author: JUSTICE HUNT JUSTICE NELSON JUSTICE ERDMANN

text:
    MARK N. ROBERTS, Plaintiff and Appellant, v. EMPIRE FIRE AND MARINE INSURANCE CO., Defendant and Respondent.
    No. 96-127.
    Submitted on Briefs June 24, 1996.
    Decided September 11, 1996.
    53 St.Rep. 871.
    277 Mont. 519.
    923 P.2d 550.

      For Appellant: L. Randall Bishop, Jarussi & Bishop, Billings; Stephen D. Roberts, Bozeman.
    For Respondent: Steve Reida, Landoe, Brown, Planalp & Braaksma, Bozeman.
   JUSTICE HUNT

delivered the Opinion of the Court.

Mark Roberts appeals the order from the Eighteenth Judicial District Court, Gallatin County, setting aside the entry of a default judgment on the issue of liability and the subsequent final judgment on damages against respondent, Empire Fire and Marine Insurance Company.

We reverse.

The issue in this case is:

Did the District Court manifestly abuse its discretion when it issued its order setting aside the default judgments of liability and damages entered against Empire Fire and Marine Insurance Company?

FACTS

In November 1992, Dirk Hinkle and the appellant, Mark Roberts (Roberts) were involved in an accident at an uncontrolled intersection in Bozeman, Montana. Following the accident, Hinkle’s insurer, Empire Fire and Marine Insurance Company (Empire), offered to pay 75% of Roberts’ property damage based upon its opinion that Roberts was contributorily negligent. Roberts rejected Empire’s offer and filed suit against Empire for vehicle damage as well as damages for the inconvenience caused by the loss of use of his vehicle. After Roberts filed suit, Empire filed an offer of judgment which Roberts then later accepted.

On March 3,1995, Roberts again filed suit against Empire alleging unfair claims settlement practices. Service of process was made upon the Montana Commissioner of Insurance (MCI) on March 9, 1995. MCI forwarded a cover letter, the Summons, the Complaint and First Discovery Requests to Empire’s corporate office in Nebraska.

Empire’s receptionist received these documents on March 13, 1995. Empire’s mail room log-in sheets reflect that the documents were then routed to Ms. Amy Bones, corporate counsel for Empire. Ms. Bones is designated as receiver for service of process from the State of Montana. Although Ms. Bones contends that she never saw the documents, the record shows that it was normal procedure for Ms. Bones to hand-deliver papers from her office to the claims department.

In any event, the documents did reach Empire’s claims department and from there were hand-delivered to Mr. David Sedlacek. Mr. Sedlacek is responsible for supervising Empire’s claims unit and for assigning new claims. Mr. Sedlacek wrote notes on the documents indicating his awareness of their contents, and intended that they be forwarded to Dennis Magnuson, one of Empire’s “file handlers” and also an attorney.

In Mr. Sedlacek’s affidavit, he stated that in all likelihood he handed the documents to Ms. Heidee Dorr, a claims clerk who at that time had been employed by Empire for only a few days. Ms. Dorr stated in her affidavit that if she was in the claims department at all on March 13, 1995, it would have been her first day there and she would not yet have received any training. Mr. Sedlacek speculated that Ms. Dorr, rather than pulling the 1992 file that had been prepared in the Roberts v. Hinkle case and delivering the file and the documents to Mr. Magnuson, filed the documents in that closed Roberts v. Hinkle file.

Aware of the contents of the documents, Mr. Sedlacek did not “flag” them as important, as was his duty; did not confirm that Mr. Magnuson received the documents; and did not inquire as to the progress being made on the matter. Mr. Sedlacek and Mr. Magnuson work across the hall from one another and often see each other several times daily.

On April 25,1995, the clerk of court entered a default judgment on liability against Empire in Montana’s Eighteenth Judicial District Court. Pursuant to Rule 55(b), M.R.Civ.P., the determination of damages was set for a later date. On October 2, 1995, the District Court held an evidentiary hearing. Following this hearing, the court entered a $615,000.00 final judgment against Empire, including $15,000.00 in compensatory damages and $600,000.00 in punitive damages. Roberts then filed this judgment with the District Court in Douglas County, Nebraska, on November 27, 1995.

After learning of the default judgment on December 1, 1995, Empire found Roberts’ complaint inside the closed Roberts v. Hinkle file. Empire then filed a Motion for Relief, citing to Rules 60(b)(1) and 60(b)(6), M.R.Civ.P. This motion was later amended to include Rule 55(c), M.R.Civ.P. Affidavits and depositions were filed with the District Court, and a hearing was held on January 30, 1996. By order dated February 2,1996, the District Court granted Empire’s Motion to Set Aside the Default Judgment.

On February 5, 1996, Roberts filed an appeal with this Court. On March 28,1996, Empire filed a motion to dismiss Roberts’ appeal for lack of jurisdiction, claiming that an order granting a motion to vacate a default is nonappealable. Based on the language of Rule 1(b)(2), M.R.App.P., this Court determined that it had jurisdiction over the matter and therefore, Empire’s motion to dismiss was denied. Roberts v. Empire Fire and Marine Insurance Co. (1996), [276 Mont. 255], 915 P.2d 872. This appeal followed.

DISCUSSION

Did the District Court manifestly abuse its discretion when it issued its order setting aside the default judgments of liability and damages entered against Empire Fire and Marine Insurance Company?

In this matter, the District Court granted Empire’s motion based on Rule 60(b)(1), M.R.Civ.P. This rule provides:

On motion and upon such terms as are just, the court may relieve a party or a party’s legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect;....

The standard of review used by this Court when reviewing a district court’s decision to grant a motion to set aside a default judgment is whether the court has manifestly abused its discretion. Siewing v. Pearson Co. (1987), 226 Mont. 458, 461, 736 P.2d 120, 122 (citing Lords v. Newman (1984), 212 Mont. 359, 365-66, 688 P.2d 290, 293-94). Therefore, our discussion will center on whether Roberts has shown a manifest abuse of discretion by the District Court which would require reversal. First National Bank of Cut Bank v. Springs (1987), 225 Mont. 62, 65, 731 P.2d 332, 334.

It is Roberts’ position on appeal that, although the extent of poor judgment necessary to reflect a “manifest abuse of discretion” has not been clearly defined by this Court, there are previous decisions that have established the standard for setting aside a default. See, e.g., In re Marriage of McDonald (1993), 261 Mont. 466, 468, 863 P.2d 401, 402. And, although no Montana case law clearly establishes the parameters of “manifest abuse of discretion,” Roberts argues that the Ninth Circuit Court of Appeals has recognized that a court may abuse its discretion if it does not apply the law correctly or if it erroneously assesses the facts. United States v. Rahm (9th Cir. 1993), 993 F.2d. 1405, 1410; Northern Alaska Environmental Center v. Lujan (9th Cir. 1992), 961 F.2d 886, 889. Extending this argument to the instant case, Roberts contends that the District Court did not apply the law correctly, and therefore the court manifestly abused its discretion in setting aside the default judgment.

Roberts urges this Court to consider several cases involving instances of neglect or inattentiveness in an office setting in which this Court has affirmed a district court’s refusal to set aside a default. See Siewing, 736 P.2d 120; Myers v. All West Transport (1988), 235 Mont. 233, 766 P.2d 864; Paxson v. Rice (1985), 217 Mont. 521, 706 P.2d 123; Griffin v. Scott (1985), 218 Mont. 410, 710 P.2d 1337.

In Siewing, a company vice-president received a summons and complaint. Shortly thereafter, the vice-president resigned his position with the company and the documents remained undiscovered until a month later. This Court affirmed the district court and held that none of the evidence provided at trial established excusable neglect. Siewing, 736 P.2d at 122. In Myers, this Court affirmed the district court’s conclusion that the defendant’s inattention to mail did not establish excusable neglect. Myers, 766 P.2d at 867 (citing Siewing, 736 P.2d at 122).

In Paxson, an attorney intended to file an answer but postponed its preparation. This Court stated that this was not a factual situation where “reasonable minds might conclude” that the conduct of the attorney was excusable. Paxson, 706 P.2d at 126. Following Paxson, this Court affirmed the district court in Griffin. There, the district court determined that the failure of counsel to read his mail did not establish excusable neglect. Griffin, 710 P.2d at 1338.

Roberts contends it is clear that this Court has consistently held that a party’s inattention or failure to respond to mail does not establish excusable neglect. Therefore, Roberts asserts that Empire’s inattention to Roberts’ complaint cannot be excused by setting aside the default judgment. We agree.

This Court is aware of the importance of putting an end to litigation and establishing the respective rights of the parties once and for all, if necessary, through a default judgment. Karlen v. Evans (1996), [276 Mont. 181], 915 P.2d 232, 235. However, Rule 60(b) presents an exception to this doctrine of finality. The policy behind the rule is the preference for cases to be tried on their merits. Judgments by default are not favored. Maulding v. Hardman (1993), 257 Mont. 18, 23, 847 P.2d 292, 296.

In this case, the District Court was presented with an abundance of cases from both sides that discussed “specific reasons why relief should or should not be granted.” The District Court noted that there had been little if any discussion regarding the fundamental purpose of Rule 60(b)(1), M.R.Civ.P. The District Court then stated that in its view:

Rule 60(b)(1) provides a basic correction system for protecting the legal process from errors caused by neglect, inadvertence, and mistake — clearly, improper foundations upon which to base legal judgments.

In its conclusion, the District Court concurred with a statement from a 1978 case in which this Court held:

Each case must be determined upon its own facts; and when the motion is made promptly and is supported by a showing which leaves the court in doubt or upon which reasonable minds might reach different conclusions, the doubt should be resolved in favor of the motion.

Clute v. A.B. Concrete (1978), 179 Mont. 475, 479, 587 P.2d 392, 395 (citing Nash v. Treat (1912), 45 Mont. 250, 122 P. 745). The District Court determined that “on the facts of this case,” Empire’s failure to respond to Roberts’ summons and complaint stemmed from the type of “mistake” contemplated by Rule 60(b)(1), M.R.Civ.P.

This Court is aware that default judgments are not favored, but is equally aware of the limited set of factual circumstances in which we have consistently upheld a district court’s order of default. Collectively, the cases embodying these factual circumstances show, as appellant argues, that evidence of office mismanagement, neglect, and inattentiveness on the part of high-level employees can support a default judgment. Individually, each of these cases in which we upheld a default order contain facts establishing careless conduct bordering on willful ignorance. In addition, in McDonald, supra, we stated that pursuant to Rule 55(c), M.R.Civ.P., a default judgment may be overturned according to Rule 60(b), M.R.Civ.P., only if certain “good cause” criteria are met by the moving party. McDonald, 863 P.2d at 402 (citing Blume v. Metropolitan Life Insurance Co. (1990), 242 Mont. 465, 791 P.2d 784). In that case, we concluded that the appellant “failed to satisfy the threshold requirement of excusable neglect which would justify setting aside the default decree.” McDonald, 863 P.2d at 403. Citing In re Marriage of Castor (1991), 249 Mont. 495, 817 P.2d 665, we declared that “ ‘mistake’, ‘inadvertence,’ and ‘excusable neglect’ generally require some justification for an error beyond mere carelessness ....” McDonald, 863 P.2d at 403.

Clearly, the facts here establish careless conduct amounting to inexcusable neglect, the type of conduct we have consistently held to support a default. The District Court determined that the facts showed the kind of excusable mistake contemplated by Rule 60(b)(1), M.R.Civ.P., apparently focusing on Ms. Dorr’s misfiling of the documents. While we agree that a low-level employee who misfiled documents on her first day of work committed an excusable mistake, we fail to understand how this mistake could extend to excuse the neglectful and inattentive conduct of management-level employees aware of the importance of the documents from the moment they were received.

Because the law and facts so clearly support a default judgment, we hold that the District Court manifestly abused its discretion in setting the default judgment aside.

We reverse.

JUSTICES NELSON, TRIEWEILER and LEAPHART concur.

JUSTICE NELSON

specially concurs.

I concur in our opinion. I write separately only to set forth what I believe is further support and grounds for our decision that the District Court manifestly abused its discretion in setting aside the default judgment entered in favor of Roberts.

At the outset it is important to note that the District Court entered the default judgment against Empire following a hearing and the receipt of testimony and evidence. Even acknowledging the obvious— i.e. that Empire was not in court to present countervailing evidence or to rebut Roberts’ evidence — the tenor and detail of the trial court’s findings of fact and conclusions of law and of the court’s comments regarding Empire’s treatment of Roberts and the handling of his claim (covering some 19 pages) are telling.

One cannot get the true flavor of the court’s complete exasperation and frustration at Empire’s conduct without reading the court’s entire October 19, 1995 decision. Some examples serve to make the point, however.

Among other things, the court found and concluded on the basis of the evidence, testimony, discovery and record, fully referenced and cited in detail in its opinion, that the liability of Empire’s insured was at all times reasonably clear; that Empire refused to pay Roberts’ claim without conducting a reasonable investigation based upon all available information; that the insurer’s claim that Roberts was contributorily negligent was entirely without basis in fact or in law; that Empire neglected to attempt in good faith to effectuate a prompt, fair and equitable settlement of Roberts’ claim; that Empire’s conduct proximately caused Roberts to suffer prolonged anxiety, worry, frustration and anger; and that Empire intentionally disregarded facts that created a certainty of injury to Roberts and deliberately proceeded to act with total indifference to the fact that such injury would be suffered.

Conclusions of Law numbers 6 and 15, perhaps, best epitomize the court’s outrage. In Conclusion of Law number 6, the court stated:

Montana has provided its citizens a remedy for insurance bad faith because the claims settlement process is filled with potential for abuse. See Holmgren v. State Farm Mutual Automobile Insurance Company, 976 F.2d 573, 578 (9th Cir. 1992). This case is an extreme example of just such abuse. As this Court stated in its ruling following the evidentiary hearing on damages:
I can tell you quite plainly, Counsel, that I have not seen a clearer case of insurer misconduct in the years that I have been on the bench.
There is no question in the Court’s mind that the misconduct was based upon an intent to abuse the citizens of the state of Montana, including this plaintiff, and that it also was the effort of the insurer to completely negate the requirements of the Montana Claims Practices regulations.
They failed to discharge the duties of a legitimate insurer. Their effort, quite plainly in the eyes of the Court, was to rip off an innocent victim so that it could profit by not discharging the obligations that it had under its contract, and it fully and completely failed to investigate and settle this claim as a reasonable insurer ought to.
I think the evidence indicates that the defendant has misconstrued the morality and the ethics and the law that govern the activities of insurance companies, and in essence, what it did in this case was to practice extortion, a direct and unequivocal act of extortion.

In a similar vein is the court’s Conclusion of Law number 15:

Empire Fire attempted to use delay and leverage to extort a discount of 25% off the admitted value of Mark Roberts’ claim. By comparison to the total amount of his property damage claim, the 25% discount which Empire Fire tried to extract from Mark Roberts amounted to slightly more than $600.00. This is a comparatively small sum of money when viewed in isolation, but a potentially huge source of profit when applied to the many thousands of claims resolved each year throughout the far-flung operations of this insurer.

Given the references to the record in the court’s findings of fact and conclusions of law, it appears that the court based its findings on substantial supporting evidence and that it did not come to its conclusions of law idly or without justification.

What is truly remarkable, however, is that in granting Empire’s motion to set aside the default judgment for excusable neglect, the court did not in the least discuss its previous findings of fact and conclusions of law or offer any hint that its prior decision might have been open to question because of argument or evidence placed before the court in support of Empire’s Rule 60(b)(1) motion. In fact, with the exception of an indirect reference to neglect, inadvertence and mistake, the court’s February 20, 1996 memorandum and order granting Empire’s motion did not actually address or conclude that Empire had met any of the four elements of its burden to show good cause, as hereinafter discussed.

Rather, the court simply went from concluding in its findings of fact and conclusions of law that Empire was guilty of the most egregious claims handling practices in the court’s experience on the bench — in fact, misconduct amounting to “extortion” — to setting aside that same decision because “each case must be determined upon its own facts.”

The point is that if each case must be determined on its own facts (Clute v. Concrete (1978), 179 Mont. 475, 479, 587 P.2d 392, 395) and if the facts were as the court found them to be in its initial decision— and there is nothing in the court’s subsequent decision calling those findings into question — then default or no default, the court’s judgment against Empire for compensatory and punitive damages was fully justified and should not, as a matter of law, have been set aside under any circumstances.

A default judgment may only be set aside “for good cause shown.” In order to establish good cause for purposes of Rule 60(b)(1), M.R.Civ.P, among the various burdens imposed upon a defaulted party, (establishing excusable neglect being simply one of four) is the requirement that the defaulted party also make a prima facie demonstration that it has a meritorious defense to the claim — here Roberts’ bad faith claim. In Re Marriage of McDonald (1993), 261 Mont. 466, 468, 863 P.2d 401, 402 (citing Blume v. Metropolitan Life Ins. Co. (1990), 242 Mont. 465, 467, 791 P.2d 784, 786).

In support of its Rule 60(b)(1) motion, Empire strenuously argued it had various defenses to Roberts’ bad faith claim — i.e. Empire advanced matters with respect to Roberts’ property damage claim that, in Empire’s view, justified the way it handled that claim, thus establishing a reasonable basis pursuant to § 33-18-242(5), MCA, for contesting the claim. The dissent makes reference to these defenses.

In opposition to Empire’s motion, Roberts, with equal intensity argued that on the basis of the record and discovery in his property damage claim, Empire’s defenses were not meritorious. Moreover, Roberts contended that, as a matter of law, Empire could not demonstrate a meritorious defense because, in the underlying case, pursuant to Rule 68, M.R.Civ.P., Empire had made an unconditional offer of judgment for $3,000, an amount in excess of Roberts’ liquidated property damage claim, which offer was accepted by Roberts. As a result, Roberts contends that Empire admitted liability thus precluding any present argument that liability was not clear in the underlying case.

While this argument is not directly raised as an issue on appeal, I do note that in interpreting Rule 68, M.R.Civ.P., we have stated that:

It would be inconsistent to allow a procedure designed to facilitate settlement and avoid litigation costs to be used to challenge liability and, thereby, extend litigation.
Rule 68 specifies that an offer of judgment made after a finding of liability but before determination of damages shall have the same effect as an offer made before trial. That effect, if the offer is accepted, is to render the issue of liability moot.

Weston v. Kuntz (1981), 194 Mont. 52, 57-58, 635 P.2d 269, 272-73 (emphasis added). See also, Matter of Certain Justice Court Expenses (1994), 264 Mont. 510, 513, 872 P.2d 795, 797.

My only point in raising this is that in the context of this case, given that liability and damage issues are rendered moot by an accepted offer of judgment; given the vigorous record-based arguments on both sides of this aspect of Empire’s motion; and given the trial court’s scathing findings of fact and conclusions of law, as referred to above, the court’s failure to even address this aspect of Empire’s burden of proof, let alone conclude that it had established, prima facie, a meritorious defense to Roberts’ bad faith action, leaves a void in the court’s decision that cannot be simply ignored.

The District Court, having failed to rule that Empire had met this aspect of its burden to show good cause for setting Roberts’ default judgment aside, we are left to conclude that the court was not satisfied that Empire had made a prima facie showing of a meritorious defense. Again, in the context of the trial court’s findings of fact and conclusions of law and the accepted offer of judgment, that conclusion is more consistent than any assumption to the contrary.

More importantly, the court’s failure to conclude that Empire had shown prima facie a meritorious defense begs the question that, in the face of the court’s findings of fact and conclusions of law, none of which were in any way called into question by the court, how, as a matter of law, could Empire possibly have defended Roberts’bad faith claim? An insurer cannot at once be guilty of “a direct and unequivocal act of extortion” in its settlement of a legitimate claim and at the same time prevail in a defense that its conduct was reasonable under the unfair claim settlement practices provisions of Title 33, Chapter 18 of the Montana Code.

Under such circumstances and the unique facts of this case, if the trial court determined that it was appropriate to set aside Roberts’ default judgment for excusable neglect, then it also had the obligation to conclude that its initial decision was at least questionable and that Empire had met its burden to establish a prima facie meritorious defense to Roberts’ bad faith claim.

In failing to do that, I can come to no other conclusion than that the court was not satisfied that Empire had demonstrated all four of the elements of good cause to set aside Roberts’ default judgment and that, as a consequence, it manifestly abused its discretion in granting Empire’s Rule 60(b)(1) motion.

JUSTICES TRIEWEILER and LEAPHART join in the foregoing special concurrence.

JUSTICE ERDMANN

dissenting.

I respectfully dissent from the Court’s opinion.

This Court has stated that an underlying concern to any review of default is that every litigated case should be tried on the merits and that judgments by default are not favored. Lords v. Newman (1984), 212 Mont. 359, 363, 688 P.2d 290, 293. This principle is the cornerstone of appellate review of default. Lords, 688 P.2d at 293. A second principle that constantly appears in our case law is that trial courts are vested with a certain amount of discretion when they consider a motion to set aside a default. Lords, 688 P.2d at 293.

Two standards of review have emerged from our attempt to observe these guiding principles of review on motions to set aside a default. Lords, 688 P.2d at 293. One standard applies when the trial court has denied a motion to set aside the default. In these instances the resulting standard of review is that “no great abuse” or only “slight abuse” is sufficient to reverse an order refusing to set aside a default. Lords, 688 P.2d at 293.

The second standard arises in situations like the present case when the trial court has granted the motion to set aside the default judgment. In these circumstances, a stricter standard of review emerges due to the combined policy considerations of letting the parties have their day in court and our respect for the trial court’s sound discretion. The action of the trial court will only be set aside upon a showing of “manifest abuse” and an order setting aside a default judgment will be reversed only in exceptional cases. Lords, 688 P.2d at 293 (citing McClurg v. Flathead Cty. Comm’rs (1980), 188 Mont. 20, 610 P.2d 1153; Kootenai Corp. v. Dayton (1979), 184 Mont. 19, 601 P.2d 47; Nolen v. Phelps (1957), 131 Mont. 146, 308 P.2d 624).

The record in the present case indicates that the summons, complaint, and first discovery requests were received at Empire’s corporate office in Nebraska on March 13, 1995. The documents were routed to Empire’s claims department and were hand delivered to David Sedlacek, who is responsible for supervising and assigning claims. Sedlacek’s handwriting appears on the documents and he testified that his notes on the documents reflect that he looked up the claim on the computer, found the date of loss, claim number, and identity of the claim handler. The computer claim information also indicated that the claim was closed. Sedlacek stated that his normal procedure, at that point, would have been to hand the summons and complaint to the claims clerk and instruct him or her to pull the closed file from basement storage and deliver it to the claims handler. Heidee Dorr was Sedlacek’s newly hired claims clerk at the time. Apparently, Dorr improperly filed the documents in the closed file and Sedlacek indicated it was his belief that Dorr’s actions were the result of miscommunication.

Empire did not respond to the complaint and on April 25,1995, the clerk of court ordered a default judgment on liability against Empire. Ahearing on damages was held on October 2,1995, for which Empire was not provided notice and in which Empire obviously did not participate. Following the hearing, the court entered a final judgment against Empire for $15,000 in compensatory damages and $600,000 in punitive damages for its liability for bad faith in defending a slow-speed, noninjury intersection accident which was settled for $3,000.

Roberts filed the final judgment in Nebraska on November 27, 1995. On December 4, 1995, Empire filed a motion for relief from judgment citing Rule 60(b)(1) and (6), M.R.Civ.P., and the following day filed an amended motion citing the additional authority of Rule 55(c), M.R.Civ.P.

Rule 60(b), M.R.Civ.P., provides in pertinent part:

On motion and upon such terms as are just, the court may relieve a party or a party’s legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect... or (6) any other reason justifying relief from the operation of the judgment.

Empire argued to the District Court that Roberts’ complaint was misfiled through mistake, inadvertence, or excusable neglect and therefore relief was appropriate under Rule 60(b)(1), M.R.Civ.P. In the alternative, Empire argued that Rule 60(b)(6), M.R.Civ.P., should be applied to grant relief due to the extraordinary circumstances of the case, including the substantial amount of money awarded. In granting Empire’s motion, the District Court stated that:

There is very little, if any, discussion of the fundamental purpose of Rule 60(b)(1) and why such a Rule is absolutely necessary to the law and to the administration of justice. As the Court views the matter, Rule 60(b)(1) provides a basic correction system for protecting the legal process from errors caused by neglect, inadvertence, and mistake — clearly, improper foundations upon which to base legal judgments.

In its conclusion, the District Court concurred with this Court’s holding in Clute v. A.B. Concrete (1978), 179 Mont. 475, 587 P.2d 392:

Each case must be determined upon its own facts; and when the motion is made promptly and is supported by a showing which leaves the court in doubt or upon which reasonable minds might reach different conclusions, the doubt should be resolved in favor of the motion.

Clute, 587 P.2d at 395.

The majority correctly notes that no Montana case clearly establishes the parameters of “manifest abuse of discretion.” The majority adopts Roberts’ argument that the District Court manifestly abused its discretion by not applying the law correctly. However, the test for abuse of discretion is whether the trial court acted arbitrarily without employment of conscientious judgment or exceeded the bounds of reason resulting in substantial injustice. Gaustad v. City of Columbus (1995), 272 Mont. 486, 488, 901 P.2d 565, 567. “Manifest” is defined as: “obvious to the understanding, evident to the mind, not obscure or hidden and is synonymous with open, clear, visible, unmistakable ... and self-evident.” Black’s Law Dictionary 962 (6th ed. 1991). Thus, under a “manifest abuse of discretion” standard of review, this Court may only reverse a lower court if it is obvious that the court abused its discretion.

This Court has defined “mistake” as some unintentional act, omission or error arising from ignorance, surprise, imposition or misplaced confidence. In re Marriage of Broere (1994), 263 Mont. 207, 209, 867 P.2d 1092, 1094. The present case involves a mistake in Empire’s office procedures — a mistake that should not be fatal to its defense of the bad faith tort claim. Dorr was supposed to pull the closed Roberts v. Hinkle file and transfer the suit papers to a claims handler. Instead, the complaint mistakenly ended up in the closed file. Dorr misunderstood her instructions, or the instructions were not clearly given, and the “mistake” that resulted was due to an omission or error arising from misplaced confidence between members of the organization. The record before the District Court clearly established a breakdown in office procedures resulting in a misfiled complaint. The court did not manifestly abuse its discretion when it determined that the facts of the case fell within the meaning of “mistake” under Rule 60(b)(1), M.R.Civ.P.

Rule 55(c), M.R.Civ.P., states that a court may set aside an entry of default for “good cause shown” and this Court has set forth four elements to determine when such good cause exists. The defendant is required to show (a) excusable neglect; (b) that he or she proceeded with diligence; (c) that the judgment, if permitted to stand, will affect him or her injuriously; and (d) that there is a defense to the plaintiff’s cause of action upon the merits. Blume v. Metropolitan Life Ins. Co. (1990), 242 Mont. 465, 467, 791 P.2d 784, 786 (citing Kootenai, 601 P.2d at 51).

The majority states that “[cllearly, the facts here establish careless conduct amounting to inexcusable neglect.” I disagree. Under the facts of this case, including the fact that the initial claim had been settled, paid, and closed out, Empire’s conduct demonstrates excusable neglect. Prior to receiving the complaint, Empire had not received any notice of Roberts’ intention to file an unfair claims settlement practices action. Dorr was in her second week of work on March 13,1995. She was trained by Empire and recognized to be competent at performing her duties at the end of her first week on the job. Even though the complaint apparently was not “flagged” as is standard procedure in this type of case, there is no evidence that this was anything more than an oversight — a mistake — which was compounded by the misfiling of the complaint. In this regard, this case is similar to Keller v. Hanson (1971), 157 Mont. 307, 485 P.2d 705, where a default judgment was initially entered but later set aside pursuant to Rule 60(b)(1), M.R.Civ.P. On appeal, this Court affirmed the district court and noted that:

[Defendants’ attorney after receiving plaintiff’s complaint had somehow misfiled it under defendant Ben Hanson’s name in another file as there were 3 other active files in the office pending at that time in Ben Hanson’s name.

Hanson, 485 P.2d at 706.

Empire also acted with due diligence upon learning of the default judgment. Empire learned of its default on Friday afternoon, December 1, 1995, and on Monday, December 4, 1995, Empire filed its motion for relief from judgment. Furthermore, it is difficult to argue that a $615,000 judgment will not have an adverse affect on Empire.

The record indicates that Empire was not without meritorious defenses to Roberts’ claim. Throughout the underlying case, Hinkle asserted contributory negligence by Roberts and contested clear liability in his answer, interrogatory answers, and deposition. In addition to contesting total liability, Empire stated in its brief in support of its motion for relief from judgment that, contrary to Roberts’ allegations, it did not misrepresent pertinent facts, fail to conduct a reasonable investigation, or fail to effectuate a fair and equitable settlement.

Empire disputed Roberts’ allegation that he could not obtain repair of his vehicle due to Empire’s unfair claims settlement practices and that Empire intentionally deprived Roberts of property and legal rights entitling him to punitive damages. Empire also denied Roberts’ claim for emotional distress damages relying on this Court’s holding in Sacco v. High County Independent Press (1995), 271 Mont. 209, 896 P.2d 411, where we stated that such claims require a showing that the plaintiff’s distress is so severe that no reasonable person could be expected to endure it.

Section 33-18-242(5), MCA, states that an insurer may not be held liable for unfair trade practices if it had a reasonable basis in law or in fact for contesting the claim or the amount of the claim. The record indicates that Empire had asserted a reasonable basis for contesting both its liability for the bad faith claim, as well as the damages assessed, and therefore had raised a meritorious defense to Roberts’ cause of action. I would therefore conclude that Empire satisfied the four elements of the Blume test and demonstrated good cause for setting aside the default judgment pursuant to Rule 55(c), M.R.Civ.P.

In his special concurrence, Justice Nelson emphasizes the incongruity between the scathing nature of the District Court’s findings of fact and conclusions of law from the evidentiary hearing on damages and its order granting Empire’s motion to set aside the default judgment. However, it must be remembered that Empire did not appear at either the hearing on liability or the hearing on damages to present its defense to the bad faith tort claim. Furthermore, the District Court’s failure to reconcile the two rulings does not rise to the level of manifest abuse of discretion. Perhaps the court itself was troubled by the fact that its earlier ruling was based on only one side of the story.

I am no less concerned about abuse of Montana citizens by out-of-state insurers than anyone else. However, the bigger issue here is that Empire did not have its deserved day in court, just as we all would hope courts in other states would allow Montana litigants to be heard. Moreover, here the District Court determined, after reviewing Empire’s motion and supporting brief, that the case should proceed toward trial. Such a determination lies within the sound discretion of the District Court and under the facts of the present case I cannot conclude that the District Court manifestly abused its discretion in granting Empire’s motion to set aside the default judgment.

I would therefore affirm the District Court.

      . This case began on November 30, 1992, with an accident at an uncontrolled intersection in Bozeman. That accident resulted in a lawsuit captioned “Mark Roberts v. Dirk Hinkle,” Gallatin County Cause No. DV 93-174. In that casue of action, Roberts accepted an offer of judgment of $3000 on September 12,1994. The District Court also awarded Roberts attorneys fees, and on February 21, 1995, Hinkle’s insurer (Empire) paid Roberts the fee award. The present claim, alleging unfair claims settlement practices by Empire, was filed on March 3,1995.


source: Caselaw Access Project

author: JUSTICE TRIEWEILER JUSTICE ERDMANN JUSTICE TRIEWEILER

license: Public Domain

text:
    CAROL ANN CARRILLO, Petitioner and Appellant, v. LIBERTY NORTHWEST INSURANCE, Respondent and Insurer for BLUE CROSS BLUE SHIELD, Respondent and Employer.
    No. 95-396.
    Submitted on Briefs April 18, 1996.
    Decided September 3, 1996.
    53 St.Rep. 829.
    922 P.2d 1189.
    278 Mont. 1.

      For Appellant: James G. Hunt, Dix and Hunt, Helena.
    For Respondent: Larry Jones, Senior Attorney, Liberty Northwest Insurance, Missoula.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

The petitioner, Carol Ann Carrillo, filed a petition in the Workers’ Compensation Court of the State of Montana in which she sought benefits for an injury which she alleged occurred in the course and scope of her employment with Blue Cross Blue Shield in 1993. After a trial, the Workers’ Compensation Court entered an order and judgment in which it concluded that Carrillo’s injury did not occur during the course and scope of her employment and denied her claim. Carrillo appeals the order and judgment. We reverse the judgment of the Workers’ Compensation Court.

The issue on appeal is whether the Workers’ Compensation Court erred when it concluded that Carrillo’s injury did not arise out of and in the course and scope of employment.

FACTUAL BACKGROUND

Carol Ann Carrillo suffered an injury on the afternoon of March 2, 1993, when she was struck by an automobile while crossing an intersection in Helena. At the time of her injury, Carrillo had left the building where she worked and was walking toward the Holter Museum, which is one and one-half blocks from her place of employment. She had planned to purchase a gift for a co-worker who was leaving and for whom Carrillo and other co-workers were planning a party. Carrillo worked for Blue Cross Blue Shield (BCBS) of Montana which was insured against workers’ compensation claims by Liberty Northwest Insurance (Liberty). After her injury, Carrillo filed a timely claim for workers’ compensation which Liberty denied on the basis that her accident did not arise out of and in the course of her employment.

After Liberty denied her claim, Carrillo filed a claim with the Workers’ Compensation Court in which she alleged that she was injured when hit by a car during her fifteen-minute break from work. Liberty responded and contended that she had abandoned her employment and was not on break. The Workers’ Compensation Court held a trial on March 23,1995, to determine whether Carrillo’s injury occurred within the course and scope of her employment.

Testimony from the trial and from depositions reveals that at the time of the accident, Carrillo worked at BCBS offices located in the Donovan building which is on the west side of Last Chance Gulch south of its intersection with Lawrence Street in Helena. BCBS provided its employees with a fifteen-minute break in the morning and another fifteen-minute break in the afternoon. Employees customarily took the afternoon break sometime between 2:00 and 3:30 p.m. A substantial number of BCBS employees walk during their breaks and Carrillo testified that she walked during ninety percent of her breaks. While BCBS encouraged its employees to engage in a healthy lifestyle, it did not require them to walk during breaks or even to take breaks; employees were free to take them or leave them.

A small break room was located in the basement of the Donovan building where Carrillo worked. Approximately fifty to seventy-five employees worked in the Donovan building and employees at the Donovan building often walked to the Fuller building for breaks. The Fuller building is a second BCBS office which is located on the northwest corner of Fuller and Lawrence streets, approximately one block away from the Donovan building. Employees also walked to other nearby businesses to take their breaks and BCBS also had a room in the Downtown Athletic Club for use as a break room.

Testimony also revealed that BCBS permits its employees to give going-away parties for employees leaving BCBS or transferring to other departments. The parties were, at times, held during breaks and planning could be done anytime during the day. On their breaks, employees would sometimes buy going-away gifts from nearby merchants.

At the time of the accident, Carrillo’s direct supervisor, Beth Lamping, was leaving Carrillo’s unit and transferring to another job at BCBS. Therefore, Carrillo and her co-employees planned a going-away party for Lamping and decided to buy her a coffee mug to replace the one she had broken.

At approximately 2:15 p.m. on March 2, 1993, Carrillo left the Donovan building to go to the Holter Museum gift shop, which is approximately one and one-half blocks away from the Donovan building, to buy Lamping a replacement mug. Carrillo was not required by BCBS or her supervisor to purchase a mug for Lamping. She intended to return to the Donovan building to pick up a co-worker, then proceed to the Fuller building during her break. However, while on her way to the Holter Museum, a car struck her while she was crossing Lawrence Street and she sustained the injuries for which she now seeks compensation.

Ultimately, the BCBS employees held the party for Lamping during work hours and Carrillo’s co-workers drove to Carrillo’s house to take her to the party.

After a trial, the Workers’ Compensation Court concluded that Carrillo was not entitled to workers’ compensation benefits because she did not suffer an injury arising out of and in the course of her employment.

DISCUSSION

Did the Workers’ Compensation Court err when it concluded that Carrillo’s injury did not arise out of and in the scope of her employment?

We review the Workers’ Compensation Court’s conclusions of law to determine whether they are correct. CNA Ins. Cos. v. Dunn (1995), 273 Mont. 295, 298, 902 P.2d 1014, 1016; Stordalen v. Ricci’s Food Farm (1993), 261 Mont. 256, 258, 862 P.2d 393, 394. We review the Workers’ Compensation Court’s findings of fact to determine whether substantial evidence supports the findings. Wunderlich v. Lumbermens Mut. Casualty Co. (1995), 270 Mont. 404, 408, 892 P.2d 563, 566 (citing Smith v. United Parcel Serv. (1992), 254 Mont. 71, 75, 835 P.2d 717, 720).

Section 39-71-407(1), MCA, provides in part that “[e]ach insurer is liable for the payment of compensation ... to an employee of an employer that it insures who receives an injury arising out of and in the course of employment.” (Emphasis added.) We have stated that:

No exact formula can be laid down which will automatically solve every case involving the question of whether an accident arises out of and in the course of employment, but each case must depend upon its particular facts and circumstances.

Partoll v. Anaconda Copper Mining Co. (1949), 122 Mont. 305, 310-11, 203 P.2d 974, 977.

In this case, the Workers’ Compensation Court relied on § 39-71-407(3), MCA, to reach its conclusion that Carrillo did not sustain her injury during the course and scope of employment. Section 39-71-407(3), MCA, pertains to traveling employees and provides that “[a]n employee who suffers an injury ... while traveling is not covered by this chapter unless” certain conditions are met. Subsections (a) and (b) of 39-71-407(3), MCA, delineate when such injuries would be compensable and provide:

(a)(i) the employer furnishes the transportation or the employee receives reimbursement... and
(ii) the travel is necessitated by and on behalf of the employer as an integral part or condition of the employment; or
(b) the travel is required by the employer as part of the employee’s job duties.

The Court first concluded that Carrillo was traveling when injured by stating:

The word “traveling” is not specifically defined in the Workers’ Compensation Act but in its ordinary and usual sense it means going from one place to another. Larson’s treatise on workers’ compensation similarly refers to “traveling employees” as “employees whose work entails travel away from the employer’s premises.” 1A Larson Workmen’s Compensation Sec. 25.00 at 5-275 (underlining added). Claimant was going from her place of employment to a different place.

The Court then analyzed § 39-71-407(3), MCA, and relevant cases to conclude that the injuries Carrillo suffered while traveling were not compensable.

Carrillo contends that the court incorrectly concluded that the traveling statute, § 39-71-407(3), MCA, controlled the case. Instead, she contends that she was not traveling, but was on a “break” when injured and therefore that she was within the course and scope of her employment. In support of her contention that she was on break, she refers to her uncontroverted testimony at trial. Her attorney asked: “If you were to say, ‘yes, I was on break,’ or ‘No, I was not on break,’ when you left the Donovan Building to go to the Holter Museum, would you say yes or no?” and she replied, ‘Yes.”

The Workers’ Compensation Court made no specific finding that Carrillo was or was not on break at the time of her injury. The only finding that refers to her afternoon break was Finding No. 10 in which the court stated that Carrillo

left the Donovan building to go to the Holter Museum gift shop, which is approximately a block and a half away from the Donovan building, to buy Lamping a replacement mug. She intended to return to the Donovan building to pick up a co-worker, then proceed to the Fuller building for a break.

Liberty contends that when the court found that Carrillo was going on break after getting the gift, the court in fact found that she was not on break while getting the gift and that substantial evidence supports that finding. However, there is nothing inconsistent with her being on break at the time of her injury and her intention to continue her break at another location later on. In fact, the uncontroverted evidence and the Workers’ Compensation Court’s findings compel just that conclusion.

In her testimony, Carrillo described the break policy as follows: The breaks were normally — sometimes you didn’t take a break, sometimes you took a 15- or a 20-minute break, sometimes you just needed to get away and some people would be gone longer than that. It was kind of an unwritten code.

When asked if she was free to take a break when she wanted during the break period, which she said occurred between “2:00 to 3:30 or something,” Carrillo replied yes and also testified that she was free to leave the building and to go anywhere she wanted.

Here, Carrillo left the Donovan building at approximately 2:15 p.m. which is within the period of time that afternoon breaks are normally taken by BCBS employees. She planned to walk to a gift shop one and one-half blocks away and testified that she knew exactly what she needed to find. While true that Carrillo testified, as the Workers’ Compensation Court found, that she was going to return to the Donovan building to pick up a co-worker, then proceed to the Fuller building “on break,” she also testified that it would take her, “two to three minutes to get to the Holter Museum; two to three minutes to look for the mug; two to three minutes to get back to the Donovan Building, and another two to three minutes to pick up Sandy and get over to the Fuller Building; two to three minutes to pick up whatever we were going to buy there at the Fuller Building, and another two to three minutes to get back.” Therefore, she testified that her planned activities would have taken between twelve and eighteen minutes to complete. And, had Carrillo not been injured, she would have completed her activities within the time allocated for BCBS employee breaks — fifteen to twenty minutes.

Therefore, based on the undisputed evidence and the Workers’ Compensation Court’s finding that this was a typical way in which BCBS employees spent their break time, we conclude that Carrillo was on break when she was walking to the Holter museum and was hit by a car and injured.

Having concluded that Carrillo was on break when injured, we must determine if and when an employee injured during an authorized break is within the course and scope of employment. We have not previously decided this issue. In fact, only two Montana cases involve somewhat similar circumstances—Strickland v. State Compensation Mutual Ins. Fund (1995), 273 Mont. 254, 901 P.2d 1391, and Geary v. Anaconda Copper Mining Co. (1947), 120 Mont. 485, 188 P.2d 185.

In Geary, the worker suffered an eye injury during a lunch hour game of handball on the employer’s premises. The employer required the employees to remain on the premises in an “on call” status during the lunch period. Some of the employees had been playing handball during the lunch hour for approximately three months prior to the accident. On some occasions, the claimant’s foreman had participated in the game and in fact was present on the day of the accident. Geary, 120 Mont. at 486, 188 P.2d at 185. In that case, we looked at case law from other jurisdictions, indicated the importance of the employer’s knowledge of the activity and the employer’s requirement that the employees remain on call, noted that the Workers’ Compensation Act was to be construed liberally, and found the injuries compensable. Geary, 120 Mont. at 490, 188 P.2d at 187.

While we awarded compensation in Geary, it differs from this case in several respects. When we decided Geary, a different version of the Act applied and we were required to liberally construe the Act. Most importantly however, according to Larson’s Workmen’s Compensation Law, Geary differs because the injury occurred during a lunch break rather than during a “coffee break.”

In his treatise, Larson differentiates between injuries which occur during unpaid lunch breaks and those which occur during shorter, paid coffee breaks. See 1 Larson’s Workmen’s Compensation Law, § 15.51 at 4-157, and § 15.54 (1996). Specifically, unpaid lunch breaks are treated like trips at the beginning or end of a workday and involve the “going to and from” rule with its exceptions, whereas shorter paid breaks do not involve the “going to and from” rule with its exceptions. See generally 1 Larson, § 15.51; § 15.54.

The Montana Department of Labor and Industry also recognizes the distinction between coffee breaks and longer meal periods:

Bona fide meal periods. Bona fide meal periods are not work time. Bona fide meals do not include coffee breaks or time for snacks. These are rest periods. The employee must be completely relieved from duty for the purposes of eating regular meals. Ordinarily 30 minutes or more is long enough for a bona fide meal period. A shorter period may be long enough under special circumstances. The employee is not relieved if he is required to perform any duties, whether active or inactive while eating. For example, an office employee who is required to be at his machine is working while eating.

Rule 24.16.1006(2)(a), ARM.

Larson concludes that this difference between coffee breaks and lunch breaks is justified “because normally the duration of the lunch period, when lunch is taken off the premises, is so substantial and the employee’s freedom of movement so complete that the obligations and controls of employment can justifiably be said to be in suspension during this interval.” 1 Larson, § 15.54 at 4-183.

We have previously determined that § 39-71-407(3), MCA, the statute relied on by the Workers’ Compensation Court to decide this case, codified Montana’s going to and from rule:

In 1987, the legislature amended § 39-71-407, MCA, to codify exceptions to the general workers’ compensation rule that actions occurring when employees are going to or coming from work are not within the course and scope of their employment.

Dale v. Trade Street, Inc. (1993), 258 Mont. 349, 352, 854 P.2d 828, 829. Therefore, according to Larson’s analysis of the difference between lunch breaks and coffee breaks, while § 39-71-407(3), MCA — the codification of Montana’s going to and from rule — applies to injuries sustained during lunch hours, it does not concern injuries which a worker suffers while on coffee break. Because we have previously determined that Carrillo was on break when injured, the Workers’ Compensation Court erred when it decided this case based solely on Carrillo’s failure to meet the requirements of § 39-71-407(3), MCA. Reliance on this statute was also erroneous because it first required the Workers’ Compensation Court to conclude that Carrillo was “traveling” at the time of her injury. In order to arrive at that conclusion, the court relied on its common understanding of the term and a misapplication of Larson’s reference to “traveling employees” at 1A Larson’s Workmen’s Compensation Law, § 25.00 at 5-275. However, according to Black’s Law Dictionary 1500 (6th ed. 1990), to travel is “[t]o go from one place to another at a distance; to journey.” It does not seem to include trips of one and one-half blocks.

Recently, in Strickland, we considered whether a person injured after having left work during her work shift was injured during the course and scope ofher employment. Strickland, 273 Mont. at 257-59, 901 P.2d at 1393-94. We held that a person injured while on a personal errand was not acting within the course and scope of her employment when injured. Strickland, 273 Mont. at 259, 901 P.2d at 1394. In that case, we agreed with both the Workers’ Compensation Court’s finding that claimant left work on a personal errand and with its conclusion that claimant was outside the course and scope of her employment.

In Strickland we used § 39-71-407(3), MCA, as did the Workers’ Compensation Court, to conclude that claimant’s injuries were outside the scope of employment; however, in Strickland, we did not determine whether an injury suffered while on a break was compensable. Strickland neither contested the applicability of § 39-71-407(3), MCA, nor did she contend that she was injured while on break. Instead, Strickland asked us to conclude that she was within the course and scope of her employment despite the determination that she was on a personal errand. Strickland, 273 Mont. at 258, 901 P.2d at 1393.

Because neither Strickland nor Geary apply, we have not specifically dealt with the question presented here. However, case law from other jurisdictions and Larson’s discuss the issue. Larson states:

[N]ow that the coffee break or rest break has become a fixture of many kinds of employment, close questions continue to arise on the compensability of injuries occurring off the premises during rest periods or coffee breaks of various durations and subject to various conditions. It is clear that one cannot announce an all-purpose “coffee break rule,” since there are too many variables that could affect the result ... [such as] the duration ... whether the interval is a right fixed by the employment contract, whether it is a paid interval, whether there are restrictions on where the employee can go during the break, and whether the employee’s activity during this period constituted a substantial personal deviation.
The operative principle which should be used to draw the line here is this: If the employer, in all the circumstances, including duration, shortness of the off-premises distance, and limitations on off-premises activity during the interval can be deemed to have retained authority over the employee, the off-premises injury may be found to be within the course and scope of employment.

1 Larson, § 15.54, at 4-183 through -85 (footnotes omitted) (emphasis added).

Consistent with Larson, several states allow compensation for injuries sustained during coffee breaks. For example, in Jordan v. Western Electric Co. (Or. App. 1970), 463 P.2d 598, 599, claimant suffered an injury off the premises while returning from a coffee break. While break facilities were available on the premises, employees customarily went to the nearest restaurant, approximately two and one-half blocks away. Jordan, 463 P.2d at 599. An award of compensation was affirmed because the coffee break was for the employer’s benefit as well as the employee’s, it was contemplated under the contract of employment, it was acquiesced in by the employer, there was an element of control because the supervisor accompanied the employees, and the claimant was paid for the coffee break. Jordan, 463 P.2d at 601-02.

In Mellis v. McEwen (Or. 1985), 703 P.2d 255, an employee suffered an injury in a public cafeteria during a fifteen-minute break. The Oregon court applied the Jordan factors, found claimant’s injury was within the course and scope of employment, and stated: “[W]e find that a 15 minute break is a ‘typical kind of coffee break activity that is contemplated by an employer’ and that claimant’s activity was not a departure from the employment relationship.” Mellis, 703 P.2d at 257.

In Roache v. Industrial Commission of the State of Colorado (Colo. App. 1986), 729 P.2d 991, the claimant left her work place and was injured in an explosion in a convenience store where she had gone during a fifteen-minute paid break. The court adopted the Larson analysis and awarded compensation:

Determination of these issues rests upon inquiry into such matters as: whether the break period is of a duration so short as to support the inference that employment activities were virtually uninterrupted; whether it is provided for by employment contract; whether it is a paid interval; whether the employer permits off-premises breaks; whether the off-premises location is in close proximity to the employment site; and whether there are limitations on where the employee may go during break.
... The break period was of short duration and it was a paid interval. The store was located not far from the claimant’s place of employment, and the visit was for the basic purpose of rest and confinement.

Roache, 729 P.2d at 992 (citations omitted).

In a California case, an employee suffered an injury when, during a paid coffee break, she and several other employees went swimming in a canal a short distance from the employer’s property. State Comp. Ins. Fund v. Workmen’s Comp. Appeals Bd. (Cal. 1967), 434 P.2d 619, 620. The court found that the employer at least tolerated similar acts and awarded compensation. State Comp. Ins. Fund, 434 P.2d at 621.

Therefore, other courts have found injuries which occurred dining coffee breaks compensable and in doing so have looked to the considerations set forth in Larson. One of those factors is whether the employee was paid during the break. An uncompensated employee should be free to do whatever he or she wishes, whereas a paid employee is not. See King Waterproofing Co. v. Slovksy (Md. 1987), 524 A.2d 1245, 1249 (distinguishing between short paid breaks and longer unpaid lunch breaks). Carrillo testified that BCBS paid her during her breaks, and therefore, Carrillo satisfies this factor.

As to Larson’s criteria that the right to a break be fixed in the employment contract, Carrillo testified that BCBS employees were entitled to two breaks, one in the morning and one in the afternoon. Not only did Carrillo testify to her right to breaks, but also, the Montana Department of Labor and Industry Regulations defines rest period as hours “worked”:

Rest. Rest periods of short duration, running from 5 minutes to about 20 minutes, are common in industry. They promote efficiency of the employee and are customarily paid as working time. They must be counted as hours of work. Compensable time of rest periods may not be offset against other working time such as compensable waiting time or on-call time.

Rule 24.16.1006(1), ARM (emphasis added). The Department of Labor also recognizes that employers provide breaks to their employees, that these breaks serve the employer’s interests, and that they are not a departure from work time.

A third factor is “whether there are restrictions on where the employee can go during the break.” Liberty asserts that evidence does not show that Carrillo’s employer exercised any control over her activity during that break, but instead shows that it simply set general boundaries within which the break could be taken and set limitations on the duration of the break. However, while some of the testimony supports Liberty’s assertion, testimony also reveals that Carrillo had in the past been asked by her supervisor not to leave the building because she might be needed and had also been asked to postpone her break. Furthermore, Carrillo testified that, on occasion, someone had been dispatched to find her while on break and to bring her back. Therefore, although BCBS only set boundaries within which the break could be taken and set limitations on the duration of the breaks, these limitations amounted to the requisite “restrictions on where the employee can go during the break” and therefore, Carrillo also satisfies this element.

Finally, we look at whether the employee’s activity during this period constituted a substantial personal deviation. In this case, Carrillo’s injury occurred while she walked to a gift shop one and one-half blocks away from her work place. Carrillo knew exactly what she needed and testified that her planned activities would have taken between twelve and eighteen minutes to complete. Carrillo also testified that her employer not only acquiesced in the employees’ departure from the premises during break, but gave them little choice because of the inadequate break facilities at the Donovan building where she worked. Finally, she also testified that she walked during ninety percent of her breaks and that her director walked with her on occasion.

Carrillo also testified about the parties that employees at BCBS held for others who were transferring or leaving. Testimony revealed that employees expected these parties, that both the planning and the parties occurred during work hours, and that supervisors knew about and participated in these parties. In this case, the employees planned a party for a supervisor who was leaving and planned to give her a particular mug; Carrillo went to purchase the mug at the Holter gift shop when she was injured. Because Carrillo usually walked on breaks, because she would have been on a break of normal duration if not injured, and because she went to the gift shop to look for a gift for use at one of the BCBS parties, her activity during the break period did not constitute a substantial personal deviation.

Therefore, Carrillo meets the factors Larson sets forth for determining whether one’s injury during a coffee break is within the course and scope of employment. Carrillo had a right to a break for which she was paid; BCBS placed restrictions on where the employees could go during the break; and Carrillo’s activity did not constitute a substantial personal deviation from her employment.

For these reasons, we conclude that Carrillo was acting within the course and scope of her employment when injured and the Workers’ Compensation Court erred when it concluded otherwise. We therefore reverse the order and judgment of the Workers’ Compensation Court.

CHIEF JUSTICE TURNAGE, JUSTICES NELSON and LEAPHART concur. JUSTICE HUNT did not participate in this decision.

JUSTICE ERDMANN

dissenting.

I respectfully dissent from the Court’s opinion.

I do not agree with the majority that the Workers’ Compensation Court made no finding that Carrillo was or was not on her break at the time of her injury. In Finding of Fact No. 10, the Workers’ Compensation Court found that Carrillo left the Donovan building to go to the Holter Museum gift shop, after which she intended to return to the Donovan building to pick up a co-worker and then go on break. This finding accurately reflects Carrillo’s testimony that after she purchased the mug she planned to return to the Donovan building to go on break with her co-worker.

Carrillo’s deposition states as follows:

Q. Why don’t you tell me just in your own words, take as long or short as you like, what happened on March 2nd, 1993 when you got hurt. Why don’t you start with what you were doing just before you went on break.
A. Well, we had just finished or we had started to discuss and were contemplating what we were going to do for Beth, my supervisor, for her party and we were trying to decide who we were going to have come, what we were going to have, what kind of present, if we were still going to continue to look for the present that I hadn’t been able to. find. I had spoken with — I don’t remember if it was Kelly or somebody there — they all knew that I had anticipated going up to the Holter Museum to look for the present for Beth. I had talked to Sandy before I left the building and asked her if she wanted to come along and she said “No.”
Q. Excuse me, Sandy Warren?
A. Yes. And she said, “No.” She says, ‘When you get through with the Holter Museum, why don’t you come back, pick me up, and we’ll go over to the Fuller Building on break,” and I said “Okay,” and I left the building.
Q. You left the building and started to cross the intersection and you were hit by a vehicle?
A. Right.

Carrillo testified to the same effect at trial:

Q. This morning you testified about Sandy Warren calling and asking you to go on break, and I believe you told her that you wanted to go to the Holter Museum first; is that right?
A. Yes.
Q. You agree, don’t you, that it was your intent after you went to the Holter Museum that you were going to go back and get Sandy and then you were going to go on break on the day you were hit by that vehicle?
A. Would you rephrase that, please?
Q. Yes.
[Court reporter read back the previous question]
A. Yes.

Later in her testimony, Carrillo’s attorney attempted to rehabilitate her deposition and her earlier testimony with the following question and answer:

Q. Because it’s critical to this situation, if you were to say, ‘Yes, I was on break,” or “No, I was not on break,” when you left the Donovan Building to go to the Holter Museum, would you say yes or no?
A. Yes.

The majority refers to this latter question and answer as Carrillo’s “uncontroverted testimony at trial” and relies on it exclusively. The record is clear, however, that Carrillo herself controverted that testimony.

This Court’s function on review is confined to determining whether there is substantial evidence to support the findings and not to determine whether there is sufficient evidence to support contrary findings. Davis v. Jones (1985), 216 Mont. 300, 303, 701 P.2d 351, 353. Here, the Workers’ Compensation Court observed Carrillo’s demeanor, assessed her conflicting testimony and made a finding accepting that portion of her testimony that she intended to go on break after shopping. There is substantial evidence in the record — through Carrillo’s own testimony — that she was on a personal errand when she was injured and that she intended to start her break when she returned to the Donovan building. The majority ignores Carrillo’s testimony and the standard this Court must apply when conflicting evidence exists. Where there is conflicting evidence, it is the Workers’ Compensation Court’s duty, and not this Court’s, to resolve such conflicts. Olson v. Westfork Properties, Inc. (1976), 171 Mont. 154, 157, 557 P.2d 821, 823.

This Court reviews the Workers’ Compensation Court’s conclusions of law to determine whether they are correct. CNA Ins. Co. v. Dunn (1995), 273 Mont. 295, 298, 902 P.2d 1014, 1016. In the present case, I would hold that the Workers’ Compensation Court reached the correct result, although it improperly relied on § 39-71-407(3), MCA, in doing so. The Workers’ Compensation Court analyzed Carrillo as a “traveling employee” under § 39-71-407(3), MCA, and concluded that her injury did not arise out of and in the course of employment. A “traveling employee” is defined as an employee “whose work entails travel away from the employer’s premises.” See Larson’s Workmen’s Compensation Law, vol. 1A, § 25.00 at 5-275 (1996). As Carrillo was not required to travel from the Donovan building, I agree with the majority that § 39-71-407(3), MCA, is not applicable to this case.

Section 39-71-407(1), MCA (1991), states in part that “[e]very insurer is liable for the payment of compensation ... to an employee ... who receives an injury arising out of and in the course of his employment.” (Emphasis added.) The injuries must have arisen out of and in the course of her employment in order to impose liability on the insurer.

In Courser v. Darby School District No. 1 (1984), 214 Mont. 13, 692 P.2d 417, we identified four controlling factors to determine whether an injury is work-related: (1) whether the activity was undertaken at the employer’s request; (2) whether the employer, either directly or indirectly, compelled the employee’s attendance at the activity; (3) whether the employer controlled or participated in the activity; and (4) whether both employer and employee mutually benefited from the activity. Courser, 692 P.2d at 419. Applying the facts of the present case to the above factors leads to the clear conclusion that Carrillo’s injuries were not work-related.

Blue Cross Blue Shield (BCBS) did not request that Carrillo make the trip to the Holter Museum to purchase the coffee mug nor did it directly or indirectly compel the errand. Carrillo’s supervisors did not control or participate in the quest for the mug and even though the gift and employee party may have boosted employee morale, such a general benefit to the employer is not enough by itself to bring such recreational activity within the course of employment boundaries. See Larson’s Workmen’s Compensation Law, vol. 1A, §§ 22.33 at 5-170 and -171 (1996). This Court has previously held that a person injured while on a personal errand is not acting within the course and scope of her employment when injured. Strickland v. State Comp. Mut. Ins. Fund (1995), 273 Mont. 254, 259, 901 P.2d 1391, 1394.

In the present case, the majority errs by making a finding of fact that Carrillo was on her break instead of reviewing whether substantial evidence supports the Workers’ Compensation Court’s finding that she intended to go on break after returning from the Holter Museum gift shop. Not surprisingly, the majority then places much reliance on Professor Larson’s discussion of whether injuries which occur off the employer’s premises during rest periods or coffee breaks are compensable. The majority’s entire discussion of the Larson criteria is premised on its own finding that Carrillo was on her break when the injury occurred. On the contrary, I submit that substantial evidence supports the Workers’ Compensation Court’s finding that she intended to go on break after returning from the museum gift shop, and therefore, the Larson criteria do not apply. Nevertheless, even assuming arguendo that the majority is correct and Carrillo was on her break, her injuries are not compensable even under the Larson criteria.

Larson sets forth the following factors: (1) the duration of the break and whether the interval is a right fixed by the employment contract; (2) whether it is a paid interval; (3) whether there are restrictions on where the employee can go during the break; and (4) whether the employee’s activity during the break period constitutes a substantial personal deviation. Larson, vol. 1, § 15.54, at 4-184 and -185. Larson states that:

If the employer, in all the circumstances, including duration, shortness of the off-premises distance, and limitations on off-premises activity during the interval can be deemed to have retained authority over the employee, the off-premises injury may be found to be within the course of employment.

Larson, vol. 1, § 15.54, at 4-185.

In the present case, I agree that as a BCBS employee Carrillo was entitled to a break and was paid for the time. However, I do not agree with the majority that BCBS restricted Carrillo on where she could go during the break. The majority opinion correctly notes that Carrillo testified that the breaks were not required and that she was free to leave the building during her break and to go anywhere she wanted. If she chose to undertake a personal errand during her break and was injured, she was outside the scope of her employment. Moreover, I do not agree with the majority’s conclusion that her activity during the break did not constitute a substantial personal deviation. On the contrary, Carrillo decided to run a personal errand beyond any authority retained by BCBS. Carrillo was not required by BCBS or her supervisor to purchase the mug and, even though the journey was only one and one-half blocks away from the work place, the purpose was a personal one. The trip to obtain the mug therefore constituted a substantial personal deviation from her employment.

The Workers’ Compensation Court made a finding that Carrillo was not on her break when the injury occurred and that finding is supported by substantial evidence, including Carrillo’s own testimony. Under the traditional Courser criteria and based on our previous holding in Strickland, I would hold that Carrillo was injured when she was on a personal errand outside the scope of her employment with BCBS. Her injuries did not arise out of the course of her employment and therefore are not compensable.

I would affirm the judgment below.

JUSTICE GRAY joins in the foregoing dissenting opinion.

JUSTICE TRIEWEILER

specially concurring.

I submit the following concurring opinion in response to the dissent.

The dissent seems to agree that Carol Carrillo’s disability benefits were denied by the Workers’ Compensation Comrt for the wrong reason. The dissent then goes on to argue that that incorrect decision can be affirmed by taking a portion of her testimony out of context and making a semantic argument that it creates a conflict with other testimony regarding whether she was or was not on break at the time of her injury.

However, a review of the entire record discloses that there is only one point in the entire trial at which any witness is asked directly whether Carol Carrillo was or was not on break at the time she was injured. That point involved the question and answer cited in the majority opinion and relied on for its result.

Nowhere in the entire record did anyone testify that Carol Carrillo was not on break at the time of her injury.

On the other hand, in support of her unequivocal testimony that she was on break, the following undisputed facts were established by her testimony and the testimony of others:

1. Afternoon breaks were allowed during the period of time from 1:30 to 3:00 p.m.

2. The length of time for a break was normally from fifteen to twenty minutes.

3. During breaks employees were encouraged to leave their work stations and even leave the building.

4. Seventy-five to eighty percent of Blue Cross’s employees left the building during their break.

5. Carol Carrillo normally walked during her break and had she not been on her way to the Holter Museum to pick up a mug for her supervisor’s party she would, in all likelihood, still have been walking at the exact time and place where she was injured. She walked ninety percent of the time during her afternoon break.

6. Carol Carrillo’s accident occurred at 2:15 p.m. within the normal parameters of her afternoon break.

7. Her break was something that was encouraged and provided as a right of employment in the employee handbook, and during her break she was paid.

8. Although she had to let other employees know where she was going in case her employer needed to recall her, she was free to go where she chose on break and it was not uncommon for employees to go to the walking mall, the Sweetgrass Bakery, Big Al’s, the Common Market, the Federal Building, the City-County Building, or to other local business establishments during their break.

Some confusion has been created and it is, at best, minimal confusion, due to the phraseology of questions or answers in which she stated that after returning from the Museum she intended to pick up a fellow employee and go to the Fuller Building to use their vending machines while on break. At one place in the transcript she states that she intended to go to the Fuller Building while “on break.” At another place she either states or was told that they would go to the Fuller Building for break. However, there is absolutely nowhere in the transcript where she or anyone else states that she was not already on break at the time that she was going to the Holter Museum. Furthermore, there is nothing inconsistent with starting her break by picking up a gift at the Holter Museum and continuing her break after picking up her co-employee and going to the Fuller Building to pick up refreshments. The record clearly establishes that all of these matters could have been accomplished well within the time allowed for afternoon breaks.

More importantly, neither is there any finding entered by the Workers’ Compensation Court to the effect that Carol was not on break at the time of her injury. The finding made by the court and relied on by the dissent is that after picking up her friend she intended to go to the Fuller Building for break. However, once again, that is not inconsistent with the fact that she was already on break prior to picking up her friend. Had she not been on break she could not have left the building in the first place.

Totally inconsistent with the dissent are the following findings made by the Workers’ Compensation Court:

1. Blue Cross Blue Shield provided its employees with a fifteen minute break in the morning and another fifteen minute break in the afternoon. (Finding No. 4)

2. Employees at the Donovan Building often walked to the Fuller Building or other nearby locations (Coney Island, the Gold Bar) to take their breaks. (Finding No. 5)

3. A substantial number of employees walked during their breaks. (Finding No. 6)

4. On their breaks, employees would sometimes buy going-away gifts from nearby merchants. (Finding No. 7)

5. Claimant and her co-employees planned a going-away party for claimant’s supervisor and decided to buy her a replacement coffee mug for the one she had broken. (Finding No. 9)

6. At approximately 2:15 p.m. on March 2, 1993, claimant left the Donovan Building to go to the Holter Museum gift shop, which is approximately a block and a half away from the Donovan Building, to buy Lamping a replacement mug. (Finding No. 10)

I submit that there is no other conclusion that can be drawn from these findings in combination with the undisputed testimony other than that Carrillo was on break at the time of her injury.


author: JUSTICE LEAPHART,

text:
    MICHAEL SCOTT STILSON, Petitioner, v. STATE OF MONTANA, Respondent.
    No. 96-071.
    Rehearing Denied August 8, 1996.
    Ordered June 25, 1996.
    53 St.Rep. 572.
    278 Mont. 20.
    924 P.2d 238.
   OPINION AND ORDER

Petitioner Michael Scott Stilson has filed a petition for post-conviction relief alleging that convictions he received in the Fourth and Eighth Judicial District Courts violated his rights to not be twice put in jeopardy guaranteed by the Fourteenth and Fifth Amendments to the United States Constitution, and Article II, Section 25, of the Montana Constitution.

On March 26, 1991, the State filed an Information in the First Judicial District Court charging Stilson with the crime of issuing a bad check, a felony, common scheme, for numerous bad checks written in Lewis and Clark County. On the same day Stilson pled guilty to the charge, and on March 27, 1991, the District Court sentenced Stilson to a three-year deferred imposition of sentence.

On January 29,1991, the State filed an Information in the Fourth Judicial District Court charging Stilson with issuing more than three bad checks in Missoula County, a felony, common scheme. On April 1, 1991, Stilson pled guilty to the charge, and on May 20, 1991, the District Court sentenced Stilson to a suspended sentence of six years confinement to run consecutive to the sentence imposed by the First Judicial District Court.

On May 28, 1991, the State filed an Information in the Eighth Judicial District Court charging Stilson with issuing a bad check, a felony, common scheme. While the Cascade County Information specifically referenced only a single bad check written in Cascade County, it listed as witnesses individuals from six separate Great Falls businesses. On June 14, 1991, Stilson pled guilty to the charge and on the same day the District Court sentenced him to ten years confinement to run consecutive to the sentences imposed in the First and Fourth Judicial District Courts. Execution of the sentence was suspended. The judgment indicated that Stilson wrote 20-25 checks in the Great Falls area and that the total checks written in Cascade County totaled $2,961.

Stilson also wrote bad checks in Yellowstone and Butte-Silver Bow Counties. Stilson was not prosecuted in either of those counties but the judgment entered by the Fourth Judicial District Court ordered Stilson to pay restitution for those bad checks.

On February 15,1996, Stilson filed this petition for post-conviction relief alleging his convictions in the First, Fourth, and Eighth Judicial District Courts were for the same common scheme and, therefore, that the Fourth and Eighth Judicial District Court convictions violated his double jeopardy rights.

The State argues that Stilson’s double jeopardy claims are waived because he failed to raise them prior to entering his guilty pleas. Stilson argues that he did not waive his double jeopardy claims when he pled guilty because his claims are jurisdictional.

It is well established that a plea of guilty which is voluntary and understandingly made constitutes a waiver of nonjurisdictional defects and defenses, including claims of constitutional violations which occurred prior to the plea. Hagan v. State (1994), 265 Mont. 31, 35, 873 P.2d 1385, 1387 (citing State v. Turcotte (1974), 164 Mont. 426, 428, 524 P.2d 787, 788). In Hagan we held that the jurisdictional grounds exception applies to “those cases in which the district court could determine that the government lacked the power to bring the indictment at the time of accepting the guilty plea from the face of the indictment or from the record.” Hagan, 873 P.2d at 1388 (quoting United States v. Cortez (9th Cir. 1992), 973 F.2d 764, 767).

When Stilson pled guilty and was sentenced in Cascade County the District Court had before it a copy of the pre-sentence investigation report prepared with regard to Stilson’s previous sentencing in Missoula County. The report also referenced Stilson’s conviction in Lewis and Clark County.

Thus, we conclude that at the time the Eighth Judicial District Court accepted Stilson’s guilty plea the record before it contained his two prior convictions and was sufficient for the court to determine whether the government lacked the power to bring the charges at issue due to the constitutional prohibitions against placing a person twice in jeopardy. We conclude that Stilson has not waived his double jeopardy claim and therefore proceed to address the merits of his claim.

Stilson claims that he engaged in one common scheme to write bad checks in five different counties and the only thing that separates his crime into parts is geography. He argues that “common scheme” is an element of the crimes charged and that nothing in the charges evidences a different continuing criminal design. Stilson maintains that since he was convicted and punished for the common scheme in Lewis and Clark County, he cannot be prosecuted or punished again.

The State argues that double jeopardy protections prohibit multiple punishments for the same offense, and that in this case the Legislature intended “issuing a bad check” to be the offense, not “common scheme.” The State asserts that “common scheme” is not an element of the offense but rather a sentence enhancement provision which determines if the offense is a misdemeanor or felony. The State maintains that the offense in each county did not require proof of acts committed in the other counties and therefore they were separate and distinct offenses. According to the State, convicting a defendant of one common scheme does not foreclose convictions of additional common schemes in different counties.

In State v. Crowder (1991), 248 Mont. 169, 810 P.2d 299, we stated that in examining questions of double jeopardy, this Court has consistently applied the test set forth in Blockburger v. United States (1932), 284 U.S. 299, 52 S. Ct. 180, 76 L. Ed. 306. Crowder, 810 P.2d at 304. We noted that Blockburger dealt with two different double jeopardy issues — one was whether the defendant could be convicted of violating two different statutory provisions arising from a single sale of dangerous drugs, and the second was whether the defendant could be convicted of two counts of selling a dangerous drug under a single provision of the Narcotics Act. Crowder, 810 P.2d at 304-05.

When two distinct statutory provisions are involved, the test to determine whether there are two offenses or only one is whether each provision requires proof of a fact which the other does not. Crowder, 810 P.2d at 304 (citing Blockburger, 284 U.S. at 304, 52 S.Ct. at 182). The U.S. Supreme Court explained this “elements test” by stating that:

A single act may be an offense against two statutes; and if each statute requires proof of an additional fact which the other does not, an acquittal or conviction under either statute does not exempt the defendant from prosecution and punishment under the other.

Blockburger, 284 U.S. at 304, 52 S.Ct. at 182.

This Court has employed the “elements test” to determine whether a defendant can be charged and convicted of violating two statutes for the same act or transaction. See State v. Wolfe (1991), 250 Mont. 400, 821 P.2d 339 (holding that a defendant can be convicted of both possession of explosives and criminal mischief); State v. Clawson (1989), 239 Mont. 413, 781 P.2d 267 (holding that a defendant can be convicted of both sexual intercourse without consent and aggravated kidnapping); State v. Long (1986), 223 Mont. 502, 726 P.2d 1364 (holding that a defendant can be convicted of both misdemeanor assault and sexual assault).

In Crowder, however, we dealt with a situation similar to the second Blockburger issue. Crowder was charged with two violations of the same statutory provision (possession of dangerous drugs) and we were faced with the question of whether Crowder’s possession of drugs on his person and possession of drugs on his property constituted two separate acts of possession. Crowder asserted that principles of fundamental fairness required that he be charged only once for conduct which amounted to the same transaction. Crowder, 810 P.2d at 304.

We again looked to the Blockburger Court which addressed the issue as follows:

Each of several successive sales constitutes a distinct offense, however, closely they may follow each other.... [W]hen the impulse is single, but one indictment lies, no matter how long the action may continue. If successive impulses are separately given, even though all unite in swelling a common stream of action, separate indictments lie.

Blockburger, 284 U.S. at 302, 52 S.Ct. at 181 (citation omitted). In affirming the convictions, the U.S. Supreme Court examined the legislative intent behind the Narcotics Act and concluded that the statute did not punish engaging in the business of selling dangerous drugs, but rather penalized any sale. Blockburger, 284 U.S. at 302, 52 S.Ct. at 181.

We adopted a similar analysis in Crowder and articulated a second test when only one statutory provision is involved. To determine the “allowable unit of prosecution” courts look to legislative intent since discretion is with the legislature to impose punishments, subject only to constitutional limitations. Crowder, 810 P.2d at 305 (citing Bell v. United States (1955), 349 U.S. 81, 82, 75 S. Ct. 620, 622, 99 L. Ed. 905, 910). In Crowder we held that the Legislature intended to punish each separate possession of dangerous drugs and concluded that the district court did not err in failing to join the separate counts of possession on the person and possession on the premises. Crowder, 810 P.2d at 305-06.

The facts of the present case align themselves with Crowder in that Stilson was charged under the same statute, § 45-6-316, MCA (1989), and was convicted in all three different counties of issuing a bad check, a felony, common scheme. Thus, the question is whether the Legislature intended that a defendant could be punished for more than one common scheme.

We acknowledge the fact that in State v. Fleming (1987), 225 Mont. 48, 730 P.2d 1178, we stated that “[c]ommon scheme is clearly an element to be charged and proven under § 45-6-316, MCA, as it is specifically mentioned in subsection (3) of the statute.” Fleming, 730 P.2d at 1180. Therefore, we do not agree with the State’s contention that “common scheme” is merely a sentence enhancement provision which determines if the crime is a misdemeanor or felony. Nevertheless, the focus of our analysis still remains whether or not a defendant may be charged with more than one common scheme.

Stilson’s reliance on Fleming and State v. McHugh (1985), 215 Mont. 296, 697 P.2d 466, is misplaced. In both of those cases the defendants were charged in only one county with one count of issuing bad checks as part of a common scheme and the defendants disputed that their conduct constituted a common scheme. We held that the acts of issuing multiple bad checks are a common scheme if the acts were “either individually incomplete such that they show that a single crime had been committed, or [were] acts which closely follow [ed] one another evidencing a continuing criminal design.” Fleming, 730 P.2d at 1180. Even though we upheld the convictions and concluded that the defendants’ conduct constituted a common scheme, we did not address nor foreclose the possibility that a defendant could, under the appropriate facts and circumstances, be convicted of more than one common scheme.

Stilson argues that the Legislature did not intend to allow the State to divide one common scheme into multiple common schemes and multiple felony violations. According to Stilson, the Legislature did not provide in § 45-6-316, MCA, or anywhere else in the Code, a basis to divide a single common scheme of issuing bad checks into multiple common schemes.

While we agree with Stilson that the Code does not provide for multiple common schemes, we conclude that neither has the legislature foreclosed such a possibility. Under the appropriate facts and circumstances, we conclude that double jeopardy protections do not necessarily prevent a defendant who has been convicted of a common scheme in one county from being convicted of another common scheme in a different county.

In this case Stilson was charged in each county for only those checks written in that particular county and the bad checks written in each county were separate and distinct “common scheme” offenses. Stilson wrote bad checks to a number of different vendors in each county and, when taken together, such a series of acts provides the basis for the charge of felony common scheme in each county. The evidence required for the State to prove the offense in each county was different and specific to each county and the series of acts or transactions in each county were different from those in the other jurisdictions, both individually and as a group.

' Thus, under the specific facts and circumstances of this case, Stilson committed the crime of writing a bad check, a felony, common scheme, in each of the jurisdictions for which he was charged and we hold that the convictions he received in the Fourth and Eighth Judicial District Courts did not violate his double jeopardy rights. Therefore,

IT IS HEREBY ORDERED that Stilson’s petition for post-conviction relief is DENIED.

CHIEF JUSTICE TURNAGE, JUSTICES ERDMANN, NELSON and GRAY concur.

JUSTICE LEAPHART,

dissenting.

I would grant the Petition for Post-Conviction relief on double jeopardy grounds with regard to the conviction of Issuing a Bad Check, a Felony in the Eighth Judicial District Court, Cause No. ADC-91-56. Under State v. Hagan (1994), 265 Mont. 31, 873 P.2d 1385, this Court held that jurisdictional claims are narrowly limited to “those cases in which the district court could determine that the government lacked the power to bring the indictment at the time of accepting the guilty plea from the face of the indictment or from the record.” Hagan, 265 Mont. at 36, 873 P.2d at 1388 (citing United States v. Broce (1989), 488 U.S. 563, 109 S.Ct. 757, 102 L.Ed.2d 927. The State does not contest Petitioner’s assertion that the Eighth Judicial District Court accepted Mr. Stilson’s guilty plea on the same day that it sentenced him. On that same day, the Eighth Judicial District Court had before it the Pre-Sentence Investigation Report (PSI) prepared with regard to Stilson’s previous conviction in Missoula County for the same check writing scheme! The Missoula County PSI in turn references the fact that Stilson was convicted in Lewis & Clark County with regard to the same check writing scheme. Thus, it is clear to me that when the Eighth Judicial District Court accepted Stilson’s plea of guilty on June 14, 1991, the “record” of the two prior convictions was both available and sufficient for the court to determine that, due to the constitutional prohibitions against placing a person twice in jeopardy, the government lacked the power to bring the charges at issue.

As to whether defendant’s state-wide check writing conduct can be broken into separate “common schemes” in which each county charges a common scheme limited to the checks written in that particular county, I note that the Cascade County Information CDC 91-096, charges defendant with Issuing a Bad Check, a Felony, a common scheme. The Information then makes reference to one check which was issued in Cascade County. It is axiomatic that more than one check is necessary in order to constitute a “common scheme.” One cannot tell from the face of the Information whether the other checks necessary to constitute the “common scheme” were written in Cascade County or were the same checks which were the basis for the charges in Lewis & Clark and Missoula Counties. The Cascade County Judgment does, however, reference the fact that the defendant was convicted for writing bad checks in Missoula and Helena.

Accordingly, I cannot conclude that the Cascade County charge of “common scheme” was based solely upon checks issued in Cascade County and that it did not encompass checks from other counties wherein the defendant had already been put in jeopardy.

JUSTICE TRIEWEILER and JUSTICE HUNT join in the foregoing dissent of JUSTICE LEAPHART.