author: JUSTICE NELSON

text:
    KATHARINE GAIL DURBIN and PHIL F. DURBIN, individuals, Plaintiffs and Appellants, v. BARBARA ROSS an individual, d/b/a/ ROSS REALTY; LYNNE PIAZZOLA, an individual; WAYNE A. SHERRILL and RACHEL SHERRILL, individuals; and MICHAEL J. SHERRILL, an individual, Defendants and Respondents.
    No. 95-378.
    Submitted on Briefs January 18, 1996.
    Decided May 14, 1996.
    53 St.Rep. 471.
    916 P.2d 758.
    276 Mont. 463.

      For Appellant: Donald V. Snavely, Missoula.
    For Respondent: Tracy Axelberg and Gary D. Kalkstein, Axelberg & Kalkstein, Missoula.
   JUSTICE NELSON

delivered the Opinion of the Court.

Katharine and Phil Durbin (the Durbins) appeal from the Montana Twentieth Judicial District Court, Sanders County, order granting summary judgment in favor of Barbara Ross, Ross Realty, Lynne Piazzola (the Realtors) and dismissing the Durbins’ claims against the Realtors. We reverse and remand.

ISSUES

1. Did the District Court err in ruling that the Durbins failed to establish a standard of care through the expert testimony of a real estate broker?

2. Should this Court direct the District Court on the admissibility of expert standard of care testimony?

BACKGROUND

The parties agreed to the following facts in the pretrial order:

1. Plaintiffs Phil and Katharine “Gail” Durbin are husband and wife. On April 26, 1993 the Durbins purchased for the sum of $35,000.00 a piece of property consisting of 20 acres and a single-family residence located at 209 Upper River Road, Heron, Montana (the “Property’) from Defendants Wayne, Rachel and Michael Sherrill, the sellers of the Property.
2. Defendants Wayne and Rachel Sherrill and their children resided on the Property from May of 1987 until they sold the Property to the Durbins. Defendant Michael Sherrill resided on the Property for part of that time.
3. Defendants Lynne Piazzola and Barbara Ross are real estate agents licensed by the State of Montana. Lynne Piazzola is a licensed sales agent and was the listing and sales agent for the sale of the Property to the Durbins. Barbara Ross was the supervising broker for Defendant Piazzola for this sale. Defendants Piazzola and Ross both worked for Ross Realty, a real estate office located in Noxon, Montana. Defendant Ross was the owner of Ross Realty at the time of this sale.
4. This case involves claims by Plaintiffs Durbin that the condition of the Property was misrepresented to them. The Durbins contend, among other things, that the septic system, household water system, and other aspects of the Property were not accurately represented by the Defendants. Defendants Ross and Piazzola deny these contentions. Defendants Ross and Piazzola contend, among other things, that they did not make any misrepresentations to the Durbins. ...

The Durbins contend that the Realtors told them that 1) the property had a legal septic system with a 750 gallon tank, when there was only a 200 gallon drywell with no drainfield; 2) that the household water was safe for normal household purposes when the water was contaminated with coliform bacteria and was not safe for any household purposes; and 3) that the access road was on the property when it was on the neighbor’s property. The Durbins further contend that the Realtors failed to disclose other serious defects in the home such as the fact that there were no hot water pipes and thus no hot water, that the plumbing drain lines were not connected to the main sewer line and drained directly into the soil in the crawlspace under the home, and that the roof leaked. In summary, the Durbins argue that the Realtors misrepresented that the house was in good condition.

The Realtors dispute the Durbins’ allegations of misrepresentation. The Realtors in fact claim that they performed a diligent inspection of the property and disclosed the information gleaned from that inspection. They also claim that the Sherrills informed the Durbins of the property’s shortcomings and that those shortcomings were reflected in the purchase price.

The Durbins were not represented by an agent in the transaction. Therefore, the Durbins filed a complaint against the Realtors and the Sherrills claiming that they made material misrepresentations about the property, concealed material facts regarding the property, and that the Durbins relied on the information in agreeing to purchase the property. The Durbins disclosed their trial expert on January 31, 1995, but later withdrew that expert witness.

Defendants Wayne Sherrill, Rachel Sherrill, and Michael Sherrill did not appear in the action. Their defaults were entered on February 2, 1994. The Realtors moved for summary judgment on the ground that the Durbins could not prove any of their claims without expert testimony establishing the relevant standard of care. The District Court granted summary judgment in favor of the Realtors and pursuant to Rule 54(b), M.R.Civ.P., certified for immediate appeal its order dismissing all claims against the Realtors. The Durbins appeal the District Court’s determination that for the Realtors to be found liable as individuals for their conduct toward the Durbins, the Durbins must first establish a duty owed by the seller’s broker to the purchasers and that the standard of care relating to such duty and breach thereof must be established by expert testimony as a matter of law.

DISCUSSION

1. Did the District Court err in ruling that the Durbins failed to establish a standard of care through the expert testimony of a real estate broker?

The Durbins contend that the Realtors committed actual fraud and constructive fraud by misrepresenting the condition of the property or, in the alternative, committed negligent misrepresentation by failing to exercise reasonable care in investigating the truth of the information they passed on to the Durbins, violated the Montana Real Estate Licensing Act by misrepresenting facts about the property, and violated the Montana Consumer Protection Act by committing deceptive acts in the conduct of their real estate business. The Durbins argue that standard of care testimony is neither necessary nor relevant to these claims. Specifically, the Durbins argue that they do not have to present expert testimony to establish claims for fraud and claims of statutory violations in this case for two reasons. First, the Realtors did not represent the Durbins in this transaction and thus did not create a professional relationship. Second, the elements of the fraud claims focus on the knowledge and state of mind of the Realtors in this case and not on the standard of care by other professionals and the statutory violations involve the conduct of the Realtors in this case and whether that conduct conformed with statutorily mandated rules. In summary, the Durbins assert that the District Court erred in granting summary judgment because expert testimony is irrelevant to any factual issue required to establish the Durbins’ claims.

In contrast, the Realtors assert that the District Court properly granted summary judgment finding that the gravamen of the Durbins’ claims sounds in negligence and that these claims fail because the Durbins did not establish the appropriate standard of care and breach of that standard. The Realtors further assert that the Durbins had to provide expert testimony to prove duty and breach in a negligence claim against a professional.

We review a grant of summary judgment de novo using the same criteria initially used by the District Court under Rule 56, M.R.Civ.P. Mead v. M.S.B., Inc. (1994), 264 Mont. 465, 470, 872 P.2d 782, 785. Therefore, we determine whether there is an absence of genuine issues of material fact and whether the moving party is entitled to judgment as a matter of law. Mead, 872 P.2d at 785.

The Durbins do not dispute that, were they pursuing a professional negligence claim against their own broker, they would need to produce expert standard of care testimony. They do not assert a professional negligence claim because the Realtors did not represent the Durbins in a professional capacity. Instead, the Durbins assert common law and statutory fraud theories of recovery which do not require proof of the standard of conduct exercised by other brokers. The essence of the Durbins’ claims sound in fraudulent misrepresentation and nondisclosure of material facts concerning the property.

A. Actual Fraud and Constructive Fraud

In Lee v. Armstrong (1990), 244 Mont. 289, 293, 798 P.2d 84, 87, we delineated the nine elements of actual fraud: (1) a representation; (2) falsity of the representation; (3) materiality of the representation; (4) speaker’s knowledge of the falsity of the representation or ignorance of its truth; (5) speaker’s intent it should be relied upon; (6) the hearer’s ignorance of the falsity of the representation; (7) the hearer’s reliance on the representation; (8) the hearer’s right to rely on the representation; and (9) consequent and proximate injury caused by the reliance on the representation. These elements focus on the knowledge and intent of the broker involved in the transaction. The standard of care exercised by other brokers in similar transactions does not have bearing on what brokers in a specific case know or intend. See e.g., State v. Howard (1981), 195 Mont. 400, 404-05, 637 P.2d 15, 17. In Howard, we held that the jury was as qualified as the doctor to infer the defendant’s intent from the nature of the injuries the defendant inflicted. Howard, 637 P.2d at 17; see also U.S. v. Clapp (8th Cir. 1995), 46 F.3d 795.

In Clapp, the defendant offered expert testimony to show that he had acted without intent to defraud. In holding that expert testimony was not necessary to illuminate the defendant’s intent, the court noted that expert testimony is appropriate when it “relates to issues that are beyond the ken of people of ordinary experience,” but is superfluous where the subject matter is within the knowledge or experience of laypersons. Clapp, 46 F.3d at 802 (quoting United States v. French (8th Cir. 1993), 12 F.3d 114, 116).

We have similarly held that “[t]he test for the admissibility of expert testimony is whether the matter is sufficiently beyond common experience that the opinion of the expert will assist the trier of fact to understand the evidence or to determine a fact in issue.” Jim’s Excavating Service v. HKM Assoc. (1994), 265 Mont. 494, 509, 878 P.2d 248, 257 (construing Rule 702, M.R.Evid.). For example, in Jim’s Excavating, we held that the expert’s opinion was based on the type of data which is reasonably relied on by experts in the accounting field and was not a matter within the common experience of a jury, and that there was adequate opportunity for cross examination. We therefore concluded that the district court did not err in allowing the testimony. Jim’s Excavating, 878 P.2d at 258.

While actual fraud hinges on the knowledge and intent of the defendant, constructive fraud hinges only on the knowledge of the defendant. Lee, 798 P.2d at 88. Courts may invoke constructive fraud as a matter of law to prevent a party from being unjustly enriched as a result of false statements made, even if the false statement is not knowingly made. Lee, 798 P.2d at 88. ‘Withholding relevant facts concerning purchased property can be a fraudulent act. Furthermore, where a vendor by his conduct or words creates a false impression concerning a matter of vital importance to the purchaser, full disclosure of relevant facts may be required.” Lee, 798 P.2d at 88 (quoting Moschelle v. Hulse (1980), 190 Mont. 532, 537, 622 P.2d 155, 159).

In Lee, we further held that

[w]here a contract is induced by false representations as to material existent facts, which are made with the intent to deceive, and upon which the plaintiff relied, it is no defense ... that the party to whom the representations were made might, with due diligence, have discovered their falsity, and that he made no searching inquiry into the facts. .. .

Lee, 798 P.2d at 88. In Lee, we concluded that the district court correctly found that the defendant did not fully disclose all pertinent facts, which constituted constructive fraud.

In the instant case, none of the elements of claims for actual or constructive fraud concerns the standard of care exercised by other real estate brokers. Instead, the elements focus on the knowledge and intent of the broker, issues which juries regularly face and determine without assistance from expert testimony. In summary, expert standard of care testimony is not necessary in the instant case, where the Realtors are held to the same standard as an ordinary citizen in a claim for fraud. In fact, the standard is a common law standard based on the individual knowledge and intent of the defendant, not on the custom or practice of other professionals within the real estate profession. For example, if all brokers lied in order to sell a property, then lying would be a standard industry practice, absolving the brokers from fraud. The Realtors are held to the same standard of care as other citizens of Montana; they may not intentionally or negligently defraud a third party. Accordingly, we hold that expert testimony is not relevant to establishing the Realtors’ duty toward third parties such as the Durbins.

B. Negligent Misrepresentation

In the alternative to their fraud claims, the Durbins assert a claim for negligent misrepresentation against the Realtors. The Durbins base their claim on the Realtors’ alleged failure to exercise the care of a reasonable person in obtaining or communicating information to the Durbins. The Durbins concede that real estate sales is a profession or trade requiring expert testimony if the broker violates a duty to his or her client and the conduct in question is beyond the experience of ordinary laypersons. However, they contend that they did not have a professional relationship with the Realtors, and therefore do not assert a professional negligence claim against them.

The Realtors, on the other hand, argue that the gravamen of the Durbins’ claims sounds in professional negligence and therefore they must provide expert testimony to prove elements of duty and breach in their claim against the Realtors. The Realtors support their argument by citing to Section 229A of the Restatement (Second) of Torts, which provides:

Unless he represents that he has greater or less skill or knowledge, one who undertakes to render services in the practice of a profession or trade is required to exercise the skill and knowledge normally possessed by members of that profession or trade in good standing in similar communities.

Comment c to § 229A of the Restatement states that the rule does not depend on the existence of an enforceable contract between the parties, it applies equally to professional services rendered gratuitously such as a physician treating a charity patient. An undertaking by the defendant serves as the basis of the rule. The Durbins assert that § 229A of the Restatement emphasizes that a professional relationship must exist between the plaintiff and the defendant before the standard of care for similarly situated professionals becomes relevant.

We have held that to establish professional negligence action, the “plaintiffmust prove that the professional owed himaduty, [and] that the professional failed to live up to that duty, thus causing damages to the plaintiff.” Lorash v. Epstein (1989), 236 Mont. 21, 24, 767 P.2d 1335, 1337. For example, in pursuing a negligence action against an attorney, the plaintiff must initially establish the existence of an attorney-client relationship. Lorash, 767 P.2d at 1337. In Lorash, the plaintiff was not able to establish an attorney-client relationship which would impose a duty to foreclose the plaintiff’s mechanic’s lien. Lorash, 767 P.2d at 1337. Similarly, in Carlson v. Morton (1987), 229 Mont. 234, 238, 745 P.2d 1133, 1136, we stated that in any professional negligence action, the plaintiff must prove that the professional owed him a duty and that the professional failed to live up to that duty, causing damages to the plaintiff.

In the instant case, the Realtors did not undertake to represent the Durbins; there was no professional relationship. Any duty the Realtors owed to the Durbins did not arise from a professional relationship. Without a duty arising from a professional relationship, there can be no claim of professional negligence. The Durbins appropriately brought a negligent misrepresentation claim instead of a professional negligence claim.

In State Bank of Townsend v. Maryann’s, Inc. (1983), 204 Mont. 21, 33, 664 P.2d 295, 301, we approved the definition of negligent misrepresentation as contained in Restatement (Second) of Torts § 552. Section 522 provides:

(1) One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.

In considering this definition, we looked to the comments to the Restatement, noting that they state that liability imposed by subsection (1) is based on negligence if and only if the defendant has failed to exercise the care or competence of a reasonable man in obtaining or communicating the information. State Bank of Townsend, 664 P.2d at 302. Moreover, in Thayer v. Hicks (1990), 243 Mont. 138, 149, 793 P.2d 784, 791, we held that an accountant owed a duty of care to third parties with whom he was not in privity of contract but whom he was aware relied on his work product in connection with a particular transaction.

In Wagner v. Cutler (1988), 232 Mont. 332, 757 P.2d 779, the purchaser of residential real estate brought suit against the vendor for defects in the home. The plaintiff contacted a real estate agent in Bozeman who showed plaintiff the house and who represented that the house was well built and according to code. Wagner, 757 P.2d at 781. The plaintiff moved in and subsequently discovered defects in the house such as a hazardous chimney, poor ceiling insulation, a broken sewage pump, and a faulty lawn sprinkler. The plaintiff sued to recover damages under misrepresentation and violation of the duty to inspect and disclose defects. Applying § 552 of the Restatement, we held that the plaintiff purchaser did not have to provide expert standard of care testimony to establish the vendor’s duty. We noted that the test for the admissibility of expert testimony is whether the matter is sufficiently beyond common experience that the opinion of an expert would assist the trier of fact. We held that there was no requirement of specialized knowledge in the negligent misrepresentation claim. The defendant had a duty to obtain and communicate information on the true condition of the house and failed to do so. Therefore, we concluded that the district court properly determined that the defendant failed to use reasonable care. Wagner, 757 P.2d at 783; see also Lunden v. Smith (Or. App. 1981), 632 P.2d 1344.

In Lunden, plaintiff buyers brought suit to rescind their purchase of a lighting fixture business. Lunden, 632 P.2d at 1345. The sellers cross complained against their broker. The appellate court affirmed the district court’s determination that the broker was negligent. Lunden, 632 P.2d at 1346. In so holding, the court disagreed with the broker’s contention that expert testimony was needed to support a finding that his conduct amounted to negligence. Lunden, 632 P.2d at 1347.

The Supreme Court of Arizona similarly held that expert witness testimony was not necessary to establish the reasonableness of a defendant’s investigation of information when that defendant supplied incorrect information. St. Joseph’s Hosp. v. Reserve Life Ins. (Ariz. 1987), 742 P.2d 808, 816-17. In St. Joseph’s, plaintiff, St. Joseph’s Hospital, called the defendant insurer to verify a patient’s coverage. The insurer verified the coverage but later refused to pay the hospital stating that the patient had given the insurer his incorrect height and weight and was subsequently denied coverage. St. Joseph’s, 724 P.2d at 812. The court construed §§ 552 and 229Aof the Restatement of Torts, and specifically quoted comment f to § 552:

The care and competence that the supplier of information for the guidance of others is required under [rule 552, Restatement of Torts] to exercise in order that the information given may be correct, must be exercised in the following particulars. If the matter is one that requires investigation, the supplier of the information must exercise reasonable care and competence to ascertain the facts on which his statement is based. He must exercise the competence reasonably expected of one in his business or professional position in drawing inferences from facts not stated in the information.

St. Joseph’s, 742 P.2d at 816. The court agreed that a plaintiff must supply a professional standard of care for inferences from facts not stated in the information but held that the insurer’s duty to exercise reasonable care not to misstate existing, ascertainable facts need not be established by expert testimony. St. Joseph’s, 742 P.2d at 816.

In the instant case, the Durbins cite to Easton v. Strassburger (Cal. App. 1984), 199 Cal. Rptr. 383, 393, in which the California Court of Appeals also held that expert testimony was not necessary to establish the negligence of the seller’s real estate broker. In Easton, the court held that a real estate broker has a duty to conduct a reasonably competent and diligent inspection of property in order to discover defects for the benefit of the buyer. Easton, 199 Cal. Rptr. at 388. In discussing the negligence action against the brokers, the court noted that

none of the pertinent cases involving allegations of negligence against a real estate broker require expert testimony to establish the standard of care in the real estate industry, or the particular broker’s breach of that standard of care.

Easton, 199 Cal. Rptr. at 392. The court held that expert testimony was not required to establish the standard of care in the real estate industry or the appellant’s breach of that standard because the question of negligence was resolvable by common knowledge and did not turn on facts peculiarly within the knowledge of professional experts. Easton, 199 Cal. Rptr. at 392-93.

Similarly, in the instant case, the question of whether the Realtors negligently misrepresented that there was a legal septic system on the property is a question resolvable by common knowledge and does not turn on a standard peculiarly within the knowledge of an expert witness. The Realtors must exercise reasonable care and competence to ascertain the facts on which their statements were based because they were aware that the Durbins relied on their work product in connection with this real estate transaction. This standard of care does not require expert testimony establishing accepted practice within the real estate profession. Accordingly, we hold that expert testimony was not required to establish a duty and a breach of that duty in the Durbins’ negligent misrepresentation claim.

C. Statutory Claims

The Durbins brought two statutory claims against the Realtors. The Din-bins alleged that the Realtors violated § 37-51-321, MCA, of the Montana Real Estate Licensing Act and §§ 30-14-103 and 133, MCA, of the Montana Consumer Protection Act. The Durbins claim that these statutes set forth the standards the Realtors were required to follow, and thus allow a layperson to determine without expert testimony, whether the Realtors satisfied the requirements of the Acts. The Realtors argue that regardless of the standards set forth in the statutes, the Durbins have the burden, through expert testimony of a licensed real estate broker/agent, to establish the appropriate standard of care and the Realtors’ deviation therefrom.

Section 37-51-321, MCA, sets forth the procedures for revocation or suspension of a real estate broker or salesperson’s license. Specifically, it allows the Board of Realty Regulation to investigate the actions of a real estate broker or a real estate salesperson and revoke or suspend a license when the broker or salesperson has been found guilty of any of the following practices:

(a) intentionally misleading, untruthful, or inaccurate advertising ... (b) making any false promises of a character likely to influence, persuade, or induce; (c) pursuing a continued and flagrant course of misrepresentation or making false promises through agents or salespersons or any medium of advertising or otherwise ....

Additionally, the realty regulations cover grounds for license discipline for acts such as fraud, misrepresentation, or deception. A.R.M. 8.58.419(3X1993). For example, A.R.M. 8.58.419(3)(1993), provides in part:

(i) licensees shall endeavor to ascertain all pertinent facts concerning every property in any transaction in which the licensee acts, so that the licensee may fulfill the obligation to avoid error, exaggeration, misrepresentation, or concealment of pertinent facts;
(ii) licensees who have listed property shall make a prompt, reasonable, visual inspection of any property listed; ...
(iv) licensees shall disclose to principals and third parties all material facts concerning the property of which the licensee has actual knowledge regarding the property ...

Violation of these regulations may be considered by the Board in determining whether the broker failed to meet the generally accepted standard of practice. A.R.M. 8.58.419(1)(1993).

The Durbins contend that a layperson can determine whether a broker has violated these regulations because the determination requires no specialized knowledge. They further assert that the Board of Realty Regulation eliminated the need for expert standard of care testimony to establish unprofessional conduct within the purview of A.R.M. 8.58.419(1993).

Section 37-51-321, MCA, sets forth grounds for revocation or suspension of a real estate license such as making any false promises of a character likely to influence, persuade, or induce or demonstrating unworthiness or incompetency to act as a broker or salesperson. A.R.M. 8.58.419 (1993), articulates acts or omissions that are evidence of acts against the interest of the public. The statute combined with its implementing regulations sets forth comprehensive guidelines for licensed real estate agents and brokers.

We have held that the provisions of the Real Estate Licensing Act establish a standard of conduct to which brokers and salespersons must conform. “If not, they must bear the consequences.” Carnell v. Watson (1978), 176 Mont. 344, 349, 578 P.2d 308, 311. Accordingly, in the instant case, expert testimony was not required because a jury may determine whether the Realtors violated any of the provisions in the regulations or statutes.

The Durbins also brought a claim under the Montana Consumer Protection Act, §§ 30-14-103 and 133, MCA. Section 30-14-103, MCA, states that “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are unlawful.” Section 30-14-133, MCA, delineates that “[a]ny person who purchases or leases goods or services primarily for personal, family, or household purposes and thereby suffers any ascertainable loss of money or property, real or personal ... may bring an individual but not a class action ...”

The Board of Realty Regulations articulates what constitutes an unfair or deceptive act or practice. A.R.M. 8.78.101(1) states that a person engages in unfair or deceptive and therefore unlawful acts or practices when, he or she “makes a false representation as to the characteristics, ingredients, uses, benefits, alterations or quantities of merchandise [or] states that a transaction involves rights, remedies or obligations that it does not involve ...”

A determination of whether the Realtors made a representation and whether that representation was false is clearly within the common knowledge of a layperson. In the instant case, scientific, technical, or other specialized knowledge is not necessary to assist the jury to understand the evidence because the statute and the regulations establish the conduct to which the Realtors must conform regardless of whether other brokers conform to that same conduct. Accordingly, we conclude that the Durbins were not required to provide expert standard of care testimony to establish the relevant statutory violations.

2. Should this Court direct the District Court on the admissibility of expert standard of care testimony?

The Durbins argue that not only do the elements of the claims they asserted not require expert testimony but also that expert testimony is not admissible for any of the claims they asserted. Thus the Durbins contend that the Realtors are precluded from offering expert testimony establishing the standard of care exercised by other real estate brokers in similar transactions. They request this Court to remand their case and direct the District Court to exclude at trial any expert standard of care testimony. The Realtors continue to assert that expert testimony establishing the standard of care and a breach of that standard is not only admissible but also required.

We have long held that issues concerning the admissibility of evidence are within the discretion of the trial court. Cottrell v. Burlington Northern R. Co. (1993), 261 Mont. 296, 301, 863 P.2d 381, 384 (citing Cooper v. Rosston (1988), 232 Mont. 186, 190, 756 P.2d 1125, 1127). “The trial court is vested v/ithgreat latitude in ruling on the admissibility of expert testimony.” Cottrell, 863 P.2d at 384; see also Jim’s Excavating, 878 P.2d at 257.

The fundamental requirements of Rule 702, M.R.Evid., testimony by experts, still apply. Rule 702, M.R.Evid., provides:

If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education may testify thereto in the form of an opinion or otherwise.

The Commission Comments to Rule 702, M.R.Evid, note that the rule sets forth two standards. First, the subject matter must be one that requires expert testimony. Expert testimony is required in areas not within the range of ordinary training or intelligence. Newville v. State, Dept. of Family Service (1994), 267 Mont. 237, 257, 883 P.2d 793, 805 (requiring expert testimony establishing standard of care for professional negligence because a jury of laypersons is normally incompetent to pass judgment on standard of care for professionals without the assistance of expert testimony). Second, the particular witness must be qualified as an expert to give an opinion in the particular area of the testimony. Thus, Rule 702, M.R.Evid., implicitly requires a foundation showing that the expert has special training or education and adequate knowledge on which to base an opinion. Cottrell, 863 P.2d at 384. Within the confínes of the rule of evidence, a trial court has broad discretion in determining the admissibility of the evidence. Accordingly, we remand this case for trial leaving the District Court with the discretion to determine the admissibility of expert testimony.

Reversed and remanded.

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


source: Caselaw Access Project

author: JUSTICE LEAPHART

license: Public Domain

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. TAMMY SWOBODA, Defendant and Appellant.
    No. 95-400.
    Submitted on Briefs April 11, 1996.
    Decided May 17, 1996.
    53 St.Rep. 478.
    918 P.2d 296.
    276 Mont. 479.

      For Appellant: Roberta A. Drew, Deputy Public Defender, Yellowstone County Public Defenders, Billings.
    For Respondent: Hon. Joseph P. Mazurek, Attorney General, Carol Schmidt, Ass’t Attorney General, Helena; Marcia Good Sept, Deputy Yellowstone County Attorney, Billings.
   JUSTICE LEAPHART

delivered the Opinion of the Court.

Tammy Swoboda (Swoboda) appeals from her sentence imposed by the Yellowstone County, Thirteenth Judicial District Court. Swoboda pled guilty to the crime of sexual abuse of children, a felony. The court committed Swoboda to the Department of Corrections and Human Services for fifteen years. We affirm.

The issue on appeal is as follows:

Did the District Court abuse its discretion when it failed to consider and discuss alternatives to imprisonment for a nonviolent felony offense pursuant to §§ 46-18-225, and 46-18-201(11)[for-merly(lO)], MCA, before sentencing Swoboda to a term of imprisonment?

We review a sentence on appeal to determine whether the sentencing court clearly abused its discretion in imposing sentence. State v. Blake (1995), 274 Mont. 349, 350, 908 P.2d 676, 677; State v. Beach (1985), 217 Mont. 132, 153, 705 P.2d 94, 107. Criminal sentencing alternatives are strictly a matter of statute in Montana. State v. LaMere (1995), 272 Mont. 355, 358, 900 P.2d 926, 928; State v. Stevens (1993), 259 Mont. 114, 115, 854 P.2d 336, 337. Therefore, our standard of review is whether the District Court correctly interpreted the applicable statutes. LaMere, 900 P.2d at 928.

Swoboda qualified as a nonviolent felony offender. She argues that Montana law, § 46-18-201(11), MCA, requires the sentencing court to consider alternatives to incarceration, including the ten sentencing criteria found in § 46-18-225, MCA, when sentencing nonviolent offenders. If the court does not select alternatives to imprisonment it must state its reasons for not doing so. Section 46-18-201(11), MCA. Swoboda argues that the court failed to fulfill, this statutory requirement.

In three recent cases in which district courts failed to consider alternatives to incarceration for nonviolent offenders, we remanded for resentencing. State v. Pence (1995), 273 Mont. 223, 902 P.2d 41; LaMere, 900 P.2d 926; Stevens, 854 P.2d 336. However, in these cases the defendants raised the issue of consideration of alternatives to incarceration before the district court, or, as in Stevens, the State conceded that the statute had not been followed. Stevens, 854 P.2d at 337; see also State v. Nelson (1995), 274 Mont. 11, 906 P.2d 663.

However, in the instant case, the issue of consideration of alternatives to imprisonment was not raised before the District Court and the State did not concede that the statute had not been followed. The transcript of the sentencing hearing reveals that Swoboda did not object to the court’s failure to consider sentencing alternatives nor did she request reconsideration. Swoboda did not alert the District Court to the alleged failure to consider alternatives to imprisonment. Nelson, 906 P.2d at 667. Thus, the court was not able to correct any deficiency in the sentencing process. Nelson, 906 P.2d at 667.

This Court does not review issues which were not preserved for appeal in the court below. Sections 46-20-205 and 46-20-701, MCA. We have held that failure to raise an issue before the district court bars a defendant from raising the issue on appeal under § 46-20-104, MCA. Nelson, 906 P.2d at 667; State v. Arlington (1994), 265 Mont. 127, 151, 875 P.2d 307, 321.

An exception to this general rule is found in the holdings of State v. Hatfield (1993), 256 Mont. 340, 846 P.2d 1025 and State v. Lenihan (1979), 184 Mont. 338, 602 P.2d 997. See also Nelson, 906 P.2d at 667. In those cases we held that an appellate court may review any sentence imposed in a criminal case, if it is alleged that such sentence is illegal or exceeds statutory mandates, even if no objection is made at the time of sentencing. Hatfield, 846 P.2d at 1029; Lenihan, 602 P.2d at 1000.

Both Hatfield and Lenihan involved situations where the judgment was void due to lack of statutory authority. In Hatfield and Lenihan, the district courts’ sentences were illegal or in excess of statutory authority because the courts lacked the specific statutory authority to impose the sentence. See Nelson, 906 P.2d at 668. Unlike Hatfield and Lenihan, Swoboda’s sentence is neither illegal nor does it exceed statutory authority.

Swoboda was sentenced to fifteen years with the Department of Corrections and Human Services for the offense of sexual abuse of children, a felony, in violation of § 45-5-625, MCA. When Swoboda was sentenced, a person convicted of this offense could be punished by imprisonment for a term not to exceed 50 years or fined not more than $10,000, or both. Section 45-5-625(2)(b), MCA(1993). Swoboda’s fifteen-year sentence is thus neither illegal nor in excess of the statutory mandates.

Additionally, §§ 46-18-201(11) and 46-18-225, MCA, do not preclude a court from sentencing a nonviolent felony offender to prison. Nelson, 906 P.2d at 668. Section 46-18-225, MCA, states: “Prior to sentencing a nonviolent felony offender to a term of imprisonment ...” the court shall take into account certain criteria (emphasis added). Section 46-18-201(11) states: “If the offender is subsequently sentenced to the state prison ...” the court shall state why alternatives to imprisonment were not selected (emphasis added). Although these statutes require consideration of alternatives to imprisonment, such consideration would not have necessarily changed the court’s final sentence for Swoboda.

Finally, Swoboda argues that the District Court violated Swoboda’s rights of due process by not considering alternatives to imprisonment. Therefore, Swoboda alleges, even though she did not object to the District Court’s failure to consider alternatives to imprisonment, we should review her sentencing under the “plain error” exception to § 46-20-104, MCA. Section 46-20-104(2), MCA, provides:

Upon appeal from a judgment, the court may review the verdict or decision and any alleged error objected to which involves the merits or necessarily affects the judgment. Failure to make a timely objection during trial constitutes a waiver of the objection except as provided in 46-20-701(2).

The exceptions provided in § 46-20-701(2), MCA, are as follows:

Any error, defect, irregularity, or variance which does not affect substantial rights shall be disregarded. No claim alleging an error affecting jurisdictional or constitutional rights may be noticed on appeal, if the alleged error was not objected to as provided in 46-20-104, unless the defendant [convicted person] establishes that the error was prejudicial as to his guilt or punishment and that:
(a) the right asserted in the claim did not exist at the time of the trial and has been determined to be retroactive in its application;
(b) the prosecutor, the judge, or a law enforcement agency suppressed evidence from the defendant [convicted person] or his attorney that prevented the claim from being raised and disposed of; or
(c) material and controlling facts upon which the claim is predicated were not known to the defendant [convicted person] or his attorney and could not have been ascertained by the exercise of reasonable diligence.

Swoboda does not argue that any of exceptions provided by subsections (a), (b), or (c), are present. Rather, Swoboda’s contention concerning these exceptions is limited to the following argument:

The legislature has provided a process which a sentencing court must follow prior to determining whether a person convicted of a crime should be imprisoned. § 46-18-201 and § 46-18-225. In the instant case, the sentencing court did not consider the sentencing statutes in violation of Swoboda’s due process rights. Such a due process violation is manifestly unjust. Consequently, Swoboda asks this court to find that the sentencing court abused its discretion when it failed to comply with Swoboda’s due process rights prior to passing sentence.

Swoboda’s failure to discuss the provisions of § 46-20-701(2)(a)(b) and (c) defeats any application of the statutory exceptions in this case.

Nonetheless, we recently held that the doctrine of common law plain error review can continue to survive despite the existence of Montana’s plain error statute. State v. Finley (1996), [276 Mont. _], 915 P.2d 208. In Finley, we discussed the background and application of the common law doctrine of plain error as well as the statutory requirements of § 46-70-701(2), MCA, in Montana. In Finley, we articulated an understandable rationale and rule concerning plain error. Finley, 915 P.2d at 215. In Finley, we held:

this Court may discretionarily review claimed errors that implicate a criminal defendant’s fundamental constitutional rights, even if no contemporaneous objection is made and notwithstanding the inapplicability of the § 46-20-701(2), MCA, criteria, where failing to review the claimed error at issue may result in a manifest miscarriage of justice, may leave unsettled the question of the fundamental fairness of the trial or proceedings, or may compromise the integrity of the judicial process.

Finley, at 215.

Here, our refusal to review the District Court’s failure to consider alternative to imprisonment does not rise to the level of a manifest miscarriage of justice, will not leave unsettled the question of the fundamental fairness of the trial or proceedings, nor will it compromise the integrity of the judicial process. Finley, 53 St.Rep. at 315. As stated earlier, Swoboda’s sentence is neither illegal nor in excess of the statutory mandates. Under §§ 46-18-201(11) and 46-18-225, MCA, the District Court was not precluded from sentencing a nonviolent felony offender to prison. Nelson, 906 P.2d at 668. Although these statutes require consideration of alternatives to imprisonment, such consideration would not have necessarily changed the court’s final sentence for Swoboda. Thus, we decline to review this unobjected-to error by the District Court under the plain error doctrine as articulated in Finley.

We do, however, restate our caution from Nelson:

Prior to sentencing a nonviolent felony offender to imprisonment, the court must examine and take into account the ten specific criteria set forth in § 46-18-225, MCA.
Section 225 requites consideration of such things as where the needs of the offender would be best served. These statutes do not provide the court with any discretion. The legislature has directed trial courts to make these considerations before any nonviolent offender is incarcerated.
LaMere, 900 P.2d at 928 (emphasis added). Explicit, rather than implicit consideration of the criteria makes for a much more meaningful appellate review. In future cases, we strongly encourage district courts, in imposing sentence upon nonviolent offenders, to specifically recognize and address the criteria set forth in § 46-18-225, MCA.

Nelson, 906 P.2d at 668. Notwithstanding our recognition of the importance of trial courts specifically addressing the criteria set forth in § 46-18-225, MCA, Swoboda, having failed to object to the sentence or to move for reconsideration, is barred from raising the issue of consideration of alternatives on appeal. Affirmed.

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

      Except for the “[convicted person]” language, this 1995 version of the statute is identical to the 1993 version in effect at the time of Swoboda’s sentencing.


author: CHIEF JUSTICE TURNAGE

text:
    MICHAEL PERIS, Personal Representative of the Estate of George Peris, Deceased, Plaintiff and Respondent, v. SAFECO INSURANCE COMPANY, Defendant and Appellant.
    No. 95-511.
    Heard March 28, 1996.
    Submitted April 11, 1996.
    Decided May 17, 1996.
    53 St.Rep. 481.
    916 P.2d 780.
    276 Mont. 486.

      For Appellant: Shelton C. Williams and Mark S. Williams (argued), Williams and Ranney, Missoula.
    For Respondent: James L. Jones (argued) and John G. Crist, Dorsey and Whitney, Billings.
   CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

The United States Court of Appeals for the Ninth Circuit has certified two questions to this Court herein, pursuant to Rule 44, M.R.App.P. The certified questions concern the effect, under Montana law, of certain terms of a motor vehicle insurance policy. Our answer to the first question is “yes” and to the second, “no.”

The certified questions are:

1. Is an insured entitled to maintain a cause of action under §§ 33-18-201 and -242, MCA, for the insurance company’s breach of its statutory obligation prior to either an adjudication of the underlying claim of the third party against the insured, or a written agreement by the insurance company settling the case, notwithstanding the “No Action” clause in the insured’s policy?

2. Is the insured barred by a “No Action” clause in his insurance policy from maintaining an action under §§ 33-18-201 and -242, MCA, where he has entered into a settlement without objection from the insurance company and where the insurance company has contributed its policy limits to the settlement?

The Ninth Circuit Court of Appeals has submitted the following statement of facts:

Plaintiff Michael Peris is the representative of the estate of George Peris, Safeco’s insured. In December 1990, George was involved in an automobile accident in which John Stepan was injured. In the underlying action, Stepan sued George for his injuries. There was no question that the policy covered the accident and that George was responsible.

During 1991 and 1992, upon receiving more information about Stepan’s worsening condition, Safeco made a number of settlement offers, increasing in amount, which Stepan rejected and countered with his own offers. First, in September 1991, Safeco offered to settle with Stepan for $8,960; Stepan offered to settle the claim for $100,000. Safeco responded by renewing its offer for $8,960 but offering up to $1,000 for any additional medical expenses to be incurred over the next 12 months. In November 1991, Stepan lowered his settlement offer to $65,000. In December 1991, Stepan was diagnosed with a potentially lifelong ailment, which led Safeco to increase its offer to $13,086. In January 1992, Stepan retained counsel and filed suit against Peris. In February 1992, Stepan offered to settle for $100,000, the limit on Peris’ Safeco policy; in return, Safeco offered to settle for $15,000. In March 1992, Peris told Safeco that he was concerned about an excess verdict and would hold Safeco responsible if it failed to settle the case within its policy limits; Safeco increased its offer to $25,000.

In September 1992, Peris again asked Safeco to settle the case within policy limits or to accept responsibility for an excess verdict. In February 1993, Stepan offered to settle for $165,000. On March 12,1993, Vucurovich — counsel whom Safeco had hired to represent Peris in the case — advised Safeco that “[t]here are significant dangers that this case could possibly exceed the policy limits.” Safeco then offered to settle for $100,000. Stepan countered with a demand for $150,000. Safeco refused to pay more than $100,000 and advised Peris that he would be responsible for any excess verdict over that amount.

On March 22, 1993, Peris and his personal attorney met with Vucurovich. They discussed the various risks involved. When the question of Peris’ entering into a direct settlement with Stepan came up, Vucurovich told Peris, “It’s your call.” Peris then entered into negotiations with Stepan and made an offer of $140,000, which Stepan’s attorney agreed to recommend to his client. Peris asked Safeco to split the amount over $100,000 up to $140,000 on a 50-50

basis; Safeco refused. Peris then settled the case by paying $135,894.85, consisting of $100,000 from Safeco and $35,894.85 from Peris’ estate. Peris again asked Safeco to pay half of the excess and Safeco again refused.

Peris sued Safeco in the Butte Division of the United States District Court, alleging that Safeco violated Montana statutes prohibiting unfair claim settlement practices by insurance companies. The Ninth Circuit Court’s statement of facts continues:

At the end of the trial, the jury returned a verdict of $35,894.85 compensatory and $250,000 punitive damages. On appeal, Safeco argues that plaintiff’s claim is barred by the “No Action” clause of the policy which states in relevant part:
§ 5 ... The insured shall not except at his own cost, voluntarily make any payment... other than for such immediate medical and surgical relief to others as shall be imperative at the time of accident.
§ 6 ... No action shall lie against the company until after full compliance with all the terms of this policy nor until the amount of the insured’s obligation to pay shall have been finally determined either by judgment against the insured after actual trial or by written agreement of the insured, the claimant and the company. (Emphasis added.)
Safeco argues that the emphasized language in the policy bars plaintiff’s action since he unilaterally settled the case with Stepan. Plaintiff contends that Safeco’s defense is barred by, inter alia, the Montana Unfair Claims Settlement Practices Act. Mont. Code Ann. § 33-18-242(1), (3).

Safeco appealed to the Ninth Circuit Court of Appeals, which has certified to this Court the following questions of Montana law.

Issue 1

Is an insured entitled to maintain a cause of action under §§ 33-18-201 and -242, MCA, for the insurance company’s breach of its statutory obligation prior to either an adjudication of the underlying claim of the third party against the insured, or a written agreement by the insurance company settling the case, notwithstanding the “No Action” clause in the insured’s policy?

The statutes cited are part of Title 33, Chapter 18, MCA, which is entitled “Unfair Trade Practices” (the Act). The purpose of the Act is to define and prohibit unfair methods of competition and unfair or deceptive acts or practices in the insurance business. Section 33-18-101, MCA.

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

Unfair claim settlement practices prohibited. No person may, with such frequency as to indicate a general business practice, do any of the following:
...
(4)refuse to pay claims without conducting a reasonable investigation based upon all available information;
...
(6) neglect to attempt in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clearf.]

Section 33-18-242, MCA, provides:

Independent cause of action — burden of proof. (1) An insured or a third-party claimant has an independent cause of action against an insurer for actual damages caused by the insurer’s violation of subsection (1), (4), (5), (6), (9), or (13) of 33-18-201.
(2) In an action under this section, a plaintiff is not required to prove that the violations were of such frequency as to indicate a general business practice.
(3) An insured who has suffered damages as a result of the handling of an insurance claim may bring an action against the insurer for breach of the insurance contract, for fraud, or pursuant to this section, but not under any other theory or cause of action. An insured may not bring an action for bad faith in connection with the handling of an insurance claim.
(4) In an action under this section, the court or jury may award such damages as were proximately caused by the violation of subsection (1), (4), (5), (6), (9), or (13) of 33-18-201. Exemplary damages may also be assessed in accordance with 27-1-221.
(5) An insurer may not be held liable under this section if the insurer had a reasonable basis in law or in fact for contesting the claim or the amount of the claim, whichever is in issue.
(6) (a) An insured may file an action under this section, together with any other cause of action the insured has against the insurer. Actions may be bifurcated for trial where justice so requires.
(b) A third-party claimant may not file an action under this section until after the underlying claim has been settled or a judgment entered in favor of the claimant on the underlying claim.
(7) The period prescribed for commencement of an action under this section is:
(a) for an insured, within 2 years from the date of the violation of 33-18-201; and
(b) for a third-party claimant, within 1 year from the date of the settlement of or the entry of judgment on the underlying claim.
(8) As used in this section, an insurer includes a person, firm, or corporation utilizing self-insurance to pay claims made against them.

Safeco argues that the above provisions are not invoked in this case because Peris’ payment under settlement with Stepan occurred without the entry of a judgment in Stepan’s favor. Safeco’s position is that such a “voluntary” payment is outside the protections of the Act.

Safeco cites Fode v. Farmers Ins. Exchange (1986), 221 Mont. 282, 719 P.2d 414, as authority for its position. In Fode, this Court held that proceedings in a bad faith case against an insurer alleging statutory violations which require a showing that liability be reasonably clear may not be conducted until “the liability issues of the underlying case have been determined either by settlement or judgment.” Fode, 719 P.2d at 417.

However, § 33-18-242, MCA, was not enacted until a year after Fode was decided. Because this Court did not interpret the statute here at issue in Fode, Fode is not controlling. “Although both parties rely heavily on [Fode], we conclude that § 33-18-242, MCA, enacted in 1987, is controlling.” Lough v. Insurance Co. of North America (1990), 242 Mont. 171, 173, 789 P.2d 576, 578.

The purpose of a court’s interpretation of a statute is to effectuate the intent of the legislature. Pretty On Top v. Snively (1994), 266 Mont. 45, 47, 879 P.2d 49, 50. If the intent of the legislature can be determined from the plain meaning of the words used, the court may not go further or apply other means of construction. Wunderlich v. Lumbermens Mut. Cas. Co. (1995), 270 Mont. 404, 410, 892 P.2d 563, 567. When the language of a statute is plain, unambiguous, direct and certain, the statute speaks for itself and there is nothing left for the corut to construe. State v. Mummey (1994), 264 Mont. 272, 277, 871 P.2d 868, 871.

In analyzing the question before us, we first focus our attention on subsection (6) of § 33-18-242, MCA. Part (b) of that subsection prohibits a third-party claimant from filing an action under the Act until the underlying claim has been settled or a judgment has been entered in favor of the claimant on the underlying claim. Part (a) of subsection (6) is addressed to claims filed by the insured. In contrast to part (b), part (a) does not prohibit an insured from filing an action prior to settlement or judgment upon the underlying claim.

If, as Safeco argues, the legislature had wanted to subject insureds’ claims requiring a showing that liability is reasonably clear to the same restrictions as the legislature placed on third-party claims, it could easily have done so. It did not. The existence of such a statutory restriction on third-party claims, and its absence as to any claims by insureds, indicates that the legislature did not intend to require the adjudication or settlement of the underlying claim as a precondition to the insured’s filing of a claim for violation of the Act.

The text of subsection (6)(a) supplies additional information on the intent of the legislature. Subsection (6)(a) provides that actions including claims under the Act “may be bifurcated for trial where justice so requires.” Section 33-18-242(6)(a), MCA. If, as Safeco argues, a statutory claim may never be brought until the underlying claim is resolved, it would be pointless for the legislature to give courts the discretion to bifurcate the insured’s statutory claim from the underlying action. This Court presumes that the legislature does not pass meaningless legislation. Crist v. Segna (1981), 191 Mont. 210, 212, 622 P.2d 1028, 1029.

Further, the legislature has established different statutes of limitation for claims by insureds and claims by third parties. An insured must bring his claim within two years of the date of the violation. Section 33-18-242(7)(a), MCA. A third-party claimant must bring his claim within a year of the date of “settlement of or the entry of judgment on the underlying claim.” Section 33-18-242(7)(b), MCA. By creating two different statutes of limitation, the legislature has accommodated the concept that third-party claims may not be brought until the settlement or adjudication of the underlying claim, while claims by the insured may be brought at any time:

We conclude that under the plain language of § 33-18-242, MCA, it is not necessary that settlement be approved by the insurer or judgment be rendered before an insured may file a cause of action against his or her insurer alleging violation of the Act. We now proceed to examine the effect, if any, of the “No Action” clause in Safeco’s insurance policy.

Safeco argues that the “No Action” clause in the insurance contract, §§ 5 and 6 set forth in the statement of facts above, creates a requirement which limits its liability under the Act. However, Montana law does not allow an insurer to change statutory requirements by creating new hurdles in its contracts.

All contracts which have for their object, directly or indirectly, to exempt anyone from responsibility for his own fraud, for willful injury to the person or property of another, or for violation of law, whether willful or negligent, are against the policy of the law.

Section 28-2-702, MCA. The Safeco insurance policy itself provides, at paragraph 19 under Conditions:

Terms of Policy Conformed to Statute. Terms of this policy which are in conflict with the statutes of the State wherein this policy is issued are hereby amended to conform to such statutes.

Section 33-18-242, MCA, clearly overrides the “No Action” clause of the insurance policy.

We hold that the answer to the Ninth Circuit Court’s first certified question is “yes.” Under Montana law, an insured is entitled to maintain a cause of action under the Act prior to either an adjudication of the underlying claim of the third party against the insured or a written agreement by the insurance company settling the case, notwithstanding a “No Action” clause in the insured’s policy.

Issue 2

Is the insured barred by a “No Action” clause in his insurance policy from maintaining an action under §§ 33-18-201 and -242, MCA, where he has entered into a settlement without objection from the insurance company and where the insurance company has contributed its policy limits to the settlement?

Neither party has argued any particular effects of the absence of objection by Safeco to the settlement entered, or of Safeco’s contribution of its policy limits to the settlement. In its arguments under this certified question, Safeco instead contends that Peris’ interpretation of the Act places control of the settlement process in the hands of the insured. Safeco asserts that this encourages collusion between insureds and injured third parties, and that it automatically makes the insurer responsible for voluntary payments by the insured.

Safeco’s arguments overlook the requirement that, to prevail under the Act, an insured has the burden of proving violation thereof to an impartial finder of fact. Here, Safeco passed up several opportunities to settle within policy limits. It informed Peris, as to the advisability of direct settlement, that “It’s your call.” Nevertheless, Safeco’s own attorney opined prior to settlement that a trial posed “significant dangers that this case could possibly exceed the policy limits.” Safeco was aware of the settlement offer and of Peris’ decision to accept it. Finally, and critically, a jury in the Butte Federal District Court has determined, after hearing all the evidence, that Safeco’s practices violated the Act.

Good policy reasons exist for allowing an insured to file a claim against the insurer prior to approved settlement or judgment.

Following an insurer’s breach of its duty to settle, the only condition precedent to a cause of action is damages. There is no logical reason why those damages must take the form of an excess judgment as opposed to a reasonable settlement in excess of the policy limits. In fact, to so hold would penalize an insured for merely acting prudently. The insured, being faced with the potential of an adverse judgment in excess of policy limits, should not be forced to ignore advantageous settlement offers on the grounds that to accept such an offer would deprive the insured of extracontractual rights against the insurer.

Allen D. Windt, Insurance Claims and Disputes § 5.17 at p. 333 (1995).

Safeco makes a bald assertion that to allow Peris’ suit against it is contrary to the Contract Clause of the United States Constitution because the charge impairs the essence of the insurance contract. Safeco provides no authority for this assertion.

Safeco also cites case law from California and other jurisdictions concerning when an insured may file a bad faith claim against his insurer. E.g., Messersmith v. Mid-Century Ins. Co. (Cal.App. 4 Dist. 1995), 43 Cal.Rptr.2d 871. We point out that our answers to the questions here presented are based upon the Montana statutes discussed above. Case law from other jurisdictions concerning the common law tort of bad faith, in which the above statutes do not control, is of minimal persuasive value.

We conclude that the “No Action” clause does not bar Peris’ action against Safeco under §§ 33-18-201 and -242, MCA, where there was no objection by Safeco to the settlement and where Safeco contributed the policy limits to the settlement. The answer to the Ninth Circuit Court of Appeals’ second question is “no.”

JUSTICES TRIEWEILER, GRAY, HUNT, NELSON, ERDMANN and LEAPHART concur.

      . In denying review on September 14, 1995, the California Supreme Court ordered that the opinion not be officially published.


author: JUSTICE ERDMANN JUSTICE HUNT

text:
    VICTORIA KLOEPFER, Petitioner and Appellant, v. LUMBERMEN’S MUTUAL CASUALTY COMPANY, Respondent and Insurer for BECHTEL CONSTRUCTION COMPANY, Employer and Respondent.
    No. 95-437.
    Submitted on Briefs April 25, 1996.
    Decided May 20, 1996.
    53 St.Rep. 486.
    916 P.2d 1310.
    276 Mont. 495.

      For Appellant: James G. Edmiston, III, Edmiston Law Firm, Billings.
    For Respondent: Steven S. Carey, Carey, Meismer & McKeon, Missoula.
   JUSTICE ERDMANN

delivered the Opinion of the Court.

This is an appeal from the Workers’ Compensation Court judgment denying Victoria Kloepfer permanent total disability benefits. We affirm.

The issue presented for review is whether the Workers’ Compensation Court erred in denying Kloepfer permanent total disability benefits.

FACTS

From April through September 1991 Kloepfer worked as a general laborer for Bechtel Construction Company at the Conoco Refinery in Billings, Montana. During that time, Kloepfer filed an occupational disease claim for an injury arising out of her employment at Bechtel. The claim was accepted and she participated in a work-hardening program as part of her rehabilitation for her occupational disease. In that program, Kloepfer injured her back in April 1992 when she was directed to move a wheelbarrow loaded with gravel.

A diagnostic test in March 1993 revealed that Kloepfer had a small central disc protrusion, L5-S1. She was diagnosed with myofascial pain and complained of pain from her interscapular area down to her legs and toes. An orthopedic surgeon, Dr. Teal, performed a lumbar fusion at L5-S1 in an attempt to alleviate the pain. After the operation, Kloepfer experienced essentially the same pain as she had before.

Dr. Teal, as her treating physician, testified that there was nothing more he could do for her at that point. At the time of trial, she was receiving no treatment and took a mild analgesic for pain. Kloepfer has reached maximum healing and maintains that her pain renders her incapable of gainful employment and that she is therefore permanently and totally disabled.

At the request of Lumbermens Mutual Casualty Company, Kloepfer was evaluated by an independent medical panel of physicians in Missoula. The panel concluded that Kloepfer could perform sedentary and light-duty work on a full-time basis. Kloepfer’s treating physician, Dr. Teal, testified that he felt she could work at least part-time although with significant absenteeism. The Workers’ Compensation Court concluded that Kloepfer’s pain did not preclude her from returning to work. From the Workers’ Compensation Court’s judgment denying permanent total disability benefits, Kloepfer appeals.

DISCUSSION

Did the Workers’ Compensation Court err in denying Kloepfer permanent total disability benefits?

The Workers’ Compensation Court found that Kloepfer could return to work full-time if she was motivated to do so. However, the court found that Kloepfer was unmotivated to work and that her lack of motivation was fueling the pain which she claimed prevented her from working. The court found that Kloepfer’s physical condition did not preclude her from working. Pursuant to those findings, the court determined that Kloepfer was not permanently totally disabled and was not entitled to permanent total disability benefits.

We review the Workers’ Compensation Court’s findings of fact to determine whether they are supported by substantial credible evidence. We review the Workers’ Compensation Court’s conclusions of law to determine whether the court’s interpretation of the law is correct. Williams v. Plum Creek Timber (1995), 270 Mont. 209, 212, 891 P.2d 502, 503.

Permanent total disability is defined in § 39-71-116(23), MCA, to mean

a physical condition resulting from injury as defined in [the Workers’ Compensation Act], after a worker reaches maximum medical healing, in which a worker does not have a reasonable prospect of physically performing regular employment. Regular employment means work on a recurring basis performed for remuneration in a trade, business, profession, or other occupation in this state. Lack of immediate job openings is not a factor to be considered in determining if a worker is permanently totally disabled.

Conflicting testimony was presented regarding Kloepfer’s ability to physically perform regular employment. Kloepfer’s treating physician, Dr. Teal, testified that Kloepfer could only perform part-time work and her work would be subject to significant increased absenteeism on days when she was in severe pain. Due to these restrictions on employment, Dr. Teal opined that Kloepfer could not return to regular employment and was therefore permanently totally disabled.

At the defendant’s request, an independent medical panel was assembled consisting of an occupational and environmental medicine specialist, an orthopedic surgeon, a neurologist, and a psychologist specializing in pain evaluation and management. The panel examined Kloepfer and concluded that she did suffer from chronic pain but that it was due to a somatoform disorder, which meant her pain was amplified on account of psychological factors. In the panel’s opinion, Kloepfer could perform entry level, light-duty work on a full-time basis. Kloepfer claims that the District Court erred in discounting Dr. Teal’s opinion, as the opinion of her treating physician, in favor of the panel’s opinions.

As a general rule we have held that the testimony of a treating physician is entitled to greater evidentiary weight. Pepion v. Blackfeet Tribal Industries (1993), 257 Mont. 485, 489, 850 P.2d 299, 302. Nevertheless, a treating physician’s opinion is not conclusive. To presume otherwise would quash the role of the fact finder in questions of an alleged injury. The Workers’ Compensation Court, as the finder of fact, is in the best position to assess witnesses’ credibility and testimony. Miller v. Frasure (1994), 264 Mont. 354, 362, 871 P.2d 1302, 1307. “Even though conflicting evidence may exist in the record, it is the duty of the Workers’ Compensation Court, and not this Court, to resolve such conflicts.” Pepion, 850 P.2d at 302.

As the reviewing court, our function is confined to the Workers’ Compensation Court’s final determination and not to whether there was sufficient evidence to support contrary findings. Gaumer v. Dept. of Highways (1990), 243 Mont. 414, 418, 795 P.2d 77, 79. The Workers’ Compensation Court’s final determination was that Kloepfer

presented no evidence that her physical condition is permanently disabling. Her claim for disability is based on her assertion that she cannot work because of pain. While pain must be considered in determining the ability of an injured worker to return to work, Metzger v. Chemtron Corporation, 212 Mont. 351, 687 P.2d 1033 (1984), I am not persuaded that [Kloepfer’s] pain precludes her from returning to work. Rather, I am persuaded that claimant’s ability to return to work is purely a function of her motivation.

We have reviewed the record and conclude that it contains sufficient evidence to support the Workers’ Compensation Court’s finding that Kloepfer’s inability to return to work was a result of her lack of motivation and she was physically able to perform regular employment. Having reached that finding, the court correctly concluded that Kloepfer was not permanently totally disabled pursuant to § 39-71-116(23), MCA. Accordingly, the Workers’ Compensation Court did not err in denying Kloepfer permanent total disability benefits. Because we have affirmed the District Court’s determination that Kloepfer is not precluded from returning to full-time work, we need not address her contention that a release to restricted part-time work justified a finding of permanent total disability.

Affirmed.

JUSTICES GRAY, TRIEWEILER and LEAPHART concur.

JUSTICE HUNT

dissenting.

I dissent. Reading the majority opinion and the record, I can only conclude that the claimant in this case cannot enter into a full employment market and is restricted in what she can do regardless of what her motivation may be. The medical record as set forth by Dr. Teal, finds her to be suffering from chronic pain. The panel finds the pain was due to a psychological problem which Dr. Teal finds was the result of the injury claimant suffered. I believe because claimant is medically restricted in what work she can do she is entitled to permanent total disability.


text:
    BARBARA O. KING, Petitioner and Respondent, v. TRUDY KING, Personal Representative of the Estate of HUGH G. KING, BUD KING CONSTRUCTION COMPANY, a Montana Corporation, KING MOUNTAIN ROCK, a Colorado Corporation, KING LOGGING, a Montana Corporation, and SUNRISE SILVER MINES, INC., a Montana Corporation, Respondents and Appellants.
    No. 96-029.
    Submitted on Briefs May 2, 1996.
    Decided May 29, 1996.
    53 St.Rep. 489.
    917 P.2d 434.
    276 Mont. 500.

      For Appellants: David B. Cotner, Cynthia K. Staley; Boone, Karlberg & Haddon, Missoula.
    For Respondent: Sherman V. Lohn; Garlington, Lohn & Robinson, Missoula.
   JUSTICE LEAPHART

delivered the Opinion of the Court.

Trudy King, Personal Representative of the Estate of Hugh G. King (the Estate), appeals from the opinion and order of the Fourth Judicial District Court, Missoula County, denying her motion to modify the Estate’s monthly maintenance obligation. We affirm. The following dispositive issue is raised on appeal:

Did the District Court err in concluding that the separation agreement precludes modification of the maintenance award?

Hugh G. King (Hugh) and Barbara O. King (Barbara) were married in 1965 and their marriage was dissolved in 1990. The parties entered into a separation agreement which provided that Barbara would receive $3,000 per month in maintenance for five years and $3,500 per month thereafter. The maintenance obligation continues “for the duration of [Barbara’s] life” and does not terminate in the event of her remarriage.

Hugh died in July of 1992, and his daughter Trudy was appointed personal representative of his estate. Before his death, Hugh began construction of a golf course near Frenchtown, Montana. According to the Estate, the golf course has been unprofitable and has become a drain on the Estate’s resources as well as the resources of the Bud King Construction Company. Accordingly, on behalf of the Estate, Trudy filed a motion to substitute the Estate as the proper party to the dissolution action and sought to terminate the maintenance obligation based on “substantial financial problems” and changed circumstances. Barbara filed a brief in opposition asserting that under the terms of the separation agreement the maintenance provision was non-modifiable. Following the submission of additional briefs and oral argument, the District Court concluded that the maintenance obligation was not modifiable, and, on that basis, issued its opinion and order denying the Estate’s motion to terminate maintenance. The Estate appeals from this determination.

In reviewing a district court’s conclusions of law we determine whether the court’s interpretation of the law is correct. Stratemeyer v. Lincoln County (1996), [276 Mont. 67], 915 P.2d 175 (citing Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603-04). The Estate argues that the District Court erred in concluding that the separation agreement precluded modification. In addition, the Estate asserts that the separation agreement is ambiguous and that the parties intended for the agreement to be modifiable. Finally, the Estate asserts that if the Court determines that the separation agreement is non-modifiable then a mutual mistake has occurred. We are unpersuaded by each of the Estate’s arguments.

Barbara asserts that the maintenance obligation is an integral part of the property division and cannot be modified without the consent of the parties. In addition, she argues that the separation agreement contains a valid and enforceable modification clause which requires the written mutual consent of both parties. The District Court agreed with Barbara on both theories. The court determined that the modification clause requires the written mutual consent of the parties and, independently of the modification provision of the agreement, a maintenance requirement which is an integral part of the property distribution cannot be modified without the consent of the parties. Since, based on our case law, we hold that a maintenance provision which is an integral part of the property distribution is not modifiable without the consent of the parties, we do not reach the question of the correct interpretation of the modification provision of the parties’ agreement.

In its opinion and order the District Court noted that:

However, while the Court is deeply concerned with the current financial difficulties the Estate is experiencing as a result of Mr. King’s unfortunate business decision, Mrs. King’s monthly maintenance represents her equitable interest in the marital assets as they existed at the time of the 1990 dissolution decree and, as such, she is as valid a creditor against the Estate under the terms of the Agreement as is any other creditor. [Emphasis added.]

The District Court stated that although Hugh’s decision to construct a restaurant and golf course may have been an unfortunate business decision, the decision was exclusively Hugh’s and that it is not unconscionable to require him, and subsequently his estate, to shoulder any losses. The District Court also found that:

The parties’ intent that lifetime monthly maintenance and use of the Canyon Gate home represented Mrs. King’s interests in the marital property is evidenced in the Recitals .... This intent is further evidenced by the fact that the businesses were actually joined as parties to the dissolution proceeding, reflecting the nature of the businesses as integral to the marital estate, and the further fact that the property division provision of the Agreement provided in relevant part:
It is agreed that none of the corporations ... shall be required to disburse any assets. Said corporations shall remain intact in its [sic] present form with its [sic] present officers, present directors, and shareholders. Wife releases and relinquishes all rights, title, claim, and demand in any property which belongs to these corporations .... [Emphasis added.]

Thus, it is clear that the District Court held that the maintenance provision was, in fact, a means to provide Barbara with her equitable interest in the marital assets without dissolving the various corporate entities owned or controlled by Hugh.

When the parties label a provision in the separation agreement as “maintenance,” this Court is not bound by that label. Hopper v. Hopper (1979), 183 Mont. 543, 550, 601 P.2d 29, 33. That is, if the maintenance award is an integral part of the property distribution and that was the intent of the parties at the tíme of the agreement, the district court may find that the maintenance award is part of the property division and cannot be modified without the consent of the parties. Washington v. Washington (1973), 162 Mont. 349, 354, 512 P.2d 1300, 1302-03.

In Washington, this Court considered a maintenance provision which was to continue for nine years and did not terminate upon remarriage. The Court determined that the support provision could not be severed from the property settlement agreement without destroying the contract. Washington, 512 P.2d at 1302-03. We noted that in consideration of the agreement, the wife “relinquished all claims against property owned by the husband.” Washington, 512 P.2d at 1303.

Similarly, in the instant case, the separation agreement between the parties specified that the maintenance obligation “shall continue for the duration of [Barbara’s] life.” The agreement also provided that:

[N]orie of the corporations ... shall be required to disburse any assets. Said corporations shall remain in its [sic] present form with its [sic] present officers, present directors, and shareholders. Wife releases and relinquishes all rights, title, claim, and demand in any property which belongs to these corporations ....

Thus, our analysis in Washington is applicable here. The maintenance provision was intended to provide the wife’s equitable interest in the marital estate.

In In re Marriage of Robertson (1989), 237 Mont. 406, 773 P.2d 1213, this Court stated “it is clear to this Court that wife’s monthly payments were an inseverable part of a property settlement arrangement. The obligation was undertaken by the husband in exchange for the wife’s forbearance in regard to the property of the marital estate.” Marriage of Robertson, 773 P.2d at 1216. In the instant case, based on the separation agreement and the arguments presented, the District Court determined that the maintenance obligation represented Barbara’s equitable interest in the marital assets. As in Washington and Marriage of Robertson, the maintenance provision was integral to the property settlement and, absent the consent of the parties, is not modifiable. Marriage of Robertson, 773 P.2d at 1216; Washington, 512 P.2d at 1302-03.

Accordingly, we determine that the District Court correctly denied the Estate’s motion to terminate the maintenance obligation.

Affirmed.

JUSTICES NELSON, GRAY, HUNT and TRIEWEILER concur.


author: JUSTICE GRAY

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. RANDY WEAVER, Defendant and Appellant.
    No. 95-261.
    Submitted on Briefs April 4, 1996.
    Decided May 29, 1996.
    53 St.Rep. 495.
    917 P.2d 437.
    276 Mont. 505.

      For Appellant: William F. Hooks, Appellate Defender, Helena.
    For Respondent: Hon. Joseph P. Mazurek, Attorney General, Carol Schmidt, Ass’t Attorney General, Helena; Dale Mrkich, Deputy Yellowstone County Attorney, Billings.
   JUSTICE GRAY

delivered the Opinion of the Court.

Randy Weaver (Weaver) appeals from judgments and sentences of the Thirteenth Judicial District Court, Yellowstone County, entered on his convictions for the offenses of issuing bad checks, assault and domestic abuse. We vacate the judgments and sentences and remand with instructions.

Weaver raises the following issues on appeal:

1. Did the District Court abuse its discretion in failing to rule on Weaver’s motion to withdraw his guilty pleas?

2. Did the District Court err in failing to inquire into Weaver’s contention that his counsel rendered ineffective assistance?

On October 25,1994, the State of Montana (State) charged Weaver by Information with the following offenses: issuing bad checks, a felony, in violation of § 45-6-316, MCA; assault, a felony, in violation of § 45-5-202(2)(b), MCA; and domestic abuse, a misdemeanor, in violation of § 45-5-206(1)(c), MCA. Weaver pled not guilty to all of the charges.

On January 26, 1995, the State moved for leave to amend the Information against Weaver regarding the felony assault charge. Weaver did not object and the District Court amended the Information by interlineation; the felony assault charge was dropped and Weaver was charged with assault, a misdemeanor, in violation of § 45-5-201(1)(d), MCA. On that same day, Weaver withdrew his not guilty pleas and pled guilty to the charges of issuing bad checks and domestic abuse. He also pled guilty to the misdemeanor assault charge contained in the amended Information. Weaver signed an “Acknowledgement of Waiver of Rights by Plea of Guilty” covering all three charges.

Weaver subsequently filed a document entitled “Application for Plea Reversial [sic]” seeking either permission to withdraw his guilty pleas or dismissal of all charges against him. He based his request on allegations of prosecutorial misconduct and ineffective assistance of court-appointed counsel. The following day, Weaver filed a “Motion to Relieve Counsel” requesting that the District Court allow him to proceed pro se.

On March 29, 1995, the District Court held a sentencing hearing. The court asked Weaver if he had “any cause to show why this Court should not pronounce your sentence at this time?” Weaver replied that he did, and referred the court to his pending motions. In response, the District Court stated:

The Court has reviewed most of the motions that have been filed in these matters, and I don’t see where they will have anything to do with the sentencing in this matter, Mr. Weaver.

The District Court proceeded to sentence Weaver on all three charges. Weaver appeals.

1. Did the District Court abuse its discretion in failing to rule on Weaver’s motion to withdraw his guilty pleas?

Weaver argues on appeal that the District Court erred in failing to rule on his motion. The State does not address Weaver’s argument per se. Rather, the State seems to assume that the court’s failure to “formally” rule on Weaver’s motion to withdraw his guilty pleas constituted a denial of that motion. It argues, on the merits, that the denial was not an abuse of discretion.

At the outset, we cannot agree with the State’s characterization that the District Court denied Weaver’s motion to withdraw his guilty pleas. The District Court’s statement that it had “reviewed most of [Weaver’s] motions” is insufficient to even advise this Court that it was aware of, and had actually reviewed, Weaver’s motion to withdraw his guilty pleas. Moreover, the District Court’s statement that it did not “see where [the motion] will have anything to do with sentencing in this matter ...” can only be interpreted as a determination by the court that it would not consider Weaver’s motion. Had the District Court intended to deny Weaver’s motion on the merits, we are confident that it would have met the requirement of State v. Milinovich (1994), 269 Mont. 68, 75, 887 P.2d 214, 218, that district courts “explain their reasoning when refusing motions to withdraw guilty pleas.” See also State v. Azure (1977), 175 Mont. 189, 193, 573 P.2d 179, 182. Consistent with that requirement, we have stated:

That a trial court has a right to exercise its discretion does not mean that a trial court should not disclose the reasons underlying a discretionary act. Absent these reasons, we as an appellate court, are left to guess as to why the trial court made a particular decision.

State v. Stumpf (1980), 187 Mont. 225, 226, 609 P.2d 298, 299.

Section 46-16-105(2), MCA, provides that “[a]t any time before or after judgment the court may, for good cause shown, permit the plea of guilty to be withdrawn and a plea of not guilty substituted.” No set rule or standard exists under which a district court considers a motion to withdraw a guilty plea; each case must be considered in light of its unique facts. State v. Enoch (1994), 269 Mont. 8, 11, 887 P.2d 175, 177 (citing State v. Radi (1991), 250 Mont. 155, 158-59, 818 P.2d 1203, 1206).

We repeatedly have stated that a motion to withdraw a guilty plea “rests within the District Court’s discretion and the exercise of that discretion will not be disturbed absent an abuse of discretion.” State v. Miller (1991), 248 Mont. 194, 197, 810 P.2d 308, 310; Benjamin v. McCormick (1990), 243 Mont. 252, 256, 792 P.2d 7, 10; State v. Mesler (1984), 210 Mont. 92, 96, 682 P.2d 714, 716 (emphasis added). Likewise, we have stated that “[t]he granting or refusal of permission to withdraw a plea of guilty and substitute a plea of not guilty rests in the discretion of the District Court ....” State v. Arbgast (1983), 202 Mont. 220, 223, 656 P.2d 828, 830 (emphasis added).

Thus, while it is true that we generally defer to discretionary decisions of district courts, this rule presupposes that the court did, in fact, exercise its discretion. Indeed, our abuse of discretion standard of review can only be premised on the district court having exercised its discretion; otherwise, there is nothing for us to review. Therefore, we conclude, as have courts from other jurisdictions, that a court’s failure to exercise its discretion is, in itself, an abuse of discretion. See, e.g., State v. Colton (Conn. 1995), 663 A.2d 339, 349; Johnson v. United States (D.C. 1979), 398 A.2d 354, 363.

Accordingly, we hold that the District Court’s failure to rule on Weaver’s motion to withdraw his guilty pleas prior to sentencing constituted an abuse of the court’s discretion. It is necessary, therefore, to remand this case to the District Court for its consideration and decision on Weaver’s pending motion to withdraw his guilty pleas. If the court grants Weaver’s motion, then this case will proceed to trial. If, on the other hand, the court denies Weaver’s motion, the court should provide its rationale for the denial so that we have a basis upon which to review its decision in the event of a subsequent appeal. See Stumpf, 609 P.2d at 299.

2. Did the District Court err in failing to inquire into Weaver’s contention that his counsel rendered ineffective assistance?

As previously stated, Weaver based his motion to withdraw his guilty pleas, in part, on allegations of ineffective assistance of counsel. Weaver attached a document captioned “Allegations” to his motion to withdraw his guilty pleas in which he set forth the following complaints regarding the performance and conduct of his attorney:

(1) ... That [Weaver’s] right to a “Preliminary Hearing” as stated in M.C.A. was waived without [his] consent. ...
(2)... That on the 26th day of January 1995, [Weaver] was decieved [sic] by the Yellowstone County Public Defender’s Office by same withholding vitil [sic] information, that had [he] seen this, he would have never pled guilty.
....
(4) The Yellowstone County Public Defenders Office never did prepare ... his case for trial, that they had no intentions of providing [him] with proper representation!;] after [he] wrote to a District Court Judge complaining of “inefficient counsel, and professional misconduct” ... the Public Defender’s Office came to the Yellowstone County Detention Facility and bombared [sic] [him] with abusive language and profanity.
(5) That [he] has proof of allegations stated above, and has since filed motions with the Montana Bar Association, seeking action against parties involved.

Weaver also filed a “Motion to Relieve Counsel” and requested that the District Court “grant [him] a pro se’ [sic] status, and thereby relieve present council [sic].”

At the sentencing hearing, Weaver referred the District Court to his pending motions, which included his motion to proceed pro se and the ineffective assistance allegations attached to his motion to withdraw his guilty pleas. The District Court did not consider or rule upon Weaver’s motion to “relieve” counsel; rather, the court indicated that Weaver could pursue an ineffective assistance claim through habeas corpus proceedings.

Weaver argues on appeal that the District Court erred by failing to inquire into his allegations of ineffective assistance of counsel. The State does not address Weaver’s argument regarding the court’s failure to conduct an inquiry; rather, it sets forth and discusses Weaver’s burden of proof in establishing an ineffective assistance claim and argues that, based on the record, Weaver did not raise “substantial complaints” regarding bis counsel’s representation. We agree with Weaver that the threshold issue is not whether counsel was ineffective, but whether the District Court erred in failing to make an adequate inquiry into his claim of ineffective assistance of counsel.

The Sixth Amendment to the United States Constitution and Article II, section 24 of the Montana Constitution guarantee a criminal defendant the right to the assistance of counsel. The assistance must be effective in order to give true meaning to that right and to the right to a fair trial. See State v. Enright (1988), 233 Mont. 225, 228, 758 P.2d 779, 781. The right is fundamental and applies with equal force to all persons, regardless of their ability to compensate an attorney. Enright, 758 P.2d at 781 (citing Gideon v. Wainwright (1963), 372 U.S. 335, 83 S.Ct. 792, 9 L.Ed.2d 799). Additionally, the right to the assistance of counsel does not prohibit a defendant from rejecting the assistance of counsel. Enright, 758 P.2d at 781 (citing State v. Strandberg (1986), 223 Mont. 132, 724 P.2d 710).

District courts must conduct a hearing to determine the validity of a defendant’s claim of ineffective assistance of counsel upon a showing of seemingly substantial complaints. See State v. Finley (1996), [276 Mont. 126], 915 P.2d 208, 219; State v. Morrison (1993), 257 Mont. 282, 285, 848 P.2d 514, 516; Enright, 758 P.2d at 782. Indeed, a district court should substitute counsel if it appears that failure to do so would substantially impair or deny the defendant’s right to the effective assistance of counsel. See Enright, 758 P.2d at 782 (citing Peters v. State (1961), 139 Mont. 634, 636, 366 P.2d 158, 159).

“In determining if [the] defendant presented a seemingly substantial complaint about counsel, it follows that the district court must make an adequate inquiry into the defendant’s complaints.” Finley, 915 P.2d at 219. When a defendant files a motion to remove his attorney based on allegations of ineffective assistance, whether through a motion for substitution of counsel or a motion to proceed pro se, the district court must make a critical analysis of the defendant’s complaints regarding his counsel and make an initial determination of whether the defendant has presented seemingly substantial complaints. See Finley, 915 P.2d at 219.

As with Weaver’s motion to withdraw his guilty pleas, the District Court’s statement that it had “reviewed most of [Weaver’s] motions” is insufficient to even assure this Court that the District Court actually reviewed Weaver’s motion to remove his court-appointed counsel. Most importantly, the record is devoid of any indication that the court made even a cursory inquiry into Weaver’s complaints about his counsel’s representation.

Accordingly, we conclude that the District Court erred in failing to inquire into Weaver’s allegations of ineffective assistance of counsel and in failing to make an initial determination of whether Weaver presented seemingly substantial complaints. It is necessary, therefore, to remand this case to the District Court so that it can make an adequate inquiry into Weaver’s allegations and determine whether he has presented seemingly substantial complaints. If the court determines that Weaver has presented seemingly substantial complaints, the court will proceed accordingly and conduct a hearing to determine the validity of Weaver’s complaints. If, on the other hand, the court determines that Weaver has not presented seemingly substantial complaints, then the court will deny Weaver’s motion to remove his attorney. Finally, if the District Court ultimately denies the defendant’s motion, the court should provide its rationale so that we have a basis upon which to review the decision in the event of a subsequent appeal. See Stumpf, 609 P.2d at 299.

We vacate the judgments and sentences and remand to the District Court for further proceedings consistent with this opinion, including the reinstatement of the judgments and sentences in the event the court denies both Weaver’s motion to withdraw his guilty pleas and his motion to proceed pro se.

JUSTICES NELSON, HUNT, ERDMANN and TRIEWEILER concur.