author: MR. JUSTICE HUNT

text:
    In re the MARRIAGE OF CAROL A. SHIRILLA, Petitioner and Respondent, and STEVEN J. SHIRILLA, Respondent and Appellant.
    No. 86-36.
    Submitted on Briefs Sept. 11, 1986.
    Decided Jan. 13, 1987.
    Rehearing Denied March 4, 1987.
    732 P.2d 397.

      Charles A. Graveley, Helena, for respondent and appellant. Johnson, Skakles & Kebe, Greg J. Skakles, Anaconda, for petitioner and respondent.
   MR. JUSTICE HUNT

delivered the Opinion of the Court.

This is an appeal by Steven Shirilla from the findings of fact and conclusions of law and judgment entered by the District Court of the Third Judicial District, Powell County, granting dissolution of the parties’ marriage and ordering child support, a property settlement and attorney fees. We affirm and modify the judgment.

Steven raises six issues on appeal. (1) Whether the trial court erred when it determined the relative contribution of the parties to the acquisition of marital assets. (2) Whether the trial court erred when it determined that the entire support of the minor child was borne by Carol. (3) Whether the trial court erred when it required Steven to pay the attorney fees incurred by Carol. (4) Whether the trial court erred in its award of sole custody of the minor child to Carol. (5) Whether the trial court erred in its determination of child support to be paid by Steven, and in making that support retroactive. (6) Whether the trial court erred in its division of marital property by awarding the house to Carol with Steven receiving no benefit therefrom until the minor child reaches majority.

Steven and Carol Shirilla were married in February, 1982. At the time of the marriage, Steven was a physician at Deer Lodge Clinic who makes approximately $56,990 per year and Carol was a medical technologist at Powell County Memorial Hospital who makes $21,400 per year. One child was born during the marriage, Beth Ann, who was born July 6, 1983. In October, 1983, the parties separated and Steven established his residence on the grounds at Galen State Hospital. Steven’s housing is provided for him on the hospital grounds. He pays $186 a month for rent which includes utilities.

A petition for dissolution was filed in October, 1983. From the date of the separation, Steven paid one-half the house payment ($330) and $200 per month in child support. In July, 1984, the Court entered an order dissolving the marriage and retaining jurisdiction over custody, support and the property division. As of July, 1984, Steven stopped making house payments and paying child support. Since Carol only made one-half the house payment and Steven was not making the other half, the Bank threatened to foreclose the mortgage. Carol had to borrow over $8,000 from her relatives to bring the payments current to prevent foreclosure.

In October, 1985, following a hearing on the issues the District Court entered its findings of fact, and conclusions of law. The Court granted sole custody of Beth Ann to Carol, with reasonable visitation for Steven. The court also granted Carol use of the family residence until the minor child reached the age of majority, and required each party to make one-half the house payment. Steven was directed to pay support in the amount of $635 per month, and was ordered to pay the attorney fees incurred by Carol. The District Court also made a division of other assets acquired during the marriage which is not an issue on this appeal.

At the outset, we note that ferreting out appellant’s arguments was a difficult and time consuming task because appellant had listed issues presented for review that were not briefed and failed to brief some issues that were raised. Counsel are admonished to conform their briefs to Rules 23 through 27, M.R.App.Civ.P.

The first issue on appeal is whether the court erred when it determined the relative contribution of the parties to the acquisition of marital assets and failed to determine the net worth of the marital estate. While the issue is phrased as above in the appellant’s brief, the argument refers to the fact that Steven brought a higher net worth into the marriage and that he wanted the house sold and the balance divided.

In reviewing the judgment of the court below we note the standard of review in Marriage of Gallinger and Weissman (Mont. 1986), [221 Mont. 463,] 719 P.2d 777, 780, 43 St.Rep. 976, 979:

“In dividing property in a marriage dissolution the district court has far reaching discretion and its judgment will not be altered without a showing of clear abuse of discretion. The test of discretion is whether the trial court acted arbitrarily without employment of conscientious judgment or exceeded the bounds of reason resulting in substantial injustice.”

Also see, In Re Marriage of Wessel (Mont. 1986), [220 Mont. 326,] 715 P.2d 45, 50, 43 St.Rep. 405, 411; citing Becker v. Becker (Mont. 1985) , [218 Mont. 229,] 707 P.2d 526, 528, 42 St.Rep. 1541, 1543.

While it may be true that Steven brought more assets into the marriage, the statute requires the marital property be “equitably apportion [ed] between the parties . . . however and whenever acquired and whether the title thereto is in the name of the husband or wife or both . . .” Section 40-4-202, MCA. The court is not bound to restore the parties to their premarital status. In Re Marriage of Keepers (Mont. 1984), [213 Mont. 350,] 691 P.2d 810, 41 St.Rep. 2163.

Next, Steven contends that the family home should have been sold and the profits divided. The District Court ordered Steven to continue paying one-half the house payments until the child reaches 18. At that time the house will be sold and the first $2,000 goes to Steven, the next $1,336 to Carol and the balance will be divided equally. This Court has in the past approved of having both parties contribute to maintain the family home until such time as the minor children are grown. Marriage of Ryan (Mont. 1986), [222 Mont. 188,] 720 P.2d 691, 43 St.Rep. 1163; Marriage of Hereford (Mont. 1986) , [223 Mont. 31,] 723 P.2d 960, 43 St.Rep. 1508. The District Court did not abuse its discretion in making such an order.

The second issue on appeal is whether the court erred when it determined the entire support of the minor child was borne by Carol since July, 1984. The District Court found:

“That since July of 1984, [Steven] has made no payment for the support and maintenance of the minor child, Beth Ann Shirilla, and her entire support has been provided by [Carol] herein.”

Steven alleges he has been paying $200 a month into a trust fund for Beth Ann. This may be so, but the fact remains that he has made no payments to Carol so she has been providing for all of Beth Ann’s support. Steven argues the Court erred by making child support retroactive to the date of the last payment in July, 1984. He contends this violates Section 40-4-208, MCA, which allows a court to modify support only as to future payments, not retroactively. Section 40-4-208, MCA, applies only to actions to modify existing support payments. This Court has held that once the issue of child support is placed before the court by the pleadings, the court has jurisdiction to award child support payments retroactive to the time of the separation of the parties. Marriage of DiPasquale and Getz (Mont. 1986), [220 Mont. 497,] 716 P.2d 223, 43 St.Rep. 557. The District Court did not err in making child support payments retroactive to the date of dissolution.

The third issue on appeal is whether the District Court erred when it ordered Steven to pay Carol’s attorney fees. Section 40-4-110, MCA, allows the District Court to award attorney fees after considering the financial resources of both parties. An award of attorney fees under the statute is “largely discretionary with the District Court and we will not disturb its judgment in the absence of an abuse of that discretion.” In Re the Marriage of Johnston (Mont. 1986), [223 Mont. 383,] 726 P.2d 322, 326, 43 St.Rep. 1808, 1813, quoting In Re Marriage of Milanovich (Mont. 1985), [215 Mont. 367,] 697 P.2d 927, 929, 42 St. Rep. 436, 439; Talmage v. Gruss (1983), 202 Mont. 410, 412, 658 P.2d 419, 420. The record indicates that the financial resources of both parties were considered. The District Court did not abuse its discretion in awarding attorney fees to Carol.

Next, Steven contends the District Court erred by awarding sole custody of Beth Ann to Carol. The District Court made these findings of fact on custody.

“14. That following the separation of the parties herein, [Steven] voluntarily restricted his visitation with the minor child, Beth Ann, upon the advice of Counsel and of Dr. Timothy J. Casey, Psychologist. That subsequently, visitation was increased as the child became somewhat older and was had on Tuesdays, Thursdays and Saturdays, outside the residence of [Carol].
“15. That during employment periods, [Carol] has made adequate and substantial arrangements for child caré and the testimony indicates that the child relates well with the present babysitting arrangements, and, likewise, relates well during visitation periods with [Steven]. [Steven], likewise, agrees that [Carol] is taking excellent care of the child, and [Carol], likewise, acknowledges the good relationship existing between [Steven] and his minor daughter.
“16. That, no application has ever been made to this Court for a joint custody arrangement, and in view of [Steven’s] unwillingness to assume any responsibility for payments upon the residence in which the child has been living with [Carol], and his unwillingness and failure to provide support for the child since July of 1984, the Court deems joint custody inappropriate at this time.”

The District Court’s decision is presumed correct and will be upheld unless a clear abuse of discretion is shown. In Re the Marriage of Rolfe (Mont. 1985), [216 Mont. 39,] 699 P.2d 79, 42 St.Rep. 623. “The responsibility of deciding custody is a delicate one which is lodged with the district court. The judge hearing oral testimony in such a controversy has a superior advantage in determining the same, and his discretion ought not to be disturbed except on a clear showing of abuse of discretion.” In Re Marriage of Obergfell (Mont. 1985), [218 Mont. 83,] 708 P.2d 561, 563, 42 St.Rep. 1414, 1417; Gilmore v. Gilmore (1975), 166 Mont. 47, 51, 530 P.2d 480, 482.

In determining custody, the court is bound to consider all relevant factors including:

“(1) the wishes of the child’s parent or parents as to his custody;
“(2) the wishes of the child as to his custodian;
“(3) the interaction and interrelationship of the child with his parent or parents, his siblings, and any other person who may significantly affect the child’s best interest;
“(4) the child’s adjustment to his home, school, and community; and
“(5) the mental and physical health of all individuals involved.” Section 40-4-212, MCA.

In this case, the District Court considered the relevant factors and decided sole custody should be with the mother. The District Court made specific findings on why joint custody was not granted. The District Court did not abuse its discretion.

Next, Steven contends the District Court erred in its determination of child support. Carol testified at the hearing that the needs of the child are approximately $875 per month.

That includes:

$360 one-half the house payment & utilities 100 food
45 transportation
55 clothing
40 diapers
258 child care

Steven did not introduce any evidence or present testimony to refute these figures at the hearing. The District Court applied the Carlson formula and determined the ratio of Carol’s earnings to Steven’s earnings was 27.4% to 72.6%. Therefore the District Court found Carol should contribute $240 per month to the needs of the child and Steven should contribute $635 per month.

We approve of the District Court’s use of the Carlson formula and apportionment of the needs of the child between the incomes of the parents. However, the District Court made a slight mathematical error in totaling the needs of the child. The figure should have been $858 rather than $875. Applying the same ratio, Carol should contribute $235 per month for Beth’s support and Steven should contribute $623 per month. Pursuant to Section 33-2-204, MCA, we hereby modify the judgment of the Third Judicial District, Powell County, entered October 18, 1985 and direct that judgment be entered ordering Steven to pay child support in the sum of $623 per month rather than $635 per month. All other provisions of the judgment are affirmed.

The last issue on appeal is whether the District Court erred in its division of marital property by awarding the house to Carol with Steven receiving no benefit therefrom until minor child reaches majority. We have already addressed this issue and found no error.

Affirmed as modified.

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


source: Caselaw Access Project

license: Public Domain

text:
    ALLEN L. McALEAR, Plaintiff and Appellant, v. DEBORAH KASAK, Defendant and Respondent.
    No. 86-255.
    Submitted on Briefs Nov. 13, 1986.
    Decided Jan. 13, 1987.
    Rehearing Denied Feb. 19, 1987.
    731 P.2d 908.
    Allen L. McAlear, Bozeman, for plaintiff and appellant.
    James P. Reynolds, Helena, for defendant and respondent.
   MR. JUSTICE HUNT

delivered the Opinion of the Court.

This is an appeal from an order granted by the District Court of the Fourteenth Judicial District, Meagher County, changing venue in a tort action. Plaintiff appeals. We affirm.

There is one issue on appeal: Did the District Court err in changing venue?

Plaintiff Allen McAlear filed an action for defamation against Deborah Kasak. Kasak had worked briefly in McAlear’s law office. She left her employment and filed an action against McAlear with the Human Rights Commission alleging sexual harassment.

After filing her complaint with the Human Rights Commission, she filed a wage complaint with the Labor Standards Division. In explaining her reason for quitting or discharge, she set forth her allegations of sexual harassment by McAlear.

McAlear, pro se, brought an action against her for defamation based on the allegations in her wage complaint. McAlear brought the suit in Meagher County. Kasak, who currently lives in Pennsylvania, filed a motion to dismiss and a motion for change of venue. The District Court granted the motion for change of venue and moved the action to the Eighteenth Judicial District, Gallatin County, where McAlear’s office is located, and, where Kasak worked while she was employed by McAlear. The district judge did not rule on the motion to dismiss. McAlear appeals the order changing venue.

McAlear contends that because Kasak is a nonresident of the State of Montana, he may select any county as the site for his action, and she may not object. He relies on Section 25-2-118, MCA, which states:

“Unless otherwise specified in this part:
“(1) except as provided in Subsection (3), the proper place of trial for all civil actions is the county in which the defendants or any of them may reside at the commencement of the action;
“(2) if none of the defendants reside in the state, the proper place of trial is any county the plaintiff designates in the complaint;
“(3) the proper place of trial of an action brought pursuant to Title 40, chapter 4, is the county in which the petitioner has resided during the 90 days preceding the commencement of the action.”

We wish to call attention to the first line of the statute, “Unless otherwise specified in this part. . .” The remainder of part 2 deals with the proper place of venue for specific types of actions. “Defamation is made up of the twin torts of libel and slander . . .” Prosser, Law of Torts, at 737 (5th Ed. 1984). Section 25-2-122, MCA, deals specifically with tort actions. It provides:

“The proper place of trial for a tort action is: (1) the county in which the defendants, or any of them, reside at the commencement of the action; or (2) the county where the tort was committed. If the tort is interrelated with and dependent upon a claim for breach of contract, the tort was committed, for the purpose of determining the
115 proper place of trial, in the county where the contract was to be performed.”

In this case, the defendant does not reside within the State of Montana. The tort was committed, if at all, in Bozeman where McAlear has his office and where the alleged damage to his reputation occurred. It is unclear why the action was filed in Meagher County. It apparently has no relation to any person or occurrence in this action.

The general rule is that the defendant is entitled to be sued in the county of his residence. Section 25-2-118(1), MCA; Letford v. Kraus (Mont. 1983), [206 Mont. 493,] 672 P.2d 265, 40 St.Rep. 1802. The defendant in this case is a nonresident of the State of Montana and may be sued in any proper county. Tassie v. Continental Oil Corp. (D. Mont. 1964), 228 F.Supp. 807. However, we have never held that a plaintiff has an absolute choice of forum. A tort action may be brought in either the county of the defendant’s residence, or the county where the tort occurred. Siefert v. Gehle (1958), 133 Mont. 320, 323 P.2d 269. Where plaintiffs file the action in an improper county, defendants may change venue to any proper county. Dalton v. Carr and Sons (D. Mont. 1986), 630 F.Supp. 726. In this case, plaintiff chose a county that is an improper site for venue. Defendant moved for and received a change of venue to a proper county: the site where the tort occurred. The District Court did not err.

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


text:
    In re the MARRIAGE OF JAMES BERNARD PREVOST, Petitioner and Respondent, and DENA KAY PREVOST, Respondent and Appellant.
    No. 86-359.
    Submitted on Briefs Oct. 20, 1986.
    Decided Jan. 13, 1987.
    731 P.2d 344.

      T.R. Halvorson, Sidney, for respondent and appellant.
    Phillip N. Carter, Sidney, for petitioner and respondent.
   MR. JUSTICE HUNT

delivered the Opinion of the Court.

This is an appeal from an order of the District Court, Seventh Judicial District, Richland County modifying visitation between two parents and their children. The mother appeals the order. We affirm.

The issues raised are as follows:

1. Does the absence of a verbatim record necessitate reversal and remand?

2. Does the absence of findings of fact showing how the order is in the best interests of the children necessitate reversal and remand?

3. Is weekend visitation between the father and daughter without weekend visitation between the mother and son in the best interests of the children?

4. Is summer visitation between the father and daughter in 1986 without the possibility of summer visitation between the mother and son in the same year in the best interests of the children?

The parties were divorced in 1985. They had two daughters and a son. The mother was granted custody of the two daughters and the father was granted custody of the son. Each was granted “reasonable” visitation with the child or children not in their custody. In June, 1986, the father filed a motion to modify visitation privileges. The court held a hearing and heard testimony from the mother and the father on visitation. No transcript of this hearing was made. The court issued an order granting the father visitation with one daughter as follows:

“a. Two weekends per month, beginning at 7:00 o’clock P.M. on Friday and ending at 7:00 o’clock P.M. on Sunday night. This particular visitation shall be modified if the petitioner is not at the home of the respondent by 9:00 o’clock P.M. on the Friday night. If he is not his visitation will not start until 9:00 o’clock on Saturday morning.
“b. On alternating holidays, which, for this purpose, shall be defined as New Year’s Day, Easter Sunday, Memorial Day, July 4th, Labor Day, Thanksgiving Day, and Christmas Eve/Christmas Day.
“c. For six continuous weeks in the summer. This period of time shall be the six weeks at the end of the summer and just prior to the child beginning school.”

He was granted visitation with the other daughter at all times and places that she desires. The mother was granted visitation with her son as follows:

“a. Six weeks in the summer. This period shall be during the beginning of the summer vacation period, just after school has let out.
“b. Alternating holidays, which are defined as the same as those above.”

The order modifying visitation was signed by the judge, then there was a notation “APPROVED as to content and form:” and the order was signed by the attorney for petitioner and the attorney for respondent.

The issue on appeal is actually whether the order in question was truly an order which may be appealed or whether it is a stipulation by both parties that was adopted by the court. Since both parties, through their attorneys signed the order, we hold that the document was a stipulation which was adopted by the court. “It is improper to raise an issue upon appeal as to a question of law or fact after the parties have entered into a stipulation as to that law or fact.” Penn v. Burlington Northern, Inc. (1980), 185 Mont. 223, 228, 605 P.2d 600, 604. We hold the first three issues on appeal have not been properly raised because appellant agreed to the term of the modified visitation order. We hold the last issue is moot because the visitation for the summer of 1986 has already occurred.

Affirmed.

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


author: MR. JUSTICE WEBER

text:
    MONTANA AGRI-CHEMICAL, INC., a Montana corporation, Plaintiff and Respondent, v. GERALD JACOBSON, Defendant and Appellant.
    No. 86-389.
    Submitted on Briefs Nov. 13, 1986.
    Decided Jan. 13, 1987.
    731 P.2d 910.
    Jerry R. Bechhold, Bozeman, for defendant and appellant.
    Morrow, Sedivy & Bennett, Lyman H. Bennett, III, Bozeman, for plaintiff and respondent.
   MR. JUSTICE WEBER

delivered the Opinion of the Court.

Mr. Jacobson, appearing as a pro se defendant, obtained a judgment in the Justice Court for Gallatin County on Montana AgriChemical’s complaint against him. He then obtained an attorney who moved to file this counterclaim in Gallatin County District Court. The District Court denied this motion and dismissed the action. We affirm.

One issue resolves this appeal: Is Mr. Jacobson an aggrieved party and entitled to appeal to district court?

Montana Agri-Chemical filed a complaint against Mr. Jacobson in the Justice Court for Gallatin County, for $242.28 due on an account. Mr. Jacobson’s answer alleged that the account had been paid in full by Montana Agri-Chemical’s “acceptance of check #34 and taking of personal property without owners approvel [sic].” Following a hearing, the Justice of the Peace found that Montana Agri-Chemical had charged an illegal rate of interest on the account and had illegally gone onto Mr. Jacobson’s land and retrieved a Loomix trough which Mr. Jacobson had purchased. He determined that Mr. Jacobson’s damages would reasonably offset Montana AgriChemical’s claim, and entered judgment for Mr. Jacobson. He awarded Mr. Jacobson costs in the amount of $10.

Mr. Jacobson then obtained an attorney who moved to file a cross-complaint in Gallatin County District Court, alleging that the interest charged by Montana Agri-Chemical on its accounts was usurious and that Montana Agri-Chemical’s agents had illegally trespassed on Mr. Jacobson’s property and converted the Loomix trough. Montana Agri-Chemical filed a memorandum in opposition to Mr. Jacobson’s motion. The motion was heard orally and denied. Ruling from the bench, the District Court dismissed the action, stating:

“Reviewing Judge Goan’s order, it appears that the Plaintiff did not plead his counterclaim, but Judge Goan said that he was implying some sort of a counterclaim even though it was vague, but Judge Goan undertook to consider the matter and used it in offsetting the debt owed by the Defendant to the Plaintiff, and so the motion to file a counterclaim is denied and the matter is dismissed on the grounds that the Defendant is not an aggrieved party.”

Mr. Jacobson raises two issues which we do not consider at length. He states that Section 25-31-506, MCA, conflicts with Rule 7C of the Montana Justice Courts Rules of Civil Procedure. It is not necessary for us to reconcile the apparent conflict, because of our resolution of the ‘aggrieved party’ issue. Mr. Jacobson also raises the argument that depriving him of the opportunity to have his day in district court denies him due process of law. He has completely failed to support this argument, however, and it appears that all procedural due process requirements were met in J.P. court.

Is Mr. Jacobson an aggrieved party and entitled to appeal to district court?

Appeal of a justice coürt judgment to district court is discussed at Section 25-33-101, MCA:

“Exclusive method of review. A judgment or order in a civil action, except when expressly made final by this code, may be reviewed as prescribed in this chapter and not otherwise. A party aggrieved may appeal in the cases prescribed in this chapter.”

In this case, the Justice Court entered judgment for Mr. Jacobson as the prevailing party. The District Court held that Mr. Jacobson was not an aggrieved party and could not appeal. Anderson v. Hinman (1960), 138 Mont. 397, 357 P.2d 895, provides authority for the District Court’s holding. In that case, this Court ruled:

“The appellant, Edna J. Hinman, concluded her answer filed in the District Court with prayer for ‘judgment that this action be dismissed upon the merits as to her’ and it was so adjudged. She was granted the precise judgment for which she prayed. Her prayer was answered. She is not a party aggrieved by the judgment entered. She won her suit in the trial court”

Hinman, 357 P.2d at 905. Similarly, since Mr. Jacobson was permitted to present his counterclaim in justice court and won the suit there he is not a party aggrieved by the judgment entered. He may not appeal to the District Court.

Affirmed.

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


author: MR. JUSTICE SHEEHY MR. JUSTICE MORRISON

text:
    CRYSTAL SPRINGS TROUT COMPANY, a Montana corporation; Thomas Nyquist and Virginia Nyquist, husband and wife; Kenneth Nyquist and Kathleen Nyquist, husband and wife; Ronald Preston; Robert Moore and Peggy Moore, husband and wife; and Earl Bradford and Alice Bradford, husband and wife, Plaintiffs and Respondents, v. FIRST STATE BANK OF FROID, a banking corporation, and Jerry B. Wallander, Defendants and Appellants.
    No. 85-342.
    Submitted Oct. 21, 1986.
    Decided Jan. 15, 1987.
    Rehearing Denied March 12, 1987.
    732 P.2d 819.

      Goetz, Madden & Dunn, James H. Goetz argued, Bozeman, for defendants and appellants.
    Gough, Shanahan, Johnson & Waterman, Ronald Waterman argued, Garrity, Keegan & Brown, Donald Garrity, Helena, for plaintiffs and respondents.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

The First State Bank of Froid (Bank) appeals the judgment of the District Court, First Judicial District, County of Broadwater, awarding compensatory and punitive damages to plaintiffs Crystal Springs Trout Company (CSTC) and its shareholders for breach of an oral contract to loan money and for negligent misrepresentation. Plaintiffs have cross-appealed on two issues concerning the terms of the final judgment. We affirm in part and reverse in part.

The Bank raises eight issues:

1. Whether the District Court erred when it found Froid Bank liable for the tortious acts of its agent, Jerry B. Wallander, but concluded that Wallander had no personal liability?

2. Whether the District Court’s damage award was erroneous because the District Court failed to determine that plaintiffs’ damages were proximately caused by any of Froid Bank’s acts?

3. Whether the District Court applied an incorrect measure of damages when it awarded the individual shareholders their entire initial investment plus interest for Froid Bank’s breach of commitment to provide financing to CSTC?

4. Whether the District Court erred when it awarded damages to the individual shareholders for losses suffered by the corporation?

5. Whether the District Court erred in refusing to permit comparison of Jerry Wallander’s misconduct with that of the CSTC principals?

6. Whether Jerry Wallander’s conduct was sufficiently culpable to support punitive damages?

7. Whether the District Court erred in awarding defendant Froid Bank all of plaintiffs’ assets and concomitant liabilities as an offset to damages awarded against both CSTC and the individual plaintiffs where CSTC’s liabilities exceeded the value of its assets?

8.. Whether the District Court erred in awarding the individual shareholders interest on their loss of investment at the rate of ten percent for periods prior to July 1, 1979?

The plaintiffs raise two issues on cross-appeal:

1. Whether Jerry B. Wallander is jointly liable for the judgment against the Bank?

2. Whether the damage award received by CSTC and its shareholders was inadequate?

FACTUAL BACKGROUND

Plaintiff CSTC is a Montana corporation, incorporated in 1977 for the purpose of raising trout for commercial sale. It was initially capitalized through the sale of common stock to Ron Preston, Tom Nyquist, and other members of the Nyquist family.

The other plaintiffs in this case are the shareholders of CSTC: 1) Tom and Virginia Nyquist; 2) Ken and Kathleen Nyquist, Tom’s father and mother; 3) Robert and Peggy Moore, Tom’s sister and brother-in-law; 4) Earl and Alice Bradford, Tom’s wife’s parents; 5) Ron Preston, Tom’s business school friend and associate.

Defendants are the First State Bank of Froid and Jerry Wallander, former Bank president. Wallander succeeded his father as Bank president in 1969, and held that position until 1982 when he was asked to resign by the family. The Froid Bank is essentially a family-owned Bank, with the Wallanders owning over 90% of the stock in the Bank corporation. Jerry Wallander and Ken Nyquist grew up together in Froid, and Wallander was also Ken’s lawyer and business advisor.

CSTC was incorporated in May, 1977, and was the brain child of Tom Nyquist and Ron Preston, two 1973 University of Montana business school graduates. Its operations were located at Big Springs, a series of natural springs downstream from the dam at Toston, Montana. In the summer of 1977, Tom Nyquist began acquiring water and land leases for the trout farm. By the fall of 1977, construction was underway. Plaintiffs built a hatchery building and several dirt raceways. They continued to expand through the winter months, and by spring of 1978 had approximately 825,000 young fish in the raceways and 200,000 fingerlings in the hatchery.

On May 20, 1978, an earthen ditch which carried water to the project area breached. Approximately 700,000 fish in the raceways were destroyed. Prior to this washout, plaintiffs had planned to line the ditch with gunnite to strengthen it. As there had been no previous record of a washout on this ditch, they had planned to line the ditch after the upcoming 1978 season, financing the project with money from sales made during 1978.

CSTC was initially capitalized at $167,283. In February, 1978, Ken Nyquist bought $100,002 worth of stock bringing total shareholders’ equity to $267,285. In addition, Tom Nyquist sought a Small Business Administration (SBA) loan from the Montana Bank of Missoula in the fall of 1977. A loan guaranty of $260,000 was issued in March, 1978. The loan package was then transferred to the Montana Bank of Helena, but was never drawn upon due to the circumstances surrounding the washout. The loan guaranty was then allowed to lapse.

After the washout, the shareholders regrouped to determine a course of action. They ultimately decided to sell the project and simultaneously refinance it on a larger scale. Refinancing was sought through the Farmers Home Administration (FmHA) which had higher lending limits than the SBA. The attempted sale of CSTC was abandoned after an FmHA official reprimanded the principals for placing CSTC on the market and representing that a $950,000 loan commitment had been made by FmHA. (FmHA loans are contingent on the applicant’s ongoing commitment to the proposed business.)

CSTC sought a $900,000 loan from FmHA for long term financing. Interim financing for construction and operating capital had to be raised by the borrower. However, in order to obtain interim financing, the borrower must obtain a “conditional Commitment for Guarantee” from the FmHA, which is issued only if certain FmHA requirements are met. Thus, until the permanent loan guaranty is issued, the borrower and his banker are liable for the entire investment. This means the borrower’s bank must be willing and able to provide interim money, risking that all will go well until the conditional and finally the permanent loan guarantees issue.

Both plaintiffs and defendants were aware of these requirements. By August, 1978, Froid Bank was identified as the prospective lender for CSTC. Wallander, in his capacity as Ken Nyquist’s lawyer, had first been contacted by Ken in February, 1978, when Ken asked his advice on buying stock in CSTC. In May, 1978, Ron Preston wrote to Wallander urging him to become involved with CSTC, saying the Bank’s involvement would be mutually beneficial to them both. In August, 1978, Wallander became involved by reviewing the FmHA application papers and indicating the Bank would act as the interim financier.

The FmHA application was partially completed by the CSTC principals and delivered to Wallander for completion and signing on October 19, 1978. The application was kept by him until after January 5, 1979, despite Wallander’s claim to CSTC that he had filed the application with the FmHA office in Bozeman. On January 5, Wallander and the CSTC principals met to discuss interim financing and the 1979 construction season. At the meeting, Wallander stated that there would be “no problem” in getting financing from another overlining bank. The first cash advance was issued, secured by a promissory note signed by CSTC, and co-signed by Ken, Tom and Ron.

From January 5 through the summer of 1979, Wallander continued to assure CSTC principals that there was “no problem” with the interim financing. The Bank’s customer lending limit was $160,000. A total of $260,000 was advanced by the Bank to CSTC between January 5 and June 23, 1979. Plaintiffs repeatedly questioned Wallander on the financing arrangements and he repeatedly answered that financing was “no problem.” On June 2, when the $160,000 limit was reached, Wallander finally contacted First Bank Minneapolis, the bank he had represented as the overlining bank. First Minneapolis contacted Ron Preston in mid-June for “pre-loan” information, which confused Ron since he thought the participation of First Minneapolis had already been arranged. On June 25, Ron received a letter from First Minneapolis rejecting the offer to participate as an overlining bank.

In response to this letter, Wallander assured the CSTC principals he could line up several small banks to participate in the financing. This never came to pass and on August 3,1979, Wallander indicated to Ron Preston that CSTC would have to cease operations.

Throughout the next few months, Ron Preston and Tom Nyquist tried to find other financiers for the project. Wallander never followed up on the leads which they gave him. CSTC’s creditors began demanding payment and threatening repossession of equipment. Wallander proposed that Ken Nyquist borrow money on Ken’s personal account to pay off the debts on a Peterbilt truck and a mobile home. Wallander would then transfer the titles of these items from CSTC to Ken, and the items would be pledged as security for Ken’s loan. Ken signed a $8,000 note for the truck February 21, 1980, and a $9,640.11 note May 1, 1980 for the mobile home. Wallander never transferred title, and the truck was seized and sold by a CSTC creditor.

Wallander, Ken, Tom and Ron met one final time in the winter of 1980 to review the potential for refinancing. They agreed the situation was hopeless. Wallander assured them the Bank would take no action on notes owed either by Ken or CSTC. Communications between the parties ceased at this point. CSTC filed its original complaint against the Bank and Wallander in April, 1981.

PERSONAL LIABILITY OF AN AGENT

The first issue raised by both the Bank and CSTC is whether Jerry Wallander should be held liable on the judgment assessed against the Bank. The District Court held, in its conclusion of law No. 1:

“The conduct of defendant Jerry B. Wallander, acting at all times as agent of the First State Bank of Froid and with the acquiescence and tacit approval of the directors of the bank, constituted willful and wanton misconduct consisting of conscious breach of trust and fiduciary duty, intentional deception, flagrant breach of the ethical cannons [sic] of both the legal and banking profession, a studied and extended course of fraudulent misrepresentation and knowing betrayal of a lifetime friendship, all with reckless disregard for the rights and interest of the plaintiffs herein, unjustified by any circumstance and ‘malicious’ and ‘oppressive’ within the meaning of those terms as applied in the law of torts.”

However, in its conclusion of law No. 11, the court held, “Plaintiffs are not entitled to recover damages from defendant Jerry B. Wallander.”

By statute in Montana, an agent is jointly and severally liable with his principal to third parties for wrongful acts committed in the course of his agency. Section 28-10-702(3), MCA; See also Greening v. Mutual Life Ins. of New York (D. Mont. 1983), 558 F.Supp. 988, 991. In order to hold a corporate agent personally liable, the court must find that the agent was personally negligent or that the agent’s actions were tortious in nature. The personal nature of the agent’s actions forms the narrow exception to the general policy that officers and agents of a corporation must be shielded from personal liability for acts taken on behalf of the corporation. Little v. Grizzly Mfg. (Mont. 1981), 195 Mont. 419, 636 P.2d 839, 842, 38 St.Rep. 1994, 1997.

The strong language of the District Court’s conclusion of law No. 1 indicates Wallander’s breach of fiduciary duty and fraudulent misrepresentation was intentional and very personal, given his longstanding relationship with the Nyquist family. In light of this finding, we hold the District Court’s failure to hold Jerry Wallander jointly and severally liable with the Bank was clearly erroneous, and we reverse the court’s decision on this point. See Section 28-10-702(3), MCA.

PROXIMATE CAUSE, CORRECT MEASURE OF DAMAGES & INDIVIDUAL SHAREHOLDER RECOVERY

The next issues raised by the Bank concern whether the District Court’s award to the CSTC shareholders of their capital investments plus interest was erroneous. The Bank argues that the loss of initial shareholder investment was not proximately caused by the Bank’s breach of commitment to provide interim financing. The Bank claims the initial shareholder equity capital was wiped out by the May, 1978, washout and the expenditures of the 1978 summer construction season. The Bank also claims its commitment to financing did not occur until January 5, 1979, when the first cash advance was issued from the Bank to CSTC and therefore the individual shareholders are not entitled to recovery apart from the corporation.

The District Court found actions of the Bank in failing to provide interim financing proximately caused damage to CSTC and its shareholders. The court also found that while CSTC was in serious financial straits after the 1978 washout, the company had been infused with an additional $260,000, a great deal of work and planning, and was a “different” business which collapsed for failure of credit one year later. From the evidence here, CSTC’s failure in the fall of 1979 was directly caused by the lack of the promised financing.

There is sufficient evidence to support a finding that the plaintiff shareholders would not have refinanced CSTC unless they had guaranteed financial backing. The CSTC principals repeatedly sought assurances from Wallander as to whether the interim financing arrangements were in place. Wallander repeatedly assured them that financing was “no problem,” and CSTC continued to receive cash advances upon request. The CSTC shareholders entered into the rebuilding and refinancing of the corporation in reliance on the Bank’s misrepresentations that financing was available, and these misrepresentations were the direct and proximate cause of the failure of CSTC in August, 1979, and the loss of investment of the shareholders. The District Court properly found that a causal connection existed between the Bank’s misrepresentations and the shareholders’ reliance on those misrepresentations in embarking on a plan of refinancing.

It is clear that the District Court found, beyond breaching a contract, that the Bank had committed a tort. That the Bank’s tort had proximately caused damages to the plaintiffs is inescapable. The District Court wrestled mightily with the problems of damages here.

The District Court assessed the “battle of the experts” in connection with the trout industry.

The Bank had produced a trout industry expert (“a captain of the trout industry,” said the District Court) who appraised the project at CSTC and gave his opinion that it had no chance of success. The plaintiffs produced another expert, though less formidable on the subject than the Bank’s expert, who prognosticated a modest chance of success. The District Court also heard from experts in accounting, and it weighed the business experience of the plaintiffs, the market research that had been done, and the technical expertise that was necessary. The District Court concluded that it could not determine that the enterprise would undoubtedly succeed, nor that it would certainly fail.

When the fact of damages is established in the evidence, leeway is given to the trier of fact to determine the amount of the damages.

“Courts indicate that there is a distinction between the quality of proof necessary to establish the fact that the plaintiff has sustained some damage and the measure of proof necessary to enable the jury to fix the amount. Although formerly the tendency was to restrict the recovery to such matters as were susceptible of having attached to them an exact pecuniary value, it is now generally held that the uncertainty which prevents a recovery is uncertainty as to the fact of the damage and not as to its amount and that where it is reasonably certain that damage has resulted, mere uncertainty as to the amount will not preclude the right of recovery or prevent a jury decision awarding damages. This view has been sustained where, from the nature of the case, the extent of the injury and the amount of damage are not capable of exact and accurate proof. Under such circumstances, all that can be required is that the evidence-with such certainty as the nature of the particular case may permit-lay a foundation which will enable the trier of facts to make a fair and reasonable estimate of the amount of damage. The plaintiff will not be denied a substantial recovery if he has produced the best evidence available and it is sufficient to afford a reasonable basis for estimating his loss.”

22 Am.Jur.2d Damages, Section 25 (1965).

The statutory limitations which circumscribe the trier of fact in determining damages are that they must in all cases be reasonable, Section 27-1-302, MCA, and in cases of breach of contract, be no greater than the other party could have gained by full performance unless a greater recovery is specified by statute. Section 27-1-303, MCA. The measure of damages for the commission of a tort is the amount which will compensate the other party for all the detriment proximately caused thereby, whether it could have been anticipated or not. Section 27-1-317, MCA.

The statute on the measure of damages for breach of contract, Section 27-1-311, MCA, includes the limitation that such damages “which are not clearly ascertainable in both their nature and origin cannot be ‘recovered.” No such limitation appears in the statute on the measure of damages for tort. Section 27-1-317, MCA. Tort damages specifically are allowable for proximately caused damages, “whether they could be anticipated or not.” This Court, nevertheless, has recognized and adopted the proposition that in a contract action once a plaintiff establishes a right to damages, the defendant is liable for damages calculated in a reasonable way. We said in Laas v. Montana Highway Comm’n (1971), 157 Mont. 130-131, 483 P.2d 699, 704:

“5 Corbin on Contracts, Section 1029, provides as an alternative measure of damages where the profits presented are too uncertain:
“ ‘Where it is clear that the defendant’s breach of contract has prevented the plaintiff from making profits the amount of which cannot be proved with reasonable certainty, it should be remembered that this situation has been brought about by the wrongful conduct of the defendant. He should not be allowed to escape by merely paying nominal damages if there is any reasonable way in which the amount that he should pay as damages can be determined. There are a few alternative rules for determining this amount. Their purpose is to make compensation for the profits prevented and losses caused, measuring the amount by a method that is reasonably definite, and that is not likely to give compensation in excess of the profits that would have been made, and the losses that have been suffered. Thus, where the breach by the defendant has prevented the use and operation of property by the plaintiff from which use profits would probably have been made, the damages to be recovered may be measured by the rental value of the property, or by •interest on the reasonable value of the property as an investment.’ ”

There appears no reason why the liberal view as to damages for contract breach expressed in Laas, should not also apply to tort actions. We are not, as Laas suggests, in tort actions required to turn to the reasonable rental value of the property, nor to the interest it would have gained as an investment, because the action of the Bank’s agent here destroyed those values.

As we indicated in the foregoing statement of facts, before the plaintiffs got involved with the Bank in this case, but after the ditch washout of May 20, 1978, the shareholders nevertheless had a project of value which they could sell. In fact they had placed the project on the market at the same time as they were seeking refinancing through the FmHa and were required to desist from attempting to sell the project because of FmHA regulations. Irrespective of the washout, it was the investment of the shareholders in the corporation that have brought about whatever value the project had after the washout. Any attempt by the District Court to fix a value on the project after the washout would have of course been speculation. The District Court therefore, recognizing that damages had occurred, and that the plaintiffs were entitled to damages, resorted to the known figures that the evidence presented, that is the investment that had been made by the original shareholders. In the situation that presented itself to the District Court — the lack of any other certain way to fix the plaintiffs’ damages — the District Court in this case acted properly and reasonably in determining that the damages suffered by the plaintiffs was the amount of their investments in the project at the time the Bank entered the picture. Through its subsequent tortious acts the Bank brought about the demise of the project as a financial venture. We find that the District Court acted properly in this regard.

COMPARATIVE FAULT

The Bank argues that the District Court erred in failing to compare Wallander’s conduct with that of the CSTC principals. It contends the depiction of the trout farm’s commercial success as represented to Wallander in the feasibility study prepared by Tom Nyquist and Ron Preston was an equally misleading attempt to deceive Wallander and the Bank into financing the enterprise.

However, the District Court found Wallander’s conduct “malicious” and “oppressive,” such that it precluded any comparative negligence on the plaintiffs’ part. The court noted plaintiffs’ inexperience in the business of trout farming, but did not find this inexperience rose to the level of Wallander’s fraudulent misrepresentations.

Montana’s comparative negligence statute does not contemplate a comparison between ordinary negligence and willful or wanton misconduct. Derenberger v. Lutey (Mont. 1983), [207 Mont. 1,] 674 P.2d 485, 487, 40 St.Rep. 902, 904. In this case, there was no finding of negligence on the plaintiffs’ part at all. The District Court noted in detail the CSTC principal’s lack of sophisticated technical and business expertise, but also noted that despite the bleak testimony of the Bank’s trout farm expert, the potential of establishing a successful trout farm was not beyond their reach. The principals of CSTC did hire an accountant, an appraiser and an engineer to assist them in making their business decisions. While taking on the responsibility of a new high-risk business such as trout farming by inexperienced entrepreneurs may have been imprudent, such an action did not rise to the level of negligence. On the other hand, the actions of Jerry Wallander added up to much more than ordinary negligence:

1. Misrepresenting to a borrower a bank’s lending ability as that ability may be enhanced by the overlining of another bank.

2. Representing there would be “no problem” in obtaining overline support from another bank without having inquired of that bank.

3. Failing to advise a prospective overline bank of the existence of a FmHA conditional commitment for permanent financing when seeking construction or interim funds for a borrower in excess of the lender’s lending limit.

4. Lying to a borrower about negotiations or commitments for interim financing, or about securing those commitments.

5. Withdrawing an assured line of credit without cause on the part of the borrower.

We find no legal error in the District Court’s precluding consideration of comparative negligence on the part of the plaintiffs, where there is insufficient evidence in the record to indicate any negligent action on the part of the plaintiffs.

PUNITIVE DAMAGES

In this case, Wallander and the Bank not only owed CSTC and its shareholders the duty to fulfill its obligation to advance interim financing money, but also the duty to truthfully apprise the investors of the status of the financing. Investors have a right to rely on a lending institution’s representations as to the availability of funds. Where in addition the institution fraudulently or maliciously represents that funds are available and will be advanced, and begins a series of cash advancements to finance a project, investors may recover punitive damages for their good faith reliance on the fraudulent misrepresentations.

The District Court found that Wallander, as the Bank’s agent, engaged in “a studied and extended course of fraudulent misrepresentation . . . unjustified by any circumstance and ‘malicious’ and ‘oppressive’ within the meaning of those terms as applied in the law of torts.” Punitive damages are properly awarded where there is a sufficient showing of fraud and misrepresentation. Castillo v. Franks (Mont. 1984), [213 Mont. 232,] 690 P.2d 425, 430, 41 St.Rep. 2071, 2077. We uphold the District Court’s award of punitive damages.

AWARD OF CSTC’S LIABILITIES

After awarding damages to CSTC and its shareholders, the District Court awarded to the Bank all of CSTC’s property except for a mobile home, as an offset to the damages awarded to the plaintiffs. The property included equipment, buildings, ditches, and leases to water and state land. The leases were subject to lease payments, reclamation costs and property taxes. The Bank contends this award of assets not listed as collateral in the Bank’s security agreement violates its secured creditor rights under the Uniform Commercial Code. The Bank argues that under Sections 30-9-501 through -511, MCA, it is entitled to a variety of options in enforcing its security interest, and it may not be forced to satisfy its claim by taking possession of the property.

In its final judgment of June 18, 1985, the District Court canceled all of the promissory notes from CSTC to the Bank. These six notes were ones which were given by CSTC and co-signed by the CSTC principals in reliance on Wallander’s misrepresentations as to the availability of interim financing. By canceling the promissory notes, the court erased the Bank’s specific security interests.

Under Section 30-1-103, MCA, the Uniform Commercial Code may be supplemented by principles of law and equity, including the law relative to fraud and misrepresentation. Based on Wallander’s misrepresentations and the plaintiffs’ reliance thereon, we find the court did not abuse its discretion in canceling the promissory notes.

Having canceled the notes, the court, sitting in equity, had a great deal of leeway in fashioning a remedy. Link v. State, Dept. of Fish and Game (1979), 180 Mont. 469, 483, 591 P.2d 214, 222. The District Court properly selected a damage award which gave the Bank certain benefits and options which would otherwise have been unavailable if the award against the Bank merely had been for money damages, without allowing for an offset. The remedy chosen by the court allowed the Bank to mitigate its losses. We find no error in the court’s choice of remedy.

THE AWARD OF INTEREST

The Bank argues that the District Court awarded interest on the CSTC shareholder’s investments from the date of their initial investments. This is a misstatement of the District Court’s final judgment. While the District Court first awarded interest to shareholders from the date of their initial investments, this award was modified in the final judgment of June 18, 1985.

The District Court has awarded interest on each shareholders’ investment from January 28, 1985 — the date the findings of fact and conclusions of law were entered. This is the date the court fixed the amount of damages, and interest is recoverable when the amount of damages is made certain by the trial court. Section 27-1-211, MCA; Castillo v. Franks (Mont. 1984), 690 P.2d 425, 431, 41 St.Rep. 2071, 2078; Carriger v. Ballenger (Mont. 1981), 628 P.2d 1106, 1110, [38 St.Rep. 864,]. Therefore, arguments by the Bank and plaintiffs as to the propriety of prejudgment interest are moot.

ADEQUACY OF THE AWARD TO CSTC

On cross-appeal, plaintiffs argue the District Court’s judgment should be increased to include three more elements of damages. They are:

“1. Damages done to CSTC, destroying its economic life and solvency;
“2. Salaries earned and owing to Ron Preston and Ken Nyquist from August, 1979, to April, 1981;
“3. General damages for the disruption of credit, loss of job opportunities, general humiliation and embarrassment, and the overall mental pain and anguish suffered by Ken Nyquist, Tom Nyquist and Ron Preston.”

Plaintiffs argue the District Court failed to address the value of the corporation, despite Ken Nyquist’s and Ron Preston’s testimony that CSTC had a value of $3,000,000 to $6,000,000. They argue that an owner may properly express his opinion as to the value of his property. They also contend loss of salaries and the general damages listed above were foreseeable results of the Bank’s failure to provide funding for CSTC, and as such, the District Court should have awarded these damages to plaintiffs.

In order to recover consequential damages for breach of contract, the nature and origin of the damages must be established with reasonable certainty. Ehly v. Cady (Mont. 1984), [212 Mont. 82,] 687 P.2d 687, 695, 41 St.Rep. 1611, 1619; Stensvad v. Miners & Merchants Bank (1982), 196 Mont. 193, 206, 640 P.2d 1303, 1310. The District Court found that an estimation of CSTC’s future financial success or failure called for “an impermissibly large measure of pure speculation.” The court heard testimony from expert witnesses on both sides, and was presented with a “veritable blizzard of facts, figures and exhibits” intended to demonstrate the nonviability of the trout farming enterprise. Neither side succeeded in convincing the court that CSTC was either doomed to failure or bound for unqualified success. Under these facts, the court properly rejected the plaintiffs’ request for damages to CSTC’s economic life, where evidence of CSTC’s future success was tenuous at best.

For similar reasons, the court’s rejection of plaintiffs’ claim for lost salaries for the period of August, 1979, to April, 1981, was also proper. Since the plaintiffs failed to establish the future profitability of CSTC, an award of future salaries would also be overly speculative. We also find insufficient evidence on which to reverse the District Court’s denial of general damages to Ken Nyquist, Ron Preston and Tom Nyquist. Plaintiffs have not established to the satisfaction of the Court a clearly ascertainable standard by which to measure these alleged losses.

The judgment of the District Court is reversed and remanded for the District Court to enter the same judgment against Jerry B. Wallander, and is affirmed as to the award of damages.

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

MR. JUSTICE MORRISON

dissenting:

I respectfully dissent from the majority opinion on the damage issue.

The trial court was faced with a difficult decision respecting an award of damages in this case. The proper measure of damages required the District Court to evaluate the value of this business after the “wash out” and compare that value to a value for the business had the funds been advanced. The difference in values should be the measure of damage. The investment of the individual plaintiffs is not the correct measure of damages.

The trial court faced the difficult task of determining damages in the absence of proof relating to the proper measure. Since the plaintiffs were represented by able and experienced trial counsel I can only assume that it was virtually impossible to establish the appropriate values with expert testimony. Nevertheless, the burden of proof on damages resides with the plaintiff and if there is a failure the plaintiff’s case must fall.

I would reverse and remand this case for a new trial on damages requiring the plaintiff to go forward with proof relating to the change in value caused by the bank’s failure to advance funds.

MR. JUSTICE WEBER and MR. JUSTICE GULBRANDSON concur in the the dissent of MR. JUSTICE MORRISON.


author: MR. JUSTICE SHEEHY

text:
    CRYSTAL SPRINGS TROUT COMPANY, a Montana corporation; Thomas Nyquist and Virginia Nyquist, husband and wife; Kenneth Nyquist and Kathleen Nyquist, husband and wife; Ronald Preston; Robert Moore and Peggy Moore, husband and wife; and Earl Bradford and Alice Bradford, husband and wife, Plaintiffs & Respondents, v. FIRST STATE BANK OF FROID, a banking corporation; and Jerry B. Wallander, Defendants & Appellants.
    No. 85-342.
    Decided March 12, 1987.
    736 P.2d 95.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

OPINION AND ORDER ON PETITION FOR REHEARING

Defendants-appellants have moved for rehearing of this cause on two grounds, 1) that this Court made a factual error in its majority opinion when it stated that the District Court awarded prejudgment interest from January 28, 1985 instead of through January 28, 1985, and 2) that this Court overlooked the serious proximate cause questions relating to the District Court’s damages award.

The first contention of the defendants-appellants is correct. Our majority opinion does misstate the facts respecting prejudgment interest awarded by the District Court, since the award did include interest preceding January 28, 1985, the date the District Court entered findings of fact and conclusions of law.

Plaintiffs-respondents concede the error, but contend that since the District Court based its award of damages on the investments of the plaintiff stockholders, pre-judgment interest is proper because the investments are capable of immediate determination, and are clear and readily ascertainable.

However, the right to recover pre-judgment interest is founded on two indispensable grounds 1) the damages are certain or capable of being made certain by calculation, and 2) the right to recover the same must vest on a particular day. Section 27-1-211, MCA. Here the second ground is missing. The District Court, as the majority opinion points out, used the investments of the stockholders not as a matter of return of investments but as a measuring yardstick for damages in the absence of a clear measure otherwise, where it was certain that the plaintiffs-respondents were entitled to damages calculated “in a reasonable way.” Since the District Court used that yardstick, the amounts of damages did not vest until they were determined by the District Court in its findings and conclusions, January 28, 1985. Therefore, interest should accrue only from the date the decision of the District Court was rendered, January 28, 1985. Section 25-9-204, MCA.

The second reason advanced by defendants-appellants for rehearing, that is, that proximate cause was not shown for the damages awarded, is part and parcel of the same argument. The District Court used the investments as a measuring stick for damages, as the only reliable and certain figures in the case. There simply is no doubt that the actions of the defendants caused the plaintiffs damages, and that the damages were proximately caused by the defendants. The manner of calculating those damages we found to be reasonable in the circumstances. This was not a case for nominal damages, because appreciable detriment to the plaintiffs occurred. See Section 27-1-204, MCA. As long as the damages awarded are reasonable, Section 27-1-302, MCA, and they compensate plaintiffs for all the detriment proximately caused by defendants’ breach, Section 27-1-317, MCA, they should be sustained.

Accordingly, we reverse that portion of the District Court judgment which awards pre-judgment interest prior to January 28, 1985 to the plaintiffs. Interest shall accrue from and after that date. The remainder of the District Court judgment, as in our Opinion, is affirmed. The same judgment, as here modified, shall apply to Jerry B. Wallander. The motion for rehearing is otherwise denied.

DATED this 12th day of March, 1987.

s/John C. Sheehy, Justice

s/J.A. Turnage, Chief Justice

s/John Conway Harrison, Justice

s/Fred J. Weber, Justice

s/L.C. Gulbrandson, Justice

s/Frank B. Morrison, Justice

s/William E. Hunt, Justice