author: JUSTICE TRIEWEILER

text:
    RODNEY WOLFE, Claimant, Respondent, and Cross-Appellant, v. BOYD E. WEBB Employer, and STATE COMPENSATION MUTUAL INSURANCE FUND, Defendant and Appellant.
    No. 90-389.
    Submitted on briefs May 10, 1991.
    Decided Jan. 2, 1992.
    49 St.Rep. 1.
    251 Mont. 217.
    824 P.2d 240.

      For Appellant/Cross-Respondent: William J. Mattix, Crowley, Haughey, Hanson, Toole & Dietrich, Billings.
    For Respondent/Cross-Appellant: Lloyd E. Hartford, Attorney at Law, Billings.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

Claimant Rodney Wolfe filed his petition in the Workers’ Compensation Court asking that court to reopen his case, which had been settled with defendant State Compensation Insurance Fund on March 8, 1983. Claimant alleged that at the time of the prior settlement the parties were mutually mistaken about material facts concerning claimant’s physical condition.

The Honorable Nat Allen was appointed by the Workers’ Compensation Court to serve as the hearing examiner, and this case was tried before the hearing examiner on April 11 and 12, 1990. Following a trial and the submission of written arguments by the parties, the Workers’ Compensation Court adopted the hearing examiner’s recommendation and entered judgment for claimant which set aside the parties’ earlier settlement agreement, reinstated temporary total disability benefits, and awarded attorney fees to claimant. The court refused to impose a statutory penalty on defendant in addition to the benefits which were awarded. From that judgment, defendant appeals, and claimant cross-appeals. We affirm the judgment of the Workers’ Compensation Court.

Defendant raises the following issues on appeal:

1. Did the Montana Workers’ Compensation Court have jurisdiction to reopen the full and final compromise settlement which had been agreed upon by the parties?

2. Did the express language in the settlement agreement preclude the Workers’ Compensation Court from setting it aside?

3. Did the Workers’ Compensation Court abuse its discretion and commit reversible error when it adopted the findings of fact, conclusions of law, and judgment proposed by claimant after making minor changes of its own?

4. Was there substantial evidence to support the Workers’ Compensation Court’s determination that a mutual mistake of fact existed at the time the parties entered into their settlement agreement?

5. Was there substantial evidence to support the Workers’ Compensation Court’s award of temporary total disability benefits retroactive to October 1, 1985?

6. Was claimant entitled to an award of costs and attorney fees?

For his cross-appeal, claimant raises the following issue:

Did the Workers’ Compensation Court err by failing to impose a statutory 20 percent penalty on defendant in addition to the benefits that were awarded?

FACTUAL BACKGROUND

Claimant was injured on March 28,1980, while employed by Boyd E. Webb who was insured against claims for workers’ compensation benefits by defendant Montana State Compensation Insurance Fund.

Mr. Webb was involved in the business of installing oil and gas lines and irrigation pipe. Claimant was employed by Webb as a backhoe operator and laborer.

On the date of his injury, claimant was working in a six foot ditch and installing pipe when the sides of the ditch caved in and buried him up to his neck. As a result of this accident, he sustained crushing injuries across his upper body, including a fracture of his left clavicle and dislocation of his right clavicle where it formed a joint with his sternum. He also reported pain in one or more of his shoulders.

Claimant was initially treated for his injuries in Powell Hospital in Powell, Wyoming, but was eventually referred to D. R. Huard, M.D., an orthopedic surgeon in Billings, Montana. Dr. Huard treated claimant for approximately 16 months. During that time he performed two surgical procedures. In the first procedure, he grafted bone at the location of the fracture to the left clavicle because that fracture had failed to properly unite. In a second procedure, he resected, or cut away, the end of the right clavicle where it had previously formed a joint with the sternum. He did so in order to alleviate significant discomfort that claimant continued to experience as a result of the dislocation of that joint.

During the course of Dr. Huard’s treatment, his records indicate that claimant also complained of pain in the area of his right shoulder. However, that was not his primary complaint and no treatment was rendered for that complaint at that time.

On May 11, 1981, Dr. Huard released claimant to return to work.

After returning to work, claimant continued to experience significant pain due to his injuries and was referred for further treatment to Peter V. Teal, M.D., a second orthopedic surgeon. Dr. Teal advised him that his pain could be lessened by resection of the entire right clavicle, but that since the clavicle provided stability to the shoulder, a significant cosmetic deformity would also result. For that reason, claimant postponed further surgery, but by January 1982, when he could no longer stand the pain, Dr. Teal removed two-thirds of the remaining right clavicle.

By May 1982, claimant had returned to work on a self-employed basis doing oilfield salvage work. In early 1983, he went back to work for another employer. However, the physical nature of that work caused him a substantial amount of pain and discomfort in his right arm and shoulder. He went to the bank and borrowed $13,500 which he used to purchase a pickup truck, trailer, tools, and equipment with which he could become self-employed in the oil pipe salvage business.

By that time, he had received a physical impairment rating from Dr. Teal equal to 10 percent of his right upper extremity. Although he was still in pain, he was unaware of any other injuries which had resulted from his industrial accident in 1980.

In order to repay the money which he had borrowed to invest in equipment for self-employment, claimant entered into settlement discussions with William Visser, a claims supervisor for appellant. Visser offered, and claimant, who was unrepresented at the time, agreed to accept, $7000 in full settlement of his claim for any future disability benefits. On March 8, 1983, the Division of Workers’ Compensation approved the full and final compromise settlement agreement which had been signed by the parties. The written agreement included the following provision:

“The claimant understands that by entering into a full and final compromise settlement, both the named insurer and the claimant agree to assume the risk that the condition of the claimant, as indicated by reasonable investigation to date, may be other than it appears, or it may change in the future.”

Claimant testified that following settlement of his claim he continued to experience right shoulder problems. Toward the end of 1984 he moved to Jerome, Idaho where he took a job for Rocky Mountain Industries as the manager of their pipe yard. However, by October 1,1985, he could no longer continue to perform that job due to right shoulder pain and he returned to Montana where he lived at the time of trial.

After returning to Montana, claimant worked sporadically as a farm laborer, but this work also aggravated his right shoulder. He returned to Dr. Teal who, based upon an arthroscopic examination, found a defect in the cartilaginous rim of the glenoid cavity. The glenoid cavity, with the head of the humerus, form the shoulder joint. On April 17,1987, Dr. Teal readmitted claimant to the hospital where he performed surgery to repair and reattach the cartilaginous rim to the glenoid cavity and hopefully prevent further subluxation of the right shoulder. Claimant continued to experience difficulties with his shoulder following surgery, and by November 24, 1987, Dr. Teal’s records indicate that he was inquiring about possible replacement of his shoulder with a mechanical joint.

A further arthroscopic procedure was done to repair damage in the claimant’s right shoulder in February 1988. On May 17, 1988, Dr. Teal increased claimant’s impairment rating from 10 percent of his right upper extremity to 15 percent. He cautioned claimant against returning to any form of heavy labor and suggested that he be rehabilitated so that he could return to the job market and perform lighter duties.

Other orthopedic surgeons who have also examined claimant since Dr. Teal’s last surgical procedure concur in the opinion that claimant will never be able to return to moderate or heavy work, and that there is no additional treatment which would be of further assistance to him.

Neither claimant nor his treating physician were aware, in 1983, of the additional damage to claimant’s right shoulder which resulted in the 1987 surgery, additional physical impairment, and further restrictions on claimant’s physical activities.

William Visser testified that neither was he aware of the possibility of a detached glenoid rim in claimant’s right shoulder at the time that he settled with claimant, but that if he had known about the condition he probably would not have entered into the settlement agreement.

Based on these facts, the Workers’ Compensation Court concluded that there had been a mutual mistake of material fact sufficient to justify setting aside the agreement entered into between the parties on March 9, 1983. The court found that claimant was temporarily totally disabled, and had been since he terminated his work in Jerome, Idaho on October 1,1985. Temporary total disability benefits were awarded retroactive to that date.

Based on its decision in favor of claimant, the Workers’ Compensation Court awarded attorney fees. However, the court refused to impose an additional 20 percent penalty, concluding that appellant was not unreasonable when it rejected claimant’s request to set aside the earlier agreement.

I

Did the Montana Workers’ Compensation Court have jurisdiction to set aside the full and final compromise settlement which had been agreed upon by the parties?

Appellant argues that the substantive law in effect at the time of claimant’s injury establishes his rights under the Workers’ Compensation Act, and that §§ 39-71-204, -2908, and -2909, MCA (1985), prohibited the Workers’ Compensation Court from rescinding full and final compromise settlements.

Appellant further contends that this Court’s prior decisions rescinded full and final compromise settlement agreements because of mutual mistakes of fact, but affirmed that the Workers’ Compensation Court did not have the authority to do so. Appellant relies on Kienas v. Peterson (1980), 191 Mont. 325, 624 P.2d 1; Sollie v. Peavey Co. (1984), 212 Mont. 197, 686 P.2d 920; Hutchinson v. Pierce Packing Co. (1985), 219 Mont. 18, 710 P.2d 64; Bowen v. Anaconda Co. (1986), 220 Mont. 185, 714 P.2d 142; Weldele v. Medley Development (1987), 227 Mont. 257, 738 P.2d 1281; and Kimes v. Charlie’s Family Dining (1988), 233 Mont 175, 759 P.2d 986.

The seminal case on the subject of reopening workers’ compensation settlements was Kienas. In that case, the claimant entered into a full and final settlement agreement based upon diagnosis of a back injury which did not take into account the possibility that the injury had aggravated claimant’s cerebral palsy. Later medical information indicated that claimant’s back injury may have in fact aggravated his underlying neurological condition. The Workers’ Compensation Court refused to set aside the settlement agreement, and we reversed. We held that:

“The full and final compromise settlement entered into by the parties is a contract. The law of contracts applies in construing and determining the validity and enforceability of the settlement agreement.”

Kienas, 624 P.2d at 2. We held that under § 28-2-102, MCA, consent of the parties was a prerequisite to a valid contract and that pursuant to § 28-2-401, MCA:

“ ‘(1) An apparent consent is not real or free when obtained through:
‘“(e) mistake.
“‘(2) Consent is deemed to have been obtained through one of the causes mentioned in subsection (1) only when it would not have been given had such cause not existed.”

Section 28-2-408, MCA:

“‘Mistake may be either of fact or law.”

Section 28-2-409, MCA:

‘“Mistake of fact is a mistake not caused by the neglect of a legal duty on the part of the person making the mistake and consisting in:
“‘(1) an unconscious ignorance or forgetfulness of a fact, past or present material to the contract; or
“‘(2) belief in the present existence of a thing material to the contract which does not exist or in the past existence of such a thing which has not existed.’ ”

Kienas, 624 P.2d at 3 (emphasis in original).

We held in Kienas that because neither party to that contract was aware of the exact nature or extent of the claimant’s injury when the agreement was entered into, the parties were laboring under a material mistake of fact which required that the agreement be set aside.

We did not discuss statutory limitations on the Workers’ Compensation Court’s authority to set aside settlement agreements because that issue was not presented in Kienas and it was not the Workers’ Compensation Court which set aside the agreement. What was clear from the Kienas decision is that settlement agreements for workers’ compensation benefits, like other agreements, are subject to the law of contracts, and that a Montana court which is not otherwise limited by statute has the authority to set those contracts aside based upon a mutual mistake regarding the nature and extent of a claimant’s injuries.

In Sollie, we affirmed the Workers’ Compensation Court’s refusal to reopen a full and final compromise settlement because we concluded that the parties were not laboring under a material mistake as to the nature and extent of the claimant’s injuries. However, in dictum which did not appear to be necessary to this Court’s decision, we stated that:

“It is also important to consider Section 39-71-204, MCA, which limits the power of the Workers’ Compensation Court to amend a compromise settlement:
“ ‘Except as provided in 39-71-2908, the division or the workers’ compensation judge shall not have the power to rescind, alter, or amend any order approving a full and final compromise settlement of compensation.’
“Section 39-71-2908, MCA allows the Workers’ Compensation judge to disapprove an order allowing full and final compromise settlement within 10 days of the judge’s receipt of an order. This Court has held in several cases that these statutes preclude reopening of Workers’ Compensation settlements.”

Sollie, 686 P.2d at 924.

In Weldele, where the claimant was allowed by the Workers’ Compensation Court to reopen a case that had been settled on a compromise basis because of a mistake regarding the nature and extent of his physical injury, we affirmed the trial court’s authority to do so, in spite of the prohibition in § 39-71-204(2), MCA (1985), because:

“ ‘[Cjonsent to the contract is lacking if it is entered into through mutual mistake of a material fact by the parties.’ ” Kienas, 38 St.Rep. at 321. It is well settled that if there is no consent, there is no contract.”

Weldele, 738 P.2d at 1283. Two members of this Court dissented from that decision based upon the statutory prohibitions which are relied upon by the defendant in this case. The dissenters distinguished Kienas for the reason that the Workers’ Compensation Court had not set aside the agreement in that case. It was set aside by this Court under the theory that “[o]ur appellate power is not limited to Section 39-71-204 not 39-71-2909, MCA.” Weldele, 738 P.2d at 1284 (Gulbrandson, J., dissenting) (quoting Kienas v. Peterson (1981), 38 St.Rep. 320, 321 (op. on reh’g)). The dissenters felt that the Workers’ Compensation Court’s decision in Weldele should be reversed based upon language found in our opinion in Sollie, which was discussed previously.

Finally, in Kimes we again affirmed a Workers’ Compensation Court decision setting aside a full and final compromise settlement agreement based upon a mistake of fact regarding the nature and extent of claimant’s physical injury. In response to the dissent’s argument that the Workers’ Compensation Court lacked jurisdiction to set aside the agreement, we stated:

“While the dissent argues that the Workers’ Compensation Court does not have statutory authority to set aside this full and final compromise agreement, the parties did not raise that argument. Further, this Court is not so limited where there has been mutual mistake. We conclude that the uncontradicted medical evidence establishes a material mistake of fact relating to both the nature and extent of Mr. Kimes’s injury. We hold that the full and final settlement entered in this case may be reopened on the basis of this material mistake of fact.”

Kimes, 579 P.2d at 988.

The Hutchinson and Bowen decisions are distinguishable from this case based on their facts and are not relevant to our discussion.

What we have then are a series of decisions by this Court that agreements settling claims for workers’ compensation benefits are subject to contract law and can be set aside, at least by this Court, based upon a mutual mistake of fact regarding the nature and extent of the claimant’s injury. We also had in effect, at the time of claimant’s injury, statutes which appellant argues procedurally barred the Workers’ Compensation Court, as opposed to this Court, from setting aside full and final compromise settlement agreements. Section 39-71-204(2), MCA (1985), provided in relevant part that:

“Except as provided in 39-71-2908, the division or the workers’ compensation judge shall not have the power to rescind, alter, or amend any order approving a full and final compromise settlement of compensation.”

Section 39-71-2908, MCA, is not applicable. Section 39-71-2909, MCA (1985), provided that:

“[T]he judge may not change any final settlement or award of compensation more than 4 years after the settlement has been approved by the division or any order approving a full and final compromise settlement of compensation.”

When this case was tried in April 1990, however, both of the sections relied upon by the defendant had been amended to remove any limitation on the Workers’ Compensation Court’s authority to set aside full and final compromise settlement agreements. Section 39-71-204, MCA (1987), now makes no reference to any limitation on the authority of the court to set aside such agreements, and § 39-71-2909, MCA (1987), simply provides as follows:

“The judge may, upon the petition of a claimant or an insurer that the disability of the claimant has changed, review, diminish, or increase, in accordance with the law on benefits as set forth in chapter 71 of this title, any benefits previously awarded by the judge.”

We have previously held that compromise settlement agreements can be set aside based upon contract law. Whether the decision to set aside that agreement is made in this Court or the Workers’ Compensation Court is merely a procedural difference and does not effect the substantive rights of either party. Therefore, the amendment to the workers’ compensation statutes which eliminated any restriction on that court’s authority to review and rescind compromise settlement agreements was a change in the procedural law. We have previously held that procedural rules in effect at the time that a case proceeds to trial are the rules that are to be applied to the resolution of that dispute. State Comp. Ins. Fund v. Sky Country Inc. (1989), 239 Mont. 376, 379, 780 P.2d 1135, 1137; Weiss v. State (1986), 219 Mont. 447, 449, 712 P.2d 1315, 1316.

We conclude that at the time of the trial in this case, there was no statutory prohibition on the Workers’ Compensation Court’s authority to set aside compromise settlement agreements, and that therefore, pursuant to § 39-71-2905, MCA, the Workers’ Compensation Court had jurisdiction to decide this dispute since it related to benefits provided for by the Workers’ Compensation Act.

II

Did the express language in the settlement agreement preclude the Workers’ Compensation Court from setting aside that agreement?

The defendant contends that the following language found in its contract with the claimant prohibits setting that agreement aside based upon a mutual mistake about the claimant’s physical condition.

“The claimant understands that by entering into a full and final compromise settlement both the named insurer and the claimant agree to assume the risk that the condition of the claimant, as indicated by reasonable investigation to date, may be other than it appears, or it may change in the future.”

However, as previously noted, we held in Kienas that “[t]he law of contracts applies in construing and determining the validity and enforceability of the settlement agreement.” Kienas, 624 P.2d at 2.

The law of contracts in Montana, as it relates to the formation of a valid and enforceable contract, is set forth in Title 28, ch. 2, of the Montana Code Annotated. Section 28-2-102, MCA, requires that to be enforceable the parties must give their consent to a contract. Section 28-2-301, MCA, requires that consent must be freely given; and § 28-2-401, MCA, provides that consent cannot be freely given when it is based upon mistake. Section 28-2-409, MCA, requires that before a contract is voidable based upon mistake of fact, the mistake must be material; and we have previously held that a mistake about the nature or extent of the claimant’s physical condition is a “material” mistake of fact when applied to a workers’ compensation settlement agreement. See Kienas, 624 P.2d at 3.

In order to enforce the aforementioned provision in the appellant’s settlement agreement, we would have to ignore the public policy of the State of Montana as set forth in the above statutes and decisions of this Court. Any contractual provision which would require for its enforcement that we do that is “unlawful” according to the following provisions of § 28-2-701, MCA, which state:

“What is unlawful. That is not lawful which is:

“(l)contrary to an express provision of law;
“(2)contrary to the policy of express law, though not expressly prohibited; or
“(3) otherwise contrary to good morals.”

According to § 28-2-707, MCA, any provision in a contract which is unlawful is void.

Whether or not there was a mutual mistake was a question of fact to be decided by the Workers’ Compensation Court. The Workers’ Compensation Court’s finding that the parties were mistaken about a material fact after considering the language inserted into the contract by the State Fund was supported by substantial evidence.

For these reasons, we hold that the language of the settlement agreement relied upon by the appellant did not preclude the Workers’ Compensation Court from setting aside that agreement.

Ill

Did the Workers’ Compensation Court abuse its discretion and commit reversible error when it substantially adopted the findings of fact, conclusions of law, and judgment proposed by the claimant?

Appellant argues that the Workers’ Compensation Court committed reversible error by substantially adopting the proposed Findings, Conclusions, and Judgment of the claimant. Appellant relies on prior decisions of this Court such as Sawyer-Adecor Int’l., Inc. v. Anglin (1982), 198 Mont. 440, 646 P.2d 1194, in which we expressed our disapproval of adopting verbatim the prevailing party’s proposed findings of fact and conclusions of law. However, we have approved the verbatim adoption of findings and conclusions where they are comprehensive and detailed and supported by the evidence. Pipinich v. Battershell (1988), 232 Mont. 507, 759 P.2d 148. In that case we noted:

“However, Montana law allows verbatim adoption of findings and conclusions where they are comprehensive and detailed, supported by the evidence before the court, and are not clearly erroneous.” Olson v. McQueary (1984), [212 Mont. 173,] 687 P.2d 712, 715, 41 St.Rep. 1669; R.L.S. v. Barkhoff (1983), 207 Mont. 199, 674 P.2d 1082, 1085 Pipinich, 759 P.2d at 150.

Furthermore, since Sawyer-Adecor was decided, Rule 52(a) M.R.Civ.P, was amended in 1984 to provide:

“The court may require any party to submit proposed findings of fact and conclusions of law for the court’s consideration and the court may adopt any such proposed findings or conclusions so long as they are supported by the evidence and law of the case.”

While it is true that pursuant to § 39-71-2903, MCA, the Workers’ Compensation Court is governed by the Montana Administrative Procedure Act, rather than the Montana Rules of Civil Procedure, there is nothing in the Administrative Procedure Act, nor in the rules of the Workers’ Compensation Court, which would prohibit the verbatim adoption of the prevailing party’s proposed findings, conclusions, and judgment. In that event, we have previously stated that:

“The Workers’ Compensation Court, while not governed by the Rules of Civil Procedure, may be guided by them, and to the extent that reference to those rules lies within the discretion the court may exercise under § 2.52.224, A.R.M. [now 24.5.349, ARM], such reference is acceptable.”

Moen v. Peter Kiewit & Sons Co. (1982), 201 Mont. 425, 434, 655 P.2d 482, 486.

Upon review of the record in this case and the trial court’s findings and conclusions, we hold that the Workers’ Compensation Court did not err in substantially adopting claimant’s proposed Findings, Conclusions, and Judgment.

IV

Was there substantial evidence to support the Workers’ Compensation Court’s determination that a mutual mistake of fact existed at the time the parties entered into their settlement agreement?

Appellant argues that to find a mutual mistake the trial court had to find that the cartilaginous rim of claimant’s right glenoid cavity was detached at the time the settlement agreement was entered into, and that it was detached as a result of claimant’s work related accident that occurred in 1980. Appellant contends that there was insufficient medical evidence to establish these facts and therefore, the necessary mistake of a material fact was not proven. The scope of our review of factual findings made in the Workers’ Compensation Court is limited. The well-settled standard of review in cases appealed from the Workers’ Compensation Court is stated in Nielsen v. Beaver Pond, Inc. (1983), 203 Mont. 339, 661 P.2d 47:

‘ “ ‘Our function in reviewing a decision of the Workers’ Compensation Court is to determine whether there is substantial evidence to support the findings and conclusions of that court. We cannot substitute our judgment for that of the trial court as to the weight of evidence on questions of fact. Where there is substantial evidence to support the findings of the Workers’ Compensation Court, this Court cannot overturn the decision. Steffes v. 93 Leasing Co., Inc. (U.S.F.&G.) (1978), 177 Mont. 83, 86, 87, 580 P.2d 440, 452.’ [Pinion v. H.C. Smith Co. (1980), [190 Mont. 103,]] 619 P.2d at [167] 168.” [37 St.Rep. 1355, 1357]; Novak v. Montgomery Ward and Co. (1981), Mont., [195 Mont. 219, 222] 638 P.2d 390, 392, 38 St.Rep. 1803; Viets v. Sweet Grass County (1978), 178 Mont. 337, 583 P.2d 1070, 1071, 1072.’

Nielsen, 661 P.2d at 49.

In defining substantial evidence, we stated in State Highway Commission v. Arms (1974), 163 Mont. 487, 518 P.2d 35, that:

“The evidence may be inherently weak and still be deemed substantial, and one witness may be sufficient to establish the preponderance of a case.” Batchoff v. Craney, 119 Mont. 157, 172 P.2d 308.

Arms, 518 P.2d at 37.

Our review then is necessarily limited to whether the testimony of one qualified and credible witness established that claimant’s labrum or cartilaginous rim of his right glenoid cavity was injured at the time of his settlement agreement with appellant. Appellant contends that Dr. Teal, the only medical witness who testified in this case, was unable to express an opinion. However, our review of the record requires a contrary conclusion.

Dr. Teal gave the following answers in response to the following questions:

“Q. Alright. Now, would you be able to give an opinion as to whether or not, absent any other trauma to that shoulder, that the subluxation and the detached glenoid was likely the result of the injury sustained in his industrial accident of 1980?
“A. I think, first of all, that there was an injury that led to this condition, almost certainly. Which is to say trauma. There was some trauma that led to this condition of recurrent subluxation. And if your question to me, as I think it is, states in the absence of any other trauma is it my opinion that this cave-in trauma produced the injury, then I’d have to say yes. If there was no other trauma, then this must have been it.
“Q. Okay. Now, is there any other injuries that you are aware of that involves the right shoulder that we have not discussed this morning?
“A. No.”

Claimant clearly and unequivocally testified that he sustained no trauma to his right shoulder either before or after his industrial injury that occurred on March 28, 1980. This testimony, in combination with the above testimony of his treating physician, provided substantial evidence for the trial court’s finding that claimant’s injury to his right shoulder was caused by his industrial accident, that the parties were unaware of its existence at the time the settlement agreement was entered into, and that the existence of this condition was material to a determination of the disability benefits to which claimant was entitled.

We conclude that there was substantial evidence of a mutual mistake of fact and that the trial court’s finding in that regard should be affirmed.

V

Was there substantial evidence to support the Workers’ Compensation Court’s award of temporary total disability benefits retroactive to October 1, 1985?

Claimant testified that due to the extreme pain in his right shoulder he had to terminate his employment in Idaho on October 1, 1985. He returned to Montana where he worked sporadically as a farm laborer between then and his surgery in April 1987. However, these activities were also limited due to the pain in his shoulder, and it was because of the continuing pain that further surgery was performed. There was no evidence that claimant worked regularly or earned any significant income after his return from Idaho.

The medical reports from the orthopedic specialists who examined claimant were unanimous in their conclusion that he was precluded from doing the types of farm work, construction work, and oilfield work which had been his traditional source of employment and that following his most recent surgery he should be rehabilitated for lighter duty work.

Based upon the intermittent work that claimant admitted performing after his return from Idaho, appellant argues that the trial court erred by concluding that claimant was temporarily totally disabled during that period of time. However, appellant’s position is not consistent with our prior decisions. In Jensen v. Zook Bros. Const. Co. (1978), 178 Mont. 59, 582 P.2d 1191, claimant sustained a crushing injury to his left hand while employed as a construction worker. The defendant appealed from a Workers’ Compensation Court finding that the claimant was permanently totally disabled. The basis for its appeal was that claimant had been able to do odd jobs since his injury and therefore, could not be totally disabled. In that case, the claimant testified that he had done “odd jobs for friends and relatives, such as back tagging cattle, driving a Cat, haying and other odd jobs. He also testified that he had difficulty performing these jobs and he could not perform them for any length of time.” Jensen, 582 P.2d at 1193. The testimony of the claimant in that case was strikingly similar to the testimony of the claimant in this case. In spite of that testimony, we concluded as follows:

‘We hold that this evidence is sufficient to support the finding of the Workers’ Compensation Court that claimant is permanently and totally disabled despite the fact that he can and has done various odd jobs ... .
“Because claimant can perform a few odd jobs for short periods of time does not preclude a finding that claimant is totally and permanently disabled. This is especially true where, as here, the evidence shows that the claimant must work with a substantial degree of pain.”

Jensen, 582 P.2d at 1193.

The medical opinions in this case establish that claimant is no longer capable of returning to his former occupations and that rehabilitation is necessary. There was no qualified evidence offered by appellant that claimant was at any time subsequent to October 1, 1985, capable of returning to regular employment.

For these reasons, and based upon the foregoing authority, we hold that the evidence is sufficient to support a finding that claimant is temporarily totally disabled, and has been since October 1, 1985.

VI

Was the claimant entitled to an award of costs and attorney fees?

Appellant’s argument that claimant was not entitled to an award of costs and attorney fees pursuant to § 39-71-611, MCA, was based upon its contention that claimant was not entitled to reopen his claim and receive further benefits. However, since we have affirmed the trial court’s award of benefits to claimant, we conclude that he is also entitled to an award of reasonable costs and attorney fees pursuant to § 39-71-611, MCA.

CROSS-APPEAL

Did the Workers’ Compensation Court err by failing to impose a statutory 20 percent penalty on appellant in addition to the benefits that were awarded?

Section 39-71-2907, MCA (1985), provided that:

“When payment of compensation has been unreasonably delayed or refused by an insurer, either prior or subsequent to the issuance of an order by the workers’ compensation judge granting a claimant compensation benefits, the full amount of the compensation benefits due a claimant, between the time compensation benefits were delayed or refused and the date of the order granting a claimant compensation benefits, may be increased by the workers’ compensation judge by 20%.”

In this case, the trial court adopted claimant’s proposed Finding of Fact No. 61 which stated, in part, that:

“Also, the Defendant failed to initiate a good faith investigation to ascertain if the March 28,1980, industrial accident could have caused or resulted in the glenoid rim becoming detached from the labrum. The fact that Defendant conducted a review of the file and thereafter concluded that reopening could not be allowed simply because the Division had approved the settlement, in absence of Defendant contacting the treating physicians, does not constitute a good faith investigation as contemplated by statute or case law. Defendant’s refusal to reopen the claim and its denial of the claim for additional benefits was unreasonable.”

For his cross-appeal, claimant contends that this finding is inconsistent with the court’s conclusion of law that claimant is not entitled to the 20 percent statutory penalty.

The trial court concluded that because appellant incurred medical expense to send claimant a considerable distance to a highly qualified specialist it should not be penalized.

Where the trial court has arrived at a finding or conclusion which is supported by substantial evidence, we will not reverse the lower court, even though the finding or conclusion may have been arrived at for the wrong reason. Phillips v. City of Billings (1988), 233 Mont. 249, 252, 758 P.2d 772, 774. In this case, we conclude that there was justification for the lower court’s refusal to impose the statutory penalty, even though appellant did fail to properly investigate and determine whether it was mistaken about the nature of claimant’s injury at the time of the agreement.

In addition to the issue of whether or not there was a mistake of material fact, appellant felt it was justified in rejecting claimant’s request based upon the language in its written agreement with claimant. Enforceability of such a contract provision had not previously been ruled upon by this Court. Therefore, we hold that appellant’s rebanee on that contract language was not unreasonable, as required by § 39-71-2907, MCA.

For these reasons, we affirm the judgment of the Workers’ Compensation Court.

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

       The claimant’s proposals were not adopted in their entirety. The hearing examiner rejected claimant’s proposed Conclusion that claimant was entitled to assessment of a 20 percent statutory penalty based upon the unreasonable refusal of appellant to reopen his case.


source: Caselaw Access Project

author: JUSTICE McDONOUGH

license: Public Domain

text:
    THE MONTANA DEPARTMENT OF STATE LANDS, Plaintiff and Appellant, v. JERRY D. ARMSTRONG, et al., Defendants, Respondents and Cross-Appellants.
    No. 91-337.
    Submitted on briefs Nov. 8, 1991.
    Decided Jan. 7, 1992.
    49 St.Rep. 10.
    251 Mont. 235.
    824 P.2d 255.

      For Appellant: Tommy H. Butler, Dept, of State Lands, Helena.

      For Respondent: W. H. Bellingham, Moulton, Bellingham, Longo & Mather (Tom Brown, Inc., et al.), Billings; Craig D. Martinson, Veeder & Broeder (Maguire Oil Co.), Billings; Gregory Paul Johnson (Benjamin Minerals), Billings; Kemp Wilson, Crowley Law Firm (Tenneco Oil Co.), Billings; Kenneth R. Neill, Larsen & Neill, Great Falls; Loren J. O’Toole, O’Toole & Hunt, Plentywood.
   JUSTICE McDONOUGH

delivered the Opinion of the Court.

Montana Department of State Lands appeals from an order of the Seventh Judicial District, Richland County, in favor of defendants Jerry D. Armstrong, et al. We reverse.

We frame the issues on appeal as:

1. Whether the District Court erred in finding the Missouri River’s migration into the West half of Section 9, Township 26 North, Range 59 East, was caused by avulsion.

2. Whether the District Court erred in finding two tracts within the West half of Section 9, Township 26 North, Range 59 East, were not owned by the State of Montana.

On June 11, 1986, the Montana Department of State Lands filed a quiet title action to two parcels of land in the West half of Section 9 in Richland County, Montana. One parcel is located in the Northwest Quarter of Section 9 (Parcel A). The other is located in the Southwest Quarter of Section 9 (Parcel D). On December 15 and 16, 1988, the District Court heard oral testimony presented by both sides after filing of cross-motions for summary judgment. The Honorable H.R. Obert issued findings of fact and conclusions of law on January 30, 1990, in favor of defendants. This Court suspended Judge Obert for reasons not involved here. The Honorable Leroy McKinnon subsequently assumed jurisdiction.

On April 4, 1991, the parties stipulated to Judge Obert’s findings of fact and conclusions of law. Thereafter, Judge McKinnon issued a judgment upon Judge Obert’s findings and conclusions. Judge Obert found that the State’s claim of ownership to the parcels was invalid and groundless. He further quieted title to the surface and to the oil, gas and other minerals in and under the parcels to defendants, the present record owners.

Specifically, Judge Obert found the migration of the Missouri River to be avulsion and not accretion, and that the two tracts of land claimed by the State were sand bars and not islands. For the following reasons we reverse the District Court.

The standard of review as to the court’s findings of fact is clearly erroneous. Steer, Inc. v. Department of Revenue, 245 Mont. 470, 474, 803 P.2d 601, 603. If substantial evidence exists and the effect of the evidence has not been misapprehended, the Court may still find that a finding is “clearly erroneous” when, although there is evidence to support it, a review of the record leaves the court with the definite and firm conviction that a mistake has been committed. Interstate v. DeSaye (1991), 250 Mont. 320, 820 P.2d 1285, 48 St.Rep. 986.

I

Whether the District Court erred in finding the Missouri River’s migration into the West half of Section 9, Township 26 North, Range 59 East, was caused by avulsion.

Avulsion occurs when a stream suddenly changes its channel and forms a new one. If avulsion moves a stream away from a landowner’s property, the property boundary line remains where it had previously been. McCafferty v. Young (1964), 144 Mont. 385, 391, 397 P.2d 96, 99. The landowner’s property remains identifiable. Evidence presented to Judge Obert did not show a distinct new channel where the old land could be distinctly identified. Nor was there evidence presented that a flood or ice jam caused the sudden formation of a new channel in the Missouri River.

Although the migration of the Missouri between 1902 and 1987 was very dynamic, the river movement cannot be characterized by avulsion. Avulsion is a sudden change in a river channel, resulting in an identifiable piece of land. The land formations here are not identifiable with the sedimentary layers on respondent’s land.

We have previously discussed avulsion in McCafferty at 385, 397 P.2d at 96. Defendants rely on McCafferty as Montana’s law on avulsion. We said: “In less than 100 years the river here has moved approximately a quarter of a mile from the SWV4 of Section 8 into the NEV4 of Section 18. This is substantial movement and is perceptible over the period of just one generation. Even without the clear evidence of a sudden flood we would be inclined to label this migration ‘perceptible’ and, therefore, avulsive.” McCafferty at 393, 397 P.2d at 100. This language is dicta and should not be cited as Montana’s law on avulsion. The facts presented to the District Court do not support a finding that avulsion occurred but instead fall under the doctrine of accretion.

Accretion occurs when a stream gradually and imperceptibly changes its course over a period of time, resulting in sedimentary deposits on one bank along the water line. Jackson v. Burlington Northern Inc. (1983), 205 Mont. 200, 667 P.2d 406. This process is distinguished from avulsion in that the property boundary line shifts with the water line. The riparian owner, absent exception or reservation, who owns land along the bank, retains land rights as long as the stream remains adjacent to the land. Ariparian owner can conversely lose title to land when erosion causes the gradual washing away of land bordering a river. Jackson at 202, 667 P.2d at 407.

We conclude the District Court erred in its finding that the migration of the Missouri River into Section 9 was a result of avulsion. The processes described above indicate the land formations were a result of accretion, not avulsion. The District Court misapprehended the effects of the evidence in its determination that an avulsive process occurred.

II

Whether the District Court erred in finding two tracts within the West half of Section 9, Township 26 North, Range 59 East, were not owned by the State of Montana.

It is not disputed that the State of Montana owns the land under the navigable rivers within the State to the low water mark. Section 70-1-202, MCA (1991). It is further true that accreted lands pass with riparian property unless excepted or reserved. Jackson v. State (1979), 181 Mont. 257, 266, 593 P.2d 432, 436. Lands or islands arising from the river bed can also be enlarged by accretion and such accreted lands attach to the island. Jackson v. Burlington Northern, Inc. (1983), 205 Mont. 200, 204, 667 P.2d 406, 408.

Both parties presented extensive expert testimony along with numerous photographs and maps. The parties agreed that the land formations in question arose out of the bed of the Missouri, but disagreed on which body was entitled to the accretions. “Accretions belong to the land from which they began.” Nielsen v. Statbucker (Iowa 1982), 325 N.W. 2d 391, 394.

As the Iowa Supreme Court noted, prior to determining which body is entitled to accretion it is important to determine whether or not the land in question is an island. “One matter to be determined is whether an island existed to which accretion can be claimed... Not every body of land which protrudes above the surface of the water is an island. This is particularly true with an undisciplined river such as the Missouri, where, as the evidence shows, sand bars might come and go on a day-to-day basis.” Mather v. State (Iowa 1972), 200 N.W.2d 498, 501.

Dr. Ray Breuninger, a sedimentologist, testified on behalf of the State that both Parcels A and D originated from the bed of the Missouri by deposits and build up of loose sediment. Testimony presented at the hearing, and the photographs bear out that the channels in question surrounding both parcels were still active prior to the land formations connecting to the shore. According to expert testimony presented by the State, the land formations in question developed permanent characteristics and became islands.

According to Dr. Breuninger, the formation of the island in the middle of the river in the North half of the Northwest Quarter, occurred between 1940 and 1949. The southern channel of the river in this area remained open and free flowing. After 1956, the south channel of the river narrowed through accretion and build up of sediment, which are gradually blocking off the flow. Although water was still flowing in the southern channel, in 1967 the island attached to the shore at low water and continued to build.

As to the island in the East half of the Southwest Quarter of Section 9, Dr. Breuninger testified it was formed by a build-up of sand from the bottom of the river. The channel between this island and the east bank is still active but has filled in from right to left, narrowing the channel.

Ray Womack testified as an expert on behalf of the defendants. He holds a masters in geology, specializing in fluvial geomorphology. He testified that since 1937 when Fort Peck was constructed, the size of the annual peak was reduced, resulting in smaller floods on a yearly basis. Further, between 1940 and the late 1950s, the river widened its bed tremendously, causing multiple channels and sand bars. As a result, erosion occurred inside the bends of the river instead of outside, with soil deposition on the outside rather than the inside. Womack testified that the result of this process is that the accretion goes to the riparian owner. He further testified that, the land forms which resulted from the migration of the Missouri were transitory in nature and were not islands.

Womack testified that the channel in the Northwest Quarter of Section 9 has stopped flowing. As to the Southwest Quarter of Section 9, by 1988 very little trace of the channel was left and the land form was firmly joined to the bank. However, the question is whether a land form gains permanence prior to attaching to the riparian shore. As the Iowa Supreme court said; “Title however, does not leap frog from the State to the riparian owner merely because a sandbar arising above the high water mark is also eventually attached to the riparian shore.” Nielsen v. Statbucker (Iowa 1982), 325 N.W. 2d at 395.

In determining whether a claim of accretion can be supported, the Iowa Court said:

“An island is traditionally defined as a body of land completely surrounded by water. However, before an island can support a claim of ownership by accretion it must be able to show some permanence of its own ... all the surrounding circumstances under which accretion occurred should be taken into account — the extent of the accretion itself, the growth of trees and vegetation, the nature of the water which surrounds the body of land, the topography of the land, and the testimony of the witnesses concerning its appearance, identification and permanency.”

Mather v. State (Iowa 1972), 200 N.W. 2d at 501, 502. (Citations omitted).

Testimony presented by the State’s experts show that Parcel A had trees and vegetation growing on it. The aerial photographs substantiated this testimony as to Parcel A. Parcel D had grass and willows growing on it. Thus the parcels had an economic value for grazing. Additionally, Dr. Breuninger visited Section 9 in 1987 and testified to willows growing on Parcel D that were above his head. Further testimony presented by the State indicated that both parcels were resistent to erosion. This evidence of permanence was discernible prior to the islands ceasing to be surrounded by river channels at low water.

We conclude that the District Court erred in finding that the two tracts were not owned by the State and we conclude such tracts were discernible islands prior to attaching to the adjoining lands and such islands and all accretions thereto are owned by the State of Montana.

For the foregoing reasons we reverse the judgment of the District Court and remand for entry of judgment quieting title to the property at issue in the State.

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


text:
    VALLEY PROPERTIES LIMITED PARTNERSHIP, a Montana Limited Partnership; and VALLEY MOTOR SUPPLY COMPANY OF MILES CITY, a Montana corporation, Plaintiffs and Appellants, v. STEADMAN’S HARDWARE, INC., Defendant and Respondent.
    No. 91-042.
    Submitted on briefs Nov. 14, 1991.
    Decided Jan. 7, 1992.
    49 St.Rep. 3.
    251 Mont. 242.
    824 P.2d 250.

      For Appellants: Richard M. Kovak, Cozen and O’Conner, Seattle, Washington; James L. Jones, Dorsey & Whitney, Billings, Montana.
    For Respondent: T. Thomas Singer, Moulton, Bellingham, Longo & Mather, Billings, Montana.
   JUSTICE TRIEWEILER

delivered the opinion of the Court.

Appellants were the owners of a warehouse and commercial property in Miles City. A fire started in the portion of the building rented to respondent, and destroyed the building. Appellants filed a complaint in the Sixteenth Judicial District Court, Custer County, for damages resulting from the fire. Respondent counterclaimed for its damages. Following a jury trial, the District Court entered a directed verdict in appellants’ favor on the counterclaim. The jury returned a verdict in respondent’s favor on appellants’ complaint. Appellants appeal from the District Court’s judgment. We affirm.

Appellants raise the following issues:

1. Did the District Court err by refusing to instruct the jury on appellants’ theory of res ipsa loquitur?

2. Did the District Court err by refusing to give an instruction based upon Thayer v. Hicks (1990), 243 Mont. 138, 793 P.2d 784?

3. Did the District Court err by allowing an expert witness to testify as a rebuttal witness, where the witness had not been disclosed before trial?

In 1988, appellant Valley Properties Limited Partnership (Valley Properties) was the owner of a commercial property at 809 Bridge Street in Miles City. It had purchased the property in December 1986. Appellant Valley Motor Supply Company of Miles City (Valley Motor Supply) occupied part of this building and used it for a parts and accessory tool warehouse. Valley Properties and Valley Motor Supply are related in that Valley Properties owns all of the real estate in the Northwest Division of Valley Motor Supply Company, the parent corporation which controls Valley Motor Supply. Appellants will be referred to collectively as ‘Valley.”

Respondent Steadman’s Hardware, Inc., d/b/a Coast to Coast Stores, rented a portion of the Bridge Street property and used it as a warehouse. Steadman’s Hardware had been occupying part of the warehouse since 1980 or 1981. Steadman’s Hardware had exclusive control over its section of the warehouse. All of the doors except one were barred or permanently sealed. Steadman’s Hardware put a lock on the one operable overhead door, and only its employees had keys to the lock.

Steadman’s Hardware paid a monthly rent for the warehouse, and Valley Properties provided electricity and took care of major repairs to the building. The warehouse had been remodeled in 1980 to provide more space and upgrade the portion of the building occupied by Valley Motor Supply. The electrical service was replaced on that side of the building at that time. However, the wiring for the portion of the building rented to Steadman’s Hardware was not remodeled nor upgraded. At least some of the wiring was quite old, probably dating from the 1930s. The wiring was an old-fashioned type, with twisted wire covered by cloth insulation.

On March 10, 1988, the warehouse was quite full. Steadman’s Hardware had stored water heaters, mowers, bicycles, PVC pipe, garbage cans, barbecues, snow blowers, different appliances, fertilizer, and various other items in the warehouse. Shortly after 2 p.m., two employees, Robert Torgrimson and Lynn Harbaugh, went to the warehouse to retrieve an exercise bicycle. Torgrimson, who was off duty at the time, wanted to buy the bike. They went through the 10 feet by 10 feet overhead door and proceeded to the bicycle storage area.

The bicycles were stored in cardboard boxes, stacked three high along an aisle. In order to read the labels on the bicycle boxes, Harbaugh turned on the lights in the bicycle aisle. The lights in this aisle consisted of a heavy cord with a socket at the end containing a bare bulb, and a pull chain with a string hanging down to operate the light. Rather than being above the aisle, the lights were directly above the stacked bicycle boxes. The pull string from the lights was draped over the bicycles.

Because the aisle was rather narrow, Torgrimson waited at the end of the aisle. Harbaugh found the exercise bicycle at the bottom of the stack, underneath one of the lights. He had to remove other bicycles to get at the exercise bike. He took one box, or possibly two, and put it on top of the adjacent stack. In doing so, the box bumped the light and pushed it over about a foot. The pull cord caught on the box and turned off the light. Harbaugh untangled the cord and pulled the light back on. Harbaugh dragged the exercise bicycle out of the aisle to Torgrimson and the two men carried the box out of the warehouse to Torgrimson’s car.

It is not clear whether Harbaugh replaced the cardboard box or boxes he had placed on top of the other bicycle boxes. He may have left a box on top of the three-high stack, and this box could have been in contact with the light bulb. It is also not clear whether Harbaugh turned off these lights before leaving the warehouse. Torgrimson testified at trial that he did not see Harbaugh restack the boxes and he could not tell if any of the boxes were touching the light bulb. Torgrimson told a fire investigator the boxes were not replaced in the stack. Torgrimson could not remember if the lights were left on in the bicycle aisle after they removed the exercise bicycle. Harbaugh testified he replaced the other boxes before leaving the aisle. He also testified that he thought he turned off one of the lights and was not sure about the other one. However, at an earlier deposition, and in a statement to fire investigators, he stated that he left the lights on because his hands were full carrying out the exercise bicycle. Harbaugh did not go back into the warehouse to check that the lights were turned off.

About 2:30 p.m., Martin O’Dea, another employee, went to the warehouse to get a refrigerator. He opened the overhead door and went inside. He noticed a smell that reminded him of burning leaves. He was putting the refrigerator on a cart when he noticed the lights flicker at the end of the aisle. Then he noticed smoke up near the ceiling. He left the refrigerator and went toward the main aisle. As he passed the bicycle aisle, he saw flames in that aisle at between four and eight feet off the floor. He considered trying to put out the fire, but decided it was already too big. He crossed the alley to the hardware store and told them to call the fire department. The call came into the fire department at 3 pm.

Fire fighters arrived within minutes, but flames were already shooting out of the overhead door. The firemen had difficulty fighting the fire because the other doors were all barred and the warehouse was full of merchandise. It took nearly two hours to bring the fire under control. The fire fighters were unable to save any significant portion of the building.

In July 1989, Valley Properties and Valley Motor Supply filed a complaint for damages in the District Court against Steadman’s Hardware. The plaintiffs alleged that the employees of Steadman’s Hardware had negligently stacked cardboard boxes too close to an electric fight and caused the fire in the warehouse. Aternatively, the plaintiffs alleged that the fire originated in the portion of the warehouse over which Steadman’s Hardware had exclusive control, and that Steadman’s Hardware should be held liable for the damages under the doctrine of res ipsa loquitur.

Steadman’s Hardware answered the complaint, denying any negligence and denying that it or its employees caused the fire. Steadman’s Hardware counterclaimed for the losses it suffered in the fire, alleging that the fire originated in the electrical system. Steadman’s Hardware contended that the owner of the building was responsible for the electrical system, that the electrical system was inadequate and deteriorated, and that the owner should have known of the condition of the electrical system.

A jury trial was held from July 10-18, 1990. Several employees of the various parties testified, as well as several fire investigators and other experts. The experts agreed it was difficult to ascertain the cause of the fire and there was very little direct physical evidence to aid them in determining the cause. They generally eliminated arson, spontaneous combustion, cigarette smoking, and use of heaters or other appliances as likely causes. This left Valley’s theory (a cardboard box was left in contact with a lighted bulb), and Steadman’s Hardware’s theory (the electrical system malfunctioned or shorted) as the probable explanations for the fire. The experts reached quite different conclusions, however, as to which of these causes was more likely.

Chris Rallis, Valley’s expert, stated his opinion that the fire was caused by a light bulb being left in contact with a cardboard box. He had performed tests in which he was able to ignite a bicycle carton by placing a light bulb against the box under certain conditions. Based on his investigation, he ruled out an electrical cause.

Wesley Sherman, another expert for the plaintiffs, felt that the electrical malfunction theory was unlikely, but that the fire could have been caused by a light bulb placed against a cardboard box.

Jerry Smith, Battalion Chief of the Miles City Fire Department, felt that both theories were plausible, but that the light bulb was the more likely cause.

Donald Howard, a fire investigator retained by the defendant, initially felt that the fire was not electrically caused. However, after investigating further and conducting tests, he concluded that the light bulb was an unlikely source of the fire, and the most probable cause was a malfunction in the electrical system.

Charles King, another expert retained by the defendant, expressed the opinion that the light bulb could not have caused the fire. He felt that the most probable cause was something in the electrical system.

Kevin Vogel, another defense witness, also testified that the fire was probably caused by some electrical incident.

At the end of the trial, Valley moved for a directed verdict on Steadman’s Hardware’s counterclaim, based on lack of sufficient evidence and lack of a showing that Valley had breached any legal duty. The District Court granted this motion. The jury returned a verdict in favor of Steadman’s Hardware on Valley’s complaint.

The District Court entered its judgment on August 3,1990. Valley Properties and Valley Motor Supply appeal from this judgment.

I

Did the District Court err by refusing to instruct the jury on appellants’ theory of res ipsa loquitur?

Valley contends the District Court erred by refusing to give proposed instructions under the theory of res ipsa loquitur. We disagree. This Court has stated the doctrine of res ipsa loquitur in the following terms:

“(1) It may be inferred that harm suffered by the plaintiff is caused by negligence of the defendant when
“(a) the event is of a kind which ordinarily does not occur in the absence of negligence;
“(b) other responsible causes, including the conduct of the plaintiff and third persons, are sufficiently eliminated by the evidence; and
“(c) the indicated negligence is within the scope of the defendant’s duty to the plaintiff.”

Tompkins v. Northwestern Union Trust Co. (1982), 198 Mont. 170, 176, 645 P.2d 402, 406 (quoting Restatement (Second) of Torts § 328D).

Under the facts of the present case, the doctrine is not applicable. A fire in a warehouse, of unknown origin, may occur in the absence of negligence. Further, the evidence did not clearly eliminate causes, such as a malfunction in the electrical system, which were not chargeable to the occupants of the warehouse. The fire investigators and other experts disagreed regarding the cause of the fire. Several of these experts suggested that the instrumentality causing the fire may have been outside of the control of Steadman’s Hardware. As noted by the court in Wright v. United States (D.Mont. 1979), 472 F.Supp. 1153, 1156: “[T]he doctrine of res ipsa loquitur is not usually applicable in cases of fires of unknown origin... .” This is such a case.

II

Did the District Court err by refusing to give an instruction based upon Thayer v. Hicks (1990), 243 Mont. 138, 793 P.2d 784?

Valley contends that the District Court erred by refusing to give the following instruction, which was based upon language from our opinion in Thayer v. Hicks (1990), 243 Mont. 138, 793 P.2d 784:

“Plaintiffs are not required to eliminate all possible causes of damages in order to prove causation.” Valley contends this instruction was necessary for Valley to be able to argue its theory of the case to the jury. We disagree.

The District Court gave the following instructions, among others:

“INSTRUCTION NO. 5
“Burden of proof means burden of persuasion. A party who has the burden of proof must persuade you by the evidence that his claim is more probably true than not true. In other words, the evidence supporting the propositions which a party has the burden of proving must outweigh the evidence opposed to it. In determining whether a party has met this burden you will consider all the evidence, whether produced by the plaintiff or defendant.”
“INSTRUCTION NO. 9
“The plaintiffs have the burden of proving:
“1. That the defendant was negligent.
“2. That the plaintiffs’ property was damaged.
“3. That the defendant’s negligence was a cause of the damage to plaintiffs’ property....
“INSTRUCTION NO. 10
“The defendant’s negligent conduct is a cause of the damage if it helped produce it and if the damage would not have occurred without it.” [Emphasis added].

These instructions informed the jury what Valley was required to prove in order to establish causation. Where other instructions adequately cover the law relating to a particular issue, it is not error to refuse a proposed instruction on the same subject. Noll v. City of Bozeman (1977), 172 Mont. 447, 564 P.2d 1296 (refused instruction similar to Valley’s proposed instruction).

Ill

Did the District Court err by allowing an expert witness to testify as a rebuttal witness, where the witness had not been disclosed before trial?

Steadman’s Hardware called Kevin Vogel, an engineer and consultant, as a rebuttal witness. Valley’s counsel objected to Vogel’s testimony on the basis that he had not been listed in the pretrial order or previously disclosed to Valley. Valley contends the District Court erred by allowing Vogel to testify.

The determination of whether proposed testimony is admissible as rebuttal testimony in a given case is within the sound discretion of the District Court, and this Court will not reverse the District Court’s ruling unless it abused this discretion. “The law does not require the advance disclosure of rebuttal witnesses.” Massman v. City of Helena (1989), 237 Mont. 234, 243, 773 P.2d 1206, 1211.

Here, we note that Valley was allowed to present testimony of rebuttal witness Wesley Sherman, in spite of the objection by Steadman’s Hardware that Sherman was only named as a rebuttal witness at the time of the pretrial order, and Steadman’s Hardware had not had an opportunity to depose him. It does not seem unfair that the District Court similarly allowed a belatedly disclosed witness to testify in surrebuttal for Steadman’s Hardware. We conclude that the District Court did not abuse its discretion by allowing the witness to testify.

Accordingly, finding no error in the challenged rulings of the District Court, we affirm the judgment.

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

       Regan Plumbing & Heating, Inc., and the County of Custer were also plaintiffs in the lawsuit, and Charles Steadman was named as a defendant. These parties have settled and/or been dismissed by the District Court and are not parties in this appeal.


author: CHIEF JUSTICE TURNAGE

text:
    BAKER DITCH COMPANY, Petitioner, v. THE DISTRICT COURT OF THE EIGHTEENTH JUDICIAL DISTRICT OF THE STATE OF MONTANA, IN AND FOR THE COUNTY OF GALLATIN, THE HONORABLE THOMAS A. OLSON, and THE HONORABLE FRANK M. DAVIS, Presiding Judges, Respondents.
    No. 91-386.
    Decided Jan. 9, 1992.
    49 St.Rep. 17.
    251 Mont. 251.
    824 P.2d 260.
    For Petitioner: W. Russell McElyea, Moore, O’Connell, Refling & Manos, Bozeman, for petitioner.
    For Respondents: Matt Williams, Les Aaberg, Water Commissioner, H.A. Bolinger, James H. Goetz, Bozeman, Thomas France, Missoula.

      For Amicus Curiae: Richard L. Krause, Asst. Counsel, American Farm Bureau Federaton, Park Ridge Illinois.
   CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

OPINION AND ORDER

The original opinion and order in this case was dated November 7, 1991, and filed with the Clerk of the Supreme Court on that date. We herewith clarify that original opinion and order. Our original opinion and order in this cause dated November 7,1991, is hereby withdrawn.

This is an original proceeding on application for writ of supervisory control. The petitioner has asked this Court to exercise its supervisory control and to direct the District Court of the Eighteenth Judicial District and its Water Commissioner to distribute the waters of the West Gallatin River in accordance with the laws of the State of Montana and more particularly in accordance with Cause No. 3850, W.D. Bell v. F.K. Armstrong of the Ninth Judicial District in and for the County of Gallatin, which adjudicated the water rights of the petitioner and other water rights in the West Gallatin River.

This Court accepts supervisory control in order to promote judicial economy and eliminate needless litigation, State ex rel. First Bank v. Dist. Court (1989), 240 Mont. 77, 782 P.2d 1260; State ex rel. Fitzgerald v. Dist. Court (1985), 217 Mont. 106, 114, 703 P.2d 148; and to resolve procedural entanglements, State ex rel. Leavitt v. Dist. Court (1977), 172 Mont. 12, 560 P.2d 517; and Fitzgerald, 217 Mont. at 114.

Water rights on the West Gallatin River were adjudicated in Cause No. 3850, W.D. Bell v. F.K. Armstrong, in the then Ninth Judicial District of the State of Montana in and for the County of Gallatin by decree effective October 7, 1909. The water rights of the petitioner were adjudicated therein as well as rights of other users on the West Gallatin River. Water commissioners have been appointed by the Gallatin County District Court to administer such decree. In July 1990, a number of water users on the river submitted a petition for appointment of a water commissioner for the enforcement of the above described decree. The petition was filed in said Cause No. 3850, in accordance of Chapter 5, Title 81 of the Montana Code Annotated 1989. This was done in July 1990, and on July 6,1990, Judge Thomas A. Olson issued an order for temporary appointment of a water commissioner. In that order the court stated as follows: the water users will soon present a petition for the appointment of a water commissioner, and the court wishing to avoid a dewatering of the river as has happened in the past,

“The court being advised that the West Gallatin River is dropping dramatically due to the onset of hot weather, and recognizing that
“NOW THEREFORE the court hereby appoints Les Aaberg as temporary water commissioner for the West Gallatin River effective immediately.”

A formal order appointing the Water Commissioner was signed on the same date. The Water Commissioner was appointed until further order of the court. In the formal order appointing the Water Commissioner it was stated as follows:

“IT IS ORDERED that Les Aaberg be and he is hereby appointed Water Commissioner, who shall have the authority to measure and distribute to the parties entitled thereto under such decree (referring to the W.A. Bell v. F.K. Armstrong decree) of the waters of West Gallatin, and to which they are entitled according to their priority as established by such decree for the season of 1990.”

On July 17,1990, the Water Commissioner so appointed closed the headgate of the petitioner, Baker Ditch Co. (Baker Ditch), which had decreed water rights, and the Water Commissioner refused to allow Baker Ditch to reopen its headgate. When asked why he had closed the headgate the Water Commissioner responded that he wished to enforce the water rights on the river in order of their priority.

Baker Ditch thereupon filed a dissatisfied water user’s petition in Judge Olson’s court on July 30, 1990. This petition was filed under §§ 85-2-406 and 85-5-301, MCA (1989). The petitioner in general alleges that Baker Ditch is the owner of a decreed water right under the decree in Cause No. 3850 above referred to, and that essentially it had not received that water right and that the Water Commissioner had informed Baker Ditch it would receive no further water until claims upstream appropriated with senior priority dates had been satisfied. The petition further alleged that Baker Ditch could divert water without injury to such upstream seniors. The petition further alleged that the headgate was located almost at the end of the West Gallatin River; that there was sufficient water to supply Baker Ditch; that such water would come from recharging by return flows, seepage and otherwise, into the river, even though there might be no water available for an upstream superior appropriator to Baker Ditch; and that such appropriation by Baker Ditch did not in any way interfere with any senior upstream water right holders. It alleged that the Water Commissioner’s rigid adherence to the priority system established, is contrary to the basic principles of water administration, and contrasted dramatically with the administration of the water rights on said river over the past 30 years. The petition also alleged that the water can be diverted by the petitioner without any injury to any downstream senior appropriators, and that the Gallatin River was flowing enough to satisfy these rights even after the appropriation made by Baker Ditch.

Judge Olson then recused himself and the matter was transferred to Judge Larry Moran who also sits in the Eighteenth Judicial District. Ahearing was held on August 23 and evidence was presented by lay and expert witnesses. Evidence was presented that the Baker Ditch diversions would not injure upstream senior water users, and there was no evidence presented that diversion would harm any of the water users on the West Gallatin River. The Water Commissioner testified that the diversion by Baker Ditch would have no adverse effect on upstream senior appropriators.

Judge Moran declined to issue a ruling which would conflict with Judge Olson’s previous instructions in the temporary appointment of a water commissioner. Judge Moran did not feel he could essentially reverse Judge Olson’s instructions and orders to the Water Commissioner of the West Gallatin River relative to the “dewatering” of the river. Judge Moran then stated that he was not prepared to conclude that the only beneficial use of water results from diversion, and that would appear to be one of the main issues inherent in the position of the petitioner. Judge Moran further stated that what essentially is asked for here, is to take % of the remaining water in the Gallatin River, leaving only 1000 miner inches available for the river itself. For all practical purposes the court would consider this a dewatering of the West Gallatin River. If the court were to grant the petition recognizing the continuing pattern of re-diverting recharged water, then Judge Moran feels that perhaps would be using water which really only belongs to the river itself, and to a specific appropriator regardless of the appropriator’s priority.

After additional remarks Judge Moran refused to assume jurisdiction and remanded the matter back to Judge Olson. Judge Olson then called in Judge Frank Davis, Judge of the Fifth Judicial District. On April 18, 1991 Judge Davis issued an order which discharged the Water Commissioner’s original attorney Matt Williams. It appeared that Mr. Williams was relieved of his duties because he had presented proposed findings of fact and conclusions of law which basically granted Baker Ditch the relief requested. Judge Davis recited in his order that Mr. Williams’ position was that his proposal conformed to the decree. Judge Davis stated that what is clear is that Williams did not fulfill his duty to advocate the court’s position. Judge Davis authorized Mr. Aaberg to employ other counsel of his choice to represent the court. The court then further ordered that if and when other counsel is obtained that counsel should consult with counsel for Baker Ditch and agree, if possible, as to what further evidence is deemed necessary or otherwise formulate an agreement that the matter may be submitted on transcripts and briefs. Should the court’s new counsel conclude, as did the Water Commissioner’s original counsel, that the petition has merit, then the two counsels should simply submit joint proposed findings, conclusions and order.

Thereafter on July 9, 1991, Judge Olson again temporarily appointed Les Aaberg as Water Commissioner for the West Gallatin River. The Water Commissioner then retained the services of Goetz, Madden and Dunn of Bozeman to represent him. Again on July 14, 1991, the Water Commissioner directed Baker Ditch to reduce its diversion to a minimal level. On such date there was approximately 7800 miner inches of flow in the river.

There has not been a decision on Baker Ditch’s petition to receive its adjudicated right of water from the river. On July 16,1991, the Montana Wildlife Federation filed a motion to intervene relative to this position. It does not appear that the Montana Wildlife Federation has any interest in the decree of the water rights of the West Gallatin River issued in 1909.

This case began as an administration of the distribution of water of the West Gallatin River in accordance with the 1909 case of W.D. Bell v. F.K. Armstrong decree in Cause No. 3850. The statutes governing this process are for the purpose of expeditious administration and not for the purpose of adjudication. It is a relatively simple matter to administer the various water rights and their priority. The users are entitled to what the decree gives them and no more. By statute, the water court is vested with exclusive jurisdiction relative to all matters relating to the determination of existing water rights within the boundaries of the State of Montana. See § 3-7-501, MCA (1989). See Mildenberger v. Galbraith (1991), 249 Mont. 161, 815 P.2d 130, 48 St.Rep. 621. District courts are granted the authority to supervise the distribution of water that has already been adjudicated and to enforce such water decrees. See § 85-2-406(3), MCA. The district court is bound by the existing water decree. In the water decree at issue there is no provision which provides that water rights may not be enforced in order to avoid a cessation of instream flow.

The law is clear the only matters for decision relative to the appointment of a water commissioner and petitions in relation to his duties, is whether or not the commissioner is distributing water to existing water right holders pursuant to the adjudication decree. See Quigley v. McIntosh (1940), 110 Mont. 495, 103 P.2d 1067. The only purpose of the petition of a dissatisfied water user is to enforce rights determined by the decree.

The Water Commissioner evidently believed that he had to enforce the decree to the extent that if a prior appropriator was without water upstream that a subsequent appropriator downstream could not divert such water under its water right because no water was available to an upstream prior appropriator, even though the river was being recharged. Such construction is groundless and irrational when dealing with the beneficial use of water. If a subsequent appropriator is using water in accordance with the decree and such use cannot in any way be a detriment to a prior appropriator, then the subsequent appropriator has the right to the use of such water. See Custer v. Missoula Public Service Co. (1931), 91 Mont. 136, 6 P.2d 131; and Quigley v. McIntosh (1930), 88 Mont. 103, 290 P.2d 266. The decree is to be interpreted according to the water law of the State of Montana as provided by statutes and appropriate court decisions. The Montana Water Users Act provides that the determination and adjudication of water rights including new water rights, which include minimum instream flow water rights, if any, are vested in the jurisdiction of the Water Court. See § 3-7-501, MCA. Mildenberger, [249 Mont. 161,] 815 P.2d 130, 48 St.Rep. at 621.

IT IS THEREFORE ORDERED that the District Court is to instruct the Water Commissioner to distribute the water of the West Gallatin River to the users in accordance with the decree of 1909 and this opinion. Nothing in this order shall restrict the Water Commissioner in requiring proper headgates, measuring devises and works, in accordance with the decree.

IT IS FURTHER ORDERED that the motion to intervene by the Montana Wildlife Federation in the underlying petition of dissatisfied water users should be denied.

Dated this 9th day of January 1992.

JUSTICES, HUNT, GRAY, McDONOUGH, and WEBER concur.

JUSTICE TRIEWEILER would deny the petition for writ of supervisory control and grant the petition for rehearing.


author: JUSTICE HUNT

text:
    THE STATE OF MONTANA, Plaintiff and Respondent, v. CHARLES W. “BILL” BIEHLE, Defendant and Appellant.
    No. 85-443.
    Submitted on briefs Oct. 3, 1991.
    Decided Jan. 16, 1992.
    49 St.Rep. 47.
    251 Mont. 257.
    824 P.2d 268.

      For Appellant: Charles W. Biehle, pro se, Powell, Wyoming.
    For Respondent: Marc Racicot, Attorney General, and Barbara C. Harris, Assistant Attorney General, Helena, Montana; Dennis Paxinos, Yellowstone County Attorney, and Teresa O’Connor, Deputy County Attorney, Billings.
   JUSTICE HUNT

delivered the opinion of the Court.

Appellant Charles W. Biehle, pro se, appeals his one count conviction of felony sexual assault following a jury trial in the Thirteenth Judicial District Court, Yellowstone County. We affirm.

Appellant has set forth several issues. Those that are not part of the record will not be considered by this Court. The following issues will be considered:

1. Whether appellant was denied effective assistance of counsel when defense counsel stipulated to the introduction of Exhibits No. 3 and No. 5.

2. Whether there was sufficient evidence to support appellant’s conviction.

3. Whether there was exculpatory medical evidence.

4. Whether the appellant was placed in double jeopardy after having his motion for a new trial granted following his initial conviction.

On November 9, 1983, in response to an anonymous phone call, T.K., a ten year old, was interviewed by a State social worker. The victim alleged that she was sexually assaulted by the appellant on or about the first or second week of October 1983, and on November 5, 1983. She repeated these allegations on video tape to a police officer.

On January 10, 1984, appellant was charged with two counts of sexual assault, a felony, for “massaging her genitals underneath her underwear.” On June 6, 1984, he was convicted on both counts in a jury trial. On August 6, 1984, the District Court granted appellant’s motion for a new trial based upon prosecutorial misconduct. After the motion for new trial was granted, appellant’s counsel, Christopher P. Thimson, was permitted to withdraw, and John L. Adams was appointed. On May 7, 1985, appellant was convicted by a jury of Count I and acquitted of Count II. He was sentenced to serve 20 years in the Montana State Prison, with the final 10 years suspended. On July 16, 1985, a timely notice of appeal was filed by appellant’s counsel, John L. Adams. The appeal was subsequently dismissed for failure to timely file a brief. On June 7, 1990, we reinstated the appeal and ordered the District Court to appoint counsel. The District Court appointed Allen Beck as counsel. On October 25,1990, Beck filed an Anders brief and raised possible arguments for an appeal, as required by Anders v. California (1967), 386 U.S. 738, 87 S.Ct 1396, 18 L.Ed.2d 493. Beck also filed a motion to withdraw as counsel, and this Court granted that motion and allowed the appellant to proceed with his appeal pro se. On July 8,1991, appellant filed his pro se brief to which the State subsequently responded.

I

Whether appellant was denied effective assistance of counsel when counsel stipulated to the introduction of Exhibits No. 3 and No. 5.

This Court uses the two-prong test set out in Strickland v. Washington (1984), 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674, in evaluating ineffective assistance claims.

“First, counsel’s performance must be deficient. To assess deficient performance, this Court employs the ‘ “reasonably effective assistance” test of whether a defendant’s counsel acted within the range of competence demanded of attorneys in criminal cases.’ (Citation omitted.) Second, counsel’s deficient performance must have so prejudiced the defendant as to deprive the defendant of a fair trial. [Citation omitted.] The standard for evaluating prejudice is whether a reasonable probability exists that but for counsel’s deficient performance, the trial’s outcome would have been different.” State v. Coates (1990), 241 Mont. 331, 337, 786 P.2d 1182, 1185.

We note that appellant’s counsel on the initial appeal did abandon him which resulted in the dismissal of the appeal. The United States Supreme Court recognized that the Fourteenth Amendment guarantees the right to counsel on the first direct appeal as a right. Penson v. Ohio (1988), 488 U.S. 75, 79, 109 S.Ct. 346, 349, 102 L.Ed.2d 300, 308. An appellant cannot be denied his right to appeal because of the errors of his counsel. Pennsylvania v. Finley (1987), 481 U.S. 551, 557, 107 S.Ct. 1990, 1994, 94 L.Ed.2d 539, 547. This Court has rectified this error by reinstating this appeal and ordering the District Court to appoint counsel. Thus, appellant has received the appropriate remedy in this instance.

Appellant’s main contention focuses on the stipulation of Exhibits No. 3 and No. 5. Exhibit No. 3 was a brown manila envelope containing an unsigned handwritten letter marked at trial as Exhibit No. 5 that was placed in the mail box of Shirley Kaufman, T.K’s mother. The content of the letter included appellant’s admissions of making a mistake and needing to seek help for his problems. Appellant claimed that defense counsel stipulated to the admission of the exhibit without his permission.

The record indicated that counsel believed that appellant agreed to the stipulation of the exhibits, and it appeared that it was a matter of trial tactics. This Court, in evaluating a defense counsel’s performance, will not second guess trial tactics. Coates, 786 P.2d at 1185.

The record shows that defense counsel’s performance was competent. Through the efforts of his attorney, the appellant was acquitted of one of the charges against him. Other evidence of similar acts of sexual assault was suppressed. We hold that appellant was adequately assisted in the conduct of the proceedings.

II

Whether there was sufficient evidence to support appellant’s conviction.

We have stated previously that in sex offense cases the victim’s testimony need not be corroborated. State v. Gilpin (1988), 232 Mont. 56, 70, 756 P.2d 445, 453. The rule applies to child victims of sexual abuse as well. Gilpin, 756 P.2d at 453. The victim testified that the sexual contact of November 1983 was committed by the appellant. This testimony is sufficient evidence to sustain a jury’s guilty verdict.

III

Whether there was exculpatory medical evidence.

Appellant alleged that there was a medical examination of the victim that proved her hymen was still intact and that this evidence refuted the victim’s claim of penetration. Nothing in the record indicated that appellant requested this information or that the medical examination even occurred. Assuming that such record existed and that the medical information was not exculpatory or necessary for the preparation of the defense, this Court has stated that defense counsel’s right to review medical and psychological evidence of the victim is outweighed by the victim’s right to confidentiality. State v. Donnelly (1990), 244 Mont. 371, 376-77, 798 P.2d 89, 92 (overruled on other grounds in State v. Imlay (Mont. 1991), 813 P.2d 985, 48 St.Rep. 588.)

The appellant’s argument is without merit under Montana law. The statutory definition of sexual contact states the following:

“ ‘Sexual contact’ means any touching of the sexual or other intimate parts of the person of another for the purpose of arousing or gratifying the sexual desire of either party.”

Section 45-2-101(60), MCA.

The policy underlying our sexual assault statute is to “ ‘criminalize and punish sexual or intimate impositions that do not involve penetration ....’ ” State v. Kestner (1986), 220 Mont. 41, 46, 713 P.2d 537, 540 (quoting State v. Weese (1980), 189 Mont. 464, 467, 616 P.2d 371, 373.) It is not necessary for the victim’s hymen to be broken, as the appellant alleged, to constitute sexual contact. We hold the appellant’s contention to be without merit.

IV

Whether the appellant was placed in double jeopardy after having his motion of a new trial granted following his initial conviction.

It has long been the rule that double jeopardy does not attach after the trial court grants a new trial. State v. Thompson (1891), 10 Mont. 549, 563, 27 P. 349, 352. In this case, a new trial was granted at the request of appellant because of prosecutorial misconduct in closing argument. We hold that double jeopardy does not attach in this instance.

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


text:
    EDWARD C. MUSSELMAN and PAULINE L. MUSSELMAN, husband and wife, Plaintiffs and Respondents, v. MOUNTAIN WEST FARM BUREAU MUTUAL INSURANCE COMPANY, Defendant and Appellant.
    No. 91-087.
    Submitted on briefs Sept. 19, 1991.
    Decided Jan. 16, 1992.
    49 St.Rep. 50.
    251 Mont. 262.
    824 P.2d 271.

      For Appellant: Laurence R. Martin and Randall G. Nelson, Felt, Martin, Frazier & Lovas, Billings.
    For Respondents: Robert L. Johnson, Attorney at Law, Lewistown.
   JUSTICE HUNT

delivered the opinion of the Court.

Appellant Mountain West Farm Bureau Insurance Company appeals from an order of the Tenth Judicial District Court, Fergus County, granting respondents Edward and Pauline Musselman’s, cross-motion for summary judgment. The District Court found that respondents purchased a fire insurance policy from appellant. The policy extended coverage to the respondents’house at an agreed value of $66,000. The house was totally destroyed by fire. The appellant paid respondents only $50,000 of the agreed value. The District Court ruled that § 33-24-102, MCA, the valued policy statute, controls and entered a judgment against appellant of $18,777 which included interests and costs. We affirm.

The appellant raised the following issues on appeal:

1. Whether the District Court erred when it held that § 33-24-102, MCA, controls and that respondents were entitled to payment under their insurance policy in an amount equal to the agreed property value of $66,000.

2. Whether the District Court erred when it did not enforce the pro rata clause contained in the respondents’ fire insurance policy.

The parties have agreed to the following facts which are uncontroverted by the record. In May 1988, respondents purchased from appellant a fire insurance policy covering certain property in Fergus County, as well as a house located in Hamilton. By the terms of the policy, appellant valued the house at $66,000 and agreed to insure the house for that amount should the house be considered a total loss.

Apparently the only road to the house went through some neighboring property. The neighbor closed the road. The respondents attempted to gain access to the house through litigation but were unsuccessful.

On September 23, 1988, respondents agreed to sell the house to Bill Chesley for $50,000. The contract for sale was handwritten by one of the parties to the sale, and it is not disputed by the parties to this appeal that it is a valid contract for sale. Respondents notified appellant about the transaction with Chesley and continued their coverage to protect their interest in the home. Sometime later Chesley was able to obtain access to the house.

Chesley then purchased a fire insurance policy from Farmers Insurance Group (hereinafter “FIG”) to protect his equitable interest in the house. The policy had an agreed value of $109,000. Chesley then assigned “Ed Musselman” as loss payee to receive the proceeds under the FIG policy to the extent of whatever unpaid balance on the home Chesley should owe to the respondents. Chesley made only two payments on the contract for sale before defaulting.

On March 3, 1989, a fire totally destroyed the house. No criminal activity was involved. Both insurance policies were in effect at the time of the fire.

Initially, FIG refused to pay the respondents, arguing that the contract for sale was not valid and that Chesley did not have an insurable interest. Respondents initiated litigation against FIG upon which FIG paid respondents the amount of Chesley’s unpaid balance on the home, plus interest for a total of $51,330. On July 17, 1989, appellant remitted $50,000 of the agreed value of $66,000. Appellant claimed that respondents were only entitled to proceeds equal to their insurable interest which appellant argues is the amount agreed to in the contract for sale, i.e., $50,000.

On February 9,1990, respondents filed their complaint in District Court requesting that appellant pay the remaining balance of the agreed value stated in the insurance policy. On April 20, 1990, appellant filed its answer and counterclaim. On May 1,1990, respondents motioned the court for summary judgment pursuant to Rule 56, M.R.Civ.P. On May 22, 1990, appellant filed a cross-motion for summary judgment and a motion for summary judgment on its counterclaim. On September 10, 1990, a hearing was held on the motions. On January7,1991, the District Court granted respondents’ motion for summary judgment on their complaint and against appellant’s counterclaim. The District Court ruled that § 33-24-104, MCA, controls and entered a judgment against the appellant for a sum of $18,648, which included interest, and an additional $129 for costs. Appellant appeal’s from the adverse ruling.

For the District Court to grant summary judgment the record must not contain any genuine issue of material fact. Rule 56(c), M.R.Civ.R Initially, the burden rests with the moving party to prove that no genuine issue of fact exists. Once that is done, then the burden shifts upon the nonmoving party to present facts of a substantial nature that a material issue of fact indeed does exist.

In order for this Court to determine whether a district court’s granting of summary judgment was proper, we must determine whether there is any genuine issue of material fact. If there is not, then the moving party is entitled to summary judgment as a matter of law. Reagan v. Union of California (1984), 208 Mont. 1, 6, 675 P.2d 953, 956. The moving party is entitled to judgment on the law applicable to the facts established by the pleadings, depositions, answers to interrogatories, and admissions in the record. Jordan v. Elizabeth Manor (1979), 181 Mont. 424, 428, 593 P.2d 1049, 1052.

I

Whether the District Court erred when it held that § 33-24-102, MCA, controls and that respondents were entitled to payment under their insurance policy in an amount equal to the agreed property value of $66,000.

We begin our analysis with the doctrine of equitable conversion. Under the doctrine, a contract of purchase and sale of real estate vests the entire beneficial interest in the land with the buyer. During the course of the contract, the seller retains a legal title to the land as security for the purchase price. The buyer’s interest is a real interest, while the seller’s interest is one of personal property in the purchase price. Sharbono v. Darden (1986), 220 Mont. 320, 324, 715 P.2d 433, 435. Here, the respondents had an interest in the property to insure, as did Chesley. With this point in mind, we will analyze appellant’s various arguments.

Appellant argues that the insurable interest statue of § 33-15-205, MCA, conflicts with the valued policy statute of § 33-24-102, MCA, and that § 33-15-205, MCA, should control, and that the terms of the insurance policy itself limit the respondents to their insurable interest stated in the contract for sale with Chesley. Appellant alleges that it is liable to the respondents only for the insurable interest of the house which is established by the contract for sale and not the agreed value stated in the insurance policy. We disagree.

Section 33-24-102, MCA, states in part:

“Whenever any policy of insurance shall be written to insure any improvements upon real property in this state against loss or damage and the property insured is considered to be a total loss, without criminal fault on the part of the insured or his assigns, the amount of insurance written in such policy shall be taken conclusively to be the true value of the property insured and the true amount of loss and measure of damages.” [Emphasis added.]

In Britton v. Farmers Ins. Group (1986), 221 Mont. 67, 72-73, 721 P.2d 303, 307, we commented that the “statute determines automatically and conclusively the amount of loss recoverable for total loss,” and that it “may obviate even the necessity of a proof of loss.” The law prevents insurers from creating a question of total loss “to compromise its duty to pay the full amount or to negotiate a lesser amount.” Britton, 721 P.2d at 307.

The enactment of valued policy laws in several jurisdictions rests almost entirely on public policy grounds. The purpose of the statute is to protect the insured by relieving him of the burden of trying to prove the value of a house. 45 C.J.S. Insurance § 916 (1946).

Appellant claims that the terms of the insurance policy limit the recovery to the respondents’ insurable interest. The disputed fire insurance policy contained the following clause:

“Insurable interest and Limit of liability.
“Even if more than one person has an insurable interest in the property covered, we shall not be liable:
“a. To the insured for an amount greater than the insured’s interest; nor
“b. For more than the applicable limit of liability.”

We agree with the Michigan Supreme Court’s position in Wilson v. Fireman’s Insurance Company (Mich. 1978), 269 N.W.2d 170, where the court held that despite language in the insurance policy similar to the one quoted above, the insurer was required to pay the insured land contract seller the full amount stated under the policy. In that case, the court held that the seller maintained insurance on the property after the sale, no evidence was introduced that the premium was less than the usual for such a house, as would happen only if a debt was due to the seller, and that the risk to the insurer was not increased by the transaction. Wilson, 269 N.W.2d at 172.

In the case before us, respondents informed the appellant’s agent about the contract for sale with Chesley. No evidence in the record indicated that appellant’s risk was increased, nor did it adjust the respondents’ premium after the transaction. We hold that the terms of the insurance policy do not necessarily limit the respondents to the unpaid balance of the contract.

II

Whether the District Court erred when it did not enforce the pro rata clause contained in the respondents’ fire insurance policy.

In McCarter v. Glacier Gen. Ass. Co. (1976), 169 Mont. 269, 273, 546 P.2d 249, 251, we noted that pro rata policies are not unlawful per se but are generally valid and enforceable. The clause appellant is referring to stated the following:

“Other Insurance. If you are carrying other insurance on the property to which this policy applies, the coverage under this policy is null and void. We may permit other insurance, however, by endorsement to this policy. If other insurance is permitted, we will not be liable for a greater portion of any loss than our pro rata share on excess of any deductible.”

Appellant argues that the second and third sentences of the proration clause apply to the facts of this case and that the term “other insurance” means insurance carried on the property by anyone. However, we note that this case involves two separate individuals insuring two entirely different interests. A leading treatise on insurance law has discussed the effect of other insurance clauses relating to these facts.

“By definition, other or double insurance exists where two or more policies of insurance are effected upon or cover the same interests in the same property, against the same risks, and in favor of, or for the benefit of, the same person. As all of these conditions must concur, it follows that if different persons have different interests in the same subject of insurance, each may insure his interest without effecting other or double insurance.” [Emphasis added.]

Couch on Insurance 2d (Rev Ed) § 37B:104 (1985).

In this instance, we have two separate interests being insured. Chesley assigned his right to proceeds from his insurance policy to the respondents. The assignment has allowed respondents to receive insurance benefits in excess of the value of the home and property. Although this type of situation works against the justification for insurance which is one of indemnification and not profit, we believe that insurance companies are in a better position to draft policies to prevent such occurrences as what happened here.

Affirmed.

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