text:
    MIDFIRST BANK, STATE SAVINGS BANK, Plaintiff and Respondent, v. LARRY D. RANIERI; UNITED STATES OF AMERICA - DEPARTMENT OF THE TREASURY - INTERNAL REVENUE SERVICE; and STATE MONTANA - DEPARTMENT OF REVENUE, Defendants and Appellants.
    No. 92-267.
    Submitted on Briefs December 3, 1992.
    Decided March 18, 1993.
    50 St.Rep. 284.
    257 Mont. 312.
    848 P.2d 1046.

      For Defendants and Appellants: Carl A. Hatch, Small, Hatch, Doubek & Pyfer, Helena.
    For Plaintiff and Respondent: Mark E. Noennig, Hendrickson, Everson & Noennig, Billings.
   JUSTICE GRAY

delivered the Opinion of the Court.

Larry Ranieri appeals from an order of the First Judicial District Court, Lewis and Clark County, granting summary judgment in favor of Midfirst Bank. We affirm.

We state the issues on appeal as follows:

1) Did the District Court err in concluding that a deficiency judgment was available following judicial foreclosure of a deed of trust securing a single family dwelling that the borrower operated as rental property?

2) Did the District Court err in determining that Midfirst Bank could cancel nonjudicial foreclosure proceedings prior to the trustee’s sale and elect to foreclose judicially?

The parties do not dispute the relevant facts in this case. Appellant Larry Ranieri (Ranieri) is a retired Army officer who has sold real estate and owned various rental properties. In 1982, Ranieri’s daughter, Vicki, moved to Helena and purchased a townhouse located at 911 Hialeah in Helena. She attempted to finance the home through a HUD loan, but that financing fell through, leaving her with monthly payments significantly higher than anticipated. In July of 1983, Vicki moved to Wisconsin, and asked her father to either sell or rent the townhouse to cover the monthly loan payments. Ranieri obliged, although the rent he received was about $200 less than the monthly payment. In January of 1984, Ranieri began paying the difference between the rent and the loan payment for his daughter. He also claimed rental income and depreciated the property for tax purposes beginning in 1984.

In October of 1985, Ranieri attempted to refinance Vicki’s loan in his name in hopes of lowering the monthly payments and possibly moving into the townhouse until he sold it. He withdrew his application, however, when his wife refused to move into the townhouse. Six days later, Ranieri accepted a warranty deed for the townhouse from his daughter.

Renters continued to occupy the townhouse. Between renters in April of 1985, Ranieri stayed at the townhouse for approximately fifteen days while briefly separated from his wife. After reconciling, his wife agreed to move into the townhouse, and Ranieri again applied for refinancing. On November 4, 1985, he executed a Note and Trust Indenture to Midfirst Bank (Midfirst) to secure the new loan. Prior to closing, however, his wife rented another home; Ranieri and his wife did not move into the townhouse as planned. The current renters continued to reside at 911 Hialeah.

Shortly after the refinancing was completed, the Ranieris separated for approximately one year. During this separation, Ranieri lived with a friend or in his real estate office, “sleeping out of a suitcase.” Between renters, he stayed at the townhouse twice, for approximately a week each time. He collected mail at his real estate office, however, and considered it his permanent residence.

Throughout his ownership of the townhouse, Ranieri rented the townhouse to various tenants. From 1984 through 1990, Ranieri claimed rental income, depreciation and business deductions generated by the townhouse on his federal and state income tax returns. In total, he claimed in excess of $20,000 in rental income and over $50,000 of deductions.

Ranieri defaulted on the trust indenture on November 1, 1989. In September of 1990, Midfirst initiated a nonjudicial foreclosure and sent notice of the trustee’s sale; the sale was postponed once and then canceled altogether. Ranieri made no further payments. Midfirst then initiated judicial foreclosure proceedings. On November 9, 1990, Midfirst filed a complaint seeking a personal judgment and a deficiency judgment against Ranieri. Both parties moved for summary judgment. The District Court granted summary judgment for Midfirst, and entered a judgment and decree of foreclosure on April 27, 1992. Ranieri appeals.

Did the District Court err in concluding that a deficiency judgment was available following judicial foreclosure of a deed of trust securing a single family dwelling that the borrower operated as rental property?

Summary judgment is appropriate if no genuine issues of material fact exist and if the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P. In this case, the parties do not dispute any genuine issue of material fact. Therefore, we review the District Court’s legal conclusions to determine if they are correct. Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 475, 803 P.2d 601, 603.

The District Court concluded that Midfirst could collect a deficiency judgment following judicial foreclosure of Ranieri’s trust indenture. The court determined that Ranieri did not qualify for the exception to deficiency judgments set out by this Court in First State Bank of Forsyth v. Chunkapura (1987), 226 Mont. 54, 734 P.2d 1203, which prohibits deficiency judgments following judicial foreclosure of trust indentures secured by occupied, single family residential property. The court reasoned that, because Ranieri resided at the townhouse for an insignificant amount of time and collected rents and depreciated the property, the Chunkapura exception did not apply.

On appeal, Ranieri argues that collecting rent from the property to make the loan payment does not make the property commercial in nature; therefore, he asserts, the rental of the townhouse does not prevent him from invoking the Chunkapura exception. He also argues that renters can occupy the property without disqualifying the borrower from Chunkapura’s protection, claiming that his intent to make the townhouse his residence should bring him within Chunkapura.

In Chunkapura, we held that a creditor seeking judicial foreclosure of an occupied, single family residential home secured by a trust deed cannot obtain a deficiency judgment. Chunkapura, 734 P.2d at 1211. Interpreting Montana’s Small Tract Financing Act, we concluded that a deficiency judgment under those circumstances would be inconsistent with the provisions and legislative intent of the Act. On rehearing, we carefully limited the holding to the facts of Chunkapura — a trust deed secured by an occupied, single family residential property — and expressly excluded those trust deeds securing loans in commercial settings. Chunkapura, 734 P.2d at 1211.

We subsequently have interpreted Chunkapura in relation to three different factual scenarios. We refused to apply Chunkapura to a trust deed securing a commercial warehouse in Carpenters Employers Retirement Trust v. Galleria Partnership (1989), 239 Mont. 250, 780 P.2d 608. We stated that the limited holding of Chunkapura did not apply to a purely commercial loan. Galleria, 780 P.2d at 613.

Here, Ranieri has operated the townhouse as a rental unit since he obtained title from his daughter. He has claimed rental income and taken significant deductions on his federal income taxes related to the townhouse. The Internal Revenue Code allows these deductions only if incurred in the taxpayer’s trade or business or for the production of income. See 26 U.S.C. § § 162-167. Ranieri’s tax returns evidence his own perceptions and intentions regarding the commercial nature of the townhouse.

Ranieri disagrees that the townhouse is commercial in nature. He argues that our decision in First Fed. Sav. & Loan v. Anderson (1989), 238 Mont. 296, 777 P.2d 1281, allows the borrower to rent out the property without changing its residential character to commercial. Ranieri overstates our fact-specific holding in Anderson.

In Anderson, the family executed a trust deed to secure their residential dwelling, which they occupied for the following seven years. When they put the property up for sale, they rented it out for eighteen months to make the payments. Anderson, 777 P.2d at 1282. We concluded that when the lender accepted the trust indenture, the deed related to occupied, single family residential property, and the fact that the family had rented it out briefly before sale did not preclude application of Chunkapura. Anderson, 777 P.2d at 1284.

Anderson involved residential property purchased and occupied as the family’s primary residence; the family purchased the home with the loan seemed by the trust indenture and immediately occupied it. In contrast, when Midfirst accepted the trust deed from Ranieri, Ranieri was operating the property as a rental unit, as he had for the preceding two years; indeed, he has never resided permanently in the townhouse. In addition, the eighteen month rental period prior to sale in Anderson, which followed a seven year occupation of the property as a residential dwelling, does not compare to the seven year rental arrangement managed by Ranieri. At the time of the trust indenture, Ranieri operated the townhouse as a rental unit, generating income and tax deductions, and he continued to do so throughout his ownership of the property. We conclude that the townhouse is commercial in nature.

Ranieri also contends that Chunkapura does not require that the borrower reside in the property. We addressed this argument recently in First Western Fed. Sav. Bank v. Lence (1992), [255 Mont. 7], 839 P.2d 1277, 49 St.Rep. 857. In Lence, the borrower purchased a condominium at Crystal Lake and secured the loan with a deed of trust. His primary residence was in Whitefish, although from 1977 to 1985, he spent the summer months at the condominium; he also rented it out intermittently in 1990. Lence defaulted and the lender instituted judicial foreclosure proceedings, seeking a deficiency judgment. Lence, 839 P.2d at 1278.

In allowing a deficiency judgment against Lence, we first focused on Lence’s admission that the condominium was not his primary residence. Under Montana law, a person has only one legal residence, and we concluded that the Chunkapura protection against deficiency judgments applies solely to that one legal residence. We also distinguished the nature of Lence’s summer condominium from the residential properties in Chunkapura and Anderson, which were purchased and utilized as the families’ primary residence. We stated:

We conclude that the condominium at issue here, never intended or occupied as Lence’s primary residence, does not qualify for the limitation on deficiencyjudgments established in Chunkapura and Anderson. To accept Lence’s argument would pervert the limited nature of the Chunkapura exception; it would allow a person to avoid the possibility of deficiency judgment on virtually unlimited numbers of properties by merely ensuring that each property was a residential unit and without regard to whether the property was ever intended or used as a personal, primary residence. Indeed, under Lence’s interpretation of Anderson, it would not be necessary that the borrower ever occupy the properties, so long as they were occupied by someone. Such results were not contemplated or intended by Chunkapura and Anderson....

Lence, 839 P.2d at 1280. Thus, we rejected in Lence Ranieri’s argument that Chunkapura applies if renters, rather than the borrower, occupy the property. Our decision in Lence requires that the property secured by the trust deed be the borrower’s actual, personal, primary residence.

As in Lence, the townhouse was never Ranieri’s actual, personal, primary residence. Ranieri admits that the townhouse was not his primary residence; even during the times of separation from his wife, he considered his real estate office his primary residence. Even though Ranieri has claimed a continuing intent to move into the townhouse, this intent did not materialize. Ranieri has spent, at the most, one month at the townhouse over the seven year span. As such, pursuant to Lence, the Chunkapura exception does not apply.

In sum, the Chunkapura exception is limited to single family residential property occupied by the borrower as his or her primary legal residence. As discussed, Ranieri has not “occupied” the property, as required by our decision in Lence. Further, the townhouse is commercial, not residential, property in Ranieri’s hands. Thus, Ranieri is not eligible for the Chunkapura protection from a deficiency judgment. We hold that the District Court did not err in concluding that Midfirst was entitled to a deficiency judgment after judicial foreclosure of Ranieri’s trust indenture.

Did the District Court err in determining that Midfirst Bank could cancel nonjudicial foreclosure proceedings prior to the trustee’s sale and elect to foreclose judicially?

The District Court concluded that no provision in the Small Tract Financing Act prohibited Midfirst from canceling nonjudicial foreclosure and initiating judicial foreclosure proceedings against Ranieri. Ranieri contends that because Midfirst initiated nonjudicial foreclosure proceedings under the Small Tract Financing Act, it elected its remedy and could not thereafter cancel those proceedings and begin judicial foreclosure proceedings.

Ranieri bases his argument primarily on § 71-3-315, MCA, which reads in pertinent part:

Notice - sale - payment. A trust deed may be foreclosed by advertisement and sale in the manner hereinafter provided:
(3) On the date and at the time and place designated in the notice of sale, the trustee or his attorney shall sell the property at public auction to the highest bidder.... [Emphasis added.]

He concedes that the permissive “may” in the introductory language gives the trustee the option of foreclosing by advertisement and sale; he contends, however, that once that option is chosen, the word “shall” in subsection (3) requires that the trustee complete the trustee’s sale and all other procedures of nonjudicial foreclosure.

A straightforward reading of the statute mandates our conclusion that the term “shall” in subsection (3), and throughout the remainder of § 71-1-315, MCA, merely describes the requisite procedures a trustee must follow if a sale is held. Here, the trustee’s sale was not held; thus, those requirements are not applicable. The Small Tract Financing Act does not contain any provision prohibiting a trustee from canceling a noticed sale.

Ranieri bases his next argument on § 71-1-312, MCA, which allows the trustee to cancel nonjudicial foreclosure proceedings when the debtor pays the entire amount in arrears. He argues that because this statute describes a situation in which a trustee’s sale may be canceled, a trustee cannot cancel a sale for any other reason. Ranieri claims that because he did not pay the arrearage, Midfirst cannot cancel the sale. Again, Ranieri misinterprets the statute and the purposes behind it.

Section 71-1-312, MCA, represents one of the distinguishing factors of nonjudicial foreclosure. Under traditional mortgage law, payment of the entire balance of the loan is required to halt foreclosure proceedings once instituted. With nonjudicial foreclosure, payment of only the amount in arrears reinstates the trust indenture. See Dietrich, David S., The Montana Judicial and Non-Judicial Foreclosure Sale: Analysis and Suggestions for Reform, 49 Mont.L.Rev. 285, 294-297. Section 71-1-312, MCA, merely codifies this unique aspect of trust indentures.

Ranieri’s interpretation of the Act would preclude a trustee from canceling a sale if the debtor paid off the entire obligation or if the lender chose for whatever reason to release the debtor from the obligation. The “quid pro quo” which supported the enactment of the Small Tract Financing Act did not include this concession by borrowers; Ranieri’s interpretation would restrict trustees and burden borrowers to an extent not contemplated by the legislature. See Chunkapura, 734 P.2d at 1210; Dietrich, p. 295.

Finally, Ranieri contends that the legal doctrine of “election of remedies” bars Midfirst’s subsequent judicial foreclosure. Ranieri argues that by sending out the notice for the trustee’s sale, Midfirst waived its remedy of judicial foreclosure.

As a legal doctrine, election of remedies is the exercise of a choice of an alternative and inconsistent right or course of action. Massett v. Anaconda Copper Co. (1981), 193 Mont. 131, 136, 630 P.2d 736, 739. It is well settled in Montana that an election exists only when a remedy is pursued to a final conclusion. State ex. rel Crowley v. District Court (1939), 108 Mont. 89, 96, 88 P.2d 23, 26; Glacier Campground v. Wild Rivers, Inc. (1978), 182 Mont. 389, 401, 597 P.2d 689, 695.

Here, although Midfirst sent notice of the trustee’s sale, it did not pursue this remedy to its final conclusion. As such, Midfirst’s initiation of nonjudicial foreclosure proceedings, later abandoned, did not constitute an election of remedies that precluded judicial foreclosure proceedings.

We conclude that the District Court did not err in concluding that Midfirst could cancel nonjudicial foreclosure proceedings prior to the trustee’s sale and proceed with judicial foreclosure.

Affirmed.

JUSTICES TRIEWEILER, HUNT, HARRISON, and McDonough concur.


source: Caselaw Access Project

author: JUSTICE GRAY

license: Public Domain

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. KERMIT CALVIN TODD, Defendant and Appellant.
    No. 92-627.
    Submitted on Briefs March 4, 1993.
    Decided March 18, 1993.
    50 St.Rep. 288.
    257 Mont. 321.
    849 P.2d 175.
    For Appellant: Kermit Calvin Todd, Deer Lodge, Pro Se.
    For Plaintiff and Respondent: Joseph P. Mazurek, Attorney General, Michael S. Wellenstein, Assistant Attorney General, Helena.
   JUSTICE GRAY

delivered the Opinion of the Court.

Kermit Calvin Todd appeals from an order of the First Judicial District Court, Lewis and Clark County, denying his Motion for Correction of Sentence. We affirm.

Todd pleaded guilty of the offense of issuing bad checks (common scheme), a felony, as defined in § 45-6-316, MCA. Following entry of the plea, Todd was sentenced to a term of ten years in the Montana State Prison, the sentence to run consecutively to a sentence imposed in the Fourth Judicial District Court and concurrently with a sentence imposed by the Eleventh Judicial District Court. Payment of restitution was imposed as a condition of Todd’s parole.

Todd filed a Motion for Correction of Sentence, challenging the restitution provision contained in his sentence; he alleged that the District Court did not have jurisdiction to impose restitution other than as a condition of a deferred or suspended sentence. The court denied his motion.

The issue before us is whether the District Court erred in ordering restitution as a condition of parole.

Subsections (a) through (g) of § 46-18-201(1), MCA, set forth the sentencing options available to a district court when a person has been found guilty of an offense upon a verdict or plea. The options range from deferred imposition of sentence, with or without restrictions or conditions such as restitution, through commitment to a correctional institution as provided by law, to a combination of the authorized options. Id.

In addition, § 46-18-202, MCA, authorizes the district court to impose “restrictions or conditions on the sentence provided for in 46-18-201 which it considers necessary to obtain the objectives of rehabilitation and the protection of society.” Subsections (a) through (d) of § 46-18-202(1), MCA, list specifically authorized conditions, while subsection (e) enables a court to impose “any other limitation reasonably related to the objectives of rehabilitation and the protection of society.”

Here, the District Court first sentenced Todd to ten years’ imprisonment in the Montana State Prison, the maximum prison sentence available under § 45-6-316, MCA, pursuant to § 46-18-201(1)(e), MCA. The court then ordered restitution as a condition of Todd’s parole, in the évent he was paroled in advance of serving the entirety of his prison sentence. While the court did not so state, it is clear that the restitution was ordered pursuant to the court’s authority, under § ¡46-18-202(1)(e), MCA, to impose any limitation reasonably related to the objectives of rehabilitation. The restitution was not imposed pursuant to § 46-18-201, MCA.

We previously have upheld a district court’s authority to impose restitution as a condition of parole under § 46-18-202, MCA, on almost identical facts. State v. Klippenstein (1989), 239 Mont. 42, 778 P.2d 892. We were careful to point out in Klippenstein that the condition of restitution would never apply if the defendant served his full term of imprisonment; in other words, the total sentence imposed could never exceed the statutory maximum for the offense. Klippenstein, 239 Mont. 42, 778 P.2d at 894. Klippenstein is directly on point and mandates the same result in the case presently before us.

Todd argues that our decision in State v. Mazurkiewicz (1990), 245 Mont. 172, 799 P.2d 1066, controls. He asserts that, pursuant to Mazurkiewicz, restitution can be ordered only as part of a deferred or suspended sentence under § 46-18-201(1)(a) or (b), MCA. He over-reads our decision.

In Mazurkiewicz, the district court sentenced the defendant to the Montana State Prison for the maximum statutory term and ordered the payment of restitution upon his release. 799 P.2d at 1068-70. The ordered restitution was part of the defendant’s actual sentence, not a condition of parole. We concluded on those facts that while Montana law permits restitution as a condition of a deferred, suspended or partially suspended sentence, nothing in the statutes allows restitution requirements to be imposed in the absence of those sentences. Mazurkiewicz, 799 P.2d at 1070. Our concern in Mazurkiewicz was that the totality of the defendant’s sentence exceeded that authorized by law. No statute authorized the “stacking” of restitution onto the maximum statutory term of imprisonment. In other words, restitution was not statutorily available as an independent and cumulative sentencing option.

Here, as in Klippenstein, the ordered restitution is conditional; it becomes operative only in the event the defendant secures early release from prison via parole. Thus, it cannot result in a sentence exceeding the statutory maximum. In the event of parole, similar to a deferred or suspended sentence situation, the State maintains considerable authority over the offender for general rehabilitative and protective purposes, and the restrictions or conditions authorized by § 46-18-202, MCA, lawfully can be imposed.

We hold that the District Court did not err in imposing restitution as a condition of Todd’s parole.

AFFIRMED.

JUSTICES TRIEWEILER, HUNT, HARRISON and WEBER concur.


text:
    STATE OF MONTANA, Plaintiff and Respondent, v. WILLIAM B. RIES, Defendant and Appellant.
    No. 92-186.
    Submitted on Briefs March 11, 1993.
    Decided March 19, 1993.
    50 St.Rep. 290.
    257 Mont. 324.
    849 P.2d 184.

      For Defendant and Appellant: Brett C. Asselstine, Great Falls.
    For Plaintiff and Respondent: Joseph P. Mazurek, Attorney General, Patricia J. Jordan, Assistant Attorney General, Helena; Patrick L. Paul, Cascade County Attorney, Great Falls.
   JUSTICE GRAY

delivered the Opinion of the Court.

William B. Ries appeals from the denial of his motion to withdraw guilty pleas by the Eighth Judicial District Court, Cascade County. We affirm.

Appellant Ries was charged by information with felony counts of sexual intercourse without consent and kidnapping. He entered pleas of not guilty and counsel was appointed to represent him. Following a change of counsel, Ries entered into a written acknowledgement of waiver of rights by plea of guilty and a plea agreement. The court accepted and entered his guilty pleas after a change of plea hearing.

Subsequent to entry of the guilty pleas, but prior to sentencing, Ries retained counsel and filed a motion to withdraw his guilty pleas. The District Court heard testimony on the motion and denied it. Ries was sentenced to a total of fifty years’ imprisonment, with ten years suspended, and designated a dangerous offender. He appeals from the order of the court denying his motion.

The sole issue before us is whether the District Court abused its discretion in denying the motion to withdraw guilty pleas.

Montana law permits the withdrawal of a guilty plea on a showing of good cause; the language of the statute is permissive and, absent an abuse of discretion, we will not overturn the district court. Section 46-16-105(2), MCA; State v. Miller (1991), 248 Mont. 194, 196-197, 810 P.2d 308, 309.

Three factors are to be considered in determining whether good cause exists to permit a criminal defendant to withdraw a guilty plea: (1) the adequacy of the court’s interrogation as to the defendant’s understanding of the plea at the time it was entered; (2) the promptness of the motion to withdraw the plea; and (3) whether the plea was the result of a plea bargain in which another charge was dismissed. Miller, 810 P.2d at 309. Here, neither the second nor the third factors are in dispute: the motion to withdraw was made promptly, and the plea was in exchange for the prosecution’s agreement not to charge Ries with two similar offenses involving children; a sentencing recommendation was also part of the plea bargain.

While conceding that the District Court adequately advised him of his rights at the time of his entry of the guilty pleas, Ries contends that he did not make informed guilty pleas. The transcript reflects otherwise. The District Court engaged in a lengthy interrogation of Ries at the hearing regarding his change of plea. That extensive interrogation included Ries’ understanding of the charges and the plea agreement, his admission of the facts on which the charges were based, the voluntariness of the guilty pleas, the maximum sentence which could be imposed, the waiver of his constitutional rights to confront and cross-examine, and other matters.

As grounds for the motion to withdraw his guilty pleas at the District Court, repeated here on appeal, Ries argues first that he was under the influence of prescription pain medication or in severe pain at the time of the change of plea, resulting in his inability to understand the consequences of his actions at that time. He contends that sufficient question was raised at the change of plea hearing as to his medication and state of mind at the time he entered the pleas to allow him to withdraw the pleas.

At the hearing on Ries’motion, the District Court heard testimony on Ries’ behalf from Ries himself, a psychologist whose testimony did not relate to the motion, and a detention officer from the county jail whose testimony related to the timing of Ries’ doses of Darvocet, a pain medication. The prosecution presented testimony from Ries’ counsel at the time of the plea agreement and change of plea, a supervisor at the county jail who had reviewed Ries’ medication records, and a pharmacist who testified that mental confusion is not a common side effect of taking Darvocet. On the basis of the testimony, the District Court denied Ries’ motion.

We have reviewed the transcripts from both the change of plea hearing and the hearing on the motion to withdraw pleas and we conclude that Ries entered the guilty pleas knowingly and voluntarily, with understanding of the consequences of his actions. The record of the change of plea hearing, summarized above, also contains the following exchange between the court and Ries with specific regard to his medication and mental state at that time:

THE COURT: Are you presently under any medication, taking any
kind of medication?
THE DEFENDANT: Not at this moment, Your Honor.
THE COURT: Is your mind clear?
THE DEFENDANT: Yes, sir.
THE COURT: You understand what you’re doing?
THE DEFENDANT: Yes, I do.
THE COURT: And you still want to go forward with this plea agreement in spite of all the information you’ve been given here this morning?
THE DEFENDANT: Yes, I do. I’m looking forward to the help.

It is clear that the court’s overall interrogation of Ries as to his understanding to the pleas and their consequences was adequate; indeed, Ries’ medication and mental state relating to any medication were specifically inquired into at the time the District Court accepted his guilty pleas. Thus, the first Miller factor is met here.

Furthermore, the transcript of the hearing on Ries’ motion reveals not only that the medication at issue does not cause mental confusion, but also that Ries was not on, or under the influence of, the medication he had taken the day before the hearing at the time of the hearing. While Ries attempted to change the basis for his motion after this testimony was given, asserting that he was in too much pain to understand the consequences of entering guilty pleas, it is clear that the court did not find him credible. We conclude that the District Court did not abuse its discretion in refusing to allow Ries to withdraw his guilty pleas on the basis that his medication or pain made him unable to understand the consequences of his actions at the time he entered those pleas.

Ries also argues that the District Court abused its discretion in denying his motion to withdraw pleas on the basis that prosecutorial misconduct resulted in involuntary guilty pleas. It is true that a valid guilty plea must represent “a voluntary and intelligent choice among the alternative courses of action open to the defendant as affirmatively disclosed by the record.” State v. Lance (1982), 201 Mont. 30, 34-35, 651 P.2d 1003, 1005.

Again, as summarized above, the transcript of the change of plea hearing established such a voluntary choice. In addition, Ries responded negatively to the court’s inquiry whether anyone forced him to enter into the plea agreement.

Ries now asserts, however, and testified during the hearing on his motion, that during a conversation between himself and the prosecutor at the jail, the prosecutor screamed at him and threatened him with up to 400 years’ imprisonment, the bringing of the additional charges, and maximum sentences on those charges, if Ries refused to accept the plea arrangement and change his pleas to guilty. He testified that because of the prosecutor’s hostility, he was overwhelmed and felt compelled to sign the agreement to avoid the dire consequences with which he was being threatened.

Nothing of record from the change of plea hearing supports these assertions. In addition, Ries’ defense counsel at the time of the plea agreement and change of pleas testified at the hearing on the motion to withdraw the guilty pleas. That counsel testified that he was present at the jail meeting between Ries and the prosecutor and, in fact, that he had invited the prosecutor to the jail for the conversation. Counsel testified specifically that the prosecutor followed standard procedures in explaining the proposed plea agreement, used a normal tone of voice and was not hostile to Ries. Nothing on this record mandates a conclusion that Ries’ guilty pleas were involuntary and, therefore, invalid. We conclude that the District Court did not abuse its discretion in refusing to allow Ries to withdraw his guilty pleas on grounds of prosecutorial misconduct.

AFFIRMED.

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


author: JUSTICE McDONOUGH

text:
    KARL RAPPOLD and JOHN RAPPOLD, Plaintiffs and Appellants, v. ROBERT E. DUROCHER, Defendant and Respondent.
    No. 92-233.
    Submitted on Briefs November 12, 1992.
    Decided March 23, 1993.
    50 St.Rep. 293.
    257 Mont. 329.
    849 P.2d 1017.

      For Plaintiff and Appellant: John P. Poston, Gregory W. Duncan, Harrison, Loendorf & Poston, Helena.
    For Defendant and Respondent: Walter S. Murfitt, Michael S. Becker, Luxan & Murfitt, Helena; Robert L. Woodahl, Choteau.
   JUSTICE McDONOUGH

delivered the Opinion of the Court.

This is an appeal from the Ninth Judicial District, County of Teton, from a judgment for the Respondent (Durocher) as a result of a bench trial. We affirm.

The essential issue on appeal is whether all elements necessary to establish a prescriptive easement across Appellants’ (Rappolds) property were proved.

This action concerns Durocher’s right to access his property through Rappolds’ property. Previously, Durocher’s property was acquired by one, R.N. Lear, in 1940 and 1941, from the original homesteaders. The east half of the property was patented in 1923. The west half of the property was patented in 1935. The property was accessed from the Swift Dam road, traveling across tracts owned by Art Lindseth, Fay Lear, and John Rappold. R.N. Lear never lived on the property.

In 1965, Mahlon (Jack) Lear and Deloris Lear acquired the property from R.N. Lear and used the property primarily for livestock grazing. Jack Lear also crossed the property of Art Lindseth, Fay Lear (Jack Lear’s brother) and John Rappold.

In 1969, Jack and Deloris Lear obtained an affidavit from their neighbors relative to borrowing money from the Federal Land Bank, which was recorded in 1978. The affidavit was signed by John Rappold (appellants’ father), A. D. Lindseth and Fay Lear and read in pertinent part:

FAY F. LEAR, A. D. LINDSETH and JOHN RAPPOLD, being first duly sworn, upon their oaths depose and say that they own real estate in the vicinity of land owned by MAHLON JOHN LEAR, said land being located in Sections 3,4,5 and 9 of Township 27 North, Range 9 West, Teton County, Montana.
That affiants have personal knowledge of the fact that the said MAHLON JOHN LEAR and his predecessors in title and business visitors and guests of same have regularly, openly, and continuously used a trail from the Swift Dam road to gain access to this land, and that said access road has been used without objection, contest or obstruction by anyone for a period of over fifteen years from this date; that the said access road runs southeasterly through Sections 24, 25, 26, 34 and 35 of Township 28 North, Range 9 West in Pondera County, and through Section 3, Township 27 North, Range 9 West in Teton County, entering land owned by MAHLON JOHN LEAR on the east side of the NW1/2SW1/2 of Section 3, Township 27 North, Range 9 West....

In 1979, Jack and Deloris Lear sold the property to Glen and Lola Thoreson, who used the same access trail that R.N. Lear and Jack Lear had used to reach the property. The Thoresons grazed cattle on the land until 1982, when they leased the land to Jerry Lear, Fay Lear’s son, to graze Jerrys livestock. The property was leased by Jerry until April of 1988, when the Thoresons sold the property to Durocher.

The Rappolds’ father and grandfather bought the property crossed by the contested trail in two purchases. First, John and Karl (appellants’ father and grandfather) purchased the Lenor place in 1938. They subsequently purchased the “Gordon place” in 1949. The Rappolds acquired their property through various deeds in 1980 from their father, John Rappold.

The Rappolds filed this action on November 28,1988 to quiet title to the traversed land against any interest of Durocher. Additional facts will be provided as necessary in the body of the opinion.

“Our standard of review of a district court’s findings of fact is clear.” Rule 52(a), M.R.Civ.P., provides in pertinent part:

Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses....

Keebler v. Harding (1991), 247 Mont. 518, 522, 807 P.2d 1354,1357. In interpreting this rule, we have adopted the following three-part test:

First, the Court will review the record to see if the findings are supported by substantial evidence. Second, if the findings are supported by substantial evidence we will determine if the trial court has misapprehended the effect of evidence. Third, if substantial evidence exists and the effect of the evidence has not been misapprehended the Court may still find that “[A] finding is ‘clearly erroneous’ when, although there is evidence to support it, a review of the record leaves the court with the definite and firm conviction .that a mistake has been committed.”

Interstate Production Credit v. DeSaye (1991), 250 Mont. 320, 323, 820 P.2d 1285, 1287. (Citations omitted.)

To establish an easement by prescription, the party claiming an easement “must show open, notorious, exclusive, adverse, continuous and uninterrupted use of the easement claimed for the full statutory period. The statutory period is five years .’’Keebler, 807 P.2d at 1356. (Citation omitted.) See also; Downing v. Grover (1989), 237 Mont. 172, 175, 772 P.2d 850, 852.

“Open and notorious” is defined as “a distinct and positive assertion of a right hostile to the rights of the owner and must be brought to the attention of the owner.” “Continuous” means “it is necessary to have use made often enough to constitute notice of the claim to the potential servient owner.” “Uninterrupted” means “use not interrupted by the act of the owner of the land or by voluntary abandonment by the party claiming the right.”

Downing, 772 P.2d at 852 (citations omitted). “An Exclusive use means that the claimants’ right to use the right of way is independent of a like right of way in another.” Cope v. Cope (1971), 158 Mont. 388, 392, 493 P.2d 336, 339. Finally, “[t]o be adverse, the use of the alleged easement must be exercised under a claim of right and not as a mere privilege or license revocable at the pleasure of the owner of the land; such claim must be known to, and acquiesced in by, the owner of the land.” Keebler, 807 P.2d at 1356-1357. (Citation omitted.)

Given the elements of an easement by prescription and the definition of such elements, the trial court concluded that Durocher had established an easement to his property through the Rappolds’ property. We agree.

The Thoresons owned Durocher’s property for approximately ten years, from 1979 to 1988, when they sold the property to Durocher. The Thoresons used their property in various ways during different seasons. They grazed livestock on it, they would go to the property to repair fences and they moved a trailer to the property for overnight stays. They consistently used the trail through Rappolds’ to get to their property. They used the disputed trail to access their property for snowmobiling, hunting, Christmas tree gathering, picnics and general enj oyment of the property. They continued to use the property after they leased it to Jerry Lear to graze his cattle.

Mr. Thoreson testified that the Rappolds knew they travelled the disputed trail because he had met both Karl and John at different times on the trail. The Rappolds never prevented him from using the trail. Thoreson claimed he had a right to access his property.

The 1969 affidavit signed by Fay Lear, Art Lindseth and John Rappold provides evidence that Jack Lear’s use of the trail was also open, notorious, continuous, uninterrupted and exclusive. The affidavit states that “MAHLON JOHN LEAR and his predecessors in title and business visitors and guests of same have regularly, openly, and continuously used a trail from the Swift Dam road to gain access to this land, and that said access road has been used without objection, contest or obstruction by anyone for a period of over fifteen years from this date ....” (Emphasis added.) The affidavit is dated October 18,1969. The affidavit reflects this use occurred over at least a fifteen year period prior to that date.

The trial court concluded that the language of the affidavit was not consistent with permissive use and that the “affidavit... appears to confirm the existence of a prescriptive easement.” All elements of prescription have been shown through the testimony of the Thoresons and the 1969 affidavit. The element of adversity is the element of contention here. However,"... adverse use is established by presumption if all other elements of the claim are demonstrated.” Parker v. Elder (1988), 233 Mont. 75, 78, 758 P.2d 292, 294 (citation omitted). When the other elements have been established, the burden falls upon the other party to show that the use was permissive. Garrett v. Jackson (1979), 183 Mont. 505, 508, 600 P.2d 1177, 1179.

In our present case, the use has been shown to be open, notorious, exclusive, continuous and uninterrupted at least through the ownership of Jack Lear and Glen Thoreson, Durocher’s predecessors in interest. This establishes the presumption of adversity that the Rappolds must overcome.

We conclude that the Rappolds have not met their burden of demonstrating that Durocher and his predecessors’ use was permissive. Although Karl Rappold testified that he had given Glen Thoreson and his son, Gary permission to cross his property, Glen and Gary Thoreson testified that they never sought permission, nor were they given permission, to use the trail. The trial court concluded that he found “the testimony of Glen Thoreson, a disinterested third party, more credible than that of plaintiffs and members of their family. Glen Thoreson never asked for or received permission from plaintiffs to use the road.”

The Rappolds provided nothing more than their own statements to show that the use of the road was permissive. We observe that “[d]ue regard is given the opportunity of the district court to judge the credibility of witnesses ... and resolve conflicts or inconsistencies in testimony.” Thomas v. Barnum (1984), 211 Mont. 137, 143-144, 684 P.2d 1106, 1110. (Citations omitted.)

The element of adversity also is present in Glen Thoreson’s testimony that he did not understand that there were any limitations on using the road at any time during the year nor any limitations for any use he wanted to make of the road. Also, he testified that when he sold the property to Durocher he told Durocher that he had a right to use the trail based upon the “written easement” (1969 affidavit). Thoreson believed he had a legal right to go to his property based on the affidavit and the word of the real estate man who worked with Jack Lear when Jack sold the property to Glen Thoreson. Finally, Glen Thoreson testified that he did not feel that he had to ask for permission to access his property. The trial court concluded that “Glen Thoreson was told when he purchased the property from Lear that there was an easement that went with it. The 1969 affidavit was the basis for this representation. This information was passed along to Defendant Durocher.” Thoreson exercised his use of the trail as an adverse claim of right, not as a license revocable at the Rappolds’ pleasure.

We conclude that the trial court’s judgment that Durocher has a prescriptive easement through Rappolds’ property is supported by substantial credible evidence, that the trial court did not misapprehend the effect of the evidence, and that the court was not clearly erroneous. AFFIRMED.

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


author: JUSTICE TRIEWEILER JUSTICE WEBER

text:
    HARRY A. NESS, Petitioner and Appellant, v. ANACONDA MINERALS COMPANY, a division of ATLANTIC RICHFIELD COMPANY, INC., Employer/Defendant and Respondent.
    No. 91-008.
    Submitted on Briefs September 24, 1991.
    Rehearing Denied April 26, 1993.
    Decided March 24, 1993.
    50 St.Rep. 296.
    257 Mont. 335.
    849 P.2d 1021.

      For Petitioner and Appellant: R. Lewis Brown, Jr., Butte Legal Center, Butte.
    For Defendant and Respondent: Andrew J. Utick, Utick & Grosfield, Helena.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

Claimant Harry A. Ness filed a petition in the Workers’ Compensation Court claiming a right to total permanent disability benefits from the date of his injury on October 14, 1981. Those benefits had been terminated and partial disability benefits commenced on December 8, 1982. Claimant’s case went to trial before a hearing examiner of the Workers’ Compensation Court on September 5, 1989, and the court’s findings of fact, conclusions of law, and judgment were entered on August 25,1990. The trial court concluded that claimant was not totally disabled and the extent of his partial disability was not an issue in that proceeding. From that judgment, and the trial court’s order denying claimant’s petition for a new trial, the claimant appeals. We reverse the judgment of the Workers’ Compensation Court.

The issues are:

1. Was there substantial, credible evidence to support the decision of the Workers’ Compensation Court?

2. Did the Workers’ Compensation Court err when it denied claimant’s request for attorney fees and costs?

Claimant was born on February 21, 1929, and was 60 years old at the time of his trial in the Workers’ Compensation Court. He had 12 years of formal education. His only specialized training related to the job of welding.

Claimant testified that all of his work experience had involved heavy labor. Other evidence indicated that past jobs included stocking shelves, janitorial work, fire fighting, trail work, and hod carrying. From 1965 until the date of his injury on October 14, 1981, he worked as a boiler maker for the defendant.

On the date of the accident which gave rise to his claim for disability benefits, claimant was working for his employer welding and repairing heavy-duty equipment. At the time of his accident, he was burning a center bolt off of a belly pan which was attached to the frame of a D-8 Caterpillar. When he completed the cut, the belly pan, which weighed from 1000 to 1200 pounds, fell on top of the claimant. As a result of that incident, he sustained various injuries, including severe compression fractures of his twelfth thoracic vertebra and his first lumbar vertebra. At the time of his accident, claimant was 52 years old.

Following his accident, claimant was taken to the Veterans Administration Hospital at Fort Harrison where he was examined and treated by James P. Murphy, an orthopedic surgeon. Dr. Murphy diagnosed the fractures in claimant’s back and treated him with a back brace, rest, physical therapy, and anti-inflammatory medication. He concluded that claimant’s healing period ended on October 19, 1982, and rated the extent of his physical impairment as 25 percent of the whole man.

Based on Dr. Murphy’s conclusion that claimant had reached the end of his healing period, but without any release from Dr. Murphy for claimant to return to employment, claimant’s total disability benefits were terminated on December 8, 1982. Defendant then commenced paying partial disability benefits which were continued until November 18, 1987.

On August 2, 1989, after claimant’s petition to reinstate total disability benefits had been filed, the defendant retained Michael Anderson, a vocational rehabilitation consultant, to evaluate the claimant’s employability. He first met with Dr. Murphy on August 30, 1989. During that meeting, Dr. Murphy advised Anderson that claimant could return to light-duty work on a part-time basis, and specifically approved the job descriptions for a sewing machine operator and a parking lot attendant. Although Anderson apparently prepared a report as a result of this interview with Dr. Murphy, the record does not disclose when or if that report was ever provided to the claimant or his attorney.

Dr. Murphy is the only physician who was consulted by the defendant regarding the claimant’s employability, and the only physician who expressed an opinion on that subject in testimony before the Workers’ Compensation Court.

Dr. Murphy’s only opinion regarding claimant’s capacity for employment prior to his meeting with Anderson was a July 17,1989, letter that he wrote to Dr. William Hoopes at the Disability Determination Burean in which he advised that claimant might be able to return to some type of work, but that it would certainly have to be limited to light duty.

Dr. Murphy has never released claimant to return to any of his former occupations. It was his opinion that claimant could do no heavy lifting, no bending, no stooping, and no crawling; and his prognosis for claimant’s ability to return to any type of employment on a five-day-a-week, eight-hour-a-day basis, was guarded.

Claimant has not worked since the date of his accident in 1981, and at the time of trial had qualified for social security disability benefits.

At trial, claimant offered testimony from Ian Steel, a vocational consultant, who evaluated claimant at the request of his attorney. It was his opinion that for all practical purposes, because of his age, lack of training, and physical impairment, claimant was not employable.

Defendant offered testimony from Michael Anderson, who expressed the opinion that claimant had the ability to work as a sewing machine operator, a parking lot attendant, a dispatcher, or several other light-duty jobs.

After listening to the evidence, the hearing examiner of the Workers’ Compensation Court concluded that regardless of the availability of the jobs described by Mr. Anderson, claimant had the capacity to perform them, and therefore, has not been totally disabled since October 19,1982.

On appeal, claimant contends that there was insufficient evidence to support the trial court’s decision. Specifically, claimant cites Dr. Murphy’s testimony that his return to the work place would initially have to be limited to part-time work, or be preceded by a work-hardening program, and that therefore, Dr. Murphy’s release was conditional.

Defendant responds that claimant failed to prove which jobs constitute his normal labor market, and failed to demonstrate a complete inability to perform those jobs. Therefore, according to the defendant, claimant failed to carry his burden of proving total disability.

In Rath v. St Labre Indian School (1991), 249 Mont. 433, 439, 816 P.2d 1061, 1064, we established the following standard for reviewing findings of fact and conclusions of law of the Workers’ Compensation Court:

This Court will not overturn findings of fact of the Workers’ Compensation Court if there is substantial evidence in the record to support them. Kraft v. Flathead Valley Labor & Contractors (1990), 243 Mont. 363, 365, 792 P.2d 1094, 1095. Conclusions of law, “whether the conclusions are made by an agency, Workers’ Compensation Court, or trial court,” will be upheld if the tribunal’s interpretation of the law is correct. Steer v. DOR (1990), 245 Mont. 470, 803 P.2d 601, 603.

In Wood v. Consolidated Freightways, Inc. (1991), 248 Mont. 26, 808 P.2d 502, we held that maximum healing does trigger a re-evaluation of the claimant’s disability status, but that disability has non-medical, as well as medical components. In other words, Dr. Murphy’s conclusion that claimant had reached maximum healing by October 19, 1982, and that he had sustained a 25 percent physical impairment, was not a sufficient basis for terminating claimant’s total disability benefits.

We further held in Wood that:

Once a claimant presents evidence demonstrating that there is no reasonable prospect of employment in his normal labor market, the burden of proof then shifts to the employer to show that suitable work is available.

Wood, 808 P.2d at 504.

In this case, whether you accept the testimony of claimant that all of his prior work experience involved heavy labor, or the testimony of Anderson which sets forth the specific jobs claimant had previously performed, claimant demonstrated an inability to return to his prior occupations based on the testimony of Dr. Murphy which limited him to light-duty work and precluded activities such as heavy lifting, bending, stooping, or crawling. Since Dr. Murphy testified that claimant’s condition had not changed since 1982, presumably that would have also been his opinion, if asked, at that time.

Therefore, it was necessary for the defendant to comply with the four-part test previously established by the Workers’ Compensation Court prior to terminating claimant’s disability benefits. That test was established in Coles v. Seven Eleven Stores, WCC No. 2000, decided November 20, 1984, aff’d 217 Mont. 343, 704 P.2d 1048 (1985), and was approved by this Court in Wood as a proper basis for determining whether the employer had provided the minimum information necessary to discharge its duty to investigate the extent of claimant’s disability. The test requires:

(1) a physician’s determination that the claimant is as far restored as the permanent character of his injuries will permit;
(2) a physician’s determination of the claimant’s physical restrictions resulting from an industrial accident;
(3) a physician’s determination,based on his knowledge of the claimant’s former employment duties, that he can return to work, with or without restrictions, on the job on which he was injured or another job for which he is fitted by age, education, work experience, and physical condition;
(4) notice to the claimant of receipt of the report attached to a copy of the report.

Wood, 808 P.2d at 505.

In this case, the only element of the test satisfied by December 8, 1982, was the first element.

There was no record of Dr. Murphy’s determination of claimant’s physical restrictions until his July 17, 1989, letter to the Disability Determination Bureau.

Dr. Murphy has never released claimant to return to his former occupations, and did not indicate that he could return to any other specific job for which he was fitted by age, education, and work experience until his meeting with Anderson on August 30,1989.

Finally, there is no record of the date on which the defendant provided claimant with any notice that it had received a report from Dr. Murphy releasing claimant to the two jobs which he had approved, or whether in fact, that report was ever provided to the claimant or his attorney.

We conclude, however, that there was substantial evidence that as of August 30, 1989, the first three elements of the Coles test had been satisfied. When there is proof of the date on which the fourth element of the Coles test has been satisfied, there will be substantial evidence for the termination of claimant’s total disability benefits, and the commencement of partial disability benefits.

The judgment of the Workers’ Compensation Court is, therefore, reversed, and this case is remanded to that court with instructions to reinstate claimant’s total disability benefits retroactive to December 8, 1982, and continuing until the date on which claimant or his attorney were provided with notice of the report completed by Dr. James P. Murphy on August 30, 1989. At that point, claimant’s disability status may be changed from total disability to partial disability. The partial disability benefits paid during that time shall be credited against the amount due. The rate for partial disability benefits was stipulated by the parties to be $120.50 per week, and shall continue throughout the duration of his partial disability, not to exceed 500 weeks.

Attorney fees in workers’ compensation cases are recoverable under § 39-71-611, MCA (1981), when an insurer denies liability for a claim for compensation or terminates compensation benefits and the claim is later adjudged compensable by the Workers’ Compensation Judge, or on appeal. Hartman v. Staley Continental (1989), 236 Mont. 141, 768 P.2d 1380. In addition to the benefits set forth above, claimant is entitled to an award of attorney fees and costs, to be determined by the Workers’ Compensation Court.

Reversed and remanded.

JUSTICES HUNT, HARRISON and McDONOUGH concur.

JUSTICE WEBER

dissents as follows:

I dissent from the conclusion of the majority opinion that the claimant proved by a preponderance of credible evidence that he had no reasonable prospect of employment in his normal labor market. As a result I also dissent from the judgment of the majority that claimant is entitled to a “reinstatement” of total disability benefits retroactive to December 8,1982.

The majority has confused the issues by holding that claimant is entitled to a reinstatement of his total disability benefits retroactive to 1982. The only total disability benefits which claimant has received are temporary total disability benefits which the majority agrees were properly terminated on December 8, 1982. Claimant also received permanent partial disability benefits from December 8,1982 to November 18, 1987. As a result, there are no total disability benefits to be “reinstated.”

The contradictions I find are best illustrated by comparing this case to Wood v. Consol. Freightways, Inc. (1991), 248 Mont. 26, 808 P.2d 502, which is the key case used by the majority to reach its conclusions. The analysis of the majority using Wood as its foundation was neither presented nor argued by the parties. In Wood the appeal involved the termination of the worker’s temporary total disability benefits and the award of permanent partial disability benefits. The appeal was taken from that determination. This Court reversed the lower court. Contrast this to the present case where the temporary total disability benefits were terminated on December 8, 1982 and partial disability benefits commenced on the same date. No appeal was taken from the termination of temporary total benefits or the granting of permanent partial benefits. Here, the claimant waited more than six and one-half years before raising any issue. The issue was raised by a petition claiming a right to permanent total disability benefits which was filed after the partial disability benefits had expired. I emphasize this because of the essential unfairness of the presentation of an issue grounded on facts, including medical facts which took place almost seven years prior to the filing of the petition. The contrast between this case and Wood is that all parties in Wood had a reasonable opportunity to present their questions of both fact and law upon an appeal from the 1982 determination. Here, that was not done, and the absence of that procedure has been disregarded by the majority.

The next contrast between this case and Wood is that the majority in Wood pointed out there was substantial credible evidence to support a finding that Wood was unable to return to his normal labor market, emphasizing that three out of four physicians concluded that Wood could no longer perform the heavy physical labor employment he had performed. Thus, claimant had met his burden of demonstrating “no reasonable prospect of employment” in his labor market. In contrast, as will be subsequently emphasized in our review of the facts, in this case the substantial evidence is to the contrary, with very limited evidence submitted on the part of the claimant — and most important, with a failure on the part of the claimant here to meet the evidentiary standard which was to be applied in his case.

In reaching his conclusion that claimant was not entitled to permanent total disability benefits, the Hearing Examiner made extensive findings and conclusions. Of significance are the following findings with regard to the date of injury and dates of claim.

5. Defendant accepted liability for claimant’s injury and paid temporary total disability benefits from October 15,1981 through December 8, 1982. At that time such benefits were converted to permanent partial disability benefits. (Uncontested fact No. 4) Claimant took no action regarding such conversion for approximately six and one-half years, until he filed the petition herein on June 28, 1989.
6. Claimant’s permanent partial disability benefits were terminated on November 18,1987. (Id) Claimant did not question the termination of such benefits for approximately one and one-half years, until the filing of this petition. (Emphasis added.)

The Hearing Examiner concluded there was no dispute between the parties that the claimant’s entitlement to temporary total disability benefits ended when maximum healing was reached on October 19, 1982. Nonetheless the majority remands to the lower court with instructions to “reinstate claimant’s total disability benefits retroactive to December 8, 1982.” This is a contradiction in terms. The only total disability benefits which could have been “reinstated” are the temporary total benefits.

The Hearing Examiner set forth the following standard of proof which was to be applied in this case:

The claimant must prove, by a preponderance of the credible evidence, that he has no reasonable prospect of employment in his normal labor market....
To establish the existence of no reasonable prospect of employment in the normal labor market, a claimant must introduce substantial credible evidence of (1) what jobs constitute his normal labor market, and (2) a complete inability to perform the employment and duties associated with those jobs because of his work related injury...

In holding that claimant demonstrated an inability to return to his prior occupations, and therefore met the initial test of Wood, the maj ority did not analyze the findings and conclusions of the examiner and the court. The examiner made extensive findings of fact which included the following:

3. Claimants prior work histoiy consists of work as a deliveiy person, store clerk, forest service employee, hod carrier, structural iron worker, wireman, welder, maintenance engineer and boilermaker....
Medical Evidence
7. Claimant’s treating physician for his low back condition has been Dr. James P. Murphy....
9. Dr. Murphy regularly treated the claimant as he improved to a point that Dr. Murphy reported that the claimant had reached maximum healing as of October 19,1982 and rated his permanent partial impairment as twenty-five percent of the whole person.
10. Claimant did not return for treatment from Dr. Murphy for five years after the October 19,1982 visit. On September 9,1987, Dr. Murphy examined the claimant and found him to be essentially the same as he was at the October 19,1982 examination....
12. Claimant was last examined by Dr. Murphy for his back condition on July 10, 1989, for purposes of a disability evaluation for Social Security purposes. As a result of this examination, Dr. Murphy wrote to Dr. William Hoopes at the Disability Determination Bureau stating “I think he may be able to return to some type of work, but it would certainly have to be light-duty profile.” In such letter Dr. Murphy also stated: “I do think he should be restricted from any prolonged bending, crawling, stooping or heavy lifting.”
13. On August 30, 1989, Dr. Murphy met with Michael Anderson, a certified rehabilitation counselor. Dr. Murphy filled out a physical capacities form in which he stated that the claimant could return to light-duty work at that time, but starting out part-time. He released the claimant to return to work as a sewing machine operator and a parking lot attendant....
15. There is no medical evidence relating any of the claimant’s other physical difficulties, except for his low back problems, to his industrial injury of October 14,1981.
It is important to note that the July 10, 1989 examination by Dr. Murphy was for Social Security disability evaluation purposes, and not specifically for workers’ compensation purposes. There is no medical evidence relating any of the claimant’s other physical difficulties, except for his low back problems, to his industrial injury of October 14,1981. The findings of the Hearing Examiner included the following:
Vocational Evidence
16. Claimant retained Ian Steel, a vocational rehabilitation consultant, who interviewed the claimant and read the depositions and transcript of this case. He reviewed the medical records and the vocational consultant’s report of Michael Anderson....
17. Mr. Steel concluded that, at this time with the claimant’s physical limitations, it would be difficult to place the claimant in employment which limits him to very light work. At sixty years old, retraining was not feasible and Mr. Steel concluded that the claimant is basically unemployable at this time....
18. On cross-examination, Mr. Steel conceded that claimant could perform the job of a dispatcher assuming that he could find a job opening....
19. Looking back to claimant’s maximum healing date of October 19,1982, Mr. Steel testified as follows:
Q. In other words, if in Mr. Ness’s cases he tried to go back to work back when he reached maximum healing, it would be a lot better situation than it would be attempting something, for example, now.
A. Definitely. (Emphasis added.)
20. Claimant has failed to prove, by a preponderance of the credible evidence, that he has no reasonable prospect of employment in his normal labor market.
21. Claimant is employable and has been employable since the time he was determined to have reached maximum medical improvement on October 19, 1982. Specific positions have been approved by Dr. Murphy, claimant’s treating physician. No other medical evidence was presented by the claimant to dispute his medical opinions.
22. Michael Anderson’s report concludes that the positions appraised by Dr. Murphy and within the capability of the claimant include sewing machine operator, inspector, radial arm or power saw operator, parking lot attendant, picture framer or dispatcher.]

In his conclusions of law, the Hearing Examiner stated as follows:

The claimant’s normal labor market consists of those jobs at which he has already worked and any other jobs for which his prior formal education and vocational experience, when coupled with his age and physical condition, directly qualify him....
Applying the above criteria to claimant’s situation, it is clear that the medical evidence and preponderance of the vocational evidence support the conclusion that the claimant does have employment opportunities as a sewing machine operator / inspector, a radial arm or power saw operator, a parking lot attendant or a receptionist at a car rental agency. Even claimant’s rehabilitation counsellor, Mr. Steel, admitted that the claimant could probably perform the job of dispatcher. His concern about the actual availability of jobs in Butte is not a valid concern. The test is whether a job exists in the market and whether the claimant can perform that job.
Claimant has failed to meet his burden of proving by a preponderance of the credible evidence that he is entitled to permanent total disability benefits retroactive to October 19, 1982.
Claimant’s counsel did not raise the issue as to what, if any, permanent partial disability benefits the claimant may be entitled and this decision does not consider that issue. (Emphasis added.)

It is at this point that I strongly disagree with the majority conclusion. I would hold that the examiner established the proper standard of proof to be applied. I would further hold that there clearly is substantial evidence to support the findings of the examiner and the court. Because of that analysis of the facts, we would not even get to the Wood analysis which was relied upon by the majority, because the precondition to the application of the Wood tests is the proof that the claimant was unable to return to his normal labor market.

The majority states that claimant demonstrated an inability to return to his prior occupations based on the testimony of Dr. Murphy which precluded activities such as heavy lifting, bending, stooping, or crawling. That disregards the conclusion of the examiner that there were a number of jobs which claimant could perform, including a job such as a dispatcher. It is also significant to emphasize that even the claimant’s expert conceded that if claimant had tried to go back to work in 1982 rather than seven years later in 1989, there would have been a much better situation for attempting other types of work. I, therefore, emphasize Findings 20 through 22 where the examiner in substance had concluded that claimant had failed to prove that he had no reasonable prospect of employment in his normal labor market, and that he was employable on October 19, 1982. At that point the Hearing Examiner correctly concluded that claimant had failed to meet his burden of proving by a preponderance of credible evidence that he was entitled to permanent total disability benefits. At that point, the majority takes a unique twist. Instead of discussing at length the evidence showing whether or not claimant had met the tests properly promulgated by the examiner, the majority almost casually concluded that claimant had proved he had no reasonable prospect of employment in his normal labor market and then proceeded to apply the four part test established in Wood. In Wood it was appropriate to suggest that the burden should shift to the insurer and to analyze the evidence submitted by the insurer as being insufficient to meet the burden placed upon the insurer. That was of course not true here where no appeal was taken from the original determination. Now, close to seven years after the determination by the Workers’ Compensation Court, claimant filed his petition and relief is granted to him because the insurer failed to present evidence on a theory not presented at the time of the 1982 hearing, not considered by appeal from that determination in 1982, and adopted by this Court a number of years subsequent to the 1982 determination. I conclude that is essentially unfair to all parties.

I again emphasize that the majority has incorrectly stated that it requires the Workers’ Compensation Court to “reinstate” claimant’s total disability benefits retroactive to December 8, 1982. There are no such benefits to be reinstated.

I would affirm the conclusion of the Workers’ Compensation Court that claimant has failed to meet his burden of proving by a preponderance of credible evidence that he is entitled to permanent total disability benefits retroactive to October 8,1982.

CHIEF JUSTICE TURNAGE and JUSTICE GRAY concur in the foregoing dissent.


author: JUSTICE WEBER JUSTICE HUNT

text:
    STATE COMPENSATION MUTUAL INSURANCE FUND and TOWN HOUSE INNS, Petitioners and Appellants, v. CHRISTINE JAMES, Respondent and Respondent.
    No. 92-372.
    Submitted on Briefs January 14, 1992.
    Decided March 25, 1993.
    50 St.Rep. 302.
    257 Mont. 348.
    849 P.2d 187.

      For Petitioners and Appellants: Elizabeth A. Horsman-Wiitala, State Compensation Mutual Insurance Fund, Helena.
    For Respondent: Frank J. Joseph, Burgess, Joyce & Whelan, Butte.
   JUSTICE WEBER

delivered the Opinion of the Court.

This is an appeal by the State Fund of a Workers’ Compensation Court decision compensating claimant for injuries sustained in an automobile accident. We reverse.

The sole issue on appeal is whether the Workers’ Compensation Court erred in concluding that the claimant suffered a compensable injury under § 39-71-407(3)(b), MCA.

Claimant, Christine James was employed by Town House Inns in Butte. She started her employment as a housekeeper in 1987 and was promoted to Administrative Assistant/Sales Director in December of 1987. As part of Ms. James’s duties, she was in charge of the computerized mail solicitation program. Also as part of her duties, she participated in the manager-on-duty program. The latter program required Ms. James to alternate weekend management responsibilities with three other managers.

Ms. James was not on weekend duty the weekend of November 27, 1988. However, the manager on duty had the desk clerk call Ms. James twice on that day because the computer data system involving the computerized mail solicitation program had broken down. Ms. James tried to facilitate fixing the system by way of the telephone, but was unsuccessful. She, therefore, went to the hotel to fix the system in person. During a second trip to the hotel, Ms. James and her husband were involved in an auto accident. Ms. James was injured and subsequently missed a month and a half of work.

Ms. James filed a workers’ compensation claim on July 14, 1989. The claim was denied and mediated. She then petitioned the Workers’ Compensation Court and a hearing was held on March 9, 1992. The Workers’ Compensation Court issued its findings of fact and conclusions of law on July 10,1992, stating that Ms. James was injured during the course and scope of her employment and was entitled to compensation. This appeal followed.

Did the Workers’ Compensation Court err in concluding that Ms. James suffered a compensable injury under § 39-71-407(3)(b), MCA?

The Workers’ Compensation Court concluded as a matter of law that Ms. James’s injury was compensable under an established exception to the “going and coming” rule. The rule denies benefits for injuries sustained by an employee traveling to and from his regular work place. Buhl v. Warm Springs (1989), 236 Mont. 363, 769 P.2d 1258. According to the Workers’ Compensation Court, Ms. James’s injuries did occur during travel required by the employer “as part of’ the employee’s job duties, pursuant to § 39-71-407(3)(b), MCA.

The State Fund argues that Ms. James was merely traveling to her regular work place to perform a regular function as Administrative Assistant/Sales Director. Ms. James argues that the events of November 27,1988, are consistent with a special “call in” and that if the employment places the worker in the path of harm and without which the injury would not have occurred, the injury is said to have “arisen out” of the employment.

In 1987, our legislature took official notice of the “going and coming” rule as well as the exceptions which had evolved to it over the years. That 1987 statute reads:

Liability of insurers — limitations. (1) Every insurer is liable for the payment of compensation, in the manner and to the extent hereinafter provided, to an employee of an employer it insures who receives an injury arising out of and in the course of his employment or, in the case of his death from such injury, to his beneficiaries, if any.
(2) (a) An insurer is liable for an injury as defined in 39-71-119 if the claimant establishes it is more probable than not that:
(i) a claimed injury has occurred; or
(ii) a claimed injury aggravated a preexisting condition.
(b) Proof that it was medically possible that a claimed injury occurred or that such claimed injury aggravated a preexisting condition is not sufficient to establish liability.
(3) An employee who suffers an injury or dies while traveling is not covered by this chapter unless:
(a) (i) the employer furnishes the transportation or the employee receives reimbursement from the employer for costs of travel, gas, oil, or lodging as a part of the employee’s benefits or employment agreement; and
(ii) the travel is necessitated by and on behalf of the employer as an integral part or condition of the employment; or
(b) the travel is required by the employer as part of the employee’s job duties.
(4) An employee is not eligible for benefits otherwise payable under this chapter if the employee’s use of alcohol or drugs not prescribed by a physician is the sole and exclusive cause of the injury or death. However, if the employer had knowledge of and failed to attempt to stop the employee’s use of alcohol or drugs, this subsection does not apply.
(5) If a claimant who has reached maximum healing suffers a subsequent nonwork-related injury to the same part of the body, the workers’ compensation insurer is not liable for any compensation or medical benefits caused by the subsequent nonwork-related injury. (Emphasis added.)

Section 39-71-407, MCA.

The resolution of this case turns on the meaning of “travel required by the employer as part of the employee’s job duties.” On review, we must determine whether the Workers’ Compensation Court interpreted this subsection correctly. St. John’s Lutheran Church v. State Compensation Fund (1992), 252 Mont. 516, 830 P.2d 1271.

Ms. James relies on Parker v. Glacier Park, Inc. (1991), 249 Mont. 225, 815 P.2d 583. Such a reliance is misplaced as Parker’s situation was quite different from Ms. James’s. Parker was a hotel manager at the Rising Sun Motor Inn owned by Glacier Park, Inc. The day the Inn closed for the season, Parker loaded his car with perishable foods from his Inn and drove them to St. Mary’s Lodge from which the produce had initially been borrowed. When such exchanges occurred it was Parker’s responsibility to see that all loans were repaid.

Parker drove to St. Mary’s and returned the produce and had several drinks with the chef at Lake McDonald Lodge and with the chef at Rising Sun. Their discussions centered around business. Parker left St. Mary’s at 12:00 a.m. in order to return to the Rising Sun where he was to speak with the night auditor and prepare for the next morning’s banking. While traveling on this return trip Parker was permanently injured in a single car accident.

We held that Parker acted within the scope of his employment. That scope included such travel between the lodges. Parker was required to travel “as part of’ his job. Such circumstances distinguish Parker from this case. Here Ms. James was not required to travel between various areas during the course and scope of her employment. She was simply traveling to her job site in Butte when the accident occurred.

Section 39-71-407(3), MCA, specifies that an employee who suffers an injury while traveling is not covered unless within the specific provisions of subparagraph (a) or (b). Clearly subparagraph (a) does not apply as the employer did not furnish the transportation. Under subparagraph (b), the employee is not covered unless the travel is required as “part of’ the employee’s job duties. Prior to the enactment of the above statute, we held in Massey v. Selensky (1987), 225 Mont. 101, 731 P.2d 906, that the general rule was that travel to and from an employee’s place of work was outside the course and scope of his employment. We here construe the phrase “as part of’ from paragraph (b) of § 39-71-407(3), MCA, as equivalent to the phrase “in the course and scope of’ employment from the previous common law.

Here, Ms. James was on her way to her regular work place. Her work requirements in the course and scope of her employment included telephone solicitation, computer data input, and other sales and front desk work, all in the building in which she worked. Normally no travel was required for those duties. Ms. James was occasionally required to travel to other hotels, and on those occasions mileage was paid to her which could include mileage from her front door to such different hotel. Neither Ms. James, nor any other hotel manager, had ever submitted claims for, or received reimbursement for, mileage for travel from their homes to the hotel which was their regular job site.

Here Ms. James was not traveling to another job site during the course and scope of her work. She was simply traveling from her home to the hotel in which she normally worked in order to engage in data entry responsibilities.

We conclude that under § 39-71-407(3)(b), MCA, the travel required by an employer as a part of the employee’s job duties does not include travel to and from the employee’s normal place of work. We conclude that the phrase “as part of’ in subparagraph (3)(b), does not include travel to and from the employee’s regular job site unless the employer furnishes transportation which then comes under the provisions of subparagraph (3)(a).

We hold the Workers’ Compensation Court erred in concluding that Ms. James’s injury was compensable under § 39-71-407(3)(b), MCA.

Reversed.

CHIEF JUSTICE TURNAGE, JUSTICES GRAY, HARRISON and McDonough concur.

JUSTICE HUNT

dissenting.

I dissent. The majority misconstrues both the cases and statutes in determining that the claimant here was not entitled to benefits. In the ordinary course of the going and coming rule, the only obligation that the employee has to the employer is to be at work on time to begin performing the duties required. If the employee is at work and directed to travel somewhere else for the benefit of the employer, then there would be coverage during that trip. Here, claimant was directed by the employer to come to work, and was obligated to commence the travel under the direction of the employer to arrive and do a specific job, as requested by the employer.

Clearly, claimant was under the direction of the employer in this case. I would affirm the Workers’ Compensation Court.

JUSTICE TRIEWEILER concurs in the foregoing dissent.


text:
    PAGE WELLCOME; PAGE WELLCOME, PROFESSIONAL SERVICE CORP., Plaintiffs and Appellants, v. THE HOME INSURANCE COMPANY, Defendant and Respondent.
    No. 92-387.
    Submitted on Briefs January 28, 1993.
    Decided March 25, 1993.
    50 St.Rep. 305.
    257 Mont. 354.
    849 P.2d 190.

      For Appellants: Page Wellcome, San Diego, California.
    For Defendant and Respondent: Dennis McCafferty; James, Gray & McCafferty, Great Falls.
   JUSTICE GRAY

delivered the Opinion of the Court.

This case is before us on certified questions from the United States Court of Appeals for the Ninth Circuit concerning interpretation of insurance policy provisions.

A Montana trial court imposed sanctions against Page Wellcome (Wellcome), a Montana attorney, for disregarding its orders regarding voir dire, examination of witnesses and argument. The court ordered Wellcome and the insurer for his client to pay the sanctions. The sanctions, either as ordered or as compromised, ultimately were paid by Page Wellcome and Aetna Insurance Company.

Wellcome submitted a claim for the amount of the sanction to The Home Insurance Company (Home) under his professional liability policy. Home denied the claim on the basis of a provision excluding payment for “fines or statutory penalties whether imposed by law or otherwise ....”

Wellcome filed a diversity action in the United States District Court asserting a breach of the insurance contract and seeking a declaration of the parties’ rights thereunder. Home pleaded as affirmative defenses both the “fines or statutory penalties” exclusion and an exclusion for “deliberately wrongful acts or omissions committed by the Insured.” The parties filed cross-motions for summary judgment. Wellcome sought summary judgment on the grounds that: (1) the term “fine” in the policy was ambiguous and, therefore, should be construed against Home; and (2) coverage should be required under the “reasonable expectations” doctrine. The U.S. District Court granted summary judgment to Home on the basis of the “fines” exclusion, concluding that the term was not ambiguous. On that basis, the court determined that the reasonable expectations principle did not apply. The court did not rely on the “wrongful acts” exclusion, 758 F.Supp. 1375.

Wellcome appealed to the United States Court of Appeals for the Ninth Circuit. Stating that no clear controlling precedent in Montana judicial decisions existed on questions determinative of the case, the Ninth Circuit certified questions to this Court. We accepted jurisdiction of the certified questions by order dated August 25, 1992.

The following two questions are certified from the Ninth Circuit:

(1) Was there ambiguity in the contract language that should be construed against Home to require it to provide coverage for the sanctions imposed against Wellcome?
(2) Does the doctrine of reasonable expectations require Home to provide coverage for the sanctions imposed against Wellcome?

The interpretation of an insurance contract is a question of law in Montana. Truck Ins. Exchange v. Waller (1992), 252 Mont. 328, 331, 828 P.2d 1384,1386. Well-established principles guide our interpretation. The language of the policy governs if it is clear and explicit. Waller, 828 P.2d at 1386. Ambiguities are construed against the insurer. Bauer Ranch v. Mountain W. Farm Bur. Mut. Ins. (1985), 215 Mont. 153, 156, 695 P.2d 1307, 1309. Furthermore, exclusions from coverage will be narrowly and strictly construed because they are contrary to the fundamental protective purpose of an insurance policy. Farmers Union Mut. Ins. Co. v. Oakland (1992), 251 Mont. 352, 356, 825 P.2d 554, 556.

With these principles of insurance policy interpretation in mind, we turn to the policy at issue and the question of whether the “fines or statutory penalties” language is ambiguous, thereby requiring Home to provide coverage for the sanctions imposed against Wellcome. In so doing, we note that Home’s alternative basis for excluding coverage, the “deliberately wrongful acts” exclusion, is not before us and, therefore, is not addressed herein.

Pursuant to the claims made policy between Wellcome and Home, Home generally undertook to pay on Wellcome’s behalf all sums in excess of the deductible amount which Wellcome became “legally obligated to pay as damages ....” The specific provision under which the U.S. District Court granted summary judgment to Home defines damages as follows:

Damages, whenever used in this policy, means a monetary judgment or settlement and does not include fines or statutory penalties whether imposed by law or otherwise, nor the return of or restitution of legal fees, costs and expenses arising therefrom.

The court agreed with Wellcome that the monetary sanction was not imposed pursuant to statutory authority, and focused on the term “fine.” It determined that the term was not reasonably subject to differing interpretations, “[r]ather, the term, whether used in a formal context or in ordinary parlance, means the payment of money imposed upon a person for misconduct.” Because the Montana trial court imposed a payment of money on Wellcome for misconduct, the court concluded that the imposed sanctions were excepted from coverage under the policy.

On appeal to the Ninth Circuit, and before this Court, Wellcome argues that sanctions are sanctions and are not fines, penalties or any other type of punishment. He asserts that the term “fines” is used in Montana statutes only in the context of criminal matters and, therefore, that a Montana attorney reasonably could understand the exclusion for “fines” in his professional liability policy to exclude only criminal fines. Home contends that the policy clearly informed Wellcome that coverage was not available if a court ordered him to pay money as a result of his misconduct.

We conclude that the term “fines,” as used in the policy before us, is not ambiguous and excludes coverage for the sanctions imposed by the state trial court. We note first that the “statutory penalty” language does not apply here; it was not the basis for the trial court’s imposition of sanctions. However, that language would include penalties of all kinds imposed under authority of statute or rule, including a criminal fine, an “excess costs” penalty pursuant to § 37-61-421, MCA, a statutory contempt, or a sanction imposed under the Montana Rules of Civil Procedure.

Here, the trial court imposed the sanctions for Wellcome’s violation of certain of its orders during trial, pursuant to its inherent authority. The sanctions were a penalty or punishment for Wellcome’s misconduct, notwithstanding the fact that they did not come within any specific statutory authority so as to constitute a statutory penalty under the policy. Black’s Law Dictionary (4th Ed. Rev.) defines a fine as a penalty; it defines the verb “fine” as “to impose a pecuniary punishment ....” In our view, this is the commonly understood and clear meaning of the word “fine.” Wellcome’s attempt to restrict the term to the criminal context is hypertechnical; it would produce an absurd result in that sanctions imposed pursuant to statute or rule would be excluded from coverage, while sanctions imposed pursuant to a court’s inherent authority to do so would be covered.

We turn next to the “reasonable expectations” doctrine, first recognized by this Court in Transamerica Ins. Co. v. Royle (1983), 202 Mont. 173, 656 P.2d 820. In that case, we held that a policy exclusion was invalid due to its failure to “honor the reasonable expectations” of the purchaser of the policy. Royle, 656 P.2d at 824. We quoted Keeton, Insurance Rights at Variance with Policy Provisions, 83 Harv.L.Rev. 961, 967 (1970), for the proposition that the objectively reasonable expectations of the purchaser would be honored notwithstanding the fact that a “painstaking study” of the policy would have negated the expectations. Royle, 656 P.2d at 824. The reasonable expectations doctrine is in accord with our strong public policy that insurance is intended to serve a fundamental protective purpose; to this extent the doctrine goes hand in hand with our rule of strictly construing policy exclusions. See Oakland, 825 P.2d at 556.

We next considered, and declined to apply, the reasonable expectations doctrine in Passage v. Prudential-Bache Securities, Inc. (1986), 223 Mont. 60, 727 P.2d 1298. In Passage, plaintiffs contended that the arbitration clause in their client agreement form, printed in the same typeface as the other agreement provisions, was unenforceable as outside their reasonable expectations. Stating that there was nothing in the record to indicate that the arbitration clause was not within the parties’ expectations, we affirmed the enforceability of the clause. Passage, 727 P.2d at 1302.

We most recently addressed the reasonable expectations of an insured in State Farm v. Estate of Braun (1990), 243 Mont. 125, 793 P.2d 253. There, the underinsured policy at issue specifically provided that coverage extended to Canada. Canadian law severely restricted damages in wrongful death tort actions. We determined that, given the policy’s specific extension of coverage for accidents occurring in Canada, a reasonable average insured would not be aware that, in relation to Montana law, Canadian law severely restricted damages. Braun, 793 P.2d at 256. We noted that accepting the insurer’s position would produce the result that State Farm sold, and collected premiums for, coverage in Canada that was worthless to the insured. Braun, 793 P.2d at 256.

Nothing in our cases supports the applicability of the reasonable expectations doctrine in this case. In neither Royle nor Braun did we apply the doctrine to require coverage where clear policy language excluded the coverage. We decline to do so here. Expectations which are contrary to a clear exclusion from coverage are not “objectively reasonable” as we used that term in Royle.

We have concluded herein that the definition of damages in Wellcome’s policy with Home which excludes “fines” clearly and unambiguously excluded coverage under the facts of this case. To require Home to provide coverage where the policy manifests a clear intent to do otherwise would violate our most basic contract law and rules of interpretation. See, e.g., § 28-3-401, MCA, and Waller, 828 P.2d at 1386. We conclude, therefore, that the doctrine of reasonable expectations does not require Home to provide coverage for the sanctions imposed against Wellcome.

Based on the above discussion and conclusions, we answer the certified questions as follows:

“First, was there ambiguity in the contract language that should be construed against Home to require it to provide coverage for the sanctions imposed against Wellcome?” No.

“Second, does the doctrine of reasonable expectations require Home to provide coverage for the sanctions imposed against Wellcome?” No.

JUSTICES TRIEWEILER, HUNT, HARRISON and WEBER concur.