author: JUSTICE HUNT

text:
    IN RE THE MARRIAGE OF CURTIS ALAN KOVARIK, Petitioner/Respondent, v. SANDEE RAE KOVARIK, Respondent/Appellant.
    No. 97-308.
    Submitted on Briefs October 2, 1997.
    Rehearing Denied March 12, 1998.
    Decided February 18, 1998.
    1998 MT 33.
    55 St.Rep. 117.
    287 Mont. 350.
    954 P.2d 1147.

      For Appellant: David C. Humphrey, Humphrey Law Office, Poison.
    For Respondent: Keith W. McCurdy, McCurdy Law Firm, Poison.
   JUSTICE HUNT

delivered the Opinion of the Court.

¶1 The marriage of Sandee Rae Kovarik (Sandee) and Curtis Alan Kovarik (Curtis) was dissolved pursuant to the Findings of Fact, Conclusions of Law, and amended Decree of Dissolution entered by the Twentieth Judicial District Court, Lake County. Sandee appeals the court’s decision regarding division of marital property, custody, child support, and maintenance. We affirm in part, reverse in part, and remand for further findings consistent with this opinion.

¶2 The issues on appeal are as follows:

¶3 1. Did the District Court err in valuing and dividing the marital property?

¶4 2. Did the District Court err in designating Curtis residential custodian of the parties’ two youngest children?

¶5 3. Did the District Court err in its award of child support?

¶6 4. Did the District Court err in declining to award Sandee rehabilitative maintenance?

BACKGROUND

¶7 Sandee and Curtis were married in North Dakota in 1970. Together, they have seven children: M.K., K.K., J.K., and C.K., all adult children; A.K., a teenager; and R.K. and T.K., ages eleven and seven respectively. The parties’ first residence consisted of a lot with a trailer home. When the family later became too big for the trailer home, the parties purchased and moved into a house on a nearby lot. Currently, the parties own both residences. In addition to these residences, the parties own a car, a two-ton truck and trailer, several pick-ups, a camper, numerous tools and items of equipment used in the family business, accounts receivable from the business, as well as personal and home effects. In addition to the debt incurred on some of the above items, the parties have consumer debt.

¶8 Curtis and Sandee both have high school educations. Throughout their marriage, Sandee was the primary homemaker and Curtis was the primary financial provider. For the last eighteen years, Curtis has owned and operated a drilling and blasting business known as Curt’s Compressor Service. During this time, Sandee performed some odd jobs outside of the home. Until Angela was born, fifteen years ago, Sandee was employed as an Avon representative. Later, Sandee experimented for a short time with her own cheesecake business, selling cheesecakes out of her home.

¶9 During the last two to three years of marriage, Sandee assisted with the bookkeeping of the family business. To better qualify herself for this task, Sandee completed computer and accounting classes at a nearby community college. Sandee and Curtis also discussed the possibility of Sandee driving the trucks and taking on a more active role in the physical labor of the business. To this end, Sandee completed a truck-driving course at the community college. Although Sandee obtained her commercial driver’s license, she has not yet put it to use. When Sandee first attempted to drive the family business trucks, she caused some damage to one of the trucks. Thereafter, Curtis decided not to have Sandee drive the trucks.

¶10 The marriage of Curtis and Sandee deteriorated over the years, and culminated in petitions for dissolution in July, 1996. On August 29, 1996, Curtis filed a motion for citation and order to show cause why he should not be granted temporary custody of the two youngest children, R.K. and T.K.. Curtis also sought a temporary restraining order against his wife and exclusive control over the house during the pendency of the proceedings.

¶11 On September 18 and 19, 1996, the court conducted a hearing on the matter. Each of the five oldest children gave testimony describing the abusive nature of Sandee. Three children testified that the verbal and physical abuse of their mother caused them to “run away” or move out. The eldest daughter testified that as each child moved out, it appeared Sandee would turn her aggressions on to the next child “down the line.” This daughter also expressed her fear that if the two youngest children continued in the care of their mother, they too would have to endure the abuse. The eldest son recalled an incident where Sandee yelled at and hit Curtis, and then kicked the eldest son when he told her to stop. Another daughter testified that Sandee hit her on the ear with the phone for speaking with her sister. Another son testified that his mother hit him and that she “kicked him out” of the house.

¶12 In her defense, Sandee put on witness testimony from school personnel that she was an involved parent, attentive to the needs of her children. A child development specialist testified that Sandee had consulted her about the special needs of C.K. and T.K., and that Sandee had joined a support group for parents of children experiencing Attention Deficit Disorder. R.K., a minor child, testified on behalf of her mother and stated that C.K. would “egg” his mother on, call her names, and provoke fights. However, Curtis stated that C.K. did this because he did not like Sandee’s current lover, Brennan Jones (Jones).

¶ 13 The admitted love affair between Sandee and Jones was a point of contention regarding the best interests of the children. Jones was K.K.’s husband and Sandee’s son-in-law. He is a convicted felon currently on probation for felony theft and aggravated assault. One skirmish between K.K. and Jones resulted in a gunshot wound in K.K.’s leg. Although K.K. has since divorced Jones, Curtis stated his belief that the relationship between Sandee and Jones was ongoing, as he had seen them together several times. Curtis believed Jones to be prone to ¡violence and did not want the minor children to have any contact with him.

¶14 On September 19, 1996, based on the testimony elicited in the two hearings, the court granted Curtis temporary custody of the minor children during the pendency of the dissolution proceedings. The court also granted Curtis exclusive control of the home, ordered Sandee to vacate the home by September 30, 1996, and enjoined Sandee from entering the premises during the pendency of the proceedings. However, the court granted Sandee reasonable visitation as agreed by the parties, and awarded her temporary support at the rate of $300.00 per month during the pendency of the proceedings.

¶15 Shortly after the court issued its order, Sandee went to the family home to gather her personal items. She found some things missing, including some of her jewelry. Sandee testified that K.K. stole the jewelry. Sandee called Curtis’ attorney and threatened to file a report if he did not recover and return the missing items to her. Curtis’ attorney found the missing jewelry and returned it to Sandee. Sandee then moved out, rented an apartment, and obtained a $2400.00 loan to pay her rent and other expenses until she could find employment. Sandee soon found employment at a janitorial service and earned $5.50 per hour.

¶16 On November 1, 1996, Sandee moved the court to reconsider its prior order, and, based on alleged changed circumstances, requested that she be awarded custody of R.K. and T.K., as well as child support and maintenance, during the pendency of the proceedings. Sandee also requested a partial distribution of assets. On November 13, 1996, the court heard more testimony on these matters and ultimately denied Sandee’s motion. The court did not rule on the issue of partial distribution of assets because the parties had not yet submitted their proposals for division of marital property, custody, and maintenance.

¶17 Over the course of the next few months, the parties engaged in discovery, and submitted to the court separate proposals regarding division of the property, custody, and maintenance. The court appointed guardians ad litem for R.K. and T.K.. On February 10 and 12, 1997, the court conducted its final hearing on the matter. The parties submitted evidence as the basis for the values they assigned to the items listed in the marital estate. The guardian ad litem for T.K. testified that in his opinion, T.K.’s best interests would be served if Sandee were his primary residential custodian. The guardian ad litem for R.K. testified that although in September R.K. expressed an interest to live with Sandee, R.K. had since changed her mind because she did not feel comfortable being around Jones. A.K., the parties’ teenage daughter, told the court she preferred to live with Curtis.

¶18 On February 27 and 28, 1997, the parties each submitted to the court proposed findings and conclusions. On March 18, 1997, the court entered its Findings of Fact, Conclusions of Law, and Decree of Dissolution. Regarding division of property, the court awarded Curtis and Sandee equal portions of the net marital estate. Although Curtis received more tangible assets, the court assigned a larger share of debt to Curtis, and awarded Sandee supplemental cash in the amount of $19,631 to make up the difference. Regarding custody, the court awarded the parties joint custody, and designated Curtis the primary residential custodian. The court awarded liberal visitation with the minor children according to a set schedule. Further, the court ordered Sandee to pay $180.00 per month in child support. Regarding spousal maintenance, the court concluded that neither party was required to pay maintenance to the other.

¶19 On April 21, 1997, the court amended the original Findings of Fact, Conclusions of Law, and Decree to correct certain clerical and computational errors not relevant to this appeal. Additional facts will be provided as necessary to dispose of the issues raised.

STANDARD OF REVIEW

¶20 In matters relating to the division of marital property, child custody, and maintenance, we review a district court’s findings of fact to determine whether the findings are clearly erroneous. Rule 52(a), M.R.Civ.P.; In re Marriage of Pfeifer (1997), 282 Mont. 461, 467, 473, 938 P.2d 684, 688, 692 (standards for division of marital property and maintenance); In re Marriage of Huotari (1997), [284 Mont. 285], 943 P.2d 1295, 1297 (standard for child custody). A finding is clearly erroneous only if it is not supported by substantial evidence, the trial court misapprehended the effect of the evidence, or our review of the record convinces us that a mistake has been committed. In re Marriage of Stufft (1996), 276 Mont. 454, 459, 916 P.2d 767, 770. We have defined substantial evidence as “evidence that a reasonable mind might accept as adequate to support a conclusion; it consists of more than a mere scintilla of evidence but may be somewhat less than a preponderance.” Barrett v. Asarco Inc. (1990), 245 Mont. 196, 200, 799 P.2d 1078, 1080. In determining whether a finding of fact is clearly erroneous, “due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses.” Rule 52(a), M.R.Civ.P.

¶21 If the findings underlying a district court’s division of property are not clearly erroneous, then the court’s division is discretionary and is reviewed for an abuse of discretion. Stufft, 916 P.2d at 770. We review a district court’s award of child support for abuse of discretion. Stufft, 916 P.2d at 770. In evaluating abuse of discretion, we look to whether “the trial court acted arbitrarily without employment of conscientious judgment or exceeded the bounds of reason resulting in substantial injustice.” In re Marriage of Wessel (1986), 220 Mont. 326, 333, 715 P.2d 45, 50 (citations omitted).

DISCUSSION

Issue 1

¶22 Did the District Court err in valuing and dividing the marital property?

¶23 Distribution of marital property is determined by the guidelines set forth in § 40-4-202, MCA, which provides in part:

In a proceeding for dissolution of a marriage ... the court, without regard to marital misconduct, shall... finally equitably apportion between the parties the property and assets belonging to either or both, however and whenever acquired ....

In dividing the marital property between Curtis and Sandee, the District Court made the following findings:

21. That the Court determines an equitable division of the marital estate is to distribute property on Exhibit “A” to [Curtis] and the property on Exhibit “B” to [Sandee], and that the gross value of the marital estate as shown thereon is $414,397.00 and the net value is $202,282.00.
23. In order to equalize the division of the marital estate, the Court determines that an amount of $19,631.00 is to be paid by [Curtis] to [Sandee].

¶24 Items listed on Exhibit A distributed to Curtis totaled $329,887 and included: the parties’ current residence valued at $130,000; two vehicles valued at approximately $32,000; a new Ingersoll Rand drill valued at $117,000; accounts receivable valued at $650.00; two bank accounts valued at $4057; and miscellaneous tools, equipment and household items valued at $46,180. The secured debt on assets distributed to Curtis amounted to $208,074. Curtis’ net share of the marital estate was $101,141. The court assigned to Curtis other debt in the amount of $21,510.35.

¶25 Items listed on Exhibit B distributed to Sandee totaled $84,510 and included: the parties’ old residence valued at $35,000; four vehicles valued at $26,900; a fifth wheel camper valued at $14,000; jewelry valued at $5000; and household items valued at $3610. The secured debt on assets distributed to Sandee amounted to $3000. With the court’s cash award of $19,631 designed to equalize the distribution, Sandee’s net share of the marital estate was $101,141, exactly equal to that of Curtis. The court assigned other debt to Sandee in the amount of $6401.

¶26 On appeal, Sandee assigns error to the following: (1) the court’s inclusion of jewelry on her list of distributions; (2) the court’s exclusion from marital debt the $2400 loan she incurred in moving out of the house and renting an apartment; (3) the court’s valuation of Curtis’ business and personal bank account; (4) the court’s alleged exclusion of the Ingersall Rand jackhammer from its distribution of property; (5) the court’s valuation of the two-ton truck and trailer; (6) the court’s failure to assign a value and distribute separately the hitch used to pull the fifth wheel camper; (7) the court’s failure to consider Curtis’ $3611 payment of attorney’s fees out of the marital estate prior to distribution; (8) the court’s failure to consider $14,595 worth of expenditures made by Curtis prior to distribution; and (9) the court’s failure to adopt Sandee’s proposed obligatory language designed to protect her distributions from any future declaration of bankruptcy by Curtis.

¶27 None of these alleged errors, with the exception of number (5), is properly before this Court. We will not entertain issues or theories raised for the first time on appeal. In re Marriage of Binsfield (1995), 269 Mont. 336, 344, 888 P.2d 889, 894. Under § 46-20-104(2), MCA, failure to make a proper objection at trial constitutes a waiver of the objection. Additionally, Rule 103(a)(1), M.R.Evid., requires that objections be timely and specific. The underlying policy of these rules is the idea that a court cannot be placed in error for something which it never had the opportunity to decide.

¶28 Our review of the record indicates that Sandee made only a blanket, overall objection to Curtis’proposed division of property on the basis that the values he had assigned to the items were subjective. With the exception of error (5), Sandee failed to adequately present to the trial court, by objection, testimony, argument, or otherwise, the other eight alleged errors. Therefore, we cannot now consider them on appeal.

¶29 We now turn to alleged error (5). At trial, Sandee valued the 1983 International two-ton truck and custom trailer together at $15,000. Sandee testified that the $15,000 value she assigned to the truck and trailer was based on one of Curtis’ prior loan applications in which he listed the truck and trailer as collateral valued at $ 15,000. However, Curtis testified that the truck and trailer were worth $10,000; $8000 for the truck and $2000 for the custom trailer. The record reflects that Curtis’ valuation of the truck and trailer was based on his estimate of how useful the items actually were. The court adopted Curtis’ valuation of the truck and trailer.

¶30 Sandee contends that the court erred in failing to adopt her valuation of the truck and trailer. In cases tried to the court without a jury, the credibility of witnesses and the weight to be afforded their testimony is a matter left to the sound discretion of the district court. Keebler v. Harding (1991), 247 Mont. 518, 523, 807 P.2d 1354, 1357. In Wessel, we stated:

This Court’s function ... is not to substitute its judgment in place of the trier of facts but rather it is “confined to determine whether there is substantial credible evidence to support” the findings of fact.... Although conflicts may exist in the evidence presented, it is the duty and function of the trial judge to resolve such conflicts.

Wessel, 715 P.2d at 50 (citations omitted). Both Sandee and Curtis submitted evidence concerning the value of the truck and trailer. The court believed Curtis’ evidence to be more credible. We conclude that the District Court’s finding that the truck and trailer were worth $10,000 was adequately supported by substantial evidence and, therefore, was not clearly erroneous. Further, we determine that based on the record, the court neither acted arbitrarily nor exceeded the bounds of reason in valuing the truck and trailer. Thus, we conclude that the District Court did not abuse its discretion in valuing the truck and trailer at $10,000.

Issue 2

¶31 Did the District Court err in designating Curtis residential custodian of the parties’ two youngest children?

¶32 The District Court is to determine custody in accordance with the best interests of the child, considering all relevant factors, pursuant to § 40-4-212, MCA. In determining custody of the parties’ two youngest children, R.K. and T.K., the District Court found that it was in the children’s best interests for Curtis and Sandee to share joint custody, with Curtis designated the primary residential custodian.

¶33 Sandee argues that no substantial, credible evidence exists to support the court’s designation of Curtis as the primary custodian. We disagree. In Otto v. Otto (1990), 245 Mont. 271, 274-75, 800 P.2d 706, 708, we stated:

As this Court has said many times, the trial judge in a divorce proceeding is in a better position than this Court to resolve child custody. * * * Despite conflicting testimony of the parties in this case, substantial evidence supports the District Court’s conclusion. Further, the findings show the court considered all factors listed in § 40-4-212, MCA.

¶34 Like the Court in Otto, the District Court here considered the factors set forth in § 40-4-212, MCA, and made appropriate findings. A complete examination of the record, much of which is set out in the beginning of this opinion, reveals that substantial, credible evidence exists to support the court’s findings regarding custody. Both Curtis and Sandee presented evidence to the court regarding the best interests of the children. The District Court found Curtis’ evidence more substantial and credible. Again, the credibility of witnesses and the weight to be afforded their testimony is a matter left to the sound discretion of the district court. Keebler, 807 P.2d at 1357.

¶35 Sandee next argues that in her effort to regain custody of the children after the court’s September 19, 1996 temporary custody order, the court erred by imposing on her a higher threshold showing of changed circumstances than is normally required under § 40-4-219, MCA. Sandee cites no legal authority for her argument. Rather, her argument is supported only by an assertion that the District Court was “predisposed” to rule against her on the issue of custody. Sandee cites the following language as evidence of the court’s predisposition to rule against her:

Court: It sounds like she’s really unhappy with my decision. Let’s get the thing decided and march over to Helena and get seven other judges for the second opinion. That’s the way to handle this, Counselor, not come running back at me every three weeks with a request to change this thing. Get it resolved. Get my decision. If you don’t like it, appeal it.

¶36 This language was part of the court’s November 13, 1996 hearing on Sandee’s motion for change of temporary custody and partial distribution of assets. An examination of the record indicates that the above language appears in the larger context of an overall admonition by the court to the parties to refrain from re-litigating the issues. First, the court was informed by Curtis’ counsel that both parties had already stipulated that the hearing held September 18 and 19,1996, would be the only custody hearing in the matter. Second, the court expressed dismay over discussing a change of temporary custody and partial distribution of assets when the parties had not yet submitted their proposals for division of property and custody. The court stated that it would not engage in a “piecemeal” decision regarding distribution of property and custody, because that approach had been outlawed by the Montana Legislature a long time ago.

¶37 In our view, the above language evidences only the court’s admonition to Sandee that she follow proper procedure. Nothing in the record indicates to us that the court was biased against Sandee at any time during the proceedings. We hold that the court’s designation of Curtis as the primary residential custodian was not clearly erroneous.

Issue 3

¶38 Did the District Court err in its award of child support?

¶39 Child support obligations are determined in accordance with the factors set out in § 40-4-204, MCA, and the uniform child support guidelines, located in Title 46, Chapter 30, subchapter 15 of the Administrative Rules of Montana. Section 40-4-204(3)(a), MCA, provides:

The guidelines must be used in all cases .... The amount determined -under the guidelines is presumed to be an adequate and reasonable support award, unless the court finds by clear and convincing evidence that the application of the standards and guidelines is unjust to the child or to any of the parties or that it is inappropriate in that particular case.

If a district court deviates from the amount of child support determined under the guidelines, it must make specific findings in writing to explain its calculation of child support and reasons for deviating from the guidelines. Section 40-4-204(3)(b), MCA; In re Marriage of Brandon (1995), 271 Mont. 149, 152, 894 P.2d 951, 953.

¶40 Curtis submitted to the court a financial affidavit listing his purported income, assets, and expenses. Curtis’ figures were based on his 1997 projected income of $42,203 and Sandee’s imputed income of $20,800 based on wages as a licensed truck driver. Sandee refuted Curtis’ calculations by submitting to the court an exhibit showing Curtis’ gross income based on a four-year average with depreciation added back to gross income. Sandee based her imputed income on the minimum wage she was earning in her janitorial position.

¶41 Both Curtis and Sandee submitted child support guidelines worksheets used to calculate appropriate child support obligations for the parties. Curtis claimed four children required support, while Sandee claimed there were only three children who needed support. Sandee argued that although C.K. would be living with Curtis, he should not be considered in the child support calculations because he was an emancipated child.

¶42 In its Finding of Fact 25, the District Court found that because C.K. was emancipated, Sandee should be required to pay child support to Curtis for only three children. The court determined Sandee’s child support obligation to be $180 per month. The court stated it reached this figure by adopting the sum of Curtis’ net income from his worksheet and proposal, adopting the sum of Sandee’s net income from her worksheet and proposal, and adopting Curtis’ calculation for health insurance.

¶43 Sandee argues the court erred in its calculation of the parties’ child support obligations on several grounds. First, Sandee contends that Curtis’ gross income should have been determined by averaging his income over the years 1992-1995, rather than projecting his 1997 income. As support for her contention, Sandee cites § 46.30.1515(3)(a), ARM, which provides that “seasonal employment or fluctuating income should be averaged over a period sufficient to accurately reflect the parent’s earning ability.” We reject Sandee’s contention.

¶44 Section 46.30.1515(3), ARM, expresses a preference that gross income and expenses be annualized “to avoid ... skewed application of the guidelines based on temporary or seasonal conditions.” However, the administrative rule specifies two methods of annualizing: subpart (a) recited above, and subpart (b) which states “current income or expenses may be projected when a recent increase or decrease in income is expected to continue for the foreseeable future.” The court properly utilized method (b), projected income, because it found a decrease in income was expected to continue for the foreseeable future. In Finding of Fact 16, the court stated:

Petitioner’s [Curtis’] vocations, skills, and employability indicate that he is capable of earning $43,202.96 in 1997. Petitioner’s opportunity to acquire income or assets in the future is presently limited because of his responsibility of rearing and supporting the minor children of the parties and is moderate for the future following the rearing of the minor children because of the extreme physical requirements and inherent dangers found in the drilling and blasting business. Petitioner has no other sources of income.

Sandee does not contest this particular finding. Under these circumstances, we hold that the court did not abuse its discretion in determining Curtis’ gross income based on his projected 1997 earnings and expenses.

¶45 Second, Sandee argues that the court should not have included depreciation in Curtis’ allowable deductions from gross income. Sandee cites § 40.30.1508(l)(c), ARM, for the rule that depreciation is generally not deductible from gross income, except for cases in which “economic necessity” is shown. Sandee argues Curtis failed to show sufficient economic necessity to qualify for the exception. We do not agree.

¶46 Finding of Fact 16, quoted above, reflects the court’s consideration of a decrease in Curtis’ income in both the near and distant future, and the fact that he had no other sources of income. Sandee presented no evidence to the District Court refuting these facts. We cannot place the trial court in error for a ruling or procedure in which the appellant acquiesced, participated, or to which the appellant made no objection. In re Marriage of Smith (1990), 242 Mont. 495, 501, 791 P.2d 1373, 1377. We conclude the court did not abuse its discretion in deducting depreciation from Curtis’ gross income.

¶47 Finally, Sandee argues that her imputed income should not have included a $3110 federal income tax earned income credit. She argues that because she was not awarded residential custody of the minor children, she is ineligible for the tax credit and, therefore, the tax credit should be excluded from her imputed income. In his brief to this Court, Curtis conceded this issue and admitted that Sandee’s imputed income was overstated by the amount of $3110. Therefore, we reverse and remand this issue to the District Court for its re-calculation of Sandee’s child support obligation.

Issue 4

¶48 Did the District Court err in declining to award Sandee rehabilitative maintenance?

¶49 Spousal maintenance is warranted only if the spouse seeking maintenance lacks sufficient property to provide for his reasonable needs, and is unable to support himself through appropriate employment. Section 40-4-203(1), MCA. In deciding whether a spouse meets this criteria, a court must consider the following factors:

(a) the financial resources of the party seeking maintenance including marital property apportioned to him, and his ability to meet his needs independently, ...;
(b) the time necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment;
(c) the standard of living established during the marriage;
(d) the duration of the marriage;
(e) the age and the physical and emotional condition of the spouse seeking maintenance; and
(f) the ability of the spouse from whom maintenance is sought to meet his needs while meeting those of the spouse seeking maintenance.

Section 40-4-203(2), MCA.

¶50 The District Court ultimately concluded that Sandee did not meet the necessary criteria for spousal maintenance. In reaching its conclusion, the court relied on findings already discussed herein concerning division of property, custody, and child support, in addition to the following:

17. That Respondent [Sandee] is employed part-time by a cleaning service and earns a salary of $5.50 per hour. Respondent has ahigh school education. Respondent’s vocational skills and employability indicate that she is capable of earning considerably more in the future, if she completes her education at the Salish and Kootenai College. Respondent has taken computer and bookkeeping courses and has successfully completed a truck driving course and has a commercial driving license. Respondent’s opportunity to acquire income or assets in the future is average. Respondent has no other sources of income.
22. That Respondent [Sandee] has sufficient property, following the division of the marital estate as ordered herein, to provide for her reasonable needs, and Respondent is able to support herself through appropriate employment.

¶51 Sandee argues that no substantial evidence exists to support the court’s denial of spousal maintenance. First, Sandee argues that the trailer residence she was awarded was not income-producing property. Sandee points to the appraiser’s testimony that the trailer was worth nothing. However, a closer look at the record reveals that the appraiser testified that although the trailer itself had no value, the land on which the trailer was situated was valued at $37, 500. The appraiser based this value on the facts that the land was located on a high water table, it had an existing septic system, and it could easily accommodate a house. Further, Curtis points out that Sandee testified she was not living at the trailer residence, but at another residence in Poison. Sandee did not present evidence that the trailer residence could not be rented. We also note that Sandee was awarded several vehicles, valued at a total of $27,000, and a camper carrying a debt of only $3000. Under these facts, we hold that there existed substantial evidence to support the court’s finding that Sandee possessed sufficient property to provide for her needs.

¶52 Next, Sandee argues that despite having taken computer and bookkeeping courses, having successfully completed a truck driving course, and having a commercial driving license, her vocations and skills do not allow her to support herself. Sandee points to testimony of the college registrar who stated that the computer courses Sandee took did not add up to a “degree” in computers. She also points to Curtis’ testimony that she “didn’t have what it took” to drive the family business trucks. Sandee argues that due to her lack of employability, she is entitled to rehabilitative maintenance for a period sufficient to procure vocational training. We reject Sandee’s argument.

¶53 Sandee’s college transcript shows that Sandee took twelve computer and accounting courses and received A’s and B’s in all of them. She completed a truck driving course and received A’s and B’s. Although Sandee’s instructor noted Sandee needed to practice and work on her truck driving skills, he scored her a B on the truck driving test. Again, we note that the credibility of witnesses and the weight to be afforded their testimony is a matter left to the sound discretion of the district court. Keebler, 807 P.2d at 1357. We hold substantial evidence existed to support the court’s finding that Sandee was able to support herself through appropriate employment. The court’s denial of rehabilitative spousal maintenance to Sandee was not clearly erroneous.

¶54 We affirm in part, reverse in part, and remand to the District Court for further findings, regarding the parties’ child support obligations, consistent with this opinion.

JUSTICES NELSON, REGNIER, LEAPHART and TRIEWEILER concur.


source: Caselaw Access Project

author: JUSTICE NELSON

license: Public Domain

text:
    BI-LO FOODS, INC., Plaintiff and Appellant, v. ALPINE BANK, CLIFTON; ALPINE BANK, GRAND JUNCTION; and DONALD E. HERMANN, JR., d/b/a D. HERMANN & CO., Defendants and Respondents.
    No. 97-090.
    Submitted on Briefs June 19, 1997.
    Decided February 24, 1998.
    1998 MT 40.
    55 St.Rep. 131.
    287 Mont. 367.
    955 P.2d 154.

      For Appellant: Margaret L. Sanner, Milodragovich, Dale, Steinbrenner & Binney, Missoula.

      For Respondent: John E. Bohyer, Fred Simpson, Phillips & Williams, Missoula.
   JUSTICE NELSON

delivered the Opinion of the Court.

¶1 Bi-Lo Foods, Inc. (Bi-Lo) appeals an order of the District Court for the Fourth Judicial District, Missoula County, dismissing Bi-Lo’s complaint against Alpine Bank, Clifton and Alpine Bank, Grand Junction (Alpine) for lack of personal jurisdiction. We affirm.

¶2 We address the following issues on appeal:

¶3' 1. Whether the District Court erred in determining that it did not have personal jurisdiction over Alpine.

¶4 2. Whether Bi-Lo appealed without substantial or reasonable grounds thus warranting sanctions.

Factual and Procedural Background

¶5 Bi-Lo is a corporation whose principal place of business is in Missoula, Montana. Donald Hermann d/b/a D. Hermann & Co. (Hermann) is a sole proprietorship licensed to do business in Colorado. Alpine is a corporation organized and chartered under the laws of Colorado and it is licensed to do business in Colorado.

¶6 Bi-Lo and Hermann entered into negotiations for the purchase of refrigeration equipment. As part of these negotiations, Hermann instructed Bi-Lo to deposit earnest money into an escrow account at Alpine’s offices in Grand Junction, Colorado. On March 3,1994, Bi-Lo sent Alpine a check in the amount of $10,000 listing Alpine as payee. In response to Bi-Lo’s claim that there were no other notations on the check, Alpine alleged that included with the check was the number for Hermann’s bank account with Alpine. Consequently, Alpine deposited the check into Hermann’s account. Thereafter, negotiations between Bi-Lo and Hermann broke down. Bi-Lo demanded that its escrow money be returned, but both Alpine and Hermann refused.

¶7 On August 2, 1995, Bi-Lo filed a complaint against Alpine alleging that Alpine acted negligently and breached the transfer warranty created by § 30-4-207(l)(a), MCA. Bi-Lo also sought recovery from Donald Hermann for conversion, fraudulent inducement and unjust enrichment. Pursuant to Rule 12(b)(2), M.R.Civ.P., Alpine moved to dismiss the claims against it, arguing that the trial court did not have personal jurisdiction over Alpine. Bi-Lo filed a brief opposing the motion to dismiss and moved for leave to engage in discovery to support its assertion that Montana does have personal jurisdiction over Alpine.

¶8 In an order filed November 22,1995, the District Court granted Bi-Lo leave to conduct limited, written discovery on the issue of jurisdiction. Thereafter, a dispute arose between the parties over Bi-Lo’s attempt to discover whether Alpine had any customers that were residents of Montana and whether Alpine had ever provided financing for business activities in Montana. Alpine insisted that the majority of its closed accounts and old transactions were only available on microfiche and that it would take an employee five or six months to search through these files to obtain the information Bi-Lo requested. As a result, Bi-Lo filed a motion for sanctions against Alpine for failing to make a reasonable attempt to fulfill its discovery obligations and Alpine filed a motion for a protective order claiming that Bi-Lo’s discovery requests were unduly burdensome.

¶9 On March 8,1996, the District Court denied both Bi-Lo’s motion for sanctions and Alpine’s motion for a protective order. Nevertheless, the court determined that the costs of discovery were burdensome to Alpine and it ordered Bi-Lo to pay the costs of obtaining further discovery. Bi-Lo responded to this order by stating that it did not wish to pay Alpine’s alleged costs of searching its files.

¶ 10 On April 8,1996, Alpine renewed its motion to dismiss for lack of personal jurisdiction and its motion for a protective order. Two weeks later, Alpine filed a supplemental brief opposing further discovery. Included with this brief was an affidavit from Alpine’s president stating that he had directed one of his employees to create a special computer program to search the current records of the Grand Junction bank for any customers with Montana addresses. The search located only one customer with a Montana address. The records on this customer indicated that he was living in Colorado at the time he took out a loan with Alpine and that he later moved to Montana. Bi-Lo subsequently requested that Alpine engage in the same type of search in its Clifton location.

¶11 On May 24, 1996, the District Court ordered Alpine to file an affidavit containing a statement of the costs associated with the development of the computer program used to search Alpine’s records, the cost of the search already conducted and the expected cost of the additional search requested by Bi-Lo. However, on July 26, 1996, before Alpine could comply with the court’s request, Bi-Lo notified the court that it was satisfied that it had received adequate responses to its discovery requests and that Alpine’s motion to dismiss was ripe for adjudication.

¶12 On November 26, 1996, the District Court issued its Memorandum and Order granting Alpine’s motion to dismiss for lack of personal jurisdiction. Bi-Lo appeals from this order.

Issue 1.

¶ 13 Whether the District Court erred in determining that it did not have personal jurisdiction over Alpine?

¶14 In granting Alpine’s motion to dismiss for lack of personal jurisdiction, the District Court concluded that any alleged negligence or breach of warranty as a result of Alpine’s actions accrued in Colorado, not in Montana. Moreover, the court concluded that Alpine does not have the requisite “minimum contacts” with the State of Montana and that the exercise of jurisdiction over Alpine would not be reasonable. This Court reviews legal conclusions to determine whether the district court’s interpretation of the law is correct. Bird v. Hiller (1995), 270 Mont. 467, 470, 892 P.2d 931, 932 (citing Warnack v. Coneen Family Trust (1994), 266 Mont. 203, 207, 879 P.2d 715, 718).

¶15 To determine whether a Montana court can exercise personal jurisdiction over a nonresident defendant, this Court applies a two-part test:

First we must determine if personal jurisdiction exists either by way of the defendant being “found” within the state, or by way of the long-arm statutes. Second we must determine whether exercising jurisdiction comports with the defendant’s due process rights. If, after determining personal jurisdiction does not exist under the first step of the analysis, further analysis under the second step is unnecessary.

Bird, 270 Mont. at 470, 892 P.2d at 933 (citing Edsall Const. Co., Inc. v. Robinson (1991), 246 Mont. 378, 381, 804 P.2d 1039, 1041).

¶16 Personal jurisdiction in Montana is controlled by Rule 4B, M.R.Civ.P., which provides in pertinent part:

(1) Subject to jurisdiction. All persons found within the state of Montana are subject to the jurisdiction of the courts of this state. In addition, any person is subject to the jurisdiction of the courts of this state as to any claim for relief arising from the doing personally, through an employee, or through an agent, of any of the following acts:
(a) the transaction of any business within this state;
(b) the commission of any act which results in accrual within this state of a tort action;
(c) the ownership, use or possession of any property, or of any interest therein, situated within this state;
(d) contracting to insure any person, property or risk located within this state at the time of contracting;
(e) entering into a contract for services to be rendered or for materials to be furnished in this state by such person; or
(f) acting as director, manager, trustee, or other officer of any corporation organized under the laws of, or having its principal place of business within this state, or as personal representative of any estate within this state.

¶17 Rule 4B(1), M.R.Civ.P., incorporates the principles of both general and specific jurisdiction. General jurisdiction is found within the first sentence of Rule 4B(1) and pertains to whether a party can be “found” within Montana. Bird, 270 Mont. at 471, 892 P.2d at 933 (citing Simmons Oil Corp. v. Holly Corp. (1990), 244 Mont. 75, 83, 796 P.2d 189, 194).

A party is “found within” the state if he or she is physically present in the state or if his or her contacts with the state are so pervasive that he or she may be deemed to be physically present there. A nonresident defendant that maintains “substantial” or “continuous and systematic” contacts with the forum state is found within the state and may be subject to that state’s jurisdiction even if the cause of action is unrelated to the defendant’s activities within the forum.

Lurie v. 8182 Maryland Associates (1997), 282 Mont. 455, 458, 938 P.2d 676, 678 (quoting Simmons Oil, 244 Mont. at 83, 796 P.2d at 194).

¶18 The concept of specific long-arm jurisdiction is addressed in the remainder of Rule 4B(1). Under this concept, specific long-arm jurisdiction may be established, even though a defendant maintains minimum contacts with the forum, as long as the plaintiff’s cause of action arises from any of the activities enumerated in Rule 4B(1), and the exercise of jurisdiction does not offend due process. Bird, 270 Mont. at 471, 892 P.2d at 933 (citing Simmons Oil, 244 Mont. at 83-84, 796 P.2d at 194).

¶19 In the case before us on appeal, Bi-Lo does not contend that Montana has general jurisdiction over Alpine. Alpine cannot be said to be “found” within Montana as Alpine does not maintain “substantial” or “continuous and systematic” contacts within Montana. Alpine has no employees in Montana and does not conduct or transact business in Montana. Alpine does not advertise in Montana or otherwise solicit business from Montana residents. Alpine does not own any real or personal property in Montana. Alpine had never had any contact with Bi-Lo prior to receiving Bi-Lo’s check. Alpine had not solicited any business from nor attempted to engage in any relationship with Bi-Lo in Montana or Colorado. Alpine never entered into any contract with Bi-Lo to render services or furnish materials to Bi-Lo. Bi-Lo does not maintain any accounts with Alpine. During discovery, it was learned that Alpine’s Grand Junction location has only one current customer with a Montana address. However, at the time that customer applied for his loan with Alpine, he had a Colorado address.

¶20 Bi-Lo alleged in its complaint that specific long-arm jurisdiction exists over Alpine because Bi-Lo’s cause of action arises from the activities enumerated in Rule 4B(1), specifically subsections (a), (b) and (e). However, on appeal, Bi-Lo argues for specific long-arm jurisdiction only under subsection (b) which subjects any person to the jurisdiction of the courts of this state for “the commission of any act which results in accrual within this state of a tort action.” Bi-Lo argues that the torts of negligence and breach of warranty accrued in Montana because the injury occurred here.

¶21 Bi-Lo contends that by cashing its check and disbursing the funds to Hermann, Alpine took voluntary actions which were calculated to have an effect in Montana, did cause injury in Montana to a Montana resident, and should have caused Alpine to reasonably anticipate being haled into court in Montana. Bi-Lo argues that courts throughout the country have upheld constitutional challenges to jurisdiction over nonresident defendants where intentional and/or negligent tortious activity was committed outside the forum state but where the resulting injury was experienced in the forum state.

¶22 Bi-Lo relies on several cases from the United States District Court for the District of Montana for its proposition that a tort action accrues in the state where the injury occurs. We conclude that Bi-Lo’s reliance on these cases is misplaced.

¶23 In the first of these cases, Bullard v. Rhodes Pharmacol Co. (D. Mont. 1967), 263 F.Supp. 79, a Montana resident brought a products liability action against an Ohio corporation that manufactured hair styling products. The plaintiff alleged that the product caused damage to her respiratory system. The court held that personal jurisdiction under Montana’s long arm statute was proper. Bullard, 263 F.Supp at 82. In Bullard, the plaintiff purchased the product in Montana and used the product in Montana. Thus, both the injury-causing event (the purchase and use of the product) and the injury occurred in Montana.

¶24 In Hartung v. Washington Iron Works (D. Mont. 1964), 267 F.Supp. 408, also cited by Bi-Lo, several workmen were killed because of the alleged defective design of a cableway manufactured by a nonresident defendant. The court held that even though the negotiations for the sale of the cableway were conducted in Washington and the defendant did not supervise the installation of the cableway, sufficient contacts existed to find personal jurisdiction proper within Montana. Hartung, 267 F.Supp. at 411. In Hartung, representatives of the defendant came to Montana “to examine and consult” regarding the installation and use of the cableway. Moreover, the injury-causing event (the failure of the cableway) and the injury occurred in Montana.

¶25 In Scanlan v. Norma Projektil Fabrik (D. Mont. 1972), 345 F.Supp. 292, the plaintiff brought a personal injury action against a Swedish ammunition manufacturer after sustaining injuries due to allegedly defective ammunition. The manufacturer had no place of business or agents in the United States and the plaintiff did not purchase the ammunition in Montana. However, the accident occurred while the plaintiff was on a hunting trip in Montana. The court held that personal jurisdiction over the nonresident defendant was proper in Montana. Scanlan, 345 F.Supp. at 293. Again the injury-causing event (the explosion of the ammunition) and the injury occurred in Montana.

¶26 Finally, in McGee v. Riekhof (D. Mont. 1978), 442 F.Supp. 1276, the plaintiff underwent eye surgery in Utah by the defendant physician. After the surgery the plaintiff returned to Montana where he received medical advice from the doctor by telephone that he could return to work. On his first day back at work, the plaintiff re-injured his eye. The court held that jurisdiction over the defendant physician was proper based upon the fact that the telephone call clearing the plaintiff to return to work amounted to a new diagnosis and was rendered to plaintiff while he was in Montana. McGee, 442 F.Supp at 1279. Once again, both the injury-causing event (the new diagnosis clearing the plaintiff to return to work) and the injury occurred in Montana. In addition, the court in McGee stated:

In the case of personal services focus must be on the place where the services are rendered, since this is the place of the ... patient’s need. ... It is in the very nature of such services that their consequences will be felt wherever the person may choose to go. However, the idea that tortious rendition of such services is a portable tort which can be deemed to have been committed wherever the consequences foreseeably were felt is wholly inconsistent with the public interest in having services of this sort generally available.

McGee, 442 F.Supp. at 1278 n.1 (citing Wright v. Yackley (9th Cir. 1972), 459 F.2d 287, 289-90).

¶27 Unlike the cases cited by Bi-Lo, the injury-causing event in the case at bar (depositing the check into Hermann’s bank account) occurred in Colorado, not Montana. Furthermore, as stated in McGee, “focus must be on the place where the services are rendered,” which in this case was Colorado. McGee, 442 F.Supp at 1278 n.1.

¶28 Both the District Court and Alpine rely on this Court’s decision in Bird v. Hiller (1995), 270 Mont. 467, 892 P.2d 931, to support dismissal of Bi-Lo’s claim for lack of personal jurisdiction. We find this case dispositive.

¶29 In Bird, several Montana residents retained an Idaho attorney to represent them in their claims arising out of an automobile accident in Idaho. After the attorney reached a settlement on behalf of the plaintiffs, a disagreement arose between the attorney and plaintiffs over the attorney fees. Because the settlement checks named the attorney as one of the payees, the plaintiffs sent the checks to him to endorse. However, he refused to return the checks or remit the proceeds to the plaintiffs unless they agreed to allow him to deduct his fees and expenses. The plaintiffs then filed suit against the attorney in a Montana court alleging claims of conversion, fraud and deceit. The district court dismissed the complaint for lack of personal jurisdiction over the attorney. Bird, 270 Mont. at 470, 892 P.2d at 931.

¶30 The plaintiffs in Bird argued on appeal that the tort of conversion accrued in Montana based on the attorney’s acts of sending them a fee contract and a letter stating that he was going to withhold the settlement checks. We rejected the plaintiff’s argument holding that the tort accrued in Idaho because that is where the attorney came into possession of and allegedly asserted unauthorized control over the checks. Bird, 270 Mont. at 472, 892 P.2d at 934.

¶31 So too, in the instant case, Alpine did not engage in any activity in Montana. All acts giving rise to Bi-Lo’s claims of negligence and breach of warranty occurred in Colorado. Bi-Lo sent its check to Alpine in Colorado. Alpine deposited the check into the account of one of its customers in Colorado. Alpine’s alleged mishandling of the check occurred in Colorado. Accordingly, Alpine’s activities did not result in the accrual of a tort action in Montana.

¶32 Since Bi-Lo has not alleged any claim of general jurisdiction and since we have determined that Alpine has not engaged in any of the several activities enumerated in our specific long-arm jurisdiction statute, our analysis ends here and we have no authority to exercise jurisdiction. Simmons v. State (1983), 206 Mont. 264, 272, 670 P.2d 1372, 1376. See also Bird, 270 Mont. at 470, 892 P.2d at 933; Edsall, 246 Mont. at 381, 804 P.2d at 1041.

¶33 Accordingly, we hold that the District Court did not err in granting Alpine’s motion to dismiss for lack of personal jurisdiction.

Issue 2.

¶34 Whether Bi-Lo appealed without substantial or reasonable grounds thus warranting sanctions.

¶35 Alpine asks this Court to award it its fees pursuant to Rule 32, M.R.App.P., which provides:

If the supreme court is satisfied from the record and the presentation of the appeal in a civil case that the same was taken without substantial or reasonable grounds, such damages may be assessed on determination thereof as under the circumstances are deemed proper.

Alpine contends that it has incurred thousands of dollars in attorneys’ fees responding to discovery, seeking protective orders, and moving for dismissal when the lack of personal jurisdiction in this case is clear. Bi-Lo contends, on the other hand, that sanctions are not warranted in this case as there is an arguable basis for the appeal.

¶36 This Court does not readily impose sanctions for filing frivolous appeals. Federated Mut. Ins. Co. v. Anderson (1996), 277 Mont. 134, 142, 920 P.2d 97, 102. As a general rule, we impose sanctions in cases only where the appeal is entirely unfounded and intended to cause delay, CNA Ins. Companies v. Dunn (1995), 273 Mont. 295, 301, 902 P.2d 1014, 1018, or where counsel’s actions otherwise constitute an abuse of the judicial system, Bickler v. The Racquet Club Heights Assoc. (1993), 258 Mont. 19, 25, 850 P.2d 967, 971.

¶37 We will not impose sanctions under Rule 32, where a reasonable ground for an appeal exists. Tope v. Taylor (1988), 235 Mont. 124, 132, 768 P.2d 845, 850 (citations omitted). While Bi-Lo’s grounds for appeal in this case may be weak, they are not unreasonable, therefore, we deny Alpine’s request for sanctions.

¶38 Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES GRAY, REGNIER and TRIEWEILER concur.


author: JUSTICE GRAY

text:
    BILLY B. MILLHOLLIN, Plaintiff and Appellant, v. THE CONVEYOR COMPANY, Defendant and Respondent.
    No. 97-315.
    Submitted on Briefs October 16, 1997.
    Rehearing Denied March 19, 1998.
    Decided February 24, 1998.
    1998 MT 41.
    55 St.Rep. 136.
    287 Mont. 377.
    954 P.2d 1163.

      For Appellant: Richard C. Conover, Attorney at Law, Bozeman; A. Lance Tonn; Lucas & Monaghan, Miles City.
    For Respondent: Neil G. Westesen; Crowley, Haughey, Hanson, Toole & Dietrich, Billings.
   JUSTICE GRAY

delivered the Opinion of the Court.

¶1 Billy B. Millhollin (Millhollin) appeals from the judgment entered by the Sixteenth Judicial District Court, Rosebud County, on its order granting the motion for summary judgment filed by The Conveyor Company (TCC) and denying his summary judgment motion. We affirm.

¶2 The dispositive issue on appeal is whether the District Court erred in concluding that TCC did not breach its contract with Millhollin and in granting TCC’s motion for summary judgment on that basis.

BACKGROUND

¶3 Millhollin invented a device for aligning conveyor belts which he called a Conveyor Belt Return Training Device (Belt Trapper). He applied for a United States patent for the invention in 1991, and the patent was issued on April 27, 1993.

¶4 In 1992, Millhollin and TCC entered into an Agreement regarding the Belt Trapper. Millhollin granted TCC the exclusive right to make, use and sell the Belt Trapper in both the United States and foreign countries and, in return, TCC agreed to pay Millhollin a royalty on each Belt Trapper it sold, plus a percentage of the price of all replacement parts and accessories it sold, with a guaranteed minimum payment to Millhollin in each of the first five years covered by the Agreement. During both the United States patent application process and the negotiation of the Agreement, Millhollin was represented by Bozeman attorney Richard Conover (Conover).

¶5 Article VI of the Agreement gave TCC the right to pursue additional patent applications, both foreign and domestic, at its own expense. In the event TCC chose not to file any patent applications, Millhollin retained the right to do so at his own expense. The Agreement further required TCC to assign any patent applications it filed to Millhollin.

¶6 TCC decided to file foreign patent applications for the Belt Trapper in Europe and Canada. It requested Conover to file the applications because of his familiarity with the earlier United States patent application. Conover filed the requested European and Canadian patent applications and TCC paid the fees and expenses he incurred. Eventually, however, TCC decided to use a different attorney to pursue the foreign patent applications because it believed the fees and expenses charged by Conover were too high. TCC informed Conover of its decision to terminate his services via a letter which also stated that a check for the balance due him was being sent to its corporate attorney, Robert Dwyer (Dwyer), who would forward the check to Conover after TCC received all of the files pertaining to the foreign patent applications from Conover. Acting on instructions from Millhollin, Conover refused to turn the patent application files over to TCC. As a result, Dwyer did not forward payment for the remainder of Conover’s bill.

¶7 Millhollin subsequently sent TCC a written notice of default which asserted that TCC was in breach of Article VI of the Agreement by failing to pay the expenses incurred in its pursuit of the foreign patent applications; the notice gave TCC 30 days to remedy the alleged breach by paying Conover’s bill in full. Because the patent application files still had not been received from Conover, TCC did not make payment within 30 days.

¶8 Thereafter, Millhollin declared that the Agreement was terminated, pursuant to Article XII, and filed this declaratory judgment action requesting the District Court to declare that the Agreement was properly terminated. He also requested an award of damages, including reimbursement of the amount he paid Conover for the patent application-related expenses which TCC had not paid.

¶9 TCC and Millhollin both moved for summary judgment. The District Court granted TCC’s motion and denied Millhollin’s, concluding that TCC had not breached the Agreement and that, even if a breach had occurred, it was not sufficiently material to justify termination of the Agreement. Judgment was entered and Millhollin appeals.

STANDARD OF REVIEW

¶10 We review a district court’s summary judgment ruling de novo, using the same Rule 56, M.R.Civ.P., criteria as the district court. Clark v. Eagle Systems, Inc. (1996), 279 Mont. 279, 283, 927 P.2d 995, 997 (citations omitted). Pursuant to Rule 56(c), M.R.Civ.P, the moving party must establish, in light of the pleadings and other evidence before the court, the absence of any genuine issue of material fact and entitlement to judgment as a matter of law. Clark, 927 P.2d at 997-98 (citations omitted). Only when this initial burden has been met must the nonmoving party come forward with evidence raising a genuine issue of material fact. Clark, 927 P.2d at 998.

¶ 11 Ordinarily, our review in summary judgment cases begins with a determination of whether the moving party established the absence of disputed and material fact issues. See, e.g., Montana Metal Buildings, Inc. v. Shapiro (1997), 283 Mont. 471, 475, 942 P.2d 694, 696-97. Here, however, Millhollin does not contend that a genuine issue of material fact exists. He argues only that the District Court erred in concluding that TCC did not breach the Agreement and that it was entitled to summary judgment on that basis. We review a district court’s conclusions of law to determine whether those conclusions are correct. Albright v. State, by and through State (1997), 281 Mont. 196, 205, 933 P.2d 815, 821.

DISCUSSION

¶12 Did the District Court err in concluding that TCC did not breach its contract with Millhollin and in granting TCC’s motion for summary judgment on that basis?

¶13 In concluding that TCC did not breach the Agreement, the District Court determined that Article VI of the Agreement granted TCC the primary right to pursue the foreign patent applications, which right necessarily included the right to possession of the files created by an attorney, at TCC’s expense and direction, during the patent application process. On that basis, the District Court concluded that TCC “had the right to legally tender payment to attorney Conover conditioned on receipt of the files for which it had paid” and that this conditional tender of payment was not a breach of the Agreement between TCC and Millhollin.

¶14 Millhollin raises several arguments in support of his overall contention that the District Court’s conclusions were erroneous. He first argues that TCC’s tender of payment was not legally sufficient to avoid breaching the Agreement because a tender of payment in fulfillment of a contractual obligation cannot be qualified or conditional. His underlying legal premise, however, is incorrect. A tender of payment may be conditional as long as the attached condition is one on which the tenderer has the right to insist. See § 28-1-1211, MCA; Advance-Rumely Thresher Co., Inc. v. Hess (1929), 85 Mont. 293, 301, 279 P. 236, 238; 74 Am. Jur. 2d Tender § 24 (1974). Thus, whether TCC’s conditional tender of payment to Conover was sufficient to avoid breaching the Agreement depends on whether TCC had the right to insist that Conover deliver the patent application files to TCC, and this question leads directly to Millhollin’s second assertion of error regarding the District Court’s conclusion that TCC did not breach the Agreement.

¶15 Millhollin asserts that, as the inventor of the Belt Trapper, he retains complete ownership of the invention, the patent applications and the patent application files and, because of his sole ownership, TCC had no right to possession of the files. Thus, he contends that TCC did not have the right to insist on delivery of the foreign patent application files as a condition of its paying the outstanding fees and expenses related thereto and, as a result, TCC’s conditional tender of payment was not sufficient to avoid breaching the Agreement. We disagree.

¶16 Prior to obtaining a patent on an invention, an inventor possesses inchoate rights to the exclusive use of the invention and to apply for a patent thereon. Hendrie v. Sayles (1878), 98 U.S. (8 Otto) 546, 551, 25 L.Ed. 176, 178; Gayler v. Wilder (1850), 51 U.S. (10 How.) 466, 467, 13 L.Ed. 504, 511. Once obtained, a patent confers upon the patentee the right to exclude others from manufacturing, using or selling the invention during the life of the patent. 35 U.S.C. § 154; Bell Intercontinental Corp. v. United States (Ct. Cl. 1967), 381 F.2d 1004, 1010. A patent has the attributes of personal property and is owned by the holder of the patent. 35 U.S.C. § 261; see, also, Cammeyer v. Newton (1876), 94 U.S. (4 Otto) 225, 226, 24 L.Ed. 72, 72.

¶17 However, an inventor may assign ownership of an invention, a patent or a patent application to another. See 35 U.S.C. § 261; Kenyon v. Automatic Instrument Co. (6th Cir. 1947), 160 F.2d 878, 882. For an agreement to constitute an assignment granting ownership title to an invention or patent, it must confer on the assignee the rights to make, use and sell the invention. Kenyon, 160 F.2d at 882. In other words, the agreement must indicate the inventor’s intent to transfer all of his pr her substantial rights in the invention to the assignee. Bell Intercontinental, 381 F.2d at 1011. A transfer by the inventor of anything less than the full rights to make, use and sell an invention constitutes only a license and does not give the licensee any ownership title in the invention or patent. Kenyon, 160 F.2d at 882.

¶ 18 Millhollin asserts that his Agreement with TCC is merely a license granting TCC the right to use the Belt Trapper, rather than an assignment transferring ownership of the invention and related patents to TCC. We note that Millhollin refers to the Agreement as the “License Agreement” in an attempt to buttress his argument. However, the document at issue here is clearly entitled “Agreement” and not “License Agreement.”

¶[19 Moreover,

whether the transfer of an interest or right under a patent is an assignment or a license, does not depend upon the name by which it is called, but upon the legal effect of its provisions. No particular form is required for an assignment but the instrument of transfer must be unambiguous and show a clear and unmistakable intent to part with the patent.

Kenyon, 160 F.2d at 882 (citing Waterman v. MacKenzie (1891), 138 U.S. 252, 256, 11 S.Ct. 334, 335, 34 L.Ed. 923, 925-26). Thus, a contract which conveys the right to make, use and sell an invention for the entire term of the patent is an assignment vesting title to the entire patent in the assignee without regard to its heading as a “license contract.” Kenyon, 160 F.2d at 883. Consequently, Millhollin’s references to the Agreement as a “License Agreement” do not establish that it created a license rather than an assignment of title; nor does the fact that the Agreement itself repeatedly refers to the “Licensed Product” establish that it is a mere license. Rather, the extent of the rights conferred under the Agreement is determinative.

¶20 While language in an agreement by which an inventor grants exclusive rights to make, use and sell an invention is the primary indicator of an inventor’s intent to assign ownership of an invention or patent, there are additional factors which are indicative of an intent to assign ownership. For example, an inventor’s conveyance of the right to sue patent infringers is a fundamental characteristic of an assignment. Sybron Transition v. Nixon, Hargrave, et al. (W.D.N.Y. 1991), 770 F.Supp. 803, 808 (citing Waterman, 138 U.S. at 255, 11 S.Ct. at 335). A transfer of the right to manufacture, use and sell an invention for the full term of the patent on that invention, rather than a transfer for a period less than the remaining life of the patent, also is indicative an assignment rather than a mere license to use. Bell Intercontinental, 381 F.2d at 1020. Further, an agreement which does not allow the grantor to terminate at will prior to the expiration of the patent indicates that the grantor intends an assignment of the invention or patent. Bell Intercontinental, 381 F.2d at 1022. Retention by the grantor of the right to terminate the agreement upon the grantee’s default or the occurrence of some other subsequent event beyond the grantor’s control, however, is not inconsistent with an assignment of ownership. Bell Intercontinental, 381 F.2d at 1011.

¶21 With these considerations in mind, we examine the Agreement here to determine the extent of the rights conferred by Millhollin to TCC. Of primary note is Article II of the Agreement, where Millhollin “hereby grants to [TCC] the exclusive rights to make, use and sell the [Belt Trapper] in the United States and throughout the world.” The Agreement also provides, in Article VII, that the Agreement will “continue in effect until the last patent... obtained anywhere in the world and covering the [Belt Trapper] expires.” Along the same lines, Article XI grants TCC the rights to bring patent infringement lawsuits, to have exclusive control over prosecuting infringement suits and to retain all proceeds resulting from any infringement suits. Finally, the Agreement provides that it may not be terminated by either Millhollin or TCC except upon a failure by the other party to fulfill obligations under the Agreement or upon the occurrence of either of two specified events which are not at issue in this case.

¶22 Millhollin’s grant to TCC of the exclusive right to make, use and sell the Belt Trapper for the entire term of any patents on the invention, combined with the grant of the right to bring patent infringement suits and Millhollin’s failure to retain a right to terminate the Agreement at his discretion, manifests an intent by Millhollin to “surrender all his substantial rights to the invention” and assign those rights to TCC. See Bell Intercontinental, 381 F.2d at 1011. Indeed, in Bell Intercontinental, one of the agreements at issue contained provisions nearly identical to the Agreement here in that it granted the exclusive right to manufacture, use and sell the invention, the agreement was to continue until the expiration of the last patent that might issue on the invention, the grantee had the right to bring patent infringement suits and retain any recovery from such suits, and the grantor had no unilateral right to terminate the agreement. Bell Intercontinental, 381 F.2d at 1011-13. There, the United States Court of Claims determined that the grantor had divested itself of all control and ownership in the invention and assigned ownership of the invention to the grantee for the life of all patents issued thereon. Bell Intercontinental, 381 F.2d at 1013. Here, based on the terms of the Agreement before us, we conclude that Millhollin similarly assigned his ownership of the Belt Trapper to TCC.

¶23 Millhollin’s assignment to TCC of the ownership of the Belt Trapper has two significant results. First, when ownership rights to an invention are assigned prior to obtaining a patent thereon, the assignee will receive the legal title to the patent when it is subsequently issued. Filmtec Corp. v. Allied-Signal, Inc. (Fed. Cir. 1991), 939 F.2d 1568, 1572 (citing Gayler, 51 U.S. at 467). Thus, when the United States patent on the Belt Trapper was granted in April of 1993, legal title to that patent vested in TCC. Additionally, Millhollin’s assignment to TCC of his entire interest in the Belt Trapper carried with it the inchoate right to file patent applications on the invention, even absent any corresponding provision in the Agreement. See Toner v. Sobelman (E.D. Pa. 1949), 86 F.Supp. 369, 380 (citations omitted). Consequently, Millhollin has not only assigned ownership of the Belt Trapper to TCC, he has also divested himself of control and ownership of the patents and patent applications related to the Belt Trapper.

¶24 As additional support for his argument that he retained complete ownership of the Belt Trapper, the patents and the patent applications, Millhollin points out that Article VI, Paragraph B of the Agreement provides that all patent applications filed by TCC shall be assigned to Millhollin. However, the fact that the patent applications “shall be assigned” to him does not support his assertion that he “retained” ownership of the patent applications. Rather, the term “shall be assigned” connotes a present ownership of the applications in TCC and only a future ownership in Millhollin. Indeed, the patent applications had not been assigned to Millhollin at the time the dispute at issue here arose.

¶25 Millhollin’s argument in this regard is also unpersuasive in light of Article XII, Paragraph D of the Agreement, which provides that, in the event the Agreement is terminated as a result of a default by TCC, TCC shall assign to Millhollin, among other things, all patents and patent applications pertaining to the Belt Trapper. Again, the provision that TCC “shall assign” the patent applications to Millhollin implies that TCC is the present owner of the applications. Absent an assignment to Millhollin, TCC retains its ownership interest in, and control over the prosecution of, the patent applications.

¶26 We conclude that the terms of the Agreement between TCC and Millhollin constituted an assignment to TCC of the ownership rights in the patent applications at issue here and that TCC accordingly maintained full control over the manner in which the applications were pursued. As a result, Millhollin’s argument that TCC had no right to insist on possession of the application files, based on his erroneous assertion that he owned the patent applications and related files, fails. On this basis, we further conclude that the District Court did not err in determining that TCC had the right to tender payment to Conover conditioned on Conover delivering possession of the application files to which it was entitled to TCC.

¶27 Most of Millhollin’s remaining arguments in support of his assertions of error by the District Court are premised on his flawed contention that he maintained ownership of the patent applications and related files. As a result of our conclusion that Millhollin has assigned ownership of the Belt Trapper, the existing United States patent and all patent applications to TCC, we need not address those arguments.

¶28 Millhollin’s final argument is that the application files could not be turned over to Dwyer, TCC’s corporate attorney, without Millhollin’s permission because transferring the files would have created a serious conflict of interest for Dwyer. Millhollin contends that, if the files were given to Dwyer to complete the patent application process, Dwyer would be required to act in a dual representative capacity as an attorney for both TCC and Millhollin, which could not be allowed without Millhollin’s consent. Millhollin did not raise this argument in the District Court and, as a result, we decline to address it on appeal. See Matter of R.B.O. (1996), 277 Mont. 272, 283, 921 P.2d 268, 274.

¶29 We conclude that Millhollin has failed to establish any error in the District Court’s determination that TCC had the right to tender payment of the amount due to Conover conditioned on Conover delivering possession of the patent application files to TCC. We hold, therefore, that the District Court did not err in concluding that TCC did not breach the Agreement with Millhollin and in granting TCC’s motion for summary judgment on that basis.

¶30 Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES NELSON, TRIEWEILER and LEAPHART concur.


author: JUSTICE REGNIER

text:
    SUNSET POINT PARTNERSHIP, Plaintiff and Appellant, v. STUC-O-FLEX INTERNATIONAL, INC., GREG WOLSTEIN, d/b/a STUC-O-FLEX SYSTEMS; and MIKE MELTON AND DAN FISCHER, d/b/a MELTON FISCHER CONSTRUCTION, Defendants and Respondents.
    No. 97-364.
    Submitted on Briefs December 23, 1997.
    Decided February 24, 1998.
    1998 MT 42.
    55 St.Rep. 141.
    287 Mont. 388.
    954 P.2d 1156.

      For Appellant: Shelly F. Brander; Kaufman, Vidal & Hileman, P.C.; Kalispell.
    For Respondents: Kenneth E. O’Brien; Hash & O’Brien, P.L.L.R; Kalispell (for Stuc-O-Flex International, Inc.).
   JUSTICE REGNIER

delivered the opinion of the Court.

¶1 In August 1994, plaintiff and appellant Sunset Point Partnership filed an action in the District Court for the Eleventh Judicial District in Flathead County against Stuc-O-Flex International, Inc., and Greg Wolstein, d/b/a Stuc-O-Flex Systems, as well as against Mike Melton and Dan Fischer, d/b/a Melton Fischer Construction. Sunset Point, a condominium developer, brought suit against the named defendants seeking to recover damages incurred when problems with the exterior surface of certain condominium units developed. In its complaint, Sunset Point alleged counts for breach of contract, breach of warranty, indemnity, negligence, and strict liability in tort against the defendants.

¶2 Defendants Melton and Fischer filed a motion for summary judgment on July 17,1996, as did Stuc-O-Flex International, Inc. On September 5,1996, Sunset Point filed a motion for leave to amend its complaint to add Perma-Chink Systems, Inc., as an additional defendant. In an October 15,1996, order, the District Court denied Sunset Point’s motion to amend the complaint and granted Stuc-O-Flex, Inc.’s, motion for summary judgment. The District Court additionally granted partial summary judgment in favor of Melton and Fischer. It is from that portion of the District Court’s order denying its motion to amend the complaint to add an additional defendant, and granting Stuc-O-Flex, Inc.’s, motion for summary judgment, that Sunset Point presently appeals. For the reasons stated below, we affirm.

¶3 The sole dispositive issue on appeal is whether the District Court erred in granting Stuc-O-Flex, Inc.’s, motion for summary judgment.

FACTUAL AND PROCEDURAL BACKGROUND

¶4 On November 7, 1989, Sunset Point entered a contract with Melton and Fischer, hiring them to act as general contractors for a condominium project located on Flathead Lake, south of Bigfork, Montana. On April 3,1990, Melton and Fischer executed a construction subcontract with Wolstein, d/b/a Stuc-O-Flex Systems, pursuant to which Wolstein was to apply Stuc-O-Flex, a synthetic stucco product, to the exterior surface of the condominiums.

¶5 In 1990, Wolstein purchased the Stuc-O-Flex product he subsequently applied to Sunset Point’s condominiums from manufacturer and seller, Perma-Chink Systems, Inc. In October 1991, StucO-Flex International, Inc., incorporated and agreed to assume Perma-Chink’s assets and liabilities.

¶6 When construction was completed, Sunset Point sold the condominium units to various homeowners. Sometime prior to July 1991, the exterior surface of the condominiums developed problems, and the Sunset Point Homeowners contacted Sunset Point and demanded repairs. Sunset Point tendered the homeowners’ demands to the defendants. Defendants rejected Sunset Point’s tender. Sunset Point then hired architect Raymond Cortner to inspect the condominiums. In June 1994, Sunset Point spent $79,365.50 on necessary repairs.

¶7 On August 23,1994, Sunset Point filed suit against Stuc-O-Flex, Inc., and Wolstein, d/b/a Stuc-O-Flex Systems, as well as against Melton and Fischer, d/b/a Melton Fischer Construction, seeking to recover the $79,365.50 in costs incurred repairing the condominiums. Wolstein defaulted on January 19, 1995, and Stuc-O-Flex, Inc., filed a motion for summary judgment on May 23,1995. In a December 11, 1995, order, the District Court denied Stuc-O-Flex, Inc.’s, motion on the basis that the record contained insufficient facts upon which it could premise a grant of summary judgment.

¶8 Following completion of additional discovery and supplementation of the record, Stuc-O-Flex, Inc., filed a second motion for summary judgment on July 17, 1996. Melton and Fischer similarly filed a motion for summary judgment on July 17, 1996. On September 5, 1996, Sunset Point filed a motion for leave to file an amended complaint adding Perma-Chink as an additional defendant.

¶9 On October 15,1996, the District Court issued an order granting Stuc-O-Flex, Inc.’s, motion for summary judgment, and denying Sunset Point’s motion for leave to file an amended complaint. The court additionally granted Melton and Fischer’s motion for summary judgment in part, and denied it in part. Sunset Point subsequently reached a settlement with Melton and Fischer with respect to all claims, and on January 7, 1997, stipulated to Melton and Fischer’s dismissal from the case. On April 29, 1997, Sunset Point obtained a default judgment against Greg Wolstein.

¶10 On May 19, 1997, Sunset Point filed its notice of appeal from the District Court’s October 15, 1996, order granting Stuc-O-Flex, Inc.’s, motion for summary judgment and denying Sunset Point’s motion to amend the complaint.

STANDARD OF REVIEW

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

¶12 In proving that summary judgment is appropriate:

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

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

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

DISCUSSION

¶14 Did the District Court err in granting Stuc-O-Flex Inc.’s, motion for summary judgment?

¶15 In its October 15, 1996, order, the District Court granted summary judgment in Stuc-O-Flex, Inc.’s, favor with respect to each of the five counts asserted against it in Sunset Point’s complaint. In so doing, the court concluded the evidence of record did not support Sunset Point’s assertion that Stuc-O-Flex, Inc., could be held vicariously liable for Wolstein’s actions pursuant to a theory of either actual or ostensible agency and, therefore, held Stuc-O-Flex, Inc., was entitled to summary judgment on the claims leveled against it for breach of contract, breach of warranty, and negligence. The District Court additionally granted Stuc-O-Flex, Inc.’s, motion for summary judgment with respect to Sunset Point’s claim for indemnity, concluding that Sunset Point could in no event establish a claim for liability against Stuc-O-Flex, Inc. Finally, the District Court ordered summary judgment in Stuc-O-Flex, Inc.’s, favor with respect to Sunset Point’s claim for strict liability in tort, concluding there existed no evidence of record supporting Sunset Point’s assertion that the StucO-Flex product was in any way defective.

¶16 As it is potentially dispositive of Sunset Point’s claims for breach of contract, breach of warranty, and partially dispositive of its claim for negligence, we turn first to the question of whether the District Court erred in concluding the evidence of record did not support Sunset Point’s assertion that Stuc-O-Flex, Inc., could be held vicariously liable for Wolstein’s actions pursuant to a theory of either actual or ostensible agency, and that there existed no genuine issues of material fact precluding summary judgment.

A. Agency

¶17 In Count I of its complaint, Sunset Point asserts that it contracted with Wolstein and Melton Fischer for the application of Stuc-O-Flex to the exterior walls of its condominiums, and alleges “[d]efendants Wolstein and Melton Fischer” breached that contract by failing to “do all work in a first-class and workmanlike manner and to the entire satisfaction of the Owner, Contractor and Architect.” In Count II of its complaint, Sunset Point alleges breach of warranty, asserting that “defendants Wolstein and Melton Fischer” breached the fifteen-year warranty included in the construction subcontract. Finally, in Count IV of its complaint, Sunset Point asserts the “ [defendants were negligent in the manner in which they applied stuc-o-flex to the exterior walls.”

¶18 In its motion for summary judgment, Stuc-O-Flex, Inc., argued that Sunset Point’s claims for breach of contract, breach of warranty, and negligence contained no allegations of wrongdoing on the part of, or representations by, Stuc-O-Flex, Inc., and accordingly asserted it was entitled to summary judgment on each of those three counts. In response, Sunset Point maintained that Wolstein was Stuc-O-Flex, Inc.’s, agent, and asserted the corporation could therefore be held vicariously liable for Wolstein’s actions.

¶19 In addressing Sunset Point’s claim for breach of contract, the District Court first noted that “[t]he complaint fails to contain any allegations of agency and this issue was raised by [Sunset Point] for the first time more than two years after the institution of suit” and, therefore, concluded the question of agency was not properly before that court. The court continued with its analysis, however, and concluded that the evidence did not, in any event, “support a claim of either actual or ostensible agency” between Wolstein and Stuc-OFlex, Inc., and on that basis granted Stuc-O-Flex, Inc.’s, motion for summary judgment as to Sunset Point’s claims for breach of contract and breach of warranty. The District Court similarly ordered summary judgment in Stuc-O-Flex, Inc.’s, favor with respect to Sunset Point’s allegations of negligence, specifically concluding that “there is no evidence establishing or even raising a question of fact whether Wolstein was an agent for Stuc-O-Flex International, Inc.” and that the corporation thus “had no responsibility for the manner in which Wolstein applied the product.”

¶20 On appeal, Sunset Point argues the District Court erred in determining that no genuine issue of material fact existed regarding the presence of an ostensible agency between Wolstein and Stuc-OFlex, Inc. Sunset Point urges there exists at least enough evidence of record to create a question of fact regarding the presence of such an agency relationship. For example, Sunset Point points to those portions of Sunset Point partner Dan Averill’s deposition testimony in which he explains that he thought applicators were certified by the manufacturer and that he believed Wolstein was an agent of Stuc-OFlex, Inc. Sunset Point also relies on Averill’s testimony regarding a sales pitch he received from a Stuc-O-Flex, Inc., representative as evidence of ostensible agency. Sunset Point next points to the fact that Wolstein signed the construction subcontract as “Stuc-O-Flex Systems by Greg Wolstein” and testified that he notified Perma-Chink of his intent to use the name “Stuc-O-Flex Systems” and PermaChink did not object. Finally, Sunset Point notes that Stuc-O-Flex, Inc.’s, president, Rich Dunstan, testified that Stuc-O-Flex must be purchased through the company which has a training program for applicators. In light of the foregoing evidence of record, Sunset Point argues, there exists a genuine issue of material fact as to whether Stuc-O-Flex, Inc., by want of ordinary care, allowed third parties to believe that an applicator like Wolstein was acting as an agent for the company.

¶21 With respect to agency, § 28-10-103, MCA, explains that:

An agency is either actual or ostensible. An agency is actual when the agent is really employed by the principal. An agency is ostensible when the principal intentionally or by want of ordinary care causes a third person to believe another to be his agent who is not really employed by him.

¶22 Pursuant to this statutory definition of ostensible agency, it must be the principal, not the agent, who “intentionally or by want of ordinary care causes a third person to believe another to be his agent.” See also Miller v. Cascade Northern Co. (1979), 181 Mont. 66, 69, 592 P.2d 156, 158 (recognizing liability under theory of ostensible agency may exist only where the alleged principal, “by reason of some act on his part,” leads another to believe that an agency relationship existed.) (Quoting Elkins v. Husky Oil (1969), 153 Mont. 159, 168, 455 P.2d 329, 333). Furthermore, we have recognized that “[t]he belief that another is an agent must be reasonable.” Larson v. Barry Smith Logging, Inc. (1994), 267 Mont. 444, 447, 884 P.2d 786, 788.

¶23 In the present case, we must determine whether the District Court erred in concluding there existed no question of fact as to whether Stuc-O-Flex, Inc., led Sunset Point to believe that Wolstein was acting as its agent. In so doing, we turn first to Sunset Point’s assertion that because Averill believed Wolstein was Stuc-OFlex, Inc.’s, agent, and because he thought all applicators were certified by the manufacturer, Wolstein was Stuc-O-Flex, Inc.’s, ostensible agent. Averill’s deposition testimony reveals that he never met, nor dealt directly, with Wolstein, and suggests no act on the part of Stuc-O-Flex, Inc., which could have led him to reasonably believe that Wolstein was acting as Stuc-O-Flex, Inc.’s, agent. That Averill received a sales pitch from a Stuc-O-Flex, Inc., representative does not suggest the corporation was attempting to hold Wolstein out as its agent. Moreover, we conclude testimony by Stuc-O-Flex, Inc.’s, president, Rich Dunstan, explaining that the Stuc-O-Flex product is purchased through the company which has a training program for applicators, fails to create a factual issue on the question of ostensible agency. The record clearly indicates that Wolstein never requested or received any such training, and additionally indicates that the StucO-Flex product is available to consumers, not only through the company, but also through sales representatives and dealers.

¶24 Sunset Point also argues there exists a genuine issue of material fact with respect to the presence of an ostensible agency between Wolstein and Stuc-O-Flex, Inc., because Wolstein signed the construction subcontract as “Stuc-O-flex Systems by Greg Wolstein” and testified that Perma-Chink did not object to his use of the name “Stuc-O-Flex Systems.” We have previously held, however, that mere use of an alleged principal’s name, without some other “holding out,” does not, by itself, create an ostensible agency. Elkins v. Husky Oil Co. (1969), 153 Mont. 159, 168, 455 P.2d 329, 333.

¶25 Based on the foregoing, we conclude, as did the District Court, that the evidence of record fails to raise a question of fact regarding the presence of an ostensible agency relationship between Wolstein and Stuc-O-Flex, Inc. Accordingly, we affirm the District Court’s decision granting summary judgment in Stuc-O-Flex, Inc.’s, favor with respect to Sunset Point’s claims for breach of contract and breach of warranty.

B. Negligence

¶26 We note that the District Court granted Stuc-O-Flex, Inc.’s, motion for summary judgment with respect to Sunset Point’s claim for negligence on the additional basis that Stuc-O-Flex, Inc., “did not exist as a corporation when the contract was entered” and that Wolstein purchased the Stuc-O-Flex product he used on the Sunset Point condominiums from Perma-Chink, which was not named as a defendant to this action. The court additionally noted that Stuc-OFlex, Inc., did not sell or endorse the “ ‘sandwich’ of mesh, protective sealant and stuc-o-flex” used in application and that Wolstein neither requested nor received instructional material regarding application of the product in relation to this project.

¶27 On appeal, Sunset Point argues the District Court ignored its allegations of direct negligence on the part of Stuc-O-Flex, Inc., in selecting Wolstein as an applicator, failing to provide adequate training, supervision, and instruction. We note that Count IV of Sunset Point’s complaint alleges negligence only on the part of the defendants “in the manner in which they applied stuc-o-flex,” and contains no allegations of direct negligence on the part of Stuc-O-Flex, Inc. Moreover, Sunset Point has failed to point to any evidence of record which would suggest the presence of a duty on the part of Stuc-O-Flex, Inc., to train or supervise Wolstein. Accordingly, we affirm the District Court’s decision granting summary judgment in Stuc-O-Flex, Inc.’s, favor with respect to Sunset Point’s claim for negligence.

¶28 In light of our conclusion that Stuc-O-Flex, Inc., would, in any event, be entitled to summary judgment on the merits with respect to Sunset Point’s claim for negligence, we need not address whether the District Court erred in granting Stuc-O-Flex, Inc.’s, motion for summary judgment on the partial basis that it did not exist as a corporation at the time the contract at issue was entered.

C. Strict Liability in Tort

¶29 In the fifth and final count of its complaint, Sunset Point alleges that “[t]he Stuc-o-flex application at Sunset Point Phase IV was unreasonably unsuitable for its intended purpose and thus, defective.” Sunset Point additionally asserts that its “use of the Stuc-o-flex product was in a manner reasonably foreseeable by the Defendants” and that it incurred damages “[a]s a proximate result of the defective application.”

¶30 The District Court ordered summary judgment in Stuc-O-Flex, Inc.’s, favor on Sunset Point’s claim for strict liability on two grounds. First, the court noted that Sunset Point asserts only that the application of Stuc-O-Flex was defective, not that the product itself was defective. In any event, the court next concluded, Sunset Point’s “own expert, Raymond Cortner, testified that he found no defect in the Stuc-o-flex product and there is no testimony in the record to indicate that the product was defective in any manner.”

¶31 On appeal, Sunset Point argues there in fact exists sufficient evidence of record to create a question of fact as to whether the Stuc-O-Flex product was defective. For example, Sunset Point argues that deposition testimony by Raymond Cortner, an expert hired by Sunset Point to investigate the problem at the condominiums, establishes “that the Stuc-O-Flex system has a very poor track record in this geographic area, as the product may fail in as little as a week or last only a year or two.” Review of those portions of Cortner’s deposition submitted on appeal, however, reveals that Cortner in fact opined there existed no defect in the Stuc-O-Flex product itself. Instead, Cortner explained, “[t]he Stuc-O-Flex adhered to the paper and the paper let go from the core of the gypsum and the gypsum core remained there and the paper fell off as it would when it got wet.” When asked whether he had found “any problem or difficulty with the Stuc-o-flex product itself,” Cortner stated that “no, [he] couldn’t find anything specific.”

¶32 Sunset Point additionally argues that, “[although the product may not be defective while sitting in its container, when applied to a building in its intended manner, it fails.” More specifically, Sunset Point asserts that the Stuc-O-Flex product is sold as a complete “system” which includes application of the material. As the District Court noted, however, Stuc-O-Flex, Inc., did “not sell all of the component parts of the alleged ‘system.’ ” Moreover, Cortner testified at his deposition that “stuc-o-flex is a material that is applied to another substraight, but they do not have a system, they have a material stuc-o-flex, and it is applied to anything. They don’t guarantee a system.” As the District Court noted, the record indicates that Wolstein did not purchase the underlying mesh and protective coating over which he applied the Stuc-O-Flex product from Stuc-O-Flex, Inc.

¶33 Thus, assuming, as did the District Court, that Sunset Point has properly alleged a claim for strict liability in tort, we hold the District Court correctly concluded the evidence of record simply does not support Sunset Point’s assertion that the Stuc-O-Flex product is itself defective and that there exists no question of fact precluding summary judgment on this issue. We accordingly hold the District Court did not err in ordering summary judgment in Stuc-O-Flex, Inc.’s, favor with respect to Sunset Point’s claim for strict liability in tort.

D. Motion to Amend the Complaint

¶34 . Sunset Point additionally appeals from that portion of the District Court’s order denying Sunset Point’s motion to amend the complaint to add Perma Chink Systems, Inc., as a defendant in this case. The court denied Sunset Point’s motion to amend the complaint, concluding that to allow the amendment at such a late date would be prejudicial to the defendant.

¶35 In light of our conclusion that Sunset Point has, in any event, failed to demonstrate the presence of a genuine issue of material fact in support of any of the claims contained in its complaint, whether Stuc-O-Flex, Inc., or Perma-Chink Systems, Inc., is the appropriate defendant in this case is immaterial. Accordingly, we need not address the propriety of the District Court’s decision denying Sunset Point’s motion to amend the complaint.

JUSTICES HUNT, GRAY, LEAPHART and TRIEWEILER concur.

      . We are, of course, aware that Stuc-O-Flex, Inc., did not incorporate until October 1991, and so refer to Stuc-O-Flex, Inc., rather than to Perma-Chink Systems, Inc., for purposes of simplicity only.