author: JUSTICE WEBER JUSTICE TRIEWEILER JUSTICE GRAY

text:
    IN RE THE MATTER OF M.A.W. and K.M.W., Youths in Need of Care.
    No. 92-028.
    Submitted on Briefs June 11, 1992.
    Decided February 2, 1993.
    50 St.Rep. 64.
    256 Mont. 296.
    846 P.2d 985.

      For Appellant: John Houtz, Forsyth; Marcey F. Schwarz, Schwarz and Gustafson, Billings.
    For Respondent: Marc Racicot, Attorney General, Patricia J. Jordan, Assistant Attorney General, Helena; John S. Forsythe, County Attorney, Forsyth; and Garry P. Bunke, Miles City.
   JUSTICE WEBER

delivered the Opinion of the Court.

After a hearing, the District Court for the Sixteenth Judicial District, Rosebud County, terminated the parental rights of the mother and the father (who were divorced at the time of the hearing) to their children, M.A.W. and K.M.W. The mother has not appealed the termination of her parental rights as to either child and is not a party to this action. The father appeals the termination of his parental rights as to K.M.W. only. We affirm.

The issues for our review are:

1. Were the statutory requirements for termination of parental rights met?

2. Did the District Court err in denying disclosure of evidence to the father?

3. Did the District Court err in refusing to replace Garry Bunke as guardian ad litem after he began to work part-time as a deputy county attorney in another county?

4. Was the District Court biased in favor of the county?

5. Did the District Court err in declining to allow the child to testify?

Two daughters were born of the marriage, M.A.W. and K.M.W. In June of 1987, the father contacted Barb Rolston, a Department of Family Services (DFS) community social worker, because he was concerned about physical and emotional abuse by the mother of K.M.W. On June 22, 1987, the father filed a petition for dissolution of marriage and a supporting affidavit requesting that the court issue a temporary restraining order against the mother to keep her away from the children. In his affidavit, the father averred that the mother had threatened to physically harm the children.

In January of 1988, the District Court requested that Barb Rolston look into the home situation of each parent in connection with the divorce action. Barb Rolston testified that before she could complete her home study the mother made a referral about possible sexual abuse of KM.W. by the father’s sister, Lynnette. Barb testified that when she first tried to interview KM.W., “she had one of her screaming tantrums and I think either the next day or two days after, I received a referral from the Public Health Nurse regarding medical neglect. ” At that point, pursuant to court order, the DFS removed the children from the home and placed them in foster care.At the hearing in June 1991, the foster mother testified that K.M.W. was two years old and M.A.W. was less than one year old when they came to five with her. She testified that “they were both very maladjusted children, quite upset, not physically cared for. ” She testified that KM.W. had constant nightmares and awoke several times a night screaming. The foster mother testified that K.M.W. would act out different abuses that she had been through including acting out things being put into her vagina, her hands being tied up and trying to have sex with her little sister, MA.W. The foster mother testified further as follows.

Q. Now, how would she act these things out; would she physically do these sorts of things to herself?
A. Right, right. And she would even, her voice would even change as she began to say things that she was repeating and go through the motions of what had happened. She would hold her hands together and I’d ask her, “Why do you have your hands together?” “They are tied up.” And I would ask her questions with each thing she did and she would respond.
Q. Now, you stated there was some acting out sexually with [M.A.W.]; what did you observe there?
A. She was constantly trying to insert things into [M.A.W. ’s] vagina; whether it was a shampoo bottle sitting on the side of the tub or whatever she could ...

The foster mother testified that KM.W. told her that the “bad man” did these things to her and that “Mommy was the bad man”. In its June 1988 order declaring the marriage dissolved, the District Court found that the mother was not fit to care for her children and awarded physical and residential custody of the children to the father subject to continuing supervision by the DFS. The District Court specifically ordered that the father should not permit the children to have any unsupervised visitation with the mother.Notwithstanding the order forbidding the same, two weeks later on June 24, 1988, DFS was informed that the father had left the children with the mother for approximately two days. Investigation by a social worker for DFS and Detective Skillen disclosed the children in the unsupervised custody of the mother, in direct contradiction to the order of the District Court. On June 28,1988, the DFS filed a petition for temporary investigative authority. The children were removed from the mother’s custody and placed in licensed foster care. On the basis of the DFS’ allegations that K.M.W. and M.A.W. were abused, or in danger of being abused and neglected, within the meaning of Section 41-3-102, MCA, the District Court granted the DFS temporary investigative authority. On August 19, 1988, an amended petition was filed, requesting continuation of the temporary investigative authority and temporary custody of the children for six months. Both the father and the mother consented to this request. The father had moved to Idaho during 1988 and the mother had moved to Utah. Following a hearing, temporary custody was granted to the DFS. A treatment plan was developed by the DFS and approved by the court on January 16, 1989.

The January 1989 treatment plan required that the father complete the following items:

1. Enter and successfully complete a recognized parenting education program;

2. Undergo a complete psychological evaluation and comply with recommended treatment;

3. Enter into counseling with a professional mental health counselor to deal with the client’s lack of assertiveness; to develop firm and effective methods of discipline; to understand the children’s needs as victims of sexual offense; as well as physical and emotional abuse; and to deal with other issues identified in the evaluation;

4. Complete a chemical dependency evaluation with a recognized chemical dependency counselor, and complete a treatment program if recommended;

5. Arrange for a home visit to be done by the local social service agency and for a copy to be forwarded to the Department of Family Services;

6. Request assistance from the local agency to arrange and coordinate services for the [above listed objectives];

7. Cooperate with the recommendations and requests of the local agency;

8. Contact the children on a monthly basis, by writing letters to them;

9. Confer with the supervising social worker regarding his own and children’s current status.

On September 12, 1989, Barb Rolston filed a report with the court indicating that Idaho had denied placement of the children with the father because he did not have a place to five and had not completed any of the treatment plan. Ms. Rolston indicated that the father’s visits had been sporadic. Her report further stated:

[The father] continues to be too passive to parent or protect his daughters. Because [the mother] has threatened to kidnap the girls and she is able to get information from [the father’s] mother, [the father’s] only requirement prior to visiting the girls was to agree to tell no one where they were. When his relatives started writing to the foster homes, [the father] indicated he didn’t see what it could hurt to tell them. While he denies any alcohol problems, he has not completed an alcohol evaluation and he continues to be involved with other people who do have alcohol problems .... [the father] will need extensive counseling to be able to comprehend the effects of their abuse on the girls, to parent them effectively, and to protect them from further abuse.
[K.M.W.] has been in a therapeutic foster home specializing in sexually abused children since November 7, 1988. Until recently she was uncooperative in therapy and exhibited a great deal of anger. Since joint sessions with [M.A.W.] began in June, [K.M.W.] has progressed more rapidly in therapy. She will need to be in the program at least another six months.
Both children continue to need specialized therapeutic foster care. Neither parent has obtained adequate housing nor completed court approved treatment plans. Each girl has made separate and consistent allegations of sexual abuse by [the mother]. She continues to deny the abuse and is therefore a poor candidate for therapy.

Based on that report, on September 19, 1989, the DFS filed a petition for temporary legal custody of both children. KM.W. was four years old at the time of the petition. M.A.W. was two and one half years old at the time of the petition. The District Court granted the DFS temporary legal custody of the children in its order of September 21, 1989.

Pursuant to another petition by the DFS, on November 20, 1989, the District Court held a hearing in which the father, his current wife Billie Jo, and Barb Rolston all testified. The father testified as follows:

Q. [Father], do you realize that we are at a critical time as far as the kids are concerned right now?
A. Very much so.
Q. The professionals are saying that a decision has to be made as to permanent custody within the next six months?
A. Yes.
Q. You understand that?
A. Yes, I do.
Q. And that if you can’t get your living situation to a point where they feel they can safely place one or both of the children with you, they will recommend placement outside the family?
A. Yes, I do understand that.
Q. And you -understand that no one is blaming you for the sexual molesting?
A. Yes, I understand that now.
Q. But do you also understand that just the fact that it happened that if [the mother] did this that that leaves the children with severe scars?
A. Very much so. It leaves me with severe scars knowing that it happened to them and I didn’t know it was going on.
Q. No one is asking that you take counseling for sexual abuse because you did it; you understand that?
A. Mm-hmm.
Q. It’s because you need that to be able to deal with the children and also your own emotions?
A. Yes, I understand that.
Q. You are willing to submit to such counseling?
A. Yes, I am.

The court found that it was not in the best interests of the children to be returned to the parental home of either the mother or the father; that the mother had made no attempt to comply with the court approved treatment plan; and that the father had only partially complied with the treatment plan. In its order dated February 8, 1990, the District Court ordered the father to make substantial progress on the treatment plan within 90 days, and in pertinent part stated:

Now, the criteria for determination are that there was an appropriate treatment plan that’s not been complied with. The second part of that is that the conduct or condition of the parents rendering them unfit is unlikely to change within a reasonable period of time. And for whatever reason the parents including the father, have not complied.
I think it’s the position of [DFS] that two years is a reasonable time. The Court is affording an additional 90 days for substantial progress and with the entire treatment plan to be completed in six months.
This will be approximately 21^years and although there are very fundamental rights as far as the rights of natural parents, those rights are secondary to the rights of the children and what is in the best interest of the children.
And at this point, it is imperative that the best interest of the children be served by permanency within a very — within a fairly short period of time at this time. (Emphasis supplied.)

On May 24, 1990, Barb Rolston filed another report with the District Court. That report showed that the father had failed to schedule any of the required treatment for six weeks, notwithstanding the requirement on the part of the District Court. The report demonstrated that the father had not participated in parenting classes; and that both the father and his wife, Billie Jo, chose not to follow K.M.W.’s daily schedule or familiar discipline procedures, which created some of KM.W.’s inappropriate behaviors. Ms. Rolston further noted that K.M.W. wanted to live with her father and that she would “effectively undermine any attempt to place her with another family. ” Ms. Rolston recommended that K.M.W. be placed with her father as soon as possible.

On June 8, 1990, the deputy county attorney, Gary Ryder, filed a stipulation between the county and the father, that K.M.W. would be placed with him and that he would assume full financial responsibility for her care. Immediately upon being placed in the father’s home, which then was in Idaho, five year old K.M.W. sexually assaulted her stepmother’s baby girl (Baby C). This was reported to the Rosebud County Attorney by a relative of the father’s. The Idaho Department of Health and Welfare social worker who had worked with the father since January revealed that she had never been informed of the incident with Baby C. Furthermore, the father failed to follow through with the Idaho welfare services. K.M.W. was removed from his home again and returned to foster care in Montana.

After K.M.W. was returned to foster care in Montana, Ms. Rolston reported that the father remained in only sporadic contact with KM.W. and failed to keep a number of promises which he had made to her. Ms. Rolston concluded that K.M.W. had fewer problems in foster care than she had prior to her Idaho visit and that she had began asking for a new daddy. She concluded that KM.W. would adjust to an adoptive placement and that because she may revert to inappropriate sexual behaviors if her situation is too stressed or unstructured, she needed to be in a stable environment, which the father had never provided for her. Ms. Rolston testified to the pattern of conduct on the part of the father which extended over the past three years, stating in pertinent part:

Over the past three years [the father] has continued to demonstrate a pattern of denial and inappropriate responses that endangered not only his own daughters, but other young children as well. Aware of services available to deal with his family’s crises he has not sought assistance. He has left his young daughters in their natural mother’s care, knowing she had molested them; he enrolled [KM.W. ] in a pre-school without advising staff to protect other children; he left his already exhausted wife to deal with issues of protecting her own child from [KM.W. ]. The birth of another child in that home creates another potential victim to protect. The reconciliation is too recent to be considered stabilized and Billie Jo has expressed serious reservations about parenting [KM.W. ].

Ms. Rolston recommended that the father’s parental rights be terminated and that KM.W. be permanently placed as soon as possible. On December 31,1990, a petition for the termination of the parental rights of the father was based upon the failure of the treatment plan. Following a hearing held on June 17,18 and 19,1991, the petition was granted. The father filed a motion for a new trial, which was denied. He now appeals the termination of his rights as to KM.W.

I

Were the statutory requirements for termination of parental rights met?

Section 41-3-609, MCA, provides the criteria required for the termination of parental rights. It provides (in part):

(1) The court may order a termination of the parent-child legal relationship upon a finding that any of the following circumstances exist:
(c) the child is an adjudicated youth in need of care and both of the following exist:
(1) an appropriate treatment plan that has been approved by the court has not been complied with by the parents or has not been successful; and
(ii) the conduct or condition of the parents rendering them unfit is unlikely to change within a reasonable time; or
(d) the parent has failed to successfully complete a treatment plan approved by the court within the time periods allowed for the child to be in foster care under 41-3-410 unless it orders other permanent legal custody under 41-3-410.
(2) In determining whether the conduct or condition of the parents is unlikely to change within a reasonable time, the court must enter a finding that continuation of the parent-child legal relationship will likely result in continued abuse or neglect or that the conduct or the condition of the parents renders the parents unfit, unable, or unwilling to give the child adequate parental care. In making such determinations, the court shall consider but is not limited to the following:
(g) any reasonable efforts by protective service agencies that have been unable to rehabilitate the parent.
(3) In considering any of the factors in subsection (2) in terminating the parent-child relationship, the court shall give primary consideration to the physical, mental, and emotional conditions and needs of the child

The State has the burden of showing by clear and convincing evidence that the statutory criteria for the termination of parental rights have been met. Matter of A. W. (1991), 247 Mont. 268, 806 P. 2d 520. A presumption of correctness is afforded the district court’s determination, and the decision to terminate parental rights will not be disturbed on appeal unless there is a mistake of law or a finding of fact not supported by substantial credible evidence that would amount to a clear abuse of discretion. Matter ofS. P. (1990), 241 Mont. 190, 194, 786 P. 2d 642, 644.

The father vehemently argues that he completed the treatment program. The record demonstrates that the father failed to comply with the January 1989 treatment plan in several respects. In particular, the father failed to enter into counseling with a professional counselor to deal with his lack of assertiveness, to develop firm and effective methods of discipline, to understand the children as victims of sexual offense as well as physical and emotional abuse, and to deal with other issues identified in the evaluation. The father emphasizes that K.M.W. had expressed her desire to live with him and stated in letters to him how much she loved him. He submitted copies of phone bills as evidence of his telephone calls to K.M.W. , and photographs of his current home in Idaho as evidence that he had a proper home for KM. W. to live in. The father acknowledges that he made a mistake in allowing the mother to be with the two children in an unsupervised capacity in 1988. With regard to the sexual assault of Baby C by K.M.W., the father contends that by sitting K.M.W. down and talking to her about it, he properly handled the situation. He maintains that the testimony of Billie Jo and his mother that he is a good father who loves his children is further evidence that his parental rights should not be terminated.

Ms. Rolston of the DFS, testified at length as to the severe problems on the part of K.M.W. and the inability of the father to deal with such problems. In pertinent part she testified:

[Questioning By Guardian Ad Litem Bunke]:
Q: Does it appear to you that a lot of these moves relate to his lack of assertiveness with other people?
A: One of the evaluators indicated that [the father] takes the path with least resistance and I think that if something comes up that presents an issue then [the father] moves on, either to get away from that issue or because it’s the easiest thing to do.
Q: And in dealing with his children, does assertiveness become an issue or a problem, especially as it relates to [K.M.W. and M.A.W.]?
A: [K.M.W.] is probably the most manipulative preschool child I have ever seen. She is very intelligent, very, very, very, controlling. And I don’t think [the father] would stand a chance of being the head of the household with [K.M.W].
[By Father’s Attorney]:
Q: Now, someone has describe these children as having special needs. Would you describe them as having special needs?
A: Yes.
Q: And would you describe what some of these special needs are. For example, maybe you can begin with [K.M.W.].
A: [K.M.W.], ... requires a high level of consistency .... She — [K.M.W.] required over six months to become comfortable with me as a therapist. I’ve never had a child who was that fearful in my sixteen years of practice with children. She is a very easily frightened child, needs security, needs to know that there’s predictability in her environment. She can’t tolerate instability. That’s not good for any children. But [KM. W. ’s] needs — it’s higher than most children. And it appears to be related to her traumatic experiences prior to placement. She needs to have parents who — because of that need for consistency and stability, she needs to have parents who can anticipate concerns in her environment, who can realize that she will be upset and prepare her for any kind of change. Without that, she’s probably going to regress to the level of behavior that she had when we got her, which was screaming and withdrawing whenever she became uncomfortable. And I’m not talking about a child simply screaming for a few minutes. This is a child who would scream for incredible lengths of time .... In addition to those behaviors that are a real concern, she will continue to require a high level of supervision. She continues to be sexually aroused by other children. And because of her age and developmental state, she’s not able to completely handle those feelings on her own. So she’ll require parents who understand and can supervise her so that she doesn’t — is not placed in a situation where she may be sexually aroused by other children and, hence, display sexual behavior toward them. I think it’s really important to understand that if we place children with other children and inadequate supervision when they are — when they do have an arousal pattern, we really victimize them as well as the other child

Ms. Rolston also testified that the family assessment revealed things that the father had not shared with them. For instance, she testified that when K.M.W. was placed in his care, the father did not follow the schedule provided for K.M.W. to follow for even one day. She testified that when K.M.W. was not in the father’s care he moved without telling the DFS where he was going and failed to contact K.M.W. within two days as he had promised her. Instead it took three weeks before he contacted her. When he did contact K.M.W., he made promises to send her things and then failed to keep his promises.

The District Court determined that K.M.W. was abused or neglected as defined in Section 41-3-102, MCA, and also adjudicated her to be a youth in need of care as required under Section 41-3-609(l)(c), MCA. In regard to the treatment plan, and the failure on the part of the father to complete the same, the District Court made the following finding:

15. [The father] has failed to complete his treatment plan in that he has failed to maintain the required contact with the social worker, Barbara Ralston (sic); he has failed to maintain regular contact with the children; he has failed to obtain specialized treatment to increase his awareness and ability to cope with the behaviors of a child who has been sexually abused and who may sexually abuse others; he has failed to obtain assertiveness training to bolster his ability to parent an intelligent, manipulative child or an out of control child, both with special needs.

We have carefully reviewed the extensive transcript and conclude that there is substantial, if not overwhelming evidence that the father did not comply with critical parts of the January 1989 treatment plan. In particular, while he did receive some psychological evaluation, he failed to complete any treatment as recommended by such evaluations. In addition, he failed to enter into counseling with a professional counselor to deal with his own lack of assertiveness and to develop the effective methods of discipline which were required. In addition, such counseling would have helped him to understand the children’s needs as victims of sexual offense and the physical and emotional abuse and to deal with other issues identified in the evaluation. Unfortunately, the father continues to deny various aspects of the sexual offenses against his children and the need for treatment. In that regard, the District Court made the following finding:

16. After [the father] made some progress on the treatment plan, in the late Spring of 1990, at the request of [K.M.W. ] and on the recommendation of the treating professionals, [K.M.W. ] was temporarily placed with her father, [he] and his current wife, Billie Jo. The placement resulted in some competitive behavior, yelling and screaming, of [K.M.W. ] and her new stepsister [Baby C]. Ultimately, [K.M.W. ] sexually assaulted [Baby C], a younger child, twice. Billie Jo, who had attended special classes for non-offending parents of sexually abused children, wanted to report the incidents to DFS and seek appropriate assistance. [The father], asked Billie Jo not to report the incident as he was afraid that DFS would remove [K.M.W. ]. Billie Jo acquiesced in this decision and the matters were handled by [the father] and Billie Jo talking to the children and telling them that they should not do such things. DFS discovered the abuse through other family members, immediately investigated. [K.M.W. ] was removed from her father’s home in late July 1990 and returned to her specialized foster care home on August 3, 1990. [K.M.W. ] was removed, not because of her acting out, but because of her father’s denial and apparent inability or unwillingness to seek appropriate assistance to help [K.M.W. ]with her special needs. (Emphasis added).

The father contends that the Idaho report demonstrates that he and Billie Jo had followed their treatment plan and that a multitude of other documents establish attendance at parenting classes, classes involving care and treatment of sexually abused children, and other things that Idaho requested. However, as the District Court pointed out, the father’s testimony throughout this entire process has wavered with respect to whether he will even admit that there has been sexual abuse and testified that he would comply “if it was necessary”. The record contains uncontradicted evidence that K.M.W. was seriously sexually abused. However, in spite of the DFS’ constant prodding of the father in an attempt to get him to comply with the plan, he still refused to do so.

Since K.M.W. has returned to her foster home, the father’s contact with her has again been sporadic and he has continued to break promises to her. The District Court granted the father an additional six months to complete the treatment plan, which allowed him a total of more than 2 V2 years to comply. We agree with the District Court’s conclusion that there is overwhelming evidence that the father did not fully comply with the treatment plan and that the condition is unlikely to change within a reasonable period of time. We therefore hold that the District Court properly ordered a termination of the parent-child legal relationship under Section 41-3-609, MCA. The record clearly demonstrates that K.M.W. is an adjudicated youth in need of care and that an appropriate treatment plan had been approved by the court and was not complied with by the father, and that the conduct or condition of the father rendering him unfit is unlikely to change within a reasonable time.

Although we affirm the District Court’s decision to terminate parental rights for the reasons stated above, we also point out that the District Court could have terminated the father’s parental rights in this case under Section 41-3-410, MCA. That section provides (in part):

The court may terminate parental rights under 41-3-609(2) or order other permanent legal custody that will provide for the permanent placement of the child when legal custody of a youth has been transferred to the department under this part and:
(2) the child has been in an out-of-home placement for a cumulative total period of 2 years or longer pursuant to court order, the parent has been unable to remedy the circumstances that cause the child to be in an out-of-home placement, and there is a substantial likelihood that the parent will not be capable of exercising proper and effective parental care and control in the near future.

K.M.W. has been in out-of-home placement for more than two years. Furthermore, as already discussed, the record supports the District Court’s finding that the father has failed to comply with the treatment plan and there is a substantial likelihood that he will not be capable of exercising proper and effective parental care and control in the near future.

We recognize the dilemma in which the District Court was placed in reaching its decision on this issue. The father has testified at length as to his love of K.M.W. Notwithstanding such love, he has demonstrated his inability to recognize the sexual abuse perpetrated upon his daughter and the extent of the damage which that has caused her, both psychologically and emotionally. As a result, he has not in good faith completed a program which would allow him to deal with this aspect of his daughter’s care. Evidence of a loving relationship does not counter balance the extensive need for care on the part of K.M.W. in order that she may develop, notwithstanding the mistreatment she has received. The best interests of K.M.W. clearly outweigh the claim on the part of the father.

We hold that the statutory requirements for terminating the parental rights of the father were met by the District Court.

II

Did the District Court err in denying disclosure of evidence to the father?

On April 19, 1991, the father moved for sanctions under Rule 37(b)(2)(B), stating that he had been denied preliminary discovery by the county attorney’s office. The State responded by an objection to the disclosure of reports prepared by foster parents, claiming the reports were privileged information. Following that objection, in May 1991, the father moved for an “in camera” inspection of the entire DFS file.

In its pretrial order dated June 6, 1991, the District Court stated that the father’s attorney had requested an “in camera” inspection of the entire DFS file by the attorneys for the father. An “in camera” inspection by definition is made by the court — not counsel for defendant. While acknowledging this fact, the court suggested that counsel describe the type of documents in which the father was interested so the DFS had an opportunity to advise the court of the parts of the voluminous file which were deemed confidential and should not be disclosed. The court suggested that after the “in camera” examination it would then determine what was relevant and necessary to the father. The court emphasized that the father had not in any way identified what he was looking for. The court ordered the DFS to bring the file to the court for trial so that the court could properly reconsider the motion. At trial the father’s counsel failed to furnish any type of identifying information and the motion for inspection of the voluminous files was denied.

Subsequently the father moved for a new trial. One of the grounds was the denial of inspection of the DFS file. In its order denying the father’s motion for a new trial, the court stated:

With respect to Counsel’s request for disclosure of evidence, the Court has two explanations. First, it was the Court’s understanding at the pretrial conference that the Respondent-Father had everything that he needed, Counsel should file a prompt motion specifying the particular information needed, the Department could then mark the information in the voluminous file and also mark any information in the relevant portions of the file, it considered confidential. The Court would then examine the file and decide which information was relevant and should be disclosed. Second, when the request for examination of the Department of Family Services file was repeated by counsel, it did not specify the information requested or delimit it in any way. Counsel for the Respondent-Father wanted to conduct an “in camera” inspection of the entire file himself. It appeared to the Court that counsel was merely on a fishing expedition and did not approve the same.

The applicable statute on this issue is Section 41-3-205, MCA, which in pertinent part provides:

(1) The case records of the department of social and rehabilitation services ... and the court concerning actions taken under this chapter and all records concerning reports of child abuse and neglect shall be kept confidential except as provided by this section. Any person who permits or encourages the unauthorized dissemination of their contents is guilty of a misdemeanor.
(2) Records may be disclosed to a court for in camera inspection if relevant to an issue before it. The court may permit public disclosure if it finds such disclosure to be necessary for the fair resolution of an issue before it.

The dissent focuses on the impossibility of the father and his counsel identifying the information needed when they did not know what information was contained in the file. The District Court did not require an impossibility on the part of the father or his counsel, but made a practical decision. The court was presented with a lengthy file. District courts have control over the presentation of evidence so as to avoid needless consumption of time. Rule 611(a)(2), M. R. Evid. Further, district courts have inherent discretionary power to control discovery; such power is based upon the court’s authority to control trial administration. Massaro v. Dunham (1979), 184 Mont. 400, 603 P. 2d 249.

It is essential to look at the record with regard to the events as they took place. The record shows that the father’s counsel did not request an “in camera” inspection by the court. Instead he continued to request that as counsel for the father he should be allowed to conduct an “in camera” inspection of the entire file. Such inspection was by definition impossible; the court correctly noted that it was not appropriate under the above statute. The record further demonstrates there was no attempt by counsel for the father to in any way delineate the nature of the information desired. This failure to even attempt to comply with the court’s concern underscores the court’s “fishing expedition” analysis. As the court pointed out at the pretrial conference, it understood that the father had everything which he needed to try the case.

As requested by the court, counsel could have listed the materials which had been furnished to him and thereby identify information which he did not need. With little effort, counsel could have stated that information was desired only as to K.M.W. This would have significantly diminished the volume of material needed for review. In addition, he could have eliminated such elements as the following: reports of foster parents, reports of personnel employed by the various divisions of the State of Montana, reports by personnel in the state of Idaho, reports by law enforcement personnel, and reports of psychologists or other medical personnel. We emphasize that after being warned of the necessity to limit or identify the information required, counsel refused to do anything of that nature. The District Court concluded counsel was merely on a fishing expedition and therefore refused to approve it.

Under the statute the District Court is given the discretion to determine if the evidence is relevant to an issue before it. It is given the discretion as to whether to conduct the “in camera” examination at all. In view of the failure on the part of counsel for the father to attempt to limit or specify the information requested in any manner, we conclude that the father has failed to prove the District Court was clearly erroneous in denying disclosure of access to the entire files. We therefore hold that the District Court did not err in denying disclosure of evidence to the father.

Ill

Did the District Court err in refusing to replace Garry Bunke as guardian ad litem after he began to work part-time as a deputy county attorney in another county?

The father contends that the District Court erred in allowing Garry Bunke to remain as guardian ad litem in this case after he became deputy county attorney in an adjoining county. The father maintains that a conflict of interest arose at that point because as guardian ad litem, Garry Bunke would no longer be able to remain neutral but would rather, be clouded by the position he should take as an attorney for the State. The State maintains that there was no natural or apparent conflict between representing the State in one county and a child in another.

In its order denying the father’s motion to appoint an unbiased guardian ad litem, the District Court stated:

The Respondent-father’s attorney, Mr. Houtz, alleges that the guardian ad litem, Mr. Bunke, is not sufficiently neutral, because Mr. Bunke is also a Deputy Custer County Attorney and because at the pretrial, Mr. Bunke indicated that he went along with the contentions of the state. This is insufficient evidence that Mr. Bunke is anything less than an impartial guardian ad litem. Mr. Bunke has been a Deputy County Attorney for two and one-half years. Prior to that, he was a defense counsel and frequently represented parents and children in such matters. Just because he agrees with the Rosebud County Attorney in this case does not mean he is not adequately representing the children.

We agree with the District Court’s reasoning. Furthermore, Section 41-5-512, MCA, provides that the court may not appoint an employee or representative of a party as a guardian ad litem. First, at the time that Mr. Bunke was appointed as guardian ad litem, he was not a deputy county attorney. Second, as Deputy Custer County Attorney, Mr. Bunke is not an employee or representative of the DFS or Rosebud County. He is an employee of Custer County. Therefore, the District Court did not err in refusing to replace Mr. Bunke as guardian ad litem.

IV

Was the District Court biased in favor of the county?

In the 1989 hearing on the petition for temporary legal custody, the District Court stated:

The Court will continue the temporary custody with the Department for a period of six months and the Court would implore the father to complete his treatment plan and would indicate that he has 90 days within which to substantially or make substantial progress and this is to be monitored by the Department of Family Services.
If the father is not making substantial progress at that point, the Court would urge the Department then to make a decision as to whether or not to move, petition the Court for termination of all parental rights.
This is not something that the Court seeks and the Court certainly can empathize with the natural father in this situation and also as stated by the County Attorney, but one of the primary needs of the children is for stability and continuity and the children are at such an age where a decision has to be reached.

The father maintains that in the above language, the District Court ordered the Rosebud County Attorney to file a petition for termination of the father’s parental rights, committing reversible error. We disagree.

Read in context with the rest of the court’s decision, there is no indication that the court ordered a petition to be filed against the father, or that the court had prejudged the case. Rather, the court empathized with the father and attempted to spur him into action to try to keep his family together. We hold that there is no evidence that the District Court was biased in favor of Rosebud County.

V

Did the District Court err in declining to allow the child to testify?

On May 7,1991, the father moved to allow K.M.W. to testify that she desired to live with her father. The State opposed the motion arguing that K.M.W.’s wishes were irrelevant to the issue of whether the father successfully complied with the treatment plan, and that K.M.W. was not competent to testify.

The District Court denied the father’s motion on the basis that the parties had stipulated that K.M.W. would say that she desired to live with her father. In the making of its findings and conclusions the District Court clearly recognized that K.M.W desired to live with her father.

In addition the District Court also mentioned that the parties also stipulated that the father’s counsel could observe the interaction between K.M.W. and her therapist if they wished to do so, in order to avoid further traumatization of the child. The District Court concluded that the threatened harm to the child outweighed any possible relevance the testimony as to custody would have.

We agree with the District Court’s reasoning. We hold that the District Court did not abuse its discretion in refusing to have K.M.W. testify.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES HARRISON, and McDonough concur.

JUSTICE TRIEWEILER

concurring in part and dissenting in part.

I concur with those parts of the majority opinion which resolve issues numbered III, IV, and V. I specially concur with the result arrived at in the majority opinion relating to Issue I, although I strongly disagree with much of what is said in that part of the opinion. I join Justice Gray’s dissent to the majority’s conclusion under Issue II.

After personally reviewing the testimony upon which the District Court relied before terminating the parental rights of Jack Watson, I strongly disagree with the majority’s characterization that there is overwhelming evidence that he failed to comply with critical parts of the treatment plan he was ordered to follow. There was evidence that in at least one respect he did not comply with a comprehensive and detailed set of obligations imposed upon him.

I also disagree with the majority’s statement that he failed to complete treatment that was recommended as a result of the evaluations that he underwent. He submitted to psychological evaluations and alcohol abuse evaluations. The conclusions from those who evaluated him was that he had no psychological abnormality which required treatment and that he was not abusing alcohol.1 also disagree with the majority’s statement that Mr. Watson continues to deny various aspects of the sexual offenses against his children. He testified repeatedly during the hearing that while it was initially difficult to acknowledge that his children had been abused while living in his home and under his care, he was now completely resigned to the fact that abuse had occurred and that his children suffered severe personality disorders because of that abuse.

Finally, I disagree with the majority’s statement that in spite of prodding, Mr. Watson has refused to comply with his treatment plan. It is true that because of relocation, the unavailability of many of the services that were necessary, and instability in his own personal life, it took him longer to comply with the program than would have been desirable. However, I conclude from my review of the evidence in this case, that prior to June 1990 when K.M.W. was last placed in her father’s custody, he had complied in most significant respects with the treatment plan that had been designed for him.

My interpretation of Section 41-3-609, MCA, is that a district court may order termination of a parent-child relationship where:

1. The child has been adjudicated a youth in need of care, and
2. A treatment plan has not been complied with, and
3. A condition rendering a parent unfit is unlikely to change within a reasonable time.

In determining whether a parent is unfit, I conclude that all that needs to be shown under Section 41-3-609, MCA, is that some condition of the parent renders him unable to give the child adequate parental care.

Although I do not agree with the characterization of the evidence set forth in the majority opinion, I do agree that the State offered sufficient evidence to create factual issues on each of these necessary elements. Furthermore, while based on my own review of the transcript, I may not have resolved those factual issues in the same manner as the District Court did, I acknowledge that there was a sufficient basis in the record for the District Court to make the findings that it made, and I recognize the unique position that a District Judge is in to resolve factual issues. In spite of these conclusions, I believe the result in this case is unfortunate.

Jack Watson is a father whose daughters were sexually abused by his former spouse. He neither participated in the abuse, nor was he aware that it was occurring. When he first had reason to suspect that his daughters had been abused, he reported his suspicions to the Department of Family Services, which eventually removed his children from his home.

As a result of their sexual abuse, his daughters have developed personality disorders to such an extent that their care requires skills over and above those possessed by the average parent.

Even though he had never personally abused nor neglected his daughters, Jack Watson was ordered to comply with a treatment program in order to retain his rights as a parent. The treatment program was comprehensive. It required evaluation and counseling.

I am sure that Jack Watson, based upon his training and instincts as a parent, felt that since he was not the offender that the treatment program made no sense and was imposed upon him by people who had little understanding of his personal relationship with his daughters. However, it is apparent to me from my review of the record that he made an effort to technically comply with the program without any conviction that the treatment program would benefit either his daughters or him. It is also clear to me from my review of the testimony that he believes he did comply with the treatment program.

Yet, there was evidence that in one respect he did not comply. He did not enter into counseling for the specific purpose of dealing with his alleged lack of assertiveness or to develop effective methods of disciplining his daughter and understanding her special needs as a victim of abuse. Whether or not that was a practical requirement, and whether or not it was reasonable to expect there would be any benefit to Jack Watson or his daughters from such counseling, was not an issue in the District Court, and has not been raised as an issue in this Court. Therefore, I conclude that there was a factual basis in the record from which the District Court could find that K.M.W.’s father did not follow the treatment plan.

The second requirement under Section 41-3-609, MCA, for termination of parental rights is that a condition renders the parent unfit to care for his child and that the condition is unlikely to change within a reasonable time. It is the consideration of this factor which makes this case unique among those cases I have seen dealing with the termination of parental rights. From everything I have seen in this record, Jack Watson is a loving parent who cares for his daughters and is loved by them. There is no evidence that he has ever mistreated his daughters. Yet, because of his former wife’s mistreatment of his daughters, they have demonstrated severe emotional problems which require care and understanding beyond that which the average parent is capable of giving. Therefore, under the unique circumstances of this case, there was, through the testimony of Barb Rolston and Marty Jones, what I believe to be a bare minimum of the credible evidence necessary to sustain the District Court’s finding that this father, even though otherwise qualified to be a parent, was unfit to care for K.M.W. who had such unique and special needs.

My interpretation of Section 41-3-609(2), MCA, is that a parent may be found unfit to care for his or her child and unlikely to change within a reasonable time if the court finds that the conduct or condition of the parent renders him unable to give the child adequate parental care. While I find no evidence anywhere in this record to support a conclusion that Jack Watson ever abused or neglected either of his daughters, I do find sufficient evidence, through the testimony of the previous witnesses, for the District Court to find that Jack Watson was unable to provide adequate care for his daughter K.M.W. I must emphasize that reading the same testimony that the District Court heard and observed, I would not necessarily resolve the factual dispute as the District Court did. However, it is not my right to resolve that factual dispute when the District Court, from its perspective, was in a better position to do so.

I feel the result of this decision is unfortunate. It should be of concern to everyone who believes in the fundamental importance of family relationships that a parent-child relationship can be terminated, not because of something the parent has done wrong, but because the parent’s skills are average or even below average. That is, in effect, the result of the holding in this case. The father, whose rights are being terminated in this case, is as good a parent and as able to care for his children as most parents. His only inadequacy, at least according to most of the evidence that was presented, is that he has not developed special skills beyond those possessed by the average parent which would enable him to deal with the damage inflicted on his children by his former spouse. Because of the importance and sanctity with which I regard the parent-child relationship, and because of the degree to which the very nature of the relationship can compensate for a parent’s inadequacies, I have serious reservations about the wisdom of the public policy as set forth in our statutory law which would permit termination of the parent child relationship under these circumstances. However, where the legislature’s intent is clear, as it is in this case, and where the constitutionality of what the legislature did is not an issue, it is not for this Court to ignore the stated public policy and establish its own.

For these reasons, although I strongly disagree with its characterization of the evidence in this case, I reluctantly concur with the result of the majority opinion.

JUSTICE HUNT concurred in the foregoing concurrence and dissent of JUSTICE TRIEWEILER.

JUSTICE GRAY

dissenting.

I respectfully dissent from the majority opinion on Issue II.

This case concerns one of the most fundamental and important rights recognized by the law: the right of a parent to parent his children. Here, in an effort to stave off termination of that right by the State of Montana, the father requested records and files of the Department of Family Services (DFS) in order that he might obtain and utilize any relevant information contained therein in his “defense” to the action to terminate his parental rights. The majority affirms the District Court’s imposition of a precondition to an in camera inspection which, as a practical matter, is an impossibility. More importantly, it affirms a precondition not provided for in the controlling statute, and does so without citation to any authority. I cannot agree.

The District Court required the following in denying the father’s request for an in camera inspection:

Counsel who seek discovery of documents contained in the DFS file must specify or describe the documents they are particularly interested in .... The Respondent-father has not sufficiently identified what he is looking for.

The court went on to say that it would reconsider the motion at the time of trial “if counsel can sufficiently identify particular documents, types of documents, time frames, and other identifying information

The majority attempts to reconstruct the record by suggesting that the court requested counsel to list the materials he already possessed, thereby identifying unneeded information. Such an effort by counsel would not have met the court’s requirement to specify, describe or identify the information being sought, as quoted above. Similarly, the majority’s listing of materials the father “could have eliminated” is nothing more than speculation by this Court and, again, not responsive to the District Court’s Memorandum and Order dated June 6, 1991. In any event, some of the majority’s listed items might well have been relevant and, therefore, sought by the father if contained in the DFS file.

The fact is that neither the District Court nor the majority suggest how the father could have complied with the District Court’s precondition. It strikes me that such a precondition requires an impossibility; neither the father nor his counsel could possibly know with particularity what documents and information the file contained. In this regard, the majority requires an impossible act in contravention of the statutory maxim of jurisprudence that “[t]he law never requires impossibilities. ” Section 1-3-222, MCA.

More importantly, nothing in the statute permitting disclosure of DFS files, Section 41-3-205, MCA, requires the act imposed by the District Court and affirmed by the majority. To that extent, the majority violates its most basic duty, as stated in Section 1-2-101, MCA: to ascertain and declare what is contained in a statute and to refrain from inserting that which is not found therein.

Section 41-3-205, MCA, is clear and straightforward: DFS records may be disclosed to a court for in camera inspection if relevant to an issue before it. It is undisputed that the records concerning the father’s children may contain information relevant to defending against the State’s effort to terminate his parental rights. Indeed, the District Court recognized and stated that the records may contain relevant information which should be disclosed pursuant to the statute.

Here, the statutory procedure has not occurred; it was foreclosed by imposition of the precondition. There has been no in camera examination and no release of relevant information to a parent seriously and vigorously contesting termination of the right to parent his children. The majority concludes that the District Court’s imposition of a precondition that the father specify what information he needed from the file, a requirement not contained in the statute, did not constitute an erroneous denial of access to the record. Nothing could be further from the truth. I dissent.


source: Caselaw Access Project

author: JUSTICE WEBER

license: Public Domain

text:
    DICK RAGLAND, Plaintiff and Respondent, v. WILLIAM F. SHEEHAN, JR., Defendant and Appellant.
    No. 92-392.
    Submitted on Briefs December 3, 1992.
    Decided February 2, 1993.
    50 St.Rep. 83.
    256 Mont. 322.
    846 P.2d 1000.

      For Defendant and Appellant: Gary G. Broeder, Veeder & Broeder, Billings.
    For Plaintiff and Respondent: William J. O’Connor II, O’Connor & O’Connor, Billings.
   JUSTICE WEBER

delivered the Opinion of the Court.

This is an appeal from a judgment by the Thirteenth Judicial District Court, Yellowstone County, granting plaintiff Dick Ragland judgment for breach of contract in the amount of $35,000 plus costs and interest. We affirm.

We consider the following issues on appeal:

1. Did the District Court err in finding a contract existed between Dick Ragland and William Sheehan, Jr., in which Sheehan promised to pay $35,000 for the chance to consider participation in Ragland’s hydroelectric project?

2. Did the District Court err in admitting testimony by Ragland and Doak concerning the Montana Power Company buy out for $35,000?

Dick Ragland (Ragland) owns a ranch in Carbon County, Montana. Water is plentiful on the ranch and in 1982 Ragland began exploring the possibility of using water for generating hydroelectric power from an existing artesian well known as the Ruckavina #2 well. In November 1984, Ragland obtained a Power Purchase Agreement with Montana Power Company (MPC) to sell the hydroelectric power which he hoped to generate.

Because Ragland’s attempts to obtain financing were unsuccessful, Ragland and a financial consultant put together a bound document describing the Bluewater Hydroelectric Project (Book) as part of an application for a loan to develop the well. He then distributed the Book to various parties whom he believed to be interested in the project.

In the course of this distribution, William F. Sheehan, Jr. (Sheehan) received a copy of the Book in March 1987. After receiving the Book, Sheehan visited the Ragland ranch to view the proposed hydroelectric site and to discuss the merits of such a project with Ragland.

The following year in August 1988, MPC notified Ragland that it would terminate the Power Purchase Agreement unless Ragland signed an amendment to the agreement stating that the hydroelectric plant would be operational by October 1, 1989. Jon Doak (Doak), Ragland’s attorney, notified Sheehan that Ragland needed to make some decisions concerning the hydroelectric project. Sheehan agreed to meet Ragland at Doak’s office late in the afternoon of August 31, 1988, to discuss the project and Sheehan’s participation in it. The meeting held in Doak’s Billings office was attended by Ragland, Sheehan and Doak and lasted approximately one hour. There is no question that Sheehan was advised by Doak and Ragland that MPC had offered to buy out the Power Purchase Agreement with Ragland. At this time, Ragland also advised that he had problems with the Internal Revenue Service and needed money to pay taxes. No written agreement was prepared at the August 31, 1988 meeting.

At the conclusion of the meeting, Ragland telephoned a third party and left a message rejecting a contract buy out by MPC. Sheehan did not participate in the telephone conversation, nor was he aware of the identity of the third party.

Ragland testified that as a result of this meeting he believed that Sheehan had made an unconditional promise to pay Ragland $35,000 on or before December 1, 1988, for an option to participate in the development of the hydroelectric project. Sheehan testified that he believed that the parties had agreed that if Sheehan’s own evaluation of the project was favorable and the agreement was reduced to writing, that Northland Royalty Company, a corporation owned by Sheehan would pay Ragland the $35,000 on or before December 1, 1988, and then proceed to develop the project.

During September 1988, Doak drafted proposed Articles of Limited Partnership. These articles set forth what Doak believed to be the consensus of the August 31, 1988 meeting. The draft was shown to Sheehan in October 1988 and Sheehan found them to be unacceptable. In December 1988, Sheehan notified Ragland twice by mail that he would not participate in the project. Sheehan’s letters claimed that he had determined that the project as designed was not feasible or capable of completion. Sheehan did not pay Ragland the $35,000.

Ragland then brought an action in District Court to recover damages from Sheehan for breach of an oral contract. Atrial was held before the District Court sitting without a jury on November 15,1990. On April 15, 1992, the District Court issued its findings and conclusions. The court found in favor of Ragland. Sheehan now appeals.

I

Did the District Court err in concluding that a contract existed between Dick Ragland and William Sheehan, Jr., in which Sheehan promised to pay $35,000 for the chance to consider participation in Ragland’s hydroelectric project?

The District Court concluded that an enforceable contract existed between Ragland and Sheehan. The contract, according to the District Court, provided that Sheehan would pay $35,000 to Ragland if Ragland would reject MPC’s buy out offer and execute a first amendment to the Power Purchase Agreement, which provided Sheehan a longer time to review the project in-depth. The court determined that Ragland executed an amendment to the purchase agreement and turned down MPC’s offer. Sheehan, however, failed to perform his part of the contract which included payment of $35,000. Therefore, the court awarded Ragland the contract amount of $35,000 plus costs and interest.

Sheehan contends that there was no mutual consent of the parties and that each of the three parties left the August 31, 1988 meeting with a different understanding of what had happened. The proposed Articles of Partnership which were written after the meeting were unacceptable to Sheehan and he did not sign them; this prevented formation of any contract, according to Sheehan. Ragland counters that there were not three versions of what happened on August 31 — Ragland and Doak both testified that Sheehan’s promise to pay Ragland $35,000 was unconditional. Ragland argues that the promise to pay $35,000 was separate and distinct from any agreement to develop the hydroelectric project.

The standard of review for findings of fact in a civil case tried by a district court without a jury is whether the District Court’s findings are clearly erroneous. Trad Industries, Ltd. v. Brogan (1991), 246 Mont. 439, 805 P.2d 54. This Court will determine whether the findings of a district court are clearly erroneous by reviewing them to see if the findings are supported by substantial evidence. Interstate Production Credit Assoc. v. DeSaye (1991), 250 Mont. 320, 820 P.2d 1285. When the findings are supported, this Court will look to see if the District Court misapprehended the effect of the evidence; when the court has not so misapprehended, we may still find that although there is sufficient evidence to support the findings, a review of the record leaves the Court with the definite and firm conviction that a mistake has been committed. DeSaye, 250 Mont, at 323, 820 P.2d 1285. Based on the evidence presented, the District Court concluded that a contract existed between Ragland and Sheehan obligating Sheehan to pay $35,000 to Ragland.

Ragland correctly contends that two possible contracts exist under the facts of this case. The first contract is the one argued by Sheehan, the agreement concerning the hydroelectric project and Sheehan’s participation in it. The second contract, and the contract which concerns us, is the oral contract between Ragland and Sheehan concerning the $35,000 payment to Ragland. Sheehan argues that this oral agreement was not supported by consideration.

If an agreement contains a bargained-for exchange in legal positions between parties, the agreement becomes a legally enforceable contract. Nordwick v. Berg (1986), 223 Mont. 337, 725 P.2d 1195. It is not essential that consideration should impose a certain gain or loss to either party; it is sufficient that a party in whose favor the contract is made foregoes some advantage or benefit. Nordwick, 223 Mont, at 341,725 P.2d 1195. Here, there is no question that Ragland told Sheehan that MPC had offered him $35,000 to buy out his Power Purchase Agreement and that he had to make a decision to accept the money or continue the project by 5:00 p.m. that day. The record establishes that all parties present at the August 31,1988 meeting knew that Ragland needed money for tax debt. The record also shows that if Ragland turned down the MPC buy out offer, he needed to sign a first amendment to the original agreement designating a starting date for the hydroelectric project. All parties agree that Ragland made a telephone call and turned down the MPC buy out. Clearly, Ragland changed his legal position by foregoing the $35,000 from MPC with the understanding that instead of MPC Sheehan would pay him the $35,000.

The record indicates that Sheehan had already been to the Ragland Ranch to check the site and had possessed the Book about the project for some time. Sheehan was aware of Ragland’s options and Ragland’s need for money. The District Court concluded Ragland’s refusal of MPC’s buy out offer bound Sheehan to a contract -under which Sheehan was granted time to further consider the project. The record establishes that Sheehan benefitted by the four months’ time he was given to evaluate the details of the project. However, after reviewing the project for the additional four months, he refused to participate in the project and refused to pay Ragland the $35,000.

Sheehan contends that a contract cannot exist because the facts do not indicate mutual consent, but that is not controlling. An implied contract does not arise from the consent of the parties — it springs from principles of natural justice and equity, based on the doctrine of unjust enrichment. St. James Community Hospital v. Dept. of Social and Rehabilitation Services (1979), 182 Mont. 80, 595 P.2d 379. Unjust enrichment is an equitable doctrine wherein the plaintiff (Ragland) must show some element of misconduct or fault on the part of defendant (Sheehan) or that defendant somehow took advantage of plaintiff. Randolph V. Peterson, Inc. v. J. R. Simplot Co. (1989), 239 Mont. 1, 778 P.2d 879.

We hold the District Court did not err in concluding a contract existed between Ragland and Sheehan in which Sheehan promised to pay $35,000 for the chance to consider participation in Ragland’s hydroelectric project.

II

Did the District Court err in admitting testimony by Ragland and Doak concerning the Montana Power Company buy out for $35,000?

The District Court determined that Ragland’s rejection of the $35,000 MPC buy out offer was consideration for the oral agreement with Sheehan. Sheehan argues that there is no evidence to support such a buy out offer except Ragland’s testimony that MPC offered it to him and Doak’s testimony that Ragland told him about it. Both, according to Sheehan, are hearsay. Ragland contends his testimony and Doak’s are not hearsay.

Ragland’s testimony that MPC offered to buy him out for $35,000 if he decided by 5 p.m. on August 31, 1988, is not hearsay testimony. The testimony involves a “verbal act” pursuant to M.R.Evid. 801. The verbal act was not MPC’s offer of $35,000 but the act of Ragland’s telling both Doak and Sheehan that the offer had been made and that Ragland stood to lose $35,000 if he chose to continue the Power Purchase Agreement and the hydro-electric project.

The Hearsay Rule does not apply to statements offered not for their truth but merely for the purpose of showing that certain words were spoken. Quayle v. Mackert (ID. 1968), 447 P.2d 679. The Quayle court considered the possible offer to buy a ranch and the effect that offer had on the estate of the deceased owner. The court stated:

Appellants objected at trial to Joseph Quayle’s testimony about Dean Orme’s offer to buy the farm ... Appellants objected to this repetition by Joseph Quayle of Dean Orme’s offer to contract to purchase the farm as hearsay ... But this objection was properly overruled because the hearsay rule does not apply to statements offered not for their truth, but merely for the purpose of showing that certain words were spoken. Thus, whether true or not, the offer of Dean Orme was admissible for the purpose of showing that Manx Quayle thought he had an offer which he might forbear to accept .... [Emphasis added.]

Quayle, 447 P.2d at 683. The Quayle reasoning is pertinent to the instant case and we herein adopt it as it concerns “verbal act” testimony.

In the case before us there was no issue as to whether MPC actually had offered $35,000 to Ragland. The record demonstrated that Ragland believed MPC had made an offer for $35,000 which he would lose if not accepted by 5 p.m. on August 31; and that he communicated that belief to defendant Sheehan as well as his lawyer Doak. That communication by Ragland was a verbal act to which both Ragland and Doak properly testified.

In a similar case, this Court noted that when a statement goes to prove an operative fact of the alleged action, that statement is not hearsay. Phillip R. Morrow, Inc. v. FBS Ins. Montana (1989), 236 Mont. 394, 770 P.2d 859. In the Morrow case, the district court excluded a statement as hearsay testimony that the witness was told “Don’t do Business with Morrow.” In reversing, we stated that:

The trial court should have admitted the... statement as non-hearsay under Rule 801(c), M.R.Evid., because the statement constitutes a “verbal act”, in the sense that it goes to prove the operative facts of the alleged tort, i.e., pressuring Fisher ... [It] is an operative fact which gives rise to legal consequences.

Morrow, 236 Mont, at 398, 770 P.2d 859.

We hold the District Court did not err by admitting testimony by Ragland and Doak concerning the MPC buy out offer of $35,000.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES HARRISON, McDONOUGH and HUNT concur.


author: JUSTICE GRAY

text:
    STEPHEN M. BARRETT, Plaintiff and Respondent, v. HOWARD M. LARSEN, Defendant and Appellant.
    No. 91-360.
    Submitted on Briefs February 20, 1992.
    Decided February 4, 1993.
    50 St.Rep. 96.
    256 Mont. 330.
    846 P.2d 1012.

      For Defendant and Appellant: Gary L. Beiswanger, Billings.
    For Plaintiff and Respondent: Steven B. Ungar, Bozeman.
   JUSTICE GRAY

delivered the Opinion of the Court.

The Eighteenth Judicial District Court, Gallatin County, entered judgment on a jury verdict awarding Stephen Barrett damages for Howard Larsen’s breach of a partnership agreement. Howard Larsen appeals from the judgment and from the court’s order denying his motion for judgment notwithstanding the verdict or for new trial. We affirm.

We restate the issues on appeal as:

1. Did the District Court err in instructing the jury?

2. Did the District Court err in denying Larsen’s motions for directed verdict and for judgment notwithstanding the verdict?

3. Did the District Court err in admitting Barrett’s Exhibit No. 21 into evidence?

4. Did the District Court err in denying Larsen’s Section 25-11-102, MCA, motion for a new trial?

In September of 1979, Stephen Barrett (Barrett), Howard Larsen (Larsen), and Michael Bartlett (Bartlett) purchased a 37 acre tract of undeveloped real estate near Bozeman, Montana. The three men were longtime friends; Barrett practiced law in Bozeman, Montana, and Larsen and Bartlett were attorneys in southern California.

Barrett, Larsen and Bartlett each contributed $8,500 to the purchase of the property. Barrett signed the purchase agreement on his own behalf, and for Larsen and Bartlett pursuant to power of attorney agreements. According to the purchase agreement, the men owned the property as tenants in common, each holding an undivided one-third interest. They intended to subdivide, and later resell, the property for profit. No written partnership agreement was executed.

The men agreed that Barrett would perform the tasks associated with subdividing the undeveloped real estate. Barrett divided the property into three tracts. Each of two tracts encompassed approximately 4.73 acres; Barrett conveyed one such tract to his wife, Janis Barrett, and the other tract to Larsen’s wife, Lana Larsen. The third tract encompassed the remaining 28 acres.

In September of 1980, Barrett, Larsen and Bartlett each contributed $2,491.66 toward the first annual payment required by the purchase agreement. Barrett and Larsen made additional contributions the following September when the second annual payment was due. Bartlett was unable to contribute and, as a result, the respective interests in the property were no longer equal. Larsen sent Barrett a letter, dated September 28, 1981, acknowledging this change:

Enclosed please find my check in the amount of $4,984. This letter confirms the agreement reached among you, Mike and myself whereby in consideration of additional contributions by you and me, the partners’ capital accounts are to be adjusted as follows:
Steven M. Barrett 36.6%
Michael J. Bartlett 25.7%
Howard M. Larsen 37.7%

In October, 1981, the three -undeveloped tracts of real estate were exchanged for a fully-rented commercial building in Belgrade, Montana (Belgrade Property). The Agreement for Sale, Purchase and Exchange of Real Property was signed by the Barretts, and by Barrett for Larsen, Lana Larsen and Bartlett pursuant to power of attorney agreements. The Belgrade Property was conveyed by warranty deed to the Barretts.

At the time of the exchange, the Belgrade Property was subject to an existing loan, which the Barretts assumed. The Barretts refinanced the loan before a balloon payment was due in 1983. The Barretts were the only signatories on the refinanced loan. Including Larsen and Bartlett as co-signors would have required obtaining updated financial information from Larsen and Bartlett, an inconvenience that Barrett sought to avoid. Barrett informed Larsen and Bartlett that the loan had been refinanced in this manner.

In October, 1985, the major tenant of the Belgrade Property moved out at the expiration of its lease. Barrett’s subsequent attempts to sell, lease or exchange the property were unsuccessful. In a letter dated February 24,1986, Barrett informed Larsen and Bartlett of his plans to refinance the mortgage a second time in order to attract potential purchasers. Barrett sent a copy of the loan application to Larsen and Bartlett and indicated that they would be co-signing the loan. Barrett stated that he was reluctant to refinance the mortgage in the partnership’s name because he did not have the required partnership documentation. Additionally, he requested, and Larsen and Bartlett sent, additional contributions based on their respective interests in the Belgrade Property to cover the ongoing expenses of the building. The Barretts ultimately refinanced the loan in their names only.

Early in 1988, Bartlett informed Barrett and Larsen that he was withdrawing from the investment. Larsen discussed the withdrawal with Barrett and indicated that he would not increase his interest in the Belgrade Property. Accordingly, Barrett assumed Bartlett’s interest, increasing his interest to 62.3%. Larsen continued to have a 37.7% interest in the property.

Barrett’s ongoing attempts to sell or otherwise dispose of the Belgrade Property were unsuccessful. In December, 1987, Barrett found a tenant to lease a major portion of the building. However, the loan payments and the utility, insurance, and tax expenses associated with the property continued to exceed the rental income. Barrett and Larsen made additional contributions to supplement the rental income in March, May and November of 1988, and February of 1989, according to their percentage interests in the property. In March of 1989, Larsen informed Barrett that he would not make additional contributions.

On April 20,1990, Barrett sued Larsen for breach of a partnership agreement. A jury trial began on February 12, 1991. Larsen moved unsuccessfully for a directed verdict after Barrett’s case-in-chief. The jury ultimately determined that a partnership existed between Barrett and Larsen with respect to the Belgrade Property and that Larsen breached the partnership agreement by failing to make contributions; it awarded Barrett $45,255 in damages, plus interest. The District Court denied Larsen’s motion for judgment notwithstanding the verdict or for new trial. Larsen appeals.

Did the District Court err in instructing the jury?

Larsen contends that the District Court improperly instructed the jury by refusing the following proposed instruction:

Instruction 20. Where purported partners did not hold property jointly, had unequal control over assets, held no joint bank accounts, and did not file partnership tax returns, no partnership existed.

Larsen relied on Wiberg v. 17 Bar, Inc. (1990), 241 Mont. 490, 498, 788 P.2d 292, 297, citing Matter of Estate of Smith (1988), 230 Mont. 140, 147-48, 749 P.2d 512, 516-17, as his sole authority for the instruction.

Barrett contends Larsen’s reliance on Wiberg is misplaced. According to Barrett, the Wiberg language upon which Larsen relies is a partial recitation of some, but not all, of the facts upon which we determined that there was insufficient evidence to support the jury’s finding of a partnership in Smith. Barrett asserts that Larsen’s instruction is neither our holding in Wiberg nor an accurate statement of our holding in Smith. We agree.

In Smith, we focused on Section 35-10-201(1), MCA, and the elements of a partnership set forth in Bender v. Bender (1965), 144 Mont. 470, 397 P.2d 957, to determine whether evidence supported the existence of a partnership. Section 35-10-201(1), MCA, defines a partnership as “an association of two or more persons to carry on as co-owners a business for profit.” Bender set forth the following elements of a partnership:

“To establish ... a partnership, it is necessary to determine the intent of the parties: such business relationships arise only when the parties intend to associate themselves as such. There must be some contribution by each co-adventurer or partner or something promotive of the enterprise. There must be joint proprietary interest and a right of mutual control over the subject matter of the enterprise or over the property engaged therein, and there must be an agreement to share the profits. [Citation omitted.] The intention of the parties has to be clearly manifested, [citing cases] and must be ascertained from all the facts and circumstances and actions and conduct of the parties. [Citation omitted.]”

Smith, 230 Mont, at 145, 749 P.2d at 515, quoting Bender, 144 Mont, at 480, 397 P.2d at 962. On the basis of Section 35-10-201(1), MCA, and the Bender elements, we determined in Smith that the evidence did not support a finding that a partnership existed.

Both Smith and Wiberg rely primarily on Section 35-10-201(1), MCA, and the criteria for a partnership set forth in Bender. Nothing in either Smith or Wiberg suggests that the four elements asserted by Larsen are the sole and exclusive elements of a partnership, as a matter of law. We hold that the District Court did not err in refusing Larsen’s proposed jury instruction.

Did the District Court err in denying Larsen’s motions for directed verdict and for judgment notwithstanding the verdict?

Our standard for reviewing a trial court’s denial of a motion for judgment notwithstanding the verdict is the same as our standard for reviewing a motion for a directed verdict; a directed verdict may be granted only when it appears the non-moving party could not recover upon any view of the evidence, including the legitimate inferences to be drawn from it. Hash v. State (1991), 247 Mont. 497, 500, 807 P.2d 1363, 1365. On appeal, we review the evidence in a fight most favorable to the prevailing party to determine whether substantial evidence supports the jury’s verdict. Id.

In support of his motion for directed verdict, Larsen contended that Barrett failed to present a prima facie case establishing the existence of a partnership. After the District Court entered judgment on the jury verdict in Barrett’s favor, Larsen moved for judgment notwithstanding the verdict on essentially the same basis. The District Court denied both motions. As our discussion in the previous issue indicates, the elements required to establish a partnership are set forth in Section 35-10-201(1), MCA, and Bender.

Larsen asserts two arguments in support of his claim that the requirements for the existence of a partnership under Section 35-10-201(1), MCA, are not met. First, he argues that he and Barrett are not co-owners of the Belgrade Property. While it is true that the Barretts are the record title holders of the property and refinanced the loan in their names, substantial evidence indicates that Larsen is a co-owner. Larsen contributed to the purchase of, and was a record title holder for, the undeveloped real estate. He acknowledged that his “partners’ capital account” reflected a 37.7% interest in the property in a letter he sent Barrett.

The undeveloped real estate was later exchanged for the Belgrade Property. Via an undisputed power of attorney agreement, Larsen was a party to the Agreement for Sale, Purchase and Exchange of Real Property. Barrett informed Larsen that while the Barretts were the record title holders, the actual interest was held by himself, Larsen and Bartlett. Larsen continued to contribute to the operating expenses of the building on that property for several years after the purchase in amounts reflecting his percentage interest. Larsen’s co-ownership of the Belgrade Property is supported by substantial evidence.

Larsen next contends, without citing authority, that the purchase and sale of real estate does not constitute a business for profit. It is well established in Montana, however, that a partnership may be created for the purchase and sale of real estate. Walsh v. Ellingson Agency (1980), 188 Mont. 367, 372, 613 P.2d 1381, 1384. In Walsh, two defendants had purchased properties as tenants in common with equal contributions, and had shared the profits upon resale. One defendant collected rent generated by the property irom which the suit arose, using the rental proceeds to pay property taxes and maintain the property. We upheld the district court’s conclusion that the defendants were engaged in a partnership.

The case before us is analogous to Walsh. Here, Barrett, Bartlett and Larsen purchased the undeveloped real estate as tenants in common with equal contributions, intending to resell the property for a profit. Barrett testified that Larsen consented to the exchange of the real estate for the commercial building. Larsen contributed to the investment according to his percentage interest. Barrett collected and applied the rent to the ongoing expenses of the building. Larsen testified that had the building sold, he would be entitled to 37.7% of any profit realized. Substantial evidence indicates that Barrett and Larsen were engaged together in a business for profit.

The same evidence establishing co-ownership of a business for profit establishes certain partnership criteria under Bender: Larsen’s contribution, joint proprietary interest, and the right to share the profits. Additionally, the record reflects that Larsen had a right to mutually control the property. Larsen admitted that he delegated the management of the undeveloped real estate to Barrett, and that the delegation continued after the exchange for the Belgrade Property. Furthermore, Barrett testified that he exchanged the undeveloped property for the Belgrade Property with Larsen’s consent and that he discussed the refinancing with Larsen.

Reviewing the record in a light most favorable to Barrett, we conclude that the jury’s determinations that a partnership existed between Barrett and Larsen with respect to the Belgrade Property and that Larsen breached the partnership agreement is supported by substantial evidence. We hold that the District Court did not err in denying Larsen’s motion for directed verdict and for judgment notwithstanding the verdict.

Did the District Court err in admitting Barrett’s Exhibit No. 21 into evidence?

Larsen claims that the District Court erred in admitting Barrett’s Exhibit No. 21, entitled Plaintiff’s Damage Summary. The mortgage, insurance, tax, and utility payments made by Barrett after Larsen withdrew from the partnership; the outstanding taxes on the property; and the outstanding balance on the mortgage loan were summarized on the exhibit. The amounts were multiplied by 37.7%, Larsen’s interest in the property, to establish the amount of damages claimed by Barrett.

The court admitted the exhibit into evidence under Rule 1006, M.R.Evid., which provides:

The contents of voluminous writings, recordings or photographs which cannot conveniently be examined in court may be presented in the form of a chart, summary, or calculation. The originals, or duplicates, shall be made available for examination or copying, or both, by other parties at a reasonable time and place. The court may order that they be produced in court.

The admissibility of evidence is within the discretion of the district court; we will not reverse its ruling absent an abuse of discretion. Massman v. City of Helena (1989), 237 Mont 234, 240, 773 P.2d 1206, 1210.

Larsen contends that the documents which formed the basis for the summary exhibit were not sufficiently voluminous to allow the admission of the exhibit under the Rule. However, Rule 1006, M.R.Evid., does not require the underlying documents to be so voluminous that an in-court examination would be physically impossible, only that such examination would not be convenient. Here, the exhibit summarized mortgage, insurance, tax and utility payments Barrett made between the time Larsen withdrew from the partnership and the date of trial as well as outstanding taxes and the balance on the loan. The exhibit also reflected Barrett’s calculation of his damages, made by multiplying the expenditures and outstanding balances by Larsen’s percentage interest. Rule 1006, M.R.Evid., expressly provides that the contents of the voluminous documents may be presented in the form of a calculation.

Additionally, Larsen contends that the documents were not made available to him prior to trial with the knowledge that a summary would be prepared, a condition he asserts must be met before the exhibit can be admitted under the Rule. Larsen cites no authority to support his contention, nor does the plain language of the Rule impose such a requirement. Larsen admitted that he reviewed a box of documents pursuant to his request for production. He does not assert that the summarized documents were not among them.

The record reveals that Barrett laid a proper foundation for the admission of the exhibit. Furthermore, Larsen was free to test the veracity of the summary exhibit through cross-examination or request the court to order Barrett to produce the underlying documents; he did neither. We hold that the District Court did not abuse its discretion in admitting Barrett’s Exhibit No. 21 into evidence.

Did the District Court err in denying Larsen’s Section 25-11-102, MCA, motion for a new trial?

Larsen contends that he is entitled to a new trial under Section 25-11-102(6), MCA, on the grounds that, as a matter of law, there is insufficient evidence of record to support the existence of a partnership. The decision to grant or deny a new trial is within the discretion of the district court; we will not overturn its decision absent an abuse of discretion. Tope v. Taylor (1988), 235 Mont. 124, 131-32, 768 P.2d 845, 849-50. As our previous discussion indicates, Barrett presented sufficient evidence to establish the existence of a partnership. We hold that the District Court did not err in denying Larsen’s motion for new trial based on insufficient evidence.

Larsen also contends that he is entitled to a new trial under Section 25-11-102(5), MCA, on the basis that the jury awarded excessive damages. He asserts that the jury awarded damages based on Barrett’s damage summary exhibit and, therefore, that $37,700 of the $45,255 award represents 37.7% of the outstanding balance on the loan. Larsen contends that including his share of the outstanding balance as damages is excessive because the value of the property is not taken into consideration. According to Larsen, damages relating to the loan balance cannot be ascertained until foreclosure occurs and a deficiency determined.

A district court may not grant a motion for new trial pursuant to Section 25-11-102(5), MCA, unless it appears that excessive damages were awarded under the influence of passion or prejudice. Gibson v. Western Fire Ins. Co. (1984), 210 Mont. 267, 290, 682 P.2d 725, 738. Upon review, we will not disturb a district court’s order denying a new trial when the damage award is supported by the record:

“It is not a question of the amount this Court would have awarded under the circumstances. It is not the amount which in our opinion would compensate the injured party; rather, it is a question of what amount of damages will the record in the case support when viewed, as it must be, in the light most favorable to the plaintiff

French v. Ralph B. Moore, Inc. (1983), 203 Mont. 327, 336, 661 P.2d 844, 849, quoting Ashley v. Safeway Stores, Inc. (1935), 100 Mont. 312, 330, 47 P.2d 53, 62.

Larsen has not asserted and, given the case before us, could not establish that the jury awarded excessive damages under the influence of passion or prejudice. The damage award mirrors Barrett’s testimony and summary exhibit and, therefore, is supported by the record. Barrett and Larsen agreed to submit the issue of damages to the jury on the basis of breach of contract rather than the statutory provisions governing the dissolution of a partnership. Barrett testified that the $37,700 was a reasonable estimate of his future damages caused by Larsen’s breach of the partnership agreement. Larsen did not object to the estimate of fixture damages during Barrett’s direct testimony, challenge the estimate of fixture damages on cross-examination, or undermine it during his own case. We hold that the District Court did not abuse its discretion in denying Larsen’s motion for new trial based on excessive damages.

Affirmed.

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