author: JUSTICE NELSON JUSTICE TRIEWEILER

text:
    CITY OF KALISPELL, a municipal corporation, Plaintiff and Appellant, v. FLATHEAD COUNTY, a political subdivision of the State of Montana, and the FLATHEAD BOARD OF COUNTY COMMISSIONERS, Defendants and Respondents, JOSEPHINE SIDERIUS, Intervenor and Cross-Appellant.
    No. 93-069.
    Submitted on Briefs June 1, 1993.
    Decided August 31, 1993.
    50 St.Rep. 1033.
    260 Mont. 258.
    859 P.2d 458.

      For Plaintiff and Appellant: Glen Neier, City Attorney, Kalispell.
    For Defendants and Respondents: Thomas J. Esch, Flathead County Attorney, Dennis J. Hester, Deputy County Attorney, Kalispell; Richard DeJana, Kalispell.
   JUSTICE NELSON

delivered the Opinion of the Court.

This is an appeal and cross-appeal from an Eleventh Judicial District Court, Flathead County judgment, granting summary judgment to the Intervenor on two issues and denying summary judgment on a third. We dismiss the appeal and remand.

We restate the issue on appeal as follows: is the decision of the board of county commissioners to conditionally approve a preliminary subdivision plat appealable?

The City of Kalispell and Flathead County have established the jurisdictional area of their city-county planning board pursuant to § 76-1-504, MCA. The planning board formulated a master plan for the jurisdictional area which was adopted by the City of Kalispell (the City) and Flathead County (the County) in 1986. The Intervenor owns an approximately 40 acre property which she wants to subdivide and which is located outside but within 3 miles of the corporate city limits of the City and within the jurisdictional area of the city-county planning board. This subdivision is at issue in the present action.

In July of 1991, Intervenor applied for preliminary plat approval for a 5 lot subdivision of her property to be named Ashley Business Park. In August of 1991, the Flathead Regional Development Office (FRDO) provided a report to the Board of Commissioners of Flathead County (the County Board), reviewing, commenting on, and recommending denial of, the application for the subdivision. The FRDO report concluded that the proposed subdivision was not in conformity with the master plan which had designated the area encompassing the proposed subdivision as being appropriate for agricultural use. Additionally, the FRDO report, for the most part, weighed the criteria specified in § 76-3-608, MCA, against the proposed subdivision.

Similarly, on presentment of the proposed subdivision to the City for its review and comment, the City adopted a resolution opposing the granting of preliminary subdivision approval by the County Board.

The journal of the County Board reflects that it reviewed the Intervenor’s application for plat approval in September of 1991. It adopted the FRDO’s findings of fact with two amendments. However, despite the recommendation of the FRDO that the proposed subdivision be denied and the City’s opposition, the County Board, without making written findings of its own, granted preliminary plat approval to Ashley Business Park.

The City filed a complaint in the District Court on October 4,1991, contending that the County Board’s action in approving the preliminary plat was illegal because its decision amounted to spot zoning in an unzoned area; because the preliminary plat was not in conformity with the City-County Master Plan; and because the decision was not supported by substantial evidence and was arbitrary, capricious and an abuse of discretion. The City requested judgment that the County Board’s approval of the preliminary plat was null and void and that the court prohibit the County Board from approving the final plat until it conforms to the City-County Master Plan.

The Intervenor filed a motion for summary judgment in the action on the grounds that the approval by the County Board was supported by substantial evidence and that, as a matter of law, there could be no spot zoning. The Intervenor brought a second motion for summary judgment on the basis that the City lacked standing in the action.

Ultimately, the trial court ruled:

1. That Intervenor’s Motion for Summary Judgment on the issue of the Plaintiff’s lack of standing is DENIED.
2. That Intervenor’s Motion for Summary Judgment on the issue of whether the Defendant’s preliminary plat approval of a subdivision need not comply with the master plan is GRANTED.
3. That Intervenor’s Motion for Summary Judgment on the issue of spot-zoning is GRANTED.
This appeal by the City followed.

On appeal, the parties raise significant issues of first impression concerning whether the City has standing to bring this action, whether, and to what extent, the master plan must be used by the county board in the subdivision review process, and whether, in this case, that process was used to illegally spot zone in an unzoned area.

Notwithstanding, we must decline to rule on those issues at this time by reason of our decision in Sourdough v. Board of County Commissioners (1992), 253 Mont. 325, 833 P.2d 207.

That case involved the appeal by an intervening party from the county board’s conditional approval of a preliminary subdivision plat. In affirming the district court’s dismissal of the petitioner’s appeal from the county board’s action, we held that the appeal was improperly taken under § 76-2-110, MCA, as that statute deals with planning and zoning issues. We also held that § 2-4-702, MCA, could not serve as the basis for appeal as the county board of commissioners is specifically excluded from the agency definition of the Montana Administrative Procedure Act via § 2-4-102(2)(b), MCA.

Finally, since that case, like the present one, was a subdivision case, we held that there was no mechanism under the Montana Subdivision and Platting Act, Title 76, Chapter 3, MCA, for appealing from the conditional approval of a preliminary subdivision plat. Specifically, we observed that, “[t]he legislature did not provide an appeal process under this Act for cases involving decisions of conditional approval of preliminary plats; accordingly, this Court, will not fabricate one.” Sourdough, 833 P.2d at 208. In dismissing the appeal we found it unnecessary to weigh the conduct of the county board and the exercise of its discretion in conditionally approving the preliminary plat.

In his special concurrence, Justice Trieweiler found that it was "... anomalous that the legislature would enact specific criteria, such as those found in § 76-3-608, MCA, which must be met before a local commission can approve a subdivision and then provide no means of judicially enforcing the law.” Sourdough, 833 P.2d at 210.

We note, however, that since our decision in Sourdough was handed down, the legislature enacted significant amendments to the Montana Subdivision and Platting Act but still declined to provide a statutory method for appealing from the conditional approval of a preliminary subdivision plat. See House Bill 408, Section 5, Chapter 272, Laws 1993, effective April 6, 1993.

While the dissent argues that the majority has, sua sponte, decided this case on an issue not raised or briefed by the parties, the Intervenor did, citing Sourdough, argue that there is no appeal from the conditional granting of a preliminary plat and that, therefore, "... there can be no standing to bring an action that cannot be brought.” Intervenor went on to observe that such a ruling was understandable because “... [ujntil the land owner has complied with the conditions of the preliminary plat, there is no risk of a case or controversy ... [and that] [i]t is upon submission and approval of the final plat, that the issue is ripe for judicial review.”

Notwithstanding, the City, in its reply brief filed after Intervenor’s brief, chose not to discuss, meet or even mention the citation to Sourdough by the Intervenor. We assume that if the City had disagreed with Intervenor’s interpretation of or reference to Sourdough, it would have said so.

That aside, for this Court to simply ignore a dispositive precedent decided within the last year because the parties themselves chose to avoid it or to not entirely rely on that case, merely creates confusion and uncertainty in the law.

In Sourdough, the plaintiff appealed the county board’s approval of a preliminary plat by requesting that a writ of mandamus issue directing the county board to appoint the city planning board to review the entire project and reverse the county board’s findings of fact. Notwithstanding, in affirming the dismissal of the complaint by the district court for failure to state a claim, we held that there is no appeal process from the approval of a preliminary plat under § 76-2-110, MCA (planning and zoning), under §§ 76-3-101, MCA, et. seq., (The Subdivision and Platting Act), or under § 2-4-702, MCA (MAPA).

Similarly, the City, here, filed a complaint for declaratory judgment, injunction, writ of mandamus or other appropriate writ praying that the county board’s approval of the preliminary plat be adjudged null and void and praying that the county board be prohibited from approving the final plat unless it conforms to the master plan. Since we declined “to fabricate” an appeal process under Sourdough, we must, if stare decisis means anything, decline to fabricate an appeal process in the instant case. If mandamus did not lie in Sourdough-, it does not lie here. If there was no appeal process available in the former case; there is none here, either.

While we did not discuss the availability of a writ of review in Sourdough, neither did the City, here, ask for such a writ or in any respect comply with the provisions of Title 27, Chapter 25, MCA, in seeking that relief, if that was its intention. Aside from referring to declaratory judgement, injunction, mandamus or other appropriate writ in the title of its complaint, those forms of relief are not otherwise referred to or prayed for in the City’s complaint. Under the circumstances, we are no more inclined to fabricate pleadings for the parties than we are to fabricate remedies.

This Court’s opinion is not to be read as rendering meaningless the statutory requirements of the Subdivision and Platting Act. Again, as in Sourdough, we make no comment on the county board’s conduct in this case nor do we pre-judge any of the substantive issues raised by the parties in this appeal. The discussion and resolution of those matters will simply have to await an appeal after judicial review of the approval or denial of a final subdivision plat in this or some other case and controversy directly involving those issues.

Finally, and notwithstanding the adoption of major revisions to the Subdivision and Platting Act by the 1993 Legislature, that same body has chosen not to enact an appeal process from the approval of a preliminary plat at any time since the Act was adopted. While the wisdom of that decision may be questionable given the importance of the requirements of the Act and the potential for harm if the law is disregarded at a critical stage of the review process, it is not the prerogative of this Court to judicially remedy the situation.

Accordingly, our decision in Sourdough is dispositive, and we are constrained to dismiss this appeal as being premature.

Furthermore, and consistent with that decision, the District Court should not have entertained the City’s appeal from the County Board’s decision. Accordingly, we also remand to the District Court with instructions that it enter an order which vacates its findings of fact, conclusions of law and judgment dated October 29, 1992 and filed November 2, 1992, and which dismisses the City’s complaint without prejudice.

Appeal dismissed and case remanded.

CHIEF JUSTICE TURNAGE, JUSTICES HARRISON, GRAY and WEBER concur.

JUSTICE TRIEWEILER

dissenting.

I dissent from the majority opinion.

We have repeatedly held that we will not decide cases on appeal based on issues which have never been raised in the District Court. Hanley v. Dept. of Revenue (1983), 207 Mont. 302, 306, 673 P.2d 1257, 1259. The issue which the majority finds controlling in this case was never raised in the District Court, it was never part of the decision appealed from, and it has never been briefed nor argued as an issue on appeal. According to the rules we apply to the district courts of this state, we do not have jurisdiction to decide the issue which the majority decision finds dispositive. See In re Marriage of Di Pasquale (1986), 220 Mont. 497, 499, 716 P.2d 223, 225.

While the Sourdough decision was mentioned briefly in the intervenor’s brief as it related to the issue of standing, the right of the City to appeal the decision of the County Commissioners was not an issue on appeal, and the City has had no opportunity to argue, brief, or respond to the legal issue on which the majority bases its decision to dismiss the City’s appeal.

Considering our traditional notions that issues are decided most reliably after thorough argument by adversaries, how can this result be fair?

I concurred with the result of the Sourdough decision because the plaintiff in that case sought to appeal a county commission’s conditional approval of a preliminary subdivision plat pursuant to §§ 76-2-110 and 2-4-702, MCA. After briefing the issue and hearing argument, the district court concluded, and I agreed, that the former statute pertained only to appeals from planning and zoning decisions and the latter statute was, by definition, inapplicable to the decisions of county commissioners. That case did not address the issue of whether there is any other procedure by which county commissions can be compelled to perform their statutory obligation under the Montana Subdivision and Platting Act found at §§ 76-3-101 through -614, MCA.

In this case, the City of Kalispell did not attempt to appeal a decision of the County Commissioners based on the aforementioned statutes. It filed a complaint for declaratory judgment and injunction and for a writ of mandamus or other appropriate writ.

The majority opinion has dismissed the City’s appeal to this Court for the reason that the Subdivision and Platting Act does not provide for an appeal from a county commission’s decision to conditionally approve a preliminary plat. However, writs of mandamus are specifically intended for situations like this where there is no adequate remedy in the ordinary course of law. Section 27-26-102, MCA. Furthermore, a writ of mandamus may be issued by the district court to a board of county commissioners to compel the performance of an act which they are obligated to perform as a duty of their office.

The City has complained that the Flathead County Commissioners have refused to perform several duties which they are required to perform under the Subdivision and Platting Act. It is alleged that the Commissioners approved the subdivision in question without making specific findings that the subdivision would be in the public interest, as required by § 76-3-102, MCA, without determining that it conforms to the local master plan, as required by § 76-3-604, MCA, and without making written findings that it considered the specific criteria set forth in § 76-3-608, MCA.

Furthermore, the City has alleged that without complying with these statutory requirements, the County Commission was without authority to approve this subdivision. This was, therefore, an appropriate situation for a writ of review, pursuant to § 27-25-102, MCA, or a writ of mandamus pursuant to § 27-26-102, MCA.

It is, perhaps, for these reasons that at no stage in the proceedings before the District Court or on appeal has either Flathead County or the intervening developer moved to dismiss the City of Kalispell’s complaint, or its appeal from the judgment of the District Court, pursuant to our decision in Sourdough. It is simply wrong for this Court to sua sponte decide this case on a basis that has never been suggested by the parties to the case.

The Montana Subdivision and Platting Act is extremely important to the future quality of life in Montana. Its purpose is to:

[PJromote the public health, safety, and general welfare by regulating the subdivision of land; to prevent overcrowding of land; to lessen congestion in the streets and highways; to provide for adequate light, air, water supply, sewage disposal, parks and recreation areas, ingress and egress, and other public requirements; to require development in harmony with the natural environment ....

Section 76-3-102, MCA.

Nowhere are these considerations more relevant than Flathead County which has, in recent years, experienced the most rapid growth in Montana.

It is to accomplish these purposes that county commissioners who are asked to approve subdivisions are required to consider the master plan adopted by the county. Section 76-3-604, MCA. It is to accomplish these purposes that the county commissioners are also required to consider whether the subdivision is in the public interest and issue specific findings of fact which weigh criteria such as the need for the subdivision, effects on agriculture, effects on local services, effects on the natural environment, effects on wildlife and wildlife habitat, and effects on public health and safety. Section 76-3-608, MCA.

The majority’s decision renders these essential statutory requirements meaningless because the practical effect of this decision is to preclude any form of judicial review when two out of any three county commissioners around the state simply refuse to comply with the statutes. The fact that this case was decided on this basis, without the benefit of any briefing or argument by the parties, is particularly troubling.

It is ironic that, because the Montana Legislature recognized the threat to Montana’s character, beauty, and public health from uncontrolled development, it expended considerable time and effort during the past legislative session to strengthen subdivision regulations. See House Bill No. 408,1993 Mont. Laws, ch. 272, effective April 6,1993. Yet, by virtue of this decision, those regulations are meaningless because they cannot be judicially enforced.

The majority concludes that the City’s “appeal” is premature. However, the City’s complaint to the District Court was not an “appeal,” and if it was, the majority should explain why it was “premature.” If it is being dismissed due to the lack of a statutory appeal mechanism in the Subdivision and Platting Act, then there is no reason to distinguish between preliminary plat approval and final plat approval. There is no statutory mechanism for appealing either. If the same reasoning applies to both preliminary and final decisions, then why is this “appeal” simply “premature”?

In response to this dissent, the majority argues that because the intervenor made passing reference to the Sourdough decision while citing it for other reasons, the issue upon which this case was decided was properly raised on appeal. However, the issues, as set forth in the parties’ briefs, made clear that the issue decided by the majority was not raised on appeal. The appellant presented the following issues for review:

I. When a County takes erroneous, arbitrary, capricious action, or abuses its discretion, in a subdivision approval, does a City have standing to challenge the action when the City is a co-adopter of the Master Plan and § 76-3-601, M.C.A., authorizes review and comment by the City?
II. Is Master Plan compliance part of the public interest criteria of the Subdivision & Platting Act, or does the County have authority to ignore the Master Plan?
III. Should the principles of “spot zoning” be applied to subdivisions in unzoned areas?

The issues, as set forth by the County and the intervenor, were simply variations of the same three issues set forth above. It should be clear from the majority’s own opinion that the issue it decided was not raised by the parties. The majority’s opinion points out that “[w]e restate the issue on appeal as follows ....”

If the issue that the majority resolved was actually raised by the parties, why was it necessary to restate it?

The majority considers it significant that the City chose not to respond to the intervenor’s reference to the Sourdough decision when the City filed its reply brief. There was no reason for the City to respond. Sourdough was simply not relevant to the issues raised in this appeal.

Perhaps most importantly, none of the arguments made by the majority in support of its dismissal of this appeal were made by any party in the District Court. This fact is the most logical explanation for why the complaint filed by the City was not refined to the majority’s satisfaction. The City, in its complaint, sought a writ of mandamus or other appropriate writ. The purpose of requiring that objections to the inadequacy of a parties’ complaint be made in the trial court is to give the party who filed the complaint an opportunity to correct any alleged deficiency. The City was not given that opportunity in this case because there was no objection to its complaint on the grounds raised by the majority until the opinion was issued by this Court. It is a little late for the City to correct the majority’s objections at this time.

Finally, it is appropriate to comment on the majority’s statement that since the Legislature did not provide for a right of appeal from plat approval, this Court would not “fabricate” an appeal process. Such judicial restraint might be admirable if this was in fact an appeal. However, it is not. This case was commenced by the City of Kalispell when it filed a complaint for a writ of mandamus or other appropriate writ to compel the Flathead County Commissioners to perform their public duty. And, whether Commissioners can be compelled to comply with the terms of this State’s Subdivision and Platting Act by mandamus or certiorari was never addressed in the Sourdough opinion.

Furthermore, the majority’s reluctance to “fabricate” a right of appeal is selective at best. In the very same opinion, this Court goes on to advise the parties that judicial review will have to await approval of the final plat map. The majority states that:

The discussion and resolution of those matters will simply have to await an appeal after judicial review of the approval or denial of a final subdivision plat in this or some other case and controversy directly involving those issues.

The majority must have overlooked the fact that neither did the Legislature provide an appeal process from final subdivision plat approval. Would the same Court which showed such remarkable restraint by declining to “fabricate” an appeal process from a preliminary plat approval turn around and “fabricate” an appeal process from a final plat approval? If not, then as previously mentioned, the provisions of the Subdivision and Platting Act are truly meaningless.

For these reasons, I dissent from the majority opinion. I would affirm the District Court’s conclusion that the City of Kalispell had standing to complain of the County Commission’s approval of this subdivision. I would reverse that part of the District Court’s summary judgment which dismissed the City of Kalispell’s complaint, and remand this case for further hearing to determine whether there is a factual basis for the issuance of the writ of mandate or other appropriate writ sought by the City of Kalispell.

JUSTICE HUNT joins in the foregoing dissent.


source: Caselaw Access Project

author: JUSTICE TRIEWEILER CHIEF JUSTICE TURNAGE

license: Public Domain

text:
    IN RE THE MATTER OF THE CLAIM OF MARY JANE KOWALSKI. ANDREA “ANDY” BENNETT, State Auditor and Commissioner of Insurance of the State of Montana, Petitioner and Appellant, v. GLACIER GENERAL ASSURANCE COMPANY, a Montana corporation, Respondent and Respondent.
    No. 92-314.
    Submitted on Briefs December 10, 1992.
    Decided September 2, 1993.
    50 St.Rep. 1038.
    260 Mont. 269.
    860 P.2d 104.

      For Petitioner and Appellant: Allen B. Chronister, Chronister, Driscoll and Moreen, Helena.
    For Claimant: Otis M. Underwood, Underwood & Associates, Inc., Oxford, Michigan, and Thomas A. Budewitz, Helena.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

Claimant Mary Jane Kowalski filed a claim against Glacier General Assurance Company, in liquidation, pursuant to § 33-2-1364, MCA. That claim was denied by the Commissioner of Insurance who had been appointed liquidator, and was, therefore, referred for a hearing to the referee appointed by Montana’s District Court for the First Judicial District in Lewis and Clark County. After a hearing, the referee rendered an opinion, including findings of fact and conclusions of law. He recommended that the District Court order the liquidator to accept claimant as a Class 3 claim under § 33-2-1371(3), MCA, for payment of $163,696. Over the liquidator’s objection, the District Court accepted the referee’s opinion, findings of fact, and recommendation. The Commissioner of Insurance appeals from that order. We affirm the order of the District Court.

The issue on appeal is whether Mary Jane Kowalski, as a third-party claimant in the liquidation of Glacier General Assurance Company, was precluded by a judgment entered in her favor against Glacier’s insured from claiming damages in an amount greater than the amount for which the judgment was entered.

FACTUAL BACKGROUND

Following the hearing conducted by the referee appointed by the District Court, the referee made and entered detailed factual findings. Those findings were not challenged by the liquidator in her objections filed with the District Court, and are not challenged on appeal. Furthermore, the liquidator has provided this Court with no transcript from which this Court could independently evaluate the testimony submitted by the parties. Therefore, the following factual summary is based upon the referee’s findings.

On May 8,1980, Robert I. Lubin, a doctor of podiatry, performed a surgical procedure on claimant’s right foot. That surgery was performed negligently. As a result, claimant had to undergo additional surgical procedures, has suffered continuous pain in her right foot, and now has significant physical impairment to her foot, as well as her right knee and hip. She has had to discontinue her former employment and is now limited to occupations which require no standing.

Claimant was 42 years old at the time of Dr. Lubin’s surgery, and as a result of her physical impairment which was caused by that surgery, her earning capacity was significantly reduced.

From January 31, 1980, to January 30, 1981, Dr. Lubin was insured against professional liability by a policy issued by Glacier General Assurance Company.

On November 27, 1984, claimant filed suit against Dr. Lubin in Oakland County, Michigan, alleging that she had been injured due to his professional negligence.

On November 12,1985, Glacier General Assurance Company was declared insolvent and ordered into liquidation by order of the District Court in Lewis and Clark County, Montana. Andrea Bennett, the State Auditor and Commissioner of Insurance, was appointed liquidator and notice of the insolvency and liquidation was sent to Glacier General’s policy holders and third-party claimants.

On April 28, 1986, the liquidator received a claim from claimant in compliance with § 33-2-1365, MCA, and on June 17,1986, she also received a claim from Dr. Lubin, Glacier General’s insured.

No response, nor additional information, was provided by the liquidator to claimant until her claim was denied.

On August 18,1988, claimant concluded her litigation against Dr. Lubin in Michigan by settlement for $35,000. That settlement was formalized by the entry of a consent judgment against Dr. Lubin in the Circuit Court for the County of Oakland in the State of Michigan. However, claimant did not execute a release in favor of either Dr. Lubin, Glacier General Assurance Company, or the liquidator. The insurer who insured Dr. Lubin after January 30, 1981, paid $17,500 of the judgment, and the other half of the judgment was to be paid by Dr. Lubin personally within three years from the date of judgment.

When the consent judgment was entered, the liquidator recommended that Dr. Lubin’s claim be allowed in the amount of $17,500 and that claimant’s claim be denied.

Claimant, through her attorney, objected to the liquidator’s recommendation and the contested claim was, therefore, referred to Mr. Jon Ellingson, the referee appointed by the District Court to hear contested claims in the Glacier General liquidation pursuant to § 33-2-1368(2), MCA.

In the proceedings before the referee, the liquidator defended her denial of claimant’s claim on the basis that Glacier General’s obligation under the terms of its policy with Dr. Lubin was limited to any sums that he was legally obligated to pay as damages, and that the amount he was legally obligated to pay had been conclusively established by the consent judgment previously entered in Michigan. The liquidator contended that since half of that judgment had been already satisfied by another insurer, and since she had agreed to indemnify Dr. Lubin for the remainder of that judgment, Glacier General had no further obligation to claimant.

Claimant responded that she settled with Dr. Lubin on the first day of trial because he had demonstrated that he was impecunious and she had been led to believe that Glacier General was so deep in debt that there was no insurance coverage with which to satisfy a judgment against him. She contended that it was not until 1989, after the consent judgment was entered, that she was first notified that there may be some funds available to pay her claim.

Claimant also pointed out that pursuant to § 33-2-1365(4), MCA, judgments entered against an insured, after a successful petition for liquidation, need not be considered as evidence of liability, or the amount of damages. The liquidator provided no authority to the contrary, and the referee, therefore, concluded that the value of claimant’s claim was not conclusively established by the previous consent judgment. The referee concluded that, unlike other jurisdictions which had adopted statutes based on the Model Insurers Supervision, Rehabilitation, and Liquidation Act, § 33-2-1367(1), MCA, of Montana’s Act did not preclude a third-party claimant from filing a claim against an insured and a subsequent claim with the liquidator. He also concluded that res judicata was not applicable because of the nature of the judgment entered in Michigan and pointed out that there was no danger of double recovery in this case because § 33-2-1371(3), MCA, provides that the liquidator shall receive credit for any indemnification previously provided to claimant.

Based on these conclusions and the previous facts, the referee recommended that the liquidator be ordered to accept claimant’s claim.

The referee’s proposed order was issued on December 20,1991. On January 9,1992, the liquidator filed her objection to that recommendation in the District Court. New counsel was substituted to represent the liquidator in District Court, and additional arguments, including collateral estoppel, statutory estoppel, and equitable estoppel were asserted as bases for denying claimant’s claim in liquidation. The District Court concluded that the new defenses were subsumed in the defense of res judicata, and that res judicata was not applicable based on § 33-2-1365(4), MCA. The District Court, therefore, accepted the recommendation of the referee and ordered the liquidator to accept claimant’s claim in the amount recommended.

DISCUSSION

Mary Jane Kowalski’s claim in this matter is governed by the terms of Montana’s Insurers Supervision, Rehabilitation, and Liquidation Act found at § 33-2-1301 through -1388, MCA. That Act provides that the Insurance Commissioner may petition a district court for an order directing the Commissioner to liquidate a domestic insurer like Glacier General, when, among other reasons, the insurer is insolvent so that its continued operation would be detrimental to policy holders, creditors, or the public. Section 33-2-1341, MCA. When an order to liquidate an insurer is entered, the Commissioner serves as liquidator, takes possession of the insurer’s assets, and administers the assets under the supervision of the court. Section 33-2-1342, MCA.

Notice of the insurer’s insolvency and liquidation must be given to policy holders and third-party claimants, among others. Section 33-2-1346, MCA. Those persons with claims against the insolvent insurer may file claims with the liquidator who, based upon the assets available, may pay claims according to the statutory priorities provided for in § 33-2-1371, MCA.

Upon issuance of the order appointing a liquidator, existing actions against the insured can no longer be maintained, § 33-2-1348, MCA, and judgments entered after an order of liquidation are not considered evidence of liability or the quantum of damages for which the insolvent insurer is responsible. Section 33-2-1265(4), MCA.

When the liquidator denies a claim, the Act provides for a procedure for proving liability and the value of the claim. Section 33-2-1368, MCA. That procedure was followed in this case and resulted in the order from which the liquidator brings this appeal. The liquidator does not challenge the findings of fact which were entered by the referee and adopted by the District Court. The liquidator appeals from the District Court’s conclusions of law.

The scope of our review of questions of law is to determine whether the District Court’s conclusions were correct. United First Federal v. White-Stevens (1992), 253 Mont. 242, 248, 833 P.2d 170, 174.

The legal issue we have been asked to decide is simply whether Mary Jane Kowalski, as a third-party claimant in the liquidation of Glacier General Assurance Company, was precluded by a consent judgment entered in her favor against Glacier’s insured from claiming damages in this liquidation proceeding in an amount greater than the amount for which the judgment was entered.

In addition to those arguments made to the referee, the liquidator, on appeal, contends that claimant’s claim was barred by equitable estoppel pursuant to our decisions in Plouffe v. BN (1986), 224 Mont. 467, 730 P.2d 1148, and Dagel v. City of Great Falls (1991), 250 Mont. 224, 819 P.2d 186. However, these arguments were not made to the referee who had the initial responsibility for considering factual evidence and resolving this dispute, and we will not review an issue raised for the first time on appeal. Hares v. Nelson (1981), 195 Mont. 463, 466-67, 637 P.2d 19, 21.

Therefore, we turn our attention to the liquidator’s primary argument which was presented to the referee as the basis for the liquidator’s objection to claimant’s claim. The liquidator contends that Glacier General’s obligation to claimant is limited by the terms of its policy with its insured, Dr. Lubin. Pursuant to that policy, Glacier General became obligated to pay claimant only those amounts that “the insured shall become legally obligated to pay as damages during the policy period.” The argument continues that the amount Dr. Lubin was obligated to pay was conclusively established by the consent judgment entered in the Circuit Court for the State of Michigan, and that pursuant to the principles of res judicata, claimant cannot relitigate the amount of her claim by claiming a greater amount in the liquidation proceeding in Montana. Under this theory, the liquidator contends that, in order to arrive at the recommendation that he made, the referee had to conclude that some terms of Glacier General’s policy with its insured were “effectively altered” while others remained in effect, and that for that reason, future claimants, insureds, and liquidators will have no objective basis for evaluating claims made under any given policy.

It is trae that the principles of res judicata normally preclude the relitigation of issues previously litigated between the same parties, or persons in privity with those parties. Baertsch v. County of Lewis and Clark (1986), 223 Mont. 206, 727 P.2d 504. However, the principle of res judicata is a rale of common law which cannot be followed when inconsistent with clear statutory law. Section 1-1-108, MCA, provides that:

In this state there is no common law in any case where the law is declared by statute. But where not so declared, if the same is applicable and of a general nature and not in conflict with the statutes, the common law shall be the law and rule of decision.

Claimant’s claim against Glacier General has been presented pursuant to our statutory procedures for claims against insurers which have been declared insolvent and ordered into liquidation. To determine the effect of any prior judgment entered in her favor against a Glacier General insured, we must first refer to the terms of the liquidation statute, and only secondarily to case law. In this case, the liquidation statute very clearly addresses this issue. Section 33-2-1365(4), MCA, provides that:

No judgment or order against an insured or the insurer entered after the date of filing of a successful petition for liquidation and no judgment or order against an insured or the insurer entered at any time by default or by collusion need be considered as evidence of liability or of quantum of damages. No judgment or order against an insured or the insurer entered within 4 months before the filing of the petition need be considered as evidence of liability or of the quantum of damages.

In this case, the consent judgment on which the liquidator relied was entered after the successful petition for Glacier General’s liquidation.

Had the claimant agreed to a consent judgment of $1 million (Dr. Lubin’s policy limits), rather than $35,000, there can be little doubt that, based upon § 33-2-1365(4), MCA, the liquidator would not have felt compelled to honor her claim in that amount. The liquidator argues that the statute can only be raised by her in defense of claims. Yet, there is nothing in the plain language of that statute nor its legislative history, nor any authority provided to this Court, to suggest that it exists solely for the benefit of the liquidator. It is just as reasonable to conclude that its protection was intended for claimants who settle with impecunious insureds for less than their claim is worth, not knowing whether insolvent insurance companies will end up with sufficient assets with which to satisfy the full amount of their claims.

Therefore, we hold that pursuant to the statutory rules which control claims presented in liquidation, claimant’s prior judgment did not conclusively establish the quantum of claimant’s damages caused by Glacier General’s insured, Dr. Lubin. The only procedure by which claimant could have established the amount that Dr. Lubin was legally obligated to pay her, once her claim was denied by the liquidator, was to present proof of those damages to the referee. This is what she did.

When the District Court ordered that claimant’s claim be accepted in the amount proven to the duly appointed referee, it did not “effectively alter” the terms of Dr. Lubin’s policy with Glacier General. It simply established what Dr. Lubin’s obligation was pursuant to the only procedure provided for under Montana’s Insurers Supervision, Rehabilitation, and Liquidation Act.

We hold that for these reasons claimant’s claim in liquidation was not barred by the previous consent judgment entered in her favor in Michigan, and the District Court is affirmed.

JUSTICES HARRISON, HUNT, McDONOUGH and WEBER concur.

CHIEF JUSTICE TURNAGE

dissenting:

The majority fails to point out that the referee clearly erred in ruling that the doctrine of res judicata does not apply to consent judgments. “A judgment by stipulation is as binding as any judgment or verdict, no more or less.” Schillinger v. Brewer (1985), 215 Mont. 333, 338, 697 P.2d 919, 922.

Further, the peculiar result of this case is that the insurer, Glacier General, is being held liable on a covered claim for a greater amount than is its insured, Dr. Lubin. I invite the Montana Legislature to consider whether that is indeed the correct interpretation of § 33-2-1365(4), MCA, and of the Insurers Supervision, Rehabilitation, and Liquidation Act.

The existence of the insurance policy purchased by Dr. Lubin is the only reason Glacier General has any liability to plaintiff Kowalski. Section 33-2-1342(2), MCA, provides that the rights and liabilities of an insurer become fixed as of the date of liquidation of the insurer. This would seem to indicate that limitations on liability set forth under the terms of the insurance policy are fixed as of the date of liquidation.

Indeed, in affirming the decision of the referee, the majority upholds the referee’s determination that Glacier General shall only be liable for damages incurred during the policy period. That determination honors one limitation under the policy of insurance. However, the majority then refuses to honor the insurance policy limitation providing that the insurer is only liable to pay sums “which the Insured shall become legally obligated to pay.” This refusal is based on the majority’s conclusion that honoring the contract term which incorporates the Michigan judgment against the insured would violate the provision of § 33-2-1365(4), MCA, that “[n]o judgment or order entered within 4 months before the filing of the petition [for liquidation] need be considered as evidence of liability or of the quantum of damages.”

I would limit the scope of § 33-2-1365(4), MCA, to direct consideration of judgments or orders entered within four months of the filing of a petition for liquidation. I would hold that § 33-2-1365(4), MCA, does not prohibit indirect recognition of such judgments or orders where they are relevant under a contract term. This would minimize the statute’s interference with contracts and with the doctrine of res judicata, where, contrary to the position of the majority, such interference is not clearly required under the statute.

I therefore respectfully dissent from the majority opinion.

JUSTICE GRAY joined in the dissent of CHIEF JUSTICE TURNAGE.


author: JUSTICE GRAY JUSTICE NELSON

text:
    LESLIE LEE LOVELL, Petitioner and Appellant, v. STATE COMPENSATION MUTUAL INSURANCE FUND, Defendant, Insurer and Respondent.
    No. 93-036.
    Submitted on Briefs August 12, 1993.
    Rehearing Denied Oct. 21, 1993.
    Decided September 2, 1993.
    50 St.Rep. 1043.
    260 Mont. 279.
    860 P.2d 95.

      For Petitioner and Appellant: Terry Spear, Matovich, Addy & Keller, Billings.
    For Defendant, Insurer and Respondent: Laurence A. Hubbard, State Compensation Mutual Insurance Fund, Helena.
   JUSTICE GRAY

delivered the Opinion of the Court.

Leslie L. Lovell (Lovell) appeals from a judgment of the Workers’ Compensation Court awarding him temporary total disability benefits of $8.26 per week. The State Compensation Mutual Insurance Fund (State Fund) cross-appeals the Workers’ Compensation Court’s imposition of a twenty percent penalty, attorney’s fees and costs. We affirm in part, reverse in part and remand.

We phrase the issues on appeal as follows:

1) Did the Workers’ Compensation Court err in refusing to consider Lovell’s earnings from other sources when determining his weekly wage rate for temporary total disability benefits?

2) Did the Workers’ Compensation Court err in imposing a twenty percent penalty against the State Fund for unreasonably delaying benefits to Lovell?

3) Did the Workers’ Compensation Court err in imposing attorney's fees and costs against the State Fund?

In 1988, Lovell, a twenty-eight-year-old alcoholic, worked as a painter and roofer and provided lawnmowing services in Forsyth, Montana. On or around August 9, 1988, he stopped in at the Oak Room Bar (Oak Room) in Forsyth for a drink after work. Bob Thompson (Thompson), an owner of the Oak Room, asked Lovell to help him unload a roll carpet and some tiles from a truck. Although there was no discussion of wages, the parties have stipulated that Thompson employed Lovell for a two-hour job. The carpet fell on Lovell and he suffered a serious knee injury. The State Fund has stipulated that Lovell is temporarily totally disabled.

Lovell subsequently signed a tax-withholding statement for the Oak Room and filled out a claim for workers’ compensation benefits. Lovell testified that he did not want to sign either document, but Thompson told him that the only available insurance was through workers’ compensation and Lovell would not get his medical bills paid otherwise. At the time of Lovell’s injury, the Oak Room was enrolled under Plan Three of the Workers’ Compensation Act, with the State Fund as its insurer.

On October 27, 1988 the State Fund accepted liability for Lovell’s injury and began weekly disability benefits, retroactive to August 16, 1988, of $6.33 per week, based on Thompson’s assertion that he intended to pay Lovell $4.75 per hour for a two-hour job. On March 1, 1989, his disability benefit rate increased to $8.26 per week after Lovell sent the State Fund his W2 tax-withholding form from the Oak Room indicating he received $6.20 per hour. During this time, Lovell attempted to provide the State Fund with earnings information concerning his painting and lawnmowing jobs; the State Fund maintained that his other wages were irrelevant.

On August 13, 1991, the State Fund reduced Lovell’s disability benefits to zero after receiving a computer printout indicating that Lovell was receiving Social Security benefits. Although Lovell received Social Security benefits due to his alcoholism, the claims examiner from the State Fund assumed the benefits were for his knee injury, and applied the Social Security offset pursuant to § 39-71-701(4), MCA (1987).

Lovell submitted travel expense vouchers to the State Fund for the trips he made to obtain medical treatment and physical therapy for his injured knee. In July, September, October and December of 1991, the State Fund reduced the mileage Lovell claimed by fifty miles each month because of a “technical error” on the part of the claims examiner and, as a result, did not reimburse him for that mileage.

Due to the ongoing dispute over the amount of benefits due, Lovell filed a petition with the Workers’ Compensation Court on April 23, 1992. The State Fund apparently reimbursed Lovell for the withheld travel mileage sometime in September, 1992.

The Workers’ Compensation Court heard the case on September 21, 1992, with the parties stipulating that Lovell was employed by the Oak Room, that he had suffered an industrial injury, and that he was temporarily totally disabled. The Workers’ Compensation Court concluded that the State Fund had correctly computed Lovell’s weekly wage rate for purposes of temporary total disability benefits. The court also imposed the statutory twenty percent penalty against the State Fund for unreasonably terminating Lovell’s benefits due to the Social Security offset in August of 1991 and for improperly denying mileage from his travel claims. On that basis, the Workers’ Compensation Court also awarded Lovell attorney’s fees and costs. This appeal followed.

Did the Workers’ Compensation Court err in refusing to consider Lovell’s earnings from other sources when determining his weekly wage rate for temporary total disability benefits?

Our review of decisions of the Workers’ Compensation Court is two-fold. We will not overturn its findings of fact if there is substantial credible evidence in the record to support them. Grenz v. Fire and Cas. of Connecticut (1991), 250 Mont. 373, 378, 820 P.2d 742, 745. The Workers’ Compensation Court’s conclusions of law will be upheld if the court’s interpretation of the law is correct. Grenz, 820 P.2d at 745. The first issue in this case turns on a question of law.

In computing Lovell’s temporary total disability benefits, the Workers’ Compensation Court determined that $12.40 was Lovell’s correct weekly wage with the Oak Room. The court applied the definition of wages found in § 39-71-123, MCA (1987), the statute in effect at the time of Lovell’s injury. Although Lovell argued that he should be allowed to aggregate his wages from other employments, the court concluded that because § 39-71-123(3)(a), MCA (1987), specifically referred to the claimant’s employment with the “same employer,” the statute precluded consideration of other wages. Relying solely on that phrase, the Workers’ Compensation Court concluded that subsection (3)(a) “seemingly precludes aggregation of wages from other sources when determining an employee’s wages.” We conclude that this interpretation was in error.

Prior to 1987, wages were defined as “the average gross earnings received by the employee at the time of injury for the usual hours of employment in a week....” Section 39-71-116(20), MCA(1985). Under this definition of wages, we allowed aggregation of earnings from separate, concurrent employments in the determination of disability benefits. See Cattyson v. Falls Mobile Home Center (1979), 183 Mont. 284, 599 P.2d 341; Gee v. Cartwheel Restaurant (1982), 197 Mont. 335, 642 P.2d 1070; Harmon v. Harmon (1986), 220 Mont. 445, 716 P.2d 605; Milender v. Carpenter (1987), 230 Mont. 1, 748 P.2d 932. This Court consistently held that:

The general rule is that earnings from concurrent employments may be combined if the employments are sufficiently similar so that a disabling injury at one employment would necessarily disable the employee in respect to the other employment.

Milender, 748 P.2d at 933, quoting Harmon, 716 P.2d at 607. Thus, prior to 1987, it was well-established that if an injury disabled the employee from concurrent employments, aggregation of the wages from the concurrent employments was allowed for purposes of determining disability benefits. We focus our interpretation, therefore, on whether the 1987 legislature effectively modified this existing case law in enacting the new definition of wages found in §39-71-123, MCA (1987).

The rules of statutory construction require the language of a statute to be construed according to its plain meaning. If the language is clear and unambiguous, no further interpretation is required. GBN, Inc. v. Montana Dep’t of Revenue (1991), 249 Mont. 261, 265, 815 P.2d 595, 597. This Court resorts to legislative history only if legislative intent cannot be determined from the plain wording of the statute. State ex rel. Roberts v. Public Service Comm’n (1990), 242 Mont. 242, 246, 790 P.2d 489, 492.

Section 39-71-123, MCA (1987), reads:

Wages defined. (1) ‘Wages” means the gross remuneration paid in money, or in a substitute for money, for services rendered by an employee. Wages include but are not limited to:
(a) commissions, bonuses, and remuneration at the regular hourly rate for overtime work, holidays, vacations, and sickness periods;
(b) board, lodging, rent, or housing if it constitutes a part of the employee’s remuneration and is based on its actual value; and
(c) payments made to an employee on any basis other than time worked, including but not limited to piecework, an incentive plan, or profit sharing arrangement.
(2) Wages do not include:
(a) employee travel expense reimbursements or allowances for meals, lodging, .travel, and subsistence;
(b) special rewards for individual invention or discovery;
(c) tips and other gratuities received by the employee in excess of those documented to the employer for tax purposes;
(d) contributions made by the employer to a group insurance or pension plan; or
(e) vacation or sick leave benefits accrued but not paid.
(3) For compensation benefit purposes, the average actual earnings for the four pay periods immediately preceding the injury are the employee’s wages, except if:
(a) the term of employment for the same employer is less than four pay periods, in which case the employee’s wages are the hourly rate times the number of hours in a week for which the employee was hired to work; or
(b) for good cause show by the claimant, the use of the four pay periods does not accurately reflect the claimant’s employment history with the employer, in which case the insurer may use additional pay periods.

Although this statute clearly is more specific than the pre-1987 definition, the essence of that earlier definition of wages did not materially change with the 1987 amendment. Prior to 1987, wages were “the average gross earnings received by the employee ...,” while the 1987 provision defines wages as “the gross remuneration paid in money ... for services rendered by an employee.” Section 39-71-116(20), MCA (1985); § 39-71-123(1), MCA (1987). The remainder of § 39-71-123(1), MCA (1987), further refines what is included in “wages;” subsection (2) sets forth types of remuneration which do not constitute “wages.” Subsection (3) provides the means by which the amount of wages is computed for purposes of workers’ compensation benefits. Nothing in the plain language of the 1987 amendments creates a material change in the definition of wages which could be construed as a departure from existing law regarding aggregation of wages. When taken in the context of the entire definition, we cannot agree with the Workers’ Compensation Court’s conclusion that the phrase “same employer” contained in subsection (3)(a) demonstrates such a change.

Even if subsection (3) is interpreted in isolation, the plain language neither directly addresses the aggregation of wages from other employments nor directly precludes aggregation. Under the general rule of § 39-71-123(3), MCA (1987), wages are computed for compensation benefit purposes by using the average actual earnings for the four pay periods immediately preceding the injury. If wages cannot be computed under the general rule because the employee has not yet worked four pay periods with the employer, or if the use of the preceding four pay periods does not accurately reflect the employee’s work history, subsections (a) and (b) provide alternative methods for computing wages. Nothing in the plain language of § 39-71-123(3), MCA (1987), suggests that the legislature intended to abolish aggregation of wages from concurrent employments.

Furthermore, this Court should not interpret a statute so as to defeat its purpose; rather, interpretation should achieve the social purpose for which the statute was enacted. Maney v. State (1992), 255 Mont. 270, 274, 842 P.2d 704, 706. An important purpose of the 1987 Workers’ Compensation Act was to provide a wage-loss benefit that bears a reasonable relationship to the actual wages lost as a result of the work-related injury. Section 39-71-105(1), MCA (1987). The aggregation principle in effect via case law at the time of the 1987 amendments comports with the stated purpose. As we stated in Gee, the amount of compensation must bear some reasonable relation to the loss sustained on account of disability. Gee, 642 P.2d at 1071. The Workers’ Compensation Court’s interpretation of § 39-71-123, MCA (1987), defeats this statutorily stated purpose of the 1987 amendments to the Workers’ Compensation Act.

In sum, we cannot conclude that the reference to the “same employer” in § 39-71-123(3)(a), MCA (1987), demonstrates the legislature’s intentional revocation of the well-established principle allowing aggregation of wages from concurrent employments. Nothing in the plain language of § 39-71-123, MCA (1987), suggests that the legislature intended to affect, in any manner, prior case law allowing aggregation of wages from concurrent employments. We conclude that the Workers’ Compensation Court erred as a matter of law in interpreting § 39-71-123(3)(a), MCA (1987), to preclude aggregation of wages from concurrent employments.

Because of its conclusion on the aggregation issue, the Workers’ Compensation Court did not determine whether Lovell was an “employee” under the Workers’ Compensation Act with regard to other work he may have been performing or whether other income constituted wages from concurrent employment. Those issues remain to be determined by the Workers’ Compensation Court on remand.

Did the Workers’ Compensation Court err in imposing a twenty percent penalty against the State Fund for unreasonably delaying benefits to Lovell?

On August 13, 1991, after receiving a computer printout that indicated that Lovell was receiving Social Security benefits, the State Fund applied a statutory offset and reduced Lovell’s disability benefits to zero. In addition, the State Fund erroneously reduced Lovell’s mileage claims for trips he made to obtain medical treatment for his injured knee by fifty miles each month for July, September, October and December of 1991.

The Workers’ Compensation Court found that the State Fund’s decision to terminate Lovell’s disability benefits was unreasonable because the claims examiner had not investigated, in even a cursory fashion, the basis upon which Lovell received Social Security benefits. Investigation would have established that Lovell received Social Security benefits due to his alcoholism. The court also found that the State Fund’s admitted clerical error in denying reimbursement for a portion of Lovell’s claimed medical travel mileage was unreasonable. The Workers’ Compensation Court, therefore, assessed a twenty percent penalty, pursuant to § 39-71-2907, MCA (1987), on the amount of reimbursement due for the withheld mileage and the erroneous Social Security offset.

The State Fund argues that the Workers’ Compensation Court’s conclusion of unreasonableness was not supported by substantial credible evidence. Specifically with regard to the erroneous Social Security offset issue, it contends that it was reasonable for the claims examiner to assume that Lovell’s Social Security benefits were for his work-related industrial injury. The State Fund also contends that, after receiving notice of its intention to apply the Social Security offset, Lovell had a duty to inform the State Fund of the reason he received Social Security benefits.

Whether an insurer’s conduct was unreasonable is a question of fact; a finding of unreasonableness will not be overturned on appeal if supported by substantial evidence. Coles v. Seven Eleven Stores (1985), 217 Mont. 343, 349, 704 P.2d 1048, 1052; Milender, 748 P.2d at 935. The claims examiner testified that she assumed Lovell’s Social Security benefits were for his knee injury and did not investigate the matter before terminating his benefits. The claims examiner also testified that a clerical error resulted in her denial of medical travel reimbursement for fifty miles each month for four months. We conclude that the claims examiner’s testimony provided substantial evidence in support of the Workers’ Compensation Court’s finding of unreasonableness.

Furthermore, we have held that an insurer has a duty to make at least a minimal investigation of a claim’s validity in light of the relevant statutes. Absent such an investigation, denial of a claim for benefits is ‘unreasonable. Gaumer v. Montana Dep’t of Highways (1990), 243 Mont. 414, 421, 795 P.2d 77, 81. The Gaumer rationale is applicable here.

Section 39-71-701(4), MCA (1987) (emphasis added), provided:

(4) In cases where it is determined that periodic disability benefits granted by the Social Security Act are payable because of the injury, the weekly benefits payable under this section [compensation for temporary total disability] are reduced, but not below zero, by an amount equal, as nearly as practical, to one-half the federal periodic benefits for such week ....

The statute allows the State Fund to apply the Social Security offset only when Social Security benefits are payable because of the claimant’s work-related injury. In light of § 39-71-701(4), MCA(1987), the State Fund had a duty to investigate the circumstances surrounding Lovell’s receipt of Social Security benefits prior to reducing his workers’ compensation benefits. This duty to investigate is independent of, and unrelated to, any action by a claimant. In this case, the State Fund’s failure to fulfill its duty to investigate provides a sufficient basis for the Workers’ Compensation Court’s conclusion that the State Fund’s behavior was unreasonable.

The State Fund also claims that its behavior cannot be considered unreasonable because it has paid Lovell for the unreimbursed mileage and apparently has agreed to remove the Social Security offset. We disagree. Payment of unreasonably withheld benefits “on the courthouse steps” does not negate the insurer’s potential liability for a penalty for unreasonable delay of benefits. To conclude otherwise would render the “unreasonable delay” provisions of the penalty statute moot. See Handlos v. Cyprus Indust. Minerals (1990), 243 Mont. 314, 316-17, 794 P.2d 702, 703.

The State Fund additionally argues that the Workers’ Compensation Court had no jurisdiction to award a penalty because the parties had not complied with the dispute resolution and mediation requirements of § 39-71-2401, MCA (1987). This argument is inconsistent with the State Fluid’s position before the Workers’ Compensation Court. The Pretrial Order, signed by the State Fund, includes uncontested fact No. 8, which reads, “[pjursuant to § 39-71-2401, et seq., MCA, dispute resolution requirements were satisfied regarding this dispute.” The State Fund also included this statement as an uncontested fact in its proposed findings of fact and conclusions of law.

Similarly, the State Fund argues that the Workers’ Compensation Court lacked jurisdiction to award a penalty based on the Social Security offset because Lovell had not included that precise issue in his petition. Lovell’s petition requested a penalty pursuant to § 39-71-2907, MCA (1987), alleging that the State Fund had acted unreasonably. Issue No. 2 in the Pretrial Order reads:

Whether the Defendant has unreasonably delayed or denied payment of Petitioner’s benefits, thereby incurring an [sic] twenty percent [sic] pursuant to § 39-71-2907 MCA.

We conclude that the penalty issue was properly before the Workers’ Compensation Court.

Because the Workers’ Compensation Court’s finding of unreasonableness is based on substantial credible evidence, we hold that the court did not err in imposing a twenty percent penalty on the State Fund pursuant to § 39-71-2907, MCA (1987).

Did the Workers’ Compensation Court err in imposing attorney’s fees and costs against the State Fund?

The Workers’ Compensation Court concluded that Lovell was entitled to an award of attorney’s fees and costs for the State Fund’s actions regarding the Social Security offset and travel reimbursement. An award of attorney’s fees is governed by § 39-71-611, MCA (1987), which provides:

(1) The insurer shall pay reasonable costs and attorney fees as established by the workers’ compensation court if:
(a) the insurer denies liability for a claim for compensation or terminates compensation benefits;
(b) the claim is later adjudged compensable by the workers’ compensation court; and
(c) in the case of attorneys’ fees, the workers’ compensation court determines that the insurer’s actions in denying liability or terminating benefits were unreasonable.

The Workers’ Compensation Court did not analyze the question of attorney’s fees under § 39-71-611(l)(b), MCA, and applicable case law. See Yearout v. Rainbow Painting (1986), 222 Mont. 65, 719 P.2d 1258; Milender, 748 P.2d at 935.

The record before us is unclear as to whether the State Fund has reimbursed Lovell for the erroneous Social Security offset or, if the parties had settled the matter, when the settlement was reached. Because we are remanding this case for further proceedings as a result of our holding on the aggregation issue, we direct the Workers’ Compensation Court to readdress the issue of attorney’s fees relating to the Social Security offset and mileage reimbursement issues.

Affirmed in part, reversed in part and remanded for further proceedings consistent with this opinion.

JUSTICES HARRISON, TRIEWEILER, HUNT and WEBER concur.

JUSTICE NELSON

specially concurs:

While I concur in the Court’s opinion, I do so in utter dismay of the fact that this case is even before us. The claimant, here, was never eligible for worker’s compensation benefits in the first place. Mr. Lovell stopped by the Oak Room Bar to have a beer and was asked by one of the owners to help unload some carpet and tiles from a truck. Mr. Lovell was not the bar’s employee; there was never any discussion of wages; the claimant was never even paid for the work he did at the bar on the date of his injury.

While helping to unload the truck, the claimant seriously injured his knee when a carpet roll fell on him. To his credit, at least, Mr. Lovell did not want to make a worker’s compensation claim. Why should he? He was not the bar’s employee; he was not entitled to benefits. But, since the owners of the bar apparently did not carry public liability insurance, they convinced Mr. Lovell that the only way he was going to get his medical expenses paid was to make a claim against their worker’s compensation coverage.

The claim was a hoax. The State Fund was simply being used — abused, actually — so the bar owners would not have to pay for Mr. Lovell’s injuries out of their own pockets because they failed to have the foresight and good business sense to carry public liability insurance.

This travesty was then compounded when the State Fund accepted liability and began paying benefits of less than $10.00 a week on the dummied-up claim. Mr. Lovell, again, to his credit, attempted to undo the claim by numerous phone calls to the State Fund explaining the circumstances of his injury and by filing suit against the bar for his damages in a separate civil action.

The State Fund would have none of that, however, and continued to accept liability for the claimant’s injury and to pay benefits, with the result that Mr. Lovell’s civil case against the bar was dismissed because of the exclusivity provision of the Worker’s Compensation Act. That provision prohibits an employee from suing his “employer” for injuries arising out of an “industrial accident”. Unfortunately, however, this comedy of errors did not end there.

His only other civil remedy having been precluded and having been determined by the State Fund to be “entitled” to benefits, the next logical progression in the chain of events was a dispute over the amount of the benefits being paid. Mr. Lovell claimed that he was entitled to combine wages from other odd jobs he had performed with the “wages” from his “employment” at the bar in order to establish the wage base on which his benefits were determined. At least prior to 1987 and after 1989 that was permissible under the law. The State Fund disagreed with that approach, however, on the basis of the 1987 statute applicable to Mr. Lovell’s claim. The Fund claimed that Mr. Lovell’s only “employment” was at the bar and that his other wages were irrelevant.

That disagreement, naturally, necessitated a mediation hearing and, ultimately, a full-blown trial (with all the attendant discovery that goes with a trial) before the Worker’s Compensation Court.

To be fair, there likely would not have been a disagreement over the proper interpretation of the statute, but for the fact that every session the Legislature seemingly feels obliged to rewrite all or substantial portions of the worker’s compensation laws in its biennial attempt to stave off what appears to be the imminent collapse of the entire system. Rewriting an existing law or enacting a new law is, at best, risky business, because it often takes several years and a lawsuit or two for some court to interpret the law. Here, we are interpreting a law, long since changed, that was enacted six years ago. In any event, for reasons probably no one will ever know, in 1987, the Legislature changed one portion of the statute at issue. (True to form, in 1989, the law was changed again).

Unfortunately, when the Legislature amended the law in 1987, the language used was not as precise as it might have been. Hence, the disagreement between the claimant and his attorneys and the State Fund and its attorneys over what the statute really said and meant.

The Worker’s Compensation Judge took his best shot at trying to interpret the statute. In the process, he also determined that the State Fund had underpaid Mr. Lovell by wrongfully reducing his mileage claims and offsetting his social security benefits against his worker’s compensation benefit payments. That resulted in the State Fund having to repay the underpayments along with a 20% penalty and, possibly, Mr. Lovell’s attorney’s fees.

Now, the whole case is before the Supreme Court. This Court has spent considerable time applying appropriate legal interpretations to the facts and law at issue in a case that only got here by its own bootstraps. Having accomplished our task, we are now sending the case back to the Worker’s Compensation Court for still further proceedings. I assume that whatever decision is made on those issues will generate yet another appeal.

I suspect that the average person could put their child through college on what this case has already cost the State in attorneys’ fees, penalties, expenses, medical costs, travel costs, benefits and the wasted time and salaries of bureaucrats, investigators, claims examiners, hearings examiners and judges. To make matters worse, the final chapter in this case has yet to be written.

The tragedy of this — compounded in one form or another in other cases — is that employers, taxpayers and, now, employees, alike, are paying their hard-earned premium, tax and wage dollars for this nonsense. It is small wonder that the State Fund is in perpetual financial extremis, if this case is anything but an anomaly — which I can only hope is true.

I concur in the Court’s opinion because, on the narrow legal issues presented, the opinion is a correct interpretation of the law — long since changed — and because we are without authority to do anything but resolve the legal issue presented. It is, appalling, nonetheless, that this case ever got this far.

CHIEF JUSTICE TURNAGE and JUSTICE TRIEWEILER concur in the foregoing special concurrence.


author: JUSTICE HUNT

text:
    AUGUSTA GEIGER, Plaintiff and Appellant, v. THE DEPARTMENT OF REVENUE OF THE STATE OF MONTANA, Defendant and Respondent.
    No. 92-570.
    Submitted on Briefs April 15, 1993.
    Decided September 8, 1993.
    50 St.Rep. 1050.
    260 Mont. 294.
    858 P.2d 1250.

      See also 249 Mont. 540, 815 P.2d 1160.

      For Plaintiff and Appellant: John Houtz, Forsyth.
    For Defendant and Respondent: W. Anderson Forsythe and Martha Sheehy, Moulton, Bellingham, Longo, & Mather, Billings.
   JUSTICE HUNT

delivered the Opinion of the Court.

Appellant Augusta Geiger appeals from an order of the Montana Seventh Judicial District Court, Dawson County, granting the Department of Revenue’s motion for directed verdict following Geiger’s presentation of her case in chief to the jury. In its order, the Court ruled that the DOR could not be found liable for negligent business decisions.

We affirm the District Court’s conclusion, but do so on different grounds.

We determine the dispositive issue to be as follows:

What duty did the DOR owe plaintiff in operating the Assessor’s Office in Dawson County, Montana?

Augusta Geiger began working in the Dawson County Assessor’s Office in 1955, and was elected Dawson County Assessor in 1978. She was reelected to the position in 1982 after running against Terry Cantwell, an employee in the Assessor’s Office. On February 24, 1984, Geiger resigned from her elected position.

This case arises out of three incidents which occurred during Geiger’s second term as Dawson County Assessor and which she alleges caused her to resign. The first incident occurred after the second election. Geiger’s and Cantwell’s working relationship deteriorated to such a degree that Geiger only communicated to Cantwell by written correspondence, although they worked in the same office. Geiger believed that Cantwell’s work performance was poor and requested Jesse Munro (Bureau Chief and Geiger’s immediate supervisor at DOR) to speak with Cantwell. Munro responded by letter stating that given Geiger’s failure to follow the proper methods for disciplining and dismissal, it would not be appropriate to discipline or fire Cantwell. Cantwell quit her job in January 1983.

The second incident occurred when the Dawson County Assessor’s Office became computerized in the early part of 1983. Because of problems stemming from computerization and a cutback in employees, the office began to fall behind in its work. Geiger requested additional help from Munro in order for the office to meet its deadlines. Munro denied the request. Geiger then called the Director of the DOR. As a result of that telephone call for more help, the DOR temporarily assigned the Cascade County Assessor to the Dawson County office. During the two-month period the Cascade County Assessor worked in the Dawson County office, the DOR suspended Geiger’s authority to hire and fire state employees and transferred it to the Cascade County Assessor. After the Cascade County Assessor completed the required work, he left and the DOR restored Geiger’s authority, with the exception that she could not hire and fire state employees. Geiger testified that the Cascade County Assessor’s presence in the office was part of the problem resulting in her resignation.

The third incident was the DOR’s audit of the Dawson County office. The audit occurred in September 1983. The report identified several problems with the Dawson County office, including violations of state law, administrative rules, and DOR policy. The audit report consisted of 118 pages which pointed to problems in the office and suggested various solutions to correct personnel problems and meet assessment deadlines as required by law. Because of these incidents, Geiger resigned her elected office.

On September 4,1984, Geiger filed a complaint in Dawson County District Court against the DOR. The District Court dismissed the Dawson County Commissioners from this action on July 7,1988. The dismissal occurred because of the Dawson County Commissioners’ successful appeal in Cantwell v. Geiger (1987), 228 Mont. 330, 742 P.2d 468. On September 27, 1990, the District Court granted the DOR’s motion to dismiss, based upon the pleadings. On August 27, 1991, in an unpublished opinion, this Court reversed and remanded the District Court’s order.

On April 27, 1992, the District Court granted the DOR partial summary judgment by dismissing Geiger’s claim for constructive discharge. The District Court allowed Geiger’s claim to proceed because she alleged the DOR was negligent in its management of the Dawson County Assessor’s Office.

Jury trial was held on June 24 and 25,1992. The court granted the DOR’s motion for a directed verdict following the presentation of Geiger’s case-in-chief. Geiger appeals.

What duty did the DOR owe plaintiff in operating the Assessor’s Office in Dawson County, Montana?

Generally, the State is subject to suit and is liable for its torts. Mont. Const, art. II, § 18 (1972); § 2-9-102, MCA. Afundamental tenet in the law of torts is that “ ‘there can be no negligence if no duty exits.’” Quirin v. Weinberg (1992), 252 Mont. 386, 391, 830 P.2d 537, 539 (quoting Ambrogini v. Todd (1982), 197 Mont. 111, 118, 642 P.2d 1013, 1017). The tort of negligence arises when a person has a legally recognized duty, the person breaches that duty, the breach of the duty acts as a legal cause of another’s injury, and the injury results in actual loss or damage. Thornock v. State (1987), 229 Mont. 67, 72, 745 P.2d 324, 327. We have stated that “[wjhether or not a duty exists is a question of law. When reviewing questions of law, we will determine if the trial court’s determination as to the law is correct. Our review will be plenary.” Quirin, 830 P.2d at 540.

We affirm the decision of the District Court but on different grounds — namely that Geiger failed to establish a prima facie case for negligence because she failed to establish that the DOR owed her a duty. Where the conclusion of the district court is correct, it is immaterial, for the purpose of affirmance on appeal, what reasons the district court gives for its conclusion. Bolz v. Myers (1982), 200 Mont. 286, 295-96, 651 P.2d 606, 611.

Geiger alleges that the DOR was negligent in failing to provide personnel when requested, that it improperly supervised its employee Cantwell, that the DOR improperly investigated complaints made by Cantwell, and that the DOR acted unlawfully by suspending Geiger’s authority to hire and fire State employees.

The role of the DOR in supervising county assessor offices in Montana is unique. Although the relationship between the DOR and the county assessors closely resembles an employment relationship because of the supervisory nature of the DOR mandated by statute, the relationship does not rise to the level of an employer and employee.

Prior to 1973, county assessors assessed property according to their local appraisal system. To equalize property assessments statewide, the legislature amended § 15-8-102, MCA, to make county assessors agents of the DOR. Cantwell, 742 P.2d at 470. The county assessor is an agent of the DOR for the purpose of locating and providing the DOR with a description of all taxable property within the county. Section 15-8-102(1), MCA. The Legislature gave the DOR full charge of assessing all property subject to taxation in equalizing values. The DOR is required to secure the necessary personnel to perform its duties. Section 15-8-101, MCA. Statutes mandate that the DOR supervise the assessment function to insure that it is properly carried out. Section 15-l-201(l)(a), MCA. The DOR is required to provide education and certification of county assessors. Sections 15-8-103, -105, and -106, MCA (1989).

The changes made in 1973 removed the county commissioners’ authority to supervise the internal operations of the assessor’s office and placed it with the DOR. Cantwell, 742 P.2d at 470. Even so, the county assessor remained an elected or appointed position and served at the will of the electorate or appointing power. Section 7-4-2203, MCA. County assessors and their deputies are paid by the county. Sections 7-4-2503 and -2505, MCA. The employees of the assessor’s office are state employees who are hired by the DOR. The DOR has the power and responsibility for the hiring, firing, and assignment of duties of employees in a county assessor’s office, except for the county assessors and their deputies. Section 15-8-101, MCA. Therefore, Geiger was not an employee of the DOR but was an elected official “employed” by her constituents. As an elected official, Geiger could only be removed if the electorate chose to recall her or if she was convicted of official misconduct. Sections 21-16-603 and 45-7-401, MCA.

All the testimony and evidence offered by Geiger related to actions which the DOR had statutory authority to perform and did not violate any duty owed to Geiger. For example, the DOR had established a formula in allocating personnel to the various counties. Geiger testified that other county assessor offices were going through personnel reductions in 1981. Geiger admitted that other counties situated similarly could work with three employees and that the DOR’s allocation was fair.

The DOR’s refusal to fire Cantwell does not establish a violation of the DOR’s supervisory obligation. Munro sent a letter to Geiger addressing Cantwell’s situation which stated that Geiger failed to take the proper measures required for discipline and dismissal. During trial, Geiger admitted that she agreed with the DOR’s handling of Cantwell’s employment situation.

When Geiger’s office failed to meet the deadlines for tax assessments, the DOR acted within its authority to suspend Geiger’s authority to hire and fire employees. The DOR also acted within its authority to audit Geiger’s office when it appeared that the office was having constant trouble meeting its statutory obligations. The DOR’s evaluation and criticism of the Dawson County Assessor’s office was not a breach of a statutory duty but was the performance of a statutory obligation.

The DOR removed only that authority it had delegated to Geiger, and not any statutory authority that was inherent in the elected position. Geiger resigned from her position voluntarily and was not removed by the DOR. The DOR did not violate any statutory or general duty owed to Geiger. Therefore, we hold that the District Court did not err in granting the directed verdict in favor of the DOR.

We affirm the decision of the District Court based on Geiger’s failure to establish a prima facie case for negligence on the part of the DOR.

CHIEF JUSTICE TURNAGE, JUSTICES HARRISON, GRAY and WEBER concur.


text:
    ALTON EUGENE WALKER, Petitioner, v. JACK McCORMICK, Warden, Montana State Prison, Respondent.
    No. 93-276.
    Dated August 31, 1993.
    50 St.Rep. 1053.
    260 Mont. 301.
    858 P.2d 373.
   ORDER

Petitioner Alton Eugene Walker (Walker), pro se, has petitioned this Court for a writ of habeas corpus. Walker alleges that he was improperly extradited to Ohio to stand trial on a charge of aggravated murder and requests that this Court overturn the Ohio conviction or, alternatively, dismiss the detainer against him.

On June 13, 1989, Walker was sentenced to thirty years in the Montana State Prison for felony assault and aggravated assault. Walker was transported to the Montana State Prison on July 26, 1989. Walker was then extradited to Ohio on September 15, 1989 where, on January 2,1990, he was tried and convicted of aggravated murder. On January 8,1990, Walker was sentenced to life imprisonment on the aggravated murder conviction. Ohio placed a detainer on Walker, and he was then returned to Montana to serve his assault sentences. Walker has previously petitioned the district court for post-conviction relief and the district court’s denial is currently on appeal before this Court. Walker v. State, Cause No. 93-200 (post-conviction proceedings).

Walker’s extradition claims were addressed and dismissed by the district court in the post-conviction proceedings, and Walker has not challenged the district court’s dismissal of those claims. If the petitioner has had the opportunity to file a post-conviction procedure, the doctrine of res judicata applies to post-conviction proceedings to bar the rehearing of claims previously considered and denied. Coleman v. State (1981), 194 Mont. 428, 438, 633 P.2d 624, 631. Here, Walker challenged his extradition to Ohio in the post-conviction proceeding. His request for relief on the extradition issue was denied, and he did not challenge that issue on his appeal pending before this Court. Therefore, Walker is barred by the doctrine of res judicata from raising that issue in his application for a writ of habeas corpus.

Walker also alleges that Ohio failed to comply with the speedy trial provisions of the Interstate Agreement on Detainers (IAD), found at §§ 46-31-101, et seq., MCA. For that reason, Walker requests that this Court overturn the Ohio conviction or, alternatively, dismiss the detainer against him.

This Court has no jurisdiction under the IAD to overturn the Ohio conviction. Only the court of the jurisdiction where the indictment was filed has the authority to dismiss the indictment upon which a detainer is based. See: Blakey v. District Court (1988), 232 Mont. 178, 755 P.2d 1380. In addition, all the extradition issues raised by Walker are moot, because he has already been transported to Ohio and tried there. After Walker was placed in the custody of Ohio, the legality of that extradition cannot be challenged. State v. Kingery (1989), 239 Mont. 160, 163, 779 P.2d 495, 497.

Walker has requested alternative relief in the form of a dismissal of the Ohio detainer, for Ohio’s alleged failure to comply with the speedy trial requirement of the IAD. Under Article III of the IAD, Ohio must bring Walker to trial within 180 days after Walker invoked his right to a speedy trial. Section 46-31-101, Art. 111(1), MCA. Walker contends that he requested final disposition (speedy trial) on June 5, 1989, and that his trial on January 2, 1990, was 211 days after that date. However, Walker has misinterpreted the speedy trial requirement of the IAD.

Article III of the IAD states that “[w]henever a person has entered upon a term of imprisonment in a penal or correctional institution . . he shall be brought to trial within 180 days after he [requests a final disposition].” Section 46-31-101, Art. 111(1), MCA. Here, the 180 day time period did not begin to run until Walker “entered upon a term of imprisonment” in the Montana State Prison. Walker’s prison term began on July 26, 1993. His trial on January 2, 1990, was well within the 180 day time period required under the IAD.

For the foregoing reasons, Walker’s petition for a writ of habeas corpus should be and is hereby DENIED.

IT IS HEREBY FURTHER ORDERED that the Clerk of this Court serve counsel for the Respondent and Walker, pro se, by mail with a copy of this Order.

Dated this 31st day of August, 1993.

JOHN CONWAY HARRISON, Justice

KARLA M. GRAY, Justice

WILLIAM E. HUNT, SR., Justice

TERRY TRIEWEILER, Justice

JAMES NELSON, Justice

FRED J. WEBER, Justice


text:
    LARRY T. MOORE, Petitioner, v. JACK McCORMICK, Warden of the Montana State Prison, Respondent.
    No. 93-395.
    Dated September 9, 1993.
    50 St.Rep. 1054.
    260 Mont. 305.
    858 P.2d 1254.
   OPINION AND ORDER

Larry T. Moore, Petitioner herein, has filed his application requesting that this Court issue a writ of habeas corpus. Petitioner is presently incarcerated at the Montana State Prison as a result of his conviction of the offense of deliberate homicide, a felony, in violation of § 45-5-102(l)(a), MCA, following a jury trial in Gallatin County on October 22, 1992 to November 23, 1992, and the subsequent revocation of his bond. Petitioner claims that he is unlawfully held because he has been denied bail pending appeal by the District Court and that such denial is erroneous as a matter of law. He asks this Court to review the question of bail independently, pursuant to § 46-22-103, MCA, which provides:

Writ for purpose of bail. When a person is imprisoned or detained in custody on any criminal charge for want of bail, such person is entitled to a writ of habeas corpus for the purpose of giving bail upon averring that fact in his petition, without alleging that he is illegally confined.

The appropriate standard of review when considering the denial of an application for bail pending appeal is whether the district court abused its discretion in denying the application. Absent such abuse, this Court will not interfere. State ex rel. Bretz v. Sheriff of Lewis & Clark County (1975), 167 Mont. 363, 365, 539 P.2d 1191, 1192.

Petitioner argues that since he was released on bail prior to his conviction and since he was designated as a non-dangerous offender for purposes of eligibility for parole at sentencing, he is entitled to bail pending appeal by reason of §§ 46-9-107 and 46-20-204, MCA.

Section 46-9-107, MCA, provides:

Release or detention pending appeal — revocation — sentencing hearing. A person intending to appeal from a judgment imposing a fine only or from any judgment rendered by a justice’s court or city court must be admitted to bail. The court shall order the detention of a defendant found guilty of an offense who is awaiting imposition or execution of sentence or a revocation hearing or who has filed an appeal unless the court finds that, if released, the defendant is not likely to flee or pose a danger to the safety of any person or the community. (Emphasis added).

Under this statute, since the Petitioner was found guilty of the felony offense of deliberate homicide in district court, and since he has filed an appeal, the court is required to order the detention of the Petitioner "... unless [it] finds that, if released, the defendant is not likely to flee ...”.

Here, the District Court made precisely the opposite finding. The Court ruled that:

[T]here is simply too much risk involved [in granting bail].... I feel that under the evidence and testimony presented, [at the bail hearing] the Court simply cannot take the chance of flight that is always present when a capital crime has been committed and there has been a conviction. We cannot allow this Defendant out in the community regardless of what his friends and family say.

We find no abuse of discretion in the Court’s ruling. Upon conviction, Petitioner was no longer cloaked with the presumption of innocence, having been found guilty beyond a reasonable doubt of a capital crime. There was evidence presented at the sentencing hearing to the effect that Petitioner had no ongoing business, that his financial assets were negligible and that he was divorced after he was originally admitted to bail. The District Court was entitled to weigh all of those factors is assessing Petitioner’s propensity for flight. Accordingly, under the statute cited by the Petitioner, he is not entitled to bail pending appeal.

The Petitioner goes on to argue, however, that Section 46-20-204(2), MCA, "... mandate[s] a stay of sentence pending appeal for a defendant who has been admitted to bail during the pendency of the case.” We disagree.

That section of the Montana Code of Criminal Procedure provides: Stay of execution and relief pending appeal. ... (2) If an appeal is taken and the defendant is admitted to bail, a sentence of imprisonment shall be stayed by the trial court. (Emphasis added).

Petitioner argues that the statute is ambiguous and, under the rule of lenity, should be interpreted in his favor because it is not clear what the legislature intended by the words “defendant is admitted to bail.” In other words, does that phrase refer to bail before or after sentencing?

We conclude that the statute is not ambiguous. The plain intendment of the language used is that if, in its discretion under § 46-9-107, MCA, and on making the required finding, the trial court admits the defendant to bail pending appeal, then the court must stay his sentence of imprisonment.

Since, as set forth above, the District Court did not admit Petitioner to bail pending appeal, there is, obviously, no “mandate” under § 46-20-204(2), MCA, that it stay his sentence of imprisonment. Petitioner’s argument fails.

Finally, Petitioner argues that since the District Court, at sentencing, designated him a nondangerous offender for purposes of parole eligibility, he is entitled to bail pending appeal. Again, we are not persuaded by Petitioner’s argument.

Section 46-18-404, MCA provides in pertinent part:

Designation as nondangerous offender for purposes of parole eligibility. (1) Except as provided in subsection (4), the sentencing court, shall designate an offender a nondangerous offender for purposes of eligibility for parole under part 2 of chapter 23 if: ... (b) the court has determined, based on any presentence report and the evidence presented at trial and the sentencing hearing, that the offender does not represent a substantial danger to other persons or society. (Emphasis added).

Implicit in the Petitioner’s argument is the proposition that the criteria for admitting a defendant to bail pending appeal and for designating him a nondangerous offender are the same. That is not the case, however.

In determining whether to admit a defendant to bail pending appeal, the trial court is required to find that"... the defendant is not likely to flee or pose a danger to the safety of any person or the community.” As pointed out above, the District Court, here, declined to make such finding, ruling that there was a risk of flight.

On the other hand, § 46-18-404(l)(b), MCA, requires the trial court to determine that “... the offender does not represent a substantial danger to other persons or society” after considering the presentence report and the evidence at trial and the sentencing hearing. This statute does not carry a requirement that the risk of flight be considered, but it does impose a more onerous requirement that the court find that the offender not represent a “substantial danger” as opposed to a “danger” to society.

Accordingly, while it may be appropriate for the trial court to designate a defendant nondangerous for parole eligibility purposes under the requirements of § 46-18-404(l)(b), MCA, it does not follow that, under the different criteria of § 46-9-107, MCA, the court is also required to admit the defendant to bail pending appeal.

For purposes of the instant Application for Writ of Habeas Corpus, we hold that the District Court correctly interpreted and applied the appropriate statutes; that there was substantial evidence to support the Court’s decision; that the Court did not abuse its discretion in denying the Petitioner’s motion for bail pending appeal; and that the Petitioner is not illegally imprisoned or otherwise unlawfully restrained of his liberty.

IT IS HEREBY ORDERED, that Petitioner’s Application for Writ of Habeas Corpus should be and the same is, hereby, DENIED.

Dated this 9th day of September, 1993.

J. A. TURNAGE, Chief Justice

JOHN CONWAY HARRISON, Justice

WILLIAM E. HUNT, SR., Justice TERRY N. TRIEWEILER, Justice

JAMES C. NELSON, Justice

FRED J. WEBER, Justice