text:
    CONRAD MITCHELL, Plaintiff and Appellant, v. TOWN OF WEST YELLOWSTONE, a municipal corporation, By and Through its town council, Defendant and Respondent.
    No. 88-202.
    Submitted Oct. 12, 1988.
    Decided Dec. 8, 1988.
    765 P.2d 745.
    Thomas R. Anacker argued, Kirwan & Barrett, Bozeman, for plaintiff and appellant.
    Lineberger & Harris, Peter S. Lineberger argued, Bozeman, for defendant and respondent.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

Conrad Mitchell appeals from a summary judgment entered against him and in favor of the Town of West Yellowstone in the District Court, Eighteenth Judicial District, Gallatin County. Mitchell had filed a declaratory judgment action challenging the constitutionality of a town ordinance.

The issue on appeal is whether the District Court lacked subject matter jurisdiction on the declaratory judgment action because Mitchell had failed to exhaust his administrative remedies under the ordinance before filing suit. We determine that the District Court had subject matter jurisdiction in this cause and reverse.

The Town of West Yellowstone had adopted an ordinance applicable in the business district which provides that before building permits will be issued for new or expanded uses within the district, the applicant for a permit must provide specified off-street parking spaces. Cash-in-lieu payments may be made instead of providing off-street parking spaces. If the applicant for a permit seeks a variance from the off-street parking requirements, he may appear before a Board of Adjustment established under the ordinance. This Board has the power to vary the requirements when strict compliance with the ordinance would create unnecessary hardship or be unreasonable under the circumstances. A person aggrieved by the decision of the Board of Adjustment, or any taxpayer or interested person may, under the ordinance, present to a district court a petition that the decision is illegal, within 30 days after the filing of the decision in the office of the Board.

Mitchell, a general contractor, who had resided at West Yellowstone since 1971, is the owner of Lot 9, Block 1 of the original town-site of West Yellowstone. Prior to this case, he had been engaged in one way or another with more than 25 construction projects requiring building permits in the Town of West Yellowstone, and never, prior to this case, had any dispute with the process for obtaining building permits.

The off-street parking ordinance was adopted by the town council of West Yellowstone in 1982. Before that, Mitchell had architectural plans prepared for future construction on Lot 9, which Mitchell intended to be implemented over a period of time as money became available. He implemented his first phase of construction on Lot 9 before the ordinance took effect. After the effective date of the zoning ordinance, Mitchell had constructed other buildings on Lot 9, each time obtaining a building permit and going through the proper procedure prior to construction.

In May, 1986, Mitchell gave Don Buettner, the town building official, a copy of his architectural plans and discussed with Buettner his proposal to construct another commercial building on Lot 9. Mitchell did not fill out a building permit application, but he did make it known to Buettner that he intended to do the further construction.

Buettner took the plans to the West Yellowstone Planning and Zoning Board in 1986. He testified that the Planning and Zoning Board requested a “variance procedure” because of the parking “problem.”

Mitchell did nothing further until January , 1987, when he again asked for a permit for the project, and Buettner told him that his request was “negative” because of the previous planning and zoning board “procedures.”

Buettner treated the July, 1986, and January, 1987, verbal inquiries as requests for a building permit by Mitchell, and gave him a decision on March 22, 1987, by letter. The letter informed Mitchell that the judgment of the Planning and Zoning Board was to “come forth for review, and obtain a variance.” Mitchell was further informed by the letter that a total of nine parking spaces would be needed for the unfinished portion of his complex on Lot 9.

Mitchell did not take any further steps to procure a permit through the provisions of the ordinance. Instead, he filed a declaratory judgment action in the District Court, against West Yellowstone, challenging the validity of the ordinance on the grounds that it was invalidly enacted under state law, and that it denied equal protection because it unreasonably discriminated against new development in favor of existing development by applying funds received as cash-in-lieu payments from new development to improve parking areas located within areas of existing development.

Eventually, the District Court granted the motion of West Yellowstone for a summary judgment saying:

“I am persuaded to require plaintiff to complete his application process through the zoning commission in West Yellowstone. I do this in view of the discretion vested in the commission to consider the particular piece of property involved and the public parking available. There is even a question as to whether plaintiff made a formal application for a building permit. Finally, the commission may set the cash-in-lieu figure low enough to make a full blown constitutional attack unwise. Plaintiff has too many administrative options open to him. This matter is dismissed for failure to exhaust administrative remedies.”

On appeal, Mitchell argues that the zoning ordinance is unconstitutional on its face, that the right to challenge a town ordinance is accorded plaintiffs under the Uniform Declaratory Judgment Act, adopted by Montana, Section 27-8-101, et seq., MCA; that administrative agencies do not have the power to determine the constitutionality of a zoning ordinance; that declaratory relief is independent of administrative remedies; and therefore a constitutional attack against the validity of a town ordinance may be brought in District Court without first exhausting administrative remedies under the ordinance.

The Town of West Yellowstone responds that the District Court lacked subject matter jurisdiction because Mitchell failed to exhaust his administrative remedies; that Mitchell’s primary objection to the ordinance is that he was not “grandfathered” thereunder; that the exhaustion of administrative remedies doctrine applies unless the administrative avenue is futile; and that in any event, the Town of West Yellowstone is immune from suit in this case pursuant to Section 2-9-111, MCA.

Section 27-8-202, MCA, provides, among other things, that any person interested under a municipal ordinance may have determined, any question of construction of validity arising under the ordinance and obtain a declaration of rights, status or other legal relations thereunder. Section 27-8-201, MCA, provides that courts of record have power to declare rights, status and other legal relations whether or not further relief could be claimed. We agree that the power to decide the constitutionality of an ordinance in a declaratory judgment action is as was affirmed in Driscoll v. Austintown Associates (1975), 42 Ohio St.2d 263, 328 N.E.2d 395, 399, where the Court said:

“The ‘general powers conferred in section 2721.02’ to render declaratory judgments are contained in the first sentence of that statute: ‘Courts of record may declare rights, status and other legal relations whether or not further relief is or could be claimed.’ This general grant of power is certainly broad enough to encompass actions contesting the constitutionality of township zoning ordinances.”

Moreover, in this case, Driscoll had standing to bring a declaratory judgment action because of his personal stake in the outcome of the controversy before the District Court. Western Litho v. Board of City Commissioners, et al. (1977) 174 Mont. 245, 247, 570 P.2d 891, 892.

The District Court, therefore, had the power, and the plaintiff had the right to sue, to determine the constitutionality of the zoning ordinance in a declaratory judgment action, in ordinary circumstances. The question here is whether he must first exhaust his administrative remedies under the ordinance before seeking a declaratory judgment.

The District Court recognized, and the briefs on appeal show that there is a split of authority on this question among the states. West Yellowstone cites authority that zoning applicants must first exhaust their administrative remedies before seeking relief in the courts: Johnson County Memorial Gardens, Inc. v. City of Overland Park (1986), 239 Kan. 221, 718 P.2d 1302; Hatch v. Utah County Planning Department (Utah 1984), 685 P.2d 550; Turner v. Lane County (1982), 630 Or. App. 611, 665 P.2d 370; Hansen v. Keim (Colo. 1982), 650 P.2d 1313; Johnson County Memorial Gardens, and Minor v. Cochise County (1980), 125 Ariz. 170, 608 P.2d 309. West Yellowstone also relies heavily on English v. City of Carmel (1978), 178 Ind.App. 140, 381 N.E.2d 540; and Ackerly Communications v. City of Seattle (1979), 92 Wash.2d 905, 602 P.2d 1177. The District Court in its order seemed to rely on Anne Arundel County Commissioners v. Buch (1948), 190 Md. 394, 58 A.2d 672.

Mitchell, on the other hand, sets store on Kingsley v. Miller (1978), 120 R.I. 372, 388 A.2d 357; Texas State Board of Pharmacy v. Walgreen Texas Company (Tex.Civ.App. 1975), 520 S.W.2d 845; KMIEC v. Town of Spider Lake (1973), 60 Wis.2d 640, 211 N.W.2d 471; and Clayton v. Bennett (1956), 5 Utah 2d 152, 298 P.2d 531. Mitchell cites especially State of Wyoming v. Kraus, et al. (Wy. 1985), 706 P.2d 1130, holding that declaratory relief was appropriate to challenge the validity of the agency regulations but that it was not proper merely to obtain review of an administrative decision.

Admitting that the respective parties may draw comfort from the cases upon which they rely, we look to the decisions from this Court for guidelines.

In Bailey v. Department of Health and Environmental Sciences (1983), 204 Mont. 253, 664 P.2d 325, Bailey appealed a district court ruling denying his application for a writ of mandamus. Bailey had submitted plans for expansion of a trailer park in Missoula County in 1968, and claimed that the zoning officials had given him “blanket approval” to build according to his plans. On subsequent applications to the zoning authorities for permission to develop further trailer spaces, his applications were denied. He did not proceed further in the administrative proceedings. This Court upheld the denial of mandamus since he had not established a clear legal duty on the part of the zoning authorities to grant the permits. There is no issue in Bailey involving a constitutional attack against the zoning ordinance itself.

In Selon v. Board of Personnel Appeals (Mont. 1981), [_Mont._,] 634 P.2d 646, 38 St.Rep. 1676, we held that the District Court had no jurisdiction for judicial review under the Administrative Procedure Act of an order of the State Board of Personnel Appeals, where the appellant, the Department of Administration, had failed to exhaust its administrative remedies. In Selon, the jurisdictional issue did not involve a constitutional attack upon the administrative procedures.

In BGM Enterprises v. State Department of Social and Rehabilitation Services (1983), 673 P.2d 1205, 40 St.Rep. 1827, this Court dismissed on appeal for lack of jurisdiction because the appellant had not taken advantage of a hearing in the administrative proceedings which would have been provided if BGM had acted in time. No question of constitutional validity of the statutes under which the Department was acting was involved in the BGM appeal.

The controlling case for this action is Jarussi v. Board of Trustees (1983), 204 Mont. 131, 135, 664 P.2d 316, 318. In that case, Jarussi appealed the dismissal by the school board of his employment as principal and teacher in St. Ignatius, Montana. His appeal was based on violations of Montana’s open meeting law, Section 2-3-203, MCA. The school board, after judgment against it in the District Court, raised on appeal the issue that Jarussi had not exhausted his administrative remedies before filing in the District Court. In holding that Jarussi was not required to exhaust administrative remedies, this Court said:

“Moreover, the exhaustion doctrine does not apply to constitutional issues. (Citing authority.) Here, Jarussi claims violation of his constitutional right to observe the deliberations of the School Board under the right to know provisions of the Montana Constitution, Art. II, Section 9. Constitutional questions are properly decided by a judicial body, not an administrative official, under the constitutional principle of separation of powers. Art. Ill, Section 1, 1972 Mont. Const.”

Mitchell’s complaint in this case raises directly the constitutional question of equal protection under the provisions of the off-street parking ordinance adopted by West Yellowstone. The determination of that question is not within the power of the Board of Adjustment of West Yellowstone. When such a bona fide constitutional issue is raised, a plaintiff has a right to resort to the declaratory judgment act for a determination of his rights; and he may not be required to submit himself to the provisions of the ordinance which he claims are unconstitutional. This is so, even though, as the District Court implied, the monetary result to the plaintiff under the zoning ordinance may be inconsequential. The first business of courts is to provide a forum in which the constitutional rights of all citizens may be protected.

As to the claim of West Yellowstone that it is immune from suit under the Declaratory Judgment Act because of Section 2-9-111, MCA, this issue was not disposed of by the District Court, and we do not therefore address it on appeal.

Accordingly, we reverse the summary judgment granted in the District Court and remand the case for further proceedings.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, WEBER, McDONOUGH, HUNT and GULBRANDSON concur.


source: Caselaw Access Project

author: MR. JUSTICE GULBRANDSON

license: Public Domain

text:
    FIRST INTERSTATE BANK OF KALISPELL, N.A., a National Banking Association, Plaintiff and Respondent, v. DWAYNE B. WANN and Kathy A. Wann, Defendants and Appellants.
    No. 88-294.
    Submitted on Briefs Oct. 27, 1988.
    Decided Dec. 8, 1988.
    765 P.2d 749.

      Warden, Christiansen, Johnson & Berg; Gary R. Christiansen, Kalispell, for defendants and appellants.
    Murphy, Robinson, Heckathorn & Phillips, Steve E. Cummings, Kalispell, for plaintiff and respondent.
   MR. JUSTICE GULBRANDSON

delivered the Opinion of the Court.

Defendants appeal from the grant of plaintiff’s motion for summary judgment and the subsequent judgment against the defendant in the amount of $10,262.45 entered by the District Court of the Eleventh Judicial District, Flathead County, Montana. We affirm the judgment.

The sole issue upon appeal is whether the plaintiff, as holder of a promissory note secured by a junior trust indenture, is barred from recovery upon the note after the holder of the senior trust indenture foreclosed upon and sold the indentured property?

The parties in this case do not dispute the facts, which are summarized as follows. On September 14, 1984, the defendants, Dwayne and Kathy Wann, purchased a house and assumed the existing first trust deed executed in favor of Alliance Mortgage Company. The Wanns also signed a promissory note in favor of First Interstate Bank of Kalispell (Bank). This note was secured by a second trust deed on the house purchased by the Wanns.

The Wanns failed to make the semi-annual payments due on the Bank note, so the Bank renewed the note on October 22, 1985, with a monthly payment schedule. The Wanns also failed to make payments on this renewed note and on the note held by Alliance Mortgage. Alliance Mortgage consequently began foreclosure proceedings on the first trust deed. On February 20, 1987, Alliance Mortgage purchased the indentured house at the foreclosure sale with the high bid. The Bank did not bid at this auction.

The Bank thereafter filed suit against the Wanns for nonpayment of the amount owing on their promissory note — an unsecured note by reason of the sale of the indentured property by the owner of the first trust deed. On December 10, 1987, the Bank filed a motion for summary judgment. The Wanns subsequently filed a similar motion.

On February 18, 1988, the court granted the Bank’s motion for summary judgment. Judgment was entered on April 5, 1988 against the defendants in the amount of $10,262.45. This amount reflected $7,338.93 in principal owing on the note, $1,123.52 in interest accrued since June 10, 1986, and $1,800 in costs and attorneys’ fees. The Wanns appeal from this judgment.

A court may grant a motion for summary judgment if no genuine issue of any material fact exists and if the moving party is entitled to a judgment as a matter of law. Rule 56(c), M.R.Civ.P.; Vogele v. Estate of Schock (Mont. 1987), [229 Mont. 259,] 745 P.2d 1138, 1141, 44 St.Rep. 1950, 1953. In the present case, both parties admit that no material issue of fact exists. We therefore need only determine whether the District Court was correct in holding that the plaintiff was entitled to a judgment as a matter of law. We will not overturn this holding unless the District Court abused its discretion.

Appellants contend that the District Court erred in entering a judgment against them for the amount still owing upon the promissory note because the Bank is prohibited from seeking a deficiency judgment for the remaining balance due upon the Bank’s note once the holder of the first trust deed has foreclosed upon the indentured property. Appellants cite to the case of First State Bank of Forsyth v. Chunkapura (Mont. 1987), [226 Mont. 54,] 734 P.2d 1203, 44 St.Rep. 451, as support for this contention.

We note at the outset that the holding in the Chunkapura case is inapposite to the case at hand. The Court in Chunkapura stated that the creditor instituting a judicial foreclosure upon an occupied, single family residential home under a trust deed may not seek a deficiency judgment. Chunkapura, 734 P.2d at 1208, 1210. This holding applies only to the foreclosing creditor. It does not apply to a creditor, such as the Bank, holding a note which is no longer secured because of a foreclosure action taken by another creditor possessing a first trust deed.

The statutory prohibitions against deficiency judgments after foreclosure by advertisement and sale upon a note secured by a trust indenture similarly apply only to the foreclosing creditor. As stated in Section 71-1-317, MCA:

“When a trust indenture executed in conformity with this part is foreclosed by advertisement and sale, no other or further action, suit, or proceedings shall be taken or judgment entered for and deficiency against the grantor or his surety, guarantor, or successor in interest, if any, on the note, bond, or other obligation secured by the trust indenture or against any other person obligated on such note, bond or other obligation. (Emphasis added.)”

Use of the definite article, “the”, plainly indicates that only the creditor possessing the foreclosed note and trust indenture is prohibited from seeking a deficiency judgment or maintaining any other action for amounts still owing on the secured note. This statutory interpretation is in keeping with existing case law which has generally held that a second lienholder whose lien is extinguished by the foreclosure of a first lien may maintain a direct action on the note. See, e.g., Avco Financial Services v. Christiaens (1982), 201 Mont. 117, 652 P.2d 220; Bailey v. Hansen (1937), 105 Mont. 552, 74 P.2d 438; Brophy v. Downey (1902), 26 Mont. 252, 67 P. 312.

The foreclosure by Alliance Mortgage through no fault of the Bank, extinguished the Bank’s security interest in the Wanns’ house. The Bank, with an extinguished lien on the house, was thus entitled to sue directly on the note. The Bank did just that. We therefore hold that the District Court, as a matter of law, did not err in granting the plaintiiFs motion for summary judgment under the facts of this case.

The judgment is affirmed.

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


author: MR. JUSTICE SHEEHY

text:
    STATE OF MONTANA, Plaintiff and Appellant, v. EDWARD SUNDBERG, Defendant and Respondent.
    No. 88-307.
    Submitted on Briefs Oct. 13, 1988.
    Decided Dec. 8, 1988.
    765 P.2d 736.

      Mike Greely, Atty. Gen., Clay R. Smith, Asst. Atty. Gen., Helena, Ted Lympus, County Atty., Ed Corrigan, Deputy, Kalispell, for plaintiff and appellant.
    Gary G. Doran, Kalispell, for defendant and respondent.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

The Attorney General of the State of Montana appeals from an order of the District Court, Eleventh Judicial District, Flathead County, suppressing evidence seized from respondent’s residence pursuant to a search warrant issued December 14, 1987. The question presented to this Court is whether probable cause existed for issuance of the search warrant under the totality of the circumstances, and whether the subsequent suppression of the evidence was appropriate. We reverse.

Although the informant in this case now recants the information given to a Flathead County Sheriff’s Detective, the facts from the record indicate the following: On December 14, 1987, Sergeant Rick Hawk of the Flathead County Sheriff’s Office applied for issuance of a search warrant from the Flathead County Justice Court. The application stated that on December 11, 1987, Hawk interviewed a confidential informant who had advised him that Ed Sundberg of Whitefish and another man in Columbia Falls were both growing marijuana in their respective residences. The informant stated that he knew this because he had been in both residences within the past ten days and had observed growing marijuana. The informant then described each marijuana grower as to height, weight, age and hair color. In addition, informant described the make and year of Sundberg’s car, his place of employment, the name and maiden name of his ex-wife; and told Sergeant Hawk that Sundberg lived with his ex-wife’s grandmother in her parents’ house in Whitefish. Informant revealed that Sundberg grew marijuana in the attic which could be reached by a trap door in his bedroom. This informant stated that he did not know the addresses of the suspects’ homes; but, accompanied by Sergeant Hawk and Detective Glen Fulton, he went to the homes. Parked at the home of the unnamed suspect was a 1987 black Nissan pickup with a Montana license registered to Ed Sundberg.

Sergeant Hawk corroborated informant’s information through public records. The information was all correct and verified. Hawk’s inquiry revealed that one suspect was born in Detroit, Michigan on June 1, 1945; and that he had a criminal record including drug offenses which started in 1969. The latest offense was sale of dangerous drugs in Flathead County in 1981. That charge was reduced to Possession of Dangerous Drugs, a felony, for which he was placed on probation for two years. He listed his employment with the Probation Department as the Burlington Northern Railroad. To corroborate this information Sergeant Hawk obtained public records which showed that Ed and Denise Sundberg lived at the address in Whitefish that informant had taken the officers to and that the Sundbergs did not own the home. It further revealed that Ed Sundberg and the other suspect, whom informant had named, were arrested together in Regina, Saskatchewan, Canada in 1977 for operating a gaming house.

The informant is a self-admitted marijuana user. This declaration against interest is significant to the probable cause issue and will be discussed later.

The above facts plus corroborated facts about the other suspect were all included in the search warrant application. The record does not indicate any additional facts presented to the Justice Court in connection with the issuance of the search warrant. A justice of the peace found the affidavit sufficient to show probable cause and issued the warrant on December 14, 1987.

A search of Sundberg’s residence resulted in the seizure of nineteen 14-inch marijuana plants and materials used to cultivate marijuana. The bedroom described in the other suspect’s home was empty.

Informant’s identity became known to Sundberg, and informant was subpoenaed to give testimony in the presence of Sundberg. Informant then denied giving the incriminating information to Sergeant Hawk.

Sundberg made a motion to suppress the evidence seized on the grounds that first, the application supporting the search warrant contains untrue statements; and, second, that the application fails to show probable cause to support the issuance of a search warrant. The District Court found that the second argument, insufficient probable cause, provided an adequate basis to suppress the evidence and did not proceed any further with defendant’s argument. Therefore, the sole issue before this Court is whether the District Court erred in suppressing the evidence for lack of probable cause.

The Fourth Amendment states:

“The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”

In Mapp v. Ohio (1961), 367 U.S. 643, 81 S.Ct. 1684, 6 L.Ed.2d 1081, the United States Supreme Court created the exclusionary rule as a mechanism to deter police violations of Fourth Amendment search and seizure provisions while Ker v. California (1963), 374 U.S. 23, 83 S.Ct. 1623, 10 L.Ed.2d 726, applied the restrictive Fourth Amendment standards for searches by federal agents to the states. This rule prohibits the presentation in court of evidence which has been seized by law enforcement officers in violation of the Fourth Amendment.

In the case at bar Sergeant Hawk took reasonable precautions and made serious effort to comply with Fourth Amendment requirements when he corroborated the information given him voluntarily by the confidential informant.

To determine whether there was probable cause to issue the search warrant we must look only at information contained in the four corners of the application. State v. Jensen (Mont. 1985), [217 Mont. 272,] 704 P.2d 45, 42 St.Rep. 1191; State v. Isom (1982), 196 Mont. 330, 641 P.2d 417. In Jensen, this Court decreed that the test for determining probable cause for issuance of a search warrant is the “totality of the circumstances” test set forth in Illinois v. Gates (1983), 462 U.S. 213, 103 S.Ct. 2317, 76 L.Ed.2d 527.

Probable cause to justify search warrants is a sufficient showing that incriminating items, namely items reasonably believed to be connected with criminal behavior, are located on the property to which entry is sought. It does not require that the occupant be guilty of any offense and need only be supported by probable cause to believe that the items sought will be found in the place to be searched and that these are seizable by being adequately connected with criminal behavior. Zurcher v. Stanford Daily (1978), 436 U.S. 547, 98 S.Ct. 1970, 56 L.Ed.2d 525. Probable cause, defining the point at which the individual’s interest in privacy must yield to the governmental interest in investigating criminal behavior by searching for incriminating items, is a practical, nontechnical concept of criminal procedure, in effect amounting to the best compromise that has been found for accommodating often opposing interests, on the one hand the interest of the citizen to be protected from unreasonable intrusions on his privacy and security, and on the other the interest of the community to be adequately protected by efficient law enforcement. Brinegar v. United States (1949), 338 U.S. 160, 69 S.Ct. 1302, 93 L.Ed. 1879. “Requiring more would unduly hamper law enforcement. To allow less would be to leave law-abiding citizens at the mercy of the officers’ whim or caprice.” See Brinegar, at 176. 69 S.Ct. at 1311. “. . . ‘[PJrobable cause’ means less than evidence which would justify condemnation. . .” Locke v. United State (1813), 7 Cranch 339, 347, 3 L.Ed 338, 347. “Probable cause” is not a prima facie showing of criminal activity, but only its probability. Spinelli v. United States (1969), 393 U.S. 410, 419, 89 S.Ct. 584, 21 L.Ed.2d 637. Considerably less evidence is required for the issuance

of an arrest or search warrant than for conviction; and legally unimpeachable findings of probable cause can rest upon evidence, for instance hearsay, which is not legally admissible at the criminal trial itself. United States v. Ventresca (1965), 380 U.S. 102, 85 S.Ct. 741, 13 L.Ed.2d 684; Aguilar v. Texas (1964), 378 U.S. 108, 84 S.Ct. 1509, 12 L.Ed.2d 723; Jones v. United States (1960), 362 U.S. 257, 80 S.Ct. 725, 4 L.Ed.2d 697.

The Supreme Court has never required either (in the case of arrest) that guilt should be more probable than not or (in the case of search and seizure) that it should be more probable than not that the seizable items will be found where they are thought to be. The Court summed up its attitude in Brinegar, supra: “In dealing with probable cause ... we deal with probabilities. These are not technical; they are factual and practical considerations of everyday life on which reasonable and prudent men, not legal technicians, act . . .” 338 U.S. at 175, 69 S.Ct. at 1310.

Prior to Gates, courts, including the Montana Supreme Court, used the two-pronged Aguilar-Spinelli test. This test looked at the basis of knowledge and the veracity of the informant. Montana has adopted the less stringent “totality of the circumstances” Gates test. State v. O’Neill (1984), 208 Mont. 386, 679 P.2d 760. It replaces the two-pronged Aguilar-Spinelli Test. State v. Hendrickson (Mont. 1985), [217 Mont. 1,] 701 P.2d 1368, 42 St.Rep. 981.

In applying the Gates test we hold that the information contained in Sergeant Hawk’s affidavit satisfies the probable cause test set forth in Gates. The affidavit particularly stated the place where the contraband could be found, the kind of drugs involved, and accurate description of the defendant, his marital status, his ex-wife’s name and maiden name, an accurate description of the defendant’s car, an accurate description of the wattage of the cultivation lights used to grow the marijuana, and an admission against informant’s interest. Admissions against interest are sufficient to establish probable cause, even though related through a hearsay source. State v. Paschke (1974), 165 Mont. 231, 527 P.2d 569; United States v. Harris (1971), 403 U.S. 573, 91 S.Ct. 2075, 29 L.Ed.2d 723.

Accordingly, this affidavit was sufficient not only under the totality of the circumstances test, but also because the informant admitted his marijuana use. This was an admission against penal interest by reason of the fact that Section 45-9-102, MCA, makes it a criminal offense to possess marijuana. In Harris, supra, the warrant’s affiant recited extrajudicial statements of a declarant who feared for his life and safety if his identity were revealed. These statements were against the informant’s penal interest. The Supreme Court said, “Common sense in the important daily affairs of life would induce a prudent and disinterested observer to credit these statements. People do not lightly admit a crime and place critical evidence in the hands of the police in the form of their own admissions. Admissions of crime, like admissions against proprietary interests, carry their own indicia of credibility — sufficient at least to support a finding of probable cause to search. That the informant may be paid or promised a “break” does not eliminate the residual risk and oppobrium of having committed criminal conduct . . .” Harris, 403 U.S. at 583, 584. 91 S.Ct. at 2082.

Respondent further argues that the “totality of the circumstances” test coupled with the Aguilar-Spinelli test was correctly applied by the District Court. The record shows that the District Court based its decision on a belief that the informant’s information was hearsay information. The informant stated that he had been in the Sundberg home within the last ten days and had seen the marijuana growing. We do not agree that this constitutes hearsay evidence. It is first-hand evidence. Nor do we agree that Sergeant Hawk had no reason to trust the veracity of this informant. An informant in custody, who makes a voluntary admission against interest is in an excellent position to give law enforcement officers the information needed to discover covert criminal activity. The average citizen seldom has occasion to observe criminal activity such as drug use or marijuana growing. A criminal or imprisoned informer often has this kind of information and is therefore believable because he may associate with criminals himself. And yet, the criminal informant is not considered as reliable and believable as a citizen informant. The reliability of a marijuana user to know where marijuana is grown is of great probability.

Based on the above analysis, the “totality of the circumstances” from the face of Sergeant Hawk’s affidavit clearly supports probable cause. The magistrate approved that affidavit from its four corners. When a search warrant has been issued, the determination of probable cause must be made solely for the information given to the impartial magistrate and from the four corners of the search warrant applications. State v. O’Neill (1984), 208 Mont. 386, 679 P.2d 760; State v. Isom (1982), 196 Mont. 330, 641 P.2d 417; Thomson v. Onstad (1979), 182 Mont. 119, 594 P.2d 1137. In O’Neill this Court quoted United States v. Ventresca, supra, saying that an affidavit supporting a search warrant is to be interpreted by the magistrate and examined by the reviewing court in a common sense, realistic fashion and without a grudging or negative attitude that will tend to discourage police officers from seeking warrants. “Ventresca, also requires reviewing courts to avoid hypertechnical interpretations of warrant applications and, in doubtful or marginal cases, to resolve the issue with the preference for warrants in mind.” O’Neill, 679 P.2d at 764.

In Ventresca, the Court said, “While a warrant may issue only upon a finding of ‘probable cause,’ this Court has long held that ‘the term “probable cause”. . . means less than evidence which would justify condemnation,’ ” Ventresca, 380 U.S. at 107, 85 S.Ct. at 745, quoting Locke, supra, and that “the finding of ‘probable cause’ may rest upon evidence which is not legally competent in a criminal trial.” Ventresca, quoting Draper v. United States, (1959) 358 U.S. 307, 311, 79 S.Ct. 329, 332, 3 L.Ed.2d 327.

The issuing magistrate need only determine that there is a probability, not a prima facie showing of criminal activity. O’Neill, supra, quoting Beck v. Ohio (1964), 379 U.S. 89, 85 S.Ct. 223, 13 L.Ed.2d 142. Sergeant Hawk’s affidavit contained information that would have indicated to the magistrate that there was a fair probability that contraband would be found at both residences. It stated that one of the men had a criminal record that included drug offenses which started 18 years ago in 1979. In 1981 he was charged with the sale of dangerous drugs in Flathead County. That charge was reduced to Possession of Dangerous Drugs, a felony, for which he was placed on probation for two years. Sundberg’s Nissan pickup, exactly as described by the informant was parked in front of that suspect’s residence when the informant took the police to show them the homes.

The totality of these circumstances would lead any reasonable magistrate to the conclusion that the affidavit which recited these facts contained a substantial basis that probable cause to search the two premises was present. The District Court erred in holding otherwise. The corroborating evidence found by the law enforcement officers to support the informant must be seen and weighted not in terms of library analysis by scholars, but as understood by those versed in the field of law enforcement. O’Neill, supra; United States v. Cortez (1981), 449 U.S. 411, 101 S.Ct. 690, 66 L.Ed.2d 621.

It is important to note that after-the-fact scrutiny by the reviewing court of the sufficiency of an affidavit should not take the form of de novo review. O’Neill citing Gates, 462 U.S. at 236, 103 S.Ct. at 2331, 76 L.Ed.2d at 547. The magistrate’s determination of probable cause should be paid great deference by reviewing courts. Gates, supra, Spinelli v. United States (1969), 393 U.S. 410, 89 S.Ct. 584, 21 L.Ed.2d 637.

The burden of proof is on the defendant to show that search and seizure were unlawful. Section 46-13-302(4), MCA. The defendant has not met this burden.

Accordingly, the items described in the search warrant and seized will not be suppressed. Additionally, the other items seized, which are mainly items used in the cultivation of marijuana, will not be suppressed. In State v. Quigg (1970), 155 Mont. 119, 467 P.2d 692, this Court said that items or things other than those described in the warrant may be seized so long as a reasonable relationship between the search authorized by the warrant and the seizure of the thing not described is demonstrated.

Defendant argues finally that all the information contained in the affidavit was unreliable and misstated. However, a more objective interpretation of the facts stated in the affidavit suggests that contraband was present at both residences. The fact that contraband was found only in the Sundberg residence and not in the other described residence does not diminish the rationality of this conclusion.

For the foregoing reasons, the order of the District Court is reversed and the cause remanded for further proceedings.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, WEBER, GULBRANDSON, HUNT and McDONOUGH concur.


author: MR. JUSTICE HARRISON

text:
    THOMAS L. TOPE and Anna Tope, Plaintiffs and Appellants, v. LILLIAN RUTH TAYLOR, Defendant and Respondent.
    No. 88-183.
    Submitted on Briefs Oct. 20, 1988.
    Decided Dec. 9, 1988.
    768 P.2d 845.

      Emmons & Coder, Robert J. Emmons, Great Falls, for plaintiffs and appellants.
    Hoyt and Blewett, Alexander Blewett, III, Great Falls, for defendant and respondent.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

This case was tried to a jury in the Twelfth Judicial District Court, Chouteau County, the Honorable Gordon R. Bennett, District Judge, sitting for the Honorable Chan Ettien, District Judge, after remand from a summary judgment appeal. The jury returned a verdict in favor of the defendant, Lillian Ruth Taylor, and the plaintiffs appeal. We affirm.

On May 23,1974, Leslie Taylor drew his last will and testament in the law offices of Hauge, Hauge, Ober and Spangelo in Havre, Montana. Attorney Lester Hauge retained a copy. By his will, Leslie Taylor gave 240 acres to Rodney Frazier, $10,000 to his sister, Lillian Taylor, and the remainder of his estate, later valued at $506,000, to Tom and Anna Tope, in equal shares. Tom Tope and Anna Tope were named as executor and alternative executrix. It is undisputed that Lillian, Tom and Anna were each aware of the will and its contents. This dispute arises because the original will was not produced after Leslie’s death.

On May 26, 1974, Leslie went to the Columbus Hospital in Great Falls for colon surgery. While still in the hospital, Leslie became dissatisfied with the planned disposition of his property and began making changes on the copy, transcribing the changes onto the original will. These changes included a division of the 240 acres, giving 160 acres to Rodney and Francis Frazier, and 80 acres to Clinton Frazier. He also interlineated changes giving the Topes one-half of the farmland and Lillian the remaining one-half. There was no republication or re-attestation of the changed dispositions.

Upon leaving the hospital, Leslie was unable to continue living at his ranch due to his poor and weakened condition. He began living at the family home in Fort Benton with the assistance of Bobbi Bolta, a sixteen-year-old girl, hired to care for him on a full time basis.

Testimony indicated that between May, 1974, and Leslie’s death in March, 1975, he was concerned about leaving such a substantial amount of his property to the Topes, believing Tom Tope to be an inexperienced rancher. Leslie was aware of debts Tom had incurred and was worried liens or claims would be laid against the ranch. Rather than by will, Leslie intended to provide for the Topes in another manner.

Shortly before his death, Leslie and Lillian agreed to sell 10,000 acres of grassland and certain cattle and livestock to the Meissner brothers. While an oral agreement was reached before Leslie entered the hospital, the purchase agreement was executed only two days prior to Leslie’s death. The proceeds from the sale were placed in Leslie and Lillian’s joint account. In addition, Leslie signed certificates of title to his 1972 International pickup and 1971 Oldsmobile, and told Lillian he wanted her to give those titles to the Topes.

Leslie Taylor entered the hospital on March 22, 1975. He died six days later. Testimony at trial conflicted as to the events of March 22. Lillian stated she took Leslie to the hospital. She testified that upon arriving at his home in Fort Benton, Leslie was sitting on the edge of his bed, looking at what appeared to be his will. Lillian contends that Leslie said he was not satisfied with the will, and did not think it would “hold up.” Leslie told Lillian to handle everything and assist the Topes as she saw fit. Lillian testified that Leslie then took the will and the copy into the kitchen, and burned them in the stove.

Bobbi Bolta contradicted Lillian’s testimony about these events. Bobbi stated she took Leslie to the hospital. She also indicated that Lillian was never alone with Leslie for him to burn the will. Nurses’ records indicated Leslie’s sister accompanied him to the hospital.

Lester Hauge telephoned Tom Tope after Leslie’s death. Mr. Hauge informed Tom that he was a beneficiary and executor of the estate. Tom told the attorney that he knew Leslie had changed his will, but did not know the exact changes. Mr. Hauge was unaware of the Meissner sale, the joint account or the signed certificates of title.

Two or three weeks after Leslie’s death, Anna and Tom Tope met with Lillian at her home to discuss the handling of Leslie’s affairs. The testimony of the events surrounding this meeting are varied. Tom testified that Lillian told him “there had been some changes,” but did not specify “changes in what.” Tom assumed, but was not certain, the changes were due to the recent cattle and livestock sale to the Meissners. In addition, Tom assumed Lillian was in possession of Leslie’s will because she had his other personal items. Lillian never specifically told the Topes she had the will, although Anna stated Lillian offered at that meeting to let them read it, but they declined. Tom, however, did not recall the offer.

Both Tom and Anna testified that Lillian promised she would do her best to carry out Leslie’s wishes. Tom assumed that Leslie’s wishes and Leslie’s will were one and the same. By inference, Tom assumed he would receive the majority of Leslie’s estate whether or not the will was produced.

The will was never produced. Lillian petitioned for letters of administration of intestacy and requested distribution of the estate to her as sole lawful heir. She was appointed the personal representative of the estate. Under the decree of final distribution entered in March of 1976, Lillian received the entire estate, with appraised assets of over $500,000.

Between 1976 and 1982, Lillian gave the Topes assets from the estate including case, totaling over $250,000. Lillian required the Topes to execute promissory notes in exchange for two cash presentments. These notes were canceled by the trial court.

In October of 1982, when the recently divorced Topes were facing financial disaster, Lillian told Anna that she was going to “start from the ground up” with respect to the distribution of the estate to them. Upon learning of Lillian’s statement, Tom decided to probate Leslie’s will in an effort to obtain what he believed was rightfully his. This court found Tom’s petition to probate the will was barred by the applicable three-year statute of limitations. In the Matter of the Estate of Taylor (1984), 207 Mont. 400, 675 P.2d 944. However, we further stated that Tom could proceed through “any other remedy available to him.” Estate of Taylor, 675 P.2d at 947.

Tom filed a complaint against Lillian on March 24, 1984. An amended complaint was served in July of 1984, with Anna joined as plaintiff. The Topes pleaded several theories of recovery, including fraud, constructive fraud, laches and estoppel. The trial judge, considering all the evidence before him, including depositions of all the parties, determined no genuine issue of material fact existed and granted summary judgment to Lillian on each of the theories raised by the Topes. This Court reversed, finding the claim premised on promissory estoppel required reversal of summary judgment. Tope v. Taylor (Mont. 1986), [224 Mont. 131,] 728 P.2d 789, 43 St.Rep. 2074.

On remand, the jury found that Leslie Taylor had indeed destroyed his will prior to his death. Judgment was entered in favor of Lillian.

The Topes raise the following issues for our review:

1. Did the District Court err in refusing to instruct the jury on estoppel and laches and include those issued in the special verdict form for the jury?

2. Did the District Court err in applying the maxim “Equity Aids the Vigilant” as a bar to equitable relief?

3. Did the District Court err in refusing to enter findings of fact, conclusions of law and judgment for the equity claims asserted by the plaintiffs?

4. Was the evidence sufficient to justify the verdict?

5. Did the District Court err in denying the plaintiffs’ request for a new trial?

For purposes of this appeal, we shall join plaintiffs’ issues one, two and three which deal with potential equity claims.

As an additional issue for review, respondent urges this Court to award attorney’s fees based upon the alleged frivolous appeal filed by plaintiffs.

ISSUE NO. 1: EQUITY CLAIMS

Plaintiffs requested the District Court accept proposed instructions (numbers 28 through 31) relating to laches and equitable estoppel. Plaintiffs sought to bar Lillian from claiming Leslie had destroyed his will in 1975. The trial judge refused the instructions, stating the plaintiffs failed to present a case on that theory. We find the judge’s decision appropriate.

Ordinarily, a party is entitled to jury instructions adaptable to his theory of the case. Cremer v. Cremer Rodeo Land and Livestock Co. (1979), 181 Mont. 87, 592 P.2d 485. However, as pointed out in Cremer, this rule is not absolute. The instructions must be supported by credible evidence. This factor was found by the District Court to be lacking.

“Laches . . . means negligence in the assertion of a right; ... it exists when there has been unexplained delay of such duration or character as to render the enforcement of the asserted right inequitable.”

Montgomery v. Bank of Dillon (1943), 114 Mont. 395, 408, 136 P.2d 760, 766. Similarly, estoppel is a principle of equity which bars a party from the benefit of a prior wrong. Kenneth D. Collins Agency v. Hagerott (1984), 211 Mont. 303, 684 P.2d 487. In support of these theories, plaintiffs contend their case was impaired because of Lillian’s failure or refusal to state Leslie’s will was destroyed. Yet, they failed to present any evidence in support of such impairment. Their principal witness, Bobbi Bolta, testified to the events of March 22, 1975. Bobbi claimed she drove Leslie to the hospital and that Leslie did not have the opportunity to burn his will. Her testimony did not indicate doubts or reservations due to the passage of time. Nor was it evident exhibits, documents or other witnesses became unavailable during the long delay.

The determination of equitable issues rests solely within the discretion of the District Court. Downs v. Smyk (1982), 200 Mont. 334, 651 P.2d 1238. We find no abuse of discretion.

Although plaintiffs sought to use laches and equitable estoppel against the defendant, the District Court found these principles to be more illustrative of the plaintiffs’ conduct. As stated in the court’s opinion and order:

“[P]laintiffs were not entitled, on the record made, to equitable consideration simply because, whatever devious, inequitable or negligent act or acts might have been committed by the defendant, the plaintiffs slept on their obvious rights and remedies for seven long years. They ignored their right, indeed their duty, to present their copy of the will for probate, if they could not secure the original and no subsequent will or codicil had appeared. Equity aids the vigilant.”

We agree with the District Court’s finding that the plaintiffs were not entitled to the aid of equity.

Lillian never unequivocally stated Leslie’s will was destroyed. However, her actions and representations could lead to no other conclusion. By applying for letters of administration, Lillian certified no will existed. The plaintiffs were aware that they were both beneficiaries and executors of the will. We find Lillian’s actions were more than sufficient to alert the Topes to a potential will contest.

Five issues on the special verdict form were submitted to the jury:

1. Did Les Taylor destroy his will?

2. Did Les Taylor obliterate the residuary clause of his will with the intention of revoking it?

3. Did the defendant commit actual fraud?

4. Did the defendant commit constructive fraud?

5. Are the plaintiffs entitled to punitive damages?

The jury answered “yes” to the first question, rendering moot the remaining four questions. No questions of equity were ever placed before the jury, and as discussed above, nor were such claims appropriate. Therefore, the trial judge was not required to make findings and conclusions under Rule 52(a), M.R.Civ.P.

ISSUE NO. 2: JURY VERDICT

Plaintiffs allege the jury verdict was based on insufficient evidence, claiming Bobbi Bolta’s testimony defeated Lillian’s claim that Leslie destroyed his will.

When a jury verdict is appealed to this Court, our function is to determine whether there is substantial credible evidence to support the verdict. Clark v. Norris (Mont. 1987), [226 Mont. 43,] 734 P.2d 182, 44 St.Rep. 444.

“The standard for review is substantial evidence. If substantial evidence supports the case of the prevailing party the verdict will stand. The evidence will be viewed in a light most favorable to the party that prevailed at trial and, if the evidence conflicts, the credibility and weight given to the evidence is the province of jury and not this Court.”

Mountain West Farm Bureau Mutual Ins. v. Girton (Mont. 1985), 215 Mont. 408, 697 P.2d 1362, 1363, 42 St. Rep. 500, 501. We have examined the 751 pages of transcript provided on appeal and conclude such substantial credible evidence exists to support the jury’s verdict.

Numerous witnesses were presented at trial. Most testimony focused on Leslie’s dissatisfaction with his planned disposition. William Kelly, a long-time friend of the decedent, testified Leslie was aware of Tom’s debt problems and was concerned the ranch would fall prey to creditors. Joe Meissner testified that Leslie wanted Lillian to receive all the proceeds from the sale of the grassland which indicated an intent to provide for his sister. Rodney Frazier also testified regarding Leslie’s disposition of his assets.

More directly, plaintiffs’ allegations focus on the credibility of the witnesses presented at trial. Bobbi Bolta claimed she drove Leslie to the hospital on March 22, 1975. In addition, Bobbi testified that Lillian could not have seen Leslie burn his will, because she was never alone with Leslie. Lillian said he did burn his will in the kitchen stove before being taken to the hospital. As noted by the trial court:

“This is the judgment that is peculiarly and almost exclusively within the realm of the jury and cannot be upset unless no reasonable person could reach the verdict arrived at. Here the question was forthright and rudimentary: did the deceased destroy the document or didn’t he? The plaintiffs’ key witness said he didn’t and the defendant said he did. The jury apparently believed the defendant and disbelieved the plaintiffs’ witness. (Emphasis in original.)”

We agree. It is not for this Court to retry factual determinations. Dahl v. Petroleum Geophysical Co. (Mont. 1981), [_ Mont. _,] 632 P.2d 1136, 38 St.Rep. 1474.

ISSUE NO. 3: REQUEST FOR A NEW TRIAL

Plaintiffs claim the lower court erred in refusing to grant a new trial alleging an error in law occurred at trial. Section 25-11-102(7), MCA. Plaintiffs claim error in the trial court’s refusal to instruct the jury on instructions 28 through 31 and they challenge the sufficiency of the evidence supporting the jury verdict. Section 25-11-102(6), MCA. For purposes of our review, we recognize that the decision to grant or deny a new trial is within the sound discretion of the trial court, and will not be overturned absent a showing of manifest abuse of discretion. Walter v. Evans Products Co. (1983), 207 Mont. 26, 672 P.2d 613.

Previously we examined the appropriateness of plaintiffs’ equity instructions. As mentioned, these instructions were not supported by the evidence presented at trial, nor did the trial judge find plaintiffs entitled to the aid of equity. The opinion and order supports this conclusion.

The lower court’s discretion to grant a new trial for insufficiency of the evidence is exhausted when it finds substantial evidence to support the verdict. Lindquist v. Moran (1983), 203 Mont. 268, 662 P.2d 281. The court may not grant a new trial only on the basis that it chose to believe one line of testimony different from that which the jury believed. Lyndes v. Scofield (1979), 180 Mont. 177, 589 P.2d 1000. Yet, plaintiffs’ argument was based almost entirely on this ground. As recognized by the lower court, the decision is a matter for the trier of fact — the jury. The request for new trial was properly denied. We find no abuse of discretion.

ISSUE NO. 4: ATTORNEY’S FEES

Finally, defendant has requested we impose sanctions for a frivolous appeal under Rule 32, M.R.App.P. We decline to do so. Where a reasonable ground for an appeal exists, no sanctions under Rule 32 will be imposed. Searight v. Cimino (Mont. 1988), [230 Mont. 96,] 748 P.2d 948, 45 St.Rep. 46.

Affirmed.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES WEBER, SHEEHY and McDONOUGH concur.


text:
    LEASING, INC., a Montana corporation, Plaintiff and Respondent, v. DISCOVERY SKI CORPORATION, a Montana corporation, and Peter Pitcher, Defendants and Appellants.
    No. 88-166.
    Submitted on Briefs Nov. 3, 1988.
    Decided Dec. 13, 1988.
    765 P.2d 176.
    J. Allen Bradshaw, Philipsburg, for defendants and appellants.
    Richard J. Pyfer, Small, Hatch, Doubek & Pyfer, Helena, for plaintiff and respondent.
   MR. JUSTICE SHEEHY

delivered the opinion of the Court.

Defendant Discovery Ski Corporation (Discovery) appeals from an order of the First Judicial District, Lewis and Clark County, requiring Discovery to dismiss its action against Leasing, Inc. (Leasing) filed in Justice Court, Granite County, on the grounds that filing the Justice Court action was an abuse of process. We affirm.

The question presented on appeal is: Did the District Court correctly dismiss Discovery’s action as an abuse of process and a breach of contract terms when Discovery filed a complaint in Justice Court in Granite County with full knowledge that an action had previously been filed against it by Leasing in Lewis and Clark County?

Leasing is a Helena business that leased fire suppression equipment to Discovery. On October 10, 1986, Leasing filed a complaint against Discovery in the Lewis and Clark District Court for breach of contract.

The complaint alleged that on August 7, 1984, Discovery agreed to lease fire suppression equipment from Leasing for a term of ten years at $165.00 per month; that Leasing performed its part of the contract; and that Discovery now refuses to make its payments. The contract signed by the parties contains the following language:

“13. The LESSOR AND LESSEE agree that any cause of action filed as a result of a breach or violation of any terms of this agreement shall be filed in the City of Helena, Lewis and Clark County, State of Montana.

“The LESSOR AND LESSEE understand and agree that performance of this agreement is in the City of Helena, Lewis and Clark County, State of Montana.”

The sequence of events leading to this dispute is as follows:

October 11, 1986, Peter Pitcher, an officer of Discovery, was served with summons and complaint in this action, by certified mail. The cause of action was for failure to pay sums owed to Leasing under the lease.

October 14, 1986, defendant Discovery was served in the same manner.

October 23, 1986, Pitcher filed a complaint in Justice Court in Granite County, Philipsburg, Montana, against Leasing. The complaint alleged that Leasing failed to comply with the Montana Fire Code in that Leasing failed to install an automatic electric power shut off device which is required by law.

October 28, 1986, the Granite County summons and complaint were served by the sheriff on Neil Flaherty (not a party to this action) as owner of Leasing.

November 13, 1986, Leasing made a motion to consolidate the Granite County justice court action and the Lewis and Clark County action on the ground that the subject matter was the same. The motion was denied December 12, 1986.

November 18, 1986, Leasing served summons and complaint on Pitcher and Discovery by sheriff’s service.

December 11, 1986, Discovery, without Pitcher, made a special appearance and a motion to dismiss Leasing’s action on the ground that jurisdiction had attached in Granite County.

May 15,1987, Leasing moved for default on the first action on both Discovery and Pitcher for failure to appear. A hearing on that motion was set for May 28, 1987.

May 26, 1987, Discovery and Pitcher made a special appearance to dismiss Leasing’s action and at the same time responded to Leasing’s motion for entry of default for failure to answer by asserting that no answer was due because the previous motion to dismiss for lack of jurisdiction had not been ruled on. They also noted they would not appear at the May 28, 1987, hearing on the motion for default.

The general rule of venue is that the proper place of trial for all civil actions is in the county in which the defendants . . . reside at the commencement of the action. Section 25-2-118, MCA; see also Deimler v. Ostler (1979), 183 Mont. 480, 600 P.2d 814. However, in actions upon contracts, venue is governed by Section 25-2-121(b), MCA: The proper place of trial for actions upon contracts is:

“. . . (b) the county in which the contract was to be performed. The county in which the contract is to be performed is:

“(i) the county named in the contract as the place of performance,

The contract between Leasing and Discovery contains express terms that the place of performance is Helena, in Lewis and Clark County. The terms of this contract are not contradicted.

When, at the time of contracting, the parties have agreed upon a particular county wherein they mutually intended their contract was to be performed such agreement will be respected and given effect for it is a part of the freedom of contract to select the place where the contract will be performed. Hardenburgh v. Hardenburgh (1944), 115 Mont. 469, 146 P.2d 151.

The contract before us, signed by all parties, plainly indicates that it was the mutual intention of the parties at the time of contracting that the contract was to be performed in Lewis and Clark County and any action brought on the contract was to be brought in Lewis and Clark County.

Nonetheless, Discovery, with full knowledge of the pending Lewis and Clark County District Court suit by Leasing, filed an action against Leasing, in the Justice Court of Granite County. This was an attempt by Discovery to thwart the plain provisions of the written contract, and a use of the court system to accomplish that goal. Such action constituted an abuse of process. Brault v. Smith (1984), 209 Mont. 21, 28-29, 679 P.2d 236, 240.

The District Court is affirmed.

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


author: MR. JUSTICE HARRISON MR. JUSTICE SHEEHY,

text:
    VICTORIA S. WILLIAMS and Larry D. Williams, Plaintiffs and Appellants, v. SPENCER SELSTAD and Dawn Selstad, Defendants and Respondents.
    No. 88-190.
    Submitted Oct. 11, 1988.
    Decided Dec. 13, 1988.
    766 P.2d 247.
    Skaggs Law Firm; Robert H. Skaggs argued, Billings, for plaintiffs and appellants.

      Peterson, Schofield & Leckie; K.D. Peterson argued, Billings, for defendants and respondents.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

This appeal arises from a grant of summary judgment in the District Court of the Thirteenth Judicial District, Yellowstone County, Montana. A motorist was injured when a horse ran onto the county highway located within a herd district. The lower court held these livestock owners owed no duty to the appellants as a matter of law. We affirm.

Appellants allege Victoria Williams was driving on 12-Mile Road near Shepherd, Montana, when a horse owned by the respondents ran onto the highway. In her attempt to avoid the horse, Victoria lost control of her vehicle and was injured. The parties have stipulated that the accident occurred on a secondary county road which is located within a “herd district,” but which is not part of the Federal-Aid Primary Highway System.

Appellants argue the respondents negligently failed to maintain fences on their property adjoining 12-Mile Road, and negligently failed to restrain and confine the horse, “thereby permitting said horse to run at large . . .” Appellants also allege that “Defendants knew, or should have known, that their negligence as heretofore described would in fact result in said horse running at large . . .” Appellants also rely on the doctrine of res ipsa loquitur.

Respondents moved to dismiss the action. After considering the stipulations, the motion to dismiss was treated by the District Court as a motion for summary judgment. By order and memorandum dated January 20, 1988, the District Court granted respondents’ motion. The court held that herd district statutes were designed only to protect other land owners and thus were not exceptions to the open range doctrine.

Although the open range doctrine relieves owners or possessors of livestock of a duty to keep their livestock from wandering onto the roadway, appellants argue that the herd district is a legislative exception to this rule. In support of this theory, appellants note the Legislature has otherwise modified the open range doctrine by preventing livestock from running at large in certain areas through enactment of Sections 60-7-101 through 60-7-205, MCA (state highways which have been designated as part of the National System of Interstate or Defense Highways or as part of the Federal-Aid Primary System). Similarly, they argue, because Sections 81-4-301 through 81-4-309, MCA, provide for the creation of herd districts and penalties for those who “shall willfully permit” livestock to “run at large within any herd district,” the no-duty rule no longer applies. We disagree with this conclusion.

Recently we have restated that the law of the open range is the law of Montana and that the exceptions enacted by the Legislature have been carefully crafted. State ex rel. Martin v. Finley (Mont. 1987), [227 Mont. 242,] 738 P.2d 497, 499, 44 St.Rep. 1050, 1052. We are here confronted with a livestock statute which makes it a misdemeanor to willfully allow livestock to roam at large within a herd district. The question we must answer is whether this statute was intended by the Legislature to impose a duty on livestock owners to keep livestock from wandering onto the roadway within the herd district.

Section 81-4-306, MCA, provides:

“(1) Any person who is the owner or entitled to the possession of any horses, mules, cattle, sheep, asses, hogs, or goats, who shall willfully permit same to run at large within any herd district, shall be guilty of a misdemeanor and upon conviction thereof shall be punished by a fine of not less than $50 or more than $250 for each offense. Each day that each five head or less of such horses, mules, cattle, sheep, asses, hogs, or goats are willfully permitted to run at large shall constitute a separate offense.

“(2) Any person who is the owner or entitled to the possession of any bull, stallion, or jackass over 1 year of age who shall willfully permit same to run at large within any herd district shall be guilty of a misdemeanor and upon conviction thereof shall be punished by a fine of not less than $50 or more than $250 for each offense. Each day that such bull be permitted to run at large shall constitute a separate offense.”

In order to determine whether the Legislature intended to create a duty to motorists, we look to the plain language of the statute and to the practical implications of imposing such a duty. Initially, we point to the definition of open range as defined in Section 81-4-203, MCA, wherein the Legislature specifically included highways:

“The term ‘open range’ includes all highways outside of private enclosures and used by the public whether or not the same have been formally dedicated to the public.”

Nothing in this definition, or in the herd district statutes removes the no-duty rule of the open range from applying to highways, whether they pass through a herd district or not.

In this case, we agree with the District Court that the herd district statutes were not designed to protect motorists but were only intended to protect landowners and owners of livestock. Recently, in State ex rel. Martin, supra, we examined the open range doctrine and the statutory exceptions which we noted were carefully crafted by the Legislature. Such exceptions include those enumerated under Section 60-7-101 et seq., MCA, where the Legislature’s goal was to strike a balance between the needs of Montanans who raise livestock and the need to make Montana’s highways safer for motorists. Similarly, the Legislature has specifically stated that certain kinds of livestock shall not wander at large on open range. Sections 81-4-204, -207, -208 and -210, MCA.

It is simply not clear that Montana’s Legislature intended to create a duty owed to motorists through enactment of the herd district statutes. Appellants point to the Federal District Court’s decision in Read v. Buckner (D.Mont.1981), 514 F.Supp. 281, where, in a similar case, the court refused to grant the defendant’s motion for summary judgment. The court agreed with the plaintiffs argument that Sections 81-4-201 and 81-4-202, MCA, create a civil cause of action by a motorist against one who willfully permits swine, sheep or goats to run at large. The court reasoned:

“Even if in 1895 the Legislature intended to protect only landowners against damage caused by swine, it is difficult to believe that in 1945 a legislature fully aware of paved roads, automobiles, and accidents did not, by changing the status of sheep and goats, intend that the protection of the law should extend to all who were injured by violations of it. Certainly the language contains no limitations.”

Read, 514 F. Supp. at 283.

The appellants urge us to accept this reasoning with respect to the herd district statutes. However, we find this reasoning unpersuasive. In fact, such a proposition merely begs the question: If the Legislature was aware of the problems these animals created for motorists, and intended to create civil liability to protect motorists, why did not the Legislature simply put that into the statutes? We should not credit the Legislature with an intent to create a civil duty where there is nothing in the legislation to lead us to that conclusion.

We are not persuaded this was the Legislature’s intent because imposing such liability under the herd district statutes would likely result in strange and amorphous liability rules. For instance, liability would result unexpectedly where the herd district is established only for a portion or portions of a year, or where districts are established in a checkerboard fashion along a county road. There are a multitude of scenarios imaginable which illustrate the problems with such a rule and which militate against that construction. We hold the Legislature did not intend to change the open range no-duty rules through enactment of the herd district statutes.

The judgment of the District Court is affirmed.

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

MR. JUSTICE SHEEHY,

dissenting:

It is no credit to our Court that it follows meekly the fundamental errors of past decisions of this Court. When former interpretations of law take away a person’s right of remedy, the basic underpinnings of those interpretations are called to account. For if equal justice under the law is the supreme goal of American justice, inequality of right or result defeats that goal. The legislature cannot be blamed for this decision; the legislature rightly determined when and how livestock owners should control their animals at large. It is judge-made law, and not legislative fiat, that applies livestock containment laws to automobiles. Nowhere do those laws make reference to automobiles.

The majority approached this case all wrong. The livestock laws were never intended to determine the rights of motorists vis-a-vis livestock owners arising out of animal-automobile collisions. The objectives of our livestock containment laws are to control unwanted breeding by stray animals, to distinguish between animals on open range and in herd districts, to fix who has a duty to fence between livestock owners and landowners; and to provide for the taking and return of strays. These statutes have the venerability of antiquity: they preceded modern day vehicular traffic. They were enacted when road traffic consisted essentially of carriages and hay wagons, to which animals at large presented no danger. For their purposes, livestock containment laws have a valid application; for torts not related to their purposes, the livestock containment laws should be disregarded and the ordinary rules of negligence laws should apply. Then the task of the Court would be simple: was the defendant’s negligence a proximate cause of the motorist’s injuries, and comparatively, did the plaintiffs want of care contribute to her injuries.

Application of livestock containment laws to animal-vehicular collisions, as in this case, creates a hotch-potch of dissimilar results from like incidents: the livestock owner is not liable if the animal is a purebred bull between July 1 and December 1; a mare, filly or jenny; or a cow. But the livestock owner may be liable if the animal is a mixed-breed bull anytime; a purebred bull between December 1 and June 1; a stallion, ridgeling or mule; or a sheep, a pig or a goat. When liability depends on the sex or kind of animal, or the time of the year and not the degree of negligence, the law is awry. Such confounded results say that some animals, at some times, are worth more than people.

How much more simple and concordant with our basic notions of liability it would be if we realized that the livestock containment laws were not applicable here, and decided this case on the well-worn and suitable statute of principle:

“. . . everyone is responsible not only for the results of his willful acts, but also for an injury occasioned to another by his want of ordinary care or skill in the management of his property or person except so far as the latter has willfully or by want of ordinary care brought the injury upon himself.”

Section 21-1-701, MCA.


text:
    VIOLET M. HANKINSON, and Joseph E. Hankinson, Mother and son, Plaintiff and Appellants, v. CARTER PICOTTE, JR., and Gene A. Picotte, P.C., a Montana Professional Corporation, Defendants and Respondents.
    No. 88-284.
    Submitted on Briefs Sept. 9, 1988.
    Decided Dec. 13, 1988.
    766 P.2d 242.

      Larry Jent, Bozeman, William A. Bartlett, Wellcome, Frost & Bartlett, Bozeman, for plaintiffs and appellants.
    William D. Jacobsen, Jardine, Stephenson, Blewett & Weaver, Great Falls, for defendants and respondents.
   MR. JUSTICE SHEEHY

Violet M. Hankinson and Joseph E. Hankinson, mother and son, appeal from a judgment of dismissal with prejudice of their complaint against Carter Picotte, Jr. and Gene A. Picotte, P.C., a Montana professional corporation. The judgment of dismissal was entered on March 30, 1988, in the District Court, Fifth Judicial District, Jefferson County.

The decisive issue in the cause is whether, when a district court orders a dismissal of a complaint for failure to state a claim, a notice of entry of judgment must be served to start the time running for appeal. We hold that such notice must be served under the facts of this case.

Joseph Hankinson, a self-employed independent trucker, was in a motor vehicle accident in November, 1984. Since he was required to be on the road and was seldom at home, he gave the telephone number of his mother, Violet Hankinson, and her address to the police in case there was need for further contact with him.

On the evening of December 12, 1984, Violet Hankinson received a telephone call from a person who did not identify himself, who asked to speak to Joe Hankinson. When she informed him that Joe was not there, the caller responded by saying, “Tell him to contact me within 24 hours or I’ll have the Chicago mob beat him up and kill him.”

Violet reported the telephone call to the police who came to her residence to investigate. While they were there, at about 9:30 p.m. on the same day, a second call came from the individual. He identified himself as Carter Picotte, repeated his threats, and left a phone number where he could be reached. The Belgrade police officers are reported to have taped the second telephone call.

On July 26, 1985, Violet Hankinson and Joseph brought an action against Carter Picotte, singly, wherein Joseph claimed compensatory damages for lost earnings because he avoided several jobs out of fear of bodily injury; and Violet Hankinson claimed damages for invasion of privacy, and extreme emotional trauma.

Hankinsons’ action was ordered dismissed on a Rule 12(b) motion on December 30, 1986. Neither Carter Picotte nor his attorney filed a notice of entry of judgment. The Hankinsons did not appeal the order of dismissal, but several months later hired new counsel who successfully moved the District Court for an order allowing an amendment of the complaint.

The order of the District Court granting leave to file an amended complaint was dated December 31, 1987. The amended complaint was based on four theories of liability: negligence, negligent supervision, outrageous conduct, and deception by an attorney under Section 37-61-406, MCA. The amended complaint also brought into the action Gene A. Picotte, P.C., as an additional defendant on the grounds that when Carter Picotte made the telephone call he was an employee of Gene A. Picotte, P.C. The order of December 31, 1987, required that the professional corporation be served with a copy of the amended complaint and with summons.

The first amended complaint is not a part of the court record. Instead, a second amended complaint was filed by the plaintiffs, and service of the second amended complaint and summons was effectuated on the professional corporation, as far as the court records reveal, on February 17, 1988.

Both Carter Picotte and the professional corporation made motions to dismiss the second amended complaint. Carter’s motion was based on the grounds of res judicata, that the order of dismissal of the original complaint had become final by failure of the Hankinsons to appeal. The motion of the professional corporation to dismiss was grounded on collateral estoppel based on failure to appeal. Both parties contended that because of the failure to appeal, the order of dismissal of the original complaint had become final and the District Court lacked subject matter jurisdiction once the order became final.

The District Court entered a judgment of dismissal with prejudice of all claims against the defendants Carter Picotte and the professional corporation on March 30,1988. In entering judgment, the District Court held that the order of dismissal of December 30, 1986, was an appealable order, and the failure to make a timely appeal from the order of dismissal made the order final and operated as an adjudication upon the merits as far as Carter Picotte was concerned. The District Court further reasoned that the dismissal of claims against Carter Picotte collaterally estopped the Hankinsons from raising the same issues against the professional corporation. The Hankinsons have appealed from the judgment of dismissal of March 30, 1988.

Under Rule 77(d), Montana Rules of Civil Procedure, notice of entry of judgment must be served by the prevailing party upon all parties who have made the appearance in the cause.

It is the filing of the notice of entry of judgment that begins the running of the time limitations for filing a notice of appeal. Morrison v. Higbee (1983), 204 Mont. 501, 668 P.2d 1029. If no notice of entry of judgment had been served upon the losing party, the right to appeal has not expired. Haywood v. Sedillo (1975), 167 Mont. 101, 535 P.2d 1014.

Unless post-trial motions are made by the losing party under Rule 52 or 59, Montana Rules of Civil Procedure, the losing party is not required to adhere to the 30 day period for filing a notice of appeal until proper service of notice of entry of judgment is made. Pierce Packing Co. v. District Court (1978), 177 Mont. 50, 579 P.2d 760. And this rule applies to orders which may become final as well as to judgments. In the Matter of Holmes’ Estate (1979), 183 Mont. 290, 599 P.2d 344.

In this case, with no notice of entry of judgment served under Rule 77, and no post-trial motions under Rules 52 or 59, the time for appeal did not begin to run, the order of dismissal of the original complaint did not become final, and the District Court had jurisdiction on December 31, 1987, to grant leave to file an amended complaint. The District Court had not lost subject matter jurisdiction.

The judgment of dismissal of the second amended complaint must therefore be reversed. There is however an additional fact to be considered by the District Court on remand regarding the claim against the professional corporation.

The actions of Carter Picotte giving rise to the claimed liability occurred on December 12, 1984. The professional corporation was not served with summons and complaint, as far as the court records show, until February 17, 1988. In the answer of the professional corporation to the second amended complaint, affirmative defenses based upon various statutes of limitations have been raised. The claim against the professional corporation may be barred by the limitations statutes, unless the amended complaint relates back to the date of the original pleading under Rule 15(c). When a pleading is amended, and an additional party brought in by the amendment, the amended pleading does not relate back to the original pleading as against the additional party unless he (1) has received such notice of the institution of the action that he will not be prejudiced in maintaining a defense of the merits, and (2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against him.

We therefore reverse the judgment of dismissal with prejudice against Carter Picotte and the professional corporation. The District Court is directed on remand to determine whether the amended pleading relates back to the original pleading as against the defendant professional corporation. We make no comment as to other issues raised in the briefs or under the pleadings, leaving those to be handled if need be by the District Court.

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


text:
    DOROTHY JEFFERSON, Plaintiff and Appellant, v. BIG HORN COUNTY, and State of Montana, Defendants and Respondents.
    No. 88-369.
    Submitted on Briefs Nov. 17, 1988.
    Decided Dec. 13, 1988.
    766 P.2d 244.
    D. Michael Eakin, Montana Legal Services, Billings, for plaintiff and appellant.
    James Yellowtail, County Atty., Hardin, David W. Woodgerd and Geralyn Driscoll, Dept, of Revenue, Helena, for defendants and respondents.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

Appellant commenced this action seeking declaratory relief from the payment of state real property taxes. On January 8, 1988, appellant filed an admission of fact, acknowledging the nonpayment of 1986 real property taxes. On March 15, 1988, the District Court entered its order denying the appellant’s motion for summary judgment and dismissing the appellant’s complaint. Rule 12(b)(6), M.R.Civ.P. The court’s memorandum stated the appellant’s failure to comply with the mandatory procedural requirement associated with the declaratory relief remedy as the basis for its dismissal. Section 15-1-406, MCA. Appellant’s motion to amend the order was also denied. This appeal followed. We affirm.

The appellant, Dorothy Jefferson, is an enrolled member of the Crow Tribe and the fee simple owner of a lot located in the Town-site of Crow Agency, Montana, within the exterior boundaries of the Crow Indian Reservation. The disputed lot is in Block 14, which was conveyed by the United States to School District No. 17-H, Big Horn County, by fee simple patent dated June 10, 1922. Appellant thereafter obtained the land in the course of normal business transactions.

Respondents, Big Horn County and the State of Montana, assessed real property taxes against appellant’s lot. The 1986 taxes have not been paid and are delinquent. This Court notes the total tax involved for the year in question was $0.86 cents.

Appellant presents two issues for our review:

1. Must a member of the Crow Tribe residing on the Crow Reservation pay a state tax while contesting that tax?

2. Do the state and counties háve jurisdiction to tax land on the Crow Indian Reservation held in fee simple by a member of the Crow Tribe?

This appeal may be fully disposed of by an analysis of appellant’s first issue. Therefore, we will not address the jurisdictional challenge raised by appellant’s brief.

The standard of review is clear:

“In appraising the sufficiency of the complaint we follow, of course, the accepted rule that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.”

Busch v. Kammerer (1982), 200 Mont. 130, 132, 649 P.2d 1339, 1340, quoting Conley v. Gibson (1957), 355 U.S. 41, 45, 78 S.Ct. 99, 102, 2 L.Ed.2d 80, 84.

The Montana Legislature has provided alternative means to challenge a property tax assessment. A taxpayer may elect to pay the disputed tax under protest, and appeal to the County and State Tax Appeal Boards. Title 15, chapters 2 and 15, MCA. Judicial review is afforded one aggrieved by the agency’s final decision. Section 15-2-303, MCA. As an alternative to administrative remedies, a taxpayer may elect to seek a declaratory judgment in the district court. Section 15-1-406, MCA. Appellant proceeded under the second method, declaratory judgment.

Section 15-1-406, MCA, provides in pertinent part:

“(1) An aggrieved taxpayer may, in lieu of proceeding under 15-1-402, bring a declaratory judgment action in the district court seeking a declaration that a tax levied by the state or one of its subdivisions was illegally or unlawfully imposed or exceeded the taxing authority of the entity imposing the tax.

“(2) The action must be brought within 90 days of the imposition of the tax . . .

“(3) The taxes that are being challenged under this section must be paid when due as a condition of continuing the action.” (Emphasis added.)

Appellant’s complaint, filed January 27, 1986, stated that she had been assessed a tax on real property owned within the Crow Reservation. Appellant sought declaratory relief from the imposition of such taxes, claiming the State was without jurisdiction to assess the tax. Prior to the entry of judgment, appellant filed an admission of fact, acknowledging the 1986 real property taxes upon her property were not paid by the date due. These facts indicate the statutory requirements for maintaining an action were not followed.

In Eagle Communications v. Flathead County (1984), 211 Mont. 195, 685 P.2d 912, this Court stated that a taxpayer must follow the conditions contained in the refund statute each year for which he seeks a refund, reviewing Section 15-1-402, MCA. Although the present case involves the declaratory judgment statute, Section 15-1-406, MCA, we find the rule enunciated equally applies:

“Where a right of action and the conditions for bringing the action are contained within the same statute, compliance with those conditions is a condition precedent which must be fulfilled to preserve the right.”

Eagle Communications, 685 P.2d at 917, citing Van Tighem v. Linnane (1960), 136 Mont. 547, 550-51, 349 P.2d 569, 571. Appellant did not comply with the statutory condition for bringing a declaratory judgment suit.

By reason of her status as a member of the Crow Indian Tribe, appellant contends she should be excused from the burden of prepayment. In support of her position, appellant points to our decision in LaRoque v. State (1978), 178 Mont. 315, 583 P.2d 1059, finding the tax refund procedure an impermissible intrusion on the plaintiffs rights. Reliance upon LaRoque is misplaced.

LaRoque involved two separate plaintiffs who sought a refund of state income taxes paid and to enjoin the collection of such taxes. Notably, appellant’s argument focuses on the injunction phase of the case. Having never paid the tax, plaintiff did not seek a refund, but rather, sought to enjoin the state from collecting the tax. Upon our conclusion that the state lacked the power to tax income, we moved to determine an appropriate remedy.

“Plainly, to require [plaintiff] to go through the refund procedure would subject him to state authority to collect the tax which we now hold invalid. The refund procedure implicitly presupposes the state can intrude on an Indian’s rights by collecting the tax before the remedy is made available. Since [plaintiff] lacks an adequate remedy at law, equitable injunctive relief is necessary.”

LaRoque, 583 P.2d at 1065. The State’s tax refund procedure provided an adequate remedy for the second plaintiff. LaRoque, 583 P.2d at 1065.

In the present case, we deal with a declaratory judgment action. While an injunction may issue absent prepayment, payment of tax due is a condition precedent in a declaratory judgment action. We find appellant’s status as a tribal member does not excuse compliance with the procedural requirements associated with declaratory judgment relief.

Affirmed.

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


author: MR. CHIEF JUSTICE TURNAGE

text:
    FRASCELI, INC., d/b/a Mama Cassie’s Pasta Shop & Deli, a Montana corporation, Petitioner and Respondent, v. STATE OF MONTANA, DEPARTMENT OF REVENUE LIQUOR DIVISION, and Debra S. Battleson, d/b/a Chi Chi’s Mexican American Restaurant, Respondent and Appellants.
    No. 88-370.
    Submitted on Briefs Nov. 3, 1988.
    Decided Dec. 13, 1988.
    766 P.2d 850.

      West Law Firm, Candace F. West, Helena, for petitioner and appellant.
    Leaphart Law Firm, W. William Leaphart, Helena, Alexander & Baucus, Gary Deschenes, Great Falls, Eric J. Fehlig, Dept, of Revenue, Helena, for respondents and appellants.
   MR. CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Debra Battleson, d/b/a/ Chi Chi’s Mexican American Restaurant (Chi Chi’s), appeals an order entered by the Eighth Judicial District Court regarding the final ownership of one beer and wine license for the Great Falls area. The order, which overruled the agency decision made by the Director of the Department of Revenue (DOR), instructed the Department to reinstate the proposed order of the hearing examiner.

The issues on appeal are:

1. Whether the conduct of the Director of the DOR constituted reversible error;

2. Whether the District Court abused its discretion by ordering the hearing examiner’s proposal to be adopted.

We reverse in part and affirm in part.

In the fall of 1986, one new retail beer and wine license became available, based on the quota system, for the Great Falls area. Based on the notice published by the Department of Revenue, which oversees and issues these licenses, there were seven applicants.

An evidentiary hearing was held on April 20, 1987, by a hearing examiner to determine who among these seven applicants would receive the license. A proposed order, along with findings of fact, conclusions of law was issued on May 23, 1987, by the examiner. That proposal awarded the license to Frasceli, Inc., d/b/a/ Mama Cassie’s Pasta Shop and Deli (Mama Cassie’s). Chi Chi’s was the only unsuccessful applicant to file exception to the proposed order and further requested oral argument before the Director of DOR, which was the official making the final agency decision pursuant to the Montana Administrative Procedure Act (MAPA).

The Director heard oral argument on July 31, 1987, and issued a final agency decision on September 29,1987, awarding the license of Chi Chi’s. The agency decision stated that the proposed findings regarding Chi Chi’s were insufficient and drafted additional findings of fact in favor of Chi Chi’s.

Mama Cassie’s appealed this final agency decision and order to the District Court which heard oral argument. At that hearing, the parties stipulated that the Director of DOR conducted a personal, unannounced visit to both Mama Cassie’s and Chi Chi’s after he took oral argument on the MAPA appeal but before he issued his final order reversing the hearing examiner. It is that conduct, the unnoticed, on-site visit of both establishments, that Mama Cassie’s contests.

The District Court found that conduct to be improper. In its order, the District Court found that “[t]hese visits were made without any prior notice to the parties and the visits were not reflected in the record or evidence as to why the Director made these visits, it is apparent that he would not have made the visits unless he felt there was some necessity to supplement the ‘record’ that was before him at final arguments.” The District Court concluded the the “off-the-record” visits by the Director irrevocably denied the parties of (1) the right to prior notice of the intent to visit; (2) the right to object to such visits; (3) the opportunity to be present during the visits; (4) the right to respond and present evidence and argument on all issues involved under Section 2-4-612(1), MCA; and, (5) the right to conduct cross-examination required for a full and true disclosure of the facts as required by Section 2-4-612(5), MCA.

Accordingly, the District Court reversed the decision of the Director because it violated the parties’ right to procedural due process contrary to Section 2-4-704(2)(a), MCA, it was made upon unlawful procedure contrary to Section 2-4-704(2) (c), MCA, and it was characterized as an abuse of discretion contrary to Section 2-4-704(2) (f), MCA.

Lastly, the District Court remanded to the Department of Revenue with instructions to enter the final decision adopting the recommendation of the hearing examiner awarding the license to Mama Cassie’s as first proposed. Chi Chi’s appealed.

Chi Chi’s contends that the hearing examiner’s proposed findings are deficient as a matter of law and must be overturned; that the agency decision can stand on its own, regardless of the visits, because it is based on substantial evidence; and, finally that the visits conducted by the Director are not reversible error for various reasons.

We do not reach the issues of whether the hearing examiner’s findings are deficient as a matter of law to support an award of the license or whether the Director’s order is sufficient as a matter of law to support his award of the license. We conclude his decision to be based on unlawful procedure constituting reversible error. We affirm the District Court’s conclusion that the matter in which the Director conducted his off-the-record visits prejudiced substantial rights of the appellant for the reasons below.

I. “Off-the-Record” Visits

A. Standard of Review

The standard of review is found in the MAPA at Section 2-4-704, MCA, which authorizes the District Court to modify or reverse an agency decision which prejudices substantial rights of the appellant in any one of seven ways. That statute provides in pertinent part:

“The [district] court may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions or decision are:

“(a) in violation of constitutional or statutory provisions;

“(b) in excess of the statutory authority of the agency;

“(c) made upon unlawful procedure;

“(d) affected by other error of law;

“(e) clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record;

“(f) arbitrary or capricious or characterized by an abuse of discretion or clearly unwarranted exercise of discretion; or

“(g) because findings of fact, upon issues essential to the decision, were not made, although requested.”

A finding based on any one of these seven reasons is sufficient for the District Court to modify or reverse. As was noted earlier, the District Court in the case at bar gave three reasons to reverse based on Subsections (2)(a), (c) and (f).

B. Due Process Rights

Chi Chi’s argues that due process could not have been denied to Mama Cassie’s by the Director’s inspections because Chi Chi’s was likewise uninformed about the date of the visits and opportunity to be present. Thus, argues Chi Chi’s, they were equal in the end.

However, the language of Section 2-4-704(2) specifically refers to any “prejudice done to substantial rights of the appellant.” Mama Cassie’s, as petitioner below, was the appellant to which this statute refers. Due process interests certainly are substantial rights, as contemplated by the statute. Thus, we clearly have an issue controlled by Section 2-4-704(2) and whether the conduct prejudiced Chi Chi’s and Mama Cassie’s equally is irrelevant.

The agency order must be vacated because it was founded on unlawful procedure which violated Mama Cassie’s due process interests. In Highbarger and Bohannon v. Thornock (1972), 94 Idaho 829, 498 P.2d 1302, the Idaho Supreme Court found the trial judge’s viewing of an accident site without prior notice to the parties was improper. We find the reasoning in that case persuasive and hold MAPA officials rendering decisions to the same standard of conduct.

Highbarger was a wrongful death case arising out of a single-car accident. The trial judge was considering a formal motion for involuntary dismissal and in aid of his determination viewed the scene of the accident. The Idaho Court found:

“A judge trying a case without a jury may not properly view premises without notice to the parties or use the result of his inspection in weighing the testimony of a witness. Citing Jones on Evidence, Section 462, at 857 (5th Ed.).”

Prior notice to the parties was the focus in Highbarger. It insures that parties know of the viewing in order to object to it if they deem it inappropriate under the circumstances, and notice further allows the parties to be present to assure that the court does not view the incorrect object or premises. As pointed out by the appellants in Highbarger, they had absolutely no way of knowing whether the trial judge actually found the accident site.

We find that prior notice for a viewing is the general rule. See, 18 A.L.R.2d 552, Section 4 at 562:

“Regarding administrative decision or finding based on evidence secured outside of the hearing and without the presence of interested party or counsel:

“ ‘Even though an administrative authority has the statutory power to make independent investigations, it is improper for it to base a decision upon findings or facts so obtained, unless such evidence is introduced at a hearing or otherwise brought to the knowledge of the interested parties prior to decision, with opportunity to explain and rebut.’ ”

Chi Chi’s owner argues that she had no way of knowing that the Director based his reversal and additional findings on facts or data obtained through his viewing. More importantly to the Court, we have no way to be certain that he did not.

We cannot comprehend the extent or the impact of the Director’s inspection because there is no record of it. Lack of prior notice coupled with lack of any documentation is fatal to an ordinarily permissible inspection. When this type of conduct occurs under a MAPA proceeding, it violates certain other safeguards built in by statute: the right to respond and present evidence and argument on all relevant issues (Section 2-4-612(1), MCA), and the right to conduct a cross-examination sufficient for the full and true disclosure of facts (Section 2-4-612(5), MCA).

We agree with the trial court’s reasoning and rulings on these issues.

II. Reinstatement of the Proposed Order

Chi Chi’s argues that, even if the reversal of the Director’s order is proper, it was an abuse of discretion for the trial judge to order reinstatement of the proposed order. We agree. Ordering the adoption of the hearing examiner’s proposal simply is not an alternative authorized by statute.

Thus, we remand to the agency on this issue for a final determination. The agency will have an objective and detached officer review the record, disregarding the Director’s viewings. If the officer finds it necessary to supplement the record, the officer may take additional testimony or conduct a proper viewing with prior notice and a full record.

We affirm the District Court order insofar as it vacates the final agency decision and remand to the DOR for proceedings consistent with this opinion.

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