text:
    TERRANCE DUNFEE and Patricia Dunfee, Plaintiffs and Respondents, v. BASKIN-ROBBINS, INC., Defendant and Appellant.
    No. 85-455.
    Submitted April 1, 1986.
    Decided June 4, 1986.
    Rehearing Denied July 22, 1986.
    720 P.2d 1148.

      James A. Robischon argued, Butte, Terese Lowney Garrett, Glendale, for defendant and appellant.
    Knight, Dahood, McLean & Everett, Bernard Everett argued, Anaconda, for plaintiffs and respondents.
    Anderson, Brown, Gerbase, Cebull & Jones, James L. Jones, Billings, Andrew A. Caffey, Washington, D.C., Lewis G. Rudnick, Chicago, 111., for amicus curiae, Intern. Franchise Assoc.
   MR. JUSTICE MORRISON

delivered the Opinion of the Court.

This is an appeal from judgment entered upon a jury verdict in the Second Judicial District. The jury found in favor of plaintiffs, assessing compensatory damages in the amount of $232,138.88 and $300,000 in punitive damages. Defendant appeals. We affirm.

Baskin-Robbins, Inc. (appellant) and Terrance Dunfee and Patricia Dunfee (respondents) entered into a franchise contract for the operation of a Baskin-Robbins store in Butte, Montana. Initially appellant explored the possibility of locating a store in the Butte Plaza Shopping Center but was unable to secure a space. Subsequently, a site was obtained across Harrison Avenue in the “Raymond Mini-Mall.” Appellant signed a lease with Raymond on October 5, 1979, and commenced construction at the Mini-Mall site.

Respondents first saw the Baskin-Robbins store in July, 1980, and decided to approach appellant about the business. Respondents submitted a franchise application on July 31, 1980. Following interviews and training sessions sponsored by appellant, the respondents signed the franchise contract on October 29, 1980. Prior to signing respondents consulted legal counsel, who suggested certain changes in the franchise agreement. Appellant insisted the standard agreement be signed without change and this was done.

The purchase price of the store was $71,000. The respondents obtained the funds through a loan from Montana Bank guaranteed by the Small Business Administration.

The store opened on October 29, 1980, and sales were brisk through the first 10 months of operation. In the spring of 1981, the parking lot in front of the store was paved pursuant to the contract between appellant and the Raymond Mini-Mall. The paving of the lot reduced the amount of parking and also changed the flow of traffic so that automobiles entering from Harrison Avenue could not exit upon the same thoroughfare. Rather, customers had to drive out through an alley, over a large hump to a side street. The respondents received numerous complaints about traffic flow. Thereafter, sales slumped dramatically. During the first 10 months of operation, the store averaged $13,359 in monthly sales; the next twelve months the average monthly sales dipped to $8,088.

In the fall of 1981, the respondents had problems making their payments. A representative from the Small Business Administration evaluated the business and recommended it be sold. Respondents were advised the store was in a poor location. Thereafter, respondents sought to persuade appellant that the store should be moved across Harrison Avenue to the Butte Plaza Shopping Center. Terrance Dunfee began discussing the possibility of relocation with Harold Donahue, manager of the Plaza Shopping Center. The Plaza had no similar store and Donahue encouraged the move. There was a vacancy next to the movie theatre. Mr. Dunfee spoke to Sharon McCarthy, District Manager for Baskin-Robbins, about the move. McCarthy consulted with Baskin-Robbins’ Division Manager, Bob Miller. No written correspondence reflected any discussions between Miller and McCarthy.

Site location, under the franchise agreement, exclusively belonged to Baskin-Robbins. Any site relocation had to be authorized and approved by a Baskin-Robbins Vice President. The vice president in charge was never consulted by McCarthy or Miller regarding relocation of the store.

Patricia Dunfee testified that Sharon McCarthy told her BaskinRobbins could not move because they were committed to a fifteen year lease in the Raymond Mini-Mall. However, the Baskin-Robbins lease with the Raymond Mini-Mall had a termination right after five years and a right to sublease at any time. These facts were not communicated to respondents. Sharon McCarthy testified, contrary to the testimony of Patricia Dunfee, that she only told respondents that relocation was not in their best interests.

Following denial of the relocation request, and continued losses each month, the respondents closed the store on August 23, 1982. The Small Business Administration took possession and sold the store in December, 1982 for $25,000. As of April 9, 1983, the respondents still owed over $82,000 in long term debts on the business.

The respondents filed this action on May 26, 1983, alleging breach of fiduciary duty, breach of the implied covenant of good faith and fair dealing, and fraud. The case was submitted to a jury on a general verdict form. Following a plaintiffs’ verdict appellant filed this appeal raising the following issues:

1. Whether the court properly instructed the jury that Baskin-Robbins owed a fiduciary duty to the Dunfees?

2. Whether the District Court properly instructed the jury on the duty of good faith and fair dealing?

3. Whether there was substantial credible evidence in the record to support submission of the case to the jury on either theory?

4. Whether the evidence supported an award for emotional distress damages?

5. Whether there was sufficient evidence in the record to support submission of a punitive damage issue to the jury?

ISSUE ONE

Whether the court properly instructed the jury that Baskin-Robbins owed a fiduciary duty to the Dunfees?

Generally a franchisor does not owe a fiduciary duty to a franchisee. Picture Lake Campground v. Holiday Inns, Inc. (E.D. Va. 1980), 497 F.Supp. 858, 869 (“[a] franchise relationship is inherently a business relationship, not a fiduciary relationship”). Accord Amoco Oil Company v. Cardinal Oil Co., Inc. (E.D. Wis. 1982), 535 F. Supp. 661, 666 (court refused to allow amendment of pleadings on the ground that a breach of fiduciary duty complaint failed to state a claim for relief in action by franchisee against franchisor); Murphy v. White Hen Pantry, Inc. (7th Cir. 1982), 691 F.2d 350, 354 (“the [district] court correctly determined that there was no legal basis for the argument that [franchisor] owed a fiduciary duty to [franchisee]”).

Respondents recognize the general rule that under a franchise agreement a fiduciary relationship does not ordinarily develop. However, the respondents argue that special trust and confidence was reposed by the respondents in the expertise of appellant and that under the authority of Deist v. Wachholz (Mont. 1984), [208 Mont. 207,] 678 P.2d 188, 41 St.Rep. 286, a fiduciary duty resulted.

When a fiduciary duty exists the one in the stronger position owes an obligation, by virtue of that trust relationship, to act in the best interests of the beneficiary. Deist v. Wachholz, supra.

We find that we need not decide whether the special facts and circumstances of this case gave rise to a fiduciary duty on the part of appellant. Although fiduciary duty was defined in the instructions, the court only held appellant to the responsibility of acting in good faith and dealing fairly with respondents. The questioned instruction is court’s instruction No. 15 which stated:

“YOU ARE INSTRUCTED THAT a fiduciary relationship exists in all cases where there has been a special confidence reposed in one who in equity and good conscience is bound to act in good faith, and with due regard to the interests of the one reposing the confidence. A fiduciary relationship implies a condition of superiority held by one of the parties over the other.
“A fiduciary relationship may exist when there is both a reposing of faith, confidence and trust, the placing of reliance by one person on the judgment and advice of another, and the acceptance by the other of the confidence reposed in him. There must exist a just foundation for a belief that in giving advice or presenting arguments one is acting not in his own behalf, but in the interest of the other party.”

A careful reading of this instruction shows that the court defined fiduciary relationship as being a relationship where one person has reposed trust and confidence in another person and that for the relationship to exist the stronger person must be acting in the interest of the other party and not in his own behalf. The entire second paragraph of the instruction is definitional. The only duty stated in the instruction is found in the first sentence where the court advised the jury that, where a fiduciary relationship exists, one is bound to act in good faith, and with due regard to the interests of the one reposing the confidence. Instruction No. 15 must be read in conjunction with instruction No. 16 which stated:

“YOU ARE INSTRUCTED that a party who has a fiduciary duty in its relationship with another party has a duty to act in good faith in its dealings with the other party.”

When read together the instructions informed the jury that a person in a fiduciary relationship owes an obligation to deal fairly and in good faith. The court did not instruct the jury that liability attached if Baskin-Robbins acted in their own interest to the detriment of the interest of Dunfees.

Instruction No. 15 is not artfully worded. However, the instruction is not clearly erroneous nor does the instruction, when read with the other instructions, substantially prejudice the interests of appellant.

ISSUE TWO

Whether the District Court properly instructed the jury on the duty of good faith and fair dealing?

Appellant objects to court’s instruction No. 13 which amplified upon the obligation of dealing fairly and in good faith. That instruction stated:

“YOU ARE INSTRUCTED THAT in every contract, such as the contract with BASKIN-ROBBINS, INC. in this case, there is an implied covenant that neither party shall do anything which will have the effect of injuring the right of the other party to receive the benefit of the contract, which means that in every contract there exists an implied covenant of good faith and fair dealing.”

Appellant argues that this instruction does not accord with the definition set forth recently by this Court in Nicholson v. United Pacific Ins. Co. (Mont. 1985), [219 Mont. 32,] 710 P.2d 1342, 42 St.Rep. 1822.

In Nicholson we stated:

“But whether performing or breaching, each party has a justifiable expectation that the other will act as a reasonable person. Neal v. Farmers Ins. Exchange (Cal. 1978), [21 Cal.3d 910, 148 Cal.Rptr. 389,] 582 P.2d 980. The nature and extent of an implied covenant of good faith and fair dealing is measured in a particular contract by the justifiable expectations of the parties. Where one party acts arbitrarily, capriciously or unreasonably, that conduct exceeds the justifiable expectations of the second party. The second party then should be compensated for damages resulting from the other’s culpable conduct.”

710 P.2d 1348, 42 St.Rep. 1829.

The Nicholson case had not been decided at the time the court instructed this jury. Court’s instruction No. 13 does however contain the language approved by this Court in Gibson v. Western Fire Ins. Co. (Mont. 1984), [210 Mont. 267,] 682 P.2d 725, 41 St.Rep. 1048. In that case Justice Sheehy defined the implied covenant of good faith and fair dealing as follows:

“The duty to accept a reasonable offer within policy coverage limits arises from an implied covenant of good faith and fair dealing that neither party will do anything which will injure the right of the other to receive the benefits of the agreement”’

682 P.2d 730, 41 St.Rep. 1050.

The District Court was offered, in place of the given instruction, defendant’s proposed instruction No. 7 which stated:

“You are instructed that both parties to any commercial transaction have the duty to fairly deal with each other in good faith. Good faith is defined as meaning honesty in fact in the conduct or transaction involved.
“Therefore, in this case if you find that the Defendant did some dishonest act or acts that harmed the Plaintiffs, then it is guilty of the tort of bad faith and liable for any damages proximately caused thereby.
“Conversely, if you find that Defendant did not do anything dishonest in its dealing with the Plaintiffs, then your verdict must be in favor of the Defendant.”

The court wisely chose to refuse the defendant’s offered instruction. In McGregor v. Mommer (Mont. 1985), [220 Mont. 98,] 714 P.2d 536, 43 St.Rep. 206, this Court held that it was insufficient to define good faith as “honesty in fact.” While the majority did not specifically disapprove of good faith as “honesty in fact,” the majority did hold that a more complete duty had to be submitted to the jury. The trial court here, gave a more complete definition. In fact the court gave, nearly verbatim, the definition previously approved by this Court in Gibson, supra.

The implied covenant of good faith and fair dealing has presented problems in its application. In a commercial setting we now have held that where the conduct of one party unreasonably breaches the justifiable expectations of the other party, an action in tort results. Nicholson v. United Pacific Ins. Co., supra. The rule, whether defined as the District Court defined it here, or as defined in Nicholson, should allow for the functioning of a free enterprise marketplace. Parties must be permitted to openly and forthrightly breach contracts electing to pay contract damages only.

The right to intentionally breach a contract is recognized in Nicholson, where the Court stated:

“Historically, a party to a contract generally had the right to breach and pay damages rather than perform. The non-breaching party, theoretically is ‘made whole’ from the damages paid following the breach and thus still received benefits from the agreement.”

The Court quoted with approval the following rule:

“ ‘Contract law is based in part upon the assumption that certain intentional breaches are to be encouraged. Permitting parties to breach their contracts promotes an efficient economy, at least when the gains from the breach exceed the expected pecuniary injuries of the promisee.’ ”

710 P.2d 1348, 42 St.Rep. 1829.

The Court’s opinion in Nicholson then distinguished legitimate breaches of contract from activities which may constitute a tort. The Court said: “But whether performing or breaching, each party has a justifiable expectation that the other will act as a reasonable person.” Id.

In the case at bar, the jury had to focus upon appellant’s conduct in performing the contract rather than breaching the contract. Under the franchise agreement, appellant had the exclusive right to determine site location and the inquiry necessarily evaluated the reasonableness of appellant’s conduct in light of the reasonable expectations of the parties to the franchise agreement.

Were this case to be tried following the Nicholson decision the court’s instruction would reflect the rule stated in Nicholson. Not having the benefit of our discussion in Nicholson, the District Court gave an instruction quoting language from the Gibson decision rendered only a few months before the trial. The jury was given a fair and complete definition of “good faith” as defined by this Court. More cannot be asked of the trial judge.

ISSUE THREE

Whether there was substantial credible evidence in the record to support submission of the case to the jury on either theory?

Appellant contends there was insufficient evidence in the record to justify submission of appellant’s lack of good faith to the jury. The controversy centers around appellant’s refusal to remove the store from its Raymond Mini-Mall location, across Harrison Avenue, to a location within the larger indoor Butte Plaza Mall.

Both appellant and respondents developed substantial evidence respecting the merits of relocation. The record contains evidence showing that business declined rapidly due to a change of traffic flow the year following the store’s original opening. This change of circumstance, and the dire financial condition of the ice cream business in its existing location, may have reasonably triggered an inquiry regarding relocation. Unquestionably appellant had the sole contractual right to determine the location but the law imposes a duty upon appellant to reasonably consider the facts regarding relocation.

In determining whether a jury issue exists we must view the record in a light most favorable to respondents. First National Bank in Libby v. Twombly (Mont. 1984), [213 Mont. 66,] 689 P.2d 1226, 41 St.Rep. 1948.

Distilled to its essence, the respondents’ case rests upon evidence that Sharon McCarthy, acting for appellant, advised Patricia Dunfee that Baskin-Robbins was tied to a fifteen year commitment at the Raymond Mini-Mall and could not move. In fact, Baskin-Robbins had a provision for sublease and a right to termination after five years. This information was not conveyed to the respondents and, therefore, respondents had no opportunity to find a subleasee and facilitate their move.

Respondents’ proof further established the only person from appellant’s organization who could authorize relocation, namely a vice president, was not told of the relocation question. Therefore, the merits of respondents’ relocation argument were never considered by the only person who could authorize the move.

While this Court must recognize the contractual right of Baskin-Robbins to refuse relocation on the basis of cost or other economic circumstances, the law does impose a duty upon Baskin-Robbins to be reasonable in the exercise of that right. Respondents have presented evidence that vital information was withheld from them and from the vice president in charge of authorizing relocation. This evidence, if believed, would provide a basis for finding appellant acted unreasonably, thereby breaching its duty to exercise good faith as defined by the court’s instructions.

ISSUE FOUR

Whether the evidence supported an award for emotional distress damages?

The testimony at trial concerning the Dunfees’ mental and emotional distress consisted of the following: Mr. Dunfee said they were devastated and felt a sense of loss; Mrs. Dunfee testified that she was distraught and had lost her self-esteem. The Dunfees lived in the country and Mrs. Dunfee tried never to go into Butte; she felt ashamed as being recognized as a failure.

While the testimony given by the Dunfees shows mental and emotional distress, appellant argues that the distress is related to the business failure and not to denial of relocation. However, whether the respondents would have failed had the relocation been authorized was a question for the jury to consider. The jury was properly instructed on proximate cause and its members found that the mental distress damages were related to the appellant’s unreasonable failure to evaluate relocation.

We hold there was a submissible jury issue on mental and emotional distress and although the award of $150,000 is generous we cannot say, as a matter of law, that the jury was moved by passion or prejudice.

ISSUE FIVE

Whether there was sufficient evidence in the record to support submission of a punitive damage issue to the jury?

Punitive damages are governed by Section 27-1-221, MCA, which provides as follows:

“When exemplary damages allowed. (1) Subject to subsection (2), in any action for a breach of an obligation not arising from contract where the defendant has been guilty of oppression, fraud or malice, actual or presumed, the jury, in addition to the actual damages, may give damages for the sake of example and by way of punishing the defendant.”

The issue of punitive damages went to the jury over appellant’s objection that there was no evidence sufficient to raise an issue under the statute. The trial judge gave the following instructions defining oppression, fraud and malice:

“INSTRUCTION NO. 23
“You are instructed that oppression is defined as an act of cruelty, severity, unlawful exaction or excessive use of authority. An act is oppressively done if done in a way or manner which violates the right of another person with unnecessary harshness or severity as by misuse or abuse of authority or power.
“INSTRUCTION NO. 24
“You are instructed that the abuse of authority or power is the essence of constructive fraud.
“INSTRUCTION NO. 25
“You are instructed that the standard for presumed malice sufficient to support an award for punitive damages under the laws of the State of Montana is as follows:
“When a person knows or has reason to know of facts which create a high degree of risk or harm to the substantial interests of another, and either deliberately proceeds to act in conscious disregard of or indifference to that risk, or recklessly proceeds in unreasonable disregard of or indifference to that risk, his conduct meets the standard of willful, wanton and/or reckless to which the law of this State will allow imposition of punitive damages on the basis of presumed malice.”

Instruction No. 23 is an accurate statement of the law as contained in Purcell v. Automatic Gas Dist., Inc. (Mont. 1983), [207 Mont. 223,] 673 P.2d 1246, 1251, 40 St.Rep. 1997, 2003. Instruction No. 25 is a correct statement of the law taken from Owens v. Parker Drilling Co. (Mont. 1984), [207 Mont. 446,] 676 P.2d at 162, 41 St.Rep. at 69. Instruction No. 24 is not the statutory definition of constructive fraud as found in Section 28-2-406. However, the language was taken from our opinion in Purcell v. Automatic Gas Dist., Inc., supra. Although instruction No. 24 could have been more complete, the conduct described is embraced within the definition of oppression as stated in instruction No. 23. Any error in the incompleteness of instruction No. 24, when viewed in conjunction with instruction No. 23, is harmless.

The question remains whether there was sufficient evidence to submit punitive damages to the jury. In First National Bank in Libby v. Twombly, supra, we said:

“When the duty to exercise good faith is imposed by law rather than the contract itself . . . the breach of that duty is tortious. Therefore, punitive damages are recoverable if the [breaching party’s] conduct is sufficiently culpable.”

689 P.2d 1230, 41 St.Rep. 1948.

In the present case, viewing the evidence in a light most favorable to the Dunfees, a jury question was raised as to fraud, oppression and malice on the part of Baskin-Robbins. According to the respondents’ testimony, appellant failed to properly review their relocation request and did not attempt to renegotiate the Mini-Mall lease. Furthermore, Sharon McCarthy, if Patricia Dunfee is believed, misrepresented material facts with respect to the underlying lease between Baskin-Robbins and the Raymond Mini-Mall. In furtherance of her vindictive attitude she refused to deliver any of the facts to the vice president, the only one who could make a decision favorable to the Dunfees’ relocation request.

The evidence on punitive damages presents this Court with a close question. When the question for jury submission is a close one, doubt should be resolved in favor of the jury deciding a fact issue. In Jacques v. Montana National Guard (1982), 199 Mont. 493, 649 P.2d 1319, we quoted from Mr. Justice Black’s dissenting opinion filed in Galloway v. United States (1943), 319 U.S. 372, 63 S.Ct. 1077, 87 L.Ed. 1458 wherein he said:

“As for myself, I believe that a verdict should be directed, if at all, only when, without weighing the credibility of the witnesses, there is in the evidence no room whatever for honest difference of opinion over the factual issue and controversy. I shall continue to believe that in all other cases a judge should, in obedience to the command of the seventh amendment, not interfere with the jury’s function. Since this is matter of high constitutional importance, appellate courts should be alert to insure the preservation of this constitutional right even though each case necessarily turns on its peculiar circumstances.”

In Jacques we adopted the standard articulated by Justice Black for the purpose of measuring directed verdict questions. When the standard is here applied, we find the respondents’ evidence sufficient to take the case to the jury on the question of punitive damages.

Judgment for plaintiffs is affirmed.

MR. JUSTICES HARRISON, HUNT and SHEEHY concur.

MR. JUSTICE WEBER,

dissenting:

I would reverse the District Court because I conclude there was not sufficient evidence to support a punitive damage award of $300,000.

As stated in the majority opinion, the question is whether there was sufficient evidence to submit the issue of punitive damages to the jury. The majority concluded that a review of the evidence in a light most favorable to the Dunfees resulted in a conclusion that a jury question had been raised as to fraud, oppression and malice on the part of Baskin-Robbins. The majority opinion then refers to three factual bases for this conclusion:

(1) According to the Dunfees’ testimony, Baskin-Robbins failed to properly review the Dunfee relocation request and did not attempt to renegotiate the lease;

(2) The Dunfees testified that District Manager Sharon McCarthy of Baskin-Robbins misrepresented material facts with respect to the underlying lease;

(3) In furtherance of District Manager McCarthy’s “vindictive attitude” she refused to deliver any of the facts to the Vice President of Baskin-Robbins, the only one who could make a favorable decision for relocation.

I will discuss these in more detail.

With regard to (1), I conclude that the Dunfees did not prove a failure by Baskin-Robbins to review the relocation request. The evidence submitted without contradiction by Baskin-Robbins shows that the relocation request was considered by Sharon McCarthy, the District Manager for Baskin-Robbins, and that she forwarded the information to Division Manager Miller. In turn, Division Manager Miller discussed the move with Mr. Bovshow, Baskin-Robbins’ Real Estate Manager, and they both concluded that the relocation was not a good idea and disapproved it. Mr. Bovshow was the BaskinRobbins representative originally involved in the location of the store in Butte. Even if we accept the testimony of Mrs. Dunfee that she was not told of the possibility of a sublease and of the 5 year termination possibility, the Dunfees have still failed to prove that Baskin-Robbins did not properly consider and reject their request for relocation. I conclude that there is a complete absence of evidence suggesting that Baskin-Robbins failed to properly review the relocation request.

With regard to (2), we have a difficult question because Mrs. Dun-fee did testify that District Manager McCarthy misrepresented the underlying lease and its terms. However, if we start with the premise that Baskin-Robbins has a right to decide whether or not to authorize the change of location, the issue takes on a different light. Unless the majority is concluding that Baskin-Robbins had an obligation to renegotiate the lease, the misrepresentation of facts is not material. I have concluded that Baskin-Robbins was involved in an arms length transaction under which it properly could refuse to enter into a change of location, and I believe the majority essentially agrees with that conclusion. At that point, I must also conclude that there was no misrepresentation of a fact material to the rights of the Dunfees. Clearly the facts are not of the type sufficient to raise a jury question on fraud, oppression or malice.

With regard to (3), the majority emphasizes that “in furtherance of her vindictive attitude” District Manager McCarthy refused to deliver any of the facts to the Vice President of Baskin-Robbins, the only one who could make a favorable relocation decision. I conclude that is not a correct factual analysis. The record does not in any way indicate that District Manager McCarthy refused to deliver any facts to the vice president of Baskin-Robbins. As district manager she passed this information on to her division manager, Mr. Miller. Mr. Miller in turn discussed the same with the Baskin-Robbins real estate manager, and they disapproved relocation. That determination was within the discretion granted to the division manager and the district manager by Baskin-Robbins. In view of their decision against relocation, there was no reason to pass the information on up the corporate ladder to the vice president. Presentation to the vice president of Baskin-Robbins was required only in the event that the lower level managers concluded that relocation was advisable. I therefore conclude there is a total absence of any proof of a vindictive attitude on the part of the officers or representatives of Baskin-Robbins involved in the failure to pass the information up to the vice president, he being the only one who could make a favorable decision for relocation.

I conclude there is an absence of evidence showing fraud, oppression or malice on the part of Baskin-Robbins. I then conclude the Dunfees failed to meet the minimum standard for proof of punitive damages, and that submission of the punitive damages issue to the jury constitutes reversible error.

I further disagree with the majority opinion in regard to Issue I, which pertains to the instruction on fiduciary duty. Instruction No. 15, which is quoted at length in the majority opinion, is extremely confusing. In this case it is an invitation to error so far as the jury is concerned. There are no facts in the record which warrant an instruction on fiduciary relationship. The majority concludes that even though it may be true that there was no fiduciary relationship, the instructions are not reversible error because they require only an acting in good faith and fair dealing which is appropriate. I do not agree with that conclusion.

Under Instruction No. 15, it is possible that the jury could have concluded that a fiduciary relationship existed between Baskin-Robbins and the Dunfees because of a special confidence imposed in Baskin-Robbins, binding it in equity and good conscience to act in good faith and with due regard to the interests of the Dunfees. That relationship could be found to imply a condition of superiority by Baskin-Robbins over the Dunfees. The second paragraph of the instruction could be interpreted to mean that the fiduciary relationship of Baskin-Robbins exists because there was a reposing of faith, confidence and trust by the Dunfees. The last sentence could allow the jury to conclude that there was a requirement that Baskin-Robbins should act not in its own behalf but in the interest of the Dunfees. That idea is totally inappropriate to an arms length transaction with which we are here involved. I would therefore reverse because of this incomplete and misleading instruction.

I would reverse and remand for new trial.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICE GULBRANDSON concur.


source: Caselaw Access Project

author: MR. JUSTICE HARRISON

license: Public Domain

text:
    In re the MARRIAGE OF CHERYL G. GALLINGER, Petitioner and Appellant, v. JEFFREY R. WEISSMAN, Respondent and Cross-Appellant.
    No. 85-465.
    Submitted on Briefs Jan. 23, 1986.
    Decided June 5, 1986.
    719 P.2d 777.

      Crowley, Haughey, Hanson, Toole & Dietrich, T.G. Spear, Billings, for petitioner and appellant.
    Berger Law Firm, Arnold A. Berger, Billings, for respondent and cross-appellant.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

This is an appeal by both the husband and wife from a judgment of the Yellowstone County District Court dividing the marital property of the parties, awarding child support and denying attorney’s fees. We affirm.

Jeffrey Weissman (“husband”) and Cheryl Gallinger (“wife”) were married in September of 1965. They were separated in December of 1978 and their marriage was dissolved in December of 1982. The case proceeded to trial on division of property, maintenance and child support in June of 1984. The District Court issued its findings of fact and conclusions of law in April of 1985. Husband thereafter moved to amend the findings and conclusions and his motion was granted by the trial court. Judgment on the amended findings and conclusions was entered in June of 1985. Wife then moved to amend the judgment and her motion was denied. Wife subsequently filed her notice of appeal and husband then cross-appealed.

Husband is the general manager (since approximately 1976) of a Billings, Montana, steel business known as Carl Weissman & Sons, Inc. Husband is also a partial owner of this family business. In addition, husband is the total owner of two other steel companies called Northwest Steel, Inc. and Northwest Steel of Idaho.

Wife, throughout the marriage of the parties, was basically not employed outside the home except for a short period of time in which she owned a half interest in an interior decoration business known as “Attitudes and Interiors.” Shortly after the parties’ separation, wife sold her interest in this business although she is still qualified as an interior design consultant. Currently wife is not employed outside the home except for limited part-time work as a sales clerk.

It should also be noted that the parties’ marriage produced three children, two of whom are presently minors.

At the time of dissolution, the property and assets of the parties were quite extensive and complex. For the purposes of this appeal, it is only important to note that the net worth of the marital estate was approximately $600,000 and the District Court divided it as follows:

ASSETS: WIFE HUSBAND
1) 226 Clark (family home) f 82,854.43 $
2) Proceeds from sale of 910 Princeton 9,346.30
3) Red Lodge Cabin 58,531.82
4) *Laurel Frontage Road Property 34,236.08
5) *Baker Contract 6.900.00
6) *Havig Note 26,000.00
7) Northwest Steel and Northwest Steel of Idaho (wife’s share to be paid in cash) 134,333.33 268,666.66
8) Insurance 18,167.00 2.927.00
a) Husband’s life insurance
b) Carl Weissman & Sons insurance 20,805.00
9) Cash 10,230.36
10) Jewelry 24.815.00
11) Art & Furniture 23.740.00 4,530.00
12) Attitudes & Interiors contract 15.674.00
13) 1979 Saab 4,500.00
TOTAL: $372,845.94 $373,411.04
LIABILITIES:
1) *First Bank Billings loan $131,116.17
$372,845.94 $242,294.87
DIFFERENCE:
between property $130,551.07
division
ONE HALF: $65,275.54
To Pay for Northwest Steel Stock to wife
(above) $134,333.33
CREDIT 65,275.54 (1/2 of difference
$ 69,057.79 between property division)
CREDIT 6,845.12 (1/2 of inheritance from husband’s grandfather)
Cash to wife: $ 62,212.67
*(concerns Hannah-Weissman business venture)

The District Court further concluded that husband’s interest in Carl Weissman & Sons, Inc. should not be included in the marital estate because the husband received his interest as a gift from his father and wife made no contribution, monetarily or otherwise, to the company. Husband’s interest in Carl Weissman & Sons, Inc. was valued at $273,833.25 by the trial court.

The District Court also awarded husband and wife joint custody of their children. Husband was to pay child support payments to wife in the amount of $400 per month per child until the children reached majority or finished high school whichever occurred last. In addition, husband was ordered to maintain comprehensive medical insurance for the children with the parties dividing the cost of any medical treatment not covered by said insurance.

Finally, the District Court directed both husband and wife to bear the costs of his/her own attorney’s fees.

At the outset, this Court feels it is necessary to note that this case is nothing short of a tangled mess. Between the complexity of the parties’ marital property, the hostility between the parties themselves, and the parties’ counsels’ antagonistic relationship, it is little wonder this matter has dragged on for nearly six years. (The petition for dissolution was filed in September of 1979.) For this reason, we compliment Judge Speare on preparing a thorough and complete decision in this case as evidenced by his findings of fact, conclusions of law and judgment.

Wife now presents the following issues for review by this Court:

(1) Did the trial court fail to equitably apportion the property and assets of the parties?

(2) Did the trial court err in amending the original findings and conclusions?

(3) Did the trial court err in awarding $400 per month per child in support, and in refusing to require additional support for medical, religious and scholastic expenses?

(4) Did the trial court abuse its discretion in refusing to award attorney’s fees and costs to wife?

Husband, on cross-appeal, also adds the following issues:

(5) Did the trial court err in awarding support of $400 per month per child?

(6) Did the trial court award wife a greater share of the marital estate than was justifiable by the evidence?

(7) Should the trial court have awarded attorney’s fees to husband?

We find the issues presented by husband to be basically repetitive of the issues presented by wife (except, of course, husband’s issues seek a different result), therefore, we will incorporate husband’s issues into the four issues presented by wife.

Husband, in his brief, also moves this Court to dismiss wife’s current appeal on the grounds that the appeal was not timely. Husband’s motion to dismiss is without merit and is hereby denied.

I.

Did the trial court fail to equitably apportion the property and assets of the parties?

Under this issue, wife specifically lists nine items to establish that the trial court failed to equitably apportion the property and assets of the parties. These items include: (1) failing to take into account the lack of cash flow, which leaves wife with no means of maintaining the property awarded; (2) failing to take into account wife’s non-monetary contributions to the marriage; (3) undervaluing Northwest Steel; (4) excluding Carl Weissman & Sons from the marital estate; (5) excluding part of Northwest Steel from the marital estate; (6) charging Hannah-Weissman debt and inheritance against wife’s entitlement; (7) failing to take into account husband’s dissipation of assets after the separation of the parties; (8) giving credence to husband’s testimony in the face of overwhelming evidence of his unreliability as a witness; and (9) valuing the family home too high.

Both parties are well aware of the standards of review established by this Court in dissolution proceedings. First, the standard of review regarding the division of marital property under 40-4-202, MCA, is well established. As this Court recently said:

“In dividing property in a marriage dissolution the district court has far reaching discretion and its judgment will not be altered without a showing of clear abuse of discretion. The test of discretion is whether the trial court acted arbitrarily without employment of conscientious judgment or exceeded the bounds of reason resulting in substantial injustice.”

In Re Marriage of Wessel (Mont. 1986), [220 Mont. 326,] 715 P.2d 45, 50, 43 St.Rep. 405, 411; citing Becker v. Becker (Mont. 1985), [218 Mont. 229,] 707 P.2d 526, 528, 42 St.Rep. 1541, 1543.

Second, this Court has repeatedly said it will not set aside a trial court’s findings of fact unless shown to be clearly erroneous.

“Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses.

“Furthermore, findings of fact are not clearly erroneous if supported by substantial credible evidence.

“This Court’s function ... is not to substitute its judgment in place of the trier of facts but rather it is ‘confined to determine whether there is substantial credible evidence to support’ the findings of fact and conclusions of law. [Citations omitted.] Although conflicts may exist in the evidence presented, it is the duty and function of the trial judge to resolve such conflicts. His findings will not be disturbed on appeal where they are based on substantial though conflicting evidence. [Citations omitted.]”

Marriage of Wessel, 715 P.2d at 50; citing In Re Marriage of Obergfell (Mont. 1985), [218 Mont. 83,] 708 P.2d 561, 563-64, 42 St.Rep. 1414, 1417-18.

Wife argues the trial court clearly abused its discretion in dividing the property and assets of the parties, thus violating the developed and applicable law, and also disregard the substantial evidence contained in the record in arriving at its findings of fact. Wife asserts that despite thirteen years of marriage, continued responsibility for three children and a much narrower earning capacity than husband, she was awarded a grossly inequitable share of the marital estate. We disagree.

As noted above, the property and assets of the parties were quite extensive and complex. This property acquired by the parties came into their possession by many different means including by gift, inheritance, business venture and personal employment. The trial court carefully studied this complicated assortment of property and assets and arrived at what it considered to be a just and equitable division of the marital estate. Wife now raises nine specific items which she argues clearly illustrate that the trial court inequitably divided the property and assets of the parties. In response to this assertion, we direct wife’s attention once again to the standards of review regarding dissolutions quoted above, and also note:

“[T]his Court will not attempt to review every element of a complex property distribution in the same manner as might be done if an accountant were auditing. Our function is to examine whether there is substantial evidence to support the property distribution. Viewing the overall apportionment in light of the District Court’s comprehensive and extensive findings of fact, and considering the complexities involved, we conclude that the property distribution ... is affirmed.”

In Re the Marriage of Williams (Mont. 1986), [220 Mont. 232,] 714 P.2d 548, 554, 43 St.Rep. 319, 327.

We hold the District Court did not abuse its discretion in dividing the property and assets of the parties. In fact, after reviewing the record, we find the trial court employed conscientious judgment in arriving at a substantially just result in a case where a just result was difficult to achieve. Further, we hold there is substantial credible evidence on the record to support the findings of fact and conclusions of law of the trial court. Therefore, we affirm the trial court’s distribution of the marital estate.

II.

Did the trial court err in amending the original findings and conclusions?

As stated under the facts section of this opinion, after the trial court issued its original findings of fact and conclusions of law in April of 1985, husband then moved to amend this court document. This motion was granted by the trial court and judgment on the amended findings and conclusions was entered in June of 1985. Wife now asserts the trial court should have rejected husband’s motion to amend. We disagree.

Husband appears to have correctly submitted his motion to amend pursuant to Rule 52(b), M.R.Civ.P. We agree with husband that his motion was not unreasonable due to the amount of time which had elapsed between the date of trial (June 1984) and the date on which the original findings and conclusions were issued (April 1985). Husband’s motion appears mainly to have served as a reminder or “refresher” to the trial court that the complex and extensive property of the parties may not have been entirely equitably divided in the original findings and conclusions. Husband’s motion apparently served its purpose because the trial court subsequently did amend a limited number of its findings and conclusions. We hold such a use of a motion to amend is not unreasonable.

III.

Did the trial court err in awarding $400 per month per child in support, and in refusing to require additional support for medical, religious and scholastic expenses?

Wife initially points out that during the prolonged pendency of this proceeding, husband paid (under order of the trial court) $500 per child per month in interim child support. Wife now argues there is no logical reason for the trial court to reduce her child support to $400 per child per month especially in light of the diverse financial positions of the parties. Wife also asserts the trial court further abused its discretion (besides reducing her child support) by refusing to require husband to cover all the uninsured medical costs for the children, and by refusing to require husband to aid in any educational, religious or recreational expenses for the children. Wife argues because of the trial court’s abuse of discretion regarding child support and other related items, a substantial part of the burden of caring for the children and meeting their financial needs now falls on her new husband. We disagree.

The standard for reviewing child support awards made under Section 40-4-204, MCA, is well-settled in Montana.

“The award made by the District Court will not be disturbed on appeal unless there has been a clear abuse of discretion resulting in substantial injustice.”

Grenfell v. Grenfell (1979), 182 Mont. 229, 232, 596 P.2d 205, 207; see also In Re Marriage of Loegering (Mont. 1984), [212 Mont. 499,] 689 P.2d 260, 41 St.Rep. 1892.

We hold the District Court, in making its child support award, adequately considered the items and factors set out in Section 40-4-204, MCA. The record indicates the trial court heard testimony concerning the financial resources of the parties, the standard of living of the children before the separation, and other relevant factors. In fact, after reviewing the record, we find wife’s award of $400 per month in child support ($9,600 a year) to be more than adequate based on the factors enumerated in Section 40-4-204.

Further, we find no error in the trial court’s ruling that the parties shall equally share the responsibility for any uninsured medical costs for the children, and also that husband is not required to aid in any educational, religious, or recreational expenses for the children. The trial court was in the best position to judge the respective needs of the parties, and we will not disturb its decision absent a clear abuse of discretion. In the instant case, we find no clear abuse of discretion.

That portion of the judgment regarding child support is affirmed.

IV

Did the trial court abuse its discretion in refusing to award attorney’s fees and costs to wife?

The awarding of attorney’s fees are governed by Section 40-4-110, MCA, which states:

“The court from time to time, after considering the financial resources of both parties, may order a party to pay a reasonable amount for the cost to the other party of maintaining or defending any proceeding under chapters 1 and 4 of this title and for attorney’s fees, including sums for legal services rendered and costs incurred prior to the commencement of the proceeding or after entry of judgment. The court may order that the amount be paid directly to the attorney, who may enforce the order in his name.”

This Court has stated that the awarding of attorney’s fees is clearly permissive under this statute. In Re Marriage of Obergfell (Mont. 1985), [218 Mont. 83,] 708 P.2d 561, 42 St. Rep. 1414.

This Court has also stated in the past “that when the District Court refuses to award attorney’s fees, it must indicate in the findings of fact, conclusions of law, or order why such fees were not awarded.” See, Lewis v. Lewis (1982), 198 Mont. 51, 55, 643 P.2d 604, 606, and cases cited therein. Failure to set forth the specific reasons for denial of attorney’s fees, we stated in these earlier cases, constituted remandable error.

We now hold the rule expressed in the Lewis opinion, and earlier opinions, to be revised. Such a rule is much too harsh to be applied on a general basis. We hold a more appropriate standard for reviewing a District Court’s decision not to award attorney’s fees under Section 40-4-110 is whether the court abused its discretion in refusing to award such fees. Such a standard is more in line with this Court’s other standards of review regarding dissolution actions, and also is more in line with Section 40-4-110.

In the instant case, the record indicates the trial court was well appraised of the financial resources (and financial burdens) of both parties as required by Section 40-4-110. After assessing this information, the trial court determined that neither party was entitled to be awarded attorney’s fees. We find no abuse of discretion by the trial court in directing the parties to pay their own attorney’s fees. The judgment of the District Court is affirmed in all respects.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES GULBRANDSON, WEBER and SHEEHY concur.


author: MR. JUSTICE HUNT

text:
    JESSE A. TOAVS, Plaintiff and Appellant, v. BILLINGS FEDERAL CREDIT UNION, Clinton Van Atta, Defendants and Respondents.
    No. 85-520.
    Submitted on Briefs March 21, 1986.
    Decided June 5, 1986.
    719 P.2d 428.
    Jesse A. Toavs, pro se.

      Herndon, Harper & Munro, Scott H. Stanaway, Billings, for defendants and respondents.
   MR. JUSTICE HUNT

delivered the Opinion of the Court.

Jesse Toavs appeals the order of the District Court, Thirteenth Judicial District granting summary judgment for the defendants and respondents LaBonnie Realty and others. We affirm the order granting summary judgment.

Three issues are presented for our review:

1. Whether there is any genuine issue as to any material fact within the meaning of Rule 56(c), M.R.Civ.P. that the appellant received notice of the Credit Union’s Motion for Summary Judgment;

2. Whether or not there is a genuine issue as to any material fact that a mechanic’s lien filed by the appellant on December 6, 1984, with the County Clerk and Recorder of Yellowstone County, Montana, is invalid; and

3. Whether there is a genuine issue of material fact as to whether the appellant unlawfully detained the property and thereby damaged the Credit Union to the extent awarded by the District Court.

The Billings Federal Credit Union loaned Robert and Virginia Bowman $57,000.00 to improve some real property in Billings. In the fall of 1984, the loan approached default and the Bowmans executed a Warranty Deed dated October 19, 1984 to the Credit Union, conveying the property to the Credit Union. On October 19, 1984, the Credit Union hired an appraiser who notified the Credit Union that Toavs was occupying the property. The Credit Union sent by certified mail a letter dated October 31, 1984 to Toavs instructing him to leave the property. After receiving the letter Toavs inquired about purchasing the property. He applied for a loan from the Credit Union, but was rejected because he could not substantiate adequate income.

On December 6, 1984, Toavs filed a mechanic’s lien of $6,746.00 on the property with the Clerk and Recorder of Yellowstone County, but neglected to serve a copy of the mechanic’s lien upon the Credit Union. No one at the Credit Union had given Toavs permission to work on the property. The Credit Union had never received a bill for materials or labor expended on the property.

On April 16, 1985, the Credit Union served, through the constable of the Billings Justice Court, a second notice to Toavs to vacate. On April 18, 1985, Toavs filed an action in District Court with the mechanic’s lien as its basis and claiming that he had an agreement with Bowmans to purchase the property. Toavs did not respond to discovery requests. The Credit Union moved for summary judgment which was granted following a hearing at which Toavs failed to appear. Meanwhile, Toavs had filed a petition in bankruptcy in the United States Bankruptcy Court. By order dated February 1, 1986, that court lifted its previous stay on the execution of the summary judgment.

The first issue presented concerns whether there is a contested issue of fact whether Toavs was properly served with the Motion for Summary Judgment. This issue is one that should have been raised before the District Court, and cannot be raised on appeal. In Re Marriage of Glass (Mont. 1985), [215 Mont. 248,] 697 P.2d 96, 42 St.Rep. 328. We note, however, that the return of service was made by the constable.

The second issue raised by Toavs concerns the validity of the mechanic’s lien. Toavs failed to respond to the Credit Union’s requests for admissions. Rule 36, M.R.Civ.P. provides that requests for admissions which remain unanswered are admitted for all purposes. By failing to answer, Toavs admitted: that he did not serve the Credit Union; that he had not billed the Credit Union; and that he had no permission to reside on the property. Section 71-3-513(2), MCA specifically requires that a copy of a mechanic’s lien must be served upon the owner of the property in order to be valid. The District Court properly found the unserved lien invalid as a matter of law.

Toavs also contends that his occupation of the property was lawful and that the District Court erred in ordering him to vacate. We find there are no genuine issues of fact preventing summary judgment on this question. Toavs admitted he had no legal right to be on the property. The record indicates the Credit Union followed the proper statutory procedure in attempting to have Toavs quit the property. Therefore the District Court properly granted summary judgment to the Credit Union concerning Toavs’ unlawful detainer.

Finally, the evidence supporting the District Court’s award of damages and attorney’s fees is not only substantial, but uncontroverted.

The order of the District Court is affirmed in all respects.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES SHEEHY, MORRISON and GULBRANDSON concur.


text:
    STATE OF MONTANA, Plaintiff and Respondent, v. JOHN PROBERT, SR., Defendant and Appellant.
    No. 85-537.
    Submitted on Briefs March 13, 1986.
    Decided June 5, 1986.
    719 P.2d 783.

      Nye & Meyer, Jerrold L. Nye, Billings, for defendant and appellant.
    Mike Greely, Atty. Gen., George Schunk, Asst. Atty. Gen., Helena, John L. Pratt, County Atty., Roundup, for plaintiff and respondent.
   MR. JUSTICE HUNT

delivered the Opinion of the Court.

Probert appeals from his Musselshell County District Court jury trial and conviction for assault.

We affirm.

Probert raises three issues on appeal:

1. Whether his conviction under Section 45-2-201(l)(a), MCA, is unconstitutional?

2. Whether the District Court properly instructed the jury as to the applicable law under which they must decide the case?

3. Whether Probert received effective assistance of counsel?

The victim in this case, John Probert, Jr., is the defendant’s son. John was a problem child in the two years preceding the assault, both to his parents and school authorities. In those years, John saw the school counselor daily at first, then weekly. He was spanked several times by the school principal under strict controls and was not bruised or otherwise injured by the spankings. In January, 1985, two counselors told Probert and his wife that spanking had become an ineffective means of modifying John’s behavior. From that date on, the school no longer spanked John.

On April 23, 1985, Probert returned home after six weeks on the road driving a truck. Upon returning home, Probert learned that John, then nine years old, had set several fires, broken the windshield of a pickup, cut spark plug wires in the car, scattered gunpowder throughout the family trailer, cut down several small trees, vandalized a motorcycle, stole $20, run away with his younger sister for several hours, and destroyed or stolen other items. Probert delivered 20 lashes on John’s buttocks and legs with a leather belt.

The following day John showed his back side to a janitor. John’s back was welted and bruised severely from the knees to the lower back. The janitor reported what he had seen to school authorities. Pictures of John’s back were taken that day, and the sheriff and social services workers were notified. Assault charges were filed against Probert because of the incident.

The matter came to trial before a jury on June 25, 1985. The jury found Probert guilty of assault. Probert was given a three year deferred sentence conditioned upon his spending 30 days in the Musselshell County Jail and undergoing proper counseling. Probert appeals.

The first issue raised by Probert is whether Sections 45-5-201 (l)(a) and (3), MCA, are unconstitutional? That statute states:

“(1) A person commits the offense of assault if he:
“(a) purposely or knowingly causes bodily injury to another;
“(2) Except as provided in Subsection (3), a person convicted of assault shall be fined not to exceed $500.00 or be imprisoned in the county jail for any term not to exceed 6 months, or both;
“(3) If the victim is less than 14 years old and the offender is 18 or more years old, the offender, upon conviction under Subsection (l)(a), shall be fined not to exceed $50,000.00 or be imprisoned in the state prison for a term not to exceed 5 years, or both.”

Bodily injury is defined in Section 45-2-101(5), MCA, as “physical pain, illness, or any impairment of physical condition and includes mental illness or impairment.” The other pertinent statute is Section 45-3-107, MCA, which states:

“A parent... is justified in the use of such force as is reasonable and necessary to restrain or correct his child . . . .”

Probert argues that the assault statute is unconstitutional as it fails to give a parent fair notice of the conduct prohibited. A parent may legally discipline his child with the purpose of causing bodily injury to that child if the disciplinary action is reasonable, but the statutes give no aid in determining what is reasonable. Therefore, the assault statute is unconstitutionally vague.

It is the law of this State that a defendant cannot appeal an issue which was not raised at trial. Section 46-20-104(2), MCA. Three exceptions are codified at Section 46-20-702, MCA. Those exceptions are:

“(1) [T]he right asserted in the claim did not exist at the time of the trial and has been determined to be retroactive in its application;
“(2) the prosecutor, the judge, or a law enforcement agency suppressed evidence from the defendant or his attorney that prevented the claim from being raised and disposed of; or
“(3) material and controlling facts upon which the claim is predicated were not known to the defendant or his attorney and could not have been ascertained by the exercise of reasonable diligence.”

None of these exceptions apply in this case. Since the constitutional challenge was not raised at trial and does not fall within the exceptions listed above, we will not address the argument on appeal.

Probert’s second issue is whether the District Court properly instructed the jury as to the applicable law under which they must decide the case? Probert alleges four errors in the instructions. First, he argues the jury was not instructed of the crime charged. This is incorrect. Jury instruction No. 1 states that Probert was accused of the offense of assault, and instruction No. 2 contains the statutory definition of assault. The jury was properly instructed of the crime charged.

Second, he argues the jury was never instructed on the necessary elements which the State must prove, specifically the jury was told a parent must use reasonable force to discipline his child, but the jury was given no instruction as to what constitutes reasonable force. In State v. Straight (1959), 136 Mont. 255, 347 P.2d 482, we stated that the jury should consider all the facts and circumstances surrounding the punishment to determine whether it was reasonable, and we listed factors for the jury to consider. However, we have never held that those factors must be included in a jury instruction. The record indicates that the jury was given an opportunity to consider all the factors. The jury then was instructed that a parent is justified in the use of such force as is reasonable and necessary to correct his child. No further instruction elaborating what is “reasonable” is necessary.

Probert next argues the jury was not instructed on the State’s burden to prove its case beyond a reasonable doubt or on the elements of felony assault. He is not correct. The jury was informed three times in instruction No. 1 of the “reasonable doubt” standard, and reasonable doubt was defined in that instruction. Further, Probert was charged and convicted of assault, not felony assault or misdemeanor assault. The fact that the possible sentence for assault is great when the victim is age 14 or younger and the defendant age 18 or older is not an element of the crime of assault, but relates to sentencing only. Sentencing is the exclusive province of the judge. Section 46-18-103, MCA. The jury was properly instructed as to the elements of the crime of assault.

Finally, Probert argues the jury should have been instructed there was a lesser-included offense of misdemeanor assault for which he could be convicted. Misdemeanor assault is not a lesser-included offense of felony assault. As stated above, defendant was convicted of assault. The elements of assault are purposely or knowingly causing bodily injury to another. The fact that an assault conviction may subject the defendant to either a misdemeanor or felony sentence is not an element of the crime of assault, but an aspect of sentencing. The jury need not be instructed that the victim must be age 14 or younger and defendant age 18 or older. So long as the parties’ ages are established in the record (which they are), and the jury is instructed on the elements of assault there is no error. Probert’s jury instruction arguments are not persuasive.

Probert’s final issue on appeal is whether he received effective assistance of counsel? In State v. Rose (1980), 187 Mont. 74, 86, 608 P.2d 1074, 1081, this Court stated that a criminal defendant is entitled to the effective assistance of counsel acting within the range of competence demanded of attorneys in criminal areas. This standard was refined in State v. Boyer (Mont. 1985), [215 Mont. 143,] 695 P.2d 829, 42 St.Rep. 247, wherein we stated:

“First, the defendant must show that counsel’s performance was deficient. This requires showing that counsel made errors so serious that counsel was not functioning as counsel guaranteed the defendant by the Sixth Amendment. Second, the defendant must show that the deficient performance prejudiced the defense. This requires showing that counsel’s errors were so serious as to deprive the defendant of a fair trial, a trial whose results are reliable.”

Boyer, 695 P.2d at 831 (quoting Strickland v. Washington (1985), 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674).

To show prejudice:

“The defendant must show that there is a reasonable probability that, but for counsel’s unprofessional errors, the result of a proceeding would have been different. A reasonable probability is a probability sufficient to undermine confidence in the outcome.” State v. Robbins (Mont. 1985), [218 Mont. 107,] 708 P.2d 227, 232, 42 St.Rep. 1440, 1444 (quoting Strickland, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674.)

The above standards must be applied to the errors allegedly committed by Probert’s trial counsel. Probert alleges his counsel committed six major errors. They are: (1) failure to prepare jury instructions; (2) failure to object to jury instructions; (3) failure to object to improper rebuttal witnesses; (4) failure to object to hearsay testimony; (5) failure to challenge the constitutionality of the assault statute; and, (6) failure to exclude prejudicial irrelevant facts.

Counsel’s failure to prepare or object to jury instructions is not error. The jury was instructed as to the crime charged, the State’s burden, the parental privilege statute, and the definition of bodily injury. No further instructions are required.

Regarding counsel's failure to object to rebuttal witnesses, there was no error. Witness Hanson rebutted Probert’s claim that there had not been a beating, but merely a spanking. Witness Edes rebutted Probert’s claim that his son did not fear him. The witnesses were proper.

Counsel’s failure to object to hearsay was error. The victim did not testify, but several witnesses related to the jury the boy’s statements to them regarding the incident. However, we cannot say that the error was so prejudicial as to undermine confidence in the outcome of the case. Probert admitted punishing John. The issue was the reasonableness and necessity of the punishment. Probert testified that he administered 20 lashes to his son with a leather belt, and witnesses and admissible photographs clearly detailed the extent of his injuries. While it was error for defense counsel to fail to object to hearsay testimony, the error was not so prejudicial as to amount to ineffective assistance of counsel.

Counsel’s failure to raise the constitutional challenge is not error. There is a difference between ineffective assistance and counsel’s tactical decisions in defense of a case. We have held before that the decision of whether or not to challenge the constitutionality of a statute is a matter of legal judgment. State v. Maldonado (1978), 176 Mont. 322, 336, 578 P.2d 296, 304.

Probert’s final allegation merits discussion. He alleges his counsel failed to exclude prejudicial and irrelevant facts, specifically that John was removed from his parents’ home by the State the night after the incident. Probert claims this evidence prejudiced his defense to such an extent as to undermine confidence in the trial. The jury, instead of determining whether the punishment was reasonable and necessary was ruling on whether removal of the child from the home was necessary and proper. Probert’s argument has some merit. His counsel should have objected to this evidence as irrelevant to the issue at trial. Her failure to do so clearly constitutes error. However, we do not agree that the evidence unfairly prejudiced the defendant. Probert's own testimony established the fact and extent of the punishment, the admissible testimony of State’s witnesses established the severity of the injuries, and the photographs fairly and accurately depicted the injuries. There was abundant evidence supporting the jury verdict, and we do not agree that testimony regarding removal of the child from his home confused the jury or unfairly prejudiced the defendant or amounted to ineffective assistance of counsel.

For the reasons stated above, the verdict and sentence below are affirmed.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES WEBER, SHEEHY and GULBRANDSON concur.


author: MR. JUSTICE MORRISON

text:
    JESSIE H. CLEMANS, Defendant and Respondent, v. WAYNE MARTIN and Joyce Martin, Plaintiffs and Appellants.
    No. 85-546.
    Submitted on Briefs April 4, 1986.
    Decided June 5, 1986.
    719 P.2d 787.
    M. Richard Gebhardt, Ronan, for plaintiffs and appellants.
    French, Mercer, Grainey & Duckworth, John Mercer, Poison, for defendant and respondent.
   MR. JUSTICE MORRISON

delivered the Opinion of the Court.

Wayne and Joyce Martin (appellants) appeal the August 26, 1985, order of the Twentieth Judicial District Court, County of Lake, denying them a prescriptive easement for a roadway across Jessie Clemans’ (respondent) property. We affirm.

Appellants own a forty acre parcel of land on the west slope of the Mission Mountains. Their land is bordered on three sides by land belonging to the Confederated Salish and Kootenai Tribes. Respondent owns the property bordering appellants’ land on the west.

There is no road access to appellants’ property. This situation was acknowledged in appellants’ contract for deed:

“16. Access. The parties acknowledge that the property being sold hereunder is being sold without access.”

Appellants purchased their land from Art Zimmerman in 1983. Zimmerman and his wife had owned the land from 1967 until 1983. Bob Croft had owned the land since sometime prior to 1954 and had sold to Zimmermans. Upon purchasing the property in 1983, appellants filed suit seeking to establish their ownership of a prescriptive easement through respondent’s property for access to their property. A bench trial was had. Numerous witnesses testified for both parties.

Art Zimmerman testified that he first entered the subject land in 1937 to haul a load of wood. Zimmerman testified that he believed he gained access to the property via the road in dispute; that the road had no cuts or fills, but was not overgrown with timber or brush; and that it was in better shape than it is now. Zimmerman further stated that he did not seek permission to use the road; however, he had permission to obtain the firewood. While on the property, Zimmerman observed a small cabin, a garden plot and several vehicles and farm implements. Zimmerman did not return to the property until 1967, when he purchased a car from Bob Croft’s estate. Thereafter, Zimmerman decided to purchase the real property.

Next, Zimmerman testified that between 1967 and 1983, he used the roadway approximately three times a year to obtain firewood and Christmas trees. He further stated that the road was inaccessible in the winter. Although there were three gates across the road, they were never locked. Zimmerman merely opened and closed them as necessary for access. Finally, Zimmerman stated on direct examination that he had never sought permission from the Clemans to use the road. However, on cross-examination, he indicated that at Ralph Clemans’ request, he had always phoned to say he would be going to the property.

Wendall Putnam testified that he obtained firewood from respondent’s property from 1976 to 1982; that he never used the road in question; and that his access to the land was always with respondent’s permission. Merle Amerson testified that he leased pasture from respondent and used the road for access to his cattle in 1976, 1977, and from 1980 until 1983. Again, the road was used only with respondent’s permission. Amerson never found the gates locked until 1983. At that time, respondent provided him with a key for continued access. Neither witness ever saw anyone else using the disputed road.

Respondent testified that the road in question was built in 1955 by a logging contractor hired to harvest timber on her land. Once the logging was completed, the road was allowed to return to its natural condition. She further testified that neither she nor her husband (now deceased) ever allowed the road to be used without their permission. Even Bob Croft obtained permission to gain access via the road, when he chose to drive to his land.

After presentation of all the evidence, the presiding judge visited the site and examined the road in question. Thereafter, he issued an order denying Martins’ claim to a prescriptive easement. Following a timely notice of appeal, appellants raise the following issues:

1. Did the District Court err in failing to consider the priority of patents and consequently 43 U.S.C. Section 932 (repealed 1976) in the establishment of a right-of-way appurtenant to the homestead on the Martin parcel?

2. Did the Court abuse its discretion in failing to consider and rule upon relevant evidence of a prescriptive easement prior to 1955?

Issue number one is raised for the first time on appeal, apparently in an untimely effort to bolster appellants’ position. We have repeatedly refused to consider an issue raised for the first time on appeal. In re the Marriage of Glass (Mont. 1985), [215 Mont. 248,] 697 P.2d, 101, 42 St.Rep. 328, 333. Furthermore, we have held that a party may not advance on appeal a theory of the case different than that relied on below. Donnes v. State ex rel. Superintendent of Public Instruction (Mont. 1983), [206 Mont. 530,] 672 P.2d 617, 621, 40 St.Rep. 1834, 1838. For these reasons, we refuse to consider appellants’ first issue.

In their second issue, appellants contend the trial judge failed to consider evidence that a prescriptive easement existed prior to 1955. We disagree. The only evidence the road existed prior to 1955 was that presented by Art Zimmerman. The trial judge noted his testimony in his order:

“Mr. Zimmerman was on the land belonging to Plaintiffs in 1937. He purchased wood from the then owners of the Plaintiffs’ land. His entry was with the consent of the then owners of the Defendant’s land.”

This statement is an accurate reflection of Art Zimmerman’s testimony. Appellants apparently contend that the existence of a cabin and garden plot, as well as the presence of vehicles on the land in 1937, is irrefutable proof that the road was used for access to the property and that this use created a prescriptive easement. The trial judge did not agree. Substantial credible evidence supports his conclusion.

Respondent presented evidence at trial that the road at issue was not created until 1955. Other roads or paths existed in the same area prior to 1955, including an old homestead road. The trial judge found that the subject road did not exist in 1955; that other paths were used for access to the property prior to 1955; and that any access to the property through respondent’s land has always been permissive. Unless they are found to be clearly erroneous, we will not set aside the findings of fact of the trial court. Rule 52(a), M.R.Civ.P. In the Matter of the Guardianship and Conservatorship of Tennant (Mont. 1986), [220 Mont. 78,] 714 P.2d 122, 129, 43 St.Rep. 189, 198. The findings here are clearly supported by the evidence and will not be overturned.

The burden was on appellants to “show open, notorious, exclusive, adverse, continuous and uninterrupted use of the easement claimed for the full statutory period.” Taylor v. Petranek (1977), 173 Mont. 433, 437, 568 P.2d 120, 122. See also Rathbun v. Robson (Mont. 1983), [203 Mont. 319,] 661 P.2d 850, 851-52, 40 St.Rep. 475, 477. The statutory period is five years. Section 70-19-401, MCA. Because appellants were unable to prove adverse or continuous use for the five year period immediately prior to the filing of this suit, they are now relying on an historical adverse use which is refuted by the facts adopted by the trial court.

Lastly, appellants object to the form of the trial judge’s order because it does not list specific findings of fact separate and distinct from the conclusions of law and judgment. Rule 52(a), M.R.Civ.P. requires that “the court shall find the facts specially and state separately its conclusions of law thereon, and judgment shall be entered . . . .” In Re the Marriage of Barron (1978), 177 Mont. 161, 164, 580 P.2d 936, 938, we held that if a trial judge’s findings and conclusions are clear to this Court, failure to state them in the recommended form is not substantial error. Here, the trial judge’s facts are clear, as are his conclusions. Although Rule 52(a), M.R.Civ.P. specifies the preferred format, we find no error.

The judgment of the trial court is affirmed.

MR. JUSTICES WEBER, HARRISON, GULBRANDSON and HUNT concur.


author: MR. CHIEF JUSTICE TURNAGE

text:
    STATE OF MONTANA, ex rel. VELMA LOU AUSTIN, Petitioner and Appellant, v. LLOYD J. AUSTIN, Respondent and Respondent.
    No. 85-576.
    Submitted on Briefs March 6, 1986.
    Decided June 5, 1986.
    719 P.2d 429.
    Mike Greely, Atty. Gen., John Paulson, Asst. Atty. Gen., Helena, John Frederick, Co. Atty., Larry J. Nistler, Deputy Co. Atty., Poison, for petitioner and appellant.
    K.M. Bridenstine, Poison, for respondent and respondent.
   MR. CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Petitioner, State of Montana, brought this Uniform Reciprocal Enforcement of Support Act (URESA) action to enforce a child support obligation and obtain reimbursement for the State of Oklahoma. The Lake County District Court granted respondent’s motion to dismiss for lack of jurisdiction. From this order the State appeals.

We reverse the District Court’s order dismissing the case. We hold that the child support obligation was not dischargeable in bankruptcy and remand for a determination of the amount of arrearages which respondent is obligated to pay the State of Oklahoma.

The following issues were considered on appeal:

1. Whether the District Court’s order dismissing the URESA petition for lack of jurisdiction is appealable.

2. Whether the District Court had jurisdiction to determine the dischargeability of Oklahoma’s child support claim under federal bankruptcy law.

3. Whether the child support obligation was dischargeable under federal bankruptcy law.

Respondent makes an additional argument based on collateral estoppel. Our decision on the nondischargeability of respondent’s obligation makes consideration of this issue unnecessary.

Respondent is the father of five minor children who reside with their mother in the State of Oklahoma. Respondent was divorced from the mother in February 1975 and was ordered to pay child support to her in the amount of $259 per month. Respondent did not pay the court-ordered child support, and the State of Oklahoma sought reimbursement and current support from respondent in a petition under the URESA filed November 1980 in the District Court of Lake County, Montana, where respondent lives. The State of Oklahoma sought reimbursement from respondent in the amount of $16,058.

In September 1981, respondent filed a debtor’s petition for Chapter 7 relief in the United States Bankruptcy court in Missoula, listing the Oklahoma Department of Human Services as an unsecured creditor.

In October 1981, respondent filed a copy of a notice of stay from the United States Bankruptcy Court with the State of Montana, indicating respondent had filed a Chapter 7 bankruptcy petition and that certain acts and proceedings against respondent were stayed. In March 1982, the bankruptcy judge ordered respondent released from all dischargeable debts.

In April 1985 another petition under the URESA was issued to respondent by the State of Montana. Respondent moved for dismissal claiming the Lake County District Court lacked jurisdiction because the claim had already been discharged in bankruptcy by the United States Bankruptcy Court in March 1982. the District Court granted the motion. In its order dismissing the action, the District Court stated the following:

“The [child support debt] set forth on Schedule A-3 of respondent’s bankruptcy petition was probably nondischargeable, but the bankruptcy court had exclusive jurisdiction to make that determination.”

From this order of the District Court, the State of Montana appeals.

Respondent argues that the District Court’s order is not a “final judgment” subject to appeal. We disagree. A District Court order granting a motion to dismiss for lack of jurisdiction is appealable. See U.S. Nat. Bank of Red Lodge v. Mont. Dept. of Rev. (1977), 175 Mont. 205, 573 P.2d 188.

The second issue concerns the District Court’s conclusion that the bankruptcy court had exclusive jurisdiction to determine the dischargeability of respondent’s child support obligation. The District Court order was issued before our decision in State v. Dist. Court of Eighth Judicial Dist. (Mont. 1985), 710 P.2d 47, 42 St.Rep. 1773. In that case we determined that the district courts of this state have concurrent jurisdiction with the bankruptcy courts to determine the dischargeability of claims pertaining to child support under federal bankruptcy law. That decision controls here. We hold that the District Court has jurisdiction to determine the dischargeability of respondent’s debt to the State of Oklahoma. The District Court’s order dismissing the case must therefore be reversed.

Because the bankruptcy discharge order only purports to discharge dischargeable debts, the order does not relieve respondent of his nondischargeable obligations. This situation makes the final issue we considered sound circular. We are asked to determine whether the child support obligation was dischargeable in bankruptcy. If the obligation was not dischargeable, it was not discharged in bankruptcy.

The Bankruptcy Code specifically excludes child support obligations from debts that can be discharged in bankruptcy. 11 U.S.C. Section 523(a)(5). We hold that respondent’s child support obligations were not dischargeable in bankruptcy. As such respondent is still obligated to pay child support.

The District Court’s order of dismissal is reversed. The cause is remanded to the District Court for a determination of the arrearages which respondent is obligated to pay the State of Oklahoma. We further direct the District Court to enter judgment that respondent’s child support obligation remains in force and was not discharged in bankruptcy.

MR. JUSTICES HARRISON, MORRISON, HUNT and GULBRANDSON concur.


text:
    STATE OF MONTANA, DEPARTMENT OF COMMERCE, Plaintiff and Respondent, v. GALLATIN DAIRIES, INC., A Montana general cooperative association, and Associated Food Stores, Inc., a Utah corporation, Defendants and Appellants.
    No. 85-600.
    Submitted May 13, 1986.
    Decided June 5, 1986.
    719 P.2d 790.

      Cok & Wheat, Michael D. Cok argued, Bozeman, for Gallatin Dairies, Inc.
    Crowley Law Firm, James P. Sites, Billings, for Assoc. Food Stores, Inc.
    Geoffrey Brazier argued, Dept, of Commerce, Helena, for plaintiff and respondent.
   MR. JUSTICE HUNT

delivered the Opinion of the Court.

Gallatin Dairies (Gallatin) and Associated Food Stores (Associated) appeal the order of the Lewis and Clark County District Court holding that Associated could not purchase milk at jobber prices in Montana.

We affirm.

The appellants raise the following issues on appeal:

1. Did the District Court err in denying appellants’ motion to dismiss based upon collateral estoppel?

2. Did the District Court err in determining that Associated must pay wholesale price for milk purchased within Montana?

Gallatin processes and markets milk produced by member dairy farmers and is a licensed distributor under Montana’s Milk Price Control Act, Section 81-23-101, et. seq. MCA (the Act). Associated is a Utah corporation, qualified to do business in Montana. It is owned by various independent retail stores who are members of Associated and it is taxed as a cooperative. Associated buys groceries from manufacturers and brokers, warehouses them, and resells to retailers, both members and nonmembers.

In 1980, Associated petitioned the State for permission to distribute milk. Although it could not be licensed because it did not fit within any license category under the Act, the District Court allowed Associated to distribute milk without a license pursuant to this Court’s decision in Albertson’s v. Department of Business Regulation (1979), 184 Mont. 12, 601 P.2d 43. Associated purchased no milk in Montana until April, 1985. Beginning in April, 1985, Associated and Gallatin arranged for Associated to purchase milk from Gallatin at jobber prices and distribute it only to Associated member stores. Jobber prices are 80% of wholesale. Neither Associated nor Gallatin made an application for a special price to the Milk Control Board.

The Department of Commerce, through the Milk Control Bureau, sought a preliminary injunction in the Lewis and Clark County District Court to prevent Gallatin from selling milk to Associated at jobber prices. It also sought a declaratory judgment as to whether wholesale or jobber prices apply to the sales of the milk products in question. Gallatin and Associated moved to dismiss the State’s complaint on the ground of collateral estoppel which the District Court denied. After the State withdrew its application for a preliminary injunction, the parties stipulated to submitting the price issue on cross-motions for summary judgment.

After the parties filed briefs, the District Court permitted Ed McHugh, a licensee under the Milk Control Act, to intervene and participate in oral argument. On September 19, 1985, the District Court held that Associated could not purchase milk at jobber prices in Montana, and must pay Gallatin the wholesale price. This appeal followed.

The first issue is whether the doctrine of collateral estoppel bars the District Court from ruling that Associated must purchase milk at wholesale prices?

The elements of collateral estoppel are as follows:

“(1) the party adversely affected by estoppel has had a full and fair opportunity to litigate the critical issues; (2) the assertion of estoppel by a stranger to the original judgment would create analogous results in the latter case; (3) the party affected by estoppel has sound reasons why he or she should not be bound by the previous judgment; (4) the previous judgment was the result of thorough litigation; and (5) there was an appeal from the original judgment.”

Beckman v. Chamberlain (Mont. 1983), [_Mont__,] 673 P.2d 480, 481, 40 St.Rep. 2044, 2045.

Appellants argue that Judge Meloy’s 1980 decision permitting Associated to distribute milk without a license impliedly decided the issues of this case. Since Associated was allowed to distribute milk at wholesale prices, it must be implied that it may purchase that milk at jobber prices. Any other holding would not make sense. We do not agree.

The District Court correctly found that collateral estoppel did not apply. The party adversely affected by estoppel (the Department) has not had a full and fair opportunity to litigate critical issues of this case because in 1980 Associated represented that it was a retailer and wanted to purchase milk at wholesale prices out of state. Now it wants to purchase milk at jobber prices within the state. Also the assertion of estoppel by Gallatin is an assertion by a “stranger” to the original judgment. The substantive issue in this case (the price at which Associated must purchase milk in this State) was not litigated in the 1980 case. The appeal from the 1980 judgment was dismissed and, therefore, not decided. Collateral estoppel does not bar the Department from litigating this case.

The second issue is whether the District Court erred in determining that Associated must pay the wholesale price for milk purchased in Montana? Resolution of this issue depends upon determining the status of Associated under the Act. Associated claims it does not fit within any category under the Act, but essentially functions as a jobber and is therefore entitled to jobber prices. The Department argues that Associated is a retailer subject to wholesale prices. We agree with the Department.

A jobber is defined in Section 8.79.101(1)(1), A.R.M. as:

“. . . any independent businessman other than a store, wholesale grocery purchasing organization, or wholesale grocery broker, who has no financial connection with any distributor other than acquiring the distributor’s packaged product and distributing and selling the same, and whose business practices and policies are within his exclusive province to establish, and not subject to any influence or control from the distributor. (Emphasis added.)”

The District Court correctly concluded that because the activity and function of jobber is specifically covered by the Act, one must qualify as a jobber in order to qualify for jobber prices. Associated does not qualify as a jobber. As a wholesale grocery purchasing organization, Associated is precluded from being a jobber by the definition under the regulations. Further Section 81-23-305(1), MCA, expressly prohibits a jobber from being financially interested in the conduct or operation of the business of a retailer. Associated is financially interested in the operation of its member stores. In addition, while Associated performs some of the functions of a jobber, that does not make it a jobber. Almost everything that a person in the chain of distribution of milk does is an activity that jobbers perform. Associated still does not fall within the definition of a jobber.

Associated is a retailer. A retailer is defined at Section 81-23-101(l)(r), MCA, as:

. . a person selling milk in bulk or in packages over the counter at retail or for consumption on the premises and includes but is not limited to retail stores of all types, restaurants, boardinghouses, fraternities, sororities, confectionaries, public and private schools, including colleges and universities, and both public and private institutions and instrumentalitites of all types and description.”

Section 8.79.101(l)(n), A.R.M. defines “stores” to mean:

“. . . any grocery ... or similar mercantile establishment, whether rural or urban, which sells milk over the counter or on the premises to customers at retail, and unless otherwise distinguished herein, includes chain stores, supermarkets, and wholesale food purchasing organizations. (Emphasis added.)”

Clearly, Associated meets the definition of a retailer under the Act and regulations. A retailer includes a “store.” A store is defined as including “wholesale food purchasing organizations.”

Because Associated is a retailer and not a jobber, the District Court correctly concluded that “the correct price for transactions between Gallatin Dairies and Associated Foods is the wholesale price.

The order of the District Court is affirmed.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, WEBER, MORRISON, SHEEHY and GULBRANDSON concur.