author: JUSTICE TRIEWEILER

text:
    LARRY D. CHANEY, Petitioner and Appellant, v. U.S. FIDELITY & GUARANTY, Respondent and Insurer for OWENS-HURST LUMBER COMPANY, Employer, STATE COMPENSATION INSURANCE FUND, Intervenor.
    No. 95-239.
    Submitted on Briefs February 29, 1996.
    Decided May 30, 1996.
    53 St.Rep. 499.
    917 P.2d 912.
    276 Mont. 513.

      For Appellant: Randall O. Skorheim, Skorheim Law Office, Great Falls; Robert C. Melcher, Attorney at Law, Billings.
    For Respondent: Paul C. Meismer, Garlington, Lohn & Robinson, Missoula.
    For Intervenor: Charles G. Adams, Legal Counsel, State Compensation Insurance Fund, Helena.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

The petitioner, Larry D. Chaney, filed a petition in the Workers’ Compensation Court of the State of Montana in which he sought benefits for disability which he alleged was caused by an injury that occurred in the course and scope of his employment with Owens-Hurst Lumber Company in 1983. United States Fidelity & Guaranty, Owens-Hurst’s insurer, denied all liability. The State Compensation Insurance Fund, which had paid benefits to Chaney, intervened and sought indemnification from USF&G. After a trial, the Workers’ Compensation Court entered an order and judgment in which it denied Chaney’s and the Fund’s claims. Both Chaney and the Fund appeal the order and judgment. We reverse the order and judgment of the Workers’ Compensation Court.

We restate the issues on appeal as follows:

1. Did the Workers’ Compensation Court err when it concluded that Chaney was not entitled to benefits?

2. Did the Workers’ Compensation Court err when it concluded that the State Fund was not entitled to indemnification from USF&G?

3. Is Chaney entitled to attorney fees and costs?

FACTUAL BACKGROUND

Petitioner Larry Chaney suffers from carpal tunnel syndrome (CTS). He alleges that his CTS, which required surgery in 1992, was caused by a November 3,1983, injury he suffered while working on the green chain at Owens-Hurst Lumber Company which was insured at that time by United States Fidelity & Guaranty (USF&G). Chaney alleges thatwhile working on the green chain, he slipped on ice, fell from the green chain platform, and broke his fall with bis forearms and wrists. He alleges that his injury was caused by either that incident or the repetitive gripping and lifting activity involved in his work.

On November 11, 1983, Chaney filed a claim for workers’ compensation. The Employer’s First Report, which was signed by claimant, describes the accident as follows:

Arms and [bjands started to go to sleep and get num [sic] while working and after work. Stacking 2 x 6’s and Tye’s [sic].

Chaney did not specifically mention the fall in the First Report, but he did note the date of the fall and testified that he reported the fall to Owens’ office. Chaney also listed his “arm, wrist, hand and fingers” as the parts of the body affected. Chaney’s treatment immediately after the alleged injury in 1983 consisted of two visits to Dr. Forest F. Schroeder who diagnosed Chaney’s injury as “Myalgia and tendon/ligaments strains secondary to archaic working conditions and long shifts”. Chaney continued to work for Owens after his injury until Owens laid him off in late December 1983.

Scott Hall,, a claims supervisor with USF&G, testified that no payment was made by USF&G to Chaney. When asked whether USF&G ever accepted the claim, Hall replied, “I have no records at all. I see nothing to indicate that it was accepted.” When asked whether anything in his file indicated that the claim was denied, Hall replied, “No, I do not.”

In 1989 Chaney again consulted a physician and complained of paresthesia of his thigh, left hand, forearm, and right finger. That physician referred Chaney to Dr. John Stephens who performed nerve conduction tests on Chaney. Dr. Stephens interpreted those tests as suggestive of bilateral CTS.

On September 17, 1991, Chaney reported hand numbness to Dr. Michael Nolan who then referred Chaney to a surgeon, Dr. Stuart Reynolds, who referred Chaney to Dr. Patrick J. Cahill for nerve conduction studies. Dr. Cahill found that Chaney had mild CTS and Dr. Reynolds then returned Chaney to Dr. Nolan’s care. Chaney did not complain about CTS symptoms again until September 1992. In October 1992, he returned to Dr. Reynolds who again asked Dr. Cahill to perform nerve conduction studies. Dr. Cahill reported that the study showed evidence of moderately severe CTS and suggested surgery, which Dr. Reynolds performed in 1992.

Chaney quit his work as a mechanic for Olson Ford on November 17, 1992, to have the CTS surgery performed on his right wrist and has not worked since that time. In December 1992, he had the surgery performed on his left wrist. Since his surgery, the Fund, which insured Olson Ford, has paid Chaney temporary total and medical benefits while reserving rights and defenses against Chaney and USF&G.

On November 9,1993, Chaney petitioned the Workers’ Compensation Court for a determination that USF&G is liable for temporary total, permanent total, permanent partial, rehabilitation and medical benefits, as well as attorney fees, and a penalty. The Fund intervened and sought indemnification for compensation and medical benefits it has paid Chaney since 1993.

After a trial, the Workers’ Compensation Court concluded that Chaney was not entitled to benefits from USF&G because his 1983 injury did not proximately cause his permanent damage. The cornet based its conclusion on its findings that Chaney suffered no acute injury due to a fall and that, in fact, the fall did not occur; that he did not have consistent symptoms since 1983; that his accounts of his symptoms since 1983 were contradictory; and that “[d]uring those years he engaged in provocative activities at various times” and “[fit appears likely that claimant’s CTS developed over a period of several years.” The court also concluded that the Fund was not entitled to indemnification from USF&G for the benefits it paid to Chaney and that Chaney was not entitled to attorney fees, costs or a penalty.

ISSUE 1

Did the Workers’ Compensation Court err when it concluded that Chaney was not entitled to benefits?

We review the Workers’ Compensation Court’s conclusions of law to determine whether they are correct. CNA Ins. Cos. v. Dunn (1995), 273 Mont. 295, 298, 902 P.2d 1014, 1016; Stordalen v. Ricci’s Food Farm (1993), 261 Mont. 256, 258, 862 P.2d 393, 394.

In its order, the Workers’ Compensation Court found that “[Hacking any evidence that the claim was timely denied, the Court finds that the claim was accepted by USF&G.” The court then concluded that Chaney was not entitled to benefits from USF&G because his 1983 injury did not proximately cause permanent damage. Therefore, the court, without finding a subsequent intervening injury, concluded that USF&G’s failure to deny Chaney’s claim within thirty days did not preclude it from denying liability for Chaney’s present disability. This conclusion is inconsistent with both statutory and case law.

Section 39-71-606(1), MCA (1983), provides:

Every insurer ... shall, within 30 days of receipt of a claim for compensation, either accept or deny the claim, and if denied shall inform the claimant and the department in writing of such denial.

An insurance carrier’s failure to comply with § 39-71-606(1), MCA, and either accept or deny a claim within thirty days constitutes an acceptance of the claim as a matter of law. Haag v. Montana Schools Group Ins. Auth. (1995), 274 Mont. 109, 906 P.2d 693.

Here, in accordance with our decision in Haag, the Workers’ Compensation Court found that USF&G accepted liability because it failed to timely accept or deny the claim; however, the court then went on to find that no fall occurred and that “[m]ore probably he [Chaney] experienced a gradual onset of numbness in his hands, arms and shoulders due to the repetitive nature of his work on the green chain.” Finally, the court concluded that Chaney’s 1983 injury (which, based on the only medical evidence offered, was consistent with CTS) did not cause his current CTS condition and need for surgery and that he was not entitled to benefits from USF&G. Before reaching its ultimate conclusion, the court found neither an intervening accident nor a point of maximum healing. The court’s jump from USF&G’s acceptance of liability, which is not contested by USF&G on appeal, to the lack of causation and the ultimate denial of benefits to Chaney is contrary to our decisions in Haag and Walker v. United Parcel Serv. (1993), 262 Mont. 450, 865 P.2d 1113.

In Haag, where we held that the failure to accept or deny a claim pursuant to statute is deemed an acceptance of the claim, the employer contended that the claimant did not sustain an injury caused by an accident as the statute requires. Haag, 906 P.2d at 695. The insurer did not timely deny the claim, but instead denied the claim more than two months after receiving it. Haag, 906 P.2d at 696. The Workers’ Compensation Court concluded that the claimant was not injured in a work-related accident and, on that basis, denied him benefits. Haag, 906 P.2d at 694. We reversed the court and held that the insurer’s failure to accept or deny the claim as required by § 39-71-606(1), MCA, is deemed an acceptance of the claim. Haag, 906 P.2d at 697. Because of the automatic acceptance of a claim, causation issues were irrelevant.

Likewise in this case, to qualify for benefits Chaney initially needed to prove by a preponderance of the evidence that he sustained a compensable injury, § 39-71-119, MCA; Gerlach v. Champion Int’l (1992), 254 Mont. 137, 140, 836 P.2d 35, 37, and that a causal connection existed between his injury and his current condition. Brown v. Ament (1988), 231 Mont. 158, 162-63, 752 P.2d 171, 174. Chaney showed that his original injury was the same kind of injury to the same parts of his body for which he now seeks benefits and that USF&G failed to either accept or deny his claim within thirty days.Once a claimant shows a failure to timely accept or deny the claim, his initial burden of proof is satisfied. See generally Haag, 906 P.2d 693.

Because Chaney’s claim was accepted and his initial burden of proof satisfied, the burden of proof shifted to USF&G to show that other injuries caused the extent of his current condition. Walker v. United Parcel Serv. (1993), 262 Mont. 450, 456, 865 P.2d 1113, 1117. To avoid further liability, USF&G was required to show that Chaney had attained a condition of maximum healing and that Chaney sustained an injury after he reached maximum healing. See Caekaert v. State Comp. Mut. Ins. Fund (1994), 268 Mont. 105, 115, 885 P.2d 495, 500-01; Lapp v. W.R. Grace/Bomac Drilling (1992), 254 Mont. 237, 240, 836 P.2d 602, 604; EBI/Orion Group v. State Comp. Mut. Ins. Fund (1991), 249 Mont. 449, 452-53, 816 P.2d 1070, 1072; Belton v. Hartford Accident & Indem. Co. (1983), 202 Mont. 384, 392, 658 P.2d 405, 409-10. USF&G made no effort to meet its burden.

At trial, USF&G offered no evidence that claimant reached maximum healing following his 1983 injury or that he suffered any subsequent injury. USF&G presented no competent medical evidence to suggest another cause for Chaney’s CTS other than the incident in 1983. Moreover, the Workers’ Compensation Court specifically found that no date for maximum healing could be established and failed to find that any other injury caused Chaney’s CTS. The court did list under other injuries that claimant cut a tendon of his left hand, suffered a back injury, cut his foot, and suffered a strain of his arm and neck after 1983, but it did not find any causal connection between any post-1983 injury and Chaney’s current condition. Therefore, USF&G has not met its burden pursuant to Walker v. United Parcel Serv.

For these reasons, we conclude that USF&G accepted the claim when it failed to timely deny it, and after accepting the claim, it failed to meet its burden to prove maximum healing and an intervening event. Therefore, the Workers’ Compensation Court erred when it denied Chaney benefits from USF&G and concluded that his 1983 injury did not proximately cause his current condition.

ISSUE 2

Did the Workers’ Compensation Court err when it concluded that the State Fund was not entitled to indemnification from USF&G?

We have recognized a workers’ compensation insurer’s right to recover benefits that should have been paid by another carrier. For example, in EBI/Orion Group v. State Comp. Ins. Fund (1989), 240 Mont. 99, 104, 782 P.2d 1276, 1279, we stated that “[t]he right of indemnity is that where one is compelled to pay money which, in justice, another ought to pay, the former may receive from the latter the sum so paid.” We have also stated:

If it is later determined that the insurance company on risk at the time of the accident should not pay the benefits, this insurance company, of course, has a right to seek indemnity from the insurance company responsible for the benefits already paid out to the claimant.

Belton v. Hartford Accident & Indem. Co. (1983), 202 Mont. 384, 392, 658 P.2d 405, 409-10.

The Fund is a subsequent workers’ compensation insurer. It insured Olson Ford at the time Chaney filed his 1992 claim and has paid Chaney temporary total benefits as well as medical benefits pertaining to Chaney’s wrist and hand problems. As discussed above, we have held that to shift responsibility to a subsequent insurer, a prior insurer must show that the claimant suffered an injury during subsequent employment after he or she reached maximum healing from the initial injury. O’Brien v. Central Feeds (1990), 241 Mont. 267, 272, 786 P.2d 1169, 1172; Belton, 202 Mont. at 392, 658 P.2d at 409-10. USF&G failed to present evidence that Chaney suffered an injury during subsequent employment after he reached maximum healing from the 1983 injury. Therefore, we conclude that the Fund is entitled to indemnification from USF&G for all compensation and medical benefits paid to Chaney by the Fund.

ISSUE 3

Is Chaney entitled to attorney fees and costs?

Chaney contends that he is entitled to reasonable attorney fees and costs pursuant to § 39-71-611, MCA (1983), which provides:

In the event an insurer denies liability for a claim for compensation ... and the claim is later adjudged compensable by the workers’ compensation judge or on appeal, the insurer shall pay reasonable costs and attorneys’ fees as established by the workers’ compensation judge.

In this case, Owens’ insurer, USF&G, denied liability for benefits which have now been adjudged compensable. Therefore, we conclude that Chaney is entitled to attorney fees and costs and we remand to the Workers’ Compensation Court for a determination of reasonable attorney fees and costs.

For these reasons, we reverse the order and judgment of the Workers’ Compensation Court.

CHIEF JUSTICE TURNAGE, JUSTICES GRAY, NELSON and LEAPHART concur.


source: Caselaw Access Project

author: JUSTICE HUNT

license: Public Domain

text:
    CINDY MINTYALA, Claimant and Appellant, v. STATE COMPENSATION INSURANCE FUND, Defendant and Respondent, and CENTRAL MONTANA MEDICAL CENTER, Employer.
    No. 95-390.
    Submitted on Briefs March 14, 1996.
    Decided May 30, 1996.
    53 St.Rep. 503.
    917 P.2d 442.
    276 Mont. 521.

      For Appellant: Andrew J. Utick, Utick & Grosfield, Helena.
    For Respondent: Daniel J. Whyte, State Compensation Insurance Fund, Helena.
   JUSTICE HUNT

delivered the Opinion of the Court.

Cindy Mintyala petitioned the Workers’ Compensation Court for a hearing after the State Compensation Insurance Fund terminated her temporary total disability benefits. Prior to trial, the Fund filed a motion to dismiss, which the Workers’ Compensation Court granted. Mintyala appeals.

We reverse and remand.

Appellant raises the following issue: Did the Workers’ Compensation Court err in granting the State Fund’s motion to dismiss Mintyala’s petition for a hearing?

FACTS

In Mintyala’s petition for hearing, she alleges that in August 1991 she injured her back and neck in the course and scope of her employment as a certified nurses assistant while employed with the Central Montana Medical Center. At the time of injury, her employer was insured by the State Compensation Insurance Fund (the Fund). Initially, the Fund accepted liability and paid out temporary total disability and various medical benefits.

Three years later, the Fund notified Mintyala that it would be terminating her benefits as of September 21, 1994. Mintyala filed a petition for mediation pursuant to § 39-71-2401, MCA, but the matter was not resolved. Following surgery on her back, Mintyala submitted a petition for a hearing to the Workers’ Compensation Court in February 1995.

The petition alleges; (1) the Fund had unreasonably terminated Mintyala’s temporary total disability benefits based upon illegally obtained medical reports; (2) the Fund had unreasonably refused to reinstate Mintyala’s temporary total disability benefits, even though she had undergone surgery on her back January 31, 1995, and the Fund had accepted liability for the surgery; and (3) the Fund’s conduct had been unreasonable in that when the Fund terminated Mintyala’s benefits, it did not pay out permanent partial disability that the “illegally obtained medical reports indicated she was entitled to.” The petition then requested an award of temporary total disability benefits, (retroactive to the date of termination), a penalty and reasonable costs and attorney fees.

Following discovery, the Fund notified Mintyala that she would be placed back on temporary total disability benefits retroactive to the date such benefits were terminated. On April 12, 1995, the Fund made payment for the period between September 23, 1994 through April 17, 1995. The Fund then filed a motion to dismiss Mintyala’s petition because it had accepted liability.

The Workers’ Compensation Court held a hearing on the Fund’s motion to dismiss in June 1995. At that hearing, the Fund acknowledged liability for medical benefits and temporary total disability, and represented that it was current in the payment of benefits and that benefits would continue to be paid. At that point claimant’s counsel, Andrew Utick, stated his belief that attorney fees and penalty were still at issue.

The court disagreed and ruled that a recent decision from the Workers’ Compensation Court controlled, thus precluding attorney fees or a penalty. Paulsen v. Entech Inc. WCC. No. 9209-6591 (February 22, 1994). That decision was later appealed and affirmed by this Court but Paulsen had been decided pursuant to Section I, Paragraph 3(c), of the Montana Supreme Court 1988 Internal Operating rules, meaning the case is not available for future precedent. Paulsen v. Entech Inc. (1994), 269 Mont. 404, 888 P.2d 432.

After the hearing on the Fund’s motion to dismiss, the Workers’ Compensation Court issued a written order reflecting it’s decision. According to the written order, the court decided Mintyala’s entitlement to temporary total benefits and medicals was moot because of the representations of the Fund, leaving only Mintyala’s claims for attorney fees and a penalty. The court then decided “as a matter of law” Mintyala was not entitled to either attorney fees or a penalty based on the Fund’s acceptance of liability for benefits prior to trial or judgments.

Mintyala appeals the Workers’ Compensation Court’s order dismissing her petition.

STANDARD OF REVIEW

The procedural history of this case presents a threshold issue regarding the appropriate standard of review.

The Fund contends that its motion to dismiss was filed pursuant to the administrative rules that govern the Workers’ Compensation Court and therefore the correct standard of review is whether the court abused its discretion in deciding to dismiss the petition citing Doug John’s Real Estate v. Banta (1990), 246 Mont. 295, 298, 805 P.2d 1301, 1303.

The Fund contends that Rule 24.5.316, ARM, controls motions to dismiss. The portion of that rule that specifically mentions “motion to dismiss” reads as follows:

Unless a different time is specified in these rules, the time for filing-any motion to amend a pleading, to dismiss, to quash, for summary ruling, to compel, for a protective order, in limine, or for other relief shall be fixed by the court in a scheduling or other order.

Rule 24.5.316(1), ARM. Read in its entirety, the rule deals with motions in general. The rule does not mention a standard of review, discretionary or otherwise, to be used by the court in the disposition of motions to dismiss. Furthermore, the case cited by the Fund, Doug John’s Real Estate, deals with Rule 41(b), M.R.Civ.P. That case involves a cause of action that was involuntarily dismissed for failure to prosecute or comply with a court order. The issue presented in this case does not involve Rule 41(b), M.R.Civ.R, therefore the Doug John’s Real Estate case is not applicable.

The administrative rules do provide the Workers’ Compensation Court with the discretionary power to dismiss petitions. The relevant regulation reads as follows:

(1) In the discretion of the court, informal disposition may be made of a dispute or controversy by stipulation, agreed settlement, consent order, or default.

Rule 24.5.333, ARM. The question of informal disposition was raised in this matter but, counsel argued that under the circumstances of this case, informal deposition was not applicable:

MR. UTICK: My argument, I said I had an argument in the brief with respect to the rules. Under your rules it provides the methods by which you can make an informal disposition of the case and it doesn’t provide for unilateral concession barring the other party from proceeding ... For example, in the district court, in order to dismiss, you can dismiss the case unilaterally until a Response of Pleading is filed. ...
THE COURT:... The informal disposition as I see it is where there’s still something in controversy; but if—
MR. UTICK: Well, there is.
THE COURT: What?
MR. UTICK: Penalty and attorneys’ fees.
THE COURT: Okay, as a matter of law you’re not entitled to it under the Paulsen ruling, and I’m not going to reverse myself on Paulsen. That’s an appealable order.
MR. UTICK: Well, then you’ve ruled.
THE COURT: Right, I’m ruling on that. I’ll rule on that as a matter of law; and that can be appealable.

Pursuant to the language of the rule, an informal disposition of a motion would be reviewed under an abuse of discretion standard. In this case, however, the parties did not stipulate to the motion, nor was there an agreed settlement, consent order or default as required under the regulation. Therefore, the motion could not be dismissed informally.

The Workers’ Compensation Court order in this matter expressly concluded that a previous case controlled and that as a “matter of law” the court was dismissing the petition. Because this was not an informal disposition, we will not review this matter for an abuse of discretion. Rather, this Court will review the Workers’ Compensation Court’s conclusions of law to determine if the court’s determination of the law is correct. Glaude v. State Comp. Ins. Fund (1995), 271 Mont. 136, 137, 894 P.2d 940, 941.

DISCUSSION

In the Workers’ Compensation Court order dismissing Mintyala’s petition, the court found that based on the representation of the attorney for the Fund that the claimant’s claim for temporary total disability benefits was moot. Leaving only the remaining claims for attorney fees and a penalty, the corut then decided “as a matter of law,” the claimant was not entitled to either since the Fund had accepted liability for benefits prior to trial or judgment, again citing Paulsen v. Entech. However, because that decision was classified as non-citable, that case is not binding on this Court.

We must therefore look to other cases for guidance in deciding whether the Workers’ Compensation Court improperly granted the Fund’s motion to dismiss, thereby dismissing the additional issues of attorney fees and a penalty.

First we turn our attention to the issue of a penalty. It has long been held that the statutes in effect on the date of the claimant’s injury must be applied when determining benefits. Buckman v. Montana Deaconess Hosp. (1986), 224 Mont. 318, 321, 730 P.2d 380, 382. In this case, Mintyala was injured in August 1991, therefore the 1989 penalty applies. The applicable statute reads as follows:

Increase in award for unreasonable delay or refusal to pay. (1) When payment of compensation has been unreasonably delayed or refused by an insurer, either prior or subsequent to the issuance of an order by the workers’ compensation judge granting a claimant compensation benefits, the full amount of the compensation benefits due a claimant between the time of compensation benefits were delayed or refused and the date of the order granting a claimant compensation benefits maybe increased by the workers’ compensation judge by 20%. The question of unreasonable delay or refusal shall be determined by the workers’ compensation judge, and such a finding constitutes good cause to rescind, alter, or amend any order, decision or award previously made in the cause for the purpose of making the increase provided herein.

Section 39-71-2907, MCA (1989).

On appeal, Mintyala argues that the rule of law in Handlos v. Cyprus Industrial Minerals (1990), 243 Mont. 314, 794 P.2d 702 applies. In Handlos, the claimant appealed an order of the Workers’ Compensation Court declining the imposition of a penalty. The insurer initially denied liability for claimant’s 1987 injury, but then accepted liability five months later. Insurer attributed the delay to concerns that the claimant’s injury was not work-related. Atrial was held to dispose of the issue of payment of certain medical bills for treatment, as well as the issue of whether the delays in payment were unreasonable. The Workers’ Compensation Court concluded that because the insurer had accepted liability for treatment before any court order was issued, the court was barred from awarding a penalty.

On appeal, this Court disagreed. We held that the lower court’s interpretation of § 39-71-2907, MCA, rendered the statutory reference to “unreasonable delay” as mere surplusage. Handlos, 794 P.2d at 703. This Court then stated that such an interpretation would create a situation where an insurer was capable of avoiding a penalty if it accepted liability at any time prior to the issuance of an order by the court because “there would be no order for benefits making possible consideration of a penalty.” Consequently, the words “unreasonably delayed” would become meaningless in the statute.

This Court then looked to other provisions in the Workers’ Compensation Act regarding the purpose of the Workers’ Compensation Court system. The system was designed to enable claimants to “speedily obtain benefits” and to “minimize the reliance on lawyers.” Section 39-71-105(3), MCA(1989). The Courtthenheldthat“[i]nlight of that purpose and in order to give effect to all provisions of the statute, we conclude that the penalty is available where an insurer unreasonably delays payment until the claimant takes the case to trial.” Handlos, 794 P.2d at 703. In other words, the penalty provision is available to the claimant from the moment the insurer’s delay in payment becomes unreasonable.

The Fund also refers to the Handlos case. However, the Fund relies on this case as authority for the proposition that the Workers’ Compensation Court has limited authority to award a penalty. In Handlos, this Court stated that a penalty could be awarded when payment of benefits has been “unreasonably delayed until mid-trial.” Handlos, 794 P.2d at 704. The Fund argues that since it paid out benefits before “mid-trial,” the court could not award a penalty. This may be the language of the opinion, but to literally limit the Workers’ Compensation Court’s authority to award a penalty, would ignore the intent of the Handlos opinion. The wording “mid-trial” is to be used as a guide not as a prerequisite.

Moreover, subsequent to the Handlos decision, this Court has stated that “[p]ayment of unreasonably withheld benefits ‘on the courthouse steps’ does not negate the insurer’s potential liability for a penalty for unreasonable delay of benefits. To conclude otherwise would render the penalty statute moot.” Lovell v. State Comp. Mut. Ins. Fund (1993), 260 Mont. 279, 289, 860 P.2d 95, 102.

The Fund asserts that this Court has held that the Workers’ Compensation Court cannot award a penalty if the insurer concedes liability prior to trial, citing to Field v. Sears Roebuck (1993), 257 Mont. 81, 847 P.2d 306. In that case, the court did not award a penalty because no award of permanent total disability was ordered “that would serve as a basis for a penalty under Section 39-71-2907, MCA.” Field, 847 P.2d at 310. The Field case, however, is factually distinguishable. There, the court held a trial in which it was given the opportunity to decide if unreasonable delay occurred. In Field this Court concluded that “ [Unreasonable delay is a question of fact to be determined by the trier of fact; we will not reverse the Workers’ Compensation Court’s decision on awarding a penalty if the decision is supported by substantial credible evidence.” Field, 847 P.2d at 310.

Throughout the many revisions to the penalty statute, the language regarding “unreasonable delay” has remained basically the same. Regardless of what version of the statute this Court has interpreted we have concluded that the penalty statute should be made available “where an insurer acts unreasonably to deny benefits to which a claimant is legally entitled the statutory penalty should be imposed.” Plooster v. Pierce Packing Co. (1993), 256 Mont. 287, 291, 846 P.2d 976, 978 (citing Holton v. F.H. Stoltze Land & Lumber Co. (1981), 195 Mont. 263, 267-68, 637 P.2d 10,13). Furthermore, this Court consistently held that the determination of whether there was an unreasonable delay in payments of benefits by the insurer is a factual question. Handlos, 794 P.2d at 704; Lovell, 860 P.2d 95.

As a factual question, we conclude that the question of a penalty in this matter is not amenable to dismissal by conclusion of law, and remand the matter for a factual determination of reasonableness. On remand, the court should also reconsider whether an award of attorney fees and costs is warranted under § 39-71-611, MCA.

Remanded for further proceedings consistent with this opinion.

CHIEF JUSTICE TURNAGE, JUSTICES ERDMANN, TRIEWEILER and LEAPHART concur.


author: JUSTICE ERDMANN JUSTICE LEAPHART,

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. DOUGLAS LEROY NEW, Defendant and Appellant.
    No. 95-361.
    Submitted on Briefs May 2, 1996.
    Decided June 4, 1996.
    53 St.Rep. 510.
    917 P.2d 919.
    276 Mont. 529.

      For Appellant: Marcia M. Jacobson, Public Defender Office, Missoula.
    For Respondent: Hon. Joseph P. Mazurek, Attorney General, John Paulson, Assistant Attorney General, Helena; Robert L. Deschamps, III, Missoula County Attorney, Karen Townsend, Deputy County Attorney, Missoula.
   JUSTICE ERDMANN

delivered the Opinion of the Court.

Douglas Leroy New appeals from an opinion and order partially denying his motion to suppress evidence and from the judgment entered by the Fourth Judicial District Court, Missoula County, convicting him of the offenses charged. We affirm.

The issue on appeal is whether the District Court erred in denying New’s motion to suppress evidence obtained during a search of his vehicle by New’s probation officer.

FACTS

Shortly before midnight on May 24, 1994, Missoula County Sheriff’s Deputy Pat Turner was on patrol in Missoula and observed a pickup truck driving at a slow rate of speed. Turner saw the vehicle make two turns without signaling and called his dispatcher to run a check on the license plate number. The dispatcher informed Turner that the vehicle belonged to New and that New was on probation for possession of drugs with intent to sell and was subject to “search on demand.”

Turner continued to follow the vehicle as it turned into a convenience store. As he went to stop New for the traffic violation, Turner noticed another vehicle drive past him without its headlights on. As he went to stop the second vehicle, Turner saw New get out of his pickup and approach the public telephone outside the convenience store. After dealing with the second vehicle, Turner returned to speak with New who was still on the telephone.

Turner told New that he had observed him make two turns without signaling. Turner informed New that he knew he was on probation and was subject to search and then directed him to empty his pockets onto the hood of his pickup. Turner also performed a quick pat-down search of New and discovered a small metal tubular container inside his pants pocket. Inside the container were a number of small plastic bags containing a white powdery substance which New claimed was cocaine obtained from a friend’s house. Turner then placed New under arrest and continued to search New’s clothing. He found an aftershave box in New’s coat pocket which contained approximately twenty-nine long white pills which were later determined to be Lortab, a dangerous drug. New was taken to the county jail and his vehicle was impounded.

In the early morning hours of May 25,1994, Turner notified New’s probation officer, Tom Forsyth, of the arrest and Forsyth requested a report of the arrest and directed that New also be arrested for violating his probation. Later that same day, New was interviewed on tape by Missoula County Sheriff’s Detective Larry Jacobs. During that interview, Jacobs informed New that the white powdery substance had tested positive for methamphetamine. New indicated that he intended to sell some of the drugs to pay his distributor and to support his own habit. During the interview, New gave his consent to search his pickup and admitted to the officers that they would find drugs and drug paraphernalia in the vehicle.

Following the interview, J acobs discussed the matter with a deputy county attorney who advised Jacobs not to rely on New’s consent for the search of his vehicle but to contact Forsyth to determine if he had independent grounds to search the vehicle. Jacobs contacted Forsyth who determined that a probationary search of the vehicle was appropriate. Forsyth had previously received information that New was using drugs and alcohol, he knew that New was not in the court-ordered drug/alcohol treatment program and he was uncertain of New’s living arrangements — all of which led Forsyth to believe he had independent grounds to search New’s vehicle and that such a search might produce evidence indicating a probation violation. Forsyth and Jacobs subsequently searched New’s vehicle and discovered a pill bottle containing a number of baggies with a white powdery substance which later tested positive for methamphetamine. They also recovered drug paraphernalia from the pickup.

On June 6, 1994, New was charged by information with felony criminal possession of dangerous drugs (methamphetamine) with intent to sell pursuant to § 45-9-103, MCA (Count I), felony criminal possession of dangerous drugs (Lortab) pursuant to § 45-9-102, MCA (Count II), and misdemeanor criminal possession of drug paraphernalia in violation of § 45-10-103, MCA (Count III). New entered pleas of not guilty to the charges.

On September 2,1994, New filed a motion to suppress the evidence obtained during both the search of his person and the search of his vehicle. On November 30, 1994, the District Court issued an opinion and order granting New’s motion to suppress the evidence seized during the search of his person but denied the motion as to evidence seized during the search of his vehicle. The District Court held that probationary searches are within the discretion of the probation officer and found that in this case Forsyth did not abuse his discretion in scheduling the search of New’s vehicle.

On January 17,1995, the District Court allowed New to withdraw his pleas of not guilty and to enter a conditional plea of guilty to Counts I and III pursuant to § 46-12-204(3), MCA, reserving the right to appeal the suppression order as it related to the evidence seized during the search of his vehicle. As it was evident that New would appeal the suppression order relating to the vehicle search, the State then requested that the District Court allow it to enter testimony from Forsyth into the record concerning the specific reasons why he conducted the search of New’s vehicle. The District Court granted the State’s request and both parties were allowed to examine Forsyth. Following Forsyth’s testimony, the court determined that its earlier ruling on New’s motion to suppress would stand.

On May 5,1995, the District Court rendered its judgment sentencing New to fifteen years in the Montana State Prison on each of Counts I and II, and to a term of six months in the Missoula County Jail on Count III. The sentences were to run concurrently but the District Court suspended the entire sentence on certain terms and conditions. This appeal followed.

STANDARD OF REVIEW

The standard of review for a district court’s denial of a motion to suppress is whether the court’s findings of fact are clearly erroneous and whether those findings were correctly applied as a matter of law. State v. Williams (1995), 273 Mont. 459, 904 P.2d 1019, 1021 (citing State v. Flack (1993), 260 Mont. 181, 188, 860 P.2d 89, 94). In this case and at New’s request, the District Court ruled on the motion to suppress without conducting an evidentiary hearing or relying on a stipulation of facts from the parties. The court based its initial ruling on the briefs submitted by the parties and stated that the facts concerning the two searches were not in dispute. However, after the District Court received Forsyth’s testimony concerning the basis for the vehicle search the court made a factual determination that its earlier ruling would stand in light of the new evidence obtained from Forsyth. Thus, despite the fact that no formal findings of fact were made on the matter, we must nevertheless determine whether the District Court’s findings are clearly erroneous and whether they were correctly applied as a matter of law.

DISCUSSION

Did the District Court err in denying New’s motion to suppress evidence obtained during a search of his vehicle by New’s probation officer?

In denying New’s motion to suppress the evidence obtained during the search of his vehicle, the District Court concluded that a probation officer is not required to have a prearranged schedule for his or her searches. The court noted that such searches lie within the discretion of the probation officer and in this case the court was persuaded by the fact that Forsyth had authorized and conducted the search himself and that the information he had at the time constituted reasonable grounds under State v. Small (1989), 235 Mont. 309, 767 P.2d 316.

New relies on Wong Sun v. United States (1963), 371 U.S. 471, 83 S. Ct. 407, 9 L. Ed. 2d 441, to argue that since the District Court determined that the search of his person was illegal, the evidence obtained during Forsyth’s subsequent search of the vehicle was “fruit of the poisonous tree” and should have been suppressed as well. He claims that without the illegal search and seizure, he would not have been arrested, booked, or interrogated, nor would he have made incriminating statements or consented to the search of his vehicle. New notes that after the illegal search and seizure Jacobs contacted Forsyth to determine if he (Forsyth) had independent grounds for the vehicle search. However, according to New, such after-the-fact justification of the vehicle search does not cleanse the evidence of the taint created by the illegal search of his person.

The State counters New’s reliance on the “fruit of the poisonous tree” doctrine by arguing that certain conditions can purge such derivative evidence of its primary taint and allow the evidence to be used despite any initial illegality. The State maintains that Forsyth had information which he acquired prior to and independent of Turner’s search of New’s person and that the evidence obtained during the probationary search of New’s vehicle was therefore “unpoisoned” and purged of any taint created by the initial illegal search.

The State also argues that a degree of flexibility must be accorded a probation officer in the course of supervising a probationer. The State argues that a probation officer may search a probationer’s vehicle without a warrant as long as the officer has a reasonable suspicion of a probation violation. The State maintains that the operation of a probation system and its need for supervision of a probationer’s conditional liberty presents special needs beyond normal law enforcement that justify departure from the usual warrant and probable cause requirements.

We must initially address the propriety of the January 17,1995, change of plea hearing where the District Court granted the State’s request, over New’s objection, to illicit testimony from Forsyth concerning his reasons for authorizing the search of New’s vehicle. While New does not appeal the District Court’s decision to allow Forsyth’s testimony, he states in his reply brief that, “Mr. Forsyth’s testimony was not used by the lower court in making its suppression decision. Furthermore, the contents of that transcript do not change anything about this appeal.”

We agree that the District Court initially ruled on New’s motion to suppress prior to hearing Forsyth’s testimony. However, in deciding to allow the testimony the court stated Forsyth’s testimony might assist the court and the Supreme Court in resolving the matter. Following the testimony, the District Court determined that “its earlier ruling would stand.” We therefore conclude that the District Court did, in fact, use Forsyth’s testimony in reaching its final decision on the matter.

We further note that without the benefit of Forsyth’s testimony this Court would have been required to remand the case for a factual hearing to determine Forsyth’s reasons for conducting the search of New’s vehicle. We also note that in briefing the matter before the District Court, New did not contest the State’s assertion that Forsyth had a legitimate basis for the probationary search, stating only that the defense had no information to indicate Turner contacted Forsyth prior to the search. Thus, we conclude that the District Court properly allowed Forsyth’s testimony at the January 17,1995, hearing and we consider the transcript from that hearing to be part of the record on appeal.

Even though Forsyth claims he had independent reasons for searching New’s vehicle, he acknowledges the fact that the telephone call from Jacobs was an additional element supporting the search. We must therefore determine whether the evidence obtained during the search of the vehicle was the result of the illegal search of New’s person or if, instead, it was obtained by means sufficiently distinguishable from the illegal search to be purged of the primary taint.

In In re R.P.S. (1981), 191 Mont. 275, 623 P.2d 964, this Court examined the “fruit of the poisonous tree” doctrine first discussed by the U.S. Supreme Court in Silverthorne Lumber Co. v. United States (1920), 251 U.S. 385, 40 S. Ct. 182, 64 L. Ed. 319. The doctrine forbids the use of evidence which comes to light as a result of the exploitation of an initial illegal act of the police. In re R.P.S., 623 P.2d at 967 (citing Silverthorne, 251 U.S. at 392, 40 S.Ct. at 182-83). However, we also noted that the U.S. Supreme Court has made it clear that all evidence obtained as the result of an initial illegality does not become forever unavailable or inaccessible and that certain conditions can purge the evidence of its “primary taint.” In re R.P.S., 623 P.2d at 967. The U.S. Supreme Court stated in Wong Sun that:

We need not hold that all evidence is “fruit of the poisonous tree” simply because it would not have come to light but for the illegal actions of the police. Rather, the more apt question in such a case is “whether, granting establishment of the primary illegality, the evidence to which instant objection is made has been come at by exploitation of that illegality or instead by means sufficiently distinguishable to be purged of the primary taint.”

Wong Sun, 371 U.S. at 487-88, 83 S.Ct. at 417 (citation omitted).

We reviewed the exceptions to the “fruit of the poisonous tree” doctrine in State v. Pearson (1985), 217 Mont. 363, 704 P.2d 1056, and stated that derivative evidence is admissible if it is (1) attenuated from the constitutional violation so as to remove its primary taint; (2) obtained from an independent source; or (3) determined to be evidence which would have been inevitably discovered apart from the constitutional violation. Pearson, 704 P.2d at 1058-59. The U.S. Supreme Court has discussed the “independent source” exception more recently in Murray v. United States (1988), 487 U.S. 533, 108 S.Ct. 2529, 101 L.Ed.2d 472, and stated that:

“[T]he interest of society in deterring unlawful police conduct and the public interest in having juries receive all probative evidence of a crime are properly balanced by putting the police in the same, not a worse, position that they would have been in if no police error or misconduct had occurred.... When the challenged evidence has an independent source, exclusion of such evidence would put the police in a worse position than they would have been in absent any error or violation.”

Murray, 487 U.S. at 537, 108 S.Ct. at 2533 (quoting Nix v. Williams (1984), 467 U.S. 431, 443, 104 S.Ct. 2501, 2509, 81 L.Ed.2d 377).

Forsyth testified that New had failed to report to him for several months, was reported to be using drugs and alcohol, had failed to pay his fine or enroll himself into chemical dependency treatment, and had moved several times without approval or notification. All of these constitute violations of New’s parole conditions. Forsyth testified that he had intended to search New’s vehicle on May 24, 1994, but New did not have his pickup with him when Forsyth saw him. When Forsyth saw New’s vehicle on May 25, 1994, it appeared that New was living out of his pickup, thus giving Forsyth an additional reason to search the vehicle. Forsyth testified as follows:

Q. Can you tell the Court whether you were able to make a decision about the search independent of what was found by Deputy Turner?
A. Absolutely. Yes.
....
Q. You wouldn’t have searched his vehicle on May 25th unless you would have gotten a call from that officer; is that true?
A. A search of Mr. New was imminent regardless. I think that was just one more, ah, factor that — that factored into my decision. He hadn’t been reporting like I said.

When asked about his conversation with Jacobs, Forsyth stated: “I think he asked me if I had any plans to do a search. I indicated that I did...”

In Small we stated that “[t]he probation officer must be able to supervise the probationer, and upon his judgment and expertise, search the probationer’s residence or cause it to be searched.” Small, 767 P.2d at 318 (quoting State v. Burke and Roth (1988), 235 Mont. 165, 171, 766 P.2d 254, 257). The terms of New’s probation included the requirement that New would submit to the search of his person, vehicle, and/or residence upon the reasonable request of his probation officer. Forsyth had independent grounds for searching New’s vehicle, his request was reasonable based on the information he had at the time, and the timing of the search was within his discretion as New’s probation officer.

A criminal defendant who seeks to suppress evidence has the burden of proving that the search was illegal. State v. McCarthy (1993), 258 Mont. 51, 55, 852 P.2d 111, 113. We conclude that New failed to establish that Forsyth’s probationary search of his vehicle was not based on reasonable cause arising from information Forsyth had acquired from independent sources. The evidence obtained during the search of the vehicle was not the result of the exploitation of the illegal search but rather was based on information known to Forsyth which was independent of the fact that New had been arrested and illegally searched the previous day. We therefore hold that the District Court’s findings are not clearly erroneous and that those findings were correctly applied as a matter of law to deny New’s motion to suppress the evidence obtained from the search of his vehicle.

Finally, the State did not appeal the District Court’s order suppressing the evidence obtained during the search of New’s person which supported Count II. However, the District Court’s judgment states as follows:

IT IS THE JUDGMENT OF THE COURT that DOUGLAS LEROY NEW be and DOUGLAS LEROY NEW is hereby sentenced to a term of fifteen (15) years each on Count I and II in the Montana State Prison in Deer Lodge, Montana, and to a term of six (6) months on Count III in the Missoula County Jail in Missoula, Montana. Said sentences shall run concurrently with each other.

During the January 17, 1995, change-of-plea hearing the following exchange took place which conflicts with the court’s judgment:

THE COURT: Mr. Beccari, do you know of any facts [that] should be made known to [the] Court prior to the acceptance of a plea of guilty in this matter?
MR. BECCARI: No, sir, and I believe it’s a plea of guilty to Counts I and III; is that correct? I guess we should clarify that beforehand. It’s Count II that the Court has ordered suppressed.
THE COURT: That’s the State’s understanding?
MS. TOWNSEND: Yes.
THE COURT: Okay. So as to I and III of the Information filed June 6, 1994, you desire to change your plea—
NEW: Yes.
....
THE COURT: You stand convicted of the offenses of criminal possession of dangerous drugs with intent to sell, a felony, [Count I] and criminal possession of drug paraphernalia, a misdemeanor [Count III],

We therefore note the clerical error in the District Court’s judgment convicting New of Count II and sentencing him to fifteen years in the Montana State Prison for that offense. The evidence supporting the charge was suppressed and Count II should have therefore been dismissed. Thus, pursuant to this Court’s authority under § 46-20-703(1), MCA, we modify the District Court’s judgment and sentence removing the reference to.Count II, felony criminal possession of dangerous drugs (Lortab) pursuant to § 45-9-102, MCA.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES GRAY and NELSON concur.

JUSTICE LEAPHART,

dissenting.

I dissent from the majority’s holding that “[t]he evidence obtained during the search of the vehicle was not the result of the exploitation of the illegal search but rather was based on information known to Forsyth which was independent of the fact that New had been arrested and illegally searched the previous day.” The District Court and the majority recognize that the search of New’s person was illegal. Nonetheless, the majority holds that the subsequent search of New’s vehicle was obtained by means sufficiently distinguishable from the illegal search to be purged of the primary taint. I disagree that the vehicle search was not derived by exploitation of the illegal search. I also disagree that the vehicle search was arrived at by means sufficiently distinguishable to be purged of the primary taint. Wong Sun v. United States (1963), 371 U.S. 471, 487-88, 83 S.Ct. 407, 417, 9 L.Ed.2d 441, 455. Additionally, I disagree that the vehicle search was: (1) attenuated from the constitutional violation so as to remove its primary taint; (2) obtained from an independent source; or (3) determined to be evidence which would have been inevitably discovered apart from the constitutional violation. State v. Pearson (1985), 217 Mont. 363, 366, 704 P.2d 1056, 1058-59.

On May 25, 1995, the day after New’s arrest, upon the recommendation of a Deputy County Attorney, Detective Jacobs contacted New’s parole officer, Tom Forsyth. Subsequently, on the same day, Forsyth conducted a search of New’s pickup truck and found drugs and drug paraphernalia. The State argues that even if the initial search of New’s person were illegal, the drugs in New’s vehicle arose from an independent source based on the information Forsyth had prior to New’s arrest. However, Forsyth admitted that he would not have been in a position to search New’s truck if he had not received a call from the officers involved in its seizure. New’s vehicle was impounded and available to search because of the initial illegal search.

According to the State, a probationary search was imminent at the time of New’s arrest. However, Forsyth testified that he had seen New in his office the day before New’s arrest and that, at that time, Forsyth did not search New’s pickup. Forsyth testified that he could not recall clearly whether New had the truck with him that day or not. Clearly, a search of the truck had not been foremost on Forsyth’s mind if he could not recall if it were available for searching on May 24, 1995. Forsyth’s notes from the May 24 meeting make no indication that Forsyth intended to search New’s home or truck at any future time. It is very unlikely that Forsyth would have searched New’s vehicle the morning of May 25 had the police not illegally seized the truck and contacted Forsyth.

Additionally, the reasons that Forsyth offered in support of his alleged intent to search New’s truck, i.e., that New failed to report to him for several months (although he had seen New the day before, May 24), was reported to be using drugs and alcohol, failed to pay his fine or enroll himself into chemical dependency treatment, and had moved several times without approval or notification, do not lead to the conclusion that a search of New’s truck would have been inevitable or a priority. The fact that New was living out of his truck was not revealed until after New’s arrest and the truck’s seizure. His living in the truck was clearly an after-the-fact rationalization for searching the truck. The District Court’s conclusion that probation officers are not required to have prearranged schedules for searches of probationers’ persons or possessions does not adequately excuse the obvious causal relationship between the illegal search of New’s person, the notification of Forsyth, and Forsyth’s search of the truck.

The District Court noted that:

Here the Probation Officer also received information interviewed [sic] by Missoula County Sheriff’s Detective indicating the presence of small amounts of drugs and illegal drug paraphernalia in the Defendant’s vehicle which are prohibited under Defendant’s probation.

The information mentioned by the District Court was obtained by Detective Jacobs during his interview of New after the illegal search of New’s person. Thus, Forsyth relied on tainted custodial admissions in ascertaining that there was adequate “reasonable suspicion” to search New’s vehicle.

This Court examined the doctrine of the “fruit of the poisonous tree” as part of the exclusionary rule in Matter of R.P.S. (1981), 191 Mont. 275, 623 P.2d 964. First discussed by the United States Supreme Court in Silverthorne Lumber Co. v. United States (1920), 251 U.S. 385, 40 S.Ct. 182, 64 L.Ed. 319, the doctrine forbids the use of derivative evidence which comes to light as a result of the exploitation of an initial illegal act. The search of New and the seizure of New’s pickup truck were the initial illegal acts. The notification to Forsyth and his subsequent search of the truck were derivative in nature. That is, the search of the truck by Forsyth was an exploitation of the illegal search and seizure by Officer Turner.

This Court reviewed the exception to the “fruit of the poisonous tree” rule in Pearson, 704 P.2d at 1058-59. We noted that derivative evidence is admissible if it is: (1) attenuated from the constitutional violation so as to remove its primary taint; (2) obtained from an independent source; or (3) determined to be evidence which would have been inevitably discovered apart from the constitutional violation. Given the consumable and vendable nature of the drugs, it was far from inevitable that they would have remained in the truck to be discovered when, and if, the truck were to be searched at a later time.

The State’s reliance on both independent grounds and inevitable discovery seem too convenient as after-the-fact justifications for searching the truck. I would hold that Forsyth’s probationary search of New’s truck was an exploitation of the illegal search of New’s person and seizure of his truck, and was not based on information known to Forsyth independently of the fact that New had been arrested and illegally searched the previous night.

JUSTICES HUNT and TRIEWEILER join in the foregoing dissenting opinion.

      . Count II was no longer at issue since the District Court had suppressed the evidence supporting that charge in its November 30, 1994, opinion and order.

      . The District Court’s judgment erroneously referred to Count II and this error will be addressed later in the opinion.


author: JUSTICE LEAPHART

text:
    STEWART NEWMAN, SUSAN NEWMAN, DALE STELTER, MARY STELTER, DAVE KLATT and CORY KLATT and SUSAN BRANTSMA, Petitioners and Respondents, v. ARTHUR WITTMER, JR. and CARLENE GAIL WITTMER, Respondents and Appellants.
    No. 95-406.
    Submitted on Briefs April 25, 1996.
    Decided June 4, 1996.
    53 St.Rep. 516.
    277 Mont. 1.
    917 P.2d 926.

      For Appellants: Larry Jent; Williams, Jent & Dockins, Bozeman.
    For Respondents: Donald E. White, Attorney at Law, Bozeman.
    For Amicus: Brenda R. Cole; Swandal, Douglass, Frazier & Cole, Livingston (Montana Manufactured Housing & Recreational Vehicle Association).
   JUSTICE LEAPHART

delivered the Opinion of the Court.

Appellants, Arthur and Carlene Wittmer (Wittmers), appeal from the Gallatin County, Eighteenth Judicial District Court’s Findings of Fact and Conclusions of Law determining that the Wittmers’ mobile home violated subdivision covenants. In its Conclusions of Law, the District Court issued a mandatory injunction ordering the Wittmers to remove their home from their lot in the subdivision. The court also concluded that Stewart Newman, Susan Newman, Dave Stelter, Mary Stelter, Dave Klatt, Cory Klatt and Susan Brantsma (Respondents) were entitled to recover attorneys fees and costs. We affirm in part and reverse in part.

The two issues on appeal are:

1. Whether the Wittmers’ home is a mobile home and, thus, prohibited by the subdivision’s restrictive covenant for use as a permanent residence?
2. Did the District Court err in awarding attorneys fees to the Respondents?

BACKGROUND

The parties in this action are real property owners in the Bear Trap Ranch Subdivision No. 2 (subdivision), Gallatin County, Montana. In 1971, the owners of the subdivision adopted restrictive covenants “designed to provide a uniform plan for the development of the property covered.” The fourth restrictive covenant provides:

4. Trailers, Mobile Homes, Basement Homes and Temporary Structures. No structure of a temporary character, including but not limited to trailers, mobile homes, basements, tents, shacks, garages, bams or other out-bildings [sic] shall be used upon any lot or portion thereof at any time as a permanent residence, provided, however, this shall not exclude the temporary parking for short periods of time of self-powered trailers or small trailers towed by passenger cars. [Emphasis added.]

In 1991, the Wittmers bought a 26 feet by 60 feet Brookfield “manufactured home” from Ponderosa Homes in Belgrade, Montana. After obtaining the required “Mobile/Manufactured Home Movement Declaration,” the home was hauled to the Wittmers’ lot in the subdivision. See § 61-4-310, MCA. The home is designed to be hauled by truck in two sections. It has a permanent steel I-beam frame to attach wheels, axles, and a hitch with which to pull the home. Upon its arrival in the subdivision, the home was placed on a prepared foundation and the attached wheels and the hitch were removed. The home has a Certificate of Title issued by the Montana Department of Justice, Motor Vehicle Division, in which the home is described as a 1992 Brookfield trailer. The Motor Vehicle Division issued a title number and a vehicle identification number for the home as required under Montana law. See §§ 61-3-107 and 61-3-202, MCA.

The foundation prepared for the Wittmers’ home consists of three concrete pads running the length of the home. One pad is seven feet wide the others are two feet wide. The pads are fitted with cable tie downs to fasten the home to the foundation. The home was bolted to the foundation and styrofoam skirting was placed around its base to keep the wind from blowing between the floor and the foundation. The Gallatin County tax assessor testified that because the foundation is not permanent, the home was assessed as personal rather than real property.

Two days after the home was moved into place and had been roofed and carpeted, the Respondents sent the Wittmers a letter informing them that their home violated the subdivision’s restrictive covenants.

DISCUSSION

1. Whether the Wittmers’ home is a mobile home and, thus, prohibited by the subdivision’s restrictive covenant for use as a permanent residence?

In reviewing a district court’s conclusions of law, we determine whether the court’s conclusions are correct. Maloney v. Heer (1993), 257 Mont. 500, 504, 850 P.2d 957, 959 (citing Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603). The standard of review of a district court’s findings of fact is whether they are clearly erroneous. Daines v. Knight (1995), 269 Mont. 320, 324, 888 P.2d 904, 906. To determine if the court’s findings are clearly erroneous we first determine whether the findings are supported by substantial evidence. Daines, 888 P.2d at 906. If the findings are supported by substantial evidence, we determine whether the district court has misapprehended the evidence. Daines, 888 P.2d at 906. Finally, if both these prongs are satisfied, this Court may still determine that a finding is clearly erroneous if, after a review of the record, we have a definite and firm conviction that a mistake has been committed. Daines, 888 P.2d at 906.

The Wittmers argue that the District Court’s conclusion of law that their home is a mobile home prohibited by the covenants is incorrect for two reasons. First, they argue that the language of the covenant prohibits “structures of a temporary character” not permanent mobile homes. Second and alternatively, they argue that their home is not a mobile home.

The same rules of construction apply to interpreting restrictive covenants as apply to interpreting contracts. Gosnay v. Big Sky Owners Ass’n (1983), 205 Mont. 221, 227, 666 P.2d 1247, 1250. We read the covenants as a whole to ascertain their meaning. Gosnay, 666 P.2d at 1250. Where the language of the covenants is clear and explicit, that language will govern our interpretation of the covenants as a whole. Gosnay, 666 P.2d at 1250. The language of the covenant is to be understood in its ordinary and popular sense. Section 28-3-501, MCA; Hillcrest Homeowners Ass’n v. Wiley (1989), 239 Mont. 54, 56, 778 P.2d 421, 423. Additionally, restrictive covenants are to be strictly construed and ambiguities in a covenant are to be construed to allow free use of the property. Town & Country Estates Ass’n v. Slater (1987), 227 Mont. 489, 492, 740 P.2d 668, 670-71 (quoting State v. District Court (1980), 187 Mont. 126, 130, 609 P.2d 245, 248). However, the free use of the property must be balanced against the rights of the other purchasers in the subdivision. Town & Country, 740 P.2d at 671. Generally, restrictive covenants are valid if they tend to maintain or enhance the character of a residential subdivision and if they are used in connection with a general plan or scheme. Town & Country, 740 P.2d at 671.

Regarding the Wittmers’ first argument that the language of the covenant prohibits “structures of a temporary character,” not mobile homes, the relevant language of the subdivision covenant states:

4. Trailers, Mobile Homes, Basement Homes and Temporary Structures. No structure of a temporary character, including but not limited to trailers, mobile homes, basements, tents, shacks, garages, bams or other out-bildings [sic] shall be used upon any lot or portion thereof at any time as a permanent residence. ... [Emphasis added.]

The Wittmers argue that the terms following “including but not limited to” modify the term “structure of a temporary character.” According to the Wittmers, the fact that mobile homes, basements, garages, and bams are not temporary structures creates an inherent ambiguity in the covenant. Given the Wittmers’ interpretation, the only structures barred by this covenant are structures which are temporary such as trailers, tents and perhaps shacks. Notwithstanding the potential debate over whether a bam, garage or basement is a structure of “temporary character,” there is little doubt but that a mobile home can be considered to be a structure of a “temporary character” and that it is included within the proscription of the covenant.

The language of the covenant is clear. The covenant expressly prohibits use of a mobile home as a permanent residence. Whether the covenant wrongly characterizes garages, basements, bams, or even mobile homes as structures of temporary character is beside the point. The restrictive covenant has defined its own terms and has clearly included “mobile homes” as structures which shall not be used as permanent residences. We hold that the District Court correctly concluded that the subdivision covenants clearly and explicitly prohibit mobile homes as permanent residences.

The Wittmers’ second argument, that the District Court erroneously found that their home is a mobile home, is contradicted by Montana law. The covenant does not define the term mobile home, thus, we understand the term in its ordinary and popular sense. Hillcrest Homeowners Ass’n, 778 P.2d at 423. In its Findings of Fact, the District Court determined that the Wittmers’ “structure is a mobile home under Montana law.” The court specified the following characteristics and events that led to the court’s finding that the home was a mobile home: the Wittmers completed a “Mobile/Manufactured Home Movement Declaration” before moving their home; the home is described as a “Manufactured Home by Fleetwood;” the home was issued a Montana Motor Vehicle Certificate of Title number and a vehicle identification number; the home is listed as a “trailer” on the Certificate of Title; the home was brought to the lot in two separate units and then joined together; the home has its own steel frame undercarriage and uses axles and wheels for the purpose of transport; the home has metal joists; the home is taxed as personal property; the home is not set on a permanent foundation; and the home is designed to be moved from one place to another by “independent power connected thereto.”

Respondents allege that statutory definitions of mobile home are applicable to the term “mobile homes” as used by a restrictive covenant. We agree that statutory definitions provide guidance in interpreting the ordinary and popular meaning of undefined terms in a restrictive covenant. This Court has previously looked to statutory definitions of mobile homes to determine if a structure were prohibited by a restrictive covenant. DeLaurentis v. Vainio (1976), 169 Mont. 520, 523, 549 P.2d 461, 463. Other courts also apply statutory definitions in interpreting restrictive covenants. See Hill v. Commu nity of Damien Molokai (N.M. 1996), 911 P.2d 861, 867-68 (using the definition of family within the zoning ordinances as persuasive evidence for a proper interpretation of the undefined term in the restrictive covenant); Westwood Homeowners Ass’n, Inc. v. Lane County (Ore. 1993), 864 P.2d 350, 355 (applying the statutory definitions of liens and encumbrances to restrictive covenants); Adult Group Properties, Ltd. v. Imler (Ind. Ct. App. 1987), 505 N.E.2d 459, 465-67 (applying definitions from statutes, case law and Black’s Law Dictionary to interpret the term family in a restrictive covenant); LuMac Dev. Corp. v Buck Point Ltd. Partnership (Ohio Ct. App. 1988), 573 N.E.2d 681, 685-86 (looking to the statutory definitions of house trailer and manufactured home to determine the ordinary meaning of those terms in a restrictive covenant). Consequently, we look to the following statutory definitions for guidance in interpreting the ordinary meaning of mobile home in the restrictive covenant.

“Mobile home” is defined several times in the Montana Code Annotated. The Wittmers’ home fits under each of these definitions based on its dimensions, its transportability, and its designation as a trailer on its Certificate of Title. Under Title 15, Taxation, mobile home is defined twice. Initially at § 15-l-101(l)(k), MCA:

The term “mobile home” means forms of housing known as “trailers”, “housetrailers”, or “trailer coaches” exceeding 8 feet in width or 45 feet in length, designed to be moved from one place to another by an independent power connected to them, or any trailer, housetrailer, or trailer coach up to 8 feet in width or 45 feet in length used as a principal residence.

Chapter 24, Special Property Tax Applications, Part 2, Mobile Homes, Section 15-24-201(3), MCA, re-defines mobile home as follows:

“Mobile home” means forms of housing known as “trailers”, “housetrailers”, or “trailer coaches” exceeding 8 feet in width or 32 feet in length, designed to be moved from one place to another by an independent power connected thereto.

Additionally, Title 61, Motor Vehicles, under miscellaneous, § 61-1-501, MCA, provides the following definition:

“Mobile home” or “housetrailer” means a trailer or a semitrailer that is designed, constructed, and equipped as a dwelling place, living abode, or sleeping place (either permanently or temporarily) and is equipped for use as a conveyance on streets and highways

Respondents argue that § 15-24-201(3), MCA, clearly defines mobile home and that the Wittmers’ home is encompassed in this definition. The Wittmers counter that because the definition found at § 15-24-201(3), MCA, is from Chapter 24, Special Property Tax Applications, and because the definitions are prefaced with the phrase “[a]s used in this part,” that this definition of mobile home is confined to property tax purposes only. However, here, we are not applying one part of the code to a different part of the code. See § 1-2-107, MCA; Stratemeyer v. Lincoln County (1996), [276 Mont. 67], 915 P.2d 175, 181; State ex rel. Dep’t of Health v. LaSorte (1979), 182 Mont. 267, 273, 596 P.2d 477, 481. Rather, as we have stated, we look to all the statutory definitions of mobile home for guidance in interpreting the popular and ordinary meaning of mobile homes in the restrictive covenant.

Alternatively, the Wittmers argue that the definition found at § 15-24-201(3), MCA, cannot apply to their home because the definition states that a mobile home is “designed to be moved from one place to another by an independent power connected thereto.” They assert that because their home was designed to be moved only once, the definition does not describe their home. We cannot accept this statutory interpretation. The statute says nothing about how many times the home is to be moved, only that it is designed to be moved. The record shows that the Wittmers’ home was moved onto the site by being hauled down the highway as contemplated by § 15-24-201(3), MCA.

Additionally, our case law definition of mobile home encompasses the Wittmers’home. In Timmerman v. Gabriel (1970), 155 Mont. 294, 470 P.2d 528, the Gabriels appealed the district court’s mandatory injunction requiring them to remove their mobile home because the subdivision’s covenants prohibited the use of trailers as residences. Similar to the instant case, the covenant in question stated:

No structure of a temporary character, trailer, basement, tent, shack, garage, bam or other out building shall be used on any lot at any time, as a residence, either temporarily or permanently ....

Timmerman, 470 P.2d at 529. The issue was whether the Gabriels’ double wide mobile home was a trailer and thus prohibited as a residence by the covenant. The home was composed of two sections, ten feet wide by fifty feet long, which were designed to be bolted together. Each section had a steel frame with springs, axles, wheels, and a drawbar. The home was hauled to the lot and placed on a concrete block foundation. This Court held that the characteristics of the mobile home were very similar to the typical trailer house and the fact that some of the features used to transport the home were removable did not change the basic structure of the home. Timmerman, 470 P.2d at 530. Nor did the fact that the trailer was placed on a foundation and connected to, utilities transform it to a permanent residence within the meaning of the covenant. Timmerman, 470 P.2d at 530. We held that the restrictive covenant prohibited a type of structure and that the nature of the construction of the home rather than its subsequent mobility was determinative. Timmerman, 470 P.2d at 530.

A covenant prohibiting mobile homes as permanent residences was brought before this Court again in DeLaurentis, 549 P.2d 461. In DeLaurentis, the restrictive covenant in question prohibited trailers or mobile homes as permanent residences. The owners of the home argued that it was not a mobile home but rather a modular home and therefore not in violation of the covenant. The district court agreed. DeLaurentis, 549 P.2d at 462. Thus, the controlling issue on appeal was whether the home in question was a mobile or a modular home. The home was a Barrington double wide “mobile home” consisting of two sections 12 feet wide by 64 feet long. The home was certified by the State of Idaho Recreation and Mobile Home Department. This Court held that the home met the definition of mobile home under Montana statutory law and reversed the district court’s finding that the home was a modular home and not a mobile home. DeLaurentis, 549 P.2d at 464.

In the instant case, the District Court’s determination that the Wittmers’home is a mobile home comports with the statutory definitions of mobile home and conforms with our previous decisions interpreting restrictive covenants prohibiting mobile homes. Additionally, the home has a registered vehicle title on which it is described as a trailer, it has a vehicle identification number, and the Gallatin County Appraiser lists it as a mobile home. It has a permanent steel I-beam frame for attaching wheels, axles and a hitch. Given these characteristics along with the statutory and case law definitions, the District Court’s finding that the Wittmers’home is a mobile home surely conforms to the ordinary definition of mobile home as contemplated by the restrictive covenant. We hold that the District Court’s finding that the Wittmers’home is a mobile home is supported by substantial evidence, the court did not misapprehend the evidence, and no mistake has been committed.

2. Did the District Court err in awarding attorney’s fees to the Respondents?

In addition to granting a mandatory injunction, the District Court awarded the Respondents attorney’s fees and costs. The general rule for awarding attorney’s fees is that, absent statutory or contractual authorization, attorney’s fees will not be awarded. Greenwood v. Steve Nelson Trucking (1995), 270 Mont. 216, 221, 890 P.2d 765, 768. However, a successful applicant for a writ of mandate may recover reasonable attorney’s fees. See Kadillak v. Montana Dep’t of State Lands (1982), 198 Mont. 70, 643 P.2d 1178. Respondents argue that under the court’s equitable powers to grant a mandatory injunction the court has the power to grant attorney’s fees because the remedy of mandatory injunction is identical to the remedy of mandamus. Alternatively, they argue that, as a matter of equity, courts can award attorney's fees to make an injured party whole. Greenwood, 890 P.2d at 768; Goodover v. Lindey’s (1992), 255 Mont. 430, 446, 843 P.2d 765, 774-75.

This Court has distinguished a mandatory injunction from mandamus as follows:

Another material distinction between the two remedies is found in the relief which they are designed to afford. Injunction is a remedy to restrain the doing of injurious acts or, in its mandatory form, to require the undoing of injurious acts and restoration of the status quo, while mandamus commands the performance of a particular duty which rests upon the defendant, or respondent, because of his official status or by operation of law....

In re the “A” Family (1979), 184 Mont. 145, 153, 602 P.2d 157, 162 (quoting 42 Am.Jur.2d 750 Injunctions § 19). In A” Family, we held that because the district court order commanded the school district to perform a clear legal duty, the true nature of the order was that of mandamus and not that of a mandatory permanent injunction. 602 P.2d at 162.

The same cannot be said of the instant case because the requirements for a writ of mandate were not met. Pursuant to § 27-26-102, MCA, a two-part standard applies to the issuance of a writ of mandate. Franchi v. County of Jefferson (1995), 274 Mont. 272, 908 P.2d 210, 212; Becky v. Butte-Silver Bow Sch. Dist. 1 (1995), 274 Mont. 131, 906 P.2d 193, 212; State ex rel. Chisholm v. District Court (1986), 224 Mont. 441, 443, 731 P.2d 324, 325. First, the writ is available when the party requesting it is entitled to the performance of a clear legal duty by the party against whom the writ is sought. Becky, 906 P.2d at 195. Second, if there is a clear legal duty, the district court must grant the writ if there is no plain, speedy, and adequate remedy available in the ordinary course of law. Section 27-26-102(2), MCA; Franchi, 908 P.2d at 212. In Chisholm, we clarified the inquiry as follows: “A negative answer to the first question bars the issuance of the writ, and, irrespective of the answer to that question, an affirmative answer to the second, divests the court of authority to issue it.” Chisholm, 731 P.2d at 325.

The cases Respondents cite in support of the proposition that a mandatory injunction can fill the role of a writ of mandamus, involve the duties of governmental agencies. See Bissey v. City of Marion (Kan. 1919), 178 P. 611; State v. Board of County Comm’rs (Okla. 1940), 107 P.2d 542. These decisions are further support for the proposition that mandamus is the appropriate vehicle to compel “the performance of a particular duly which rests upon the defendant, or respondent, because of his official status or by operation of law.” “A” Family, 602 P.2d at 162.

Here, the restrictive covenant did not impose a legal duty upon the Wittmers because of their “official status;” they had none. Nor did it impose a duty by operation of law. Thus, the claim fails the first prong of the two part test and the resulting judgment cannot be considered a writ of mandamus. We decline to equate a mandatory injunction with a writ of mandamus for purposes of awarding attorney’s fees.

Additionally, we reject the invitation to award attorney’s fees on the basis of equitable principles. We have applied the equitable exception to the general rule only in those unique situations in which a party is forced into a frivolous lawsuit and must incur attorneys fees to dismiss the claim. In such cases, “equity requires an award of attorney fees to ‘make the party whole.’ ” Goodover, 843 P.2d at 775. We have affirmed the grant of attorneys fees to defendants in cases where there were no reasons or justifications for the suit, and where a party had to defend against a frivolous action through no fault of her own. See Stickney v. State (1981), 195 Mont. 415, 636 P.2d 860; Holmstrom Land Co. v. Hunter (1979), 182 Mont. 43, 595 P.2d 360; Foy v. Anderson (1978), 176 Mont. 507, 580 P.2d 114. We have also held that where a plaintiff, or as in the instant case a petitioner, chooses to institute a suit against others, an award of attorneys fees to the plaintiff will normally be precluded. Goodover, 843 P.2d at 776. Here, Respondents were not forced to defend a wholly frivolous litigation, rather they initiated this suit. Respondents’ suit was both reasonable and justifiable, it does not present one of the rare cases in which a district court could use its equitable powers to award such fees. We hold that the District Court erred in awarding attorneys fees to the Respondents.

Affirmed in part and reversed in part.

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

      . The terms mobile home and manufactured home are used interchangeably by the State and by the manufacturers.


author: CHIEF JUSTICE TURNAGE

text:
    IN RE THE MARRIAGE OF DEBRA S. O’NEIL, Petitioner and Respondent, v. THOMAS E. O’NEIL, Respondent and Appellant.
    No. 95-566.
    Submitted on Briefs April 25, 1996.
    Decided June 4, 1996.
    53 St.Rep. 522.
    277 Mont. 13.
    917 P.2d 916.

      For Appellant: Richard R. Buley, Tipp & Buley, Missoula.
    For Respondent: Paulette Ferguson, Missoula.
   CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Thomas E. O’Neil appeals from this dissolution of marriage entered in the Fourth Judicial District Court, Missoula County. We vacate in part and remand.

The dispositive issue is whether the court erred in its valuation of the marital estate.

In 1986, just prior to his marriage to Debra S. O’Neil, Thomas E. O’Neil sold homes he owned in Seattle, Washington, and Twin Falls, Idaho, and land he owned in Lake Tahoe, Nevada. With $110,000 in proceeds from those sales and some cashed-in retirement benefits, he purchased the Lumberjack Saloon in Missoula County, Montana. Debra S. O’Neil then quit her job with a telephone company in Idaho and moved to Montana to join Thomas. The couple married in August 1986.

Both Debra and Thomas worked at the Lumbeijack Saloon for several years and contributed money to that enterprise. They also purchased real property and a mobile home near Lolo, Montana. In September 1992, they sold the saloon on a contract. However, the buyers defaulted and Thomas and Debra retook possession of the saloon.

After the parties separated in 1994, Thomas resold the saloon, again on a contract. He used the cash proceeds of the second sale to open a tile business in Twin Falls, Idaho. Payments on the second Lumbeijack Saloon contract were made to Thomas.

When their marriage ended in 1995, Debra was forty-one years old and Thomas was fifty-three. No children had been bom to them. Debra was employed by Missoula County, earning $7.49 per hour. The parties had $45,000 in equity in their Lolo mobile home and real property. Debra was renting the mobile home to others and using the rent payments to make the monthly payments on the property.

The District Court awarded Debra the mobile home, land, and debt thereon; her $1,657 retirement account; two vehicles valued at $1,975 and $5,200; a $400 raft; and a 40 percent interest in the remaining proceeds of the second sale of the Lumbeijack Saloon. The court awarded Thomas his interest in the tile company; a truck valued at $10,318; the $100,000 in proceeds received from the first sale of the Lumberjack Saloon; the $37,500 down payment on the second sale of the Lumberjack Saloon; payments made on the second sale through May 1995; and 60 percent of the remaining proceeds of the second sale of the Lumberjack Saloon. The court found that, after the property distribution, Debra would have sufficient monies to support herself, so that maintenance was not appropriate.

Did the District Court err in its valuation of the marital estate?

The District Court found that, at the time of the dissolution, the principal balance due on the second contract for sale of the Lumberjack Saloon was $257,738.62. The court then calculated the value of the remainder due on the second contract as $538,620, arriving at its valuation by multiplying the number of future payments, 192, by the monthly payment amount of $2,610.

Thomas argues that this was not a proper method of valuing the contract for two reasons: (1) the monthly payment amount used by the court includes a $25 monthly bank escrow fee, which is not marital property, and (2) the valuation includes the total amount of interest to be paid over the term of the contract, and does not reflect present value. Debra responds that Thomas cannot now complain about the court’s valuation of the contract because he did not offer the court any evidence to establish a different value for the contract.

Debra maintains that the District Court used the same method of valuing the contract as the method approved by this Court in In re Marriage of Porter (1991), 247 Mont. 395, 807 P.2d 192. It is true that in Porter, the court did not discount to present value the value of a contract for deed. However, in Porter, the court valued the contract at the balance due thereon, not at the balance due plus interest and bank escrow fees, as was done in the present case. Porter, 807 P2d at 194.

Thomas also points out that the court awarded him the down payments from the first and second sales of the saloon, but that the record establishes that these monies were used to acquire other marital assets, such as the Lolo mobile home and land which were awarded to Debra and the tile business which was awarded to Thomas. The result is that the court included these assets twice in its valuation of the marital estate.

The District Court found that the net value of the marital estate was $544,350. It valued the property awarded to Debra at $240,090.-35, and the property awarded to Thomas at $468,098.84. The total of those two awards, which should match the net value of the marital estate, is $708,189.19.

Valuing assets and fixing the net worth of the marital estate are two important determinations which must be made by the district court in the process of apportioning marital property under § 40-4-202, MCA. This is the basis upon which the court makes an equitable apportionment of the marital estate. Without these determinations, the equitable distribution of marital assets amounts to only guesswork. Cook v. Cook (1980), 188 Mont. 472, 479, 614 P.2d 511, 515.

While the District Court’s disposition of future proceeds from the contract for sale of the Lumberjack Saloon (60 percent to Thomas and 40 percent to Debra) may be equitable, its valuation of the balance due on the contract is not supported in the record. Further, double inclusion of other assets is not supported in the record. Correction of those errors will result in adjustments to the values of the portions of the marital estate awarded to the parties, the total of which, as Debra concedes, should match the net value of the marital estate. We therefore vacate the portions of the dissolution decree relating to property valuation and distribution and remand for reconsideration of these matters.

Thomas also argues that the court erred in failing to credit him with his substantial contribution of premarital assets to the marital estate. Because resolution of the dispositive issue above will require recalculating the net worth of the marital estate, we conclude that the question of whether the court erred in its distribution of marital property cannot further be addressed at this time.

The property valuations and distribution in the decree of dissolution are vacated. We remand this case to the District Court for further proceedings in accordance with this Opinion.

JUSTICES HUNT, TRIEWEILER, LEAPHART and ERDMANN concur.


text:
    LARRY R. LACOCK, Plaintiff and Appellant, v. 4B’s RESTAURANTS, INC., a Montana Corporation, Defendant and Respondent.
    No. 95-431.
    Submitted on Briefs February 8, 1996.
    Decided May 29, 1996.
    53 St.Rep. 492.
    277 Mont. 17.
    919 P.2d 373.

      For Appellant: Harold H. Harrison, Attorney at Law, Helena; Gene A. Picotte, Attorney at Law, Helena.
    For Respondent: Larry E. Riley, Susan P. Roy; Garlington, Lohn & Robinson, Missoula.
   JUSTICE LEAPHART

delivered the Opinion of the Court.

Appellant, Larry R. Lacock (Lacock) appeals from the jury verdict of the Fourth Judicial District Corut, Missoula County, concluding that negligence on the part of defendant, 4B’s Restaurant (4B’s), was not the proximate cause of Lacock’s damages. We reverse.

The dispositive issue on appeal is whether the District Court abused its discretion in giving the jury an instruction on proximate cause which omitted the last sentence of Montana Pattern Instruction No. 2.06.

BACKGROUND

In the early morning of February 27,1990, Lacock patronized the 4B’s restaurant on East Broadway in Missoula, Montana. The only other patron, Clifford Harper, shot and killed the janitor of the 4B’s and shot and wounded Lacock. Lacock brought a claim against 4B’s alleging that 4B’s negligence was responsible for his injuries. Lacock claimed that 4B’s should have foreseen and prevented the shooting. After a six-day trial, the jury returned a verdict in favor of 4B’s. The District Court denied Lacock’s motion for a new trial. Lacock appeals from this determination.

DISCUSSION

On appeal Lacock raises twenty issues, however, we will address only the following dispositive issue:

Did the District Court abused its discretion in giving a jury instruction on proximate cause which omitted the last sentence of Montana Pattern Instruction No. 2.06?

Lacock offered the following instruction based on Montana Pattern Instruction (MPI) No. 2.06 on negligence and proximate cause:

The Defendant is liable if its negligence was a cause of fact and a proximate cause of plaintiff’s injury. The Defendant’s conduct is a proximate cause of the Plaintiff’s injury if it appears from the facts and circumstances surrounding the incident that an ordinarily prudent person could have foreseen that injury to someone situated as Plaintiff was would [sic] be a natural and probable consequence of the conduct. However, the specific injury [that] actually occurred need not have been foreseen. [Emphasis added.]

4B’s objected to this instruction on two grounds. First, 4B’s argued that the last sentence was misleading. Second, 4B’s asserted that the instruction 4B’s offered on proximate cause, which excluded the final sentence, was a correct and complete statement of the law taken directly from Kitchen Krafters, Inc. v. Eastside Bank of Montana (1990), 242 Mont. 155, 169, 789 P.2d 567, 575. The court agreed and gave the following Instruction No. 14, as proposed by 4B’s:

Causation, for purposes of legal liability, consists of two elements— cause in fact and proximate cause. Defendant’s conduct is a cause in fact if it helped produce the damage to Plaintiff and if the damage would not have occurred without it. In addition, for Defendant’s conduct to be the proximate cause of Plaintiff’s injury, it must appear from the facts and circumstances surrounding Defendant’s act that it, as an ordinarily prudent person, could have foreseen that the injury would be the natural and probable consequence of the wrongful act. Both elements of causation must be established by Plaintiff by a preponderance of the evidence.

Thus, the last sentence in MPI No. 2.06 which states: “However, the specific injury that actually occurred need not have been foreseen,” was not given to the jury. Lacock argues that this sentence is essential to a correct statement of the law and without it the jury was instructed that, in order to prevail on liability, Lacock had to prove that 4B’s could foresee the specific injury that actually occurred. 4B’s asserts that Instruction No. 15 cured any error in Instruction No. 14. Instruction No. 15, as given to the jury, states:

Proximate cause is analyzed in terms of foreseeability. The Defendant is not liable for the independent intervening act of another if such act was not reasonably foreseeable. In order to impose liability on the 4B’s, you must determine that the 4B’s reasonably should have foreseen the sequence of events leading to the Plaintiff’s injuries. [Emphasis added.]

Clearly, Instruction No. 15 does not cure the court’s failure to instruct that “the specific injury that actually occurred need not have been foreseen.” MPI 2.06. To the contrary, it compounds the problem by instructing the jury that the sequence of events leading to Lacock’s specific injury should have been foreseen.

Our standard of review for discretionary trial court rulings is whether the district court abused its discretion. Ganz v. U.S. Cycling Federation (1995), 273 Mont. 360, 367, 903 P.2d 212, 216; Barthule v. Karman (1994), 268 Mont. 477, 487, 886 P.2d 971, 977. We have held that a district court has discretion regarding the instructions it gives or refuses to give a jury and that we will not reverse a district court on the basis of its instructions absent an abuse of discretion. Cechovic v. Hardin & Assocs. (1995), 273 Mont. 104, 116, 902 P.2d 520, 527. When we examine whether jury instructions were properly given or refused, we consider the instructions in their entirety, as well as in connection with the other instructions given and the evidence at trial. Story v. City of Bozeman (1993), 259 Mont. 207, 222, 856 P.2d 202, 211. It is not reversible error for a district cotut to refuse an offered instruction unless the refusal affects the substantial rights of the party who proposed the instruction. Ganz, 903 P.2d at 216; Barthule, 886 P.2d at 977.

In the instant case, we determine that the District Court’s elimination of the final sentence from MPI 2.06 did affect Lacock’s substantial rights. Considering Instruction No. 14 in conjunction with Instruction No. 15, the District Court essentially instructed the jury that in order to find liability it had to find that 4B’s foresaw the particular injury to Lacock. In other words, to prove 4B’s liability, Lacock would have to prove that 4B’s failed to act, despite the fact that it could foresee specific injury to Lacock as a result of its inaction. Such proof would be tantamount to proving intentional rather than negligent conduct. That is, that 4B’s failed to act knowing full well that its inaction would injure Lacock in a particular manner. Montana law does not support such a narrow instruction on foreseeability.

While 4B’s characterization of the holding of Kitchen Krafters is not incorrect, it is an incomplete characterization of Montana law on proximate cause. In Kitchen Krafters we determined that a proper instruction on proximate cause should be worded as follows:

In order for the defendant’s negligence (failure to disclose) to be the proximate cause of the plaintiff’s injury, it must appear from the facts and circumstances surrounding the accident [the nondisclosure] that the defendant as an ordinarily prudent person, could have foreseen that the plaintiff’s injury would be the natural and probable consequence of the wrongful act. [Emphasis added.]

Kitchen Krafters, 789 P.2d at 575.

However, Kitchen Krafters must be read in conjunction with § 27-1-317, MCA, which provides that:

For the breach of an obligation not arising from contract, the measure of damages, except where otherwise expressly provided by this code, is the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not. [Emphasis added.]

The last sentence in MPI 2.06 reflects the statutory proposition that the specific injury to a plaintiff need not have been anticipated or foreseen. In the interest of coordinating Kitchen Krafters and § 27-1-317, MCA, the Commission on Civil Jury Instructions added the last sentence in MPI 2.06, “[h]owever, the specific injury that actually occurred need not have been foreseen.” This sentence is crucial in incorporating the meaning and intent of § 27-1-317, MCA. Without the last sentence of MPI 2.06 the jury will, as here, mistakenly be led to believe that the defendant, in order to be held liable, must foresee the specific injury to the plaintiff.

Recently, in Busta v. Columbus Hosp. Corp. (1996), [276 Mont. 342], 916 P.2d 122 we clarified the law in Montana regarding the role of foreseeability in the law of negligence. The instant case must be retried pursuant to our holding in Busta. See Galarneau v. Porter (1996), [275 Mont. 174], 911 P.2d 1143, 1149-50 (concerning the retroactivity of judicial decisions). In Busta, we held that foreseeability should be addressed as an element of duty and not as an element of causation. Busta does, however, carve an exception for addressing foreseeability in cases in which an intervening cause is alleged. In intervening cause cases, it will be necessary for the court to discuss foreseeability in the course of explaining to the jury which intervening causes sever the chain of causation and which do not. In doing so, it will be necessary to instruct the jury consistently with the provisions of § 27-1-317, MCA, that is, that the specific injury to a plaintiff need not have been foreseen.

Here, the instruction offered by Lacock, and specifically the last sentence of MPI 2.06, was objected to by 4B’s and withdrawn by the court. An instruction that was neither a Montana Pattern Instruction nor the exact wording from Kitchen Krafters was given. The deletion of the last sentence of MPI 2.06 was not cured by the content of other instructions, rather, its absence was exacerbated by the wording of Instruction No. 15. We hold that giving a intervening cause instruction without advising the jury that “the specific injury that actually occurred need not have been foreseen” amounted to an incomplete and misleading instruction on the law. The failure to instruct that a defendant can be liable for damages whether the specific injury to the plaintiff could have been anticipated or not, affected Lacock’s substantial rights, particularly since the jury found that 4B’s was negligent, that 4B’s negligence was the cause in fact of Lacock’s damages, but that 4B’s negligence was not the proximate cause of Lacock’s damages. Consequently, the District Court abused its discretion in failing to instruct the jury that the specific injury that actually occurred need not have been foreseen.

Reversed and remanded for proceedings consistent with this opinion.

JUSTICES GRAY, ERDMANN, HUNT and TRIEWEILER concur.