author: JUSTICE McDONOUGH

text:
    DAN J. DONOVAN and DEBORAH H. FOREMAN, husband and wife, Plaintiffs and Appellants, v. GERRY GRAFF, Defendant and Respondent.
    No. 90-348.
    Submitted on briefs Feb. 28, 1991.
    Decided Mar. 28, 1991.
    48 St.Rep. 303.
    248 Mont. 21.
    808 P.2d 491.

      Dan J. Donovan and Deborah H. Foreman, Denver, Colo., pro se.
    K. D. Peterson, Peterson, Schofield & Leckie, Billings, for defendant and respondent.
   JUSTICE McDONOUGH

delivered the Opinion of the Court.

The plaintiffs Dan J. Donovan and Deborah H. Foreman appeal the order of the Montana Thirteenth Judicial District Court, Yellowstone County, denying their motions for relief from judgment under Rule 60(b)(1) M.R.Civ.P. and for reconsideration of their motion for summary judgment. The sole issue for review on this appeal is whether the District Court erred in denying these motions. We affirm.

Due to the nature of the motions at issue in this appeal, it is unnecessary for us to present an extensive recitation of the facts and procedural history of plaintiffs’ underlying case. Donovan and Foreman filed a lawsuit against Graff for negligence based on the Montana Scaffolding Act, § 50-77-101, MCA, and a claim for loss of consortium. The plaintiffs filed their motion for summary judgment and brief in support thereof on the issue of liability on August 28, 1989, but did not file other supporting documents. Defendants filed their motion for summary judgment and all necessary supporting documents on September 1, 1989. The District Court filed its order and memorandum granting defendant’s motion and denying plaintiffs’ motion on December 18, 1989, and notice of entry of the judgment was filed on January 11, 1990.

In its memorandum the court noted that the plaintiffs did not file any documents to support the factual basis of their motion. Rather, the plaintiffs cited in their supporting brief the transcript of an earlier case in the Thirteenth Judicial District [Yellowstone County, DV 85-405] arising out of a contract between the parties. The court noted:

“It is important to note that the plaintiffs’ other contentions ... are not supported by evidence which this court may consider under Rule 4, Uniform District Court Rules. The plaintiffs’ contentions are made from an earlier action between the parties for breach of contract (DV 85-405), and from depositions associated with that case. These contentions have been made without filing a copy of the transcript or deposition with this Court. Rule 4 states:
“ “When any motion is filed making reference to discovery, the party filing the motion shall submit the relevant unfiled documents.’
“Therefore, given the evidence presented which this Court may consider for summary judgment purposes, the plaintiffs have not met their burden of coming forward with evidence to raise a genuine issue of material fact.”

Donovan and Foreman did not appeal the December 18,1989 order granting the defendant summary judgment within the 30 day time period from the notice of entry of judgment as required by Rule 5 M.RApp.P.

On March 14, 1990 Donovan and Foreman filed a timely motion for relief from judgment pursuant to Rule 60(b)(1) M.R.Civ.R in conjunction with a motion for reconsideration of their earlier motion for summary judgment. The District Court denied these motions in an order dated April 30, 1990. The plaintiffs filed their notice of appeal of this order on May 30, 1990.

Donovan and Foreman’s motion for relief from judgment is based on Rule 60(b)(1) M.R.CivR, which provides in pertinent part:

“Rule 60(b). Mistakes — inadvertence — excusable neglect — newly discovered evidence — fraud, etc. On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect... “Amotion under this subdivision (b) does not affect the finality of a judgment or suspend its operation. This rule does not limit the power of a court to entertain an independent action to relieve a party from a judgment, order, or proceeding, or to grant relief to a defendant not actually personally notified as may be required by law, or to set aside a judgment for fraud upon the court.”

Defendant Graff argues that Donovan and Foreman are simply attempting to extend the time for appeal with a Rule 60(b) motion attacking the District Court’s grounds for granting summary judgment. Graff also contends that Donovan and Foreman are not entitled to relief on the grounds of mistake under Rule 60(b)(1) because they simply made a mistake in understanding the law regarding filing papers in support of a motion for summary judgment.

We agree. Donovan and Foreman devoted the majority of their initial brief to arguing the merits of the court’s grant of summary judgment to the defendant. They do not even discuss the grounds for relief under Rule 60(b) until their reply brief. While an order denying a motion under Rule 60(b) is final and appealable, the appeal from such denial brings up for review only the order of the denial itself and not the underlying judgment. 11 Wright and Miller, Federal Practice and Procedure,, § 2871, pp. 258-59, 7 Moore’s Federal Practice, § 60.30 [3], pp. 60-344, 60-345. Furthermore, we note that part of Donovan and Foreman’s motion is entitled “reconsideration of plaintiffs’ motion for summary judgment”. Reconsideration of an earlier motion on its merits cannot be the subject of a Rule 60(b) motion. Because Donovan and Foreman failed to raise the merits of the grant of summaiy judgment with a timely appeal or request for reconsideration under Rule 59, we are precluded from reviewing these matters.

In this case, the possible error that might constitute the grounds for the Rule 60(b) motion can be charged to either Donovan and Foreman for failing to file the transcripts from the earlier action in support of their motion for summary judgment, or to the District Court for failing to take judicial notice of the transcripts pursuant to Rule 202 M.R.Evid. Regarding the latter ground, we note that when Donovan and Foreman filed their motion for summary judgment on August 28, 1989 they did not specifically request the court to take judicial notice of the transcript; in fact, they failed to do so until they filed their Rule 60(b) motion on March 14,1990.

First, we consider the argument that Donovan and Foreman’s failure to file the transcript from the earlier case constitutes mistake, inadvertence, surprise, or excusable neglect under the rule. In their brief supporting their Rule 60(b) motion Donovan and Foreman argue that their failure to file the transcripts was the result of mistake or inadvertence. Donovan and Foreman argued to the District Court that because the transcript was already on file they

“mistakenly believed that the District Court would take judicial notice thereof to decide the parties’ Motions for Summary Judgment, pursuant to Montana Rides of Evidence, Rule 202(c). For that reason, and in the interest of record-keeping economy at the District Court, plaintiffs mistakenly believed that the Court would not require an additional copy of the two (2) volumes of trial transcript in cause No. DV 85-405 to be filed in cause No. 87-1522. Plaintiffs therefore inadvertently failed to file a separate copy of the 402 pages of trial transcript.”

Based on this argument, Donovan and Foreman cannot claim that their failure to file the transcript was “inadvertent” or the result of “neglect.” Rather this argument reveals that they simply were mistaken in believing that the District Court would take judicial notice of the record from the earlier case. It is well settled that there is no ground for a Rule 60(b) motion where the mistake is purely a mistake of law, as ignorance of the law is no excuse. Rieckhoff v. Woodhall (1937), 106 Mont. 22, 30, 75 P.2d 56,58; Mantle v. Casey (1904), 31 Mont. 408, 416, 78 P. 591, 594; 7 Moore’s Federal Practice, § 60.22 [2], p. 60-179. The District Court correctly denied their Rule 60(b) motion on this ground.

In their reply brief on appeal Donovan and Foreman contend that the court erred in denying their Rule 60(b) motion because the court itself made a judicial mistake in failing to take judicial notice of the transcript from the earlier case. As noted earlier, Donovan and Foreman did not request the court to take judicial notice of the transcript; they failed to do so until they filed their Rule 60(b) motion on March 14,1990. Moreover, while the authorities are uncertain as to when a Rule 60(b) motion may be made based on a judicial mistake rather than a mistake by a party, they are in agreement as to when such a motion should be filed in order to be timely. If the alleged error involves a fundamental misconception of the law by the court and the motion is not made until after the time for appeal has run then relief should be denied. 11 Wright and Miller, Federal Practice and Procedure, § 2858, pp. 176-80; see also 7 Moore’s Federal Practice, § 60.22 [3], pp. 60-185,60-186; Note, Federal Rule 60(b): Finality of Civil Judgments v. Self-Correction by District Court of Judicial Error of Law (1967), 43 Notre Dame Lawyer 98. This is consistent with the rule that a Rule 60(b) motion may not be used as a substitute for appeal. 7 Moore’s Federal Practice § 60.18 [8] p. 60-140; McCarthy v. Mayo (9th Cir. 1987), 827 F.2d 1310, 1318; Sheridan v. Martinson (1974), 164 Mont. 383, 387, 523 P.2d 1392, 1394. In light of these comments and the position taken by the majority of jurisdictions, Donovan and Foreman are precluded from alleging judicial mistake as a ground for their Rule 60(b) motion.

The order of the District Court is

AFFIRMED.

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


source: Caselaw Access Project

license: Public Domain

text:
    ANDREW W. WOOD, Claimant and Appellant, v. CONSOLIDATED FREIGHTWAYS, INC., Employer, Defendant and Respondent.
    No. 90-478.
    Submitted on briefs Feb. 21, 1991.
    Decided Mar. 28, 1991.
    248 Mont. 26.
    808 P.2d 502.

      James M. Regnier, Regnier, Lewis & Boland, Great Falls, for claimant and appellant.
    Thomas A. Marra, Marra, Wenz, Johnson & Hopkins, Great Falls, for employer, defendant and respondent.
   JUSTICE McDONOUGH

delivered the Opinion of the Court.

This appeal involves the termination of an injured worker’s temporary total disability benefits. The claimant Andrew L. Wood appeals an order of the Workers’ Compensation Court. The court terminated his temporary total disability benefits and converted them to permanent partial disability benefits on the grounds that the claimant had reached maximum healing and there was a suitable labor market for him to return to work. We reverse and remand the case for fiirther proceedings.

The claimant raises two issues on this appeal:

(1) Did the Workers’ Compensation Court err in determining that Wood was permanently partially disabled and not permanently totally disabled?
(2) Did the Workers’ Compensation Court err in determining that the defendant/insurer’s termination of temporary total disability benefits was proper?

Wood was injured on July 16,1986 while working for Consolidated Freightways (CF). Wood received temporary total disability benefits in accordance with § 39-71-701, MCA, from the date of the injury until February 4, 1988. CF terminated Wood’s temporary total disability benefits by letter on January 20,1988. The termination letter did not include copies of any medical or vocational reports. On January 29,1988, CF’s claims examiner received a letter from Jeanne Dussault, a vocational rehabilitation counselor, which included job descriptions Dussault had identified as employment options for Wood.

The letter indicated that the job descriptions listed had not been approved by Wood’s then-treating physician, who had just retired, or any other physician. The record reveals no subsequent attempts by CF’s claims examiner to attempt to contact Wood’s physician or any other doctor to seek approval of the job descriptions identified by the vocational rehabilitation counselor.

In its order the Workers’ Compensation Court found that the medical evidence was overwhelming that the claimant had reached maximum healing and was permanently partially disabled rather than totally disabled. Indeed, the record indicates that four physicians, including Wood’s own, examined Wood and testified that he should be able to return to some type of employment. While one doctor opined that Wood could actually return to his old job as a dock worker for CF, the others felt that Wood was able to perform only light-duty, sedentary tasks. Based on this medical evidence, the vocational rehabilitation counselor was of the opinion that she had all the information necessary to make a determination as to what type of physical restrictions in employment the claimant’s treating physician had placed upon Wood. On cross-examination, however, she admitted that none of the job descriptions which she had identified had been presented to any physician for approval although such approval was the normal procedure in her profession. Another vocational rehabilitation counselor called by the claimant as an expert witness also testified that it was normal procedure to obtain a physician’s approval of potential jobs in an injured worker’s job market. Finally, the record also reveals that since his injury, Wood has made no attempts to go back to work.

Our standard for reviewing a decision of the Workers’ Compensation Court is to determine if there is substantial evidence to support the findings and conclusions of that court. We cannot substitute our judgment for that of the trial court as to weight of the evidence on questions of fact. Where there is substantial evidence to support the Workers’ Compensation Court, this Court cannot overturn the decision. Coles v. Seven Eleven Stores (1985), 217 Mont. 343, 347, 704 P.2d 1048, 1050, Hume v. St. Regis Paper Company (1980), 187 Mont. 53, 59, 608 P.2d 1063, 1066.

There is no dispute in this case that the claimant has reached maximum healing. Maximum healing triggers a reevaluation of the claimant’s disability status; the claimant is then classified as either permanently totally disabled or permanently partially disabled. See McDanold v. B. N. Transport, Inc. (1984), 208 Mont. 470, 475, 679 P.2d 1188, 1191. Under the law applicable at the time of Wood’s injury, permanent total disability is defined as:

“a condition resulting from injury as defined in this chapter that results in the loss of actual earnings or earning capability that exists after the injured worker is as far restored as the permanent character of the injuries will permit and which results in the worker having no reasonable prospect of finding regular employment of any kind in the normal labor market. Disability shall be supported by a preponderance of medical evidence.” (Emphasis added.)

Section 39-71-116(13), MCA (1985). Under this definition, disability has non-medical as well as medical components. Regarding the non-medical component of permanent total disability, this Court has stated:

“To establish the existence of no reasonable prospect of employment in the normal labor market, a claimant must introduce substantial credible evidence of (1) what jobs constitute his normal labor market, and (2) a complete inability to perform the employment and duties associated with those jobs because of his work related injury.” (Citations omitted.)

Coles, 704 P.2d at 1051; Metzger v. Chemtron Corp. (1984), 212 Mont. 351, 355, 687 P.2d 1033, 1035. Once a claimant presents evidence demonstrating that there is no reasonable prospect of employment in his normal labor market, the burden of proof then shifts to the employer to show that suitable work is available. Coles, 704 P.2d at 1051; Metzger, 687 P.2d at 1036.

In its order, the Workers’ Compensation Court set forth the claimant’s work history, which included farm labor, both prior and subsequent to a period of military service, and 28 years of heavy physical labor as a dock worker and driver for CF. In conclusion of law No. 2, the court took

“note of the fact that the claimant’s normal labor market consists of heavy physical laboring positions, particularly, at least for the last 28 years, as a dock man/driver for Consolidated Freightways a position which required claimant to frequently, arguably, consistently, lift, in the process of loading and unloading trucks, in excess of 150 pounds. With the exception of Dr. Forbeck, none of the [other three] physicians, or indeed the claims examiner for the defendant, suggest that the claimant should return to his previous employment.”

In the context of the claimant’s normal labor market, the court then discusses the claimant’s ability to return to the “light duty” work suggested by the vocational rehabilitation counselor but not approved by a physician. This is inconsistent with the court’s earlier identification of the claimant’s “normal labor market” as one consisting of heavy manual labor, and is also inconsistent with the concept of “normal labor market” used in previous decisions of this Court. See e.g. Wilhelm v. Owens Enterprises, Inc. (1990), 242 Mont. 285, 790 P.2d 467, 471, 47 St.Rep. 699, 704-5.

In this case, there is substantial credible evidence in the record to support a finding that Wood was unable to return to his normal labor market of employment involving heavy physical labor. Three out of four physicians concluded that Wood could no longer perform the heavy physical labor in employment that he had performed essentially all of his adult life. Thus, the claimant met his burden of demonstrating “no reasonable prospect of employment” with evidence that his “normal labor market” consists of heavy manual labor and with medical evidence indicating he can no longer perform such labor due to his work related injury. Thus, the burden shifted to CF to demonstrate that other suitable work is available to Wood. Coles, 704 P.2d at 1051, Metzger, 687 P.2d at 1035-36. In this regard, the Workers’ Compensation Court utilized the following test, taken from its decision in Coles, WCC No. 2000, decided November 20, 1984, aff'd 217 Mont. 343, 704 P.2d 1048 (1985), to determine whether the employer had provided the minimum information necessary to discharge its duty to investigate the extent of claimant’s disability. The test requires:

“(1) a physician’s determination that the claimant is as far restored as the permanent character of his injuries will permit;
“(2) a physician’s determination of the claimant’s physical restrictions resulting from an industrial accident;
“(3) a physician’s determination, based on his knowledge of the claimant’s former employment duties, that he can return to work, with or without restrictions, on the job on which he was injured or another job for which he is fitted by age, education, work experience, and physical condition;
“(4) notice to the claimant of receipt of the report attached to a copy of the report.” (Emphasis added.)

The record indicates that CF has not met its burden under this test. CF presented a list of suggested jobs as “available suitable work” but failed to meet its evidentiary burden under Coles requiring a physician’s determination that the claimant can return to one of these suggested occupations. There is simply no evidence in the record to support the court’s conclusion suitable work is available to Wood under the third prong of Coles. The Court itself noted the lack of evidence:

“Though we conclude, under these facts, that the insurer acted properly, we do so primarily based on the abundant medical and vocational evidence. The insurer has stretched the Coles standards to the limit in this instance and we would caution the parties and counsel that few cases present themselves with similar overwhelming medical evidence; thus, adherence to the Coles elements remains vital.”

Despite this attempt to support its conclusions, the evidence clearly fails to meet the court’s own “vital” criteria as set forth in Coles. Absent a physician’s determination that Wood could return to work in one of the jobs listed by the vocational rehabilitation counselor, there is no substantial credible evidence in the record to support the finding that Wood could return to work in one of these jobs. Because CF has failed to meet its burden, we reverse this case and direct the Workers’ Compensation Court to enter judgment in favor of Wood. See e.g. Wilhelm., supra, 790 P.2d at 471.

Because we reverse the Workers’ Compensation Court’s judgment on the first issue, we need not address the second issue raised by Wood.

REVERSED and REMANDED for further proceedings consistent with this opinion.

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


author: JUSTICE HARRISON

text:
    WILLIAM M. WISE and DONNA M. WISE, Plaintiffs and Respondents, v. WILLIAM J. SEBENA, Defendant and Appellant.
    No. 90-534.
    Submitted on briefs Feb. 28, 1991.
    Decided Mar. 28, 1991.
    248 Mont. 32.
    808 P.2d 494.

      Kevin V. Vainio, Butte, for defendant and appellant.
    John C. Brown, Cok & Wheat, Bozeman, for plaintiffs and respondents.
   JUSTICE HARRISON

delivered the Opinion of the Court.

William J. Sebena appeals from a judgment entered January 23, 1990, by the District Court of the Eighteenth Judicial District, Gallatin County. The District Court denied summary judgment to Sebena on his counterclaims and awarded summary judgment on the issue of attorney’s fees to plaintiffs William M. Wise and Donna M. Wise in their action to foreclose on a real estate contract. We affirm.

Sebena presents the following issues:

1. Did the District Court err by ruling in plaintiffs’ favor on Sebena’s summary judgment motion to recover under a bad faith claim?
2. Did the District Court err by failing to apply Rule 11, MR.Civ.P, sanctions to plaintiffs?
3. Did the District Court err by granting summary judgment to plaintiffs on the issue of attorney’s fees?

Summary of Facts

On November 12, 1974, William J. Sebena, defendant, agreed to buy residential property in Bozeman, Montana, from William M. Wise and Donna M. Wise, plaintiffs. According to the Contract of Sale, Sebena was obligated to pay the purchase price of $27,000 with a down payment of $7,779.40 and monthly installments of $150.00 at six per cent interest on the $19,220.60 balance. The escrow agent for the contract was First National Bank of Bozeman.

The Contract of Sale also provided:

1. Plaintiffs were to give Sebena notice that payments were being made by a third party under an underlying mortgage.
2. Plaintiffs were required to purchase a title insurance policy, to be deposited in the escrow account, showing that they had good and merchantable title to the property subject to the underlying mortgage.
3. In the event of non-payment of installments, after thirty days plaintiffs had to provide Sebena with written notice of non-payment. Sebena had another thirty days to make up any delinquent payments, after which plaintiffs could accelerate all payments if the arrearages were not received. Sebena had sixty days after notice of acceleration to pay the remaining balance.
4. Once Sebena had paid one-half of the balance of the contract, the contract could only be terminated by a mortgage foreclosure action.
5. In the event of litigation concerning the contract, the successful party was entitled to reasonable attorney’s fees.

On December 4,1981, Sebena wrote plaintiffs a letter stating that because the balance owed on the contract had been reduced to one-half the purchase price, the contract could only be foreclosed as a mortgage. Sebena also notified plaintiffs that a title insurance policy had not been deposited into escrow. Before notification, plaintiffs believed that a title insurance policy had been deposited into escrow at closing. Sebena also inquired about the status of the underlying mortgage payments.

In October, 1982, plaintiffs purchased a title insurance policy guaranteeing clear and marketable title to the property, but did not deposit the policy into the escrow account as required by the Contract of Sale. Plaintiffs notified Sebena that they had purchased title insurance.

Throughout the period subsequent to the signing of the Contract of Sale, Sebena was repeatedly late with installment payments, resulting in some fifteen letters being sent to Sebena requesting that he bring payments current. Sebena failed to make January, February, March, and April, 1988, payments. On May 2, 1988, plaintiffs sent Sebena a Notice of Default, giving Sebena thirty days to pay the arrearages.

After Sebena failed to cure default within the thirty-day period, on June 9,1988, plaintiffs sent Sebena a Notice of Acceleration, allotting Sebena sixty days to pay the remaining $5,917.11 balance due under the contract before plaintiffs would begin a foreclosure action.

Within the sixty-day period, on August 9, 1988, Sebena notified plaintiffs that he had tendered the entire remaining balance to the escrow agent and would not release final payment unless he could review the title insurance policy required by the contract.

On August 31,1988, plaintiffs sent the escrow agent the 1982 title insurance policy in the amount of $27,000 showing clear and marketable title in plaintiffs’ names. At the same time, plaintiffs sent the escrow agent a “Commitment of Title Insurance,” showing that plaintiffs still had clear and marketable title to the property as of August 13, 1988.

Sebena was not satisfied with the 1982 insurance policy and 1988 title commitment and instructed the escrow agent not to release final payment until a title insurance policy in his name, rather than plaintiffs’ names, was delivered to escrow.

On September 6, 1988, the escrow agent informed plaintiffs of Sebena’s request. Plaintiffs offered to purchase a title insurance policy in Sebena’s name based upon the 1988 commitment of Title Insurance. A representative of the title insurance company met with Sebena to explain that title to the property was clear and that plaintiffs could not release the policy insuring the property in Sebena’s name until the final payment was released and the warranty deed to Sebena recorded.

Sebena expressed concern about the underlying obligation to the property. A copy of the prior obligation and its release, the Satisfaction of Mortgage, recorded on May 9, 1977, was provided to Sebena. Sebena still refused to release final payment and insisted that plaintiffs purchase a title insurance policy insuring title in plaintiffs’ names and reflecting Sebena as the contract owner.

On October 7,1988, plaintiffs gave Sebena until October 16,1988, to release final payment. Sebena apprised the escrow agent that he would release final payment if plaintiffs provided him with a copy of the Satisfaction of Mortgage for the underlying contract, which Sebena had already received from the title insurance company agent. On October 19, 1988, plaintiffs gave Sebena another copy of the Satisfaction of Mortgage. Plaintiffs gave Sebena until 5:00 p.m. on October 20,1988, to release final payment, a deadline which Sebena did not meet.

On October 28,1988, plaintiffs filed a foreclosure action. Plaintiffs delivered a title policy insuring title in their names and reflecting Sebena as the contract owner to the escrow account on October 31, 1988. On November 1, 1988, Sebena released final payment and recorded the Warranty Deed, rendering plaintiffs’ foreclosure action moot. Before plaintiffs could dismiss the foreclosure action, Sebena counterclaimed for breach of the implied covenant of good faith and fair dealing and requested Rule 11 sanctions.

On September 15,1989, plaintiffs moved to amend their complaint to reflect that Sebena had released the disputed payment and moved for summary judgment on the issue of attorney’s fees. Sebena filed a cross-motion for summary judgment on his counterclaims. The District Court granted summary judgment to plaintiffs and denied Sebena’s motion for summary judgment. After a hearing held May 15,1990, the District Court awarded $5,237.87 in attorney’s fees to plaintiffs. From the grant of summary judgment to plaintiffs, Sebena appeals.

I

Did the District Court err by ruling in plaintiffs’ favor on Sebena’s summary judgment motion to recover under a bad faith counterclaim?

When no genuine issue exists as to any material fact, summary judgment may be granted as a matter of law. Rule 56(c), M.R.Civ.P.; Blaskovich v. Noreast Development Corp. (1990), 242 Mont. 326, 328, 790 P.2d 977, 978. The parties concede that the facts are undisputed and that the issues are matters of law.

Sebena alleges that plaintiffs breached the Contract of Sale by failing to provide the escrow agent with a title insurance policy and proof of release of the underlying mortgage which were conditions precedent to Sebena’s payment on the Contract of Sale. Sebena further asserts that plaintiffs breached the implied covenant of good faith and fair dealing by initiating foreclosure proceedings when plaintiffs were in breach of the contract.

According to Sebena, if a contract for deed imposes an obligation upon the seller to provide title insurance, other proof of merchantable title, or imposes other conditions, the buyer is relieved of all obligations under the contract if the seller does not meet the conditions. A distinction can be drawn between the cases upon which Sebena relies and this case. The cases Sebena cites concern sellers who were unable to convey merchantable title, excusing the buyer’s breach. See, e.g., Stark v. Borner (1988), 234 Mont. 254, 762 P.2d 857 (seller of real estate cannot enforce forfeiture provision in a contract for deed if unable to convey good title).

In Sjoberg v. Kravik (1988), 233 Mont. 33, 759 P.2d 966, for example, the underlying mortgages were not released by the date specified in the contract. In Sharbono v. Darden (1986), 220 Mont. 320, 715 P.2d 433, the vendor had not obtained satisfaction of the underlying mortgage by the time the balloon payment was due. Here release of the underlying contract was obtained in 1977, several years before Sebena refused to release final payment.

In Chadwick v. Giberson (1980), 190 Mont. 88, 618 P.2d 1213, the seller was unable to convey an easement to the buyer as agreed upon. Defects in the title prevented the vendor from providing title insurance in Yost Farm Co. v. Cremer (1968), 152 Mont. 200, 447 P.2d 688. Similarly, in Brown v. Griffin (1968), 150 Mont. 498, 436 P.2d 695, the seller never furnished an abstract of title or title insurance.

In contrast, no doubt exists that plaintiffs were able to convey unencumbered, merchantable title. Plaintiffs notified Sebena in 1982 that they had provided title insurance. Sebena made installment payments from 1971 until January 1988 without objecting to the title insurance policy or release of the underlying mortgage and without exercising his remedies under the Contract of Sale, even though Sebena’s 1981 letter to plaintiffs demonstrates that he was aware that plaintiffs had not provided these items at that time.

The Contract of Sale provides that the title insurance policy be placed in escrow “and held by the escrow agent and all documents be delivered to the Purchaser if the Purchaser performs all terms of this contract.” This provision does not contradict the rule that unless the contract provides otherwise, “a seller under an installment sales contract does not have to produce marketable title until the date set for final payment and tender of the deed.” Scheitlin v. R. & D. Minerals (1985), 217 Mont. 8, 11, 701 P.2d 1388, 1390. Under the facts of this case, Sebena cannot claim that plaintiffs breached the Contract of Sale.

On the other hand, Sebena did breach the contract. “ ‘If payment [on a contract for deed] is to be made in installments, default in the payment of any installment is a distinct breach and gives the vendor the right to declare a forfeiture.’ ” Hares v. Nelson (1981), 195 Mont. 463, 467, 637 P.2d 19, 22 (quoting Suburban Homes Co. v. North (1914), 50 Mont. 108, 145 P. 2, 5).

Even if an express term of a contract is not breached, the implied covenant of good faith and fair dealing can be breached. Story v. City of Bozeman (1990), 242 Mont. 436, 450, 791 P.2d 767, 775. The covenant requires “honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.” Section 28-1-211, MCA; Story, 242 Mont, at 450, 791 P.2d at 775. The tort of bad faith requires a special relationship and breach of the same standard of “honesty” and “reasonable commercial standards of fair dealing.” Story, 242 Mont. at 451, 791 P.2d at 776. Since the facts support the District Court’s conclusion that plaintiffs had not acted dishonestly or unreasonably in fulfilling their obligations under the contract, we hold that the District Court did not err in granting summary judgment in plaintiffs’ favor on Sebena’s bad faith counterclaim.

II

Did the District Court err by refusing to apply Rule 11, M.R.Civ.P, sanctions to plaintiffs?

The Rules of Civil Procedure allow sanctions to be imposed on two grounds: (1) if a pleading is frivolous, i.e., not “well grounded in fact” or “warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law;” or (2) if a pleading is “interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.” Rule 11, M.R.Civ.P.

District courts have “wide latitude to determine whether the factual circumstances of a particular case amount to frivolous or abusive litigation tactics ....” D’Agostino v. Swanson (1990), 240 Mont. 435, 446, 784 P.2d 919, 926.

In D’Agostino, we outlined the standard of review of Rule 11 sanctions: (1) the district court’s findings of fact will not be overturned ■unless clearly erroneous; (2) the district court’s conclusion that the facts constitute a violation of Rule 11 will not be reversed absent abuse of discretion; (3) review de novo is appropriate only if the violation is based upon the legal sufficiency of a plea or motion; (4) if Rule 11 has been violated, the district court must impose sanctions on the offending party, his counsel, or both; and (5) failure to impose sanctions where the rule has been violated will be deemed reversible error. D’Agostino, 240 Mont. at 446, 784 P.2d at 926.

Sebena claims that plaintiffs caused unnecessary delay and needless increase in the cost of litigation by filing the foreclosure action and failing to dismiss the action after the foreclosure issue became moot, forcing Sebena to file a pro se answer to avoid default. Sebena contends that plaintiffs then filed motions to dismiss or for a more definite statement, requiring Sebena to retain an attorney to file an amended answer and counterclaims. Finally, Sebena argues that he “was forced to respond to discovery, attend mediation proceedings, and to incur substantial attorney fees defending against the foreclosure” because plaintiffs did not amend their complaint -until September 26, 1989.

The filing of the foreclosure action was justified by Sebena’s failure to release final payment from escrow despite plaintiffs’ compliance with the contract. Once the action was begun, plaintiffs did not “harass” Sebena by filing motions to dismiss or for a more definite statement. No one forced Sebena to file counterclaims. When the action was filed, the cause of action was well grounded in fact and warranted by existing law. We hold that the District Court’s finding that plaintiffs “acted reasonably and in good faith” is not clearly erroneous. The District Court did not err by rejecting Sebena’s request for Rule 11, M.R.Civ.P., sanctions.

Ill

Did the District Court err by granting summary judgment to plaintiffs on the issue of attorney’s fees?

The Contract of Sale provided that in the event of litigation under the contract, the successful party was entitled to reasonable attorney’s fees. Sebena contends that since the foreclosure action was “premature,” plaintiffs could not be the “successful party.” Sebena also argues that he was the prevailing party because plaintiffs dismissed their foreclosure action.

In cases “ ‘where both parties gain a victory but also suffer a loss,’ ” neither party prevails. Lauderdale v. Grauman (1986), 223 Mont. 357, 359, 725 P.2d 1199, 1200 (quoting Parcel v. Myers (1984), 214 Mont. 220, 224, 697 P.2d 89, 91- 92). However, dismissal of a claim does not necessarily mean that the party has suffered a loss. In Lauderdale, plaintiffs sued for breach of a contract for deed. Defendants counterclaimed and dismissed their counterclaim after plaintiffs paid in full. The jury found against the plaintiffs on their claims. We stated that dismissal of defendants’ counterclaim was “clearly distinguishable from a situation where the jury found against [defendants] on the counterclaim.” Lauderdale, 223 Mont. at 359, 725 P.2d at 1200.

This case is analogous to Lauderdale. Plaintiffs’ claim became moot, but the District Court ruled against Sebena on his counterclaims. Thus, plaintiffs are the prevailing parties. Since plaintiffs were the successful parties, we hold that the District Court did not err in granting plaintiffs summaiy judgment and awarding plaintiffs attorney’s fees pursuant to the Contract of Sale.

In addition, plaintiffs request attorney's fees and costs of this appeal. “An award of attorney’s fees is proper on appeal where the fees are based on a contract.” Poulson’s, Inc. v. Wood (1988), 232 Mont. 411, 417, 756 P.2d 1162, 1166. Plaintiffs should receive reasonable attorney’s fees and costs. This case is affirmed and remanded to the District Court for determination of attorney’s fees and costs on appeal.

Affirmed.

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


author: JUSTICE WEBER

text:
    JIM RICHARDSON, Claimant and Appellant, v. COLUMBIA FALLS ALUMINUM CO., Employer, and STATE COMPENSATION MUTUAL INSURANCE FUND, Defendant and Respondent.
    No. 90-539.
    Submitted on briefs Feb. 21, 1991.
    Decided Mar. 28, 1991.
    248 Mont. 41.
    808 P.2d 500.
    John H. Bothe, Laurie Wallace, Bothe & Lauridsen, Columbia Falls, for claimant and appellant.
    Mark L. Stermitz, Warden, Christiansen, Johnson & Borg, Kalispell, for defendant and respondent.
   JUSTICE WEBER

delivered the Opinion of the Court.

Claimant, Jim Richardson, appeals from an order of the Workers’ Compensation Court denying his claim for a neck or cervical spine injury. We affirm.

The issue is: Was there substantial evidence to support the Workers’ Compensation Court’s conclusion that Mr. Richardson had failed to establish that he suffered an industrial injury to his neck or cervical spine (hereinafter referred to as cervical injury) on November 4, 1987?

On June 25, 1984, Mr. Richardson was working as a pipe fitter at the aluminum plant in Columbia Falls, Montana, when he hit his head on a piece of angle iron as he was ascending a ladder to an overhead walkway. The force of the impact “jammed” his neck and resulted in a lump on his head. Mr. Richardson filed an accident report with his employer, but did not seek immediate medical treatment and did not lose any work time.

On November 4, 1987, Mr. Richardson was changing an air valve on a cylinder at the aluminum plant. Mr. Richardson was pulling on a 24 inch pipe wrench when the wrench gave way and he fell backward, striking his right elbow on a steel cylinder. The next day Mr. Richardson went to Dr. Spencer, family practitioner, for pain in his elbow. The following day he saw Dr. Spencer’s partner, Dr. Winkel. He was diagnosed as having tendonitis of the elbow and was treated with anti-inflammatory medication, a tennis elbow splint, and was restricted from lifting more than 20 pounds with his right arm. He was told it would take three to four months for the elbow to heal. Approximately four months later Mr. Richardson returned to Dr. Winkel complaining of severe headaches, pain across both shoulders, into the neck and down to the left elbow, and numbness in the first two fingers and thumbs of both hands.

Neither party disputes that Mr. Richardson suffered an industrial accident in 1984 that resulted in a cervical injury. The dispute arises over the nature and extent of the cervical injury suffered by Mr. Richardson in 1984 and the effect, if any, the 1987 industrial accident had on that injury. In 1989, Mr. Richardson filed a workers’ compensation claim for his cervical injury resulting from the 1984 accident. The parties settled for $10,000. Mr. Richardson now brings this claim for aggravation of the cervical injury in the 1987 accident.

The Workers’ Compensation Court determined that Mr. Richardson had failed to establish that he suffered a cervical injury in 1987. Mr. Richardson claims that the Workers’ Compensation Court relied exclusively on the written report of Dr. Joem to support its conclusion and that a careful evaluation of the other examining and testifying physicians in the case would show that in fact a preponderance of the medical evidence weighed in Mr. Richardson’s favor.

Where findings are based on conflicting evidence, this Court’s function is confined to determining whether there is substantial evidence to support the Workers’ Compensation Court’s findings and conclusions. It is not this Court’s function to determine whether there is sufficient evidence to support contrary findings. Morris v. Montana Forward (Mont. 1990), [245 Mont. 153,] 799 P.2d 1063, 1065, 47 St.Rep. 1942, 1943.

Mr. Richardson testified that when he fell back and hit his elbow in 1987, his head snapped back, aggravating his cervical injury. As evidence he states that it was only after the 1987 accident that he experienced any symptoms. In March, 1988, he developed severe headaches, pain across both shoulders, into the neck and down to the left elbow, and numbness in the first two fingers and thumbs of both hands. The Workers’ Compensation Court found Mr. Richardson’s testimony not credible because he had made no mention of his head “snapping back” in the 1987 accident until two and a half years had passed and he had settled the 1984 claim.

The Workers’ Compensation Court had before it the depositions of five physicians and the medical reports of seven other physicians. A review of all the medical evidence supports the Workers’ Compensation Court’s conclusion.

The reports of the first examinations following the 1987 accident cover only the elbow injury. Mr. Richardson made no mention of the “snapping” of his neck when he described his accident to Dr. Spencer and Dr. Winkel. Dr. Winkel testified that when the cervical symptoms began four months later, he did not give it much thought in terms of whether the 1987 accident was related or not. He believes he recalls Mr. Richardson subsequently telling him about the “snapping” of his neck but he does not know exactly when and does not have it recorded in any of his written records.

Dr. Stephens, a physical medicine and rehabilitation physician from Kalispell, did diagnostic tests on Mr. Richardson in March and April, 1988, shortly after Mr. Richardson began to develop the headaches and pains in his arms and shoulders. Dr. Stephens’written reports record the “jamming” of the neck in 1984 and the striking of the elbow in 1987. No mention is made of a “snapping” of the neck in 1987. Dr. Stephens testified that in his opinion the symptoms experienced by Mr. Richardson beginning in March, 1988, were the natural progression of degeneration resulting from the 1984 cervical injury. When Mr. Richardson’s attorney asked him if his answer would be different if Mr. Richardson was asymptomatic prior to the 1987 accident, Dr. Stephens replied that might change his answer but that he considered it a purely hypothetical question which he was reluctant to answer.

In August, 1988, Dr. Friedrick, a Helena orthopedic surgeon, examined Mr. Richardson. He testified that there is no mention of the 1984 accident in his records, no mention of the neck being involved in the 1987 accident, and he had no recollection of ever having that information. He assumed that he was being deposed regarding the elbow injury.

In December, 1988, Mr. Richardson was examined by a Missoula medical panel to determine when the cervical injury occurred. The panel was made up of Dr. Norman, a neurologist, and two orthopedic surgeons, Dr. Sterling and Dr. Jacobson. The panel evaluation report was drafted by Dr. Norman and concluded:

“Question now arose as to relationship of elbow injury (11-4-87) and impairment of the cervical spine. Quite frankly, there is no clear relationship. There is no clear history of cervical spine injury or aggravation of preexisting condition in history obtained relating to injury of November 4,1987.

“Discussion now turned to previous injury in July of 1984. Finally it was concluded on the basis of history and medical data available that it could not be determined when injury of the cervical spine occurred.”

Dr. Norman’s written records do not mention the “snapping” of the neck when he described the 1987 accident.

Dr. Peterson’s written records also do not mention the “snapping” of the neck in 1987. In testimony however he testified that “I don’t have any record that he actually struck his head or his neck with that particular accident (in 1987). What he did was he stressed the head and the neck area, as anyone would. That suggests that there may well have been some problem present, kind of like a time bomb you’re sitting on, waiting for something to happen to aggravate it.” Therefore Dr. Peterson believed the 1987 accident precipitated Mr. Richardson’s symptoms.

Dr. Sterling’s written record also does not mention the “snapping” of the neck in 1987. Dr. Sterling expressed disbelief of Mr. Richardson’s testimony that he had “snapped” his neck back, and testified that it was his opinion that the cervical condition was not caused by snapping of the neck." ... [T]he whole tenor [of my report and of the panel’s final report] would have been different had the initial injury report said that he banged his elbow and snapped his neck initially rather than several months later.”

Dr. Joem, a Kalispell physician, examined Mr. Richardson in August, 1989, and evaluated his condition based on his interview and examination of Mr. Richardson and copies of all the records of the physicians who had examined or treated Mr. Richardson. Dr. Joern summarized the various medical records and gave detailed results of his own examination. Dr. Joem came to the conclusion that the symptoms were a natural progression of a cervical degenerative condition resulting from the 1984 accident, and that the confusion arises because in the 1987 injury “there was an overlapping of symptomatology due to the similarity of the distribution of the effected nerves from the neck through the elbow.”

In light of the foregoing medical reports and testimony, we hold there is substantial evidence to support the Workers’ Compensation Court’s determination that Mr. Richardson failed to establish that he suffered an industrial injury to his neck or cervical spine on November 4, 1987.

Affirmed.

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


author: CHIEF JUSTICE TURNAGE

text:
    MARY ANNE YOUNG, Petitioner and Appellant, v. JOHN'S IGA, Employer, and STATE COMPENSATION FUND, Respondent and Respondent.
    No. 90-563.
    Submitted on briefs Feb. 28, 1991.
    Decided March 28, 1991.
    248 Mont. 46.
    807 P.2d 1369.
    Don Edgar Burris, Billings, for petitioner and appellant.
    Kelly O’Sullivan, Agency Legal Services, Helena, for respondent and respondent.
   CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Mary Anne Young appeals an order of the Workers’ Compensation Court denying her the right to refuse to submit to an examination by an independent medical panel. We affirm.

The issue is whether a claimant has the right to refuse to attend and be examined by an independent medical panel because her attorney is suing the chairman of the panel and the clinic for malpractice.

Claimant Mary Anne Young filed a claim for workers’ compensation benefits for a September 26, 1987, industrial injury arising out of her employment. In March 1990, the State Compensation Mutual Insurance Fund (State Fund) notified Young that she had been scheduled for an independent medical evaluation by the Yellowstone Valley Medical Evaluation Panel. The evaluation was to occur May 7 through May 10, 1990.

In April 1990, Young’s attorney requested in writing that the examination be rescinded because he had a malpractice action pending against the chairman of the panel and was contemplating another action against him. The State Fund denied that request. Young’s attorney then filed a request for mediation of the dispute. The State Fund contested the jurisdiction of the mediator.

In the meantime, the appointment for the examination was confirmed with Young. The State Fund paid Young $209.20 for her travel and lodging expenses, but she did not attend the appointment. On May 10, 1990, the mediator dismissed the request for mediation because no dispute over benefits was involved.

On May 31, 1990, Young filed an emergency petition before the Workers’ Compensation Court. The case was submitted to the court on an agreed statement of facts. On June 19, 1990, before the court issued its opinion, the State Fund informed Young in writing that it would continue to pay her benefits, under a reservation of rights to a refund of benefits paid from the time of her refusal to attend the medical examination.

The Workers’ Compensation Court determined that under § 39-71-605, MCA, Young did not have the right to refuse to submit to the medical examination. The court stated that Young’s safeguards against bias or unfairness in the examination are her right to have a physician present at the examination and her right to cross-examine the doctors at trial. It ordered that her workers’ compensation benefits be suspended from May 7,1990, until she attends a medical examination as requested by the State Fund.

Section 39-71-605, MCA, is the controlling statute. It provides:

“Examination of employee by physician — effect of refusal to submit to examination — report and testimony of physician — cost. (l)(a) Whenever in case of injury the right to compensation under this chapter would exist in favor of any employee, he shall, upon the written request of the insurer, submit from time to time to examination by a physician or panel of physicians, who shall be provided and paid for by such insurer, and shall likewise submit to examination from time to time by any physician or panel of physicians selected by the department.
“(b) The request or order for such examination shall fix a time and place therefor, due regard being had to the convenience of the employee and his physical condition and ability to attend at the time and place fixed. The employee shall be entitled to have a physician present at any such examination. So long as the employee, after such written request, shall fail or refuse to submit to such examination or shall in any way obstruct the same, his right to compensation shall be suspended. Any physician or panel of physicians employed by the insurer or the department who shall make or be present at any such examination may be required to testify as to the results thereof.”

Young maintains that forcing her to submit to an examination by the panel selected by the insurer in effect violates her right to counsel. The right to counsel is a right of criminal defendants, not civil litigants. See U.S. Const., Amend. VI and XIV; Mont. Const., Art. II, § 24.

Young also argues that she did not refuse to be examined by all panels and that other equally qualified panels are available. However, under the plain language of the statute, a claimant does not have the right to choose a panel. The insurer has that right, and bears responsibility for paying for the panel.

In her brief, Young sets forth hypothetical situations in which she argues a workers’ compensation claimant should have a right to substitution of the panel chosen by the insurer. Young may wish to address those arguments to the legislature, in support of future revision of the statutes on this subject. As the law now stands, we agree with the Workers’ Compensation Court that § 39-71-605, MCA, clearly gives the insurer the right to a physician or panel of its own choosing.

Affirmed.

JUSTICES HARRISON, McDONOUGH, TRIEWEILER and WEBER concur.


text:
    STATE OF MONTANA and CITY OF BELGRADE, Plaintiffs and Respondents, v. DOUGLAS A. HEGEMAN, Defendant and Appellant.
    No. 90-171.
    Submitted on briefs Feb. 28, 1991.
    Decided Apr. 2, 1991.
    248 Mont. 49.
    808 P.2d 509.
    Jeff Renz, Billings, Eula Compton, Bozeman, for defendant and appellant.
    Marc Racicot, Atty. Gen., Kathy Seeley, Asst. Atty. Gen., Helena, William Schreiber, Belgrade, for plaintiffs and respondents.
   CHIEF JUSTICE TURNAGE

Douglas A. Hegeman appeals his convictions and sentences of failing to display a motor vehicle registration on demand, disorderly conduct, and obstructing a police officer, following a bench trial in the Eighteenth Judicial District, Gallatin County. We reverse and remand.

Mr. Hegeman raises the following issues:

1. Did the District Court lack jurisdiction over this case by reason of the city court’s failure to enter sentence and judgment against Mr. Hegeman?
2. Did the District Court err when it denied Mr. Hegeman’s right to a jury trial because Mr. Hegeman failed to demand a jury trial in his notice of appeal, in violation of an unpublished court rule?
3. Was Mr. Hegeman charged and convicted of disorderly conduct for engaging in speech and gestures that are protected under the Montana and United States Constitutions?
4. Is § 45-7-302(1), MCA, on its face, unconstitutionally vague and overbroad, or is this statute unconstitutionally overbroad as it was applied to Mr. Hegeman?

On October 2, 1989, Belgrade City Police Officer John Woodland observed and stopped a vehicle that did not have a 1990 renewal sticker on its front license plate. Upon stopping the vehicle, the vehicle’s driver, later identified as Douglas Hegeman, loudly and vigorously challenged Officer Woodland’s authority to make the stop, claiming that the officer did not have probable cause.

Officer Woodland repeatedly requested Mr. Hegeman to produce his motor vehicle registration, his driver’s license, and his proof of insurance. Mr. Hegeman, however, repeatedly refused to provide Officer Woodland with the requested documentation. Furthermore, Mr. Hegeman exhibited an aggressive and abusive behavior toward Officer Woodland through a display of verbal intimidation and threatening arm gestures. Accordingly, Officer Woodland mentally reviewed possible defensive actions he could employ to defend himself.

After several minutes of this continued behavior, Officer Woodland repeatedly requested Mr. Hegeman to exit his vehicle. Mr. Hegeman repeatedly refused Officer Woodland’s requests. Mr. Hegeman finally exited his vehicle when Officer Woodland assured him that he would not be physically harmed.

Following his departure from his vehicle, Officer Woodland once again requested Mr. Hegeman to produce his motor vehicle registration, his driver’s license, and his proof of insurance. Mr. Hegeman responded that he did not know where his driver’s license was, but produced several documents from his vehicle’s glove compartment one of which was his motor vehicle registration. Attached to his motor vehicle registration was the 1990 renewal sticker, which should have been on the vehicle’s front license plate. At a later time, Mr. Hegeman produced his driver’s license and proof of insurance. Officer Woodman then inquired if Mr. Hegeman was in fact Douglas A. Hegeman; Mr. Hegeman did not respond. Officer Woodman then informed Mr. Hegeman that he was under arrest for disorderly conduct and effected the arrest.

On November 28, 1989, Mr. Hegeman, appearing pro se, was convicted of failing to display a motor vehicle registration on demand, disorderly conduct, and obstructing a police officer following a jury trial in city court. Immediately after the jury rendered its verdict, Mr. Hegeman filed a notice of appeal. Mr. Hegeman included a claim in his notice of appeal that “Until a decision is rendered by the District Court, the City of Belgrade is further barred from action toward the defendant pursuant to [§] 46-20-204(3)[,] [MCA].” The city court thereafter noted: “Request to continue sentencing until after appeal — approved.”

On February 9, 1990, Mr. Hegeman, again appearing pro se, was tried de novo at a bench trial before the District Court, and was again convicted of the charges. Mr. Hegeman received the following sentences: a $25.00 fine plus a $10.00 misdemeanor fee for failure to exhibit his motor vehicle registration when requested; two days in jail, a $100.00 fine, and a $10.00 misdemeanor fee for disorderly conduct; and thirty days in jail, a $300.00 fine, and a $10.00 misdemeanor fee for obstructing a peace officer. These sentences have been stayed pending this appeal by Mr. Hegeman.

1. Did the District Court lack jurisdiction over this case by reason of the city court’s failure to enter sentence and judgment against Mr. Hegeman?

Mr. Hegeman argues that because the Belgrade City Court never imposed sentence, or entered judgment against him, the District Court never obtained jurisdiction of Mr. Hegeman’s case. We agree.

A district court may have concurrent original jurisdiction or appellate jurisdiction over criminal matters involving misdemeanors. See Mont. Const., Art. VII, § 4 (jurisdiction of district courts); §§ 3-5-301 to -303, MCA (original jurisdiction and appellate jurisdiction of district courts). In particular, § 3-5-302(2), MCA, provides:

“The district court has concurrent original jurisdiction with the justice’s court in the following criminal cases amounting to misdemeanor:
“(a) misdemeanors arising at the same time as and out of the same transaction as a felony or misdemeanor offense charged in district court;
“(b) misdemeanors resulting from the reduction of a felony or misdemeanor offense charged in the district court; and
“(c) misdemeanors resulting from a finding of a lesser included offense in a felony or misdemeanor case tried in district court.” Except in these identified instances, a district court is limited to appellate jurisdiction of misdemeanor cases. Mont. Const. Art. VII, § 4; §§ 3-5-301 to -303, MCA. However, imposition of sentence and final judgment by a justice or city court are a prerequisite to appeal to a district court. See §§ 46-17-311(2), 46-20-104(1), MCA. Furthermore, a party may not consent to subject matter jurisdiction nor waive the want of jurisdiction. State v. Akers (1938), 106 Mont. 43, 57, 74 P.2d 1138, 1145.

Clearly, this case was not within the District Court’s original jurisdiction as it does not fall into any of the identified instances under § 3-5-302(2), MCA. And, this case was not within the District Court’s appellate jurisdiction because the city court failed to impose sentence and enter a final judgment against Mr. Hegeman. We therefore hold that the District Court lacked subject matter jurisdiction. Accordingly, we reverse the District Court’s sentence and judgment and instruct the District Court to remand this case to the Belgrade City Court for imposition of sentence and final judgment. Because we find reversible error in this first issue, we decline to discuss the other three issues raised by Mr. Hegeman in this appeal.

Reversed and remanded.

JUSTICES HARRISON, HUNT, McDONOUGH and TRIEWEILER concur.


author: JUSTICE HUNT

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. EUGENE WILBUR BOUSQUET, Defendant and Appellant.
    No. 90-373.
    Submitted on briefs Feb. 7, 1991.
    Decided Apr. 2, 1991.
    248 Mont. 53.
    808 P.2d 506.

      C.F. Mackay, Public Defender Project Office, Anaconda, for defendant and appellant.
    Marc Racicot, Atty. Gen., Deanne Sandholm, Asst. Atty. Gen., Helena, Christopher G. Miller, Powell County Atty., Deer Lodge, for plaintiff and respondent.
   JUSTICE HUNT

delivered the Opinion of the Court.

Eugene W. Bousquet appeals from the unanimous verdict of a twelve-member jury sitting in the District Court of the Third Judicial District, Powell County, Montana, Judge Mark Sullivan presiding. The jury found Bousquet guilty of possession of a deadly weapon by a prisoner, a felony. We affirm.

Bousquet presents the following issues:

1. Did the District Court err in denying Bousquet’s motion for a change of venue?
2. Was the evidence sufficient for the jury to conclude that Bousquet was guilty of possession of a deadly weapon by a prisoner?

Eugene W. Bousquet, an inmate at Montana State Prison in Powell Comity, was housed in upper A4 cell in the maximum security area of the prison. Inmates housed in A Block were allowed only minimum personal belongings, reading material, personal papers, writing materials, and hygiene items.

In the early morning hours of April 3, 1989, a correctional officer noticed that an inmate, who was not Bousquet, had a “passing string” in his possession. A “passing string” is a piece of sheet tom into strips or a collection of socks tied together used to pass items from one cell to another. The officer requested the inmate to give the passing string to him. When the inmate refused, the officer warned the inmates to stop mnning items. When an officer went into the area, he was greeted with a general disturbance of inmates banging, yelling, and kicking doors.

At this point, an officer called the shift sergeant who ordered a response team into the area. When a response team went into the area, the inmates reacted with more banging and yelling and used their shampoo bottles to squirt liquid at the officers through the cracks of the cell doors. The response team decided to do a “shakedown.” During a shakedown, each prisoner is asked to put his hands through the food door of his cell to be handcuffed, the prisoner is removed from his cell, and the cell is searched for weapons or contraband of any sort.

Bousquet’s cell was the third cell the officers “shook down.” Bousquet refused to put his hands through the slot to be handcuffed. Officers testified that they could see that Bousquet was holding a wet towel with a large knot at the end of it and a homemade knife, a “shank,” in his right hand. Bousquet would not drop the items when requested.

One of the officers called the Command Post and asked for an officer to bring mace. Bousquet, swinging the wet towel, refused to comply with several requests to drop the weapons, and the mace was sprayed in Bousquet’s face. According to correctional officers, when the mace was used, the shank dropped to the floor, was picked up by one of the officers, and given to Captain DeYott who placed the shank in the evidence locker. No attempt to identify fingerprints on the shank was made, since several officers had seen Bousquet with the shank.

Bousquet testified that he never possessed a shank in his cell. According to the testimony of another inmate, the inmate heard officers in Bousquet’s cell saying that they “were going to fix his [Bousquet’s] butt” and saw one of the officers place a shank under Bousquet’s mattress and then pretend to find it.

As a result of the incident, Bousquet was charged with possession of a deadly weapon by a prisoner. Bousquet’s motion for change of venue was denied on August 24, 1989. After a three-day trial, a jury found Bousquet guilty on September 7, 1989. The District Judge sentenced Bousquet to ten years in Montana State Prison, to be served consecutively to the sentence Bousquet was already serving. From the jury’s guilty verdict, Bousquet appeals.

I

The first issue is whether the District Court erred in denying Bousquet’s motion for a change of venue. Bousquet contends that the District Court should have granted his motion for a change of venue pursuant to § 46-13-203, MCA, which provides in relevant part:

“The defendant or the prosecution may move for a change of place of trial on the ground that there exists in the county in which the charge is pending such prejudice that a fair trial cannot be had in such county.”

Section 46-13-203(1), MCA. According to Bousquet, he could not have had a fair trial in Powell County for two reasons: (1) formation of Citizens Protective Association in Powell County, publicized in local newspapers; and (2) location of Montana State Prison in Powell County and near the town of Deer Lodge, areas of small population. Bousquet claims that the citizens of Powell County, exposed over the years to disturbances at the prison involving inmates and escaped prisoners, have become prejudiced, consciously or subconsciously, against prison inmates. Bousquet asserts that the formation of Citizens Protective Association demonstrates the prejudice of Powell county residents.

The standard for a showing of prejudice pursuant to § 46-13-203(1) is set forth in State v. Link (Mont. 1981), [194 Mont. 556,] 640 P.2d 366, 38 St.Rep. 982:

“[T]he rule is that an accused is entitled to a change of venue when it appears there are reasonable grounds to believe that the prejudice alleged actually exists and that by reason of the prejudice there is a reasonable apprehension that the accused cannot receive a fair and impartial trial.”

Link, [194 Mont. at 559,] 640 P.2d at 368, 38 St.Rep. at 985 (quoting People v. Berry (1967), 37 Ill.2d 329, 226 N.E.2d 591, 592-93). A district court’s denial of a motion for change of venue is not in error absent abuse of discretion by the district court. State ex rel. Coburn v. Bennett (1982), 202 Mont. 20, 29, 655 P.2d 502, 506.

Each motion for change of venue must be determined by the facts and circumstances of the particular case. Coburn, 202 Mont. at 29-30, 655 P.2d at 507. The facts of this case are similar to those in State v. Ritchson (1982), 199 Mont. 51, 647 P.2d 830. Ritchson moved for change of venue from Powell County because “during the past two years there has been an unusual number of escapes from the state prison and because of the anxiety which has been created from this situation a citizens protective association was reorganized ....” Ritchson, 199 Mont. at 54, 647 P.2d at 832. Ritchson claimed that the media attention given to the citizens’ group resulted in a “poison atmosphere in the community.”

A defendant seeking a change of venue because of adverse publicity must show (1) the news reports were inflammatory; and (2) the news reports actually inflamed the prejudice of the community to an extent that a reasonable possibility exists that the defendant may not receive a fair trial. State v. Miller (1988), 231 Mont. 497, 504-505, 757 P.2d 1275, 1280; Ritchson, 199 Mont. at 54, 647 P.2d at 832.

As in Ritchson, neither test was met here. Bousquet has not produced the news articles to which he refers and has not alleged any prejudicial statements or publicity directed at Bousquet personally. During voir dire of the jury panel, Bousquet’s counsel thoroughly and expertly questioned potential jurors and challenged for cause any potential jurors who had a connection with Montana State Prison or other possible prejudice. The District Court excused all those challenged for cause by defense counsel. Since no reasonable grounds existed to support Bousquet’s claim of actual prejudice, we hold that the District Court did not err by denying Bousquet’s motion for change of venue.

II

The second issue presented by Bousquet is whether the evidence was sufficient for the jury to conclude that he was guilty of possession of a deadly weapon by a prisoner beyond a reasonable doubt. The test for sufficiency of the evidence in a criminal case is whether the evidence, when viewed in a light most favorable to the prosecution, would allow any rational trier of fact to find the essential elements of the crime beyond a reasonable doubt. State v. Kaczmarek (1990), 243 Mont. 456, 461, 795 P.2d 439, 442; State v. Holman (1990), 241 Mont. 238, 241, 786 P.2d 667, 669.

In order to find Bousquet guilty of possession of a deadly weapon, the jury had to find that all three elements existed beyond a reasonable doubt: (1) the individual charged was a prisoner; (2) the individual knowingly possessed, actually or constructively, a deadly weapon at the time shown in the information; and (3) the individual possessed the weapon without lawful authority. Section 45-8-318, MCA. A review of the record shows sufficient evidence for a jury to find each of the elements beyond a reasonable doubt.

Bousquet points out that Bousquet denied having a shank in his cell and that another inmate testified that the shank was planted by correctional officers. The jury is the exclusive judge of a witness’ credibility. While a witness is presumed to speak the truth, the presumption can be overcome by any number of factors, including the demeanor of the witness while testifying, the character of the witness’ testimony, the bias of the witness, the extent of the witness’ opportunity to perceive the event, and other evidence contradicting the witness’ testimony. Section 26-1-302, MCA. We note that later testimony made questionable the other inmate’s ability to observe what occurred in Bousquet’s cell.

Bousquet also argues that some of the incident reports omitted mention of the shank. Omission of mention of the shank in some of the reports does not prove that a shank was not found. Three correctional officers testified that they saw the blade of a shank in Bousquet’s hand at the time shown in the information. Testimony also established the chain of custody of the shank from the time it was picked up from the floor of Bousquet’s cell.

We hold that sufficient evidence supported the jury’s verdict that Bousquet was guilty of possession of a deadly weapon by a prisoner beyond a reasonable doubt.

Affirmed.

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


author: JUSTICE WEBER JUSTICE HUNT

text:
    KENNETH DOIG, Claimant and Appellant, v. WILLIAM GRAVELEY, Employer and STATE COMPENSATION INSURANCE FUND, Defendant and Respondent.
    No. 90-573.
    Submitted on briefs Feb. 21, 1991.
    Decided April 2, 1991.
    248 Mont. 59.
    809 P.2d 12.

      Norman H. Grosfield, Utick & Grosfield, Helena, for claimant and appellant.
    Elizabeth A. Horsman, State Compensation Mut. Ins. Fund, Helena, for defendant and respondent.
   JUSTICE WEBER

delivered the Opinion of the Court.

Claimant, Kenneth Doig, appeals from the decision of the Workers’ Compensation Court finding him to be an independent contractor and denying him workers’ compensation benefits. We affirm.

The issues for our review are:

1. Did the Workers’ Compensation Court err in its finding that Mr. Doig was an independent contractor rather than an employee at the time of his injury?
2. Did the Workers’ Compensation Court err in its finding that Mr. Doig was not a statutory employee under the provisions of § 39-71-401(3), MCA?

Mr. Doig, a horseshoer, advertised his availability as an experienced horseshoer in veterinary clinics and feed stores in and around Deer Lodge, as well as in the Western Shopper newspaper. Mr. Doig set his own appointments, and shod the horses where they were kept, not at his own home. He was paid on a per horse basis in the amount of $30 per horse for shoeing and $20 per horse for trimming. He had not applied to the Division of Workers’ Compensation for a certificate to designate himself as an independent contractor.

Mr. Charles Graveley, of the Graveley Ranch, called Mr. Doig and arranged for him to come to the ranch to shoe three horses on May 21, 1988. This was the first time Mr. Doig had ever shod any of the Graveley Ranch horses. Mr. Graveley caught the horses and tied them to the corral for Mr. Doig to replace the shoes.

One of the horses, Hobo, had been diagnosed as having navicular disease, which is a hoof condition not uncommon in Western Montana. Mr. Graveley conveyed brief instructions to Mr. Doig that he be shod “short in the front and long in the heels.”

When Mr. Doig began his work with Hobo, Mr. Graveley left to buy horseshoes. When he returned to the ranch, he found Mr. Doig dazed, wandering around looking for a lens to his glasses. Mr. Doig told Mr. Graveley he had been kicked by the horse. Mr. Doig then went back to work finishing Hobo and filing the hooves of the second horse. Mr. Graveley stayed with Mr. Doig because of concern for his injury. Mr. Graveley did not assist with the horseshoeing, but only talked to Mr. Doig and was available if the second horse gave him trouble. Mr. Doig was trimming the third or fourth leg of the second horse when a sharp pain in his head caused him to fall to his knees. Mr. Graveley immediately drove him to the hospital in Deer Lodge.

Mr. Doig was 34 years old at the time of the accident. The injury has left Mr. Doig confined to a wheelchair and totally disabled.

Mr. Doig filed a claim for workers’ compensation benefits with the State Compensation Mutual Insurance Fund as an employee of the Graveley Ranch. Liability was denied, based on its conclusion that Mr. Doig was an independent contractor at the time of the accident. Mr. Doig filed a request for rehearing in the Workers’ Compensation Court claiming that he was an employee rather than an independent contractor. A rehearing was denied. Mr. Doig appeals the Workers’ Compensation Court’s decision.

I

Did the Workers’ Compensation Court err in its finding that Mr. Doig was an independent contractor rather than an employee at the time of his injury?

This appeal presents both questions of law and questions of fact. The parties agree that the proper standard of review in such cases was set out in Solheim v. Tom Davis Ranch (1984), 208 Mont. 265, 272, 677 P.2d 1034, 1037-1038:

“Where both factual determinations and legal conclusions are challenged, two standards of review apply. To the extent that factual determinations are questioned, we must apply the test set forth in Sharp and defer to the fact-finder where substantial evidence exists to support the determinations. When, however, an issue raises only a question of law, this Court is free to reach its own conclusions from the evidence presented.”

Mr. Doig maintains that the Workers’ Compensation Court erred in concluding that he was an independent contractor rather than an employee. The applicable statute, § 39-71-120, MCA (1987), defines “independent contractor”:

“(1) An ‘independent contractor’ is one 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.
“(2) An individual performing services for remuneration is considered to be an employee under this chapter unless the requirements of subsection (1) are met.”

The key element is the control factor. There are four factors to consider when determining a right of control in a given situation:

(1) Direct evidence of right or exercise of control;
(2) Method of payment;
(3) Furnishing of equipment; and
(4) Right to fire.

Sharp v. Hoerner Waldorf Corp. (1978), 178 Mont. 419, 584 P.2d 1298.

Direct Evidence of Right or Exercise of Control

Mr. Doig maintains that the instructions as to how Hobo should be shod “short in the front and long in the heels” established that Mr. Graveley was in control. He also contends that the fact he would always defer to the wishes of the horse owner and proceed only on the instructions of the rancher revealed control by Mr. Graveley.

State Fund maintains that the instructions as to how a horse should be shod are nothing more than control over those few matters necessary to insure a satisfactory end result. State Fund further maintains that the fact that Mr. Doig was hired on a one-day, 2-3 hour horseshoeing job where there was no evidence that a continuing employment relationship was intended to exist past the completion of the job, is indicative of an independent contractor. We agree. Therefore, we conclude that there is substantial evidence to support the conclusion of the court that the first factor indicated an independent contractor status.

Method of Payment

Mr. Doig maintains that his method of payment on a per horse basis is an indication of employee status. This method of payment is the standard for horseshoers.

State Fund urges that given the method of payment and the fact that this was the only time Mr. Doig had worked on the Graveley Ranch, it cannot be said the Mr. Doig was under the control of Mr. Graveley.

The Workers’ Compensation Court held that there was no payment on a per-hour, per-week or per-month basis that would indicate an employee status, and that “payment on a completed project basis is consistent with, but not conclusive of, an independent contractor status.” The court also found that at the time of the injury, Mr. Doig had shod one horse and trimmed all four feet of another horse. Mr. Graveley paid Mr. Doig on the per-unit basis of one horse shod and one horse trimmed. We conclude that substantial evidence supports the Workers’ Compensation Court’s conclusion.

Furnishing of Equipment

Mr. Doig maintains that the type and manner of the equipment furnished for the shoeing operation, such as those provided by the ranch in this case, are of significant importance as a contribution by the horse owner. He argues that while he did bring his own tools to perform the services, these items were of no greater significance than the facilities, halters, and shoes provided by the Graveley Ranch. Mr. Doig relies on Larson’s The Law of Workman’s Compensation, by Arthur Larson, for the proposition that when an employer furnishes valuable equipment, an employment relationship almost invariably exists.

State Fund maintains that the only “tools” or “equipment” allegedly provided by the Graveley Ranch are generic ranch items, not analogous to the professional tools Mr. Doig brought to the ranch. The Ranch provided a halter and lead rope, a corral fence and horseshoes. State Fund urges that the items provided by the Graveley Ranch are not “equipment” as contemplated by the Larson treatise. Mr. Doig provided nippers, a nail clincher, a hammer, anvil, nails, rasps and horseshoeing chaps. State Fund argues that the tools provided by Mr. Doig himself are the tools of the trade.

The fact that a horse owner supplies a halter for his horse is not indicative of supplying “equipment” for the horseshoer. The halter itself is not part of horseshoeing equipment anymore than a corral or enclosure that the horse is kept in. We conclude that substantial evidence exists to support the Workers’ Compensation Court’s holding that the tools necessary to perform the service were furnished by Mr. Doig, indicating an independent contractor relationship.

Right to Fire

Mr. Doig maintains that the right existed for either party to end the operation without liability, a fact not consistent with the concept of an independent contractor relationship. He argues that Mr. Graveley could have terminated the horseshoeing for any reason with no obligation to pay.

State Fund maintains that Mr. Doig’s argument disregards the nature of both the horse-owner’s property interest and of the horseshoeing operation itself. State Fund contends that an incompetent horseshoer can lame a horse. It argues that a horse owner cannot be expected to stand quietly by while a horseshoer lames his horse. State Fund maintains that the Workers’ Compensation Court correctly held that an independent contractor can be terminated if the services are not being performed to the accepted standards. We agree. We affirm the Workers’ Compensation Court’s conclusion that the right to terminate services of the claimant was consistent with independent contractor status.

Independent Occupation

The second part of the test set forth in § 39-71-120(l)(b), MCA (1987), requires that the worker must be engaged in an independently established trade, occupation, profession, or business. Mr. Doig maintains that as part of his general ranch work throughout his working life, he has done horseshoeing. Mr. Doig argues that as a part-time horseshoer, he was not engaged in an independent occupation.

State Fund maintains that there is substantial evidence to support the Workers’ Compensation Court’s finding that horseshoeing is itself an independently established trade. State Fund cites Taylor v. Local No. 7, Int’l Union of Journeyman Horseshoers (4th Cir. 1965), 353 F.2d 593, for its holding that horseshoers were not employees of the horse trainers and owners. State Fund contends that Mr. Doig was clearly engaged in an independent trade or business as an independent contractor because he: (1) publicly advertised his services as a horseshoer; (2) brought his own tools to the work place; (3) maintained an appointment book in the course of his business; (4) had no social security, FICA or other deductions or withholding by Mr. Graveley or any of the other ranchers for whom he had shod horses; and (5) continued horseshoeing in the area prior to his injury even though he had begun full-time work at the Montana State Prison two weeks before his injury. We agree with the Workers’ Compensation Court’s conclusion that Mr. Doig met the independent occupation test.

We affirm the conclusion of the Workers’ Compensation Court that Mr. Doig was an independent contractor at the time of his injury.

II

Did the Workers’ Compensation Court err in its finding that Mr. Doig was not a statutory employee under the provisions of § 39-71-401(3), MCA?

Section 39-71-401(3)(a), MCA (1987), provides:

“(3)(a) A sole proprietor or a working member of a partnership who holds himself out or considers himself an independent contractor ... must elect to be bound personally and individually by the provisions of compensation plan No. 1, 2, or 3, but he may apply to the division for an exemption from the Workers’ Compensation Act for himself.” (Emphasis added).

Mr. Doig contends that during the 1983 legislative session, the Division of Workers’ Compensation attempted to address the problem of independent contractors who seek to become employees after an industrial injury. He urges that it was the position of the Division that the solution to this recurring problem was to establish a system whereby any person who wished to be exempt from workers’ compensation coverage had to seek certification from the Division as an independent contractor. If so certified, the person in question would then be exempt from coverage under the Workers’ Compensation Act. Mr. Doig urges that if a person hired someone to do work for him or her, such person would be required to ask if the prospective worker had a certificate of exemption as an independent contractor or could show proof of coverage.

In the present case, Mr. Doig did not have coverage on himself, and did not have a certificate of exemption from the Division. Mr. Graveley did not inquire as to Mr. Doig’s exemption or coverage. Therefore, Mr. Doig maintains that he is to be treated by the insurer as an employee.

The Workers’ Compensation Court addressed this issue as follows:

“As enacted, Section 39-71-401(3)(a), MCA (1987) allows an independent contractor to elect to be bound by the provisions of compensation plan No. 1, 2, or 3, or he may apply to the Division for an exemption from the Workers’ Compensation Act for himself. Nowhere in the statutes or the Division rules is the independent contractor exemption from workers’ compensation coverage made specifically mandatory in order for independent contractor status to exist. No Court has held that any independent contractor without such a certificate is automatically an employee and such an interpretation is not warranted from a reading of the statute or its history since enactment.

“Administrator Gary Blewett’s statement in favor of HB 277 suggested a result which was not achieved by the Division of Workers’ Compensation rules adopted to implement this legislation. Such administrative ruled did not create a ‘statutory employee’ if an independent contractor failed to obtain a certificate of exemption in ARM 24.29.706 (Eff. 6/30/84). In fact, the opposite result was reached in ARM 24.29.706(5), which states:

“ ‘The exemption provided for under this rule is for workers’ compensation purposes. The fact that an independent contractor neither applies for nor receives an exemption does not imply independent contractor status.’
“Had the legislature intended in 1983 ... that an independent contractor exemption was to be mandatory, it could have been clearly stated. Absent such specific language in Sections 39-71-401, 39-71-118 and 39-71-120, MCA, this Court must conclude that failure to obtain an independent contractor exemption does not create a ‘statutory employee’ by operation of law.”

As the lower court explained, the failure to obtain a certificate of exemption did not specifically create a statutory employee. In the construction of a statute, a judge is “simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted ... ” § 1-2-101, MCA. We agree with the interpretation of the Workers’ Compensation Court. We hold that the Workers’ Compensation Court did not err in its finding that Mr. Doig was not a statutory employee under the provisions of § 39-71-401(3), MCA.

Affirmed.

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

JUSTICE HUNT

dissenting:

I dissent. I do not agree with the analysis and result of this case. I would hold that Mr. Doig was not an independent contractor but was an employee of Mr. Graveley. I would reverse the Workers’ Compensation Court.