author: MR. JUSTICE WEBER

text:
    RONALD F. HILBIG, Claimant and Appellant, v. CENTRAL GLASS COMPANY, Employer, and State Compensation Insurance Fund, Defendant and Respondent.
    No. 88-613.
    Submitted on Briefs June 30, 1989.
    Decided Aug. 11, 1989.
    777 P.2d 1296.

      R.V. Bottomly, Bottomly Law Offices, Great Falls, for claimant and appellant.
    R. Scott Currey, Agency Legal Services Div., Helena, for defendant and respondent.
   MR. JUSTICE WEBER

delivered the Opinion of the Court.

Ronald Hilbig appeals a decision of the Workers’ Compensation Court denying a lump sum conversion of his benefits because the parties failed to enter into a binding agreement. Mr. Hilbig also appeals the lower court’s denial of his petition for a larger award of domiciliary care. We affirm and remand for further proceedings consistent with this opinion.

The issues are:

1. Did the Workers’ Compensation Court err in concluding that the parties’ oral negotiations did not establish a binding contractual agreement?

2. Did the Workers’ Compensation Court err in its award of domiciliary care?

Ronald Hilbig had been employed as a glazier for 24 years when he fell from scaffolding approximately 12 to 15 feet to the ground while on the job on November 17, 1983. As a result of this fall, Mr. Hilbig suffered a severe head injury and was rendered permanently totally disabled, a fact which the State Fund does not dispute.

On July 17,1985, two meetings were held between claimant’s counsel, and State Fund representatives in an attempt to negotiate a settlement agreement. The Workers’ Compensation Court found that during these meetings, the parties agreed that claimant was permanently totally disabled and could receive a lump sum payment of $179,549.63 if claimant’s counsel could “put together” a justification for the lump sum conversion. It is the parties’ understanding of the phrase “put together” which is the subject of this appeal. The Workers’ Compensation Court made the following findings in this regard:

“5. Mr. Bottomly [claimant’s attorney] understood the phrase ‘put together’ to mean that he would send Mr. Strizich [State Fund claims manager] a petition and affidavit of justification, Mr. Strizich would then concur by signing and then submit it to the Insurance Compliance Bureau for approval.
“6. Mr. Strizich understood the term ‘put together’ to mean that Mr. Bottomly would present documentation that would be acceptable to the State Fund and the Insurance Compliance Bureau to justify a lump sum conversion.”

Following the initial meeting, claimant’s counsel prepared and submitted a written petition to the State Fund proposing that $120,000 of claimant’s benefits be placed in an annuity to draw interest. This proposal was rejected by the State Fund. Another meeting was held between Mr. Bottomly; Mr. Currey, attorney for the State fund; and Mr. Strizich, in an attempt to settle the dispute. At the meeting, a social security offset was also discussed. The Workers’ Compensation Court found that the parties’ testimony conflicted as to what was resolved at that meeting, because Mr. Bottomly testified that an agreement was made on the social security issue at that time, Mr. Strizich denied the making of any agreement, and Mr. Currey was not able to recall. The second meeting resulted in a written lump sum proposal dated January 21, 1987, in which, after a dispute over the social security offset language, the State Fund v/ould not concur.

Claimant then filed a petition in the Workers’ Compensation Court seeking to enforce the lump sum conversion which he contended was agreed to by the parties. The Workers’ Compensation Court denied claimant’s petition based on a finding that there was no enforceable agreement reached by the parties regarding a lump sum settlement. The lower court did grant claimant’s claim to payment for 24-hour domiciliary care, however, the payments were limited to a four-month period from December 1986 to April 1987. Claimant appeals the limitation of this award along with the lower court’s denial of his petition.

I

Did the Workers’ Compensation Court err in concluding that the parties’ oral negotiations did not establish a binding contractual agreement?

Claimant argues that a valid and enforceable agreement was created as a result of the parties’ oral negotiations during the two meetings. He bases this contention on the fact that the intentions of the parties are discernible to a reasonable degree and that the material elements of the agreement were stated, citing Thrasher v. Schreiber (1926), 77 Mont. 221, 227, 250 P. 600, 602, and Somont Oil Co., Inc. v. Nutter (Mont. 1987), [228 Mont. 467,] 743 P.2d 1016, 1019, 44 St.Rep. 1685, 1689. The State Fund concedes that the parties did in fact agree to claimant’s disability status as permanently totally disabled and that claimant could receive biweekly benefits in the form of a lump sum payment. Despite these points of agreement, the State Fund argues that the parties’ understanding of how those terms were to be acted upon is at issue and prevents the formation of a valid, enforceable agreement. As pointed out by the hearing examiner, this issue hinged upon the parties’ understanding of what it meant to “put together” a justification for a lump sum conversion. The Workers’ Compensation Court’s findings reflect that claimant’s counsel assumed a lump sum payment would be forthcoming upon submission of the written proposal, while the State Fund representative understood that further approval would be necessary. The record supports these findings and the parties do not disagree as to the source of the misunderstanding, but only as to its effect.

In order for a valid and enforceable contract to exist, the following elements must be present:

(1) identifiable parties capable of contracting;

(2) their consent;

(3) a lawful object; and

(4) a sufficient cause or consideration.

Section 28-2-102, MCA.

The Workers’ Compensation Court concluded that a lack of consent precluded the formation of a binding contract requiring the insurer to concur in the written petition later submitted by the claimant. We agree. The facts here indicate that there was no meeting of the minds on the basic elements of an enforceable agreement. Claimant’s counsel assumed that mere preparation of the terms in written form was sufficient. This assumption, however, is not consistent with the statutory procedure for conversion of biweekly benefits to a lump sum payment as set forth in § 39-71-741, MCA. That statute was amended retroactively in 1985. However, this Court reinstated all pre-1985 injuries under the language of the statute prior to the 1985 amendment in Buckman v. Montana Deaconess Hospital (Mont. 1986), [224 Mont. 318,] 730 P.2d 380, 43 St.Rep. 2216. The relevant statute, therefore, is § 39-71-741, MCA (1983), which reads:

“Compromise settlement and lump-sum payments — division approval required. The biweekly payments provided for in this chapter may be converted, in whole or in part, into a lump-sum payment. Such conversion can only be made upon the written application of the injured worker or the worker’s beneficiary, with the concurrence of the insurer, and shall rest in the discretion of the division, both as to the amount of such lump-sum payment and the advisability of such conversion. The division is hereby vested with full power, authority, and jurisdiction to allow and approve all compromises of claims under this chapter. All settlements and compromises of compensation provided in this chapter are void without the approval of the division. Approval of the division must be in writing . . . .”

The statute requires written application by the worker (Mr. Hilbig) with the concurrence of the insurer (State Fund). Claimant failed to prove the concurrence of the State Fund to the satisfaction of the Workers’ Compensation Court. The record contains substantial evidence to support that conclusion. We therefore affirm the Workers’ Compensation Court on this issue. As a result claimant is not entitled to the claimed twenty percent penalty under § 39-71-2907, MCA.

II

Did the Workers’ Compensation Court err in its award of domiciliary care?

On January 9, 1987, the parties agreed upon a pretrial order which included the following issue:

“Whether the State Fund has paid all medical expenses of which payment is required pursuant to section 39-71-704, MCA.”

The trial took place on January 16, 1987. Prior to the entry of judgment, the State Fund sent a letter to claimant’s counsel dated April 8, 1987, stating that:

“The State Fund will authorize Mr. Hilbig to obtain domiciliary care from the Northern Rocky Mountain Easter Seals Society for a period of 6 months, 8 hours per day, at $7.50 per hour.”

This offer was rejected by the claimant by letter dated April 20, 1987, which stated:

“The offer of limited home care which you have extended comes after this case, and that particular issue, is before the Workers’ Compensation Court, and the issue has been submitted for the Court’s decision. The Workers’ Compensation Court now is the ex-elusive forum to deal with the issue of the need and extent of home care services.
“Mrs. Hilbig has been supplying home care services for 16 hours five days a week and 24 hours two days a week, since November 17, 1983, and of course, expects to be compensated for her services, both in the past and in the future.”

On April 14, 1987, prior to receipt of the above letter, the State Fund filed a motion to clarify issues relating to domiciliary care. The State Fund contended that due to its offer of April 8, 1987, the issue of future benefits had been resolved and was no longer an issue before the court. The court determined that clarification of the issue was not necessary because:

“Both parties have agreed that the question of domiciliary care to April 8, 1987, is an issue. Whether or not future domiciliary care is necessary depends upon the evidence presented and the court will not create new issues at this late date. Issues not decided at this hearing can return by the petition of either party should disputes not be resolved by the parties.”

The court also noted that “[a]t the end of the time period (six months from the date payment began) consideration would be given to future needs of the claimant.”

The court’s findings of fact, conclusions of law and proposed judgment were entered on June 20, 1988. The court determined that Mr. Hilbig was entitled to 24 hour-a-day home health care, and awarded domiciliary care payable to claimant’s wife in the amount of $7.50 per hour for 24 hours a day from December 18, 1986, to April 8, 1987. The date which payment was ordered to begin was the date the lower court found the employer first had knowledge of the need or demand for domiciliary care, citing Carlson v. Cain (1985), 216 Mont. 129, 140, 700 P.2d 607, 614. Regarding the April 8, 1987 cutoff date, the court concluded that:

“The defendant State Fund has acknowledged claimant’s entitlement of domiciliary benefits of $7.50 per hour for eight hours a day to claimant’s wife beginning April 8, 1987, but not before that date.” No other justification appears in the court’s order why home health care benefits were limited to a four-month period or the need for future domiciliary care.

On June 20, 1988, claimant filed a petition with the Workers’ Compensation Court requesting that the court revise its order of June 17, 1988, to provide for domiciliary care, past and future, based on the court’s finding that claimant is entitled to 24 hours of domiciliary care. Claimant’s petition was denied by order dated July 12, 1988, which stated:

“The issues decided by the hearing examiner were those presented by the parties and there is clearly no basis for the claimant to now request additional issues beyond those submitted to the Court. The record amply supports the findings of the hearing examiner and the judgment of this Court.”

Claimant now appeals both the above order and the judgment rendered on the issue of domiciliary care. First he disputes the court’s finding that the employer did not have knowledge of claimant’s need for domiciliary care until December 18,1986. He argues that the evidence clearly establishes constructive notice on the part of the employer from the date of claimant’s discharge from the hospital on December 6, 1983.

Claimant also disputes the court’s limitation of home health care benefits to April 8, 1987, arguing that such a conclusion is inconsistent with the court’s finding that claimant requires 24 hours of care each day and that his condition is “not improving and is likely to decline.” Claimant requests that this Court reverse the lower court’s imposition of a cutoff date and order that home health care benefits be paid, at the rate of 24 hours per day, unless and until the State Fund demonstrates that such care is no longer needed. We will address these claims separately.

LIMITATION OF BENEFITS AS COMMENCING ON DECEMBER 18, 1986:

The employer’s knowledge of the employee’s need for medical services at home resulting from the industrial injury is one factor which must be met when considering eligibility for domiciliary care. Larson v. Squire Shops, Inc. (Mont. 1987), [228 Mont. 377,] 742 P.2d 1003, 1008, 44 St.Rep. 1612, 1619. The Workers’ Compensation Court determined that December 18, 1986, was the date the employer first knew of the need or demand for domiciliary care. On that date, the Workers’ Compensation Court found that a pretrial conference was held in which the claimant first requested domiciliary care. The court further found that the medical reports prior to that date did not recommend home health care for the claimant.

Claimant argues that the employer had constructive knowledge of his need for home health care based on medical reports demonstrating the severity of head injury and the effects upon claimant, such as a memory loss, headaches, depression and anxiety. Claimant contends that this constructive knowledge dates back to December 6, 1983, when he was released from the hospital, and that Mrs. Hilbig should be reimbursed for 24 hour per day health care from that date.

The conclusion of the Workers’ Compensation Court will not be disturbed if there is substantial evidence in the record to support its findings. Giacoletto v. Silver Bow Pizza Parlor (Mont. 1988), [231 Mont. 191,] 751 P.2d 1059, 1061-62, 45 St.Rep. 536, 537. We conclude that the record supports the lower court’s findings and conclusions that there was no knowledge on the part of the employer until December 18, 1986, when domiciliary care was first requested by the claimant. We affirm the Workers’ Compensation Court as to the commencement date of domiciliary care.

LIMITATION OF BENEFITS TO APRIL 8, 1987:

It is not clear from the court’s findings why it placed this cutoff date on benefits payable to Mrs. Hilbig. In its Order Denying Defendant’s Motion to Clarify the Domiciliary Care Issue, the court stated:

“On April 8, 1984, [1987] State Fund claims examiner, Larry Thomas, informed the claimant’s counsel, R.V. Bottomly, that the State Fund is authorizing domiciliary care for a period of six months, at eight hours per day, at $7.50 per hour. At the end of that time period, consideration would be given to future needs of the claimant.”

The record shows that the Workers’ Compensation Court limited domiciliary care to benefits due prior to April 14, 1987, the date of the State Fund offer of 8 hours per day of such care at $7.50 per hour. The court assumed that benefits after that date would be decided at some later date following a six-month observation period during which claimant’s needs would be monitored and evaluated. We note that more than one year had expired from the April 14, 1987 offer to the June 20, 1988 court order. The six-month period had long expired. In addition, we note that the pretrial order of January 9, 1987 provided that the issue was whether the State Fund had paid all medical expenses under § 39-71-704, MCA, which included the domiciliary care issue.

We affirm the Workers’ Compensation Court award of domiciliary care of $7.50 per hour, 24 hours a day, from December 6, 1986, to April 8, 1987. We remand this cause to the Workers’ Compensation Court for such additional proceedings as it shall determine to be necessary in order that the court may determine the extent of the domiciliary care to which claimant is entitled from and after April 8, 1987.

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


source: Caselaw Access Project

license: Public Domain

text:
    In re The MATTER OF R.T.L.P., Youth in Need of Care.
    No. 88-614.
    Submitted on Briefs May 25, 1989.
    Decided Aug. 11, 1989.
    777 P.2d 892.

      Sally M. Johnson, Billings, for appellant.
    Marc Racicot, Atty. Gen., Dorothy McCarter, Asst. Atty. Gen., Helena, Harold Hanser, County Atty., Greg Mullowney, Deputy County Atty., Damon Gannett, Olsen, Christensen & Gannett, Camille Ventrell, and Davidson & Poppler, Billings, for respondent.
   MR. JUSTICE WEBER

delivered the Opinion of the Court,

This is an appeal from a ruling of the District Court of the Thirteenth Judicial District, Yellowstone County, granting long-term custody of R.T.L.P. to his natural grandmother and her husband. Mother appeals. We affirm.

The issues presented for our review are:

1. Did the District Court err in determining that R.T.L.P. was a “youth in need of care?”

2. Is the granting of long-term custody until age 18 the equivalent of a termination of parental rights, requiring that the statutory factors of termination be established?

3. Was the mother constitutionally entitled to effective assistance of counsel?

R.T.L.P. was born in Montana on February 5, 1983. The family moved to Wisconsin where they resided until 1984. In 1984 R.T.L.P.’s mother and father separated and the state of Wisconsin began an investigation into the family situation. In violation of a Wisconsin court order, mother moved to Missoula, Montana on August 15, 1984, with R.T.L.P. and his baby sister. At that time R.T.L.P. was seventeen months old and the sister was two months old. Mother claims she left Wisconsin because she was afraid of physical harm from her husband. Upon arrival in Montana, mother and her children moved in with the maternal grandmother and her husband.

Upon their arrival, the grandmother immediately noticed that the 2 month old baby appeared very sick and that the infant had a burn on her body. Grandmother made an appointment with a doctor and both the grandmother and the mother took the baby to the doctor on August 17, 1984. The baby was diagnosed as a “failure to thrive” baby and a letter from the doctor began by stating: “To Whom it May Concern: This child suffered from severe malnutrition.” Efforts to feed the infant resulted in a perforated bowel. On August 20 the infant was flown to Salt Lake City, Utah, for further medical care, but the infant died on August 31, 1984. While the cause of death was listed as septicemia with meningitis, reports from both the Missoula doctors and the Salt Lake City doctors revealed that the infant was in a very weakened physical condition.

The grandmother testified that for the few days in which she observed the mother care for the child, the mother was feeding the infant diluted formula, and also that she allowed the infant to cry all night rather than feeding her. She testified that the mother never held or cuddled the baby.

After the funeral of the baby sister, R.T.L.P. spent five weeks with an aunt who lived in Idaho. Mother made no contact with R.T.L.P. during this time.

The state of Wisconsin continued its involvement with the family, culminating in an award of temporary custody of R.T.L.P. to the grandmother. Mother agreed to this custody arrangement. R.T.L.P. and his mother resided with the maternal grandparents from August 1984 until October 1986. During this time the grandparents took care of R.T.L.P. Mother would occasionally leave the home for periods of up to 4 to 6 weeks at a time, and during these absences she maintained little or no contact with her son. When the grandparents moved to Billings, mother and R.T.L.P. moved with them.

In May 1986, mother moved out of the grandparents’ home and moved in with a man whom she later married. R.T.L.P. remained with his grandparents who assumed his total care. After this, mother visited her son only every 10 days to two weeks.

In October of 1986, mother and her boyfriend asked the grandparents if they could pick up R.T.L.P. and take him out to get pizza that evening. The grandparents agreed to this and R.T.L.P. left with his mother and her friend. When the child was not returned, the grandparents contacted the police. The State of Montana obtained temporary investigative authority, and it was determined that mother and her boyfriend had taken R.T.L.P. to California, where they were residing with the boyfriend’s parents. On November 7, 1986, pursuant to an order granting the State of Montana temporary custody of R.T.L.P., the child was returned to Montana.

A guardian ad litem was appointed for R.T.L.P., and on December 4, 1986, a hearing was held in Montana to determine the custody of R.T.L.P. At the close of the hearing, the court ordered that R.T.L.P. be placed in the temporary custody of Social Rehabilitation Services (SRS) for six months. R.T.L.P. resided with foster parents in their home. Temporary custody was extended twice and in April of 1988 the grandparents made a motion to obtain custody of R.T.L.P. As a result of the hearing on this motion, held May 31 and June 1, 1988, the court granted long-term custody of R.T.L.P. until age 18 to the natural grandmother and her husband. Mother appeals. We affirm.

I

Did the District Court err in determining R.T.L.P. to be a youth in need of care?

In reviewing a custody order by the District Court we have previously stated:

“[T]his Court is mindful that the primary duty of deciding the proper custody of children is the task of the district court. As a result, all reasonable presumptions as to the correctness of the determination by the district court will be made. Due to this presumption of correctness, the district court’s findings will not be disturbed unless there is a mistake of law or a finding of fact not supported by credible evidence that would amount to a clear abuse of discretion. (Citation omitted.)”

Matter of C.G. (Mont. 1988), [230 Mont. 117,] 747 P.2d 1369, 1371, 45 St.Rep. 63, 66.

Before the State may become involved in the custody of a youth, the youth must be adjudicated a “youth in need of care”, which, pursuant to § 41-3-102(11), means a youth who is “dependent, abused or neglected.” An abused or neglected child is further defined in § 41-3-102(2) as “a child whose normal physical or mental health or welfare is harmed or threatened with harm by the acts or omissions of his parent or other person responsible for his welfare.” In the present case the District Court determined that R.T.L.P. was a youth in need of care, in that he had been “physically abused, emotionally abused and emotionally neglected.” Our review of the record reveals ample evidence to support this finding.

The mother voluntarily left R.T.L.P. in the care of her mother and stepfather for two years. During this time, the grandmother assumed responsibility for the child’s physical and emotional needs. The evidence showed that mother often left home for days and weeks, without maintaining contact with him. R.T.L.P. called the grandmother “Mamma,” and he called his mother by her given name. In fact, grandmother testified that at times the mother directed her son not to call her “Mamma,” telling him that the grandmother was his “Mamma”.

The mother and her boyfriend testified that they took R.T.L.P. to California because they wanted to get married and “be a family.” However, the testimony elicited from them on cross-examination showed that they never considered the impact of that decision on R.T.L.P. Reports from social workers showed that after this event the youth had nightmares and was fearful of being taken from his grandparents again.

When R.T.L.P. was returned to Montana, the mother and her boyfriend also returned and were married. Neither became employed. Mother then began a Service Treatment Program through SRS designed to help her with parenting abilities. Although she was somewhat cooperative in this plan, she missed many appointments. During this time she and her new husband had visits with R.T.L.P. two times per week. After several of these visits. R.T.L.P. was returned to the grandparents with indications of physical abuse, including a swollen mouth, swollen lip, black eye, chipped tooth, and back and abdominal pain.

The court heard testimony from a licensed clinical psychologist. The psychologist determined that mother was capable of parenting. However, he also noted that he only saw her twelve times during a period of two and one half months, and based his evaluation solely on mother’s statements to him. He acknowledged that he might change his evaluation if her statements were incorrect. He diagnosed two disorders in the mother: post-traumatic stress disorder and dependent personality disorder.

The social worker saw mother and R.T.L.P. for a year and a half, from October 1986 to April 1988. His testimony emphasized that the child has shown a lack of ability to bond with his mother, but that there is a strong bond with the grandmother. He stated that irreparable damage had been done in regard to R.T.L.P.’s ability to bond with his mother. He testified that the youth was emotionally healthy at the time of the hearing, but that this was a result of being in the grandparents’ care. He expressed serious concern about R.T.L.P.’s physical and emotional welfare should he be placed in the custody of mother and her new husband. His recommendation was that R.T.L.P. remain in the grandparents’ care.

The District Court found that mother was unstable and totally lacked credibility. The record supports this finding. Mother gave two different stories as to the origin of the burn on the infant daughter who died. In 1984 she first reported that at a women’s shelter in Wisconsin another mother had put Crisco on the baby and left her laying in the sun. At the custody hearing mother testified that her former husband and his friends had broken into the women’s shelter, tied her to a chair, and gang raped her. She stated they had put Crisco on the infant and put her under a heat lamp, resulting in the infant’s burn.

Mother’s sister testified that for many years mother had accused various people, including family members, of sexual abuse. She stated that none of these allegations had ever been proven to be true. She also testified to personal knowledge of mother’s past drug abuse, including the use of cocaine and heroine during her pregnancies. She testified that she had seen mother chase R.T.L.P. with a vacuum hose, even though the child was terrified of loud noises.

Mother contends that the District Court merely considered the child’s best interests in awarding custody, and did not first establish that R.T.L.P. was a youth in need of care. Mother is correct in urging that an initial finding of abuse, neglect or dependency is the “jurisdictional prerequisite for any court ordered transfer of custody,” and only after this showing has been made is the best interests test relevant. Matter of M.G.M. (1982), 201 Mont. 400, 407, 654 P.2d 994, 998. However, our review of the record reveals ample evidence to support the District Court’s finding that R.T.L.P. was physically abused, emotionally abused, neglected, and therefore a youth in need of care.

For four years mother’s actions were marked by indifference to and neglect of her parental responsibilities. She did not assume the physical care of her son, and was insensitive to her son’s emotional needs. Additionally, the District Court gave serious consideration to the circumstances surrounding the death of R.T.L.P.’s infant sister, which strongly suggested mother’s neglect of that child also. These facts are certainly relevant to mother’s ability to parent.

The record demonstrates that mother has not been an adequate parent and that there is substantial potential for harm to R.T.L.P. should he be placed in mother’s care. While mother states that she would provide a good home at this point, her past actions and her present instability and lack of credibility are not persuasive. R.T.L.P. does not need to wait longer for mother to improve her parenting skills. Matter of C.A.R. (1984), 214 Mont. 174, 188, 693 P.2d 1214, 1222. We conclude that R.T.L.P. is a youth in need of care whose best interests are served by remaining in the custody of the grandparents. We therefore affirm the District Court.

II

Is the granting of long-term custody until age 18 the equivalent of a termination of parental rights, requiring that the statutory factors of parental termination be met?

The court’s order awarded custody of R.T.L.P. to his grandparents until he reaches age 18. The grandparents have the right to make decisions regarding the youth’s medical, educational, and legal needs. Further, the order states that the mother’s visitation rights shall be restricted and supervised. Mother is allowed visitation only twice a month for one hour at the Montana Department of Family Services. Mother contends that this equates with parental termination and that therefore the factors of § 41-3-609, MCA, must be fulfilled.

The court granted long-term custody pursuant to § 41-3-406, MCA, which states in pertinent part:

“If a youth is found to be abused, neglected or dependent under 41-3-404, the court after the dispositional hearing may enter its judgment making any of the following dispositions to protect the welfare of the youth:
“(3) transfer legal custody to any of the following:
“(c) a relative or other individual who, after study by a social service agency designated by the court, is found by the court to be qualified to receive and care for the youth;”

Under this statute it is only necessary that the child be a “youth in need of care,” defined in 41-3-102(11), MCA, as a youth who is “abused, neglected, or dependent.” Termination of the parent child relationship requires much more stringent criteria. The relevant statute, § 41-3-609, MCA, lists three requirements which must be established before parental rights may be terminated. Those requirements are 1) that the child is an adjudicated youth in need of care, 2) a court approved treatment plan has not been complied with or been successful, and 3) the conduct or condition causing the problem cannot be rectified within a reasonable time. Subsection (2) of that statute enumerates several factors for guidance in the determination of the third requirement.

The effect of a decree terminating the parent-child relationship is explained in § 41-3-611, MCA, which states that the decree operates to divest the child and the parents of “all legal rights, powers, immunities, duties, and obligations with respect to each other . . .” Only the child’s right to inherit is excepted from this.

The effect of termination of parental rights was explained in Matter of V.B. (Mont. 1987), [229 Mont. 133,] 744 P.2d 1248, 1250, 44 St.Rep. 1838, 1841. In that case we stated that “when parental rights are terminated, the natural parent no longer has any rights over the child. This includes visitation rights. “

This Court has previously acknowledged the difference in an order granting long-term custody until age 18 and an order terminating parental rights. We recognized the distinct nature of each disposition and the differences in statutory requirements in the case of Matter of A.H. (Mont. 1989), [236 Mont. 323,] 769 P.2d 1245, 46 St.Rep. 395. That case affirmed the termination of parental rights as to one child and the granting of long-term custody until age 18 as to the other two children. In Matter of A.H. we concluded that the district court had terminated parental rights to one child because the statutory factors of § 41-3-609, MCA, were met. We also concluded that the other two children were appropriately put in long-term custody until age 18 because they were determined to be “youths in need of care,” pursuant to § 41-3-404, MCA. Thus this Court implicitly recognized that the granting of long-term custody until age 18 is not the equivalent of a termination of parental rights, and that different statutory criteria apply to each disposition.

An award of long-term custody does not totally terminate the rights of the natural parent. In the present case, although mother’s visitation rights are restricted, she may still visit her child, and may possibly petition for less restricted visitation in the future. Additionally, mother may at some point in the future petition the District Court to regain custody of R.T.L.P. While the record demonstrates a grievous incapacity to parent, it is conceivable that mother could develop as a parent to the point where it would be appropriate to restore custody to her. Possibly there are other factors which could alter the effect of the long-term custody decree. Mother’s rights as the parent of R.L.T.P. have not been terminated by the award of long term custody until age 18. The award of custody until the child’s age of majority gives stability to the child’s future and prevents repeated litigation over custody. The proper inquiry is whether parental rights have actually been terminated. Because parental rights have not been terminated we hold that a grant of long-term custody is not the equivalent of a termination of parental rights.

Ill

Is mother entitled to effective assistance of counsel at a hearing which granted long-term custody of her son to his grandparents?

Mother alleges that her legal representation at the custody hearing was less than effective, citing certain evidence which her attorney did not present. Mother contends that she was entitled to effective assistance of counsel at the hearing which determined the custody of her child, R.T.L.P. This contention fails because it is premised on an incorrect assumption.

Mother urges that the parent-child relationship is a fundamental liberty interest entitled to constitutional protection. The cases cited in support of this argument however, involved a termination of parental rights. See, e.g., Matter of R.B. (1985), 217 Mont. 99, 103, 703 P.2d 846, 848, citing Santosky v. Kramer (1982), 455 U.S. 745, 753-54, 102 S.Ct. 1388, 71 L.Ed.2d 599. In Matter of R.B. we stated that a termination of parental rights must be protected by “fundamentally fair procedures,” and that the court must address each statutory requirement of termination. Matter of R.B., 703 P.2d at 848. In the present case, the procedure followed by the court was fundamentally fair as far as this party is concerned; We find no authority for mother’s contention that a parent is entitled to effective assistance of counsel in a termination proceeding. Furthermore, as we concluded in Issue I, the present case is not a termination because it does not involve the severing of a parent-child relationship. Therefore, we need not address mother’s contentions regarding effective assistance of counsel.

Affirmed.

MR. JUSTICES HARRISON, HUNT, McDONOUGH and GULBRANDSON concur.


author: MR. JUSTICE McDONOUGH

text:
    DAVE JOHNSON, Plaintiff and Respondent, v. WARREN A. McMILLAN, Defendant and Appellant.
    No. 89-05.
    Submitted on Briefs June 16, 1989.
    Decided Aug. 11, 1989.
    778 P.2d 395.
    John P. Atkins, Bryan & Atkins, Bozeman, for defendant and appellant.
    H.A. Bolinger, Bozeman, for plaintiff and respondent.
   MR. JUSTICE McDONOUGH

delivered the Opinion of the Court.

This appeal from the District Court of the Eighteenth Judicial District, Gallatin County, involves a dispute over public use of a road across appellant McMillan’s property. The District Court permanently enjoined McMillan from interfering with use of the road holding that the road constituted a public way. Respondent Johnson had requested the relief granted by the lower court arguing that the road was a public way by virtue of prescriptive use from approximately 1895 to 1985. We affirm.

Timberline road follows Timberline Creek up several miles from the Jackson Creek Interchange on Interstate 90. The road is on an old railroad bed built by the Northern Pacific Railway in the early 1890’s. The rail line formerly connected Northern Pacific’s main line to the Timberline coal mining camp. The camp flourished during most of the 1880’s, but died out in the early 1890’s. In 1912, the rail was removed from the bed.

Testimony at trial documented public use of the old railroad bed as a road across what is today McMillan’s property in the late 1930’s. Testimony also documented public use of the road from the early 1950’s to 1976, when McMillan purchased the land. Following McMillan’s purchase of the property, witnesses testified that public use of the road continued up until McMillan placed a locked gate on the road in 1985.

During the period from the early 1950’s to the present, various unlocked gates have been installed and in operation on the road. However, the gates were erected to keep cattle from roaming rather than to deny public access. Except for McMillan’s locked gate, there is no evidence that any other landowner has attempted to restrict public access during the long period of time that the road has been in use by the public. Hilda Peterson, McMillan’s predecessor in interest to the land involved, testified she maintained gates to keep cattle in pasture, but freely allowed all public access through the gates. Other landowners whose property is adjacent to the road also testified that they never considered denying public access, although they may have denied access if the public use had been abused. Hilda Peterson also testified that hunters had sought and obtained her permission to travel the road and hunt on her property.

Issue

Whether the District Court erred in concluding that the Timberline Road is a public road by reason of a prescriptive easement?

The public’s acquisition of a prescriptive easement on a private road may be explained as follows:

“That the public may acquire the right by prescription to pass over private land is undisputed and such is the law in Montana. To establish the existence of a public road by prescription it must be shown that the public followed a definite course continuously and uninterruptedly for the prescribed statutory period together with an assumption of control adverse to the owner ....
“By ‘continuous and uninterrupted use’ is meant that the use was not interrupted by the act of the owner of the land, and that the right was not abandoned by the one claiming it ... .
“This court has said that to establish a prescriptive right it must be shown that the use was adverse and not by permission of the landowner. However, the older a road the more difficult it usually is to produce the proof of actual adverse use because the witnesses are no longer usually available ....
“The fact that a road has been barred by gátes to be opened and closed by the parties passing over the land has always been considered as strong evidence of a mere license to the public to pass over the designated way. [Citations omitted.]”

Kostbade v. Metier (1967), 150 Mont. 139, 142-45, 432 P.2d 382, 384-86.

Use of an alleged easement for the full statutory period, unexplained, creates a presumption of use adverse to the owner which may be overcome by evidence that the use is permissive. Lunceford v. Trenk (1974), 163 Mont. 504, 518 P.2d 266. District courts sitting as finders of fact occupy the best position to determine if the use was permissive or adverse. Lunceford, 518 P.2d at 267.

McMillan contends that the lower court erred by finding use of Timberline Road adverse to prior owners. He points out that “the general rule is that the use of the road by another will generally be regarded as permissive where such use does not injure or interfere with the owner’s use.” White v. Kamps (1946), 119 Mont. 102, 115-16, 171 P.2d 343, 349. McMillan also contends that the fact that landowners long gated the road, and the fact that he placed a locked gate on the road in 1985, provides sufficient proof to overturn the lower court’s finding that public use established the easement.

Referring again to the standard of review applicable here, absent a demonstration by McMillan that the lower court’s determinations are “clearly erroneous”, we must affirm the lower court. Rule 52(a), M.R.Civ.P. The lower court determined that the presence of gates on Timberline Road did not overcome the presumption that the public’s use was by claim of right, adverse to McMillan’s predecessors in title. We acknowledge the rule from previous cases that standing alone, evidence of use by the public of a road obstructed by gates is insufficient to establish a prescriptive easement in favor of the public. Descheemaeker v. Anderson (1957), 131 Mont. 322, 326, 310 P.2d 587, 589. But this Court has also held that a gate constructed “not to stop people but cattle, is not enough standing alone to rebut the presumption established by such [over 50 years] long public use.” Kostbade, 432 P.2d at 386.

There is substantial evidence here to support a finding that public travelers pursued a definite, fixed course, continuously and uninterruptedly, down the old railroad bed for nearly one hundred years. The evidence of permissive use brought out by McMillan is scant. Previous landowners could only speculate that they may have attempted to bar public access if gates had been left open by travelers on the road. Hilda Peterson offered another solution to the open gate hypothetical question posed by McMillan’s counsel:

“Q. Do you think that you — if a member of the public came in there and left your gate open, did you think that you had the right to go in there and ask him to leave?
“A. I would have — yes, I think maybe I would have felt that way. I would certainly have felt like asking him to please keep the gate closed.”

(Tr. at 52) Hilda Peterson also testified as follows:

“Q. And as far as you are concerned and your dad was concerned, you gave permission to everybody to go up through there?
“A. There was no specific permission given to anybody to go in there. People went in there, that’s all.”

(Tr. at 52)

Prior to 1954, the relevant statutory period for establishing the right at issue here was ten years. Section 9015 R.C.M. (1935). Since 1953, the period has been five years. Section 70-19-401, MCA. The long public use as documented in the record sufficiently supports the District Court’s finding that Timberline Road is a public way. McMillan’s evidence purporting to demonstrate permissive use does not overcome such public use. We affirm.

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


author: MR. CHIEF JUSTICE TURNAGE

text:
    KANSAS CITY LIFE INSURANCE COMPANY, a corporation, Plaintiff and Respondent, v. BRATSKY FARMS, a Montana corporation, Defendant and Appellant.
    No. 89-48.
    Submitted on Briefs July 7, 1989.
    Decided Aug. 11, 1989.
    Rehearing Denied Sept. 14, 1989.
    778 P.2d 859.

      L.R. Bretz, Billings, in Pro. Per., for defendant and appellant.
    Byron H. Dunbar, U.S. Atty., Frank D. Meglen, Asst. U.S. Atty., Billings, for plaintiff and respondent.
   MR. CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

L.R. Bretz appears pro per as the sole stockholder of Bratsky Farms, Inc. He appeals from an order of the District Court for the Thirteenth Judicial District, Yellowstone County, which denied his motion to vacate an October 31, 1988, order denying a motion to quash or vacate a writ of assistance. We affirm.

Bretz raises five issues relating to the validity of a foreclosure sale of property owned by Bratsky Farms, Inc.

Bratsky Farms, Inc., owned a ranch in Carbon County, Montana, on which Kansas City Life Insurance Company held a mortgage. The individuals named as defendants in this action held stock in Bratsky Farms, Inc., at the time this action was filed. On March 19, 1984, the District Court issued a Judgment and Decree of Foreclosure against the defendants. On the same date, the court issued an order of sale of the property. Also on that date, Bratsky Farms, Inc., filed for bankruptcy, resulting in an automatic stay of the foreclosure proceedings.

On February 26, 1985, after the stay was lifted by order of the bankruptcy court, the Carbon County Sheriff issued a certificate of sale to Kansas City Life Insurance Company. On February 20, 1986, the Farmers Home Administration (FmHA), a junior lienholder, redeemed the property by paying Kansas City Life Insurance Company the sum of $337,384.77. The Bratskys made application to lease the property from FmHA, but their application was rejected and their right to appeal that decision has been exhausted.

Bretz claims sole shareholder status in Bratsky Farms, Inc., beginning January 15,1988. On June 1, 1988, FmHA filed a motion for an order for writ of assistance, asking for assistance to obtain immediate possession of the ranch, which Leo C. and Louise J. Bratsky still occupied. The writ was issued June 1, 1988. It commanded the sheriff of Carbon County to enter the property and eject the Bratskys.

Bretz filed a motion to quash the writ of assistance. The District Court denied the motion and Bretz appeals.

I.

Was the sheriffs sale void because it was based on improper statutory notice?

Bretz argues that the. publication notice of the February 26, 1985, sheriff’s sale did not comply with § 25-13-701, MCA. He also argues that due process was denied him because actual notice of the sale was never given to Bratsky Farms, Inc., or to its trustee in bankruptcy.

Section 25-13-701, MCA, requires that notice df sale on execution be given

“(c) in case of real property, by posting a similar notice, particularly describing the property, for 20 days in three public places in the county where the property is situated and also where the property is to be sold, which may be either at the courthouse or on the premises, and publishing a copy thereof once a week for the same period in some newspaper published in the county, if there be one, which notice shall be substantially as follows: . . .”

The affidavit of publication shows that notice was published on February 7, 14, and 21, 1985. The sheriff’s sale took place on February 26,1985. Bretz points out that only 19 days passed between the date of the first posted notice and the date of the sale.

The District Court cited Burton v. Kipp (1904), 30 Mont. 275, 76 P. 563. In that case, this Court held that the notice requirement in the antecedent to the above statute is directory only and that the failure to observe it does not avoid the sale as to a purchaser who is free from fault. Burton, 76 P. at 566. The Court also held that the remedy provided in what is now -§ 25-13-702, MCA, (that a sheriff selling without the required notice is liable for $500 to the aggrieved party) must be deemed exclusive.

Bretz cites several cases involving sheriff’s sales of personal property, but those cases do not apply here, as this was a sale of real property. He also cites Sink v. Squire (Mont. 1989), [236 Mont. 269,] 769 P.2d 706, 46 St.Rep. 352, which discussed service of process, not notice of a sheriff’s sale. We hold that Burton controls and that the provision of 19 days’ notice instead of 20 days’ notice does not invalidate the sheriffs sale.

II.

Is the FmHA notice of redemption deficient?

Bretz argues that the FmHA notice of redemption is deficient in that it does not set forth exactly what was owed on the judgment, what the purchase price was, what interest had been paid, what taxes had been paid, or what the purchaser’s lien debt was. He also points out that the notice erroneously gives the date of the foreclosure sale as April 24, 1984.

Section 25-13-806, MCA, sets forth the requirement for a notice of redemption:

“Notice of redemption, liens, and taxes and assessments paid. Written notice of redemption must be given to the sheriff and a duplicate filed with the county clerk, and if any taxes or assessments are paid by the redemptioner or if he has or acquired any liens other than that upon which the redemption was made, notice thereof must in like manner be given to the sheriff and filed with the county clerk, and if such notice be not filed, the property may be redeemed without paying such tax, assessments, or lien.”

The statute does not require that the notice include any of the information Bretz lists. The notice of redemption given in this case provided a description of the real property, the date of the judgment and decree of foreclosure, and the amount of the judgment. It gave the total amount paid in redemption and was signed by an agent of FmHA as redemptioner. It is true that the date given in the notice as the date of the foreclosure sale is incorrect; it is the date of the originally-scheduled sale, before the bankruptcy. However, the statute does not require that the date of the foreclosure sale be stated in the notice. We conclude that the information provided was sufficient for the purpose of giving notice. We hold that the notice of redemption is not deficient.

III.

Is the sheriff’s deed void and invalid as a basis for the writ of assistance?

Bretz argues that a sheriff’s deed cannot be issued until 60 days after a notice of redemption has been given. The redemption by FmHA occurred in February 1986 and notice of redemption was dated June 17, 1986. The sheriff’s deed is dated July 7, 1986.

Section 25-13-810, MCA, provides:

“When purchaser entitled to conveyance. If no redemption be made within 1 year after the sale, the purchaser or his assignee is entitled to a conveyance; or if so redeemed, whenever 60 days have elapsed and no other redemption has been made and notice thereof given and the time for redemption has expired, the last redemptioner or his assignee is entitled to a sheriff’s deed; but in all cases, the judgment debtor shall have the entire period of 1 year from the date of the sale to redeem the property.”

The statute allows a sheriff’s deed to be issued when 1) 60 days have elapsed after the redemption, 2) no other redemption has been made, 3) notice of redemption has been given, and 4) the time for redemption has expired. The statute gives no time requirement related to the notice. We hold that the sheriff’s deed is valid as a basis for the writ of assistance.

IV.

Did the failure to provide Bratsky Farms, Inc., with actual notice of the setting of the judicial sale of the property deny due process?

Bretz cites Peterson v. Montana Bank of Bozeman, N.A. (1984), 212 Mont. 37, 687 P.2d 673, as authority that actual notice must be given to the mortgagor before a judicial sale may be held. However, the holding in Peterson was limited to the situation presented there. Factors included no court record of posting of notice of the sale, inadequacy of the purchase price at the sale, and a sale of realty treated as a sale of personal property. Peterson, 687 P.2d at 680.

Section 25-13-701, MCA, set forth above under Issue II, does not require personal notice to the mortgagor in sales on execution of judgment on real property. In the present case, the stockholders of Bratsky Farms, Inc., were represented by counsel and appeared in person at the proceedings leading up to the judgment against them, before the execution sale. We hold that the failure to provide Brat-sky Farms, Inc., with actual notice of the judicial sale did not deny due process of the law.

V.

Did the District Court err in issuing a Writ of Assistance because the record fails to show that FmHA was entitled to the writ?

Bretz argues that the following defects were present in the motion for an order of writ of assistance: the affidavit in support of the FmHA motion showed the wrong dates for the Sheriffs sale and the certificate of sale; no judgment was properly obtained; there was no proper notice of redemption, no proper publication of notice of sale, and no actual notice of sale; the redemption time was exceeded according to the dates given on the notice; and the sheriffs deed was issued too early.

Many of the defects claimed under this issue are discussed under the other issues in this appeal. It is true that the dates given in the affidavit as the dates of the sheriffs sale and the certificate of sale were incorrect. We admonish respondent’s counsel, who executed the affidavit in support of the motion for the writ, to exercise caution in insuring the accuracy of his filings.

For a writ of assistance to properly issue, there must be a judgment, a sale conducted according to the judgment, and a sheriffs deed to the property. Federal Land Bank of Spokane v. Heidema (Mont. 1986), 224 Mont. 64, 727 P.2d 1336, 43 St.Rep. 2020. The record shows that those elements were present here and met the statutory requirements. We hold that the District Court did not err in issuing the Writ of Assistance.

Affirmed.

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


text:
    COTTONWOOD HILLS, INC., a Montana corporation, Plaintiff and Appellant, v. STATE OF MONTANA, DEPARTMENT OF LABOR & INDUSTRY, UNEMPLOYMENT INSURANCE DIVISION, and Workers’ Compensation Division, Defendant and Respondent.
    No. 89-105.
    Submitted on Briefs June 30, 1989.
    Decided Aug. 11, 1989.
    777 P.2d 1301.

      Karl P. Seel, White & Seel, Bozeman, for plaintiff and appellant.
    James Scheier, Agency Legal Services, Helena, for defendant and respondent.
   MR. CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

The District Court, Eighteenth Judicial District, dismissed the complaint of Cottonwood Hills, Inc., which sought money damages and judicial review of a workers’ compensation action. Cottonwood Hills, Inc., appeals.

The issue on appeal is whether the District Court abused its discretion by granting defendants’ motion to dismiss the complaint.

We affirm.

Cottonwood Hills, Inc. (Cottonwood), is a closely-held family corporation. In April 1985 Cottonwood hired several workers/contractors to build a pro shop at the public golf course near Bozeman, Montana. It is the characterization of these workers which was at the heart of this dispute.

In January 1987 the Unemployment Insurance Division (UID) of the Department of Labor and Industry (Department) notified Cottonwood that it would be the subject of an audit. As a result of that audit, UID determined that Cottonwood was not paying the proper rate of unemployment insurance contributions. The UID found that three of Cottonwood’s workers must be characterized as employees, not independent contractors, and thus additional premiums were owed. The Uninsured Employers’ Fund and the State Compensation Insurance Fund (State Fund) assessed additional premiums and penalties against Cottonwood. Cottonwood appealed that decision.

A contested case hearing as allowed under § 2-4-601 et seq, MCA, was held before the Employment Relations Division of the Department on April 19, 1988. A decision was issued upholding the additional assessments made by the UID. The Board of Labor Appeals affirmed the findings and decision on July 8, 1988.

During the same time period, Cottonwood requested a contested case hearing before the Division of Workers’ Compensation (DWC) of the Department. Hearing was held February 10, 1988, and a proposed order issued on March 30, 1988, in favor of the DWC and UID. The administrator of the DWC upheld the assessments made by the State Fund and Uninsured Employers’ Fund in a final order dated October 14, 1988.

On August 11, 1988, Cottonwood filed a complaint in District Court. The complaint contested the final decisions of the DWC and the UID, alleged that they had not dealt with Cottonwood in good faith and requested money damages. The defendants (DWC, UID, the Department and the State) moved to dismiss the complaint as filed in an improper forum. The District Court granted defendants’ motion. Cottonwood appeals.

For this Court to reverse the District Court’s grant of this motion, Cottonwood must make a showing that the District Court abused its discretion by dismissing the complaint. Gold Reserve Corporation v. McCarty (Mont. 1987), [228 Mont. 512,] 744 P.2d 160, 44 St.Rep. 1723. Cottonwood is unable to make that showing.

We conclude the District Court properly dismissed Cottonwood’s complaint.

Procedures for judicial review of administrative rulings are found in Part 7, Montana Administrative Procedure Act (MAPA), §§ 2-4-701 through -711, MCA. Additionally, there are detailed review provisions set forth under the “Unemployment Insurance” statutes which govern the initial dispute in this case. Specifically applicable are § 39-51-1109 (tax appeals); § 39-51-2403 (decisions of appeals referee); and § 39-51-2404, (appeal to board). Compliance with the procedures is mandatory because only after the procedures have been followed is the District Court vested with jurisdiction. F.W. Woolworth Company v. Employment Security Division (Mont. 1981), [_Mont__,] 627 P.2d 851, 38 St.Rep. 694.

The proper procedure for review of administrative rulings adverse to Cottonwood is set forth below.

Pursuant to § 39-51-1109, MCA, Cottonwood already requested a hearing before an appeals referee to contest UID’s additional assessment. See also, §§ 39-51-2403 and -2404, MCA.

Pursuant to § 39-51-2404, MCA, Cottonwood then appealed the decision of the appeals referee to the Board of Labor Appeals. At this juncture, Cottonwood’s proper review procedure was to file a petition (not a complaint) with the District Court. This Cottonwood failed to do.

Section 39-51-2410(2), MCA, states that the petition “which need not be verified but which shall state the grounds upon which a review is sought, shall be served upon the commissioners of Labor and Industry and all interested parties . . .” The District Court would then review the matter to determine if the findings of the Board of Labor Appeals were based on substantial credible evidence. Cottonwood failed to follow the correct procedure. Dismissal of the complaint on that issue was proper and is hereby affirmed.

Regarding the DWC decision, Cottonwood also is in error. Any appeal of a workers’ compensation decision must be filed with the Workers’ Compensation Court and not the District Court. Section 39-71-2401, MCA; § 24.29.207(2), A.R.M. The District Court specifically cited these §§ when it noted that the review of the DWC decision was not properly before it. We agree and affirm the dismissal as to that issue.

We note that dismissal of the complaint seeking money damages was also proper. Cottonwood alleged that the defendants had breached the covenant of good faith and fair dealing which attached to their contract (the workers’ compensation insurance policy issued by State Fund to Cottonwood in 1986). The District Court noted that claims for breach of the covenant or “bad faith” are also tort actions in Montana. Gates v. Life of Montana Insurance Co. (1983), 205 Mont. 304, 668 P.2d 213. We agree.

It is well-settled law that all tort claims against the State must first be filed with and reviewed by the Department of Administration. See, § 2-9-101, MCA, et seq., the State Tort Claims Act. Such was not done in this case, and the District Court had no jurisdiction to review the matter. It was properly dismissed.

We note that dismissal of the claim alleging breach of the covenant of good faith and fair dealing was not challenged by Cottonwood on appeal, and, therefore, its dismissal would have been upheld in any event.

Cottonwood is unable to show any abuse of discretion in the District Court’s order of December 12, 1988, dismissing its complaint.

Judgment affirmed.

MR. JUSTICES HARRISON, SHEEHY, WEBER and McDON-OUGH concur.


author: MR. JUSTICE SHEEHY

text:
    STATE OF MONTANA, Plaintiff and Appellant, v. WINIFRED P. “JERRY” HALTER, Defendant and Respondent.
    No. 88-610.
    Submitted on Briefs May 11, 1989.
    Decided Aug. 15, 1989.
    777 P.2d 1313.
    Marc Racicot, Atty. Gen., Betsy Brandborg, Asst. Atty. Gen., Helena, Thomas J. Sheehy, County Atty., Fort Benton, for plaintiff and appellant.

      Robert D. Morrison, Morrison, Young, Melcher and Brown, Havre, for defendant and respondent.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

The State of Montana appeals from an order of the District Court, Twelfth Judicial District, Chouteau County, dismissing with prejudice an information charging the defendant, Winfred P. “Jerry” Halter with two felonies upon the grounds that the State had allowed exculpatory evidence to be destroyed to the prejudice of the defendant.

We affirm the District Court.

The information filed March 16, 1988, charged the defendant in two counts, (1) felony theft, committed between September, 1986, and February 23, 1988, and (2) illegal branding, committed between May, 1987, and February 23, 1988. The subject of the branding was a red Limousin bull that on February 22, 1988 was found in the cow herd of Earl Sluggett on his ranch southeast of Big Sandy, Montana. Subsequent investigation revealed that the bull was owned by Ruth Owens and her daughter, Betty Donner, and that the bull had been missing since May 22, 1987. They resided on a ranch on the south side of the Missouri River and in reporting the bull missing, stated that they believed that the bull had crossed the Missouri River to the north side and might be found in the general area where the defendant’s ranch is located.

Earl Sluggett informed the inspectors that the bull had been in his herd on a previous occasion and at that time did not have the brand belonging to the defendant. This was probably in May, 1987. Sluggett also stated that on another occasion, the same bull had been on a ranch owned by Larry Jappe, who resides in the same area.

When Sluggett reported the discovery of the bull on his ranch on February 27, 1988, the bull carried two brands. The brand on the bull’s right hip was identified as belonging to Merritt Pride, from whom the bull had been purchased by Ruth Owens’ husband, the late Cecil Owens. The brand on the left hip of the bull appeared to be that of the defendant Halter.

Halter was arrested and entered a plea of not guilty to the charges. Thereafter, an omnibus hearing was held in the District Court at which counsel for the defendant moved for and was granted discovery of all of the State’s written or recorded statements, names of the State’s witnesses, copies of any statements, inspection of all physical and documentary evidence in the State’s possession and discovery of all special or additional information coming thereafter into the State’s possession. At the same hearing, the State indicated that it would call expert witnesses whose names would be supplied to the defendant, as well as copies of reports of any scientific tests and experiments which the State might conduct.

On July 6, 1988, the defendant moved the court for an order allowing the inspection of the red Limousin bull for the purpose of utilizing an expert of defendant’s choice to inspect the brands. The motion indicated that the county attorney had told the defendant’s counsel that the bull had been sold. The motion requested that the State take whatever action was necessary to locate the bull and allow the inspection.

On July 25, 1988, the county attorney moved the court to set a trial date. On July 26, 1988, defendant filed a written objection to the motion for trial date stating that the State had not responded to defendant’s motion for inspection of the bull and indicating that the county attorney had advised the defendant by letter that the bull “may have been slaughtered”. On August 1, 1988, the county attorney filed a reply to the motion for inspection stating that the bull had been sold at auction on May 20, 1988, and thereafter, the bull had been slaughtered. In the reply, the county attorney advised that the defendant had had an opportunity to examine the animal and that photographs of the bull were taken by the defendant.

The District Court set the cause for trial on September 21, 1988. The defendant moved to vacate the trial setting on the grounds that the bull had been slaughtered, that the animal was unavailable for inspection by the defendant’s expert and that the expert’s testimony was critical to support the defendant’s contemplated motion to dismiss by reason of destruction of exculpatory evidence.

On October 7, 1988, defendant’s counsel filed a motion to dismiss the charges against Halter because of the State’s failure to preserve exculpatory evidence in the possession and control of the State’s agents. Counsel for the defendant also filed an affidavit from Dr. Anthony Stannard, a doctor of veterinary medicine of the University of California, and a Ph.D. in veterinary pathology. His affidavit related that he had, at the request of attorneys for Halter, reviewed nine skin samples obtained from the branded pelts of nine head of cattle taken by a Havre veterinarian, conducted experiments on the same, and determined the ages of the brands, to which he could certify within 60 days. The affidavit stated that evidence from Halter would show that defendant was not in possession of the red Limousin bull from at least November 1, 1987, through February 25, 1988, and from the early spring of 1987 through June, 1987. The affidavit related that if Dr. Stannard could have inspected a skin sample from the red Limousin bull prior to its destruction, he could have determined if the brand in question was placed on the bull during the time periods set forth.

The contentions of the defendant’s counsel at the time of the motion to dismiss charges against Halter were that the slaughter of the bull prevented defendant from establishing that it was branded at a time when it was in the possession of others; that inspection would reveal the type of branding iron used which could be compared to those used by the defendant; that the slaughter prevented a direct comparison of defendant’s branding irons with the brand on the bull; and that the defendant was denied a comparison of the weight of the bull in question with the weight of the bulls previously owned by defendant.

In objecting to the motion to dismiss, the State contended before the District Court that the motion to dismiss did not meet the necessary legal standards for dismissal, that defendant had let three to four months elapse before demanding inspection of the bull, that an evidentiary hearing was necessary to determine whether the evidence was in fact exculpatory, and that otherwise, without an evidentiary hearing, the defendant’s motion should be denied.

On November 28, 1988, the District Court filed its order dismissing the charges against Halter with prejudice. In its findings, the court noted that at the omnibus hearing on May 2, 1988, when the court ordered all physical evidence in the possession of the State to be made available for inspection by defendant, the State also informed the court that it was going to use expert witnesses and scientific tests and experiments and comparisons, which indicated to the court that the State intended to preserve the red Limousin bull. The court agreed that the slaughter of the bull made it impossible for defendant’s experts to determine the age of the brand on the bull, and for making comparisons of the defendant’s branding irons with the brand that appeared on the bull. The court found defendant was also prevented from making comparisons of the weight and physical characteristics between the red Limousin bull, and red Saler bulls which defendant also owned. The court found a duty in the State to preserve the primary physical evidence of the case and that the destruction of the bull constituted destruction of exculpatory evidence which was prejudicial to an effective defense. The court further found that an evidentiary hearing was not necessary in that it would not assist the court and that the arguments of the State for an evidentiary hearing merely went to the weight of the evidence. The court stated, “The defendant, having wrongfully been denied an opportunity to inspect the bull, is unable to develop the evidence which counsel for the state indicates he is able to rebut through cross-examination or contradictory testimony.”

On appeal, the State points to the case of United States v. Agurs (1976), 427 U.S. 97, 96 S.Ct. 2392, 49 L.Ed.2d 342, in which the United States Supreme Court said that the “mere possibility” that an item of undisclosed information might help the defense or affect the outcome of the trial does not establish “materiality” in the constitutional sense. Thereafter, in California v. Trombetta (1984), 467 U.S. 479, 488-89, 104 S.Ct. 2528, 81 L.Ed.2d 413, 422, the Supreme Court said:

“Whatever the duty the constitution imposes on the state to preserve evidence, that duty must be limited to those that might be expected to play a significant role in the suspect’s defense. To meet this standard of constitutional materiality, see United States v. Agurs, 427 U.S. at 109, 110, 49 L.Ed. 342, 96 S.Ct. 2392, evidence must both possess an exculpatory value that was apparent before the evidence was destroyed, and be of such a nature that the defendant would be unable to obtain comparable evidence by other reasonably available means.”

In State v. Ronald Lee Craig (1976), 169 Mont. 150, 545 P.2d 649, this Court held that when the State, due to negligence, loss, replacement or destruction, is unable to produce certain physical evidence in the prosecution of the case, reversal of a conviction is not necessary where the actual objects were not vital to the defense, were not exculpatory in nature, and the result would not have been affected by their introduction.

The essential issue raised by the State on appeal is that the District Court should have held an evidentiary hearing in order to determine the materiality of the ability of the defendant and his agents to inspect the bull. It is true, however, as the District Court noted, that the evidentiary hearing after the slaughter would have been of little value because the slaughter prevented defendant from establishing, through his experts, the age of the brand, its comparison with defendant’s branding irons and the weight and physical characteristics of the red Limousin bull. Dr. Stannard’s affidavit establishes that he would have been able to establish, within 60 days, the age of the brand. In other words, as Dr. Stannard noted, if he found the brand were six months old, his certainty was sufficient to fix the brand anywhere from five months of age to seven months of age. In view of the fact that this bull, after its departure from its owner’s ranch, was not always on the defendant’s lands, but was present twice on Sluggett’s lands and once on Larry Jappe’s, the age of the brand was critical evidence for the defendant. In addition, destruction of the pelt meant that no comparison could be made by experts between the brand itself and the branding irons owned by the defendant.

It appears from the file therefore that (1) the evidence destroyed had an exculpatory value to the defendant, (2) the exculpatory value of the evidence was apparent before the destruction of the evidence because the State itself indicated it would conduct experiments and use experts with respect to the brands, (3) comparable evidence is not now within the defendant’s ability to obtain by other reasonably available means, and (4) there was an expectation that the lost evidence would play a significant role in the defense of the defendant.

We determine here that the slaughter of the bull was not the intentional or deliberate purpose of the State but rather that the State was negligent in preserving necessary evidence in the cause. In view of the circumstances here, the long periods when the bull was not on Halter’s lands, and was in fact finally discovered in Sluggett’s cow herd, the preservation of the bull was as critical to the State’s case to obtain a conviction as it was to the defendant to obtain an acquittal. This factor distinguishes this case from State v. Craig, supra; State v. Heth (Mont. 1988), [230 Mont. 268,] 750 P.2d 103, 45 St.Rep. 194; State v. Palmer (1983), 207 Mont. 152, 673 P.2d 1234; and State v. Amaya (Mont. 1987), [227 Mont. 390,] 739 P.2d 955, 44 St.Rep. 1173, all of which are relied on by the State. In the circumstances here, the District Court was correct in determining that an evidentiary hearing is not necessary because that which could develop from an actual inspection of the bull by experts was never developed because of the slaughter. At that point the State had nothing to rebut in an evidentiary hearing.

We therefore affirm the District Court.

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


text:
    PHIL-CO FEEDS, INC., a Montana corporation, Plaintiff and Respondent, v. FIRST NATIONAL BANK IN HAVRE, a National Banking corp., Defendant and Appellant.
    No. 89-08.
    Submitted on Briefs May 18, 1989.
    Decided Aug. 15, 1989.
    777 P.2d 1306.

      Theodore K. Thompson, Thompson & Swenson, Havre, for defendant and appellant.
    Laura Christoff erson, Gallagher, Archambeault and Knierim, Wolf Point, for plaintiff and respondent.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

The First National Bank in Havre appeals from a judgment rendered against it after jury verdict in the District Court of the Twelfth Judicial District, Hill County. The verdict was for the principal sum of $44,787.91, and judgment was entered by the District Court in favor of Phil-Co Feeds, Inc. on September 12, 1988, for the sum of $63,219.75 which includes prejudgment interest.

We affirm the Judgment of the District Court.

We will state the facts generally from the viewpoint of the plaintiff and additional facts as may be necessary for the discussion of each issue.

Phil-Co Feeds, Inc. (Phil-Co) is a Montana corporation located in Malta, Montana, engaged in the business of selling grain and feed supplement, and other animal health care products for use in animal feeding and feedlot operations.

Raymond J. Shape, with his wife, Mary Jane Shape, insofar as pertinent here, fed livestock in feedlots located on Shape’s ranches at Harlem and Roy, Montana. Shape financed his feedlot operations through First National Bank of Havre by means of various loans for the feedlot operations. It appears that First National was the sole provider of operating funds for Shape.

In September of 1981, Shape approached Vic Lefdahl, manager of Phil-Co about the purchase of feed for the feedlot operations at Harlem and Roy. An agreement was made between Phil-Co and Shape at that time that Shape would be allowed to charge feed on a monthly basis and then Shape would be billed by Phil-Co on the first of each successive month and that all statements would be paid in full by Shape by the tenth of each month. Shape advised Phil-Co that all his financing was being handled by First National Bank.

In November of 1981, Phil-Co sent Shape the October bill which required payment through the first few days of November. Shape paid the bill but later complained that he had been required by Phil-Co to pay for feed bills that were not yet due, that is, for the days in November. Shape asked that he be refunded the monies that he had paid beyond his October bill and Phil-Co complied. The feed bills from Phil-Co to Shape were averaging $2,000 per day, or $60,000 per month. It was the opinion of Vic Lefdahl that Shape “over-reacted” about the amount of the bill related to the November charges. Lefdahl decided to inquire with First National Bank about Shape’s financial ability to handle the feed bills.

On November 19, 1981, Lefdahl telephoned Randy Smith, an officer of First National Bank, and inquired as to Shape’s financial ability to pay for the feed that was being furnished to Shape. Randy Smith advised Lefdahl that Shape could handle the feed bills under his credit line with First National Bank and also that Phil-Co had no reason for concern about the amount of the feed bill, because Phil-Co would be paid first out of the proceeds of the sale of the livestock even before the Bank, saying that Phil-Co had an “automatic first lien” for payment of the feed bill on the cattle being fed.

On December 11,1981, Shape delivered a post-dated check to Phil-Co for payment on the November feed bill in the sum of $40,000. The actual balance due was $53,447.74. The post-dated check bore the date of December 16, 1981. Lefdahl called Randy Smith at the Bank to determine whether the check was good and whether it would be honored by the Bank. Randy Smith told Lefdahl that Shape was in “tough shape,” that the check would not be honored, and that Lefdahl should get out of his deal with Shape as quickly as possible.

I.

Should the District Court have Dismissed the Complaint and the Amended Complaint on the Grounds of Res Judicata?

In March of 1982, Shape filed a petition for protection in the United States Bankruptcy Court, Great Falls Division. In the bankruptcy action Phil-Co filed a complaint in the Bankruptcy Court against First National Bank. The Bank in that action filed a motion to dismiss Phil-Co’s complaint and eventually the Bankruptcy Judge, Honorable Orville Gray, issued his order granting Bank’s motion to dismiss.

Phil-Co appealed Judge Gray’s decision to the United States District Court, Great Falls Division. On May 11, 1983, the U.S. District Court Judge, Honorable Paul Hatfield affirmed the decision of Judge Orville Gray.

The Bank contends on appeal here that the decision in the Bankruptcy Court is res judicata as to the issues raised in the present cause before this Court. However, Phil-Co contends that res judicata does not apply because the action in Bankruptcy Court was only for the purpose of determining the priority of right to proceeds left in bankruptcy estate as between the Bank and Phil-Co. Phil-Co contends that the Bankruptcy Court decided only the issue of equitable subordination, and that under 11 U.S.C., § 349, the effect of the dismissal in the Bankruptcy Court was to restore in effect all parties to the status quo before the bankruptcy petition was filed.

Judge Orville Gray’s order granting the motion to dismiss was on these grounds:

“1. That the motion to dismiss filed by defendants be and the same is hereby granted.
“2. That for clarification, the court also ruled that even if plaintiff should plead the alleged statements of Mr. Randy Smith, the court would still rule that such statements are not a legal basis for recovery under the principle of equitable subordination.”

Judge Hatfield’s order on appeal to the Bankruptcy Court indicated that “the order of the Bankruptcy Judge dismissing the plaintiff’s claim for equitable subordination under 11 U.S.C. § 510(c) be accepted in whole by this Court.”

As counsel for First Bank correctly points out, res judicata applies when the following criteria are met:

(1) The parties or their privies are the same;

(2) The subject matter of the action is the same;

(3) The issues related to the subject matter are the same; and

(4) The capacities of the person are the same in reference to the subject matter and the issues between them.

See Fox v. 7L Bar Ranch Company (1982), 198 Mont. 201, 206, 645 P.2d 929, 931; Federal Land Bank of Spokane v. Heidema (1986), 224 Mont. 64, 727 P.2d 1336, 1337; Phelan v. Lee Blaine Enterprises (1986), 220 Mont. 296, 299, 716 P.2d 601, 603.

On June 22, 1983, the Bankruptcy Court dismissed Shape’s bankruptcy proceedings under Chapter 11 with prejudice upon the grounds that no plan had been filed, that no assets remained in the estate, that the costs of administration exceeded the assets and there was no chance of reorganization under Chapter 11. The dismissal was with prejudice, including all adversary matters pending in relation to the Chapter 11 proceedings.

Phil-Co’s complaint and amended complaint in the state court set forth theories of liability based on misrepresentation, equitable estoppel, fraud and bad faith. The issues in the Bankruptcy Court were related to the narrow issue of equitable subordination between competing interests of two creditors of the alleged bankrupt. Thus the claim of res judicata fails with respect to two of the criteria set forth above: the subject matter of the actions are not the same, and the issues relating to them are not the same. We hold therefore the res judicata does not apply in this action based upon the proceedings taken in the Bankruptcy Court, and the appeal to the Federal District Court.

Phil-Co further contends on this issue that under the 11 U.S.C., § 349, the dismissal with prejudice of the bankruptcy proceedings restores all parties involved in the bankruptcy to status quo. That may well be the effect of the federal statute, but in light of our holding as to res judicata it is not necessary for us to reach any conclusion with respect to the federal statute at this point.

II.

Was First National Bank Prejudiced by the Filing of an Amended Complaint by the Plaintiff Three Weeks Prior to Trial?

Trial of this cause in District Court had been set for August 9, 1988, when, on July 15, 1988, Phil-Co moved the District Court for permission to amend its complaint. Phil-Co stated that it had “learned of additional facts through the discovery process and justice requires that the amendment be allowed.” First National Bank argues that Phil-Co could not have discovered any additional information from discovery that it did not have prior to the original complaint and that the amended complaint dramatically changed factual pleading and theories. One of its reasons was that the complaint had been filed four and one half years earlier. First National points to United Methodist Church v. D. A. Davidson (Mont. 1987), [228 Mont. 288,] 741 P.2d 794, 797, and McGuire v. Nelson (1973), 162 Mont. 37, 42, 508 P.2d 558, 560, for cases finding an abuse of discretion when the district court grants an amendment to pleading on the eve of trial.

First National contends that the original complaint alleged theories amounting to bad faith, breach of fiduciary duty, breach of the implied covenant of good faith and fair dealing, and fraud. It contends that the amended complaint changed the theories to equitable estoppel, fraud, and bad faith. Prior to settling instructions, the District Court on its own motion dismissed plaintiffs claims of equitable estoppel, fraud, bad faith, and punitive damages. The court permitted the case to go forward to the jury on theories of constructive fraud and negligent misrepresentation. First National now contends that the Court injected theories into the case which were not pleaded.

The general concept of the Montana Rules of Civil Procedure is to allow a party to obtain such relief as he or she may be entitled to under the testimony and proof. Thus Rule 8(a) allows the plaintiff to set forth a short and plain statement of his claim showing that he is entitled to relief, and a demand for the judgment to which he deems himself entitled. Relief in the alternative or several different types may be demanded. Rule 8(e) is specific that when two or more statements of a claim or defense are alleged, if any one of them made independently would be sufficient, the pleading is not made insufficient by the insufficiency of one or more of the alternative statements. Rule 15(a) states that amendments to pleadings may be given freely “when justice requires.” In actions involving multiple claims or involving multiple parties, Rule 54(b) permits the court to revise at any time before the entry of judgment a decision adjudicating all the claims and rights and liabilities of the parties. Especially notable is the last sentence of Rule 54(c) which provides that except in cases of judgment by default, “every final judgment shall grant the relief to which a party in whose favor it is rendered is entitled, even if the party has not demanded such relief in his pleadings.”

In this case, the action of the District Judge in limiting through instructions the theories of recovery to constructive fraud and negligent misrepresentation had the effect of removing much of the Bank’s claimed prejudice through the allowance of the amended complaint. The facts upon which the theories of constructive fraud, negligence and misrepresentation are based were quite well known to the plaintiff and at all times to the court during the litigation, so that First National is unable to demonstrate any prejudice that resulted from the permitted amendments.

We therefore hold against First National on this issue:

III.

Did the Statute of Frauds Require a Dismissal of the complaint in this case?

First National Bank contends that since Phil-Co alleged both in its complaint and amended complaint that the Bank had failed to honor the check which paid Shape’s debt to Phil-Co that pursuant to § 28-2-903, MCA, the cause should have been dismissed.

Section 28-2-903(l)(b), MCA, provides:

“The following agreements are invalid unless the same or some note or memorandum thereof is in writing and subscribed by the party to be charged or his agent:
“(b) A special promise to answer for a debt, default, or miscarriage of another ...”

First National then points to several instances in the testimony when one or another of the witnesses stated that the Bank had “agreed” that it would see to it that Ray Shape’s bill was paid. Additionally, Phil-Co did not respond to two requests for admission which would therefore be deemed admitted:

“Request No. 21: Admit that Phil-Co Feeds, Inc., never received a written agreement from the First National Bank in Havre agreeing to pay Ray Shape’s feed bill.
“Request No. 22: Admit that no representative of Phil-Co Feeds, Inc., ever requested Raymond Shape to secure an agreement with the First National Bank in Havre to pay his feed bill owed to Phil-Co Feeds, Inc.”

The Statute of Frauds applies to liabilities based on contract, and not to theories of liabilities based on fraud or negligent misrepresentation.

Under the evidence here, Lefdahl called Randy Smith and requested information regarding Ray Shape’s ability to pay any statement on his extremely large feed bill. Randy Smith, a banker, chose to divulge information regarding Ray Shape to Vic Lefdahl and did make certain affirmative statements indicating that Shape could pay and that it did not matter if Shape did not pay as Phil-Co had an automatic feed lien which would be paid first. Phil-Co relied on this information and extended credit to Ray Shape from November, 1981 to December 11, 1981 when Vic Lefdahl again called Randy Smith to confirm that the check to Phil-Co drawn by Ray Shape on First National Bank was good. At that time, he was advised the check would not be honored and Lefdahl took action to protect Phil-Co’s interests.

The requests for admission in this case are not pertinent because they relate to written agreements, and plaintiff’s case in tort is not based on a written agreement. Therefore the Statute of Frauds does not apply.

We uphold the District Court on this issue.

IV.

Was First National Bank Prejudiced by the District Court’s Refusal to Permit Certain Evidence and Testimony?

On the cross examination of Donald Cole, an attorney representing Phil-Co at the time Shape was doing business with him, and who is also representing one of its officers and directors, Lee Robinson, the Bank attempted to elicit testimony from Cole regarding his representation of Lee Robinson. When objection was sustained, the Bank made an offer of proof which would have shown that Cole had represented Lee Robinson with respect to a claim against Shape for the purchase by Shape from Robinson of a certain Versatile Tractor. Because of his trouble in collecting the debt from Shape, Bank wanted to establish that Lee Robinson knew prior to the time that Phil-Co became involved with Shape that Shape did not pay his debts as they became due. Bank contends that this would have shown that Robinson, as a director of Phil-Co, knew or should have known before Phil-Co began giving credit to Shape that he was a poor credit risk. The court denied the offer of proof upon the ground that any knowledge that Lee Robinson might have had as to the credit record of Shape could not be imputed to the corporation in this case. Plainly the District Court was correct.

Bank further raises the issue of the refusal by the District Court to admit the deposition of Sid Boe as evidence in the cause. Bank asserts that the testimony of Sid Boe would have demonstrated that Phil-Co had knowledge that the Bank was not providing operating credit or monies to pay for feed to Ray Shape. This information, however, would be irrelevant to the present action. Under the testimony here, Lefdahl called the Bank and was assured that even if Shape did not receive money from the Bank for feed that nevertheless Phil-Co had an “automatic feed lien,” and would be paid before the Bank. Evidence in the cause indicated that there was no such automatic feed lien. The District Court correctly refused this testimony.

The District Court also refused as irrelevant the admission of two security agreements offered by the Bank. The evidence indicated that the agreements were signed in January of 1982, but were back dated to December 8, 1981 and were security agreements which related to arrangements made through the owner of the cattle for payment for the feed after December 11,1981, when the Bank informed Phil-Co that it would not honor Shape’s last check for $40,000.

Unless the offered evidence naturally and logically tends to establish a fact in issue, it is not admissible. Britton v. Farmers Insurance Group (1986), 221 Mont. 67, 721 P.2d 303. The test of relevancy is whether an item of evidence will have any value, as determined by logic and experience in proving the proposition for which it is offered, McConnell-Cherewick v. Cherewick (1983), 205 Mont. 75, 666 P.2d 742. The evidence in this case, offered by the defendant and refused by the District Court, had no relation to the representations made by the bank’s officer, upon which Phil-Co relied. We find no error on these issues.

V.

Did the District Court Prejudice First National Bank by Requiring it to Produce Randy Smith for Examination at Trial?

In the course of the trial before the District Court, counsel for Phil-Co announced that the plaintiff would rest. Immediately thereafter, a colloquy between court and counsel for the Bank ensued as follows:

“MR. KNIERIM: We will rest.
“MR. THOMPSON: I know the jury has been like a jumping jack back and forth, but now we are going to put our case on, I wonder if I can have a ten minute break. I anticipated that they would have more witnesses than what they did, and I would like to have about a ten minute recess.
“THE COURT: I understand that Mr. Smith is present in the court.
“MR. THOMPSON: No, he is not.
“THE COURT: In the courthouse?
“MR. THOMPSON: No. He is not.
“THE COURT: He is here in Havre.
“MR. THOMPSON: I would be able to have Mr. Smith available for testimony in a few minutes.
“THE COURT: I think in the interest of judicial economy, you better have him in here subject to examination by the plaintiff as a possible witness.
“MR. THOMPSON: Your Honor, we will call him in our case.
“THE COURT: The court has ordered him called now, Mr. Thompson, and I want to get this case settled out so that there is some understanding by the jury of what is going on. And I want you — we will have a recess. You get a hold of Mr. Smith and get him up here so he can be examined by the plaintiff.
“MR. THOMPSON: Okay. Perhaps we can have a recess for ten or fifteen minutes.
“THE COURT: Fine. We. are in recess for 15 minutes.
“WHEREUPON, the court took its recess at 2:05 p.m.”

Randy Smith appeared in court at 2:20 p.m., and the trial resumed, with Randy Smith being examined by the plaintiff as an adverse witness as part of the plaintiff’s case in chief.

Counsel for the Bank now contend that the record does not show the “volcanic anger” of the District Judge at the time and his demeanor in the course of the discussion. Bank contends that the jury may have been prejudiced by the court in directing the production of Randy Smith for examination. Immediately before the colloquy above reported, there was a conference before the bench, off the record. Because the conference off the record is not reported, this Court can not indulge in speculation as to what the District Court learned at that time.

Insofar as the contention of the Bank is now raised, no objection was made by Bank’s counsel at the time of the action by the Judge nor was there any motion for mistrial. Therefore there was no preservation of any issue of judicial misconduct for appeal. Evangeline v. Billings Cycle Center (Mont. 1981), [_ Mont. _,] 626 P.2d 841. We do not find error on this point.

VI.

Conclusion

The foregoing are the issues raised by the appellant in this cause, and our disposition of the same. Because we find no error on the part of the District Court on the issues raised, we affirm the judgment.

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