author: JUSTICE WEBER JUSTICE McDONOUGH,

text:
    DONALD C. COWLES, Plaintiff and Respondent, v. JEAN SHEELINE, PAUL C. SHEELINE, FRANCIS ELDREDGE and the heirs and devisees of NELLE B. COX, PAUL D. SHEELINE, SAMUEL D. STEVENS, GEORGE H. POORE, JOHN F. TYLER, WENDELL L. JACQUITH, ALTON W. ELDREDGE, CYRUS B. MENDENHALL a/k/a C.B. MENDENHALL, SUSAN A. MENDENHALL, NATHANIEL STEVENS, ELIZABETH P. STEVENS, ETHAN H. COWLES, BESSIE COWLES, ALL STOCKHOLDERS AND SUCCESSORS IN RIGHT, TITLES AND INTEREST TO THE COWLES MINING CO. INC., a Montana Corporation, and ALL PERSONS KNOWN OR UNKNOWN, CLAIMING OR WHO MIGHT CLAIM RIGHT, TITLE, ESTATE OR INTEREST OR LIEN OR ENCUMBRANCE UPON THE REAL PROPERTY DESCRIBED IN THE COMPLAINT OR ANY THEREOF ADVERSE TO PLAINTIFF’S TITLE THERETO, WHETHER SUCH CLAIM OR POSSIBLE CLAIM BE PRESENT OR CONTINGENT, INCLUDING ANY OF DOWER, INCHOATE, OR ACCRUED, Defendants and Appellants.
    No. 92-171.
    Submitted on Briefs February 4, 1993.

      Rehearing Denied July 15, 1993.
    Decided June 10, 1993.
    50 St.Rep. 653.
    259 Mont. 1.
    855 P.2d 93.

      For Defendants and Appellants: Richard W. Josephson, R. Mark Josephson, Josephson & Fredricks, Big Timber.
    For Plaintiff and Respondent: J. David Penwell, Bozeman.
   JUSTICE WEBER

delivered the Opinion of the Court.

Defendant, Jean Sheeline, herein called defendant, appeals the order of the District Court of the Sixth Judicial District, Sweet Grass County, in an action to quiet title to mining claims near Cooke City, Montana. The District Court awarded Donald C. Cowles, herein called plaintiff, a 50% ownership, and defendant the remaining 50% ownership in the assets of Cowles Mining Company. In a separate appeal, defendant also appeals the District Court’s order denying her Motion for Relief of Judgment based upon newly discovered evidence. These have been consolidated into this one appeal. We affirm.

The issues presented for our review are restated as follows:

1. Did the District Court err in determining that plaintiff and defendant each owned 50% of the stock in Cowles Mining Company?

2. Did the District Court err in admitting certain testimony of Don C. Cowles, Jr.?

3. Did the District Court err in awarding costs to plaintiff?

4. Did the District Court err in not granting defendant’s motion for relief of judgment based on newly discovered evidence?

Plaintiff brought this action to quiet title to real property owned by Cowles Mining Company (the Company), a Montana corporation which was dissolved by operation of law in 1982. The disputed property includes ten patented mining claims encompassing an area of approximately 176 acres.

Cowles Mining Company was incorporated in Montana in 1902. The original principal shareholders were plaintiff’s grandfather, Ethan H. Cowles (E. H. Cowles), and Nathaniel Stevens. E. H. Cowles and Nathaniel Stevens each transferred five patented mining claims to the Company. A minimal number of shares were issued to several other persons. The Articles of Incorporation authorized the Company to issue one million shares of $1.00 par value common stock.

The 1902 corporate charter limited the Company to forty years of existence. Although the Company mined gold in its early years, operations ceased when a stamp mill it had constructed was destroyed by fire in 1904. Nonetheless, the original charter was extended in 1946 for an additional forty years. Cowles Mining Company retained ownership of the same ten patented mining claims throughout its existence.

In order to dispose of plaintiff Cowles’ claim against defendants, the District Court was required to analyze and evaluate a complex maze of confusing and incomplete testimony and exhibits dating back to 1902. Although numerous defendants are named in this action, Jean Sheeline is the sole defendant claiming shares in the Company. She claims to be the successor to shares representing Nathaniel Stevens’ stock ownership. She claims this ownership through a number of different parties, including her husband, Paul D. Sheeline. E. H. Cowles’ stock ownership in the Company passed to Nelle Cox, plaintiff’s aunt, and then to plaintiff.

Plaintiff testified that he examined the Company stock book in Paul D. Sheeline’s Boston office in 1967 and made an incomplete handwritten list of transactions dating from 1902 to 1920. The same records were examined by Paul C. Sheeline, defendant’s stepson. Defendant testified that the stock book had been lost or destroyed and was therefore not available in evidence.

Other evidence established that the original owners, E. H. Cowles and Nathaniel Stevens, intended that each would own 50% of the controlling interest in the Company with 5000 of the 1,000,000 shares to be split among the corporate attorney and several other officers. At trial, plaintiff was the only person who presented stock certificates. Plaintiff’s certificates represented 144,500 shares of Company stock.

The evidence established that a number of E. H. Cowles’ share certificates were lost in a 1917 fire in Livingston, Montana. No replacement shares were ever issued. Evidence also established that E. H. Cowles had turned in shares to Stevens as his share of the expense to construct a new stamp mill. This stamp mill was never built and there was no evidence to demonstrate the share certificates were returned to E. H. Cowles.

E. H. Cowles was active in the Company operations. He and Nathaniel Stevens had been schoolmates in their youth and remained friends thereafter. Nathaniel Stevens’ involvement in the Company appears to be that of investor and controller of corporate records. Evidence established that Stevens was a wealthy industrialist who owned textile companies which later merged and became J. P. Stevens Co., a multi-million dollar corporation. The Montana gold mining company, which appears to be the major effort and drain of E. H. Cowles’ financial resources during his lifetime, was only one of many investments made by Stevens.

The record contains numerous correspondence records saved by E. H. Cowles, his daughter Nelle Cox, and plaintiff which indicate their continuing efforts to either sell the Company, interest investors and exploratory activities, or purchase the remaining shares from Stevens’ successors in interest.

George Naylor, an attorney of the firm of Tyler, Eames and Reynolds, one-time attorneys for Stevens and the Company, testified that Nathaniel Stevens wanted to dispose of the stock for estate tax purposes prior to his impending death and that Paul D. Sheeline acquired the shares from the Stevens family in 1946 for the sum of one dollar. Nathaniel Stevens died in 1946. No other evidence was presented to establish the selling price. PaulD. Sheeline died in 1979.

Paul C., Jean, and William Sheeline and George Naylor testified about what happened to all corporate records. Paul C., Jean and William believed that they were destroyed when the Paul C. Sheeline family moved from the house where the records had been kept in an attic box. George Naylor testified that he thought many of the records had been destroyed by his office on his instruction so as to save storage space.

Plaintiff, 76 years old at the time of trial, and his predecessors in interest, established their continuing interest in the mining company and demonstrated continuing efforts regarding the property throughout the years of their ownership. E. H. Cowles paid the taxes on the property until his death in 1938. After that time, taxes were paid by a lessee, Paul D. Sheeline, Frances Eldredge, Jean Sheeline, and the Boston law firm of Tyler, Eames and Reynolds.

The District Court determined that plaintiff and defendant each owned 50% of the stock of the Company. The District Court stated its reasons for the decision to award each party 50% as partly because defendant was unable to produce records and partly because the court believed that her predecessors had attempted to “squeeze Cowles out and arbitrarily deprive them of their stock and their interest in the mining claims ... and [defendant cannot be] permitted to profit by such legal maneuvering and manipulation by her predecessors.”

The court’s order dated March 3,1992, awarded 50% to each party. On March 22, 1992, defendant found what she claims are numerous and significant records of Cowles Mining Company, including actual stock certificates issued in the names of Paul D. Sheeline, Paul C. Sheeline and Alton Eldredge totalling 797,500 shares. These records also included stock transfer records, correspondence and other documents demonstrating stock ownership which defendant claims may complete the list made by plaintiff in 1967. The stock book, however, was not among these records.

On May 4, 1992, defendant filed a Rule 60(b), M.R.Civ.P., motion for relief from judgment based on newly discovered evidence. On July 6,1992, which was beyond the time allowed by Rule 60(c), M.R.Civ.P., for ruling on the motion, the District Court issued an order denying this motion, with an explanation of its reasons for denial. The defendant appealed the denial of this motion.

I.

Did the District Court err in determining that plaintiff and defendant each owned 50% of the stock in Cowles Mining Company?

Defendant contends that the District Court could only reach a result that plaintiff owns 50% of the former assets of the Company by weaving an unsubstantiated tale of deception, illegalities and fraud and by utterly ignoring evidence. She further contends that the District Court disregarded and misapprehended ordinary common knowledge and understanding of corporate dealings and proceedings. Defendant assigns clear error to at least 17 specific findings of fact and contends that nearly all of the court’s 56 findings are incorrect.

This Court will affirm a district court’s findings and conclusions unless they are clearly erroneous. Interstate Prod. Credit Ass’n v. DeSaye (1991), 250 Mont. 320, 322, 820 P.2d 1285, 1287. InDeSaye, this Court adopted the following three-part test to determine if findings are clearly erroneous: (1) first, the Court will review the record to see if the findings are supported by substantial evidence; (2)if the findings are supported by substantial evidence, we will determine if the trial court has misapprehended the effect of the evidence; and (3) if both substantial evidence exists and the effect of the evidence has not been misapprehended, whether a review of the record leaves the Court with the definite and firm conviction that a mistake has been committed. DeSaye, 820 P.2d at 1287. Substantial evidence is evidence that a reasonable mind might accept as adequate to support a conclusion; it consists of more than a scintilla of evidence and it may be somewhat less than a preponderance of evidence. Barrett v. Asarco, Inc. (1990), 245 Mont. 196, 200, 799 P.2d 1078, 1080.

Defendant first objects to the general finding which relates to the amount of stock that E. H. Cowles owned when he died in 1938 and the court’s conclusion that E. H. Cowles owned 50% of the stock at that time. Defendant contends that the specific findings do not recognize the fact that E. H. Cowles at times sold shares and transferred shares to the corporation in exchange for new share certificates. Plaintiff contends that the evidence supports the court’s ruling and, more importantly, that the evidence did not support defendant’s position. We agree with plaintiff.

The District Court based its decision to award 50% of the assets of the defunct mining corporation partially on exhibits from 1902 which demonstrate Nathaniel Stevens’ and E. H. Cowles’ intent that each own equal shares, and partially by other evidence, including plaintiff’s notes from 1967 and the certificates and letters in plaintiff’s possession. The documents indicate that 497,500 shares were issued to E. H. Cowles and that the same number were to be issued to Nathaniel Stevens. The District Court found that E. H. Cowles sent certificates in as security for the stamp mill which was never built and that there was no evidence of the return of such certificates to him. The District Court also determined there was no evidence E. H. Cowles ever sold any of his stock. After a careful review of the record, we affirm the conclusion of the District Court that E. H. Cowles did not dispose of any of his stock in the Company after its original issue.

Defendant next contends that the District Court erred in finding that stock Certificate No. 84 was illegal and that the 1946 corporate proceedings were fraudulent and illegal. There is substantial evidence questioning the validity of Certificate No. 84 issued around 1920 to Nathaniel, Samuel and Moses Stevens for 797,500 shares. That evidence indicates there was an issuance of stock exceeding the authorized limit of 1,000,000 shares. Defendant’s claim is based upon Certificate No. 84.

The evidence established that plaintiff went to Boston in early 1946 and spoke to Stevens’ attorney, George Naylor. At that time he tried to acquire other shares in the Company. He also spoke with Paul D. Sheeline and communicated his interest in acquiring shares to Paul D. Sheeline. Naylor and plaintiff discussed a general figure of $500-600 for the Stevens shares in the Company. Naylor later communicated to plaintiff that a better offer had been accepted. This better offer turned out to be $1.00 from Naylor’s friend, Paul D. Sheeline. The District Court concluded that plaintiff’s 1946 visit sparked Paul D. Sheeline’s interest in the Company.

After plaintiff’s 1946 visit, a corporate reorganization took place. The District Court found “there are numerous facts making it highly suspect that the purported shareholder meetings ever occurred, or if they did, whether they were lawful.” There is no evidence that Nelle Cox ever received notice of these meetings, despite Paul D. Sheeline’s knowledge of her stock ownership as evidenced by his correspondence with her. Plaintiff was not notified of any of the 1946 meetings, even though he was well known to counsel for the defendant and operated a drug store within one block of the law offices in Livingston. In addition, plaintiff filed a post-trial affidavit stating that he checked the appropriate newspaper for publication of a notice of shareholders’ meeting and no notice appeared.

The District Court expressly found the minutes of the 1946 meetings to be “unreliable and inaccurate.” The court stated:

36. Under these circumstances, it would be unconscionable, if not fraudulent, to the Cowles family to give said minutes legal effect as to the number of shares of stock then outstanding or who the lawful owners were, as to do so would be to condone an apparent attempt to squeeze Cowles out and arbitrarily deprive them of their stock and their interest in the mining claims. Such events occurred long before Jean Sheeline became involved, and she is not responsible for them, but neither can she be permitted to profit by such legal maneuvering and manipulation by her predecessors.

Naylor stated that the reason for selling the stock to Sheeline after plaintiff’s 1946 visit was to get the stock out of Nathaniel Stevens’ very substantial estate before he died. Stevens in fact died shortly after that time. The court added the following information about Naylor’s testimony:

37. ... [B]ut sale to Don Cowles would have accomplished that. Whatever the reason, it would have been customary to give the stockbook and all the corporate records to Sheeline, but Naylor went on to say they were destroyed, which makes no sense. As hereinafter indicated, Paul was in fact later found to have possession of the stockbook by plaintiff. Naylor also testified at one point there was an offer of $250,000 per claim for the property, but yet he arranged sale to Sheeline for $1.00, and stated that he had no idea if there was one certificate, numerous ones, or the number of shares they represented. These inconsistencies render Naylor’s testimony of little value.

We conclude the District Court carefully reviewed the evidence and based its finding that the proceedings were illegal on the conclusions that Certificate No. 84 was illegal and that Nelle Cox and plaintiff were not informed or aware of these proceedings. The record contains substantial evidence to support this finding.

Defendant also contends that the court found that no evidence existed to prove the number of shares owned by defendant or her predecessors. Clearly, the court determined that defendant succeeded to the Stevens’ interest and this is evidenced by its award to her of 50% of the ownership in the claims. Most of the evidence presented to establish defendant’s ownership was oral testimony. She presented no written evidence of ownership other than the minutes of the 1946 meetings. The only other evidence to establish that defendant owned shares is George Naylor’s testimony and the testimony of the Sheeline family. We conclude the District Court’s findings reflect its consideration of this as well as the interests of the Stevenses to which she claims to have acquired.

This Court has thoroughly reviewed the record to determine that the numerous findings of the District Court are supported by substantial evidence. Applying the second and third factors of the DeSaye test, we further conclude that the District Court has not misapprehended the effect of the evidence and we are not left with a firm conviction that a mistake has been made.

We hold that the District Court’s findings relative to stock ownership and the 1946 proceedings to reorganize the corporation are not clearly erroneous.

II.

Did the District Court err in admitting the testimony of Don C. Cowles, Jr.?

Defendant contends that the District Court should not have admitted Don C. Cowles, Jr.’s testimony and exhibits because he was not disclosed as an expert witness, he was not qualified as either an expert or a lay witness to give the testimony he presented and the exhibits he prepared and testified about were presented for the first time at trial.

Defendant responded to her receipt of Don C. Cowles, Jr.’s exhibits on the first morning of the trial with a formal Memorandum of Objection to his testimony and exhibits. Defendant contends that the District Court allowed the witness to determine how many shares were issued and who owned them, which is expert opinion testimony on the ultimate issue in the case and invaded the province of the trier of fact. The District Court responded as follows to that objection:

THE COURT: Well, I’m going to let Mr. Penwell proceed in part, and I don’t know just what questions he will ask, but if it will save the Court pawing through several hundred exhibits to see that one letter refers to two shares and another one to ten shares and so forth, to trace the title to them, you don’t have to be an expert to do that as far I can see, and so I may permit some answers. Let’s see what Mr. Penwell asks him.

Defense counsel then asked if he could have a continuing objection. The District Court denied this request and ordered him to make objections as the testimony progressed.

Part of Don C. Cowles, Jr.’s testimony involved his interpretation and his typewritten copy of his father’s handwritten notes from the Company stock book, which incorporated information from other exhibits which had been introduced to prove plaintiff’s ownership interest. Defendant subsequently objected to the admission of Exhibits 78 and 79. Exhibit 78 purported to determine which share certificates were reissued in Certificate 84, a certificate which the court found was illegal. Exhibit 79 was a document prepared by Don C. Cowles, Jr. which summarized plaintiff’s position on the total number of shares as exceeding the 1,000,000 authorized.

Defendant contends that Rule 602, M.R.Evid., prohibits the lay witness from testifying to matters not -within his personal knowledge and that Don C. Cowles, Jr. was allowed to testify to such matters. The result was that the court allowed him to testify as an expert and, thus, abused its discretion. Plaintiff contends that Don C. Cowles, Jr. did not testify as an expert and that the exhibits served no function other than as demonstrative evidence, admitted by the court “as aids to the court” to clarify Exhibit 68, the notes of plaintiff, Don Cowles, Sr., and to determine totals of stock ownership.

Rules 602, M.R.Evid., limits a witness’ testimony to his personal knowledge. Further, “a lay witness may even give an opinion on an ultimate factual issue if it complies with the foundational requirements in Rule 701, M.R.Evid., however, the opinion testimony must be ‘confined to matters of fact.’ ” First Bank (N.A.) —Billings v. Clark (1989), 236 Mont. 195, 202, 771 P.2d 84, 88 (quoting In re the Estate of Smith (1988), 230 Mont. 140, 148, 749 P.2d 512, 517; and Rule 704, M.R.Evid.).

Clearly, the court did not allow Don Cowles, Jr. to testify as an expert witness; rather, the court permitted Cowles to proceed to testify and determined the propriety of plaintiff’s counsel’s questions as each was asked. Rule 701, M.R.Evid., provides:

Rule 701. Opinion testimony by lay witnesses.
If the witness is not testifying as an expert, the witness’ testimony in the form of opinions or inferences is limited to those opinions or inferences which are (a) rationally based on the perception of the witness and (b) helpful to a clear understanding of the witness’ testimony or the determination of a fact in issue.

The record demonstrates that the court allowed Cowles to testify about the summaries he had made relating to the other exhibits in evidence and admitted his exhibits for demonstrative purposes only.

Demonstrative exhibits are admissible if they supplement the witness’ spoken description of the transpired event, clarify some issue in the case, and are more probative than prejudicial. Palmer by Diacon v. Farmers Ins. Exch. (1988), 233 Mont. 515, 522-23, 761 P.2d 401, 406. They are inadmissible only when they do not illustrate or make clearer some issue in the case; that is, where they are irrelevant or immaterial, or where they are of such a character as to prejudice the jury. Workman v. McIntyre Const. Co. (1980), 190 Mont. 5, 24, 617 P.2d 1281, 1291 (citing 29 Am. Jur. 2áEvidence § 785). The testimony given by Don C. Cowles, Jr. was relevant in that it helped to clarify plaintiff’s position on the number of shares issued.

The admission of such evidence is within the discretion of the District Court and this Court will not reverse unless a manifest abuse of discretion is shown. Palmer, 761 P.2d at 406. See also Bache v. Gilden (1992), 252 Mont. 178, 827 P.2d 817. There is nothing in the record to indicate that the District Court accorded any significant weight to this testimony. To the contrary, the court specifically stated in Finding No. 53:

Both sides made some efforts to trace the history of the stock issued as indicated by these findings, but due to the absence of most of the corporate records and antiquity of most of the other evidence, this is largely speculative, inconclusive and unreliable.

The contested testimony certainly involved a fact in issue, the second requirement of Rule 701, M.R.Evid. It also helped to clarify plaintiff’s position on that issue to the District Court. Because the evidence presented in this case was complex, confusing and incomplete, Don C. Cowles, Jr.’s testimony was helpful to the District Court in determining which of the exhibits previously admitted could determine the total number of shares.

While Rule 1006, M.R.Evid., was not mentioned or argued by the parties, we conclude that it is applicable to this issue. Rule 1006, M.R.Evid., provides:

Rule 1006. Summaries.
The contents of voluminous writings, recordings, or photographs which cannot conveniently be examined in court may be presented in the form of a chart, summary, or calculation. The originals, or duplicates, shall be made available for examination or copying, or both, by other parties at a reasonable time and place. The court may order that they be produced in court.

Rule 1006, M.R.Evid., and the identical federal rule, Rule 1006, Fed.R.Evid., have been applied in a limited number of appeals. In general, the cases would affirm the District Court’s decision in this case to admit the testimony of Don C. Cowles, Jr. See, e.g., United States v. Johnson (9th Cir. 1979), 594 F.2d 1253, cert. denied, 444 U.S. 964, 100 S.Ct. 451, 62 L.Ed.2d 376 (1979) (proponent of a summary must establish that the underlying materials upon which the summary is based are admissible in evidence); United States v. Duncan (5th Cir. 1990), 919 F.2d 981, cert. denied,_U.S._, 111 S.Ct. 2036, 114 L.Ed.2d 121 (1991), reh’g denied, 991 U.S. App. Lexis 1316 (5th Cir. 1991), (rule requires only that the underlying records be voluminous and that in-court examination be inconvenient); and United States v. Citron (2nd Cir. 1986), 783 F.2d 307, appeal after remand, 853 F.2d 1055 (1988) (summaries cannot be admitted without the proper foundation).

A case from the District of Columbia circuit most closely resembles the facts before us. See United States v. Lemire (D.C. Cir. 1983), 720 F.2d 1327, cert. denied, 467 U.S. 1226, 104 S.Ct. 2678, 81 L.Ed.2d 874 (1984). In that case, the defendants argued, as defendant argues here, that Rule 602 requires that non-expert witnesses testify only as to matters of which they have personal knowledge for the purpose of ensuring reliability.

The lay witness in Lemire was an FBI agent who was also a certified public accountant. The lay witness relied on the testimony of prior witnesses and the numerous documents previously introduced. The witness summarized the evidence about a complex cash flow through offshore companies that the government had introduced by direct examination of its witnesses. The defendants objected to his testimony on the grounds that he was an improper witness under the Federal Rules of Evidence and that his testimony would unfairly prejudice their defense. The court stated:

... In this case, neither Rule 602’s literal language nor its overriding purpose was violated. [The witness] did not testify about any of the events underlying the trial: he only summarized evidence about cash flows that several prior witnesses had already offered. As to that evidence, he testified from his personal knowledge of the transcripts and exhibits. Hence Rule 602 does not bar his testimony.
This court has not previously ruled on the admissibility of one witness’s summary of evidence already presented by prior witnesses. Other courts, however, have recently confronted the question and permitted such summaries under Rule 1006, allowing for admission into evidence of summaries of documents too voluminous to be conveniently examined in court... . [W]e note that Rule 1006 was designed primarily as an exception to the best evidence rule, see United States v. Johnson, 594 F.2d 1253, 1255 (9th Cir.), cert. denied, 444 U.S. 964, [100 S.Ct. 451, 62 L.Ed.2d 376], ... and since the evidence itself here was already before the court, there is no issue of inadmissibility under Rule 1002 as a replacement for the “best evidence.” ... Hence, “[e]ntirely aside from Rule 1006, there would still be ample authority for the admission of [summary testimony] into evidence .... There is an established tradition that permits a summary of evidence to be put before the jury with proper limiting instructions.”... Thus, we conclude that the Federal Rules of Evidence do not bar use of non-expert summary testimony such as is presented in this case.

Lemire, 720 F.2d at 1347 (citations omitted) (emphasis supplied).

The court further stated:

[J]ust as an expert can assist a jury by imparting special knowledge that helps the jury to understand technical evidence, a non-expert summary witness can help the jury organize and evaluate evidence which is factually complex and fragmentally revealed in the testimony of a multitude of witness throughout the trial.

Lemire, 720 F.2d at 1348 (emphasis supplied).

While Lemire involved a jury trial and our case involves a trial to the court, the principles are applicable in both cases. We conclude that Rule 1006, M.R.Evid., authorized the admission of the testimony of Don C. Cowles, Jr. under the facts of this case.

The District Court concluded that the evidence regarding stock ownership was speculative, inconclusive and unreliable in various aspects. The extensive findings on the part of the District Court demonstrate that the court carefully considered all of the evidence submitted to it. We conclude that the District Court properly allowed Don C. Cowles, Jr. to assist the court by his summary testimony of other documents already in evidence under Rule 1006, M.R.Evid. We further conclude that Don C. Cowles, Jr.’s exhibits are summaries made by him based on his own perception of other admitted facts, that the summaries were helpful to the court and that his testimony and exhibits were permitted under Rules 602 and 701, M.R.Evid.

We hold the District Court did not abuse its discretion in permitting Don C. Cowles, Jr. to testify as a lay witness and to introduce summaries which he had made to clarify admitted evidence.

III.

Did the District Court err in its award of costs to plaintiff?

Defendant contends that the District Court’s award of $469.50 in costs to plaintiff should be reversed as plaintiff was not the prevailing party. Each party claimed 100% stock ownership at the outset of the lawsuit. Each was awarded only 50%. Defendant contends that this was a victory and a loss for both sides; therefore, no costs should have been awarded and the court should have found there was no prevailing party.

Plaintiff acknowledged during trial that he should be declared owner of only 50% of the company. He contends that he is the prevailing party because he in fact received the relief he sought.

The general rule is that the party who receives an affirmative judgment in his favor at the conclusion of the entire case is considered the prevailing party. Schmidt v. Colonial Terrace Associates (1985), 215 Mont. 62, 68, 694 P.2d 1340, 1344 appeal after rem., 223 Mont. 8, 723 P.2d 954 (1986).

We conclude that plaintiff was the prevailing party as he received the relief he asked for at trial. We hold the District Court correctly awarded costs to plaintiff.

IV.

Did the District Court err in not granting defendant’s motion for relief of judgment based on newly discovered evidence?

Defendant submitted a Rule 60(b), M.R.Civ.P., post-judgment Motion for Relief from the Judgment under Rule 60(b)(2) and § 25-11-102(1) and (4), MCA. Defendant based this motion upon newly discovered evidence which she found on March 22, 1992, consisting of stock certificates and other documents concerning ownership of Cowles Mining Company. The District Court’s Judgment was dated March 3, 1992. An appeal was filed on April 3, 1992. This Court granted defendant’s motion to stay that appeal pending the District Court’s ruling on her post-judgment motion.

Rule 60(c), M.R.Civ.P., provides that Rule 60(b) motions shall be determined within the 45-day period provided by Rule 59(d), M.R.Civ.P., or shall be deemed denied. The time limits set forth in Rule 59, M.R.Civ.P, are mandatory. Marvel Brute Steel Bldg. v. Bass (1980), 189 Mont. 480, 483, 616 P.2d 380, 382. An order denying a motion is a nullity where it is issued after the time for ruling on the motion has expired. Marvel, 616 P.2d at 382.

The District Court did not rule on that motion prior to the expiration of the 45-day period allowed by Rule 59(d), M.R.Civ.P., and on June 18, 1992, defendant’s motion was deemed denied. Apparently the parties created some confusion for the District Court as the court was under the impression that the Supreme Court had granted extra time for ruling on the motion. When the District Court became aware that the motion was deemed denied, it nevertheless issued its Order Denying Motion for Relief From Judgment dated July 6,1992, stating therein the reasons for denying the motion.

The District Court noted in the order that the comment may be moot, but nonetheless deemed it advisable to issue its ruling on the matter. The court’s order of July 6, 1992, denied the defendant’s request which is the same result as the denial by passage of time under the rule.

Defendant contends that the contents of the District Court’s order further illustrates the failure of the court to examine the evidence and the documents filed in this case. The District Court concluded:

The district court has reviewed copies of all of the documents, correspondence, etc., which Ms. Sheeline has presented post-trial along with her motion and brief, and finds no new evidence that would justify setting aside or modifying the judgment previously entered herein, or granting a new trial. Such material includes correspondence from and to Paul C. Sheeline as late as September 1980 ... Jean thereafter continued correspondence, payment of taxes, etc., during the ensuing years, received a letter from David Penwell (plaintiff’s attorney) in 1987, and this action was filed in 1990, so the court does not find Jean would have easily forgotten the files such material was in, and she did not exercise due diligence in looking for it. It... is highly unlikely the “new evidence” would have produced any different result at trial for reasons hereinafter stated.
... If anything, much of the “new evidence” confirms legal manipulating and hanky-panky to squeeze out the Cowles stockholders, and surely does not constitute sufficient or equitable grounds for setting aside the judgment or ordering a new trial.
In the opinion of the district court, judicial economy would not be served by retrial herein, and it would be a gross miscarriage of justice to modify the judgment so as to deprive Cowles of his one-half interest in the property on such purportedly newly discovered evidence.

The remainder of the order reflects the court’s detailed analysis of the newly discovered evidence.

Rule 60(b)(2), 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:... (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b)....

Newly discovered evidence may constitute grounds for a new trial if the following conditions are met: (1) the alleged newly discovered evidence came to the moving party after trial; (2) it was not a want of due diligence which precluded its earlier discovery; (3) the materiality of the new evidence is so great that it would probably produce a different result on retrial; and (4) the new evidence is not merely cumulative, not tending only to impeach or discredit witnesses in the case. In re the Marriage of Barnes (1992), 251 Mont. 334, 336, 825 P.2d 201, 202-03.

The basic criterion for granting new trials because of newly discovered evidence is that the evidence could not have been discovered and produced at trial with the exercise of reasonable or due diligence. Kartes v. Kartes (1977), 175 Mont. 210, 214-15, 573 P.2d 191, 194. The moving party has the burden to show due diligence in unearthing the newly discovered evidence before relief from judgment or a new trial is proper. Brunner v. LaCasse (1990), 241 Mont. 102, 104, 785 P.2d 210, 211. “Every presumption is indulged that the movant for a new trial on the ground of newly-discovered evidence could have secured the testimony for the former trial, and the movant must negative any negligence on his part.” Bushnell v. Cook (1986), 221 Mont. 296, 302, 718 P.2d 665, 669 (quoting Walter v. Evans Products Co. (1983), 207 Mont. 26, 31, 672 P.2d 613, 616).

Defendant found documents which she contends are material while in the process of moving from her home in Boston where she had lived since 1962. Affidavits from defendant, one of her attorneys, Paul C. Sheeline, William Sheeline and Judith Bleakney Savage, a friend who assisted in defendant’s move, swear to the following information: Prior to trial, an extensive search was conducted for Paul D. Sheeline’s stock certificates and the Company records, including several searches of defendant’s home, and it is understandable that defendant did not find the records as they were mailed to her by Paul C. Sheeline after her husband’s death when she was very disoriented and distressed. The old files were wedged behind a broken bottom shelf in an old cabinet in her utility closet. The utility closet was packed with numerous sundry items including paint, light bulbs, and old magazines. Defendant kept important documents elsewhere. She would not have found these documents except for the fact that she was moving the old cabinet out of the closet in anticipation of moving. She previously searched the utility closet but had no reason to believe there was any important paperwork in that closet. Defendant does not remember receiving these documents or how they got into the old cabinet in the utility closet.

Defendant contends that she exercised due diligence in locating these documents prior to trial. Prior Montana cases have addressed the issue of due diligence. For example, in Kartes, the parties contested title and ownership of a ranch. Kartes, 175 Mont. at 214-15, 573 P.2d at 194. This Court held the defendants did not meet the burden to show due diligence because they had not made a significant effort to go through the books, records and papers, of which the alleged “newly discovered” evidence was a part, which were in their possession and because the evidence was cumulative. Kartes, at 214-15, 573 P.2d at 194.

However, in Alan D. Nicholson, Inc. v. Cannon (1983), 207 Mont. 476, 674 P.2d 506, this Court held the district court did not abuse its discretion by granting a motion to reopen a hearing when an attorney located a misfiled document in his files four days after the hearing concluded. Another case finding due diligence is Halse v. Murphy (1989), 237 Mont. 509, 774 P.2d 418, in which this Court affirmed a district court decision to reverse a summary judgment order when a plaintiff’s expert testified by signed affidavit that when he gave his deposition testimony, he was unable to render an opinion because he had not had the opportunity to review another doctor’s notes and records, despite earlier extensions of time to the plaintiff for her expert to review records.

After a careful review of the defendant’s evidence in this case, we conclude the District Court properly should have found that defendant exercised due diligence in looking for the Company records but was unable to find them at an earlier date.

However, before the evidence presented by defendant could be admitted, the remaining requirements for admission of newly discovered evidence must be met. Our review of the newly discovered evidence has disclosed a number of documents which were not presented at trial. Most of these are cumulative and duplicative. Nearly all of the evidence is dated after Paul D. Sheeline became interested in the Company. Stock certificates issued to the Sheelines and Alton Eldredge in 1946 are signed by Alton Eldredge as president and Paul D. Sheeline as secretary of the Company. These certificates shed no light on what happened prior to 1946. If anything, they present further questions. For example, some of the stock issued prior to the date of devaluation is issued at the devalued par value. Further, a letter written by Paul C. Sheeline to his father in 1941 tends to indicate that Paul D. Sheeline thought he owned around 50% of the stock at that time, but a letter from George Naylor in April of 1946 refers to a large number of shares being transferred to Paul D. Sheeline on that day. There are proxy statements in the file — all blank and unsigned with nothing to prove the 1946 proceedings were legal. Typed and handwritten shareholder lists and records are mostly undated and all unsigned and, thus, there is no way to know who prepared them. As the District Court noted, they are inadmissible hearsay. Many of the documents concern property tax assessments and payments made by Paul D. Sheeline from 1946 through 1978. This evidence was presented at trial.

We have carefully reviewed the documents and affirm the decision of the District Court that the admission of the newly discovered evidence would not change the result of the trial. We emphasize that the Cowles Mining Company stock book was still missing and was not included in the new evidence. “Stock books and stock transfer records of a corporation serve as evidence to both creditors and the corporation of actual stockholders therein.” Thisted v. Tower Management Corp. (1966), 147 Mont. 1, 9, 409 P.2d 813, 818. We conclude the admissible documents do not constitute evidence likely to result in a different outcome.

We hold the District Court correctly denied the motion for relief from judgment on the basis of newly discovered evidence.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES HARRISON, GRAY concurred.

JUSTICE McDONOUGH,

dissenting:

I respectfully dissent. The appellant has met all of the conditions required for grant of a new trial. The newly discovered evidence was found subsequent to trial, the motion for new trial was diligently and timely made, the failure to previously produce the evidence was not for want of due diligence, and the new evidence was not cumulative.

As to the materiality of the new evidence, I believe it is not only material but just as probative or more so than the evidence produced at trial. This type of case, considering the antiquity, is one of limited available evidence and the courts should be considerate of all available evidence.

I would grant the motion for relief of judgment and grant a new trial.


source: Caselaw Access Project

author: JUSTICE GRAY JUSTICE TRIEWEILER

license: Public Domain

text:
    WILLIAM T. CHAGNON, Claimant and Appellant, v. TILLEMAN MOTOR COMPANY, Employer, and THE TRAVELERS INSURANCE COMPANY, Defendant and Respondent.
    No. 91-499.
    Submitted on Briefs April 15, 1992.
    Decided March 2, 1993.
    50 St.Rep. 198.
    259 Mont. 21.
    855 P.2d 1002.

      For Claimant and Appellant: Randall O. Skorheim, Overfelt Law Firm, Great Falls.
    For Defendant and Respondent: Thomas A. Marra, Marra, Wenz, Johnson & Hopkins, Great Falls.
   JUSTICE GRAY

delivered the Opinion of the Court.

William Chagnon appeals from the judgment of the Workers’ Compensation Court awarding him permanent partial disability benefits and attorney’s fees and costs, and crediting the Travelers Insurance Company for previous overpayment of temporary total disability benefits. The Travelers Insurance Company cross-appeals the award of attorney’s fees and costs. We affirm.

We phrase the issues on appeal as follows:

1. Did the Workers’ Compensation Court err in refusing to utilize Chagnon’s first post-injury full-time wage in calculating his permanent partial disability benefits under § 39-71-703, MCA (1985)?

2. Did the Workers’ Compensation Court err in crediting Travelers for benefits paid while Chagnon was working?

3. Did the Workers’ Compensation Court err in awarding attorney’s fees and costs?

William Chagnon (Chagnon) worked for twelve years in the auto-body repair business. In March of 1985, he began working for Tilleman Motor Company (Tilleman) in Havre, Montana. He worked up to seventeen hours a day and spent most of his time spray painting vehicles. On October 22, 1985, he stopped working at Tilleman, claiming that he had developed respiratory and physical neurological problems from exposure to paint fumes. Chagnon was 30 years old at the time and earned approximately $500 per week.

Chagnon filed his claim for compensation on November 4, 1985. Tilleman was enrolled in Plan II of the Workers’ Compensation Act and insured by the Travelers Insurance Company (Travelers). Shortly after Chagnon filed his claim, Travelers began weekly payments of $276.39 per week, reserving all rights under § 39-71-608, MCA (1985).

In February of 1988, Travelers petitioned the Division of Workers’ Compensation to request an examination of Chagnon by a medical panel and for authorization to terminate occupational disease benefits. In March of 1988, Chagnon filed a petition with the Workers’ Compensation Court for benefits under the Workers’ Compensation Act. The Workers’ Compensation Court granted Travelers’ motion to stay proceedings there until the Division had ruled on its petition under the Occupational Disease Act.

After receiving medical information from two doctors indicating that Chagnon could return to work, Travelers terminated Chagnon’s benefits on August 25, 1988, pursuant to § 39-71-609, MCA (1985). Chagnon petitioned for, and received, disability benefits for an additional 49 days pending the hearing before the Division.

The Division hearing was held on December 2,1988. The Division subsequently issued an order determining that Chagnon’s disability was compensable under the Occupational Disease Act and that Travelers was not entitled to retroactive reimbursement for benefits paid prior to August 25,1988. The Division also denied Chagnon’s request for attorney’s fees and costs.

Chagnon worked during two periods of time while receiving total disability benefits from Travelers. From July 15, 1986, to December 15,1986, he worked sporadically for Hi-Line Glass, earning $5.00 per hour. Beginning July 9, 1988, Chagnon worked for Montana Sign Company and earned $5.25 per hour. He did not notify Travelers he was working on either occasion. Chagnon returned to work at Hi-Line Glass in July of 1989; he started at $5.25 per hour and was earning $7.00 per hour at the time of trial.

In July of 1989, Chagnon moved for summary judgment in the Workers’ Compensation Court on the issue of whether he had suffered an industrial injury compensable under the Workers’ Compensation Act. In granting his motion, the Workers’ Compensation Court determined that he had developed reactive airway disease from exposure to chemicals on October 22, 1985. Travelers did not appeal.

Chagnon petitioned the Workers’ Compensation Court again on July 6, 1990, for a determination of the amount of benefits to which he was entitled. The case proceeded to trial on October 3, 1990. A hearings examiner heard the case and submitted his Findings of Fact and Conclusions of Law which subsequently were adopted by the Workers’ Compensation Court. The Workers’ Compensation Court’s Order adjudged Chagnon permanently partially disabled and entitled to permanent partial disability benefits of $88.60 per week for 500 weeks; it also awarded him attorney's fees and costs. The Workers’ Compensation Court then credited Travelers $9,397.26 for benefits it paid while, unknown to Travelers, Chagnon worked at Hi-Line Glass and Montana Sign Company. Chagnon appeals the amount of permanent partial disability benefits awarded and the credit received by Travelers. Travelers appeals only the award of attorney’s fees and costs.

Did the Workers’ Compensation Court err in refusing to utilize Chagnon’s first post-injury full-time wage in calculating his permanent partial disability benefits under § 39-71-703, MCA (1985)?

Initially, we note that the statute in effect at the time of the injury sets the standard by which a claimant’s benefits are to be computed. Watson v. Seekins (1988), 234 Mont. 309, 312, 763 P.2d 328, 331. For his claim of permanent partial disability, Chagnon consistently has elected to proceed under § 39-71-703, MCA (1985), which calculates permanent partial disability benefits based on an actual loss of earning capacity. At the time of Chagnon’s injury, § 39-71-703, MCA (1985), read in pertinent part:

(1) Weekly compensation benefits for injury producing partial disability shall be 66 2/3% of the actual diminution in the worker’s earning capacity measured in dollars, subject to a maximum of 1/2 the state’s average weekly wage.
(2) The compensation shall be paid during the period of disability, not exceeding, however, 500 weeks in cases of partial disability ....

It is well established that loss of earning capacity under § 39-71-703, MCA, is the permanent diminution of the ability to earn money in the future. Hurley v. Dupuis (1988), 233 Mont. 242, 246, 759 P.2d 996, 998. In addition to the permanent aspect of loss of earning capacity, we have determined that:

[ejarning capacity is not only determined by a comparison of pre-injury and post-injury wages, but also by age, occupational skills, education, previous health, remaining number of productive years and degree of physical or mental impairment.

Hurley, 759 P.2d at 999 (citations omitted).

Here, the Workers’ Compensation Court determined that Chagnon was permanently partially disabled and entitled to permanent partial disability benefits for 500 weeks. The court went on to address the earning capacity factors and determined:

Chagnon is relatively young;

his only vocational restriction is a requirement to avoid paint fumes;

he has a solid job earning $7.00 per hour with potential for promotion;

his previous health was good; and,

he has approximately thirty years left to work.

The Workers’ Compensation Court then calculated Chagnon’s weekly benefits at $88.60 per week. To reach this figure, the court subtracted Chagnon’s post-injury earning capacity of $7.00 per hour from his pre-injury earning capacity of $10.32 per hour, resulting in a diminution of $3.32 per hour. Multiplying the hourly wage loss by 40 hours to reach a weekly wage loss of $132.80, the court then multiplied the weekly figure by .667, pursuant to § 39-71-703, (1985) MCA, to reach a permanent partial disability award of $88.60 per week for 500 weeks.

Chagnon contends that he is entitled to permanent partial disability benefits in excess of those awarded. His only specification of error in this regard is his claim that the Workers’ Compensation Court erred by using $7.00 per hour, the wage he was earning at the time of trial, as his post-injury earning capacity. He argues that the wage he earned in his first full-time job after his injury, $5.25 per hour at Montana Sign Company, is the proper measure of his post-injury earning capacity. We disagree.

The record is clear that the $5.25 per hour wage is not Chagnon’s post-injury earning capacity; he was earning $7.00 per hour at the time of trial. To accept Chagnon’s argument would necessitate ignoring the well-established rule that § 39-71-703, MCA (1985), contemplates a permanent diminution in earning capacity. Hurley, 759 P.2d at 998 (emphasis added).

Chagnon also argues that our recent decision in Anderson v. Hammer (1992), 252 Mont. 73, 826 P.2d 931, supports his argument that $5.25 per hour, the wage earned closest in time to his injury, best reflects post-injury earning capacity. Chagnon misreads Anderson.

In Anderson, we restated the principle first set forth in McDanold v. B.N. Transport, Inc. (1984), 208 Mont. 470, 679 P.2d 1188, that a meaningful comparison of pre-injury and post-injury earning capacities can be made only if the figures are adjusted to reflect the same time period. We recognized the unfairness of comparing, for example, 1981 dollars to 1990 dollars when computing loss of earning capacity. Anderson, 826 P.2d at 934.

Anderson addresses the proper updating of pre-injury earning capacity; it does not support or, indeed, relate to Chagnon’s contention that the wages earned at his first post-injury job reflect post-injury earning capacity because they are “closest in time to his injury.” Thus, Anderson simply is inapplicable here.

Finally, Chagnon claims that the Workers’ Compensation Court erroneously concluded that the “parties agree that $7.00 per hour is a reasonable measure of post-injury earning capacity.” While Chagnon technically may be correct in that there appears to be no evidence of such an agreement on the record, the Workers’ Compensation Court’s use of $7.00 per hour to reflect Chagnon’s post-injury earning capacity has ample record support. We hold that, based on the record before it, the Workers’ Compensation Court did not err in refusing to utilize $5.25 per hour as Chagnon’s post-injury earning capacity when calculating permanent partial disability benefits under § 39-71-703, MCA (1985).

Did the Workers’ Compensation Court err in crediting Travelers for benefits paid while Chagnon was working?

Travelers paid Chagnon $276.39 per week from October 22, 1985, through October 20, 1988. From July 15, 1986, until December 15, 1986, Chagnon worked for Hi-Line Glass, and from July 9, 1988 to June 23, 1989, he worked for Montana Sign Company. The Workers’ Compensation Court reviewed Chagnon’s work history and determined that he had worked a total of 35 weeks while receiving temporary total disability benefits. He did not report his 1986 employment at Hi-Line Glass to Travelers until March of 1988, long after that employment had ceased and he had received the benefits paid by Travelers. Travelers did not learn of his 1988 employment with Montana Sign Company until the Division hearing in December of 1988. The Workers’ Compensation Court determined that the temporary total disability benefits of $276.39 per week paid dining those 35 weeks should have been permanent partial disability benefits of $88.60 per week. The court credited the difference ($9,397.26) against the 500 weeks of permanent partial disability benefits to which it determined Chagnon was entitled under the Workers’ Compensation Act.

Chagnon asserts two principal arguments regarding the credit to Travelers. First, he argues that the decision of the Division of Workers’ Compensation that Travelers did not qualify for a credit renders the issue res judicata. Second, he argues that Travelers’ initial acceptance of his disability under the Occupational Disease Act precludes retroactive application of Workers’ Compensation Act definitions to the time period he received the benefits. We address each contention in turn, noting that Chagnon does not dispute the repayment of benefits for the 49-day period pending the Division hearing.

Chagnon is correct that the Division’s ruling concludes that Travelers was obligated to pay benefits under the Occupational Disease Act from October 22, 1985, through August 25, 1988, with no credit allowed to Travelers. That decision does not, however, render the credit issue res judicata in the Workers’ Compensation Court.

The necessary requisites for applying the doctrine of res judicata are:

1) the parties or privies must be the same;
2) the subject matter of the action must be the same;
3) the issues must be the same and relate to the same subject matter; and
4) the capacities of the persons must be the same in relation to the subject matter and issues between them.

Poppleton v. Rollins, Inc. (1987), 226 Mont. 267, 270, 735 P.2d 286, 288. In Poppleton, the Division initially paid the claimant occupational disease benefits. After she petitioned the Workers’ Compensation Court for workers’ compensation benefits, the insurer argued that res judicata barred her claim because she had received occupational disease benefits. We concluded in Poppleton that the issues involved in claims for benefits under the Workers’ Compensation Act and the Occupational Disease Act were not the same, and therefore, the third requirement for res judicata was lacking. Poppleton, 735 P.2d at 288. As in Poppleton, the issue of Travelers’ credit is analyzed differently under each Act.

Proceeding before the Division, Travelers argued that it was due a credit for all benefits paid after October of 1986, based on a 1986 letter from Dr. James Elliot. Travelers claimed that this letter indicated that Chagnon could return to work if he avoided paint fumes, therefore precluding altogether Chagnon’s entitlement to total disability benefits under the Occupational Disease Act. The Division concluded that it was Travelers’ duty to manage its claims and that it was not entitled to retroactive reimbursement of benefits when it failed to terminate Chagnon’s benefits pursuant to Dr. Elliot’s 1986 letter.

Before the Workers’ Compensation Court, Travelers argued that it was due a credit based on Chagnon’s failure to report his work activities during the time he received temporary total disability benefits. The Workers’ Compensation Court applied the Workers’ Compensation Act’s requirement of a “total loss of wages,” under § 39-71-116(19), MCA (1985), and concluded that Travelers was entitled to a credit for the weeks Chagnon worked and continued to receive temporary total disability benefits. Clearly, the issue before the Division was distinct from that presented to the Workers’ Compensation Court. Travelers claimed the credit for different time periods and on different legal grounds under the Occupational Disease Act and the Workers’ Compensation Act. We hold that the doctrine of res judicata does not bar Travelers’ claim for a credit under the Workers’ Compensation Act.

Chagnon then argues that the Workers’ Compensation Court cannot apply Workers’ Compensation Act definitions to the period of time he received temporary total disability benefits because Travelers originally accepted liability under the Occupational Disease Act and labeled the benefits as such. He contends specifically that under the Occupational Disease Act, total disability payments do not require a “total loss of wages” and, therefore, he could work without informing Travelers and without losing his occupational disease benefits. Chagnon concludes that the Workers’ Compensation Court cannot impose retroactively the “total loss of wages” requirement of the Workers’ Compensation Act to his claim for Workers’ Compensation Act benefits. We disagree.

Once a claimant invokes the jurisdiction of the Workers’ Compensation Court, that court has exclusive jurisdiction to determine whether the claimant is entitled to workers’ compensation benefits. Cocking v. Hillhaven Corp. (1987), 225 Mont. 369, 372, 732 P.2d 1333, 1335. From the outset, Chagnon consistently has asserted his right to proceed and to secure disability benefits under the Workers’ Compensation Act. We have held that when a claimant’s condition qualifies for benefits under the Workers’ Compensation Act and the Occupational Disease Act, the claimant can elect his or her remedy under either Act. Ridenour v. Equity Supply Co. (1983), 204 Mont. 473, 477, 665 P.2d 783, 786; Bremer v. Buerkle (1986), 223 Mont. 495, 501, 727 P.2d 529, 533.

Chagnon’s claim for workers’ compensation benefits requires the Workers’ Compensation Court to apply the Workers’ Compensation Act and its definitions to his claim. Indeed, only the Workers’ Compensation Court can decide questions of disputed benefits under the Workers’ Compensation Act. Section 39-71-2905, MCA (1985). Chagnon cannot receive the best of both worlds; if he seeks workers’ compensation benefits, Workers’ Compensation Act definitions apply; if he seeks occupational disease benefits, Occupational Disease Act definitions apply.

Chagnon has maintained consistently that he suffered an industrial injury, not an occupational disease. He elected to petition the Workers’ Compensation Court for a determination of benefits, asserting that he had been paid “temporary total disability benefits” beginning October 22,1985. He also asserted that he continued to be totally disabled as a result of his industrial injury and that, in the future, he would be entitled to permanent partial disability benefits under the Workers’ Compensation Act. Chagnon’s petition indisputably claims eligibility for temporary total benefits, to be followed by permanent partial benefits, under the Workers’ Compensation Act.

In workers’ compensation cases, the person who asserts the right has the burden of proceeding and proving the claim by a preponderance of the evidence. Ricks v. Teslow Consol. (1973), 162 Mont. 469, 483, 512 P.2d 1304, 1312. In his petition, Chagnon stated that he had received temporary total disability payments and continued to suffer total disability. Under the Workers’ Compensation Act, temporary total disability is defined as “a condition resulting from an injury as defined in this chapter that results in a total loss of wages and exists until the injured worker is as far restored as the permanent character of the injuries will permit.” Section 39-71-116(19), MCA (1985).

To prove entitlement to temporary total disability benefits as alleged his petition, Chagnon had the burden of establishing that:

1) he suffered an injury resulting in a total loss of wages; and
2) he had reached less than maximum medical healing.

Baldwin v. Orient Express Restaurant (1990), 242 Mont. 373, 375, 791 P.2d 49, 50. In this case, Chagnon failed to carry his burden. Chagnon did not, and, indeed, could not prove that he was entitled to temporary total disability benefits under the Workers’ Compensation Act for the periods of time he worked. The phrase “total loss of wages” precludes the receipt of any wages by the claimant. See Ryles v. Springhill Ranch Eggs (1991), 247 Mont. 276, 282, 806 P.2d 525, 528. Chagnon’s wage stubs illustrate that he did not suffer a total loss of wages for the weeks in question.

We refuse to limit the Workers’ Compensation Court’s ability to decide all issues properly before it merely because an insurer labels initial benefits paid under a reservation of rights as occupational disease benefits, especially when the claimant consistently maintains he suffers from an industrial injury and proceeds pursuant to the Workers’ Compensation Act. The Workers’ Compensation Court correctly applied Workers’ Compensation Act definitions and determined that Chagnon was not eligible for temporary total disability benefits during the time periods he worked.

Chagnon also argues that because Travelers did not effectively terminate benefits pursuant to § 39-71-609, MCA (1985), when it learned of Chagnon’s return to work, it is precluded from claiming a credit for the periods of time Chagnon worked. We disagree.

Chagnon is correct in stating that an insurer’s termination of benefits without the statutorily-required 14 days notice is ineffective. See Clark v. Hensel Phelps Constr. Co. (1977), 172 Mont. 8, 11, 560 P.2d 515, 517. In this case, Travelers did not terminate payments without notice, but carefully followed the requirements of § 39-71-609, MCA (1985), in terminating Chagnon’s benefits in August of 1988. It did not terminate or attempt to terminate benefits earlier; thus, the consequences of an ineffective termination by an insurer, as covered by § 39-71-609, MCA (1985), are not relevant to the situation before us.

As discussed above, the Workers’ Compensation Court has exclusive jurisdiction over all disputes arising from workers’ compensation claims. Section 39-71-2905, MCA (1985); Vigue v. Evans Prod. Co. (1980), 187 Mont. 1, 4, 608 P.2d 488, 489. Section 39-71-609, MCA (1985), does not prevent the Workers’ Compensation Court from inquiring into Chagnon’s eligibility for Workers’ Compensation benefits. Regardless of Travelers’failure to terminate benefits after learning of Chagnon’s employment activities, the Workers’ Compensation Court properly determined that Chagnon simply was not eligible for or entitled to temporary total disability benefits for the time periods in which he worked. We hold that the Workers’ Compensation Court did not err in crediting Travelers for benefits paid while Chagnon was working.

Did the Workers’ Compensation Court err in awarding attorney’s fees and costs?

Applying §§ 39-71-611 and -612, MCA (1985), the Workers’ Compensation Court awarded Chagnon reasonable attorney’s fees and costs. On cross-appeal, Travelers argues that attorneys fees and costs were inappropriately awarded because the court also concluded that Chagnon deceptively concealed his return to work in 1986 and 1988. Travelers cites no authority for a denial of attorney’s fees under these circumstances.

The relevant statute states:

(1) If an employer or an insurer pays or tenders payment of compensation under chapter 71 or 72 of this title but controversy relates to the amount of compensation due, the case is brought before the workers’ compensation judge for adjudication of the controversy, and the award granted by the judge is greater than the amount paid or tendered by the employer or insurer, a reasonable attorneys fee as established by the workers’ compensation judge if the case has gone to a hearing may be awarded by the judge in addition to the amount of compensation.

Section 39-71-612, MCA (1985). Notwithstanding use of the word “may,” the statute does not leave an award of attorney’s fees totally up to the discretion of the Workers’ Compensation Court. Lamb v. Missoula Imports, Inc. (1988), 230 Mont. 183, 188, 748 P.2d 965, 968. We have stated many times that, under § 39-71-612, MCA (1985), if a dispute in the amount owed is resolved in favor of the claimant, this Court inevitably finds that an award of attorneys fees is appropriate. Buckman v. Montana Deaconess Hospital (1989), 238 Mont. 516, 521, 776 P.2d 1210, 1213 (citations omitted).

Although the Workers’ Compensation Court’s conclusions, and the supporting record, regarding the actions of Chagnon and his attorney raise concerns with this Court, the attorneys fees provision of the Workers’ Compensation Act does not permit consideration of equitable arguments. Under the statute, Chagnon is entitled to recover attorneys fees and costs. There is no dispute that the amount of compensation remained in controversy and that the amount ultimately awarded exceeded the amounts paid or tendered. Although the parties disagree over the settlement amount Travelers offered before the hearing, Chagnon’s permanent partial disability award exceeded all of the amounts asserted by the parties. Because the specific statutory language is met, we cannot hold that the Workers’ Compensation Cornet erred in awarding Chagnon attorney's fees and costs.

Affirmed.

JUSTICES HUNT, McDONOUGH and WEBER concur.

JUSTICE TRIEWEILER

specially concurring.

Based on the proof that was offered, I concur in the result of the majority opinion. However, I do not agree with all that is said therein.


author: JUSTICE McDONOUGH JUSTICE HUNT

text:
    LUCILLE P. YOUNG and LAURENCE G. YOUNG, Plaintiffs and Appellants, v. VERN H. HORTON, M.D., Defendant and Respondent.
    No. 92-209.
    Submitted on Briefs November 24, 1992.
    Rehearing Denied July 26, 1993.
    Decided June 10, 1993.
    50 St.Rep. 662.
    259 Mont. 34.
    855 P.2d 502.

      For Plaintiffs and Appellants: Erik B. Thueson, Thueson Law Office, Helena.
    For Defendant and Respondent: E. Craig Daue, Garlington, Lohn & Robinson, Missoula.
   JUSTICE McDONOUGH

delivered the Opinion of the Court.

This is an appeal from a Fourth Judicial District Court, Missoula County, jury verdict in a medical malpractice action.

There are several issues on appeal:

1. Was there sufficient evidence to support the jury’s verdict that Respondent Dr. Vern H. Horton (Horton) obtained informed consent for the surgery from Appellant Lucille Young (Young)?
2. Were expert opinion and medical journal articles erroneously admitted on the issue of memory and credibility?
3. Did the court abuse its discretion when it refused to allow the Appellants Lucille and Laurence Young (Youngs) to ask hypothetical questions about the law during voir dire?
4. Were the parties affected by a recess of 5 days and one additional day later, during the trial and if so, was Appellants’ right to a fair trial prejudiced because of the recesses?

Lucille Young began experiencing pain in her right leg after walking and when she asked her family doctor, Doctor Coriell about it, he determined that she was suffering from restriction of arterial circulation in the leg. He referred her to Horton for diagnosis and treatment of the problem.

Horton scheduled an arteriogram for Young and when he obtained the results, prescribed surgery to alleviate the condition. Horton performed an aorto-bifemoral bypass on March 3, 1988 at Missoula Community Hospital. As a complication of the surgery, Young suffered a thrombosis of the anterior spinal artery, resulting in paraplegia. The complaint in this action was filed on February 26, 1990.

1. Informed Consent

Youngs argue that there was insufficient evidence for the jury to conclude that Horton obtained informed consent. We cannot agree.

This Court’s function in reviewing jury verdicts is necessarily very limited. We must review the evidence in a light most favorable to the prevailing party to determine whether substantial evidence supports the jury’s verdict. This Court cannot reweigh the evidence or disturb the findings of a jury unless that evidence is so inherently impossible or improbable as not to be entitled to belief.

Sizemore v. Montana Power Company (1990), 246 Mont. 37, 48, 803 P.2d 629, 636 (citations omitted).

Horton testified that he advised Young of the risks of the surgery, such as death, lung damage, and problems with her heart or the graft or bleeding when he spoke with her and her husband, Laurence, on March 2, 1988 in her hospital room. Dr. Golding, one of Horton’s medical experts, stated that “his discussion ... covers the significant risks of the operative procedure and would be the standard discussion that a surgeon would have with the patient prior to the surgery.” Dr. Szilagyi, Horton’s other medical expert, stated that “[ajccording to the record, Dr. Horton informed the patient and her husband fully in complete accordance with what now is generally regarded as duty of the surgeon.”

Although the Youngs dispute that there was ever any discussion about the risks of the operation, “when conflicting evidence exists, the credibility and weight given to the conflicting evidence is within the jury’s province.” Whiting v. State (1991), 248 Mont. 207, 213, 810 P.2d 1177, 1181. “[T]his Court will not overturn its determination by weighing conflicting evidence on appeal.” Davis v. L.D.S. Church (1990), 244 Mont. 61, 68, 796 P.2d 181, 185.

The jury concluded that Horton obtained Young’s informed consent before he performed the surgery. We conclude that there is substantial credible evidence to support the jury’s verdict that Horton obtained Young’s consent prior to her surgery.

2. Expert Opinion and Medical Journal Articles

The scope of review for discretionary evidentiary rulings of the trial court is whether there has been an abuse of discretion. Steer Inc. v. Department of Revenue (1990), 245 Mont. 470, 475, 803 P.2d 601, 603-604.

The Youngs argue that the trial court improperly admitted four medical journal articles concluding that the majority of patients forget that they gave informed consent to their doctors prior to surgery. The Youngs contend these articles are improper for three reasons:

a. The articles lack probative value and are unfairly prejudicial.
b. The expert testifying regarding the articles did not give his conclusion to a degree of medical certainty.
c. The respondent violated discovery rules.

a. The Youngs state that “the issue of credibility is supposed to be decided by the jury — not by studies created by strangers which do not even fit the circumstances of the case.” Respondent, however, contends that under Rule 702, M.R.Evid., expert testimony is permitted “if scientific knowledge will assist the jury to understand the evidence to determine a fact in issue.”

We conclude that the medical articles and the related testimony were admissible. The trial court ruled that the expert could testify and refer to the medical articles but they could not go before the jury as exhibits. Further, they could be referred to as accepted studies but the expert was not to testify as to whether Young was advised of the risks of surgery; that would be a question for the jury.

“[The] determination of relevancy and of the admissibility of evidence is within the discretion of the trial court. [W]e will not disturb the District Court’s permission to admit the disputed ... testimony unless the court abused its discretion.” Dahlin v. Holmquist (1988), 235 Mont. 17, 20, 766 P.2d 239, 241. Here, the trial court carefully delineated what was admissible and what was inadmissible. The expert’s testimony was based on four medical journal articles and his own experience as a doctor. He did not testify on “the workings of her mind” nor did he comment as to whether Young had given informed consent.

He did testify as to memory of a specific experience with which he had knowledge and used learned treatises as the basis of his testimony. Testimony by experts is admissible if scientific knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue. Rule 702, M.R.Evid. Here, the trial court determined that this medical doctor had knowledge and experience to testify as to the authoritativeness of the medical journal articles and could assist the jury with information about surgical patients and their memory of informed consent. He could testify as to the conclusions of the medical studies and of his own experience, but not as to the ultimate fact of whether Young gave Horton informed consent. Mahan v. Farmers Union Cent. Exch., Inc. (1989), 235 Mont. 410, 421-422, 768 P.2d 850, 857. The trial court did not abuse its discretion in admitting the four medical journal articles and expert testimony as to his experience with the subject matter.

b. The Youngs argue that the medical expert did not render a “conclusion to a reasonable degree of medical certainty that these studies or the expert’s opinion on them applied to [Young] and her memory.” The Youngs’ objection came after Horton’s attorney asked the expert if his experience in his own practice was consistent with a study in which most patients forgot the possible risks of the surgery the doctor discussed with them. The Youngs’ attorney stated, “I would object, Your Honor, on the grounds that opinions have to be given with reasonable medical certainty.” The doctor in this case was not asked to give an opinion, rather, to speak of his past experience. Under Rule 702, M.R.Evid., an expert may testify in the form of an opinion or otherwise. His answer here was acceptable in its form.

c. The Youngs also argue that the medical articles were inadmissible because they were unfairly surprised and Horton violated discovery rules. They further contend that they made several attempts during discovery to obtain this information, but it was not until after the pretrial conference that the articles and the expert’s opinion were revealed.

The Pretrial Order, Part VI states that “[t]he parties shall exchange on or before November 27, 1991 any learned treatises, medical journal articles, or similar documentary proof that they may wish to use during the case in chief of the trial.” On November 27, 1991, respondent’s attorney sent two letters to appellants’ attorney by telecopy. The first letter contained a fist of medical journal articles the respondent planned to rely on during his case in chief. The second letter contains information regarding the issues about which the medical expert, Dr. Golding, would testify. These letters were provided within the schedule set out in the pretrial order of November 20,1991.

In addition, Part III, Defendant’s contentions 8 in the pretrial order, states that: “[s]urgical patients have a well-recognized tendency recall (sic) poorly the risks about which they were informed prior to the surgery. They tend to have greater recall of the information given to them before the surgery about the benefits of their operation.” This contention provides sufficient notice that the memory of giving informed consent would be an issue for the respondent. The medical journal articles and the expert’s testimony about patient recall about giving informed consent were properly admitted.

3. Voir Dire

The Youngs also argue that the trial court improperly restricted voir dire. They state that when their attorney attempted to ask the jurors whether they would follow the law on informed consent even if the surgery itself was technically correct, the trial court prevented them from asking any questions about the law at all. Horton counters that appellants had an opportunity to fully discuss the jury’s duty to adhere to the law as the judge explains it.

“Absent an abuse of discretion ... the trial court has great latitude in controlling voir dire.” Priest v. Taylor (1987), 227 Mont. 370, 382, 740 P.2d 648, 655. Upon review of the trial transcript, this Court concludes that the trial court did not abuse its discretion when it limited the Youngs’ attorney’s voir dire.

The Youngs’ attorney was able to question the panel generally as to whether they would follow the law as provided by the judge even if philosophically opposed. He later attempted to inquire as to whether the potential jurors would follow the particular law of informed consent. “The scope of questioning on voir dire is largely a matter of discretion for the trial judge who may set reasonable limits on the examination but should permit liberal and probing examination calculated to discover possible bias or prejudice, with due regard to the interests of fairness to both parties.” Hill v. Turley (1985), 218 Mont. 511, 520, 710 P.2d 50, 56. Here, the Youngs’ attorney had already elicited the assurance of the jurors that they would follow the law given by the judge even if they did not agree with the law. Anything more would be cumulative and the trial court properly exercised his discretion to move the voir dire process along.

4. Recess during Trial

Finally, the Youngs contend that their right to a fair trial was jeopardized by the interruptions during the course of the trial. The parties were given the trial schedule, including the two scheduled recesses at the pretrial conference on November 20, 1991. The trial started on December 2, continued on December 3, then a break was taken until December 9. The trial then continued on December 10, recessed again on December 11 and concluded on December 12.

We conclude that the trial court did not abuse its discretion in conducting the trial as scheduled. The Youngs’ attorney did not object to the schedule at the pretrial conference nor did any jurors complain of problems due to the schedule. The Youngs presented no evidence of outside influences affecting the jury.

When the court recessed on December 3, they were admonished not to discuss the case among themselves or anyone else. On December 10, before the trial was recessed until December 12, the court stated:

The instruction I have been giving about not talking to anyone about this case becomes particularly important at this time. It is necessary that you retain an open mind and not form any opinion prior to this matter being submitted to you for your deliberations. In order to do that, we have to insure that you not discuss this case amongst yourselves or with anyone else, and that includes family members, prior to the matter being submitted to you for your deliberations.

Any statements by appellants that they were prejudiced by the recesses is speculation. The trial court did not abuse its discretion when it recessed for other court matters.

AFFIRMED.

JUSTICES HARRISON, GRAY, and WEBER concur.

JUSTICE HUNT

specially concurring.

I concur with the majority’s decision upholding the verdict of the jury relating to the issue of informed consent. While conscious of the province of the jury in determining the facts, I must comment upon what the jury found to be “informed consent.”

The discussion took place in a stressful atmosphere which would not enable someone to be in the best frame of mind to give informed consent. Dr. Horton visited Mrs. Young the night before the operation. He explained the risks of the surgery in a couple of sentences. He did not provide her with any further explanation of the risks of the surgery, nor did he inform her of any alternative treatments that were available. Mrs. Young testified that she was frightened the day before the operation. Mrs. Young’s surgery was merely an elective procedure. At the time of the conversation, the surgical team was placed together and bills for the surgery were already being generated.

Two doctors testified as expert witnesses for Dr. Horton stating that the explanation of the risks was adequate. Mrs. Young was unable to offer expert testimony to rebut those experts. Because she could not do so, the jury was left with no choice but to reach the verdict that it did. For this reason, I reluctantly concur with the decision of this Court.


author: JUSTICE McDONOUGH

text:
    IN RE THE MARRIAGE OF DONNA MARIE (HOLTHUSEN) JAKOBSON Petitioner and Appellant, and EARNEST DONALD HOLTHUSEN, and MONTANA DEPARTMENT OF SOCIAL AND REHABILITATION SERVICES, Respondent and Respondent.
    No. 92-320.
    Submitted on Briefs December 22, 1992.
    Decided June 10, 1993.
    50 St.Rep. 666.
    259 Mont. 42.
    854 P.2d 333.

      For Appellant: Donna M. Jakobson, Missoula, (pro se).
    For Respondent-Respondent: John McRae, Child Support Enforcement, Missoula.
   JUSTICE McDONOUGH

delivered the Opinion of the Court.

This is an appeal from a Fourth Judicial District Court, Missoula County, order on child support issues in a dissolution action. We affirm.

There are three issues before the Court:

1. Did the trial court err when it denied Ms. Jakobson’s motion to exclude the Child Support Enforcement Division (CSED) from the present action?
2. Did the trial court err when it applied social security disability payments as a credit toward child support?
3. Did the trial court err when it denied Ms. Jakobson’s motion to order the CSED to return child support payments made by Earnest to the CSED?

Donna and Earnest Holthusen were divorced in 1980. Two daughters, Janna K. and Jacque E. Holthusen, were born during the marriage. Donna was awarded custody of the two girls in the dissolution decree and Earnest was granted reasonable visitation rights. Donna was awarded child support from Earnest of $150 per month per child. There have been problems between Donna and Earnest for years over the issue of child support. Donna was on public assistance — Aid to Families with Dependent Children (AFDC) — from 1978 to 1988.

All issues involve questions of law and “[o]ur standard of review for conclusions of law of a trial court is whether the District Court correctly interpreted the law.” In Re Marriage of Durbin (1991), 251 Mont. 51, 55, 823 P.2d 243, 245.

First, Donna argues that the CSED should not be involved in this case because she did not request their assistance and she wants them excluded. CSED argues that before the March 25,1992 hearing, Earnest requested the services of CSED and therefore, the CSED is properly involved in the case. We agree with CSED.

Mr. Holthusen applied for CSED’s services after the January 22, 1992 hearing but before the March 25, 1992 hearing. Section 40-5-203(1), MCA, states that “[t]he department may accept applications for child support enforcement services on behalf of persons who are not recipients of public assistance and may take appropriate action to establish or enforce support obligations. ...” 45 C.F.R. § 303.2, states that “[t]he IV-D agency must. ... (b)... within no more than 20 calendar days of receipt of referral of a case or filing of an application for services under § 302.33, open a case by establishing a case record. ...” Under 45 C.F.R. § 303.4, “... the IV-D Agency must, (b) [ujtilize appropriate State statutes and legal processes in establishing the support obligation pursuant to § 302.50 of this chapter.... (c) [periodically review and adjust child support orders, as appropriate, in accordance with § 303.8.” (Emphasis added.)

It is clear that Earnest Holthusen can request CSED’s assistance and thereafter, CSED becomes a real party in interest. Section 40-5-202(4), MCA. The District Court did not err in determining that the CSED should not be excluded from the present action.

Second, Donna argues that the trial court retroactively modified child support by crediting Earnest with Social Security payments dating back to January 22, 1992. The CSED claimed that under In Re Marriage of Durbin (1991), 251 Mont. 51, 57, 823 P.2d 243, 247, Earnest’s Social Security payments to the children were properly credited toward child support owed from January 22, 1992. CSED contends that the issue of modification of child support due to the Social Security payments was before the trial court at that time and therefore, the application was not retroactive.

This Court concludes that Earnest’s Social Security payments should be credited toward his child support obligation from January 22,1992. On December 6,1991, Earnest Holthusen sent an affidavit to the trial court requesting that the Social Security benefits his daughters receive be recognized as child support. In the trial court’s order of February 18, 1992, paragraphs 1, 4 and 5 read:

1. The Order of child support is amended as follows:
(1) The State of Montana, Child Support Enforcement Bureau shall determine the appropriate current child support obligation of the Respondent. That determination, including determinations pertaining to interest on the accrued child support arrearage, upon submission, shall become the Order of the Court;
(2) The parties shall arrange for and attend the necessary appointments to obtain the determination specified in 1) above,...
4. For final resolution of this matter, unless good cause is shown by the child support enforcement bureau, the monthly obligation of the Respondent shall not exceed the maximum receivable from Respondent’s Social Security Disability check — at this time 426.20.
5. The child support obligation of the Respondent shall be enforced by payment of his obligation from the Social Security Administration from his Social Security Disability Check directly to the Child Support Enforcement Bureau, who in turn will make proper remittance to Petitioner.

We agree with the CSED’s assessment that modification of the child support order is one objective of this order. During the March 25, 1992 hearing, the trial court concluded that Earnest Holthusen was to be credited for his Social Security payments toward his child support obligation from January 22, 1992 and forward. He stated during the hearing that:

Mr Holthusen has continually raised objection that he was not getting any credit for Social Security, and to listen to the Petitioner’s argument, he has to raise that argument each and every time he is drug into court. I don’t agree with that position. I think he has raised the argument sufficient times that it is before the Court at the present time, and the previous Order of this Court denying the credit for Social Security payments to the children is modified to the extent that he shall be given credit for them from this date forward.
Now, Durbin was decided, I believe, on December 10th — December 19, 1991. In January ’92, I believe — in February of 1992, I stated the monthly obligation of the Respondent shall not exceed the maximum receivable from Respondent’s Social Security Disability check. At that time it was in the amount of the four hundred twenty-six dollars and twenty cents
Apply that to January 22nd of’92. That is when we should have been following Durbin, and I wasn’t following Durbin.

Clearly, the trial court had notice that Earnest wished a modification of the child support to reflect the Social Security payments made to the two children. The trial court did not retroactively apply Durbin.

Third, Donna argues that the CSED should return payments made by Earnest to CSED which Donna contends belong rightfully to her. Donna Jakobson collected $20,067 in AFDC assistance from May of 1978 through November of 1988. At this time, there was a District Court Order for Earnest to pay child support. During the period of May of 1978 through November of 1988, Earnest should have paid $18,744 in child support. CSED contends that the State is entitled to the $18,744 owed in past child support because the money was assigned to the State by Donna as part of her application for AFDC public assistance.

Section 53-2-613, MCA, states:

Application for assistance — assignment of support rights. (1) Applications for public assistance, including but not limited to aid to families with dependent children and medical assistance, must be made to the county department of public welfare in the county in which the person is residing. The application shall be submitted, the manner and form prescribed by the department of social and rehabilitation services, and shall contain information required by the department of social and rehabilitation services.
(2) A person by signing an application for public assistance assigns to the state, the department of social and rehabilitation services, and to the county welfare department all rights the applicant may have to support and medical payments from any other person in his own behalf or in behalf of any other family member for whom application is made.
(3) The assignment:
(a) is effective for both current and accrued support and medical obligations;
(b) takes effect upon a determination that the applicant is eligible for public assistance;
(c) remains in effect with respect to the amount of any unpaid support and medical obligation accrued under the assignment that was owed prior to the termination of public assistance to a recipient.
(4) Whenever a support obligation is assigned to the department of social and rehabilitation services pursuant to this section, the following provisions apply:
(a) If such support obligation is based upon a judgment or decree or an order of a court of competent jurisdiction, the department may retain assigned support amounts in an amount sufficient to reimburse public assistance money expended.

When Donna applied for public assistance benefits, she signed a “Notice of Automatic Assignment of Rights” form, dated September 25, 1988, which states that “[b]y signing an application for public assistance you have automatically assigned and transferred all rights to child support to the State of Montana, Department of Social and Rehabilitative Services (SRS), and the County Welfare Department/County Office of Human Services.”

Also, Section 40-5-202(8), MCA, states that:

(8) If public assistance is being or has been paid, the department is subrogated to the debt created by a support order and any money judgment is considered to be in favor of the department. This subrogation is an addition to any assignment made under 53-2-613 and applies to the lesser of:
(a) the amount of public assistance paid; or
(b) the amount due under the support order.

The February 18,1992 order states that unless good cause is shown by the CSED, Earnest’s monthly obligation would not exceed $426.20 and included in that obligation would be $75 which would be applied to his child support arrearage. The current support obligation is $360 per month. The CSED is retaining the money in excess of the current child support obligation to reimburse the State for the AFDC public assistance monies received by Donna from 1978 to 1988. Dave Thor-son, of the CSED, testified that “as we receive them, the initial amount of money goes to current support, and any excess that is not included in the current responsibility goes to pay the State’s arrears next.” Once the State’s arrears are paid, any excess money would be sent to Donna. The money is being distributed correctly.

Affirmed.

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