author: JUSTICE REGNIER

text:
    TRACY AUGUSTINE, Plaintiff and Appellant, v. SUSAN SIMONSON, and FARMERS INSURANCE EXCHANGE, Defendants and Respondents. JAY AUGUSTINE as GUARDIAN AD LITEM for CHASE AUGUSTINE, Plaintiff and Appellant, v. SUSAN SIMONSON, and FARMERS INSURANCE EXCHANGE, Defendants and Respondents. TRAVIS GRAY, Plaintiff and Appellant, v. SUSAN SIMONSON, and FARMERS INSURANCE EXCHANGE, Defendants and Respondents.
    Nos. 96-506, 96-507 & 96-508.
    Submitted April 1, 1997.
    Rehearing Denied July 31, 1997.
    Decided June 24, 1997.
    54 St.Rep. 589.
    283 Mont. 259.
    940 P.2d 116.

      For Appellants: Charming J. Hartelius (argued); Hartelius, Ferguson, Baker & Kazda; Great Falls.
    For Respondents: William J. Gregoire (argued) and Robert J. Vermillion; Smith, Walsh, Clarke & Gregoire; Great Falls.
   JUSTICE REGNIER

delivered the opinion of the Court.

Tracy Augustine, Jay Augustine, as guardian ad litem for Chase Augustine, and Travis Gray (collectively referred to herein as “the Augustines") filed three complaints against Susan Simonson and Farmers Insurance Exchange in the Eighth Judicial District Court. The complaints, arising out of an automobile accident, alleged that Simonson was liable for their personal injuries and that Farmers was liable for the damages in excess of the insurance proceeds available from Simonson pursuant to their underinsured motorist (UIM) coverage. On December 20, 1995, at a court-ordered mediation conference, the Augustines settled with Simonson. As a result, each claimant signed a release reserving their underinsured motorist claim against Farmers. The claims against Simonson were dismissed. Farmers filed a Rule 12(b)(6), M.R.Civ.R, motion to dismiss on January 25, 1996, based on the exhaustion clause contained in its UIM policy. The District Court issued an order granting the motion to dismiss on June 24,1996. The Augustines appeal from this order. We reverse.

The issue on appeal is whether the District Court erred in holding that the exhaustion clause in Farmers’ underinsurance policy was a valid contractual provision and thereby granting Farmers’ motion to dismiss.

FACTUAL BACKGROUND

On July 28, 1992, a vehicle driven by Susan Simonson rear ended a vehicle driven by Travis Gray. Tracy Augustine, Chase Augustine, and Cole Davison were passengers in Gray’s vehicle. Claims against Simonson and Farmers were made by Travis Gray, Tracy Augustine, and Jay Augustine on behalf of Chase Augustine. Cole Davison was a minor, age nine, at the time of the collision. No claim has been made on Cole’s behalf as of this date.

Simonson was insured by an American States insurance policy with an aggregate combined single limit of $100,000. On December 20, 1995, the Augustines settled with Simonson, reserving their claims against Farmers. Travis Gray’s claim was settled for $20,000. Tracy Augustine’s claim was settled for $16,875, and Chase Augustine’s claim was settled for $16,875. Approximately $1,100 was paid for property damage. Therefore, with one potential claim still outstanding, approximately $54,600 has been paid out on the American States policy, leaving approximately $45,400 remaining on the policy limits.

After the settlement, Farmers filed a motion to dismiss pursuant to Rule 12(b)(6), M.R.Civ.R, for failure to state a claim upon which relief could be granted. Farmers asserted that the Augustines failed to comply with the exhaustion clause in their underinsurance policy by entering into settlements which were less than the tort-feasor’s policy limits of liability. The District Court heard argument on the motion and ordered supplemental briefing by the parties. On June 20, 1996, the District Court issued an order in which the court recognized public policy reasons for invalidating exhaustion clauses, but declined to hold the clause invalid, reasoning that “it would be unwise to encroach on the legislative function in this area.” The Augustines appeal.

DISCUSSION

Did the District Court err in holding that the exhaustion clause in Farmers’ underinsurance policy was a valid contractual provision and thereby granting Farmers’ motion to dismiss?

The District Court’s order on the motion to dismiss was based in part upon facts outside of the pleadings. If a court considers matters outside of the pleadings on a Rule 12(b)(6), M.R.Civ.R, motion to dismiss, that motion is constructively converted into a motion for summary judgment regardless of how the order was phrased. See Rule 12(b), M.R.Civ.R; American Medical Oxygen Co. v. Montana Deaconess Medical Ctr. (1988), 232 Mont. 165, 168, 755 P.2d 37, 39. This Court reviews a district court’s grant of summary judgment de novo applying the same evaluation as the district court based on Rule 56, M.R.Civ.P. Motarie v. Northern Montana Joint Refuse Disposal Dist. (1995), 274 Mont. 239, 242, 907 P.2d 154, 156; Bruner v. Yellowstone County (1995), 272 Mont. 261, 264, 900 P.2d 901, 903. Summary judgment is proper when there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Rule 56(c), M.R.Civ.P.

The interpretation of an insurance contract in Montana is a question of law. Wellcome v. Home Ins. Co. (1993), 257 Mont. 354, 356, 849 P.2d 190, 192. This Court reviews questions of law to determine whether the lower court’s application or interpretation of the law is correct. Hollister v. Forsythe (1995), 270 Mont. 91, 93, 889 P.2d 1205, 1206; McGregor v. Madsen (1992), 253 Mont. 210, 212, 832 P.2d 779, 780.

The Augustines argue on appeal that the District Court erred when it determined that they must exhaust the tort-feasor’s insurance policy limits in order to make a claim for UIM coverage. They further assert that the term “exhaust” is ambiguous and therefore unenforceable. Farmers argues that the term “exhaust” is not ambiguous and that this Court should not rewrite the insurance policy by declaring the exhaustion clause invalid as violative of public policy.

We have previously held that if a contract’s terms are clear and unambiguous, the contract language will be enforced. Youngblood v. American States Ins. Co. (1993), 262 Mont. 391, 395, 866 P.2d 203, 205; Keller v. Dooling (1991), 248 Mont. 535, 539, 813 P.2d 437, 440; § 28-3-401, MCA. This Court has further held that the only exception to enforcing an unambiguous contract term is if that term violates public policy or is against good morals. Youngblood, 866 P.2d at 205; Amsterdam Lumber, Inc. v. Dyksterhouse (1978), 179 Mont. 133, 140, 586 P.2d 705, 709; § 28-2-701, MCA.

The Farmers policy at issue contains a standard exhaustion clause which provides: “We will pay under this coverage only after the limits of liability under any applicable bodily injury liability bonds or policies have been exhausted by payment of judgments or settlements.” We do not find the Augustines’ argument persuasive that the term “exhaust” in this clause is ambiguous. We conclude that there is only one reasonable interpretation of the clause in light of its purpose. Leibrand v. National Farmers Union Prop. and Cas. Co. (1995), 272 Mont. 1, 6, 898 P.2d 1220, 1223. The term requires that the insured entirely exhaust the limits of all existing bodily injury liability bonds or policies before he or she is entitled to proceed against the underinsured motorist carrier. We shall, therefore, examine the validity of the clause in light of public policy considerations.

Neither the Montana Legislature nor this Court have specifically addressed the issue of whether an exhaustion clause in an underinsurance policy is enforceable under public policy. This Court has, however, spoken generally as to the purpose of underinsurance. In Sorenson v. Farmers Ins. Exch. (1996), 279 Mont. 291, 927 P.2d 1002, we adopted a “no prejudice” rule as a matter of public policy and stated that “[t]he purpose of underinsured motorist insurance is to provide a source of indemnification for accident victims when the tortfeasor does not provide adequate indemnification.” Sorenson, 927 P.2d at 1005 (citing State Farm Mut. Auto. Ins. Co. v. Estate of Braun (1990), 243 Mont. 125, 130, 793 P.2d 253, 256). In Sorenson, the plaintiff settled with the tort-feasor and provided a release without obtaining the consent of her own underinsurance carrier. The insurer argued that when she settled and provided a release without the insurer’s consent, she was precluded from receiving her underinsured motorist coverage. In reversing the district court, we held that there was no prejudice to the insurer where the tort-feasor was judgment proof and, consequently, the insured’s actions would not compromise the insurer’s ability to subrogate. We explained the meaning of this no prejudice rule as “absent some showing of material prejudice to the underinsurance carrier, a claim for underinsured motorist coverage may not be precluded on a technicality.” Sorenson, 927 P.2d at 1004.

In its order on the motion to dismiss, the District Court devoted considerable attention to specific public policy reasons for not requiring adherence to exhaustion clauses. The court noted that not requiring the insured to fully exhaust the tort-feasor’s insurance serves a dual purpose of discouraging prolonged litigation and promoting early settlements, thereby providing the injured party with the relief when it is most needed. Numerous jurisdictions have agreed that these are important public policy reasons and that exhaustion clauses violate public policy. For instance, Justice Holmes of the Ohio Supreme Court observed:

There are of course a number of considerations which militate in favor of settlement between the underinsured tortfeasor’s insurer and the injured party. Obviously, settlement avoids litigation with its attendant expenses and resultant burden upon the legal system. Where the amount of settlement is less than the policy limits, the unpaid amount may well represent the savings in litigation costs for both sides. More importantly, settlement hastens the payment to the injured party who obviously needs compensation soon after the injuries when the medical expenses begin to amass and when the anxiety level is probably quite high. Additionally, there are many situations where litigation would not be a preferred course of action because, while the injuries are certain, there may remain other problems of proof. Thus, the public policy considerations, apart from the contract of the parties, generally favor settlements.

Bogan v. Progressive Cas. Ins. Co. (Ohio 1988), 521 N.E.2d 447, 451, modified in part on other grounds, McDonald v. Republic-Franklin Ins. Co. (Ohio 1989), 543 N.E.2d 456.

The Supreme Court of Nevada also determined that exhaustion clauses violate public policy because

they unnecessarily promote litigation costs, increase the number of trials, and unreasonably delay the recovery of underinsured motorist benefits. Specifically, these cases point out that an insured may have valid reasons for accepting less than the tortfeasor’s policy limit, that an “underinsured motorist carrier” can compute its payments to the insured as if the insured had exhausted the tortfeasor’s policy limit, and that if an “exhaustion clause” is in effect, the tortfeasor’s carrier can force the plaintiff to go to trial by offering less than the tortfeasor’s policy limit, thereby greatly increasing litigation costs and expenses and promoting delay. See Mulholland v. State Farm Mutual Auto Ins. Co., 171 Ill.App.3d 600, 122 Ill.Dec. 657, 527 N.E.2d 29 (1988); Schmidt v. Clothier, 338 N.W.2d 256 (Minn. 1983) (superseded by statute); Longworth v. Van Houten, 223 N.J.Super. 174, 538 A.2d 414 (App.Div.1988); Hamilton v. Farmers Ins. Co. of Washington, 107 Wash.2d 721, 733 P.2d 213 (1987).

Mann v. Farmers Ins. Exch. (Nev. 1992), 836 P.2d 620, 621.

In sum, the policy reasons for not enforcing exhaustion clauses include the following rationales. Exhaustion clauses promote litigation expenses which lessen the insured’s net recovery. The time involved in litigation serves to delay payment of UIM benefits to the insured. Furthermore, such clauses fail to recognize that the insured may have a legitimate and valid reason for accepting less than the tort-feasor’s policy limits, i.e., the cost and risk of litigation and issues of proof. They fail to consider that the underinsured carrier can compute its payments to the insured as if the insured had exhausted the tort-feasor’s policy, thereby not prejudicing the UIM carrier. Finally, under an exhaustion clause the tort-feasor’s carrier can force the injured party to go to trial by offering less than the policy limits, thereby increasing costs, litigation, and delay.

We conclude that this reasoning is consistent with the public policy of this State. It is also consistent with the purpose of underinsurance, to provide indemnification for accident victims when the tort-feasor does not provide adequate indemnification. Sorenson, 927 P.2d 1002. Furthermore, it is consistent with the declared public policy of this State to encourage settlement and avoid unnecessary litigation. Holmberg v. Strong (1995), 272 Mont. 101, 106, 899 P.2d 1097, 1100. Therefore, we conclude that the provision requiring that the tort-feasor’s liability insurance be entirely exhausted as a prerequisite to securing indemnification from the underinsured motorist coverage is contrary to the public policy of the State of Montana and is unenforceable to the extent that it violates public policy.

Jurisdictions which have held exhaustion clauses to be unenforceable as against public policy have resolved the exhaustion requirement using different methods. Some jurisdictions have held that exhaustion clauses can be fulfilled when the claimant settles with the tort-feasor’s insurance company and leaves only a reasonable amount on the table which could be said to represent a savings for both parties as costs of avoided litigation. See, e.g., Bogan, 521 N.E.2d 447; Leuchtenmacher v. Farm Bureau Mut. Ins. Co. (Iowa 1990), 461 N.W.2d 291. This determination often requires an evidentiary hearing to determine if the amount left on the table does represent a savings for both parties as avoided costs of litigation. It also requires representative counsel to provide depositions or testify as to potential litigation costs. This process then requires the lower court to apply a subjective test to determine what comprises a reasonable amount left on the table. This determination becomes even more complex when the factual situation involves multiple claimants, some of whom might have outstanding claims at the time one settlement is reached.

Requiring additional litigation to determine whether an exhaustion clause has been substantially fulfilled would only further frustrate our previously stated public policy of encouraging settlement, and not delaying the payment of claims and increasing the costs and burdens borne by the insured in obtaining compensation. A more prudent approach, and the one we hereby adopt today, does not prejudice the underinsurance carrier, nor does it place additional burdens of time and litigation costs on insureds seeking to recover on their underinsurance policies.

To prevent unnecessary litigation and yet fulfill the contract made between the insurer and its insured, the insured may proceed to bring his or her claim against their UIM carrier whether or not they have fully exhausted the tort-feasor’s insurance policy limits. A claim must first be made with the tort-feasor’s insurance company. This claim, however, does not have to be finally disposed of before proceeding against the underinsurer. In the case of an individual claimant, the underinsurance coverage liability then commences only when the insured’s damages exceed the stated limit of the tort-feasor’s liability insurance, thus making the insured responsible for any gap between the amount of settlement and the tort-feasor’s liability limits. The underinsurer shall receive credit, however, for the full amount of the tort-feasor’s policy limits.

In a situation where multiple claimants seek to recover the proceeds of a single policy, such as we have here, there are additional considerations. In most instances, the nature and extent of the injuries suffered by the individual claimants will differ. As a workable solution, we adopt the following procedure. The limits of the tort-feasor’s policy shall be divided among the claimants, in an equal pro rata share, for the purpose of considering exhaustion. This share, or the amount of the tort-feasor’s insurance actually received by the claimant, whichever is greater, shall then be credited to their individual underinsurers as being the “limits” of the tort-feasor’s policy.

We can foresee some instances where the claimant may nevertheless want to proceed to exhaust the policy. In a multiple claim-single limit situation, a claimant may receive a minimal settlement because the other claimants may have comparatively more serious injuries. The amount received may be significantly less than the value of the claim, but considerably under the pro rata set off. There is nothing to prevent such a claimant from fully “exhausting” the policy under traditional methods and then proceeding against the underinsurer.

In sum, the underinsurer is not prejudiced by allowing a claim for underinsurance to proceed regardless of whether the tort-feasor’s policy limits have not been fully exhausted because the underinsurer receives a credit for the policy limits. This procedure still provides protection to an insurance company against a demand by its insured to fill the gap after a weak claim has been settled for an unreasonably small amount, yet it provides prompt payment to the insured and does not lessen the insured’s recovery by requiring him or her to pay additional litigation costs and delay the payment of claims. Furthermore, this method bypasses the necessity of litigating the determination of whether a policy has been exhausted by a settlement leaving only a reasonable amount on the table reflecting saved costs of avoided litigation.

Although we agree with the District Court’s statement of public policy, we reverse the District Court’s decision and remand for further proceedings consistent with this opinion.

CHIEF JUSTICE TURNAGE, JUSTICES GRAY, LEAPHART, NELSON, HUNT and TRIEWEILER concur.


source: Caselaw Access Project

author: JUSTICE GRAY

license: Public Domain

text:
    IN RE THE MARRIAGE OF RITA ANN BROWN, Petitioner and Appellant, and TORGER SPENCER OAAS, Respondent and Respondent.
    No. 96-536.
    Submitted on Briefs March 20, 1997.
    Decided June 24, 1997.
    54 St.Rep. 594.
    283 Mont. 269.
    940 P.2d 122.

      For Appellant: Mariah Eastman, Attorney at Law, Lewistown.
    For Respondent: Torger S. Oaas, Attorney at Law, Lewistown.
   JUSTICE GRAY

delivered the Opinion of the Court.

Rita Ann Brown (Brown) appeals from the order of the Tenth Judicial District Court, Fergus County, reducing her maintenance. We affirm.

The sole issue on appeal is whether the District Court abused its discretion in reducing Brown’s maintenance.

Brown and Torger Spencer Oaas (Oaas) were married in Lewistown, Montana, in 1980. They had two children during their marriage.

Brown petitioned for dissolution of the marriage in October of 1992. The parties agreed on the disposition of the marital estate; Brown received the family home, subject to any remaining indebtedness thereon, and a 1986 van and Oaas received his law practice, subject to existing indebtedness. They also agreed to joint custody of their two children, with Brown as the primary residential custodian. Oaas agreed to pay $850 per month in child support, or $425 per minor child. The parties were unable to reach an agreement regarding maintenance.

During the dissolution hearing on December 9, 1993, the parties informed the District Court of the substance of their dissolution agreement and read it into the record in its entirety. The court indicated that it would adopt the agreement and make findings and conclusions to that effect. The parties also indicated that the maintenance issue remained unresolved, and the court heard testimony and admitted other evidence on that issue. After the hearing, the parties reduced their dissolution agreement to writing and properly executed it.

The District Court subsequently entered findings of fact and conclusions of law adopting the parties’ dissolution agreement and resolving the maintenance issue. Regarding maintenance, the court found that Brown was employable, but that her employment opportunities in Fergus County were limited; that Brown received little income-producing property, had substantial debt and would require a substantial monthly income to maintain the family residence; and that, at the time of the dissolution, Brown did not have the ability to support herself and would require maintenance for a period of time. Based on those findings, the District Court concluded that Brown was entitled to maintenance and ordered Oaas to pay her maintenance in the amount of $600 per month plus additional $1,000 payments on April 1st and September 1st of each year, for a total of $9,200 each year. The court also determined, based on the evidence presented, that “both parties will have to adjust their expectations and life styles to accommodate the realities of their situations.” A decree dissolving the parties’ marriage was entered on February 24,1994, and neither party appealed.

In February of 1996, Oaas moved the District Court to reduce or terminate maintenance, contending that there had been a change in circumstances so substantial as to warrant modifying the maintenance award. After a hearing on the motion, the District Court entered findings of fact and conclusions of law determining that a substantial and continuing change in circumstances had occurred and that modification of Brown’s maintenance was warranted under § 40-4-208(2)(b)(i), MCA. The court reduced Brown’s maintenance award from $600 to $300 a month, but left intact the additional $ 1,000 maintenance payments due on April 1st and September 1st of each year. The court’s modified maintenance award to Brown totals $5,600 per year, a reduction of $3,600 from the original award. Brown appeals.

Did the District Court abuse its discretion in reducing Brown’s maintenance?

Section 40-4-208(2)(b)(i), MCA, provides that a decree containing provisions relating to maintenance may be modified only “upon a showing of changed circumstances so substantial and continuing as to make the terms unconscionable.” Section 40-4-208(2)(b)(i), MCA, does not define the term unconscionable and we have declined to do so; rather, the interpretation of unconscionability must be made via case-by-case scrutiny of the underlying facts. In re Marriage of Hagemo (1988), 230 Mont. 255, 259, 749 P.2d 1079, 1082 (citation omitted).

Here, the District Court held a hearing and made numerous findings regarding each party’s financial status, and the changes in Brown’s financial status since the dissolution of the parties’ marriage. Based on those findings, the court determined that there had been a substantial and continuing change in circumstances which rendered its prior maintenance award unconscionable and reduced the award accordingly. Brown argues that the District Court erred in doing so.

We generally review a district court’s findings of fact under the clearly erroneous test. Rule 52(a), M.R.Civ.P.; Burris v. Burris (1993), 258 Mont. 265, 269, 852 P.2d 616, 619. A court’s findings are clearly erroneous if they are not supported by substantial credible evidence, the court has misapprehended the effect of the evidence, or our review of the record convinces us that a mistake has been committed. Burris, 852 P.2d at 619.

We recently have clarified, however, that a district court’s determinations regarding “changed circumstances” and “unconscionability” under § 40-4-208(2)(b)(i), MCA, are discretionary rulings. In re Marriage of Clyatt (1994), 267 Mont. 119, 122-23, 882 P.2d 503, 505; In re Marriage of Barnard (1994), 264 Mont. 103, 106, 870 P.2d 91, 93. While Marriage of Clyatt and Marriage of Barnard involved modifications of child support rather than of maintenance, § 40-4-208(2)(b)(i), MCA, governs both types of modification. Therefore, while we will continue to apply the clearly erroneous standard in reviewing actual findings of fact in maintenance modification cases, we will review a district court’s “changed circumstances” and “unconscionability” determinations under § 40-4-208(2)(b)(i), MCA, under the abuse of discretion standard.

Brown contends that the District Court’s finding that “[t]he present level of maintenance is unnecessary to maintain [Brown] and the children” is not supported by substantial credible evidence and is clearly erroneous. This finding was based, in turn, on underlying findings regarding Brown’s employment, her ability to continue her employment, her acquisition of investment property and personal property, and her cohabitation with, and supporting of, Robert Britzius (Britzius). Therefore, before addressing whether the District Court’s ultimate finding regarding the necessity of the original level of maintenance is clearly erroneous, we will first determine whether substantial credible evidence supports the court’s underlying findings.

Brown testified that she began working at the Yogo Inn in July of 1994, but the position ended in January of 1995. Since June 1,1995, she had been employed at the Western Lounge. Brown testified that she worked approximately thirty-two hours per week, earned $6.50 per hour plus tips, and could work full-time if she chose to do so. She stated at one point that she earns approximately $600 per month and, later, that she earns approximately $744 per month. In any event, the record is clear that Brown earns at least $600 per month from her employment at the Western Lounge.

Brown also testified regarding her acquisition of investment property. After the dissolution, she remortgaged the family home — which was almost entirely paid off — and purchased a four-bedroom home on twelve acres of land as an investment. She acquired the investment property in September of 1994, after she began working and earning an income. Brown testified that she earns $300 per month from the rental property, which is approximately $54 less than the monthly mortgage payment on the property. She did not purchase the property for rental income, however; rather, she purchased it as an investment and plans to sell it at a profit. Brown also purchased a vehicle on which she was making payments at the time of the hearing, and two snowmobiles for approximately $4,800.

According to Brown’s testimony, her savings have been nearly depleted due to her increased debt. The District Court recognized that Brown’s net worth had decreased but found that she was attempting to maintain a lifestyle beyond her means and that this was her choice. In any event, substantial evidence of record supports the District Court’s findings that, since the dissolution, Brown borrowed and repaid money, acquired investment and personal property, and became and remained employed.

With regard to Brown’s cohabitation with Britzius, the court found that Brown essentially was supporting Britzius. According to Oaas, Britzius has been living with Brown since December of 1994. He stated that his testimony in this regard was based on what his children had told him as well as on his own personal observations— specifically, that Britzius is always at Brown’s residence when he drops off or picks up his children there approximately twenty-five times per month. Oaas also entered a photograph into evidence which demonstrated that Britzius used one of Brown’s vehicles to travel to his place of employment in Judith Gap. In addition, Oaas testified that he had seen Britzius driving Brown’s other vehicle on a separate occasion. Sandee Britzius, Britzius’ ex-wife, testified that when she calls Britzius, she is able to reach him approximately 75% of the time at Brown’s residence rather than at Britzius’ listed telephone number. She further testified that her and Britzius’ children were able to reach Britzius most often at Brown’s residence. Brown and Oaas agree that Britzius does not contribute to the expenses of Brown’s household. Thus, substantial evidence supports the District Court’s finding.

Brown points out that she and Britzius testified that Britzius does not live with her and that she does not support him. The District Court found to the contrary, however, based on the entirety of the evidence and the candor, appearance and demeanor of the witnesses. We must give due regard to the court’s opportunity to judge the credibility of witnesses. See Rule 52(a), M.R.Civ.R Moreover, “when the record contains conflicting evidence, ‘ [i]t is the function of the District Court to resolve such conflicts.’ ” In re Marriage of Abrahamson (1996), 278 Mont. 336, 342, 924 P.2d 1334, 1338 (quoting In re Marriage of Penning (1989), 238 Mont. 75, 78, 776 P.2d 1214, 1216). We will not substitute our judgment for that of the district court on such matters. Marriage of Abrahamson, 924 P.2d at 1338.

We conclude that the District Court’s underlying findings regarding Brown’s employment, her ability to continue her employment, her acquisition of personal and investment property and her cohabitation with, and supporting of, Britzius are supported by substantial credible evidence and are not otherwise clearly erroneous. Moreover, the evidence supporting these findings also establishes changed circumstances. Specifically, since the dissolution, Brown has become employed; purchased investment property, one vehicle and two snowmobiles; borrowed and paid back money; and cohabits with Britzius, at least on a part-time basis, without any financial contribution from him for the upkeep of the family home. In other words, the evidence in this case indicates that, since the dissolution, Brown has demonstrated an ability to help meet the financial requirements of maintaining the family home and supporting herself. Therefore, we further conclude that the District Court’s ultimate finding that the original level of maintenance is no longer necessary is supported by substantial credible evidence; the court did not misapprehend the effect of the evidence and our review of the record does not suggest that a mistake has been committed.

Brown also challenges the District Court’s determination that the change in circumstances in this case has been substantial and continuing, rendering the original maintenance award unconscionable. As we stated above, determinations regarding “changed circumstances” and “unconscionability” under § 40-4-208(2)(b)(i), MCA, are discretionary rulings; accordingly, we will reverse such determinations only where the trial court has abused its discretion. See Marriage of Barnard, 870 P.2d at 93.

Brown’s arguments regarding the District Court’s determination that there are changed circumstances so substantial and continuing so as to render the original maintenance award unconscionable are premised entirely on her dissatisfaction with the District Court’s cohabitation-related findings. First, Brown incorrectly assumes that the court’s modification of her maintenance award was based entirely on its finding that she cohabits with, and helps support, Britzius. As illustrated in the foregoing discussion, however, that was not the case. Brown’s cohabitation with Britzius was only one of the numerous changed circumstances leading the District Court to determine that the original maintenance award was unconscionable.

In a related argument, Brown contends that cohabitation alone is not a substantial change in circumstances making the original maintenance award unconscionable. We agree with the underlying premise of Brown’s argument and, indeed, have so held in past decisions. See, e.g., In re Marriage of Bross (1993), 256 Mont. 174, 180, 845 P.2d 728, 731. We have not held, however, that cohabitation cannot be a factor in determining whether there have been changed circumstances. Here, the District Court considered all of the evidence, including cohabitation-related evidence coupled with evidence that Brown is supporting Britzius. Thus, the District Court’s determination that there are substantial and continuing changed circumstances in this case making the original maintenance award unconscionable was not based solely on its cohabitation-related findings. As a result, Brown’s argument in this regard is without merit.

We conclude that the District Court did not abuse its discretion in determining that the original maintenance award was unconscionable based on the substantial and continuing changed circumstances in this case.

Affirmed.

JUSTICES HUNT, NELSON and REGNIER concur.


text:
    IN THE MATTER OF LITIGATION RELATING TO THE RIOT OF SEPTEMBER 22, 1991, AT THE MAXIMUM SECURITY UNIT OF THE MONTANA STATE PRISON.
    No. 96-539.
    Submitted on Briefs May 15, 1997.
    Decided June 24, 1997.
    54 St.Rep. 598.
    283 Mont. 277.
    939 P.2d 1013.

      For Appellants: John H. Maynard, Marcia Davenport; Browning, Kaleczyc, Berry & Hoven, Helena; Norman C. Peterson, Assistant Attorney General, Agency Legal Services Bureau, Helena.
    For Respondents: William Boggs, Attorney at Law, Missoula; Michael D. Cok, Attorney at Law, Bozeman; Wendy Holton, Attorney at Law, Helena; Kerry N. Newcomer; Geiszler & Newcomer, Missoula; Scott C. Wurster; Attorney at Law, Kalispell.
   JUSTICE GRAY

delivered the Opinion of the Court.

The individual defendants in numerous legal actions arising out of the 1991 riot at the Montana State Prison appeal from an order of the Third Judicial District Court, Powell County, denying their motions for summary judgment which were based on qualified immunity. We dismiss the appeal, award sanctions and remand to the District Court for determination of the amount of the sanctions and for further proceedings.

The dispositive issue on appeal is whether this Court has jurisdiction to consider the appeal.

BACKGROUND

On September 22, 1991, a riot occurred at the Montana State Prison (MSP). Stated briefly, maximum security inmates breached security devices and systems and took over the Maximum Security Unit (Max). Scores of maximum security inmates were freed from their cells and access was gained to inmates housed in the Max in “protective custody” for the purpose of safeguarding them from perceived risks of harm from other inmates. Five protective custody inmates were killed and attempts were made to kill eight others, some of whom received serious injuries. Both external and internal investigations were undertaken at the behest of the Montana Department of Corrections (Department), including the “Riot at Max Report,” also called the “Schwartz Report,” and the “Gooch Report.” The results of the investigations generally were not favorable to the manner in which prison employees operated the Max.

Substantial litigation ensued, including the negligence and civil rights cases underlying this appeal. In these cases, brought by the estates of deceased protective custody inmates and by surviving protective custody inmates, the State of Montana is the primary defendant in negligence claims against employees at the MSP, on a respondeat superior basis; individual supervisory employees and the Department are the defendants in civil rights claims brought under 42 U.S.C. § 1983. The thrust of the § 1983 actions is the alleged breach by the individual defendants of their constitutional duty to use reasonable care to ensure the safety of incarcerated inmates. Both the plaintiffs and the defendants filed and briefed numerous motions and the District Court heard oral argument.

On July 15,1996, the District Court entered an Opinion and Order on Pending Motions. Among other rulings, the court determined that the final conclusions in the Schwartz Report and the Gooch Report were admissible into evidence and that the authors of those reports were qualified to testify as experts in their respective fields of prison administration and personnel administration. The court also granted the plaintiffs’ motion for summary judgment on liability, concluding that reasonable minds could reach only one conclusion — namely, that the defendants’breach of their duty to safely operate the Max directly contributed to the riot and the resulting damages and injuries. Finally, the District Court denied the individual defendants’ motions for summary judgment on the § 1983 claims, which were based on qualified immunity. In the latter regard, it concluded that questions of fact existed as to the defendants’knowledge of the substantial risk of harm to the protective custody inmates in the Max at the time of the riot and the obviousness of the risk, and that these questions relating to the reasonableness of the defendants’ conduct must be resolved by the trier of fact. The individual defendants appeal from the District Court’s denial of their qualified immunity-based motions for summary judgment.

Does this Court have jurisdiction to consider this appeal?

The defendants present a number of arguments relating to asserted errors by the District Court in denying their motions for summary judgment. The plaintiffs, however, raise the threshold issue of whether we have jurisdiction to entertain the appeal. We conclude that the appeal is premature and, as a result, we do not have jurisdiction to consider it.

This Court’s jurisdiction is set forth in Article VII, Section 2 of the 1972 Montana Constitution. Specifically, Article VII, Section 2(1), vests us with appellate jurisdiction and Article VII, Section 2(3), authorizes us to make rules governing appellate procedure.

The Montana Rules of Appellate Procedure, duly adopted by this Court, govern appeals to this Court from Montana district courts. Rule 1(b)(1), M.R.App.R, expressly provides that an appeal may be taken from a final judgment entered in an action in a district court. A final judgment is one wherein a final determination of the rights of the parties has been made; any decree which leaves matters undetermined is interlocutory in nature and not a final judgment for purposes of appeal. Kirchner v. W. Mont. Mental Health Ctr. (1993), 261 Mont. 227, 229, 861 P.2d 927, 929 (citations omitted). Although the defendants do not address the matter, it is inarguable that the District Court’s order denying the defendants’motions for summary judgment left matters unresolved. Moreover, it has long been the law in Montana that an order denying a motion for summary judgment is not a final judgment. See Brown v. Midland Nat. Bank (1967), 150 Mont. 422, 429, 435 P.2d 878, 881-82. Thus, it is clear that the defendants’ appeal to this Court is not an appeal from a final judgment.

Nor is the defendants’ appeal authorized by subsection (2) or (3) of Rule 1(b), M.R.App.P. Those subsections expressly authorize appeals from specified interlocutory orders; however, orders denying summary judgment are not included in the delineated orders from which an appeal can be taken. See Rules 1(b)(2) and (3), M.R.App.R

Pursuant to the Montana Rules of Appellate Procedure, therefore, the defendants’ appeal is premature. A premature appeal must be dismissed for lack of jurisdiction. Kirchner v. Western Montana Mental Health Center (1995), 272 Mont. 110, 112-13, 899 P.2d 1102, 1104; Kirchner, 861 P.2d at 929; In re Marriage of Rex (1982), 199 Mont. 328, 330, 649 P.2d 460, 461.

The defendants do not address Montana law regarding the appealability of the District Court’s order denying their motions for summary judgment based on qualified immunity in any fashion. Rather, they contend that “the record is ripe for appeal” and that federal authority establishes the appealability of at least a portion of the District Court’s order. We address the contentions in turn.

We observe, initially, that the defendants cite to no authority in support of their “ripe for appeal” contention. The reason, of course, is that no such authority exists. The fact that, in the defendants’ view, the current record “may easily be reviewed by this Court” is irrelevant to the issue of whether the District Court’s order denying motions for summary judgment is appealable at this time, thus vesting jurisdiction in this Court to entertain the appeal. Indeed, the defendants’ suggestion that a record “ripe for appeal” or “easily reviewable” somehow renders an order entered on that record appealable — carried to its logical extreme — would totally nullify Rule 1, M.R.App.P., by allowing interlocutory appeals of virtually all interlocutory orders; this is so because the records on which district courts are requested to enter such orders presumably also are “ripe.” In short, the defendants’ contention in this regard is totally without merit.

Nor is the defendants’ assertion of federal authority regarding the appealability of an unfavorable order on a motion for summary judgment based on qualified immunity in a § 1983 action well taken. As background to our discussion of the defendants’ position in this regard, we briefly set forth recent federal decisional history regarding the appealability of orders denying qualified immunity in § 1983 civil rights actions.

By 1985, the United States Circuit Courts of Appeals had divided on the issue, with the First, Eighth and District of Columbia Circuits holding that such orders were appealable and the Third, Fifth and Seventh Circuits holding that they lacked jurisdiction over interlocutory appeals of qualified immunity rulings. Cf. Krohn v. United States (1st Cir. 1984), 742 F.2d 24; Evans v. Dillahunty (8th Cir. 1983), 711 F.2d 828; McSurely v. McClellan (D.C. Cir. 1982), 697 F.2d 309; with Forsyth v. Kleindienst (3rd Cir. 1984), 729 F.2d 267; Kenyatta v. Moore (5th Cir. 1984), 744 F.2d 1179; Lightner v. Jones (7th Cir. 1985), 752 F.2d 1251.

The United States Supreme Court resolved the division among the Circuit Courts over the appealability of interlocutory decisions denying qualified immunity to § 1983 defendants in Mitchell v. Forsyth (1985), 472 U.S. 511, 105 S.Ct. 2806, 86 L.Ed.2d 411. There, the federal district court had denied the defendant’s motion for summary judgment based on qualified immunity, concluding that the defendant’s actions violated clearly established law, and the Third Circuit held that the order was not appealable. Mitchell, 472 U.S. at 517-19, 105 S.Ct. at 2811 (citations omitted).

The Supreme Court began its analysis by observing that 28 U.S.C. § 1291, the federal statute delineating the appellate jurisdiction of the Circuit Courts, vested those courts with jurisdiction only from “final decisions” of the federal district courts. Noting that a decision which was “final” within the meaning of § 1291 did not necessarily mean the last order which could possibly be made in a case, the Supreme Court focused on its collateral order doctrine, under which a district court decision is appealable if it falls within

“that small class which finally determine claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated.”

Mitchell, 472 U.S. at 524, 105 S.Ct. at 2814 (quoting Cohen v. Beneficial Industrial Loan Corp. (1949), 337 U.S. 541, 546, 69 S.Ct. 1221, 1225, 93 L.Ed. 1528, 1536).

The Supreme Court then applied its decisional law interpreting the federal appellate jurisdiction statute to the appealability of the federal district court’s denial of the defendant’s motion for summary judgment on the basis of qualified immunity. Reiterating the well-established standard of qualified immunity articulated in Harlow v. Fitzgerald (1982), 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396, that a § 1983 defendant is entitled to immunity as long as his or her actions do not violate “clearly established statutory or constitutional rights of which a reasonable person would have known,” the Supreme Court held that an order denying a claim of qualified immunity is an appealable “final decision” under § 1291 to the extent the denial turns on an issue of law, even though it is not a final judgment in the case. Mitchell, 472 U.S. at 523-25, 528-30, 105 S.Ct. at 2814, 2817. Stated more narrowly, the Mitchell Court concluded that the Circuit Courts have jurisdiction to entertain an appeal from a federal district court’s denial of qualified immunity where the basis for the denial is that clearly established law proscribed the defendant’s alleged actions. Mitchell, 472 U.S. at 526-28, 105 S.Ct. at 2816.

The Supreme Court again addressed the appealability of decisions denying qualified immunity in § 1983 actions in Johnson v. Jones (1995), 515 U.S. 304, 115 S.Ct. 2151, 132 L.Ed.2d 238. The issue was whether the Circuit Courts have jurisdiction to entertain an appeal from an order denying qualified immunity on the basis that the evidence created a genuine issue of fact requiring trial; in that context, the Supreme Court revisited § 1291, the Cohen collateral order doctrine and Mitchell. Johnson, 515 U.S. at _, 115 S.Ct. at 2154-56. The Supreme Court affirmed the Seventh Circuit’s conclusion that a decision denying qualified immunity because sufficient evidence existed to create a genuine issue of fact requiring trial was not appealable, holding that a defendant entitled to invoke a qualified immunity defense “may not appeal a district court’s summary judgment order insofar as that order determines whether or not the pretrial record sets forth a ‘genuine’ issue of fact for trial.” Johnson, 515 U.S. at _, 115 S.Ct. at 2159.

The Ninth Circuit recently followed Mitchell and Johnson, holding that it had

jurisdiction to review the federal district court’s decision that the defendants’ alleged conduct violated clearly established law, but the collateral order doctrine does not provide appellate jurisdiction to review the district court’s decision that genuine issues of material fact exist for trial.

Armendariz v. Penman (9th Cir. 1996), 75 F.3d 1311, 1317. As a result, the Ninth Circuit dismissed the appeal to the extent it raised issues of whether genuine issues of material fact exist, but addressed and reversed the federal district court’s decision regarding whether the defendants’ alleged conduct violated clearly established law. Armendariz, 75 F.3d at 1328.

In the case presently before us, the individual defendants advance Mitchell and Johnson as authorizing the appealability of at least the ‘legal portion” of the District Court’s order denying summary judgment, that is, the portion of the denial of summary judgment relating to whether their alleged conduct violated clearly established law. They point out that the Ninth Circuit has followed those Supreme Court opinions.

The flaws in this argument are both clear and inescapable, however. First, the Supreme Court cases interpret the appellate jurisdiction of the federal circuit courts of appeals under § 1291, the federal statute governing that jurisdiction, and its own cases thereunder. However, the federal jurisdictional statute is unrelated to the sources of this Court’s appellate jurisdiction which, as set forth above, are the Montana Constitution and the Montana Rules of Appellate Procedure duly adopted thereunder by this Court. Nor have we adopted a collateral order doctrine in interpreting Rule 1(b)(1), M.R.App.P., as the Supreme Court has done in interpreting the federal appellate jurisdiction statute. As discussed above, the sources of this Court’s appellate jurisdiction do not vest us with jurisdiction to entertain an appeal from an order denying motions for summary judgment which were based on qualified immunity.

Moreover, with regard to the defendants’ reliance on Armendariz, it is hardly surprising that the Ninth Circuit would follow the Supreme Court’s interpretations of the federal appellate jurisdiction statute; it is duty bound to do so. We are not so bound, since our appellate jurisdiction rests on Montana law.

We note that other state courts have addressed the appealability of orders such as the one at issue here in light of the Supreme Court’s decisions. Some courts have concluded that they either should or must be bound thereby. See, e.g., Anderson v. City of Hopkins (Minn. 1986), 393 N.W.2d 363 (accepting the Mitchell Court’s reasoning in construing its own appellate jurisdiction, without determining whether Mitchell mandates such a result); McLin v. Trimble (Okla. 1990), 795 P.2d 1035 (concluding that, while Mitchell is a mandate to state courts, the Supremacy Clause cannot create jurisdiction in a state appellate court where it does not otherwise exist and, as a result, exercising its original jurisdiction). Other state courts have rejected the proposition that Mitchell (or its progeny) has any effect on their state appellate procedure. See, e.g., Klindtworth v. Burkett (N.D. 1991), 477 N.W.2d 176 (concluding that state appellate jurisdiction sources dictate the outcome of the appealability issue and, on that basis, dismissing an appeal from an order denying a qualified immunity-based summary judgment motion); Noyola v. Flores (Tex. App. 1987), 740 S.W.2d 493; Civil Service Emp. Ass’n v. Moritz (Ohio App. 1987), 529 N.E.2d 1290.

As noted above, the defendants in this case advanced no arguments pursuant to which their appeal was properly before us under Montana law. Similarly, they advance no arguments under which we either should, or must, be bound by the Supreme Court’s Mitchell and Johnson holdings with regard to the appealability of the order at issue here. Since the defendants have failed to do so and, as a result, have failed to establish that we have jurisdiction over this appeal, we decline to address the question further.

One final note with regard to the individual defendants’ appeal is appropriate. The defendants’ notice of appeal from the District Court’s denial of their motions for summary judgment was filed on August 15, 1996. In the notice, the defendants request that “[i]n the event the Montana Supreme Court deems applicable or preferable a procedure other than an appeal, Defendants respectfully request the Montana Supreme Court treat their notice of appeal as an application to invoke the designated procedure.” This appears to be a suggestion that we should determine for the defendants whether some procedure other than an appeal is appropriate here and, if so, then somehow convert their notice of appeal, and briefs on appeal, into documents appropriate to such an alternative procedure. It is not this Court’s job to do so. A notice of appeal filed by counsel on behalf of a party is precisely that; it is a notice that the party is bringing an appeal pursuant to the Montana Rules of Appellate Procedure. It is the party’s obligation to support the appeal jurisdictionally, procedurally and on the merits. Correspondingly, it is not for this Court to be an advocate for a represented party by negating the judgments made by counsel as to the proper procedural mechanism for bringing a matter before this Court. Moreover, as counsel is aware, alternative means of proceeding before this Court arise under a jurisdictional source separate from that governing an appeal and are governed by different rules and requirements. See, e.g., Article VII, Section 2(2) of the Montana Constitution; Rule 17, M.R.App.P.; Plumb v. Fourth Jud. Dist. Court (1996), [279 Mont. 363], 927 P.2d 1011. We cannot, and will not, cavalierly disregard such matters on behalf of a party or construct the arguments by which the party might seek alternative review by this Court. Suffice it to say that this appeal has delayed for nearly a year litigation regarding the riot which occurred six years ago and we have addressed it as it was presented.

We hold that the appeal from the District Court’s order denying the defendants’ qualified immunity-based motions for summary judgment must be dismissed.

As a final matter, the plaintiffs have requested sanctions under both federal standards and Rule 32, M.R.App.P. While their request is supported by substantive arguments, we need not address those arguments.

Under Rule 32, M.R.App.R, we may award appropriate damages as a sanction where we are “satisfied from the record and the presentation of the appeal in a civil case that the same was taken without substantial or reasonable grounds [.]” As discussed above, the defendants advanced no arguments pursuant to which we would, or arguably might, have had jurisdiction to entertain their appeal. If no arguments were available to support the appealability of the order at issue, the appeal is frivolous and should not have been filed. If arguments were available, the defendants were obliged to make them; they did not.

We will not permit parties to unnecessarily delay litigation, especially litigation of the magnitude and importance of the litigation underlying this appeal, with impunity. Indeed, one of the concerns regarding appealability of orders like the one at issue here is that appealability may permit § 1983 defendants to

ossify civil rights litigation. Defendants may defeat just claims by making suit unbearably expensive or indefinitely putting off the trial. A sequence of pre-trial appeals not only delays the resolution but increases the plaintiffs’ costs, so that some will abandon their cases even though they may be entitled to prevail. Although it is important to protect public officials from frivolous claims and burdens of trial, it is also important to curtail the outlay and delay of litigation, so that victims of official misconduct may receive the vindication that is their due.

Yates v. City of Cleveland (6th Cir. 1991), 941 F.2d 444, 449 (citations omitted).

On the basis of the presentation of this appeal, we are satisfied that it was taken without substantial and reasonable grounds. Therefore, we award the plaintiffs reasonable attorney fees and costs incurred in defending this appeal and reasonable delay damages under Rule 32, M.R.App.R, to be determined by the District Court.

This appeal is dismissed and the case remanded to the District Court for determination of the amount of the Rule 32, M.R.App.R, damages awarded herein and for further proceedings.

CHIEF JUSTICE TURNAGE, JUSTICES NELSON, TRIEWEILER and HUNT concur.


author: CHIEF JUSTICE TURNAGE

text:
    WALTER F. POOL, Plaintiff and Appellant, v. BUTTE PRE-RELEASE CENTER, INC., a Montana nonprofit corporation, Defendant and Respondent.
    No. 96-619.
    Submitted on Briefs May 15, 1997.
    Decided June 24, 1997.
    54 St.Rep. 603.
    283 Mont. 287.
    939 P.2d 1011.

      For Appellant: Richard R. Buley, Tipp & Buley, Missoula.
    For Respondent: Patrick M. Sullivan, Poore, Roth & Robinson, P.C., Butte.
   CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Walter F. Pool filed this wrongful discharge action in the Second Judicial District Court, Silver Bow County, in 1987. In 1996, the court dismissed the action for failure to prosecute, pursuant to Rule 41(b), M.R.Civ.P. Pool appeals. We affirm.

The issue is whether the District Court abused its discretion in dismissing this action for failure to prosecute.

In his complaint, Pool alleged that he was wrongfully discharged from employment at the Butte Pre-Release Center, Inc., in the spring of 1985 in breach of the implied covenant of good faith and fair dealing. Butte Pre-Release filed an answer and discovery requests. In November of 1990, Butte Pre-Release moved to dismiss the action for failure to prosecute, pursuant to Rule 41(b), M.R.Civ.P. The court granted that motion.

A month later, Pool retained new counsel who moved to set aside the order of dismissal. That motion was granted and the order of dismissal was vacated in June 1994. Immediately thereafter, a pretrial conference was held and the court issued a scheduling order with trial set for November 28, 1994, and a discovery deadline of October 7, 1994.

In October, Butte Pre-Release moved to extend the discovery deadline to November 22, 1994, because it was having difficulty in arranging a date to depose Pool, who was then working in Alaska. The court granted the extension and, sua sponte, vacated the scheduled trial date.

In December 1994 and February 1995, discovery was again continued on motion by Butte Pre-Release because Pool’s deposition still had not been scheduled. In July 1995, counsel for Butte Pre-Release requested from Pool’s counsel a date on which Pool would be available to be deposed. The depositions of Pool and his wife were scheduled for November 1995.

The Pools, who had by that time relocated to Arizona, canceled their November 1995 depositions due to bad weather. In April 1996, Butte Pre-Release filed its second motion to dismiss this action for failure to prosecute. The court granted that motion. Pool appeals.

Did the District Court abuse its discretion in dismissing this action for failure to prosecute?

Rule 41(b), M.R.Civ.P., provides:

For failure of the plaintiff to prosecute ..., a defendant may move for dismissal of an action or of any claim against the defendant. Unless the court in its order for dismissal otherwise specifies, a dismissal under this subdivision ... operates as an adjudication upon the merits.

A district court has broad discretion in ruling on a Rule 41(b) motion, and its discretion will be overturned only if it has abused that discretion. Hobble-Diamond Cattle Co. v. Triangle Irr. Co. (1995), 272 Mont. 37, 40, 899 P.2d 531, 533. Four factors are considered in determining whether a district court abused its discretion in dismissing an action under Rule 41(b), M.R.Civ.P: (1) the plaintiff’s diligence in prosecuting the claim; (2) prejudice to the defense caused by the plaintiff’s delay; (3) availability of alternate sanctions; and (4) existence of a warning that the case is in danger of dismissal. Hobble-Diamond0, 899 P.2d at 533-34.

The delay prior to the District Court’s order vacating the first order of dismissal is irrelevant for purposes of this discussion. Here, as did the District Court, we examine the facts concerning failure to prosecute only for the period from June 1994, when the court vacated the first order of dismissal, until Butte Pre-Release filed its second motion to dismiss in April of 1996.

In ruling that “there has now been another unreasonable delay in the prosecution of this case primarily due to the Plaintiff’s failure to make himself available for a deposition,” the District Court addressed the plaintiff’s lack of diligence in prosecuting the claim. The record reflects that, even following the previous dismissal of his case for failure to prosecute, Pool did not make himself available to be deposed for over twenty-two months immediately preceding the second motion to dismiss. Pool’s absence from the State of Montana does not constitute a reasonable explanation for his failure to prosecute this case by making himself available to be deposed.

The court further stated:

The Plaintiff has not provided a reasonable excuse for not rescheduling his deposition after he unilaterally canceled the November 10, 1994 deposition date. Furthermore, the Defendant has shown prejudice due to the long delay in that key witnesses are now either dead or can not be located. Considering only the circumstances that have occurred since the original Order of Dismissal was vacated on June 27, 1994, the Court concludes that the Plaintiff has failed to diligently prosecute his case as required by law, that he has failed to offer a reasonable excuse, and Defendant has and will suffer actual prejudice if the case proceeds.

In support of its motion to dismiss, Butte Pre-Release submitted an affidavit concerning the unavailability of witnesses who would have been able to testify regarding Pool’s termination from employment but who had died or whose whereabouts were unknown. That affidavit and the court’s discussion of it addressed the prejudice caused by the delay in prosecuting the claim.

A warning of impending risk of dismissal is not a prerequisite to dismissal under Rule 41(b). See Hobble-Diamond, 899 P.2d at 535. In this case, although the District Court did not expressly “warn” Pool that his complaint was in danger of dismissal, Pool had been forewarned of that possibility when the court dismissed his case in 1990.

In its opinion accompanying its order of dismissal, the District Court did not discuss the availability of alternative remedies. We have stated, however, that it is not necessary to establish a total unavailability of other sanctions prior to dismissal under Rule 41(b). Hobble-Diamond, 899 P.2d at 535. In this case, the alternative remedy of imposing a scheduling order had been implemented following the vacating of the previous order of dismissal, but imposing a scheduling order had not been successful.

After considering the four factors to be examined in an appeal of a Rule 41(b), M.R.Civ.R, dismissal, we conclude that the District Court did not abuse its discretion in granting Butte Pre-Release’s motion to dismiss this action. We therefore affirm the order of dismissal entered by the District Court.

JUSTICES NELSON, LEAPHART, HUNT and TRIEWEILER concur.


author: JUSTICE TRIEWEILER

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. KENNETH STUBBLEFIELD, Defendant and Appellant.
    No. 96-659.
    Submitted on Briefs May 29, 1997.
    Decided June 24, 1997.
    54 St.Rep. 605.
    283 Mont. 292.
    940 P.2d 444.

      For Appellant: Edmund F. Sheehy, Jr., Cannon & Sheehy, Helena.
    For Respondent: Hon. Joseph P. Mazurek, Attorney General; Cregg W. Coughlin, Assistant Attorney General; Helena; Mike McGrath, Lewis and Clark County Attorney; Mike Menahan, Deputy County Attorney; Helena.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

The defendant, Kenneth Stubblefield, was charged by information, filed in the District Court for the First Judicial District in Lewis and Clark County, with the offense of driving under the influence of alcohol, in violation of § 61-8-401(l)(a), MCA. Based on his four prior convictions for DUI, the information charged him with a felony, pursuant to § 61-8-714(4), MCA. He moved the District Court to dismiss the felony DUI charge against him. The court, however, denied his motions. He appeals the judgment of the District Court. We affirm.

The issue on appeal is whether the District Court erred when it denied Kenneth Stubblefield’s motions to dismiss the felony DUI charge against him.

FACTUAL BACKGROUND

On November 29, 1995, Stubblefield moved the District Court to dismiss the felony DUI charge against him on the ground that § 61-8-714(4), MCA, is, on its face, unconstitutionally vague. The District Court denied that motion.

On May 2,1996, Stubblefield pled guilty to the offense of DUI. He contended, however, that the court records of his prior DUI convictions do not affirmatively establish that he voluntarily waived his right to counsel in those prior proceedings and that, therefore, the District Court cannot consider his prior DUI convictions for purposes of determining whether he is guilty of the pending felony DUI charge. On that basis, he again moved the District Court to dismiss the felony DUI charge against him.

The State maintained that a presumption of regularity attaches to Stubblefield’s prior convictions and, therefore, that the burden of proof is, at least initially, on Stubblefield to prove that his prior convictions were entered in violation of his constitutional right to counsel. The State submitted as evidence the court records of Stubblefield’s prior convictions and presented the testimony of: (1) Thomas Pouliot, East Helena City Judge; and (2) Wallace Jewell, Lewis and Clark County Justice of the Peace. They both testified that, although they do not specifically remember Stubblefield’s appearance in their respective courts, they always advise defendants regarding the right to counsel.

Stubblefield did not submit any evidence to establish that his rights were violated during the prior proceedings. In fact, he did not even assert that his prior convictions were invalid. Rather, he contended that it is the State’s burden to affirmatively prove the validity of his prior convictions.

After a hearing, the District Court concluded that Stubblefield’s prior DUI convictions are presumptively valid and that he failed to rebut the presumption. Accordingly, the court: (1) denied his motion to dismiss the felony DUI charge against him; (2) took into consideration his prior DUI convictions for purposes of determining whether the current DUI charge can be increased to a felony; and (3) sentenced him, pursuant to § 61-8-714(4), MCA, to a ten-year term of imprisonment, with five years suspended on conditions, for the offense of felony DUI.

DISCUSSION

Did the District Court err when it denied Kenneth Stubblefield’s motions to dismiss the felony DUI charge against him?

When we review a district court’s conclusions of law, the standard of review is plenary and we must determine whether the district court’s conclusions are correct as a matter of law. State v. Rushton (1994), 264 Mont. 248, 254-55, 870 P.2d 1355, 1359; State v. Sage (1992), 255 Mont. 227, 229, 841 P.2d 1142, 1143. When we review a district court’s findings of fact, the standard of review is whether those findings are clearly erroneous. Daines v. Knight (1995), 269 Mont. 320, 324, 888 P.2d 904, 906.

Vagueness

In Montana, a fourth or subsequent DUI is punishable as a felony. The applicable sentencing statute is § 61-8-714, MCA, which provides, in relevant part, as follows:

(4) On the fourth or subsequent conviction, the person is guilty of a felony offense and shall be punished by imprisonment for a term of not less than 1 year or more than 10 years and by a fine of not less than $1,000 or more than $10,000....
(6) For the purpose of determining the number of convictions under this section, “conviction” means a final conviction, as defined in 45-2-101, in this state .... An offender is considered to have been previously convicted for the purposes of sentencing if less than 5 years have elapsed between the commission of the present offense and a previous conviction, unless the offense is the offender’s fourth or subsequent offense, in which case all previous convictions must be used for sentencing purposes.

Section 61-8-714(4), (6), MCA.

Stubblefield moved the District Court to dismiss the felony DUI charge against him on the ground that § 61-8-714(4), MCA, is, on its face, unconstitutionally vague. On appeal, he contends that the District Court erred when it denied that motion. Specifically, he asserts in his brief that § 61-8-714(4), MCA, is facially void for vagueness “because it does not define the conduct that is prohibited with sufficient definitiveness and does not establish minimal guidelines to govern law enforcement.”

It is well established that “if the challenged statute is reasonably clear in its application to the conduct of the person bringing the challenge, it cannot be stricken on its face for vagueness.” State v. Lilburn (1994), 265 Mont. 258, 270, 875 P.2d 1036, 1044 (citing Village of Hoffman Estates v. Flipside, Hoffman Estates, Inc. (1982), 455 U.S. 489, 494-95, 102 S. Ct. 1186, 1190-91, 71 L. Ed. 2d 362, 369). In other words, as the United States Supreme Court succinctly stated, “[o]ne to whose conduct a statute clearly applies may not successfully challenge it for vagueness.” Parker v. Levy (1974), 417 U.S. 733, 756, 94 S. Ct. 2547, 2562, 41 L. Ed. 2d 439, 458.

We conclude that § 61-8-714(4), MCA, clearly applies to Stubblefield’s conduct. It is undisputed that he was convicted of DUI in the East Helena City Court on August 16, 1993; in the Lewis and Clark County Justice Court on August 26, 1993; in the Helena City Court on May 6, 1994; and again in the Helena City Court on July 13, 1994. The DUI charge alleged in this case, therefore, constitutes his fifth DUI offense. On that basis, we conclude that Stubblefield does not have standing to bring a facial vagueness challenge to § 61-8-714(4), MCA.

We, therefore, hold that the District Court did not err when it denied Stubblefield’s motion. Accordingly, that part of the District Court’s judgment is affirmed.

The District Court’s Consideration of Stubblefield’s Prior DUI Convictions

On appeal, Stubblefield contends that the records of his prior DUI convictions do not establish that he waived his right to counsel and, therefore, that the District Court erred when it considered his prior DUI convictions for purposes of determining whether the current DUI charge can be increased to a felony. On that basis, he maintains that the District Court erred when it denied his motion to dismiss the felony DUI charge against him.

In essence, Stubblefield asserts that the District Court erred when it: (a) concluded that a presumption of regularity attaches to his prior convictions; (b) did not require the State to affirmatively establish the constitutional validity of his prior convictions; and instead (c) placed the burden of proof on him to establish that his right to counsel was violated during the prior proceedings.

The State, however, maintains that a presumption of regularity attaches to prior convictions and, therefore, that the burden of proof is on a defendant to prove that his or her rights were violated during a prior proceeding. Moreover, the State asserts that, in this case, Stubblefield failed to offer any evidence that his rights were violated during the prior proceedings and that he did not even assert that any such violations occurred.

The State’s position and the District Court’s decision are consistent with our recent decision in State v. Okland (1997), [283 Mont. 10], 941 P.2d 431. In that case, we held that:

[W]e conclude that [Parke v. Raley (1992), 506 U.S. 20, 113 S. Ct. 517, 121 L. Ed. 2d 391,] is persuasive and that, in Montana, a presumption of regularity attaches to prior convictions during a collateral attack. Therefore, even in the absence of a transcript or record, a prior conviction is presumptively valid and a defendant who challenges the validity of his prior conviction during a collateral attack has the burden of producing direct evidence of its invalidity.
We further conclude that the presumption of regularity is a rebuttable presumption. Accordingly, while this presumption does operate, at least initially, to establish the validity of a prior conviction, it can be rebutted by a defendant who produces direct evidence that his constitutional rights were violated in a prior proceeding. Once a defendant has made such a showing, the burden then shifts to the State to produce direct evidence and prove by a preponderance of the evidence that the prior conviction was not entered in violation of the defendant’s rights.

Okland, [283 Mont. 10], 941 P.2d 431.

After a review of the record, we conclude that Stubblefield failed to present any direct evidence to establish that his constitutional rights were violated in a prior proceeding. We therefore conclude that Stubblefield failed to rebut the presumption of regularity and that, for that reason, the State had no further burden of proof regarding the regularity of his prior convictions. On that basis, we hold that the District Court neither erred when it denied Stubblefield’s motion nor when it considered his prior DUI convictions for purposes of determining whether the current DUI charge can be increased to a felony. Accordingly, the District Court’s judgment is affirmed.

JUSTICES GRAY, NELSON, HUNT and REGNIER concur.


text:
    MILTON E. HICKLIN, Plaintiff and Appellant, v. CSC LOGIC, INC., A TEXAS CORPORATION, d/b/a, LOGIC MANAGEMENT SERVICES, INC., and THE PENNSYLVANIA LIFE AND HEALTH INSURANCE GUARANTY ASSOCIATION, Defendants and Respondents.
    No. 96-529.
    Submitted on Briefs April 17, 1997.
    Decided July 2, 1997.
    Rehearing Denied August 7, 1997.
    54 St.Rep. 675.
    283 Mont. 298.
    940 P.2d 447.

      For Appellant: John M. Morrison; Meloy & Morrison; Helena.
    For Respondents: Sarah R. Saldana and Anne Hilbert; Baker & Botts; Dallas, Texas; and Mark S. Williams; Williams & Ranney; Missoula (for CSC Logic, Inc.); Stephen M. Frankino; Hughes, Kellner, Sullivan & Alke; Helena (for Pennsylvania Life & Health).
   JUSTICE TRIEWEILER

delivered the opinion of the Court.

The appellant, Milton E. Hicklin, filed a complaint in the District Court for the First Judicial District in Lewis & Clark County in which he sought damages from the respondents, CSC Logic, Inc. (“CSC”) and the Pennsylvania Life and Health Insurance Guaranty Association (“PLHIGA”), pursuant to § 33-18-242, MCA. The respondents failed to appear. On that basis, the District Court entered a default judgment against the respondents and awarded damages to Hicklin. When Hicklin sought to supplement the record, the respondents appeared and moved the District Court to vacate the default judgment entered against them. The District Court granted that motion. Hicklin appeals. We reverse the judgment of the District Court and remand the case to that court for proceedings consistent with this opinion.

The sole issue on appeal is whether the District Court erred when it concluded that it lacked subject matter jurisdiction to entertain Hicklin’s claim and, on that basis, granted the respondents’ motion to vacate the default judgment entered against them.

FACTUAL BACKGROUND

In 1989, Milton Hicklin purchased a vehicle for which financing was provided by First Interstate Bank of Billings. The loan was taken on May 31,1989, and was to be repaid by monthly payments, the last of which was due on June 15,1994. To insure repayment of the loan, Hicklin purchased a disability insurance policy from the Life Assurance Company of Pennsylvania (“LACOP”), for which he paid a single, lump-sum premium. In return, LACOP agreed to make monthly payments to First Interstate in the amount of $251.92 in the event that Hicklin became disabled.

On January 10, 1991, the Commonwealth Court of Pennsylvania declared LACOP insolvent. The liquidation order appointed the Pennsylvania Insurance Commissioner “liquidator” of LACOP’s property, assets, contracts, and rights of action. Pursuant to the Pennsylvania Life and Health Guaranty Association Act (see 40 PS. § 1801, et seq.), the Commissioner assigned its statutory duties to PLHIGA, an unincorporated association created by statute which guarantees the obligations of insolvent health and life insurance companies. The liquidation order, therefore, gave PLHIGA control of LACOP’s assets and directed PLHIGA to proceed with the liquidation of LACOP in accordance with Article V of Pennsylvania’s Insurance Department Act, codified at 40 PS. §§ 221.1-221.63.

In an undated letter, PLHIGA informed Hicklin that LACOP had been declared insolvent. The letter further advised him that PLHIGA had assumed LACOP’s contractual obligations, including his disability policy, and that any inquiries regarding his policy or benefits should be directed to CSC, a Texas corporation acting as a third-party administrator.

In February 1993, Hicklin underwent a microsurgical laminotomy, following which he was disabled. Accordingly, he submitted a claim for disability insurance payments. PLHIGA and CSC accepted liability and began making payments to First Interstate on his behalf. However, of the seventeen remaining payments, fourteen were delinquent. Additionally, PLHIGA and CSC refused to make the final payment.

On August 2,1994, Hicklin filed a complaint in the District Court. He claimed that PLHIGA’s and CSC’s claims-handling practices violated provisions of the Montana Unfair Trade Practices Act, found at § 33-18-201, MCA, and that those violations caused him substantial harm, including delayed credit for a home he was building and, therefore, increased building costs for financing and materials. On that basis, he asserted that he was entitled to compensatory and punitive damages.

PLHIGA and CSC were both served with notice, but failed to appear. Accordingly, Hicklin filed a notice of default. Again, however, both defendants failed to respond. The District Court entered a default judgment and, after a hearing, issued its findings of fact and conclusions of law regarding liability and damages. The District Court determined that Hicklin is entitled to damages in the following amounts: $36,000 for lost interest; $8,000 for increased cost of lumber; $251.92 for the final loan payment; $140 in late payment penalties; and $10,000 for emotional distress. The District Court also awarded him punitive damages pursuant to § 27-1-221, MCA.

Hicklin attempted to enforce his judgment. He was informed, however, that a specific finding with regard to jurisdiction would facilitate his effort to enforce the judgment against CSC. On that basis, Hicklin filed a motion to supplement the District Court’s findings of fact and conclusions of law.

Respondents subsequently appeared for the first time and moved the District Court to vacate the default judgment entered against them. In support of that motion, they asserted that the Montana District Court does not have subject matter jurisdiction over Hicklin’s claims and, therefore, that the default judgment entered against them is void and must be vacated.

The District Court agreed with the respondents and, on that basis, granted respondents’ motion pursuant to Rule 60(b)(4) and (6), M.R.Civ.R

DISCUSSION

Did the District Court err when it concluded that it lacked subject matter jurisdiction to entertain Hicklin’s claim and, on that basis, granted respondents’ motion to vacate the default judgment entered against them?

When we review a district court’s conclusions of law, our standard of review is plenary and we must determine whether the court’s conclusions are correct as a matter of law. Carbon County v. Union Reserve Coal Co. (1995), 271 Mont. 459, 469, 898 P.2d 680, 686; In re Matter of Kovatch (1995), 271 Mont. 323, 326, 896 P.2d 444, 446; Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603.

The January 10, 1991, liquidation order which declared LACOP insolvent appointed the Pennsylvania Insurance Commissioner “liquidator” of LACOP’s property, assets, contracts, and rights of action. Pursuant to the Pennsylvania Life and Health Guaranty Association Act (see 40 PS. § 1801 et seq.), the Commissioner assigned its statutory duties to PLHIGA and its agent, CSC. The liquidation order, therefore, gave PLHIGA control of LACOP’s assets and directed PLHIGA to proceed with the liquidation of LACOP in accordance with Article V of Pennsylvania’s Insurance Department Act, codified at 40 P.S. §§ 221.1-221.63. The liquidation order also made the following provision for jurisdiction over claims against LACOP:

No action at law or equity shall be brought against the Defendant [LACOP] in this Commonwealth or elsewhere, nor shall any such existing action be maintained or further presented after issuance of this Order. All actions currently pending against the Defendant in the courts of the Commonwealth of Pennsylvania are hereby stayed. All actions against the Defendant shall be submitted and considered as claims in this liquidation proceeding.

Section 221.58 of Pennsylvania’s Insurance Department Act provides as follows:

Claims of nonresidents against Insurers domiciled in this state
(a) In a liquidation proceeding begun in this Commonwealth against an insurer domiciled in this Commonwealth, claimants residing in foreign countries or in states not reciprocal states must file claims in this Commonwealth, and claimants residing in reciprocal states may file claims either with the ancillary receivers, if any, in their respective states, or with the domiciliary liquidator. In reciprocal states, where an ancillary receiver has been appointed, a guaranty association of that state must file its claims with the ancillary receiver. Claims must be filed on or before the last dates fixed for the filing of claims in the domiciliary liquidation proceeding.
(b) Claims belonging to claimants residing in reciprocal states may be proved either in the liquidation proceeding in this Commonwealth as provided in this article, or in ancillary proceedings, if any, in the reciprocal states. If notice of the claim and opportunity to appear and be heard is afforded the domiciliary liquidator of this Commonwealth as provided in section 559(b) with respect to ancillary proceedings in this Commonwealth, the final allowance of claims by the courts in ancillary proceedings in reciprocal states shall be conclusive as to amount and as to priority against special deposits or other security located in such ancillary states, but shall not be conclusive with respect to priorities against general assets under section 544.

(Emphasis added, footnote omitted.)

The District Court concluded that, pursuant to § 33-2-1303(15), MCA, and 40 P.S. § 221.3, Montana is a “reciprocal state,” and that since an ancillary receiver has not been appointed in Montana, Hicklin is required to file his case in Pennsylvania. On that basis, the court concluded that it lacked the requisite subject matter jurisdiction over Hicklin’s case. Accordingly, the court granted the respondents’ motion and vacated the default judgment entered against them.

We conclude, however, that neither the January 10,1991, liquidation order, nor Article V of Pennsylvania’s Insurance Department Act, applies to the claims for which Hicklin was awarded judgment. Hicklin is not proceeding against LACOP, does not claim entitlement to LACOP’s assets, property, or estate, and is not attempting to enforce a contractual obligation incurred by LACOP prior to when it was declared insolvent. Rather, the District Court’s judgment is based upon PLHIGA’s and CSC’s claims-handling practices and their violations of the Montana Unfair Trade Practices Act. In essence, the judgment is unrelated to the liquidation of LACOP and the accompanying liquidation proceedings; instead, it focuses on PLHIGA’s and CSC’s independent torts committed subsequent to LACOP’s liquidation.

Respondents also contend that they are entitled to immunity from Hicklin’s claims pursuant to 40 P.S. § 991.1715. However, any immunity provided by that statute was merely a defense to Hicklin’s claim. It does not relate to the District Court’s subject matter jurisdiction, as we have explained that limitation. Wippert v. Blackfeet Tribe (1993), 260 Mont. 93, 102, 859 P.2d 420, 425. Since the District Court found no nonjurisdictional basis for setting aside the default judgment, the respondents’ affirmative defenses were waived when not raised in a timely manner in response to Hicklin’s complaint.

We hold, therefore, that the District Court erred when it concluded that it did not have subject matter jurisdiction and, on that basis, granted the respondents’ motion to vacate the default judgment entered against them. Accordingly, the judgment of the District Court is reversed and the case is remanded to that court for proceedings consistent with this opinion.

JUSTICES REGNIER, NELSON, HUNT and GRAY concur.