author: JUSTICE HUNT JUSTICE WEBER JUSTICE GRAY

text:
    JOSEPH HAYES HAUSEMAN, JAMES JUDD HAUSEMAN, DEAN M. HAUSEMAN, III, STEVEN SCOTT HAUSEMAN, and ROBERT CHARLES HAUSEMAN, Plaintiffs and Appellants, v. WILLENE JONES KOSKI, and all other persons, unknown, claiming or who might claim any right, title, estate, or interest in or lien or encumbrance upon the real property described in the Complaint or any part thereof adverse to plaintiffs’ ownership or any cloud upon plaintiffs’ title thereto, whether such claim or possible claim be present or contingent including the person or persons in possession, Defendants and Respondents.
    No. 93-005.
    Submitted on Briefs March 11, 1993.
    Decided August 3, 1993.
    50 St.Rep. 898.
    259 Mont. 498.
    857 P.2d 715.

      For Plaintiffs and Appellants: Ben Berg, Jr. and Rienne H. McElyea, Berg, Lilly, Andriolo & Tollefsen, Bozeman.
    For Defendants and Respondents: Lyman H. Bennett, III and Lynda S. Weaver, Morrow, Sedivy & Bennett, Bozeman.
   JUSTICE HUNT

delivered the Opinion of the Court.

Appellants Joseph H. Hauseman, James J. Hauseman, Dean M. Hauseman III, Steven S. Hauseman, and Robert C. Hauseman (Hausemans), as co-trustees and interested parties, appeal from an order of the Eighteenth Judicial District Court, Gallatin County, granting summary judgment in favor of the personal representative of the estate of Maurice Jones, and finding that the recording of a revocation of a trust with the clerk and recorder provided constructive delivery to the co-trustees.

We affirm.

The only issue raised by the Hausemans is whether the District Court erred in holding that a recordation of a revocation of a trust agreement effectively revoked the trust.

The facts are undisputed.

On May 1, 1979, Marlyn J. Jones and J. Maurice Jones (trustor), who were both trustors and co-trustees, executed a revocable trust which reserved the right to revoke or amend the trust in whole or in part by an instrument in writing delivered to the co-trustees. Marlyn died on May 14, 1980, and did not exercise her power to revoke. On May 31,1991, trustor signed a revocation of trust, which his attorney recorded with the clerk and recorder’s office on May 31,1991. OnJune 13, 1991, trustor died.

On June 20, 1991, trustor’s attorney sent the co-trustees, Joseph Hayes Hauseman and James Judd Hauseman, a copy of said revocation via certified mail. Neither of the named individuals received the revocation and the letters were returned to the attorney’s office as unclaimed.

Initially, we discuss the standard of review applied in summary judgment cases. Rule 56(c), M.R.Civ.P., states that it is proper to grant summary judgment when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. On the cross-motions for summary judgment, the District Court stated that the parties agreed that there were no issues of material fact. Our standard of review on questions of law is whether the district court’s interpretation of the law is correct. Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474, 803 P.2d 601, 603.

The following provision contained in the trust agreement is at the center of this dispute:

Trustors reserve the right at any time, by instrument in writing delivered to the Co-Trustees, and acknowledged in the same manner of conveyance as the real property and title to be recorded in the State of Montana, unless acknowledgement be waived by the Co-Trustee to revoke or amend this trust in whole or in part. The duties and liabilities of the Co-Trustees shall under no circumstances be substantially increased by any amendment here under except by their written consent. Upon the death of the Trustors, this Trust shall become irrevocable and not subject to amendment.

The Hausemans argue that trustor did not follow the manner specified in the trust for delivery of the revocation of the trust. They also contend that the trust was irrevocable because trustor died before his lawyer deposited the revocation in the mail. They maintain that § 72-23-502, MCA (1987) (Repealed. Sec. 220, Ch. 685, L. 1989), requires that if a trustor reserves the power to revoke a trust, the power of revocation must be “strictly pursued.”

We begin our analysis with the general rule that in the construction of trusts it is the trustor’s intent that controls. 76 Am. Jur. 2d Trusts § 17 (1975). To determine the trustor’s intent we look to the language of the trust agreement. In re Marriage of Herrin (1979) 182 Mont. 142, 146, 595 P.2d 1152, 1155. The language of the trust agreement is clear and unambiguous that trustor reserved the power to revoke the trust agreement at any time prior to his death. For a proper revocation, the trust agreement required the trustor to complete three steps: (1) a writing, (2) delivered to the co-trustees, and (3) acknowledged in the same manner of conveyance as the real property and title to be recorded in the State of Montana.

The parties do not dispute that trustor met the first and third requirements. The District Court concluded that the second requirement was met by the filing at the clerk and recorder’s office of the trust revocation. We agree.

The Michigan Supreme Court defined the term “delivery” as meaning:

It is our view that any act which will accomplish the purpose of the parties in requiring delivery is sufficient to give effect to the revocation. It is not a question of a good or legal delivery. If the purpose requiring it is accomplished, it is immaterial whether the instrument of revocation is in the mail or on the trustee’s desk at the time of the donor’s death. Delivery is not essential to complete a revocation unless made so by the parties in the trust agreement. What was the purpose of requiring it here? Obviously it was not for the protection of the trustee. The law will do that regardless of delivery or other notice. It is a fair inference that, in requiring delivery, the parties intended to establish the fact of revocation during the life time of the donor, to make sure the status of the trust at that time, to cause a surrender of the instrument, if one were made, so that some stranger or interested person could not give it vitality by an unauthorized delivery after his death. Any act of surrender to that trustee would put the original instrument of revocation beyond the owner’s power to alter or destroy would accomplish the purpose in requiring delivery.

Hackley Union National Bank v. Farmer, et al. (Mich. 1931), 234 N.W. 135, 137.

In Hackley, prior to his death in Germany, the settlor executed a will and a revocation of a trust agreement. The instrument was signed and acknowledged. A certified copy was sent to the trustee with a letter stating that the settlor revoked the trust. Hackley, 234 N.W. at 136. The Michigan Court held that these actions were sufficient to constitute constructive delivery. After this analysis, the court then ruled that the revocation was ineffective on other grounds. Hackley, 234 N.W. at 137.

In Montana, delivery is accomplished by either words, acts, or both. The law does not require actual handing over of the document so long as it is handled in a way that unequivocally shows the intention of the settlor. Carnahan v. Gupton (1939), 109 Mont. 244, 96 P.2d 513; see also, Springhorn v. Springer, et al. (1926), 75 Mont. 294, 243 P. 803.

In this instance, trustor executed a written document revoking his trust on May 31, 1991. When the revocation was recorded, trustor directed his attorney to deliver notice to the remaining co-trustees.

The Hausemans contend that § 70-21-302, MCA, is not applicable because they are not subsequent purchasers for value. That argument disregards the purpose of the recording statutes. The recording statutes import notice to all interested parties in matters affecting title to real property. 66 Am. Jur. 2d Records and Recording Laws § 103 (1973). The trust property at issue is real property located in Gallatin County. As co-trustees, the Hausemans are interested parties to the realty. All co-trustees received constructive delivery when the revocation of trust was recorded with the Gallatin County Clerk and Recorder. We hold that § 70-21-302(1), MCA, imparts constructive delivery of the contents of the revocation instrument. We hold that the District Court did not err in granting summary judgment in favor of Ms. Koski.

We affirm.

CHIEF JUSTICE TURNAGE and JUSTICE HARRISON concur.

JUSTICE WEBER

specially concurs as follows:

I concur with the holding of the majority opinion for the reasons set out in that opinion and also for the reasons set out in this special concurrence.

The Revocation of Trust was executed by J. Maurice Jones both as Trustor and as one of the Co-Trustees. The following are the key paragraphs of that Revocation of Trust:

Under the provisions of said Trust and specifically paragraph II thereof the undersigned as the remaining and sole Trustor and Trustee of said Revocable Trust Agreement, by and through these presents and does herewith revoke, cancel and terminate said Trust in all of its particulars, conditions, and circumstances to the effect that from and after the date of this revocation said Trust shall be at an end, terminated and of no further force and effect and the grant of the said real property to the Trust also terminated and of no further force and effect with said property to revert and remain in my name.
Therefore, as Trustor I herewith grant, bargain, assign, transfer, and convey the said Trust to myself as an individual of the above described property to the affect that the title shall no longer be vested or reside in said trust but shall henceforth be in my name individually.

Under the first paragraph, Mr. Jones demonstrated his clear intent as both the sole surviving Trustor and as one of the Co-Trustees to terminate the Trust so that it would be of no further force and effect after the date of the Revocation of Trust which was May 31,1991. In the first paragraph he emphasized that by stating that the Trust terminated and was of no further effect so that the property reverted to and remained in his name.

In the final paragraph, Mr. Jones conveyed the property to himself. As one of three Co-Trustees, this certainly transferred an interest by virtue of the execution and recording of the Revocation of Trust. It established his intent to have the title to the property in his name individually.

As a result of the wording of the Revocation of Trust, Mr. Jones effectively transferred all of his interest as a Co-Trustee to himself individually.

Paragraph IV of the Trust Agreement provided in pertinent part as follows:

IV
... [T]he Co-Trustees shall also distribute to the ... surviving Trustor, such portion, or all the principal, of the Trust property as the ... surviving Trustor, from time to time may request in writing ....

Under that provision, Mr. Jones as surviving Trustor could require the Co-Trustees to distribute to him all of the principal of the trust property. The only requirement in order to do so is that he make his request “in writing.” The provisions of the Revocation and Conveyance axe sufficient to meet the requirements of Paragraph IV. He clearly directed the Co-Trustees to distribute to him individually all of the principal of the trust property and did so in writing.

I conclude that the surviving two Co-Trustees were therefore obligated under the provisions of Paragraph IV to complete the transfer to Mr. Jones of all of the principal of the Trust.

I join in the opinion that the District Court did not err in granting summary judgment in favor of Ms. Koski.

JUSTICE GRAY

dissenting.

I respectfully dissent from the opinion of the majority.

The majority, having begun with the general rule that the trustor’s intent controls in the construction and interpretation of trust agreements, departs from this rule in performing its analysis. I cannot agree.

Here, the trustor established three separate and independent requirements necessary to effectuate a revocation: (1) a writing; (2) delivered to the co-trustees; and (3) acknowledged in the same manner of conveyance as real property and title to be recorded in the State of Montana. It is clear that a writing was made and that the attempted revocation of trust was recorded; thus, the first and third requirements set forth by the trustor to revoke the trust were met.

The majority concludes that the recordation equals delivery, thus merging two separate requirements into one; on this basis, the majority concludes that the second requirement also was met. Because the trustor’s intent to establish three separate requirements for an effective revocation is clear and one of those requirements was not met, the majority has departed from the “trustor’s intent” rule. It also has departed from the applicable Montana statute that a power of revocation must be strictly pursued. Section 72-23-502, MCA (since repealed, but specifically made controlling over trust instruments executed prior to October 1, 1989).

Furthermore, the majority’s reliance on Hackley and Carnahan to reach its result is flawed. As quoted by the majority, Hackley, 234 N.W. at 137, states that “[d]elivery is not essential to complete a revocation unless made so by the parties in the trust agreement.” (Emphasis added.) Here, delivery was specifically required in the trust agreement. Moreover, it was a stand-alone requirement unrelated to the separate recordation requirement.

It is also my view that Carnahan is inapposite here. The issue in Carnahan was whether certain actions concerning a grant deed constituted delivery under a statute specifically relating to constructive delivery of a deed. It did not interpret a trust agreement, any statute relating to trust agreements, or the general rules regarding trustor’s intent and strict construction of efforts at trust revocation. Therefore, it is inapplicable to the case before us.

I would reverse the District Court and hold that, the trustor’s stated intent not having been met, the attempted revocation was not effective.


source: Caselaw Access Project

author: JUSTICE GRAY

license: Public Domain

text:
    CAROL SAGAN, Plaintiff and Appellant, v. PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant and Respondent.
    No. 93-138.
    Submitted on Briefs July 1, 1993.
    Decided August 5, 1993.
    50 St.Rep. 902.
    259 Mont. 506.
    857 P.2d 719.

      For Plaintiff and Appellant: Robert J. Vermillion, Smith, Walsh, Clarke & Gregoire, Great Falls.
    For Defendant and Respondent: William D. Jacobsen and John D. Stephenson, Jr., Jardine, Stephenson, Blewett & Weaver, Great Falls.
   JUSTICE GRAY

delivered the Opinion of the Court.

In this action by the beneficiary of a life insurance policy against an insurer, we conclude that § 33-20-121(2), MCA, must be read into an insurance policy containing an otherwise valid suicide exclusion. Therefore, we affirm.

The facts of this case are not in dispute. Prudential Insurance Company of America (Prudential) issued a life insurance policy to Samuel Sagan on July 1, 1989, providing for payment of $50,000 in benefits upon his death. Samuel Sagan died on September 22,1990, as a result of suicide. Carol Sagan (Sagan) is Samuel Sagan’s widow and the named beneficiary under the Prudential life insurance policy.

Sagan submitted a claim for the policy benefits. Prudential denied the claim, relying on a suicide exclusion in the policy which provided that if the insured died by suicide within two years from the issue date, Prudential would pay out no more than the sum of the premiums paid. At the time it denied Sagan’s claim, Prudential tendered to her a check in the amount of $802.71, representing the sum of the premiums paid plus interest; Sagan refused the tendered check.

Sagan commenced this action against Prudential in the Eighth Judicial District Court, Cascade County, seeking the full $50,000 benefit under the policy. She alleged that the policy did not comply with § 33-20-121(2), MCA, which requires life insurance policies with suicide exclusions to provide for payment of an amount not less than the commissioner’s reserve value in the event of death under circumstances to which the suicide exclusion applies. She further alleged that compliance with the statute was not waived by the Montana Commissioner of Insurance and that the Commissioner did not specifically approve the nonconforming “sum of the premiums” provision in Prudential’s policy. Absent compliance, waiver or approval, Sagan asserted entitlement to the full $50,000 benefit on the basis that, pursuant to § 33-15-315, MCA, the policy was to be construed as though the suicide exclusion provision did not exist.

Both parties moved for summary judgment. They filed an Agreed Statement of Facts and agreed that there were no material facts in dispute.

The District Court determined that Prudential was entitled to summary judgment as a matter of law, granted Prudential’s motion, and entered judgment accordingly. Sagan appealed.

Sagan asserts a number of legal errors by the District Court. This case can be resolved, however, by addressing only her final argument: that the District Court erred in reading § 33-20-121(2), MCA, into the policy by operation of law. Our standard of review of a trial court’s conclusions of law is whether the conclusions are correct. Steer, Inc. v. Dep’t of Revenue (1990), 245 Mont. 470, 475, 803 P.2d 601, 603.

Section 33-20-121(l)(b)(v), MCA, expressly permits life insurance policies to exclude or restrict coverage in the event of a death resulting from suicide within two years of the date of issue of the policy. The Prudential policy at issue here contained such a suicide exclusion. Moreover, Samuel Sagan’s death as a result of suicide within two years after the issuance of the policy is not disputed. Thus, the suicide exclusion is applicable here.

Section 33-20-121(2), MCA, requires a policy containing an authorized suicide exclusion also to provide that, in the event of a death under the circumstances to which the exclusion applies, the insurer must pay an amount not less than that determined according to the Commissioner’s reserve valuation method. Prudential’s “return of premiums” language does not mirror the language of § 33-20-121(2), MCA; nor does it expressly guarantee payment of an amount not less than the reserve value amount. It is undisputed, however, that the amount Prudential tendered to Sagan exceeds the amount of payment required by utilizing the methodology contained in § 33-20-121(2), MCA.

The District Court determined that § 33-15-315, MCA, required that the Commissioner’s reserve value provision of § 33-20-121(2), MCA, be read into the Prudential policy. While Sagan agrees that § 33-15-315, MCA, is applicable, she argues that a proper application of the statute to the policy before us results in invalidating the entirety of the suicide exclusion rather than reading the reserve value provision into the policy. We cannot agree.

Section 33-15-315, MCA, provides in pertinent part:

Any insurance policy ... which contains any condition or provision not in compliance with the requirements of this code shall not be thereby rendered invalid but shall be construed and applied in accordance with such conditions and provisions as would have applied had such policy ... been in full compliance with this code.

The statute codifies general principles of insurance law contained in both case law and leading insurance authorities. As long ago as our decision in Lee v. Providence Washington Ins. Co. (1928), 82 Mont. 264, 276, 266 P. 640, 644, we concluded that the provisions of insurance statutes are to be read into an insurance policy as though written therein; our decisions on that question have remained consistent. See, e.g., First Sec. Bank of Bozeman v. Goddard (1979), 181 Mont. 407, 414, 593 P.2d 1040, 1044. Leading authorities in the field of insurance law agree:

Contracts of insurance ... are presumed to have been made with reference to the law of the land, including the statutory laws which are in force and are applicable, and such statutes ... enter into and become a part of the contract as much as if they were actually incorporated therein. Provisions of an insurance code are in the nature of special provisions pertaining to insurance contracts, which are superimposed upon those provisions of law which cover contracts generally.

1 Couch on Insurance 2d (Rev. ed) § 13:6. See also 13 Appleman, Insurance Law and Practice (1976 ed.) § 7382.

The role of the courts in construing a statute is to determine what is in terms or substance contained therein. Section 1-2-101, MCA. Our primary tool for ascertaining the legislature’s intent is the plain meaning of the words used. Dorn v. Bd. of Trust. of Billings Sch. Dist. (1983), 203 Mont. 136, 144, 661 P.2d 426, 430.

The legislative intent in enacting § 33-15-315, MCA, is clear from the words used. The plain meaning of § 33-15-315, MCA, is to give effect to insurance policies and provisions to the fullest extent possible by reading statutory provisions into them to achieve full compliance with the insurance code. Nothing in the plain language of the statute supports applying it to invalidate policy provisions.

Here, the policy contains a plain and clear suicide exclusion specifically permitted by § 33-20-121(l)(b)(v), MCA. Pursuant to that provision, both Samuel Sagan and Prudential contemplated an exclusion from coverage for death by suicide within two years. The policy also contemplates some payment to the beneficiary in the event of such a suicide. While the payment provided for in the policy in the event of a suicide arguably does not expressly comply with § 33-20-121(2), MCA, the parties clearly contemplated payment in an amount much reduced from the total benefit amount in the policy. Under these circumstances, we conclude that application of § 33-15-315, MCA, to the policy at issue mandates reading the provisions of § 33-20-121(2), MCA, into the policy. In this manner, the arguably nonconforming payment in the event of suicide provision does not render any portion of the policy invalid; instead, the § 33-20-121(2), MCA, provision is included in the policy so as to bring the entirety of the suicide exclusion and the policy itself into full compliance with Montana’s insurance code. This is the mandate of § 33-15-315, MCA.

Sagan argues that reading § 33-20-121(2), MCA, into the policy rather than invalidating the entire suicide exclusion is justified only if the insurance code is designed to protect insurers rather than insureds and their beneficiaries. She asserts in conclusory fashion that the legislature intended the insurance statutes in general and § 33-15-315, MCA, in particular, to protect insureds and not the insurance industry. In this regard, she cites several cases purporting to require a liberal construction of the statute.

Sagan’s arguments are flawed. As discussed above, § 33-15-315, MCA, requires no real interpretation; it is plain and clear on its face and is not in accord with the construction Sagan advances. To accept her argument that § 33-15-315, MCA, requires voiding a suicide exclusion expressly permitted by statute would contravene the plain language contained therein by invalidating rather than effectuating provisions clearly contemplated by the parties.

Nor does the plain language of the statute indicate that its purpose is to favor either party to an insurance policy; the statutory language is entirely neutral. Only where legislative intent cannot be determined from the content of the statute may we properly refer to legislative history. Dorn, 661 P.2d at 430.

Moreover, the cases relied on by Sagan to support her “liberal construction” theory are inapposite. Neither Attix v. Robinson (D. Mont. 1957), 155 F.Supp. 592, nor State ex rel. School, Etc. v. Board of County Com’rs, Etc. (1978), 180 Mont. 285, 590 P.2d 602, stands for the proposition that insurance statutes which are clear on their face should be “liberally construed.”

Attix was an action for refund of federal estate taxes involving the Technical Changes Act of 1953. The Act was remedial in nature and, being unable to ascertain its purpose from its plain language, the federal district court relied on the “general rule that relief or remedial provisions must be liberally construed to effectuate the objective sought.” 155 F.Supp. at 596. State ex rel. School, Etc. was a Subdivision and Platting Act case in which we were called upon to interpret such statutory language as “appropriate” and “whenever necessary;” we noted the Act’s stated purpose of protecting the public health, safety and general welfare and applied the principle of statutory construction that legislation enacted for such purposes should be liberally construed. 590 P.2d at 605. Neither case involved insurance statutes or unambiguous statutory language and, therefore, neither has any application to the case before us.

We hold that the District Court did not err in concluding that § 33-20-121(2), MCA, must be read into the policy at issue by operation of § 33-15-315, MCA.

Affirmed.

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


author: JUSTICE NELSON

text:
    THE STATE OF MONTANA, Plaintiff and Respondent, v. LESLIE ALLEN LUNSTAD, Defendant and Appellant.
    No. 93-027.
    Submitted on Briefs July 15, 1993.
    Decided August 10, 1993.
    50 St.Rep. 916.
    259 Mont. 512.
    857 P.2d 723.

      For Defendant and Appellant: William F. Hooks, Appellate Public Defender, Helena.
    For Plaintiff and Respondent: Joseph P. Mazurek, Attorney General, Barbara C. Harris, Assistant, Helena; Gary Ryder, Deputy County Attorney, Sidney.
   JUSTICE NELSON

delivered the Opinion of the Court.

This is an appeal from a jury verdict in the Seventh Judicial District Court convicting Defendant of felony sexual assault. We reverse and remand for a new trial.

One issue is dispositive of this appeal: Did the District Court err in admitting prior consistent statements of the alleged victim?

On November 4,1991, C.H., a minor, the alleged victim in this case, told her father that the Defendant, Leslie Lunstad (Mr. Lunstad), had touched her in a private place. Based on this allegation, Mr. Lunstad was charged by Information with felony sexual assault.

At the jury trial, C.H. testified that Mr. Lunstad asked permission to touch her. C.H. testified that she said “no”, but that Mr. Lunstad touched her anyway. C.H. stated that Mr. Lunstad told her not to report the incident to her parents and gave her two pennies. This incident allegedly occurred on November 4, 1991.

During the State’s case-in-chief, the State attempted to introduce C.H.’s prior consistent statements regarding her version of the events. The trial judge refused this evidence as inadmissible hearsay, stating that Mr. Lunstad had not implied that C.H. had subsequently fabricated her testimony, was improperly influenced, or had an improper motive.

During the Defendant’s case-in-chief, Mr. Lunstad testified that sometime during the week of October 27 to November 3,1991, he and C.H. were playing Nintendo in the family home. C.H. was seated on his lap and Mr. Lunstad had his arms on top of her legs, operating the Nintendo controller. Mr. Lunstad testified that he dropped the controller and, when he retrieved the device, he accidently touched C.H. in her crotch. A week later, on November 4, 1991, Mr. Lunstad testified that he was again playing Nintendo with C.H., at which time C.H. told Mr. Lunstad she would report the prior touch to her father if he would not give her a piggy back ride.

Both Mr. Lunstad and C.H. testified that they were both fully clothed during this incident and that only one touch occurred. In dispute was whether Mr. Lunstad purposely or accidently touched C.H.

On cross-examination of Mr. Lunstad, the State asked him:

Q: So are you saying [that C.H.], when she came before this jury, she lied?
A: Yes.
Q: And you’re saying that she came forward and lied about the fact that you offered her money not to tell her dad?
A: Yes.
Q: And you’re saying that she lied about the fact that you asked her if you could touch her private parts?
A: Yes.

After this testimony, the State requested permission to present rebuttal testimony in the form of the prior consistent statements made by C.H. This request was made pursuant to Rule 801(d)(1)(B), M.R.Evid., on the basis that Mr. Lunstad had called C.H.’s credibility into question. The State wished to introduce statements C.H. made to a police officer, including a tape recorded statement, and statements C.H. made to her counselor. The trial court allowed these statements as prior consistent statements to rebut charges of fabrication or motive.

On rebuttal, the police officer who took C.H.’s statement played a recording of that statement. This statement related C.H.’s version of the incident, and was essentially the same as her in-court testimony. The counselor did not testify as to C.H.’s truthfulness, but testified as follows:

Q: Okay. The question was, you did have an opportunity to sit through her [C.H.] testimony yesterday?
A. Yes, I did.
Q: And on how many occasions has she related to you her version of what’s taken place?
A: Approximately four times.
Q: Was there any significant factual differences between her testimony yesterday and the statements that she has given you?
A: No.

This evidence was presented on rebuttal to a jury on July 29 and 30,1992. The jury found Mr. Lunstad guilty of felony sexual assault. Mr. Lunstad was sentenced to ten years in prison on the assault charge and ten years in prison for being a persistent felony offender, all sentences to run consecutively. In addition, the trial judge designated Mr. Lunstad a dangerous offender and required him to complete Phase I and II of the sexual offender treatment program. From that verdict and sentence, Mr. Lunstad appeals.

Our standard of review relating to discretionary trial court rulings, such as the decision to allow certain evidence to be heard by the jury, is whether the trial judge abused his discretion in allowing the evidence. Steer, Inc. v. Dep’t. of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 604.

One issue is dispositive in this case: did the District Court err in admitting C.H.’s prior consistent statements?

Rule 801(d)(1)(B), M.R.Evid., states:

A statement is not hearsay if... [t]he declarant testifies at the trial or hearing and is subject to cross-examination concerning the statement, and the statement is (B) consistent with the declarant’s téstimony and is offered to rebut an express or implied charge against the declarant of subsequent fabrication, improper influence, or motive. ...

This rule only applies when the declarant’s in-court testimony has been impeached by another party’s allegations of subsequent fabrication, improper influence, or motive.

The sole basis for allowing C.H.’s prior consistent statements was the theory that, by agreeing with the State that C.H. was lying, Mr. Lunstad had charged her with fabrication. The District Court held that, when Mr. Lunstad agreed that C.H. was lying, he opened the door for C.H.’s prior consistent statements to be admitted. We disagree, and hold that the State cannot use this line of questioning to admit prior consistent statements of a witness.

In State v. Webb (1992), 252 Mont. 248, 828 P.2d 1351, the State asked the defendant during cross-examination: “In essence you are saying that [the informant] was lying?” The defendant answered, “That is correct.” Webb, 252 Mont. 248, 828 P.2d at 1356. The State contended that the defendant had attacked the informant’s character and was allowed to present character evidence under Rule 608, M.R.Evid.

On appeal, this Court approved other jurisdictions’ holdings that “neither contradictory evidence nor extensive cross-examination constitutes an attack upon a witness [’] character for truth and veracity.” Webb, 828 P.2d at 1356. In Webb, the State opened the door by directly asking the defendant if he believed the informant was lying. In commenting on the State’s position, this Court stated that the State cannot itself open the door for opinion testimony regarding the truthfulness of its own witness. Webb, 828 P2d at 1356. Although Webb involved Rule 608, as opposed to Rule 801, the analysis used in Webb applies in this case.

Here, the trial judge denied the State’s request to present prior consistent statements to the jury during the State’s case-in-chief. Thereafter, the State questioned Mr. Lunstad and asked him directly if he believed C.H. was lying. The State cannot put a defendant in this tenuous position and then introduce prior consistent statements to “rebut” the only answer that the State knows the defendant can give consistent with his defense. Here, the State itself opened the door by directly asking Mr. Lunstad if C.H. was lying, and then attempted to bolster C.H.’s credibility by the admission of the very prior consistent statements that the district judge had ruled inadmissible hearsay in the State’s case-in-chief. The State cannot use this type of cross-examination to get evidence admitted which it could not get admitted prior to its cross-examination. We hold that it was an abuse of discretion and reversible error to allow the rebuttal testimony, in the form of prior consistent statements, to be presented on these facts.

For the guidance of the District Court and counsel on retrial of this case, we also hold that the statements of C.H. were not admissible under Rule 801(d)(1)(B), M.R.Evid., because such statements were not made prior to the time C.H.’s alleged motive to fabricate arose. In this case, Mr. Lunstad claimed that C.H. threatened to tell her father about the touch if Mr. Lunstad would not give her a piggy back ride. The only possible motive to fabricate suggested by Mr. Lunstad was the fact that C.H. was angered at him for refusing her the piggy back ride. Therefore, any “motive” arose on November 4, 1991, the day C.H. allegedly made that statement to Mr. Lunstad. Any statements C.H. made after that date, including statements to her father (November 4, 1991), the police officer (November 5 and 6, 1991), and her counselor (January, 1992), could not be prior consistent statements, because they were made subsequent to the time C.H.’s alleged motive to fabricate arose. Therefore, C.H.’s statements were not admissible as prior consistent statements as contemplated by Rule 801(d)(1)(B), M.R.Evid., and the hearsay exclusion does not apply in this case.

In State v. Scheffelman (1992), 250 Mont. 334, 820 P.2d 1293, the prosecutor anticipated that the defendant would allege fabrication and motive, and addressed the same in her opening statement. However, in his opening statement, counsel for the defendant also stated the victim had lied. Scheffelman, 820 P.2d at 1296. During cross-examination, defense counsel challenged the victim’s testimony. He also alluded to the possibility that the victim had a motive to fabricate and implied she was subject to improper influence by the prosecutor. Scheffelman, 820 P.2d at 1296. The State was allowed to present the victim’s prior consistent statements.

On appeal, this Court held that a prior consistent statement was allowable if it was made before any motive to fabricate had arisen. However, if a defendant does not assert that the victim is subsequently fabricating her story, but claims, as in this case, she was lying all along, prior consistent statements are not admissible. Scheffelman, 820 P.2d at 1296. In Scheffelman, the Court held that, because the defendant alleged the victim was improperly influenced, no error was committed in allowing the prior consistent statements into evidence under Rule 801. Scheffelman, 820 P.2d at 1296.

In this case, however, defense counsel did not state in her opening statement that C.H. was a liar. Counsel did not challenge C.H.’s testimony on cross-examination, did not allude that C.H. was subject to improper influence by the prosecutor, and did not allege that she changed her version of the incident. Therefore, on its facts, Scheffelman is distinguishable from the case at bar.

Similarly, Mr. Lunstad did not conduct a general attack on the credibility of C.H. of the sort that justified the admission of prior consistent statements in State v. Medina (1990), 245 Mont. 25, 798 P.2d 1032.

Reversed and remanded for a new trial.

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


text:
    JOHN KESTELL, Plaintiff and Respondent, v. HERITAGE HEALTH CARE CORPORATION, d/b/a GLACIER VIEW HOSPITAL, a Washington corporation, STERLING CORPORATION, d/b/a GLACIER VIEW HOSPITAL, Defendants and Appellants.
    No. 93-147.
    Submitted on Briefs June 1, 1993.
    Decided August 10, 1993.
    50 St.Rep. 919.
    259 Mont. 518.
    858 P.2d 3.

      For Defendants and Appellants: Daniel W. Hileman, Murray & Kaufman, Kalispell.
    For Plaintiff and Respondent: Elizabeth A. Best, Great Falls.
   JUSTICE GRAY

delivered the Opinion of the Court.

Heritage Health Care Corporation and its owner, Sterling Corporation, doing business as Glacier View Hospital in Kalispell, Montana, appeal from judgment on a jury verdict in the Eleventh Judicial District Court, Flathead County. The jury found that the appellants (collectively, the hospital) wrongfully discharged the respondent John Kestell (Kestell). We affirm.

The following issues are raised on appeal:

1. Did the District Court err in denying the hospital’s motions for directed verdict and judgment notwithstanding the verdict on Kestell’s wrongful discharge claim?

2. Did the District Court err in allowing a proposed release into evidence?

3. Did the District Court err in instructing the jury?

4. Were the damages awarded by the jury excessive as a matter of law?

In September 1989, Jerry Wetherbee, a Sterling Corporation officer, and Brent Porges, administrator of Glacier View Hospital, offered Kestell a position as director of the hospital’s chemical dependency unit. He had been working as an inpatient supervisor at Rimrock Foundation in Billings, Montana, but had accepted a new position with a similar facility in Roseburg, Oregon. Porges and Wetherbee persuaded Kestell to change his plans and come to Kalispell by increasing their salary offer and promising ninety days notice of any termination during Kestell’s first year of employment.

Kestell testified that he was hired to increase the number of patients in the chemical dependency unit, in part by expanding its services to include addictive disorders other than chemical dependency. He began work at Glacier View Hospital on September 25,1989, under an employment agreement that established his base pay at $3,583.34 per month and provided for quarterly bonuses based on the number of paying patients in the chemical dependency unit. The agreement also included a reciprocal ninety-day notice provision.

Porges evaluated Kestell’s performance in March 1990, at the end of his six-month probationary period. In his report Porges praised Kestell’s marketing efforts and his commitment to his patients and to quality treatment, and he noted approvingly that Kestell had “opened up the patient environment” by allowing chemical dependency patients the freedom to mix with psychiatric patients. Although he indicated that Kestell “needed improvement” in several areas, Porges did not rate his performance as unsatisfactory in any of the twelve areas listed.

Two months later, on June 12, 1990, Wetherbee and Porges told Kestell that his position had been eliminated and that another job would be found for him. At a staff meeting the same day, Kestell learned that the hospital had entered into an agreement with Health Management Corporation (HMC), which provided that HMC would assume fall management responsibility for the chemical dependency unit. Kestell was told that he would be replaced as director by HMC’s employee and, in fact, HMC’s employee, Mike DuHoux, began work as director of the chemical dependency unit on or about July 1,1990.

Soon after June 12, 1990, Kestell was moved to a “group room” in the psychiatric wing of the hospital so that his former office in the administrative wing could be remodeled for DuHoux. Kestell testified that he was given a desk but no work assignments or responsibilities, and that he was expected to leave the room when group therapy sessions were scheduled.

Wetherbee suggested that Kestell apply for one of the counseling jobs vacated when HMC took over the chemical dependency unit, but Kestell refused. He testified that his salary as director of the unit had been approximately $48,000 per year, including bonuses, while the counselor position would have paid approximately $25,000; that he had had no recent experience in daily counseling; and that the offer was a “humiliation.”

Wetherbee also offered Kestell an opportunity to apply for a marketing job with Sterling Corporation, but Kestell testified that he could not afford to consider this because it would have meant relocating to Idaho. He already owned houses in Billings and Kalispell and was unwilling to move his children a second time in the same year.

On June 29,1990, Porges sent Kestell a formal termination letter, referring to their employment agreement and stating that:

[Y]ou will be relieved of your duties as [chemical dependency] program director as of July 1,1990. As we agreed, your base salary will remain the same for 90 days. ... Though you should consider this letter as your 90 day notice per agreement, we will continue to honor our agreement to work with you, the new Director and the Management Consultant Team, to negotiate an acceptable position with the [chemical dependency] program.

In response, Kestell wrote to Porges, reminding him that his performance as director had been an asset to the hospital and stating that he had been offered a lower position with less responsibility and respect. He warned the hospital that if it did not reinstate him, he would pursue legal remedies under the Montana Wrongful Discharge from Employment Act.

Kestell continued to spend eight horns at his desk in the psychiatric unit every day, five days a week, until July 18,1990. On that day Porges showed him a letter from the hospital’s lawyer, dated July 13, 1990, which expressed the opinion that Kestell had not been wrongfully discharged because his position had been eliminated. Kestell testified that he read this letter as an expression of bad faith on the part of the hospital administration and immediately left the premises. The hospital continued to pay his base salary through September 1990.

Kestell soon found a marketing position with the Rocky Mountain Treatment Center in Great Falls, but he could not afford to move and was forced to commute from Kalispell on a daily or weekly basis. He was laid off eight months later and subsequently opened a private practice in Kalispell. At the time of the trial in December 1992, he was making approximately $1,200 a month in his private practice and $600 a month as executive director of a low-income counseling facility in Kalispell.

Kestell filed a wrongful discharge complaint in November 1990, seeking award of wages and fringe benefits for four years from the date of discharge. The hospital admitted in its answer that Kestell had been relieved of his duties as director of the chemical dependency unit but denied that he had been discharged, alleging instead that Kestell’s position had been eliminated pursuant to the hospital’s contract with HMC.

Kestell amended his complaint in July 1991 to join HMC and its two shareholder-directors individually, alleging that HMC or its directors had tortiously interfered with his employment contract; intentionally or negligently inflicted severe emotional distress; and acted with actual fraud or actual malice. HMC and its directors immediately moved to dismiss Kestell’s claims against them.

The hospital moved for summary judgment in August 1991. It argued that its employment agreement with Kestell ended when it contracted with HMC for management of the chemical dependency unit, and that no discharge had occurred because Kestell resigned before the ninety-day notice period had expired.

The District Court denied both motions. It determined that genuine issues of material fact existed as to whether Kestell quit; whether his position was eliminated; whether DuHoux served in the same capacity; and whether the hospital had a legitimate business purpose in contracting with HMC. It also determined that the individual liability of HMC’s directors was a genuine issue of material fact because HMC had not filed its articles of incorporation when its directors signed the contract with the hospital.

The jury trial began on November 30, 1992. After three days of testimony, the jury returned a special verdict, finding that the hospital had wrongfully discharged Kestell and awarding damages in the amount of $123,600. The jury also found that HMC and its directors did not tortiously interfere with Kestell’s employment contract or intentionally inflict emotional distress. The hospital appealed. Because Kestell did not cross-appeal, HMC and its directors are not involved in this appeal.

I

Did the District Court err in denying the hospital’s motions for directed verdict and judgment notwithstanding the verdict on Kestell’s wrongful discharge claim?

The hospital moved for a directed verdict during the trial and, later, for judgment notwithstanding the verdict. The District Court denied both motions on the ground that the evidence was sufficient for the jury to find that Kestell was wrongfully discharged.

In considering a motion for a directed verdict or for judgment notwithstanding the verdict, the district court must view the evidence in a light most favorable to the non-moving party. A motion for directed verdict must be denied if there is any evidence that warrants submission to the jury. Wilkerson v. School District No. 15, Glacier County (1985), 216 Mont. 203, 211, 700 P.2d 617, 622. Amotion for judgment notwithstanding the verdict must be denied if it appears that the non-moving party can recover upon any view of the evidence, including legitimate inferences to be drawn from it. Larson v. K-Mart Corp. (1990), 241 Mont. 428, 433, 787 P.2d 361, 364.

The hospital contends, on appeal, that the evidence did not warrant submitting the wrongful discharge issue to the jury. It supports this contention by arguing first, that Kestell was not discharged at all, and second, that if he was discharged, it was for legitimate business reasons. We will address each of these contentions separately.

Constructive Discharge

To prevail on a wrongful discharge from employment claim, an employee must establish that he or she was discharged and that the discharge was wrongful. Montana Wrongful Discharge from Employment Act, §§ 39-2-901, et seq., MCA. Under § 39-2-903(2), MCA, “discharge” includes resignation, layoff, job elimination and constructive discharge, which is defined in § 39-2-903(1), MCA, as

the voluntary termination of employment by an employee because of a situation created .by an act or omission of the employer which an objective, reasonable person would find so intolerable that voluntary termination is the only reasonable alternative.

Kestell has proceeded on a constructive discharge theory from the outset. The hospital argues that he was neither actually nor constructively discharged, because he was told when his position was eliminated that he would be given a job within the organization. From the hospital’s point of view, Kestell simply quit, without waiting for the hospital to negotiate an acceptable position for him.

The hospital contends that constructive discharge cannot apply here because this Court has recognized it only in cases where the plaintiff belonged to a protected class or had been criminally prosecuted by the employer. In neither of the two cases relied on to support this contention, however, did we hold that constructive discharge was limited to the factual scenario in the case. Snell v. Montana-Dakota Utilities Co. (1982), 198 Mont. 56, 643 P.2d 841; Niles v. Big Sky Eyewear (1989), 236 Mont. 455, 771 P.2d 114.

Moreover, the Wrongful Discharge Act clearly controls the case now before us. Nothing in its definition of constructive discharge, quoted above, indicates that the legislature intended to limit its application to protected classes or to instances in which the employee was criminally prosecuted.

In Snell and Niles, both pre-Act cases, we defined constructive discharge essentially as it is now defined in the Act. We held in those cases, as we hold here, that to determine whether an employee has been constructively discharged, the fact finder must decide whether the employer has rendered working conditions so intolerable that resignation is the only reasonable alternative. Niles, 771 P.2d at 118. A determination of constructive discharge “depends on the totality of circumstances, and must be supported by more than the employee’s subjective judgment that working conditions are intolerable.” Snell, 643 P.2d at 846.

Here, credible evidence in the record shows that Kestell, a highly qualified professional and experienced supervisor, was abruptly removed from his post, isolated in a different wing of the hospital, and deprived of meaningful activity. He testified that other employees began to treat him as a “non-person,” looking the other way when he approached and refusing to acknowledge his presence. It is undisputed that he was not offered a comparable position, but only an opportunity to apply for a job that he had previously supervised.

We conclude that the record, viewed in a light most favorable to Kestell, contains sufficient evidence for the jury to determine that the hospital rendered Kestell’s working conditions intolerable. The District Court, therefore, did not err in submitting the constructive discharge question to the jury.

Legitimate Business Reasons

Under the Wrongful Discharge Act, discharge of a post-probation employee such as Kestell is wrongful if it is not for good cause. The Act defines “good cause” as “reasonable job-related grounds for dismissal based on a failure to satisfactorily perform job duties ... or other legitimate business reason.” Section 39-2-903(5), MCA. Testimony by Wetherbee and the hospital personnel manager established that Kestell was not terminated for unsatisfactory performance. The issue, therefore, is whether Kestell’s termination was justified by a legitimate business reason.

In Buck v. Billings Montana Chevrolet, Inc. (1991), 248 Mont. 276, 281-82, 811 P.2d 537, 540, we defined “legitimate business reason” as “a reason that is neither false, whimsical, arbitrary or capricious, and it must have some logical relationship to the needs of the business.” We applied this definition to a wrongful discharge action brought by the former general manager of an automobile dealership. When the dealership was sold, the buyer replaced the plaintiff with one of its own long-term employees. The plaintiff did not assert that the stated reasons for replacing him were false, merely that his dismissal was not justified under the Act.

We upheld summary judgment for the defendants in Buck because the plaintiff failed to demonstrate that the new owner did not have a legitimate business reason for replacing him. Under the facts before us, the new owner’s decision to install one of its own people as manager was not false, whimsical, arbitrary or capricious, and it had a logical relation to the needs of the business. To conclude otherwise, we said, “would be to force a new owner of a business to retain someone it did not know or perhaps even trust to manage a large dollar investment.” Buck, 811 P.2d at 541.

Similarly, we upheld summary judgment for the employer in Cecil v. Cardinal Drilling Co. (1990), 244 Mont. 405, 797 P.2d 232, because there was no genuine dispute over the fact that the plaintiff was terminated for a legitimate business reason, that is, the declining price of crude oil. Our rationale was that employers should not be foreclosed from engaging in legitimate reductions in force necessary to maintain the company’s economic vitality. Cecil, 797 P.2d at 234.

It is well-settled in our pre-Act cases that courts should not intrude in the day-to-day employment decisions of business owners. See, e.g., Coombs v. Gamer Shoe Co. (1989), 239 Mont. 20, 778 P.2d 885; Hobbs v. Pacific Hide and Fur Depot (1989), 236 Mont. 503, 771 P.2d 125. An employer’s legitimate right to exercise discretion over whom it will employ must be balanced, however, against the employee’s equally legitimate right to secure employment. Buck, 811 P.2d at 540. The balance should favor an employee who presents evidence, and not mere speculation or denial, upon which a jury could determine that the reasons given for his termination were false, arbitrary or capricious, and unrelated to the needs of the business. Cecil, 797 P.2d at 235.

Here, the hospital terminated Kestell’s employment to accommodate its contract with HMC, not to reduce its staff in response to declining revenues. Wetherbee testified that the primary reason for entering the contract with HMC was that it had a “substantial likelihood of improving the performance of the hospital.” The hospital offers this need to improve performance as its legitimate business reason for eliminating Kestell’s position.

The evidence demonstrates, however, that the hospital did not eliminate Kestell’s position, but merely replaced Kestell with DuHoux. First, testimony at the trial established that DuHoux’s job description was identical to Kestell’s and that he received the same base pay. Second, HMC’s two shareholder-directors, Ken Anderson and John Brekke, testified that neither of them supervised DuHoux’s work at the hospital or evaluated the performance of any staff in the chemical dependency unit. DuHoux himself testified that he had a “dual responsibility” to HMC and the hospital administrator. Finally, DuHoux’s personnel records and those of his staff at the hospital were kept by the hospital administration, and his business card identified him as an employee of the hospital. HMC wrote DuHoux’s paychecks, but Sterling Corporation issued bimonthly checks to HMC for the exact amount of DuHoux’s salary until June 30, 1991, when HMC and the hospital terminated their agreement and DuHoux became a hospital employee.

The hospital offered no evidence to show that replacing Kestell with DuHoux was critical to its goal of enlarging its clientele. In fact, the evidence does not suggest any significant correlation between this replacement and the hospital’s business needs.

DuHoux’s qualifications were inferior to Kestell’s, particularly in view of the hospital’s November 1989 job description, which stated that an applicant with a graduate degree in counseling or human services would be preferred. DuHoux’s formal education beyond a high school diploma consisted of thirty hours as a “generalist” in a junior college and a nine-month chemical dependency counseling program at the University of Minnesota; Kestell had a master’s degree in counseling and psychology.

DuHoux had no experience as an inpatient supervisor before he replaced Kestell as director of the inpatient chemical dependency unit at Glacier View Hospital. He had worked three years as clinical director of a small treatment facility owned by John Brekke, which provided “adventure training” for chemically dependent male adolescents. DuHoux had worked there for three years and had fifteen years’ experience as a chemical dependency counselor elsewhere. Kestell had worked several years directing alcohol and drug programs for small agencies in Wisconsin and had five years’ experience as an inpatient supervisor at Rimrock Foundation in Billings.

HMC shareholder-director Ken Anderson testified that HMC preferred DuHoux for the job, despite his lack of formal qualifications, because his “philosophical approach” was more congenial than Kestell’s, and because replacing Kestell with DuHoux would “make Glacier View Hospital consistent with treatment in the valley.” This apparently was a reference to the fact that Anderson and Brekke were both operating chemical dependency treatment facilities in the Flathead valley. According to Anderson, the most important philosophical difference between himself and Kestell was that Kestell believed in treating other addictions simultaneously with chemical dependency, which he and Brekke considered unethical. No evidence was offered to show that the hospital reasonably could have expected HMC’s philosophical approach to attract more patients, and therefore more revenue, than had Kestell’s approach.

In short, the record shows that the less qualified DuHoux simply assumed Kestell’s position in the hospital, and that contrary to the hospital’s allegations, the position was not eliminated or even substantially changed.

The legitimate business reasons that justified termination in Cecil and Buck are absent here. Unlike the employer in Cecil, the hospital terminated Kestell’s employment to accommodate its new contract with HMC, not to further a legitimate reduction in staff in response to declining revenues. In Buck, a new owner determined that it was necessary to put a trusted employee of long standing in charge of the operation; here, no new owner existed and the hospital replaced Kestell, whose performance had proved satisfactory, with an unknown individual who was arguably less qualified and less experienced.

In short, Kestell presented evidence demonstrating that the hospital’s ostensible reasons for replacing him were false, arbitrary or capricious and unrelated to the needs of the business, and, therefore, that they did not constitute legitimate business reasons under § 39-2-903(5), MCA. We hold that the District Court did not err in denying the hospital’s motions for directed verdict and judgment notwithstanding the verdict on Kestell’s wrongful discharge claim.

II

Did the District Court err in allowing a proposed release into evidence?

The hospital contends that a release form presented to Kestell in August 1990 was inadmissible under Rule 408, M.R.Evid. Fuller, the hospital’s business manager, asked Kestell to sign the document before he received his first severance paycheck. In pertinent part, it reads as follows:

With reference to the August [actually September] 20th, 1989 agreement, I hereby give you notice of my decision to terminate prior to the 90 day notice period.
The terms of my separation are that the hospital agrees to pay me 3 months salary as severance based on the date I was given notice, July 1,1990. Severance will be paid in three monthly installments. The first installment is payable on signing of this release. ...
I agree to release the hospital from any and all other claims related to salary, bonuses and benefits....

Rule 408, M.R.Evid., provides that evidence of offering or accepting valuable consideration in attempting to compromise a disputed claim is not admissible to prove liability for or invalidity of the claim or its amount. At the time Kestell was asked to sign this document, however, his claim for severance pay was not disputed; both parties had signed the September 1989 agreement providing for severance pay. Further, the document was not offered for the purposes prohibited by Rule 408, but rather to show that the hospital did not intend to find Kestell another position.

We conclude that the release form is not barred by Rule 408, M.R.Evid. and that the District Court did not abuse its discretion in admitting it into evidence.

III

Did the District Court err in instructing the jury?

At Kestell’s request, and over the hospital’s objections, the District Court instructed the jury on tortious interference with contract, infliction of emotional distress, and piercing the corporate veil. On appeal, the hospital argues that the type of damages available and the duty to mitigate damages under these theories are substantially different from the damages and duty to mitigate under the wrongful discharge claim. Therefore, the hospital contends, Instructions 14 through 31 confused the jury and jeopardized its right to a fair trial.

The disputed jury instructions clearly refer to Kestell’s claims against HMC and its directors, not to his wrongful discharge claim against the hospital. Instruction 14, for example, begins:

I will now instruct you on the law relating to [Kestell’s] claim for damages as a result of the claims against Defendants Anderson, Brekke and Health Management Corporation for interference with his employment contract and infliction of emotional distress.

Kestell joined Anderson, Brekke and HMC as defendants without objection by the hospital; he clearly was entitled to jury instructions covering his claims against them. The special verdict form asked the jury to determine the hospital’s liability separately from that of HMC and its directors, and to determine both liability and damages separately on each of Kestell’s claims against HMC and its directors.

The jury discharged its duty, assessing damages against the hospital only for lost wages and benefits on Kestefl’s wrongful discharge claim. It found no liability on the part of HMC and its directors as to any of Kestell’s claims against them. Nothing in the jury’s response to the special verdict form suggests that it was in any way confused by the instructions. We conclude that the District Court did not err in giving Instructions 14 through 31.

IV

Were the damages awarded by the jury excessive as a matter of law?

The Wrongful Discharge from Employment Act provides that a successful plaintiff may be awarded lost wages and fringe benefits for a period not to exceed four years from the date of discharge, plus interest. Interim earnings, “including amounts the employee could have earned with reasonable diligence,” must be deducted from the amount awarded for lost wages. Section 39-2-905(1), MCA. The jury was instructed on the exact language of the statute.

The hospital contends that the jury’s award of $123,600 in damages was excessive because Kestell had, “within days,” accepted a job at Rocky Mountain Treatment Center for an annual salary of $36,000 and subsequently “decided to leave Rocky Mountain Treatment Center and enter private practice.” The hospital infers that the jury must have ignored the instruction to deduct amounts Kestell could have earned with reasonable diligence.

On the contrary, the jury clearly took into account Kestell’s testimony on interim earnings; otherwise, the award would have been higher. Kestell’s undisputed testimony was that his annual earnings at the hospital, including bonuses and fringe benefits, would have totalled $57,600. He testified that Rocky Mountain Treatment Center paid him $3,000 per month until the end of 1990, then reduced his hours and paid him approximately $2,500 per month until April 1991, when he was laid off. During his first year in private practice, Kestell testified, he made “two or three thousand dollars, something like that,” and by the time of the trial in December 1992, approximately $1,800 a month. He expected to make $25,000 annually by the end of 1993. Presumably the jury took this testimony into account, for it reduced the maximum award allowed by the Act, i.e., $230,400, or $57,600 for each of four years, and awarded only $123,600.

The Act provides that the trier of fact has discretion to determine the amount of lost wages and benefits, not to exceed four years from date of discharge. Weber v. State (1992), 253 Mont. 148, 153, 831 P.2d 1359, 1362. Here, the hospital has presented no evidence that the jury abused its discretion. We conclude that the damage award was not excessive as a matter of law.

Affirmed.

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


author: ME. JUSTICE MILBURN

text:
    STATE, Respondent, v. FORD, Appellant.
    (No. 1,648. )
    (Submitted October 4, 1901.
    Decided October 14, 1901. )

      Criminal Law — Appeal — Verdict Review. Conflicting Rviden.ee-

    diet in a criminal prosecution, based on conflicting evidence, will not be disturbed on appeal.

      Appeal from District Court, Lewis & Clarice County; Henry C. Smith, Judge.

    Augustus W. Foed wasi convicted of rape, and be appeals.
    Affirmed.

      Mr. J. X. Bramble, for Appellant.

      Mr. James Donovan, Attorney General, and Mr. Odell W. McConnell, for tbe State.
   ME. JUSTICE MILBURN

delivered tbe opinion of tbe court.

Tbis is am appeal from tbe judgment, and from tbe order denying a motion for a new trial. Tbe defendant was convicted of rape upon bis daughter, who, as alleged, was less than 16 years old at tbe time of tbe commission of tbe alleged crime.

Tbe defendant relies in bis brief upon two assignments: First, that “the jury received evidence out of court inadmissible in court. and, second, that “the evidence is insufficient to sustain tbe verdict.’’ Counsel depends upon bis own affidavits in support of tbe first assignment. There is nothing to indicate that tbe affidavits were used upon tbe bearing of any motion for a new trial, and they do not contain anything to show that the jury did as suggested by tbe assignment.

As to tbe insufficiency of tbe evidence, it is enough to say that there was a substantial conflict of tbe evidence, — that of tbe prosecution being positive and sufficient to support a verdict if the jury believed tbe witnesses' for tbe state, as it must have done. As so often held, tbe question of credibility is one for tbe jury, and not for tbis court.

These being tbe only errors suggested, tbe order and tbe judgment are affirmed. ■ ■ •

Affirmed.


author: ME. GRIEF JUSTICE BEANTLY Me. Justice Pigott: Me. Justice MilbueN :

text:
    STATE, Respondent, v. HOWELL, Appellant.
    (No. 1,580. )
    (Submitted October 2, 1901.
    Decided October 21, 1901.)

      Criminal Law — Homicide — Appeal — Instructions—Presumption of Innocence — Juror s Individual Duty.
    1. Disputed questions of fact and tbe credibility of witnesses will not be considered on appeal.
    2. Refusal co submit special instructions, correctly stating tbe law, is not erroneous, where tbe charge given clearly and correctly states the phase of the law embodied in the special request.
    3. The defendant in a crimial case is always entitled to have the Jury take into consideration the presumption of innocence which the law throws about him; it is therefore the duty of the court to submit proper instructions upon this subject as a substantive part of- the law.
    3. The refusal of the court in a criminal case to charge that each juror should act upon his own judgment, and should not surrender his own conviction, unless convinced, and that while he should discuss the evidence, and be open to conviction by argument, he should not surrender his convictions merely because the majority were against' him, was not error. (Mn. Justice Milbukn dissenting.)

      Appeal from, District Court, Fergus County; Dudley Du Bose, Judge.

      ■ MiltoN Oliver Howell was convicted of murder, and be appeals.
    Affirmed,

      Messrs. Oort & Worden, for Appellant.

      Mr. James Donovan, Attorney General, for tbe State.
   ME. GRIEF JUSTICE BEANTLY

delivered tbe opinion of tbe court.

Tbe defendant, M. O. Howell, was convicted of murder of tbe first degree, and condemned to death.' Thereafter be moved for a new trial upon tbe grounds that tbe verdict was contrary to tbe evidence; that-tbe defendant-was prejudiced by certain •rulings of the-court, upon tbe admission and exclusion of evi-deuce; and that the court omitted to instruct the jury upon matter’s of law which arose in the case and were material to the defense. The 'defendant has appealed to this court from an order denying him a new trial, and submits the question whether the action of the court upon the first and second grounds of the motion was correct.

1. [We shall not undertake to state and analyze the evidence submitted at the trial. We have examined it carefully, however, and find that defendant’s contention that the verdict is contrary to the evidence cannot be sustained. While we find a substantial conflict in the statements of some of the witnesses, particularly as between those of the defendant himself and of certain of those introduced by the state, touching the circumstances of the homicide, the credibility and weight to be given to these conflicting statements was a question exclusively within the province of "the jury, and we have no' power to disturb their finding thereon. “This court cannot try the case d& novo, and thus invade the province of the trial court, by passing upon disputed questions of fact and the credibility of witnesses.” (State v. Hurst, 23 Mont. 484, 59 Pac. 911; State v. Allen, 23 Mont. 118, 57 Pac. 725.)

2. Counsel for defendant prepared and requested the court ■tb submit'to the jury two special instructions embodying the principle that in a criminal case the defendánt is presumed to be innocent until he is proven guilty, and that this presumption can be rebutted and’ overturned only by evidence establishing every element of the crime charged against him beyond a reasonable doubt. The court refused to submit these instructions ,on the ground that they were embodied, in substance, in the general charge given to the jury. Special instructions were also requested, in substance, that each juror should act upon his own judgment; that he should not surrender his deliberate, -conscientious convictions, unless he was convinced; and that, ■while he should discuss the evidence with his fellows in a spirit ■of fairness, being open toi conviction by reasonable argument upon '’consideration of all the evidence, under the law given by the court, he should not surrender his convictions merely because a majority were against him, in order to prevent a mistrial. These instructions were also refused. Counsel contends that the court was in error in both instances.

; The defendant in a criminal case is always entitled to have the jury tahe into consideration the presumption of innocence which the law throws about him. It is therefore the duty of the court to submit proper instructions upon this subject as a substantive part of the law. This presumption comes to the aid of the defendant at every stage of the case, and is finally rebutted and overturned only by evidence establishing every element of the crime charged to the satisfaction of the jury beyond a reasonable doubt. It does not therefore follow, however, that the trial court commits error in refusing to submit special instructions requested by the defendant, even though they were correct, provided the charge given fairly and clearly states the law applicable to the case, including the phases of it embodied in the special request.

The defendant in this case sought to justify the homieide on the ground of self-defense. The charge given by the court,' though very brief, was sufficient to meet every requirement. It clearly, defined and distinguished murder of the first and second degrees and manslaughter, calling special attention to the various elements necessary to constitute each offense. It also' gave the statutory definition of justifiable homicide, with a clear statement of the law of self-defense. The jury were then told that they must determine from the whole of the evidence whether the alleged homicide was murder of the first or second degree or manslaughter, or was justifiable on the ground of self-defense, and that they could not find the defendant guilty of any offense until they were convinced of his guilt beyond a reasonable doubt upon the whole of the evidence. They were' further instructed upon the law of reasonable doubt, and in this connection were told that the defendant was presumed tct be innocent until proven guilty beyond a reasonable doubt; that the burden was upon the state to establish beyond a reasonable doubt-every element of tbe crime charged; that if they found-the defendant guilty, of murder, or of manslaughter, in fixing the degree of his guilt they must give him the benefit of all reasonable doubt as between the greater or lesser offense, and find him guilty of the lesser; and they must acquit him entirely if from the whole of the evidence they had any reasonable doubt as to whether the hilling Was justifiable homicide. The court, having already correctly instructed the jury upon the subject of th¿ special'requests, was not required to repeat instructions already given, merely because they Were put in the form of separate paragraphs and specially requested. (State v. Bowser, 21 Mont. 133, 53 Pac. 179.)

Nor was.it error to refuse the instruction touching the duty, of the individual jurors, .although they embodied, a correct state-, ment of the law. The propriety of giving such an. instruction, was considered in State v. Hurst, supra. We adhere to the doctrine stated in that case. Of course, each juror must act upon his- own convictions.- He must not surrender them merely because- others of the jury have reached -a different conclusion-upon the evidence, though he may be aided by his fellow jurors-in arriving at the truth. ' If in this particular ease the court was in error in refusing to submit the instruction requested, it' must necessarily follow that a court should instruct the "jury as to their individual duties in all cases when requested, or else we must conclude that it was error in the court to refuse to submit the instruction requested in this case merely because counsel for defendant-was of the opinion that the jury required it. As was said in State v. Hamilton, 57 Iowa, 596, 11 N. W. 5: “A jury need not be advised- of so pimple a proposition., The usual method of instructing upon the measure of proof required in criminal cases-is sufficient.” Furthermore,' each juror was sworn at the beginning of the trial to- well and truly, try the issue,- and a true verdict render according to the evidence. - - ■ >' .

The order of the district court denying a new trial was correct, and must be affirmed.

Affirmed.

Me. Justice Pigott:

I concur.

Me. Justice MilbueN :

I dissent. I am not satisfied with the views expressed in the opinion of the Chief Justice as to the refused instruction upon the individual duty of each juror in respect of the matter of reasonable doubt. I do not consider’ the Hurst Case (23 Mont. 484, 59 Pac. 911), as conclusive, nor the Hamilton Case (57 Iowa, 596, 11 N. W. 5), cited with approval in the Hurst Case, as well considered, or supported at all by the sole authority to which it refers as deciding an alleged similar case. (State v. Rorabacker, 19 Iowa, 154.) The latter case was' one in which the refused instruction in effect declared that, one juror having a reasonable doubt, the twelve should acquit; whereas, the instruction in 57 Iowa, 11. N. W., was somewhat similar to that in the Hurst Case. In the Hurst Case- the instruction asked for is far from being the same as the following, which is one of those'asked for and refused in the case at bar, to-wit: “You are instructed that your verdict must be unanimous, and that each juror should decide for himself upon his oath from the law as given to you by the court and the evidence in the case, as to what his verdict should be. No juror should yield his deliberate, conscientious convictions as to the guilt or innocence of .the defendant, either at the instance of the majority- of the jury for the sake of unanimity, or to prevent a mistrial, but you are further instructed that nothing in this instruction is to be taken' to mean that you shall not fully and fairly discuss among yourselves all the evidence and facts surrounding the case,- as disclosed by the evidence, or that any of your number shall not be open to conviction by fair, honest argument, by any member or members of the jury, founded upon the evidence- produced on the trial and the law as given you by the court.” . '. -

It is conceded by-all that this instruction correctly states the law, and was proper to be given whether asked or not-; but was its refusal error ? I think it was. There is not in any part of the charge to the jury any statement or reference to the separate duty and responsibility of each juror. The jury was instructed as a body. Nowhere, having been sworn to try the case upon the evidence, are they told that- they shall take the law from the court and obey it, and nowhere are they told what the law is as to consulting with their fellows, or as to how to act upon their individual opinions, separately, after such consultation. It is a matter- of common knowledge that many jurors surrender to others, and da it without being convinced to a moral certainty by the evidence under the law. Men who have a reasonable doubt as to guilt in any degree will often concur in a verdict if those who have no doubt of guilt in the highest degree will agree to a verdict in a lesser degree Men. thus and in other ways often surrender their views against conscience, and all judges know it. It is the duty of the juror to consult with his-fellows and to consider the views of the other jurors, but, ultimately, in his own mind and of his own virtue, to determine what is his duty and to declare it, acting upon his own oath and his own judgment This he should be told plainly if the defendant so- pray. (People v. Dole, 122 Cal. 486, 55 Pac. 581, 68 Am. St Rep. 50; State v. Witt, 34 Kan. 488, 8 Pac. 169; Castle v. State, 75 Ind. 146.)

It is known’to all who have to do with them that jurors, for sake of unanimity, agree to compromise verdicts in ' criminal cases; and in Connecticut (State v. Smith, 49 Conn. 376), and in Massachusetts (Commonwealth v. Tuey, 8 Cush. 1), the courts thought it the duty of the jurors to consult and to- mutually concede in their deliberations ; and in the Massachusetts case, with the approval of the supreme court, it was emphatically urged to such an extent and in such language that, in my opinion, the average juror would be convinced that he would be excusable in thinking that he had no right to think his own thoughts if his views were opposed to; those of eleven others, “equally honest, and equally intelligent.” To use sncb a whip suggests the necessity of a curb in the shape of an instruction to1 the effect appearing in the fair and correct prayer of the defendant refused in the case at bar. Is it not begging the question to assume that a juror’s fellows are “equally honest and equally intelligent?”

I think the case should be reversed for error in refusing so correct an instruction, which, in my opinion, is needed in every criminal case.


author: MR. JUSTICE PIGOTT

text:
    STATE, Respondent, v. JOHNSON, Appellant.
    (No. 1,632.)
    (Submitted October 2, 1901.
    Decided October 21, 1901.)

      Criminal Law — Robbery—Definition—Instructions.
    1. under Penal Code, Sec. 390, defining robbery as tbe felonious taking of personal property in the possession of another from his person or immediate presence, and against his will, “accomplished” by means of force or fear, an instruction defining robbery in the same terms, except using the word “accompanied,” is reversible error.
    2. An erroneous instruction is presumptively prejudicial.

      Appeal from District Court, Silver Bow County; William Clancy, Judge.

    George Johnson was convicted of robbery, and he appeals.
    Reversed.

      Mr. B. S. Thresher, for Appellant.

      Mr. James Don-ovan, Attorney General, for the State.
   MR. JUSTICE PIGOTT

delivered the opinion of the court

The defendant has appealed from a judgment of conviction for the crime of robbery, specifying as the only error the giving by the district court of the following instruction: “Robbery is the felonious taking of personal property from the possession of another, from his person or immediate presence, and against his will, accompanied by means of force or fear.”

The attorney general insists that this instruction states all the elements necessary to constitute robbery, which, by Section 390 of the Penal Code, is defined to' be “the felonious taking of personal property in the possession of another, from his person or immediate presence, and against his will, accomplished by means of force or fear.” He argues that the definition given hy the instruction is the substantial equivalent of the statutory definition. We are unable to agree with him. Between “accomplished” and “accompanied” a clear distinction in meaning exists; for example, thunder often accompanies lightning, but thunder is not the means or agency whereby the physical results of lightning are accomplished. Again, the means by which an act could have been accomplished may have accompanied the doing of the act without being the efficient means or agency— that is, without accomplishing it. A deadly weapon or a squad of armed soldiers is a means of force; so either may inspire fear ánd in that sense be the means of fear; but it cannot correctly be said, as matter of law, that because such means of force or fear accompanied an act the act was accomplished thereby. There can be no robbery unless the taking is accomplished, that is, effected, by means of force or fear. The agency — the means —whereby the felonious taking is effected, that is, accomplished, must be force or fear, otherwise robbery is not committed., .Many felonious asportations from the person or immediate presence of another are accompanied, that is, attended, bv means of force and (perhaps) fear withooxt being accomplished by means of either. A. feloniously and against B.’s will takes from the person of B. a chattel in his possession, the' taking being accompanied, but not accomplished, by means of force. Although A. may be guilty of larceny, he is not guilty of robbery. The means of force and fear may accompany — that is, be present at, go with, or be associated with — a felonious,taking and yet not be the means, or agency, by which the taking is accomplished — - that is, effected, consummated, completed, or executed. Tbe instruction would not be bettered by eliminating tbe words “means ofit would then read: “Robbery is tbe felonious taking of personal property from tbe possession of another, from bis person or immediate presence, and against bis will, accompanied by force or fear'.” Tbe instruction would still be fatally bad, for tbe taking may be accompanied by force and fear and yet not. be accomplished by either.

Whether tbe instruction declares that, in robbery, tbe taking-need not be from tbe person or immediate presence of another but is sufficient if it be from tbe possession of another, we do not decida . As the question whether tbe instruction .is open to this objection is not likely to arise on a new trial, we express no opinion thereon.

Tbe defendant was entitled to a- correct instruction defining tbe crime of which be- stood charged.1 An essential element was ■ omitted in tbe instruction given. This was erroneous and, presumptively, prejudicial to tbe defendant.

Tbe judgment is reversed, and tbe cause is remanded for a new trial.

Reversed and remanded.