author: MR. JUSTICE MORRISON MR. JUSTICE WEBER,

text:
    MAREE S. HUNTER, Claimant and Respondent, v. GIBSON PRODUCTS OF BILLINGS HEIGHTS, INC. and Glacier General Assurance Company, and Western Guaranty Services Fund, Defendant and Appellant.
    No. 86-364.
    Submitted on Briefs Oct. 23, 1986.
    Decided Dec. 30, 1986.
    730 P.2d 1139.

      Mulroney, Delaney & Scott, P. Mars Scott, Missoula, for defendant and appellant.
    Neil S. Keefer, Billings, for claimant and respondent.
   MR. JUSTICE MORRISON

delivered the Opinion of the Court.

Defendant Glacier General Assurance Company appeals the summary judgment awarded by the Workers’ Compensation Court in favor of claimant Maree Hunter. We affirm.

In 1983, claimant elected to begin receiving social security monthly retirement benefits prior to reaching age 65 as provided for by the Social Security Act. In 1984, claimant obtained a part-time job at Gibson’s Garden Center in Billings Heights, Montana. On May 29, 1984, claimant severely injured her back while working at Gibson’s. Claimant filed a claim for workers compensation. Glacier General Assurance Company (Glacier) accepted the claim and began paying temporary total disability benefits from the date of injury in the amount of $64.49 per week.

On February 6, 1986, claimant’s attorney wrote a letter to one of Glacier’s adjusters stating that he believed Glacier was liable for 500 weeks of permanent partial disability benefits upon claimant’s reaching age 65. Glacier responded that it would cease paying benefits on September 23, 1986, the date claimant reached 65. Glacier’s position was that when a claimant who is receiving temporary or permanent total disability benefits reaches the age of 65 and social security benefits are converted by law to retirement benefits, the claimant is considered to be retired and no longer entitled to such disability benefits.

Claimant filed a petition for hearing with the Workers’ Compensation Court on April 16, 1986. Claimant requested that the court convert her temporary total disability benefits to permanent partial benefits commencing September 23, 1986, award a lump sum, plus costs and attorney fees, and increase the award by 20% for Glacier’s refusal to pay. Claimant moved for summary judgment on all issues except the lump sum. The court granted summary judgment in favor of claimant and found that Johnson v. Peter Kiewit & Sons, Inc., WCC No. 8411-2704 (1985) controlled. In Johnson, the court ruled that Section 39-71-710, MCA, entitles a claimant who has been receiving permanent total disability benefits to receive permanent partial disability benefits once the claimant reaches the age of 65.

The court noted that the 20% penalty was appropriate in this instance because Glacier chose to ignore the holding in Johnson, supra. Glacier filed a motion for reconsideration which was denied by order dated July 25, 1986. Glacier appeals the decision of the Workers’ Compensation Court. We address the following issues:

1) Did the Workers’ Compensation Court correctly interpret Section, 39-71-710, MCA, in awarding claimant permanent partial disability benefits upon reaching age 65 when she had been receiving temporary total disability benefits prior to that time and had also been receiving reduced social security retirement benefits?

2) Did the Workers’ Compensation Court abuse its discretion in awarding a twenty percent penalty to claimant pursuant to Section 39-71-2907, MCA?

Glacier asserts Johnson, supra, is distinguishable from the present case and the Workers’ Compensation Court has stretched construction of Section 39-71-710, MCA, beyond its breaking point. Section 39-71-710, MCA, provides:

“If a claimant is receiving total disability compensation benefits and the claimant receives retirement social security benefits or disability social security benefits paid to the claimant are converted by law to retirement benefits, the claimant is considered to be retired and no longer in the open labor market. When the claimant is considered retired, the liability of the insurer is ended for payment of such compensation benefits. This section does not apply to permanent partial disability benefits. Medical benefits are expressly reserved to the claimant.”

In Johnson the claimant was 67 years of age at the time of injury and was receiving social security retirement benefits. Claimant began receiving temporary total disability benefits but the insurance company terminated payments on the basis that claimant was not entitled to benefits pursuant to Section 39-71-710, MCA, because she was receiving social security retirement benefits and thus considered retired. The Workers’ Compensation Court disagreed stating:

“A plain reading of MCA Section 39-71-710, coupled with a review of the legislative history of this statute, persuades the Court that the legislature fully intended to provide that a person receiving social security retirement benefits would not be entitled to receive permanent total disability benefits under the Workers’ Compensation Act.

“It is equally clear that the legislature intended to leave temporary total and partial disability benefits in place ‘to properly compensate a worker for temporary disability and for physical impairment that may exist.’ (Memorandum by the Workers’ Compensation Division regarding Senate Bill No. 64, submitted by Laury Lewis on January 29, 1985.)

“. . . [E]quity demands that individuals in the claimant’s situation can be compensated to some degree for injuries suffered while working. Otherwise, a nonsensical result would follow: A ‘retired’ individual who is only slightly injured would qualify for workers’ compensation benefits, while a ‘retired’ individual who suffers a permanently totally disabling injury would not.
“. . . If Section 39-71-710, MCA, were strictly construed, [claimant’s] injury would be completely noncompensable.
“To avoid this unjust result, this Court concludes that the permanently totally disabled claimant is entitled to receive permanent partial disability benefits pursuant to MCA Section 39-71-710. The Court is aware that it is stretching its mandate of liberal construction, but it has not stretched it to the breaking point.”

In the present case, claimant was 62 years of age at the time of her injury. She received approximately 2Vz years of temporary total benefits prior to reaching age 65. Glacier contends that while the result in Johnson was fair, the present case is distinguishable because claimant was injured prior to being “retired” under Section 39-71-710, MCA, and did receive compensation for the injury. Further, that the legislative intent of Section 39-71-710, MCA, was to terminate total disability benefits at age 65 because social security retirement benefits would thereafter be adequate income for the retired worker.

Claimant contends Section 39-71-710, MCA, does not address the specific facts of this case. However, liberal construction of the statute, as mandated by Section 39-71-104, MCA, results in the conclusion claimant is entitled to an award of permanent partial benefits upon reaching the age of 65.

Section 39-71-710, MCA, explicitly provides: “This section does not apply to permanent partial disability benefits.” In the present case, claimant, who had been receiving temporary total disability benefits, petitioned the Workers’ Compensation Court for an award of permanent partial benefits commencing on her 65th birthday.

As noted by the Workers’ Compensation Court in Johnson, supra, strict construction of Section 39-71-710, MCA, would result in an absurdity: A worker injured past the age of 65 may recover compensation if partially disabled but not if totally disabled. We agree with the court’s interpretation of Section 39-71-710, MCA, allowing for payment of permanent partial disability benefits to a permanently totally disabled claimant who has reached the age of 65.

The next issue raised by Glacier is whether the Workers’ Compensation Court abused its discretion in assessing a 20% penalty against Glacier. Pursuant to Section 39-71-2907, MCA, the workers’ compensation judge may increase the award to the claimant by 20% upon a finding of unreasonable delay or refusal to pay by the insurer. In this instance, the judge assessed the penalty against Glacier because it chose to litigate an issue which had been clearly decided in Johnson, supra, and Glacier’s attorney was aware of that decision since he represented the claimant in Johnson.

Whether the insurer’s action is unreasonable is a question of fact and on appeal a finding of unreasonableness will not be overturned if supported by substantial evidence. Coles v. Seven Eleven Stores (Mont. 1985), [217 Mont. 343,] 704 P.2d 1048, 42 St.Rep. 1238. Glacier contends the award was not proper because the present case is distinguishable from Johnson, supra. While the issue is a close one, we find substantial evidence to uphold the penalty assessment. Though the facts in Johnson were slightly different than the present case, the court’s interpretation of Section 39-71-710, MCA, in Johnson, was clearly applicable in this instance and there is evidence to support the Workers’ Compensation Court finding that Glacier should not have contested the award of permanent partial disability benefits.

Judgment for claimant is affirmed.

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

MR. JUSTICE WEBER,

dissenting:

My dissent is aimed primarily at our Montana Legislature. I hope the Legislative Council and the Legislature itself may be able to address the contradictions present in Section 39-71-710, MCA. That contradictory statute is set forth in full in the majority opinion.

Section 39-71-710, MCA, provides that if a claimant is receiving total disability compensation benefits and attains 65 years of age so that he becomes entitled to receive retirement social security benefits, then his total disability compensation benefits stop, and the liability of the insurer is ended for payment of such benefits. The statute does not explain the reasoning behind the complete elimination of a right to receive total disability compensation benefits. The sueceeding sentence provides that the section does not apply to permanent partial disability benefits. These provisions contradict each other. If a claimant is totally disabled so that the claimant becomes entitled to receive total disability benefits for the rest of his life, on what theory can that totally disabled person be found no longer entitled to benefits, while a partially disabled person may still receive disability benefits?

The section accords unequal treatment to those who are totally disabled and those who are partially disabled. As this case demonstrates, it suggests a legislative policy which would prohibit any type of disability benefits to a person who is totally disabled when working after he attains 65 years of age. As an example, if a 66 year old person receiving social security retirement benefits becomes totally disabled while working, that person is apparently not entitled to total disability benefits. I cannot imagine that was the intention of the legislature at the time of the adoption of this section. I therefore request the legislature to consider the inequalities and contradictions contained in the present section.

In the majority opinion, the defendant is charged a 20% penalty because of a claimed unreasonable delay in the making of payment. As I read Section 39-71-710, MCA, the facts of the present case come precisely within the wording of the first two sentences of that section. Those sentences provide that if a claimant is receiving total disability compensation benefits (as was the claimant here) and the claimant then receives retirement social security benefits (as the claimant was about to receive) then the claimant is considered to be retired and the liability of the defendant insurer is ended for the payment of such compensation benefits. If that section were construed to mean what it says, upon attaining age 65, claimant was no longer entitled to receive his compensation benefits from the defendant. The majority has chosen to accept the Workers’ Compensation Court’s decision which disregarded the express wording of the statute and concluded that it would be unfair to so terminate a totally disabled claimant. Without the benefit of statutory authority, both the Workers’ Compensation Court and the majority have concluded that a claimant who is totally disabled can seek permanent partial disability benefits and obtain the same even in the absence of any statutory authority for doing so. The rationale is that such partial disability benefits are presumably less expensive than total disability benefits so the Workers’ Compensation Court can award the same. I admire the concern for the claimant which has resulted in this construction. Clearly it is more fair than a termination of all benefits. On the other hand, I find it totally inappropriate to charge a penalty of 20% against an insurer who read the statute to mean what it says.


source: Caselaw Access Project

author: MR. JUSTICE GULBRANDSON

license: Public Domain

text:
    In re the MARRIAGE OF CONNIE L. PRYOR, Petitioner and Respondent, and GARLAND L. PRYOR, Respondent and Appellant.
    No. 86-264.
    Submitted on Briefs Sept. 4, 1986.
    Decided Dec. 30, 1986.
    731 P.2d 895.

      Julio K. Morales, Morales & Volinkaty, Missoula, for respondent and appellant.
    P. Mars Scott, Mulroney, Delaney & Scott, Missoula, for petitioner and respondent.
   MR. JUSTICE GULBRANDSON

delivered the Opinion of the Court.

Garland Pryor appeals a Missoula County District Court order which distributed the parties’ marital estate and ruled that certain payments made by Garland to respondent Connie Pryor were maintenance payments. The issues on appeal are:

(1) Whether the court abused its discretion in dividing the marital estate between the parties;

a) whether the court erred in including the husband’s vested retirement benefits in the marital estate and dividing them between the parties;

b) whether the court erred in valuing the husband’s vested retirement benefits;

c) whether the court erred in including the employer’s contributions to the retirement benefits in the marital estate;

d) whether the court erred in including certain assets in the marital estate.

(2) Whether the court erred in ruling that certain payments made by husband to wife were maintenance payments.

We affirm.

The parties were married in 1972 in Billings, Montana. No children resulted from their marriage. Connie has two daughters from a previous marriage. She works nine months a year driving a school bus and has gross annual earnings of approximately $7,500. Connie is approximately 39 years old.

Prior to and during the marriage, Garland worked as a federal air traffic controller. In 1983, his gross income was $36,576. In September 1985, Garland testified that if he were to retire then, he would receive $18,819 a year in retirement benefits if he did not choose to reserve survivor benefits. If he reserved survivor benefits, he would receive $17,288 a year. Garland is approximately 56 years old.

In June 1984, Connie filed a petition for dissolution of marriage. Beginning in September 1984, Garland paid monthly sums to Connie to help pay her living expenses. The parties stipulated to the first payment and, thereafter, the District Court granted Connie’s motion requiring Garland to continue paying monthly sums to her. The court reserved ruling on whether the payments would be regarded as maintenance or as prepayments of Connie’s share of the marital estate.

The court held a hearing in September 1985, and issued an order in November 1985 dissolving the parties’ marriage and distributing the marital estate. In February 1986, the court held another hearing on the valuation of Garland’s vested retirement benefits. In March, 1986, the court filed an order with a revised distribution of the marital estate. The second distribution is similar to the first but the retirement benefits are assigned a lower value. The court distributed the marital estate as follows:

Connie Garland

Personal Property Retirement Benefits $ 1,545 $19,288

(Present value) • 46,769 55,497

East Missoula 51,000

Residence Helena Acreage 8,800

Honda 90 235

1984 Tax Refund 462 462

FAA Credit Union 4,900

Missoula Credit Union 900

TOTAL $99,776 $90,082

The distribution plan provides that Garland will make semi-annual payments to Connie to pay for her share of the retirement benefits. Garland is to make semi-annual $4,000 payments to Connie at an interest rate of 10% until her share is “cashed out”. Garland appeals with the main issues being the division and valuation of his retirement benefits.

“The standard for reviewing the property division in a dissolution decree is well settled in Montana. The apportionment made by the District Court will not be disturbed on review unless there has been a clear abuse of discretion as manifested by a substantially inequitable division of the marital assets resulting in substantial injustice. (Citations omitted.)”

Hurley v. Hurley (Mont. 1986) [222 Mont. 287,] 721 P.2d 1279, 1285, 43 St.Rep. 1271, 1278.

Garland first attacks the inclusion of the present value of his retirement benefits in the marital estate. He claims that he should receive all of those benefits. We disagree. “It is well established in Montana that retirement benefits are classed as a part of the marital estate.” In Re Marriage of Sirucek (Mont. 1985), [219 Mont. 334,] 712 P.2d 769, 772, 42 St.Rep. 623, 627. The District Court found that Connie’s contribution to the marriage was equal to Garland’s. Substantial evidence supports that finding. Connie testified that she contributed monetarily to the marital relationship and performed the vast majority of the household chores. Her past contributions to the household entitle her to share in Garland’s retirement benefits. See Marriage of Singer (Mont. 1986), [222 Mont. 255,] 721 P.2d 755, 43 St.Rep. 1242.

The more troublesome issue involves the valuation of the retirement benefits. The parties’ respective experts gave widely differing estimates of the present value of the retirement benefits. We note that present value is the proper test for valuing retirement benefits to be received in the future. Glasser v. Glasser (Mont. 1983), [206 Mont. 77,] 669 P.2d 685, 689, 40 St.Rep. 1518, 1522. Garland’s expert calculated that the present value of the retirement benefits, without electing optional survivor benefits, was $62,352. He would include 65% of that amount ($41,464) in the marital estate because only 65% of the vested retirement benefits were attributable to the marital period. Thus, based on his calculations, Connie would receive $20,732 (one-half of $41,464) if the court awarded her half of the benefits earned during the marriage. In making his calculations, Garland’s expert assumed that Garland would continue working for eight and one-half years, thus reducing the total benefits he would receive.

Connie’s expert calculated the present value of the benefits by assuming that Garland was retired at the time of the hearing and could begin drawing the benefits then. Connie’s expert testified that the present value of the retirement benefits was $150,671, if Garland chose the option with survivor benefits. He also testified that the present value for the option without survivor benefits would be about equal to the present value of the option with survivor benefits. Garland’s expert gave a similar option on that point. Of the $150,671, approximately $100,904 would be attributable to Garland’s work during the marriage and, thus, part of the marital estate. The difference in the experts’ estimates of the present value of the retirement benefits stemmed from different assumptions of Garland’s retirement date. Connie’s expert assumed Garland was presently retired while Garland’s expert assumed Garland would retire in eight and one-half years.

The District Court found the present value of the benefits earned during the marriage was $100,904 and divided that amount 55% - 45% with Garland receiving the larger share and Connie the smaller. The court also awarded $1,362 in survivor benefits to Connie. We hold that there was no error in the valuation and division of the retirement benefits.

We uphold the court’s valuation of the benefits because substantial credible evidence supports that valuation. The court accepted the opinion of Connie’s expert, who was a certified public accountant. That opinion considered Garland’s life expectancy and the probability of Connie’s remarriage (which would affect the amount of benefits she receives). Moreover, Garland’s own testimony supports the court’s decision to use Connie’s valuation (which assumes that Garland is presently retired) and not Garland’s valuation (which assumes he will retire in eight and one-half years). Garland testified that he plans to work for “ ... a while. I don’t know, a year or two, it just depends.” There was no evidence he would work for over two more years, let alone eight and one-half years. Finally, the District Court did not err in including in the marital estate the employer’s contributions to the retirement benefits. Those contributions are analogous to deferred compensation which Garland earned during the marriage. Those contributions are part of the marital estate just as his regular earnings are.

This Court, in Glasser v. Glasser (Mont. 1983), [206 Mont. 77,] 669 P.2d 685, 689, 40 St.Rep. 1518, 1523, cited the following guidelines for the division of retirement benefits;

“ . . . (1) The distribution should generally be based on the contributions made during the marriage. (2) The courts should continue to strive to disentangle the parties as much as possible by determining, where equitable, a sum certain to be paid rather than a percentage based upon expected future contingencies. (3) In determining whether a lump sum award is appropriate, courts should consider the burden it would place on the paying spouse in view of required child support, spousal support, and other property distribution. (4) Where courts determine that the parties will share in the benefits on a proportional basis, the parties should also share the risk of future contingencies, e.g., death of the employee spouse or delayed retirement of the employee spouse, and payment should be to the receiving spouse as the employee spouse receives the retirement pay. (5) Courts should consider, where appropriate, an award of a portion of retirement benefits where other property awarded is not adequate to make an equitable distribution. (Citation omitted.)”

The District Court considered these factors and acted accordingly. The court awarded Connie a lump sum of the benefits rather than a percentage of the benefits as received by Garland because the court found it was best to “disentangle” the parties. Moreover, the parties share the risks of future contingencies as those contingencies were considered in the estimate of present value.

We hold that the District Court equitably distributed the marital estate and did not abuse its discretion in making that distribution. The court made numerous and detailed findings supporting its property distribution. The court noted that Garland earned much more than Connie. Garland attacks the inclusion of certain assets in the estate. Without addressing this complaint in depth, we simply note that those assets were accumulated during the marriage. Connie’s contributions to the household facilitated the accumulation of the assets and entitle her to share in them.

The last issue is the court’s designation of certain payments made by Garland to Connie as maintenance. The court provided that Connie was not entitled to maintenance after the order distributing the marital property. Section 40-4-203(1), MCA, provides that a court may award maintenance to a spouse where that spouse “a.) lacks sufficient property to provide for his reasonable needs; and b.) is unable to support himself through appropriate employment or . . .” Connie’s testimony at trial establishes that she met those standards. Therefore, we hold that the court did not err in designating Garland’s payments as maintenance. Affirmed.

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


author: MR. CHIEF JUSTICE TURNAGE

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. GERALD ALAN GEORGE, Defendant and Appellant.
    No. 86-345.
    Submitted on Briefs Sept. 25, 1986.
    Decided Dec. 30, 1986.
    730 P.2d 412.

      Cannon & Sheehy, Edmund F. Sheehy, Jr., Helena, for defendant and appellant.
    Mike Greely, Atty. Gen., Dorothy McCarter, Asst. Atty. Gen., Mike McGrath, Co. Atty., Helena, for plaintiff and respondent.
   MR. CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

This is the second time George’s case has come before this Court. See State v. George (Mont. 1986), [219 Mont. 377,] 711 P.2d 1379, 43 St.Rep. 26. Briefly recounted, on December 9, 1984, George was stopped by Helena police for driving erratically. George was also driving without a valid license and had no proof of insurance. On May 6, 1985, George was convicted by jury in the First Judicial District, Lewis and Clark County, of driving after having been adjudged an habitual traffic offender. On July 15, 1985, George was sentenced to one year imprisonment in the county jail. George failed to make a timely appeal of his sentence. However, George did appeal his conviction. We affirmed the conviction on January 7, 1986.

When George was convicted of driving after having been adjudged an habitual traffic offender, he was also on a deferred sentence for criminal mischief. Because of his habitual offender conviction, his deferred sentence was revoked and George was sentenced to five years in prison with three suspended.

On March 15, 1986, George moved to amend judgment to allow the two sentences to run concurrently, pursuant to Section 46-18-401, MCA, and to credit the time served in the county jail to his prison term. The Lewis and Clark County District Court denied the motion on May 14, 1986. George appeals the denial.

We affirm the District Court.

Defendant George raises a single issue for our review: Did the District Court abuse its discretion when it denied George’s motion to amend judgment?

George admits that he is an habitual traffic offender. He also admits that the District Court was justified in sentencing him to a year in the county jail, but requests that his habitual offender sentence run concurrently with his criminal mischief sentence. In Dahlman v. District Court (Mont. 1985), [215 Mont. 470,] 698 P.2d 423, 425, 42 St.Rep. 550, 552, we held that a trial judge has no jurisdiction to vacate or modify a defendant’s sentence after a valid sentence had been imposed, unless specifically authorized by statute.

George argues that Section 46-18-401, MCA, specifically authorizes modification of his sentence. However, George also admits that the statute gives a sentencing judge the discretion to not merge a new sentence with an existing sentence. Section 46-18-401, MCA, provides:

“(1) Unless the judge otherwise orders
“(b) whenever a person under suspended sentence or on probation for an offense committed in this state is sentenced for another offense, the period still to be served on suspended sentence or probation shall be merged in any new sentence of commitment or probation.
“(3) If an unexpired sentence is merged pursuant to subsection (1), the court which imposed such sentence shall modify it in accordance with the effect of the merger.” [Emphasis added.]

The sentencing judge’s discretion is therefore limited to merger of sentence. In the absence of merger, the statute does not authorize modification of sentence. However, George tries to equate “merger of sentence” and “modification of sentence.”

The terms “merger” and “modification” are distinct. “Merger” is the fusion of one sentence into another sentence. In contrast, “modification” is the alteration of the details of a single sentence. No statute authorizes the modification of George’s sentence. Under the rule of Dahlman, we find no merit in his motion to amend judgment.

Alternatively, we shall consider George’s present appeal as a petition for post-conviction relief. In Dahlman, 698 P.2d at 425, we stated: “However, had defendant filed a motion for post-conviction relief, the trial judge would have had jurisdiction to modify defendant’s sentence, pursuant to Section 46-21-101, MCA.”

Section 46-21-101, MCA, provided:

“A person adjudged guilty of an offense in a court of record who has no adequate remedy of appeal and who claims that sentence was imposed in violation of the constitution or the laws of this state or the constitution of the United States . . . may petition the court which imposed the sentence or the supreme court to vacate, set aside, or correct the sentence or revocation order.”

George alleges that the District Court abused its discretion, without citing any instance of abuse. George merely asserts that the sentencing judge should not have considered George’s traffic citation record, which was contained in the presentence investigation report. George’s assertion runs counter to Section 46-18-111, MCA, which states:

“No defendant convicted of any other offense that may result in commitment for 1 year or more in the state prison may be sentenced or otherwise disposed of before a written report or investigation by a probation officer is presented to and considered by the court unless the court deems such report unnecessary. The court may, in its discretion, order a presentence investigation for a defendant convicted of any lesser crime or offense.” [Emphasis added.]

The District Court noted that George’s traffic record “is the worst this Court has ever seen.” The report revealed that, prior to this action and within the last five years, George has been arrested six times for driving while his license was suspended, three times for speeding, twice for no insurance, and once for driving under the influence. On eight separate occasions, his license was suspended. Furthermore, George was arrested twice for driving without a license after he had been declared an habitual traffic offender. Based on this report, the District Court concluded that George is not a good rehabilitation risk.

The District Court noted that George showed no remorse for his crimes. When asked to explain them, he replied that he has a “lead foot.” The District Court further noted that a merger of sentences would effectively negate George’s jail time as an habitual traffic offender. The District Court properly concluded that George did not deserve leniency. It stated: “As his criminal history shows, George has been repeatedly granted leniency by different judges. The granting leniency to Mr. George has not resulted in his rehabilitation in the slightest degree. He shows no respect for the law whatsoever. The granting of leniency, in his case, appears to create in him an ever increasing contempt for the law ... If ever a person deserved the maximum sentence for his crime, it is Gerald Alan George.”

We note that the purpose of the habitual traffic offender statute is succinctly stated in Section 61-11-201, MCA: “This part is predicated upon the belief and philosophy that innocent drivers and other innocent passengers and pedestrians have a constitutional right to live, free from fear of death or injury from habitual traffic offenders.” We find that George has repeatedly shown disregard for Montana laws, disrespect for court orders, and indifference toward the safety of other citizens.

The District Court did not abuse its discretion. The petition for post-conviction relief is denied. The District Court is affirmed.

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


text:
    TED SCHWINDEN, In his Official Capacity as Governor of the State of Montana; Ellen Feaver, In her Official Capacity as Director of Revenue of the State of Montana; Montana Association of Counties; Montana League of Cities and Towns; Urban Coalition; and Montana School Boards Association, v. BURLINGTON NORTHERN, INC., Defendant.
    No. 86-490.
    Decided Dec. 30, 1986.
    730 P.2d 422.
    Ken W. Hoversland, Co. Atty., Daniels County, Scobey, Michael Garrity, Dept, of Revenue, Legal Div., Helena, for plaintiffs.
   OPINION AND ORDER

Daniels County, Montana, through its county attorney, has filed an original petition in this Court for clarification and interpretation of our opinion in Cause No. 83-551, entitled Schwinden v. Burlington Northern, Inc., et al. (the same caption as this case) (1984), [213 Mont. 382,] 691 P.2d 1351, 41 St.Rep. 2184.

In our original opinion in 1984, we held that a nondiscriminatory franchise tax levied on a state by a corporation for the privilege of doing business in the state is valid even though, in computing the tax, interest income from federal obligations is included.

In so holding, we reversed a contra determination which disallowed state tax on interest income from federal obligations in First Federal Savings and Loan Association v. Department of Revenue (Mont. 1982), 200 Mont. 358, 654 P.2d 496, 39 St.Rep. 1802, cert. den. 462 U.S. 1144, 103 S.Ct. 3128, 77 L.Ed.2d 1378 (1983).

This Court in Schwinden recognized the problem created by our reversal of First Federal. We knew that a great number of taxpayers, relying on our decision in First Federal, had computed their Montana corporate license tax returns and filed the same without including interest on federal obligations otherwise taxable under Section 15-31-116, MCA. To avoid any unfair effect of retroactive application of our decision in Schwinden, we provided as follows:

“. . . We order that the tax obligations of Burlington Northern, Inc. for the taxable year 1982 shall be determined under the Montana corporation license tax as interpreted by this Court in this opinion, as well as the corporation’s future Montana corporation license tax returns while said tax remains in effect. As to all other corporate taxpayers, filing under the Montana corporation license tax provisions, their returns shall be filed with taxes computed according to this opinion for taxable years ending after the date of this opinion and for any amendment of tax returns for earlier years. With respect to whether the Montana corporation license tax should be otherwise retroactively or prospectively applied under this opinion, we retain jurisdiction for application to us by the Department of Revenue, or by any corporate taxpayer after proceeding before the Tax Appeal Board, for the purpose of obtaining such further relief as may be required.”

Daniels County is not a taxpayer, nor has it proceeded first before the State Tax Appeal Board. Yet we deem it expedient to entertain the application made by Daniels County in this case as a part of our reserved jurisdiction.

The facts giving rise to the petition from Daniels County are these: Citizens State Bank of Scobey is a corporate license taxpayer that before November 23, 1984, filed amended returns seeking refunds for corporate license taxes paid by it for the years 1979 through 1982. The total amount of Daniels County’s portion of the refund was $49,329.00. While First Federal was in effect, correspondence • was had between the county officials of Daniels County and the State Department of Revenue as to how best to handle the refund. On June 26, 1984, the State Department of Revenue suggested three options, (1) to net the 1983 tax liability against the refunds for the earlier years and issue the balance of the refund in the amount of $39,870.60; (2) to net the 1983 tax liability against the refunds due and hold the balance of refund until such time as future tax liabilities offset the refund. (The balances would carry interest at the rate of 12% per year); (3) an option not important here relating to the State’s portion of the corporate license tax. Daniels County opted to refund the full amount to Citizens State Bank.

Then on November 23, 1984, our decision in Schwinden came down. Somehow Daniels County is under the impression that under Schwinden it is entitled to recover back from Citizens State Bank the full amount of the refund. On February 19, 1985, the Department proposed amendment of Rules 42.23.416 and 42.23.417, A.R.M., and adoption of new Rule I, relating to the tax treatment of interest earned on federal obligations. Under the Department rules, which were subsequently adopted, returns or amended returns filed before November 23, 1984, based on First Federal were correctly computed. Returns or amended returns filed after November 23, 1984, would require inclusion of interest on federal obligations based on our interpretation in Schwinden.

Daniels County objected to the proposed rules claiming that the county was discriminated against because in the interests of its taxpayers, to avoid interest and for other reasons, it had made a quick refund to Citizen’s State Bank. Other counties had apparently treated other corporate license taxpayers similarly. Daniels County contends that it acted on the advice of the Department of Revenue in making the refund, that it is now being discriminated against under the interpretation of the Department of Revenue through its adoption of new and amended rules, and it has made demands upon the Department of Revenue for the payment to it in full of the refund previously given to Citizens State Bank. The Department of Revenue has refused to make up the refund.

On the basis of the dispute between Daniels County and the Department of Revenue, Daniels County filed the original application herein, seeking interpretation and clarification of our decision in Schwinden.

The application by Daniels County presents exactly the kind of problem that this Court foresaw and attempted to avert in determining the retroactive and prospective application of Schwinden. As the response filed by the Department of Revenue in this case remarks, our treatment of the retroactive dilemma in Schwinden has avoided costly and needless litigation though it resulted in some loss of tax monies to the counties and to the state. The beneficial effect of our decision in Schwinden was that it extended the taxing power of the state to income that previously had escaped taxation for corporate license tax purposes from November 23, 1984 forward provided that the returns or amended returns were filed after that date.

WHEREFORE, IT IS ORDERED:

1. As a matter of interpretation of our decision in Schwinden, the critical fact as to whether income from federal obligations should be taxed for corporate license tax purposes under our decision in Schwinden, or under our decision in First Federal is the date of filing the corporate license return by the taxpayer. Returns or amended returns filed before November 23, 1984, are entitled to compute their corporate license taxes in accordance with the decision in First Federal. Returns or amended returns filed after November 23, 1984, are to have corporate license taxes computed according to Schwinden.

2. Amended Rules 42.23.416 and 42.23.417, A.R.M. and new Rule I, properly reflect the prospective and retroactive effect of our decision in Schwinden.

3. We continue to retain jurisdiction of this cause in accordance with our language in Schwinden.

4. A duplicate original of this Opinion shall be filed in this Court in Cause No. 83-551.

5. The Clerk shall mail copies of this Opinion to counsel of record. DATED this 30th day of December, 1986.

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


author: MR. JUSTICE SHEEHY

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. RAY MILHOAN, Defendant and Appellant.
    No. 86-211.
    Submitted on Briefs Oct. 9, 1986.
    Decided Dec. 31, 1986.
    730 P.2d 1170.

      Moses Law Firm, Stephen C. Moses, Billings, for defendant and appellant.
    Mike Greely, Atty. Gen., James M. Scheier, Asst. Atty. Gen., Helena, James C. Nelson, Co. Atty., Cut Bank, for plaintiff and respondent.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

Defendant Ray Milhoan appeals his conviction for two counts of felony theft and one count of misdemeanor theft following a jury trial in the District Court, Ninth Judicial District, Glacier County. We affirm his conviction.

The issues raised on appeal are:

1. Was there sufficient evidence to support the jury’s findings that defendant acted purposely or knowingly in committing the offenses of felony and misdemeanor theft when he “exchanged” two motor vehicle engine blocks for others and the school district received nothing as a result of the trade?

2. Was there sufficient evidence to support the jury’s findings that the value of the 427 engine block justified a felony theft conviction and the value of the 366 engine block justified a misdemeanor theft conviction.

3. Did the District Court properly deny defendant’s motions to dismiss and motion for a directed verdict on the common scheme felony theft charge relating to the 18 transactions involving unauthorized use of school property?

4. Did the District Court err by giving State’s jury instruction 12 defining knowingly and State’s instruction 18 defining common scheme and by refusing to give defendant’s offered instruction 6 on reasonable doubt, instruction 10 on conviction on conjecture, instruction 16 on the requisite mental state, instruction 29 defining larceny and instruction 31 defining taking?

In April, 1985, the Glacier County Attorney filed a seven count information against Ray Milhoan alleging a series of felony thefts from 1980 to 1985. In October, 1985, the information was amended down to three counts of felony theft. Milhoan was convicted by a jury in November of two counts of felony theft and one count of misdemeanor theft. He was sentenced to four years for the felonies and six months for the misdemeanor. These sentences were suspended on the condition that defendant pay $300 in restitution and $550 in fines.

From July, 1980, until April, 1985, Milhoan was employed in three capacities. He was a minister at the First Baptist Church in Cutbank, he operated an automobile repair business called Milhoan Automotive, and he was employed by School District No. 15 in Cut Bank as the transportation supervisor. As transportation supervisor, Milhoan was responsible for maintenance of the school district buses. He had unlimited access to the school district bus repair shop, or “bus barn,” and the Cut Bank High automotive shop. Milhoan used his own tools in his job as transportation supervisor because the school did not own the necessary equipment. Milhoan’s convictions arise from his unauthorized use of the bus barn and appropriation of school district property.

The first felony conviction concerned Milhoan’s unauthorized effort to trade a school district GMC 427 school bus engine to his friend and fellow church official, Midge Lorash. In exchange, Lorash was to give the school district a rebuildable Chevrolet GMC 350 engine. Not only was this “trade” made without the school superintendent’s approval, but the school never received the Chevrolet engine. Nonetheless, the 427 school bus engine was rebuilt in the bus barn, and the school district was charged $72 for a water pump used in rebuilding it. Several people testified that Milhoan told them the engine belonged to him. The school’s auto mechanics and welding instructor testified that the “core” value (or trade-in value), of the engine before it was rebuilt was $350 to $400.

The second felony conviction involved another unauthorized trade-Milhoan agreed to swap a 366 Chevrolet school bus engine for the same type of engine in similar condition. However, the other party in the “trade” was unaware of any obligation to pay or give anything back to the school district. Accordingly, the school district did not receive an engine or anything of value. School authorities were unaware of their participation in this trade. The school’s auto mechanics instructor testified that the engine was worth $350. The intended recipient of the engine believed the engine to be worth $75 to $100.

Milhoan argues that there was insufficient evidence to support the jury’s finding that he possessed the requisite intent to be convicted of theft. He claims that he was authorized, as transportation supervisor, to trade vehicle parts belonging to the school district, and that there was no written policy prohibiting barter or parts. Further, he claims that there was no intent on his part to deprive the school of its property. Instead, he argued that it was his intent to provide the school with more usable property, as the school had no use for the traded engines.

“A person acts knowingly with respect to the result of conduct described by a statute defining an offense when he is aware that it is highly probable that such result will be caused by his conduct.” Section 45-2-101(33), MCA. A person acts purposely “if it is his conscious object to engage in that conduct or to cause that result.” Section 45-2-101(58), MCA.

Milhoan claims that he arranged the trades motivated solely by good intentions. The jury, as the finders of fact, did not believe him. Milhoan’s response is that there was insufficient evidence to support the jury’s conclusion. Hence, we must address the issue of whether there was sufficient evidence to show that Milhoan purposely or knowingly exerted unauthorized control over the engine blocks and whether the evidence supported a finding that he had the purpose of depriving the school district of its property.

The test this Court uses to judge the sufficiency of the evidence is whether there is substantial evidence supporting the conviction when that evidence is viewed in the light most favorable to the State. State v. Austad (1982), 197 Mont. 70, 99, 641 P.2d 1373, 1389. Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Id. The credibility and weight to be given to conflicting evidence is solely within the province of the jury. Id. State v. Harvey (1979), 184 Mont. 423, 428, 603 P.2d 661, 665.

A review of the evidence presented to the jury firmly establishes that the conviction was supported by the evidence. First, there is the testimony of the recipients of the trade that they did not know of their obligations to give the school district engine blocks in exchange for the bus engines they received. Second, these same recipients testified that they were under the impression that the blocks were Milhoan’s. Third, Milhoan had twice been personally instructed by the Superintendent of Schools that it was against school policy to permit its equipment to be used by, or loaned out to people who were not employees of the school. This instruction was communicated both orally and in writing. Fourth, Milhoan also knew that it was the school district’s policy to auction unneeded equipment and supplies, and in fact, testimony revealed that Milhoan had participated in at least one school district surplus equipment auction. Finally, Milhoan charged the school district $72 for a water pump used to rebuild the 427 engine, a task completed in the school’s bus barn, which was both against explicit school policy and for which the school was not compensated. Clearly, this evidence is sufficient to support the jury’s finding that Milhoan acted with knowledge or purpose and without authority when he deprived the school district of the two school bus engines.

The next issue raised concerns the value of the engine blocks. Milhoan contends that there was insufficient evidence to support the jury’s conclusion that the 427 engine’s value justified a felony theft conviction and the value of the 366 engine justified a misdemeanor theft conviction.

Section 45-2-101(69), MCA, defines “value” as the market value of the property at the time and place of the crimes, or if such cost cannot be satisfactorily ascertained, the cost of replacement of the property within a reasonable time after the crime.

Milhoan argues that the State presented no evidence of the market value of the property at the time of the offense. He asserts that the only evidence regarding value was evidence about the “core value” of the engines. He maintains that this is a notable distinction, explaining that the core value is the trade-in value a dealer will discount on a new item in exchange for the old part, where market value is the item’s purchase price in the open market. Defendant’s argument fails to create a notable distinction between the values. If core value is the value of a rebuildable engine normally determined by a commercial automotive engine rebuilder, and the market for a rebuildable engine is with an engine rebuilder, then core value is, by logic, identical to market value.

Defendant Milhoan asserts that the market value of both engine blocks was $50, citing the testimony given by Midge Lorash, recipient of the 427 bus engine. The State’s witness, Mick Laden, the high school auto mechanics instructor, testified that the core value of the 427 engine was $350 to $400. Laden later testified that the value of the 366 engine was $350. Bill Barnard, the intended recipient of this engine, testified that the engine was worth $75 to $100.

It was solely within the province of the jury to weigh the testimony of each of the experts. Here, the jury weighed the credibility of the testimony of Milhoan’s experts, against the State’s expert. Milhoan’s experts were the intended recipients of the school’s property, and neither knew they had any obligation to repay the school. The State’s expert was the high school auto mechanics instructor. The jury was more than fair in concluding that the theft of the 366 engine was a misdemeanor and the theft of the 427 engine block was a felony.

The second felony conviction, which was the third count in the information, was for a common scheme felony theft. Milhoan argues that the evidence was not sufficient to support his conviction of theft by common scheme, claiming that the crimes were unrelated misdemeanors which the State bootstrapped into a felony charge. For these reasons, Milhoan motioned both for a dismissal and for a directed verdict on this charge. These motions were denied by the District Court. We affirm its action.

There were nineteen related incidents making up the common scheme. The incidents began in the fall of 1980, and continued through April, 1985, and all involved improper use of school district equipment and resources.

Milhoan argues that the evidence was insufficient to support his conviction of theft by common scheme. However, the record is replete with evidence of Milhoan’s thefts from the school district. In the fall of 1980, Milhoan used school district paint and facilities to repaint the First Southern Baptist van. From August, 1980, to April, 1981, he helped himself to the school’s janitorial cleaning supplies and a case of fluorescent light bulbs which he used at his church. When asked by church members how these items were purchased, Milhoan explained that he had the school district take the cost out of his paycheck. School authorities were unaware of this arrangement and never deducted any amount from Milhoan’s check. In November, 1980, approximately five cases of tuna fish disappeared from the school’s supply. Within the same period, the church had a supper for about 40 people at which the main course was tuna fish sandwiches. When Milhoan was asked by church members where he got the food he replied, “The Lord provides fish.” Throughout 1980, Milhoan stocked the church’s “poor pantry” with school district foodstuffs. One church member testified that he estimated there was $800 of school district food in the pantry. Milhoan denied that it was school district property, though evidence indicating it was from any other source was never produced. Throughout the five year period Milhoan regularly fueled his personal and church vehicles with gasoline from the school district’s pump. He apparently considered the gasoline a fringe benefit to which he was entitled because of the amount of his salary. He explained to one former church member that this was his arrangement with the school administrators. Use of the gas pumps was one of the subjects raised in an August, 1983, memo from the school superintendent to Milhoan explicitly prohibiting his use of the gas for non-school vehicles. In November, 1980, Milhoan borrowed (but never returned) 16 to 20 sheets of plywood from the school district when an addition was built onto his church. Around that time he also used the school’s lumber and equipment to rebuild a friend’s tow trailer.

From 1980 to 1985, Milhoan used school equipment and facilities to repair private automobiles for profit. During this period, he assisted in overhauling or completely rebuilding 5 non-school vehicles in the bus barn. In the interim he occupied himself with general repairs to several other private, non-school vehicles, including an Eddy’s Bread delivery truck. He had two crankshafts reground at a transmission shop in Cut Bank and charged the $120 job to the school district although the crankshafts were for non-school vehicles. Finally, in 1985, he “borrowed” approximately $2,000 in school district tools and equipment, including four banquet tables and a 24 foot extension ladder.

Common scheme means “a series of acts or omissions motivated by a . . . common purpose or plan which results in the repeated commission of the same offense or affects the same person or . . . persons or the property thereof.” Section 45-2-101(7), MCA.

For 5 years, Milhoan appropriated goods and services from his employer. He was warned, both orally and in writing, that his activities were unauthorized and prohibited. He knew that what he was doing was totally unacceptable. In sum, the requirements of the common scheme statute were met: there was the repeated commission of the same offense, theft, affecting the school district’s property, and the theft was motivated by a plan to use that property for personal gain. The trial court acted within its discretion when it denied Milhoan’s motion for a directed verdict and refused his motion for dismissal. Substantial evidence supports the District Court’s actions.

Milhoan also raises the issue of whether the State submitted sufficient evidence of value to prove the thefts involved in the common scheme warranted felony status. Both Section 45-2-101(69)(c), and 45-6-301(6), MCA, provide that “amounts involved in thefts committed pursuant to a common scheme or the same transaction . . . may be aggregated in determining the value of the property.” While this Court will not take judicial notice of the fact that the aggregate value of the personalty involved is greater than $300, it is clear in this case that the State produced sufficient uncontradicted evidence to establish this fact. Invoices, business records and direct testimony were presented at trial proving the value of the property taken in the common scheme was far in excess of $300. Milhoan’s claim that the charges for his time be deducted is absurd and petty in light of the substantial evidence presented by the State. Therefore, we again affirm the District Court’s rulings.

Finally, Milhoan claims the District Court erred by giving two of the State’s proposed jury instructions and refusing to give five instructions offered by Milhoan.

Milhoan first challenges the court’s instruction 17, which was the State’s proposed instruction 12. This instruction was based on the statutory definition of “knowingly,” Section 45-2-101(33), MCA, although the exact statutory definition was not used, stating:

“A person acts knowingly
“(1) When he is aware of his conduct; or
“(2) When he is aware under the circumstances, that his conduct constitutes a crime; or
“(3) When he is aware there exists the high probability that his conduct will cause a specific result; or
“(4) With respect to a specific fact when he is aware of a high probability of that fact’s existence.”

Milhoan’s objection is that this instruction gave the jury four options to use in determining whether Milhoan acted knowingly. This Milhoan argues, left the District Court in the dark as to the definition used by the jury to convict Milhoan. To support this objection, Milhoan cites State v. Ferrel (Mont. 1984), [208 Mont. 456,] 679 P.2d 224, 41 St.Rep. 463, a case easily distinguishable as precedent. In Ferrel, the alternate definitions of the word “deprive” were used in an instruction. This Court ruled that the instruction should have been more focused because of the failure of the information to disclose the charges against Mrs. Ferrel. In the case against Milhoan it is clear that the amended information sufficiently detailed the charges against Milhoan. Hence this Court’s concern in Ferrel is not a concern in this case. Further, we note that Milhoan’s argument is not logical in light of our holding in State v. Canon (Mont. 1984), [212 Mont. 157] 687 P.2d 705, 41 St.Rep. 1659. In Canon, this Court rejected the argument that the jury should have been instructed to indicate which alternative mental state, purposely or knowingly, it relied on in convicting the defendant. Milhoan’s argument is merely a refinement of defendant’s assertion in Canon. The District Court’s actions were proper in so instructing the jury.

Milhoan next maintains that the District Court erred by giving an instruction on common scheme, and further erred because the instruction was incomplete. As to the first contention, Milhoan’s activities were properly found by the District Court to have been within a common scheme, as discussed above. As to the second, we note that the alleged “incomplete” instruction given by the District Court was in fact merely a statement of the common scheme statutory definition, Section 45-2-101(7), MCA, and wonder at the lack of thought with which Milhoan’s attorney prepared this argument.

Milhoan complains that his proposed instructions 29 and 31 were improperly refused by the District Court. We hold that the District Court was correct in its refusal as Milhoan was advocating the use of incorrect statements of law. Milhoan’s proposed instruction 29 was based on Montana’s former larceny statute, Section 94-2701, R.C.M. (1947), and was archaic in light of the current state of the law. The trial court gave, without objection, instructions 15 and 16, which set forth the elements of theft to be proven by the prosecution. Milhoan’s proposed instruction 31 was an attempt to set out the mental state required for proof of the offense of theft. However, the language of the proposed instruction is archaic, as the classic “taking” of property was not carried over into the new criminal code. State v. McCartney (1978), 179 Mont. 49, 51-52, 585 P.2d 1321, 1323. Further, the District Court adequately instructed the jury on the required mental state in instructions 11, 13, 14, 17 and 18.

Defendant further argues that the court improperly denied his proposed instruction 16, stating that both act and mental state must be proven to convict the defendant. However, the court properly instructed the jury concerning the issue of act with accompanying intent in its instruction 11, stating “two essential elements in all criminal offenses are a voluntary act and a mental state.” We find that Milhoan’s instruction was cumulative and was properly denied.

Milhoan argues that the court improperly denied his proposed instruction 6, an archaic and improper statement on reasonable doubt. Milhoan’s attorney cites the 1940 case of State v. Cassill (1924), 71 Mont. 274, 229 P. 716, to support his claim, apparently oblivious of State v. Lucero (Mont. 1984), [214 Mont. 334,] 693 P.2d 511, 516, 41 St.Rep. 2509, 2515, where this Court disapproved an instruction similar to the one offered by Milhoan and adopted the language that was used by the District Court instructing Milhoan’s jury.

Milhoan’s final argument is that the District Court erred when it denied his proposed instruction 10, which he claims would have instructed the jury not to convict on the basis of suspicion or speculation. The District Court gave as its first instruction the following pertinent admonition:

“The function of the jury is to decide the issues of fact resulting from the charge or charges filed in this Court by the State and the defendant’s plea of ‘not guilty’ to those charges. This duty you should perform uninfluenced by passion or prejudice. You must not be biased against a defendant because he has been arrested for this offense, or because charges have been filed against him, or because he has been brought before the Court to stand trial. None of these facts is evidence of his guilt, and you are not permitted to infer or to speculate from any or all of them that he is more likely to be guilty than innocent.
“You are to be governed solely by the evidence introduced in this trial and the law as stated to you by me. The law forbids you to be governed by mere sentiment, conjecture, sympathy, passion, prejudice, public opinion or public feeling. Both the State and the defendant have a right to demand, and they do demand and expect, that you will act conscientiously and dispassionately in considering and weighing the evidence and applying the law of the case.” (Emphasis added.)

This instruction was given without objection. Milhoan’s proposed instruction 10 was repetitive and hence unnecessary.

For the reasons stated herein, defendant Milhoan’s conviction is affirmed.

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


text:
    WESTMONT TRACTOR COMPANY, Plaintiff and Appellant, v. CONTINENTAL I, INC., An Idaho Corp., and Charles A. White, an individual, Defendants and Respondents.
    No. 86-246.
    Submitted on Briefs Oct. 23, 1986.
    Decided Dec. 31, 1986.
    731 P.2d 327.

      Datsopoulos, MacDonald & Lind, Richard A. Reep, Missoula, for plaintiff and appellant.
    Boone, Karlberg & Haddon, William L. Crowley, Missoula, for defendants and respondents.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

Plaintiff Westmont Tractor Company appeals from a summary judgment granted to defendant Charles White in the District Court, Fourth Judicial District, Missoula County. We affirm the District Court’s judgment.

The dispute in this case arises over a series of unpaid debts between the plaintiff Westmont Tractor Company and the defendants Continental I, Inc. and Charles White, former president of Continental. In its complaint, Westmont alleged five counts of unpaid indebtedness, plus one count for attorney fees incurred in its collection efforts. A default judgment was entered against Continental I on February 5,1985. A hearing was held April 25, 1985 on defendant White’s alternative motion for summary judgment, and proceedings continued until November 27, 1985 when the District Court entered its findings of fact and conclusions of law, ordering summary judgment in favor of defendant White on all counts. The court also set a hearing for award of attorney fees. Judgment was entered January 28, 1986 awarding White $9,207.00 in attorney fees.

The issues presented for our review are:

1. Whether the District Court erred in granting summary judgment?

2. Whether the District Court erred in awarding attorney fees to the defendant?

In order to determine whether summary judgment was proper, we review the pleadings, affidavits, answers to interrogatories and admissions on file to establish whether any genuine issues of material fact are presented. If there is no genuine issue as to any material fact, then the moving party is entitled to summary judgment as a matter of law. Reagan v. Union Oil of California (Mont. 1984), [208 Mont. 1] 675 P.2d 953, 956, 41 St.Rep. 131, 134.

Westmont first argues it was error for the District Court to make findings of fact, rather than to conclude factual issues remained to be determined. Under Rule 52(a), M.R.Civ.P., findings of fact are unnecessary on summary judgment motions. Lewis v. State, Dept. of Revenue (Mont. 1984), [207 Mont. 361,] 675 P.2d 107, 114, 41 St.Rep. 9, 17. However, an analysis of the findings is useful in determining the correctness of the summary judgment involved. Upper Missouri G & T Electric Co-op., Inc. v. McCone Electric Co-op., Inc. (1971), 157 Mont. 239, 244, 484 P.2d 741, 744. Thus, we will examine the District Court’s findings for evidence of the existence or non-existence of genuine and material factual issues.

We first note the specific claims made in Westmont’s complaint. Count I was a request for a deficiency judgment on an installment sales contract for heavy equipment. A security interest in the contract was perfected April 22, 1974. Collateral for the security interest consisted of the heavy equipment purchased by Continental. Charles White signed the security agreement as an individual guarantor for Continental. When Continental defaulted on its payments under the contract, Westmont repossessed the heavy equipment pursuant to a voluntary repossession agreement executed between itself and Continental. This agreement was signed February 27,1976 by Robert Street, who had replaced Charles White as president of Continental.

Count II of Westmont’s complaint alleged defendants were in default on payments for the lease of a Euclid TS-14 scraper. Westmont and Continental entered into a lease agreement March 24, 1972. Charles White signed this agreement as an individual guarantor. A U.C.C. financing statement was also filed on this lease March 27, 1972. The lease agreement provided for rental payments of $2,500.00 the first month, $2,000.00 for the next twelve months, and $1,650.00 for each month thereafter. Paragraph 12 of the stipulations and conditions of the lease stated that title to the leased equipment remained vested in the owner, and the lessee had no option to purchase the equipment. However, when Continental defaulted on its lease payments, Westmont “purchased” the scraper and credited $13,000.00 to Continental’s delinquent account.

Count’s III and V of Westmont’s complaint are requests for payments on delinquent open accounts. Continental kept open accounts for parts and services (Count III) and for rentals (Count V). Continental owed $39,887.85 on its parts and services open account for the period from April, 1974, to January, 1978. It owed $4,052.39 on its rental account for the period from August, 1974, to February, 1976. In response to defendant White’s request for admissions, Westmont admitted that the debts incurred on these open accounts were corporate liabilities, rather than liabilities personally incurred by Charles White.

Count IV alleges breach of payment on a promissory note signed by Continental and co-signed by White “as an individual.” This note apparently was the security for the refinancing of charges made on the above open accounts prior to February 28, 1974. Westmont filed a security agreement on this note April 10, 1974, listing as collateral the Euclid TS-14 scraper (the same scraper listed as collateral in the lease agreement) and a Euclid waterwagon. A payment of $30,486.39 plus interest at 10% was due on the note on December 10, 1974, and was never paid.

Count VI is a requesl for attorney fees incurred in the attempted collection of the debts.

After reviewing the parties’ pleadings, interrogatories, request for admissions, requests for production, and affidavits, the District Court made findings of fact and conclusions of law as follows:

“FINDINGS OF FACT
“I
“There is no genuine issue as to any material fact.
“II
“Plaintiff and Defendant Corporation entered into a security agreement by which Defendant Corporation granted Plaintiff a security interest in certain corporate property. Defendant White signed the security agreement as individual guarantor.
“HI
“Plaintiff was granted the security agreement to secure corporate obligations set forth in Counts I, II and V [sic] of the Complaint.
“IV
“Plaintiff repossessed and disposed of the secured property.
“V
“Plaintiff did not give Defendant White reasonable notice of the time and place of any public sale or reasonable notice of the time after which any private sale or other intended disposition [of] collateral was to be made as required by Section 30-9-504(3), MCA.
“VI
“Defendant White did not, after default, sign a written statement renouncing or modifying his right to notification.
“VII
“Defendant Corporation maintained an open account with Plaintiff as alleged in Count III.
“VIII
“Defendant White was not a party to the agreement alleged in Count III either individually or as guarantor.
“IX
“Defendant Corporation and Plaintiff entered into an agreement whereby Plaintiff extended Defendant Corporation a line of credit on a rental account as alleged in Count V.
“X
“Defendant White was not a party to the agreement alleged in Count V either individually or as a guarantor.
“From the foregoing Findings of Fact, the Court now makes the following:
“CONCLUSIONS OF LAW
“I
“Defendant White is not legally obligated for the obligations alleged in Counts III and V.
“II
“Since Plaintiff failed to comply with Section 30-9-504(3), MCA with respect to Defendant White, Plaintiff is barred from recovering any deficiency judgment from Defendant White.”

The court then directed a summary judgment in defendant White’s favor.

The purpose of summary judgment is to encourage judicial economy through the prompt elimination of questions not deserving of resolution by trial. Harland, v. Anderson (1976), 169 Mont. 447, 450, 548 P.2d 613, 615. While the initial burden is on the moving party to establish there are no genuine issues of material fact, the burden shifts to the opposing party once the showing has been made that no issues of material fact exists. Id. at 451, 548 P.2d at 615. The party opposing the motion must present material facts in dispute, not ones which are fanciful, frivolous, gauzy or merely suspicions. Silloway v. Jorgenson (1965), 146 Mont. 307, 310, 406 P.2d 167, 169.

Findings of Fact VII through X are essentially uncontroverted. In Counts III and V of the complaint, Westmont seeks to recover the unpaid sums on two open accounts. However, Westmont has admitted in its answers to White’s request for admissions and set of interrogatories that the debts incurred on the accounts were expenses incurred by Continental as a corporation, rather than by White as an individual. Westmont claims it will demonstrate at trial that it relied on oral assurances of payment guaranteed by White personally. However, the court was not required to anticipate further proof at trial. Dooling v. Perry (1979), 183 Mont. 451, 457, 600 P.2d 799, 802. We therefore find summary judgment proper as to Counts III and V of plaintiffs complaint.

We now examine the facts underlying Findings of Fact II through VI. Westmont and Continental entered into three secured transactions. The first was on an installment sales contract for heavy equipment. Continental agreed to purchase a number of pieces of logging equipment, and White signed the agreement as an individual guarantor. Westmont filed a financing statement perfecting its interest in April, 1974, and listed the heavy equipment as collateral.

The second secured transaction was a lease agreement entered into for the “lease” of a scraper. White also signed this agreement as an individual guarantor. Westmont filed a financing statement on the lease agreement, listing the scraper as collateral. Westmont argues the District Court erred in concluding the lease agreement was a lease purchase agreement, rather than leave for trial the issue of whether the lease was or was not a “true lease.” We find ample evidence to support the District Court’s finding that the lease was in fact a sale. First, Westmont itself refers to the agreement as a “lease purchase agreement” in its answers to White’s interrogatories. Second, Westmont vice-president of finance, Walter Kero, in a statement attached to White’s attorney’s affidavit refers to the agreement as a “lease purchase contract.” Finally, Westmont’s own treatment of the collateral strongly implies the transaction was actually a sale. Upon default, Westmont “purchased” the scraper, credited Continental’s account for the “purchase price” of $13,000.00 and then resold the scraper to a third party. In light of these facts, we find no genuine issue of fact existed as to the status of the lease purchase agreement.

The third secured transaction was the execution of a promissory note signed by Continental and Charles White “as an individual.” The note stated, “Each and every party signing or endorsing this note hereby waives presentment, demand, protest and notice of nonpayment thereof, and declares himself bound thereon as a principal and not as a surety.” (Emphasis added.) From the face of the note, it appears White signed expressly as a co-maker rather than as a guarantor. The note was secured by the same TS-14 scraper which secured the lease purchase agreement, and also by a Euclid waterwagon. The note apparently was used to refinance earlier debts on the open accounts noted above.

In February 1976, Westmont and Continental entered into a voluntary repossession agreement. The agreement stated that whereas Continental was in default on its installment sales contract, lease agreement, promissory note and open accounts, and whereas Continental had already voluntarily returned all the equipment listed as collateral for the various debts, Continental and Westmont agreed to have Westmont sell the equipment and apply the proceeds to the debts. Continental waived the requirement that the equipment be sold at public auction and authorized Westmont to dispose of the equipment through private sales. Continental also agreed to pay any deficiency arising from the sales.

The agreement was signed by Robert Street, then president of Continental. A copy of the agreement was never sent to White, and in fact he never saw the agreement until the period of discovery in this action. Westmont does not dispute the fact notice of this agreement was never sent to White. It argues rather a theory of constructive notice, that White should have been aware of this agreement since the final, mutual release between White and Continental was not signed until October, 1975. White has sworn in his affidavit that he took no part in Continental’s business after December, 1974. Westmont has not produced evidence sufficient to rebut this statement. We therefore conclude no material issue of fact exists to dispute the contention that White never received notice of the repossession and sale of the collateral which secured the installment sales contract, the lease purchase agreement or the promissory note.

In Montana, failure of a secured party to provide notice of sale of collateral as required under Section 30-9-504(3), MCA, bars the secured party from obtaining a deficiency judgment from the debtor. Bank of Sheridan v. Devers (Mont. 1985), [217 Mont. 173,] 702 P.2d 1388, 1390, 42 St.Rep. 1107, 1110-11; Wippert v. Blackfeet Tribe (Mont. 1985) [215 Mont. 85,] 695 P.2d 461, 465, 42 St.Rep. 200, 204. White, as an individual guarantor on the installment sales contract and lease agreement, and as a co-maker of the promissory note, was entitled to notice prior to Westmont’s repossession and sale of the collateral. Failure to give notice precludes Westmont from recovering a deficiency judgment on the three secured transactions.

Westmont’s final assignment of error to the District Court is its award of attorney fees to White. Under the provisions of the three contracts, Westmont was entitled to attorney fees in its prosecution of action against the debtor. Under Section 28-3-704, MCA, the contractual right to attorney fees is reciprocal. Northwestern National Bank of Great Falls v. Weaver-Maxwell, Inc. (Mont. 1986) (222 Mont. 336,] 729 P.2d 1258, 43 St.Rep. 1995, 2003. We find no abuse of discretion in the District Court’s award of attorney fees to White.

Judgment of the District Court is affirmed.

MR. JUSTICES HARRISON, GULBRANDSON, WEBER and MORRISON concur.

      . We distinguish here First National Park Bank v. Johnson (9th Cir. 1977), 553 F.2d 599, 602. In that case, the court found that a guarantor was not a debtor for the purpose of waiving the notice requirement of Sections 30-9-501(3) and -504(3), MCA. A debtor is given the opportunity to waive notification of sale after default, but may not waive notice of repossession and sale prior to default. In this case, White was not at any time given an opportunity to waive notification.


author: MR. JUSTICE HUNT

text:
    DENNIS R. HENGEL, Claimant and Respondent, v. PACIFIC HIDE & FUR DEPOT, Employer, and Intermountain Insurance Company, Defendant and Appellant.
    No. 86-257.
    Submitted on Briefs Dec. 11, 1986.
    Decided Dec. 31, 1986.
    730 P.2d 1163.
    E. Craig Daue, Garlington, Lohn & Robinson, Missoula, for defendant and appellant.

      Allen M. McGarvey, Landoe, Brown, Planalp, Kommers & John-stone, Bozeman, for claimant and respondent.
   MR. JUSTICE HUNT

delivered the Opinion of the Court.

This is an appeal from a judgment of the Workers’ Compensation Court awarding Hengel medical expenses, together with reasonable costs and attorney fees. The Court found Hengel was not entitled to the 20% penalty for delay and denial of the claim. Both parties appeal. Intermountain Insurance Company appeals the finding that the medical bills were compensable and Hengel cross-appeals the portion of the judgment denying the penalty. We affirm.

Intermountain raises three issues on appeal:

1. When medical science has been unable to determine the cause of a disease, but has been able to eliminate the factor alleged by a claimant as a cause of the disease, can the Moffett /Conway rationale be used to make such claimant’s disease compensable under the Workers’ Compensation Act merely because the true cause of the disease remains unknown?

2. Can a Workers’ Compensation claimant prove, by mere medical possibility, that his industrial injury aggravated a subsequent, independent disease?

3. If the Court denies Intermountain Insurance Company’s appeal, is there substantial credible evidence supporting the Workers’ Compensation Court’s refusal to enter a penalty in this case?

Hengel raises one issue on cross-appeal. Did Intermountain Insurance Company unreasonably delay and deny payment of medical expenses to Hengel?

Dennis Hengel was injured on June 11, 1982 in the course of his employment with Pacific Hide and Fur Depot. Some metal channels slipped off a forklift toward Hengel, and when he grabbed them, he injured his back. Intermountain accepted liability for the injury and paid benefits on the claim.

Following his back injury, Hengel has suffered from continual pain. The pain increases with his physical activity, radiating from his back into his legs. Prior to the injury, Hengel was physically active. He jogged, hiked and skied. After the injury he has been unable to do these things. He blames his inability to participate in these activities for several failed relationships. Hengel’s roommate testified that after the injury Hengel’s personality changed and he became short-tempered, irritable, angry and depressed. Hengel was subject to additional stress because his economic situation worsened. His disability benefits were approximately one-half his pre-injury earnings. His frustrations mounted when his doctors could not “cure” his back injury. Hengel was optimistic that he would recover until January, 1983, then he became frustrated and tense due to his lack of recovery.

At the time of the injury, Hengel did not have ulcerative colitis. Hengel’s first symptom of ulcerative colitis occurred in March, 1983. Tests at that time showed no active colitis.

In December, 1983, Hengel returned home for the holidays. While there, he had his first severe colitis attack. By February, 1984, Hengel’s colitis was serious enough to require surgery. In two separate operations, Dr. Dozois at the Mayo Clinic performed a colectomy and removed the mucosa of the lower rectum. Hengel incurred over $51,900.00 in medical bills. Hengel advised Intermountain that it was liable for the bills because Hengel’s ulcerative colitis was “caused by stress from the strain of worrying about his problems.”

Intermountain denied liability for the ulcerative colitis since the medical evidence did not demonstrate “any specific cause/effect relationship between ulcerative colitis and major stress.”

The Workers’ Compensation Court held Hengel’s ulcerative colitis is the result of stress occasioned by his industrial accident. The Court stated that although medical science does not know the cause of ulcerative colitis, all the medical experts who testified agreed that stress could exacerbate ulcerative colitis. The Court stated the claimant could not be expected to prove a medically undemonstrable causal connection between stress and ulcerative colitis. However, the Court held Hengel met his burden of proof by showing his increased stress level coincided with the development of ulcerative colitis, and that medical evidence recognized a relationship between stress and ulcerative colitis. The Court relied on Conway v. Blackfeet Indian Developers, Inc. (Mont. 1983), [205 Mont. 459,] 669 P.2d 225, 40 St.Rep. 1427 and Moffett v. Bozeman Canning Co. (1933), 95 Mont. 347, 26 P.2d 973.

In Moffett, the claimant was injured while stacking cases of canned peas. Within three weeks he had a tremor in his left foot which spread to both legs, his tongue and head. He was diagnosed as having Parkinson’s disease. The doctors who testified stated that they did not know what caused the disease but conjectured that it could theoretically be caused by trauma, infection, or emotion. The Court noted that the claimant must prove the injury was the proximate cause of his present condition. However, the record was devoid of direct evidence of proximate cause, not because the claimant had failed to prove his case but because the exact cause of the disease was unknown to medical science. The Court held “the rule that the claimant must show that the injury was the proximate cause of the affliction does not require demonstration of an undemonstrable proposition, but merely that he produce sufficient evidence ... to cause in the unprejudiced mind a conviction that such was the fact.” Moffett, 95 Mont. at 360, 26 P.2d at 978.

In Conway, the claimant caught his arm on the door of the backhoe and hung suspended from his arm for a few minutes before dropping about 9 feet to the ground. The soreness from the accident changed to numbness in his fingers, toes, and arms. Gradually, he began to experience weakness in one side and eventually was diagnosed as having multiple sclerosis. The issue before the Court was whether the injury caused the MS. Two doctors testified that there was no causal effect between MS and the injury and one doctor testified that the injury precipitated the outward symptoms of the underlying MS. We held the Moffett rationale is valid in cases where medical science is powerless to be of direct aid and in those cases the Workers’ Compensation Court should look to indirect evidence to establish causation.

The first issue Intermountain raises on appeal is whether the Moffett and Conway rationale should be applied in this case. Inter-mountain contends that medical science has ruled out stress as a cause of ulcerative colitis, and that claimant should not be able to recover merely because the true cause of the disease remains unknown. The cause of ulcerative colitis is currently unknown to medical science. All of the doctors who testified in the case agreed that stress can exacerbate symptoms of the disease. One doctor stated that he was “unaware of any specific cause/effect relationship between ulcerative colitis and major stress.” One doctor stated that he personally did not believe that stress caused ulcerative colitis. Another stated that there seemed to be a possible cause and effect relationship. Still another stated ulcerative colitis could be aggravated or possibly initiated by stress. Intermountain contends that the statement of one doctor, Dr. Dozois, should be taken over the statements of other doctors because Dr. Dozois has more experience with ulcerative colitis than the other doctors. Dr. Dozois testified that he believes stress does not cause ulcerative colitis. While Dr. Dozois is exceptionally well-qualified, he is also a surgeon, not an epidemiologist. And on review of the record it is clear to this Court as it was in Lamb v. Missoula Imports, Inc. (1984), [211 Mont. 360,] 684 P.2d 498, 41 St.Rep. 1414, that medical science remains sufficiently undeveloped in the area of stress and ulcerative colitis to rely on any one witness’ statement as dispositive. We therefore hold the Moffett/ Conway rationale is applicable to this case, and the Workers’ Compensation Court did not err in holding the claimant satisfactorily met his burden of proof by showing indirect evidence that stress occasioned by claimant’s industrial accident caused him to develop ulcerative colitis. This conclusion is supported by the fact that claimant developed ulcerative colitis only after suffering major stress as a result of his back injury.

Next, Intermountain raises the issue of the burden of proof as to aggravation of a condition following an industrial injury. Hengel contends the stress occasioned by the accident not only caused but aggravated his ulcerative colitis as well. The evidence clearly shows that Hengel did not have ulcerative colitis until after the accident. This Court has not decided the issue of whether aggravation of a condition arising after the accident is compensable under Montana’s Workers’ Compensation Act. We do not reach this issue because we have already ruled that Hengel was entitled to compensation for the medical bills incurred as a result of his colitis.

The final issue raised by Intermountain and only issue raised by Hengel is whether he should have been awarded a 20% penalty pursuant to Section 39-71-2907, MCA. That section states:

“39-71-2907. Increase in award for unreasonable delay or refusal to pay. When payment of compensation has been unreasonably delayed or refused by an insurer, either prior or subsequent to the issuance of an order by the workers’ compensation judge granting a claimant compensation benefits, the full amount of the compensation benefits due a claimant, between the time compensation benefits were delayed or refused and the date of the order granting a claimant compensation benefits, may be increased by the workers’ compensation judge by 20%. The question of unreasonable delay or refusal shall be determined by the workers’ compensation judge, and such a finding constitutes good cause to rescind, alter, or amend any order, decision, or award previously made in the cause for the purpose of making the increase provided herein.”

Intermountain contends its denial of benefits was reasonable. Hengel contends the denial was unreasonable and motivated by economic concerns and a desire to “wear out” the claimant. We begin with the standard of review. The reasonableness of an insurer’s denial is a question of fact for the lower court and it will not be disturbed on appeal if supported by substantial credible evidence. Wight v. Hughes Livestock Co., Inc. (Mont. 1981), 634 P.2d 1189, 38 St.Rep. 1632. In this case there is substantial credible evidence of a legitimate dispute as to the causal connection between the injury and claimant’s present disability. The Workers’ Compensation Court did not err in refusing to assess the penalty.

Affirmed.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES MORRISON, HARRISON, SHEEHY, WEBER and GULBRANDSON concur.


text:
    ANNE PETRIK, Plaintiff and Appellant, v. ROBERT COLBY, D.D.S., Defendant and Respondent.
    No. 86-395.
    Submitted on Briefs Oct. 30, 1986.
    Decided Dec. 31, 1986.
    730 P.2d 1167.
    Eula Compton, Bozeman, for plaintiff and appellant.
    Berg, Coil, Stokes & Tollefsen, Don M. Hayes, Bozeman, for .defendant and respondent.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

Anne Petrik appeals a decision by the District Court of the Eighteenth Judicial District, Gallatin County, granting defendant-respondent Robert Colby’s motion to dismiss her action for lack of personal jurisdiction.

The issue raised on appeal is whether the District Court had personal jurisdiction over a defendant who had no contact with the State but who knew or should have known that his intentional act would cause injury in this state.

In 1978, Dr. Robert Colby, a dentist who lives and practices in Tappan, New York, performed a root canal procedure on fellow New Yorker Anne Petrik. During the procedure, Dr. Colby broke a dental file, leaving the tip in Petrik’s jaw. Apparently Dr. Colby never informed Petrik of the complication. Five years after the root canal operation Petrik moved to Montana.

After she moved to Montana in 1983 the root canal work developed complications. As a result she brought suit in the Montana District Court against Dr. Colby in April, 1986, alleging damages for past and future dental expenses, lost teeth, disfigurement, and severe pain and suffering. She alleged these injuries to be the proximate result of Dr. Colby’s failure to warn her of the broken file tip immediately after the root canal procedure, and his concealment of the infection it eventually caused. Dr. Colby was served with summons and complaint under the long-arm provisions of Rule 4B(1), M.R.Civ.P.

In May, 1986, Dr. Colby successfully challenged the Gallatin District Court’s in personam jurisdiction. Ms. Petrik is appealing the District Court’s order of dismissal, arguing that in personam jurisdiction is reasonable because Dr. Colby committed an intentional tort and was aware that injury would accrue in Montana. We are unwilling to adopt Ms. Petrik’s far-reaching interpretation of the state’s long-arm statute, Rule 4B(1), M.R.Civ.P., and therefore affirm the District Court’s order.

There is a two-step analysis used to determine whether personal jurisdiction exists to allow an action to be maintained in the courts of this state. We applied this test in May v. Figgins (1980), 186 Mont. 383, 386, 607 P.2d 1132, 1134, where we cited the process set forth in 2 Moore’s Federal Practice, Section 4.41-1 [1] at 4-421:

“The court first must look to the State statute to determine whether the statute provides for the exercise of jurisdiction under the particular facts of the case, and second, the court must determine whether it would offend due process to assert jurisdiction.”

Appellant Petrik argues that where an intentional tort is involved (and she contends concealment of the breaking of the file was fraudulent misrepresentation, an intentional tort), and where a defendant knows that injury from that tort will accrue in the forum state, the forum state may take personal jurisdiction regardless of the presence or absence of minimal contacts. She admits that Dr. Colby was not personally found within the state so as to establish jurisdiction. However, she contends that it is sufficient for purposes of establishing jurisdiction that Dr. Colby’s acts in New York state were intentional and resulted in the accrual of a tort within Montana. In other words, she argues that if Dr. Colby’s act was intentional, then the exercise of jurisdiction comports with due process (and traditional notions of fair play and substantial justice) simply because the act was intentional.

The May v. Figgins rule requires that we first look to our statute to see if it provides for the exercise of personal jurisdiction under our facts. Montana’s long-arm statute states in pertinent part:

“. . . any person is subject to the jurisdiction of the courts of this State as to any claim for relief arising from the doing personally, through an employee, or through an agent, of any of the following acts:
“(b) the commission of any act which results in accrual within this State of a tort action.”

Rule 4B(1), M.R.Civ.P.

On this point, the District Court held that the tortious act accrued in Montana, thereby satisfying the first of the two May requirements. For the purposes of this case only, we accept the District Court’s finding.

It is the second of the May requirements that prevents Montana courts from exercising personal jurisdiction. The issue this second requirement raises is whether the exercise of Montana jurisdiction is consistent with the protections afforded by the Due Process Clause, that is, whether the exercise of jurisdiction is fair and reasonable and comports with the traditional due process notions of fair play and substantial justice.

The test this Court has adopted to measure the reasonableness of exercising the state’s long-arm statute was developed by the Ninth Circuit Court of Appeals in Data Disc, Inc. v. Systems Technology Assoc. (9th Cir. 1977), 557 F.2d 1280, 1287 and was recently applied by this Court in Simmons v. State of Montana (Mont. 1983), [206 Mont. 264,] 670 P.2d 1372, 1376, 40 St.Rep. 1650, 1652, and Jackson v. Kroll, Pomerantz and Cameron (Mont. 1986), [223 Mont. 161,] 724 P.2d 717, 43 St.Rep. 1622, 1626.

The Data Disc analysis requires examination of seven basic factors to determine if exercise of in personam jurisdiction is reasonable: 1) The extent of defendant’s purposeful interjection into Montana; 2) The burden on defendant of defending in Montana; 3) The extent of conflict with the sovereignty of defendant’s state; 4) Montana’s interest in adjudicating the dispute; 5) The most efficient resolution of the controversy; 6) The importance of Montana to plaintiff’s interest and effective relief; and, 7) The existence of an alternative forum.

The only contact Dr. Colby has had with the State of Montana is that his former patient, Anne Petrik, moved to Montana five years after he performed a root canal operation on her. Dr. Colby lives and practices in New York. The root canal work was done in New York. Anne Petrik did not reside in Montana until 5 years after having had the dental procedure. There are no allegations that Dr. Colby has done business in Montana, has assets in Montana, has maintained an office in Montana, has solicited business in Montana, has treated Anne Petrik while she has been in Montana, or has had any telephone conversations or corresponded with Anne Petrik while she has been in Montana. There is no allegation that Dr. Colby has had any contact with Montana. There are simply no facts to indicate that he has purposefully interjected himself in Montana or purposely availed himself of the privilege of conducting activities here. Finally, there is no allegation that justice cannot be had in New York.

The burden on defendant of defending in Montana and plaintiff’s burden of proving the alleged intentional tort of fraudulent misrepresentation both suggest that New York state is the most reasonable forum for this action. It offends this Court’s sense of the traditional notions of fair play and substantial justice to require Dr. Colby to defend this action in Montana. The only contact which Ms. Petrik asserts Dr. Colby has had with Montana is that five years after the root canal work was done he knew that Ms. Petrik was moving to Montana and should have known that there would be some harmful effect in Montana.

The reasonableness considerations are not unlike those in Wright v. Yackley (9th Cir. 1972), 459 F.2d 287. In Wright, Yackley was a South Dakota doctor who treated Wright while Wright was living in South Dakota. Wright moved from South Dakota to Idaho and sought to have prescriptions given by Yackley refilled in Idaho. This required confirmation of the prescriptions from Yacldey, which he gave by furnishing copies of the original prescriptions. Wright alleged injury by the use of the drugs and brought suit in Idaho. The Federal District Court for Idaho dismissed for lack of jurisdiction. The Court of Appeals for the Ninth Circuit affirmed the District Court’s action explaining:

“[t]he idea that tortious rendition of such services is a portable tort which can be deemed to have been committed wherever the consequences foreseeably were felt is wholly inconsistent with the public interest in having services of this sort generally available.” Wright v. Yackley (9th Cir. 1972), 459 F.2d at 289.

The Court of Appeals balanced three factors to reach its determination that in personam jurisdiction was unreasonable. The first factor is the amount of contact between the defendant and the forum state. Wright, 459 F.2d at 290-291. As applied to Dr. Colby, it is clear that there was no systematic or continuous or indeed any effort on the part of the doctor to provide services in Montana. The second factor is “whether the nature of the contacts mean they were normally grounded outside of any relationship with the forum state.” 459 F.2d at 290. This factor is not met, as the residence of Ms. Petrik in Montana was incidental and wholly unrelated to the benefits provided by Dr. Colby in New York. Dr. Colby did not purposely avail himself in any way of the privilege of conducting activities within Montana. Hanson v. Denckla (1958), 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283.

The final factor is whether the forum state’s natural interest in the protection of its citizens is countered by an interest in access to medical services whenever needed. Id. This factor is also not applicable. We admit that Montana has a natural interest in protecting its citizens from injury by out-of-state doctors. The state also wants to insure that there are medical services to meet its citizens’ needs wherever they go. However, in the instant case, the dental service was provided by a New Yorker, Dr. Colby, to a New Yorker, Anne Petrik. Anne Petrik was not a Montanan who traveled to New York for the dental work. Here, Anne Petrik moved to Montana five years after the work was performed, hence the protection versus access trade-off is not raised.

In sum, the state interest does not, in view of the Wright and Jackson factors suffice to support exercise of in personam jurisdiction.

The decision of the District Court is affirmed.

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