author: CHIEF JUSTICE TURNAGE

text:
    FIRST SECURITY BANK & TRUST OF MILES CITY, a Montana corporation, Plaintiff and Respondent, v. VZ RANCH, a Montana corporation, and Leonard Roberts, an individual, Defendants and Appellants.
    No. 90-418.
    Submitted on briefs Feb. 14, 1991.
    Decided Mar. 19, 1991.
    247 Mont. 453.
    807 P.2d 1341.

      Allen Beck, Billings, for defendants and appellants.
    Joel Guthals, Billings, for plaintiff and respondent.
   CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

VZ Ranch, a Montana corporation, and Leonard Roberts appeal a judgment of the Sixteenth Judicial District, Custer County, which granted summary judgment on behalf of First Security Bank and Trust of Miles City (Bank) and against appellants’ counterclaim. We affirm.

Appellants raise the following issue:

Did the District Court err when it granted summary judgment against appellants’ counterclaim?

Appellants became customers of the Bank in approximately 1975. On February 21, 1983, Roberts, in his individual capacity, executed a personal guarantee, guaranteeing any and all indebtedness of VZ Ranch for past, current, or future debts owed to the Bank, together with any additional expenses and attorney fees.

On January 15,1985, Leonard Roberts, as President of VZ Ranch, executed two promissory notes, a renewal note for $1,400,000 and a real estate note for $296,000, both notes payable to the Bank on November 1, 1985. Because the total loan exceeded the Bank’s $1,200,000 lending limit, the loan required a participating bank, Richland National Bank of Sydney.

Additionally on January 15, 1985, Roberts, as President of VZ Ranch, executed a security agreement granting the Bank a security interest in VZ Ranch’s crops, livestock, feed, seed, fertilizer, silage, straw, hay, farm machinery and equipment. The Bank’s security interest was properly perfected by the filing of UCC financing statements in the appropriate county and state offices.

From January to November 1985, the Bank extended $1,573,871.03 in operating funds to VZ Ranch. In June, 1985, the Bank notified appellants that this loan was classified substandard by the Federal Deposit Insurance Corporation (FDIC) because of, 1) insufficient cash flow, and 2) the value of the loan exceeded the value of the cattle serving as primary collateral. Shortly thereafter, Richland National Bank of Sidney withdrew its participation from this loan due to the loan’s quality. Accordingly, the loan had to be paid down to remain bankable.

In an effort to remove the substandard classification and make the loan bankable and renewable, the Bank recommended to Roberts that VZ Ranch 1) obtain a Small Business Administration (SBA) loan and apply it to the loan, 2) sell certain property and apply its proceeds to the loan, and 3) submit an acceptable operating budget. Upon meeting these three conditions, the Bank agreed to extend future operating loans to VZ Ranch for 1986. VZ Ranch, however, failed to meet one of the conditions, the sale of certain property, and accordingly, the Bank did not extend future operating loans for 1986. In a deposition, Roberts acknowledged that these were the three conditions expressed by the Bank in order for VZ Ranch to receive additional operating loans, and that one of the conditions, the sale of the certain property, was indeed not met.

Additionally, the Bank advised Roberts to consider selling all of VZ Ranch’s cattle in the fall of 1985, and apply the proceeds to the loan. During November and December of 1985, upon the Bank’s further direction, VZ Ranch sold its cattle and applied the bulk of the proceeds to the loan, with the remainder of the proceeds going toward VZ Ranch’s incurred expenses.

In January, 1986, VZ Ranch filed a chapter 11 bankruptcy petition with the United States Bankruptcy Court, which stayed creditors, including the Bank, from pursuing collection of VZ Ranch’s pre-petition debts. During this bankruptcy proceeding, the Bankruptcy Court, in an August 29, 1986, order, allowed VZ Ranch, the debtor-in-possession, to use cash collateral of the bankruptcy estate under 11 U.S.C. § 364, to harvest its 1986 crop. This order further stated that all cash collateral was to remain in the possession of VZ Ranch pending further order. Therefore, when the 1986 crop was harvested, VZ Ranch retained control of the crop proceeds, which totaled $103,796.70. Although the Bank appealed this order to the Bankruptcy Appellate Panel of the Ninth Circuit on September 4, 1986, and the panel remanded the order back to the Bankruptcy Court for reconsideration on November 19, 1986, the bankruptcy proceeding was dismissed on January 29, 1987, before a hearing to reconsider the order was conducted. Accordingly, the appellants retained control of the proceeds of the 1986 crops through and following the dismissal of the bankruptcy proceeding.

On March 16,1987, the Bank filed a complaint against appellants for claim and delivery, foreclosure of security interests, and injunctive relief. On July 7, 1987, the District Court ordered appellants to turn over the $103,796.70 in proceeds from the 1986 crop to the court. On July 29, 1987, the Bank moved for contempt of appellants failing to comply with the order.

On August 13,1987, the District Court found Roberts in contempt of the order. Accordingly, the District Court ordered Roberts jailed until September 15, 1987, the day he turned over the proceeds to the court. Additionally, on August 13,1987, appellants filed a counterclaim, which alleged that the Bank, “commenced a willful and malicious course of action seeking to force the [appellants] out of business and/or into bankruptcy.”

The counterclaim asserted that “[t]his course of action is in breach of the duly of the [Bank] to the [appellants] of good faith and fair dealing.” The counterclaim alleged that the “action commenced when the [appellants] refused to enter into a business transaction with Mr. Nefsy, an owner of the [Bank].” In particular, the counterclaim alleged that the Bank forced appellants, “to liquidate livestock at a time and in a manner calculated to minimize the return thereon and to further jeopardize the [appellants’] financial condition.” The counterclaim alleged that the Bank “represented to the [appellants] that they should continue certain farming and ranching operations in the fall of 1985 and that continued financing for those operations would be provided; upon those assurances, the [appellants] conducted said farming operations incurring debt but when loan advances were requested they were denied by [the Bank].”

Furthermore, the counterclaim alleged that the Bank assured appellants that if they obtained an SBAloan, “and paid the proceeds thereof over to the [Bank] that the [Bank] would continue financing [appellants’] operations; the [appellants] obtained such [SBA] loan and paid the proceeds over to the [Bank] but [Bank] failed to provide the promised financing.” Finally, the counter-claim alleged that appellants relied on the Bank’s promises and assurances to their detriment, and that the Bank “ha[d] been motivated by ill-will and for the purpose of injuring and damaging [appellants].”

On October 31,1989, the Bank moved for summary judgment when attempted negotiations failed. In an amended memorandum and opinion dated July 12,1990, the District Court granted the Bank summary judgment on its complaint and against appellants’ counter-claim. The District Court held that the counterclaim lacked sufficient facts to support a claim of breach of contract. Additionally, the District Court held “that there was no breach of the covenant of good faith and fair dealing nor was there a fiduciary relationship between the parties that directed an extension of further credit [by the Bank].” From this judgment, appellants appeal.

Did the District Court err when it granted summary judgment against appellants’ counterclaim?

Here, the appellants do not contest that the Bank was entitled to summary judgment on its complaint; the sole issue is whether the District Court erred when it granted summary judgment against the appellants’ counterclaim. Our discussion will therefore be limited to the counterclaim.

The counterclaim alleges two causes of action: 1) breach of the implied covenant of good faith and fair dealing in contract, where contact damages are allowed, and 2) breach of the implied covenant of good faith and fair dealing in tort, where actual damages and punitive damages are allowed. See Story v. City of Bozeman (1990), 242 Mont. 436, 450-452, 791 P.2d 767, 775-76. The record, however, does not support any of the appellants’ allegations raised in their counterclaim. Section 28-1-211, MCA, provides:

“The conduct required by the implied covenant of good faith and fair dealing is honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.”

Here, the record does not indicate any dishonesty or unreasonable commercial behavior on the part of the Bank toward the appellants. The Bank notified appellants of the substandard classification of the appellants’ loan. The Bank then met with Roberts to discuss ways to remove the substandard classification and make the loan bankable and renewable. The Bank agreed to renew the loan if the appellants could meet three conditions: 1) obtain an SBA loan, 2) sell certain property, and 3) submit an acceptable operating budget. Although the appellants’ counterclaim alleges that obtaining an SBA loan was the only condition stipulated by the Bank, Roberts acknowledged in a deposition that there were indeed three conditions to renew the loan. Roberts further acknowledged in the deposition that although the appellants met two of the conditions, obtaining an SBA loan and submitting a revised operating budget, they failed to meet one of the conditions, the sale of certain property.

In the deposition, Roberts alleges that his troubles with the Bank began when he refused to enter a business transaction involving cattle with Mr. Nefsy, an owner of the Bank. The record, however, is void of any evidence that either supports Roberts’s allegation or points to any wrongdoing on Nefs/s part. The appellants in their counterclaim further argue that the Bank forced them to liquidate the cattle “at a time and in a manner calculated to minimize the return thereon and to further jeopardize the [appellants’] financial condition.” Here, however, the Bank was faced with a substandard loan collateralized by cattle, which were scattered in various locations without adequate feed for their survival. The Bank could not loan more money to appellants for cattle feed until the loan was brought into bankable condition. Thus, the Bank directed appellants to sell the cattle, a reasonable, if not the only, solution in fight of the facts. Furthermore, the appellants presented no evidence regarding insufficient cattle prices or calculated actions on the Bank’s part to worsen their financial condition through the sale of the cattle at that particular time. We therefore hold that there was no breach of the implied covenant of good faith and fair dealing in contract in this instance.

Regarding appellants’second cause of action, a“specialrelationship” must exist between the parties for there to be a breach of the implied covenant of goodfaithandfairdealingin tort. Story v. City of Bozeman, 242 Mont. at 451, 791 P.2d at 776. The elements of a special relationship are:

“(1) the contractmustbe such thatthe parties are in inherently unequal bargaining positions; [and] (2) the motivationfor enteringthe contract must be a non-profit motivation, i.e., to secure peace of mind, security, future protection; [and] (3) ordinary contract damages are not adequate because (a) they do not require the party in the superior position to account for its actions, and (b) they do not make the inferior party “whole’; [and] (4) one party is especially vulnerable because of the type of harm it may suffer and of necessity places trust in the other party to perform; and (5) the other party is aware of this vulnerability.”

Story, 242 Mont. at 451, 791 P.2d at 776 (citation omitted).

Clearly, the appellants had a profit motivation when Roberts, as President of VZ Ranch, executed the promissory notes to the Bank. Hence, no “special relationship” existed between the appellants and the Bank, and consequently, there was no breach of the implied covenant of good faith and fair dealing in tort. We therefore hold that the District Court properly granted the Bank summary judgment against appellants’ counterclaim as there were insufficient facts to support the counterclaim’s two causes of action.

Affirmed.

JUSTICES HARRISON, McDONOUGH, HUNT and WEBER concur.


source: Caselaw Access Project

author: JUSTICE McDONOUGH

license: Public Domain

text:
    CARLA IRION and RUSSELL IRION, Plaintiffs and Appellants, v. JOSHUA PETERSON, CITY OF BILLINGS, a municipal corporation, School District No. 2 of Billings, Montana, a/k/a Billings Public Schools and Christian, Spring, Sielbach & Associates, a corporation, Defendants and Respondents.
    No. 90-445.
    Submitted on briefs Jan. 17, 1991.
    Decided Mar. 19, 1991.
    247 Mont. 459.
    807 P.2d 714.

      Robert C. Kelleher, Sr., Kelleher Law Office, Butte, for plaintiffs and appellants.
    Ramona Heupel Stevens, Moulton, Bellingham, Longo & Mather, Billings (City of Billings) Guy W. Rogers, Anderson, Brown, Gerbase, Cebull, Fulton, Harman & Ross, Billings (Billings Public Schools) for defendants and respondents.
   JUSTICE McDONOUGH

delivered the Opinion of the Court.

Plaintiffs Carla and Russell Irion appeal from an order of summary judgment granted by the District Court of the Thirteenth Judicial District, Yellowstone County in favor of defendants City of Billings and the Billings School District. The District Court granted summary judgment on the grounds that immunity pursuant to § 2-9-111, MCA, and the absence of a compensable claim under 42 U.S.C. § 1983 barred the Irions’ complaint. We affirm in part and reverse in part.

We restate the issues, submitted by Irions, as follows:

1) Whether the District Court properly determined that the city of Billings is immune from the allegations of the present lawsuit pursuant to § 2-9-111, MCA, and;

2) Whether the District Court properly held that Irions failed to assert a compensable claim pursuant to 42. U.S.C. § 1983.

In 1985, the City of Billings was constructing Skyview High School. While the school was under construction, the former Lincoln Junior High Building was utilized as a temporary location for the high school. Lincoln Junior High is located in downtown Billings at the intersection of North 30th Street and 4th Avenue North.

Apparently, school bus traffic associated with the loading and unloading of students created a traffic problem in the area. In order to remedy this problem, School District and City officials decided to close one lane of travel on North 30th Street from 4th Avenue North to 5th Avenue North. This task was accomplished by using a chain link fence and several barricades allowing the school buses to proceed in the same direction and facilitate the safe loading and unloading of students. This remedy was considered a temporary solution which was undertaken in order to avoid an “extremely dangerous” situation existing at the high school.

Unfortunately, on September 22, 1986, Carla Irion was struck by a motor vehicle being driven by Joshua Peterson as she was utilizing the crosswalk at the intersection of 4th Avenue North and North 30th Street. Joshua Peterson was a student at Skyview High School.

Carla Irion and her husband brought a lawsuit against Peterson on March 3,1989. The Irions later amended their complaint to name the School District, the City and the engineering firm of Christian, Spring, Sielbach and Associates as defendants. The engineering firm designed and erected the bus lane for the School District. It was never served, however, and is not part of this lawsuit.

The Irions settled their claims against Peterson for the sum of $45,000.00. Their allegations against the School District and the City of Billings were not settled and on July 17, 1990 the District Court dismissed the Irions’ complaint against the two defendants. It held that all claims of negligence were barred by immunity pursuant to § 2-9-111, MCA. It further ruled that the Irions’ § 1983 claims were not compensable because neither defendant acted with the intention to cause Carla Irion injury of life, liberty or property. This appeal followed.

I. Immunity

The District Court ruled that the Irions’ allegations of negligence against the School District and the city were barred by § 2-9-111, MCA. According to the statement of issues submitted by Irions this ruling, as it applies to the School District, was not appealed. Therefore, we need only review the District Court’s determination that the immunity provisions of the statute bar the Irions’ claims against the City.

Section 2-9-111, MCA, states:

“2-9-111. Immunity from suit for legislative acts and omissions. (1) As used in this section:
“(a) the term ‘governmental entity includes the state, counties, municipalities, and school districts;
“(b) the term ‘legislative body includes the legislature vested with legislative power by Article V of The Constitution of the State of Montana and any local governmental entity given legislative powers by statute, including school boards.
“(2) A governmental entity is immune from suit for an act or omission of its legislative body or a member, officer, or agent thereof.
“(3) A member, officer, or agent of a legislative body is immune from suit for damages arising from the lawful discharge of an official duty associated with the introduction or consideration of legislation or action by the legislative body.
“(4) The immunity provided for in this section does not extend to any tort committed by the use of a motor vehicle, aircraft, or other means of transportation.”

According to §§ 2 of this statute, a governmental entity is immune from suit for the negligence of its legislative body or “a member, officer or agent thereof.” The term governmental entity is defined to include municipalities. Section 2-9-lll(l)(b), MCA. Therefore in order to resolve the issue regarding the City’s possible liability, we must determine whether the alleged negligent acts were undertaken by members or agents of its legislative body. If they were not, the immunity provisions of § 2-9-111, MCA, are inapplicable and therefore will not bar the Irions’ lawsuit against the City.

Section 7-3-153, MCA, provides that charters of city governments are required to be filed with the Department of Commerce. The statute further provides that all such charters are subject to judicial notice. Under the authority of this statute, we have reviewed the Billings City Charter to determine whether the City Administrator and Director of Public Works are agents of the City’s legislative body. We have also reviewed the Charter to determine whether it provides for Separation of Power between the Legislative and Executive branches.

Article III of the charter provides as follows:

“ARTICLE III — Legislation
“Section 3.01. Legislative Branch. The legislative branch shall consist of the city Council and the Mayor.”

The Mayor, under Section 3.04 is charged with the duty of presiding over council meetings and performing as the ceremonial head of city government. In Section 3.08, the charter provides that “the Council, its members and the Mayor shall deal with the city officers and employees who are subject to the direction and supervision of the City Administrator solely through the City Administrator. Neither the Council, its members, nor the Mayor shall give orders to any city officer publicly or privately.”

The Charter also provides:

“Article IV — Executive.
“Section 4.01. City Administrator: Employment, Compensation, Qualifications. The Council shall employ a City Administrator on the basis of merit for an indefinite term. The Administrator shall not be the Mayor or a Councilmember at the time of employment and need not be a resident of the city or state at the time of employment.”

Further, in Section 4.03, it provides:

“Section 4.03. City Administrator: Powers and Duties. The Administrator shall:
“A. carry out policies established by the City Council;
“B. perform the duties required by law, ordinance, resolution, or this charter;
“C. enforce laws, ordinances, and resolutions;
“D. administer the affairs of the city;
“E. direct, organize, establish, supervise, and administer all departments, agencies, and offices of the city;
“F. appoint, suspend, and remove all employees of the local government;
“G. prepare and present the city budget to the Council for its approval and administer the budget adopted by the Council;
“H. report publicly to the Council at least quarterly on the financial conditions of the city;
“I. recommend measures to the Council;
“J. report to the Council as the Council may require;
“K. attend Council meetings and take part in the discussion, but shall have no vote;
“L. appoint with the approval of the City Council a qualified acting administrator to exercise the powers and perform the duties of the Administrator during temporary absences.”

As these sections indicate there are distinct Legislative and Executive Branches of the City government. Each has different duties and responsibilities. The City Administrator has been granted, by the charter the powers of the executive in a government of separated powers. These powers include, inter alia, the oversight and regulation of traffic. See § 24-103 Billings, Montana, City Code. In order to carry out the duty, the City Administrator has established the Department of Public Works, and specifically, the Director of Public Works to assist him.

It is clear that the alleged negligent acts which resulted in Ms. Irion’s injury, were not carried out by the legislative body of the city. Nor were they performed by any member, officer or agent of the legislative body. The City Council may retain ultimate authority to regulate street traffic; however this does not lead to the conclusion that the executive is its agent. This system of city government established by the charter is merely a reflection of the separation of powers form of government, which controls our nation and this state. Therefore, the immunity provisions of § 2-9-111, MCA, do not apply to the actions of the City Administrator and the District Court’s grant of summary judgment in favor of the City must be reversed.

II. Section 1983 Claims.

In a rather convoluted argument, the Irions have attempted to convert this action, which is based on negligence, into a constitutional claim by invoking the protections of 42 U.S.C. § 1983. Congress passed this statute in order to provide legal redress for persons deprived of legal rights or privileges through state action. The United States Supreme Court has held, however, that in order to set forth a valid cause of action under this statute, a plaintiff must allege a breach of a duty that is greater than mere negligence. Davidson v. Cannon (1986), 474 U.S. 344, 106 S.Ct. 668, 88 L.Ed. 2d 677. The Irions maintain that the defendants’ actions were greater than negligent and that they amounted to deliberate indifference to Carla Irion’s welfare.

We reject this argument. The bus lane was set up in an effort to protect the students of Sky View High School from injury. There is no evidence that either the City or the District acted in “disregard of a known or obvious risk that was very likely” [words of plaintiff] to result in Carla Irion’s injuries. At the absolute maximum the Irions’ claims support a possible negligence action. Such allegations do not support an action under § 1983. The District Court’s order of summary judgment on this issue is affirmed.

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


author: CHIEF JUSTICE TURNAGE JUSTICE TRIEWEILER,

text:
    JEROME FIRST, JR., Petitioner and Respondent, v. STATE OF MONTANA, Department of Social and Rehabilitation Services, EX REL., Faith LAROCHE, Respondent and Appellant.
    No. 90-103.
    Heard Jan. 23, 1991.
    Submitted Feb. 7, 1991.
    Decided Mar. 19, 1991.
    247 Mont. 465.
    808 P.2d 467.

      K. Amy Pfeifer, Child Support Enforcement Div., Helena, for appellant.
    Rene A. Martell and D. Michael Eakin, Montana Legal Services, Wolf Point, for respondent.
    Reid Peyton Chambers, Sonosky, Chambers & Sachse, Washington, D.C., Terry Spear, Matovich, Addy & Keller, Billings, Ronald S. Luedemann and Lucille G. Meis, U.S. Dept, of Health & Human Services, Denver, for amicus curiae.
   CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

The State of Montana, Department of Social and Rehabilitation Services, ex rel., Faith LaRoche, appeals an order of the First Judicial District, Lewis and Clark County, which held that a Montana administrative tribunal had no subject matter or personal jurisdiction to utilize income withholding proceedings against Montana unemployment insurance benefits payable to Jerome First, Jr., an enrolled member of the Fort Peck Tribes residing on the Fort Peck Indian Reservation, for payment of a previously court-ordered child support obligation. This District Court order reversed an income withholding fair hearing decision and order of the State of Montana Child Support Enforcement Division. We reverse the District Court’s order.

Appellant raises the following issue:

May Montana utilize its income withholding procedure against off-reservation income payable to an Indian, who resides on a reservation in Montana, to enforce a court-ordered child support obligation?

FACTS AND PROCEDURE

Jerome First, Jr., married Faith First (now Faith LaRoche) in Reno, Nevada in March, 1966. After their marriage, the couple resided on the Rosebud Indian Reservation in South Dakota. The marriage produced three children. In 1971, the couple separated; Mr. First, Jr., returned to his home on the Fort Peck Indian Reservation in Montana. On January 20,1972, a South Dakota state court issued a divorce decree to the couple. The divorce decree awarded Ms. LaRoche sole custody of the children and ordered Mr. First, Jr., to pay Ms. Laroche $50.00 per month per child as child support.

On August 18, 1986, Ms. LaRoche executed a power of attorney, which appointed the Office of Child Support Enforcement of the South Dakota Department of Social Services (OCSE) her attorney-in-fact to enforce and collect past, current, and future child support owed by Mr. First, Jr. On April 27, 1988, OCSE executed an authorization to act as agent in interstate case, as Mr. First, Jr., was still residing on the Fort Peck Reservation in Montana at this time. This document authorized the State of Montana, Department of Social Rehabilitation Services, Child Support Enforcement Division (CSED) to act as South Dakota’s agent to collect child support owed to Ms. LaRoche. In turn, CSED sought to give full faith and credit to the child support order of the state court of South Dakota.

On May 11, 1988, Ms. LaRoche executed an affidavit detailing the amount of child support she had received from Mr. First, Jr. Ms. LaRoche’s affidavit stated that she received $3,185.32 in child support payments directly from Mr. First, Jr., from February, 1972, to August, 1986. This affidavit further stated that Ms. LaRoche received $1,431.62 in child support payments from August, 1986, to April, 1987, through the collection efforts of South Dakota’s OCSE. Therefore, according to the affidavit, as of May 11,1988, Mr. First, Jr., owed Ms. LaRoche $21,433.06 in past child support payments and owed $50.00 per month in future child support payments for Christopher N. First, who would not emancipate until June 6, 1989.

On November 23, 1988, Montana’s CSED issued a notice of intent to withhold income, under 42 U.S.C. § 666(b) and §§ 40-5-401, et seq., MCA, against Montana unemployment insurance benefits payable to Mr. First, Jr. Mr. First, Jr., was duly served a copy as required under § 40-5-413, MCA. In response to this notice, Mr. First, Jr., filed a request for hearing with CSED on December 1,1988. At the January 5, 1989, telephonic hearing, Mr. First, Jr.’s attorney argued that, because Mr. First, Jr., was an enrolled member of the Fort Peck Tribes and had no contacts off the Fort Peck Indian Reservation where he was living, CSED had no jurisdiction to enforce his child support obligation. Moreover, Mr. First, Jr.’s attorney argued that the Fort Peck Tribal Court had exclusive jurisdiction over this matter.

On April 3,1989, a CSED hearings officer ordered that CSED was authorized to issue an order to withhold income, determining that Mr. First, Jr., failed to establish that CSED’s jurisdiction, 1) was preempted by federal treaty or statute, 2) would interfere with the Fort Peck Tribe’s self-government, or, 3) would interfere with the Fort Peck Tribal Court’s jurisdiction in income withholding cases.

On May 4,1989, Mr. First, Jr., petitioned for judicial review of this order to the District Court. The District Court reversed the order in a decision dated November 21, 1989, holding that Montana did not “have subject matter or personal jurisdiction sufficient to allow it to exercise its administrative withholding procedures in this case.” From this decision, the State of Montana, Department of Social and Rehabilitation Services appeals.

Following the filing of this appeal, on June 21, 1990, the State of South Dakota Department of Social Services issued an order for withholding of income to the Bureau of Indian Affairs against Mr. First, Jr., to enforce his child support obligation. On June 24, 1990, Mr. First, Jr., assigned the Montana Department of Family Services fifty percent of his future right to Montana unemployment insurance benefits for payment of his child support obligation. Based on these two developments, on July 20, 1990, Mr. First, Jr., moved this Court to dismiss this appeal on the grounds of res judicata and mootness. On September 13, 1990, this Court dismissed this motion.

ANALYSIS

May Montana utilize its income withholding procedure against off-reservation income payable to an Indian, who resides on a reservation in Montana, to enforce a court-ordered child support obligation?

In the past, this Court has held that Montana tribunals lack subject matter and personal jurisdiction in cases involving Indian litigants and child support actions when there are no established off-reservation acts. See Flammond v. Flammond (1980), 190 Mont. 350, 621 P.2d 471; State ex rel. Three Irons v. Three Irons (1980), 190 Mont. 360, 621 P.2d 476. Here, however, we are presented with a case of first impression, as this is a child support enforcement action, with Indian litigants, involving an income withholding proceeding against off-reservation income in the form of Montana unemployment insurance benefits. The District Court held that the Montana administrative tribunal needed and lacked subject matter and personal jurisdiction to enforce Mr. First, Jr.’s child support obligation through utilizing the federally mandated income withholding proceeding against his off-reservation income. We disagree.

In order for a tribunal to have jurisdiction over a particular action, the tribunal must have subject matter jurisdiction, and, either jurisdiction over the person if the action is in personam, or, jurisdiction over the res, if the action is in rem or quasi in rem. R. Casad, Jurisdiction in Civil Actions (1983, Supp. 1986), § 1.01.

1. Montana’s tribunals have subject matter jurisdiction to issue and enforce an order to withhold income against Montana unemployment insurance benefits payable to an Indian, who resides on a reservation in Montana.

Subject matter jurisdiction is a tribunal’s power “‘to hear and determine’” a certain type of controversy. Standard Oil Co. v. Montecatini Edison S.P.A. (D.C. Del. 1972), 342 F. Supp. 125, 129-30 (citation omitted). This Court, in State ex rel. Iron Bear v. DistrictCourt (1973), 162 Mont. 335, 512 P.2d 1292, established a three-part test to determine subject matter jurisdiction in a matter involving an Indian, enrolled in a tribe and residing on a reservation:

“(1) whether the federal treaties and statutes applicable have preempted state jurisdiction;
“(2) whether the exercise of state jurisdiction would interfere with reservation self-government; and
“(3) whether the Tribal Court is currently exercising jurisdiction or has exercised jurisdiction in such a manner as to preempt state jurisdiction.”

Iron Bear, 162 Mont. at 346, 512 P.2d at 1299.

In 1980, the United States Supreme Court addressed the issue of subject matter jurisdiction regarding Indian tribes and tribal members in White Mountain Apache Tribe v. Bracker (1980), 448 U.S. 136, 100 S.Ct. 2578, 65 L.Ed. 2d 665:

“Although ‘[generalizations on this subject have become ... treacherous,’ [citation omitted], our decisions establish several basic principles with respect to the boundaries between state regulatory authority and tribal self-government. Long ago the Court departed from Mr. Chief Justice Marshall’s view that ‘the laws of (a State) can have no force’ within reservation boundaries. [Citations omitted.] At the same time we have recognized that the Indian tribes retain ‘attributes of sovereignty over both their members and their territory.’ [Citations omitted.] As a result, there is no rigid rule by which to resolve the question whether a particular state law may be applied to an Indian reservation or to tribal members.
“Congress has broad power to regulate tribal affairs under the Indian Commerce Clause, Art 1, § 8, cl. 3. [Citation omitted;] This congressional authority and the ‘semi-independent position’ of Indian tribes have given rise to two independent but related barriers to the assertion of state regulatory authority over tribal reservations and members. First, the exercise of such authority may be pre-empted by federal law. (Citations omitted.) Second, it may unlawfully infringe ‘on the right of reservation Indians to make their own laws and be ruled by them.’ [Citations omitted.] The two barriers are independent because either, standing alone, can be sufficient basis for holding state law inapplicable to activity undertaken on the reservation or by tribal members. They are related, however, in two important ways. The right of tribal self-government is ultimately dependent on and subject to the broad power of Congress. Even so, traditional notions of Indian self-government are so deeply engrained in our jurisprudence that they have provided an important ‘backdrop,’ (citation omitted), against which vague or ambiguous federal enactments must always be measured.”

White Mountain Apache Tribe, 448 U.S. at 141-43, 100 S.Ct. at 2582-83 (emphasis added).

Issues concerning jurisdiction of state courts involving matters within exterior boundaries of federally recognized Indian reservations and members of the organized tribes of such reservations are subject to control by the United States Congress and the federal courts. The decision of the United States Supreme Court in White Mountain Apache Tribe followed our decision in Iron Bear by nearly seven years. In adjudicating jurisdictional matters involving Indian tribes and tribal members, the United States Supreme Court is the final authority. Therefore, the more recent test set forth in White Mountain Apache Tribe is the test to be applied, and for such reason, we are adopting this test. Accordingly, here, we must determine whether: 1) the assertion of subject matter jurisdiction by Montana’s administrative and judicial tribunals is preempted by federal law, and 2) the assertion of subject matter jurisdiction by Montana’s administrative and judicial tribunals would -unlawfully infringe on Fort Peck Indian Reservation’s right to makes its own laws and be ruled by these laws.

When examining possible federal preemption, the test, when off-reservation income payable to an Indian is involved, “call[s] for a particularized inquiry into the nature of the state, federal, and tribal interests at stake, an inquiry designed to determine whether, in the specific context, the exercise of state authority would violate federal law.” White Mountain Apache Tribe, 448 U.S. at 145, 100 S.Ct. at 2584. Here, the exercise of state authority over this matter would not violate any existing federal law or treaty.

Moreover, the assertion of subject matter jurisdiction by Montana’s tribunals promotes established federal law as well as its underlying policy. Federal law, 42 U.S.C. §§ 601, et seq., mandates states, such as Montana, that participate in Aid to Families with Dependent Children (AFDC), to enact and enforce a child support enforcement plan that conforms with its requirements as well as regulations promulgated by the United States Department of Health and Human Services. In particular, 42 U.S.C. §§ 666 (a)(1) and (b) and 45 C.F.R. § 303.100 (1989) mandate these participating states to enact and enforce income withholding proceedings to collect outstanding child support owed by parents absent from the jurisdiction wherein the child support obligation is owed. Compare §§ 40-5-401, et seq., MCA. Furthermore, 42 U.S.C. § 654(19) and 45 C.F.R. § 302.65 (1989) mandate participating states to enforce unpaid child support obligations through an unemployment compensation intercept program. Compare § 39-51-3106, MCA. If a participating state fails to comply with the requirements under 42 U.S.C. §§ 601 et seq., and the promulgated regulations, the Secretary of Health and Human Services may impose financial sanctions to the state. See 42 U.S.C. § 603(h) and 45 C.F.R. § 305.100 (1989).

Accordingly, Montana, as a participating state, is required by federal law to enforce child support obligations by withholding the obligor’s income, including unemployment insurance benefits, through methods including income withholding proceedings. Compliance with these federal mandates results in Montana receiving federal funding for a certain percentage of Montana’s costs associated with establishing and enforcing child support obligations owed by absent parents. Besides the possible financial sanctions against Montana, if Montana’s tribunals were not allowed to utilize income withholding proceedings against off-reservation income payable to absent Indian parents, Montana’s recovery of AFDC benefits provided to children whose absent parents are Indian would be negatively affected. This would also affect non-AFDC children whose parents are Indian, such as Mr. First, Jr.’s and Ms. LaRoche’s children, as they would be deprived of the income that would directly be given to them by CSED through income withholding proceedings. Clearly this result would be contrary to the federal law’s underlying policy of ensuring that absent parents take responsibility for their children by financially supporting them, which accordingly reduces the welfare ranks. U.S. Dept, of Health and Human Services, Office of Child Support Enforcement, Handbook of Child Support Enforcement (Sept. 1989).

Furthermore, 42 U.S.C. §§ 601 et seq., are federal statutes of general application, and as such, apply to all residents of the United States as well as their property. Federal Power Commission v. Tuscarora Indian Nation (1960), 362 U.S. 99, 116, 80 S.Ct. 543, 553, 4 L.Ed.2d 584, 596. In the case of Donovan v. Coeur d’Alene Tribal Farm (9th Cir. 1985), 751 F.2d 1113, the court carved out three exceptions to this rule:

“A federal statute of general applicability that is silent on the issue of applicability to Indian tribes will not apply to them if: (1) the law touches ‘exclusive rights of self-governance in purely intramural matters’; (2) the application of the law to the tribe would ‘abrogate rights guaranteed by Indian treaties’; or (3) there is proof‘by legislative history or some other means that Congress intended [the law] not to apply to Indians on their reservations ....’ [Citations omitted.]” Donovan, 751 F.2d at 1116.

Here, the federal law does not affect Fort Peck Tribe’s exclusive right of self-governance in a purely intramural matter, which will be more thoroughly discussed below. No federal treaty exists which guarantees the Fort Peck Tribe the exclusive right to collect child support from absent parents by means of income withholding. And, the legislative history of 42 U.S.C. §§ 601, et seq., does not reflect that Congress intended to exclude Indians from this federal legislation. Therefore, with regard to the first prong of the White Mountain Apache Tribe test, we find no federal preemption here.

With regard to the second prong of the White Mountain Apache Tribe test, Montana’s CSED assertion of subject matter jurisdiction over the income withholding proceeding against Mr. First, Jr., does not interfere with the Fort Peck Tribe’s right to make its own laws and be ruled by these laws. Allowing Montana’s tribunals to assert subject matter jurisdiction over this income withholding proceeding against Montana unemployment insurance benefits does not prevent the Fort Peck Tribe from continuing to provide a forum for tribal members with regard to actions including adoptions, paternity, child support obligations, and garnishments. Moreover, allowing Montana tribunals to assert subject matter jurisdiction in such instances would benefit Fort Peck’s tribal members by assisting Indian parents owed child support by absent parents with off-reservation income.

Mr. First, Jr., argues that the Fort Peck Tribe has exclusive jurisdiction over all civil matters involving its tribal members under the Comprehensive Code of Justice enacted by the Fort Peck Tribal Executive Board (Code). Mr. First, Jr., further argues that this matter is a domestic affair, or in other words, a “purely intramural matter” citing Donovan, supra, and accordingly, are ruled by tribal tradition and custom, under the Code.

The Code, in §§ 304(b) and 311, does provide for garnishment of wages for satisfaction of a child support obligation. The Code, however, does not provide for income withholding proceedings against a tribal member’s off-reservation income to enforce a child support obligation. Therefore, the Fort Peck Tribal Court provides no remedy to Ms. LaRoche regarding the off-reservation income of Mr. First, Jr. Additionally, although this income withholding proceeding is for the purpose of enforcing a child support obligation, it is not a domestic affair, dominated by tribal tradition and custom; it is a collection action, and accordingly, not an area dominated by tribal tradition and custom. We therefore hold that Montana’s tribunals have subject matter jurisdiction over an income withholding proceeding against off-reservation income payable to an enrolled tribal member living on a reservation for payment of a child support obligation.

2. The initiation of income withholding proceedings against the unemployment compensation benefits is a quasi in rem action, and therefore, personal jurisdiction over Mr. First, Jr., is not required.

Quasi in rem jurisdiction is predicated on the existence of property within the territorial jurisdiction of the forum state. Hanson v. Denckla (1958), 357 U.S. 235, 247 n. 12, 78 S.Ct. 1228, 1235, n.12, 2 L.Ed.2d 1283, 1293. In particular, a form of quasi in rem jurisdiction known as attachment jurisdiction, is a case where a judgment creditor seeks to seize property located within the forum state as payment to enforce a pre-existing claim unrelated to the property, in other words, a collection action. Id. See also Restatement 2d of Judgments, § 8 (1982). Administrative income withholding proceedings require Montana to exercise jurisdiction over the res, or thing, and not the person. Therefore, an administrative income withholding proceeding, a collection action, is a quasi in rem action, and here, jurisdiction is not based on the presence of Mr. First, Jr., in Montana, but rather, that the unemployment insurance benefits to be seized are within the territorial limits of Montana.

Prior to Shaffer v. Heitner (1977), 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683, presence of the property to be seized was sufficient to allow a state to exercise in rem and quasi in rem jurisdiction. Harris v. Balk (1905), 198 U.S. 215, 25 S.Ct. 625, 49 L.Ed. 1023. But in the case of Shaffer, the Court held that actions in rem and quasi in rem are subject to the same test required for in personam actions: 1) the defendant must be shown to have “minimum contacts” with the forum state, and, 2) a grant of jurisdiction to the forum state must provide substantial justice. Shaffer, 433 U.S. at 207, 97 S.Ct.at 2581.

A footnote in Shaffer, however, states that, where the action is to enforce an already determined debt, the defendant’s “minimum contacts” with the forum state are not at issue. Shaffer, 433 U.S. at 210 n. 36. See also Rich v. Rich (1978), 93 Misc.2d 409, 402 N.Y.S.2d 767; Berger v. Berger (1980), 138 Vt. 367, 417 A.2d 921; Huggins v. Dienhard (1982), 134 Ariz. 98, 654 P.2d 32; State ex rel. Dep’t of Revenue v. Control Data Corp. (1986), 300 Or. 471, 713 P.2d 30. Here, because this action is to enforce an already determined debt, an outstanding child support obligation, Mr. First, Jr.’s “minimum contacts” are not at issue. However, even if Mr. First, Jr.’s “minimum contacts” were at issue, Mr. First, Jr., clearly established “minimum contacts” with the State of Montana by accepting Montana unemployment insurance benefits, benefits governed under §§ 39-51-101, et seq., MCA.

Finally, allowing Montana tribunals to assert jurisdiction here would provide substantial justice as the children of Mr. First, Jr., and Ms. LaRoche would benefit from the support of their absent parent. We therefore hold that Montana tribunals have quasi in rem jurisdiction over this collection action against Mr. First, Jr. Because we have concluded that Montana tribunals have both subject matter and quasi in rem jurisdiction here, we hold that Montana may utilize its income withholding proceeding against Mr. First, Jr.’s Montana unemployment insurance benefits, thereby reversing the District Court’s order.

Reversed.

JUSTICES HARRISON, McDONOUGH, HUNT, BARZ and WEBER concur.

JUSTICE TRIEWEILER,

dissenting:

I respectfully dissent from the Opinion of the majority.

The only issue raised by the appellant on appeal was set forth by the appellant as follows:

‘Whether the State of Montana, Department of Social and Rehabilitation Services, Child Support Enforcement Division has jurisdiction to initiate administrative income withholding proceedings against State of Montana unemployment insurance benefits payable to Jerome First, Jr. an enrolled member of the Fort Peck tribes residing on the Fort Peck Indian Reservation in payment of a previously ordered child support obligation.”

The District Court found, based upon this Court’s previous decisions in State ex rel. Iron Bear v. District Court (1973), 162 Mont. 335, 512 P.2d 1292 and State et al. v. Flammond v. Flammond (1980), 190 Mont. 350, 621 P.2d 471, that the State had neither personal nor subject matter jurisdiction in this case.

On appeal, the State argued, and this Court has now agreed that it had quasi in rem jurisdiction because it had jurisdiction over the unemployment benefits which were paid to Jerome First by the State of Montana. For that reason, the State’s position was that personal jurisdiction was unnecessary. In fact, the State has never claimed in any of the proceedings in the District Court that it had personal jurisdiction over the petitioner.

The District Court’s decision was entered on November 21, 1989 and the State’s notice of appeal was filed on January 18, 1990.

On June 24, 1990, prior to oral argument or any decision in this case, First gave a non-revocable assignment of his unemployment benefits to the Montana Department of Family Services. He had also obtained employment and was having his income withheld to meet his child support obligation pursuant to an order of a South Dakota court. He did not contest the jurisdiction of the South Dakota court to collect support. At that point there were no further unemployment benefits to be withheld pursuant to any order of the District Court or this Court.

Other than the -unemployment benefits, there is no known basis for the State’s assertion of quasi in rem jurisdiction at either the present time or in the future.

For these reasons, First moved to dismiss the State’s appeal for the reason that it is moot.

It is a well-established rule that this Court does not exist for the purpose of issuing advisory opinions which have no practical impact on the parties, and that this Court will not hear cases that have become moot. Adkins v. City of Livingston (1948), 121 Mont. 528, 194 P.2d 238. In fact, this Court has in the past shown such an aversion to deciding moot issues that it has dismissed appeals for mootness on its own initiative. Montana Power Co. v. Charter (1977), 173 Mont. 429, 568 P.2d 118.

In response to First’s motion to dismiss, the State asked this Court to expand the issue that it had originally raised and determine that it had jurisdiction to withhold income from successive payors without any suggestion of who they might be or where they are located.

First’s motion was dismissed without explanation. Other than by passing reference neither is the issue of mootness discussed in the majority’s Opinion.

I disagree with the majority Opinion first of all because the issue it decided was moot and this Court is not in a position to speculate whether quasi in rem jurisdiction will exist in the future without knowing the nature or location of the income in question.

I also dissent for the reason that this Court’s decision ignores previous precedent which I believe controls the outcome in this case and which was correctly applied by the District Court.

The appellants’ briefs and the majority Opinion dedicated considerable space to the fact that First was delinquent in child support payments and that the federal government threatens to withhold welfare funds from states which do not cooperate in the collection of delinquent child support payments. However, the proper issue in this case is not whether First is a satisfactory parent, and it has nothing to do with the myriad of bureaucratic regulations imposed by the federal government. Certainly the State of Montana cannot be punished for its failure to collect child support payments when it has no lawful authority for doing so.

The only issue properly before this Court is whether based on prior decisions of this Court, the State of Montana could exercise jurisdiction over the petitioner Jerome First, Jr. Clearly it could not.

In State ex rel. Flammond v. Flammond (1980), 190 Mont. 350, 621 P.2d 471, we dealt with nearly identical facts and found that the courts of this state had no jurisdiction to enforce child support payments.

In Flammond, the father was an enrolled member of the Blackfeet tribe residing within the boundaries of the Blackfeet Reservation. His former spouse resided in California where she received public support for their child.

Under California’s Uniform Reciprocal Enforcement of Support Act, a California court found that the father owed a duty of support and ordered a petition sent to the Glacier County District Court in Montana for filing of an enforcement action under the provisions of Montana’s Uniform Reciprocal Enforcement of Support Act (URESA) at §§ 40-5-101, et seq., MCA.

In that case, the father moved to dismiss on the grounds that the court lacked personal and subject matter jurisdiction and we affirmed. In doing so, we made the following observations which are relevant in this case:

“Here there are absolutely no off-reservation acts in Montana sufficient to vest state courts with jurisdiction over the respondent, a reservation Indian. The only off-reservation acts occurred in California. It is well settled that a reservation Indian’s domicile on the reservation is not an in-state contact which grants jurisdiction to state courts. Fisher v. District Court (1976), [424 U.S. 382, 96 S.Ct. 943, 47 L.Ed.2d 106] supra; Kennerly v. District Court (1971), [400 U.S. 423, 91 S.Ct. 480,27 L.Ed.2d 507,] supra; Williams v. Lee (1959), 358 U.S. 217, 79 S.Ct. 269, 3 L.Ed. 2d 251.”

621 P.2d at 471.

“Similarly, there exists no duty to support on the part of the father in Montana. For, as we have determined, the Montana courts do not have subject matter jurisdiction over the transaction in question.”

621 P.2d at 474.

Maybe the most important observation in the Flammond decision for purposes of this discussion was the following:

“...A state may simply not extend its jurisdiction by judicial fiat no matter how compelling the policy considerations for doing so may seem if there is no legal basis to support state jurisdiction. If a remedy other than tribal court is to exist, Congress must provide it.”

621 P.2d at 474.

This Court arrived at a similarly indistinguishable decision in State ex rel. Three Irons v. Three Irons (1980), 190 Mont. 360, 621 P.2d 476.

The majority Opinion distinguishes Flammond and Three Irons by the fact that this case is concerned with unemployment insurance benefits. However, as previously noted, this case is no longer concerned with unemployment insurance benefits, because there are none, and if any accrue in the future the petitioner has signed an irrevocable assignment of those rights to the Child Support Enforcement Division. The only real difference between this case and the previous decisions is that in this case the United States government filed an amicus brief threatening to withhold federal funding unless we bend Montana law to suit its purposes. However, those threats are neither credible nor relevant.

Instead of basing its decision on previous decisions in this Court, the majority chose to base its decision on White Mountain Apache Tribe v. Bracker (1980), 448 U.S. 136, 100 S.Ct. 2578, 65 L.Ed.2d 665. However, under that decision, Montana cannot assert subject matter jurisdiction where to do so would infringe on the Fort Peck Indian Reservation’s right to make its own laws and be ruled by those laws. That is exactly what this Court’s decision does.

The Comprehensive Code of Justice enacted by the Fort Peck Tribal Executive Board does provide for a method of enforcing and satisfying child support obligations. What this Court’s decision says is that if the method provided is not satisfactory to the State of Montana, then the State is free to substitute its system of collection for the tribal system. That is not consistent with the White Mountain Apache test.

In a portion of the White Mountain Apache Tribe decision which is not discussed by the majority, the United States Supreme Court stated:

“When on-reservation conduct involving only Indians is at issue, state law is generally inapplicable, for the State’s regulatory interest is likely to be minimal and the federal interest in encouraging self-government is at its strongest.”

488 U.S. at 144, 100 S.Ct. at 2584.

According to the White Mountain Apache Tribe decision, the majority’s decision is objectionable because it interferes with efforts by the tribe to govern themselves in the area of child support. Those efforts should be encouraged, not frustrated at the behest of the federal government.

For these reasons, I would affirm the District Court and find that the State of Montana has neither personal jurisdiction over the petitioner nor subject matter jurisdiction in this case.

       Mr. First, Jr.’s Montana unemployment insurance benefits were based on employment both on and off the reservation.

       This test originated in the landmark case of International Shoe Co. v. Washington (1945), 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95.


author: JUSTICE WEBER

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. SHAWN ALLEN STEELE, Defendant and Appellant.
    No. 90-363.
    Submitted on briefs Feb. 7, 1991.
    Decided Mar. 19, 1991.
    247 Mont. 480.
    807 P.2d 1348.

      J. Dirk Beccari and Dave Ohler, Missoula Public Defender Office, Missoula, for defendant and appellant.
    Marc Racicot, Atty. Gen., Joe Thaggard, Asst. Atty. Gen., Helena, Robert L. Deschamps, III, Co. Atty., Betty Wing, Deputy Co. Atty., Missoula, for plaintiff and respondent.
   JUSTICE WEBER

delivered the Opinion of the Court.

A jury trial was held in the District Court for the Fourth Judicial District, Missoula County. Defendant, Shawn Allen Steele, was convicted of misdemeanor criminal mischief, felony criminal mischief, misdemeanor theft and felony theft. Defendant appeals. We affirm.

The issues on appeal are:

1. Did the District Court err in denying defendant’s motion for directed verdict?

2. Did the aggregation of the value of the stolen property subject the defendant to multiple convictions for the same transaction?

On Saturday, October 28, 1989, Renae Rostad (Ms. Rostad) attended a late movie at the Cinema 3 movie theater in Missoula, Montana. Ms. Rostad parked her car in the theater’s rear-parking lot. At about 11:45 p.m., after the movie, she returned to her car only to find that someone had broken one of its windows and stolen her purse. The purse, valued at $55, contained $10, several credit cards, and a “bank card” from First Interstate Bank.

Ms. Rostad reported the theft to the Missoula Police Department that night. She reported the theft of her bank card on the following Monday. The customer representative for First Interstate Bank checked the “cardholder activity report” for Ms. Rostad’s bank card and discovered that the night Ms. Rostad’s purse was stolen someone made three $100 withdrawals from her account with her bank card. A fourth attempt to withdraw $100 was made but since the maximum allowable withdrawal from Ms. Rostad’s account was $300 per day, the attempted withdrawal was refused. A video tape taken of all individuals who withdraw money from the Automatic Teller Machine (ATM) revealed that an unidentified male made the three withdrawals. No suspect was apprehended at that time.

Early in 1990, a number of break-ins into vehicles occurred in the parking lots of Cinema 3 and the Duelin’ Daltons Saloon in Missoula. Most of the break-ins resulted in the theft of purses and credit cards from the vehicles.

The owner of Duelin’ Daltons, Bruce Fowler, began to conduct a surveillance of the Duelin’ Dalton’s parking lot. On February 2,1990, Mr. Fowler saw a.man emerge from a vehicle and steal something from a car parked across the street from Duelin’ Daltons. The man returned to his car and drove away. Mr. Fowler and his friend, Wayne Frank, followed the suspect’s car to the parking lot of the Cinema 3. Mr. Fowler used his car to block in the suspect’s car in the parking lot. They could see that the suspect was still sitting in his car going through a purse.

Mr. Fowler and Mr. Frank then approached the suspect’s vehicle. Mr. Frank recognized the suspect as the defendant and someone he had known for years. Defendant resisted an attempted citizen’s arrest by the two men. Mr. Fowler then went to a nearby phone to call the police. In the meantime, defendant admitted to Mr. Frank that he had been involved in thefts from cars for several months. Defendant then escaped on foot.

When the police arrived, they impounded defendant’s vehicle and searched it. The detective conducting the search found a purse, two wallets, two sets of keys and identification cards. When the detective reviewed the investigative file from the Rostad case, he recognized the man in the ATM photographs withdrawing money from Ms. Rostad’s account as the defendant. The detective later interviewed defendant. The detective testified that defendant admitted to being the man in the photographs but denied any wrongdoing.

In support of its motion for leave to file an Information, the State submitted to the court an affidavit setting forth the circumstances of the alleged crimes. The affidavit revealed that defendant admitted to Mr. Frank that he had been stealing items from cars for several months in order to support his child.

A jury trial was held. At the close of the State’s case-in-chief, defendant moved the court to either dismiss Count V of the Information or direct a verdict in defendant’s favor. Count V read:

“On or about October 28, 1989, through November 5, 1989, the above-named Defendant purposely or knowingly obtained or exerted unauthorized control over property of another, a purse and cash with value in excess of $300, property of Renae Rostae (sic), with the purpose to deprive the owner of the property.”

Defendant argued that the value of the purse stolen from Ms. Rostad was not over $300. Counsel for the defense argued:

“My first motion regarding this is that the court should dismiss the felony charge because the State has failed to prove value of the purse being over $300.00.
“It’s my position that the transaction which occurred at the bank is a deceptive practices or some other theft. It’s a separate offense. You cannot use the money taken off of that card to include it in the value of the purse.
“The bank card itself is worth less.
“[TJhe State can’t use that value to enhance the value of the purse ....
“Renae Rostad was out the value of her purse, she was out the $10.00 in her purse, and she was out $50.00 according to the last person we had testify to the bank.
“The bank was out the other $250.00. And as long as she notified them within two business days, her account was never affected by that.
“Therefore, her charge should only be a misdemeanor charge because they haven’t proven, even if you aggregate the total amount in it — with the bank machine, the value still does not exceed $300.00.”

The State argued that the purse and the cash together were all part of the same transaction because not only was the bank card taken from the purse, it was used within a half-hour from the time the purse was stolen.

On appeal, defendant challenges only his conviction for Count V, the felony theft relating to Ms. Rostad’s purse.

I.

Did the District Court err in denying defendant’s motion for directed verdict?

Defendant maintains that the State’s failure to charge the theft of Ms. Rostad’s purse and the money from her bank account as the same transaction or a common scheme was fatal to the State’s case. Defendant argues that in this case no evidence permitted the jury to conclude that the value of the property stolen from Ms. Rostad exceeded $300. He maintains that two misdemeanor thefts were involved here: one involved breaking into a car and stealing a purse; the other the use of a bank card.

The State contends that the Information properly charged defendant with felony theft as § 45-6-301(l)(a), MCA, defines the offense. Section 45-6-301, MCA, provides (in part):

“(1) A person commits the offense of theft when he purposely or knowingly obtains or exerts unauthorized control over property of the owner and:
“(a) has the purpose of depriving the owner of the property;
“(6) A person convicted of the offense of theft of property not exceeding $300 in value shall be fined not to exceed $500 or be imprisoned in the county jail for any term not to exceed 6 months, or both. A person convicted of the offense of theft of property exceeding $300 in value ... shall be fined not to exceed $50,000 or be imprisoned in the state prison for any term not to exceed 10 years, or both.
“(7) Amounts involved in thefts committed pursuant to a common scheme or the same transaction, whether from the same person or several persons, may be aggregated in determining the value of the property” (Emphasis added).

Thus, the State must prove that the value of the property stolen exceeds $300. The State maintains that the evidence presented at trial indicated that the theft of the purse and the money from Ms. Rostad’s bank account constituted the same transaction. We agree.

When reviewing the denial of a motion for directed verdict, only substantial evidence in the record supporting the jury’s finding is required. State v. Laverdure (1990), 241 Mont. 135, 785 P.2d 718. The standard of review on issues of substantial evidence is that the conviction cannot be overturned if evidence, when viewed in a light most favorable to the prosecution, would allow any rational trier of fact to find essential elements of the crime beyond a reasonable doubt. State v. Krum (1989), 238 Mont. 359, 362, 777 P.2d 889, 891.

The evidence presented at trial proved that the bank card taken from Ms. Rostad’s purse was used to withdraw the cash within about a half-hour after the theft of the purse. The evidence presented at trial would allow a rational trier of fact to find the essential elements of felony theft beyond a reasonable doubt. We hold that the District Court did not err in denying defendant’s motion for a directed verdict.

II.

Did the aggregation of the value of the stolen property subject the defendant to multiple convictions for the same transaction?

Defendant maintains that the aggregation of the value of Ms. Rostad’s purse and the money stolen from her bank account subjected him to multiple convictions for the same transaction, a violation of §46-11-502, MCA. That section prohibits the State from convicting a defendant of more than one offense arising from the same conduct. As the State points out, such was not the case here. Defendant was charged and convicted of one crime only (felony theft) for his theft of Ms. Rostad’s purse and use of her bank card. We conclude defendant’s argument is without merit. We hold that the aggregation of the value of the stolen property did not subject defendant to multiple convictions for the same transaction.

Affirmed.

JUSTICES HARRISON, HUNT, McDONOUGH and TRIEWEILER concur.


text:
    IN RE THE MARRIAGE OF: WENDELYN HOLMQUIST RUFF, Petitioner and Respondent, and JOHNNY LANCE RUFF, Respondent and Appellant.
    No. 90-440.
    Submitted on briefs Jan. 31, 1991.
    Rehearing Denied April 16, 1991.
    Decided Mar. 19, 1991.
    247 Mont. 486.
    807 P.2d 1345.

      John P. Atkins, Bryan & Atkins, Bozeman, for respondent and appellant.
    Michael J. Lilly, Berg, Lilly, Stokes, Andriolo, Tollefsen & Schraudner, Bozeman, for petitioner and respondent.
   CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

This dissolution of marriage was entered in the District Court for the Eighteenth Judicial District, Gallatin County. The husband appeals from the property distribution. We affirm.

The issues are:

1. Did the District Court err by including in the parties’ marital estate a 1979 mobile home, a 1986 Pontiac Grand Am automobile, and a 1977 Freuhauf flatbed trailer?

2. Did the court err in valuing the parties’ portable hoist, known as a “cherry picker?”

3. Did the court err by failing to recognize all of the parties’ marital debts?

4. Did the court err in computing the net worth of the marital estate and in the distribution thereof?

The parties were married in October of 1983 in Elko, Nevada. They have one minor child, a son born on May 12, 1986. The wife filed a petition for dissolution of marriage in August 1989. The parties stipulated that they would share joint custody of their son and the court adopted that stipulation in its judgment. Property division was not so smoothly resolved. There was considerable disagreement at the property division hearing not only about the division of the marital estate, but also about what property was included in the marital estate. At the time of hearing, the husband was a self-employed truck driver earning $1,000 per month. The wife was a travel agent earning $650 per month.

In general, the District Court accepted the wife’s testimony concerning the marital estate and debts. It awarded the wife a 1986 Grand Am automobile and a 1981 Toyota. It awarded husband a 1981 Jeep, a 1972 Freightliner, a 1977 Freuhauf flatbed trailer, a 1979 farm trailer, a “cherry picker,” a 1979 mobile home, the parties’joint checking account, husband’s individual checking account, a 1981 Honda, and a 1982 Magna Honda. It also ordered husband to pay liabilities to VISA, Sears, Glen Hargrove on a contract to buy the mobile home, and GMAC on a loan for the Grand Am, and to pay the wife $10,117. Husband appeals.

I.

Did the District Court err by including in the parties’ marital estate a 1979 mobile home, a 1986 Pontiac Grand Am automobile, and a 1977 Freuhauf flatbed trailer?

At trial, the husband presented his testimony, his father’s testimony, and title certificates indicating that these three items belonged to the husband’s father. Husband introduced into evidence a lease for the mobile home dated June 1,1986, signed by himself and his father, and a lease for the Grand Am dated September 8, 1986, also signed by himself and his father.

In contrast, the wife testified that she and the husband had treated these three items of property as their own and that she had never seen any of the title certificates or known about the lease agreements introduced into evidence by the husband. She introduced into evidence copies of canceled checks by which she and husband had made payments directly to the lienholders on the mobile home and the Grand Am. Her evidence showed that husband and wife had also paid for licenses, taxes, and insurance on these items. Husband’s father was not listed as an insured party on the insurance for the Grand Am. The wife also introduced into evidence records showing that husband and wife had taken income tax deductions for depreciation on the Freuhauf trailer and interest expenses on the Grand Am and the mobile home.

The court found that husband and wife are the “real owners” of this property and that “the vehicles and trailers were the property of the parties and were treated as such both in the practical sense and for income tax purposes.” Although the court did not explain its reasoning, we conclude that it was correct, under a theory of resulting trust.

“A resulting trust occurs where, as a result of certain acts, a court finds that there is an implied intent to create a trust and imposes a trust to achieve an equitable result. Usually resulting trusts involve cases where the parties have used ambiguous language which the court construes as showing a trust intent, or where the parties have expressed no intent to create a trust by words, but have performed acts from which the court infers that a trust was intended.” [Citation omitted.]

Eckart v. Hubbard (1979), 184 Mont. 320, 326-27, 602 P.2d 988, 991.

Here, the parties acted for all intents and purposes as though title to these pieces of property was held by the husband and wife. The actions of the husband’s father and of the husband and wife indicate that the husband’s father was holding the property in trust for husband and wife.

We hold that substantial evidence supports the findings of the court that the 1979 mobile home, the 1986 Pontiac Grand Am automobile, and the 1977 Freuhauf flatbed trailer were part of the marital estate.

II.

Did the court err in valuing the parties’ portable hoist, known as a “cherry picker?”

Attached to the court’s findings and conclusions is “Exhibit A,” in which the court listed the marital assets. One item on that fist is “1979 Farm Trailer (cherry picker)” valued at $7,000. It appears from the husband’s testimony that these were actually two separate items. There was evidence that the trailer had a depreciated value of $6,514 and the cherry picker was worth $350. Our standard of review is whether the District Court acted arbitrarily or clearly abused its discretion so as to create substantial injustice. In re Marriage of Hockaday (1989), 237 Mont. 413, 418, 773 P.2d 1217, 1221. Because the combined value of these two items is so close to $7,000, we uphold the court’s valuation.

III.

Did the court err by failing to recognize all of the parties’ marital debts?

The husband argues that the debts owed to Glen Hargrove and GMAC are not marital debts. He also maintains that a number of the parties’ debts were left out of the court’s findings.

Because we have held that the mobile home and the Grand Am were properly included as marital assets, it follows that the Glen Hargrove and GMAC debts against them were properly included as marital debts. The debts which the husband argues should have been included were bills in husband’s father’s name. The court was correct in not including those as liabilities of the marital estate. Also, there was a $10,000 promissory note to husband’s father, signed by husband alone and not wife. The wife testified that she had no knowledge of the $10,000 note. Obviously, the trial court did not believe the $10,000 note was legitimate. That was within its discretion as the assessor of credibility of witnesses. Marriage of Gerhart (Mont. 1990), [245 Mont. 279,] 800 P.2d 698, 700, 47 St.Rep. 2106, 2108.

We hold that the District Court did not err in determining the parties’ marital debts.

IV.

Did the court err in computing the net worth of the marital estate and in the distribution thereof?

This argument results from the arguments raised under the issues discussed above, as to which we have held for the wife on all counts. Under the court’s distribution of the marital estate, the husband received property with a net value of $30,134 and the wife received property valued at $9,900. The court ordered the husband to pay the wife the sum of $10,117 in order to equitably divide the marital estate. We hold that this was within the court’s discretion and does not constitute reversible error.

Affirmed.

JUSTICES HARRISON, HUNT, McDONOUGH and TRIEWEILER concur.


text:
    IN RE THE MARRIAGE OF GREGORY SCOTT MERRIMAN, Petitioner and Appellant, v. LORRI KAY MERRIMAN, Respondent and Respondent.
    No. 90-500.
    Submitted on briefs Jan. 31, 1991.
    Decided Mar. 19, 1991.
    247 Mont. 491.
    807 P.2d 1351.

      Brett C. Asselstine, Great Falls, for petitioner and appellant.
    Marcia Birkenbuel, Great Falls, for respondent and respondent.
   JUSTICE WEBER

delivered the Opinion of the Court.

Petitioner, Gregory Scott Merriman, initiated dissolution proceedings against respondent, Lorri Kay Merriman, in District Court for the Eighth Judicial District, Cascade County. The District Court awarded the parties joint custody of the two minor children of the marriage, with primary physical custody awarded to Mrs. Merriman. Mr. Merriman appeals the custody determination. We affirm.

The issue is did the District Court abuse its discretion in making the child custody determination.

The parties were married in 1983. In 1987 Mr. Merriman was injured on his job and began receiving Workers Compensation benefits. At about the same time Mrs. Merriman joined the Army Reserves. In 1989 Mrs. Merriman was ordered to Korea for a year for a tour of duty that would not allow her to take her family with her. Mrs. Merriman was served with the Summons and Petition for Dissolution four days before she was to report overseas. The District Court enjoined further proceedings until Mrs. Merriman returned from Korea.

Mr. Merriman cites the following factors as proof that the District Court abused its discretion in awarding primary physical custody to Mrs. Merriman. (1) Mr. Merriman asserts that he should have been awarded primary custody because he was a good primary caretaker while Mrs. Merriman was away on duty overseas. (2) The daughter, age 5, testified that she wanted to live with her father; and the son, age 7, testified that he thinks he wants to five with his mother. (3) Mrs. Merriman had been sexually abused by her father as a child and yet she allows her father to see the children. (4) The District Court did not appoint an attorney to represent the children pursuant to § 40-4-205, MCA, and did not order a custody investigation pursuant to § 40- 4-215, MCA.

The standard of review in a custody determination is that this Court will not disturb a district court’s findings unless they are clearly erroneous. The district court’s decision will be upheld unless a clear abuse of discretion is shown. Rule 52(a), M.R.Civ.P.; Marriage of Susen (1990), 242 Mont. 10, 788 P.2d 332, 334, 47 St.Rep. 528, 531. Mr. Merriman has not presented persuasive evidence of a clear abuse of discretion.

Section 40-4-212, MCA, lists the relevant factors that a district court must consider in making a child custody determination. The court is not required to make a specific finding on each of the factors but need only express the “essential and determining’’ facts upon which it rests its conclusions. Lorenz v. Lorenz (1990), 242 Mont. 62, 788 P.2d 328, 332, 47 St.Rep. 546, 550.

The District Court based its custody determination on the following:

Findings of Fact 15 and 16 state:

“15. The minor children have a close and loving relationship with both of their parents. Both parents have acted as primary caretakers for the children and both have the ability to care for the children. However, the children have had a much more difficult time adjusting to separation from their mother than the separation from their father. The Respondent has a secure employment status and is financially able to provide for her support and the support of the children. The Petitioner’s employment situation is unclear at best, and although his income from worker’s compensation is barely sufficient to provide for his own needs, he does not seem at all anxious to find employment.
“16. It is in the best interests of the children if the parents share joint legal custody, with the Respondent to be designated as the primary custodial parent, and the children to live with her during the school year. It is in the best interests of the children if the Petitioner be granted the right to have the physical custody of the children each summer from one week after school gets out until one week before school starts, and on alternating holidays.”

Conclusion of Law 2 states:

“2. That it is in the best interest of the minor children if their custody were awarded to the parties jointly, with the Respondent as primary custodial parent, and the children to reside with her, and the Petitioner to have physical custody of the children at the times designated in Finding number 16 above. The Court makes this conclusion after consideration of all of the factors set out in Sections 40-4-212, 222, and 223, MCA.”

I.

Mr. Merriman asserts that he should have been awarded primary custody because he was a good primary caretaker while Mrs. Merriman was away on duty overseas. The evidence presented showed that both parents had loving relationships with the children and would be good caretakers. When conflicting evidence has been presented, this Court will not overturn the District Court’s findings unless they are clearly erroneous. Rule 52(a), M.R.Civ.P.; Susen, 788 P.2d at 334. The District Court did not err in failing to give Mr. Merriman primary physical custody because he was a good primary care provider while Mrs. Merriman was away on duty overseas.

II.

Mr. Merriman claims that the failure of the Court to make a specific finding as to the wishes of the children and why those wishes were not followed necessitates a reversal of the custody order. We disagree.

The Merriman children were interviewed by the trial judge and their wishes were ascertained. The trial judge is singularly equipped to assess the ability of a young child to formulate and articulate his/her custody wishes and weigh that preference in light of the other evidence and factors enumerated in § 40-4-212, MCA. Marriage of Murphy (1983), 205 Mont. 162, 165, 666 P.2d 755, 757. As an appellate court we cannot reassess the weight of a particular witness’s testimony. The District Court does not commit error by assigning “little” weight to the wishes of a young child. Murphy, 205 at 165, 666 P.2d at 757.

The children in this case were 5 and 7 years of age. A review of their testimony in light of other testimony supports the District Court’s conclusion that the children’s expressed wishes were not determinative of their best interests. A review of the findings of fact and conclusions of law as a whole reveals that the District Court considered the desires of the children along with all of the other factors of § 40-4- 212, MCA. See Marriage of Kuzara (1986), 224 Mont. 124, 128-29, 728 P.2d 786, 788-89. The District Court did not err in failing to follow the wishes of the children in its custody determination.

III.

Mr. Merriman asserts that the fact that Mrs. Merriman was sexually abused by her father until she was 19 years of age indicates sexual promiscuity and immoral life style that should have been considered by the District Court. The fact that Mrs. Merriman was a child victim of sexual abuse has no relevance under § 40-4-212, MCA, unless there has been evidence presented that the abuse affected her mental or physical health to such an extent that her ability to act as a primary caretaker is diminished. No such evidence was presented. Mr. Merriman also cites evidence that Mrs. Merriman allows her father to see the children. There was also evidence presented that Mrs. Merriman had reported the abuse by her father, her father has been prosecuted, and that she does not allow visitation by her father ■unless she is present. The District Court did not err in failing to give Mr. Merriman primary physical custody because Mrs. Merriman was a child victim of sexual abuse.

IV.

Mr. Merriman claims reversible error because the District Court failed to appoint an attorney for the children pursuant to § 40-4-205, MCA, and order a custodial investigation pursuant to § 40-4-215, MCA.

Section 40-4-205, MCA, provides that the Court may appoint an attorney to represent the interests of minor children. Likewise, a custody investigation pursuant to § 40-4-215, MCA, is not mandatory. Mr. Merriman did not request the District Court to appoint an attorney for the children and did not request an investigation. This Court will not consider for the first time on appeal an issue which was not raised in the District Court. Easton v. Easton (1978), 175 Mont. 416, 422, 574 P.2d 989, 993.

Affirmed.

CHIEF JUSTICE TURNAGE and JUSTICES HARRISON, McDONOUGH and TRIEWEILER concur.