author: Justice Regnier JUSTICE GRAY,

text:
    JACK MATTINGLY, Plaintiff and Appellant, v. FIRST BANK OF LINCOLN, GERRY MALEK, d/b/a MALEK REALTY; and AUGUST “GUS” HABETS, Defendants and Respondents.
    No. 96-678.
    Submitted on Briefs June 12, 1997.
    Decided October 28, 1997.
    54 St.Rep. 1116.
    947 P.2d 66.
    285 Mont. 209.

      For Appellant: David K. W. Wilson, Jr., and Jonathan Motl; Reynolds, Motl and Sherwood; Helena.
    For Respondents: Gary L. Davis; Luxan & Murfitt; Helena (for Respondent First Bank Lincoln).
   Justice Regnier

delivered the Opinion of the Court.

In July 1993, plaintiff and appellant Jack Mattingly filed an action in the District Court for the First Judicial District in Lewis and Clark County against First Bank of Lincoln, real estate agent Gerry Malek, and August Habets to recover damages incurred in connection with the 1987 purchase and sale of a service station located in Lincoln, Montana. Mattingly brought suit alleging that at the time he purchased the service station from Habets, the defendants, including First Bank through whom Mattingly obtained financing, knew of underground contamination on the service station property but failed to disclose its presence.

Mattingly asserted claims against First Bank for constructive fraud, negligence, and negligent misrepresentation, and punitive damages. First Bank subsequently filed a motion for summary judgment, which the District Court granted in a June 2, 1995, order. Mattingly timely filed a motion to alter or amend pursuant to Rule 59(g), M.R.Civ.P., arguing the court had improperly overlooked a number of issues of material fact. On August 11, 1995, the District Court denied Mattingly’s motion to alter or amend. Mattingly appeals the decision of the District Court granting First Bank’s motion for summary judgment. For the reasons discussed below, we reverse.

We find the following issues dispositive on appeal:

1. With respect to Mattingly’s claim for negligent misrepresentation, did the District Court err in finding that First Bank made no representation to Mattingly upon which he might rely to his detriment?

2. With respect to Mattingly’s claim for constructive fraud, did the District Court err in finding no special circumstances giving rise to a duty on the part of First Bank to disclose to Mattingly any information it may have had regarding the contamination?

3. With respect to Mattingly’s claim for constructive fraud, did the District Court err in finding that First Bank gained no advantage by failing to disclose the presence of the contamination?

4. Did the District Court err in granting First Bank’s motion for summary judgment on Mattingly’s claim for punitive damages?

FACTUAL BACKGROUND

In July 1983, while installing a new sewer line on the south side of Highway 200 in Lincoln’s city center, a construction crew discovered a pocket of gasoline floating on the groundwater at a depth of six feet. Further investigation by the Water Quality Bureau (WQB) and the Montana Department of Health and Environmental Sciences (DHES) indicated that petroleum leaking from underground storage tanks at three gasoline retail businesses operating at the main intersection of Highway 200 and Stemple Pass Road had contaminated approximately 1.4 acres of land in the area. One of the three service stations involved, “Gus’s Exxon,” was owned at the time by Habets.

In 1986, at the behest of the WQB, Stiller and Associates completed a study (Stiller report) which confirmed the presence of gasoline contaminated groundwater in the quarter mile area stretching westward from the main intersection location of the three gasoline service stations. Following various press accounts of the spill, and by virtue of the fact that Lincoln is a small community, general knowledge of the contamination became widespread throughout the Lincoln area, and within the First Bank organization itself. Indeed, First Bank’s property rested in such close proximity to the contaminated area that, as a part of its initial investigation in 1983, DHES sought permission from then bank president Susan Hemmer to excavate on the bank’s property near the ‘leading edge of the plume.”

In May 1987, Habets listed “Gus’s Exxon” for sale with Malek’s real estate brokerage firm. Later that same month, Mattingly entered into a contract with Habets pursuant to which he agreed to purchase the station for $79,000, contingent upon his ability to obtain institutional financing. Habets did not disclose to Mattingly that the property had been contaminated.

Mattingly then met with First Bank Vice-President Joe Dolan to inquire about obtaining a loan for the purchase of the property. At the time of Mattingly’s loan application, First Bank had a loan committee comprised of all the bank’s board members. Among the committee’s more active members were bank president Hemmer, as well as director and shareholder John Mulcare. Mulcare also owned and operated Handi-Mart, located across the street from the station purchased by Mattingly, and one of the three stations identified as a source of the contamination. Mulcare knew of the contamination, as evidenced by his attendance at a November 24, 1984, meeting with DHES officials during which they explained the potential liability all three station owners faced due to the contamination. Moreover, Mulcare obtained a copy of the 1986 Stiller report which apportioned probable partial responsibility for the contamination to Mulcare’s Handi-Mart, as well as to Gus’s Exxon.

Prior to approving loans on commercial real estate, First Bank made it a practice to conduct some form of appraisal of the property to determine its value. First Bank did not require a formal written appraisal in this case because of Mattingly’s large down payment on the property. Instead, prior to First Bank’s approval of Mattingly’s loan request, Dolan conducted a physical inspection of the service station property to obtain an impression regarding its value for the purpose of determining whether First Bank would be secure in its loan. At the time of the inspection, Dolan was aware of contamination in the area.

First Bank’s loan committee met on June 8, 1987, to determine whether to approve Mattingly’s loan request. All of the loan committee members, including Hemmer and Mulcare, were aware of the contamination. Mulcare, who had direct knowledge of the contamination, did not mention the contamination issue and abstained from discussing or voting on the loan request because Mattingly was a business competitor. Hemmer, who had direct knowledge of the contamination but did not know of the Stiller Report, also remained silent with respect to the issue of contamination. Dolan, who was relatively new to the Lincoln area, possessed only general knowledge of the contamination. He did not know of the Stiller Report, and essentially relied on other bank board members for information regarding the community. Without any discussion of the contamination present on the property in question, the committee approved Mattingly’s loan request in the amount of $56,000. Closing took place at First Bank’s Lincoln office on June 22,1987. None of the documents associated with the transaction, including the buy-sell agreement, contained any disclosure of the contamination.

After taking possession of the property, Mattingly wanted to remodel and expand his business, so he applied with First Bank to obtain a second loan in the amount of $127,000. After meeting on August 17, 1987, First Bank’s loan committee denied Mattingly’s application. Mattingly subsequently obtained an SBA-guaranteed loan in the amount of $105,000 through Norwest Bank in Great Falls. Mattingly used the loan money to pay the remaining balance on the loan from First Bank, and to remodel the service station.

Mattingly first learned of the contamination in July 1991 when he was in the process of selling his property. That sale fell through due to the contamination, which has since prevented Mattingly from selling the property. In a letter dated July 9, 1992, the DHES first informed Mattingly of his potential liability for the clean up of the contamination.

Mattingly filed this suit against Habets, Malek, and First Bank in July 1993. In his second amended complaint, filed December 13,1993, Mattingly alleged claims against Habets for actual fraud, negligent misrepresentation, violation of Montana’s hazardous waste law § 75-10-715(6)(d)(ii), MCA, and for punitive damages. Mattingly brought claims against Malek for actual fraud, negligent misrepresentation, violation of his statutory duty as a real estate licensee pursuant to § 37-51-321, MCA, and punitive damages. Finally, Mattingly brought claims against First Bank for constructive fraud, negligence, negligent misrepresentation, and punitive damages.

Mattingly subsequently settled his claims with Malek, and Habets signed a confession of liability on December 22, 1995. On March 1, 1996, the court issued an order of liability, finding Habets liable for breach of contract, negligent misrepresentation, and violation of § 75-10-715(6)(d)(ii), MCA. Following a nonjury trial on the issue of damages, the District Court issued an order finding Habets liable for actual damages in the amount of $435,000. On September 20, 1996, the court entered a final judgment in this case, incorporating its prior order granting summary judgment in First Bank’s favor. Mattingly appeals.

DISCUSSION

This Court’s standard of review in appeals from summary judgment rulings is de novo. Treichel v. State Farm Mut. Auto. Ins. Co. (1997), 280 Mont. 443, 446, 930 P.2d 661, 663 (citing Motarie v. Northern Montana Joint Refuse Disposal Dist. (1995), 274 Mont. 239, 242, 907 P.2d 154, 156; Mead v. M.S.B., Inc. (1994), 264 Mont. 465, 470, 872 P.2d 782, 785). This Court reviews a summary judgment order entered pursuant to Rule 56, M.R.Civ.P., based on the same criteria applied by the district court. Treichel, 280 Mont. at 446, 930 P.2d at 663 (citing Bruner v. Yellowstone County (1995), 272 Mont. 261, 264, 900 P.2d 901, 903).

In proving that summary judgment is appropriate:

The movant must demonstrate that no genuine issues of material fact exist. Once this has been accomplished, the burden then shifts to the non-moving party to prove by more than mere denial and speculation that a genuine issue does exist. Having determined that genuine issues of material fact do not exist, the court must then determine whether the moving party is entitled to judgment as a matter of law. [This Court] reviews the legal determinations made by the district court as to whether the court erred.

Bruner, 272 Mont. at 264-65, 900 P.2d at 903.

Moreover, the “moving party has the burden of showing a complete absence of any genuine issue as to all facts considered material in light of the substantive principles that entitle the moving party to judgment as a matter of law and all reasonable inferences are to be drawn in favor of the party opposing summary judgment.” Kolar v. Bergo (1996), 280 Mont. 262, 266, 929 P.2d 867, 869.

ISSUE 1

With respect to Mattingly’s claim for negligent misrepresentation, did the District Court err in finding that First Bank made no representation to Mattingly upon which he might rely to his detriment?

This Court has adopted the definition of negligent misrepresentation set forth in the Restatement (Second) of Torts § 552. See Durbin v. Ross (1996), 276 Mont. 463, 472, 916 P.2d 758, 764. Section 552 provides:

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

In Kitchen Krafters v. Eastside Bank of Montana (1990), 242 Mont. 155, 789 P.2d 567 (overruled in part on other grounds by Busta v. Columbus Hosp. Corp. (1996), 276 Mont. 342, 370, 916 R2d 122, 139), we set out the following elements of a claim for negligent misrepresentation:

a) the defendant made a representation as to a past or existing material fact;
b) the representation must have been untrue;
c) regardless of its actual belief, the defendant must have made the representation without any reasonable ground for believing it to be true;
d) the representation must have been made with the intent to induce the plaintiff to rely on it;
e) the plaintiff must have been unaware of the falsity of the representation; it must have acted in reliance upon the truth of the representation and it must have been justified in relying upon the representation;

f) the plaintiff, as a result of its reliance, must sustain damage. Kitchen Krafters, 242 Mont. at 165, 789 P.2d at 573.

Although a negligent misrepresentation may give rise to actual or constructive fraud, where it is insufficient to do so, it may “nevertheless give rise to negligence liability under § 27-1-701, MCA, through want of ordinary care of the defendant in managing his property or person.” Bottrell v. American Bank (1989), 237 Mont. 1, 21, 773 P.2d 694, 706.

A threshold element in any claim for negligent misrepresentation is that the defendant make a representation as to a past or existing material fact upon which the claim is based. Kitchen Krafters, 242 Mont. at 165, 789 P.2d at 573.

The District Court granted First Bank’s motion for summary judgment with respect to Mattingly’s claim for negligent misrepresentation on two grounds. First, the court found that First Bank had not conducted a formal appraisal and had accordingly made no representation to Mattingly regarding the property’s value. Second, the court found Mattingly could not have relied on any representations by First Bank before deciding to purchase the property. In so finding, the court noted that First Bank loaned money to Mattingly after he had already entered into a buy-sell agreement with Habets.

Following review of the record, this Court concludes the District Court erred in determining as a matter of law that the record contained no evidence of misleading statements made by First Bank to Mattingly and upon which he might have relied in purchasing the service station. When considering a motion for summary judgment, this Court must view the evidence in the light most favorable to the party opposing the motion. Bowen v. McDonald (1996), 276 Mont. 193, 199, 915 P.2d 201, 205. From this perspective, we conclude that a jury might well have viewed First Bank’s conduct as a representation.

It was First Bank’s practice to perform an appraisal prior to approving a loan on commercial real estate. Accordingly, prior to First Bank’s approval of Mattingly’s loan request, Dolan inspected the subject property. First Bank concedes that Dolan visited the property and conducted an inspection “to obtain an impression regarding its value for the purpose of determining whether First Bank would be secure in its loan.” First Bank’s loan committee subsequently approved Mattingly’s loan request in the amount of $56,000.

Beyond these bare facts, however, the parties are in dispute. The parties dispute the true nature, scope, and import of First Bank’s evaluation of the property. They additionally dispute whether First Bank’s appraisal of the property and subsequent approval of Mat-tingly’s loan request constituted a representation that the property had a value of at least $56,000. Whether First Bank’s appraisal of the property, along with its subsequent approval of Mattingly’s loan request, constitutes a representation that the property had a value of at least $56,000 is a question of material fact.

Assuming First Bank’s appraisal of the property constituted an affirmative representation to Mattingly regarding its value, the parties additionally dispute whether Mattingly in fact relied upon such a representation in purchasing the property. The District Court found that even had First Bank misrepresented the property’s value Mat-tingly could not have relied on that representation in purchasing the property. In so concluding, the court correctly noted it was only “after [Mattingly] had entered into the buy-sell agreement” that he contacted the Bank to secure financing. However, Mattingly expressly conditioned his commitment to purchase the property upon his ability to obtain that financing. Finalization of the sale was, therefore, contingent upon First Bank’s approval of his loan application and, arguably, its determination that the property was worth the amount of the loan. Therefore, whether Mattingly relied on any representation by First Bank with respect to the property’s value in finalizing the sale is an additional question of material fact.

Based on the foregoing, we hold the District Court erred in granting summary judgment with respect to Mattingly’s claim for negligent misrepresentation. Specifically, we hold the court erred in finding no question of fact as to whether First Bank made an affirmative representation regarding the condition or value of the property upon which Mattingly might have relied.

ISSUE 2

With respect to Mattingly’s claim for constructive fraud, did the District Court err in finding no special circumstances giving rise to a duty on the part of First Bank to disclose to Mattingly any information it may have had regarding the contamination?

In addition to claims for negligence and negligent misrepresentation, Mattingly alleged a claim of constructive fraud against First Bank. The presence of a legal duty is an essential element of a claim for constructive fraud. Section 28-2-406, MCA, defines constructive fraud as:

(1) any breach of duty which, without an actually fraudulent intent, gains an advantage to the person in fault or anyone claiming under him by misleading another to his prejudice or to the prejudice of anyone claiming under him; or
(2) any such act or omission as the law especially declares to be fraudulent, without respect to actual fraud.

Thus, in addressing First Bank’s motion for summary judgment with respect to Mattingly’s claim for constructive fraud, this Court must first determine whether the lower court erred in concluding First Bank owed no duty to Mattingly to disclose any information it may have had regarding the contamination.

Whether or not a legal duty exists is a question of law for the court’s determination. Simmons v. Jenkins (1988), 230 Mont. 429, 435, 750 P.2d 1067, 1071. Although the legal duty which often exists in constructive fraud cases is a fiduciary one, this Court has previously held that Montana’s constructive fraud statute “does not require that the plaintiff demonstrate a fiduciary relationship, [but] merely requires the establishment of a duty.” McJunkin v. Kaufman & Broad Home Systems (1987), 229 Mont. 432, 439, 748 P.2d 910, 915. Under certain “special circumstances,” neither a confidential nor a fiduciary relationship is necessary for a finding of constructive fraud. Drilcon, Inc. v. Roil Energy Corp. (1988), 230 Mont. 166, 172, 749 P.2d 1058, 1061.

This Court has held special circumstances may exist where one party has acted to mislead the other in some way. Specifically, this Court has determined that constructive fraud may be present “[w]here sellers [of real property], bywords or conduct, create a false impression concerning serious impairment or other important matters and subsequently fail to disclose the relevant facts.” McGregor v. Mommer (1986), 220 Mont. 98, 109, 714 P.2d 536, 543 (citing Moschelle v. Hulse (1980), 190 Mont. 532, 539, 622 P.2d 155, 159.) Further, in Drilcon, 230 Mont. at 172, 749 P.2d at 1061-62, we affirmed a jury instruction on the question of constructive fraud which provided that “[w]here a party, by his words or conduct creates a false impression concerning serious impairments or other important matters and subsequently fails to disclose relevant facts, constructive fraud may be found.”

In McGregor, we identified special circumstances justifying submission of the question of constructive fraud to the jury where sellers of a gas station “made [misleading and] general statements about the profitability of the business.” McGregor, 220 Mont. at 109, 714 P.2d at 543. Similarly, in Moschelle, we held special circumstances supporting a claim for constructive fraud existed where sellers made misleading statements regarding the physical condition of the property and the income generated from the business. Moschelle, 190 Mont. at 539-40, 622 P.2d at 159. We recognized that “[w]ithholding relevant facts concerning purchased property can be a fraudulent act.” Moschelle, 190 Mont. at 539, 622 P.2d at 159.

In McJunkin, buyers of a mobile home brought suit against the manufacturer and seller, asserting several claims, including one for constructive fraud. McJunkin, 229 Mont. at 439, 748 P.2d at 914. We “recognized that a sufficient duty can arise in [such] a commercial transaction,” and concluded that “defendants had a duty to refrain from intentionally or negligently creating a false impression by words or conduct.” McJunkin, 229 Mont. at 439-40, 748 P.2d at 915.

In the present case, the District Court found no special circumstances to support Mattingly’s claim for constructive fraud, and no factual basis upon which to predicate the existence of a duty. In concluding that First Bank had no duty to disclose any information it may have had regarding the contamination, the District Court found that

[t]here is no evidence that the Bank made any misleading statements to Mattingly which he relied on in purchasing the station. The Bank was not even a party to the transaction. It did not advise Mattingly in any way regarding the purchase nor did it represent Habets. Moreover, Mattingly had never previously dealt with the Bank. It was only after he had entered into the buy-sell agreement that he contacted the Bank to secure financing. Thus, the Bank did not have a special relationship with Mattingly nor did it owe him a fiduciary duty.

Review of the record indicates the District Court erred in granting First Bank’s motion for summary judgment with respect to the question of constructive fraud. Specifically, we hold the lower court erred in finding that “[t]here is no evidence that the Bank made any misleading statements to Mattingly which he relied on in purchasing the station.”

As discussed above, we concluded that whether First Bank made misleading statements to Mattingly with respect to the condition or value of the property is a question of fact precluding summary judgment. We further concluded that, assuming the presence of such a misrepresentation, the question of whether Mattingly relied on that statement in purchasing the station is an additional question of fact.

A duty sufficient to support a claim for constructive fraud may arise in a commercial transaction. McJunkin, 229 Mont. at 439-40, 748 P.2d at 915. Whether First Bank, by its words or conduct, created a false impression concerning the contamination, and subsequently failed to disclose relevant facts, is a question of material fact. Special circumstances giving rise to a duty on the part of First Bank may exist should a trier of fact find that First Bank misrepresented the value of the property in light of the contamination, and that Mattingly relied upon this representation in purchasing the property.

Furthermore, First Bank had peculiar knowledge of the environmental hazard. Mattingly contracted with First Bank to borrow money, unaware of the duties and financial obligations he was assuming by becoming an owner of environmentally damaged property. A jury may well conclude that such facts would constitute special circumstances in this case.

Based on the foregoing, we conclude that the District Court erred in summarily finding no special circumstances giving rise to a duty on the part of First Bank to disclose any information it may have had regarding the ground contamination to Mattingly. Accordingly, we hold the District Court erred in granting First Bank’s motion for summary judgment on Mattingly’s claim for constructive fraud.

ISSUE 3

With respect to Mattingly’s claim for constructive fraud, did the District Court err in finding that First Bank gained no advantage by failing to disclose the presence of contamination?

The District Court granted First Bank’s motion for summary judgment on the issue of constructive fraud on the additional basis that First Bank gained no advantage over Mattingly by failing to disclose the contamination. Pursuant to § 28-2-406, MCA, a necessary component of any claim for constructive fraud is that, in breaching a duty, one party “gain an advantage” over the other.

Mattingly argues that First Bank was advantaged by its alleged decision to withhold information regarding the contamination in a number of respects. For instance, Mattingly points out that First Bank held the note on Habets’ -underlying loan, and that, upon closing the sale with Mattingly, First Bank was able to pay the balance remaining on Habets’loan. Thus, Mattingly argues, First Bank found in him a borrower who knew nothing of the contamination and who would accordingly be less likely to default on his loan than would a borrower, such as Habets, who knew the property to be seriously defective. Mattingly also argues that First Bank was advantaged by failing to disclose the contamination because, had Mattingly learned of the contamination, he would not have purchased the properly and First Bank would not have been able to collect interest income on the loan.

The District Court found that, even assuming First Bank knew of the contamination, it gained no advantage by failing to disclose its presence. Specifically, the court held that “[i]f Mattingly had defaulted on the loan and the Bank foreclosed on its mortgage, the Bank might very well have ended up with a piece of property with little value, or which perhaps even constituted a financial liability.”

Notwithstanding this fact, this Court concludes that whether or not First Bank gained advantage over Mattingly by failing to disclose the contamination, as contemplated by the definition of constructive fraud, is a question of material fact for the trier of fact.

ISSUE 4

Did the District Court err in granting First Bank’s motion for summary judgment on Mattingly’s claim for punitive damages?

By way of his second amended complaint, Mattingly asserted a claim for punitive damages against First Bank. Because the District Court ordered summary judgment in First Bank’s favor on Mat-tingly’s claims for constructive fraud and negligent misrepresentation, it also granted First Bank’s motion for summary judgment on his claim for punitive damages.

Having reversed the District Court’s order with respect to Mat-tingly’s claims for constructive fraud and negligent misrepresentation, we similarly reverse its grant of summary judgment on Mat-tingly’s claim for punitive damages.

Pursuant to § 27-1-221(1), MCA, punitive damages are available where a defendant is found guilty of actual fraud or actual malice. Accordingly, for the issue of punitive damages to reach the jury, Mattingly must present evidence of actual fraud or malice.

CONCLUSION

In conclusion, we hold that the District Court erred in granting First Bank’s motion for summary judgment and in making findings as a matter of law when a jury may well have reached a different conclusion. Specifically, we hold the District Court erred in finding that First Bank made no representation to Mattingly upon which he might rely to his detriment. We also hold the District Court erred in finding no special circumstances giving rise to a duty on the part of First Bank to disclose any information it may have had regarding the contamination to Mattingly. Finally, we hold the court erred in finding that First Bank gained no advantage by failing to disclose the presence of contamination and erred in granting First Bank’s motion for summary judgment on the issue of punitive damages.

On these bases, we reverse the order of the District Court granting First Bank’s motion for summary judgment and remand the case for further proceedings consistent with this opinion.

CHIEF JUSTICE TURNAGE, JUSTICES LEAPHART, HUNT, TRIEWEILER and DISTRICT JUDGE HARKIN, sitting for JUSTICE NELSON

JUSTICE GRAY,

concurring in part and dissenting in part.

I concur in the Court’s opinion on issue one and agree that Mat-tingly must be permitted to proceed with his negligent misrepresentation claim against First Bank. I respectfully dissent, however, from that opinion on issue two, whether he may proceed on his constructive fraud claim. As a result, I also dissent from issues three and four, which need not be reached under a proper resolution of issue two. I would conclude that, because no underlying duty has been established on which the constructive fraud claim can rest, the District Court did not err in granting First Bank’s motion for summary judgment on that claim.

As the Court points out, the existence of a legal duty is a question of law for the district court’s determination. Moreover, the statute at issue, § 28-2-406(1), MCA, clearly requires a foundational duly in a constructive fraud claim, by defining constructive fraud as “any breach of duty which, without an actually fraudulent intent, gains an advantage to the person in fault or anyone claiming under him by misleading another to his prejudice. ...” (Emphasis added.) Simply and plainly, the statute requires an existing duty, the breach of which accomplishes an advantage to one by means of misleading another to the second person’s prejudice. In other words, the result and means of breaching the duty remain secondary to the existence of the duty.

The Court’s “special circumstances” analysis essentially voids the duty requirement of the statutory constructive fraud claim by substituting the result and means of breaching the duty for the necessity of an underlying duty which can be breached. In other words, the Court determines that genuine issues of material fact exist in that First Bank may have gained an advantage over Mattingly by misleading him to his prejudice. It is my view that, under a straightforward interpretation of the plain words of the statute, the questions of whether First Bank “gain[ed] an advantage ... over [Mattingly] by misleading him to his prejudice” are factual questions relating to a “breach.” Because there can be no “breach” without an underlying duty, these matters arise only if, and when, the underlying duty required by the statute has been established as a matter of law. The existence of that duty, as the Court agrees, is a question of law for the district court.

“In the construction of a statute, the office of the judge is simply to ascertain and declare what is in terms or in substance contained therein, not... to omit what has been inserted.” Section 1-2-101, MCA. I submit that calling the breach-related elements of the statutory constructive fraud claim “special circumstances” effectuates a judicial repeal of the duty requirement enacted by the legislature.

For the same reasons, it is my view that Drilcon, Inc. was an erroneous interpretation of the plain meaning of § 28-2-406(1), MCA. I would overrule that case and hold, with regard to issue two in this case, that the District Court did not err in granting First Bank’s motion for summary judgment on the basis that no duty existed on which to premise a statutory constructive fraud claim.


source: Caselaw Access Project

author: JUSTICE LEAPHART

license: Public Domain

text:
    THOMAS P. McALPINE and RUBY McALPINE, husband and wife, and SIMMES BROTHERS, a partnership, Plaintiffs and Appellants, v. RHÔNE-POULENC AG CO. and BEN TAYLOR, INC., a Montana corporation, Defendants and Respondents.
    No. 96-531.
    Argued August 19, 1997
    Submitted September 4, 1997.
    Decided October 29, 1997.
    54 St.Rep. 1123.
    947 P.2d 474.
    285 Mont. 224.

      For Appellants: Dan L. Spoon, John R. Gordon and Robert T. Bell (argued); Reep, Spoon & Gordon, Missoula.
    For Respondents: William O. Bronson (argued); James, Gray, Bronson & Swanberg, Great Falls (for Rh6ne-Poulenc Ag Company); Neil E. Ugrin and Roger T. Witt (argued); Ugrin, Alexander, Zadick & Higgins, Great Falls (for Ben Taylor, Inc.).
   JUSTICE LEAPHART

delivered the Opinion of the Court.

Appellants Thomas P. and Ruby McAlpine, husband and wife, and Simmes Brothers, a partnership, appeal the order of the Ninth Judicial District Court, granting summary judgment in favor of Respondents Rhone-Poulenc Ag. Company (Rhone-Poulenc) and Ben Taylor, Inc. (Ben Taylor) and dismissing their amended complaint with prejudice. We affirm in part, reverse in part, and remand.

We address whether the Appellants’ claims of negligence, breach of warranty, and strict liability are preempted by the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).

Factual and Procedural Background

The Appellants are farmers near Sunburst, Montana. RhonePoulenc and Ben Taylor are the manufacturer and distributor, respectively, of a herbicide called ‘Weedone LV6.” In May 1990, the Appellants mixed Weedone LV6 according to the instructions provided by Rhone-Poulenc and Ben Taylor and applied it to their barley and spring wheat. For several weeks after Appellants applied the herbicide to their crops, the nighttime temperatures in Sunburst were near freezing. Soon after, Appellants discovered that their crops had been severely damaged. Appellants were informed by experts from Montana State University and the Montana Department of Agriculture that cool or cold temperatures following the application of Weedone LV6 can cause crop damage.

In July 1992, Appellants filed a complaint stating claims for negligence, breach of warranty, and strict liability. In December 1992, Appellants amended their complaint to plead damages with more specificity. Appellants’ amended complaint alleged that RhonePoulenc and Ben Taylor were negligent in manufacturing, advertising, and selling Weedone LV6, a product they knew or should have known would be applied in cool, spring temperatures typical in Montana and, thus, a product that would cause crop damage even when applied according to its own instructions. They also alleged that Rhone-Poulenc and Ben Taylor negligently failed to warn them of the damage that could result from Weedone LV6.

Appellants’ claims for breach of express and implied warranties are based on representations allegedly made by an employee of Ben Taylor that, if applied according to its directions, Weedone LV6 would control weeds. Appellants assert that Rhone-Poulenc and Ben Taylor carelessly and negligently designed, manufactured, sold and delivered a deficient product, which caused their crops to be damaged. Under strict liability, Appellants claim that Weedone LV6’s performance in cold temperatures shows it is an unreasonably dangerous product.

Both Rhone-Poulenc and Ben Taylor filed motions for summary judgment, arguing that FIFRA expressly preempts states from imposing independent labeling requirements on pesticides and that because all of Appellants’ claims are based on deficiencies in Weedone LV6’s label, they are barred by FIFRA. The District Court granted summary judgment and dismissed Appellants’ amended complaint with prejudice. The court held that each of Appellants’ claims presented a state law challenge to Weedone LV6’s label and was therefore preempted.

Standard of Review

This Court reviews a district court’s grant of summary judgment de novo. Motarie v. Northern Montana Joint Refuse Disposal Dist. (1995), 274 Mont. 239, 242, 907 P.2d 154, 156. Thus, we proceed to determine whether any genuine issues of fact exist and whether the movant is entitled to summary judgment as a matter of law. Bruner v. Yellowstone County (1995), 272 Mont. 261, 264, 900 P.2d 901, 903.

Discussion

I. Scope of FIFRA Preemption

Under the Supremacy Clause of the Constitution, the laws of the United States are “the supreme Law of the Land.” U.S. Const., art. VI, cl. 2. Thus, where a state law or constitution conflicts with federal law or where it is the clear and manifest intent of Congress, state law is preempted. Cipollone v. Liggett Group, Inc. (1992), 505 U.S. 504, 112 S.Ct 2608, 120 L.Ed.2d 407. Congressional intent to preempt may be found in the express language of the statute or where federal law so occupies an entire field “as to make reasonable the inference that Congress left no room for the States to supplement it.” Cipollone, 505 U.S. at 516, 112 S.Ct. at 2617 (quotingFidelity Federal Sav. & Loan Assn. v. de la Cuesta (1982), 458 U.S. 141, 153, 102 S.Ct. 3014, 3022, 73 L.Ed.2d 664, 675).

When first enacted in 1947, FIFRA was primarily a licensing and labeling statute. Wisconsin Public Intervenor v. Mortier (1991), 501 U.S. 597, 111 S.Ct. 2476, 115 L.Ed.2d 532. In 1972, FIFRA was substantially amended by the Federal Environmental Pesticide Control Act and currently provides a comprehensive scheme for regulation of the use, sale, and labeling of pesticides. See 7 U.S.C. §§ 136-136y. The section at issue here, 7 U.S.C. § 136v, states:

(a) A State may regulate the sale or use of any federally registered pesticide or device in the State, but only if and to the extent the regulation does not permit any sale or use prohibited by this subchapter.
(b) Such State shall not impose or continue in effect any requirements for labeling or packaging in addition to or different from those required under this subchapter.

The congressional intent to preempt is clearly found in the express language of § 136v and, thus, need not be inferred. However, FIFRA still leaves open a substantial portion of the field of pesticide regulation. Mortier, 501 U.S. at 613, 111 S.Ct. at 2486. In this case, while the parties agree that this statute preempts state law claims based exclusively on omissions or inclusions in the product label, they dispute whether Appellants have, in fact, pled claims that extend beyond the scope of this FIFRA preemption.

In Cipollone, 505 U.S. at 504, 112 S.Ct. at 2608, the Supreme Court addressed a nearly identical preemption question in the context of cigarette labeling regulation. Rose Cipollone began smoking in 1942 and died of lung cancer in 1984. Cipollone, 505 U.S. at 508, 112 S.Ct. at 2613. The plaintiff, Rose’s son, claimed that the Liggett Group caused his mother’s death by failing to provide adequate warnings on its cigarettes and by misrepresenting the dangers of smoking to the public. Cipollone, 505 U.S. at 508, 112 S.Ct. at 2613. The Public Health Cigarette Smoking Act of 1969 states that “[n]o requirement or prohibition based on smoking and health shall be imposed under State law with respect to the advertising or promotion of any cigarettes the packages of which are labeled in conformity with the provisions of this chapter.” 15 U.S.C. § 1334. The Supreme Court held that the phrase “requirement or prohibition” included state common law damage actions as well as positive legislative or administrative enactments. Cipollone, 505 U.S. at 522, 112 S.Ct. at 2620.

The Court went on to consider whether the plaintiff’s claims were within the domain expressly preempted by 15 U.S.C. § 1334. Cipollone, 505 U.S. at 523, 112 S.Ct. at 2621. The plaintiff had alleged two claims based on failure to warn: 1) that Liggett Group was negligent in the manner of testing, researching, selling, promoting, and advertising its cigarettes; 2) that Liggett Group failed to provide adequate warnings of the health consequences of cigarette smoking. Cipollone, 505 U.S. at 524, 112 S.Ct. at 2621. The Court held:

insofar as claims under either failure to warn theory require a showing that [Liggett Group’s] advertising or promotions should have included additional, or more clearly stated, warnings, those claims are preempted. The Act does not, however, pre-empt petitioner’s claims that rely solely on respondents’ testing or research practices or other actions unrelated to advertising or promotion.

Cipollone, 505 U.S. at 524, 112 S.Ct. at 2621.

The plaintiff had also alleged a breach of warranty claim, based largely on statements in the Liggett Group’s cigarette advertisements. The Court held that the common law remedy for breach of a voluntary, contractual commitment should not be regarded as a requirement imposed under state law. Cipollone, 505 U.S. at 526, 112 S.Ct. at 2622. Thus, the Court held that plaintiff’s claims based on breach of warranties found in the cigarette advertisements were not preempted. Cipollone, 505 U.S. at 526-27, 112 S.Ct. at 2622-23.

All of the circuit courts, and several state supreme courts, that have considered the effect of FIFRA’s preemption clause have concluded that it should be given the same effect as the preemption clause interpreted in Cipollone. See, e.g., Taylor AG Indus. v. Pure-Gro (9th Cir. 1995), 54 F.3d 555; Welchert v. American Cyanamid, Inc. (8th Cir. 1995), 59 F.3d 69; Worm v. American Cyanamid Co. (4th Cir. 1993), 5 F.3d 744; Shaw v. Dow Brands, Inc. (7th Cir. 1993), 994 F.2d 364; Clubine v. American Cyanamid Co. (Iowa 1995), 534 N.W.2d 385; Quest Chemical Corp. v. Elam (Texas 1995), 898 S.W.2d 819; Hue v. Farmboy Spray Co., Inc. (Wash. 1995), 896 P.2d 682. Further, in vacating the judgments of two circuit courts that held that FIFRA impliedly preempted state law claims based on failure to warn, the U.S. Supreme Court remanded, asking those courts to reconsider in light of its decision in Cipollone. See Arkansas-Platte & Gulf Partnership v. Dow Chemical Co. (1992), 506 U.S. 910, 113 S.Ct. 314, 121 L.Ed.2d 235; Papas v. Zoecon Corp. (1992), 505 U.S. 1215, 112 S.Ct. 3020, 120 L.Ed.2d 892. Thus, for purposes of determining the scope of FIFRA preemption, Cipollone provides the appropriate framework for our analysis.

Under FIFRA, a “State shall not impose or continue in effect any requirements for labeling or packaging in addition to or different from those required under this subchapter.” 7 U.S.C. § 136v(b). We determine that, as in the cigarette labeling statute, the phrase “requirement” in 7 U.S.C. § 136v(b) includes state common law damage actions. Therefore, FIFRA preempts state tort claims to the extent they arise from an omission or inclusion in the product’s label. Claims alleging a product, manufacturing or design defect, claims alleging negligent design, testing or manufacturing, or claims alleging breach of warranty that do not rely on such an omission or inclusion in the product’s label are not preempted. Thus, the issue before this Court is whether the Appellants have in fact made allegations in their amended complaint that support nonpreempted claims of the type listed above.

II. Claims Set Forth in Appellants’ Amended Complaint

A. Negligence

The District Court found that Appellants’ negligence claim was based solely on the insufficiency of Weedone LV6’s label. The District Court held that despite Appellants’ characterization of their claims as negligent formulation, manufacture, and design, “the essence of the claim is still that Defendants designed, manufactured and sold a product in Montana which it should not have, despite the fact that the product and product label received EPA approval prior to its entry into the stream of commerce.” In so holding, the court cited Appellants’ response to an interrogatory propounded them by Ben Taylor, which asked them to set forth the basis for each of their claims:

We believe the evidence will show that the application instructions and label for the defendants’ product do not specifically advise of the risk or consequences to treated crops caused by the onset of cool or cold weather before and after application. Further, that defendants knew that the product would be used in northern Montana where there is a substantial likelihood of cool or cold weather occurring in May and June when spring wheat and barley reach the appropriate stage for application, and that its use under those conditions created an unreasonable risk of substantial damage and regardless defendants marketed the product to plaintiffs. Defendants knew that plaintiffs would rely on the representations contained in their advertising, the statements of their dealers and the product label in purchasing and using the product. Defendants knew or should have known that such representations were incorrect, inadequate and misleading. Plaintiffs did in fact rely on those incorrect, inadequate and misleading representations in purchasing and using the product and were damaged as a result.

Appellants argue that the District Court erred by looking only to one interrogatory response and by ascribing an overly narrow reading to the language of their amended complaint, which they argue clearly alleges that the product is defective regardless of its labeling. Whether or not the District Court overstated the importance of Appellants’ interrogatory response, it correctly found that the negligence claim set forth in Appellants’ amended complaint was based solely on the insufficient warning contained in Weedone LV6’s label.

In the first count of their amended complaint, Appellants claim that Rhône-Poulenc and Ben Taylor had a duty to warn or advise them of the potential risks posed by Weedone LV6. Appellants argue that in selling and advertising Weedone LV6 in Sunburst, Montana, Rhône-Poulenc and Ben Taylor should have known that any farmer who applied Weedone LV6 according to the directions would apply it in May and June, months in which cool or cold temperatures are common. Thus, Appellants contend that Rhóne-Poulenc and Ben Taylor “owed a duty to [Appellants] to advise them of the substantial risk of harm which would occur if cool or cold temperatures occurred after application of Weedone LV6 to their small grain crops; and their failure to perform that duty constitutes negligence.”

The only theory of negligence set forth in Appellants’ amended complaint is premised on Rhône-Poulenc and Ben Taylor’s failure to warn adequately of the harm that could result from using Weedone LV6. To succeed under this theory of negligence, Appellants would be required to show that Weedone LV6’s label was deficient; that is, that Ben Taylor and Rhône-Poulenc should have included “additional, or more clearly stated, warnings. ...” Cipollone, 505 U.S. at 524, 112 S.Ct. at 2621. Such claims are preempted by FIFRA. We affirm the District Court’s grant of summary judgment in favor of Ben Taylor and Rhone-Poulenc on Appellants’negligence claims.

B. Breach of Express and Implied Warranty

The Appellants claim that an agent of Ben Taylor represented to them that Weedone LV6, if applied as directed, would control the weeds in their spring wheat and barley. Appellants argue that their crop damage was caused by the product’s failure to serve the purpose for which it was intended and that such failure “was due to a mistake or deficiency in the design, formula, plan and specification of the product.”

FIFRA does not preempt breach of warranty claims that fall outside the scope of the manufacturer’s label. Cipollone, 505 U.S. at 526, 112 S.Ct. at 2622; Taylor AG Indus., 54 F.3d at 563. Here, Appellants’ amended complaint alleges that Rhône-Poulenc and Ben Taylor breached their warranty by designing, manufacturing, and marketing a product that was inherently defective. The District Court found, as a matter of law, that they had not stated a claim for which relief can be granted. However, the pleadings clearly state claims that are unrelated to the product’s label. For example, Appellants claim that when they purchased Weedone LV6, an agent of Ben Taylor “represented the product to be of such nature as to control the weeds in [their] fields,” and that the product failed to do so. Therefore, to the extent they do not rely on representations made in the product label and to the extent they actually allege breach of warranty, Appellants’ claims for breach of express and implied warranty are not preempted.

C. Strict Liability

Under strict liability, Appellants allege that they suffered damage as a result of Rhône-Poulenc and Ben Taylor’s failure to warn that Weedone LV6 could damage crops if applied in cool weather. Again, to the extent Appellants’ claims rely on the insufficiency of the product label, they are preempted. However, Appellants also incorporate by reference the claims set forth under breach of warranty; i.e., that the failure of Weedone LV6 was “due to a mistake or deficiency in the design, formula, plan and specifications of the product.” Appellants also claim that they “suffered damage to their property as a result of the unreasonably dangerous product sold them by Defendants and that Defendants are strictly liable for that damage.”

In its order dismissing all of Appellants’ claims, the District Court noted that, in registering Weedone LV6 and approving its label, the Environmental Protection Agency (EPA) had necessarily concluded that the product, its testing, and its labeling were reasonable and appropriate when the product was used in accordance with widespread and commonly recognized practice. However, as the U.S. Supreme Court has recognized, EPA approval of a pesticide does not necessarily indicate approval for application in all locations and in all climates:

FIFRA nonetheless leaves substantial portions of the field vacant, including the area at issue in this case. FIFRA nowhere seeks to establish an affirmative permit scheme for the actual use of pesticides. It certainly does not equate registration and labeling requirements with a general approval to apply pesticides throughout the Nation without regard to regional and local factors like climate, population, geography, and water supply. Whatever else FIFRA may supplant, it does not occupy the field of pesticide regulation in general or the area of local use permitting in particular.

Mortier, 501 U.S. at 613-14, 111 S.Ct. at 2486.

We conclude, likewise, that FIFRA does not supplant state tort law in protecting persons or property from damages resulting from the application of pesticides. Compliance with FIFRA does not exempt pesticide manufacturers and distributors from their duties to avoid marketing products with manufacturing defects or to use demonstrably safer designs for products. Thus, Appellants must be given the opportunity to prove that Rh6ne-Poulenc and Ben Taylor are strictly liable for designing, manufacturing, and marketing an unreasonably dangerous product. Such claims do not fall within FIFRA’s preemptive scope.

Rhone-Poulenc also argues that, to the extent Appellants have pled claims unrelated to the insufficiency of the product’s label, they did not offer the District Court any evidence to defeat summary judgment on such claims. While we agree that the record before us does not contain facts sufficient to defeat summary judgment, Appellants have not been given the opportunity to conduct thorough discovery. For example, in response to several of Appellants’written interrogatories, Rhone-Poulenc refused to answer, concluding that “[Appellants’] claims are preempted under federal law.” Rh6ne-Poulenc then sought summary judgment on the legal issue of FIFRA preemption. In granting summary judgment, the District Court did not address any of the factual merits of Appellants’ claims, but ruled solely as a matter of law that all claims were preempted. We determine that the District Court’s grant of summary judgment foreclosed Appellants’ opportunity to obtain complete discovery. Until Appellants have completed their discovery, it would be premature for us to conclude that their evidence is insufficient.

Based on the foregoing, we affirm the District Court’s holding that the claims of negligence set forth in Appellants’ amended complaint are preempted by FIFRA. However, we reverse and remand to allow Appellants to go forward with their claims of breach of warranty and strict liability to the extent they do not rely on representations made in the product’s label.

Affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion.

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


author: JUSTICE GRAY

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. THOMAS SULLIVAN, Defendant and Appellant.
    No. 96-584.
    Submitted on Briefs June 12, 1997.
    Decided October 29, 1997.
    54 St.Rep. 1128.
    948 P.2d 215.
    285 Mont. 235.

      For Appellant: David F. Ness, Attorney at Law, Missoula.
    For Respondent: Hon. Joseph P. Mazurek, Attorney General, Michael S. Wellenstein, Ass’t Attorney General, Helena; Julie Macek, Chief Deputy Cascade County Attorney, Great Falls.
   JUSTICE GRAY

delivered the Opinion of the Court.

Thomas Sullivan (Sullivan) appeals from an order of the Eighth Judicial District Court, Cascade County, dismissing his petition for postconviction relief for failure to state a claim upon which relief could be granted. We affirm.

Sullivan raises the following issues on appeal:

1. Did the District Court err in concluding that Sullivan’s rights under Brady v. Maryland were not violated?

2. Did the District Court abuse its discretion in determining that Sullivan is not entitled to a new trial based on newly discovered evidence?

3. Is Sullivan entitled to a new trial as a matter of due process, pursuant to State v. Perry, based on newly discovered evidence?

BACKGROUND

Sullivan worked for the City of Great Falls (City) Parks and Recreation Department (Department) in various capacities beginning in 1963 and became director of the Department in 1975. In 1991, the State of Montana (State) charged him with five counts of felony theft: theft of swimming pool locker money between January of 1988 and August of 1991; theft of golf course driving range money between January of 1988 and August of 1991; theft of golf course storage fees between June of 1989 and July of 1991; theft of golf lesson money between January of 1988 and August of 1991; and theft of golf course membership fees between January of 1990 and August of 1991. The State also charged Sullivan with one count of tampering with public records or information by accountability (tampering), alleged to have occurred between October of 1987 and January of 1990. The tampering charge involved Sullivan instructing his secretary to change the total number of golf memberships in the year-end golf report (golf report) to match the amount of membership fees deposited for that year. Finally, the State charged Sullivan with one count of official misconduct.

Prior to trial, the District Court dismissed the theft charge involving swimming pool locker money. At trial, Sullivan denied having committed the remaining charges and attempted to establish that financial mismanagement by the City and the Department, rather than theft, accounted for the missing monies. According to Sullivan, the missing monies were simply misposted or lost. The jury convicted Sullivan of three counts of felony theft, including theft of golf course membership fees, and tampering. It acquitted him of the remaining theft charge and official misconduct. Judgment was entered in June of 1992 and Sullivan appealed. We affirmed the convictions, reversed certain aspects of the fine imposed and remanded for clarification. State v. Sullivan (1994), 266 Mont. 313, 880 P.2d 829.

On December 27,1993, the new director of the Department discovered an envelope containing $1,300 in cash and checks dated March 4, 1987, in a budget file. The cash and checks were payments for golf course memberships. Neither the City nor the State notified Sullivan or his attorney that the undeposited cash and checks had been discovered. When Sullivan’s attorney learned of the discovery in July of 1994, Sullivan filed a petition for postconviction relief asserting that his constitutional rights had been violated and that the newly discovered evidence entitled him to a new trial or an evidentiary hearing. The District Court dismissed the petition and Sullivan appeals.

STANDARD OF REVIEW

In such recent cases as State v. Sheppard (1995), 270 Mont. 122, 127, 890 P.2d 754, 757 (citing State v. Barrack (1994), 267 Mont. 154, 159, 882 P.2d 1028, 1031), we stated the standard of review of a denial of a petition for postconviction relief as whether “substantial evidence supports the findings and conclusions of the district court.” We implicitly clarified that standard, however, in Kills on Top v. State (1996), 279 Mont. 384, 390, 928 P.2d 182, 186, a postconviction relief proceeding where we reviewed findings of fact, conclusions of law and discretionary rulings. There, we stated that we would review a district court’s findings of fact in a postconviction relief proceeding— as we review most other findings by trial courts — to determine whether the findings are clearly erroneous. See Kills on Top, 928 P.2d at 186 (citation omitted). We review conclusions of law to determine whether they are correct. Kills on Top, 928 P.2d at 186 (citation omitted). Discretionary rulings in postconviction relief proceedings, including rulings on requests for a new trial, are reviewed for abuse of discretion. See Kills on Top, 928 P.2d at 186 (citations omitted).

1. Did the District Court err in concluding that Sullivan’s Brady rights were not violated?

Sullivan argues that the State’s failure to disclose the undeposited cash and checks, collected for golf course memberships in 1987 and discovered in 1993, violated his constitutional rights under Brady v. Maryland (1963), 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215. On that basis, he contends that the District Court erred in concluding that no Brady violation occurred.

In Brady, the United States Supreme Court stated'that “the suppression by the prosecution of evidence favorable to an accused upon request violates due process where the evidence is material either to guilt or to punishment, irrespective of the good faith or bad faith of the prosecution.” Brady, 373 U.S. at 87, 83 S.Ct. at 1196-97. The Supreme Court recently deleted the Brady requirement of a request from the defendant for exculpatory or impeachment evidence. Kyles v. Whitley (1995), 514 U.S. 419, 433, 115 S.Ct. 1555, 1565, 131 L.Ed.2d 490, 505. Basically, a Brady due process violation has three elements: 1) The prosecution’s failure to disclose 2) exculpatory or impeachment evidence 3) material to either guilt or punishment. Kennedy v. Herring (11th Cir. 1995), 54 F.3d 678, 682 (citing Nelson v. Nagle (11th Cir. 1993), 995 F.2d 1549, 1555). Generally, Brady applies only to evidence in the prosecution’s possession or within its knowledge. United States v. Morris (7th Cir. 1996), 80 F.3d 1151, 1169; United States v. Jones (8th Cir. 1994), 34 F.3d 596, 599.

Here, the cash and checks at issue were not discovered until December 27, 1993, more than one and one-half years after the completion of Sullivan’s trial. They were not within the knowledge or possession of the State before or during Sullivan’s trial and, as a result, they do not constitute evidence which the State could have produced and which it suppressed or failed to disclose to Sullivan. As a result, we need not address the primary thrust of Sullivan’s Brady argument, which is whether the undeposited cash and checks were material to either guilt or punishment under Brady and its progeny. We hold that the District Court correctly concluded that Sullivan’s due process Brady rights were not violated.

We observe that, in discussing the Brady issue, Sullivan makes a passing reference to a separate allegation in his postconviction petition, made on information and belief, that other undeposited golf course membership cash and checks were discovered prior to his trial and not disclosed to him by the State. The District Court noted that Sullivan provided no evidence of any type in support of this allegation and did not address it further. Sullivan contends that the District Court erred in dismissing his petition without providing him the opportunity to either conduct discovery on the allegation of a pretrial discovery of undeposited cash and checks or have an evidentiary hearing for further investigation.

Section 46-21-104(1)(c), MCA (1993), requires a postconviction petitioner to attach affidavits, records or other evidence to the petition which support the allegations contained in the petition or state why such evidence is not attached. Here, Sullivan did not attach an affidavit or other evidence substantiating his allegation, on information and belief, of a pretrial discovery of undeposited cash and checks. Nor did he explain in either the District Court or this Court why such evidence was not produced. He states in his brief on appeal that he obtained the information alleged on information and belief from former employees of the City. Assuming arguendo that his statement is true, Sullivan could have obtained affidavits in support of his allegation of a pretrial discovery of undeposited cash and checks and attached that evidence to his petition as § 46-21-104(1)(c), MCA (1993), requires. He did not do so.

We conclude that Sullivan’s unsupported allegation, made on information and belief, did not establish good cause for permission to conduct discovery as required by § 46-21-201(3), MCA (1993). Nor was it sufficient to entitle him to an evidentiary hearing under § 46-21-201(1), MCA (1993). We hold, therefore, that the District Court did not abuse its discretion in these regards.

2. Did the District Court abuse its discretion in determining that Sullivan is not entitled to a new trial based on newly discovered evidence?

Sullivan contends that the undeposited cash and checks discovered after his trial relate to both the theft of golf course membership fees charge and the tampering charge, and also asserts that the undeposited cash and checks provide additional evidence of financial mismanagement by the City and the Department. As a result, he argues that he is entitled to a new trial based on newly discovered evidence under the so-called Greeno factors and that the District Court erred in concluding otherwise.

We recently restated the factors which apply when a district court evaluates a motion for a new trial based on newly discovered evidence. In State v. Cline (1996), 275 Mont. 46, 52, 909 P.2d 1171, 1175 (citing State v. Greeno (1959), 135 Mont. 580, 342 P.2d 1052 (citations omitted)), we stated those factors as:

(1) the evidence must have come to the knowledge of the defendant since trial; (2) it was not through want of diligence that the evidence was not discovered earlier; (3) the evidence is so material that it would probably produce a different result upon another trial; (4) the evidence is not merely cumulative — that is, it does not speak as to facts in relation to which there was evidence at trial; (5) the motion for new trial must be supported by the affidavit of the witness whose evidence is alleged to have been newly discovered, or its absence accounted for; and (6) the evidence must not be such as will only tend to impeach the character or credit of a witness.

All six factors must be met. Cline, 909 P.2d at 1175 (citations omitted). In denying Sullivan’s request for a new trial based on newly discovered evidence, the District Court concluded that he did not satisfy the third and fourth Greeno factors. We address each in turn.

To satisfy the third Greeno factor, Sullivan must show that the undeposited cash and checks probably would have produced a different result at a second trial. See Cline, 909 P.2d at 1175-76. In other words, “the new evidence [must] be so highly probative of the defendant’s innocence that its introduction probably would produce an acquittal.” State v. Fina (1995), 273 Mont. 171, 178, 902 P.2d 30, 35 (citation omitted).

Sullivan contends that the charge of tampering with official records in October of 1987 necessarily includes the alleged theft of the undeposited cash and checks dated March 4,1987. Therefore, according to Sullivan, the undeposited cash and checks are material to both the theft of golf course membership fees charge and the tampering charge. We disagree.

As set forth above, the theft of golf course membership fees charge was alleged to have occurred between January of 1990 and August of 1991. Sullivan was not charged with the theft of golf course membership fees received in 1987. As a result, the later-discovered cash and checks for 1987 were not related to the theft charge at issue and not probative of Sullivan’s innocence on that charged offense.

Nor is it probable that the undeposited cash and checks from 1987 would have resulted in an acquittal on the tampering charge, as Sullivan contends. Tampering occurs when a person “knowingly makes a false entry in or false alteration of any record, document, legislative bill or enactment, or thing belonging to or received, issued, or kept by the government for information or record or required by law to be kept by others for information of the government [.]” Section 45-7-208(1)(a), MCA(1989). Furthermore, apersonis accountable for an offense when, “having a mental state described by the statute defining the offense, he causes another to perform the conduct, regardless of the legal capacity or mental state of the other person.” Section 45-2-302(1), MCA (1989). Thus, theft is not an element of tampering by accountability, as charged in this case, and evidence of theft — or the absence of theft — of golf course membership fees in 1987 would have been irrelevant to both the State’s proof of, and Sullivan’s defense to, the tampering charge.

Indeed, the tampering-related evidence at trial, with regard to the document or record requirement of § 45-7-208(1)(a), MCA (1989), was that Sullivan used the golf report when preparing the budget and that the City Parks and Recreation Board referred to it when deciding whether to increase golf course membership fees and green fees. With regard to the mental state, “false entry” and “causes another” elements of the tampering charge, Sullivan’s secretary testified that, when she told Sullivan that the number of golf course memberships purchased during the year did not match the amount of money deposited for golf course memberships during the year, he instructed her to alter the golf report in order to make those numbers match. The undeposited cash and checks from 1987 would not have been relevant to the tampering charge because that charge was premised on Sullivan having caused another to falsely alter the golf report, not whether the missing monies which resulted in the alteration had been stolen or merely misplaced.

We conclude that the undeposited cash and checks discovered in 1993 would not probably have produced a different result upon retrial of the tampering charge. Accordingly, we hold that the District Court correctly concluded that Sullivan did not satisfy the third Greeno factor.

We reach the same result with regard to the District Court’s determination that Sullivan did not satisfy the fourth Greeno factor. To do so, Sullivan must show that the undeposited cash and checks were not merely cumulative evidence. See Cline, 909 P.2d at 1175. In other words, the newly discovered evidence must do more than address facts already in evidence. Cline, 909 P.2d at 1175.

Sullivan is correct in contending that the undeposited cash and checks support his defense theory that the City and the Department routinely mishandled their cash receipts. The question before us, however, is not whether the evidence would support Sullivan’s theory, but whether it would be merely cumulative to evidence already of record. Here, substantial evidence at trial showed that the City and the Department employed deficient internal control procedures and financial management practices. For example, a special audit requested by the City revealed that the Department’s control procedures for handling cash were insufficient and that, as a result of the poor internal control procedures, the chances that cash could be misappropriated or misposted were increased. Thus, it is clear that the undeposited cash and checks from 1987, which were discovered in 1993, were merely cumulative evidence that the Department did not employ proper internal control procedures. As a result, we conclude that the District Court correctly determined that Sullivan did not satisfy the fourth Greeno factor.

As set forth above, all of the Greeno factors must be met before a party is entitled to a new trial on the basis of newly discovered evidence. We hold that, because Sullivan failed to satisfy the third and fourth factors, the District Court did not abuse its discretion in denying Sullivan a new trial based on newly discovered evidence.

3. Is Sullivan entitled to a new trial as a matter of due process, pursuant to Perry, based on newly discovered evidence?

Sullivan contends on appeal, as he did in the District Court, that he is entitled to a new trial as a matter of due process under State v. Perry (1988), 232 Mont. 455, 758 P.2d 268. The District Court did not address this issue, but it is clear that Sullivan’s reliance on Perry is misplaced.

In Perry, an accomplice recanted his testimony fifteen years after Perry’s conviction for second degree murder, and Perry moved for a new trial or other appropriate relief on that basis. Perry, 758 P.2d at 271-72. The State argued that Perry’s untimely motion for a new trial was actually a petition for postconviction relief which was barred because the five-year statute of limitations had run. Perry, 758 P.2d at 272. We noted that the timing of the recanted testimony precluded any possibility that Perry could have filed his pleading within the time allowed for a postconviction relief petition, and expressed our concern that accepting the State’s characterization of the pleading as one for postconviction relief could deprive a defendant held in violation of his constitutional rights of a means of redress due solely to procedural bars, contrary to the due process provisions of the Montana Constitution. Perry, 758 P.2d at 272-73. On that basis, we determined that Perry’s petition “sound[ed] in the nature [of| a petition for habeas corpus” and addressed whether he was entitled to a new trial. Perry, 758 P.2d at 273. We ultimately concluded that Perry failed to show he was unjustly incarcerated and affirmed the district court’s denial of a new trial. Perry, 758 P.2d at 276.

Our decision to review the claim in Perry turned on the fact that neither a motion for a new trial nor a petition for postconviction relief was available to Perry at the time the accomplice recanted his earlier testimony. Based on that fact, we created a “window” for review of a claim of unconstitutional incarceration which otherwise would have been procedurally barred before its alleged basis arose. We later clarified that Perry is “unique on its facts” and limited its application to other cases with like facts. State v. Gollehon (1995), 274 Mont. 116, 120, 906 P.2d 697, 700.

Those facts are not present here. In this case, the newly discovered evidence came to light in time for Sullivan to timely file a petition for postconviction relief. He duly filed the petition, it is not procedurally barred, and it is presently before this Court. The procedural device to which we resorted in Perry in order to provide a means of redress otherwise procedurally barred has no application here. Sullivan’s Perry argument, simply put, is a transparent effort to circumvent application of the Greeno factors to his request for a new trial based on newly discovered evidence. We hold that Sullivan is not entitled to a new trial under Perry.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES HUNT, LEAPHART and REGNIER concur.