author: JUSTICE TRIEWEILER CHIEF JUSTICE TURNAGE

text:
    IN RE THE MARRIAGE OF D.F.D., Petitioner and Respondent, and D.G.D., Respondent and Appellant.
    No. 92-565.
    Submitted on Briefs August 10, 1993.
    Decided October 21, 1993.
    50 St.Rep. 1280.
    261 Mont. 186.
    862 P.2d 368.

      For Respondent and Appellant: Antonia P. Marra, Bell & Marra, Great Falls.
    For Petitioner and Respondent: Don A. LaBar, Church, Harris, Johnson & Williams, Great Falls.
    Guardian Ad Litem: Darcy Crum, James, Gray & McCafferty, Great Falls.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

The petitioner and wife, D.F.D., petitioned the District Court of the Eighth Judicial District in Cascade County for dissolution of her marriage to her husband, D.G.D., on May 29, 1991. On August 14, 1992, following numerous hearings and a trial on all issues, the District Court entered its decree dissolving the couple’s marriage, awarding sole custody of their only child to the wife, restricting husband’s visitation rights, and ordering that husband pay child support and maintenance. Husband appeals from the judgment of the District Court. We reverse and remand for further proceedings.

The issues are:

1. Did the District Court err when it awarded sole custody of the couple’s son to the wife and restricted husband to supervised visitation?

2. Did the District Court err when it ordered the husband to pay maintenance to the wife in the amount of $150 per month for two years?

3. Did the District Court err in its calculation of child support and in its award of day care expenses?

FACTUAL BACKGROUND

D.F.D (wife) and D.G.D. (husband) were married on June 18,1988, and separated on May 23,1991. They had one son, J.E.D., born during their marriage on April 30,1990.

In her petition, the wife requested dissolution of the couple’s marriage, division of their property, sole custody of their minor son, reasonable support, maintenance, and attorney fees. In his responsive pleading, the husband joined in her request for dissolution of their marriage, but asked that the court award joint custody of their son, and that he receive primary physical custody. He also objected to the wife’s request for maintenance.

After the couple’s separation, the husband filed a motion with the District Court on June 21,1991, for temporary custody of the couple’s child. He alleged that his wife had moved with their son to Lincoln, Montana, and would not allow reasonable visitation. The wife responded with her own motion for temporary custody. Although she offered no affidavit or other evidence in support of her motion, her attorney alleged in his written argument that the husband had, in the past, cross-dressed or worn women’s undergarments. The wife’s attorney alleged that this conduct was a form of sexual deviation which would be harmful to the couple’s son if he was exposed to it.

On August 1,1991, the District Court held a hearing to resolve the conflicting claims to temporary custody of the couple’s son. As a result of that hearing, the District Court issued an order on October 30, 1991, granting the wife’s motion and denying the husband’s motion. The court also ordered psychological evaluations of both parents and granted visitation rights to the husband, but limited them to Saturdays and Sundays, and then only during the daytime. By then, the wife had moved to Missoula and the husband was living in Great Falls. The District Court ordered that the husband could bring his son to Great Falls for visitation, so long as he was back in Missoula by that evening. Overnight visitation was denied.

Pursuant to suggestions of the court, further evaluations of the husband were performed, additional consultations regarding the possible detriment to the couple’s son from the father’s former behavior were obtained, and an additional pretrial hearing regarding custody and visitation was held. However, the court-ordered arrangements for custody and visitation were maintained until the court’s final decree was entered.

This case was tried before the District Court on April 22,1992, and May 13, 1992. On August 14, 1992, the District Court entered the findings of fact, conclusions of law, and decree from which the husband now appeals.

In findings which are not disputed on appeal, the District Court found that at the time of trial the wife was 31 years old, and had a high school education with additional training from Kinman Business School. At the time of trial, she was employed as a word processor at the University of Montana with a yearly gross income of $14,500 from her employment, and net income (including $300 per month temporary child support) equal to $1212 per month. The District Court found that her monthly living expenses were $1581.80, leaving a net deficit of $369.80.

The District Court found that the husband was 34 years old, had a degree in engineering from Montana State University, and was employed as an engineer. His annual gross income was $29,000. However, his net income was $1882.09 per month, and his monthly living expenses were found to be $988.50. The District Court’s finding regarding the husband’s living expenses did not include monthly payments for attorney fees, travel to and from Missoula to exercise visitation, payments for expert witness fees and counseling, nor any allowance for housing since at the time of trial he was living with his mother in order to meet his other expenses.

Findings of Fact No. 14,15, and 16 are vigorously contested by the husband on appeal. In Finding No. 14, the District Court found that he was an admitted transvestite and that if exposed to such conduct, his son would be irreparably harmed. The court found that transvestism was compulsive and secretive and that the couple’s son could not be protected during unsupervised visitation with his father. The court found that a transvestite father cannot be entrusted with such a tender young child.

In Finding No. 15, the District Court found that the mental health of the couple’s son was potentially at risk if his father deliberately or inadvertently cross-dressed in front of the child, because the child would face irreparable sexual misidentification if he saw his father as both a man and a woman. The District Court found that there was a need to protect this two-year-old from irreparable damage.

In Finding No. 16, the court found that while the wife was a fit and proper person to have custody, there was potential for harm to the son if her husband inadvertently, casually, or carelessly exhibited deviate sexual behavior in the presence of the son.

As a result of these findings, the District Court awarded sole custody to the wife, and allowed visitation for the husband during two weekends per month. Visitation was allowed for one hour on Friday nights, and from 8 a.m. to 9 p.m. on Saturdays and Sundays. However, the District Court ordered that visitation had to be supervised, and in its original decree provided that supervision would be handled by the wife. The husband was to travel to Missoula on the first weekend of each month, and the wife was to travel to Great Falls on the third weekend of each month, to accommodate visitation. However, the husband was to reimburse her for gasoline expense for trips to Great Falls.

The husband was ordered to pay $49.08 per month as his proportionate share for providing insurance coverage for the couple’s son, 50 percent of any uninsured medical expenses, $300 a month for child support, and $250 a month for temporaiy maintenance. He was also ordered to pay 65 percent of the expense already incurred for child care, and was ordered to pay 65 percent of future child care costs. Each of the parties was ordered to pay his and her own attorney fees.

Both parties moved to alter or amend the District Court’s judgment. The wife wanted to change the horns of visitation, and the husband objected to maintenance, the amount ordered for child support and child care, and the District Court’s findings regarding child custody and visitation. As a result of the parties’ post-trial motions, maintenance was reduced to $150 per month, and the court allowed visitation to be supervised by either the wife or an adult “non-transvestite member” of the husband’s family. Otherwise, the court’s original decree was unchanged.

I

Did the District Court err when it awarded sole custody of the couple’s son to the wife and restricted husband to supervised visitation?

When we review a district court’s findings which pertain to issues of child custody and visitation, those findings will be sustained unless they are clearly erroneous. In re Marriage of Susen (1990), 242 Mont. 10, 13-14, 788 P.2d 332, 334. Findings which are not supported by substantial credible evidence are clearly erroneous. Interstate Production Credit Association v. DeSaye (1991), 250 Mont. 320, 323, 820 P.2d 1285, 1287. If the district court’s findings upon which it bases its award of custody and visitation are not clearly erroneous, the trial court’s decision will he upheld -unless there is a clear showing of an abuse of discretion. In re Marriage of Reininghaus (1991), 250 Mont. 86, 817 P.2d 1159. However, the district court’s discretion must be consistent with the statutory framework for child custody. In that regard, we must consider § 40-4-212(1), MCA, which provides that “[t]he court shall determine custody in accordance with the best interest of the child,” and § 40-4-224(1), MCA, which provides that:

Upon application of either parent or both parents for joint custody, the court shall presume joint custody is in the best interest of a minor child unless the court finds, under the factors set forth in 40-4-212, that joint custody is not in the best interest of the minor child. If the court declines to enter an order awarding joint custody, the court shall state in its decision the reasons for denial of an award of joint custody. Objection to joint custody by a parent seeking sole custody is not a sufficient basis for a finding that joint custody is not in the best interest of a child, nor is a finding that the parents are hostile to each other.

It is clear, in this case, that the District Court based its denial of joint custody on its Findings of Fact No. 14, 15, and 16 where it found, among other things, that the husband was a transvestite, his behavior was compulsive, he could not be trusted with his son, and that if exposed to cross-dressing it would be irreparably harmful to his son. If, as argued by the husband, these findings are unsupported by any evidence, then the District Court’s denial of joint custody and severe restrictions on the husband’s rights to visitation were an abuse of discretion.

After a thorough review of the complete record in this case, we conclude that there was no credible evidence to support the District Court’s findings which formed the basis for its denial of joint custody. However, because of the significant interests at stake for the husband, the wife, and the child in this case, we offer the following lengthy review of the evidence which leads us to that conclusion.

At the hearing held on August 1, 1991, to determine temporary custody of this couple’s son, both parents testified. Also called as witnesses were Rich Kuka, a professional counselor, and the husband’s mother and brother-in-law. Kuka testified that he originally counseled the husband because of problems with his marital relationship, but that during the course of the counseling they had also discussed the husband’s prior history of cross-dressing. As part of his evaluation of the husband, Kuka administered a battery of psychological tests, including a parenting evaluation. On the basis of those tests, his interviews, and the counseling he had done with the husband, Kuka testified that he had no concern about the husband’s ability as a parent being affected by his interest in cross-dressing because it had, in the past, been a very private matter and he did not believe that the husband would ever purposely expose his son to that behavior. During the course of his testimony, the following exchange occurred with the District Court:

THE COURT: Before you start, just tell me more about the cross-dressing. What significance does that have, if any, to this whole situation? Does that cause any problems at all or is that — what does that signify to you?
THE WITNESS: I personally believe that it is not an issue in regard to [D.G.D.]’s ability to parent at this time.
THE COURT: It doesn’t mean that he is a molester, or he is a homosexual, or he is a danger to the child?
THE WITNESS: No. Absolutely not. To me it means that he has a sexual preference that involves wearing female’s clothing and that’s basically it.

When further asked whether or not the couple’s child would be harmed if he inadvertently observed his father cross-dressing, Kuka’s answer was that children could be harmed by inadvertently observing a whole range of sexual activities that normal adults engage in, but that he thought the risk was minimal.

Other than Kuka’s testimony, there was no other expert testimony provided at the August 1 hearing. The husband testified that he had sought counseling from a number of people in Montana, but had been unable to find a counselor with prior experience with his problem. He testified that he had every intention of getting counseling and getting his problem resolved. When asked if he thought he could discontinue the behavior, which he conceded was abnormal, he testified that he thought he could. He had never publicly cross-dressed, and felt very strongly that he did not want his son to do what he had done and experience the pain that had resulted from his problem. However, neither did he want his son to grow up feeling that he had been abandoned by his father since, when the husband was four years old, his own father had died and he felt a serious void in his life without a father-son relationship.

The husband’s mother testified that, even though he had grown up in her home, she had first learned that he engaged in cross-dressing in May 1991 when this dissolution proceeding was commenced. She only learned then because the husband told her.

The husband’s brother-in-law testified that he had known him for 21 years, and over that time had had a lot of contact with him and considered him a good role model for children. He first became aware of the husband’s prior history of cross-dressing one week before the hearing.

The wife testified that she had been married to her husband for three years and had never personally observed him in women’s clothing. She only learned of it because he acknowledged the problem to her after she discovered some of the clothing he had worn, which had been stored at various places in the family home. She also testified that, other than her concern with his cross-dressing, she had no concern with his parenting skills.

At the conclusion of the August 1 hearing, the husband asked for extended visitation rights. The wife objected on the grounds that there had not been a sufficient psychological evaluation to know whether extended visitation would be harmful to the couple’s child. She requested further psychological evaluation and agreed if that evaluation showed that there was no risk of harm to the child, she would have no objection to extended visitation.

After the August 1 hearing, the District Judge observed that he had no personal knowledge about the subject they had been discussing, and would have to rely on the experts. He issued a temporary order disallowing any overnight visitation, and further stated that as soon as he saw some expert opinion telling him he had no reason to be concerned, he would have no reason to disbelieve that expert. That kind of expert advice was soon presented.

On November 6, 1991, the husband was evaluated by Julia R. Heiman, Ph.D., a psychologist and professor of psychiatry and behavioral sciences at the University of Washington Medical School. Her specialty is sexual disorders. She was asked to evaluate the husband for the purpose of determining whether his sexual pattern created any risk for his son.

Dr. Heiman interviewed the husband, reviewed the battery of psychological tests administered in Great Falls, and did some testing of her own. She concluded that while he had cross-dressed in the past, he did not fit into the medical diagnosis of transvestite, based on the fact that he had not engaged in that activity for over six months prior to the time that she had seen him. She concluded that his past conduct would not be detrimental to his son if the husband acted as a co-parent, and that based on the objective testing that was done, she believed the husband to be truthful in the history that he reported to her.

Based on what she had learned, Dr. Heiman expressed the opinion that the husband was not a compulsive cross-dresser and had a good chance of changing his behavior through treatment or therapy because he was highly motivated to do so. However, she also expressed the opinion that even if this couple’s son were to observe a public exhibition of transvestism, it would be highly unusual for the child to imitate that conduct. She said that transvestism is usually learned through experimentation, rather than imitation of someone else.

Based upon this evaluation, and counseling that the husband had undergone with Dr. Monty Kuka, the brother of Rich Kuka, on December 27,1991, the husband moved to modify the District Court’s temporary custody and visitation order based on what the District Court had told him about expert opinions, and for the further reason that the wife had moved to Missoula and it was very difficult for him to travel back and forth for visitation for only a few hours during the day. In response to that motion, a second hearing was held on February 19 and 20,1992.

At that hearing, Dr. Heiman’s report and deposition were submitted and Dr. Monty Kuka was also called to testify. Dr. Kuka testified that he is a licensed clinical psychologist who did a psychological evaluation of the husband in July 1991, and had seen him in weekly sessions of psychotherapy since November 1991. He found nothinginthe husband’s psychological test results to concern him about the husband’s effectiveness as a parent or the role model that he would provide to his son. To the contrary, he testified that he found the husband skilled in a lot of areas of parenting to a degree that is well above average. Dr. Kuka reviewed Dr. Heiman’s deposition and report and found nothing that was contradictory with his own conclusion.

Dr. Kuka testified that the psychotherapy the husband had undergone went very well, the husband was highly motivated and cooperative, and followed all of Dr. Kuka’s instructions. He testified that in conducting his evaluation, his primary concern was for the well-being of the couple’s child, but that he felt the husband would be a truly effective parent who has the qualities that are basic to establishing a good relationship with the child. He concluded that, as a result of the counseling the husband had undergone, the husband was no longer involved in cross-dressing. He did not consider the husband a compulsive cross-dresser, and when asked by the court about the risk to the child from observing his parent dressed in female undergarments, Dr. Kuka testified that, in the very unlikely event that the husband was observed by his son, any damages could be dealt with in a way that would minimize the impact on him. He further testified that, in his opinion, the positive experiences from a normal father-son relationship far outweighed the minimal negative impact about which he was asked to speculate. He testified:

Q. So what you are telling us is that it’s more valuable for him to grow up with a parent that appears to have the skills that [D.G.D.] has compared to the risk that this child may turn out to be a transvestite?
A. Yea. Because I don’t see that that is a real risk. And I do see the real value.

Dr. Kuka testified that to deprive a child of a relationship with a parent is extremely destructive to their development, while the unlikely event of the same child inadvertently observing his father in inappropriate garments would be no worse than children seeing their parents engage in sex, or physical violence, or fighting within the home. He explained that, although he felt that eventuality was unlikely, any traumatic effect could be minimized with proper communication and explanation.

The husband testified that at the time of the hearing he had not had any items of women’s clothing in his possession since November 1990, and had no intention of ever possessing any again.

In spite of this evidence, with which the wife said she would be satisfied, and in spite of her acknowledgement that she had never even seen her husband cross-dress, the wife objected to expanded visitation privileges until a further report could be obtained from a psychologist of her choice who specialized in child development.

At the conclusion of the hearing, the District Court observed that both parents appeared to be good parents and that if it were not for the issue of transvestism (even though Dr. Heiman had testified that the husband was not a transvestite), he would not have any concerns. The judge acknowledged that he was having difficulty with the issue, largely out of ignorance, because he did not understand transvestism.

The District Court accepted Dr. Kuka’s testimony, but expressed reservation that Dr. Kuka was an expert in child development with very limited experience in transvestism. The wife and her attorney, on the other hand, objected to Dr. Heiman’s testimony because she was an expert in transvestism with very little experience in child development.

For these seemingly contradictory reasons, the District Court decided to maintain the status quo pending further expert consultation. On February 24, 1992, the District Court entered an order denying the husband extended visitation.

Because of the wife’s concerns, her attorney requested an opinion from Richard Green, M.D., a psychiatrist from the staff of the UCLA Medical School. Dr. Green submitted a report to the wife’s attorney on February 20,1992. Although a portion of that report is referred to in the District Court’s findings, when the entire text of the report is considered, it is totally consistent with the prior expert testimony. In fact, the report was offered at the parties’ April 22,1992, trial by the husband’s attorney and admitted by the District Court over the objection of the wife. Some of the more significant points in Dr. Green’s report are that, in his study of children with sexually atypical parents, he has found no evidence of a sexual identity conflict. He advised that no cross-dressing by the husband take place in the boy’s presence for the next few formative years. However, there was not much chance of that since the husband had never cross-dressed in anyone’s presence in the previous 20 years that he had engaged in the activity.

Dr. Green also pointed out that to the extent the husband could provide assurance that cross-dressing would not occur, he should have the same visitation opportunity as any father where cross-dressing is not an issue. In terms of supervision of visitation, he said he would defer to the clinician who was seeing the father for therapy. That clinician was Dr. Monty Kuka.

Importantly, Dr. Green also concluded that the more time a boy can spend with his father, the more available will be a male for appropriate sexual identification. He concluded that there was no evidence that transvestism by a father affects parenting qualities, nor was there any evidence that fathers who cross-dress are inclined to sexually abuse children, any more than any other adult male.

With this fourth expert opinion in the husband’s favor, the final trial in this matter was held on April 22,1992. At that trial, Dr. Monty Kuka was again called as a witness. He testified that by the time of trial he had discontinued his therapy sessions with the husband because he felt the husband had identified and dealt with his problem of cross-dressing. In his opinion, there was not a risk that the husband would cross-dress in the future. He testified that in all the custody evaluations he had done, the husband was one of the most qualified parents, whether being considered for shared custody or sole custody, that Dr. Kuka had ever encountered. He testified that even if the husband cross-dressed again, which he felt was unlikely, and even if his son observed it, which he felt was even more unlikely, he did not think that observation presented a significant risk of a negative impact on the behavior of his child. He pointed out that based on Dr. Green’s studies, even radical changes in the sex role of a parent had not had a major impact on children who had been studied.

At the time of trial, the husband testified that he had not cross-dressed for a year and a half, and was able to assure the court that he would never do something like that in the presence of his son.

Raymond Kelly testified that he had been a friend of the husband since the third grade, and they were roommates in college. They had stayed in touch ever since. Kelly stated that he was not aware that the husband had engaged in cross-dressing until the trial, and he only knew then because the husband had told him.

On January 30, 1992, at the husband’s request, the court had appointed a guardian ad litem to represent the interests of the couple’s son. On April 22, 1992, she filed her report to the court. In her report, she indicated that she had conducted her own independent investigation and found nothing from that investigation which would indicate that the husband’s past dressing habits should disqualify him as a custodial parent. She pointed out that no one had ever seen him cross-dress, and that he appeared to be able to control the behavior. She recommended joint custody, with physical custody to the wife during the week, and custody for the husband on alternating weekends. She also recommended that the parties share physical custody of their son during summer months.

Other than those experts whose testimony is summarized in this opinion, no other expert was called as a witness in this case, nor were reports from any other experts submitted to the District Court. In spite of the overwhelming evidence that the husband presented no risk to his son, and that the only real risk to this child’s normal development was by limiting him from a normal relationship with his father, the District Court entered the findings and decree which are the subject of this appeal.

The court found that the husband was an admitted transvestite. The husband was not an admitted transvestite and was not qualified to make that diagnosis. Dr. Heiman, who was qualified, testified that the husband was not a transvestite.

The court found that if the parties’ son was exposed to such role modeling (cross-dressing), he would be irreparably harmed. There was no such evidence. That was the contention of the wife and her attorney. However, every one of the four experts who expressed an opinion in this case opined to the contrary.

The District Court found that transvestism is obviously compulsive and secretive. All of the experts who were asked testified to the contrary. The husband did not feel that his conduct was compulsive, and in fact, had not engaged in it for two years at the time of the hearing on his motion to amend the District Comb’s findings.

The District Court found that the child’s mental health is potentially at risk and that the child faced irreparable sexual misidentification if he saw his father cross-dress. This finding was directly contrary to all of the competent evidence in this case. This was the concern repeatedly expressed by the District Court because this was the position repeatedly argued by the wife and her attorney. However, everyone qualified to draw such an opinion disagreed with that conclusion.

At the September 18 hearing to consider the parties’ motions to amend, Dr. Kuka was again called as a witness to address the kind of supervised visitation that the District Court had provided for in its decree. He testified that based on his faihiliarity with the husband, and his familiarity with the opinions of the other experts who had been involved in this case, there was no reason to have supervision of visitation and that that kind of limitation would have a negative affect on the child by limiting natural interactions with his parent. Dr. Kuka felt in this case that it would create tension, disharmony, and a discomfort which limited the spontaneity and enjoyment of the visitation. He reviewed the District Court’s decree and expressed the opinion that Dr. Green’s statement had been taken out of context and specifically disagreed with the District Court’s conclusion that any potential danger to the couple’s son had been established.

Dr. Kuka expressed the opinion that Dr. Green’s letter was very clear in its conclusion that there was not a risk of gender confusion, even in the families of transsexuals and homosexuals. He said that the situation in this case was significantly less confusing.

Dr. Kuka’s testimony was interrupted by the District Court and he was asked “[w]hat if the boy walked in the room and saw his “old man” dressed up in panties and bra?” Dr. Kuka’s response was that he did not think there was any risk that that would happen, but that, even if it did happen, it would be confusing to the son but not traumatic. He unequivocally stated that kids are able to understand the difference between cross-dressing and normal behavior. He testified that while he understood the court’s concern about the welfare of this child, his concern was for the welfare of a child who is not allowed to see his father on a natural basis.

The husband admittedly engaged in private behavior which most people would find offensive. He, himself, found his conduct so offensive that he put off seeking help for years out of fear that he would be publicly ridiculed and humiliated. However, out of commitment to a normal relationship with his son, he has now gotten the help that he needs. He no longer engages in the conduct which the District Court finds offensive, and everyone who is qualified to express an opinion has advised the District Court that any remote risk to his son is far less that the risk caused by the unnatural restrictions that have been placed by the District Court on his relationship with his son.

By statute in Montana, custody is to be based on a child’s best interest, and joint custody is favored unless there is some compelling reason to order otherwise. In this case, we conclude that the custody and visitation arrangement ordered by the District Court was contraxy to the child’s best interest and there was no evidence, other than the District Court’s unfounded fears, to deny joint custody.

The uncontroverted evidence was that, although the husband had begun privately cross-dressing as a teenager, no one had ever seen him cross-dress. Not his mother, nor his sisters with whom he was raised; not his childhood friend who lived with him for four years as a college roommate; and not even his wife with whom he lived until this dissolution proceeding was commenced.

There was further evidence that the husband despised the fact that he had cross-dressed in the past, but was afraid to acknowledge his problem until he had no choice. Once he did so, he entered intensive therapy, which, according to his counselor, had been successful to the point that he had not cross-dressed, even privately, for two years prior to the trial which led to the court’s decree.

The husband’s counselor, whose testimony was undisputed, expressed the unequivocal opinion that this man would not cross-dress in the future, that even if he did, it would be a very private matter as it had been in the past, and that there was no risk of observation by his son. However, even assuming that, contrary to the counselor’s expectation, the husband did cross-dress, and further assuming, contrary to all prior behavior, his cross-dressing was observed by his son, every counselor who testified in this case testified that the negative impact on the son would be less than the impact from not having a normal relationship with his father. The uncontroverted evidence was that supervised visitation during the daytime on alternate weekends was not conducive to a normal relationship between this child and his father.

We conclude, based on the above discussion, that the District Court erred by awarding sole custody of this couple’s son to the wife and by requiring that the husband’s visitation -with his son be supervised. We reverse that part of the District Court judgment and remand to the District Court for a determination of custody and visitation consistent with the recommendation by the child’s guardian ad litem, based on our conclusion that there is no substantial evidence which indicates that a custody or visitation arrangement, other than as suggested by the guardian ad litem, would be in the best interest of this couple’s minor child.

II

Did the District Court err when it ordered the husband to pay maintenance to the wife in the amount of $150 per month for two years?

Awards of maintenance are authorized pursuant to § 40-4-203, MCA, under the following circumstances:

(1) In a proceeding for dissolution of marriage ... the court may grant a maintenance order for either spouse only if it finds that the spouse seeking maintenance:
(a) lacks sufficient property to provide for his reasonable needs; and
(b) is unable to support himself through appropriate employment or is the custodian of a child whose condition or circumstances make it appropriate that the custodian not be required to seek employment outside the home.
(2) The maintenance order shall be in such amounts and for such periods of time as the court deems just, without regard to marital misconduct, and after considering all relevant facts including:
(a) the financial resources of the party seeking maintenance, including marital property apportioned to him, and his ability to meet his needs independently, including the extent to which a provision for support of a child living with the party includes a sum for that party as custodian;
(b) the time necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment;
(c) the standard of living established during the marriage;
(d) the duration of the marriage;
(e) the age and the physical and emotional condition of the spouse seeking maintenance; and
(f) the ability of the spouse from whom maintenance is sought to meet his needs while meeting those of the spouse seeking maintenance.

The standard of review for a maintenance award is whether the District Court’s findings are clearly erroneous. In re Marriage of Eschenbacher (1992), 253 Mont. 139, 142, 831 P.2d 1353, 1355.

The District Court made three findings critical to its maintenance award. In Finding No. 12, the court found that the wife had greater expenses than income each month by an amount of $369.80. In Finding No. 13, the court found that the husband had $988.50 more income each month than he had expenses. And in Finding No. 24, the court found that while the wife did not have sufficient income or property to meet her needs, the husband did have sufficient income after expenses to pay the wife $250 per month for maintenance for two years. In its post-trial amendment to its decree, the District Court reduced that amount to $150 per month.

On appeal, the husband does not dispute that the wife has insufficient income or property to meet her needs. He does, however, argue that the evidence did not support the District Court’s finding that he had disposable income after paying his monthly expenses, and therefore, the District Corut’s award of maintenance was an abuse of discretion because it did not properly consider his ability to pay, as required by § 40-4-203(2)0), MCA.

The husband’s specific argument is that the District Court’s findings regarding his disposable income did not take into consideration the amount of money that he had to spend each month for travel expense to exercise his visitation rights; the amount of debt he had incurred for attorney fees and expert witness fees, the cost of counseling, and the cost of housing. He contends that after consideration of these expenses, he had no disposable income at the end of each month, and therefore, had no ability to pay maintenance.

During trial on April 22, 1992, the husband testified that he had spent approximately $3000 on travel expenses to exercise his visitation rights since he and his wife had separated and she had moved to Missoula. He explained that in addition to the expense of driving to and from Missoula, he had to pay the cost of a motel room for three nights per weekend in order to have a place to stay and to take his child.

He testified that at the time of trial the total amount he owed for attorney fees, expert witness fees, and counseling fees was $9916, and that he was attempting to pay off a $500 debt to his therapist at the rate of $100 to $150 per month.

In addition, the husband testified that he was living with his mother because he was unable to afford housing and still pay for his travel expenses and legal expenses. However, he hoped to be able to move into his own apartment or home in the future, and estimated that a reasonable cost for rent or a house payment would be $450 a month.

The husband testified that even while living with his mother and having no expense for housing, his monthly living expenses, without repayment of his debts, were $1700.

None of the husband’s testimony regarding the expense of his travel to exercise visitation, the amounts owed to his attorneys, expert witnesses, and counselors, or the reasonable cost of housing, were contested by the wife. However, none of these expenses are mentioned in the District Court’s Findings No. 12,13, or 24. Therefore, we are unable to conclude whether the District Court considered these expenses or whether, after consideration of these expenses and a reasonable allowance for repayment of these debts, the husband has the financial ability to meet his needs and still pay maintenance. If, after consideration of all his expenses, he has no money left at the end of each month, it is an abuse of discretion to require that he pay maintenance. Therefore, we vacate the District Court’s maintenance award and remand to the District Court for farther findings regarding the husband’s ability to make maintenance payments after consideration of all of his monthly expenses and needs.

III

Did the District Court err in its calculation of child support and in its award of day care expenses?

The standard of review for a child support award is whether the district court abused its discretion. In re Marriage of Nash (1992), 254 Mont. 231, 235, 836 P.2d 598, 601. In resolving that issue, we need consider § 40-4-204, MCA (1991), which provides, in relevant part, that:

(3)(a) Whenever a court issues or modifies an order concerning child support, the court shall determine the child support obligation by applying the standards in this section and the uniform child support guidelines adopted by the department of social and rehabilitation services pursuant to 40-5-209, unless the court finds by clear and convincing evidence that the application of the standards and guidelines is unjust to the child or to any of the parties or is inappropriate in that particular case.

This case originally went to trial on April 22, 1992. Both parties submitted proposals for child support based upon the child support guidelines in effect at that time. Their proposals are summarized, as follows, in the District Court’s Finding No. 19:

That each party presented calculations with respect to child support based on the Montana Child Support Guidelines. Those child support calculations varied from $291.00, as computed by petitioner, to $313.83, as computed by respondent.

Based upon these calculations, the District Court ordered that the husband pay child support in the amount of $300 per month.

On July 31, 1992, subsequent to trial but prior to the District Court’s entry of its decree, new child support guidelines were enacted. These were not available to the parties, nor the court, when they submitted their proposed findings, conclusions, and judgment. Neither did the District Court have reason to know that they would apply to its decision. However, we have recently held that district courts are to determine child support obligations according to guidelines in effect at the time that the court makes its decision. Paternity of W.L. (Mont. 1993), 855 P.2d 521, 50 St. Rep. 751.

Among the changes in the new child support guidelines is an amendment to Rule 46.30.1543, ARM, which provides that the amount of child support set forth in the guidelines may be varied, based on a number of factors, including the cost of exercising long distance visitation.

For these reasons, both parties submitted revised child support work sheets to the District Court in support of, and in opposition to, the husband’s motion to alter or amend the District Court’s decree.

In her amended work sheet, the wife proposed a child support obligation of $271 with maintenance, and $331 without maintenance. The husband proposed support in the amount of $193.89 with maintenance, and $225.47 without maintenance. However, he argued that the amount should be further reduced due to his travel expenses which are necessarily incurred to exercise visitation. At that time, he alleged that that amount was $220 per month.

The husband also objected to the District Court’s finding that he was obligated to pay a proportionate share of the child care expenses incurred from the date on which the parties separated until the date of judgment.

In its order entered in response to the parties’ post-trial motions, the District Court did not address the new child support guidelines, nor did it address what allowance, if any, should be made for the expenses incurred by the husband to exercise his visitation rights. Both parties agree that the husband’s child support obligation will also be affected by the District Court’s resolution of the maintenance issue which we have instructed it to revisit on remand. Therefore, we vacate the District Court’s award of child support and remand to the District Court for further consideration of the husband’s child support obligation under the new child support guidelines, and consideration of what effect, if any, should be given to the fact that the husband necessarily incurs expense each month in order to exercise his visitation rights.

We conclude, however, that the District Court did not err by providing in its decree for payment by the husband of his proportionate share of child care expenses incurred subsequent to the parties’ separation and prior to the date of the District Court’s decree. Apportionment of expenses for child care is specifically authorized by the new child support guidelines.

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

JUSTICES GRAY, HUNT, HARRISON, NELSON and WEBER concur.

CHIEF JUSTICE TURNAGE

dissenting:

For the following three reasons, I respectfully dissent: 1) the highly unusual nature of D.G.D.’s past behaviors and practices, not all of which are described in the majority opinion; 2) the impossibility of guaranteeing that such behaviors and practices will not occur again and will not affect the minor child; and 3) the District Court’s responsibility to protect the best interests of the child.

I would affirm the court’s discretion in ordering supervised visitation while the child is at a particularly vulnerable stage of his development.


source: Caselaw Access Project

author: JUSTICE McDONOUGH JUSTICE WEBER

license: Public Domain

text:
    ROBERT VAN RIPER, JEAN VAN RIPER and VAN’S TRACTOR, INC., Plaintiffs and Respondents, v. FORD NEW HOLLAND, INC., and FORD MOTOR CREDIT COMPANY, Defendants and Appellants.
    No. 92-139.
    Submitted on January 21, 1993.
    Decided October 21, 1993.
    50 St.Rep. 1289.
    261 Mont. 206.
    862 P.2d 47.

      For Defendants and Appellants: Keith Strong (argued) and Creighton Magid, Dorsey & Whitney, Great Falls.
    For Plaintiffs and Respondents: Turner C. Graybill (argued) and Gregory H. Warner, Graybill, Ostrem, Warner & Crotty, Great Falls.
   JUSTICE McDONOUGH

delivered the Opinion of the Court.

Ford New Holland, Inc. (Ford New Holland), appeals from ajudgment entered by the District Court for the Eighth Judicial District, Cascade County. The court assessed damages, costs, and attorney fees against Ford New Holland for violations of §§ 30-11-802 and -803, MCA, and breach of the covenant of good faith and fair dealing. Ford New Holland appeals. We affirm.

The issues are:

1. Did the District Court err by applying §§ 30-11-802 and -803, MCA, to the Versatile Agreement?

2. Did the District Court err in concluding that Ford New Holland violated §§ 30-11-802 and -803, MCA?

3. Did Ford New Holland breach the implied covenant of good faith and fair dealing?

4. Did the District Court err in awarding damages?

5. Did the District Court err in awarding attorney fees?

Robert and Jean Van Riper (the Van Ripers), owned and operated Van’s Tractor, Inc. (Van’s Tractor), in Havre, Montana. Van’s Tractor sold new and used tractors and other farm equipment. Van’s Tractor entered a dealership agreement with Versatile Farm Equipment (Versatile) on November 2, 1983.

In 1987, Versatile, then in bankruptcy, sold certain of its assets, including the Van’s Tractor Versatile franchise, to Ford New Holland, a subsidiary of Ford Motor Company. Versatile sold other of its assets, including a Noble plow line, to Vicon Farm Equipment, Inc., a corporation unrelated to Ford New Holland. Van’s Tractor decided not to continue selling Noble products and returned its supply of Noble parts to Vicon.

Corporate mergers resulted in Ford New Holland then having two outlets in Havre, Van’s Tractor and an existing “company store.” The goal of Ford New Holland was to have one dealer in Havre. It sought a dealer who would buy out its interest in the company store. Van’s Tractor was a prospective purchaser. However, Ford New Holland determined that Van’s Tractor would not be its full-line dealer in Havre. Ford New Holland did not notify Van’s Tractor of this decision.

In the fall of 1987, Ford New Holland designated Van’s Tractor for attrition as a Versatile dealer. The designation meant Van’s Tractor could not transfer its Ford New Holland dealership and had no future as a Ford New Holland dealer. Ford New Holland did not notify Van’s Tractor of this designation.

From 1987 to 1988, the net worth of Van’s Tractor declined. In the year ending April 1988, Van’s Tractor sold only one piece of Versatile equipment. The Van Ripers attempted to sell Van’s Tractor and received an offer in April of 1988, but Ford New Holland refused to approve transfer of the dealership. Ford New Holland then asked that Van’s Tractor resign its dealership because it had attempted to sell the franchise. Van’s Tractor refused.

In April 1988, Ford New Holland decided to terminate the Van’s Tractor dealership based on the refusal by Van’s Tractor to pay an $11,000 disputed bill. The position of Van’s Tractor as to this bill was that it would not pay the bill until it was credited for Noble parts it originally had obtained from Versatile and had returned to Vicon. The position of Ford New Holland was that although it had the right to collect the accounts of Versatile, it had no responsibility to fulfill the obligations of Versatile which had been assumed by Vicon.

Subsequently, Ford New Holland placed Van’s Tractor on “stop ship” status and withdrew its credit line. On May 20,1988, Ford New Holland drafted a letter demanding that Van’s Tractor pay the bill within ten days or be terminated as a dealer. Termination proceedings began on May 27, 1988. Van’s Tractor did not receive Ford New Holland’s demand letter until June 6, 1988, but it paid the disputed amount within ten days of that date.

Despite payment, Ford New Holland did not remove Van’s Tractor from “stop ship” status. As a result, Ford New Holland shipped a four-wheel drive tractor and a Versatile swather ordered by Van’s Tractor to the competing dealer in Havre. Van’s Tractor was unable to obtain any parts until August 23,1988. Van’s Tractor resigned its dealership in September of 1988, and then brought this lawsuit.

The case was tried to the court sitting without a jury. The court dismissed all individual claims of Robert and Jean Van Riper and all claims against Ford Motor Credit. The court found in favor of Van’s Tractor on its claims against Ford New Holland and awarded $443,000 in damages, attorney fees of $162,000, and $12,393 in costs. Ford New Holland appeals.

I

Did the District Court err by applying §§ 30-11-802 and -803, MCA, to the Versatile Agreement?

The District Court found that Ford New Holland violated both § 30-11-802, MCA, and § 30-11-803, MCA. Ford New Holland contends that application of these statutes in this case is a prohibited retroactive application because the statutes were enacted in 1985, two years after the contract was entered between Versatile and Van’s Tractor.

The record demonstrates that in the spring of 1987, Versatile was insolvent and in receivership. It had ceased manufacturing, was negotiating liquidation of its assets, and was in bankruptcy. FordNew Holland assumed and undertook the duties and responsibilities of Versatile with respect to certain dealerships, including Van’s Tractor. Versatile had no intention of being responsible any longer under its dealership agreements; it was out of business. Beginning in the fall of 1987, Ford New Holland supplied Van’s Tractor with goods and financing. Van’s Tractor consented to this relationship and believed it was a Ford New Holland dealer.

Furthermore, the assignment was more than just a product change, which is what Ford New Holland would have us believe. As the District Court found:

Ford New Holland’s position that it was entitled to the assets but not the liabilities of the Versatile Agreement is itself sufficient evidence of a change in the duties and obligations under the Versatile Agreement to create a new agreement to which the requirements of MCA § 30-11-801 et. seq. otherwise apply.

This refers to Ford New Holland’s refusal to be bound by any obligations of Versatile in relation to the Noble plow line.

In support of its ruling the District Court cited Kealey Pharmacy & Home Care Serv. v. Walgreen Co. (W.D. Wi. 1982), 539 F.Supp. 1357, modified, 761 F.2d 345, damages set, 607 F.Supp 155. That case supports the view that a non-retroactive statute applies to contracts originally entered before the statute was enacted and which have been significantly altered after the effective date of the statute.

As stated by the District Court, one result of the 1987 sale of Versatile to Ford New Holland and others was that Vicon was responsible for crediting Van’s Tractor for returns of Noble parts for which Ford New Holland was, at the same time, attempting to collect payment. As Robert Van Riper testified, during the months of delay before Van’s Tractor received payment from Vicon for the $11,000 in returned Noble parts, Van’s Tractor was placed, without notice, onC.O.D. status for parts shipped by Ford New Holland.

Another result of the sale of Versatile was that Ford New Holland required Van’s Tractor to submit a completely new application for a dealership. Requiring this application exceeded the scope of periodic financial reporting allowed under the Versatile agreement. It was, in fact, akin to making a fresh decision whether to continue the contractual relationship between Ford New Holland and Van’s Tractor. (Ford New Holland, however, never approved the new dealership application.)

We conclude that the 1987 sale of assets by Versatile to Ford New Holland and others significantly altered the dealership relationship and contract. We hold that the District Court did not err in applying §§ 30-11-802 and -803, MCA, to the Versatile Agreement between Van’s Tractor and Ford New Holland.

II

Did the District Court err in concluding that Ford New Holland violated §§ 30-11-802 and -803, MCA?

The District Court concluded that actions taken by Ford New Holland violated §§ 30-11-802 and -803, MCA. The argument of Ford New Holland that these violations did not occur depends on its position that the terms of the Versatile dealership contract can negate statutory requirements. Such is not the case. Contracts which are in violation of the policy of an express law are unlawful. Section 28-2-701, MCA.

Section 30-11-802, MCA, provides:

No grantor may, directly or indirectly, terminate, cancel, fail to renew, or substantially change the competitive circumstances of a dealership agreement without good cause. The burden of proving good cause is on the grantor.

The District Court concluded that Ford New Holland changed the competitive circumstances of its dealership agreement with Van’s Tractor without good cause and in violation of § 30-11-802, MCA, in seven separate ways:

unilaterally placing Van’s Tractor in attrition status without reasonable notice or the opportunity to avoid further investment; without prior notice, depriving Van’s Tractor of the possibility of transferring the Versatile dealership to a qualified buyer;
requesting the resignation of Van’s Tractor and threatening termination of the franchise on the erroneous pretext that the Van Ripers had sold the business and then, upon being advised of the true facts, maintaining its erroneous position that Van’s Tractor had breached its dealership agreement by attempting to sell the franchise;
establishing a second Versatile franchise in the Havre area when it was aware that two such dealers could not survive; refusing to remove Van’s Tractor from stop ship status after receiving the payment it had demanded;
diverting the orders of Van’s Tractor for goods without notice and transferring such products to the competing store without notice; and continuing adverse credit terms against Van’s Tractor (requiring that all purchases be C.O.D.).

The court also concluded that “the conduct of Ford New Holland indirectly terminated Van’s Tractor, Inc. as a Ford New Holland dealer without good cause.” The record supports the conclusions of the District Court as to the violations by Ford New Holland of § 30-11-802, MCA.

Section 30-11-803, MCA, provides in relevant part:

(1) Except as provided in subsections (2) and (3), a grantor shall provide a dealer at least 90 days’ prior written notice by certified mail of termination, cancellation, nonrenewal, or substantial change in competitive circumstances. The notice must state all the reasons for termination, cancellation, nonrenewal, or substantial change in competitive circumstances and must provide that the dealer has 60 days from receipt of the notice in which to rectify any claimed deficiency. If the deficiency is rectified within 60 days, the notice is void.
(2) If the reason for termination, cancellation, nonrenewal, or substantial change in competitive circumstances is nonpayment of sums due -under the dealership, the dealer is entitled to 10 days’ prior written notice by certified mail. If the dealer does not remedy such default within 10 days after receipt of the notice, the notice is effective according to its terms.

The court concluded that Ford New Holland violated § 30-11-803, MCA, by terminating Van Tractor’s franchise -without notice, failing to notify Van’s Tractor of its original attrition plan, and leaving Van’s Tractor on “stop ship” status after Van’s Tractor paid the disputed parts account. The record supports these conclusions.

We hold that the District Court did not err in concluding that Ford New Holland violated §§ 30-11-802 and -803, MCA.

Ill

Did Ford New Holland breach the implied covenant of good faith and fair dealing?

The parties agree that damages are the same under this theory and the theory of statutory violations discussed in Issue II. Because we have ruled that the District Court did not err in finding that the statutory violations occurred, we need not address whether Ford New Holland also breached the implied covenant of good faith and fair dealing.

IV

Did the District Court err in awarding damages?

Ford New Holland argues that the District Court erred in awarding damages for lost profits for a period of ten years into the future because the evidence supporting that award was admitted erroneously. It asserts that the expert for Van’s Tractor, Mr. Stuart, did not independently evaluate the relevant Havre market and that he based his figures on a five year evaluation done by Ford in connection with a different store. Ford New Holland asserts that the damages awarded for ten years into the future were purely speculative.

When injury caused by a breach of a contract is certain, damages for lost profits may be awarded even though the amount of damage is uncertain. Hostetler v. Donlan (1986), 221 Mont. 380, 382-83, 719 P.2d 1243, 1245. Van’s Tractor points out that the damages it was awarded were half of Mr. Stuart’s projection, and that a five-year profit projection based solely on the Ford New Holland projections suggested lost profits with a present value of $698,040. Ford New Holland’s own expert projected lost profit with an upper range of $501,885.

We hold that the damage award of $443,000 was not error.

V

Did the District Court err in awarding attorney fees?

The first argument of Ford New Holland on this issue, that Van’s Tractor was not entitled to attorney fees -under contract or statute, is negated by our holdings under Issues I and II. Section 30-11-811, MCA, provides that reasonable attorney fees may be awarded for violation of §§ 30-11-801 through -811, MCA.

Ford New Holland also argues that the District Court miscalculated attorney fees. It points out that the claims of the individual plaintiffs, Robert and Jean Van Riper, and several theories of recovery were abandoned prior to trial and states that the attorney fees awarded exceed those called for in the contingent fee agreement between Van’s Tractor and its attorneys.

The District Court cited and applied the eight-part standard set forth in Stimac v. State (1991), 248 Mont. 412, 417, 812 P.2d 1246, 1249, for determining the appropriate amount of attorney fees. The court pointed out that this case involved a novel and difficult question of interpretation of statutes which had not been previously construed. It acknowledged that the case involved a series of complicated factual issues. It noted the substantial commitment of time made by the lawyers for Van’s Tractor and their support staff and that this case required over three and one-half years to complete. The court reasoned that this case was an important one, that the result obtained was favorable to Van’s Tractor, and that counsel for Van’s Tractor are experienced and skilled in the litigation of this type of business case. The court further pointed out that Van’s Tractor entered an agreement with its attorneys to pay them a contingent fee of one-third of any recovery obtained, or forty percent of recovery in the event of any appeal, and that, under that agreement, counsel risked the possibility of no recovery. The court also stated its intent to do as little harm as possible to the completeness of the damages awarded to Van’s Tractor as a result of the attorney fees it must pay its counsel.

We conclude that the District Court acted properly in applying the statute allowing an award of attorney fees and in setting those fees according to the criteria set forth in Stimac. We hold that the District Court did not err in awarding attorney fees of $162,000.

Affirmed.

JUSTICES HARRISON, HUNT and TRIEWEILER concur.

JUSTICE WEBER

dissents as follows:

I dissent from the majority opinion which awards damages, costs and fees against Ford New Holland for violations of §§ 30-11-802 and 803, MCA.

I will set forth the essential terms of the two contracts which are pivotal to the decision. The first is the Dealer Sales and Services Agreement (herein called Dealer Agreement) dated November 2,1983 between Versatile Farm Equipment Corporation (herein Versatile) and Van’s Tractor, Inc. (herein Van’s Tractor). The non-exclusive right to sell products of Versatile granted to Van’s Tractor is contained in the following paragraph:

1.1 The Company hereby grants to the Dealer the non-exclusive right to sell the products of the Company as hereinafter defined. ... All transactions between the Company and the Dealer shall be governed by this Agreement unless the parties specifically agree otherwise in writing.

I emphasize that Van’s Tractor was given a non-exclusive right to sell Versatile products and that all transactions between Van’s Tractor and Versatile were to be governed by the Dealer Agreement. While the Dealer Agreement did provide that the parties could otherwise agree in writing, there is no such agreement in the record. As a result, the transactions between Van’s Tractor and Versatile were governed by the Dealer Agreement.

The products covered by the Dealer Agreement are as follows:

2.1 Products covered by this Agreement are all those items of agricultural tractors, machines, and equipment ... listed in a current price list... issued by the Company [Versatile] from time to time together with all attachments and accessories thereto ... Each successive Machinery Price List and Parts Price List when issued is deemed to be a part of this Agreement....

Under this paragraph the products covered by the Dealer Agreement were determined by Versatile from time to time as it issued current price lists. Under the agreement Versatile was given the right to eliminate any portion of its equipment lines without the right to object on the part of Van’s Tractor. As a result Versatile had the power to eliminate the Noble line of equipment if it chose. Such elimination is a factor relied upon in the majority opinion without a consideration of the power to eliminate the Noble line of equipment which Van’s Tractor granted to Versatile.

Versatile was given the right to refuse to sell and deliver products under certain conditions in the following Dealer Agreement provision:

6.3 The Company [Versatile] may refuse to sell or deliver Products to the Dealer [Van’s Tractor] at any time under the terms of payment, herein set forth, or in any purchase order of the Dealer, whether or not previously accepted or approved, when in its opinion the conditions of the current account or financial standing of the Dealer do not warrant further sales or deliveries upon such terms.

Versatile was given the right to refuse to sell products to Van’s Tractor when in its opinion the condition of the current account or financial standing of Van’s Tractor did not warrant further sales.

In addition the Dealer Agreement contains extensive termination provisions in part 21, which in pertinent part provide:

21.1 This Agreement shall continue in effect until terminated as hereinafter provided. This Agreement may be terminated immediately, at the Company’s [Versatile] option, by giving notice by hand, verified telex or telecopier or by registered mail, postage prepaid to the last known address of the Dealer [Van’s Tractor] at any time after the occurrence of any of the following events:
(d) default of any indebtedness of the Dealer to the Company...
(g) if the Company, in good faith, believes that the prospect of payment or performance hereunder is impaired or that the Products or any part thereof are in danger of being lost, damaged or confiscated.

Substantial rights in the Dealer Agreement were transferred by Versatile to Ford New Holland under the Assignment and Assumption Agreement dated July 10, 1987 (herein called Assignment), which in pertinent part provided:

2. Assignment.
(a) VFEC [Versatile] hereby irrevocably assigns, transfers, sells and conveys to NH [Ford New Holland] all of VFEC’s right, title and interest in and to the U.S. Dealer Agreements [specifically including the Versatile-Van’s Tractor Agreement] to the extent the same relates to the Business [all business carried on by Versatile in the distribution and sale of equipment but excluding the Noble Business], including all right of action and all other rights accruing to VFEC thereunder.
(b) For greater clarity and certainty, it is hereby agreed that VFEC shall retain unto itself all of its right, title and interest in the U.S. Dealer Agreements to the extent same relate to the Noble Business.
3.Assumption. NH [Ford New Holland] hereby accepts the assignment of VFEC’s [Versatile’s] right, title and interest in and to the U.S. Dealer Agreements as above provided, and agrees to observe, perform and discharge the covenants and obligations of VFEC related to the Business under the U.S. Dealer Agreements in accordance with their respective terms to the extent that the same shall arise or accrue at any time after the date hereof and relate to periods commencing after the date hereof.

The Assignment irrevocably transferred from Versatile to Ford New Holland all of Versatile’s right, title and interest in the Dealer Agreement with Van’s Tractor as it related to Versatile equipment, but specifically excluded all Noble Business which was defined as the business carried on by Versatile Noble Cultivators Company. Under the Assumption portion of the Assignment, Ford New Holland accepted the assignment from Versatile and agreed to observe, perform and discharge all of the obligations under the Assignment in accordance with its terms. I emphasize that no consent on the part of Van’s Tractor or any other dealer was required under the terms of the Assignment. It is critical to note that there are no terms of the Dealer Agreement or of the Assignment, or of any other instrument in writing which requires consent by Van’s Tractor to the assignment by Versatile to Ford New Holland. Nothing in the written record supports a conclusion that the Assignment from Versatile to Ford New Holland modified the contract relationship under the Dealer Agreement with Van’s Tractor so far as all Versatile equipment was concerned.

The majority points out that Ford New Holland contended that the application of §§ 30-11-802 and 803, MCA, is a prohibited retroactive application because the statutes were enacted in 1985, two years after the contract between Versatile and Van’s Tractor was executed. These code provisions in pertinent part provide:

30-11-802. Cancellation and alteration of dealerships. No grantor may, directly or indirectly, terminate, cancel, fail to renew, or substantially change the competitive circumstances of a dealership agreement without good cause. The burden of proving good cause is on the grantor.
30-11-803. Notice of termination or change in dealership. (1)... a grantor shall provide a dealer at least 90 days’ prior written notice by certified mail of termination, cancellation, nonrenewal, or substantial change in competitive circumstances. The notice must state all the reasons for termination, cancellation, nonrenewal, or substantial change in competitive circumstances and must provide that the dealer has 60 days from the receipt of the notice in which to rectify any claimed deficiency. If the deficiency is rectified within 60 days, the notice is void.

Section 802 is construed by the majority opinion as limiting the power of Ford New Holland to terminate, cancel or substantially change the competitive circumstances of the Dealer Agreement without good cause and, placed the burden of proving such good cause on Ford New Holland. In a similar manner, the majority opinion concludes that under § 803, notice of termination or change in dealership is required, and if a deficiency specified in a notice is corrected in accordance with the statute, then the notice is void. I emphasize the clear contradiction between these code section provisions and the rights given to the parties under the terms of the Dealer Agreement itself. The majority opinion has concluded that the Dealer Agreement provisions may be totally disregarded because of the controlling effect of the subsequently enacted statutes. Clearly these code sections directly contradict the rights given to the parties under the Dealer Agreement.

In Part I of the majority opinion, the key conclusion is stated as follows:

We conclude that the 1987 sale of assets by Versatile to Ford New Holland and others significantly altered the dealership relationship and contract.

I disagree with the foregoing conclusions. The Assignment of the Dealer Agreement is not prohibited or restricted under such Dealer Agreement and by its terms does not in any way result in a new dealership relationship or contract.

In Part I of the majority opinion, the statement is made that the Assignment was more than just a product change as Ford New Holland would have us believe. The majority refers to the District Court finding and then states: “This refers to Ford New Holland’s refusal to be bound by any obligations of Versatile in relation to the Noble plow line.” The record does not support that statement. As previously quoted, the Assignment from Versatile to Ford New Holland transferred all title and interest in U.S. dealer agreements, including the Versatile-Van’s Tractor Agreement, to the extent that the contract related to the business carried on by Versatile in the distribution and sale of equipment “but excluding the Noble business.” It is not appropriate to suggest that Ford New Holland in some manner refused to be bound by the obligations of Versatile in relation to the Noble plow line. The record clearly establishes that Versatile transferred all of its interest in the Dealer Agreements regarding the Noble plow line to a different entity. Again, I find that such division by Versatile of its interest in the Versatile-Van’s Tractor Agreement so that it transferred one portion to Ford New Holland and the other portion to another party is not prohibited under the Dealer Agreement.

The majority concluded that the 1987 sale of assets to Ford New Holland significantly altered the dealership relationship and contract. As authority for that conclusion, the majority relies on Kealey Pharmacy & Home Care Serv. v. Walgreen Co., a decision of a federal court in the western district of Wisconsin, which concluded that a non-retroactive statute applies to contracts which have been significantly altered after the effective date of the statute. That is very limited case authority for the guidance of this Court. As previously pointed out, the record contains nothing which demonstrates that Van’s Tractor was required to execute an agreement of any kind as a result of the Assignment by Versatile to Ford New Holland. Apparently the majority concludes that something in the nature of a “new contract” was executed between Ford New Holland and Van’s Tractor so that subsequently enacted statutes apply. No “new contract” of any type was executed between Ford New Holland and Van’s Tractor. The record contains nothing which establishes something in the nature of a “new contract.” As a result I do not know of a proper legal basis for the conclusion of the majority.

I conclude there was not a significant alteration of the rights and responsibilities of Van’s Tractor as a result of the Assignment. So far as the questions raised by Van’s Tractor regarding credit for returned Noble parts, that is an issue which required determination under the existing contract. There is nothing in that transaction which requires a conclusion that a “new contract” was executed. I can find no legal basis upon which to conclude that §§ 30-11-802 and 803, MCA, should be applied to the Dealer Agreement and Assignment to Ford New Holland. I would reverse on that issue.

The majority opinion refers to the application for a dealership submitted by Van’s Tractor to Ford New Holland. Again I believe this to be irrelevant as in fact no new agreement was executed.

Issue II addresses whether the District Court erred in concluding that Ford New Holland violated §§ 30-11-802 and 803, MCA. When enacted in 1985, these code sections were not made retroactive. Article II, Section 31 of the Montana Constitution provides:

Ex post facto, obligation of contracts, and irrevocable privileges. No ex post facto law nor any law impairing the obligation of contracts, or making any irrevocable grant of special privileges, franchises, or immunities, shall be passed by the legislature.

The Constitution prohibits the enactment by the legislature of a law impairing the obligation of contracts. I conclude the majority’s interpretation has impaired the obligation of contracts under the Assignment and the Dealer Agreement. I would reverse on Issue II.

In Issue III the majority opinion concludes that it is not necessary to determine if Ford New Holland breached the implied covenant of good faith and fair dealing. I would conclude that this is the only issue which should be considered on retrial.

I would reverse and remand for new trial on the issue of the breach of the implied covenant of good faith and fair dealing.

CHIEF JUSTICE TURNAGE and JUSTICE GRAY concur in the foregoing dissent.


author: JUSTICE TRIEWEILER

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. RANDEL C. ROMERO, Defendant and Appellant.
    No. 92-618.
    Submitted on Briefs May 20, 1993.
    Decided October 21, 1993.
    50 St.Rep. 1296.
    261 Mont. 221.
    861 P.2d 929.

      For Defendant and Appellant: Curtis L. Bevolden, Yellowstone County Public Defenders, Billings.
    For Plaintiff and Respondent: Joseph P. Mazurek, Attorney General, Cregg W. Coughlin, Assistant Attorney General, Helena; Dennis Paxinos, Yellowstone County Attorney, Russell C. Fagg, Deputy Yellowstone County Attorney, Billings.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

Defendant Randel C. Romero appeals his jury conviction in the District Court for the Thirteenth Judicial District in Yellowstone County. Romero was convicted of sexually assaulting a five-year-old girl. Romero asserts that the District Court erred when it admitted into evidence Romero’s prior conviction for sexual assault upon a 13-year-old girl. The District Court concluded that because the prior conviction was sufficiently similar to the current offense, the evidence of the prior crime was admissible. We affirm.

The dispositive issue on appeal is whether the District Court abused its discretion when it admitted evidence of other crimes, wrongs, or acts of the defendant.

Katye Sease was out one evening during the spring or summer of 1989, and Corrina Ward, a next-door neighbor, was baby-sitting Katye’s five-year-old daughter, C.S. Randel Romero, who was dating Katye at the time, arrived at the Sease residence at approximately 11 p.m. Romero was 20 years old. When Romero arrived, Corrina, the baby-sitter, went home. C.S., was sleeping on the couch.

C.S. testified that while she was sleeping, dressed in her mother’s shirt and a pair of underpants, she awoke to find Romero sitting on the couch next to her with his hand in her underpants and his finger in her vagina. C.S. testified that when she told Romero to stop, he left the room.

C.S. told her mother about the incident in April 1990. On October 18, 1991, Romero was charged by amended information with the offense of sexual intercourse without consent, in violation of § 45-5-503, MCA, and alternatively with the offense of sexual assault, a felony, in violation of § 45-5-502, MCA. On October 4,1991, the State notified Romero of its intention to use evidence at trial of other crimes by Romero. Specifically, the State gave notice that it would introduce evidence of Romero’s plea of guilty to a sexual assault on a 13-year-old girl in 1987. The State asserted that the prior crime was similar to the present charge. Romero filed a trial brief in which he objected to the use of other crimes evidence on the basis that it was too remote and not sufficiently similar to be relevant.

Romero was tried before a jury on June 1, 2, and 3, 1992. C.S. testified on June 1, 1992. On the following day, the District Court considered the parties’ arguments regarding the State’s motion to admit other crimes evidence. The court overruled Romero’s objection and allowed the State to present evidence of Romero’s prior conviction of sexual assault upon T.N.

T.N. testified that she was sexually assaulted by Romero, in 1987, when she was 13 years old. T.N stated that she was asleep in a bed, and at approximately 3 a.m., she was awakened when she felt Romero touching her buttocks, breasts, and vaginal area. T.N. also testified that Romero had been drinking at the time that he assaulted her. T.N. denied that she ever solicited or encouraged Romero’s sexual advances.

Corrina, the baby-sitter, testified at trial that she thought Romero was drunk when he arrived at the Sease residence on the night in question. She stated that Romero smelled of alcohol and was in a “sarcastic” mood.

Romero testified that he never touched C.S. in a sexual manner, and that he is not sexually attracted to younger minor children.

On Jeme 3, 1992, the jury convicted Romero of felony sexual assault. This is an appeal from that conviction.

Romero asserts that the District Court abused its discretion when it admitted evidence of his prior conviction for sexual assault upon T.N. Romero contends that the other crimes evidence did not meet the standards of Rule 404(b), M.R.Evid., and the modified Just rule, as announced in State v. Matt (1991), 249 Mont. 136, 814 P.2d 52.

The standard of review of evidentiary rulings is whether the district court abused its discretion. State v. Crist (1992), 253 Mont. 442, 445, 833 P.2d 1052, 1054. The district court has broad discretion to determine whether or not evidence is relevant and admissible, and absent a showing of an abuse of discretion, the trial court’s determination will not be overturned. Crist, 833 P.2d at 1054.

In Montana, the admissibility of evidence of other crimes, wrongs, or acts is controlled by Rule 404(b), M.R.Evid., which provides:

Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show action in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident.

To insure that evidence of other crimes is not used as character evidence, this Court has outlined four substantive criteria for the admission of such evidence. State v. Matt, 814 P.2d at 56. The four-part rule set forth in Matt is a modification of the rule originally developed in State v. Just (1979), 184 Mont. 262, 602 P.2d 957. The modified Just rule requires that:

1. There is a similarity between the crime charged and the previous crime, act, or wrong;

2. The other crime, act, or wrong must not be remote in time;

3. The evidence of the other crime, act, or wrong is not admissible to prove the character of a person in order to show that he acted in conformity with such character; but may be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident; and

4. There is a determination that the probative value of the evidence is not substantially outweighed by the danger of prejudice to the defendant.

The basis for Romero’s objection at trial to the other crimes evidence only involved the first and fourth requirements of the modified Just rule. Romero raised no issue regarding nearness in time or the purpose for admission of the other crimes evidence. Therefore, we limit our review to those issues raised in the trial court.

SIMILARITY OF OTHER CRIMES,

WRONGS, OR ACTS

Romero asserts that because there was an eight year age difference between T.N. and C.S. when the assaults upon them occurred, the crimes are too dissimilar to satisfy the similarity requirement of the modified Just rule. Romero explains that T.N. was an attractive, developed 13-year-old girl who appeared to be 16. He asserts that T.N. flirted with him when the incident with her occurred. By contrast, contends Romero, C.S. was a five-year-old child at the time of her alleged assault. He denies any attraction to five-year-old girls.

This Comb has held that a prior act need not be identical to the offense charged to be admissible, but there must be sufficient similarity between the two offenses. State v. Tecca (1986), 220 Mont. 168, 714 P.2d 136. In State v. McKnight (1991), 250 Mont. 457, 820 P.2d 1279, we held that although there were some differences between the victims of the prior acts and the victim of the crime charged, the actions of the defendant in the prior acts were sufficiently similar to the actions of the defendant in the crime charged to warrant admission of the prior acts evidence. The present case is analogous to McKnight.

Romero’s conduct with regard to T.N. and C.S. was very similar. Romero sexually assaulted both young girls when they were asleep. On each occasion, Romero had been drinking. He touched both victims on their genital areas with his hands. On both occasions, when the girls awoke and told Romero to stop, he complied and left the room.

Romero’s contention that the age distinction makes the crimes dissimilar is without merit. Both T.N. and C.S. were young girls and nothing in the record supports Romero’s assertions that T.N. looked 16 and solicited his sexual advances. The prior conviction involved inappropriate sexual contact by Romero. The current charge against Romero also involved inappropriate sexual contact. We conclude that Romero’s prior conviction for sexual assault upon T.N. was sufficiently similar to the sexual assault upon C.S. to satisfy the first requirement of the modified Just rule.

PROBATIVE VALUE OUTWEIGHS THE PREJUDICIAL EFFECT

Romero asserts that the incidents with T.N and C.S. were so dissimilar that to allow the jury to hear evidence of his conviction for sexual assault upon T.N. was unfairly prejudicial to Romero. In McKnight, we recognized that mere prejudicial effect is not a sufficient reason to refuse admission of prior acts evidence. Moreover, probative evidence will frequently be prejudicial to a party. See McKnight, 820 P.2d at 1283-84 (citing State v. Paulson (1991), 250 Mont. 32, 817 P.2d 1137).

In the present case, the testimony of T.N. was clearly prejudicial, but because it satisfies the other requirements of the modified Just rule, such prejudice alone is not a sufficient reason to refuse admission. McKnight, 820 P.2d at 1284. The jury was properly instructed and admonished regarding the testimony on Romero’s prior crime. T.N.’s testimony established without question the similarity in the assaults upon T.N. and C.S. We conclude that the probative value of the evidence of Romero’s prior crime substantially outweighed the prejudicial effect of admitting it.

We conclude that the evidence of other acts was not inadmissible for any reason argued by the defendant. Accordingly, we hold that the District Court did not abuse its discretion when it admitted evidence of Romero’s prior sexual assault.

The District Court’s judgment and conviction are affirmed.

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


text:
    MARSHA L. KIRCHNER, Plaintiff and Appellant, v. WESTERN MONTANA REGIONAL COMMUNITY MENTAL HEALTH CENTER, INC., RIVER HOUSE PROGRAM; JOHN LYNN, Director of River House Program; MELINDA MASON; CYNTHIA DONOVAN; BRENDA BRAZINGTON; and PETER ROPP, Defendants and Respondents.
    No. 93-015.
    Submitted on Briefs May 20, 1993.
    Decided October 21, 1993.
    50 St.Rep. 1299.
    261 Mont. 227.
    861 P.2d 927.

      For Appellant: Marsha L. Kirchner, Pro Se, Missoula.
    For Defendants and Respondents: James A Haynes, Hamilton.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

Marsha L. Kirchner appeals from an order of the District Court for the Fourth Judicial District, in Missoula County, in which the court set a hearing to determine whether its previous order dismissing her cause of action with prejudice should be set aside or amended. We dismiss the appeal, and remand to the District Court for a hearing on Kirchner’s motion to set aside the order of dismissal.

The dispositive issue is whether this Court has jurisdiction to consider Kirchner’s appeal.

On February 14, 1992, Marsha L. Kirchner filed a complaint against the defendants to recover damages which she alleged were caused by discriminatory hiring practices. Kirchner subsequently filed a motion to compel discovery which was denied by the District Court in an order dated August 27,1992.

The defendants then filed a motion for partial summary judgment dismissing three counts of Kirchner’s complaint. By order dated October 7,1992, the court granted summary judgment in favor of the defendants and dismissed two of these counts, but refused to dismiss the third count.

Kirchner retained counsel in September 1992. Prior to that time she had represented herself. Atrial date was scheduled for November, however, on November 10,1992, counsel for the parties stipulated to, and the court ordered, the dismissal of Kirchner’s cause of action with prejudice. Kirchner did not appeal from this order. On November 12, 1992, she filed a pro se motion in the District Court requesting the court to set aside the order of dismissal. Her motion was based on allegations that her attorney had acted without her permission and against her wishes when he stipulated to the dismissal. She also filed two notices of appeal in the District Court on November 17, 1992, appealing from the court’s earlier orders in which her motion to compel discovery was denied and the defendants’ motion for partial summary judgment was granted.

In response to Kirchner’s motions, the court issued its opinion and order on November 23, 1992. It treated her appeals as motions to reconsider and, in both instances, found nothing to constitute excusable neglect for the late filings. Therefore, the motions to reconsider were denied. In regard to her motion to set aside the order of dismissal, the court concluded that it was unclear whether Kirchner’s counsel had the authority to dismiss the cause with prejudice and if Kirchner should be bound by this stipulation. Therefore, the court set a hearing for December 15,1992, to determine if the order of dismissal should be set aside or amended.

Kirchner appealed from the District Court’s November 23, 1992, order on December 3,1992, which was prior to the scheduled hearing. The court subsequently vacated the hearing on the basis that Kirchner’s appeal to the Supreme Court divested it of further jurisdiction in the action.

Montana’s Rules of Appellate Procedure make clear that appeal can be taken only from a final judgment or a special order made after final judgment. Rule 1, M.R.App.P. A final judgment is one in which there has been a final determination of the rights of the parties, and any decree which leaves matters undetermined is interlocutory in nature and is not a final judgment for purposes of appeal. Rule 54(a), M.R.Civ.P.; In re Marriage of Griffin (1993), [260 Mont. 124], 860 P.2d 78, 50 St. Rep. 945; Heater v. Boston & Montana Corporation (1929), 84 Mont. 500, 277 P. 11. Once a final judgment has been entered, all nonappealable intermediate orders or decisions, to which there has been a proper objection, are reviewable on appeal from the final judgment. Brown v. Midland National Bank (1967), 150 Mont. 422, 435 P.2d 878.

In this instance, the November 23, 1992, order is clearly not a final judgment. The court did not rule on Kirchner’s motion to set aside the dismissal, but scheduled a hearing in order to consider the parties’ arguments. That order was interlocutory in nature because no final determination of the rights of the parties had been made. Therefore, because the November 23, 1992, order is not a final judgment from which appeal can be taken, Kirchner’s appeal to this Court is premature. An appeal which is premature must be dismissed for lack of jurisdiction. In re Marriage of Rex (1982), 199 Mont. 328, 649 P.2d 460.

We decline Kirchner’s request to have this Court exercise supervisory control. The District Court properly attempted to address the issue of whether Kirchner should be bound by her attorney’s stipulation. Resolution of that issue requires a factual record which was not established due to Kirchner’s premature appeal. This appeal is dismissed, and we remand to the District Court for the hearing previously scheduled and final disposition of Kirchner’s November 12,1992, motion.

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