text:
    IN RE MARRIAGE OF DEANNE M. NEAL, Petitioner and Appellant, and DALE E. NEAL, Respondent and Respondent.
    No. 93-614.
    Submitted on Briefs August 11, 1994.
    Decided November 14, 1994.
    51 St.Rep. 1109.
    267 Mont. 455.
    884 P.2d 789.

      For Appellant: Marcia Birkenbuel, Great Falls.
    For Respondent: Joan E. Cook, Great Falls.
   JUSTICE WEBER

delivered the Opinion of the Court.

This is an appeal from the findings of fact, conclusions of law and final decree of dissolution entered by the Eighth Judicial District Court, Cascade County, Montana. We reverse in part and affirm in part.

We consider the following issues on appeal:

I. Did the District Court err in determining the net value of the marital estate?

II. Did the District Court abuse its discretion by refusing to consider newly discovered evidence regarding the cash value of the Kentucky Central Life Insurance policy?

III. Did the District Court abuse its discretion by amending its order to finally refuse reimbursement to Deanne for the children’s health insurance premiums?

Deanne Neal (Deanne) and Dale Neal (Dale) were married in 1973. During the marriage, the couple lived and worked on the family farm in Fairfield, Montana. Dale still works on the farm and Deanne is employed part-time. Neither party owned substantial property prior to the marriage. During the marriage they accumulated a home, land, livestock and various vehicles and equipment.

Five children were born of the marriage, four of whom were minors at the time of the trial. Following the dissolution of the marriage, the couple agreed to share legal custody of the children, with primary residence to be with Dale on the farm. Dale retained the sole control over the family farm and Deanne rented a home in Fairfield.

Deanne filed an action for dissolution on July 29,1992, in Cascade County. Trial was held on July 15,1993, and on September 16,1993, the court issued its findings of fact, conclusions of law and final decree dissolving the marriage, dividing the property and providing for custody of the children. The child custody arrangements ordered by the court agreed with those of the parents incorporated into their written agreement. Subsequently, Deanne filed a motion to alter or amend the judgment or for a new trial. Dale filed his opposition and the court denied Deanne’s motion.

The major dispute at trial involved the calculation of the net value of the marital estate as it concerned the farm and ranch operating note. At the time of trial the balance on the note was $84,740.00 but the crops securing the note had not been sold nor had the calves sold.

At trial, Deanne’s expert testified that there were several accounting alternatives that could be used to set the net value of the marital estate when it involves a farming operation. One of the alternatives included valuing all the assets bought or produced with the operating loan against the full balance owing on the loan; another method would be to exclude both the note and the assets produced therewith. Another method would be to determine an average loan balance and subtract from the average loan balance the average annual value of the crops and livestock.

Evidence at trial showed that Deanne had borrowed a significant sum of money from her parents in order to pay her monthly living expenses in Fairfield. Deanne moved the court for temporary maintenance and at the hearing the court determined that Deanne needed an extra $500 a month to live. The court initially determined that the monthly sum of $500 should be included in the marital debt to be divided by both Deanne and Dale. In the final decree, the court found that no evidence existed to show that the money borrowed from Deanne’s parents had to be repaid.

Dale received the farm as part of the property settlement and Deanne received the Life Insurance policy which was valued at $10,000, a cash payment of $13,570 and half of the cooperative patronage credits worth $6,250. Deanne was unable to cash the insurance because the company was in rehabilitation proceedings.

By order of May 24,1993, the court ordered Dale to repay Deanne for the extra $156 she paid to her employer each month for the children’s health insurance premiums. Dale was to make these payments to Deanne on the first of each month until the final decree in the case was issued. Dale obtained health insurance for the children during the next month and did not reimburse Deanne for any premiums she paid after he obtained insurance. Deanne did not drop the children from her policy at work because of the court order. Attempts to get Dale to reimburse her for these payments were to no avail.

Deanne appeals the court’s final September 1993 findings, conclusions and decree.

Standards of Review

Much of the information we are asked to review here involves the court’s findings of fact as to the valuation of the net marital estate. Such findings with regards to the division of marital property are reviewed to see if they are clearly erroneous. Marriage of Danelson (1992), 253 Mont. 310, 833 P.2d 215. Discretionary rulings by the District Court are reviewed to ensure that the District Court did not abuse its discretion. Marriage of Scoffield (1993), 258 Mont. 337, 852 P.2d 664. We review a district court’s legal conclusions to see if the conclusions are correct. Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 803 P.2d 601.

I.

Did the District Court err in determining the net value of the marital estate?

A. Value of Crops

In setting a value for the marital estate, the District Court included in the list of marital liabilities, the balance owed on the operating note for the farm. However, the court did not take into account the value of the crop grown with the help of the money borrowed. Appellant argues that this is error. Respondent contends that the court was correct in adding the $84,000 owed on the operating loan to the list of marital liabilities.

Previous cases provide guidance for determining the effect of an operating loan on a property settlement. In the Marriage of Krum (1980), 188 Mont. 498, 614 P.2d 525, we considered the district court’s action of offsetting the balance of the operating loan with the value of the future proceeds of the farm’s crops. Krum, 188 Mont. at 503, 614 P.2d 525. We determined that the court was correct in subtracting the value of crops from the amount owed on the loan and attributing the remainder of the balance owed to the marital estate.

In the Halverson case, we approved the same accounting method of considering the crops as “fruit” of the operating loan:

The husband’s 1984 farming operation is easily accounted for. The husband had complete control and, fairly, should be held responsible for the 1984 results. Equitably, it is fair to charge him with the December 1984, Federal Land Bank payment for the use he made of the family farm in 1984. He, then, would also be entitled to the fruits of his 1984 crop efforts which he, in fact, had. (Emphasis added.)

Marriage of Halverson, 230 Mont. 226, 230, 749 P.2d 518, 520. Because of the timing of the dissolution in Halverson, the husband was attributed both the bank debt and the credit for the crops. In the present case, the dissolution occurred during the middle of the year and the bank debt was attributable to both parties as part of the marital estate. However, the court totally neglected to take into consideration the “fruits” of the operating loan.

We find persuasive the testimony presented by Deanne’s expert witness, Nicholas Bourdeau, a certified public accountant. He testified that when valuing a farm operation, the liability of a farm operating debt must be set against any value gained as a result of using the operating monies. He stated that: “[Y]ou either count all the assets this money [the operating loan] bought, or you don’t count any of the assets and don’t count any of the note.”

Bourdeau explained to the court that when he valued the marital estate, he only had one side of the equation in the figures he had been given or could discover. That side of the equation was the amount of the operating loan which the Neals obtained each year and repaid to the lending institution when the crops were sold. The current operating loan amounted to $84,000. What he did not have were values for the current year-end crop yield because the crop was still in the ground. The money gained from the crop would go to repay the operating loan.

On cross examination, Bourdeau was asked what the $36,947 figure in his valuation for crops meant. He explained that this figure had nothing to do with the crops in the ground or the enhanced value of the cattle — both attributable to the contentious $84,000 operating loan. The crop value listed on his report was the amount of crops on the property from a prior year’s harvest.

Bourdeau went on to state that it is very speculative and expensive when attempting to put a price on the value of crops in the ground and unharvested. Therefore, when he made his valuation of the marital property he had not speculated as to the value of the crops for this current year. Because he had no estimate as to the value of the crops, he preferred not to add the current operating loan figure of $84,000 on the liabilities side of the marital property valuation. He therefore excluded the $84,000 from the marital debts.

If courts are going to consider the operating loan debt of a farming operation, it is only a fair consideration to offset that debt with the value of the crops gained by way of that operating loan. This may sometimes mean an expensive proj ection of future value onto a farm’s crops. The alternative, and the one called for here, was to disallow an operating loan repaid from the current crop yield. It should have been an “either-or” situation. Either both operating loan and crops should have been considered or neither should have.

We hold the court erred in considering the operating loan shown in the court’s findings as an $84,000 liability to the marital estate. We reverse the District Court’s valuation of the marital estate and remand for further consideration of the operating loan/crop-yield equation.

B. Money from Deanne’s Parents

The trial court entered a temporary order in November, 1992, declaring that the $500 per month which Deanne needed to “borrow from her parents for her monthly living expenses shall be considered as a marital debt to be divided between the parties at the time of the final division of the marital estate.” However, when the trial court entered its final order, the court found that the money borrowed from her parents was not expected to be repaid and the trial court did not include the debt in its calculation of the marital estate.

Deanne argues that she is responsible to repay her parents the money that she continues to receive from them, in order that she can pay her monthly living expenses. In essence, Deanne argues that there is an implied contract with her parents that she repay the money borrowed. Dale contends that no evidence was presented dining these proceedings that shows that Deanne had an obligation to repay her parents the money she borrowed from them.

Contrary to Dale’s argument, the record contains evidence in the form of Deanne’s affidavit and testimony, both stating that she has only borrowed the money in order to meet her living expenses now. The record is devoid of any evidence offered by Dale that the money borrowed from Deanne’s parents was a gift. Thus, the record does not substantiate the court’s final holding on the debt to Deanne’s parents. We conclude, therefore, that the court correctly determined in its temporary order of 1992 that the $500 per month was a marital debt.

We hold that the District Court erred in excluding Deanne’s $500 a month payment from her parents as part of the marital liabilities. We reverse the court’s final decision on this debt and instruct the court to enter its original November 1992 ruling.

II.

Did the District Court abuse its discretion by refusing to consider newly discovered evidence regarding the cash value of the Kentucky Central Life Insurance policy?

The corut awarded Deanne the $10,000 Life Insurance policy held by her and Dale. However, Deanne has been unable to cash this policy because the company is in rehabilitation. Deanne argues that the notice was sent to the farm concerning the status of this company, but the information was not passed to her. Deanne argues that this is newly discovered evidence and that she is due a new trial because of it. Dale argues that the notification was sent to Deanne and not him and that Deanne had the responsibility to research the company at least five months before trial.

Granting a new trial is within the sound discretion of the District Court. Marriage of Keaster (1993), 259 Mont. 48, 853 P.2d 1191.

Section 25-11-102, MCA, states that the grounds for new trial are met if the party making the application for a new trial based on newly discovered evidence presents evidence that could not have been discovered prior to trial, using reasonable diligence. Newly discovered evidence is evidence that came to the moving party after trial, that was not undiscovered earlier through lack of diligence, that the materiality of the evidence is so great it would probably produce different results on retrial and that new evidence is not merely cumulative, nor tending only to impeach or discredit witnesses in the case. Cowles v. Sheeline (1993), 259 Mont. 1, 855 P.2d 93.

Contained within the evidence presented at trial is a document clearly indicating that the insurance company had Deanne’s name on the policy as beneficiary, but the document has the ranch address on it. The record is ambiguous as to whether she knew of the rehabilitation action before or after trial. Her affidavit claims that she only learned of this after trial. In reviewing the facts presented here, while we are concerned that the possibility exists that Deanne was not informed of rehabilitation, Deanne’s knowledge that rehabilitation was occurring would not have changed the outcome of the court’s distribution. Deanne admits that the policy is not worthless.

We conclude that the District Court did not abuse its discretion in failing to order a new trial based upon newly discovered evidence.

III.

Did the District Court abuse its discretion by amending the order requiring reimbursement for the children’s health insurance premiums?

Deanne claims that she was ordered by the court in its May 24, 1993 order to maintain health insurance for the children and to have Dale reimburse her for this payment. According to Deanne, she could not stop providing this service for the children without a court order. Dale’s attorney sent Deanne notification in June informing her that he had provided for the children’s health insurance. However, Deanne would not stop paying the monthly premiums for the children under her own policy until ordered to do so by the court.

A review of the record shows that both parties signed a legal stipulation stating word-for-word what later became the court’s May 24, 1993 order concerning the children’s health care. The court in essence merely gave the parties’ stipulation the force of law. A stipulation by the parties or judgment by consent is construed as a written contract and operates to end all controversy between the parties. First Bank (N.A.) Western Montana Missoula v. District Court for the Fourth Judicial District (1987), 226 Mont. 515, 737 P.2d 1132.

Despite this stipulation, Dale went ahead and obtained insurance for the children on his own, notified Deanne in June, and subsequently refused to reimburse her for the payments made by her following his notification. However, he did not notify the court of his unilateral purchase. Nor did Deanne petition the court for a change in its May order requiring her to provide insurance. As a result, Deanne carried the children on her insurance policy until the final decree issued in September of1993, relieved her of that responsibility. That decree made Dale solely responsible for the children’s health insurance.

Following the final decree, Deanne attempted to collect reimbursement from Dale for the insurance premiums that she had paid for the children between his notification in June and the court’s final decree in September. Dale refused to reimburse her. In a November 4,1993 order, (a response to Deanne’s Motion for New Trial and Dale’s Motion to Quash) the court further denied reimbursement to Deanne for the insurance paid for during the months between June and September. The court stated that Deanne should have suspended her policy on the children when Dale obtained health insurance for them.

The record does not contain either insurance policy in force between May and September of1993, so it is impossible to conclude that the duplicative nature of these policies also made them redundant. We have no idea what the parameters of each policy were. We do know from the record that Deanne’s policy contained a provision that the company pay for counseling for Deanne and the children. We do not know whether Dale’s policy had a similar provision. Therefore, just because the two policies existed simultaneously for six months does not mean that one of them was unused or unneeded.

After a careful review of both law and facts, we conclude that the court, pursuant to § 40-4-208, MCA, has no jurisdiction to retroactively modify its own order providing support (health insurance) for the children. The court cannot require Deanne to act in opposition to its own order of May 24, 1993, despite Dale’s unilateral action of providing insurance himself before the court made its final decree.

We hold that the court abused its discretion by amending its order to finally refuse reimbursement to Deanne for the children’s health insurance premiums.

Reversed and remanded for further consideration of the operating loan\crop-yield equation and for issuance of a court order requiring Dale Neal to reimburse Deanne Neal for the money she paid for health insurance premiums for the children between May of1993 and September of 1993. We also reverse the court’s final decision concerning Deanne’s debt to her parents and instruct the court on remand to enter its original November 1992 ruling.

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


source: Caselaw Access Project

author: CHIEF JUSTICE TURNAGE JUSTICE TRIEWEILER

license: Public Domain

text:
    JERRY MARTIN & ASSOCIATES, INC., Plaintiff and Appellant, v. DON’S WESTLAND BULK, Defendant and Respondent.
    No. 93-573.
    Submitted on Briefs August 18, 1994.
    Decided November 17, 1994.
    51 St.Rep. 1119.
    267 Mont. 464.
    884 P.2d 795.

      For Appellant: Stephen A. Doherty, Monteau, Guenther & Decker, Great Falls.
    For Respondent: Loren J. O’Toole, O’Tbole & O’Toole, Plentywood.
   CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Jerry Martin and Associates, Inc., appeals from a decision of the Fifteenth Judicial District Court, Daniels County, denying its motion for an order that it be allowed to levy and execute judgment against Donald Becker’s personal assets. We affirm.

As reframed by this Court, the dispositive issue is whether the District Court erred by denying Martin’s motion for an order which would allow it to levy and execute against Donald Becker’s personal assets to collect on a default judgment entered against Don’s West-land Bulk.

On February 8,1985, the United States Bankruptcy Court for the Southern District of California rendered a default judgment in favor of Nucorp Liquidated Trust against Don’s Westland Bulk. There is no evidence in the District Court record that Becker was ever served or was a party to these proceedings. The default judgment was subsequently assigned to Jerry Martin and Associates, Inc. (Martin). The judgment was duly entered in the United States District Court in Great Falls, Montana, and in the District Court of the Fifteenth Judicial District, Daniels County, Montana. Eight years after the entry of the default judgment, Martin attempted to collect the judgment by sending a Writ of Execution to the Daniels County Sheriff. The Sheriff returned the writ unsatisfied, informing Martin that there were no assets or bank accounts located in Daniels County belonging to Don’s Westland Bulk.

Martin then sent Becker a series of interrogatories in aid of execution of judgment. Becker admitted owning Don’s Westland Bulk. Becker stated that Don’s Westland Bulk was a sole proprietorship. Don’s Westland Bulk is not a registered business name in Montana nor does it maintain bank accounts or own assets.

Martin moved the District Court to order that the judgment against Don’s Westland Bulk be satisfied by allowing it to levy and execute against Becker’s personal assets. The motion was accompanied by a memorandum which in essence argued that Don’s Westland Bulk and Donald Becker are the same entity, and thus the default judgment should be satisfied from Becker’s personal assets. Martin cited no legal authority for this proposition. The court denied Martin’s motion. Martin’s motion for reconsideration was likewise denied. Martin appeals.

Did the District Court err by denying Martin’s motion for an order which would allow it to levy and execute against Becker’s personal assets to satisfy a default judgment entered against Don’s Westland Bulk?

Martin presents several different arguments which it claims entitles it to levy and execute against Becker personally. First, Martin claims that § 25-5-104, MCA, supports its right to levy against Becker’s assets. Section 25-5-104, MCA, states:

Action against a business association. When two or more persons associated in any business transact such business under a common name, whether it comprises the names of such persons or not, the associates may be sued by such common name, the summons in such cases being served on one or more of the associates; and the judgment in the action shall bind the joint property of all the associates in the same manner as if all had been named defendants and had been sued upon their joint liability. [Emphasis added.]

The statute by its terms is clearly inapplicable. Martin provides no case law or authority for its contention that this statute should be applied to sole proprietors. We conclude that § 25-5-104, MCA, does not entitle Martin to levy and execute against Becker’s personal assets to recover on a default judgment against Don’s Westland Bulk.

Martin also argues that §§ 30-13-201(1), 201(2), and 215, MCA, prevent Becker from avoiding levy and execution on his personal assets. Section 30-13-201, MCA, includes the following definitions:

(1) “Assumed business name” means any business name other than the full, true, and correct name of a person.
(2) “Person” means any individual, partnership, corporation, or other association.

Section 30-13-215, MCA, states:

Effect of transacting business without certificate. No person or persons conducting or transacting business in this state without an effective certificate of registration of an assumed business name or having any interest therein may maintain any suit or action in any of the courts of this state under such name.

Martin contends that since Becker transacted business under the unregistered assumed business name of Don’s Westland Bulk, he is liable for the default judgment entered against that company. Again, Martin presents no case law or authority which interprets these statutes in such a manner. Section 30-13-215, MCA, prevents an unregistered business from filing suit under its unregistered name. Nothing in the statute indicates that an individual should be held accountable for a default judgment entered against an unregistered business. We conclude that § 30-13-215, MCA, does not make Becker personally liable for a default judgment entered against Don’s Westland Bulk.

Martin also argues that Don’s Westland Bulk and Donald Becker are actually one and the same. Martin insists that there has never been a true legal entity known as Don’s Westland Bulk; rather this name was merely a front for the individual, Donald Becker. Martin claims that, similar to piercing the corporate veil, this Court should view Becker and Don’s Westland Bulk as one and the same entity. Martin cites various cases that deal with piercing the corporate veil. Hando v. PPG Industries, Inc. (1989), 236 Mont. 493, 771 P.2d 956; Meridian Minerals Co. v. Nicor Minerals, Inc. (1987), 228 Mont. 274, 742 P.2d 456. However, Martin presents no authority for its contention that this Court should “pierce the entity veil.” Piercing is used to eliminate an individual’s corporate liability protection in cases where one establishes that the shareholders are the alter ego of the corporation. Piercing is an equitable remedy and applies only to prevent fraud or achieve equity. See Jody J. Brewster, Comment, Piercing the Corporate Veil in Montana, 44 Mont. L. Rev. 91 (1983). The theory of piercing the corporate veil is inapplicable against a sole proprietorship. Martin admits that Don’s Westland Bulk is an unregistered sole proprietorship, not a corporation. We find no merit in Martin’s piercing the entity veil argument.

Martin also argues that the “misnomer” rule derived from Rule 15(c), M.R.Civ.P., should apply. The misnomer rule allows a party to amend a complaint to name a defendant after the running of the applicable statute of limitations. The amended complaint “relates back” to the date of the original complaint for statute of limitation purposes. LaForest v. Texaco, Inc. (1978), 179 Mont. 42, 45-46, 585 P.2d 1318, 1320.

The misnomer rule does not apply to this case for several reasons. First, the misnomer rule applies where the correct party is sued, but the name in the complaint is merely misspelled or a subsidiary corporation is named rather than the parent corporation. Wentz v. Alberto Culver Co. (D. Mont. 1969), 294 F.Supp. 1327. The misnomer rule does not apply to situations where an entirely new party would be added to the litigation by allowing the amendment. LaForest, 585 P.2d at 1321. Most importantly, the misnomer rule allows for amendment of complaints, not judgments. Rule 15(c), M.R.Civ.P., from which the misnomer rule is derived, states:

Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading. An amendment changing the party against whom a claim is asserted relates back if the foregoing provision is satisfied and, within the period provided by law for commencing the action against the party to be brought in by amendment, that party (1) has received such notice of the institution of the action that the party will not be prejudiced in maintaining a defense on the merits, and (2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against the party. [Emphasis added.]

This rule clearly deals with amending pleadings, not judgments. If an amendment is allowed to a complaint, the party added to the complaint may still defend the case on its merits. Lien v. Murphy, Corp. (1982), 201 Mont. 488, 656 P.2d 804. Amendment of a default judgment provides the new party with no such opportunity. Martin cites no authority for its proposition that we should apply the misnomer rule to judgments as well as pleadings. We conclude the misnomer rule is inapplicable to the amendment of judgments.

Finally, Martin argues that the District Court had a duty to consider the evidence presented and determine whether Becker and Don’s Westland Bulk were one and the same. Once again, Martin gives no authority for this proposition and fails to explain to this Court why this duty exists. A default judgment was entered against Don’s Westland Bulk, not against Donald Becker. Martin cites no authority by which the Montana District Court can amend the judgment of the Federal Bankruptcy Court to include Becker. We will not amend a default judgment to cure a deficient pleading in the bankruptcy court eight years after the default judgment has been entered.

We affirm the District Court’s holding denying Martin’s motion to levy and execute against the assets of Donald Becker in order to collect on a default judgment entered against Don’s Westland Bulk.

JUSTICES HARRISON, GRAY and NELSON concur.

JUSTICE TRIEWEILER

dissenting.

I dissent from the majority opinion.

The majority’s principle criticism of Martin’s suggestion that Donald Becker and Don’s Westland Bulk be treated as one and the same is that Martin has failed to provide authority for doing so. Therefore, this opinion provides that authority.

In A-Z Equip. Co. v. Moody (Ill. App. Ct. 1980), 410 N.E.2d 438, the plaintiff sued Ken Moody Masonry Company in order to recover rental payments due for certain leased equipment and damages resulting from the alleged conversion of that equipment. The summons was served on a secretary at Ken Moody’s place of business. When Moody failed to appear and answer the complaint, a default judgment was entered. Subsequent to the entry of judgment, it was learned that defendant was not a corporation, but a sole proprietorship owned and operated by Kenneth Moody. Pursuant to plaintiff’s motion, the judgment was amended to describe the defendant as Kenneth Moody d/b/a Ken Moody Masonry Company.

After execution began on Moody’s property, he filed a motion to quash the service of summons. That motion was granted by the trial court, which held that the default judgment was, thereafter, void ab initio. The Appellate Court of Illinois reversed the trial court order for the following reason:

[W]here a summons is served upon defendant personally, and the circumstances are such as to indicate that he is the person intended to be sued, then he is subject to the judgment, even though the process and the judgment do not refer to him by his correct name. (Janove v. Bacon (1955), 6 Ill.2d 245, 249-50, 128 N.E.2d 706.) Regarding the issue presented in this matter, our Supreme Court has stated:
“Names are nothing. The gist of the matter is, were the parties in interest actually served.... [I]fthe writ is served on a party, by a wrong name, intended to be sued, and he fails to appear and plead the misnomer in abatement, and suffers judgment to be obtained, he is concluded, and in all future litigation may be connected with the suit or judgment by proper averments; and when such averments are made and proved, the party intended to be named in the judgment is affected as though he were properly named therein.” Pond v. Ennis (1873), 69 Ill. 341, 344-45.
We feel it evident that this defendant was aware that Ken Moody and the Ken Moody Masonry Company were one and the same individual. Accordingly, the trial court erred when it granted defendant’s motion to quash the summons and vacate the default judgment.

A-Z Equip., 410 N.E.2d at 440-41 (emphasis added).

In Hughes v. Cox (Ala. 1992), 601 So. 2d 465, the plaintiffs filed a complaint naming “Hughes Realty of Clanton, Alabama” as a defendant. Default judgment was entered against that defendant, and at the hearing on damages the caption was amended to substitute Gearlene Hughes d/b/a Hughes Realty as the proper party defendant. Although Gearlene Hughes had been served with the original complaint, she was not served with the amended complaint. Nevertheless, subsequently the district court entered default judgment against her. Hughes’ motion to set aside the default judgment was denied, and that order was affirmed on appeal to the Supreme Court of Alabama.

On appeal, Hughes contended that because the action was not filed against a suable entity, but only against a trade name under which she did business, the complaint did not name her as a defendant, and that because she was never served with the amended complaint, the district court never obtained jurisdiction over her, and therefore, the judgment was void. Hughes relied on a prior decision by the Alabama Court in May v. Clanton (1922), 95 So. 30, in which the court held that a judgment entered against the trade name of a sole proprietorship cannot be enforced by execution against the sole proprietor.

The Alabama court, however, reversed May for the reason that:

The holding in May, however, is contrary to the principles of pleading established by the Alabama Rules of Civil Procedure. “These rules shall be construed to secure the just, speedy and inexpensive determination of every action.” Rule 1(c).... The rules are designed to prevent preclusion of a viable claim or defense because of “technical inaccuracy in pleading.” Prescott v. Thompson Tractor Co., 495 So.2d 513, 516 (Ala.1986).

Hughes, 601 So. 2d at 468.

The Alabama Court held that since Hughes had personally received service of the complaint naming her sole proprietorship as a defendant, she had received fair notice that a claim was being filed against her. Citing other Alabama decisions, the Alabama Court concluded that:

By the Court’s reasoning in Nicrosi, a complaint or a judgment against the Hughes Realty Company would be a complaint or a judgment against whatever entity was doing business in that name....
... The change in the present case was also only “a matter of description... which [did] not affect the identity of the parties sought to be described, but only [gave] accuracy and certainty to it.”
... Under the reasoning of the Nicrosi line of cases, the failure to serve Hughes with the amended complaint did not deprive the court of jurisdiction over her. The amendment did not change the nature of the suit, nor did it add any new parties to the action.
... Having considered the question fully, we affirmatively hold that a judgment entered against a trade name is a judgment against the individual doing business under that trade name, at least so long as the individual was personally served with the complaint. Absent a statute to the contrary, an individual has the right to be known by any name that he chooses, and a judgment entered for or against that individual in either an assumed name or a trade name is valid. See 49 C.J.S. Judgments § 75, p. 197 (1947).

Hughes, 601 So. 2d at 469, 470, 471 (emphasis added; citation omitted; bracketed material in original).

The Hughes decision cites cases from other jurisdictions for its conclusion. They include Aman Collection Service, Inc. v. Burgess (Mo. Ct. App. 1981), 612 S.W.2d 405; Janove v. Bacon (Ill. 1955), 128 N.E.2d 706; Hartley v. Jerry’s Radio & Electric Shop (S.D. 1951), 48 N.W.2d 925; McCall v. Kliros (Ga. Ct. App. 1947), 45 S.E.2d 72; Eslinger v. Herndon (Ga. 1924), 124 S.E. 169. All of these decisions dealt with issues similar to the one presented in this case and arrived at a conclusion opposite to that reached by the majority.

Likewise, Donald Becker has the right to be known by, and deal with other businesses, under any name that he chooses. However, the courts of this State, and other jurisdictions, have a right to hold him accountable for his acts under those trade names that he assumes. I would conclude, as did the Supreme Court of Alabama, that a judgment entered against Becker’s trade name is a judgment against Becker, at least so long as he was personally served with the complaint.

The majority cites no authority for its conclusion that even though Don’s Westland Bulk and Donald Becker are identical entities, a judgment against Don’s Westland Bulk cannot be enforced against Donald Becker. The majority opinion exalts form over substance which, as pointed out by the Supreme Court of Alabama, is the opposite of the result intended by our Rules of Civil Procedure.

The record in this case has not been fully developed because there was no evidentiary hearing prior to the District Court’s order denying Martin’s motion permitting it to execute against Becker. I would reverse the order of the District Corut and remand this case for further proceedings to determine whether Becker was, in fact, personally served prior to entry of default judgment against Don’s Westland Bulk in the Bankruptcy Corut for the Southern District of California. In the event that he was, I would hold that that judgment can be enforced against him personally by execution on his assets.


author: JUSTICE TRIEWEILER

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. PETE GEORGE JOHNSTON, Defendant and Appellant.
    No. 94-083.
    Submitted on Briefs August 11, 1994.
    Order Amending Opinion, but Otherwise Denying Rehearing Dec. 6, 1994.
    Decided October 27, 1994.
    51 St.Rep. 1078.
    267 Mont. 474.
    885 P.2d 402.

      For Appellant: Jennifer Wendt Bordy, Attorney at Law, Bozeman.
    For Respondent: Hon. Joseph P. Mazurek, Attorney General, Cregg W. Coughlin, Assistant Attorney General, Helena; Mike Salvagni, Gallatin County Attorney, Marty Lamhert, Deputy County Attorney, Bozeman.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

Defendant Pete George Johnston was charged and convicted in the Eighteenth Judicial District Court, Gallatin County, of accountability for burglary, in violation of §§ 45-2-302 and 45-6-204, MCA. Johnston was sentenced to ten years in prison with all time suspended, based on certain conditions. Johnston appeals from the conviction. We reverse.

The issues on appeal are:

1. Did the District Court err when it admitted evidence of a prior misdemeanor forgery conviction?

2. Is the evidence sufficient to support defendant’s conviction of accountability for burglary?

FACTUAL BACKGROUND

On May 29,1993, at approximately 1:20 a.m., an individual heard glass breaking at the First Lutheran Church in Bozeman and notified the Bozeman Police Department. Police officers surrounded the church and ordered anyone inside the church to come out. Daniel Maggard emerged and was arrested for burglary at 2:02 a.m. The officers searched the church but did not find anyone else. While searching Maggard, the officers found a vehicle key.

One and one-half hours after the burglary was reported and forty minutes after Maggard’s arrest, while continuing their search for possible suspects, police officers heard a car horn and saw a flash of light. Two police officers approached the car and discovered Johnston sitting in the passenger seat with the lights and motor off. Johnston would not emerge when asked to do so by the officers, and they had to open the car door and physically remove him. The officers stated that Johnston smelled strongly of alcohol and emerged from the car in his socks. The vehicle key which Maggard had been carrying fit this car’s ignition. Johnston was arrested at 2:48 a.m.

Maggard was charged with burglary. Johnston was charged by information on June 11, 1993, with accountability for burglary in violation of §§ 45-2-302 and 45-6-204, MCA.

At trial, Johnston testified that he passed out in the car when Maggard was driving and was awakened by the police officers. Johnston stated that he became cold in the car and attempted to turn on the dome light to search for the key to turn the car on and must have accidently sounded the horn.

On September 21, 1993, just nine days before trial, the State provided notice pursuant to State v. Just (1979), 184 Mont. 262, 602 P.2d 957, and State v. Matt (1991), 249 Mont. 136, 814 P.2d 52, that it would offer evidence of a prior conviction for misdemeanor forgery.

The State’s Just notice stated that it would offer the conviction for misdemeanor forgery for the following purposes:

1. Plan: The evidence is offered to show that defendant has, in the past, planned to pass checks stolen from Bozeman area churches with Maggard. It was defendant’s plan to serve as a lookout for Maggard when he committed the burglary of the First Lutheran Church on May 29,1993.
2. Knowledge: The evidence is offered to prove that defendant was aware Maggard was committing a burglary of the First Lutheran Church on May 29,1993 when defendant was first discovered in Maggard’s car parked near the church.

Johnston objects to the Just notice, for the following reasons:

1. The State asserts in its Just notice that the evidence of prior crimes is offered to show a plan that defendant had, in the past, planned to pass stolen checks. It does not establish that he planned to actually commit the burglaries with Maggard, nor that he planned to act as a lookout for Maggard while Maggard committed the burglaries.

2. The State offers the evidence to prove defendant knew that Maggard was burglarizing the First Lutheran Church. However, “[t]he mere knowledge that a crime is about to be committed does not make one an accomplice.” State v. Nordahl (1984), 208 Mont. 513, 517, 679 P.2d 241, 243 (citing State v. Harvey (1979), 184 Mont. 423, 431, 603 P.2d 661, 666). Furthermore, “[m]ere presence at the scene of the theft, or even failure to interfere with a theft which someone is aware is taking place, is insufficient to hold one accountable as a principal to the crime.” State v. Hart (1981), 191 Mont. 375, 390, 625 P.2d 21, 29 (citing People v. Durham (Cal. 1969), 449 P.2d 198). Thus, Johnston argues that even if he knew of the crime, which he claims he did not, failure to prevent the crime is insufficient to hold him accountable.

3. Johnston states that the evidence does not meet the modified Just requirement that the other crimes or acts must be similar to the crime charged. He previously pled guilty to misdemeanor forgery as a matter of convenience, and that offense is not similar to felony burglary.

4. Johnston asserts that the probative value of the evidence is substantially outweighed by its prejudice. He pled guilty to misdemeanor forgery because he was. living in North Dakota at the time and, for convenience, decided not to pursue the matter to trial. The fact that he pled guilty, however, is extremely prejudicial.

The State, on the other hand, argues that the District Court did not abuse its discretion by admitting evidence of Johnston’s prior misdemeanor forgery conviction. The State argues that there is a similarity between misdemeanor forgery and felony accountability for burglary. The State claims that this Court has held that a prior act need not be identical to the offense committed, it must only be of sufficient similarity to warrant its admission. State v. Ramstead (1990), 243 Mont. 162, 167, 793 P.2d 802, 805; State v. Randall (1989), 237 Mont. 271, 274, 772 P.2d 868, 870.

ISSUE 1

Did the District Court err when it admitted evidence of a prior misdemeanor forgery conviction?

When we review whether a district court properly allowed evidence of a prior conviction, we will uphold the district court unless the district court abused its discretion. State v. Gollehon (1993), 262 Mont. 293, 301, 864 P.2d 1257, 1263 (citing State v. Crist (1992), 253 Mont. 442, 833 P.2d 1052).

To insure that prior crimes are not used to prove a bad character, this Court has established a four-part test to determine the admissibility of evidence of other crimes or acts in criminal prosecutions. Matt, 814 P.2d at 56. The four elements of that test are: (1) the other crimes, wrongs, or acts must be similar; (2) the other crimes, wrongs, or acts must not be remote in time; (3) the evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show that he acted in conformity with such character; but may be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident; (4) although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusing the issues, misleading of the jury, considerations of undue delay, waste of time, or needless presentation of cumulative evidence. Matt, 814 P.2d at 56. This rule modified the Just rule, which originally set forth the basis for admission of other crimes, wrongs, or acts.

The following procedural protections apply as part of the modified Just rule:

1. Evidence of other crimes, wrongs, or acts may not be received unless there has been written notice to the defendant that such evidence is to be introduced. The notice to the defendant shall specify the other crimes, wrongs, or acts to be admitted, and the specific rule 404(b) purpose or purposes for which it is to be admitted.

2. At the time of the introduction of such evidence, the trial court shall explain to the jury the purpose of the evidence and shall admonish it to consider the evidence for only such purposes.

3. In its final charge, the court shall instruct the jury in unequivocal terms that such evidence was received only for the limited purposes earlier stated and that the defendant is not being tried and may not be convicted for any offense except that charged. Matt, 814 P.2d at 56.

This case involves the prior crime of misdemeanor forgery. According to § 45-6-325(1), MCA, a person commits the offense of forgery when, with the purpose to defraud, the person knowingly:

(a) without authority makes or alters any document or other object apparently capable of being used to defraud another in a manner that it purports to have been made by another or at another time or with different provisions or of different composition;
(b) issues or delivers the document or other object knowing it to have been thus made or altered;
(c) possesses with the purpose of issuing or delivering any such document or other object knowing it to have been thus made or altered....

On the other hand, § 45-6-204, MCA, provides that a person commits the offense of burglary if he knowingly enters or remains unlawfully in an occupied structure with the purpose to commit an offense therein. The crimes of burglary and forgery are distinct and are quite different in their respective elements. We held in Matt, 814 P.2d at 57, that “[t]he linchpin for determining whether a single instance of prior conduct is sufficient... is relevancy based on similarity.” We held in State v. Keys (1993), 258 Mont. 311, 316, 852 P.2d 621, 624, that “[t]he determination of similarity depends on whether the conduct has some relevance to place an issue in dispute.” Here, misdemeanor forgery and felony accountability for burglary are not similar, and as such, the prior crime was not relevant. We conclude that the prior misdemeanor forgery is not sufficiently similar to the charge of accountability for burglary to satisfy the first element of the modified Just rule and that the District Court erred by admitting the evidence of a prior crime.

ISSUE 2

Was the evidence sufficient to support defendant’s conviction of accountability for burglary?

When we review a conviction challenged on sufficiency of the evidence, we will uphold the district court if, after reviewing the evidence in a light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. State v. Bower (1992), 254 Mont. 1, 6, 833 P.2d 1106, 1110 (citing State v. Riley (1992), 252 Mont. 469, 830 P.2d 549). In this case, we consider the record without evidence of Johnston’s prior forgery conviction, which we have held should have been excluded.

Johnston contends that the evidence was not sufficient to support his conviction of accountability for burglary because a rational trier of fact could not have found the essential elements ofthe crime beyond a reasonable doubt.

Under § 45-2-302(3), MCA, a person is legally accountable for the conduct of another when

either before or during the commission of an offense with the purpose to promote or facilitate such commission, he solicits, aids, abets, agrees, or attempts to aid such other person in the planning or commission of the offense.

There is no evidence that Johnston aided Maggard before, during, or after the burglary. The driver’s seat of the car was positioned to suggest that Maggard had driven to the scene. Maggard possessed the key, and Johnston was found on the passenger side of the car. Johnston did not abet Maggard during the burglary. He briefly honked the horn and flashed the fights after Maggard was already in custody. The State fails to establish how this, in any way, aided or abetted Maggard in the commission of the crime.

The only thing that linked Johnston to the crime was the fact that he was found near the scene of the crime. The police discovered Johnston across the street from the burglarized church sitting in a parked car. The State argues that the evidence was sufficient to convict Johnston of accountability for burglary and that any rational trier of fact could have found the essential elements of accountability for burglary beyond a reasonable doubt.

We have held that mere presence at the crime scene is not enough to establish criminal responsibility. “[We have] long adhered to the principle that more than mere presence at the scene of a crime is necessary to establish criminal responsibility.” State ex rel. Murphy v. McKinnon (1976), 171 Mont. 120, 125, 556 P.2d 906, 909. See also State v. Bradford (1984), 210 Mont. 130, 683 P.2d 924; State v. Hart (1981), 191 Mont. 375, 625 P.2d 21. Furthermore, mere knowledge that a crime is about to be committed does not make one an accomplice or accountable for that crime. We held in Nordahl that a true accomplice is

‘one who knowingly, voluntarily and with common intent with the principal offender unites in the commission of a crime .... One may become an accomplice by being present and joining in the criminal act, by aiding and abetting another in its commission, or not being present, by advising and encouraging its commission; but knowledge and voluntary actions are essential in order to impute guilt.’

Nordahl, 679 P.2d at 243 (quoting State v. Harmon (1959), 135 Mont. 227, 236, 340 P.2d 128, 132).

We conclude that the evidence was not sufficient to support the conviction of felony accountability for burglary.

The judgment of the District Court is reversed and this case is remanded for further proceedings consistent with this opinion.

CHIEF JUSTICE TURNAGE, JUSTICES GRAY, HARRISON, WEBER, NELSON and HUNT concur.

ORDER

[December 6, 1994]

On November 14, 1994, respondent State of Montana moved this Court, pursuant to Rule 34, M.R.App.P., for rehearing based on respondent’s contention that this Court’s opinion issued on October 27, 1994, misinterpreted facts which were material to the Court’s decision.

The State argues that the Court’s decision is factually incorrect in the following respects:

1. In its recitation of the chronology of events on the evening of defendant’s arrest;

2. In its statement that “officers later discovered that Maggard had stolen some blank checks from the First Lutheran Church, and charged him with burglary;” and

3. In its statement that the State offered evidence of defendant’s prior forgery conviction.

After thoroughly reviewing the record, we conclude that:

1. This Court’s opinion correctly recites the chronology of events on the evening of defendant’s arrest and that there are no contradictory findings entered by the District Court.

2. The statement on page three of this Court’s opinion to the effect that officers discovered that blank checks had been stolen is incorrect. However, it has no bearing on the issues in this case, nor the Court’s decision.

3. This Court’s opinion did not state that the State offered evidence of defendant’s forgery conviction. It states that the State’s pretrial notice indicated that it would offer such evidence and that on appeal the State argued that admission of the prior forgery conviction would have been proper. Actually, the State offered evidence of those facts which formed the basis for defendant’s forgery conviction. Those acts included passing forged checks. However, while that distinction is not made in the opinion, the rationale for the court’s holding and the result in this case, would be the same. The lack of similarity between defendant’s former conduct and the crimes charged in this case is further evident from the fact that, as correctly noted by the State, blank checks were not taken in this case.

For these reasons,

IT IS HEREBY ORDERED:

1. The prior opinion of this Court issued in this case on October 27, 1994, is amended on page three of the Slip Opinion by deleting the following language:

Officers later discovered that Maggard had stolen some blank checks from the First Lutheran Church, and charged him with burglary.

And substituting therefore the following language:

Maggard was charged with burglary.

2. The State’s petition for rehearing is otherwise DENIED.

/s/J.A. Tumage, Chief Justice

/s/ John Conway Harrison, Justice

/s/ Karla M. Gray, Justice

/s/William E. Hunt, Sr., Justice

/s/ Terry Trieweiler, Justice

/s/James C. Nelson, Justice

/s/ Fred J. Weber, Justice


text:
    STATE COMPENSATION INSURANCE FUND, Petitioner and Respondent, v. DONALD E. CHAPMAN, Respondent and Appellant, and RICHARD J. PYFER, Respondent and Appellant.
    No. 94-010.
    Submitted September 20, 1994.
    Rehearing Denied Dec. 22, 1994.
    Decided October 27, 1994.
    51 St.Rep. 1070.
    267 Mont. 484.
    885 P.2d 407.

      For Appellants: John C. Douhek (argued), Small, Hatch, Doubek & Pyfer, Helena, (for Pyfer); Donald Chapman, pro se, Alberta, Canada.
    For Respondent: Leo S. Ward (argued), Browning, Kaleczyc, Berry & Hoven, Helena.
    For Amici Curiae: Michael P. Heringer, Brown, Gerbase, Cebull, Fulton, Harman & Ross, Billings, (for Montana Defense Trial Lawyers Association); James G. Edmiston, 1H, Attorney at Law, Billings, (for Montana Trial Lawyers Association).
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

On January 23,1991, the Workers’ Compensation Court for the State of Montana entered judgment for the claimant, Donald E. Chapman, in which it concluded that he was permanently totally disabled and entitled to total disability benefits. As part of that judgment, Richard J. Pyfer, Chapman’s attorney, was awarded attorney fees and costs in the amount of $16,927. On July 23,1992, the State Compensation Mutual Insurance Fund, which was responsible for those benefits, fees, and costs, filed a petition for emergency hearing in the Workers’ Compensation Court in which it sought an order terminating Chapman’s benefits and requiring reimbursement of those benefits, fees, and costs paid pursuant to the Court’s January 23,1991, judgment. On September 1, 1993, the Workers’ Compensation Court found that Chapman had been awarded permanent total disability benefits based on false testimony, and ordered that Chapman reimburse the State Fund. The Workers’ Compensation Court also ordered Pyfer to reimburse the State Fund for his attorney fees and costs. Pyfer appeals that part of the decision which orders him to reimburse the State Fund for his attorney fees and costs. We reverse the judgment of the Workers’ Compensation Court.

The following issue is dispositive on appeal:

Did the Workers’ Compensation Court have authority to set aside its previous judgment and order claimant’s attorney to repay attorney fees and costs?

FACTUAL BACKGROUND

Chapman was injured during the course of his employment as a long-haul truck driver on January 14, 1981, when he was involved in a motor vehicle accident. He received serious injuries to his left leg, head, neck, and back.

Due to his injuries, Chapman received total disability benefits from the State Fund until they were terminated on September 9,1988.

On January 23, 1991, the Workers’ Compensation Court ordered that Chapman’s total disability benefits be reinstated and that his attorney fees and costs be paid, based on Chapman’s testimony that he could not work due to injuries received in the accident. By the time of the trial which led to this appeal, the benefits paid by the State Fund pursuant to the 1991 judgment totalled $46,378.90. Pyfer was paid $16,927 for attorney fees and costs.

The Workers’ Compensation Court held a hearing to consider the State Fund’s Emergency Petition on December 8 and 9,1992. In support of its emergency petition, the State Fund offered evidence that during the times Chapman claimed to have been disabled he performed the duties of a long-haul truck driver on a regular basis and earned substantial amounts of money. However, the State Fund offered no evidence that Pyfer was at any time aware of Chapman’s work activities.

In fact, in response to discovery requests from Pyfer, the State Fund acknowledged that “it had no claim or assertion of fraud or conspiracy against... Pyfer” and that it only named Pyfer “as a party respondent ... as a result of a legal question regarding whether he should be obligated to pay back fees which had been paid to him for his representation of Chapman.”

In its September 1,1993, decision, the Workers’ Compensation Court concluded that it had jurisdiction to entertain the State Fund’s emergency petition pursuant to §§ 39-71-2905 and -2909, MCA; that Chapman is not totally disabled and was not at the time of his previous hearing; and that the benefits previously awarded were based on Chapman’s false testimony regarding his physical condition and employment status. As a result, Chapman was ordered to pay back all total disability benefits retroactive to December 1988 when the evidence established he had returned to work. Pyfer was ordered to pay back the amounts he received for attorney fees and costs, in spite of the court’s finding that he did nothing improper, and was as misled by Chapman as anyone else.

The Court also took judicial notice that a criminal complaint was filed on July 21,1992, in which Chapman was charged with theft of workers’ compensation benefits, in violation of § 45-6-301(2)(b), MCA. On April 20, 1993, Chapman entered a guilty plea pursuant to North Carolina v. Alford (1970), 400 U.S. 25, 91 S. Ct. 160, 27 L. Ed. 2d 162. Chapman was sentenced to ten years at the Montana State Prison, with all prison time suspended on the condition that he pay full restitution to the State Fund, plus an administrative fee, and a surcharge of $20.

DISCUSSION

Did the Workers’ Compensation Court have authority to set aside its previous judgment, and order claimant’s attorney to repay attorney fees and costs?

The Workers’ Compensation Court’s conclusion that it had jurisdiction to entertain the State Fund’s petition was a conclusion of law. We review conclusions of law to determine if they are correct. Stordalen v. Ricci’s Food Farm (1993), 261 Mont. 256, 258, 862 P.2d 393, 394 (citing Martelli v. Anaconda-Deer Lodge County (1993), 258 Mont. 166, 168, 852 P.2d 579, 580).

In this case, the State Fund’s petition sought an order setting aside a judgment that had been entered 18 months earlier. In response to Pyfer’s appeal, the State Fund argues that there were two sources of the Workers’ Compensation Court’s authority to do so: (1) specific statutory authorization, and (2) inherent equitable powers.

As statutory authority, the State Fund sets forth §§ 39-71-2905, -2909, -204(2) (1979), MCA, and § 25-11-102, MCA. However, we conclude for the following reasons that none of the statutes relied on provide a basis for setting aside judgments in the Workers’ Compensation Court.

Section 39-71-2905, MCA, gives the court initial authority to resolve disputes between the parties regarding disability benefits. That authority was effectively exercised by the court when it entered judgment for Chapman on January 23, 1991. This statute provides no authority for setting aside a judgment entered by the court beyond whatever time period is provided for in the court’s rules or other rules of procedure that may be applicable.

Section 39-71-2909, MCA, upon which the Workers’ Compensation Court primarily relied, gives the court continuing authority to “review, diminish or increase” an award of benefits based upon a finding that the “disability of the claimant has changed.” Here, there was no allegation that the disability of the claimant had changed. In fact, the State Fund alleged, and the court specifically found, that Chapman’s condition had not changed but that: “Donald E. Chapman is not permanently totally disabled and was not permanently totally disabled as defined by statute at the time of his initial hearing.” (Workers’ Compensation Court Conclusion of Law No. 2.)

Section 39-71-2909, MCA, is a “change in condition” statute, and serves a limited purpose as set forth in Larson’s, Workman’s Compensation Law § 81.32(a) where the author states:

In a change-of-condition reopening proceeding, the issue before the Board is sharply restricted to the question of extent of improvement or worsening of the injury on which the original award was based. If the original award held that there was no connection between the accident and claimants permanent disability, there is nothing to reopen, and claimant cannot retry the issue of work-connection through the device of a reopening petition. Conversely, when the employee reopens to show increased disability, the insurance carrier cannot raise the basic issue of liability. In short, no matter who brings the reopening proceeding, neither party can raise original issues such as work-connection, employee or employer status, occurrence of a compensable accident, and degree of disability at the time of the first award.

(Emphasis added.)

Section 39-71-204, MCA, had been amended by the time of this trial, and in its present form clearly applies only to the authority of the Department of Labor and Industry. However, the State Fund argues that § 39-71-204, MCA, is substantive, rather than procedural, and therefore, pursuant to Buckman v. Montana Deaconess Hospital (1986), 224 Mont. 318, 321, 730 P.2d 380, 382, the form of the law in effect at the time of Chapman’s injury controls. That would be § 39-71-204, MCA (1979), which provides:

(1) Except as provided in subsection (2), the division shall have continuing jurisdiction over all its orders, decisions, and awards and may, at any time, upon notice, and after opportunity to be heard is given to the parties in interest, rescind, alter, or amend any such order, decision, or award made by it upon good cause appearing therefor.
(2) The division or the workers’ compensation judge shall not have power to rescind, alter, or amend any final settlement or award of compensation more than 4 years after the same has been approved by the division. Rescinding, altering, or amending a final settlement within the 4-year period shall be by agreement between the claimant and the insurer. If the claimant and the insurer cannot agree, the dispute shall be considered a dispute for which the workers’ compensation judge has jurisdiction to make a determination. Except as provided in 39-71-2908, the division or the workers’ compensation judge shall not have the power to rescind, alter, or amend any order approving a full and final compromise settlement of compensation.
(3) Any order, decision, or award rescinding, altering, or amending a prior order, decision, or award shall have the same effect as original orders or awards.

However, assuming, without agreeing, that the State Fund’s “substantive versus procedural” argument is correct, we conclude that neither does the 1979 version of § 39-71-204, MCA, authorize the Workers’ Compensation Court to set aside its judgments over two and one-half years after they are entered. The only direct authority to rescind awards provided by § 39-71-204, MCA(1979), is granted to the Division. The only reference in that statute to the Workers’ Compensation Court is in the context of limitations on its authority to review settlements or awards approved by the Division. Judgments of the Workers’ Compensation Court are not, and werenot at thattime, approved by the Division, and therefore, we conclude that the statute was not applicable to the facts in this case.

Section 25-11-102, MCA, is a statutory rule of civil procedure pertaining to newly discovered evidence which is not normally applicable to the Workers’ Compensation Court. Although, as will be later discussed, we may, in the absence of guidance from the Workers’ Compensation Court’s own rules, look to the Rules of Civil Procedure for guidance, we will not pick and choose those which we consider. In this case, any motion to set aside the judgment based on newly discovered evidence was untimely pursuant to Mont. R. Civ. P. 60(b)(2).

Although we conclude that the Workers’ Compensation Court had no specific statutory authority to set aside its judgment based on a petition filed 18 months after the judgment was entered, we agree that under some circumstances the court may have inherent equitable power to do so. However, even the court’s equitable power is not without limitation and must be subject to predictable rules if the finality of judgments is to mean anything.

Although the Workers’ Compensation Court is not bound by the Rules of Civil Procedure, we have looked to them in the past for guidance (see Moen v. Peter Kiewit & Sons, Co. (1982) 201 Mont. 425, 434, 655 P.2d 482, 486) and in the absence of statutory authority in the Workers’ Compensation Act, do so on this occasion to define the court’s equitable authority to set aside judgments.

We begin with Rule 60(b)(2) which limits motions to set aside judgments based on fraud to 60 days from the entry of judgment and the residual clause of Rule 60(b) which limits independent actions beyond 60 days to claims that there was fraud upon the court, or extrinsic fraud.

Extrinsic fraud affects the court itself. ‘We have held repeatedly that neither perjured testimony nor false or fraudulent allegations used in obtaining a judgment constitute extrinsic fraud.” Traders State Bank of Poplar v. Mann (1993), 258 Mont. 226, 236, 852 P.2d 604, 610 (citing Brown v. Jensen (1988), 231 Mont. 340, 348, 753 P.2d 870, 875; Salway v. Arkava (1985), 215 Mont. 135, 142, 695 P.2d 1302, 1307).

Intrinsic fraud, on the other hand, is fraud that represents an inherent risk to an adversarial proceeding. We have held that “intrinsic fraud upon the court, that is representations or concealments made during the court proceedings, assuming they are false or fraudulent, are ... not grounds for reopening a decree or judgment,” by independent actions. Lance v. Lance (1981), 195 Mont. 176, 180, 635 P.2d 571, 574 (citing Miller v. Miller (1980), 189 Mont. 356, 365, 616 P.2d 313, 319).

In this case, the findings of the Workers’ Compensation Court established, at most, intrinsic fraud, and the Workers’ Compensation Court may not set aside its own judgment based on a petition filed more than 60 days after it was entered for intrinsic fraud.

For these reasons, we conclude that the Workers’ Compensation Court lacked statutory authority and equitable authority to set aside its prior judgment two years after it was entered.

However, contrary to the State Fund’s argument, this does not mean that it or any other insurers are without remedies in cases involving fraud. There are both criminal and civil remedies available in this State to punish fraud and recover benefits which are fraudulently obtained.

In this case, a complaint was filed on July 21,1992, against Chapman charging him with the offense of theft (common scheme), a felony, in violation of § 45-6-301(2)(b), MCA. It was alleged that Chapman, as part of a common scheme, purposely or knowingly obtained control by deception over funds, in excess of $300, belonging to the State of Montana, Division of Workers’ Compensation, and purposely or knowingly used the funds in such a manner as to deprive the owner of the property, in violation of § 45-6-301(2)(b), MCA. A criminal judgment was entered pursuant to Chapman’s Mford plea which provided that “the defendant shall pay full restitution plus an administrative handling fee...”

Furthermore, the State Fund could file a civil action for fraud against Chapman to recover benefits paid if the necessary elements can be proven. The State Fund apparently decided not to pursue this remedy.

Finally, the State Fund may petition the Workers’ Compensation Court pursuant to § 39-71-2909, MCA, for a prospective reduction or termination of benefits when it can be proven that a claimant’s disability status is no longer as it was found to be in a prior proceeding.

This decision merely denies the State Fund a fourth remedy to duplicate the previous remedies.

It is important to both employers and employees that when an employee recovers benefits by misrepresenting his or her physical condition, the State have the tools to punish that person and recover those benefits.

It is equally important that at some point in time innocent third persons who have provided services to injured working people be able to rely on the finality of the Workers’ Compensation Court’s judgments. Otherwise, there will be fewer people willing to provide services to injured working people in the future. The law as set forth in this opinion is an effort to strike that balance.

Pyfer, as the State Fund admits, is an innocent party who should be able to rely on the finality and integrity of the court’s judgment, so long as it was not procured by extrinsic fraud, and so long as there is no statutory authority to set it aside.

We conclude that the Workers’ Compensation Court erred when it set aside its previous judgment.

The judgment of the Workers’ Compensation Court is reversed and this case is remanded for entry of judgment dismissing the State Fund’s Emergency Petition.

CHIEF JUSTICE TURNAGE, JUSTICES HARRISON, GRAY, HUNT, NELSON and WEBER concur.

      . Although an attorney in this case, it could be the claimant’s doctor, therapist, or rehabilitation provider in the next case.


author: JUSTICE HUNT JUSTICE TRIEWEILER

text:
    IN RE THE MARRIAGE OF CATHERINE A. McNELLIS, Petitioner and Respondent, and ROBERT F. McNELLIS, Respondent and Appellant.
    No. 94-177.
    Submitted on Briefs August 25, 1994.
    Decided November 21, 1994.
    51 St.Rep. 1125.
    267 Mont. 492.
    885 P.2d 412.

      For Appellant: Thomas F. Dowling, Dowling Law Firm, Helena.
    For Respondent: John Hollow, Attorney at Law, Helena.
   JUSTICE HUNT

delivered the Opinion of the Court.

Robert (Bob) McNellis appeals the judgment of the First Judicial District Court, Lewis and Clark County, dissolving the parties’ marriage and distributing the marital estate. We affirm.

The issues on appeal are:

1. Did the District Court properly estop Bob from changing his position at trial regarding the value of the recycling machine investment?

2. Was the District Court’s valuation of the marital assets clearly erroneous?

3. Was the District Court’s distribution of the marital estate clearly erroneous?

Bob and Cathy were married on December 29,1967, in Fort Knox, Kentucky. About two years later, the couple moved from Kentucky to Indiana, where Bob worked for Corning Glassworks and obtained a masters degree in management. Bob was subsequently transferred to Pennsylvania. During these early years of the marriage, Cathy taught both high school and grade school, substitute taught, and worked as an office manager. In 1975, Bob left Coming Glassworks, and the couple moved to Helena where Bob obtained employment with the Federal Reserve Bank.

Three children were bom of the marriage. During the marriage, Cathy did most of the housecleaning and cooking and was the primary caretaker of the children. She also attended classes at Carroll College, and received a degree in accounting in 1983. After a nine year absence from the work force, she returned to work part-time as an accountant/office manager. By 1986 or 1987, her part-time job evolved into a full-time position. At the time of the petition for dissolution, she earned an annual salary of $39,600.

Bob’s employment with the Federal Reserve Bank ended in 1989. During his employment with the bank, Bob invested money in both a Federal Reserve Thrift Plan and a Retirement Plan. At the time of the petition for dissolution, the Retirement Plan was worth $76,720, and the Thrift Plan was worth about $103,000, less an outstanding loan balance of about $13,000.

After his discharge from the bank, Bob worked as a consultant for Independent Bank Service Corporation and as an adjunct professor of economics at Carroll College. During his semester at Carroll College, Bob developed a plan for a private business venture called Advanced Industrial Concepts and Coating (AIC).

AIC consists of two separate entities: a corporation (AIC, Inc.) and a partnership (AIC Properties). AIC, Inc., deals with the actual coating of products. AIC Properties deals with the acquisition and maintenance of the property on which AIC, Inc., is located. Cathy and Bob brought in Gary and Kathy Dagel, and in June 1990, the four became stockholders of AIC, Inc., and partners in AIC Properties. Each couple contributed cash or property in the amount of $45,000 as start-up capital. According to Bob’s testimony, the finances of the partnership and the corporation were not carefully separated, and frequently intermingled.

Cathy and Bob borrowed $34,000 from the Thrift Plan and loaned that amount to AIC, Inc., to put toward the purchase of the Steffick Building located on North Main Street in Helena. The partnership obtained a mortgage and acquired the building. At the time of the hearing, an outstanding balance of approximately $186,000 remained on the building loan.

In September 1991, Bob signed a five year lease agreement with Dwayne Anderson, owner of Recycle Technologies of Billings, for a recycling machine known as a “cash can.” Bob paid $30,000 for the lease. The cash can is shaped like a large soda can and typically is set up in parking lots of busy supermarkets. People insert recyclable aluminum cans into the machine which electronically keeps track of the weight of the cans and then pays out a certain amount of money according to the weight. In theory, the operator of the cash can generates income from the subsequent sale of the aluminum cans to a central recycling facility. According to Anderson’s testimony, the plan was for Bob to recover his initial investment of $30,000, plus additional profits, over the term of the five year lease.

In April 1992, the Dagels gave notice that they were withdrawing from AIC, Inc., and AIC Properties. The McNellises and the Dagels entered into arbitration in November 1993. They reached an agreement whereby Bob would pay them $55,000 for their one-half interest, provided that Bob could obtain financing on or before February 9,1994. The agreement provided that if Bob could not raise the money to buy the Dagels out, the Dagels would be allowed to sell AIC, including the Steffick Building, and retain their one-half of the proceeds. If they had to sell the building, the agreement provided that the initial asking price would be $334,000, and if it did not sell, the asking price could be incrementally reduced, but in no event less than $300,000. The agreement further provided that the proceeds of the sale would be used to pay off the mortgage, to cover any realtor’s commission and title insurance, and to repay the balance of the Thrift Plan loan owed to the McNellises.

Cathy petitioned for dissolution of the marriage on December 11, 1992. The District Court heard the matter on November 24,1993. At the hearing, both parties testified to the value of the marital assets and debts. At issue on appeal is the value of three particular items— Recycle Technology, AIC Properties, and the Federal Reserve Thrift Plan — and the final division of the marital estate.

The District Court issued findings of fact, conclusions of law, and order on January 7,1994, and entered judgment on January 18,1994, distributing the marital assets and debts as follows:

Cathy Bob
Assets
(1) Residence $117,500
(2) Condominium Contract for Sale 11,000
(3) Recycle Technology $30,000
(4) Household Goods 7,700
(5) 1988 Buick 3,500
(6) 1984 Ford 1,000
(7) 1987 Oldsmobile 1,500
(8) Federal Reserve Thrift Plan 90,344
(9) Galusha Retirement 18,366
(10) Prudential Life Insurance Policy 6,136
(11) Federal Reserve Retirement 76,720
(12) AIC, Inc. 0
(13) AIC Properties 81,000
(14) AIC Loan 13,430
Tbtal Assets $255,546 $202,650
Percent of Tbtal 56% 44%
Debts
(1) Mortgage on Residence 82,000
(2) Post-Separation Credit Card debt 4,392
(3) Property Taxes 1,000
(4) Valley Bank debt 8,100
(5) AIC Credit Line ??
(6) Bank America debt ??
(7) First Bank debt 6,500
(8) Pre-separation Credit Card debt 1,958
Tbtal Debts $87,392 $16,558
Percent of Tbtal 84% 16%
NET DISTRIBUTION $168,154 $186,092
PERCENT OF TOTAL 47% 53%

On January 28, 1994, Bob moved the District Court to amend its findings and conclusions. The District Court denied the motion. Bob filed notice of appeal on April 11,1994.

ISSUE 1

Did the District Court properly estop Bob from changing his position at trial regarding the value of the recycling machine investment?

When this Court reviews a district court’s conclusions of law, we are not bound by the district court’s conclusions and are free to reach our own. In re Marriage of Danelson (1992), 253 Mont. 310, 317, 833 P.2d 215, 219. Our determination on appeal is simply whether the district court correctly or incorrectly applied the law. Danelson, 833 P.2d at 220 (citing Steer, Inc. v. Dept. of Revenue (1990), 245 Mont. 470, 803 P.2d 601).

The record reveals that on November 22,1993, two days before the hearing, Bob filed supplemental answers to Cathy’s first set of combined discovery requests. Interrogatory No. 26 instructed Bob to “fflist the items that you believe comprise the marital estate, assigning values to each item and stating the basis therefore in each case.” Among the fist of marital assets, Bob included the Recycle Technologies cash can investment and assigned a value of $30,000 to it. Bob also placed a value of $30,000 on the cash can investment on two other occasions: On May 17, 1993, in Attachment No. 5 to his answer to Cathy’s first set of combined discovery requests; and on July 30,1993, in his supplemental answers.

When Bob took the stand at the hearing, however, he testified that the value of the cash can was only $3000. He stated, “[w]e’re not going to get [$] 30,000 out of it so I would take it for $3,000 and try to chase it down, see if I couldn’t work something out of it.” Bob also called Dwayne Anderson, owner of Recycle Technologies, to testify to the value of the cash can investment. Anderson stated that, if the equipment were sold as scrap metal, its salvage value “could be $2500.” However, Anderson stated that this “would be a bad idea.” Furthermore, Anderson testified that, although no profit had been made from the venture, “being the eternal optimist, I would like to think there is prospect of [profit] at some point.” Prior to Anderson’s testimony as to the value of the investment, Cathy’s attorney objected, stating that “[i]f the intent of his testimony is to establish a value, [Bob is] precluded by his own admissions ... in which he signed answers to interrogatories stating the value of this investment was $30,000.”

In its findings of fact and conclusions of law, the District Court concluded that “Bob is judicially estopped from changing the valuation of [the cash can investment] some two days after filing his interrogatory with the Court,” and placed a value of $30,000 on the cash can investment. We agree.

“Under well established concepts of law, a party cannot take one position during pretrial discovery and then change his position at the time of trial or on appeal.” Montana Rail Link v. Byard (1993), 260 Mont. 331, 343, 860 P.2d 121, 128; Plouffe v. Burlington Northern, Inc. (1986), 224 Mont. 467, 474, 730 P.2d 1148, 1153. Section 26-1-601(1), MCA, provides that the following is a conclusive presumption:

[T]he truth of a declaration ... of a party, as against that party in any litigation arising out of such declaration ... whenever he has, by such declaration ... intentionally led another to believe a particular thing true and to act upon such belief.

In Byard, this Court upheld the hearing examiner’s decision to exclude testimony which Montana Rail Link (MRL) sought to introduce but which contradicted MRL’s pretrial answers to Byard’s interrogatory requests. At no time prior to trial did MRL seek to modify its answer or indicate in any way that it would present contrary testimony. Likewise, at no time prior to trial in the instant case did Bob seek to modify the stated value of $30,000, nor did he indicate prior to trial that he would present testimony contrary to his pretrial position. Although the District Court, sitting without a jury, allowed Bob and Dwayne Anderson to testify contrary to Bob’s pretrial answers, it correctly refused to consider that testimony in determining the cash can’s value and correctly concluded that Bob was estopped from changing his position at trial.

ISSUE 2

Was the District Court’s valuation of the marital assets clearly erroneous?

In addition to the valuation of the cash can investment, Bob attacks the District Court’s valuation of AIC Properties at $81,000 and the Federal Reserve Thrift Plan at $90,344. Citing In re Marriage of Hall (1987), 228 Mont. 36, 740 P.2d 684, Bob asserts that the proper

standard of review of distribution and valuation of marital property is that the Supreme Court will reverse a District Court only upon a showing that the District Court has acted arbitrarily or has committed a clear abuse of discretion, resulting in either instance in substantial injustice.

In 1992, however, this Court changed its standard of review regarding a district court’s findings of fact in the division of marital estates from an abuse of discretion standard to a clearly erroneous standard. In re Marriage of Sacry (1992), 253 Mont. 378, 381, 833 P.2d 1035, 1037; In re Marriage of Danelson (1992), 253 Mont. 310, 317, 833 P.2d 215, 219; In re Marriage of Taylor (1993), 257 Mont. 122, 125-26, 848 P.2d 478, 480. Therefore, we review the district court’s findings of fact to determine whether those findings are clearly erroneous. Danelson, 833 P.2d at 219; Taylor, 848 P.2d at 480.

This Court has established several principles by which we review a district court’s valuation of marital property. It is well settled law that “[w]hen there is a dispute over property in a marriage dissolution, the district court may assign any value that is within the range of values presented into evidence.” Taylor, 848 P.2d at 481 (citing In re Marriage of Kramer (1987), 229 Mont. 476, 747 P.2d 865). “However, if the values are widely conflicting, then the district court must state its reasons for determining a certain value.” Taylor, 848 P.2d at 481 (citing In re Marriage of Glass (1985), 215 Mont. 248, 697 P.2d 96).

Recycle Technologies Cash Can Investment

As discussed under Issue 1, the District Court properly estopped Bob from changing his position as to the value of the cash can investment at trial. In its findings of fact and conclusions of law, the District Court clearly set forth its reasons for rejecting Bob’s proposed valuation of the cash can and for placing a value of $30,000 on it. We conclude that the District Court’s valuation of the cash can investment was proper.

AIC Properties

Bob asserts that the District Court incorrectly valued AIC Properties at $81,000. He argues on appeal that, in arbitration proceedings between the McNellises and the Dagels, “an arms length value of $55,000.00 was arrived at as the value of the Dagel one-half interest ...” and based on that “arms length” settlement, the McNellises’ one-half interest for the purposes of marital property distribution is also $55,000. At trial, Bob also testified, after extensive calculations, that the McNellises’ share was worth “between 38,500 and 54,000, 54,190, to be exact.”

The District Court succinctly summarized the positions of the parties and made the following finding of fact:

This partnership owns the building in which AIC, Inc., operates. ... The building has been appraised at $334,300 .... Parts of the building are used by AIC in its industrial coating business, and other parts are leased out to other tenants. The rent paid by the tenants makes the mortgage payment due on the property.
The parties owe $185,000 to the Small Business Administration on the building. Further ... AIC Properties owes about $13,000 to Bob. Catherine feels that the AIC Properties Partnership should be valued at $81,000. This takes the appraised value of the building ($334,300) and subtracts from it the SBA loan of $185,000, the $13,000 owed to Bob, and the $55,000 owed to the Dagels. Bob, on the other hand, contends that AIC is worth on $55,000. He makes his calculations by taking the increase in value of the building over its book value, which totals $81,000. He then adds in the parties[’] investment of $29,000 to come up with $110,000. Bob would then subtract the debt owed to the Dagels ($55,000), to come up with the $55,000 figure. The Court, however, finds that this approach ignores the market value of the building. Therefore, the Court values AIC Properties at $81,000.

We conclude that the District Court set forth sufficient reasons for adopting Cathy’s valuation of AIC Properties, and therefore, the value of $81,000 is not clearly erroneous.

Federal Reserve Thrift Plan and AIC Debt

Bob states that the District Court set aside all of the Thrift Plan to Cathy and valued it at $90,344. He contends that when the AIC loan is added back to the Thrift Plan, it will total $103,000, and therefore, the District Court incorrectly valued the Thrift Plan. The District Court distributed the Thrift Plan as follows:

Pursuant to Petitioner’s Exhibit 7, the current balance that the parties have in the thrift plan is $90,344. There is a $13,430 loan against this account that is being paid by AIC. The Court values the thrift plan at $90,344 and awards it to Catherine. The loan payments from AIC of $13,430 shall be Bob’s.

If the remaining balance of the loan is added to the current balance of the Thrift Plan, the total would be $103,774; however, the District Court clearly severed the loan from the Thrift Plan, divided the total $103,744 into one unit of $90,344 and one unit of $13,430, and awarded these units respectively to Cathy and Bob. Bob’s contention that the $13,430 debt that AIC owes the McNellises “is not an ‘asset’ and is in fact a liability which Bob must pay to himself’ is entirely without merit. The debt is not personally owed by Bob; it is owed by AIC Properties, a separate legal entity. The District Court’s award severs the loan from the Thrift Plan, and when AIC repays the loan, those payments will go to Bob, and not to Cathy. We conclude that the District Court’s valuation of the Thrift Plan was proper.

ISSUE 3

Was the District Court’s distribution of the marital estate clearly erroneous?

“Our review of marital property divisions is whether the district court’s findings of fact are clearly erroneous.” In re Marriage of Nordberg (1994), 265 Mont. 352, 877 P.2d 987; In re Marriage of Davies (1994), [266 Mont. 466], 880 P.2d 1368. “If substantial credible evidence supports the court’s findings and judgment, this Court will uphold the district court’s decision unless there is an abuse of discretion.” Nordberg, 877 P.2d at 991. Substantial evidence is defined as “evidence that a reasonable mind might accept as adequate to support a conclusion; it consists of more than a mere scintilla of evidence but may be somewhat less than a preponderance.” Davies, [266 Mont. 466], 880 P.2d at 1372, (citing Barrett v. Asarco Inc. (1990), 245 Mont. 196, 200, 799 P.2d 1078, 1080).

Distribution of a marital estate is determined by the guidelines in § 40-4-202(1), MCA, which provides in part:

In a proceeding for dissolution of marriage ... the court, without regard to marital misconduct, shall... finally equitably apportion between the parties the property and assets belonging to either or both, however and whenever acquired and whether the title thereto is in the name of the husband or wife or both.

It is a well-settled rule that an equitable distribution does not require a 50/50 distribution of the marital estate. Davies, [266 Mont. 466], 880 P.2d at 1372-73; Nordberg, 877 P.2d at 992; In re Marriage of Bowman (1987), 226 Mont. 99, 734 P.2d 197.

Bob argues that the District Court “gave complete credence to Cathy’s testimony regarding value of the Marital Estate and adopted her Proposed Findings of Facts and Conclusions.” The record does not support this contention. The District Court rejected Cathy’s proposed findings and conclusions regarding child support and ordered Bob to pay an amount substantially less than her request. The District Court also rejected Cathy’s proposed valuation of the family residence. An examination of the findings and conclusions, reveals that the District Court carefully considered the evidence and testimony presented and made a reasoned valuation and distribution of each asset and liability. We conclude that the District Court’s determinations are supported by substantial credible evidence and are not clearly erroneous.

Bob further argues that the District Court erroneously “set aside to Cathy nearly all of the assets having a hard cash value.” This clearly is not the case, particularly with respect to Bob’s award of the Federal Reserve Retirement Plan and AIC Properties. Moreover, while the District Court awarded Bob roughly 44 percent of the total assets of the marital estate, the District Court distributed to him only 16 percent of the total marital debt. We conclude that the District Court’s distribution of the marital estate is not clearly erroneous.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES GRAY and NELSON concur.

JUSTICE TRIEWEILER

specially concurring.

I concur with the majority’s conclusions and reasoning in their discussion of Issues 2 and 3.

I specially concur with the majority’s holding under Issue 1, but disagree with the legal rationale for that holding.

I do not agree that Bob was precluded by judicial estoppel from offering testimony at trial which contradicted statements that he made prior to trial. I especially disagree that he was precluded from doing so by § 26-1-601(1), MCA, which I conclude is inapplicable to the facts of this case.

However, the basis for Bob’s appeal from the District Court’s valuation of his recycling machine investment is that there was no evidence to support the value arrived at by the District Court. I disagree.

Pursuant to Rule 801(d)(1)(A), M.R.Evid., prior inconsistent statements of a witness are admissible as substantive evidence. See Rule 801(d), Commission Comment. In this case, Bob’s supplemental answer to Interrogatory No. 26, which was filed with the District Court prior to trial, was a prior statement inconsistent with his trial testimony and provided sufficient substantive evidence to support the District Court’s finding that Bob’s lease with Recycle Technologies was worth $30,000.

For these reasons, I specially concur with the conclusion of the majority that the judgment of the District Court should be affirmed.


text:
    JEFF and NANCY ROE, Plaintiffs and Appellants, v. CORBIN WATER USERS’ ASSOCIATION, Defendant and Respondent.
    No. 94-165.
    Submitted on Briefs October 5, 1994.
    Decided November 21, 1994.
    51 St.Rep. 1134.
    267 Mont. 503.
    885 P.2d 419.

      For Appellants: Linda J. Garofola, Reynolds, Motl, Sherwood and Wright, Helena.
    For Respondent: Harold H. Harrison, Harrison and Murphy, Helena.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

Appellants Jeff and Nancy Roe filed a complaint on July 29,1992, and amended their complaint on March 3,1993, in the Fifth Judicial District Court in Jefferson County, requesting permanent and temporary access to water from the Corbin Water System for both of their properties. On August 3,1993, the District Court granted respondent Corbin Water User’s Association’s (CWUA), motion for summary judgment. The Roes appeal. We reverse.

The following issue is dispositive on appeal:

Did the District Court err when it granted CWUA’s motion for summary judgment?

FACTUAL BACKGROUND

The Roes reside on and own two adjacent lots in Corbin, Montana. They have a home on one lot and a trailer on the adjoining lot, which they lived in while they renovated their home. Due to water pollution caused by local hard rock mining operations, the public drinking water in Corbin became contaminated, forcing the Department of State Lands to install a new water system. When this new water system was installed, the Roes were left out of the group of persons designated to receive water from the new system, but were later included.

CWUA, a non-profit Montana Corporation, operates the new water system and has a duty to furnishwater to its members and to other users according to its by-laws. CWUA approved installation of the Roes’ two water lines, but has only allowed them to use one water line.

CWUA’s by-laws state, among other things, that “each dwelling constitutes one (1) membership and one (1) hookup ....” Dwelling is not defined and there does not appear to be a specific limitation of one hookup per dwelling. The by-laws also state, in Article 7, Section 1, that a membership in CWUA may be transferred.

Montana Mining owns a water hookup that is not in use at the present time, and had agreed to transfer it to the Roes. However, CWUA refused to allow this transfer, stating that its by-laws require approval by all of its members to transfer an unused water hookup. CWUA also stated that its by-laws authorize only one hookup per person. However, there are other individual members of CWUA who have more than one water hookup.

On July 29, 1992, the Roes filed their complaint alleging that CWUA’s actions: breached its by-laws; constituted negligence; and that these actions breached a fiduciary duty owed to all of its members, including the Roes. In their complaint, the Roes requested permanent and temporary relief, which included access to the Corbin water system for both of their properties. On August 5,1992, CWUA filed a motion for summary judgment in which it alleged that there was no genuine issue of material fact and that it was entitled to judgment as a matter of law.

On March 3, 1993, the Roes filed an amended complaint adding the Department of State Lands as a defendant. (The Roes later dismissed the Department of State Lands from their lawsuit). CWUA then filed a motion to strike. The District Court, during a telephonic pretrial conference, advised the parties that both pending motions were dismissed.

On July 15, 1993, CWUA filed a second motion for summary judgment. On August 3, 1993, the District Court granted CWUA’s motion.

DISCUSSION

Did the District Court err when it granted CWUA’s motion for summary judgment?

The standard of review of a district court’s summary judgment ruling is identical to that of a trial court’s. It is a de novo review. Cooper v. Sisters of Charity (1994), 265 Mont. 205, 206-07, 875 P.2d 352, 353 (citing Minnie v. City of Roundup (1993), 257 Mont. 429, 431, 849 P.2d 212, 214). We have held that “[s]ummary judgment is proper only when no genuine issue of material fact exists and the moving party is entitled to a judgment as a matter of law. Rule 56(c), M.R.Civ.P.” Spain-Morrow Ranch, Inc. v. West (1994), 264 Mont. 441, 444, 872 P.2d 330, 331-32.

In its order granting CWUA’s motion for summary judgment, the District Court stated that CWUA complied with its by-laws and that:

The original by-laws, contained no specific restrictions on the simultaneous use of double hook-ups by a single member or the transfer of memberships. This does not mean, however, that the Association did not have the discretion or authority to restrict simultaneous use or transfers of membership.

We conclude, however, that the District Court improperly decided disputed issues of fact.

CWUA’s present by-laws, enacted in 1990, allow for memberships in the CWUA to be transferred. Article 9, Section 1, of CWUA’s by-laws states that “[t]he membership shall be transferable, in the event of an increase in membership fees, and the recipient will pay the difference.”

CWUA argues that even though its memberships are transferable, it has the right to limit the total number of hookups and to require 100 percent member approval of new hookups. Thus, CWUA argues that it can require the Roes to obtain the approval of CWUA members for the hookup to the Roes’ second lot.

It appears, however, that CWUA has overlooked important language in its own by-laws which state that the 100 percent vote of the members is required for a new service hookup, not for the transfer of unused hookups. Article 7, Section 4, of CWUA’s by-laws discusses water and hookup limits. This section states in part that:

The Association limits the total number of hook-ups to the system not to exceed the existing original seventeen (17) hook-ups. If any unused hook-ups are put into service, the service dues will be due in advance in a semi annual or annual payment, which is the present method of payment. Any new service or hook-up by the Association may only be added with a 100 (one hundred) percent of the vote of the members.

CWUA refers to the Roes’ request for a second hookup as a new hookup. This is inaccurate. The hookup that the Roes requested involves an unused hookup which would be transferred to them from Montana Mines — not a new hookup. According to the by-laws, it should be put into service after the Roes pay service dues. An unused, transferred hookup does not require authorization of 100 percent of CWUA’s members.

However, there remain factual issues regarding what constitutes a dwelling and whether there is any specific limitation on the number of hookups per dwelling. Therefore, there appear to be genuine issues of material fact, and CWUA, as the moving party, is not entitled to judgment as a matter of law. As we stated in Edgewater Town House Home Owners Ass’n v. Holtman (1993), 256 Mont. 182, 185, 845 P.2d 1224, 1226, “[s]ummary judgment was not intended, nor can it be used, as a substitute for existing methods in the trial of issues of fact.” (Citing Hull v. D. Irvin Transport Ltd. (1984), 213 Mont. 75, 81, 690 P.2d 414, 417.)

We conclude that the District Court erred in granting summary judgment.

The judgment of the District Court is reversed and this case is remanded for further proceedings consistent with this opinion.

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