author: MR. JUSTICE SHEEHY MR. JUSTICE HARRISON,

text:
    KRISTIE ANN HALSE, Plaintiff and Appellant, v. JAMES P. MURPHY, Defendant and Respondent.
    No. 88-351.
    Submitted on Briefs Feb. 3, 1989.
    Decided June 8, 1989.
    774 P.2d 418.
    Michael E. Wheat, Cok & Wheat, Bozeman, for plaintiff and appellant.

      Douglas Buxbaum, Poore, Roth & Robinson, Butte, for defendant and respondent.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

Appellant Kristie Ann Halse appeals to this Court from a summary judgment of the Second Judicial District, Silver Bow County, in favor of respondent, Dr. James Murphy on a medical malpractice action which Halse had instituted on May 3, 1984.

Halse alleged that Dr. James Murphy was negligent when he failed to externally immobilize Halse’s fractured arm after he had removed a rod which he had inserted into the ulna bone of her right arm. The fracture was a result of a car accident. The initial medical records, entered when she was admitted to the hospital following the accident, indicate that Halse was 19 years old and well-nourished, appeared to be hypovolemic and had resultant hypovolemic shock; had a comminuted compound Monteggia’s fracture of the ulna; had a ruptured bladder and gross hematuria; had multiple face contusions with closed head injury; was comatose; and had multiple pelvic fractures. Dr. James Murphy repaired her right arm fracture. Two other physicians attended to the bladder repair and repair of inter-abdominal organs that were hemorrhaging. The fractures to the ulna could not be repaired by casting and surgery was necessary to repair the ulna and to insert a rod.

Halse was transferred to St. Peter’s Hospital in Helena on December 23, 1980 because she showed persistent renal failure. She underwent multiple renal dialysis procedures there. Her urinary function returned and she was transferred back to St. James Hospital in Butte where “she was begun on physical therapy.” Because of some persistent problems relating to nursing staff orders, the family transferred Kristie to the Sheridan Hospital in Sheridan, Montana, eight days later, on January 25, 1981. Her private physician accepted continuing care of the appellant.

In March, 1981, two and a half months after her fracture was repaired, Halse began experiencing palsy in her right hand. Dr. Murphy referred her to Dr. Charles Jennings, an orthopedic surgeon practicing in Great Falls, who specializes in hand problems, for a second opinion. Dr. Jennings’ medical records indicate that he removed the cast put on by Dr. Murphy in order to completely evaluate Halse’s injuries and to get good X-rays. The X-rays indicated that there was some displacement of the proximal fracture fragment which resulted in some relative shortening of the ulna; and that there was some callus at that site and that the distal fracture site showed “healing.” The medical records also stated that Halse was having considerable difficulty with elbow pain due to protrusion of the pin; and that Halse could not flex her elbow more than 30 degrees due to the pain.

Dr. Jennings wrote to Dr. Murphy stating his opinion that Halse would probably recover from the nerve palsy and that Halse had “not developed significant deformity” from this palsy. Dr. Jennings recommended that the pin be removed from the forearm because it was such an irritation to her. He also recommended that if the fracture were not stable enough without immobilization, Halse should be placed in an arm cast again; and that if the proximal fracture fragment appeared to be significantly unstable, he would open it, realign it and fit it with a plate and screws. Dr. Jennings had his occupational therapist fabricate a resting splint to be worn at night which would hold Halse’s wrist in slight extension and support the joints at 45 degree flexion. Dr. Jennings encouraged active motion of the wrist and fingers to regain range of movement.

Two weeks after consulting Dr. Jennings, Halse again saw Dr. Murphy. One week after that, on March 31, 1981, Halse was taken to the operating room at St. James where Dr. Murphy removed the pin under regional anesthetic. The hospital medical records indicate that a stab wound was made over the tip of the rod; an extractor was then screwed into the rod; and it was removed by means of a mallet. The wound was irrigated and the skin was closed with two sutures of stainless steel wire. A sterile dressing was applied and Halse left the operating room awake and in good condition to go to the ward. No bleeding occurred. Dr. Murphy did not recast the arm but gave Halse a removable splint to use as she deemed necessary.

Dr. Murphy continued to see Halse after the removal of the pin. It is at this stage that Halse, and subsequently Dr. Humberger, allege that Dr. Murphy was negligent. Halse asserts that Dr. Murphy did not X-ray the arm after removal of the rod, nor did he palpate the arm. Halse asserts that had he done so the unhealed fracture in the arm would have been detected. Dr. Humberger, in his late affidavit, states that if these facts are true, Dr. Murphy was negligent.

Halse moved to Great Falls in the summer of 1981. While there, she consulted Dr. Jennings’ associate, Dr. Bloemendaal and a Great Falls surgeon, Dr. Mungas.

On September 9, 1981, she was seen by Dr. Murphy in Bozeman and again on October 23, 1981. Murphy’s records show no complaint about her arm.

One year later, on October 29, 1982, Halse consulted physicians at the orthopedic department of the University of Washington. She was seen there by Dr. Theodore Greenlee. Dr. Greenlee X-rayed her arm and found that there was a non-union of the proximal ulnar fracture and possibly of the middle one-third of the distal ulnar fracture. He recommended, a bone graft and plating of her fracture. On November 9, 1982, Halse underwent surgery at the University of Washington. The two ulnar non-union sites were debrided and plates were attached to the bone.

On April 29, 1983, Halse was seen by Dr. Humberger in his office. Dr. Humberger’s records indicate that Halse’s wound was well healed. However, Dr. Humberger indicated that Halse had contracted osteomyelitis and that there “is a potential for the infection to flare up at any time.” Dr. Humberger discontinued Halse’s antibiotic treatment for the osteomyelitis on June 10, 1983. On July 22, 1983, Halse returned to Dr. Humberger with complaints of an aching sensation and tenderness in the ulna. The X-rays showed the wound to be well healed but there was a small lytic area beneath the plate which had been attached in Seattle. For this reason, Humberger put Halse back on Tegopen, a penicillin drug.

Humberger suggested removal of the plates and curettage of the bones. This was done on August 10, 1983. On August 22, 1983, the surgical staples were removed. The wound appeared well healed. Halse was advised, “warm soaks, active range of motion exercises, proper wound care, minimal resistance activity.” Two weeks later, on September 6, Dr. Humberger’s records indicate that the wound was healing well. He did not feel X-rays were necessary. He advised the same care of the arm as before and asked Halse to come back in one month.

One month later, October 6, Dr. Humberger’s records indicate that Halse bumped her arm while driving. She now had a transverse crack across the ulna and a small fracture through one of the screw holes. Dr. Humberger advised her to continue wearing her present splint, to perform range of motion exercises to the elbow and to remove the splint while bathing.

On October 25, Halse was started back on Tegopen again by Dr. Blackwood, an associate of Dr. Humberger, because she felt “the infection might be back.”

On November 3, Halse entered Dr. Humberger’s office without her brace and said she had no symptoms referable to her forearm. On physical examination, she was tender over the ulna but had good flexion/extension. The X-rays showed that the midshaft ulna fracture was in good position and alignment, but the bone was not healed. Dr. Humberger advised Halse of the necessity of wearing the splint to protect the ulna in hope that it would heal. He expressed his disappointment that Halse had not been wearing the splint. He noted that Halse was very discouraged in regard to the prolonged treatment necessary for her arm. Dr. Humberger advised her to wear her brace to protect her arm.

On December 13, 1983, X-rays showed that the new fracture was not healing.

On April 30, 1984, Halse commenced this action against Dr. Murphy. An answer was filed on August 8, 1984. Extensive discovery took place over a two year period. On July 16, 1987, appellant requested a trial date. Trial was set for September 22, 1987. On August 28, respondent made a motion for summary judgment. On September 1, twenty-one days before the trial date, Halse’s counsel withdrew. Two months later, on November 23, 1987, Attorney Michael Wheat requested, in writing, 30 additional days to evaluate Halse’s case and to respond to respondent’s motion for summary judgment. On January 1, 1988, respondent again noticed his motion for summary judgment and the motion was heard on February 5, 1988. Appellant again requested additional time to have “the file reviewed by a physician for an opinion.” The court again gave appellant thirty additional days (until March 6, 1988) to respond to the summary judgment motion.

On March 10, 1988, the respondent’s motion for summary judgment was granted. On April 7, 1988, Dr. Frank Humberger, in a written affidavit, stated, it was his opinion that, if facts were correct, that it was his opinion that Dr. Murphy was negligent in his care and treatment of Halse.

On April 21, 1988, appellant’s counsel filed a motion for relief from the judgment. Michael Wheat, appellant’s counsel, testified by affidavit that Halse had made every effort to locate expert testimony in her medical malpractice case. Halse was unable to elicit an opinion from Dr. Humberger concerning Dr. Murphy’s care and treatment of her. Appellant’s counsel contacted various medical doctors in California and New Mexico in an effort to obtain an expert opinion but to no avail.

Halse’s motion for relief from final judgment was under the provisions of Rule 60(b), M.R.Civ.P. That rule provides:

“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:
“. . . (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b).”

Rule 59(b) provides:

“Time for motion. A motion for a new trial shall be served not later than 10 days after service of notice of the entry of the judgment.”

The first issue before this Court is whether an opinion of a trial expert, offered for the first time after final judgment and based upon a fact asserted by the plaintiff and within her knowledge prior to the judgment, can constitute “newly discovered evidence” under Rule 60, M.R.Civ.P. We see no reason to distinguish between opinion evidence and other kinds of evidence, if the opinion evidence itself meets the tests ordinarily required of newly discovered evidence.

This case is not a judgment as a result of a trial on the merits. The negligence issue presented by Halse was never litigated. The purposes of our Rules of Civil Procedure are to speed up court processes and facilitate the deciding of cases on their merits.

The new rules encourage disposition of cases quickly and on the merits, and it is a serious matter when a party moves to have a case disposed of on grounds other than the merits. Rambur v. Diehl Lumber Co. (1964), 144 Mont. 84, 394 P.2d 745.

6A J. Moore, J. Lucas & G. Grotheer, Jr. Moore’s Federal Practice ¶ 60.23 [3] (2d ed. 1983) states:

“. . . [I]f new evidence is discovered, or by due diligence could have been, in time for a new trial under Rule 59(b), then a motion for a new trial must be made within that time; and that party cannot delay beyond that time and seek relief under Rule 60(b)(2) .... If so, the motion must be made within a reasonable time, and, in any event, not later than one year after the ‘judgment, order or proceeding was entered or taken.’ ”

6A J. Moore, J. Lucas & G. Grotheer, Jr. Moore’s Federal Practice ¶ 60.23 [4] (2d ed. 1983) states:

“[F]or relief to be granted under Rule 60(b)(2), the failure to produce the evidence at the trial must not have been caused by the moving party’s lack of due diligence.”

The failure to produce the evidence at the trial must not have been caused by the moving party’s lack of due diligence. See Kansas City Area Transportation v. State of Missouri (8th Cir. 1981), 640 F.2d 173. For years, Halse’s counsel sought extensions to obtain an expert who would testify in her behalf. It would be unjust for this Court to deny Halse her day in court.

The history of Rule 59(b) has aided us in making this decision.

“Original Rule 59(b) made an exception for a motion for new trial on the ground of newly discovered evidence by providing that such a motion could be made within the time allowed for appeal, which, at that time, was three months as a general proposition. The grounds for substantial relief from a final judgment under original Rule 60(b) did not originally include newly discovered evidence . . .; The 1946 revision of the Rules did the following things. It eliminated the exception in Rule 59(b) relative to a motion for a new trial on the ground of newly discovered evidence, so that a motion under Rule 59 on this ground, as on any other ground, must be served not later than 10 days after the entry of judgment. (Emphasis added.)

“. . .If new evidence is discovered, or by due diligence could have been, in time to move for a new trial under Rule 59 then a party is subject to the 10 day limit of Rule 59; and such a timely motion destroys the finality of the judgment for purposes of appeal. Otherwise a party may move under Rule 60(b) within a reasonable time, but not more than one year after the judgment was entered. Such a motion under 60(b) does not affect the finality of the judgment or suspend its operation.”

6A J. Moore, J. Lucas & G. Grotheer, Jr. Moore’s Federal Practice ¶ 59.04 (2d ed. 1983).

The evidence must be admissible and credible, must be of such a material and controlling nature as will probably change the outcome. 6A J. Moore, J, Lucas & G. Grotheer, Jr. Moore’s Federal Practice ¶ 60.23 [4]. Twenty-four days after respondent’s summary judgment was granted, Dr. Humberger testified by signed affidavit that when he gave his deposition testimony on December 22, 1986, he was unable to render an opinion concerning Kristie’s case because he had not had the opportunity to review Dr. Murphy’s notes and records. This fact shows the requisite diligence on Halse’s part.

The belated evidence submitted by Dr. Humberger would have precluded the granting of the summary judgment. For this reason, the summary judgment must be reversed.

The second issue before this Court is whether this expert opinion, if it is “newly discovered evidence,” would change the outcome where it simply shows that the defendant was negligent but fails to show that such negligence was the proximate cause of any injury. In our court system, it is the jury, not witnesses, who decide such questions of negligence.

We reverse the judgment and remand this action to the District Court for further proceedings.

MR. JUSTICES WEBER, McDONOUGH and HUNT concur.

MR. JUSTICE HARRISON,

dissenting.

I dissent and would find that the affidavit testimony of Dr. Humberger does not constitute “newly discovered evidence” which entitles appellant to relief from judgment.

In December, 1980, Halse was involved in an automobile accident in which she suffered, among several other injuries, a tri-segmental fracture of her right forearm. Halse was treated by Dr. Murphy, an Orthopedic surgeon practicing in Butte, Montana. Dr. Murphy treated the fracture by placing a metal rod through the ulna. After numerous medical visits to Dr. Murphy and after examination by another Orthopedic surgeon in Great Falls, Montana, Dr. Murphy removed the rod from Halse’s arm on March 31, 1981.

Halse was examined on October 29, 1982, by Dr. Theodore Green-lee of University Hospital, Seattle, Washington. From X-rays, Dr. Greenlee discovered Halse had a “nonunion of her proximal ulna fracture as well as possibly a middle one-third distal one-third ulnar fracture.” On November 9,1982, Dr. Greenlee repaired the two nonunion sites with plates and screws. After returning to Montana, Halse was under the care of Dr. Frank Humberger, an Orthopedic surgeon practicing in Bozeman, Montana.

In October, 1983, Halse bumped her right arm while traveling to Denver, Colorado and suffered a transverse crack across the ulna. However, this crack apparently is unrelated to the original fractures suffered in the 1980 automobile accident. Halse remained under the care of Dr. Humberger for the treatment of the fracture.

Halse instituted a medical malpractice action against Dr. Murphy on May 3, 1984. The Complaint alleged Dr. Murphy removed the metal rod before her arm healed, and that Dr. Murphy negligently failed to X-ray or otherwise determine whether the fracture had healed before he removed the metal rod. Additionally, Halse alleged Dr. Murphy negligently failed to externally immobilize the arm so as to permit it to heal, but merely gave Halse a splint to wear as needed.

After interrogatories were propounded and depositions noticed and taken by both parties, the preliminary pretrial order set an August 7, 1987 deadline for notices of depositions. On August 25, 1987, Murphy moved for summary judgment on the grounds that Halse’s claim “fails for fundamental want of proof” because none of Halse’s expert witnesses testified applicable standards of medical care were violated.

On September 3, Halse’s original counsel moved to withdraw from the case and for a continuance. The District Court vacated the September 4 hearing date scheduled for Murphy’s summary judgment motion. On January 22, 1988, counsel for Murphy rescheduled the hearing for February 5, 1988, and sent notice of the hearing to Halse’s original counsel. On February 4, attorney Michael Wheat moved the court for a continuance and submitted his affidavit in which he stated he had not yet decided whether to represent Halse. He stated he was attempting to find a doctor who would review the medical records and render an opinion about Murphy’s care and treatment of Halse.

During the brief hearing on February 5, 1988, Mr. Wheat again informed the Judge he was not counsel of record but needed time to find an expert witness.

“THE COURT: Mr. Wheat said they have an expert that might qualify [to testify against Dr. Murphy].

“MR. WHEAT: This is an expert independent of any of the experts that Mr. Buxbaum has had notice of up to this date.

“THE COURT: OK. Well, something I don’t see is an order dismissing . . . [original counsel]. You haven’t taken the position of being counsel of record.

“MR. WHEAT: No.

“THE COURT: I think in all fairness to the Plaintiff here, we are going to allow Mr. Wheat time to confirm that doctor. When can you do that, Mr. Wheat?

“MR. WHEAT: I think it can be done within thirty (30) days . . . I think we can easily be prepared to know within thirty days.

“THE COURT: I will give you a continuance here but I would like to hear in thirty (30) days.

“MR. WHEAT: You will, your honor.

“THE COURT: Nevertheless if you don’t come up with some evidence from an expert that there is a case of malpractice here, you are going to be out of Court.

“MR. WHEAT: I understand that.

“THE COURT: There is no chance going to trial if you can’t come up with an expert.

“MR. WHEAT: Absolutely, your honor, and I have explained that to Mrs. Halse. She understands.

“THE COURT: OK, you have thirty (30) days.”

When no evidence was forthcoming, Judge Sullivan granted Murphy’s motion for summary judgment on March 10, 1988. Final judgment was entered in favor of Murphy on March 14, 1988.

On April 22, 1988, Halse filed a Motion for Relief From Judgment, pursuant to Rule 60(b), M.R.Civ.P., “on the strength of her Affidavit . . . and the newly discovered evidence set out in the Affidavit of Frank W. Humberger, M.D. . . .” On May 2, 1988, the District Court ordered that Murphy would have until May 31, 1988, to respond to the motion.

Murphy responded to the motion by brief on May 19, 1988 and the District Court ordered a July 1, 1988 hearing on the motion. On June 27, 1988, Murphy requested the July 1 hearing be vacated. Under Rule 60(c), Murphy argued, the motion was deemed denied since 45 days had elapsed from the date the Rule 60(b)(2) motion was made, which put the motion out of the District Court’s jurisdiction.

On June 29, 1988, the District Court vacated the hearing on the ground the motion was deemed denied. Halse appealed the denial of her Rule 60(b)(2) motion to this Court.

Rule 60(b), M.R.Civ.P., provides in part:

“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:
“(2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b) . . .”

In Kartes v. Kartes (1977), 175 Mont. 210, 214, 573 P.2d 191, 193, this Court stated the basic criteria for determining whether to grant relief from judgment under Rules 59 and 60, M.R.Civ.P.:

“1. The substantial rights of the party moving for new trial must be materially affected.
“2. The ‘newly discovered’ evidence sought to be introduced must be material to the issue involved in the trial.
“3. The ‘newly discovered’ evidence must be such as could not have been discovered and produced at trial with the exercise of reasonable (or ‘due’, per Rule 60, M.R.Civ.P.) diligence, or could not have been discovered by reasonable diligence in time to move for a new trial under Rule 59, M.R.Civ.P.” (Emphasis added.)
Additionally, in.Kerrigan v. Kerrigan (1943), 115 Mont. 136, 144, 139 P.2d 533, 535, this Court correctly noted that the burden is on the moving party to show:

“(1) That the evidence must have come to the knowledge of the applicant since the trial; (2) that it was not through want of diligence that it was not discovered earlier; (3) that it is so material that it would probably produce a different result upon another trial; (4) that it is not cumulative merely — that is, does not speak as to facts in relation to which there was evidence at the trial . . .”

The essence of Halse’s “newly discovered” evidence is the affidavit testimony of Dr. Humberger, in which he gives an opinion based upon circumstances which were available for his consideration prior to the grant of summary judgment. Humberger’s affidavit states in part:

“3. On December 22, 1986, I gave deposition testimony concerning my care and treatment of Kristie. During that deposition, I was unable to render an opinion concerning the care and treatment of Kristie by Dr. James P. Murphy because I had not had the opportunity to review Dr. Murphy’s medical notes and records.
“4. Since the date of my deposition, I have reviewed all of Dr. Murphy’s medical notes and records related to his care of Kristie, including an X-ray taken on March 24, 1981, and I have also reviewed the Affidavit of Kristie, wherein she states that Dr. Murphy failed to palpate her arm following removal of the rod on March 31, 1981. Based on my review of the March 24, 1981, X-ray of Kristie’s arm, Dr. Murphy’s medical notes and records, and Kristie’s Affidavit testimony that Dr. Murphy did not clinically assess the stability of her arm by palpating her arm following removal of the rod, and assuming this fact to be true, then it is my opinion that Dr. Murphy was negligent in his care and treatment of Kristie, and failed to exercise that degree of care and skillfulness ordinarily used in like cases by other doctors practicing in Dr. Murphy’s specialty.” (Emphasis added.)

Halse claims that, despite her “previous diligent attempts to obtain an opinion,” Dr. Humberger would not render an opinion prior to entry of summary judgment. However, Humberger’s own affidavit states that he was unable to render an opinion because he did not have Murphy’s notes and records. I can only assume that Humberger would have rendered his opinion had he been given the opportunity to review those records and consider the testimony of Halse.

There is no evidence before this Court showing that Humberger was asked to give his opinion based upon a hypothetical set of circumstances prior to entry of judgment. If, based upon those hypothetical circumstances, Humberger had been of the opinion Murphy was not negligent, but, subsequent to the entry of summary judgment, changed that opinion, Halse could more plausibly argue this constitutes “newly discovered” evidence. However, notwithstanding Halse’s label of “conspiracy of silence,” Humberger’s opinion, whatever it may have been, could have been discovered prior to entry of summary judgment.

Halse argues the District Court’s deemed denial of her Rule 60(b)(2) motion constitutes an abuse of discretion. I disagree. It is my conclusion that Humberger’s affidavit testimony does not constitute newly discovered evidence under Rule 60(b)(2), M.R.Civ.P., and I would find no abuse of discretion.

I would affirm the decision of the District Court.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICE GULBRANDSON join in the foregoing dissent of MR. JUSTICE HARRISON.


source: Caselaw Access Project

author: MR. JUSTICE HUNT

license: Public Domain

text:
    FRANK HANZEL, d/b/a Town & Country Electric & Building Supplies, Plaintiff and Appellant, v. BRIAN MARLER and U.S.A. Investments, Inc., Defendant and Respondent.
    No. 88-554.
    Submitted on Briefs March 2, 1989.
    Decided June 8, 1989.
    774 P.2d 426.
    Torger S. Oaas, Lewistown, for plaintiff and appellant.
    J. David Penwell, Bozeman, for defendant and respondent.
   MR. JUSTICE HUNT

delivered the Opinion of the Court.

Frank Hanzel, plaintiff, appeals from the denial of his motion for a new trial under § 25-11-103, MCA, by the District Court of the Tenth Judicial District, Fergus County. We affirm and remand for a determination of the amount of attorney fees.

The issues raised on appeal are:

1. Whether the District Court erred in denying plaintiff’s motion for a new trial based on irregularities in the proceedings.

2. Whether the District Court erred in failing to award Hanzel his attorney fees.

Hanzel owns and operates an electrical contracting business in Lewistown, Montana. Defendant, Brian Marler, entered into an oral contract with Hanzel to perform electrical contracting work and other repairs on an apartment building owned by Marler in Lewistown.

During the course of the contract, Marler paid Hanzel $21,000.00. Hanzel claimed that he was entitled to another $6,725.00 for additional labor and materials he supplied. Hanzel brought an action in the District Court on December 10, 1987, to foreclose on a mechanic’s lien that he filed on Brian Marler’s property in Lewis-town for the disputed $6,725.00. On the morning before trial, Marler made a motion in limine to exclude certain invoices from evidence based on Hanzel’s failure to comply with Rule 34, M.R.Civ.P. The motion was granted. A bench trial commenced and judgment was entered in favor of Hanzel for $1,066.40 for a bill due and owing by Marler to Hanzel. Each party was ordered to pay its own attorney fees.

On June 22,1988, Hanzel filed a motion for a new trial pursuant to § 25-11-103, MCA, based on irregularities in the proceedings. The District Court failed to rule on Hanzel’s motion within 45 days, and under Rule 59(d), M.R.Civ.P., the motion was deemed denied. Hanzel appeals.

Granting or refusing of a motion for a new trial rests in the trial court’s discretion. O’Brien v. Great Northern R.R. Co. (1966), 148 Mont. 429, 421 P.2d 710, cert. denied 387 U.S. 920, 87 S.Ct. 2034, 18 L.Ed.2d 974; State v. Barovich (1963), 142 Mont. 191, 382 P.1d 917. The “motion must be viewed in the light most favorable to the party against whom the motion is directed.” Dieruf v. Gollaher (1971), 156 Mont. 440, 446, 481 P.2d 322, 325. Should the court grant a new trial, “the error complained of must be an error materially affecting the substantial rights of the aggrieved party.” Giles v. Flint Valley Forest Products (1979), 179 Mont. 382, 388, 588 P.2d 535. Further, under Rule 61, M.R.Civ.P., the court must determine whether refusal to grant a motion for a new trial would appear inconsistent with substantial justice.

At the hearing on motion for a new trial, Hanzel argued that the crux of his case depended on the introduction of the disputed invoices in order to prove the full extent of damages. He argued that excluding them materially affected the outcome of his award, and therefore, he should be granted a new trial. Marler’s counsel stated, in response, that Hanzel failed to comply with the rules of discovery for request for production of documents under Rule 34, M.R.Civ.P. At Hanzel’s deposition, held the week before trial, Hanzel agreed that he would produce further invoices before trial. Marler stated that the invoices were not presented to him until the morning of trial which was untimely. He argued that this failure to comply with discovery was properly sanctioned by the District Court under Rule 37(b), M.R.Civ.P., by excluding the evidence from trial.

Imposition of sanctions for failure to comply with the rules of discovery are regarded favorably. Owen v. F.A. Buttrey Co. (Mont. 1981), [_Mont__,] 627 P.2d 1233, 1236, 38 St.Rep. 714, 716. This Court frowns on last-minute production of relevant documents especially when the matter could easily have been taken care of before trial. See G-K Properties v. Redevelopment Agency of the City of San Jose (9th Cir. 1978), 577 F.2d 645.

Just before trial, counsel met in chambers with the Judge. Marler contended that the only invoices received by him before the morning of trial had been in response to his request for production of documents provided to Hanzel on September 23, 1987. Hanzel’s counsel, however, offered to prove that Marler did receive several more invoices. He claimed that several invoices were attached to his responses to Marler’s interrogatories as exhibits, and he requested a continuance of the trial in order to call his secretary as a witness on the matter. The District Court denied Hanzel’s request and trial proceeded as scheduled.

This Court cannot determine from the record before us whether Hanzel complied with the rules of discovery. When Hanzel’s motion for a new trial based on irregularities in the proceedings was made, the District Court had all the necessary evidence before it. It had the complete record (including the disputed invoices), the affidavits of Hanzel, his counsel and counsel’s secretary, and the transcripts of the motion in limine, the trial and the motion for a new trial.

The District Court’s denial of a motion for a new trial will not be overturned absent a showing of manifest abuse of that discretion. Giles, 588 P.2d at 538. See also Brothers v. Town of Virginia City (1976), 171 Mont. 352, 558 P.2d 464. We conclude that there was no abuse of discretion.

The second issue raised on appeal is whether the District Court erred in failing to award Hanzel his attorney fees.

Section 71-3-124, MCA, provides in part:

“In an action to foreclose any of the liens provided for by parts ... 5 [construction liens] ... of this chapter, the court must allow as costs the money paid for filing and recording the lien and a reasonable attorney’s fee in the district and supreme courts, and such costs and attorney’s fees must be allowed to each claimant whose lien is established . . .” (Emphasis added.)

The District Court Judgment of June 14, 1988, stated:

“It is therefore ordered that plaintiff have judgment for $1,066.40, for said Glacier State Electric Supply Company bill, together with costs; but, because of the limited recovery, it is ordered that each party pay its own attorney’s fees.”

At the trial there was conflicting evidence as to whether any money was due Hanzel. The District Court held that $1,066.40 was due Hanzel. Hanzel is, therefore, entitled to a reasonable attorney fee under § 71-3-124, MCA. We remand for a determination of the amount of attorney fees.

As a final note, we take this opportunity to admonish counsel for their breifs since neither properly complied with Rule 23, M.R.App.P. Plaintiff’s counsel failed to attach the District Court judgment and memorandum opinion in his appendix as required under Rule 23(a)(6), M.R.App.P. Defendant’s counsel’s table of authorities was incomplete as required under Rule 23(b) and 23(a)(1), M.R.App.P. The table merely cited, “Montana Rules of Civil Procedure.” Defendant’s counsel failed to properly list six authorities in his table although clearly cited throughout his brief.

Affirmed and remanded for a determination of the amount of attorney fees.

MR. JUSTICES HARRISON, GULBRANDSON, SHEEHY and WEBER concur.


author: MR. JUSTICE SHEEHY

text:
    HOVEN, VERVICK & AMRINE, P.C., Petitioner and Appellant, v. MONTANA COMMISSIONER OF LABOR, and Montana Department of Labor and Industry, Respondents and Respondents.
    No. 88-529.
    Submitted on Briefs March 9, 1989.
    Decided June 15, 1989.
    774 P.2d 995.

      J. Daniel Hoven, Browning, Kaleczyc, Berry & Hoven, Helena, for petitioner and appellant.
    Elizabeth Griffing, Dept, of Labor & Industry, Helena, for respondent and respondent.
    Milodragovich, Dale & Dye, Lon J. Dale, Missoula, for Larry Vervick.
    Garlington, Lohn and Robinson, William T. Wagner, Missoula, for William Amrine.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

Hoven, Vervick and Amrine, P.C. appeals from a decision entered against it in the First Judicial District Court, Lewis and Clark County. The District Court held that the July 31, 1987 order of the Commissioner of Labor and Industry in favor of Larry Vervick and William Amrine be affirmed and awarded attorney fees and costs to Vervick and Amrine. That judgment awarded the respondents the following:

“Larry Vervick: $56,919.15
representing unpaid wages of $26,015.05 and a statutory penalty of $26,015.05 pursuant to § 39-3-206, MCA plus costs and attorney fees of $4,889.15. Interest is to accrue on the wage and penalty award of $52,030.10 at a rate of 10% per annum from August 30, 1987 to the date of the district court judgment August 16, 1988. Interest is to accrue at 10% per annum on the entire amount, $56,919.25, from and after August 16, 1988.
“Bill Amrine: $25,472.27
representing wages of $11,681.07 and the statutory penalty in the same amount, $11,681.07, plus costs and attorney fees of $2,110.37 with interest to accrue on the $23,362.14 award at 10% per annum from August 30, 1987 to August 16, 1988 and to continue to accrue on the $25,472.27 at 10% per annum from and after that date.”

The court also awarded respondents any future costs and attorney fees incurred in satisfying this judgment. We affirm.

The issues before this Court are:

1. Did the District Court err by applying a narrow standard of review which prevented it from examining undisputed facts and applying those facts to controlling statutes?

2. Can owners/shareholders/directors of closely-held corporations, who meet the applicable statutory definition of employer, recover wages under the Montana Wage Payment Act?

3. Was the Department of Labor’s finding that Vervick was an employee and not a volunteer from October 7,1985 to January 15,1986 clearly erroneous?

4. Did the Department of Labor and the District Court abuse their discretion when they failed to provide offsets to the awards of wages to prevent a windfall?

5. Did the Department of Labor violate its own regulations and the Montana Administrative Procedure Act by designating the hearing examiner’s decision as final without allowing for the filing of exceptions?

This case stems from a dispute which arose in Hoven v. Amrine (Mont. 1986), [224 Mont. 15,] 727 P.2d 533, 43 St.Rep. 1977. That dispute culminated in an appeal to this Court in which Hoven received an award of attorney fees for his attempt to enforce the provisions of an agreement whereby Amrine and Vervick were to purchase stock from Hoven. Hoven served default notices on Amrine and Vervick who brought an action in District Court to have the notices declared void. Hoven prevailed in that cause and forthwith dismissed Amrine and Vervick from employment. That dismissal is the subject of the present appeal which is based on the following circumstances:

Prior to July 1, 1979, Larry Vervick and Vern Hoven operated a general partnership for the practice of certified public accounting in Missoula. On July 1, 1979, Hoven, Vervick and Amrine formed a corporation in which each held one-third of the shares. On that same date, Vervick and Amrine entered into agreements as employees of the corporation. Hoven entered into a similar employment agreement.

In 1985, David Green was added to the corporation as shareholder, diminishing the ownership to 25% per shareholder. From July 1, 1979 to October 7, 1985, Vervick, Amrine and Green served on the board of directors, on the executive committee and as officers of the corporation. Hoven served in the same capacities from July 1, 1979 through August, 1983. He resumed those positions again on October 7, 1985 as sole shareholder, sole director and president of the corporation after litigation in which he demanded the return of Vervick’s and Amrine’s shares to the corporation due to their failure to pay for the same among the four principal owners. Hoven v. Amrine, supra.

Part of the initial disagreement emanated from a salary increase Vervick and Amrine made to themselves in May, 1985. In a special meeting of the board of directors, the board approved staff raises including an increase in the owner’s salaries from $40,000 to $44,000 and declared previous loans to the owners to be bonuses. These raises were recommended by the executive committee consisting of Vervick, Amrine and Green.

In August, 1985, the corporation was experiencing cash flow problems. Because of this circumstance the four shareholders worked without salaries. Then problems arose between Hoven and the other three shareholders. Hoven regained absolute control of the corporation through court proceedings. He then terminated Amrine and Vervick as employees. He told Vervick that he was no longer a shareholder in the corporation but offered a joint venture to him. Hoven, through a director’s resolution, rescinded Vervick’s and Amrine’s salary increases retroactively. Vervick did not respond in writing to Hoven’s new offer, but continued to work under the HVA name and completed several large contracts that he had entered into as a principal of the corporation. Vervick later took with him some of those contracts when he left HVA and formed his new corporation. The monies he generated prior to his leaving went into HVA and went to pay off debts that totaled $232,000.00 on October 7, 1986. Vervick terminated his employment with the corporation on January 15, 1986. On October 3, 1986, he filed a wage claim with the Montana Department of Labor and Industry (Department). He claimed past wages in the total sum of $16,015.05. Amrine filed a wage claim on October 18, 1985 for $8,544.60. These claims were against HVA. The wage claim was based on a salary of $44,000.00 per year. Green had issued a corporate check to himself for accumulated vacation pay when he was terminated by Hoven. HVA never pursued him to recover that payment.

A hearing examiner appointed by the Department held a hearing on June 11, 1987. The hearing examiner issued the final order on July 31, 1987 in favor of Vervick and Amrine. It ordered HVA to render a cashier’s check or money order in the amount of $75,392.24 as wages and statutory penalty in favor of Vervick and Amrine, made payable to the Employment Relations Division, no later than thirty days after service of the order. The amount ordered to be paid to Vervick was $52,030.10. HVA filed a petition for Judicial review of the Department’s final order. The District Court affirmed the Department’s decision and issued a final judgment on August 17, 1988. Notice of entry of judgment was filed on August 23, 1988. HVA then filed notice of appeal to this Court on October 21, 1988. Under Rule 5, M.R.App.P., a 60 day period is allowed for appeal when a governmental agency is a party.

The first issue we must examine is whether the District Court erred by applying an incorrect standard of review.

The standard of review of administrative decisions is set forth in § 2-4-704, MCA.

“. . . (2) The court may not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings. The court may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:

“(e) clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record;

“(f) arbitrary and capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion; . . .”

Traditionally, review of agency decisions is not intended to be a de novo consideration of findings of fact made by the agency. Because of the standard of review prescribed by the foregoing statute, the party appealing from an agency decision to the District Court has the burden of showing that his rights were substantially prejudiced by an arbitrary or capricious or a clearly erroneous agency decision. Carruthers v. Board of Horse Racing (1985), 216 Mont. 184, 700 P.2d 179. A rebuttable presumption exists in favor of the agency decision. Thornton v. Commission of Labor and Industry (1980), 190 Mont. 442, 621 P.2d 1062, 1065.

The appellant contends that an issue which raises only a question of law determined by the District Court or by an agency is not binding on this appellate court, which is free to draw its own conclusions from the evidence presented. Sharp v. Hoerner Waldorf Corp. (1978), 178 Mont. 419, 423, 584 P.2d 1298, 1300.

To settle the issue for purposes of this case, where the appellant disputes a finding of fact made by the agency, the action of the agency will be sustained unless the finding of fact is clearly erroneous in view of the reliable, probative and substantial evidence on the whole record; or unless the findings are arbitrary or capricious or characterized by an abuse of discretion by the agency. Section 2-4-704, MCA. If the issue involves a question of law, this Court is not bound by the interpretation of law either by the agency or the District Court. Sharp, supra.

The next issue raised by the appellant is indeed an issue of law. The appellant contends that since it is a professional corporation, it is absurd to construe the provisions of the Montana Wage Payment Act, and particularly the definitions contained in § 39-3-201, MCA, so that shareholders, owners and directors who hold a proprietary interest in the company may also be considered employees for the purpose of collection of wages under the Act. Under § 39-3-201, an “employer” includes any corporation acting directly or indirectly in the interest of an employer in relation to an employee; and “employee” is defined as any person who works for another for hire.

In Hammill v. Young (1975), 168 Mont. 81, 540 P.2d 971, this Court held that a professional, if truly an employee, is entitled to be covered as an employee under the Wage Payment Act. Here the appellant contends that Hammill can be distinguished because the professional was not a shareholder and held no ownership interest in the corporation. The District Court, however, concluded that in construing § 39-3-201, both Vervick and Amrine were indeed employees of the professional corporation and that this entitled them to the benefits of the Act.

We determine that the District Court correctly interpreted § 39-3-201 as it applies to this case. The professional corporation clearly falls within the definition of an employer under the section, which means that the corporation itself had a separate and distinct identity from its stockholders. Moats Trucking Company, Inc. v. Gallatin Dairies, Inc. (Mont. 1988), [231 Mont. 474,] 753 P.2d 883, 885, 45 St.Rep. 772, 775. It is further clear that the definition of an “employee” within the meaning of the section covers Vervick and Amrine. They had entered into contracts of employment with the professional corporation, a separate legal entity. The employment contract between the corporation and the employees specifically provided that their relationship under the contract was that of an employer and an employee. It would be idle for the District Court or for this Court to disregard the clear language of the employment contracts or the clear language of the statute. Where clarity abounds, it is not the business of the courts to carve out exceptions.

The next issue raised by the appellant corporation is whether the appellant Vervick is not entitled to any wages from October 7, 1985 to January 15, 1986. Hoven testified that he had terminated Vervick. Vervick claims that he was never terminated as an employee of HVA. Hoven contended that he offered .to Vervick a joint venture relationship to finish existing contracts which were required to be fulfilled by HVA. The hearing officer found that Vervick remained after October 7, 1985 as an employee. Moreover, the hearing officer found that there was no joint venture. The findings with respect to this issue are clearly supported by substantial evidence in the whole record. Vervick was not a volunteer but worked as an employee during the time following October 7, 1985, and the corporation was paid for the work done by Vervick during that period of time. As a corporation, the employer received the benefits of the contracts through the efforts of its employee, Vervick.

The next issue raised by the appellant corporation is that if wages are to be awarded in this case, reductions should have been made by the Department to avoid an inequitable result.

The contention of the appellant here is a bit involved. The Department awarded wages based on a yearly salary of $44,000.00 to each of the employees. The $44,000.00 was premised on an action taken by the board of directors in May, 1985, when Vervick and Amrine were both members of the board. The corporation contends that the award of these salaries placed HVA in violation of loan provisions established by the Small Business Administration. Also in May, 1985, the board of directors declared loans, which Vervick and Amrine had previously received from HVA, as bonuses.

When Vern Hoven became the sole shareholder in October, 1985, the board of directors rescinded the corporate actions taken in May, 1985.

The Department and the District Court recognized the yearly wage of the employees to be $44,000.00 pursuant to the earlier actions of the board of directors and gave no legal import to the later action of the board of directors rescinding those actions. The corporation contends, on appeal here, that the Department and the District Court thus sanctioned the actions taken by the board of directors when Vervick and Amrine were members of the board, and disapproved of the actions taken by the board when they were not members and Hoven was the sole shareholder. The appellant corporation contends that it is arbitrary and capricious for the Department to recognize one set of actions taken by the board of directors and to refuse to acknowledge a second set of actions taken by the board.

The District Court determined that upon of the adoption of the resolution increasing the salaries to $44,000.00, the resolution then became the obligation of the corporation to those employees and a subsequent action by the board of directors could not rescind a previous action if the rescission would disturb vested rights. We determine that once the corporation obligated itself to pay the wages at an annual rate of $44,000.00, the same corporation could not retroactively, by an action of a different board of directors, take back what had become the obligation of the corporation.

A sub-issue on this point is that both Vervick and Amrine, as well as Hoven, had made personal guaranties to the Small Business Administration of loans made by that Administration to the professional corporation. The appellant corporation contends that since Vervick and Amrine were personal guarantors of those loans, the award of wages to them without a reduction for their personal guarantees results in a double benefit. Obviously, this contention has no merit. The obligations of Vervick and Amrine as personal guarantors of loans made to a third party, in this case, the Small Business Administration, has no affect on the amount of wages owed by the corporation to Vervick and Amrine. Their obligations as personal guarantors are separate and apart from their status as employees entitled to payment of wages by the corporation under the Montana Wage Payment Act. The appellant corporation has shown no legal basis upon which a reduction of the wages should have been made by the agency or the District Court.

The last contention made by the appellant corporation is that since the order of the hearing examiner before the agency became the final order, the designation of the hearing examiner’s decision as “final” violates § 2-4-621, MCA.

Section 2-4-621, MCA authorizes a hearing and an appointment of a hearing examiner under the Administrative Procedure Act. Appellant corporation contends that nothing in § 39-3-210, MCA, or any other provision allows the Commissioner of Labor to delegate the final decision-making authority to an appointed hearing examiner. The appellant points to the Department’s regulation, § 24.2.101(l)(b), A.R.M., which reads:

“If a majority of the officials of an agency who are to render the final order were not present at the hearing of a contested case or have not read the record, a proposed order if adverse to a party to the proceeding other than the agency, including findings of fact and conclusions of law, shall be served upon the parties. An opportunity to file exceptions, present briefs and make oral argument to the officials who are to render the decision shall be granted to all parties adversely affected. If no appeal is taken within twenty (20) days, the decision of the hearing examiner shall be final.”

The District Court determined that the Commissioner of Labor and Industry is charged with the responsibility of investigating wage claims and holding hearings in the enforcement of the Wage Payment Act under. §§ 39-3-209 and 39-3-210, MCA. Further, under § 2-15-112(2)(b), MCA, the Commissioner, as the head of the Department of Labor and Industry, may delegate these functions to a subordinate employee. Section 24.2.101, A.R.M. allows the decision of an appointed hearing examiner to be a final order. Therefore, the District Court declared that there is no error in the designation of the hearing examiner’s order as final.

The District Court correctly determined the issue. It should be further noted that the statutory authority of the Commissioner of Labor and Industry refers to a single individual and not to a number of officials, who in other agencies, may be required to reach a final decision. The cited section of Administrative Rules of Montana is not applicable to wage payment cases and the Department of Labor and Industry and its Commissioner have established a workable procedure for determining issues in wage payment claims under the provisions of the applicable acts.

We therefore affirm the District Court.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, HUNT and GULBRANDSON concur.


author: MR. JUSTICE GULBRANDSON

text:
    AETNA FINANCE COMPANY, a corporation, Plaintiff and Appellant, v. COURT E. BALL and Towe, Ball, Enright & Mackey, a partnership, Defendants and Respondents.
    No. 88-551.
    Submitted on Briefs April 27, 1989.
    Decided June 15, 1989.
    774 P.2d 992.

      Robert J. Phillips, Snavely & Phillips, Missoula, for plaintiff and appellant.
    Richard E. Gillespie, Keller, Reynolds, Drake, Sternhagen & Johnson, Helena, for defendants and respondents.
   MR. JUSTICE GULBRANDSON

delivered the Opinion of the Court.

Aetna Finance Company (Aetna) appeals the final judgment entered September 9, 1988, by the Thirteenth Judicial District Court in favor of the defendants. The court held that Aetna’s attorney, defendant Court Ball, fulfilled his duty to advise Aetna as to whether a proposed borrower had a mortgageable interest in certain real property, such that Aetna could obtain a secured interest in the property, and whether the mortgagee title insurance would appropriately insure this secured interest. Therefore, defendants were held not liable for any legal malpractice. We affirm.

The issues presented for our review are as follows:

1. Did attorney Ball have a duty to assure that client Aetna had a valid secured interest and that it received mortgagee title insurance covering that secured interest?

2. Did the attorney breach this duty to his client?

The ownership history of that real property central to the issues raised in this appeal is quite lengthy and involved. We will detail only those stipulated facts regarding this property which are directly relevant to the legal malpractice issues raised by Aetna.

On September 9, 1980, Anne Zemple executed a trust agreement conveying in trust a certain parcel of real property in Gallatin County to Henry Richner. Richner, as trustee, assumed the responsibility of making improvements to the property. To this end, Richner secured a loan for $25,000 from Aetna on August 7, 1981. This loan was secured by a trust indenture prepared by attorney Ball and signed by Richner. Ball prepared this trust indenture per instructions from Aetna after having advised Aetna to ensure that Richner had authority to grant a security interest in the property. In response, Aetna obtained from Zemple a Consent to Mortgage which gave her agreement to a mortgage of the property as security for this loan.

On March 2, 1983, Richner executed, without designation of capacity, a Quit Claim Deed conveying his interest in the property back to Zemple. Thereafter, Richner began making arrangements with Aetna to obtain another loan totaling $38,829.66.

On November 4, 1983, the USLIFE Title Insurance Company (Company) issued a commitment for title insurance which stated it would generally insure title to the property from all claims except those affecting title and arising out of the trust agreement dated September 9, 1980 and/or the Quit Claim Deed executed on March 2, 1983. The Company later issued a mortgagee title policy containing these exceptions.

During a meeting in Ball’s office on November 11, 1983, Aetna informed him of Richner’s request for an additional loan against the property. Ball testified that after examining the Quit Claim Deed and title commitment, he advised Aetna to determine if the trust was still effective, and if so, to obtain another Consent to Mortgage from Zemple. Ball then prepared a consent form, and Aetna subsequently obtained the necessary signature. Ball also advised Aetna to get the two above-mentioned exceptions on the title insurance commitment removed. During a telephone conversation on November 18, 1983, Aetna told Ball that the Company would delete the Quit Claim Deed Exception. Consequently, Ball advised Aetna it could proceed with the closing of the loan, and he subsequently prepared a trust indenture which Richner then signed. Ball was present at the closing of this loan that same day.

Ball prepared a post-closing written opinion on November 21, 1983, upon request of Aetna, stating that the trust indenture signed by Richner had created a valid security interest in the property sufficient to enable Aetna to obtain mortgagee title insurance. Ball testified that this opinion was based upon review of the Consent to Mortgage, the title commitment naming Richner as the vested trustee owner, and Aetna’s verbal assurance that the Company would delete the Quit Claim Deed exception. Ball did not see the mortgagee title insurance policy, which was issued November 21, 1983 and which in fact retained the two exceptions, prior to issuance of this written opinion.

Richner defaulted on his loan obligation on January 3, 1984. Ball, acting on behalf of Aetna, commenced foreclosure proceedings. Zemple filed suit against Aetna and Ball to obtain damages and a permanent injunction against foreclosure of the trust indenture. Aetna filed a counterclaim against Zemple and a third party complaint against Ball. The lawsuit against Aetna was subsequently settled by Zemple’s payment of $23,998.26 to Aetna in exchange for Aetna’s reconveyance of the trust indentures, cancellation of the promissory notes, and dismissal of the counterclaim against Zemple. Thereafter, the court ordered a realignment of the remaining parties with Aetna as the plaintiff and Ball and his law firm as defendants.

Following a non-jury trial on July 5 and 6, 1988, the District Court issued its findings and rendered judgment in favor of defendants in this realigned lawsuit. The court held that Ball had not assumed the duty of guaranteeing that the title company would issue appropriate coverage insuring Aetna’s interest in the property. Rather, Ball was employed as an attorney with limited duties and he fulfilled these by advising Aetna how to proceed to insure its interest in the property. Defendants thus were held not liable for any loss Aetna incurred by virtue of its loss of a security interest in the property, an interest which had guaranteed repayment of monies loaned to Richner.

Aetna alleges that Ball had a duty to ensure that it received a security interest and appropriate title insurance for that security interest. Aetna contends Ball’s failure to fulfill these duties constituted a breach of contract as well as negligence.

This whole case turns on a determination of what duties Aetna retained Ball to fulfill. The parties dispute the specific duties for which the attorney-client relationship was created, and not the general duties owed clients in general. See generally, Huszagh and Molloy, Legal Malpractice: A Calculus For Reform, 37 Mont.L.Rev. 279, 335 (1976) (recognizing the two subparts to the duty element). This dispute is one of material fact. The broad standard of review urged by Aetna, which would allow this Court to make a determination of this case based upon our own findings, therefore is not applicable to this case. Such a broad standard of review would be applicable only if the facts were relatively uncontested. See, e.g., Johnson v. Division of Motor Vehicles (1985), 219 Mont. 310, 312, 711 P.2d 815, 816. Because a factual dispute exists as to the specific duties Ball was obligated to perform, we will rely on the District Court’s findings and presume that they are correct unless unsupported by substantial, credible evidence and thus clearly erroneous. As stated in Rule 52(a), M.R.Civ.P.:

“Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses.”

The District Court examined the nature of past legal dealings between Aetna and Ball to determine the terms of their attorney-client contractual relationship. The court did not abuse its discretion in ascertaining the exact duties Aetna intended Ball to perform from an examination of the parties’ conduct. We have previously held that when contract terms are ambiguous, the conduct of the parties is the best indication of the true intent of the parties at the time of contracting. E.g., Souders v. Montana Power Co. (1983), 203 Mont. 483, 486, 662 P.2d 289, 291; Rumph v. Dale Edwards, Inc. (1979), 183 Mont. 359, 368, 600 P.2d 163, 168. A court then must interpret the terms of a contract so as to give effect to this initial intent. See § 28-3-301, MCA.

From an examination of the parties’ conduct, the District Court determined that the parties intended Ball to determine if the proposed borrower had a mortgageable interest which could act as security for the proposed loan. Moreover, Ball was to review the title commitment to determine if this secured interest would be covered under an appropriate mortgagee title insurance policy. If Aetna did not have a valid interest, Ball was to advise Aetna what actions to take to obtain such a valid security interest and/or appropriate title insurance coverage. Aetna, not Ball, had the responsibility for acting upon this advice. The court concluded that Ball fulfilled these advisory duties and thus he was not liable for any negligence or breach of contract.

Substantial credible evidence exists in support of the court’s findings as to the nature of the duties Ball was retained to perform. Ball testified that Aetna hired him to advise it as to the validity of the security interest and title insurance coverage, to issue a written opinion as to the validity of each, to prepare the trust indenture document, and to attend the closing. He testified that he was not expected to ensure the validity of the security interest or appropriateness of the title insurance coverage. In Ball’s opinion, Aetna routinely handled all these other details and problems, arising in regards to loan transactions, to save the cost of attorney’s fees and thereby to remain competitive in the lending market.

Memos from a telephone conversation and meeting prior to the 1981 loan by Aetna reveal that Ball assumed the responsibility only for advising Aetna of the steps necessary to ensure appropriate mortgagee title insurance coverage. Memos from a November 11, 1983 meeting with Aetna again reveal that Ball only advised Aetna of steps it should take to ensure a valid security interest and appropriate title insurance in regards to the proposed 1983 loan. Moreover, Ball testified he advised Aetna to obtain a consent to mortgage from Zemple, which Aetna subsequently obtained. Ball also testified he advised Aetna to ensure appropriate mortgagee title insurance coverage by having the title company remove from the policy those two exceptions detrimental to insurance coverage. A telephone call from an Aetna representative on November 18, 1983, as documented on a message pad, indicated that Aetna had assumed the duty of resolving those problems brought to its attention by Ball and had induced the title company to delete the quit claim deed exception. Ball testified that his subsequent written opinion was based upon this telephone, assurance that Aetna, in fact, had acted upon his legal advice. Given all the foregoing evidence indicating Ball routinely assumed only an advisory responsibility regarding Aetna’s security interest and mortgagee title insurance, we hold that the District Court’s findings, that Ball did not have a duty to ensure the validity of the security interest and the appropriateness of mortgagee title insurance coverage, were not clearly erroneous.

The evidence indicated that Ball did not “delegate” to Aetna a duty to ensure the accuracy of the security interest and appropriateness of mortgagee title insurance. Rather, Aetna only contracted with Ball to obtain his advisory opinion about whether or not a valid security interest and appropriate mortgagee title insurance existed, and if not, what steps to take to achieve appropriate coverage. The District Court thus did not abuse its discretion in finding that Ball had fulfilled all those duties undertaken and, consequently, in holding Ball not liable for breach of contract. The judgment of the District Court is affirmed.

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


author: MR. JUSTICE McDONOUGH

text:
    DAVID C. MOGAN, Plaintiff and Appellant, v. CITY OF HARLEM, Defendant and Respondent.
    No. 88-598.
    Submitted on Briefs April 27, 1989.
    Decided June 27, 1989.
    775 P.2d 686.

      Thomas P. Meissner, Lewistown, for plaintiff and appellant.
    Sue Ann Love, Jardine, Stephenson, Blewett & Weaver, Great Falls, for defendant and respondent.
   MR. JUSTICE McDONOUGH

delivered the Opinion of the Court.

This appeal involves the issuance of water and sewer permits by a city government. Plaintiff David C. Mogan appeals from the order of the District Court of the Seventeenth Judicial District, Blaine County, granting summary judgment in favor of the City of Harlem. We affirm.

Mogan presents three main issues on appeal. Restated, they are as follows:

1. Did the District Court err in determining that no genuine issue existed as to any fact deemed material in light of the legal principles entitling the City of Harlem to judgment as a matter of law?

2. Is the City of Harlem immune from suit pursuant to § 2-9-111, MCA?

3. Did the District Court err in denying Mogan’s motion to amend his pleading?

In 1983, Mogan made plans to build an “eight-plex” apartment building in Harlem, Montana. The building was to include apartments for low-income residents, and was financed through the Farmers’ Home Administration. In March of 1984, Mogan submitted architectural plans for the eight-plex to the Harlem City Clerk, and was issued a building permit.

On a later date that is not certain in the record, Mogan appeared at the City Clerk’s Office to discuss water and sewer permits for the building. Ordinance No. 57, enacted in 1978 by the Harlem City Council, required persons wishing to connect to Harlem’s water and sewer system to purchase water and sewer permits and install a water meter. Until 1984, the ordinance did not differentiate between single-family houses and multi-family apartment buildings.

“ORDINANCE NO. 57

“AN ORDINANCE REGULATING CONNECTION TO CITY WATER AND SEWER SYSTEM

“BE IT ORDAINED BY THE CITY OF HARLEM:

“Section 1: PERMIT REQUIRED. Any persons desiring to connect into the City water and sewer system within the city limits, must first make application to the City Clerk for a permit for same. All applications for such connections shall contain the names and addresses of the persons desiring to so connect, the address of the property to be connected and a statement of the purpose of the water usage. Additionally, the application shall contain the name and address of the regularly licensed plumber who will do the connection work.
“Section 2: FEES. The Clerk shall collect a fee of Seventy-five Dollars ($75.00) for water and a fee of Fifty Dollars ($50.00) for sewer,
prior to the issuance of a permit for connection to city sewer and water within the city limits.
“Section 3: WATER METER. No connection shall be made to the city water system until a water meter has been installed.

According to deposition testimony by the City Clerk, Mogan was under the impression that only one meter and one set of permits would be required for the building. The Clerk explained to Mogan that he would need separate permits and water meters for each apartment. The Clerk also testified that this would conform with the City’s prior application of the ordinance. After her conversation with Mogan, the Clerk brought Mogan’s misunderstanding to the attention of the Mayor.

In July of 1984, the Harlem City Council held a special meeting, at which they amended the ordinance to require separate permits and meters for each “household unit,” which was defined in the amended ordinance to include an apartment. The amendment was to take effect on August 25, 1984. On August 24, 1984, the day before the amended version of the ordinance went into effect, Mogan returned to the City Clerk’s Office seeking a single water permit and a single sewer permit for the eight-plex. He was again informed that he would need a separate set of permits for each apartment, as per previous practice.

Mogan then met with the Mayor and a city councilman. According to Mogan’s deposition, he was told not only that he would be required to purchase eight sets of permits and install eight water meters, but also that the Mayor and the councilman were opposed to the project. They did not want a low-income housing project in Harlem, and intended to stop Mogan. In addition, the Mayor allegedly showed personal animosity toward Mogan. Mogan then demanded to be issued a single set of permits for the building under construction, and one set of permits for each of two additional buildings he was planning to build sometime in the future. All of Mogan’s permit requests were denied by the Mayor. Later that day, Mogan returned and gave the Mayor a letter detailing their previous conversation and indicating Mogan’s intention to “look to the City of Harlem” for any damages resulting from the Mayor’s denial of the requested permits.

The Mayor later wrote a letter to Mogan instructing him to obtain a set of permits and connect a water meter for each apartment in the eight-plex. Mogan did so, and incurred expenses attendant to obtaining the additional permits and altering the plumbing in the building after construction had begun.

In October of 1985, Mogan filed suit against the City of Harlem. He alleged breach of contract, as well as statutory and constitutional violations. The complaint was dismissed for failure to state a claim upon which relief could be granted. On appeal, this Court reversed and remanded, holding that the complaint was sufficient to state a claim. 739 P.2d 491 [227 Mont. 435,] (Mont. 1987) On remand, Mogan filed his First Amended Complaint, alleging violation of state constitutional guarantees of equal protection and due process, and federal constitutional guarantees of equal protection, due process and compensation for the “taking” of property. The City of Harlem filed an answer, and discovery proceeded. After discovery, Mogan moved to file a Second Amended Complaint, and the City filed a Motion for Summary Judgment. The District Court granted summary judgment to the City, and denied Mogan’s motion as being moot. This appeal followed.

I.

Mogan first asserts that the District Court erred in granting summary judgment in favor of the City. Mogan cites the standard for summary judgment from our decision in Morrow v. FBS Insurance Montana (Mont. 1988), [230 Mont. 262,] 749 P.2d 1073, 1074-75, 45 St.Rep. 188, 190:

“According to this Court’s interpretations of Rule 56(c), M.R.Civ.P., ‘[t]he party moving for summary judgment has the initial burden of showing that there is no genuine issue as to any fact deemed material in light of the substantive principles that entitled the movant to judgment as a matter of law.’ [citation]”

According to Mogan, the City did not meet its burden in the District Court, which should be reversed for two reasons: (a) genuine issues of material fact exist concerning the City’s prior application of the ordinance in question, and (b) the court erred in refusing to consider two FmHA memoranda offered as evidence of City officials’ improper motives.

Mogan takes issue with the City’s position that its application of the ordinance in his case was consistent with the City’s treatment of other owners of multiple-unit buildings. He cites instances brought out in discovery where the City applied the ordinance inconsistently. Mogan also cites notes taken by himself and others in meetings with the Mayor and city councilmen showing that the inconsistent treatment he received was motivated by the intention of city officials to impede his project. Mogan asserts that the ordinance was amended specifically to accomplish that end.

The City concedes that inconsistencies in the application of the ordinance exist, but argues that they were the result of inadvertence or mistake. While the notes presented by Mogan show some animosity exhibited toward him by the Mayor, they are not of consequence. First, as pointed out by the City below, the decision to require Mogan to obtain eight permits and install eight meters was made under the version of the ordinance existing prior to the amendment complained of by Mogan. Second, and also shown below by the City, the allegedly offensive amendment merely reflected the City’s prior practice.

The “inconsistencies” in the application of the ordinance pointed out by Mogan are just that; they are the exception rather than the rule. The record shows that witlfbnly three exceptions, all multiple-unit buildings in Harlem were required to obtain a separate set of permits and connect a separate water meter for each unit. A District Court ruling in Mogan’s favor would have resulted in disparate treatment of Mogan’s project, not consistent treatment. The City sustained its burden of showing that there was no issue as to any material fact on Mogan’s equal protection claims. Mogan simply was not singled out for different treatment, nor was he placed in a class that was treated differently.

Mogan also alleged state and federal due process violations based on the City’s alleged failure to give him adequate notice of the meeting at which the ordinance was amended. Given the fact that the City’s decision on Mogan’s Project was made before the amended ordinance became effective and the fact that the amendment did not change the requirements of the ordinance as previously enforced by the City, these claims are moot. Were we to find that Mogan had not been notified properly, the result at best would be harmless error.

Mogan’s “taking” claim alleged that the City’s denial of the permits he requested deprived him of his property interest in those permits without compensation, in violation of the Fifth Amendment to the U.S. Constitution as applied through the Fourteenth Amendment. This claim is without merit, as Mogan had no property interest in the permits that could be afforded constitutional protection. Property interests are not created by the Constitution. They come from independent sources, such as state law. McCracken v. City of Chinook (D. Mont. 1987), 652 F.Supp. 1300. Mogan has cited no authority upon which he bases his claimed property right in the permits, and our research has uncovered none.

Mogan’s second argument, that the District Court erred in refusing to consider proffered memoranda in making its decision, is likewise without merit. The memoranda at issue were alleged by Mogan to have been written by an FmHA official in the course of monitoring Mogan’s project. They contain statements made by the Mayor to the FmHA official concerning his dislike for Mogan and his project. The memoranda were excluded on grounds that they constituted hearsay and lacked proper foundation. However, their content does not change the result in this case. Mogan was not prejudiced by the actions complained of here. While the behavior of the Mayor and others may not have been particularly polite, neither was it actionable.

II.

Mogan’s second and third issues are intertwined. Mogan asserts that the District Court erred by refusing to allow him to file a second amended complaint. Mogan cites Rule 15(a), M.R.Civ.P., which states that a pleading may be amended by leave of court, and that such leave shall be freely given when justice so requires. Mogan’s Proposed Second Amended Complaint differed from his previous complaint by adding factual allegations concerning the Mayor’s refusal to issue the permits Mogan demanded for the two contemplated buildings, adding “lost prospective income” from the two contemplated buildings to his claim for damages, and adding a separate cause of action alleging negligence on the part of the City Clerk’s Office in issuing a building permit for the eight-plex without ensuring that the plans he submitted conformed to the City’s ordinances.

The City cites Prentice Lumber Co. v. Hukill (1972), 161 Mont. 8, 17, 504 P.2d 277, 282, where this Court set out the approach to be used in considering requests to amend:

“In the absence of any apparent or declared reason — such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc. — the leave sought should, as the rule requires, be ‘freely given.’ ”

(quoting Foman v. Davis (1962), 371 U.S. 178, 182, 83 S.Ct. 227, 230, 91 L.Ed.2d 222). The quoted language is directly applicable to this case, because the proposed amendment would be futile for two reasons. First, our discussion above shows that Mogan had no property interest in the permits he requested for the contemplated buildings and thus could not assert constitutional protection. Second, the only new cause of action alleged — negligence — would have been barred by the immunity afforded the City of Harlem by § 2-9-111, MCA.

Section 2-9-111, MCA, states in relevant part:

“(3) A member, officer, or agent of a legislative body is immune from suit for damages arising from the lawful discharge of an official duty associated with the introduction or consideration of legislation or action by the legislative body.”

In this case, the ordinances at issue were enacted by the Harlem City Council. As shown by the portion of Ordinance 57 quoted above, the Council through its legislative action in enacting these ordinances charged the City Clerk with official duties concerning the issuance of permits. The Clerk was thus acting as an agent of the Council. Mogan’s proposed amendment alleged negligence on the part of the Council’s agent in the performance of official duties associated with an action of a legislative body. This Court has very recently held a school board immune from suit under this statute for the actions of its agent in performance of an official duty associated with the board’s action. Peterson v. Great Falls Public School District No. 1 and A (Mont. 1989), [237 Mont. 376,] 773 P.2d 316, [8 Ed Law 61,] 46 St.Rep. 880. The same immunity would apply in this case.

We have found that no genuine issue of material fact exists as to the City’s entitlement to summary judgment on Mogan’s constitutional claims. We have also found that the District Court’s refusal to grant Mogan leave to amend his complaint was correct, because the proposed amendment would have been futile. Therefore, we affirm the decision of the District Court.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES WEBER, GULBRANDSON and HUNT concur.


author: MR. CHIEF JUSTICE TURNAGE

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. LARRY DUANE CHRISTOFFERSON, Defendant and Appellant.
    No. 89-42.
    Submitted on Briefs June 1, 1989.
    Decided June 27, 1989.
    775 P.2d 690.
    Bell & Marra, Barbara E. Bell, Great Falls, for defendant and appellant.
    Marc Racicot, Atty. Gen., John Paulson, Asst. Atty. Gen., Helena, Patrick L. Paul, County Atty., Great Falls, Stephen Hudspeth, Deputy County Atty., Great Falls, for plaintiff and respondent.
   MR. CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Defendant was found guilty by jury trial in District Court, Eighth Judicial District, Cascade County, of the offenses of felony burglary, in violation of § 45-6-204(1), MCA, and felony sexual intercourse without consent, in violation of § 45-5-503(1), MCA. Defendant was sentenced on November 9, 1988, to the Montana State Prison to concurrent terms of ten years for each offense with five years suspended on each offense. Christofferson appeals only the issue of the burglary charge. We affirm.

The issue here is whether the District Court erred in denying defendant’s motion to dismiss the burglary charge at the close of the State’s evidence.

In December 1987 D.F. was residing in a split level home with her three children, daughter K.F., daughter R.F., and son, M.F. Also living in the house was G.T., who attended vocational school in Great Falls.

Defendant was an acquaintance of D.F., and he had been over to her house on several occasions. On Friday, December 4, 1987, D.F. left Great Falls for the weekend. She took R.F. and M.F. with her and left K.F. and G.T. at home. Defendant and D.F. had a conversation before she left for Livingston. The evidence was disputed, but defendant claims that he volunteered to check on the children in Great Falls. According to him, D.F. did not say yes or no. D.F., on the other hand, stated that she told him not to bother checking on the children.

Defendant came from the bars in the Great Falls area to the residence in the early hours of Saturday morning. G.T. and several friends were watching television in the downstairs family room when Christofferson came calling. G.T. testified that he recognized defendant from his previous visits and defendant told G.T. that he was checking on them because D.F. had sent him.

Defendant stayed for nearly an hour, started to leave and then dropped a beer bottle on the floor. He cleaned up the spill, and G.T. testified that defendant stated he was leaving and went upstairs. G.T. heard the front door close.

G.T. came upstairs about one-half hour later and found defendant still in the house. G.T. asked defendant what he was doing and Christofferson assured G.T. that he was going to finish his beer and then leave. G.T. left to go to the grocery store and when he returned he did not see defendant. He returned downstairs to the family room and was shortly thereafter alarmed by a loud crash. K.F. ran downstairs calling for his help. G.T. went upstairs and saw defendant in the yard with his pants unzipped.

K.F. had been upstairs watching television. After friends of hers left, she changed into her pajamas (a tee shirt and underwear) and went to lie on the couch and watch television before falling asleep. She testified that she woke up when she felt someone’s hand in her underwear. She felt a finger penetrate her vagina. She was turned on her back and the male figure performed oral sex on her.

K.T. knew that it was a male and she could smell alcohol, but it was too dark to see who the person was. When the male committed oral sex, she kicked him and knocked him down and into a table. At that point, she got up and ran downstairs toward G.T.

The only issue which challenges the decision of the District Court is whether the District Court erred in denying defendant’s motion to dismiss the burglary charge at the close of the State’s case-in-chief.

On appeal, defendant does not contend that there was insufficient evidence to support his conviction of sexual intercourse without consent. He does, however, appeal the decision of the District Court that there was sufficient evidence regarding the burglary charge to go to the jury for its consideration.

The standard of review is: “The decision whether to dismiss the charge or direct a verdict of acquittal lies within the sound discretion of the trial court and will be disturbed on appeal only when abuse is shown.” State, v. Just (1979), 184 Mont. 262, 277, 602 P.2d 957, 965; cited in State v. Goltz (1982), 197 Mont. 361, 372, 642 P.2d 1079, 1085; State v. Keil (Mont. 1988), [231 Mont. 187,] 751 P.2d 680, 45 St.Rep. 532; State v. Matson (Mont. 1987), [227 Mont. 36,] 736 P.2d 971, 44 St.Rep. 874. Based upon § 46-16-403, MCA, which states that the District Court may dismiss an action and discharge the defendant, “[w]hen, at the close of the state’s evidence . . . the evidence is insufficient to support a finding or verdict of guilty,” we have said that a verdict of acquittal may be directed in favor of the defendant only if no evidence exists upon which to base a guilty verdict. State v. Courville (Mont. 1989), [236 Mont. 253,] 769 P.2d 44, 46 St.Rep. 338; State v. Matson, supra.

The evidence presented by the State to prove the burglary charge was established through the testimony of G.T. G.T. testified that when defendant appeared at the residence, he gained entry by telling G.T. that D.F. had told him (defendant) to check in on G.T. and K.F. D.F., however, stated that she told him not to bother. Defendant acknowledged at trial that D.F. did not tell him to go to the house. The defendant gained entry into the house by deceit.

After being in the house, defendant twice told G.T. that he was leaving. The first time Christofferson went upstairs, and G.T. heard the front door close. The second time was when G.T. found Christofferson still in the house some time later, asked him what he was doing there, and was told by defendant that he was on his way out.

Even after this, defendant continued to stay, committing the act of sexual intercourse without consent upon K.F.

Burglary is defined in § 46-6-204, MCA, and provides:

“(1) A person commits the offense of burglary if he knowingly enters or remains unlawfully in an occupied structure with the purpose to commit an offense therein.”

In the recently-decided case of State v. Courville, supra, we were faced with a situation similar to that here. In Courville, it was disputed whether defendant was invited or entered unlawfully. The victim did not remember inviting defendant into her house but testified that she did not mind if he stayed to sleep on the couch. The victim went upstairs to her room and was later choked and sexually assaulted by the defendant.

This Court, in Courville, pointed out that the burglary statute was written in the disjunctive, that is, a person commits the offense of burglary if he “enters or remains unlawfully.” Defendant contends that he was initially invited into the house. Although this jurisdiction has not had previous opportunity to consider whether entry by fraud, deceit, or pretense is an “unlawful entry,” other jurisdictions have. The Kansas Supreme Court held in State v. Maxwell (Kan. 1983), 234 Kan. 393, 672 P.2d 590, that entry into a dwelling obtained by fraud, deceit, or pretense is an unauthorized entry for the purposes of burglary. We hold that the defendant entered by deceit and was properly found guilty of burglary.

Regardless of whether Christofferson entered unlawfully, there was sufficient evidence to show that he remained unlawfully. In Courville, we looked to State v. Watkins (1974), 163 Mont. 491, 518 P.2d 259, and State v. Mathie (1982), 197 Mont. 56, 641 P.2d 454, where we stated: “when a person exceeds the limits of his privilege by remaining on the premises longer than is permitted, he thereby transforms his originally invited presence into a trespass that can form the basis of a burglary charge.”

The record establishes that defendant did not have the privilege of entering D.F.’s residence on December 4, 1987, but, even if he had entered with the privilege of doing so, he remained unlawfully in the house when he committed the offense of sexual intercourse without consent upon the person of K.F.

We hold that there was no abuse of discretion by the District Court in denying defendant’s motion for a directed verdict regarding the burglary charge. There was sufficient evidence to support the submission of the charge of burglary to the jury for its determination.

Affirmed.

MR. JUSTICES WEBER, SHEEHY, GULBRANDSON and HUNT concur.


author: MR. JUSTICE HARRISON

text:
    PHIL WHITEHAWK and Connie Bellet, Plaintiffs and Appellants, v. STAN CLARK, Defendant and Respondent.
    No. 88-582.
    Submitted on Briefs April 27, 1989.
    Decided June 29, 1989.
    776 P.2d 484.

      Karl Knuchel, Livingston, for plaintiffs and appellants.
    J. Robert Planalp, Landoe, Brown, Planalp and Kommers, Bozeman, for defendant and respondent.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

Plaintiffs, Phil Whitehawk and Connie Bellet (Whitehawks), appeal from a jury verdict rendered in the Sixth Judicial District, Park County, the Honorable Byron L. Robb presiding, in favor of the defendant, Stan Clark. Plaintiffs initiated the action seeking to recover damages for the destruction of personal property. We reverse and remand for a new trial.

The Whitehawks rented a log cabin and four outbuildings located near Wilsall, Montana, from the defendant Stan Clark. The Whitehawks resided in the cabin and used the outbuildings to store various personal items, including art work, musical instruments, musical recordings and historical documents. Much of the material stored in the outbuildings were used in connection with the Whitehawks’ musical performances entitled “Inspirada Americana.”

On April 28, 1985, Duane Clark, son of the defendant, began burning ditches on the family ranch southeast of the property rented by the Whitehawks. In the early evening hours, a slight breeze caused the fire to move out of the ditches, burning brush and swamp area to the northeast. Duane tended the fire throughout the day and returned home at 6:00 p.m. for dinner. Later, Duane received a phone call from the Whitehawks expressing concern over the fire. Duane returned to the field and continued to watch the fire until approximately 10:00 p.m.

The testimony at trial conflicted regarding the fire activity during the night and the following morning. Duane testified that when he returned to the field in the late evening, the fire had diminished to only embers and smoke. In addition, Duane stated that he viewed the field the next morning and found the embers and smoke completely extinguished. Thereafter, Duane left the area to continue work with his father in another portion of the ranch several miles away.

On the other hand, the Whitehawks testified that throughout the night, they could see both embers and flames. However, they testified that the following morning, no embers were visible, but a substantial amount of smoke was present. The Whitehawks stated that they remained concerned about the fire, but that a heavy dew, a backburn, a still wind and lack of any embers reassured them that they could leave their residence for a doctor’s appointment. Additionally, Mr. Whitehawk testified that he spoke to Duane in the morning and was assured that Duane would continue to watch the area. Duane denied the conversation entirely.

During the afternoon, the fire flared up, sweeping across the marshes and open fields. When the Whitehawks returned home in the afternoon, they found three of the four outbuildings completely destroyed and fire threatening the log cabin. Mrs. Janet Clark, Duane’s wife, was on the premises when the Whitehawks returned. Immediately, the Whitehawks began fighting the fire. After 45 minutes, the local volunteer fire department arrived and extinguished the blaze.

The Whitehawks filed suit against Stan Clark, alleging negligence and strict liability. On September 18, 1987, the Whitehawks moved for summary judgment on the issue of liability, arguing that § 50-63-103, MCA, imposed strict liability upon one who intentionally starts a fire which destroys property, and therefore, they were entitled to judgment as a matter of law. The District Court denied the motion without opinion.

On August 29, 1988, the case was tried before a twelve member jury. Upon the completion of testimony, the District Judge met with the attorneys to settle jury instructions and prepare a special verdict form. At this time, the District Court rejected plaintiffs’ Proposed Instruction No. 22 concerning § 50-63-103, MCA, concluding the statute pertained only to the intentional burning of excess forest material. Thereafter, the jury returned a verdict in favor of the defendant.

The Whitehawks appeal the following issues:

1. Does § 50-63-103, MCA, apply to the instant case?

2. Did the District Court err when it denied plaintiffs’ motion for summary judgment?

3. Did the District Court err when it refused to instruct the jury on plaintiffs’ Proposed Instruction No. 22 regarding § 50-63-103, MCA?

Section 50-63-103, MCA, states in part:

“Liability of offender for damages and costs. Any person who shall upon any land within the state, whether on his own or on another’s land, set or leave any fire that shall spread and damage or destroy property of any kind not his own shall be liable for all damages caused thereby, and any owner of property damaged or destroyed by such fire may maintain a civil suit for the purpose of recovering such damages. Any person who shall upon any land within this state, whether on his own or on another’s land, set or leave any fire which threatens to spread and damage or destroy property shall be liable for all costs and expenses incurred by the state of Montana, by any forestry association, or by any person extinguishing or preventing the spread of such fire.” (Emphasis added.)

This Court has been called upon to interpret the statute on two occasions. Montana Dept. of Natural Res. and Cons. v. Clark Fork Logging (1982), 198 Mont. 494, 646 P.2d 1207; and Belue v. State (1982), 199 Mont. 451, 649 P.2d 752. Defendant contends that our previous decisions control the outcome of the first issue which questions the applicability of § 50-63-103, MCA. Defendant argues that the statute applies only to the burning of excess forest materials. We find defendant’s interpretation unduly restrictive.

In Clark Fork Logging, defendants entered into a timber sale contract with the United States Forest Service to log an area in Sanders County. During operation, an employee started a chain saw which backfired and ignited a forest fire. The Department of Natural Resources and Conservation (DNRC), acting under contract with the United States Forest Service, extinguished the fire at a cost of $126,721.80. Thereafter, the DNRC brought suit to recover the cost under theories of strict liability and negligence. On appeal, we affirmed the lower court’s grant of summary judgment against DNRC’s strict liability count, holding:

“As they are used in § 50-63-103, MCA, the words ‘set or leave a fire’ refer to the deliberate act of burning excess forest material. The statute does not apply to the instant situation. The fire was not deliberately ignited. Rather, it accidentally started when a spark from the chain saw ignited a slash pile. Under these facts summary judgment on Count I was proper.” (Emphasis added.)

Clark Fork Logging, 646 P.2d at 1209.

Subsequently, this Court issued its decision in Belue. During a severe windstorm, a fire ignited near a slag pile. The fire spread four and one half miles across defendant’s land to plaintiffs’ property. Relying upon Clark Fork Logging, we concluded the facts did not support the applicability of § 50-63-103, MCA. Belue, 649 P.2d at 754. Our decisions emphasized that the statute applied to the intentional setting of a fire.

None of the factual circumstances which limited the statute’s applicability in Clark Fork Logging, or Belue, are present here. Our review of the statute failed to disclose limiting factors which would render the provision inapplicable to private landowners, or language which indicates an application exclusively to the burning of forest materials. Therefore, we conclude § 50-63-103, MCA, may be applicable to the instant case.

Next, the Whitehawks contend the District Court should have granted their motion for summary judgment on the liability issue, leaving damages as the sole issue to be decided at trial. We disagree.

The standard the appellate court applies when reviewing a grant or denial of a motion for summary judgment is the same as that utilized by the trial court initially; summary judgment is proper when it appears there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Rule 56, M.R.Civ.P.; Reagan v. Union Oil Co. of California (1984), 208 Mont. 1, 675 P.2d 953. If there is any doubt as to the propriety of the motion, it should be denied. Dare v. Montana Petroleum Marketing Co. (1984), 212 Mont. 274, 687 P.2d 1015.

The violation of a statute intended to protect the plaintiff from the injury incurred is generally held to be negligence per se. Taylor, Thon, Thompson & Peterson v. Cannaday (Mont. 1988), [230 Mont. 151,] 749 P.2d 63, 45 St.Rep. 102; Nehring v. LaCounte (1986), 219 Mont. 462, 712 P.2d 1329. The defendant’s conduct must still be the proximate cause of the harm to the plaintiffs, and there remains the possibility of defenses, such as contributory negligence. Restatement (Second) of Torts § 288B (1974); Martel v. Montana Power Co. (Mont. 1988), [231 Mont. 96,] 752 P.2d 140, 45 St.Rep. 460. Because these are issues of fact, summary judgment was inappropriate. The District Court’s denial of the Whitehawks’ motion for summary judgment was therefore proper.

Finally, we address the third issue on appeal. The Whitehawks contend the District Court improperly refused to grant their Proposed Instruction No. 22 which set forth verbatim the first sentence of § 50-63-103, MCA. At trial, defendant objected to the instruction and argued the Whitehawks abandoned the violation of statute claim because they failed to include it within the pretrial order. The District Court denied the instruction and stated that the statute pertained only to the burning of excess forest material.

The purpose of the pretrial order is to prevent surprise, simplify issues and permit counsel to prepare for trial on the basis of the pretrial order. Workman v. McIntyre (1980), 190 Mont. 5, 617 P.2d 1281. This Court has held that the party may not raise an issue on appeal which deviated from those stated in the pretrial order. Morse v. Cremer (1982), 200 Mont. 71, 647 P.2d 358. Under these two premises, it appears reasonable for defendant to have assumed that the issue of liability under the statute would not arise at trial.

However, other factors weigh against defendant’s waiver contention. First, the Whitehawks properly preserved the issue for appeal as applied to jury instructions. Rule 51, M.R.Civ.P., provides in part that “[n]o party may assign as error the failure to instruct on any point of law unless he offers an instruction thereon.” When the Whitehawks presented an instruction which stated verbatim the language of § 50-63-103, MCA, the District Court denied the instruction as inapplicable to the case.

In addition, the statute was the subject of a motion for summary judgment. Notwithstanding certification, an order denying summary judgment is interlocutory. Rule 1, M.R.Civ.P. Thus, the applicability of § 50-63-103, MCA, has not been waived insofar as it was presented to the District Court in the Whitehawks’ motion. We therefore are persuaded that the Whitehawks’ issue of the failure to instruct is proper for appeal.

We have held that the refusal to instruct a jury on an important part of a party’s theory of the case is reversible error. Smith v. Rorvick (Mont. 1988), [231 Mont. 85,] 751 P.2d 1053, 45 St.Rep. 451; Northwestern Union Trust Co. v. Worm (1983), 204 Mont. 184, 663 P.2d 325. While other instructions addressed the elements necessary to establish negligence, none of the given instructions informed the jury of the effect of a violation of statute. This was an essential part of the Whitehawks’ case and therefore they were entitled to have Proposed Instruction No. 22 submitted to the jury.

Reversed and remanded for new trial.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES WEBER, GULBRANDSON, McDONOUGH, HUNT and SHEEHY concur.