author: JUSTICE McDONOUGH

text:
    EDWARD B. STANFORD, NEAL A. STANFORD, and BETH STANFORD, Plaintiffs and Appellants, v. ROSEBUD COUNTY, MONTANA, a political subdivision, BOYD KINCHELOE and MAVIS KINCHELOE, his wife, LEE A. ADAMS, MELVIN A. MURI and CLEMENTINE MURI, his wife, E.L. GREBE and CAROLINE GREBE, his wife, DONALD McSWEYN, OIL RESOURCES, INC., RICHARD C. HOEFLE, ROBERT A. MEEK, EARL M. CRANSTON, SIVERT O. MYSSE, JR., et al., Defendants, Respondents, and Cross-Appellants.
    No. 91-204.
    Submitted October 31, 1991.
    Decided December 16, 1991.
    Rehearing Denied Jan. 9, 1992.
    48 St.Rep. 1124.
    251 Mont. 128.
    822 P.2d 1074.

      For Appellant: James P. Healow argued, Sweeney & Healow, Billings; Joseph W. Sabol argued, Bozeman.
    For Respondent: Robert C. Smith argued, John J. Cavan, Cavan, Smith, Grubbs & Cavan, Billings.
   JUSTICE McDONOUGH

delivered the Opinion of the Court.

This is an appeal from the judgment of the Sixteenth Judicial District, Rosebud County. The parties to the appeal are: the Stanfords (appellants), Earl M. Cranston and Richard C. Hoefle (appellants), and Boyd and Mavis Kincheloe (respondents). The District Court granted summary judgment whereby an oil, gas and other minerals royalty, whose title remains in dispute, was awarded: 88.889% to the Kincheloes, 5.555% to Hoefle and 5.556% to Cranston as owners of the subject property’s mineral interest in that proportion. For reasons that follow, the judgment of the District Court is reversed.

Several issues are raised by the appellants. However, our review will be limited to the single question of who among the contesting parties is entitled to the remaining royalty interest. Hoefle and Cranston raise “equitable” issues most of which regard Attorney William V. Moore. They claim an interest in Moore’s fees upon an unjust enrichment theory and a farther interest in a portion of anything the Kincheloes are awarded on a theory of constructive fraud and constructive trust. Attorney Moore is not a party in this action and resolution of the issues surrounding Attorney Moore is not necessary to determining the title of the disputed royalty interest. The constructive fraud and constructive trust claims are mooted by this opinion.

Stanfords allege that Cranston fraudulently induced them into quitclaiming their interest in the property to Cranston. Because the District Court determined Stanfords did not have any interest in the property, it found this issue moot. In light of our decision, the fraud claim must now be addressed by the District Court, and we do not address it here.

This case involves quieting title to a royalty interest previously reserved by Rosebud County. The subject property was originally vested in Northern Pacific Railway Company. Albert Farwell purchased the surface estate and later became owner of the mineral estate when Northern Pacific Railway Company quitclaimed the previously reserved mineral interests. The Stanfords are the only remaining heirs of Albert Farwell.

From 1916 to 1927 taxes assessed on the subject real property each year by Rosebud County went unpaid. In 1927, Rosebud County applied for and received a tax deed to the subject property. In 1931, a decree was awarded quieting title in Rosebud County. In 1944, Rosebud County quitclaimed its interest in the property to Adolph Ziesmer reserving to the comity a 6.25% royalty interest to “all oil, gas and other minerals recovered and saved from the said lands”. In 1945, Ziesmer quieted title to the property, acknowledging and describing the property as subject to Rosebud County’s reservation of the 6.25% royalty.

Ziesmer conveyed his interest to Jud and Ruby Smith who in turn conveyed their interest, with the exception of 25% of the mineral interest, to the Kincheloes. The Kincheloes have resided on the property since 1950. Smith later conveyed portions of his mineral interest to other persons, including Hoefle who conveyed one half of his share to Cranston.

In 1974, Cranston and Hoefle obtained oil and gas leases from the Kincheloes and Smith’s assigns as lessors to Oil Resources Inc. (Cranston’s and Hoefle’s company) as lessee. Portions of the working interest of Oil Resources lease were assigned to Polumbus Petroleum who obtained production. Polumbus attempted to determine who was entitled to the revenues of the oil it produced and found that questions existed regarding the validity of the county’s tax title and the efficacy of Rosebud County’s 6.25% royalty reservation. Polumbus initiated an interpleader action in U.S. District Court in Billings naming all possible mineral and royalty owners as defendants. All revenues attributable to the royalty interest were ordered and remain with the clerk of court.

Several stipulations were entered that resulted in the dismissal of many of the defendants and the loss of diversity jurisdiction. Meanwhile, the Stanfords filed a complaint in Rosebud County alleging the underlying tax deed to the property was void and the Stan-fords as heirs to Albert Farwell are the owners of the entire mineral estate and royalties, and that they were fraudulently induced into quitclaiming their interest to Hoefle and Cranston.

The removed interpleader action and the Stanfords’ case were consolidated with the former action being dismissed. The remaining parties in the action were Rosebud County, the Stanfords, the Kincheloes, Hoefle and Cranston. The District Court approved and adopted a settlement agreement, entered by these remaining parties, dismissing Rosebud County from the case and awarding the county 1/2 or 3.125% of the disputed royalty and 9/i6ths of royalties already paid into the court. Rosebud County waived, relinquished, and released all right, title and interest in what remains of the royalty.

Under the terms of the settlement agreement, “all right, title and interest in and to the remaining 3.125% royalty ... shall be owned by Kincheloe, Hoefle, Cranston, and/or Stanfords ...”. The agreement further states that the royalty shall be owned by the parties “in such proportion and in accordance with their respective interests, if any, as they may be entitled to under the terms of any settlement agreement entered into by them or judgment of the Court ... that shall determine their respective rights thereto.” The remaining claimants each entered a motion for summary judgment alleging a legally valid claim to the remaining shares of the proceeds of production and the remaining royalty. The District Court ruled in favor of the Kincheloes.

The Kincheloes claim entitlement to a proportion of the royalty based on their ownership of 100% of the surface rights and 75% of the mineral rights. Kincheloes’ title in the surface and minerals as well as their claim to the royalty interest is based upon the tax deed and subsequent quiet title actions which Kincheloes argued, and the District Court found, to be valid. Alternatively, Kincheloes argue that title in the royalty interest is independently established by adverse possession.

The Stanfords claim entitlement to all of the proceeds of the royalty as the sole heirs of Albert Farwell. Stanfords argue that the tax title proceedings are void and that as heirs to the pre-tax deed title owner, they assert the only valid claim to the royalty interest.

Cranston and Hoefle claim entitlement to all of the proceeds of the royalty based upon Cranston’s quitclaim deeds from Stanfords and upon the same grounds as Stanfords. Because we do not address the fraud claim, our analysis involves only Kincheloes’ and Stanfords’ claims.

We have held that in order to quiet title to any property interest, a party must first establish a prima facie claim to title. LeVasseur v. Roullman (1933), 93 Mont. 552, 20 P.2d 250. It is axiomatic that a party must prevail on the strength of his own title and not on the weakness of others. Funk v. Robbin, (1984), 212 Mont. 437, 689 P.2d 1215. As such, our analysis is reduced to a question of whether the parties are able to establish prima facie title to the royalty. Our determination is a question of law and as such this Court’s review will be plenary. Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 803 P.2d 601.

The Stanfords’ claim of title to the disputed royalty is through the pre-tax deed owner, Albert Farwell. Stanfords contend that Rosebud County failed to follow proper procedure thus rendering the tax sale and Rosebud County’s subsequent quiet title action defective and void. It is Stanfords’ position that while the tax deed is void, the creation of the royalty interest was confirmed by the August 25,1989 settlement agreement. Because the tax deed is invalid, Stanfords contend the royalty reverts to the pre-tax sale claimants. The Stan-fords assert that as the undisputed heirs to Farwell, who died in 1929, they are entitled to the royalty.

Stanfords maintain the specific jurisdictional defects in the tax deed and tax sale proceedings were:

“(a) That no affidavit of proof of service of notice for application for tax deed was filed in the office of the Treasurer of Rosebud County, Montana, prior to the issuance of the tax deed as required by statute;
“(b) That the affidavit of J.L. Freshour, Deputy County Clerk and Recorder, dated September 16, 1927, is defective and deficient and therefore null and void;
“(c) That the notice of application for tax deed dated August 15, 1927, indicates on its face, ‘That the period within the said above described lands and premises may be redeemed for the sale to pay the taxes for the year 1916 has long since expired,...’
“(d) That no affidavit of notice of publication of tax sale was filed in the office of the Clerk and Recorder of Rosebud County, Montana, by the County Treasurer as required by statute.”

The District Court ruled that the 1927 tax deed proceeding adequately complied with the statutory notice provisions, the County Treasurer had jurisdiction to issue the tax deed to the County and that the tax deed was and is valid. We disagree. We find the tax title proceedings to be deficient as asserted by Stanfords above.

“Proceedings on tax sales are in invitum. Every essential or material step prescribed by the statute must be strictly followed.” King v. Rosebud County (1981), [193 Mont. 268,] 38 St.Rep. 1145, 631 P.2d 711. Section 2209, RCM (1921), provides explicit instructions that an ‘affidavit of notice of an application for a tax deed’ must be filed with the clerk and recorder of the county in which the property is situated. There is no record of such an affidavit being filed. Furthermore, 2201, RCM (1921), states that redemption may be made any time prior to giving the notice of and application for a tax deed. The notice of application for tax deed in the instant case erroneously states that the right to redemption has “long since expired.” Finally, the record fails to include an ‘affidavit of notice of tax sale’ which, pursuant to 2212, RCM (1921), must also be filed in the office of the treasurer of the county. The above evidence makes clear that Rosebud County failed to follow the statutes as required; therefore, the tax deed proceeding was deficient and the county treasurer did not have jurisdiction to issue the tax deed and the issued tax deed was void.

Furthermore, service was not properly achieved upon Albert Farwell in the 1931 quiet title action. Specifically, there is a failure to establish the necessary level of proof required in an affidavit for publication of summons. The applicable statute governing the level of proof necessary is 9484, RCM (1921), which provides:

“The affidavit... shall clearly show that the necessary facts exist, and that the plaintiff has used due diligence in all respects as to which due diligence is required ... The facts constituting due diligence shall be set out in said affidavit.” (Emphasis added.)

When construing 9484, RCM (1921), in Aronow v. Anderson (1940), 110 Mont. 484, 104 P.2d 102, the Court said:

“The affidavit must show the evidentiary facts upon which the ultimate fact is asserted that the defendant resides out of the state before a valid order for publication of summons can be made.”

The affidavit for publication of summons in the instant case is deficient because it fails to recite facts to support its conclusion that Farwell resided in Minnesota. Furthermore, no specific facts were offered describing a search for Farwell. We find the Affidavit for Publication of Summons to have been deficient and the 1931 quiet title action is void. Furthermore, the 1944 Ziesmer quiet title action is void on the same basis.

We have held that reservations created by counties following defective tax sales remain intact. Richardson v. Richland County (1985), 219 Mont. 48, 711 P.2d 777. Here the royalty interest was held by Rosebud County -until it relinquished and waived all rights to it under the settlement agreement. When Rosebud County relinquished its interest in this case, the heirs of the pre-tax sale owner, Albert Farwell, are able to assert their title because they and their predecessor have not been deprived of their title. All actions taken relative to the invalid tax sale are void. King v. Rosebud County (1981), [193 Mont.268,] 38 St.Rep. 1145, 631 P.2d 711. The Stanfords, as heirs to Farwell, have established a prima facie claim to the royalty on this basis. Because Stanfords have established a prima facie claim, the burden shifts to Kincheloes to prove a superior title. Cook v. Rigney (1942), 113 Mont. 198, 126 P.2d 325.

The Kincheloes contend that the royalty interest can only be derived from mineral interests of which Kincheloes undisputedly own 75%. Kincheloes advance a theory that inasmuch as only mineral owners have the right to produce or contract for production, they must own some or all of the oil in place. Allegedly, the total value of production belongs to the lessee subject to the terms of the lease agreement which obligates the lessee to pay lessors and/or royalty owners. Kincheloes contend that when the county abandoned its claim, the obligation for the lessee to pay that part of the royalty was eliminated. In other words, the mineral owners, by investing in and being in control of production, are entitled to all royalties with the exception of those burdened by the lease.

Kincheloes’ argument essentially promotes a theory that the royalty interest should revert to the owners of the mineral interest. Kincheloes, as well as the District Court, cite Stokes v. Tutvet (1958), 134 Mont. 250, 328 P.2d 1096, to support the position that royalty interests are interests in production which may only be created by the mineral owner and therefore, since Rosebud County abandoned its claim, only the remaining mineral interest holders have a right to the royalty. We note that while the argument has a logical appeal, it does not appear to be supported by Stokes one way or the other and no other authority is provided.

We have previously stated it is important to recognize the distinction between mineral interests and royalty interests. McSweyn v. Musselshell County (1981), [193 Mont.525,] 38 St.Rep. 1260, 632 P.2d 1095. Mineral interests are the right to develop or lease and to keep the proceeds of the lease, whereas royalties are a right to a share in production while remaining free from the costs of production. Problematic with Kincheloes’ theory is that it blurs the distinction between the two. If royalty interests are free from the cost of production by definition, then it would be inherently contradictory to find they can arise from spending time and money on production. We decline to find prima facie evidence of Kincheloes’ title in the royalty interest on the basis of their right and title in the minerals.

The second basis on which the District Court determined that Kincheloes have title to the royalty is by the doctrine of adverse possession. There is no dispute that the Kincheloes have valid title to 100% of the surface and 75% of the minerals. We affirm the court’s finding that the Kincheloes have fulfilled the elements necessary to establish adverse possession of these portions of the property. However, we find that Kincheloes do not have an interest in the royalty interest by adverse possession.

The Kincheloes assert title by adverse possession to the royalty interest both under color of title and by use and occupancy. Color of title is derived through the invalid tax deed and subsequent conveyances. The decree allegedly quieting title to Ziesmer specifically recognizes that Kincheloes’ title is subject to Rosebud County’s 6.25% royalty interest. Kincheloes are successors in interest to Ziesmer. A purchaser has constructive notice of every matter that appears in the title and is bound to these matters. Pluhar v. Guderjahn (1958), 134 Mont. 46, 328 P.2d 129.

A person cannot attack a royalty reservation in a title under and through which he bases his rights. Russell v. Texas Company (1956), 238 F.2d 636. In Russell, the court held that a grantee, or his successors in interest, needs an independent source of title to challenge a mineral reservation of his grantor. Kincheloes (the grantees) are estopped by Rosebud County’s deed to Ziesmer, through which they derived their title or at a minimum their color of title, from attacking Rosebud County’s (the grantor) royalty reservation. Because the Kincheloes’ grant expressly subjects the property to the county’s reservation, they have no color of title to the royalty.

Kincheloes next contend they establish adverse possession by use and occupancy without need to rely on color of title. Under the adverse possession doctrine, property must be claimed under a color of title or by possession which is actual, visible, exclusive, hostile and continuous for the statutory period. Burlingame v. Marjerrison (1983), 204 Mont. 464, 665 P.2d 1136.

It is unnecessary to determine whether the royalty in this case is a possessory or non-possessory interest; under either, adverse possession will not apply. Kincheloes have failed to produce evidence that they have in fact possessed or taken the royalty. The Kincheloes have never possessed or taken any of the proceeds from the royalty which continues to be held by the clerk of court, nor, prior to these proceedings, did they ever make an adverse claim to the royalty.

We conclude the Kincheloes did not adversely possess or take title to the royalty beginning either under color of title or by actual taking, use or occupancy. No further basis for the establishment of prima facie title is offered. Instead, the remainder of Kincheloes’ argument is based upon the defense of laches. Kincheloes have failed to demonstrate any claim to title whatsoever. Because Kincheloes are unable to establish any claim to title in their own right, we conclude Kincheloes have no standing to assert any defenses, including laches.

By virtue of having made a prima facie claim to title, we conclude that the Stanfords are entitled to all rights and interest in the royalty, subject to the findings of the District Court on the issue of fraud. Our conclusion should be construed as unique to the unusual circumstances the instant case presents. We by no means intend to stray from our holdings in the line of cases supporting the position that laches is a bar to pre-tax deed title owners. See Richardson v. Richland County, (1985), 219 Mont. 48, 711 P.2d 777; Anderson v. Richland (1985) 219 Mont. 60, 711 P.2d 784; Hunter v. Rosebud County (1989), 240 Mont. 194, 783 P.2d 927. Here, Kincheloes lack standing to assert the defense that laches should apply to the plaintiffs’ claim to the royalty interest.

Laches is a question of the inequity that would result if a claim were permitted to be enforced. Filler v. Richland County (1991), 247 Mont. 285, 806 P.2d 537. Kincheloes are not in a position to be harmed by an inequitable result because they have always held their property subject to the royalty. No inequity will arise by the enforcement of Stanfords’ claim. Because Kincheloes lack a valid claim to the royalty, and therefore lack standing to raise an equitable defense, and because Stanfords are able to make out a prima facie claim to title, the decision of the District Court is reversed.


source: Caselaw Access Project

author: CHIEF JUSTICE TURNAGE

license: Public Domain

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. NORMAN RALPH NELSON, Defendant and Appellant.
    No. 91-178.
    Submitted on briefs November 8, 1991.
    Decided December 19, 1991.
    48 St.Rep. 1129.
    251 Mont. 139.
    822 P.2d 1086.

      For Appellant: Marcelle C. Quist, Bolinger & Quist, Bozeman.
    For Respondent: Marc Racicot, Attorney General, and Carol E. Schmidt, Assistant Attorney General, Helena; Mike Salvagni, Gallatin County Attorney, Bozeman; Gerry Higgins, Deputy County Attorney, Bozeman.
   CHIEF JUSTICE TURNAGE

delivered the opinion of the Court.

Norman Ralph Nelson was convicted in Gallatin County Justice Court of driving a motor vehicle without proof of insurance and while ■under the influence of alcohol. In a trial de novo on appeal to the District Court for the Eighteenth Judicial District, Gallatin County, he was again convicted of driving under the influence of alcohol (DUI). Nelson appeals. We affirm.

The issue is whether Nelson was denied his right to speedy trial.

Nelson was arrested on January 29, 1990, and charged with violation of 61-6-304 (no proof of insurance) and 61-8-401 (DUI), MCA. Trial was set for June 20,1990, in the Gallatin County Justice Court. On that date, the justice of the peace called counsel into his chambers and informed them that a continuance was needed because of another trial then in progress. Because justice courts are not courts of record, the discussion between court and counsel was not transcribed. Nelson was not present in chambers; he was waiting out in the hall. The court’s subsequent order stated:

“The defendant, by and through his attorney of record, McKinley Anderson, having made an oral Motion for Continuance and having orally waived his right to a speedy trial;
“IT IS HEREBY ORDERED, the above-entitled matter is re-set for JUDGE TRIAL on Wednesday, September 12, 1990 at 1:30 p.m.”

Nelson was tried and found guilty in Justice Court on September 12, 1990. He then appealed to District Court as allowed under 46-17-311, MCA.

In District Court, Nelson filed a motion to dismiss for lack of speedy trial. The District Court denied the motion on grounds that it had no review jurisdiction over the Justice Court and that it could only count the time from when the notice of appeal was filed. Nelson was retried in District Court on February 26, 1991, and again was found guilty as charged.

Nelson’s attorney testified in District Court that he was unable to recall whether he had moved for a continuance and waived Nelson’s right to speedy trial in Justice Court. The Justice Court’s order, however, affirmatively states that the attorney did so. It is presumed that a judicial record correctly determines or sets forth the rights of the parties. Section 26-1-602(17), MCA. We conclude that the testimony of Nelson’s attorney does not demonstrate that the court’s order was in error in stating that the attorney orally moved for a continuance and waived the right to a speedy trial.

Nelson argues that he was not bound by his attorney’s acquiescence with a continuance and waiver of the right to speedy trial in Justice Court, because the agreement was not entered with his knowledge or made upon the record or in open court. He cites 37-61-401(1) (a), MCA:

“(1) An attorney and counselor has authority to:

“(a) bind his client in any steps of an action or proceeding by his agreement filed with the clerk or entered upon the minutes of the court and not otherwise.”
Section 37-61-401, MCA, has been applied solely to agreements between attorneys. See, e.g., St. Paul Fire & Marine Ins. Co. v. Freeman (1927), 80 Mont. 266, 274-75, 260 P. 124, 127; Bush v. Baker (1913), 46 Mont. 535, 544-46, 129 P. 550, 553-54. The purpose of the statute is to relieve the presiding judge of determining controversies between attorneys as to their unexecuted agreements. Bush, 129 P. at 553. This statute has not been applied to matters presented before a court of law.
“[A] literal construction would greatly retard the business of the court and lead to absurd consequences. Every admission, consent or agreement made in the course of the trial would either have to be reduced to writing or filed with the clerk or by the clerk entered in his minutes. It was never intended that the section should receive such a construction." [Citation omitted.]
"... [W]hen [a party] appears by attorney, the latter, while acting as such, has control and management of the case, and his sayings and doings in the presence of the court concerning the cause are the same as though said and done by the party himself." [Citation omitted.] State v. Turlok (1926), 76 Mont. 549, 563, 248 P. 169, 175. We conclude that Nelson is bound by his attorney’s motion for a continuance and waiver of the right to a speedy trial.

Nelson next asserts that he was denied his right to speedy trial in District Court because speedy trial dates should be determined from the date of arrest, not the date the District Court assumed jurisdiction. In State v. Sanders (1973), 163 Mont. 209, 214, 516 P.2d 372, 375, this Court adopted Standard 12-2.2(c) of the American Bar Association Standards for Criminal Justice. That standard provides that, in cases of appeal or an order for a new trial, the time for trial should begin running from the date of the order granting the new trial. In this case, that would be the date of appeal to District Court. Nelson has not made a persuasive argument for abandoning the established standard.

Finally, Nelson argues that the application of a felony speedy trial analysis under Barker v. Wingo (1972), 407 U.S. 514, 92 S.Ct. 2182, 33 L.Ed.2d 101, is prejudicial to a misdemeanor defendant. He maintains that the six-month statutory speedy trial deadline set forth at 46-13-201(2), MCA (1989), should be applied to appeals from justice court to district court, not just to the initial trial before a justice court.

Nelson’s argument is without merit because the standard set forth at 46-13-201(2), MCA (1989), has been met in this case. The District Court assumed jurisdiction on September 14,1990. Trial was held in District Court on February 26, 1991. The interval between assumption of jurisdiction and trial, one hundred sixty-five days, is less than the six months prescribed by 46-13-201(2), MCA (1989). Nelson does not argue, and we have never held, that a delay of one hundred sixty- five days is enough to establish denial of the right to speedy trial ruder the Barker analysis.

We further conclude that Nelson was not denied his right to speedy trial in Justice .Court. One hundred forty-two days expired between Nelson’s arrest and his original trial date. That is within the time allowed ruder 46-13-201(2), MCA (1989). On his original trial date, as discussed above, Nelson, through his attorney, waived his right to speedy trial and a new trial date was set. Nelson’s Justice Court trial was held on the date then set. We hold that the State has met its burden of showing why Nelson was not tried in Justice Court within the six months allowed under 46-13-201(2), MCA (1989).

Affirmed.

JUSTICES HARRISON, HUNT, GRAY, and McDONOUGH concur.


author: JUSTICE WEBER

text:
    BOARD OF DIRECTORS OF THE EDELWEISS OWNERS’ ASSOCIATION, a nonprofit corporation, in its corporate capacity, and on behalf of individual owners of Edelweiss Condominiums, Plaintiff and Respondent, v. M.U. (MAX) McINTOSH and MAURICE THOMAS SAULNIER, individually and d/b/a D & M Property Management, Inc., METRO CITY REALTY AND INSURANCE OF EDMONTON, ALBERTA, and JOHN DOE I, II, AND III, Defendants and Appellants.
    No. 91-329.
    Submitted on briefs October 24, 1991.
    Decided December 19, 1991.
    48 St. Rep. 1131.
    251 Mont. 144.
    822 P.2d 1080.

      For Appellant: William E. Hileman, Jr., Hedman, Hileman & Lacosta, Whitefish.
    For Respondent: Debra D. Parker, Murphy, Robinson, Heckathorn & Phillips, Kalispell.
   JUSTICE WEBER

delivered the Opinion of the Court.

Defendants McIntosh and Saulnier, individually and doing business as D & M Property Management, Inc., and Metro City Realty and Insurance of Edmonton, Alberta (herein called defendants), appeal from the order of the District Court for the Eleventh Judicial District, Flathead County, refusing to set aside the default judgment entered against them. We affirm.

The only issue is whether the District Court erred by refusing to set aside the default judgment against the defendants.

The complaint of the plaintiff alleges that the Edelweiss Owners’ Association is an incorporated, non-profit association of owners of fractional interest in the Edelweiss Condominiums Project on Big Mountain, Whitefish, Montana. The complaint further alleges that the defendants submitted a proposal to manage the condominium project and to act as brokers for the purpose of renting units for owners who elected to make the units available for rent; the proposal was accepted by the plaintiff; and that the defendants assumed the management and control of the property on August 1, 1989. The further allegation is that the defendants were terminated as managers effective February 28, 1990. The complaint alleges that during the period of time the defendants managed the property they collected various association fees and rents. Next the complaint alleges that the defendants failed to provide a detailed and itemized accounting of plaintiff’s funds or of rents and deposits collected; that the defendants were obligated to collect and hold funds for the benefits of the plaintiff and to provide an accounting; and in the alternative that despite the repeated demands of the plaintiff, the defendants have refused to deliver money collected and to account for the same, and that the defendants’ actions constitute conversion. Following are significant dates and events:

June 8, 1990 — Personal service made on defendant Saulnier, individually and d/b/a D & M Property Management, Inc.

June 18, 1990 — Personal service made on defendant, McIntosh

July 3, 1990 — “Statement of Defence” (sic) was received by clerk of District Court without an appearance fee

July 5,1990 — Clerk of district court letter to defendants requesting appearance fee of $160. (Note that $160 fee has never been paid.)

July 9, 1990 — Default of the defendants McIntosh and Saulnier and D & M Property Management, Inc. was entered in the district court.

August 7, 1990 — Defendant McIntosh wrote to the clerk of the District Court requesting further information with regard to fees.

September 10, 1990 — Personal service on the defendant Metro City Realty and Insurance of Edmonton, Alberta.

September 12,1990 — Hearing on the plaintiffs’ motion for default judgment, and entry of findings of fact and judgment establishing that based on pleadings and testimony the court found that the defaults of McIntosh, Saulnier and D & M Property Management, Inc. were properly entered and that the plaintiffs were entitled to judgment in the amount of $183,593.70 and costs. Judgment entered for $183,593.70 together with costs of $161.24.

October 3,1990 — Default entered of defendant Metro City Realty and Insurance of Edmonton, Alberta.

October 26, 1990 — Amendment to findings of fact and judgment so that previous judgment included Metro City Realty and Insurance of Edmonton, Alberta.

April 9,1991 — Defendants’ motion to set aside default judgment.

May 10, 1991 — Trial court’s memorandum and order denying motion to set aside default judgment.

The “Statement of Defence” (sic), which was not filed because of the failure to pay the appropriate appearance fee of $160.00 remained in the court file. At the time of the hearing prior to judgment, the District Court acknowledged an awareness of that Statement but refused to consider the same because it had not been properly filed. The Statement is a number of pages in length and contains a literate explanation of theories of defense and purports to have been signed by defendants Saulnier and McIntosh.

The issue presented is whether the District Court erred in refusing to set aside the default judgment against the defendants. Defendants argue that the court should relieve them from the judgment pursuant to Rule 60(b), M.R.Civ.P., which in pertinent part states:

“On motion and upon such terms as are just, the court may reheve a party or a party’s legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (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); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party;... or (6) any other reason justifying relief from the operation of the judgment. The motion shall be made within a reasonable time, and for reasons (1), (2), and (3) when a defendant has been personally served, whether in lieu of publication or not, not more than 60 days after the judgment, order or proceeding was entered or taken ... .”

The standard to be applied on the setting aside of default judgment was stated in Blume v. Metropolitan Life Ins. Co. (1990), 242 Mont. 465, 791 P.2d 784. In Blume this Court stated that where a trial court denies a motion to set aside a default judgment, the standard of review is that no great abuse of discretion is needed to reverse, or in other words, that slight abuse is sufficient to justify reversal of such an order. In applying that test to the present case, we have concluded there was no abuse of discretion on the part of the District Court.

The defendants attempt to argue that relief should be granted under subparagraphs (1), (2) and (3) of Rule 60(b) which cover the elements of mistake, inadvertence, surprise, excusable neglect, newly discovered evidence, and fraud, misrepresentation, or other misconduct. Requests for relief from final judgment on those grounds are required by the above quoted rule to be made not more than 60 days after the judgment. Here the motion was made 165 days after the entry of judgment. We therefore affirm the District Court’s determination that the defendants are precluded from moving to set aside the judgment on the grounds enumerated in Rule 60(b) (1), (2) and (3).

The remaining ground argued by the defendants is that they are entitled to relief under subsection (6), the general catch-all clause which covers any other reason justifying relief from the operation of the judgment. In support of their motion, the defendants filed a lengthy affidavit which purported to be the affidavit of defendant Saulnier. That affidavit was not signed by Saulnier. The result is that the defendants have failed to establish any of the facts which have been referred to in the Saulnier affidavit. While the defendants contend that they are Canadian citizens unfamiliar with the laws of Montana, that they acted pro se, that they did file an answer, and that they would have presented contradictory evidence, none of these factors have been established in fact by affidavit or other appropriate proof.

We conclude that this case is similar to Gergen v. Pitsch (1981), 194 Mont. 70, 634 P.2d 652. In Gergen the defendant was personally served with summons and complaint and the defendant subsequently wrote a letter to the plaintiff’s attorney. This Court concluded that the letter which the defendant sent to Gergen’s attorney indicated that the defendant was both literate and intelligent, that the summons and complaint were legally sufficient and clearly stated a suit had been filed. We therefore held that under those facts, we could not conclude that the defendant was so mistaken as to the nature of what was transpiring that the judgment against him should be set aside.

In a similar manner, in the present case, summons and complaint were legally sufficient and complete. The “Statement of Defence” (sic) established that the defendants were literate. Clearly the summons and complaint were legally sufficient to establish that a suit had been filed against the defendants. The defendants completely failed to present facts sufficient to establish excusable neglect or any other basis or reason justifying relief from the operation of the default judgment. In addition, the defendants here acknowledged receipt of the notice from the District Court of the requirement for filing fees but apparently assumed that their “Statement of Defence” (sic) would still be considered.

Defendants further contend that judgment should be set aside because they never received notice of entry of the default judgment. In Schmidt v. Jomac, Inc. (1982), 196 Mont. 323, 327, 639 P.2d 517, 520, this Court held that “under Rules 55(a) and 77(d), M.R.Civ.P., no notice of entry of a default judgment need be sent to the defendant by the clerk of the district court”.

We conclude that the defendants have failed to establish any reason justifying relief from the operation of the default judgment under Rule 60(b)(6). We hold that the District Court did not abuse its discretion in refusing to set aside the default judgment. We conclude that the defendants have failed to establish any abuse of discretion on the part of the District Court under the test in Blume, 791 P.2d at 785.

Affirmed.

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


author: JUSTICE GRAY

text:
    CONTINENTAL REALTY, INC., a Montana corporation, Plaintiff and Respondent, v. ARTHUR STANLEY GERRY and wife, HARRIET GERRY, Defendants and Appellants.
    No. 91-179.
    Submitted on briefs September 24, 1991.
    Decided December 19, 1991.
    48 St.Rep. 1134.
    251 Mont. 150.
    822 P.2d 1083.

      For Appellants: John F. Lynch, Law Offices of John F. Lynch, Great Falls.
    For Respondent: Charles Reed, President of Continental Realty, Appearing Pro Se, Butte.
   JUSTICE GRAY

delivered the Opinion of the Court.

The respondent, Continental Realty, Inc., brought an action against the appellants, Arthur Stanley Gerry and Harriet Gerry, seeking to have the appellants vacate the premises at 1530 Phillips Avenue in Butte, Montana and to recover attorney’s fees and costs. The basis for the action was that the appellants were in default under a contract for deed between the parties. The appellants counterclaimed for damages for emotional distress and attorney’s fees on the ground that the respondent breached its fiduciary duty and wrongfully canceled the contract for deed. The District Court of the Second Judicial District, Silver Bow County, sitting without a jury, ruled that the respondent did not sustain its burden of proof that the appellants were in default and reinstated the contract for deed between the parties. No ruling was made on the appellants’ counterclaim. The appellants appeal. We remand to the District Court for entry of appropriate findings of fact and conclusions of law and judgment on the appellants’ counterclaim.

The sole issue we address on appeal is whether the District Court erred in failing to rule on the appellants’ counterclaim.

The respondent and the appellants entered into a contract for deed on August 4, 1975, whereby the respondent agreed to sell residential property to the appellants for monthly payments of $153, together with $42 per month to be held in reserve for the payment of taxes and insurance. In addition to being the seller of the property, the respondent was the escrow holder as designated in the pre-printed contract for deed form prepared by the respondent.

In April 1983, the respondent claimed that the appellants were in default under the contract for deed in the amount of $2,490.56; it served a notice of cancellation of the contract upon the appellants. After thirty days the respondent canceled the contract. A three-day notice to surrender possession was served on the appellants on August 10,1983. The record indicates that the appellants continued to occupy the premises and tendered monthly payments to the respondent in the amount of $200 through the time of trial. The respondent designated these payments as rental payments instead of payments on the contract for deed.

On November 8, 1983, the respondent filed the present action against the appellants in which it sought to have the appellants vacate the premises and to recover attorney’s fees and costs on the ground that the appellants were in default under the contract for deed. The appellants counterclaimed for emotional distress and attorney’s fees on the ground that the respondent breached its fiduciary duty and wrongfully canceled the contract for deed. A nonjury trial on the matter was eventually held in the District Court on December 4,1990. On January 16,1991, the District Court entered its findings of fact and conclusions of law in which the court concluded that the respondent did not sustain its burden of proof that the appellants were in default. The court reinstated the contract for deed between the parties at a balance owing of $16,000. No specific findings of fact or conclusions of law were made on the appellants’ counterclaim for damages for emotional distress and attorney’s fees. Judgment was entered on March 11, 1991. This appeal followed.

Did the District Court err in failing to rule on the appellants’ counterclaim?

Initially, we note an issue of importance which has not been raised by the appellants. Although the respondent was represented at trial by counsel, it appears on appeal solely through Charles Reed in his capacity as president of the corporation. A corporation is a separate legal entity and cannot appear on its own behalf through an agent other than an attorney. Weaver v. Law Firm of Graybill, et al. (1990), 246 Mont. 175, 803 P.2d 1089; Annotation, Propriety and Effect of Corporation’s Appearance Pro Se, Through Agent Who Is Not Attorney, 19 A.L.R.3d 1073 (1968). Therefore, Mr. Reed cannot appear on behalf of the respondent corporation. Accordingly, we have considered only the brief of the appellants and the record before us for purposes of this appeal.

Rule 52(a), M.R.Civ.P., requires the District Court, in a nonjury trial, to find the facts specially and state separately its conclusions of law. The purpose of this requirement is threefold in nonjury cases: (1) as an aid in the trial judge’s process of adjudication; (2) for purpose of res judicata and estoppel by judgment; and (3) as an aid to the appellate court on review. United Methodist Church v. D.A. Davidson, Inc. (1987), 228 Mont. 288, 295, 741 P.2d 794, 799.

At the close of the evidence at trial, the District Court stated on the record:

‘You’ve got a counterclaim, Mr. Lynch, you think is appropriate under the circumstances, particularly since you were saying because of Mr. Reed wearing two hats and being the seller as well as the escrow holder, that there is a breach of some fiduciary relationship. I would like to see some law, if there is any on that point. You should, Mr. Richardson, anticipate that and brief the same point.”

After the matter was briefed, the District Court made the following pertinent findings of fact and conclusions of law on January 16,1991:

“FINDINGS OF FACT
”17. Not only did Plaintiff not sustain its burden of proof as to default and eviction, these actions of the Plaintiff all evidenced a breach of Plaintiff’s fiduciary duty to Defendants since it was acting as both the Seller and the Escrow Agent.
”18. That because of Plaintiff’s various breaches of his fiduciary duty owed the Defendants, the Plaintiff was without authority to find the Defendants in default, forfeit the contract between the parties, and evict the Defendants.
“CONCLUSIONS OF LAW
“3. That Plaintiff violated its fiduciary relationship to the Defendants because it was acting as both the Seller and the Escrow Holder.”

Thus, the District Court apparently agreed with the appellants’ position that the respondent breached its fiduciary duty. However, the court made no findings of fact or conclusions of law as required by Rule 52(a), M.R.Civ.P., regarding the appellants’ counterclaim for damages for emotional distress and attorney’s fees to which the appellants alleged they were entitled as a result of the respondent’s breach of fiduciary duty. In addition, the District Court’s Judgment, entered March 11, 1991, includes no mention of the appellants’ counterclaim for damages and attorney’s fees. Therefore, we remand to the District Court with instructions to make findings of fact and conclusions of law regarding the appellants’ counterclaim, and to enter the appropriate judgment.

The appellants maintain that this Court should direct entry of judgment in their favor on the counterclaim since the evidence concerning damages as a result of the respondent’s breach of fiduciary duty is uncontested. Rule 52(a), M.R.Civ.P., provides that “[d]ue regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses.” Here, deference to the trial court’s superior position to observe the witnesses and assess their credibility requires that the trial court enter appropriate findings. This Court will not review the record for the purpose of making its own findings.

Remanded to the District Court for entry of appropriate findings of fact, conclusions of law and judgment on the appellants’ counterclaim.

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


author: JUSTICE HARRISON

text:
    DON BYRON REILLY and MARY LOU REILLY, Plaintiffs and Appellants, v. CITIZENS STATE BANK, IDAHO FIRST NATIONAL BANK and FARMERS AND MERCHANTS BANK, Defendants and Respondents.
    No. 90-341.
    Submitted on briefs November 7, 1991.
    Decided December 19, 1991.
    48 St.Rep. 1140.
    251 Mont. 155.
    822 P.2d 1088.

      For Appellants: James R O’Brien, Attorney at Law, Missoula.
    For Respondents: Randy J. Cox, Boone, Karlberg & Haddon; Bruce Hussey, Attorney at Law, Missoula.
   JUSTICE HARRISON

delivered the Opinion of the Court.

This is an appeal from the order of the Fourth Judicial District Court, Ravalli County, denying appellants’ motion to set aside a stipulation and order dismissing their case. We affirm.

The issue is whether the District Court erred when it dismissed appellants’ tort action with prejudice based upon a stipulation entered into between respondents and a bankruptcy trustee, which lacked notice or consent of a named party.

Appellants filed this lender liability lawsuit on March 25, 1987, almost one and a half years after they filed a bankruptcy petition under Chapter 11 of the United States Bankruptcy Code. After several unsuccessful attempts to complete the Chapter 11 bankruptcy, appellants moved the Bankruptcy Court to dismiss their case. However, on motion of appellants’ creditors the Bankruptcy Court converted the case from Chapter 11 to Chapter 7 liquidation over appellants’ objections. The Bankruptcy Appellate Panel of the Ninth Circuit Comb of Appeals affirmed.

Upon conversion to a Chapter 7 liquidation case, an estate was created consisting of all of the appellants’ non-exempt property. The Bankruptcy Court appointed a trustee to manage the estate, placing appellants’ property in the control of the trustee. The trustee’s duties included evaluating appellants’lender liability claim against Citizens State Bank. Upon receiving advice from independent counsel, the trustee settled the claim with Citizens State Bank. The Bankruptcy Court approved the settlement and dismissal from the instant lawsuit, despite appellants’ objection. In its order, the Bankruptcy Court declared that the cause of action pending in state court was an asset of the estate, not an asset of the individual debtors, and that it was in the best interest of the estate to settle the claim.

The trustee presented a stipulation for dismissal of the state court proceeding, along with a copy of the Bankruptcy Court’s order approving the settlement, to the District Court. The District Court dismissed the lawsuit with prejudice, deeming it fully settled on the merits. Appellants appeal the District Court’s denial of their motion to set aside the stipulation and order for dismissal.

Appellants contend that the District Court erred when it dismissed appellants’ case with prejudice based upon a stipulation entered into between the respondents and the bankruptcy trustee. Appellants claim error because: (1) the trustee was not a party to the lawsuit; and (2) appellants were not notified of the dismissal nor did they consent to it. Appellants assert that without their consent the District Court lacked the authority to dismiss this lawsuit until the bankruptcy estate was officially substituted as a party to the litigation. We disagree.

Pursuant to federal bankruptcy law, when appellants’ Chapter 11 case was involuntarily converted to a Chapter 7 liquidation case, appellants’ state cause of action became part of the bankruptcy estate pursuant to 11 U.S.C. 541(a), and appellants were divested of all right and interest in the lawsuit. Control of the lawsuit vested with the bankruptcy trustee. Sierra Switchboard Co. v. Westinghouse Elec. Corp. (9th Cir. 1986), 789 F.2d 705. As such, the trustee possessed the authority to settle the case. In re Sible (Bankr. D. Mont. 1989), 95 Bankr. 192. The trustee and the Bankruptcy Court con-eluded that settlement was in the best interest of the estate, disposing of the case on its merits.

Since the instant lawsuit was still pending in state district court, the parties were required to dispose of the case in that forum. The trustee and the respondents entered into a stipulation to dismiss the state court proceeding which was so ordered by the District Court.

Appellants are unsatisfied with the settlement reached between the trustee and Citizens State Bank, and are attempting to use this forum to circumvent adverse Bankruptcy Court proceedings. Appellants’ attempts fail because this Court does not have the authority to review issues which are appropriately before the Bankruptcy Court. Federal Land Bank of Spokane v. Reilly (1989), 240 Mont. 147, 149, 783 P.2d 917, 918.

The only issue we are concerned with is whether dismissal of a settled state cause of action, which was pending before a state district court, was appropriate without first giving appellants notice. We conclude that the trustee and respondents were not required to give notice to the appellants regarding the stipulation for dismissal. As previously noted, although appellants remained the named party plaintiffs, conversion of their bankruptcy case from Chapter 11 to Chapter 7 liquidation divested them of all of their rights in the state court litigation. As a result, appellants lacked standing to object to dismissal.

Appellants contend that they did not lack standing in the state court proceeding and that the trustee was required to substitute the bankruptcy estate as the real party in interest to validate the order of dismissal pursuant to Rules 17(a) and 25(c), M.R.Civ.R Appellants argue that the District Court’s failure to do so constitutes an abuse of discretion warranting reversal.

Upon reviewing the rules cited by appellants, it is evident that Rule 17(a), M.R.Civ.P., is inapplicable and Rule 25(c), M.R.Civ.R, does not mandate substitution. McComb v. Row River Lumber Co. (9th Cir. 1949), 177 F.2d 129, 130. Rule 17(a), M.R.Civ.P., applies when the interest in a case transfers prior to commencement of the case; Rule 25(c), M.R.Civ.P., applies when the interest in a case transfers during the action. 3B Moore’s Federal Practice, ¶ 25.08, p. 25-77; Hilbrands v. Far East Trading Co. (9th Cir. 1975), 509 F.2d 1321, 1323.

In the case at bar, since the bankruptcy case was converted after the commencement of the state court litigation, the interest in the action transferred to the bankruptcy trustee during the course of the action making Rule 25(c), M.R.Civ.R, rather than Rule 17(a), M.R.Civ.P., applicable. Rule 25(c), M.R.Civ.P., states:

“In case of any transfer of interest, the action may be continued by or against the original party, unless the court upon motion directs the person to whom the interest is transferred to be substituted in the action or joined with the original party ....”

Substitution is a matter of convenience within the district court’s discretion depending on the exigencies of the situation. 3B Moore’s Federal Practice ¶ 25.08, p. 25-77.

The matter presented to the District Court was not exigent. The parties presented a signed stipulation to dismiss the case based upon the Bankruptcy Court’s approval of the settlement. Substitution was not necessary since the parties agreed to dismiss the case and the order of dismissal terminated the case.

Based on the foregoing, we hold that the District Court did not err in dismissing the case. Accordingly, the judgment of the District Court is affirmed.

JUSTICES GRAY, TRIEWEILER, McDONOUGH, and WEBER concur.


author: JUSTICE HARRISON JUSTICE TRIEWEILER

text:
    IN RE THE MARRIAGE OF MARCUS ULLAND, Petitioner and Respondent, and JAN M. (ULLAND) GREGSON, Respondent and Appellant.
    No. 91-292.
    Submitted on briefs September 24, 1991.
    Decided December 30, 1991.
    Rehearing Denied Feb. 7, 1992.
    48 St.Rep. 1159.
    251 Mont. 160.
    823 P.2d 864.

      For Appellant: John L. Hollow, Helena.
    For Respondent: David N. Hull, Helena.
   JUSTICE HARRISON

delivered the Opinion of the Court.

Jan (Ulland) Gregson appeals the order of the First Judicial District Court, Lewis and Clark County, Montana, which modifies the custody provision of a dissolution decree awarding the parties joint custody of their daughter with physical custody retained by the mother. While retaining the designation of joint custody, the District Court’s modification transferred physical custody of the child from the mother, Jan, to the father, Marcus. We affirm.

The parties present the following issues:

1. Did the District Court err in modifying the primary physical custody of the minor child, Rian?

2. Did the District Court err in failing to follow the child’s wishes concerning physical custody and primary residence?

3. Did the District Court err in failing to appoint independent counsel to represent the child’s interests?

To appreciate the circumstances of this appeal, an overview of the litigation involving this marriage dissolution is appropriate at this point. Marcus and Jan Ulland were married on May 21, 1977. They had one child, Rian Marie, born May 8, 1978. The couple separated in September of 1979; the First Judicial District Court entered a decree of dissolution on May 14, 1980. By stipulation of the parties adopted in full by the court, the decree awarded the parties joint custody of Rian naming Jan as the physical custodian and awarding Marcus reasonable visitation. Further, the parties stipulated that if either parent decided to permanently leave Montana, the leaving party would give the other party fifteen days prior written notice. In the event Jan wished to move from Montana with Rian, the parties agreed to set up reasonable visitation to allow Marcus an opportunity to participate in Rian’s upbringing.

On May 14, 1980, the day the District Court entered the decree, Jan gave Marcus the requisite fifteen days written notice that she and Rian were leaving Montana. Approximately three weeks later, Jan and Rian left Montana and Jan remarried.

Upon receiving Jan’s notice, Marcus petitioned the court to modify the visitation provisions in the original decree. The District Court concluded that Jan’s intention to move from Montana was a change in circumstances justifying alteration of the original decree. Accordingly, the court set forth a specific visitation schedule including unlimited reasonable visitation whenever Marcus was in the geographic area of the child.

On August 23,1985, Marcus petitioned the court a second time to modify visitation claiming a change in circumstances. Marcus based this petition on Jan’s constant moving with Rian to different locations without keeping Marcus apprised of his daughter’s whereabouts and phone number, thus making it difficult for him to keep in contact with Rian. When Marcus received no response to his August 23, 1985, petition, he filed a third petition to modify his visitation.

The parties entered into a stipulation, filed with the court November 6,1985, resolving Marcus’ outstanding motions. They agreed that a change in circumstances supported a change in visitation. The stipulation provided a specific visitation schedule and that the minor child would be known by her legal name (Ulland) and she would be enrolled in school under her legal name. The District Court gave this stipulation full force and effect.

On February 17, 1989, Marcus filed his fourth motion to modify the custody provisions. Marcus asked the court to change primary physical custody from Jan to him. Alternatively, Marcus asked the court to order physical custody to alternate yearly between Marcus and Jan or to set specific dates for visitation. Marcus based this motion on his claim of Jan’s continual interference with his visitation rights.

The District Court held a hearing on May 18, 1989, concerning Marcus’ February 17, 1989, motion to modify custody. Both parties were represented by counsel. The court verbally admonished Jan for her past interference with Marcus’ visitation. The court rejected a change in primary physical custody at that time and awarded Jan another opportunity to comply with court orders and prior stipulations while retaining primary physical custody of Rian. The court ordered Jan to refrain from interfering and to encourage Rian to develop a relationship with Marcus. As a result of this hearing, the court entered an interim order setting forth specific dates that Rian would visit Marcus, including four weeks during the summer in 1989 and the 1989 Christmas holiday. The court awarded Marcus physical custody of Rian for Christmas break and spring break on an alternating yearly basis beginning with Christmas of 1989. Additionally, the court awarded Marcus physical custody of Rian for six weeks during the summers, beginning with the summer of 1990. The court stressed the importance of Jan’s compliance with this order. The court warned her that if she failed to comply it would hold her in contempt and punish her to emphasize the severity of her continual non-compliance.

Pursuant to the court’s interim order, Rian spent four weeks in the summer of 1989 with Marcus and his new wife. During this visitation, Jan frequently contacted Rian via telephone calls and letters. Jan and her husband refused to address letters to Rian by her legal name, violating the court order and the parties’ November 6,1985, stipulation which provided that Rian would be known by her legal name.

Following the May 1989 hearing, the parties entered into another stipulation attempting to resolve the parties’ difficulties and vitiating the need for the court to issue a final order. This stipulation, adopting the court’s requirements concerning visitation periods, was signed by the parties on December 5,1989, and filed with the court on December 12,1989. Additionally, the stipulation required that Marcus give Jan thirty days notice when he intended to exercise his visitation rights.

Prior to filing this stipulation, Marcus notified Jan that he intended to exercise his visitation rights for Rian’s Christmas break. Jan refused to allow Marcus to exercise his Christmas visitation rights, as provided by the court and the December 12, 1989 stipulation, because he failed to give her thirty days notice. Since the court awarded Marcus visitation for Christmas of 1989, but not 1990, and Jan refused visitation in 1989, Marcus tried to arrange his visitation to allow Rian to remain with Jan for Christmas of 1989, but spend Christmas of 1990 with Marcus in Washington. This agreement was reduced to writing but unexecuted by Jan. It was not until January 31, 1990, that Jan’s attorney notified Marcus’ attorney that Jan refused to trade Christmas of 1989 for Christmas of 1990. Needless to say, Marcus lost his court ordered Christmas of 1989 visitation.

Pursuant to the December 12, 1989, stipulation, Marcus notified Jan of his intent to exercise his visitation rights for spring break of 1990. He sent advance purchased airline tickets to fly Rian from Helena to Washington. Jan refused to allow Rian to fly alone. Consequently, Marcus and Jan each drove to Spokane to exchange Rian, thus reducing Rian’s visit with Marcus by two of seven days.

In May of 1990, Marcus notified Jan of his intent to exercise his six week summer visitation. Jan notified Marcus that she was filing a petition to modify visitation because Rian did not want to spend the summer with Marcus. A hearing was scheduled in May but was vacated until August. After the hearing was delayed, Jan withdrew Rian from school one week early and moved to California for the summer without notifying Marcus of the change of address, violating the parties’ December 12, 1989, stipulation.

Marcus responded to Jan’s petition by requesting a change in physical custody. After hearings conducted on both motions on August 14,1990, and September 20,1990, the District Court granted Marcus’ motion, immediately transferring physical custody of Rian from Jan to Marcus. The District Court denied Jan’s motion to reconsider. Jan appeals.

As noted from the record and as set forth above, this case has a long and unsettling history. From the day the court entered the final decree of dissolution, Marcus has had to continually fight for contact with Rian. The record is replete with numerous instances when Marcus attempted to exercise his visitation rights only to be thwarted by Jan’s actions.

While Jan retained physical custody of Rian, Marcus traveled to and from Jan’s home to visit Rian. On numerous occasions, Marcus notified Jan that he would be in the area to visit Rian. Jan would not object to visitation. When he arrived, he was either greeted with resistance or he was not greeted at all. Initially, either Jan and Rian would not be home or Jan would resist visitation. Ultimately, when Marcus located Rian, Jan interfered with visitation by not allowing it or restricting it.

As noted above, in addition to having reasonable visitation when Marcus was in the geographic area, the court awarded Marcus visitation for extended periods of time during certain holidays and the summer. To obtain physical custody of Rian for these extended visits required extensive travel. Since Jan refused to allow Rian to fly alone, alternate transportation had to be arranged.

The parties have been before the district court on at least five separate occasions regarding visitation and physical custody of Rian. Each time, Marcus maintained that Jan interfered in his visitation with Rian thereby precluding development of a meaningful father/daughter relationship. Marcus acknowledges that Rian was unwilling to spend time with him, attributing Rian’s reluctance to Jan’s constant interference. Each time the parties were before the court, the court attempted to structure visitation to facilitate a relationship between Marcus and Rian.

I.

Did the District Court err in modifying the primary physical custody of the minor child, Rian?

Marcus and Jan originally stipulated to and were awarded joint custody of Rian. Joint custody is presumed to be in the best interest of the child, 40-4-224(1), MCA, and is awarded to assure frequent and continual contact of the minor child with both parents. In re Marriage of Bergner (1986), 222 Mont. 305, 307, 722 P.2d 1141, 1143. Physical custody should be arranged as equally as practical between the parents to comply with the express purpose of an award of joint custody, with the child’s best interest as the primary consideration. Section 40-4-224(2), MCA.

Modification of physical custody within a joint custody arrangement is proper when the change is in the best interest of the child. In re Marriage of Mitchell (Mont. 1991), [248 Mont. 105,] 809 P.2d 582, 584, 48 St.Rep. 353, 354; citing In re Marriage of Keil (1990), 246 Mont. 344, 347, 805 P.2d 1334, 1336. Arequest to change the physical custodian of the child requires an application of 40-4-224(2), MCA, which states in part:

“ ‘[J]oint custody5 means an order awarding custody of the minor child to both parents and providing that the physical custody and residency of the child shall be allotted between the parents in such a way as to assure the child frequent and continuing contact with both parents. The allotment of time between the parents must be as equal as possible; however,
“(a)each case shall be determined according to its own practicalities, with the best interest of the child as the primary consideration; ...”

The District Court must consider the factors set forth in 40-4-212, MCA, when determining whether the modification of physical custody is in the child’s best interest. In re Marriage of Stephenson988), 230 Mont. 439, 445, 750 P.2d 1073, 1077. The courtis under no obligation to consider the more stringent factors set forth in 40-4-219, MCA, when faced with an action for modification of physical custody rather than an action for termination of joint custody. Marriage of Keil, 246 Mont. at 347, 805 P.2d at 1336.

In determining the child’s best interest, the district court must consider the following relevant factors:

“(a) the wishes of the child’s parent or parents as to his custody;
“(b) the wishes of the child as to his custodian;
“(c) the interaction and interrelationship of the child with his parent or parents, his siblings, and any other person who may significantly affect the child’s best interest;
“(d) the child’s adjustment to his home, school, and community;
“(e) the mental and physical health of all individuals involved;
“(f) physical abuse or threat of physical abuse by one parent against the other parent or the child; and
“(g) chemical dependency, as defined in 53-24-103, or chemical abuse on the part of either parent.”

Section 40-4-212, MCA.

Jan contends that the District Court erred because it failed to make specific findings concerning all of the best interest factors listed in 40-4-212, MCA. We disagree. All that the statute requires is that the court consider the factors listed. The court is not required to make specific findings concerning each element of 40-4-212, MCA, but must “express the ‘essential and determining’ facts upon which its conclusions rest." Marriage of Mitchell, 809 P.2d at 584-85, 48 St.Rep. at 354; citing Cameron v. Cameron (1982), 197 Mont. 226, 230-31, 641 P.2d 1057, 1060.

Examination of the record before us reveals that the District Court considered the relevant factors. First, it is undisputed that the court was well aware that both parents desired physical custody of Rian. Second, after interviewing Rian in chambers to determine her wishes concerning physical custody, the court ascertained and entered findings pertaining to Rian’s unwillingness to spend time with Marcus. Third, the court made specific findings concerning the interaction and interrelationship between Rian and the Gregsons and Rian and the Ullands. In its Findings of Fact, Conclusions of Law and Order, the court noted:

“31. Jan, Glenn Gregson, and Rian have a close, loving family relationship ....
“32. Marcus and his wife, Dawn Ulland, have a loving relationship with Rian, and they get along well together.”

Fourth, the court considered Rian’s adjustment to her new home with Marcus finding that Rian would show resistance to the change but concluded that Rian’s best interests would be fostered if Rian and Marcus obtained professional counseling to help Rian adjust.

Neither party presented evidence and the District Court did not make any findings concerning the last three factors listed in 40-4-212, MCA. As such, these factors are not relevant and the District Court did not err in failing to consider them.

This Court will not overturn the district court’s findings unless they are clearly erroneous. Rule 52(a), M.R.Civ.R In custody modification cases, it is particularly important for this Court to defer to the district court which personally evaluated the testimony. In re Marriage of Anderson (1989), 240 Mont. 316, 320, 783 P.2d 1372, 1374-1375. The testimony presented by the parties is diametrically opposed. However, resolving conflicts in testimony is the trier of fact’s function. Marriage of Mitchell, [248 Mont. 105,] 809 P.2d at 584, 48 St.Rep. at 354. The District Court listened to the testimony, reviewed the exhibits, and was persuaded by the evidence presented on behalf of Marcus. We will not substitute our judgment for that of the district court unless the appellant shows an abuse of the district court’s discretion. Marriage of Mitchell, [248 Mont. 105,] 809 P.2d at 584, 48 St.Rep. at 354.

The District Court’s findings reveal that the court based its decision on Rian’s best interest. The findings support the court’s consideration of Rian’s best interest concluding that it was in Rian’s best interest to change physical custody to enable Rian and Marcus to form a meaningful relationship. Accordingly, we hold that the District Court did not err in modifying custody by transferring physical custody of Rian from Jan to Marcus.

II.

Did the District Court err in failing to follow the child’s wishes as to her physical custody and primary residence?

As previously stated, the court was statutorily mandated to consider Rian’s wishes when determining her best interest. Section 40-4-212, MCA. However, the court’s decision after considering the child’s wishes is within the court’s discretion.

Considering the court’s conversation with Rian, it is clear that the court did not err in failing to follow her wishes. The trial judge is singularly equipped to assess a young child’s ability to formulate and articulate her custody wishes and weigh that preference in light of the other evidence and factors enumerated in 40-4-212, MCA. In re Marriage of Merriman (Mont. 1991), [247 Mont. 491,] 807 P.2d 1351, 1354, 48 St.Rep. 275, 276. A child’s expressed wishes are not determinative of best interest. Marriage of Merriman, 807 P.2d at 1354, 48 St.Rep. at 276.

The District Court and all parties agree that Rian would rather live with Jan; Rian clearly expressed to the court her strong desire not to live with Marcus. In Spite of Rian’s wishes to remain with Jan, the District Court concluded that Rian’s best interests required the opportunity to have meaningful relationships with both Jan and Marcus. Rian has been given the opportunity to develop such a relationship with Jan. She has been deprived of the opportunity to develop such a relationship with Marcus due to Jan’s continued interference and Jan’s fostering and nurturing of the father/daughter relationship between Rian and her step-father, which has frustrated any chance for a relationship between Rian and Marcus. Due to Rian’s age, the court found that this would be the last opportunity for Rian and Marcus to develop a strong and lasting father/daughter relationship. Further, if Rian remained with Jan, her contact with Marcus would only diminish and a healthy father/daughter relationship would never develop.

A review of the record reveals that the District Court considered Rian’s wishes along with the other best interest factors of 40-4-212, MCA, and weighed them accordingly. We hold that the District Court did not err in modifying physical custody of Rian despite Rian’s expressed preference to remain with Jan.

III.

Did the District Court err in failing to appoint independent counsel to represent Rian’s interests?

Section 40-4-205, MCA, states “[t]he court may appoint an attorney to represent the interests of a minor dependent child with respect to his support, custody, and visitation ... .” (Emphasis added.) Neither party moved the District Court for independent counsel to represent Rian’s interests at the August 14, 1990, or the September 20, 1990, hearings. This Court will not consider an issue for the first time on appeal which the parties failed to raise at the district court. Marriage of Merriman, 807 P.2d at 1354, 48 St.Rep. at 276.

Based on the foregoing discussion, we affirm the decision of the District Court.

JUSTICES HUNT, GRAY, McDONOUGH and WEBER concur.

JUSTICE TRIEWEILER

dissenting.

I dissent from the opinion of the majority.

The majority opinion is based almost exclusively on the testimony of Marcus Ulland (the father) and representations made in affidavits filed by his attorney.

There was other evidence in the record from the testimony of Jan Gregson (the mother), several counselors, and Rian Ulland herself which provide a different explanation for the deterioration of relations among these three people.

Rian Ulland has lived with her mother for the first 12 years of her life. She was a part of the family unit formed by her mother and her stepfather for ten years immediately preceding the District Court’s decision which transferred custody to her father.

Rian had spent most of her formative years in Helena, and enrolled in the Helena school system in kindergarten. By all accounts, she had an active, successful, and happy life. She was involved in her church youth group, taught swimming lessons at the YMCA, had a role in the Middle School play immediately before the District Court’s decision, and had planned to be in the play for the next semester. At the time of the District Court hearing, she was about to try out for the swim team; she was a member of the seventh grade basketball team, and she had successfully tried out for a singing group at the Middle School known as “Celebrations.”

In her interview with the District Judge, Rian explained that it was she who requested that her mother ask the court to modify the visitation provisions in her parents’ divorce decree so that she would not have to spend so much time with her father. She pointed out that she loved her mother and stepfather very much and enjoyed living and spending time with them, but did not feel that her father had ever made much of an effort to get to know her. She stated that her favorite activities, other than her athletic interests in softball, swimming, and basketball, were spending time with her friends, family, and maternal grandparents.

By all accounts, the family unit formed by the mother, stepfather, and Rian was an extremely close, loving, and nurturing family.

James Farrell is a counselor who specializes in working with children and evaluating dysfunctional families. He evaluated Rian prior to the most recent hearings held in the District Court. From that evaluation he concluded the she was pleasant, had an appropriate demeanor, was brighter than average, and assertive. He reported that her living situation with her mother was a positive one, and found no evidence that her mother had interfered with her ability to form a positive relationship with her father.

The only counselors, in addition to James Farrell, who provided opinions in this case were Jane S. Fisher, Ph.D., who evaluated Rian subsequent to the court’s decree, and Marcia K. Wall, Rian’s counselor at Helena Middle School.

Ms. Fisher concluded that Rian had an extremely close and bonded relationship with her mother, but that she was uncomfortable with and did not trust her father. She concluded that the responsibility for Rian’s lack of a relationship with her father was his. Following the District Court’s decision, Rian was unable to sleep, unable to eat, confused, frightened, and depressed.

Ms. Wall described Rian as a wonderful girl who was mature beyond her years and academically very successful. During the semester prior to the District Court’s decision transferring custody to her father, she had nearly an “A” average in school. It was Ms. Wall’s opinion that it was in Rian’s best interest that she be left in the custody of her mother and stepfather.

There was substantial evidence that Rian’s estrangement from her father was not primarily related to the recent disputes between her mother and father regarding exercise of her father’s visitation rights.

There was evidence that during the first seven years of her life, Rian’s father made very little effort to communicate with her, and that even in the most recent years prior to the District Court’s hearing, his efforts were sporadic and inconsistent. There was substantial evidence that her father’s unpredictable efforts to spend time with her were a disruption to her very active life. Many of the conflicts which arose between her mother and father over visitation resulted from efforts by her mother to protect her life from repeated disruption.

I provide this background information to point out that there was more than one version of the events which led to the District Court hearing to modify custody. However, even if one accepts the version of events reported by the father, as did the District Court and the majority, it appears to me that the result of the District Court’s decision is simply to punish Rian’s mother for her lack of cooperation, rather than provide for Rian’s best interest.

In Foss v. Leifer (1976), 170 Mont. 97, 550 P.2d 1309, we stated that:

“[Election 48-339, R.C.M. 1947 [now 40-4-219, MCA], ... clearly provides district courts may not exercise discretionary power to modify a prior custody decree unless two basic elements are shown to exist: 1) new facts or facts unknown to the court at the time the initial decree was entered demonstrate that a change has occurred in the circumstances of the child or those of his custodian; and 2) this change is sufficient to warrant a modification in order to promote the particular child’s best interests. This basic standard was applied in this jurisdiction long before the enactment of the new law, and a determination of which law would be applicable under the facts presented would have no bearing on the result. Jewett v. Jewett, 73 Mont. 591, 237 P. 702; Trudgen v. Trudgen, 134 Mont. 174, 329 P.2d 225; Simon v. Simon, 154 Mont. 193, 461 P.2d 851.
“It is elemental that the phrase ‘change in circumstances’ is a term of art which must not be considered in a vacuum. No change in circumstances, regardless of its substantiality, is legally sufficient to support a modification order altering custody unless the best interests and general welfare of the child will be promoted. Altmaier v. Altmaier, 135 Mont. 404, 340 P.2d 829; Haynes v. Fillner, 106 Mont. 59, 75 P.2d 802. In all cases, the lodestar of the district court in exercise of its discretion is the welfare and best interests of the child, and not the parent. Grant v. Grant, 166 Mont. 229, 531 P.2d 1007, 32 St.Rep. 191; In re Adoption of Biery, 164 Mont. 353, 522 P.2d 1377; Turk v. Turk, 164 Mont. 35, 518 P.2d 804.”

Foss, 550 P.2d at 1311.

While the District Court’s findings of fact make frequent reference to the father’s lack of relationship with his daughter and the mother’s role in adversely affecting that relationship, there is absolutely no explanation of how the daughter’s best interest will be served by uprooting her from the only family she has ever known and taking her from the primary community in which she has lived and where she has prospered to send her to live with a family that she dislikes in unfamiliar surroundings over 500 miles away.

Furthermore, the District Court made practically no findings regarding those statutory factors which must be considered in deciding what is in a child’s best interest. Section 40-4-212, MCA, provides in relevant part that:

“(1) The court shall determine custody in accordance with the best interest of the child. The court shall consider all relevant factors, including but not limited to:
“(a) the wishes of the child’s parent or parents as to his custody;
“(b) the wishes of the child as to his custodian;
“(c) the interaction and interrelationship of the child with his parent or parents, his siblings, and any other person who may significantly affect the child’s best interest;
“(d) the child’s adjustment to his home, school, and community;
“(e) the mental and physical health of all individuals involved;
“(f) physical abuse or threat of physical abuse by one parent against the other parent or the child; and
“(g) chemical dependency, as defined in 53-24-103, or chemical abuse on the part of either parent.”

The last of these two factors were not relevant in this case. However, all of the first five factors, had they been considered, compel a conclusion that the District Court abused its discretion by transferring custody from the mother to the father. Although the wishes of the child’s parents were divided, it was the child’s specific request that she be allowed to remain in the only family unit that she had ever known. At the age of 12, her preference should have been given significant consideration.

The interaction of Rian with her family, her community, and her maternal grandparents strongly favored allowing her to continue living with her mother in Montana. The undisputed evidence was that she was extremely well adjusted to her home, school, and community, and that her mental and physical health were exceptional.

Not only did the statutoiy factors strongly favor continued custody with her mother, but the District Court failed to consider all but one of these factors in its findings of fact. In considering Rian’s interaction and interrelationship with her parents, the District Court found:

“31. Jan, Glenn Gregson, and Rian have a close, loving family relationship. Rian is active in school and extracurricular activities, including church, YMCA, theater, Sunday school, and swimming.
“32. Marcus and his wife, Dawn Ulland have a loving relationship with Rian, and they get along well together.”

The District Court made no findings regarding any specific element which would support a change of custody to Rian’s father.

In the past, we have refused to affirm findings that were deficient in this respect. In In re the Marriage of Keating (1984), 212 Mont. 462, 689 P.2d 249, we held that:

“An award of custody shall be determined in accordance with the best interest of the child. In determining custody in accordance with the best interest of the child, the District Court is statutorily required to consider all relevant factors including:
“ ‘(1) the wishes of the child’s parent or parents as to his custody;
“ ‘(2) the wishes of the child as to his custodian;
“ ‘(3) the interaction and interrelationship of the child with his parent or parents, his siblings, and any other person who may significantly affect the child’s best interest;
“ ‘(4) the child’s adjustment to his home, school, and community; and
“ ‘(5) the mental and physical health of all individuals involved.’ Section 40-4-212, MCA.
“ ‘The District Court need not make specific findings on each of the elements. Speer v. Speer (Mont. 1982), [201 Mont. 418,] 654 P.2d 1001, 1003, 39 St.Rep. 2204, 2206. However, the “essential and determining facts upon which the District Court rested its conclusion” must be expressed. Cameron v. Cameron (1982), 197 Mont. 226, 231, 641 P.2d 1057, 1060.’ Hardy v. Hans (Mont. 1984), [212 Mont. 25,] 685 P.2d 372, 374, 41 St.Rep. 1566, 1569.
“Hardy is distinguishable from this case in that here there are no findings or other indications by the court that it considered each of the factors set forth in Section 40-4-212, MCA. Absent an indication that the trial court considered all of the statutorily mandated factors, the award of custody cannot be upheld.”

Keating, 689 P.2d at 251-52.

I would reverse the judgment of the District Court for several reasons. First of all, there is no indication that the District Court considered all of the statutorily mandated factors set forth in 40-4-212, MCA, in modifying the award of Rian’s custody.

Second, if the court had considered all of the statutorily mandated factors, it would have been a clear abuse of its discretion to change custody from Jan to Marcus. This decision did not further Rian’s best interest in any way. It uprooted her, against her own wishes and the advice of every counselor she had ever seen, from her community, her family, and all other reliable relationships she had grown to depend on. By every factor which the court was required to consider, it was in Rian’s best interest to continue in the environment and the family in which she had prospered. The District Court’s order was clearly to punish Rian’s mother and reward her father. However, there is very little, if any, discussion about Rian’s interests in this case.

Under these circumstances, it is difficult to conclude that Rian’s best interest was the District Court’s primary consideration. For that reason, I would reverse the judgment of the District Court.

I concur in the foregoing dissent of Justice Trieweiler.

CHIEF JUSTICE TURNAGE concurs in the foregoing dissent of JUSTICE TRIEWEILER.


text:
    CARLENE DAGEL, Plaintiff and Appellant, v. CHARLIS MANZER, individually, and in her official capacity, Defendant and Respondent.
    No. 91-341.
    Submitted on briefs Nov. 8, 1991.
    Decided Dec. 31, 1991.
    48 St.Rep. 1166.
    251 Mont. 176.
    823 P.2d 874.

      For Appellant: Elizabeth A. Best, Best Law Offices, Great Falls.
    For Respondent: J. Dennis Moreen, Chronister, Driscoll & Moreen, Helena; J. David Slovak and Roger T. Witt, Ugrin, Alexander, Zadick & Slovak, Great Falls.
   JUSTICE WEBER

delivered the Opinion of the Court.

Plaintiff, Carlene Dagel, brought this action against Charlis Manzer to recover damages for wrongful discharge, negligent and intentional infliction of emotional distress, and violation of 42 U.S.C. 1983. Ms. Manzer moved to dismiss the complaint on the basis of res judicata and also on the grounds that the wrongful discharge and emotional distress claims were barred by the statute of limitations. The District Court for the Eighth Judicial District, Cascade County, granted Ms. Manzer’s motion and dismissed the complaint. Plaintiff appeals. We affirm in part and reverse in part.

The issues for our review are:

1. Did the District Court err in concluding that the wrongful discharge action was barred by the statute of limitations pursuant to 39-2-911, MCA?

2. Did the District Court err in concluding that emotional distress damages are not recoverable under 39-2-905, MCA?

3. Did the District Court err in concluding that the doctrine of res judicata barred plaintiff’s claims brought under 42 U.S.C. 1983?

Plaintiff, Carlene Dagel, was employed as a clerk by the City of Great Falls. Charlis Manzer was plaintiff’s immediate supervisor. On October 24, 1990, plaintiff filed the present action against Ms. Manzer in her individual and official capacities. She sought to recover damages for wrongful discharge, violation of her constitutional rights, and intentional and negligent infliction of emotional distress. Plaintiff contended that she was subjected to continual harassment by Ms. Manzer in the form of purported counsellings and reprimands. Because this was the second action filed by plaintiff, we will refer to it as Dagel II.

On February 16,1988, plaintiff filed Dagel I which was a complaint against the City of Great Falls. Plaintiff claimed damages on the same basis as set forth in Dagel II. In Dagel I, plaintiff moved for summary judgment and also moved to join Ms. Manzer as a defendant in the case which at that time named the City of Great Falls as the only defendant. The City responded by filing a cross motion for summary judgment. The District Court granted the City’s motion for summary judgment. Plaintiff then moved to amend judgment or grant a new trial of Dagel I, but that motion was denied. She then filed an appeal. That appeal resulted in the opinion in Dagel v. City of Great Falls (Mont. 1991), [250 Mont. 224,] 819 P.2d 186, 48 St. Rep. 919. We will make further reference to the holdings of this Court in our opinion in Dagel I.

Ms. Manzer moved the District Court to dismiss Dagel 77 based on res judicata, or in the alternative, based upon certain provisions of the Wrongful Discharge from Employment Act. The District Court granted Ms. Manzer’s motion to dismiss. Plaintiff appeals.

I and II

We will discuss issues I and II together.

Did the District Court err in concluding that the wrongful discharge action was barred by the statute of limitations pursuant to 39-2-911, MCA; and that emotional distress damages are not recoverable under 39-2-905, MCA?

The District Court found that plaintiff had conceded that the wrongful discharge and emotional distress claims were barred by application of the Wrongful Discharge from Employment Act. Therefore, these issues were not properly preserved for appeal. It is well established Montana law that an issue cannot be raised for the first time on appeal.

We hold that plaintiff’s wrongful discharge and emotional distress claims are not properly before this Court and the District Court was correct in dismissing those claims. In Dagel I this Court held that the plaintiff should be allowed to join Ms. Manzer as a party defendant under Rules 19 and 20, M.R.Civ.P Dagel I, 48 St.Rep. at 924. The determination of issues I and II in Dagel II are not res judicata for retrial in Dagel I.

Ill

Did the District Court err in concluding that the doctrine of res judicata barred plaintiff’s claims brought under 42 U.S.C. 1983?

In its review of the plaintiff’s complaint in the present case of Dagel II, the District Court considered the holding in Dagel I and concluded that res judicata applied and therefore barred plaintiff’s 1983 claim in this Dagel II action. We do not agree with that conclusion.

In Dagel I the District Court considered the motion for summary judgment, together with the facts presented by all parties in connection with that motion and reached the conclusion that the City of Great Falls was not hable for a 1983 claim based on a respondeat superior relationship with Ms. Manzer.

In contrast, Dagel II was considered by the District Court on a motion to dismiss for failure to state a claim upon which relief could be granted under Rule 12(b), M.R.Civ.R Unless the motion had been converted to a motion for summary judgment as provided in Rule 12(b), such a motion under Rule 12(b)(6) was limited to a consideration of the pleadings. In addition, we point out that Ms. Manzer was not a party to Dagel I and as a result, neither the plaintiff nor Ms. Manzer was able to present all of the facts and theories regarding the claim against Ms. Manzer. We conclude that in the complaint in Dagel II plaintiff has sufficiently alleged a 1983 claim against Ms. Manzer. We further conclude it is not appropriate to apply the holding from Dagel I as res judicata on this issue.

We hold that plaintiff’s claim under 42 U.S.C. 1983 is not barred by res judicata against Ms. Manzer. Dagel I was remanded to the District Court in order that the plaintiff could join Ms. Manzer as a party defendant.

Affirmed in part and reversed in part.

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