text:
    In re the MARRIAGE OF SUZANNE GLARUM SULLIVAN, Petitioner and Respondent, and CLIFFORD LEROY SULLIVAN, Respondent and Appellant.
    No. 90-064.
    Submitted April 26, 1990.
    Decided June 26, 1990.
    Rehearing Denied July 19, 1990.
    794 P.2d 687.

      Marshall Murray, Murray, Kaufman, Vidal, Gordon & Ogle, Kalispell, for respondent and appellant.
    Wendell B. Dunn, Whitefish, for petitioner and respondent.
   JUSTICE SHEEHY

delivered the Opinion of the Court.

On August 16, 1988, Suzanne Glarum Sullivan (Suzanne) filed an action in the Eleventh Judicial District Court, Flathead County, to dissolve her marriage. On December 6, 1988, the District Court ordered Clifford Leroy Sullivan (Clifford) to pay $600 per month for the parties’ two minor children. Furthermore, the Court ordered Clifford to provide health insurance for the two minor children. In order to secure an early trial date, the parties voluntarily elected to go to trial before a judge pro tempore, without a jury, on July 13, 1989. On October 23, 1989, the court entered its findings of fact, conclusions of law and orders, dissolving the parties’ marriage. Now Clifford appeals the District Court order. We affirm.

Clifford’s issue on appeal can be summarized as follows:

Whether the District Court erred in determining Clifford’s annualized income for application of Child Support Guidelines, maintenance, attorney fees and reimbursement of Suzanne’s moving expenses.

Clifford and Suzanne were married in Sioux City, Iowa, on July 11, 1964. The parties separated in the summer of 1986. On August 16, 1988, Suzanne filed a petition for dissolution with the District Court. The couple has four children, Clifford, born January 11, 1966, Melissa, born October 5, 1967, Patrick, born March 3, 1971 and Molly, born October 24, 1975. At the time of the trial, the three younger children were residing with Suzanne, however, only Molly was under the age of 18 and thus the issue of child support only concerns Molly.

As the District Court noted in its findings, Suzanne now works as a bookkeeper. Before the dissolution, Suzanne’s primary role was that of a homemaker. In 1987, Suzanne did start a take-and bake pizza business in Choteau, Montana. The pizza business, however, proved unsuccessful and closed, producing a net loss. Clifford has his own business, Sullivan Wholesale, which involves the purchasing and resale of chemicals and chemically related products. Clifford continued his chemical sales business up to and through the time of trial.

In determining child support, the District Court looked to the child support guidelines for guidance, and set forth the following child support obligation:

WORK SHEET #1 FOR DETERMINATION OF CHILD SUPPORT

MOTHER COMBINED FATHER

1. GROSS INCOME (annualized) $12,240.00 $42,000.00

a. earnings

b. imputed income

c. percent of asset value

d. other

2. DEDUCTIONS (annualized)

MOTHER COMBINED FATHER

a. taxes $ 1,200.00 $ 2,000.00

b. FICA

c. union dues

d. mandatory retirement

e. mandatory health ins.

f. child support (pre-existing)

g. medical insurance (paid on behalf of children $ 780.00

h. other

i. TOTAL $ 1,200.00 $ 2,780.00

3. NET AVAILABLE RESOURCES (line le minus line 2i) $11,040.00 $39,220.00

4. COMBINED TOTAL NET INCOME $50,260.00

5. PERCENTAGE FROM TABLE 16.8%

6. EACH PARENT’S OBLIGATION (line 3 X line 5) $ 1,854.72 $ 6,588.96

7. MONTHLY SUPPORT OBLIGATION (line 6 divided by

12 months) $ 154.56 $ 549.08

In addition to the child support, the District Court awarded Suzanne $250 per month in maintenance for a period of two years, moving expenses, and attorney fees.

I.

Whether the District Court erred in determining Clifford’s annualized income for application of Child Support Guidelines, maintenance, attorney fees and reimbursement of Suzanne’s moving expenses.

The District Court determined Clifford’s annualized gross income for application to the Guidelines to be $42,000. Clifford contends the District Court grossly overestimated his annual income. According to Clifford, his annual income for the years 1988 and 1989, was approximately $12,000. Clifford arrived at this figure by deducting his business expenses from his gross income, specifically, expenses for freight, utilities, supplies and auto and travel expenses. These business expenses were gleaned from a combination of the parties 1988 tax returns and his 1988 and 1989 income summaries introduced at trial.

The District Court disagreed with Clifford, choosing to disregard the tax returns and income summaries, and not to include the above-mentioned expenses as deductions. It is here that Clifford takes issue.

Under the Montana Child Support Guidelines (1987) 227 Mont. 1, the primary focus for determining available income for paying child support is based on a parent’s disposable income rather than taxable income. “It is the disposable income of the parent, and not their income tax returns alone, which must be considered by the court. ’ ’ In re the Marriage of Stewart (Mont.1990), [243 Mont. 180,] 793 P.2d 813, 814, in re Marriage of Gray [242 Mont. 69,] 788 P.2d 909, 912, (Mont. 1990), 788 P.2d 909, 912; in re the Marriage of Mitchell (1987), 229 Mont. 242, 246-47, 746 P.2d 598, 602. As a result, the Guidelines dictate allowing only a minimum of exclusions from the parent’s gross income. Guidelines, 227 Mont, at 7. Included within this list of exclusions under the Guidelines are deductions for legitimate business expenses. Guidelines, 227 Mont, at 7. Clifford urges this Court to find his expenses are legitimate business expenses under the Guidelines.

Recently, in in re the Marriage of Smith (Mont. 1990), [242 Mont. 495,] 791 P.2d 1373, 47 St. Rep. 925, we affirmed the District Court’s finding that dues and publications, auto expenses, attorney fees, accounting fees, and deductions for business investments, were legitimate business expenses, and thus deductible from income to calculate a husband’s child support obligation under the Guidelines. In Smith, the wife’s own expert witness, an experienced family law attorney, testified that the husband’s expenses were legitimate business expenses under the Guidelines. The wife presented no evidence that these expenses were not deductible under the Guidelines, and the District Court, relying on the expert testimony, considered them as legitimate business expenses.

A spouse who gains a livelihood from the operation of a business is entitled to utilize the deductions allowed by law to determine his income for purposes of fixing his state and federal income tax liability. In marriage dissolution cases, the court is not bound by those deductions in determining cash flow of such a spouse to fix a proper amount of child support and, if necessary, maintenance. Stewart, 793 P.2d at 815, 47 St.Rep. at 1118. In this case the trial judge got little help from either party, especially Clifford, in reaching a prior estimate of Clifford’s disposable income. The court noted this difficulty in its findings:

“38. This suit involved the usual difficulties encountered where one or both of the parties are self-employed. This was compounded by the wildly divergent approaches to the financial issues taken by counsel in their post-trial proposals for judgment. Petitioner’s proposal overinflated the value of the marital estate through a method so complex as to be nearly unintelligible. Her child support calculations were quite simply unprecedented in this counsel’s experience. In contrast, Respondent’s proposal was so undervalued and simplistic as to border on the ridiculous.
“This trier-of-fact had no crystal ball to illuminate the true story of the parties’ financial course in the months preceding and following their separation in 1987. It was clear that Respondent had control of in excess of $15,000.00 from the money market account and a bank loan. It was clear that the marriage was in financial trouble at that time with past due mortgage and other obligations. It is clear funds were used to start both parties’ businesses, to pay Melissa’s college tuition, and for necessaries of life. Respondent did not substantiate where every dime of money that passed through his hands during this time went. However, Petitioner did not, and could not from her position rebut Respondent’s testimony by a preponderance of the evidence.
“In weighing the credibility of the parties’ testimony and the relative weight of the evidence presented, it is surmised that Respondent had access to and did expend substantially more funds for his personal and business use than was allotted to Petitioner during this period. The source of the $5,000.00 C.D. Respondent holds as collateral for his business revolving credit line was not brought to light. No credible explanation was offered for Respondent’s ability to generate the sum of $1,000.00 per month to support his wife and children following the separation and prior to receiving Petitioner’s motion for temporary orders on support in October of 1988. At that time Petitioner engaged her attorney, preparatory to the November hearing date, he failed to pay any support that month and she obtained a court order allowing him to pay $300.00 per month. Respondent now proposes to pay $119.00 per month support for the minor child.
“In view of the equities involved and the failure by both parties to carry their burdens of proof to support their own contentions, the best that can be stated is that the truth lies somewhere between the parties’ positions and has yet to see light of day. The valuation of the marital estate, the distribution thereof, the reimbursements and credits to Petitioner, the award of limited maintenance and attorney fees and amount of child support are fair and equitable under the circumstances presented. ’ ’

The District Court properly weighed the evidence by both parties, and chose not to adopt the deductions set forth in Clifford’s tax returns and income summaries. We find the District Court did not abuse its discretion in denying Clifford’s deductions.

Next, Clifford contends the District Court failed to specify how it established child support, maintenance, attorney fees and moving expenses. Regarding child support, the District Court’s findings specifically state that the Guidelines were applied to Clifford’s income based on averages of past years’ tax returns and projections for 1989. Furthermore, the court properly attached a worksheet to the findings to demonstrate exactly how it arrived at the child support figures. We find no abuse of discretion by the District Court in determining the child support award.

The appropriate standard of review for an award of maintenance is established by sec. 40-4-203, MCA. In re the Marriage of Ernst (Mont. 1990),[243 Mont. 114,] 793 P.2d 777, 47 St.Rep. 1034, 1035; in re the Marriage of Barnard (Mont. 1990), [241 Mont. 147,] 785 P.2d 1387, 1341, 47 St.Rep. 152, 156; in re the Marriage of Lundvall (Mont. 1990), [241 Mont. 172,] 786 P.2d 10, 12, 47 St.Rep. 173, 175. An award of maintenance is premised upon a finding by the court that the individual seeking maintenance ‘ Tacks sufficient property to provide for his reasonable needs; and is unable to support himself through appropriate employment.” Sections 40-4-203(l)(a), (b), MCA. The District Court in the present case made such a finding. Next, the District Court must then consider all relevant facts in determining an appropriate award of maintenance. Section 40-4-203(2), MCA. Section 40-4-203(2), MCA, sets forth the following factors for the court to consider:

“(a) the financial resources of the party seeking maintenance, including marital property apportioned to him, and his ability to meet his needs independently, including the extent to which a provision for support of a child living with the party includes a sum for that party as custodian;
“(b) the time necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment;
“(c) the standard of living established during the marriage;
“(d) the duration of the marriage;
“(e) the age and the physical and emotional condition of the spouse seeking maintenance; and
“(f) the ability of the spouse from whom maintenance is sought to meet his needs while meeting those of the spouse seeking maintenance.”

Section 40-4-203(2)(a)-(f), MCA.

A specific finding by the District Court as to each of these relevant facts is not required as long as the court considered proper information in addressing these facts and based its decision upon substantial credible evidence. In re the Marriage of Cole (1988), 234 Mont. 352, 359, 763 P.2d 39, 43. These relevant facts are to be considered by the court as a whole in the determination of the final maintenance award. Ernst, 793 P.2d at 781 47 St.Rep. at 1037.

There is substantial credible evidence to support the District Court’s monthly maintenance award of $250 to Suzanne. The parties resided together for 23 years, during which time Suzanne was a part-time bookkeeper for her husband, occasionally held part-time outside employment, but was predominantly a full-time housewife. Her only steady employment, as an owner of a pizza business, proved unsuccessful. The District Court found that the maintenance provided Suzanne with the opportunity to obtain job training and employment sufficient enough to support her household. Her current job is insufficient to meet her monthly expenses.

The District Court, in its findings, also specifically recognized the fact that Clifford had demonstrated in the past an ability to provide Suzanne $1,000 per month which he did from August, 1987, through May, 1988. The current child support award and maintenance obligation are less than the $1,000 provided by Clifford. The evidence presented at trial clearly reveals Clifford is capable of paying the $250 per month child support.

The District Court, in awarding maintenance to Suzanne, made numerous findings relating to the parties’ work history, skills, both past and present standards of living and the parties present employment. In light of the facts of this case, the District Court’s award of maintenance to Suzanne is supported by substantial, credible evidence.

Clifford claims the District Court erred in granting Suzanne her attorney fees. The awarding of attorney fees is governed by sec. 40-4-110, MCA, which states:

“The court from time to time, after considering the financial resources of both parties, may order a party to pay reasonable amount for the cost to the other party of maintaining or defending and proceeding under chapters 1 and 4 of this title and for attorney’s fees, including sums for legal services rendered and costs incurred prior to the commencement of the proceeding or after entry of judgment...”

This Court has stated that the awarding of attorney fees is clearly permissive trader this statute. In re the Marriage of Smith (Mont. 1990), [242 Mont. 495,] 791 791 P.2d 1373, 47 St.Rep. 935, 931; In re the Marriage of Gallinger (1986), 221 Mont. 463, 471, 719 P.2d 777, 782; In re the Marriage of Obergfell (1985), 218 Mont. 83, 88, 708 P.2d 461, 564. The appropriate standard for reviewing a district court decision awarding attorney fees under sec. 404-110, MCA, is whether the court abused its discretion in awarding such fees. In re the Marriage of Manus (1987), 225 Mont. 457, 465, 733 P.2d 1275, 1279; In re the Marriage of Johnston (1986), 223 Mont. 383, 388, 726 P.2d 322, 326. Clifford, relying on Barnard, 785 P.2d at 1391, argues the District Court’s award of attorney fees to Suzanne were not based on necessity, unreasonable, and not supported by competent evidence at trial. We disagree with Clifford, and find that the court’s Finding No. 34 supports an award of attorney fees:

“Petitioner has incurred substantial debt as a direct result of the dissolution proceedings and one of those debts is attorneys’ fees in this matter. Respondent has indicated owing two debts, both of which are covered and secured by collateral sufficient to satisfy the indebtedness. Petitioner’s financial resources are insufficient to allow her to pay her attorneys and she should be allowed to recover a reasonable amount for payment of this indebtedness from the Respondent pursuant to Section 404-110, MCA.”

The record indicates the District Court was aware of the financial resources and financial burdens of both parties as required by sec. 404-110, MCA, and from this record the court properly awarded Suzanne her attorney fees. Thus, we find no abuse of discretion by the District Court’s award of attorney fees.

Finally, Clifford argues the District Court erred is granting Suzanne’s moving expenses. The District Court stated the following in Finding No. 32:

“During the separation the parties had initially agreed that one of them would have to leave Choteau, Montana. Petitioner felt compelled to move and incurred expenses of $1,038.56 to do so. She is entitled to recover one-half of these expenses from Respondent, or $519.28.” (Emphasis added.)

We agree with the District Court, and find it reasonable to allow Suzanne to recover a portion of her agreed upon expenses. The District Court’s decision is sound and substantial credible evidence exists to support it.

Accordingly, we affirm the District Court.

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


source: Caselaw Access Project

author: JUSTICE HARRISON

license: Public Domain

text:
    FIRST SECURITY BANK OF BOZEMAN, Plaintiff and Respondent, v. MILTON E. JONES and Helen C. Jones; and American Land Title Company, Defendants and Appellants.
    No. 90-078.
    Submitted on Briefs May 16, 1990.
    Decided June 26, 1990.
    Rehearing Denied July 19, 1990.
    794 P.2d 679.

      Thomas E. Smith, Scot Schermerhorn, Moulton, Bellingham, Longo & Mather, P.C., Billings, for defendants and appellants.
    Calvin L. Braaksma, Landoe, Brown, Planalp & Kommers, P.C., Bozeman, for plaintiff and respondent.
   JUSTICE HARRISON

delivered the Opinion of the Court.

District Judge Larry Moran of the Eighteenth Judicial District, Gallatin County, granted summary judgment to plaintiff First Security Bank of Bozeman in its effort to foreclose on five deeds of trust delivered by defendants Milton E. and Helen C. Jones for a promissory note. We affirm the summary judgment.

The issue which we will review is whether the District Court erred in ruling that First Security Bank could judicially foreclose upon five deeds of trust in two counties, by filing separate actions in each of the counties, wherein the Bank sought a single judgment and a single, integrated foreclosure proceeding?

The facts relevant to this appeal are simple and undisputed. On May 24, 1988, Milton and Helen Jones (Joneses), husband and wife, executed a promissory note to First Security Bank (Bank) in the amount of $132,026.26. As collateral for the obligation the Joneses pledged five deeds of trust covering five parcels of real property, four parcels located in Gallatin County and one in Flathead County.

The Joneses subsequently defaulted on the promissory note. The Bank proceeded to foreclose upon the deeds of trust as mortgages, filing actions in both Gallatin and Flathead counties. The complaint filed in Gallatin County sought collection of the promissory note and foreclosure of the four deeds of trust covering the four Gallatin properties. Likewise, the complaint filed in Flathead County sought collection on the same promissory note and foreclosure of the deed of trust covering the Flathead real property. The two complaints reference to and incorporate each other and allege default of the same promissory note, but clearly set forth that the Bank seeks a single recovery with integrated and coordinated foreclosures and, thereafter, a single deficiency judgment.

The Joneses answered, specifically setting forth as affirmative defenses that (1) the Bank violated sec. 71-1-222, MCA, which requires but one action for recovery of a debt or enforcement of a right secured by a real estate mortgage; and (2) the Bank was barred from collecting upon the debt or obtaining a deficiency judgment, or both, by virtue of the doctrines of the one-action rule, waiver and estoppel.

The Bank filed a motion for summary judgment in the Gallatin County action. The Joneses then moved the court to deny the Bank’s motion for summary judgment and to enter summary judgment on their behalf prohibiting the Bank from obtaining any deficiency Judgment against them.

The District Court subsequently issued its Memorandum and Judgment which granted the Bank’s motion for summary judgment. The Joneses now appeal from the summary judgment.

Summary judgment is appropriately granted where no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P. The party seeking summary judgment has the burden of demonstrating absence of genuine factual issues. O’Bagy v. First Interstate Bank (Mont. 1990), [241 Mont. 44,] 785 P.2d 190, 191, 47 St.Rep. 69, 71. The burden then shifts to the non-moving party who must show the existence of a genuine issue in order to prevail, id. To meet this burden, the non-moving party must proffer substantial evidence, not mere speculation and conclusory statements. Hando v. PPG Industries, Inc. (1989), 236 Mont. 493, 500, 771 P.2d 956, 959; Benson v. Pyfer (Mont. 1989), [240 Mont. 175,] 783 P.2d 923, 925, 46 St.Rep. 2033, 2035.

In the case at bar it has been shown that no genuine issue of material fact exists. The agreed upon facts establish that the Joneses executed the promissory note and deeds of trust which are the subject of this action, delivered them to the Bank, and then failed to make payment as required in the note.

Appellants argue that the Bank violated sec. 71-1-222, MCA, Montana’s “one action rule,” by filing simultaneous actions in the two counties where the real property pledged as security on the note is located. In pertinent part, the statute reads:

“(1) There is but one action for the recovery of debt or the enforcement of any right secured by mortgage upon real estate, which action must be in accordance with the provisions of this part ...”

Section 71-1-222(1), MCA.

The purpose of the one-action rule “ [i]s to compel one who has taken a special lien to secure his debt to exhaust his security before having recourse to the general assets of the debtor.” Barth v. Ely (1929), 85 Mont. 310, 320, 278 P. 1002, 1006 (quoting Merced Bank v. Casaccia (1894), 103 Cal. 641, 37 P. 648). Also, the rule is intended to shield a mortgagor from multiple lawsuits where two separate actions, while theoretically distinct, are so closely connected that the two can and should be decided in one suit, Stallings v. Erwin (1966), 148 Mont. 227, 233, 419 P.2d 480, 483. See also Dietrich, The Montana Judicial and Non-judicial Foreclosure Sale: Analysis and Suggestions for Reform, 49 Mont.L.Rev. 285, 298 (1988).

The Bank did not intend to defeat the purpose of the one-action rule by filing complaints in both Gallatin and Flathead counties. The Bank filed simultaneous foreclosure proceedings in an attempt to comply with sec. 25-2-123, MCA, which states that:

“(1) The proper place of trial for the following actions is the county in which the subject of the action or some part thereof is situated:
“(d) for the foreclosure of all liens and mortgages on real property. ’ ’

Section 25-2-123(1), MCA.

Each complaint references and incorporates the other. The two complaints seek a single recovery, a single, integrated, coordinated foreclosure, and a single deficiency judgment thereafter. In no way did the Bank endeavor to circumvent the one-action rule.

We affirm the judgment of the District Court and concur with its Memorandum wherein it noted:

“The [Gallatin and Flathead] actions are not sequential actions, and it is sequential actions that are usually at issue when the one action rule is raised. Nor is there any effort to keep one or the other Court in the dark regarding the simultaneous action for foreclosure and deficiency judgment.
“The Court concludes that Plaintiffs Complaints, though filed in two counties are, because of the language of the Complaints, one action, and Plaintiff is acting entirely within the stated purpose of the one action rule. The remedy being pursued is a foreclosure action and includes a deficiency claim in the same proceeding. The mortgagor is, essentially, being protected against a multiplicity of actions.
“This case is a proper one for summary judgment, there being no genuine dispute over material fact.”

The District Court is affirmed.

CHIEF JUSTICE TURNAGE and JUSTICES BARZ, McDONOUGH and WEBER concur.


author: JUSTICE SHEEHY

text:
    ELWOOD W. CLEASBY, d/b/a Western Heritage and Marge W. Cleasby, Plaintiffs and APPELLANTS v. SECURITY FEDERAL SAVINGS BANK, a/k/a Security Federal Savings and loan Association, a Banking Corporation, and James E. Higgenbotham, Defendants and Respondents.
    No. 89-526.
    Submitted on Briefs April 12, 1990.
    Decided June 28, 1990.
    794 P.2d 697.

      Don Vernay, Kalispell, for plaintiffs and appellants.
    Jon T. Drye, Billings, for defendants and respondents.
   JUSTICE SHEEHY

delivered the Opinion of the Court.

Plaintiffs (Cleasbys) appeal from an order of the Thirteenth Judicial District, Yellowstone County, granting defendants’ motion for partial summary judgment. We affirm the District Court’s order.

The Cleasbys raise two issues on appeal:

(1) Whether the Cleasbys’ failure to adequately disclose the existence of claims against Security Federal in the bankruptcy proceeding estops them from now pursuing those claims.

(2) Whether the Cleasbys’ claims are barred by the doctrine of res judicata.

On June 3, 1988, the Cleasbys filed a complaint against Security Federal and James Higgenbotham alleging breach of contract, tortious interference with their business affairs, and a breach of the implied covenant of good faith and fair dealing. A review of the complaint shows that most of these allegations were grounded on events occurring in the spring and summer of 1986, prior to the Cleasbys filing for bankruptcy under Chapter 11 of the Bankruptcy Code.

According to the record, the Cleasbys filed their petition for a Chapter 11 reorganization on October 29, 1986. Attached to the bankruptcy petition was a list of personal property officially designated as “Schedule B-2.” Part (q) of Schedule B-2 requests the debtor to list “contingent and unliquidated claims of every nature including counterclaims of the debtor.” In response, the Cleasbys listed the following:

“Potential claim for bad faith or tortious interference against Security Federal Savings and Loan Association”

The Cleasbys stated the value of their potential claim as “undetermined.” Subsequent to the filing of the petition and the Schedule B-2, the Cleasbys prepared three disclosure statements and three bankruptcy plans. Each disclosure statement contained a list of the debtors’ assets, but the Cleasbys failed to mention the potential claim against Security Federal. The bankruptcy plan also specifically listed potential sources of revenue which could be used to pay creditors. Again, the Cleasbys’ potential claim against Security Federal was not included in any of the three plans. Also the Cleasbys never disclosed, in the disclosure statements or the schedule of assets, their potential claims against co-defendant James Higgenbotham.

On October 12, 1987, Security Federal stipulated to the third bankruptcy plan filed by the Cleasbys. That stipulation provided that Security Federal’s claims against the Cleasbys were “settled and satisfied.” On October 26, 1987, the bankruptcy entered an order confirming the Cleasby’s Chapter 11 plan.

As previously stated plaintiffs filed on June 3, 1988, their complaint against the defendants. Security Federal filed a motion for summary judgment arguing that the confirmation of the Chapter 11 bankruptcy plan now bars the Cleasbys’ claims, which are based on events that took place prior to the Cleasbys’ bankruptcy, under the doctrines of equitable estoppel, judicial estoppel and res judicata. The District Court agreed and found the Cleasbys barred by equitable estoppel and res judicata from bringing their claims in District Court. The Cleasbys now appeal the District Court order.

The effect of a debtor’s failure to disclose potential lawsuits in a bankruptcy proceeding has been the subject of limited judicial review. The courts addressing this issue, however, found that failure of a debtor to disclose a potential lawsuit in the bankruptcy proceeding prevents the debtor in possession from later maintaining that lawsuit. In re Hoffman (N.D. Iowa 1989), 99 B.R. 929; Oneida Motor Freight, Inc. v. United Jersey Bank (3d Cir. 1988), 848 F.2d 414, Cert. Denied,_U.S___ 109 S.Ct. 495, 102 L.Ed. 532 (1988); in re Galerie Des Monnaies of Geneva, Ltd. (S.D. N.Y. 1986), 62 B.R. 224. The various legal theories employed by these courts to reach this conclusion include equitable estoppel, judicial estoppel, and res judicata.

In each of the above cited decisions, the debtors failed to provide any notice of claims or potential lawsuits in their bankruptcy plans. In the present case, the Cleasbys listed the potential claim against Security Federal in their B-2 schedule of assets. However, in three subsequent disclosure statements the Cleasbys did not provide any information regarding their counterclaim against Security Federal. The District Court held that the mere listing of a potential lawsuit in the schedule of assets was not adequate disclosure as required by the bankruptcy code. Thus, the District Court barred the Cleasbys’ claims under the doctrine of equitable estoppel and res judicata.

I.

Whether the Cleasby s’ failure to adequately disclose the existence of claims against Security Federal in the bankruptcy proceeding estops them from now pursuing those claims.

The doctrine of equitable estoppel is applied to promote justice, honesty, fair dealing and to prevent injustice. Keneco v. Cantrell (1977), 174 Mont. 130, 135, 568 P.2d 1225, 1228. We have long held that equitable estoppel is founded in equity and good conscience. Its objective is to prevent a party from taking an unconscionable advantage of his own wrong while asserting his strict legal right. In the Matter of Shaw (1980), 189 Mont. 310, 316, 615 P.2d 910, 914; Leno v. General Shea-Morrison (1955), 128 Mont. 570, 576, 280 P.2d 1086, 1090. The Court in Oneida, above, strictly applied these equitable principles to a debtor who failed to disclose the existence of a potential lawsuit in a prior bankruptcy proceeding. Oneida, 848 F.2d at 418. See also, In re Hoffman (N.D. Iowa 1989), 99 B.R. 929.

In Oneida, a former Chapter 11 debtor brought suit against a bank for breach of contract, misrepresentation, and breach of the bank’s duty of good faith. The plaintiff failed to disclose the lawsuit in the Chapter 11 proceeding. Because of this failure to disclose, the Court held that the subsequent lawsuit was barred by the doctrine of equitable estoppel:

“We can assume that revealing the potential action may also have impacted upon the bank’s decision to enter into the stipulation establishing the extent and validity of its lien against Oneida [the debtor] and to vote for confirmation. The practical effect of a successful prosecution of Oneida’s claim would be to require the bank to make restitution of the amount realized on its bankruptcy claim, since Oneida’s present action calls into question the bank’s right to collect its secured debt. This would also constitute a successful collateral attack on the Bankruptcy Court’s order confirming the reorganization plan. In such circumstances, employment of equitable estoppel is required to preserve the integrity of the earlier proceeding, particularly where, as here, the creditors have reasonably acted in reliance upon the assumed finality and integrity of those adjudications.” (Citations omitted.) Oneida, 848 F.2d at 418.

Recently, in Mellem v. Kalispell Laundry (1989), 237 Mont. 439, 442, 774 P.2d 390, 392, we listed the following six elements of equitable estoppel:

1. There must be conduct — acts, language, or silence — amounting to a representation or a concealment of material facts.

2. These facts must be known to the party estopped at the time of his said conduct, or at least the circumstances must be such that knowledge of them is necessarily imputed to him.

3. The truth concerning these facts must be unknown to the other party claiming the benefit of the estoppel, at the time when it was acted upon by him.

4. The conduct must be done with the intention, or at least with the expectation, that it will be acted upon by the other party, or under such circumstances that it is both natural and probable that it will be so acted upon ...

5. The conduct must be relied upon by the other party, and, thus relying, he must be led to act upon it.

6. He must in fact act upon it in such a manner as to change his position for the worse ...

Security Federal contends the facts of Oneida and Hoffman and the instant case are similar, and thus, this Court should apply the doctrine' of equitable estoppel as set forth in Mellem. The Cleasbys attempt to distinguish the cases relied on by Security Federal by arguing that Oneida and Hoffman contained no disclosure whatsoever of the potential claims to the creditors during the bankruptcy proceeding, whereas, the Cleasbys disclosed their potential claims against Security Federal in their petition for bankruptcy. The Cleasbys contend that listing claims with their schedule of assets provided Security Federal with sufficient notice to allow it to raise any questions or objections regarding the claim.

The question presented, then, is whether this initial disclosure was sufficient to escape a finding of “concealment” as required by the first element of equitable estoppel. Therefore, we must review the Bankruptcy Code’s requirements of disclosure to determine whether the Cleasbys concealed their potential claim against Security Federal.

As the Court in Oneida properly notes, section 521 of the Bankruptcy Code list the debtor’s duties in a bankruptcy case. The Code requires the debtor to “file a ... schedule of assets and liabilities ... and a statement of the debtor’s financial affairs ...” 11 U.S.C. sec. 521(1); Oneida, 848 F.2d at 417.

The Cleasbys complied with sec. 521 and. listed a “potential claim for bad faith or tortious interference against Security Federal Savings & Loan Association” in their schedule of assets. The Cleasbys contend that by listing the claim as an asset, they are excused from any further disclosure. The duty to list pending litigation as an asset is, however, only the first of the specific statutes mandating disclosure.

The second such statute is 11 U.S.C. sec. 1125(b), which mandates the filing of a disclosure statement containing “adequate information.” Section 1125(a) defines adequate information as follows:

“Sec. 1125. Postpetition disclosure and solicitation
“(a) In this section —
“(1) ‘adequate information’ means information of a kind, and in sufficient detail, as far as is reasonably practicable in light of the nature and history of the debtor ... that would enable a hypothetical reasonable investor typical of holders of claims or interests of the relevant class to make an informed judgment about the plan.”

The importance of full disclosure is intensified by the reliance placed upon the disclosure statement by the creditors and the court. Oneida, 848 F.2d at 417. The duty to provide “adequate information” in the disclosure statement has been interpreted as requiring an explanation of pending or contemplated litigation. In re Malek (Bkrtcy. Mich. 1983), 35 B.R. 443, 444; In re Route 202 Corp. (Bkrtcy. Penn. 1984), 37 B.R. 367, 375-6. The Court in Malek required the debtor to set forth the following information, regarding potential litigation, in the disclosure statement:

“B. A HISTORY OF THE DEBTOR PRIOR TO FILING.
“The Chapter 11 Debtor should describe, in detail, his activities before filing, including the reasons for filing the Chapter 11 ... Litigation issues are to be described in an objective professional tone, free of any mischaracterization of the issues to be resolved in such litigation. Where possible, the Debtor should provide an evaluation of the probable success of any litigation and its effects on the Debtor’s business or his plans for reorganization under Chapter 11.
“I. LITIGATION
“All pending or contemplated litigation of whatever nature must be described fully, completely and in detail ...”

In re Malek, 35 B.R. at 444.

The disclosure statement filed by the Cleasbys contained no reference to the contemplated suit against Security Federal. Clearly, the listing of potential litigation against Security Federal, especially a potential counterclaim, would have affected Security Federal’s decision to approve or disapprove of the Cleasbys’ bankruptcy plan. Considering the importance of the disclosure statement in the bankruptcy proceedings, we are not swayed by the Cleasbys’ contention that merely listing the potential lawsuit in the schedule of assets was sufficient notice to preserve their lawsuit, and that they were not required to list the claim on their disclosure statement. The debtor must provide “adequate information” in order for creditor to make an informed decision on the bankruptcy plan. In this case, the Cleasbys were remiss in their duty to provide “adequate information” in their bankruptcy plan.

The Cleasbys attempt to excuse their failure to include the claim against Security Federal in the disclosure statement by arguing that the creditors had a duty to look beyond the disclosure statement, and reexamine the schedule of assets, thus discovering the reference to a “potential claim” against Security Federal. The Cleasbys’ contention is in direct contradiction of the Bankruptcy Code’s mandate to provide “adequate information” to the creditors. 11 U.S.C. sec. 1125(a), requires the debtor to provide “adequate information” in its plan. The Code does not require a creditor to sift through the bankruptcy plan to find an inadequately potential described lawsuit.

The Cleasbys also argue that Security Federal had an affirmative duty to seek out additional information regarding their potential claim against Security Federal. Again, this argument contradicts the rule that the debtor in possession owes a fiduciary duty to the creditors, particularly with respect to assets of the bankruptcy estate. Natco Industries v. Federal Ins. Co. (S.D. N.Y. 1987), 69 B.R. 418, 419. The assets of the estate include any cause of action which has accrued to a debtor as of the filing of the bankruptcy petition. 11 U.S.C. sec. 541(a). The Cleasbys, as debtors in possession, had a fiduciary duty to safeguard the assets of the estate which include causes of action, and had a statutory obligation to identify fully the claims against Security Federal. Under the Bankruptcy Code, reorganization is dependent upon the debtor’s full disclosure of all relevant information. The Bankruptcy Code and the courts have placed the obligation to ensure full disclosure on the debtor in possession, not the creditors.

Our conclusion that the Cleasbys failed adequately to disclose the existence of a potential lawsuit in their disclosure statement establishes that the first element of equitable estoppel - concealment - has been met in this case. The second element of equitable estoppel, that the facts must be known to the party estopped, is more easily met. The fact that the Cleasbys listed the potential lawsuit in the schedule of assets reveals that requisite knowledge was present. The third element, that the truth concerning these facts must be unknown to the party claiming estoppel, is established through the absence of disclosure in the bankruptcy proceeding. As previously noted, the disclosure statement is the method to provide creditors such as Security Federal with pertinent knowledge. That disclosure was not made, and there is no allegation that any other means was provided by the Cleasbys.

The fourth element of equitable estoppel requires that the conduct must be done with the intention, or at least the expectation, that it will be acted upon by the other party. We find this element is satisfied by the very purpose of the disclosure statement, which is to provide creditors with the necessary information to approve or disapprove the bankruptcy plan. The fifth element is that the conduct must be relied upon by the other party. This requirement, also, is met. Security Federal relied upon the Cleasbys’ bankruptcy plan when Security Federal agreed to settle all claims against the Cleasbys. Lastly, it must be shown that the party seeking estoppel changed its position to its detriment. In this case, Security Federal agreed to a restructuring of its debt which provided more beneficial terms to the Cleasbys. By rewriting the debt, Security Federal changed its position to its detriment.

Each of the elements of equitable estoppel is present in this case. Therefore, we affirm the District Court’s conclusion that the Cleasbys are now estopped from bringing those claims in District Court.

II.

Whether the Cleasbys’ claim is barred by the doctrine of res judicata.

We need not address the issues of res judicata, since we have already found that the Cleasbys are barred from bringing their District Court claims through equitable estoppel.

Accordingly, we affirm the District Court’s order that the Cleasbys are equitably estopped from pursuing their claims in District Court.

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

JUSTICE BARZ did not participate.


author: CHIEF JUSTICE TURNAGE

text:
    DONNA HANDLOS, Claimant and Appellant, v. CYPRUS INDUSTRIAL MINERALS, Employer, Defendant and Respondent.
    No. 89-575.
    Submitted on Briefs May 16, 1990.
    Decided July 12, 1990.
    794 P.2d 702.
    Monte D. Beck, Esq., and Chris J. Ragar, Beck Law Offices, Bozeman, for claimant and appellant.

      Larry W. Jones, Garlington, Lohn & Robinson, Missoula, for employer, defendant and respondent.
   CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Donna Handlos appeals an order of the Workers’ Compensation Court, which she argues should have imposed a penalty and attorney fees and costs against her former employer, Cyprus Industrial Minerals. We remand for a determination of whether the delay in payment of benefits was unreasonable.

Our opinion rests on our holding that the lower court erred in concluding that it was without power to impose a 20 percent penalty. Because we remand on that issue, our treatment of the other issues raised on appeal is limited.

Donna Handlos was employed as a sorter for Cyprus Industrial Minerals (Cyprus) at its talc mine outside Ennis, Montana. On October 2, 1987, a fellow employee struck Handlos on the left side of her head while “fooling around” near the end of the Friday evening shift. Although Handlos was wearing a hard hat, she testified at trial that the blow resulted in immediate pain causing her knees to buckle and making her nauseous. She remained at work until the end of her shift, but then went to the emergency room at the Madison Valley Hospital complaining of headaches and pain in the left side of her neck and shoulder. She was given a shot of Demerol and released.

Handlos saw a doctor the following Monday and on his advice did not return to work. He stated that her injury had resulted in left thoracic outlet syndrome. An orthopedic surgeon diagnosed her injury as left paraspinous muscle spasm exacerbated by a preexisting osteoarthritic condition. Some six months after her injury, Handlos was admitted to Ridgeview Treatment Center in Butte, Montana, for treatment of depression which was in part a result of her injury and resulting inactivity.

Cyprus initially denied liability for Handlos’s injury. In March 1988, after the conclusion of mediation proceedings and some five months after the injury, Cyprus accepted liability for medical expenses for the shoulder injury. It accepted liability for medical expenses related to Handlos’s depression on August 22, 1988. Cyprus explained the delays in accepting liability as reasonable because of questions as to whether Handlos’s injury was work-related. Cyprus did not make payment to Ridgeview Treatment Center until during the trial. That delay was explained as a result of not receiving the bills prior to trial.

When the trial began, the issues were whether the bills for treatment at Ridgeview Treatment Center had been paid and whether the delays in payment were unreasonable, justifying a penalty under sec. 39-71-2907, MCA. After Cyprus paid the bills relating to the depression, the only issue remaining was unreasonableness.

The Workers’ Compensation Court concluded that it was barred from awarding a 20 percent penalty under sec. 39-71-2907, MCA, because Cyprus accepted liability for Handlos’s treatment before any court order was issued. From that conclusion, Handlos appeals.

Did the lower court err in concluding that it was without power to impose a 20 percent penalty?

Section 39-71-2907, MCA, provides:

“Increase in award for unreasonable delay or refusal to pay. (1) When payment of compensation has been unreasonably delayed or refused by an insurer, either prior or subsequent to the issuance of an order by the workers’ compensation judge granting a claimant compensation benefits, the full amount of the compensation benefits due a claimant between the time compensation benefits were delayed or refused and the date of the order granting a claimant compensation benefits may be increased by the workers’ compensation judge by 20%. The question of unreasonable delay or refusal shall be determined by the workers’ compensation judge, and such a finding constitutes good cause to rescind, alter, or amend any order, decision, or award previously made in the cause for the purpose of making the increase provided herein.
“(2) A finding of unreasonableness under this section does not constitute a finding that the insurer acted in bad faith or violated the unfair trade practices provisions of Title 33, chapter 18.”

Handlos argues in the alternative that the Workers’ Compensation Court was in error in finding that the delay in paying medical bills was not unreasonable. However, that was not the basis for the court’s decision. The court opined that because Cyprus accepted liability to pay Handlos’s bill before any order was entered, there was no order granting a claimant compensation benefits. Therefore, the court concluded, it was without the power to award a penalty under sec. 39-71-2907, MCA.

The lower court’s interpretation of sec. 39-71-2907, MCA, renders all statutory reference to unreasonable delay in the payment of benefits as mere surplusage. If the lower court were correct, all penalty cases would by definition be refusal of benefit cases. If an insurer accepted liability and made payment of benefits at any time prior to the issuance of an order by the court, there would be no order for benefits making possible consideration of a penalty. The words “unreasonably delayed” in the statute would then have no purpose.

We cannot agree with the construction given the statute by the Workers’ Compensation Court. We do point out that the statute is ambiguous and that the legislature may wish to reword it.

Where there are several provisions in an instrument, a court should give such construction as will give effect to all of them. Section 1-4-101, MCA. Additionally, the purpose of the workers’ compensation system is to enable claimants to “speedily obtain benefits” and to “minimize reliance upon lawyers.” Section 39-71-105(3), MCA. In light of that purpose and in order to give effect to all provisions of the statute, we conclude that the penalty under sec. 39-71-2907, MCA, is available where an insurer unreasonably delays paying a claim until the claimant takes the case to trial. We hold that sec. 39-71-2907, MCA, allows the Workers’ Compensation Court to award a penalty when payment of benefits has been unreasonably delayed until mid-trial.

Because the determination of whether there was an unreasonable delay in payment of benefits is a factual question, we remand this case to the Workers’ Compensation Court for an express determination of whether Cyprus unreasonably delayed paying Handlos’s benefits. If the court finds that there was an unreasonable delay and that a penalty is warranted, it may award a penalty under sec. 39-71-2907, MCA. Cyprus argues that no penalty is possible within the limits set in Perry v. Tomahawk Transp. (1987), 226 Mont. 318, 322, 735 P.2d 308, 311. However, in Perry the penalty which this Court reversed was for payments made in a timely manner, under court order, between May 8, 1985, and the date of judgment. There was no dispute that a penalty was proper for payments delayed from March 27, 1985, to the court order of May 8, 1985. Perry, 735 P.2d at 311. On remand, the court should also consider whether an award of attorney fees and costs is warranted under sec. 39-71-612, MCA.

Remanded for further proceedings consistent with this opinion.

JUSTICES HARRISON, BARZ, HUNT, McDONOUGH, SHEEHY and WEBER concur.


author: JUSTICE HUNT

text:
    THOMAS M. FIELDS and Vicki Fields, Plaintiffs and Appellants, v. MAE WELLS, Defendant and Respondent.
    No. 90-070.
    Submitted on Briefs May 3, 1990.
    Decided June 1, 1990.
    794 P.2d 335.
    Tom & Vicki Fields, Mentor, Ohio, pro se.
    John H. Grant, Helena, for defendant and respondent.
   JUSTICE HUNT

delivered the Opinion of the Court.

Thomas and Vicki Fields, appellants, appeal from an order of the District Court, First Judicial District, Lewis and Clark County, which awarded $4,523 in attorney’s fees and costs to Mae Wells, respondent. The appellants contest the District Court’s authority to render such an order. We affirm and award the respondent additional attorney’s fees incurred in this appeal.

This case was previously before this Court in Fields v. Wells, [239 Mont. 392,] 780 P.2d 1141, 46 St.Rep. 1775 (Mont.1989). In that case, we upheld the District Court’s dismissal of the appellants’ complaint, with prejudice, and remanded the case to the lower court for a determination of attorney’s fees and other costs to be awarded to the respondent.

On January 19, 1990, a hearing was held by the District Court to assess the amount of attorney’s fees to be awarded to the respondent. The appellants were properly notified as to the date of such hearing. In fact, the appellants requested that the hearing be continued. This request was denied. The appellants failed to appear at the hearing. Subsequently, the District Court entered an order awaiting $4,523 in attorney’s fees and costs to the respondent.

The appellants argue that the District Court had no authority to award attorney’s fees to the respondent. They further argue that the District Court lacked authority because our reliance on a clause in the disputed contract which awarded attorney’s fees to a prevailing party was improper. The contract was the basis of their original complaint. The appellants’ argument is, in essence, an attempt at a rehearing on the issue of attorney’s fees. The appellants failed to file a petition for rehearing within 10 days of this Court’s decision, as required in Rule 34, M.R.App.P., therefore making this current appeal an improper attempt at circumventing this rule. See Rule 34, M.R.App.P.

The appellants cannot subsequently raise, on appeal, an issue that has previously been decided between the same parties. As this Court decided in the case of Belgrade State Bank v. Swainson, 176 Mont. 444, 578 P.2d 1166 (1978):

The general rule in Montana is that where a decision has been rendered by the Supreme Court on a particular issue between the same parties in the same case, whether the decision is right or wrong, such decision is binding on the parties and the courts and cannot be relitigated in a subsequent appeal. (Citations omitted).

Belgrade, 176 Mont, at 446, 578 P.2d at 1167.

The exception existing to this rule, as discussed in Belgrade, does not apply to this case.

The respondent shall be awarded $760 in attorney’s fees incurred in responding to this appeal.

Affirmed. Let remittitur issue forthwith. See Rules 34 and 35, M.R.App.P.

Pursuant to Section I, Par. 3(c), Montana Supreme Court 1988 Internal Operating Rules, this decision shall not be cited as precedent and shall be published by its filing as a public document with the Clerk of the Supreme Court and by a report of its result to West Publishing Company.

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


text:
    STATE OF MONTANA, Plaintiff and Respondent, v. ROBERT A. SORENSON, Defendant and Appellant.
    No. 89-491.
    Submitted on Briefs March 22, 1990.
    Decided May 3, 1990.
    792 P.2d 363.

      David W. Harman, Libby, for defendant and appellant.
    Marc Racicot, Atty. Gen., Helena, Scott B. Spencer, Lincoln Co. Atty., Libby, for plaintiff and respondent.
   CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

A jury in the District Court for the Nineteenth Judicial District, Lincoln County, found Robert A. Sorensen guilty of multiple counts of criminal possession, possession with intent to sell, conspiracy to sell, and sale of marijuana. He appeals. We affirm.

The issues are:

1. Did the District Court err in denying Sorensen’s pretrial motions to suppress evidence on grounds of illegal arrest and search and violation of Sorensen’s right of privacy?

2. Did the court err in allowing Wayne Wagner to testify?

3. Did the court err in allowing into evidence the photograph of a person in a marijuana patch?

4. Did the court err in denying Sorensen’s severance motion?

5. Did the court err in denying Sorensen’s motion to dismiss for insufficient evidence?

6. Was Sorensen denied his right to speedy trial?

7. Was Sorensen denied his right to a fair trial because of cumulative error?

During the summer of 1988, the Lincoln County Sheriff’s Office received information from a confidential informant that marijuana was growing in a field in a remote area near Troy, Montana. Upon investigating, officers found other marijuana patches in the same area. The marijuana plants were growing in a mixture of peat and potting soil. The smaller plants were in Grodan brand starter cubes. Nursery stakes, styrofoam cups, plastic five-gallon buckets, chicken wire, and “twisty ties” (used to secure garbage bags) were found in the fields. All of the marijuana patches were located on United States Forest Service land, and United States Forest Service and United States Fish and Wildlife agents joined in the investigation. Surveillance cameras were set up in several of the marijuana patches.

Later that summer, an informant told Officer Bernall of the Lincoln County Sheriff’s Office that defendant Sorensen was growing the marijuana on the Forest Service property and storing it at his land, and that Sorensen was a “major dealer” in marijuana. Sorensen owned and lived on one of eight twenty-acre parcels in a subdivision near the marijuana patches. Law enforcement personnel began watching Sorensen’s property. They observed a padlocked bunker with ventilation vents, several other out-buildings, and two gardens in which nothing was planted. Photographs from the surveillance cameras in the marijuana patches showed two people believed to be tending the marijuana, a man, believed to be Sorensen, and a woman.

On the afternoon of August 17, 1988, Wayne Wagner was observed entering Sorensen’s house. When he left the house, he carried a duffel bag which appeared to be full. The same afternoon, Sorensen discovered one of the officers doing surveillance on his property. Afterward, other officers doing surveillance saw Sorensen jump onto his motorcycle, go to where Wagner was camping on nearby Forest Service land, yell and whistle for Wagner, and engage in an animated conversation with Wagner. Sorensen and Wagner then returned to Sorensen’s house. The officers immediately initiated proceedings to obtain a search warrant and, about an hour later, arrested Sorensen.

When the search warrant arrived, the officers searched Sorensen’s property. Among the items discovered were loaded weapons and books on growing marijuana. One book described in detail how to grow wild marijuana without getting caught. The officers also found plastic five-gallon buckets, 251 styrofoam cups, 141 Grodan starter cubes, peat, chicken wire, 47 bags of potting soil, and “twisty ties.” A plastic bucket found in one of Sorensen’s vehicles was the same bucket on which, days before, an officer had scratched his initials in one of the marijuana patches. The officers also found notebooks which contained what they believed were coded watering schedules for the marijuana patches. Wagner’s duffel bag was seized from his camp. It contained a waterproof bag of marijuana.

Also seized from Sorensen’s house was a power bill from a home he owned in Spokane, Washington. The officers felt that the amount of the bill was suspiciously high. Pursuant to a Washington search warrant, the home was searched. Grow lights, Grodan starter cubes, drying racks, many marijuana plants, and packaged marijuana were found.

The information filed against Sorensen in Montana District Court included nine counts of felony possession of dangerous drugs with intent to sell, one count for each of nine marijuana patches. Sorensen was also charged with one count of sale of a dangerous drug to Wayne Wagner and one count of conspiring with Wagner to commit the sale of dangerous drugs. After a five-day jury trial, Sorensen was convicted of three misdemeanor counts of possession of marijuana, six counts of felony possession with intent to sell, and the counts of felony sale and conspiracy. He appeals.

I

Did the District Court err in denying Sorensen’s pretrial motions to suppress evidence on grounds of illegal arrest and search and violation of Sorensen’s right of privacy?

Montana’s Constitution provides, at Article II, Section 10, that ‘ ‘ [t]he right of individual privacy is essential to the well-being of a free society and shall not be infringed without the showing of a compelling state interest.” Sorensen contends that this provision protected him from trespass on his property by law enforcement officers. While the officers have not acknowledged that they trespassed on his property, Sorensen maintains that they must have, in order to see his buildings in the detail in which they were described in the search warrant.

The protection afforded under Montana’s constitutional right of privacy is broader than the right of privacy guaranteed under the United States Constitution. State v. Sierra (1985), 214 Mont. 472, 692 P.2d 1273. However, it is not boundless. The “open fields” doctrine, providing that the right of privacy in one’s home does not extend to open fields within the view of the public, has been recognized under Montana’s right of privacy. State v. Charvat (1978), 175 Mont. 267, 269, 573 P.2d 660, 661. Sorensen argues that because his property is heavily wooded, the open fields doctrine does not apply. But we hold that Sorensen did not have a legitimate expectation of privacy which would prevent law enforcement officers from observing the buildings on his unfenced twenty acres of land.

Sorensen further contends that he was illegally arrested at his home at night without a warrant. Section 46-6-401, MCA, sets forth the circumstances under which a police officer may make an arrest. Sorensen argues that none of the listed circumstances were present in this case.

We disagree. Subsection (l)(d) of sec. 46-6-401, MCA, provides that an officer may make an arrest without a warrant if “he believes on reasonable grounds that the person is committing an offense or that the person has committed an offense and the existing circumstances require his immediate arrest.” At the time Sorensen was arrested, officers knew that someone was growing marijuana on federal land, and they believed that it was Sorensen. Sorensen was now aware that he was under surveillance, and a summer-long investigation was in jeopardy. Given the opportunity, Sorensen would have every reason to destroy evidence on his property connecting him to the marijuana patches. We conclude that the exigent circumstances required Sorensen’s immediate arrest to prevent destruction of evidence on his property.

Sorensen also claims that the application for the search warrant for his property was inadequate because it did not establish probable cause and contained material falsehoods. The District Court considered the application for the warrant as though it did not contain four paragraphs which Sorensen successfully argued were in error. Even in the absence of those paragraphs, the court held that the application set forth probable cause for the issuance of a search warrant.

Without the paragraphs which were in error, the application alleged that the affiant (Officer Bernall) had been told and shown by a citizen informant that marijuana was growing in a certain field in the Troy area. It stated that a confidential, credible, and reliable informant had told the affiant that Sorensen was involved in marijuana and grew “acres” of it; that nine other fields of marijuana had been discovered on Forest Service land to the northeast, west, and south of Sorensen’s property; that the marijuana plants were cultivated and were set in a peat moss and potting soil mixture; that Forest Service employees had observed a peat moss bed on Sorensen’s property; and that the informant had said that Sorensen stored marijuana in a bunker on his property and a bunker had been observed on Sorensen’s property. It also stated that two years earlier, marijuana fields which had been observed in the same general area were destroyed and that the parents of two juveniles reported to police that Sorenson had threatened bodily injury to the juveniles, who he believed had destroyed the fields.

We hold, as did the District Court, that the application contained sufficient information to provide probable cause to issue the search warrant for Sorensen’s property.

II

Did the court err in allowing Wayne Wagner to testify?

Wayne Wagner was called by the prosecution to testify as an accomplice and co-conspirator. He testified that he obtained the marijuana found in his duffel bag from unnamed persons in Bonner’s Ferry, Montana. The prosecution impeached him with his previous statement (to one of the officers who arrested him) that he got the marijuana from Sorensen and that he had established a regular clientele to whom he sold marijuana. Sorensen argues that the State should not have been allowed to call Wagner as a witness because its only purpose in calling him was to impeach his testimony with his earlier statement implicating Sorensen.

Sorensen cites federal case law holding that where the primary purpose of calling a witness is to impeach that witness with a previous statement, the rule against hearsay precludes the testimony and overrides the right to impeach the witness’s credibility. E.g., United States v. Hogan (5th Cir. 1985), 763 F.2d 697. Those holdings are premised on Rule 607, Fed.R.Evid. Montana has not adopted that interpretation of the comparable Montana rule.

Rule 801(d)(1), M.R.Evid., provides that if a declarant testifies at trial and is subject to cross-examination on a prior inconsistent statement, the prior statement is not hearsay. We conclude that, in this instance, sufficient indicia of reliability were provided by the defense’s right to cross-examine Wagner on the prior statement and the jury’s concomitant opportunity to determine whether the prior statement or Wagner’s testimony at trial was more worthy of belief. We hold that the District Court did not err in allowing Wagner’s testimony.

III

Did the court err in allowing into evidence the photograph of a person in a marijuana patch?

The State introduced into evidence a photograph from a marijuana-growing magazine seized from Sorensen’s house. The photo showed a man standing in what appeared to be a marijuana patch. Officer Bernall testified that he believed the person in the photo was Sorensen. Sorensen contends that the person in the photo did not look like him and that it was an abuse of the court’s discretion to allow the photo into evidence. He contends that the prejudicial effect of the photo outweighed its probative value. He also claims that the photo should not have been admitted without notice of other crimes evidence as required by this Court’s opinion in State v. Just (1979), 184 Mont. 262, 602 P.2d 957.

It is not a crime to stand in what appears to be a marijuana field. There was no need for Just notice before the photo could be introduced into evidence. Further, Sorensen took full advantage of his opportunity at trial to argue to the jury that the man in the picture was not him. And, in relation to all of the evidence against Sorensen presented at trial, the photo’s prejudicial effect is questionable. We conclude that Sorensen has not shown that the District Court abused its discretion in admitting the photo into evidence.

IV

Did the court err in denying Sorensen’s severance motion?

Sorensen argues that trial of the conspiracy and sale counts should have been severed from trial on the other counts charged against him because the evidence on these two counts was so weak. He claims that the District Court’s failure to grant his motion to sever was an abuse of discretion warranting reversal.

Sorensen makes only a general allegation of prejudice from ‘the sheer overwhelming number of counts' with ‘only circumstantial evidence for proof.' On the other hand, several reasons support joinder of trial on all counts. All of the offenses were committed in the summer of 1988. As the State presented its case, they were all part of a common scheme to gain financial benefit from the sale of marijuana. Proof and witnesses overlapped on the charges. We conclude that the charges brought against Sorensen in this action were, in the words of sec. 46-11-404, MCA, ‘connected together in their commission.1 Sorensen has not made a sufficient showing that he was prejudiced by the joinder to warrant overruling the District Court’s discretion in denying the motion to sever.

IV

Did the court err in denying Sorensen’s motion to dismiss for insufficient evidence?

At the conclusion of the State’s case, Sorensen moved to dismiss the possession counts against him on the grounds of insufficient evidence. The District Court denied the motion. Sorensen argued, and again argues here, that the State did not adequately tie him personally to the marijuana fields.

The District Court’s standard of review on the motion to dismiss, like our standard of review on appeal, was whether any rational trier of fact could have convicted Sorensen of the offenses with which he was charged. See State v. Rodriguez (Mont. 1981), [_ Mont. _,] 628 P.2d 280, 283, 38 St. Rep. 578F, 5781,

The evidence tying Sorensen personally to the marijuana patches included: pictures of a person believed to be Sorensen on an ATV (all-terrain vehicle) near the marijuana fields and Sorensen’s similar ATV, found in the search of his property; the proximity of the marijuana patches to Sorensen’s property; the bucket with the officer’s initials scratched on its bottom, found in Sorensen’s vehicle; the books on growing wild marijuana; the drying racks, peat, potting soil, plastic buckets, and other gardening supplies found in Sorensen’s house; and the notebooks containing what appeared to be watering codes. We hold that there was sufficient evidence that a rational trier of fact could have found Sorensen guilty of the charges in Counts I through IX.

Sorensen also argues that Wagner’s testimony alone is insufficient to convict him on the sale and conspiracy counts. However, Wagner’s testimony was not the only evidence relating to those charges. Other evidence presented by the State as to the counts of sale of marijuana and conspiracy to sell marijuana included the following: the marijuana from Wagner’s duffel bag and the officers’ testimony about when it got there; the sheer amount of both the marijuana crop and the gardening equipment on Sorensen’s property; the evidence from Sorensen’s Spokane house, including marijuana packaged for sale; weapons and ammunition which linked Sorensen’s Spokane house with his house outside Troy; and the contrast between Sorensen’s small claimed income and his large apparent expenditures. We conclude that based on the evidence presented at trial a rational trier of fact could have found Sorensen guilty of the charges of sale and conspiracy to sell marijuana.

VI

Was Sorensen denied his right to speedy trial?

Four factors are considered in evaluating a claim of denial of the right to speedy trial: the length of the delay, the reason for the delay, the defendant’s assertion of the right to speedy trial, and prejudice to the defendant resulting from the delay. State v. Curtis (Mont. 1990), [241 Mont. 288,] 787 P.2d 306, 313, 47 St.Rep. 277, 283. The first factor, length of the delay, serves as a trigger to a speedy trial inquiry. Curtis, 787 P.2d at 313.

A period of 250 days elapsed between Sorensen’s arrest and his trial. That period is sufficient to trigger a speedy trial inquiry. State v. Waters (1987), 228 Mont. 490, 493, 743 P.2d 617, 619.

Sorensen claims that the entire 250-day delay is attributable to the State and that he was denied his right to speedy trial by this delay. A chronology of relevant events includes:

August 17, 1988 Sorensen arrested

August 30, 1988 Sorensen released on bail

September 15,1988 Information filed

September 22, 1988 Sorensen moved for a substitution of district judge

October 6, 1988 Judge Wheelis assumed jurisdiction

November 14, 1988 Arraignment; Sorensen filed motions to sever and to suppress evidence

November 21, 1988 Judge Wheelis recused himself

November 30, 1988 Judge Harkin assumed jurisdiction

March 23, 1989 Trial set for April 26, 1989

April 7, 1989 Pretrial motions heard; Sorensen’s motions to suppress were denied

April 14, 1989 Sorensen moved to dismiss for lack of speedy trial

April 24, 1989 Speedy trial motion denied

April 26, 1989 Trial commenced

Sorensen argues that he was forced to move for a substitution of district judge because Judge Keller, who was originally assigned the case, was the judge who had authorized the search warrant for Sorensen’s house. Sorensen did not want the judge who had originally determined that there was probable cause for the search to preside at the suppression hearing on the same issue.

Any delay caused by the defendant’s assertion of procedural rights will not weigh against the State. State v. Kelly (1983), 203 Mont. 159, 160-61, 661 P.2d 26, 27. Sorensen’s motion for substitution of district judge was an assertion of a procedural right, and there is no indication that the State purposely “forced” this occurrence. We hold that the time between September 22, 1988, and October 6, 1988, is not chargeable to the State. The time during which Sorensen’s motions to suppress were pending, from November 14, 1988, to April 7, 1989, is not totally chargeable to either party. Some of that delay resulted from Judge Wheelis recusing himself and some resulted from the heavy caseload of the deputy county attorney, as stated in his affidavit before the District Court. That leaves only sixty-six days. That time includes institutional delays inherent in calendaring the case and as a result of Judge Wheelis’s retirement.

Sorensen asserted his right to speedy trial in a timely manner by moving to dismiss for lack of speedy trial on April 14, 1989. That motion was denied. As to the prejudice caused by the delay, this Court looks to three interests: preventing oppressive pre-trial incarceration, minimizing the defendant’s anxiety and concern, and limiting the impairment of the defense. Curtis, 787 P.2d at 315. Because Sorensen was out on bail, the first interest has no weight. He has not shown anxiety and concern greater than that inherent in being accused of a crime. He has not shown prejudice to the defense of his case resulting from the delay. He does argue that he was deprived of his livelihood from his coin shop during the delay because his inventory of coins was seized in the search of his house.

To summarize, while the total delay in this case was long enough to trigger a speedy trial inquiry, the portion of the delay attributable to the State can largely be explained as time institutionally necessary in scheduling a trial. While Sorensen raised his right to speedy trial in a timely manner, he has not demonstrated significant prejudice from the delay. After considering the four speedy trial factors collectively, we hold that the State did not violate Sorensen’s right to a speedy trial.

vn

Was Sorensen denied his right to a fair trial because of cumulative error?

Sorensen argues that he was denied his right to a fair trial because of the cumulative effect of improperly admitted evidence of prior acts without notice to the defense, the improper use of Wagner’s testimony, the introduction of irrelevant exhibits, and the court’s failure to sever the conspiracy and sale counts.

We have discussed most of these issues individually and have concluded that Sorensen has not shown error. Application of the doctrine of cumulative error requires a finding of prejudicial error affecting the substantial rights of the defendant. State v. Close (Mont. 1981), [191 Mont. 229,] 623 P.2d 940, 948, 38 St.Rep. 177, 187-88. We hold that Sorensen has shown no prejudicial error which deprived him of his right to a fair trial.

Affirmed.

JUSTICES HARRISON, HUNT, BARZ, McDONOUGH, SHEEHY and WEBER concur.


text:
    STATE OF MONTANA, Plaintiff and Respondent, v. MARK GORDER, Defendant and Appellant.
    No. 89-541.
    Submitted on Briefs April 19, 1990.
    Decided May 16, 1990.
    792 P.2d 370.
    Russell K. Jones, Kaiser & Douglass, Spokane, Wash., for defendant and appellant.

      Marc Racicot, Atty. Gen., Elizabeth S. Baker, Asst. Atty. Gen., Helena, Cynthia K. Thornton, Powder River County Atty., Broadus, for plaintiff and respondent.
   JUSTICE HARRISON

delivered the Opinion of the Court.

Mr. Gorder appeals his conviction of conspiracy to possess dangerous drugs with intent to sell following a jury trial in the Sixteenth Judicial District, Powder River County, Montana. We affirm.

We will rephrase the issue raised for review as follows: Can defendant challenge jury instructions in a petition for post-conviction relief when defendant failed to object to the disputed instructions at trial?

On June 19, 1988, twenty-nine U-Haul boxes were discovered on a rural road in Powder River County. The boxes were found to contain approximately 778 pounds of marijuana. Law enforcement officers eventually arrested Ronald Amerline and his brother, Jody Scott Amerline, in connection with possessing and abandoning the marijuana. Ron Amerline pled guilty to possession of marijuana with intent to distribute, and Jody Amerline pled guilty to possession.

Ron Amerline to transport marijuana from Tucson, Arizona to Buffalo, New York on three occasions. Ron Amerline, a co-conspirator, testified for the prosecution during Mr. Gorder’s trial.

Essentially, Mr. Gorder argues that the District Court erred in instructing the jury regarding how to properly evaluate a co-conspirator’s testimony. However, Mr. Gorder concedes that he cannot directly appeal this alleged error because the defense failed to object to the disputed instructions at trial. See sec. 46-20-104(2), MCA. Since he cannot appeal this issue, Mr. Gorder asks this Court to construe this appeal as a petition for post-conviction relief.

Section 46-21-103, MCA, provides for the commencement of a petition for post-conviction relief with this Court. Further, the record before us substantially complies with sec. 46-21-104, MCA, which sets forth the required contents of a petition for post-conviction relief. Therefore, in the interests of judicial economy, we will grant defendant’s request and consider this action as a petition for post-conviction relief.

Not all allegations of error may be raised in a petition for post-conviction relief. In pertinent part, sec. 46-21-105, MCA, states:

“When a petitioner has been afforded a direct appeal of his conviction, grounds for relief that could reasonably have been raised on direct appeal may not be raised in his original or amended petition.”

The purpose of the above waiver provision is to preserve the integrity of the trial and direct appeal and to prevent abuse of the post-conviction relief process.

In this case, defendant, through a petition for post-conviction relief, hopes to make an end run around the procedural default provision in sec. 46-20-104, MCA. Not only did defendant run afoul of sec. 46-20-104, MCA, which requires timely objections at trial to preserve issues for appeal, but defendant also violated sec. 46-16-401(4), MCA. That statute specifically requires counsel to register any objections to instructions before they are submitted to the jury.

Defendant offers no excuse for failing to object at trial. He does not argue that during the settling of instructions he could not reasonably have complied with the procedural requirements of sec. 46-20-104, MCA, and sec. 46-16-401(4), MCA. Since objections to the instructions could reasonably have been raised at trial, those grounds for relief could reasonably have been available for direct appeal. To allow defendant to raise an issue in post-conviction relief that he could reasonably have preserved for direct appeal constitutes an abuse of process.

“Abuse of process occurs where an applicant raises in post-conviction proceedings a factual or legal contention which the petitioner deliberately or inexcusably failed to raise in the proceedings leading to conviction, or having raised the contention in the court, failed to pursue the matter on appeal.”

McKenzie v. Osborne (1981), 195 Mont. 26, 34, 640 P.2d 368, 373. We hold that defendant’s claim for post-conviction relief is barred by sec. 46-21-105, MCA.

To hold otherwise would seriously undermine the effectiveness of the procedural default provisions. The procedural default provisions serve an important purpose in the administration of justice because they ensure that all possible errors in the trial process are asserted and considered by the trial court. Thus the procedural default provisions promote the central function of the trial court which is to provide an accused with a fair trial.

In summary, Gorder waived his right to directly appeal the jury instruction issue. Since he has not demonstrated that he could not lodge his objections during trial, the waiver carries into the post-conviction process via sec. 46-21-105, MCA. Defendant’s petition for post-conviction relief is dismissed for failure to state a claim upon which relief can be granted.

Affirmed.

CHIEF JUSTICE TURNAGE and JUSTICES SHEEHY, BARZ and WEBER concur.


author: JUSTICE BARZ

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. ODELL ECKER, Defendant and Appellant.
    No. 89-600.
    Submitted on Briefs April 5, 1990.
    Decided May 8, 1990.
    792 P.2d 1079.

      Bradley B. Parrish, Lewistown, for defendant and appellant.
    Marc Racicot, Atty. Gen., Elizabeth Baker, Asst. Atty. Gen., Helena, Craig Buehler, County Atty., Lewistown, for plaintiff and respondent.
   JUSTICE BARZ

delivered the Opinion of the Court.

Odell Ecker, defendant, appeals the decision of the District Court of the Tenth Judicial District, Fergus County, denying his motion to dismiss the amended information charging misdemeanor assault. Defendant alleged that the amended information was not supported by an affidavit establishing probable cause. We affirm the district court.

On September 12, 1988, the deputy county attorney for Fergus County filed an information in the District Court for the Tenth Judicial District, charging the defendant with the offense of criminal endangerment, a felony. In support of the application for leave to file the information, the deputy county attorney filed an affidavit reciting the following facts:

“That on or about the 10th day of August, 1988, Charlene Garoutte was operating her motor vehicle on a highway in Fergus County, Montana near the Coffee Creek, Montana area. That the Defendant Odell Ecker was operating his white pickup truck in the same area. That the Defendant drove his pickup immediately behind the car of Charlene Garoutte and appeared to b[e] trying to hit her car with his pickup, that the Defendant also pulled his truck around Charlene Garouttef,] got in front of her of her [sic] car and put on his brakes, whereby she had to either swerve around him or crash into the back of his pickup. That Charlene Garoutte then went around him, and the Defendant then again put his pickup right on the rear bumper of her car, as well as tried to pass her and force her off the road. That such activity of the Defendant appeared to create a substantial risk of death or serious bodily injury.”

Trial was set for December 14, 1988, and was continued until August 29, 1989.

On August 4, 1989, defendant moved to amend the charge on the ground that the offense of criminal endangerment was not intended to create an offense for conduct involving illegal or negligent operation of motor vehicles, and, if so applied, would be unconstitutionally overbroad. The district court agreed with defendant and granted the motion to amend, ruling that the amended charge should be a misdemeanor assault in violation of sec. 45-5-201(l)(d), MCA. Defendant raised no objection to this ruling, and the court directed defense counsel to prepare the order. An order was subsequently entered expressing the court’s determination that,

“the facts stated in the Affidavit in Support of the Motion for Leave to File Information concerning the alleged incident more precisely support a charge of assault under M.C.A. SECTION 45-5-201(1) (D) rather than the offense charged in the Information under M.C,A. SECTION 45-5-207.” (Emphasis in original.)

The district court therefore directed the deputy county attorney to file an amended information, but found no need for the filing of a separate affidavit. An amended information was filed August 29, 1989, charging defendant with misdemeanor assault. Prior to commencement of trial on August 29, 1989, defendant moved to dismiss the amended information on the ground that there had been no affidavit filed to support the new charge of assault. The court found that the affidavit in support of the original information clearly described “all of the elements necessary to charge assault” and denied defendant’s motion to dismiss the amended information as well as defendant’s request to continue the trial setting.

Defendant was convicted on August 30, 1989 of misdemeanor assault. On September 7, 1989, he appeared in open court for sentencing and was ordered to pay a fine of $500, together with a $10 fee pursuant to sec. 45-18-236, MCA, jury costs in the amount of $956.16, and court costs of $67.50; he was further sentenced to a term of six months’ incarceration at the Fergus County jail, with all but three days thereof suspended.

The sole issue raised on appeal is whether the district court erred in denying defendant’s motion to dismiss the amended information for failure to file a new affidavit.

Defendant argues that the offense of criminal endangerment and the offense of misdemeanor assault are such dissimilar acts that the county attorney was required to support the amended information, charging defendant with misdemeanor assault, with an affidavit that specifically stated that defendant “purposely or knowingly caused reasonable apprehension of bodily injury in another.” Defendant then argues that since the affidavit in support of the information charging defendant with criminal endangerment does not mention the language found in the assault statute, that the affidavit is not sufficient to establish probable cause for the offense of misdemeanor assault. We disagree.

A court may use common sense and draw permissible inferences when examining an affidavit for a determination of probable cause. State v. Riley (1982), 199 Mont. 413, 423, 649 P.2d 1273, 1278. This Court’s role on appeal is merely to determine whether the district court abused its discretion. State v. Buckingham (Mont. 1989), [240 Mont. 252,] 783 P.2d 1331, 1334, 46 St.Rep. 2102, 2105.

The filing of an amended information does not require a second affidavit if the affidavit filed with the original information established probable cause as to the amended charge. Parker v. Crist (1980), 190 Mont. 376, 381, 621 P.2d 484, 487. In Parker, this Court specifically stated that

“The filing of a second affidavit containing the same information and the same showing of probable cause would serve no purpose, would not contravene the policy behind the requirement, and would be superfluous. The law does not require idle acts. Section 1-3 223, MCA.”

Parker, 190 Mont, at 381, 621 P.2d at 487. Accordingly, leave to file the amended information was proper in this case if the affidavit in support of the criminal endangerment charge contained sufficient factual allegations to support a finding of probable cause to believe that defendant had committed the offense of misdemeanor assault.

The district court, in response to defendant’s motion to dismiss the amended information on the ground that there had been no affidavit filed to support the new charge of assault, found that the affidavit in support of the original information clearly described “all of the elements necessary to charge assault.” In particular, the court noted that the affidavit described defendant’s actions, and also the victim’s actions in trying to avoid the assault, showing her awareness of the situation. The court also commented that the part of the affidavit stating “[tjhat such activity of the Defendant appeared to create a substantial risk of death or serious bodily injury” constitutes one of the elements of assault.

The offense of misdemeanor assault is committed if a person ‘ ‘purposely or knowingly causes reasonable apprehension of bodily injury in another.” Section 45-5-201(l)(d), MCA. As already noted, assault requires apprehension of bodily injury, whereas the terminology in the affidavit stated that defendant’s actions “appeared to create a substantial risk. ” This difference in phraseology, however, does not defeat the showing of probable cause for assault. As noted above, the district court is allowed to draw permissible inferences from the affidavit. When the affidavit is examined as a whole, the district court could reasonably infer that defendant’s actions created a reasonable apprehension of harm in the victim. The district court did not abuse its discretion in so concluding.

Affirmed.

JUSTICES SHEEHY, HARRISON, HUNT and McDONOUGH concur.