author: MR. JUSTICE GULBRANDSON

text:
    STATE OF MONTANA, Plaintiff and Appellant, v. JOHN PATRICK HEMBD, Defendant and Respondent.
    No. 88-353.
    Submitted on Briefs Dec. 2, 1988.
    Decided Jan. 12, 1989.
    767 P.2d 864.

      Marc Racicot, Atty. Gen., Clay R. Smith, Asst. Atty. Gen., Mike McGrath, Co. Atty., Helena, for plaintiff and appellant.
    Lawrence A. Murphy, Harrison, Yeshe & Murphy, Helena, for defendant and respondent.
   MR. JUSTICE GULBRANDSON

delivered the Opinion of the Court.

The State of Montana appeals the order of the District Court, First Judicial District, Lewis and Clark County, Montana, filed on May 23, 1988, granting defendant’s motion to suppress evidence seized from the trunk of his vehicle pursuant to a search warrant. We reverse the order of the District Court.

John Patrick Hembd was arrested in the early morning hours of March 16, 1988, following a phone call to the police department reporting that two persons were being held by a third person and were being forced to drive around in his car. The report stated that the vehicle was en route to a location in downtown Helena. Upon arriving at that location, officers observed the vehicle described in the report. The officers stopped the vehicle and the two occupants were taken into custody. At that time the defendant walked up to the vehicle and, after claiming it was his vehicle, was placed under arrest. Following the arrest, the Helena City Police Department immediately impounded Hembd’s vehicle. He was subsequently charged by complaint with the felony offense of intimidation.

Later in the morning of March 16, 1988, Police Captain Jeff Bryson interviewed the two alleged victims. He observed the police reports filed by the arresting officers and presented the facts to the Lewis and Clark County Attorney’s Office. The County Attorney’s Office prepared an application for a search warrant, a search warrant, and a complaint charging Hembd with felony intimidation. The application cover sheet stated that the offense of intimidation had been committed, that Officer Bryson had good reason to believe that evidence and/or fruits of a crime, more particularly described as two semi-automatic handguns, were present in the defendant’s vehicle. The application further stated one of the handguns was located in the interior of the vehicle and the second weapon was located in the trunk of the automobile. The application stated the premises to be searched was a 1978 Buick Electra, silver in color, bearing Montana license plate number 3-202808, registered to John Patrick Hembd, and was located at the Al Rose impound lot at Chestnut and National Streets. Facts establishing grounds for probable cause for issuing the search warrant were attached in an affidavit and stated as follows:

“On or about the 15th and 16th days of March, 1988, two gentlemen, Jeff Hafer and John Ellingson, had a flat tire on their vehicle in the Helena Valley in the area of North Montana Avenue and Cedar Street. These two individuals were able to obtain a ride into town from a John Patrick Hembd to get a new tire. Mr. Hembd was driving a 1978 Buick Electra, silver in color, bearing Montana license No. 3-207808. During the course of the evening the trio decided to stop in a series of bars. Mr. Hembd was particularly interested in looking for a female by the name Dee Rowe. Mr. Hembd advised Hafer and Ellingson that if he saw Ms. Rowe he was going to kill her, and showed them a small semi-automatic handgun. During the course of the evening Mr. Hembd pointed the gun at both Mr. Hafer and Mr. Ellingson, and maintained a dangerous and threatening demeanor throughout. Both Hafer and Ellingson felt they had little choice in following Hembd’s orders.

“Also, during the course of the evening, Mr. Hembd told Hafer and Ellingson that he had automatic weapons in the trunk of his vehicle. At one point, while the vehicle was parked in the City of Helena parking garage on the corner of Park and Sixth Avenues, Hafer and Ellingson looked in a gym bag located in the trunk of the vehicle, and saw a second semi-automatic handgun.

“During the course of the evening, Ellingson [Hafer] was forced to go into the Mini-Mart to obtain a hanger and purchase a carton of chocolate milk for Hembd. When Mr. Ellingson [Hafer] went into the Mini-Mart, Hembd had a handgun pointed at Mr. Hafer [Ellingson]. While in the store, Ellingson [Hafer] persuaded the clerk at the store to notify the police of their predicament and to advise them that they would be going to the Park Plaza when they left the Mini-Mart. Hembd was subsequently arrested by Helena Police officers in the aforementioned parking garage near the Park Plaza. He was searched but neither handgun was located on his person.

“It is the belief of Mr. Hafer and Mr. Ellingson, as well as your affiant, that a search of Mr. Hembd’s vehicle is necessary to locate both handguns mentioned above.”

The search warrant itself stated that the items sought were “two/ or more, semi-automatic handguns, one believed to be located in the interior of the vehicle and the second one is believed to be in the trunk of the automobile.” (Emphasis added.) The justice of the peace, after asking Officer Bryson if the facts and assertions contained in the application for the warrant were true and accurate, issued the search warrant as prepared by the County Attorney’s Office.

Officer Bryson and two other Helena police officers, Troy McGee, and Bryan Costigan, executed the search warrant on the vehicle. While neither McGee nor Costigan had viewed the warrant, they were told by Officer Bryson that they were looking for guns. The search was commenced in the trunk of the vehicle and the first item inspected was a small black bag, referred to as a shaving kit. Inside the black bag the Officers found a white powdery substance. Proceeding with the search, the officers searched a larger dark bag and found three handguns. The subsequent search of the other bags and containers in the trunk produced the following items: ammunition, plastic bags containing an unknown powdery substance, empty glass vials, a scale commonly associated with illegal drug activity, lock picking devices, electronic radio scanning equipment, and radio call guides listing local law enforcement frequencies. The officers then proceeded to search the interior of the vehicle where a semi-automatic pistol was found on the back seat of the car underneath some clothing.

On March 24, 1988, the defendant was charged by information with the following counts: (1) felony intimidation, in violation of § 45-5-203(l)(a), MCA; (2) felony theft, in violation of § 45-6-301(l)(c), MCA; (3) misdemeanor possession of burglary tools, in violation of § 45-6-205(1), MCA; and (4) felony criminal possession of dangerous drugs with intent to sell, in violation of § 45-9-103(1), (3), MCA. The defendant filed a motion to suppress on April 14, 1988, seeking suppression of all evidence seized from the trunk of the vehicle. After a hearing the motion was granted by memorandum and order filed on May 23, 1988. The State appeals the suppression order and presents the following issues for review:

1. Whether probable cause existed for issuance of the March 16, 1988, search warrant authorizing a search of defendant’s vehicle trunk.

2. Whether the plain view doctrine authorized the March 16, 1988, seizure of incriminating items other than handguns from the defendant’s vehicle trunk.

3. Whether suppression of incriminating evidence seized from the defendant’s vehicle trunk in reliance on the validity of the March 16, 1988, search warrant is appropriate under the exclusionary rule.

I.

The State initially raises the question of whether the District Court erred in its finding that sufficient nexus did not exist for probable cause to search the trunk of the defendant’s vehicle. The District Court based its holding of a lack of probable cause on the finding that the victims gave no indication Hembd intended to use the gun in the trunk to intimidate them. Also, the gun in the trunk was not alleged to constitute any manner of contraband. For these reasons, the District Court granted the defendant’s motion to suppress all the evidence seized from the defendant’s vehicle trunk.

A person’s right to be free from unreasonable and/or warrantless searches and seizures is based upon the Fourth Amendment to the United States Constitution and Article II, § 11 of the Montana Constitution. The Montana Constitution states:

“[N]o warrant to search any place, or seize any person or thing shall issue without describing the place to be searched or the person or thing to be seized, or without probable cause, supported by oath or affirmation reduced to writing.”

The requirements for issuing a search warrant call for an impartial magistrate to determine the existence of or lack of probable cause from the “four corners” of the search warrant application. State v. O’Neill (1984), 208 Mont. 386, 393, 679 P.2d 760, 763-764, citing State v. Isom (1982), 196 Mont. 330, 641 P.2d 417; Thompson v. Onstad (1979), 182 Mont. 119, 594 P.2d 1137. The magistrate and the reviewing court shall interpret and examine the affidavit supporting the application in a common sense, realistic fashion, avoiding hypertechnical interpretations. The preference is to encourage the police to seek warrants and in marginal cases the reviewing, court should keep this preference for warrants in mind. O’Neill, 679 P.2d at 764, citing United States v. Ventresca (1965), 380 U.S. 102, 108-109, 85 S.Ct. 741, 746, 13 L.Ed.2d 684, 689.

The reviewing court should also remember the standard for issuing the search warrant is the existence of “a probability, not a prima facie showing of criminal activity.” O’Neill, 679 P.2d at 764, citing Beck v. Ohio (1964), 379 U.S. 89, 85 S.Ct. 223, 13 L.Ed.2d 142. That probability will be determined using a totality of the circumstances analysis, based upon the circumstances set forth in the affidavit. O’Neill, 679 P.2d at 764, citing Illinois v. Gates (1983), 462 U.S. 213, 103 S.Ct. 2317, 76 L.Ed.2d 527. The reviewing court’s examination is limited to whether the magistrate had a substantial basis for concluding probable cause existed. O’Neill, 679 P.2d at 764, citing Gates, 462 U.S. at 238, 103 S.Ct. at 2332, 76 L.Ed.2d at 548.

Our examination of the affidavit in this case leads us to find a substantial basis existed in the affidavit to allow the magistrate to find probable cause to issue the warrant. The defendant was charged with felony intimidation of Jeff Hafer and John Ellingson. Officer Bryson’s affidavit identifies how the two individuals came under Hembd’s control, the vehicle in which they drove him around, the fact Hembd was looking for one Dee Rowe and would kill her when he found her, the fact Hembd pointed a semi-automatic pistol at each of the individuals, and had exhibited a dangerous and threatening manner. The affidavit also notes that Hembd told the individuals he had automatic weapons in the trunk and at one point, while the vehicle was parked the individuals looked in a gym bag in the trunk and saw a second semi-automatic handgun. Upon Hembd’s arrest neither handgun was found on his person.

From the four corners of this affidavit, the justice of the peace was asked to find probable cause to permit a search of the vehicle for two or more handguns. The “or more” portion was not included in the application for the search warrant, but was present in the actual search warrant.

The defendant contends, and the District Court agreed, that a nexus cannot be developed between the gun(s) located in the trunk and the crime of felony intimidation for which the gun(s) constituted evidence. Subsection (1) of the intimidation statute § 45-5-203, MCA, contains the elements necessary to constitute intimidation.

“(1) A person commits the offense of intimidation when, with the purpose to cause another to perform or to omit the performance of an act, he communicates to another, under circumstances which reasonably tend to produce a fear that it will be carried out, a threat to perform without lawful authority any of the following acts:

“(a) inflict physical harm on the person threatened or any other person;

“(b) subject any person to physical confinement or restraint; or

“(c) commit any felony.”

Taking notice of this Court’s prior holding in O’Neill that the evidence collected should not be viewed in terms of “library analysis by scholars,” but in terms of those “versed in the field of law enforcement,” we find sufficient information existed to establish probable cause to search the trunk. O’Neill, 679 P.2d at 764, citing United States v. Cortez (1981), 449 U.S. 411, 101 S.Ct. 690, 66 L.Ed.2d 621. A fair probability existed that a search of the vehicle would uncover the gun with which the defendant intimidated the individuals, and automatic weapons in the trunk with which the individuals believed he would harm them and kill Dee Rowe.

Analyzing the affidavit in light of § 45-5-203, MCA, we find the defendant communicated to the individuals a threat to kill Dee Rowe. Section 45-5-203(1), MCA. In brandishing the pistol in the car and communicating the presence of automatic weapons in the trunk, the defendant produced a fear in the individuals that he intended to and had the ability to kill Dee Rowe. Section 45-5-203(l)(a), MCA. Evidence of the fear created is deduced from the fact that the individuals were sufficiently fearful for their safety and that of Dee Rowe, that Jeff Hafer requested the clerk at the Mini-Mart to call the police. The statements by the individuals that they had seen a semi-automatic handgun in the trunk established sufficient probability to authorize a search of the trunk for that handgun and other weapons which the defendant claimed to have at his disposal.

Defendant contends that the affidavit contains inaccuracies which render reliance upon it void as a matter of law. These inaccuracies were that the defendant did not maintain a dangerous and threatening demeanor throughout the evening, and whether or not the individuals were actually ordered to drive the defendant to various places. We initially note that while these statements were not totally accurate, they are not untrue. The threat to kill Dee Rowe when he found her constitutes a dangerous and threatening action on the defendant’s part. That the individuals did not feel themselves in danger until after they observed that Hembd had seen them looking in the trunk does not alleviate the dangerous and threatening action exhibited throughout the evening toward Dee Rowe. Further, both individuals’ statements show they felt compelled to drive Hembd back to the Park Plaza from the Mini-Mart where they had obtained the coat hanger he needed to break into the Park Plaza. They had both observed him pointing a handgun at the other while they were outside the Mini-Mart. We also note that the affidavit was prepared by the County Attorney based upon Officer Bryson’s recollection of the individuals’ statements and the arresting officers’ reports. While we do not condone the presence of inaccuracies in search warrant applications, under these circumstances we do not find the cited inaccuracies defeat the application. Further, after excising the inaccurate portions of the statements, the affidavit still establishes sufficient probable cause to issue the search warrant. Franks v. Delaware (1977), 438 U.S. 154, 171-172, 98 S.Ct. 2674, 2684, 57 L.Ed.2d 667, 682.

For the foregoing reasons we find the District Court erred in granting the motion to suppress.

II.

Appellants second issue was not addressed by the District Court as the court had found a lack of probable cause to enter the trunk. As we have found the District Court erred in its decision, we feel some guidance is in order regarding the second issue. At the suppression hearing, the defendant contended that if probable cause was found to search the trunk, and other items found besides the gun(s) found in the gym bag should be suppressed under the “plain view” doctrine. The defendant contends the search warrant would not permit the officers to search any bag or container other than the gym bag mentioned in the affidavit. Evidence seized from any other closed bag or container would not fall within the plain view doctrine. Defendant further contends that the officers did not find the drugs and burglary tools inadvertently.

This Court has previously held that four requirements must be met to seize items which are not described in a warrant under the plain view doctrine. There must be a prior justification for the intrusion into the protected area. The articles must be in plain view. The incriminating nature of the items must be apparent. Finally, the discovery of the articles must be inadvertent. State v. O’Neill (1984), 208 Mont. 386, 397, 679 P.2d 760, 766, citing Coolidge v. New Hampshire (1971), 403 U.S. 443, 91 S.Ct. 2022, 29 5.Ed.2d 564.

“The plain view doctrine authorizes seizure of illegal or evidentiary items visible to a police officer whose access to the object has some prior Fourth Amendment justification and who has probable cause to suspect that the item is connected with criminal activity.” Illinois v. Andreas (1983), 463 U.S. 765, 771, 103 S.Ct. 3319, 77 L.Ed.2d 1003, citing Texas v. Brown (1983), 460 U.S. 730, 738, and n. 4, 741-742, 103 S.Ct. 1535, 1541, and n. 4, 1542-43, 75 L.Ed. 2d 502 (plurality opinion); id. at 746, 103 S.Ct. at 1545. (Powell, J., concurring in judgment); id. at 748, 749-750, 103 S.Ct. at 1546, 1547-48 (Stevens, J„ concurring in judgment). Here the police officers were searching the vehicle under authority of a search warrant for two or more handguns. The warrant placed one of the handguns in the interior of the vehicle and one in the trunk. Having previously held that the warrant was properly issued, the officers access and search of the trunk was justified.

The United States Supreme Court has held that a lawful search of fixed premises will extend “to the entire area in which the object of the search may be found ...” United States v. Ross (1982), 456 U.S. 798, 820, 102 S.Ct. 2157, 2170, 72 L.Ed.2d 572, 591. “A warrant to search a vehicle would support a search of every part of the vehicle that might contain the object of the search.” Id. at 821, 102 S.Ct. at 2171. In the instant case the warrant authorized the search of the vehicle, particularly the interior and the trunk, for two or more handguns. In executing the warrant, the officers were justified in searching those areas of the vehicle and examining the contents of containers which might contain the object of the search.

While lawfully engaged in executing the search warrant, the officers were justified in immediately seizing suspicious objects, such as contraband, stolen property or incriminating evidence. Texas v. Brown, supra, 460 U.S. at 739, 103 S.Ct. at 1541. The evidence seized here consisted of some white powdery substance, believed to be drugs, along with a scale and plastic bags and vials normally associated with the distribution of drugs, and lock picking tools and communications equipment normally associated with burglary tools. It is a preferred practice to stop upon the initial discovery of such items in an impounded vehicle, and secure a search warrant which would allow a more extensive search of the vehicle. However, we find that the failure to do so in this instance does not justify suppression of the evidence seized as the containers searched were all capable of concealing guns, the object of the search.

The defendant bases his contention of a lack of inadvertence upon the fact that Officer Bryson knew of the possible existence of drugs in the trunk from his interviews with the two victims. Further, the two officers who conducted the search admitted having read the arrest report circulated earlier that morning which mentioned the possible presence of drugs. The victims’ statements referred to Hembd’s comments that he had a half-pound of “crank” and automatic weapons in the trunk and that he was known as Lock Picking John. The defendant claims the officers search for guns in the trunk was a fishing expedition to test the accuracy of these statements. He claims the officers knew that probable cause did not exist for a warrant to search for drugs or burglary tools.

Since the United States Supreme Court adopted inadvertence as a requirement for seizing evidence or contraband under the plain view doctrine, the courts have attempted to define what level of inadvertence is necessary. In United States v. Freeman (5th Cir. 1982), 685 F.2d 942, at 954, n. 7, the Fifth Circuit Court of Appeals stated:

“[Ijnadvertence does not require the police to be totally dumbfounded or surprised by the discovery of the incriminating evidence; the fact that its presence may be ‘within the realm of foreseeable possibilities,’... or even expected, does not destroy inadvertence if the police did not arrive specifically planning to look for the evidence. (Citations omitted.)”

The Second Circuit later identified when the inadvertent discovery rule would apply.

“[F]or the inadvertent discovery rule to apply to the present case, it must appear that prior to the issuance of the warrant the police could reasonably and in good faith either have failed to recognize the existence of probable cause or believed that there was insufficient evidence of probable cause to search for the money. See United States v. Wright, 641 F.2d 602, 606-07 (8th Cir.1981); 2 W. LaFave, § 4.11 at pp. 179-83.”

United States v. $10,000 in U.S. Currency (2nd Cir. 1986), 780 F.2d 213, 218. In the instant case we note that Officer Bryson was aware of the possible presence of drugs and other evidence; however, his evaluation, after consultation with the County Attorney, was that he did not have probable cause to seek a search warrant for those items. As the Second Circuit stated:

“Once government agents conduct a search pursuant to a valid search warrant, their earlier suspicions do not make discovery of weapons [drugs and burglary tools in this case] actually found in plain view premeditated. Nor is the existence of probable cause, unrecognized by the police, sufficient to bar discovery as not inadvertent. Such a purely ‘objective’ approach would exclude important evidence simply because the police ‘by oversight or acting from an abundance of caution or out of a misapprehension of what it takes to obtain a search warrant covering that evidence, failed to include that item in the warrant executed.’ 2 W. LaFave, § 4.11 at 181.” $10,000 in U.S. Currency, 780 F.2d at 218. We agree with the position taken by the Second Circuit. The cautious actions of law enforcement officials in seeking to protect the validity of the warrant should not invalidate the inadvertent seizure of evidence or contraband where the officers conducting the search adhere to the intent contained in the search warrant.

Having determined previously that the search warrant was issued with probable cause we find the exclusionary rule does not come into play and that we need not discuss whether the good faith exception is applicable. The decision of the District Court is reversed and the case is remanded for further action in compliance with this opinion.

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


source: Caselaw Access Project

author: MR. JUSTICE WEBER

license: Public Domain

text:
    In re the MARRIAGE OF ROBERT A. POPP, Petitioner/Appellant and Cross Respondent, and SUSAN (POPP) MARTIN, Respondent/Respondent and Cross Appellant.
    No. 88-285.
    Submitted on Briefs Dec. 16, 1988.
    Decided Jan. 17, 1989.
    767 P.2d 871.

      Stephen C. Moses, Moses Law Firm, Billings, for petitioner/appellant and cross respondent.
    Allen Beck, Billings, for respondent/respondent and cross appellant.
   MR. JUSTICE WEBER

delivered the Opinion of the Court.

Robert Popp appeals a final judgment of the District Court of the Thirteenth Judicial District, Yellowstone County. He challenges the valuation and distribution of the marital estate. We affirm the judgment of the District Court.

Four issues are raised in this appeal:

1. Did the District Court improperly value the cattle?

2. Did the District Court err in including as a marital asset the monies spent by the husband to maintain himself and two of the parties’ minor children?

3. Did the District Court err in including as a marital asset the value of the irrigation pipe?

4. Is the District Court attempting to punish the husband?

This is the second time this case has been before this Court. In the first trial, the District Court awarded sixty percent of the marital estate to the husband and forty percent to the wife. In re the Marriage of Popp (1983), 206 Mont. 415, 671 P.2d 24. In response to the wife’s appeal of that judgment, this Court determined that the marital assets were improperly valued and the case was remanded for a rehearing on valuation and apportionment of the marital estate. On remand, the District Court used market values of the marital assets and ordered a fifty-fifty division of property thereby increasing the wife’s share from $84,197.50 to $153,433.90. The husband appeals that judgment. The wife has filed a cross-appeal which she asks this Court to dismiss if it is determined that the husband’s assignments of error are without merit.

I

Did the District Court improperly value the cattle?

The District Court adopted a value of $450.00 per head for the parties’ cows and $227.50 per head for the calves. The. husband contends that there is insufficient evidence in the record to support this finding and that the court failed to indicate how it arrived at these figures.

At trial, both the husband and wife offered evidence of cattle values as of the stipulated date of September 1982. The husband offered a weekly livestock summary from September 17, 1982, which he contends supports his valuation of the calves at $200.00 per head. The wife offered documentation from cattle sales which took place in 1982 in Billings, Montana, at the Public Auction Yards. The February 1982 receipt indicates a sale of 34 mixed heifers in which the gross sales were $8,899.77, or $261.76 per head. Thus, the evidence offered by the parties supports a finding valuing the calves between $200.00 and $261.76 per head. We conclude that the District Court’s value of $227.50 per head for the calves is supported by the evidence.

The husband also refers to the September livestock summary to support his valuation of the cows at $350.00 per head. The wife offered an April 1982 sales receipt from a sales yard which indicates a sale price for culled cows between $526.08 and $296.10 per head, with the average sale price of a culled cow at $283.46. While the District Court did not specifically refer to the wife’s exhibit when making its finding regarding the value of the parties’ cows, we hold that there is sufficient evidence in the record to support the District Court’s valuation at $450.00 per head. While this figure is significantly higher than the husband’s offered value at $350.00 per head, there was evidence indicating the top value of the cows at over $500.00. This Court will not set aside the lower court’s finding, which is pot clearly erroneous, merely because one party wishes to have its valuation figures adopted instead of those arrived at by the court.

II

Did the District Court err in including as a marital asset the monies spent by the husband to maintain himself and two of the parties’ minor children?

The District Court found that the sole source of monies deposited into the ranch account was a commercial account with Norwest Bank, and that the ranch account was used to pay for the expenses of the marital estate. The total indebtedness to Norwest Bank by virtue of the loans run through the ranch account as of September 1982 was $131,939.49. The parties agreed that the indebtedness, to the extent it represented money borrowed for the benefit of the marital estate, would be deducted from the gross marital estate to arrive at the net marital estate. The District Court found that $22,352.24 of the funds in the ranch account was spent by the husband for his own benefit. It concluded that those funds were to be treated as a distribution but were to be added back into the marital estate for purposes of determining the value of the gross marital estate. In its amended decree, the District Court stated that:

“. . . it is now apparent that there are some expenditures included in the $22,352.24 that represent a benefit to the marital estate and must now be backed out of that figure. In this category the court now finds it appropriate to include two-thirds of the groceries ($2,315.16), one-half of the utilities ($1,002.55), Jim Eastlick ($300.00), and two-thirds of the miscellaneous items ($457.76) for a total of $4,075.47 to be deducted.”

Thus, a total of $18,278.77 was considered as personal expenses of the husband to be added back into the marital estate. On appeal, the husband contends that it was error for the court to include any amount of this money in the marital estate because the entire $22,352.24 was spent by him on living expenses for himself and two of the parties’ minor children.

The District Court has far-reaching discretion in resolving property divisions and its judgment will not be altered unless a clear abuse of discretion is shown. In re Marriage of Watson (Mont. 1987), [227 Mont. 383,] 739 P.2d 951, 954, 44 St.Rep. 1167, 1170. The husband now asks this Court to scrutinize the nature of the $22,352.24 in expenses as if the Court had not done so. However, the court’s findings indicate otherwise. It is clear from the District Court’s detailed findings in the amended decree that the expenses which were not personal to the husband, but were expended on behalf of the marital estate, were considered separate and distinct and were treated as such. There is no evidence which would render the District Court’s findings on this point clearly erroneous. We conclude that the court properly added $18,278.77 back into the marital estate to determine the value of the estate.

Ill

Did the District Court err in including as a marital asset the value of the irrigation pipe?

The husband argues that it was error for the District Court to independently value the ranch property’s irrigation pipe and include it in the gross marital estate since its value was presumably included in the value of the irrigated ranch property. The District Court adopted as the law of the case the real property values established at the first trial which were approved by this Court. Those values were based on appraisals which differentiated between irrigated land and dry land, the value of the irrigated land being significantly higher. At the first trial, the court did not independently value the pipe since it found that:

“. . . the pipe is not a separate and distinct item from the ranch in that it is an integral part of determining whether or not the ranch can be run with big fields as opposed to a multitude of smaller fields, and whether the land is more valuable as irrigated as opposed to less valuable as dry land crops.”

At the rehearing, the irrigation pipe was valued independently of the real property at $6,379.00 and was included in the gross marital estate as personal property under “machinery.”

The husband’s argument is based on his contention that the ranch property could only be irrigated by irrigation pipe, so that the pipe should have no value independent of the irrigated land. However, this contention is not supported by the record. A report from one of the appraisers established that:

“Irrigation water is supplied by the Yellowstone Ditch Company. This farm has 18.34 shares of stock in this company. According to the company president, P. Yegen Jr. and Seth J. Kiber, one share allows the owner to one miner’s inch of water which will irrigate 9.6 acres or a total in this case of 176.2 acres. The 1982 water cost is $5 per share. Delivery is by gravity ditch and the method of irrigation is flood. Stock water is supplied by the Yellowstone River, irrigation ditches, springs, and reservoirs. Domestic water is supplied by a well at the buildings. (Emphasis supplied).”

Based on this evidence, we hold that it was not error for the District Court to independently value the irrigation pipe and to include it as personal property in the gross marital estate.

IV

Is the District Court attempting to punish the husband?

It appears that the husband is dissatisfied with that portion of the decree which requires the ranch to be sold in the event that he cannot or would not pay to the wife her share of the net marital estate as scheduled. The decree requires that the ranch be listed for not less than $325,000 beginning in February of 1988, to be reduced in sale price by 5% twice a year until sold, and upon sale the proceeds shall first be distributed to the wife in the amount of $165,814.90. The husband argues that this arrangement is grossly unfair in light of a 40% reduction in value of the ranch property since 1982 due to drought conditions in Montana.

It appears that the husband is now seeking to have the ranch valued at a price other than the September 1982 values. We are reminded that September 1982 was stipulated by the parties as the date of inventory and valuation for all of the marital assets. All of the parties’ evidence concerning real property valuation relates to that date. The husband made no attempt to argue valuation or withdraw from the stipulation until after the District Court entered its final decree in 1988. The District Court was merely acting upon the evidence before it as stipulated by the parties. We conclude that the husband’s final assignment of error is without merit.

Because we find no merit in any of the husband’s contentions, we will not address the wife’s cross-appeal. The judgment is affirmed.

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


author: MR. CHIEF JUSTICE TURNAGE

text:
    ROBERT E. DENNIS, Plaintiff and Appellant, v. TOMAHAWK SERVICES, INC., a Montana corporation, Defendant and Respondent.
    No. 88-371.
    Submitted on Briefs Dec. 22, 1988.
    Decided Jan. 17, 1989.
    767 P.2d 346.

      S. Charles Sprinkle, Douglas and Sprinkle, Libby, for plaintiff and appellant.
    Kelly J. Varnes, Burdett Law Firm, P.C., Billings, for defendant and respondent.
   MR. CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Employee Robert E. Dennis (Dennis) filed suit against his former employer, defendant Tomahawk Services, Inc. (Tomahawk), claiming unpaid wages for time and a half overtime as well as compensation for attorney fees and costs allowable under 29 USC § 201 et seq., the Fair Labor Standards Act of 1938 (Act). Compensation was denied by the District Court, Thirteenth Judicial District, Yellowstone County, sitting without a jury. Plaintiff appeals. We affirm.

The issue on appeal is whether the District Court erred in finding that Tomahawk did not violate the Act because Dennis was exempt from the overtime pay provision in the Act.

Cases involving exemptions from overtime pay requirements, by their nature, are primarily questions of fact. Goldberg v. Arkansas Best Freight System, Inc. (W. D. Ark. 1962), 206 F.Supp. 828.

The standard of review for a civil case for a judge sitting without a jury is whether or not the District Court’s findings are clearly erroneous. See, In Re the Marriage of Stewart (Mont. 1988), [232 Mont. 40,] 757 P.2d 765, 45 St.Rep. 850 (the standard of review announced in Stewart for marital dissolution cases is the same for all civil cases). Thus, this Court will not substitute its judgment for that of the trial court’s absent that showing, even where there is evidence in the record to support appellant’s contentions.

The law controlling this issue is found at 29 USC § 201 et seq., and reads in pertinent part:

[Section 207]

“(a)(1) Except as otherwise provided in this Section, no employer shall employ any of his employees who in any work week is engaged in commerce, or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a work week longer than 40 hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.

[Section 213]

“(a) The provision of sections 206 and 207 of this Title shall not apply with respect to

“(1) bona fide executive, administrative, or professional capacity

Volume 29 C.F.R. § 541.2 (1986) is helpful when interpreting the Act. It reads in pertinent part, the language “employee employed in a bona fide administrative capacity” means any employee whose primary duty consists of the following:

“1. Office or nonmanual work directly related to management policies or general business operations, and

“2. Customarily and regularly exercises discretion and independent judgment, and

“3. Regularly and directly assists a proprietor or an employee in a bona fide executive or administrative capacity, or performs under general supervision work along specialized or technical lines requiring special . . . knowledge, or executes under only general supervision special assignments and tasks, and

“4. Does not devote more than 20 percent of his hours worked to activities which are not directly and closely related to the performance of work described in this section of the federal regulations and was compensated on a salary in excess of $155.00 per week. [Emphasis added.]

Thus, the case turns on the nature and characterization of the duties performed by the employee. A District Court finding that Dennis, as dispatcher, served in an administrative capacity, exercising judgment, exempts the employer from paying time and a half overtime compensation for hours worked in excess of 40 per week.

Dennis contends that the trial court’s finding that he exercised discretion and judgment in his job is clearly erroneous because it was not supported in the record by substantial credible evidence. Thus, it was an abuse of discretion to deny plaintiffs claims. We disagree.

Dennis worked as a dispatcher for Tomahawk from November 11, 1985, until October 15,1986. Apparently he received a raise in salary in May 1986 from $1400 per month to $1800 per month. He worked from 7:00 a.m. until 6:00 p.m. each day during the week and part days on alternating weekends, although his pay stubs reflect that he was a salaried employee at 40 hours per week. Dennis was never paid any overtime compensation for hours worked in excess of 40 per week. Some eleven months after he terminated his employment at Tomahawk, Dennis claimed he was entitled to overtime and sought recovery of the same, along with attorney fees and costs.

The duties performed by Dennis at Tomahawk were many and varied. However, there is an inescapable conclusion that Dennis customarily made many decisions during his work day which required him to use his discretion and exercise some independent judgment although most decisions were subject to review at a later date.

It was demonstrated at trial that Dennis, in order to control the drivers, exercised discretion in the execution of the following:

(a) whether or not to issue a $50 fine to a driver for failure to complete the mandatory morning “check call” giving their location, estimated time of arrival (ETA) , etc.;

(b) whether or not to prepare written reports on the drivers for refusal to follow company policy;

(c) monitoring drivers’ off days and mileage reports;

(d) monitoring truck repairs and drivers’ health care problems for approximately 40 trucks;

(e) issuing or withholding checks to drivers for daily expenses on the road, personal advances, and emergency repairs; and

(f) having verbal input to superiors regarding driver reprimands, hiring, firing, performance and productivity.

It is clear from the record that many of Dennis’s decisions were reviewed and that he worked within the limitations of established company policy. That there were limitations on or supervision over Dennis does not dissolve his exercise of independent judgment and discretion, see 29 C.F.R. 541.207(d) (1986); nor does later review or reversal of decisions. Id.

There is case authority from other jurisdictions which supports the District Court ruling that Dennis’s duties as a dispatcher fit the administrative employee exception. In Harrison v. Preston Trucking Co. (1962), 201 F.Supp. 654, Harrison was a day dispatcher for an interstate trucking company who regularly exercised discretion thereby falling under the administrative exception to the Act.

Although the duties vary somewhat, we find the analysis in Harrison persuasive. Harrison, as a day dispatcher, supervised handlers of freight and assignment, departure time and pickup duties of about twenty trucks. Because of his familiarity with the drivers and his first-hand knowledge of their productivity, Harrison had verbal input toward driver firing and hiring decisions, similar to Dennis’s own situation. Harrison was allowed to make recommendations on these issues, which always needed supervisor approval.

We find this exercise of opinion and judgment a telling factor in both Harrison and the case at bar.

The dispatcher was the only Tomahawk employee to have such constant contact with the drivers. That contact put Dennis in a position to be familiar with the drivers, their productivity, reliability and veracity. Dennis regularly made many decisions based on that knowledge. At trial, there was testimony that the knowledge of the dispatcher was valuable and his opinions and recommendations based on that knowledge were highly regarded. Monitoring drivers, forming opinions and making recommendations certainly was an important part of Dennis’s job. Such duties are evidence of his routine exercise of independent judgment and discretion.

The record contains substantial credible evidence supporting the trial court’s finding that Dennis acted in an administrative capacity. Dennis downplayed his duties and decisions at trial, emphasizing the need for many of his decisions to be reviewed by department heads. However, the judge, sitting without a jury, is entirely free to view a witness’s testimony with skepticism. As was noted in Goldberg, supra, there is a tendency for the employee to minimize his discretionary duties. Additionally, the court expressed concern regarding Dennis’s delay in asserting his claim for overtime pay which came eleven months after his one-year tenure with Tomahawk was terminated, when “he had nothing to lose and everything to gain.”

A ruling based on Tomahawk’s substantial credible testimony of Dennis’s supervisor Horning, other fellow employees and another dispatcher is not clearly erroneous.

Based on the foregoing substantial credible evidence, we find no error.

Judgment affirmed.

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


text:
    In the MATTER OF JERRY R. BECHHOLD, Attorney at Law, Respondent.
    No. 87-525.
    Decided Dec. 29, 1988.
    Order for Disbarment Jan. 18, 1989.
    771 P.2d 563.
    Frank B. Morrison, Jr., Helena, for respondent.
    Calvin L. Braaksma, Landoe, Brown, Planalp & Kommers, Bozeman, Sp. Investigator.
   OPINION AND ORDER

This cause comes before us on review under Rule 9(E) of the Rules for Lawyer Disciplinary Enforcement of this Supreme Court, promulgated August 24, 1983.

Following proceedings under the rules, the Commission on Practice on May 10, 1988, recommended discipline for the attorney, Jerry R. Bechhold, as follows:

1. That the Respondent, Jerry R. Bechhold be suspended for the practice of law in the State of Montana for a period of three (3) months.

2. That the Respondent be publicly censured by the Supreme Court of the State of Montana.

3. That the Respondent be assessed and required to pay the costs of these proceedings, and that such costs be paid in full before he again commences to practice law.

The recommendation of the Commission on Practice was not unanimous. Three members of the Commission filed a minority report, in which, not being critical in any way of the majority, the minority contended there were no mitigating circumstances in the case which would allow a recommendation of suspension for three months and that a more just result would be a suspension for six months.

Without disregarding in the slightest the work of the members of the Commission on Practice in this cause and the value of their opinions (it is unfortunate that the public is not more aware of the sacrifice and effort that the members of the Commission devote to lawyer discipline), we determine under the clear and convincing evidence in this cause that the respondent must be disbarred from the practice of law in the courts of this state.

I

Jerry R. Bechhold was admitted to practice before the state courts of the State of Montana on January 30, 1986. On December 2, 1987, the Commission on Practice filed in this Court its complaint charging respondent Bechhold with seven counts of misconduct in his course of practice of law. After due proceedings before the Commission on Practice, the Commission found him guilty of four of the seven counts, and on June 1, 1988 filed its findings, conclusions and recommendations. Respondent filed his objections thereto on September 13, 1988. Briefs and memoranda were received from respondent, his counsel, and counsel for the Commission. Request for oral argument has been made by counsel for the respondent, but we determine that oral argument is unnecessary. The cause is therefore ripe for decision.

II

In Count IV of the complaint against respondent, he was charged with having violated the provisions of Rule 4.4 of the Rules of Professional Conduct promulgated by this Court, by using methods of inquiry which served only to embarrass and burden a third party, Beth Corbin. Rule 4.4 provides as follows:

“In representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass, delay or burden a third person, or use methods of obtaining evidence that violate the legal rights of such person.”

The Commission found that Beth Corbin was an employee of State Farm Claims in Bozeman, Montana. Respondent represented a claimant whose claim had been denied by State Farm, an insurer in this state. Respondent contacted Beth Corbin about the denial of the claim.

Respondent called Beth Corbin repeatedly, seven or eight times a day for several days, and Beth Corbin testified before the Commission that respondent was rude in telling her he did not want to talk to her because she did not know anything.

Another witness testified from direct knowledge that respondent attempted to serve papers on State Farm’s insurer by delivering them to the claims office and swearing there that he was “tired of this bullshit or shit” and referred to Beth Corbin as “that bitch out there.” Respondent testified that he did not remember calling Beth Corbin a “bitch,” but admitted to hard feelings between her and him.

The Commission found that clear and convincing evidence established that respondent had violated Rule 4.4 of the Rules of Professional Conduct. The standard of proof under the rules of practice is that charges of misconduct shall be established by clear and convincing evidence. Rule 15(C). We concur with the findings of the Commission on this count.

Ill

lit Count V of the Commission’s complaint against the respondent, he was charged with violating Rule 1.1 and Rule 3.1 of the Rules of Professional Conduct. Rule 1.1 provides as follows:

“A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.” Rule 3.1 provides in part as follows:

“A lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein unless there is a basis for doing so that is not frivolous, which includes a good faith argument for an extension, modification or reversal of existing law.”

The evidence under this count established that one James Bogen was the owner of Dud’s and Sud’s Laundry and Car Wash in Bozeman. Bogen thought his property taxes were too high compared with property taxes levied on other similarly situated businesses in the Bozeman area. He met one Bud Strode with whom he discussed his problem, and Strode referred him to Bechhold for consultation. Bechhold undertook to represent Bogen, apparently with the understanding that Strode would be doing research for Bechhold but that Bechhold would be the responsible attorney. Documents were prepared, including a complaint for filing in the Federal District Court in Montana that charged violation of Bogen’s civil rights. Bogen’s father is a lawyer practicing in Minnesota, and Bogen has a friend in Billings, Laura Lee, who is also a lawyer and tax specialist. Bechhold on request of Bogen mailed to Laura Lee a copy of his proposed complaint, stating that if he did not hear from her it would be filed in the District Court. Strode apparently was on the verge of traveling to Helena, Montana to file the complaint. Bogen, his caution coming to the fore, conferred both with Laura Lee and his father and then told Bechhold that he wanted to put the whole matter on hold. Bogen was confused because he was receiving conflicting information from Strode and Bechhold. Bogen was of the opinion that Strode was acting beyond his capacity. Bogen was billed for and paid $1,900 to Bechhold for his representation. Bechhold apparently paid Strode. The evidence indicates that the complaint essentially was formulated by Strode. He described himself as a retired electromechanical engineer, now doing legal research. His examination by members of the Commission during his testimony would constitute a textbook example of an evasive witness. Nevertheless he testified that ninety percent of the words in the complaint were his, including words that charged the County Assessor of Gallatin County with fraudulently and invidiously discriminating against Bogen. It was partly these words that alerted Bogen, because his quarrel was not particularly with the County Assessor.

The Commission concluded that Bechhold had violated Rule 1.1 of the Rules of Professional Conduct by failing to provide competent representation for Bogen, that he had delegated the research and document drafting work to Bud Strode, a person not competent to do such work, that Bechhold did not properly supervise Bud Strode, and that Bechhold himself did not have the legal knowledge necessary competently to represent Bogen in the matter.

Respondent argues now that he had not approved the documents, but his letter to Laura Lee in January, 1987, indicated that he intended to file the complaint and the related documents that month which of course indicates his approval of the language therein and the remedy sought.

Laura Lee testified to her opinion that there was no evidence of civil rights violations by the officials charged therewith in the complaint, nor any evidence of improper conduct by these officials. She feared that Bogen would subject himself to sanctions if the strongly-worded petition were filed. Bechhold justified the language by contending that it was contained in a pleading form in American Jurisprudence Pleadings and Practice. The Commission however determined that the language was uniquely inappropriate in the content of the legal problem presented.

The evidence on this count demonstrates clearly and convincingly that Bechhold had not made an adequate investigation of the facts, that he had formulated a legal theory without adequate legal research, that his allegations would have embarrassed his client, who in fact thought the local officials were favorable to his cause though unable to help him, and that Bechhold probably was not competent to handle the matter in the first place. We sustain the conclusion of the Commission on Practice with respect to Count V.

IV

In Count VI, it was alleged that Bechhold had violated the provisions of Rule 1.1 and 3.1 of the Rules of Professional Conduct and that he failed to exercise the degree of competency required of an attorney in prosecuting an action without a good faith basis. We have set forth the provisions of those Rules in the material foregoing.

This count involves a client named Wayne Easley. Easley had been an employee of the Burlington Northern Railroad where he was injured giving rise to a claim against the Railroad. In this matter Easley was represented by attorney Douglas Harris. A settlement was achieved, and a written agreement for a release of all claims was entered into before suit was filed. The amount of the settlement was $55,000.

Later, Easley was involved in a motorcycle accident. His treating physician in examining x-rays discovered injuries that the doctor said could not have been caused by the motorcycle accident and that they were caused by the prior accident involving Burlington Northern.

Bechhold was representing Easley in connection with the motorcycle accident, and filed a complaint on behalf of Easley against Burlington Northern in connection with the prior injuries. The complaint was filed in state district court alleging essentially that Burlington Northern had entered into the $55,000 settlement agreement in bad faith, and asked for punitive damages. The complaint did not allege that the settlement agreement should be set aside.

The complaint had been filed on October 2, 1986. On January 7, 1987, Bechhold filed a motion to withdraw as counsel of record, but that was never acted upon by the court.

Burlington Northern filed a motion to dismiss which was granted by the district court on March 16, 1987 by Judge Thomas A. Olson. In that order, Judge Olson also imposed sanctions against Bechhold in the sum of $1,500 on the grounds that Bechhold had failed properly to research the matter, did not file the claim under the Federal Employers’ Liability Act, and failed adequately to explain to the court why the previous settlement was not binding upon the parties.

Bechhold filed a motion for reconsideration of the defendant’s motion for sanctions and filed a brief in support of that motion. Burlington Northern filed a brief in opposition to the motion for reconsideration. The court heard oral argument on the motion and gave respondent ten days in which to file a final brief before the court ruled. Thereafter on April 13, 1987, Bechhold filed a brief, apparently under the Judge’s briefing schedule, but the brief was directed to the matter of the dismissal of the complaint rather than to the question of sanctions. In his brief Bechhold asserted the contention that mutual mistake was the basis on which to vacate the liability release. On January 26, 1988, the court denied respondent’s motion for reconsideration. Bechhold filed a notice of appeal to the Supreme Court. The cause came before this Court in cause No. 88-255, Easley v. Burlington Northern, decided October 13, 1988, [234 Mont. 290,] 762 P.2d 870, 45 St.Rep. 1915. The appeal was dismissed because the notice of appeal had been untimely filed, by reason of which this Court did not acquire jurisdiction of the appeal.

Although the conclusions of the Commission preceded the decision by our Court in cause No. 88-255, the Commission concluded that clear and convincing evidence showed that Bechhold did not provide competent representation to his client Wayne Easley. The Commission concluded that Bechhold did not possess the legal knowledge, skill, thoroughness and preparation reasonably necessary to represent properly his client in that matter, and thereby violated Rule 1.1 of the Rules of Professional Conduct. As the Commission concluded, when he moved for reconsideration of the sanctions, and was given time to file a written brief, he filed a brief which was not directed to the sanctions but rather to the court’s order granting the motion to dismiss. Respondent argues now that his brief attacking the motion to dismiss was properly filed since if the brief was successful there would be no need for sanctions. Nonetheless, his actions relating thereto, and his subsequent handling of the case demonstrates, as the Commission concluded, a lack of understanding, competence, knowledge and skill in handling the Wayne Easley matter. We sustain the Commission with respect to Count VI.

We should note that District Judge Olson testified before the Commission in connection with the Easley v. Burlington Northern case. Judge Olson pointed out that the case, if it were properly handled, would be filed under the Federal Employers’ Liability Act, and under that Act punitive damages are not allowable, nor are damages allowable against a fellow employee under that Act, although Bechhold had added a fellow employee as a codefendant in the cause. It was Judge Olson’s opinion that Bechhold’s performance in that Case was below what he would expect from an attorney and even from a new member of the Bar. We uphold the findings and conclusions of the Commission on this count.

V

In Count VII, the complaint by the Commission against the respondent charged him with violations of Rule 8.4(b) and (c) and Rule 1.2 of the Rules of Professional Conduct, and with the violation of §§ 45-5-601 and 45-5-602, MCA. We refer to the complaining client as “Jane Doe,” as did the Commission on Practice.

Bechhold had represented Jane Doe in a divorce matter. The complaint charged that he offered to cancel her attorney’s fees or pay her in cash if she would entertain or perform sexual favors for respondent, and certain clients of respondent’s. It was further charged that Bechhold applied pressure on Jane Doe to engage in criminal activity which was morally abhorrent to her, and in violation of his fiduciary duty owed to his client.

The Rules provide as follows, in pertinent part:

“Rule 8.4, Misconduct. It is professional misconduct for a lawyer to:

“(b) commit a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects;

“(c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation;

“Rule 1.2, Scope of Representation

“(d) a lawyer shall not counsel a client to engage, or assist a client in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law.”

Sections 45-5-601 and 45-5-602, MCA, are statutes that deal with prostitution, and the promotion of prostitution.

We have examined the transcript of testimony in this cause, and we cannot express better what the testimony reveals than the findings of the Commission itself. We therefore set them forth here verbatim:

“5. Jane Doe testified that at a time subsequent to the completion of the divorce proceedings in which he had represented her, but while she still was indebted to him for legal services, he engaged her in conversation during which he mentioned that he had read in the paper about women that were prostitutes at the college and who had children to support and that times were rough. During this conversation, he kept asking Jane Doe how she felt about things along that line.

“6. Jane Doe testified that Respondent contacted her following the conclusion of Jane Doe’s divorce proceedings. He asked if she would be interested in entertaining his clients for cash and that she would not have to worry about her bill with him. She hung up the telephone. She thought he was referring to sexual activity (tr. 182-183). Respondent denied the calls testified to by Jane Doe. There was admitted into evidence Respondent’s Exhibit A which was a transcript of a recorded conversation between Jane Doe and Respondent, the conversation having been secretly recorded by Jane Doe in Respondent’s office on April 8, 1987. That conversation was taped by Jane Doe without Respondent’s knowledge. Respondent introduced the transcript in evidence. Jane Doe talked with attorney Mike Cok, and following that conversation decided to go back to Respondent’s office with a tape recorder and record the conversation. On page 2 of Exhibit A, Jane Doe referred to a prior conversation which was not denied by Respondent, as follows:

“ ‘But, ah, I wanted to reflect back on a conversation that we have had. You had called me and told me that we could kind of wipe my bill clean —’

“Respondent replied, ‘— it’s wiped clean.’

“On page 7 of Exhibit A, Jane Doe said, ‘Ah, when you called me before I assumed you had a figure in mind.’ Respondent replied, T didn’t, but everything is negotiable. Um what —.’ Jane Doe said, T have absolutely no idea.’ Respondent relied, T don’t either.’

“From this, it appears that there were prior conversations. Prior to taping the conversation, Jane Doe’s attorney, Mike Cok, talked about taping the conversation. He knew she was going to carry a tape recorder, but did not tell her to do so, nor did he advise her that it was an invasion of privacy to do so (tr. 187 and 188). The transcript was not used for any purpose other than the proceeding before the Commission on Practice. It was not taken to the police or the sheriff or anybody else (tr. 187). Jane Doe initiated the conversation that was taped, and had made an appointment with Respondent to talk with him (tr. 190).

“7. On page 7 of Exhibit A, the following conversation is shown as having taken place:

“ ‘JANE DOE: Have you ever done this before?

“ ‘RESPONDENT: No, not really, Uh, I’ve had, you know, clients say, who want to ah — you know, ask me if I know of a lady — they’ll go out to the bars and try and pick up ah — women, and that kind of thing. Ah, I have no idea. It depends upon you.

“ ‘I guess we’re ah-just up in the air. Most of them have money, you know. Um, I don’t know. What ah-What do you think is a fair price?

“ ‘JANE DOE: I don’t know. I really don’t know. I’ve never done this before.

“ ‘RESPONDENT: Um,-thing where ah — I don’t want to make it look like um, ah, soliciting for any illegal act. Ah, I don’t want to get caught up into that whole situation. You know what I mean, I don’t mean to get myself into that whole boondoggle mess. Ah —

“ ‘JANE DOE: Can I be frank with you?

“ ‘RESPONDENT: Sure.

“ ‘JANE DOE: Am I expected to sleep with them?

“ ‘RESPONDENT: That — that would be up to you, you know.

“ ‘JANE DOE: What do you expect?

“ ‘RESPONDENT: What do I expect? I expect you to show them a good time.

“ ‘JANE DOE: I mean, you apparently are going to pay me some way or another, so what do you expect. Lets just —

“ ‘RESPONDENT: I just want them to be — have a good time. That’s you know, all I’m concerned about. That’s —

“ ‘JANE DOE: Make ’em happy.

“ ‘RESPONDENT: Ah, yeah, I mean show ‘em a good time, but an, you know what goes on that’s between you and them. Ah, I just want them to be happy with respect to a good time while they’re here in Bozeman.

“ ‘JANE DOE: Okay, but you would just directly arrange it, you know?

“ ‘RESPONDENT: I could see that you directly get the money, you’re not going to--for me.

“ ‘JANE DOE: Okay,----the cost of what.

“ ‘RESPONDENT: It ‘s a question of ah — money that we’re talking.

“ ‘JANE DOE: Well, why don’t you decide. Ah, give me a telephone call. I’m usually home —

“ ‘RESPONDENT: What’s your telephone number.

“ ‘JANE DOE: 6-7011.

“ ‘RESPONDENT: Six, what?

“ ‘JANE DOE: 6-7011.

“ ‘RESPONDENT: 586-7011?

“ ‘JANE DOE: Yeah. And, right now, I’m going to meet a friend for lunch in Livingston and I have to leave so —

“ ‘RESPONDENT: Okay. I have to get to the Elks Club. Um, yea, well. Yeah, that way maybe what — assuming that you were still get that list you’ve got the ability of showing them. What kind of money would you want in order for you to have — in order for you to — say spend hourly?

“ ‘JANE DOE: I don’t know. I’ll think about it and think about it. I’ll just go from there and try it out —

“ ‘RESPONDENT: Say again.

“ ‘JANE DOE: When you decide, I’ll decide. Then we’ll come to a

“ ‘RESPONDENT: Agreement?

“ ‘JANE DOE: Happy medium.

“ ‘RESPONDENT: Yeah, sure. That’s always interesting, a happy medium. Now, with respect to the child custody problem and the other problem you’ve got, I’ll be more than willing to ah — help you out any way I can and ah — ah — I can —’

“8. Later the same day that the conversation was taped, Respondent called Jane Doe and said that he had decided to pay her $100.00 an hour for entertaining his clients. She understood that to refer to sexual favors.

“9. Respondent testified that he did not disagree with the transcript at all, Respondent’s Exhibit 3 (tr. 204).”

The objections of Bechhold to the foregoing findings of the Commission are that Finding No. V is not a finding at all but merely a repetition of the testimony of the witness Jane Doe; that the taped conversation shows that he was not owed “an attorney’s fee at the time of the conversation because it had been ‘wiped clean’ and that the amount of the debt, $30, was an insufficient inducement for the transactions contemplated.” He further contends that Jane Doe asked him at one point whether he knew of any good looking bachelors, and that he had replied in a joking way that he did and maybe would even pay her to go out with them. He contends that his testimony was that he was just trying to make her feel good, and that the subject was dropped “like that.” He objects to other findings on the grounds that they were merely summaries of the witness’ statement without a finding by the Commission as to the truth of the witness’ statements. He emphasizes that never at any point did Jane Doe testify that he had asked her to sleep with anyone and that there was never such a direct question asked of her. He contends there is nothing illegal about an escort service. Moreover, he contends that the conclusions of law based on those findings have no substantial basis and that the Commission never in direct words stated that there was “clear and convincing evidence” to support the findings or conclusions.

This Court does not have the advantage of the Commission members, who had before them the persons testifying, and an opportunity directly to judge of their credibility. Before this Court is a cold record, and it speaks out loudly, and clearly and convincingly, what the conversations between Bechhold and Jane Doe entailed. It is plain and obvious that Bechhold was suggesting to her that she engage in acts of prostitution with his clients without directly saying so. When Jane Doe asked him if frankly, he wanted her to sleep with his clients, he could very well then have answered directly and without equivocation “No, that is not my suggestion or purpose, I do not want you to do that.” What Bechhold did not say in the taped conversation or otherwise is as damning as his quoted statements. His purpose is substantiated by his earlier and later telephone conversations testified to by Jane Doe, in which he expressly offered her $100 an hour for such services as she might render.

We therefore sustain the findings of the Commission as clear and convincing with respect to Bechhold’s dealings with Jane Doe. Implicit in that holding is that not only did he engage in the reprehensible purpose of securing her services as a prostitute, but that in denying it now he is not telling the truth.

VI

We most unfortunately cannot agree with the recommendations of the majority of the Commission on Practice that Mr. Bechhold be suspended from the practice of law for a period of three months. We must also respectfully not agree with the minority who counseled at least a suspension of six months. It is clear that Mr. Bechhold must be disbarred from the practice of law.

In his brief and meteoric career as a lawyer, Mr. Bechhold has amply demonstrated that he is incompetent to practice law, and that he represents a danger to those clients who may entrust their property, their careers, or indeed their lives in his hands.

We would be forced to the conclusion that he must be disbarred even without the reprehensible chapter involving Jane Doe. His representation of the clients in the other matters presented before the Commission demonstrate that he is inadequately prepared by training, education and intellectuality, to represent clients in serious matters. Accordingly,

IT IS ORDERED:

1. The matter of Jerry R. Bechhold, attorney and counselor of law, having been deemed fully submitted to the Supreme Court, and the Supreme Court having considered the matter following filing of objections, and briefs from the respective parties, the Supreme Court determines that the appropriate discipline, pursuant to Rule 9(E) of the Rules for Lawyer Disciplinary Enforcement, requires that Jerry R. Bechhold be disbarred from the practice of law in the state of Montana.

2. The date of January 18, 1989, at 10:00 a.m. thereof, before the Supreme Court in its chambers in the Justice Building, Helena, Montana, be and the same hereby are set as a time and place for the entry of formal disbarment of Jerry R. Bechhold.

3. The Clerk shall notify the Commission, its special counsel, the respondent Jerry R. Bechhold, and respondent’s counsel of the time and place for the appearance of Jerry R. Bechhold for his formal disbarment, by serving a copy of this opinion and order as hereafter provided.

4. If respondent determines to appear in person at such time, he may be accompanied by counsel, and may make a statement thereat with respect to the discipline to be imposed. Because Bechhold’s appearance is granted under Rule 9(E), we have determined that oral argument is not necessary in this case.

5. From the date of this order, until January 18, 1989, at the hour above specified, Jerry R. Bechhold is hereby suspended from any and all practice of law in the state courts of Montana.

6. Jerry R. Bechhold shall pay the costs incurred by the Commission on Practice in connection with these proceedings, including this review, which costs shall be supplied by an affidavit of the Chairman of the Commission and filed in this cause. Upon such filing, the amount of such costs shall be and constitute a judgment against Jerry R. Bechhold.

7. Jerry R. Bechhold may waive in writing his right to appear personally before this Court on January 18, 1989, as aforesaid, or his right to appearance by counsel, in which event his formal disbarment will be determined by an entry of an order on or after that date.

8. A copy of this order, certified by the Clerk of this Court, served upon counsel for respondent, and upon respondent, by ordinary mail, shall be and constitute and perform the office of an original order duly served from this Court and shall be binding upon respondent as though personally served.

DATED this 29th day of December, 1988.

s/J.A. Turnage, Chief Justice

s/John Conway Harrison, Justice

s/William E. Hunt, Justice

s/John C. Sheehy, Justice

s/Fred J. Weber, Justice

s/R.C. McDonough, Justice

s/L.C. Gulbrandson, Justice

ORDER FOR DISBARMENT

On December 29, 1988, this Court made and entered its Opinion and Order for disbarment in the Matter of Jerry R. Bechhold and in that Order designated Wednesday, the 18th day of January, 1989, at 10:00 a.m. thereof, before the Supreme Court in its chambers in the Justice Building, Helena, Montana, as the time and place for the entry of formal disbarment of said Jerry R. Bechhold.

On January 17, 1989, Jerry R. Bechhold, by telephone, informed personnel of the Court that he would not appear at the time and place stated. Because such notice was not in writing as directed in the order of December 29, 1988, the Court made itself available to open court in its chambers at the time and place designated, and said Jerry R. Bechhold did not appear thereat nor did any person make a statement in his behalf. Accordingly, the Court deems that sufficient notice of the time and place of the order of disbarment and his opportunity to appear has been given to Jerry R. Bechhold and he declines to further appear and make a statement.

THEREFORE, the Court, being advised in the premises,

IT IS HEREBY ORDERED:

1. Jerry R. Bechhold be and hereby is disbarred from the practice of law in the State of Montana.

2. Said Jerry R. Bechhold shall forthwith comply with Rule 21 of the Rules for Lawyer Disciplinary Enforcement promulgated by this Court in at least the following respects:

A. Jerry R. Bechhold shall notify or cause to be notified by registered or certified mail, return receipt requested, (1) all clients being represented in pending matters; (2) any co-counsel in pending matters; and (3) any opposing counsel in pending matters, or, in the absence of such counsel, the adverse parties, that the Court has ordered the disbarment of Jerry R. Bechhold and that Jerry R. Bechhold is therefore disqualified to act as a lawyer.

B. Jerry R. Bechhold shall deliver to all clients being represented in pending matters any papers or other property to which they are entitled and shall notify them and any counsel representing them of a suitable time and place where the papers and other property may be obtained, calling attention to any urgency for obtaining the papers or other property.

C. In the event that any client of Jerry R. Bechhold does not obtain another lawyer, it shall be the responsibility of Jerry R. Bechhold to notify in writing the judge of the pending matter.

3. This order is effective immediately upon entry. From and after this time and date Jerry R. Bechhold shall not engage as a lawyer for any new cases or legal matter of any nature. Jerry R. Bechhold shall refund any part of any fees paid in advance which have not been earned.

4. Within twenty days hereafter, to-wit, on or before February 7, 1989, Jerry R. Bechhold shall file with this Court and the Commission on Practice an affidavit showing (1) that he has fully complied with the provisions of this order; (2) a list of all state, federal or administrative jurisdictions to which he is admitted to practice; and (3) his resident or other addresses to which communications may thereafter be directed to him.

5. A copy of this order, certified by the Clerk of this Court, served upon counsel for respondent, and upon respondent, by ordinary mail, shall be and constitute and perform the office of an original order duly served from this Court and shall be binding upon respondent as though personally served.

DATED this 18th day of January, 1989.

s/J.A. Turnage, Chief Justice

s/William E. Hunt, Justice

s/John C. Sheehy, Justice

s/Fred J. Weber, Justice

s/R.C. McDonough, Justice

s/L.C. Gulbrandson, Justice


author: MR. JUSTICE GULBRANDSON MR. JUSTICE SHEEHY,

text:
    BUTTE-SILVER BOW LOCAL GOVERNMENT, Petitioner, v. The STATE OF MONTANA, Treasurer of the State of Montana, Department of Revenue of the State of Montana, Respondents.
    No. 86-270.
    Submitted Dec. 2, 1988.
    Decided Jan. 19, 1989.
    Rehearing Denied Feb. 16, 1989.
    768 P.2d 327.

      James H. Goetz argued; Goetz, Madden & Dunn, Bozeman, for petitioner.
    Mike Greely, Atty. Gen., Helena, Clay R. Smith argued, Asst. Atty. Gen., Eric J. Fehlig, Dept, of Revenue, Donald MacIntyre, Dept, of Natural Resources, for respondents.
   MR. JUSTICE GULBRANDSON

delivered the Opinion of the Court.

This case involves a petition for assumption of original jurisdiction filed pursuant to Rule 17, M.R.App.P. Petitioners seek a declaratory judgment declaring the Montana Resource Indemnity Trust Act (1973), (the Act), unconstitutional, insofar as it authorizes the expenditure of Resource Indemnity Trust (Trust) funds for purposes other than the reclamation of lands disturbed by the taking of natural resources. Petitioners also challenge the constitutionality of respondents’ acts in appropriating and expending Trust funds for purposes other than reclamation of lands and contend such acts are a breach of respondents’ fiduciary duties as trustees of the Trust under § 15-38-203(2), MCA. We accept the case on original jurisdiction, but find the Act is constitutional and that respondents’ expenditures of Trust funds were authorized under the Act.

The Butte-Silver Bow Local Government (Butte-Silver Bow) filed its “Petition for Declaratory Judgment on Original Jurisdiction” with the Montana Supreme Court on June 13, 1986. The petition relies on Art. IX, § 2 as the constitutional basis for its claim. On July 30, 1986, petitioners Butte-Silver Bow sought leave to amend its petition to include several individuals who would “suffer serious adverse impacts in their environmental and aesthetic well-being and quality of life if proper reclamation is not undertaken in the City of Butte.” Robert J. Pavlovich, Fritz Daily, and Don R. Peoples were added “in their individual capacities as citizens, residents, electors, and taxpayers of Butte-Silver Bow Local Government.”

After review of the briefs submitted, this Court remanded the action to Montana’s First Judicial District Court, Lewis and Clark County, for determination of factual issues. Particularly, this Court requested the District Court to prepare findings of fact “as to the use and expenditures made of monies derived from the Resource Indemnity Trust Fund, through its interest earnings by the various governmental agencies under the appropriations of the Legislature.” The case is back before this Court upon the agreed findings of fact of the parties adopted by the District Court.

Petitioners raise the following issues to this Court:

1. Do the petitioners have standing and should this Court assume original jurisdiction?

2. Is the Montana Resource Indemnity Trust Act, § 15-38-101, et seq., MCA, unconstitutional for authorizing the appropriation and expenditure of Trust funds for purposes other than reclamation of lands?

3. Have respondents violated their fiduciary duties as trustees by using Trust funds for purposes other than the reclamation of lands?

4. Have respondents used Trust funds for general agency operating expenses in violation of § 15-38-203(2), MCA?

5. Are petitioners entitled to attorney’s fees under the common fund theory?

I

Should original jurisdiction be granted?

Petitioners’ standing to bring this action is essential to the question of our acceptance of original jurisdiction. This Court has previously held a registered voter has standing where a constitutional provision is clearly intended to benefit the public and the electorate, and by contending the provision “has been the victim of legislative strangulation.” Committee for an Effective Judiciary v. State (1984), 209 Mont. 105, 108, 679 P.2d 1223, 1225. Further, a taxpayer will have standing to question the validity of a tax, or the expenditure of the tax monies, provided the issue(s) presented directly affect the constitutional validity to collect or use the proceeds of the tax by the state or a local government entity. Grossman v. State, Dept. Natural Resources (1984), 209 Mont. 427, 438-439, 682 P.2d 1319, 1325. Individual petitioners meet the criteria necessary to establish standing both as registered voters and as affected taxpayers. Having found the individual petitioners have standing, we decline to address the question of petitioner Butte-Silver Bow’s standing.

Once standing to bring the action is established, the question shifts to whether the action meets the necessary factors for this Court to accept original jurisdiction. This Court has found that an assumption of original jurisdiction is proper when: (1) constitutional issues of major state wide importance are involved; (2) the case involves pure legal questions of statutory and constitutional construction; and (3) urgency and emergency factors exist making the normal appeal process inadequate. State ex rel. Greely v. Water Court, State of Montana (1984), 214 Mont. 143, 691 P.2d 833; Rule 12, M.R.App.P. Moreover, this Court clearly stated the Court has original jurisdiction to accept declaratory judgment proceedings “where the issues have impact of major importance on a statewide basis, or upon a major segment of the state, and where the purpose of the declaratory judgment proceedings will serve the office of a writ provided by law. . . .” Grossman v. State, Dept. of Natural Resources (1984), 209 Mont. 427, 436, 682 P.2d 1319, 1324.

This petition involves a constitutional issue of major statewide importance. Petitioners are seeking an interpretation by this Court of a section of the Constitution, of a major act passed by the Legislature and a determination of the existence or absence of conflicts between the two. A decision in the petitioners’ favor clearly would have a major impact on the Legislature’s funding of a variety of state programs.

Additionally, this.petition involves only legal questions. All factual questions involving the disposition of Trust monies, have been adequately addressed in the District Court’s findings of fact. The Court must determine the legal question of the purposes for which trust funds may or may not be utilized, and then may examine whether the appropriations made by the Legislature were authorized.

Regarding the question of whether or not this case presents sufficient urgency and emergency factors to require the Court to exercise original jurisdiction, this Court has stated:

“Resolution of the issues presented herein is necessary to eliminate or reduce a multiplicity of future litigation; . . . and to eliminate needless expenditure of public funds on procedures that otherwise might subsequently be declared illegal. One of the basic purposes of the Montana Declaratory Judgment Act is to provide for advance determination of such issues, thereby eliminating these otherwise detrimental results.”

Grossman, 682 P.2d at 1322, citing Forty-Second Legislative Assembly v. Lennon (1971), 156 Mont. 416, 420-422, 481 P.2d 330, 332-333. In light of the fact that the Legislature convened on January 2, 1989, and it will undoubtedly fund programs from the trust income which may or may not be determined constitutional by this opinion, sufficient urgency and emergency exists for exercising original jurisdiction.

Having found that petitioners have standing and that the petition satisfies the three required factors, we assume original jurisdiction.

II.

Petitioners’ advance three arguments on the issue of whether or not the Montana Resource Indemnity Trust Act of 1973 violates Art. IX, § 2 of the 1972 Montana Constitution. First, petitioners allege that the plain language of Art. IX, § 2, provides the Trust fund shall only be used for the reclamation of lands disturbed by the taking of natural resources. Second, by placing the amendments authorizing the Trust in Art. IX, § 2, the people of the state of Montana have shown their intent that use of the Trust funds be limited to reclamation of such disturbed lands. Third, the Legislative history shows an intent to limit Art. IX, § 2, to reclamation of lands disturbed by the removal of natural resources.

When interpreting a constitutional provision, certain tenets must be observed. The same rules of construction which apply to determining the meaning of statutory provisions apply to constitutional provisions. Keller v. Smith (1976), 170 Mont. 399, 404, 553 P.2d 1002, 1006. The intent of the framers of the provision is controlling. Keller, 553 P.2d at 1006. However,

“[s]uch intent shall first be determined from the plain meaning of the words used, if possible, and if the intent can be so determined, the courts may go no further and apply any other means of interpretation.” (Citations omitted.)

Keller, 553 P.2d at 1006. We therefore must decide whether the plain language of Art. IX, § 2 clearly provides the trust fund shall only be used for the reclamation of lands disturbed by the taking of natural resources, or whether the provision is ambiguous and in need of additional interpretation. If the State Constitution does not provide an express limitation on the legislative appropriation power of the State, that power shall reside in the Legislature. Board of Regents of Higher Education v. Judge (1975), 168 Mont. 433, 446, 543 P.2d 1323, 1331.

The plain language of Art. IX, § 2(1), which is the reclamation section within the larger Environment and Natural Resources Article, states:

“All lands disturbed by the taking of natural resources shall be reclaimed. The legislature shall provide effective requirements and standards for the reclamation of lands disturbed.”

Subsection (1) is a statement by the framers of the Constitution that “[a]ll lands disturbed by the taking of natural resources shall be reclaimed” and that the Legislature is directed to provide regulations and standards for that reclamation. This subsection does not mention the Trust or place any limitation upon use of Trust funds.

Additional subsections were added to § 2 by Constitutional amendment in 1974 (following the 1973 legislative enactment of the Montana Resources Indemnity Trust Act). Subsections (2) and (3) were passed to assure the constitutional protection of this Trust and to preserve the Trust for its intended purpose. They state:

“(2) The legislature shall provide for a fund, to be known as the resource indemnity trust of the state of Montana, to be funded by such taxes on the extraction of natural resources as the legislature may from time to time impose for that purpose.

“(3) The principal of the resource indemnity trust shall forever remain inviolate in an amount of one hundred million dollars ($100,000,000), guaranteed by the state against loss or diversion.”

We do not find a limitation in Subsection (2) which would restrict the use of Trust funds to reclamation of lands. The subsection creates the Trust, titles the Trust and provides a source of funding for the Trust. We note that the Trust is not titled the Reclamation of Lands Indemnity Trust nor the Mining Lands Indemnity Trust, but the Resource Indemnity Trust. As words must be given their natural and popular meaning in applying statutory construction, we note that Websters 3rd New International Dictionary defines resource as “a new or a reserve source of supply or support: a fresh or additional stock or store available at need: something in reserve or ready if needed.” This definition is very broad and indicates an intent on the part of the framers of the provision to have the Trust indemnify the people of the state for the taking or using of any resource.

Examining Subsection (3), we find a limitation upon the use of the Trust in clear and unambiguous words. However, this limitation merely protects the principal of the Trust from future invasion by the Legislature. This provision may not be construed as a limitation on the use of Trust income, nor of the use of Trust principal over and above the $100,000,000 protected by Subsection (3).

Appellants claim that the inclusion of Subsections (2) and (3) in § 2 shows an intent to use the Trust strictly for the purpose of reclamation of lands disturbed by the taking of natural resources as provided in Subsection (1). They contend the use of the words “for that purpose” in Subsection (2) refers back to Subsection (1) and the purpose stated therein of reclamation of lands disturbed. Respondents correctly point out that petitioners’ argument ignores a basic rule of grammatical construction: “[t]he ordinary rule of construction is that the exception is confined to the last antecedent.” (Emphasis added.) State ex rel. Hinz v. Moody (1924), 71 Mont. 473, 484, 230 P. 575, 579. The last antecedent phrase in Subsection (2) is the funding of the Trust, not the reclamation of disturbed lands found in Subsection (1).

Further, the Constitution as a whole does not support a finding of a Trust fund limitation in Art. IX, § 2 of the 1972 Montana Constitution. At no other place in the Constitution is a limitation placed upon the appropriation of the funds of this Trust. Where a limitation on certain, specific revenues is intended in other sections in the Constitution, that limitation is clearly spelled out. See, e.g., Art. IX, § 5 (relating to the coal severance tax trust fund); and Art. VIII, § 6 (relating to the non-diversion of highway revenues).

For the foregoing reasons we hold the plain language of Art. IX, § 2 does not place a limitation upon the appropriation of resource indemnity trust funds beyond the restriction contained in Subsection (3). Having so determined we may not apply other means of statutory construction. Keller, 553 P.2d at 1006.

III.

As Art. IX, § 2 of the 1972 Montana Constitution does not restrict appropriation of Trust funds beyond the limitation contained in Subsection (3), we now turn to petitioners’ third and fourth issues.

Petitioners first argue that respondents, as trustees of the Trust, have violated their fiduciary duties as trustees by allocating Trust funds for projects unrelated to the reclamation of lands disturbed by the taking of natural resources. We held that the plain language of the 1972 Montana Constitution does not so limit the appropriation or allocation of Trust funds, and we need only discuss whether the Montana Resource Indemnity Trust Act, Title 15, Chapter 38, contains such a limitation on the use of funds.

Our examination of the Act finds the appropriation or allocation of Trust funds is not limited to the reclamation of lands disturbed by the taking of natural resources. Rather, the Legislature has provided the funds “shall be used and expended to improve the total environment and rectify damage thereto.” Section 15-38-203(1), MCA. “Total environment” has been defined as “air, water, soil, flora and fauna and the social, economic, and cultural conditions that influence communities and individual citizens.” Section 15-38-103(4), MCA. It is indisputable this purpose is very broad and allows the Legislature great discretion in determining the uses to which to apply Trust funds. The Act only limits appropriations to programs or uses which improve the total environment and rectify damage thereto, as total environment is defined in § 15-38-103(4), MCA. We find no express limitation contained within the Act which would limit appropriation or allocation of Trust funds solely for reclamation of lands disturbed by the taking of natural resources.

Petitioners also contend past and present expenditures have been made of Trust funds for general operating expenses of state agencies in violation of the express limitations in § 15-38-203(2), MCA, and in breach of their fiduciary duties as trustees of the Trust. Section 15-38-203(2), MCA, states:

“It is the intent of the legislature that future appropriations from the resource indemnity trust interest account not be made to fund general operating expenses of state agencies.”

Initially we note that this subsection, added by the 1985 Legislature, specifically applies to “future appropriations.” For that reason we find there could not have been a breach of fiduciary duty prior to the effective date of the statute. Further, the Legislature generally cannot pass legislation which a future Legislature may not repeal. State v. State Highway Commission (1931), 89 Mont. 205, 215, 296 P. 1033, 1036.

Upon examination of the specific violations alleged by petitioners, we find a problem of semantics. Petitioners identify appropriations made to the Department of State Lands, (DSL) the Department of Livestock, and the Department of Natural Resources in the 1987 biennium, as having been made for general operating expenses. We find it ironic that one of the expenditures, alleged as having been for “general operations,” was for the reclamation division of the DSL in 1986. The funding for the reclamation division was provided in total by Trust funds and federal funds allocated for similar use. The division is responsible for regulating mining related disturbances in the state and enforcing the following acts: the Metal Mine Reclamation Act, the Open Cut Mining Act, the Montana Strip and Underground Mine Reclamation Act, and the Underground Mine Siting Act. The activities conducted by the division are admittedly administrative in nature, but are essential to ensuring that the total environment of the state is improved and damage thereto is rectified. The argument that Trust funds allocated toward operation of these programs is in violation of § 15-38-203(2), MCA, is without merit. In each case, the State has shown the funds were expended for the operation of programs related to improving the total environment or rectifying damage thereto.

The allocation of Trust funds for these programs did not constitute an expenditure for general operating expenses of state agencies in violation of § 15-38-203(2), MCA. Consequently, we hold the use of funds for programs related to improving the total environment does not violate respondents’ fiduciary duty toward the Trust in allocating Trust funds. Having found petitioners are not entitled to relief, petitioners’ claim for attorney’s fees must be, and hereby is denied.

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

MR. JUSTICE SHEEHY,

dissenting:

This decision continues what has become a commonplace in the history of the state of Montana: the State gets the gold mine, Butte gets the shaft.

The decision is about as farfetched a stretch of interpretation of a constitutional provision as can be imagined. The State Constitution requires that lands disturbed by the taking of natural resources shall be reclaimed. The Constitution further provides for a special fund to be created based solely on the extraction of natural resources. Somehow, semantically, the majority find no nexus between the two provisions, all contained in the same constitutional article.

The close tailoring of the tax on the extraction of natural resources to the constitutional mandate that all lands disturbed by the taking of natural resources be reclaimed is ignored. Somehow the obvious connection between the tax and the purpose of the tax escapes the facile interpretation of the majority.

In their response to the petition, the state of Montana and its Treasurer admitted that the 1985 legislature “utilized a portion of the interest income from the Resource Indemnity Trust fund to fund general operating expenses of state agencies.” (Paragraph 11, response to amended petition.) Yet the majority see nothing inconsistent in permitting the State to fund its general operating expenses from a fund constitutionally entitled “Resource Indemnity Trust.” A trust by any other name remains a trust, and a breach of trust by the State should no more be countenanced by this Court than by any private trustee.

The Resource Indemnity Trust was never intended to fund the general operations of the State. Other taxes levied upon extractors of natural resources amply provide for the general expenses of state government. The coal severance tax (Section 15-35-103, MCA) is partly credited to the general fund of the State. (Section 15-35-108(3)(k), MCA.) The oil and gas severance tax (Section 15-36-101, MCA) is allocated to county expenses and then to the general fund. Section 15-36-112, MCA. The mining license taxes levied on metalliferous mines (Section 15-37-103, MCA) goes partly to the credit of the general fund of the State. Section 15-37-117, MCA. The taxes on micaceous mineral mines all go to the general fund of the State. Section 15-37-207, MCA. The Resource Indemnity Trust Tax, as a special tax levied for land reclamation, cannot be justified if some of that tax is going to be siphoned off for the general operations of the State. To permit such extraneous use of the tax funds violates the legislative purpose given as the excuse for levying the tax. That legislative purpose follows:

“It is the policy of the state of Montana to indemnify its citizens for the loss of long term value resulting from the depletion of its mineral resource base and for environmental damage caused by mineral development. This policy of indemnification is achieved by establishing a permanent Resource Indemnity Trust Fund from the proceeds of a tax levied on mineral extraction and by allocating spendable trust revenues:

“(1) To protect and restore the environment from damages resulting from mineral development; and

“(2) To support a variety of development programs that benefit the economy of the State and the lives of Montana citizens.”

How blatant will the extraneous use of Resource Indemnity Trust taxes become? To begin with, 30 percent of the interest income of the Resource Indemnity Trust Fund must now be allocated to the water development state special revenue account. Section 15-38-202(2)(a), MCA. Out of that account, the taxes imposed on the extraction of natural resources will be used for the rehabilitation of State owned projects and parks, including the rehabilitation of spillways and State owned dams; the formulation of down stream emergency warning and evacuation plans for state-owned dams, the development of hydropower potential of state-owned dams; the promotion and development of off-stream or tributaries storage; and among others, administrative expenses, including but not limited to the salaries and expenses of personnel, equipment, office space and other necessities incurred in the administration of the water development program. Section 85-l-604(3)(b), MCA.

The preservation and proper use of water is necessary to the well-being of this dry western state, but the expense of such preservation should never be fobbed off on a tax levied solely on mines and oil and gas operations, a tax ostensibly levied for the purpose of land reclamation.

I take the position that since land reclamation is constitutionally demanded, and since the Constitution provides a method through the Resource Indemnity Trust Fund to pay for such reclamation, that monies raised from taxes on parties who extract the natural resources should be limited to the purposes of the tax. The legislature, by resorting to special tax funds to provide for general fund obligations is creating an unequal and unfair burden on these special taxpayers and we should not countenance it.

MR. JUSTICE HUNT concurs in the foregoing dissent of MR. JUSTICE SHEEHY.