author: MR. CHIEF JUSTICE TURNAGE

text:
    COLONIAL INSURANCE COMPANY OF CALIFORNIA, Plaintiff and Respondent, v. ROGER LEE BLANKENSHIP, Defendant, and DAVID P. SANDFORD, Defendant, and Appellant.
    No. 88-001.
    Submitted on Briefs March 24, 1988.
    Decided May 3, 1988.
    753 P.2d 880.

      James T. Harrison, Jr., Harrison, Loendorf and Poston, P.C., Helena, for David P. Sandford.
    Glen L. Drake, Keller, Reynolds, Drake, Sternhagen and Johnson, Helena, for Roger Lee Blankenship.
    Stephen M. Frankino, Hughes, Kellner, Sullivan and Alke, Helena, for Colonial Ins. Co. of California.
   MR. CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Plaintiff David P. Sandford appeals an order of the First Judicial District Court, Lewis and Clark County, granting summary judgment in favor of respondent Colonial National Insurance Company (Colonial). We affirm.

On September 20, 1986, Colonial renewed an automobile liability insurance policy that Colonial had previously issued to John Lloyd Johnson. Colonial’s policy with Johnson insured Johnson’s 1982 Chevrolet Camaro.

On October 3, 1986, Johnson sold the Camaro to his cousin, Roger Lee Blankenship, for $7000. Blankenship paid Johnson $5000 of the purchase price and orally agreed to pay the remaining $2000 within one year. The parties did not execute an agreement with respect to the $2000 and Johnson did not secure the debt with a lien. Following Johnson’s transfer of the certificate of title, Blankenship executed an application for a new title. A review of Blankenship’s application for a new title shows that the Camaro was subject to a lien in favor of Southwest Montana Federal Credit Union.

Subsequent to the above-described transaction, Johnson delivered the Camaro to Blankenship who immediately took possession. On October 4, 1986, Blankenship drove the Camaro to Helena.

At approximately 1:00 a.m. on October 5, 1986, Blankenship was driving the Camaro when he collided with a motorcycle driven by appellant David Sandford. As a result, Sandford was seriously injured. Blankenship fled the accident scene. In January or February 1987, Blankenship admitted to law enforcement authorities that he was involved in the October 5, 1987, accident.

On or about October 13, 1986, Blankenship purchased insurance, from another insurer, for the Camaro. Approximately three months later, Blankenship gave John Lloyd Johnson another vehicle in lieu of the $2000 debt owed to Johnson. Blankenship testified, by deposition, that Johnson agreed to leave his insurance on the Camaro until Blankenship could get coverage. Blankenship also stated that Johnson gave Blankenship Johnson’s certificate of insurance.

Blankenship did not request Colonial to transfer Johnson’s insurance policy to Blankenship. Colonial did not learn of the accident until Blankenship admitted his involvement in January or February 1987.

On May 19, 1987, Colonial brought this action seeking a declaratory judgment and requesting a stay of proceedings in a companion case. Following a hearing on October 15, 1987, the District Court, on November 3, 1987, granted summary judgment in favor of Colonial.

On appeal, defendant Sandford raises one issue for our review:

Did the District Court err when it held that Colonial’s automobile liability insurance policy issued to John Lloyd Johnson affords Roger Lee Blankenship neither coverage nor a defense to the claims asserted against him by David P. Sandford?

Appellant Sandford contends the District Court erred when it found that Colonial’s policy with Johnson did not provide liability coverage to Blankenship. Colonial’s policy provides that an “insured person” means the owner, the owner’s spouse or a permissive user.Appellant Sandford does not contend that Blankenship is a permissive user. Therefore, we must determine whether the District Court properly found that the sale was not conditional and that Johnson and Blankenship were not joint owners.

Previously we considered the issue of who was the owner of an automobile for insurance purposes. In Safeco Insurance Company v. Lapp (Mont. 1985), [215 Mont. 196,] 695 P.2d 1310, 1312, 42 St.Rep. 289, 290, we stated: “Ownership for insurance purposes can be determined by the intent of the parties and language of the insurance contract.” In Lapp the certificate of title had not been transferred to the buyer at the time of the accident. However, we held that, based on the intent of the parties, the purchaser was the owner of the vehicle. Lapp, 695 P.2d at 1312, 42 St.Rep. at 290. Clearly, Blankenship is the automobile’s owner under Lapp.

Section 61-1-310, MCA, defines an automobile “owner.” It provides:

“ ‘Owner’ means a person who holds the legal title to a vehicle. If a vehicle is the subject of an agreement for the conditional sale thereof with the right of purchase upon performance of the conditions stated in the agreement and with an immediate right of pos session vested in the conditional vendee, or in the event a vehicle is subject to a lease, contract, or other legal arrangement vesting right of possession or control, for security or otherwise, or in the event a mortgagor of a vehicle is entitled to possession, then the owner is the person in whom is vested right of possession or control. [Emphasis added.]”

In Truck Insurance Exchange v. Nelson (Mont. 1987), [228 Mont. 233,] 743 P.2d 572, 44 St.Rep. 1482, we clarified “intent of the parties” to mean the parties to an insurance contract. “The purchase of property and the insurance of property are distinct transactions . . . The purchase contract is essentially irrelevant to the acquisition of insurance. We will not allow the purchase agreement to dictate the interpretation of the insurance agreement.” Nelson, 743 P.2d at 574, 44 St.Rep. at 1485. See also, Section 61-1-310, MCA.

Appellant Sandford contends that at the time of the accident Blankenship owed Johnson $2000 on the purchase price. Therefore, appellant argues, the sale was conditional and the parties were joint owners. Appellant cites the endorsements section of Colonial’s insurance policy which provides:

“. . . Except with respect to bailment lease, conditional sale, purchase agreement, mortgage or other encumbrance, the named insured is the sole owner of the vehicle unless otherwise stated herein: Absence of an entry means no exception. [Emphasis added.]”

After careful review of the record, we hold the District Court correctly found the sale was not conditional. Johnson was the named insured in the policy. Neither Blankenship nor Johnson requested Colonial to transfer Johnson’s policy to Blankenship. The sale to Blankenship was not entered as an exception. Further, appellant presented no evidence that Johnson retained any interest in the Camaro. The $2000 owed by Blankenship to Johnson was simply an unsecured debt and not part of a conditional sale. Additionally, Blankenship acquired title to the car and exercised total control of the automobile.

If, arguendo, we agreed with appellant that the automobile sale was conditional, Section 61-1-310, MCA, determines the issue in an identical manner. Section 61-1-310, MCA, provides in pertinent part: “If a vehicle is the subject of an agreement for the conditional sale . . . the owner is the person in whom is vested the right of possession or control.” Therefore, Blankenship, as the person in possession of the Camaro, is the “owner” under Section 61-1-310, MCA. Johnson’s insurance policy with Colonial does not afford Blankenship, as owner of the Camaro, with coverage.

Clearly the contract, the record and Section 61-1-310, MCA, support the District Court’s finding the sale was not conditional and that Colonial’s policy with Johnson affords Blankenship neither coverage nor a defense to claims asserted against him by appellant Sandford.

Accordingly, the judgment of the District Court is affirmed.

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


source: Caselaw Access Project

author: MR. JUSTICE SHEEHY

license: Public Domain

text:
    MOATS TRUCKING COMPANY, INC., a Montana Corporation, Lloyd Moats and Lucille Moats, Plaintiffs and Appellants, v. GALLATIN DAIRIES, INC., a Montana Corporation, Defendants and Respondent.
    No. 87-259.
    Submitted on Briefs March 18, 1988.
    Decided May 3, 1988.
    753 P.2d 883.

      Lyman H. Bennett, III, Morrow, Sedivy and Bennett, P.C., Bozeman, for plaintiffs and appellants.
    Berg, Coil, Stokes and Tollefsen, Michael Cok, Cok and Wheat, Bozeman, for defendant and respondent.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

Plaintiff Moats Trucking Company appeals from a jury verdict from the District Court, Eighteenth Judicial District, Gallatin County. The plaintiff brought this action against the defendant alleging breach of contract as well as breach of the covenant of good faith and fair dealing arising out of a termination of an oral agreement. The jury returned its verdict in favor of the defendant and awarded no damages. From this judgment, plaintiff appeals. We affirm.

Moats Trucking Company presents the following issues for our review:

1. Did the District Court err in refusing to admit evidence pertaining to the issue of mental and emotional distress suffered by Lloyd and Lucille Moats?

2. Did the District Court err in ruling that Keith Nye’s testimony was not hearsay?

3. Did the District Court err in denying plaintiffs a new trial as the verdict reached by the jury was contrary to the law?

In 1956, the plaintiff Lloyd Moats began hauling milk for the defendant Gallatin Dairies, Inc. (Gallatin). Moats’ relationship with the dairy was that of an independent contractor. As time passed, Gallatin’s operation increased in size. Moats Trucking Company also expanded in order to meet Gallatin’s hauling needs. No written agreement was ever entered into between Moats and Gallatin.

In 1970, Lloyd Moats and his wife, Lucille, incorporated their trucking business and formed Moats Trucking Company (MTC). Lloyd and Lucille Moats were the directors and sole stockholders of MTC. MTC continued to do the hauling for Gallatin.

The rising cost of fuel in the late 1970’s resulted in problems for both Gallatin and MTC. MTC requested five separate rate increases from Gallatin during the period between 1978-1981. The increased transportation costs resulted in reduced profits prompting Gallatin’s board of directors to investigate ways of reducing the operating budget. At that time, the defendant’s Montana hauling was being done by two companies. MTC was responsible for the Gallatin valley as well as the Spokane run and Milky Way Trucking covered the western Montana region for Gallatin.

In fall, 1981, Gallatin leased its own tractor-trailer and took over MTC’s Spokane run. The Spokane run was terminated on 30 days notice without any objection by MTC. As a result of doing its own hauling to Spokane, Gallatin realized significant savings. Subsequent to assuming the Spokane run, Gallatin’s board of directors reviewed all of Gallatin’s transportation costs.

In 1982, Gallatin requested that MTC submit a bid covering Gallatin’s entire transportation needs. MTC did not object to submitting a bid and did submit a bid. Upon review of the bids, Gallatin decided to lease its own trucks and assume the plant-to-market hauling in the Gallatin valley. At this same time, Gallatin terminated MTC’s Gallatin valley agreement on 49 days notice and gave MTC the western Montana routes previously handled by Milky Way. The oral agreement became effective April 1, 1982. The duration of the 1982 agreement has been the subject of intense dispute between the litigants. After the new contract had been negotiated MTC borrowed a significant amount of money to improve its operation.

In March, 1983, Lloyd Moats met with Gallatin’s board of directors and requested that MTC be granted another rate increase. Moats brought documents which suggested that MTC could not stay solvent operating under the 1982 agreement. A new rate increase was negotiated and granted. This agreement became effective April 1, 1983.

In May, 1983, Gallatin’s board of directors again met to look into alternative means by which to reduce transportation costs. The board concluded that it could save a significant amount of money by doing its own hauling.

Because of the significant savings available, Gallatin decided to terminate the contract with MTC and lease the equipment and vehicles necessary to do its own hauling. Once the leased equipment arrived at Gallatin, MTC was notified that its agreement with Gallatin was terminated. Gallatin gave MTC 48 days notice of termination. MTC did not object to the termination or the notice.

MTC brought this action alleging that the defendants were liable for breach of contract and for breach of the covenant of good faith and fair dealing. The action was tried before a jury in Gallatin County. The jury returned a verdict in favor of the defendant and awarded no damages. The District Court denied MTC’s motion for a new trial. MTC appeals from the judgment entered by the court and from the order of the court denying plaintiffs’ motion for a new trial.

MTC maintains that the District Court should have permitted Lloyd and Lucille Moats to present their claim for damages for pain, suffering, mental anguish and anxiety to the jury. MTC further contends the District Court compounded this error by refusing to grant a new trial on this issue. We find the contrary to be true.

In Malcolm v. Stondall Land Co. (1955), 129 Mont. 142, 145, 284 P.2d 258, 260, this Court stated the general rule regarding a stockholder’s personal right to sue in the corporation’s cause of action:

“. . . As a general rule stockholders may not sue upon a cause of action belonging to their corporation whether in their own names or in the name of the corporation itself.”

In Malcofm, this Court addressed for the first time the issue of whether individual shareholders who control all of the stock of the corporation may disregard the corporate entity and sue as individuals on the corporation’s cause of action. We held that such individual shareholders do not have the right to pursue an action on their own behalf when the cause of action accrues to the corporation. Malcolm, 129 Mont. at 146, 284 P.2d at 260.

MTC suggests that a “reverse piercing of the corporate veil” should be allowed and that Lloyd and Lucille Moats should be allowed to bring an action for emotional distress on their own behalves. Reverse piercing of the corporate veil for the benefit of the shareholders would allow persons who have incorporated to invoke the corporate entity only when it would be to their advantage.

Under Montana law, it is well settled that a corporation has a separate and distinct identity from its stockholders. Wortman v. Griff (1982), 200 Mont. 528, 534, 651 P.2d 998, 1001; Monarch Fire Insurance Co. v. Holmes (1942), 113 Mont. 303, 124 P.2d 994. In the present case, the oral agreement which is the center of the controversy was between MTC and Gallatin Dairies. It is MTC, not Lloyd and Lucille Moats, who is the real party in interest in the case at bar.

Rule 17(a), M.R.Civ.P. provides in pertinent part: “Real Party In Interest. Every action shall be prosecuted in the name of the real party in interest.”

The argument of Lloyd and Lucille Moats that as sole shareholders of the corporation, their claims for mental and emotional distress should have been submitted is moot. The jury found in favor of the defendant on liability.

We hold that the District Court acted appropriately in refusing to allow Lloyd and Lucille Moats to present evidence relating to mental and emotional distress.

MTC next contends that the District Court erred in ruling that Keith Nye’s testimony pertaining to Gallatin’s rationale for giving MTC less than two months notice of termination was not hearsay. We affirm the ruling of the District Court.

MTC alleged that Gallatin’s conduct in terminating the oral agreement with MTC upon only 48 days notice was unreasonable and constituted a breach of the implied covenant of good faith and fair dealing. In order to rebut MTC’s contention, Gallatin’s general manager Keith Nye testified as to their reasons for giving only 48 days notice of termination to MTC. In the course of Nye’s testimony, he was asked why Gallatin did not immediately inform MTC of Gallatin’s decision to terminate the hauling agreement. In response to the question, Nye alluded to a conversation that had taken place between himself and Dan Smith, one of Gallatin’s employees. MTC objected to such testimony as hearsay. The District Court discussed the matter in chambers, wherein it was informed as to the content of Nye’s testimony. Nye proposed to testify that Smith had informed him of a conversation between Smith and Moats which occurred during a prior dispute between Gallatin and MTC. In that conversation Moats told Smith that he was through hauling for Gallatin and that MTC would cease hauling immediately.

After listening to the arguments of both counsel, the District Court ruled that such testimony was not hearsay. As it was offered not to prove the truth of the matter asserted (that MTC would immediately refuse to haul any milk upon being given notice of termination) but for the purpose of showing that the statement was made and the resulting effect on Nye’s state of mind. Before allowing the disputed testimony to be introduced, the District Court admonished the jury that Nye’s testimony relating to his conversation with Smith was admitted only for the purpose of showing that the statements were made, not for the truth of the statements.

Rule 801(c), M.R.Evid. provides the definition of hearsay.

“(c) Hearsay. Hearsay is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted (Emphasis added.)”

The District Court correctly determined Nye’s testimony did not fit within the parameters of the Rule 801(c) definition of hearsay. Nye’s testimony regarding the statements made to him by Smith to the effect that MTC would immediately stop hauling if Gallatin terminated the agreement, were not offered to prove the truth of the matter asserted. Rather, the statement was made to show the resulting effect on Nye’s state of mind, to show why Gallatin reacted as it did and why it waited until it had the leased trucks on hand before informing MTC that the agreement was being terminated.

This Court addressed a situation similar to the one at hand in Brown v. Homestake Exploration Corp. (1934), 98 Mont. 305, 39 P.2d 168, which involved an action for breach of contract. In Brown, a witness (A) was permitted over a hearsay objection to testify about a conversation that he had with another party (B). The substance of the conversation concerned another conversation that (B) had with yet another party (C). The testimony was permitted not for the purpose of proving the truth of the matter asserted in the various statements but to show that those statements were made and relied on by the testifying witness. Brown, 98 Mont. at 339-340, 39 P.2d at 179.

“Wherever an utterance is offered to evidence the state of mind which ensued in another person in consequence of the utterance, it is obvious that no assertive or testimonial use is sought to be made of it, and the utterance is therefore admissible, so far as the hearsay rule is concerned.”

Brown, 98 Mont. at 340, 39 P.2d at 179-180, quoting Wigmore on Evidence (2d ed.) Section 1789. See also Wallace v. Wallace (1929), 85 Mont. 492, 279 P. 374. Nye’s testimony was properly admitted by the District Court.

Lastly, MTC contends that the District Court erred in denying a new trial because the verdict reached by the jury was contrary to law. We think otherwise.

MTC’s contention is predicated upon two of the District Court’s jury instructions. The court’s instruction No. 13 provided: “You are instructed that a contract may be oral and not in writing.”

The court’s instruction No. 15 was given as follows:

“You are instructed that where an agreement contains no provision for its termination and one party to said agreement furnishes a consideration in addition to just providing the service, the agreement may be terminated only after a reasonable time has lapsed and reasonable notice of termination is given.

MTC maintains that the jury’s verdict evidences a disregard of the jury instructions and further is contrary to Montana lawi MTC submits that in view of the relationship between MTC and Gallatin and in light of the fact that MTC had made substantial investments of time and money in its trucking business in order to provide for Gallatin’s needs, the jury abused its discretion in finding 48 days notice of termination was reasonable.

In Bronken’s Good Time Co. v. J. W. Brown (1983), 203 Mont. 427, 661 P.2d 861, this Court specifically addressed the issue of who determines what constitutes a reasonable period of time under the circumstances of the case. We held:

“As to what is a reasonable period of time in a given situation, we will defer to the judgment of the trier of fact. Absent an abuse of discretion, this Court will not interfere.”

Bronken, 203 Mont. at 432, 661 P.2d at 864.

There was sufficient evidence in the record to support the jury’s findings and determinations. There is nothing in the record to suggest that an abuse of discretion occurred on the part of the jury. As such, we defer to the judgment of the trier of fact and will not interfere. We affirm.

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


author: MR. JUSTICE SHEEHY MR. JUSTICE WEBER,

text:
    E.W. and D.W., Plaintiffs and Appellants, v. D.C.H., Defendant and Respondent.
    No. 87-470.
    Submitted on Briefs March 11, 1988.
    Decided May 3, 1988.
    754 P.2d 816.

      William Boggs and Jeanne Kemmis, Missoula, for plaintiffs and appellants.
    Randy J. Cox, Boone, Karlberg and Haddon, Missoula, Patrick F. Hooks, Hooks and Budewitz, Townsend, for defendant and respondent.
    Peter Michael Meloy, Helena, Sally F. Goldfarb, Lynn, Hecht and Schafran, New York City, for amicus curiae.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

Plaintiffs appeal the memorandum and order of the District Court of the Fourth Judicial District, Missoula County, which found that plaintiffs’ claims were barred by the statute of limitations governing torts, Section 27-2-204, MCA. We affirm.

Plaintiffs present the following issues for review:

1. Was the statute of limitations tolled in this case of incest by the delayed-discovery rule?

2. Did the District Court correctly refuse to apply the fraudulent concealment doctrine?

3. Did the District Court correctly determine that there were no genuine issues of material fact?

The controversy at hand arose as a result of the alleged sexual molestation of plaintiff (EW) by her step-uncle (DCH) from 1957 until 1964. Throughout the course of the proceedings, DCH has vigorously denied that he sexually molested EW. However, for purposes of our review, the factual allegations presented by EW will be regarded as true.

EW was born in 1952, the oldest of three girls. Following her father’s death in a boating accident, EW’s mother remarried in 1956. The new family subsequently settled on a ranch operated by her stepfather’s extended family.

EW first met her step-uncle when she was four years old. As members of the same family, DCH and EW were in frequent contact. DCH’s kindness, tenderness, and affection in an otherwise harsh family environment soon caused EW to feel very close to her step-uncle.

The first instance of sexual fondling is alleged to have occurred in 1957, when EW was five years old. Immediately following the attack, EW was informed that the fondling would be “our special secret . . .” Incidents of manual manipulation allegedly continued on a regular basis for a period of four years.

DCH is alleged to have first engaged in an episode of forced sexual intercourse with EW during the summer of her ninth year. Following the attack, EW was instructed not to reveal what had occurred or her step-father would be harmed. She was also reminded that her mother would be very angry if she found out what had happened.

The sexiial attacks continued over 3!4 years until the summer of 1964. At that time, EW revealed the incidents of sexual abuse to a slightly younger friend who had also been molested. Although EW attempted to swear the friend to secrecy, she was soon confronted with the allegations by her mother and step-father. Upon confirming the attacks, EW was not allowed to have further contact with DCH.

In an attempt to verify EW’s allegations, the family sought medical confirmation of sexual activity. Dr. William Antonioli examined EW in August, 1964. At that time, Dr. Antonioli determined that EW had a pronounced disruption of the hymen. He was not consulted about possible psychological effects nor was the matter ever raised with him again.

EW suffered emotional and physical disorders as a young adult. Although she always knew she had been molested, she did not associate her psychological problems with the molestation. In 1976, while undergoing a divorce, EW was referred to Dr. Stanley Moisey for psychiatric counseling. During the initial interview, EW informed Dr. Moisey that she had been molested as a child. Dr. Moisey noted it in his records, but never discussed the matter further.

In 1983, EW again sought psychiatric counseling in connection with another potential divorce. Following the initial interview, Dr. June Allison indicated that she suspected a causal relationship between EW’s continuing emotional problems and DCH’s childhood attacks. After additional therapy, EW and her husband filed suit in 1986 alleging assault and battery, intentional infliction of emotional distress, negligence, and loss of consortium. Shortly thereafter, the District Court granted summary judgment on the basis of the running of the statute of limitations.

DISCOVERY DOCTRINE

On the face of the complaint, it is apparent that the statutory period for bringing an action sounding in tort has expired. EW contends, however, that the running of the statute of limitations was tolled pursuant to the “discovery rule” because her injuries had not fully manifested, she was not aware of her legal rights, and she was not aware of the causal relationship between her injuries and the molestation, until she received therapy in 1983. We disagree.

The primary purpose of statutes of limitations is the suppression of stale claims which, with the attendant passage of time, inhibits a party’s ability to mount an effective defense. Thus, “statutes of limitations are regarded as statutes of repose governing the period within which actions must be brought and are designed to compel the exercise of a right of action within a reasonable time, while the evidence remains fresh in the memory of the witnesses.” Monroe v. Harper (1974), 164 Mont. 23, 26, 518 P.2d 788, 790. Statutes of limitations also serve to suppress the bringing of fraudulent claims.

The policy underlying the bar imposed by statutes of limitations is, at its roots, one of basic fairness. Our system of jurisprudence is designed to achieve substantial justice through application of the law after the parties have had an opportunity to fully present both sides of a controversy. The failure to bring an action within a reasonable time is clearly not conducive to a full presentation of the evidence nor a search for the truth. Consequently, the law will not reward the plaintiff who sleeps on his or her rights to the detriment of a defendant. Rather, failure to bring an action within the statute of limitations constitutes a bar to the claim.

The legislature has determined that the statutory period to bring an action sounding in tort shall be three years. Section 27-2-204, MCA. Generally, the statute of limitations begins to run upon the occurrence of the last fact essential to the cause of action. See Heckaman v. Northern Pacific Railway Company (1933), 93 Mont. 363, 20 P.2d 258. “The fact that a person entitled to an action has no knowledge of his right to sue, or of the facts out of which his right arises, does not, as a general rule, prevent the running of the statute, or postpone the commencement of the period of limitation, until he discovers the facts or learns of his right thereunder.” Kerrigan v. O’Meara (1924), 71 Mont. 1, 8, 227 P. 819, 822; Carlson v. Ray Geophysical Division (1971), 156 Mont. 450, 481 P.2d 427; and Bennett v. Dow Chemical Co. (Mont. 1986), [220 Mont. 117,] 713 P.2d 992, 43 St.Rep. 221. Only the vigilant are viewed favorably under the law.

In the majority of cases, however, the wrongful act is easily identifiable and the injury simultaneous and obvious. Consistent with the underlying societal policy of fairness, this Court has recognized that the inherent nature of certain species of injury preclude a strict application of the statutory bar. See Grey v. Silver Bow County (1967), 149 Mont. 213, 425 P.2d 819. In Johnson v. St. Patricks Hospital (1966), 148 Mont. 125, 417 P.2d 469, we concluded that a plaintiff should not be prevented from bringing an action when the injury is self-concealing. We therefore held that “where a foreign object is negligently left in a patient’s body by a surgeon and the patient is in ignorance of the fact, and consequently of his right of action for malpractice, the cause of action does not accrue until the patient learns of, or in the exercise of reasonable care and diligence should have learned of the presence of such foreign object in his body.” 148 Mont. at 132, 417 P.2d at 473.

Subsequent examination of the Johnson rationale has demonstrated that the logic underlying the discovery rule should not be limited to the narrow circumstance presented therein. We have consequently found the discovery rule to be applicable to other situations in which the injury is not readily apparent. See, Grey, supra (discovery rule applicable to any medical negligence in which the injury is self-concealing); Thompson v. Nebraska Mobile Homes Corp. (1982), 198 Mont. 461, 647 P.2d 334, (discovery rule applicable to strict liability claim); Iowa Mfg. Co. v. Joy Mfg. Co. (1983), 206 Mont. 26, 669 P.2d 1057 (discovery rule applicable to breach of warranty claim). When presented with the issue, the courts of other jurisdictions have also applied the so-called discovery rule to non-malpractice situations in which the injury is not readily apparent. See generally, Urie v. Thompson (1949), 337 U.S. 163, 69 S.Ct. 1018, 93 L.Ed. 1282 (silicosis); Brush Beryllium Company v. Meckley (6th Cir. 1960), 284 F.2d 797 (berylliosis); Thrift v. Tenneco Chemicals, Inc. (N.D. Tex. 1974), 381 F.Supp. 543 (thorium exposure); Wilson v. Johns-Mansville Sales Corp. (D.C. Cir. 1982), 684 F.2d 111 (asbestos exposure). The few courts who have been asked to apply the discovery rule to sexual molestation cases have refused to do so, however. See DeRose v. Carswell (Cal.App. 1987), 196 Cal.App.3d 1011, 242 Cal.Rptr. 368; Raymond v. Ingram (App. 1987), 47 Wash.App.781, 737 P.2d 314; Tyson v. Tyson (1986), 107 Wash.2d 72, 727 P.2d 226.

EW now urges this Court to extend the discovery doctrine to instances of sexual molestation. We find such an extension inappropriate under the facts of this case.

The central precept of Montana’s discovery rule is that the plaintiff was unaware, and could not reasonably have been aware, of the wrongful act which later resulted in his or her injury until after the statute of limitations had run. This is not a case in which the plaintiff was unaware of the tortious conduct or the injury has failed to manifest itself, however. Rather, EW has consistently acknowledged that she “always knew” she had been molested as a child and that she has suffered from psychological problems since late adolescence. For this reason alone, her claim must fail.

EW’s alleged failure to understand her legal rights does not save her claim. In Bennett v. Dow Chemical Company (Mont. 1986), [220 Mont. 117,] 713 P.2d 992, 43 St.Rep. 221, we were confronted with an identical issue. The appellant therein had been sprayed with toxic chemicals in 1979. Following a medical examination shortly thereafter, appellant was informed that he was suffering peripheral neuropathy as a result of the exposure to the chemicals. He was not advised of his right to a lawsuit until after the statute of limitations had run, however.

In response to the theory now advanced, we concluded:

“. . . there is no Montana precedent for utilizing the discovery doctrine to toll the statute of limitations beyond discovery of the cause of an injury. However, appellant here would have us extend the doctrine for five years beyond the discovery of the cause of his injury up until the day he discovered his legal rights. Taken to its logical extreme, and in consideration with the continuing development of new torts and property rights, appellant’s position could have the effect of forever denying potential defendants the benefits of a statute of limitations.”

713 P.2d at 995, 43 St.Rep. at 224.

The concerns expressed in Bennett are equally applicable here. Statutes of limitation serve an important purpose. It is not the function of this Court to render the statutory period provided by law meaningless. “Were this Court to adopt the rule urged by plaintiffs, the issue of when a cause of action accrued would not be resolved until the jury returned with a verdict...” Buhl v. Biosearch Medical Products, Inc. (D. Mont. 1985), 635 F.Supp. 956, 961.

EW was clearly aware of the wrongful conduct. Her failure fully to understand her legal rights is not sufficient to toll the running of the statute of limitations.

Nor does the failure to understand the causal relationship between the wrongful act and her injuries resuscitate the claim. The law does not contemplate such discovery as would give complete knowledge before the cause of action accrues. See Mobley v. Hall (1983), 202 Mont. 227, 657 P.2d 604. Rather, the discovery doctrine only tolls the running of the statutory clock until such time as the plaintiff, in the exercise of reasonable care and diligence, should have been aware of the wrongful act and injury.

We again note that, EW “always knew” she had been molested and had sought help for her psychological problems since late adolescence. Such knowledge is sufficient to require inquiry. “To allow a plaintiff, who fails to inquire into the cause of an injury, to avoid the time bar under the guise of ‘discovery’ would hopelessly demolish the protection afforded defendants by the statute.” Much v. Sturm, Ruger & Co., Inc. (D. Mont. 1980), 502 F.Supp. 743, 745-746. We decline to so hold.

Finally, it is argued that the running of the statutory period should be tolled because EW’s injuries were not complete until after the statute of limitations had run. However, “it is not necessary to know the total extent of damages that an act causes to begin the running of the statute of limitations.” Raymond, 737 P.2d at 317. See also Blasdel v. Montana Power Co. (1982), 196 Mont. 417, 640 P.2d 889 (cause of action accrues when damages stabilize); Heckaman, supra (cause of action accrues upon injury). New are the injuries that could not someday develop additional consequences. To adopt the theory advocated by EW would again postpone the statutory period indefinitely.

Section 27-1-203, MCA, provides that “damages may be awarded ... for detriment. . . certain to result in the future.” In Frisnegger v. Gibson (1979), 183 Mont. 57, 598 P.2d 574, we construed Section 27-1-203 consistent with the Montana practice of instructing juries that damages need only be reasonably certain. 183 Mont. at 71, 598 P.2d at 582. Under the Frisnegger rationale, EW could have presented evidence of, and received damages for, future harm, if any. She chose not to do so, however.

Upon reaching majority in 1973, EW had suffered more than sufficient damage to commence a cause of action. We will not toll the statute of limitations indefinitely on the basis of the supposition that additional damage might occur.

FRAUDULENT CONCEALMENT

In a related argument, EW contends that the discovery rule is applicable because DCH fraudulently concealed the wrongful nature of his relationship with EW. We find EW’s argument strained at best.

“Fraudulent concealment has been described as the employment of artifice, planned to prevent inquiry or escape investigation, and mislead or hinder acquisition of information disclosing a right of action.” Monroe, 164 Mont. at 28, 518 P.2d at 790. While DCH’s representations may have initially constituted a species of fraudulent concealment, such representations are not sufficient to cure EW’s subsequent knowledge.

There is no indication that EW is incompetent or that she psychologically repressed the attacks. It is therefore not unreasonable to assume that EW, upon reaching majority, was aware that child molestation was a wrongful act; nor does she deny her awareness. The furor caused by the disclosure of the molestation and EW’s subsequent references to molestation as a child when she visited psychologists further support this conclusion.

Reliance upon a fraudulent representation must be reasonable. EW’s continued reliance on statements made during the late 1950’s and early 1960’s is not. At the very least, the state of facts was sufficient to cause a reasonable person to inquire.

SUMMARY JUDGMENT

EW’s final specification of error concerns the District Court’s alleged determination of the validity of psychological evidence, namely, whether EW knew she had been wronged and whether her delay in discovering she had been wronged was reasonable.

Rule 56(c), M.R.Civ.P., provides that a motion for summary judgment is proper if “there is no genuine issue of material fact and . . . the moving party is entitled to judgment as a matter of law.” From the evidence presented, it is clear that EW “always knew” that she had been sexually abused and that she was aware she suffered from psychological problems. Conclusory or speculative statements concerning the psychological intricacies of the mind in general are not sufficient to raise a genuine issue of material fact. We therefore conclude summary judgment was proper.

Upon reaching majority in 1973, EW had three years in which to bring an action. While this Court is aware of the horrifying damage inflicted by child molesters, it is not for us to rewrite the statute of limitations to accommodate such claims through judicial fiat. Such a task is properly vested in the legislature.

The judgment of the District Court is affirmed.

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

MR. JUSTICE WEBER,

dissenting:

I would reverse the judgment dismissing the complaint. In my view, the plaintiffs have raised a valid argument for tolling the statute of, limitations under the discovery rule.

In Bennett v. Dow Chemical Co. (Mont. 1986), [220 Mont. 117,] 713 P.2d 992, 43 St.Rep. 221, this Court acknowledged that “a statute of limitations can be tolled until the plaintiff discovers the legal cause of his injury if equity so dictates.” Bennett, 713 P.2d at 995. The Court cited Hornung v. Richardson-Merrill, Inc. (Mont. 1970), 317 F.Supp. 183. In that case, the plaintiff had filed a tort claim in 1968 as a result of cataracts. Plaintiff’s damages were suffered prior to September 1963, but he argued that he did not know defendant’s product was the cause of his cataracts until within two years of the filing of the action in 1968. The court denied defendant’s motion for summary judgment, holding that plaintiff’s claim of lack of knowledge of the cause of his injury was a factual question which should go to trial. Hornung, 317 F.Supp. at 185.

In her affidavit, EW states that her adult psychological problems have included nightmares, sexual dysfunction, difficulty in relationships with men, depression, suicide attempts, and drug and alcohol abuse. The essence of plaintiffs’ argument for applying the discovery rule is that, although EW was always aware that she had been molested as a child, and had suffered from psychological problems since late adolescence, she was not aware until 1983 that her adult psychological problems were likely a result of the sexual molestation she suffered as a child. Plaintiffs offered to prove that while EW had received psychological counseling for a number of years prior to 1983, it was not until 1983 that a counseling professional alerted her to the connection between her current problems and the childhood molestation. It appears that the court properly could have applied the Bennett theory that the statute of limitations could be tolled prior to 1983, when plaintiffs discovered the legal cause of EW’s injury. I conclude that it would be appropriate to allow the plaintiff to present her facts to a trier of fact in order to determine whether or not the circumstances justify the tolling of the statute of limitations.

Since my view has not gained the support of the majority, I do agree with the majority’s suggestion that the legislature give its attention to special discovery rules for cases involving sexual abuse of children.


author: MR. JUSTICE WEBER

text:
    TRUSTEES OF LINCOLN COUNTY SCHOOL DISTRICT NO. 13, EUREKA, Montana, Respondent and Appellant. v. CARL R. HOLDEN, JR., Appellant and Respondent.
    No. 87-510.
    Submitted on Briefs March 18, 1988.
    Decided May 3, 1988,
    754 P.2d 506.

      Susan Loehn, Co. Atty., Libby, Richard P. Bartos, Office of Public Instruction, Helena, for respondent and appellant.
    Robert S. Keller, Keller and German, Kalispell, for appellant and respondent.
   MR. JUSTICE WEBER

delivered the Opinion of the Court.

Mr. Holden’s teaching contract with the Appellant (School District) was terminated. He appealed administratively. Following administrative review, the District Court for the Fourth Judicial District, Missoula County, ordered the School District to pay Mr. Holden the salary due under his contract of employment. The School District appeals. We affirm.

The issues are:

1. Did the District Court err in finding that the County Superintendent’s findings of fact and conclusions of law were not clearly erroneous?

2. Was there sufficient evidence to support the determination of the County Superintendent that the Board of Trustees did not have good cause to dismiss Mr. Holden?

Mr. Holden was employed by the School District, in Eureka, Montana, beginning in October 1983. In his first year, he taught music, chorus, and band for grades 3 through 12. Mr. Holden’s formal evaluation, completed in April 1984, was marked satisfactory in all areas except rapport with students.

In the 1984-85 school year, Mr. Holden’s contract was renewed and grades 1 and 2 were added to his teaching load. On October 2, 1984, Mr. Holden called a girl a “slob” in class because she was not paying attention and was slumped down in her chair. The elementary school principal and the superintendent met with Mr. Holden regarding this incident. In a letter of reprimand dated October 3, 1984, the superintendent informed Mr. Holden that another such incident of abuse would be grounds for dismissal.

Five days later, Mr. Holden made the comment, “move over, Goodyear,” to a child or group standing in front of a tape machine. The children reported the incident to the school administrators, as a comment directed to one child who was “heavy built.” The superintendent and the elementary principal met again with Mr. Holden and gave him the option of resigning or being suspended until a hearing could be held on the charges against him. He also was informed that he had the right to be present at the hearing and to have counsel present. He did not attend the hearing, but submitted a letter to be read into the record. After hearing the evidence, the Board of Trustees voted to dismiss Mr. Holden.

Mr. Holden appealed to the Lincoln County Superintendent of Schools (County Superintendent), before whom a second hearing was held, pursuant to Section 20-4-207(2), MCA (1983):

“Any teacher who has been dismissed may in writing within 10 days appeal such dismissal to the county superintendent. Following such appeal a hearing shall be held within 10 days. If the county superintendent, after a hearing, determines that the dismissal by the trustees was made without good cause, he shall order the trustees to reinstate such teacher and to compensate such teacher at his contract amount for the time lost during the pending of the appeal.” The County Superintendent concluded that the School District had failed to substantiate good cause for termination and to ensure Mr. Holden’s due process rights. She ordered the School District to pay Mr. Holden the money to which he was entitled under his 1984-85 contract. The School District appealed to the State Superintendent of Public Instruction, who reversed the County Superintendent and affirmed the Board of Trustees’ original decision. Then Mr. Holden appealed to District Court, which reversed the decision of the State Superintendent and ordered the School District to pay Mr. Holden his salary due under the 1984-85 contract. The School District appealed that decision to this Court.

I

Did the District Court err in finding that the County Superintendent’s findings of fact and conclusions of law were not clearly erroneous?

The School District raises three separate arguments under this issue. It first argues that the County Superintendent was clearly in error when she ordered the School District to pay Mr. Holden the sums due to him under his 1984-85 contract. The County Superintendent made her decision in January 1985, and the School District asserts that she had no jurisdiction to award any judgment for contract amounts due beyond that date.

Mr. Holden does not dispute that the County Superintendent erred in awarding him his wages for the entire year. The District Court, too, concluded that the County Superintendent exceeded her authority. We order this award stricken from the County Superintendent’s decision. However, the District Court pointed out that by the time it considered this matter, the school year had expired, so that the award of the full contract amount was appropriate. The District Court properly ordered that these monies be paid to Mr. Holden as damages.

The School District next argues that the County Superintendent improperly declined to make fact findings on an alleged incident in October 1983, despite the existence of evidence as to that event. In that incident, Mr. Holden apparently had said something to the third grade class which distressed them. Mr. Holden’s personnel file contains no written evidence of this incident. The County Superintendent stated:

“Exactly what was said, to whom it was said, and the follow up discussion with the principal are vaguely and inconsistently presented in the testimony.”

The School Board correctly points out that Mr. Holden was not given notice of the above incident as a reason for his termination. As a result, the incident could not properly be used as a reason for his dismissal. See Bd. of Trustees, Etc. v. Super. of Pub. Inst. (1977), 171 Mont. 323, 327, 557 P.2d 1048, 1050-51. The County Superintendent properly noted in her conclusions that she was limited to consideration of the evidence supporting the specific charges given as a reason for Mr. Holden’s dismissal. We hold that it was not error to omit additional findings on the incident.

Third, the School District argues that the County Superintendent improperly discussed the issue of progressive discipline. This discussion appears under the heading “other due process considerations” in the County Superintendent’s order and was not necessary to the determination of whether the School District had good cause for terminating Mr. Holden’s contract. We hold that the discussion is not essential to the good cause determination by the County Superintendent and does not constitute clear error.

II

Was there sufficient evidence to support the determination of the County Superintendent that the Board of Trustees did not have good cause to dismiss Mr. Holden?

Under Section 20-4-207, MCA, a school district may dismiss a teacher before his contract has expired “for immorality, unfitness, incompetence, or violation of the adopted policies of such trustees.” The County Superintendent concluded that:

“Only 2 incidents of inappropriate language were deemed worthy of written documentation and clear directives for Mr. Holden. This does not seem to be a preponderance of evidence, nor sufficient cause for dismissal.

“The ability to maintain control and/or motivate students seems clearly to me to be a matter of competence . . . Although sarcastic and cutting language is totally inappropriate in the classroom, it was not proven that Mr. Holden’s language impaired his ability to ‘discharge the duties of his position.’ ”

Under- Section 20-4-207, MCA, neither the State Superintendent of Public Instruction nor the District Court may substitute its judgment for that of the County Superintendent on issues of fact. Frazer School Dist. No. 2 v. Flynn (Mont. 1987), [225 Mont. 299,] 732 P.2d 409, 410, 44 St.Rep. 248, 250. The transcript used on appeal is from the hearing before the County Superintendent. Sections 20-3-107(2), MCA, and 20-3-210(3), MCA. Further, findings of the reviewing agency cannot be included as facts when they are not part of the County Superintendent’s findings. Frazer, 732 P.2d at 411. The decision of the State Superintendent of Public Instruction includes a number of findings which were not part of the County Superintendent’s findings. After reviewing the findings of the County Superintendent, we conclude that they are supported by substantial evidence in the record.

The District Court stated that the County Superintendent had the discretion to decide that the two incidents were not so serious as to merit dismissal of Mr. Holden. We agree. Without condoning the remarks Mr. Holden made to his students, we hold that it was not error for the County Superintendent to conclude that the two incidents were not good cause for Mr. Holden’s dismissal.

Affirmed.

MR. JUSTICES McDONOUGH, GULBRANDSON, HUNT and SHEEHY concur.