author: JUSTICE HUNT

text:
    FIRST SECURITY BANK OF ANACONDA, a Montana corp., Plaintiff and Respondent, v. EDWIN T. VANDER PAS and Ed Vander Pas Oil, a Montana Corp., Defendants and Appellants. EDWIN T. VANDER PAS, Plaintiff and Appellant, v. OILFIELD SUPPLY CO., INC., a Nevada Corp., Oilfield Supply Co., a Montana Corp., Roy L. Brown, Dean W. Loney, Montana-Pacific Oil and Gas Co., a/k/a Montana Pacific Oil and Gas, Ltd., et al., Defendants and Respondents.
    No. 90-626.
    Submitted on briefs July 25, 1991.
    Decided Oct. 8, 1991.
    250 Mont. 148.
    818 P.2d 384.

      Stephen A. Doherty and George R. Crotty, Jr., Graybill, Ostrem, Warner & Crotty, Great Falls, for defendants and appellants.
    Mark F. Higgins, Ugrin, Alexander, Zadick & Slovak, Great Falls, Michael E. Webster, Crowly, Haughey, Hanson, Toole & Dietrich, Billings, for plaintiff and respondent.
   JUSTICE HUNT

delivered the opinion of the Court.

The Montana Ninth Judicial District Court, Toole County, granted a motion for summary judgment in favor of respondent, First Security Bank of Anaconda. The court ordered appellants Edwin T. Vander Pas, and Ed T. Vander Pas Oil, Inc., a Montana corporation, to specifically perform certain obligations pursuant to an agreement terminating a business relationship. The court ordered Vander Pas to convey to First Security Bank his one-half interest in certain real property, together with buildings and improvements, located at Oilmont. It is from this order that Vander Pas appeals. We affirm.

The issue before the Court is whether the summary judgment granted by the District Court entitled First Security Bank to specific performance.

For several years, Vander Pas and Dean W. Loney were involved together in several business relationships located primarily in Toole Comity. In 1981, the parties were desirous of terminating and dissolving such business relationships on a fair and equitable basis. On December 4, 1981, they entered into a contract which provided that the assets and liabilities of their partnerships would be assumed by Loney. In consideration, Loney agreed to pay Vander Pas $800,000, plus interest. The contract specifically provided that Loney was to pay Vander Pas $200,000 upon execution of the agreement. The record reflects that this was performed by Loney. The balance of the remaining $600,000 debt was to be evidenced by a promissory note bearing an annual interest rate of 14 percent to be paid in quarterly installments, with the first payment due on or before March 31,1982. The record reflects that approximately $600,000 in installment payments have been made on the note over a period exceeding three years.

In 1985, Loney defaulted on the payments, and the parties renegotiated payments which were evidenced by a second promissory note. After a few months, Loney again defaulted. In 1987, while attempting to obtain a sizable mortgage on the Oilmont property, Loney discovered that the quit claim deed to the property was never executed.

On March 9,1988, Loney assigned his interest in the contract and gave limited power of attorney to respondent First Security Bank of Anaconda. The power of attorney gave respondent authority to commence, prosecute, and conclude all legal actions and proceedings to enforce compliance with the contract between Loney and Vander Pas. Loney also transferred his one-half interest in the Oilmont property to respondent.

On July 27, 1987, Vander Pas commenced litigation against various corporations to obtain payment under the 1985 promissory note. Respondent then filed a complaint against Vander Pas and Ed Vander Pas Oil, Inc. The two actions were later consolidated.

During the proceedings, Vander Pas moved the court for a partial summary judgment, asking that Loney and respondent pay the total amount due on the 1985 note. Respondent filed a cross-motion for summary judgment requesting that Vander Pas specifically perform the contract by conveying the Oilmont property to respondent. The court denied Vander Pas’s motion and ordered him to convey the deed to respondent. It is from this order that Vander Pas appeals.

The dispute between the parties arises over certain provisions in the 1981 contract set out below:

“Oilmont Investments is a Montana general partnership owned fifty percent (50%) by Dean W. Loney and fifty percent (50%) by Ed Vander Pas Oil in accordance with a verbal partnership agreement. The partnership assets include approximately 3 acres of land in Oilmont, Montana, and the buildings and improvements located thereon, together with cash, accounts and notes receivable. The liabilities include various accounts and notes payable to banks and other creditors. The parties hereby agree that rather than retire all liabilities, balance capital accounts and distribute assets, they will terminate their business relationship in the partnership as follows:
“ £(a) Edwin T. Vander Pas and/or Ed Vander Pas Oil, as the case may be, will transfer all of his or its interest in the partnership assets to Dean W. Loney or his nominees by appropriate assignments, deeds, bills of sale, or other documents as may be necessary to transfer title to such assets, subject, however, to all liabilities thereon.
“8. The parties hereto acknowledge that numerous other and further documents are contemplated in order to carry out the intention of this Agreement to terminate a series of business relationships. Each of said parties therefore agrees to cooperate fully with the other in executing all such reasonable documents as may be necessary to fully effectuate this Agreement.”

No time was specified in the contract as to when the Oilmont property was to be transferred. Unlike other property transferred in the contract, there were no provisions which pledged the Oilmont property and buildings as security for the remaining debt.

The granting of summary judgment is proper when there is no genuine issue as to material fact and the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P. Summary judgment is never a substitute for trial on the merits. Krieg v. Massey (1989), 239 Mont. 469, 471, 781 P.2d 277, 278. When examining the record, any factual inferences that can be drawn must be resolved in favor of the non-moving party. Krieg, 239 Mont. 469, 781 P.2d at 278. In order to prevail, the non-moving party must establish facts showing a genuine issue exists. O’Bagy v. First Interstate Bank (1990), 241 Mont. 44, 46, 785 P.2d 190, 191. The non-moving party may not rely solely on the allegations stated in the pleadings. Drug Fair Northwest v. Hopper Ent., Inc. (1987), 226 Mont. 31, 33, 733 P.2d 1285, 1287. Instead, the opposing party has an affirmative duty to respond by affidavits or sworn testimony containing material facts that raise a genuine issue. Drug Fair, 733 P.2d at 1287. In addition, conclusive or speculative statements are insufficient to raise genuine issues of material facts. Anderson v. Burlington Northern, Inc. (1985), 218 Mont. 456, 462, 709 P.2d 641, 645.

In opposing the motion for summary judgment, Vander Pas offered nothing in the record by way of affidavit or otherwise which would create a material factual dispute. For example, in his affidavit Vander Pas admitted that he did not intentionally withhold his signature for the deed to the property and that it was simply an oversight that the required documents were not executed. Instead, he listed several issues in his brief in a conclusive fashion. This is not an appropriate means of opposing a motion for summary judgment. West Lake v. Osborne (1986), 220 Mont. 91, 95, 713 P.2d 548, 551. We hold that the District Court did not err in granting summary judgment.

As a general rule, the construction and interpretation of written agreements, including contracts, is a question of law for the court to decide. Cassia Creek Reservoir Co. v. Harper (Idaho 1967), 426 P.2d 209, 212. “It is a question of law for the court to determine whether there exists ambiguity sufficient to submit the question of the parties’ intent to the trier of fact.” Norlund v. School Dist. No. 14 (1987), 227 Mont. 402, 405, 738 P.2d 1299, 1301. When the language of the contract is clear and unambiguous on its face, then it is the duty of the court to enforce the contract as the parties intended. Wortman v. Griff (1982), 200 Mont. 528, 536, 651 P.2d 998, 1002.

If a contract does not specify a time of performance, then a reasonable time is allowed. Section 28-3-601, MCA. To determine what constitutes a reasonable time can be a question of fact or a question of law. Dunjo Land Co. v. Hested Stores Co. of Wyoming (1973), 163 Mont. 87, 90, 515 P.2d 961, 962. If the facts are clearly established or undisputed, then it is a question of law solely for the courts to decide. Dunjo, 515 P.2d at 962-63.

The court concluded that the language and purpose of the contract was clear on its face and was unambiguous. The contract was drafted with the intent of dissolving the business relationship between the parties in 1981. Vander Pas argued that he need not convey the property until the entire debt was paid. The contract did not provide for Vander Pas to hold the property as security until Loney paid the total amount of the debt. Paragraph 3 of the contract stated that Vander Pas “will transfer all of his or its interest in the partnership assets to Dean W. Loney,” which included “approximately 3 acres of land in Oilmont, Montana, and the buildings and improvements located thereon.” Nothing in the contract indicated that the Oilmont property was subject to a security interest, unlike other provisions of the contract which provided for contingencies in case Loney defaulted on the note. There was nothing stated in the contract which would have prevented Vander Pas from conveying the Oilmont property at the time the parties executed the contract.

In addition, section 8 of the contract demonstrates that the parties contemplated that additional documents would be necessary to carry out the intention of dissolving the business relationship. The undisputed facts demonstrate that Vander Pas bargained for a down payment and a note. He received those items in consideration of transferring the property. We agree with the District Court and hold that the time for Vander Pas to transfer the property was at the time the contract was executed and that nine years is an unreasonable time for Vander Pas to hold the property as a matter of law.

Specific performance is an equitable remedy which empowers the court to fashion a remedy which is appropriate under the circumstances according to the purpose of the contract. See Keaster v. Boszik (1981), 191 Mont. 293, 623 P.2d 1376. There is no prerequisite for a contract to be absolute in every detail before granting specific performance. Keaster, 623 P.2d at 1381. The District Court found that the equities weighed in favor of Loney because Vander Pas had received $600,000 in payment and yet failed to turn over the property for nine years. Section 27-1-419, MCA, presumes that a breach of an agreement to transfer real property cannot be relieved by pecuniary compensation. Because the contract calls for Vander Pas to convey the Oilmont property at the time of execution, we hold that the granting of specific performance was appropriate.

We affirm the District Court.

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


source: Caselaw Access Project

license: Public Domain

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. GARY EUGENE RADI, Defendant and Appellant.
    No. 91-046.
    Submitted on briefs June 28, 1991.
    Decided Oct. 8, 1991.
    250 Mont. 155.
    818 P.2d 1203.

      Gary Eugene Radi, pro se.
    Marc Racicot, Atty. Gen., Jennifer Anders, Asst. Atty. Gen., Helena, Robert Deschamps, III, County Atty., Betty Wing, Deputy County Atty., Missoula, for plaintiff and respondent.
   JUSTICE HUNT

delivered the opinion of the Court.

Defendant Gary Eugene Radi pled guilty to two counts of burglary before the District Court of the Fourth Judicial District, Missoula County, on April 9, 1990. On May 22, 1990, the Honorable Jack L. Green, District Court Judge, sentenced defendant to 20 years in the Montana State Prison on each count, the two terms to run consecutively. Defendant, appearing pro se, made a motion before the District Court on October 3, 1990, to withdraw his guilty plea. Defendant appeals from the District Court’s order of November 29,1990, denying his motion to withdraw the guilty plea. We affirm.

The sole issue before this Court on appeal is whether the District Corut erred in denying defendant’s motion to withdraw his plea of guilty.

Between the hours of 5 p.m. on November 21, 1989, and 6:20 a.m. on November 22, 1989, 2J’s Produce in Missoula was unlawfully entered. Once inside 2J’s Produce, the individuals gained entrance to an adjacent business, A & I Distributing. Various items, including a VCR recorder, a radio, a safe, a number of chain saws, an acetylene cutting torch, a 2J’s Produce van, and a variety of food items, were stolen from both premises.

On November 22, 1989, a confidential informant gave the police information concerning the burglaries. The informant told the police that three individuals were involved in the burglaries and gave the police additional details concerning the crimes. He identified one of the participants as an individual recently released from the Montana State Prison, known to him as “Dan.” He gave police a description of the individual, as well as his address. With this information and the assistance of the Adult Probation and Parole Office, the individual was identified as Dan Gochanour by the police. The informant said the second individual involved was “Big Brad.” He related that Big Brad was an ex-convict and gave police a detailed description of the man. Police checked with personnel at the Life Skills Center in Missoula who indicated that Brad Eisenman was known to them as Big Brad and that he fit the description given by the informant. The informant did not know the identity of the third individual involved.

Information by this informant also led the police to an individual named Monte Anderson. On November 28, 1989, the police interviewed Anderson. He recounted that a day or so before Thanksgiving he was staying over at his sister’s apartment and had passed out on her couch in the evening. Around midnight, three individuals entered the apartment. Anderson overheard the individuals discussing 2J’s Produce and a van, and saw the individuals bringing a number of food items and a chain saw into the apartment. Anderson identified the three individuals as Dan Gochanour, Brad Eisenman, and a man he did not know named Gary. From a Probation and Parole photograph of defendant Radi, Anderson identified him as the Gary he had seen on the night in question.

The police obtained a search warrant for each of the residences of Radi, Eisenman, and Gochanour. Some of the stolen items were found at each residence. At the residence of the defendant, the police found a chain saw, VCR recorder, and a roll of pennies with writing on it, indicating it was the property of A & I Distributing. Additionally, the police found six dozen Cascade Poultry eggs, three pounds of Darigold unsalted butter with 2J’s stickers, seven packages of Montana Legend meat, and several bags of coffee. These food items matched the description of items stolen from 2J’s Produce. Similar quantities and types of food items were found at the Eisenman and Gochanour residences.

On December 13, 1989, defendant was charged by information with two counts of burglary in violation of § 45-6-204, MCA. Charges were also filed against Gochanour and Eisenman. Defendant entered a plea of not guilty to the charges on December 21, 1989. On the morning his trial was to begin, April 9,1990, defendant appeared with counsel and requested that he be allowed to withdraw his plea of not guilty. The District Court then accepted defendant’s guilty plea and ordered the matter set for sentencing. Following a pre-sentencing investigation on May 22, 1990, defendant was sentenced to 20 years in the Montana State Prison on each of the two counts, the terms to run consecutively. On October 3,1990, defendant appeared pro se and filed a motion to withdraw his guilty plea in the Missoula County District Court. This motion was denied on November 19, 1990.

Defendant contends the District Court erred in not allowing him to withdraw his guilty plea. At trial, defendant was to rely upon several witnesses to establish alibi as a defense. Defendant alleges that action by the prosecutors for the State effectively prohibited him from calling these witnesses to establish his innocence and that as a result his guilty plea was not voluntary.

Before discussing the particular details of defendant’s contention, we first state some general principles governing the withdrawal of a guilty plea. Concerning pleas in general, § 46-12-204, MCA, states in part:

“46-12-204. The plea — plea bargains. (1) The defendant shall enter a plea of guilty or not guilty to the indictment, information, or complaint. If the defendant refuses to plead to the indictment, information, or complaint, a plea of not guilty must be entered.
“(2) The court may refuse to accept a plea of guilty and shall not accept the plea of guilty without first determining that the plea is voluntary with an understanding of the charge.”

Additionally, § 46-16-105, MCA, provides that:

“46-16-105. Plea of guilty. (1) Before or during trial, a plea of guilty may be accepted when:
“(a) the defendant enters a plea of guilty in open court; and
“(b) the court has informed the defendant of the consequences of his plea and of the maximum penalty provided by law which may be imposed upon acceptance of such plea.
“(2) At any time before or after judgment the court may, for good cause shown, permit the plea of guilty to be withdrawn and a plea of not guilty substituted.” [Emphasis added.]

This Court has consistently stated that “[t]here is no set rule or standard which can be relied on in any given case where a motion is made to withdraw a guilty plea.” State v. Huttinger (1979), 182 Mont. 50, 55, 595 P.2d 363, 366. Each case involving a motion to withdraw a guilty plea must be considered in light of the specific record of the case. State v. Griffin (1975), 167 Mont. 11, 21, 535 P.2d 498, 503.

Initially, the grant or denial of a motion to withdraw a plea of guilty is within the sound discretion of the trial court. Matter of Hardy (1980), 188 Mont. 506, 614 P.2d 528. “A denial of a request to withdraw a guilty plea is subject to review only when there has been an abuse of discretion by the trial court.” State v. Wilson (1982), 198 Mont. 305, 314, 645 P.2d 958, 963.

The process of pleading guilty to a criminal charge involves a waiver by the criminal defendant of numerous constitutionally based rights and protections. In light of the importance of the rights waived, it is a well-settled legal principle that a guilty plea must be a voluntary, knowing, and intelligent choice among the alternative courses of action open to the defendant. North Carolina v. Alford (1970), 400 U.S. 23, 91 S.Ct. 160, 27 L.Ed.2d 162.

This concept is expressed in the Montana statutes governing pleas. Additionally, this Court has added if “there is any doubt that a plea is not voluntary, the doubt should be resolved in the defendant’s favor. On application to change a plea, all doubts should be resolved in favor of a trial on the merits.” Huttinger, 595 P.2d at 367. “The fundamental purpose of allowing the withdrawal of a guilty plea is to prevent the possibility of convicting an innocent man.” State v. Arledge (1987), 228 Mont. 225, 232, 741 P.2d 781, 785.

There are at least three factors which this Court has determined should be considered in every case in which a defendant attempts to withdraw a guilty plea:

1. The adequacy of the District Court’s interrogation at the time the plea was entered as to the defendant’s understanding of the plea;

2. The promptness of the motion to withdraw the plea; and

3. The fact that the defendant’s plea was apparently the result of a plea bargain in which the guilty plea was given in exchange for dismissal of another charge. State v. Long (1987), 227 Mont. 199, 201, 738 P.2d 487, 489.

Defendant alleges that prior to trial he intended to rely on the testimony of his common-law wife, Jeannie Roberts, and co-defendant, Dan Gochanour, to establish the defense of alibi. Shortly before trial, the State entered into a plea agreement with co-defendant Gochanour. Defendant claims that Gochanour was not to be sentenced until after defendant’s trial and that the State’s agreement with Gochanour would have been withdrawn if he had given evidence during the trial exonerating defendant. Additionally, defendant claims that Roberts was precluded from testifying on his behalf. He argues that if Roberts had testified truthfully as to his whereabouts on the night in question she would somehow have been forced to implicate Gochanour in the crime. By so doing, she would have subjected defendant and his son, who is currently incarcerated in the Montana State Prison, to potential retaliation for having assisted the authorities in convicting Gochanour.

Defendant contends that upon realizing his two crucial witnesses had been placed in a situation in which they could not testify without retaliation from the State, he decided out of fear to change his plea from not guilty to guilty. Defendant quotes from this Court’s opinion in State v. Mesler (1984), 210 Mont. 92, 682 P.2d 714, wherein we stated that:

“A change of plea will be permitted only if it fairly appears the defendant was ignorant of his rights and the consequences of his act, or he was unduly and improperly influenced either by hope or by fear in making the plea, or if it appears the plea was entered under some mistake or misapprehension.”

Mesler, 682 P.2d at 716. Defendant urges that this case falls within the class of cases described in Mesler in which a change of plea should be permitted.

The usual basis on which to attack the denial of a motion to withdraw a guilty plea is that at the time the plea was entered the district court judge failed to adequately explain the significance of the guilty plea to the defendant. While the trial court’s interrogation of defendant is not specifically attacked in this instance, it is helpful in determining if the plea was voluntary. At the time the plea was entered, the following discussion took place between the court and defendant:

“THE COURT: Now this is Criminal Cause No. 9037, the State of Montana against Gary E. Radi, and the record should show that the defendant is personally present in court with his counsel, Public Defender Smith. State of Montana is represented by Deputy County Attorney Wing.
“Now, Mr. Radi, you have been charged with two counts of burglary, felonies, and you have entered a plea of not guilty, and this is the time set for trial of your cases.
“The jury is coming at this time. They’re to be here by 10:00, and it’s twenty minutes until 10:00. But I am informed that you wish to change you plea; is this correct?
“THE DEFENDANT: Yes, Sir.
“THE COURT: And why do you wish to change your plea?
“THE DEFENDANT: I was involved in the crime.
“THE COURT: You realize that you have a right to a trial by jury on these charges. That in the event you go to trial, you have the right to cross-examine the witness called by the state, you have the right to call witnesses in your own behalf, and the burden is on the State to prove your guilt beyond a reasonable doubt.
“THE DEFENDANT: Yes, sir.
“THE COURT: You have the right to be confronted by your accusers, and you have the privilege against self-incrimination.
“THE DEFENDANT: Yes, sir.
“THE COURT: These are rights you have.
“THE DEFENDANT: Yes.
“THE COURT: And if you do change your plea to a plea of guilty, you’ll be giving up all of these rights.
“THE DEFENDANT: Yes, sir.
“THE COURT: You understand that.
“THE DEFENDANT: Yes.
“THE COURT: Now has anyone made any promise of leniency, told you things would go easy with you if you were to do this?
“THE DEFENDANT: No.
“THE COURT: Has the sheriff or anyone else used force or threats of force to cause you to do this?
“THE DEFENDANT: No.
“THE COURT: Is this your own free and voluntary act after having discussed the matter fully with your attorney ?
“THE DEFENDANT: Yes, Sir.” [Emphasis Added.]

The trial court then explained to defendant that the court would not be bound by the plea agreement. The court then explained the maximum possible sentence which defendant could receive. Finally, before accepting defendant’s guilty plea, the court repeated the discussion concerning defendant’s rights and the consequences of pleading guilty.

The District Court’s colloquy adequately apprised defendant that by pleading guilty his right to call witnesses on his behalf to present favorable testimony, or to cross-examine the witnesses called by the State, was waived.

Co-defendant Gochanour could have been called as a witness by defendant. Defendant contends that “it was made crystal clear” that if Gochanour gave testimony exonerating defendant that Gochanour’s plea agreement with the State would be rescinded and he would be sentenced to prison for the maximum possible term. The State counters that Gochanour’s plea agreement was in no way dependent upon his testifying either for or against defendant. Defendant has now come forward with an affidavit written by Gochanour after Gochanour accepted the plea bargain and was sentenced to a term in prison significantly shorter than the maximum possible sentence he could have received. Gochanour now states that the third person involved in the crimes was not defendant, but the now deceased Monte Anderson. Without attempting to discuss the trustworthiness or timing of the present affidavit, we conclude that the District Court did not abuse its discretion when it found that defendant was not prohibited from calling Gochanour as a witness on his behalf if he had chosen to do so. Further, defendant’s fear of retaliation for the testimony of Roberts has not in any way been related to acts of the State.

We turn next to the issue of whether defendant’s guilty plea was the result of a plea bargain in which the State agreed to dismiss a charge in return for a plea of guilty. The State did not dismiss any charges but did agree not to pursue a persistent felony offender designation which could have added anywhere from 5 to 100 years on each of defendant’s convictions. The State argues that this is comparable to having dismissed a charge and thus weighs in favor of allowing the plea bargain to stand. We agree. This Court has stated many times that it will not lend its assistance to an accused criminal in escaping the obligations of his agreement after accepting the benefits thereof. State v. Koepplin (1984), 213 Mont. 55, 689 P.2d 921.

Defendant has not brought forward evidence sufficient to convince this Court that the District Court’s decision denying his motion to withdraw the guilty plea was an abuse of discretion. As we have previously stated:

‘Where a District Court has done all that it can to determine from the defendant or otherwise, that the proposed plea of guilty is voluntarily made, the defendant understands what he is doing and is advised of the consequences of his plea, including the nature and extent of his punishment, has been adequately advised by counsel, and has been treated fairly at all stages of the prosecution against him, and that in fact the defendant states he is guilty of the charges made, then this Court has a duty to support the District Court when it allows a plea of guilty to be entered in place of a plea of not guilty.” State v. Long (1987), 227 Mont. 199, 202, 738 P.2d 487, 489; quoting from State v. Lewis (1978), 177 Mont. 474, 484, 582 P.2d 346, 352.

We hold that defendant’s guilty plea was voluntary, knowing, and intelligent. The District Court did not abuse its discretion in denying defendant’s motion to withdraw his guilty plea. Affirmed.

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


text:
    IN THE MATTER OF R.H., A Youth in Need of Care.
    No. 90-354.
    Submitted on Briefs May 10, 1991.
    Decided July 30, 1991.
    250 Mont. 164.
    819 P.2d 152.

      Patrick R. Watt, Jardine, Stephenson, Blewett & Weaver, Great Falls, for appellant.
    Marc Racicot, Atty. Gen., Kathy Seeley, Asst. Atty. Gen., Helena, Patrick L. Paul, Cascade County Atty., Tammy Plubell, Deputy County Atty., Great Falls, for Montana Dept, of Family Services.
    John Keith, Great Falls, for R.H.
   JUSTICE HUNT

delivered the Opinion of the Court.

The natural parents of R.H., a youth in need of care, appeal from an order of the Eighth Judicial District Court, Cascade County, terminating their parental rights. We affirm.

The following issues are raised on appeal:

1. Did the District Court err in finding that the court-ordered treatment plan was appropriate?

2. Was the court-ordered treatment plan ambiguous so as to deny the parents due process?

The natural parents had four children: L.H., J.H., R.H., and V.H. The oldest child, L.H., began to live with her paternal grandmother in the mid-1970s. In 1975, the second child, J.H., was placed in foster care. Five years later, the parents voluntarily relinquished custody of J.H. to the State.

On April 28, 1986, the State first became directly involved with R.H. At that time, it petitioned for temporary investigative authority and custody of R.H. and his brother, V.H. The affidavit in support of the petition outlined severe developmental delays of V.H. caused by lack of stimulation by the parents, R.H.’s withdrawn behavior, and apparent physical neglect of both children.

Following a hearing, the District Court ordered the parents to undergo psychological evaluations. The evaluations, prepared by Dr. Monty Kuka, Ph.D., a clinical psychologist, were admitted at the show cause hearing on the petition.

In the evaluations, Dr. Kuka found that both parents had borderline intellectual abilities. Dr. Kuka’s assessment of the mother’s parenting skills resulted in a fairly bleak picture. The doctor found that she had limited insight into herself and her relationships and that she did not recognize even the most obvious characteristics of being a good mother. He was pessimistic about her ability to benefit from supportive services, as well as her ability to make any long-term changes.

Dr. Kuka found that the father’s overall adjustment was fairly good; he appeared kind and sensitive to his wife and children. Dr. Kuka concluded, however, that it was doubtful that the father could offset the significant negative factors exhibited by the mother because the father was not assertive and put the mother’s needs before those of the children.

The show cause hearing was held on July 25, 1986. Following the hearing, the District Court ordered that the State maintain temporary legal custody of V.H. and R.H., with V.H. residing with an aunt and uncle, and R.H. residing with his parents. The court further ordered the mother to attend New Directions classes and the father to attend counseling with R.H. as needed.

Shortly after the hearing, the parents and R.H. moved to Washington. This move was prompted by the mother’s desire to avoid the pressures she felt from her family, who resided in Montana, and by the father’s desire to live closer to his father, who resided in Washington. In November 1986, after her grandmother’s death, L.H. joined her parents in Washington.

While the family lived in Washington, a social worker and a teacher reported suspected abuse of the children to Montana authorities. In March 1987, when the family returned to Great Falls to pick up some stored items, L.H. called the Crisis Line and asked to be removed from the parents’ home. R.H. and L.H. told social workers that the mother used a leather belt to spank R.H. on the face, legs, and buttocks. She threatened L.H. with a knife and held a knife against R.H.’s throat. Frequently, there was not enough to eat in the house, and L.H. often had to babysit R.H. in the evening while the mother worked.

The State petitioned for temporary custody of L.H. and permanent custody of V.H. and R.H. At the custody hearing, the parties stipulated and the court-ordered the termination of the parental rights to L.H. and V.H. The State was granted permanent custody of L.H. and the aunt and uncle were granted permanent custody of V.H. The court also ordered that the State maintain temporary custody of R.H., who would be placed in the foster home where J.H. had been living for several years. In addition, the court directed the parents to attend and successfully complete parenting classes. They were also ordered to undergo psychological evaluations and to follow through with all recommendations made in those evaluations. The order provided for future review to determine whether the parents were able to resume custody of R.H.

In March 1988, counsel for the State, counsel for the parents, and counsel for R.H. entered into another stipulation, which was adopted by the District Court. The stipulation left temporary custody of R.H. with the State and established a new treatment plan for the parents. The treatment plan required the parents to provide the State with written reports about their progress in parenting classes. It also required the parents to begin psychological counseling immediately, to disclose the name of the therapist to the State, and to provide the State with progress reports from the therapist.

For one and one-half years, the mother attended parenting classes in Washington. The father attended the classes for one year. The parents also sought family counseling but learned that such counseling was of little use without R.H.’s participation. They did not obtain individual therapy. However, they underwent psychological evaluations.

From June 1987 to September 1988, the parents did not contact R.H. In September 1988, the social worker in charge of the case initiated a visit between R.H. and the parents. All appeared happy to see each other during the meeting, which lasted about 2 hours and 15 minutes. R.H. seemed to have a warm relationship with the father, but interacted only slightly with the mother. After the visit, R.H. was anxious and more disruptive at home and school.

A second visit took place later that month, during which R.H. spent the night with the parents. After the visit, R.H.’s behavior deteriorated dramatically. He became very hostile and confused. He began wetting and messing his bed. He cut hunks out of his hair. He refused to shower or wear clean clothes. His grades dropped from As and Bs to Ds and Fs. His behavior gradually stabilized until January, when he received a Christmas card and gift from his parents. He began acting out again.

R.H. was evaluated by Dr. Edward Trontel, Ph.D., a clinical psychologist, on February 7, 1989. Dr. Trontel found that R.H. was very depressed. The doctor also found that R.H. had great difficulty with mother figures. The doctor concluded that R.H. had difficulty paying attention in school because he was so worried about the possibility he would be returned to his parents. R.H. told him that, although he wished to be with his parents, he was terribly frightened of his mother and was afraid she might kill him if he said the wrong thing. He believed his father could not protect him from her. In Dr. Trontel’s opinion, even under the circumstances of this case, the mother’s threats and lack of empathy for R.H. were unusual.

On July 13,1989, the State petitioned for permanent legal custody of R.H. and termination of parental rights. Three hearings were held on the matter. Dr. Trontel testified regarding his evaluation of R.H. Dr. Kuka testified concerning his 1986 evaluations of the parents. He compared his evaluations with those completed by Dr. Panek in Washington in 1988. Dr. Kuka stated that Dr. Panek’s findings were even more negative and extreme than his own two years earlier. The doctor concluded that there was not any realistic hope that the parents would develop the kind of dramatic changes needed at this point to be able to parent effectively.

R.H. did not testify at any of the hearings, but was interviewed in chambers by the District Court. R.H., then 12 years old, told the judge he enjoyed living with his foster family, he was afraid of his mother because quite often she would strike him with a leather belt, and, although he did not mind visiting his parents, he did not wish to live with them. The parents testified at the hearing that they were adequate parents and, while they had attempted to comply with the treatment plan, they did not believe they truly needed to do the things the State told them to do.

Following the hearing, the District Court issued findings of fact, conclusions of law, and an order terminating the parental rights of the parents and awarding permanent custody, with right to consent to adoption, to the State. The parents appeal.

The statute for terminating parental rights provides in pertinent part:

“(1) The court may order a termination of the parent-child legal relationship upon a finding that the circumstances contained in subsection ... 1(c), as follows, exist:
“(c) the child is an adjudicated youth in need of care and both of the following exist:
“(i) an appropriate treatment plan that has been approved by the court has not been complied with by the parents or has not been successful; and
“(ii) the conduct or condition of the parents rendering them unfit is unlikely to change within a reasonable time. (Emphasis added.)” Section 41-3-609, MCA.

The parents argue that the State failed to meet its burden of proof because it neglected to show that the court-ordered treatment plan was appropriate. The State counters that it was not required to prove that the plan was appropriate because the parents, through counsel, stipulated to the plan.

The termination of parental rights implicates fundamental liberty interests. Santosky v. Kramer, 455 U.S. 745, 102 S.Ct. 1388, 71 L.Ed.2d 599 (1982). Therefore, the State bears the burden of proving by clear and convincing evidence all of the statutory criteria needed to terminate parental rights, including the appropriateness of the treatment plan. Santosky, 455 U.S. at 769, 102 S.Ct. at 1403, 71 L.Ed.2d at 616; In re L.W.K., 236 Mont. 14, 18, 767 P.2d 1338, 1341 (1989). The fact that the parents, while represented by counsel, stipulated to the plan adds some weight to the inquiry. However, that fact does not in and of itself prove that the plan was appropriate.

Parents claim that the plan was deficient because the State’s witness, Dr. Kuka, testified that the parents needed to attend parenting classes, psychotherapy sessions, and group therapy meetings in order to develop insights into themselves and improve their parenting skills. The parents point out that the treatment plan contained only two of the three components cited by Dr. Kuka as necessary for successful treatment: parenting classes and individual psychotherapy sessions.

Although the plan did not possess every element that Dr. Kuka believed was important for treatment, we hold that, under the facts of this case, it was not inappropriate. Dr. Kuka stressed that the most significant component was psychotherapy, while parenting classes and group therapy were secondary considerations. Because the treatment plan contained the most important element, as well as one of the others, the plan was appropriate.

Furthermore, the parents do not argue that the parenting and psychotherapy elements that comprised the treatment plan were inappropriate, only that the plan was deficient. We note, however, that the parents neglected to comply with the parts of the program that were admittedly appropriate. We fail to see how adding a third requirement, group therapy, would have spurred them on to comply with the most important element of the program, individual therapy.

Substantial credible evidence supports the District Court finding that the treatment plan was appropriate. The District Court did not err in making the finding.

The parents next contend that they were denied due process because the treatment plan was ambiguous. We do not agree.

The final treatment plan was the third version attempted with the parents. The stipulation adopting the plan states in pertinent part as follows:

“1. On May 5, 1987, the above parties [the State and the parents] stipulated to the following arrangement for [R.H.]:
“d) [The parents] would attend and successfully complete parenting classes.
“e) [The parents] would undergo psychological counseling.
“4. At the time set for hearing [the State] had not received any written reports concerning parenting classes or counseling.
“The above-referenced parties now stipulate to the following disposition of the case:
“2. [The parents] must take the necessary steps to see that [the State] receive[s] written reports about their progress in parenting classes. [The State] must receive the reports by June 15, 1988.
“3. [The parents] must take the necessary steps to see that [the State] receive[s] a progress report from their therapist in Washington. [The State] must receive the report by June 15, 1988. [The parents] must also disclose the name of their therapist to [the State] by May 15, 1988.
“4. If [the parents] have not been undergoing psychological counseling they must do so immediately and must disclose the name of their therapist to [the State] by May 15, 1988.
“5. [The State] will petition the Court for the appropriate relief after it receives the above information from [the parents]. In the event [the State] do[es] not receive the requested information by June 15, 1988, [the State] will request the Court to set a final dispositional hearing and will proceed without the requested information. (Emphasis added.)”

The treatment plan was not ambiguous. Aplain reading of the plan establishes that the parents were required to attend parenting classes and receive psychological counseling. In fact, paragraph 4 of the plan emphasizes the importance of the psychotherapy requirement by directing the parents to obtain counseling immediately.

The problems concerning ambiguity arose when the parents began to hedge the plan. Rather than follow the clear terms of the plan, the parents’ attorney contacted the social worker in charge of the case to see if the parenting classes fulfilled the counseling component. The social worker indicated that the parenting classes essentially fulfilled this condition.

Although the State may assist the parents in completing the treatment program, the parents retain the ultimate responsibility for complying with the plan. L.W.K., 236 Mont. at 19, 767 P.2d at 1342. In this case, even though the final program mandated individual psychotherapy, the parents attempted to find ways to bypass the requirement. Indeed, the conversation with the social worker may well have muddied the terms of the plan. However, the parents themselves invited the ambiguity by refusing to follow the plain requirements of the program. They cannot now claim that they were denied due process.

Affirmed.

JUSTICES GRAY, HARRISON, McDONOUGH and TRIEWEILER concur.


author: /s/ J. A. Turnage. Chief Justice /s/ John Conway Harrison. Justice /s/ Karla M. Gray. Justice /s/ William E. Hunt. Justice /s/ R. C. McDonough. Justice /s/ Terry Trieweiler. Justice /s/ Fred J. Weher . Justice.

text:
    In re the PETITION OF OWEN T. EVANS.
    No. 91-302.
    July 30, 1991.
    250 Mont. 172.
    819 P.2d 156.
   ORDER

The petitioner, Owen T. Evans, has filed with this court a petition, pro se, for post-conviction relief alleging he was denied effective assistance of counsel. The Attorney General of the State of Montana has filed a response asserting that the petitioner’s claims of ineffective assistance of counsel are procedurally barred.

On September 28,1989, the petitioner was convicted of aggravated burglary, two counts of felony assault and one count of felony theft by a jury sitting in the District Court of the Eighteenth Judicial District, Gallatin County. The petitioner was represented by appointed counsel during his trial in the District Court. After his convictions, the petitioner obtained new counsel and appealed to this court. His convictions were affirmed on appeal in State v. Evans (Mont. 1991), [247 Mont. 218,] 806 P.2d 512, 48 St.Rep. 170.

In his petition, the petitioner raises the following claims of ineffective assistance of trial counsel:

“(1) counsel should have contested the legality of the initial entry of police officers into the defendant’s apartment; (2) counsel failed to move to suppress evidence seized pursuant to a search warrant issued to search defendant’s apartment; (3) counsel presented no defense and engaged in a conflict of interest because counsel believed petitioner to be guilty; (4) counsel failed to file a change of venue motion; (5) counsel failed to submit an instruction on lesser included offenses; and (6) counsel failed to submit an instruction on the definition of weapon.”

Under § 46-21-105, MCA, a petitioner may not raise in a post-conviction petition “grounds for relief that could reasonably have been raised on direct appeal.” When ineffective assistance of counsel claims can be decided upon the record, such claims are appropriate for consideration on direct appeal; when ineffective assistance of counsel claims require consideration of factual matters outside the record, the claims are inappropriate in the context of a direct appeal. State v. Schoffner (Mont. 1991), [248 Mont. 260,] 811 P.2d 548, 553, 554, 48 St.Rep. 424, 427.

Here, the petitioner was afforded a direct appeal and was represented by newly appointed appellate counsel. No issues of ineffective assistance of counsel were raised. Each of the claims of ineffective assistance of counsel raised by the petitioner could reasonably have been raised on direct appeal and, thus, are procedurally barred under § 46-21-105, MCA. The only claim that arguably could involve consideration of factual matters outside the record is the claim that defense counsel’s attitude toward the petitioner inhibited his representation of the petitioner. However, this claim also could have been resolved on the record because a pre-trial hearing was held before the District Court on whether the petitioner should receive new counsel and at the hearing the petitioner put on the record his problems with his trial counsel.

IT IS ORDERED:

1. The petition for post-conviction relief is DENIED.

2. The Clerk is directed to mail a true copy of this order to the Attorney General and to the petitioner personally.

DATED this 30th day of July, 1991.

/s/ J. A. Turnage. Chief Justice

/s/ Karla M. Gray. Justice

/s/ William E. Hunt. Justice

/s/ R. C. McDonough. Justice

/s/ Terry Trieweiler. Justice

/s/ Fred J. Weher . Justice.


author: JUSTICE HARRISON

text:
    The Trustees of the WASHINGTON-IDAHO-MONTANA CARPENTERS-EMPLOYERS RETIREMENT TRUST FUND AND the Trustees of the Laborers—A.G.C. Pension Trust of Montana, Plaintiffs and Appellants, v. THE GALLERIA PARTNERSHIP, a Montana general partnership, et al., and Marbles’ Moving, Storage & Transfer, a Montana corporation; and A.T. Klemens & Sons, a Montana corporation, Defendants, Appellants and Respondents. The GALLERIA PARTNERSHIP, et al., a Montana general partnership, Counterclaimants, and Third-Party Plaintiffs, v. The Trustees of the WASHINGTON-IDAHO-MONTANA CARPENTERS-EMPLOYERS RETIREMENT TRUST FUND and the Trustees of the Laborers A.G.C. Pension Trust of Montana, Counter-Defendants, and Compass Group, Inc., a Washington corporation, and Old National Bancorporation, a Delaware corporation, Third-Party Defendants. MARBLE’S MOVING, STORAGE & TRANSFER, INC., a Montana corporation, Cross-claimants and Third-Party Plaintiff, v. THE GALLERIA PARTNERSHIP, a Montana general partnership, et al., Cross-Defendants, and Daniel W. Cook, Kent Bray, Marvin Hessler, Delvin Trost, James McKeague, Donald Fisher, Robert C. Patterson, Arthur C. West, James W. McDermand and James D. Miller, Third-Party Defendants.
    No. 90-404.
    Submitted on briefs June 13, 1991.
    Decided August 2, 1991.
    250 Mont. 175.
    Rehearing Denied Sept. 10, 1991.
    819 P.2d 158.

      K. Dale Schwanke, Jardine, Stephenson, Blewett & Weaver, Great Falls, for defendants, appellants and respondents.
    Willian VanCanagan, Datsopoulos, MacDonald & Lind, Missoula, for plaintiffs and appellants.
   JUSTICE HARRISON

delivered the Opinion of the Court.

The parties appeal from a June 15,1990, judgment of the District Court of the Eighth Judicial District, Cascade County, Montana, valuing certain foreclosed property at $1,100,000 and awarding no interest on appellants’ loan accrued from the date of the sheriff’s sale to the date the new judgment was entered. We affirm.

The parties present the following issues:

1. Did the District Court abuse its discretion in determining the value of the Galleria property?

2. Was it appropriate for the Montana Supreme Court to suspend the accrual of interest on appellants’ loan from the date of the sheriff’s sale until date of entry of the new judgment?

In the first appeal, Trustees of Washington-Idaho-Montana Carpenters-Employers Retirement Trust Fund v. Galleria Partnership (1989), 239 Mont. 250, 780 P.2d 608, this Court affirmed the grant of deficiency judgment to the Trustees of Washington-Idaho-Montana Carpenters-Employers Retirement Trust Fund (Trustees) and remanded this case to the District Court for determination of the proper amount of deficiency judgment based upon the fair market value of the Galleria property. This Court held that the Galleria Partnership members were jointly and severally liable on the promissory note that they had signed individually and were liable for the deficiency judgment. In addition, if the fair market value of the Galleria property were determined to be greater than $565,000, the price the Trustees bid on the Galleria property at the sheriff’s sale, this Court instructed the District Court not to allow interest from the date of the sheriff’s sale to the date the new judgment was entered. Galleria Partnership, 239 Mont. at 269, 680 P.2d at 619.

In 1982, sixteen individuals executed a promissory note for $1,200,000 payable to the Trustees. Under the terms of the promissory note, the individuals undertook jointly and severally to pay the principal sum of the note and accrued interest.

At about the same time, Galleria Partnership, composed of ten of the individuals who signed the promissory note and three additional persons, the Great Falls Investors, executed to Safeco Title Insurance Company as trustee, a trust indenture and security agreement to secure the principal sum of $1,200,000 and interest according to the terms of the promissory note.

The real property secured by the trust indenture was a warehouse, the Galleria building, which had been remodeled for leasing to various business tenants. The building had been purchased and remodeled in 1982 by Galleria Associates, managed by Dan Cook.

Cook had obtained a $1,950,000 appraisal of the Galleria property in its remodeled state to get a long-term loan to pay off Galleria Associate’s interim construction loan. Cook sought to borrow the money from Compass, a wholly owned subsidiary of Old National Bancorporation, specializing in handling loans of union pension trust funds. Because Cook was advised by Compass that Galleria Associates could not borrow from Trustees under the provisions of the Federal Employee Retirement Income Security Act (ERISA), he formed Galleria Partnership, to which Galleria Associates would eventually sell the property. Galleria Partnership qualified as a borrower under ERISA. Cook lined up the thirteen individuals and the Great Falls Investors that held varying fractions of interest in the partnership and eventually signed the trust agreement.

Cook owned an interest in several businesses owned by the tenants of the Galleria building. When Cook’s economic situation deteriorated, many of the tenants could not pay their rents on a timely basis, making it difficult for Galleria Partnership to meet the $14,916 loan payments each month. Compass was aware of the reason for the late payments from Galleria Partnership and continued to accept the payments and late charges.

By early December, 1984, the November 1984 loan payment had not been paid. On December 11,1984, Compass sent a default notice, accelerating the entire loan balance of $1,225,668.81 and demanding its payment within nine days. The default notice crossed in the mail with the November payment. Compass returned the payment with a letter reiterating its demand for the entire balance.

The parties were unable to reach a settlement on the deficiency, and on April 12,1985, the Trustees filed an action to foreclose on the trust indenture. The District Court, on October 29, 1987, granted summary judgment to the Trustees, determining that the trust indenture constituted a first lien upon the real property of Galleria Partnership, and issued a decree of foreclosure, ordering the Cascade County Sheriff to sell the real estate at public auction. The order of foreclosure reserved specifically the question of any deficiency judgment.

The sole bid received was $565,000 from the Trustees. Galleria Partnership appealed the validity of the deficiency judgment. As noted above, this Court affirmed the District Court’s judgment, and remanded this case to determine the fair market value of the property at the time of the sheriff’s sale, December 8,1987. “Fair market value” was defined as the “intrinsic” value of the property at the time of sale without consideration of the effect of foreclosure proceedings on the fair market value. Galleria Partnership, 239 Mont. at 265, 780 P.2d at 617.

On remand, at a hearing held March 2, 1990, the District Court heard testimony from witnesses and received into evidence reports prepared by various appraisers and an order of the State Tax Appeal Board.

William F erro, a certified Member of the American Institute (MAI) Real Estate Appraisers from Great Falls, Montana, was the sole witness for the Trustees. Ferro defined “fair market value” as the “most probable price ... for which the appraised property will sell in a competitive market under all conditions requisite to a fair sale with the buyer and seller each acting prudently, knowledgeably and for self-interest, and assuming that neither is under undue stress.”

According to F erro, three methods are used for valuation of property. The first, the “income” approach, is an analysis of the income-producing capabilities of a building, “of primary importance to income producing property since investors and pro-chasers ... are buying that property based on how much income the property can produce and what return they can get on their investment.” The other two methods of valuation are the “cost” approach, analyzed by replacement cost less “economic, functional, or physical depreciation,” and the “market” approach, analyzed by comparisons of the property with recent sales of other commercial properties. Ferro said that a full narrative appraisal of fair market value would include all three methods of valuing the property.

Ferro’s 1987 and 1988 Appraisals

Ferro, on behalf of the Trustees, had made two appraisals of the Galleria property. Ferro described the first appraisal as an “evaluation,” using a market approach, and the January 1988 appraisal as a fair market analysis using an income approach.

The first appraisal, dated November 9, 1987, set the value of the Galleria property between $256,000 and $325,000, based on sales of other commercial property in Great Falls. Ferro categorized Great Falls office space as “good quality,” “average quality,” or “lower quality,” identifying the Galleria building as having “lower quality’ office space. In calculating the appraisal figures, he deducted the costs of clean-up, maintenance, and renovation, ranging from $100,000 for general clean-up and maintenance to $400,000 for major remodeling.

On January 1, 1988, Ferro updated his first appraisal for the purpose of an appeal before the State Tax Appeal Board concerning the Galleria property, arriving at a fair market value of $266,500. Ferro used the income approach as the “most applicable approach for investment properties.”

According to a September 22, 1989, order of the State Tax Appeal Board, the parties stipulated to an appraised value of $562,736 for the Galleria property.

Steven Hall, MAI appraiser testifying for Galleria Partnership, rated Ferro’s $256,000 to $325,000 evaluation of the Galleria property as very low for “45,000 square feet of gross building area” in “the heart of the central business district of Great Falls.” He pointed out that Ferro’s valuations were lower than the $565,000 bid at the sheriff’s sale, a value normally less than fair market value; that the basement area was not nonrentable, but previously had been rented for a substantial amount; and that problems with water in the basement required only minor repairs. In Hall’s opinion, comparisons with the sales of other commercial properties were invalid because of the few number of sales and the uniqueness of the Galleria property.

Hall’s 1990 Appraisal

Steven Hall, MAI real estate appraiser from Missoula hired by Galleria Partnership, testified that the “intrinsic” value of the Galleria property as of December 1987 was $1,595,000. Hall said that his appraisal was not a “valuation,” requiring an analysis of the property’s market value, but an “evaluation,” defining the market under special guidelines. The special guidelines used by Hall to find the “intrinsic” value involved a “consideration of the replacement cost new of a property and then allowing for the property’s depreciation in the form of physical deterioration, its functional obsolescence, if any, its anticipated serviceable life and the general usefulness of the item involved.”

The Trustees again called Ferro as a witness to critique Hall’s appraisal. Ferro questioned Hall’s attributing all of the above-average short-term depreciation of the Galleria property to the foreclosure situation without taking into account poor maintenance and the deteriorating Great Falls economy. Ferro said that Hall’s definition of “intrinsic” value was “very narrow” and could not “be related to fair market value in any way.”

Ferro testified that “intrinsic” value, as defined by the American Institute of Real Estate Appraisers, is the amount of money equivalent to the worth inherent in the thing itself; for example, the intrinsic value of a bronze medal is the worth of the tangible assets separated from the intangible assets. According to the MAI manual, “intrinsic value” is “[sjtrictly a misuse of the word value, since value depends upon extrinsic things; that is, the attitude of persons toward the thing valuable.”

Stevens’ 1985 Appraisal

Allen Bloomgren, one of the partners of Great Falls Investors and a member of the executive committee of Galleria Partnership, testified for Galleria Partnership about events surrounding the acceleration of the loan and foreclosure action. Bloomgren also commented on an August, 1985, appraisal of the Galleria property by Thomas Stevens, submitted into evidence by Galleria Partnership.

Stevens, an MAI appraiser from Missoula, Montana, had estimated the value of the property to be $925,000 according to the income approach, $1,050,000 according to the cost approach, and $925,000 according to the market value approach. The “final indication of value” was $1,100,000. Bloomgren said that he had expected the appraisal to be about $1,500,000 and opined that the Stevens’ appraisal figures were too low, alleging various errors in Stevens’ analysis.

Stanton’s 1985 Estimation Based on Stevens’ Appraisal

Galleria Partnership also submitted into evidence a November 11, 1985, critique of Stevens’ appraisal by Ben E. Stanton, an MAI appraiser from Bozeman, Montana. Although Stanton felt that Stevens accurately described the physical shortcomings of the Galleria building and correctly analyzed the current economic situation in Great Falls, he disagreed with Stevens’ optimistic view of future economic growth in Great Falls. Consequently, he could give “no credence” to the values derived by Stevens in analyzing the cost approach. Stanton noted that the Galleria building was in a “very secondary location in the city with surroundings tending more towards old industrial structures than those desirable around an office building.”

These factors meant lower rental rates than estimated by Stevens, resulting in a lower value using the income approach than Stevens had estimated. Stanton’s own analysis of the income approach set the value of the Galleria property at $565,000. Stanton emphasized that this figure was not an appraisal of the Galleria property, but only a “probable approach by this reviewer based on the data in Mr. Stevens’ report.”

Other Testimony

Mick Miller, a Great Falls insurance agent for the company carrying casualty insurance on the Galleria property, testified that the amount of insurance carried on the Galleria building was $1,950,000, an amount that Miller derived by calculating the replacement cost, according to a manual provided by his company, minus depreciation. On cross-examination Miller admitted that he was not an MAI appraiser.

Darryl Meyer, manager of the Galleria building until July, 1986, testified about the reluctance of prospective tenants to rent space in the building after the foreclosure proceeding was initiated. Meyer also described the general condition of the building while he was manager.

At the conclusion of testimony, the District Court determined the value of the Galleria property to be $1,100,000. From this judgment, both parties appeal.

I.

Did the District Court abuse its discretion in determining the value of the Galleria property?

The Trustees maintain that the District Court’s $1,100,000 valuation of the Galleria property has no reasonable relation to its “fair value” at the time of sale and that the District Court should have sustained the $565,000 bid by the Trustees at the sheriff’s sale.

Galleria Partnership argues that the District Court erred by failing to determine on remand the “intrinsic” value of the Galleria property as of December 1987 and alleges that the District Court failed to exercise its equitable powers to arrive at a fair valuation. Specifically, Galleria Partnership maintains that the Trustees had the burden of proof and failed to meet their burden of producing evidence demonstrating the “intrinsic” value of the property. According to Galleria Partnership, the appraisal by Mr. Hall, who testified that the value was $1,595,000, was the only evidence of the intrinsic value of the Galleria property.

Generally, “[t]he party who has the burden of proof shall first produce his evidence; the adverse party will then produce his evidence.” Section 25-7-301(3), MCA. “[A] party has the burden of persuasion as to each fact the existence or nonexistence of which is essential to the claim for relief or defense he is asserting.” Section 26-1-402, MCA.

The District Court directed the Trustees to present their case first, but did not determine which party had the burden of proof. Galleria Partnership was the party upon which it was incumbent to show that the fair market value was more than the price bid by the Trustees. That the mortgagor has the burden of proof in showing the fair market value in relation to the amount bid on real property at a judicial sale is implied by our decision in Federal Savings and Loan Insurance Corp. v. Hamilton (1990), 241 Mont. 367, 786 P.2d 1190. We concluded that a mortgagor could not invoke this Court’s equity jurisdiction to remand the case for determination of fair market value of the property at the time of the sheriff’s sale when the mortgagors failed to produce evidence showing fair market value. Hamilton, 241 Mont. at 371, 786 P.2d at 1193.

Whichever party had the burden of proof, the District Court, in rejecting one witness’ estimation of intrinsic value, was not bound to adopt the other party’s appraisal. We remanded this case in the first place because the determination of property valuation is a factual issue which is within the province of the trial court to decide. When reviewing findings of fact, this Court is precluded from substituting its judgment for that of the trier of fact, and cannot set aside the findings of a court sitting without a jury unless the findings are “clearly erroneous.” Rule 52(a), M.R.Civ.P. Findings of fact are not clearly erroneous when based upon substantial credible evidence. Downing v. Grover (1989), 237 Mont. 172, 178, 772 P.2d 850, 853.

Generally, a district court is vested with broad discretion in valuation of real property and can adopt any reasonable valuation supported by the record. In re Marriage of Becker (1990), 244 Mont. 469, 798 P.2d 124, 128, 47 St.Rep. 1729, 1733; Lee v. Verex Assurance, Inc. (1987), 103 Nev. 515, 746 P.2d 140, 142. A district court may average the values given by experts to arrive at an equitable solution. In re Marriage of Goodmundson (1982), 201 Mont. 535, 539, 655 P.2d 509, 511.

Galleria Partnership argues that the District Court cannot average the values in this instance, when one party presented an “intrinsic” valuation of the Galleria property at the time of the sheriff’s sale and the other failed to introduce an “intrinsic” value, but instead gave an “inherent” value of the property.

The Trustees advocate using a definition of “intrinsic” value similar to the definition of “fair” or “real” value used by Wisconsin courts in determining whether the bid at a judicial sale, when the only bidder is the mortgagee, is substantially inadequate. The “fair” value is the “price which a person willing and able to buy the property would reasonably pay for it, not for purposes of speculation, but for that use to which it has been or reasonably may be put.” First Wisconsin National Bank of Oshkosh v. KSW Investments, Inc. (1976), 71 Wis.2d 359, 238 N.W.2d 123, 128. As our discussion will demonstrate, the definition of fair market value in Galleria Partnership is adequate.

In Galleria Partnership, we defined “fair market value” as “the intrinsic value of the real property with its improvements at the time of sale under judicial foreclosure, without consideration of the impact of the foreclosure proceedings on the fair market value.” Galleria Partnership, 239 Mont. at 265, 780 P.2d at 617. Most importantly, we left the method of determining fair market value to the District Court. Id.

The source of the definition of “fair market value” used in Galleria Partnership was our decision in First State Bank of Forsyth v. Chunkapura (1987), 226 Mont. 54, 734 P.2d 1203. In Chunkapura, we discussed the provisions of California law relating to sales under judicial foreclosure and the opinion of a California court defining “fair value” as the term was used in the Code of Civil Procedure. Chunkapura, 226 Mont. at 61, 734 P.2d at 1207 (citing Rainer Mortgage v. Silverwood Ltd. (3 Dist. 1985), 163 Cal.App.3d 359, 209 Cal. Rptr. 294).

As noted in the California decision, because foreclosure sometimes depresses the value of property, even to the extent that it becomes “valueless,” the mortgagor should receive the “underlying” or “intrinsic” value of the property. Rainer, 209 Cal. Rptr. at 298. Under normal conditions the “fair value,” or “intrinsic value,” of property will often coincide with its fair market value, the value a willing purchaser will pay to a willing seller in an open market. Id. The court explained:

“This correlation is not fixed, however, and market value is only one factor the court should consider when determining ‘fair value.’... ‘[F]air value’ is to be determined by all of the circumstances affecting the intrinsic value of the property at the time of the sale. This necessarily excludes the circumstances of the foreclosure sale.”

Rainer, 209 Cal. Rptr. at 298 (emphasis added).

The appraisers whose testimony or reports were received into evidence described several different methods of valuing the Galleria property and recounted in detail the many factors affecting their valuations. New of them relied purely on a fair market value analysis.

Mr. Ferro’s first evaluation was based primarily on a market approach, comparing the Galleria property with other commercial properties which had been sold recently in Great Falls. To arrive at the final valuations of $256,000 to $325,000, Ferro deducted amounts ranging from $100,000 to $400,000 for renovations. He testified that his second appraisal used an income approach analyzing the income-producing capabilities of the property.

Mr. Hall’s $1,595,000 evaluation was based on a cost approach, estimating the replacement cost of the Galleria property less the varying types of depreciation.

Mr. Stevens, who did not testify but whose 1985 appraisal was submitted into evidence, had analyzed the worth of the Galleria property using all three approaches and had arrived at a final fair market value of$l,100,000. Based on his analysis of economic factors affecting the income approach, Mr. Stanton set a value of $565,000.

The experts assessed the weaknesses of the other appraisers’ methods and bases of valuations. In addition, Galleria Partnership presented witnesses who testified that the repairs or renovations necessary to the Galleria building at the time of the foreclosure sale were not nearly as extensive as envisioned by Ferro.

Our review of the record convinces us that the District Court had heard all of the circumstances affecting the valuation of the Galleria property. With such disparate figures, the District Court was entitled to discount the appraisals of the Trustees’ expert, Mr. Ferro, and Galleria Partnership’s expert, Mr. Hall. Since the method of valuation was left to the District Court, we find no abuse of discretion in its rejection of both values as unfair estimations of the intrinsic value of the Galleria property.

The District Court states in its judgment that it did not rely on Stevens’ appraisal in setting the value of the property at $1,100,000, the same final figure for which Stevens had appraised the property in 1985. Nonetheless, the Stevens’ appraisal, as a thorough analysis of all three approaches to valuation, comprises substantial evidence supporting the District Court’s decision. Having been completed after the Trustees foreclosure action was filed, but two years before the foreclosure sale while the Galleria building was still occupied and maintained, the Stevens’ appraisal may approximate most closely the value of the Galleria property at the time of the sheriff’s sale, without taking into account the impact of the foreclosure proceedings.

In addition, the $565,000 figure which the Trustees claim represents “a fair determination of intrinsic value,” is based upon a critique of Stevens’ appraisal by Mr. Stanton, rather than an appraisal. Stanton emphasized in his report that the $565,000 estimate of value according to the income approach was not an appraisal, but merely a “probable approach” based on data from Stevens’ report. The District Court did not abuse its discretion in disregarding the $565,000 value since it was the only approximation of the value of the Galleria property which was not based on an appraisal.

We hold that the District Court relied on substantial, credible evidence in determining the fair market value of the Galleria property, without taking into consideration the effect of judicial foreclosure proceedings on the property’s value.

II.

Was it appropriate for the Montana Supreme Court to suspend the accrual of interest on appellants’ loan from the date of the sheriff’s sale until date of entry of the new judgment?

The Trustees attack this Court’s directive in Galleria Partnership to suspend the interest accruing on the loan from the date of the sheriff’s sale to the date of entry of the new judgment as contrary to prevailing law. See Galleria Partnership, 239 Mont. at 269, 780 P.2d at 619.

In relation to interest on judgments the Rules of Appellate Procedure provide:

“If a judgment for money in a civil case is affirmed, whatever interest is allowed by law shall be payable from the date the judgment was rendered or made in the district court. If a judgment is modified or reversed with a direction that a judgment for money be entered in the district court, the mandate shall contain instructions with respect to allowance of interest.”

Rule 31, M.R.App.P. Although the Trustees are correct in asserting that the District Court’s judgment was not reversed, the judgment was modified in respect to the amount allowed for the deficiency. Since “instructions with respect to allowance of interest,” as mandated by Rule 31, were provided, the directive to suspend interest until entry of the new judgment if the fair market value were determined to exceed $565,000 was appropriate and in accordance with the Rules of Appellate Procedure.

Affirmed.

CHIEF JUSTICE TURNAGE and JUSTICES TRIEWEILER, McDONOUGH and HUNT concur.


author: JUSTICE TRIEWEILER

text:
    WILLIAM D. FORD, Plaintiff and Respondent v. BURLINGTON NORTHERN RAILROAD COMPANY, a Delaware corporation, Defendant and Appellant, THOMAS L. JOHNSON, Plaintiff and Respondent, v. BURLINGTON NORTHERN RAILROAD COMPANY, a Delaware corporation, Defendant and Appellant.
    No. 90-557 and 90-558.
    Submitted on Briefs April 18, 1991.
    Decided Aug. 12, 1991.
    250 Mont. 188.
    819 P.2d 169.

      Kurt W. Kroschel, Russell D. Yerger, Kurt W. Kroschel & Associates, Billings, for defendant and appellant.
    Robert S. Fain, Jr., James C. Reuss, Wright, Tolliver & Guthals, RC., Billings, Gary K. Wood, Morrisard & Rossi, P.C., Aurora, Colo., for plaintiffs and respondents.
   JUSTICE TRIEWEILER

delivered the opinion of the Court.

The plaintiffs, William D. Ford and Thomas L. Johnson, filed separate actions in the District Court for the Thirteenth Judicial District, Yellowstone County, pursuant to the Federal Employers Liability Act found at 45 U.S.C. §§ 51-60. The defendant in both cases, Burlington Northern Railroad Company, moved to transfer venue to Hill County for the reason that that county was its principal place of business in Montana, and therefore, should serve as its residence for purposes of determining proper venue.

In reliance on our decision in Haug v. Burlington Northern R. Co. (1989), 236 Mont. 368, 770 P.2d 517, the District Court denied defendant’s motion in both cases. From those orders denying defendant’s motion for change of venue, defendant appeals. Those cases have been consolidated for purposes of appeal. We affirm the District Court.

Defendant raises the following issue on appeal:

Does § 25-2-118, MCA, as applied by this Court, violate the Equal Protection Clause of the Fourteenth Amendment of the United States Constitution by treating nonresidents, such as defendant, differently than residents for purposes of venue without any rational basis for dissimilar treatment?

FACTUAL BACKGROUND

Plaintiffs are both residents of Sheridan, Wyoming. Johnson alleges in his complaint that he was injured during the course of his employment with defendant on August 22, 1987, while working as a locomotive engineer. Ford alleges in his complaint that he was injured on February 7, 1989, while employed by defendant as a brakeman. Both plaintiffs were injured while working on their employer’s premises in Sheridan, Wyoming. Both have alleged that defendant failed to provide them with a safe place to work at that location.

Defendant is a railroad operating in interstate commerce. It is incorporated in the state of Delaware, and its principal place of business is Fort Worth, Texas. It operates its business in several Montana counties, including Yellowstone County. However, it alleges, and for purposes of this appeal, we will assume that its Montana headquarters are located in Hill County.

Plaintiffs’ exclusive remedy for injuries sustained during the course of their employment with the railroad is their claim pursuant to the Federal Employers Liability Act, 45 U.S.C. §§ 51-60. Section 56 of the Act provides that an action to enforce rights granted by the Act can be brought in either federal or state courts, and establishes venue in those cases where the action is brought in federal court. Section 56 provides in relevant part as follows:

“Under this chapter an action may be brought in a district court of the United States, in the district of the residence of the defendant, or in which the cause of action arose, or in which the defendant shall be doing business at the time of commencing such action. The jurisdiction of the courts of the United States under this chapter shall be concurrent with that of the courts of the several states.”

Defendant does not deny that it does business in Yellowstone County, Montana, and that if plaintiffs had chosen the federal district court as their forum, defendant could have been properly sued in the federal district court located in Billings, Montana. Furthermore, section 56 has been the law for over 80 years. Its effect has always been to treat railroads differently than other parties. However, defendant cites no authority holding that it is unconstitutional for that reason.

Defendant objects to the rule by which venue was established in this case under state law.

We apply state law to determine proper venue in this case pursuant to Miles v. Illinois Central R. Co. (1942), 315 U.S. 698, 62 S.Ct. 827, 86 L.Ed. 1129, in which the U.S. Supreme Court established that rules of venue in FELA actions filed in state courts are properly left to the various states.

In Montana, the general venue statute is § 25-2-118, MCA, which provides as follows:

Unless otherwise specified in this part:

“(1) except as provided in subsection (3), the proper place of trial for all civil actions is the county in which the defendants or any of them may reside at the commencement of the action;
“(2) if none of the defendants reside in the state, the proper place of trial is any county the plaintiff designates in the complaint....”

In Haug, 770 P.2d 517, we held that § 25-2-118, MCA (1989), allowed plaintiffs in FELA actions to sue out-of-state residents, such as defendant, in any county in the state.

We stated:

“From the case history in Montana, we conclude that a plaintiff is entitled to bring a tort action against a non-resident defendant in either the county where the tort occurred or in any county of this state. This Court has consistently held that a foreign corporation has no county of residence for venue purposes and can be sued in any county selected by the plaintiff. Hanlon v. Great Northern Railway Co. (1928), 83 Mont. 15, 268 P. 547; Truck Insurance Exchange v. N.F.U. Property & Casualty Co. (1967), 149 Mont. 387, 427 P.2d 50; Foley v. General Motors Corp. (1972), 159 Mont. 469, 499 P.2d 774. The holdings of these cases are consistent with the provisions of § 25-2-118(2), MCA, which in substance states that any county designated by the plaintiff is the proper place of trial if no defendants reside in Montana.”

Haug, 770 P.2d at 519.

It is defendant’s position that Montana’s venue statute, as applied by this Court in Haug, discriminates against out-of-state corporations without any apparent justification, and therefore, denies defendant equal protection under our state’s laws.

DISCUSSION

Although there is some inconsistency in the federal case law, our decision appears to be controlled by a series of U.S. Supreme Court decisions, beginning with Cincinnati Street Ry. Co. v. Snell (1904), 193 U.S. 30, 24 S.Ct. 319, 48 L.Ed. 604. In that case, the defendant railroad was sued in the county of its principal place of business. The plaintiff was allowed to transfer venue to an adjoining county based upon a venue statute which permitted transfer where one of the parties was a corporation with more than 50 stockholders, and the action was pending in the county in which the corporation had its principal office or transacted its principal business. It was the defendant’s position that equal protection of the laws was denied because an equal opportunity to transfer venue was not conferred on the corporation. The U.S. Supreme Court held that the Fourteenth Amendment does not guarantee citizens the right to have disputes determined in one forum, as opposed to another. It stated:

“As previously shown, the Supreme Court of the State of Ohio pointed out in its opinion that the rights of the parties were governed in the court to which the case was transferred by the same law and the same rules which would have prevailed had the case been tried in the court in which it was originally brought. And this has not been challenged either by the assignments of error or any of the arguments made to sustain them. The proposition to which the case reduces itself is therefore this: That although the protection of equal laws equally administered has been enjoyed, nevertheless there has been a denial of the equal protection of the law within the purview of the Fourteenth Amendment, only because the State has allowed one person to seek one forum and has not allowed another person, asserted to be in the same class, to seek the same forum, although as to both persons the law has afforded a forum in which the same and equal laws are applicable and administered. But it is fundamental rights which the Fourteenth Amendment safeguards and not the mere forum which a state may see proper to designate for the enforcement and protection of such rights. Given therefore a condition where fundamental rights are equally protected and preserved, it is impossible to say that the rights which are thus protected and preserved have been denied because the State has deemed best to provide for a trial in one forum or another. It is not under any view the mere tribunal into which a person is authorized to proceed by a state which determines whether the equal protection of the law has been afforded, but whether in the tribunals which the state has provided equal laws prevail.
“It follows that the mere direction of the state law that a cause under given circumstances shall be tried in one forum instead of another, or may be transferred when brought from one forum to another, can have no tendency to violate the guarantee of the equal protection of the laws where in both the forums equality of law governs and equality of administration prevails. In Iowa Central Railway Company v. Iowa, 160 U.S. 389, 393, 16 S.Ct. 344, 40 L.Ed. 467, this Court said:
“ ‘But it is clear that the Fourteenth Amendment in no way undertakes to control the power of a State to determine by what process legal rights may be asserted or legal obligations be enforced, provided the method of procedure adopted for these purposes gives reasonable notice and affords fair opportunity to be heard before the issues are decided. This being the case, it was obviously not a right, privilege or immunity of a citizen of the United States to have a controversy in the state court prosecuted or determined by one form of action instead of by another.’ ”

Cincinnati Street Ry. Co., 193 U.S. at 36-37, 24 S.Ct. at 321-22.

It is defendant’s position that this issue is controlled by the Supreme Court’s decision in Power Mfg. Co. v. Saunders (1927), 274 U.S. 490, 47 S.Ct. 678, 71 L.Ed. 1165. In that case, the defendant corporation, which was a resident of Ohio, was sued by one of its employees in the state of Arkansas. It was sued in a county other than the county where its principal place of business was located. For that reason, it challenged the Arkansas venue statute which required that actions of that type against a resident corporation be brought in the county where it had a place of business or in which its chief officer resided, but permitted actions against foreign corporations to be brought in any county in the state. In that case, where the defendant did no business and had no office, officer, or agent in the county where suit was brought, the Supreme Court found no rational basis for distinguishing between foreign and domestic corporations, and held that since discriminatory treatment was without a reasonable basis and essentially arbitrary, it violated the Equal Protection Clause of the Fourteenth Amendment.

We find that the Saunders case is not controlling for several reasons.

First, Saunders is distinguishable on its facts. In that case, the defendant did no business in the county where venue was established. In this case, defendant admittedly does business in Yellowstone County. In Saunders, plaintiff’s action was brought pursuant to the common law of the state of Arkansas. In this case, plaintiffs’ claims are based upon federal statutory law which was designed to provide injured railroad workers with as many options as possible when choosing the venue within which to file their complaint.

Second, the Saunders decision did not preclude disparate treatment under a state’s venue laws where a rational basis could be shown for such treatment. In fact, when referring to the requirements of the Fourteenth Amendment, that Court stated:

“It does not prevent a State from adjusting its legislation to differences in situation or forbid classification in that connection; but it does require that the classification be not arbitrary but based on a real and substantial difference having a reasonable relation to the subject of that particular legislation.
"... the distinguishing principle being that classification must rest on differences pertinent to the subject in respect of which the classification is made.”

Saunders, 274 U.S. at 493-94, 47 S.Ct. at 679. (citations omitted).

Without addressing the greater issue of whether there is a rational basis for treating all out-of-state corporations differently from all domestic corporations, it does appear that there is a commonly accepted historic justification for allowing railroad workers greater flexibility when choosing a forum than other litigants. In LaBella v. Burlington Northern, Inc. (1979), 182 Mont. 202, 595 P.2d 1184, we cited the following legislative history for 45 U.S.C. § 56, which would determine venue if plaintiffs had brought their action in federal court.

“In a Senate Committee Report, the purpose of the amendment to section 6 H.R. 17263, 61st Cong., 2d Sess. (1910), was said to be:
“ ‘... to make entirely manifest the good faith of the legislature in the enactment of the employers liability law, which places such stringent liability upon the railroads for injuries to their employees as to compel the highest safeguarding of the lives and limbs of the men in this dangerous employment. The tremendous loss of life and limb on the railroads is appalling ...
“ ‘It was the intention of Congress in the enactment of this law originally and it may be presumed to be the intention of the present Congress to shift the burden of the loss resulting from these casualties from “those least able to bear it” and place it on those who can ... “measurably control their causes’.” Sen.Rep.No. 432, 61st Cong., 2d Sess., (1910), 45 Cong.Rec. 4041 (1910).

In reporting the bill out of committee, Senator Borah stated his objection to the law as it existed:

“ ‘Plaintiff may sometimes be compelled to go a great distance in order to have his cause of action against the defendant by reason of the fact that now the action must be brought in the district in which the defendant is an inhabitant...
“ ‘... If this bill should be passed, the law will be remedied in that respect, enabling the plaintiff to bring his action where the cause of action arose or where the defendant may be doing business. The bill enables the plaintiff to find the corporation at any point or place where it is actually carrying on business and there lodge his action, if he chooses to do so.’ 45 Cong.Rec. at 4034-4035 (1910).
“The strength of the policy behind section 6 can be further gleaned from Congress’ refusal to pass the Jennings Bill in 1947. It would have repealed most of section 6 and limited the forum choices of injured railroad workers to the district where the cause of action arose or where the plaintiff resided. If process could not be served in either of those places, an action could be brought where defendant was doing business. H.R. 1639, 80th Cong. 1st Sess., (1947).”

LaBella, 595 P.2d at 1186.

It is clear then that national policy, dating back to 1910, which was intended to address the dangerous working conditions of railroad workers and to facilitate recovery for families of injured workers, favors a policy of allowing railroad workers to sue their employer at any location where the employer does business. That national policy presents a justification for disparate treatment in this case, which was not present in the Saunders case.

Finally, subsequent decisions by the U.S. Supreme Court raise a question about whether Saunders continues to be good law.

Initially, Saunders was not a unanimous opinion. Mr. Justice Holmes, with whom Mr. Justice Brandéis concurred, dissented from the majority opinion. He argued that:

“A foreign corporation merely doing business in the State and having its work elsewhere will be more or less inconvenienced anywhere away from its headquarters, but the difference to it between one county and another is likely to be less than it will be to a corporation having its headquarters in the State. So I repeat that in my opinion the plaintiff in error cannot complain if the State holds it liable to a transitory action wherever it may be served and sued, as it would have been liable at common law.”

Saunders, 274 U.S. at 498, 47 S.Ct. at 681.

Not long after the Saunders decision, Mr. Justice Holmes wrote for the majority in Bain Peanut Co. v. Pinson (1931) 282 U.S. 499, 51 S.Ct. 228, 75 L.Ed. 482, when the Supreme Court denied a challenge to a Texas venue statute based on the Equal Protection Clause.

In Bain Peanut Co., the Texas venue statute being challenged allowed plaintiffs to sue a private corporation in the county where an action arose, but limited suits against unincorporated individuals to the county in which they were domiciled. The defendant corporation challenged that disparate treatment as a violation of the Equal Protection Clause of the Fourteenth Amendment. In denying the defendant’s challenge, Justice Holmes, now writing for the majority, indicated that that Court’s prior decision in Cincinnati Street Ry. Co., was still controlling. The court held as follows:

“Coming then to the merits, we are of the opinion that the judgment was right. The interpretation of constitutional principles must not be too literal. We must remember that the machinery of government would not work if it were not allowed a little play in its joints. In deciding whether a corporation is denied the equal protection of the laws when its creator establishes a more extensive venue for actions against it than is fixed for private citizens, we have to consider, not a geometrical equation between a corporation and a man, but whether the difference does injustice to the class generally, even though it bear hard in some particular case, which is not alleged or proved here. Louisville & Nashville R. Co. v. Barber Asphalt Paving Co., 197 U.S. 430, 434 [25 S.Ct. 466, 49 L.Ed. 819,]. Patsone v. Pennsylvania, 232 U.S. 138, 144 [34 S.Ct. 281, 282, 58 L.Ed. 539.] This it is for the corporation to make out. The range of the State’s discretion is large. Armour & Co. v. North Dakota, 240 U.S. 510, 516, 517 [36 S.Ct. 440, 442, 443, 60 L.Ed. 771], The question seems to be answered by Cincinnati Street Ry. Co. v. Snell, 193 U.S. 30, 36, 37, [24 S.Ct. 319, 321, 322, 48 L.Ed. 604]. which lays down that, if the protection of fundamental rights by equal laws equally administered is enjoyed, the Constitution does not forbid allowing one person to seek a forum from which another in the same class is excluded.”

Bain Peanut Co., 282 U.S. at 501, 51 S.Ct. at 229.

More recently, in American Motorist Ins. Co. v. Starnes (1976), 425 U.S. 637, 96 S.Ct. 1800, 48 L.Ed.2d 263, Cincinnati Street Ry. Co. was again cited by the U.S. Supreme Court with approval. In Starnes, the defendant, an out-of-state corporation, challenged Texas’venue statutes which treated domestic and foreign corporations differently. Domestic corporations had to be sued in the county in which they were domiciled unless plaintiff, at a preliminary hearing, could prove by a preponderance of the evidence that he had a cause of action. Foreign corporations could be sued in counties other than their Texas domicile without a similar procedural requirement. The defendant challenged the disparate treatment on the grounds that it constituted invidious discrimination against foreign corporations in violation of the Equal Protection Clause of the Fourteenth Amendment. The Supreme Court denied defendant’s challenge to the Texas venue statutes for the reason that as a practical matter there was no appreciable advantage for domestic corporations. The Supreme Court arrived at this conclusion after reviewing Texas case law which suggested that proving a prima facie case was sufficient and the venue proceedings against domestic corporations were usually truncated. In arriving at its decision, the Supreme Court cited with approval language from Cincinnati Street Ry. Co., which is set forth above. However, in language relevant to this decision, that Court also stated:

“We are not confined to the language of the statute under challenge in determining whether that statute has any discriminatory effect. Just as a statute nondiscriminatory on its face may be grossly discriminatory in its operation, Williams v. Illinois, 399 U.S. 235, 242, [90 S.Ct. 2018, 2023, 26 L.Ed.2d 586] (1970); Griffin v. Illinois, 351 U.S. 12, 17 n. 11 [76 S.Ct. 585, 590 n. 11, 100 L.Ed. 891] (1956), so may a statute discriminatory on its face be nondiscriminatory in its operation. There being no discriminatory effect achieved by the aspects of the Texas venue provisions calling for establishment of a cause of action, we have no difficulty in concluding that appellant’s equal protection challenge to the Exception 27 must be rejected.”

Starnes, 425 U.S. at 645, 96 S.Ct. at 1804.

In a footnote to the above statement, the majority noted:

"6 Our conclusion makes unnecessary consideration of appellant’s argument that Power Mfg. Co. v. Saunders, 274 U.S. 490, [47 S.Ct. 678, 71 L.Ed. 1165] (1927), requires invalidation of Exception 27. Though more recent decisions raise the question whether Saunders continues to be good law, Allied Stores of Ohio v. Bowers, 358 U.S. 522 [79 S.Ct. 437, 3 L.Ed.2d 480,] (1959); Metropolitan Cas. Ins. Co. v. Brownell, 294 U.S. 580 [55 S.Ct. 538, 79 L.Ed. 1070] (1935); Bain Peanut Co. v. Pinson, 282 U.S. 499 [51 S.Ct. 228, 75 L.Ed. 482] (1931), as appellant argues, the Court in Saunders did conclude that the venue statute involved there treated foreign corporations without reasonable basis and arbitrarily.”

Mr. Chief Justice Burger, with whom Mr. Justice Rehnquist concurred, would have denied the defendant’s challenge to the Texas venue statute simply on the basis of Cincinnati Street Ry. Co. and Bain Peanut Co.

Likewise, in this case the statute which is challenged by defendant is nondiscriminatory in its operation. The practical effect of our venue statute in this case is that defendant is required to defend itself in Yellowstone County, Montana — a location where it could admittedly be required to appear and defend itself against the same claim, had plaintiffs chosen to sue it in federal district court. For all of the above reasons, we affirm the orders of the District Court, and hold that § 25-2-118, MCA (1989), as applied by this Court in Haug does not violate the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution.

As in Haug, our decision is based on the facts in this case, and in particular, the strong national policy favoring a plaintiff’s selection of forum in actions brought under the Federal Employers Liability Act.

We affirm the denial of defendant’s motion for a change of venue. CHIEF JUSTICE TURNAGE and JUSTICES HARRISON, GRAY, HUNT, McDONOUGH, and WEBER concur.