author:
JUSTICE HUNT
      JUSTICE NELSON CHIEF JUSTICE TURNAGE JUSTICE GRAY

text:
    HAZEL MARIE PHILLIPS, Petitioner and Respondent, v. TRUSTEES, MADISON SCHOOL DISTRICT NO. 7, and NANCY KEENAN, Superintendent of Public Instruction, Respondents and Appellants.
    No. 93-116.
    Submitted on Briefs September 2, 1993.
    Decided January 28, 1994.
    51 St.Rep. 29.
    263 Mont. 336.
    867 P.2d 1104.

      JUSTICE NELSON specially concurred, joined by CHIEF JUSTICE TURNAGE.
    JUSTICE GRAY dissenting, joined by JUSTICE WEBER.
    For Appellant: Charles E. Erdmann, Erdmann Law Office, Helena (for Madison School District); Kathleen Holden, Chief Legal Counsel, Office of Public Instruction, Helena (for Nancy Keenan).
    For Respondent: J. C. Weingartner, Helena.
    For Amicus Curiae: Janice Frankino Doggett, Helena (for Montana School Boards Assoc.); Emilie Loring, Missoula (for Montana Education Association).
   JUSTICE HUNT

delivered the Opinion of the Court.

The Madison School District No. 7 Trustees (trustees), and Nancy Keenan, Montana Superintendent of Public Instruction (state superintendent), appeal from an order of the First Judicial District Court, Lewis and Clark County, reversing the state superintendent’s decision concerning the termination of respondent, Hazel Marie Phillips, a Twin Bridges school teacher.

We affirm.

Did the District Court err when it reversed the state superintendent’s decision, which had reversed the county superintendent’s decision, on the grounds that the county superintendent considered evidence not available to the trustees?

In 1989, Phillips was a tenured English and Art teacher employed by the Madison School District for over 16 years. On or about January 3, 1989, the trustees passed a resolution declaring a school district financial emergency and authorized a ballot to consider a $103,020 emergency levy for the high school, and a $73,621 emergency levy for the elementary school. The voters defeated the levies. At a meeting on February 3, 1989, the trustees eliminated a number of programs including the English/Art program. On February 23, 1989, the trustees submitted a second proposed set of emergency levies at $38,884 and $47,277, of which the voters approved. On March 1, 1989, the trustees informed Phillips of the school superintendent’s recommendation to eliminate her position in a reduction of force, due to the financial emergency. On March 22, 1989, at the hearing for Phillips and two other tenured teachers, the trustees voted to accept the school superintendent’s recommendation that Phillips’ teaching contract be terminated.

Phillips claimed that the school superintendent recommended her termination to the trustees because of a personality conflict between the two. On April 17, 1989, Phillips appealed the decision to the county superintendent. On October 24,1989, the county superintendent found that Phillips was unjustly terminated because of a personality conflict with the school superintendent, and not because of a financial emergency. On November 22, 1989, the trustees filed an appeal to the state superintendent who affirmed the county superintendent on November 30, 1990.

On December 28, 1990, the trustees filed a petition for judicial review in the Fifth Judicial District Court, Madison County. Subsequently, the parties determined that the record reviewed by the state superintendent was incomplete. On February 19, 1991, by agreement and stipulation of the parties, the court remanded the case to the state superintendent with orders to obtain and review all the evidence presented by the parties to the county superintendent.

On June 27, 1991, the state superintendent reversed her first decision by reversing the decision of the county superintendent. The state superintendent found that on October 24, 1989, the county superintendent improperly weighed financial information unavailable to the trustees on March 22, 1989, when they decided to accept the school superintendent’s recommendation that Phillips’ contract be terminated.

On August 27, 1991, Phillips filed a petition for judicial review in the First Judicial District Court, Lewis and Clark County, asking the court to reverse the final order of the state superintendent and to reinstate the order of the county superintendent. On December 10, 1992, the First Judicial District Court found that because the hearing with the county superintendent was de novo, the county superintendent properly could consider any information before her, including the financial evidence admitted at the hearing without objection by the trustees. Further, the court found that the county superintendent’s findings of fact were not clearly erroneous, and her conclusions of law were neither arbitrary nor capricious. Consequently, the District Court reversed the decision of the state superintendent and reinstated the county superintendent’s decision that had reversed the trustees’ decision to terminate Phillips’ contract.

On January 25, 1993, the trustees and state superintendent filed this appeal.

Did the District Court err when it reversed the state superintendent’s decision, which had reversed the county superintendent’s decision, on the grounds that the county superintendent considered evidence not available to the trustees?

We agree with the First Judicial District Court. The District Court properly upheld the county superintendent’s decision, after finding that it was supported by reliable, probative, and substantial evidence, and not clearly erroneous. Section 2-4-704(2)(a)(v), MCA. The court then properly determined that the hearing before the county superintendent was ahearing de novo. Johnson v. Beaverhead County High Sch. Dist. (1989), 236 Mont. 532, 771 P.2d 137; Yanzick v. School Dist. 23 (1982), 196 Mont. 375, 641 P.2d 431; Section 20-3-210(1) and (3), MCA. Because the county superintendent’s review is de novo, the county superintendent could review any relevant issues of law or fact before her at the time of the hearing.

The county superintendent’s findings of fact and conclusions of law reveal that in light of the trustees’ claim of a financial emergency, she considered financial data regarding the school district’s budget: “The Reserve account in the amount of $57,298.00 for the 1989-90 fiscal year was double the 1987-88 amount of $25,227.00 and triple the 1988-89 amount of $14,704.00.” At the hearing, Phillips introduced an exhibit into evidence dated July 24, 1989, containing the 1989-90 high school budget of $57,298.71, for the year beginning July 1,1989, and another financial summary dated August 2,1989. Both of these summaries post-date March 22,1989, the date on which the trustees voted to terminate Phillips’ contract.

We hold that the proceedings before the county superintendent were de novo proceedings and she could properly consider all relevant evidence presented to her.

We affirm the District Court.

JUSTICES HARRISON and TRIEWEILER concur.

JUSTICE NELSON

specially concurs

I concur in the result reached by this Court, although I do so while acknowledging the impossible position in which the statutory scheme places the board of trustees.

My frustration is primarily grounded in the anomalous situation ably discussed by the dissent regarding the use of evidence not available to the Trustees or in existence at the time of their decision, at the de novo hearing before the county superintendent. Under § 20-4-205, MCA, the board of trustees is required to make its teacher hiring decisions for the next school year at a time before final budgetary information is available under Title 20, Chapter 9, Part 1. As the respondents correctly point out in their brief on appeal:

In good financial times this process generally works as districts can expect to receive increased state support and some growth in district taxable valuation. In troubled financial times, however, or where districts are experiencing declining enrollment, the trustees find themselves in a situation where they must make staffing decisions before they are aware of their final budget revenue figures. In these situations the trustees make the best decision they can with the available information.

Under that sort of statutory scheme, one can hardly fault the school board for planning programs and hiring teachers and staff very conservatively, especially when the board is increasingly faced with failed school levy elections, taxpayer revolts and major changes in school funding laws that seemingly follow each session of the legislature and each court challenge.

Notwithstanding, our school laws also provide that a teacher who claims that his or her teaching contract was, for an improper reason, not renewed by the board of trustees, is entitled to a “de novo” hearing before the county superintendent. Sections 20-3-210,20-4-204, MCA; Johnson v. Beaverhead Cty. Sch. D. (1989), 236 Mont. 532, 534, 771 P.2d 137, 138; Yanzick v. School District No. 23 (1982), 196 Mont. 375, 385, 641 P.2d 431, 437.

A de novo hearing is “[a] new hearing or a hearing for the second time, contemplating an entire trial in [the] same manner in which [the] matter was originally heard and a review of previous hearing. On hearing ‘de novo’ [the] court hears [the] matter as court of original and not appellate jurisdiction.” Black’s Law Dictionary 649 (5th ed. 1979).

In Rickett v. City of Billings (1993) 261 Mont. 339, 864 P.2d 793, 50 St. Rep. 1586, 1586, we recently stated:

Black’s Law Dictionary (4th ed. 1968) 1677, defines trial de novo as “[a] new trial or retrial had in an appellate court in which the whole case is gone into as if no trial whatever had been had in the court below.” Therefore, a district court must conduct the proceedings before it as if the case had originated in that court, following all statutes and rules governing district court proceedings. (Emphasis added).

Section 20-3-210, MCA, briefly describes the procedure by which the county superintendent conducts a hearing de novo. That section provides in pertinent part:

(3) The county superintendent shall hear the appeal and take testimony in order to determine the facts related to the controversy and may administer oaths to the witnesses that testify at the hearing. The county superintendent shall prepare a written transcript of the hearing proceedings. The decision on the matter of the controversy that is made by the county superintendent must be based upon the facts established at the hearing.

Section 20-3-210(3), MCA. (Emphasis added.) Also, § 2-4-703, MCA, provides that “the court may order that the additional evidence be taken before the agency upon conditions determined by the court.”

In an Opinion of the Attorney General discussing whether a hearing before a county superintendent is an original proceeding with de novo consideration, the Attorney General stated that:

The term “hearing” when used with reference to a proceeding is an equity term synonymous with “trial,” and includes the reception of evidence and arguments thereon for the sake of deciding correctly thereon. Grant v. Michaels [(1933)], 94 Mont. 452, 461, 23 P.2d 266. Montana law thus has specified a de novo type proceeding upon appeal to the county superintendent, and not merely a review of a decision of a school board. An analogous situation is an appeal from justice court to district court. Although that proceeding is referred to as an appeal, it is a trial de novo and original proceeding. The decision rendered by the school board is not voided by full consideration of the controversy by the county superintendent, but the board’s decision is taken into consideration along with facts, documents and testimony presented at the hearing.

35 Op. Att’y. Gen. No. 42 (1973). (Emphasis added.) The last sentence of the above paragraph implicitly contemplates that additional evidence may be presented at the county superintendent’s level of hearing and review.

While the above authorities do not precisely address the relevance of post-termination evidence at the hearing de novo, and while the position taken by the respondents and by the dissent has logical appeal — why should the school board’s hiring decisions be second guessed on the basis of budget evidence not even in existence when the board was required to make its decisions? — nevertheless, despite exhaustive research, I have located no persuasive authority which would preclude the use of that sort of evidence in a de novo proceeding, given the obligation of the county superintendent to act as the initial fact finder in the controversy.

Moreover, the cited authorities do contemplate that on a hearing or trial de novo, that the evidence is to be presented “as if the case had originated in that [tribunal]” and “as if no trial, whatever, had been had in the [tribunal] below” and on the basis of facts, documents and testimony established and presented at the de novo hearing. Under those authorities, there is nothing to preclude the de novo finder of fact from considering relevant evidence that may not have been available to the first tribunal, given the requirement that the second hearing is an original, “from scratch” proceeding.

On de novo review, the tribunal or hearing officer (here the county superintendent) is entitled to hear all relevant evidence on the controversy at issue. See § 2-4-612, MCA, which makes Rule 402, M.R.Evid., applicable to administrative agencies. Rule 402, M.R.Evid., states that all relevant evidence is admissible, except where specific exceptions apply.

“Relevant evidence” is simply:
... evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence ... [and] ... may include evidence bearing upon the credibility of a witness or hearsay declarant.

Rule 401, M.R.Evid. Stated another way, the test of relevancy is:

... whether an item of evidence will have any value, as determined by logic and experience, in proving the proposition for which it is offered.

Derenberger v. Lutey (1983), 207 Mont. 1, 9, 674 P.2d 485, 489. Importantly, our rules of evidence do not qualify relevancy on the basis of when the evidence came into existence in relation to the matter at issue.

If, as in the instant case, the teacher claims that the non-renewal of her contract for lack of funds was merely a pretext, then prohibiting the use of relevant, post-termination evidence regarding the availability of funds might deprive her of one of the most probative pieces of evidence with which she can prove her case.

Moreover, on balance, it makes more sense to admit such evidence than to disallow it. If the evidence is admitted, the school board still has the ability to prove that its decision not to renew the teacher’s contract was based solely on financial reasons and was not merely a pretext to justify a wrongful discharge. If, on the other hand, the evidence cannot even be considered, then the teacher is deprived of using the one piece of evidence that, along with other evidence, might prove that her allegations are correct.

Quite simply, if, as here, the statutory scheme forces a Hobson’s choice, then, the hearing de novo, being, at its root, a search for the truth, we should err on the side of allowing more relevant information on the issue rather than less.

Accordingly, while acknowledging the well-reasoned and argued positions of the Trustees here, the State Superintendent and the dissent, I must, nevertheless, concur.

CHIEF JUSTICE TURNAGE

joins in the foregoing special concurrence.

I concur in the specially concurring opinion of Justice Nelson.

JUSTICE GRAY

dissenting.

I respectfully dissent from the opinion of the Court. I would reverse the District Court.

My disagreements with the Court are two. First, the Court does not address the District Court’s threshold determination that the Trustees waived their objection to consideration of post-termination information by the County Superintendent. I would reverse the District Court on this issue because it is my view that the Trustees made a sufficient and, indeed, legally correct objection to the relevance of that information. While the record can be read narrowly to support the District Court’s determination that no “objection” stated in such terms was made, I would read the record before us more generously under these circumstances where neither party raised or briefed the “objection/waiver” issue in the District Court.

It seems to me that a fair reading of the record indicates that the parties agreed to allow all the post-termination evidence into the record for purposes of the County Superintendent’s hearing subject to objections in their post-hearing briefs. The Trustees then argued in their brief that the school district was unaware of what the reserve fond level ultimately would be at the time they were compelled to make their termination decision; in essence, I read that to be an objection to the post-termination evidence on relevance grounds. Certainly it appears that the parties so understood matters to and through the subsequent proceedings in the District Court during which Phillips did not raise an issue with regard to any waiver by the Trustees. For these reasons, I would reverse the District Court’s determination that the Trustees failed to object and thereby waived their right to object to use of the post-termination evidence.

Second, the Court’s total lack of discussion of the significant issue before us for the first time in this case — namely, whether such post-termination evidence can be used by a county superintendent in reviewing a termination decision made by school district trustees — is troubling. While that discussion is ably provided in Justice Nelson’s concurrence, the formal Court opinion is devoid of legal analysis of the issue.

On the merits of that critical issue — whether evidence not in existence at the time of the Trustees’ decision can be used in reviewing that decision — I also disagree with the Court. The Court correctly states that hearings before a county superintendent of the kind at issue here are de novo hearings. The Court then proceeds to a conclusion that, because the hearing is de novo, any relevant issues of law or fact before the County Superintendent could be reviewed as if the Trustees’ decision had never taken place. I agree with that conclusion as well. The crux of the issue, though, is precisely that raised by the Trustees — is evidence regarding the financial circumstances of the school district which did not exist at the time of the Trustees’ decision “relevant” in reviewing that decision? The Court seems to conclude that it is, without specifically so stating and without discussion or citation to authority. I disagree.

It is my view that post-termination evidence — that is, evidence which did not exist at the time a termination decision was statutorily required — is not relevant and, therefore, cannot be used by a county superintendent in reviewing a termination decision. While a county superintendent’s hearing is de novo under our interpretations of § 20-3-210, MCA, that conclusion does not mandate or even suggest a conclusion that “facts” which did not exist at the time of the decision are relevant. The Trustees must act within statutory time frames and they must act based on information available at that point in time. To suggest that a decision made on the only information available properly can be reviewed at a later time by either the county superintendent, the state superintendent, or any court, based on an entirely different informational and evidentiary basis is without logic and puts school trustees in an untenable position.

Sections 20-3-210(1) and (3), MCA, provide in pertinent part:
[T]he county superintendent shall hear and decide all matters of controversy arising in the county as a result of decisions of the trustees of a district in the county.
The county superintendent shall hear the appeal and take testimony in order to determine the facts related to the controversy.

The “controversy” before the County Superintendent in this case was the validity of the Trustees’ decision to terminate Phillips. Section 20-3-210(3), MCA, authorizes the County Superintendent to determine the “facts related to” that controversy. The related facts, I submit, can be only those which existed at the time the controversy came into existence, namely, the facts which existed and which were available to the Trustees at the time they made their decision. To hold that later-existing “facts” relate, and thus are relevant, to an earlier decision, is to graft into substantive Montana law the kind of hindsight which each of us always hopes will not be used to judge our personal or professional decisions. I cannot agree.

JUSTICE WEBER concurs in the foregoing dissent.


source: Caselaw Access Project

author: JUSTICE GRAY

license: Public Domain

text:
    TIMOTHY LUND, Petitioner and Respondent, v. STATE COMPENSATION MUTUAL INSURANCE FUND/GARDEN CITY PLUMBING AND HEATING, INC., Defendant, Employer and Appellant.
    No. 93-286.
    Submitted on Briefs January 13, 1994.
    Decided February 11, 1994.
    51 St.Rep. 83.
    263 Mont. 346.
    868 P.2d 611.

      For Defendant, Employer and Appellant: Oliver Goe, Browning, Kaleczyc, Berry & Hoven, Helena.
    For Petitioner and Respondent: Rex Palmer, Missoula.
   JUSTICE GRAY

delivered the Opinion of the Court.

The issue before us is whether the Workers’ Compensation Court erred in concluding that, pursuant to § 39-71-709, MCA (1985), claimant could withdraw his election to proceed under § 39-71-703, MCA (1985), and seek benefits under §§ 39-71-705 through 39-71-708, MCA (1985). We hold that the court did not err and, therefore, affirm its grant of claimant’s motion for summary judgment.

The relevant facts are uncontested. Claimant Timothy Lund (Lund) was employed by Garden City Plumbing and Heating, Inc. (Garden City) on July 8,1986, when he was injured in the course and scope of his employment. Garden City’s workers’ compensation carrier, the State Compensation Mutual Insurance Fund (State Fund), accepted liability for the injury. The parties engaged in litigation concerning the injury; that litigation ended in 1990 with a determination by the Workers’ Compensation Court that Lund was entitled to receive 500 weeks of permanent partial disability benefits pursuant to § 39-71-703, MCA (1985), at a weekly rate of $13.34. The State Fund paid benefits pursuant to the court’s order. The parties did not enter into a settlement or release of the claim.

On September 9, 1992, Lund notified the State Fund that he was withdrawing his election to proceed under § 39-71-703, MCA (1985), and electing to receive benefits under §§ 39-71-705 through 39-71-708, MCA (1985). He relied on § 39-71-709, MCA (1985), as authority for withdrawing his earlier election.

Lund filed a petition for hearing regarding the change of election on December 4, 1992, and the State Fund responded. Both parties subsequently moved for summary judgment. The Workers’ Compensation Court granted Lund’s motion for summary judgment and denied the State Fund’s motion. The State Fund appeals.

Our standard in reviewing a grant of summary judgment is the same as that used initially by the trial court under Rule 56, M.R.Civ.P. Minnie v. City of Roundup (1993), 257 Mont. 429, 431, 849 P.2d 212, 214. We determine whether there is an absence of genuine issues of material fact and whether the moving party is entitled to judgment as a matter of law. Minnie, 849 P.2d at 214. As noted above, the facts are not disputed here; each party asserted entitlement to judgment as a matter of law. The Workers’ Compensation Court concluded that § 39-71-709, MCA (1985), authorized Lund to withdraw his election at any time and, on that basis, granted his motion for summary judgment. We review a court’s legal conclusion to determine whether it is correct. Steer, Inc. v. Dep’t of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603.

We begin by summarizing the 1985 version of Montana’s Workers’ Compensation Act, insofar as it is relevant here. Briefly stated, § 39-71-709(1), MCA (1985), permits a claimant to “receive compensation under 39-71-703 or indemnity benefits under 39-71-705 through 39-71-708.” The “compensation” available under § 39-71-703, MCA (1985), is the weekly permanent partial disability benefit based on an “actual diminution in the worker’s earning capacity measured in dollars[;]” the disability benefit is available for a maximum of 500 weeks. The benefit available pursuant to §§ 39-71-705 through 39-71-708, MCA(1985), purports to indemnify a claimant for possible loss of future earning capacity resulting from injuries to specified body members. Hartman v. Staley Continental (1989), 236 Mont. 141, 145, 768 P.2d 1380, 1383. In the usual case, a claimant elects to seek one or the other type of benefit and proceeds only under that election.

Here, Lund successfully sought permanent partial disability benefits pursuant to § 39-71-703, MCA (1985), in the first proceeding. He was awarded, and received, disability benefits based on his actual loss of earning capacity for the maximum 500 weeks allowed by statute. See § 39-71-703, MCA (1985). His actual wage loss was 500 an hour, for a weekly rate under § 39-71-703(1), MCA (1985), of $13.34. He subsequently withdrew his election to proceed under § 39-71-703, MCA (1985), and filed a petition to seek indemnity benefits under §§ 39-71-705 through 39-71-708, MCA (1985). Pursuant to those statutes, indemnity benefits to which Lund might establish entitlement would be paid at the weekly rate provided in § 39-71-703, MCA (1985), for a maximum of 500 weeks. See §§ 39-71-705 through 39-71-708, MCA (1985). That rate apparently may be $149.50 per week. The Workers’ Compensation Court concluded that § 39-71-709, MCA (1985), authorizes the withdrawal of Lund’s initial election. The State Fund asserts error.

The State Fund’s argument is that a claimant who elects to seek permanent partial disability benefits under § 39-71-703, MCA (1985), and who receives the statutory maximum of500 weeks of such benefits, cannot thereafter withdraw the initial election and seek entitlement to benefits under §§ 39-71-705 through 39-71-708, MCA (1985). We disagree.

Section 39-71-709(3), MCA (1985), provides in pertinent part that “[a] worker who has elected to proceed under 39-71-703 may withdraw his election at any time and is entitled to receive indemnity benefits under 39-71-705 through 39-71-708....” The role of the courts in interpreting statutes is to “declare what is in terms or in substance contained therein, not to insert what has been omitted or to omit what has been inserted.” Section 1-2-101, MCA. Moreover,

[t]he rules of statutory construction require the language of a statute to be construed according to its plain meaning. If the language is clear and unambiguous, no farther interpretation is required.

GBN, Inc. v. Dep’t of Revenue (1991), 249 Mont. 261, 265, 815 P.2d. 595, 597.

Lund’s right to withdraw his original election and proceed under §§ 39-71-705 through 39-71-708, MCA (1985), is controlled by the language contained in § 39-71-709(3), MCA (1985). That statute specifically authorizes a claimant to withdraw a § 39-71-703, MCA (1985), election at any time and seek entitlement to indemnity benefits. Section 39-71-709, MCA (1985), contains no time limitation within which a withdrawal of election must be made; nor do any other applicable statutes contain such time limitations. The statute clearly contemplates and authorizes circumstances such as those before us here. No interpretation is needed.

In the face of such clarity, the State Fund’s efforts to rely on time limitations for withdrawing an election — based on either the procedural status of the original proceeding or the extent to which benefits have been paid pursuant to order of the court in that proceeding — are unwarranted. The State Fund’s arguments in this regard amount to a request that this Court insert into § 39-71-709, MCA (1985), words not contained therein so as to limit the clear statutory rights provided to claimants by the Montana legislature. Such an insertion would be inconsistent with the language of the statute; indeed, it would render that language a nullity.

The State Fund contends, however, that allowing Lund to withdraw his election and seek indemnity benefits, may result in Lund receiving 1000 weeks of benefits, rather than the statutory maximum of 500 weeks contained in § 39-71-703(2), MCA. We agree that Lund already has been awarded the maximum 500 weeks of permanent partial disability benefits authorized by § 39-71-703, MCA (1985). However, Lund is not seeking additional weeks of disability benefits based on the “actual loss of earning capacity” criterion in § 39-71-703, MCA (1985). He seeks, instead, indemnity benefits under §§ 39-71-705 through 39-71-708, MCA (1985). An award of such indemnity benefits would not extend the number of weeks of § 39-71-703, MCA (1985), benefits received by Lund past the statutory maximum; it merely would result in a separate number of weeks of indemnity benefits under §§ 39-71-705 through 39-71-708, MCA (1985), at a higher weekly rate than Lund received in the previous litigation.

The State Fund also argues that allowing Lund to withdraw the earlier election and seek indemnity benefits contravenes the prohibition contained in § 39-71-709(3), MCA (1985), against a “greater benefit” in the event of such a withdrawal. The statute does not support the State Fund’s position.

The portion of § 39-71-709(3), MCA (1985), relied on by the State Fund provides that in the event of a withdrawal of election, a worker "shall not be entitled to a greater benefit, including compensation paid under 39-71-703, than he would have received if he had proceeded exclusively under 39-71-705 through 39-71-708.” The clear meaning of this language is that a claimant’s total benefits cannot exceed the benefits available had the claimant proceeded under §§ 39-71-705 through 39-71-708, MCA (1985), originally. In other words, the claimant cannot stack subsequent indemnity benefits onto earlier disability benefits in order to receive a double recovery. The maximum amount to which a claimant is entitled is that available under the indemnity statutes. Once the Workers’ Compensation Court determines the amount of indemnity benefits to which a claimant is entitled under §§ 39-71-705 through 39-71-708, MCA (1985), any amount previously received as disability compensation or benefits under § 39-71-703, MCA (1985), must be offset from that total. When the subtraction is performed, a claimant does not receive a “greater benefit” by receiving the indemnity benefits he would have received had he proceeded originally and exclusively under §§ 39-71-705 through 39-71-708, MCA (1985).

The State Fund’s final argument is that principles of res judicata or collateral estoppel apply because Lund’s entitlement to permanent partial disability benefits was finally decided in the prior litigation. We agree that Lund’s entitlement to permanent partial disability benefits -under § 39-71-703, MCA (1985), was finally decided. However, as discussed above, his entitlement to indemnity benefits is a different issue based on different statutory criteria. Lund’s entitlement to indemnity benefits was neither raised nor decided in the previous litigation.

In reality, the State Fund concedes the collateral estoppel argument by recognizing that the identical issue raised here — that is, Lund’s entitlement to indemnity benefits — was not litigated in the earlier case. One of the elements required for application of collateral estoppel, of course, is that the issue has been decided in a prior adjudication and is identical to the one presented. Smith v. Schweigert (1990), 241 Mont. 54, 58, 785 P.2d 195, 197. That element not being met here, collateral estoppel is not applicable.

With regard to res judicata, the State Fund asserts that Lund could have pursued his entitlement to indemnity benefits in the prior litigation, but chose not to do so. On that basis, it contends that res judicata applies to prevent another trial on the issue, relying on Martelli v. Anaconda-Deer Lodge County (1993), 258 Mont. 166, 852 P.2d 579; and Beck v. Flathead County (1989), 240 Mont. 128, 783 P.2d 383.

With regard to Martelli, we note that it involved collateral estoppel, not res judicata. In addition, both the workers’ compensation statutes and the facts at issue in that case are distinguishable from those before us here. Beck also is inapposite. In Beck, the defendants failed to litigate an issue during the first appeal, and we concluded that res judicata applied to bar them from arguing it during the second appeal. Beck, 783 P.2d at 386.

On the merits of this argument, we do not disagree with the State Fund about the importance of the basic proposition underlying res judicata — that a party should not be able to relitigate a matter the party has already an opportunity to litigate. See Brault v. Smith (1984), 209 Mont. 21, 25, 679 P.2d 236, 238. Nor do we disagree that Lund had the opportunity to assert entitlement to indemnity benefits in the prior litigation; indeed, the record reflects that he affirmatively chose not to do so. Res judicata is a court-made rule of law, however, the purpose of which is to provide a final resolution of legal controversies. Brault, 679 P.2d at 238. Given the clarity and specificity of the legislative authorization contained in § 39-71-709, MCA (1985), for withdrawal of an election at any time, we conclude that it would be inappropriate to apply the judicial res judicata rule to bar Lund from seeking indemnity benefits as specifically allowed by statute.

We conclude that the Workers’ Compensation Court correctly determined that Lund may withdraw his earlier election to proceed under § 39-71-703, MCA (1985), and proceed pursuant to §§ 39-71-705 through 39-71-708, MCA(1985). Therefore, we hold that the court did not err in granting Lund’s motion for summary judgment.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES HARRISON, HUNT, TRIEWEILER, NELSON and WEBER concur.


author: JUSTICE HARRISON

text:
    IN THE MATTER OF THE ESTATE OF FRED ALCORN, deceased.
    No. 93-308.
    Submitted on Briefs December 2, 1993.
    Decided February 11, 1994.
    51 St.Rep. 87.
    263 Mont. 353.
    868 P.2d 629.

      For Appellant: Donald J. Hamilton and Steven T. Potts, Jardine, Stephenson, Blewett & Weaver, Great Falls.
    For Respondent: Donald L. Ostrem, Graybill, Ostrem & Crotty, Great Falls.
   JUSTICE HARRISON

delivered the Opinion of the Court.

This is an appeal from the Eighth Judicial District Court, Cascade County. Appellant Robert A. Alcorn (Robert), as personal representative of his father’s estate, appeals the District Court’s determination that a common-law marriage existed between respondent Kathee Melinda Young (Kathee) and Fred “Fritz” Alcorn (Fred), the decedent. In this matter of probate, Kathee asserted rights to an elective share of the augmented estate, a homestead allowance, an exempt property allowance and a family allowance. Robert appeals.

Fred and Kathee met on August 27,1981, at Metra Park, a horse racetrack in Billings, Montana. At the time of their meeting, Kathee was separated from her husband, Fred Young (Young). Kathee’s divorce from Young was complete in May 1985. From the day they met in August 1981, Fred and Kathee cohabited until Fred died on May 10,1991. The couple first lived together in Great Falls, but soon moved to Fred’s ranch house in Vaughn, Montana.

Kathee, 46, has been a Delta Airlines flight attendant for seventeen years. Fred, who died at age 59, owned and operated an automobile dealership in Great Falls. The couple shared a common interest in horses and in horse racing. In fact, they jointly owned race horses and regularly attended horse races together. Throughout her relationship with Fred, Kathee retained her last name and filed her tax returns as a single person; however, the couple did share joint bank accounts at First Liberty Credit Union in Great Falls.

During the time Kathee and Fred were together, Fred was plagued with physical ailments — including heart problems, back problems which required surgery, throat cancer which required surgery, and a lung removal which required related surgeries. Fred died of a heart attack on May 10,1991.

In his will, Fred designated his son, Robert, as the personal representative of his estate. On October 1,1991, Kathee filed a Notice of Election Against Will by Surviving Spouse. Kathee contends that she and Fred had a common-law marriage from the day they met until the day Fred died. Robert challenges this assertion.

By will, Fred devised to Kathee one-half of the net value of his ranch and all of his household furniture and household goods. Kathee additionally sought the following entitlements: one third of the augmented estate, pursuant to § 72-2-223, MCA; a homestead allowance of $20,000, pursuant to § 72-2-412, MCA; an exempt property allowance not to exceed $3,500, pursuant to § 72-2-413, MCA; and a family allowance, pursuant to § 72-2-414, MCA.

The District Court conducted a non-jury trial in July and August 1992, and entered its findings of fact, conclusions of law and judgment on February 22,1993. The District Court concluded that Kathee was Fred’s common-law wife and, therefore, granted her the entitlements she sought as Fred’s surviving spouse.

The sole issue before this Court is whether the District Court properly determined that a common-law marriage was established by Kathee Young.

The standard we apply in analyzing a district court’s findings of fact is whether they are clearly erroneous. Steer, Inc. v. Dep’t of Revenue (1990), 245 Mont. 470, 474, 803 P.2d 601, 603; see also Interstate Production Credit v. DeSaye (1991), 250 Mont. 320, 323, 820 P.2d 1285, 1287. When reviewing conclusions of law, we determine whether the court’s interpretation of law is correct. Steer, Inc., 803 P.2d at 603.

Montana recognizes the validity of common-law marriages. Section 40-1-403, MCA. A rebuttable presumption exists in favor of a valid marriage when “[a] man and a woman deporting themselves as husband and wife have entered into a lawful contract of marriage.” Section 26-1-602(30), MCA.

In order to establish the existence of a common law marriage, the party asserting the marriage must show 1) the parties are competent to enter into a marriage; 2) assumption of such a relationship by mutual consent and agreement; and 3) cohabitation and repute.

In re Marriage of Geertz (1988), 232 Mont. 141, 145, 755 P.2d 34, 37 (citation omitted).

Robert argues that Kathee failed to prove that she and Fred were ever married. Robert contends that Kathee was not competent to marry Fred until May 1, 1985, when her divorce with Young was finalized. According to Robert, Kathee failed to introduce evidence that she and Fred agreed to marry one another after her divorce in 1985. Robert asserts that “marriage cannot occur in a piecemeal fashion, but rather comes instantly into being or does not come at all.” Estate of White (1984), 212 Mont. 228, 231, 686 P.2d 915, 916. This Court addressed the same issue in Estate of Murnion (1984), 212 Mont. 107, 686 P.2d 893. In deciding that this concept was not determinative, we stated:

In addition to the consent required for a valid common-law marriage, there must be cohabitation and public repute of the marriage. The latter two factors do not take place instantly, but are continuing factors that extend through the life of the marriage.

Murnion, 686 P.2d at 899 (citing Welch v. All Persons (1926), 78 Mont. 370, 254 P. 179).

The following exchange occurred at the August 17,1992, hearing:

Q. [By Donald Ostrem, Kathee’s attorney] Okay. Now there are several items that you and I have talked about involving common law marriage. Did you feel that you were married to Fritz Alcorn?

A. Yes, I did.

Q. And did you during the entirety of your relationship feel that you were married to Fritz Alcorn?

A. Yes, I did.

Q. Now, did you state that you — when you first started living together, you were in the process of getting a divorce from your previous husband. And you did get that divorce?

A. Yes.

Q. So you also had the capability of consent at the time that you got that divorce is that correct?

A. Yes.

Kathee testified that she and Fred were capable to consent to marriage. She also testified that neither she nor Fred were incompetent or suffering from any disabilities.

We determine, as a matter of law, that Kathee and Fred were incapable of consenting to marriage until Kathee’s divorce with Young became final on May 1,1985. However, persons who cohabit after the removal of the impediment may become lawfully married as of the date of the removal of the impediment. Section 40-1-401(2), MCA; see also Murnion, 686 P.2d at 899; Estate of Schanbacher (1979), 182 Mont. 176, 595 P.2d 1171. Therefore, when Kathee’s divorce to Young became final, the impediment to her common-law marriage to Fred was removed.

Having determined that Kathee and Fred were competent to marry after May 1, 1985, we turn our discussion to whether Kathee and Fred assumed a common-law marriage by mutual consent and agreement. See Geertz, 755 P.2d at 37. In support of her contention that she and Fred mutually consented and agreed to marriage, Kathee claims to have a wedding ring given to her by Fred. The ring, which she wore to the August 17, 1992, hearing, contains two intertwining horseshoes made with Yogo sapphires. According to Kathee, “Fritz had it designed and had it made. And the bracelet — he got a bracelet for me to match.” In addition to the ring and bracelet, Kathee and Fred incorporated the intertwining horseshoe design into their home in Vaughn. The couple had horseshoes cemented into the concrete walkway leading to their house, with their names etched into the concrete beneath the horseshoes.

At the August 17th hearing, the following question was asked: “Did you both agree that you were married, that you were husband and wife?” Kathee responded, ‘Yes, we did.” The combination of Kathee’s wedding ring, the concrete design at the couple’s home in Vaughn, and Kathee’s testimony indicates that Kathee and Fred mutually consented and agreed to a common-law marriage.

We look finally to cohabitation and repute. See Geertz, 755 P.2d at 37. It is clear from the record, and Robert agrees, that Kathee and Fred cohabited for about nine years — from the day they met until the day Fred passed away. They lived together for a short time in Great Falls before moving to Fred’s house in Vaughn. In fact, it is apparent that the couple invested a great deal of time and money in decorating and refurbishing their home. However, as Robert correctly asserts, marriage “does not result from mere cohabitation alone.” Miller v. Townsend Lumber Co. (1968), 152 Mont. 210, 219, 448 P.2d 148, 152 (citation omitted). Therefore, we now turn our attention to repute.

Robert contends that Kathee and Fred admitted in writing that they were not married after May 1,1985. In support of his contention, Robert presented evidence that Kathee: 1) never changed her last name from Young’” to “Alcorn;” 2) did not list Fred as a beneficiary on her employee life insurance, health insurance or retirement forms; and 3) filed her tax returns as a single person throughout her entire relationship with Fred. Moreover, Fred stated in his will that he was a single man.

Kathee testified that she chose to keep the last name Young” for professional reasons. Kathee testified that her mother was listed as beneficiary on her insurance, health and retirement forms. Kathee also testified that she filed her tax returns as a single person because she thought she could not file as “married” unless the marriage was a matter of record and because her accountants “told [her] to file it that way.”

This Court is unaware of any legal requirement that a wife assume the last name of her husband or that she list her husband as beneficiary on her insurance, retirement or health forms. The District Court accepted Kathee’s explanations — including her rationale for filing her tax returns individually rather than as a married person — as valid. The District Court was in the best position to observe Kathee and her demeanor. See Marriage of Ernst (1990), 243 Mont. 114, 122, 793 P.2d 777, 782. We determine that the District Court’s finding as to this issue is not clearly erroneous.

Robert next contends that each witness testified either that Fred and Kathee were not married or that they merely assumed or considered the couple as married. According to Robert, the fact that people assumed or considered the couple as married does not demonstrate that Kathee ever held herself out to be Fred’s wife. See Estate of Slavens (1973), 162 Mont. 123, 126, 509 P.2d 293, 295.

The record, however, is replete with evidence and testimony that Kathee and Fred held themselves out to be husband and wife. Kathee and Fred shared joint checking accounts at First Liberty Credit Union. Kathee wore a wedding ring designed and made especially for her, compliments of Fred. The record indicates that Kathee and Fred spent all of their time — excepting work — together for nine years. Because the couple had a large home, they regularly hosted members from both Fred and Kathee’s families for holidays. Christmas at the Vaughn ranch became a tradition. The couple hosted barbecues and pool parties in the summer for family and friends. Kathee’s family members referred to Fred as “Uncle Fritz.”

Fred spent about eight years of his time with Kathee in poor health. Throughout Fred’s illnesses, Kathee was by his side. The record indicates that Kathee cared for Fred through chemotherapy and through visits to Seattle for treatment.

Robert’s daughter and Fred’s granddaughter, Kara Alcorn, testified that she and her brother, Robert, who live in Washington, would visit Fred and Kathee in Vaughn. Kara testified that she considered Kathee and Fred to be married, that she received Christmas cards from the couple, and that she received information concerning changes in Fred’s medical condition from Kathee.

Robert Layton, Kara’s brother and Fred’s grandson, testified that the relationship between Kathee and Fred was always portrayed to him as that of husband and wife. He further testified that he visited them every summer, that they “always were together” and that he considered them to be married. On occasion, Robert would go to the horse racetrack with Fred, who would introduce Robert as his “grandson” and Kathee as his “wife.”

Judge John McCarvel, a district court judge in Cascade County, was a long-time friend of Fred’s. Judge McCarvel used to see Fred run his horses at racetracks in Spokane, Billings and Great Falls. The Judge testified that he considered Fred and Kathee to be married, that Fred always introduced Kathee as his wife, and that he “thought they were married all the time.” On one occasion, as he left the Great Falls Airport, Kathee was waiting in the truck to pick up Fred. The Judge testified that “[Kathee] hollered to me, Ts my husband on that plane?’ ”

Janice Mountan, Kathee’s sister, testified that “Fritz introduced us as his in-laws.... Everyone knew Fritz as being Kathee’s husband and Kathee as Fritz’s wife.” We need not belabor the record. It is abundantly clear that Kathee and Fred cohabited and held themselves out to the community as being husband and wife.

Robert challenges the District Court’s findings of fact as erroneous and contradicted by the record. Robert contends that the court omitted from its findings references to testimony which indicated that Fred and Kathee were not married. Specifically, Robert points to the testimony of Donna and Chuck Plant — friends of Fred — who stated that Fred had told them after 1985 that he was not married to Kathee. Robert also notes the absence of Robert Emmons’ testimony from the findings. Emmons, an attorney, testified that Fred represented that he was a single man in each of the three wills Emmons drafted for Fred.

It cannot be said that the District Court failed to consider all the testimony merely because it chose not to reference all the testimony it heard in its findings of fact and conclusions of law. The court heard testimony from fifteen witnesses. It found capability of consent to a common-law marriage between Fred and Kathee, mutual assent and agreement to a common-law marriage, cohabitation, and repute in the community as husband and wife.

The court was in the best position to judge the credibility of the witnesses. We will not substitute our judgment for that of the District Court even where there is evidence in the record to support contrary findings. See Trad Industries, Ltd. v. Brogan (1991), 246 Mont. 439, 447, 805 P.2d 54, 59 (citation omitted).

After a careful review of the record, we determine that the District Court’s findings of fact were not clearly erroneous. We hold that the District Court correctly interpreted the law when it concluded 1) that the relationship between Kathee Young and Fred Alcorn constituted a valid common-law marriage; and 2) that Kathee is entitled to claim the elections set forth in her Notice of Election Against the Will filed with the District Court on October 1, 1991.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES GRAY, NELSON and WEBER concur.


text:
    IN RE THE MARRIAGE OF DARCIA L. RAGER, Petitioner and Respondent, and CHRISTOPHER A. RAGER, Respondent and Appellant.
    No. 93-372.
    Submitted on Briefs October 21, 1993.
    Decided February 11, 1994.
    51 St.Rep. 91.
    263 Mont. 361.
    868 P.2d 625.

      For Respondent and Appellant: Michael V. Sinclair, Coil & Sinclair, Bozeman.
    For Petitioner and Respondent: Jerrold L. Nye, Nye & Meyer, Billings.
   JUSTICE HARRISON

delivered the Opinion of the Court.

Appellant Christopher A. Rager (Chris) appeals the Eighteenth Judicial District Court, Gallatin County, order compelling him to pay $252 per month in child support and $100 per month for medical, dental and optical expenses. We affirm.

Chris presents the following issues:

1. Did the District Court abuse its discretion in computing Chris’ child support obligation?

2. Did the District Court err by declaring his daughter’s surname “Worman?”

3. Did the District Court abuse its discretion by ordering Chris to pay Darcia L. Rager’s attorney’s fees and costs?

On April 18, 1991, Darcia Rager (Darcia) filed to dissolve her marriage to Chris, alleging that one child was born of the marriage, Karissa Lynn Jacque Worman (Karissa). Chris, in his response, did not dispute the child’s last name, but he wanted the child’s last name changed to Rager. Chris is Karissa’s natural father.

On October 30, 1992, the attorneys and District Court signed a pretrial order, which resolved all issues except: 1) the amount Chris would pay for child support; 2) who would pay for Karissa’s medical, optical and dental expenses; and 3) the payment of attorney’s fees by either party. The pretrial order stated that the child’s name was Karissa L. J. Rager, instead of Karissa L. J. Worman.

The District Court ordered that discovery be completed by January 15, 1993, and set the trial date for February 19, 1993. Chris moved for a continuance and the District Court denied his motion on February 8, 1993.

Chris failed to appear at the trial on February 19, 1993. He also failed to provide Darcia with discovery before that date. Darcia appeared at the hearing and submitted evidence of her income. She testified that her child’s name was Karissa L. J. Worman. Chris’ attorney argued that the pretrial order established that the child’s last name was Rager. The court acknowledged the pretrial order, but determined that the child’s legal name was Worman — the name which appeared on the child’s birth certificate.

Because Chris failed to appear and did not comply with discovery, the court scheduled a second hearing for April 5, 1993. The court indicated that Chris would pay Darcia’s attorney’s fees and attorney travel expenses for the April 5th hearing.

Chris finally appeared at the April 5, 1993, hearing and gave testimony concerning his income. Chris’ girlfriend and bookkeeper, Judy Adams (Judy), also testified about his income.

After hearing the evidence, the District Court determined that Chris had an earning capacity of $20,000 a-year, while Darcia’s earning capacity was $15,000 a year. The court completed a child support guideline worksheet and ordered Chris to pay $252 per month for child support and $100 per month for Karissa’s medical, dental and optical expenses. The court also ordered Chris to pay Darcia’s attorney’s fees and travel costs of $1,085 for the April 5th hearing. Chris appeals.

Initially, we note that a presumption exists in favor of the district court’s child support computation and we will uphold that computation unless the district court abuses its discretion. In re Marriage of Kukes (1993), 258 Mont. 324, 328, 852 P.2d 655, 657. Further, the court’s factual findings will be affirmed if they are supported by substantial evidence. In re Marriage of Fesolowitz (1993), 258 Mont. 380, 387, 852 P.2d 658, 662.

I

Did the District Court abuse its discretion in computing Chris’ child support obligation?

Chris maintains that the District Court inappropriately included money which Judy had loaned to him in his income calculation. He contends that Judy loaned his business more than $20,000 and that amount explains the $20,000 difference between his cash deposits of $78,000 and his business expenses of $58,000. He argues that § 46.30.1508(2), A.R.M., prohibited the court from considering the financial resources which Judy contributed to his business when it determined his earning capacity. Chris contends that he sustained an $8,000 loss in 1992. Thus, he concludes that he should not pay any child support to Darcia until his income stabilizes. The record, however, negates his argument.

At trial, Chris refused to testify about his income during the first three months of 1993. Further, he would not testify about his business income and expenses for 1992. Even though Chris testified that he made $75 a day in his outfitting business, he never indicated how many days he spent working in the business and, thus, the court could not accurately determine his income from outfitting.

Judy handled the bookkeeping for Chris’ drywall business. Since Chris claimed to have no personal knowledge of the financial records, Judy was the only one who could testify as to his income and expenses. Judy testified about the finances and she also testified that she loaned money to Chris.

The District Court found that Chris could not provide the court with a reasonable calculation of his income or earning potential. In short, the District Court could not accurately determine Chris’income from his or Judy’s testimony. For that reason the court was forced to rely on the exhibits (Chris’financial records) to determine his income. The District Court found that Chris’ business deposits were greater than $78,000, while his business expenses were $58,000. The court then found that “[f]rom his meager records it would seem that [Chris] has $20,000 to live on.”

After a careful review of the record, we conclude that the District Court’s findings are supported by substantial evidence. The court did not abuse its discretion in computing Chris’ child support obligation. We hold that the District Court properly computed his child support obligation.

II

Did the District Court err by declaring his daughter’s surname ‘Worman?”

The pretrial order in this case states that “[t]he child’s surname will remain Rager.” This order was signed by the District Court Judge and both parties’ attorneys. However, it was later discovered that the child’s legal surname was never Rager, but was, in fact, Worman. Based on that fact, the District Court found, contrary to the pretrial order, that the minor child’s surname was Worman.

We recognize that the pretrial order is used to “prevent surprise, [narrow the] issues and permit counsel to prepare for trial on the basis of the pretrial order.” Bache v. Gilden (1992), 252 Mont. 178, 182, 827 P.2d 817, 819. In this case, the child’s name on the birth certificate is Karissa Lynn Jacque Worman. This name is the child’s legal name, and remains so for all purposes unless it is changed by adoption, through a statutory petition for a name change, or by other legal means. See, § 40-8-101 et seq., MCA; § 27-31-101 et seq., MCA; In the Matter of the Change of Name of Iverson (1990), 241 Mont. 140, 786 P.2d 1; In re Marriage of Firman (1980), 187 Mont. 465, 610 P.2d 178. Chris never petitioned for a name change nor requested such a change through other legal means. Therefore, because the pretrial order contained a legal and factual error, the District Court was well within its discretion to modify the pretrial order to that extent.

This holding should not be read as allowing parties to renege on the stipulations and agreements made in a pretrial order. However, when there is a mistake of fact or law contained in the pretrial order, the District Court must be allowed the discretion to correct that error.

III

Did the District Court abuse its discretion by ordering Chris to pay Darcia’s attorney’s fees and costs?

Chris argues that the District Court erred by ordering him to pay Darcia’s attorney’s fees and costs. While the District Court’s findings and conclusions do not indicate the basis for awarding attorney’s fees, we conclude that two statutory provisions support awarding attorney’s fees and costs in this case.

First, § 40-4-110, MCA, requires the district court to consider the “financial resources of both parties” before it orders a party to pay the reasonable costs and attorney’s fees of the other party. In re Marriage of Syljuberget (1988), 234 Mont. 178, 187, 763 P.2d 323, 328. In Syljuberget, we upheld an award of attorney’s fees when the husband’s failure to cooperate caused the wife to incur additional attorney’s fees. 763 P.2d at 328. We concluded that the district court correctly considered the financial resources of both parties. Syljuberget, 763 P.2d at 328.

Similarly, here, Chris failed to appear at the first hearing and caused Darcia to incur additional and unnecessary attorney’s fees. Although the District Court did not specifically find that Chris could afford to pay Darcia’s attorney’s fees and costs, the court did consider the financial resources of both Darcia and Chris. In determining child support, the court found that Chris’ earning capacity was $20,000, while Darcia’s was $15,000. Thus, the court considered the financial resources of the parties before it ordered Chris to pay Darcia’s attorney’s fees and costs.

Second, § 37-61-421, MCA, permits the district court to award attorney’s fees, costs and expenses against “[a]n attorney or party ... who ... multiplies the proceedings in any case unreasonably and vexatiously ....” See Tigart v. Thompson (1990), 244 Mont. 156, 159-60, 796 P.2d 582, 583-85. In the present case, on October 30,1992, the court scheduled the trial date for February 19,1993. On February 4, 1993, Chris moved the court to continue the trial date. The court denied his motion on February 8,1993, stating that “[t]his matter has been set [for trial] since October 30,1992, allowing [Chris] adequate time to adjust his schedule accordingly.”

Thus, Chris knew for four and one-half months that the hearing was scheduled for February 19, 1993, and that he was required to attend the hearing on that date. Despite the District Court’s order denying his motion to continue, Chris failed to appear at the February 19th hearing.

He also refused to provide the court and Darcia with his discovery responses (financial evidence). As a result of Chris’ failure to appear and his failure to provide financial evidence, the court could not render a permanent child support computation. The District Court had to schedule a second hearing for April 5th.

Chris’ conduct not only showed disregard for the court’s proceedings, but his conduct was also unreasonable and vexatious. Further, his conduct multiplied the litigation by necessitating a second hearing.

We hold that the District Court properly considered the parties’ financial resources as required by § 40-4-110, MCA. The court also could have relied on § 37-61-421, MCA, to support its award of attorney’s fees and costs. We uphold the District Court’s determination that Chris pay Darcia’s attorney’s fees and costs.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES TRIEWEILER, NELSON and WEBER concur.


author: JUSTICE TRIEWEILER

text:
    HAMILTON G. KENNER, and ERNO, INC., Plaintiffs and Appellants, v. LARRY W. MORAN, Trustee, Defendant and Respondent.
    No. 93-374.
    Submitted on Briefs November 23, 1993.
    Decided February 11, 1994.
    51 St.Rep. 94.
    263 Mont. 368.
    868 P.2d 620.

      For Appellants: Hamilton G. Kenner, Pro Se, Cameron.
    For Defendant and Respondent: Michael P. Sand, Sand Law Office, Bozeman.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

Hamilton G. Kenner filed a complaint in the District Court for the Fifth Judicial District in Madison County to set aside a default judgment entered against him in a quiet title action initiated by Larry W. Moran against Kenner and others. At the time of the hearing on Kenner’s complaint to set aside the default judgment, Moran filed a counterclaim in which he sought specific performance of the parties’ contract for deed. The court denied Kenner’s request to set aside the default judgment and granted summary judgment in favor of Moran on the counterclaim. Kenner appeals the orders and judgment of the District Court.

We reverse.

The issues on appeal are restated as follows:

1. Did the District Court abuse its discretion when it refused to set aside the default judgment based upon its finding that Kenner had received adequate notice prior to entry of the decree?

2. Did the District Court err when it granted summary judgment in Moran’s favor and ordered specific performance of the contract for deed?

In 1980, trustee Larry W. Moran, as seller, entered into a contract for deed with Hamilton G. Kenner and Central States Investment Company (CSI) for the sale and purchase of 1938 acres of real property located south of Ennis, adjacent to the Madison River. After Kenner and CSI failed to make the November 1, 1984, annual payment, Moran and Kenner negotiated a modification agreement which permitted Kenner to cure the default and changed the annual due date.

In June 1985, Kenner requested a release of280 acres of river-front property in consideration for payments already made on the contract. Based on Kenner’s alleged representations that all property taxes and BLM lease payments were current on these parcels, and that all future contract payments would be timely, Moran quitclaimed this property to Kenner on July 2, 1985. Moran alleges that Kenner defaulted on those contract payments and has remained in default since that time.

On September 2,1986, Moran filed a complaint to quiet title to all the property subject to the purchase agreement, including the parcels which had been quitclaimed to Kenner. He alleged he had been induced to quitclaim that parcel based on Kenner’s misrepresentation that the taxes and lease payments were current. In addition to Kenner and CSI, eight other persons or entities who claimed an interest in the property were named as defendants.

On December 8, 1986, and January 23,1987, Kenner appeared in the quiet title action by filing motions to dismiss. These motions were denied on May 5, 1987, because no supporting briefs were filed, and Kenner was given 20 days in which to further plead.

On June 15, 1987, Moran wrote to Kenner’s attorney, Larry Jent, proposing an agreement which would allow Kenner to reinstate the contract by bringing all payments up to date, and offering a settlement of the quiet title litigation. On July 13, 1987, Jent notified Moran that Kenner would accept the terms of the settlement proposal if Moran would quiet title against the other defendants.

A quiet title decree was entered against all defendants except Kenner on August 4, 1987. Moran then informed Jent that he was prepared to proceed with the settlement agreement. However, he received no response. On several occasions thereafter, Moran notified Jent that the quiet title action would proceed against Kenner if the terms of the settlement agreement were not fulfilled as agreed upon by Kenner and if no response was received. Moran received no response to these communications.

On February 9, 1990, Moran moved the clerk of court for entry of default against Kenner due to his “failure to plead or otherwise defend” in the quiet title action for nearly three years. On that same date, he moved the court to enter a judgment against Kenner on the basis that the time to answer the summons and complaint had expired and Kenner had “not answered or plead herein.” However, Moran did not first notify Jent or Kenner of his intention to apply for the default or the default judgment.

The clerk entered Kenner’s default on February 9, and the court entered a default judgment on February 20, 1990, in which Moran’s title to the entire parcel under the contract for deed, including the parcels quitclaimed to Kenner, was quieted. However, no notice of entry of judgment was served on Kenner or Jent.

In July 1991, Kenner attempted to sell one of the quitclaimed properties. He discovered that a judgment had been entered against him when a title insurance company refused to issue a policy.

On September 23,1992, Kenner and ERNO, Inc., the successor in interest to the disputed properties, filed an independent action pursuant to Rule 60(b), M.R.Civ.R, to set aside the default judgment on two grounds. Kenner alleged that he had neither been notified of the application for a default judgment, nor of the entry of judgment, and furthermore, that the decree had been obtained on the basis of fraud upon the court.

Kenner moved for summary judgment and a hearing was held on February 9,1993. At the time of the hearing, Kenner was served with a counterclaim by Moran seeking specific performance of the contract for deed. Moran’s attorney then requested the court to enter summary judgment on the counterclaim in favor of Moran. He acknowledged that no motion for summary judgment had been filed, but asserted that no motion was required because Kenner had already sought judgment in his favor. After the hearing, Kenner filed an answer to the counterclaim in which he set forth six affirmative defenses.

The court issued its findings and order on May 7,1993. The court found that Kenner had made two appearances in the quiet title action by virtue of his motions to dismiss. Therefore, pursuant to § 25-3-401, MCA, Kenner or his attorney were entitled to notice of all subsequent proceedings “of which notice is required to be given.” The court found that notice had not been provided as required under Rule 55(b)(2), M.R.Civ.R However, the court noted that a default judgment entered without notice is voidable and the lack of notice should be considered in light of surrounding circumstances. The court found that Kenner had been “clearly and consistently forewarned that Moran intended to proceed with his quiet title action against Kenner soon.” Moreover, the court found no “good cause” to set aside the decree because Kenner offered no excuse for his failure to answer and was not an “unsuspecting and unaware” defendant. Therefore, the court concluded that the lack of notice did not require setting aside the decree because Kenner had “adequate actual personal notice prior to the entry of default.”

The court further concluded that there had been no commission of extrinsic fraud or fraud upon the court to justify setting aside the decree.

In its judgment entered on May 24,1993, the court denied Kenner’s motion for summary judgment and refused to set aside the quiet title decree entered by default. It granted summary judgment on Moran’s counterclaim, and ordered Kenner to specifically perform the settlement agreement entered into with Moran on July 13,1987. From this judgment, Kenner appeals.

ISSUE 1

Did the District Court abuse its discretion when it refused to set aside the default judgment based upon its finding that Kenner had received adequate notice prior to entry of the decree?

Rule 55(c), M.R.Civ.R, allows for the setting aside of an entry of default when there is good cause and “if a judgment by default has been entered, [the court] may likewise set it aside in accordance with Rule 60(b).”

Rule 60(b), M.R.Civ.R, sets forth reasons entitling a party to relief from a final judgment or order when a timely objection is made. In addition, the rule contains the following residual clause:

This rule does not limit the power of a court to entertain an independent action to relieve a party from a judgment, order, or proceeding, or to grant relief to a defendant not actually personally notified as may be required by law, or to set aside a judgment for fraud upon the court. [Emphasis added].

Kenner’s action to set aside the default judgment was filed pursuant to this residual clause. Although Kenner asserts that grounds exist to set aside the judgment on the basis of extrinsic fraud and fraud upon the court, Kenner’s primary contention is that he is entitled to relief because he was not personally served with notice as required by law.

Kenner directs this Court’s attention to Rule 55(b)(2), M.R.Civ.P., which provides that:

If the party against whom judgment by default is sought has appeared in the action, the party (or, if appearing by representative, the party’s representative) shall be served with written notice of the application for judgment at least 3 days prior to the hearing on such application.

It is undisputed that Kenner “appeared” in the quiet title action when he filed motions to dismiss, and that Moran did not serve written notice of the application for default judgment on Kenner or his attorney prior to the hearing on Moran’s application. On this basis, Kenner contends that he is entitled to have the judgment set aside because he was not “actually personally notified” as required by law.

In support of this contention, Kenner relies on our holding in Big Spring v. Blackfeet Tribe (1978), 175 Mont. 258, 573 P.2d 655, where we made clear that if a party appears by filing a motion, he is entitled to notice of all subsequent proceedings. Kenner asserts that it was an abuse of discretion for the court to deny his summary judgment motion when the facts clearly demonstrate that he was entitled to written notice of the application for a default judgment.

Where a trial court fails to grant a motion to set aside a default judgment, the finding of even a slight abuse of discretion is sufficient to justify reversal of such an order. In re Marriage of McDonald (1993), 863 P.2d 401, 50 St. Rep. 1411; Empire Lath v. American Casualty (1993), 256 Mont. 413, 847 P.2d 276.

This Court has stated on several occasions that the failure to provide notice to the defaulting party as required under Rule 55(b)(2), M.R.Civ.P., renders a default judgment premature and voidable. Marriage of Neneman (1985), 217 Mont. 155, 159, 703 P.2d 164, 167.

In this instance, the District Court conceded that Kenner had appeared in the quiet title action and was entitled to actual written notice as required under Rule 55(b)(2), M.R.Civ.P. However, it concluded that Moran had communicated to Kenner and his attorney “adequate personal notice” of his intent to pursue the litigation, and therefore, failure to comply with the notice requirements did not require setting aside the decree.

After reviewing the record and considering the surrounding circumstances, we conclude that Moran’s informal threats to proceed with his case were not the equivalent of notice that he would apply for a default judgment and notice of a date on which Kenner could appear and object to the entry of a judgment by default. This failure to notify of the application for default was compounded by Moran’s failure to notify Kenner pursuant to Rule 77(d), M.R.Civ.P., that judgment had in fact been entered. On that basis, this case is distinguishable from our prior decisions in Williams v. Superior Homes, Inc. (1966), 148 Mont. 38, 417 P.2d 92, and Sikorski & Sons v. Sikorski (1973), 162 Mont. 442, 512 P.2d 1147, where we declined to set aside default judgments for lack of notice. In this instance, we conclude that the court abused its discretion when it refused to set aside the decree.

We do not condone Kenner’s own disregard for the procedural rules that he was required to follow in the quiet title action. However, Rule 55(b)(2), M.R.Civ.P., presumes that the defaulting party has not complied with the rules in some respect and still requires that notice be given to that party. Moran’s noncompliance with our rules cannot be justified on the basis of Kenner’s earlier noncompliance with those rules.

Taking all of the facts into consideration, we conclude that the circumstances of this case justify setting aside the default judgment.

ISSUE 2

Did the District Court err when it granted summary judgment in Moran’s favor and ordered specific performance of the contract for deed?

This Court reviews an order of summary judgment by utilizing the same criteria used by a District Court initially under Rule 56, M.R.Civ.R Minnie v. City of Roundup (1993), 257 Mont. 429, 849 P.2d 212. Summary judgment is properwhenno genuine issues ofmaterial fact exist and the moving party is entitled to judgment as a matter of law. Minnie, 849 P.2d at 214.

At the time of the hearing on Kenner’s summary judgment motion to set aside the decree, Moran filed a counterclaim seeking specific performance of the settlement agreement that had been entered into after default was taken against the other defendants. Although no summary judgment motion was made on the counterclaim in accordance with Rule 56, M.R.Civ.P., the court, in its order, granted summary judgment in favor of Moran on the counterclaim. Moran contends that no separate motion was required and that the court had authority to render summary judgment on the counterclaim based on this Court’s decision in Canal Insurance Company v. Bunday (1991), 249 Mont. 100, 813 P.2d 974.

In Canal, 813 P.2d at 979, we held that this Court could reverse a district court’s order granting summary judgment and order it to enter summary judgment in favor of the other party when there are no issues of material fact and all of the facts bearing on the issues are before the court. In such a situation, a court could determine that the undisputed facts entitle the non-moving party to summary judgment.

The situation presented here, however, is not comparable to Canal. Here, Kenner moved for summary judgment based on his complaint to set aside the default judgment. Moran filed a counterclaim seeking specific performance of a settlement agreement. The court heard testimony to determine whether there were grounds to set aside the judgment. The evidence did not relate to whether the settlement agreement was enforceable or whether Moran was entitled to equitable relief in the form of specific performance. The facts and issues pertinent to the counterclaim are not the same as those pertinent to the issue of setting aside the default judgment. The transcript reveals that Kenner did not offer testimony on the issues germane to Moran’s counterclaim and the court did not address the affirmative defenses raised by Kenner after the hearing.

Under Rule 56(a), M.R.Civ.R, a claimant is allowed to move for summary judgment twenty days after the action is commenced. Rule 56(c), M.R.Civ.R, requires service of written notice upon the adverse party ten days before the time fixed for hearing on the motion. These procedural safeguards insure that an adverse party is given a full and fair opportunity to resist a summary judgment motion and demonstrate the presence of justiciable issues of fact.

We conclude that the facts bearing on issues raised in the counterclaim were not before the court and that Kenner was not given the proper opportunity to offer evidence in opposition to Moran’s request for summary judgment. Therefore, we hold that the court erred when it granted summary judgment on the counterclaim in the absence of a motion complying with Rule 56, M.R.Civ.R

The judgment of the District Court is reversed and vacated. The default judgment entered against Kenner in the quiet title action is set aside.

CHIEF JUSTICE TURNAGE, JUSTICES HARRISON, GRAY, HUNT, NELSON and WEBER concur.


text:
    IN RE THE MARRIAGE OF WILLIAM RICHARD CARAS, Petitioner, Respondent, and Cross-Appellant, and LAURI CHRISTINE CARAS, Respondent, Appellant, and Cross-Respondent.
    No. 93-424.
    Submitted on Briefs December 22, 1993.
    Decided February 11, 1994.
    51 St.Rep. 98.
    263 Mont. 377.
    868 P.2d 615.

      For Appellant: Noel K. Larrivee, Larrivee Law Offices, and Richard Ranney, Williams & Ranney, Missoula.
    For Respondent: Richard A. Reep, Reep, Spoon & Gordon, Missoula.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

In In re Marriage of Caras (1992), 254 Mont. 169, 835 P.2d 715 (Caras I), we vacated that portion of the parties’ dissolution decree which incorporated a marital and property settlement agreement and remanded with instructions that the District Court make findings regarding the conscionability of the agreement. The District Court for the Fourth Judicial District in Missoula County found that the agreement was conscionable. Lauri now appeals the findings, conclusions, and order of the District Court regarding that agreement. Bill cross-appeals the District Court’s order regarding attorney fees and costs. We affirm in part and reverse in part.

The parties have raised the following issues:

1. Did the District Corut err when it concluded that the marital and property settlement agreement was conscionable?

2. Did the District Corut abuse its discretion when it failed to grant a continuance to allow further investigation of the marital estate?

3. Did the District Court abuse its discretion when it failed to rule on motions filed during trial?

4. Did the District Court err when it ordered each party to pay his and her own attorney fees and costs?

William Richard Caras and Lauri Christine Caras signed a property and marital settlement agreement in August 1990 which was later incorporated in their petition for legal separation. The District Court granted their separation and approved their settlement agreement on October 11, 1990.

On May 21, 1991, the District Court granted Bill’s motion to convert the legal separation to a final decree of dissolution. Lauri was successful in her effort to have that decree set aside. However, she did not respond when Bill filed a motion to convert the decree of legal separation to a final decree of dissolution for a second time. On November 22, 1991, the District Court entered the final dissolution decree which incorporated the parties’ marital and property settlement agreement from August 1990. Lauri appealed with new counsel of record and we remanded to the District Court.

After this Court’s decision and denial of Bill’s petition for rehearing Caras I on August 25, 1992, the parties began a course of written discovery which included the exchange of interrogatories and Bill’s deposition. On January 25,1993, the District Court, at Bill’s request, set the matter for a nonjury hearing on its March calendar. Three days before trial, Lauri moved the District Court to continue the trial based on a delay in transcribing Bill’s deposition and the need for further information from Bill regarding his real estate holdings. The District Court denied Lauri’s motion and the trial was held on March 11 and 25, 1993.

At trial, the attorney who had represented Lauri in the preparation of the marital and property settlement agreement was called by Bill to testify regarding his role as Lauri’s attorney at the beginning of the dissolution. The only other witnesses who were called to testify were Lauri and Bill.

During the court’s recess, Lauri moved the District Court to compel Bill to provide more complete information regarding certain investment property. In response to this motion, Bill filed a motion to protect him from further discovery pursuant to Rule 26(c), M.R.Civ.R The District Court did not rule on these motions and the trial proceeded to its conclusion.

The District Court issued its findings of fact, conclusions of law, and order on May 19, 1993, in which it held that the marital and property settlement agreement executed on August 17,1990, was not unconscionable and should be adopted by the court and incorporated in the final decree of dissolution.

ISSUE 1

Did the District Court err when it concluded that the marital and property settlement agreement was conscionable?

When it determines the conscionability of a marital and property settlement agreement, a district court

engage[s] in discretionary action which cannot be accurately categorized as either a finding of fact or a conclusion of law. These discretionary judgments made by the trial court are presumed to be correct and will not be disturbed by this Court absent an abuse of discretion by the lower court.

In re Marriage of Hamilton (1992), 254 Mont. 31, 36, 835 P.2d 702, 704-05 (quoting In re Marriage of Danelson (1992), 253 Mont. 310, 317, 833 P.2d 215, 220).

Bill contends that where the parties have agreed to a property distribution pursuant to a separation agreement, the controlling statute is § 40-4-201(2), MCA, and not, as Lauri suggests, the “equitable apportionment” statute at § 40-4-202, MCA. Section 40-4-201(2), MCA, provides that:

In a proceeding for dissolution of marriage or for legal separation, the terms of the separation agreement, except those providing for the support, custody, and visitation of children, are binding upon the court unless it finds, after considering the economic circumstances of the parties and any other relevant evidence produced by the parties ... that the separation agreement is unconscionable. [Emphasis added].

Lauri asserts that she is not advocating a strict application of § 40-4-202, MCA; she advocates its application only to the extent that its various factors would aid the court in making a determination of conscionability. In particular, she argues that without determining the net value of the marital estate, it was impossible for the District Court to make a finding of conscionability. She argues that the District Court failed to find a specific value for the marital estate and merely “outlined” the testimony of three witnesses who gave three different valuations.

In Caras I, Lauri successfully persuaded this Court that her misunderstanding of the final nature of the separation agreement, her hope of reconciliation of the marriage, and the length of time between the execution of the agreement and its incorporation in a decree of dissolution suggested that the agreement may have been unconscionable. Caras I, 835 P.2d at 716-17. However, the language in that opinion should not be construed to mean that a district court commits reversible error by failing to make findings pursuant to § 40-4-202, MCA, when it has before it a separation agreement which distributes marital property. To the extent that language in that decision suggests a contrary conclusion, it is overruled. The factors set forth in § 40-4-202, MCA, must be considered by the district court when dividing the marital estate absent a marital and property settlement agreement between the parties. See In re Marriage of Sirucek (1985), 219 Mont. 334, 341-42, 712 P.2d 769, 773.

Where the parties have reached a separation agreement, a determination of net worth of the marital estate is not required. In re Marriage of Miller (1980), 189 Mont. 356, 616 P.2d 313; see also, In re Marriage of Evert (1982), 198 Mont. 191, 645 P.2d 417. In Miller, we stated that:

[T]he net worth of the parties is a necessary consideration; however, if there is a signed and executed separation agreement, we must conclude that the parties themselves have already made a determination of their net worth as a basis for their decision.

Miller, 616 P.2d at 318. “[W]e will not substitute our conclusions for those of the District Court in the absence of clear and reversible error.” Miller 616 P.2d at 318.

At trial, the District Court received various estimates of the net value of the Caras estate. Lauri’s first attorney valued the marital estate at $530,000. Bill offered an exhibit valuing the estate as of August 1990 at $290,508. Lauri’s estimate of the estate as of August 1990 was $939,502. A financial statement signed by Bill in October 1991, which was introduced by both parties, indicated that Bill’s net worth was $1,075,200. Bill introduced testimony that this amount had been overstated.

Apparently, there were no professional appraisals conducted on any component of the marital estate. Presented with these various opinions, the District Court concluded that the parties’ agreement,

when taken in its entirety, including the distribution of property, the payment of maintenance in lieu of property, the waiver of obligations for child support and medical care, the associated provisions for support of both [Lauri] and the parties’ children, and after considering the economic circumstances of the parties at the time of execution of the parties’ marital and property settlement agreement, as well as their current circumstances, is not unconscionable and should be adopted by this court.

After a review of the record, we conclude that the District Court’s findings in support of its decision are supported by substantial evidence, are not clearly erroneous, and that the District Court did not abuse its discretion when it held that the parties’ marital and property settlement agreement was conscionable.

ISSUE 2

Did the District Court abuse its discretion when it failed to grant a continuance to allow further investigation of the marital estate?

We will review a district court’s decision to grant or deny a motion for a continuance for abuse of discretion.

[A]ny motion for a continuance of trial is within the sound discretion of the District Court... [and we] will not overrule a District Court’s decision to deny a motion for a continuance of trial unless there is “an affirmative showing that the complaining party has suffered prejudice.”

Tri-County Plumbing & Heating, Inc. v. Levee Restorations (1986), 221 Mont. 403, 408, 720 P.2d 247, 250.

Lauri further argues that Bill’s failure to disclose the existence and value of property he held in JKW Investments, a partnership with his brother and sister, contributed to the court’s failure to accurately determine the value of the marital estate. At trial, Lauri’s counsel requested a continuance to allow time to transcribe Bill’s deposition taken February 22, 1993, and to allow Lauri additional time to investigate JKW property. However, the District Court denied the continuance and noted that Bill’s deposition had not been scheduled until the trial had been placed on the calendar, that more than eight months had passed since remand, and that if the case were continued, it could not be rescheduled for another six months.

Bill asserts that in his answers to Lauri’s interrogatories dated October 23, 1992, he identified JKW Investments as a partnership. Lauri’s former attorney testified that the parties had indicated that there was full and accurate disclosure of all the marital assets at the time the settlement agreement was signed. Additionally, we note Lauri’s testimony that during the marriage she had knowledge of the partnership’s existence.

In support of her argument that the District Court abused its discretion when it denied a continuance, Lauri cites our prior decision in In re Marriage of Hill (1982), 197 Mont. 451, 643 P.2d 582, where this Court allowed the wife to pursue examination of a disputed piece of property since it had reversed and remanded the case for further proceedings to reconsider the marital estate assets. However, reference to Hill merely underscores the “second chance” this Court gave Lauri in Caras I.

Section 25-4-501, MCA, states that “[a] motion to postpone a trial on grounds of the absence of evidence shall only be made upon affidavit showing the materiality of the evidence expected to be obtained and that due diligence has been used to procure it.” Lauri did not file any affidavit or brief when she requested the continuance. Nor has Lauri asserted how she was prejudiced by the failure of the court to continue the trial.

It is not an abuse of discretion for a district court to deny postponing a trial where no affidavit has been filed as required by § 25-4-501, MCA. In re T.M.M. (1988), 234 Mont. 283, 289, 762 P.2d 866, 869-70; State v. Pascgo (1977), 173 Mont. 121, 566 P.2d 802. We conclude that Lauri had ample opportunity to formally pursue discovery or to undertake her own independent investigation of the extent of and value of property held by Bill and JKW Investments and that the District Court did not abuse its discretion when it denied her motion to postpone the trial.

ISSUE 3

Did the District Court abuse its discretion when it failed to rule on motions filed during trial?

Our standard of review from orders granting or denying discovery and imposing sanctions for failure to comply with discovery rules is abuse of discretion. “The District Court has inherent discretionary power to control discovery and that power is based upon the District Court’s authority to control trial administration.” State ex rel. Guarantee Insurance Co. v. District Court of the Eighth Judicial Dist. (1981), 194 Mont. 64, 67, 68, 634 P.2d 648, 650. See also, Marriage of Jacobson (1987), 228 Mont. 458, 743 P.2d 1025; Massaro v. Dunham (1979), 184 Mont. 400, 603 P.2d 249.

After the trial commenced, Lauri’s counsel filed a motion to compel Bill to list all JKW Investment properties, their value, and indebtedness; a motion for the District Court to reconsider sanctions; and a motion for determination of attorney fees. Bill’s counsel filed a motion for a protective order in response to Lauri’s motion to compel. The District Court did not rule on any of these motions. Therefore, they are deemed denied.

In this case, Lauri had eight months from the date of remand to the date of trial. Yet, her discovery-related motions were not filed until after trial began. She explains that because discovery was completed so close to trial that her motions were timely. However, parties have an obligation to complete discovery far enough in advance of trial that discovery issues can be resolved by the district court before trial begins. Where they have not done so, and absent aggravating circumstances (which are not shown in this case) we will not find an abuse of discretion from the district court’s failure to consider discovery related motions after trial has begun.

The District Court’s denial of Lauri’s motions is affirmed.

ISSUE 4

Did the District Court err when it ordered each party to pay his and her own attorney fees and costs?

Bill argues that the language of the marital and property settlement agreement forecloses the District Court’s exercise of discretion on this issue and that, as the prevailing party, he is entitled to reasonable attorney fees and costs. The agreement provided that, “[s]hould any action be commenced to enforce, modify or interpret any provision contained herein, the court, as a cost of suit, shall award a reasonable attorney’s fee to the successful party.” The District Court found that “[e]ach party should bear their [sic] own costs and attorney’s fees in this matter as the waters were so muddy that further court action was necessary to examine the conscionability of the agreement.”

Generally, it is within the district court’s discretion to award attorney fees. Such awards are subject to an abuse of discretion standard of review. In re Marriage of Burris (1993), 258 Mont. 265, 272, 852 P.2d 616, 620. Here, however, the language of the marital and property settlement agreement is clear, and the District Court, having found it to be conscionable, is bound by its terms. Lauri’s appeal to the Supreme Court was an “action to enforce, modify, or interpret” the agreement. We, therefore, reverse the District Court’s conclusion that each party should bear his and her own costs and remand for a determination of reasonable attorney fees to be awarded Bill.

The judgment of the District Court is affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion.

CHIEF JUSTICE TURNAGE, JUSTICES HARRISON, GRAY, HUNT, NELSON and WEBER concur.