author: JUSTICE TRIEWEILER JUSTICE GRAY,

text:
    KEITH RIDLEY, Plaintiff and Appellant, v. GUARANTY NATIONAL INSURANCE COMPANY, Defendant and Respondent.
    No. 96-697.
    Heard October 1, 1997.
    Submitted October 28, 1997.
    As Modified on Denial of Rehearing January 30, 1998.
    Decided December 24, 1997.
    54 St.Rep. 1430.
    286 Mont. 325.
    951 P.2d 987.

      For Appellant: John M. Morrison (argued), Meloy & Morrison, Helena.
    For Respondent: Guy W. Rogers (argued) and Tiffany B. Lonnevik; Brown, Gerbase, Cebull, Fulton, Harman & Ross; Billings.
    For Amici Curiae: Ira Eakin and Michael G. Eiselein; Lynaugh, Fitzgerald & Eiselein; Billings (for Montana Trial Lawyers Association); Mark Staples, Staples Law Office, Helena (for Montana Chiropractic Association).
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

The plaintiff, Keith Ridley, filed a complaint for declaratory judgment against the defendant, Guaranty National Insurance Company, in the District Court for the First Judicial District in Lewis and Clark County. Ridley sought a District Court judgment that § 33-18-201, MCA, of the Montana Unfair Trade Practices Act requires a tort-feasor’s insurer to pay the actual medical expenses of a tort victim as they are incurred when liability is reasonably clear. The District Court concluded that an insured does not have an obligation in all cases to pay an injured third party’s medical expenses in advance of full and final settlement, even though liability is reasonably clear, and granted summary judgment to Guaranty National. Ridley appeals that decision. We reverse the order and judgment of the District Court.

The following issues are presented on appeal:

1. Did the District Court err when it concluded that the issue raised by Ridley’s complaint was not appropriate for declaratory judgment pursuant to §§ 27-8-201 and -202, MCA, of the Uniform Declaratory Judgments Act?
2. Pursuant to § 33-18-201, MCA, of the Montana Unfair Trade Practices Act, does an insurer have an obligation to pay medical expenses as incurred by an injured third-party tort victim when the liability of its insured is reasonably clear?

FACTUAL BACKGROUND

The factual record in this case is minimal. It consists of those allegations in Keith Ridley’s complaint which are admitted by Guaranty National and Ridley’s affidavit. There are also a number of documents attached to Ridley’s complaint, and additional documents attached to briefs filed by Guaranty National in the District Court. There is little foundation for these documents and it is unclear the extent to which they have been or should be considered. However, based on the parties’ allegations and the arguments made in both the District Court and this Court, it appears that the following facts are undisputed.

Ridley was injured on November 2, 1995, when the automobile in which he was a passenger collided with a vehicle operated by Kenneth Roope who was then insured against liability by Guaranty National. The driver of Ridley’s vehicle was attempting to make a left-hand turn. Roope was attempting a pass to the left side of that vehicle.

In correspondence to Ridley’s attorney, Guaranty National’s claims adjuster acknowledged that the company’s insured was 90 percent at fault for the collision. Ridley’s attorney later advised the same adjuster that his client could not afford the medical treatment that had been prescribed for the injuries caused by the collision, including an MRI exam and physical therapy, and asked that those expenses be paid by Guaranty National. He explained that because Guaranty National had admitted that it was more than 50 percent at fault for the collision, it was liable to the claimant for all of his damages pursuant to principles of joint and several liability, and advised Guaranty National that after Ridley’s condition had stabilized they would discuss full and final settlement of his claims with Guaranty National.

Guaranty National’s adjuster advised Ridley’s counsel that no medical expenses would be paid in advance of final settlement of Ridley’s claim.

Ridley filed a complaint for declaratory judgment in the District Court for the First Judicial District in Lewis and Clark County, named Guaranty National as the defendant, and asked the District Court to conclude, pursuant to § 33-18-201, MCA (Montana Unfair Trade Practices Act), that Guaranty National did have an obligation to pay medical expenses where liability is reasonably clear regardless of whether a final settlement had been agreed upon.

In its answer, Guaranty National admitted that a collision occurred on November 2,1995, involving an automobile in which Ridley was a passenger and an automobile operated by its insured. It also admitted that its insured had the majority of fault for the accident and that it declined to pay for Ridley’s ongoing medical expenses. However, it explained that its refusal was partially based on uncertainty about the causal relationship between the accident and the extent of Ridley’s injuries. As an affirmative defense, Guaranty National alleged that there was no obligation pursuant to Montana law for an insurer to pay medical expenses of an injured third party before full and final settlement of that person’s claim.

Both parties moved for summary judgment. Ridley’s motion was denied and Guaranty National’s motion was granted.

The District Court based its order on the following legal conclusions:

1. Section 33-18-201, MCA, of the Unfair Claims Practices Act, requires that plaintiff prove that the insurer’s conduct complained of occur “with such frequency as to indicate a general business practice” and, therefore, even if Ridley’s interpretation of the statute is correct, Guaranty National is not required in every case to make advance payment of medical expenses.
2. In this case, Guaranty National denies a causal relationship between its conduct and the full extent of Ridley’s injuries; therefore, declaratory judgment will not resolve all issues before the parties and is not appropriate pursuant to the Uniform Declaratory Judgment Act.
3. The Unfair Claims Practices Act does not require an insurer to pay an injured party’s medical expenses prior to final settlement in all cases, even where liability is reasonably clear.

In response to Ridley’s appeal, Guaranty National concedes that the District Court erred when it concluded that he must prove a general business practice in order to state a claim pursuant to the Unfair Claims Practices Act. Guaranty National concedes that pursuant to § 33-18-242(2), MCA, a third-party claimant has an independent cause of action against an insurer for a violation of § 33-18-201(6) and (13), MCA, without regard to whether the insurer’s alleged violations occurred with “such frequency as to indicate a general business practice.” Therefore, we will confine our review to the last two bases for the District Court’s order which granted summary judgment.

ISSUE 1

Did the District Court err when it concluded that the issue raised by Ridley’s complaint was not appropriate for declaratory judgment pursuant to §§ 27-8-201 and -202, MCA, of the Uniform Declaratory Judgments Act?

“When a district court determines that declaratory relief is not necessary or proper, we will not disturb the court’s ruling absent an abuse of discretion.” Remington v. Department of Corr. & Human Servs. (1992), 255 Mont. 480, 483, 844 P.2d 50, 51, overruled on other grounds by Orozco v. Day (1997), 281 Mont. 341, 934 P.2d 1009. However, we review the district court’s conclusions on which its decision is based, as we do all legal issues, to determine whether they have been correctly decided. See Carbon County v. Union Reserve Coal Co., Inc. (1995), 271 Mont. 459, 469, 898 P.2d 680, 686.

The District Court concluded that declaratory judgment could not be granted without a justiciable controversy and, based on our decision in Brisendine v. Department of Commerce (1992), 253 Mont. 361, 833 P.2d 1019, concluded that that requires “ ‘a controversy the judicial determination of which will have the effect of a final judgment in law or decree in equity upon the rights, status, or legal relationships of one or more of the real parties in interest.’ ” Brisendine, 253 Mont. at 364, 833 P.2d at 1021. The District Court concluded that that type of relief could not be granted in this case because there were factual issues regarding the insurer’s liability in addition to the legal issue raised by Ridley. Specifically, the District Court concluded that there was an issue regarding the extent to which Guaranty National’s insured caused the injuries for which Ridley sought medical treatment.

On appeal, Ridley contends (1) that there was no issue regarding causation based on his uncontroverted affidavit that the injuries for which he was being treated were caused by the collision in which he was involved on November 2, 1995; and (2) that even if there were factual issues regarding causation, he is still entitled, pursuant to §§ 27-8-201 and -202, MCA, of the Uniform Declaratory Judgment Act, to have legal issues resolved when his rights, status, or legal relations are affected by statute.

Guaranty National responds that the District Court did not abuse its discretion when it refused to grant declaratory relief because a justiciable controversy is a prerequisite to such relief, and a justiciable controversy requires that the judicial determination being sought finally resolve the rights, status, or legal relations of the parties. It contends that that cannot be accomplished in this case because regardless of the court’s interpretation of the Unfair Claims Practices Act, there remains an issue regarding the extent of Guaranty National’s liability for Ridley’s medical benefits. Guaranty National contends that the District Court correctly decided, based on our decision in Brisendine, to deny Ridley the relief he sought.

Section 27-8-201, MCA, of the Uniform Declaratory Judgment Act, provides, in relevant part, as follows: “Courts of record within their respective jurisdictions shall have power to declare rights, status, and other legal relations whether or not further relief is or could be claimed.”

Section 27-8-202, MCA, of the same Act, provides:

Any person ... whose rights, status, or other legal relations are affected by a statute ... may have determined any question of construction or validity arising under ... statute ... and obtain a declaration of rights, status, or other legal relations thereunder.

This Court’s role in the construction of a statute is simply to declare what is stated by the plain terms of the statute and not to insert what has been omitted. Section 1-2-101, MCA. The plain language of § 27-8-202, MCA, provides that persons whose rights, status, or other legal relations are affected by statute may ask the courts of this state to construe that statute for the purpose of declaring those rights. Section 27-8-201, MCA, makes clear that that right to have statutes construed is not dependent on whether further relief “is or could be claimed.” In other words, it is not a basis for denying declaratory relief that all of the “rights, status, or other legal relations” of the parties cannot be decided in the same proceeding.

The facts in Brisendine are distinguishable from those in this case and we conclude that the District Court erred when it relied on that decision to deny declaratory relief.

In Brisendine, the plaintiff was a denturist whose proposal to associate professionally with a dentist had been rejected by the Board of Dentistry based on its interpretation of § 37-4-103, MCA. Before the Board issued its final decision, Brisendine filed a complaint in district court for a declaratory judgment to the effect that § 37-29-103, MCA, did not prohibit him from entering into a business association with a dentist. The district court dismissed his complaint pursuant to Rule 12(b)(6), M.R.Civ.R, on the ground that it did not present a justiciable controversy. On appeal, we held that Brisendine’s complaint lacked sufficient specificity regarding his proposed business association to enable the Court to render a judgment which was anything other than advisory, and that the more appropriate procedure would be to exhaust his administrative remedies before the Board and then appeal the Board’s decision, if adverse, to the district court. However, we did not hold that before a party is entitled to declaratory relief, he or she must establish that the relief sought will resolve all issues between the parties.

In this case, Guaranty National has denied Ridley’s claim on several bases — one being that it has no legal obligation to pay Ridley’s medical expenses prior to a final settlement of all of his claims. While there may also be a factual dispute regarding causation and the extent of Guaranty National’s ultimate liability, it does Ridley no good to further document the relationship between the collision with Guaranty National’s insured and his injuries so long as Guaranty National operates under the assumption that it has no obligation to pay for even those medical expenses clearly caused by its insured, absent Ridley’s willingness to settle all other claims for damages related to the collision.

Furthermore, Guaranty National has some basis at the present time for asserting that it has no obligation to pay for Ridley’s medical expenses. In two separate federal district court decisions, there has been a determination that insurers are not obligated pursuant to § 33-18-201, MCA, to pay medical expenses incurred by third-party tort victims prior to a final settlement of that person’s claims. See Young v. Simenson (D. Mont. June 6, 1987), CV-87-062-GF; Jensen v. State Farm Mut. Auto. Ins. Co. (D. Mont. 1990), 8 Mont. Fed. Rep. 262. Because of these decisions, Ridley correctly points out that even if he incurred medical expenses due to the negligence of Guaranty National’s insured, and even if its insured’s liability for those damages is reasonably clear and Guaranty National still refuses to pay for those expenses, he cannot enforce his rights to compensation pursuant to § 33-18-242, MCA, because of the following provision in subparagraph (5) of that statute: “An insurer may not be held liable under this section if the insurer had a reasonable basis in law or in fact for contesting the claim or the amount of the claim, whichever is in issue.” Section 33-18-242(5), MCA. In other words, based on the federal decisions, even if they are incorrect, Ridley’s rights under the Act are unenforceable.

For these reasons, we conclude that the District Court erred as a matter of law when it held that the relief sought by Ridley did not present a justiciable controversy, and that the District Court abused its discretion when it declined to render a declaratory judgment in this matter pursuant to §§ 27-8-201 and -202, MCA, in order to resolve the respective rights and obligations of the parties, as established by Montana’s Unfair Claims Practices Act.

ISSUE 2

Pursuant to § 33-18-201, MCA, of the Montana Unfair Trade Practices Act, does an insurer have an obligation to pay medical expenses as incurred by an injured third-party tort victim when the liability of its insured is reasonably clear?

Section 33-18-201, MCA, provides in part that:

No person may, with such frequency as to indicate a general business practice, do any of the following:
(6) neglect to attempt in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear;
(13) fail to promptly settle claims, if liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage ....

Ridley contends that Guaranty National is liable for medical expenses caused by its insured when liability is reasonably clear, without regard to whether a final settlement has or can be agreed upon, because subsection (6), by its plain language, makes no reference to final settlement of all claims, but refers instead to “settlements.” He contends that Guaranty National has the same obligation pursuant to subsection (13) because Guaranty National’s obligation to pay medical expenses is a “portion” of its duty pursuant to the liability coverage it provided to its insured which cannot be withheld as leverage to influence settlement of its obligation for other portions of coverage such as lost wages, lost earning capacity, or pain and suffering. He contends that when this Court held otherwise in Juedeman v. National Farmers Union Property and Casualty Co. (1992), 253 Mont. 278, 833 P.2d 191, it misapplied subsection (13).

Guaranty National responds that it has no obligation to pay medical expenses incurred by a third-party claimant prior to final settlement of that person’s claim, even if liability is reasonably clear, because the Montana Legislature did not intend piecemeal compensation for each aspect of a claimant’s injury; the Federal District Court, on two separate occasions, has held that the Unfair Claims Practices Act does not impose such an obligation; and § 33-18-201(13), MCA, was specifically found inapplicable to these circumstances in Juedeman. See Juedeman, 253 Mont. at 281, 833 P.2d at 193. Finally, Guaranty National notes that an amendment was offered to the Unfair Claims Practices Act through House Bill No. 433 in the 1995 session of the Montana Legislature, which would have imposed an obligation to pay medical expenses prior to final settlement where liability is reasonably clear, but that that amendment was not adopted. Therefore, the Legislature obviously did not intend to impose such an obligation.

The District Court, even though it concluded that a declaratory judgment should not be granted, concluded that the statute does not, as a matter of law, require that an insurer, in all cases, pay an injured third party’s medical expenses in advance of settlement, even when liability is reasonably clear. Other than its previously discussed rationale that declaratory relief was not appropriate, and other factual issues regarding causation remain to be decided, the District Court gave no further explanation for its conclusion.

We hold that the District Court erred when it concluded that the statute in question does not require an insurer to pay an injured third party’s medical expenses until final settlement, even when liability is reasonably clear. We conclude that both subsections (6) and (13) of § 33-18-201, MCA, by their terms, impose such an obligation. This does not mean that an insurer is responsible for all medical expenses submitted by an injured plaintiff. Liability must be reasonably clear for the expense that is submitted. That is, even though liability for the accident may be reasonably clear, an insurer may still dispute a medical expense if it is not reasonably clear that the expense is causally related to the accident in question.

Although the U.S. District Court for the State of Montana, in two separate cases, has held otherwise, those decisions offer no rationale for the legal conclusion arrived at and, as we have previously held, we are not constrained by the federal judiciary’s decisions when they interpret Montana law. See Boreen v. Christiansen (1994), 267 Mont. 405, 416, 884 P.2d 761, 767.

As pointed out in Black’s Law Dictionary, the word “settle” has different legal connotations in different situations: “[T]he term may be employed as meaning to agree, to approve, to arrange, to ascertain, to liquidate, to come to or reach an agreement,” and other things. Black’s Law Dictionary 1372 (6th ed. 1990). It is defined in Webster’s Ninth New Collegiate Dictionary 1078 (1984), where relevant, as “to adjust differences or accounts.” No definition offered by either party requires that a “settlement” resolve all disputes or all claims between two parties.

We conclude that the language of § 33-18-201(6), MCA, imposes no such requirement. In fact, the reference to “settlements,” rather than a “final settlement,” would suggest that the Montana Legislature anticipated that an insurer may have more than one obligation arise from the same incident.

Neither are we persuaded by Guaranty National’s argument that because the 1995 Legislature declined to amend the Unfair Claims Practices Act by adding a specific requirement to pay medical expenses prior to final settlement of claims it can be inferred that no such requirement is intended by the Act.

First, the proposed amendment was tabled at the request of its sponsors after it was amended to the point where its supporters concluded that it was less protective than the existing law. Hearing on H.B. 443 before the Montana Senate 1995 Legislature Judiciary Comm, at 4, 54th Legislature Regular Session (1995) (minutes of motion and vote to table H.B. 443). Second, at least one representative of the insurance industry testified that the amendment was not necessary because the obligation to compensate a third party when liability is reasonably clear already exists. Hearing on H.B. 443 before the Montana Senate 1995 Legislature Judiciary Comm, at 3, 54th Legislature Regular Session (1995) (describing testimony of Greg VanHorsen, representative of State Farm Insurance Companies). Finally, even if some occurrence during the 1995 Legislature arguably supported Guaranty National’s position, the views of a subsequent legislative body form a hazardous basis for inferring the intent of an earlier one. See Waterman S.S. Corp. v. United States (1965), 381 U.S. 252, 268, 85 S. Ct. 1389, 1398, 14 L. Ed. 2d 370, 380.

Furthermore, our interpretation of subsection (6) is more consistent with the purpose of § 33-18-201, MCA, which is to assure prompt payment of damages for which an insurer is clearly obligated. It is also more consistent with this state’s public policy, as established by the “mandatory liability protection” provisions of Montana law found at §§ 61-6-301 to -304, MCA. We have held that “[i]t is clear that the mandatory liability insurance law seeks to protect members of the general public who are innocent victims of automobile accidents.” Iowa Mut. Ins. Co. v. Davis (1988), 231 Mont. 166, 170, 752 P.2d 166, 169.

One of the most significant obligations that innocent victims of automobile accidents incur and for which mandatory liability insurance laws were enacted, is the obligation to pay the costs of medical treatment. If the insurer has no obligation to pay those expenses in a timely fashion, even though liability is reasonably clear, then the protection provided by Montana’s mandatory liability laws would be of little value.

Medical expenses from even minor injuries can be devastating to a family of average income. The inability to pay them can damage credit and, as alleged in this case, sometimes preclude adequate treatment and recovery from the very injuries caused. Just as importantly, the financial stress of being unable to pay medical expenses can lead to the ill-advised settlement of other legitimate claims in order to secure a benefit to which an innocent victim of an automobile accident is clearly entitled. We conclude that this is not what was intended by the Montana Legislature when mandatory liability insurance laws and unfair claims practice laws were enacted.

We also conclude that the leveraging of undisputed claims in order to settle disputed claims is exactly what the Montana Legislature sought to prohibit when it enacted § 33-18-201(13), MCA, of the Unfair Claims Practices Act. We conclude that our holding in Juedeman does not control the outcome in the case and that language from Juedeman which appears to be inconsistent with this holding was dicta and unnecessary to our conclusion in that case.

In Juedeman, the plaintiff, whose son was seriously injured in a one-vehicle accident, demanded payment of the insured’s policy limits for his injuries. The insurer conditioned payment on her release of any future loss of consortium claim. She sued the insurer for bad faith pursuant to § 33-18-201(13), MCA, on the grounds that the insurer’s condition constituted ‘leveraging” in violation of that section. We held that she had not established a claim as a matter of law because the insurer agreed to pay the policy limits in exchange for a release of all claims related to her son’s bodily injury. We based our conclusion on the district court’s holding that the plaintiff’s loss of consortium claim arose from her son’s injury and, therefore, was subject to the same per person policy limits for bodily injury. We held that since she did not contest that district court ruling, the insurer could not have violated subsection (13) because it had a right to condition payment of the policy limits on a release of all claims for which the limits were being paid. See Juedeman, 253 Mont. at 281, 833 P.2d at 193. Those facts do not apply to this case.

However, the Juedeman opinion gratuitously included the following additional language, which was unnecessary to its primary conclusion:

Leveraging under § 33-18-201(13), MCA, requires an insurer’s manipulation of two coverages. The insurer must withhold prompt settlement of a reasonably clear liability claim under one coverage, in order to influence a claim arising out of another coverage. Here, Erich’s bodily injury claim and Juedeman’s claim for loss of consortium fall within the same policy coverage. Here, Farmers Union offered to settle both claims falling under that coverage for the maximum amount allowed under the policy. Thus, we hold the court properly found that Farmers Union did not violate § 33-18-201(13), MCA, and properly granted defendant’s motion for summary judgment.

Juedeman, 253 Mont. at 281, 833 P.2d at 193 (emphasis added).

Although our discussion of “coverages,” in the context of the facts in Juedeman, is understandable because of the nature of the policy involved in that case (it provided $100,000 bodily injury per person and $300,000 per occurrence), it has incorrectly left the impression that subsection (13) is inapplicable where payment of one obligation due pursuant to a portion of coverage is withheld in order to leverage settlement of a disputed claim made pursuant to the same coverage. That result is clearly not warranted by the plain language of the statute. As pointed out by the dissenting opinion in Juedeman:

The majority then goes on to reason that because Erich’s claim and Cindy’s claim arose under the same coverage that leveraging did not occur under subsection (13). However, subsection (13) prohibits leveraging of a claim “under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage.”

Juedeman, 253 Mont. at 285, 833 P.2d at 195 (Trieweiler, J., and Hunt, J., dissenting).

The dissent to Juedeman pointed out that the gratuitous language predicating subsection (13) on more than one “coverage” was inconsistent with our prior decision in Harris v. American General Life Insurance Co. (1983), 202 Mont. 393, 658 P.2d 1089.

In that case, the defendant insurer had issued a $10,000 life insurance policy to the plaintiff’s son. An additional $10,000 of coverage was available if the son died by accident. Plaintiff’s son died under circumstances that suggested the possibility of suicide.
The defendant sent plaintiff a check for the amount due under the basic policy, but conditioned payment on a release of claims due under the accidental death portion of the policy. Plaintiff filed suit for payment under both portions and for punitive damages. After suit was filed ... defendant mailed the check back to the plaintiff without the restrictive endorsement. However, after a jury trial a verdict was returned denying recovery under the accidental benefits portion of the policy, but awarding $30,000 in punitive damages to the plaintiff. This Court sustained the punitive damage award under the same § 33-18-201(13), MCA, with which we are concerned in this case. We did so based on the defendant’s refusal to pay under an undisputed portion of the policy without a release from liability under the disputed portion. ... The controlling facts were that one claim, which was undisputed, was withheld to leverage resolution of another claim that was disputed.

Juedeman, 253 Mont. at 286, 833 P.2d at 196 (Trieweiler, J., and Hunt, J., dissenting).

We conclude that § 33-18-201(13), MCA, applies to an insurer’s failure to pay one type of damages for which liability has become reasonably clear in order to influence settlement of claims for other types of damages made pursuant to the same policy, and to the extent that there is language in Juedeman which suggests that the claims must be made pursuant to separate types of coverage, that language is overruled.

For these reasons, we reverse the order and judgment of the District Court and remand this case to the District Court for entry of a declaratory judgment consistent with this opinion.

CHIEF JUSTICE TURNAGE, JUSTICES NELSON, REGNIER, HUNT and LEAPHART concur.

JUSTICE GRAY,

concurring in part and dissenting in part.

I concur in the Court’s opinion on issue one. I also concur in the result the Court reaches under issue two and its analysis and holding on § 33-18-201(13), MCA. Because this case can be resolved on the basis of § 33-18-201(13), MCA, I would not address § 33-18-201(6), MCA. The Court having done so, however, I must respectfully dissent from the Court’s interpretation of § 33-18-201(6), MCA, and its result thereunder.

With regard to § 33-18-201(13), MCA, the Court presents a comprehensive analysis of the statute, the inapplicability of Juedeman to this case, and the inherent irrelevance of both House Bill No. 433 — which was not enacted — and its legislative history. The Court then concludes that § 33-18-201(13), MCA, applies to an insurer’s failure to pay one type of damages for which liability has become reasonably clear in order to influence settlement of a claim for another type of damages made pursuant to the same policy. This conclusion is little more than a “plain meaning” approach to the wording of § 33-18-201(13), MCA, which clearly provides for — and establishes requirements pertaining to the settlement of — claims under different portions of the insurance policy coverage. Given the nature of this action and the record before us, the Court quite properly does not hold — or even suggest — that Guaranty National’s liability for the medical expenses submitted to date by Ridley is reasonably clear at this point or that Guaranty National has failed to promptly settle such a claim for medical expenses on which its liability is reasonably clear in order to influence settlements under other portions of the insurance policy coverage. I concur in the Court’s opinion with regard to § 33-18-201(13), MCA.

With regard to the Court’s interpretation of § 33-18-201(6), MCA, however, I cannot agree. As discussed above, § 33-18-201(13), MCA, provides a sufficient basis on which to resolve this case; I would do so and stop there. Since the Court addresses subsection (6), MCA, and in my view does so erroneously, it is appropriate that I state the basis of my dissent from that portion of the Court’s opinion.

The Court advances a relatively abbreviated interpretation of the language contained in § 33-18-201(6), MCA, essentially concluding that the use of the plural “settlements,” rather than the singular “settlement,” means that the Legislature anticipated that an insurer may have more than one obligation arise from the same incident. I submit that the Legislature’s “anticipation” vis-a-vis more than one obligation was addressed by the Legislature in subsection (13) of § 33-18-201, MCA, as discussed above, but that the mere use of the plural “settlements” in subsection (6) does not relate to that “anticipation.” Indeed, the plural usages throughout § 33-18-201, MCA, follow clearly — and, in my view, only — from the introductory portion of that statute, which is the “with such frequency’ language not at issue here. That is, § 33-18-201, MCA, begins by providing that “[n]o person may, with such frequency as to indicate a general business practice, do any of the following. ...” It is this “frequency” language which results in the remainder of the statute being written in the plural form, as to “coverages,” “claims,” “settlements” and the like. The plural language does not, in my view, support the Court’s implicit interpretation that subsection (6) is essentially identical to subsection (13). Indeed, if that were so, there would be no need for two different subsections in the same statute, containing substantially dissimilar language.

It is my view that subsection (6) requires an insurer to attempt in good faith to effectuate a prompt, fair, equitable and final settlement of an overall claim for which liability has become reasonably clear. Subsection (13), on the other hand, does not address a good faith attempt to fully and finally settle an entire claim. Instead, it requires an insurer to promptly settle a claim under one portion of the policy coverage, if liability is reasonably clear, rather than use that unsettled claim as leverage in settling claims under other portions of the coverage. Moreover, in my opinion, the Court’s “purpose” and “policy discussions within the context of its analysis of § 33-18-201(6), MCA, are more consistent with giving subsection (6) a meaning different from subsection (13).

At the bottom line, however, and notwithstanding my disagreement with the Court’s interpretation of § 33-18-201(6), MCA, I agree that this is an appropriate case for declaratory judgment. I also agree that such a judgment should be entered in Ridley’s favor on the basis of § 33-18-201(13), MCA. On those matters, I join the Court in reversing the District Court.


source: Caselaw Access Project

author: JUSTICE LEAPHART JUSTICE GRAY,

license: Public Domain

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. RALPH PATRICK WIDENHOFER, JR., Defendant and Appellant.
    No. 96-700.
    Submitted on Briefs October 30, 1997.
    Decided December 23, 1997.
    54 St.Rep. 1438.
    286 Mont. 341.
    950 P.2d 1383.

      For Appellant: Steven M. Hudspeth, Attorney at Law, Great Falls.
    For Respondent: Hon. Joseph P. Mazurek, Attorney General; Elizabeth L. Griffing, Assistant Attorney General, Helena; Mike Menehan, Deputy Lewis and Clark County Attorney, Helena.
   JUSTICE LEAPHART

delivered the Opinion of the Court.

Ralph Patrick Widenhofer, Jr. (Widenhofer) appeals from the decision of the First Judicial District Court, Lewis and Clark County, denying his motion to suppress evidence of his blood alcohol concentration (BAC) and allowing hearsay evidence indicating who was the driver of a vehicle involved in a one-vehicle rollover accident. Affirmed in part and reversed and remanded in part.

Background

On the evening of October 28,1995, Widenhofer and a friend, Scott Rothschiller (Rothschiller), ate dinner at Marysville House in Marysville near Helena, Montana. Widenhofer and Rothschiller were lodging at the Grady Ranch while hunting in the Helena area. The record does not reveal whether the individuals consumed drinks with dinner, but after dinner, the bartender, Tami Prout (Prout) served each of them a shot and a beer. They left the bar at closing time, around 11:30 p.m., and proceeded down the narrow, winding, dirt road that leads back to the Lincoln Highway. Upon reaching a rough portion of the road, the vehicle rolled into the ditch. Widenhofer and Rothschiller received injuries as a result of the accident. Shortly thereafter, a car came upon the accident, picked up Widenhofer and Rothschiller and took them to the Silver City Bar, which is the nearest business in the vicinity.

Meanwhile, when Prout finished closing the Marysville House bar around midnight she drove down the Marysville road and noticed a vehicle in the ditch. Prout testified that she quickly investigated the accident from her car and determined that no one was in or near the vehicle, so she proceeded to the Silver City Bar where she planned to meet some friends. When Prout arrived at the Silver City Bar parking lot, she noticed several individuals standing outside, including Widenhofer and Rothschiller whom she recognized from Marysville House. Widenhofer was bleeding from his head near his left eye so they went inside the bar and the off-duty bartender took Widenhofer to the women’s restroom to clean the blood off his face and tend to his injuries. Prout then convinced Widenhofer that she should call 911 to assist with Widenhofer’s vehicle.

Highway Patrol Officer Scott Zarske (Officer Zarske) received a dispatch call around midnight on October 29, 1995, indicating that an accident had occurred on the road to Marysville and that the occupants of the vehicle were at the Silver City Bar. Officer Zarske proceeded to the Silver City Bar to interview the individuals involved in the accident.

Rothschiller was the first to exit the bar and approach Officer Zarske’s patrol car. He sat in the front seat of the patrol car and answered some questions about the accident. Officer Zarske testified that Rothschiller indicated that Widenhofer was driving the vehicle when it went off the road and that Rothschiller was a passenger. When Officer Zarske saw Widenhofer approaching the patrol car with Prout assisting him, he asked Rothschiller to move to the backseat and allow Widenhofer to sit in the front passenger seat. Officer Zarske said he requested that Rothschiller move to the backseat so that he could more easily interview Widenhofer about the cause of the accident in light of his understanding that Widenhofer was the driver.

Officer Zarske also asked Prout a few questions. Prout indicated that she believed Widenhofer’s condition had deteriorated since she had arrived at the Silver City Bar and that she thought it was due to loss of blood. Prout emphasized that she thought Widenhofer was in need of medical care.

Widenhofer sat in the front passenger seat of the patrol car. Officer Zarske testified that he smelled a strong odor of alcohol. The officer asked Widenhofer some questions about the accident and suggested that an ambulance take Widenhofer and Rothschiller to the hospital to be treated for their injuries. They refused, but expressed a desire to contact the Grady Ranch instead. Officer Zarske then offered to transport them to the hospital in his patrol car. They agreed. However, before they left the Silver City Bar parking lot, Officer Zarske performed a horizontal gaze nystagmus (HGN) test on Widenhofer. Widenhofer scored six out of six on the test which, in the absence of other factors such as a head trauma injury, indicates that an individual is under the influence of alcohol.

They then proceeded to St. Peter’s Hospital in Helena. Widenhofer was admitted to the emergency room and received treatment for his injuries. During the time that Widenhofer was being treated, Officer Zarske contacted the Grady Ranch and arranged for Ed Grady to pick up Widenhofer and Rothschiller at the hospital. When medical personnel finished treating Widenhofer, Officer Zarske went to Widenhofer’s room to continue his investigation of the accident. He asked several questions, including information about Widenhofer’s driver’s license and insurance. Officer Zarske also expressed his opinion that the accident was alcohol-related and he requested that Widenhofer submit to a blood test. Officer Zarske read the Implied Consent Form to Widenhofer:

You are under arrest for driving (or being in actual physical control of) a motor vehicle while under the influence of alcohol (and/or drugs). Under Montana law, if you are arrested for driving under the influence, you are considered to have given your implied consent to a test for alcohol and possibly a test for drugs. As arresting officer, I have the right to select the type of test you will be asked to take.... If you refuse this testing, your driver’s license will be seized and suspended for six months. ...

After Officer Zarske read the form, Widenhofer asked some questions concerning the possibility of losing his license. Officer Zarske then read the form again: ‘You are under arrest ....” Widenhofer then consented to a blood test rather than lose his driving privileges. Officer Zarske directed hospital staff to take the sample while he observed the process.

Widenhofer claims that during the reading of the implied consent form, Officer Zarske never stood closer than two feet to the bed. Officer Zarske did not touch Widenhofer or physically restrain him in any way. Officer Zarske did not write a Notice to Appear while at the hospital. Instead, Officer Zarske informed Widenhofer that he would send the blood sample to the crime lab and he would contact Widenhofer by mail if the results indicated that he was under the influence. Officer Zarske left the hospital shortly after Ed Grady arrived but before Widenhofer was released from the emergency room.

Officer Zarske sent the blood sample to the Missoula Crime Lab. The results of the blood test indicated that Widenhofer had a .27 BAC. Accordingly, Officer Zarske wrote a Notice to Appear and Complaint for driving under the influence (DUI) and mailed it to Widenhofer at his home address in Great Falls, Montana. Widenhofer received the notice to appear several days after the accident.

Prior to trial, Widenhofer filed a combined motion to suppress the results of the blood test and motion in limine asserting that he was not under arrest during the blood testing, therefore, the results and related testimony were not admissible. The District Court denied the motion based on its finding that Widenhofer was under arrest at the hospital. Before and at trial, Widenhofer attempted to defend against the DUI charge by declaring that he was not driving the evening of October 28th. The State of Montana (State) subpoenaed Rothschiller in Great Falls on the night of July 28, 1996. A jury trial was held in Helena on July 29, 1996; Rothschiller failed to appear. As a result, the State tried its case without testimony from Rothschiller. The jury found Widenhofer guilty of driving under the influence of alcohol on the night of the accident. Widenhofer appeals from the District Court’s denial of his motion to suppress and from the jury verdict. We address two issues on appeal:

1) Did the District Court err in denying Widenhofer’s motion to suppress the results of his blood test?
2) Did the District Court err in allowing Officer Zarske to testify concerning hearsay statements allegedly made to him by Rothschiller?

Discussion

I

1) Did the District Court err in denying Widenhofer’s motion to suppress the results of his blood test?

The standard of review of a district court’s denial of a motion to suppress is whether the court’s findings of fact were clearly erroneous, and whether those findings were correctly applied as a matter of law. State v. Williams (1995), 273 Mont. 459, 462, 904 P.2d 1019, 1021; State v. Flack (1993), 260 Mont. 181, 188, 860 P.2d 89, 92, 94. Widenhofer contends that he was not under arrest at the time the blood sample was drawn at St. Peter’s Hospital. As a result, he asserts that the blood sample and the resulting BAC evidence should have been suppressed. Widenhofer asserts that the District Court erred in finding that he was under arrest at the hospital and, thus, in denying the combined motion to suppress and motion in limine.

Montana law requires that an individual be arrested for DUI before an officer can request a blood alcohol test under the implied consent law. See § 61-8-402, MCA (1995) (“A person who operates ... a vehicle upon ways of this state open to the public is considered to have given consent ... to a test ... of the person’s blood ... for the purpose of determining any measured amount or detected presence of alcohol or drugs in the person’s body if arrested by a peace officer for driving ... a vehicle while under the influence of alcohol ....” (emphasis added)). Montana law also provides that “[a]n arrest is made by an actual restraint of the person to be arrested or by the person’s submission to the custody of the person making the arrest. ... All necessary and reasonable force may be used in making an .arrest, but the person arrested may not be subject to any greater restraint than is necessary to hold or detain that person.” Section 46-6-104, MCA (1995). In State v. Thornton (1985), 218 Mont. 317, 322-23, 708 P.2d 273, 277, this Court adopted a three-part test for determining whether an individual is under arrest: “An arrest involves three elements: (1) authority to arrest; (2) assertion of that authority with intention to affect an arrest; and (3) restraint of the person arrested.” Widenhofer, arguing that the State failed to satisfy elements two and three, focuses on the fact that he was never physically restrained by Officer Zarske. However, physical restraint is not necessary for an arrest under Montana law.

In Thornton, we adopted a broad interpretation of the term “restraint,” which includes restraint by oral statement of arrest without any physical touching. We explained that

the view that a physical restraint is a necessary element of an arrest is largely discredited in recent cases.... [W]e assert that the standard for an arrest when there is not a physical restraint of the defendant is whether a reasonable person, innocent of any crime, would have felt free to walk away under the circumstances. This standard drops any technical requirements for an arrest and the concept of restraint, and instead looks upon all the facts and circumstances of each case.

Thornton, 708 P.2d at 277-78 (citations omitted).

Widenhofer asserts that the issue of whether he was under arrest under the particular facts of this case (no physical restraint or citation issued while defendant was in the hospital) is an issue of first impression for this Court. As a result, Widenhofer asserts that the Court should follow other jurisdictions that have addressed similar issues. We conclude, however, that each of the cases that Widenhofer presents is distinguishable. See Seith v. State (Ga. App. 1997), 484 S.E.2d 690 (concluding that defendant was not under arrest prior to blood testing but that testing was done because defendant was involved in a serious accident therefore authorizing statute did not require that defendant be under arrest at time of testing); State v. Hansen (N.D. 1989), 444 N.W.2d 330 (officer does not contend that defendant was under arrest at time of blood sampling and defendant did not consent to blood test); State v. Waicelunas (Ariz. Ct. App. 1983), 672 P.2d 968 (officer testified that he did not place defendant under arrest and extracted blood sample despite defendant’s refusal); State v. Williams (Kan. Ct. App. 1980), 610 P.2d 111 (officer admitted that he did not verbally arrest defendant and court found that defendant did not voluntarily consent to blood testing); State v. Baker (Neb. 1969), 171 N.W.2d 798 (dispute existed whether defendant consented to blood testing, no dispute that defendant was not arrested until two days after blood was withdrawn); State v. Gorey (Ohio Mun. 1994), 646 N.E.2d 1208 (statute specifically requires that defendant be “actually seized;” Ohio does not recognize “constructive seizure” of the defendant).

Widenhofer farther asserts that “it is clear that a reasonable person in Widenhofer’s situation would have felt tree to walk away from both Zarske and the Hospital ...” We disagree. The facts and circumstances of this case support a conclusion that Widenhofer was under arrest when he submitted to a blood test at the request of Officer Zarske. Officer Zarske delivered Widenhofer to St. Peter’s Hospital, he remained at the hospital and maintained contact with Widenhofer during and after Widenhofer’s medical treatment. Officer Zarske did not leave Widenhofer until he was satisfied that Widenhofer was safely in the custody of Ed Grady. Officer Zarske further testified that he considered Widenhofer’s safety and medical needs more important than taking him to jail. Officer Zarske verbally placed Widenhofer under arrest at the hospital. Finally, Officer Zarske asserts that verbal restraint was sufficient to arrest Widenhofer in this case because Widenhofer was being treated for his injuries and Widenhofer was calm and cooperative. Based on the foregoing facts, we conclude that Officer Zarske complied with § 46-6-104, MCA, by using no greater restraint than is necessary to hold an individual in this particular situation. We further conclude that Widenhofer was under arrest when Officer Zarske requested the blood test and, therefore, hold that the District Court did not err in denying Widenhofer’s motion to suppress the results of the blood test. Affirmed.

II

2) Did the District Court err in allowing Officer Zarske to testify concerning hearsay statements allegedly made to him by Rothschiller?

The standard of review for evidentiary rulings is whether the district court abused its discretion. State v. Gollehon (1993), 262 Mont. 293, 301, 864 P.2d 1257, 1263. The determination of whether evidence is relevant and admissible is left to the sound discretion of the trial judge and will not be overturned absent a showing of abuse of discretion. Gollehon, 864 P.2d at 1263.

Widenhofer asserts that the District Comet abused its discretion when it allowed Officer Zarske to testify regarding Rothschiller’s statement that Widenhofer was the driver of the vehicle involved in the accident. He contends that Officer Zarske’s testimony was hearsay and its admission violated his constitutional right of confrontation and to cross-examine a witness.

The State asserts that Officer Zarske’s testimony falls within Rule 801(d)(2)(B), M.R.Evid., as an exception to hearsay. That rule provides: “A statement is not hearsay if ... [t]he statement is offered against a party and is ... a statement of which the party has manifested an adoption or belief in its truth ....” Rule 801(d)(2)(B), M.R.Evid. The State asserts that ‘Widenhofer clearly acquiesced in the statement that he was the driver and thereby manifested an adoption in its truth.” In support, the State alleges that by not responding adversely to Rothschiller’s pointing at Widenhofer as the driver, and by sitting in the front seat of the patrol car, ‘Widenhofer acquiesced completely in Rothschiller’s statement that Widenhofer was the driver of the vehicle.” We disagree.

The State’s reliance on Rule 801(d)(2)(B), M.R.Evid., is misguided for two reasons. First, the State concedes that the District Court did not make an express determination that Widenhofer adopted the statement of Rothschiller as is required. See United States v. Schaff (9th Cir. 1991), 948 F.2d 501, 505 (the federal courts allow admission of adoptive statements provided that the district court makes a determination that an innocent defendant normally would have made a response to the statement). Second, the State has not presented sufficient evidence that Widenhofer acquiesced in Rothschiller’s statement. Widenhofer sat in the front seat of the patrol car at Officer Zarske’s request. By simply sitting in the front seat of the patrol car, Widenhofer did not indicate agreement with statements Rothschiller had made to Officer Zarske when Widenhofer was not present. In addition, when Rothschiller was pointing at Widenhofer, which Officer Zarske claimed was in response to his question of who was driving the car, Widenhofer could not hear the conversation and did not have any reason to know what Officer Zarske and Rothschiller were discussing. Widenhofer’s subsequent failure to contradict Rothschiller’s pointing did not amount to an adoption by Widenhofer of Rothschiller’s statement. Therefore, we reject the State’s argument that the District Court properly admitted Officer Zarske’s hearsay testimony under the Rule 801(d)(2)(B), M.R.Evid., adoption exception to the hearsay rule.

Throughout Officer Zarske’s testimony relating to Rothschiller’s statements, defense counsel made objections. After allowing Officer Zarske to testify as to several statements made by Rothschiller, the District Court inquired: “I’ve let in some statements given by this individual, who is apparently not here. So why don’t you [prosecutor], for the record, indicate your efforts to get him here.” Based on this statement by the court and its subsequent overruling of defense counsel’s objections, Widenhofer assumed that the court was proceeding under the “unavailable witness” exception contained in Rule 804(a)(5), M.R.Evid. Rule 804 controls situations where the declarant of a statement is unavailable and a hearsay statement will be admitted. Subsection (a) states: “Unavailability as a witness includes situations in which the declarant: ... (5) is absent from the hearing and the proponent of the declarant’s statement has been unable to procure the declarant’s attendance by process or other reasonable means.” Rule 804(a)(5), M.R.Evid.

Widenhofer contends that the District Court’s allowing the hearsay testimony presented by Officer Zarske at trial violated his right to confront and cross-examine a witness under the Sixth Amendment of the United States Constitution and Article II, Section 24 of the Montana Constitution. This Court (in the context of protecting sexually abused children while testifying in court with an opaque screen shielding them from the defendant) adopted the United States Supreme Court’s reasoning that literal reading of the Confrontation Clause would

“abrogate virtually every hearsay exception, a result long rejected as unintended and too extreme.” Thus, in certain circumstances, “competing interests, if ‘closely examined,’ may warrant dispensing with confrontation at trial.”

State v. Davis (1992), 253 Mont. 50, 58, 830 P.2d 1309, 1314 (citations omitted). The State has not provided a “competing interest” justifying admission of hearsay testimony as a substitute for Rothschiller’s presence at trial. The State’s only excuse is that it subpoenaed Rothschiller the night before trial, and he subsequently failed to attend.

This Court has not had occasion to determine what standard to apply when determining whether a witness is “unavailable” for purposes of Rule 804(a)(5), M.R.Evid., Widenhofer asserts that this Court should adopt the standard employed by the United States Supreme Court, that the prosecution has the burden under Rule 804 to make a reasonable good faith effort to procure the attendance of a witness. See Barber v. Page (1968), 390 U.S. 719, 88 S.Ct. 1318, 20 L.Ed.2d 255 (holding that the Confrontation Clause of the Sixth Amendment requires the prosecution to meet this burden); see also United States v. Quinn (6th Cir. 1990), 901 F.2d 522 (holding that attempts to untimely subpoena a witness two days before trial were “singularly unenthusiastic” attempts that did not satisfy the government’s burden to show the witness was unavailable).

The Commission Comments to Rule 804, M.R.Evid., indicate “under subdivision (a)(5) that absence from the hearing is allowable only if a proponent is unable to procure attendance by ‘reasonable means’ and that this is consistent with the Constitutional requirements set out in State v. LaCario, 163 Mont. 511, 515, 518 P.2d 982 (1974).” In the context of the State’s seeking to admit deposition testimony of witnesses who were out of state, but not subpoenaed, LaCario set the standard that “[t]he Sixth Amendment to the United States Constitution and Art. II, Section 24 of the Montana Constitution... requires a greater exercise of diligence in the attempt to procure personal attendance of a prosecution witness than was demonstrated by the state in this case.” LaCario, 518 P.2d at 985. Widenhofer argues that, although the State did subpoena Rothschiller, its last minute unenthusiastic service of the subpoena the night before trial does not constitute a good faith effort.

The Supreme Court has articulated a two-prong test for determining the admissibility of a declarant’s out-of-court statement under the Confrontation Clause. Roberts, 448 U.S. at 65, 100 S.Ct. at 2538. First, “the prosecution must either produce, or demonstrate the unavailability of, the declarant whose statement it wishes to use against the defendant.” Roberts, 448 U.S. at 65, 100 S.Ct. at 2538. The second prong, which only “operates once a witness is shown to be unavailable,” involves an inquiry into whether a statement is accompanied by adequate “indicia of reliability.” Roberts, 448 U.S. at 66, 100 S.Ct. at 2539. Therefore, the prosecution bears the burden of demonstrating “unavailability” before a witness’ out of court statement may be admitted. Roberts, 448 U.S. at 74-75, 100 S.Ct. at 2543-44. In this case, the following conversation ensued between the court and the State:

COURT: The question is why Rothschiller isn’t here. That is what you need to tell me, for the record. Tell me what you’ve done to get him here, why he isn’t here.
STATE: Scott Rothschiller was subpoenaed by the State to be a witness in the trial today. And we have information that he was subpoenaed. And we also made several attempts to contact Scott Rothschiller and asked for him to notify him that we were subpoenaing him. We were unable to contact him by phone. But he did receive the subpoena and he is not in attendance today. He did not appear to be a witness. He is — his connection is that he was a passenger in the vehicle and that he is a friend of the defendant and could testify.
COURT: Have you filed the service of the subpoena on him? The return of service, is that in the file?
STATE: The return service has been sent by the sheriff to the Court. And all that we — all that I can file at this point is record by the Great Falls Sheriff’s Department that it was served.
COURT: Do you have that?
STATE: Yes. The return service has not been received and I don’t have the copy here.
COURT: So in talking with them [sheriffs], they told you that they served him?
STATE: Yes.

We conclude that the State laid an insufficient foundation for a finding by the District Court that Rothschiller was “unavailable.” The State merely informed the court that it subpoenaed an out-of-town witness the night before trial. It did not relate any other, more timely efforts to procure the witness for trial, nor did it give any explanation as to why the witness did not attend. While we decline the opportunity to set a specific time frame as to what is considered reasonable when determining whether the State has used “reasonable means” to procure the attendance of a witness, we conclude that the State’s subpoenaing Rothschiller in Great Falls the night before he was to appear at trial in Helena does not satisfy the State’s burden of showing that it used reasonable means to procure his presence.

An essential element of the offense of driving under the influence is proof that the individual was in fact “driving or in actual physical control of the vehicle.” Widenhofer’s defense was that he was not driving on the evening of the accident; the only individual other than Widenhofer who could directly testify as to who was driving was Rothschiller. Therefore, Rothschiller’s testimony was crucial to the outcome of this case. The hearsay exceptions are meant to be used as tools and have “been explained as arising from necessity ....” Barber, 390 U.S. at 722, 88 S.Ct. at 1320. In this case, the prosecution’s use of hearsay testimony was a convenience, not a necessity. The State’s minimal efforts to procure Rothschiller do not satisfy its burden of showing he was “unavailable.”

Although the District Court made inquiries as to the availability of Rothschiller, the court did not make a definitive ruling in that regard nor did it express a basis for denying defense counsel’s objections to Officer Zarske’s hearsay testimony. As a result, Widenhofer was forced to “only assume that the District Court implicitly ruled that Rothschiller was an unavailable witness under Rule of Evidence 804(a)(5).” Additionally, the State in its response brief failed to respond to Widenhofer’s “unavailable witness” argument and, in its confusion over why the District Court admitted the testimony, ventured into the “adoptive statement” exception to the hearsay rule. As set forth above, we hold that there was not a sufficient basis for applying either exception to the general rule proscribing hearsay testimony. Rule 802, M.R.Evid.

“There are few subjects ... upon which this Court and other courts have been more nearly unanimous than in their expressions of belief that the right of confrontation and cross-examination is an essential and fundamental requirement for the kind of fair trial which is this country’s constitutional goal.” Pointer v. Texas (1965), 380 U.S. 400, 405, 85 S.Ct. 1065, 1068, 13 L.Ed.2d 923. We conclude that the District Court abused its discretion in allowing Officer Zarske to testify regarding statements allegedly made by Rothschiller indicating who was driving the vehicle on the night of the accident and in so doing, violated the constitutional right of Widenhofer to confront and cross-examine a witness. Affirmed in part and reversed and remanded for a new trial.

CHIEF JUSTICE TURNAGE, JUSTICES HUNT, NELSON, REGNIER and TRIEWEILER concur.

JUSTICE GRAY,

specially concurring.

I concur in the result the Court reaches on both issues.

With regard to the admissibility of the blood test results, I agree that the District Court’s implicit finding that Officer Zarske asserted his authority to arrest with the intention to affect an arrest is supported by substantial credible evidence and is not otherwise clearly erroneous. My agreement is based on the fact that the officer read the implied consent form which advised Widenhofer that he was under arrest to Widenhofer twice and because physical restraint is not necessary to effectuate an arrest. It is my opinion, however, that the facts of this case — namely, that Officer Zarske did not write a Notice to Appear while at the hospital and that Officer Zarske told Widenhofer he would be contacted by mail if the blood test results indicated that Widenhofer was under the influence — also would have supported a finding by the District Court that the officer had not asserted his authority to arrest with intention to affect an arrest and a corresponding conclusion, under Thornton, that no arrest had been made in this case. Nevertheless, because our standard in reviewing a district court’s findings is not whether evidence supported a contrary finding, I agree that the District Court did not err in determining — on this record — that Widenhofer was arrested and, as a result, in denying his motion to suppress the blood test results.

With regard to the second issue, I agree entirely with the Court’s rationale relating to the inadmissibility of Officer Zarske’s testimony regarding Rothschiller’s statements to him. I also agree with the remand for a new trial, because that is the remedy sought by the appellant in this case. Whether a remand, as opposed to a directed judgment of acquittal or dismissal of the charge, would have been appropriate under the double jeopardy analysis set forth in State v. Warren (1981), 192 Mont. 436, 628 P.2d 292, is a question not presented here.

      . Montana modeled Rule 801(d)(2)(B) after the federal rules of evidence. This Court has not specifically addressed the Rule 801(d)(2)(B) exception to hearsay, but see Commission Comments to Montana Rules of Evidence citing Territory v. Big Knot on Head (1886), 6 Mont. 22, 11 P. 670; State v. Lucey (1900), 24 Mont. 295, 61 P. 994; State v. Fisher (1917), 54 Mont. 211, 169 P. 282; State v. Byrne (1921), 60 Mont. 317, 199 P. 262; State v. McClain (1926), 76 Mont. 351, 246 P. 956; State v. Won (1926), 76 Mont. 509, 248 P. 201, addressing what was known as the tacit admission rule.


author: JUSTICE HUNT

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. JEREMY CORD WOODS, Defendant and Appellant.
    No. 97-041.
    Submitted on Briefs September 4, 1997.
    Decided December 23, 1997.
    54 St.Rep. 1445.
    286 Mont. 355.
    951 P.2d 981.

      For Appellant: Jeremy Cord Woods, Deer Lodge (pro se).
    For Respondent: Joseph P. Mazurek, Attorney General, Jennifer Anders, Assistant Attorney General, Helena; Mike McGrath, Lewis and Clark County Attorney, Lisa Leckie, Deputy Lewis and Clark County Attorney, Helena.
   JUSTICE HUNT

delivered the Opinion of the Court.

Jeremy Cord Woods (Appellant) appeals from an order of the First Judicial District Court, Lewis and Clark County, granting the State’s petition for destruction of evidence held by the Helena Police Department. We affirm.

We frame the issues on appeal as follows:

1. Did the District Court err when it imposed restitution as part of the underlying sentence?
2. Did the District Court err when it granted the State’s petition for destruction of evidence?
3. Was Appellant’s restitution obligation discharged in his Chapter 7 bankruptcy proceeding?
4. Did the District Court err when it failed to appoint counsel to represent Appellant in this proceeding?

BACKGROUND

On November 5,1993, Appellant was charged by information with issuing a bad check, a felony in violation of § 45-6-316, MCA. The information alleged that on October 13, 1993, Appellant issued a check on his account at Seafirst Bank in Washington to Norwest Bank in Helena, Montana, for $3,830.00, knowing that it would not be paid by the depository. On January 6, 1994, he pled guilty.

After further investigation, it was discovered that Appellant had written over $30,000.00 worth of bad checks during a check writing “spree.” Appellant was still writing bad checks as of the date his probation officer had prepared the presentence investigation. That probation officer recommended that the court require Appellant to make full restitution for all bad checks, once all checks were accounted for. The officer estimated that the checks amounted to “tens of thousands” of dollars.

Following receipt of the presentence investigation, Appellant prepared a “Report to the Court [and] Defendant’s Corrections of Presentence Investigation.” Appellant did not dispute the probation officer’s conclusion regarding the amount of bad checks written, and he did not dispute the recommendation that he make full restitution. To the contrary, Appellant apologized to the banks and merchants he defrauded and agreed to make full restitution.

Appellant subsequently pled guilty to two additional offenses, theft and bail jumping, that he committed after the original charge was filed. On May 26,1994, the court sentenced Appellant to ten years at the Montana State Prison on the bad check charge. For the two additional charges, the court sentenced him to two five-year terms, both suspended. The suspended portions of his sentence were to run concurrently with each other, but consecutively to his ten-year prison sentence. The court also ordered Appellant to pay full restitution, as determined by the court’s restitution officer. The restitution officer determined that the restitution totaled $35,823.49. Appellant did not appeal his conviction or sentence.

On July 15, 1996, the State filed a petition for destruction of evidence, requesting that merchandise seized by the Helena Police Department following Appellant’s arrest in October 1993, be returned to their rightful owner and that the value of those returned items as well as currency that was seized be applied towards Appellant’s restitution obligation. The State alleged that the items it proposed to return “were either identified by merchants or [Appellant] or his girlfriend who was present when the checks were written as having been purchased with the bad checks.” Those items included four firearms, ammunition, gun cleaning equipment, a holster, a TV/radio, jewelry, tools, compact discs, cassette tapes, clothing, videos, a Sony discman, speakers, headphones, amplifiers, cassette decks, other stereo equipment, a Chevrolet Nova automobile, a scanner, and cash in excess of $9,000.00. The State also proposed to return some personal items to Appellant, and to destroy a few remaining items, such as miscellaneous receipts, adult magazines, identification papers and keys.

Appellant contested the petition and requested that the court appoint counsel to represent him. The District Court denied his request for counsel on the basis that ‘Woods [was] not facing further incarceration or additional punishment. ...” Appellant appealed the denial of his request for an attorney to this Court. This Court concluded that Appellant’s substantial rights were not affected by the District Court’s refusal to appoint counsel to represent him, and that consequently bis appeal was not authorized by § 46-20-104(1), MCA. Accordingly, this Court dismissed the appeal.

The District Court subsequently granted the State’s petition for destruction of evidence, but stayed execution of the order pending final disposition by this Court. On December 17,1996, Appellant filed a notice of appeal from the District Court’s order and also requested that this Court appoint counsel to represent him in presenting his appeal. On February 24,1997, we denied his request for appointment of counsel. We explained that his entitlement to counsel under § 46-8-104, MCA, was dependent upon the existence of a criminal action or proceeding. We noted that the petition for destruction of evidence is not a criminal proceeding, and Appellant, who was sentenced and convicted nearly two years prior to the filing of the petition, faced no additional charges, incarceration or punishment. Thereafter, Appellant filed his appellate brief pro se.

STANDARD OF REVIEW

We review issues of law to determine whether the court’s interpretation and application of the law is correct. Peters v. State (1997), [285 Mont. 345], 948 P.2d 250, 252.

ISSUE ONE

Did the District Court err when it imposed restitution as part of the underlying sentence?

Appellant contends that the District Court erred when it imposed restitution as part of his sentence in May 1994. He claims that the presentence investigation report did not contain any documentation of the victims’ pecuniary loss and did not reference his financial resources or ability to pay restitution, as required by § 46-18-242, MCA. Additionally, he insists that because he was only found guilty of issuing one bad check in the amount of $3,830.00, his restitution obligation should be limited to that amount. He maintains that the District Court therefore erred in setting his restitution obligation to an amount over $35,000.00.

This Court has no jurisdiction to hear this issue. The rules of appellate procedure provide that a notice of appeal must be filed within 60 days from the date of a criminal judgment. Rule 5(b), M.R.App.P. In this case, the District Court ordered restitution on May 26, 1994, and Appellant did not appeal that judgment. The current notice of appeal from the order granting the State’s petition for destruction of evidence, was filed on December 17,1996. Because his right to appeal the 1994judgment against him expired more than two years ago, he cannot now raise the issue in this latest and unrelated appeal. State v. Rice (1996), 275 Mont. 81, 85, 910 P.2d 245, 246 (citing State v. Haskins (1992), 255 Mont. 202, 841 P.2d 542).

ISSUE TWO

Did the District Court err when it granted the State’s petition for destruction of evidence?

Appellant contends that the District Court erred by granting the State’s petition for destruction of evidence, because in so doing, the District Court allowed the State “to convert [his] personal property” in excess of the actual pecuniary loss of $3,830.00 causedbyhis crime. He maintains that such an order violates his constitutional rights embodied in Article II, Sections 3, 4, 15, 17, and 22 of the Montana State Constitution and the Fifth, Eighth and Fourteenth Amendments to the United States Constitution.

We have already held, however, that Appellant waived any arguments regarding the amount of his restitution obligation when he failed to timely appeal the underlying judgment. Furthermore, at the time of sentencing, Appellant fully understood and accepted responsibility for repaying all the banks and merchants whom he defrauded. In response to the probation officer’s recommendation that Appellant pay full restitution, which was in the “tens of thousands” of dollars, Appellant stated in his “Report to the Court [and] Defendant’s Corrections of Presentence Investigation”:

In my period of incarceration I have had much time to think and evaluate myself as a whole. I wish to begin by saying “I’m sorry.” I want to make my apologies to everyone involved and ask for your forgiveness. To the banks and merchants, I will make the necessary arrangements to make reparation to you all. Please be patient, there is a considerable sum to repay. I will do my best to return the money as quickly as possible.

Accordingly, because Appellant waived any argument challenging the amount of his restitution obligation, and indeed fully accepted responsibility for making full restitution at the time of sentencing, we hold that the lower court did not err in ordering property with a value in excess of $3,830.00 be returned to the defrauded merchants.

Appellant next contends that the State misinterprets the District Court’s restitution order by seeking restitution in an amount over $3,830.00. Appellant is wrong. As we have already pointed out, the District Court’s order did not limit restitution to the amount for that one bad check. Rather, it ordered Appellant to “pay full restitution” in an amount to be determined by the restitution officer after all the bad checks had been fully accounted for.

Finally, Appellant maintains that the State’s petition was untimely. He contends that because his restitution obligation was made a condition of the suspended portions of his sentence, he is not required to pay restitution until he is released from prison. However, Appellant misapprehends the nature and purpose of the present proceedings. Appellant, who is incarcerated and has no income, is not being ordered to presently pay restitution from any earnings, and the failure to fully pay restitution at this time will not result in the revocation of the suspended portions of his sentence. What is at issue here is the manner in which to dispose of evidence seized by the police. Such evidence is the fruit of Appellant’s crimes and does not rightfully belong to him. The procedure employed by the State provides the means for appropriating or disposing of such evidence when prosection is complete and no further legal proceedings are contemplated. See §§ 46-5-306 through 46-5-309, MCA. Although the State has characterized the proceeding as a “petition for destruction of evidence,” the majority of the items are not actually being destroyed. The record shows that instead, the cash will be turned over to the restitution department to reimburse Appellant’s victims, and the consumer items will be returned to the merchants whom Appellant defrauded. As a part of the proceeding, the State has appropriately requested that the returned assets be applied towards Appellant’s restitution obligation. Allowing Appellant to keep the fruits of his crimes, simply because he has not yet been released from prison and has not yet begun to serve the suspended portions of his sentence, flies in the face of all notions of justice and has no basis in the law. We hold that the District Court did not err when it granted the State’s petition.

ISSUE THREE

Was Appellant’s restitution obligation discharged in his Chapter 7 bankruptcy proceeding?

Appellant contends that the lower court erred when it failed to account for his Chapter 7 bankruptcy proceeding, which was pending when the State filed the petition for destruction of evidence. He cites Pennsylvania Department of Public Welfare v. Davenport (1990), 495 U.S. 552, 110 S.Ct. 2126, 109 L.Ed.2d 588, and argues that his restitution obligation was discharged. According to Appellant, the District Court therefore had no authority to grant the State’s petition.

The State contends that Appellant waived any argument that his restitution obligation was discharged in bankruptcy, because he failed to raise that issue to the District Court and now presents it to this Court for the first time on appeal. However, the bankruptcy court did not issue the discharge order until January 9, 1997, one month after the District Court granted the petition on December 11, 1996. Appellant thus could not have argued to the District Court that his restitution obligation was discharged. We hold that Appellant did not waive this argument, and we address the merits of his contention.

We reject Appellant’s argument that a discharge order in a Chapter 7 bankruptcy proceeding also discharges restitution obligations imposed by a criminal court. In a case directly on point, the United States Supreme Court ruled to the contrary. In Kelly v. Robinson (1986), 479 U.S. 36, 50, 107 S.Ct. 353, 361, 93 L.Ed.2d 216, 229, the United States Supreme Court held that § 523(a)(7) of the Bankruptcy Code, which excepts certain debts from discharge, “preserves from discharge any condition a state criminal court imposes as part of a criminal sentence.” Accordingly, restitution obligations imposed as a condition of probation in state criminal actions are nondischargeable in proceedings under Chapter 7 of the Bankruptcy Code, 11 U.S.C. § 701 et seq. Kelly, 479 U.S. at 53, 107 S.Ct. at 362-63. The Court based its decision on the state’s interest in unfettered administration of its criminal justice system; the historical construction of the earlier Bankruptcy Act of 1898 that excepted restitution orders from discharge; and the absence of any evidence that Congress intended to change that construction when it enacted the Bankruptcy Code in 1978. Kelly, 479 U.S. at 53, 107 S.Ct. at 362-63.

Appellant relies on Davenport, but that case is not applicable for two reasons. First, that case involved Chapter 13, not Chapter 7, proceedings. In Davenport, the Supreme Court held that restitution obligations constituted dischargeable “debts” within the meaning of the Bankruptcy Code, 11 U.S.C. § 101(11). Davenport, 495 U.S. at 555, 110 S.Ct. at 2129. Because the statutory exception to discharge of debts relied on in Kelly, § 523(a)(7), does not extend to Chapter 13 proceedings, the Supreme Court concluded that restitution payments are dischargeable pursuant to Chapter 13. Davenport, 495 U.S. at 555, 110 S.Ct. at 2129. In so ruling, however, the Supreme Court emphasized that its decision “does not signal a retreat from the principles applied in Kelly.” Davenport, 495 U.S. at 563, 110 S.Ct. at 2133. Because Appellant’s case involved Chapter 7 and not Chapter 13 bankruptcy proceedings, Kelly controls.

In any event, Davenport is no longer good authority for the proposition that restitution obligations are dischargeable even in Chapter 13 proceedings. In response to Davenport, Congress amended Chapter 13 to specifically exclude from discharge a restitution obligation included in a criminal sentence. See Criminal Victims Protection Act of 1990, Pub.L. 101-581, § 3, 104 Stat. 2865, codified at 11 U.S.C. § 1328(a)(3). The Davenport result has thus been overruled by statute. We therefore hold that Appellant’s restitution obligation was not discharged by the order of the Bankruptcy Court.

ISSUE FOUR

Did the District Court err when it failed to appoint counsel to represent Appellant in this proceeding?

Appellant maintains that he is entitled to representation by an attorney in presenting his appeal. He contends that the District Court violated § 46-8-104, MCA, as well as the right to counsel guaranteed by the Montana State Constitution and the United States Constitution. The State, on the other hand, contends that the doctrine of res judicata precludes Appellant from raising that issue. We agree with the State that Appellant is not entitled to relitigate that issue.

In Scott v. Scott (1997), [283 Mont. 169], 939 P.2d 998, we defined the doctrine of res judicata to be “a final judgment which, when rendered on the merits, is an absolute bar to a subsequent action between the same parties or those in privity with them, upon the same claim or demand.” Scott, 939 P.2d at 1001 (citing Fiscus v. Beartooth Electric Cooperative, Inc. (1979), 180 Mont. 434, 436, 591 P.2d 196, 197). In this case, we have already held that Appellant is not entitled to appointment of counsel pursuant to § 46-8-104, MCA. On December 17, 1996, Appellant filed a motion for appointment of counsel and by order filed February 24, 1997, this Court denied that motion for the same reasons that the District Court below denied his motion. We stated:

We are now presented with essentially the same requests presented to the District Court. In addition, these requests are made within essentially the same context as was present below. We will resolve this matter in much the same manner as did the District Court:
Woods’ entitlement to counsel under § 46-8-104, MCAis dependent upon the existence of a criminal action or proceeding. However, the petition for destruction of evidence, brought pursuant to §§ 46-5-306 through 46-5-309, MCA, is not a criminal action or proceeding, as indicated by the stated purpose of the statutes and as established by the relevant facts: Woods was convicted and sentenced for issuing bad checks nearly two years ago, and faces no additional charges, incarceration, or punishment related to that conviction. Therefore, this Court concludes that Woods is not entitled to appointment of counsel.

Our earlier holding is now res judicata, and we will not revisit it on appeal. The order of the District Court denying Appellant’s motion for appointment of counsel is affirmed.

Affirmed.

JUSTICES NELSON, GRAY, TRIEWEILER and LEAPHART concur.