author: JUSTICE TRIEWEILER

text:
    IN RE THE MARRIAGE OF MARTIN PAUL GRIFFIN, Petitioner and Respondent, and NANCY LIEN GRIFFIN, Respondent and Appellant.
    No. 92-435.
    Submitted on Briefs March 11, 1993.
    Decided August 18, 1993.
    50 St.Rep. 945.
    260 Mont. 124.
    860 P.2d 78.

      For Appellant: Edmund P. Sedivy, Jr., Morrow, Sedivy & Bennett, Bozeman.
    For Respondent: John S. Warren, Schulz, Davis & Warren, Dillon.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

A dissolution decree was entered by the District Court for the Fifth Judicial District, Beaverhead County, on November 25, 1991, in which the court divided the parties’ marital estate, determined custody, child support, and maintenance obligations, and awarded appellant, Nancy Griffin, an option to purchase the family business within 180 days. Nancy moved the District Court on four separate occasions to allow her to exercise this option, but these motions were denied. Respondent Martin Griffin moved the court to reduce his property settlement obligation and this motion was also denied. From the original decree and judgment, and the subsequent orders denying their motions, the parties appeal.

We reverse and remand to the District Court.

The following issues are before this Court:

1. Is this appeal limited to a review of the District Court’s May 12, 1992, order?

2. Did the District Court abuse its discretion when it refused to either allow Nancy to exercise her option to purchase the family business or to adjust the property distribution based on a market valuation of the business?

3. Did the District Court abuse its discretion when it determined Martin’s child support obligation without considering the factors specified in § 40-4-204, MCA?

4. Did the District Court err when it refused to reduce Martin’s property settlement obligation by the amounts Nancy withdrew from the parties’ business account?

FACTUAL SUMMARY

Nancy Lien Griffin and Martin Paul Griffin were married on February 4, 1978. At the time of dissolution, the parties had four children whose ages were 12, 10, 8, and 7. The parties stipulated to joint custody of the children. Nancy was to be the primary residential custodian. The remaining issues of child support, maintenance, and division of the marital assets were to be determined by the trial court following a hearing conducted on October 25,1991.

The parties’ primary asset, the value of which forms a basis of this appeal, is the family-owned Madison Lumber Company, located in Ennis, Montana. It is undisputed that the parties started this retail lumber and building supply business in 1979, and contributed equally to its successful development. Martin’s role was that of manager, and Nancy acted as chief financial officer. Because it was evident during the dissolution proceedings that both parties desired the lumber company to the exclusion of the other, the primary issues for the court to determine were the value of the business and a method of equitably apportioning this marital asset.

Prior to the trial, the parties jointly hired an appraiser, John Wicks, who utilized cost and income methods of valuation and concluded that the parties’ equity in the business was $340,000. Believing that the Wicks appraisal considerably undervalued the business, Nancy hired James Simons, a certified public accountant, who evaluated the company’s earnings and concluded that the parties’ equity was worth $862,274.

During the hearing, the court also considered conflicting testimony regarding the value of the parties’ home. Wicks appraised the family home at $222,000 but Nancy testified that no offers had been received on the house when it was listed at $230,000 so she believed the value to be $190,000. Finally, the court heard testimony on the issues of maintenance and support, which included the submission of a child support guideline worksheet by Nancy.

After considering the evidence, the court adopted Wicks’ appraisal of both the home and lumber company after it found Wicks’ valuation of the business “more credible and believable.” The court divided the marital estate as follows:

Tb Nancy: The family home $222,000
subject to its mortgage (63,309)
Contents of home 20,290
Dean Witter account 42,271
Profit sharing plan 4,755
1990 Subaru 10,000
Settlement from husband 54.000
TOTAL: $290,007
To Martin: Madison Lumber Co. (total equity reduced by value of Subaru awarded to Nancy) $330,000
subject to shareholders advance (16,494)
Profit sharing plan 9,848
Settlement paid to wife ('54.0001
TOTAL: $269,354

In its findings of fact and conclusions of law issued on November 14, 1991, the court stated that “despite the alarming discrepancy in the experts’ appraisals (of the business), the court finds that Nancy in equity should have an opportunity to put her private appraisal to the fair market value test.” Therefore, it awarded her an assignable option to purchase the lumber company which was structured as follows:

NANCY LIEN GRIFFIN is hereby granted a 180 day exclusive assignable option to purchase the assets of the Madison Lumber Company. The purchase price as equitably adjusted by the court from the conflicting appraisals, and other distributed property, shall be the sum of $540,000. The option if exercised shall be for cash or in the alternative, a secured installment sale, $180,000 down and the balance in 20 annual, equal, amortized installment payments at eight and one-half percent (8 1/2%) interest. In the alternative the parties may implement any other agreed to purchase plan.

The court further stated that it reserved the right “to amend its decision as to maintenance, child support, and any other matters which in equity should be adjusted in the light of such a sale.” Finally, the court concluded that Nancy was entitled to a temporary maintenance award, and that Martin should pay Nancy $1200 per month for child support. The court also found that neither party was entitled to an award of attorney fees.

A dissolution decree and judgment, which conformed to the court’s findings and conclusions of law, was entered on November 25, 1991. Neither party raised objections to the court’s purchase option plan, nor filed notices of appeal.

During the time period between the court’s issuance of the findings and conclusions, and the subsequent entry of judgment, Nancy sought to exercise her option under the installment terms of the court’s plan and moved the court to amend its division of the marital estate. Nancy claimed that the court-ordered purchase price of $540,000, as compared to the $330,000 figure used in the property division, created an additional marital value of $210,000 which should be split between the parties. She stated that, in order to obtain a loan for the sale, she needed to know if the court was going to deduct her share of the additional value ($105,000) from the purchase price.

The actual purchase plan that Nancy proposed was structured as follows: Nancy would be purchasing the unencumbered assets of the lumber company for $540,000. The $180,000 down payment would consist of crediting Martin with the $25,000 which he owed to Nancy as the first installment of the property settlement and releasing him of his obligation to repay the $16,494 shareholder’s advance; Nancy would transfer her Dean Witter stock to Martin, valued at $42,271; and, finally, a payment of $96,235 in cash would be made to Martin. The remaining $360,000 of the contract price would be decreased by $105,000 (her share of the increased net valuation of the business). The balance would be paid with a cash installment payment of $29,000, and a secured contract for $226,000, payable in 20 annual installments at an interest rate of 8.5 percent.

Nancy also moved the court to order that any installment sale contract entered into between the parties include a non-competition clause in order to afford Nancy a “reasonable opportunity to earn the monies to pay the balance of the installment sale contract.”

After a hearing, the court denied Nancy’s motion on the basis that it was premature because it was filed before a formal execution of a written contract and the tendering of the $180,000 down payment. The court denied the motion on November 25,1991, stating that “the option to purchase has not been properly exercised ... [and] the proposed purchase plan fails to meet the fair market value test as contemplated within the spirit and intent of the Court’s findings.”

In a subsequent motion, Nancy requested access to the company’s records and permission to do an on-site inspection with potential investors for the stated purpose of “processing loan applications.” In an order issued on January 7, 1992, Nancy’s motion for personal access to the property and records was denied, but Martin was ordered to cooperate fully with bank representatives to assemble any data necessary for a loan or sale. Furthermore, Martin was enjoined from conducting the business in a manner which would impair the assets or value of the company during the 180 day option period. The court added the following comment at the end of the order:

The purpose of the assignable option was to put to the fair market value test the appraisal of the expert Simon[s], The efforts to date have not been within the spirit and intent of that purpose.

On February 24, 1992, Nancy again attempted to exercise her option and moved the court to approve a contract for deed which conformed to the terms prescribed by the court and was structured in essentially the same manner as the plan she had proposed in November 1991. The down payment would consist of releasing Martin of his obligations to pay the shareholders advance and the initial property settlement payment, assigning the balance of the Dean Witter account at the date of closing, and the remainder payable in cash. The balance of the purchase price would be in the form of a promissory note, “subject to the equitable determination of the District Court ... as set forth in the Decree and Judgment,” and the annual payments would be offset by the annual payments Martin owed Nancy pursuant to the court’s property settlement order. The proposal included a noncompetition clause which would prohibit Martin from owning, operating, or being employed by a similar business in Madison County as long as the Madison Lumber Company was in existence, and the contract granted Martin a “first right of refusal” should Nancy elect to sell the assets of Madison Lumber during the term of the contract.

The court denied Nancy’s motion on March 9,1992, on the grounds that the proposed contract did not provide adequate security for Martin. It concluded that the fair market value of the proposed security, which was to be the lumber company itself, was less than the unpaid balance due him under the contract, and therefore, there was insufficient unencumbered equity to provide a margin of security for Martin. Also, Martin’s interest would be subordinated to three existing deeds of trust on the property.

The court then clarified that the “spirit and intent” of the option plan, which it concluded Nancy had thus far failed to meet, was to test the “astonishing difference” in appraisals by subjecting the property to the open market:

[T]he value of the equity of the Madison Lumber Company has not been subjected to the test of the market, for no third party has agreed to either purchase, lend, or invest in the Madison Lumber Company at the value of Respondent’s assignable option.

During that same month, Nancy received an offer from a third party, Carl Collins, to purchase the lumber company for $900,000, less existing debts, mortgages, and accounts payable. Nancy had listed the business at a selling price of $939,000, but after adjustments, the Collins offer represented a net sales price of approximately $600,000. After further reducing it by the real estate commission fee, the offer was about $20,000 over the court’s option price. Nancy moved the court to approve the Collins offer and, if the sale was not approved, to accept her prior offer to purchase the Madison Lumber Company.

In an order issued on April 3, 1992, the court found that Nancy’s listing agreement constituted an assignment of her option and that “if in fact a cash sale for $900,000 can be finalized between [Carl Collins] as purchaser and Martin Griffin as seller under the terms set forth in the offer, then the fair market value test has been met within the spirit and intent of the option.” The court also noted that Collins included a covenant not to compete in Madison County and it found that provision to be reasonable, stating “[t]hat condition should not deter the sale.” Martin was then ordered to negotiate the sale with Collins.

Martin immediately contacted the realtor to commence negotiations. However, in a return filed with the court on April 20, 1992, Martin informed the court that the realtor notified him on April 6 that Nancy had withdrawn her listing agreement and had not accepted the Collins offer. Martin attached a copy of a letter written by Nancy to the realtor, dated April 9,1992, which stated:

The proposed purchase of Madison Lumber Company by Carl Collins of Center Lumber Co. is hereby vacated. It is my desire to release the sale listing for the lumberyard. I do not believe it is in the long term interests of my family to sell the yard to a third party.

In an affidavit submitted to the court on April 28, 1992, Collins stated that he had to withdraw his offer because it was contingent upon the sale of his business in California, and he would not be able to close within the option period. However, he also stated that “although I desire to purchase the business, it is my understanding that Nancy Lien Griffin does not believe it is in the best interest of her family to execute a sale to a third party.”

Nancy then moved the court on April 29, 1992, to allow her to exercise the option under the terms and conditions contained in her February offer. Nancy stated that, through the Collins offer, she had established a market value of the business that was slightly higher than the option price of $540,000. Although her previous offer had been rejected on the basis that securing the sale with the business itself did not provide sufficient security for Martin, Nancy claimed that now, since the market price of the business was higher than the court’s valuation, there would be an adequate margin of security for Martin.

Nancy also moved the court to adjust the property distribution by equitably apportioning the difference between the $540,000 option price and the $330,000 judicially established market value. She again requested that she share equally in this increased valuation by having her share subtracted from the balance she would owe to Martin upon exercising her option to purchase.

In an affidavit submitted with the motion, Nancy argued that it did not make sense to sell a profitable business to a third party when it could be used to benefit her family. Martin, likewise, opposed selling the lumber company to either Nancy or a third party because he felt the proposals were inequitable and he needed to retain the business in order to provide adequate support for his family.

On May 12,1992, the court denied Nancy’s motions. In a comment to the order, the court stated that the option “has expired by Nancy’s own acts” and the reasons for denying Nancy’s fourth attempt to exercise the option “are obvious from the record. Any further comment would be repetitive.”

In this same order, the court denied pending motions by Martin in which he requested a total credit of $13,876.94 against his property settlement obligation to Nancy. The motions, accompanied by evidence submitted to the court, alleged that Nancy had improperly appropriated money from Martin’s assets when she did the following: On three separate occasions, after entry of the dissolution decree, Nancy took cash advances of $1500 against Martin’s MasterCard account. Furthermore, Nancy removed five checks from the company checkbook, without Martin’s knowledge, and wrote a series of checks to her attorney, her appraiser, and American Express, in an amount totalling $12,376.94. Martin claimed that this was contrary to the court’s decision that each party bear his or her costs and attorney fees, and that Nancy had unilaterally increased her share of the estate which resulted in a disparity of property division contrary to the District Court’s order.

On May 18, 1992, Nancy filed a notice of appeal from the court’s original decree and subsequent orders due to the court’s rejection of her efforts to purchase the lumber company and its refusal to adjust the property distribution based on the market valuation of the business. She also appeals from the court’s child support determination set forth in the November 25, 1991, order. Martin appeals from the court’s denial of his motion for a credit against his property settlement obligation.

DISCUSSION

I.

Is this appeal limited to a review of the District Court’s May 12, 1992, order?

Nancy’s notice of appeal, filed on May 18, 1992, states that her appeal is from the District Court’s November 25,1991, judgment and decree, and all subsequent orders. Martin contends that Nancy’s appeal is barred due to her failure to appeal within the time specified by law. Specifically, he points out that Rule 5(a)(1), M.R.App.P., requires that the notice of appeal shall be filed “within 30 days from the date of the entry of the judgment or order appealed from.” Because Nancy’s notice of appeal was filed more than 170 days after the November 25, 1991, decree was entered, Martin claims that this Court does not have jurisdiction to decide Nancy’s appeal from the decree and judgment. Therefore, he argues that her appeal must be dismissed with respect to the issues of child support and distribution of the marital estate. Additionally, because all of the subsequent orders, except the May 12, 1992, order, preceded Nancy’s notice of appeal by more than 30 days, he contends this Court has jurisdiction only to review the court’s final order of May 12,1992.

Nancy contends, however, that the November 25,1991, decree was not a final judgment from which appeal could be taken until the 180-day option period expired. She notes that the court specifically stated that it:

[R]eserves jurisdiction to alter, modify, or amend the provisions of this Decree and Judgment with respect to its provisions for maintenance, child support, and any other matter which in equity should be adjusted in the event respondent exercises her option to purchase.

It is Nancy’s contention that this decree, on its face, was not final until the expiration of the option period, and it was not until May 12, 1992, that the parties’ rights and obligations were determined and were no longer subject to revision. By filing her appeal on May 18, 1992, she asserts she was within the 30-day requirement and this Court, therefore, has jurisdiction to determine all of the issues raised in her appeal.

Martin correctly points out that pursuant to § 40-4-108, MCA, a decree of dissolution is “final when entered, subject to the right of appeal,” and that under the Rules of Appellate Procedure, an appeal from a final judgment must be filed within 30 days of the entry of judgment. Furthermore, we note that it is well settled law in Montana that an untimely notice of appeal is a jurisdictional defect which renders this Court powerless to hear the appeal. In re Marriage of Zell (1977), 172 Mont. 496, 565 P.2d 311. However, in this instance, because of the conditional language included in the November 25, 1991, decree, we conclude that it was not a final decree for purposes of commencing the time within which an appeal must be taken.

In Heater v. Boston & Montana Corporation (1929), 84 Mont. 500, 277 P. 11, we discussed the difference between a final judgment, from which appeal can be taken, and a judgment which is interlocutory in nature. In that case, we held that a judgment ordering a mortgage foreclosure was in the nature of a conditional, interlocutory determination because it stated that it was subject to specific terms and conditions stipulated by the parties. Because the rights of the parties were left in the “realm of uncertainty and speculation” until the stipulations were carried out, we concluded that an appeal was premature because no final judgment had been entered. Heater, 277 P. at 13.

In Heater, we recognized that “[n]o hard-and-fast definition of a final judgment can be given, since the finality of a judgment depends to a great extent upon its apparent purpose, and whether it contains provision for subsequent modification.” However, this Court did make clear that a decree which leaves matters yet undetermined is necessarily interlocutory, and for a decree to be final it must reserve “no further questions or directions for further determination.” Heater, 277 P. at 13.

After considering the circumstances present in this case, we conclude that our reasoning in Heater applies equally to this situation. The original decree, on its face, was made conditional on whether Nancy exercised her purchase option. Thus, as entered, the judgment contained provisions for subsequent modification, and left the rights and obligations of the parties uncertain. Because the court specifically stated that matters such as child support and maintenance were subject to revision, appealing these issues prior to the expiration of the option period would have been premature.

In response to Martin’s argument that Nancy failed to file timely appeals from the court’s later orders, we would simply note that this contention overlooks the interdependent nature of the original decree and the subsequent orders. As noted above, because of the conditional language included in the original decree, the parties’ rights were not finally determined until the option period expired in May 1992. Applying our reasoning in Heater, the orders issued prior to the May 12, 1992, order were also interlocutory in effect because there had been no final determination of the parties’ rights. Neither the decree, nor the subsequent orders, barred Nancy from attempting to exercise the option at a later time during the option period.

We conclude that, under the circumstances present in this case, we are not limited to reviewing only the May 12,1992, order and that Nancy’s appeal from the original decree and subsequent orders was not untimely. Therefore, this Court can properly review all of the issues raised in Nancy’s appeal.

II.

Did the District Court abuse its discretion when it refused to either allow Nancy to exercise her option to purchase the family business or to adjust the property distribution based on a market valuation of the business?

Section 40-4-202, MCA, vests the district court with broad discretion to equitably apportion the marital estate. In re Marriage of Collett (1981), 190 Mont. 500, 621 P.2d 1093. The standard of review employed by this Court in marital property division cases is well settled. This Court will reverse a district court only upon a showing that the court committed a clear abuse of discretion or has acted arbitrarily, resulting in either instance in a substantial injustice to one of the parties. In re Marriage of Miller (1989), 238 Mont. 197, 203, 777 P.2d 319, 323.

Although Nancy raises numerous objections to the valuation methods used by Wicks and the court’s adoption of his conclusions, she concedes, and we agree, that the court was operating within its broad discretion when it valued the business at $330,000 and awarded it to Martin, but then gave Nancy the option to purchase it for the sum of $540,000 and retained jurisdiction to make equitable adjustments in the event of a sale. However, on appeal, Nancy contends that the court abused its discretion when it arbitrarily denied her motions and refused to allow her to exercise her option. She also maintains that it was an abuse of discretion when the court refused to equitably adjust its division of the marital property after she established the market value of the business through the Collins offer. She argues that a substantial injustice resulted because the value of the marital estate was not then equitably apportioned.

We note first, that in each of the court’s orders denying Nancy’s attempts to purchase the lumber company, the court placed great emphasis on its assessment that the “spirit and intent” of the option, which was to test the market value of the lumber company through a third-party assignment of the option, had not been satisfied. However, after reviewing the court’s original decree, we note that nowhere on the face of that order does it require Nancy to assign the option to a third party. Although the court’s underlying intent may have differed, it granted Nancy an exclusive, assignable option which she could either choose to exercise herself or assign to a third party. Therefore, Nancy’s proposals are entitled to be evaluated as objectively as a third party offer.

Although Nancy focuses much of her argument on the claim that she established a higher market value of the business through the Collins offer, the resolution of this appeal does not depend on that claim. The dispositive question this Court must consider is whether the purchase offers made by N ancy satisfied the terms of the purchase option as decreed by the court, or if her proposals substantially varied those terms. If her offers did satisfy the court’s terms, Nancy should have been allowed to exercise her option as proposed.

We will first consider some of the general reasons for the court’s rejection of Nancy’s proposals. The record demonstrates that the court criticized her proposals to liquidate her assets in order to acquire the down payment, concluded that Martin’s interest would be subordinated or would not be adequately secured (although the purchase price was $210,000 more than the court’s valuation), rejected the notion of a noncompetition clause, and as we have already noted, inappropriately rejected her proposals because they were not from third parties.

The record shows, however, that the court considered a noncompetition clause in the third-party offer from Collins and found that to be reasonable. Additionally, there was testimony from persons experienced in the business who stated that a noncompetition clause in a contract for the sale of a business such as this is “standard and customary.” Therefore, in light of the court’s approval of an identical provision in the Collins offer, Nancy’s proposals should not have been rejected on this basis. Also, in regard to the question of adequate security, we would note that Nancy was proposing to purchase the business at a price which was $210,000 over the court’s valuation. Thus, it appears that the market value of the company’s assets are sufficient to secure the balance of the purchase price, and the court should not have rejected the offer on this basis. Finally, although it may have concerned the court, it was not within the court’s authority to approve or disapprove of how Nancy, or any third party, acquired the necessary cash for a down payment. In essence, the court was placing conditions on the purchase option which were not in the original decree. Therefore, to the extent that the court rejected Nancy’s proposals on these grounds, we conclude that it was an abuse of discretion to reject Nancy’s proposals for these reasons.

Turning to the question of whether the specifics of Nancy’s purchase offers satisfied the terms spelled out in the original decree, we note that Nancy’s proposals to purchase the lumber company were each essentially the same. She would acquire the $180,000 down payment by crediting Martin with certain debts he owed to Nancy, transferring her Dean Witter stock at its current cash value, and tendering the remainder in cash. Because Nancy’s proposals consisted of tendering $180,000 of cash or cash equivalents, we conclude that these provisions satisfied the down payment portion of the installment sale option provided for in the decree.

Next, Nancy proposed to pay the balance of the purchase price by means of a secured installment plan, at the interest rate specified by the court. However, Nancy consistently argued that the contract price should be decreased by $105,000, which would represent her one-half share of the increased net valuation of the business. She bases this contention on the fact that, early in the dissolution proceedings, the trial court stated she was entitled to half the value of the business. A review of the transcript demonstrates that the court explicitly stated:

[A]s far as I’m concerned, these two people acquired this very successful business through their joint efforts from nothing. They’re entitled to — each is entitled to half of it, and it looks to me like the only thing I have to decide is what it’s worth.

Nancy proposed, therefore, that rather than pay the balance of $360,000 to Martin and then have Martin owe her $105,000 for her share of the increased value of the marital assets, this amount should simply be credited against the contract balance. We conclude that the merit of this argument, and the question of whether this provision substantially varied the terms of the option, depends on how the court would have adjusted the property distribution had the sale been completed. If, as Nancy argues, she would have received $105,000 in cash or cash equivalents from Martin, based on the court’s statement that each was entitled to half the value of the business, we conclude that Nancys proposal did not substantially vary the terms of the original decree.

Because this is a question of fact that should properly be resolved by the trial court, we, therefore, remand this issue to the court for a hearing to determine whether a reasonable distribution of the marital assets after the sale would have been to award Nancy the equivalent of $105,000. If the court finds that this would have been a reasonable and equitable adjustment of the increased assets, we conclude that Nancys proposal to offset the balance of the contract price by this amount did not substantially alter the purchase terms set forth in the decree. If that is the case, Nancys proposal complied with the terms of the option and it was an abuse of discretion, resulting in a substantial injustice to Nancy, for the court to deny her motions to exercise her option. Therefore, she should now be allowed to purchase the lumber company on these same terms and conditions.

Nancy requests that, as an alternative to exercising her purchase option, the court should equitably adjust the division of the marital property based on the fact that she established the market value of the company through the Collins offer. Although the court may have abused its discretion in refusing to allow her to exercise her option, we do not agree with the contention that the court should amend the property division in the absence of an actual sale of the business. It is clear from the decree that the court intended to equitably adjust the property division if a sale was completed, but not otherwise. Also, the court clearly stated, with regard to the Collins offer, that Nancy would have established the fair market value if a sale had been finalized between Collins and Martin Griffin. Therefore, while we hold that Nancy should be allowed to exercise her option under the terms proposed if it would have been a reasonable adjustment of the marital property to award each party half of the increased value of the business after the sale, we do not conclude that the court abused its discretion by refusing to adjust the property distribution in the absence of such a sale.

III.

Did the District Court abuse its discretion when it determined Martin’s child support obligation without considering the factors specified in § 40-4-204, MCA?

This Court employs an abuse of discretion standard when reviewing awards of child support. In re Marriage of Nash (1992), 254 Mont. 231, 836 P.2d 598. Section 40-4-204, MCA, sets forth the factors a court must consider in setting support orders, and the guidelines it must use for determining support obligations. This section states in pertinent part:

(3)(a) Whenever a court issues or modifies an order concerning child support, the court shall determine the child support obligation by applying the standards in this section and the uniform child support guidelines adopted by the department of social and rehabilitation services pursuant to 40-5-209, unless the court finds by clear and convincing evidence that the application of the standards and guidelines is unjust to the child or to any of the parties or is inappropriate in that particular case.
(b) If the court does not apply these standards and guidelines to determine child support, it shall state its reasons for finding that the application of such standards and guidelines is unjust to the child or a party or is inappropriate in that particular case.

In this case, Nancy contends that the court made absolutely no findings concerning the subject of child support, and failed to consider the relevant factors set forth in the guidelines or in the statute. She points out that she offered a child support guideline worksheet establishing that she was entitled to $2730.66 per month, and that, although Martin failed to offer a worksheet for the court’s consideration, he testified that $2500 per month was what he believed was necessary for the support of the children. However, without making any findings, the court, in its conclusions of law, ordered Martin to pay child support in the amount of $1200 per month, stating that this decision was based on “the applicable criteria for allocation of child support” and the parties’ 1990 tax returns.

Our review of the record confirms that the court made no findings regarding child support other than its statement that the “applicable criteria” were considered. We made clear in In re Marriage of Kukes (1993), [258 Mont. 324], 852 P.2d 655, 657, 50 St. Rep. 553, 554, that there must be an evidentiary basis upon which a child support determination is based. In that case, we reversed the court’s modification of child support because it “clearly erred in failing to make findings of fact that support its modification of child support.”

In this instance, there are no findings which establish that the court properly considered the uniform guidelines and factors listed in § 40-4-204, MCA, nor that it had an evidentiary basis for its decision. We have previously held that the statute clearly requires a court to consider the statutory criteria when making its award. In re Marriage of Grenfell (1979), 182 Mont. 229, 596 P.2d 205. Furthermore, this Court has affirmed child support awards when those criteria are properly considered. See In re Marriage of Sacry (1992), 253 Mont. 378, 833 P.2d 1035; Nash, 836 P.2d at 598. Here, however, we hold that the court abused its discretion by establishing its award without setting forth an evidentiary basis which demonstrated that the statutory criteria were properly considered. Therefore, this matter is remanded to the District Court with instructions that the court consider the guidelines and factors listed in § 40-4-204, MCA, and enter findings of fact which support its child support award.

IV.

Did the District Court err when it refused to reduce Martin’s property settlement obligation by the amounts Nancy withdrew from the parties’ business account?

Martin contends that the court abused its discretion when it did not credit his property settlement obligation with the amounts of money Nancy took from Martin’s share of the assets. He claims that Nancy unilaterally increased her share of the estate by $13,876.94, and that the court should have required her to adhere to the division of the estate as ordered.

The evidence submitted by Martin established that Nancy took three cash advances against his MasterCard account in the amount of $1500, after the court’s judgment dividing the marital assets was entered. She also wrote five checks on the business account, in an amount totalling $12,376.94, to her attorney, her appraiser, and to American Express. However, contrary to Martin’s assertion that these checks were written after entry of judgment, the record shows that checks totalling $6100 were written before the trial on October 18,1991, and checks totalling $6276.94 were written on November 1, 1991, which was after the trial but before the court’s findings were issued.

In the May 12,1992, order, the court denied Martin’s motion, and in an attached comment to the order explained that Martin “knew, or should have known, that Nancy had the company checkbook” and that he knew of “Nancy’s propensity in the use of the checkbook for matters unrelated to the business.” Thus, in essence, the court was implying that Martin was at fault and decided that this condoned any alleged wrongdoing on Nancy’s part. The court concluded that the business ended up paying the personal obligations of both parties, contrary to its decision, and denied Martin’s motion. No comment was made in regard to the post-judgment cash advance that Nancy took on Martin’s MasterCard account.

Apportionment of a marital estate is based on equitable principles and whether parties are at “fault” should not affect the court’s division of assets. Section 40-4-202, MCA, makes clear that a court is not to consider any marital misconduct in its disposition of the marital assets. Collett, 621 P.2d at 1095. Therefore, we remand this matter to the District Court to determine, without considering fault by either party, whether the amounts of money withdrawn by Nancy, at the times indicated, were intended to be distributed to Martin, and if Nancy’s appropriation of these funds resulted in a disparity in the court’s division of the estate. If the court finds that Martin was deprived of assets which should have been apportioned to him, then his property settlement obligation should be credited with that amount.

The judgment of the District Court is vacated and this case is remanded to the District Court for further proceedings consistent with this opinion.

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


source: Caselaw Access Project

author: JUSTICE GRAY

license: Public Domain

text:
    BILL D. TISHER and GAYLE SCHLEVE, as personal representatives for VIOLA J. HEATH, Deceased, Plaintiffs and Appellants, v. NORWEST CAPITAL MANAGEMENT & TRUST CO., INC., Montana, Defendant and Respondent.
    No. 92-526.
    Submitted on Briefs April 22, 1993.
    Rehearing Denied Sept. 23, 1993.
    Decided August 24, 1993.
    50 St.Rep. 960.
    260 Mont. 143.
    859 P.2d 984.

      For Plaintiffs and Appellants: Robert L. Johnson, Attorney at Law, Lewistown; J. Douglas Alexander, Attorney at Law, Sidney.
    For Defendant and Respondent: Earl Hanson, Hanson & Todd, Billings; Walter S. Murfitt, Luxan & Murfitt, Helena.
   JUSTICE GRAY

delivered the Opinion of the Court.

Bill Tisher and Gayle Schleve (Tisher and Schleve) appeal from an order of the Thirteenth Judicial District Court, Yellowstone County, granting summary judgment to Norwest Capital Management and Trust Co. (Norwest) and denying their motion for summary judgment. We affirm.

The sole issue on appeal is whether the District Court erred in concluding that res judicata barred the claims asserted by Tisher and Schleve.

The facts surrounding this litigation are voluminous but relatively undisputed. Caleb and Viola Heath, longtime residents of Glendive, Montana, worked hard, were frugal, and accumulated considerable wealth during their lifetimes. They had no children, few intimate friends and were not particularly close to their relatives. On March 17, 1976, after consulting with their attorney, Kenneth Haag, Caleb and Viola each executed revocable living trusts leaving the bulk of their respective estates to charitable organizations, including the John Birch Society and the Twentieth Century Reformation Hour. Both trusts named Norwest as sole trustee. On the same date, Caleb and Viola executed “pour-over” wills that named the trusts as the beneficiaries of their residuary estates.

In 1977, Carol and Richard Schleve, Caleb’s niece and her husband, moved in with Caleb and Viola. On December 6,1977, attorney Haag received a letter from attorney Jerome Cate which, on apparent authorization of Caleb and Viola, terminated Haag’s services as Caleb and Viola’s attorney. On January 5, 1978, Caleb and Viola executed documents entitled “Amendment of Trust Agreement,” which benefitted their heirs instead of the charities mentioned above. On that date, Caleb and Viola also executed new wills which benefitted their heirs.

To assist Caleb and Viola in managing their property, they were advised to seek the appointment of First Trust Company of Montana (First Trust) as their conservator. On February 3, 1978, Caleb and Viola filed petitions in the District Court nominating First Trust as their conservator. Two weeks later, Caleb and Viola both executed documents entitled “Revocation of Trust,” which purported to entirely revoke the trusts with Norwest.

On February 24, 1978, Norwest, as trustee for Caleb and Viola’s trusts, filed an appearance in both of the conservatorship actions. Norwest asserted that Caleb and Viola were legally incompetent to execute either the amendments or the revocations to their trusts. Norwest also sought a protective order restraining all parties from interfering with the trusts until a court had determined the validity of the amendments and revocations.

Following a hearing, the District Court appointed First Trust as conservator of both Caleb and Viola’s assets and issued the protective order requested by Norwest. The court reserved for later judicial determination the issues of validity of the purported amendments and revocations.

On April 5,1978, First Trust, as Caleb and Viola’s conservator, filed a complaint against Norwest. Denominated Cause No. 10488A, the complaint alleged that Norwest had improperly converted the assets of Caleb and Viola when it refused to comply with the amendments and revocations of the trusts, and had mismanaged the trusts in violation of Montana statutes. The complaint was later amended, and damages were stated to be $6,500,000.

On July 10, 1978, the District Court granted partial summary judgment for Norwest on the issue of conversion. Regarding the mismanagement claim, the court ordered:

It is further ordered that such remaining part of the Plaintiff’s cause as may relate to the issues raised in their petitions filed in Probate Causes No. 10621 and No. 10622 relating to Caleb C. Heath and Viola J. Heath, are hereby dismissed without prejudice, for the purpose of determining those issues in the appropriate conservatorship forms [sic].

On August 17,1978, Caleb died. Both his March 17,1976 will and his January 5, 1978 will were filed for probate. The District Court, pursuant to Rule 42, M.R.Civ.P., consolidated the following actions:

• Cause No. 10621 Conservatorship of Caleb
• Cause No. 10622 Conservatorship of Viola
• Cause No. 10650 Petition for Probate of Caleb’s 3-17-76 will
• Cause No. 10652 Petition for Probate of Caleb’s 1-5-78 will

On December 15,1980, in the consolidated action, a Joint Petition for Settlement was filed to settle all pending litigation between First Trust, Norwest and Caleb and Viola’s heirs. The District Court issued findings of fact, conclusions of law and order approving the settlement on December 30,1980. Under the settlement, Caleb and Viola’s 1976 trusts and wills were acknowledged to be valid and operative. In exchange, the heirs would receive $1,000,000 from the trust monies.

When the settlement was final, Norwest was appointed as Viola’s conservator at First Trust’s request. Norwest also was named special administrator for Caleb’s estate. On April 3, 1981, Norwest filed a combined final accounting as special administrator of Caleb’s estate and as trustee for Caleb’s trust. No objections were filed. The District Court approved the final accounting and dismissed with prejudice all pending litigation in the consolidated action on May 18, 1981. The final accounting provided that Caleb and Viola’s 1976 wills and trusts were valid and operative and distributed Caleb’s assets pursuant to the 1976 will and trust. Norwest continued to manage Viola’s trust and filed periodic accountings.

Viola died on December 13, 1987. Pursuant to Viola’s March 17, 1976, will, Norwest was appointed co-personal representative with Mr. Donald Bouchard. On March 1,1988, Norwest, as Viola’s conservator, filed its final accounting of the conservatorship with the District Court. On March 15, 1988, the court held a hearing on the conservatorship and issued an order approving the final accounting, including leave to distribute the assets of the conservatorship into Viola’s probate estate. Viola’s co-personal representatives subsequently filed the closing statement in the probate proceeding of Viola’s 1976 will on September 14, 1988.

Approximately six months after the closing statement was filed, Tisher and Schleve sought probate of Viola’s January 5, 1978 will. Schleve is Caleb’s niece and Tisher is Viola’s nephew. Norwest contested the 1978 will and the matter was set for trial. As part of a settlement, the parties agreed to admit Viola’s 1978 will to probate. At that time, less than $100,000 in assets, those not previously placed in the trust, remained for distribution under Viola’s will. Pursuant to Viola’s 1978 will, Tisher and Schleve were appointed co-personal representatives of Viola’s estate.

Tisher and Schleve, as co-personal representatives of Viola, filed the present action against Norwest on October 10, 1990. The complaint alleged that Norwest failed to distribute the trust assets as provided for in the amended trust or, alternatively, failed to return Viola’s assets after receiving her revocation of the trust. They also claimed that Norwest, as Viola’s conservator from December 30,1980, to her death, had breached its fiduciary duty to Viola by mismanaging her estate to its own benefit. Norwest moved for, and was granted, a change of venue to Yellowstone County.

Norwest then moved for summary judgment on the complaint; Tisher and Schleve responded by moving for summary judgment on their claims relating to Viola’s amendment and revocation of her trust. The Thirteenth Judicial District Court, Yellowstone County, granted Norwest’s motion, denied Tisher and Schleve’s motion, and dismissed their complaint in its entirety. This appeal follows.

Did the District Court err in concluding that res judicata barred the claims asserted by Tisher and Schleve?

The District Court initially applied the doctrine of res judicata to Tisher and Schleve’s claims concerning the purported amendment and/or revocation of Viola’s trust. The court found that Viola was a party to her conservatorship action, Cause No. 10622 in Dawson County, and that Norwest had raised the issue of her competency to execute the amendment and the revocation in that action. The court concluded that the settlement and dismissal with prejudice of Cause No. 10622 in the consolidated action barred relitigation of the validity of the purported amendment and revocation.

The court also determined that Norwest’s accountings of its actions regarding the trust estate precluded further litigation regarding Norwest’s management of the trust estate. Thus, the court concluded that res judicata barred the breach of fiduciary duty claim as well. We will examine each of the court’s conclusions regarding res judicata in turn.

Our standard in reviewing a grant of summary judgment is the same as that initially used by the trial court. McCracken v. City of Chinook (1990), 242 Mont. 21, 24, 788 P.2d 892, 894. Summary judgment is appropriate when the pleadings, depositions, and other documents on file demonstrate that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P. Here, the District Court’s summary judgment decisions turned on its legal conclusion that res judicata barred Tisher and Schleve’s claims. Our review of legal conclusions is plenary. Steer, Inc. v. Dep’t of Revenue (1990), 245 Mont. 470, 475, 803 P.2d 601, 603.

Validity of Viola’s Amendment and Revocation of her Trust

The doctrine of res judicata is grounded in the idea that litigation must at some point come to an end. Orlando v. Prewett (1989), 236 Mont. 478, 481, 771 P.2d 111, 113. Thus, a party is prohibited from relitigating a matter that the party has already had an opportunity to litigate. Trader’s State Bank v. Mann Farms, Inc. (Mont. 1993), 852 P.2d 604, 611, 50 St.Rep. 509, 513; Whirry v. Swanson (1992), 254 Mont. 248, 250, 836 P.2d 1227, 1228. The four criteria for res judicata are:

1) the parties or their privies must be the same;
2) the subject matter of the action must be the same;
3) the issues must be the same and relate to the same subject matter; and
4) the capacities of the persons must be the same in reference to the subject matter and to the issues.

Trader’s State Bank, 852 P.2d at 611.

Looking to the first factor, we have defined privies as those who are so connected with the parties in estate or in blood or in law as to be identified with them in interest and, consequently, to be affected with them by litigation; examples are lessor and lessee, heir and ancestor, executor and testator. In re Smith’s Estate (1921), 60 Mont. 276, 299, 199 P. 696, 703. Viola was an original party to Cause No. 10622, the conservatorship action in Dawson County; Tisher and Schleve, the personal representatives under Viola’s will, are her privies in this action. In addition, the parties agree that Northwestern Union Trust Company, named in early pleadings in the previous litigation, is the same entity as Norwest.

Tisher and Schleve argue that Viola was neither a party to, nor represented by counsel in, the final settlement of the Dawson County consolidated action. We find no evidence of record to support this contention. As explained, Viola was a party to her conservatorship proceeding, Cause No. 10622, which was later consolidated and settled in Dawson County. First Trust was appointed as Viola’s conservator on February 27,1978, and continued to act on her behalf until the settlement in the consolidated action was final. The Joint Petition for Settlement indicates:

Thereafter, a conference was held by the undersigned attorneys with one of the trust officers for First Trust Company of Billings, Montana, who acts as Conservator for Viola J. Heath. A complete and full disclosure and discussion of the proposed settlement matter was made to First Trust Company as Conservator for Viola J. Heath. ... After a payment of settlement proceeds, if approved, there will be substantial assets remaining in Trust and outside of the Trust to support Viola J. Heath during her lifetime. ...

Concerning her legal representation, Jerome Cate represented Viola individually until June of 1978, at which time Robert Stevens appeared on behalf of Viola and her conservator, First Trust. Stevens signed the Joint Petition for Settlement as “Robert L. Stevens, Jr., Attorney for all of the heirs at law indicated on Exhibit “A” hereto and Attorney for First Trust Company of Montana, as Conservator for Viola J. Heath” (emphasis added). Section 72-5-427(3)(s), MCA, provides that conservators have the power to settle a claim by or against the estate or the protected person by compromise, arbitration or otherwise. We agree with the District Court’s conclusion that Viola was adequately represented and appeared as a party throughout the litigation. As such, we conclude that the first requirement of res judicata is satisfied here.

The second criterion is also met, as the subject matter of both the previous litigation in Dawson County and the present case concerns the various wills and trusts executed by Viola Heath. Regarding the fourth criterion, the capacities of the parties involved have not changed in the way they relate to the subject matter and issues between them; Viola, either personally, represented by her conservator or through her personal representatives, has asserted a position contrary to that of Norwest regarding the purported amendments and revocations in both actions. See First Bank Missoula N.A. v. District Court (1987), 226 Mont. 515, 521, 737 P.2d 1132, 1135.

The third criterion necessary for application of res judicata, identity of issues, is also met here. In the present complaint, Tisher and Schleve allege that Viola amended and revoked the 1976 trust in 1978 and that Norwest wrongfully refused to honor the amendment and revocation. It is also apparent that the validity of Viola’s amendment and revocation of her trust was directly at issue in the conservator-ship action and, later, the consolidated action in Dawson County; the record is replete with references to that precise issue.

For example, in Cause No. 10488A, First Trust, as Viola’s conservator, made allegations against Norwest nearly identical to those contained in Tisher and Schleve’s present complaint. The Dawson County District Court directed that those issues be addressed in the “appropriate” conservatorship action.

Then, in Viola’s conservatorship action, Norwest alleged:

That according to the information, belief and knowledge of petitioner, Viola J. Heath at all times material hereto was mentally incompetent to execute the purported AMENDMENT OF TRUST AGREEMENT ... and the purported REVOCATION OF TRUST.
That petitioner alleges upon information and belief, at all times material hereto, in addition to her inability to manage her property by reason of mental deficiency, physical illness or disability and advanced age, Viola J. Heath was and is subject to undue influence or [sic] persons unknown to petitioner at this time and that undue influence was exercised against said Viola J. Heath in securing her signature on both the purported AMENDMENT OF TRUST and the purported REVOCATION OF TRUST.

On May 22, 1978, at a preliminary hearing in the consolidated case, the District Court stated:

[h]opefully we can get this issue of competency litigated in the conservatorship in such a way that everybody ought to know where they stand. ... I want to let 12 good people decide this question as to what the Heaths have done in the past, what, if what they have, and if what they’ve done is valid, fine, so be it. And if it isn’t, then let’s find out where were at. Do we have a trust or don’t we have a trust? Are the amendments good? Are the revocations good?

The Joint Petition for Settlement in the consolidated action itself characterizes the dispute as a “determination of the validity of the Caleb C. Heath and Viola J. Heath Revocable Living Trusts dated March 17,1976, and their respective wills dated the same date.” The settlement petition also explained that Norwest’s position was that the amendment and revocation were void due to undue influence and mental incompetence, while Caleb and Viola’s heirs defended the 1978 amendment, revocation and new will.

It is clear that the issue of the validity of the amendment and revocation of Viola’s trust, as referenced in the consolidated action in Dawson County, is the same issue contained in Tisher and Schleve’s amendment/revocation claims. Therefore, we conclude that all four elements of res judicata are met with regard to the validity of Viola’s 1978 amendment and revocation of her trust.

Tisher and Schleve argue strenuously that Viola’s claims concerning revocation and amendment of the trust have never been heard or tried before a court. However, even if true, application of res judicata is not precluded. As we have previously held, res judicata stands for the proposition that a party should not be able to relitigate a matter that the party has already had the opportunity to litigate. First Bank, 737 P.2d at 1134. In First Bank, after a default on a loan and a sale of collateral, First Bank filed a complaint seeking a deficiency judgment against the borrowers. In their answer, the borrowers asserted several affirmative defenses. The parties settled the matter and a stipulation and order of dismissal were filed. Ten months later, the borrowers filed an action against First Bank, alleging fraud and misrepresentation in the making of the loan. First Bank, 737 P.2d at 1133.

This Court concluded that res judicata barred the borrowers from bringing their action against First Bank. Although the borrowers were given the opportunity to litigate the issues raised in their complaint, they instead agreed to stipulate to a dismissal. The effect of a stipulation for dismissal is the same as a judgment on the merits; accordingly, a dismissal is res judicata as to every issue raised in the action. First Bank, 737 P.2d at 1135.

As in First Bank, Viola had the opportunity to litigate the issues surrounding the amendment and revocation of her trust in the consolidated action in Dawson County; she agreed, through her conservator, to settle the matter. The District Court’s findings of fact and conclusions of law and order approving the settlement explicitly provided that the 1976 will and trust of Viola C. Heath were “acknowledged to be valid and operative.” Tisher and Schleve cannot now complain that “there has been no trial in any court” of Viola’s amendment and revocation claim. First Bank, as Viola’s conservator, signed the settlement petition and the District Court’s Order and Decree became a final judgment. We emphasize that:

[a] judgment is binding and conclusive between all parties to the suit and their privies and successors in interest, as to all matters adjudicated therein and as to all issues which could have been properly raised irrespective of whether the particular matter was in fact litigated.

Orlando, 771 P.2d at 113. The issues of the validity of the amendment and revocation were, therefore, resolved in the consolidated action, without regard to whether the issues actually proceeded to trial.

Tisher and Schleve also assert that on April 5,1978, less than two months after Viola’s attempted revocation of her trust, First Trust, as her conservator, also revoked her trust and sent a copy of the revocation to Norwest. They characterize First Trust’s action as a “confirmation of Viola’s revocation of her trust” and maintain that First Trust’s revocation somehow survived the settlement in the consolidated action. We disagree.

Without regard to whether First Trust’s action is construed as an independent revocation by First Trust or a confirmation of Viola’s revocation, it too is barred by res judicata. First Trust’s action occurred prior to the Joint Petition for Settlement, which First Trust signed and which confirmed the validity of Viola’s 1976 trust without amendment or revocation. Res judicata applies equally to First Trust’s alleged revocation of Viola’s trust.

We conclude that the District Court did not err in granting summary judgment for Norwest on Tisher and Schleve’s claims concerning revocation and amendment of Viola’s trust on the basis of res judicata. For that reason, we need not address Tisher and Schleve’s arguments concerning their entitlement to summary judgment on those claims.

Breach of Fiduciary Duty

We now turn to the District Court’s conclusion that res judicata barred Tisher and Schleve’s claim that Norwest breached its fiduciary duty to Viola. The District Court determined that, because Norwest’s final accounting regarding Viola’s trust had been approved, all issues regarding the management of the trust were conclusively decided. Tisher and Schleve contend that the District Court’s analysis is flawed because it analyzed their claim as a breach of a trustee’s fiduciary duty instead of a breach of a conservator’s fiduciary duty, as alleged in their complaint.

We agree that the District Court incorrectly characterized Tisher and Schleve’s claim, but conclude that the result reached was correct. We have previously affirmed a trial court’s result even though it may have been arrived at for the wrong reason. Wolfe v. Webb (1992), 251 Mont. 217, 234, 824 P.2d 240, 250.

Norwest filed its final accounting as Viola’s conservator with the Seventh Judicial District Court, Dawson County, on March 1, 1988. No objections were filed. After a hearing on March 15,1988, that court issued an order and decree approving the final accounting and discharging Norwest from its role as Viola’s conservator. It expressly provided that the decree was final, conclusive and binding upon all interested parties. No appeal was taken from the order approving the final accounting.

Norwest’s final accounting as Viola’s conservator is governed by § 72-5-438, MCA (1987), (emphasis added), which provides:

Accounts - final and intermediate. (1) Unless waived by the court, every conservator must account to the court for his administration of the trust annually for the preceding year and also upon his resignation or removal. A copy of the account must be served upon the protected person’s parent, guardian, child, or sibling if that person has made an effective request under 72-5-404. On termination of the protected person’s minority or disability, a conservator may account to the court or he may account to the former protected person or his personal representative.
(2) Subject to appeal or vacation within the time permitted, an order made upon notice and hearing allowing an intermediate account of a conservator adjudicates as to his liabilities concerning the matters considered in connection therewith; and an order made upon notice and hearing allowing a final account adjudicates as to all previously unsettled liabilities of the conservator to the protected person or his successors relating to the conservatorship.

Under this statute, the court’s order and decree approving the conservator’s final accounting adjudicated all previously unsettled liabilities of Norwest to Viola or her successors.

The general rule is that a final settlement of the accounts of a guardian, executor, administrator, conservator, or other trustee judicially determined at a formal hearing of which all interested parties have notice is considered to be a judgment which becomes res judicata. In re Guardianship of Bremer (Neb. 1981), 307 N.W.2d 504, 508; In re Conservatorship of Estate of Lindauer (Neb. 1985), 376 N.W.2d 1, 2; see also In re Estate of Counts (1985), 217 Mont. 350, 354, 704 P.2d 1052, 1055. In Bremer, a district court approved the final accounting of a conservator, Mr. Weir, and then appointed Mr. Weir as guardian of the same protected person. After the protected person died, Mr. Weir filed his final accounting as guardian and, at the hearing on that accounting, the heirs claimed that Mr. Weir had breached his fiduciary duty during the period of conservatorship. The Nebraska Supreme Court concluded that res judicata barred the heirs’ claim; their failure to object to the conservator’s final accounting prohibited them from raising the claim for breach of fiduciary duty at a later date. Bremer, 397 N.W.2d at 508-9.

We reach the same conclusion here. The District Court approved of Norwest’s final accounting as conservator on March 15, 1988. This order was neither appealed nor objected to on any grounds. Absent such action, res judicata prohibits Tisher and Schleve from now alleging that Norwest breached its fiduciary duty during the conservatorship.

Tisher and Schleve argue that because only Norwest received notice of the hearing on the final accounting, the District Court’s order approving the final accounting cannot be considered a final judgment. We disagree. Section 72-5-438, MCA (1987), requires notice only to “the protected person’s parent, guardian, child, or sibling if that person has made an effective request under 72-5-404.” Tisher and Schleve are not among those listed in the statute. Nor did they request notice as required by the statute, notwithstanding their knowledge that Norwest had served as Viola’s conservator since 1980 and the likelihood that they knew of her death in December, 1987.

Furthermore, as a practical matter, Norwest had no way of ascertaining the identities or addresses of those persons who might wish to receive notice of the conservator’s final accounting, absent a request for notice as provided in § 72-5-404, MCA (1987). We conclude that the District Court’s order and decree approving the final accounting is a final judgment on all matters concerning the conservatorship.

Tisher and Schleve next assert that Norwest, during the period it served as Viola’s co-personal representative, had an obligation to appeal or contest the final accounting, and that its failure to do so gives rise to a claim of breach of fiduciary duty. No such claim was asserted in Tisher and Schleve’s complaint; their third claim rested entirely on their allegations that Norwest, as Viola’s conservator, breached its fiduciary duty to Viola.

Finally, Tisher and Schleve contend that the District Court’s application of res judicata deprived them of their constitutional right to due process. It is well settled that this Court will not address on appeal an issue not presented to the district court. Duensing v. Travelers Co. (1993), 257 Mont. 376, _, 849 P.2d 203, 209, 50 St.Rep. 316, 320. This constitutional argument was not presented to the District Court and, therefore, will not be entertained by this Court.

Once there has been a full opportunity to present an issue for judicial decision, the judgment must be accorded finality “else judgments may be attacked piecemeal and without end.” First Bank, 737 P.2d at 1135. The order approving the settlement of the consolidated action in Dawson County and the final approval of the conservator’s accounting must be accorded finality here. We conclude that the District Court did not err in concluding that res judicata barred Tisher and Schleve’s claims against Norwest.

Affirmed.

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


author: JUSTICE HARRISON

text:
    JESS BEERY, Conservator and Guardian for Danny Beery, an incapacitated person, Petitioner and Appellant, v. GRACE DRILLING, Employer, and CNA INSURANCE COMPANY, Defendant and Respondent.
    No. 92-488.
    Submitted on Briefs April 1, 1993.
    Decided August 26, 1993.
    50 St.Rep. 980.
    260 Mont. 157.
    859 P.2d 429.

      For Petitioner and Appellant: Gene R. Jarussi, Jarussi & Bishop, Billings.
    For Defendant and Respondent: Todd A. Hammer, Warden, Christiansen, Johnson & Berg, Kalispell.
   JUSTICE HARRISON

delivered the Opinion of the Court.

This is an appeal from a judgment entered in the Workers’ Compensation Court, the Honorable Timothy W. Reardon presiding. The Workers’ Compensation Court determined that the claimant, Danny Beery (Beery), was not entitled to receive domiciliary care benefits, nor was he entitled to his costs, attorney’s fees, or a penalty. We affirm.

In his brief, Beery raises issues concerning equitable estoppel, waiver, breach of contract, judicial estoppel, attorney’s fees and costs, and statutory penalties. For reasons discussed below, however, the only issue before this Court is whether the Workers’ Compensation Court erred in concluding that CNA was not equitably estopped from contesting Beery’s entitlement to domiciliary care benefits.

On November 4, 1984, Beery suffered an industrial injury while working for Grace Drilling. He fell approximately twenty-five feet from an oil rig, suffering multiple fractures to his left leg, first, second and third degree bums, and a closed head injury that initially went undetected. Respondent CNA Insurance Company (CNA) served as Grace Drilling’s insurer under Plan II of the Workers’ Compensation Act. Beery is currently receiving permanent total disability benefits. Those benefits are not contested or at issue here.

In February 1989, CNA petitioned the district court to have a limited guardian and conservator appointed to represent Beery and manage his affairs regarding his workers’ compensation claim. The district court appointed Beery’s son, Jess, for that purpose.

Because Beery does not contest the Workers’ Compensation Court’s ultimate determination that he is not entitled to domiciliary care benefits under the five part test adopted in Carlson v. Cain (1985), 216 Mont. 129, 700 P.2d 607, an extensive discussion of the medical evidence is not necessary. A summary of the three medical panel evaluations Beery underwent provides sufficient background for an understanding of this matter.

In May 1987, the Yellowstone Valley Medical Evaluation Panel found that Beery demonstrated significant organic brain syndrome and that his intellect, thinking ability, judgment, affect, and potential were “markedly impaired.” The panel expressed concerns about Beery’s competency to manage his own affairs but found him self-sufficient. It suggested psychological retesting in six to twelve months.

In November 1987, the same panel found that there had been “no significant change” in the test results from the May evaluation; therefore, the panel anticipated that Beery’s condition had stabilized. The panel felt that although Beery did not require constant supervision he would need “at least once daily assistance and supervision.” It did not feel that he needed an attendant to help him perform independently the activities of daily living such as bathing, dressing, feeding and meeting basic bodily needs. The panel did feel that Beery would need assistance in handling his financial and legal affairs.

At CNA’s request, a Kalispell medical panel evaluated Beery in April 1991. The members of this panel conducted their own evaluations and reviewed Beery’s extensive medical records and the results of the two previous medical panel evaluations. They also reviewed surveillance reports and video tapes of Beery that showed him driving his truck on numerous occasions and operating a tractor on his farm. The panel concluded that Beery did not need a personal attendant or domiciliary care.

Prior to receiving the Kalispell report, CNAhad been paying Beery domiciliary care benefits. In a letter dated September 25,1987, James Putman, CNA’s adjuster, stated that CNA would initiate payments “pending further evaluation as to the necessity and extent of your client’s domiciliary requirements... [and] as a compromise in an effort to avoid premature litigation ....” In a letter dated March 17, 1988, Putman agreed to pay $616 per week for Beery’s past care and to continue at that rate in the future.

On April 30, 1988, the parties entered an agreement entitled “Compromise, Settlement And Release Of Claim For Payment For Domiciliary Care Previously Provided.” That settlement covered the period from November 24, 1984 through April 16, 1988. The parties stated that they desired to “resolv[e] such claim without further cost, time, litigation or expense,” and the settlement was made “without any admissions on anyone’s part.”

After entering that settlement, CNA continued to pay benefits at the rate of $616 per week. Then, based on the report of the Kalispell panel, CNA terminated all payments for domiciliary care on August 12,1991.

Beery responded to the termination of benefits by petitioning the Workers’ Compensation Court for a hearing, praying that domiciliary care benefits be reinstated. The parties stated the issues in the pretrial order as follows:

1. Whether the claimant has been since August 12, 1991, and currently is entitled to receive domiciliary care paid for by the Defendant?
2. Is the claimant entitled to a penalty, reasonable costs and attorney fees pursuant to Montana law?

The parties’ “Statement of Contentions” in the pretrial order merely reiterated the issues stated above. Beery raised the issues of waiver, breach of contract, and judicial estoppel for the first time in his proposed findings of fact, conclusions of law and judgment. Beery raised and briefed the issue of equitable estoppel for the first time in his reply to CNA’s proposed findings, conclusions, and judgment.

The Workers’ Compensation Court concluded that Beery had failed to support his need for domiciliary care by medical evidence as required by Carlson. The court also concluded that CNA was not equitably estopped from terminating benefits.

In reviewing a decision of the Workers’ Compensation Court, we determine whether substantial credible evidence supports its findings. Richardson v. Columbia Falls Aluminum Co. (1991), 248 Mont. 41, 43, 808 P.2d 500, 501. In reviewing conclusions of law we determine whether the Workers’ Compensation Court’s interpretation of the law is correct. Stanley Structures v. Scribner (1992), 253 Mont. 236, 239, 833 P.2d 166, 169.

The Workers’ Compensation Court did not address the issues of waiver, breach of contract, or judicial estoppel, presumably because these were not raised in the petition or the pretrial order. Under Rule 16(e), M.R.Civ.P., the pretrial order “controls] the subsequent course of the action unless modified by a subsequent order.” The pretrial order “should be liberally construed to permit any issues at trial that are ‘embraced within its language.’ ” Bell v. Richards (1987), 228 Mont. 215, 217, 741 P.2d 788, 790 (citations omitted). However, the limited statement of issues in the pretrial order in this case cannot be construed so liberally as to embrace the issues of waiver, judicial estoppel and breach of contract. The threshold question in determining entitlement to domiciliary care benefits is whether the five part test of Carlson is met. Furthermore, we said in Montana Deaconess Medical Center v. Doherty (1990), 241 Mont. 243, 246, 786 P.2d 669, 671, that “[w]e may on appeal review only those issues decided by the District Court....”

We distinguish this case from Akhtar v. Van De Wetering (1982), 197 Mont. 205, 642 P.2d 149, where we found that there was sufficient indication that due process was an issue at the trial level to consider it on appeal. There, we relied on the fact that due process was referred to extensively in the appellant’s trial brief and proposed conclusions of law and the district court made a specific finding regarding due process. 642 P.2d at 152. In the present case, Beery did not argue these issues before the hearing, but only interjected them into his proposed findings and conclusions. As the Workers’ Compensation Court did not address these issues, we will not address them either.

Beery does not contest the Workers’ Compensation Court’s conclusion that he failed to meet the five part test of Carlson for entitlement to domiciliary care benefits. Because he did not raise or argue this issue in his brief, the issue is deemed waived and we need not address it. Teesdale v. Anschutz Drilling Co. (1960), 138 Mont. 427, 431, 357 P.2d 4, 7; Hagerty v. Hall (1959), 135 Mont. 276, 283, 340 P.2d 147, 151. See also Schaubel v. Iversen (1993), [257 Mont. 164], 848 P.2d 489, 50 St.Rep. 213 (issue of whether district court erred in determining that appellants had failed to establish prima facie case of negligence was waived because not raised or argued in their brief). “This Court will not endeavor to review a matter when appellant has directed no argument toward it.” Sands v. Nestegard (1982), 198 Mont. 421, 428, 646 P.2d 1189, 1193.

Furthermore, because we hold that CNA properly terminated domiciliary care benefits, Beery is not entitled to attorneys fees, costs or a penalty. See §§ 39-71-611 and 39-71-2907, MCA (1983). Equitable Estoppel

Beery raised and briefed the issue of equitable estoppel in his reply to CNA’s proposed findings, conclusions and judgment. He explained that he raised the issue then for the first time because “it was not until receipt of the Defendant’s Proposed Findings, Conclusions, and Judgment that the Claimant realized that the Defendant was going to ask this Court to reheve it from the obligation to pay for domiciliary care which it willingly undertook in 1988 by revealing that it really didn’t mean what it said when the contract was negotiated.”

The Workers’ Compensation Court addressed the issue of equitable estoppel, concluding that Beery failed to meet the first of six elements required for the doctrine to apply. We have stated the elements as follows:

“1. There must be conduct — acts, language, or silence — amounting to a representation or a concealment of material facts. 2. These facts must be known to the party estopped at the time of his said conduct, or at least the circumstances must be such that knowledge of them is necessarily imputed to him. 3. The truth concerning these facts must be unknown to the other party claiming the benefit of the estoppel, at the time when it was acted upon by him. 4. The conduct must be done with the intention, or at least with the expectation, that it will be acted upon by the other party, or under such circumstances that it is both natural and probable that it will be so acted upon. ... 5. The conduct must be relied upon by the other party, and, thus relying, he must be led to act upon it. 6. He must in fact act upon it in such a manner as to change his position for the worse....”

Mellem v. Kalispell Laundry & Dry Cleaners (1989), 237 Mont. 439, 442, 774 P.2d 390, 392 (quoting Davis v. Jones (1983), 203 Mont. 464, 467, 661 P.2d 859, 861). We reaffirmed and readopted these as the six essential elements in Dagel v. City of Great Falls (1991), 250 Mont. 224, 819 P.2d 186. However, “[e]stoppel is not favored and will only be sustained upon clear and convincing evidence.” Dagel, 819 P.2d at 193 (quoting Kenneth D. Collins Agency v. Hagerott (1984), 211 Mont. 303, 310, 684 P.2d 487, 490).

We also pointed out in Dagel that § 26-1-601, MCA, should be considered in an equitable estoppel case. 819 P.2d at 193. That statute provides:

List of conclusive presumptions. The following presumptions are conclusive:
(1) the truth of a declaration, act, or omission of a party, as against that party in any litigation arising out of such declaration, act, or omission, whenever he has, by such declaration, act, or omission, intentionally led another to believe a particular thing true and to act upon such belief!.]

In the present case, CNA’s adjuster, Putman, sent a letter to Beery’s lawyer on January 7,1988, stating among other things, “For the record, the insurer does not contest your client’s entitlement to domiciliary care, the full extent and value of which is yet to be determined.” Beery relies solely on this statement to argue that “it must be conclusively presumed that Danny is entitled to compensated domiciliary care.” We disagree. The statement is qualified as to both extent and value. CNA made no representation that Beery would always be entitled to domiciliary care benefits. The extent of care Beery required certainly could change over time. The medical evidence from the Kalispell panel was that Beery did not require domiciliary care in April of 1991. Therefore, this statement did not establish conclusively that Beery was and would always be entitled to domiciliary care. This is distinguishable from Dagel where the defendant made an affirmative, unqualified statement that the plaintiff was not covered by a contract or grievance procedure. 819 P.2d at 188.

As for equitable estoppel, the Workers’ Compensation Court found that Beery failed to meet the first of the six elements — a representation or concealment of material fact. The Workers’ Compensation Court reviewed the parties’ entire correspondence, concluding that it showed CNA’s reservations about Beery’s entitlement to domiciliary care benefits.

Specifically, the court relied on the document dated April 30,1988, entitled “Compromise, Settlement And Release Of Claim For Payment For Domiciliary Care Previously Provided.” In that document the parties compromised and settled Beery’s claim for domiciliary care for the period November 24, 1984, to April 16, 1988. They acknowledged that the purpose of the agreement was to resolve any claim Beery had for domiciliary care during that period to avoid further cost, time, litigation, or expense. They also stated that it was made “without any admissions on anyone’s part.” Based on this, the Workers’ Compensation Court concluded that Beery could not argue that he was never advised that CNA acknowledged his entitlement to domiciliary care only for the purpose of settlement and to avoid litigation.

Beery argues to this Court that the language in the April 1988 settlement referred only to the specific time period stated therein — November 24, 1984 to April 16,1988 — and no other. However, it was entered into three months after the January 7, 1988, letter on which Beery solely relies and covered any benefits he received during that period. The fact that those three months of payments were made only in the spirit of compromise and “without any admissions” supports the Workers’ Compensation Court’s findings and conclusions that no representation or concealment occurred.

The Workers’ Compensation Court also concluded that the fact that the document of April 16 did not mention domiciliary care after that date could not be construed to mean that CNA admitted Beery was entitled to benefits after that date.

The correspondence between the parties indicates CNA’s reservations about Beery’s need for domiciliary care. It also indicates CNA’s willingness to initiate and pay benefits without admitting liability for the reasons stated above. In the September 25,1987, letter to Beery’s counsel indicating that CNA would initiate benefits, Putman stated:

[T]his correspondence will serve to confirm the insurer’s agreement to initiate biweekly domiciliary payments... pending further evaluation as to the necessity and extent of your client’s domiciliary requirements. This agreement is intended as a compromise in an effort to avoid premature litigation and is not to be construed as an admission of liability [or] waiver of any future rights of defense. ... [I]t is my understanding that you agree that the payment of these benefits are in lieu of further investigation of your client’s cognitive impairment and the extent of cognitive deficit through further medical panel evaluation ....

After receiving the November 1987 medical panel report, Putman sent Beery’s counsel a letter on December 10,1987, stating:

In addressing your concerns regarding the issue of your domiciliary care, I will remain flexible on this issue as well. However, prior to any final determinations in this regard, I believe it would be appropriate to see what changes result from the recommended treatment.

To this point, CNAhad made no representation or concealed anything from Beery. The January 7, 1988, letter on which Beery relies followed. In that letter, Putman prefaced the specific statement Beery relies on by stating, “In conclusion, my correspondence of December 10, 1987 clearly references the insure[r]’s position regarding the domiciliary care issue.”

The statement Beery relies on cannot be read in a vacuum. It must be read in light of the other correspondence between the parties and the agreement of April 16, 1988. It must also be read in light of the prefacing statement and the qualifying language in the statement itself. When read in this manner, it does not amount to the “express[] representation], without qualification” that Beery argues CNA made.

Furthermore, even if the first element of equitable estoppel were satisfied, Beery could not satisfy the sixth element, which requires that he be put in a worse position than he would have been had there not been a representation or concealment. The Workers’ Compensation Court specifically concluded that Beery failed to satisfy the requirements that 1) the preponderance of credible medical evidence demonstrate a need for home nursing care, with a description of that care; 2) the services be performed under the direction of a physician; and 3) the services be of the type normally rendered by trained attendants and not within the scope of normal household duties. Beery argues that because he relied on Putman’s statement he made no further attempt after January 1988 to establish the five elements of the Carlson test.

However, Beery had a full opportunity to develop this evidence for the hearing. The record before the Workers’ Compensation Court contained the depositions of Beery’s wife and two sons and the depositions of some of the doctors from the medical panels that evaluated Beery. It also contained the extensive medical records and reports and the surveillance tapes produced by the insurer’s investigator. The Workers’ Compensation Court concluded that the evidence showed Beery was not entitled to domiciliary care. Because he had full opportunity before the hearing to develop his case to show that domiciliary care was medically necessary, Beery cannot claim he was put in a worse position than he would have been. See Berglund and Berglund, Inc. v. Contributions Bureau (1990), 241 Mont. 49, 784 P.2d 933 (equitable estoppel not applicable where plaintiff could not show by clear and convincing evidence that he relied on misrepresentation to his detriment).

We hold that the Workers’ Compensation Court correctly concluded that CNA was not equitably estopped from contesting Berry’s entitlement to domiciliary care benefits.

Affirmed.

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