text:
    PATRICIA BROHMAN, Plaintiff and Appellant, v. STATE OF MONTANA, Defendant and Respondent.
    No. 87-232.
    Submitted on Briefs Nov. 6, 1987.
    Decided Jan. 19, 1988.
    749 P.2d 67.
    P. Keith Keller, Keller, Reynolds, Drake, Sternhagen & Johnson, Helena, for plaintiff and appellant.
    John Maynard, Dept, of Admin., Helena, for defendant and respondent.
   MR. JUSTICE GULBRANDSON

delivered the Opinion of the Court.

This is an appeal of an order of the First Judicial District, Lewis and Clark County, granting the defendant/respondent State of Montana (State) a motion for summary judgment against the plaintiff/ appellant, Patricia Brohman (Brohman). The District Court ruled as a matter of law that appellant’s negligence exceeded that on the part of the State. It is from this ruling that Brohman appeals.

We affirm.

On January 21, 1984, at about 8:10 p.m., Brohman was driving east from Missoula, Montana to Helena, Montana on Highway 12. She was accompanied by her husband, two daughters and one son. The roads were intermittently snow packed. Approximately two miles west of Elliston, Brohman attempted to pass a slower moving truck driven by Jason Newton. At this point in the highway, a hump in the roadway existed disallowing sight from either the west or east side. As Brohman pulled into the passing lane, another car, driven by Sean Kane who was accompanied by three other Carroll College students, was cresting this hump from the opposite direction. Neither Brohman nor Kane could react and a head-on collision resulted. All parties suffered varying degrees of injury and two of the passengers in Kane’s car died.

The hump in the road is not noticeable from a distance. A driver in either direction can see vehicles if they are far enough away but lose sight once the vehicle is closer to the hump. The highway runs parallel to a railroad track that is completely flat. Although the highway is marked with a double stripe indicating a no-passing zone, there were no signs indicating a no-passing zone and on the night of the accident the stripes were covered with snow and ice. The investigating highway patrolman, Bernard Barton, testified in deposition that he had to dig through the packed snow to find the highway striping.

At the time of the accident, Brohman’s visibility was obscured by blowing snow. Barton stated that on his way to the accident scene he passed the ambulance but could do so only because he had radio communication with the ambulance driver.

Brohman could not remember events leading to the accident or the accident itself. She did, however, testify that she had traveled this stretch of highway frequently.

This action is a result of the Brohman-Kane accident. The underlying claims in this case were originally filed in Federal District Court where the estates of the two deceased victims sued Brohman and the Shaklee Corporation (Shaklee) because of diversity of citizenship. Brohman worked for Shaklee, was driving a leased vehicle that she and her husband received through their participation with Shaklee, and was returning from a Shaklee meeting in Missoula when the accident occurred.

Brohman attempted to join the State in the Federal cases as a third-party defendant but the Federal District Court denied the motion on March 7,1986 on grounds that the presence of the State as a third party defendant would destroy diversity of citizenship. On March 13, 1986, the Federal District Court granted motions for partial summary judgment against Brohman and Shaklee on the issue of liability.

This suit was filed in State District Court on January 29, 1986 alleging the State’s negligence caused the accident because of careless and reckless design, construction or supervision. The State moved for partial summary judgment on grounds that Brohman was collaterally estopped from denying liability because the Federal District Court had ruled she was negligent as a matter of law. The State then moved for partial summary judgment on grounds that Brohman’s negligence exceeded any negligence on the part of the State. Both motions were granted and final judgment against Brohman was entered.

On this appeal, Brohman relies on the report of her expert, Donald Reichmuth, an engineer, who concluded that the stretch of highway was dangerous. Reichmuth based this conclusion on a “deficient stopping sight distance for 55 mph and [a] blind spot in the passing sight distances from both east and west.” He stated that the posted speed should be 45 or 40 mph and no passing signs should augment the no-passing zone pavement markings.

The only issue we have before us is whether the District Court erred in granting the State’s motion for summary judgment.

“Summary judgment may be granted pursuant to Rule 56, M.R.Civ.P., when there is no genuine dispute over material facts and the moving party is entitled to a judgment as a matter of law. The initial burden of proof is upon the party moving for summary judgment. The moving party must demonstrate that no genuine issue of material fact exists. Then, the party opposing the motion must come forward with substantial evidence that raises a genuine issue of material fact.”

Hendrickson v. Neiman (1983), 204 Mont. 367, 370, 665 P.2d 219, 221.

Brohman contends the general rule disallows disposal of negligence cases with a summary judgment motion.

“Ordinarily, issues of negligence are not susceptible to summary judgment and are better determined at trial. Brown v. Merrill, Lynch, Pierce, Fenner & Smith, Inc., (1982) [197 Mont. 1], 640 P.2d 453, 458, 39 St.Rep. 305, 310. Liability should not be adjudicated upon a motion for summary judgment where factual issues concerning negligence and causation are presented. Duchesneau v. Silver Bow County (1971), 158 Mont. 369, 492 P.2d 926, 931.” Henrickson, supra, 665 P.2d at 222.

However, we have in the past affirmed the granting of summary judgment on negligence when it is clear that a party has breached a duty and caused an accident. Birky v. Johnson (Mont. 1986), [220 Mont. 413,] 716 P.2d 198, 43 St.Rep. 488.

In this case, we are dealing with a suit by Brohman against the State for injuries she suffered. For Brohman to recover, she would have to prove that the negligence on the part of the State exceeded any negligence on her part in causing the collision. Section 27-1-702, MCA. Section 61-8-325(1) and (2)(a), MCA defines the applicable duty for Brohman under the circumstances of this case:

“(1) No vehicle shall be driven to the left side of the center of the roadway in overtaking and passing another vehicle proceeding in the same direction unless such left side is clearly visible and is free of oncoming traffic for a sufficient distance ahead to permit such overtaking and passing to be completely made without interfering with the safe operation of any vehicle approaching from the opposite direction or any vehicle overtaken. In every event the overtaking vehicle must return to the right-hand side of the roadway before coming within 100 feet of any vehicle approaching from the opposite direction.
“(2) No vehicle shall at any time be driven to the left side of the roadway under the following conditions:
“(a) when approaching the crest of a grade or upon a curve in the highway where the driver’s view is obstructed within such distance as to create a hazard in the event another vehicle might approach from the opposite direction . . . .”

The State has the duty to provide and maintain safe highways for the citizens of the state of Montana. State v. District Court of the Fourteenth Judicial District (1977), 175 Mont. 63, 67, 572 P.2d 201, 203. Brohman argues that the State failed to properly warn her of the no-passing zone because the double striping was covered with snow and there were no no-passing signs in the area. Brohman contends therefore, that the State breached its obligation under Section 61-8-203, MCA:

“The department of highways shall place and maintain traffic-control devices, conforming to its manual and specifications, upon all state highways it considers necessary to indicate and to carry out this chapter and chapter 9 or to regulate, warn, or guide traffic.”

From its plain language, this statute shows the State of Montana is required to place a sign where “[i]t considers necessary . . .” In the case of no-passing zones, the duty on the part of the State is discretionary.

“The department of highways may determine those portions of a highway where overtaking and passing or driving to the left of the roadway would be especially hazardous, and it may by appropriate signs or markings on the roadway indicate the beginning and end of these zones. When the signs or markings are in place and clearly visible to an ordinarily observant person, every driver of a vehicle shall obey the directions of those signs.” (Emphasis added.)

Section 61-8-326, MCA.

No evidence was presented at the District Court level that any accidents had occurred at this particular spot on Highway 12 prior to the Brohman accident. Patrolman Barton stated he had no knowledge of any subsequent accidents.

The District Court in its memorandum and order granting the motion for summary judgment stated:

“Normally, negligence is a question of fact. In certain cases, however, where reasonable minds cannot differ, the cause of an accident may be a question of law for the Court to determine . . . thus, when reasonable minds could reach but one conclusion, questions of fact may be determined as a matter of law.”

Citing, Hartley v. State (1985), 103 Wash.2d 768, 698 P.2d 77, 81, see also, Prosser and Keeton, The Law of Torts, pp. 238, 319-320 (5th Ed., 1984).

The District Court determined reasonable minds could not differ that Brohman’s negligence exceeded that of the State. The District Court concluded, because of the unusual nature of the case, summary judgment was appropriate:

“It is true that because of the peculiarly exclusive nature of the concept of negligence, it is the rare personal injury case which may be properly disposed of by summary judgment. (Citations omitted.) [T]he mistake should not be made of supposing that because summary judgment cannot normally be granted in a particular kind of case, the motion should not be granted in an unusual case of the kind in question where such procedure is in fact appropriate. Citing Bland v. Northfolk and Southern Railroad Company (4th Cir. 1969), 406 F.2d 863, 866.”

This case falls into the category that allows the court to determine negligence as a matter of law.

In its memorandum and order of April 15, 1987, the District Court stated:

“[I]t is undisputed that Plaintiff attempted to pass at night, in a no passing zone; that the highway was intermittently snow packed; that visibility was obscured by blowing snow so that she could not see when she was passing; and that she had traveled that highway frequently . . .
“Summary judgment demands that all reasonable inferences from the proof presented must be drawn in favor of the non-moving party. Here that means the Court must assume negligence on the part of the State.
“I conclude that reasonable minds would not differ on the issue of comparative negligence. The only conclusion to be reached is that the Plaintiff’s negligence exceeded that of the State’s.
“I find therefore, that as a matter of law, the Plaintiff was more responsible for her injuries than the State may have been in designing the highway or in failing to have signs.”

Patrolman Barton testified, in his deposition used in the Federal District Court cases in regard to his subsequent accident report, that the hill and improper passing were contributing factors. Additionally, he commented that Brohman’s visibility was obscured when she pulled into the passing lane. He stated:

“Q. Describe for us what you mean by improper passing.
“A. Okay. If you had been able to see the solid line, the pass was being made where there was a solid line. The visibility was obscured so she could not see when she was passing . . .
“Q. You said it was snowing when you arrived?
“A. Yes. It would snow — you know, it wasn’t a steady snow. It was off and on. Mainly the visibility was bad from blowing snow.
“Q. Such as the snow that’s kicked up by the car in front of you or a truck?
“A. Just the wind blowing snow. It was kind of like a ground blizzard coming through there.
“Q. The snow was not falling heavily at that time?
“A. No. Before we left it had started snowing quite heavy. But at the time of the accident it was more of a blowing snow type thing .
“Q. As you were proceeding to the accident scene, say east of Avon and for that area of roadway between Avon and the accident scene, how was your visibility so far as blowing snow as you’ve earlier described and snowing conditions?
“A. The visibility was poor, especially when there was another vehicle in the area. I followed the ambulance for quite a ways just on account of the visibility.
“Q. You eventually passed the ambulance, I think you said, and arrived at the accident scene prior to the ambulance arriving?
“A. Yes. But they advised me that it was clear ahead to pass. You know, if we wouldn’t have had contact, there would have been no way I could pass them, because they were kicking up the snow . . .
“Q. Were the conditions similar in the area where you attempted to pass the ambulance as they were at the area of the accident?
“A. Yes . . .”

Barton also stated at the coroner’s inquest that “[t]he pass could not be made in safety ... on account of the visibility.”

From this testimony, the negligence of Brohman is apparent. She drove her vehicle to the left of the centerline in a snowstorm while lacking the ability to see clearly whether there was oncoming traffic. Reasonable people could not disagree that a reasonable person under these circumstance would not, and could not, pass in safety. Brohman could remember nothing of the accident nor events leading to the accident. Therefore, no evidence asserted by Brohman’s counsel of her objective knowledge at that time is authentic.

The testimony of Newton and Mike Hataway, the individuals in the vehicle overtaken by Brohman, at the corner’s inquest further confirmed that Brohman’s vision had to have been obstructed. Newton stated:

“Q. What were the weather conditions; do you recall?
“A. It was snowing and the visibility wasn’t all that good . . .
“Q. Was the snow blowing at that time; do you recall?
“A. Mm hmm.”

Hataway, the passenger in the passed vehicle, concurred.

“Q. [D]o you recall what the weather conditions were?
“A. It was snowing fairly hard. The road was partially snow packed in places, patchy, and the visibility was not real good.
“Q. The wind was blowing?
“A. Yeah, there was snow blowing around . . .”

On this testimony the Federal District Court based its conclusion that Brohman’s operation of her car caused the collision and that she violated the Montana Vehicular Safety statutes. With this information, the District Court determined that Brohman was, “[a]s a matter of law . . . more responsible for her injuries than the State may have been in designing the highway or in failing to have signs.”

On this appeal, Brohman argues that the District Court erred in finding that she was collaterally estopped from bringing the negligence claim and that a material issue of fact was raised by the affidavits and reports filed by her expert.

The District Court’s order shows that it independently considered the facts of the case in its own determination that reasonable minds would not differ on the issue of comparative negligence. The District Court assumed negligence on the part of the State and made all reasonable inferences in favor of Brohman prior to concluding that Brohman’s negligence exceeded that of the State.

In this case, the District Court properly found Brohman liable as a matter of law. In any action for negligence, the plaintiff must produce evidence from which it can be reasonably inferred that the negligent conduct on the part of the defendant was the proximate cause of the plaintiff’s injuries. Krone v. McCann (1982), 196 Mont. 260, 638 P.2d 397; Bostwick v. Butte Motor Co. (1965), 145 Mont. 570, 403 P.2d 614. The lack of signing in this case has not been shown to be the proximate cause of this accident. Even assuming, as the District Court did, that there was negligence on the part of the State, Brohman’s act of attempting to pass without a clear view was the proximate cause and far exceeded any negligence on the part of the State.

Brohman would have to prove by a preponderance of the evidence that her damages were proximately caused by the State’s presumed negligence. Holenstein v. Andrews (1975), 166 Mont. 60, 530 P.2d 476. Under the facts of this case, the evidence presented and the depositional testimony, it is clear that Brohman could not prove by a preponderance of the evidence that the State proximately caused her injuries. Reasonable minds could not differ in this result.

Finally, as to the claim that Brohman’s expert created an issue of fact, viewing the expert’s conclusions in a light most favorable to Brohman, a question of fact is still not raised. Reichmuth stated in his report: “[a] driver who does not frequently drive this stretch of road might not perceive the existence of the hump and its accompanying blind spot which limits visibility.” (Emphasis added.) Brohman traveled this stretch of road numerous times.

“Q. With what frequency in the five years that you’ve lived in Helena, now, do you have to go to Missoula? Any idea? . . .
“A. Well, it has varied. But it has varied between one and three times a week.
“Q. I take it, then, you have driven the road between Missoula and Helena frequently?
“A. Yes . . .”

From the depositions in this record and the exhibits and documents available, we hold that the District Court did not err in granting summary judgment. The State met its burden of showing no material issue of fact as to Brohman’s negligence. Brohman failed to produce substantial evidence that raised a genuine issue of material fact. All-State Leasing Co. v. Top Hat Lounge, Inc. (1982), 198 Mont. 1, 649 P.2d 1250, 1251-1252.

We affirm.

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


source: Caselaw Access Project

author: MR. JUSTICE SHEEHY

license: Public Domain

text:
    WILLIAM G. HARRIS, Petitioner and Appellant, v. GENEVIEVE BAUER, Superintendent of Schools, Yellowstone County, Montana, Sitting for Sonja Spannering, Superintendent of Schools, Park County, Montana, and Livingston School Districts No. 1 & 4, Park County, Montana and Ed Argenbright, State of Montana, Superintendent of Public Instruction, Respondents and Respondents.
    No. 87-312.
    Submitted on Briefs Oct. 22, 1987.
    Decided Jan. 19, 1988.
    Rehearing Denied March 4, 1988.
    749 P.2d 1068.

      Berger, Nelson & Gai, Arnold A. Berger, Billings, for petitioner and appellant.
    Richard P. Bartos, Office of Public Instruction, Helena, Felt & Martin, Laurence R. Martin, Billings, for respondents and respondents.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

Plaintiff appeals from an order of the District Court, Sixth Judicial District, Park County, affirming the decision of the acting county superintendent and the State Superintendent of Public Instruction reducing plaintiff’s award of back pay by amount of summer earnings; awarding 6% interest rate per annum on award of back pay; and denying plaintiff’s attorneys fees. We affirm in part and reverse and remand in part.

William Harris raises the following issues on appeal:

1. Did the District Court err in affirming the acting county superintendent and the State Superintendent of Public Instruction’s decision to deduct plaintiff’s summer earnings from the award of back pay?

2. Did the District Court err in affirming the decision of the acting county superintendent and the State Superintendent of Public Instruction that Harris is entitled to an interest rate of 6% per annum on his back wages and benefits?

3. Did the District Court err in affirming the decision of the acting county superintendent and the State Superintendent of Public Instruction in refusing plaintiff attorney fees?

The record reveals the following pertinent facts. Harris was employed by the Livingston School District as a school psychologist from the beginning of the 1973-74 school year through to April 15, 1981. In April 1981 Harris was notified of his dismissal from employment by a letter from the Board of Trustees. Harris requested a statement in writing from the Board regarding the reasons for his termination. The Board did not furnish Harris with a written statement delineating the reasons for his termination but rather referred him to the Park County attorney. Harris appealed the decision of the Board to the Park County Superintendent of Schools pursuant to Section 10.6.101, A.R.M.

The acting county superintendent affirmed the Board of Trustee’s determination that Harris did not have tenure and could be dismissed at will. The State Superintendent affirmed the decision of the acting county superintendent. However, on review, the District Court reversed the acting county and state superintendent on the question of tenure. The District Court found that Harris had tenure and ordered reinstatement and back pay. This Court in Harris v. Bauer (1983), 206 Mont. 480, 672 P.2d 26, 40 St.Rep. 1793, remanded the case to the District Court to determine whether discharge was appropriate in light of this court’s finding that Harris was a “tenured” teacher and if the discharge was wrongful, the measure of damages.

In November, 1983, the District Court remanded this matter to the county superintendent of schools for Park County for determination of the following issues:

1. Was Harris properly and legally discharged as a tenured teacher?

2. If Harris was improperly discharged, was he still employed by the school district?

3. If Harris was still employed what sums were payable to him as salary?

4. If Harris was still employed by the school district, what sums were payable to the Teacher’s Retirement System on his behalf?

5. If Harris was still employed by the school district was he entitled to attorney fees and if so in what amount?

In May, 1985, the acting county superintendent Mike Bowman conducted a subsequent hearing on the matters directed by the District Court. The parties filed an agreed statement of facts as well as written briefs. Both parties presented exhibits, testimony and made oral arguments.

In June, 1985, Bowman found that: Harris’ discharge was not proper or legal as it violated Section 20-4-207, MCA; the dismissal by the Board was void for want of jurisdiction: The Board in the letter of discharge had not notified Harris of the charges against him in sufficient detail to allow Harris to “formulate a defense”: Harris was denied an opportunity to meet the charges prior to dismissal; and the notice itself failed to substantiate a causal relationship between Harris’ alleged violations and the performance of his duties. Bowman concluded that procedural defects had tainted the first dismissal action by the school.

On August 12, 1985, the school district filed a notice of appeal before the State Superintendent from the June 9, 1985 findings of fact and conclusions of law and order of the county superintendent of schools, and from the August 8, 1985 order denying the school district’s petition for rehearing. On August 16, 1985, Harris filed a notice of cross-appeal alleging errors committed by Bowman in his June 9, 1985 findings of fact, conclusions of law and order and his July 5, 1985 judgment. Harris contended Bowman erred in concluding that: 1) Harris was not entitled to attorney fees, and 2) by reducing Harris’ damages by his summer earnings.

In January, 1986, the State Superintendent received the briefs of the parties on all issues and held oral argument. On August 4, 1986, the State Superintendent issued his findings of fact, conclusions of law and order along with an opinion in which he affirmed Bowman’s award to Harris of $110,518.74 plus additional back wages, and benefits accrued since the date of the award. The State Superintendent “asked” for “supplemental requests” so that a “supplemental order” could be issued to cover such wages and benefits.

On September 16, 1986, the State Superintendent issued his judgment. In it, he awarded Harris the sum of $118,192.22 which included Bowman’s award and interest on that award of 6% per annum. The judgment reflected the agreement between the parties to the effect that Harris was not entitled to any additional salary or benefits subsequent to July 1, 1985 as a result of the school district’s second termination of Harris. This “second termination” is on appeal but is not issue in this case. The State Superintendent affirmed the deduction of Harris’ total earnings (which included his summer earnings from the date of his initial termination on April 14, 1981 through July 1, 1985) from his award of back wages. Both parties were involved in the calculation of damages which included the deduction of total earnings. However, Harris specifically noted the amount of his summer earnings in documents filed with the acting county superintendent and raised the issue immediately in his notice of cross-appeal.

Harris then petitioned the District Court for review of the decision of the State Superintendent. The District Court affirmed the findings of fact, conclusions of law and order of the State Superintendent. Harris now appeals to this Court.

The Montana Administrative Procedure Act (MAPA) is applicable in the present case. Both the acting county superintendent and the state superintendent are found within the definition of an agency as defined by MAPA. Sections 2-4-102, 2-3-102, MCA, Yanzick v. School District No. 23, Etc. (1982), 196 Mont. 375, 641 P.2d 431 [1 Ed. Law 1].

The present case constitutes a “contested case” under MAPA.

“Contested case means any proceeding before an agency in which a determination of legal rights, duties or privileges of a party is required by law to be made after an opportunity for hearing . . . .” Section 2-4-102(4), MCA.

The standard of judicial review in contested case proceedings is delineated in Section 2-4-704, MCA, which provides:

“Standards of review. (1) The review shall be conducted by the court without a jury and shall be confined to the record. In cases of alleged irregularities in procedure before the agency not shown in the record, proof thereof may be taken in the court. The court, upon request, shall hear oral argument and receive written briefs.
“(2) The court may not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings. The court may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:
“(a) in violation of constitutional or statutory provisions;
“(b) in excess of the statutory authority of the agency;
“(c) made upon unlawful procedure;
“(d) affected by other error of law;
“(e) clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record;
“(f) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion; or
“(g) because findings of fact, upon issues essential to the decision, were not made although requested.”

In Johnson v. Bozeman School District No. 7 (Mont. 1987), [226 Mont. 134,] 734 P.2d 209, 211, 211-212, 44 St.Rep. 531, 534, this Court held:

“Findings of fact by an administrative agency are subject to the ‘clearly erroneous’ standard of review. Howéver, conclusions of law are subject to the ‘abuse of discretion’ standard of review, where the scope is broader.”

This Court further expounded on the subject in City of Billings v. Billings Firefighters (1982), 200 Mont. 421, 430, 651 P.2d 627, 632, wherein the Court stated:

“Those standards differ due to an agency’s expertise regarding the facts involved and the court’s expertise in interpreting and applying the law.”

The appellant asserts that it was error for his award to be reduced by the amount of his summer earnings during the period in question. We agree.

“Section 2-4-702(1)(b), MCA indicates that issues brought before the agency proceeding automatically become subject to judicial review.” Sorlie v. School Dist. (Mont. 1983), [205 Mont. 22,] 667 P.2d 400, 402, 40 St.Rep. 1070, 1073 [,_ Ed. Law _]. Evidence concerning the issue regarding set-off of summer wages was before the agency. The plaintiff presented a statement of his earnings to the hearings officer dividing summer and school year earnings and as such the issue was raised before the agency at the initial hearing. Once judgment was rendered, appellant filed notice of cross-appeal raising the reduction of his award by his summer earnings as an issue. The issue of whether the plaintiff’s award should be reduced by his summer earnings is properly before this Court.

The amount of money appellant would have received in salary and benefits under his teaching contract had he not been wrongfully discharged is a question of fact, as is the amount of income the plaintiff earned during the period in question. However, the question of whether the appellant’s back pay should be reduced by his summer earnings is clearly a question of law.

The hearings examiner arrived at Harris’ award by adding his annual contract benefits and salary that he would have received for the time period in question had he not been wrongfully discharged. (Harris’ annual compensation was based upon a nine month teaching year.) The county superintendent then reduced this amount by the appellant’s total earnings during this same period. This was done despite the fact that plaintiff presented the acting county superintendent with a statement of earnings that separated income earned during the nine month school year and income earned during the summer.

The appellant derived his replacement income by building fireplaces. The work was seasonal and as such most of the work occurred during the summer months. These summer months were not covered by the appellant’s nine month contract. Had the appellant not been wrongfully discharged; he would have been able to maintain both employments. Clearly his summer employment would not have interfered with his position as a school psychologist.

The purpose of the award in this case is to make the plaintiff whole and compensate him for the salary and benefits he would have received had he not been wrongfully discharged. There is no question but that many teachers by choice or necessity supplement their salaries by “moonlighting” or by obtaining summer jobs. There is no evidence to suggest that the appellant’s summer activities would have interfered with his primary responsibilities as a school psychologist. Had appellant not been wrongfully discharged, he would have enjoyed both incomes. We hold that “moonlighting” or second job income should not offset awards of back pay for teachers unless it can be shown that the recipient of the award would have been unable to hold the “other” job at the same time as the job for which he is receiving the back pay. Whateley v. Skaggs Co. (Colo. 1981), 508 F.Supp. 302; Bing v. Roadway Express, Inc. (5th Cir. 1973), 485 F.2d 441.

The respondents assert that the plaintiff should be precluded from questioning the reduction of the award by the appellant’s 1982-85 summer wages as plaintiff voluntarily agreed to the figures which were submitted to the acting county superintendent. At the administrative hearing, appellant’s counsel was requested to submit information on interest calculations and stated that he would do so. No other requests for information pertaining to damages were made. Respondents have not offered any evidence or case law to support their position that summer wages should be offset against a judgment awarding back pay.

The appellant’s award should be increased by $16,328.18, representing the total summer earnings amount previously deducted from appellant’s award. The plaintiff is entitled to receive interest at the rate of 6% per annum on this additional award of back pay.

The plaintiff next contends that he is entitled to receive interest in the amount of 10% on his back salary, instead of the 6% interest rate previously awarded him. The record shows plaintiff failed to raise the issue of interest rate before the agency or before the State Superintendent in his cross appeal. The plaintiff has also failed to show good cause why this issue was not raised in a prior proceeding. As such this Court will not entertain the issue. Section 2-4-702(1)(b), MCA.

Lastly, we address the issue of whether the plaintiff is entitled to attorney fees.

“The general rule on attorney fees is that absent a specific contract provision or statutory grant, the prevailing party is not entitled to an award of attorney fees either as costs of the action or as an element of damage.”

Pryor School Dist. v. Supt. of Public Inst. (Mont. 1985), [218 Mont. 73,] 707 P.2d 1094, 1099, 42 St.Rep. 1405, 1413, citing Martin v. Crown Life Ins. Co. (1983), 202 Mont. 461, 658 P.2d 1099, 1104, 40 St.Rep. 216, 221.

Appellant states in his reply brief that he “. . . does not rely on contract or other statute authorizing fees except for Section 25-10-711, MCA. Section 25-10-711, provides:

“25-10-711. Award of costs against governmental entity when suit or defense is frivolous or pursued in bad faith. (1) In any civil action brought by or against the state, a political subdivision, or an agency of the state or a political subdivision, the opposing party, whether plaintiff or defendant, is entitled to the costs enumerated in 25-10-201 and reasonable attorney’s fees as determined by the court if:
“(a) he prevails against the state, political subdivision, or agency; and
“(b) the court finds that the claim or defense of the state, political subdivision, or agency that brought or defended the action was frivolous or pursued in bad faith.”

In Dept. of Revenue v. New Life Fellowship (Mont. 1985), [217 Mont. 192,] 703 P.2d 860, 42 St.Rep. 1129, this Court held that Section 25-10-711(1)(b), MCA, requires a finding by the court of bad faith or a frivolous action on the part of the state before attorney fees can be awarded to the opposing party. After reviewing the decision of the Superintendent of Public Instruction, the District Court made findings of fact to the effect that there is no evidence of bad faith on the part of the school district in any of the proceedings. The District Court also found that the school district’s actions in defending itself from the plaintiffs appeal from his termination were not pursued in a frivolous manner. The plaintiff has failed to offer any evidence which contradicts these findings of fact. We will not substitute our judgment for that of the District Court absent a finding of arbitrary or capricious conduct. The plaintiff is not entitled to attorney fees.

Reversed and remanded with instructions to amend the judgment for plaintiff in the amount of $16,328.18, plus interest at a rate of 6% per annum.

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


author: MR. JUSTICE McDONOUGH

text:
    CARELESS CREEK RANCH CO., Plaintiff and Respondent, v. JAMES W. MURNION, Defendant and Appellant.
    No. 87-340.
    Submitted on Briefs Oct. 22, 1987.
    Decided Jan. 19, 1988.
    748 P.2d 475.

      Sandall, Cavan, Smith & Grubbs, John J. Cavan, Billings, for defendant and appellant.
    Crowley, Haughey, Hanson, Toole & Dietrich, William J. Mattix, Billings, for plaintiff and respondent.
   MR. JUSTICE McDONOUGH

delivered the Opinion of the Court.

This is an appeal from an injunctive order issued in the District Court, Fourteenth Judicial District, Wheatland County, requiring Murnion to remove from his reservoir six feet of overflow pipe which had increased the height and extent of the reservoir. We affirm.

Careless Creek Ranch Company owns land in Wheatland and Golden Counties of Montana. Murnion also owns land in Wheatland County adjacent to Careless Creek’s land. Murnion maintains an irrigation reservoir on his property of 16 acres that is entirely surrounded by Careless Creek’s land. When Murnion first purchased the property from his predecessor’s in interest in 1972, the dam was in need of repair. Murnion repaired the dam and in doing so increased the size and capacity of the reservoir. Murnion also raised by four feet the height of the overflow pipe or trickle tube that controls the water level of the reservoir. This adjustment resulted in waters encroaching on to Careless Creek’s land.

In 1978 spring runoff washed out Murnion’s dam. Murnion rebuilt the dam, again increasing the height and length of the dam. Approximately five years later in 1984 Murnion added a six foot extension to the overflow pipe to increase storage capacity. Consequently, more water could encroach upon Careless Creek’s property when the reservoir was full. Careless Creek brought the action below for trespass and injunctive relief to remove the six foot extension of the overflow pipe and prevent the water from backing up on their land. The issue on appeal is whether the injunction was improper because it deprived Murnion of his right of private eminent domain.

The District Court held that Murnion’s Section 85-2-414, MCA, eminent domain argument was not a proper affirmative defense. Because Murnion had not initiated a condemnation action in accordance with Montana’s eminent domain statutes Section 70-30-101, et. seq., MCA, pursuant to Section 85-2-414, MCA, his eminent domain argument was without merit. The court further held that even if the defendant had instituted an action under Section 85-2-414, MCA, he would have no rights under the statute because the statute has been interpreted as granting a right to raise the water level “sufficiently to make the water enter a ditch.” State ex rel Crowley v. District Court (1939), 108 Mont. 89, 104, 88 P.2d 23, 30.

Section 85-2-414, MCA, provides:

“Conduction of water. The right to conduct water from or over the land of another for any beneficial use includes the right to raise any water by means of dams, reservoirs, or embankments to a sufficient height to make the same available for the use intended, and the right to any and all land necessary therefor may be acquired upon payment of just compensation in the manner provided by law for the taking of private property for public use. If it is necessary to conduct the water across the right-of-way of any railroad, it shall be the duty of the owners of the ditch or flume to give 30 days’ notice in writing to the owner or owners of such railway of their intention to construct a ditch or flume across the right-of-way of such railroad, the point at which the ditch or flume will cross the railroad, and the time when the construction of said ditch or flume will be made. If the owner or owners of such railroad or their agent fail to appear and attend at the time and place fixed in said notice, it shall be lawful for the owner or owners of the said flume or ditch to construct the same across the right-of-way of such railroad without further notice to said owner or owners of the railroad.”

Murnion asserts that this statute coupled with Montana’s strong policy in favor of the maximum development and conservation of water resources gives him the power of eminent domain to condemn Careless Creek’s property for his irrigation reservoir. Murnion also argues that Careless Creek cannot obtain injunctive relief and can only pursue an action for inverse condemnation.

An action to condemn land pursuant to Section 85-2-414, MCA, must follow the eminent domain proceedings of Section 70-30-101 et. seq., MCA, “all land necessary therefor may be acquired upon payment of just compensation in the manner provided by law for the taking of private property for public use.” Section 85-2-414, MCA. Section 70-30-202, MCA, provides that all eminent domain proceedings must be commenced by filing a complaint in district court. After the complaint is filed, the district court must set a hearing to determine if a preliminary condemnation order is appropriate. Section 70-30-206, MCA. If the court issues a preliminary condemnation order, the party whose land is being appropriated must file a statement of his claim for just compensation. The appropriator must either accept the claim or condemnation commissioners are appointed to assess compensation subject to appeal. Section 70-30-207, MCA. No proceeding has been commenced by Murnion. He cannot contend that his right of eminent domain has been taken away when he has not even initiated the proper procedures to pursue the action. We hold that the District Court properly interpreted the law.

Although the fact that Murnion has not initiated eminent domain proceedings is determinative, the District Court correctly held that under the facts of this case even if the defendant had initiated eminent domain proceedings he would have no rights under Section 85-2-414, MCA. Section 85-2-414, MCA, supra, allows the raising of water “to a sufficient height to make the same available for the use intended.” Section 85-2-414, MCA. Murnion’s reservoir is already at a sufficient height for the use intended, irrigation. His headgate which conveys water to the ditch is on the bottom of the dam. Therefore, the water level is already raised “sufficient to make the water enter a ditch.” Crowley, 88 P.2d at 30. Affirmed.

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


author: MR. JUSTICE WEBER MR. JUSTICE HARRISON,

text:
    GEORGE SAMUELSON and Helen Samuelson, Plaintiffs and Respondents, v. A.A. QUALITY CONSTRUCTION, INC., and Albert Aldinger, Defendants and Appellants.
    No. 86-546.
    Submitted on Briefs Sept. 10, 1987.
    Decided Jan. 21, 1988.
    Rehearing Denied Feb. 23, 1988.
    749 P.2d 73.

      Nye & Meyer, Jerrold L. Nye, Billings, for defendants and appellants.
    Cox & Simonton, Lorraine A. Schneider, Glendive, for plaintiffs and respondents.
   MR. JUSTICE WEBER

delivered the Opinion of the Court.

Defendant and appellant, A.A. Quality Construction (A.A. Quality), appeals a jury verdict in favor of the plaintiffs, George and Helen Samuelson. Trial was held in the Seventh Judicial District, Dawson County. The jury found A.A. Quality liable to the Samuel-sons in the amount of $11,158.90 for damages sustained relating to the construction of the Samuelsons’ home by A.A. Quality. We reverse and remand.

We address the following three issues on appeal:

1. Is the implied warranty of habitability applicable under the facts of this case?

2. Did the District Court err by refusing to admit the construction contract into evidence?

3. Did the District Court err by refusing defendant’s proposed Instruction No. 19 which pertained to assumption of risk?

In March 1981, A.A. Quality agreed to sell two lots and construct a home in Glendive, Montana, for the Samuelsons. The total contract price was $155,804. Prior to entering the contract, George Samuelson asked Albert Aldinger, president of A.A. Quality, whether the foundation of the home should be equipped with any special drainage devices to help ensure proper drainage of water away from the foundation. According to George Samuelson’s testimony, Mr. Aldinger advised them that precautionary drain devices were not necessary. In contrast, A.A. Quality asserts that Mr. Aldinger merely explained that he had built 7 or 8 other homes in the same general area and those homes had not required any special drainage devices. Mr. Aldinger also testified that the decision not to include such devices was left to the Samuelsons. A.A. Quality did not install drainage devices in the home.

During construction, the Samuelsons noted that the basement area accumulated water several times. Mr. Aldinger initially explained that the water entered the structure through window cutouts that were not yet covered with glass. Later the parties realized that the basement had a water seepage problem. A.A. Quality attempted to correct the, problem by installing an exterior cement slab to divert water and by repairing rock pockets in the foundation.

The Samuelsons began to occupy the house in December 1981 and did not experience water seepage during the winter months. In the spring of 1982, water seepage began to reoccur and continued intermittently during wet periods.

The affected basement areas included a guest bedroom, storage area, recreation room and a crawl space. The record indicates that the seepage caused problems in many respects: furniture was removed from the guest bedroom, portions of sheetrock were removed from two walls in an attempt to locate the problem, the carpeting was rolled back for weeks at a time to allow it to dry and was entirely removed on one occasion, floor heaters were used to dry the wet areas, a pump was used to clear the crawl space of excess water, use of the recreation room was restricted, items in the storage room had to be raised above the floor, and a vacuuming service was required on several occasions to vacuum water from the basement.

As the water continued to reoccur and the efforts of A.A. Quality to halt the problem proved unsuccessful, the working relation between A.A. Quality and the Samuelsons became increasingly strained. Eventually, A.A. Quality refused to make further attempts to remedy the problem. In the fall of 1983, the Samuelsons hired another contractor. The contractor excavated the cement slab and backfill from around the house and installed a drain pipe along the foundation to carry water away from the house. These efforts apparently stopped the water seepage.

The Samuelsons brought an action against A.A. Quality and Albert Aldinger. Aldinger was dismissed as a party defendant prior to trial. The Samuelsons proceeded to trial against A.A. Quality on theories of negligence and breach of the warranties of habitability and workmanlike construction. The jury found in favor of the Samuelsons, and A.A. Quality appeals.

I

Is the implied warranty of habitability applicable under the facts of this case?

We considered this implied warranty of habitability initially in Chandler v. Madsen (1982), 197 Mont. 234, 642 P.2d 1028. In Chandler, the footings and foundation of the home began to settle due to a condition of the soil upon which the house was built. Doors and locks failed to operate, walls cracked, floors bulged, windows broke, plumbing bent, fixtures and walls separated, and the foundation lowered as much as 3.6 inches in spots. The home truly was uninhabitable. Chandler, 642 P.2d at 1030. At that time, we held that the builder-vendor of a new home impliedly warrants that the residence is constructed in a workmanlike manner and is suitable for habitation. Chandler, 642 P.2d at 1031. We again considered the warranty in Degnan v. Executive Homes, Inc. (Mont. 1985), [215 Mont. 162,] 696 P.2d 431, 42 St.Rep. 262. In Degnan the home was built upon unstable ground. The hillside began slipping downward causing severe structural damage to the home rendering the home truly uninhabitable. 696 P.2d at 433. In that case we stated that “[t]he implied warranty places on the builder-vendor liability for defects in a structure which make it uninhabitable.” Degnan, 696 P.2d at 434.

In Yepsen v. Burgess (1974), 269 Or. 635, 525 P.2d 1019, upon which we relied in Chandler, the Oregon Supreme Court made an observation which is applicable to the implied warranty of habitability in Montana: “A more precise definition of the scope of this warranty must await delineation on a case by case basis.” Yepsen, 525 P.2d at 1022. In both Chandler and Degnan, the dwellings were damaged so substantially as to preclude their use as residences. That is not the situation in the present case. Here the water collected next to the Samuelson home and eventually seeped into the basement after snow melt and rainfall. The evidence demonstrates that the water problem was an inconvenience but did not render the home uninhabitable.

We are now required to set forth a more precise definition of the implied warranty of habitability. In Chandler, 642 P.2d at 1032, we pointed out that the basic concern in applying the warranty is whether the defect relates to “useful occupancy” of the building. We hold that the implied warranty of habitability of a dwelling house is limited to defects which are so substantial as reasonably to preclude the use of the dwelling as a residence. That limitation is consistent with Chandler and Degnan. Even if the record is reviewed in its most favorable light from the standpoint of the Samuelsons, the evidence does not show that the defects were substantial enough reasonably to preclude use as a residence. We hold that the implied warranty of habitability is not applicable under the facts of this case. As a result, the case will be remanded to the District Court for retrial on theories other than the implied warranty of habitability.

II

Did the District Court err by refusing to admit the construction contract into evidence?

The District Court refused to admit the contract between the Samuelsons and A.A. Quality because the court felt the contract was irrelevant. The parties agreed in discussions with the court that breach of contract was not being litigated. In spite of this, A.A. Quality argued that the contract was relevant to the implied warranty of habitability issue. In view of our determination on that issue, we need not rule on the relationship of the contract to the implied warranty of habitability.

A.A. Quality further argues that the contract was relevant to the negligence issue. All parties agree that the contract did not include a drainage system. We do not find it necessary to rule on the admissibility of the contract at the present time. It may be that the theories on retrial may require the admission of the contract.

III

Did the District Court err by refusing defendant’s proposed Instruction No. 19 which pertained to assumption of risk?

A.A. Quality contends that the trial judge should not have refused its proposed Instruction No. 19, which would have instructed the jury in terms of assumption of risk. Assumption of risk is an affirmative defense which must be plead affirmatively. Rule 8(c), M.R.Civ.P. “If an affirmative defense is not plead, it is generally waived.” Chandler, 642 P.2d at 1032. This affirmative defense was not plead, and the District Court correctly refused to instruct the jury on assumption of risk.

In view of our holding, we need not consider A.A. Quality’s proposed Instruction No. 16 which defined warranty. We reverse the District Court judgment and remand for retrial on the various theories with the exception of the implied warranty of habitability.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICE HUNT, THE HON. ROY RODEGHIERO, District Judge, sitting for MR. JUSTICE GULBRANDSON and THE HON. PETER RAPKOCH, District Judge, sitting for MR. JUSTICE McDONOUGH, concur.

MR. JUSTICE HARRISON,

dissenting:

I dissent. In Chandler v. Madsen (1982), 197 Mont. 234, 642 P.2d 1028, this Court took a giant step forward in holding that a builder-vendor of a new home impliedly warrants that the residence is constructed in a workman-like manner and is suitable for habitation. We note that two major policy considerations support such a warranty. The first being that the buyer is in an unequaled bargaining position, and second that the builder-vendor is in a better position to discover, examine, and prevent defects. I feel the majority’s holding in this opinion has taken a giant step backwards in protecting the consumer.

The Samuelsons had just paid $155,000 for their home. The affected areas in their basement included a guest bedroom, a storage area, and a recreation room. To find that their home was not damaged sufficiently to warrant our following the case of Chandler, shocks my credibility. As noted in the facts of this opinion, it cost $11,158.90 to properly remedy the problems and make the home livable. To hold that having as much as six inches of water in the basement in a new home does not violate the warranty of habitability is, in my view, a mistake. Had the basement not been repaired at a cost of over $11,000 by another contractor, about all that it could have been used for would have been a fishery during the periods that it leaked. Surely, a homeowner is entitled to more than that.

MR. JUSTICE SHEEHY joins in the foregoing dissent of MR. JUSTICE HARRISON.


author: MR. CHIEF JUSTICE TURNAGE

text:
    In re the MARRIAGE OF DIXIE RAE HALVERSON, Petitioner and Respondent, and LARRIE E. HALVERSON, Respondent and Appellant.
    No. 87-170.
    Submitted on Briefs Nov. 13, 1987.
    Decided Feb. 2, 1988.
    749 P.2d 518.

      Browning, Kaleczyc, Berry & Hoven, J. Daniel Hoven, Helena, for respondent and appellant.
    Wright, Tolliver & Guthals, Kenneth D. Tolliver, Billings, for petitioner and respondent.
   MR. CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Larrie E. Halverson appeals a judgment of the Fifteenth Judicial District Court, Daniels County, dividing marital property of Larrie and Dixie Halverson.

We affirm.

Appellant Larrie Halverson raises the following issues:

1. Did the District Court abuse its discretion when it valued a portion of the Halversons’ marital assets as of the date of the parties’ separation and valued the remainder of the assets as of the date of dissolution?

2. Did the District Court abuse its discretion when it held that Dixie was entitled to temporary maintenance in accord with the parties’ October 4, 1984, stipulation?

Larrie and Dixie Halverson were married on June 19, 1957. During their marriage of nearly thirty years, Larrie and Dixie accumulated marital property consisting of 1,200 acres of deeded farm land, 1,035 acres of agricultural state leases, approximately 24,000 bushels of grain in storage, various farm machinery and miscellaneous personal property. Larrie and Dixie also owe $149,000 to the Federal Land Bank of Sidney and approximately $29,000 to the Citizens State Bank of Scobey.

In February 1984, Dixie and Larrie separated. Larrie moved from the couple’s rented home in Scobey to the farm property. Larrie managed the farm property through the summer of 1984. Dixie resided in Scobey and continued in her job as manager of the local radio station. Dixie did not participate in any farm management activities during 1984.

On June 4,1984, Dixie petitioned to dissolve the marriage. On September 17, 1984, Dixie filed a motion seeking temporary child support and maintenance. Subsequently, the District Court ordered Larrie to show cause why he should not be required to pay $1,000 per month in maintenance. The Court also restrained Larrie from disposing of real or personal property. Prior to hearing, the parties stipulated that Larrie would pay $600 per month in maintenance during the pendency of the action. On October 4, 1984, the District Court granted petitioner Dixie’s motion for a decree of dissolution. The court reserved its ruling on property distribution and debt obligations.

As stated earlier, Larrie managed the farm following the parties’ separation in February 1984. However, Larrie’s farming decisions for 1984 were much different than in earlier years. Larrie did not obtain crop insurance. Larrie elected to seed all land rather than leaving roughly half of it in summer fallow. His election disqualified the Halversons from any federal farm subsidy programs. Larrie then took an extended vacation to Alaska during the summer of 1984. Larrie testified that he “was mistaken about the final date for signing up for [crop] insurance” and failed to do so. Dixie testified that, prior to the insurance deadline, she warned Larrie to purchase crop insurance.

Larrie’s 1984 farming decisions resulted in a poor 1984 farm yield. The Halversons received no federal payments or crop insurance proceeds. As a result, on October 30, 1984, Larrie was forced to borrow $21,000 to pay the 1984 land mortgage payment.

On April 6, 1985, Larrie and Dixie entered into a farm partnership agreement. The farm partnership agreement required that the parties evenly split all farm proceeds and debts. Subsequent to entering the agreement, Larrie, over Dixie’s objection, applied $23,000 of the 1985 farming proceeds to Larrie’s October 30, 1984, note.

Issue 1

Did the District Court abuse its discretion when it valued a portion of the Halversons’ marital assets and debts as of the date of separation and valued the remainder of assets and debts as of the date of dissolution?

The standard of review of division of marital property is found in In Re Marriage of Hall (Mont. 1987), [228 Mont. 36,] 740 P.2d 684, 686, 44 St.Rep. 1321, 1323, which provides:

“As stated by this Court, our functions are as limited as the District Court’s functions are broad. We have concluded that in a property distribution review in marriage dissolution, this Court will reverse a District Court only upon a showing that the District Court has acted arbitrarily or has committed a clear abuse of discretion, resulting in either instance in substantial injustice.”

In its findings of fact, the District Court found that Larrie “conducted the farm and ranch operation following the parties’ separation without participation of [Dixie].” Accordingly, the court valued the farm operation as of the date of separation to avoid “unfairness to the parties which would have resulted from attributing the husband’s post separation losses to the wife.”

The District Court also found that following separation, the parties’ farm land continued to decline in value due to market conditions which were the fault of neither the husband nor the wife. As a result, the court valued the parties’ land, farm equipment and personal property at the date of dissolution.

Larrie cites the general rule that when valuing marital estates the District Court is required to determine the net worth of the parties at the time of dissolution. In Re Marriage of Kramer (1978), 177 Mont. 61, 67, 580 P.2d 439, 442; Downs v. Downs (1976), 170 Mont. 150, 551 P.2d 1025, appeal after remand 181 Mont. 163, 165, 592 P.2d 938, 939 (1979). Therefore, Larrie argues the District Court abused its discretion when it valued the farm operation at the date of separation in February 1984.

A review of the record supports the District Court’s finding that Larrie excluded Dixie from her normal role as co-manager of the Halverson farm. Larrie, contrary to the Halversons’ traditional farm practices, seeded the land “fence to fence.” Larrie’s decision to seed fence to fence excluded the Halverson farm from any federal farm subsidy programs. Further, he refused, over Dixie’s objection, to purchase crop insurance. The Halversons’ low farm yield is directly attributable to Larrie’s 1984 management decisions.

Additionally, Larrie refused or was unable to testify to the amount of 1984 farm proceeds. He testified that he used the 1984 farm proceeds, including sales of an undisclosed amount of grain in storage, to make numerous unrecorded “cash” purchases. Larrie refused or was unable to testify to the amount of the above-mentioned purchases. The District Court was then faced with the unenviable task of dividing an unknown amount of farm assets.

The District Court in its findings of fact stated:

“The Court finds the most equitable and clearest manner with which to deal with the parties’ post-separation finances is to value these current assets and liabilities at time of separation for purposes of property division.
“The husband’s 1984 farming operation is easily accounted for. The husband had complete control and, fairly, should be held responsible for the 1984 results. Equitably, it is fair to charge him with the December, 1984, Federal Land Bank payment for the use he made of the family farm in 1984. He, then, would also be entitled to the fruits of his 1984 crop efforts which he, in fact, had. Therefore, the indebtedness of $23,600.00 incurred post-divorce and the 1984 crop proceeds are attributed solely to the husband.
“To approach this matter otherwise would present a nearly insoluble problem. The husband had sole access to and control of the parties’ grain and funds in 1984. He testified that he purchased numerous antique firearms, post-separation, for cash. He declined to have such items appraised deeming them “irrelevant” to this proceeding. On this state of the evidence, it is impossible for the Court to fairly allocate the 1984 crop year between the parties. The Court declines to attempt the impossible.”

The District Court did not abuse its discretion when it valued the Halversons’ farm operation at the date of separation. If the court had valued the farm operation as appellant Larrie suggests, Dixie would be forced to share responsibility of 1984 debts incurred solely by Larrie.

We note the general rule that proper distribution of marital property requires a finding of net worth at or near the time of dissolution. Hamilton v. Hamilton (1980), 186 Mont. 282, 283, 607 P.2d 102, 103. However, when the application of this rule would create an inequitable disposition, it is proper for the District Court to utilize a differing valuation date. In Re the Marriage of Wagner (Mont. 1984), [208 Mont. 369,] 679 P.2d 753, 757, 41 St.Rep. 409, 414; In re the Marriage of Lippert (Mont. 1981), [_ Mont. _,] 627 P.2d 1206, 1208, 38 St.Rep. 625; In Re Marriage of Hunter (1982), 196 Mont. 235, 239, 639 P.2d 489, 491.

The District Court did not abuse its discretion when it valued the Halversons’ marital assets.

Issue 2

Did the District Court abuse its discretion when it held that Dixie was entitled to temporary maintenance in accord with the parties’ October 4, 1984, stipulation?

Prior to the October 4, 1984, show cause hearing, Dixie and Larrie stipulated that Larrie would pay Dixie $600 per month until their property was divided and distributed. The stipulation provided in pertinent part: “That by October 8, 1984, respondent Larrie E. Halverson would pay the petitioner $600 in temporary maintenance, and said payments to continue during the pendency of this action and to be paid to the petitioner by respondent on the 1st of each month.” [Emphasis added.]

On April 9, 1985, Larrie and Dixie entered into a farm partnership agreement. Larrie and Dixie agreed to equally divide farm profits and losses. Additionally, Larrie was to receive wages of $500 per month. The farm partnership agreement did not make reference to the parties’ October 4,1984, stipulation. Nor did the agreement contain language addressing the maintenance issue. Subsequent to entering the farm partnership agreement, Larrie discontinued maintenance payments.

In its May 12, 1986, findings of fact and conclusions of law, the District Court found Larrie bound by the stipulation. The court noted that Larrie had failed to modify his maintenance obligation pursuant to Section 40-4-208, MCA, and was therefore responsible for the stipulated maintenance.

Larrie contends that his maintenance obligation was terminated when he and Dixie entered the farm partnership agreement. Larrie claims the parties intended the farm partnership would terminate maintenance. However, Larrie failed to produce evidence that the parties’ intended to terminate maintenance. Further, the farm partnership agreement is silent to the maintenance issue.

The District Court properly held that the farm partnership agreement did not terminate the maintenance stipulation:

“The husband contends that his obligation to make support was eliminated by the 1985 farm partnership agreement between the parties. However, there is no reference to modification of the stipulated maintenance within the four corners of the agreement. The wife testified that there was no mention of modification of the maintenance prior to her signing the farm partnership agreement. The Court cannot find, on this evidence, a factual basis for terminating a maintenance stipulation which was part of the dissolution proceedings.

Larrie next contends the District Court failed to make proper findings of need and duration required by Section 40-4-121 and Section 40-4-203, MCA, prior to awarding temporary maintenance. However, the District Court is not required to make such findings when the parties voluntarily entered into the maintenance agreement.

We hold the District Court did not abuse its discretion when it held that Dixie was entitled to temporary maintenance in accord with the maintenance stipulation.

Affirmed.

MR. JUSTICES HARRISON, WEBER, HUNT and McDON-OUGH concur.


author: MR. JUSTICE WEBER

text:
    STATE OF MONTANA, ex rel., PACIFIC EMPLOYERS INSURANCE CO., Relator, v. THE WORKERS’ COMPENSATION COURT OF THE STATE OF MONTANA, the Honorable Timothy W. Reardon, Presiding and Peter J. Worts, Respondents.
    No. 87-454.
    Submitted Jan. 6, 1988.
    Decided Feb. 3, 1988.
    749 P.2d 522.
    Utick & Grosfield, Andrew J. Utick argued, Helena, for relator.
    Lloyd E. Hartford argued, Billings, and Timothy J. Reardon, Workers’ Compensation Judge, Helena, for respondents.
    Crowley Law Firm, T.G. Spear, Billings, for America Ins. Co., et al., amici curiae.
    Faye B. McKnight and Roy Andes, Helena, for Family Mediation Services, et al., amici curiae.
    James E. Vidal, Kalispell, and John H. Bothe, Columbia Falls, for Arco Metals, amicus curiae.
   MR. JUSTICE WEBER

delivered the Opinion of the Court.

This is an application for writ of supervisory control. Pacific Employers Insurance Company (Pacific) asks the Court to overturn the determination of the Workers’ Compensation Court that the 1987 amendments to the Workers’ Compensation Act concerning dispute resolution and mediation do not apply to this case. We have accepted original jurisdiction. We reframe the issue as follows: Do the 1987 amendments to the Workers’ Compensation Act concerning dispute resolution and mediation apply retroactively to a case in which a petition was filed with the Workers’ Compensation Court before July 1, 1987? We now hold that the amendments do not apply in such a case.

On January 30,1987, claimant Mr. Worts filed a Petition for Emergency Hearing with the Workers’ Compensation Court, asking that the court rule that he was entitled to temporary total disability benefits from a work-related injury suffered in 1983. Pacific is the insurer. A pretrial conference was held on February 18,1987. The trial was not scheduled until July 20, 1987.

In the meantime, the legislature enacted 1987 Mont. Laws 464 (Ch. 464), effective July 1, 1987. The pertinent parts of that bill are codified at Sections 39-71-2401 and 2406 through 2411, and 39-71-2905, MCA. The bill provides for mandatory mediation before claims may be tried in the Workers’ Compensation Court.

Based upon Ch. 464, Pacific filed a motion to dismiss. Mr. Worts opposed the motion, arguing that the amendments did not apply to cases in which a petition was filed with the Workers’ Compensation Court prior to the effective date of Ch. 464. The court denied the motion to dismiss, and Pacific filed its application for writ of supervisory control. This Court granted oral argument on the issue stated above. In addition, several amicus curiae briefs have been filed.

Do the 1987 amendments to the Workers’ Compensation Act concerning dispute resolution and mediation apply retroactively to a case in which a petition was filed with the Workers’ Compensation Court before July 1, 1987?

The Workers ‘ Compensation Court is a creature of statute. It has no constitutional status, as its jurisdiction is fixed by the legislature. Under the law prior to July 1, 1987, the Workers’ Compensation Court had exclusive jurisdiction to make determinations concerning disputes regarding benefits when a party filed a petition with the court. Section 39-71-2905, MCA (1985).

In the comprehensive amendments to the Workers’ Compensation Act made in Ch. 464, the legislature provided that after July 1,1987, the parties must resort to mediation before the Workers’ Compensation Court acquires jurisdiction of a dispute over benefits. Thus the legislature redefined the court’s acquisition of jurisdiction. The legislature said nothing in Ch. 464, however, as to the effect of the amendments on disputes over which the court had already acquired jurisdiction.

The pertinent statutes are these:

“39-71-2401. Disputes-jurisdiction-evidence-settlement requirements-mediation. (1) A dispute concerning benefits arising under this chapter or chapter 72, other than the disputes described in subsection (2), must be brought before a department mediator as provided in this part. If a dispute still exists after the parties satisfy the mediation requirements in this part, either party may petition the workers’ compensation court for a resolution.
“39-71-2406. Purpose. The purpose of this part is to prevent when possible the filing in the workers’ compensation court of actions by claimants or insurers relating to claims under chapter 71 or 72 of this title if an equitable and reasonable resolution of the dispute may be effected at an earlier stage. To achieve this purpose, this part provides for a procedure for mandatory, nonbinding mediation.
“39-71-2408. Mandatory, nonbinding mediation. (1) Except as otherwise provided, in a dispute arising under chapter 71 or 72 of this title the insurer and claimant shall issue a report following the mediation process recommending a solution to the dispute before either party may file a petition in the workers’ compensation court. (2) The resolution recommended by the mediator is without administrative or judicial authority and is not binding on the parties.
“39-71-2905. Petition to workers’ compensation judge. A claimant or an insurer who has a dispute concerning any benefits under chapter 71 of this title may petition the workers’ compensation judge for a determination of the dispute after satisfying dispute resolution requirements otherwise provided in this chapter. The judge, after a hearing, shall make a determination of the dispute in accordance with the law as set forth in chapter 71 of this title. If the dispute relates to benefits due a claimant under chapter 71, the judge shall fix and determine any benefits to be paid and specify the manner of payment. After parties have satisfied dispute resolution requirements provided elsewhere in this chapter, the workers’ compensation judge has exclusive jurisdiction to make determinations concerning disputes under chapter 71, except as provided in 39-71-317 and 39-71-516

Chapter 464 also included Section 72, which is not in the Montana Code Annotated. It states as follows:

“Section 72. Applicability. (1) Sections 8 and 52 through 57 [the mediation statutes] apply retroactively, within the meaning of 1-2-109, to all injuries and diseases, regardless of the date of occurrence. With respect to rehabilitation disputes, sections 8 and 52 through 57 apply retroactively, within the meaning of 1-2-109, unless the division had jurisdiction over the dispute under the law in effect at the time of injury.
“(2) The remaining portions of this act apply only to injuries, diseases, and events occurring after June 30, 1987.”

In the present case, a petition was filed in the Workers’ Compensation Court before July 1, 1987. Ch. 464 provides for mediation before a petition is filed. As is apparent from Section 39-71-2406, MCA, the purpose of Ch. 464 is to prevent the filing of petitions with the Workers’ Compensation Court. This suggests that Ch. 464 was not intended to be applied where a filing had already taken place. That is consistent with Section 39-71-2905, MCA (1985), which granted jurisdiction to the court upon the filing of a petition prior to July 1, 1987. We conclude that the statement in Section 72 that the mediation statutes apply to “all injuries and diseases, regardless of the date of occurrence” does not override these implied limitations. As a matter of statutory construction, the purpose of Ch. 464 would not be served if it were construed to include cases in which petitions had already been filed with the Workers’ Compensation Court. We therefore hold that the 1987 amendments to the Workers’ Compensation Act concerning dispute resolution and mediation do not apply retroactively in cases in which petitions were filed with the Workers’ Compensation Court before July 1, 1987.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, SHEEHY, GULBRANDSON and HUNT and MR. CHIEF JUSTICE HASWELL, retired, sitting for MR. JUSTICE McDON-OUGH concur.


author: MR. JUSTICE HUNT

text:
    WILLIAM A. SELVIDGE and Virgie M. Renner, Plaintiffs and Appellants, v. MARCUS McBEEN and Nancy L. McBeen; Robert Payne; and Payne Realty and Housing, Inc., Defendants and Respondents.
    No. 87-192.
    Submitted on Briefs Dec. 17, 1987.
    Decided Feb. 8, 1988.
    750 P.2d 429.

      Lloyd E. Hartford, Billings, for plaintiffs and appellants.
    Richard J. Carstensen, Richard W. Anderson; Anderson, Edwards & Molloy, Billings, for defendants and respondents.
   MR. JUSTICE HUNT

delivered the Opinion of the Court.

This claim of fraud comes to this Court from the Sixth Judicial District, Park County. Following a bench trial, defendants, Nancy McBeen, Robert Payne and Payne Realty and Housing, Inc. were dismissed from the suit. The trial court found that defendant, Marcus McBeen had fraudulently misrepresented the income of the property and business that he sold to plaintiffs. Plaintiffs/appellants Selvidge and Renner were awarded $62,238 in actual and $10,000 in punitive damages. They appeal the amount awarded and the dismissal of defendants Nancy McBeen, Robert Payne and Payne Realty and Housing, Inc. In addition, they appeal the failure of the court to award them attorney fees. Defendant Marcus McBeen cross-appeals the judgment against him.

We affirm the District Court.

The issues presented for our review are as follows:

1. Whether the District Court erred in dismissing Robert Payne and Payne Realty and Housing, Inc. from this lawsuit.

2. Whether the District Court erred in dismissing Nancy McBeen from this lawsuit.

3. Whether the District Court erred in the amount of damages awarded.

4. Whether the District Court erred by failing to award reasonable attorney fees to appellants.

McBeen cross-appeals with issues 5-7:

5. Whether the legal requirements to prove fraud were supported by the facts.

6. Whether appellants alleged losses were proximately caused by Marcus McBeen’s alleged misrepresentations.

7. Whether punitive damages were properly awarded.

In 1982, defendants Marcus and Nancy McBeen purchased the Johnson-Gardner Saloon in Gardiner, Montana. They paid $6,000 plus an exchange of property for the saloon. They operated the saloon from February 2 to November 25, 1982, then closed for the winter due to slow business. Since 1977, the saloon had changed hands three times. The sales prices were $57,500 in 1977, $70,000 in 1978, and $60,128 in 1980.

The McBeen’s hired managers for the saloon and had very little to do with the operation of it except that Nancy McBeen wrote some payroll checks and did some bookkeeping.

McBeens made $10,000 to $20,000 of building improvements during the time they owned the saloon.

In January, 1983, Marcus McBeen contacted Robert Payne and Payne Realty and Housing, Inc. about listing the business for sale. The purchase price was listed at $120,000 plus cash for saleable inventory, with interest at 11%. At the time of the listing, Marcus McBeen told Payne that the saloon grossed $71,233 in a little less than a 10 month period. The purchase price included the saloon building, a rental house, the land, bar equipment and fixtures and a Montana all beverage license.

After personally viewing the property, Payne ran an ad in the Billings Gazette as follows:

“Liquor Bar
“Located in Gardiner, MT. Recently remodeled, living quarters, priced to sell at $120,000 with good terms.”

Appellants, William Selvidge and Virgie Renner saw the ad, drove to Gardiner and met with Marcus McBeen. They discussed the sale of the business with McBeen and saw the property although the bar was not operating at that time.

Appellants were originally from California, where Selvidge owned and managed a bar/restaurant and Renner worked as a waitress for many years. Appellants investigated other business prospects in Gardiner and continued to show an interest in the Johnson-Gardner Saloon.

After meeting with McBeen, appellants and Marcus McBeen met with Robert Payne. Payne relayed to appellants the gross sales figure for 1982 of $71,233. Marcus McBeen told them that sales had actually been significantly higher, eventually stating that $83,779 was the correct amount.

On February 24, 1983, after numerous (12-14) visits to Gardiner, appellants offered McBeens $110,000 with 10% interest for the saloon. McBeens and appellants reached an agreement on the purchase price for $115,000 with 10!/2 % interest. Prior to the sale, Payne cautioned the appellants that he could not vouch for the business figures as all anyone had to rely on was Marcus McBeen’s statements. The records from the previous owners were not available and McBeens’ records were allegedly at their tax accountants, being used to prepare their 1982 taxes. Payne advised appellants to seek their own legal counsel and went so far as to attach the following special provisions to the final sales contract.

“This sale is subject to the following items:
“1. Buyers being able to inspect and be satisfied with the books (income and expenses) for the year 1982.
“2. Buyers being able to have legal counsil [sic] review all previous contracts that are still in effect and a preliminary title policy on the property and being fully satisfied with them.”

Appellants demanded that McBeens decide within three days after their offer. On February 26, 1983, the McBeens accepted and a “Buy/Sell Agreement” was executed containing the following standard clause:

“9. Purchaser enters into this agreement in full reliance upon his independent investigation and judgment and there are no verbal or other agreements which modify or affect this agreement.”

On March 14, 1983, prior to the execution of the final contract for deed, Marcus McBeen met with appellants at Payne’s office to review the records of the bar. The man who supplies poker and game machines to all Gardiner bars stopped by and talked briefly with appellants, presumably about the machines which were in the Johnson-Gardner Saloon at the date of the sale. At this meeting, appellants were given a typewritten sheet titled “Johnson-Gardner 1982 Operating Statement.” Payne again informed appellants that the figures were unsubstantiated by anyone except Marcus McBeen.

Following this meeting on March 31, 1983, an attorney for both parties drew up a formal contract for deed. Paragraph VII of the contract contained the following provisions:

“Examination of Property. The purchasers declare they are purchasing this property on their own examination and judgment and not through any representations to them made by the sellers or their agents as to location, value, future value, income therefrom or as to its production.”

After about four months of operating the saloon, appellants advertised it for sale. They asked Robert Payne to list it for $225,000. He refused to list it at such an exorbitant price, even though appellants told him they thought it was a fair price. Appellants ended up listing it for $225,000 themselves. They could not sell the saloon for the desired amount, so appellants continued to own and operate it until the time of trial.

When the saloon failed to make as much as appellants anticipated, they filed suit alleging fraud and misrepresentation by Marcus and Nancy McBeen, Robert Payne and Payne Realty and Housing, Inc.

In the course of discovery, appellants became aware that McBeen’s “1982 Operating Statement” was, as described by a CPA who reviewed the business records, “grossly inaccurate.” The District Court made very thorough and elaborate findings with regard to Marcus McBeen’s alleged fraud and misrepresentations and appellant’s damages. These will be enumerated and discussed further in the following opinion.

Issue No. 1

The appellant’s first issue alleges error by the District Court for dismissing Robert Payne and Payne Realty and Housing, Inc. from this lawsuit.

After hearing a nonjury trial, the District Court made 63 findings of fact. Included in the findings of fact were:

“29. Payne had no knowledge of and made no representation to plaintiff's concerning the profitability of the bar. Neither did he conceal anything he knew of from plaintiffs.
“31. Plaintiffs knew that Payne himself had not audited the books and that all figures presented came exclusively from Marcus McBeen. Plaintiffs had the right to demand even further records had they wanted them, and they were aware of that right. Plaintiffs by their own testimony admit that they entered into and closed the transaction with fewer records than they had hoped to see.
“32. Plaintiffs did not rely on Robert Payne for any representations, assurances or confirmation as to the profitability of said business, and understood that Payne Realty and Housing Inc., acting through Robert Payne, was McBeens’ real estate agent in the transaction, whose function it was to bring the parties together, show the property, and arrange for the preparation of the closing documents.
“33. Payne at no point prior to the closing of the transaction had any access to McBeens’ 1982 tax returns. In fact, the returns had not yet been prepared, and plaintiffs knew it. Plaintiffs voluntarily completed the transaction, signed the contract for deed, and thereby waived any reliance upon tax returns.
“34. The property which plaintiffs purchased was exactly what they intended to buy. All buildings, lands, fixtures, licenses and appurtenances were substantially as represented by McBeens, there were no hidden or undisclosed defects, and Virgie Renner expressly testified plaintiffs had no complaint as to the physical assets.”

As a consequence of these findings of fact, the District Court concluded that “Plaintiffs failed to prove any claim for damages against Robert Payne individually or against Payne Realty and Housing, Inc., the complaint against them should be dismissed with prejudice, and defendants Payne should have judgment against plaintiffs for their allowable costs of $944.05.”

In a nonjury trial, the District Court judge makes the findings of fact and conclusions of law. Tolson v. Tolson (1965), 145 Mont. 87, 399 P.2d 754. Findings of fact will not be overturned unless there is a clear preponderance of evidence against them. Round v. Reikofski (Mont. 1985), [216 Mont. 54,] 699 P.2d 72, 42 St.Rep. 634. Also, we view the findings in a light most favorable to the prevailing party. General Mills, Inc. v. Zerbe Bros, Inc. (Mont. 1983), [207 Mont. 19,] 672 P.2d 1109, 40 St.Rep. 1830. The appellants have the burden of showing by a clear preponderance of the evidence that the findings of fact are incorrect before this Court will disturb those findings. Cameron v. Cameron (1978), 179 Mont. 219, 587 P.2d 939.

The court’s dismissal of defendants Payne fell within the District Court’s powers under Rule 41(b), M.R.Civ.P.:

“. . . After the plaintiff, in an action tried by the court without a jury, has completed the presentation of his evidence, the defendant, without waiving his right to offer evidence in the event the motion is not granted, may move for a dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. The court as trier of the facts may then determine them and render judgment against the plaintiff

In the present case, Payne recommended that the appellants hire their own attorney, as he could not verify the amounts which Marcus McBeen alleged to be the true and accurate accountings of the bar’s business. Section 37-51-321, MCA, prohibits real estate brokers from committing various acts. The key to these acts is knowledge and intent. The evidence presented in this case supports the finding that Payne had no knowledge of the accurate accounting figures relating to the saloon’s business, did not intentionally misrepresent any information to appellants, nor did he advertise in a misleading or untruthful manner. Payne acted in good faith as realtor and was properly dismissed from this action.

Issue No. 2

Appellants contend that it was also error for the District Court to dismiss Nancy McBeen from this suit.

The District Court found as fact that “[t]here was no evidence presented to establish that Nancy McBeen knew of any of said misrepresentations, communicated the inaccurate information to anyone, or participated in any way in any fraud or deceit. She should therefor be and was dismissed as defendant at the end of plaintiffs case.”

When reviewing a Rule 41(b) dismissal of a defendant, the reviewing court must view the evidence in a light most favorable to the plaintiff. However, this does not relieve the plaintiff of the burden of producing evidence in support of each element essential to recovery. Nixon v. Huttinga (1974), 163 Mont. 499, 501, 518 P.2d 263, 265. Appellants showed only that Nancy McBeen (1) was co-owner of the Johnson-Gardner Saloon before the sale to appellants; (2) had some responsibilities for bookkeeping for the saloon; and, (3) was present at a few of the meetings of McBeens and appellants concerning the sale of the saloon.

Nancy McBeen, along with her husband, was accused of fraud and misrepresentation. The elements of fraud are: (1) a representation; (2) its falsity; (3) its materiality; (4) the speakers knowledge of the truth; (5) the intent that it should be acted upon in the manner contemplated; (6) the hearer’s ignorance of its falsity; (7) the hearer’s reliance on its truth; (8) the right of the hearer to rely thereon; and (9) the hearer’s consequent and proximate injury or damage. Hutton v. Ming (1970), 155 Mont. 149, 153, 467 P.2d 688, 690.

The circumstances constituting fraud must be stated with particularity. Kinjerski v. Lamery (1979), 185 Mont. 111, 117, 604 P.2d 782, 785. Appellants presented only a general assertion of fraud. They presented no evidence establishing the presence of any one of the elements of fraud. As such, we hold that Nancy McBeen was properly dismissed as a defendant at the close of appellant’s argument in the lower court proceeding.

Issue No. 3

Appellants’ next contention is that the District Court erred in its award of damages.

Appellants were awarded $62,238 in compensatory damages and $10,000 in punitive damages. The applicable statutes which allow for these awards are Section 27-1-317 and Section 27-1-220, MCA, respectively. We do not agree with appellants’ argument that the compensatory damages award was too low. The District Court found that appellants suffered annual losses of $31,338 and reasonable wage loss of $30,900 based on their income tax returns. The court found further that appellants did not suffer any loss of opportunity to earn income on their investment, nor did they pay an excessive amount for the saloon property and business. These findings are supported by the evidence of past and present business records for the Johnson-Gardner Saloon and by evidence of the value of other comparable businesses in Gardiner.

We also disagree with the allegation that the punitive damages awarded were too low. The court found that Marcus McBeen’s acts of misrepresentation to appellants were fraudulent. To deter future similar behavior, an award of $10,000 in punitives was awarded to appellants. Section 27-l-221(7)(b), MCA, outlines the findings necessary for an award of punitive damages:

“(b) When an award of punitive damages is made by the judge, he shall clearly state his reasons for making the award in findings of fact and conclusions of law, demonstrating consideration of each of the following matters:
“(i) the nature and reprehensibility of the defendant’s wrongdoing;
“(ii) the extent of the defendant’s wrongdoing;
“(in) the intent of the defendant in committing the wrong;
“(iv) the profitability of the defendant’s wrongdoing, if applicable;
“(v) the amount of actual damages awarded by the jury;
“(vi) the defendant’s net worth;
“(vii) previous awards of punitive or exemplary damages against the defendant based upon the same wrongful act;
“(viii) potential or prior criminal sanctions against the defendant based upon the same wrongful act; and
“(ix) any other circumstances which may operate to increase or reduce, without wholly defeating, punitive damages.”

In its findings of fact and conclusions of law, the District Court concluded that:

“I. The actions of defendant Marcus McBeen in representing and warranting that the operating statement of the Johnson-Gardner Saloon for 1982 as a true and accurate statement of the gross income and expenses were false, deceitful of material facts, and constitute fraud.
“J. Defendant Marcus McBeen intended that plaintiffs should rely upon said representations. Plaintiffs were ignorant of the falsity of the representations, did in fact rely on them as they had a right to do, and thereby suffered injury.
“K. Plaintiffs William Selvidge and Virgie Renner are entitled to damages of $31,338 for net business loss on said business for the years 1983 through 1985, plus $30,900 for lost wages during said time, making a total of $62,238.00, which amount will compensate them for all the detriment proximately caused by Marcus McBeen’s actions.
“L. Plaintiffs have not established that they are entitled to have said contract reformed or the price paid for the property and business reduced.
“M. Plaintiffs are not entitled to an award for loss of opportunity to earn a return on their investment and capital as that would be a duplication of the damages referred to in conclusion K above, and because the value of the real and personal property and business was not excessive or grossly disproportionate to the price paid by plaintiffs.
“N. Plaintiffs are entitled, however, to punitive damages against Marcus McBeen in the sum of $10,000.00 to deter similar future conduct by him.
“P. Plaintiffs were not contributorily negligent herein, and their damages should not be reduced.”

Because of some seemingly contradictory findings of fact with these conclusions of law, the District Court followed up the conclusions with an explanatory comment.

“EXPLANATORY COMMENT

“In case the foregoing findings or conclusions seem somewhat inconsistent, the court finds that while plaintiffs did make a thorough investigation of their own prior to purchasing the saloon and agree in the contract of sale they were relying on that and not on any representations of the sellers, and while the court also finds plaintiffs did not pay a grossly disproportionate or unreasonable price for the premises and business, and that they did have opportunity to examine McBeens records, I still find McBeen materially misrepresented the gross sales he reported in the operating statement he prepared, and because plaintiffs were entitled to and did rely on this, they are entitled to the damages proximately caused thereby, plus moderate punitive damages. However, plaintiffs seek duplicative, speculative and unjustified amounts of damages, both actual and punitive, and I have awarded only those that are reasonably certain. Ms. Renner’s inconsistent and exaggerated testimony has caused me to reduce somewhat the punitive damages I might have otherwise awarded.”

The conclusions of law considered in light of the facts of this case and the judges explanatory comment satisfies the statutory requirements for punitive damages. We will not disturb the punitive award, nor the award for compensatory damages.

Issue No. 4

Lastly, appellants allege that the District Court erred in failing to award attorney fees.

In the absence of a contractual agreement or specific statutory authority, attorney fees are not recoverable as costs by the prevailing party. State ex rel. Wilson v. Department of Natural Resources and Conservation (1982), 199 Mont. 189, 648 P.2d 766, 769; Section 25-10-301, MCA.

In this case, appellants recovered on their allegation of fraud and misrepresentation — a tort. Their testimony indicates that they are satisfied with all the buildings and fixtures which they purchased under contract. The court found the purchase price to be reasonable. Because they recovered under tort law, appellants were awarded $10,000 punitives. There is no statutory authority nor contractual agreement which gives rise to an award of attorney fees in this case. We affirm the District Court’s refusal to award attorney fees to Selvidge and Renner.

Issue No. 5

McBeens’ first issues raised on counter-claim alleges that the finding of fraud was not supported by the facts.

The elements of fraud were outlined under issue No. 2 above. The District Court’s relevant findings of fact, which were supported by the evidence include:

“45. Defendant Marcus McBeen knew that the saloon business in question did not have gross sales in 1982 of $83,779 or gross rental income of $2,100.
“46. McBeens said operating statement (Ex. 11), financial statement (Ex. 14), and 1982 income tax return (Ex. 15), were all prepared by Marcus McBeen. He is an experienced businessman, and engaged in and familiar with the management and running of several different and diverse businesses while in Gardiner, namely, a lumber yard, real estate business, home construction, solar heating, and a saloon.
“47. The documents referred to in finding 46 were prepared by McBeen to purportedly accurately reflect his total business income and financial status, and were prepared for use of lending institutions and Internal Revenue Service, and only gratuitously given plaintiffs according to Marcus. The court finds, however, that the operating statement is not only inaccurate and vague, but misleading to anyone to whom he submitted it.
“49. Plaintiffs had the right to rely upon the representation of defendant Marcus McBeen concerning the financial condition of business in question, and in fact plaintiffs did rely thereon, as well as on their own experience, observations and investigation, purchasing the business.
“50. The representations made by Marcus McBeen to Selvidge and Renner were false and were material, and he intended plaintiffs to rely thereon to induce them to purchase said saloon business.
“51. Plaintiffs were ignorant of the falsity of defendant McBeen’s representations at the time of the purchase, and as a result of his false representations and plaintiffs reliance thereon, plaintiffs suffered injury.
“52. That once plaintiffs purchased the business and took possession, they operated it on a sound basis and increased their business some each year. However, they claim to have suffered annual losses as indicated by their partnership income tax returns (Ex. 2) including deductions for depreciation, as follows:
1983.......................................... $11,023
1984............................................ 14,173
1985 ........................................... 6,142
Total........................................... $31,338
“53. That plaintiffs have suffered loss of reasonable wages since purchasing the business of $30,900.
“54. That plaintiffs losses mentioned in findings 52 and 53 are directly attributable to the misrepresentations and deceitful statements of Marcus McBeen.
“57. That the court does find, however, that Marcus McBeen’s omissions and representations in the sale were fraudulent and oppressive toward plaintiffs, and they should be awarded punitive damages of $10,000 to deter similar future conduct.
“60. The only damages plaintiffs have established are from Marcus McBeen’s tort of fraud, so that no attorneys fees are awardable on the contract to either side.”

Appellants offer no evidence to contradict or show that these findings are clearly erroneous. We affirm the District Court on the issue of fraud.

McBeens’ last two contentions alleging that appellants’ damages were not caused by McBeens’ misrepresentations and that punitive damages were improperly awarded have been adequately addressed in the previous discussion.

Affirmed on all issues.

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