author: MR. JUSTICE GULBRANDSON

text:
    LOCAL UNION NO. 400 OF THE INTERNATIONAL UNION OF OPERATING ENGINEERS, Plaintiffs and Respondents, v. VINCENT J. BOSH, Robert Voytoski, John C. Ball, Bob F. Davis, and James Kruse and Fidelity & Deposit Company of Maryland, Defendants and Appellants.
    No. 84-466.
    Submitted Dec. 5, 1985.
    Decided Feb. 27, 1986.
    715 P.2d 36.

      Cannon & Sheehy, Edmund F. Sheehy, Jr. argued, Helena, for defendants and appellants.
    Gough, Shanahan, Johnson & Johnson, Ronald F. Waterman argued, Helena, Goetz, Madden & Dunn, James Goetz, Bozeman, for plaintiffs and respondents.
   MR. JUSTICE GULBRANDSON

delivered the Opinion of the Court.

The defendants appeal from a jury verdict and judgment in favor of plaintiffs and respondents, Local Union No. 400 of the International Union of Operating Engineers (hereinafter Local 400), in Lewis and Clark County District Court. Defendants question Local 400’s standing to file the action; whether Local 400 failed to establish it was entitled to an accounting, thus barring recovery; whether Local 400 should have been required to answer certain interrogatories; whether jury instructions on defendants’ fiduciary duty to the Union, constructive fraud and the burden of proof, among others, were improper; and whether substantial evidence supported the verdict. We affirm.

Vincent J. Bosh held the position of business manager for Local 400 from 1976 until August 1981. Robert Voytoski and Bob F. Davis sat on Local 400’s executive board and both were assistant business managers as well.

In April 1981, Bosh announced he would not run for reelection in the upcoming August 1981 elections for health reasons. He then went on sick leave but continued to make all of the major decisions pertaining to Local 400 and drew his regular salary. Voytoski and Davis handled Local 400’s day to day affairs. Neither Voytoski nor Davis were candidates for business manager. After William Burlingame won the August election, a number of candidates filed protests. As a result, he was not installed into office as scheduled. Local 400’s executive board installed Voytoski as business manager pro tern. Davis continued as an assistant business manager. Jack Ball, not a party on appeal, also acted as an assistant business manager pro tern following the August election. Burlingame’s supporters filed protests to the International President of the Union who ordered that the pro tern administration vacate office and install the newly elected officers. This occurred on September 30, 1981.

After the new officers assumed their duties, Burlingame hired an accountant to conduct a special audit for January through September 30, 1981. The audit report criticized Bosh’s administration. The results demonstrated an increase in expenditures, a large decline in value of assets and a large increase in liabilities, despite a steady income from dues.

In Juné 1982, Local 400 filed suit against Bosh, Voytoski, Davis and the other defendants. The complaint requested an accounting, reimbursement of misappropriated funds, production of Union files and indemnification to the Union from the bonding company joined in the suit. Some allegations in the action relied on 29 U.S.C. Section 401, et. seq. of the Labor Management Reporting and Disclosure Act (LMRDA). Defendants removed the litigation to federal court and then moved to dismiss the complaint arguing Local 400 had no standing to raise the issues. The federal district court dismissed the claims and remanded the action back to state district court. The defendants then made another motion to dismiss and Local 400 requested reinstatement of the claims under federal law. The state district court denied both requests.

In May 1984, six weeks before trial, the District Court allowed Local 400 to amend its complaint to assert theories of constructive fraud and wrongful conversion of property. On the day of trial, the claim against the bonding company was severed from the claims against Bosh and the other defendants. At the close of all the evidence, the defendants moved for a directed verdict. As a result, the District court dismissed all claims against defendant James Kruse and some of the claims against the four remaining defendants. The jury found in favor of defendant John C. Ball; assessed damages against Bosh, Voytoski and Davis for $3,000; and assessed damages against Bosh individually for $46,404.

Bosh, Voytoski and Davis appeal from the jury verdict and subsequent judgment entered thereon by the District Court. They present five issues on appeal:

(1) Did the District Court correctly deny defendants’ motion for summary judgment claiming Local 400 lacked standing or the capacity to file the action?

(2) Did the District Court correctly deny defendants’ motion for a directed verdict claiming Local 400 failed to establish it was entitled to an accounting?

(3) Did the District Court correctly deny defendants’ motion to dismiss claiming Local 400 should have been required to answer interrogatories submitted by defendants?

(4) Did the District Court properly instruct the jury?

(5) Was the jury verdict supported by sufficient evidence?

In the first issue, appellants contend that Local 400 failed to exhaust the internal remedies prior to taking action in district court. They urge this Court to adopt the position that a union lacks standing to sue whenever it fails to exhaust administrative remedies available under the union’s constitution. Montana has not yet addressed the question of whether an action for breach of fiduciary duty will stand prior to an exhaustion of internal remedies. Other state courts have required the pursuit of internal remedies when the dispute concerns internal matters such as union policy, doctrine or discipline of members. See, e.g. Williams v. Vickers (1958), 74 Nev. 48, 321 P.2d 586 (union members’ action to enjoin union officers from acting contrary to international union’s constitution denied for failure to exhaust internal remedies). In De Monbrun v. Sheet Metal Workers Internat’l Ass’n. (1956), 140 Cal.App.2d 546, 295 P.2d 881, the California court held that the plaintiffs’ actions for misappropriation and mismanagement of funds against a union officer could be pursued in state court despite their failure to exhaust internal remedies because the actions concerned protection of property rights.

“. . . [I]f property rights are involved in the absence of an express agreement to exhaust the remedies provided within the association, the member may resort to the courts without using the within-the-Union remedies. And where property rights are involved the member need not first pursue the remedies within the association, if they would be futile, illusory, or vain.”

Nissen v. International Brotherhood, Etc., (1941), 229 Iowa 1028, 295 N.W. 858, 866, cited in De Monbrun, 295 P.2d at 894.

The case at bar concerns protection of union property and does not deal with internal matters. Local 400 pursued their action in District Court to recover money and property lost through defendants’ breach of fiduciary duty owed to the Union and its members. This is not a controversy over discipline, doctrine or policy. The remedy available through intra-union procedures provides for discipline to and possible expulsion of a member who violates his obligation with respect to Union monies, but does not provide for any recovery of the misappropriated funds. Since Local 400’s cause of action requested recovery of Union money and property, a remedy not available through union procedures, exhaustion of Union remedies would not afford the desired result and would be futile. We hold that the District Court correctly determined Local 400 need not exhaust internal remedies and therefore could pursue this action in District Court. Defendants’ motion for summary judgment was properly denied.

Defendants urge, in the second issue, that because Local 400 failed to prove it had made a demand for and had been refused an accounting, the District Court should have granted them a directed verdict. Generally the demand for an accounting need not be in any particular form, so long as it is sufficiently explicit to leave no room for doubt in a defendant’s mind that the plaintiff intended to demand an accounting. Johnston v. Silver (1921), 59 Mont. 195, 196 P. 515. Local 400 relied on a letter sent to each of the Union officers asking for “answers and/or comments” to a list of questioned costs and remarks, as a sufficient demand for an accounting and defendants’ lack of response as a refusal. When defendants made their motion for a directed verdict at the close of Local 400’s case, the District Court ruled that the question was one of fact for the jury and denied the motion. The jury could have found, on this evidence, that there had been both a demand and refusal. Since there was substantial evidence on both sides of this dispute, the District Court correctly refused to grant a directed verdict. Gunnels v. Hoyt (Mont. 1981), 633 P.2d 1187, 38 St.Rep. 1492.

We note that the jury did not award an accounting but instead independently calculated the money due from defendants. Defendants assert, in this appeal, that any verdict in favor of Local 400 depends on their entitlement to an accounting. We disagree. The action for an accounting was separate from the causes of action for constructive fraud, breach of fiduciary duty and conversion of property. As such, even if a directed verdict had been appropriate on this issue, the District Court’s refusal to so order is harmless error, given the jury verdict.

In their third issue defendants argue that this action should have been dismissed prior to trial when Local 400 failed to answer certain interrogatories. Local 400 had objected to the interrogatories seeking discovery of the legal theories of its complaint. While the District Court’s order does not specify why it denied defendants’ motion to dismiss, it appears from the record that the legal theories were readily available in earlier documents and briefs. By the time the hearing on this motion was held in January 1984, the parties had briefed and argued the grounds for removal to federal court, a motion to dismiss in federal court, the grounds for the return to state court, and another motion to dismiss in state court which resulted in dismissal of claimed violations of 29 U.S.C. Section 401, et seq., of the LMRDA. Local 400 fully set forth their reasons why mismanagement and misappropriation of funds gave rise to a cause of action under Montana law when replying to these motions. The District Court did not abuse its discretion when it sustained Local 400’s objections to these interrogatories and refused to dismiss the claims.

Defendants claim error in a number of jury instructions in the fourth issue. They claim that the instructions on (1) the duty owed by defendants to Local 400, (2) the burden of proof and (3) constructive fraud confused the jury; that the District Court erred in refusing their proposed instruction No. 10; and that the instructions were slanted in favor of Local 400.

The argument on the nature of the fiduciary duty owed by the defendants, as union officers, to Local 400 goes to the heart of the Union’s case. Defendants argue that the care required to satisfy any fiduciary duty of an officer to a union should be minimal; i.e., if the officer complies with the union’s constitution and byáws, the fiduciary duty is satisfied. To so rule could leave predatory actions of officers insulated from suit. We agree with the Pennsylvania Supreme Court that:

“[I]t would be anomalous if, in handling the funds of a labor organization, its officers and similar agents were not held to standards of good faith similar to those imposed upon the officers and directors of a corporation.”

Local No. 163, International Union of United Brewery, Flour, Cereal, Soft Drink and Distillery Workers of America v. Watkins (1965), 417 Pa. 120, 207 A.2d 776, 781. The better rule considers the duties, powers and obligations of the constitution and by-laws and imposes on an officer the requirement to act reasonably and prudently, as any trustee of funds and property belonging to another person or entity would act.

Federal law offers additional authority on the fiduciary nature of defendants’ positions as union officers. Congress, when enacting 29 U.S.C. Section 501 of the LMRDA, accorded federal protection to rights existing under state law and intended to hold union officers responsible as fiduciaries for funds entrusted to them. Some of that section’s legislative history illustrates the applicable fiduciary principles:

“The general principles stated in the bill are familiar to the courts, both State and Federal, and therefore incorporate a large body of existing law applicable to trustees, and a wide variety of agents . . .
“H.R. Rep. No. 741, 86th Cong., 1st Sess. 81 (1959).
“The bill imposes upon labor union officials the responsibilities of a fiduciary. The exact application of general fiduciary principles always takes into account the nature of the enterprise. A corporate director is not judged in exactly the same fashion as a family trustee, but both are subject to the highest duty of fiduciary responsibility. The bill establishes exactly the same test for union officials.
“105 Cong. Rec. A6573 (1959), Leg. Hist. 1051.”

The Fiduciary Duties of Union Officials Under Section 501 of the LMRDA, 52 Minn.L.Rev. 437, 446 (1967).

In this case, the District Court instructed the jury on the duty of fiduciary responsibility by comparing it to a trust relationship; by stating that, as fiduciaries, the officers were required to act prudently; and by allowing the jury to consider the duties, powers and obligations in the Union constitution and by-laws. These instructions were consistent rather than confusing, and accurately set forth the nature of defendants’ responsibilities, as Union officers, to Local 400.

The defendants also claim that the instructions on the burden of proof confused the jury. The court gave a general instruction that the party who asserts the affirmative of an issue, has the burden of proving that issue by a preponderance of the evidence. Following the instructions on the fiduciary nature of the defendants’ position, the District Court instructed that if a fiduciary profits personally from the use or receipt of union funds, the burden shifts to the fiduciary to show he acted reasonably. Finally, in an instruction which referred to the defendants’ duty to keep proper accounts, the District Court instructed that the person with the duty has the burden of proving that he is entitled to the credits he claims. Shifting the burden to defendants if Local 400 proved that they profited personally from union funds is nothing more than moving the burden to the party “who would suffer a finding against him,” if no additional evidence were produced. Section 26-1-401, MCA. This instruction did not contradict the general instructions and was not inaccurate. The instruction referring to keeping proper accounts and the burden of proof followed a common rule in an action for an accounting, that the agent or person who has the funds in his control has the burden of proving a proper disposition of those funds. See, e.g., 3 Am.Jr.2d Section 348, Agency, p. 706 and 90 C.J.S. Section 414, Trusts, p. 782. This instruction specifically referred to the keeping of proper accounts. As such, it accurately stated the law, was not improperly slanted toward Local 400 and did not contradict the general instruction.

Defendants contend that the instructions on constructive fraud should not have been given because this case did not involve a contract and constructive fraud is not applicable to an action for an accounting or for breach of a fiduciary duty. This contention inaccurately characterizes the requirements for an action for constructive fraud. Dealings or transactions between parties who have a fiduciary relationship provide a sufficient contract to support such an action. Here, the questioned transactions involving Union money and property changing hands, combined with the duties and obligations between the officers and Local 400, established the necessary relationship between the parties. This relationship, along with the other elements established at trial, supported the District Court’s giving of instructions on constructive fraud.

Defendants’ instruction No. 10, refused by the District Court, stated that money paid by one to another was due to the other, taken from Section 26-1-602(7), MCA. The District Court refused it as confusing and incorrect as it applied to this case. The instructions, as a whole, adequately describe the applicable law. Under the circumstances, the District Court did not err by refusing this instruction.

In the last part of the fourth issue, the defendants contend that a number of instructions were biased in Local 400’s favor. Most of these challenged instructions are discussed above. Of the two remaining instructions to be discussed, we note first that defendants made no objection to court’s instruction No. 14. Even if the giving of this instruction had been error, an instruction not objected to cannot be the basis for a reversal on appeal.

The last challenged instruction, No. 34, defined damages and stated generally the measure of damages. Other subsequent instructions elaborated on the measure of damages and were given without objection from defendants. Court’s instruction No. 34, along with the other damage instructions, adequately reflects the definition of damages and their measure. The evidence and testimony given by Local 400’s witnesses at trial could have supported a larger verdict. These instructions do not indicate any bias in favor of Local 400.

We hold that the District Court properly instructed the jury.

The final issue raised by defendants questions the sufficiency of the evidence to support the jury verdict. A jury’s verdict, if supported by substantial evidence, will not be overturned on appeal. Gibson v. Western Fire Ins. Co. (Mont. 1984), [210 Mont. 267,] 682 P.2d 725, 41 St.Rep. 1048. The evidence may be weak or conflict with other evidence but still adequately support the verdict. Gunnels, 633 P.2d 1187, 38 St.Rep. 1492. Defendants contend that because no one testified as to the specific amount of money they might owe the Union, the verdict awarding money damages should be reversed. The jury heard evidence on mismanagement and self-dealing with regard to Union funds and property. The financial losses of the Union during Bosh’s administration were part of the evidence. According to Local 400, defendants failed to make or maintain adequate records of financial transactions in many instances. This evidence supported a jury’s finding a loss of funds attributable to the mismanagement and breach of duty of the defendants. The evidence may have contained contradictions, but it was substantial and therefore adequate to support the jury’s verdict.

The jury verdict and judgment entered thereon are affirmed.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, HUNT, WEBER and MORRISON and HON. THOMAS A. OLSON, District Judge, sitting in place of MR. JUSTICE SHEEHY.


source: Caselaw Access Project

author: MR. JUSTICE HUNT MR. JUSTICE MORRISON,

license: Public Domain

text:
    JAMES A. STILLMAN and Julia A. Stillman, Plaintiffs and Appellants, v. FERGUS COUNTY, Montana, and City of Lewistown, Montana, both acting through their joint City-County Planning Board and Board of Adjustment, Defendants and Respondents.
    No. 85-174.
    Submitted on Briefs Aug. 22, 1985.
    Decided March 4, 1986.
    715 P.2d 43.

      Torger S. Oaas, Lewistown, for plaintiffs and appellants.
    Joseph P. Gilligan, Smith, Baillie & Walsh, Great Falls, Thomas P. Meissner, Lewistown, for defendants and respondents.
   MR. JUSTICE HUNT

delivered the Opinion of the Court.,

The Stillmans appeal from an order of the Fergus County District Court dismissing their complaint for damages as to defendant Fergus County. The dismissal was granted pursuant to Fergus County’s Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted, and the court entered a final judgment pursuant to Rule 54(b).

Reversed.

The sole issue raised by appellants is whether the District Court properly granted respondent Fergus County’s motion to dismiss for failure to state a claim. •

In deciding a motion to dismiss, the District Court can consider matters of public record as well as the allegations in the complaint. All well-pleaded allegations are deemed admitted. A motion to dismiss should not be granted unless it appears beyond doubt that a plaintiff could prove no set of facts entitling him to relief. Willson v. Taylor (Mont. 1981), 634 P.2d 1180, 38 St.Rep. 1606.

The zoning plan of Fergus County and the City of Lewistown involves two entities. The Board of Adjustments is an agency of the city and has the authority to grant zoning variances. The City-County Planning Board has certain duties regarding notice, and serves in an advisory capacity to the Board of Adjustments. The Zoning Coordinator and Planning Director, John Hughes, is an employee of the planning Board.

Jerry Cloyd’s home is located next to appellant’s home in Lewis-town, Montana. Both homes are in an area zoned “Residential Two Family” (R-2) under Lewistown’s zoning plan. Cloyd applied to the Zoning Coordinator for a variance to allow him to build an addition extending two feet into the five foot side yard set-back area.

Hughes sent out notices on Planning Board stationery to various Lewistown residents informing them of Cloyd’s application. Appellants received this notice. Appellants allege these notices were inadequate, misleading, and incorrect.

Cloyd was granted the variance. Appellants allege the Planning Board and the Board of Adjustments granted this variance and that it was granted without proper notice, without a legal hearing, and without considering the legal requirements for the allowance of a variance.

The District Court dismissed appellant’s claim as to Fergus County. The court ruled that no set of circumstances could be established to render Fergus County liable for the acts alleged in the complaint. The order contained no findings of fact, but in the transcript the judge concluded that the Board of Adjustments has the exclusive power to grant zoning variances and the Board of Adjustments is an agent of the city of Lewistown. The Planning Board serves only in an advisory capacity. Therefore, the county is not responsible for the actions of the Board of Adjustments including the granting of the variance. This conclusion is incorrect for two reasons.

First, the appellants may be able to show that the Planning Board is directly liable to appellants because of acts committed by the Planning Board itself, through its employee, Hughes. The notice sent by Hughes to appellants stated that Cloyd “requested a variance to allow him to extend his kitchen 2 feet.” Cloyd’s actual request was for a variance to extend his kitchen 2 feet into the side yard set-back area for a total extension of 13 feet. This notice sent to appellants may give rise to liability of the Planning Board under a theory of negligence, estoppel, or reliance, regardless of which entity actually granted the variance.

Second, even if appellant’s claim is based upon an agency theory, this may not preclude liability of the county. While there are no Montana cases on this subject, there is a long line of California cases which hold that, normally, allegations of agency are questions of fact and should not be decided on motion for summary judgment. Skopp v. Weaver (1976), 16 Cal.3d 432, 128 Cal.Rptr. 19, 546 P.2d 307; Farr v. Bramblett (1955), 132 Cal.App.2d 36, 281 P.2d 372, 281 P.2d 372. However, when dealing with a government entity, such as a county, this is not always true. A principal cannot delegate authority it does not possess. The authority of Fergus County, the Planning Board, and the Board of Adjustments is a matter of public record. So a claim of agency involving a government principal can be decided on motion for summary judgment by establishing the authority of the principal which, as a matter of public record, all citizens are charged with knowing. If the principal does not have the authority necessary to establish an agency relationship, a motion to dismiss is proper.

However, while a government principal’s authority may be limited by law, the principal may go beyond that authority in its day to day activities. In other words, while an agency relationship may be precluded by law, such a relationship may still exist in fact.

This is especially possible in the case at bar, where the two entities in question, the Planning Board and the Board of Adjustments, work closely together and deal with the same subject, zoning. Evidence of the two groups’ close association is a matter of public record. The Lewistown Municipal Zoning Ordinance provides that the Board of Adjustments has the power to grant variances. Applications for variances are directed to the Zoning Coordinator, an employee of the Planning Board. The Zoning Coordinator then consults with other departments of the city to fully evaluate the impact of the variance, studies the application with reference to its appropriateness and effect on land use, provides various notices for publication and to specified individuals, reports his findings to the Board of Adjustments, and other similar duties.

This active participation in the zoning variance process by the Zoning Coordinator is sufficient to support an argument that Fergus County is liable to appellants. Appellants should be given the opportunity to show that Fergus County, through its agents, the Planning Board and Zoning Coordinator, actively participated in the granting of the allegedly erroneous variance. If discovery proves the non-existence of an agency relationship, then Fergus County may obtain a summary judgment. If appellants’ proof at trial fails to raise a jury question as to the existence of this agency relationship, then Fergus County may obtain a directed verdict.

We cannot agree that in the present situation appellants can prove no set of facts entitling them to relief. Therefore, the order of the District Court dismissing appellants’ claim against Fergus County is reversed.

Reversed.

MR. JUSTICE HARRISON concurs.

MR. JUSTICE MORRISON,

specially concurring:

I concur in the result. The only issue presented to this Court concerns the question of agency.

The purpose of this concurring opinion is to stress that we are not deciding the question of whether either Fergus County or the City of Lewistown can be held liable in tort for the negligence of either their servants or agents while exercising discretion in the discharge of their official duties. That question was not presented to the trial court nor is it before this Court. I assume that question will be presented on summary judgment.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICE WEBER join in the special concurrence of MR. JUSTICE MORRISON.


author: MR. JUSTICE HARRISON

text:
    DOROTHY L. SHARBONO, Plaintiff and Appellant, v. THOMAS F. DARDEN and Norma J. Darden, Defendants and Respondents.
    No. 85-241.
    Submitted Oct. 30, 1985.
    Decided March 4, 1986.
    715 P.2d 433.

      Garnaas, Hall, Riley & Pinsoneault, J. Robert Riley, Christopher Daly, argued, Missoula, for plaintiff and appellant.
    Datsopoulos, MacDonald & Lind, Christopher B. Swartley, argued, Missoula, for defendants and respondents.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

This is an appeal from a judgment issued by the District Court, Fourth Judicial District, Missoula County, Montana. After a bench trial, the Honorable Jack Green awarded plaintiff a judgment of $4,488.46 including certain interest amounts.

Plaintiff filed consolidated post-trial motions moving the court for an amended judgment in conformity with her proposed findings of fact and conclusions of law, or in the alternative, for a new trial under Rule 59(a) to set aside or modify the court’s findings of fact and conclusions of law and judgment. An amended post-trial motion was filed setting forth with more particularity the grounds in support of the motions. The motions were denied. We affirm.

Plaintiff-appellant, Dorothy Sharbono, with her now deceased husband, L.G. Sharbono, purchased a five acre tract of land in Missoula County from J. Dean Roach, sometime after October 1969. The land was conveyed by warranty deed. Roach had purchased a ten acre tract from Alex N. Ogilvie in October, 1969, on a contract for deed. These ten acres were part of a 160 acre tract which Ogilvie had acquired prior to 1964. The Federal Land Bank of Spokane, Washington, held a mortgage on the 160 acres, which was recorded in Missoula County, Montana, in 1964. A re-amortization agreement modifying the terms of payment was recorded in May, 1967. In September, 1974, Sharbonos sold their five acres, on which was located a modular home, to Orian and Ngoc Alexander on a contract for deed. Two years later Alexanders assigned their buyers’ interest in the contract to Thomas F. and Norma Jean Darden, husband and wife, defendants-respondents in this action.

Dardens assumed all of Alexanders’ obligations under the contract. The monthly payments of $229.78 were made to First State Bank of Missoula, escrow agent, which was to forward $30.50 a month to Farmers State Bank in Victor, Montana, to be applied on the Ogilvie-Roach contract held in escrow there. An addendum to the contract provided that the escrow agent was to forward $144.41 per month to Western Montana National Bank of Missoula for payment on the modular home. The balance of the payment, $54.87, was forwarded to Sharbonos in Newton, Kansas.

The entire balance was due and payable on or before five years from the date of the contract. The contract provided the buyers were to “keep the improvements on the property insured for fire and extended coverage in at least the amount of the unpaid interest due . . ., payable as interests appear.” Dardens purchased fire insurance naming themselves and Western Montana Bank as insureds, but did not name the Sharbonos.

Dardens did not make the tax payment for 1978 when the first half was due November 30, 1979. Nor did they make any thereafter. They did make timely monthly payments on the contract until the balloon payment was due. They did not tender the balance due September 23, 1979, under the balloon payment, and a notice of default was delivered October 8, 1979.

Meanwhile, Roach paid off the contract with Ogilvie in April, 1979, but a mortgage release from the Federal Land Bank was not recorded until February, 1980.

L.G. Sharbono died December 29, 1979. As a result, the balance due the Western Montana National Bank on the modular home was paid by a credit life insurance policy on his life. In March, 1980, the Dardens entered into a lease and option to purchase with David L. and Paulette M. Pittsley. The Pittsleys took actual possession of the property. In June, 1981, a fire totally destroyed the modular home. The Dardens received $33,500 proceeds from the insurance policy they carried on the property.

After the Dardens received this money, a second default notice was delivered in September, 1981. On October 1, 1982, Mrs. Sharbono filed suit alleging breach of contract for deed, demanding specific performance from defendant and a judgment for $36,253.02, or in the alternative, rescission of the contract for deed and ownership of the property plus judgment for $12,453.02.

There is an abundance of chaff in this case. Once it is removed, the only substantive issue is whether the judgment of the District Court is proper, or whether it results from an abuse of discretion.

Mrs. Sharbono argues six findings of fact omitted by the District Court resulted in erroneous conclusions of law detrimental to her. Specifically, she claims she is entitled to a larger judgment. She acknowledges any one of the abuses would not be sufficient to mandate a new trial or amended judgment, but together they constitute sufficient abuse to warrant action. This Court will not disturb findings of fact in a non-jury civil action unless they are clearly erroneous. Rule 52 M.R.Civ.P., Price Building Service, Inc. v. Christensen (Mont. 1985), [215 Mont. 428,] 697 P.2d 1344, 1348, 42 St.Rep. 440, 444. The Court will not disturb the District Court’s findings as being clearly erroneous in this case.

Dardens did not tender the balloon payment when due. The question is whether failure of Mrs. Sharbono to convey good title excuses Dardens’ default, thereby entitling Dardens to keep the insurance money they received when the modular home burned. The District Court’s findings did not include the fact that Dardens’ failure to make the balloon payment constituted a default under the terms of the contract:

“DEFAULT:
“. . . if the Buyers fail to make the payments herein provided for or fail to perform any of the other covenants and agreements on their part to be kept and performed when the same are due or to be performed, or within thirty days after written notice is given to them by the Sellers, then and in that event the Sellers may, at their option, terminate this agreement and declare it to be null and void, in which event all of the buyer’s rights hereunder shall be terminated, and all monies theretofore paid by the Buyers shall be retained by the Sellers as reasonable rent and as damages, and Sellers shall have the right to immediately reenter and recover full and exclusive possession of the premises.”

Sharbono could not convey clear title to Dardens in September, 1979, because Roach had not conveyed clear title to her. When Roach paid off Ogilvie in April, 1979, he did not obtain a mortgage release on the land he had purchased from Ogilvie and sold to Sharbono. The inability to convey clear title puts Sharbono in breach of the terms of the contract:

“Seller Warrants [the existing mortgage] is current and agrees to continue paying and satisfy [the mortgage] prior to the buyers’ completing this contract.”

By the terms of the contract, satisfaction of the mortgage by Sharbono is a condition precedent to Dardens’ completion of the contract. A condition precedent is “. . . one which is to be performed before some right dependent thereon accrues or some act dependent thereon is performed.” Section 28-1-403, MCA. The contract also is clear that Sharbono must be able to convey title concurrent with Dardens’ payment of the balloon. “Conditions concurrent are those which are mutually dependent and are to be performed at the same time.” Section 28-1-404, MCA. The court found “Dardens failure to pay the balloon payment when due or in response to the notice of default was excused by Sharbono’s prior breach of contract.” We agree.

The issue can be resolved by determining the legal and/or equitable interests of the parties as they relate to liability. When real estate is sold on a contract for deed, as it was in this case, the doctrine of equitable conversion traditionally has been applied by the courts when dealing with legal questions which may arise between the time the real estate contract is executed and the time it is performed.

“Under the doctrine of equitable conversion, a contract of purchase and sale of real estate vests the entire beneficial interest in the land in the vendee. During the life of the contract, the vendor retains legal title only as security for the purchase price. The vendee’s interest is a real interest, whereas that of the vendor is held to be a personal property interest in the purchase price.”

First State Bank v. United States (9th Cir. 1937), 92 F.2d 132, 134. (Applying Montana law.) See also Kern v. Robertson (1932), 92 Mont. 283, 288, 12 P.2d 565, 567.

Questions which arise under this doctrine can be divided into one of two categories: characterization issues, whether the property interest is real or personal, or risk/loss issues. It is risk/loss with which we are concerned here. In a risk/loss situation equitable conversion imposes the loss on the vendee. The majority of American courts either have adopted or recognize the doctrine of equitable conversion which places the risk/loss on the vendee from the moment of signing. See for example, Zitzelberger v. Salvatore (1983), 312 Pa.Super. 402, 458 A.2d 1021; Ridenour v. France (Ind.1982), 442 N.E.2d 716; Utah State Med. Assoc. v. Utah St. Employee Credit Union (Utah 1982), 655 P.2d 643; Re Foreclosure of Deed of Trust Given by Taylor (1982), 60 N.C.App. 134, 298 S.E.2d 163. Under the majority view, however, the risk of loss remains on the vendor until he can deliver clear title.

“[I]t is well settled that the doctrine of equitable conversion, which in the absence of a specific contract provision passes the risk of loss to the purchaser, only applies when the seller is able to convey title as required in the contract. “If the vendor is so situated that he cannot make title according to the contract, the purchaser will not be regarded as the owner; and if the property is damaged before the vendor is in condition to convey, the loss must fall on him, and not on the purchaser.” [Citations omitted.]

Phillips v. Bacon (1980), 267 S.E.2d 249, 250. See also Parr-Richmond Industrial Corp. v. Boyd (1954), 43 Cal.2d 157, 272 P.2d 16; Amundsen v. Severson (1919), 141 S.D. 377, 170 N.W. 633; Pindar, American Real Estate Law, 701, Section 18-24 (1976). In the case at bar, the doctrine does not apply because Sharbono did not have clear title to convey to Dardens at the time the balloon payment was due.

We do not find the facts, conclusions and judgment of the District Court to be an abuse of discretion. The District Court’s conclusion that Dardens had breached the contract by their failure to obtain fire insurance with the proper loss payable clause does not affect the judgment. We find Dardens failure to name Sharbono as an insured party did not put them in default. Their failure to make the balloon payment when due is excused by Sharbono’s inability to convey title. No attorney fees are to be awarded either side. The judgment of the District Court is affirmed.

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


text:
    In re the MARRIAGE OF JANET MARIE WESSEL, Petitioner and Respondent, and LESTER FAY WESSEL, Respondent and Appellant.
    No. 85-364.
    Submitted on Briefs Dec. 5, 1985.
    Decided March 4, 1986.
    715 P.2d 45.

      W.G. Gilbert, Jr., W.G. Gilbert, III, and Thomas R. Scott, Dillon, for respondent and appellant.
    Berg, Coil, Stokes & Tollefsen, Michael C. Coil, Bozeman, for petitioner and respondent.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

This is an appeal by the husband from a judgment of the District Court of the Fifth Judicial District, Madison County, dividing the marital property of the parties and establishing a payment plan by which the husband was to buy out the wife’s interest in the family ranch corporation. We affirm.

Janet Wessel (“Janet”) and Lester Wessel (“Lester”) grew up in ranching families in Madison County, Montana. They were married in 1967 and had three children, all minors at the time of the trial. Nine years into their marriage, Janet and Lester, together with Lester’s parents, incorporated their various ranching interests into a Sub Chapter S corporation known as the “Wessel Ranch.” 1,000 shares of stock were issued to each of the four stockholders in the corporation, with Lester’s parents receiving 670 shares, Lester receiving 251 shares and Janet receiving 79 shares. The corporation thereafter provided Janet and Lester with their home, all utilities, various groceries, a car, and various living necessities. Lester also received $800 as his monthly wage from the corporation.

During Lester’s and Janet’s marriage, Janet’s father passed away. Janet’s mother inherited the family ranch known as the “Wellman Ranch.” As part of Janet’s mother’s estate planning, she gifted the ranch under an annuity plan to Janet and her sister with each receiving a one-half interest in the ranch.

After seventeen years of marriage, Janet petitioned to have her marriage with Lester dissolved. Janet subsequently purchased a mobile home to live in with her children using funds loaned from the Wessel Ranch corporation. Janet also started working at a local bakery, netting approximately $115 per week.

The Madison County District Court, after a trial held December 13 and 14, 1984, dissolved the marriage of the parties. In its judgment dated February 21, 1985, the District Court ordered, in relevant part to this appeal, that all of the stock owned by the parties in the Wessel Ranch shall be divided so that Lester and Janet each receive 165 shares. Further, Lester was given the option of purchasing Janet’s 165 shares of stock at $800 per share for a total of $132,000, less a $15,000 credit for his assumption of Janet’s mobile home loan.

The judgment further provided that if Lester failed to exercise the purchase option regarding Janet’s shares of stock by October 1, 1985, he was to execute and deliver to Janet a promissory note for the principal sum of $117,000. The note was to be dated March 5, 1985, and to provide for equal annual payments, amortized at 8% interest over a period of 30 years (approximately $10,300 per year), with a final balloon payment due on March 5, 1995. The note was to provide for the right of pre-payment and was to be secured with Lester’s shares of stock in the Wessel Ranch. The first annual payment on the note is due on March 5, 1986.

The judgment also provided that Janet’s one-half interest in her family ranch (“Wellman Ranch”) being gifted to her from her mother under an annuity plan, was not part of the marital estate and therefore not subject to any marital claim.

In addition, the District Court ordered the following, although Lester does not specifically object to these items except as they relate to his ability to pay Janet for her shares of stock in the Wessel Ranch:

1. The parties were awarded joint custody of the children with Janet having physical custody of the two youngest children and Lester having to pay Janet $300 per month in child support. Lester was awarded custody of the oldest child and is responsible for his support.

2. Lester shall provide medical insurance for all three children.

3. Lester shall assume the $15,000 loan on Janet’s mobile home.

4. The parties’ credit card and bank loans shall be shared equally by Janet and Lester.

5. Lester shall assume the loan on Janet’s car.

It should also be noted that although at the time of trial the net worth of Wessel Ranch exceeded $1,000,000, the record indicates the ranch is currently suffering some financial difficulties. The record shows the ranch is overburdened with operating debt, and the generally distressed agricultural economy shows little prospect of immediate relief for the ranch. Also, the dissolution of the parties’ marriage has compounded the ranch’s credit situation.

Lester basically presents the following issues for review by this Court:

(1) Did the District Court abuse its discretion by ordering Lester to buy Janet’s shares of stock in the family ranch corporation?

(2) Did the District Court abuse its discretion by excluding from the marital estate ranch property gifted to Janet by her mother?

(3) Is the evidence adequate to support the District Court’s Findings of Fact and Conclusions of Law?

Under the first issue, Lester basically concedes that the judgment of the District Court ordering him to buy Janet’s shares of stock in the Wessel Ranch is appropriate, but he argues that the judgment should be modified to provide for a lower annual payment without interest. Lester argues in light of the financial condition of the ranch, neither he nor the ranch have the assets or funds to pay the sums to Janet mandated by the District Court. Specifically, Lester argues the District Court disregarded the rule of In Re Marriage of Jacobson (1979), 183 Mont. 517, 525, 600 P.2d 1183, 1187-88, which states:

“It must be remembered that the primary right to be considered in disposing of marital property is the right of each party to an equitable apportionment of the marital assets. While it is the policy of the courts of this state to avoid splitting up a ranch or forcing its sale where there is any reasonable alternative, that policy, however commendable, cannot be used to override the wife’s right to an equitable share of the marital property.” (Emphasis added.)

Lester argues there was no “equitable apportionment of the marital assets” by the District Court because it is not financially possible for him or the ranch to satisfy the requirements of the judgment. We disagree.

First, it must be noted that the District Court has the discretion during a marriage dissolution to determine what method of payment is best suited for dividing up the parties’ respective interests in a family ranch corporation. For example in Burleigh v. Burleigh (1982), 200 Mont. 1, 650 P.2d 753, this Court held that in place of awarding actual shares of stock to the wife, the District Court can award annual payments to the wife as payment for her shares of stock held in a family ranch corporation.

“We can similarly dispose of the husband’s contention that the District Court should have made a distribution of the stock in kind, i.e., that the wife should have been given some of the shares instead of the right to annual payments. Simply because this option was open to the court is no reason that the district judge had to select it. Under the circumscribed standard of review established by Zell and numerous other cases, there was no error in the District Court’s failure to distribute the property in kind.”

Burleigh, 650 P.2d at 757.

Therefore, because Burleigh supports the District Court’s method of paying Janet for her shares of stock in the Wessel Ranch, the only question remaining is whether the size of the annual payments and the interest rate chosen by the District Court are proper or if they are an abuse of discretion which requires reversal.

While Lester strongly argues that no interest should be charged on any annual payments he will make to Janet, this Court has already stated that allowing interest on an amount to be paid over time is within the discretion of the District Court.

“The 7 percent interest rate is below that charged by commercial and governmental lending institutions. The case of In re Marriage of Brown (Mont.1978), 587 P.2d 361, 367, 35 St.Rep. 1733, merely suggested that the District Court could order the remaining balance paid without interest. It did not say that the trial court could not allow interest, and the allowance of interest lies within the court’s sound discretion.”

Jacobson, 600 P.2d at 1188.

The interest rate of 8% awarded by the District Court in this case is below the legal rate allowed by current statutory law (Section 31-1-106, MCA), and was well below the market rate in effect at the time of this judgment and is also below the current market rate. Clearly such an award of interest does not result in substantial injustice and therefore was not an abuse of discretion by the District Court.

Lester’s major complaint concerning the District Court’s judgment is that the size of the annual payments required of him to purchase Janet’s shares of stock in the family ranch corporation are too large. Lester basically argues that the evidence is insufficient to support the size of these annual payments. Specifically, Lester argues:

1. That his first year payment of all the sums due to Janet under the judgment (including child support, loans, stock payment) is nearly $25,000.

2. That he does not now have, and cannot obtain, funds to purchase Janet’s shares of stock.

3. The Wessel Ranch does not now have, and cannot obtain, funds to purchase Janet’s shares of stock in light of its current financial distress.

4. That Lester’s parents (the majority stockholders of the Wessel Ranch) do not now have, and cannot obtain, funds to purchase Janet’s shares of stock.

Lester argues, in light of the above listed items, that the payment schedule set up by the District Court will be impossible for him to meet. Therefore, Lester points out, it is highly probable that the Wessel Ranch may be forced to liquidate in order to cover the obligations the District Court has imposed upon him in favor of his ex-wife. We disagree with Lester’s conclusions.

First, this Court notes that requiring a husband to buy his ex-wife out of a family business will undoubtedly always be a financial burden. While Lester argues that he will be unable to meet this burden, the following facts presented at trial tend to counter his argument:

1. The Wessel Ranch does have a net worth of over $1,000,000 giving the stock a net worth of over $1,000 per share.

2. Considering all the benefits received by Lester through the ranching corporation (including groceries, vehicles, housing, etc. . . ), his actual annual income exceeds $20,000.

3. Lester stands to inherit the entire Wessel Ranch corporation.

Further, there is no evidence in the record that an award to Janet of one-half of the marital estate in the sum of $132,000 will require liquidation of the family ranch. There are numerous alternatives available to Lester to cover his obligation short of liquidation, and to suggest that the only alternative to satisfy his obligation is to liquidate the entire Wessel Ranch which has a net value of over $1,000,000 has little merit. Also, although Lester makes a valid argument that the ranching industry is currently suffering from hard times, the cattle business by nature is cyclical and simply because Janet has chosen to dissolve this marriage at the bottom of the cycle should not preclude her from receiving her fair share of the marital estate accumulated after 17 years of diligent effort with Lester.

Lastly, the actual size of the annual payments required of Lester are not too large. The District Court amortized the payments over thirty years and required a balloon payment on March 5, 1995. The use of a thirty year amortization schedule is not so short or so abnormal in today’s financial markets as to cause this Court to conclude that the use of the same is an abuse of discretion by the District Court.

In conclusion under this issue, while there is little doubt that the District Court’s judgment requiring Lester to purchase Janet’s 165 shares of stock in the Wessel Ranch is a hardship, the District Court did not abuse its discretion by using an 8% interest rate and requiring Lester to pay his obligation on an annual basis for 30 years in the sum of approximately $10,300 per year. We hold there was a “equitable apportionment of the marital assets” as required by Jacobson quoted above.

Under the second issue, Lester argues that the “Wellman Ranch” property being gifted to Janet by her mother for inheritance purposes should have been included in the marital estate. The District Court directly addressed this issue in its findings of fact and conclusions of law as follows:

“The petitioner [Janet] has acquired a one-half interest in a $360,000 parcel of property [Wellman Ranch], gifted to her from her mother under an annuity plan. While there is a claim that respondent [Lester] contributed to this separate estate in kind and by Wessel Ranch money, the contribution was not significant. This property will be considered as separate property unencumbered by any marital claim, as will respondent’s potential inheritance from his father and mother.”

This Court has previously addressed the question of whether property received by gift or property inherited by one of the parties is to be considered in determining the marital estate. On facts not unsimilar to those of the instant case, this Court held as follows:

“Here, respondent received her stock in Mill Creek Farm as a gift under her parents’ estate planning scheme. Moreover, neither party worked on the farm except for isolated odd jobs. At trial, appellant replied ‘absolutely not’ when asked if he felt he had made a significant contribution to the farm operation. He also agreed with counsel’s remark that appellant made no claim to any interest in the family farm . . . [T]he District Court could justifiably find that appellant had no interest in respondent’s stock. (Citations omitted.) We hold that there was no abuse of discretion in excluding respondent’s stock from the marital estate.”

Becker v. Becker (Mont. 1985), [218 Mont. 229,] 707 P.2d 526, 528-29, 42 St.Rep. 1541, 1544.

In the instant case, Janet received her one-half interest in the Wellman Ranch belonging to her side of the family directly from her mother. Janet’s mother would give Janet funds each year from lease payments on the ranch, and these funds would then be returned to Janet’s mother in the form of payments for the ranch. The record indicates this complex arrangement was clearly for estate planning purposes. Further, the District Court found Janet’s one-half interest in her family ranch was acquired by gift and Lester’s contribution to the ranch was not significant.

Thus the facts in the instant case are very similar to the facts contained in the Becker case. In the instant case, as in Becker, the wives received their interest in the family ranch/farm as gifts directly from their sides of the family. Also in both of these cases the gifts were made for estate planning purposes. Further, the husbands in both cases did not contribute significantly to the property.

Although the District Court did not have the benefit of the Becker decision at the time it made its ruling in the instant case, it obviously followed the logic expressed in Becker very closely and did not abuse its discretion by excluding Janet’s interest in the Wellman Ranch from the marital estate.

The third and final issue raised by Lester is whether the findings of fact and conclusions of law of the District Court are supported by the evidence. This Court has established, through a long line of cases, the standard of review in dissolution actions. First, the standard of review is clear regarding the division of marital property.

“In dividing property in a marriage dissolution the district court has far reaching discretion and its judgment will not be altered without a showing of clear abuse of discretion. The test of discretion is whether the trial court acted arbitrarily without employment of conscientious judgment or exceeded the bounds of reason resulting in substantial injustice.”

Becker, 707 P.2d at 528; citing In re Marriage of Vert (Mont. 1984), [210 Mont. 24,] 680 P.2d 587, 41 St.Rep. 895.

Second, we note this Court will not set aside the trial court’s findings of fact unless shown to be clearly erroneous.

“Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses.
“Furthermore, findings of fact are not clearly erroneous if supported by substantial credible evidence.
“This Court’s function ... is not to substitute its judgment in place of the trier of facts but rather it is ‘confined to determine whether there is substantial credible evidence to support’ the findings of fact and conclusions of law. [Citations omitted.] Although conflicts may exist in the evidence presented, it is the duty and function of the trial judge to resolve such conflicts. His findings will not be disturbed on appeal where they are based on substantial though conflicting evidence.” [Citations omitted.]

In Re Marriage of Obergfell (Mont. 1985), [218 Mont. 83,] 708 P.2d 561, 563-64, 42 St.Rep. 1414, 1417-18.

We conclude, as explained in the opinion above, that the district Court did not abuse its discretion in dividing the marital property of the parties. Also, we hold there is substantial credible evidence on the record to support the findings of fact and conclusions of law of the District Court. Therefore, we affirm the District Court’s distribution of the marital estate.

The judgment of the District Court is affirmed.

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


text:
    LEO HUBER and Emilia Huber, a partnership d/b/a Libby Theaters, Plaintiffs and Respondents, v. COMMISSIONER OF LABOR AND INDUSTRY, State of Montana, ex rel., Scott KIRSCHENMANN, Claimant and Appellant.
    No. 85-256.
    Submitted on Briefs Nov. 6, 1985.
    Decided March 11, 1986.
    715 P.2d 440.
    L. Charles Evans, Libby, for claimant and appellant, Kirschenmann.

      Garnaas, Hall, Riley & Pinsoneault, H.L. Garnaas, Missoula, for plaintiffs and respondents.
   MR. JUSTICE GULBRANDSON

delivered the Opinion of the Court.

Scott Kirschenmann appeals a Lincoln County District Court order which awards him the amount of his wage claim but denies him his attorney’s fees. The sole issue on appeal is whether Section 39-3-214, MCA, entitles appellant to his attorney’s fees at the District Court level where the Commissioner of Labor’s attorney, who intervened on appellant’s behalf, may have adequately represented appellant and it may not have been necessary for appellant to hire his own private counsel. We reverse and remand to the District Court.

Leo and Emilia Huber (respondents) own and operate the Dome & Libby Drive-In Theaters. In June 1983, appellant filed a wage claim with the Labor Standards Division of the Department of Labor and Industry, contending that he did not receive wages owed to him for services performed for respondents. After respondents filed an answer, the Department of Labor and Industry set a hearing date. The hearing was held in April 1984 and appellant was represented by private counsel. In May 1984, the hearing officer entered his findings of fact, conclusions of law and order, ruling that respondents owed appellant $1,113.75 in wages plus $1,113.75 as a penalty under Section 39-3-206, MCA. Pursuant to Section 2-4-702, MCA, respondents filed a petition in Lincoln County District Court for judicial review of the hearing officer’s decision. Promptly thereafter, the Commissioner of Labor and Industry moved before the court to intervene on behalf of the employee (appellant here). The court granted that motion and the Commissioner’s attorney vigorously intervened on appellant’s behalf. The Commissioner filed a lengthy and detailed response to the respondent’s petition for judicial review, alleging six affirmative defenses to the petition. Appellant’s private counsel also filed a response to the petition for judicial review. In January 1985, a hearing was to be held by the District Court on appellant’s wage claim and both the Commissioner’s attorney and appellant’s private counsel were present. Respondents’ counsel arrived late for the hearing and the parties stipulated that the matter would be submitted on briefs. In March 1985, the District Court filed its opinion and order affirming the hearing officer’s decision and award to appellant.

Several days later, appellant’s private counsel filed a motion to amend judgment requesting that appellant be awarded his attorney’s fees under Section 39-3-214, MCA. In April 1985, the Commissioner filed a Memorandum of Commissioner’s Costs and Disbursements wherein the Commissioner claimed no costs, disbursements or attorney’s fees. The District Court issued an order which denied appellant’s request for attorney’s fees and which stated:

“It appears then that while [appellant] had the right of separate representation, such representation was not necessary to dispose of the case. The Commissioner fully and adequately presented the case to the Court.”

The District Court’s final judgment orders respondents to pay appellant $2,488.50 plus interest and to pay the Commissioner’s costs. This appeal followed the denial of attorney’s fees to appellant.

As stated, the only issue is whether Section 39-3-214, MCA, entitles appellant to his attorney’s fees at the District Court level. Section 39-3-214, MCA, provides;

“(1) Whenever it is necessary for the employee to enter or maintain a suit at law for the recovery or collection of wages due as provided for by this part, a resulting judgment must include a reasonable attorney’s fee in favor of the successful party, to be taxed as part of the costs in the case.
“(2) Any judgment for the plaintiff in a proceeding pursuant to this part must include all costs reasonably incurred in connection with the proceeding, including attorneys’ fees.
“(3) If the proceeding is maintained by the commissioner, no court costs or fees are required of him nor is he required to furnish any bond or other security that might otherwise be required in connection with any phase of the proceeding.”

This Court has established that a plaintiff may not collect attorney’s fees under this statute for the services of his attorney at the administrative hearing level because an administrative hearing is not a “suit at law” for the purposes of Section 39-3-214(1), MCA, and because the hearing officer’s determination is not a “judgment” for the purposes of Section 39-3-214(2), MCA. Thornton v. Commissioner of Department of Labor and Industry (Mont. 1980), 621 P.2d 1062, 37 St.Rep. 2026. In Chagnon v. Hardy Construction Co. (Mont. 1984), [208 Mont. 420,] 680 P.2d 932, 41 St.Rep. 441, we impliedly held that the district court review of an administrative decision on a wage claim is a suit at law within the meaning of the statute. Given that the lower court proceeding was a suit at law, the only remaining inquiry under the statute and in this appeal is whether it was necessary for the áppellant to enter or maintain the suit.

Appellant was the only other named party to the action at the time of the petition for judicial review. At that time, the Commissioner of Labor and Industry had not intervened and was not a party to the action. Even after the intervention, appellant may have considered it necessary to take part in the suit to monitor the proceedings if nothing else. We also note that the Commissioner, in a memorandum submitted to the District Court, stated:

“An appearance by a private party responded [sic] to protect his interests that may or may not coincide with those of the Commissioner of the State is always warranted.”

The District Court denied the attorney’s fees stating that the attorney’s representation of appellant “was not necessary to dispose of the case.” Under the statute, it is the necessity to enter the suit at law which triggers the attorney’s fees, not the necessity of hiring a lawyer.

We reverse the District Court and remand this case for a determination of reasonable attorney’s fees in accordance with the statute and. vacate the award of costs to the Commissioner and remand for a determination of same.

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


author: MR. JUSTICE SHEEHY

text:
    In re the MARRIAGE OF DAVID D. BORDNER, Petitioner and Respondent, and LANOR MAE BORDNER, Respondent and Appellant.
    No. 85-317.
    Submitted on Briefs Dec. 18, 1985.
    Decided March 11, 1986.
    715 P.2d 436.

      Matovich & Addy, Bard G. Middleton, Billings, for respondent and appellant.
    Datsopoulos, MacDonald & Lind, David B. Cotner, Missoula, for petitioner and respondent.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

Appellant, Lanor Mae Bordner, appeals from the order of the District Court denying her motion to hold appellee, David D. Bordner, in contempt for failing to satisfy accrued judgments for child support.

The record of this case and the findings of fact made by the District Court disclose the following: The parties’ marriage was dissolved by decree of dissolution of marriage on July 5, 1979. During the parties’ marriage, two minor children were born as issue of the marriage, namely Laura Lynn Bordner, born January 13, 1964, and David Daniel Bordner, Jr., born January 14, 1966.

The dissolution decree and the parties’ separation agreement dated June 27, 1979, provided that David would make child support payments to Lanor through the Clerk of Court, Missoula County, Montana, until each child completed high school following his or her eighteenth birthday in the sum of $150.00 per month, per child.

In April, 1980, Laura moved from her mother’s home because of friction which had developed within the family. She moved to her father’s residence in Washington State. This move was intended to be permanent and was with the consent of Lanor. Laura, however, lived with David for a period of only four months.

Upon returning to Montana, Laura returned for a brief period of time to her mother’s house, then moved to a halfway house and eventually to a group home where she resided throughout the remainder of her minor years. The Department of Social and Rehabilitative Services assumed temporary legal custody of Laura by order of the District Court in June, 1981.

In 1980 and 1981 David fell into arrears on his child support payments due to unemployment. In January 1981, Lanor filed a petition for support under the Uniform Reciprocal Enforcement of Support Act. As a result of that petition, David was ordered by the Superior Court of Washington for Grays Harbor County to pay the sum of $150.00 per month for the support of the minor children and $25.00 per month for his accumulative arrearage until liquidated. After David Daniel’s graduation from high school in June, 1984, David’s support order was modified to $75.00 per month by the State of Washington. The record indicates that David has fulfilled his support obligations under the Washington support order.

The District Court found that as of March 29, 1985, a total of $1,450.00 of accrued child support obligations was unpaid and owing by David to Lanor. The District Court arrived at this amount by relieving David of his duty to support Laura between April, 1980, and January, 1982. In conclusion of law number one, the court stated:

“Petitioner was relieved of his child support obligations between April, 1980, and January, 1982. From April, 1980, through July, 1980, Laura Lynn Bordner was integrated into Petitioner’s family home with Respondent’s consent. That during this period Petitioner provided 100% of Laura’s support. From August, 1980, through January, 1982, Laura Lynn Bordner was emancipated and therefore pursuant to M.C.A. Section 40-4-208 Petitioner’s child support obligation was terminated.”

The District Court also concluded that David should pay the arrearages at the rate of $75.00 per month.

Parties’ separation agreement provided: “Should any action be commenced to enforce, modify or interpret any provision contained herein, the Court, as a cost of suit, shall award a reasonable attorney’s fee to the successful party.” The District Court denied Lanor’s request for attorney’s fees because she did not “prevail at the hearing.”

The following issues are raised on appeal:

1. Whether a parent obligated to pay child support may automatically terminate the provisions for the support upon the emancipation of his child.

2. Whether the District Court erred by concluding that Laura was emancipated from August, 1980, through January, 1982.

3. Whether the District Court erred in relieving David of his child support obligation between April, 1980, and January, 1982.

4. Whether the District Court erred by adopting a deferred payment plan for the payment of unpaid and delinquent child support without reference to contempt, and

5. Whether the District Court erred when it denied Lanor her costs and attorney’s fees incurred in enforcing judgments for the accrued child support obligation.

We first address David’s contention that the provisions for the support of a child are automatically terminated by emancipation of the child under Section 40-4-208(5), MCA, and that no further act of the obligated parent is necessary. Section 40-4-208(5), MCA, states:

“Unless otherwise agreed in writing or expressly provided in the decree, provisions for the support of a child are terminated by emancipation of the child . . .”

To agree with David’s contention would be to give the obligated parent the discretion to unilaterally declare the emancipation of his child and terminate support payments.

At least one other court has addressed this issue. In Patryzykont v. Patryzykont (1982), 7 Kan.App.2d 533, 644 P.2d 1009, 1012, the Court of Appeals of Kansas held that emancipation does not necessarily terminate the obligation of support and would be an inappropriate event for justifying automatic termination by the parents without sanction of the court.

Emancipation signifies the surrender and renunciation of rights and duties in regard to care, custody and earnings of a child. It is true that at the age of majority, emancipation is automatic, and the parents’ obligation for support ends without further action by the court, unless there has been some voluntary agreement that support by one or both parents will continue beyond majority. Herrig v. Herrig (1982), 199 Mont. 174, 187, 648 P.2d 758, 765. Clearly, however, whether a child is otherwise in fact emancipated will not be an easy question in all cases and surely not one to be left to the obligated parent. We therefore hold that for purposes of Section 40-4-208(5), MCA, the question of whether a child is emancipated is a question of fact to be determined by the court. If emancipation can be established, a parent generally will have no further duty to support the child. Prior to the age of eighteen, however, there is a presumption against the emancipation of a child, and the burden of establishing emancipation is on the party asserting it.

The next issue to be addressed is whether the District Court erred by concluding that Laura was emancipated from August, 1980 through January, 1982. The record discloses that after Laura returned to Montana from David’s home in Washington, she lived with her mother briefly, then moved to a half-way house, and eventually to a group home. On June 15, 1981, the District Court adjudicated Laura a youth in need of care and gave temporary legal custody of her to the Missoula County Department of Public Welfare. The record also discloses that during this period, Lanor provided Laura with various necessities, including personal items, shampoo, toothpaste, shoes, clothing, food and a place to stay periodically. She also paid for Laura’s hair cuts, took her to job interviews, and provided her with transportation.

Section 20-25-501, MCA, defines an emancipated minor for tuition purposes as:

“[A] person under the age of 18 years who supports himself from his own earnings or is married. A person who received more than 25% of the cost of supporting himself from any person other than an agency of the government shall not be considered an emancipated minor.”

There are no facts in the record nor any findings made by the District Court to indicate that Laura was capable of supporting herself through her own earnings or whether she even had any earnings.

This issue, however, raises the further question of whether a minor adjudicated a youth in need of care should ever be declared a fully emancipated minor. In this State, once a child is adjudicated a youth in need of care the court may order the county welfare department to conduct a financial status investigation of the child’s parents and may ultimately order the parents’ of the youth who is in the state’s custody to make payment to the Department of Social and Rehabilitative Services. Section 41-3-1123 and 41-3-1125, MCA. These statutes place a continuing duty of support on the parents while their child is a youth in need of care which runs contrary to the concept of emancipation. Further, Section 41-3-408, MCA, states that the court “may . . . enter an order granting limited emancipation . . . “ to a youth in need of care. The statute gives the court no authority to find a youth in need of care a fully emancipated minor. Thus, we hold that the District Court erred in concluding that Laura was emancipated from August, 1980 to January, 1982 based on the record of this case and that a youth in need of care is limited by statute from attaining more than limited emancipation which in the right case may call for prospective modification of a child support obligation but not for termination of the obligation under Section 40-4-208(5), MCA.

The third issue raised for our consideration is whether the District Court erred in relieving David of his support obligation for Laura from April, 1980, through January, 1982.

The action of the District Court is contrary to Section 40-4-208(1), MCA, which states:

“. . . a decree may be modified by a court as to maintenance or support only as to installments accruing subsequent to the motion for modification.”

There can be no doubt that the District Court modified the judgment for accrued child support payments, and modified it retroactively.

By relieving David of his support obligation for Laura during the 4 months she resided in David’s home in Washington, the District Court abused its discretion and modified the plain meaning of the terms of the parties settlement agreement and the dissolution decree. Gies v. Gies (Mont. 1984), [210 Mont. 234,] 681 P.2d 1092, 1096, 41 St.Rep. 1028, 1032. Because Laura’s move was intended to be permanent and was done with Lanor’s consent, a motion for modification may have been proper at that time. But once David’s payments became due under the decree of dissolution, the law puts the burden upon him to make a positive act to modify his support obligation. State of Oregon ex rel. Worden v. Drinkwalter (Mont. 1985), [216 Mont. 9,] 700 P.2d 150, 153, 42 St.Rep. 599, 602-03. Since David made no motion for modification once his payments had accrued, the decree could no longer be modified to cancel past due and unpaid child support because the decree can be modified prospectively only. Dahl v. Dahl (1978), 176 Mont. 307, 310, 577 P.2d 1230, 1232.

Having already determined that termination of support due to the emancipation of a minor must be done by motion and that Laura was not emancipated from August, 1980, to January, 1982, we now hold that a motion for termination under Section 40-4-208(5), MCA, shall be governed by Section 40-4-208(1), MCA. In other words, a decree may be modified to terminate support due to the emancipation of a child only as to installments accruing subsequent to the motion.

The next issue raised is whether the District Court erred by adopting a deferred payment plan for the payment of unpaid and delinquent child support without reference to contempt. In Williams v. Budke (1980), 186 Mont. 71, 77-8, 606 P.2d 515, 518-19, a case factually analogous to the instant case, this Court held that when a husband is brought before the District Court on a motion that he be held in contempt for failing to make support payments and the District Court adopts a deferred schedule without finding the husband guilty of contempt, the action of the District Court constitutes an improper modification of a judgment for accrued payments. The rationale for this rule is that:

“The District Court always has jurisdiction in contempt proceedings for the purpose of enforcing a support money decree, to find the defaulting party in contempt, and to stay the execution of punishment for the contempt upon the provisio that the defaulting party purge himself by making payments in accordance with a schedule established by the District Court. Williams, 186 Mont. at 78, 606 P.2d at 519; State v. District Court (1948), 122 Mont. 61, 72-6, 198 P.2d 761, 767-69.

In the instant case the District Court denied Lanor’s motion for contempt and approved payment of arrearages at $75.00 per month. As stated in Williams, this constitutes a modification of a judgment for accrued payments which cannot be done, without finding David in contempt. To hold otherwise would be to take away Lanor’s right to levy execution for the accrued payments if property could be found in the possession of David which could be applied to the arrearages.

We further note that the District Court appeared to give approval to the Washington URESA order modifying David’s support payment to $75.00 per month. We, however, have stated that the authority of the court originally ordering payment is not affected or its order modified by an order of the court of the responding state fixing another or different sum. Campbell v. Jenne (1977), 172 Mont. 219, 222, 563 P.2d 574, 577.

Finally, based on our discussions above, we hold that Lánor was entitled to her attorney’s fees pursuant to the parties separation agreement.

We reverse and remand with instructions to the District Court to determine the amount of child support owed by David without relieving him of his support obligation for Laura between April, 1980, and January, 1982, and to enter a judgment for that amount.

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


author: MR. CHIEF JUSTICE TURNAGE

text:
    WILLARD NELSON, Plaintiff and Respondent, v. DAVIS MODERN MACHINERY, Defendant and Appellant.
    No. 85-320.
    Submitted on Briefs Dec. 18, 1985.
    Decided March 13, 1986.
    715 P.2d 1052.

      Warden, Christiansen, Johnson & Berg, Todd A. Hammer, Kalispell, for defendant and appellant.
    M. Richard Gebhardt, Ronan, for plaintiff and respondent.
   MR. CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Respondent filed his complaint with the District Court of the Eleventh Judicial District alleging breach of warranty and negligence by appellant. Trial was held without a jury in three disjointed sessions on December 7, 1983, January 19, 1984, and May 17, 1984. Ten months later, on March 15, 1985, the District Court issued its findings of fact and conclusions of law in favor of respondent. The court entered judgment in the sum of $25,664.68 with no offset for balance due appellant or mitigation of damages. This appeal ensued.

The findings of fact by the District Court are not sufficient to support the damages awarded. We therefore reverse and remand for new trial.

Appellant raises the following issues:

1. Did the District Court err in concluding there was breach of warranty and dealer negligence after finding that the machine was taken by respondent on a “tryout” basis?

2. Did the District Court err in not making any findings with regard to mitigation of damages?

3. Did the District Court err in admitting a repair bill without testimony that could establish that the bill was admissible hearsay?

4. Did the District Court err in finding the silage was unsuitable because of inferior protein content?

5. Did the District Court err in failing to offset the balance due to appellant from the damages awarded to respondent?

There was conflicting or insufficient testimony at trial regarding several matters important for the proper resolution of this case. The following summarizes the findings of the District Court. Because the scenario is incomplete, however, certain details are filled in by reference to the trial transcript where noted.

Respondent, Willard Nelson, runs a dairy farm near Charlo, Montana. In the summer of 1980, he raised peas, barley and oats which were to be made into silage. The silage, in turn, was to feed his forty milk cows in the fall and winter. Unfortunately, the crops were put up too dry for the chemical and biological reactions which preserve silage in a state nutritious for cows. The dryness of the crops resulted from delays caused by the faulty operation of a piece of farm equipment known as a silage chopper. The silage proved unsuitable as food for milk cows, and respondent suffered a loss in milk production. He was also forced to buy hay in order to feed his cattle through the winter.

In late July 1980, respondent went to appellant’s store to purchase a silage chopper. He needed a unit that was compatible with the power take-off assembly on his “Super 90” Massey Ferguson tractor which rotated at 540 revolutions per minute (rpm’s). In order to work properly, a chopper must be compatible with the tractor in rpm’s and horsepower. Appellant was aware of the type of chopper required by respondent, and respondent relied on appellant to furnish him with a compatible chopper. Appellant proposed to sell respondent a used “880” New Holland chopper which he thought would meet respondent’s need.

However, there was uncertainty regarding both the rpm’s requirements of the chopper and whether or not respondent’s tractor possessed enough power to operate the chopper properly. Rather than running tests at the store, the parties agreed that respondent would take the chopper on a “tryout” basis, to determine compatibility.

Respondent took the chopper to his farm and ordered a yolk (a part required for coupling the chopper with the power take-off) from Stedje Brothers, a local dealer in New Holland farm equipment. When the yolk arrived, respondent attached the chopper to his tractor and began chopping in his field. However, the chopper kept plugging up and causing delay. We note at this time that testimony from Stedje Brothers may have helped clarify when the chopper was taken by respondent. Unfortunately, no one from Stedje Brothers was called to testify.

Respondent complained to appellant in late July or August, and appellant sent an employee to the farm to adjust and sharpen the knives on the chopper. When the problems persisted, appellant told respondent that the tractor was likely underpowered. Possibly, though the findings by the District Court do not say, because respondent planned to buy a larger tractor for the next season, he agreed to purchase the chopper anyway after appellant deducted $200 from the purchase price. The findings of fact are unclear as to when during the harvest this transaction occurred. However, the respondent testified at trial that it did not occur until after all of the crops were harvested. He also testified that he took the chopper “as is” at this time, because he thought the problem was with his tractor and not the chopper. The District Court, however, determined that an “as is” provision written on the purchase order was ineffective as a disclaimer of implied warranty.

There are additional findings of fact regarding the purchase order and a financing agreement with dates which do not fit with the chronology presented in this scenario. However, these documents were either altered or manipulated to such a degree during appellant’s efforts to obtain financing for respondent that their evidentiary value is questionable. The Court notes that appellant’s employee, Don Blasdell, signed the purchase order and handled much of the dealings with respondent. We are puzzled why there was no testimony by Blasdell to help clear up the chronology and manipulations during the transaction.

The next spring, respondent discovered that the faulty operation of the chopper was the result of incompatible rpm’s between the chopper and the tractor rather than the lack of power in his tractor as represented by appellant. Respondent brought this action against appellant in District Court for breach of warranty and negligence. The District Court found in favor of respondent based on implied warranty of fitness, negligence and constructive fraud. Appellant appeals that judgment.

The findings of fact by the District Court do not support its conclusions of law. Furthermore, because of the disjointed trial and the long delay before issuance of the District Court’s opinion, we reviewed the transcript carefully. The testimony appearing in the transcript is contradictory and insufficient to properly resolve the dispute. We therefore find that a new trial is necessary.

I

Appellant’s primary claim of error concerns an inconsistency between a finding of fact and conclusion of law by the District Court. The point is well taken.

The District Court made the following finding of fact:

“4. However, as there was some uncertainty in the minds of the parties at the time of Plaintiffs purchase whether the chopper would require interface with a 540- or 1000-rpm power take-off, and because Defendant did not take the time and trouble to test the chopper mechanically, in accordance with its usual practice, it was understood and agreed between the parties that Plaintiff would take and use it on a “tryout” basis to ascertain whether the chopper indeed was compatible with his tractor and equipment. In fact, but unbeknownst to the parties at that time, it was not.”

On the other hand, the court concluded that appellant was liable based on breach of implied warranty of fitness, negligent misrepresentation and constructive fraud. We agree with appellant that the findings and conclusions by the District Court are inconsistent and contradictory for reasons that will follow.

The breach of warranty claim is governed by the Uniform Commercial Code (UCC) as adopted by Montana. The UCC classifies buyer’s remedies conceptually on the basis of whether (1) the buyer has rejected or revoked acceptance of the goods, Section 30-2-711, MCA; or (2) the buyer has accepted goods which do not conform to the contract, Section 30-2-714, MCA. As such, different remedies are available for seller’s breach prior to and subsequent to acceptance. The breach of warranty remedy appears only under the provision for “breach in regard to accepted goods,” Section 30-2-714, MCA, and damages for breach of warranty are measured by reference to the time of acceptance, Section 30-2-714(2), MCA. Therefore, an action for breach of warranty cannot arise until after acceptance.

We cannot determine from the District Court’s findings when acceptance occurred. One finding of fact says the chopper was purchased when respondent took it to his farm, thereby implying that acceptance occurred at that time. In contrast, another finding of fact says that the chopper was taken to use on a “tryout” basis. Goods taken for a tryout have not been accepted. See Section 30-2-606, MCA. Because acceptance is critical to the outcome of this case, these conflicting findings constitute error.

The finding by the District Court that respondent took the chopper on a “tryout” basis because of uncertainty in the minds of the parties is likewise inconsistent with the theories of negligent misrepresentation and constructive fraud. Both theories require misrepresentation. Because respondent took the chopper on a tryout basis, there could be no misrepresentation at that time. If, however, the misrepresentation occurred at some later date, we cannot determine from the findings when that was. Since appellant can only be liable for damage occurring after the misrepresentation, the District Court erred in calculating damages from the moment respondent took the chopper.

II

Appellant’s next allegation of error concerns mitigation of damages. This Court recognizes a duty to take reasonable steps to reduce property damages. See Spackman v. Ralph M. Parsons Co. (1966), 147 Mont. 500, 414 P.2d 918. There was testimony that respondent may have reduced his damages by baling the crops as hay. The District Court however, made no findings or conclusions on mitigation. This omission constitutes error.

III

The District Court awarded respondent $619.13 for the repair of the clutch in his tractor’s power take-off unit. This award was based solely on a bill purporting to be from Stedje Brothers that was admitted as an exhibit over appellant’s hearsay and relevancy objection. There was no testimony from a representative of Stedje Brothers to establish the authenticity of the bill or what caused the need for the repair. The District Court admitted the bill as having “such circumstantial guaranties of reliability as to allow it to come in under the residual exception of the hearsay rule” but offered no explanation as to what the guaranties were. See Rule 803(24), M.R.Evid. Appellant alleges error. We agree.

We can see no “circumstantial guaranties of reliability” to allow for admission of the bill as a hearsay exception under Rule 803(24), M.R.Evid. The District Court therefore abused its discretion in admitting the bill. There was further error in awarding damages based solely on the hearsay bill and without evidence that the incompatibility between the tractor and chopper caused the need for the repair.

IV

The next issue we will consider concerns the District Court’s finding that the silage had inferior protein content. Appellant claims that respondent Nelson was unqualified to testify on chemical changes in the silage, and that there was no competent evidence to show protein content of the silage. We agree, but we consider the finding harmless. The important finding, that the silage was unsuitable food for milk cows, is supported by substantial evidence in the record, including testimony by respondent and appellant’s expert witness, Dave Kettle. However, additional expert testimony on silage chemistry would have been beneficial at trial and may be necessary on retrial to properly resolve the other issues.

V

Finally, appellant complains that the District Court failed to set off the amount owed appellant by respondent on the outstanding balance of the purchase price. The record clearly supports this claim. Fairness dictates that the outstanding balance on the chopper must be deducted from any damages awarded the respondent.

We remand for new trial. We direct that any damages awarded respondent be reduced by the unpaid balance on the chopper.

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


author: MR. JUSTICE HUNT

text:
    JAMES H. SADLER, et ux., Plaintiffs and Appellants, v. DALE P. HART, et ux., et al., Defendants and Respondents.
    No. 85-460.
    Submitted on Briefs Dec. 18, 1985.
    Decided March 13, 1986.
    715 P.2d 50.
    Samuel Coon, Missoula, for plaintiffs and appellants.

      Terry A. Wallace, Missoula, for defendants and respondents.
   MR. JUSTICE HUNT

delivered the Opinion of the Court.

James Sadler appeals the order and writ of assistance issued by the District Court of the Fourth Judicial District granting immediate possession of the appellant Sadler’s home to the respondents Dale and Gail Hart.

We affirm the order and writ of the District Court. Two issues are presented for our consideration:

1. Was the order and writ of assistance proper?

2. Did the order and writ of assistance comport with due process?

To end numerous lawsuits between the appellants and respondents, both parties filed with the District Court a settlement agreement which the court adopted as a consent decree on December 31, 1984. The consent decree enjoined both parties from filing any cause of action against each other which arose before the date of the decree.

The decree settled all obligations between the parties, save one. The matter remaining involved the sheriffs deed held by Hart’s to Sadler’s home. The consent decree allowed Sadlers to extinguish the Hart’s interest in the home by payment of twenty eight thousand dollars, payable in three installments, time being of the essence. The District Court, by terms of the consent decree, would act as escrow agent for the parties. As escrow agent, the court held documents to be released in the event of payment or nonpayment.

On July 3, 1985 the respondents pursuant to the consent decree requested the court to take appropriate action because the second installment due had not been paid. Their request was accompanied by a certification of the clerk of court that the payment had not been made.

In accordance with the provisions of the consent decree the District Court released to the Harts quit claim deeds to the property, a confirmation of the previous execution sale, and a writ of assistance, which had been previously consented to by the appellants at the time the consent decree was adopted. The consent decree expressly stated that the court, as escrow agent, could “act without notice to the other parties.” On July 18, 1985 the sheriff of Missoula County served the Sadlers with the order and obtained possession of the home for the Harts.

The appellants did not appeal the consent decree, which is a final judgment and therefore an appealable order. In the absence of such an appeal, challenges to the decree itself cannot be considered. Murphy v. Patterson (1901), 24 Mont. 591, 63 P. 380, 381. Therefore, this Court considers first whether the order and writ issued by the District Court corresponded to the terms of the consent decree. The order and writ of assistance followed the terms of the decree exactly and cannot be challenged on that basis.

Secondly, appellants argue they were denied due process by not receiving prior notice of the order and writ of assistance and by being deprived of an opportunity for a hearing. This argument fails because the express terms of the consent decree, signed by the appellants, indicates they knowingly and voluntarily waived notice of the court’s actions pursuant to the default provisions of the decree. Pacific R.V. v. Ketchum (1879), 11 Otto 289, 295, 101 U.S. 289, 295, 25 L.Ed. 932.

Appellants contend that this Court should consider their argument that the terms of the consent decree were later modified by the parties. We cannot consider issues or evidence not raised in the District Court. Kearns v. McIntyre Const. Co. (1974), 173 Mont. 239, 567 P.2d 433.

The District Court is affirmed.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, WEBER, MORRISON, GULBRANDSON and SHEEHY concur.