text:
    STATE OF MONTANA, Plaintiff and Respondent, v. MARK FRENCH, Defendant and Appellant.
    No. 87-492.
    Submitted on Briefs June 22, 1988.
    Decided Aug. 23, 1988.
    760 P.2d 86.

      Gary E. Wilcox, Billings, for defendant and appellant.
    Mike Greely, Atty. Gen., Betsy Brandborg, Asst. Atty. Gen., Helena, Harold Hanser, Co. Atty., David W. Hoefer, Deputy Co. Atty., Billings, for plaintiff and respondent.
   MR. JUSTICE HUNT

delivered the Opinion of the Court.

Mark French, the defendant, was convicted of three counts of sexual intercourse without consent by jury trial in the District Court of the Thirteenth Judicial District, Yellowstone County. Defendant appealed. We affirm.

The issues raised on appeal are:

1. Did the District Court err in denying defendant’s motion for a mistrial?

2. Did sufficient evidence of penetration exist to sustain defendant’s conviction of sexual intercourse without consent?

3. Did the District Court err in denying defendant’s motion for a continuance of the trial?

On July 7, 1987, Mark French, the defendant, was convicted under Section 45-5-503, MCA, of three counts of sexual intercourse without consent arising out of encounters that occurred over a five year period with his minor stepdaughter. French was sentenced to forty years for each count with the sentences to be served concurrently.

French began living with the victim’s mother in December 1980 when the victim was two years old. French married the victim’s mother in August 1981 and adopted the victim in December 1981. French lived in the same household with the victim until November 1985 when French and the victim’s mother separated.

The victim attended first grade in Billings during the 1985-86 school year. The victim’s first grade teacher noticed unusual behavior from the victim and eventually referred the victim to a school counselor. Through meetings with the school counselor, the victim disclosed the encounters that occurred with French. At trial, the victim testified that while French was living with the family, but while her mother was not at home, French would touch her vagina and bottom with his hands and his penis. She further testified that he would place his penis in her mouth and ejaculate.

Supporting the victim’s testimony at trial were the testimonies of the school counselor, who holds a Master’s degree in counseling and a Bachelor’s degree in education; a medical doctor who conducted a physical examination of the victim; the victim’s mother; the victim’s grandmother; and the victim’s teacher. The school counselor, who met with the victim once or twice a week beginning in January 1986, testified that the victim appeared traumatized or abused. The counselor based this opinion on the victim’s reaction when inquiring about French’s behavior and anything he might have done to her and what the victim was eventually able to tell her about the manner in which French sexually abused her. When inquiring about French, the victim’s reaction included assuming a fetal position, rocking, crying, and refusing to allow anyone to touch her. The medical doctor testified that the results of the victim’s physical exam was consistent with recurrent anal penetration and that while the vaginal opening was normal size for a girl of that age, the results did not preclude penetration of the perineal area or the vagina.

The victim’s grandmother testified that she witnessed French behave peculiarly one afternoon when he came to pick the victim up after the grandmother had been babysitting. Specifically, the grandmother testified that French had been drinking and went to wake the victim from her nap. The grandmother went to check on them and saw French lying across the bed with the victim on top of him giving her a long kiss with his eyes closed while rolling back and forth. French stopped when he noticed the grandmother and then took the victim to the living room area, and apparently believing he was unobserved, kissed her some more, pulled her panties down, patted her bottom, and told her she had a “cute little butt.”

The victim’s mother testified to occasions when French and she were in bed and French would call her by the victim’s name. She further testified that the victim would complain about soreness in her genitalia and rectal areas but did not want her mother to tell French about her complaints. The victim’s teacher testified that the victim displayed unusual behavior for a six year old, in that she was very shy, jumpy, skittish and masturbated frequently. The teacher further testified that during one teaching session when the teacher was focusing on “warm fuzzies,” things that people do to make you feel good inside, and “cold pricklies,” things that people do to make you feel bad or to hurt you, that the victim, who was usually shy and reserved in the classroom, blurted out that her dad gave her cold pricklies every time her mom left the house.

French denied having any type of sexual intercourse with his minor stepdaughter. The jury, after hearing all the testimony, found French guilty of all three counts of sexual intercourse without consent with the victim. French appeals the conviction, raising three issues.

The first issue French raises is whether the District Court erred in denying French’s motion for a mistrial.

The District Court, after considering the circumstances, is in the best position to determine whether the responses by the school counselor were bases for a mistrial. When a court exercises its power to nullify a jury’s verdict by granting a motion for a mistrial, this “power ought to be used with the greatest caution, under urgent circumstances, and for very plain and obvious causes; . . .” State v. Close (Mont. 1981), [191 Mont. 229,] 623 P.2d 940, 945-46, 38 St.Rep. 177, 183 (quoting United States v. Perez (1824), 22 U.S. (9 Wheat) 579, 580, 6 L.Ed. 165). This Court’s function on appeal is to determine whether the District Court abused its discretion by not granting a mistrial. Close, 623 P.2d at 946, 38 St.Rep. at 183.

French argues that the District Court should have granted his motion for a mistrial. French bases this argument on the school counselor’s responses to questions by the prosecutor on whether the counselor believed the now eight year old victim was telling the truth. The three questions by the prosecutor that French points to are:

“Q. And so the fact that she would tell you things, and then later deny it, did not imply to you that she was lying? A. I have never been convinced that she has ever lied to me.

“Q. And so what we really need to get down to is: Do you feel that most of what she said was the truth? A. There is no question in my mind that what she told me was the truth.

“Q. Now, did you believe that she was responding accurately or not embellishing when she answered those questions?”

French objected to the last of these three questions addressed to the school counselor.

To support his argument, French relies upon State v. Brodniak (1986), [221 Mont. 212,] 718 P.2d 322, 43 St.Rep. 755 to argue that this Court does not allow an expert witness to testify on whether the expert believes that the witness is telling the truth. In Brodniak, we held that an expert’s testimony explaining rape trauma syndrome is permissible, but that the expert could not testify as to whether she believed the witness was telling the truth. Brodniak, 718 P.2d at 327-29, 43 St.Rep. at 758-63. French therefore argues that this is a basis for granting his motion for a mistrial. We disagree.

French fails to acknowledge our more recent decision, State v. Geyman (1986), [224 Mont. 194,] 729 P.2d 475, 43 St.Rep. 2125. In Geyman we addressed for the first time the admissibility of expert testimony when a child is subject to sexual assault. After assessing the relevant literature and other jurisdictions’ treatment of the subject, we held that “expert testimony is admissible for the purpose of helping the jury to assess the credibility of a child sexual assault victim.” Geyman, 729 P.2d at 479, 43 St.Rep. at 2131. A child’s reaction to being subject to sexual assault of any form may include responses most adults, unfamiliar with the subject, find peculiar. A child may, for example, fail to disclose the defendant’s criminal sexual acts immediately and may also oscillate between admitting the abuse and denying it. An expert witness’s testimony merely aids the jurors in assessing a child’s credibility under such abusive circumstances, but in no way impinges upon the jury’s obligation to decide ultimately the victim’s credibility. Geyman, 729 P.2d at 479-80, 43 St.Rep. at 2131.

In light of the recent case law, we hold that the District Court did not abuse its discretion by denying French’s motion for a mistrial based on the school counselor’s opinion as to whether the eight year old victim was telling the truth.

The second issue French raises on appeal is whether sufficient evidence of penetration exists to sustain intercourse without consent.

In arguing that insufficient evidence exists to support the jury’s verdict, French notes that under Count I he was charged with having vaginal intercourse with the victim, yet the physician did not testify conclusively that the victim was subject to recurrent internal and complete vaginal penetration. French then argues, based upon the foregoing, that “no evidence whatsoever” supported the jury’s verdict as to Count I and therefore that the evidence supporting Counts II and III should also be found insufficient. We again disagree.

French fails to acknowledge the current statute defining sexual intercourse and other evidence in the record. Sexual intercourse, as used in Section 45-5-503, MCA, includes penetration, however slight, of the vulva. Section 45-2-101(61), MCA. Complete internal vaginal intercourse is not necessary. The record reveals that the victim frequently complained of soreness in her perineal area, the physician testified that the area was red and would not preclude complete internal vaginal intercourse nor perineal rubbing, and further, the victim testified that French tried to put his penis in her vagina.

When determining whether sufficient evidence supports the jury’s verdict on appeal, this Court will view the evidence in the light most favorable to the prosecution, and will uphold the verdict if a reasonable mind could have found the essential elements of the crime beyond a reasonable doubt. State v. Oman (1985), [218 Mont. 260,] 707 P.2d 1117, 1120, 42 St.Rep. 1565, 1568-69; State v. A.D.M. (1985), [216 Mont. 419,] 701 P.2d 999, 1000, 42 St.Rep. 916, 918. In light of the statutes and the evidence, we hold that sufficient evidence exists to allow the jury to conclude that French performed vaginal intercourse on the victim.

French’s half-hearted argument that Counts II and III, which are based upon his performing anal and oral intercourse on the victim, should also be found insufficient because “no evidence whatsoever” supported his conviction for vaginal intercourse is without substance. Besides finding sufficient evidence to support his conviction for vaginal intercourse, the record also contains sufficient evidence to support both Counts II and III. Such evidence includes the victim’s own testimony that French performed anal and oral intercourse on her, the physician’s testimony that the results of the victim’s physical examination were consistent with recurrent anal penetration, and the school counselor’s as well as the mother’s and grandmother’s testimonies.

A conviction of sexual intercourse without consent is sustainable based entirely on the uncorroborated testimony of the victim. State v. Lamping (1988), [231 Mont. 288,] 752 P.2d 742, 746, 45 St.Rep. 616, 620; State v. Maxwell (1982), 198 Mont. 498, 503, 647 P.2d 348, 351. While the victim’s testimony alone is sufficient in this case, it is nonetheless supported by other evidence. We therefore hold that sufficient evidence exists to allow the jury to conclude that French performed anal and oral intercourse on the victim.

The last issue French raises on appeal is whether the District Court erred in denying his motion for a continuance of the trial.

French’s motion for a continuance is based upon French’s desire to undergo a psychological evaluation. French argues that no one would have been prejudiced by granting the motion for a continuance, stating that the evidence indicated he had not seen his children since the fall of 1986 and no evidence existed that he had engaged in any similar activity since 1986. In support of the motion, French argues that he would suffer prejudice as a result of the denial of the motion because he did not have time to explore the possibility of utilizing the psychologist’s testimony. Once again, we disagree.

The controlling statute to determine whether the District Court should have granted French’s motion for a continuance is Section 46-13-202(3), MCA. This statute states:

“All motions for a continuance are addressed to the discretion of the trial court and shall be considered in the light of the diligence shown on the part of the movant. This section shall be construed to the end that criminal cases are tried with due diligence consonant with the rights of the defendant and the state to a speedy trial.” On appeal, this Court will not reverse the District Court unless the court clearly abused its discretion. State v. Walker (1987), [225 Mont. 415,] 733 P.2d 352, 355, 44 St.Rep. 363, 366.

This Court has consistently held that before a motion for a continuance is granted to allow the movant more time to obtain evidence, the movant must have shown the exercise of due diligence in procuring the desired evidence. Walker, 733 P.2d at 354, 44 St.Rep. at 365-66; State v. Lance (Mont. 1986), [222 Mont. 92,] 721 P.2d 1258, 1269-70, 43 St.Rep. 1086, 1097-98; State v. Van Natta (1982), 200 Mont. 312, 321, 651 P.2d 57, 61. The legislature further requires that “[a] motion to postpone a trial on grounds of the absence of evidence shall only be made upon affidavit showing the materiality of the evidence expected to be obtained and that due diligence has been used to procure it.” Section 25-4-501, MCA. French has done neither.

The record reveals that French’s trial date had already been rescheduled twice. The April trial date was rescheduled after the District Court granted French’s motion for a continuance because he had inadequate time to prepare for trial. The June trial date was vacated by the court on its own motion and rescheduled for July 6, 1987. French’s request, informally made a week before the trial, would have reset the trial date a third time.

French offers no evidence or argument that he exercised due diligence in pursuing a psychological evaluation. The trial date had already been rescheduled once at the request of French, which allowed him three more months to prepare for trial. No formal affidavit was submitted as required by Section 25-4-501, MCA.

In granting a motion for a continuance, the statute, Section 46-13-202(3), MCA, clearly allows the District Court to exercise its own discretion after considering the diligence put forth by the movant. In. light of the minimal diligence exercised by French, we hold that the District Court did not abuse its discretion by denying French’s second motion for a continuance so as to allow French to undergo a psychological evaluation.

Affirmed.

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


source: Caselaw Access Project

author: MR. CHIEF JUSTICE TURNAGE

license: Public Domain

text:
    LITTLE HORN STATE BANK, Plaintiff and Appellant, v. THOMAS J. MILL and Sharon Mill, Defendants and Respondents.
    No. 88-72.
    Submitted on Briefs June 22, 1988.
    Decided Aug. 23, 1988.
    760 P.2d 91.
    Bert W. Kronmiller and James E. Torske, Hardin, for plaintiff and appellant.
    Moulton, Bellingham, Longo & Mather, Ward Swanser, Billings, for defendants and respondents.
   MR. CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Plaintiff Little Horn State Bank appeals the September 8, 1987, bench judgment of the Thirteenth Judicial District Court, Big Horn County. After trial, the court dismissed the Bank’s action on its merits. The court concluded that defendants Thomas and Sharon Mill had a superior claim to the heating system and exhaust fan which the Mills removed from a building mortgaged by a third party to the Bank. We affirm.

The players in the proceedings that gave rise to this case are appellant, Little Horn State Bank (Bank), respondents, Thomas J. Mill and Sharon Mill (Mills), Gary C. Davis and Patricia C. Davis (Davises) and Ruf Cut, Inc., a corporation (Ruf Cut), in which Mills were the sole shareholders.

Facts relevant to this case reveal that on April 28, 1980, Mills gave to Bank a real estate mortgage on property in Big Horn County, described in Certificate of Survey 293, to secure a loan of $81,516 for the purpose of enabling Mills to construct a building thereon to be used as a roller skating facility.

On July 7, 1980, Thomas J. Mill gave the Bank a security agreement, evidenced by a financing statement, to secure a loan of $30,000 for the purpose of enabling Mills to acquire personal property to be used in the roller skating facility. The security agreement covered personal property, including the Co-Ray Vac heating system and exhaust fan installed in the building located on the real property described in Certificate of Survey 293. The heating system was installed by hanging it to the ceiling of the building by a series of “J” hooks and suspended by wires. The exhaust fan was put in place by four lag screws. On December 31, 1981, Mills paid off the $30,000 loan.

Sometime prior to April 13, 1984, the Mills were experiencing financial difficulty in meeting their obligations under the April 28, 1980, mortgage and were seeking a buyer for the roller skating facility. The Bank agreed to finance the Davises as buyers.

On April 13, 1984, the following events occurred and were concluded in the office of a Hardin attorney, who drafted the relevant documents as attorney for the Bank and the Mills. The record does not disclose if the Davises were represented by an attorney. These documents were all filed or recorded in Big Horn County in the following sequence:

1. A financing statement, Davises as debtors and Mills as secured parties, listing personal property, including the heating system and exhaust fan.

2. Deed to the real property described in Certificate of Survey 293 (the roller skating building), Mills as grantors and Davises as grantees.

3. Satisfaction of Mills/Bank mortgage of April 28, 1980.

4. Termination of financing statement dated July 7, 1980, Thomas J. Mill to the Bank, which had been paid off December 31, 1981.

5. Real estate mortgage dated April 13, 1984, mortgaging the property described in Certificate of Survey 293 (the roller skating building) in the amount of $101,911.05, Davises as mortgagors and the Bank as mortgagee.

On the same date, April 13, 1984, the Davises and Mills entered into two agreements:

1. Document entitled “contract for deed,” Ruf Cut as seller (the corporation in which Mills are sole stockholders) and Davises as buyers. In this document Mills agreed to sell and buyers agreed to buy for $25,000, with $8,000 as a down payment and the balance of $17,000 plus interest to be paid no later than April 13, 1986, real property adjacent to the real property described in Certificate of Survey 293 (the roller skating building but separate therefrom) and personal property used by Mills in the roller skating rink enterprise. The “contract for deed” referenced personal property described in a schedule attached thereto; no schedule was attached to the copy introduced in evidence at the trial. However, in the financing statement dated April 13, 1984, a detailed specific list of personal property was contained, and we construe this document and the “contract for deed” together.

2. Financing statement filed April 13, 1984, in Big Horn County, Mills the secured parties and Davises debtors. This document contains a detailed list of personal property sold by Mills to Davises relating to the roller skating business and specifically includes the said heating system and exhaust fan. The place of filing is not an issue in this case.

The “contract for deed” of April 13, 1984, provided that sale documents, including a deed to the real property and a bill of sale for the personal property, were to be held in escrow at the office of the Hardin attorney who had drafted them and that in the event Davises failed to pay the purchase price, the deed and bill of sale were to be redelivered to Mills as sellers.

The “contract for deed” further provided that in the event of Davises’ default, after notice, Mills had the right to terminate the contract and Davises were to return possession of the real and personal property to Mills and Davises as buyers would have no further interest therein.

Davises defaulted, notice was given, and on May 14, 1986, Davises delivered possession of the real and personal property under the “contract for deed” to Mills.

On July 7, 1986, Davises and the Bank entered into an agreement and release whereby Davises agreed to deed and did deed the real property described in Certificate of Survey 293 (the roller skating building and land where it is situated) in consideration of the Bank satisfying the mortgage debt, then amounting to $103,256.81.

In May 1986 Mills offered to sell the heating system and exhaust fan to the Bank. The Bank declined the offer and advised Mills that the Bank claims the property as fixtures pursuant to its mortgage of April 13, 1984, given to them by Davises. Mills took possession of the heating system and exhaust fan, removing them from the roller skating facility, and the Bank sued.

We state the determinative issue in this case to be: Did the District Court err in concluding that the claim of the Bank under its mortgage of April 13, 1984, to the heating system and fan as fixtures in the mortgaged premises was inferior and subject to the right of Mills in this property?

The answer to this issue is dependent upon who owned the personal property in dispute at the time Davises gave their mortgage of April 13, 1984, to the Bank.

The District Court findings of fact and conclusions of law, in their essential part, concluded that Mills were at all times the owners of the personal property and never transferred ownership to Davises. The District Court concluded that the Bank obtained no more interest in the personal property than the interest held by Davises. We agree and affirm the District Court’s judgment for the respondents.

The record discloses that the Bank, at the time it loaned Mills the money to acquire the disputed personal property, secured the loan by a security agreement further evidenced by a financing statement. When Mills paid this loan, they were the owners of the personal property, unencumbered.

The undisputed testimony of Thomas J. Mill is that the Mills and the Davises intended the disputed personal property to remain as such and that it was not intended to be a fixture in the building purchased by the Davises from Mills. This testimony is further supported by the “contract for deed” and financing statement executed by Mills and Davises wherein the personal property is bargained for and sold separate from the roller skating building and real property deeded to Davises and upon which the Bank’s mortgage was taken.

The interest that Davises may have had to the disputed personal property on April 13, 1984, and which may have been .mortgaged to the Bank was that derived from a contract for deed. Before such interest could ripen into an interest the Bank may claim under its mortgage to be superior to the interest of Mills, an essential condition precedent had to occur — Davises would have had to complete payment to Mills under the terms of their purchase contract. They failed to do so, and with this failure, any claim of the Bank as superior to Mills also fails.

Our holding on this issue resolves this case, and it is unnecessary to discuss any other issues raised by appellant.

Affirmed.

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


author: MR. JUSTICE GULBRANDSON

text:
    ONATA FRATES, Plaintiff and Respondent, v. EDWARD D. JONES & CO., a limited partnership. Lawrence Sobol its general partner and Larry Richardson, Defendants and Appellants.
    No. 88-120.
    Submitted on Briefs July 14, 1988.
    Decided Aug. 23, 1988.
    760 P.2d 748.

      Moulton, Bellingham, Longo & Mather, Doug James, Billings, for defendants and appellants.
    Howard Strause and Lawrence Anderson, Great Falls, for plaintiff and respondent.
   MR. JUSTICE GULBRANDSON

delivered the Opinion of the Court.

This is an appeal and alternative application for Writ of Supervisory Control by appellant/relators Edward Jones and Co., et al. (Jones) from a January 7, 1988, order of the Thirteenth Judicial District Court, Yellowstone County, denying Jones’ motion to compel arbitration of a claim filed by plaintiff/respondent Onata Frates (Frates). Individuals named in the suit are Lawrence Sobol, a general partner of Jones, and Larry Richardson (Richardson), a registered representative of Jones. We affirm.

Frates filed a complaint on April 21, 1987 against Jones. In the claim, Frates presented eight counts of liability against Jones alleging breach of fiduciary duty; enforcement of an oral promise; fraud; constructive fraud; bad faith; negligent misrepresentation; negligence; and violations of the Montana Securities Act. These claims are all based on the purchase of limited partnership interests by Frates and her deceased husband through their accounts with Jones in 1982, 1983, and 1984.

Jones presents the following issues for our consideration:

1. Whether the District Court’s order denying Jones’ motion to compel arbitration is an appealable order?

2. Whether the District Court erred by following Montana law rather than Missouri law when it construed the arbitration agreement?

3. Did the District Court exceed its jurisdiction when it considered the issues of fiduciary relationship and fraud in the procurement of the agreement signed by Frates?

4. Did the District Court err as a matter of law in failing to compel arbitration?

Frates began purchasing securities with her husband, who died in 1985, from Jones in May of 1981. The Frates opened a joint cash account and began dealing with Richardson, an individual broker-dealer of Jones. After a number of successful investments, Mr. Frates complained that the couples’ income taxes were too high and therefore they began delving into certain tax-advantage investments. In addition to securities not at issue in this case, Mr. and Mrs. Frates invested $58,000 between October 12, 1982 and July 23, 1984 through their Jones’ account in Petro-Lewis and NRM securities. The securities that are the subject of the complaint were limited partnership interests known as Petro-Lewis (purchased December, 1982), NRM 82-B (purchased December, 1982), NRM 83-B (purchased June, 1983), and NRM 84-C (purchased July, 1984).

Prior to making each of the investments, the Frates received prospectus statements on the securities they purchased. Further, according to an affidavit filed by Richardson, they were also advised of the risk associated with the investments. The Frates signed a PetroLewis and NRM application form acknowledging receipt of the prospectus and representing that they understood the risks associated with the investments.

After Eugene Frates’ death in 1985, Mrs. Frates continued to invest through her account at Jones. In March of 1986, she contacted Richardson because she wanted to borrow money against the investments for the purpose of making loans to her son. Mrs. Frates, then age 78, was advised by Richardson to open a “margin account.” Mrs. Frates opened the margin account by executing a document entitled “Edward D. Jones & Co. ‘Full Service Account’ Customer Loan Agreement and Loan Consent.” Richardson presented the agreement to her but she stated in her affidavit that she did not read the agreement.

“[N]o one asked me to read the agreement, no one encouraged me to read the agreement, no one read the agreement to me, no one told me the importance of the agreement, nor did anyone explain what was in the agreement.”

Richardson claims that he “reviewed” the agreement with Frates but he does not claim that he discussed any of the 19 paragraphs. No further investments were made by Mrs. Frates after the margin account was opened.

Paragraphs 16 and 17 are important to this case. Those clauses read:

“16. In the event at [sic] any claim or controversy between you and the undersigned arising under the federal securities laws, you have the right to submit such matter before a judicial forum. Any other controversy arising out of or relating to my accounts shall be settled by arbitration in accordance with the rules, then in effect, of the National Association of Securities Dealers, Inc. or the Boards of Directors of the New York Stock Exchange, Inc. and/or the American Stock Exchange, Inc. as I may elect. If I do not make such an election by registered mail addressed to you at your main office within 5 days after demand by you that I make such election, then you may make such election. Judgment upon any award rendered by the arbitrators may be entered in any court having jurisdiction thereof.

“17. This agreement and its enforcement shall be governed by the laws of the State of Missouri and its provisions shall be continuous; shall cover individually and collectively all accounts which the undersigned may open or reopen with you and shall insure [sic] to the benefit of your present organization, and any successor organization, . . . and shall be binding upon the undersigned and/or estate, executors, administrators and assigns of the undersigned.” (Emphasis added.)

Subsequent to the signing of the agreement, the limited partnership interests, which were based on oil and gas development, declined in value. Richardson never informed Frates of the decrease in value of the investments until after her husband had died. Presently, the investments have no value.

The arbitration clause was discovered by Jones when responding to Frates’ initial discovery requests. Jones served Frates with a demand for arbitration but she refused to consent. On September 28, 1987, Jones filed a motion in the District Court requesting dismissal of the claim or, in the alternative, to stay all litigation pending outcome of compelled arbitration. In its memorandum and order dated January 7, 1988, the District Court stated that the motion was denied because of the possibility of fraud or constructive fraud and because of the express language of the contract. The court stated:

“The language of the agreement itself refers to present and future transactions . . . Paragraph (17) states: ‘[t]his agreement . . . shall cover ... all accounts which the undersigned may open or reopen with you . . .’ which clearly refers to future transactions and not those occurring prior to the date of the agreement. Reading the document as a whole, the provisions apply to the margin account and future transactions only.”

From this order, defendants appealed. In addition, they have requested a writ of supervisory control in the alternative if it is determined that the court’s order is nonappealable.

Frates initially argues that the order is nonappealable because it is “unauthorized under the list of appealable orders set out in Rule 1(b), M.R.App.P.” Frates argues that the order denying the motion to compel arbitration is a motion to dismiss “which is in reality [because of reliance on matters outside the pleadings] a motion for summary judgment.” Therefore, Frates relies on the rule that orders denying summary judgment are not appealable. Nutter v. Permian Corp. (Mont. 1986), [224 Mont. 72,] 727 P.2d 1338, 1340, 43 St.Rep. 2027, 2028.

Section 27-5-324(1)(a), MCA, permits appeal from “an order denying an application to compel arbitration.” We read this statute to allow appeal when a district court denies a motion to compel arbitration. Further, under federal law, 28 U.S.C. Section 1292(a)(1) permits appeal of an order denying arbitration as an interlocutory appeal. See Pierson v. Dean, Witter, Reynolds, Inc. (7th Cir. 1984), 742 F.2d 334, (holding issue of arbitration was appealable as an interlocutory matter, 28 U.S.C. Section 1292(a)(1)); Ford v. Shearson Lehman/American Express, Inc. (Cal. 1986), 180 Cal.App.3d 1011, 225 Cal.Rptr. 895.

In Passage v. Prudential-Bache Securities, Inc. (Mont. 1986), [223 Mont. 60,] 727 P.2d 1298, 43 St.Rep. 1532, this Court held that a state court “clearly has jurisdiction to order arbitration under the Federal Arbitration Act” relying on the United States Supreme Court decision of Southland Corp. v. Keating (1984), 465 U.S. 1, 104 S.Ct. 852, 79 L.Ed.2d 1. Therefore, we will review the trial court’s decision in this case denying arbitration even though the District Court did not specifically rely on the Federal Arbitration Act but more so on the State Uniform Arbitration Act.

Frates’ next claim is that the District Court properly had jurisdiction to decide the issue of fraud in the inducement. We note that the District Court’s order does address the possibility that fraud, constructive fraud and a fiduciary relationship between Frates and her broker may be present in this case, but the court properly did not make a determination in regard to the issues. The court stated only that it would analyze the “broker’s control, the investment sophistication of the customer, the trust and confidence the customer places with the broker, and whether the customer invariably followed the broker’s advice.” The District Court left the claims for future determination: “[i]f this was a fiduciary relationship and there was constructive fraud, the agreement and the arbitration clause would be void.”

The gravamen of the District Court’s opinion was the fact that the arbitration clause’s specific language, when read in light of the whole contract, did not apply to past transactions, but was prospective only. We hold this was a proper finding. We note that the existence of the arbitration clause was not known by Jones until after discovery commenced in this case. The District Court nonetheless stated that it did not believe that Jones had “substantially utilized the litigation machinery” thereby constituting a waiver of its right to assert the arbitration clause. Citing, Maxum Foundations, Inc. v. Salus Corp. (4th Cir. 1985), 779 F.2d 974.

The federal policy is that arbitration is favored when a question of arbitration is raised and a contractual clause is present. Shearson/ American Express, Inc. v. McMahon (1987), _ U.S. -, 107 S.Ct. 2332, 96 L.Ed.2d 185. The United States Supreme Court stated in McMahon that this policy is based on 9 U.S.C. Section 2 that mandates that arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” (Emphasis added.) A similar policy is expressed in the Montana Arbitration Act in Section 27-5-114(1), MCA. The District Court in this case appropriately looked at both federal and state law and stated that an arbitration agreement may be unenforceable where grounds existed either in law or equity to revoke the entire contract.

Here, the issue of revocation of the entire contract need not be decided. A plain reading of the agreement is sufficient to dispose of this case. We begin with the determination that arbitration clauses are creatures of contract and therefore principles of contract interpretation are applicable.

Frates contends, and we agree, that the contract is not clearly drafted with numerous typographical errors, confusing and complex language, and unclear construction. Any ambiguity in the arbitration clause or other aspects of the agreement are to be construed strictly against Jones because it, in essence, drafted the contract. St. Paul Fire and Marine Ins. Co. v. Cumiskey (1983), 204 Mont. 350, 665 P.2d 223; Shanahan v. Universal Tavern Corp. (1978), 179 Mont. 36, 585 P.2d 1314, see Section 28-3-206, MCA. The District Court also followed this line of reasoning and stated “[t]his rule of construction must be balanced against the federal policy favoring arbitration . .

The District Court held that the language of the agreement was not applicable to the transactions at issue in this case. We agree. The above underlined language of paragraph (17) is probably the most compelling language used to support the inference of a present or future transaction. That language states “[t]his agreement . . . shall cover ... all accounts which the undersigned may open or reopen with you ...” The contract, as the District Court pointed out, also refers to a future debtor/creditor relationship between Frates and Jones in paragraphs (4), (5), (7), (8), (9), (11), and (12).

We are aware of the federal policy favoring arbitration, but our review in this case has been limited to the application of the arbitration clause to this case and because this is an interlocutory matter only, Jones’ rights have not been extinguished. Frates and her husband purchased the interests at issue here prior to the time Mrs. Frates signed the agreement to open the margin account.

Jones argues that even though the purchases by Frates occurred in 1982, 1983, and 1984, prior to the execution of the arbitration agreement, the District Court erred as a matter of law. Jones cites Gilmore v. Shearson/American Express, Inc. (S.D.N.Y. 1987), 668 F.Supp. 314, for the proposition that an arbitration agreement signed after specific transactions occurred can be retroactively applied to those transactions. However, we note that the clause involved in Gilmore stated all “transactions” rather than “accounts” as in this instance. Therefore, the District Court appropriately determined that the Gilmore clause was broader than the clause involved in this case.

Due to the prospective nature of paragraph (17) and the contract in its entirety, the District Court properly denied Jones’ motion to compel arbitration.

Affirmed.

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

MR. JUSTICE SHEEHY did not participate in this decision.


author: MR. JUSTICE McDONOUGH

text:
    In the Matter of UNEMPLOYMENT INSURANCE TAX CONTRIBUTION, PIONEER BASEBALL LEAGUE, Employer and Appellant, v. JAMES FRIEDRICHS, Claimant and Respondent.
    No. 88-131.
    Submitted on Briefs July 8, 1988.
    Decided Aug. 23, 1988.
    Rehearing Denied Sept. 22, 1988.
    760 P.2d 93.
    Richard J. Carstensen, Billings, for employer and appellant.
    Melanie A. Symons, Dept. of Labor & Industry, Helena, for claimant and respondent.
   MR. JUSTICE McDONOUGH

delivered the Opinion of the Court.

Pioneer Baseball League (the League) appeals from the order of the District Court of the Thirteenth Judicial District, Yellowstone County. The order affirmed the decision of the Board of Labor Appeals that the $300 per month plus expense allowance paid to League umpires constitutes employment subject to the unemployment insurance law. We affirm.

The League presents two issues for our review:

1. What is the burden of proof for determining whether services are subject to the unemployment insurance law?

2. Is the compensation paid to League umpires subject to the unemployment insurance law?

The League is a professional, minor-league baseball league with teams in Montana, Idaho, Utah and Canada. Its headquarters are in Billings, Montana. The League obtains umpires for its games from the National Association of Professional Baseball Leagues. The League and the umpires enter into a Uniform Umpire Contract provided by the National Association, which sets forth the terms of employment. James L. Friedrichs entered into such a contract with the League on June 18, 1985.

The contract provided that Friedrichs would be employed to render skilled services as an umpire. He was paid $300 per month, with an allowance of $1,050.00 per month for travel, lodging and other expenses. The contract could be assigned by the League, or terminated by the League at any time upon giving Friedrichs notice. The contract also provided that Friedrichs could not perform services as an umpire for any party other than the League unless he obtained the League’s consent.

In 1986 when he no longer worked for the League, Friedrichs filed an unemployment claim. In his total of claimed employment, he included time spent as an umpire for the League. Subsequent proceedings led to a January 6, 1987, decision by a Labor Department Appeals Referee that the services rendered to the League by Friedrichs constituted employment subject to the unemployment insurance law. On March 7,1987, the Board of Labor Appeals adopted the referee’s decision, and on December 9, 1987, the District Court of the Thirteenth Judicial District affirmed the Board’s decision. This appeal followed.

The main issue in this appeal is whether Friedrichs was an “employee” of the League for purposes of unemployment insurance contributions. The standard of review in cases appealed from the Board of Labor Appeals is controlled by Section 39-51-2410(5), MCA, which states in relevant part:

“In any judicial proceeding under 39-51-2406 through 39-51-2410, the findings of the board as to the facts, if supported by evidence and in the absence of fraud, shall be conclusive and the jurisdiction of said court shall be confined to questions of law.”

The operation of this section has been discussed previously by this Court, most recently in Zimmer-Jackson Assoc. v. Dept. of Labor (Mont. 1988), [231 Mont. 357,] 752 P.2d 1095, 1097, 45 St.Rep. 679, 681:

“When reviewing a decision of the Board of Labor Appeals, the District Court must treat the findings of the Board as conclusive if they are supported by substantial evidence and are absent fraud, [citations] This Court is held to the same standard when reviewing a Board of Labor Appeals decision, [citation].”

The facts found by the Board were adopted as conclusive by the District Court, and are not disputed in this appeal. As it appears from the record that the Board’s findings were supported by substantial evidence, “[w]e must determine whether the District Court committed an abuse of discretion by affirming the Board’s decision, [citation].” Zimmer, 752 P.2d at 1097.

I.

The League first seeks definition of the burden of proof required for a showing that the unemployment insurance law is inapplicable to a particular employment arrangement. The League has sought to show that Friedrichs was an independent contractor, and the League was therefore not required to make unemployment insurance contributions based on his compensation. The League argues that Section 39-51-203(4), MCA, fails to give an adequate definition of employment that is subject to the law. However, the League’s brief on this point misstates the applicable version of the statute. The events at issue here took place in 1985 and are governed by the version of the statute in force at that time:

“Employment Defined . . .

“(4) Service performed by an individual for wages is considered to be employment subject to this chapter unless and until it is shown to the satisfaction of the department that:

“(a) such individual has been and will continue to be free from control or direction over the performance of such services, both under his contract and in fact;

“(b) such service is either outside the usual course of the business for which such service is performed or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and

“(c) such individual is customarily engaged in an independently established trade, occupation, profession, or business.”

Section 39-51-203(4), MCA (1985). This version of the statute enunciates the “ABC” test for independent contractor status. Chapter 51, Part 2 of Title 39 was amended and rearranged in the 1987 version of the Code, and the wording of this section was changed to remove the ABC test. The League bases its vagueness argument on the 1987 version of the statute, which must be read in conjunction with other sections of the Code, and which is not applicable to this case. The burden of proof under Section 39-51-203(4), MCA (1985), is set out in the statute itself and amply discussed in cases from this Court applying the statute.

II.

The League disagrees with the District Court’s holding that compensation paid to umpires is subject to the unemployment insurance law. According to the League, the court misapplied Section 39-51-203(4), MCA (1985), to the undisputed facts of this case. The League argues that under the statute, its umpires are independent contractors not covered by the unemployment insurance law. In order to establish independent contractor status, all three parts of the ABC test set out above must be met. Zimmer, 752 P.2d at 1098, citing Standard Chem. Mfg. Co. v. Employment Sec. (1980), 185 Mont. 241, 605 P.2d 610; and Pat Griffin Co. v. Employment Security Com'n (1974), 163 Mont. 529, 519 P.2d 147.

The first, or “A” part of the test requires that the individual in question “be free from control or direction over the performance of such services.” We have held this to be the most important of the three test elements. Zimmer, 752 P.2d at 1098, and cases cited. The record shows that under the contract between Friedrichs and the League, the League dictated Friedrichs’s monthly compensation and expense allowance, without giving him the opportunity to negotiate those terms. The League controlled his game assignments, and determined who his co-workers would be. Friedrichs was also forbidden from contracting with another employer without League permission, and the League reserved the right to terminate him at any time. This combination of facts provides ample evidence that Friedrichs was not free from control or direction by the League as to how he performed his services.

The League’s arrangement with Friedrichs fails to meet the first element of the ABC test, and therefore fails the entire test under our holding in Zimmer and its predecessors. Friedrichs was an employee of the League, and his remuneration was subject to the unemployment insurance law. We find no abuse of discretion in the District Court’s decision to affirm the Board’s ruling.

We affirm the decision of the District Court.

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