text:
    SERVICE FUNDING, INC., a Montana corporation, Plaintiff and Appellant, v. ROGER L. CRAFT, Norma J. Craft, Joe W. Berry, and First Security Bank of Bozeman, a corp., Defendants and Respondents.
    No. 88-203.
    Submitted on Briefs Sept. 15, 1988.
    Decided Nov. 1, 1988.
    763 P.2d 1131.

      Dunaway, O’Connor & Moe, Stewart R. Kirkpatrick, Billings, for plaintiff and appellant.
    Morrow, Sedivy & Bennett, Edmund P. Sedivy, Jr., Bozeman, for defendants and respondents.
   MR. JUSTICE WEBER

delivered the Opinion of the Court.

Service Funding, Inc., (Service Funding) brought an action to recover $28,802.38 on a note secured by a second mortgage from the Crafts on property in which First Security Bank (First Security) also had a security interest. The District Court for the Eighteenth Judicial District, Gallatin County, sitting without a jury, denied Service Funding’s request for relief. We affirm.

The issues are:

1. Did First Security Bank have a fiduciary duty to Service Funding, and if so, was that duty breached?

2. Did the District Court err in failing to subordinate advances made to the Crafts by First Security Bank to Service Funding’s mortgage?

3. Did the District Court err in failing to grant recovery to Service Funding by ordering foreclosure of the Crafts’ second mortgage?

In 1982, the defendant Joe Berry sold a life insurance policy to Roger Craft. To pay the premium, Mr. Craft obtained a loan from Service Funding, which was guaranteed by Mr. Berry. Mr. Craft did not repay the loan when due, but instead offered Service Funding a security interest in certain real property to secure payment. Service Funding agreed, and took a second mortgage in several proposed condominium units which were being developed by Mr. Craft for resale in the Baxter Hotel in Bozeman, Montana. The District Court found that Mr. Craft told Service Funding of First Security’s prior mortgage on all of the units. Mr. Craft also disclosed the fact that many of the units were not finished, and that additional funds would be needed from First Security to complete the units for sale.

First Security consented to the arrangement, and all parties understood that First Security was authorized to apply proceeds from the sale of the units first against its loan and then against Service Funding’s second mortgage. At that time, First Security’s unpaid balance was $92,963.96 plus interest.

The District Court found that Service Funding had not adequately searched the county records, and therefore did not learn that the bank was authorized to make additional advances to the Crafts up to $50,000.00 over the face amount of the note, or a total of $142,963.96. Subsequently, First Security made additional advances to the Crafts for the completion of the units in the following amounts:

April 6, 1983 .........................$29,924.16
July 19, 1984........................... 1,976.15
November 29, 1984 .................... 25,000.00

The District Court found that First Security did not exceed its authority to make advances since Mr. Craft had made payments against the principal. The proceeds from all sales of units which occurred during this time were applied to the obligation to First Security. No money was applied to Service Funding’s mortgage, nor was Service Funding notified of the advances made by First Security to Mr. Craft.

Service Funding filed suit against the defendants, claiming that it should not be subordinated to First Security’s advances, that First Security had mishandled the account, and that First Security had breached its duty as trustee. The District Court concluded that Service Funding’s mortgage was subordinate to First Security’s advances under its Deed of Trust and that First Security had breached no fiduciary duty to Service Funding. The court also denied Service Funding judgment against the Crafts and did not order foreclosure of its second mortgage, although it held the underlying indebtedness and security agreement against the Crafts to be in full force and effect, subject to First Security’s prior lien. Service Funding appeals the judgment.

I

Did First Security Bank have a fiduciary duty to Service Funding, and if so, was that duty breached?

Service Funding argues that an agency relationship existed between it and First Security, and that as an agent, the bank had a fiduciary duty to act in good faith and for the benefit of its principal. Service Funding asserts the doctrine of principal-agent before this Court as if it were a decisive issue at the trial court level. We will not consider the agency issue since it was not raised before the District Court, nor were any findings made regarding an agency relationship. This Court has said many times that alleged error as to issues not raised in the trial court will not be considered on appeal. Chadwick v. Giberson (Mont. 1980), [190 Mont. 88,] 618 P.2d 1213, 1215, 37 St.Rep. 1723, 1726.

Service Funding did contend in the pretrial order that First Security “became a trustee for the benefit of the plaintiff and has breached its obligations as said trustee by misapplication of the proceeds of sales of the condominiums.” The District Court responded to this issue in its Conclusion of Law #2 which states in part that the bank breached no fiduciary duty. On appeal, Service Funding is attempting to have us review the District Court’s conclusion, but would have us apply the law of agency in addition to that which was presented to the District Court. This Court is unwilling to determine the existence of an agency relationship for the first time on appeal.

In reviewing whether the District Court erred in concluding that First Security breached no fiduciary duty to Service Funding, we will not overturn that finding unless it is shown to be clearly erroneous. Rule 52(a), M.R.Civ.P. Service Funding contends that the bank’s fiduciary obligation to properly apply sale proceeds of each condominium arose when the supplemental agreement granting the second mortgage was agreed upon. Service Funding argues that the bank was obligated to notify it of condominium sales and the future advances made. Since the bank did not do so, and applied sale proceeds to advances made rather than to the second mortgage, Service Funding contends that the fiduciary duty was breached.

The District Court found no evidence to establish a fiduciary relationship, whether based on the bank’s knowledge of Service Funding’s second mortgage, or otherwise. Rather, the District Court’s findings indicate that it was Service Funding’s obligation to discover the existence and extent of the future advance clause. The record discloses that Service Funding should have investigated more thoroughly the details of First Security’s agreement with the Crafts prior to entering this arrangement. Had Service Funding done so, it would have been aware of the bank’s authority to extend more money to the Crafts and apply proceeds to its deed of trust before paying off the second mortgage. The role of First Security was to help Mr. Craft finance the remodeling of the condominium units to completion. Unless the bank extended money to Mr. Craft, the units would have remained unfinished, would not have sold, and neither First Security nor Service Funding would have begun to realize any of the money owed them by the Crafts. We hold that the record supports the District Court’s finding that First Security breached no fiduciary duty to Service Funding.

II

Did the District Court err in failing to subordinate advances made to the Crafts by First Security to Service Funding’s mortgage?

Service Funding contends that First Security failed to give actual or constructive notice of the extent of its future advance clause, in violation of Section 71-1-206, MCA, which states that;

“(1) The amount of future advances or total indebtedness that may be outstanding at any given time and subject to mortgage protection must be stated in the mortgage . . .”

Because of First Security’s alleged failure to comply with the above statute, Service Funding argues that future advances made under the bank’s first mortgage must be subordinated to Service Funding’s second mortgage, and that the District Court erred in concluding otherwise. Again we will not overturn that conclusion unless an abuse of discretion is shown.

The future advance clause appears in paragraph 21, page 4, of First Security’s Deed of Trust, which states that the principal amount shall not exceed the original amount of the note plus $50,000.00. The Deed of Trust was referred to in both the mortgage from the Crafts to Service Funding and the supplemental agreement to Service Funding’s mortgage and promissory note. We conclude that this evidence is sufficient to affirm the District Court’s conclusion that Service Funding had knowledge of the existence of First Security’s Deed of Trust prior to receiving its second mortgage. It then became the duty of Service Funding to request a copy of the Deed of Trust to determine the actual terms of the instrument, including any future advance clause. Angus v. Mariner (1929), 85 Mont. 365, 369, 278 P. 996, 998.

Service Funding next argues that because only page 1 of the Deed of Trust was recorded, it was not on notice of the future advance clause which appeared at page four. This argument must also fail. Section 70-21-302, MCA, states that, “Every conveyance of real property . . . recorded as prescribed by law ... is constructive notice of the contents thereof to . . . mortgagees.” Section 70-21-305, MCA, states that, “An abstract of a conveyance . . . recorded as prescribed by law . . . shall have the same effect ... as if the conveyance or encumbrance of real property had been acknowledged or proved and certified and recorded as prescribed by law.” The first page of the Deed of Trust reads in relevant part:

“To secure to Lender (a) the repayment of the indebtedness evidenced by Borrower’s note of even date herewith (herein ‘Note’), in the principal sum of $92,963.96 Dollars, with interest thereon, providing for monthly installments of principal and interest, with the balance of indebtedness, if not sooner paid, due and payable on January 31, 1984; the payment of all other sums, with interest thereon, advanced in accordance herewith to protect the security of this Deed of Trust; and the performance of the covenants and agreements of Borrower herein contained; and (b) the repayment of any future advances, with interest thereon, made to Borrower by Lender pursuant to paragraph 21 hereof (herein ‘Future Advances’). (Emphasis added.)”

We conclude that the recording of page 1 of the Deed of Trust as an abstract of conveyance gave Service Funding constructive notice of its contents and terms, including the future advance clause.

Finally, Service Funding argues that advances totaling $45,012.16 which were made to the Crafts after the maturity dates on the two original notes significantly diminished the value of the second mortgage without Service Funding’s knowledge. Even if Service Funding incurred damage or an increased risk of loss as a result of the future advances, this argument must fail given the priority of First Security’s Deed of Trust. The District Court correctly concluded that First Security had priority not only as to the previous sale proceeds, but to the remaining collateral as well.

Ill

Did the District Court err in failing to grant recovery to Service Funding by ordering foreclosure of the Crafts’ second mortgage?

Service Funding contends that the District Court should have ordered foreclosure of the second mortgage against the Crafts pursuant to the language of the second mortgage, which allows foreclosure in the event of default. In view of the priority granted to First Security, this argument is without merit since no default has occurred.

We affirm the judgment of the District Court.

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


source: Caselaw Access Project

author: MR. JUSTICE SHEEHY MR. CHIEF JUSTICE TURNAGE

license: Public Domain

text:
    The STATE OF MONTANA, EX REL., TAMMY L. LEACH and Craig S. Leach, Gregory Leach, and Susan Leach, Petitioners and Appellants, v. WILBUR VISSER, Jane Jelinski, and Ramon S. White, The Gallatin County Commissioners, Respondents and Respondents.
    No. 88-211.
    Submitted on Briefs Aug. 11, 1988.
    Decided Nov. 1, 1988.
    Rehearing Denied Feb. 3, 1989.
    767 P.2d 858.

      Eula Compton, Bozeman for petitioners and appellant.
    A. Michael Salvagni, Co. Atty., Bozeman, James D. McKenna, Deputy Co. Atty., for respondents and respondents.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

State law permits a single division of a parcel of land outside of platted subdivisions without a local subdivision review when the transaction is an occasional sale. An “occasional sale” means one sale of a division of land within any 12 month period. State law also limits a single division of a parcel of land if “the method of disposition is adopted for the purpose of evading” local subdivision review. Gallatin County has adopted Subdivision Regulation 2.b.(3)(b) to the effect that an occasional sale is an evasion of local subdivision review if “a parcel contiguous to the parcel to be transferred has been previously transferred by the same transferor as an occasional sale.”

Tammy Leach proposed a division of a certain Tract 14 as an occasional sale. The tract of the proposed division was contiguous to a tract which had earlier been transferred as an occasional sale to Tammy Leach. On that basis, the District Court, Eighteenth Judicial District, Gallatin County, determined that the attempted division of Tract 14 did not qualify for an occasional sale of land and was not, therefore, exempt from local subdivision review. The District Court denied a petition for a peremptory writ of mandamus.

We determine here that Gallatin County Subdivision Regulation 2.b.(3)(b) directly conflicts with the provisions of Section 76-3-207, MCA, permitting single divisions of land parcels outside of platted subdivisions when they qualify as occasional sales. We therefore reverse and remand this cause with directions to the District Court to issue a writ of mandate to the respondents to permit the proposed division of land.

The findings of fact of the District Court adequately describe the problem. In 1981, the Leach family purchased 265 acres of land in Gallatin County. A 20-acre tract within the purchase, Tract 12, was divided without subdivision review in 1983 into two 10-acre tracts. Tract 12B was conveyed away. In 1984, Tract 13 was divided without local subdivision review into two 10-acre tracts and Tract 13A was conveyed away. In May, 1985, petitioner Tammy Leach acquired Tract 13B. In 1984, the Leach family conveyed Tract 14 to Craig, Don, Gloria and Tammy Leach. Later, in 1984, Tract 14 was sold to petitioners Gregory and Susan Leach. The present controversy involves an attempt to divide Tract 14. Petitioner Tammy Leach would become the owner of Tract 14A. In 1986 the proposed division of land of Tract 14A to Tammy Leach was rejected by the County Commission because the proposed transfer was contiguous to the transfer of Tract 13B; and so under the Gallatin County subdivision regulations did not qualify as an “occasional sale.” Another request for the transfer of Tract 14A to Tammy Leach was considered by the County Commission and denied in February, 1987.

The decision of the County Commission not to approve the division of land proposed by the Leaches was conveyed to them by a letter signed by the Commissioners, dated February 25, 1987. The letter recited the history of the transfers of the tracts as above enumerated and pointed out that the county subdivision rules “do not allow a parcel contiguous to the parcel to be transferred if it has been previously transferred by the same transferor as an occasional sale.” Based on that history, the Commission “determined that the method of disposition of the land was adopted for the purpose of evading the requirements of Title 73, Ch. 2, Pt. 2, MCA (the local subdivision review requirements).

The petitioners filed an action in the District Court for a writ of mandate directing the County Commission to permit the division of land as proposed. The District Court, after entering findings of fact and conclusions of law, denied the petition for peremptory writ of mandamus on January 23, 1988. From that order of denial the petitioners have appealed to this Court.

The issues presented by the Leaches are:

1. In accordance with Sections 76-3-207 and 76-3-103(7), MCA, a landowner may enter into one occasional sale each and every year without the sale or a series of sales being deemed subject to local subdivision review.

2. The Gallatin County Subdivision regulation is void as eliminating the statutory exemption for occasional sales.

3. Gallatin County’s subdivision regulations violate the Montana and United States Constitutions.

In answer, the Commission contends that: (1) the Gallatin County subdivision regulations are reasonable and not in conflict with state law; (2) the County Commission is given discretion to determine whether a proposed division of land is for the purpose of evading the Subdivision and Platting Act; and, (3) the constitutional arguments should not be considered because they were not presented in the District Court.

The principal issue in this case is controlled by our decision in State of Montana ex rel. Swart v. Casne, et al. (1977), 172 Mont. 302, 564 P.2d 983. In that case, the same provisions now contained in Section 76-3-207, MCA, and Section 76-3-103(7), MCA, were involved, though contained in earlier numbered statutes. In that case, Gallatin County had adopted a regulation to the effect that the exemption contained in [Section 76-3-207] did not apply to the resubdivision or redesign of a subdivision platted or filed with the clerk and recorder. Swart owned five lots in a platted subdivision which he had proposed to divide by drawing a straight line dividing each lot into substantially equal parts, and transferring one of the halves as an occasional sale of the property. His proposal was denied by the County Commission, and he applied to the District Court for a writ of mandate, directing the Commission to permit the division. The District Court granted a writ of mandate, and the decision was affirmed on appeal to this Court. In affirming, this Court said:

“These regulations are in direct conflict with the provisions of the Subdivision and Platting Act heretofore set forth in Section [76-3-207]. They eliminate the statutory exemption as applied to ‘resubdivisions or redesign’ of platted and recorded subdivisions. They require an amended plat reviewed and approved by the governing body to be filed with the clerk and recorded in direct contradiction to the statutory exemption. They engraft additional and contradictory requirements on the statute in the guise of implementing the evasion of statutory requirements. They frustrate the purpose of the ‘occasional sale’ exemption of the Act. As such, the . . . regulations are void on their face. See Bartels v. Miles City, 145 Mont. 116, 399 P.2d 768. It is axiomatic that a statute cannot be changed by administrative regulation. See Begay v. Graham, 18 Ariz. App. 336, 501 P.2d 964.”

172 Mont. at 308, 564 P.2d at 986.

In this case, we are faced with the exact problem that came before this Court in Swart. Here, the earlier divisions of tracts qualified as occasional sales because more than 12 months elapsed between each division of the parcels. In the case directly before us, the transfer to Tammy Leach has been refused because it is contiguous to a tract that had earlier qualified as an occasional sale, although in the present case, more than a year has elapsed from the time of the earlier transfer. The effect of the contiguous tract provision in the Gallatin County Subdivision Regulations is, in the words of Swart, to “engraft additional and contradictory requirements on the statute in the guise of implementing the evasion of statutory requirements.” The Gallatin County regulation is therefore impermissible because, in the language of Swart:

“This grant of authority does not include the right to promulgate regulations in direct conflict with the Act. Where, as here, the Act provides for exemption of occasional sales from the subdivision requirements, DCA cannot prescribe subdivision regulations eliminating the exemption for the reasons heretofore stated. An administrative agency is not a “super legislature” empowered to change statutory law under the cloak of an assumed delegated power.”

172 Mont. at 308-09, 564 P.2d at 986.

For the same reasons, the contention of the County Commission that it has discretion to determine whether the method of disposition is adopted for the purpose of evading Section 76-3-207, MCA, has no merit. Plainly, under our statutes, a landowner is permitted a single division of a parcel outside of a platted subdivision if the division and any other -division do not occur within any 11 month period. The County Commission has no discretion to deny a division of land if the landowner otherwise complies with the exemptions provided to him under the statutes for a single division of land.

There is no need to address the constitutional issues raised by the Leaches since we determine that the county regulation is void.

The Commission, however, further contends that a declaratory judgment rather than a writ of mandate is a proper remedy in this cause. The County Commission points to decisions in other states which hold that a declaratory judgment action is a proper method of challenging a zoning ordinance and that a writ of mandamus in this case is inappropriate since the county had no legal duty to disregard its own regulations. Again, this contention was answered in Swart:

“Here there was a clear legal duty the defendants were required to perform for the reasons heretofore stated. A declaratory judgment action would not necessarily get the certificate of survey filed in the light of previous difficulties between petition and the clerk and recorder in getting such certificates filed as evidenced in State ex rel. Swart v. Stuckey, supra. A declaratory judgment action would not make petitioner whole as attorneys fees are not allowable in such an action. A writ of mandate is the only remedy available to secure the ultimate relief sought by the petitioner — to compel the lifting of sanitary restrictions, the filing of a certificate of survey, and an award of relator’s attorney fees.”

172 Mont. at 309, 310, 564 P.2d at 987.

In order for the petitioners to obtain complete relief, a writ of mandate is proper in this cause. Accordingly, we reverse and remand to the District Court with instructions to issue a writ of mandate directed to the County Commission to permit the division of land as proposed by Tammy Leach, and for such other relief as may be appropriate for a writ of mandate in this cause.

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

OPINION AND ORDER ON PETITION FOR REHEARING

MR. CHIEF JUSTICE TURNAGE

delivered the Order and Opinion on Petition for Rehearing.

County Commission of Gallatin County has petitioned for rehearing of our opinion promulgated November 1, 1988, on the grounds that the opinion is in conflict with an earlier decision of this Court, Withers v. Beaverhead County (Mont. 1985), [218 Mont. 447,] 710 P.2d 1339, 42 St.Rep. 1730 and that language in our opinion of November 1, 1988, eliminates the discretion of a county commission to determine if a propose division of land is an attempt to evade subdivision review.

The Attorney General, appearing on behalf of the State of Montana as amicus curia, supports the petition for rehearing, contending that the Gallatin County regulation was properly found by this Court to be void, but that certain language in our opinion is extraneous to the decision and that the extraneous language is contrary to controlling Montana case law. Several county attorneys, acting for their respective counties, join the State’s brief. They are the county attorneys from Missoula County, Flathead County, and Lewis and Clark County. In addition, Flathead County has filed a supporting amicus curia brief, and a response to the amicus curia brief for the State of Montana, the latter directed to a fear that the State may have conceded in its amicus brief that under all situations the local governing body would be deemed to be abusing its discretion in denying the use of an occasional sale exemption if that exemption were proposed only once during a twelve-month period on a division of land.

The respondents have filed a responsive brief contending that the petition for rehearing is groundless.

For ease of reference, we set out the Gallatin County subdivision regulation in question:

“b. Exemption as an occasional sale.
“(1) An occasional sale is one (1) a sale of a division of land within any 12-month period. The 12-month period commences upon sale of the division of land.
“(2) The proper use of an occasional sale exemption is to create a single division of a parcel from any tract or from continuous tracts of land.
“(3) The governing body shall declare a proposed division of land as an occasional sale to be an evasion of the act if it is determined that one or more of the following conditions exist:
“(a) the proposed new parcel is part of a parcel which was created under the occasional sale or family conveyance exemption of the act; or
“(b) a parcel contiguous to the parcel to be transferred has been previously transferred by the same transferor as an occasional sale; or
“(c) the creation of the proposed parcel would leave 2 or more parcels of less than 20 acres.”

The pertinent statutory provision to which the Gallatin County subdivision regulations relate are these:

“76-3-207 .... unless the method of disposition is adopted for the purpose of evading this chapter, the following division of land are not subdivisions under this chapter . . .
“(d) a single division of parcel outside of platted subdivisions when the transaction is an occasional sale; . . .
“76-3-103. Definitions. As used in this chapter, unless the context or subject matter clearly requires otherwise, the following words or phrases shall have the following meanings:
“(7) ‘Occasional Sale’ means one sale of a division within any 12-month period.”

In this case, Tammy Leach proposed a division of a certain tract 14 as an occasional sale. The tract of the proposed division was contiguous to a tract which had earlier been transferred as an occasional sale to Tammy Leach. The “governing body,” the county commission of Gallatin County, determined that since the parcel is contiguous to a parcel which had earlier been transferred by the same transferor as an occasional sale, under the Gallatin County regulation the Tammy Leach proposal did not qualify as an occasional sale and so the division was denied. More than a year had elapsed from the time of the earlier transfer.

It is obvious that the Gallatin County subdivision regulation which sets out a per se or automatic rule to determine when a proposed division of land is an evasion of the act engrafts additional and contradictory requirements on the statute providing for occasional sales without regard to whether the purpose of the proposed divider is to evade subdivision review. As such the regulation is void. All of the amici appearing herein (but not Gallatin County) concede that the regulation is void and that mandamus is proper in the premises. What they seek, however, is to have us delete from our opinion of November 1, 1988, the following language:

“For the same reasons, the contentions of the county commission that it has discretion to determine whether the method of disposition is adopted for the purpose of evading Section 76-3-207, MCA, has no merit. Plainly, under out statutes, a landowner is permitted a single division of a parcel outside of a platted subdivision if the division and any other division do not occur within a 12-month period. The county commission has no discretion to deny a division of land if the landowner otherwise complies with the exemptions provided to him under the statutes for a single division of land.”

All of the amici contend that the foregoing paragraph takes away from the county commissioners the power to determine whether in fact a proposed division of land submitted as an occasional sale or under some other exemption of the act is an evasion of subdivision review. Such was not our intention, and the point requires discussion.

There is an inherent conflict between the statutory allowance of an occasional sale without subdivision review, and the condition “unless a method of disposition is adopted for the purpose of evading this chapter.” A landowner proposing to divide land under the occasional sale exemption obviously contemplates avoiding subdivision review by the governing body. Whether such an avoidance is for the purpose of evasion is quite another factual question. We have no direct guidance from the legislature through its statutes to determine the difference between avoidance and evasion.

In Withers v. Beaverhead County, supra, this Court had before it a situation where Barbara Withers attempted to deed property to her daughter Amy Withers under the immediate family exemption of Section 76-3-207(b), MCA. When her deed and certificate of survey were rejected by the county authorities, she sought mandamus in the district court. The district court considered the earlier history of the family pertaining to land divisions, determined that the proposed division to the daughter was for the purpose of evading subdivision review, and denied mandamus. This Court on appeal held that there was no abuse of discretion by the county commission in so determining, and therefore denied mandamus. 710 P.2d at 1339, 1341.

In this difficult field, the word “discretion” is itself a confusing term. It can have two meanings, as discussed by this Court in Kujich v. Lillie, 127 Mont. 125, 137-38, 260 P.2d 383. There we said:

“Discretion. The term ‘discretion’ denotes the absence of a hard and fast rule, (citing a case)
“The establishment of a clearly defined rule would be the end of discretion, (citing authority)
“1 Bouvier’s Law Dictionary, Rawle’s 3rd Rev., p. 884, has defined ‘discretion’ in part as: ‘That part of the judicial function which decides questions arising in the trial of a cause, according to the particular circumstances of each case, and as to which the judgment of the court is uncontrolled by fixed rules of law.’
” ‘ ’’Discretion when applied to a court of justice means sound discretion guided by law.” 4 Burr. 529. Judicial discretion is a mere legal discretion — a discretion in discerning the course presented by law; and what has been discerned it is the duty of the court to follow. (citing authority) ... “A legal discretion is one that is regulated by well known and established principles of law.” (citing authority)’
“ ’ “But if the word discretion in this connection [injunction] is used in a secondary sense, and by it is meant that the chancellor has the liberty and power of acting, in finally settling property rights, at his discretion, without the restraint of the legal and equitable rules governing those rights, then I deny such power.”' (citing authority).”

The use of the term “discretion” by the author of our opinion of November 1, 1988, in the case at bar, and by this Court in Withers, supra, may have been unfortunate. What is really meant is that the governing bodies have the power and duty to evaluate and determine from all the circumstances whether the proposed division of land is based on a purpose to evade the subdivision requirements. The Attorney General recognized this distinction in an opinion issued by him on July 20, 1983 (40 Opinions A.G. No. 16) in response to a question from the city attorney of Missoula where a developer had completed and submitted for filing a fourth certificate of survey dividing a tract into five lots, four of which were to be conveyed as occasional sales, and the question asked was, whether under these facts, are the claimed “occasional sales” subject to review under the act on the grounds that the exemptions are claimed”for the purpose of evading” the act.

The Attorney General answered in part:

“. . . I have consistently declined to address such questions in the context of an advisory opinion. However, to assist you in analyzing the issue I offer the following observations. As a statute promoting public health and welfare, the Subdivision and platting Act must be literally construed to effectuate its object. Its exemptions must be narrowly applied. State ex rel., Florence Carlton School District v. Board of County Commissioners, 180 Mont. 285, 291, 590 P.2d 602, 605 (1978). A local government may legitimately require one claiming an exemption from the Act’s requirements to make some evidentiary showing that the exemption is justified ... It would also be legitimate for the local government to establish by rule some sort of hearing procedure to allow the local government to evaluate the evidentiary basis for the claimed exemption and to allow or disallow it .... In contrast, a regulation establishing procedures for evaluation of a claimed exemption gives substance to the Act’s policy of local government control of land use and is certainly consistent with the Act’s requirements.”

Evaluation and determination of a factual issue is different from “discretion.” Since the legislature has provided that the occasional sale exemption is subject to the condition that it not be for the purpose of evading subdivision review, a determination (not discretion) by a governing body based on stated facts which show such a purpose is within the power of the governing body. This Court has never intended otherwise.

Based on the foregoing discussion therefore we eliminate from our original opinion the paragraph objected to by the county commission and by amici. Aside from that exception, the opinion as originally promulgated stands as issued. The petition for rehearing is otherwise denied.

MR. JUSTICES SHEEHY, HARRISON, HUNT, GULBRANDSON, WEBER and McDONOUGH concur.


author: MR. JUSTICE WEBER

text:
    RANDALL M. RUDOLPH, Plaintiff and Appellant, v. ANN DUSSAULT, et al., Defendant and Respondent.
    No. 88-361.
    Submitted on Briefs Sept. 23, 1988.
    Decided Nov. 1, 1988.
    763 P.2d 1139.

      Randall M. Rudolph, Warm Springs, pro se.
    Robert L. Deschamps, III, Co. Atty., Missoula, Michael Sehestedt, Deputy Co. Atty., for defendant and respondent.
   MR. JUSTICE WEBER

delivered the Opinion of the Court.

Mr. Rudolph appeals from the dismissal with prejudice of his pro se complaint by the District Court for the Fourth Judicial District, Missoula County. We affirm as modified in this opinion.

The issue is whether the District Court erred in dismissing Mr. Rudolph’s complaint on its own motion.

Mr. Rudolph was arrested, tried, and convicted on charges of robbery. While he was awaiting sentencing following that trial, he commenced this civil action. We are unable to determine with certainty the specific allegations of the complaint because the original district court file has been lost. However, from the materials we have before us it appears that the complaint alleged that the defendants, listed as “city commissioners”, the “unknown” chief of police, and 2 “unknown” city police officers, allowed Mr. Rudolph’s constitutional rights to be violated during and immediately following his arrest. Mr. Rudolph claimed insufficient grounds for arrest, an unconstitutional line-up, and inadequate investigation of the crime with which he was charged. Although Mr. Rudolph filed his complaint with the District Court, there is no indication that he ever served or gave any notice of the complaint to the persons named as defendants. The court dismissed the complaint on its own motion four months after it was filed.

Did the District Court err in dismissing Mr. Rudolph’s complaint on its own motion?

In dismissing Mr. Rudolph’s complaint, the District Court stated that on its face, the complaint was “frivolous and fails to state any cognizable cause of action.” The District Court did not explain its reasoning further. The record concerning Mr. Rudolph’s criminal conviction is now before this Court on appeal and we have taken notice of that record.

The individuals listed by name as defendants in this suit were, at the time of this action, county commissioners of Missoula County. The complaint does not allege any connection between county commissioners and the action of city police which is claimed to have deprived Mr. Rudolph of his rights. We conclude that as to Ann Dussault, Barbara Evans, and Janet Stevens, dismissal with prejudice was proper.

As to the remaining defendants, we recognize that Mr. Rudolph is appearing pro se and will not be held to the standards of pleading expected of attorneys. Though it does not expressly name the statute, Mr. Rudolph’s complaint, broadly viewed, states a cause of action under 42 U.S.C. Section 1983 for violation of civil rights. In such a case, collateral estoppel applies as to previous criminal proceedings. Allen v. McCurry (1980), 449 U.S. 90, 101 S.Ct. 411, 66 L.Ed.2d 308. Collateral estoppel is the doctrine that issues previously argued and ruled upon cannot be relitigated. Aetna Life and Cas. Ins. Co. v. Johnson (1984), 207 Mont. 409, 414-16, 673 P.2d 1277, 1280-81. Mr. Rudolph’s claims may be barred under a theory of collateral estoppel as a result of the decision in the criminal proceeding against him.

The District Court in which this action was filed was the court which had heard the criminal case. It could properly take judicial notice, as have we, of that matter. However, since Mr. Rudolph’s criminal conviction is on appeal before this Court, we conclude that dismissal of his complaint with prejudice was premature.

We hold that although the matters raised in the complaint may be barred by collateral estoppel, the dismissal with prejudice was not proper. We amend the dismissal to provide as to all parties a dismissal without prejudice. We admonish Mr. Rudolph that he is required to have an adequate basis for the filing of another complaint.

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


author: MR. CHIEF JUSTICE TURNAGE

text:
    KATHRYN ANN NELSON, Plaintiff and Respondent, v. FAIRMONT HOT SPRINGS RESORT, INC., Defendant and Appellant.
    No. 88-378.
    Submitted on Briefs Oct. 6, 1988.
    Decided Nov. 1, 1988.
    763 P.2d 1135.

      Ross P. Richardson, Henningsen, Purcell, Vucurovich and Richardson, Butte, for defendant and appellant.
    Clinton H. Kammerer, Missoula, for plaintiff and respondent.
   MR. CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Fairmont Hot Springs, Inc. (Fairmont), appeals an order of the Second Judicial District, Silver Bow County, setting aside a jury verdict for the defendant and ordering a new trial for plaintiff Kathryn Nelson (Nelson) on her personal injury suit.

The issues on appeal are as follows:

1. Did the District Court abuse its discretion by setting aside the jury verdict in favor of the defendant because there was substantial credible evidence in the record to support the verdict?

2. Did the District Court err in failing to give Defendant’s Proposed Instruction No. 24 on subsequent injuries and damages?

3. Does the 45-day limit imposed by Rule 59, M.R.Civ.P., apply to plaintiff’s post-trial motions after remand by this Court directing the District Court to reconsider those motions?

We reverse.

Nelson was on the Fairmont premises on December 30 and 31, 1984, while visiting relatives, who leased a Fairmont time-share condominium. After dinner and drinks, Nelson and her companions decided to go swimming in the Fairmont pools. Fairmont closes its pools to the general public at 10:00 p.m. However, hotel guests and condominium owners can still access the pools with a special key. It was just after midnight when they accessed the pools with one of these keys.

After swimming indoors for a short time, they decided to go outside to the outdoor pool to experience the cold. Although it was a cold December evening, near zero degrees, the Nelson party wanted to swim in the outdoor heated pools while experiencing the cold weather around them, and they went outside for this express purpose.

While hurrying back indoors along the pathway leading to the indoor pool, Nelson slipped and fell and injured herself. She made no report to the resort management of her fall and injuries; however, she filed complaint against them on May 5, 1986, and a jury trial was had in September 1987. The jury returned a defense verdict. Plaintiff made post-trial motions for judgment N.O.V. or, in the alternative, for a new trial.

The District Judge ordered a new trial and defendants appealed in October 1987. This Court remanded that appeal on January 12, 1988, with instructions for the trial judge to reconsider those post-trial motions and to make specific findings if either of the motions were granted. It was not until June that the District Court held another hearing and then adopted verbatim plaintiff’s findings of fact and conclusions of law to support a new trial. The findings and conclusions determined that there was insufficient evidence to support the jury’s defense verdict. The court issued an order for a new trial pursuant to Section 25-11-102(6), MCA. We disagree and vacate the District Court’s order granting a new trial.

Because we reverse on Issue 1, there is no need to discuss appellant’s further issues.

I. NEW TRIALS

(a) Standard of Review

The District Court abused its discretion in ordering a new trial because there was substantial credible evidence in the record to support the jury’s verdict.

Granting a new trial is discretionary with the trial judge; however, this discretion is not without limitation. As we stated in Kincheloe v. Rygg (1968), 152 Mont. 187, 191, 448 P.2d 140, 142:

“Although the granting of a new trial for insufficiency of the evidence is a discretionary power of the trial court which will not be disturbed except for abuse of discretion, the trial court’s discretion is exhausted when it finds substantial evidence to support the verdict.”

Thus, if there is substantial credible evidence to support the jury’s verdict, it must stand. Townsend v. State of Montana (Mont. 1987), [227 Mont. 206,] 738 P.2d 1274, 44 St.Rep. 1014.

This Court has defined substantial evidence as any relevant evidence which a reasonable mind might accept as adequate to support a conclusion. State v. Lamb (1982), 198 Mont. 323, 646 P.2d 516. A review of the trial transcript reveals such substantial evidence. The jury which heard the defendant’s testimony determined it to be credible. “If there is conflicting evidence in the record, the credibility and weight given to such conflicting evidence is the province of the jury and not of this Court.” Wilkerson v. School District No. 15, Glacier County (Mont. 1985), [216 Mont. 203,] 700 P.2d 617, 621, 42 St.Rep. 745, 748. The evidence reviewed by this Court must be viewed in a light most favorable to the prevailing party. Gunnells v. Hoyt (Mont. 1981), [_ Mont. _,] 633 P.2d 1187, 1191, 38 St.Rep. 1492, 1495. We will now review the evidence which substantially supports the jury verdict. Because sufficiency of the evidence is the critical question on appeal, a detailed review of the record is necessary.

(b) The Trial Record

Nelson’s complaint alleged that Fairmont was negligent in failing to warn the plaintiff of the hazardous condition on the deck area around the outside pool and by failing to maintain and police the same.

The defendant maintained that it took all reasonable steps to eliminate hazards and adequately warned of any possible hazards. Additionally, it asserted that Nelson assumed the risk of swimming past 10:00 p.m. at night and her accident was caused by her own negligence by swimming after consuming alcohol and by failing to use ordinary care in negotiating the obviously icy pathway. Lastly, the defense contended that the head, neck, back and shoulder injuries suffered by Nelson were not proximately caused by her fall at Fairmont since she was subsequently involved in an altercation in which her nose was broken and then involved in a car wreck which rendered her unconscious.

Testimony at trial was conflicting on some points. This jury, based on the evidence, chose to believe the defendant, and that is their right. The trial judge is not allowed to weigh the evidence on a motion for new trial when conflicting evidence is presented. Lindquist v. Moran (1983), 203 Mont. 268, 662 P.2d 281. Such is the province of the jury. It is an abuse of discretion for the District Court to grant a new trial under the facts of this case. Lindquist, 662 P.2d at 285.

It was clear that guests who swam after 10:00 p.m. did so at their own risk. Ten o’clock p.m. was the time when the lifeguards went off duty and the doors were locked to the general public. There were large signs on the entrance to the pool area and on the door to the outside pool stating this policy.

Dan Klemann, executive assistant at Fairmont, testified regarding the pool facility and procedures of maintenance. He testified that on the roof of the adjacent building there are two 400-watt Mercury vapor lights which light the outdoor walkway to the pool. Pictures of the same were admitted into evidence and given to the jury to show the well-lit view of the walkway.

Jake Maciag, a certified lifeguard employed at Fairmont during the time in question, also testified regarding the specific winter operation of Fairmont’s outdoor pools. After Labor Day, the pool was only open to the general public from 5:00 p.m. to 10:00 p.m. during the week, and from 1:30 p.m. to 10:00 p.m. on weekends. Additionally, doors to the outside pool from the men’s and women’s dressing rooms were sealed and access to the outdoor pool came only from one main door connecting the indoor pools. The door always had a large warning sign on it which read “CAUTION, ICE” or “WATCH FOR ICE.” This door swung out to the pool so that anyone going to the outdoor pool necessarily would have to see the sign.

Additionally, there was a specific procedure for “clearing the path” from the door to the edge of the outdoor pool. Lifeguards would come to work at 1:30 p.m. and immediately clean the pathway from the building to the edge of the outdoor pool. If ice was present, they would use a pump to force hot water onto the area, and the ice would be chipped away by hand, if necessary. Then, the path would be vacuumed. Between 1:30 and 10:00 p.m., lifeguards would maintain the pathway in this manner, policing it every twenty minutes, keeping it free from snow and ice. After the sun went down, it made it more difficult to keep the ice off in the evenings. In that case, rubber-backed mats were thrown over the ice. If these became encrusted with ice, they were also cleaned.

The lifeguards went off duty at 10:00 p.m. At that time, they would place clean mats over the ice and make certain the warning signs were on the door. The pool was closed to the general public at that time and heavy floodlights lit the path making any ice that was present readily visible.

Barbara Barr, the pool manager in 1984, also testified at trial. Barr was a certified lifeguard and she utilized both the Red Cross and the State Department of Health in developing safety procedures for her pool operation. Fairmont was inspected twice a year by officials from the Health Department and met all standards promulgated by the Department and passed on all safety requirements. Additionally, a fire marshal also inspected the premises and was satisfied with its condition and maintenance.

Barr also testified as to why these procedures were enacted as opposed to alternatives. Sand could not be used on this path because it would clog the pool pumps, as would de-icer solutions and rock salt. Additionally, de-icer and rock salt would burn the patron’s bare feet. A canopy overhead to protect from falling snow would block the floodlights, without really curing the problem because the ice on the path also formed from water dripping off the patrons as they walked from pool to pool.

Both Barr and Maciag testified that they had crossed this pathway on numerous occasions without incident and that it was not a hazard, but could be negotiated without problem if the swimmer used care. Both enforced the rules promulgated by Fairmont and neither were aware of any accident on December 31, 1984, because it had not been formally reported.

Two hundred fifty thousand people per year visit the Fairmont resort, and a formal accident reporting procedure is used there. Any injured patrons are requested to report the incident and complete an accident report form. Fairmont’s records show no record of Nelson’s December 31, 1984, accident report.

Plaintiff Nelson testified that she and her companions saw the ice on the pathway in the early morning hours of December 31, 1984, and were aware that it was slippery. All crossed the path safely to enter the outside pool. Plaintiff presented conflicting testimony as to how much alcohol she consumed that night and when. She did not see the warning sign.

Plaintiff also presented expert testimony by Gerry Van Ackeren that the icy conditions of an outdoor pool constituted a substantial hazard to the users of the pool. Plaintiff makes much of the fact that although this evidence was controverted by many Fairmont professional employees, it was not controverted at trial by any qualified expert produced by Fairmont to testify.

There was ice present on the walkway in the early morning hours of December 31, 1984. This condition was open and obvious. Certainly there was a jury question as to whether a hazard existed; whether Fairmont negligently allowed the hazard, if any, to exist; and whether it adequately warned patrons of the possible hazard. The jury was properly instructed on these issues and determined them accordingly based on the foregoing substantial credible evidence. The jury’s verdict of “not negligent” is supported by the evidence of precautionary steps taken and warnings given by Fairmont. This Court will not substitute its judgment for that of the jury when no misconduct or abuse of discretion has been shown. We do not hesitate to reinstate a verdict supported by substantial credible evidence. Nelson v. Hartman (1982), 199 Mont. 295, 648 P.2d 1176.

Based on the lengthy trial record and the foregoing evidence recited, appellant convinces this Court that the District Court abused its discretion by setting aside the verdict and awarding a new trial.

The order granting new trial is vacated. The jury’s verdict of September 22, 1987 is reinstated.

MR. JUSTICES HARRISON, WEBER, McDONOUGH and GULBRANDSON concur.


author: MR. JUSTICE McDONOUGH

text:
    LARRY STERRETT and Gloria Sterrett, Plaintiffs and Appellants, v. MILK RIVER PRODUCTION CREDIT ASSOCIATION, et al., Defendants and Respondents.
    No. 88-239.
    Submitted Sept. 22, 1988.
    Decided Nov. 3, 1988.
    764 P.2d 467.

      See also, 647 F.Supp. 299.
    Theodore K. Thompson, Havre, for plaintiifs and appellants.
    Martin S. King argued, Worden, Thane & Haines, Missoula, John Paul, Alexander & Baucus, Great Falls, for defendants and respondents.
   MR. JUSTICE McDONOUGH

delivered the Opinion of the Court.

This appeal from the Seventeenth Judicial District, in and for the County of Blaine, involves Larry and Gloria Sterrett’s claim in tort against the Federal Intermediate Credit Bank of Spokane (FICBS). We affirm.

Sterretts want damages from FICBS based on the alleged misrepresentations of Sid Boe, an employee of the Milk River Production Credit Association (MRPCA). The District Court granted FICBS’s motion for summary judgment concluding that no agency relationship existed between MRPCA and FICBS, and thus FICBS could not be vicariously liable for the alleged misrepresentations of MRPCA’s employee Boe. We affirm because we find no statutory, express, or implied authority to Boe from FICBS which would bind FICBS for Boe’s actions.

The relevant facts are as follows: Sterretts entered an agreement with Clay McCartney in April of 1980, which provided that Sterretts would farm McCartney’s land. Sid Boe, employee of MRPCA, set up the financing for farming McCartney’s land. From 1980 to 1982, Sterretts borrowed from MRPCA for operating expenses and equipment to farm the land, and McCartney borrowed from MRPCA to pay Sterretts for the farming. During these years McCartney cosigned the note obligating Sterretts. In 1983, McCartney did not cosign for Sterretts’ note, and Sterretts’ personal property secured the loan.

Sterretts farmed McCartney’s land in 1983, and when they billed McCartney for the farming, McCartney informed them that he had been unable to obtain the loan from MRPCA to pay Sterretts. Sterretts have alleged in this action that they relied on the representations of Sid Boe that McCartney would receive the loan when they farmed the land in 1983.

Sterretts present the following issues for review;

(1) Whether the District Court failed to recognize that issues of agency were not specifically pleaded by plaintiffs in their complaint?
(2) Whether FICBS failed to properly raise lack of agency as an affirmative defense in its answer to the complaint?
(3) Whether issues of agency are susceptible to summary judgment?
(4) Whether the Federal District Court’s decision on agency provides the law of the case?

I.

Sterretts argument on the first issue is that they specifically pleaded active negligence on the part of FICBS, and that the lower court erred in not recognizing discovery facts raising the question of FICBS’s active negligence. The facts supporting this argument grow from supervisory duties exercised by FICBS over MRPCA. Sterretts point out that these duties include: pre-approving loans, controlling internal operations, providing training for employees, billing for supervisory and examination expenses, approving the board of directors, setting salary ranges, approving and setting the salary of the president, and establishing performance rating guidelines for salary adjustments and salary ranges. Sterretts also allege that FICBS paid Sid Boe’s salary, and thus Sid Boe acted as FICBS’s agent.

FICBS responds that their duties by federal statute include supervision of PCA operations. 12 U.S.C. Section 2072(15) (1982). Under federal case law, according to FICBS, the regulatory function exercised by FICBS over MRPCA creates no agency relationship. FICBS also argues that under federal law the separate corporate nature of the two entities under their enabling statutes mandates the conclusion that no agency exists. FICBS also argues that unless MRPCA’s employee Boe was FICBS’s agent, there can be no liability on the part of FICBS.

Sterretts also cite 12 U.S.C. Section 2072(15) (1982), as the statute authorizing the supervision which allegedly gives rise to the agency relationship. The statute authorizes supervision by Federal Intermediate Credit Banks over Production Credit Associations to:

“Approve the salary scale of the officers and employees of the association and the appointment and compensation of the chief executive officer thereof and supervise the exercise by the production credit associations of the functions vested in or delegated to them.” 12 U.S.C. Section 2072(15) (1982). An identical statute enables Federal Land Bank supervision over Federal Land Bank Associations to:

“Approve the salary scale of the officers and employees of the Federal land bank associations and the appointment and compensation of the chief executive officer thereof and supervise the exercise by such associations of the functions vested in or delegated to them.” 12 U.S.C. Section 2012(13) (1982). Except for the entities involved, the statutes are identical. The Fifth Circuit Court of Appeals in Federal Deposit Insurance Corp. v. Langley (1986), 792 F.2d 547, interpreted 12 U.S.C. Section 2012(13) (1982), to determine if the supervision exercised by the Federal Land Banks over the Federal Land Bank Associations created a principal-agency relationship between the two entities. The plaintiff in Langley alleged that the supervision exercised pursuant to the statute created the relationship between the Federal Land Bank Association of Opelousas and the Federal Land Bank of Jackson (formerly the Federal Land Bank of New Orleans). The Court rejected the argument holding that the separate corporate structures and functions of the organizations mandated a finding that no agency relationship arose from the supervision. Langley, 792 F.2d at 549. The entities at issue here áre similarly separate in their organization and function. See 12 U.S.C. Section 2071 to- 2094 (1982). And, the supervisory duties alleged to create the agency relationship arise from an identical statute. Thus, Langley provides strong support for FICBS’s argument.

However, Sterretts attempt to distinguish Langley. They claim that Langley rests on the fact that the plaintiffs in Langley sued the wrong Federal Land Bank. According to Sterretts, the Federal Land Bank of Jackson did not participate directly in the loan obligation at issue, and thus no agency existed. Sterretts misread the case.

There were two Federal Land Bank Associations in Langley, not two Federal Land Banks. The facts show that the Federal Land Bank of Jackson approved and disbursed the loan at issue, and that the Federal Land Bank of Jackson also sued to collect the debt. Langley, 792 F.2d at 547-48. The confusion in Langley relates to which Federal Land Bank Association was involved in the loan. The plaintiffs in Langley alleged that the president of the Federal Land Bank Association of Opelousas defrauded them, while the undisputed facts showed that the Federal Land Bank Association of Baton Rouge processed their loan application. The effect of this flaw in the claim lead the Court to comment first on the supervisory duties of the Federal Land Bank of Jackson, and then on the inconsistent allegations as follows:

“the Langleys fail to demonstrate how such a regulatory function converts an officer of an association (which was not even responsible for the loan application) into an agent of the FLBJ [Federal Land Bank of Jackson].”

Langley, 792 F.2d at 549. The Court’s analysis of the statutory relationship between the two entities provides the main thrust of the opinion. We agree with Langley that supervision exercised according to federal statute by FICBS over MRPCA did not create an agency relationship.

Sterretts offer no facts demonstrating any activity by FICBS in the loan outside FICBS’s supervisory duties which would amount to an actual agency, or active negligence. There is also a lack of facts showing any ostensible agency. Thus, we agree with the District Court that Sterretts’ argument depends on the creation of an agency under federal law, and that no such agency exists.

II.

Sterretts argue that lack of agency must be raised as an affirmative defense under Rule 8(c), M.R.Civ.P., and that FICBS cannot now claim the defense because it failed to raise the issue when it answered Sterretts’ complaint. Lack of agency is not explicitly denominated as an affirmative defense under Rule 8(c). However, Sterretts claim that lack of agency should be included under language in the Rule which mandates that a defendant affirmatively plead, “. . . any other matter constituting an avoidance or affirmative defense . . .” Rule 8(c), M.R.Civ.P. Sterretts cite no cases to support this position. FICBS responds that lack of agency is not an affirmative defense, and that its general denial of the allegation that Sid Boe acted as its agent was sufficient for raising agency as an issue.

In contrast to affirmative defenses under Rule 8(c), M.R.Civ.P., negative defenses are pleaded according to Rule 8(b), M.R.Civ.P. Rule 8(b):

“is concerned with negative defenses — those that controvert the adversary’s claim. Rule 8(c), on the other hand, is concerned with affirmative defenses — the pleading of matter that is not within the claimant’s prima facie case.”

2A J. Moore, Moore’s Federal Practice Section 8.27 (2d ed. 1982). The issue here may be framed as whether lack of agency is a negative or an affirmative defense.

Facing a similar claim under Rule 8(c), F.R.Civ.P., in Porto v. Peden (W.D. Pa. 1964), 233 F.Supp. 178, the Court stated:

“The specific denial of agency warned plaintiff that he must prove agency as part of his prima facie case; such a denial is a negative defense, contradistinguished from an affirmative defense.”

Porto, 233 F.Supp. at 180. We agree with Porto’s conclusion that lack of agency constitutes a negative defense, and hold that FICBS’s general denial of agency complies with the applicable requirements under Rule 8(b), M.R.Civ.P. See Grimsley v. Estate of Spencer (1983), 206 Mont. 184, 199, 670 P.2d 85, 93 (general denial has the effect of putting every material allegation in dispute). Thus, we affirm on this issue.

III.

Sterretts argue that the agency issue here should not have been decided on summary judgment. According to Sterretts, normally agency issues are questions for the jury, and here the jury should have decided whether MRPCA’s employee acted as agent for FICBS.

FICBS responds that there is no blanket prohibition for granting summary judgment on agency issues. FICBS also contends that Sterretts failed to present evidence creating a material question of fact on the agency issue.

This Court in Stillman v. Fergus County (Mont. 1986), [220 Mont. 315,] 715 P.2d 43, 43 St.Rep. 396, stated:

“While there are no Montana cases on the subject, there is a long line of California cases which hold that, normally, allegations of agency are questions of fact and should not be decided on motion for summary judgment.... However, when dealing with a government entity, such as a county, this is not always true. A principal cannot delegate authority it does not possess.”

Stillman, 715 P.2d at 44. As previously noted, Langley mandates the conclusion that FICBS’s supervisory duties do not create an agency relationship between FICBS and MRPCA’s employees.

Except for the allegations and facts presented on FICBS’s supervision pursuant to federal statute, Sterretts have failed to show participation by FICBS in the loan made by MRPCA. Once FICBS made its argument on the effect of Langley, Sterretts had the burden of coming forward with facts demonstrating participation by FICBS which would create a material fact question on the agency issue. In the absence of such a showing, summary judgment was appropriate. Fleming v. Fleming Farms (Mont. 1986), [221 Mont. 237,] 717 P.2d 1103, 1106, 43 St.Rep. 776, 779. Thus we affirm on this issue.

IV.

Sterretts maintain that when the Federal District Court declined jurisdiction and remanded this case “for trial”, it settled the agency issue and precluded summary judgment. We disagree.

Generally, courts lacking subject matter jurisdiction over a cause of action have no power to adjudicate issues in the action. See Restatement of Judgments Section 7 (1942). The basis for the Federal District Court’s decision to deny FICBS’s removal petition was lack of subject matter jurisdiction. Thus, the Court, already having found itself without subject matter jurisdiction, had no power to decide the agency issue. AFFIRMED.

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


text:
    LAVERN GARMANN, Claimant and Appellant, v. E.R. FEGERT CO., Employer, and Employers Insurance Company of Wausau, Defendant and Respondent.
    No. 88-250.
    Submitted on Briefs Sept. 1, 1988.
    Decided Nov. 3, 1988.
    Rehearing Denied Dec. 6, 1988.
    764 P.2d 471.
    Lloyd E. Hartford, Billings, for claimant and appellant.
    L. Randall Bishop, Bishop & Jarussi, Billings, for defendant and respondent.
   MR. CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Claimant and appellant, Lavern Garmann, appeals the denial to reopen the case for reconsideration of attorney fees by the Workers’ Compensation Court, Honorable Timothy Reardon presiding.

We decide that the issue to be determined is whether appellant’s failure to appeal in a timely fashion prohibits the Supreme Court from hearing the case for lack of jurisdiction.

Lavern Garmann suffered multiple injuries while working for E. R. Fegert Co., in Zortman, Montana. The injuries sustained by Garmann included fractures of the pelvis, ribs, lumbar spine and nerve damage to the upper right extremities. Fegert’s insurer, Employer’s Insurance Company of Wausau, paid temporary total disability benefits to the claimant from the date of the injury, March 21, 1981, through December 6, 1982. Permanent partial disability benefits were paid from December 7,1982, through April 28, 1983. When Wausau learned that Garmann has returned to work as a front-end alignment mechanic, it suspended benefits. Benefit payments were reinstated on January 27, 1984, when the insurer received notice that claimant was not physically able to continue work.

From the trial of February 4, 1985, Judge Reardon’s findings of fact, conclusions of law and judgment were filed on April 22, 1986. Judge Reardon stated that claimant was entitled to reasonable attorney fees and costs pursuant to Section 39-71-612, MCA. The attorney fees award was to be calculated as set forth in Section 39-71-614, MCA (1985). The judgment also stated that the parties had twenty days in which to request a hearing from the findings of fact, conclusions of law and judgment. On May 12, 1986, the claimant filed objections to the Workers’ Compensation Court’s findings of fact, conclusions of law, and judgment and requested a new hearing. The request was denied on July 1, 1986.

On July 22, 1986, a hearing to consider reasonable attorney fees was held. At the hearing, the claimant’s attorney alleged that $225 was his normal billing rate and that he had spent 160 hours on the case, totaling $36,000. Defendant contended that a more reasonable billing rate was $85 per hour. In an order filed on July 30, 1986, the court settled on $85 per hour multiplied by 160 hours and awarded $13,600 to the claimant’s attorney. Claimant also received costs equaling $1,628.25.

A Satisfaction of Order Awarding Attorney Fees was filed on August 20, 1986, signed by Garmann’s attorney.

The case was appealed to the Supreme Court on August 20, 1986, and decided on April 21, 1987, [226 Mont. 432,] 736 P.2d 123. The issues were: (1) whether the claimant was entitled to a lump sum in benefits, and (2) whether a 20 percent penalty should be imposed against the insurer for terminating the claimant’s benefits. However, no issue of attorney fees was raised.

Nearly two years after the original judgment by the Workers’ Compensation Court and twenty months after the hearing to consider reasonable attorney fees, claimant petitioned to reopen the case for reconsideration of awarded attorney fees to which defendant objected, and on April 13, 1988, was denied by the Workers’ Compensation Court. The grounds for denying reopening the case was that the claimant was barred from petitioning by res judicata. After the July 30, 1986, order awarding attorney fees, claimant failed to file for a new trial or hearing to discuss attorney fees within the twenty days required by Rule 2.52.344 of the Workers’ Compensation Court Rules. Moreover, claimant failed to appeal the July 30, 1986, order to the Supreme Court within the thirty days required by Rule 5, M.R.App.P.

Notice of appeal was filed on May 10, 1988.

The sole issue is whether the claimant is barred from appealing because he failed to file a timely notice of appeal with this Court.

Claimant’s attorney had two opportunities to attack the Workers’ Compensation Court’s decision concerning attorney fees. First, once the findings of fact, conclusions of law, and judgment were issued, according to Rule 2.52.344(1) of the Workers’ Compensation Court Rules (1983):

“A party to the dispute may request a new trial or a hearing to determine the reasonableness of attorney fees before the Court within twenty (20) days after the order or judgment is filed and, if any party submits a request, the order or judgment issued by the Court shall not be considered a final decision of the Court for appeal purposes.”

The judgment of the Workers’ Compensation Court was filed April 22, 1986. Claimant petitioned the court for rehearing on May 12, 1986, within the required twenty days. This motion tolled the running of the statute until the court decided whether to grant a rehearing. On July 1, 1986, Judge Reardon denied the request for a new hearing. On July 22, 1986, a hearing was held to decide reasonable attorney fees and the order awarding attorney fees was filed on July 30, 1986.

Second, Rule 5(a)(1), M.R.App.P., states:

“In civil cases the notice of appeal required . . . shall be filed with the clerk of the district court within 30 days from the date of the entry of the judgment or order appealed from, except that in cases where service of notice of entry of judgment is required by Rule 77(d) of the Montana Rules of Civil Procedure the time shall be 30 days from the service of notice of entry of judgment; . . .”

Claimant’s attorney did not file for appeal concerning attorney fees within the requisite thirty days. We hold that we do not have jurisdiction to determine the issues brought on appeal by the appellant. Once the judgment was submitted by the court, claimant had thirty days in which to protest the final decision regarding attorney fees.

There are a series of exceptions which are recognized in Rule 5, M.R.App.P., which suspend the time limitation for an appeal. As discussed in Rule 5(a)(4) they are as follows: (i) judgment notwithstanding the verdict under Rule 50(b), M.R.Civ.P.; (ii) Rule 52(b), M.R.Civ.P., motion to amend the decision or make additional findings; (iii) Rule 59, M.R.Civ.P., motion to alter or amend the judgment; or (iv) Rule 59, M.R.Civ.P., motion for new trial. Where these exceptions apply, the time for appeal for all parties runs from the entry of the order denying a new trial or granting or denying any other such motion. Rule 5(a)(5) also allows the suspension of the running of the time for appeal in cases where excusable neglect or good cause is shown.

The appellant in this case did not move for reconsideration of attorney fees in the Workers’ Compensation Court or the Supreme Court until nearly two years after the court’s decision. Neither did he move for any amendments of findings or new trial. Nor was there any showing of excusable neglect or good cause.

It is clear that the Workers’ Compensation Court is governed by the Montana Administrative Procedure Act by direct mandate of Section 2-4-623(5), MCA, which states: “Parties shall be notified either personally or by mail of any decision or order.” In Dumont v. Wickens Bros. Construction Co.(1979), 183 Mont. 190, 200, 598 P.2d 1099, 1105, we held that a party appealing from a decision of the Workers’ Compensation Court is entitled to the benefit of the provision of Rule 5, M.R.App.P., which states:

“. . . except that in cases where service of notice of entry of judgment is required by Rule 77(d) of the Montana Rules of Civil Procedure the time shall be 30 days from the service of notice of entry of judgment.”

In McMahon v. Anaconda Co. (Mont. 1981), 38 St.Rep. 1233 (consolidated for purpose of appeal with a second appeal involving the same parties and reported in the Pacific Reporter as (Mont.1984), 208 Mont. 482, 678 P.2d 661), we stated that there is no specific filing date of workers’ compensation decisions in the Workers’ Compensation Court since the court has no judgment book. All decisions are sent to the Workers’ Compensation Division. Rule 2.52.344, Workers’ Compensation Court Rules.

In the case on appeal, the claimant had twenty days after service of the order of July 30, 1986, granting attorney fees, within which to appeal to the Workers’ Compensation Court for a rehearing. In addition, claimant had thirty days within which to appeal to the Supreme Court from the same order. Claimant’s attorney failed to appeal to the Workers’ Compensation Court until February 17, 1988, and the Supreme Court until May 10, 1988.

Failure to file timely notice of appeal from a Workers’ Compensation Court proceeding prevents the Supreme Court from obtaining jurisdiction over the appeal. Rule 4(a), M.R.App.P.; Dumont v. Wickens, 183 Mont. at 198-199, 598 P.2d at 1103-1104; McDonald v. McDonald (1979), 183 Mont. 312, 313, 599 P.2d 356, 357; Price v. Zunchich (1980), 188 Mont. 230, 234, 612 P.2d 1296 1298.

Affirmed.

MR. JUSTICES HARRISON, GULBRANDSON, SHEEHY and WEBER concur.


author: MR. JUSTICE HARRISON

text:
    E. J. NIEMEN and L.E. Nieman, Plaintiffs and Respondents, v. LOY B. HOWELL, as Personal Representative of the Estate of Thomas H. Howell, Deceased, Defendant and Appellant.
    No. 88-253.
    Submitted on Briefs Sept. 23, 1988.
    Decided Nov. 3, 1988.
    764 P.2d 854.

      Kenneth R. Olson, Baiz & Olson, Great Falls, for defendant and appellant.
    Joseph Mudd, Jardine, Stephenson, Blewett & Weaver, Great Falls, for plaintiffs and respondents.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

This appeal comes from findings of fact, conclusions of law and order of the District Court of the Tenth Judicial District, Judith Basin County, Montana. After a bench trial, the District Court held certain payments made to the deceased by the respondents, evidenced by promissory notes and checks, were loans, not gifts, and were payable from the estate. We affirm.

Appellant Loy B. Howell is the personal representative of the estate of her late husband, Thomas H. Howell (Tom). The respondents, L.E. Niemen and E.J. Niemen, are the mother and the stepfather of Tom Howell. After Tom’s death in 1985, the Niemens filed creditor claims against the estate. When these claims were neither approved nor denied, the Niemens each filed separate lawsuits seeking repayment of alleged loans made to Tom Howell.

The first suit, filed my Mrs. Niemen, sought payment on two promissory notes which were transferred to her by Mr. Niemen. These notes were in the amounts of $25,000 (dated October 7, 1976) and $37,000 (dated May 12, 1977). The second suit, filed by Mr. Niemen, sought judgment for payments to Tom as represented by two checks drawn on the joint account of the Niemens, made payable to and endorsed by Tom, and upon each of which was written the memo “on account.” The checks were in the amounts of $22,000 (dated January 7, 1982) and $100,000 (dated July 23, 1984). The cases were consolidated for trial and were heard by the District Court without a jury.

The appellant claims these payments were not loans, but were very generous gifts to Tom to enable him to purchase and maintain the ranch which belonged to his mother’s family. In support of this theory, appellant maintains the Niemens were typically very generous, and that no repayment was ever made to the Niemens nor was any ever requested. Additionally, appellant presented testimony from N.H. Browning, Jr., President of the Belt Valley Bank. Browning stated none of Tom Howell’s financial statements filed with the bank listed these debts, and further, it was his impression the $100,000 payment was a gift. Mr. Browning had written in Tom Howell’s loan file that the $100,000 payment was a gift from Mr. Niemen. However, Browning stated this was only his impression which he gathered from those present in the bank when Mr. Niemen drafted the check. The District Court heard this testimony but excluded the bank file memo as hearsay.

The District Court concluded that the one claiming a gift had the burden to establish such was the case by clear, convincing, strong and satisfactory evidence. It further held appellant had not satisfied that burden and found for the respondents.

The following issues are raised for review:

1. Did the District Court err in finding no presumption of gift, thereby placing the burden of proof on appellant rather than respondents?

2. Was it error for the District Court to refuse to admit into evidence the bank’s loan file?

The appellant bases her argument on the numerous and substantial gifts which she and Tom received from the Niemens over the past several years. She states it was her impression the payments in dispute here were simply additional acts of generosity which allowed Tom to preserve the family farm. She points to the following list of gifts from the Niemens:

1. November 18, 1971 — check to Tom in the amount of $8,890.

2. December 28, 1974 — check to Tom in the amount of $1,635.75.

3. January 22, 1975 — check to Tom in the amount of $5,000.

4. Christmas present of 100 shares AT&T stock — allegedly worth several thousand dollars.

5. Trip to Finland after the Howells’ marriage — allegedly worth several thousand dollars.

6. April 1, 1985 — check to Tom in the amount of $4,000.

The primary issue raised by appellant is whether the District Court should have presumed the payments to be gifts, thereby shifting the burden of proof to the appellant to show by evidence which is “clear, convincing and practically free from doubt” that these payments were loans, not gifts. Appellant stresses these payments were made from the joint account of Tom’s mother and stepfather and the promissory notes were made payable to both Mr. and Mrs. Niemen. The legal result, she argues, is the presumption that all of these payments were gifts because they came from a close relative. We disagree.

On appeal, the standard of review requires us to affirm the judgment of the District Court in a civil action tried without a jury, unless the findings of fact are clearly erroneous. Rule 52(a),M.R.Civ.P. Bollinger v. Hollingsworth (Mont. 1987), [227 Mont. 454,] 739 P.2d 962, 963, 44 St.Rep. 1228, 1230. The record before us reveals the testimony of E.J. Niemen, L.E. Niemen] N.H. Browning and Loy Howell as it was heard by the District Judge. Additionally, the lower court viewed and considered the exhibits presented by the parties, ten in number, which included the checks and promissory notes which formed the basis of this action. Also included were those checks given as gifts, and the Howells’ financial statements which were prepared for the Belt Valley Bank. We hold the judgment of the District Court was not clearly erroneous.

It is the general rule in Montana that the person claiming the fact of a gift has the burden of proving it, and a gift will not be presumed unless the parties stand in close relation to one another. This exception is limited to relations such as parent and child, or husband and wife. We have refused to extend the presumption to more distant relationships. Peterson v. Kabrich (Mont. 1984), 213 Mont. 401, 691 P.2d 1360, 1364, 41 St.Rep. 2196, 2200; and Detra v. Bartoletti (1967), 150 Mont. 210, 217, 433 P.2d 485, 488.

In regard to the promissory notes sought to be enforced by the decedent’s mother, we find appellant’s argument specious. Under Montana’s UCC statutes, when signatures to an instrument are admitted or established, production of the instrument entitles the holder to recover on it unless the defendant establishes a defense. Section 30-3-307(2), MCA. Appellant has not raised any real or personal defenses to the promissory notes, but only claims the true understanding and intent was that the payments were gifts. However, parol evidence will not be allowed to contradict, alter or vary a contract which has been reduced to a writing. Section 28-2-905, MCA. See, Perez-Lizano v. Ayers (Mont. 1985), [215 Mont. 95,] 695 P.2d 467, 470, 42 St.Rep. 208, 213; and West River Equipment Co. v. Holzworth Const. Co. (1959), 134 Mont. 582, 588, 335 P.2d 298, 302. Respondent L.E. Niemen is entitled to recover on the notes.

The other instruments at issue are two personal bank checks drafted by Tom’s stepfather, E.J. Niemen, and made payable to Tom. On the face of each check is written “on account.” Appellant does not claim Mr. Niemen owed money to Tom, as this language might ordinarily suggest. Nor does appellant claim this memo was added later. These checks were written nearly two and one-half years apart. Each memo was evidently written by the same hand and with the same pen as its respective check.

While these checks do not themselves conclusively establish the debt, they are supportive evidence that these payments were not intended to be gifts. Additional evidence included testimony from both Mr. and Mrs. Niemen. They stated these payments were loans, that Mr. Niemen had to borrow the $100,000 from another source, and that he consulted an attorney regarding the minimum amount of interest to attach to each loan. We find there is substantial evidence to support the lower court’s finding that these payments were loans.

Appellant next argues Mr. Niemen stood in loco parentis to Tom because he “accepted responsibilities and obligations incident to the parental relationship.” However, there is no evidence in the record which establishes this fact. It may be true Mr. Niemen had a “close and loving” relationship with Tom, which in turn led him to advance the payments, both gifts and loans. However, this does not establish that Mr. Niemen assumed the role of Tom’s father. The District Court properly rejected this argument.

Finally, appellant claims it was error for the District Court to refuse to admit into evidence the bank’s loan file. During the trial, Mr. Browning testified it was his impression the $100,000 check was a gift. Appellant offered as further evidence a portion of the bank loan file in which Mr. Browning had written “July 23rd, received gift of $100,000 from father-in-law [sic], E.J. Niemen, and all applied to notes.” Upon voir dire, Mr. Browning testified nothing was said either to him directly or in his presence which indicated whether this was a loan or a gift. It was merely his impression that Tom thought the payment was a gift. Respondents’ attorney objected to the introduction of the memorandum on the basis it was hearsay and the District Judge sustained the objection.

Appellant claims it was error to exclude this evidence and as a result “her case was diminished.” Respondents argue the memorandum was properly excluded because it was not Mr. Browning’s impression, but was a reflection of statements made by Tom to Mr. Browning. Respondents further argue that even if the memorandum was improperly excluded, it would have added nothing to the evidence because Mr. Browning testified, apart from the memorandum, that it was his impression the money was given as a gift.

We find no prejudice from the exclusion was shown. The evidence which appellant sought to present was admitted through the testimony of Mr. Browning and therefore the substantial rights of the appellant were not adversely affected. State v. Daniels (1984), 210 Mont. 1, 18, 682 P.2d 173, 182; and State v. Romero (1973), 161 Mont. 333, 341-342, 505 P.2d 1207, 1211-1212.

The judgment of the District Court is affirmed.

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


author: MR. JUSTICE HARRISON MR. JUSTICE HUNT,

text:
    JOY WEAR, Claimant and Appellant, v. BUTTREY FOODS INCORPORATED, Employer, Defendant and Respondent.
    No. 88-280.
    Submitted on Briefs Sept. 9, 1988.
    Decided Nov. 3, 1988.
    764 P.2d 139.

      Linnell, Newhall & Martin, Richard J. Martin, Great Falls, for claimant and appellant.
    J. David Slovak, Ugrin, Alexander, Zadick & Slovak, Great Falls, for employer, defendant and respondent.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

Claimant Joy Wear (Wear) appeals from a judgment of the Workers’ Compensation Court denying her claim for benefits for compensable injury. The sole issue before this Court is whether Wear has satisfied the statutory definition of “injury.” We affirm the determination of the Workers’ Compensation Judge that she has not.

Wear worked as a checker for Buttrey Foods since 1970. On May 18, 1987, Wear filed a claim for compensation alleging she had sustained twelve different maladies which “arose out of and in the course of her employment, or were aggravated or accelerated by her employment . . .” Wear claims her disability resulted from years of repetitive motion, constant stooping, lifting, twisting and standing.

Wear’s compensation claim listed the names and addresses of seven attending physicians. Her list of physical complaints included weakness and pain in her left arm; cervical arthritis in the neck region; pain in her lower trunk, pelvis, and upper leg; a fallen arch; bursitis in her right knee; pain in her lower back; bursitis in her hip; disfigurement of her upper thighs; symptoms of stress and increased blood pressure; fibroid tumors in her uterus; abdominal pains; and varicose veins.

Buttrey Foods denied the claim and a hearing was requested before the Workers’ Compensation Court. The Workers’ Compensation Judge denied Wear’s claim for compensation under the Montana Workers’ Compensation Act, but strongly urged her to present a claim under the Occupational Disease Act. The Judge concluded that Wear had not satisfied the statutory definition of “injury” in Section 39-71-119, MCA (1985), as it read at the time of the alleged injury in 1987:

“Injury or injured defined. ‘Injury’ or ‘injured’ means:
“(1) a tangible happening of a traumatic nature from an unexpected cause or unusual strain resulting in either external or internal physical harm and such physical condition as a result therefrom and excluding disease not traceable to injury

The appropriate standard of review for questions of law is simply whether the lower court’s interpretation of the law is correct. Wassberg v. Anaconda Copper Co. (Mont. 1985), [215 Mont. 309,] 697 P.2d 909, 912, 42 St.Rep. 388, 391. We hold that the lower court’s decision is correct.

In order for a claimant to establish an injury, we have held that the two definitive elements of “time definiteness” and “unexpectedness” must be shown. Phillips v. Spectrum Enterprises (Mont. 1986), [224 Mont. 407,] 730 P.2d 1131, 1134, 43 St.Rep. 2288, 2291; Wise v. Perkins (1983), 202 Mont. 157, 166, 656 P.2d 816, 820.

Wear testified that the cause of her condition was her repeated lifting, twisting, turning, bending and standing during her seventeen years of employment with Buttrey Foods. No specific event or occurrence was said to be the cause of her condition. Rather, Wear argues that she suffered an “unusual strain” through a series of minor traumas over the years while performing her normal duties as a checker. In support of this argument Wear cites Hoehne v. Granite Lumber Co. (1980), 189 Mont. 221, 615 P.2d 863, and Wise v. Perkins (1983), 202 Mont. 157, 656 P.2d 816. In Hoehne, we held that a chain of actions or incidents which led to nerve damage over the course of two and one-half months did satisfy the statutory definition of injury. In Perkins, we held that an extraordinary work load over the course of two weeks which resulted in serious injury to the claimant was an “unusual strain” which satisfied the definition of injury.

Since Wear suffered a series of minor traumas over the past seventeen years, the argument goes, this is sufficient to establish a “tangible happening of a traumatic nature from an unexpected cause or unusual strain.” We reject this argument.

More on point with the facts of this case is McMahon v. Anaconda Co. (1984), 208 Mont. 482, 678 P.2d 661, where we held that a claimant, exposed to noxious fumes and particulates in his place of work for a period of years, was not “injured” for purposes of the Workers’ Compensation Act. We noted:

“The fact that claimant’s ailments were so very gradual in onset excludes them from the definition of injury.
“We hesitate to attempt to locate the line between long-term, gradual trauma or disease, and short-term, accidental trauma, exposure or strain. In Hoehne . . . claimant was held to have an ‘injury’, though the onset of his carpal tunnel syndrome took place over a period of two months. However, we feel it is safe to conclude that where laryngeal and pulmonary disorders and resulting psychological impairment are occasioned by exposure to a hostile environment for a period of years, the disorders fall within the meaning of the legislatively defined term ‘disease.’ (Emphasis original.) (Citation omitted.)”

McMahon, 208 Mont. at 485-486, 676 P.2d at 663. On this reasoning, we conclude Wear has not satisfied the statutory definition of “injury” and therefore the order of the Workers’ Compensation Court is affirmed.

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

MR. JUSTICE HUNT,

dissenting:

I dissent. The Workers’ Compensation Court itself recognized that Wear is disabled and that her disability is attributable to her employment. Even so, the majority denies Wear’s claim by relying on a definition of “injury” that is much too narrow.

The majority holds that the series of minor traumas experienced by Wear over the years fails to satisfy the time definiteness element of a compensable injury. In so doing, the majority ignores Wear’s testimony that her workload had increased immediately before she was forced to leave her employment. Wear worked her last month during the Easter season, a busy period for grocery stores. Furthermore, that Easter, Buttrey Foods experienced a shortage of baggers, requiring Wear to assume the tasks normally completed by those employees in addition to her regular duties.

By disregarding these facts, the majority contravenes our previous decisions in Hoehne v. Granite Lumber Co. (1980), 189 Mont. 221, 615 P.2d 863, and Wise v. Perkins (1983), 202 Mont. 157, 656 P.2d 816. In those cases, we allowed claimants who suffered traumas over the course of time to collect workers’ compensation benefits. There is no distinction between the increased workload undertaken by Wear during her last month of work and the workload of the claimants in Hoehne and Perkins.

There is, however, a great distinction between the traumas that caused Wear’s disability — constant twisting, bending, and lifting — and the inhalation of noxious fumes that led to the claimant’s lung disease in McMahon v. Anaconda Co. (1984), 208 Mont. 482, 678 P.2d 661. The majority’s reliance on McMahon is misplaced.

The majority denies Wear’s claim on the ground that her injury is the result of minor traumas experienced over the years. The majority’s opinion, however, can easily be circumvented by the knowledgeable claimant. Apparently, if Wear had been able to pinpoint a major trauma, the exact date and time of which she could recall, she would have been able to recover benefits. Perhaps if Wear had been a more sophisticated claimant she would have remembered such an event — a wrenched back ass she crouched to pick up a bag of potatoes, a pulled muscle as she lifted a sack of flour, a sharp pain as she stooped to retrieve change from the cash drawer. Unfortunately for Wear, she was not so enlightened. This opinion punishes her for her honesty and naivete.

The purpose of workers’ compensation is to provide benefits for employees who have been injured on the job. Joy Wear is such an employee. Yet the technical definition of injury in today’s decision denies her the benefits she so justly deserves.