text:
    STATE OF MONTANA, Plaintiff and Respondent, v. TIMOTHY MAGUIRE HATFIELD, Defendant and Appellant.
    No. 92-151.
    Submitted on Briefs November 19, 1992.
    Rehearing Denied February 25, 1993.
    Decided February 4, 1993.
    50 St.Rep. 101.
    256 Mont. 340.
    846 P.2d 1025.

      For Defendant and Appellant: David F. Ness, Helena.
    For Plaintiff and Respondent: Marc Racicot, Attorney General, John Paulson, Assistant Attorney General, Helena; Scott B. Spencer, Lincoln County Attorney, Libby.
   JUSTICE GRAY

delivered the Opinion of the Court.

Appellant Timothy Maguire Hatfield appeals his convictions of the felony offenses of criminal sale of dangerous drugs and conspiracy to sell dangerous drugs. We affirm in part, reverse in part and remand for resentencing.

We address the following dispositive issues:

1. Did the District Court err in denying appellant’s motion to dismiss Count II of the Information, which charged him with conspiracy to sell dangerous drugs?

2. Did the District Court improperly restrict appellant’s cross-examination of the State’s chief witness?

3. Did the District Court err in denying appellant’s motion for a new trial without holding an evidentiary hearing?

4. Did the District Court err when it sentenced appellant to up to 180 days in jail to be served at the discretion of the supervising probation officer?

On May 29, 1991, Hatfield was charged by Information with one count of criminal sale of dangerous drugs, in violation of Section 45-9-101, MCA, and one count of conspiracy to sell dangerous drugs, in violation of Section 45-4-102, MCA. The charges against Hatfield arose in the course of an undercover drug investigation conducted by the Lincoln County Sheriff’s Department from September 1990 to May 1991. Hal Turner was employed as an undercover agent and was instructed to make pin-chases of dangerous drugs from anyone who would sell them.

Prior to arraignment on June 10, 1991, Hatfield filed a motion to dismiss the conspiracy count. The District Court denied the motion.

Hatfield’s jury trial began on January 29, 1992. The evidence entered by the State and Hatfield presented two markedly different versions of the facts to the jury. At the conclusion of the trial, the jury found Hatfield guilty of both offenses with which he was charged. Hatfield’s subsequent pro se motion for a new trial was denied. The District Court sentenced Hatfield to six years at the Montana State Prison for each offense, suspended the entire sentence, and placed him on probation with certain conditions. This appeal followed.

1. Did the District Court err in denying appellant’s motion to dismiss Count II of the Information, which charged him with conspiracy to sell dangerous drugs?

Appellant contends that, even viewing the evidence relating to the conspiracy in a light most favorable to the prosecution, the District Court erred as a matter of law in denying his motion to dismiss the conspiracy charge against him. We agree.

We recently addressed the issue of whether a conspiracy can exist between a government agent and only one other person in State v. Shaw (Mont. 1992), [255 Mont. 298,] 843 P.2d 316, 49 St.Rep. 1012. Relying on cases from three United States Circuit Courts of Appeal, we concluded in Shaw:

It is well established that: “[t]here is neither a true agreement nor a meeting of the minds when an individual ‘conspires’ to violate the law with only one other person and that person is a government agent.... An individual must conspire with at least one bona fide co-conspirator to meet the formal requirements of a conspiracy.”

Id. at 320 (citations omitted).

Shaw controls here. The charge against Hatfield of conspiracy to sell dangerous drugs in violation of Section 45-4-102, MCA, is set forth in Count II of the Information as follows:

The facts of the offense are that between January 31,1991 and February 4, 1991, Defendant agreed to sell marijuana to Hal Turner, an undercover agent for the Lincoln County Sheriff’s Department, and took $60.00 for payment for the drug. The offense took place in Lincoln County, Montana.

It is clear that only two people were involved in the charged conspiracy: defendant/appellant Hatfield and Turner. The Information itself also includes the fact that Turner was an undercover agent.

Pursuant to Shaw, we conclude as a matter of law that Hatfield did not “conspire” with a bona fide coconspirator and that, as a result, no conspiracy existed. The District Court erred in denying appellant’s motion to dismiss the conspiracy charge.

2. Did the District Court improperly restrict appellant’s cross-examination of the State’s chief witness?

Undercover agent Turner testified at length during the State’s case-in-chief as to the occurrences which formed the basis of the charges against Hatfield. During cross-examination of Turner by defense counsel, the following exchange took place:

Q. And typically, I say you probably have the typical background for an undercover agent, wouldn’t you say? You have been in prison?
A. Yes sir.
Q. And —
[County Attorney]: Objection, Your Honor. Ask — that is not relevant, move that it be stricken and counsel be told to quit that. THE COURT: Sustained. And the answer is stricken.

Appellant argues that sustaining this objection prevented any cross-examination to impeach Turner’s credibility or to establish his bias, motives and proclivity toward dishonesty. Hatfield contends that this error by the District Court violated his constitutional right to confront the witnesses against him.

The importance of the right to confront and cross-examine under both the Sixth Amendment to the United States Constitution and Article II, Section 24 of the Montana Constitution hardly can be overstated. Indeed, “[cjross-examination is the principal means by which the believability of a witness and the truth of his testimony are tested.” Davis v. Alaska (1974), 415 U.S. 308, 316, 94 S.Ct. 1105, 1110, 39 L.Ed.2d 347, 353. Counsel traditionally are afforded wide latitude in the exercise of this right on behalf of criminal defendants.

The importance of the right to confront and cross-examine, however, does not reconstruct the record before us. That record is devoid of support for appellant’s argument that his right to confrontation was violated.

As set forth above, the trial court sustained an objection on relevancy grounds to the question of whether Turner had ever been in prison. Trial counsel did not attempt to establish the relevance of the question; nor did he ask other questions or attempt to elicit any testimony as to matters in Turner’s background which might have related to credibility, bias or motive. No other limitations or restrictions on counsels ability to cross-examine regarding these matters appear of record. Appellant’s characterization of the sustaining of one objection as a summary termination of his right to confront and cross-examine is, at best, overzealous.

We note that counsel on appeal includes many pages of “facts” and exhibits not of record regarding Turner’s background. We remind counsel that parties on appeal are bound by the record and may not add additional matters in briefs or appendices. State v. Puzio (1979), 182 Mont. 163, 595 P.2d 1163.

We conclude that the District Court did not improperly restrict Hatfield’s cross-examination of the State’s chief witness.

3. Did the District Court err in denying appellant’s motion for a new trial without holding an evidentiary hearing?

Appellant filed a pro se motion for a new trial on a number of different grounds. The District Court heard, and denied, the motion. Appellant argues that he was entitled to an evidentiary hearing to determine whether extraneous sentencing information induced the jury’s guilty verdicts.

Citing Rule 606(b), M.R.Evid., and United States v. Vasquez (9th Cir. 1979), 597 F.2d 192, appellant contends that when a party presents evidence that extraneous prejudicial information or outside influence reached the jury, the trial court should hold an evidentiary hearing to determine the precise nature of the extraneous information and whether it could have affected the verdict. In addition, he relies on United States v. Greer (10th Cir. 1980), 620 F.2d 1383, for the proposition that courts have not been hesitant to reverse when extraneous sentencing information has been inteijected into jury deliberations.

Neither Vasquez nor Greer is relevant here. It was undisputed in Vasquez and Greer that extraneous information had reached the jury during deliberations; evidentiary hearings were held after that fact came to the trial court’s attention. Thus, the Ninth Circuit did not address the very fundamental issue in the case before us.

The issue here is whether Hatfield presented evidence sufficient to trigger an evidentiary hearing on his motion for a new trial. Our review of the record convinces us that he did not. Hatfield’s pro se motion presented the issue in an unintelligible manner. In support of the motion, he offered only his spouse’s affidavit recounting a post-trial conversation with juror John Fenison diming which, according to Ms. Hatfield, Fenison “implied” that the jurors “were told” Hatfield would receive only probation if convicted. No factual assertions whatsoever were made — either by Ms. Hatfield or via juror affidavit pursuant to Rule 606(b), M.R.Evid. — that extraneous sentencing information actually reached the jury. Moreover, during the hearing on the motion, the District Court made every effort to assist Hatfield in stating his position clearly; the court explained that evidence as to extraneous information or influences on the jury could be used to impugn the verdict, while evidence of jurors’ own perceptions or conversations during deliberations could not. Following the explanation, Hatfield did not assert that extraneous sentencing information or other influences reached the jury; nor did he request an evidentiary hearing or pursue the issue further.

Under these circumstances, the District Court did not err in denying Hatfield’s motion for a new trial without holding an evidentiary hearing.

4. Did the District Court err when it sentenced appellant to up to 180 days in jail to be served at the discretion of the supervising probation officer?

The District Court sentenced Hatfield to six years in the Montana State Prison for each offense, suspended the sentence, fined him $500 to be paid to the Lincoln County Drug Fund, and imposed various terms and conditions. One of the conditions was that Hatfield serve 30 days in the Lincoln County jail. The condition Hatfield asserts as error states in its entirety:

Defendant may be required to serve up to an additional one hundred-eighty days in the Lincoln County Detention Facility, at the discretion of the supervising Probation Officer. This jail time is to be used in the event the Defendant fails to comply with any rules imposed by this Court, or by the Probation Department. The Probation Officer has the right to decide the amount of time to be served for any infraction, up to the entire one hundred eighty days. The Defendant shall have the right of appeal of the determination of the Probation Officer that Defendant spend time in jail. If Defendant appeals the Probation Officer’s determination the violations alleged by the Probation Officer shall be treated as a violation of probation and handled by a Petition for Revocation.

As a threshold matter, we note that Hatfield did not object to the sentence at the time it was entered and that we generally decline to review matters not objected to at the trial court. We have recognized an exception to this rule requiring preservation of the right to appeal an issue, however, with regard to criminal sentences. We concluded in State v. Lenihan (1979), 184 Mont. 338, 602 P.2d 997, that a criminal sentence may be reviewed on appeal if it is alleged to be illegal or in excess of statutory mandates. It is on this basis that we address the sentencing issue in this case.

We have long held that a district court has no power to impose a sentence in the absence of specific statutory authority. State v. Stone (1909), 40 Mont. 88, 105 P. 89; State v. Openshaw (1977), 172 Mont. 511, 565 P.2d 319. The District Court had clear statutory authority under Sections 46-18-201 and 46-18-202, MCA, to suspend Hatfield’s sentence and impose statutorily enumerated conditions and other conditions necessary to attain the objectives of rehabilitation and the protection of society. State v. Rogers (1989), 239 Mont. 327, 779 P.2d 927. Nothing in those statutes or any other statute, however, authorizes the total jail sentence to which appellant was sentenced or the manner in which the additional jail time could be imposed.

Section 46-18-201, MCA, provides that jail time not exceeding 180 days is a reasonable condition during the period of a suspended sentence. Thus, the maximum jail time to which appellant can be sentenced pursuant to that statute is 180 days.

Furthermore, no statute specifically authorizes a district court to delegate sentencing discretion to a probation officer. The only arguable support for that portion of Hatfield’s sentence here is Section 46-18-202, MCA, which permits a district court to impose conditions it considers necessary for rehabilitation. While we construed that statutory provision broadly in Dahlman v. District Court (1985), 215 Mont. 470, 698 P.2d 423, we decline to expand it to allow delegation of the actual and direct power and discretion to incarcerate for extended periods of time from the court to a probation officer.

We conclude that the District Court erred in imposing a condition that could result in Hatfield being incarcerated for more than 180 days. We further conclude that the District Court erred in sentencing Hatfield to jail time to be served at the discretion of his probation officer.

Affirmed in part, reversed in part and remanded for resentencing.

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


source: Caselaw Access Project

author: JUSTICE GRAY JUSTICE HUNT

license: Public Domain

text:
    JOHN AND JANE DOE, Plaintiffs and Appellants, v. THE STATE OF MONTANA, acting through its Department of Revenue, Defendant and Respondent.
    No. 92-181.
    Submitted on Briefs July 30, 1992.
    Decided February 4, 1993.
    50 St.Rep. 105.
    256 Mont. 348.
    846 P.2d 1018.

      For Plaintiffs and Appellants: James T. Ranney, Missoula.
    For Defendant and Respondent: Allen B. Chronister, Chronister, Driscoll & Moreen, Helena.
   JUSTICE GRAY

delivered the Opinion of the Court.

John and Jane Doe appeal from an order of the First Judicial District Court, Lewis and Clark County, dismissing their complaint for failure to state a claim under Rule 12(b)(6), M.R.Civ.P. We affirm.

The sole issue on appeal is whether the District Court erred in granting the defendant’s motion to dismiss.

In 1989, the Department of Revenue investigated John and Jane Doe to determine whether they failed to report business income while on public assistance. Agents from the Department of Revenue obtained a warrant to search the Doe home for business and financial records and other evidence relating to the sale of insurance and dealing in firearms.

During the subsequent search, the agents entered the Does’ bedroom closet. There, they found records relating to the sale of firearms. They also found a standard pharmacy photoprocessing envelope which appeared to contain photographs. The agents opened the envelope and examined the photographs. Several of the photographs depicted Jane Doe nude and the couple engaged in sexual activity. One photograph depicted the Does’ children helping John Doe remove his boots. Doe was partially disrobed, with either his hand or penis visible.

The latter photograph caused the Department of Revenue agents to suspect child sexual abuse or child pornography; they summoned Missoula police officers. The police officers contacted the Missoula County Attorney’s office and were informed that the photographs did not warrant criminal prosecution. A Missoula officer notified Child Protective Services of the possible child abuse pursuant to Section 41-3-201, MCA. Child Protective Services subsequently interviewed the Does’ children at school. The interview revealed no indication of child abuse or pornography.

On August 2, 1991, John and Jane Doe filed a complaint for invasion of privacy. They alleged that the Department of Revenue agents exceeded the scope of the warrant when they opened and searched the envelope. On February 21, 1992, the District Court granted the defendant’s motion to dismiss for failure to state a claim upon which relief can be granted. The Does appeal.

Did the District Court err in granting the defendant’s motion to dismiss the complaint for failure to state a claim?

A district court’s dismissal of a complaint for failure to state a claim is governed by well-established principles. A complaint should not be dismissed unless it appears that the plaintiff is entitled to no relief under any set of facts which could be proved in support of the claim. Furthermore, the district court must construe the complaint in the light most favorable to the plaintiff; all allegations of fact in the complaint are taken as true. Morgan v. City of Harlem (1987), 227 Mont. 435, 437, 739 P.2d 491, 492-93.

While the District Court discussed the “plain view” exception to the warrant requirement, it dismissed the Does’ complaint based on its conclusion that the agents did not exceed the scope of the search warrant. The Does contend, first, that the search of the photoprocessing envelope exceeded the scope of the warrant and, second, that two of the requirements necessary to invoke the “plain view” doctrine were not met. Finally, the Does argue that an allegation that three of their photographs were seized and not returned was not addressed by the District Court.

The District Court determined that the agents did not exceed the scope of the warrant when they examined the contents of the photoprocessing envelope, relying on United States v. Ross (1982), 456 U.S. 798, 102 S.Ct. 2157, 72 L.Ed.2d 572. While the facts in Ross involve the scope of a search conducted under the automobile exception to the warrant requirement, the Supreme Court described therein the scope of a search conducted under a valid search warrant:

A lawful search of fixed premises generally extends to the entire area in which the object of the search may be found and is not limited by the possibility that separate acts of entry or opening may be required to complete the search. Thus, a warrant that authorizes an officer to search a home for illegal weapons also provides authority to open closets, chests, drawers, and containers in which the weapon might be found.

Ross, 456 U.S. at 820-21, 102 S.Ct. at 2170-71.

Here, the agents conducted a search of the Does’ residence pursuant to a warrant. The warrant authorized the agents to search the residence for business and financial documents. Under Ross, they were entitled to search every place in which business and financial documents or evidence might be found. The search led the agents to the bedroom closet, where they found documents and items relating to the Does’ criminal activity. The photoprocessing envelope also was located in the closet. Given the warrant’s focus on documentation of suspected illegal activity, the envelope may have contained photographic evidence. Thus, under Ross, the envelope did not differ from the closet; it constituted merely another container in which evidence of the illegal activity might be found. Under these circumstances, the warrant was sufficiently broad to authorize the agents to open the envelope and review the photographs. We conclude that the examination of the contents of the envelope was ■within the scope of the warrant.

The Does contend that Justice Stewart’s concurring opinion in Stanley v. Georgia (1969), 394 U.S. 557, 89 S.Ct. 1243, 22 L.Ed.2d 542, is controlling precedent for their argument that the agents exceeded the scope of the warrant by examining the photographs individually. In Stanley, officers obtained a warrant to search a residence and to seize equipment, records and other material used in or derived from an illegal wagering business. In searching a desk drawer, they found film and proceeded to view it. On the basis of the contents of the film, the defendant was charged with, and convicted of, knowing possession of obscene material.

The Supreme Court reversed the conviction. Concurring in the result, Justice Stewart determined that the officers exceeded the authority of the warrant when they seized and viewed the film. He characterized the officers’ conduct as a general, exploratory search which led to a seizure of an item not described in the warrant.

Stanley is neither controlling nor persuasive here. Initially, we note that the Stanley majority reversed the conviction based on the First, rather than the Fourth, Amendment; Stanley held that “the First and Fourteenth Amendments prohibit making mere private possession of obscene material a crime.” Stanley, 394 U.S. at 568, 89 S.Ct. at 1249. Concurring opinions do not constitute controlling precedent.

In addition, if Justice Stewart’s concurring opinion is relevant at all, it supports the State’s position that the agents acted within the scope of the warrant. Unlike the officers in Stanley, the agents in the present case did not conduct a general search that was unrelated to the purpose of the warrant; the photoprocessing envelope was found in the closet with other evidence of the Does’ criminal activity. Moreover, in Stanley, the film could not reasonably have contained any of the items described in the warrant; here, the envelope may have contained photographic documentation relating to the illegal dealing in firearms of which the Does were suspected. The fact that it contained merely private photographs of a personal nature could not have been known to the agents in advance.

We hold that, under the circumstances of this case, the opening of the envelope and examination of the photographs did not exceed the scope of the warrant. Based on this holding, we need not address the “plain view” doctrine.

The Does’ final argument is that an allegation that three of their photographs were seized and not returned was not addressed by the District Court. While not so stated, presumably the Does intend this argument to establish error by the District Court in dismissing their complaint. The argument is flawed.

The thrust of the Does’ complaint is a single invasion of privacy via the agents’ initial intrusion into the photoprocessing envelope and review of individual photographs. The one sentence contained in the five-plus page complaint on which the Does apparently premise this final argument states that they discovered, after the search, that three photographs were missing. The sentence is not a factual allegation that any person or entity against whom the complaint is brought actually seized the photographs. This is insufficient to put the defendants or the District Court on notice that they were alleging a specific seizure by one or more named defendants. Moreover, in their brief in opposition to the motion to dismiss before the District Court, the Does stated:

[T]he crux of our complaint is an allegation of a single invasion of privacy via the initial illegal intrusion into the Plaintiffs’ personal packet of photographs, with the subsequent actions all being primarily relevant to the issue of damages....

Under these circumstances, the cited sentence in the Does’ complaint does not constitute an independent basis for their claim of invasion of privacy. The District Court did not err in dismissing the complaint.

Affirmed.

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

JUSTICE HUNT

dissenting.

I dissent. There is nothing more basic to the subject of privacy than the nude body. “The desire to shield one’s unclothed figure from view of strangers, and particularly strangers of the opposite sex, is impelled by elementary self-respect and dignity.” York v. Story (9th Cir. 1963), 324 F.2d 450, 455, cert. denied, 376 U.S. 939, 84 S.Ct. 794, 11 L.Ed.2d 659 (1964).

In my opinion, Justice Stewart’s concurring opinion in Stanley is especially applicable to the facts of this case. In this case, as in Stanley, the Department of Revenue agents were acting under the authority of the warrant when they opened the closet door. However, they exceeded that authority when they found and seized the photographs. In no way did the warrant indicate that photographs were to be searched. The agents rummaged through the photographs for a considerable amount of time, even though the nature of the photography should have been readily apparent. The agents conducted an exploratory search which exceeded the bounds of the warrant and invaded the privacy of the Does.

A week after the search, in the presence of a local newspaper reporter, police officers openly discussed and joked about the photographs. In addition, an official from Child Protective Services told the children’s grade school principal of the alleged abuse in order to elicit his permission to interview the children. The Does have been embarrassed and humiliated, and their reputation tarnished, if not ruined.

I would reverse the District Comet and allow the case to proceed on the merits.

JUSTICE TRIEWEILER concurs in the foregoing dissent.


author: JUSTICE McDONOUGH

text:
    ELAINE S. WILDIN, Claimant and Respondent, v. CNA INSURANCE COMPANY, Insurer and Appellant.
    No. 92-305.
    Submitted on Briefs October 22, 1992.
    Decided February 4, 1993.
    50 St.Rep. 108.
    256 Mont. 354.
    846 P.2d 1022.

      For Insurer and Appellant: Todd A Hammer, Warden, Christiansen, Johnson & Berg, Kalispell.
    For Claimant and Respondent: Victor R. Halverson, Halverson, Sheehy & Plath, James G. Edmiston, L. Randall Bishop, Jarussi & Bishop, Billings.
   JUSTICE McDONOUGH

delivered the Opinion of the Court.

This is an appeal from the Workers’ Compensation Court order affirming a Department of Labor and Industry (DOLI) hearing examiner’s allocation of a settlement between the Claimant and State Farm Insurance. We affirm.

There are two issues on appeal:

1. Did the DOLI have jurisdiction over this matter?

2. Did the DOLI err in allocating the money from the settlement between the Claimant and State Farm?

Elaine Wildin (Claimant) was injured in a rear end collision with another motor vehicle while in the course and scope of her employment. CNA Insurance Company (CNA) insured Claimant’s employer, the Billings Gazette, with workers’ compensation coverage. State Farm Fire and Casualty Company (State Farm) insured the driver of the vehicle which hit Claimant. CNA paid to the Claimant medical and disability benefits of over $35,000 after accepting liability for the payments.

Shortly thereafter, Claimant filed a civil action against State Farm’s insured and contacted CNA to determine if they would join the action. Claimant’s attorney never received an answer regarding CNA’s participation in the action. In July 1989, the Claimant and State Farm agreed on a settlement of $15,000 in exchange for a full release and discharge of the claims in the third party action. Drafts and the release were forwarded. CNA would not agree with the terms of settlement and took the position that $15,000 was insufficient considering the overall amount of workers’ compensation benefits already paid.

Claimant then filed a “Petition for Division Order Determining Subrogation” to allocate the settlement funds. CNA responded to the petition stating that the settlement payment was inadequate. The DOLI concluded that it had jurisdiction over the allocation determination and that CNA should receive $6,666.67 and Claimant should receive $3,333.33 after a $5,000 deduction for attorney’s fees. CNA appealed to the Workers’ Compensation Court which affirmed the hearing examiner. CNA now appeals to the Montana Supreme Court.

Our standard of review as to findings of fact, made by the Workers’ Compensation Court, is whether they are supported by substantial evidence. McIntyre v. Glen Lake Irr. Dist. (1991), 249 Mont. 63, 67, 813 P.2d 451, 454. “[O]ur standard of review relating to conclusions of law, whether the conclusions are made by an agency, workers’ compensation court, or trial court, is whether the tribunal’s interpretation of the law is correct.” Steer Inc. v. Dept. of Revenue (1990), 245 Mont. 470, 474-475, 803 P.2d 601, 603.

The first question on appeal is whether the DOLI had jurisdiction to allocate the funds from the settlement between the Claimant and State Farm. The jurisdiction question actually hinges upon whether State Farm and the Claimant had actually settled the claim and whether the Claimant could settle the claim without CNA’s consent.

Section 39-71-412, MCA, provides that: "... the employee ... shall, in addition to the right to receive compensation under this chapter, have a right to prosecute any cause of action he may have for damages against such persons or corporations.” The statute provides that the right to bring a cause of action against the third party belongs to the claimant alone. There is no provision which mandates the insurer’s consent before the action can be brought. The “[flunction of the Supreme Court when construing a statute is simply to ascertain and declare what is in substance stated therein, and not to insert what has been omitted or to omit what has been inserted.” Mont. Dept. of Rev. v. Am. Smelting & Refining (1977), 173 Mont. 316, 324, 567 P.2d 901, 905-906. Here, CNA would have us insert language to provide that the insurer also controls the handling of the action. The right to bring an action would be meaningless without the right to also dispose of the action through settlement or other means.

Moreover, Section 39-71-414, MCA, provides for the insurer’s role in the action. It provides that the insurer is entitled to subrogation for compensation and benefits paid. If the claimant brings an action against the third party, claimant is to inform the insurer, who may decide to participate in the action. It also states that the insurer may bring an action itself if the claimant does not bring an action within a year of the date of the injury and that the insurer may enter its own settlement for subrogation. The statute provides for no more than these rights. The insured may settle an action without the consent of the insurer. If the legislature wanted the insurer to exercise such control over the insured, they would have so stated.

The question of whether the Claimant and State Farm had settled their claim before the Claimant petitioned the DOLI to allocate the proceeds of the settlement is answered in the affirmative. Subsection (5) of Section 39-71-414, MCA, states that: “[i]f the amount of compensation and other benefits payable have not been fully determined at the time the employee, ... have settled in any manner the action as provided for in this section, the division shall determine what proportion of the settlement shall be allocated under subrogation ....” (Emphasis added.) In this case, the Claimant and third party (State Farm) fulfilled this requirement before the Claimant petitioned for the allocation of the settlement funds.

Claimant’s attorney informed the CNA Claims Adjuster in charge of Claimant’s workers’ compensation case, that he had received a settlement draft for $15,000. CNA took the position that $15,000 was inadequate compensation considering the payments and benefits already paid. The Claimant thereafter filed a petition with the DOLI Workers’ Compensation Division for an allocation of the settlement funds.

As far as the Claimant and State Farm were concerned, there was total agreement on the third party settlement. This is sufficient to meet the Section 39-71-414(5), MCA, requirement that the action be “settled in any manner” before the DOLI could allocate the settlement funds.

CNA argues that the case should not have been settled because the Claimant had not arrived at maximum healing before she settled her claim with State Farm. There is no provision in Section 39-71-414, MCA, which mandates that a third party action cannot be settled until the claimant reaches maximum healing.

Subsection (5) of Section 39-71-414, MCA, contemplates that compensation and other benefits may not be completely decided when the claim is settled and the Division is asked to allocate the funds. Subsection (5) states that “[i]f the amount of compensation and other benefits payable under the Workers’ Compensation Act have not been fully determined at the time the employee,... have settled in any manner the action ..., the division shall determine what proportion of the settlement shall be allocated under subrogation.” (Emphasis added.)

This Court stated in First Interstate Bank v. Tom Sherry Tire (1988), 235 Mont. 48, 52, 764 P.2d 1287, 1289, that “where the settlement of a third-party action precedes full determination of the workers’ compensation claim, the Division is the proper forum for resolving the issue of the proper amount of subrogation allocated to the insurer.” Maximum healing does not have to occur before a claimant can settle her claim.

Finally, CNA argues that the hearing examiner and the lower court ignored principles of equity and fairness in their disposition of this case. However, this Court has stated that “[i]t has always been our rule that it is the province of courts to construe and apply the law as they find it and to maintain its integrity as it has been written by a coordinate branch of the state government. When the terms of the statute are plain, unambiguous, direct and certain, it speaks for itself and there is no room for construction" Bay v. State, Dept. of Admin. (1984), 212 Mont. 258, 265, 688 P.2d 1, 4.

AFFIRMED.

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


author: JUSTICE GRAY JUSTICE HARRISON

text:
    NORTHWEST PUBLISHING, Plaintiff and Appellant, v. MONTANA DEPARTMENT OF LABOR AND INDUSTRY, UNEMPLOYMENT INSURANCE DIVISION, CONTRIBUTIONS BUREAU, Defendant and Respondent.
    No. 91-530.
    Submitted on Briefs April 15, 1992.
    Decided February 10, 1993.
    50 St.Rep. 110.
    256 Mont. 360.
    846 P.2d 1030.

      For Plaintiff and Appellant: Dana L. Christensen, Kendra L. Kawaguchi, Murphy, Robinson, Heckathorn & Phillips, Kalispell.
    For Defendant and Respondent: Melanie A. Symons, Board of Labor Appeals, Department of Labor and Industry, Helena.
    For Amicus Curiae: Richard M. Baskett, Datsopoulous, MacDonald & Lind, Missoula.
   JUSTICE GRAY

delivered the Opinion of the Court.

Northwest Publishing (Northwest) appeals a decision of the District Court for the Eleventh Judicial District, Flathead County, affirming a decision of the Board of Labor Appeals. We affirm.

The issue is whether the District Court erred in affirming the decision of the Board of Labor Appeals that traveling salespeople under contract with Northwest are not “independent contractors” as defined by Section 39-51-201(14), MCA.

Northwest is a sole proprietorship which prints and publishes vacation and travel guides in Kalispell, Montana. Its sales representatives travel throughout the northwestern United States and Canada soliciting the purchase of advertisements to appear in Northwest’s magazines. These salespeople operate under an “Independent Contractor Agreement” and receive a set commission rate for all advertisements sold. They are provided lodging, sales forms, reporting forms, a company telephone credit card number, and company gas credit cards; one salesperson occasionally was provided a car owned by Northwest’s owner for use on sales trips.

In January 1990, the Unemployment Insurance Division of the Montana Department of Labor and Industry determined that commission sales representatives working for Northwest were employees of Northwest for purposes of unemployment insurance taxation. Northwest unsuccessfully appealed that determination to the Department of Labor and Industry and the Montana Board of Labor Appeals, arguing that the salespeople are independent contractors. It then appealed to the Eleventh Judicial District Court, which affirmed the decision of the Board of Labor Appeals. This appeal followed.

Did the District Court err in affirming the decision of the Board of Labor Appeals that traveling salespeople under contract with Northwest are not “independent contractors” as defined by Section 39-51-201(14), MCA?

Under Section 39-51-2410(5), MCA, factual findings of the Board are conclusive if they are supported by the evidence and there has been no fraud, and the jurisdiction of a reviewing court is confined to questions of law. “Supported by the evidence” means supported by substantial evidence, which is “something more than a scintilla of evidence, but may be less than a preponderance of the evidence.” Gypsy Highview Gathering System v. Stokes (1986), 221 Mont. 11, 15, 716 P.2d 620, 623.

Once disputes about the underlying facts are resolved, the issue of whether salespeople are independent contractors or employees is a question of law. Carlson v. Cain (1983), 204 Mont. 311, 317, 664 P.2d 913, 916; appeal after remand (1985), 216 Mont. 129, 700 P.2d 607. Our standard of review of a question of law is whether the conclusion is correct. Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474, 803 P2d 601, 603.

Northwest specifically challenges the finding that “[t]he two commission sales persons testifying at the hearing did not have an advertising sales business which they owned or operated either before or after association with [Northwest].” Northwest points out that one of the salespeople testified that he had published a paper, for which he sold advertising, prior to working for Northwest. However, the brief reference to the paper indicates that the business in which the person was engaged was publishing a paper, not selling advertising. The other salesperson who testified stated that she worked in sales for another employer after working for Northwest. Owning or operating a sales business is different from working in sales for someone else. We conclude that the finding that the salespeople did not own or operate their own sales businesses was supported by substantial evidence. Therefore, the finding is conclusive under Section 39-51-2410(5), MCA.

Northwest’s chief arguments relate to the definition of an “independent contractor” set forth at Section 39-51-201(14), MCA, and commonly called the “AB test.” As stated above, the issue of whether the salespeople are independent contractors or employees is an issue of law.

Section 39-51-201(14), MCA, provides:

“Independent contractor” means an individual who renders service in the course of an occupation and:
(a) has been and will continue to be free from control or direction over the performance of the services, both under his contract and in fact; and
(b) is engaged in an independently established trade, occupation, profession, or business.

Because the conjunctive “and” is used in the definition of “independent contractor,” the absence of either the “A” or the “B” part of the test results in a conclusion of employment. Thus, Northwest must establish both “A” and “B” in order to prevail, as a matter of law, on its contention that the salespeople are independent contractors. Because we determine that the Board did not err in concluding that Northwest failed to establish the “B” part of the test, we need not address whether the “A” (control) component was met.

Quoting the definition of a “profession” from Black’s Law Dictionary, Northwest argues that sales is an independently established profession within the purview of Section 39-51-201(14)(b), MCA. It cites no legal authority for such an assertion, and we have discovered none. Northwest claims that the salespeople’s belief that sales is an independent profession and that the ability to make a sale is an independent skill, together with the fact that one of the salespeople was re-employed as a salesperson after leaving Northwest, are sufficient to establish that its salespeople are “engaged in an independently established trade, occupation, profession, or business” under Section 39-51-201(14)(b), MCA.

Notwithstanding the trend in recent years for people in many occupations to prefer the term “profession” to “occupation,” Northwest’s argument boils down to an assertion that because sales is a recognized occupation or profession involving marketable skills, it has met the “B” part of the independent contractor test. Accepting such a premise would equate the “B” test of being engaged in an independently established business or occupation with merely rendering services in the course of an occupation, as is already separately required in the first clause of Section 39-51-201(14), MCA. Such an interpretation would render the “B” requirement a nullity.

We have previously rejected the notion that possessing a saleable skill was the equivalent of being engaged in an independently established business, trade or occupation. In our leading case on this subject, Standard Chem. Mfg. Co. v. Employment Sec. (1980), 185 Mont. 241, 605 P.2d 610, Standard Chemical asserted that its commission salespeople were independent contractors rather than employees. With specific regard to the “independently established business” criterion and based on its finding that the salespeople had a saleable skill, the district court determined that they were independent contractors. We reversed, holding that the salespeople were employees. Standard Chem., 605 P.2d at 616.

Standard Chem. was the first case in which we interpreted the “independently established business” component of the statutory independent contractor test. We surveyed both the case law and statutes from our sister states and set forth much of that law before turning our attention to the case before us and the findings of the district court therein. Our holding that the salespeople were employees was premised on the following specifics: (1) no “business” existed independently and apart from the salespeople’s relationship with Standard Chemical; (2) the salespeople were dependent on Standard Chemical for their employment; and (3) should the relationship with Standard Chemical terminate, the “business” would terminate as well. Id. 605 P.2d at 615-16.

The record before us is nearly devoid of evidence in support of Northwest’s position with regard to these fundamental questions of whether its salespeople were engaged in an independently established business. Indeed, the fact that one of the salespeople subsequently was re-employed as a salesperson by a different entity supports our conclusion that these salespeople are employees, not independent contractors. When that person’s relationship with Northwest terminated, her “business” terminated as well, until such time as she could find another job as a salesperson.

We did consider additional criteria in Standard Chem. Specifically, we determined that the salespeople’s right to terminate their employment and to do so without liability for a peremptory termination, as well as their lack of authority to hire subordinates, indicated employment — rather than independent contractor — status. Id. 605 P.2d at 616. Similarly here, Northwest’s salespeople retained the right to terminate their employment and to do so without liability. Of the factors we specifically applied in Standard Chem. relating to the “independently established business” question, the only one which might indicate independent contractor status here is the ability of Northwest’s salespeople to hire subordinates if they choose to do so. The existence of this one factor is insufficient to mandate a conclusion that the “B” part of the independent contractor test is met here.

Northwest contends that both Standard Chem. and Zimmer-Jackson Assoc. v. Dept. of Labor (1988), 231 Mont. 357, 752 P.2d 1095, are distinguishable from the case before us. We note that in ZimmerJackson, we also concluded that a sales associate was an employee rather than an independent contractor. There, we applied five criteria in reaching our determination; employee status was indicated by each. Again, as in Standard Chem., one or two of those criteria might indicate independent contractor status here. None overcomes the basic and very fundamental fact, however, that Northwest’s salespeople were not “engaged in an independently established business” of their own. Nor does anything in Zimmer-Jackson suggest that those five criteria constitute a “bright fine test” for purposes of Section 39-51-201(14)(b), MCA.

Northwest’s main argument with regard to both Standard Chem. and Zimmer-Jackson is that our decisions there hinged on the fact that the “business” in which the “employers” were engaged — sales — was inseparable from the business or occupation in which the salespeople were engaged. However, the fact that the entities in both cases were involved, at least in part, in sales did not form the basis for our holdings relating to the “independently established business” prong of the independent contractor test. In Standard Chem., the fact that the employer was a Nebraska corporation engaged in the manufacturing, distributing and wholesaling of livestock nutritional products merely was noted in our recitation of the facts of the case. Standard Chem., 605 P.2d at 611. And while we did address that matter in Zimmer-Jackson, our discussion related to the existence of what was then the “B” part of an “ABC” test: namely, whether the service being performed is “either outside the usual course of the business for which such service is performed or that such service is performed outside of all the places of business of the enterprise ....” Section 39-51-203(4), MCA (1983); Zimmer-Jackson, 752 P.2d at 1099. As we noted in Zimmer-Jackson, that prong of the earlier test was deleted by the 1987 legislature. Id.

Therefore, as we did in Standard Chem. on a similar record, so we conclude here that the “B” portion of the “AB” independent contractor test contained in Section 39-51-201(14), MCA, was not met. We hold that the Board did not err in concluding, and the District Court did not err in affirming, that Northwest’s salespeople are employees for purposes of unemployment insurance taxation.

Northwest also argues that the decision of a hearing examiner in a case involving a business known as Canyon Publications effectively overrules the determination of employee status in this case. The Canyon Publications case apparently is now on appeal before the Board of Labor Appeals and Canyon Publications was permitted to file an amicus brief in this case. Whatever the status or ultimate outcome of the Canyon Publications case, this Court cannot consider that matter unless and until it is properly before us.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES McDONOUGH, WEBER, HUNT and DISTRICT COURT JUDGE SHERLOCK sitting for JUSTICE TRIEWEILER concur.

JUSTICE HARRISON

dissenting.

As noted in the majority’s opinion, the leading case on this subject is Standard Chem. Mfg. Co. v. Employment Sec. (1980), 185 Mont. 241, 605 P.2d 610.1 would have difficulty disagreeing with Standard Chem. in view of the fact that I am the author of that opinion. However, the record here discloses a fact situation which, in my opinion, is different than that set forth in Standard Chem. Further, the fact situation herein is different enough that I believe the Unemployment Insurance Division of the Montana Department of Labor and Industry is hunting for contributions rather than attempting to be perfectly fair to the independent contractors in this matter, the traveling salespeople under contract with Northwest Publishing. For that reason, I would reverse.


author: JUSTICE WEBER

text:
    JAMES D. KING, Plaintiff and Appellant, v. SPECIAL RESOURCE MANAGEMENT, INC., ENTECH, INC., and THE MONTANA POWER COMPANY, Defendants and Respondents.
    No. 91-492.
    Submitted September 4, 1992.
    Decided February 11, 1993.
    50 St.Rep. 117.
    256 Mont. 367.
    846 P.2d 1038.

      For Plaintiff and Appellant: Stephen C. Pohl argued, Charles P. Bowen, Bozeman.
    For Defendants and Respondents: Patrick T. Fleming argued, Robert T. O’Leary, Montana Power Company, Butte.
   JUSTICE WEBER

delivered the Opinion of the Court.

Plaintiff, James D. King, brought an action for wrongful discharge from employment based on the implied covenant of good faith and fair dealing against defendants Special Resource Management, Inc., Entech, Inc., and Montana Power Company in the Second Judicial District Court, Silver Bow County, Montana. The case was tried before a jury. After the close of the evidence, the District Court dismissed the action against defendants Entech, Inc. and Montana Power Company. The jury found in favor of defendant Special Resource Management, Inc. Plaintiff appeals. We reverse the jury verdict in favor of Special Resource Management, Inc. and affirm the judgments in favor of Montana Power Company and Entech, Inc.

The issues are restated as follows:

1. Did the District Court commit reversible error by granting eight peremptory challenges to the defendants Montana Power Company and its two subsidiary corporations based on a diversity of interests between defendants?

2. Did the District Court commit reversible error by granting defendants’ motion in limine prohibiting some expert testimony, and by refusing to allow plaintiff’s personnel expert to present opinion testimony without further foundation?

3. Is King entitled to a new trial against Entech, Inc. and Montana Power Company?

James D. King (King) initially began working for Montana Power Company (MPC) in June of 1980 as a Cost and Schedule Engineer for the Colstrip 3 and 4 projects, and later became a Cost and Schedule Supervisor. Prior to his employment with MPC, Mr. King worked as a Construction Accountant on a large power plant construction project in Michigan, a position which required him to perform project-related accounting functions. When the Colstrip project neared completion, Mr. King transferred to Special Resource Management, Inc. (SRM) as a Supervisor of Accounting and Administration. He worked in that capacity from March 31, 1986, until his termination effective July 17,1987, as part of a reduction in force at SRM. Mr. King’s claim relating to that termination arose prior to the enactment of the Wrongful Discharge From Employment Act and, therefore, proceeded as a claim for breach of the implied covenant of good faith and fair dealing.

SRM is a wholly-owned subsidiary of Entech, Inc., which is a wholly-owned subsidiary of the Montana Power Company (MPC). Over Mr. King’s objection, the District Court granted eight peremptory challenges to these three defendants, based on a diversity of interests between SRM and the other two defendants, MPC and Entech.

During the trial, the District Court directed verdicts for MPC and Entech. The jury found that defendant SRM did not breach the implied covenant of good faith and fair dealing. Mr. King moved for a new trial after the court entered judgment in favor of all defendants. The District Court denied this motion. King appeals the judgment entered by the District Court against all three defendants. Of the three defendants, only SRM filed a respondent’s brief. After King noted this in his reply brief, MPC and Entech filed a supplemental brief claiming that King had no legal basis for asserting a right to a new trial against them.

I.

Did the District Court commit reversible error by granting eight peremptory challenges to the defendants Montana Power Company and its two subsidiary corporations based on a diversity of interests?

Mr. King contends that the three co-defendants should not have been allowed more than four peremptory challenges unless they could demonstrate “hostility” between themselves. He argues that the interests of MPC and Entech were not hostile to those of SRM and that the District Court incorrectly based the decision to grant additional peremptory challenges on a determination of “diversity’ rather than “hostility.” King further contends that this constitutes reversible error and, therefore, a new trial must be granted. The defendants contend that there was indeed hostility between them and that the District Court correctly allowed them eight peremptory challenges. Alternatively, SRM argues that even if the defendants were not hostile, Montana law requires King to demonstrate prejudice in order to procure a new trial and King cannot show that he was prejudiced. We will first address the question of prejudice.

The side with the greater number of peremptory challenges clearly has a tactical advantage created by its ability to eliminate potentially unfavorable jurors without cause. Section 25-7-224(1), MCA, provides that “[e]ach party is entitled to four peremptory challenges ....” The words “each party’ have been interpreted to mean “each side,” unless the co-defendants are hostile to one another. Leary v. Kelly Pipe Co. (1976), 169 Mont. 511, 515, 549 P.2d 813, 816. In Leary, this Court stated that a party who claims that he was prejudiced by a grant of extra peremptory challenges to his opponents who in fact are not hostile must also show that he was prejudiced by that action. Leary, 549 P.2d at 816. This Court adopted a three-part test for prejudice in such circumstances: (1) the party must have exhausted his peremptory challenges, (2) he must have suffered material injury from that action by the court, and (3) as a result of that action, one or more objectionable jurors sat on the case. Leary, 549 P.2d at 816.

Later, in Hunsaker v. Bozeman Deaconess Found. (1978), 179 Mont. 305, 588 P.2d 493, we discussed the difficulty of proving prejudice when our attention is focused on juror conduct. Because difficulties encountered during appellate review had become magnified by the usual procedures used by most trial courts at the time we decided Hunsaker, we offered therein our suggestions for procedural changes which would enable the trial coruts to make informed decisions based on thorough briefings by the parties, thereby making it possible to review the accuracy of the ruling at the time it was made. We stated:

The District Courts should seriously consider the use of the pretrial conference as the best procedure to be used in resolving questions such as the number of peremptory challenges to be allowed each side. If for some rare reason the District Court holds no pretrial conference, the question of peremptory challenges should be raised by appropriate written motion filed before the commencement of jury selection, and it should set forth all facts and references tending to support his claim of hostility. In any case, the opposing party or parties should be given adequate time to respond to the claims of hostility.
The trial court should, as a bare minimum, rule on the peremptory challenge issue before the questioning of jurors begins. To afford a basis for review, it should expressly set forth in the record the reasons for its ruling and the facts on which it relies in making its decision.

Hunsaker, 588 P.2d at 501.

This procedure eliminates the need for us to review the entire record using a hindsight approach to determine whether the parties were in fact “hostile” during the course of the trial. Thus, our review excludes materials beyond the point at which the ruling was made, including proof of actual prejudice, and we examine only the information available to the district court prior to its ruling.

Although we encouraged district courts to use these procedures in Hunsaker, the record therein did not include sufficient information to allow this Court to review the basis and rationale for the district court’s ruling; therefore, we decided that case using the Leary three-prong test. Hunsaker, 588 P.2d at 500. This Court’s decisions after Hunsaker have applied the Leary test for prejudice only where the record was insufficient for review. See, e.g., Gee v. Egbert (1984), 209 Mont. 1, 679 P.2d 1194; and Adams v. Cheney (1983), 203 Mont. 187, 661 P.2d 434. When the District Court followed the recommended pretrial procedures or the record was otherwise adequate to determine whether the District Court properly considered appropriate factors, we have focused our review on pretrial information that was available at the time of the court’s ruling on the number of peremptory challenges. See Williams v. Rigler (1988), 234 Mont. 161, 761 P.2d 833; and Lauman v. Lee (1981), 192 Mont. 84, 626 P.2d 830.

The Leary test requires adversely affected parties to show they were actually prejudiced by a grant of additional peremptory challenges to the opposing party. This places an almost impossible burden on the objecting party. Moreover, when we focus our review on the actual conduct of a juror, we ignore the correctness of the trial court’s decision and that decision becomes virtually unreviewable. Hunsaker, 588 P.2d at 499. As noted by Justice Shea in that opinion, “our attention is focused on the conduct of the jury, which in most cases we are in no position to determine.”

It is the policy of the law to look with disfavor on any attempt to invade the jury’s internal decisionmaking processes in order to impeach verdicts, except in rare circumstances. Blades v. DaFoe (Colo. 1985), 704 P.2d 317, 322 (citing Kentucky Farm Bureau Mut. Ins. Co. v. Cook (Ky. 1979), 590 S.W.2d 875). In Kentucky Farm Bureau, the court stated:

It may be that peremptory challenges should be abolished in civil cases and only challenges for cause allowed. We are informed this is the present English practice. As long as they are retained as part of the trial process, however, we believe that their proper allocation between litigants is a substantial right which so pervades the process that its erroneous application requires reversal as a matter of law if the issue is properly preserved by the adversely affected litigant.

Kentucky Farm Bureau Mut. Ins., 590 S.W.2d at 877. See also, Thompson v. Presbyterian Hosp., Inc. (Okla. 1982), 652 P.2d 260 (grant of additional peremptory challenges in absence of “serious dispute” is prejudicial as a matter of law). While these jurisdictions are by no means the only ones which find prejudice as a matter of law for improper allocation of peremptory challenges, some courts require that actual prejudice be shown before a new trial is granted. See, e.g., Electric Serv. Co. of Duluth v. Lakehead Elec. Co. (Minn. 1971), 189 N.W.2d 489.

If we require a showing of prejudice as in Leary, we cannot evaluate the effect of an improper grant of peremptory challenges without invading the internal processes of a jury. We also should not disregard the advantages bestowed upon one side by having additional peremptory challenges granted to them. We previously modified Leary to the extent that prejudice need not be demonstrated when a trial court follows the guidelines set forth in Hunsaker. See Williams, 761 P.2d 833. We now expressly overrule Leary v. Kelly Pipe Co. to the extent it requires a showing of prejudice to reverse a jury verdict for an incorrect grant of peremptory challenges to one side.

Having concluded that Leary is an improper standard, we now restate the rule to be applied in the future: Additional peremptory challenges are granted to multiple parties on one side only if they are hostile to one another. The trial court determines hostility prior to the beginning of voir dire and bases its decision only on the facts presented to it before its ruling. Whether or not the pretrial procedures were followed prior to the determination of hostility, if an appellate review determines that peremptory challenges were improperly granted, prejudice is presumed as a matter of law.

The parties seeking additional peremptory challenges must request them prior to trial. In the rare instance when the District Court holds no pretrial conference, the question of peremptory challenges should be raised by appropriate written motion filed prior to voir dire, setting forth all facts and references tending to support its claim of hostility. The trial court should rule on the peremptory challenge issue before voir dire begins. If a pretrial order is used, the District Court is required to include its decision on the number of peremptory challenges in the pretrial order. See Rule 5(c), Unif. Dist. Court Rules. To afford a basis for review, the trial court should expressly set forth in the record the reasons for its ruling and the facts on which it relied in making its decision.

The district courts have no discretion in granting additional peremptory challenges. Multiple parties on one side are either hostile or they are not hostile. A trial court correctly grants additional peremptory challenges to one side only if there are multiple defendants or plaintiffs who are “hostile” to one another. It is clear that we must look to the factual record to determine whether there is a stated rationale for the District Court’s decision and a sound basis for the grant or refusal of additional peremptory challenges.

Our standard of review for a district court’s conclusions of law is whether they correctly apply the proper law. Steer, Inc. v. Dept. of Revenue (1990), 245 Mont. 470, 803 P.2d 601. The record in this case indicates that the District Court heard arguments from both sides and reviewed the law before ruling on the matter prior to jury questioning. The transcript provides:

THE COURT: ... In the meantime, the Court has had a chance to look at some of the law with regard to the preemptory [sic] challenges, and I’m not sure that the record is complete. I’d like to make a complete record, and the plaintiff’s Counsel argue their position again.
The Court has looked at the Hunsaker case, and also the Adams vs. Cheney case, and I would like to follow the guidelines of those cases if we can ....
The Court has considered the various positions of the parties and it’s a difficult case when you don’t know what exactly the proof is going to be; but the Court thinks that there is a diversity of interest between Montana Power and Entech as opposed to SRM, and the issue was raised I believe in the motion for summary judgment and the facts in support in that motion. The Court denied the motion, but found that there was [sic] genuine issues in that case as to the motion for summary judgment, which I think also goes to the positions that may be taken during the course of the trial.
And the Court will find a diversity sufficient to allow the extra preemptory [sic] challenges ....

The District Corut allowed extra peremptory challenges to the co-defendants in this case based on a “diversity of interests.” SRM contends that Kudrna v. Comet Corp. (1977), 175 Mont. 29, 572 P.2d 183, articulated a rule which allows additional peremptory challenges in three distinct situations: (1) where the interests of multiple parties are “diverse;” (2) where the defenses of the multiple parties are “different;” or (3) where the defenses of the multiple parties are “hostile.” This language is excerpted from a direct quote from an A.L.R. annotation set forth in Kudrna. Kudrna, 572 P.2d at 186-87. A careful reading of Kudrna distinguishes the law in Montana:

In a recent decision, Leary v. Kelly Pipe Co., 169 Mont. 511, 549 P.2d 813, 816, (1976), this Court stated:
* * * Mullery stands for the proposition that under our jury challenge statute * * * the words “each party” in reference to the permitted four peremptory challenges means “each side” unless the positions of the codefendants are hostile to each other. The opinion suggests that hostility between nominal defendants may be shown “by pleading, representation, or evidence.”

Kudrna, 572 P.2d at 186.

This Court has consistently held that co-defendants are entitled to excess peremptory challenges only where their positions are “hostile” to each other. See Williams, 761 P.2d 833; Gee, 679 P.2d 1194; Lauman, 626 P.2d 830; Hunsaker, 588 P.2d 493; Leary, 549 P.2d 813; and Mullery v. Great Northern Ry Co. (1915), 50 Mont. 408, 148 P. 323. Our most recent case involving a grant of additional peremptory challenges to one side reiterates the correct and relevant law:

For this Court to uphold an uneven grant of peremptory challenges, we must be convinced that the District Court concluded from the pleadings, representations, or evidence that hostility existed and that the court set forth the reasons for its ruling.

Williams, 761 P.2d at 835 (citing Hunsaker v. Bozeman Deaconess Foundation (1978), 179 Mont. 305, 313, 588 P.2d 493, 499). The District Court here incorrectly applied the law. The interests of multiple parties on one side must be “hostile” to one another. Although the District Court based its decision on “diversity,” we will examine the record to ascertain whether the defendants were indeed “hostile” based on the information available to the court at the time of its ruling on peremptory challenges.

SRM contends that hostility did exist between defendants because MPC and Entech took the position that any obligations that arose as a result of King’s employment relationship were the obligations of SRM only. They denied that King was their employee and that they played any part in his termination. Although SRM maintains that MPC and Entech were hostile to SRM, it admits that SRM was not hostile to MPC and Entech. SRM further argues that the same two attorneys could ethically represent all defendants, even with hostile interests present. King argues that all three defendants “enjoy a familial relationship and an identity of interest which cannot be denied.”

Hostile is defined as: “having the character of an enemy; standing in the relation of an enemy. Feeling or displaying enmity or antagonism such as a hostile witness.” Black’s Law Dictionary 879 (6th ed. 1990). In all prior cases in which this Court has addressed “hostility,” the co-defendants were unrelated individuals or corporations accused of separate and distinct wrongful acts, neither of which is the case here. We noted in Hunsaker that no specific test for “hostility” has been articulated.

This Court has never set forth any rules as to what co-defendants must present to the trial court to prove they are “hostile” to each other. The closest we have come is we have indicated in Mullery and Leary that “hostility” can be shown by the “pleadings, representations, or evidence.”

Hunsaker, 588 P.2d at 499.

Although we have not pronounced a test for the facts constituting “hostility,” our prior decisions are most helpful. In Kudrna, we found hostile interests where there was no identity of interest, separate acts of negligence were charged, each party presented a separate defense and each defendant blamed the other’s negligence as the cause of the collision. Kudrna, 572 P.2d at 187. This Court said, “These defendants had interests and defenses antagonistic in fact. The District Court recognized this hostility and properly allowed each defendant four peremptory challenges.” Kudrna, 572 P.2d at 187 (emphasis supplied). In Mullery, this Court found no hostility where defendants filed a joint answer with common defenses, they were represented by the same attorneys, and no conflict of interest or any issue of any sort was disclosed by pleading, representation, or evidence. Mullery, 148 P. at 326. In Williams, there was hostility where the claims against co-defendants were involuntarily consolidated and one set of defendant’s claimed they would assert an indemnification claim against the other. Williams, 761 P.2d at 835. In Hunsaker, the following factors were relevant: (1) the defense theories of the hospital and physicians meshed although they had separate representation, (2) the co-defendants did not blame one another or assert negligence on the part of the other, (3) jury instructions were synchronized and neither objected to any of the other’s offered instructions. The Court noted that each defendant had its own interests to protect in that each could have suffered an adverse jury verdict, but there was no showing that their interests were hostile to each other. Hunsaker, 588 P.2d 500-01.

Whether hostility is present is best addressed on a case by case basis. In this case, King’s complaint asserted identical claims against all three defendants. Each defendant filed identical answers to King’s complaint. These were signed by the same MPC staff attorney, Patrick T. Fleming, an employee of MPC. No cross-claims or claims for indemnification were filed by any individual co-defendant and no allegations were made that either of the other co-defendants were responsible for King’s termination. Throughout the pretrial process, defendants filed consolidated motions and briefs. They consolidated their responses to discovery and their list of witnesses, exhibits and contentions in the pretrial order. All three defendants were represented by the same two MPC attorneys, who asserted their common representation and vigorously defended SRM’s actions. All three defendants acted in concert, with no hostility exhibited by their efforts to prevent a verdict against SRM. Their consolidated position was that there was no breach of the covenant of good faith and fair dealing, but if the court found one, it was SRM’s breach and not that of MPC and Entech.

Applying the above rule in the present case, it is clear that we need only consider the pleadings, representations and evidence presented to the District Court at the time it made its ruling. We conclude that although the three co-defendants asserted allied positions with diversified financial interests, their differences do not reach the level of hostility required for a grant of four additional peremptory challenges.

We hold that the grant of additional peremptory challenges to allied co-defendants constitutes reversible error under the circumstances of this case where no hostility was demonstrated between the co-defendants prior to voir dire.

II.

Did the District Court commit reversible error by granting defendants’ motion in limine prohibiting some expert testimony, and by refusing to allow plaintiff’s personnel expert to present opinion testimony without further foundation?

Mr. King contends that the District Comb made numerous errors which resulted in inappropriately restricting the opinion testimony of his expert, Alan Brown. Because our decision to reverse the District Court based upon an improper grant of peremptory challenges will result in a new trial, there is no reason to address this issue at this time.

III.

Is King entitled to a new trial against Entech, Inc. and Montana Power Company?

At the close of the evidence during the trial, the District Court directed verdicts for Entech and MPC because SRM had failed to present evidence sufficient to pierce SRM’s corporate veil. SRM was the only defendant to file a respondent’s brief in this appeal. On the cover of its Appeal Brief, SRM removed the names of the other defendants from the caption, believing that King had no right to a new trial against them because Kang did not assert that the District Court erred by granting MPC and Entech directed verdicts. MPC and Entech responded to King’s Reply Brief which argues that a new trial will be granted as to all defendants if the District Court’s decision is reversed on the issues raised. They filed a Supplemental Reply Brief which raised the issue whether King has any legal basis for asserting a right to a new trial against Entech and MPC.

MPC and Entech contend that King cannot have a new trial against either of them because King did not assert that the District Court erred in granting MPC and Entech directed verdicts. We disagree. King’s Notice of Appeal preserves his right to appeal the directed verdicts against MPC and Entech because he has appealed the judgment entered by the District Court (the directed verdicts) against both MPC and Entech.

The District Court concluded that the corporate veil could not be pierced and granted directed verdicts for MPC and Entech. We will not reverse this conclusion unless it is an incorrect interpretation of the law. Steer, Inc., 803 P.2d 601. After reviewing the record, we conclude that the District Court did not err by directing these verdicts as King failed to present evidence to support piercing SRM’s corporate veil.

Nonetheless, King claims that all three defendants have an interest in the outcome of these proceedings because the effect of a reversal is to make the judgment “void as if never rendered.” He contends that when a new trial is granted the parties are all returned to the position they occupied before the trial and, therefore, he will be entitled to a new trial against all three defendants if the District Court’s judgment is reversed.

King contends that the holding of O’Brien v. Great Northern R.R. Co. (1966), 148 Mont. 429, 421 P.2d 710, applies to this case. In O’Brien, we said that to reverse a judgment makes it void as if never rendered and returns the parties to the position they occupied before the trial if a new trial is granted. O’Brien, 421 P.2d at 716. This case is distinguishable from the facts in O’Brien and the cases it relied on because multiple defendants are involved who were granted relief based on different rules of law. MPC and Entech were released by directed verdicts while SRM was relieved from liability by the jury’s verdict.

Section 25-11-102, MCA, provides:

Grounds for new trial. The former verdict or other decision may be vacated and a new trial granted on the application of the party aggrieved for any of the following causes materially affecting the substantial rights of such party:
(1) irregularity in the proceedings of the court, jury, or adverse party or any order of the court or abuse of discretion by which either party was prevented from having a fair trial...
Section 25-11-102(1), MCA.

The justification for allowing King a new trial in this case is based solely upon an irregularity in jury selection. That justification does not apply to MPC and Entech because the District Court granted directed verdicts to them both at the close of the evidence and prior to the verdict of the jury. We are reversing the jury verdict releasing SRM from liability because the composition of the jury resulting from the District Court’s incorrect grant of excess peremptory challenges to non-hostile defendants may have materially affected King’s rights. That rationale does not apply to MPC and Entech because the issue of their liability did not reach the jury. We conclude that King is not entitled to relitigate the issues against MPC and Entech.

We hold that King is not entitled to a new trial against Entech, Inc. and Montana Power Company.

The judgment in favor of Special Resource Management, Inc. is reversed and King is granted a new trial in accordance with this opinion. The judgments favoring Montana Power Company and En-tech, Inc. are affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES HARRISON, TRIEWEILER, HUNT, McDONOUGH and DISTRICT JUDGE WARNER sitting for JUSTICE GRAY concur.


text:
    STATE OF MONTANA, Plaintiff and Respondent v. KIM LAVAR COURCHENE, Defendant and Appellant.
    No. 91-469.
    Submitted on Briefs September 10, 1992.
    Decided December 8, 1992.
    49 St.Rep. 1035.
    256 Mont. 381.
    847 P.2d 271.

      For Defendant and Appellant: Wendy Holton, Helena.
    For Plaintiff and Respondent: Micheál Wellenstein, Asst. Attorney General, Helena, and Gerald Navratil, Dawson County Attorney, Glendive.
   JUSTICE WEBER

delivered the Opinion of the Court.

This is an appeal from a jury verdict and sentence in the Seventh Judicial District Court, Richland County, finding defendant guilty of felony theft and sentencing him to four years suspended sentence in the Montana State Prison and assigning restitution in the amount of $980.00. We affirm.

We address the following issues on appeal:

1. Did the District Court abuse its discretion by accepting into evidence Ram Courchene’s mug shot as well as testimony identifying it as such?
2. Did the District Court err in permitting a conversation in front of the jury concerning “other acts”?
3. Did the District Court abuse its discretion in permitting evidence of a photo line-up when the State used only a single photograph of Courchene for identification purposes?
4. Did the District Court err in failing to instruct the jury on the element of voluntariness?
5. Did the District Court err in instructing the jury on alternative definitions of the term “deception”?
6. Can defendant reserve his claim of ineffective assistance of counsel until after this appeal?

This case involves the theft of a video camcorder rented from the Path store in Sidney, Montana on March 20 or 21,1990. At that time, a young man came into the Path store and sought to rent the camcorder for the purposes of video-taping a wedding. Since owner Tim Knaff did not know the man, he asked for identification. The customer provided an expired Utah driver’s license issued to Kim Courchene, and later signed the invoice with that name. The address listed by the customer was a Sidney address which subsequently proved to be false. Following the rental of the camcorder, a store employee saw the customer get into a dark green Dodge or Ford four-door car with North Dakota license plates. The camcorder was never returned to the store.

Subsequent investigation revealed that a Kim Courchene lived in North Dakota, at one time with his mother Doris. No vehicle such as that described by the store employee was owned by either Courchene. Further investigation revealed that Kim Courchene had been issued a Utah driver’s license in 1981; this expired in 1985. A duplicate of this driver’s license was issued in 1982 because the original had been lost.

On April 19, 1990, Kim Courchene (Courchene) was charged by information in Richland County with the offense of theft. He was tried by a jury on May 5 and 6, 1991, and was found guilty of the offense charged. On July 22,1991, the judgment and sentence were entered. Courchene was sentenced to a prison term of four years which were suspended. Courchene is required to comply with standard conditions of probation and in addition, to perform 100 hours of community service and pay restitution in the amount of $980 within a period of 18 months.

Courchene filed a timely notice of appeal and a motion for stay of execution of judgment and a motion to withdraw as attorney on July 25, 1991. On August 5, 1991, the motion for stay was granted. The motion to withdraw as attorney was renewed in this Court on September 26,1991, and the motion was remanded to the District Court for a ruling on October 2, 1991. On October 21, 1991, the District Court appointed new counsel for the purpose of pursuing this appeal.

I.

Did the District Court abuse its discretion by accepting into evidence Kim Courchene’s mug shot as well as testimony identifying it as such?

Courchene contends that introduction into evidence of his mug shot was prejudicial to his case as it indicated to the jury that he had a past criminal record. Further, according to Courchene, this error is so egregious that his conviction should be reversed by this Court. The State argues that Courchene failed to object to this at trial and cannot now raise the issue on appeal.

Specific objections must be made to portions of testimony deemed inappropriate. State v. Anderson (1984), 211 Mont. 272, 686 P.2d 193. Courchene did not make a specific objection at trial to any testimony revolving around mug shots and his subsequent prejudice; he is barred from objecting now. Section 46-20-104, MCA, procedurally bars review of alleged errors not objected to at trial:

(2) Upon appeal from a judgment, the court may review the verdict or decision and any alleged error objected to which involves the merits or necessarily affects the judgment. Failure to make a timely objection during trial constitutes a waiver of the objection except as provided in 46-20-701(2).

Section 46-20-701(2), MCA, states that unless an objection is made “[a]ny error, defect, irregularity, or variance which does not affect substantial rights shall be disregarded.” Courchene has not proved that his substantial rights have been prejudiced. Nor did Courchene argue this at trial. Because he did not object at trial, Courchene has waived his right to an appellate review. State v. Kao (1990), 245 Mont. 263, 800 P.2d 714.

We conclude that review of the mug shots is not allowed under the foregoing statute and authority. Nonetheless we review the evidence with regard to the mug shots in order to explain that even under a “plain error” theory, the facts in this case cannot warrant a reversal. The plain error doctrine which we invoke to review this evidence provides a remedy to prevent manifest injustice, even when a proper objection has not been made to the trial court. State v. Voegele (1990), 243 Mont. 222, 793 P.2d 832.

It is a general rule that “mug shots” of an accused will be allowed into evidence, if they are not unduly prejudicial and have substantial independent probative value. 23 C.J.S., Criminal Law Section 1042 (1989). This type of photograph is admissible when identification of the accused as the criminal perpetrator is involved. Williams v. State (Ind. 1985), 480 N.E.2d 953. Because a police photograph or “mug shot” of defendant may be indicative of a prior criminal history, its admission at trial may be prejudicial to him. People v. Thatcher (Colo. 1981), 638 P.2d 760.

These types of photographs are not per se inadmissable; the court has great discretion in using them for identification purposes, but only if the prosecution has disguised the photos by removing any law enforcement information that may be on the photo. 23 C.J.S., Criminal Law Section 1043 (1989). Here, the police had taped over any justice system information that was printed on the card. The mug shots of Courchene that were used were used for identification purposes. Even so, at trial neither eye-witness could absolutely identify Courchene in person from the photos.

Despite this lack of identification, Courchene argues that the use of the pictures prejudiced him to the jury. Courchene relies on a leading case in this area, U.S. v. Harrington (2d Cir. 1973), 490 F.2d 487. Courchene argues Harrington’s applicability and precedence for reversing his conviction. The reversal of the Harrington Court was based in part upon the fact that the defendant did not take the stand at trial.

Such was also the case in Barnes v. U.S. (D.C. App. 1966), 365 F.2d 509, another case relied upon by Courchene. In associating mug shots of the defendant with past criminal acts, the Barnes Court stated:

It is well-settled law that the criminal record of a defendant may not be introduced into evidence at trial unless the defendant takes the stand....

Barnes, 365 F.2d at 510.

Courchene took the stand. He testified to being “nailed for driving under the influence.” At another time he testified that police “hauled me to jail and they took my license from me.” The testimony was provided on direct examination on questioning by his own counsel. Defendant Courchene’s own testimony established that he had engaged in conduct which could have resulted in mug shots being taken of him. The facts here significantly differ from both Harrington and Barnes.

Further, Courchene’s entire defense relied on the fact that he was not the person who rented the camcorder. He based this on the fact that he had lost his driver’s license in 1982 and had to have it replaced. His testimony insinuated that it must have been the person who found his lost license who stole the camcorder. However, his testimony also revealed that the lost license had his photo on it, the replacement did not. The testimony of the store owner indicated that the driver’s license that he saw did not have a photo. When asked about this, Courchene had no answer.

We conclude that the failure on the part of Courchene to object to the mug shot testimony waived appellate review under the statutes and case law of Montana. We further conclude that even when a “plain error” theory is applied, we cannot reverse Courchene’s conviction because he has not proven that he was prejudiced by use of the mug shots.

We hold that the District Court did not abuse its discretion by accepting Courchene’s mug shots into evidence.

II.

Did the District Court err in permitting a conversation in front of the jury concerning “other acts”?

During testimony by Sidney police Officer David Schettine (Schettine), he stated that he had shown a photographic line-up to a person employed by the Mini-Mart in Sidney. Courchene’s counsel objected to this on the basis of a Just violation, and the court sustained it. State v. Just (1979), 184 Mont. 262, 602 P.2d 957. The State went on to argue to the court that it should be permitted to use this information. Adiscussion as to the appropriateness of Just to the questioning then took place in front of the jury.

Courchene contends that the jury was left to speculate as to the nature and quality of the other bad acts which the State was attempting to admit into evidence. The State contends that Courchene did not object at trial and that this Court should not entertain this issue.

We conclude that in the absence of a proper objection in the course of trial, this issue should not be considered by this Court. State v. Howie (1987), 228 Mont. 497, 744 P.2d 156.

We hold that this issue will not be ruled upon because it was not properly raised at trial.

III.

Did the District Court abuse its discretion in permitting evidence of a photo line-up when the State used only a single photograph of Courchene for identification purposes, thus prejudicing him at trial?

Courchene argues that the evidence established that two of the State’s witnesses were shown only a single picture of him for identification purposes. He, therefore, argues that the conviction must be reversed. The record does not support his contentions.

The record establishes that officer Schettine made a photographic line-up containing four pictures, one of which was that of Courchene. Officer Schettine testified that he showed a four-photograph line-up to both Mr. Khaff and Ms. VanHook, and that both of them identified Courchene from the line-up. As a result the record contains positive testimony by Officer Schettine establishing the use of a four-photograph line-up rather than a single photo.

The record also shows that Mr. Knaff’s testimony regarding the identification was ambivalent; he was not certain how many photographs he had seen. Ms. VanHook testified that she was shown only one photograph, directly contradicting Officer Schettine.

We conclude that the record is inconclusive as to which identification method was used. The result is that an issue of fact as to what transpired was raised and was determined by the jury.

We hold that the District Court did not abuse its discretion in permitting evidence of a photo line-up.

IV.

Did the District Court err in failing to instruct the jury on the element of voluntariness?

Courchene contends that Section 45-2-202, MCA, provides that a material element of every offense is a voluntary act and the District Court has the responsibility to instruct the jury on all elements of a crime. Courchene admits that he did not submit an instruction on voluntariness to the court; neither did the State. Again, Courchene contends that this Court should invoke the plain error doctrine to reverse his conviction because the District Court should have instructed the jury. The State argues that Courchene did not object to this at trial and cannot now raise the issue to this Court.

We will not predicate error upon failure to give an instruction when the party alleging the error failed to offer the instruction. State v. Evans (1991), 247 Mont. 218, 806 P.2d 512. The record reveals that Courchene did not submit an instruction on voluntariness to the District Court. Further, Courchene did not object to the lack of instruction at the District Court. Therefore, we decline to consider this issue because it is not properly before the Court.

V.

Did the District Court err in instructing the jury on alternative definitions of the term “deception”?

Courchene was charged with theft by deception. Courchene argues that the District Court instructed the jury on the five different meanings of deception found in Section 45-2-101(17), MCA. According to Courchene, only one of these definitions makes any sense and the use of all five prejudiced him by confusing the jury. The State argues that Courchene not only did not object at the trial court level, but that the instruction was his own instruction.

The record reveals that it was defendant Courchene who submitted the instruction containing the five meanings of deception. We con-elude that defendant may not now object to the instruction which he specifically requested.

VI.

Can defendant reserve his claim of ineffective assistance of counsel until after this appeal?

Courchene seeks to reserve his claim of ineffective assistance of counsel until after the direct appeal. He cites two prior Orders of this Court as precedent for the filing of a petition for post-conviction relief when a claim of ineffective assistance of counsel is filed. The State argues that a claim of ineffective assistance of counsel must be made on direct appeal if the basis for the claim is rooted in the record. According to the State, when the court is required to go beyond the record for resolution of the issue, then a petition for post-conviction relief is appropriate.

Our statutes mandate that when a petitioner has been afforded a direct appeal of the petitioner’s conviction, grounds for relief which could have been raised during the appeal, may not be raised in a petition for post-conviction relief. Section 46-21-105, MCA. Courchene raises no specific issues nor states any specific claims as to the basis of his claim for ineffective assistance of counsel.

We conclude that the defendant may not reserve his claim of ineffective assistance of counsel with regard to any matters which appear in the trial record. We do point out that if defendant has claims of ineffective assistance of counsel which encompass matters outside the record, it may be that a petition for post-conviction relief is appropriate. State v. Black (1990), 245 Mont. 39, 798 P.2d 530; U.S v. Birges (9th Cir. 1984), 723 F.2d 666.

Affirmed.

CHIEF JUSTICES TURNAGE, JUSTICES HARRISON, HUNT, TRIEWEILER and GRAY concur.

JUSTICE McDONOUGH did not participate in this matter.