously discouraged visitation of Sari. We find no abuse of discretion in this case. Considering Sari’s age, the granting of a lenient standard of “reasonable visitation” may be appropriate. The court specifically allowed husband to petition for a specific visitation schedule should the parties’ visitation arrangement turn out to be unworkable. This Court has previously approved the granting of reasonable visitation, rather than a specific schedule in certain cases. See Meyer v. Meyer (1983), 204 Mont. 177, 182, 663 P.2d 328, 331; Sanderson v. Sanderson (Mont. 1981), [191 Mont. 316,] 623 P.2d 1388, 1389, 38 St.Rep. 177, 178. We hold that the District Court did not abuse its discretion in not establishing a specific visitation schedule.

Ill

Did the District Court err in awarding wife attorney fees?

Husband contends that the court abused its discretion in ordering him to pay $3,000 of wife’s attorney fees and costs. He urges that the court’s failure to consider the parties’ liabilities indicates that it failed to consider the financial resources of the parties’ before awarding attorney fees.

In a dissolution proceeding, attorney fees are awarded pursuant to § 40-4-110, MCA, which provides that “[t]he court from time to time, after considering the financial resources of both parties, may order a party to pay a reasonable amount for the cost to the other party . . .”

In view of the court’s failure to make findings on the parties’ liabilities, it could not have properly considered the financial resources of both parties. As in In re Marriage of McGill (1980), 187 Mont. 187, 193, 609 P.2d 278, 279, rev’d on other grounds, 196 Mont. 40, 637 P.2d 1182 (1981), we believe it is best to vacate the attorney fee award and leave this to the discretion of the trial court on remand. We therefore vacate the award of attorney fees and remand for further consideration.

IV

Did the District Court err in allowing certain evidence at trial?

Husband contends that the court erred in allowing wife’s late filing of proposed findings of fact and conclusions of law. Wife did not file proposed findings of fact and conclusions of law until the day before trial. On the day of trial, husband requested sanctions for late filing pursuant to Rule 8, Uniform District Court Rules. The court first imposed a sanction prohibiting wife from presenting any evidence at trial. However, the court withdrew that order when wife reminded the court that it had previously agreed to allow her an extension of time to file her proposals. We note that the language of Rule 8 allows the court discretion in awarding sanctions. In the absence of any showing by the record that the District Court committed an abuse of discretion, we will not overturn the decision of the lower court.

Husband also alleges that the court erred when it retracted its order excluding wife’s expert from testifying. On the first day of trial, January 22, the court excluded wife’s expert, Tracy Blakeslee, a CPA who was to testify to the value of Montana Glass, Inc. This exclusion was based on the fact that wife had not supplemented interrogatories in a timely fashion to notify husband of this expert.

Relying on this order, husband declined the court’s offer of a continuance and elected to try the case that day. However, at the close of the first day of trial, husband requested a continuance in order to brief a certain issue. The court granted this continuance, and because of scheduling problems, the trial was not resumed until March 16, nearly two months later. When trial resumed on March 16, both husband’s expert and wife’s expert were allowed to testify as to the value of the business. Husband claims surprise, and also that the retraction of the order negated his trial tactics, in that he assumed only his expert would testify as to the value of the business.

It is not clear from the record at which point or for what reason the court retracted its order. In view of the fact that the trial was continued for nearly 2 months, we conclude no abuse of discretion has been shown on the part of the trial judge in allowing wife’s expert to testify. In the event husband contends he should be allowed to submit additional evidence because of the Blakeslee testimony he may present that request to the trial court for consideration on remand.

We affirm in part, reverse in part and remand for further proceedings consistent with this opinion.

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


author: MR. JUSTICE SHEEHY

text:
    In re the MARRIAGE OF PATTI JEAN ROBERTSON, Petitioner and Appellant, and RICK LEE ROBERTSON, Respondent and Respondent.
    No. 88-588.
    Submitted on Briefs Feb. 23, 1989.
    Decided May 18, 1989.
    773 P.2d 1213.
    Cameron, Ferguson, Hartelius, Ferguson & Baker, Great Falls, for petitioner and appellant.

      Barbara Bell, Bell & Marra, Great Falls, for respondent and respondent.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

This is an appeal from an order of the District Court of the Eighth Judicial District, Cascade County, which modified the decree of dissolution relating to maintenance for appellant. We reverse and remand.

The principal issue raised by Patti Jean is whether a district court may modify maintenance provisions for a wife, where the district court has approved and incorporated in the decree a property settlement agreement presented by the parties. We hold here that the District Court has no such power and so reverse. The specific provisions of the property settlement agreement here are important to our holding.

Patti Jean Robertson, appellant, and Rick Lee Robertson were married on June 24, 1983, in Great Falls. On April 28, 1985, their only child, a son was born. A petition for dissolution was filed by appellant on April 10, 1986. A decree of dissolution of marriage was granted on December 18,1986 on the grounds that the marriage was irretrievably broken and that there was serious marital discord which adversely affected the attitudes of both parties. A property settlement, executed on September 19, 1986 was approved and incorporated into the decree. Although the parties agreed to joint custody of their child, the mother had physical custody and primary care of the child. The father had rights to visitation which he had the option of exercising.

The decree provided for the support and maintenance of the child as follows:

“4. SUPPORT: Wife contemplates that for the next four years she will be attending the University of Montana in Missoula, Montana. With the college education and degree, Wife contemplates that she will then be able to obtain a much higher paying job then [sic] she could obtain at the current time. Husband agrees to pay wife $500 per month for the next four years while she is attending school plus an additional period of six months following her graduation at the end of the fourth school year to allow her time to find good employment after graduating and set up a household in the location where she will be working. $250 per month of this $500 per month shall be spousal maintenance. The other $250 per month shall be child support. At the end of six months after Wife graduates, husband shall be required to pay $250 per month as child support. There shall be no further spousal maintenance obligation . . . .”

The parties are agreed that there are no issues relating to the right of the spouse to the child support payments set forth in the property settlement agreement.

The decree additionally contains the following provisions:

“5. PROPERTY DIVISION: Husband shall be able to retain all rights which he has in the retirement account and profit sharing account and other forms of investment. [The value of the profit sharing plan at the time of the divorce was $20,106.00. The value of the retirement plan was $1,716.00.] Husband agrees to pay Wife the sum of $2,000 per year for each of the next four years to assist Wife in her tuition, books and other school expenses. This sum can be paid quarterly. Payment for the first quarter is due September 15, 1986.
“The parties have offered their house in Great Falls for sale. Out of the net sales proceeds, Husband shall be entitled to pay his parents the remaining sum due on the loan which the parties borrowed for part of the down payment. This sum, however, may not exceed the sum of $2,000. Husband may also reimburse himself for the amount of attorney fees which he has paid Wife’s attorney under the provision of this agreement labeled attorney fees [$850.00]. The remaining balance shall be equally split between the parties.
“8. MODIFICATION OF AGREEMENT: Husband and Wife agree that except as to provisions involving child custody, support and visitation this Agreement may not be modified by any subsequent Court order following the divorce, except on express written acknowledged consent of the parties.
“9. WAIVER OF PROPERTY RIGHTS: All property received and retained by the parties pursuant hereto shall be the separate property of the respective parties, free and clear of any right, interest or claim of the other party, and each shall have a right to deal with and dispose of his or her separate property, as fully and effectively as if the parties had never been married.
“10. MUTUAL RELEASE: Subject to the provisions of this Agreement, each party by this Agreement for himself or herself, his or her heirs, legal representatives, executors, administrators, and assigns, releases and discharges the other of and from all causes of action, claims, rights or demands, whatsoever which either of the parties ever had or now has against the other.”

The parties also agreed that:

“In the event any party breaches the terms of this agreement in the future, the prevailing party in any court proceeding shall be awarded his or her attorney fees from the other party.”

On November 2, 1987, the husband petitioned the court to modify the spousal maintenance provisions set out above. On January 27, 1988, a hearing was held on that motion and on October 11, 1988, the District Court issued an order modifying the Decree of Dissolution. This order deprived the mother of all spousal maintenance and the $2,000.00 per year for her tuition and other college expenditures. The mother appeals that order.

Modification of Court Decree

Rick Robertson contends that the payments to Patti Robertson constitute maintenance and not a property settlement, and that, therefore, the court should modify the agreement because it was unconscionable. The statute governing this premise is § 40-4-208, MCA (1987).

“Modification and termination of provisions for maintenance, support, and property disposition. (1) Except as otherwise provided in 40-4-201(6), a decree may be modified by a court as to installments accruing subsequent to actual notice to the parties of the motion for modification.

“(2) . . . (b) Whenever the decree proposed for modification contains provisions relating to maintenance or support, modification under subsection (1) may only be made:

“(i) upon a showing of changed circumstances so substantial and continuing as to make the terms unconscionable;”

However, § 40-4-201(6), MCA (1987), as referred to in the above statute directs us that

“Except for terms concerning the support, custody, or visitation of children, the decree may expressly preclude or limit modification of terms set forth in the decree if the separation agreement so provides.” (Emphasis added.)

Under the statutes, the District Court does have the power to reopen a prior decree on the grounds of unconscionability if the support at issue is child support, custody, or maintenance that is not integrated with a property settlement.

“The property disposition provisions of a dissolution decree may only be modified where the parties give their written consent or where the agreement is subject to rescission or modification under the general law governing all contracts.”

In re Marriage of Richardson (1985), 214 Mont. 353, 693 P.2d 524.

Patti Robertson entered into a property settlement and gave up the right to any future support beyond four years of college and the six months thereafter. She relinquished claims against Rick Robertson’s retirement, savings and profit sharing accounts acquired during the marriage. These accounts were subject to discovery at the time of the dissolution and Patti Robertson had the right to implement full discovery procedures. On December 31, 1986, those accounts showed the following balances: Employee Stock Ownership Plan $20,106.00 and Carpenter’s Retirement $1,716.00. Patti gave up that right her claim to those funds as consideration for the exchange promise from Rick Robertson that he would pay her tuition of $2,000.00 per year ($167.00 paid monthly) and payments of $250.00 per month in lieu of that property.

The couple had agreed that Rick would sell the family home in which they were living and from the proceeds of that sale he would repay Patti Robertson’s attorney fees of $870.00. They were to have split the remainder of any proceeds after all expenses were paid. After the dissolution was final, Rick moved out of the home which they purchased for $54,000.00. Patti had moved out before the dissolution. In its vacant state it sold for $47,000.00. Rick did not divide the proceeds with Patti quite as he agreed. He himself received “$3,000.00 or so” from the sale, paid the $870.00 attorney fees and gave Patti $1,000.00.

It is clear to this Court that the wife’s monthly payments were an inseverable part of a property settlement arrangement. The obligation was undertaken by the husband in exchange for the wife’s forbearance in regard to the property of the marital estate. This Court in Washington v. Washington (1973), 162 Mont. 349, 356, 512 P.2d 1300, adopted the rule that

“. . . if support provisions have been made an inseverable part of the agreement between husband and wife to divide their property, and the court in the divorce action approves the agreement, the provisions of such agreement cannot thereafter be modified without the consent of both of the contracting parties.”

It is obvious here as it was in Washington, 162 Mont. at 354, 512 P.2d at 1303, that one cannot sever the maintenance provision from the property settlement agreement between the parties without destroying the contract.

We hold that the contractual property agreement was not subject to modification and the District Court erred in so modifying.

Timeliness of Appeal

The husband contends that the judge’s oral comments made during the hearing of January 27, 1988 constituted the entry of final judgment. Husband’s counsel argues that there was no doubt what the court ordered and that the husband relied on that order and stopped paying maintenance at that time. The written order of the court was issued October 11, 1988. Patti appealed shortly thereafter. Husband argues that Patti should have appealed within 30 days of the January hearing.

Pursuant to Rule 77(d), M.R.Civ.P., notice of entry of judgment must be served by the prevailing party upon all parties who have made an appearance in the cause. Hankinson v. Picotte (Mont. 1988), [235 Mont. 143,] 766 P.2d 242, 45 St.Rep. 2259. It is the filing of the notice of entry of judgment that begins the running of the time limits for filing a notice of appeal. Hankinson, supra; Morrison v. Higbee (1983), 204 Mont. 501, 668 P.2d 1029. If no notice of entry of judgment has been served on the losing party, the right to appeal has not expired. Haywood v. Sedillo (1975), 167 Mont. 101, 535 P.2d 1014. Unless post-trial motions are made by a party under Rule 52 or 59, M.R.Civ.P. the appealing party is not required to adhere to the 30 day period for filing a notice of appeal until proper service of notice of entry of judgment is made. Hankinson, supra. Pierce Packing Co. v. District Court (1978), 177 Mont. 50, 579 P.2d 760.

The record before us indicates that no notice of entry of judgment was served by the prevailing party as required under Rule 77. Since it is necessary for this step to be taken before the time limit for the appeal begins to run, the appeal was timely. The time limitations had not yet begun to run.

Moot Issue

The next issue raised is whether, as the District Court found, there was a change in circumstances so substantial and continuing as to make the original custody and property settlement agreement spousal maintenance provisions unconscionable.

Because we hold that the decree in this case cannot be modified as above stated, this issue is moot.

Attorney Fees

The property settlement agreement incorporated in the decree provides for attorney fees to the prevailing party when any party breaches the terms of the property settlement agreement. Wife is entitled to attorney fees here and in the District Court.

The order of the District Court is reversed and the original decree is reinstated. Attorney fees on remand to the wife as the prevailing party.

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