author: JUSTICE McDONOUGH JUSTICE SHEEHY,

text:
    DENNIS R. WASHINGTON, Plaintiff and Respondent, v. MONTANA MINING PROPERTIES, INC., a Montana Corporation, Defendant and Appellant, and ASARCO, INC., a New Jersey Corporation, Plaintiff and Respondent. MONTANA MINING PROPERTIES, INC., a Montana Corporation, and Laith Reynolds and Clive J. Smith, Defendants and Appellants, MONTANA MINING PROPERTIES, INC., a Montana Corporation, Plaintiff and Appellant, v. ASARCO, INC., a New Jersey Corporation, and Dennis R. Washington, et. al., Defendants.
    No. 89-577.
    Submitted on Briefs April 26, 1990.
    Decided July 13, 1990.
    795 P.2d 460.

      W.D. Murray, Jr., Butte, Anthony F. Phillips, New York City, for defendant and appellant.
    Ronald B. MacDonald, Missoula, Ross Richardson, Henningsen, Purcell, Vucurovich & Richardson, Butte, Laura B. Houguet, White & Case, New York City, for plaintiff and respondent.
   JUSTICE McDONOUGH

delivered the Opinion of the Court.

Petitioner Montana Mining Properties, Inc., (MMP) has petitioned this Court for a writ of supervisory control disqualifying Judge Mark P. Sullivan from preceding further in this case. In its petition, MMP maintains that Judge Sullivan should be disqualified due to his relationship with the law firm representing the respondent, Dennis R. Washington. The writ is granted and we direct that this action be assigned to another judge.

The sole issue on appeal is:

Whether a writ of supervisory control disqualifying a presiding judge should issue when: (1) his son is employed by counsel of record for the respondent, Dennis R. Washington, (2) he knows and associates with partners of that law firm on a social basis, and (3) the petitioners raise questions concerning his ability to impartially preside over the case.

On June 19, 1987, Dennis Washington (Washington) entered into a contract with MMP for the sale of two mining properties and equipment, which are located in Butte, Montana. The first property, the “Main Butte Property” was sold to MMP for three million dollars in cash. Both parties agree this sum has been paid.

The second parcel of property sold for $500,000 and the equipment located on this property sold for three million dollars. Half of the price for the equipment was to be paid in cash. The parties agree that this part of the contract has been performed.

The dispute here arises from the contract which provides that the $500,000 for the second parcel of property, and $1.5 million representing the balance of the price of the equipment may be paid in ‘ ‘unrestricted free trading common stock’ ’ of a public company, called Butte Mining PLC. This company was organized and promoted in London by Clive J. Smith, who was one of four joint venturers who controlled MMP. The joint venture used MMP as a vehicle to acquire mining properties that were then transferred to Butte Mining PLC. Shares in this company were then sold in public stock offerings.

The agreement between Washington and MMP provided that the stock, which represented the $1.5 million balance of the purchase price for the equipment, was to be transferred to Washington no later than September 15, 1987. The stock representing the $500,000 due on the property was transferred on November 27, 1987. The agreement stated that time was of the essence with respect to both payments, and it contained an express termination clause, pursuant to which Washington was entitled to terminate the contract in the event of default. The agreement contained provisions which granted to MMP, a “first right of refusal” to acquire an interest in any mineral property owned by Washington in the Butte Mining District.

The shares of stock were delivered to a firm of accountants, Bryant & Co., in Jersey, Channel Islands. Apparently, the delivery of both stock payments was made on time. In October of 1987, Peter Bryant notified Washington, through a letter, that his firm was holding 312,500 shares of common stock which were made payable “to the order of” Washington. This delivery represented the $500,000 due under the contract for the land. A subsequent letter from Bryant advised Washington that he was releasing to Washington’s order an additional 937,000 shares, which represented the $1.5 million balance due on the equipment.

Washington does not deny receiving these letters. However, he maintains that he never gained possession, dominion or control over the stock. In support of this contention, Washington testified that he was never sent any documents regularly disseminated to Butte Mining PLC shareholders, nor given dominion over the shares. He maintained that when he attempted to sell the shares, he was unable to do so because Smith retained control over the escrow where the stock was held. In light of these circumstances, Washington maintained that he was not paid the monies due him under the contract.

Eventually, Washington, deeming MMP in breach of the contract, brought a lawsuit on March 14, 1989. In his complaint, he sought to terminate all of MMP’s rights under the agreement. MMP answered the complaint and denied the allegations of breach of contract. In short, MMP maintained that its deliveries of stock to the holding company constituted valid deliveries and that it had, therefore, met its obligations under the contract.

On April 25, 1989, Washington publicly announced that he had entered into an agreement with ASARCO, Inc. Under this agreement, Washington agreed to sell certain mining properties, located in Butte, to ASARCO. MMP deemed this agreement a violation of its right of first refusal contained in its contract with Washington. It brought a lawsuit seeking a preliminary injunction to prohibit consummation of the arrangement and also sought tort and contractual damages against both Washington and ASARCO.

A hearing was held relative to MMP’s request for an injunction on May 22 and 23, 1989. At this hearing, the primary issue was whether MMP had violated the terms of its contract with Washington. Obviously if MMP was in breach, and Washington was entitled to terminate the contract, MMP was not entitled to enforce its right of first refusal.

At the hearing, both sides presented testimony concerning the stock transfers. The law firm of Datsopoulos, MacDonald and Lind P.C., of Missoula, Montana, represented Washington. As part of his case, Washington called Milton Datsopoulos, one of the named partners of that firm, to testify concerning the various payment arrangements. Dennis Washington, Clive Smith, and Kelvin Myers, an employee of Bryant & Co., also testified.

The trial judge, the Honorable Mark Sullivan, determined that MMP had not validly transferred the stock to Washington. Judge Sullivan found that Washington did not have dominion or control over the stock and therefore MMP had not validly made the payments under the contract. He further found that this was a material breach since it represented a failure of a significant part of the consideration. Judge Sullivan, therefore, denied MMP’s request for an injunction.

Following the injunction hearing, MMP was informed that Judge Sullivan’s son was employed as a legal intern by Datsopoulos, MacDonald and Lind. This fact led counsel for MMP to question a number of rulings made by Sullivan during the injunction hearing. In particular, MMP questioned the judge’s ruling which allowed Milton Datsopoulos to testify when his law firm was actively representing one of the defendants to the action. According to MMP, Datsopoulos sat at counsel table during the hearing and actively assisted in Washington’s defense. Judge Sullivan’s decision to allow his testimony, MMP maintains, is in direct contravention of Rule 3.7(a) of the Montana Rules of Professional Conduct which states:

“A lawyer shall not act as an advocate at trial in which the lawyer is likely to be a necessary witness except where:
“(1) the testimony relates to a non-contested issue;
“(2) the testimony relates to the nature and value of legal services rendered in the case; or
“(3) disqualification of the lawyer would be a substantial hardship on the client.”

None of these exceptions apply here. The suspicions generated by Judge Sullivan’s rulings and his relationship with the Datsopoulos law firm, led counsel for MMP to request that Judge Sullivan remove himself from further proceedings in the case. According to MMP’s brief, they met with the Judge on June 2, 1989 and made this request, which was denied. In this same meeting, Judge Sullivan apparently informed attorneys for MMP that he considered his findings of fact and conclusions of law, which were contained in his order denying their request for an injunction, to be final. MMP maintains that such statements are contrary to established law, which dictates that findings made in a preliminary injunction hearing are not conclusive to any subsequent trial. Moreover, MMP argues that such statements, which were made prior to any discovery in the case, clearly indicate that Judge Sullivan is prejudiced.

MMP, following this conversation, filed a motion to disqualify Judge Sullivan. Pursuant to this motion, this Court ordered the Honorable Frank Davis to conduct a hearing and to determine whether Judge Sullivan should be disqualified. While this motion was pending, a newspaper reporter observed Judge Sullivan at a football game with Milton Datsopoulos and Ronald MacDonald, both of whom are partners in the Datsopoulos firm. According to uncontradicted testimony, Judge Sullivan did not attend the football game with either of these gentlemen. Rather, he unexpectedly ran into Mr. MacDonald, who then invited the Judge to his firm’s stadium box for a drink. He accepted this invitation and enjoyed one drink and conversation with the two lawyers for approximately 10-15 minutes. The conversation only involved football and neither Judge Sullivan nor the lawyers spoke about any issues surrounding the case in controversy.

Despite the innocent nature of this conversation, the newspaper reporter who observed the activity wrote an article which appeared in The Montana Standard on September 23, 1989. The article briefly described the status of the case, including the disqualification proceeding, and contained quotes from both Mr. MacDonald and Judge Sullivan.

On September 11, 1989, the parties presented written argument concerning Judge Sullivan’s disqualification, to Judge Davis. The arguments included an affidavit which was submitted by Judge Sullivan. It generally defended his actions taken in the case. MMP maintains that through his submission of this affidavit, Judge Sullivan overstepped his bounds as a disinterested, impartial judge and stepped into the role as advocate and maintains that this further evidences bias on his part.

Following submission of the parties’ arguments, Judge Davis entered an order denying MMP’s motion. MMP petitioned this Court for a writ of supervisory control. In its briefs in support of that petition, MMP requested this Court to exercise its extraordinary powers to direct the lower court to disqualify Judge Sullivan from all further proceedings in the case.

The only issue we must face is whether a writ of supervisory control should issue. We address this issue in two parts. First we review Judge Davis’ order and determine whether he correctly held that Judge Sullivan need not disqualify himself. Second, we must view all of the facts surrounding the controversy in order to determine whether Judge Sullivan should be disqualified because the facts create an appearance of impropriety.

Judge Davis based his decision primarily upon his interpretation of the disqualification statute, which states in relevant part:

“Any ... judge . .. must not sit or act in any action or proceeding:
“2. When he is related to either party or any attorney or member of a firm of attorneys of record for a party by consanguinity or affinity within the fourth degree, computed according to the rules of law;”

In his opinion and order, Judge Davis determined that Judge Sullivan’s son, who was a legal intern for Datsopoulos, MacDonald and Lind was not “an attorney or member of a firm of attorneys of record for a party ...” He based this conclusion on the fact that Sullivan’s son was not an attorney and not a member of the Bar. Accordingly, he was not and could not be a “member” of the Datsopoulos law firm.

We do not disagree with this interpretation of the statute. The wording of sec. 3-1-803, MCA, is clear, If the legislature intended to provide that a judge disqualify himself when a member of his family interned for a law firm appearing before him, it could easily have provided that “employees,” or “student interns” are covered by the statute. It chose not to do so, however, and we decline MMP’s invitation to add these words. When the wording of a statute is clear, its words will be interpreted by their plain meaning. Montana Assoc. of Underwriters v. State Dept. of Admin. (1977), 172 Mont. 211, 563 P.2d 577.

Having determined that Judge Davis did not incorrectly determine that Judge Sullivan should be disqualified under the language of sec. 3-1-803, MCA, we must consider whether we should exercise our extraordinary power of supervisory control to remove Judge Sullivan on the basis that his actions have created an “appearance of impropriety.” A review of the policies behind our constitutional power of supervisory control is appropriate before we consider this issue.

The power to issue writs of supervisory control is derived from Article VII, Section 2, of the Montana Constitution which states:

“Section 2. Supreme court jurisdiction. (1) The supreme court has appellate jurisdiction and may issue hear, and determine writs appropriate thereto. It has original jurisdiction to issue, hear, and determine writs of habeas corpus and such other writs as may be provided by law.
“(2) It has general supervisory control over all other courts.”

This provision grants this Court supervisory control over all inferior courts within the State. This power is separate and distinct from the Court’s appellate jurisdiction. This Court has observed that it is a power which is called into use when necessary to meet exigent circumstances for which no express remedy has been provided. State ex rel. Whiteside v. First Judical District Court (1900), 24 Mont. 539, 63 P. 395. Its primary purpose is to “keep the courts themselves within bounds, and to insure the harmonious working of our judicial system.” Whiteside, 63 P. at 399. The writ should only be issued in extraordinary situations. State ex rel. Topley v. District Court (1918), 54 Mont. 461, 171 P. 273.

Mindful of these policies, we conclude that a writ of supervisory control is appropriate in this case. The petitioners have recited numerous facts which could indicate bias on the part of Judge Sullivan. The fact that his son interns for the Datsopoulos law firm together with the fact that Judge Sullivan has associated on a social basis with members of that firm do not require disqualification. However, these facts when viewed in light of other circumstances surrounding the case, including Milton Datsopoulos’ testimony, and the newspaper article describing the meeting at the football game, have snowballed to create an appearance of impropriety.

Rule 4 of the Canons of Judicial Ethics requires that a judge’s conduct should be free from the appearance of impropriety. Factors present in this case, in particular the newspaper article, render the realization of this standard a virtual impossibility.

Additionally, we note that Rule 33 of the Canons of Judicial Ethics requires a judge, when engaged in pending or prospective litigation, to be particularly careful to avoid any action that may reasonably tend to awaken the suspicion that his social or business relations or friendships constitute an element in influencing his judicial conduct. The facts here have raised questions of impropriety. They evidence an impression of impropriety and bias.

Justice must satisfy the appearance of justice. Jones v. City of Chicago, 610 F.Supp. 350, (N.D.Ill.E.D. 1984). As eloquently stated by Lord Hewart,

“... a long line of cases shows that it is not merely of some importance but is of fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seen to be done. Nothing is to be done which creates even a suspicion that there has been an improper interference with the course of justice. Rex v. Sussex Justices (1924), 1 k.b. 256, 259.”

The people’s confidence in the ability of the courts to administer justice must not be diminished. A state ruled by law cannot afford any perceived notion that justice is not being served by the judiciary. It is for this reason, that we grant MMP’s petition for a writ of supervisory control. We emphasize that such action by this Court is only undertaken under extraordinary circumstances. However, the events involving the lower court have created an aura of possible bias or prejudice. In order to remedy this situation as well as to protect the integrity of the judiciary as a whole, the writ is granted and the Court hereby orders that this action be assigned to another district judge who has not participated heretofore in this case.

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

JUSTICE SHEEHY,

dissenting:

From the record here, it does not appear that Montana Mining Properties, Inc. has much of a case. To mask its lack of substance, Montana Mining Properties, Inc., through its counsel, has mounted a vengeful attack on the impartiality and integrity of a judicial officer. This litigation involves essentially two questions: 1) did Montana Mining Properties breach its contract of purchase with Dennis R. Washington; and, 2) does Montana Mining Properties (hereinafter MMP) have any right of first refusal as to other mining properties proposed to be sold by Dennis R. Washington to ASARCO, Inc?

Under MMP’s contract with Washington, MMP was required to pay balances on the contract to Washington by certain dates in U.S. dollars or in “unrestricted, free trading” common stock of the same value. The record before us is clear that MMP neither paid Washington the balance due in U.S. dollars at the times required, nor did it provide him with unrestricted and free-trading common stock as the alternative. Therefore, MMP breached the contract and is not entitled to an injunction.

The second question relates to a right of first refusal, which was included in the contract between MMP and Washington. The right of first refusal applied to other mining properties held by Washington in the Butte area. Washington made a deal for the sale of certain of those properties or an interest therein to ASARCO. Washington gave notice to MMP of the proposed offer, and MMP has not at any time met or tendered the amounts of money necessary to meet the first refusal requirement. Aside from its obvious breach of contract, if a right of first refusal existed in MMP, the latter did not or could not meet the offer, which takes care of the first refusal issue.

In the light of the record, District Judge Sullivan properly denied MMP’s request for a temporary injunction to stop the ASARCO deal. Upon the denial of the injunction, Washington and ASARCO completed their deal. Although the temporary injunction was denied, the principal action itself remains undecided in District Court. It is possible, but only barely possible, it seems to me, that MMP might have other evidence to turn the tables as to the contract breach. Yet MMP did not appeal the denial of the temporary injunction. Instead, it mounted its attack against Judge Sullivan, and eventually District Judge Frank Davis was called in to determine whether Judge Sullivan should be disqualified. Judge Davis denied the disqualification after the hearing, concluding properly, I think, that “the appearance of impropriety was mostly in the eye of the loser. ’ ’

The alleged impropriety turns on three incidents: (1) the temporary employment of Pat Sullivan as an intern for the law firm representing Washington; (2) a ten-minute conversation between District Judge Sullivan and Ronald MacDonald, one of Washington’s attorneys, at a football game; and (3) the permission by Judge Sullivan to allow the testimony of Milton Datsopoulos as a witness in the temporary injunction hearings.

The employment by law firms of law school students as temporary interns is common in Montana. It is a recognition by the law firms of this State that support of our Law School is increased by offering hands-on law office experience to law school students. Washington’s law firm employs five or six of such interns per year. Such employment, particularly when the intern has never been directly involved in the case at issue does not qualify as a basis for disqualification of a district judge. Canon 3C, Canons of Judicial Ethics relating to the disqualification of a judge because of relationship applies only if the relative is “acting as a Lawyer in the proceeding.” The commentary under that Canon, published by the American Bar Association, is as follows:

“The fact that a lawyer in a proceeding is affiliated with a law firm with which a lawyer-relative of the judge is affiliated does not of itself disqualify the judge. Under appropriate circumstances, the fact that ‘his impartiality might reasonably be questioned’ under Canon 3C(1) or that the lawyer-relative is known by the judge to have an interest in the law firm that could be ‘substantially affected by the outcome of the proceeding’ under Canon 3 C (1) (d) (iii) may require his disqualification.”

Here the employment of Pat Sullivan as an intern does not meet any of the propositions set forth in the commentary. In fact, he was not a Lawyer when acting as an intern. Pity the sons and daughters of district judges in the future who as law students will not be selected as interns because of the jeopardy the majority opinion now places on such employment.

The facts pertaining to the association of District Judge Sullivan with Ronald MacDonald, of Washington’s law firm, at a University football game are far overblown. It is a common experience for attenders at such football games to be invited for a short visit at one or other of the several plush boxes maintained by law firms and corporations of Montana at the University stadium. As a result, such boxes are usually crowded, with much passing in and out by visitors. This Court should not countenance such a casual contact as indicating bias unless we are willing to examine strictly our own tendencies. We have just returned from the annual meeting of the State Bar of Montana, where probably every member of this Court associated at cocktail parties and other events with counsel from around the State, many of whom have pending before this Court appeals or other original proceedings. To hold that such contacts, including casual visits at a University stadium football box, indicate bias is nothing more than silly.

The third point is the testimony of Mr. Datsopoulos at the injunction hearing itself. Milton Datsopoulos was called to the stand, and his testimony was objected to as follows:

“MR. PHILLIPS: Your Honor, we object to this witness testifying concerning material matters in dispute of this case. He’s appeared here at the counsel table as counsel of record.
“MR. MACDONALD: May I be heard with regard to that, your Honor? I am laying this as foundation. There have been a number of statements that have been made with regard to Mr. Datsopoulos’ participation. Mr. Myles has testified, for our benefit for the first time, that it is his understanding Mr. Datsopoulos authorized the holding of stock as was testified by Mr. Clive Smith.
“It comes somewhat as a surprise to us, and I believe that it is appropriate to call Mr. Datsopoulos who hasn’t participated materially other than some comic relief with these proceedings.
“THE COURT: I am going to allow it. Overruled. You may proceed in question.”

In the majority opinion, Rule 3.7(a) of the Montana Rules of Professional Conduct is cited, which states that a lawyer shall not testify as a witness when he is an advocate at the trial, with three exceptions. One of those exceptions is where “disqualification of the lawyer would work substantial hardship on the client. ’ ’ In the case at bar, it was the contention of MMP that its delivery of stock to an escrow holder in the Channel Islands was in fact delivery of stock to Mr. Washington. The effect of the Smith testimony was that Mr. Datsopoulos had authorized such a delivery of the stock. Washington’s interests would be substantially affected if Smith’s testimony were not contravened. Yet the majority holds that the exception contained in the Montana Rules of Professional Conduct does not apply, saying “None of these exceptions apply here.” Thus, this Court, without an appeal, has decided an issue that should have been raised by appeal. In any event, on the record here, the ruling of District Judge Sullivan with respect to the lawyer’s testimony was correct.

All through the majority opinion, it is evident, the majority can find no fault, no bias, no partiality or improper orders made by the District Court. The majority can find no direct fault with the ruling of District Judge Davis that disqualification of Judge Sullivan was not necessary. Yet the majority, saying in effect that they could never convict Judge Sullivan of bias, nevertheless convict him on the basis of a perceived appearance of impropriety. The majority have attenuated judicial integrity to the breaking point, in a case without warrant for such action I dissent.


source: Caselaw Access Project

author: JUSTICE McDONOUGH

license: Public Domain

text:
    In re the MARRIAGE OF RODNEY GLENN BUTLER, Petitioner and Respondent, and ALBERTA ESTHER BUTLER, Respondent and Respondent, and Dale Butler, Intervenor and Appellant, Gina Kay Colwell, Intervenor.
    No. 90-053.
    Submitted on Briefs June 14, 1990.
    Decided July 13, 1990.
    795 P.2d 467.

      Katharine S. Donnelley and Leo Berry, Browning, Kaleczyc, Berry & Hoven, Helena, for intervenor and appellant.
    Donald E. Hedman, Hedman, Hileman & LaCosta, Whitefish, Jeffrey D. Ellingson, Ellingson Law Offices, Kalispell for Estate of R.G. Butler.
    Patrick D. Sherlock, Sherlock & Nardi, Kalispell, for Colwell.
    Lewis K. Smith, Teachers’ Retirement Board, Helena, amicus curiae.
   JUSTICE McDONOUGH

delivered the Opinion of the Court.

This appeal involves the distribution of teacher retirement benefits as part of a marital estate. The intervenor appellant, Dale Butler, appeals the order of the Eleventh Judicial District Court, Flathead County, awarding one-half of the teacher’s retirement benefits of his deceased brother, Rodney Glenn Butler, to Rodney’s former spouse, Alberta Esther Butler, and the other half to Rodney’s estate. The court’s order is the result of a remand from an earlier appeal, prior to which order the retirement benefits were being paid to Dale Butler. We affirm the District Court’s award of one-half the retirement benefits to Alberta as part of the marital estate and decline, in this divorce action, to determine title to the remaining benefits, as that issue is not properly before us and involves a question outside of this dissolution.

The issue on appeal is as follows: Did the District Court err in holding that the deceased husband’s teacher’s retirement benefits, which were being paid to the named beneficiary after entry of the initial decree, should be redistributed as part of the martial estate upon appeal and remand from the initial decree of dissolution?

Rodney and Alberta were married in 1963. Two children born of the marriage have now reached the age of majority. Rodney was a teacher in Chester, Montana, where the Butlers owned a home in joint tenancy with right of survivorship.

In August of 1982, the Butlers purchased the Cedar Lodge, a motel in Columbia Falls, Montana, for $245,000.00. The parties managed the motel together, with Rodney commuting to Chester to teach, until March of 1984 when the parties separated. Rodney then returned to Chester and Alberta continued management of the motel alone as her sole source of income.

Rodney filed for divorce in January of 1985; he was diagnosed with terminal cancer in September 1986. The District Court dissolved the marriage in December 1986, and entered an order dividing the marital estate in February 1987. The court awarded Rodney his teacher’s retirement and the home in Chester and awarded Alberta the motel. In April of 1987 the District Court set a hearing for July 1987 on Alberta’s motion to alter or amend the property distribution. Rodney married a second wife, Tammy, shortly before his death. He died on June 17, 1987, prior to the hearing. At this time Rodney’s brother Dale, as the named beneficiary of the teacher’s retirement account, began receiving monthly survivorship benefits of $1,048.02 per month.

In December of 1987, the District Court denied Alberta’s motion to alter or amend and the first appeal ensued. See In re Marriage of Butler (1988), 232 Mont. 418, 756 P.2d 1159. In our first opinion we found that the District Court abused its discretion by utilizing an outdated appraisal of the Cedar Lodge Motel. We remanded the case for determination of the parties’ interest in the motel, stating that “it may be necessary ... to reconsider the allocation of any or all of the marital estate to reach an equitable distribution.” Butler, 756 P.2d at 1162.

A hearing was held upon remand on July 12, 1989, and the court entered its memorandum and order on October 6, 1989, redistributing the property. The court essentially revalued the motel at zero net value due to existing encumbrances. The District Court did not disturb its prior award of the Chester home, where Tammy now resides, to Rodney. The court ordered Dale to account for and return to the marital estate all retirement benefits received, and awarded one-half of such benefits to Alberta Ester Butler in lieu of the first award of the defunct Cedar Lodge Motel. The Court awarded the other half to the Estate of Rodney Butler.

On February 6, 1989, appellant Dale Butler intervened alleging that he had a vested property right to the retirement benefits precluding the District Court from redistributing such benefits as marital property. On April 18, 1989, Gina Kay Colwell, one of the adult children of Rodney and Alberta, also intervened. She alleged that pursuant to Rodney’s last will and testament and his correspondence with the Teachers’ Retirement System, a trust was created by Rodney out of his teacher’s retirement account naming Dale as trustee and Gina and her sister Cynthia Rae Buck as beneficiaries. She alleges that Dale has breached the fiduciary duty he has as trustee and has also breached the covenant of good faith and fair dealing. Thus, all the parties claim an interest in the teachers’ retirement benefits.

It is well-settled that a district court has far-reaching discretion in resolving property divisions. In re Marriage of Luisi (1988), 232 Mont. 243, 247, 756 P.2d 456, 459. Its judgment will not be altered or overturned absent a clear abuse of discretion nor will its findings of fact be set aside unless they are clearly erroneous. Butler, 756 P.2d at 1161; Marriage of Watson (1987), 227 Mont. 383, 387, 739 P.2d 951, 954. By statute the district court has the power to

“finally equitably apportion between the parties the property and assets belonging to either or both, however and whenever acquired and whether the title thereto is in the name of the husband or wife or both.”

Section 40-4-202, MCA. Montana law is well-settled that teachers’ retirement benefits are properly considered to be a marital asset at the time of dissolution. In re Marriage of Sirucek (1985), 219 Mont. 334, 339, 712 P.2d 769, 772; In re Marriage of Rolfe (1985), 216 Mont. 39, 46, 699 P.2d 79, 83; Sowell v. Teacher’s Retirement System (1984), 214 Mont. 200, 207, 693 P.2d 1222, 1226.

Dale contends that the District Court cannot retrieve benefit payments and the right to receive them and place them back in the marital estate because his right to receive them vested upon Rodney’s death. He relies heavily on the following language from the Sowell case:

“Even though Montana recognizes that the pension fund of one spouse must be included in the marital estate at the time of a divorce action, we have not adopted the community property concept in this state. Property can be owned and separately controlled by one spouse without the permission of the other. We hold that, consistent with this separate ownership concept, a spouse has the right to nominate the beneficiary of retirement account proceeds without consultation or permission from the other spouse and can designate a beneficiary other than the spouse. Although the retirement account proceeds must be included as a marital asset at the time of divorce, at the time of death those proceeds can be excluded from the decedent’s estate and from any claim by the survivor.”

Sowell, 693 P.2d at 1226. (Emphasis by appellant.)

Sowell is distinguishable from the case at bar. There, the decedent husband, who died sometime after the divorce was in full force and effect, failed to change the beneficiary designation of his teachers’ retirement benefits from a former wife to his widow. The widow claimed an interest in those benefits. This Court held that the widow did not have an interest in those benefits, which were vested with the former spouse and designated beneficiary, absent an affirmative act by the husband changing the beneficiary. Here, at the time the beneficiary designation was made and when Dale began receiving benefits, the dissolution was still pending and therefore was subject to subsequent appeal of the property distribution, and our instructions on remand to consider all property for reallocation. Where property interests are involved, an appeal in a divorce case does not abate upon the death of a party pending its determination. In re Marriage of Lawrence (1984), 212 Mont. 327, 330, 687 P.2d 1026, 1028; Deich v. Deich (1958), 136 Mont. 566, 577-578, 323 P.2d 35, 42; Judson v. Anderson (1945), 118 Mont. 106, 125, 165 P.2d 198, 207.

Dale and amicus curiae, the Teachers’ Retirement Board, also contend that by statute, teachers’ retirement benefits are not subject to legal process, and that the Board has in rem jurisdiction over such funds prior to payment to a member or designated beneficiary. See secs. 19-4-706 and 19-4-1001, MCA. The Board further contends that once vested in a beneficiary the District Court must obtain in personam jurisdiction over a beneficiary before it can redirect payments.

These arguments beg the question. As long as a dissolution is still pending, the district court need not “obtain” jurisdiction over retirement benefits because it already has continuing jurisdiction over such benefits as part of the marital estate until the dissolution is final. Sowell, 693 P.2d at 1226; Lawrence, 687 P.2d at 1028. Here the District Court was faced with a difficult situation upon remand as to how to reallocate the marital estate. In light of this and the District Court’s equitable powers regarding property disposition, we find no clear abuse of discretion in the award of one-half of the teacher’s retirement benefits to the former spouse Alberta.

However, Appellant Dale is correct in asserting that any claims of the other intervenor Gina Kay Colwell or Rodney’s estate are not properly before this Court. Title to the remaining one-half interest in the retirement accounts is to be determined in a separate matter. The order of the District Court is affirmed with respect to the award of one-half of the teacher’s retirement account to Alberta Esther Butler, and the awarding of the other half of the retirement award is vacated.

AFFIRMED IN PART.

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


author: JUSTICE HARRISON JUSTICE WEBER,

text:
    ALLSTATE INSURANCE COMPANY, an Illinois Corporation, Plaintiff and Appellant, v. WILLIAM R. HANKINSON, Luke Hankinson, Gerald Baasch, and Gwen Grenfell, Defendants and Respondents.
    No. 89-562.
    Submitted May 15, 1990.
    Decided July 16, 1990.
    Rehearing Denied Aug. 23, 1990.
    795 P.2d 480.

      Susan R Roy, Garlington, Lohn & Robinson, Missoula, for plaintiff and appellant.
    Milton Datsopoulos and Darla J. Keck, Datsopoulos, MacDonald & Lind, Hugh Kidder, Missoula, for defendants and respondents.
   JUSTICE HARRISON

delivered the Opinion of the Court.

Allstate Insurance Company appeals a decision in a declaratory action it filed to determine its duty to indemnify and defend Luke Hankinson for any claims arising out of an automobile accident in which Hankinson was at fault. The Fourth Judicial District Court, Missoula County, Montana, granted summary judgment in respondents’ favor. We reverse and remand.

Issues:

1. Did the District Court err in concluding that Hankinson had the owner’s permission by defining owner as any driver and by assuming facts not in the record?
2. Is the word “owner’s” ambiguous?
3. Is Allstate entitled to summary judgment when the undisputed facts show that Cloninger controlled her son’s use of the automobile and both the son and his friend, the driver at the time of the accident, knew that the driver did not have permission to drive the automobile?

On July 30, 1988, Luke Hankinson, a minor, was driving a car when an accident occurred injuring Gerald Baasch and Gwen Grenfell. The car belonged to Kathy Cloninger who had given her son, Brian Young, permission to use the vehicle. Despite Ms. Cloninger’s express instructions that no one but Brian was to drive the car, Brian gave Luke Hankinson permission to drive the car. It is undisputed that Luke Hankinson knew that he did not have Kathy Cloninger’s permission to drive that vehicle.

Luke Hankinson was an insured on William Hankinson’s, Luke’s father, Allstate automobile owner’s liability insurance policy. Respondents sought coverage under William Hankinson’s Allstate policy, specifically under the non-owned automobile provision which provided the following coverage:

“A non-owned auto used by you or a resident relative with the owner’s permission!.]”

Allstate denied coverage because Luke Hankinson did not have Kathy Cloninger’s permission to use the non-owned automobile.

Relying on two Montana cases, the District Court found that Brian Young was an owner of the non-owned automobile for insurance coverage purposes. Since Brian gave Luke permission to drive, Luke drove the non-owned automobile with the owner’s permission triggering coverage under Luke’s father’s Allstate policy.

Did the District Court err in concluding that Hankinson had the owner’s permission by defining owner as any driver and by assuming facts not in the record?

Upon review, we find that § 61-6-301, MCA (1989) (amended effective July 1, 1990), guides the proper resolution to this case. In pertinent part, § 61-6-301, MCA, provides:

“(1) Every owner of a motor vehicle which is registered and operated in Montana by the owner or with his permission shall continuously provide insurance against loss resulting from liability imposed by law for bodily injury or death or damage to property suffered by any person caused by maintenance or use of a motor vehicle, as defined in 61-1-102, in an amount not less than that required by 61-6-103, or a certificate of self-insurance issued in accordance with 61-6-143.” (Emphasis added.)

The mandatory liability coverage statute compels a motor vehicle owner to provide continuous liability coverage for the use by the owner or with the owner’s permission of any motor vehicle as defined in § 61-1-102, MCA. Kathy Cloninger’s automobile falls within § 61-1-102’s definition of a motor vehicle. Thus, under Montana’s mandatory liability protection statutes, the only question regarding coverage under the Hankinson policy should be whether Luke’s father gave him permission, either express or implied, to drive the Cloninger vehicle.

The problem in this case arises because the Hankinson policy’s non-owned automobile coverage conflicts with the mandatory coverage required by § 61-6-301, MCA. Section 61-6-301, MCA, refers to § 61-6-103(2) which is the statute that draws in Hankinson’s automobile owner’s liability policy. The applicable section is § 61-6-103(2), MCA (1989) (amended effective July 1,1990), which states:

“2) Such owner’s policy of liability insurance shall:
“(a) designate by explicit description or by appropriate reference all motor vehicles with respect to which coverage is thereby to be granted; and
“(b) insure the person named therein and any other person, as insured, using any such motor vehicle or motor vehicles with the express or implied permission of such named insured, against loss from the liability imposed by law for damages arising out of the ownership, maintenance, or use of such motor vehicle or motor vehicles within the United States of America or the Dominion of Canada, subject to limits exclusive of interest and costs, with respect to each such motor vehicle ...”

The language “by appropriate reference” found in § 61-6-103(2)(a), MCA, refers to Hankinson’s policy’s non-owned vehicles provision which provides coverage for “[A] non-owned auto used by you or a resident relative with the owner’s permission.” In this case, the effect of the non-owned auto provision’s qualifying language “with the owner’s permission” is to provide less than the minimum mandatory coverage required by § 61- 6-301, MCA.

Our prior decisions interpreting insurance policies in light of Montana’s Mandatory Liability Protection Act establishes that when policy language excludes coverage otherwise statutorily mandated then that policy language is void as contrary to public policy. See, Horace Mann Ins. v. Hampton (1989), 235 Mont. 354, 767 P.2d 343; Iowa Mutual Ins. Co. v. Davis (1988), 231 Mont. 166, 752 P.2d 166. If Luke’s father gave Luke permission to drive the non-owned vehicle, then § 61-6-301, MCA, mandates coverage. However, under Hankinson’s policy terms even if Luke’s father gave permission, coverage is cut short if the non-owned vehicle’s owner did not give permission. Such an exclusion is contrary to public policy. Thus, we hold that Hankinson’s policy’s non-owned automobile provision’s qualifying language “with the owner’s permission” is void as contrary to the public policy established by Montana’s Mandatory Liability Protection statutes.

In summary, the key issue for this case is whether Luke’s father gave him permission to drive the non-owned vehicle. However, that has not yet been addressed by the District Court. Because of our holding on this issue, we need not address the other issues raised. We reverse the District Court’s granting of summary judgment and remand for proceedings consistent with this opinion.

CHIEF JUSTICE TURNAGE and JUSTICES SHEEHY, BARZ, HUNT and McDONOUGH concur.

JUSTICE WEBER,

dissenting:

I respectfully dissent from the majority opinion. The intent of the majority opinion is to require the following with regard to the insurance purchased by a father on his owned vehicle where he has named his son as an insured: Any motor vehicle driven by his son shall be covered by the father’s insurance policy, even where the son was denied permission to drive the vehicle by its owner. While it may be commendable to require that every driver of a motor vehicle be covered by insurance, I am unable to find such requirements in the statutes.

I will restate portions of the pertinent code sections. Section 61-6-301, MCA (1989), (amended effective July 1,1990), provides in part:

“(1) Every owner of a motor vehicle which is... operated in Montana by the owner or with his permission shall continuously provide insurance against loss ... suffered by any person caused by maintenance or use of a motor vehicle, as defined in 61-1-102 ...” (Emphasis is supplied in majority opinion.)

In pertinent part § 61-1-102, MCA, provides:

“ ‘Motor vehicle’ means every vehicle propelled by its own power and designed primarily to transport persons or property upon the highways of the state .... The term does not include a bicycle ...”

The majority concludes that the Kathy Cloninger automobile falls within the definition of a motor vehicle as contained in § 61-1-102, MCA. That section covers all automobiles, and of course does include the Cloninger vehicle. I find it misleading to suggest that section somehow assists in reaching a conclusion that the Cloninger vehicle comes within the definition of § 61-6-301, MCA, in such a manner that all that is left is to determine if the father gave his son permission to drive the Cloninger vehicle. Our problem is to determine if § 61-6-301(1), MCA, requires coverage.

In substance § 61-6-301, MCA, requires the owner of a motor vehicle operated with his permission to provide insurance. Clearly that reference to providing insurance is a reference back to the owned motor vehicle. It also seems clear that the reference to insurance against loss caused by use of a motor vehicle is merely descriptive of the type of insurance which is required on the motor vehicle. I therefore conclude that § 61-6-301, MCA, clearly requires every owner of a motor vehicle being operated in Montana with his permission to continuously provide insurance against loss resulting from use of the owned motor vehicle. I can find nothing in that section which applies to any vehicle other than the owned motor vehicle. I must dissent from the key conclusion of the majority opinion — that in some maimer the foregoing statute compels an owner of a motor vehicle to provide continuous coverage for the use of any motor vehicle which is used with the owner’s permission.

Having reached the foregoing conclusion, I of course cannot agree with the further conclusion that the policy as written violates the public policy of the statute so that the limitation of the use by Brian Hankinson of an automobile with his father’s permission is void as contrary to public policy.

I further note that the majority’s interpretation does not consider statutory provisions such as § 61-6-103, MCA (1989), (amended effective July 1, 1990), which in pertinent part provides:

“(1) A ‘motor vehicle liability policy’ ... shall mean an owner’s ... policy of liability insurance ...
“(2) Such owner’s policy of liability insurance shall:
“(a) designate by explicit description or by appropriate reference all motor vehicles with respect to which coverage is thereby to be granted; and
“(b) insure the person named therein and any other person, as insured, using any such motor vehicle or motor vehicles with the express or implied permission of such named insured ...”

Clearly the foregoing section allows an owner to purchase insurance which designates which vehicles shall be covered by appropriate reference, and therefore allows the limitation contained in the present policy which grants coverage to motor vehicles driven by an insure used with the permission of the owner. Such a limitation seems completely consistent with § 61-6-103, MCA.

As suggested at the beginning of this dissent, it may be commendable to require insurance so that the driver of any car is covered. Under the facts of this case, it is not proper for this Court to make such a change in the statutes. That change should be left to the legislature. I dissent.


author: JUSTICE BARZ

text:
    HELEN FELLOWS, Plaintiff and Appellant, v. SEARS, ROEBUCK AND CO. and Clark Moore Defendants and Respondents.
    No. 90-122.
    Submitted on Briefs June 7, 1990.
    Decided July 17, 1990.
    795 P.2d 484.

      W. M. Hennessey, Hennessey and Joyce, Patrick McGee, Butte, for plaintiff and appellant.
    Chris D. Tweeten, Hughes, Kellner, Sullivan & Alke, Helena, for defendants and respondents
   JUSTICE BARZ

delivered the Opinion of the Court.

Helen Fellows appeals from an order of the District Court of the Second Judicial District, Silver Bow County, granting respondents’ motion for summary judgment. We affirm.

Appellant began working as a store clerk for respondent Sears, Roebuck and Co. (“Sears”) in April, 1975. Appellant belonged to a collective bargaining unit represented by the United Food and Commercial Worker’s Union. In May 1984, at the request of management, appellant transferred to a service clerk position also subject to a collective bargaining agreement. The Butte Teamster’s Union was the sole bargaining agent for the service clerks. Appellant maintains that respondent store manager Clark Moore (“Moore”) assured her that the transfer would not affect her seniority and that she could transfer back to her former position at any time. Appellant was laid off for one year beginning in September or October, 1987. Her employment was terminated in October, 1988. Appellant requested that she be transferred back to her former position. Moore denied this request.

Appellant filed suit in State court alleging respondents had created a reasonable expectation of job security and that respondents acted maliciously, wrongfully and capriciously in discharging her. Appellant further contended respondents violated Sear’s personnel policy, the implied covenant of good faith and fair dealing and public policy by refusing to transfer her. Respondents removed the case to the United States District Court, for the District of Montana, Butte Division. That court granted appellant’s motion to remand to State court concluding that “[t]he validity of any preemption defense . . . [is] properly addressed in the first instance by the state court.” Following removal, the District Court granted respondents’ motion for summary judgment, concluding:

“[T]here is no question of fact that Plaintiff was a service clerk at the time of her layoff in 198[7] and her discharge in 1988, and that therefore she was a member of the bargaining unit represented by the Teamsters’ Union under a collective bargaining agreement with Defendant SEARS, ROEBUCK AND CO. whether she paid union fees or not; that there is no question that Federal law, § 301 of the Labor Management Relations Act, 29 USC 185(a), preempts any cause of action under State law where the claim arises out of or involves interpretation of a collective bargaining agreement negotiated pursuant to Federal law; that the complaint does not state facts showing a specified violation of public policy; and further that the amended complaint does not state a cause of action under the Wrongful Discharge From Employment Act, Title 39, Chapter 2, Part 9, MCA, on which relief can be granted.”

Appellant maintains the District Court erred in finding her State law claims preempted by Federal law pursuant to Section 301 of the Labor Management Relations Act of 1947 codified at 29 U.S.C. § 185(a). Appellant asserts her oral agreement with management was actionable under State law and not grievable in accordance with the grievance process provided for in the collective bargaining agreement.

Summary judgment is properly rendered in the absence of genuine issues of material fact. Bohnsack v. Hi-Noon Petroleum, Inc. (Mont. 1990), [243 Mont. 190,] 793 P.2d 815, 817, 47 St.Rep. 1125, 1127. Neither party disputes the propriety of summary judgment in the instant case.

Section 301 of the Labor Management Relations Act of 1947, codified at 29 U.S.C. § 185(a), provides that:

"Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this Act, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.”

This section generally preempts State law claims when such are based on a collective bargaining agreement or require interpretation of a collective bargaining agreement. Brinkman v. State (1986), 224 Mont. 238, 246, 729 P.2d 1301, 1307. Thus the issue becomes whether appellant’s allegations constitute a breach of the collective bargaining agreement or mandate an interpretation of the agreement.

In Brinkman we recognized that an aggrieved employee must at least attempt to utilize the grievance process provided for in the collective bargaining agreement. Brinkman, 729 P.2d at 1305.

“Only in those cases where it is certain that the arbitration clause contained in a collective bargaining agreement is not susceptible to an interpretation that covers the dispute is an employee entitled to sidestep the provisions of the collective bargaining agreement.”

Small v. McRae (1982), 200 Mont. 497, 504, 651 P.2d 982, 986. In the instant case, appellant made no effort to avail herself of the remedies provided by the collective bargaining agreement.

Furthermore, the Ninth Circuit has repeatedly held that an agreement extraneous to the collective bargaining agreement is enforceable only so far as consistent with the collective bargaining agreement. Young v. Anthony’s Fish Grottos, Inc. (9th Cir. 1987), 830 F.2d 993, 997; Bale v. General Telephone Co. of California (9th Cir. 1986), 795 F.2d 775, 779; Olguin v. Inspiration Consolidated Copper Co. (9th Cir. 1984), 740 F.2d 1468, 1474. The alleged oral agreement between the parties concerned the seniority of appellant and the employer’s rehiring practices. Both are covered by the collective bargaining agreement.

Article VII provides in pertinent part:

“Section 1.
“The Employer and the Union agree that there shall be three (3) separate seniority lists. One (1) for the service technicians; one (1) for delivery drivers and helpers; and one (1) for the service clerical employees.
“Section 2.
“Employees shall be probationary employees for the first sixty (60) days of employment during which time they shall not acquire seniority and may be released at the discretion of the Company without recourse to the grievance procedure. The aforementioned sixty (60) day probationary period may be extended by mutual consent of the Company and the Union. Thereafter, employees shall accrue seniority on their respective list dating from the date of their employment. Seniority shall be applicable only to layoffs attending a reduction in force within each list and shall not impair the right of the Employer to discharge for just cause. On layoffs in any of the seniority lists, the last person hired on that list shall be the first person laid off, provided however, in case of reduction in work force in the service department, a senior employee vulnerable for layoff must be able to perform the available work to prevent being laid off. On rehiring, the last person laid off on that seniority list shall be the first rehired on that list.
“Section 3.
“When seniority shall terminate after one (1) year in the event of a layoff. Seniority shall terminate immediately upon voluntary severance by the employee, by discharge for just cause, and by failure to report after recall as provided in Section 5 below.
“Section 4.
“When employment has been suspended by reason of illness or leave of absence for a period of ninety (90) days, the Employer and Union will mutually adjust the continuation of an employee’s seniority rights.
“Section 5.
“Recall after layoff shall be achieved by telegram or by registered certified mail directed to the employee’s last known address. Employee must report for work within seventy-two (72) hours after dispatch or mailing of such notice or lose their seniority.”

Clearly, the extent to which appellant’s alleged oral agreement with Sears and Moore is consistent with the collective bargaining agreement requires an interpretation of the above-referenced sections of that agreement. For that reason, the District Court properly concluded appellant’s State law claims were preempted by Federal law.

Affirmed.

JUSTICES SHEEHY, HUNT, McDONOUGH and HARRISON concur.


author: CHIEF JUSTICE TURNAGE

text:
    GLENN HEITZ, Plaintiff and Respondent, v. JOHN HEITZ, Defendant and Appellant.
    No. 89-191.
    Submitted on Briefs May 31, 1990.
    Decided July 19, 1990.
    795 P.2d 486.

      Jock B. West, Billings, for defendant and appellant.
    Nickolas C. Mumion, Jordan, for plaintiff and respondent.
   CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

This action concerns an oral agreement between two brothers. The District Comb of the Sixteenth Judicial District, Garfield County, entered judgment for plaintiff Glenn Heitz in the amount of $12,982.86. John Heitz appeals. We affirm except as to the award of prejudgment interest on the grazing fee for horses.

The issues are:

1. Did the District Court err in determining that the oral agreement was altered only for the month of December and in assessing a rental rate of $10 per head per month?
2. Did the court err in assessing a rental rate for the pasturing of horses?
3. Did the court err in assessing prejudgment interest?

Between October 1983 and April 1985 John Heitz (John) rented pasture from his brother Glenn Heitz (Glenn) under an oral agreement. Up until November 1984, John paid Glenn $10 per head of cattle, at the beginning of each month, as rental for the pasture for the previous month. John also grazed six horses on Glenn’s land. He did not pay anything for the horses.

In January, February, and March, 1985, John’s rental payments to Glenn were for only $4.50 to $5 per head of cattle per month. According to John, rent was reduced because there was no grass on the land during this time. John did not make any rental payments to Glenn for grazing his cattle during March and April. Also in April 1985, John used but did not pay for nine tons of Glenn’s hay. Glenn brought this suit in November 1987 to recover for pasturing the cattle during January, February, March, and April; for pasturing the horses; and for the hay.

The brothers were the only witnesses at trial. Based on their testimony, the court concluded that they had entered a month-to-month lease of pasture and that except for the month of December 1984 (paid in January 1985), the monthly fee for grazing remained as originally set at $10 per head. The court concluded that Glenn was entitled to prejudgment interest on the grazing fees due from John. It also concluded that Glenn was entitled to recover $405 for nine tons of hay and $240 for pasturing three of the horses, plus prejudgment interest on both of those. John appeals.

I

Did the District Court err in determining that the oral agreement was altered only for the month of December and in assessing a rental rate of $10 per head per month?

John argues that Glenn did not meet his burden of proving by a preponderance of the evidence what the rental rate was to be for the months of January, February, March, and April of 1985. He contends that the evidence supports his position that they had agreed to a reduction of rent to $4.50 per head. He mentions Glenn’s acceptance of his checks in January, February, and March. He also alludes to an April 5, 1985, letter he received from Glenn’s attorney stating that there had been a rent reduction for the months of January and February 1985.

Glenn’s testimony conflicted with John’s. Glenn testified that he agreed to reduce the grazing fee for the month of December 1984 only. He further testified that he accepted John’s checks in February and March as partial payments. He explained the April 1985 letter from his attorney as an offer of settlement.

If substantial credible evidence supports the facts found by a district court, this Court will not substitute its judgment for that of the lower court. Cameron v. Cameron (1978), 179 Mont. 219, 227, 587 P.2d 939, 944. The lower court is entitled to resolve any conflicts in the evidence. Cameron, 587 P.2d at 944.

The District Court accepted Glenn’s testimony that the original agreement was altered for the month of December only. We conclude that the District Court was within its discretion in weighing the credibility of the evidence and in concluding that Glenn’s testimony was more credible than John’s. Substantial evidence supports the findings of the District Court as to this issue. Those findings are therefore affirmed.

II

Did the court err in assessing a rental rate for the pasturing of horses?

John contends that there was never any agreement that rent would be charged for the horses kept with the cattle. He argues that therefore no charges can be made.

Glenn testified that in June 1984 he told John that he would need to payfor grazing the horses. Glenn took no further action onhis claim for payment for the horses, however. He conceded that pasturage for three of the six horses kept with the cattle might reasonably be included in the cattle rental rate, because it would be reasonable to have three horses to work the cattle.

Though it did not set forth the theory under which it did so, the court found that Glenn was entitled to rent for three horses beginning in January 1985 when John unilaterally reduced his payments for the cattle. The law of implied contract, § 28-2-103, MCA, supports a finding that John should be required to pay Glenn for the pasturing of horses after Glenn told John to either pay for their grazing or remove them.

The rent the court allowed was at a rate which Glenn testified was the norm and was for only those horses not necessary to care for and work the cattle. John was ordered to pay rent for the horses only for the period in which the cattle grazing contract was in dispute, after Glenn had told John he would have to pay for the horses. We conclude that substantial evidence supports the finding that Glenn is entitled to compensation for pasturage of three horses for the months of January, February, March, and April 1985.

III

Did the court err in assessing prejudgment interest?

John points out that under § 27-1-211, MCA, prejudgment interest is assessed only on damages “certain or capable of being made certain by calculation and the right to recover which is vested in him upon a particular day.” John argues that Glenn’s damages were not certain or capable of being calculated until after trial.

The amount of rent due for the cattle was certain under the oral contract, which the court found continued in effect except for the month of December 1984. The amount owed for the hay was stipulated. But the amount owed for the horses was only determined after trial. John and Glenn had not agreed to a rate for the horses. Nor was it certain, until the court entered its order, for which months Glenn was entitled to grazing fees for the horses. We conclude that the grazing fees for the horses are not subject to prejudgment interest.

We agree with and repeat the statements of the District Court that this type of case should be settled between the two parties and that neither party may be satisfied with what the courts say.

Affirmed except as to the prejudgment interest on the grazing fees for horses.

JUSTICES HARRISON, BARZ, McDONOUGH and SHEEHY concur.


author: JUSTICE HUNT

text:
    IN THE MATTER OF D.G., A Youth in Need of Care.
    No. 89-595.
    Submitted May 16, 1990.
    Decided July 19, 1990.
    795 P.2d 489.

      Edmund F. Sheehy, Jr., Cannon & Sheehy, Helena, for appellant.
    Marc Racicot, Atty. Gen., Jennifer M. Anders, Asst. Atty. Gen., Mike McGrath, County Atty., Carolyn Clemens, Deputy County Atty., Randi Hood, Public Defender’s Office, Helena, for respondent.
   JUSTICE HUNT

delivered the Opinion of the Court.

Appellant L.G.H., the natural mother of D.G., appeals from the order of the District Court of the First Judicial District, Lewis and Clark County, terminating her parental rights. We affirm.

The issues raised on appeal are:

1) Whether the District Court erred in terminating appellant’s parental rights rather than awarding Department of Family Services long-term custody of D.G.
2) Whether the District Court abused its discretion in ordering the Department of Family Services to consider visitation by the appellant following adoption.

D.G. was bom on June 24, 1982, to appellant and G.G. Appellant also had two other children. Beginning approximately at the time of D.G.’s birth, a pattern of chronic neglect of all the children, as documented by the Department of Family Services (Department), began developing.

The State’s involvement with D.G.’s welfare was initiated in 1986 when D.G. was four years old. The Department began receiving numerous reports about D.G. alleging neglect, physically aggressive behavior, and inappropriate sexual conduct for a boy his age. After each report the Department discussed its concerns with appellant. Although appellant display a cooperative attitude, she repeatedly failed to follow through with counseling for D.G. or with the Department’s recommendations that D.G. participate in various services.

In response to these numerous reports and appellant’s failure to act, the Park County Attorney filed a petition requesting that the Department be given temporary investigative authority over D.G. Appellant signed a stipulation and treatment plan in August, 1987, which was approved by the court. Appellant and D.G. subsequently moved to Helena, Montana, resulting in a jurisdictional transfer of the petition to Lewis and Clark County.

On July 31, 1987, D.G. was placed in the child psychiatric unit of Shodair Children’s Specialty Hospital (Shodair) with appellant’s permission. The Shodair staff concluded that D.G. had been subjected to physical, emotional, psychological, and sexual abuse, and that his tantrums and manipulative behaviors were the result of a dysfunctional, abusive, and unstable family life.

Upon his release from Shodair in September, 1987, D.G. was placed in foster care. While in foster care, his behavior deteriorated. As a result, he was placed at the Intermountain Deaconess Home (Deaconess) for children.

In response to the petition of the Park County Attorney, a hearing was held in Lewis and Clark County and the court granted 90-day investigative authority to the Department. After the investigation was completed, the Lewis and Clark County Attorney’s office filed a petition for temporary custody and protective services. Ahearing was held at which the court found that D.G. was a youth in need of care. In June, 1988, the court granted the Department temporary custody of D.G. for a period of one year and directed the Department to prepare a treatment plan to be approved by the court. The treatment plan was prepared, signed by both parents, and subsequently approved by the court. Appellant failed to comply with this second treatment plan.

In February, 1989, appellant was sentenced to twenty-five years at the State Women’s Correctional Facility for the offense of criminal sale of dangerous drugs. Her sentence was amended by the Sentence Review Division of the Montana Supreme Court to twenty-five years with ten years suspended. With her amended sentence, appellant could be eligible for parole in approximately October, 1991. D.G. has been able to visit appellant on three or four occasions since her incarceration.

After the completion of the one-year temporary custody period, the County Attorney filed a petition to terminate appellant’s parental rights. The petition also requested that the parental rights of D.G.’s father be terminated. A hearing was held. Testimony by D.G.’s therapist at Deaconess, Dodie Heffner, indicated that D.G. will need continued therapy and that such therapy can only thrive in an atmosphere of consistency, security and stability. Heffner stated that she still sees aggressive behavior and anxiety in D.G. and that he will need a lot of time and attention. She stressed that D.G. needs a permanent placement and recommended a permanent adoptive home. However, Heffner also recommended that it would be in D.G.’s best interests to retain some regular contact with his mother. The County Attorney supported such a recommendation.

Following the hearing, the court terminated the parental rights of appellant and D.G.’s father, concluding that neither appellant nor D.G.’s father could presently provide the type of care which D.G. needs and it is unlikely that they would be able to do so in the foreseeable future. The court did recognize, however, that it would be in D.G.’s best interests to maintain continuing contact with appellant. Therefore, the court ordered that, before the Department consents to an adoption of D.G., consideration should be given as to whether the adoptive parents would voluntarily allow contact between appellant and D.G.

The first issue to be raised on appeal is whether the District Court erred in terminating appellant’s parental rights rather than awarding Department of Family Services long-term custody of D.G.

The standard of review on appeal is:

“[w]e will not disturb the District Court’s decision unless the findings of fact are not supported by substantial, credible evidence, or the conclusions of law amount to a clear abuse of discretion.”

Matter of V.B., 229 Mont. 133, 744 P.2d 1248 (1987). Section 41-3-609, MCA, lists the criteria the court must consider in terminating the parental rights of an individual. The court must find the following:

“(c) the child is adjudicated a youth in need of care and both of the following exist:
“(i) an appropriate treatment plan that has been approved by the court has not been complied with by the parents or has not been successful; and
“(ii) the conduct or condition of the parents rendering them unfit is unlikely to change within a reasonable time.”

Section 41-3-609(1)(c), MCA.

The treatment plan was approved by the court on August 23,1988, and had a six-month time frame. The evidence indicates that appellant’s compliance with the treatment plan had not even begun by the time appellant was jailed in early December, 1988. Athough appellant’s incarceration may have interfered with her ability to complete the treatment plan, her failure to even begin the plan within four months coupled with her consistent failure to complete parenting tasks previously assigned by the Department foretells of the potential failure of this treatment plan.

Athough not specifically considered by the court, it should be noted that § 41-3-609(4)(b), MCA, provides that a treatment plan is not required if “the parent is incarcerated for more than 1 year and such treatment plan is not practical considering the incarceration.” This section recognizes that a child may need help while a parent is incarcerated and that such help cannot be delayed pending the parent’s release. D.G. needs immediate help which cannot wait for appellant’s release.

Additionally, the court found that appellant’s conduct and condition are unlikely to change within a reasonable time. Section 41-3-609(2), MCA, provides the court with various factors to consider in making such a finding. These factors include “any reasonable efforts by protective service agencies that have been unable to rehabilitate the parent.” Section 41-3-609(2)(g), MCA.

The evidence indicates that, through repeated efforts, the Department has been unable to rehabilitate appellant. Appellant is unable to care for D.G. The Department was involved with appellant for a period of seven years during which time little or no progress was observed in appellant’s ability to parent any of her children. In fact, a chronic pattern of neglect was reported by the Department with respect to all three of appellant’s children. The reports of the Department combined with appellant’s current state of incarceration support the court’s finding that appellant’s condition and conduct are unlikely to change within a reasonable time.

Paramount to the court’s decision to terminate parental rights are the best interests of the child. Section 41-3-609(3), MCA. Although appellant argues that it would be in D.G.’s best interests to award the Department long-term custody of D.G. rather than terminating appellant’s parental rights, the evidence indicates otherwise.

Long-term custody would allow appellant to retain visitation rights and to petition the court to regain custody of D.G. See Matter of R.T.L.P., 238 Mont. 384, 777 P.2d 892, [46 St.Rep. 1354] (1989). Testimony by Dodie Heffner indicated that it was in D.G.’s best interests to have appellant’s parental rights terminated. D.G. is an extremely emotionally disturbed child who needs consistency, security, and stability. He needs a permanent placement, preferably in an adoptive home, and needs to know where he is going. Long-term custody will not provide the permanency that D.G. so desperately needs. Although both Heffner and the State indicated that continuing contact between appellant and D.G. may be in D.G.’s best interests, it is only a factor to be considered in evaluating his overall condition. The court’s termination of appellant’s parental rights was proper.

The second issue on appeal is whether the District Court abused its discretion in ordering the Department to consider visitation by the appellant following adoption.

This Court previously addressed this issue in Matter of V.B. We held that, even if visitation by the natural parent is in the child’s best interest, such visitation cannot be ordered if a parent’s rights have been terminated. Matter of V.B., 229 Mont. at 137, 744 P.2d at 1250. Based upon § 41-3-611(1), MCA, termination divests the natural parent of all rights over the child, including visitation. Matter of V.B., 229 Mont. at 137, 744 P.2d at 1250.

However, we also held that, although the court cannot order visitation, even with the Department’s approval, the court may order the Department to consider the availability of continuing contact between parent and child in the event of an adoption. Matter of V.B., 229 Mont. at 137, 744 P.2d at 1250. This continuing contact will only be allowed in exceptional cases. Matter of V.B., 229 Mont. at 137, 744 P.2d at 1250.

In this case, the court specifically concluded that, based upon the testimony of Heffner, this case is exceptional. The court ordered that the Department consider continuing contact in the event of an adoption. Such “restricted contact allowed by the court falls short of a visitation right” and is, therefore, within the District Court’s discretion. Matter of V.B., 229 Mont. at 137, 744 P.2d at 1250.

Affirmed.

JUSTICES HARRISON, BARZ, McDONOUGH and WEBER concur.