author: JUSTICE BARZ

text:
    JOSEPHINE M. BECK, Claimant and Respondent, v. FLATHEAD COUNTY, d/b/a Flathead County Nursing Home, Employer, and State Compensation Insurance Fund, Defendants and Appellants.
    No. 89-235.
    Submitted on Briefs Sept. 27, 1989.
    Decided Dec. 1, 1989.
    783 P.2d 383.

      Todd A. Hammer, Warden, Christiansen, Johnson & Berg, Kalispell, for defendants and appellants.
    Terry N. Trieweiler, Trieweiler Law Firm, Whitefish, for claimant and respondent.
   JUSTICE BARZ

delivered the Opinion of the Court.

Defendants, Flathead County and the State Compensation Insurance Fund, appeal the decisions of the Workers’ Compensation Court of the State of Montana, to forego a trial regarding whether claimant, Beck, had shown substantial credible evidence of a reduced earning capacity; to adopt the Findings of Fact and Conclusions of Law dated February 27, 1989; and to forego an evidentiary hearing regarding costs and attorney fees. We affirm.

Defendants raise the following four issues on appeal:

1. Whether the Workers’ Compensation Court erred by not making any additional findings or conclusions regarding claimant’s pre-injury and post-injury earning capacity.
2. Whether the parties’ stipulation regarding claimant’s permanent partial disability benefit rate was binding for subsequent proceedings.
3. Whether a court should consider claimant’s subsequent injury when considering her future earning capacity.
4. Whether the Workers’ Compensation Court erred by not holding an evidentiary hearing regarding costs and attorney fees.

Claimant, Josephine M. Beck, sustained a work-related, cervical injury on April 11, 1984 while working as a nurse’s aide at the Flathead County Nursing Home. On March 14, 1986, claimant filed a Petition for Hearing in the Workers’ Compensation Court of the State of Montana. A pretrial order was signed on May 14, 1986 by a hearing examiner, stating, as an uncontested fact, that “[c]laimant’s partial disability benefit rate is $126.61 . . .” After a May 21, 1986 hearing in front of a hearing examiner, the Workers’ Compensation Court adopted the hearing examiner’s proposed Findings of Fact, Conclusions of Law and Judgment. The court then entered a judgment stating that claimant was not entitled to permanent partial disability benefits under § 39-71-703, MCA.

Claimant appealed this ruling to the Montana Supreme Court, arguing that the Workers’ Compensation Court erred by determining that § 39-71-703, MCA, requires a claimant to prove an actual wage loss to collect permanent partial disability benefits. This Court reversed the Workers’ Compensation Court in Beck v. Flathead County (Mont. 1988), [230 Mont. 294,] 749 P.2d 527, 530, 45 St.Rep. 215, 219, stating that “[t]he correct test for loss of earning capacity is whether the injury has caused a loss of ability to earn on the open market.” Beck, 749 P.2d at 529, 45 St.Rep. at 217. This Court then remanded the case to the Workers’ Compensation Court with the directive to “determine whether claimant Beck [had] shown substantial credible evidence of a reduced earning capacity.” Beck, 749 P.2d at 530, 45 St.Rep. at 219.

The Workers’ Compensation Court initially issued an order scheduling a retrial. Claimant, however, filed a written objection, by letter, arguing that in Beck this Court remanded for the sole purpose of considering the previous Findings of Fact in light of the correct rule of law and not to issue new Findings of Fact. Claimant pointed out that neither party appealed from the original Findings of Fact and therefore argued that a new trial was neither necessary nor proper. Defendants, however, argued that it had a right to present additional evidence, in particular, evidence of an injury claimant sustained subsequent to the April 11, 1984 injury. On April 15, 1988, the Workers’ Compensation Court determined that in light of this Court’s decision in Beck, a new trial was not needed. The Workers’ Compensation Court then entered an order on February 27, 1989 adopting the hearing examiner’s Proposed Findings of Fact and Conclusions of Law, and entered an amended Judgment which stated that claimant had sustained a permanent partial disability and, under the correct rule of law, was entitled to disability benefits as agreed upon in the May 14, 1986 Pre-Trial Order.

On April 13, 1989, the court entered its Order awarding attorney fees and costs based upon the contingent fee agreement that existed between claimant and her attorney. On May 1, 1989, defendants filed its Notice of Appeal to the Montana Supreme Court.

The first issue raised on appeal is whether the Workers’ Compensation Court erred by not making any additional findings or conclusions regarding claimant’s pre-injury and post-injury earning capacity.

In Beck, we directed the Workers’ Compensation Court to “determine whether claimant Beck [had] shown substantial credible evidence of a reduced earning capacity.” Beck, 749 P.2d at 530, 45 St.Rep. at 219. In Conclusion of Law No. 2, dated February 27, 1989, the Workers’ Compensation Court concluded that claimant is permanently partially disabled as a result of her April 11, 1984 industrial accident. Under § 39-71-116(12), MCA, (1985), permanent partial disability is defined as:

“[a] condition resulting from injury as defined in this chapter that results in the actual loss of earnings or earning capability less than total that exists after the injured worker is as far restored as the permanent character of the injuries will permit . . .” (Emphasis added.)

As this Court held in Beck, the correct test for loss of earning capacity is whether the injury has caused “a loss of ability to earn on the open market.” Beck, 749 P.2d at 529, 45 St.Rep. at 217.

On review, this Court’s role is limited to whether substantial evidence supports the Workers’ Compensation Court’s findings and conclusions. Walker v. H.F. Johnson, Inc. (1978), 180 Mont. 405, 410, 591 P.2d 181, 184. The hearing examiner found that, based upon a vocational expert’s testimony, if claimant “had to leave her present position to take a lighter duty job, she would have a diminished earning capacity.” This Court has previously held that this sort of testimony is sufficient to establish loss of earning capacity. Hafer v. Anaconda Aluminum, Co. (1982), 198 Mont. 105, 111, 643 P.2d 1192, 1195-96; Walker, 180 Mont. at 411, 591 P.2d at 184. However, claimant’s own testimony and the testimonies of the examining physicians and vocational experts further support this finding. The court then entered an amended conclusion of law stating that claimant

“[r]eached maximum healing on May 8,1986. Returning to her employment as a nurse’s aide at Flathead County Nursing Home, she experienced myofascial pain, shoulder pain, and numbness in her hand, all of which are aggravated by her work.

“Claimant’s physicians have recommended certain work restrictions which are inconsistent with her current employment and once she leaves her current employment, she will be restricted in her ability to compete in her normal market.”

Defendants nonetheless attempt to argue that this Court “implicitly” directed the Workers’ Compensation Court to conduct an evidentiary hearing so that the Workers’ Compensation Court could make additional findings and conclusions regarding claimant’s preinjury and post-injury earning capacity and so that they could have their “day in court.” We disagree.

In Beck, we held that the Workers’ Compensation Court had to determine the threshold question of whether claimant had shown substantial evidence of a reduced earning capacity. The Workers’ Compensation Court determined, based upon the record, that claimant would have a diminished earning capacity as a result of her accident. The court does not need to conduct an additional evidentiary hearing because of defendants’ personal desire to have more specific and tailored findings, conclusions and comparisons. In addition, defendants have already had their day in court and thus have had a full and fair opportunity to introduce all evidence of claimant’s preinjury and post-injury earning capacity. An additional evidentiary hearing is neither necessary nor proper. First Bank-Billings v. Clark (Mont. 1989), [236 Mont. 195,] 771 P.2d 84, 92, 46 St.Rep. 291, 300; Harrington v. Montgomery Drug Co. (1941), 111 Mont. 564, 567-68, 111 P.2d 808, 810. Upon review of the record, we hold that substantial credible evidence supports the court’s finding and conclusion regarding the question of whether claimant had shown substantial credible evidence of a reduced earning capacity.

The question remained, however, what disability benefit rate the claimant should receive. Defendants therefore raise the issue of whether the parties’ stipulation regarding claimant’s permanent partial disability benefit rate was binding for subsequent proceedings.

The doctrine of res judicata bars this.Court from addressing this issue. This doctrine applies when a litigant has had the opportunity to litigate an issue but has not availed himself of the opportunity. The policy behind the doctrine of res judicata is to prevent piecemeal litigation and to accord finality as to all issues raised or which fairly could have been raised. O’Neal, Booth and Wilkes v. Andrews (1986), 219 Mont. 496, 499, 712 P.2d 1327, 1329; In re Estate of Pegg (1984), 209 Mont. 71, 78-79, 680 P.2d 316, 320; Wellman v. Wellman (1982), 198 Mont. 42, 45-46, 643 P.2d 573, 575-76.

As already noted, claimant appealed the initial decision of the Workers’ Compensation Court in 1987. In that appeal, claimant argued that under § 39-71-703, MCA, she was entitled to permanent partial disability benefits upon proof that she suffered a reduced earning capacity. Claimant also argued that substantial evidence did not support the Workers’ Compensation Court’s finding that she did not sustain permanent partial disability pursuant to § 39-71-703, MCA. In this second argument, claimant sets forth her testimony, and the testimonies of her physicians, her rehabilitation expert, and two vocational experts to illustrate that substantial evidence did not support the Workers’ Compensation Court’s finding that she did not sustain permanent partial disability. In addition, claimant argued in her brief that the defendants had stipulated to her permanent partial disability rate at $126.61 per week and that this stipulation was binding on the court. Defendants did not once rebut or mention this matter in their reply brief. Defendants failed to take the opportunity to litigate this matter in Beck, and cannot now expect to be allowed to bring up the issue now. Litigation regarding a matter must come to an end at some point. Defendants’ acquiescence on this matter in the first appeal bars them from raising it on this appeal.

The Beck decision, like other judgments, are “binding and conclusive between all the parties to the suit and their privies and successors in interest, as to all matters adjudicated therein and as to all issues which could have been properly raised irrespective of whether the particular matter was in fact litigated.” Orlando v. Prewett (Mont. 1989), [236 Mont. 478,] 771 P.2d 111, 113, 46 St.Rep. 520, 523 (quoting Kramer v. Deer Lodge Farms Co. (1944), 116 Mont. 152, 156, 151 P.2d 483, 484). We therefore hold that the doctrine of res judicata applies in this case and therefore bars defendants from asserting and arguing that the parties’ stipulation regarding claimant’s permanent partial disability benefit rate is not binding.

The next issue raised on appeal is whether a court should consider claimant’s subsequent injury when considering her future earning capacity.

In light of the determination that claimant had shown substantial credible evidence of a reduced earning capacity and also in light of the parties’ stipulation regarding claimant’s permanent partial disability benefit rate, this issue is now moot. Furthermore, the effect, if any, two separate injuries would have upon a claimant’s disability benefit rate would more appropriately be addressed at a hearing regarding the most recent injury. This Court therefore does not need to address on this appeal whether a court should consider a claimant’s subsequent injury when considering her future earning capacity.

The last issue raised on appeal is whether the Workers’ Compensation Court erred by not holding an evidentiary hearing regarding costs and attorney fees.

On April 13, 1989, the Workers’ Compensation Court issued an order setting attorney fees and costs. In this order, the court granted claimant’s costs in the amount of $2,727.86 and her attorney fees in the amount of $20,004.38, which were based upon the contingent fee agreement.

Defendants first note that they requested an evidentiary hearing regarding claimant’s attorney fees and costs. Defendants then argue that the Workers’ Compensation Court committed reversible error when it did not hold an evidentiary hearing on these matters. Defendants rely upon Honey v. Stoltze Land & Lumber Co. (Mont. 1989), [236 Mont. 86,] 769 P.2d 42, 46 St.Rep. 202, to argue that an evidentiary hearing must always be held when addressing attorney fees and costs — even in cases when an evidentiary hearing is not requested. We disagree.

In Honey, the claimant had a contingent fee agreement with his attorney. After successfully representing the claimant, the attorney claimed a much larger attorney fee than was due him in light of the contingent fee agreement. Under the contingent fee agreement, claimant’s attorney was entitled to $2,208.79. Claimant’s attorney submitted time records and an affidavit to support his claimed attorney fee of $9,443.50, but he then did not request an evidentiary hearing. The Workers’ Compensation Court nonetheless awarded attorney fees based on the contingent fee agreement. Honey, 769 P.2d at 43, 46 St.Rep. at 203-04. This Court then held that the facts in Honey demonstrated a need for an evidentiary hearing. Honey, 769 P.2d at 44, 46 St.Rep. at 205-06. The facts in Honey, however, are not analogous to the facts in the present case.

In the present case, defendants acknowledged that the contingent fee agreement controlled the award of attorney fees. Defendants’ arguments at the lower court, however, centered around whether the contingent fee rate should be 33% or 40%, and what constituted a valid pretrial settlement offer so as to determine the amount the percentage was to be based upon. Both of these issues are legal issues that do not require an evidentiary hearing.

Besides awarding claimant attorney fees based on the contingent fee agreement, the Workers’ Compensation Court also granted claimant’s costs in the amount of $119.11 for travel expenses, $50.00 for a medical conference, and $139.00 in printing costs, totaling $308.11. Defendants assert that these costs are not recoverable. Defendants further assert that this Court required the Workers’ Compensation Court to conduct an evidentiary hearing whenever it addresses attorney fees and costs. On the contrary, this Court in Wight v. Hughes Livestock Co. (1983), 204 Mont. 98, 664 P.2d 303, stated that “[i]n the rare case where an evidentiary hearing is necessary, the Workers’ Compensation judge shall extend opportunity for hearing . . .” Wight, 204 Mont. at 116, 664 P.2d at 313. The facts of this case do not warrant such a hearing.

We therefore hold that the Workers’ Compensation Court did not abuse its discretion in determining that an evidentiary hearing was not necessary in this case.

Affirmed.

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


source: Caselaw Access Project

author: JUSTICE HARRISON

license: Public Domain

text:
    In re the MARRIAGE OF SHARLENE H. GUCKEEN, Petitioner and Respondent, and TERRY H. GUCKEEN, Respondent and Appellant.
    No. 89-246.
    Submitted on Briefs Oct. 25, 1989.
    Decided Dec. 1, 1989.
    782 P.2d 1284.
    Howard F. Strause, Great Falls, for respondent and appellant.
    James D. Elshoff, Great Falls, for petitioner and respondent.
   JUSTICE HARRISON

delivered the Opinion of the Court.

Terry Guckeen appeals a judgment of the District Court of the Eighth Judicial District, Cascade County, Montana. The District Court ordered appellant to pay respondent Sharlene Guckeen $17,700 in back child support representing 118 months at $150/ month. We reverse the judgment and remand to the District Court for a rehearing.

Appellant presents a single issue for review.

Did the District Court err in declining to exercise its equitable powers when the parties have orally and in writing altered the terms of a sixteen-year-old divorce decree?

Terry and Sharlene Guckeen were divorced on March 6, 1972. The divorce decree awarded custody of the couple’s three minor children to Sharlene and ordered Terry to pay $150 per month in child support. (One of these children died in 1974.) Almost immediately after the divorce, Terry and Sharlene began living together and continued to live together until January of 1978. The parties stipulated that no support payments are due prior to July, 1978.

After the divorce, Terry and Sharlene had two more children: Brian, born December 18, 1974 and Brandon, born February 18, 1979. Except for a short period of time, Brian has always lived with his father and Brandon has always lived with his mother. No custody or support order has ever been sought with regard to these two children and neither Terry nor Sharlene has paid to or requested support from the other with regard to these two children.

On January 26, 1978, Terry and Sharlene entered into a written agreement that gave custody of the children mentioned in the divorce decree to Terry. The agreement also provided that Terry would never collect any child support payments from Sharlene.

In spite of the written agreement giving custody of the children to Terry, the parties made an oral agreement that the children could live with whichever parent they wished. Pursuant to that oral agreement, the children mentioned in the divorce decree have spent roughly equal time with each parent. Terry has made no support payments to Sharlene and Sharlene has not requested any support payments. Terry did make child support payments to the State of California through Cascade County when California sought recovery for Aid to Families of Dependent Children payments. The youngest child mentioned in the divorce decree reached majority on October 21, 1987.

On June 26, 1985, Sharlene filed a motion requesting a judgment against Terry for past due child support. A hearing was finally held on June 6, 1988. Based on the change in custody arrangements after the divorce decree, Terry sought to invoke the District Court’s equitable powers to estop Sharlene’s claim for back child support. In its February 16, 1989 Conclusions of Law, the District Court found that Terry had not done equity because he had not paid any support for his four children in the past sixteen years. Therefore the District Court held that Terry had attempted to invoke the District Court’s equity power with unclean hands and the District Court declined to exercise its equitable powers.

Appellant argues that the District Court should have granted him equitable relief because of this Court’s decisions in the following five cases: State ex rel. Blakeslee v. Horton (1986), 222 Mont. 351, 722 P.2d 1148; In re the Marriage of Cook (1986), 223 Mont. 293, 725 P.2d 562; In re the Marriage of Jensen (1986), 223 Mont. 434, 727 P.2d 512; In re the Marriage of Sabo (1986), 224 Mont. 252, 730 P.2d 1112; and In re the Marriage of Ryan (Mont. 1989), [239 Mont. 100,] 778 P.2d 1389, 46 St.Rep. 1543. We agree.

The above-mentioned cases illustrate the equitable exception to the general rulé that child support payments cannot be modified retroactively. Marriage of Ryan, 778 P.2d at 1390. The equitable exception arises when the parties by consent and conduct alter the terms of the original decree. Marriage of Sabo, 730 P.2d at 1114. In the instant case, the parties by consent and conduct altered the terms of the original decree. Terry had residential custody of and totally supported the children mentioned in the divorce decree approximately half of the time until they reached majority.

Where the parties have altered the original custody arrangements, equity functions to reconcile reasonable child support with actual residential custody. The above-mentioned cases clearly articulate the guidelines to be used in this reconciliation.

We reverse the judgment and remand to the District Court for rehearing consistent with this opinion.

CHIEF JUSTICE TURNAGE and JUSTICES BARZ, SHEEHY and McDONOUGH concur.


author: JUSTICE McDONOUGH

text:
    GRANT BAKER and Elma L. Baker, Plaintiffs and Appellants, v. ARTHUR L. BAILEY and Edna L. Bailey, Defendants and Respondents.
    No. 89-260.
    Submitted on Briefs Oct. 25, 1989.
    Decided Dec. 1, 1989.
    782 P.2d 1286.

      Rex Palmer, Missoula, for plaintiffs-appellants.
    David B. Cotner, Boone, Karlberg & Haddon, Missoula, for defendants-respondents.
   JUSTICE McDONOUGH

delivered the Opinion of the Court.

Grant and Norma Baker (Bakers) appeal from a judgment of the District Court of the Fourth Judicial District, Missoula County. The District Court, sitting without a jury, found the Bakers liable for breach of the covenant of good faith and fair dealing and further found their claims for damages arising out of breach of contract should not be fully granted. We reverse in part and affirm in part.

The issues on appeal are:

1. Whether the District Court erred when it found the Bakers in breach of contract and the implied covenant of good faith and fair dealing.
2. Whether the District Court erred when it found that the Bakers are limited to the recovery of less than one-half the sums claimed under the contract.
3. Whether the District Court abused its discretion when it found that both parties should be responsible for their own attorney fees.

In June of 1976, Arthur and Elma Bailey moved a mobile home onto property owned by their daughter and son-in-law. With their permission, the Baileys hooked onto the water line which serviced their daughter’s home and installed a pipeline which would provide water for their trailer.

Approximately six years later, in the spring of 1982, the Bailey’s daughter and son-in-law made the decision to sell their residence and the surrounding property. Because they were concerned about taking care of their parents, however, they transferred one acre of the property to the Baileys. This one acre surrounded the mobile home. The remaining property, consisting of forty-five acres, was sold to the Bakers.

In order to insure that the Bailey’s continued to have access to water, a Water Well Use Agreement was prepared. Mrs. Baker was concerned about future ownership of the one-acre plot. In particular, she was worried that “a bunch of hippies” would move in next to her and consequently she wanted some control over the type of person who may, in the future, buy the Bailey’s land. In order to address this concern, the well agreement specifically provided that the right to use water would only extend to the Baileys. In the event the Baileys conveyed the property, the Bakers were under no obligation to provide the new owners with water.

Despite the plain language used in the agreement, the Baileys believed that although not specifically set forth, the Bakers would transfer the right to use the water well to a subsequent “reasonable purchaser” of the Bailey property. The language of the agreement, according to testimony of both the Baileys and the Bakers, was included for the purpose of addressing Mrs. Baker’s concern over potentially undesirable neighbors. This purpose was not, however, articulated within the contract.

In addition to the water well use agreement, the Bakers, at the time of purchase, asked for and received a right of first refusal in the event the Baileys received an offer to purchase their property. If an offer was received, the Baileys were to notify the Bakers of the offer in writing. The Bakers would then have the opportunity to exercise their “right of first refusal” within fifteen days of the offer.

Following sale of the land, the Bakers and Baileys lived next to one another and in fact became friends. The Baileys, however, decided to move to Butte, Montana, in the spring of 1984. On June 30, 1984, they executed a standard form listing contract with a local realty company. Under the terms of the listing, the Baileys represented that the property would be sold with “shared well water.” Based upon the realtor’s valuation of the property with water, it was listed for $47,500.00.

Shortly after the decision was made to sell the property, the water system developed several problems. As a result of these problems pressure in the line was reduced and the Baileys were unable to obtain sufficient water to meet their needs. As a result, they found it necessary to bring water to their residence in plastic jugs.

The Bakers were not as significantly affected by the problems. The Bakers always had sufficient water. In fact, during the entire period the Baileys were deprived of water, the Bakers had enough water to irrigate their lawn. Despite the fact this use adversely affected the Baileys’ water supply, the Bakers refused to reduce their consumption. This problem persisted until August when the water system was finally repaired.

After the problems with the water well surfaced, the Bakers informed the Baileys that they would not share the water supply with any new purchaser. Consequently, the property would have to be sold without access to water from the well.

The Baileys searched for alternative-sources of water, but unfortunately none was available. They approached the Bakers and offered to purchase joint use of the well. This offer was refused.

Recognizing that they would not be able to provide water for the property, the Baileys realized that the property was virtually without value. They, therefore, agreed to sell it for $8,000.00, which was the fair market value of the trailer and other improvements on the land.

After the Baileys made the decision to accept the $8,000.00 offer, they gave the Bakers notice of its terms in compliance with the right of first refusal provisions in the contract. On August 20, 1984, the Bakers exercised their option and purchased the property for $8,000.00. The transaction was closed on September 10, 1984. At that time, the Bakers acquired the Baileys’ one-acre parcel which, if supplied with water, allegedly could be marketed for $40,000.00 — $47,500.00.

The Bakers then filed a lawsuit to recover for the value of a refrigerator and certain unpaid expenses which they felt were owed by the Baileys. The Baileys, on the other hand, counterclaimed and sought damages for breach of the Water Well Use Agreement. The District Court found the Bakers in breach of contract and in breach of the implied covenant of good faith and fair dealing. It also found the Baileys liable for less than one-half of the electrical expenses of the well. Following this judgment, the Bakers appealed the lower court’s findings in regard to their liability for breach of contract and the Baileys’ limited liability for expenses incurred on the water well.

I

The facts of this case present a classic parol evidence problem. The parol evidence rule, briefly stated, requires that in the absence of fraud, duress, or mutual mistake, all extrinsic evidence must be excluded if the parties have reduced their agreement to an integrated writing. Under this rule, all prior and contemporaneous negotiations or understandings of the contract are merged, once that contract is reduced to writing. Williston on Contracts, Third Edition § 631.

As this case illustrates, application of the rule can work to create harsh results. However, the policies behind the rule compel its consistent, uniform application. Commercial stability requires that parties to a contract may rely upon its express terms without worrying that the law will allow the other party to change the terms of the agreement at a later date.

The Baileys maintain that all of the parties to the Water Well Use Agreement, shared a common understanding that the Bakers would continue to share the well water with subsequent purchasers provided that the purchasers were acceptable to the Bakers. This contention may be true; however it is not found within the terms of the contract.

The Water Well Use Agreement is very explicit concerning the rights and obligations of the parties. Its terms provide: “it being specifically understood that this Agreement is solely for the benefit of [the Baileys] and shall terminate in the event [the Baileys] no longer occupy [the land].” It further provides that “it is the intent of the parties to fully set forth their understanding concerning the utilization of the domestic water supplies for the respective tracts . . .” There are no terms within the contract which state that the Bakers will provide water to subsequent “reasonable” purchasers.

Therefore, the fact there may have been further oral understandings between the parties is not admissible. The language of the Water Well Use Agreement is clear. Where the language of a written contract is clear and unambiguous, there is nothing for the court to construe. Rather, the duty of the court is simply to apply the language as written to the facts of the case and decide the case accordingly. The lower court’s reliance upon evidence of the parties’ oral negotiations was therefore in error, and there was no breach of contract.

In order to prove that a party acted unreasonably in violation of the implied covenant of good faith and fair dealing, one must show as an element there was a breach of the express terms of the contract. Nordlund v. School District (1987), 227 Mont. 402, 44 St.Rep. 1183, 738 P.2d 1299, [6 Ed. Law 179]. We have concluded that the Bakers did not breach the terms of the Water Well Use Agreement and accordingly, there was no violation of the covenant of good faith and fair dealing even if all other elements of the violation were met.

II

At trial, the Bakers, like the Baileys, sought damages for breach of the Water Well Use Agreement. They maintained that the Baileys failed to pay one-half of the electrical and maintenance expenses of the well. The Baileys, on the other hand, argued that they only owed the Bakers for electrical expenses incurred during the months of September through May of 1984.

The Water Well Use Agreement specifically provided that the two parties would equally share all of the electrical bills and maintenance expenses incurred through their joint use of the pump. The sum of the electrical expenses attributable for the year preceding the sale of the property is $218.03. The total cost of repairs on the pump equaled $1,572.85. Bakers maintain that pursuant to the terms of the contract the Baileys are responsible for one half of these expenses, or $895.42.

The Baileys maintain that they are only liable for the electrical expenses incurred through the operation of the pump for the months of September 1983 through May of 1984. During the months of June, July and August, 1984, the water system was not in working order and consequently the Baileys were deprived of water. The Baileys maintain, and the lower court agreed, that this deprivation was a partial failure of consideration and that as a result the Baileys would be excused from their duty to pay their share of the electrical expenses due under the contract for the months of June, July and August.

The lower court also held that the Baileys did not owe the Bakers any money for the expenses incurred through the repair of the water line. The repair expense was incurred after the Bakers were notified of their right to exercise their option to purchase the property. Four days after completion of the work, the Bakers exercised the right and purchased the property. The District Court therefore found that all benefit derived from the repairs was realized by the Bakers, and, accordingly, the Baileys had no responsibility to pay a portion of the repair expense.

The District Court found the Baileys were only liable for expenses incurred by the Bakers for electricity which operated the pump during the months of September through May. The amount owed by the Baileys equaled $60.00. However, the court also found, and the Bakers admit, that the Bakers owed the Baileys $225.00 for propane which was left on the property after it was sold. Therefore, the amount owed by the Bakers to' the Baileys, was offset by the $60.00 owed on the Water Well Use Agreement. Accordingly, the Bakers owed the Baileys $165.00 and the Baileys owed nothing under the contract.

We find the District Court’s findings on this issue were reasonable and were not an abuse of discretion. They were supported by the evidence and, thus, on this issue the lower court is affirmed. Let the judgment be entered accordingly for $165.00.

Ill

As a final issue, the Bakers assert that the lower court erred by not awarding them attorney fees. In Montana the general rule is that attorney fees are awarded only where a statute or contract provides for their recovery. Northwestern National Bank of Great Falls v. Weaver-Maxwell, Inc. (1986), 224 Mont. 33, 43 St.Rep. 1995, 729 P.2d 1258.

The Water Well Use Agreement provided that “. . . in the event of litigation . . . reasonable attorney fees may be awarded . . .” (Emphasis added.) The lower court determined that the term “may” allowed it to award attorney fees in its discretion. Since both parties were successful in the lawsuit, it declined to award fees to either party.

The District Court correctly construed the terms of the agreement. The contract by its terms left the award of fees to the discretion of the court. The fact that the Bakers were partially unsuccessful in their claims against the Baileys does not support an award of attorney fees. The judgment of the lower court is therefore reversed and remanded for proceedings consistent with this opinion.

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


author: JUSTICE SHEEHY

text:
    The FEDERAL LAND BANK OF SPOKANE, Plaintiff and Respondent, v. DON AND MARY LEE REILLY, Defendants and Appellants.
    No. 89-320.
    Submitted on Briefs Sept. 27, 1989.
    Decided Dec. 1, 1989.
    Rehearing Denied Jan. 5, 1990.
    783 P.2d 917.
    Don Reilly and Mary Lou Reilly, Hamilton, pro se.
    W. Arthur Graham, Graham & Reep, Missoula, for plaintiff and respondent.
   JUSTICE SHEEHY

delivered the Opinion of the Court.

Federal Land Bank of Spokane (FLB) filed suit against Don Reilly and Mary Lou Reilly in District Court of the Fourth Judicial District, Ravalli County, for unlawful detainer and for possession of real property purchased by FLB at a nonjudicial foreclosure sale. The court adjudged Don and Mary Lou Reilly guilty of unlawful detainer, dismissed their counterclaims, and ordered them to surrender possession of the premises. Reillys appeal from that judgment. We dismiss the appeal because the issues stated by the Reillys on appeal relate to matters handled and decided by the Federal bankruptcy court. The state district court had no part in deciding those issues.

The issues raised by Reillys are:

1. Whether Federal bankruptcy law prohibited sale of the real property.
2. Whether Federal bankruptcy law removed the trustee of the deed of trust, thus rendering him powerless to proceed with the sale.
3. Whether the trial court erred in ruling the sale could proceed.

On February 18, 1977, Reillys executed a promissory note, secured by deed of trust, to Federal Land Bank of Spokane for the purchase of a ten acre parcel in Ravalli County, Montana. The loan was in the amount of $48,000, with annual installments of $4,466.04 due on February 1 of each year until the year 2007.

Reillys defaulted on their obligation by failing to make the February 1, 1985 and the February 1, 1986 annual installments. In addition, Reillys were also in default for failing to pay taxes on the property amounting to $1,938.40.

On January 2, 1986, Reillys filed a Chapter 11 bankruptcy petition with the United States Bankruptcy Court for the District of Montana. On April 2, 1986, FLB filed a motion for relief from the automatic stay of bankruptcy. The court granted relief on August 8, 1986, thereby allowing FLB to foreclose on the deed of trust. On March 13, 1987, Farm Credit Bank of Spokane (successor by merger to the FLB), purchased the property at a nonjudicial trustee’s sale.

Reillys filed an action and sought a preliminary injunction in the Bankruptcy Court in February of 1987, alleging that the deed of trust on the property was void, due to an error in the legal description. The Bankruptcy Court dismissed the complaint on October 13, 1987, ruling that the parties intended to transfer a valid security interest in the property, and that the error was not fatal to its validity.

Reillys appealed to the U.S. Bankruptcy Appellate Panel. The appeal was referred to the U. S. District Court of Montana, Judge Hatfield presiding. The appeal was dismissed with prejudice on April 27, 1988, and the stay pending appeal lifted.

On May 4,1989, Reillys were served with a notice of termination of tenancy at will and notice to quit. Reillys continued in their occupation of the premises.

On June 9, 1988, on the motion of creditors, the Chapter 11 case was converted to a Chapter 7 case, despite objection by Reillys.

On June 10, 1988, Reillys were served by FLB with a notice of unlawful detainer and notice to quit. Reillys continued to maintain possession of the premises.

Accordingly, FLB filed a complaint with the District Court of Ravalli County on July 8, 1988, alleging wrongful detainer and seeking possession of the property. FLB moved for summary judgment. Reillys moved for dismissal and filed a counterclaim, alleging fraud, bad faith, breach of fiduciary duty, tortious interference with contract, and material misrepresentation.

The District Court, Judge Harkin presiding, stated in its memorandum and order of March 3, 1989, that Reillys’ assertions that the foreclosure sale was improper was not substantiated by facts. As to the counterclaim, the court determined that it had no jurisdiction to determine the merits of the counterclaim, as the Reillys no longer had standing as Chapter 7 debtors. The Reillys appealed to this Court.

The Reillys raise issues which are based solely on bankruptcy law. The issues raised were previously decided by the United States District Court or are ones which should be decided by the federal courts. Under 28 U.S.C. § 1334, the United States District Court (including the U.S. Bankruptcy Court) has original and exclusive jurisdiction of matters arising under Title 11 of the United States Code.

In addition, Reillys are collaterally estopped from raising the issues on appeal, as the parties, subject matter, issues, and capacities of the parties are the same throughout the bankruptcy and the District Court proceedings in this matter. Stapleton v. First Security Bank (1983), 207 Mont. 248, 258, 675 P.2d 83, 88. Questions regarding the automatic stay and FLB’s right to foreclosure have been decided by the Bankruptcy Court and on appeal to the United States Appellate Courts for the Ninth Circuit. Collateral estoppel was designed to prevent just this type of prolonged and repetitive litigation.

Accordingly, the appeal is dismissed. The Bank has asked for damages under Rule 32, M.R.App.P. We determine no useful purpose would now be served in awarding damages in view of this dismissal. Costs to the Bank.

CHIEF JUSTICE TURNAGE and JUSTICES BARZ, WEBER and HUNT concur.


text:
    LAINE P. CARROLL, Claimant and Appellant, v. WELLS FARGO ARMORED SERVICE CORPORATION, Employer, and CNA Insurance Company, Defendant and Respondent.
    No. 89-335.
    Submitted on Briefs Oct. 20, 1989.
    Decided Dec. 1, 1989.
    783 P.2d 387.

      Eric B. Thueson, Thueson Law Office, Helena, for claimant and appellant.
    Larry W. Jones, Garlington, Lohn & Robinson, Missoula, for defendant and respondent.
   JUSTICE HARRISON

delivered the Opinion of the Court.

Claimant Laine Carroll appeals a decision of the Workers’ Compensation Court wherein the Workers’ Compensation Court awarded claimant 175 weeks of partial disability benefits. As part of its decision the Workers’ Compensation Court denied several of claimant’s requests including the following: (1) denial of a lump sum advance; (2) denial of payment of certain medical expenses; (3) denial of request to include overtime hours as part of wage calculation; and (4) denial of attorney’s fees and costs. We affirm in part, reverse in part, and remand to the Workers’ Compensation Court.

Claimant presents four issues for review:

1. Did the Workers’ Compensation Court err because it failed to discuss the factors that must be evaluated when determining a claimant’s disability factor under §§ 39-71-705, -708, MCA (1985)?
2. Did the Workers’ Compensation Court err by not including claimant’s overtime hours in determining his pre-injury wages?
3. Did the Hearings Examiner err by not requiring the defendant to pay certain medical expenses?
4. Did the Workers’ Compensation Court err in holding that § 39-71-612, MCA (1985), controlled the determination of attorney’s fees rather than § 39-71-611, MCA (1985)?

On November 15,1985, claimant injured his back during the course and scope of his employment as an armored car driver for Wells Fargo. Defendant initially accepted liability for claimant’s injury and paid temporary total disability benefits and medical benefits. In a letter dated June 22, 1987, defendant offered to settle claimant’s case for $30,317.58, representing 170 weeks of permanent partial disability benefits at the rate of $142.67 per week plus $6,063.48 in attorney’s fees. Defendant stated in the letter that the offer was good for fifteen days. The Pretrial Order discloses that as of the hearing date, December 14, 1987, defendant had taken the position that claimant was not entitled to any indemnity benefits.

At trial the Hearings Examiner heard the claimant’s testimony and testimony from two vocational rehabilitation experts. Also part of the record are various depositions including depositions of medical doctors who had treated or examined the claimant.

At the time of trial the claimant was 27 years old. He had a high school education and his work history included work as a gas station attendant, dishwasher, construction helper, and armored truck driver. At the date of his injury, claimant earned $5.35 per hour. It was undisputed that the claimant could not return to his former employment and that he is now limited to light or sedentary jobs that have starting wages of $3.50 to $4.50 per hour. Other facts will be discussed as necessary.

I.

Did the Workers’ Compensation Court err because it failed to discuss the factors that must be evaluated when determining a claimant’s disability factor under §§ 39-71-705, -708, MCA (1985)?

This Court’s task in reviewing a Workers’ Compensation Court decision is to determine whether substantial evidence supports the Workers’ Compensation Court’s findings of fact and conclusions of law. Coles v. Seven Eleven Stores (1985), 217 Mont. 343, 347, 704 P.2d 1048, 1050.

It is well established that §§ 39-71-705, -708, MCA (1985), permanent partial disability benefits indemnify the claimant for possible loss of future earning capacity. McDanold v. B.N. Transport, Inc. (1984), 208 Mont. 470, 476, 679 P.2d 1188, 1191. Also well established are the factors the court must consider in determining a claimant’s disability under §§ 39-71-705, -708, MCA (1985). The court must consider the claimant’s age, education, work experience, pain and disability, actual wage loss, and loss of future earning capacity, Holton v. F.H. Stoltze Land and Lumber Co. (1981), 195 Mont. 263, 266, 637 P.2d 10, 12. The Conclusions of Law recognized these factors.

After stating the appropriate standard for a §§ 39-71-705, -708, MCA (1985), disability determination, the court set forth its rationale for its conclusion that claimant was 35% disabled. Appellant argues that the court’s legal conclusion that the claimant is 35% disabled is flawed because the rationale does not reflect how,’ or even if, the court considered the above mentioned factors in reaching its decision. We agree.

As mentioned, case law interpreting §§ 39-71-705, -708, MCA, requires that the court consider a claimant’s age, education, work experience, pain and disability, actual wage loss and possible loss of future earning capacity. Based on the court’s discussion, the only apparent consideration made by the court in determining claimant’s disability was pre-injury versus post-injury earnings. Although the court listed the appropriate factors, it discussed only actual wage loss. The court’s opinion contains no discussion of how any of the other factors weighed in its decision that claimant is 35% disabled, which nearly approximates claimant’s actual wage loss. Thus, on its face, the court’s decision reads like a permanent partial disability determination under § 39-71-703, MCA (1985), which does look only to actual diminution in wages as the basis upon which benefits are determined. Because the court only discussed the claimant’s actual wage loss and failed to discuss any of the other criteria, we hold that the court’s decision is not supported by substantial evidence.

Respondent asks us to adopt its version of what the Hearings Examiner must have thought in reaching his decision. Similarly, claimant asks us to adopt his version of what the Hearings Examiner should have thought and increase the compensation award, However, this Court cannot second guess how the Workers’ Compensation Court must have arrived at its decision or dictate what decision it should have made.

Both respondent and claimant supplied this Court with Workers’ Compensation Court decisions. A review of the cases decided under §§ 39-71-705, -708, MCA (1985), reveal in all some discussion of the necessary factors. Such a discussion is required so that the reviewing court can ascertain that all of the factors were indeed considered and discern the court’s rationale. In the instant case the opinion discussed only the actual wage loss factor and none of the other mandatory considerations. We vacate the Workers’ Compensation Court’s award under §§ 39-71-705 -708, MCA. (1985), and remand to the Workers’ Compensation Court for a redetermination of benefits consistent with the requirements of §§ 39-71-705, -708, MCA (1985).

II.

Did the Workers’ Compensation Court err by not including claimant’s overtime hours in determining his pre-injury wages?

Generally, overtime earnings are not included in determining a claimant’s “usual hours of employment.” Coles v. Seven Eleven Stores (1985), 217 Mont. 343, 348-49, 704 P.2d 1048, 1052. “However, if the work record shows that the employer hired the claimant expecting overtime work and the claimant actually worked overtime on a consistent, regular basis . . . then that overtime becomes part of the usual hours of employment.” Coles, 704 P.2d at 1052. In Coles, the claimant worked overtime in each of the weeks she worked at the Seven Eleven store.

Claimant contends that the Workers’ Compensation Court erred by not including overtime hours in his pre-injury wages because he worked overtime in 24 of the 48 weeks preceding his injury. Thus, claimant contends that his case falls within the Coles decision on overtime and that the Workers’ Compensation Court’s decision is not supported by substantial evidence. We disagree.

As the Workers’ Compensation Court found, the claimant did not receive overtime wages for 21 weekly pay periods prior to his injury. In other words, claimant had not worked overtime in the five months preceding his injury. The record contains no other evidence of any overtime claimant worked. On its face claimant’s overtime hours do not approach the standard of a “consistent, regular basis” set in Coles. We hold that the Workers’ Compensation Court’s decision not to include overtime hours in determining pre-injury wages is supported by substantial evidence.

III.

Did the Hearings Examiner err by not requiring the defendant to pay certain medical expenses?

Claimant received medical treatment from Dr. Baggenstos for which defendant refused to pay. Defendant refused to pay Dr. Baggenstos’ costs because neither did claimant’s treating physician refer claimant to Dr. Baggenstos nor did defendant authorize Dr. Baggenstos’ visit.

Montana law specifically requires either a referral from a claimant’s treating physician or an authorization by the insurer before an insurer will be liable for medical treatment expenses. Garland v. The Anaconda Co. (1978), 177 Mont. 240, 581 P.2d 431. Claimant’s visit to Dr. Baggenstos was clearly unauthorized under Montana law, even though claimant felt he had good reason for his actions. We affirm the Workers’ Compensation Court’s decision disallowing payment of Dr. Baggenstos’ medical costs.

IV.

Did the Workers’ Compensation Court err in holding that § 39-71-612, MCA (1985), controlled the determination of attorney’s fees rather than § 39-71-611, MCA (1985)?

Workers’ Compensation statutes provide two methods of determining attorney’s fees. Section 39-71-611, MCA (1985), applies when an insurer denies liability while § 39-71-612, MCA (1985), applies when an insurer accepts liability but disputes the amount of compensation due the claimant. Hartman v. Staley Continental (Mont. 1989), [236 Mont. 141,] 768 P.2d 1380, 46 St.Rep. 248. If the court awards more compensation than the defendant has offered, then attorney’s fees are based on the difference. If the court awards less compensation then no attorney’s fees are due.

The Workers’ Compensation Court awarded attorney’s fees to claimant pursuant to § 39-71-612, MCA (1985), and ordered claimant to submit his attorney’s fees request. Defendant disputed attorney’s fees and moved for summary judgment which the Workers’ Compensation Court granted. The Workers’ Compensation Court held that claimant was not entitled to attorney’s fees because the court-awarded indemnity benefits ($24,967.25 + $235.41 for attorney’s fees) were less than the defendant’s pretrial settlement offer ($30,317.58).

Claimant contends that defendant denied liability and that the Workers’ Compensation Court erred in not applying § 39-71-611, MCA (1985). In both its pretrial order and its proposed findings of fact and conclusions of law, defendant asserted that the claimant was not entitled to any permanent partial disability benefits. Claimant argues that under our Hartman holding these assertions constitute a denial of liability regardless of any pretrial settlement offer. We agree.

The Hartman case is directly analogous to the instant case. In Hartman, the defendant made a pretrial settlement offer but asserted in its pretrial order and proposed findings and conclusions that the claimant was not entitled to any permanent partial disability benefits. Similar to defendant in this case, the Hartman defendant argued that § 39-71-612, MCA (1985), applied because it was not denying liability but merely disputing the amount of compensation. We found that the record, in which defendant steadfastly claimed that claimant was entitled to nothing, did not support defendant’s assertion that it was only disputing the amount of compensation. Hartman, 768 P.2d at 1385.

The same reasoning applies to the instant case. If defendant were merely disputing the amount of compensation, then defendant would acknowledge that claimant was entitled to permanent partial disability benefits. See, Lamb v. Missoula Imports, Inc. (Mont. 1988), [230 Mont. 183,] 748 P.2d 965, 45 St.Rep. 127. To the contrary however, here defendant denied that claimant was entitled to compensation. In other words, defendant denied any liability for permanent partial benefits. We hold that claimant’s attorney’s fees are to be determined under § 39-71-611, MCA (1985).

We remand to the Workers’ Compensation Court for a determination of indemnity benefits and attorney’s fees in accordance with this opinion.

CHIEF JUSTICE TURNAGE and JUSTICES HUNT, SHEEHY, McDONOUGH, WEBER and BARZ concur.


text:
    SHERRI LENORE TAPPAN, Plaintiff and Respondent, v. JEFFERY C. HIGGINS, Defendant and Appellant.
    No. 89-342.
    Submitted on Briefs Aug. 31, 1989.
    Decided Dec. 1, 1989.
    783 P.2d 396.

      JUSTICES GULBRANDSON and McDONOUGH concurred in the result.
    Stephen C. Berg, Warden, Christiansen, Johnson & Berg, Kalispell, for defendant and appellant.
    David W. Lauridsen, Bothe & Lauridsen, Columbia Falls, for plaintiff and respondent.
   JUSTICE SHEEHY

delivered the Opinion of the Court.

Defendant, Jeffery C. Higgins, appeals an order of the Flathead County District Court granting a new trial to the plaintiff, Sherri Lenore Tappan. In a personal injury action, the jury found in favor of the plaintiff in the amount of $3,450.00. Plaintiff moved for a new trial on the ground of inadequacy of damages and the trial court granted the motion. Defendant now appeals the District Court order. We affirm.

The sole issue on appeal is: Whether the District Court abused its discretion in granting Tappan’s motion for a new trial.

On July 29,1986, Tappan and Higgins were involved in an automobile accident on Highway 93 near Whitefish, Montana. Tappan’s vehicle was struck from behind by Higgins’ vehicle while Tappan attempted to make a left hand turn. Tappan’s vehicle sustained approximately $5,000.00 in damages and was totaled. In addition, Tappan sustained neck injuries.

Tappan sued Higgins in District Court for damages consisting of medical expenses, lost past and future income, and general damages. In the pretrial order, defendant Higgins admitted negligence. The case went to trial on the issues of proximate cause and plaintiff’s damages.

In closing argument, Tappan’s counsel asked the jury to award $15,118.53 in past wage loss, $400.00 in miscellaneous expenses, $51,870.00 in future wage loss, $4,385.59 in past medical expenses, and $15,000.00 each for pain and suffering and loss of enjoyment of life, for an approximate total of $100,000.00. Higgin’s counsel advised the jury to award $6,300,00 of past wage loss, nothing for future wage loss, $400.00 for miscellaneous expenses, and an unspecified amount for pain and suffering and loss of enjoyment of life.

The jury returned the verdict for Tappan in the amount of $3,450.00, allocating $2,400.00 to past wage loss, $200.00 for miscellaneous expenses, and $850.00 for past medical expenses.

Tappan moved the court for a new trial pursuant to § 25-11-102(6), MCA, for insufficiency of the evidence to justify the verdict. The District Court granted Tappan’s motion.

Higgins argues on appeal that the District Court abused its discretion in ordering a new trial because there was substantial credible evidence in the record supporting the jury’s verdict. Tappan contends that the jury overlooked the overwhelming evidence of her damages, and the judge properly granted her a new trial.

In granting Tappan’s motion for a new trial, the District Court found the verdict was not supported by the evidence pursuant to Rule 59(a), M.R.Civ.P., and § 25-11-102(6), MCA.

The decision to grant or deny a new trial is within the sound discretion of the trial court, Fredericksen v. Fredericksen (1980), 185 Mont. 548, 605 P.2d 1135, 1137, and will not be overturned absent a showing of manifest abuse of that discretion. Giles v. Flint Val. Forest Products (1979), 179 Mont. 382, 387, 588 P.2d 535, 538; Walter v. Evans Products Company (1983), 207 Mont. 26, 31, 672 P.2d 613, 616. This Court recognizes that only in rare cases should a jury verdict be set aside and a new trial granted. Nevertheless, though the amount is solely within the province of the jury, the jury is not given carte blanche. Sanders v. Mount Haggin Livestock Co. (1972), 160 Mont. 73, 89, 500 P.2d 397, 406. Some substantial evidence must exist to support the jury verdict. Maykuth v. Eaton (1984), 212 Mont. 370, 373, 687 P.2d 726, 727.

In Maykuth, the District Court held insufficient as a matter of law a $700.00 award for pain and suffering. We reversed the holding:

“To permit the undoing of this verdict by affirming the trial court decision granting a new trial, would in the language of Nelson v. Hartman (Mont. 1982), 648 P.2d 1176, 1179 ‘. . . create a bench supremacy and sap the vitality of jury verdicts.’ While the trial court, or this Court sitting as a jury, or another jury, may have awarded plaintiff more for pain and suffering in the year following the accident, we cannot say as a matter of law that substantial evidence did not support the jury’s award.”

Maykuth, 687 P.2d at 727; Walls v. Rue (Mont. 1988), [233 Mont. 236,] 759 P.2d 169, 171.

In contrast, this Court has held that a jury’s failure to award damages for pain and suffering constituted an inadequate award where “the evidence clearly indicates that plaintiff suffered serious and painful injury.” Gehnert v. Cullinan (1984), 211 Mont. 435, 439, 685 P.2d 352, 354.

Tappan contends that in this case, as in Gehnert, the jury failed to award the proper amount of damages when the evidence has clearly showed injury due to defendant’s conduct. Higgins responds that the jury’s failure to award greater damages resulted from his attacks on the credibility of Tappan and the certainty of her evidence. Higgins argues that there is substantial credible evidence to support the jury verdict. To resolve this issue, a review of the medical evidence and Tappan’s employment history is necessary.

Immediately after the collision, Tappan felt pain in her neck and several minutes later felt numbness in both upper extremities. An ambulance transported Tappan to North Valley Hospital where she was treated by Dr. Ricker. He X-rayed her cervical spine and found nothing broken. Dr. Ricker told Tappan she would be sore and advised her to obtain a cervical collar and take medication if necessary.

Tappan missed work the next day in that she could not raise her head off her pillow due to intense neck pain. She returned to work the next day in the belief that her symptoms would subside; however, the symptoms persisted and she was then seen by a Dr. Heaps, a Kalispell chiropractor.

Tappan initially saw Dr. Heaps on August 18, 1986. The doctor took Tappan off work from August 21, 1986 until September 22, 1986. Dr. Heaps testified that he took X-rays on August 18, 1986, and on January 8, 1988. The X-rays showed a mild scoliosis and he diagnosed nerve root irritation and a sprain of the cervical and lumbosacral area. Dr. Heaps treated her with spinal manipulation. The doctor’s charges for treatment to Tappan were $1,309.50.

Dr. Stevens first saw Tappan on March 10, 1987, and obtained a history identifying her problems dating back to the automobile accident on July 29, 1986. Dr. Stevens testified by deposition and opinion that the plaintiff suffered from post-traumatic muscle contraction headaches and myofacial pain syndrome. Myofacial pain syndrome is a reoccurrence of muscle pain triggered by spasms. Dr. Heaps agreed with Dr. Stevens’ diagnosis of myofacial pain syndrome.

Tappan’s injuries resulted in her inability to perform her job as bakery manager at Excel Foods. When the plaintiff attempted to perform her regular duties in the bakery, her pain increased and she went through a series of authorizations of absence from work at the direction of Dr. Heaps. After attempting to perform her full bakery manager duties properly for over one year, she terminated her employment with Excel Foods. After a series of unsuccessful jobs, plaintiff now works at Keenan’s Jewelry in Kalispell, Montana, earning $4.00 per hour.

The evidence presented at trial overwhelmingly shows that the plaintiff could no longer work at the bakery. Dr. Stevens was presented with two job descriptions detailing the plaintiff’s duties as a bakery manager and cake decorator, both of which he disapproved due to the lifting, bending and twisting requirements of those occupations.

Bob Markus, manager of Excel Foods, concurred with Dr. Stevens that Tappan could no longer perform her job at the bakery. Mr. Markus stated that the plaintiff’s work was satisfactory and she was able to perform her duties prior to the accident. Following the accident, however, Mr. Markus noted that the plaintiff did not look well and that she was occasionally tearful. Markus testified that Tappan was not able to physically perform her job following the automobile accident. Markus speculated that had Tappan been able to continue her job as bakery manager, she would be earning $10.50 per hour plus benefits as of the time of trial.

Both parties hired experts to determine Tappan’s wage loss. Dennis O’Donnell, an economics professor at the University of Montana, calculated Tappan’s past wage loss, including benefits, at $17,922.32, based upon a loss of $8,645.00 per year. Over a ten year period, Professor O’Donnell estimates Tappan economic loss is $100,598.00. The defense expert, Barbara Muellen, vocational rehabilitation consultant, opined that Tappan lost $1,654.75 in 1986 and $9,562.00 in 1987, for a total wage loss of $11,217,51. Thus the defendant’s own expert’s opinion of Tappan’s wage loss is approximately $8,800.00 more than the jury awarded Tappan in their verdict. Clearly the evidence at trial does not support a wage loss damage of only $2,400.00.

The jury awarded Tappan nothing for loss of future earnings or earning capacity. This portion of the verdict is also not supported by the evidence. Dr. Stevens testified that Tappan’s injury permanently excluded her from working as a cake decorator and bakery manager. Brian Holtslag, a vocational specialist, concluded at trial that Tappan could not continue in the bakery field due to the physical limitations imposed by Dr. Stevens. Her employer, Bob Markus testified that Tappan could now be earning $10.50 per hour or in excess of $1,700.00 per month. Tappan’s current employment at Keenan’s Jewelry pays Tappan $4.00 per hour. Though the evidence clearly supported future wage loss damages, the jury chose to grant the plaintiff nothing for the loss of earning capacity.

The jury awarded Tappan $850.00 in medical expenses. This reduced amount is unsubstantiated by the evidence. That evidence revealed that Tappan incurred $4,385.59 in medical expenses as a direct result of treatment related to injuries sustained in the accident. The evidence presented at trial justified a verdict for past medical expenses in excess of the $850.00 award.

The jury did not award damages for pain and suffering, nor for Tappan’s loss of the capacity to pursue an established course of life. In examining the pain and suffering of Tappan, it is once again clear that the jury disregarded the weight of the evidence presented at trial. Both Drs. Stevens and Heaps determined Tappan suffered from myofacial pain syndrome. Mr. Markus stated that he had observed Tappan in tears due to pain on several occasions following the accident. Dr. Heaps testified that he noted consistent spasms in Tappan’s neck, and the pain from these spasms played a role in removing Tappan from work and later limiting her to part-time work. This pain severely limited Tappan’s lifestyle, and changed her course of life.

While the evidence for pain and suffering is not as abundant as the evidence for loss of wages, there is substantial evidence to support a jury award greater than zero. The evidence presented at trial does support some award for pain and suffering.

The defense presented no medical testimony of its own, but instead attacked the plaintiff’s case by attempting to discredit Tappan herself. Higgins maintains that there is substantial credible evidence to support the jury verdict. Higgins contends, now, as he did in the District Court, that the question of Tappan’s pain and suffering rests on her credibility. Defendant argues that Tappan’s pain was subjective, and that her credibility regarding the amount of bending and lifting required by the bakery job was put into question by testimony of her former employer. While there is conflicting evidence in regard to job requirements at the bakery, the overwhelming evidence in the record supports the plaintiffs position that she can no longer work at the bakery.

Defendant also contends that Tappan saw no health care provider following the accident. According to Higgins, this allowed the jury to conclude that she was either not injured or her injury was slight. Furthermore, Higgins claims that Tappan aggravated her symptoms by returning to work against her doctor’s orders. Finally, the defendant argues that Tappan exaggerated her past and future wage loss. The jury, according to Higgins, chose to believe defendant’s expert witness on wage loss, and this is reflected in the verdict.

The defendant is correct in his assertion that the jury verdict is determined in large part by the credibility of the party and the witnesses. However, in this case, there are some glaring discrepancies in the amount of damages presented at trial and the verdict handed down by the jury aside from the credibility of any witness.

The District Court was correct in holding that the verdict was not supported by the evidence; in effect the evidence was insufficient to justify the verdict. Section 25-11-102(6), MCA. The District Court did not abuse its discretion in granting a new trial. We affirm the District Court.

CHIEF JUSTICE TURNAGE and JUSTICES HARRISON and HUNT concur.

JUSTICE WEBER did not participate.

JUSTICE GULBRANDSON concurred in the result.

JUSTICE McDONOUGH concurred in the result.


text:
    In re the MARRIAGE OF SHARON DARLENE GEBHARDT, Petitioner and Respondent, and LEROY GEBHARDT, Respondent and Appellant.
    No. 89-100.
    Submitted on Briefs Sept. 21, 1989.
    Decided Dec. 5, 1989.
    783 P.2d 400.

      Richard A. Reep, Graham & Reep, Missoula, for respondent and appellant.

      Jon E. Ellingson, Ellingson & Moe, Missoula, for petitioner and respondent.
   JUSTICE BARZ

delivered the Opinion of the Court.

LeRoy Gebhardt (LeRoy) appeals from a Decree of Dissolution entered in the District Court of the Fourth Judicial District, Missoula County, Montana, the Honorable James B. Wheelis presiding. We affirm in part, reverse in part and remand.

LeRoy and Sharon Gebhardt (Sharon) were married on October 7, 1967, in Seattle, Washington. LeRoy completed his Ph.D in Mechanical Civil Engineering shortly before the marriage of the parties. Sharon’s education consisted of two years of college and a two-year X-ray technology course. Immediately after the marriage, the parties moved to California where LeRoy worked first for TRW and later for Agbabian Associates. At the time of separation, Sharon had worked outside the home as an X-ray technician for a total of twelve days.

Six children were born to LeRoy and Sharon: Connie in 1968, Chris in 1970, Theresa in 1971, Beth in 1975, JoAnna in 1977, and Jennifer in 1981. Both Connie and Chris were emancipated at the time of trial. In 1978, the parties moved from California to a farm in Ronan, Montana. The purpose of the move was to enhance the family life and provide more interaction between LeRoy and the children. The parties’ primary source of income from 1978 until the present was a California trailer park purchased as an investment in 1969. LeRoy did the original investigation of the property and has overseen its management almost exclusively.

In 1974, LeRoy established an irrevocable trust for the benefit of his children. The primary source of the trust corpus was an inheritance from LeRoy’s mother, although LeRoy contributed certain other inheritances and income, and LeRoy’s brother, Guy, made contributions as well. Guy Gebhardt is the trustee for the benefit of the children. The trust expires when the youngest child reaches twenty-five.

In 1984, Sharon and the children moved to Missoula so that the children, each of whom had experienced some degree of academic difficulty, could attend school there. The parties then purchased a home on Mount Avenue in Missoula. On July 16, 1986, Sharon filed for dissolution. The assets owned by the parties at that time included: the farm and related assets in Ronan, the Mount home, the California trailer park, a Franklin Fund account and personal property. The farm, the trailer park and the home were all encumbered by outstanding debt. By stipulation dated September 4, 1986, the parties agreed to an equal division of both the Franklin Fund account and the proceeds of the sale of the farm assets as well as to a division of the trailer park income. The only assets not disposed of by this agreement were the Mount home and the parties’ personal property. Both parties acquired certain assets between the time of filing and dissolution. In particular, LeRoy purchased a home encumbered by a mortgage.

On May 2, 1988, LeRoy and Sharon entered into an Agreement for Partial Settlement of Marital Estate. Pursuant to that agreement, LeRoy executed a promissory note in favor of Sharon as partial consideration for her share of the Ronan farm and its remaining assets. LeRoy also agreed to indemnify Sharon for any liability on the underlying contract for deed.

Sharon testified as to eight incidents of LeRoy’s abuse of either her or the children. Sharon’s and LeRoy’s testimony conflicted as to who instigated separate confrontations involving LeRoy and Sharon and LeRoy and Chris. Both parties agreed that corporal punishment was an acceptable form of discipline.

LeRoy’s specifications of error fall into three categories:

1. The District Court abused its discretion by its wholesale adoption of Sharon’s Findings of Fact and Conclusions of Law in light of the lack of substantial, credible supporting evidence.
2. The District Court failed to consider statutory factors.
3. The District Court exceeded its jurisdiction in ordering the parties to prevail upon the assets of the LeRoy Gebhardt Trust for payment of the children’s medical and dental expenses.

The findings of the District Court are presumed correct. In re the Marriage of Johnson (1987), 225 Mont. 404, 405-06, 732 P.2d 1345, 1346. We will not reverse the District Court’s ruling absent an abuse of discretion. In re the Marriage of Johns (Mont. 1989), [238 Mont. 256,] 776 P.2d 839, 840, 46 St.Rep. 1249, 1251; In re the Marriage of Stephenson (Mont. 1989), [237 Mont. 157,] 772 P.2d 846, 848, 46 St.Rep. 700, 702. Although we have consistently encouraged district courts to employ conscientious judgment and active participation in preparing findings, adoption verbatim of one party’s proposed findings is not error per se. In re the Marriage of Watson (1987), 227 Mont. 383, 387-88, 739 P.2d 951, 954; In re the Marriage of Sessions (Mont. 1988), [231 Mont. 437,] 753 P.2d 1306, 1307, 45 St.Rep. 744, 746. Reversible error exists only where substantial credible supporting evidence is lacking. In re the Marriage of Stewart (Mont. 1988), [232 Mont. 40,] 757 P.2d 765, 767, 45 St.Rep. 850, 852. Neither is the District Court required to make specific findings related to each statutory factor set forth in either §§ 40-4-202 or 40-4-204, MCA. In re the Marriage of Reid (1987), 226 Mont. 116, 120, 733 P.2d 1302, 1304. However, the findings must clearly reflect consideration of these factors. In re the Marriage of Syljuberget (Mont. 1988), [234 Mont. 178,] 763 P.2d 323, 326, 45 St.Rep. 1825, 1828. LeRoy asserts that the District Court made incredible findings and failed to consider statutory factors in its division of marital property, establishment of child support and visitation. We will address each area separately.

Marital Property

LeRoy first contends that the District Court failed to consider certain of his obligations in apportioning the marital estate and thus effected an inequitable division. The debts at issue are as follows: insert chart here:

Note to Sharon Gebhardt (Ranch) $ 17,404.26
Contract for Deed to MacGillivary (Ranch) 65,191.49
Home Loan 42,165.00
Personal Loan — Guy Gebhardt 16,000.00
Ranch Taxes & Water Assessment 4,241.81
1988 Income Tax — Estimate 3,054.00
TOTAL $148,056.56

This case is analogous to In re the Marriage of Wagner (1984), 208 Mont. 369, 679 P.2d 753. Husband and wife in Wagner divided their marital assets and embarked upon divergent financial paths. Wagner, 679 P.2d at 755. Wife aggressively pursued development of her ranch assets while husband proceeded to divest himself of certain property and to encumber substantially all that remained. Wagner, 679 P.2d at 755. We held in Wagner that:

“To include in the valuation of the marital estate any accumulation of financial wealth or, conversely, the increase in financial liabilities of either spouse subsequent to the termination of the ‘marital relationship’ may effectuate an injustice and frustrate the intended purpose of division of marital property.”

Wagner, 679 P.2d at 757-58.

LeRoy’s first three listed liabilities were incurred subsequent to the filing of the petition and the parties’ “financial” separation. The terms of the parties’ Agreement for Partial Settlement of Marital Estate required LeRoy to execute a promissory note payable to Sharon as consideration for her interest in the ranch. LeRoy’s separately incurred obligation represented by the note is thus not a marital debt. Similarly, pursuant to the same Agreement, LeRoy agreed to indemnify Sharon both for any amount she becomes obligated to pay pursuant to the MacGillivary contract for deed and for any liability related to ranch taxes and irrigation fees. LeRoy assumed liability for all three debts as part of his resolution to hold the farm property and render it profitable. Sharon should not he penalized for LeRoy’s investment decisions once their paths diverged in regard to financial matters. These debts are therefore not marital obligations subject to division. By his own testimony, LeRoy purchased a home on North Avenue with proceeds from the sale of the farm assets after the parties stipulated to equally distribute the farm sale proceeds. The record is unclear as to the origin of the debt to Guy Gebhardt and the 1988 Estimated Taxes. We remand for further proceedings regarding the nature and timing of these obligations and disposition consistent with our determinations above.

Secondly, LeRoy asserts as error the District Court’s award of all the equity in the Mount home and the personal property to Sharon despite its equal division of other, more significant assets. Section 40-4-202, MCA, mandates an equitable apportionment of marital property. Equitable does not necessarily mean equal. In re the Marriage of Fitzmorris (Mont. 1987), [229 Mont. 96,] 745 P.2d 353, 354, 44 St.Rep. 1809, 1811. We will not reverse the district court absent an abuse of discretion. In re the Marriage of Stewart (Mont. 1988), [232 Mont. 40,] 757 P.2d 765, 767, 45 St.Rep. 850, 852. We do not find an abuse of discretion in the District Court’s award of the Mount home and its contents in light of Sharon’s custody of the four minor children. We affirm.

Thirdly, LeRoy specifies as error the District Court’s order which he claims divests both parties of substantially all control over the California trailer park. The District Court found that “[n] either party should manage the trailer park except as a short term interim manager between hired managers.” We find the District Court’s order lacked sufficient, credible supporting evidence. Substantial credible evidence will persuade a reasonable person and should be of such a character that reasonable persons would not disagree as to its meaning. Kukuchka v. Ziemet (1985), 219 Mont. 155, 157-58, 710 P.2d 1361, 1363. We are not convinced that LeRoy’s past management of the trailer park warrants his complete exclusion from the same in the future. Under LeRoy’s supervision, this investment increased in value from $120,000 to $700,000 over a nineteen year period. The Gebhardt family has relied on this asset for its support since 1978. No evidence supports the District Court’s conclusion that LeRoy should not continue to oversee the management of the trailer court. The lower court’s order that the parties relinquish hands-on control of this singularly important asset is clearly an abuse of discretion. We remand for additional proceedings and redetermination of management of the trailer park during the period the parties hold the same as co-tenants.

Child Support

LeRoy claims the District Court improperly imputed excessive income to him and minimal income to Sharon in establishing the child support obligations of both parties. Furthermore, he asserts the District Court failed to consider statutory factors in its award of child support.

The District Court imputed income to LeRoy of $40,000 per year based solely on LeRoy’s testimony that he supposed his salary would have doubled had he remained in California and the speculation of LeRoy’s former co-worker that LeRoy could probably find a job in the aerospace industry. Additionally, the lower court found Sharon capable of earning barely over $3,000 per year.

We stated upon adopting the Uniform Child Support Guidelines that District Courts may properly impute income to under-employed or unemployed parents. Uniform District Court Rule on Child Support Guidelines (Mont. 1987), [227 Mont. 1,] 44 St.Rep. 828. However,

“In cases where the obligor parent is not working or is not working at full earning capacity, the reasons for such a limitation on earnings should be examined. If the reason is a matter of choice, the local job market should be reviewed to determine what a person with the obligor parent’s trade skills and capabilities could earn. Those typical earnings can then be imputed to the obligor parent for use in this guide. This approach is most useful when the obligor parent has a relatively stable and recent work history. The approach can also be used when the obligor parent has minimal skills and no work history by ascribing earnings based on a minimum wage for a full work week.”

Uniform District Court Rule on Child Support Guidelines, 44 St.Rep. at 833.

District Courts are obliged to consider the employment opportunities available in the local job market for unemployed or underemployed parents. The record does not reflect the District Court’s consideration of local employment opportunities in imputing income to either of the parties. Sharon’s income was established at approximately $3,000 per year with only her previous year’s earnings as support for that finding. The court imputed $40,000 of income to LeRoy based only on his conjecture that had he remained in California, his salary might have doubled. Obviously, LeRoy did not remain in California. The findings of the trial court “[mjust realistically reflect what the parents are capable of earning using their actual earnings as a guideline.” In re the Marriage of Mitchell (Mont. 1987), [229 Mont. 242,] 746 P.2d 598, 602, 44 St.Rep. 1936, 1941, (quoting In re the Marriage of Carlson (1984), 214 Mont. 209, 216, 693 P.2d 496, 500). Neither LeRoy’s nor Sharon’s earning capacity was realistically reflected in the District Court’s findings due to the lack of sufficient supporting evidence.

Adequate consideration of statutory factors is absent in the District Court’s findings as well. We find no indication that the lower court considered the needs of the children, their lifestyle prior to dissolution or LeRoy’s financial resources. In re the Marriage of Anderson (Mont. 1988), [230 Mont. 89,] 748 P.2d 469, 471, 45 St.Rep. 40, 43. We remand for a calculation of both parties’ child support obligation based on a reasonable imputation of income and in light of the statutory considerations set forth above.

LeRoy also specifies as error the District Court’s award of retroactive child support. The District Court may, once the issue of child support is properly before it, award retroactive child support. In re the Marriage of Shirilla (1987), 225 Mont. 106, 110, 732 P.2d 397, 399; In re the Marriage of DiPasquale (1986), 220 Mont. 497, 499, 716 P.2d 223, 225. Because the District Court abused its discretion in its imputation of income to both parties, the award of retroactive child support based on that calculation is error. Sharon did not seek modification of the parties’ stipulation during the pendency of this action and only raised the issue of retroactive child support upon filing her Proposed Findings of Fact and Conclusions of Law. There was no testimony to support such an award. In light of the above, we remand for redetermination of the propriety of retroactive child support based on both parties’ actual and reasonably imputed income.

Visitation

LeRoy contends the District Court erred by imposing limitations on his visitation with his two youngest children. We agree. Section 40-4-217, MCA (1987), states that “a parent not granted custody of the child is entitled to reasonable visitation rights unless the court finds, after a hearing, that visitation would endanger seriously the child’s physical, mental, moral, or emotional health.” While portions of Sharon’s proposed findings, adopted verbatim by the District Court, were self-serving beyond the point of advocacy, nowhere is there reflected a potential for serious endangerment. “Error occurs only when the proposed findings are relied upon to the exclusion of proper consideration of the facts and the failure to exercise independent judgment.” In re the Marriage of Jacobsen (1987), 228 Mont. 458, 743 P.2d 1025, 1029, 44 St.Rep. 1678, 1683.

The District Court ordered:

“Summer visitation of six weeks on the condition that [LeRoy] employs a responsible, live-in adult to provide assistance with care for the children during this period. This adult must be sufficiently independent of [LeRoy] and sufficiently committed to the children to be able to intervene on behalf of the children to interrupt any physical abuse directed at them by [LeRoy]. If [LeRoy] is unwilling to hire such an adult, then he shall have visitation with JoAnna and Jennifer during the summer consisting of two one week periods separated by at least a three week period. Given the age of the children and [LeRoy’s] responsibilities on the farm, [LeRoy] shall have the obligation to obtain child care assistance during these visitations.”

What the court failed to set forth was any indication of LeRoy’s ability to meet this potentially onerous financial burden which appears to foreclose any summer visitation. The District Court did not employ its independent judgment and abused its discretion by making findings not based on substantial, credible evidence. In re the Marriage of J.A.M. & D.A.M. (Mont. 1988), [231 Mont. 68,] 750 P.2d 1097, 1099, 45 St.Rep. 437, 440. We reverse and remand for further determination of a reasonable visitation schedule.

LeRoy Gebhardt Trust

The District Court, in Conclusion of Law No. 11, ordered the parties to prevail upon the trustee of the LeRoy Gebhardt Trust for payment of “medical insurance and expenses for the children including dental and ocular expenses and any extraordinary expenses

The LeRoy Gebhardt Trust is an irrevocable trust created for the benefit of the children of LeRoy and Sharon Gebhardt. During the trust term, the trustee may “distribute to or for the benefit of Trustor’s [LeRoy’s] children . . . such amount or amounts of income or principal as Trustee in his sole discretion deems to be necessary for the health, education and maintenance of the beneficiaries.” Le-Roy’s clear intention was to create an irrevocable trust for the benefit of his children. Thus, the LeRoy Gebhardt Trust is not marital property and the District Court erred in attempting to dispose of it as such. In re the Marriage of Malquist (Mont. 1988), [234 Mont. 419,] 763 P.2d 1116, 1119, 45 St.Rep. 2020, 2023-24.

We reverse the order of the District Court and remand for further proceedings regarding the parties’ responsibility for the medical and dental insurance needs of their children consistent with this opinion.

Affirmed in part, reversed in part and remanded.

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


text:
    ROLAND C. BENSON and Armonia A. Benson, Plaintiffs and Appellants, v. CLARK PYFER and Paul Kleffner, d/b/a Intercity Development Company, Defendants and Respondents.
    No. 89-172.
    Submitted on Briefs Oct. 13, 1989.
    Decided Dec. 6, 1989.
    Rehearing Denied Jan. 9, 1990.
    783 P.2d 923.

      John L. Hollow, Helena, for plaintiffs and appellants.
    Jacqueline N. Terrell, Helena, for defendants and respondents.
   JUSTICE BARZ

delivered the Opinion of the Court.

Appellants appeal from an order of the District Court of the First Judicial District, Lewis and Clark County, granting respondents’ motion for summary judgment. We affirm.

In January of 1979, respondents received approval of a preliminary plat of the Intercity Commercial Subdivision located in Lewis and Clark County. Respondents recorded the final plat on June 26, 1979. On September 10, 1979, the City of Helena created SID #354 for construction of streets in Block 1 of Intercity Commercial Subdivision. Respondents at that time intended to construct privately the sewer and water facilities necessary for Block 1.

Appellants purchased Lot 2 of Block 1 by contract for deed dated September 13, 1979. Pursuant to the contract, appellants purchased Lot 2 “as is” but agree to pay their pro rata share of the cost of installing water and sewer facilities and paved streets. Respondents retained sole discretion to either construct such improvements themselves or obtain approval of an SID for the same. The City of Helena resolved to create an SID for the construction of water and sewer facilities on November 24, 1980. Neither sewer and water facilities were constructed in Block 1.

Appellants discontinued making payments required by the contract for deed in August of 1984. One month later, through their attorney, appellants made an offer of rescission to respondents based on the lack of facilities in Block 1 and the inflated purchase price of Lot 2 compared with the value of nearby lots being sold by the City of Helena. Respondents declined this offer. Appellants’ complaint filed January 7,1986, prayed for rescission of the contract for deed founded in respondents’ failure to perform their contractual obligations.

Appellants alleged respondents breached the contract by not connecting the property to water and sewer facilities or building access roads. Appellants additionally claimed the property was subject to SIDs substantially exceeding the $0.21 per square foot represented by respondents. On March 1, 1988, appellants filed an amended complaint seeking rescission or damages based on respondents’ use of plats in inducing appellants’ purchase of Lot 2. Respondents moved for summary judgment on May 16, 1988. Appellants appeal from the District Court’s grant of that motion. We affirm.

Appellants raise two issues on appeal:

1. Did the District Court erroneously conclude that appellants raised no genuine issues of material fact?
2. Did the District Court err in finding appellants’ claim for rescission barred by laches?

Appellants contend the District Court erred in its grant of summary judgment to respondents because genuine issues of material fact remain.

Summary judgment is properly granted when “there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law.” Rule 56(c), M.R.Civ.P. The moving party initially must prove there are no genuine issues of material fact. Pretty on Top v. City of Hardin (1979), 182 Mont. 311, 315, 597 P.2d 58, 60; Eitel v. Ryan (Mont. 1988), [231 Mont. 174,] 751 P.2d 682, 684, 45 St.Rep. 521, 524, “However, where the record discloses no genuine issue of material fact, the burden of proof shifts to the party opposing the motion, who must come forward with substantial evidence raising an issue of fact.” Kaiser v. Town of Whitehall (1986), 221 Mont. 322, 325, 718 P.2d 1341, 1342; Mayer Bros. v. Daniel Richard Jewelers, Inc. (1986), 223 Mont. 397, 399, 726 P.2d 815, 816.

Appellants contend the affidavit of Dick Nesbit and certain discovery filed by the respondents after respondents’ motion for summary judgment raised genuine issues of material fact. However, appellants fail to disclose exactly what factual issues are raised by these documents. Mere speculation and conclusory statements are insufficient to meet the non-moving party’s burden. Fauerso v. Maronick Constr. Co. (1983), 203 Mont. 106, 112, 661 P.2d 20, 23; Brothers v. General Motors Corp. (1983), 202 Mont. 477, 481, 658 P.2d 1108, 1110; Eitel v. Ryan (Mont. 1988), [231 Mont. 174,] 751 P.2d 682, 684, 45 St.Rep. 521, 524. We find appellants’ contention in this regard without merit.

Appellants further assert that the District Court presumed the existence of certain facts which were never at issue. The lower court in its opinion stated:

“The question here arises from [appellants’] theory that the documents associated with the preliminary filing, but not with the final one, somehow bound the [respondents] to build, and, we presume pay, for the SID’s [sic] in question.”

The record does not reflect any claim by appellants that respondents should pay for improvements to Block 1. In any case, as appellants seek rescission, not specific performance, the issue of financial responsibility for improvements to Block 1 is not material.

Appellants finally assert that the District Court erred in concluding no genuine issue of material fact existed regarding the use of respondents’ plats in inducing appellants’ purchase of Lot 2.

Appellants rely on our holding in Majers v. Shining Mountains (1986), 219 Mont. 366, 711 P.2d 1375, for the contention that representations contained in plats used to induce the sale of subdivision lots create implied covenants binding upon the seller. Shining Mountains recorded plats containing designated roads and common areas for a subdivision of approximately 7,000 acres. Majers, 711 P.2d at 1376. The plats were filed before the Subdivision and Platting Act, codified at §§ 76-3-101 et seq., MCA, became effective in 1973. Majers, 711 P.2d at 1376. Majers purchased a lot within the subdivision pursuant to a sales agreement providing that Shining Mountains would form a nonprofit association to oversee development of the subdivision but containing no commitment to actually construct anything. Majers, 111 P.2d at 1376.

We affirmed the district court’s grant of summary judgment to Majers based on its ruling that “reservation of easements for roadways in subdivision plats creates an implied common-law covenant by the lot seller to open and construct roadways . . .” Majers, 111 P.2d at 1376. We further found that

“[W]here land is sold with reference to a map or plat showing a park or like open area, the purchaser acquires a private right, generally referred to as an easement, that such area shall be used in the manner designated.”

However,

“Whether there is any legally enforceable right to have the roads constructed depends not on the designation in the plats but on the use of those plats in inducing purchases.”

Majers, 711 P.2d at 1378 (quoting Ute Park Summer Homes Ass’n. v. Maxwell Land Grant Co. (1967) 77 N.M. 730, 427 P.2d 249, 253).

Section 76-3-304, MCA, provides that when land is sold with reference to a properly recorded plat, the plat becomes part of the document conveying the interest in land. The effect of this section is not to create an obligation upon the seller to construct improvements represented on the plat but merely to create an easement for the purchaser’s benefit. Majers, 711 P.2d at 1377. Respondents contend that our holding in Majers is inapplicable to the case at hand because the respondents are subject to the provisions of the Subdivision and Platting Act while the sellers in Majers were not.

The rule proposed by respondents would deny recovery to purchasers of subdivision lots for fraudulent misrepresentations made by the sellers of those lots. We decline to adopt such a rule. Recently we held that when a seller of land, not subject to the provisions of the subdivision statutes, made representations to the buyer regarding improvements to access roads, the nature of those representations and their effect in inducing the purchase were a submissible jury issue. Dew v. Dower (Mont. 1989), [237 Mont. 476,] 774 P.2d 989, 991, 46 St.Rep. 981, 985. The purpose of the Subdivision and Platting Act is not to shield sellers from liability for their fraudulent misstatements. Majers, 711 P.2d at 1377.

Appellants make the bare, conclusory statement that respondents used the plats to induce appellants’ purchase of Lot 2. They introduce no facts to support this contention. In Dew, two plaintiffs testified as to the defendant’s representations, all the male plaintiffs stated they had been shown a certificate of survey which was also referred to in the contract for deed, a realtor stated the defendant showed him stakes defining the boundary of an improved road and the defendant admitted she made certain representations regarding the road. Dew, 774 P.2d at 990-91. The plaintiffs in Majers stated that not only did defendant’s agents affirmatively assure them certain improvements would be made but that defendant refused to make the improvements after repeated requests. Majers, 711 P.2d at 1376.

Appellants make no similar factual allegations. We will not speculate as to the possible inducement alleged by appellants nor will we infer facts from appellants’ conclusory statements.

Appellants further contend that the District Court erred in dismissing their claim for rescission based on laches. Laches is an equitable remedy the propriety of which we will determine on a case by case basis. Matter of Estate of Winter (1987), 226 Mont. 24, 734 P.2d 178, 180, 44 St.Rep. 430, 433. Section 28-2-1713, MCA, requires a party seeking rescission to use reasonable diligence in asserting its claim once its right to rescind is apparent. Therefore the question before us is whether appellants were reasonably forthcoming in demanding rescission from respondents or whether their claim should be barred by laches.

Appellants claim they were not aware until 1986 that they could not obtain a building permit for Lot 2 because the entire block lacked streets and water and sewer facilities. In addition, they claim that “what appeared to be construction of sewer and water had occurred after the contract was signed . . . [i]t turned out to be an outfall line from a subdivision above Intercity.” There is conflicting evidence that this outfall line was constructed prior to appellants’ purchase of their lot. Furthermore, the City of Helena Commission voted to abandon the SID for construction of improvements on Block 1 in November of 1981.

Appellants contend respondents proclaimed that “connection of the property to utilities was imminent and that a paved access road would soon be built to the property.” Despite obvious indications that these improvements had not been made, appellants continued making payments on the contract for deed for five years. Knowledge of the existence of a claim will be imputed to a party who has sufficient information to put it on inquiry notice of that claim. McGregor v. Mommer (1986), 220 Mont. 98, 108, 714 P.2d 536, 542. The District Court had sufficient evidence with which to impute appellants’ knowledge of this claim.

The plaintiff in McGregor purchased a wholesale and retail gasoline business from defendants. McGregor, 714 P.2d at 539. Although the District Court found the plaintiff had inquiry notice of defendants’ negligent misrepresentation as early as 1977, plaintiff continued making payments on the purchase contract until 1981. McGregor, 714 P.2d at 542. We found the district court erroneously permitted the jury to consider rescission as a remedy when the plaintiff failed to assert its claim promptly and with reasonable diligence. McGregor, 714 p.2d at 542. Similarly, appellants in the case at hand failed to demand rescission within a reasonable time. The District Court did not err in finding the appellants’ claims barred by laches.

Affirmed.

CHIEF JUSTICE TURNAGE and JUSTICES HARRISON, Mc-DONOUGH and SHEEHY concur.