author: MR. JUSTICE HARRISON

text:
    In re the MARRIAGE OF LEAH D. PETERSON, Petitioner and Respondent, and NORMAN W. PETERSON, Respondent and Appellant.
    No. 89-176.
    Submitted on Briefs Aug. 3, 1989.
    Decided Aug. 23, 1989.
    778 P.2d 402.
    J. Cort Harrington, Jr., Helena, for petitioner and respondent. David N. Hull, Helena, for respondent and appellant.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

This is an appeal from the First Judicial District Court, Lewis and Clark County. In this marriage dissolution action, the appellant seeks reversal of the trial court’s amended judgment and reinstatement of the original judgment which granted respondent a lesser share in the marital estate. We affirm the trial court’s amended judgment.

The issues on appeal are:

1. Did the District Court abuse its discretion by including premarital assets in the marital estate?

2. Did the District Court award more than 100 percent of the marital estate?

Leah Peterson and Norm Peterson met in early 1986. Sometime during the spring of 1986 the parties opened a joint checking account when they became engaged. Norm moved in with Leah in the home she owned. Leah maintained a separate account from which she made payments for this house and paid household bills.

From the time the parties began commingling funds in the joint checking account, both parties deposited their paychecks in the joint account. Norm’s monthly income was approximately $2,500 and Leah earned about $1,800 per month. After the parties separated Leah withdrew the $1,735 remaining in the joint account, using the monies to pay joint debts nearly equal to the amount she withdrew.

Prior to their marriage the parties decided to build a home on Cloverview Drive in Helena. Norm made a $500 down payment on the lot. To finance the new home, Leah agreed to sell her home in Helena and Norm agreed to sell a house he owned in Browning, Montana. Leah sold her home, receiving $13,400 in equity from the sale and deposited $12,600 in the couple’s joint account. Of this amount, Norm and Leah used $8,000 as a down payment on the Cloverview home. Norm’s house in Browning never was sold.

Also prior to marriage, the couple jointly borrowed $4,000 in order to buy their wedding rings, using a boat and boat trailer owned by Norm as collateral. At this time Norm transferred ownership of the trailer from himself to himself and Leah. He also gifted one-half of the boat to Leah.

Norm received $7,000 from his insurance company for coverage of a wrecked Datsun 280ZX, which money was deposited in the couple’s joint account prior to marriage. This money was used for various expenses including a $2,000 pre-marriage trip taken by Norm. Some of the insurance money was also used to make payments on cars the couple purchased after they were married, including a 1984 Buick Skylark which Leah received and on which she also makes payments.

In April 1986, also before the marriage the parties traded a 1980 Honda owned by Leah, having a value of $1,500 for a 1986 Toyota 4 Runner. With the trade the balance owing on the Toyota was $15,000. Norm received the Toyota and continues to make payments on it. Prior to the trade, Leah paid $1,800 to rebuild the motor of the Honda.

On October 3, 1986, Norm and Leah were married in Las Vegas, Nevada.

The troubled marriage was short-lived and the couple separated in January, 1987. Leah filed a petition for Declaration of Invalidity on March 11, 1987, alleging that she had been induced into the marriage by Norm’s fraudulent promises that the parties would share equally in financial contributions to the marriage, he would control his drinking and seek counseling for his temper, and he would sell his house in Browning. In response Norm affirmatively alleged that he too was fraudulently induced to marry because he did not know of the number, nature and extent of Leah’s financial obligations prior to the marriage and that Leah failed to tell him one of her daughters from a former marriage would be living with them. Norm also asked for an annulment, stating that had Leah disclosed the above-listed information to him he would not have married her. In a later pleading Norm requested that the trial court grant an annulment or, in the alternative, a dissolution.

After the parties separated, the Cloverview home sold with the parties receiving a net of $2,236, all of which was kept by Leah. Norm also paid Leah an additional $3,000 in recognition of the fact that down payment for the Cloverview home came from the proceeds of the sale of her home. Since Norm’s Browning property never sold, Leah’s contribution to the Cloverview home was disproportionate.

The boat and trailer, half of which was now owned by Leah, was sold after the parties separated. Of the $6,000 price received, $5,400 remained after a sales commission was deducted. Norm used $4,300 of the proceeds to pay off the loan remaining on the rings and other joint debts.

The annulment/dissolution was originally heard on December 7, 1987. From this trial the District Court judge found it impossible to make a decision because of the manner in which evidence was presented. By stipulation, the case then went before a special master, pursuant to Rule 53, M.R.Civ.P.

The special master apportioned the assets and debts of the parties and held that a dissolution rather than an annulment was proper. The special master found Leah’s assets, prior to commingling consisting of her home, the 1980 Honda with new motor, a diamond which went into Norm’s wedding ring, and personal property, to have a value of $18,450. Norm’s assets prior to commingling, including money from insurance, boat and trailer, and various business and real property interests, were valued at $177,950.

The marital estate value was placed at $14,191. Included in the martial estate were:

1. the boat and trailer $ 5,400.00
2. rings (his & hers) 4,520.00
3. proceeds from the couple’s Cloverview home 2,236.00
4. cash from joint checking account $1,735.00
5. equity in the Toyota 300.00
6. equity in the Buick 0.00
TOTAL: $14,191.00

The estate was then divided as follows:

To Norm Value
1. Toyota 300.00
2. Rings in possession 2,100.00
3. Vz interest in boat & trailer (less Vz joint debts paid from proceeds of sale of boat & trailer) 2.700.00 (2.150.00)
TOTAL: $2,950.00
To Leah Value
1. Buick 0.00
2. Cash from joint account (less joint debts paid) 1.735.00 (1.730.00)
3. Rings in possession 2.420.00
4. Vz interest in boat & trailer (less Vz joint debts paid from proceeds) (2.150.00)
TOTAL: $5,211.00

In addition to the distribution of the marital assets, the special master decided Norm still owed Leah $550, one-half of the amount remaining from sale of the boat and trailer after payment of joint debts ($5,400 — $4,300 = 1100 — Vz = $550). Also, Norm was to pay Leah another $7,664 to compensate her for selling her home to enable the couple to make a down payment on the Cloverview home. The figure was arrived at by taking:

the amount Leah received for her home $13,400
less the amount Leah received on sale of the Cloverview home (2,236)
less additional money Norm gave Leah (3,000)
less the down payment Norm paid on the Cloverview lot (500)
equals the amount needed to replace the home equity Leah “lost” in the marriage = $ 7,664

The District Court judge adopted most of the report of the special master, with the exception of the finding regarding Norm’s payments to Leah of $7,664 for lost equity. In an opinion dated December 7, 1988, the District Court held that such a payment would have the effect of awarding more than 100 percent of the marital estate.

On February 1, 1989, the District Court reassessed its earlier decision and granted Leah’s motion for new trial or to alter or amend the December 7 judgment. The effect of the February 1 decision was that the District Court fully adopted the special master’s report, ordering Norm to make an additional $7,664 cash payment to Leah. A February 27, 1989 judgment of the District Court ordered Norm to pay Leah $7,664 and $550 for a total judgment of $8,214.

The District Court was persuaded by Leah’s argument that the court failed to consider that the cash award was in lieu of her interest in Norm’s premarital property. Citing the special master’s Finding of Fact No. 12, the District Court pointed out that the special master recognized the need to consider premarital assets if there was to be an equitable distribution:

“In order to value each party’s individual property, therefore, it is necessary to consider as nearly as possible the property owned by each prior to commingling of funds. Similarly, joint assets and obligations were acquired after the engagement but before the actual marriage. Therefore, consideration of assets of the marriage cannot be limited to only assets and obligations actually acquired after the date of marriage. Rather, consideration must be given to all the parties’ mutual financial transactions. (Emphasis supplied by the District Court.)”

This, according to the District Court, explains how the special master could distribute more money than was found to be in the marital estate. The marital estate included all assets involved in the parties’ joint financial transactions from the time commingling began, not merely from the date of marriage.

I.

Did the District Court abuse its discretion by including premarital assets in the marital estate?

The standard of review for property distribution has been clarified recently in In re Marriage of Hall (Mont. 1987), [228 Mont. 36,] 740 P.2d 684, 686, 44 St.Rep. 1321, 1323, where we stated:

“We have concluded that in a property distribution review in marriage dissolution, this Court will reverse a district court only on a showing that the district court has acted arbitrarily or has committed a clear abuse of discretion, resulting in either instance in substantial injustice.”

Including the premarital assets in the marital estate is not an abuse of discretion, nor does it result in substantial injustice. There is evidence to support inclusion of the premarital assets in order that an equitable distribution be made. Leah sold her only substantial premarital asset, her home, so that the parties could build the Cloverview home. Norm’s contribution was to have been his Browning house, but the house never sold. While Leah was given $2,236 in cash proceeds from the sale of the Cloverview home and an additional $3,000 payment from Norm, she has lost the equity she had in her home. Norm, on the other hand, still owns his Browning house.

During their short relationship, Leah did contribute to the maintenance of Norm’s Browning property. Money from the joint checking account, to which she contributed, was used to pay taxes and purchase a stove for the Browning property. However brief the interest, these payments evidence Leah’s interest in the premarital asset.

Inclusion of premarital assets in the marital estate in the case at bar correlates with our previous holding in In re the Marriage of J.J.C. (Mont. 1987), [227 Mont. 264,] 739 P.2d 465, 44 St.Rep. 1068, where we held it was proper to award a cash payment to the wife rather than force the division of property in which the wife had only a brief interest. In J.J.C, as in the instant case, the marriage lasted only a few months and the wife’s financial contributions to property were minimal. While finding that the wife made no contribution to the acquisition or preservation of the husband’s estate, this Court held a $15,000 payment to the wife was nonetheless proper to compensate her for her interest obtained in the husband’s property through their marriage.

It should be noted that a decision requiring payment by one party to the other in a dissolution proceeding also finds support in statutory law. Section 40-4-202(1), MCA, states that a court may “finally equitably apportion between the parties the property and assets belonging to either or both, however and whenever acquired and whether the title thereto is in the name of the husband or wife or both.”

The statute goes on to list factors which the court must consider in making the property distribution. The record clearly shows that the special master considered these factors in making his findings and that the District Court adopted the master’s report in toto in its February, 1989 decision.

We hold the District Court properly included premarital assets in the marital estate.

II.

Did the District Court award more than 100 percent of the marital estate?

Norm argues that by ordering him to pay an additional $7,664 to Leah the District Court is distributing more assets than the marital estate contains. In support of this argument he cites In re the Marriage of Lippert (Mont. 1981), [_ Mont. _,] 627 P.2d 1206, 38 St.Rep. 625, which expressly prohibited a district court from awarding more than 100 percent of the marital estate.

Lippert is a correct statement of the law. A court cannot distribute what is not there. The District Court, however, explained its reasoning in ordering the additional payment. In the above-cited portion of the February 1 decision, quoting special master’s Finding of Fact No. 12, the District Court agreed that the marital estate included assets acquired prior to the date of marriage. Noting that the special master’s report was confusing in regard to what was in the marital estate, the District Court recognized that the special master intended to include premarital assets. By including premarital assets, the marital estate is adequate to provide the additional payment from Norm to Leah in compensation for the loss she suffered by selling her home in order to contribute to the couple’s Cloverview home.

The couple’s premarital assets were properly included in the marital estate and we find that the District Court did not distribute more than 100 percent of the marital estate.

Affirmed.

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


source: Caselaw Access Project

author: MR. CHIEF JUSTICE TURNAGE

license: Public Domain

text:
    The STATE OF MONTANA, Plaintiff and Respondent, v. MICHAEL DUANE STILLINGS, Defendant and Appellant.
    No. 88-609.
    Submitted on Briefs Aug. 3, 1989.
    Decided Aug. 24, 1989.
    778 P.2d 406.

      E. June Lord, Great Falls, for defendant and appellant.
    Marc Racicot, Atty. Gen., Helena, John Paulson, Asst. Atty. Gen., Helena, Patrick Paul, County Atty., Great Falls, Steven Hudspeth, Deputy County Atty., Great Falls, for plaintiff and respondent.
   MR. CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Defendant Michael Duane Stillings appeals his conviction by the District Court of the Eighth Judicial District, Cascade County, for committing perjury by making two, inconsistent, material statements under oath in an official proceeding in violation of § 45-7-201(6), MCA (1987). We affirm.

The defendant raises the following issues on appeal. Did the District Court err in denying the defendant’s motion to dismiss the information when the District Court found that either:

1) the defendant’s act of perjury under § 45-7-201(6), MCA (1987), was not complete, and therefore the statute of limitations did not begin to run until the defendant made a material statement under oath that was inconsistent with this previous testimony; or, in the alternative

2) under § 45-1-206(1), MCA (1987), the defendant’s out-of-state incarceration tolled the statute of limitations on his first statement so that both statements fell within the five year statute of limitations?

On the night of February 23, 1971, Vicki Renville was raped and bludgeoned to death in the Wadsworth Park area of Great Falls, Montana. During the resulting murder trial, Michael Stillings testified on October 4, 1971, that he and Fred Lee Perry raped Renville and that when she threatened to “rat,” Perry repeatedly struck Renville on the head with a tire iron. Perry was subsequently convicted of second degree murder. See State v. Perry (1973), 161 Mont. 155, 505 P.2d 113 (affirming the District Court decision). Stillings pled guilty to the same charge and received a sixty-year sentence with ten years suspended.

Stillings was incarcerated in the Montana State Prison on November 29, 1971. On December 6, 1971, he was transferred to the California prison system under the provisions of the Interstate Correctional Compact Agreement to prevent his confinement in the same prison as Perry. California paroled Stillings to Washington on August 18, 1978. On February 14, 1979, Stillings was arrested and subsequently convicted of armed robbery in Washington. After he served five years of his thirty-five year sentence, Washington paroled Stillings to Montana on detainer on April 20, 1984. Montana revoked Stillings’ parole on his second degree murder charge returning him to the Montana State Prison.

In 1986 the California prison system transferred Perry to Deer Lodge placing Stillings and Perry in the same prison for the first time. Stillings soon indicated that he would recant his previous testimony against Perry, and Perry applied for a new trial. During the new trial hearing on July 24, 1987, Stillings disavowed his 1971 testimony against Perry and stated under oath that he, and not Perry, had killed Vicki Renville. The trial court, however, did not find Stillings’ testimony credible and refused to grant Perry a new trial. See State v. Perry (Mont. 1988), [232 Mont. 455,] 758 P.2d 268, 45 St.Rep. 1192 (affirming the District Court decision).

On September 25, 1987, the Cascade County Attorney filed an information against Michael Stillings charging that Stillings committed perjury by making two, inconsistent, material statements under oath in violation of § 45-7-201, MCA (1987). Stillings filed a motion to dismiss the information on the grounds that the statute of limitations had run. The District Court denied the motion. Defendant Stillings then filed an application for writ of supervisory control on the same grounds and the Montana Supreme Court denied the petition. In the ensuing bench trial, the District Court found the defendant guilty and sentenced him to ten years for perjury and ten years as a persistent felony offender. The District Court also revoked the ten-year suspended sentence on Stillings’ second degree murder conviction and ordered that all sentences run consecutively. Defendant Stillings now appeals his perjury conviction.

I.

Did the District Court err in its alternative finding that the defendant’s act of perjury under § 45-7-201(6), MCA (1987), was not complete, and therefore the statute of limitations did not begin to run until the defendant made a material statement under oath that was inconsistent with his previous testimony?

Montana’s perjury statute provides that:

“A person commits the offense of perjury if in any official proceeding he knowingly makes a false [material] statement under oath

Section 45-7-201(1), MCA (1987).

The statute further provides that:

“Where the defendant made inconsistent statements under oath or equivalent affirmation, both having been made within the period of the statute of limitations, the prosecution may proceed by setting forth the inconsistent statements in a single count alleging in the alternative that one or the other was false and not believed by the defendant. In such case it shall not be necessary for the prosecution to prove which statement was false but only that one or the other was false and not believed by the defendant to be true.”

Section 45-7-201(6), MCA (1987).

The defense in this case argues that by the plain language of the inconsistent testimony provision, both statements must be made within the five year statute of limitations for .felony crimes. Stillings contends that because seventeen years lapsed between his statements, the statute of limitations had run before the prosecution filed its information against him. We disagree.

The statute of limitations did not run because the statute was triggered only by Stillings’ second statement which completed the crime of perjury under § 45-7-201(6), MCA (1987). The statute of limitations clearly states when the time limitation begins to run:

“A prosecution for a felony must be commenced within 5 years after it is committed.”

Section 45-l-205(2)(a), MCA (1987). (Emphasis added.)

“An offense is committed either when every element occurs or, when the offense is based upon a continuing course of conduct, at the time when the course of conduct is terminated. Time starts to run on the day after the offense is committed.”

Section 45-1-205(5), MCA (1987).

Commission of the crime of perjury by making inconsistent, material statements under oath requires at a minimum that the accused has made two conflicting statements. When a witness makes conflicting statements under oath, it is axiomatic that one is false so long as all other elements of perjury can be satisfied. This statute expedites prosecution by eliminating the needless requirement of proving which statement is false. The intrinsic falsity of the accused’s testimony arises, and the crime is complete, only when the inconsistent testimony occurs. The statute of limitations, therefore, cannot begin to run at least until the defendant has completed the crime by making the indispensable, second statement.

The issue raised by the defendant accentuates an underlying contradiction in the inconsistent testimony statute. A crime under this statute cannot be completed, and the statute of limitations does not begin to run, until the defendant makes at least two allegedly inconsistent statements. However, the statute declares that “both [statements must be] made within the period of the statute of limitations.” Section 45-7-201(6), MCA (1987). By including the first statement, which might be entirely true, within the period of limitations, this clause would trigger the statutory period before any crime has been committed. The statute entices the unscrupulous witness to falsely recant five-year-old, credible testimony and insulate himself against prosecution under this statute. We invite the legislature to consider an appropriate remedy to this problem.

In the present case, application of this questionable statutory clause would still not have provided grounds for barring the prosecution’s information.

II.

Did the District Court err in its alternative finding that under § 45-1-206(1), MCA (1987), the defendant’s out-of-state incarceration tolled the statute of limitations on his first statement so that both statements fell within the five year statute of limitations?

Section 45-1-206, MCA (1987), provides that:

“The period of limitation does not run during: (1) any period in which the offender is not usually and publicly resident within this state or is beyond the jurisdiction of this state . . . .”

The defendant argues that during the time he was incarcerated in California on his second degree murder charge, he was still under Montana jurisdiction. While this contention may be true, we make no determination on this issue since it is not relevant.

Section 45-1-206(1) is written in the disjunctive and either clause is sufficient in itself to toll the statute of limitation. Failure of the criminal defendant to be “usually and publicly resident within this state” will itself interrupt the running of the statutory period regardless of jurisdiction. The statute is also tolled when the criminal defendant is “beyond the jurisdiction of the state” regardless of his place of residence.

The Criminal Law Commission Comments on § 45-1-206 are also written in the disjunctive and note that:

“Subsection (1) tolls the statute for the offender who is absent from this state, or absents himself from his usual place of abode and makes some effort to conceal himself.”

Again, each clause is sufficient to toll the statutory period. Absence from the accused’s usual abode coupled with attempts at concealment will toll the statute. Absence from the state will, independently, interrupt the statutory period. We therefore hold that the mere absence of the criminal defendant from the state is sufficient to toll the statute of limitations.

The majority of states interpreting similar statutes have also concluded that a criminal defendant’s mere absence from the state is sufficient to toll the statute of limitations. See State v. Nelson (App. 1988), 157 Ariz. 187, 755 P.2d 1175; State v. Wright (Utah 1987), 745 P.2d 447; State v. Houck (1986), 240 Kan. 130, 727 P.2d 460; State v. Ansell (1984), 36 Wash.App. 492, 675 P.2d 614; State v. Azzone (1965), 271 Minn. 166, 135 N.W.2d 488; State v. Lupino (1964), 268 Minn. 344, 129 N.W.2d 294; Grayer v. State (1962), 234 Ark. 548, 353 S.W.2d 148; Couture v. Commonwealth (1958), 338 Mass. 31, 153 N.E.2d 625; Traxler v. State (1953), 96 Okl.Cr. 231, 251 P.2d 815.

A number of states have applied this principle to cases similar to that of Stillings. In the seminal case of People v. Carman (1943), 385 Ill. 23, 52 N.E.2d 197, the Illinois Supreme Court first interpreted the statutory exclusion for periods during which the defendant was “not usually and publicly resident within this state.” The court defined “resident” by its common meaning and held that the statute of limitations was tolled during the Missouri incarceration of the defendant even though he remained a legal resident of Illinois. Carman, 52 N.E.2d at 199-200. Similarly, Stillings’ incarceration in Washington on armed robbery charges tolled the statute of limitations.

The fact that Stillings’ whereabouts were known to Montana law enforcement officials throughout his absence does not change the rule. The Washington Court of Appeals held that the absence from the state of a first-degree statutory rape defendant was sufficient to toll the statute of limitations even though the defendant’s whereabouts were easily determinable by law enforcement officials. State v. Ansell (1984), 36 Wash. App. 492, 675 P.2d 614, 617.

The ability of Montana to force the return of Stillings at any point during his time in California and Washington does not affect the tolling of the statutory period. The Washington courts held that the statute was tolled on a first-degree robbery defendant incarcerated in Oregon who was available for extradition under the Interstate Agreement on Detainers. State v. Newcomer (1987), 48 Wash.App. 492, 737 P.2d 1285, 1290.

Similarly, Montana’s maintenance of some control of Stillings during his California incarceration for his Montana murder conviction did not overcome the tolling of the statute. In an analogous case the Kansas Supreme Court held that a criminal defendant voluntarily paroled to Arkansas from the Kansas prison system and under the control of Kansas parole officials was not in the custody of the State of Kansas and therefore the statute tolled during his absence. State v. Houck (1986), 240 Kan. 130, 727 P.2d 460, 465-66.

In each of these cases, the principle is the same as that which we adopt today; mere absence from the state is sufficient to toll the statute of limitations for a criminal defendant.

If the statute of limitations were applied to Stillings’ first statement, it would have been triggered by his testimony on October 4, 1971. The defendant left Montana for incarceration in California on December 6, 1971, tolling the statutory period at two months. He returned to prison in Montana on April 20, 1984, restarting the statute of limitations which ran until the prosecution filed its information on September 24, 1987 — a period of three years and five months. The statute of limitations, therefore, ran for three years and seven months and fell well within the five year statutory period.

We find that the District Court was correct in both of its alternative holdings. Stillings’ mere absence from the state tolled the statute of limitations. Even if the statutory period had not been tolled, it could not have begun to run until Stillings made a material statement under oath that was inconsistent with his previous testimony.

Affirmed.

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


text:
    In re the MARRIAGE OF ELAINE HARLAN RUDIO, Petitioner and Appellant, and WILLIAM HARLAN, Respondent and Respondent.
    No. 89-077.
    Submitted on Briefs July 7, 1989.
    Decided Aug. 24, 1989.
    778 P.2d 410.

      Darla J. Keck, Datsopoulos, MacDonald & Lind, David B. Cotner, Boone, Karlberg & Haddon, Missoula, for petitioner and appellant.
    Kerry N. Newcomer, Geiszler, Taylor, Newcomer & McClain, Missoula, for respondent and respondent.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

This is an appeal from a judgment issued on the findings of fact and conclusions of law in the parties’ marriage dissolution action in the Fourth Judicial District Court, Missoula County, Montana. Petitioner/appellant wife argues the court abused its discretion when it arbitrarily valued the husband’s pension plan, awarded minimal maintenance to the wife for a limited period of time, and required the wife to pay her own attorney’s fees. The findings and judgment of the District Court are reversed and remanded for a new trial.

Appellant Elaine Harlan (Elaine) and respondent William Harlan (Bill) were married March 10, 1962. At the time of the marriage, Elaine had just graduated from high school and Bill was a laborer for the predecessor of Stone Container Corporation. Bill has continued to work for the same company for the past 27 years.

Elaine was a housewife throughout the marriage. She raised the parties’ two children, both of whom had reached the age of emancipation at the time of the parties’ separation. Elaine also did the cooking, cleaning and shopping for the family. Elaine’s work experience outside of the home was very limited, consisting of temporary part time work as a day care attendant, election judge, and home care attendant.

Bill completed an apprenticeship program with Stone Container and is now an industrial electrician. At the time of the trial, Bill’s hourly wage was $17.65 per hour, or approximately $38,300 per year.

After 24 years of marriage, the parties separated in March of 1986. When Bill left the parties’ home, no arrangements were made for Elaine’s financial maintenance. Consequently, during the 29 months between the time of separation and trial, Elaine spent all of the money from one of the parties’ savings accounts, approximately $17,000, in order to live. During this same time, Bill consumed his regular take-home pay of more than $500 per week, and $175 per month which he received from a contract receivable. Additionally, Bill depleted all of the funds from another of the parties’ savings accounts, which also amounted to approximately $17,000. All told, Bill spent over $71,750 during this period of time. He could not account for this money at trial.

Elaine was not informed by her original counsel that she could receive financial support from Bill during the period of separation. It was not until Elaine retained new counsel in 1988 that she sought an award of temporary maintenance. After notice of a hearing to set maintenance, the parties stipulated to a maintenance amount of $800 per month .

In March of 1988, Bill was “married” to Bonnie Lucier in Hawaii. Although Bill concedes the marriage is invalid, he and Bonnie Lucier live together, share monthly expenses, and expect to “remarry.” Bonnie Lucier presently has assets of nearly $230,000, and earns between $600 and $800 per month from investments. Additionally, Bill’s $175 per month contract receivable is payable through August, 2002.

Elaine requested an award of permanent maintenance because she had no income producing property, and no employment skills which would provide her with sufficient funds to cover her monthly expenses.

During trial, Kathy Kleinkopf, a certified rehabilitation counselor, described Elaine as 'fragile, nonassertive, extremely frightened, directionless, and possessing a weak self-presentation. Kleinkopf stated that she did not believe Elaine had the skills to seek or get employment, in part because Elaine’s work history was “non-existent for practical purposes.” Kleinkopf recommended that Elaine enter a five-week pre-vocational program at the Missoula Vocational Technical Center, to be followed by six quarters of clerical training from the Vo-Tech Center which would take at least two years to complete. Kleinkopf stated that it would be more advantageous for Elaine to obtain a bachelor’s degree from the University of Montana, a course of study which would last through June, 1993.

The parties did not dispute the value of most of their assets. At trial, however, Bill disagreed with Elaine’s expert’s evaluation that the Stone Container pension plan was worth $20,600. Bill stated the pension plan was only worth $10,000. He offered this round figure because he believed he had been exposed to asbestos at his work place. He concluded that since he is a smoker, he does not expect to live as long as the expert calculated. Elaine’s counsel objected to this testimony because it was speculative and without foundation. The trial judge sustained the objection.

Bill also disagreed with Elaine’s valuation of her automobile, a 1977 Pontiac. Elaine testified that the car got an average of ten miles per gallon and would soon need to be replaced. The Pontiac was appraised for purposes of the trial at $450. Bill disagreed and gave this unqualified opinion:

[Direct examination by Bill’s counsel:]

Q. “Did you have a chance to review the appraisal ... for the ‘77 Pontiac?
A. “Yes. I viewed it in your office the other night.
Q. “Do you agree with that appraisal?
A. “No, I do not.
Q. “What do you think the car is worth?
A. “Well, I know the car two and a half years ago was in excellent shape, the motor was taken care of extremely well by my father, the interior was spotless. That’s why it was valued at that time — the lawyer that I had handling my father’s estate — he said let’s just slap three thousand dollars on it. I think it was worth more than that if we would have valued then.
Q. “What do you think it’s worth now? Just what do you think—
A. “I would say it’s worth at least fifteen hundred.”

Elaine testified that her repairman found a leak in the 24-year-old roof of her house and that she obtained an estimate for its repair. The estimate presented at trial, for $1,470, was to lay new shingles over the old. She testified that she had since learned the old shingles would have to be removed at an additional cost of $550.

Bill also disagreed with the estimate for the roofing job, however, he did not disagree that a repair was necessary. At trial, Bill gave his opinion that “I know that I could have it done cheaper ... I think I can get it done for nine hundred.”

In its findings of fact, conclusions of law, and decree of dissolution, the District Court divided the property essentially as the parties agreed:

Property to Elaine Harlan
Residence at 316 Dearborn (unencumbered) $47,000.00
Household Furnishings (Including player piano & other property in her possession except the property awarded Respondent below, presently in Petitioner’s possession) 3,500.00
Dain Bosworth Apache Oil 350.00
WIN cash account 3,854.11
Great Falls municipal bond 5,583.15
Jones’ Cable Interest (approx.:) 9,000 — 15,000.00
Elaine’s IRA 1,683.78
1977 Pontiac 700.00
1975 Dodge pickup 500.00
WFS & L checking 313.84
1/2 1987 tax year refund 665.50
72,880.38 — 78,880.38
Property to Bill Harlan
Luptak Harlan Escrow (remains of father’s estate) 17,117.00
Champion/Stone Retirement 10,000.00
Dain Bosworth — IRA account
Personal Property (including all items in Bill Harlan’s possession)
one kerosene decorator lamp
Grandmother’s musical instrument
Grandfather’s diamond willow cane
All father’s tools, equipment and miscellaneous items (trunk with estate papers)
Remainder off Bill’s hand and power tools
Other items from garage, i.e. battery charger
Grandmother’s .32 Cal. H & R revolver and cartridges
Ruger 10 — 22 Cal. rifle
Fireproof box and contents, purchased by father
Tax returns and supporting documents for 1980-87
3 h.p. Evinrude outboard and remote tank with oil
1/2 h.p. motor and fan blade
Items purchased from Bill’s Aunt Mary Lay
Father’s golf clubs
Grandmother’s coffee table from living room
1/2 remaining silver coins or medallions 2,000.00
1988 Ford pickup (subject to encumbrance) 6,200.00
1/2 1987 tax year refund 665.50
47,555.50

Although the court sustained counsel’s objection to Bill’s testimony regarding the value of the pension plan, it nonetheless accepted Bill’s valuation and reasoning. In its opinion and order, the court made the following statement:

“Petitioner requests that the Court amend its Findings of Fact Nos. 19, 20 and 24 relating to the Court’s valuation of Respondent’s pension. Underpinning Michael Duffield’s present value calculation for this pension is the assumption that Respondent has a life expectancy equal to that of other American males. Respondent’s place of employment exposes him to toxic or harmful substances. Most American males do not work in this type of environment. Duffield’s assumption disregards this exposure and renders present value calculations unreliable. The Court has rejected Duffield’s testimony in this instance as not credible because his analysis disregards the environmental factors of Respondent’s employment. (Emphasis added.)

The court ruled that Bill would pay Elaine $100 per week only while she is enrolled in the Missoula Vo-Tech program. The payments were not to exceed two years. The court reasoned:

“In the over two years between separation and trial Petitioner had access to savings, cash and in kind support from Respondent exceeding $26,000.00. Petitioner also received all the marital assets except Respondent’s retirement, Respondent’s IRA account, personal possessions and half of the 1987 tax year income tax refund.
“The Court considered the expenses that Petitioner claimed at trial, her spending after the separation, the assets she was awarded and the factors set out in §§ 40-4-202 and 40-4-203, MCA. The Court’s award of short term educational maintenance was designed to require Petitioner to responsibly marshal her resources and make choices as to how to apply her assets to achieve her goals.
“It is unfortunate, but true, that a substantial portion of the marital estate was dissipated between separation and trial by Petitioner. The opportunity to put those funds to more constructive use is forever gone. Petitioner’s track record is such that it appears to the Court that her “needs” will always exceed the funds available to her. There was no convincing testimony at this trial to show why Petitioner should not be required to make the same choices about allocation of resources as other non-handicapped people. (Emphasis added.)”

The court valued the 1977 Pontiac at $700 because Bill “thought” the car was worth more than the written appraisal and because of the “parties’ respective biases regarding valuation.” However, when Elaine valued the personal property remaining in her possession at $2,500 to $3,000, and Bill valued the same property at $3,500, the court valued the property at $3,500. Additionally, the court refused to award Elaine any funds for the repair of the roof because “[n]o necessity for immediate replacement was shown by Petitioner.”

The District Court also accepted Bill’s unsupported suggestion that Elaine could inherit property from her parents. In Finding of Fact No. 15, the court stated:

“Petitioner’s parents are in their seventies and are presently in good health. Petitioner’s parents live comfortably. Petitioner can expect a modest to substantial inheritance when her parents die, barring unforeseen circumstances. (Emphasis added.)”

The District Court disallowed any award of attorney’s fees to Elaine because it concluded “Petitioner has sufficient property, cash and short term assistance to pay her own attorney’s fees and costs.”

Elaine raises the following issues for review:

1. Did the District Court abuse its discretion in its valuation of Bill’s pension plan?

2. Did the District Court abuse its discretion when it awarded only $100 per week in financial assistance, and when it ruled the assistance was not to exceed two years?

3. Did the District Court abuse its discretion when it required Elaine to pay her own attorney’s fees?

Issue No. 1

Did the District Court abuse its discretion in its valuation of Bill’s pension plan? There can be no question but that the court did abuse its discretion. There is absolutely no evidence in the record to support the court’s valuation of the pension plan. Bill does not contest Elaine’s expert’s methodology in valuing the pension plan. He merely thinks the mortality table used by the expert does not apply to him. No doubt it would be helpful to such valuations if it were possible to determine exactly how long a person will live. However, such necessarily speculative devices must be utilized in order to make a reasonable calculation. As we held in In re Marriage of Bowman (Mont. 1987), [226 Mont. 99,] 734 P.2d 197, 44 St.Rep. 488, it is an abuse of discretion to arbitrarily pick a method of calculation which enjoys no support from the record. Likewise, it is an abuse of discretion to arbitrarily value a pension plan through the use of no calculation whatsoever.

Bill had full opportunity to produce expert testimony or other reliable evidence which would illustrate that he has a shorter life expectancy than that used by the expert. However, Bill presented no evidence that his health was poor, no evidence that he was ever exposed to any toxic substances, no evidence that all other workers at Bill’s place of employment died before reaching age 76, no evidence that Bill’s life expectancy was anything other than age 76, and absolutely no evidence supporting the rough figure valuation of $10,000. That valuation was clearly in error.

Issue No. 2

Did the District Court abuse its discretion when it awarded only $100 per week in financial assistance, and when it ruled the assistance was not to exceed two years? When the marital property is properly considered and valued, it is clear the maintenance award was an abuse of discretion.

From the record it is apparent that the District Court was convinced of two things: 1) that Elaine was receiving the vast majority of the marital property; and 2) that Elaine spent too much money between the time of separation and trial. In spite of this, however, the court concluded Elaine was entitled to an award of maintenance.

If all of the marital property is properly valued, the difference between what each party will receive is not great. When the valuation of the car is recalculated, and the value of the pension is properly established, the property distribution will be much closer:

Property to Elaine
Residence $47,000.00
Household furnishings 3,500.00
Dain Bosworth Apache oil 350.00
WIN cash account Great Falls Municipal 3,584.11
Bond 5,583.15
Jones’ Cable interest 9,000.00
Elaines’s IRA 1,683.78
1977 Pontiac 450.00
1975 Dodge pickup 500.00
WFS & L checking 313.84
1/2 1987 tax year refund 665.50
$72,630.38
Property to Bill
Luptak Harlan Escrow $17,117.00
Champion/Stone retirement 20,600.00
Dain Bosworth-IRA account 11,573.00
Personal Property 2,000.00
1988 Ford pickup 6,200.00
1/2 1987 tax year refund 665.50
$58,155.50

Section 40-4-203, MCA, provides that the court may award maintenance if the spouse seeking maintenance:

(1) • • .
“(a) lacks sufficient property to provide for his reasonable needs; and
“(b) is unable to support himself through appropriate employment
“(2) The maintenance order shall be in such amounts and for such periods of time as the court deems just, without regard to marital misconduct, and after considering all relevant facts including:
“(a) the financial resources of the party seeking maintenance, including marital property apportioned to him, and his ability to meet his needs independently . . .;
“(b) the time necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate employment;
“(c) the standard of living established during the marriage;
“(d) the duration of the marriage;
“(e) the age and the physical and emotional condition of the spouse seeking maintenance; and
“(f) the ability of the spouse from whom maintenance is sought to meet his needs while meeting those of the spouse seeking maintenance.

There is no evidence in the record that the District Court adequately considered the factors of § 40-4-203, MCA. Even though the marital property was not properly valued, it is evident that the court did not consider the nature of the majority of the assets awarded Elaine. In re Marriage of Tow (Mont. 1987), [229 Mont. 483,] 748 P.2d 440, 44 St.Rep. 2154. By far the most valuable asset awarded to Elaine, the residence, is not income producing, but rather income consuming property.

The income producing property awarded to Elaine included:

Dain Bosworth Apache Oil $350.00
WIN cash account 3,584.11
Great Falls Municipal Bond 5,583.15
9,000.00 Jones’ Cable
313.84 WFS & L checking
665.50 1/2 1987 tax year refund
Total Income Producing Assets: $19,496.60

Even a 10% annual return on this amount of money would only generate $1,949.96 per year before state and federal taxes are deducted. Elaine listed her monthly expenses as exceeding $800 per month, exclusive of any costs for education and retraining. Additionally, Kleinkopf testified that the pre-vocational program would cost $199, and the Vo-Tech programs would cost $1,504 per year.

We conclude the court erred in awarding temporary maintenance of $100 per week in light of Elaine’s financial resources, education and employment skills, age, physical and emotional condition, the duration of the marriage, the standard of living established during the marriage, and Bill’s ability to provide Elaine with maintenance in an amount which is fair and just. In view of these factors, the temporary award of $100 per week was unjustified. There was no evidence which established what Elaine’s income and expenses would be after she obtains employment. An assumption of self-reliance after that time is not supported by the record. Nor was there any evidence which would support a conclusion that Elaine would inherit anything from her parents. Further, an award of permanent maintenance may be modified or terminated to reflect a change of circumstances, such as these assumed by the court. Section 40-4-208, MCA.

Finally, there is no evidence to support a conclusion that Elaine spent too much money from the time of the separation to the date of the trial. While Elaine may have spent over $26,000, this amounts to less than $900 per month for the 29 month period. Still, while there was nothing more than Bill’s insinuation that this amount was excessive, the $26,000 figure pales when compared to the nearly $72,000 spent by Bill during this same time period, an amount the court failed to consider in its distribution of the marital property.

Issue No. 3

Did the District Court abuse its discretion when it required Elaine to pay her own attorney’s fees? We conclude it did. The District Court denied Elaine’s request for attorney’s fees and costs because it concluded she had sufficient property, cash and short-term assistance to pay them herself. However, as we have concluded above, the court incorrectly valued the marital property and erred in awarding limited maintenance. Therefore, and because we are returning this cause for a new trial, this issue must be re-examined by the court in light of a new property distribution or valuation, and award of maintenance.

Reversed and remanded for a new trial.

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


author: MR. JUSTICE HUNT

text:
    CITY OF FAIRVIEW, Plaintiff and Respondent, v. WILLIAM M. DEMING, Defendant and Appellant.
    No. 88-561.
    Submitted on Briefs June 30, 1989.
    Decided Aug. 25, 1989.
    778 P.2d 876.

      J. Douglas Alexander, Sidney, for defendant and appellant.
    Mike Weber, Fairview, for plaintiff and respondent.
   MR. JUSTICE HUNT

delivered the Opinion of the Court.

William Deming, defendant and appellant, appeals from a money Judgment entered in favor of the City of Fairview, plaintiff and respondent, by the District Court of the Seventh Judicial District, Richland County. We affirm.

The issues raised on appeal are:

1. Whether a proper foundation was laid to qualify a witness as an expert.

2. Whether contradictory expert testimony was properly weighed by the District Court.

3. Whether plaintiff laid a proper foundation for the introduction of certain exhibits.

William Deming was the city judge of Fairview, Montana from July 1, 1980, through January 31, 1983. As city judge, his duties included the collection of fines due on various tickets. The monies collected were placed in his trust account with the City of Fairview.

An examination of the records, accounts, and reports of the Deming court covering the period of his judgeship was conducted by the Montana Department of Administration at the request of the City of Fairview. Loren Flesjer, a municipal auditor of the Local Government Services Division of the Department, was in charge of the examination. Flesjer’s examination showed that while a sum of $15,004.40 had been collected by defendant from tickets, only $10,989.77 had been accounted for, leaving a $4,014.63 deficiency.

The City of Fairview filed suit for damages resulting in misappropriation of the funds. Trial was held on July 12, 1988, before the District Court sitting without a jury. The expert testimony of Flesjer was admitted for the purpose proving the deficiency. Among the exhibits introduced were the tickets in question submitted as Plaintiff’s Exhibit 1, a list of tickets that were unaccounted for and funds submitted as Plaintiffs Exhibit 1-A and an examination report prepared by Flesjer submitted as Plaintiff’s Exhibit 2. On September 9, 1988, the District Court ruled in favor of the City of Fairview and ordered that plaintiff recover from defendant the $4,014.63 plus costs.

The first issue raised on appeal is whether plaintiff laid a proper foundation to qualify Flesjer as an expert witness.

Rule 702, M.R.Evid. provides:

“If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education may testify thereto in the form of an opinion otherwise.” (Emphasis ours.)

In this case, the record reflects that a proper foundation was laid for Flesjer’s qualifications as an auditor. Flesjer testified that he had keen employed by the Local Government Service Division of the Montana Department of Administration as an auditor for 17 Vz years; he had 5 years of accounting experience before working for the state; he holds a two-year degree in business administration and accounting; he presently trains new employees and auditors, conducts audits, writes audit programs and conducts special examinations; and he has received training from the Lower Court Commission on examination of city judge’s accounts. We hold that in light of the above testimony, the plaintiff laid a proper foundation for the introduction of Flesjer’s expert testimony. In addition, after Flesjer gave this testimony, the record reflects that defendant stipulated as to the expert qualifications of Flesjer and cannot now complain that foundation was improper.

The next issue raised on appeal is whether contradictory expert testimony was properly weighed by the District Court.

In this case, plaintiff called Flesjer to testify as an auditing expert while defendant submitted a fiscal report prepared by Richard Lange, an accountant, to the District Court. Defendant argues that Lange’s report contradicted Flesjer’s testimony and demonstrated that evidence submitted lacked foundation, hence, the District Court improperly weighed the testimony of Flesjer in plaintiff’s favor. We disagree.

In Lumby v. Doetch (1979), 183 Mont. 427, 431, 600 P.2d 200, 202, we stated:

“The credibility of witnesses and the weight to be given their testimony are matters for the District Court’s determination in a non-jury case. (Citation omitted.) Thus, in examining the sufficiency of evidence, we must view the same in a light most favorable to the prevailing party, and we will presume the findings and judgment by the District Court are correct. (Citation omitted.)”

See also Como v. Rhines (1982), 198 Mont. 279, 645 P.2d 948 and Poepping v. Monson (1960), 138 Mont. 38, 353 P.2d 325. The District Court had before it the contradictory expert opinions of both parties and made its determination.

The last issue raised on appeal is whether plaintiff laid a proper foundation for the introduction of certain exhibits .

Defendant objected to the first exhibit, the tickets in question, submitted as Plaintiff’s Exhibit 1. Rule 901(b)(7), M.R.Evid., provides:

“(b) By way of illustration only and not by way of limitation, the following are examples of authentication or identification conforming with the requirements of this rule:
“(7) Public records or reports. Evidence that a writing authorized by law to be recorded or filed and in fact recorded or filed in a public office, or a purported public record, statement, or data compilation, in any form, is from the public office where items of this nature are kept.”

Flesjer testified that the tickets contained in the exhibit were part of the original court docket. The tickets were properly identified in accord with Rule 901(b)(7), M.R.Evid., thus, plaintiff laid a proper foundation for the exhibit.

The second exhibit objected to by the defendant was a list of the tickets in which sums due were unaccounted for, submitted as Plaintiff’s Exhibit 1-A. The list was merely a synopsis of the information contained in Exhibit 1 and was compiled by Flesjer to aid in the understanding of the case. A proper foundation was laid by plaintiff when Flesjer testified that he prepared the list and that the list was a synopsis of the information contained in Exhibit 1.

The third exhibit objected to by the defendant was an examination report prepared by Flesjer and submitted as Plaintiff’s Exhibit 2. Again, the record reflects that the exhibit was identified and verified by Flesjer and, hence, plaintiff laid a proper foundation for its introduction.

Affirmed.

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


author: MR. JUSTICE McDONOUGH

text:
    JOHN D. ROMAIN, Defendant and Appellant, v. EARL SCHWARTZ COMPANY, A Partnership, composed of Earl Schwartz, Gladys Schwartz, Kay Schwartz York, Ray L. York, Kathy Schwartz Mau, Robert Mau and Karla Lea Schwartz, Partners, Defendant and Respondent.
    No. 88-567.
    Submitted on Briefs June 30, 1989.
    Decided Aug. 25, 1989.
    Rehearing Denied Sept. 21, 1989.
    779 P.2d 54.

      Robert J. Emmons and Joseph Sullivan, Emmons & Coder, Great Falls, for defendant and appellant.
    Stuart C. MacKenzie, Burns, Solem & MacKenzie, Chinook, for defendant and respondent.
   MR. JUSTICE McDONOUGH

delivered the Opinion of the Court.

This is an appeal from an action begun to foreclose a mortgage on agricultural real property. Defendant John D. Romain (Romain) appeals from the judgment of the District Court of the Twelfth Judicial District, Hill County, finding adverse to his cross-claim asserted against Earl Schwartz Company, a partnership (partnership). We affirm in part and reverse in part.

Although Romain presents several issues for review, we find that consideration of only two are necessary to decide this case. These issues are:

1) Did the trial court err in determining that Romain as vendor and grantor divested himself of all alleged rights to repossession under a contract for deed covering the property upon delivery of a warranty deed to the partnership, vendee and grantee?

2) Did the trial court err in holding that Romain failed to mitigate his damages and therefore should not be allowed to assert a right of indemnity against the partnership for damages caused by the partnership’s default on the mortgage?

The facts in this case are somewhat complicated. On July 26, 1979, John Romain agreed to sell his farm by contract for deed to the partnership for $4,635,000. When this contract was entered into, the farm was subject to a mortgage held by John Hancock Mutual Life Insurance Company (John Hancock). As part of the purchase price, the partnership agreed to pay the remaining balance owed John Hancock by Romain. On July 31, 1979, Earl Schwartz as an individual delivered his personal guaranty of Romain’s note, to the extent of $1,000,000, to John Hancock.

In January 1980, the partnership paid off the balance owed Romain on the contract for deed. Romain then conveyed the legal title by warranty deed to the partnership, “subject to,” the John Hancock mortgage.

In 1986 and 1987, payments on the mortgage were not made, putting the note and mortgage in default. As a result, John Hancock sued to foreclose on the property. Named as defendants were the partnership and the individual partners, Earl Schwartz in his individual capacity as guarantor, John and Maradel Romain and other lienholders.

Upon learning of the default, Romain cross-claimed against the partnership and sought cancellation of the contract for deed, possession of the property and growing crops, and all monies from any federal farm programs on the farm. On August 29, 1988, the trial judge granted John Hancock a decree of foreclosure with a judgment against John and Maradel Romain for $3,966,973.46, and a judgment against Earl Schwartz based on his guaranty in the amount of $1,269,310.87.

The trial judge made separate Findings of Fact, Conclusions of Law and Judgment on Romain’s cross-claim. On this issue, the trial court denied Romain relief and redemption rights and let the partnership in possession of the farm property and crops, and all monies from the 1987 and 1988 farm programs.

In reaching this conclusion, the court found that Romain lost all rights to repossession of the property upon delivery of the warranty deed by him to the partnership. Because he had no right to possession of the property, the trial court also found that Romain had no claim to any growing crops or farm program money. Rather, his only existing remedy under the contract for deed was indemnification by the partnership for damages sustained as a consequence of the default.

Any right to indemnification, however, was contingent upon Romain’s mitigation of damages. In August of 1988, John Hancock wrote Romain and informed him that if he executed a deed transferring all of his rights and interest in the property to John Hancock, he would be absolved of all claims against him resulting from the foreclosure and any deficiency which may arise. Romain refused to execute such a deed. The trial court found this refusal to be a failure on his part to mitigate damages. Consequently, Romain was denied indemnification for any deficiency judgment which may arise from the foreclosure sale. This appeal followed.

I

Romain argues that his delivery of the warranty deed to the partnership did not operate to divest him of his right to repossession of the farm under the contract for deed. We disagree.

In support of our conclusion, we begin by examining two statutes. Section 70-1-508, MCA, provides that a grant of property takes effect only upon delivery by the grantor. Moreover, § 70-1-510, MCA, provides that a grant cannot be delivered conditionally. Rather, delivery to a grantee is deemed to be absolute and the instrument takes eifect upon its delivery. Any prior conditions are discharged at time of delivery.

Examination of these two statutes leads to the conclusion that Romain divested himself of all interest in the property upon delivery of the deed to the partnership. The language of the warranty deed is clear. Romain gave up the legal title and any other interest in the property.

Romain argues, however, that it was not his intent, upon delivery of the deed, to give up his right to repossession upon foreclosing or canceling the contract for deed. He maintains that it was always his intention, to allow the forfeiture clause of the contract for deed to remain in eifect until the John Hancock loan was fully repaid. Because he remained liable for any deficiency underlying the multimillion dollar mortgage, Romain argues that his intention to retain his right to repossession should be obvious.

We recognize that a valid delivery of title requires not only actual manual transfer, but also an intent on the part of the grantor to pass title to the property. Hartley v. Stibor (Idaho 1974), 525 P.2d 352, 355. Therefore, it is possible that there is no legal delivery although the instrument has been delivered to the grantee. Hayes v. Moffatt (1928), 83 Mont. 214, 226, 271 P. 433, 437. Romain argues that this lack of intent is evidenced by the default provision within the contract for deed and the language within the warranty deed which states that the conveyance is “subject to” the John Hancock mortgage.

This logic fails in light of Montana statutory law, the language of the warranty deed, and established case law. Section 70-1-519, MCA, in accordance with established case law, provides that upon transfer of property, the transferee obtains all title held by the transferor unless a different intention is expressed or is necessarily implied. As stated earlier, Romain maintains that this intent should be implied from the language within the contract ad the warranty deed, and the circumstances surrounding the conveyance.

The language of the deed giving up all right, title and interest in the property clearly indicates Romain’s intent to transfer full title to the partnership, including all his security interest. The fact that the warranty deed contained language stating that it was “subject to” the John Hancock mortgage does not render inoperative the presumption that Romain intended to convey his entire interest. It is presumed that one who conveys property by deed intends to convey his entire interest unless a portion of the interest is expressly excepted. The words “subject to” are a limitation upon the warranty of title and not such an exception. First National Bank of Denver v. Allard (1972), 31 Colo.App. 391, 506 P.2d 405, 406.

Moreover this intention, manifested by the deed, prevails over any contrary intent which may be gleamed from the contract for deed. It has long been recognized that an unambiguous provision in a deed prevails over an inconsistent provision in a sales contract pursuant to which the deed was given. Johnson v. Ware (1943), 58 Cal.App.2d 204, 136 P.2d 101, 102; McCafferty v. Young, (1964), 144 Mont. 385, 397 P.2d 96.

II

Romain next contests the trial court’s decision to deny him any right to indemnity for damages sustained as a result of the respondent’s default. The trial court ruled that Romain failed to mitigate his damages by refusing to execute a deed transferring all of his rights in the property to John Hancock. In exchange for this performance, John Hancock promised to absolve Romain of any possible deficiency judgment. Because of this failure to mitigate, the court held that Romain could not avail himself of any indemnification by the partnership for damages sustained as a consequence of their default.

In this regard, we disagree with the trial judge. A damaged party is only expected to do what is reasonable under the circumstances and need not embark upon a course of action which may cause further detriment to him. Spackman v. Ralph M. Parsons Co. (1966), 147 Mont. 500, 414 P.2d 918. Romain may have reasonably determined that a release of his interest in the property to John Hancock would jeopardize his ownership of the claim here. Therefore, we decide that under these facts, Romain was under no duty to sign over the deed to John Hancock until he exhausted his remedies. However, as a result of the holding in this case, Romain could now be required to transfer all of his rights in the property pursuant to John Hancock’s offer. Accordingly, on this issue the trial court is reversed and the case is remanded for proceedings consistent with this opinion.

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


text:
    In re the MARRIAGE OF JEREMY GERSOVITZ, Petitioner and Appellant, and CATHERINE ANN SIEGNER, Respondent and Respondent.
    No. 88-579.
    Submitted on Briefs June 16, 1989.
    Decided Aug. 25, 1989.
    Rehearing Denied Oct. 17, 1989.
    779 P.2d 883.
    Carol A. Mitchell, Missoula, Joan Uda, Helena, for petitioner and appellant.
    Martha E. McClain, Missoula, for respondent and respondent.
    Bruce B. Barrett, Montana Ass’n of Jewish Communities, Missoula, for amicus curiae.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

This is an appeal from the District Court of the Fourth Judicial District, in and for the County of Missoula, the Honorable John S. Henson presiding. Judge Henson issued findings of fact and conclusions of law and order in this marriage dissolution action. Appellant Jeremy Gersovitz appeals from the custody order concerning the parties’ minor child. We affirm.

Three issues are presented by the appellant, Jeremy Gersovitz, which we will condense into two issues as stated by the respondent, Catherine Ann Siegner.

1. Did the District Court abuse its discretion in ordering a residential plan which placed the child with respondent wife, after the child reaches a school age?

2. Did the District Court abuse its discretion in its determination that neither party should have the exclusive right to determine the child’s religious education?

The parties met in Washington, D.C. while attending school to earn graduate degrees. Respondent (hereinafter referred to as Catherine) received a bachelor’s and master’s degree in journalism. The appellant (hereinafter referred to as Jeremy) holds a bachelor’s degree in political science and a master’s degree in journalism. After receiving their degrees, the parties found work in Missoula, Montana in January of 1986.

The parties were married on February 14, 1986. Their son, Alexander Samuel Gersovitz (hereinafter referred to as Alex) was born on August 1, 1986. Jeremy and Catherine separated in December, 1987. At the time of their separation, Catherine moved out of the family home to a residence within several blocks of Jeremy and the parties worked out an amiable joint custody arrangement. Shortly after Catherine moved, Jeremy filed a petition for the dissolution of the marriage.

Between the time of the filing for dissolution and the trial, the parties shared joint custody of Alex. The central issue here is whether Alex should reside with Catherine or Jeremy after he reaches school age.

Each party made several recommendations to the court prior to and during the trial regarding the residence and care of Alex. After hearing the evidence, the court structured a plan which would enable each parent to have physical custody of Alex during certain periods of the year. Alex was approximately three years of age when this plan was established. Jeremy objects to that portion of the plan which places Alex in the custody of Catherine after he begins school. Section 40-4-212, MCA, sets forth the factors to be considered when determining the best interest of the child. The court noted in its findings that both parents were loving, concerned and capable parents. Both sought joint custody and each requested to be the primary custodian commencing with Alex’s school years. However, the court concluded that the child must reside primarily with one parent during the time he attends school so his education will not be interrupted by multiple custodial transfers. Further, the court concluded that it was in Alex’s best interest that he spend time with both parents during the summer.

The court, in finding No. 31 noted:

“It is in the best interest of the minor child to reside with Respondent [Catherine] during the school year because of her parenting abilities, her lack of animosity towards Petitioner [Jeremy] and her greater range of interests. It is less likely that Respondent will interfere with Petitioner’s relationship with Alex, including providing access to the child, than Petitioner is likely to interfere with Respondent’s relationship with the child, including providing access to him. Respondent appears to be more capable of allowing Alex to develop his own identity. Further, her ability to recognize and address the needs of the child to have a strong relationship with the other parent is not likely to be hampered by anger towards that parent. The same cannot be said of Petitioner.

Included in its order, the court addressed child support, medical insurance, summer vacations, and a residential plan for Alex before he starts school. It also provided for the custody of Alex and incurred travel costs should one parent move more than 200 miles from the other, or in excess of 200 miles from Missoula. Jeremy’s second issue, which has been supported by an amicus brief by the Montana Association of Jewish Communities, relates to the District Court’s order No. 9 which provides as follows:

“Neither parent shall have the exclusive right to determine the child’s religious education and affiliation. This determination is consistent with the philosophy underlying joint custody and also with the reality of the child’s heritage.”

Jeremy argues that from the time of his birth, Alex has been raised Jewish, with the support and cooperation of both parents. He argues that being Jewish is not merely a religion, it is a way of life. Alex’s full name, Alexander Samuel Gersovitz, is a Jewish name and he will be recognized by society as a Jew. Jeremy further states that Alex has been circumcised, and has regularly and routinely been made a part of the Missoula Jewish community celebration of their faith.

Jeremy argues that the District Court abused its discretion in concluding, for all practical purposes, that once Alex reaches school age, he should be raised in no religion, rather than the religion in which he has been raised since his birth. Jeremy claims that because he has been separated from Alex, he will not be raised with sufficient knowledge of Judaism. This, he argues, will make it difficult, if not impossible, for Alex to live in the Jewish tradition, because a Jewish boy achieves religious responsibility at the age of thirteen when he celebrates his barmitzvah, becomes an adult and chooses his religion, Judaism. It is further argued that it is necessary for a school age child to receive the religious training necessary to prepare him for his barmitzvah. It is claimed that the District Court’s order which places Alex in his non-Jewish mother’s care during the school year prevents Jeremy from raising Aléx in a strong Jewish tradition.

After carefully studying the transcript, briefs and District Court file, we cannot say that the court abused its discretion in this custody matter. The District Court’s order relating to Alex’s religion was correct because it reflects Alex’s best interests and is constitutionally sound.

This case presents an issue of first impression in Montana. The First Amendment guarantees religious liberty, and the right of parents to direct the religious upbringing of their children. Wisconsin v. Yoder (1972), 406 U.S. 205, 92 S.Ct. 1526, 32 L.Ed.2d 15. There is a common feature in the cases cited by the appellant and amicus. That is, courts will not debate the merits of different religions or show preference to any religious faith. However, courts will examine religious practices which interfere with the child’s general welfare. Religion as a Factor in Child Custody and Visitation Cases, 22 A.L.R.4th 971. A question of religious education must be strictly limited to the context of the best interests of the minor child.

The appellant cites In re the Marriage of Simms, a 1987 Colorado district court case, as support for an option which would grant custody of a child to one parent “for the purposes of determining religious training.” However, Simms, a district court case rather than a Colorado Supreme Court case, is not persuasive. Its facts differ from those of this case, which in our opinion, makes Simms inapplicable. In Simms, the mother converted to Judaism before the children were born. The children were raised in the Jewish faith prior to the divorce of the parents. After the parties separated, the mother reverted to her original faith of Catholicism and began taking the children to church. The Colorado district court thought it would be best if the parents could agree jointly on the issue of religious training for the children, but further found that the parents were not able to do so and after hearing considerable expert testimony, found that it was most appropriate for one parent or the other to determine the religious training of the children. That is not the situation here.

The facts of this case did not require the District Court to appoint one parent as the religious custodian of Alex. However, under § 40-4-218, MCA, the custodial parent may determine the child’s religious training. We find that under the facts of this case, an award of custody for the purpose of religious education should not dominate other elements which comprise the best interests of this particular child.

This Court has previously held in In re Marriage of Cole (1986), 224 Mont. 207, 729 P.2d 1276, 43 St.Rep. 2136; and In re the Custody and Support of B.T.S. (1986), 219 Mont. 391, 712 P.2d 1298, that the findings and conclusions of a district court regarding the best interests of a child are presumptively correct and will not be overturned unless there is a clear preponderance of evidence against them. Here, the District Court’s determination as to the best interests of the minor child was supported by substantial credible evidence.

The judgment of the District Court is affirmed.

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


text:
    JULIUS R. TRESCH and Joan Tresch, Husband and Wife, Plaintiffs and Appellants, v. NORWEST BANK OF LEWISTOWN, N.A., John Doe Corporation, I through V, and John Doe 1 through 10, Defendants and Respondents.
    No. 89-053.
    Submitted on Briefs Aug. 3, 1989.
    Decided Aug. 25, 1989.
    778 P.2d 874.
    Torger S. Oaas, Lewistown, for plaintiffs and appellants.
    Donald C. Robinson and Mark W. Mattioli, Poore, Roth and Robinson, Butte, for defendants and respondents.
   MR. JUSTICE McDONOUGH

delivered the Opinion of the Court.

Julius Tresch and Joan Tresch (Tresch) appeal from an order of the Tenth Judicial District, Fergus County, granting summary judgment to respondent Norwest Bank of Lewistown, N.A. (Norwest) . We affirm.

The issues in this case are:

1. Whether Norwest breached the implied covenant of good faith and fair dealing when it denied a $3,100.00 loan requested by Tresch.

2. Whether Norwest breached a fiduciary duty owed Tresch when it denied the $3,100.00 loan.

Julius and Joan Tresch have owned and operated a dairy farm near Lewistown, Montana since 1966. For over three decades, they have done their banking business with Norwest. In 1983, Tresch increased his operating loan at Norwest to the amount of approximately $147,000.00. This note was to be paid in monthly installments and was secured by an assignment of proceeds from the dairy, and other collateral. One of the terms of this financing agreement provided that Tresch could not make any capital purchase in excess of $500.00 without the express consent of Norwest.

Shortly after receiving this loan, Tresch used advanced funds to upgrade the equipment in his dairy. This upgrading included the purchase of new milking machines. Tresch quickly became dissatisfied with these machines, because he believed that they were responsible for an outbreak of “mastitis” in his dairy herd.

Mastitis is defined as an inflammation of the mammary glands in dairy cattle. It is caused and spread by toxic microorganisms. The disease is endemic to the entire dairy industry and its presence can lead to contaminated milk and the destruction of a dairy herd. Although its cause is subject to debate, it is generally agreed that it can be caused by malfunctioning equipment, unsanitary conditions within the cows’ environment, or improper milking procedures.

Because Tresch believed that the new milking machines were the cause of the mastitis, he approached Norwest in March of 1984, for a three thousand one hundred dollar ($3,100.00) loan which would enable him to replace the machines. Norwest doubted that this purchase would cure the mastitis problem because, as it noted, the disease had existed in his dairy herd for a number of years prior to the acquisition of the new machines. It also doubted that the purchase of new milkers would generate sufficient additional income to repay the loan.

In order to confirm this supposition, Norwest contacted the local implement dealer and the dairy extension service at Montana State University to determine if the new machines were needed. This investigation supported Norwest’s original beliefs. During this inquiry, it was learned that although milking machines can cause mastitis, the primary causes are improper hygiene and sanitation, and improper milking procedures. Moreover, because the disease had been present in the herd prior to the installation of the milking machines it as doubtful that they were the cause of Tresch’s problem. Consequently, the loan was denied.

Eventually Tresch obtained funds from another source, which allowed him to purchase new milking machines. Unfortunately, the mastitis problem continued and the resulting loss of production nearly forced Tresch into foreclosure in late 1986.

Because Tresch believed these problems were caused by Norwest’s refusal to advance him the money he filed suit seeking compensatory and punitive damages for breach of the implied covenant of good faith and fair dealing and for breach of fiduciary duty. Norwest moved for summary judgment. On October 13,1988, this motion was granted. This appeal followed.

I

Tresch maintains that Norwest breached the implied covenant of good faith and fair dealing by refusing to loan him the funds necessary to purchase new milking machines. We disagree.

At the outset we note that this is an appeal from an order granting summary judgment. Summary judgment should be granted if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P.:

“The party moving for summary judgment has the burden of establishing the absence of any genuine issue of material fact and then the party opposing the motion must come forward with evidence supporting the existence of a genuine fact issue. Pretty on Top v. City of Hardin (1979), 182 Mont. 311, 315, 597 P.2d 58, 60.

However, when reviewing such an order, this Court must review the evidence in a light which is most favorable to the non-moving party. Nitschke v. Blue Cross of Montana (1988), [231 Mont. 113,] 751 P.2d 175, 176, 45 St.Rep. 473, 475. Therefore, we must review the facts of this case in a light most favorable to Tresch in order to determine the propriety of the court’s order.

Even if this Court was to assume that the implied covenant of good faith and fair dealing applies to a lending arrangement of the nature presented in this case, the facts presented do not indicate that there was any violation of this duty. In making this determination, we look to prior decisions for guidance. In Nicholson v. United Pacific Ins. Co. (1985), 219 Mont. 32, 710 P.2d 1342, we held that:

“The nature and extent of an implied covenant of good faith and fair dealing is measured in a particular contract by the justifiable expectations of the parties. Where one party acts arbitrarily, capriciously, or unreasonably, that conduct exceeds the justifiable expectations of the second party. The second party then should be compensated for damages resulting from the other’s culpable conduct. Nicholson, 710 P.2d at 1348.

Therefore, in order to prove that Norwest breached the covenant, Tresch must show that its decision not to advance the $3,100,000 was arbitrary, capricious or unreasonable. Under the agreed upon facts Tresch does not meet this burden.

Tresch maintains that he needed the loan in order to buy new milking machines. It was his theory, upon applying for the loan, that new machines would cure the chronic mastitis that had plagued his herd for years. Norwest doubted that this purchase would cure the problem. Norwest based its conclusion upon inquires made with an agricultural scientist at Montana State University and a local dealer who sold milking machines. Inquiry also led Norwest to believe that the new machines would not generate sufficient additional income to repay the loan.

The uncontested facts clearly establish that Norwest’s refusal to advance the funds was based upon solid business reasons. It then became incumbent upon Tresch to come forward with evidence of his own that would tend to dispute this conclusion. Barich v. Ottenstror (1976), 170 Mont. 38, 550 P.2d 395; Mayer Bros, v Daniel Richards Jewelers Inc., (1986), 223 Mont. 397, 726 P.2d 815. Tresch did not meet this burden, nor did he come forward with any other issue of material fact. In fact, as noted by the trial court, Tresch admitted in his deposition that he did not think that Norwest acted out of motives or for reasons other than those state. Therefore, the order granting summary judgment must be affirmed.

II

Tresch also maintains that Norwest breached its fiduciary duty by denying the loan. Again, we disagree.

With respect to this argument, the following provision in the loan agreement is:

“4. Borrowers shall make no capital purchases in excess of $500.00 without prior consent of the Bank.”

Tresch maintains that under this clause, Norwest had the ability to exercise “absolute managerial” control over the dairy operation by retaining the power to determine which expenditures could be made. He further states because Norwest took “complete charge” over the finances of the Tresch Dairy, it had a duty to place the interests of Tresch on par with its own interest.

Assuming arguendo that such a clause leads to the creation of a fiduciary duty, we fail to find that Norwest acted unreasonably or unfairly towards Tresch. As stated earlier, Norwest’s refusal was based upon solid business grounds and there are no facts to refute it. Accordingly, Norwest’s refusal was not a breach of any fiduciary duty which may have been owed to Tresch. We affirm.

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


author: MR. CHIEF JUSTICE TURNAGE MR. JUSTICE SHEEHY,

text:
    ROSE N. BUCKMAN, Claimant and Appellant, v. MONTANA DEACONESS HOSPITAL, Employer, and State Compensation Insurance Fund, Defendant and Respondent.
    No. 88-533.
    Submitted on Briefs May 11, 1989.
    Decided June 27, 1989.
    Rehearing Denied Aug. 18, 1989.
    776 P.2d 1210.

      Lloyd E. Hartford, Billings, for claimant and appellant.
    Michael McCarter, Hughes, Kellner, Sullivan & Alke, Helena, for defendant and respondent.
   MR. CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Claimant appeals the decision of the Workers’ Compensation Court reducing the hourly rates charged for attorney fees. The decision came on remand from the opinion of this Court in Buckman v. Montana Deaconess Hospital (Mont. 1986), [224 Mont. 318,] 730 P.2d 380, 43 St.Rep. 2216. We affirm.

The issues on appeal are: (1) whether the Workers’ Compensation Court abused its discretion in reducing the attorney fees requested by claimant from $225 per hour to $80 per hour; and (2) whether the Workers’ Compensation Court erred in awarding attorney fees only for those issues upon which claimant prevailed.

Claimant, Rose Buckman, was injured in 1981 in the course and scope of her employment. It was stipulated that she was permanently, totally disabled and she requested a lump sum advance of benefits. The Workers’ Compensation Court denied the application of lump sum benefits pursuant to § 39-71-741, MCA (1985). On appeal, this Court stated that retroactive application of § 39-71-741(2) was unconstitutional for injuries occurring prior to 1985. The case was remanded to the Workers’ Compensation Court for reconsideration of claimant’s lump sum request.

On remand, partial lump sum benefits of $15,000 were advanced claimant on January 11, 1988, and upon a contingent fee arrangement between Buckman and her attorney, 40 percent was awarded for attorney fees. Moreover, the court found that claimant was entitled to reasonable attorney fees on the remainder of the compensable claim and directed claimant’s attorney to prepare and submit a statement concerning costs and the attorney’s customary and current hourly fee.

Claimant’s attorney, Lloyd Hartford, submitted a statement of an hourly rate and the time spent representing claimant. He sought $225 per hour for 154.8 hours worked, equaling a total of $34,830 in attorney fees. On March 31, 1988, a hearing was held to discuss the attorney fees requested. Three issues were presented to the Workers’ Compensation Court. The first was whether attorney fees should be limited to the contingency fee agreement. From the $15,000 lump sum the attorney’s fee was $6,000 (40 percent). The second issue was whether the number of hours claimed by the attorney was reasonable. The third issue questioned the reasonableness of the hourly rate claimed.

The Workers’ Compensation Court found that a reasonable hourly rate was $80 per hour and a reasonable time spent by the attorney in this case was 80 hours.

The first issue with which we are faced is whether this determination by the court to reduce the attorney’s submitted hourly rate was an abuse of discretion.

Section 39-71-614, MCA, provides:

“Calculation of attorney fees limitation.
“(1) The amount of an attorney’s fee assessed against an insurer under 39-71-611 or 39-71-612 must be based exclusively on the time spent by the attorney in representing the claimant on the issues brought to hearing. The attorney must document the time spent, but the judge is not bound by the documentation submitted.
“(2) The judge shall determine a reasonable attorney fee and assess costs. The hourly rate applied to the time spent must be based on the attorney’s customary and current hourly rate for legal work performed in this state, subject to a maximum established by the division.
“(3) This section does not restrict a claimant and an attorney from entering into a contingency fee arrangement under which the attorney receives a percentage of the amount of compensation payments received by the claimant because of the efforts of the attorney. However, an amount equal to any fee and costs assessed against an insurer under 39-71-611 or 39-71-612 and this section must be deducted from the fee an attorney is entitled to from the claimant under a contingency fee arrangement.”

The Workers’ Compensation Court requested that counsel submit a statement detailing the attorney’s “customary and current hourly rate.” Mr. Hartford himself asserted that he does not charge an hourly rate in the regular course of business, stating that he works upon contingent fee arrangements. Regardless, Hartford submitted a claim for $225 an hour, claiming that if he were to charge hourly fees, this rate would be necessary to support the cost of doing business.

Respondent requested a hearing to discuss the propriety of the hourly rate alleged by Mr. Hartford. Testimony was taken regarding a proper hourly fee to be charged in workers’ compensation cases. The testimony was considered in reducing claimant’s attorney’s rate from $225 per hour to $80 per hour. The court found that a reasonable fee in a workers’ compensation case is between $70 and $90 per hour.

In determining attorney fees in the case at bar, the Workers’ Compensation Court relied on the factors set out in Wight v. Hughes Livestock Co., Inc. (1983), 204 Mont. 98, 114, 664 P.2d 303, 312. We stated there:

“. . . that in every retainer contract, be it personal or public, hourly, fixed fee or contingent fee, each such contract is in reality based on the market value of the lawyer’s services.”

Claimant contends that, according to Gullet v. Stanley Structures (1986), 222 Mont. 365, 722 P.2d 619, 621, 43 St.Rep. 1335, 1337,

“We must note that the statute [§ 39-71-614, MCA] does not require that fee awards be based on an average rate of Montana attorneys, but rather awards must be based on the particular attorney’s customary hourly rate.”

In this respect, claimant alleges that the Workers’ Compensation Court incorrectly relied on the testimony in determining an hourly rate for the average Montana attorney.

While the hourly rate of the particular attorney is the proper test, Gullet cannot be relied upon specifically here. Hartford does not have a customary and current hourly fee, although he claims an equivalent would be $225. As we showed in Paulsen v. Bonanza Steak House (Mont. 1987), [225 Mont. 191,] 733 P.2d 335, 44 St.Rep. 159, the Workers’ Compensation Judge can look to evidence submitted by both parties to determine a reasonable rate. Without a customary and current hourly fee, the judge cannot wholly rely on the claimant’s attorney’s testimony of what he believes his fee would be.

Section 39-71-614(2), MCA, states that “[t]he judge shall determine a reasonable attorney fee and assess costs. The hourly rate applied to the time spent must be based on the attorney’s customary and current hourly rate for legal work performed in this state . . .” Therefore, it is within the discretion of the Workers’ Compensation Judge to determine reasonable attorney fees. In cases where a successful claimant’s attorney does not charge a customary and current hourly rate, the judge’s discretion is broad. This Court will not interfere with the decision of the Workers’ Compensation Court absent an abuse of discretion. Swan v. Sletten Construction Co. (1986), 223 Mont. 477, 726 P.2d 1170, 43 St.Rep. 1926. In this case, there is substantial credible evidence to support the findings of the Workers’ Compensation Court and we will not substitute its judgment with our own. Intermountain Insurance Co. v. Church Mutual Insurance Co. (Mont. 1987), [228 Mont. 32,] 740 P.2d 682, 44 St. Rep. 1317; Coles v. Seven Eleven Stores (1985), 217 Mont. 343, 704 P.2d 1048. An attorney who charges contingency fees cannot expect to reap the same benefits from hourly rates as they may from successful contingent fee cases. As we stated in Wight,

“The experience of the marketplace indicates that lawyers generally will not provide legal representation on a contingent basis unless they receive a premium for taking that risk. Ordinarily, when lawyers undertake a representation on a contingency basis, they bargain for a percentage of the recovery. That percentage is sufficiently high to compensate the lawyer not only for the reasonable value of the time he or she anticipates devoting to the particular lawsuit, but also for the time devoted to other lawsuits undertaken on the same basis but unsuccessful in result. Thus, in a rough and arbitrary way, the contingent percentage fee accounts for the risk of nonrecovery. Berger, Court Awarded Attorneys’ Fees: What is Reasonable? 126 Univ. Pa. Law Review 281, 324-325 (1977); Clark v. Sage (1981), 102 Idaho 261, 629 P.2d 656, 661.”

664 P.2d at 309-310.

An attorney who charges a customary and current hourly fee does not take the same risk nor expect the same high compensation in return. The court took this into consideration and decided accordingly that $80 per hour is reasonable for attorney fees in this case. We hold that the Workers’ Compensation Court did not abuse its discretion in reducing claimant’s attorney’s fees from $225 to $80 per hour.

The second issue is whether the Workers’ Compensation Court erred in awarding claimant’s attorney attorney fees only for those issues upon which claimant prevailed.

Mr. Hartford claimed that he spent, initially, 154.8 hours handling claimant’s case. He then added another 82.3 hours previously overlooked, totaling 236 hours. The fee for this case, over and above the contingent fee, was calculated at $53,100. In considering these hours submitted, the court found that the attorney should not receive prevailing fees for those issues upon which he was not successful. Hartford looks to § 39-71-614, MCA, which states that “attorney’s fees assessed against an insurer under 39-71-611 or 39-71-612, must be based exclusively on the time spent by the attorney in representing the claimant on the issues brought to hearing.” As alleged, attorney fees would then be paid for any time spent on any issue, compensable or illusory.

The Workers’ Compensation Court considered the hours submitted by Mr. Hartford on all the issues brought before the court. A substantial amount of time was spent concerning an annuity from a total lump sum award, which was denied. More hours were spent on a penalty issue against the insurer, which claimant states was withdrawn, and on the attorney fee issue. All of these hours, as the court pointed out, did not relate to the partial lump sum advance or the constitutional issues, prevailed upon in Buckman I. § 39-71-614(1) states that “the judge is not bound by the documentation submitted.” For the same reason that an attorney would not receive attorney fees in a case where he did not prevail on any issues, an attorney will not be awarded attorney fees for issues upon which he did not prevail here. We held in Krause v. Sears Roebuck & Co. (1982), 197 Mont. 102, 641 P.2d 458, that under § 39-71-612, MCA, a claimant is entitled to attorney fees and costs in relation only to his proof on prevailing issues.

Similarly, under § 39-71-612, MCA, “[i]f a dispute in amount owed is resolved in favor of claimant, this Court inevitably finds that an award of attorney’s fees is appropriate. Polich v. Whalen’s O.K. Tire Warehouse (1983), 203 Mont. 280, 661 P:2d 38; Walker v. H.F. Johnson (1978), 180 Mont. 405, 591 P.2d 181, Catteyson v. Falls Mobile Home Center (1979), 183 Mont. 284, 599 P.2d 341.” Lamb v. Missoula Imports (Mont. 1988), [230 Mont. 183,] 748 P.2d 965, 967-968, 45 St.Rep. 127, 131.

Furthermore, in Milender v. Carpenter (Mont. 1987), [230 Mont. 1,] 748 P.2d 932, 44 St.Rep. 2204, pursuant to § 39-71-611, MCA, the state fund denied a claim for benefits. Only after the claim was later adjudged compensable by the Workers’ Compensation Court was the award of attorney fees proper.

Therefore, the Workers’ Compensation Court did not err in finding that the claimant’s attorney should not receive attorney fees for issues upon which he did not prevail and the number of hours found by the court as reasonable to spend in this case is upheld.

Affirmed.

MR. JUSTICES HARRISON, GULBRANDSON and WEBER concur.

MR. JUSTICE McDONOUGH did not participate.

MR. JUSTICE SHEEHY,

dissenting:

Counsel for the claimant Buckman, Lloyd Hartford, brought two cases to this Court which were consolidated for oral argument in 1986. They were Buckman v. Montana Deaconess Hospital (Mont. 1986), [224 Mont. 318,] 730 P.2d 380, 43 St.Rep. 2216, and Stelling v. Rivercrest Ranches (Mont. 1986), [224 Mont. 313,] 730 P.2d 388, 43 St.Rep. 2212. Each of these cases had essentially one prime issue, that is whether the 1985 legislative amendment of § 39-71-741, MCA, could be applied retroactively.

Hartford was successful in Buckman, establishing that retroactivity was improper. He was unsuccessful in Stelling, although Stelling adopted Buckman on retroactivity. The reason Hartford was unsuccessful in Stelling was that his client had no standing to raise a further constitutional issue. Both cases established definitively that the amendment to § 39-71-741, MCA, had no retroactive application.

The reason for my dissent here is the obvious disparate treatment of counsel for the claimants and counsel for the insurer in each of these cases. In Buckman, a case which counsel for the insurer lost, the state counsel recovered an attorneys fee based on 110 hours. The Workers’ Compensation Court, however, allowed Hartford only 80 hours for his efforts on the same case. The Court manages to do this by eliminating from Hartford’s claim the hours that he spent on an issue on which he was unsuccessful. That can occur only because this Court and the Workers’ Compensation Court have effected a judicial amendment of § 39-71-614, MCA, relating to the calculation of attorneys fees.

Under the attorneys fees statute, the fee assessed against an insurer “must be based exclusively on the time spent by the attorney in representing the claimant on the issues brought to hearing.” If Hartford were entirely unsuccessful, of course, he is entitled to no fee. Because he was successful, he is entitled under the statute to compensation for his time spent on “the issues brought to hearing.” Any reduction of that time by eliminating hours spent on unsuccessful issues is a violation of § 1-2-101, MCA, which states that the function of a judge in declaring the substance of a statute is “not to insert what has been omitted or to omit what has been inserted.”

The legislature and the administrators of the Workers’ Compensation Fund have thus far terribly bungled that fund and put it in a precarious financial position. The legislature has already done much to reduce the recoverable fees by attorneys who represent claimants in Workers’ Compensation cases. There is no need for us to find reasons which make claimants’ attorneys subsidize the impoverished State Fund. However heroic our efforts, we can never catch up with the errors of management.

If counsel for the Fund in this case spent 110 hours losing a Supreme Court case and an important issue of retroactivity, certainly the attorney for the successful claimant is entitled to at least 110 hours. I dissent.

MR. JUSTICE HUNT concurs in the foregoing dissent.