source: Caselaw Access Project

license: Public Domain

text:
    ELMER UNRUH, Plaintiff, Respondent, Cross-Appellant, v. WILLIAM TASH and TASH T DIAMOND LIVESTOCK, INC., Defendants and Appellants.
    No. 94-439.
    Submitted on Briefs February 9, 1995.
    Rehearing Denied June 29, 1995.
    Decided May 23, 1995.
    52 St.Rep. 425.
    896 P.2d 433.
    271 Mont. 246.

      For Appellant: Jon Metropoulos, Helena.
    For Respondent: W. Cecil Jones, Thomas R. Scott, Dillon.
   JUSTICE NELSON

delivered the Opinion of the Court.

This is an appeal and cross-appeal from a Fifth Judicial District Court, Beaverhead County, order granting the defendant’s motion for summary judgment in a prescriptive easement action. We reverse and remand.

The following are issues on appeal and cross-appeal:

APPEAL

1.Did the District Court err in denying attorney fees to the defendant William Tash (Tash) pursuant to § 70-17-112, MCA?

CROSS-APPEAL

1. Did the District Court err in granting summary judgment in favor of Tash, finding a prescriptive easement for the use of the ditch and a prescriptive right to overflow water onto a portion of plaintiff Elmer Unruh’s (Unruh’s) land?

2. Did the District Court err when it failed to have a record of the summary judgment hearing?

3. Did the District Court err in adopting Tash’s Findings of Fact, Conclusions of Law, and Order verbatim?

FACTUAL BACKGROUND

The plaintiff, Unruh is the owner of 12.6 acres of real property located in the SE1/4 NE1/4 Section 33 Township 7 South Range 9 West M.P.M., purchased in 1989. The defendant Tash owns property immediately east of plaintiff’s property, with both properties adjoining each other with a border running north-south for approximately 932 feet. The object of this litigation is a lateral ditch which adjoins the Van Camp ditch, a major ditch which forms the western border of the plaintiff, Unruh’s property. The Van Camp ditch carries water from the Beaverhead River to several ranches, including Tash’s ranch. The only written information affecting the lateral ditch and its current placement is a 1944 agreement between predecessors of the plaintiff and defendant and a sale deed between the plaintiff’s remote predecessor and the State. The Van Camp ditch was realigned in 1944 pursuant to a written agreement between Emily Tash, Edna Wheat, and Norman and Blanche Downing (Unruh’s remote predecessors). The agreement provided for an easement to the grantees (Wheat and Tash) for the purpose of constructing, maintaining and repairing said ditch. Moreover, the easement provides that the parties may carry, conduct and convey the waters flowing or to flow therein to the lands of the grantees. As a result of realigning the Van Camp ditch, the lateral ditch had to be “continued” to connect to the realigned Van Camp ditch. The newly located lateral ditch consisted of portions of the old lateral ditch and a portion of the old Van Camp ditch.

In 1954, the State of Montana bought land from the Downings for the purpose of relocating Highway 278. The result of the highway construction was that the headgate of the lateral ditch had to be relocated and a new lateral ditch built. A special consideration in the Bargain and Sale Deed stated that “[h]eadgate at Sta [Station] 2284+60, approximately, to be removed by contractor, and to be replaced by owner (Tash Ranch Co.).” Anew headgate was installed and the new lateral ditch was built using a portion of the original lateral ditch and a small portion of the old Van Camp ditch.

Testimony regarding use of the lateral ditch is in the form of several affidavits. According to the affidavit of Herb Wheat, who has lived in the area since 1913, the lateral ditch has been in use as long as he can recall, with an overflow of water at the northeastern end of the ditch. Gerald Jones’ affidavit states that since 1970, he has leased land and the Van Camp ditch from Herb Wheat and he recalls the use of the lateral ditch in the 1970s. He could not testify to its use in the last 10 years but had no real reason to check the ditch dining that time period. However, he had no reason to feel the ditch had been abandoned.

Bill Ballard stated in his affidavit that the water in the lateral ditch had been used by Tash in the past in a manner which caused some overflow onto both Tash’s and Unruh’s lands. Finally, Jim Allen also stated that the lateral ditch was in use when he managed a horse ranch which included Unruh’s land from 1979 to 1989 and the water in the lateral ditch was used by Tash in a manner which included overflow on both Tash’s and Unruh’s properties.

In his amended complaint filed on May 21, 1991, the plaintiff asserted that: 1) the ditch in contention was abandoned by Tash’s predecessors in the April 20,1944 document; 2) that the ditch had not been used for over ten years and consequently, the right to use the ditch had been extinguished; and 3) any right of the defendant to use the ditch was by consent and the plaintiff has since revoked his consent to use of the ditch by defendant.

Tash contended that he possessed a prescriptive easement to use the ditch in question and use it in the manner in which he had used it for over twenty years (i.e. overflowing the ditch) when water was available and needed. He further has contended that his right to use the ditch was not by license or consent. He asserted that if the Downings, Unruh’s predecessor in interest, had given a license for such use, the license had been extinguished in 1972 when the property was conveyed and use of the ditch from 1972 to 1977 was adverse to the new owners and therefore, if a prescriptive easement had not been acquired previously, it had been acquired between 1972 and 1977. Also, Tash states that Unruh recognized Tash’s ownership rights in the ditch when he “ceased [his] attempted realignment of the ditch and sought [Tash’s] permission to place a culvert in the original ditch.”

In an order dated July 10,1991, the District Court concluded that Tash had an easement to use the ditch in the manner in which it had been used in the past, allowing the water to overflow the ditch onto Unruh’s property. Moreover, the District Court concluded that Tash had not abandoned any right to use the ditch. Further, the District Court, although stating that the above holding disposed of the matter, also concluded that the plaintiff had failed to meet his burden of proving that the overflow of water was the proximate cause of his damages. Finally, the District Court concluded that the damages sought by the plaintiff were too speculative since his proposed business was a new business.

Following the entry of summary judgment in favor of Tash, Tash requested an award of attorney fees. In a memorandum filed April 1, 1992, the District Court denied Tash’s motion for an award of attorney fees, stating that there was no encroachment or impairment of the easement by Unruh’s actions nor did Unruh limit Tash’s access to his ditch easement. Finally, the District Court concluded that “adjudication of contested rights in a ditch easement does not constitute encroachment or interference and does not impair the ditch owner’s rights.” This appeal by Tash and a subsequent cross-appeal by Unruh followed.

STANDARD OF REVIEW

Our review of a summary judgment motion is the same as that of the District Court; it is a de novo review. Roe v. Corbin Water Users’ Ass’n. (1994), 267 Mont. 503, 885 P.2d 419. Summary judgment is proper only when there are no genuine issues of material fact existing and the moving party is entitled to judgment as a matter of law. Roe, 885 P.2d at 420.

DISCUSSION CROSS-APPEAL ISSUE ONE-SUMMARY JUDGMENT

Unruh asserts that the District Court erred in granting summary judgment to Tash, concluding that Tash had a prescriptive easement to the ditch in question and a prescriptive right to overflow the ditch. Tash contends that “Unruh does not and cannot seriously contest that the elements of open, notorious, continuous use for five years have been established.” Tash argues that adversity is the only issue in the instant case.

To establish an easement by prescription, the party claiming an easement “must show open, notorious, exclusive, adverse, continuous and uninterrupted use of the easement claimed for the full statutory period. The statutory period is five years.” The burden is on the party seeking to establish the prescriptive easement. “All elements must be proved in a case such as this because ‘one who has legal title should not be forced to give up what is rightfully his without the opportunity to know that his title is in jeopardy and that he can fight for it’.”
“To be adverse, the use of the alleged easement must be exercised under a claim of right and not as a mere privilege or license revocable at the pleasure of the owner of the land; such claim must be known to, and acquiesced in by, the owner of the land.” “If the owner shows permissive use, no easement can be acquired since the theory of prescriptive easement is based on adverse use.”

Public Lands Access Assn, Inc. v. Boone & Crockett Club Foundation, Inc. (1993), 259 Mont. 279, 283-84, 856 P.2d 525, 527. (Citations omitted.) The elements of a prescriptive easement were defined in Rappold v. Durocher (1993), 257 Mont. 329, 849 P.2d 1017, as follows:

“Open and notorious” is defined as “a distinct and positive assertion of a right hostile to the rights of the owner and must be brought to the attention of the owner.” “Continuous” means “it is necessary to have use made often enough to constitute notice of the claim to the potential servient owner.” “Uninterrupted” means “use not interrupted by the act of the owner of the land or by voluntary abandonment by the party claiming the right.”
“An Exclusive use means that the claimants’ right to use the right of way is independent of a like right of way in another.”

Rappold, 849 P.2d at 1019. (Citations omitted.)

We now apply the factual information provided to determine whether there are any genuine issues of material fact as to Tash’s claim to a prescriptive right to the ditch in question. Tash’s testimony to the effect that he had an easement by prescription was as follows:

First, Tash provided an affidavit from William Ballard who leased the property now owned by Unruh from 1978 to 1984. Ballard stated that at the time of his lease, the ditch appeared to be in place and of long standing use. He specifically recalls the use of the ditch by Tash and overflow of water onto the property several times during his lease of the property.

Second, Jim Allen testified through an affidavit that he was the ranch manager for a horse ranch which included the property now owned by Unruh. During that time, Allen recalls the use of the ditch by Tash several times, including overflow onto the surrounding property.

Third, Herb Wheat is the owner of land just to the north of Tash’s ranch and has lived in the area since 1913. He is part owner of the Van Camp ditch. Wheat testified through his affidavit that Tash had used the ditch in a manner which included the overflow of water at the northeastern end of the ditch for as long as he could remember.

Fourth, Tash also provided the affidavit of Gerald Jones who has leased property and shares in the Van Camp ditch from Wheat since 1970. Jones recalled seeing the lateral ditch in use by Tash several times during the 1970s. He also stated that although he has no specific recollection of seeing the ditch in use in the last 10 years, he has no reason to infer it has been abandoned or unused. He has had no occasion to check its use.

Fifth, Tash, himself stated in an affidavit that the lateral ditch was used to flood irrigate 15 acres of his property east of the ditch. He further asserted that the ditch use has included overflow at the northeast end of the ditch. Finally, Tash stated that the ditch has been used when necessary and when water was available since it was built including numerous occasions in the last 14 years.

Sixth, he stated in his deposition that the lateral ditch could serve no others. In the 1991 deposition, he further stated that he had performed routine maintenance and had deepened the ditch in the last 10 years. Moreover, Tash described Unruh’s attempt to realign the ditch with a backhoe. He stated in his deposition that after Tash objected to the realignment, Unruh filled in the area upon which he had worked.

Seventh, Tash offered the Bargain and Sale Deed conveying land from the Downings to the State for the purpose of building the highway over that area of land. The document states, under “Special Considerations” that “Headgate at Sta 2284+60, approximately, to be removed by contractor, and to be replaced by owner (Tash Ranch Co.).”

Tash also offered the 1944 agreement between Edna Wheat, Emily Tash and the Downings which stated:

NOW THIS INDENTURE WITNESSETH, that for and in consideration of the benefits to accrue to the parties hereto by the changing of the location of the Van Camp Ditch and for other good and valuable consideration, the receipt of which is hereby acknowledged, the grantors hereby give and grant to the grantees a perpetual right of way and easement for the construction and maintenance of a ditch over, across and upon the said Southeast Quarter of the Northeast Quarter of Section 33, Township 7 South, Range 9 West, M.RM. Beaverhead County, Montana, said ditch to be constructed upon a line agreed upon by the parties hereto and which said line is approximately 300 feet west of the present Van Camp Ditch, said ditch so to be constructed shall be 8 feet in width and 2 feet or more in depth and of sufficient capacity to convey therein all of the waters of Beaverhead River decreed to the Grantees and all waters from any other source owned by the grantees or acquired by them from any source, and the grantees their agents and servants shall have, and they are hereby expressly given the right to enter upon the lands of the grantors when and wherever necessary for the purpose of constructing said ditch and forever maintaining and repairing said ditch and carrying, conducting and conveying the waters flowing or to flow therein to the lands of the grantees.

Unruh, on the other hand, provided the testimony through deposition, of Ronald Johnson, a previous owner of the property and a partner in farming the property with his brother Frederick, Unruh’s immediate predecessor. Johnson stated that he bought the property in 1978 with Bob Mountain and sold the property to Sullivan in 1984. Johnson managed the property for Sullivan from 1984 until 1986. Johnson remembered no water running through the lateral ditch at that point in time. From 1986 until Frederick Johnson purchased the land (Unruh’s land) in 1989, he does not remember paying attention to the ditch and does not remember water running through it on his daily travels past the ditch. He further stated that he watched it much closer prior to 1986 and that “to the best of my recollection, there has never been water that has run through there.”

Elmer Unruh was deposed on February 22, 1991. He stated that he felt that Tash had abandoned the ditch and that Tash had no right to use the ditch in any manner. Although Unruh stated that he inspected the property before purchasing it and the ditch appeared to be abandoned, he does not recall checking the headgate. He admitted that Tash claims he has used the ditch in the past on occasions. Unruh did not have a survey of the property done before purchasing nor did he speak to anyone but Johnson about the use of the lateral ditch. Unruh stated that he attempted to realign the lateral ditch but stopped when Tash complained of the action. He asserted that he stopped the work realigning the ditch at Tash’s request because he was not sure of the ownership of the ditch and did not want to take measures which may have jeopardized him at a later point in time.

Unruh also points to one piece of testimony by Tash which Unruh contends produces a question of fact about whether Tash’s use of the ditch was permissive. Unruh argues that the following testimony from Tash’s deposition demonstrates neighborly accommodation or permissive use, vitiating any argument that the use of the ditch was adverse:

Q. Okay. It’s my understanding from what you’ve told me so far that at the time the headgate was put in and the approximately 800 feet of “the ditch” were relocated, there were no written easements or granting documents of any type describing the location of that ditch?
A. Not to my knowledge. It’s just a matter of practice even though it isn’t recorded in this realignment agreement, it’s the only practical way we could serve this.
Q. I assume that the Downings consented to the location of “the ditch” there and to your use of it?
A. Yes.

We conclude that when the elements necessary to establish an easement by prescription are applied to the facts of the instant case, there are genuine issues of material fact, making summary judgment inappropriate. Tash has not provided the facts necessary to prove the elements of open and notorious use of the ditch nor has he proven that his use of the ditch was continuous. He has only provided conclusory statements that the ditch was used and that such use included overflow of the water onto the surrounding property. Conclusory statements are not sufficient to create a genuine issue of material fact. Thornton v. Songstad (1994), 263 Mont. 390, 398, 868 P.2d 633, 638.7

Moreover, there is no testimony that the use of the ditch was either permissive or adverse, merely that Tash used the ditch. “To be adverse, the use of the alleged easement must be exercised under a claim of right and not as a mere privilege or license revocable at the pleasure of the owner of the land; such claim must be known to and acquiesced in by, the owner of the land.” Warnack v. Coneen Family Trust (1994), 266 Mont. 203, 208, 879 P.2d 715, 719. (Emphasis added.) Moreover, “[w]hile a presumption of adverse use or adversity arises once the claimant establishes open, notorious, exclusive, continuous, and uninterrupted (unmolested) use for the full statutory period, it remains the burden of the easement claimant to prove each of those remaining elements of prescription, and unless and until the claimant proves those elements under the general rule, the burden does not shift to the land owner to prove permissive use or license.” Warnack, 879 P.2d at 723. (Citations omittted.) Finally, “[a]dverse use or adversity cannot, however, be presumed from the claimant’s inability to prove those remaining elements of prescription; if those elements are not proven, then the presumption of adverse use or adversity never springs into existence.” Warnack, 879 P.2d at 724.

In the instant case, Tash did not provide adequate testimony from which it could be determined that the elements of open, notorious, and continuous use could be satisfied. We conclude, therefore, that genuine issues of material fact remain as to whether Tash’s use of the ditch was open, notorious, continuous and adverse. We hold that the District Court erred in granting summary judgment to Tash on the issue of whether he had established a prescriptive easement.

APPEAL ISSUE ONE — ATTORNEY FEES

Tash argues that Unruh interfered with, encroached upon and impaired Tash’s easement by physically rerouting the ditch, breaking the ditch bank, denying access to the ditch, conditioning access to the ditch and initiating litigation in which Tash was forced to defend his easement right. Tash further asserts that he had to forego at least one irrigation opportunity because of the litigation. He argues that under Kephart v. Portmann (1993), 259 Mont. 232, 855 P.2d 120, sufficient impairment has occurred to warrant an award of attorney fees. Unruh counters that encroachment or impairment requires more action than merely instituting a legal action against the alleged easement owner. Further, he contends that he has made every effort “not to encroach or impair the use of the lateral ditch by Tash;” neither has he refused access by Tash to the lateral ditch.

However, because we are reversing the District Court on its decision granting summary judgment to Tash on the issue of whether he had established a prescriptive easement, we need not address the issue of attorney fees. This issue must be resolved by the District Court based upon its ultimate determination at trial. We remand the issue of attorney fees to the District Court for a final determination.

It would also be premature to discuss the issue of Unruh’s damages because the case is being reversed and remanded back to the District Court. The lower court must address issues of damages when the action returns to the District Court for a final determination.

CROSS-APPEAL ISSUE TWO — LACK OF RECORD ON APPEAL

Because we reverse and remand this case on the central issue of whether there exists a prescriptive ditch easement, the issue of lack of record is necessarily moot.

CROSS-APPEAL ISSUE THREE — ADOPTION OF ORDER VERBATIM

Unruh also contested the District Court’s adoption of Tash’s proposed order on cross-appeal. This issue, too, became moot because of our decision to reverse the District Court on the case’s central issue.

REVERSED AND REMANDED for further proceedings consistent with this opinion.

CHIEF JUSTICE TURNAGE, JUSTICES TRIEWEILER, WEBER and LEAPHART concur.


author: CHIEF JUSTICE TURNAGE

text:
    BRUCE WATTS, Plaintiff and Appellant, v. WESTLAND FARM MUTUAL INSURANCE COMPANY and SEITZ INSURANCE AGENCY, Defendants and Respondents.
    No. 94-549.
    Submitted on Briefs April 6, 1995.
    Decided May 23, 1995.
    52 St.Rep. 430.
    895 P.2d 626.
    271 Mont. 256.

      For Appellant: Amie A. Hove, Attorney at Law, Circle.
    For Respondents: L. D. Nybo, Attorney at Law, Great Falls; Katherine M. Irigoin, Attorney at Law, Sidney.
   CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Bruce Watts (Watts) appeals the decision of the Seventh Judicial District Court, Richland County, granting summary judgment in favor of Westland Farm Mutual Insurance Company (Westland) and Seitz Insurance Company (Seitz). We affirm.

The issues are:

1. Did the District Court err in granting summary judgment in favor of Westland and Seitz on Watts’s breach of contract claim?

2. Did the District Court err in granting summary judgment in favor of Seitz on Watts’s negligent misrepresentation claim?

3. Did the District Court err in granting summary judgment in favor of Westland and Seitz on Watts’s unfair trade practices claim?

Watts operates a farm in Richland County, Montana. In 1992 he obtained hail insurance for his cantaloupe crop from Westland through a local independent insurance agency, Seitz. Watts dealt directly with John Seitz, who then procured the insurance from Westland. Watts applied for insurance on his cantaloupe crop by signing a binder in May 1992. Seitz informed Watts that his crops would be insured at 12:01 a.m. the morning following his signing of the binder. Westland subsequently sent Watts a copy of the insurance policy which included the binder as the declaration page of the policy as well as additional policy terms. Watts was not required to pay his premium until October. Watts paid his premium in full and made no claims for hail damage in 1992.

In 1993 Watts applied with Seitz for crop insurance for his cantaloupe and grain crops. Seitz informed Watts that Seitz needed to verify the insurability of the cantaloupe crops with Westland. Watts applied for insurance by signing a binder on June 28,1993, that went into effect on June 29, 1993, at 12:01 a.m. Despite Seitz’s admonishment concerning the insurability of cantaloupe, the binder signed on June 28,1993, included the cantaloupe crop. Watts claims he received a message on his answering machine the evening of June 28 from Seitz confirming the insurance of the cantaloupe crop. Seitz disputes this allegation. Watts’s farm suffered a hail storm the evening of June 28, 1993, but the parties dispute whether the cantaloupe was damaged at that time.

Seitz sent the binder to Westland for processing. On July 1 or 2, 1993, Westland informed Seitz that it could not insure the cantaloupe because Westland was dealing with a new reinsurer and did not have an insurance adjuster capable of adjusting cantaloupe losses. Seitz relayed this message to Watts the same day. On July 12,1993, Watts received a copy of his insurance policy from Westland. The policy again included the binder as the declaration page of the policy as well as additional policy terms. The reference to coverage of Watts’s cantaloupe crop on the declaration page had been crossed out with the word “delete” written in the margin. The premium was reduced to reflect the coverage of Watts’s grain crop alone.

On July 18, 1993, Watts’s farm suffered another hail storm. Watts made an insurance claim and Westland sent an adjuster to Watts’s farm to ascertain the amount of damage sustained. The adjuster determined that a portion of Watts’s grain crop was damaged approximately 5 percent. The adjuster did not examine the cantaloupe crop for damage.

Watts filed a complaint on December 2, 1993, claiming that West-land and Seitz were liable for damage to his cantaloupe crop suffered on July 18. The complaint alleged breach of contract, negligent misrepresentation and unfair trade practices pursuant to § 33-18-201, MCA. All parties moved for summary judgment. Following a hearing, the District Court denied Watts’s motion and granted West-land’s and Seitz’s motions for summary judgment. Watts appeals the decision of the District Court.

We review summary judgment rulings de novo. Cooper v. Sisters of Charity (1994), 265 Mont. 205, 207, 875 P.2d 352, 353. Summary judgment is proper only when there exists no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. Rule 56(c), M.R.Civ.P.; Spain-Morrow Ranch, Inc. v. West (1994), 264 Mont. 441, 444, 872 P.2d 330, 331-32.

Issue 1

Did the District Court err in granting summary judgment in favor of Westland and Seitz on Watts’s breach of contract claim?

Watts argues that his signing of the binder on June 28, 1993, resulted in his cantaloupe crop being insured as of 12:01 a.m. on June 29, 1993. Watts claims Westland could only cancel this policy after ten days written notice. Watts contends that the cantaloupe hail insurance described in the binder was in effect at the time of the July 18, 1993, hail storm because he had not received sufficient written notice of cancellation. He maintains that neither the oral notification by Seitz on July 2 or his July 12,1993, receipt of the insurance policy with the cantaloupe coverage provision deleted was sufficient to cancel the insurance coverage of his cantaloupe crop.

Westland and Seitz argue that a binder never went into effect. By its own terms, the binder does not go into effect if the crop to be insured suffers any damage before the effective hour of the insurance. Westland and Seitz claim that the hail storm on the evening of June 28, 1993, voided the binder before it became effective. Watts insists that while a hail storm took place on his farm on June 28, his cantaloupe did not suffer any damage at that time. Because there exists a disputed issue of fact as to whether the cantaloupe crop was damaged on June 28, we cannot affirm the District Court’s granting of summary judgment on these grounds.

Westland and Seitz also argue that even if the binder went into effect on June 29, the binder was not in effect at the time of the July 18 hail storm. They maintain that, unlike an insurance policy, a binder is a form of temporary insurance coverage that is in effect only from the time the applicant signs the binder until the insurance carrier either accepts or rejects the application for insurance. They contend that the ten-day written notice requirement does not apply to temporary binders.

Section 33-15-1103, MCA, requires ten days written notice for midterm cancellation of an insurance policy. The ten-day written notice requirement of § 33-15-1103, MCA, was incorporated into the crop insurance policy issued to Watts by Westland. This provision reads, in part:

We may cancel all or any part of the insurance provided by us at any time during the first 60 days during which the policy is in effect by notifying you in writing at least 10 days before the date and hour cancellation takes effect. Notices of cancellation will be mailed 1st class or delivered to you at your address shown in the declaration. Proof of mailing will be sufficient proof of notice. [Emphasis added],

The ten-day notice applies only to midterm cancellation of insurance coverage. Cancellation, as used in this section, means “the decision by the insurer to terminate an insurance policy prior to the expiration of its terms.” Section 33-15-1102(2), MCA.

Section 33-15-411, MCA, defines a binder as follows:

Binders for temporary insurance. (1) Binders or other contracts for temporary insurance may be made orally or in writing and shall be deemed to include all the usual terms of the policy as to which the binder was given, together with such applicable endorsements as are designated in the binder, except as superseded by the clear and express terms of the binder.
(2) No binder shall be valid beyond the issuance of the policy with respect to which it was given or beyond 90 days from its effective date, whichever period is shorter. [Emphasis added.]

By the express language of § 33-15-411(2), MCA, the term of a binder expires when the policy for which the binder applies is issued.

This interpretation of Montana’s statutory scheme is supported by other authority.

Generally a contract of temporary present insurance is terminated by the issuance, delivery, and acceptance of a policy, or by a rejection of the application, but if no policy is issued, delivered, and accepted, and the contract is not otherwise terminated, it continues until the time fixed thereby for its termination or a reasonable time has expired.

2 Couch on Insurance 2d § 14:3. Watts applied for insurance by signing a binder on June 28, 1993. The policy that related to this binder was issued on July 12, 1993. The policy included coverage of Watts’s grain crop but did not include coverage of his cantaloupe crop. Pursuant to § 33-15-411(2), MCA, the binder was automatically void upon the issuance of the policy. No notice other than the issuance of the policy was required.

We conclude as a matter of law that the expiration of a binder upon the issuance of the insurance policy is not a “cancellation” within the meaning of Title 33 and therefore the ten-day notification provision is inapplicable. Therefore the District Court did not err in granting summary judgment in favor of Westland and Seitz on the breach of contract claim.

Issue 2

Did the District Court err in granting summary judgment in favor of Seitz on Watts’s negligent misrepresentation claim?

Watts alleged Seitz committed two acts of negligent misrepresentation. First, Watts claims that in May 1992 Seitz represented that he was a qualified and experienced insurance salesman and that he could obtain insurance for specialty crops such as cantaloupe. Second, Watts claims that Seitz refused or neglected to provide ten-day written notice that his cantaloupe crop was not covered.

In Barrett v. Holland & Hart (1992), 256 Mont. 101, 845 P.2d 714, we set out the elements of a negligent misrepresentation claim:

1. the defendant made a representation as to a past or existing material fact;
2. the representation must have been untrue;
3. regardless of its actual belief, the defendant must have made the representation without any reasonable ground for believing it to be true;
4. the representation must have been made with the intent to induce the plaintiff to rely on it;
5. the plaintiff must have been unaware of the falsity of the representation and he must have been justified in relying upon the representation;
6. the plaintiff, as a result of his reliance, must sustain damage.

Barrett, 845 P.2d at 718-19 (citing Kitchen Krafters, Inc. v. Eastside Bank of Montana (1990), 242 Mont. 155, 165, 789 P.2d 567, 573) (emphasis in original).

A review of the record reveals Watts has not presented any evidence that Seitz’s statements concerning his experience and expertise as an insurance salesman were misrepresentations. Nothing in the record indicates that Seitz was anything but an experienced and successful insurance agent. Seitz’s alleged statements concerning his ability to procure insurance for Watts’s cantaloupe crop in 1992 were likewise not misrepresentations, because Seitz successfully procured insurance for Watts’s cantaloupe crop in 1992. In 1993, Watts was no longer justified in relying on representations made in 1992, because he was informed on July 2 and again on July 12 that his cantaloupe crops were not insured. Watts’s reliance on previous representations made by Seitz was therefore unjustified.

Neither has Watts presented evidence that Seitz’s failure or refusal to comply with the ten-day written notice requirement amounted to a negligent misrepresentation. As previously discussed, the ten-day written notice requirement is not applicable to the natural expiration of a temporary binder. More importantly for disposition of this issue, Seitz’s failure to comply with the ten-day notice requirement was not a representation. By failing to give ten days written notice, Seitz did not make any “representation” as to a past or existing fact.

We conclude that Watts has failed to present evidence creating material issues of fact concerning negligent misrepresentation and that the District Court properly granted Seitz’s motion for summary judgment as to this issue.

Issue 3

Did the District Court err in granting summary judgment in favor of Westland and Seitz on Watts’s unfair trade practices claim?

Watts contends that Westland and Seitz violated Montana’s Unfair Trade Practices Act. Watts’s complaint alleged violations of the following provisions of § 33-18-201, MCA:

Unfair claim settlement practices prohibited. No person may, with such frequency as to indicate a general business practice, do any of the following:
(1) misrepresent pertinent facts or insurance policy provisions relating to coverages at issue;
(4) refuse to pay claims without conducting a reasonable investigation based upon all available information;
(6) neglect to attempt in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear;
(9) attempt to settle claims on the basis of an application which was altered without notice to or knowledge or consent of the insured ....

Watts argues that Westland and Seitz violated these provisions of § 33-18-201, MCA, and are therefore liable for damages.

Section 33-18-242(5), MCA, states:

An insurer may not be held liable under this section if the insurer has a reasonable basis in law or in fact for contesting the claim or the amount of the claim, whichever is in issue.

We have previously determined that whether a “reasonable basis in law or in fact” exists is generally a question of fact reserved for the trier of fact. In Dean v. Austin Mutual Insurance Co. (1994), 263 Mont. 386, 869 P.2d 256, we stated “whether the insurer had a ‘reasonable basis in law or in fact’ is an issue properly presented for determination to the trier of fact.” Dean, 869 P.2d at 258. We reiterated this position in DeBruycker v. Guaranty National Ins. Co. (1994), 266 Mont. 294, 298, 880 P.2d 819, 821.

However, both Dean and DeBruycker are distinguishable from the case at bar. In Dean and DeBruycker there was no question that the plaintiffs maintained insurance policies with the insurers. Rather, the contested issues involved the applicability and amount of coverage under the specific facts and circumstances presented. Dean, 869 P.2d at 257-59; DeBruycker, 880 P.2d at 820-21.

In the instant case, the District Court determined, as a matter of law, that the binder that temporarily insured the cantaloupe was not in effect at the time of the July 18, 1993 hailstorm. Therefore, there can be no genuine issues of material fact concerning Westland’s and Seitz’s obligations for damage to the cantaloupe crop.

Because there was no policy insuring the cantaloupe in effect at the time of the July 18, 1993 hailstorm, we conclude as a matter of law that Westland and Seitz had a reasonable basis in law and in fact for contesting Watts’s claim which acts as a complete defense to a claim under § 33-18-201, MCA. By this opinion, we do not comment on whether Seitz, as an insurance agent or “producer,” is subject to the provisions of § 33-18-201, MCA.

Because Watts has not established issues of material fact as to any of his substantive claims, we need not address the issue of punitive damages. We hold that the District Court did not err in granting summary judgment in favor of Westland and Seitz because there are no genuine issues of material fact and the defendants are entitled to judgment as a matter of law.

JUSTICES GRAY, NELSON, WEBER and LEAPHART concur.


author: JUSTICE GRAY

text:
    IN RE THE MARRIAGE OF CINDY ANN ANSELL, f/k/a CINDY ANN ELSER, Petitioner and Appellant, and DAN ROY ELSER, Respondent and Respondent.
    No. 94-433.
    Submitted on Briefs February 16, 1995.
    Decided May 23, 1995.
    52 St.Rep. 434.
    895 P.2d 619.
    271 Mont. 265.

      For Appellant: Howard C. Greenwood, Hamilton.
    For Respondent: Philip J. O’Connell, O’Connell, Beers & Alterowitz, Missoula.
   JUSTICE GRAY

delivered the Opinion of the Court.

Cindy Ann Ansell, formerly known as Cindy Ann Elser (Cindy), appeals from the findings, conclusions, and order of the Twenty-First Judicial District Court, Ravalli County, denying her motion for an order permitting her to remove her minor children to a permanent residence outside of Montana and granting Dan Roy Elser’s (Dan) motion to appoint him primary residential custodian if Cindy proceeds with her relocation. We affirm.

The District Court dissolved Cindy’s and Dan’s marriage via a final decree of dissolution dated November 17,1993. Pursuant to the terms of a separation agreement incorporated into the final decree, Cindy and Dan were awarded joint custody of Amber and Jaimie, their two minor daughters; Cindy was designated the children’s primary residential custodian. Dan was granted visitation rights on alternating weekends and major holidays, residential custody for two months in the winter, and any other visitation agreed to by Cindy and Dan which would not interfere with the children’s education and social activities. The separation agreement also provided that “[n] either party shall remove any of the minor children to a permanent residence outside the State of Montana without the other party’s prior written consent or prior approval of a court having proper jurisdiction over the minor children....”

Cindy resided in Hamilton with the children after the dissolution; Dan maintained a residence in Corvallis. Cindy, a radiology assistant, desired to continue her education and applied for admission to the radiology technician program at St. Patrick’s Hospital in Missoula. After St. Patrick’s denied her application, Cindy notified Dan of her intention to relocate with the children to Kansas and enroll in the University of Kansas’ radiology technician program. Dan refused to consent to the relocation.

Cindy moved the District Court for an order permitting her to remove the children to a permanent residence outside of Montana. She included a proposed visitation modification whereby Dan would be allowed to have his two-month custody of the girls during the summer instead of the winter and visitation on alternating major holidays. Dan objected to the children’s relocation and moved the court to designate him as their primary residential custodian in the event Cindy relocated out of state. The District Court denied Cindy’s motion and ordered that Dan would become the children’s primary residential custodian in the event Cindy left Montana. Cindy appeals.

Did the District Court abuse its discretion in granting Dan’s motion to modify custody?

At the outset, we note the parties’ disagreement over which statutory standards were applicable to their respective, and each other’s, motions in the District Court and clarify which statutes apply to this case. Dan’s motion sought modification of the existing custody arrangement via his appointment as the children’s primary physical custodian in the event Cindy moved out of state. Shortly after the District Court’s grant of that motion, we adopted a new standard for evaluating motions in the joint custody context which seek a significant change in physical custody without regard to whether a change in the formal joint custody designation is sought:

[M]otion[s] or petition[s] to modify child custody provisions in a dissolution decree which have the effect of substantially changing the primary residence of the parties’ children, even though the formal designation of “joint custody” is retained, are to be construed as motions or petitions to terminate joint custody and must satisfy the jurisdictional requirements set forth in § 40-4-219, MCA.

In re Marriage of Johnson (1994), 266 Mont. 158, 166, 879 P.2d 689, 694. It is a general rule that an appellate court must apply the law in effect at the time it renders its decision. Haines Pipeline v. MPC (1991), 251 Mont. 422, 433, 830 P.2d 1230, 1238.

Dan’s motion, if successful, would reverse the children’s physical custody arrangements by appointing him primary physical custodian of the children; it clearly would have the effect of substantially changing the children’s physical custody. Pursuant to Marriage of Johnson, therefore, Dan’s motion must be construed as a motion to terminate joint custody to which § 40-4-219, MCA, applies. In order to modify custody under that statute, a court must determine that the circumstances of the child or custodian have changed since entry of the decree, one of the factors contained in subsection (l)(a) through (f), exists, and the best interests of the child require modification; only then may the court exercise its discretion to modify custody. Section 40-4-219(1), MCA; In re Marriage of Allison (1994), [269 Mont. 250], 887 P.2d 1217, 1223.

Cindy’s motion, on the other hand, sought to change the children’s residence without significantly modifying custody arrangements. Under § 40-6-231, MCA, “[a] parent entitled to the custody of a child has a right to change his residence, subject to the power of the proper court to restrain a removal which would prejudice the rights or welfare of the child.” We previously have determined that the “prejudice” standard in § 40-6-231, MCA, is essentially the best interest standard in reverse. See In re Marriage of Bergner (1986), 222 Mont. 305, 310-11, 722 P.2d 1141, 1145. In other words, a “prejudice” determination under § 40-6-231, MCA, is the legal equivalent of a “not in the child’s best interest” determination. As a result, and contrary to Cindy’s argument that it was necessary for the District Court to make a specific determination of prejudice before denying her motion, the best interest standard applies to Cindy’s motion to change the children’s residence to Kansas.

As our discussion clarifies, the District Court’s ruling on both motions ultimately rested on application of the best interest of the children standard. As a result, if the court did not err in granting Dan’s motion under § 40-4-219, MCA, which includes the best interest standard, it did not err in denying Cindy’s motion under the best interest standard.

In addressing Dan’s motion to modify, the District Court specifically found that Cindy’s proposed move constituted a change in the children’s circumstances which had arisen after the dissolution decree was entered. Cindy does not challenge this § 40-4-219(1), MCA, finding.

The court also found that Cindy’s intent to change the children’s residence to Kansas met the factor set forth in § 40-4-219(1)(f), MCA. Cindy contends that the existence of the subsection (1)(f) factor is insufficient. Relying on In re Marriage of Miller (1992), 251 Mont. 300, 825 P.2d 189, she argues that the District Court could not grant Dan’s motion to modify without first determining under § 40-4-219(1)(c), MCA, that the children’s environment in her physical custody seriously endangered them. Neither the statute nor Marriage of Miller supports Cindy’s argument.

As set forth above, the statute is clear that the court need find the existence of only one of the factors listed in § 40-4-219(1)(a)-(f), MCA. Moreover, the motion to modify custody in Marriage of Miller was brought pursuant to § 40-4-219(1)(c), MCA, which requires a determination that the present environment seriously endangers the child’s physical, mental, moral, or emotional health. Marriage of Miller, 825 P.2d at 192. Indeed, subsection (1)(c) forms the basis for many motions to modify custody. See, e.g., In re Marriage of Gallagher (1994), 266 Mont. 358, 361, 880 P.2d 1303, 1306; In re Marriage of Morazan (1989), 237 Mont. 294, 298, 772 P.2d 872, 874. Here, however, the District Court found the existence of the § 40-4-219(1)(f), MCA, factor. Nothing in the statute or Marriage of Miller requires more.

The District Court having properly found two of the three § 40-4-219, MCA, criteria, we need only review its findings that the move to Kansas is not in the children’s best interests. Cindy argues that the record supports findings that spending time with the children was not a priority for Dan and that he could have spent much more time with the children. However, her argument ignores the applicable standards of review.

We review a district court’s findings relating to custody modification to determine whether those findings are clearly erroneous. Marriage of Johnson, 879 P.2d at 694 (citation omitted). Findings are clearly erroneous if they are not supported by substantial evidence, the court misapprehends the effect of the evidence, or this Court’s review of the record convinces it that a mistake has been made. Marriage of Johnson, 879 P.2d at 694 (citation omitted). We will reverse a court’s decision to modify custody or visitation only where an abuse of discretion is clearly demonstrated. In re Marriage of Hunt (1994), 264 Mont. 159, 164, 870 P.2d 720, 723.

The District Court first found that the high cost of travel and the impossibility of scheduling a time which coordinated with the children’s school schedule and Dan’s work schedule would deprive Dan of meaningful custody and visitation. It also found that Dan was committed to being an active parent who was involved with his children as much as possible and that Cindy agreed with Dan that it was important for the children to visit with Dan. Based on these findings, the District Court ultimately found that moving to Kansas was not in the children’s best interest.

Ample evidence supports the court’s finding that the children’s school schedule and Dan’s work schedule would make scheduling Dan’s two-month extended visitation during the summer impossible. Dan testified that he performs seasonal highway construction work from April through November in Montana and Idaho. He typically works twelve to eighteen hours a day, five or six days a week. He travels home to Corvallis on Friday, arriving sometime early Saturday morning. The remainder of his April through November weekends are spent doing laundry, catching up on sleep and, on Sunday afternoon, traveling back to the work site. Moreover, although Cindy acknowledged the importance of the children spending time with Dan, she conceded that the right to an extended visitation during the summer months — as she proposed in conjunction with her motion to relocate the children to Kansas — would be meaningless to Dan because of his work schedule. She also acknowledged that extended visitation during the winter months would be impossible from the children’s standpoint because of their school schedules and that the relocation effectively would limit Dan’s visitation to one week at Christmas.

The court also found that the high cost of travel would contribute to the impact Cindy’s proposed move would have on Dan’s ability to spend time with his children. Dan and Cindy approximated the airfare between Montana and Kansas at $1,000 and testified that neither of them makes a great deal of money. Dan stated that he could only afford one trip a year for the children to Montana. Cindy speculated that she could purchase one ticket per child per year, but did not commit to paying for any of the children’s transportation for visitation.

The evidence also supported the court’s determination that Dan is committed to being an active parent. The record reflects both Dan’s belief in the importance of spending as much time as possible with his children and that he visited them nearly every other weekend and as often as permitted by his work schedule. Furthermore, Dan’s concern about the children’s welfare was supported by the fact that, althoughhe has experienced financial difficulty, he continued to make child support payments and, at Cindy’s request, paid the entire amount owed to the children’s day care and school so they could continue attending.

We conclude that substantial evidence supports the District Court’s finding that the proposed relocation to Kansas was not in the children’s best interest. The court did not misapprehend the effect of the evidence and we are not left with the firm conviction that a mistake was made. We hold, therefore, that the District Court did not abuse its discretion in granting Dan’s motion to modify custody and appoint him primary custodian if Cindy moved to a permanent residence outside of Montana.

Because of our holding, we need not address Cindy’s argument relating to attorney fees.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES TRIEWEILER, NELSON and LEAPHART concur.


text:
    IN RE THE MARRIAGE OF CHARLES HENRY EICKMEYER, Petitioner and Respondent, and ARLENE GRACE EICKMEYER, Respondent and Appellant.
    No. 94-530.
    Submitted on Briefs March 30, 1995.
    Decided May 23, 1995.
    52 St.Rep. 437.
    895 P.2d 623.
    271 Mont. 272.

      For Appellant: R. J. “Jim” Sewell, Jr., Smith Law Firm, Helena.
    For Respondent: Thomas S. Winsor, Attorney at Law, Helena.
   JUSTICE GRAY

delivered the Opinion of the Court.

Arlene Eickmeyer (Arlene) appeals from an order of the First Judicial District Court, Broadwater County, granting Charles Eickmeyer’s motion to dismiss her petition for increased maintenance. We affirm, holding that the District Court did not err in concluding that § 40-4-208(2)(a), MCA, bars Arlene’s petition.

The facts necessary to our resolution of this case are undisputed. The marriage of Charles Eickmeyer (Charles) and Arlene was dissolved in 1987. The dissolution decree incorporated Charles and Arlene’s marital settlement agreement which stated, in pertinent part, that “[n] either of us seeks an award of maintenance.”

Arlene filed a Petition for Increased Maintenance in 1994. She alleged that a change of circumstances had occurred since the dissolution “which is so substantial as to be unconscionable.” She requested monthly maintenance in the amount of $750 and attorney’s fees incurred in bringing the petition. Charles moved to dismiss the petition, arguing that it was barred by § 40-4-208(2)(a), MCA. The District Court granted the motion to dismiss and Arlene appeals.

Did the District Court err in concluding that Arlene’s petition was barred by § 40-4-208(2)(a), MCA?

Post-dissolution maintenance proceedings are governed by § 40-4-208, MCA, which provides in pertinent part:

Whenever the decree proposed for modification does not contain provisions relating to maintenance or support, modification under subsection (1) may only be made within 2 years of the date of the decree.

Section 40-4-208(2)(a), MCA. The District Court concluded that the statement “[n] either of us seeks an award of maintenance,” incorporated into the decree from Charles and Arlene’s marital settlement agreement, did not constitute a “provision relating to maintenance” under § 40-4-208(2)(a), MCA. Thus, according to the court, Arlene’s petition for maintenance was barred because it was not brought within two years of the decree.

The interpretation and application of a statute are matters of law. Matter of E-Z Supply (1994), 267 Mont. 298, 883 P.2d 833, 835. We review a district court’s conclusions of law to determine if they are correct. In re Marriage of Barnard (1994), 264 Mont. 103, 106, 870 P.2d 91, 93.

The function of courts in interpreting statutes is to effectuate the intent of the legislature. E-Z Supply, 883 P.2d at 835 (citations omitted). “Our primary tool for ascertaining the legislature’s intent is the plain meaning of the words used.” E-Z Supply, 883 P.2d at 835; quoting Sagan v. Prudential Insurance Company of America (1993), 259 Mont. 506, 509, 857 P.2d 719, 722. “If the legislature’s intent can be determined from the plain meaning of the words used in the statute, we will go no further.” E-Z Supply, 883 P.2d at 835; quoting State ex rel. Neuhausen v. Nachtsheim (1992), 253 Mont. 296, 299, 833 P.2d 201, 204.

The dispute in this case centers on the meaning of the “provisions relating to maintenance” language in § 40-4-208(2)(a), MCA. The ordinary and plain understanding of the word “provision” is “to provide” something. Indeed, this common understanding is reflected in the dictionary definition of “provision” as “the act of supplying ...; something provided.” American Heritage Dictionary 1459 (3rd ed. 1992). Thus, a “provision relating to maintenance” under the statute is an affirmative and action-oriented undertaking; it is a present undertaking or action of providing maintenance for a spouse, providing other assets specifically in lieu of maintenance, or providing for the payment or seeking of maintenance in the future upon the occurrence of a specified event.

The language “neither of us seeks an award of maintenance” does not constitute a “provision relating to maintenance” when compared to the plain meaning of “provision.” The language does not provide maintenance for a party in any form, or even provide for maintenance as a future possibility. The mere inclusion of the word “maintenance” in a decree via incorporation, such as occurred in this case, does not constitute a provision relating to maintenance under § 40-4-208(2)(a), MCA.

Arlene relies on Marriage of Cooper (1985), 216 Mont. 34, 699 P.2d 1044, and Marriage of Rush (1985), 215 Mont. 498, 699 P.2d 65, in arguing that the language in her agreement and decree constitutes a provision relating to maintenance under § 40-4-208(2)(a), MCA. Both cases are inapposite here.

In Cooper, we addressed an issue entirely different from the issue presently before us. There, the issue was which decree or order constituted the “decree proposed for modification” for purposes of applying § 40-4-208(2)(a), MCA. Cooper, 699 P.2d at 1045. In addressing that issue, we observed that the original dissolution decree contained a provision relating to maintenance requiring Mr. Cooper to pay $4,200 in seven equal installments of $600 to his former wife, and permitting the former wife to petition for maintenance on the completion of those payments. Cooper, 699 P.2d at 1045. We did not define or interpret the “provision relating to maintenance” language in § 40-4-208(2)(a), MCA. Thus, Cooper is inapplicable here and nothing therein supports Arlene’s argument.

In Rush, the former wife petitioned to modify a 1975 dissolution decree regarding maintenance more than two years after entry of the decree. Rush, 699 P.2d at 66. The decree contained maintenance provisions requiring payment of $400 per month until the payments reached a total of $24,000; all required maintenance payments had been made. The district court entertained, but denied, the former wife’s petition to modify. The issue on appeal was whether the court erred in determining that the former wife had not satisfied the requirements of § 40-4-208(b), MCA. Rush, 699 P.2d at 66-67.

Prior to addressing that issue, we determined the fact that the maintenance required by the decree had been paid did not preclude an additional maintenance award as a matter of law. Rush, 699 P.2d at 66. In doing so, we did not specifically address the “provisions relating to maintenance” language in § 40-4-208(2)(a), MCA. Thus, nothing in Rush supports Arlene’s argument here. Indeed, any analogy which could be drawn to Rush would support our statutory interpretation in this case since it is clear that, there, the original decree contained provisions for the payment of maintenance. Rush, 699 P.2d at 66.

We conclude that the dissolution decree incorporating the parties’ marital settlement agreement did not contain a provision relating to maintenance. We hold, therefore, that the District Court did not err in concluding that § 40-4-208(2)(a), MCA, bars Arlene’s petition and in granting Charles’ motion to dismiss.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES TRIEWEILER, NELSON and LEAPHART concur.


author: JUSTICE WEBER JUSTICE HUNT

text:
    HAROLD R. PATTEN and BETTY R. PATTEN, Plaintiffs and Respondents, -v-PHYLLIS M. RADDATZ, a/k/a PHYLLIS M. STONER, Defendant and Appellant.
    No. 94-276.
    Submitted on Briefs March 9, 1995.
    Decided May 23, 1995.
    52 St.Rep. 439.
    895 P.2d 633.
    271 Mont. 276.

      For Appellant: Michael R. Tramelli, Great Falls; David Paoli, Missoula; Fred Paoli, Livingston.
    For Respondent: Joseph G. Mudd, Steven T. Potts, Jardine, Stephenson, Blewett & Weaver, Great Falls; William Conklin, Conklin, Nybo, Leveque & Murphy, Great Falls; Teresa D. Thompson, Spokane, Washington.
   JUSTICE WEBER

delivered the Opinion of the Court.

This is an appeal from an order of the Eighth Judicial District Court, Cascade County, granting plaintiffs’ motion for partial summary judgment and denying defendant’s motion for partial summary judgment. We affirm.

We restate the issues on appeal:

I. Did the District Court err when it granted summary judgment in favor of Harold and Betty Patten on Phyllis Raddatz’s counterclaim of negligence?

II. Did the District Court err when it granted summary judgment on Phyllis Raddatz’s claim of negligence per se in favor of Harold and Betty Patten?

Phyllis Raddatz (Ms. Raddatz) was involved in a sexual relationship with Harold Patten (Mr. Patten) from 1978 to 1992. According to Ms. Raddatz, their relationship began when Mr. Patten invited her to lunch and “intimated that he wanted a long-term relationship.” She testified that he specifically asked “you realize sex goes with this?” Thus, Ms. Raddatz alleges she entered this “long-term relationship” just as one enters a contract. The terms of the arrangement were that Ms. Raddatz would be available to Mr. Patten to have sex, take various tranquilizers and sleeping pills, provide companionship and drink with him. Mr. Patten would, in turn, support her financially. Mr. Patten stopped giving her money in 1992 and refused to provide for her in any other manner.

Harold and Betty Patten (Pattens) filed an action for injunction on May 27,1993, alleging that Ms. Raddatz had harassed them, invaded their privacy, interfered with the Pattens’ rights of personal relations, and attempted to seduce Mr. Patten from Mrs. Patten. The court held a hearing on this action and, based on testimony, exhibits, and Ms. Raddatz’s stipulation, granted a preliminary injunction to the Pattens. Subsequently, Ms. Raddatz counterclaimed against the Pattens for breach of contract, defamation, infliction of emotional distress, negligence, and negligence per se for giving prescription drugs to Ms. Raddatz during her and Mr. Patten’s relationship. Trial was set for May 31, 1994.

On April 25,1994, the Pattens filed a motion for partial summary judgment asking the court to grant judgment in their favor on Ms. Raddatz’s counterclaims. Ms. Raddatz filed a motion for partial summary judgment on April 28, 1994, seeking judgment in her favor on the negligence per se counterclaim. Ms. Raddatz then filed a motion to vacate the upcoming trial setting, and stipulated to dismiss all three of her counterclaims leaving her negligence and negligence per se claims to be addressed in connection with the summary judgment motions. The negligence and negligence per se claims were based on Mr. Patten giving his prescription drugs to Ms. Raddatz and causing her to become addicted to them. The court heard oral arguments on all three motions and issued a memorandum and order on May 20, 1994, granting the Pattens’ motion for partial summary judgment and denying Ms. Raddatz’s motion for partial summary judgment.

Ms. Raddatz appeals the District Court’s May 20, 1994 decision.

I.

Did the District Court err when it granted summary judgment in favor of the Pattens on Ms. Raddatz’s counterclaim of negligence?

Summary judgment is appropriate under Rule 56(c) of the Montana Rules of Civil Procedure when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”

The District Court’s memorandum set forth the following undisputed facts. Ms. Raddatz met Mr. Patten in 1978. For the next fourteen years, Ms. Raddatz agreed with Mr. Patten to take tranquilizers from him, have sex with him, and drink with him in exchange for his financial support. Mr. Patten admitted that he gave some pills to Ms. Raddatz during their relationship. Ms. Raddatz testified that, during this relationship, she obtained sleeping pills and tranquilizers from her doctor as well as from Mr. Patten. She had voluntarily stopped taking the Halcion (sleeping drug) and the Valium for over a month. She took Ativan, a tranquilizer prescribed by her doctor, the morning of the deposition. Prior to that day, she had not taken Ativan for approximately a week. At deposition, she could not recall if a doctor had ever diagnosed her as being addicted to drugs.

These facts lead the District Court to its first conclusion.

“The undisputed facts set forth above show that [Ms. Raddatz’s] case against [Mr. Patten] is based upon approximately 14 years of sex, drugs, and drinking. It was an illegal and illicit relationship. Neither the relationship nor its termination gives rise to legal remedies, just as there is no remedy for breach of an illegal contract. See M.C.A. § 1-3-215 (1993).”

The District Court then determined whether the Pattens or Ms. Raddatz were entitled to a judgment as a matter of law. In its legal analysis, the court applied the doctrine of in pari delicto set forth in § 1-3-215, MCA, as follows:

Equal in right or wrong. Between those who are equally in the right or equally in the wrong, the law does not interpose.

The in pari delicto doctrine is based upon the premise that there is no recourse between wrongdoers. See Waller v. Engelke (1987), 227 Mont. 470, 741 P.2d 385. Here, the court found that Ms. Raddatz’s “claims arise from a relationship founded upon prostitution and possession of [dangerous] drugs, both of which are illegal.” See §§ 45-5-601, MCA (sex in exchange for compensation is an act of prostitution), and 45-9-102(1), MCA (criminal possession of dangerous drugs). Thus, the court concluded that because the agreement between Ms. Raddatz and Mr. Patten was illegal, “the in pari delicto doctrine does not permit recovery for torts supposedly committed during the course of‘performing’ such agreements.”

Ms. Raddatz argues that the relationship was not an act of prostitution because it involved more than agreeing to have sex and take drugs. She claims it involved companionship, emotional support and love. She cites to Mr. Patten’s testimony that they didn’t always have sex. In his testimony, he stated that sometimes they would just play cards and drink beer. Ms. Raddatz believes both her and Mr. Patten’s testimony establish that she is not a prostitute and did not consume the drugs he provided merely for money. Ms. Raddatz argues that the relationship’s characterization is a disputed issue of fact which should be addressed by a jury.

Further, Ms. Raddatz claims she could not commit the offense of criminal possession of drugs because she did not have the mental capacity to form the requisite intent. She reports a neuropsychologist’s conclusion that Ms. Raddatz came into this relationship with Mr. Patten “as a male dependent, manipulatable woman, who because of her fragile mental condition, was more likely to ‘do’ as instructed by him.” Ms. Raddatz argues that her susceptibility to Mr. Patten’s control is also a disputed issue of fact which should be considered in determining whether she committed the offenses of prostitution or criminal possession of drugs.

Even if she were found to be capable of possessing the requisite intent, Ms. Raddatz argues that the in pari delicto doctrine should not apply here. She cites Waller, 227 Mont. at 447, 741 P.2d at 390, for the principle that conduct which is not strongly condemned by the public as a matter of serious criminal conduct or delinquency is not sufficient to bar recovery. She says the court further states the trier of fact may utilize comparative negligence to apportion fault. With this in mind, she contends that Mr. Patten’s conduct, as a married man who distributes illegal drugs, is far more egregious than her own conduct and should, therefore, permit her recovery.

Mr. and Mrs. Patten argue that Ms. Raddatz cannot recover because she was at fault as well. During the course of her and Mr. Patten’s relationship, she violated the following statues: §§ 45-5-601, MCA (making prostitution a crime); 45-9-102, MCA (making use and possession of drugs criminal); 27-1-514, MCA (forbidding the seduction of a spouse); and 27-1-515, MCA (forbidding the enticement of a husband from his wife). The Pattens argue the doctrine of in pari delicto bars recovery and makes no allowance for the comparison of “egregious” conduct.

In addition, the Pattens point out that Ms. Raddatz has failed to prove evidence as to causation. No evidence was produced to indicate she was forced to take drugs. In fact, she took drugs only as a bargain. Dr. Maynard, who medically treated Ms. Raddatz for six years, testified he never diagnosed her as being addicted to drugs. He further stated he was aware of no significant problem with Ms. Raddatz’s use of tranquilizers and sleeping pills. In substance, the Pattens contend that while Ms. Raddatz alleges there is negligence, drug addiction, brain disease, etc., all the testimony and exhibits are to the contrary.

The standard that we apply in reviewing the District Court’s grant of motion for summary judgment is the same as that used by the District Court under Rule 56(c), M.R.Civ.P., “that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter law.” Dare v. Montana Petroleum Marketing Co. (1984), 212 Mont. 274, 687 P.2d 1015.

In Lencioni v. Long (1961), 139 Mont. 135, 361 P.2d 455, we denied recovery in a negligence case under the doctrine of in pari delicto. In that case, a bartender was denied recovery for an injury sustained while he was operating a bar in violation of state liquor control and prostitution laws. Here, circumstances exist where Ms. Raddatz seeks recovery for an injury sustained while executing the terms of an illegal contract.

According to Ms. Raddatz’s testimony, she accepted $1,000 from Mr. Patten on their second meeting; and, thereafter, entered into a long-term relationship where she agreed to perform sexual favors for Mr. Patten in exchange for his financial support. Sex for money is prostitution and prostitution is illegal under § 45-5-601, MCA.

Furthermore, she testified that the terms of their service arrangement included her availability to Mr. Patten to have sex, to party, and to take the drugs he gave to her. The drugs she took were prescription drugs prescribed to Mr. Patten and classified as dangerous drugs under § 50-32-101(6), MCA. The evidence shows she knew these drugs were prescription drugs and had not been specifically prescribed to her. Unauthorized possession of dangerous drugs is illegal under § 45-9-102, MCA. Ms. Raddatz has not been convicted nor even charged criminally with prostitution or with possession of dangerous drugs. Nonetheless, her testimony shows that she entered into a contract with Mr. Patten the objective of which was illegal.

Ms. Raddatz disputes this analysis by claiming their relationship was more than an agreement for sex. Mr. Patten’s testimony is far from supportive and her contention is substantially contradicted by her own testimony. In opposing a motion for summary judgment, the “non-moving party must set forth specific facts and cannot simply rely upon their pleadings, nor upon speculative, fanciful, or conclusory statements.” Thomas v. Hale (1990), 246 Mont. 64, 67, 802 P.2d 1255, 1257 (citing Simmons v. Jenkins (1988), 230 Mont. 429, 432, 750 P.2d 1067, 1069). The record overwhelmingly supports the premise that sex for money was the primary purpose of the agreement.

Ms. Raddatz then attempts to argue her mental capacity to form the intent to commit the offense of criminal possession of drugs is also a disputed issue of fact. She claims that Mr. Patten had such control over her that she was incapable of voluntarily consenting to take the drugs Mr. Patten gave to her. She merely did as she was told.

A person commits the offense of criminal possession of drugs under § 45-9-102, MCA, if he possesses any dangerous drug. Possession is defined as “the knowing control of anything for a sufficient time to be able to terminate control.” Section 45-2-101(52), MCA. A person acts knowingly “when the person is aware of that person’s own conduct or that the circumstance exists.” Section 45-2-101(33), MCA.

Here, Ms. Raddatz testified that she took the drugs as a term of her and Mr. Patten’s agreement. Prior to meeting Mr. Patten, Ms. Raddatz’s psychiatrist prescribed tranquilizers for her. Further evidence shows, during her involvement with Mr. Patten, she asked for and was prescribed by her doctor tranquilizers and sleeping pills over twenty-five different times. Clearly, the evidence submitted by Ms. Raddatz shows that she knew what she was taking and the consequences thereof. Ms. Raddatz’s own testimony establishes there is no issue of material fact.

The District Court found the Pattens entitled to judgment as a matter of law because Ms. Raddatz’s recovery for negligence was barred under the doctrine of in pari delicto.

Ms. Raddatz attempts to argue there is no rational nexus between the illegal agreement of the parties and the giving of prescription drugs. Under her own testimony, Ms. Raddatz took the drugs because Mr. Patten wanted her to be relaxed yet awake when he required her services. It is apparent that the giving of prescription drugs was a significant part of the illegal agreement.

Ms. Raddatz further contends that the doctrine of in pari delicto does not apply here because, under Waller, we concluded that conduct which is not strongly condemned by public policy as a matter of serious criminal conduct or delinquency may not be sufficient to bar recover. Waller, 227 Mont. at 476, 741 P.2d at 389. We also held, in such a case, the courts should inquire into the relative delinquency of the parties and administer justice between them. Ms. Raddatz alleges Mr. Patten’s conduct was more egregious than her own because he was the one who initiated the relationship. Furthermore, Ms. Raddatz claims Mr. Patten actually distributed the prescription drugs in violation of § 45-9-101, MCA. She merely took them.

We conclude that Montana Law, as a matter of public policy, strongly condemns prostitution as herein described as well as the illegal use of drugs in the course of such prostitution; and, therefore, conclude that participation in such conduct bars recovery by Ms. Raddatz. In addition, we conclude that the delinquency of both parties is sufficiently comparable to bar recovery in negligence by either party under the doctrine of in pari delicto.

We hold that the District Court did not err when it granted summary judgment on Ms. Raddatz’s counterclaim of negligence in favor of the Pattens.

II.

Did the District Court err when it granted summary judgment on Ms. Raddatz’s claim of negligence per se in favor of the Pattens?

In our discussion of the first issue, we stated summary judgment is appropriate where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Furthermore, we concluded Ms. Raddatz produced no genuine issue of material fact. We so conclude on this issue as well.

We have held that negligence per se is composed of the following elements:

1. The defendant violated a particular statute;
2. The statute was enacted to protect a specific class of persons;
3. The plaintiff is a member of that class;
4. The plaintiff’s injury is the sort the statute was enacted to prevent; and
5. The statute was intended to regulate a member of defendant’s class.

Hislop v. Cady (1993), 261 Mont. 243, 247, 862 P.2d 388, 391.

The District Court ruled that Ms. Raddatz’s negligence per se claim was barred because she failed to allege any of the other elements necessary to sustain recovery under the doctrine of negligence per se. The court heard no evidence showing § 45-9-101, MCA, was enacted to protect a class of persons of which Ms. Raddatz belonged, nor was there evidence that her injury is the sort the statute was enacted to prevent.

Ms. Raddatz contends that the protected class is self-evident— those who are given prescriptive drugs without the benefit of having been prescribed those drugs by a medical doctor. This argument is thoroughly contradicted by the fact that Ms. Raddatz was prescribed the same drugs by her doctor, thus, receiving the benefit of his care. Ms. Raddatz’s legal argument is wholly insufficient. She is not entitled to a judgment as a matter of law.

We hold that the District Court did not err when it granted summary judgment on Phyllis Raddatz’s claim of negligence per se in favor of Harold and Betty Patten.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES NELSON and LEAPHART concur.

JUSTICE HUNT

specially concurring.

While I concur in the result reached by the Court, I take issue with the majority’s analysis which affirms the District Court’s application of the doctrine of in pari delicto but ignores a fundamental principle of that doctrine.

In Waller, we concluded that:

[Wlhere the offenses have involved criminal conduct or delinquency of which the law strongly disapproves as a matter of public policy, the parties are to be deemed equally guilty and the courts will not inquire further into their relative guilt.

Waller, 741 P.2d 389-90. Despite this prohibition against apportioning guilt, both the District Court and the majority go to great lengths to detail the criminal conduct and delinquencies of Ms. Raddatz while ignoring the criminal conduct and delinquencies of Mr. Patten that initiated and sustained an illicit 14-year relationship. The majority creates the impression that the only bad actor in this unfortunate relationship was Ms. Raddatz. The record, however, does not support this impression.

Once it is determined that the doctrine applies, both parties are deemed equally guilty, and both parties are barred from recovery. Because the parties are barred from recovery, there exists no genuine issue of material fact, and therefore, summary judgment is proper. There is no need to weigh the relative guilt of the parties, and there is certainly no need to create the impression that the guilt rests with one party.


author: JUSTICE HUNT

text:
    ROY A. BAXTER, Plaintiff and Appellant, v. ARCHIE COCHRANE MOTORS, INC., a Montana corporation, Defendant and Respondent.
    No. 94-561.
    Submitted on Briefs March 30, 1995.
    Decided May 23, 1995.
    52 St.Rep. 444.
    895 P.2d 631.
    271 Mont. 286.

      For Appellant: Phillip R. Oliver, Oliver, Graves, Toennis & Gustafson, Billings.
    For Respondent: Rodney T. Hartman, Herndon, Hartman, Sweeney & Halverson, Billings.
   JUSTICE HUNT

delivered the Opinion of the Corut.

Appellant Roy A. Baxter appeals from an order of the Thirteenth Judicial District Court, Yellowstone County, granting a new trial on the motion of respondent Archie Cochrane Motors, Inc., following a jury verdict and award in favor of appellant.

We reverse.

The dispositive issues on appeal are:

1. Did the District Court err in holding that a new trial was warranted on the cumulative affect of six errors, none of which individually warranted a new trial?

2. Did the District Court err in ordering sua sponte a new trial on its error on jury instructions when it did not allow appellant the opportunity for a hearing on the issue raised by the District Court?

In April 1992, respondent employed appellant as an automobile salesperson. On January 4,1993, respondent terminated appellant’s employment for “continued inability to correctly interact with team members and customers.” On August 18, 1993, appellant filed a wrongful termination action against respondent. The jury returned a verdict in favor of appellant and awarded him $120,000 in damages. On July 12, 1994, respondent filed a motion for a new trial or a judgment notwithstanding the verdict. On August 15, 1994, the District Court issued its order granting respondent’s motion for a new trial. It is from the District Court’s order that appellant appeals.

ISSUE 1

Did the District Court err in holding that a new trial was warranted on the cumulative effect of six alleged errors, none of which individually warranted a new trial?

The decision to grant or deny a new trial is within the sound discretion of the trial judge and will not be disturbed absent a showing of manifest abuse of that discretion. Jim’s Excavating Service, Inc. v. HKM Associates (1994), 265 Mont. 494, 511, 878 P.2d 248, 259.

A new trial may be granted for any of the reasons set forth in § 25-11-102, MCA, which materially affect the substantial rights of the aggrieved party. See Rule 59, M.R.Civ.P. Of the reasons set forth in § 25-11-102, MCA, respondent relied on the following:

(1) irregularity in the proceedings of the court, jury, or adverse party or any order of the court or abuse of discretion by which either party was prevented from having a fair trial;
(5) excessive damages appearing to have been given under the influence of passion or prejudice;
(6) insufficiency of the evidence to justify the verdict or other decision or that it is against law;
(7) error in law occurring at the trial and excepted to by the party making the application.

In its brief in support of its motion for a new trial, respondent alleged seven errors which, it argued, required the District Court to grant a new trial whether the errors were viewed individually or cumulatively. Specifically, respondent alleged that:

1. [Appellant’s] counsel mistakenly informed the jury during his opening statement that the Montana Constitution endowed [appellant] with a right to maintain employment;
2. [Appellant’s] counsel impermissibly argued his case in opening statement over [respondent’s] objection despite being admonished not to by the court;
3. [Appellant’s] counsel constantly treated witnesses in a argumentative style throughout the trial necessitating [respondent’s] counsel’s repeated objections which were regularly sustained, but left the jury as a result thereof overly sympathetic and prejudiced in [appellant’s] favor;
4. [Appellant’s] witness Carol Kuchera and [appellant’s] counsel wept during the trial in full view of the jury in an effort to inflame jury passion, prejudice, and sympathy;
5. [Appellant’s] counsel elicited testimony from witness Deb Allen that Chuck Gallacher’s bad language ceased or improved following the filing of this lawsuit which gave the jury the mistaken impression that [respondent] had thereby admitted liability in this case;
6. Despite several discussions concerning irrelevant and prejudicial “other wrongful termination cases,” and several successful objections to [appellant’s] attempts to introduce evidence of such, [appellant’s] counsel himself mentioned the Carol Kuchera case. That case has not been to trial. Carol Kuchera admitted under oath to resume fraud and job application fraud. The injection of her case into [appellant’s] case was prejudicial to the highest degree outweighing any possible probative value to the jury; and
7. There was absolutely no credible fact evidence or expert witness opinion evidence that supports the award to [appellant] by the jury of $120,000 in this case. The damage award is not supported by the evidence of the case.

The District Court concluded that while “items one through six of the things [respondent] complain [ed] of in his brief ... did occur ... [a]ny one or two of these irregularities probably d[id] not really justify a new trial. The District Court was unwilling to order a mistrial when the irregularities were addressed one by one at trial, but concluded that the cumulative effect of the irregularities exceeds the bounds of a fair trial.

Appellant argues that the District Court abused its discretion by granting respondent’s motion for a new trial because the errors either did not occur, were not errors, or even if they were errors, they were harmless and did not substantially affect respondent’s right to a fair trial. In addition, appellant argues that the District Court erred by concluding that the cumulative effect of six harmless errors prejudiced respondent’s right to a fair trial.

We agree with the District Court’s conclusion that the first six errors did not justify a new trial when considered individually. We also agree with the District Court’s refusal to conclude that the jury award in favor of appellant was error. However, we disagree with the District Court’s application of the doctrine of cumulative error in a civil case. To date, this Court has applied the doctrine of cumulative error exclusively in criminal cases. We decline to extend it to civil cases based on the facts of this case.

We conclude that the District Court erred in holding that a new trial was warranted on the cumulative affect of six errors, none of which individually warranted a new trial.

ISSUE 2

Did the District Court err in ordering sua sponte a new trial on its error on jury instructions when it did not allow appellant the opportunity for a hearing on the issue raised by the District Court?

We apply the same standard of review, manifest abuse of discretion, to Issue 2 that we applied to Issue 1.

In its order granting a new trial, the District Court concluded that “even though the parties did not complain or offer such an instruction, the Court should have more clearly instructed the jury concerning the elements necessary for plaintiff to prove in order to recover and/or the right defendant has in discharging employees for any job-related basis.”

While a district court may grant a motion for a new trial for a reason not set forth in the motion, it may do so only after giving the parties notice and an opportunity to be heard on the matter. Rule 59(e), M.R.Civ.P. Neither party objected to the jury instructions given by the District Court, nor did respondent raise this issue in its motion for a new trial. The issue of inadequate jury instructions was raised sua sponte by the District Court. Neither party received notice of this matter, and consequently neither party was given the opportunity to brief or argue the matter.

As a result, we conclude that the District Court erred in ordering a new trial on jury instructions without giving the parties notice and an opportunity to be heard.

We hold that the District Court’s decision to grant a new trial was a manifest abuse of discretion.

We reverse.

CHIEF JUSTICE TURNAGE, JUSTICES TRIEWEILER, GRAY, NELSON, WEBER and LEAPHART concur.