text:
    JAMES HAUGEN, Plaintiff and Respondent, v. RICHARD W. NELSON and Joan A. Nelson, husband and wife, Defendants and Appellants.
    No. 89-124.
    Submitted on Briefs Aug. 24, 1989.
    Decided Nov. 21, 1989.
    782 P.2d 901.
    Phillip N. Carter, Koch & Carter, Sidney, for defendants and appellants.
    Peter O. Maltese, Sidney, for plaintiff and respondent.
   JUSTICE SHEEHY

delivered the Opinion of the Court.

On July 28,1988, the defendants filed a motion for attorney fees in the District Court, Seventh Judicial District, Richland County. The District Court denied defendants’ motion for attorney fees. The defendants appealed the District Court order. We affirm.

The sole issue on appeal is:

Did the District Court err in refusing to award to defendants their reasonable attorney fees incurred in defending the plaintiff’s claim made against them.

The plaintiff, James Haugen (Haugen), initiated this suit in District Court to obtain a money judgment based on a promissory note against the defendants Richard W. and Joan A. Nelson (the Nelsons). Defendants in their answer claimed a set-off against Haugen and asserted a counterclaim contending they were entitled to reimbursement for certain partnership debts and expenses.

Both parties asserted claims for attorney fees in their pleadings. The parties’ claims for attorney fees were based on the following paragraph in the promissory note:

“. . . In case suit or action is instituted to collect this note, or any portion thereof, we promise to pay such additional sums that the court may adjudge reasonable as attorney fees in suit or action.”

On May 19, 1988, the trial was commenced in District Court. Following the trial, the Nelsons’ attorney made his motion for dismissal of Haugen’s case under Rule 41(b), M.R.Civ.P. On June 1, 1988, the District Court entered its findings of fact, conclusions of law and order in this action. The order dismissed Haugen’s complaint and the counterclaim of the Nelsons. The District Court made no mention of the Nelsons claim for attorney fees incurred in connection with Haugen’s claim.

The Clerk of the District Court mailed notice of entry of judgment to counsel for both parties on June 2, 1988. Subsequently, Haugen submitted a motion for a new trial or amendment of the order. The District Court denied this motion on July 6, 1988. Before the denial, however, the Nelsons’ attorney, on June 14, 1988, mailed his notice of entry of judgment, with attached copy of the District Court’s June 1, 1988 order to Haugen’s attorney.

On July 28, 1988, nearly six weeks after mailing notice of entry of judgment, the Nelsons filed their motion for attorney fees. On August 4, 1988, before the motion for attorney fees could be heard, Haugen filed his notice of appeal. Haugen failed to follow through on his appeal, and on December 12, 1988, Haugen filed his own motion to dismiss his notice of appeal.

Finally, on January 3, 1989, the District Court heard the Nelsons’ motion for attorney fees. The District Court denied the Nelsons’ motions stating the following reason:

“The defendants’ motion for attorneys fees, filed on July 28, 1988 is denied for the reasons that it was not filed within 10 days after service of the notice of entry of judgment which was June 14, 1988. This was required by rule 59(g), M.R.Civ.P.
“Further, the Court had every intention of dismissing ALL CLAIMS OF ALL PARTIES in its order of June 1, 1988; this in the interest of justice.”

Did the District Court err in refusing to award to defendants their reasonable attorney fees incurred in defending against the plaintiffs claim made against them?

The general rule regarding the award of attorney fees provides that attorney fees are awardable only where a statute or contract provides for the recovery, Northwestern Nat. Bank v. Weaver-Maxwell (1986), 224 Mont. 33, 44, 729 P.2d 1258, 1264; Sliters v. Lee (1982), 197 Mont. 182, 183-184, 641 P.2d 475, 476. The parties’ promissory note agreement provided for reasonable attorney fees in actions for its enforcement. Section 28-3-704, MCA, makes the right to attorney fees reciprocal.

The defendants argue, § 28-3-704, MCA, and this Court’s holdings in Northwestern Nat. Bank and Sliters dictate that the District Court award them attorney fees as the prevailing party.

However, the District Court denied the defendants’ attorney fees for the reason that the defendants failed to comply with Rule 59(g), M.R.Civ.P., as follows:

“A motion to alter or amend the judgment shall be served no later than 10 days after the service of notice of entry of the judgment and may be combined with a motion for a new trial herein provided
Rule 54(a), M.R.Civ.P. defines judgment as “the final determination of the rights of the parties in an action or proceeding and as used in these rules includes a decree and any order from which an appeal lies . . .”

In its order dated June 1, 1989, the District Court dismissed Haugen’s complaint and the Nelsons counterclaim. The District Court did not award attorney fees to either party. The Nelsons argue that the District Court’s order of June 1, 1989 is interlocutory because it does not expressly award or deny attorney fees. We find no merit with this assertion. Under Rule 54(a), M.R.Civ.P., the court’s order was a final determination of the rights of the parties, and thus a judgment. Even the Nelsons themselves deemed the District Court’s order a final judgment by virtue of the fact that their attorney filed notice of entry of judgment on June 14, 1988 with the District Court. The word “judgment” is blazed across the caption of the instrument filed by the Nelsons.

The Nelsons’ efforts for relief from judgment came in the form of a motion for attorney fees which they filed 45 days after service of notice of entry of judgment. This Court in In re Marriage of McDonald (1979), 183 Mont. 312, 599 P.2d 356, 358, held Rule 59(g), M.R.Civ.P. applies to motions for attorney fees. In denying the petitioners’ request for attorney fees, this Court in McDonald stated the following:

“Rule 59(g), Mont.R.Civ.P. provides: ‘A motion to .alter or amend the judgment shall be served no later than 10 days after the service of the notice of the entry of judgment. . .’ This ruíe applies to petitions for costs and attorney fees filed after entry of judgment. (Citations omitted.) Proper application of the rules clearly prohibit granting of the request for relief to the mother in this case.
“Notice of entry of the District Court order required both parties to bear their own costs and attorney fees which was served on the father on December 30, 1977. Having failed to file the petition for costs and attorney fees within ten days of service, the District Court was without jurisdiction to give the mother the requested relief.”

Since the Nelsons failed to file the motion 10 days after the service of the notice of the entry of judgment, their motion was untimely and the District Court was without jurisdiction to grant attorney fees.

Next, the Nelsons argue that they have been deprived of due process. The Nelsons contend that they were given no opportunity to present evidence as to attorney fees at the time of the hearing. The Nelsons and their attorney had ample opportunity to present evidence at the hearing regarding attorney fees. The Nelsons were given the opportunity to testify to attorney fees, but chose not to partake in the trial which led to the June 1, 1988 order of the District Court. The Nelsons failed to attend the trial. We find no deprivation of defendants’ due process in this case.

Furthermore, after reviewing the record, we find attorney fees are not appropriate due to the excessive dilatory tactics of both parties. Haugen’s attorney filed his complaint on June 8, 1982, and served defendant on July 27, 1982. Then Haugen’s attorney simply slept on his claim. Finally, after receiving two notices from the Clerk of the District Court, Haugen, on January 9, 1987, filed a motion for scheduling. The District Court set the trial for October 20, 1987, but the trial was further delayed by Haugen’s attorney’s repeated continuances until May 19, 1988. Justice should be administered economically, efficiently, and expeditiously. Baruch v. Giblin (Fla. 1935), 164 So. 831, 833. A seven year delay, due solely to attorneys, is a far cry from the proper administration of justice.

The Nelsons also played a role in prolonging the administration of justice in this case. The Nelsons, like Haugen, failed to pursue any action in this case until 1987. When the case finally came to trial on May 19, 1988, the Nelsons failed to attend the trial or offer any testimony on their behalf. The record here is one of both attorneys bickering among themselves at every level of this action. The evidence in the record supports the District Court’s denial of any motion for attorney fees.

The Nelsons’ motion for attorney fees constituted a motion to amend a judgment. The defendants failed to file a timely motion under Rule 59(g), M.R.Civ.P. and therefore the District Court properly denied their motion for attorney fees. Furthermore, we find attorney fees are not appropriate in view of the excessive dilatory tactics by both parties. We affirm the District Court’s holding.

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


source: Caselaw Access Project

author: JUSTICE SHEEHY

license: Public Domain

text:
    FIRST MONTANA TITLE COMPANY OF BILLINGS, a corporation, Plaintiff and Respondent, v. NORTH POINT SQUARE ASSOCIATION, a Utah Limited partnership, American Guaranty Life Insurance Company, an Oregon corporation; et al., Defendants and Appellants.
    No. 89-204.
    Submitted Sept. 13, 1989.
    Decided Nov. 21, 1989.
    782 P.2d 376.
    Joe Gerbase argued, Anderson, Brown, Gerbase, Cebull, Fulton, Harman & Ross, P.C., Billings, for defendants and appellants.

      Rodney T. Hartman argued, Herndon, Hartman, Sweeney & Halverson, Billings, for First Interstate Bank of Billings.
    Donald MacDonald IV, Missoula, for First Interstate Bank of Missoula.
    Jo Mickelson argued, Dorsey & Whitney, and Charles W. Hingle, Billings, for Interstate Production Credit Association.
    David Hoefer, Deputy County Atty., Billings, for plaintiff and respondent.
   JUSTICE SHEEHY

delivered the Opinion of the Court.

We determine in this case, principally as a matter of contract law, that it was the duty of the escrow holder here to clear title to the parcel of land involved, and then to distribute the balance of the funds accruing from the sale of the land to the holders of the two underlying mortgages. In doing so, we affirm the judgment of the District Court, Thirteenth Judicial District, Yellowstone County, though on somewhat different grounds, holding in favor of First Interstate Bank of Billings, First Interstate Bank of Missoula, and Interstate Production Credit Association. The parties against whom such judgment is effective are American Guaranty Life Insurance Company and Commerce Mortgage Company.

The issue posed by appellants in this case is whether judgment liens, which come into effect between the time a landowner executes and records an option for the sale of his lands and the time the optionee exercises the option, take priority over the recorded option. However, we find the controlling issue to be the legal effect of the escrow agreement executed by the parties.

Loyd Kimble was the owner of a parcel of land in Yellowstone County. He borrowed $3,000,000 from Commerce Mortgage Company for which he executed to Commerce Mortgage Company a note and mortgage of the land parcel on May 12, 1980. The note and mortgage were assigned by Commerce Mortgage Company to American Guaranty Life Insurance Company and the assignment was recorded on June 4, 1981. Loyd Kimble also borrowed an additional $150,000, using the same land parcel as security, and executed a note and mortgage to Commerce Mortgage Company which mortgage was recorded on July 1, 1981.

Loyd Kimble defaulted on his loan payments, and the mortgages went into default. American Guaranty and Commerce Mortgage Company obtained judgment against Kimble on the mortgage loans on July 3, 1986, which judgment was subject to appeal. No sheriffs sale of the land parcel occurred.

On July 21, 1986, Kimble entered into an option agreement for purchase of the parcel of land by North Point Square Associates and G. Walter Gasser, the latter as trustee for Walter Gasser Associates, Inc., the option being exercisable on or before January 24, 1987. An abstract of the option was recorded on July 24, 1986 in the records of Yellowstone County.

An escrow agreement was entered into between Loyd Kimble, North Point Square Associates, G. Walter Gasser, First Montana Title Company as escrow agent, and American Guaranty Life Insurance Company and Commerce Mortgage Company. The escrow agreement provided among other things that the escrow agent would hold a partial release of lis pendens filed in the prior foreclosure action, a release of the judgment lien obtained in the prior foreclosure action, a release of American Guaranty Life Insurance Company’s mortgage and a release of the mortgage of Commerce Mortgage Company, all in order to clear their respective interests in the parcel of land if the option was exercised. In consideration therefor, both American Guaranty Life Insurance Company and Commerce Mortgage Company were to receive the proceeds of the sale upon exercise of the option as provided in paragraph 6 of the escrow agreement, hereinafter set forth.

Before the option was exercised, however, on August 22,1986, First Interstate Bank of Billings obtained a judgment which was a lien upon the parcel of land in the sum of $77,041.01. First Interstate Bank of Missoula obtained a judgment lien upon the parcel of land for $27,000 on September 30,1986. Interstate Production Credit Association obtained a third judgment lien against the parcel of land on January 1, 1987, as stipulated by the parties.

On January 21,1987, North Point Square Associates and G. Walter Gasser, timely exercised the option by delivery of $336,674.05 to First Montana Title Company, the escrow agent. All parties stipulated to allow the transfer of title to the parcel of land to the optionee free and clear of all liens and encumbrances so that the optionee could proceed with the development of the land. This was done with the understanding that there would be no waiver of the respective claims by the parties, and that the ultimate resolution of their claims would be against the $336,674.05 held in escrow. The money was placed in an interest-bearing account pending the outcome of this lawsuit.

Paragraph 6 of the escrow agreement executed by the parties provided as follows:

“Escrow agent is hereby authorized to use said funds to clear title to the property and to then distribute the balance of the funds to the two underlying mortgagees as follows:
“(a) To American Guaranty Life Insurance Company — 97%
“(b) To Commerce Mortgage Company — 3%”

When the option agreement had been exercised and the money received, the escrow holder, First Montana Title Company of Billings, took the position that under paragraph 6 it must pay off the judgment liens before distributing the balance of the funds to American Guaranty Life Insurance Company and to Commerce Mortgage Company. The latter two companies disagreed with this interpretation of the escrow agreement. Thereupon First Montana Title Company of Billings, as escrow holder, interpleaded the funds in the District Court, naming all of the interested parties as defendants in the cause, and requesting the District Court to determine which parties were entitled to the funds and in what amounts. First Montana Title Company of Billings has since then been dismissed from the lawsuit.

The position of American Guaranty Life Insurance Company and Commerce Mortgage Company is that an option which is recorded prior to the establishment of judgment liens on the same property gives the holder of the option a priority over such subsequent judgment liens. They contend that the escrow agreement had the effect of an assignment for consideration prior to the entry of the judgments and that therefore under the escrow agreement the funds should pass to American Guaranty and Commerce Mortgage Company free of said judgment liens. They further contend that the District Court improperly applied mechanic’s lien law to judgment liens in order to hold against them.

The District Court granted a motion for summary judgment in favor of the judgment lienholders and against the mortgagees. Judgment was entered thereon and this appeal by the mortgagees resulted.

The mechanic’s lien argument of American Federal and Commerce Mortgage Company stems from the use by the District Court of Leigland v. McGaffick (1959), 135 Mont. 188, 338 P.2d 1037, a mechanic’s lien case, as authority for the proposition that a mere right to acquire an interest does not constitute an encumbrance or a transfer of title. The District Court did determine that an option does not transfer legal or equitable title until it is exercised, but the District Court also found that the intervening judgment liens attached to the landowner’s real property interest, and that these liens have remained a cloud on the title.

The mortgagees also rely on Ide v. Leiser (1890), 10 Mont. 5, 11, 24 P. 695, 696, to the effect that the optionee does receive something of value by obtaining an option, that is the right to call for and receive lands if he elects under the option.

In reaching its conclusion nonetheless, the District Court did rely on contract law. It determined that the option contract and the escrow agreement were executed contemporaneously and referred to the same subject matter, and therefore should be construed together as one instrument. Section 28-3-203, MCA. The District Court noted that there was a condition precedent to the payment of the sale of proceeds: The mortgagees, through the escrow agent, had to deliver to the optionee good and marketable title.

The controlling issue in this case is the contractual effect of the language in the escrow agreement. If the escrow holder was required to “clear title” before the mortgagees could receive the balance of the funds, the relative priorities between a recorded option and judgment liens become irrelevant. We hold it was the escrow holder’s duty to clear title for the optionee under the escrow agreement.

It is clear to us that the decision in this case should turn on the language of the escrow agreement, as a matter of contract. Under paragraph 6 above quoted, the escrow agent was authorized by all of the parties to the agreement to “use said funds to clear title to the property,” and then to distribute the proceeds to the mortgagees.

In Ogg v. Herman, et al. (1924), 71 Mont. 10, 15-16, 227 P. 476, 477, this Court said:

“While provision is made that plaintiff shall furnish an abstract showing clear title, good title, and a marketable title, it is apparent that these terms were used interchangeably, and that they are in fact synonymous. A clear title means that the land is free from encumbrances. (Citing authority.) A good title is one free from litigation, palpable defects and grave doubts, comprising both legal and equitable titles, and fairly deducible of record. (Citing authority.) A clear title means a good title (citing authority) and a good title means a marketable or merchantable title. (Citing authority.) A contract to convey in fee simple, clear of all encumbrances, implies a marketable title (citing authority), and a marketable title is one of such character as assures to the purchaser the quiet and peaceable enjoyment of the property and one which is free from encumbrances. (Citing authority.)”

This Court further noted in Gantt v. Harper (1928), 82 Mont. 393, 405, 267 P. 296, 298, the following:

“Webster’s definition of the word ‘clear’ as here employed is ‘free from encumbrance, obstruction, burden, limitation,’ etc., and the word ‘title,’ in the sense here used, ‘the union of all the elements which constitutes ownership, at common law, divided into possession, right of possession, and right of property, the last two now, however, being considered essentially the same.’

“In our opinion, the words, ‘clear title’ as employed in the plaintiffs letter, denied admission in evidence, means title to the property free from any encumbrance, burden or limitation, uniting all the elements constituting ownership, including right of possession and right of property — i.e., fee-simple title. Such was in effect the contract upon which the defendant agreed to pay a brokerage commission on the sale of the property, and a tender of the performance was complete and in accordance with the defendant’s terms.”

The contractual duty of the escrow agent in this case, agreed to by all the parties, was that the escrow holder should distribute the funds so as to deliver clear title to the optionee upon the exercise of the option. The judgment liens were indeed clouds on the title, and clear title could not be delivered until those judgment liens were satisfied and removed.

Therefore, we affirm the judgment of the District Court.

CHIEF JUSTICE TURNAGE and JUSTICES HARRISON, HUNT, McDONOUGH and WEBER, the HONORABLE HENRY LOBLE, District Judge, sitting for JUSTICE BARZ, concur.


author: JUSTICE McDONOUGH

text:
    In the Matter of the Adjudication of the Existing Rights to the use of all the Water, both Surface and Underground, within the DEARBORN DRAINAGE AREA, Including all Tributaries of the Dearborn River in Cascade and Lewis and Clark Counties, Montana. DEPARTMENT OF FISH, WILDLIFE AND PARKS, Claimant and Appellant, v. MONTANA STOCKGROWERS ASSOCIATION, INC., Respondent and Respondent.
    No. 89-288.
    Submitted Oct. 4, 1989.
    Decided Nov. 21, 1989.
    782 P.2d 898.

      Robert N. Lane, Chief Legal Counsel, Dept, of Fish, Wildlife & Parks, Helena, for claimant and appellant.
    Perry T. Moore, Moore, O’Connell, Refling & Moon, P.C., Bozeman, for respondent and respondent.
   JUSTICE McDONOUGH

delivered the Opinion of the Court.

This is an appeal from a judgment of the Water Court, Upper Missouri Division, finding the appellant, the Montana Department of Fish, Wildlife and Parks (Department), liable for attorneys’ fees and costs incurred by the Montana Stockgrowers Association, Inc. (Stockgrowers). We reverse.

The sole issue on appeal is:

Whether the Water Court erred in awarding attorneys’ fees and costs to the Stockgrowers, who prevailed against the Department in a case involving the public’s recreational use rights of the waters in Bean Lake.

This issue arose out of this Court’s decision in the Bean Lake case. Matter of Dearborn Drainage Area (Mont. 1988), [234 Mont. 331,] 766 P.2d 228, 45 St.Rep. 1948. In Bean Lake, the Department pursued a water right claim, for the waters of Bean Lake as part of the ongoing statewide adjudication of water rights under the Montana Water Use Act. See secs. 85-2-201, MCA et seq. The Stockgrowers intervened in response to statewide notice by publication and opposed the Department’s claim. Legal counsel for the Stockgrowers, was appointed lead counsel for all intervenors opposing the claim.

The Water Court ruled, and we affirmed, the Department had no appropriation right in Bean Lake predating 1973, because before that time no such right was recognized for recreation, fish and wildlife. Before 1973, some form of diversion was necessary for an appropriation. Because the right asserted by the Department lacked the elements of “diversion, intent, and notice,” we held that the Department, for itself or for the public, had no valid water right which predated the 1973 Water Use Act.

Then after remittitur the Stockgrowers filed a motion for attorneys’ fees. A hearing was held, and the Water Court ruled that the Stockgrowers were entitled to attorneys’ fees and costs. The court arrived at this conclusion although it specifically found that the Department acted in good faith within its statutory obligation to represent the public’s recreational interest. It based its conclusion on the fact that the case was of precedent setting nature. Because the outcome was significant to all water users in the state, the court ruled that the Stockgrowers assumed “a burden which was disproportionate to its interest in Bean Lake.” It held the case presented unique circumstances which warranted an assessment of costs and attorneys’ fees.

The Department’s position is that when attorneys’ fees and costs are to be assessed against agencies of the state, one must determine whether they are. warranted under § 25-10-711, MCA. This statute, it is maintained, sets out the specific test that must be met before costs, as enumerated in § 25-10-201, MCA, and attorneys’ fees, can be assessed. In short, it requires that such award is only proper when a private party prevails against the state agency and the claim or defense asserted by the agency was frivolous or pursued in bad faith. Section 25-10-711, MCA.

The Department takes the view that this statute sets out the sole means by which attorneys’ fees can be granted. They argue that the judgment rendered by the Water Court is in error because it specifically found the claim was asserted in good faith and in accordance with the statutory mandate of § 85-2-223, MCA. This statute directs the Department to represent the public in claiming water for recreational use. The Department asserts that a failure on its part to make the claims on Bean Lake would have been tantamount to a dereliction of duty on its part. Therefore, because the claim was asserted in good faith, the assessment of fees and costs was in error.

The Water Court did not rely upon § 25-10-711, MCA, to arrive at its conclusion. It held that due to the constitutional and economic significance of this case, the State should bear all of the costs. It reasoned that in order to ensure full presentation of all public interests affected by its decision, it was necessary to provide funding to private organizations, such as the Stockgrowers. If this funding is not provided, certain viewpoints may not be presented, and, as a result the overall integrity and effectiveness of the adjudication process may be diminished.

The Water Court’s ruling does not comply with the general rules set out by this Court regarding attorneys’ fees. We have held that Montana adheres to the “American Rule” regarding attorneys’ fees. Under the American Rule, a party in a civil action is generally not entitled to fees absent a specific contractual or statutory provision. In Re Marriage of Hereford (1986), 223 Mont. 31, 723 P.2d 960.

It is true that we have departed from this rule when certain extraordinary and compelling circumstances have been presented. For instance, in Cate v. Hargrave (1984), 209 Mont. 265, 680 P.2d 952, we held that under the inherent equitable powers held by the judiciary, a District Court can assess attorneys’ fees in cases of bad faith. But we disagree with the Water Court that the circumstances of this case provide a basis for the assessment of fees.

The Stockgrowers is a private organization that represents approximately 3,000 farmers and ranchers across the State. Many of its members hold a right to use the waters which are owned by the State. The Stockgrowers, like many other organizations, have a distinct economic and philosophical interest in the uses and adjudication of the waters within the State. They represent primarily a private agricultural interest.

The Department, on the other hand, has been charged by § 85-2-223, MCA, with the duty of representing the public interests in regard to recreational use of Montana waters. The duty conferred by this statute is concomitant with Article IX, Section 3, Part 3 of the Montana Constitution which states:

“All. . . waters within the boundaries of the state are the property of the state for use of its people ...”

This provision sets forth the fact that the waters of the State belong to the State for use by all of its citizens. However, as this case demonstrates, these uses often conflict, and competing interests often disagree over how this resource should be allocated.

The premise of the Montana Water Use Act anticipates these disagreements, and the integrity of Montana’s adjudication process depends upon the assertion and ultimate resolution of these varying interests. The provisions of the Act charge all water users with the duty of asserting and defending their interests. The Stockgrowers has taken upon itself the duty of defending a private agricultural interest. The Department, on the other hand, has been directed to enhance and protect the State’s resources under its charge. It therefore claims waters necessary to ensure the well being of fish, wildlife and scenic values in order to fulfill this mandate.

Viewed in this context, the dispute at Bean Lake, is really no more than an ordinary water rights dispute which was envisioned, by the legislature in the passage of the Montana Water Use Act. The legislature in the passage of the Act determined that the adjudication process would be adversarial in nature. It did not, however, determine that the prevailing parties in these disputes would be entitled to attorneys’ fees.

Many water rights disputes have the potential of affecting a number of water users. A case determining a question of abandonment, for example, could have far reaching effect on other water users. However, this Court declines to award attorneys’ fees and costs for the sole reason that a case is of precedent setting nature. We agree with the rationale of the California Supreme Court in Woodland Hills v. City Council of Los Angeles (1979), 23 Cal.3d 917, 154 Cal.Rptr. 503, 593 P.2d 200:

“. . . the doctrine of stare decisis has never been viewed as sufficient justification for permitting an attorney to obtain fees from all those who may, in future cases, utilize a precedence he has helped to secure. Woodland Hills, 154 Cal.Rptr. at 519, 593 P.2d at 216.”

The Stockgrowers urge the Court to recognize and apply the Private Attorney General Doctrine to the facts of this case. The Water Court did not utilize this doctrine in arriving at its conclusion. However, we will point out that the Doctrine should not apply to the facts of this case. The Doctrine is normally utilized when the government, for some reason, fails to properly enforce interests which are significant to its citizens. In this case, the Department complied with its mandate and represented a public’s interest as defined by § 85-2-223, MCA, in making the in-lake claims at Bean Lake. There was no failure on its part to comply with its duties.

We reiterate the point that the Department acted in good faith and in accordance with constitutional and statutory mandates in making its claims at Bean Lake. We therefore hold that the award was in error and the judgment awarding fees is reversed.

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


author: JUSTICE McDONOUGH JUSTICE SHEEHY, JUSTICE HUNT,

text:
    STATE OF MONTANA, EX REL., ROBERT ECCLESTON, Kevin Sullivan and Elmer Carsone, Relators, v. MONTANA THIRD JUDICIAL DISTRICT COURT, Deer Lodge County, and The Honorable Ted Mizner, Presiding District Judge, Respondents.
    No. 89-040.
    Submitted Sept. 25, 1989.
    Decided Nov. 22, 1989.
    Rehearing Denied Jan. 2, 1990.
    783 P.2d 363.

      C. Richard Anderson argued, John P. Davis, Poore, Roth & Robinson, Butte, Timothy McKeon, McKeon & McKeon, Anaconda, for relator.
    Marc Racicot, Atty. Gen., Clay R. Smith, Solicitor, Helena, Joseph C. Connors argued, Bernard J. Everett argued, Knight, Dahood, McLean & Everett, Anaconda, for respondents.
    Bruce W. Moerer, Montana School Boards Ass’n, Helena, for amicus curiae.
   JUSTICE McDONOUGH

This case is an original proceeding in this Court involving an application for a writ of supervisory control. The issues presented for our determination originated in Fitzpatrick v. School District No. 10, a negligence case currently before the Third Judicial District Court. Relators, defendants below, are employees of the original named defendant, School District No. 10. Relators seek relief via supervisory control from the District Court’s order granting plaintiffs leave to belatedly amend their complaint to name relators as defendants in the action below. In the same order, the District Court granted summary judgment dismissing the original defendant, chairman of the board of trustees of the school district, from the action. In a subsequent order, the District Court granted defendant school district’s motion to be dismissed as a party to the suit. Both dismissals were based on the immunity provisions of § 2-9-111, MCA.

At plaintiff’s request, we identified the following issues for determination upon supervisory control:

1) Whether this is a proper case for this Court’s consideration upon a writ of supervisory control?

2) Whether the District Court erred in granting plaintiffs leave to amend their complaint pursuant to Rule 15(c) to name the school district employees as new parties after expiration of the statute of limitations?

3) Whether §§ 2-9-111(2) and (3), MCA, grants immunity from tort liability to a school district and its employees for conduct by the latter admittedly within the course and scope of their employment and not involving the use of a motor vehicle, aircraft, or other means of transportation?

After careful consideration of these issues and the facts of this case, we conclude this case is appropriate for determination upon the writ. Further, we conclude that the District Court did not abuse its discretion in allowing the amendment; however, the recent case law interpreting § 2-9-111, MCA, clearly renders the relators immune from suit.

On March 4th, 1985 plaintiff Mary Fitzpatrick fell down the alley stairs leading down to the Memorial Gymnasium in Anaconda, Montana. The gym is owned by School District No. 10. On August 26, 1987 plaintiffs Mary and Frank Fitzpatrick filed a complaint against School District No. 10 and the District’s chairman of the board of trustees Ty Tyvand. The complaint alleged that defendants were negligent in failing to properly light and remove ice and snow from the stairway. Defendants filed an answer on October 7, 1987. Pursuant to stipulation, defendants amended their Answer to plead the affirmative defense of immunity from plaintiffs’ claims pursuant to § 2-9-111, MCA. Defendants filed their amended answer more than three (3) months before the running of the statute of limitations. On July 7, 1988, plaintiffs moved for leave to amend their complaint to name Robert Eccleston and Kevin Sullivan, the school janitors, and Elmer Carsone, the school principal, as defendants in the suit. The motion was filed four months after running of the statute of limitations. On July 29, 1988, the original defendants filed a motion for summary judgment based on their immunity defense.

In September 1988 the District Court dismissed Chairperson Tyvand based on § 2-9-111, MCA, but not School District No. 10. In the same order, the court also granted plaintiffs leave to amend their complaint adding employee relators as defendants, concluding that the amendment related back to the lawsuit’s filing date under Rule 15(c), M.R.Civ.P., and thus was not barred by the three year statute of limitations. The relators and school district immediately moved for dismissal of the amended complaint on immunity and statute of limitations grounds. On December 19, 1988 the District Court granted the motion with respect to School District No. 10 but denied it as to relators. On January 25, 1989 relators filed the present application for writ of supervisory control. The sole issue raised in the application is whether the District Court erred in determining that the amendment related back to the original filing date.

In opposing the application, plaintiffs suggested that the relation-back issue will eventually become moot because the District Court erred in dismissing the school district on immunity grounds and because recovery against the school district will bar the claims against relators under § 2-9-305(5), MCA. Plaintiffs requested “the opportunity to fully brief the immunity issues” to avoid “piecemeal appeals” and to place the Court “in a position of rendering a decision with the benefit of all relevant facts and argument.” On May 9,1989 this Court entered an order identifying the issues listed above for oral argument.

I.

Article VII, Section 2 of the Montana Constitution gives this Court “original jurisdiction to issue, hear, and determine writs . . . .” The same section also gives us “general supervisory control over all other courts” in the State. Art. VII, Sec. 2, Mont.Const. Recently, we summarized the standards for granting a writ of supervisory control. See State ex rel. Fitzgerald v. District Court (1985), 217 Mont. 106, 114, 703 P.2d 148, 153-54. One of the functions of the writ is to control the course of litigation in lower courts, where those courts are proceeding within their jurisdiction but under mistake of law by doing a gross injustice, and there is no appeal or the remedy by appeal is inadequate. State ex rel. Shores v. District Court (1903), 27 Mont. 349, 71 P. 159; State ex rel. Whiteside v. District Court (1900), 24 Mont. 539, 63 P. 395.

There are no written regulations or laws respecting our power of supervisory control. Rather, we have proceeded on a case-by-case basis being careful not to substitute the power of supervisory control for an appeal provided by statute. State ex rel. Reid v. District Court (1953), 126 Mont. 489, 255 P.2d 693. However, if a relator will be deprived of a fundamental right, both justice and judicial economy require us to assume jurisdiction and resolve the issue in favor of the relator. Thus, if the cause below is mired in procedural entanglements and appeal is not an adequate remedy, we will issue a writ of supervisory control. State ex rel. Levitt v. District Court (1977), 172 Mont. 12, 560 P.2d 517.

In the case at bar, the lack of any issue of material fact clearly renders this case appropriate for disposition upon summary judgment. Rule 56(c), M.R.Civ.P., The problem confronted by the District Court in this case is whether the law, specifically § 2-9-111, MCA, does in fact provide immunity to the individual employee relators, thereby entitling them to summary judgment. Determination of this question will directly bear on the propriety of the District Court’s refusal to dismiss the relators and may also determine the propriety of the amendment naming relators as parties to the lawsuit below. Therefore, we conclude that a writ of supervisory control is appropriate in this case for the purpose of clarifying the law and in the interests of judicial economy.

II.

Defendants rely primarily on Kilkenny v. Arco Marine, Inc. (9th Cir. 1986), 800 F.2d 853, in contending that the amendment adding them should not relate back under Rule 15(c), M.R.Civ.P. The Rule provides:

“Rule 15(c). Relation back of amendments. Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading. An amendment changing the party against whom a claim is asserted relates back if the foregoing provision is satisfied and, within the period provided by law for commencing the action against him, the party to be brought in by amendment (1) has received such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits, and (2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against him

Rule 15(c), M.R.Civ.P. See also Schiavone v. Fortune (1986), 477 U.S. 21, 29, 106 S.Ct. 2379, 2384, 91 L.Ed.2d 18, 27. Kilkenny holds that the extent of the information the pleader obtains respecting another as a potential defendant, after filing of the original complaint and before the limitations period expires, is relevant to whether the potential defendant knew or should have known that they would be named but for a mistake in identity. Kilkenny, 800 F.2d at 857.

The defendants point out that the Fitzpatricks had deposed and taken statements from the relators prior to expiration of the statute of limitations. Defendants argue further that plaintiffs had notice of their mistake in naming the proper parties when defendant school district amended its answer to assert the immunity defense. Relators contend that the extent of this information held by the plaintiffs caused them to believe that they were not named because of strategic reasons rather than as a result of mistaken identity.

However, Kilkenny can be distinguished from the case at bar. The amended answer in Kilkenny not only alleged that the original named defendant was not a proper party to the suit; it also identified the parties who were the proper defendants to the suit. In this case defendants’ amended answer merely notified plaintiffs of the possible impropriety of the school district as a defendant. The amended answer did not indicate that the relators alone might be or were in fact the proper parties to the suit. Furthermore, because the immunity issue presents a novel question under the facts of this case, plaintiffs did not know that the school district is immune from suit under § 2-9-111(2), MCA. In fact, they still contend that the district is not immune. Thus, the first time that the plaintiffs had an indication that the relator employees were the proper parties to the suit is when the District Court dismissed the school district and Chairperson Tyvand after the expiration of the statute of limitations. Thus, our determination should focus on the threshold question of whether the proposed defendants knew or should have known that but for a mistake in identity of the proper parties the suit would have been brought against them.

In this regard the defendant employees are the personification of the school district. They were deposed and involved in the litigation from the outset and cannot claim that they did not have notice of the institution of the action. Considering the obvious link between the district employees and the school district itself, and in light of the arguably unsettled immunity question presented in this case, we agree with the District Court’s conclusion that:

“there was no mistake as to the identity of the District employees who were involved in the circumstances that led to the filing of this lawsuit. However there was a mistake as to the identity of the proper parties to this lawsuit as contemplated by Section 15(c), M.R.Civ.P. . . . (Emphasis by the District Court.)”

Order of December 15, 1988. The mistake in this case being related to the identity of the proper parties and the relators having ample notice of the action so as not to be prejudiced, we find no abuse of discretion by the District Court in allowing the amendment.

III.

We now come to the determinative issue in this case requiring issuance of the writ. The issue involves the scope of the immunity granted by § 2-9-111, MCA, to a school district and its employees for torts committed within the course and scope of employment and not involving the use of a motor vehicle, aircraft, or other means of transportation. The statute provides:

“2-9-111. Immunity from suit for legislative acts and omissions.
“(1) As used in this section: (a) the term ‘governmental entity’ includes the state, counties, municipalities, and school districts; (b) The term ‘legislative body’ includes the legislature . . . and any local governmental entity given legislative powers by statute, including school boards.
“(2) A governmental entity is immune from suit for an act or omission of its legislative body or a member, officer, or agent thereof.
“(3) A member, officer, or agent of a legislative body is immune from suit for damages arising from the lawful discharge of an official duty associated with the introduction or consideration of legislation or action by the legislative body.
“(4) The immunity provided for in this section does not extend to any tort committed by the use of a motor vehicle, aircraft, or other means of transportation.”

Section 2-9-111, MCA.

Plaintiffs argue that the past cases construing the statute and relied upon by defendants are distinguishable from the case at bar. See e.g., Limberhand v. Big Ditch Co. (1985), 218 Mont. 132, 706 P.2d 491; W.D. Construction Inc. v. Board of County Commissioner’s of Gallatin County (1985), 218 Mont. 348, 707 P.2d 1111; Bieber v. Broadwater County (Mont. 1988), [232 Mont. 487,] 759 P.2d 145, 45 St.Rep. 1218; Peterson v. Great Falls School District No. 1 and A (Mont. 1989), [237 Mont. 376,] 773 P.2d 316, 46 St.Rep. 880, [8 Ed.Law 61,] Plaintiffs contend that Barnes and W.D. Construction can be distinguished because those cases involved clearly legislative rather than administrative functions. This contention carries no weight. Our recent decisions in Bieber and Peterson, clearly disposed of this issue. While the statute is entitled “Immunity from suit for legislative acts and omissions”, we held in Peterson and Bieber that the plain meaning of the statute’s actual language is much broader in that “action by the legislative body need not be legislative in nature to afford immunity.” Peterson, 773 P.2d at 318. Accordingly, we decline to give credence to the plaintiffs’ distinction between administrative and legislative acts “because the plain language of the statute makes no such distinction”. Bieber, 759 P.2d at 147. We will not delve outside the plain meaning of the words used in a statute. W.D. Construction, 707 P.2d at 1113, Barnes v. Koepke (Mont. 1987), 226 Mont. 470, 736 P.2d 132, 134, 45 St.Rep. 810, 812.

Plaintiffs also contend that § 2-9-111, MCA, does not grant immunity to the relators in this case. They argue that the statute requires involvement by a legislative body, i.e. the school board, before immunity can arise. Plaintiffs concede that the school district is a governmental entity and the school board is a legislative body under Subsection (1). However, plaintiffs argue that the school district, not the school board, owns the gymnasium and employs the custodians and the principal. Thus, plaintiffs argue the operative provision of Subsection (3) has no application to the case at bar as no member, officer, or agent of any legislative body is being sued.

We disagree. Clearly, the relators in this case are agents of the school board:

“(2) A servant is an agent employed by a master to perform service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the master. (Emphasis added.)”

Restatement 2d of Agency, § 2. Thus, an agent includes one who performs only manual labor as a servant. Restatement 2d of Agency, § 1, comment (e). The board of trustees for each school district has the power to:

“(2) Employ and dismiss administrative personnel, clerks, secretaries, teacher aides, custodians, maintenance personnel, school bus drivers, food service personnel, nurses, and any other personnel deemed necessary to carry out the various services of the district . . . (Emphasis added).”

Section 20-3-324, MCA. A school “district” is defined as:

“. . . the territory, regardless of county boundaries, organized under the provisions of this title to provide public educational services under the jurisdiction of the trustees prescribed by this title . . . . (Emphasis added).”

Section 20-6-101 (1), MCA. Thus, the school board is the governing body — i.e., the legislative body — of the governmental entity, the school district. The janitors cannot be said to be agents of either the board or district to the exclusion of the other. Rather, they are agents of the district as manifested by their agency with the district’s governing school board. It simply does not make sense to say that relators are agents of the district but not the board responsible for hiring them and governing the district and the district’s employees.

Furthermore, in Bieber we construed the phrase in Subsection (3) of § 2-9-111, MCA, “with the introduction and consideration of legislation or action by the legislative body” to be disjunctive. Thus, Subsection (3) grants immunity to members, officers, or agents of a legislative body for “the lawful discharge of an official duty associated with the introduction or consideration of legislation or action by the legislative body.” Peterson, 773 P.2d at 317-318.

Here, the omission by relators arose from the lawful discharge of an official duty associated with alleged omissions by the legislative body. A failure to take legislative action, i.e., a legislative omission, will give rise to the immunity afforded by the statute. Section 2-9-111(2), MCA. Limberhand, 706 P.2d at 498. Any alleged failure by the school district to provide sufficient funding for maintenance of the stairs and employment of additional custodians are omissions by its legislative body, the school board. The omissions of the relators occurred during the lawful discharge of duties associated with these omissions by the board. Thus, the relators are immune under Subsection (3) of the statute.

Plaintiffs also contend that Subsection (2) of § 2-9-111, MCA, does not grant immunity to the school district in this case. Once again, we disagree. Subsection (2) of the statute clearly affords immunity to a governmental entity “for an act or omission of its legislative body or a member, officer, or agent thereof.” In the case at bar, the act complained of was an omission by agents of the school board — i.e., failure by the janitors to remove snow and failure by the principal to supervise the janitors. Under the plain language of Subsection (2) the school district is clearly itnmune for an omission by an agent of the school board. The District Court did not err in granting summary judgment to the school district on its immunity defense.

Finally, plaintiffs argue that the interpretation given the statute violates the rule that any reinstatement of governmental immunity must be strictly construed. Plaintiffs rely on B. M. v. State (1982), 200 Mont. 58, 649 P.2d 425, 33 A.L.R. 4th 1157, where we held that it is “our duty to strictly construe any attempted governmental immunity — that is, every act expanding statutory immunity must be clearly expressed.” In B.M., the plaintiffs sued the State for negligence in placing a six-year old child in a special education program for educable mentally retarded children. The State was granted summary judgment based on immunity under § 2-9-111, MCA. We reversed on the grounds that the legislature had not enacted legislation to limit the liability of school boards in the administration of special education programs. We held that in the absence of a clear statutory declaration granting immunity it is this Court’s duty to permit rather than to deny an action for negligence. B.M., 649 P.2d at 427.

The plain meaning of the actual language used in § 2-9-111, MCA, was not discussed in our decision in B.M. v. State. We have decided several other immunity cases since our 1982 decision in B.M. In the process, we have arrived at the current construction of § 2-9-111, MCA, on a case-by-case basis. B.M.’s rule of strict construction still holds true. However it is now clear, particularly after our decisions in Bieber and Peterson, that the plain language of the statute constitutes a clear statutory declaration granting immunity to the relators in this case.

Earlier in this opinion we held that the District Court did not abuse its discretion in allowing the plaintiffs to amend their complaint because of the uncertainty of the law regarding immunity. We also held that a writ of supervisory control should issue in this case in order for us to clarify the immunity question. We recognize that for us to first hold that the confusion regarding immunity requires supervisory control and then to hold that the statute clearly grants immunity to the relators may seem a bit contradictory.

In this regard, we are not asserting in this opinion that the statute is unequivocally clear at first glance. Indeed, several interpretations of § 2-9-111, MCA, have been argued in the line of cases that have come before us since the statute’s adoption. However, it is this line of cases, particularly our recent decisions in Bieber and Peterson that has given a specific and reasonable interpretation to the statute based on the plain meaning of the actual language used. Moreover, this interpretation of § 2-9-111, MCA, leads us to but one conclusion: the statute grants immunity to both the school district and its individual employees in this case.

The writ is granted and the amendment naming the relators relates back to the original filing date. However, as discussed above, § 2-9-111, MCA, grants immunity to both the school district and the relators in this case. The school district already being dismissed on summary judgment, we direct the District Court to dismiss the relators based on the immunity granted by § 2-9-111, MCA.

The cause is remanded to the District Court for further proceedings consistent with this opinion.

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

JUSTICE SHEEHY,

dissenting:

This Court, having in a line of cases needlessly and illogically enlarged governmental immunity for negligence, now marches overzealously to the ultimate nonsense: a janitor in charge of brooming off snow from the steps outside of a school gymnasium is engaged as an agent in legislative action. So say the majority.

It will be small comfort to the plaintiff Mary Fitzpatrick that the majority are marching against the swell of history, to which the law must eventually bend. The extension of governmental immunity to mere government employees who wrongfully perform or omit to perform purely mechanical duties has no root in history.

“Legal doctrines often flourish long after their raison d’etre has perished. The doctrine of sovereign immunity rests on the fictional premise that the ‘King can do no wrong.’ Even though the plot to assassinate James I in 1605, the execution of Charles I in 1649, and the Colonists’ reaction to George Ill’s stamp tax made rather clear the fictional character of the doctrine’s underpinnings, British subjects found a gracious means of compelling the King to obey the law rather than simply repudiating the doctrine itself. They held his ad-visors and his agents responsible. (Emphasis added.)”

Will v. Michigan Dept. of State Police (1989), _ U.S. _, _, 109 S.Ct. 2304, 2320-2321, 105 L.Ed.2d 45, 68-69 (Justice John Paul Stevens, dissenting).

The majority in this case have carried governmental immunity to a far greater reach than was ever extended in the severest of monarchical history. They have not only excused the king; they have excused the king’s men, his feudal lords and all their vassals.

I.

I particularly object to the contention of the majority that their interpretation of § 2-9-111, MCA, in this and earlier cases is “clear.” Their interpretation is not clear. It is so unclear that they are brought to the admission that they are not asserting in this Opinion “that the statute is unequivocally clear at first glance.” Using themselves as authority, the majority hold that it is now clear “that the plain language of the statute constitutes a clear statutory declaration granting immunity to the relators in this case.” (Slip opinion, page 12.) They said so; ergo, it is. Let us see for ourselves whether the language is plain or the declaration is clear.

Subsection (3) of 2-9-111, MCA, provides:

“(3) A member, officer, or agent of a legislative body is immune from suit for damages arising from the lawful discharge of an official duty associated with the introduction or consideration of legislation or action by the legislative body.”

By rules of English grammar as I understand them, a member, officer or agent of a legislative body is immune if the discharge of his official duty was “associated with the introduction or consideration of legislation or action by the legislative body.” The majority, by their interpretation, eliminate several words from the subsection so that they read it to say that a member, officer or agent of a legislative body is immune if the official duty is “associated . . . with action by the legislative body.” The majority interpretation violates grammatical and statutory rules of construction. We are required not to insert what has been omitted or to omit what has been inserted, and when there are several provisions of particulars we are to give each such a construction as will give effect to all the provisions. Section 1-2-101, MCA. Moreover, in the construction of a statute, the intention of the legislature is to be pursued, if possible. Section 1-2-102, MCA. Statutes in this state are to be liberally construed with a view to effect their objects and to promote justice. Section 1-2-103, MCA.

The intent of the legislature can be gleaned from the heading it used in enacting the statute: “Immunity from suit for legislative acts and omissions.” That heading is a part of the statute.

The meaning of § 2-9-111(3), MCA, is not plain and clear as the majority contends. Further militating against their position, as far as legislative intent is concerned, are the provisions of sec. 2-9-102, which state:

“Every governmental entity is subject to liability for its torts and those of its employees acting within the scope of their employment or duties whether arising out of a governmental or proprietary function except as specifically provided by the legislature under Art. II, § 18, The Constitution of the State of Montana.(Emphasis added.)”

The majority, by their interpretation of § 2-9-111, MCA, have abrogated the provisions of § 2-9-102, MCA, because now under the holdings of this Court, through its majority, every substratum of state government is immune from suit for the torts of its agents, officers and employees, whether those acts are legislative or administrative, and whether governmental or proprietary.

The majority rely on their decision in Bieber v. Broadwater County (Mont. 1988), 759 P.2d 145. Bieber was a case decided on briefs, without oral argument, and by less than a full court. It involved the act of a county commissioner in discharging an employee. His act was ratified by the county commission. Stretching Bieber to cover a janitor who didn’t scrape snow from a stairway is unsupportable.

The majority also rely upon Peterson v. Great Falls School District No. 1 (Mont. 1989), [237 Mont. 376,] 773 P.2d 316, [8 Ed.Law 61]. Here again, we have an action by an employee for wrongful discharge brought against a school district. The discharge of the employee by an administrative assistant was ratified by the school board at its next regularly scheduled meeting. I dare say that no attempt was made by School District No. 10 to ratify the non-cleaning of its sidewalks by its employees.

What is eminently clear from the foregoing is that § 2-9-111, MCA, is not itself clear. The majority have confounded it by omitting portions of the statute, by ignoring the legislative intent expressed in the heading of the statute, by abrogating § 2-9-102, MCA, which imposes liability for employee torts, and by not requiring that governmental immunity be specifically provided as required in § 2-9-102, MCA. In so holding, this Court, by its own construction, has extended governmental immunity far beyond any immunity that ever existed in Montana prior to the 1972 Montana Constitution and, now, obviously, in direct reversal of the intentions of the constitutional framers of 1972 who unequivocally abolished governmental immunity.

II.

We have noted in the foregoing that § 2-9-102, MCA, imposes liability on governmental entities for the torts of its employees. The immunity provisions of § 2-9-111, MCA, do not speak of actions by employees but rather actions by agents. The question arises, is it legally correct to consider a janitorial employee to be an “agent” of the school district?

The majority is in error in construing § 2-9-111(2), MCA, to determine that a janitorial employee is an “agent” of the school district; and in construing § 2-9-111(3), MCA, to determine that a janitorial employee is the “agent” of a legislative body, the school district.

The term “agency” has no meaning at all when applied to a janitorial employment.

“The term ‘agency’ means a fiduciary relationship by which a.party confides to another the management of some business to be transacted in the former’s name or on his account, and by which such other assumes to do the business and render an account of it. It has also been defined as the fiduciary relationship which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act. Thus, the term ‘agency,’ in its legal sense, always imports commercial or contractual dealings between two parties by and through the medium of another. (Emphasis added.)”

3 Am.Jur.2d 509, Agency, § 1.

An employee rendering purely mechanical services is not an “agent” of the master, in the true sense of the word.

Thus:

“The relationship most closely related to the master and servant relationship is, of course, that of principal and agent. Both relate to employment and express the idea of service, and both agents and servants are workers for another under expressed or implied agreement. Indeed, the law of agency is an outgrowth and expansion of the doctrine of master and servant, and it is of course true that the words ‘agent’ and ‘servant’ in a general sense both apply to persons in the service of another. A master is a species of principal and a servant a species of agent. As a result, the words ‘servant’ and ‘agent’ are often used interchangeably by the courts, and indeed, an agent employed to make contracts might also, with respect to some of his duties and activities, be a servant.
“On the other hand, the terms ‘agent’ and ‘servant’ are not wholly synonymous since an agent may be authorized to make contracts on behalf of the principal with third persons and to generally represent him in the business, while a mere servant has no such authority, but renders purely mechanical services as directed by his employer. The essential difference between the two is that an agent represents his principal in business dealings and is employed to establish contractual relations between the principal and third persons, while a servant is not.
“As a general rule, a servant is employed to perform certain acts in a way that is or may be specified, and he may not use his discretion as to the means to accomplish the end for which he is employed. This being so, the service performable by a servant for his employer may be inferior in degree to work done by an agent for his principal. (Emphasis added.)”

53 Am.Jur.2d 84-85, Master and Servant, § 3.

The argument that a mere employee is not an agent in the sense of § 2-9-111, MCA, is buttressed when one examines § 2-9-305, MCA. This statute provides indemnity for employees who are sued for actionable conduct in their service of the government. The indemnity is for full cost of settlements or judgments, as well as for costs and attorney fees. As applied to the relators in this case, if this Court properly held that they were not within the immunity umbrella, they would be protected completely from pecuniary loss for suits against them arising out of their employment. The use by the legislature of the term “agents” in § 2-9-111, MCA, and the use of “employees” in § 2-9-305, MCA, shows that the legislature found a difference in their meanings as applied to the concept of immunity. I would construe the legislative intent to be that “employees” in § 2-9-305, MCA, included both employees and agents; but that “agents” in § 2-9-111, MCA, did not include merely mechanical employees holding purely perfunctory jobs not related to the formation or execution of policy in the field of jurisdiction entrusted to the governmental unit.

It is a perversion of the theory of principal and agent to contend that the janitorial employees were “agents” of the trustees themselves individually. The janitorial employees were in the service of the district, and not in the service of the trustees individually. Thus, trustees under § 20-3-324, MCA, outlining the power and duties of trustees for each school district, have the power and it is their duty to:

“(2) employ and dismiss administrative personnel, clerks, secretaries, teacher aides, custodians, maintenance personnel, school bus drivers, food service personnel, nurses, and any other personnel considered necessary to carry out the various services of the district . . . .” (Emphasis added.)

Having in mind then that a janitorial employee is not within the legal sense an “agent” of the school district, immunity does not accrue to the school district under § 2-9-111, MCA, which grants immunity only as follows:

“(2) A governmental entity is immune from suit for an act or omission of its legislative body or a member, officer, or agent thereof.” (Emphasis added.)

Because the janitor is not an agent of the school district, but rather its mere employee, immunity does not apply to the school district in this case.

Now let us consider what is meant by “action by the legislative body.”

Section 2-9-111, MCA, grants immunity to the members of the school board under the following language:

“(3) A member, officer, or agent of a legislative body is immune from suit for damages arising from the lawful discharge of an official duty associated with the introduction or consideration of legislation or action by the legislative body.”

From what we have said above, it is obvious that a janitorial employee is not an agent of a legislative body, but rather is an employee of the district, and as such, immunity does not attach to the members of the district by reason of acts of the janitorial employees. In my judgment, we do not have a question of immunity as far as the school district trustees are concerned, but rather whether they are simply not subject to liability because the acts of the janitorial employees were not imputable to the individual school district trustees, but rather to the district which employed them. We do not, when private corporate employees are negligent, impute that negligence personally to the president of the corporation; only to the entity of the corporation.

However, since they were employed by the school district, the theory seized upon by some is that the work of the janitors is “an official duty” associated with “action by the legislative body.” Section 2-9-111, MCA. That cannot be under the statutes.

The only way that school trustees can “act” is to act collectively, and at a regular or properly called special meeting.

Section 20-3-301(2), MCA, provides:

“The trustees shall be composed of the number of trustee positions prescribed for a district by 20-3-341 and 20-3-351. When exercising the power and performing the duties of trustees, the members shall act collectively, and only at a regular or a properly called special meeting.” (Emphasis added.)

Section 20-3-301, MCA, stating that members can only act collectively and at their regular meetings must be read in pari materia with § 2-9-111, MCA, which says that the individual members are immune for “action by the legislative body.” The actions of a janitor in maintaining or failing to maintain school premises have no relation to the actions taken by the legislative body in its regular or special meetings and, since the trustees may only act collectively and not otherwise, § 2-9-111, MCA, cannot be read to extend immunity on the very wispy basis that a janitor cleaning off steps to a gym is involved in “action by the legislative body.” That contention is simply ridiculous.

Both of the statutes, § 2-9-111, MCA, and § 20-3-301, MCA, must also be read in pari materia with § 20-3-332, MCA, which provides as follows:

“Personal immunity and liability of trustees. (1) When acting in their official capacity at a regular or special meeting of the board or a committee thereof, the trustees of each district are individually immune from exemplary and punitive damages.” (Emphasis added.)

The “action” of the board trustees can only occur at regular or special meetings and it is only at such meetings that they have an official capacity. Again this statute is a further indication that the legislative immunity granted in § 2-9-111, MCA, to members and agents was never comprehended to grant immunity to school districts for the non-legislative wrongful acts or omissions of the janitorial employees.

III.

There is a sardonic element in this case. The real party in interest shouting “governmental immunity” is probably an insurer. It sold a policy to the school district, promising coverage for comprehensive liability. Because of this Court, the insurer was never at risk for any wrongful acts of the school district personnel outside of motor vehicles. Its premium is pure gravy. In more enlightened former days in Montana, we had statutes which required insurers of state and sub-state risks to waive the defense of immunity. (Former § 40-4401, R.C.M. (1947); former § 33-23-101, MCA). In order to provide a better business climate for insurers, the Montana legislature repealed this requirement in 1979 (Ch. 425, § 4, Laws of 1979; the repealer was contained in S.B. 380, introduced by Senators Hafferman, Towe and Turnage).

The line of cases by which this Court has extended governmental immunity to cover any and all acts of the governmental entities (except for the state itself) and their various members, officers, agents and employees, is such a reversal of history and sound legal thought that it boggles the imagination. We should have begun, in this case, to pick up the pieces. There are problems in defining the duties of school board trustees as they are outlined in the statutes; and in defining the relation of mere mechanical personnel to the school boards as legislative bodies. We should restructure legislative immunity in this state so as not to comprehend and include merely administrative functions. That is how I would decide this case.

JUSTICE HUNT,

dissenting:

I dissent. I concur generally with the foregoing dissent of Justice Sheehy and in particular with what he has to say about the case of Bieber v. Broadwater County (Mont. 1988), [232 Mont. 487,] 759 P.2d 145. As the author of that case, I can not believe it has been used as the seminal case to destroy immunity provided by the Montana Constitution, but if the effect leads to this conclusion, then I vote to overrule the case in its entirety. To extend the act of a County Commissioner performing in his capacity as a Commissioner/legislator whose act was ratified by the legislative body to which he belonged, to a snow-shoveling janitor’s failure to protect the public by maintaining sidewalks in a safe condition is, as Justice Sheehy too mildly said, “unsupportable.” I say it is ludicrous and unbelievable.


author: JUSTICE HUNT

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. MICHAEL PAMBRUN, Defendant and Appellant.
    No. 84-564.
    Submitted Oct. 20, 1989.
    Decided Nov. 28, 1989.
    Rehearing Denied Dec. 29, 1989.
    783 P.2d 374.

      William Boggs, Missoula, Wendy Holton, Helena, for defendant and appellant.
    Marc Racicot, Atty. Gen., Helena, Robert L. Deschampa, III, County Atty., Missoula, for plaintiff and respondent.
   JUSTICE HUNT

delivered the Opinion of the Court.

A jury empaneled in the District Court of the Fourth Judicial District, Missoula County, found Michael Pambrun, defendant, guilty under § 45-5-401, MCA, of the offense of robbery. The District Court sentenced defendant to the Montana State Prison for a term of 40 years with credit for time served. Defendant was designated a dangerous offender for the purpose of parole eligibility and a persistent felony offender. Defendant appeals. We affirm.

The following issues are raised on appeal:

1. Whether the District Court erred in denying defendant’s motion to suppress testimony of his parole officer concerning statements defendant made to his parole officer while he was incarcerated.

2. Whether sufficient evidence supported defendant’s robbery conviction.

3. Whether the District Court’s delay in answering a written question from the jury during deliberations concerning the possibility of a hung jury prejudiced defendant’s right to a fair trial and, thus, constituted error.

On November 16, 1983, Eugene Medsker got into a game of stud poker, in which defendant was one of the participants, at the Oxford Bar and Cafe in Missoula, Montana. The game lasted from approximately 6:00 p.m. to approximately 9:00 p.m. Medsker bought $30.00 in chips and proceeded to collect more in winnings. Defendant bought chips in $20.00 increments throughout the evening but, as lady luck was not in his favor, he lost them all.

When the game broke up, Medsker cashed in his chips for $100.50 at the cashier window. As he was receiving his money, he noticed defendant standing a few feet away. He then put the cash in his wallet which, when added to the money already in his wallet, totaled approximately $141.00. He then went to the restroom. While in the restroom, he neither saw anyone nor heard anyone enter.

Medsker turned around and was twice struck in the face and knocked to the floor. The only recollection he had of his assailant before he lost consciousness was that the assailant was wearing blue jeans.

Shortly after 9:00 p.m., Ida Mae Dagen, a card dealer at the Oxford, observed defendant coming from the back area of the bar where the restrooms were located. He proceeded to the end of the bar where he wiped his hands on a bar rag, fixed the knot on the sweater that was draped over his shoulder, picked up two cans that were sitting on the bar, moved down the bar where he spoke with the bartender, set the cans down, and walked out the front door. Dagen did not observe anything unique or unusual about the defendant at that time except that the bar rag he wiped his hands on was dirty.

Shortly thereafter, Medsker regained consciousness and obtained assistance from those in the Oxford. Medsker had lacerations and bruises on his face, neck, and ribs and his nose was broken. His wallet containing $141.00 was missing.

At approximately 9:15 p.m., Officer Robert Charles of the Missoula Police Department arrived at the Oxford to investigate the incident. The officer interviewed Medsker, Oxford employees, and Oxford patrons. From the interviews, he suspected defendant and began a search of downtown bars for him. Officer Charles, who knew defendant liked to play poker, located defendant at the Trails West Bar where defendant was once again engaged in a losing poker game.

The officer observed that defendant’s shirt was spotted with blood, the knuckles on his right hand were skinned and bloody and he was wearing blue jeans. Defendant voluntarily accompanied the officer to the police station, where he was arrested and read his Miranda warning. At the time of his arrest, defendant had $70.80 on his person.

The next morning, defendant telephoned his parole officer and requested that his parole officer visit him in jail. That afternoon, defendant made his initial appearance and was again advised of his rights. At that time, he requested appointed counsel.

The parole officer did visit defendant in jail, where defendant relayed the events of the previous evening to him including the fact that defendant knew an old man he had been playing poker with had been assaulted at the Oxford. The parole officer reported defendant’s statements to the police.

On December 20,1983, defendant was charged by information with the offense of robbery in violation of § 45-5-401, MCA. On February 24, 1984, defendant filed a motion to suppress statements made to his parole officer during his incarceration. A hearing on the motion was conducted on February 29, 1984, and the motion was subsequently denied.

On March 8, 1984, a jury found defendant guilty of the offense of robbery. On April 30, 1984, defendant was sentenced to forty years in the Montana State Prison. He was designated a dangerous offender and a persistent felony offender.

The first issue raised on appeal is whether the District Court erred in denying defendant’s motion to suppress the testimony of his parole officer concerning statements made to him while defendant was incarcerated. Specifically, his parole officer testified that defendant told him that defendant had knowledge that an “old man he had been playing poker with had been assaulted.” The parole officer also testified that defendant relayed his activities of the night in question to the parole officer and denied committing the assault.

Defendant argued that the statements should have been suppressed since his parole officer did not advise him of his rights under Arizona v. Miranda (1966), 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694, prior to speaking with the defendant. He claimed that because he had asserted his right to counsel at his initial appearance and that because the parole officer was an agent of the state, that statements made to his parole officer in absence of counsel should not have been admitted at trial absent a Miranda warning. Defendant’s motion to suppress statements was denied by order of the court.

The District Court specifically noted that the prosecution proved by a preponderance of the evidence that defendant’s statements and admissions to his parole officer were voluntary and, as such, came under the purview of § 46-13-301(4), MCA, which requires such proof. Thus, a Miranda warning was not required. We agree.

As the court noted in its minutes and notice of ruling, it based its order on three grounds. First, defendant was given his Miranda warning twice within 24 hours preceding his conversation with his parole officer — once on November 16, 1983, at approximately 11:00 p.m., when he was. arrested, and again on November 17, 1983, at approximately 3:00 p.m., when he made his initial appearance. Second, defendant initiated the contact with his parole officer when he telephoned him from jail and requested a meeting. Third, the District Court noted that defendant’s statements were not the result of an interrogation but were conveyed freely and voluntarily.

Further, under State v. Higareda (Mont. 1989), [238 Mont. 130,] 777 P.2d 302, 46 St.Rep. 1146, we adopted the rationale set forth in State v. Terrovona (1986), 105 Wash.2d 632, 716 P.2d 295, which stated that a probation officer may testify where the probative value of the probation officer’s testimony outweighed the prejudicial effect and where the testimony is relevant. In the present case, defendant’s parole officer testified as to the series of events that led to defendants arrest as well as statements made to him by defendant. The defendant conveyed the statements to his parole officer freely and voluntarily after he had been twice advised of his Miranda rights. As we stated in Higareda, 777 P.2d at 305:

“While some prejudicial effect is inherent in this type of testimony, we cannot say that it outweighed the probative value.”

Such is the case here. The statements are relevant as an admission that he had knowledge of the assault at the Oxford. The District Court did not err in admitting the parole officer’s testimony concerning defendant’s statements.

The next issue raised on appeal is whether sufficient evidence supported defendant’s robbery conviction.

Defendant argues that the evidence was insufficient to sustain the conviction as the evidence was based on conjecture, suspicion and possibility. We disagree.

In State v. Hammer (Mont. 1988), [233 Mont. 101,] 759 P.2d 979, 986, 45 St.Rep. 1326, 1333, we stated that the standard of review in such a case is:

“[W]hether the evidence, when viewed in a light most favorable to the State, is sufficient for a rational trier of fact to have found the essential elements of the crime beyond a reasonable doubt.” (Citation omitted.)

Here, evidence was presented in the form of testimony and exhibits. Testimony included witnesses who saw that defendant was a participant in a poker game at the Oxford in which Medsker was also a player; that defendant gambled and drank for three hours until he went broke; that Medsker cashed out $100.50 worth of chips (which totaled approximately $141.00 when added to the money in his wallet); that Medsker went to the restroom where he was struck in the face, knocked to the floor, and robbed of his wallet by an unknown assailant wearing blue jeans; that defendant was seen in the restroom area about the same time Medsker was .robbed; that defendant then returned to the bar, wiped off his hands and exited the front door; and that defendant was wearing blue jeans.

Officer Robert Charles testified that he interviewed the patrons and employees of the bar and, based upon their statements, suspected defendant as the perpetrator. Officer Charles, who knew that defendant liked to play poker, found him playing poker at the Trails West Bar where defendant had $70.80 in cash and chips and had just lost about $60.00. He testified that when he found defendant, his knuckles on his right hand were skinned and bloody and that he noticed several spots of blood on defendant’s shirt.

Several pieces of physical evidence were introduced including the bloodstained clothing of both the defendant and Medsker. Human blood stains were found on defendant’s jeans and shirt. However, the bloodstains on his jeans were too small for analysis and the bloodstains on his shirt neither matched the defendant’s nor Medsker’s blood type. Human bloodstains were also found on the bar towel that defendant used to wipe his hands before he left the bar. The bloodstains were similar to the type found on defendant’s shirt. It was stipulated that bloodstains found on Medsker’s shirt were his.

In State v. Armstrong (1980), 189 Mont. 407, 616 P.2d 341, we upheld a conviction based on similar facts and circumstances. In that case, the homicide victim was robbed after cashing in $400.00 in chips he won in a poker game in which the defendant participated. The defendant cashed in $30.00 in chips. Shortly thereafter, when defendant was arrested, he had $319.02 in cash on his person and it was established he had spent $100 earlier that day. Bloodstains were found on several items belonging to defendant (the opinion did not state that the bloodstains matched any particular person’s blood type). Also, a bootprint similar in size and configuration to defendant’s boot was found in the area of the body.

In the present case, as in Armstrong, evidence presented was circumstantial in nature. In Armstrong, 616 P.2d at 346, we stated:

“[Circumstantial evidence is not always inferior in quality. The determination as to the sufficiency of circumstantial evidence to make a case for the jury and to sustain a conviction is one to be made upon all the facts and circumstances which are to be taken into consideration collectively. State v. DeTonancour (1941), 112 Mont. 94, 98, 112 P.2d 1065, 1067.”

Circumstantial evidence is sufficient to sustain a conviction where it is of such “quality and quantity as to legally justify a jury in determining guilt beyond a reasonable doubt . . State v. Weaver (1981), 195 Mont. 481, 495, 637 P.2d 23, 31. The evidence presented in this case, although circumstantial in nature, was sufficient to sustain a verdict of guilty.

The last issue raised on appeal is whether the District Court’s delay in answering a written question from the jury during deliberations concerning the possibility of a hung jury prejudiced defendant’s right to a fair trial and, thus, constituted error.

Here, the jury retired for deliberations at 11:52 a.m. At 5:32 p.m., a note from the jury was delivered to the court by the bailiff asking if a hung jury was possible in the case. As evidenced by the minutes and note of ruling, all counsel were immediately summoned by the court and the sheriff brought the defendant into chambers at approximately 6:20 p.m.

The following note was prepared by the court and approved by the defendant and all counsel:

“A hung jury is possible in any case, but you would have to deliberate much longer before we could determine that there is a hung jury in this case. A hung jury is possible only if there is no possibility of reaching a unanimous verdict.”

The minutes indicate that the note was taken to the jury by the bailiff but not delivered because the jury informed the bailiff that it had reached a verdict. The jury returned to court at 6:33 p.m. where it announced a verdict of guilty for the charge of robbery.

Defendant contends that the delay in the court’s response, in effect, coerced a guilty verdict and prejudiced the defendant’s right to a fair trail. Defendant argues that because the jury did not receive a prompt answer to its written query that it “must have supposed . . . that its question would be ignored.” Defendant’s contentions are speculative to say the least.

Section 46-16-503(2), MCA, provides:

“After the jury has retired for deliberation, if there is any disagreement among the jurors as to the testimony or if the jurors desire to be informed on any point of law arising in the cause, they must require the officer to conduct them into court. When the jurors are brought into court, the information requested may be given in the discretion of the court. If such information is given, it must be given in the presence of the county attorney and the defendant and his counsel.”

While the jury was not brought into court, the note drafted was prepared by the court and approved by defendant and all counsel. Defendant did not object to the manner in which the information was to be relayed nor did defendant request further inquiry concerning the time it took to draft and convey the note. The jury had already reached a verdict by the time a reply was drafted. There was no error.

Affirmed.

JUSTICES HARRISON, SHEEHY, McDONOUGH and WEBER concur.


author: JUSTICE BARZ

text:
    STATE MEDICAL OXYGEN AND SUPPLY, INC., a Montana corporation, Plaintiff and Appellant, v. AMERICAN MEDICAL OXYGEN CO., a Montana corporation, J.C. Lyndes, Gary Gomez, and Ronald Wright, Defendants and Respondents.
    No. 89-236.
    Submitted on Briefs Oct. 13, 1989.
    Decided Nov. 28, 1989.
    782 P.2d 1272.

      P. Mars Scott, Mulroney, Delaney and Scott, Missoula, for plaintiff and appellant.
    Michael G. Moses, Moses Law Firm and Philip P. McGimpsey, Billings, for defendants and respondents.
   JUSTICE BARZ

delivered the Opinion of the Court.

Plaintiff, State Medical Oxygen and Supply, Inc. (State Med.), appeals the January 19, 1989 decision of the District Court of the Eighth Judicial District, Cascade County, finding that plaintiff’s nondisclosure agreement violated § 28-2-703, MCA, and granting summary judgment in favor of defendants — American Medical Oxygen Co. (American Med.), J.C. Lyndes, Gary Gomez and Ronald Wright. We affirm.

The issues raised on appeal are:

1. Whether plaintiffs “Agreement of Employee not to Disclose Trade Secrets or Customer Lists of State Medical Supply, Inc.” violates § 28-2-703, MCA, as being a contract that restrains the exercise of a lawful profession, trade or business of any kind; and

2. Whether the District Court erred by granting defendants’ motion for summary judgment.

Plaintiff, State Med., is a Montana corporation engaged in the business of supplying oxygen and allied health care to patients in their homes and in hospitals. Upon State Med.’s formation in the early part of 1984, the directors of State Med. had its employees sign an agreement entitled, “Agreement of Employee not to Disclose Trade Secrets or Customer Lists of State Medical Supply, Inc.” This Agreement provides that:

“The undersigned, an employee of State Medical Supply, Inc., in consideration of his employment, hereby agrees not, at any time or in any manner, either directly or indirectly, to divulge, disclose or communicate to any person, firm, or corporation, in any manner whatsoever, any information concerning any matters affecting or relating to the business of State Medical Supply, Inc.’s trade secrets and/or customer lists. Including without limiting the above, the employee agrees not to divulge any of State Medical Supply, Inc.’s customers, the prices it obtains or has obtained from the sale of, or at which it sells or has sold, its products, or any other information concerning the business of State Medical Supply, Inc., its manner of operation, its plans, processes, or other data without regard to whether all of the foregoing matters will be deemed confidential, material, or important, the parties hereby stipulating that as between them, the same are important, material and confidential and gravely affect the effective and successive conduct of the business of State Medical Supply, Inc., and State Medical Supply, Inc.’s good will, and that any breach of the terms of this agreement shall be termed and considered a material breach.
“This agreement shall remain in full force and effect during the undersigned employment and continuing for all time thereafter.
“A violation of this agreement will entitle State Medical Supply, Inc., to seek damages and/or injunctive relief or any other remedy at law against the undersigned and the undersigned agrees to pay State Medical Supply, Inc.’s attorney’s fees in prosecuting any breach of this agreement.”

Several, if not all, of the employees of State Med. signed this Agreement.

Three State Med. employees — Link, Fatz and Tope — became unhappy with their jobs at State Med. and began to seek employment elsewhere. On August 9, 1985, these employees quit their jobs at State Med. and immediately began working for American Med., a Montana corporation also engaged in the business of supplying oxygen and allied health care to patients in their homes and in hospitals. When Link left State Med.’s employ, he memorized his customer route and offered his customers an opportunity to switch from State Med. to American Med. Most of Link’s regular customers made the switch.

On March 1, 1988, this Court decided State Medical Oxygen & Supply, Inc. v. American Medical Oxygen Co. (Mont. 1988), [230 Mont. 456,] 750 P.2d 1085, 45 St.Rep. 349, which addressed issues initially raised by State Med. This Court affirmed in part, reversed in part and remanded for further proceedings, but did not address the issue of the nondisclosure agreement because the District Court had not yet ruled on it. State Medical Oxygen Supply, Inc., 750 P.2d at 1089, 45 St.Rep. at 355. On October 18, 1988, the parties stipulated to the dismissal with prejudice of defendant Link from this action. On November 30, 1988, the remaining defendants — American Med., Lyndes, Gomez and Wright — renewed their motion for summary judgment, asserting again that the nondisclosure agreement was void pursuant to § 28-2-703, MCA.

On January 19, 1989, the District Court granted defendants’ motion for summary judgment, and stated that the nondisclosure agreement between State Med. and its employees not to divulge trade secrets or customer lists,violated § 28-2-703, MCA, and therefore the court found it against'public policy and unenforceable as a matter of law. The District Court certified this January 19, 1989 order as a final judgment under Rule 54(b), M.R.Civ.P, State Med. appeals.

The first issue that will be addressed by this Court is whether plaintiffs “Agreement of Employee not to Disclose Trade Secrets or Customer Lists of State Medical Supply, Inc.” violates § 28-2-703, MCA.

Section 28-2-703, MCA, codifies Montana’s public policy regarding contracts that restrains the exercise of a lawful profession, trade or business of any kind. This statute provides that “[a]ny contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind, otherwise than is provided for by 28-2-704 or 28-2-705, is to that extent void.” The two exceptions allow parties to agree that upon either the sale of goodwill of a business or the dissolution of a partnership, one or more of the parties will refrain from carrying on a similar business within a narrow designated area. Sections 28-2-704 and -705, MCA.

Prior to Dobbins, DeGuire & Tucker v. Rutherford, MacDonald & Olson (1985), 218 Mont. 392, 708 P.2d 577, this Court recognized a difference between covenants incident to an employment contract and those regarding the trade of a business or property. J.T. Miller Co. v. Madel (1978), 176 Mont. 49, 52-53, 575 P.2d 1321, 1323. When presented with a covenant not to compete that involved trade, this Court applied a three part test by which to discern reasonable covenants from unreasonable restraints. Under this, test, a covenant not to compete is reasonable if it is (1) limited in operation either as to time or place; (2) based upon some good consideration; and (3) affords reasonable protection for and not impose an unreasonable burden upon the employer, the employee, or the public. O’Neill v. Ferraro (1979), 182 Mont. 214, 218-19, 596 P.2d 197, 199. In Dobbins, this Court determined that this test should also be applied to restrictive covenants' that are found within employment contracts. Dobbins, 218 Mont. at 396-97, 708 P.2d at 580.

In the present case, State Med. has the burden of showing that its agreement does not violate § 28-2-703, MCA. First American Ins. Agency v. Gould (1983), 203 Mont. 217, 223, 661 P.2d 451, 454. State Med. did not assert nor prove that the sale of goodwill of a business or the dissolution of a partnership occurred. Therefore, neither of the statutory exceptions — § 28-2-704 nor -705, MCA — applies. State Med.’s agreement also does not pass the test of reasonableness. As stated in Dobbins and O’Neill, three essential things are required for an agreement to be considered reasonable. State Med.’s agreement, however, did not limit the restrictions as to either time or place and therefore did not meet the first essential criterion. We therefore do not find a need to proceed any further to determine whether the covenant meets the remaining two criteria, Although State Med. cites Dobbins, it does not argue that its agreement meets the three criteria. Instead, State Med. merely argues that the District Court erred because it did not make findings of fact or conclusions of law. However, Rule 52(a), M.R.Civ.P. and previous decisions do not require a district court to set forth findings of fact or conclusions of law when ruling on a summary judgment motion. Lewis v. State Dept. of Revenue (1984), 207 Mont. 361, 375, 675 P.2d 107, 114; Downs v. Smyk (1979), 185 Mont. 16, 19, 604 P.2d 307, 309.

State Med. also argues that the District Court confuses its contract, which they assert is a contract not to disclose trade secrets and/or customer lists with a contract that restrains the exercise of a lawful profession. State Med. then apparently attempts to persuade this Court that its agreement is not an employment contract and therefore it is not in violation of § 28-2-703, MCA. We disagree. Section 28-2-703, MCA, states that any contracts that restrain anyone from exercising a lawful profession, trade, or business is void, The statute does not limit the prohibition to employment contracts. In Dobbins, this Court erased any previously recognized differences between the treatment of trade and employment contracts which contain restrictive covenants. Therefore, State Med.’s attempts at distinguishing its agreement as something other than an employment contract is not relevant to the issue presented on appeal. In light of the above, the District Court did not err in finding that State Med.’s agreement violated § 28-2-703, MCA, and thus finding the agreement void as against public policy and unenforceable as a matter of law.

The second issue raised on appeal is whether the District Court erred by granting defendants’ motion for summary judgment.

The party seeking summary judgment is entitled to judgment only when no genuine issue exist as to any material facts and the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P. The party moving for summary judgment has the initial burden of establishing that a genuine issue of material fact does not exist. Once this is established, the burden shifts to the party opposing the motion to demonstrate otherwise. Rumph v. Dale Edwards, Inc. (1979), 183 Mont. 359, 365-66, 600 P.2d 163, 167.

In the present case, the District Court ruled that State Med.’s agreement was in violation of § 28-2-703, MCA. The record demonstrates that defendants established that no genuine issue of material facts existed. The agreement on its face violates the statute and the law regarding restrictive covenants. The burden then shifted to State Med. State Med. attempted to rebut this evidence by bringing in extraneous information regarding tortious interference, which is the underlying basis for their amended complaint. The facts surrounding tortious interference are irrelevant to the sole issue on appeal of whether the nondisclosure agreement was in violation of § 28-2-703, MCA.

State Med. also argues that affidavits submitted by their employees puts into question whether or not their agreement was an employment contract. As we stated previously, any contracts, not just employment contracts, are in violation of § 28-2-703, MCA, if they restrain anyone from exercising a lawful profession, trade or business. In addition, the same standard of reasonableness applies to a restrictive covenant regardless of whether it is found within a trade contract or an employment contract. Therefore, evidence regarding whether the agreement was an employment contract is irrelevant to the question of whether it violated § 28-2-703, MCA. The District Court therefore did not err in granting defendants’ motion for summary judgment.

Affirmed.

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