author: JUSTICE WEBER

text:
    JAMES FIEDLER, Plaintiff and Respondent, v. JOSEPH FIEDLER, Defendant and Appellant, and JOSEPH FIEDLER, Plaintiff on Counterclaim and Appellant, v. JAMES FIEDLER AND JUDITH FIEDLER, Defendants on Counterclaim and Respondents.
    No. 93-452.
    Submitted on Briefs April 14, 1994.
    Decided August 11, 1994.
    51 St.Rep. 691.
    266 Mont. 133.
    879 P.2d 675.

      For Appellant: Robert T. Cummins and James P. Greenan, Helena.
    For Respondent: Michael G. Barber and Donald L. Ostrem, Great Falls.
   JUSTICE WEBER

delivered the Opinion of the Court.

James Fiedler brought this action in 1982 for dissolution of a partnership and for an accounting for purposes of distribution. Joseph Fiedler appeals from the Order of the District Court of the Eighth Judicial District, Cascade County, which divided and apportioned real and personal partnership property between him and J ames Fiedler pursuant to the findings of a Special Master. We affirm.

The issues presented for review are restated as follows:

I. Did the District Court err in finding that real property located in Montana is a partnership asset?

II. Did the District Court err in finding that real property located in Wisconsin is a partnership asset?

III. Did the District Court comply with the requirements of Rule 53(e)(2), M.R.Civ.R?

IV. Did the District Court err in determining that Joseph and James Fiedler operated the Taylor Ranch Corporation as a part of the partnership?

James and Joseph Fiedler are twin brothers who began a farming and ranching business in approximately 1950, operating as a family partnership under the name of “Fiedler Ranch Partnership.” Testimony indicated that other family members were also involved, although all are now deceased. These family members were their older brother, William Frances Fiedler, and their parents, Frank and Katherine Fiedler.

The partnership farmed and raised sheep and cattle on properties in Judith Basin County near Stanford, Montana known as the Home Place, the Campbell Ranch, the Vann Ranch, Sleepy Hollow, 160 acres known as the “Isolated 160” and the Taylor Ranch. The Taylor Ranch was purchased with partnership funds in 1954 and was originally formed as a corporation with shares issued to James and Joseph Fiedler and their wives. The Taylor Ranch Corporation has since been dissolved by the Secretary of State and the Fiedler brothers have operated it as part of the partnership. Other property which the brothers inherited from their parents and which is located in Wisconsin has been leased with the income from the leases deposited in partnership accounts and included as income on partnership tax returns.

James and Joseph Fiedler operated the cattle operation together until 1968. Joseph Fiedler has since raised sheep on the Home Place and Sleepy Hollow while James has managed the cattle operation on the remaining properties. Joseph Fiedler testified at trial that he deposited income from the sheep operation in an account in a Lewis-town bank under the name of Fiedler Ranch. He also testified that this was a joint account with access by both himself and James Fiedler. James Fiedler testified that he had no knowledge of this account and no documentation was provided relative to this account despite requests from the Special Master appointed by the court.

James Fiedler placed funds derived from the cattle operation primarily in a joint account under the name of Fiedler Ranch Partnership in the Basin State Bank in Stanford, Montana. James Fiedler’s cattle operation was extremely successful and the money deposited in this account primarily came from the cattle operation. Both brothers made draws from this account. Testimony provided that in the period from January 1978 up to the time of the trial, Joseph Fiedler withdrew $455,343 from this account, $289,189 more than James Fiedler withdrew.

The relationship between the twin brothers became strained as years passed. In 1982, James Fiedler filed a complaint asking for dissolution of the partnership and an accounting for distribution purposes. Joseph Fiedler filed an answer and a counterclaim also asking for an accounting for distribution purposes. The parties agreed to the appointment of a Special Master to determine the final disposition of the partnership assets. On September 2, 1983, the District Court appointed Jack Stevens as Special Master.

Mr. Stevens was recommended by the appellant Joseph Fiedler and approved by both Joseph and James Fiedler. In preparing his Special Master’s Report, Mr. Stevens relied on George Campanella, a Certified Public Accountant who had prepared partnership tax returns for over twenty years as the accountant for the partnership; James Volk, a certified real estate appraiser; and Bass Auction Company, which conducted the equipment appraisals. Mr. Stevens also considered the recommendations of Barry Dutton, a natural resource consultant hired by Joseph Fiedler after Joseph Fiedler disagreed with Mr. Stevens’ preliminary findings.

The Special Master was asked to determine equitable distributions of partnership assets. Mr. Stevens proposed two methods for distributing real property and other assets. The first method — preferred by the Special Master and chosen by the District Court — essentially maintained the operations of both brothers and provided additional cash to compensate Joseph Fiedler for the additional real estate apportioned to James Fiedler. The second proposal awarded equal land values to each brother with more cash awarded to James Fiedler.

Mr. Stevens testified that among his reasons for recommending the first proposal were the comparative stewardship abilities of the parties over the preceding twenty years, and he specifically noted James Fiedler’s management of the property which created a large amount of assets for the partnership as contrasted to the relatively poor fiscal management of other assets by Joseph Fiedler. Other testimony, including that of a banker who had done business with James Fiedler concerning partnership business for over twenty years, provided that James Fiedler was regarded as a sound financial manager and profitable rancher.

Despite requests, Joseph Fiedler did not provide documentation to the Special Master to support his testimony about his sheep operation. Other evidence presented at trial indicates that James Fiedler has successfully managed the vast majority of the real estate owned by the parties for more than twenty years, that there was no mismanagement on the part of James Fiedler involving any of the partnership assets and that there had been no commingling of partnership and personal assets by James Fiedler as had been alleged by Joseph Fiedler. Testimony also indicated that Joseph Fiedler and his wife Olivia had not filed income tax returns since 1982 and that they might need additional cash to cover their tax liability. This was one of the reasons stated by the District Court to support the adoption of the Special Master’s preferred proposal.

Other facts will be provided as necessary throughout this opinion.

STANDARD OF REVIEW

This case involves areview of findings of fact and conclusions of law. For conclusions of law, the standard of review is whether the district court correctly interpreted the applicable law. Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474, 803 P.2d 601, 603. This Court applies a clearly erroneous standard using a three-part test to review a district court’s findings of fact. The Court first reviews the record to determine if the findings are supported by substantial evidence; second, if the findings are supported by substantial evidence, we will determine if the trial court has misapprehended the effect of the evidence; and third, if substantial evidence exists and the effect of the evidence has not been misapprehended, the Court may still conclude that a finding is clearly erroneous when a review of the record leaves the Court with the definite and firm conviction that a mistake has been committed. Interstate Prod. Credit Ass’n v. DeSaye (1991), 250 Mont. 320, 323, 820 P.2d 1285, 1287. 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.” Barrett v. Asarco, Inc. (1990), 245 Mont. 196, 200, 799 P.2d 1078, 1080.

Issue I: Montana Real Property

Did the District Court err in finding that real property located in Montana is a partnership asset?

Joseph Fiedler contends that the real property located in Montana is and has always been held as tenants in common. He further contends that all real properties owned by the parties — with the exception of the Taylor Ranch — were acquired by various family members prior to 1950, the date James Fiedler has alleged as the time the partnership was created between James and Joseph Fiedler. According to Joseph Fiedler’s arguments on appeal, no real property is held in the name of the partnership, no written partnership agreement has ever existed between James and Joseph Fiedler, and the Fiedler brothers never intended to convey real property held as tenants in common to the partnership. Thus, Joseph Fiedler contends that the District Court erred in relying on In the Matter of the Estate of Palmer (1985), 218 Mont. 285, 708 P.2d 242, to determine that James and Joseph Fiedler intended to operate the ranch lands as part of a partnership and in distributing such as partnership property.

James Fiedler counters that Joseph Fiedler has maintained since the beginning of this proceeding that all real property owned and operated in Montana for farming and ranching purposes was partnership property and that he is barred by principles of judicial estoppel from now contending otherwise on appeal. We agree.

Clearly standing out among the numerous instances in which Joseph Fiedler has previously asserted or maintained that the property is partnership property are the following:

1. “Defendant JOSEPH FIEDLER has filed extensive counterclaims against Plaintiff JAMES FIEDLER alleging that JAMES FIEDLER has mismanaged the partnership assets; ... failed to maintain the buildings and lands of the partnership; breached his fiduciary duty by mismanaging partnership lands ...” (From Motion of Defendant and Counter-Plaintiff Joseph Fiedler to add Judith Fiedler as a Defendant to the Counterclaims)
2. “The Fiedler Ranch Partnership comprises a number of tracts of land totalling approximately 9254 acres.” (From Joseph Fiedler’s response to the Preliminary Report of the Special Master)
3. “Plaintiff’s motion envisions an eventual partition pursuant to MCA Title 70, Ch. 29. That chapter is irrelevant to partnership actions. By its own terms, section 70-29-101 applies only to situations ‘when several cotenants hold or are in possession of real property as joint tenants or as tenants in common.’ Plaintiff’s complaint herein did not seek relief in partition. More accurately, it sought dissolution and winding up of a partnership, under MCA Title 35, Ch. 10. Section 35-10-502 makes it clear that partners hold partnership property as ‘tenants in partnership’, not as tenants in common or as joint tenants, and the statutory system for dissolving and winding up the affairs of a partnership is very different from that of an ordinary partition.” (Joseph Fiedler’s objection to James Fiedler’s Motion for a Title Report, acquiesced in and relied on subsequently by James Fiedler) (Emphasis in original.)

James Fiedler also stipulated — pursuant to Joseph Fiedler’s argument that the property was held as a tenancy in partnership — to withdraw his claim for partition and for payment for services provided to the partnership. At all times subsequent to James Fiedler’s withdrawal of these claims, James Fiedler has taken the position previously argued by Joseph Fiedler that the property was held as a tenancy in partnership.

The doctrine of judicial estoppel binds a party to his or her judicial declarations, and precludes a party from taking a position inconsistent with them in a subsequent action or proceeding. Trader’s State Bank of Poplar v. Mann (1993), 258 Mont. 226, 242, 852 P.2d 604, 614. This Court has applied the doctrine to estop a party from controverting admissions in the party’s pleadings and to estop a party from controverting admissions in an affidavit. Rowland v. Klies (1986), 223 Mont. 360, 368, 726 P.2d 310, 316 (citing Fey v. A.A. Oil Corp. (1955), 129 Mont. 300, 323, 285 P.2d 578, 590). Stated simply, it is a rule which “estops a party to play fast-and-loose with the courts.” Rowland, 726 P.2d at 315 (citing 31 C.J.S. Estoppel, § 117B (1964)). Just as surely, the doctrine is applicable in this case where a party cannot take the opposing viewpoint when he has induced another to stipulate to his position and drop his arguments for that opposing position.

The elements of judicial estoppel are:

1) the estopped party must have knowledge of the facts at the time the original position is taken;
2) the party must have succeeded in maintaining the original position;
3) the position presently taken must be actually inconsistent with the original position; and
4) the original position must have misled the adverse party so that allowing the estopped party to change its position would injuriously affect the adverse party.

Mann, 852 P.2d at 614. Throughout the lengthy duration of this litigation and until he presented evidence at trial to argue that the properties were held as tenancies in common, Joseph Fiedler has consistently maintained that the properties involved in this action are partnership properties.

There is nothing in the record to indicate that Joseph Fiedler did not have knowledge of all the facts at the time he took his original position and clearly he succeeded in maintaining that position. This position was taken early on in the litigation and James Fiedler stipulated to this position at that time. Clearly, all the elements for judicial estoppel are present and Joseph Fiedler cannot now argue that this should be an action in partition of real property and not a partnership dissolution proceeding. Further, Joseph Fiedler maintained early on in this proceeding that all five Fiedlers operated as a family partnership prior to their deaths. We conclude that Joseph Fiedler is judicially estopped from changing his position concerning this property.

Further, he has made no cogent argument for not applying Palmer to the facts of this case to determine that the real property is held by James and Joseph Fiedler as tenancies in partnership. Palmer held that property acquired either before or after formation of a partnership may be considered partnership property despite the appearance of another form of ownership. Palmer, 708 P.2d at 249.

We hold the District Court correctly determined that the real property located in Montana is a partnership asset.

Issue II: Wisconsin Real Property

Did the District Court err in finding that real property located in Wisconsin is a partnership asset?

The parties own several tracts of real property in Wisconsin (the Wisconsin properties). The District Court included the Wisconsin properties along with other assets as partnership property to be distributed to the parties. James Fiedler has managed the Wisconsin properties and deposited income from them in partnership bank accounts.

This income has been included on partnership tax returns as well. George Campanella testified that copies of partnership tax returns were provided to Joseph Fiedler and presented evidence of that for several years. Joseph Fiedler did not challenge this during the years of James Fiedler’s management of this property nor has he made a persuasive argument that the Wisconsin properties are not partnership property.

Joseph Fiedler contends that the Wisconsin properties are not subject to the jurisdiction of the District Court and that the deposit of funds from the rentals of the Wisconsin properties in the Montana bank account and James Fiedler’s reporting of the lease income as partnership income does not constitute sufficient evidence to overcome a prima facie assumption that the ownership is that of tenants in common. These arguments are inapposite.

It is immaterial that the District Court does not have jurisdiction over the real property in Wisconsin. In October 1988, the parties stipulated that the Special Master would associate counsel in Wisconsin to conclude the probate of the Estate of Frank Fiedler, list the property for sale after appraisal under the supervision of the Special Master, and then deposit the net proceeds of the sale of the Wisconsin properties in the Special Master Interest Bearing Account until a court-ordered division and disbursement of the proceeds was ordered.

This stipulation to have the Special Master convert the property to cash for distribution as directed by the District Court was agreed to in October 1988 — more than four years before the trial. Joseph Fiedler did not object to including the Wisconsin properties as part of the trial. He further did not object to the District Court’s inclusion of them in the Order Appointing the Special Master or the Preliminary or Final Special Master’s Report’s discussion of them. He in fact included the Wisconsin properties in his own Counterclaim and other motions. He waited until just before trial to mention that the Wisconsin properties were improperly included in this proceeding and then agreed that the property should be included. He did not object until the Special Master’s report was being considered by the Court.

As part of the Special Master’s proposal adopted by the District Court, the proceeds of the sale of the Wisconsin properties are to be distributed to Joseph Fiedler. His argument relating to the fact that the property has not yet been sold is meritless. As noted above, Joseph Fiedler stipulated in 1988 to the procedures to be followed concerning this property. Moreover, by stipulating to this procedure, Joseph Fiedler waived any future argument to treat the matter differently absent allegations to support setting aside or relief from the stipulation.

The purpose of a stipulation is to relieve the parties from the necessity of introducing evidence about the ultimate fact covered by it. Webb v. Wolfe (1988), 230 Mont. 322, 325, 749 P.2d 531, 532. If the stipulation is material, the parties and the court are bound by it. Webb, 749 P.2d at 532. See also Myers v. Department of Agriculture (1988), 232 Mont. 286, 289, 756 P.2d 1144, 1146. We conclude that Joseph Fiedler is bound by his stipulation made in 1988 concerning the Wisconsin properties.

In addition to the stipulation that the Special Master would handle sale and distribution of the Wisconsin properties, substantial evidence was presented to support the District Court’s finding that the Wisconsin properties were partnership assets. This included testimony that the income from the property was included in partnership tax returns and that Joseph Fiedler did not object to this inclusion of income over a period of more than twenty years. This property was managed by James Fiedler. Joseph Fiedler also testified that he was advised by his attorney handling a 1976 IRS problem that he should leave the management of the partnership to James Fiedler. This and other evidence constitutes substantial evidence according to the DeSaye test.

We hold the District Court properly determined that real property located in Wisconsin is a partnership asset.

Issue III: The Special Master’s Report

Did the Special Master’s Report comply with the requirements of Rule 53, M.R.Civ.P?

Joseph Fiedler contends that he was deprived of rights arising under Rule 53, M.R.Civ.R, because he was not allowed to examine and challenge the Special Master’s report until it was accepted into evidence during the presentation of the plaintiff’s case at trial. He now claims that the Special Master substantially exceeded the authority given to him by the District Court and that the report is based on incorrect conclusions that a partnership existed between the parties and that the real property owned by James and Joseph Fiedler was owned as tenancies in partnership. He claims this distorts and invalidates the recommendations made by the Special Master concerning assignments of income and proposals for division of assets.

Joseph Fiedler’s argument on this issue is basically a reargument of the position he argued at the trial. In substance, it is an argument that the District Court erred in adopting the Special Master’s findings. Rule 53(e)(2), M.R.Civ.R, states that the trial court shall accept the master’s findings of fact unless they are clearly erroneous. This contention is addressed in Issue IV below.

As to the opportunity to be heard prior to trial concerning the Special Master’s report, this too is a meritless argument. James Fiedler filed a Motion for Hearing in October 1992, the month before the trial, to discuss the adoption of the Special Master’s report. Joseph Fiedler objected to this motion, stating:

[A] hearing on this matter before the trial setting is premature and would be duplicative of the matters to be presented at the trial which is scheduled to commence before this Court on the 16th day of November, 1992, for a period of one week at which time the Court will determine whether or not or how much, if any, of the Master’s Report will be utilized.

Moreover, Joseph Fiedler had ample opportunity to respond to the Special Master’s preliminary report and in fact filed an Opposition to Plaintiff’s Motion for Adoption of Special Master’s Preliminary Report as Final Report and later filed an Objection to the Special Master’s Report following the conclusion of the trial. He also challenged specific findings of the Special Master’s Report several times before the trial and, as stated above, refused a hearing on the report in the weeks prior to the trial. To argue now that he was prejudiced in light of this conduct is utterly without merit.

We hold the District Court allowed Joseph Fiedler to respond to the Special Master’s Report in accordance with the requirements of Rule 53(e)(2), M.R.Civ.R

Issue IV: Findings

Did the District Court err in determining that Joseph and James Fiedler operated the Taylor Ranch Corporation as a part of the partnership?

Joseph Fiedler’s lengthy argument on this issue is essentially an argument that the District Court erroneously converted this from an action in partition to an action to dissolve a partnership. He has not identified any specific findings which he claims are incorrect, but he argues the District Court erred in determining there was a partnership. We addressed the findings which deal with the inclusion of real property as partnership assets in Issues I and II above. We also affirm the findings of the District Court on this issue as discussed briefly below.

Interestingly, in his response to the Preliminary Report of the Special Master, Joseph Fiedler stated:

In approximately 1950, Joseph Fiedler, James Fiedler, their brother William ... and their parents ..., commenced conducting a general ranching and farming partnership business on land jointly owned by the family, hereinafter referred to as the Fiedler Ranch ... Upon the death of the brother and parents, Joseph and James became 50-50 partners with all profits to be split evenly.

This is but one of the numerous examples in the voluminous record of this action encompassing over ten years of litigation by which Joseph Fiedler has indicated his knowledge and belief that the Fiedler Ranch has been operated as a partnership. Not only has he supported his arguments over the years with information indicative of a partnership between James arid Joseph Fiedler, he has also supported them with information indicative of a partnership between all five members of the Fiedler family going as far back as 1950.

Substantial evidence supports a finding that the Taylor Ranch Corporation was purchased in 1954 by the partnership with partnership assets derived from the sale of partnership livestock. Based on the Special Master’s findings and conclusions, the evidence presented at trial and other contents of the record in this case, the District Court found specifically that James and Joseph Fiedler intended to operate the ranch they inherited, and all additions to it, as a partnership; that there was no intention by them to have any of the property withheld from the partnership; and that the Special Master had relied upon qualified appraisers and sound techniques. Rule 53(e)(2), M.R.Civ.R, states that a trial court sitting without a jury “shall accept the master’s findings of fact unless clearly erroneous.” The District Court concluded that the Special Master’s report contained nothing which was clearly erroneous. We agree.

After reviewing the record, we conclude that the findings above-noted and others not specified herein are indeed supported by substantial evidence. Further, after reviewing the record, we conclude that the District Court has not misapprehended the effect of the evidence, and our review of the record has not left us with a definite and firm conviction that a mistake has been made.

We hold the District Court properly determined that Joseph and James Fiedler operated the Taylor Ranch Corporation as a part of the partnership.

Affirmed.

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


source: Caselaw Access Project

author: JUSTICE HARRISON

license: Public Domain

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. JUSTIN ROBERT WILSON, Defendant and Appellant.
    No. 94-038.
    Submitted on Briefs June 30, 1994.
    Rehearing Denied September 1, 1994.
    Decided August 11, 1994.
    51 St.Rep. 697.
    266 Mont. 146.
    879 P.2d 683.

      For Appellant: Steven J. Shapiro, Attorney at Law, Clancy.
    For Respondent: Hon. Joseph P. Mazurek, Attorney General, Pamela P. Collins, Assistant Attorney General, Helena; John T. Flynn, Broadwater County Attorney, Townsend.
   JUSTICE HARRISON

delivered the Opinion of the Court.

Justin Robert Wilson (Wilson) appeals from an order of the First Judicial District Court, Broadwater County, which determined that the justice of the peace had a substantial basis to conclude that probable cause existed to issue a search warrant for Wilson’s truck. We reverse.

On the night of April 2,1993, or early morning of April 3,1993, the A & W restaurant in Townsend, Montana, was burglarized. When the Broadwater County sheriff arrived at the scene he discovered that a safe and microwave oven were missing. Even though a large window was broken, the sheriff found black marks on the vinyl floor and concrete around the doorway which suggested that the safe was wheeled through the doorway. That door was locked the night before by the manager. The sheriff deduced that the person who took the safe must have had a key to the door. The sheriff also noticed tire tracks on the pavement at the A & W.

The manager of the A & W told the sheriff that only four people had keys to the door of the A & W — one of whom was Wilson, an employee. She also told the sheriff that Wilson knew the combination to the safe that was stolen.

Later in the morning of April 3, 1993, a person discovered a safe in the water near the Indian Creek Campground. The sheriff, a deputy and the Broadwater County justice of the peace travelled out to the Indian Creek Campground to investigate. When the three men arrived at the campground, they noticed tire tracks similar to those found at the A & W and footprints leading to and from the water. They walked over to the water and found the safe that belonged to the A & W. The safe door was open and no visible signs of forcible entry were apparent. The sheriff deduced that a person who knew the combination must have opened the safe. The sheriff knew that Wilson was aware of the safe’s combination. The sheriff discussed the safe and the investigation with the justice of the peace at that time.

On April 4, 1993, while Wilson was working at the A & W, an undersheriff took pictures of Wilson’s truck, the tires, and the bed. The undersheriff noticed scratch marks on the bed of Wilson’s truck. The undersheriff also noticed a twisted bolt and bracket in the bed of Wilson’s truck. The undersheriff did not know the significance of the bolt but seized it anyway and showed it to the A & W’s owner the next day. The owner identified the bolt and bracket as the bolt which secured the safe to the floor of the A & W.

On April 5, 1993, the sheriff applied to the justice of the peace for a search warrant to search Wilson’s truck. The justice of the peace granted the search warrant and the sheriff executed the warrant. The sheriff seized a number of one dollar bills stashed in the glove compartment, a blue poncho and paint scrapings from the bed of the truck. Wilson subsequently was arrested.

On October 6, 1993, Wilson filed a motion to suppress the twisted bolt and bracket claiming the undersheriff illegally seized the bolt and bracket from his truck. Wilson argued that without the illegally seized twisted bolt and bracket, there was no probable cause to support the issuance of a search warrant. Wilson also argued that the evidence was tainted since the justice of the peace was at the scene when the sheriff recovered the safe and, specifically, since the sheriff discussed the safe and the investigation with the justice of the peace at that time.

The District Court granted Wilson’s motion to suppress, but determined that, even without the bolt and bracket, the search warrant application was sufficient to support the existence of probable cause. Wilson then changed his plea to guilty under North Carolina v. Alford (1970), 400 U.S. 25, 91 S.Ct. 160, 27 L.Ed.2d 162. Wilson reserved the right to appeal the District Court’s order pertaining to the search warrant and reserved the right to withdraw his guilty plea. The District Court then sentenced Wilson to three years on conditions of probation. Wilson appeals and we restate the issue:

If a justice of the peace travels with a sheriff to recover evidence of a crime and discusses the evidence and the investigation with the sheriff, can that justice of the peace subsequently issue a search warrant in that case?

Ordinarily, we review whether the issuing magistrate had a substantial basis to conclude that probable cause to issue a search warrant existed. State v. Sunberg (1988), 235 Mont. 115, 122, 765 P.2d 736, 741. However, when, as here, the issuing magistrate is actively involved in the police investigation, we review whether the magistrate correctly issued the search warrant. See State ex rel. Townsend v. Dist. Court, Fourth Judicial Dist. (1975), 168 Mont. 357, 363, 543 P.2d 193, 195.

Montana law requires that “[a]n impartial magistrate must determine the existence of... probable cause solely from the evidence in ‘the four corners of the search warrant application.’ ” State v. Walston (1989), 236 Mont. 218, 221, 768 P.2d 1387, 1389. The magistrate must be impartial “to ensure that some neutral and detached evaluation is interposed between those who investigate crime and the ordinary citizen.” Townsend, 543 P.2d at 195. In Townsend, we stressed the importance of a neutral and detached magistrate by quoting the United States Supreme Comb:

The point of the Fourth Amendment, which often is not grasped by zealous officers, is not that it denies law enforcement the support of the usual inferences which reasonable men draw from evidence. Its protection consists in requiring that those inferences be drawn by a neutral and detached magistrate instead of being judged by the officer engaged in the often competitive enterprise of ferreting out crime.

Townsend, 543 P.2d at 195; quoting Johnson v. United States (1948), 333 U.S. 10, 13-14, 68 S.Ct. 367, 369, 92 L.Ed. 436, 440.

Here, once the justice of the peace travelled to the campground to investigate the missing safe, he became a part of the investigation and his impartiality ceased. Once he crossed the line and became a member of the investigatory team, he could not make a neutral and detached evaluation of the evidence. He could no longer protect Wilson’s right to be free from searches not based on probable cause. Not only was the justice of the peace’s judgment clouded by personally observing the scene where the safe was found and the safe itself, but the sheriff also discussed the investigation with the justice of the peace at that time. We hold, as a matter of law, that once the justice of the peace became an active participant in the police investigation, he was no longer an impartial magistrate and, therefore, he could not issue a search warrant. We also hold that the search warrant was invalid and, as such, Wilson’s truck was illegally searched and the evidence from that search must be suppressed. Reversed and remanded.

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


author: JUSTICE GRAY

text:
    JOHN C. HUGHES, as administrative manager of the Western Conference of Teamsters Pension Trust Fund, Plaintiff and Appellant, vs. JIM BLANKENSHIP, d/b/a BLANKENSHIP CONSTRUCTION, f/k/a BLANKENSHIP PAVING, Defendant and Respondent.
    No. 93-503.
    Submitted on Briefs April 28, 1994.
    Decided August 11, 1994.
    51 St.Rep. 699.
    266 Mont. 150.
    879 P.2d 685.

      For Appellant: Michael C. Coil, Angel, Serenar, Coil & Bartlett, Bozeman.
    For Respondent: John Lynch, Lynch Law Firm, Great Falls.
   JUSTICE GRAY

delivered the Opinion of the Court.

John Hughes appeals from the Findings of Fact, Conclusions of Law, and Judgment of the Second Judicial District Court, Silver Bow County, awarding unpaid employer contributions to the Western Conference of Teamsters Pension Trust Fruid (Trust Fund) and attorney’s fees to Jim Blankenship, doing business as Blankenship Construction (Blankenship). We reverse and remand.

Blankenship entered into a collective bargaining compliance agreement with the Joint Council of Teamsters and Teamsters Local No. 2 of Butte, Montana, in July, 1976. By entering into the compliance agreement, Blankenship agreed to be bound by the terms of the Highway and Heavy Construction Labor Contract (Labor Contract), a collective bargaining agreement between the Montana Contractors Association and the Joint Council of (Teamsters. The Labor Contract included a schedule governing employer contributions to the Trust Fund for every hour an employee worked in a job classified in the Labor Contract and designated the Trust Fund as the recipient of those contributions.

The compliance agreement also bound Blankenship to the Trust Fund’s articles of trust, which were contained in various agreements and declarations of trust and governed the administration of the Trust Fund, including the collection of delinquent contributions. They required the employer to submit written reports regarding the wages paid and hours worked by each employee and authorized the Trust Fund to audit the employer’s payroll records to determine if contributions were owing.

Contemporaneous with the collective bargaining compliance agreement, Blankenship entered into an oral agreement with Jim Roberts (Roberts), a local Teamsters union representative. This oral agreement purported to decrease Blankenship’s contribution obligations to the Trust Fund by excluding the necessity of contributions for employees working on certain types of projects.

The Labor Contract was amended several times after Blankenship entered into the original compliance agreement. Blankenship signed additional compliance agreements in 1977 and 1981.

Shortly after signing the 1981 compliance agreement, Blankenship signed an employer-union pension certification. This document further bound Blankenship to the Trust Fund’s articles of trust and specified a procedure for obtaining the Trust Fund’s consent to a modification of an employer’s contribution obligations.

In 1985, the Trust Fund initiated an audit of Blankenship’s payroll records. The audit revealed that Blankenship was delinquent on his contributions for years 1979 through 1986. The Trust Fund assessed contribution deficiencies, interest, and liquidated damages against Blankenship. Relying on his oral agreement with Roberts, Blankenship refused to pay the amounts assessed.

In 1987, John Hughes (Hughes), administrative manager of the Trust Fund, filed an action to recover the unpaid contributions. Shortly after the action was filed, Blankenship proposed by letter to make an offer of judgment in the amount of delinquent contributions he agreed were owing under the Labor Contract as modified by the oral agreement, as well as penalties and interest. The Trust Fund refused the proposal.

During the trial of the action, the District Court admitted evidence of the oral agreement between Blankenship and Roberts modifying Blankenship’s contribution obligations. Based on this evidence, the District Court rescinded the compliance agreements and all subsequent agreements based on the parties’ mutual mistake in believing they could orally modify Blankenship’s contribution obligations to the Trust Fund. We reversed the District Court on appeal and remanded for further proceedings, holding that parol evidence of an oral modification to a contract governed by the Labor Management Relations Act was inadmissible as a matter of federal law. Hughes v. Blankenship (1989), 239 Mont. 519, 523, 781 P.2d 1132, 1134.

Following remand, Blankenship and Roberts discussed, and Roberts drafted, a written “memorialization” of the original oral agreement; both Roberts and Blankenship signed it. The purpose of the memorialization was to facilitate settlement of the case by setting forth the conditions under which Blankenship was required to contribute to the Trust Fund. The case did not settle.

The parties agreed that Blankenship owed $8,222 in delinquent contributions for work which was not excluded under the terms of the memorialization. Blankenship made an offer of judgment in that amount plus any costs incurred by the Trust Fund. The Trust Fund rejected the offer and the action continued.

Over the Trust Fund’s objection, the District Court admitted the memorialization into evidence during the second trial. The District Court ultimately concluded that the written memorialization was enforceable against the Trust Fund and limited Blankenship’s contribution obligations pursuant to its terms. It awarded the Trust Fund $8,224 in delinquent contributions and $13,396 in liquidated damages and interest. In addition, the court awarded Blankenship $38,766 in attorney’s fees based on the Trust Fund’s rejection of the first proposal for an offer of judgment. Hughes appeals.

The primary issue before this Court is the enforceability of the 1991 written memorialization entered into by Blankenship and Roberts. Hughes argues that the memorialization was not enforceable because Blankenship and Roberts did not follow the mandatory provisions in the Labor Contracts, compliance agreements, and pension certification specifying how to make a contribution modification binding on the Trust Fund. Blankenship responds that the Trust Fund, as a third-party beneficiary of the Labor Contract, cannot deny enforceability of the written modification. Furthermore, Blankenship asserts that the Trust Fund’s attorney approved the memorialization for form and content and, because no reason for not accepting it was offered, it is enforceable.

It is clear that state and federal courts have concurrent jurisdiction in trust fund collection cases and that federal substantive law provides the basis for our decisions. Audit Services, Inc. v. Anderson (1984), 211 Mont. 323, 326, 684 P.2d 491, 493. The interpretation of a collective bargaining agreement provision is a question of law. Kemmis v. McGoldrick (9th Cir. 1983), 706 F.2d 993, 996. We review a district court’s interpretation of law to determine if it is correct. Colorado National Bank of Denver v. Story (1993), 261 Mont. 375, 377, 862 P.2d 1120, 1122.

Courts interpret contractual provisions according to the plain, ordinary language used by the parties. National Labor Relations Board v. Superior Forwarding, Inc. (8th Cir. 1985), 762 F.2d 695, 697. Here, the Labor Contract in effect during the 1979-86 audit period plainly stated that the Trust Fund would rely on its terms to “restore or not reduce benefits to Retiring Employees” and that the terms could not be modified without the “express written consent of the trustees.” Furthermore, the plain language of the 1981 pension certification signed by Blankenship specifically provided that the Trust Fund would not be bound by any modification to an employer’s contribution obligations unless the modification was contained in a complete, signed writing, timely submitted to the Trust Fund’s area administrative office, and accepted by the trustees. These documents were of record in the District Court. ,

Furthermore, other evidence demonstrated that the memorialization did not meet the requirements for binding the Trust Fund to a contribution modification under the terms of either the Labor Contract or the 1981 pension certification. Greg Thompson, supervisor of the contract review and pension accounting department for the Trust Fund administrator, testified that the written and executed memorialization was never submitted to the administrative offices; he had not seen it prior to the time it was given to him at trial in 1992. Linda Kuniega, audit supervisor for the Trust Fund, testified that her office received an unsigned, undated copy of a document with language similar to that in the written memorialization in early 1991, but that the Trust Fund did not accept the document.

Blankenship’s assertion that the memorialization is enforceable because the Trust Fund rejected it for no reason after its attorney approved it for form and content is not persuasive. William Roberts, the Trust Fund attorney who originally discussed the memorialization with Roberts, testified that his discussions with Roberts regarding the memorialization focused on settlement of the case. His testimony included accounts of several conversations during which Roberts was informed that the Trust Fund’s area manager would recommend acceptance of the written agreement to the Trust Fund only if Blankenship agreed to additional conditions related to payment of the undisputed amount of delinquent contributions, liquidated damages, administrative costs, and attorney’s fees. He further testified that, although the additional conditions were not met, an unsigned copy of the written memorialization was eventually provided to him and approved for content but that the Trust Fund had never approved it. Although this evidence established that the written memorialization was approved for content by a Trust Fund attorney, it did not establish that a signed memorialization was timely submitted to the Trust Fund’s area administrative offices and accepted by the trustees as required by the Labor Contract or the pension certification.

We conclude that the written memorialization entered into by Blankenship and Roberts in 1991 did not comply with the requirements in either the Labor Contract or the pension certification for making a contribution modification binding on the Trust Fund. We hold, therefore, that the District Court erred in concluding that the written memorialization modifying Blankenship’s contribution obligations was enforceable against the Trust Fund. On remand, the Trust Fund’s award for delinquent contributions, interest, and liquidated damages must be calculated without regard to the 1991 written memorialization.

Hughes also asserts error in the District Court’s denial of his motion to amend the findings of fact, conclusions of law, and judgment to include a finding that the Trust Fund was entitled to audit Blankenship’s payroll records for the period between 1986 and Blankenship’s withdrawal from the Labor Contract in January, 1988. Hughes argues that the record supports the Trust Fund’s authority to audit Blankenship’s records for this period, but that the District Court failed to address the issue. Blankenship responds that Hughes did not properly raise the issue in the District Court and, therefore, it is not properly before us.

Our review of the record reveals that Hughes raised the audit issue in his initial pleading, pretrial brief for the second trial, and motion to amend the District Court’s findings of fact and conclusions of law after the second trial. Because it was raised in a motion presented to and ruled on by the District Court, we conclude that the issue is properly before us on appeal. See Fillbach v. Inland Const. Co. (1978), 178 Mont. 374, 382, 584 P.2d 1274, 1278. We review a district court’s decision regarding a motion to amend findings of fact and conclusions of law for abuse of discretion. Wagner v. Cutler (1988), 232 Mont. 332, 338, 757 P.2d 779, 783.

The District Court record clearly supports the Trust Fund’s right to audit Blankenship’s payroll records for the time period between 1986 and Blankenship’s withdrawal in 1988. The compliance agreements and pension certification signed by Blankenship bound him to the Trust Fund’s articles of trust, which required the employer to furnish its payroll records to the Trust Fund for an audit when the trustees deemed it advisable for the administration of the Trust Fund. Here, the administrator requested Blankenship’s payroll records to determine whether further contributions were due and owing. We hold that the District Court abused its discretion in denying the Trust Fund’s motion to amend the findings of fact to include the Trust Fund’s right to complete an audit of Blankenship’s payroll records from 1986 up to the time of his withdrawal.

Hughes raises an additional issue regarding the District Court’s award of attorney’s fees to Blankenship. The award was premised on the court’s conclusions that the written memorialization was enforceable against the Trust Fund and, therefore, that Blankenship is the prevailing party in this action because his proposal to make an offer of judgment in the amount of the delinquent contributions for all work which was not excluded under the terms of the memorialization equalled the amount ultimately awarded to the Trust Fund. Based on our holding herein that the District Court’s conclusion regarding the enforceability of the memorialization is erroneous, we vacate the award of attorney’s fees to Blankenship.

Reversed and remanded for redetermination of the amount of delinquent contributions, interest, and liquidated damages owed by Blankenship, entry of an order requiring Blankenship to submit his payroll records for 1986 through the time of his withdrawal in 1988 to the Trust Fund for audit, and further proceedings on the issue of attorney’s fees.

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


author: JUSTICE TRIEWEILER

text:
    IN RE MARRIAGE OF JEROME ALLEN JOHNSON, Petitioner and Appellant, and BARBARA A. JOHNSON, Respondent and Respondent.
    No. 93-384.
    Submitted on Briefs March 10, 1994.
    Decided August 12, 1994.
    51 St.Rep. 703.
    266 Mont. 158.
    879 P.2d 689.

      For Appellant: Ann L. Smoyer, Smoyer Law Firm, Helena.
    For Respondent: Jon A. Oldenburg, Attorney at Law, Lewistown.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

Respondent Barbara A. Johnson moved the District Court for the Tenth Judicial District in Fergus County to amend her prior decree of dissolution by transferring physical custody of her two children from her former husband, Jerome A. Johnson, to her. After a hearing at which testimony was taken and other evidence received, the District Court adopted Barbara’s proposed findings of fact and conclusions of law and entered judgment in her favor granting to her physical custody of her two children and providing Jerome with reasonable rights of visitation. Jerome appeals from the judgment of the District Court. We reverse.

We restate the issues on appeal as follows:

1. When a party to a former dissolution proceeding moves to amend the decree in a way that substantially changes the residential living arrangements of the former couple’s children without seeking a change in the legal designation of “joint custody,” is the District Court’s decision governed by the “best interest” standard found at § 40-4-212, MCA, or by the “serious endangerment” standard found at § 40-4-219(l)(c), MCA?

2. Applying the proper standard for modification of residential custody, was there sufficient evidence to support the District Court’s judgment modifying its original decree?

FACTUAL BACKGROUND

Jerome and Barbara were married on July 6, 1983. During their marriage, Barbara gave birth to two daughters. Jennifer was born on October 31,1983, and Amanda was bom on February 27,1987. They were 9V2 and 6 years old respectively at the time of the hearing held pursuant to Barbara’s motion to amend the court’s decree.

On June 20, 1990, this couple filed a joint petition for dissolution of their marriage. In their petition, they stated that they had entered into a property settlement agreement and child custody agreement, and asked that it be adopted by the court. With regard to child custody, the parties indicated in their agreement that they were both fit and proper persons to be granted care and custody of their children, and therefore, petitioned for joint custody. However, they also agreed that Jerome was to be awarded physical custody, care, and control of the two children, and that Barbara was entitled to reasonable visitation. Under the terms of the agreement, Barbara incurred no obligation for child support, and in fact, made no child support payments during the time that the children resided with Jerome.

On June 20, 1990, the District Court entered its decree dissolving the couple’s marriage. The decree incorporated the couple’s property settlement and child custody agreements.

At the time of their dissolution, and during their entire marriage, Jerome and Barbara lived in Roy. Following the dissolution of their marriage, Barbara moved to Billings, where she enrolled in college. The children resided with Jerome for nine months during the school year, and with Barbara during the three months of summer. During the school year, Barbara exercised visitation with the children on alternate weekends.

Barbara did not complete her college education, but after two years, moved from Billings to Lewistown where, at the time of the hearing, she was employed as a manager-trainee at the local Kentucky Fried Chicken restaurant.

On August 6,1992, Barbara moved the District Court to amend its original decree by providing her with physical custody, care, and control of her children, and providing Jerome with reasonable rights of visitation. In support of her motion, she filed an affidavit in which she stated that the parties’ circumstances had changed because she was no longer attending school; that the children’s best interests would be served by changing their living arrangements; and that due to their current living arrangements, their physical and emotional health was seriously endangered.

On April 7,1993, the District Court heard evidence in support of and in opposition to Barbara’s motion. Twelve witnesses testified, in addition to the parties. However, the District Court did not interview either of the children to consider their preferences for a parent with whom to reside. Barbara conceded that at least the older daughter was tom between her loyalties to both parents, and that the younger daughter was not yet mature enough to express a reasoned preference.

On April 26,1993, the District Court adopted those findings of fact and conclusions of law which had been proposed by Barbara’s attorney, and on June 23, 1993, the District Court granted Barbara’s motion by entering judgment which continued joint legal custody, but designated Barbara as the residential custodian, and granted Jerome reasonable visitation rights. In its findings of fact, the District Court found that circumstances had changed since the entry of the original decree because Barbara was now employed and had a home where she could care for her children. The District Court also found that the environment in which the children resided with Jerome endangered their physical, mental, moral, and emotional health, and that modification was necessary to serve their best interests. The District Court held, in other words, that modification was justified under either the “best interest” test set forth in § 40-4-212, MCA, or the “serious endangerment” test set forth in § 40-4-219, MCA.

On appeal, Jerome argues that since the physical custody and visitation arrangements were completely reversed from the original decree to the amended decree, the District Court’s decision, in substance, changed actual custody of the children, and therefore, should have done so only if the “serious endangerment” standard set forth in § 40-4-219, MCA, was satisfied. Furthermore, Jerome argues that whether the “best interests” of the children are considered, or the “serious endangerment” standard, there was insufficient evidence to support the District Court’s decision transferring physical custody of the children from him to Barbara.

Barbara responds that since no change was made in the joint custody provided for in the original decree that the “best interest” test provided for in § 40-4-212, MCA, applies. Barbara also responds that whichever test for modification is applied, there was sufficient evidence to support the District Court’s decision.

ISSUE 1

When a party to a former dissolution proceeding moves to amend the decree in a way that substantially changes the residential living arrangements of the former couple’s children without seeking a change in the legal designation of “joint custody,” is the District Court’s decision governed by the “best interest” standard found at § 40-4-212, MCA, or by the “serious endangerment” standard found at § 40-4-219(l)(c), MCA?

The District Court drew no conclusion about whether its decision was controlled by §§ -212 or -219. It.merely found sufficient evidence to satisfy either criteria for modification, and therefore, granted Barbara’s motion. However, before we can review the sufficiency of the evidence in support of the District Court’s judgment, it is necessary to clearly establish what Barbara’s burden was in order to accomplish the modification she sought.

Since our prior decisions are not necessarily consistent with the statutory scheme for modification, nor with each other, it is appropriate to review those statutes, and our cases interpreting them, before arriving at our conclusion.

Section 40-4-212, MCA, provides that when a district court makes its original determination regarding child custody, it shall do so in accordance with the “best interest of the child.” However, recognizing that children’s “best interests” are served by continuity and stability in their living arrangements, the Legislature also provided that once custody was established by the district court, it could not be modified unless (1) a change has occurred in circumstances which make modification necessary in order to serve the child’s best interest, and further, that one of several additional factors are found to exist. The additional factor relevant to this case is that (2) “the child’s present environment endangers seriously his physical, mental, moral, or emotional health and the harm likely to be caused by a change in environment is outweighed by its advantages to him ....” Section 40-4-219(l)(c), MCA.

Both §§ -212 and -219 were taken from the Uniform Marriage and Divorce Act and were adopted in Montana in 1975.

In 1981, the Legislature amended Montana’s laws regarding child custody by adding §§ 40-4-222 through -224, MCA. These sections were not taken from the Uniform Marriage and Divorce Act, but are instead based on §§ 4600 and 4600.5 of the California Civil Code. Section 40-4-222, MCA, declared the Legislature’s intent to “assure minor children frequent and continuing contact with both parents after the parents have separated or dissolved their marriage” and that where in the best interest of the child, joint custody should be awarded to accomplish that purpose. Section 40-4-224(1) and (2), MCA, provides that “[u]pon application of either parent... the court shall presume joint custody is in the best interest of a minor child” and that “[t]he allotment of time between the parents must be as equal as possible; however: (a) each case shall be determined according to its own practicalities, with the best interest of the child as the primary consideration ...”

Subparagraph (3) of § -224 provides that “[a]ny order for joint custody be modified pursuant to 40-4-219 to terminate the joint custody.”

While § -224 provided that the allotment of time between parents must be based on the best interest of the child, it set forth no separate standard for modifying the allotment of time provided for in the original decree. Subparagraph (3) provides that a joint custody order may be modified pursuant to § -219, but is not a model of clarity and appears to refer to modifications which are for the purpose of terminating joint custody. Therefore, in a series of cases, this Court has reasoned that when a party seeks to modify a joint custody arrangement by terminating joint custody, he or she must satisfy the standards set forth in § -219, but that where a party seeks to modify physical custody arrangements without terminating the legal designation of joint custody, the “best interest” test applies based on the provisions of § -224(2). See In re Marriage of Paradis (1984), 213 Mont. 177, 689 P.2d 1263; In re Marriage of Bergner (1986), 222 Mont. 305, 722 P.2d 1141; In re Marriage of Stephenson (1988), 230 Mont. 439, 750 P.2d 1073; In re Marriage of Johnson (1989), 238 Mont. 153, 777 P.2d 305; In re Marriage of Keil and Ferguson (1990), 246 Mont. 344, 805 P.2d 1334; In re Marriage of Mitchell (1991), 248 Mont. 105, 809 P.2d 582; In re Marriage of Cogar (1992), 252 Mont. 272, 828 P.2d 1361.

The rationale in our earlier decisions seems to be that § 40-4-219(l)(a)-(f), MCA, lists the jurisdictional prerequisites only for modification of sole custody disputes, but that motions for a different physical custody arrangement without terminating “joint custody” must apply the “best interest test” because § 40-4-224(2), MCA, requires that the allotment of time between parties in a joint custody arrangement be based on the child’s “best interest.” Our prior decisions fail to point out that sole custody, pursuant to § -212, must also be based on a child’s “best interest.” Furthermore, our prior decisions failed to explain why the rationale for applying § -219 for modification of sole custody is not equally applicable to a substantial change in physical custody arrangements. We pointed out in Bergner, 722 P.2d at 1144, that “the stability of a child’s home life is vital to his or her well-being.”

Certainly a child’s sense of continuity and stability are equally threatened when that child is uprooted from the only community in which that child has ever resided and relocated in a new household and new school, whether we refer to the change as one of legal custody or merely physical custody.

Some of our decisions have recognized that the substance of the change which is sought is more important than what it is called in the parties’pleadings.

For that reason, in In re Marriage of Gahm (1986), 222 Mont. 300, 722 P.2d 1138, we construed the relief sought by the husband to be a termination of joint custody, even though his formal pleadings sought only modification of physical custody. We stated:

Here, the appellant’s request is different than that made in Paradis. This appellant requested “permanent custody” of the children with “limited rights of visitation” to respondent. This is more than a request for different physical custody arrangements like the request in Paradis and does not concern the integration standard. Asking that respondent be allowed only limited visitation is equivalent to asking for sole custody.

Gahm, 722 P.2d at 1140.

In discussing the importance of applying the “serious endangerment” standard to modification of a custody decree, we stated:

Subsection (c) is a jurisdictional prerequisite to modification of a custody decree. In re Custody of Dallenger (1977), 173 Mont. 530, 534, 568 P.2d 169, 172. The rationale for placing this heavy burden on the moving party is to preserve stability and continuity of custody for children. Dallenger, 173 Mont. at 533, 568 P.2d at 171. This policy does not change merely because the moving party uses a different label in his prayer for relief. The express purpose of the joint custody provisions are to assure a child frequent and continuing contact with each parent and to allow each parent to share the rights and responsibilities of raising the child. When one parent seeks to become permanent custodian and to relegate the other parent to limited visitation, the proposed arrangement is no longer joint custody. That parent should carry a heavy burden of proof before the court imposes such a change on a child.

Gahm, 722 P.2d at 1140-41.

Likewise, in Stephenson, we held that in deciding which standard to apply to a motion for modification of a child’s physical custody arrangements, we would look to the substance of the change sought, rather than the form of the party’s motion. In that case, although the parties had been awarded joint custody of their children, the husband sought a modification of the original decree which would make him the domiciliary parent. Although we held that “best interest” was all that had to be established to modify physical custody, when termination of joint custody was not sought, we also held that:

[W]here modification equates to termination of the joint custody, the lower court should proceed according to the requirements of § 40-4-219, MCA. See In re the Marriage of Gahm and Henson (1986), [222 Mont. 300, 302,] 722 P.2d 1138, 1140.

Stephenson, 750 P.2d at 1077. After analyzing the change sought by the husband, we held that:

We agree with Sandra’s assertion that the lower court’s modification amounted to termination of the parties’ joint custody arrangement. The modified decree awarded physical custody to Andrew and granted Sandra reasonable visitation conditioned on reasonable prior notice and abstention from alcohol. This was a significant change for the children. The original decree granted Sandra physical custody and Andrew received liberal visitation rights .... Under these circumstances, the lower court’s modification terminates the joint custody established by the first decree because the change amounts to “more than a request for a different physical custody arrangement like the request in Paradis and does not concern the integration standard.” Gahm, 722 P.2d at 1140. And where “one parent seeks to become permanent custodian and to relegate the other parent to limited visitation, the proposed arrangement is no longer joint custody.” Gahm, 722 P.2d at 1141. Thus we hold that § 40-4-219, MCA, applies, and we reverse for lack of a proper endangerment finding.

Stephenson, 750 P.2d at 1077-78.

In summary, our prior decisions have held that where one party to a dissolution moves or petitions to modify a sole custody provision in the dissolution decree, then that party must satisfy the jurisdictional requirements of § 40-4-219, MCA. However, if the original decree provided for joint custody and the motion to modify does not attempt to terminate joint custody, but simply alter the physical custody arrangements, the district court should consider the motion in light of the best interest standard established by § 40-4-212, MCA. We have carved out an exception to the previous two rules where the form of a party’s pleading asks for a modification of physical custody, but in essence terminates joint custody.

Considering our statutory scheme for modification of custody arrangements, and the rationale for requiring a substantial showing before altering the living arrangements to which a child has become accustomed, and out of concern that the applicable standard for granting a motion to modify custody arrangements is not clear from our prior decisions, we adopt the following standard:

Motions or petitions to modify a sole custody provision or terminate a joint custody provision must satisfy the jurisdictional prerequisites set forth in § 40-4-219, MCA. Likewise, a motion or petition to modify child custody provisions in a dissolution decree which have the effect of substantially changing the primary residence of the parties’ children, even though the formal designation of “joint custody” is retained, are to be construed as motions or petitions to terminate joint custody and must satisfy the jurisdictional requirements set forth in § 40-4-219. MCA. Any effort to modify the physical custody arrangements in a decree which provided for joint custody, which does not seek a substantial change in the children’s primary residence, may be considered by the district court according to the best interest standard set forth in § 40-4-212, MCA.

We conclude that this approach is most consistent with the plain terms of Montana’s Marriage and Divorce Act and is most likely to provide for the continuity and stability of children’s living arrangements that the Legislature obviously determined to be important when it adopted that Act.

ISSUE 2

Applying the proper standard for modification of residential custody, was there sufficient evidence to support the District Court’s judgment modifying its original decree?

[T]he party requesting modification under § 40-4-219, MCA, bears a heavy burden because the statute’s policy is to “preserve stability and continuity of custody for the children.” Gahrn, 722 P.2d at 1140.

Stephenson, 750 P.2d at 1078.

When reviewing findings regarding modification of custody, this Court will not reverse the findings unless they are clearly erroneous. In re Marriage of Arbuckle (1990), 243 Mont. 10, 13, 792 P.2d 1123, 1124. A finding is clearly erroneous only if it is not supported by substantial evidence, the trial court has misapprehended the effect of the evidence, or a review of the record leaves this Court with the definite and firm conviction that a mistake has been committed. Interstate Production Credit v. DeSaye (1991), 250 Mont. 320, 323, 820 P.2d 1285, 1287.

In re Marriage of McClain (1993), 257 Mont. 371, 374, 849 P.2d 194, 196.

In support of her contention that her children’s health was seriously endangered by residing with their father, Barbara offered the following evidence:

1. She testified that when the girls arrived at her home for visitation they were inadequately clothed and that she had to purchase clothes for them.

2. She testified that on at least one occasion Jerome had left the children while he and his companion went out and that while gone he had turned off the telephone so that they could not make outgoing calls.

3. Barbara complained that the girls lacked supervision, as evidenced by the fact that they were allowed to remain at school until about 5:00 or 5:30 p.m.

4. She complained that the girls’ medical care was neglected; however, the only example given was Jerome’s failure to replace Jennifer’s glasses for three months after they had been lost. In a related complaint, she reported that when Amanda was taken to Billings for a minor surgical procedure Barbara had not been advised of the time and date ahead of time.

5. Barbara was also concerned that Jerome had not continued the girls’ religious education which she had begun prior to the dissolution of their marriage.

While Barbara had other minor complaints about her relationship with Jerome, as it affected the girls, the complaints listed formed the basis of her contention that her daughters’health was endangered by living with her former husband. On the other hand, she acknowledged that the girls feel comfortable at and get along well in school. She conceded that Jerome did not have a drinking problem and she was willing to provide him with three months of visitation during the summer. She also conceded that she had paid no child support to Jerome for the care of their daughters since the couple’s marriage had been dissolved.

In response to Barbara’s accusations, Jerome pointed out that he stopped sending the girls’ good clothes with them when they visited their mother because she kept the good clothes and only returned the ones of poorer quality. However, he denied that the girls looked like “orphans,” as their mother described them when they arrived for visitation. He testified that his daughters are required to be home for dinner at 5:00 every night and that they often remain at school until then, but pointed out that the school is, at most, one-half block away, and that he can see his daughters from his window while they play on the playground. He denied that his daughters had terminated their religious education, and pointed out that they had gone to church school the day before the hearing. He explained that he had attempted to call Barbara about Amanda’s operation two days beforehand, but was unable to reach her. He acknowledged, however, that he did not bother to leave a message on her answering machine. None of Jerome’s testimony was rebutted.

Only two witnesses were called to testify regarding Jennifer’s and Amanda’s progress at school. Peg Rogers works for the Head Start Program in Roy and had Amanda in her course the previous year. She described her as bright, cheerful, and happy, and said that her hygiene and health habits were very good. She described her as always well dressed, neat, and clean. She described Jerome as a loving father who was involved in his children’s school work and an active participant in the school. She could think of no reason why his children would be better off living somewhere else.

William Walker was the superintendent of schools at Roy during the year prior to trial, and knew both Johnson girls. He was also the principal of kindergarten through twelfth grade and saw Jennifer daily during the previous school year. He described her as well adjusted and happy to be at school. He said she did better than average academically. He also said that she dressed normally, was well groomed, and was aware of no problems in her home. He testified that Jerome always attended parent-teacher conferences, and had made an impression on him because generally he had a difficult time getting parents to attend.

Tony LeRette is Barbara’s 19-year-old brother, but had continued to live with Jerome for nearly a year after the couple separated. He lived there because his parents lived elsewhere and he wanted to complete high school in Roy. He described Jerome as a good parent who adequately cared for the girls and always knew where they were. He considered Jerome watchful and protective, and thought that the household and community in which the girls were being raised was a good place for them and a friendly environment. He could think of no reason why the children should be moved.

In summary, it appears from the record that Barbara’s and Jerome’s poor relationship has led to several decisions which have not been in the best interests of their children. For example, it is clear that these children would be better off if their parents were able to work out an agreement regarding the exchange of their clothing, were able to better communicate regarding their medical care, and were able to agree on the appropriate religious instruction for their daughters. In the absence of better communication between the parties, perhaps this is an appropriate area for the District Court to establish more specific guidelines for the benefit of the children. However, we conclude that the evidence offered by Barbara does not establish that the children’s environment in Jerome’s home seriously endangered their physical, mental, moral, or emotional health. Therefore, we conclude that there was not substantial evidence to satisfy the jurisdictional prerequisite in § 40-4-219(l)(c), MCA, and that the District Court, therefore, erred by substantially altering the custodial arrangements provided for in its original decree.

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

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