author: JUSTICE HARRISON

text:
    DORIS BARROWS, Plaintiff and Appellant, v. BRIAN BARROWS, Defendant and Respondent.
    No. 92-134.
    Submitted on Briefs November 12, 1992.
    Decided December 22, 1992.
    49 St.Rep. 1145.
    256 Mont. 78.
    844 P.2d 119.

      For Plaintiff and Appellant: Joseph C. Engel, III, Great Falls.
    For Defendant and Respondent: Jeffrey T. McAllister, Conklin, Nybo, LeVeque & Murphy, Great Falls.
   JUSTICE HARRISON

delivered the Opinion of the Court.

This is an appeal from an order in the Eighth Judicial District, Cascade County, granting a directed verdict in favor of respondent Brian Barrows (Brian). Appellant Doris Barrows (Doris) sued Brian, her son, for damages incurred when she slipped and fell on the floor of his home. At the close of Doris’ evidence, Brian requested a ruling on his pretrial motion for summary judgment and moved for a directed verdict. After oral argument on the summary judgment issue, the court dismissed the jury and directed entry of final judgment in favor of Brian. We affirm.

Doris, a 62 year-old widow, resides in Shelby, Montana. On December 21, 1989, she went to Texas to visit Brian, who was then an assistant elementary school principal in Clyde, Texas. She testified that the purpose of her visit was to spend the holidays with Brian and his family. She had visited them earlier that year, spending three weeks there in June shortly after her husband died. For her Christmas visit, she expected to stay until January 24, 1990.

On January 15, 1990, Doris was alone in the house. Brian and his wife, a school teacher, were at work. They were attempting to sell their house themselves, and they had asked Doris to show it that day to two sets of prospective buyers. Doris showed the house to the first set of buyers in the morning. Then, having several hours to wait for the other buyers, she decided to scrub and wax the linoleum floor in the kitchen. Brian and his wife had not asked her to do this, but she felt it would improve the appearance of the house for prospective buyers.

After washing the floor with soap and water, using a string mop, Doris searched for and found a bottle of floor wax and a wax applicator. She dried the floor by going over it with the wrung-out mop and then applied the wax in the manner prescribed by the manufacturer’s instructions, squeezing a small puddle onto the floor and spreading it evenly with an applicator. She completed the task by waxing her way across the kitchen to an adjoining carpeted area where she waited half to three-quarters of an hour for the wax to dry. After touching the floor and finding that the wax seemed dry enough to walk on, she walked across the kitchen toward the area she had waxed first. Near the edge of the linoleum she slipped and fell, breaking her right hip.

Doris required extensive surgery, for which she was hospitalized two weeks. She spent the next several months recuperating at Brian’s house before returning to Montana in May 1990. Only then did she have an opportunity to examine the pants she was wearing at the time of her accident. She found a stain on the right leg, which she believed to be floor wax.

In her complaint, filed in November 1990, Doris alleged that she had fallen on Brian’s floor because it was “uneven” and wax had accumulated in low spots, and that Brian’s negligence, in failing either to correct the unevenness of the floor or to warn her about it, was the cause of her injury. Brian’s answer denied these allegations and stated that Doris’ contributory negligence either barred or diminished any recovery she might obtain. In an earlier deposition he acknowledged that the floor was uneven but stated that he had not believed it to be unsafe and that he had not foreseen any hazard due to wax puddling on the floor.

Brian moved for summary judgment four days before the scheduled trial date. In his brief supporting that motion he argued that because the injury and the alleged tortious conduct occurred in Texas, Texas law should apply. Accordingly, he relied on Texas case law for the proposition that because Doris was a licensee, not an invitee, in his home at the time of the accident, he owed her only a duty of reasonable care to correct or to warn her about a dangerous condition of which he had actual knowledge.

The District Court, applying Texas law, found that as a matter of law Brian did not have actual notice of a dangerous condition and therefore had neither an opportunity to warn Doris nor an opportunity to remedy the condition. Therefore, the court concluded, the evidence was insufficient to take the case to the jury.

A motion for a directed verdict is properly granted only in the absence of any evidence to warrant submission to the jury, and all inferences of fact must be considered in a light most favorable to the opposing party. Britton v. Farmers Insurance Group (1986), 221 Mont. 67, 88, 721 P.2d 303, 317. The issue on appeal is whether the court failed to consider, or failed to consider in a light most favorable to Doris, evidence that warranted submission of the case to the jury. Questions of fact that Doris contends should have been given to the jury include:

1. Whether Doris was a licensee or an invitee at the time she was injured.

2. Whether the condition of Brian’s floor was inherently dangerous or posed an unreasonable risk of harm to Doris.

I

Doris argues that she was an invitee, not a licensee, because her activity in showing the house conferred an economic benefit on Brian. Since she was an invitee, she argues, Brian’s duty under Texas law was to exercise reasonable care to eliminate a condition that posed an unreasonable risk of harm to her, of which he had either actual or constructive knowledge.

Brian argues that Doris was only a licensee, because the primary purpose of her visit was to spend time with him and his family during the Christmas holiday, and that incidental chores undertaken by a licensee do not convert her status to that of invitee. We agree.

Under Texas law, an invitee is “a person who is invited to enter or remain on land for a purpose directly or indirectly connected with business dealings with the possessor of the land.... Without this element of invitation,... the potentiality of benefit to the occupier is not enough to make the visitor an invitee.” Prestwood v. Taylor (Tex. Ct. App. 1987), 728 S.W.2d 455, 462. A social guest, “who comes on the premises for his own purposes with the occupier’s permission or consent, rather than as a business invitee whose presence serves the occupier’s economic interests,” is a licensee. Buchholz v. Steitz (Tex. Ct. App. 1971), 463 S.W.2d 451, 453.

Doris claims that her floor-waxing activity at the time she was injured was “exclusively related to her real estate agency of showing the house to prospective customers.” She testified, however, that during this visit and her earlier visit to the same house she took it upon herself to help with cooking and general housekeeping, though she had never washed or waxed the kitchen floor.

The District Court properly found that the primary purpose of Doris’ presence in Brian’s house was social. She was not invited to help sell the house. Her continuing presence was a result of a planned month-long visit and was not conditioned on her showing the house to prospective buyers. Further, her floor-waxing activity reflected her customary willingness to help out, not a new status as Brian’s agent or employee.

There is no evidence of business dealings between Doris and Brian, and no evidence that Doris’ activities provided the direct pecuniary benefit to Brian that is required, under Texas law, to convert a social guest to a business invitee. Prestwood, 728 S.W.2d at 464. The District Court properly held that as a matter of law, Doris was a licensee.

Doris’ status is important under Texas law because it determines the duty Brian owed her as landowner or possessor. Texas has adopted Restatement (Second) of Torts, Section 342, which makes a possessor hable for physical harm to a licensee caused by a condition on the possessor’s property only if the possessor has actual knowledge that the condition exists and that it is dangerous. State v. Tennison (Tex. 1974), 509 S.W.2d 560 (a duty to warn a licensee of a dangerous condition arises only when the licensor knows of the condition likely to cause harm; actual knowledge rather than constructive knowledge is required).

If Brian knew that the floor presented an unreasonable risk of harm to Doris, he had a duty either to remedy the defect in the floor or to warn Doris that it was dangerous. Brian testified, however, that he was not aware that wax would pool on the floor, and that he did not know Doris was going to wax the floor. The District Court properly ruled that as a matter of law Brian did not have actual knowledge of a dangerous condition.

II

Doris argues that it was error for the District Court to concentrate on the waxing of the floor when expert testimony showed that the floor was “inherently dangerous.” She relies on McKethan v. McKethan (Tex. Ct. App. 1972), 477 S.W.2d 357, 361, in which the court held that a licensee who slips and falls on a freshly washed floor cannot recover unless there is proof that the washing of the floor created a dangerous condition or that the floor was inherently dangerous and this fact was unknown to the licensee. The court in McKethan implied that the plaintiff would have recovered if the floor had been shown to be inherently dangerous.

Doris contends that the unevenness of the floor created an inherently dangerous condition that was known to Brian but not to Doris, and that Brian had a duty to warn Doris or remedy the defect. She cites a letter from Brian to Doris’ lawyer, admitted in evidence and dated July 31, 1990, in which Brian acknowledged that the kitchen floor is “defective in places, as a result of the unevenness of the underlying concrete slab,” and stated that he should have corrected the defect.

Brian did not write this letter, however, and he testified that he had signed it without consulting an attorney and without knowing that it might make him legally responsible for Doris’ injuries. He also testified that the sentence in the letter stating that Doris had slipped on wet wax in an uneven part of the floor represented assumptions he had made after the accident, not knowledge that he had had before the accident.

The expert testimony to which Doris referred was given by Dennis Parr, a civil and structural engineer. Dr. Parr testified that based on an investigator’s measurements and photographs, the floor in Brian’s kitchen sloped one-quarter inch in three feet and that “generally accepted standards” require no more than one-eighth inch deviation in ten feet. He also testified that a homeowner who knew that the floor was “out of level this much” should re-level it because it was not safe. Doris contends that this testimony created a genuine issue of material fact regarding the inherent dangerousness of the floor, making summary judgment improper.

While we agree that Dr. Parr’s testimony does raise factual issues — e.g., whether the floor sloped in such a way as to create a pool of wet wax on the spot where Doris fell — it does not address the critical issue of Brian’s knowledge. It was not the slope alone that caused the accident, but the combination of the slope and the wax. Brian had no knowledge of either the slope or the wax.

If Brian did not have actual knowledge that the floor sloped and that the slope created an unreasonable risk for a guest in his home, he owed no duty to Doris to warn her or repair the defect. Thus, a factual issue concerning the condition of the floor is immaterial, and the District Court did not err in concluding that Brian owed no duty to warn or repair.

It is an elementary principle of law that before a claim for relief can be made against a defendant for negligence, the existence of a duty by the defendant to the plaintiff must be shown, along with the breach of the duty and a resulting injury.

Rollins v. Blair (1989), 235 Mont. 343, 346, 767 P.2d 328, 330.

A motion for a directed verdict or for a judgment notwithstanding the verdict “rests on a finding that the case of the party against whom it is directed is unsupported in some necessary particular.” Nicholson v. United Pacific Ins. Co. (1985), 219 Mont. 32, 37, 710 P.2d 1342, 1345. Here, a directed verdict was proper because Doris failed to make a prima facie case of negligence. The judgment of the District Court is affirmed.

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


source: Caselaw Access Project

license: Public Domain

text:
    STATE OF MONTANA, Plaintiff, vs. FRANK BELMAREZ, Defendant.
    NO. Dc-89-488
    DECISION
    DATED this 22nd day of October, 1992.
   On October 25,1991, the Defendant was sentenced to Count I, Mitigated Deliberate Homicide, 35 years plus an additional 10 years for the use of a dangerous weapon; Count II, Aggravated Assault, 15 years plus 10 years for the use of a dangerous weapon; Count III, Escape, 10 years. All sentences are to run concurrently with each other. The

Defendant is designated a dangerous offender.

On October 22, 1992, the Defendant’s application for review of that sentence was heard by the Sentence Review Division of the Montana Supreme Court.

The Defendant was present and proceeded pro se. The state was not represented.

Before hearing the application, the Defendant was advised that the Sentence Review Division has the authority not only to reduce the sentence or affirm it, but also to increase it if such is possible. The defendant was further advised that there is no appeal from a decision of the Sentence Review Division. The defendant acknowledged that he understood this and stated that he wished to proceed.

After careful consideration, it is the unanimous decision of the Sentence Review Division that the sentence shall be affirmed.

The reason for the decision is the sentence imposed by the District Court is presumed correct pursuant to Section 46-18-904(3), MCA. The Division finds that the reasons advanced for modification are insufficient to deem inadequate or excessive as required to overcome the presumption per Rule 17 of the Rules of the Sentence Review Division of the Montana Supreme Court.

Hon. Ed McLean, Chairman, Hon. Thomas M. McKittrick and Hon. G. Todd Baugh, Judges.


text:
    STATE OF MONTANA, Plaintiff, vs. BRIAN WAYNE SPRAY, Defendant.
    NO. 9371
    DECISION
   On September 20, 1990, the Defendant was sentenced to ten (10) years for Theft; must pay $20 surcharge and as a condition of his parole, the defendant will be required to pay restitution of $1,712.40.

On October 22, 1992, the Defendant’s application for review of that sentence was heard by the Sentence Review Division of the Montana Supreme Court.

The Defendant was present and was represented by Dan O’Brien, Legal Intern from the Montana Defender Project. The state was not represented

Before hearing the application, the Defendant was advised that the Sentence Review Division has the authority not only to reduce the sentence or affirm it, but also to increase it if such is possible. The defendant was further advised that there is no appeal from a decision of the Sentence Review Divisions The defendant acknowledged that he understood this and stated that he wished to proceed.

DATED this 22nd day of October, 1992.

After careful consideration, it is the unanimous decision of the Sentence Review Division that the sentence shall be affirmed as originally imposed.

The reason for the decision is the sentence imposed by the District Court is presumed correct pursuant to Section 46-18-904(3), MCA. The Division finds that the reasons advanced for modification are insufficient to deem inadequate or excessive as required to overcome the presumption per Rule 17 of the Rules of the Sentence Review Division of the Montana Supreme Court.

Hon. Ed McLean, Chairman, Hon. Thomas M. McKittrick and Hon. G. Todd Baugh, Judges.

The Sentence Review Board wishes to thank Dan O’Brien, Legal Intern from the Montana Defender Project for his assistance to the defendant and to this Court.


text:
    STATE OF MONTANA, Plaintiff, vs. VINCENT STEPHON BENITO HALLAM, Defendant.
    NO. 6715C
    DECISION
    DATED this 22nd day of October, 1992.
   On February 19,1976, the Defendant was sentenced to Count I, Deliberate Homicide, 100 years; Count II, Deliberate Homicide, 100 years; Count III, Deliberate Homicide, 100 years; Count IV, Arson, 20 years; all sentences shall be served consecutively.

On October 22, 1992, the Defendant’s application for review of that sentence was heard by the Sentence Review Division of the Montana Supreme Court.

The Defendant was present and proceeded pro se. The state was not represented.

Before hearing the application, the Defendant was advised that the Sentence Review Division has the authority not only to reduce the sentence or affirm it, but also to increase it if such is possible. The defendant was further advised that there is no appeal from a decision of the Sentence Review Division. The defendant acknowledged that he understood this and stated that he wished to proceed.

After careful consideration, it is the unanimous decision of the Sentence Review Division that the sentence shall be affirmed.

The reason for the decision is the sentence imposed by the District Court is presumed correct pursuant to Section 46-18-904(3), MCA. The Division finds that the reasons advanced for modification are insufficient to deem inadequate or excessive as required to overcome the presumption per Rule 17 of the Rules of the Sentence Review Division of the Montana Supreme Court.

Hon. Ed McLean, Chairman, Hon. Thomas M. McKittrick and Hon. G. Todd Baugh, Judges.


author: JUSTICE HUNT JUSTICE WEBER

text:
    MARLAN ENTRIKEN, Plaintiff and Respondent, v. MOTOR COACH FEDERAL CREDIT UNION, Defendant and Appellant.
    No. 91-542.
    Submitted on briefs March 12, 1992.
    Decided December 23, 1992.
    49 St.Rep. 1148.
    256 Mont. 85.
    845 P.2d 93.

      For Appellant: James M. Ramlow, Murray & Kaufman, Kalispell.
    For Respondent: David J. Wing, Butte.
   JUSTICE HUNT

delivered the Opinion of the Court.

Plaintiff Marian Entriken brought suit against defendant Motor Coach Federal Credit Union in the District Court for the Second Judicial District Court, Silver Bow County, alleging defendant converted his truck. The District Court, sitting without a jury, found that defendant’s repossession of plaintiff’s truck constituted the tort of conversion. The District Court awarded actual damages of $18,711.20, treble damages under the Montana Unfair Trade Practices and Consumer Protection Act of 1973 [Montana Consumer Protection Act] in the amount of $56,133.60, and attorney fees of $9,540.00 for a total judgment of $84,384.80. From this judgment, defendant appeals. We affirm in part and reverse in part.

Appellant presented eight issues for review by this Court. We phrase the issues before this Court as follows:

1. Did appellant’s repossession of respondent’s vehicle constitute conversion?

2. Did the District Court err in determining respondent’s damages?

3. Did the District Court err in awarding respondent attorney fees in the action below?

Respondent purchased anew 1989 GMC pickup truck in November 1988. At the time of the purchase, respondent was employed by Greyhound Lines, Inc. (Greyhound) and lived in Oregon. Respondent was a member of appellant Motor Coach Federal Credit Union in Portland, Oregon, a credit union for Greyhound employees. Respondent financed the purchase of the vehicle through appellant, which paid to the automobile dealer the full purchase price of $11,589.15. Respondent entered into a financing agreement with appellant entitled a One-Way Loan Disclosure and Agreement which also incorporated a payoff of a prior loan in the amount of $2,038.35. Additionally, respondent purchased credit disability insurance with a premium of $1,057.80 from Life Assurance Company of Pennsylvania (LACOP). The cost of the credit disability insurance was added to the loan, making the total loan $14,685.30. Appellant received ten percent of the insurance premium as a commission, a fact not disclosed to respondent at the time of the transaction. Appellant also obtained a security interest in the vehicle. Respondent authorized his employer to deduct the sum of $182 from each paycheck and apply this amount directly to his loan with appellant.

Loan payments were deducted from respondent’s paychecks until February 13, 1989. On March 16, 1989, respondent suffered a work-related injury. At this time, he was approximately two weeks behind in his loan payments. The record does not indicate why the agreed upon payroll deductions did not occur from February 13, 1989, until the date of injury. Respondent notified appellant that he was no longer working and requested that the appropriate papers be sent to him so that the disability insurance company could begin making his required monthly payments during the period of his disability.

Respondent received the necessary forms from appellant on March 27, 1989, and promptly completed and returned them. Three weeks later, on April 17, 1989, respondent received a notice from appellant indicating that he was delinquent in payments and that the credit disability insurer had not yet made any payments. Respondent then contacted appellant and was told that the delinquency notice was just a standard letter and that he should not worry because the credit disability insurance payments would be arriving shortly.

Respondent and his family then moved from Oregon to Columbia Falls, Montana. Appellant was aware of this move. On May 24,1989, appellant caused respondent’s vehicle to be repossessed. Respondent obtained legal counsel who sent a letter to appellant demanding the return of the truck which was being held in Missoula and informing appellant that the credit disability payments would be arriving shortly and respondent was going to return to work in June or July. Appellant refused to return the truck, demanded payment in full on the loan, and had the truck transported to Portland, Oregon. The costs of the repossession, storage, and transportation of the truck were added to the outstanding balance on the loan, as were certain legal fees later incurred in this matter.

Shortly after repossession, LACOP, the credit disability insurer, straightened out the problems with the claim and made the first in a series of payments on respondent’s behalf. Appellant subsequently acknowledged receipt of $760.01 from LACOP, which was applied to the outstanding balance of the loan. The District Court found that the delay in the credit disability payments was attributable to persons outside the control of respondent. At about this same time, respondent returned to work, and despite the fact that he no longer possessed the truck, three more payroll deductions were applied to the loan, the last deduction occurring on August 21, 1989. Without giving proper notice to respondent, appellant sold respondent’s truck for $8000 on August 28, 1989. Appellant did not file an action for a deficiency judgment. Following the sale of the vehicle, appellant continued to receive loan payments which were being deducted from respondent’s pay. Appellant applied the last of these payments to the loan on October 30,1989. Respondent was again forced to leave work because of the previously sustained injury. Someone then informed LACOP that respondent was again not able to work and requested that LACOP start making payments on behalf of respondent. The record does not indicate that LACOP was advised that respondent no longer had the truck. Over the next year, LACOP made payments totaling $4,174.68 to appellant. In October 1990, LACOP was suspended from doing business. However, on April 19, 1991, the Pennsylvania Life and Health Guaranty Association sent appellant a payment on behalf of respondent in the amount of $863.39 which was applied to the loan.

Respondent brought suit alleging that appellant converted his truck and that he had suffered damages as a result of the conversion. The District Court awarded actual damages against appellant in the amount of $18,711.20 based upon its finding that the truck’s fair market value at the time of conversion was $11,000 and that the rental value of the truck from the date of conversion was $7,711.20. The District Court then added an additional award of treble damages under the Montana Consumer Protection Act amounting to $56,133.60 for a total damage award of $74,844.80. The court also awarded respondent attorney fees in the amount of $9,540. The final judgment entered against appellant was $84,384.80. This appeal followed in which appellant contests both the District Court’s determination regarding conversion and the appropriateness of the damage award.

I

Did appellant’s repossession of respondent’s vehicle constitute conversion?

On appeal, this Court will not set aside the findings of fact found by a district court sitting without a jury unless they are clearly erroneous. Rule 52(a), M.R.Civ.R Concerning our review of conclusions of law, this Court will simply determine whether the lower court’s interpretation of the law was correct. We are not bound by the trial court’s conclusions and remain free to reach our own. Schaub v. Vita Rich Dairy (1989), 236 Mont. 389, 770 P.2d 522.

The District Court applied Oregon law almost exclusively in reaching its decision in this case. The only exception was the application of the Montana Consumer Protection Act. The factual situation in this case could potentially have given rise to a conflict of laws question. However, since neither party has objected, either at trial or on appeal, to the District Court’s selection of the law to be applied in this case, this Court will not now address the issue sua sponte.

The District Court determined that appellant had no legal right under the security agreement to repossess the truck and that by repossessing the truck appellant committed the tort of conversion. Appellant argues that pursuant to the terms of the security agreement signed by both parties repossession was proper for any one of several reasons. Appellant relies on several arguments on appeal that were not properly placed before the District Court for consideration and they will not be considered for the first time on appeal. Weaver v. Law Firm of Graybill (1990), 246 Mont. 175, 803 P.2d 1089. Appellant argued before the District Court that repossession was proper because respondent failed to maintain proper insurance on the truck as provided in the agreement. Additionally, appellant argues that respondent’s delinquency in payments, both prior to and after respondent’s work related injury, justified the repossession.

INSURANCE: The security agreement provided that respondent was to maintain proper insurance on the truck. Respondent failed to do so. The Oregon Uniform Commercial Code at Section 79.5030, in a provision identical to Section 30-9-503, MCA, provides that “[ujnless otherwise agreed a secured party has on default the right to take possession of the collateral.” The District Court found that the security agreement provided that appellant’s remedy for failure to insure the collateral was to purchase insurance for the truck and add the cost of the insurance to the outstanding loan. While the agreement might be subject to different interpretations, the District Court’s interpretation was not clearly erroneous. The District Court also found that based on subsequent actions taken by appellant, the right to rely on the failure of respondent to obtain insurance as justification for repossession had been waived. In light of our holding on this issue, this Court need not consider these additional matters.

DELINQUENT PAYMENTS: The District Court determined that respondent’s delinquency in making payments on the loan did not justify appellant’s repossession of the truck. The court relied on two Oregon cases which discussed a secured creditor’s right to repossess an automobile in situations in which the debtor had purchased a credit life and disability policy as a part of the sales transaction, as respondent had in this case. In Owens v. Walt Johnson Lincoln Mercury, Inc. (Or. 1978), 574 P.2d 642, the Oregon Supreme Court held that the right of repossession is subordinated to collection of the payments due from the insurer if the debtor is disabled within the terms of the policy. Additionally, repossession may not occur prior to allowing the debtor a fair opportunity to establish eligibility under the coverage. Subsequently, in the case of Carter v. United States Nat’l Bank of Oregon (Or. App. 1989), 768 P.2d 930, the principle in Owens was extended to cover situations in which the applicable disability insurance would not fully cover the loan payments that the debtor would otherwise be required to make. The District Court properly concluded that pursuant to these two cases any post-injury delinquency in payments could not serve as the basis for repossession of the truck.

Appellant argues that Owens and Carter are not dispositive in that respondent was several weeks delinquent prior to sustaining the injury. However, the District Court specifically found that an agent of appellant had communicated to respondent that this short period of delinquency was not a concern and that the disability payments would be arriving soon. This act, combined with others as found by the District Court, is sufficient to waive any right appellant may have had to immediately repossess the truck, prior to respondent’s work-related injury.

The findings of fact of the District Court relative to the issue of conversion are not clearly erroneous and its conclusions of law were not incorrect. We affirm the District Court’s determination that appellant converted respondent’s truck.

II

Did the District Court err in determining respondent’s damages?

The District Court awarded actual damages in the amount of $18,711.20 based on its finding that the truck’s fair market value at the time of conversion was $11,000 and the rental value of the truck from the date of conversion was $7,711.20. The District Court then awarded an additional $56,133.60 as treble damages under the Montana Consumer Protection Act for a total damage award of $74,844.80. Appellant alleges the District Court erred in determining the value of the truck, in awarding damages for loss of use of the truck, and in awarding treble damages in this situation.

VALUE OF THE TRUCK: The District Court determined that the fair market value of the truck at the time of conversion was $11,000 and awarded that amount to respondent. Appellant agrees that the general rule is that the measure of damages for conversion is the market value of the personal property. However, appellant points out that in Hall v. Work (Or. 1960), 354 P.2d 837, 842-43, the Oregon Supreme Court stated that:

The general ride for the measure of damages in an action by a mortgagor against a mortgagee for a conversion of the mortgaged property is the difference between the market value of the property at the time of the conversion and the amount of the mortgage debt.

This rule governing damages for the conversion of mortgaged property provides that a mortgagor should only receive damages equal to their interest in the converted property. This is only equitable in that awarding a mortgagor damages in excess of their interest in the mortgaged property would result in a windfall for the mortgagor. However, this case differs from most conversion of mortgaged property cases in that respondent’s interest in the truck continued to grow even after the conversion. The District Court refused to reduce the $11,000 fair market value of the truck by the amount outstanding on the loan. The court found that because appellant had not sought a deficiency judgment and had continued to receive payments on the truck it was not necessary to reduce the value by the amount owed. We cannot say that this finding is clearly erroneous.

LOSS OF USE DAMAGES: The District Court awarded loss of use damages in the amount of $7,711.20. Appellant argues that absent rare and unusual circumstances, loss of use damages are not available in conversion actions under Oregon law. In Hall, the Oregon Supreme Court stated that generally the appropriate measure of damages to compensate for loss of use is the fair market value of the property with interest. Hall, 354 P.2d at 842-43. However, the Oregon Supreme Court has recognized that in some special circumstances loss of use damages might be appropriate. In Singer v. Pearson (Or. 1911), 115 P. 158, the Oregon Supreme Court stated:

“The measure of damages, therefore, in an action of trover, unless plaintiff, by reason of the unlawful act of the defendant, has suffered some special loss or injury, which must be alleged, is the value of the property at the time of the conversion, with interest thereon....”

Singer, 115 P. at 158 (quoting Eldridge v. Hoefer, 77 P. 874).

This is consistent with the general measure of damages for conversion, which is that:

In the ordinary case, the value of the use of property converted is not regarded as a recoverable item in an action for conversion. This rule generally applies where the property is not returned to the plaintiff, who instead recovers the value of the property .... Where interest on the value of the property is awarded, the value of the use of the property ... may not be recovered in addition thereto, since damages for the use of the property are generally regarded as in lieu of interest.

18 Am Jur 2d, Conversion § 118.

The Alaska Supreme Court, relying on the Oregon Supreme Court decision in Hall, has explained the rationale for this rule, stating that:

[Defendant] argues that [plaintiff], in electing to pursue conversion, effectively abandoned the property to the converter and proceeded to sue for its value. Therefore, he argues since the conversion judgment has been entered and satisfied ... the title is transferred to her as of the date of conversion, and [plaintiff] can obtain no damages for loss of use after that time. We find this argument to be an accurate representation of the law of conversion.

Rollins v. Leibold (Alaska 1973), 512 P.2d 937, 944-45 (citing Hall v. Work (Or. 1960), 354 P.2d 837).

The District Court did not explain the basis for its award of loss of use damages. On appeal respondent has not cited to any legal authority in support of his contention that he is entitled to loss of use damages in this situation. In this case, respondent will receive the value of the truck plus interest from the date of judgment. The circumstances of this case do not indicate respondent is entitled to damages for loss of use in addition to the value of the truck plus interest. The District Court’s award of damages for loss of use is reversed.

TREBLE DAMAGE AWARD: Appellant argues that the treble damage award under the Montana Consumer Protection Act was inappropriate. In the alternative, appellant argues that the District Court erred in its computation of the treble damages. The treble damages should have been three times the actual damages, not three times the actual damages plus the actual damages. Respondent concedes that appellant’s contention concerning the computation of the treble damages is correct, but argues that an award of treble damages was appropriate.

Section 30-14-133, MCA, provides that in actions brought under the Consumer Protection Act “[t]he court may, in its discretion, award up to three times the actual damages sustained ....” This Court has recently held that the Montana Consumer Protection Act applies to the lending and collecting of money in relation to consumer loans. Baird v. Norwest Bank (Mont. 1992), [255 Mont. 317,] 843 P.2d 327. The decision of the District Court in this case to award treble damages was not an abuse of discretion and is affirmed. Respondent’s actual damages were $11,000. Under the treble damage provision of Section 30-14-133, MCA, the total damage award is $33,000, plus interest from the date of judgment.

Ill

Did the District Court err in awarding respondent attorney fees in the action below?

The District Court awarded respondent attorney fees in the amount of $9540. Pursuant to the Montana Consumer Protection Act, Section 30-14-133, MCA, respondent, as the prevailing party, is entitled to attorney fees incurred at trial and in defending this appeal. Additionally, the issue of attorney fees was raised and fully discussed by the parties below. Appellant failed to object to the award of attorney fees at that time. In fact, when respondent called a witness to testify to the reasonableness of the attorney fees appellant made such testimony unnecessary by stipulating to the reasonableness of the fees. Appellant now argues for the first time on appeal that respondent was not entitled to attorney fees. Appellant’s failure to make a timely objection when given the opportunity waives the right to now object for the first time on appeal and present an entirely different theory on the issue of attorney fees. Clemans v. Martin (1986), 221 Mont. 483, 719 P.2d 787.

This matter is affirmed in part and reversed in part, and is remanded to the District Court for entry of an order consistent with this opinion.

JUSTICES HARRISON, GRAY, McDONOUGH and TRIEWEILER concur.

JUSTICE WEBER

specially concurring:

I concur in the majority opinion with the exception of the reasoning set forth in the following paragraphs:

Part II of the majority opinion determines that the decision of the District Court to award treble damages was not an abuse of discretion and is affirmed. In the course of that discussion, the majority makes the following statement:

This Court has recently held that the Montana Consumer Protection Act applies to the lending and collecting of money in relation to consumer loans. Baird v. Norwest Bank (Mont. 1992), [255 Mont. 317,] 843 P.2d 327.

Apparently the reference to Baird is the establishment of a rationale for the application of the Montana Consumer Protection Act to the present case. I do not agree that reference is appropriate as a basis for the opinion.

That was not the legal theory adopted by the District Court in this case. In substance the District Court held that the purchase of credit disability insurance by the plaintiff constituted a purchase of services under the Act, and that the breach was a violation of the Act. Following is a pertinent portion of the District Court opinion:

... The weight of authority when considered in light of the evidence presented supports the finding of fact and conclusion of law that Credit Union in fact committed an unfair and deceptive act in its sale of credit disability insurance to plaintiff and subsequent repossession of the security and continued acceptance of payments deducted from plaintiffs check and the disability carrier after repossession.

I would affirm the District Court’s conclusion that there was a breach of the Act in connection with the purchase of the credit disability insurance which constituted a purchase of services as defined under the Act.

I would limit my reference to the Montana Consumer Protection Act to the affirming of the action of the District Court. I do not believe Baird is authority pertinent to the conduct in this case.

CHIEF JUSTICE TURNAGE concurs in the foregoing special concurrence of JUSTICE WEBER.


author: CHIEF JUSTICE TURNAGE

text:
    IN RE THE MARRIAGE OF JIM J. OLTERSDORF, Petitioner and Appellant and JOAN ARLENE OLTERSDORF, Respondent and Respondent.
    No. 92-179.
    Submitted on briefs December 3, 1992.
    Decided December 24, 1992.
    49 St.Rep. 1153.
    256 Mont. 96.
    844 P.2d 778.

      For Petitioner and Appellant: Howard. C. Greenwood, Hamilton.
    For Respondent and Respondent: Lori Ballinger and Paulette C. Ferguson, Missoula.
   CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Jim Oltersdorf appeals an order of the Fourth Judicial District Court, Ravalli County, setting aside its previous order determining child custody and child support in this dissolution of the marriage of Jim and Joan Oltersdorf. We affirm.

The determinative issue is whether the District Court had jurisdiction over the question of child custody.

In May 1990, Jim Oltersdorf filed with the District Court for Ravalli County, Montana, a petition for dissolution of his marriage to Joan Oltersdorf. In the petition, he stated that he had been a Montana resident for more than ninety days and that Joan resided in San Bernardino, California. Jim stated that two children, Sasha and Joalena, had been born to the parties and that Sasha was in his care and custody and Joalena was in the care and custody of Joan. During the time at issue in this case, Sasha was an elementary school student and Joalena was a preschooler.

Joan acknowledged receipt of the summons and petition pursuant to Rule 4(D)(1)(b), M.R.Civ.P. The court ruled upon a motion concerning visitation before it entered the final decree of dissolution in October 1991. In the decree, the court noted that Joan had not appeared either personally or by counsel at trial. Although Jim had asked in his petition that he be awarded custody of Sasha and Joan be awarded custody of Joalena, the court awarded custody of both Sasha and Joalena to Jim.

In December 1991, Joan, through her counsel, moved under Rules 55(c) and 60(b), M.R.Civ.P., to set aside the October 1991 judgment. After a hearing, the court granted the motion to set aside its custody determination regarding Joalena, on the basis of lack of notice to Joan. The court also ruled that it lacked jurisdiction to determine custody of either of the children. In order to restore the parties to their positions before the October 1991 order was entered, the court ordered that custody of both girls be immediately returned to Joan.

Did the District Court have jurisdiction over the question of child custody?

Jim claims that the District Court had jurisdiction over child custody because a dissolution had been filed in the court, Joan had consented to jurisdiction by voluntarily appearing through counsel, and the court had already exercised child custody jurisdiction by ruling on a motion concerning visitation. But jurisdiction over a dissolution of marriage does not necessarily confer jurisdiction over child custody issues involved therein. E.g., In re Marriage of Brown (1985), 218 Mont. 14, 706 P.2d 116; compare Sections 40-4-104 and 40-4-211, MCA. Also, the court did not acquire jurisdiction by virtue of its previous rulings on motions concerning visitation, because a court does not acquire subject matter jurisdiction merely by ruling on a matter. The issue of subject matter jurisdiction may be invoked at any time in the course of a proceeding. In re Marriage of Lance (1984), 213 Mont. 182, 186, 690 P.2d 979, 981.

Section 40-4-211, MCA, provides:

(1) A court of this state competent to decide child custody matters has jurisdiction to make a child custody determination by initial or modification decree if:
(a) this state:
(i) is the home state of the child at the time of commencement of the proceedings; or
(ii) had been the child’s home state within 6 months before commencement of the proceedings and the child is absent from this state because of his removal or retention by a person claiming his custody or for other reason and a parent or person acting as parent continues to live in this state; or
(b) it is in the best interest of the child that a court of this state assume jurisdiction because:
(i) the child and his parents or the child and at least one contestant have a significant connection with this state; and
(ii) there is available in this state substantial evidence concerning the child’s present or future care, protection, training, and personal relationships; or
(c) the child is physically present in this state and:
(i) has been abandoned; or
(ii) it is necessary in an emergency to protect him because he has been subjected to or threatened with mistreatment or abuse or is neglected or dependent; or
(d) (i) no other state has jurisdiction under prerequisites substantially in accordance with subsections (l)(a), (l)(b), or (l)(c) of this section or another state has declined to exercise jurisdiction on the ground that this state is the more appropriate forum to determine custody of the child; and

(ii) it is in his best interest that the court assume jurisdiction. One of the four disjunctive requirements set forth above must be met before a court may make a custody determination.

The record indicates that until Jim and Joan separated, Sasha and Joalena lived with both parents in California. In February 1988, Joan, Sasha, and Joalena moved to Canada. In December 1989, Sasha traveled to visit Jim in Montana, where he had by then relocated. She stayed until June 1990, when she joined Joan and Joalena, who had moved back to California. When Jim filed his petition for dissolution in May 1990, Sasha had lived with him in Montana for a little over four months and Joalena had never lived in Montana.

Neither Sasha nor Joalena had lived in Montana for six months prior to Jim’s filing of the petition for dissolution. Therefore, Montana was not the “home state” under part (a) of Section 40-4-211(1), MCA. “Home state” is defined at Section 40-7-103(5), MCA, for purposes of both the Uniform Child Custody Jurisdiction Act, Title 40, Chapter 7, MCA, and the Uniform Marriage and Divorce Act, Title 40, Chapter 4, MCA, as the state in which the child lived for the preceding six months.

In the order setting aside its previous custody order, the District Court reasoned as follows concerning the requirements of parts (b), (c), and (d) of Section 40-4-211(1), MCA:

Subsection (b) of 40-4-211(1) confers jurisdiction if such jurisdiction is in the child’s best interest because:
(i) the child and his parents or the child and at least one contestant have a significant connection with this state; and ii) there is available in this state substantial evidence concerning the child’s present or future care, protection, training, and personal relationships This prerequisite is drafted in the present tense. Therefore, the Court shall determine if it was proper to assume jurisdiction on the date of October 3, 1991 based on the facts and circumstances as they existed on that date. According to Petitioner’s affidavit filed July 17, 1990, the Petitioner had resided in Montana since September of 1989. Petitioner testified that he travelled to California and remained there during part of February and March of 1991. While in California, Petitioner lived with Respondent for a portion of that time, and researched employment opportunities. As of October 3, 1991, Joalena had been living with Respondent in California since March, 1990, a period of roughly one and one-half years. In addition, Sasha had been living with Respondent and attending school in California since June 5, 1990, a period of roughly one year and four months. According to these facts, neither child had a significant connection in Montana at the time of the October 3, 1991 hearing so as to allow this Court to assume jurisdiction to make a child custody determination of either child. Likewise, Section 40-4-211(c) or (d) does not confer jurisdiction in Montana. Rather, the facts and circumstances establish a sufficient nexus between the minor children and the State of California so as to confer jurisdiction in that State. Therefore, aside from the fact that the Respondent lacked notice regarding the child custody determination of Joalena, jurisdiction did not lie in Montana for this Court to make the subject child custody determinations regarding either child.

We agree with the District Court’s analysis concerning jurisdiction. We hold that the court did not err in concluding it did not have jurisdiction to determine custody of Sasha or Joalena.

Jim also argues that a Rule 60(b), M.R.Civ.R, motion may not be used to set aside an order based on lack of jurisdiction. Rule 60(b)(6), M.R.Civ.P, allows a judgment to be set aside for “any other reason justifying relief from the operation of the judgment.” That language is clearly broad enough to include lack of jurisdiction.

Because we hold that the District Court did not have jurisdiction to determine child custody, we need not address the issue of whether Joan was given adequate notice of the custody proceeding concerning Joalena.

Affirmed.

JUSTICES GRAY, TRIEWEILER, HUNT and WEBER concur.


author: JUSTICE WEBER JUSTICE TRIEWEILER

text:
    ROBERT P. BARRETT, Plaintiff and Appellant, v. HOLLAND & HART, a partnership, Defendant and Respondent.
    No. 91-577.
    Submitted on briefs May 14, 1992.
    Decided December 29, 1992.
    49 St.Rep. 1156.
    256 Mont. 101.
    845 P.2d 714.

      For Appellant: P. Keith Keller, Keller, Reynolds, Drake, Sternhagen, & Johnson, and Gene A. Picotte, Helena.
    For Respondent: Stuart L. Kellner and Chris D. Tweeten, Hughes, Kellner, Sullivan & Alke, Helena.
   JUSTICE WEBER

delivered the Opinion of the Court.

Plaintiff, Robert P. Barrett, (Mr. Barrett) brought this action against the law firm of Holland & Hart alleging fraud, negligent misrepresentation and deceit by an attorney in violation of Section 37-61-406, MCA; violation of Rule 11, M.R.Civ.P.; and legal malpractice. The District Court for the First Judicial District, Lewis and Clark County, granted Holland & Hart’s motion to dismiss, or in the alternative, summary judgment. Mr. Barrett appeals. We affirm.

We restate the issues as follows:

1. Did the District Court properly grant Holland & Hart’s motion to dismiss, or in the alternative, summary judgment?

2. Were Mr. Barrett’s claims for fraud and deceit barred by the statute of limitations?

In May of 1985, Mr. Barrett filed a wrongful termination action against his former employer, ASARCO, Inc. Barrett v. ASARCO, Inc. (1988), 234 Mont. 229, 763 P.2d 27. (Barrett I). Mr. Barrett’s attorney was Gene Picotte. ASARCO retained the law firm of Holland & Hart. After the close of discovery, but over one month before the trial, ASARCO sought to amend its interrogatory answers based on “new” information it had obtained. The “new” information is the subject of this action now before us.

Holland & Hart represented to the District Court that it had found six witnesses that would testify about various incidents of dishonesty by Mr. Barrett during the last three years of his employment with ASARCO. These incidents included sleeping on the job, abuse of sick pay, stealing tools and equipment from ASARCO, and requesting one of his crew members to steal for him. Mr. Barrett filed a motion in limine to exclude the testimony of these witnesses. ASARCO then offered to allow Mr. Barrett to depose the witnesses at its expense. Mr. Barrett chose not to depose the witnesses but instead moved again to exclude their testimony.

The District Court granted Mr. Barrett’s motion in limine and the case went to trial on February 2, 1987. The jury returned a verdict for Mr. Barrett in the amount of $413,500. Barrett I.

ASARCO moved the District Court for a new trial contending that it was deprived of a fair trial by the court’s exclusion of the testimony of the new witnesses. The District Court denied the motion and ASARCO appealed to this Court. On appeal, ASARCO contended that the District Court erred in excluding the testimony of the new witnesses. This Court held that the lower court erred in excluding the testimony and reversed and remanded the case for a new trial.

Prior to the second trial, Mr. Barrett deposed five of the witnesses in question. Subsequently, a second trial was held and the jury again found for Mr. Barrett, this time however, awarding him $230,000. ASARCO appealed to this Court and this Court affirmed the jury’s verdict. Barrett v. ASARCO, Inc. (1990), 245 Mont. 196, 799 P.2d 1078. (Barrett II).

Mr. Barrett next filed this action alleging that Holland & Hart acted improperly while representing its client, ASARCO, before, during and after the first trial and during the appeal of the first jury verdict. He alleged claims of fraud; negligent misrepresentation; deceit by an attorney in violation of Section 37-61-406, MCA; conduct in violation of Rule 11, M.R.Civ.P.; and legal malpractice. He also asked for punitive damages.

Holland & Hart moved to dismiss the complaint, or in the alternative, for summary judgment. They maintained that on each count of the complaint, Mr. Barrett failed to state a claim on which relief could be granted, and secondly, even if there was an actionable claim, such claim was barred by the statute of limitations.

During the arguments on Holland & Hart’s motion, Mr. Barrett withdrew his claim of conduct in violation of Rule 11, M.R.Civ.P. The District Court found that Mr. Barrett failed to state a claim for which relief could be granted on his claims of fraud, negligent misrepresentation and legal malpractice. It further found that Mr. Barrett’s deceit claim was barred by the statute of limitations. The District Court granted Holland & Hart’s motion to dismiss. Mr. Barrett appeals.

I

Did the District Court properly grant Holland & Hart’s motion to dismiss, or in the alternative, summary judgment?

The District Court considered matters outside the pleadings in this case, thereby properly treating ASARCO’s motion to dismiss as one for summary judgment.

If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such motion by Rule 56.

Rule 12(b), M.R.Civ.P.; Boles v. Simonton (1990), 242 Mont. 394, 397, 791 P.2d 755, 757.

Summary judgment is only proper when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.R Any inferences to be drawn from the factual record must be resolved in favor of the party opposing summary judgment. Boylan v. Van Dyke (1991), 247 Mont. 259, 266, 806 P.2d 1024, 1028.

Mr. Barrett maintains that summary judgment was improper because the complaint states a claim for fraud and negligent misrepresentation, and because his deceit claim is not barred by the statute of limitations. Mr. Barrett does not raise any issue with regard to the dismissal of his legal malpractice claim and we will not discuss it here.

The Fraud Claim,

Mr. Barrett maintains that Holland & Hart defrauded the District Court as well as this Court by obtaining a reversal of the jury verdict in Barrett I by representing that the six named witnesses, whose testimony had been excluded by the District Court in Barrett I, would testify to specific acts of misconduct by Mr. Barrett. He maintains that in proving fraud on the court he need not prove all nine elements of fraud, particularly, that he had no duty to investigate the truth of Holland & Hart’s representations. He further maintains that in their respective depositions, each witness denied knowledge of the things Holland & Hart had represented they would say. Therefore, Mr. Barrett maintains that his jury verdict was reversed in Barrett I solely on the basis of false representations by Holland & Hart and he was damaged as a consequence.

Holland & Hart contend that Mr. Barrett failed to make a prima facie showing of fraud.

The nine elements of fraud which must all be proven are:

1. a representation;
2. its falsity;
3. its materiality;
4. speaker’s knowledge of the falsity or ignorance of its truth;
5. speaker’s intent that the representation be relied upon;
6. hearer’s ignorance of the falsity;
7. hearer’s reliance on the representation;
8. hearer’s right to rely on the representation; and
9. hearer’s consequent and proximate injury caused by the reliance.

Batten v. Watts Cycle & Marine (1989), 240 Mont. 113, 117, 783 P.2d 378, 380-381. Mere suspicion of fraud is not sufficient, but rather, fraud must be proved by a preponderance of the evidence. Batten, 783 P.2d at 381.

The District Court held that Mr. Barrett failed to demonstrate that he was “ignorant of the truth” because he had failed to investigate the truth prior to trial. As a result he failed to meet the requirements of the sixth element of fraud as above described. In fact, he did not depose the witnesses until shortly before the second trial.

We agree with the District Court that Mr. Barrett failed to set forth facts demonstrating that he had met this element which requires a showing of the hearer’s ignorance of the falsity. As noted in Barrett I, 763 P.2d at 30, ASARCO offered the witnesses for deposition by Mr. Barrett at ASARCO’s expense and Mr. Barrett refused. Mr. Barrett had the means and opportunity to discover the truth or lack of truth of Holland and Hart’s representations, but refused. When a party claims to have been deceived to his prejudice, and it appears that he had the means at hand to ascertain the truth of representations made to him, his reliance upon such representations, however false they may have been, affords no grounds for relief. Spence v. Yocum (1982), 201 Mont. 79, 84-85, 651 P.2d 1022, 1025.

We conclude that because Mr. Barrett chose not to use the means available to him to investigate the truth of the representations made to him, his claim for fraud must fail. We note that Mr. Barrett attempts to argue that because he is alleging “fraud on the court,” he is not required to set forth facts which are sufficient to prove the nine elements of tortious fraud. Mr. Barrett cites no authority for that proposition.

Furthermore, we agree with the District Court when it said:

It is not inconceivable that the witnesses might possibly have changed their testimony since the time of the first trial. This certainly does not prove that Defendant intentionally acted to deceive the Court. We have no idea, thanks in part to Plaintiff’s inaction, what these witnesses might or might not have testified to back in 1987.

We affirm the District Court’s grant of summary judgment to ASARCO on the fraud claim.

The Negligent Misrepresentation Claim

Negligent misrepresentation has a lesser standard of proof than fraud. Rather than requiring an intent to misrepresent, it requires a showing of a failure to use reasonable care or competence in obtaining or communicating the information. Batten, 783 P.2d at 381. A claim for negligent misrepresentation requires proof of the following elements:

1. the defendant made a representation as to a past or existing material fact;
2. the representation must have been untrue;
3. regardless of its actual belief, the defendant must have made the representation without any reasonable ground for believing it to be true;
4. the representation must have been made with the intent to induce the plaintiff to rely on it;
5. the plaintiff must have been unaware of the falsity of the representation and he must have been justified in relying upon the representation;

6. the plaintiff, as a result of his reliance, must sustain damage. Kitchen Krafters, Inc. v. Eastside Bank of Montana (1990), 242 Mont. 155, 165, 789 P.2d 567, 573 (emphasis in original).

The District Court held:

First, Plaintiff has not pled, and cannot possibly prove that the representations were made by Defendant without any reasonable ground for believing that they were true. This shortcoming can be laid entirely upon Plaintiff’s shoulders because he did not take advantage of ASARCO’s offer to allow him to depose the witnesses at ASARCO’s expense. As noted earlier, it is not inconceivable that dining the time since the first trial, the witnesses might have, for whatever reason, changed their testimony.
Second, Plaintiff has not pled, and cannot possibly prove, that the representation was made with the intent that he rely on it. As the Court understands Plaintiff’s case, he did not rely on the representations. Indeed, the record show that he proceeded in the face of them. It does appear that the supreme court relied on the Defendant’s representations. However, the supreme court is not the Plaintiff. The elements above do not make an exception for false representations that deceive parties other than the plaintiff.

We agree with the reasoning of the District Court. Under element two, Mr. Barrett was required to demonstrate that the representations by the defendant were untrue. As pointed out by the District Court, the witnesses may have changed their testimony. The responsibility to determine if the representations were untrue must be charged to Mr. Barrett because he did not take advantage of the opportunity to depose the witnesses and determining whether or not the representations were untrue.

Under element four Mr. Barrett was required to prove that the representations were made to him with the intent to induce him to rely on the representations. As the District Court pointed out, the representations were not made with that intent. He was given the opportunity to depose the witnesses at ASARCO’s expense but chose not to do so. That offer rebuts the contention that the representations were made with the intention to induce Mr. Barrett to rely upon the same. We conclude that the District Court correctly entered summary judgment for ASARCO on the negligent misrepresentation claim.

We hold that the District Court properly granted Holland and Hart’s summary judgment on the fraud and negligent misrepresentation claims.

II

Were Mr. Barrett’s claims for fraud and deceit barred by the statute of limitations?

Because the fraud claim was disposed of in the first issue, we need not address that claim here. The District Court held that Mr. Barrett’s deceit claim under Section 37-61-406, MCA, was barred by the statute of limitations provisions of Section 27-2~211(l)(a), MCA.

The “deceit” section with which we are concerned is Section 37-61-406, MCA, which provides:

Penalty for deceit. An attorney or counselor who is guilty of any deceit or collusion or consents to any deceit or collusion with intent to deceive the court or a party forfeits to the party injured by his deceit or collusion treble damages. He is guilty of a misdemeanor.

As pointed out by the District Court, the statute does not prescribe a statute of limitation time period.

With regard to statutes of limitation in general, Section 25-1-102(1), MCA, provides:

(1) Civil actions can only be commenced within the periods prescribed in Title 27, chapter 2, after the cause of action shall have accrued, except where, in special cases, a different limitation is prescribed by statute.

As referred to in the foregoing section, the general provision in Title 27, chapter 2 regarding this aspect is Section 27-2-102, MCA, which in pertinent part provides:

When action commenced. (1) For the purposes of statutes relating to the time within which an action must be commenced:
(a) a claim or cause of action accrues when all elements of the claim or cause exist or have occurred, the right to maintain an action on the claim or cause is complete, and a court or other agency is authorized to accept jurisdiction of the action;
(2) Unless otherwise provided by statute, the period of limitation begins when the claim or cause of action accrues ....
(3) The period of limitation does not begin on any claim or cause of action for an injury to person or property until the facts constituting the claim have been discovered or, in the exercise of due diligence, should have discovered by the injured party if:
(a) the facts constituting the claim are by their nature concealed or self-concealing;...

As the District Court noted, both parties agree that the misrepresentation upon which the claim is based occurred in January 1987. Defendant argues that plaintiff’s cause of action was complete on October 11, 1988, the date of the reversal of the first judgment. Plaintiff contends that his cause of action did not begin to accrue until after the Supreme Court affirmed the second verdict in Barrett II.

In its analysis, the District Court pointed out that to prevail on an action under Section 37-61-406, MCA, the plaintiff needs to prove that an attorney is guilty of deceit and that he was damaged by such deceit. The District Court then concluded that the plaintiff’s cause of action was complete when the defendant’s acts actually resulted in causing the Supreme Court to reverse the verdict causing the plaintiff’s damages which took place on October 11, 1988. The District Court then concluded that pursuant to the provisions of Section 27-2-102, MCA, that the clock began ticking on this claim on October 11, 1988. We agree with the conclusion of the District Court that the cause of action for deceit on the part of Mr. Barrett accrued on October 11, 1988, as all of the elements of his claim then existed or had occurred, and his right to maintain an action on the claim was complete.

Plaintiff contended before the District Court that the general three-year statute applied, that being Section 27-2-204, MCA, which in pertinent part provides:

Tort actions — general and personal property. (1) Except as provided in 27-2-216, [not applicable to the facts of this case] the period prescribed for the commencement of an action upon a liability not founded upon an instrument in writing is within 3 years ....

Defendant contended that the proper statute of limitations is contained in Section 27-2-211(l)(a), MCA, which in pertinent part provides:

Actions to enforce penalty or forfeiture or other statutory liability. (1) Within 2 years is the period prescribed for the commencement of an action upon:
(a) A statute for a penalty or forfeiture when the action is given to an individual... except when the statute imposing it prescribes a different limitation;
(c) A liability created by statute other than:
(i) a penalty or forfeiture;...

The District Court concluded that Section 37-61-406, MCA, clearly is a penalty statute. The District Court then concluded that the above quoted Section 27-2-211(l)(a), MCA, specifically applied to an action upon a statute for a penalty or forfeiture when the action is given to an individual. The District Court pointed out that this statute contains specific provisions applying to this type of a cause of action and therefore concluded that the two-year period of limitation applied to the plaintiff’s claim, rather than the three year general tort statute advocated by the plaintiff. We agree with the conclusion on the part of the District Court. We point out that from the wording of Section 37-61-406, MCA, an attorney who is guilty of any deceit forfeits to the party injured treble damages. Clearly that is a forfeiture or penalty provision. As pointed out by the District Court, the forfeiture or penalty comes within the specific provision of Section 27-2-211(l)(a), MCA. In addition, we point out that even if this were construed as a liability created by statute other than a penalty or forfeiture, it still falls within the two-year limitation period as above quoted in Section 27-2-211, MCA.

We therefore affirm the holding of the District Court that Mr. Barrett’s claims for deceit were barred by the statute of limitations contained in Section 27-2-211, MCA.

Affirmed.

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

JUSTICE TRIEWEILER

specially concurring and dissenting.

I concur with the majority’s disposition of appellant’s claims based on common law fraud and negligent misrepresentation. However, my concurrence is not based upon the reasoning found in the majority opinion.

I would conclude as a matter of law that there was no claim for fraud and no negligent misrepresentation because there was no reliance by appellant on respondent’s alleged misrepresentations.

In this case, respondent’s representations were made to the District Court and the Supreme Court, and were relied upon by the Supreme Court when it reversed appellant’s original jury verdict. Therefore, it does not appear that the necessary elements of common law fraud and negligent misrepresentation exist in this case and I would not create a claim for damages based on “fraud upon the court.” I dissent from that part of the majority opinion which concludes that appellant’s claim for damages pursuant to Section 37-61-406, MCA, is barred by the statute of limitations.

Our reversal of the original verdict for appellant was based on the following representations by respondent:

On December 16, 1986, ASARCO learned the names of six witnesses who allegedly had information about various incidents of dishonesty by Barrett during his employment and within three years of his termination date. These incidents allegedly included lying to superiors about sleeping on shift and about taking sick leave, stealing several hundred dollars worth of tools and equipment from ASARCO, and requesting one of his crew members to also steal for him.

Barrett v. ASARCO, Inc. (1988), 234 Mont. 229, 232, 763 P.2d 27, 29.

Based upon the District Court’s exclusion of those six witnesses, we vacated a verdict which had been returned in favor of appellant for $413,500. However, we did not enter judgment for the defendant; we remanded this case to the District Court for a new trial.

After this case was remanded, and prior to the second trial, appellant deposed five of the six witnesses whose proposed testimony was the subject of respondent’s first appeal. The sixth witness was out of state and unavailable. None of the five witnesses testified during their depositions as the respondent had indicated they would in its representations to the District Court and to this Court.

This case was not retried until November 13, 1989. During that trial only one of the six proposed witnesses testified and his testimony did not substantially conform to the representations about his testimony which had been made by respondent. That jury returned a verdict of $230,000 in favor of appellant. However, the judgment was not final until we affirmed it on October 25, 1990.

The statute of limitations which pertained to this cause of action provided for a period of two years within which to file a complaint. Section 27-2-211(l)(a), MCA. The period of limitation began to run when the claim accrued. However, the claim did not accrue until all elements of the claim existed. Section 27-2-102, MCA.

We previously held in Kitchen Krafters v. Eastside Bank of Montana (1990), 242 Mont. 155, 162, 789 P.2d 567, 571, that:

[T]he statute of limitations does not begin to run until all elements of a cause of action are in existence. For example, in a negligence action the plaintiff must prove four elements:
1) Existence of a duty
2) Breach of the duty
3) Causation
4) Damages.

Thornock v. State (1987), 229 Mont. 67, [72,] 745 P.2d 324, [327]. If these elements are not in existence, the plaintiff could not successfully bring a cause of action based upon negligence. Therefore, although one may be able to establish the existence and breach of a duty, he cannot successfully assert his cause of action until he has sustained an injury. Heckaman v. Northern Pacific Railroad (1933), 93 Mont. 363, [375,] 20 P.2d 258, [261].

It is necessary to prove these same elements in a cause of action based upon a breach of Section 37-61-406, MCA (Penalty for deceit). However, in this case there was no way that the element of damages could be proven or even appreciated until the final resolution of this case after it was remanded to the District Court. Is there any doubt that if the second jury had found for ASARCO on the issue of liability, or if the amount of the second verdict had exceeded the amount of the first, that this same respondent would be moving for summary judgment on the grounds that no damages had been sustained?

Appellant has alleged that respondent misrepresented to the District Court and to this Court the substance of the testimony that would be offered from the six witnesses whose testimony was excluded. There has been a good deal of speculation by the District Court and by this Court about whether respondent did in fact misrepresent what it was told by the witnesses. However, this case comes before this Court based on a summary judgment, and speculation about the merits of appellant’s claim has no place in our decision. Whether there was in fact a misrepresentation by respondent is a question of fact. Drawing all reasonable inferences from the record, there is certainly sufficient evidence to submit that issue to a jury or fact finder.

The important fact, for purposes of this appeal, is that -until the final judgment entered pursuant to the second trial, there was no basis upon which appellant could determine (1) his damages, or (2) whether or not he had in fact incurred damages. That final judgment date was October 25, 1990. Therefore, that is the date on which this action accrued.

Appellant’s complaint was filed on March 1, 1991 — well within the two year period provided for an action of this type.

For these reasons, I would reverse the judgment of the District Court and remand this case for a trial on the merits of appellant’s claim that respondent violated Section 37-61-406, MCA, and as a result damaged appellant.

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


author: JUSTICE HUNT

text:
    RALPH BAERTSCH; TERRY A. BROWNE and SUSAN G. BROWNE, husband and wife; INGRAM-CLEVENGER, INC., a Montana corporation; NORMA J. ANDRIOLO; CLINTON H. JENKS and VICTORIA J. JENKS, husband and wife; GEORGE RANDALL FRASER and MARY E. FRASER, husband and wife; GERALD VERN EVANS and YVONE J. EVANS, husband and wife; GEORGE A. ALGARD and SUSAN E. ALGARD, husband and wife; HAROLD F. CRANMER and JANET CRANMER, husband and wife; CHARLES J. KASSNER; CARL SAMUEL PEIL and PAMELA A. PEIL, husband and wife; FORREST A. BAERTSCH; McHUGH LAND & LIVESTOCK CO., a Montana corporation; PETER J. McHUGH, JR. and MARY J. McHUGH, husband and wife; DAVID B. HAHN and CAROL W. HAHN, husband and wife, Plaintiffs and Appellants, v. COUNTY OF LEWIS AND CLARK, a political subdivision of the STATE OF MONTANA, and all other persons unknown, claiming or who might claim any right, title, estate or interest in, or lien or encumbrance upon, the real property described in the Complaint, or any thereof, adverse to plaintiffs’ ownership, or any cloud upon plaintiffs’ title thereto, whether such claim or possible claim be present or contingent, including any claim or possible claim of dower, inchoate or accrued, Defendant and Respondent.
    No. 91-062.
    Submitted on Briefs May 14, 1992.
    Decided December 30, 1992.
    49 St.Rep. 1162.
    256 Mont. 114.
    845 P.2d 106.

      For Appellants: R. J. “Jim” Sewell, Jr., Lewis Smith, Smith Law Firm, Helena.
    For Respondent: Michael McGrath, Lewis and Clark County Attorney, K. Paul Stahl, Deputy County Attorney, Helena.
   JUSTICE HUNT

delivered the opinion of the Court.

This is an appeal from the judgment of the District Court of the First Judicial District, Lewis and Clark County. Plaintiffs, a group of landowners owning property adjacent to McHugh Drive near Helena (landowners), brought suit against defendant Lewis and Clark County (County) over a dispute regarding the right-of-way to McHugh Drive. The County claims a 100-foot right-of-way easement for McHugh Drive. The landowners contend, based on various legal theories, that the right-of-way is considerably less than 100 feet. The District Court found in favor of the County under all arguments presented by the landowners, with the exception of the landowners’ argument based on res judicata. However, not all of the landowners prevailed under the District Court’s application of the doctrine of res judicata. The landowners appeal from the judgment of the District Court. We affirm.

The landowners present the following issues for consideration by this Court:

1. Did the District Court err in determining that the 1890 conveyances granting the County a 100-foot right-of-way were properly recorded so as to impart constructive notice of their contents to the general public?

2. Did the District Court err in determining that the original dedication of the 100-foot right-of-way in 1890 was done in accordance with the proper statutory procedure?

3. Did the District Court err in determining that the County had not abandoned the disputed portion of the right-of-way?

4. Did the District Court err in determining that the landowners, through their predecessors in interest, did not acquire ownership of the disputed portion of the right-of-way by adverse possession?

5. Did the District Court err in determining that the County’s claim to the disputed right-of-way was not barred by the doctrine of equitable estoppel?

6. Did the District Court err in determining that the doctrine of res judicata did not bar the County’s claim to the disputed right-of-way as to some of the landowners?

The landowners’ appeal presently before this Court is the latest development in what has been a lengthy dispute between the parties over the right-of-way to McHugh Drive. The relevant facts of this case have previously been set out in two prior decisions of this Court. The first decision in this matter was Ingram-Clevenger, Inc. v. Lewis and Clark County (1981), 194 Mont. 43, 636 P.2d 1372. In Ingram-Clevenger, we set out the factual and procedural history of the case stating that:

McHugh Lane (or Drive) is a county road running north-south through the Helena Valley. In 1890, Lewis and Clark County was granted a 100-foot right-of-way to establish the road.
On June 6, 1980, plaintiffs presented the board of county commissioners with a petition signed by every landowner owning property adjacent to McHugh Lane. The petition requested that the County abandon forty feet of the McHugh Lane right-of-way (twenty feet on each side). The petition was discussed at a regularly scheduled and noticed hearing of the Lewis and Clark County Commissioners on July 22, 1980. At this time, the commissioners found the petition to be in proper form required under section 7-14-2602, MCA, a finding reiterated in defendant’s brief. The commissioners denied the petition.
On August 22, 1980, plaintiffs filed suit, seeking a peremptory writ of mandamus against Lewis and Clark County, the board of county commissioners and the three county commissioners. Oral argument as to the applicable law was heard on September 3,1980. Briefs were submitted at the District Court judge’s request. On October 20, 1980, the District Court issued its order and opinion, granting plaintiffs’ writ of mandate and directing the board of county commissioners to forthwith grant the petition to partially abandon McHugh Lane.

Ingram-Clevenger, 636 P.2d at 1373.

The County brought an appeal from the District Court’s order granting plaintiffs’ writ of mandamus. In Ingram-Clevenger, for reasons not important to the present appeal, this Court vacated the order of the District Court, finding that mandamus did not lie.

Following this Court’s decision in Ingram-Clevenger, the plaintiffs brought an action on April 29, 1982, for declaration that they had obtained title to the disputed portion of the 100-foot right-of-way. The issues raised in that suit are essentially the same issues raised on this appeal. The County raised the defense of res judicata to the plaintiffs’ action, alleging that this Court’s decision in IngramClevenger barred the plaintiffs’ action. The District Court agreed. Following a bench trial the District Court dismissed the landowners’ complaint, and quieted title in the County to the 100-foot right-of-way. The landowners brought an appeal from the judgment of the District Court, and in Baertsch v. County of Lewis and Clark (1986), 223 Mont. 206, 727 P.2d 504, this Court reversed the judgment of the District Court. In Baertsch, we stated that:

We conclude that the issues in the two cases are not the same. In Ingram-Clevenger the request of the landowners was for the vacation of a portion of McHugh Drive under the statutory authority granted to the County Commissioners. The title or ownership to the Drive was not in any manner involved in that proceeding. In contrast, the essential claims in the present case are issues relating to the title to the McHugh Drive roadway itself. Such issues could not have been properly presented as a part of the proceeding for vacation of McHugh Drive. The Board of County Commissioners has no authority to adjudicate title.

Baertsch, 727 P.2d at 506-07.

In Baertsch, we determined that the plaintiffs’ action was not barred by the doctrine of res judicata and remanded for trial of the issues on the merits. Upon remand, the parties agreed to submit the matter to the District Court for a decision on the merits of landowners’ allegations based on briefs, oral argument, and the prior trial record. Oral argument was held on May 3, 1990. The parties were given 30 days to file findings at which time the matter would be deemed submitted for decision. On November 16, 1990, the District Court filed lengthy and detailed findings of fact, conclusions of law, and order in this matter. The District Court found in favor of the County under all legal theories raised by landowners, with the exception that certain of the landowners prevailed on the theory of res judicata. Landowners brought this appeal.

I

Did the District Court err in determining that the 1890 conveyances granting the County a 100-foot right-of-way were properly recorded so as to impart constructive notice of their contents to the general public?

The parties disagree as to the appropriate standard of review to be utilized by this Court in this case. On appeal, this Court will not set aside factual determinations made by a district court sitting without a jury unless they are clearly erroneous. Rule 52(a), M.R.Civ.P. Concerning our review of conclusions of law, this Court will simply determine whether the lower court’s interpretation of the law was correct. We are not bound by the trial court’s conclusions and remain free to reach our own. Schaub v. Vita Rich Dairy (1989), 236 Mont. 389, 770 P.2d 522.

The petition for Forestvale Road (now McHugh Drive), granted in 1890 by the county commissioners, was never filed as a conveyance. Landowners contend that the 1890 documents granting the disputed right-of-way to the County were not properly recorded and indexed as conveyances, and therefore, failed to give adequate notice to the public that the right-of-way was 100 feet. Pursuant to various sections of the 1887 Compiled Statutes of Montana (CSM) which governed in 1890, all conveyances that were not recorded and indexed as required by law were void against any subsequent purchasers in good faith and for valuable consideration. The District Court found that the original petition and accompanying deeds were not recorded or indexed as conveyances.

The County argues that the 1890 documents creating the right-of-way did not have to be recorded and indexed as conveyances. The County contends that Section 1823, CSM (1887), as the specific statute governing the creation of roads, sets out the only procedure necessary for the creation of roads. Section 1823, CSM (1887), provides that:

Whenever a petition shall be presented to the board of county commissioners of any county of this territory praying for a public highway, and the names of all the owners of all the land through which said road is to be laid out, shall be signed thereat, giving the right of way through the lands, and accompanied by a plat of the road, it shall be the duty of the county commissioners, if in their opinion the public good requires it, to declare the same a public highway, and thereupon the plat shall be filed and recorded, and the same shall become a public highway from and after that date. [Emphasis added.]

Landowners contend the filing and recording of the plat as described in Section 1823, CSM (1887), is in addition to the recording and indexing as a conveyance. The District Court agreed with the County. The District Court stated that:

This specific statute on the creation of public rights-of-way for counties takes precedence over any other statute dealing with recording or indexing conveyances. According to Section 1823, the plat shall be filed and recorded. It is uncontested that the plat was filed and recorded. See Defendants’ Exhibit M, Road Index, and Plat Book 1, page 38, Defendants’ Exhibit O. The statutes under which the county commissioners were operating in 1890 were met. There is no requirement that the petition, plat, or deeds be filed and recorded as conveyances. The terms of the specific statute on how to create a road take precedence over the more general statute on recording conveyances.

Landowners point out that pursuant to the existing statutes the filing and recording of the plat as described in Section 1823 was “to be recorded in the office of the county clerk and recorder in the book kept for that purpose.” Section 1817, CSM (1887). Landowners presented evidence that the record book of roads was not always kept in the clerk and recorder’s office, and therefore, the public was not put on notice of the 100-foot right-of-way claimed by the County. The County presented evidence that although the book was not always kept in the office of the clerk and recorder, the location of the book was always known and available to the public.

Clearly the statutes in question were not models of clarity. Additionally, there was conflicting testimony as to the location and availability of the record book over the years. However, the District Court, after having had the opportunity to listen to and observe the testimony of the witnesses, determined that the procedural requirements of the statute had been satisfied. We cannot say that the decision of the District Court was clearly erroneous.

II

Did the District Court err in determining that the original dedication of the 100-foot right-of-way in 1890 was done in accordance with the proper statutory procedure?

Section 1822, CSM (1887), provided that unless otherwise ordered by the board of county commissioners, all public highways created in the Territory of Montana shall be 60 feet in width. Landowners contend that the county commissioners acting in 1890 did not specifically order the public highway in the present location of McHugh Drive to be 100 feet in width, and therefore, the width is only 60 feet, as provided by the statute governing at the time. However, the petition, plat, and dedication presented to the county commissioners in 1890 all showed that the right-of-way was 100 feet. Specifically, the petition read in part that “said public road or highway should be 100 feet wide, being fifty feet wide on each side of said quarter section line . . . .” The county commissioners granted the petition. We hold that the District Court was correct in concluding that the county commissioners, in granting the petition, “were obviously granting its contents, which was a request for a 100-foot right-of-way.”

III

Did the District Court err in determining that the County had not abandoned the disputed portion of the right-of-way?

Landowners contend that the County abandoned all but 60 feet of the right-of-way. The District Court disagreed, concluding that the evidence was neither decisive nor conclusive that the County intended to abandon the full right-of-way. Additionally, the District Court concluded that the statute concerning abandonment of County roads had not been met. Section 7-14-2615, MCA, sets forth the procedure for abandoning county roads and provides that:

(1) All county roads once established must continue to be county roads until abandoned or vacated by:

(a) operation of law;
(b) judgment of a court of competent jurisdiction; or
(c) the order of the board.

(2) No order to abandon any county road shall be valid unless preceded by notice and public hearing.

One of the elements necessary to prove abandonment of public property by governmental entities is a showing of a clear intent to abandon. The conduct claimed to demonstrate this intent must be of character so decisive and conclusive as to indicate a clear intent to abandon. Rumph v. Dale Edwards, Inc. (1979), 183 Mont. 359, 600 P.2d 163. The conduct must be some affirmative official act, and not mere implication. Mere nonuse, even for extended periods of time, is generally insufficient, by itself, to indicate an intent to abandon. City of Billings v. O. E. Lee Co. (1975), 168 Mont. 264, 542 P.2d 97. The District Court’s finding that the County had not manifested any intent to abandon the disputed portion of the right-of-way is not clearly erroneous.

IV

Did the District Court err in determining that the landowners, through their predecessors in interest, did not acquire ownership of the disputed portion of the right-of-way by adverse possession?

Landowners contend that they have satisfied the requirements for obtaining land by adverse possession. The County responds by arguing that Montana law provides that title to public roads may not be obtained by adverse possession. The general rule concerning adverse possession of public roads, followed in the majority of jurisdictions, is that:

It is a widely accepted general rule, sometimes embodied in statute, that the statute of limitations does not run in favor of those who occupy property held for public use as a street or highway, and that title cannot be acquired thereto by such occupancy, no matter how long occupancy has been continued and whatever may have been its character. So, it has been held that the rights of the public in its highways cannot be lost by acquiescence in the use or occupation thereof by individuals, even though such highways have not been opened or used.

3 Am. Jur. 2d Adverse Possession Section 271 (1986). A minority of jurisdictions take the view that public roads may be acquired by adverse possession in some situations.

Montana law in this area clearly follows the general rule that title to public roads may not be obtained by adverse possession. In City of Billings v. Pierce Packing Company (1945), 117 Mont. 255, 161 P.2d 636, this Court held that public roads may not be obtained by adverse possession. Pierce Packing is still the law of Montana today and we decline to adopt the landowners’ suggestion that Montana join the minority of jurisdictions which allow title to public roads to be obtained by adverse possession. We hold that the District Court was correct in concluding that landowners did not obtain title to the disputed right-of-way through adverse possession.

V

Did the District Court err in determining that the County’s claim to the disputed right-of-way was not barred by the doctrine of equitable estoppel?

Landowners contend that the County is equitably estopped from claiming title to the 100-foot right-of-way to McHugh Drive. Landowners have placed various improvements within the 100-foot right-of-way claimed by the County. Landowners contend that based upon the conduct of the County and the nature of the improvements, that the County must be equitably estopped from claiming title in order to prevent a manifest injustice to the landowners.

The County argues that equitable estoppel will only be used against public property in exceptional cases and then only with great caution. Pierce Packing, 161 P.2d at 640. The County contends equitable estoppel against a governmental entity is looked upon with great disfavor, even in situations in which there may be some wrongful conduct on the part of government officials. Chennault v. Sager (1980), 187 Mont. 455, 610 P.2d 173. The District Court relied heavily on this Court’s opinion in Pierce Packing wherein we stated that:

But where the road has been established and continually used, the mere fact that the fences bordering it are not on the true line and the portion beyond has been occupied by the landowner up to the fence and not made use ofby the public will not work an estoppel against the public, but the entire width of the highway may be appropriated by the public whenever required for the purposes of travel....

Pierce Packing, 161 P.2d at 639.

The rationale underlying the general rule that equitable estoppel is not applicable against governmental entities is the overwhelming interest of the public in maintaining public lands. This Court has stated that “[ijrrespective of the negligence of public employees and officials, however, the foremost consideration in our minds lies with the protection of the public interest.” Chennault, 610 P.2d at 177. Public roads in particular are protected in that “[n]o other kind of public property is subject to more persistent and insidious attacks or is less diligently guarded against seizure.” Pierce Packing, 161 P.2d at 640.

Landowners point out that this Court has previously recognized that a governmental entity may be equitably estopped from claiming an interest in public land under exceptional circumstances. In Town of Boulder v. Bullock (1981), 193 Mont. 493, 632 P.2d 716, this Court held that the town was estopped from claiming an injunction from further construction or requiring the removal of an individual’s building encroaching on a portion of a public street. Landowners argue that the present case presents the type of exceptional circumstances as existed in Bullock.

Landowners point out that the County has not used the disputed portion of the right-of-way for public benefit for over 90 years. In fact, the County has accepted and approved plats of subdivisions showing the right-of-way to be less than 100 feet. It was stipulated by the parties, and accepted by the District Court, that all the landowners accepted and recorded deeds to land within the 100-foot right-of-way of McHugh Drive. Landowners contend that such acquiescence to private use, along with the improvements made over the years by the landowners, justifies the application of the doctrine of equitable estoppel in this case. The District Court found that not applying equitable estoppel in this situation would not result in manifest injustice to landowners. Taking into consideration the public interest in maintaining public property, we cannot say that the District Court’s determination that the doctrine of equitable estoppel did not apply in this situation is clearly erroneous.

VI

Did the District Court err in determining that the doctrine of res judicata did not bar the County’s claim to the disputed right-of-way as to some of the landowners?

The District Court found that over the years there had been four quiet title actions in which it had been judicially determined that the County’s right-of-way to McHugh Drive was less than 100 feet. The District Court determined that as a result of two of these actions, the doctrine of res judicata barred the County from asserting a 100-foot right-of-way against certain of the landowners. The criteria which must be met before the doctrine of res judicata will be applied are:

(1) [T]he parties or their privies must be the same; (2) the subject matter of the action must be the same; (3) the issues must be the same, and must relate to the same subject matter; and (4) the capacities of the person must be the same in reference to the subject matter and to the issues between them.

First Bank Missoula v. District Court (1987), 226 Mont. 515, 520, 737 P.2d 1132, 1135. Landowners argue that all four quiet title actions should act as a bar to the County’s claim of a 100-foot right-of-way. The County contends that the doctrine of res judicata does not apply.

The two actions which the District Court found acted as a bar to the County’s claim clearly satisfy the four criteria of res judicata. In one of the other quiet title actions, the plaintiff was Forestvale Cemetery. Forestvale Cemetery is not a party to this action, nor is it a predecessor in interest to any of the present landowners. The quiet title action involving Forestvale Cemetery, which determined the County’s right-of-way was less than 100-feet, is not res judicata in this instance because the prior litigation did not involve the present parties or their predecessors in interest. The other quiet title action did not name the County as a defendant. Landowners contend that while not specifically mentioned in the action the County was served by publication as an unknown person who might have an interest in the property. This procedure may be sufficient to bring an unknown party into the action, but only after the plaintiff has used “reasonable diligence” to locate the specific individuals with an interest in the property. Joseph Russell Realty Co. v. Kenneally (1980), 185 Mont. 496, 605 P.2d 1107; Rule 4D(2)(f), M.R.Civ.P. The District Court was correct in concluding that the County was not properly a party to the prior litigation, and therefore, res judicata does not apply. We affirm the conclusions of the District Court.

Affirmed.

JUSTICES HARRISON, GRAY, McDONOUGH and WEBER concur.