author: JUSTICE GRAY JUSTICE TRIEWEILER

text:
    ELROY C. YAGER and BARBARA A. YAGER, Plaintiffs and Appellants, v. ROLLAND DEANE, a/k/a ROLAND E. DEANE, JR., Defendant and Appellant, and THE STATE OF MONTANA, Defendant and Respondent.
    No. 92-283.
    Submitted on Briefs October 29, 1992.
    Rehearing Denied July 16, 1993.
    Decided May 27, 1993.
    50 St.Rep. 610.
    853 P.2d 1214.
    258 Mont. 453.

      See C.J.S. Highways § 264.
    For Plaintiffs and Appellants: J. David Penwell, Bozeman, and John L. Weyland, Wayzata, Minnesota (for appellants, Yagers); James M. Kommers and Daniel J. Roth, James M. Kommers and Associates, Bozeman (for appellant Deane).
    For Defendant and Respondent: Allen B. Chronister, Chronister, Driscoll & Moreen, Helena; Kelly O’Sullivan, Agency Legal Services Bureau, Helena.
   JUSTICE GRAY

delivered the Opinion of the Court.

Plaintiffs Elroy and Barbara Yager and defendant Rolland Deane appeal from an order of the Eighteenth Judicial District Court, Gallatin County, granting summary judgment in favor of the State of Montana. We affirm.

The sole issue on appeal is whether the District Court erred in granting summary judgment on the basis that the State of Montana had no duty to prevent livestock from wandering onto the interstate highway.

The pertinent facts of the case are undisputed. On March 22,1989, at approximately 1:30 a.m., Elroy Yager (Yager) was driving a semi-tractor and trailer in the westbound lane of Interstate 90 (1-90). Yager’s vehicle struck a horse, owned by defendant Rolland Deane (Deane), that had wandered onto the highway near the Jackson Creek interchange east of Bozeman. As a result of the impact, the semi-tractor and trailer went through a guardrail and rolled down an embankment, injuring Yager.

On March 29,1991, Elroy and Barbara Yager (the Yagers) filed suit against Deane and the State of Montana (the State). They alleged that Deane negligently allowed his horse to wander onto 1-90 and that the State negligently maintained a fence and cattleguard, allowing the horse access to 1-90. Elroy Yager sought damages for permanent bodily injury, medical expenses and lost wages. Barbara Yager sought damages for loss of consortium. Deane and the State filed cross-claims seeking indemnity and contribution from each other.

On April 24, 1992, the District Court granted the State’s motion for summary judgment. The District Court determined that actionable negligence could not lie against the State absent a legal duty to erect or maintain a fence or to keep the interstate highway free of livestock. It concluded that no such duty existed. The Yagers and Deane appeal.

Did the District Court err in granting summary judgment on the basis that the State of Montana had no duty to prevent livestock from wandering onto the interstate highway?

A district court properly grants summary judgment when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.R Ordinarily, issues of negligence are issues of fact not susceptible to summary adjudication. Brohman v. State (1988), 230 Mont. 198, 201, 749 P.2d 67, 69. However, actionable negligence arises only from the breach of a legal duty; the existence of a legal duty is a question of law to be determined by the district court. Nautilus Insurance Co. v. First National Insurance (1992), 254 Mont. 296, 837 P.2d 409, 411, 49 St.Rep. 802, 803. The question before us, as it was before the District Court, is whether the State has a legal duty on which appellants can base a negligence claim. We examine, in turn, the sources which appellants contend impose a duty on the State to prevent livestock from wandering onto 1-90 where the accident occurred.

Statutory Basis

The District Court considered whether §§ 60-7-103 and 60-5-105(1), MCA, required the State to prevent livestock from wandering onto the highway. Section 60-7-103, MCA, provides:

Department to fence right-of-way through open range.
(1) The department shall fence the right-of-way of any part of the state highway system that is constructed or reconstructed after July 1,1969, through open range where livestock present a hazard to the safety of the motorist. Where a fence is constructed, adequate stock gates or stock passes, as necessary, shall be provided to make land on either side of the highway usable for livestock purposes.
(2) The department shall erect a fence in every high-hazard area as promptly as possible, and the cost of such construction is an expenditure for the enforcement of federal-aid highway safety programs. Gates, stock underpasses, water facilities, and cattle guards may be installed where necessary to make the land on either side of the highway usable for livestock purposes or where a public right-of-way intersects the state highway.

The court determined that the area was not “open range” within the meaning of § 60-7-102(1), MCA, because it lies within a horse herd district. Furthermore, the segment of 1-90 where the accident occurred is not a high hazard area as defined in § 60-7-102(2), MCA; the highway is not part of the primary highway system nor has the segment been designated as a high hazard area. As a result, the court determined that § 60-7-103, MCA, did not require the State to erect a fence along the interstate.

Section 60-5-105(1), MCA, provides in pertinent part:

Design of controlled-access facility — entrance and exit restricted. (1) Each highway authority may so design any controlled-access facility and so regulate, restrict, or prohibit access as to best serve the traffic for which the facility is intended.

The District Court determined that this provision was permissive, and therefore, did not impose a duty on the State.

Appellants do not contend that the District Court erred in construing and applying §§ 60-7-103 and 60-5-105(1), MCA. Nor do appellants cite other statutory authority establishing a duty by the State to prevent livestock from wandering onto the interstate.

Deane contends, however, that once the State voluntarily constructs a fence along the highway right-of-way, as a controlled access facility under § 60-5-105(1), MCA, the State is required to exercise ordinary care in its construction and maintenance. The record reflects that the State did not “voluntarily’ construct the fence. Rather, the State erected the fence along the interstate highway right-of-way as a precondition for receiving federal funds.

We have previously stated that § 60-5-105(1), MCA, provides that the State may — not shall — restrict or prohibit access. Big Man v. State (1981), 192 Mont. 29, 36, 626 P.2d 235, 239. In Big Man, we determined that the statute’s permissive language did not require, or impose a duty on, the State to erect a fence to prevent access by pedestrians to a controlled access highway. While the specific facts on which our determination in Big Man was based are distinguishable, no provision in the statute imposes a duty to erect a fence for any purpose.

Deane cites Stewart v. Standard Publishing Co. (1936), 102 Mont. 43, 55 P.2d 694, to support his position that once the State constructs a fence under § 60-5-105, MCA, it owes a duty to the motoring public, who rely on the State’s construction and maintenance of the fence.

“[W]here a person undertakes to do an act or discharge a duty by which the conduct of another may be properly regulated and governed, he is bound to perform it in such a manner that those who are rightfully led to a course of conduct or action on the faith that the act or duty will be duly and properly performed shall not suffer loss or injury by reason of negligent failure so to perform it.”

Stewart, 55 P.2d 696, quoting 45 C.J. 650.

Even if the State’s construction of the fence could be characterized as a discharge of Deane’s duty to prevent the horse from wandering onto the highway, the rationale in Stewart provides no basis for imposing a duty on the State. Deane has not alleged or in any way established that in driving on the highway, Yager relied on the State’s construction and maintenance of the fence to prevent livestock from gaining access. We conclude that §§ 60-7-103 and 60-5-105(1), MCA, do not impose a duty on the State to maintain the fence or prevent livestock from wandering onto the highway.

The State’s General Duty to Keep Highways Reasonably Safe

The appellants did not assert before the District Court that the State’s general duty to keep highways reasonably safe imposed a duty on the State relative to livestock. On appeal, however, they urge us to extend the State’s general duty to include a specific duty requiring the State to prevent livestock from wandering onto the highway. Appellants rely on a number of sources for the State’s general duty. They contend that the State is required to maintain the fence along the right-of-way under its general duty to keep the highways reasonably safe, citing Buck v. State (1986), 222 Mont. 423, 429, 723 P.2d 210, 214. The Yagers also base the State’s general duty on its ownership of the right-of-way. They contend that property owners, including governmental entities, have a duty to maintain their property in a reasonably safe condition, relying on Kaiser v. Town of Whitehall (1986), 221 Mont. 322, 718 P.2d 1341, and Limberhand v. Big Ditch Co. (1985), 218 Mont. 132, 706 P.2d 491. Additionally, Deane relies on State ex rel. Byorth v. District Court (1977), 175 Mont. 63, 572 P.2d 201, as a source for the general duty.

While we do not disagree that the State has a general duty to keep highways in a reasonably safe condition, we decline to expand that duty to impose a new duty to prevent livestock from reaching interstate highways. Montana has been, and continues to be, an open range state. See State ex rel. Martin v. Finley (1987), 227 Mont. 242, 738 P.2d 497. Under the open range doctrine, neither the State nor livestock owners have a duty to prevent livestock from wandering onto roadways. However, due to the increase in motor travel and in an effort to protect the motoring public, the Montana legislature has passed two carefully crafted exceptions to the doctrine. Id. The State Department of Highways is required to fence certain rights-of-way pursuant to §§ 60-7-101 et seq., MCA. Sections 60-7-201 et seq., MCA, make it unlawful for a livestock owner to allow livestock to graze or occupy certain rights-of-way. As discussed above, the District Court determined that § 60-7-103, MCA, did not impose a duty on the State to fence livestock off the highway on the facts before it; appellants do not argue otherwise.

In Martin, we declined to impose duties on a livestock owner which were not specifically created by the Montana legislature via statutory provisions governing fencing of the open range. There, the State and others sought to enjoin livestock owners from allowing livestock to wander beyond their property. The plaintiffs claimed that the wandering livestock constituted a public nuisance pursuant to § 45-8-111, MCA, by interfering with the enjoyment of their property and posing a hazardous driving condition. We discussed the open range doctrine and set forth the statutory exceptions which impose liability on livestock owners for certain negligent conduct relating to their livestock and require the State to fence certain rights-of-way. We concluded that neither of the two “carefully crafted” statutory exceptions to the open range doctrine required the livestock owner to restrain his livestock and that case law imposed no such duty. Martin, 738 P.2d at 498-99. As a result, we declined to apply the general public nuisance statute to impose an additional duty not provided for in the specific open range provisions.

We reach the same result here. We decline to apply the State’s general duty to keep its property in a reasonably safe condition, as articulated in Kaiser and Limberhand, or its general duty to keep its highways in a reasonably safe condition, as enunciated in Buck and Byorth, to specifically require the State to prevent livestock from wandering onto the interstate highway. Where the Montana legislature has acted to define the duty of the State relative to livestock on roadways, we will not impose an additional duty, the source of which is extraneous to the statutory provisions governing the fencing of the open range.

Appellants contend that the District Court misapplied Buck in determining that the State’s general duty did not impose a duty on the State to maintain the fence. The court acknowledged that the State’s general duty to keep highways in a reasonably safe condition extended to the paved portions of the roadway and to the shoulders and adjacent parts of the roadway under Buck. The court reasoned, however, that the fence was well off the paved or shoulder portions of the highway and, therefore, that the State had no duty to maintain it. We do not disagree with appellants’ contention that the District Court failed to connect their argument on fencing to the “adjacent parts” language in Buck. However, we find no basis inBuck to impose a duty on the State to maintain the fence.

In Buck, the driver failed to negotiate a curve in the highway and went off the left hand side of the pavement. As the driver attempted to return the vehicle to the roadway, the vehicle collided with a bridge abutment. We concluded that the State’s duty to keep its highways in a reasonably safe condition extended to the shoulders “and the adjacent parts thereof.” Buck, 723 P.2d at 214. In relying on this language to support a duty by the State with regard to fencing, however, appellants fail to recognize that the extension of the State’s general duty in Buck specifically was premised on the “common experience that vehicles may stray or swerve from the usual traveled portion” of the roadway. Id. Here, Yager did not stray from the usually traveled path and encounter an unreasonably unsafe condition on an adjacent part of the roadway. Thus, the Buck language relied on by appellants is inapplicable here.

Finally, appellants assert that the District Court erroneously relied on Whitfield v. Therriault Corp. (1987), 229 Mont. 195, 745 P.2d 1126, and Ambrogini v. Todd (1982), 197 Mont. 111, 642 P.2d 1013, to support its determination that the State’s general duty did not require it to prevent livestock from gaining access to the highway. Those cases are, indeed, distinguishable on their facts from the present case and, therefore, are not controlling on the issue of the State’s duty to prevent livestock from wandering onto the particular roadway here. Whitfield and Ambrogini do reflect, however, our consistent refusal to impose a duty on the State or livestock owners relative to fencing livestock off roadways that is not specifically created by the legislature.

Montana Department of Highways Maintenance Manual

Section 3.110 of the Montana Department of Highways Maintenance Manual provides:

The major portion of the highway right of way has been fenced either by the adjoining landowner or by the state. The maintenance of this fence is detailed in the right of way agreement. On Interstate highways, however, the fence and its maintenance are the responsibility of the Department of Highways. Highway fences may be important as any other safety device on the highway and, thus, so are their maintenance. Placement of a fence not only outlines the limits of the right of way, but also keeps humans and animals away from hazardous areas. Careful inspection and routine maintenance should not be neglected.

The District Court ruled that the maintenance manual imposed no duty on the State to erect fences. The court determined that violations of the manual provide evidence of negligence only after the existence of a legal duty has been established.

The Yagers make a dual argument relating to the manual. First, they argue that the manual affirmatively imposes a duty on the State to maintain the fence, relying on Townsend v. State (1987), 227 Mont. 206, 738 P.2d 1274, and Hash v. State (1991), 247 Mont. 497, 807 P.2d 1363. Neither Townsend nor Hash holds, or infers in any way, that provisions of the maintenance manual impose a duty.

Second, the Yagers assert that a violation of the maintenance manual is evidence of negligence and that negligence is a fact question for the jury, relying again on Townsend and Hash. On this basis, they argue that the District Court erred in granting summary judgment. Townsend and Hash do support the Yagers' contention that violations of the manual are evidence of negligence. Townsend, 738 P.2d at 1276; Hash, 807 P.2d at 1366. However, the cases do not preclude summary judgment in the present case.

The existence of a duty was not at issue in either Townsend or Hash; the State’s general duty to keep highways in a reasonably safe condition was applicable to the facts of those cases. Under those circumstances, we concluded that proof of the State’s failure to comply with the manual was evidence of negligence. Here, appellants have not established the existence of a legal duty by the State to erect or maintain fences along the interstate highway to prevent livestock from gaining access. Thus, the question of whether the State breached its duty, to which violations of the manual as evidence of negligence properly could be addressed, simply does not arise in this case.

We conclude that the highway manual does not impose a duty on the State to maintain the fence. Absent the existence of a legal duty, the manual cannot be used as evidence that the State negligently maintained the fence.

Right-of-Way Purchase Agreement

The Yagers’ final contention is that the State assumed a duty to maintain the fence when it purchased the right-of-way. In support of this contention, the Yagers appended documents entitled Highway Right of Way Easement and Agreement to Fence to their brief opposing summary judgment in the District Court, and to their brief to this Court. The District Court did not consider the appended documents; nor did it address whether the State assumed a duty to maintain the fence when it purchased the right-of-way.

The Yagers contend, that the documents were properly before the District Court because they had been obtained from the Highway Department during discovery. However, when addressing a motion for summary judgment, a district court considers only discovery that is on file. Rule 56(c), M.R.Civ.R The Yagers failed to file the documents; on that basis, the District Court’s failure to address them or the issue for which they were appended was appropriate. We join the District Court in declining to address an issue lacking proper support in the record.

Appellants have failed to cite any authority imposing a duty on the State to prevent livestock from wandering on, or to erect or maintain a fence along, the section of the interstate highway where the accident occurred. Absent a duty, there can be no negligence. We hold that the District Court did not err in granting the State’s motion for summary judgment.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES WEBER and McDonough concur.

JUSTICE TRIEWEILER

dissenting.

I dissent from the majority opinion.

Plaintiffs filed a complaint in which they alleged that the State of Montana had a duty to maintain fences and cattle guards which were built by the State on State property to protect motorists on Interstate 90 from wandering livestock. Plaintiffs alleged that the State was negligent by failing to maintain these fences and cattle guards and that plaintiff Elroy Yager was injured as a result of the State’s negligence. The State denied that it was negligent in its answer. However, no evidence has been offered by the State, by affidavit or otherwise, which would controvert plaintiffs’ allegation of negligence. The District Court’s order of summary judgment, and this Court’s opinion affirming that order, are based simply on the conclusion that the State had no duty to maintain its own property in a way that would prevent an unreasonable risk of injury to others.

The majority’s conclusion is wrong as a matter of law for several reasons.

First, the State has the same duty that all private property owners have by statute in Montana to act reasonably in the maintenance of its property. Second, the State assumed a duty by adopting the Uniform Maintenance Manual which required that it erect and maintain the fences which were the subject of this suit. Finally, the State assumed the duty to build and maintain the fence and cattle guard in question when it accepted federal funding for the construction of Interstate Highway 90, and it agreed as a condition to that funding to build and maintain the protective devices in question.

DUTY TO EXERCISE ORDINARY CARE

Article II, section 18, of the Montana Constitution provides in relevant part that:

The state ... shall have no immunity from suit for injury to a person or property, except as may be specifically provided by law by a 2/3 vote of each house of the legislature.

Section 2-9-102, MCA, provides that:

Every governmental entity is subject to liability for its torts and those of its employees acting within the scope of their employment or duties whether arising out of a governmental or proprietary function except as specifically provided by the legislature under Article II, section 18, of the Constitution of the State of Montana.

It is clear, then, that unless specifically prohibited by the Legislature, the State is hable to the same extent that a private individual would be hable for its negligence as defined in the common law. Under the common law of Montana, we have previously held that statutory obligations give rise to duties which, if breached, form the basis of a common law cause of action. For example, § 27-1-701, MCA, provides that:

Except as otherwise provided by law, everyone is responsible not only for the results of his willful acts but also for an injury occasioned to another by his want of ordinary care or skill in the management of his property or person except so far as the latter has willfully or by want of ordinary care brought the injury upon himself.

In Limberhand v. Big Ditch Company (1985), 218 Mont. 132, 144-45, 706 P.2d 491, 498-99, we held that this statute imposed a duty on land owners to use ordinary care in the management of their property so as not to create an unreasonable risk to those who could be foreseeably injured by their failure to do so. According to our Constitution and the statutory authority previously cited, the State had the same duty to maintain the fence and cattle guard that it constructed on the right-of-way that it owned. The majority opinion fails to discuss why the duty imposed by § 27-1-701, MCA, applies to every private person in this State, but not to state government itself.

HIGHWAY MAINTENANCE MANUAL

As pointed out in the majority opinion, the State of Montana’s own highway maintenance manual provides that it is the State’s responsibility to maintain fencing along interstate highways. The manual even points out exactly why it is important to maintain fences. It provides that “[placement of a fence not only outlines the limits of the right of way, but also keeps humans and animals away from hazardous areas. Careful inspection and routine maintenance should not be neglected.”

However, the majority dismissed the obligation created by the State’s own maintenance manual by concluding that even though failure to comply with the maintenance manual is evidence of negligence, the manual did not create any duty.

It is true that we have specifically held that “violations of the Maintenance Manual provided evidence of negligence.” Townsend v. State (1987), 227 Mont. 206, 209, 738 P.2d 1274, 1276. However, it is a non sequitur to conclude that there can be evidence of negligence without a duty. We have previously held that a duty is a prerequisite for finding negligence. In Roy v. Neibauer (1981), 191 Mont. 224, 226, 623 P.2d 555, 556, we held that:

It is an elementary principle of law that before a claim for relief can be made against a defendant for negligence, the existence of a duty by the defendant to the plaintiff must be shown, along with the breach of that duty and a resulting injury.

If there has to be a duty and a breach of duty before there can be a claim of negligence, how can failure to comply with the maintenance manual be evidence of negligence, but no basis for establishing a duty? In its effort to protect the State from accountability for its negligence in this case, the majority’s opinion is logically inconsistent with the majority’s previous decisions.

DUTY UNDER FEDERAL LAW

The majority briefly reviews State statutory law which imposes a duty to fence highways, but concludes that since those statutes were not applicable to the area where this action occurred, there was no statutory duty imposed on the State to protect motorists on this highway from wandering livestock. However, I do not understand why the majority’s review of statutory obligations is limited to state law. What rational distinction is there between state statutes which impose a duty to fence highways and federal statutes which impose the same duty?

The State of Montana concedes, in its appellate brief, that the area where this accident occurred was originally fenced and protected by the State Highway Department because the State was required to do so by federal law. In its brief, the State concedes that:

While state law is permissive regarding Interstate fencing, the primary if not exclusive reason that these highways are fenced is that fencing is required by the Federal government as a precondition for receiving critical construction funding. A complete discussion of the applicable Federal statutes and regulations would be complicated and lengthy and is unnecessary here. It is sufficient to note that Federal law requires states to comply with Federal standards for design (23 U.S.C. §§ 106 and 109), construction (23 U.S.C. § 114), and maintenance (23 U.S.C. § 116) of Interstate highways, and for inspections and approvals to insure compliance.

The statutes referred to in the State’s brief are part of the Federal-Aid Highway Act, 23 U.S.C. §§ 101 through 160 (1958). A more complete explanation of the controlling provisions is found in Daye v. Commonwealth of Pennsylvania (1972), 344 F. Supp. 1337. That court explained that:

Section 106(a) provides for the submission by the state and approval by the United States Secretary of Transportation [Secretary] of surveys, plans, specifications and estimates for each proposed project. Section 109(a) provides that the Secretary shall not approve the plans and specifications unless they are conducive to traffic needs, safety, durability and economy. Section 109(d) provides that the location of highway signs shall be subject to the approval of the State Highway Department with the concurrence of the Secretary. Section 109(e) provides that no funds shall be approved unless proper safety protective devices complying with certain safety standards approved by the Secretaiy are installed. Section 114(a) provides that highway construction shall be under the supervision of the State Highway Department, subject to the inspection and approval of the Secretary. Section 116(a) provides that it is the duty of the state to maintain the highways, and Section 116(c) provides that if the highway is not being properly maintained, the Secretary may withhold approval of further projects.

Daye, 344 F. Supp. at 1347.

The State cites Daye for the principle that these federal statutes do not create a duty on the part of the State to construct and maintain its fences and protective devices. However, I do not agree with that interpretation oí Day e. The Federal District Court simply found that the statutes in question did not give rise to an independent private cause of action which was in contravention of Pennsylvania’s immunity statutes. However, it is clear that the statutes create a duty on the part of the State to comply with federal requirements as a condition to federal funding, and the State concedes that those requirements included constructing and maintaining the fences which are the subject of plaintiffs’ complaint.

Finally, it appears to me that the majority opinion is based on several false premises. The Court concluded that § 60-7-103, MCA, which requires fencing of the right-of-way constructed through open range areas was not applicable because the location where this accident occurred was within a horse herd district. However, the majority then proceeds to justify its decision based upon its conclusion that “Montana has been, and continues to be, an open range state.” They hold that “[ujnder the open range doctrine, neither the State nor livestock owners have a duty to prevent livestock from wandering onto roadways.” Why does the majority rely on the fact that this is a herd district for purposes of rejecting plaintiffs’ claim that the State had a statutory duty to fence, and then rely on an inconsistent conclusion that Montana is an open range state when it declines to impose a common law duty to maintain the State’s fences?

Likewise, the majority concludes that since the Montana Legislature has not imposed a duty to fence the particular right-of-way where this accident occurred, we should not impose that duty. What about the duties imposed by the federal government and by the Department of Highways itself?

To me, this claim involves simple issues. The State, by statute, had a duty to maintain its property, including its fence and cattle guard, in a condition that would have prevented unreasonable risk of harm to others, including motorists on the interstate highway. Plaintiffs alleged that it failed to do so and that Elroy Yager was injured as a result of that negligent omission. The State has offered no evidence to the contrary, therefore, summary judgment should have been denied. If the statutory duty imposed on everyone in Montana to exercise reasonable care in the maintenance of their property is not a clear enough creation of a duty for the majority, then certainly the obligations imposed by the Highway Department’s own maintenance manual, or the commitment made by the State, pursuant to federal statute, in order to obtain federal highway funds, create additional duties.

I am at a loss to find any justification for the majority opinion. If the State was not negligent, or if the State’s negligence was not a cause of injury to Mr. Yager, then our laws should protect the State from liability. However, if the State was negligent, and its negligence caused harm to Mr. Yager, then simple fairness and justice require that the State be accountable for its conduct. It is beyond my comprehension why any court would go to the lengths that this Court has gone to in an effort to allow the State to avoid accountability for its negligent omissions.

By its reliance on statutes which are irrelevant, and prior case law which is not on point, the majority has constructed what appears at first glance to be a rational justification for denying recovery in this case. The question that I have a difficult time understanding is to what justifiable purpose is that effort directed?

For these reasons, I dissent from the majority opinion. I would reverse the judgment of the District Court.


source: Caselaw Access Project

author: JUSTICE WEBER

license: Public Domain

text:
    IN THE MATTER OF B. L. T., A Youth Under the Age of Eighteen.
    No. 92-350.
    Submitted on Briefs April 30, 1993.
    Decided May 27, 1993.
    50 St.Rep. 617.
    853 P.2d 1226.
    258 Mont. 468.
    See C.J.S. Infants § 77.
    For Appellant: J. Dirk Beccari, Marcia M. Jacobson, Public Defender’s Office, Missoula.
    For Respondent: Joseph P. Mazurek, Attorney General, Barbara Harris, Assistant, Helena; Robert L. Deschamps, III, County Attorney, Gary L. Hendricks, Deputy, Missoula.
    Amicus: Ann Gilkey, Department of Family Services, Helena; Sue Burrell, Clark, Peters, Loren, Warboys, Youth Law Center, San Francisco, California.
   JUSTICE WEBER

delivered the Opinion of the Court.

This is an appeal of an order of the Youth Court in the Fourth Judicial District, Missoula County, ordering the youth’s placement at Pine Hills School for Boys until he reaches the age of eighteen years. We reverse.

The sole issue for our review is whether the Youth Court had the authority to determine the length of time B.L.T. must spend at Pine Hills School for Boys when custody was committed to the Department of Family Services.

B.L.T. was placed in Pine Hills School for Boys (Pine Hills) for the first time in January 1991. He remained there until April 4, 1991 when he was released by the Department of Family Services (Department). On December 18, 1991, a second petition was filed with the Youth Court alleging that B.L.T. was a delinquent youth because he had committed two subsequent thefts. While he was being transported to Pine Hills on January 3, 1992 to await trial on the theft charges, he and another youth escaped from the transport van in a car stolen by a third youth.

On January 9,1992, after the prearranged escape from the transport van, the petition was amended to allege an additional count of theft and one count each of escape and criminal mischief. On May 11, 1992, pursuant to an agreement between the youth and the State, these charges were amended, alleging that B.L.T. had committed an unauthorized use of a motor vehicle, a theft by accountability, and escape. B.L.T. admitted to these charges.

The Youth Court ordered that 15-year-old B.L.T. be committed to the custody of the Department, with placement at Pine Hills until he reaches the age of eighteen years. The Youth Court’s order gave custody of B.L.T. to the Department on May 13, 1992. Section 41-5-103(17) defines “legal custody” as follows:

(a) “Legal custody” means the legal status created by order of a court of competent jurisdiction that gives a person the right and duty to:
(i) have physical custody of the youth;
(ii) determine with whom the youth shall live and for what period;
(iii) protect, train, and discipline the youth; and
(iv) provide the youth with food, shelter, education, and ordinary medical care. (Emphasis supplied.)

B.L.T. contends that the Youth Court could not give legal custody to the Department and at the same time retain the power to control where he will live for a specified period of time. B.L.T. further contends that after the Youth Court has placed him at Pine Hills, the Department has the sole authority to determine when he is in need of less restrictive placement and is sufficiently rehabilitated to leave Pine Hills. The Youth Court’s order, he argues, is more like a sentence imposed upon habitual offenders and is not in keeping with the purpose of the Youth Court Act — rehabilitation and not retribution.

The Youth Court’s judgment will not be overruled unless it is clear that the court abused its discretion. In the Matter of T.A.S. (1990), 244 Mont. 259, 263, 797 P.2d 217, 220.

The Montana Youth Court Act, Title 41, Chapter 5, MCA, governs the handling of youth offenders in Montana. The Youth Court Act has a specific statement of purposes which is stated in § 41-5-102, MCA, as follows:

Declaration of purpose. The Montana Youth Court Act shall be interpreted and construed to effectuate the following express legislative purposes:
(1) to preserve the unity and welfare of the family whenever possible and to provide for the care, protection, and wholesome mental and physical development of a youth coming within the provisions of the Montana Youth Court Act;
(2) to remove from youth committing violations of the law the element of retribution and to substitute therefor a program of supervision, care, rehabilitation, and, in appropriate cases, restitution as ordered by the youth court;
(3) to achieve the purposes of (1) and (2) of this section in a family environment whenever possible, separating the youth from his parents only when necessary for the welfare of the youth or for the safety and protection of the community;
(4) to provide judicial procedures in which the parties are assured a fair hearing and recognition and enforcement of their constitutional and statutory rights.

Before ordering the placement of a delinquent youth in a youth correctional facility, the Youth Court must determine that the youth is a serious juvenile offender and that such placement is necessary for the protection of the public. Section 41-5-523(l)(b)(ii), MCA. The Youth Court here determined that B.L.T. was a serious juvenile offender and committed him to the Department, specifying that B.L.T. be placed in Pine Hills. In making this order, the Youth Court made the requisite finding that such placement was necessary for the protection of the public.

Section 41-5-523(2), MCA, states: “When a youth is committed to the department, the department shall determine the appropriate placement and rehabilitation program for the youth ....” Two provisions in the Youth Court Act concern jurisdiction of the Youth Court after it has committed a youth to the Department:

Retention of jurisdiction. Once a court obtains jurisdiction over a youth, the court retains jurisdiction unless terminated by the court or by mandatory termination in the following cases:
(1) at the time the proceedings are transferred to adult criminal court;
(2) at the time the youth is discharged by the department, and
(3) in any event, at the time the youth reaches the age of 21 years. (Emphasis supplied.)

Section 41-5-205, MCA.

Continuing jurisdiction of youth court. The youth court committing a delinquent youth or a youth in need of supervision to the department of family services retains continuing jurisdiction over the youth until the youth becomes 21 years of age or is otherwise discharged by the department after notice to the youth court of original jurisdiction. (Emphasis supplied.)

Section 41-3-1114, MCA. These statutes were changed significantly by the 1987 legislature. Section 41-5-205(2), MCA (1985), previously provided that the Youth Court lost jurisdiction “at the time of commitment of the youth to the custody of the department of institutions” and § 41-3-1114, MCA (1985), previously provided:

The youth court placing a delinquent youth or a child in need of supervision in a youth care facility retains continuing jurisdiction over the youth until the youth becomes 21 years of age or is otherwise discharged by order of the court. (Emphasis supplied.) The 1987 legislature enacted House Bill 325 (HB 325), which

consolidated services affecting youth into the Department of Family Services. The 1987 revisions of the above-quoted statutes reflect the expanded role of the Department in youth services and the diminished role of the youth courts. In a joint hearing of the State Administration Committee conducted on January 23,1987, a member of the Youth Services Study Council, speaking in support of HB 325, emphasized that services to youth were very fragmented resulting in no continuity or flexibility and that the bill would dramatically change the judge’s dispositional authority. Other proponents of HB 325 shared their concerns that the bill as originally drafted would limit the youth court in the disposition it could take over a youth — limiting it to either placing the youth on probation or committing the youth to the department. They felt that the youth courts should be given a little more authority. Subsequently, the legislation was amended to include the authority of the youth court to specify placement of delinquent youths to a youth correctional facility provided that the youth is first determined to be a serious juvenile offender.

The outline of HB 325 prepared prior to its consideration by the legislature contains the following statements:

Section 54 amends 41-5-205 to allow the youth court’s jurisdiction of a youth to continue until the new department discharges a youth. Currently, this statute terminates the youth court’s jurisdiction at the time the youth is committed to the state. This amendment is in accordance with the Council’s recommendation to alter the dispositional options available to the youth court in Section 60, but to allow the youth court to continue to be involved at the judge’s discretion by extending the court’s jurisdiction. Some have indicated that allowing continued jurisdiction is messy, but the Council wanted to be sure that youth court judges have an obvious method to review cases if questions arise.
Section 60 is the amendment to the dispositional options available to the youth court judge. The Council recommended that the youth court judge should have the authority to order placement of youth in need of supervision or a delinquent youth, but that the new department, which is responsible for the funding for the placement, be the party responsible to place the youth. ... Placement advise (sic) and recommendations would become decisions by departmental staff who are currently youth court staff.
1) ... This amendment continues all of the existing dispositional authority of the judge with the exception of the actual facility or home the youth is placed. Some judges indicated that they need to be able to protect their communities from dangerous juvenile offenders. The Council then recommended that the judges be able to require a physically secure placement in the case of public safety. With the definition of the “serious juvenile offender” added ... and the amendments ..., that recommendation is accomplished. (Emphasis supplied.)

Before the consolidation of youth services into the Department of Family Services in 1987, a youth court could sentence a youth to a facility for any period of time up to the child’s 21st birthday. Section 41-2-1113, MCA (1985). The 1987 legislature repealed § 41-2-1113, MCA (1985), and the provision that the court may place a delinquent youth in a facility for any period of time up to the child’s 21st birthday is no longer a part of the Youth Court Act.

It is clear from the Declaration of Purpose of the Youth Court Act that the express legislative purposes include the removal of an element of retribution, and the substitution of a program of supervision, care, rehabilitation, and in appropriate cases, restitution. Matter of T.A.S., 797 P.2d at 220. The statutes do not give to the Youth Court the specific power to fix a determinate amount of time to be served. That is consistent with the elimination of the element of retribution.

In § 41-5-106, MCA, the legislature has emphasized that the placement to a youth correctional facility shall not be deemed commitment to a penal institution, and such an adjudication shall not be deemed a criminal conviction. As stated in In the Matter of C.S. (1984), 210 Mont. 144, 146, 687 P.2d 57, 59:

A sentence of imprisonment following a criminal conviction is imposed because a particular crime was committed, and its purpose is both retributional and rehabilitational. Though a juvenile commitment is usually triggered by a crime, the commitment is strictly for rehabilitation, not retribution.... There is more than an artificial distinction between commitment under the Youth Court Act and sentencing under the Montana Criminal Code. Thus an adult sentenced for a crime and a juvenile committed to the youth authorities are not similarly situated with respect to the purpose of their detention.

Similarly in Matter of T.A.S., 797 P.2d at 220, this Court reemphasized these points, stating:

Both the Youth Court Act and this Court have made it clear that a delinquent youth is not committed to the Department as punishment for a crime, but is committed as a delinquent youth for care, protection and rehabilitation. ... Commitment is strictly for rehabilitation, not retribution.... The purpose of the Youth Court Act is “to provide a mechanism through which the state can act as the parens patriae of its youth.” (Citations omitted.)

The Youth Court does have a statutorily reserved power to revoke or modify a disposition. In In the Matter of the Application of Robert Peterson on Behalf of B.S.M. (1989), 235 Mont. 313, 767 P.2d 319, 321, this Court stated:

The power of the Youth Court is not diminished through granting the Department placement power of a delinquent youth. The court has the exclusive power to sentence the youth. If the court chooses to place the youth with the Department, it is just one of the possible proper dispositions. Furthermore, the court reserves residual power, pursuant to § 41-5-523(5), which allows it to revoke or modify the disposition of the Department at any time, upon notice to the Department and subsequent hearing. This assures that the youth retains his rights in case the Department exceeds or abuses its authority.

Peterson farther concluded that the youth court has authority to review Department decisions to determine if the placement is in the best interests of the minor. Peterson, 767 P.2d at 321. The Department’s broad authority to fashion rehabilitation programs for youths committed to its care is not diminished when the court adjudges the child a “serious offender” and specifies that the youth be placed in a state youth correctional facility under § 41-5-523(l)(b)(ii), MCA, except to the extent that the initial placement choice has already been made.

Other states with similar statutory schemes have determined that the rehabilitative goals of their juvenile offender acts require that ultimate authority over the child rest with the appropriate human services agency, not the court. In so holding, the West Virginia Supreme Court commented that “it is quite likely that a rule which would permit courts to sentence children for a definite term would confound the rehabilitation and behavior modification program of the institution.” State ex rel. Washington v. Taylor (W. Va. 1980), 273 S.E.2d 84, 86. See also In re the Welfare of Lowe (Wash. 1978), 576 P.2d 65.

It is important that we emphasize the distinction between the present case and Matter of T.A.S. In Matter of T.A.S., after reviewing the theory of commitment to the Department as not being punishment for a crime but for care, protection and rehabilitation in order to provide a mechanism through which the State could act as the equivalent of a parent for the youth, this Court concluded that it was not an abuse of discretion to commit the youth to the Department until age 19. Matter of T.A.S., 797 P.2d at 220. It is important to keep in mind the broad discretion given to the Department under the Youth Court Act. When a youth is committed to the Department, the Department has the statutory power to determine appropriate placement and rehabilitation programs for the youth, subject to various statutory limitations. As a result, a commitment to the Department is not equivalent to a commitment to a specific state correctional facility, such as Pine Hills. If the Youth Court in the present case had committed B.L.T. to the Department for a specified period of time, we would have approved that determination. However, there is no legislative authority granting the Youth Court the power to commit B.L.T. to Pine Hills School for Boys, a specific correctional facility, for a specified period of time.

We hold that the Youth Court did not have the authority here to determine the length of time B.L.T. should spend at Pine Hills.

Reversed and remanded for further proceedings consistent with this opinion.

JUSTICES HUNT, TRIEWEILER, GRAY and McDONOUGH concur.


author: JUSTICE HARRISON JUSTICE TRIEWEILER

text:
    DAVE POTTER, Petitioner and Appellant, v. MONTANA DEPARTMENT OF LABOR AND INDUSTRY, CONTRIBUTIONS BUREAU; JOHN BRUTON, d/b/a DOWNING PHARMACY; ED KOPFMAN, d/b/a RENTAL CENTER; BENEKE CONSTRUCTION; JOHN LOHDEN CONSTRUCTION, and MORT ARKAVA, Respondents and Respondents.
    No. 92-394.
    Submitted on Briefs November 19, 1992.
    Decided May 27, 1993.
    50 St.Rep. 621.
    853 P.2d 1207.
    258 Mont. 476.

      See C.J.S. Social Security and Public Welfare § 185.

      For Petitioner and Appellant: Judith A. Loring, Stevensville.
    For Respondents and Respondents: Daniel B. McGregor, Legal Services Div., Department of Labor & Industry, Helena; Julio K. Morales, Morales Law Office, Missoula; Janies Park Taylor, Missoula.
   JUSTICE HARRISON

delivered the Opinion of the Court.

This is an appeal from the Fourth Judicial District, Ravalli County, the Honorable Douglas G. Harkin presiding. Appellant Dave Potter (Potter) appeals an order affirming a Board of Labor Appeals decision that in 1987 he was an independent contractor, not an employee, and therefore was not eligible for unemployment insurance benefits. We affirm.

On May 23, 1988, the Department of Labor and Industry (the Department) determined that Potter, a carpenter and mason, had been an independent contractor in 1987. Potter appealed this determination. The Board of Labor Appeals (the Board) adopted the Department’s determination after a telephone hearing on August 30, 1988. Potter petitioned for review in district court, but after discovery the Department agreed to vacate its earlier decision and conduct a second, in-person hearing.

Participants in the second hearing, held on January 28, 1991, included the Department and four of the other respondents in this appeal: John Bruton, Ed Kopfman, Beneke Construction, and Mort Arkava. All of the respondents had hired Potter in 1987 for specific carpentry or masonry projects. The sixth respondent, John Lohden Construction, was not present but did provide documents describing the association between Potter and John Lohden Construction as an independent contractor relationship. The hearing officer sustained the Department’s May 23, 1988 determination that in 1987 Potter was an independent contractor in his association with the respondents. Potter appealed to the Board, which adopted the hearing officer’s findings on June 6, 1991.

Potter again petitioned for judicial review in district court. The court reviewed the parties’ briefs and on June 30, 1992 entered judgment upholding the determination that Potter was an independent contractor when he performed services for the respondent employers.

STANDARD OF REVIEW

Under Section 39-51-2410(5), MCA, the findings of the Board as to the facts are conclusive, if supported by evidence and in the absence of fraud, and the jurisdiction of a reviewing court is confined to questions of law. “Supported by the evidence” means supported by substantial evidence, which is “something more than a scintilla of evidence but may be less than a preponderance of the evidence.” Gypsy Highview Gathering System, Inc. v. Stokes (1986), 221 Mont. 11, 14, 716 P.2d 620, 623. Thus, the District Court must limit its review of the Board’s findings to a consideration of whether they are supported by substantial evidence, and the same standard applies to this Court. Gypsy Highview Gathering System, 716 P.2d at 623. See also Thornton v. Commissioner of Dep’t of Labor & Industry (1980), 190 Mont. 442, 446, 621 P.2d 1062, 1065 (“This Court may not substitute its judgment for that of the trial court or agency as to the weight of the evidence on questions of fact.”). With regard to questions of law, however, our task is to determine whether the agency’s interpretation of the law is correct. Steer, Inc. v. Dep’t of Revenue (1990), 245 Mont. 470, 803 P.2d 601.

Here, the threshold issue is whether Potter’s status as independent contractor or employee is a question of law or a question of fact. When the facts surrounding a person’s arrangement with employers are relatively undisputed, the question is one of law, and this Court is not bound by the conclusions of the District Court or the Board, as it would be regarding a question of fact. Solheim v. Tom Davis Ranch (1984), 208 Mont. 265, 272, 677 P.2d 1034, 1038. See also Carlson v. Cain (1983), 204 Mont. 311, 317, 664 P.2d 913, 916 (“[W]here there is no dispute as to what the arrangement is, the question of employee or independent contractor status is one of law for the court.”).

When the facts are disputed, as here, the “substantial evidence” test is appropriate. In Hammerquistv. Employment Security Division (1988), 230 Mont. 347, 350, 749 P.2d 535, 537, for example, we held that a hearing officer had applied the proper “legal standard” in determining that a construction worker was an employee and not a partner of a building contractor, but we also held that “substantial evidence supports the hearing officer’s finding and conclusion that no partnership or joint venture exists.” See also Connolly v. Board of Labor Appeals (1987), 226 Mont. 201, 734 P.2d 1211 (substantial evidence test applied to a Board determination of employee misconduct).

Here, the District Court reviewed the hearing officer’s findings of fact, which were adopted by the Board, and found that they were supported in the hearing transcript and were therefore conclusive. This Court also is bound by those findings, to the extent that they are supported by substantial evidence. Larry’s Post Co. v. Unemployment Insurance Div. (1989), 238 Mont. 190, 193, 777 P.2d 325, 327. If the factual findings are supported by substantial evidence, we must then determine whether the Board’s legal conclusion as to Potter’s status was correct. Steer, Inc., 803 P.2d at 603.

THE INDEPENDENT CONTRACTOR ISSUE

Potter was hired by the respondent employers in 1987 for the following projects:

John Bruton: Build shelves and a check-out counter for Bruton’s pharmacy
Ed Kopfman: Lay a cabin foundation slab and remodel the cabin
Beneke Construction: Form and pour concrete walls
John Lohden Construction: Roof a building
Mort Arkava: Lay blocks for a house, grout a wall, and pour concrete for a garage floor

Potter states that he was paid by the hour for his work on all of these projects; that the employers provided most of the tools and all of the materials needed for each job; and that Beneke Construction and Lohden Construction hired him as one of several employees for their respective projects.

The test for determining whether an individual is an independent contractor is stated in § 39-51-201(14), MCA:

“Independent contractor” means an individual who renders service in the course of an occupation and:
(a) has been and will continue to be free from control or direction over the performance of the services, both under his contract and in fact; and
(b) is engaged in an independently established trade, occupation, profession, or business.

Potter clearly meets the second of these criteria. He admits that until 1987 he operated his own business, and most of the respondent employers testified that they had hired him before 1987 as an independent contractor. The hearing officer found that Potter was “independently established in a business” in 1987 because he performed similar work for several persons and “offered his carpentry/masonry services to any person or groups needing help with work he was able to perform.”

Potter claims that in 1987 he “chose to give up his own independent business” and work only as an “hourly employee.” He explains that in 1986 he hired a helper, Steve Anderson, whom he believed to be an independent contractor. The Department, however, determined that Anderson was an employee and that Potter was required to make unemployment insurance contributions. Potter decided then to become an employee himself. In practice, this meant that he asked employers to pay him by the hour instead of by the job. He did not specifically tell them that he was no longer operating his own business, nor did he ask any employer to withhold payroll taxes or to make employer contributions.

We hold that substantial evidence supports the hearing officer’s finding that Potter had an independently established business in 1987.

As to the first criterion, freedom from control, we recognize four factors to be considered:

(1) direct evidence of the right or exercise of control;
(2) method of payment;
(3) furnishing of equipment; and
(4) right to fire.

Johnson v. Dept. of Labor and Industry (1989), 240 Mont. 288, 292, 783 P.2d 1355, 1358, citing Sharp v. Hoerner Waldorf Corp. (1978), 178 Mont. 419, 425, 584 P.2d 1298, 1301-1302. Independent contractor status is usually established only by “a convincing accumulation of these and other tests,” while a finding of employee status can often be “solidly proved on the strength of one of the four items.” Sharp, 584 P.2d at 1302; Walling v. Hardy Construction (1991), 247 Mont. 441, 807 P.2d 1335. We have consistently held, however, that statutes used as guides in determining a worker’s status “must not be distorted to allow persons who are truly independent in their operation to be held employees merely for tax purposes and resulting benefits derived from an employer-employee relationship.” St. Regis Paper Company v. Unemployment Compensation Comm’n (1971), 157 Mont. 548, 552, 487 P.2d 524, 526, quoted in Johnson, 783 P.2d at 1358.

The hearing officer concluded that three of the four factors indicated that Potter was an independent contractor in 1987. First, he found direct evidence of Potter’s right of control in the following facts: each of the employers was interested only in the completed project; most of them were not capable of directing Potter’s day-to-day work activities; and Potter usually performed the work on his own time schedule.

Potter argues that each of the respondent employers possessed and exercised the right to control his work because each one hired him for a specific job, and most of them were at the job site daily, supervising his work and giving directions.

The traditional test of employee status is whether the employer controls only the end result of the work, which indicates that the worker is an independent contractor, or whether the employer controls the means by which the work is accomplished, which indicates that the worker is an employee. Johnson, 783 P.2d at 1358. An employer of an independent contractor, however, “is entitled to as much control of the details of the work as is necessary to ensure that he gets the end result that he bargained for.” Walling, 807 P.2d at 1339.

Here, the record shows that none of the respondent employers controlled the days or hours of Potter’s work, and that all of them except John Lohden Construction relied on Potter’s expertise to complete the job. For example, Lisa Beneke testified that Beneke Construction had no experience with full-wall foundation forms and therefore hired Potter for his expertise in using his own forms to pour a full-wall foundation. The hearing officer found that Potter usually was free to determine the individual means of accomplishing the work he had agreed to do for these employers.

Second, the hearing officer found that Potter provided almost all of the necessary tools, forms, and equipment for the respondent employers’ projects, and that his use of rental equipment owned by Kopfman was not inconsistent with independent contractor status.

Potter claims that the only tools he provided were “small hand tools” and that each of the respondents furnished all the equipment necessary for his particular project. In particular, he claims that the two construction companies, Lohden and Beneke, provided “all” or “90 percent” of the tools he used on their projects. On the other hand, Potter admits that when he worked for Bruton, the pharmacist, he used “a table saw that [Bruton] was considering purchasing from [Potter],” and he testified at the Department hearing that he had supplied a cement mixer and a generator for the Kopfman job.

The respondent employers testified that they had purchased materials ordered by Potter and that Potter was free to hire assistants or obtain needed equipment independently.

When an employer furnishes valuable equipment, an employment relationship almost invariably exists. Solheim, 677 P.2d at 1038. Here, however, the record indicates that among the respondent employers, only Kopfman can be said to have furnished valuable equipment.

Third, the hearing officer found that the respondent employers did not have an absolute right to fire Potter, since either party could terminate the relationship without liability only if the end result were not accomplished as agreed. In Solheim, 677 P.2d at 1039 (quoting Larson, Workmen’s Compensation Law, Vol. 1C, § 44.35), we described the right to fire as the power to control, noting that:

The absolute right to terminate the relationship without liability is not consistent with the concept of independent contract, under which the contractor should have the legal right to complete the project contracted for and to treat any attempt to prevent completion as a breach of contract.

Here, Potter asserts that he could have quit without incurring liability; he also points out that Kopfman laid him off without incurring liability. The respondent employers testified that they believed they could terminate the relationship but were not sure of the consequences. None of them had executed a written contract, and damages for failure to perform had not been discussed.

The fact that neither Potter nor the employers were certain of their rights indicates that the employers did not have an absolute right to fire Potter. As we held in Solheim, 677 P.2d at 1039, the absence of an absolute right to terminate the relationship without liability supports the finding of an independent contractor relationship. Also see Johnson, 783 P.2d at 1359 (testimony indicating that neither party was certain of his rights as to the ability to terminate supported a finding of an independent contractor relationship).

With regard to the fourth factor, method of payment, the hearing officer found that Potter “was free to bid or it appears did bid the work performed based on his normal hourly rate.” He concluded that the fact that the respondent employers paid Potter on an hourly basis was not conclusive evidence of an employer-employee relationship.

Potter insists that he was paid by the hour and not for the job, and that when he was an independent contractor he bid and was paid by the job. All of the respondent employers except Beneke Construction paid Potter weekly, for the number of hours worked. Beneke Construction paid him hourly wages at the end of each job.

While payment on a time basis is strong evidence of employment status, Solheim, 677 P.2d at 1038, we have observed before that in the construction industry carpenters often work on an hourly basis. Johnson, 783 P.2d at 1359. Hourly pay therefore is not conclusive evidence of either an independent contractor or an employment status.

In short, substantial evidence supports the hearing officer’s findings of fact with regard to the four factors we recognized in Sharp, Solheim, and Johnson. Because three of the factors indicated that Potter was not an employee, and the fourth was not conclusive, the District Court concluded correctly that Potter was an independent contractor and therefore not entitled to unemployment insurance benefits for 1987.

AFFIRMED.

CHIEF JUSTICE TURNAGE, JUSTICES McDONOUGH and GRAY concur.

JUSTICE TRIEWEILER

dissenting.

I dissent from the opinion of the majority. I especially disagree with the majority’s treatment of appellant’s relationship with all of the respondents as if they were the same.

I conclude, based on the uncontroverted evidence, that Potter established an employer/employee relationship with John Bruton, Ed Kopfman, Beneke Construction, and John Lohden Construction as a matter of law.

The majority correctly notes that § 39-51-201(14), MCA, establishes a two-part test for determining whether someone rendering service for another is an independent contractor. It is not sufficient that petitioner has been or is engaged in an independent occupation or trade. He must also have been free from control over the performance of his services.

As pointed out by the majority, in determining whether there was freedom from control we consider four factors: “(1) direct evidence of right or exercise of control; (2) method of payment; (3) furnishing of equipment; and (4) right to fire.” Johnson v. Dept. of Labor & Industry (1989), 240 Mont. 288, 292, 783 P.2d 1355, 1358.

While it is true that the first factor was disputed by each of the alleged employers, it is not correct that the remaining factors were disputed. Plaintiff testified, and all four of the above employers agreed, that he was paid by the hour for his services, rather than based on a contract bid. In Solheim v. Tom Davis Ranch (1984), 208 Mont. 265, 273, 677 P.2d 1034, 1038, we held that:

Method of Payment. Payment on a time basis is strong evidence of employment status. Sharp [v. Hoerner Waldorf Corp. (1978)] 178 Mont. at 425, 584 P.2d at 1302; Larson, Section 44.33(a), p. 8-74. Payment on a completed project basis is consistent with, but not conclusive of, independent contract status. Larson, Section 44.33(c), p. 8-93.

Potter also testified that each of the above respondents provided him with some of the tools or equipment that were necessary for the work that he did for them. John Bruton acknowledged that he provided the radial arm saw, and may have provided a few other tools. Ed Kopfman did not discuss the issue of tools. Lisa Beneke did not discuss tools, and John Lohden did not bother to show up and testify about anything. Therefore, the third part of the four-part test for control is also undisputed with regard to these four respondents. We previously held in Solheim that:

According to Larson, when an employer furnishes valuable equipment, an employment relationship almost invariably exists, but the test does not cut in both directions with equal force. Proof showing a worker furnished his own equipment is not necessarily fatal to a finding of employee status. Larson, Section 44.34, pp. 8-95 - 8-104.

Solheim, 677 P.2d at 1038.

Finally, Potter testified that he could have terminated his employment with any of the above respondents at any time without incurring liability to them and that they could have terminated his services without incurring further liability to him. He pointed out, in fact, that both Lohden and Beneke did terminate his services while work remained to be done. I do not agree with the majority’s conclusion that there was substantial evidence to support the hearing officer’s finding that these four respondents did not have an absolute right to fire Potter. Lohden did not appear, and therefore, never answered the questions. Beneke, when asked, did not respond directly to the question. However, both Kopfman and Bruton testified unequivocally that they could have discharged Potter at any time without incurring liability and that he could have quit at any time without incurring liability. In Solheim, we pointed out that:

Larson states at Section 44.35 pp. 8-116 - 8-122.
“The power to fire ... is the power to control. The absolute right to terminate the relationship without liability is not consistent with the concept of independent contract, under which the contractor should have the legal right to complete the project contracted for and to treat any attempt to prevent completion as a breach of contract.” ...
“Examples could be multiplied in which most of the other indicia — method of payment, furnishing of equipment, skilled nature of the work, sometimes provision by the employee even of his own assistants and insurance, and not infrequently contractual disavowals of right of control and of employment relation — have pointed toward independent contractorship; yet the one element of right to fire, with its attendant implied right to control, has carried the day for employment relationship.

Solheim, 677 P.2d at 1039.

According to my reading of the record in this case, there was no evidence to support the hearing officer’s findings that three of the four factors considered in determining whether the respondents exercised control were not present. Based on my review of the record, the undisputed evidence establishes that three of the four factors were present. Therefore, as a matter of law, it must necessarily be concluded that at the times in question Potter was an employee of these four respondents. As we have previously held:

In Sharp v. Hoerner Waldorf Corp. (1978), 178 Mont. 419, 584 P.2d 1298, this Court developed a four-part test for determining whether or not an employer has the right of control: (1) direct evidence of right or exercise of control; (2) method of payment; (3) furnishing of equipment; and (4) right to fire. Sharp, 178 Mont. at 425, 584 P.2d at 1301-02. A finding that an individual is an independent contractor demands “ ‘a convincing accumulation of these and other tests,’ ” while a finding of employee status “ ‘can if necessary often be solidly proved on the strength of one of the four items.’ ” Sharp, 178 Mont. at 425, 584 P.2d at 1302 (quoting 1C A. Larson, Workmen’s Compensation Law § 44.10 at 8-35 (1952)).

Walling v. Hardy Construction (1991), 247 Mont. 441, 447, 807 P.2d 1335, 1338-39.

Since, by the undisputed evidence there was not a significant accumulation of these factors to support a finding of independent contract status, I conclude that the petitioner, Dave Potter, was an employee of the four respondents previously mentioned, and that the judgment of the District Court in their favor should be reversed.

I would affirm the District Court’s conclusion that as to Mort Arkava, Potter was an independent contractor.


author: CHIEF JUSTICE TURNAGE JUSTICE TRIEWEILER

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. GARY ERNEST HENNING, Defendant and Appellant.
    No. 93-083.
    Submitted on Briefs April 22, 1993.
    Decided May 27, 1993.
    50 St.Rep. 626.
    853 P.2d 1223.
    258 Mont. 488.
    See C.J.S. Motor Vehicles § 633(4).

      For Defendant and Appellant: Donald Spadone, Hamilton.
    For Plaintiff and Respondent: Joseph P, Mazurek, Attorney General, Paul D. Johnson, Assistant Attorney General, Helena; George Corn, County Attorney, Gerald D. Williams, Deputy County Attorney, Hamilton.
   CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Gary Ernest Henning (Henning) appeals an order denying his Motion in Limine to suppress the results of a blood alcohol test. The order was entered on December 30, 1992, in the Fourth Judicial District, Ravalli County. This appeal followed the entry of the Amended Judgment on February 2, 1993, in Ravalli County, which county was then in the newly-created Twenty-first Judicial District. We affirm the District Court.

We consolidate and restate the issues raised by Henning as:

Did the District Court err in failing to suppress the results of Henning’s voluntary blood alcohol test?

On April 16,1992, Henning was arrested and charged with driving under the influence of alcohol (DUI), a misdemeanor in violation of § 61-8-401, MCA. After the arrest, the arresting officer asked Henning to submit to a breath intoxilyzer test. Henning refused. However, he asked the arresting officer to take him to Marcus Daly Memorial Hospital in order that a blood alcohol test could be administered at his expense. The arresting officer complied with this request, and a blood sample was taken by a registered nurse at the hospital.

Following a bench trial in Justice Court, Henning was convicted of DUI. Henning appealed his conviction to the District Court. Prior to trial, Henning filed a Motion in Limine in which he asked the court to suppress the results of the blood alcohol test received after he was arrested. Henning alleged the results of the blood alcohol test were inadmissible. After considering the briefs and argument of Henning and the State, the District Court denied the motion. The District Court ruled the blood alcohol test was relevant and admissible, and that the State had demonstrated a compelling interest outweighing Henning’s privacy interest.

After his Motion in Limine was denied, Henning entered into a plea bargain with the State. He agreed to plead guilty and be sentenced for the DUI offense upon the condition that should this Court hold that the results of the blood alcohol test were inadmissible, he will be allowed to withdraw his plea. In addition, Henning asked the District Court to stay any execution of sentence pending this appeal. With the consent of the State, the District Court approved the plea bargain, accepted Henning’s guilty plea, and imposed sentence. The District Court stayed the execution of Henning’s sentence pending appeal.

Did the District Court err in failing to suppress the results of Henning’s voluntary blood alcohol test?

In denying Henning’s Motion in Limine, the District Court ruled that the State had demonstrated a compelling interest which outweighed Henning’s privacy interests. Therefore, the blood alcohol test was admissible under § 50-16-535(1)(i), MCA. In addition, the District Court ruled the blood alcohol test was relevant and admissible in light of State v. Kirkaldie (1978), 179 Mont. 283, 587 P.2d 1298.

Henning argues that under § 50-16-535, MCA, the results of the blood alcohol test are part of his private medical records and privileged information. Therefore, under § 50-16-535(l)(i), MCA, the State must show a compelling interest which outweighs the privacy interests of the patient in order for the results to be admissible. Henning contends the State failed to meet this burden.

While we agree with the District Court’s reliance on Kirkaldie, we do not agree with the court, and Henning, that § 50-16-535, MCA, determines whether the blood alcohol test is admissible into evidence. Section 50-16-535(1)(i), MCA, provides:

(1) Health care information may not be disclosed by a health care provider pursuant to compulsory legal process or discovery in any judicial, legislative, or administrative proceeding unless:
(i) a court has determined that particular health care information is subject to compulsory legal process or discovery because the party seeking the information has demonstrated that there is a compelling state interest that outweighs the patient’s privacy interest^]

When this Court reviews the District Court’s conclusions of law regarding the application of a statute, our standard of review is “whether the tribunal’s interpretation of the law is correct.” Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474, 803 P.2d 601, 603.

The exceptions listed in § 50-16-535, MCA, apply to the discovery of health care information. As provided in § 50-16-536(6), MCA:

(6) Production of health care information under 50-16-535 ... does not in itself constitute a waiver of any privilege, objection, or defense existing under other law or rule of evidence or procedure.

The Official Comments to § 50-16-535, MCA, provide:

It is important to note that this section in no way supersedes or modifies the state’s rules of evidence. ... [0]nce health-care information has been discovered under this section, the normal rules of evidence govern its use at trial.

Henning does not contend that the blood alcohol test was not subject to discovery. Therefore, we limit our discussion to whether the District Court erred in failing to suppress the blood alcohol test results.

Although § 50-16-535, MCA, is inapplicable to the main issue in this appeal, we hold, pursuant to Kirkaldie and § 61-8-404(1)(a), MCA, that the result reached by the District Court was correct. Where the result reached by the District Court is correct, it will be upheld on appeal regardless of the reasons given for the conclusion. Jerome v. Pardis (1989), 240 Mont. 187, 192, 783 P.2d 919, 922.

Section 61-8-404(l)(a), MCA, provides:

(1) Upon the trial of any criminal action or other proceeding arising out of acts alleged to have been committed by any person in violation of 61-8-401 or 61-8-406:
(a) evidence of any measured amount or detected presence of alcohol in the person at the time of the act alleged, as shown by an analysis of his blood, breath, or urine, is admissible[.]

We note however, that when a blood alcohol test is based upon the implied consent law, § 61-8-402, MCA, the admissibility into evidence of blood alcohol content is also subject to the procedural safeguards of § 61-8-404(1)(b)(i) and (ii), MCA, and the Administrative Rules of Montana. See e.g., State v. McDonald (1985), 215 Mont. 340, 697 P.2d 1328.

In this case, the withdrawal of Henning’s blood was not based upon the implied consent law. It was the result of his own request after he refused to take the breath test offered to him. Therefore, Henning consented to the taking of a blood sample. “In this state, evidence concerning the taking, analysis and result of a blood sample taken from [a] defendant with his consent is admissible in evidence.” Kirkaldie, 587 P.2d at 1302.

We hold that the District Court did not err in failing to suppress the results of Henning’s voluntary blood alcohol test. Once the evidence was discovered, it was no longer privileged information and the State was entitled to move for its admission at trial. The District Court is affirmed.

JUSTICES HARRISON, HUNT and WEBER concur.

JUSTICE TRIEWEILER

specially concurring.

I concur with the result reached by the majority. However, I would reach that result for different reasons.

It is correct that § 50-16-535, MCA, pertains to the discovery of health care information, rather than its admissibility. However, in his motion in limine, defendant relied on § 50-16-535, MCA, as his basis for arguing that his records were privileged, and therefore, inadmissible.

If § 50-16-535, MCA, is the basis for the privilege that defendant asserts, then I conclude that the records in this case were an exception to the privilege by the terms of that same statute, which provides in part that:

(1) Health care information may not be disclosed by a health care provider pursuant to compulsory legal process or discovery in any judicial, legislative, or administrative proceeding unless:
(j) the health care information is requested pursuant to an investigative subpoena issued under 46-4-301.

In this case, the health care records that defendant sought to suppress were obtained by the prosecuting attorney pursuant to an investigative subpoena issued by the District Court after a hearing which was held on May 23, 1992. Since the statute relied upon by defendant contained, by its own terms, an exception to the privilege that it established, and since the results of blood tests are otherwise relevant and admissible in the type of prosecution that this case involved, I would affirm the judgment of the District Court.


author: JUSTICE GRAY

text:
    TARA MINERVINO, Plaintiff and Appellant, v. UNIVERSITY OF MONTANA, Defendant and Respondent.
    No. 92-585.
    Submitted on Briefs March 18, 1993.
    Decided May 28, 1993.
    50 St.Rep. 629.
    853 P.2d 1242.
    258 Mont. 493.

      See C.J.S. Venue § 53.
    F or Plaintiff and Appellant: Stephen D. Roberts, Bozeman; Erik B. Thueson, Helena.
    For Defendant and Respondent: Neil E. Ugrin and Roger T. Witt, Ugrin, Alexander, Slovak, Great Falls.
   JUSTICE GRAY

delivered the Opinion of the Court.

Tara Minervino appeals from an order of the Eighth Judicial District Court, Cascade County, granting the University of Montana’s motion for change of venue. We affirm.

Appellant Tara Minervino (Minervino) filed a complaint against the University of Montana (University) alleging that the University failed to protect her from an assault which occurred on its campus in Missoula, Montana. Filed in the Eighth Judicial District Court, the complaint asserts that venue is proper in Cascade County pursuant to § 25-2-126(3), MCA, because the University is a political subdivision which is located in Cascade County by virtue of offering classes and maintaining an office at Malmstrom Air Force Base.

The University moved for change of venue to the First Judicial District Court, Lewis and Clark County, relying on § 25-2-126(1), MCA. The District Court granted the University’s motion. Minervino appeals.

Did the District Court err in granting the University’s motion to change venue from Cascade County to Lewis and Clark County?

The District Court determined that the University is the “state,” rather than a “political subdivision,” for venue purposes. On that basis, it considered the alternative venue locations contained in § 25-2-126(1), MCA, and concluded that venue was proper only in Missoula County, where the claim arose, or in Lewis and Clark County. The court granted the University’s motion for change of venue to Lewis and Clark County.

Minervino argues first that venue for this action is properly in Cascade County pursuant to § 25-2-122(1), MCA, which provides that the proper place of trial for a tort action is the county in which the defendant resides at the start of the action. She asserts that because the University has a campus location in Cascade County, venue is proper there. The record reflects that Minervino did not present this argument to the District Court, relying there only on § 25-2-126(3), MCA, and a waiver estoppel theory. This Court will not consider issues or theories of the case raised for the first time on appeal. Weaver v. Law Firm of Graybill, et al. (1990), 246 Mont. 175, 180, 803 P.2d 1089, 1093.

Minervino’s next contention is that the University is a “political subdivision” under § 25-2-126(3), MCA, rather than the “state” under § 25-2-126(1), MCA. Therefore, she argues, since trial of an action against a political subdivision is proper in the county where the claim arose or where the political subdivision is located, the University’s campus in Great Falls establishes proper venue in Cascade County. We disagree.

Montana’s venue statute for actions against the state or a political subdivision is § 25-2-126, MCA, which provides in pertinent part:

(1) The proper place of trial for an action against the state is in the county in which the claim arose or in Lewis and Clark County. In an action brought by a resident of the state, the county of his residence is also a proper place of trial.
(3) The proper place of trial for an action against a political subdivision is in the county in which the claim arose or in any county where the political subdivision is located.

Resolution of the issue before us requires definition of the terms “state” and “political subdivision” contained in subsections (1) and (3), respectively, of § 25-2-126, MCA.

It is true, as Minervino asserts, that the Montana Code Annotated contains more than one statutory definition of each of these terms and that no statute specifically mandates that the definitions contained therein apply to the terms as used in § 25-2-126, MCA. It also is clear, however, that the venue provisions in subsections (1) and (3) of § 25-2-126, MCA, previously were codified at Title 2, Chapter 9 of the Code.

Prior to 1985, provisions substantively identical to those at issue here were found at § 2-9-312, MCA. That statute was amended (in nonsubstantive ways) and recodified as an integral part of Title 25, Chapter 2, part 1 pursuant to Section 18(2) of Chapter 432, Montana Session Laws, 1985. It was renumbered as § 25-2-126(1) and (3), MCA, by the Code Commissioner. Our function is to effectuate the intent of the legislature. State ex rel. Roberts v. Pub. Serv. Comm’n (1990), 242 Mont. 242, 246, 790 P.2d 489, 492. This clear legislative history mandates a conclusion that the definitions contained in Title 2, Chapter 9, apply to the terms used in § 25-2-126, MCA.

Section 2-9-101(7), MCA, defines “state” as “the state of Montana or any office, department, agency, authority, commission, board, institution, hospital, college, university, or other instrumentality thereof.” “Political subdivision” is defined in § 2-9-101(5), MCA, to mean “any county, city, municipal corporation, school district; special improvement district or taxing district, or any other political subdivision or public corporation.” Applying these definitions to the issue before us, it is unequivocal that the University is the “state” for § 25-2-126, MCA, purposes.

Minervino asserts that the University argued in Kendall v. State (1988), 231 Mont. 316, 752 P.2d 1091, that it is not the “state” for venue purposes. As a result, she argues that the University has waived its right to contest venue on the basis that it is the “state,” or that it is estopped from arguing contrary to its position in Kendall.

Minervino cites to no authority in support of her waiver or estoppel theory regarding venue. In addition, estoppel theories — both judicial and equitable — rest on representations of facts. See DeMers v. Roncor, Inc. (1991), 249 Mont. 176, 814 P.2d 999; Dagel v. City of Great Falls (1991), 250 Mont. 224, 819 P.2d 186. Venue is not a question of fact; it is a question of law involving the application of venue statutes to pleaded facts. We conclude that the University is not precluded from asserting that it is the “state” for venue purposes in this case.

Having concluded that the University is the “state” for purposes of § 25-2-126(1), MCA, it remains only to apply that statute to the facts before us. Section 25-2-126(1), MCA, provides that venue for actions against the state — here, the University — is proper in one of three counties: 1) where the claim arose; 2) Lewis and Clark County; or 3) the county of plaintiff’s residence if plaintiff is a Montana resident. Here, Minervino’s claim did not arise in Cascade County; nor does she assert that she is or was a resident of Cascade County at any relevant time. Therefore, Cascade County is not an appropriate venue for this action under § 25-2-126, MCA.

When an action is filed in an improper venue, “a defendant may move for a change of place of trial to a designated county.” Section 25-2-114, MCA. Pursuant to § 25-2-126(1), MCA, proper venues for Minervino’s action are Missoula County, where the claim arose, or Lewis and Clark County. The University moved for change of venue to Lewis and Clark County, a proper venue under the statute. We hold that the District Court did not err in granting the University’s motion.

AFFIRMED.

JUSTICES HARRISON, HUNT, TRIEWEILER and WEBER.