text:
    SOMONT OIL COMPANY, INC., a Montana corporation, Plaintiff and Respondent, v. JOHN KIEHL NUTTER and Peggy Faye Nutter, Defendants and Appellants.
    No. 87-66.
    Submitted on Briefs Aug. 13, 1987.
    Decided Oct. 6, 1987.
    743 P.2d 1016.

      Ralph T. Randono and Daniel Donovan, Great Falls, for defendants and appellants.
    Marc G. Buyske, Anderson, Beatty & Lee, Shelby, for plaintiff and respondent.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

This appeal arises from a bench trial which occurred in the Ninth Judicial District on June 17 and 18, 1986, and thereafter by deposition, before the Honorable Robert M. Holter. The District Court issued a judgment supported by findings of fact and conclusions of law on December 18,1986. Judgment was rendered in favor of plaintiff-respondent Somont Oil Company, Inc.(“Somont”). Defendants John and Peggy Nutter appeal. We affirm.

This appeal involves the parties’ rights and obligations under an agreement to develop and operate a mineral interest on a parcel of land in Toole County, Montana. The Nutters own 80% of the mineral rights to . the tract of land in issue. Respondent Somont claims the remaining 20% of the mineral rights. Additionally, Somont claims it is the proper lessee of one-half of the Nutters’ mineral interests as assignees of a mineral lease executed by the Nutters to a third party. The sequence of events and pertinent facts in this case are fairly complex.

The original owner of the land involved was Anna Kenny who received ownership through a patent from the United States Government. Anna Kenny is now deceased. In 1920, Anna Kenny leased the mineral interests underlying the land to Gordon Campbell. Anna Kenny reserved a landowner’s royalty interest and the lease was structured to remain in force for twenty years or for so long after that period that oil was produced from the land in commercial quantities. In 1922, Anna Kenny conveyed an interest to Stevenson Associated Royalties Company (“Stevenson”). In that conveyance, Kenny granted Stevenson 20% of her royalty payments under the lease to Campbell. Additionally, Stevenson received a reversionary interest in 20% of the minerals in the event the Campbell lease was ever forfeited or canceled.

Campbell eventually assigned his lease interest to Texaco, Inc. Texaco developed and maintained oil wells on the property but eventually ceased production. Texaco later abandoned the lease and filed a release on March 13, 1981. According to the terms of the lease with Campbell and the grant to Stevenson, 80% of the interest in the minerals underlying the land have reverted to the successors of Anna Kenny, while the remaining 20% reverted to the successors of Stevenson.

Upon Anna Kenny’s demise, Marie Kenny succeeded to her interest in the land. In 1974, Marie Kenny conveyed the property to defendants John and Peggy Nutter. The contract for deed was recorded on January 2, 1976. A warranty deed executed by Marie Kenny was filed on February 20, 1981. By virtue of the conveyance and Texaco’s abandonment of their mineral lease, the Nutters claim 80% of the mineral rights to the land.

Despite the conveyance to the Nutters, Marie Kenny conveyed an oil and gas lease on the same land to Somont in September of 1979. Because of the conveyance to the Nutters, both parties agree the lease from Marie Kenny to Somont is void. Somont filed a release of the void lease in August of 1984.

The remaining 20% mineral interest originally granted to Stevenson by Anna Kenny in the form of a reversionary interest follows a lengthy chain of title. We will discuss this chain of title more fully under the third issue raised by appellants. Suffice it to say that in 1980 Somont claimed title to this 20% mineral interest by instruments with the personal representatives of one L.R. Baily, holder of one-half of the 20% interest, and the personal representative of one A.H. Raymond, holder of the other one-half. Subsequently, Somont began oil exploration and development on the property.

On March 6, 1981, the Nutters and Buffalo Jump Oil and Gas, Inc. (“Buffalo Jump”), a Montana corporation, entered into an oil and gas lease and a supplemental agreement to operate the mineral interests belonging to the Nutters. Appellant John Nutter and the president of Buffalo Jump, Chris Owen, negotiated the agreement. On May 1, 1981, Buffalo Jump assigned its interest in the Nutter lease and agreement to Rimrock Drilling Company (“Rimrock”). Rimrock is a partnership consisting of Chris Owen and Norman Eberhardt as partners. Rimrock subsequently developed oil wells which produced oil in commercial quantities. John Nutter assisted in the oil operation and the District Court found that he acted in the capacity of an employee rather than a joint operator. The result was that both Somont and Rimrock were simultaneously developing oil well operations on the land. Each operation maintained separate storage tanks and pipelines.

On February 1, 1984, Rimrock assigned its interest in the Nutter lease to Somont. The Nutters and Somont subsequently engaged in a dispute regarding their rights and obligations in developing and operating the oil pumping operation. Somont alleged John Nutter padlocked oil production equipment located on the property and sold approximately $5,000 of crude oil produced by Somont. Somont sought a declaratory judgment to clarify and determine the rights and obligations of Somont and the Nutters pursuant to the lease agreement between Buffalo Jump and the Nutters. A complaint was filed with the District Court on March 22, 1984.

A preliminary hearing was held on March 30, 1984 and a stipulation was created dictating the oil operations until the time of trial. The stipulation directed a joint operation in which Somont would conduct the actual day-to-day operations subject to a right of inspection by the Nutters. Somont was to pay a portion of the gross proceeds of the operation into a special account established by the court pending the outcome of the litigation. An order directing the scope and contents of the stipulation was apparently signed on March 30, 1984, but was not filed until November 7, 1985 after a dispute arose between the parties while acting under the stipulation. Somont alleged that as a result of omissions and contradictory actions by the Nutters, it refused to make the scheduled payments. Following a hearing on November 7, 1985, the District Court issued findings of fact and an order stating that the order directing the stipulation was still in effect and Somont was ordered to make the payments.

The case was tried on June 17 and 18, 1986, and additional evidence was taken in July by deposition. On December 18, 1986, the District Court issued findings of fact, conclusions of law, and an order. The contested issues were resolved in favor of Somont.

The District Court concluded that as a result of the assignment from Rimrock to Somont, Somont held all of the rights and obligations of Buffalo Jump and Rimrock under the agreement entered March 6, 1981.

The District Court directed that Somont would continue to conduct the day-to-day operations in developing the mineral estate. It required Somont to operate “in a manner consistent with good practices in the oil and gas industry and in conformance with the rules and regulations of the Board of Oil and Gas Conservation for the State of Montana.” The Nutters were given the right to inspect the operations at any time, but were prohibited from interfering with the operations without the consent of Somont or a court order. Somont was required to provide the Nutters with monthly statements indicating gross production from the property, royalties paid, taxes paid, and operational and development costs.

Appellants have raised three issues for our consideration on appeal:

(1) Did respondent Somont acquire contract rights to develop and manage the mineral operations pursuant to the “Nutter-Buffalo Jump” contract?

(2) If Somont did acquire contract rights, did the District Court properly interpret the rights and obligations of the parties under the contract?

(3) Does Somont properly hold a 20% mineral interest in the property on a leasehold basis?

We will consider each issue separately. First, however, we must note that the standard of review on appeal is that the District Court’s findings of fact will not be disturbed unless they are clearly erroneous. Rule 52(a), M.R.Civ.P. Further, respondent cites a statement made by this Court which is applicable under these circumstances:

“In a nonjury trial, the credibility of witnesses and the weight of their testimony are matters for the District Court to determine. The sufficiency of the evidence must be reviewed from the perspective most favorable to the prevailing party. The District Court’s findings and judgment are presumed correct and will not be overturned unless the appellant meets the burden of proving with a preponderance of evidence that they are wrong. Merely showing the evidence establishes reasonable grounds for reaching a different conclusion is insufficient to reverse the District Court findings. Lumby v. Doetch (1979), 183 Mont. 427, 431, 600 P.2d 200, 202.”

Frank L. Pirtz Const. v. Hardin Town Pump (Mont. 1984), [214 Mont. 131,] 692 P.2d 460, 462, 41 St.Rep. 2366, 2368.

I. SOMONT’S CONTRACT RIGHTS

In March, 1981, the Nutters and Buffalo Jump entered an oil and gas lease along with a supplemental agreement to operate the mineral interests belonging to the Nutters. Buffalo Jump assigned the lease to Rimrock on May 1, 1981, and Rimrock then assigned the lease to Somont on February 1, 1984. The Nutters allege that the original contract with Buffalo Jump was too vague to constitute a contract. The Nutters contend the Buffalo Jump agreement was merely “an agreement to agree” and not a binding contract. Therefore, they argue, the later assignment to Somont is invalid.

The agreement entered between Buffalo Jump and the Nutters on March 6, 1981, consisted of two documents: (1) a standard form oil and gas lease with certain portions deleted and other portions added; and (2) a supplemental agreement consisting of six pages. The oil and gas lease was specifically made subject to the supplemental agreement. The supplemental agreement provided the parties would enter a formal operating agreement after two wells were drilled. The “formal operating agreement” was to “embody and embrace all of the terms and conditions necessary to cope with all information, data, and knowledge which has been acquired from the drilling of the first two wells . . .” Although Rimrock subsequently drilled eight wells, the parties never entered into a formal operating agreement. The Nutters contend the agreement actually entered contained almost no specifics and that the parties merely agreed to reach various future agreements. As examples, the Nutters state the document states they will determine the locations of additional oil wells and the terms of the formal operating agreement in the future. The Nutters contend the result is that the agreement with Buffalo Jump was not a binding contract, but simply an “agreement to agree.”

As a general rule, the terms of a contract must be reasonably certain. See, Bishop v. Hendrickson (Mont. 1985), [215 Mont. 158,] 695 P.2d 1313, 1314, 42 St.Rep. 259, 260. However, it is also true that “if the material elements are stated in general terms, all the details or particulars need not be stated.” McNabb v. Norine (1983), 204 Mont. 330, 335, 664 P.2d 927, 930.

Respondent Somont points out a number of specific items that were part of the agreement including:

“[T]hat the mineral interest of the Nutters would be developed by Buffalo Jump at no personal expense to Nutters; that a certain number of wells would be drilled within a specific period of time; that the wells would be drilled to test a particular geological formation; that after Buffalo Jump recovered certain specific development and operational costs, Buffalo Jump and Nutters would share the net profits from production on an equal basis; that equipment actually contributed by a party, would belong to such party; that Buffalo Jump would perform all office and administrative work necessary to production; that any landowner’s royalty interest owned by either party would be paid as all other landowner’s royalty and not count toward the owner’s share of net profits; and, that the agreement could be ‘amended and changed from time to time in accordance with the agreement of the parties.’ ”

The agreement included the subject matter of the contract, the division of profits, payment of operating expenses, and certain references to the time frame involved. Admittedly, the agreement does not include every item that might have been included in regards to the actual operational aspects. However, “a contract is not invalid simply because it does not contain all the provisions or conditions the parties might have incorporated into it.” Wilkerson v. School District No. 15, Glacier County (Mont. 1985), [216 Mont. 203,] 700 P.2d 617, 621, 42 St.Rep. 745, 749.

An additional reason why the Buffalo Jump-Nutter agreement is a valid contract is because the Nutters performed under that agreement as if it were valid. Until Somont received the assignment of the lease in February of 1984, Rimrock drilled and completed eight wells without any objection from the Nutters as to whether the agreement was valid. “Part performance under an agreement may remove uncertainty and establish that a contract enforceable as a bargain has been formed.” Restatement (Second] of Contracts Section 34(2) (1979). The parties performed under the agreement for nearly three years and such performance strongly indicates a valid contract existed. Therefore, we conclude that performance under the agreement combined with the actual terms provided demonstrate the existence of a valid contract.

In the alternative, the Nutters contend that if a valid contract existed it was personal in nature and therefore nonassignable. The Nutters state they entered the Buffalo Jump agreement relying on the particular personality and skill of those people operating the Buffalo Jump corporation. It is contended that the personal nature of the agreement is evidenced by the fact that several points were left to future mutual agreements by the parties: well locations, arrangements for developing wells, and the terms of an operating agreement. The Nutters allege they entered the agreement based on an estimate of the personalities of each party and their ability to work comfortably together. The Nutters conclude that when Rim-rock assigned the agreement to Somont without their permission they were deprived of the benefit of their bargain.

We recognize that rights arising under a contract are generally assignable unless the contract prohibits assignment. See, Standard Sewing-Machine Co. v. Smith (1915), 51 Mont. 245, 248, 152 P. 38, 39. The assignment is not prohibited by the Buffalo Jump-Nutter agreement. The supplemental agreement is silent as to assignments and the lease document appears to contemplate the possibility of assignment by making a reference to the lessors “heirs, successors and assigns.”

Despite the fact that the agreement does not prohibit assignment, the Nutters point out that an exception to the general rule is when a contract is personal in nature and an assignment would deprive a party to the contract of the benefit of his bargain. We agree that a contract may be so personal in nature that the assignment of rights and delegation of duties under the contract should be prohibited. As stated by the Supreme Court of California:

“The terms and purpose of a contract may show, however, that it was intended to be nonassignable. Thus the duties imposed upon one party may be of such a personal nature that their performance by someone else would in effect deprive the other party of that for which he bargained. The duties in such a situation cannot be delegated. (Citation omitted.) Rights likewise cannot be assigned if the assignment would materially impair the nonassigning party’s chance of obtaining the performance he expected. (Citation omitted.)”

Farmland Irrigation Co. v. Dopplmaier (1957), 48 Cal.2d 208, 308 P.2d 732, 740, 741. The Restatement (Second) of Contracts Section 317(2) (1979) similarly recognizes that the assignment of a contractual right should be prohibited if

“(a) the substitution of a right of the assignee for the right of the assignor would materially change the duty of the obligor, or materially increase the burden or risk imposed on him by his contract, or materially impair his chance of obtaining return performance, or materially reduce its value to him . . .”

Likewise, the Restatement addresses the delegation of a duty and states:

“(2) Unless otherwise agreed, a promise requires performance by a particular person only to the extent that the obligee has a substantial interest in having that person perform or control the acts promised.”

Id. at Section 318(2).

With the above rules in mind, we agree with respondent Somont in that the duties imposed on Buffalo Jump “were not so unique in the oil and gas industry as to involve a degree of trust and confidence singularly personal to the contracting parties.” We reach this conclusion by examining a number of factors. As noted, the supplemental agreement fails to prohibit any assignment or delegation, and the lease itself appears to contemplate the possibility of assignment. The agreement actually was assigned from Buffalo Jump to Rimrock on May 1, 1981. None of the parties involved objected to the assignment and Rimrock continued oil production for nearly three years without any objection. Although Buffalo Jump and Rimrock appear to be related entities, the assignment indicates that assignments were not prohibited. We affirm that the contract was assignable.

The Nutters also challenge the District Court’s conclusion that the Nutters were estopped from alleging the contract with Buffalo Jump was invalid. Since we have already considered appellants’ argument regarding the invalidity of the agreement and decided the agreement was a valid assignable contract, this issue need not be discussed.

II. INTERPRETATION OF RIGHTS AND OBLIGATIONS UNDER THE CONTRACT.

The supplemental agreement to the Buffalo Jump-Nutter contract indicates that the parties would operate the oil operation as joint operators. The District Court concluded that the agreement was ambiguous as to who should conduct the day-to-day operations of the property. The District Court found the ambiguity was compounded because Mr. Nutter acted as an employee and not a joint operator. In resolving the conflict between the parties, the court directed Somont to conduct the daily operations and granted the Nutters a right of inspection:

“Somont shall continue to conduct the development and operation of the mineral estate underlying the EV2 of Section 15 in a manner consistent with good practices in the oil and gas industry and in conformance with the rules and regulations of the Board of Oil and Gas Conservation for the State of Montana. Nutters have the right to inspect such operations at any time but may not physically interfere with the operations unless they have Somont’s consent or unless they have an order of the Court.”

Conclusions of Law dated December 18, 1986 at 8. The Nutters contend they are entitled to a joint operator status in the day-to-day operations. Additionally, they request the power to make decisions regarding the daily operations if the parties are unable to agree.

We agree with the District Court that the agreement is not entirely clear as to who will conduct the actual daily operations. The agreement does indicate that the Nutters and Buffalo Jump are to be joint operators, but also seems to imply that the daily operations are to be performed by Buffalo Jump. For example, Buffalo Jump is given the task of performing the necessary administrative functions, determining the capability of commercial production, and paying development and operation costs. Evidence was presented demonstrating that when Mr. Nutter worked on the oil operations he did so as an employee rather than a joint operator. Mr. Nutter himself gave the following testimony:

“Q: I refer you back to testimony that was given with reference to your working on the east half of Section 15, Township 35 N, Range 2 W, and you did work on that lease after the Buffalo Jump Oil and Gas lease was executed, signed and delivered?
“A: Yes.
“Q: In what capacity?
“A: At different times I did different things. I worked on the rig when we were drilling the wells.
“Q: Were you an employee?
“A: Supposedly, yes.
“Q: And, were you supposed to be paid for that?
“A: Yes.”

We conclude that the District Court decision to grant Somont the authority to conduct the daily operations subject to a right of inspection by the Nutters is correct. Despite this conclusion, the Nutters retain a significant amount of control over the oil operations in that they have the right to inspect the operations at any time; receive monthly statements from Somont indicating gross production, royalties paid, taxes paid and. operational and development costs; and to request and receive an explanation of any specific development and operational cost item they question. Additionally, the District Court order requires Somont to follow good practices within the industry and to conform with applicable state regulations and rules.

III. SOMONT’S 20% MINERAL INTEREST.

Somont asserts it holds a valid lease to the remaining 20% mineral interest for the parcel of land in question. This lease interest is derived from a lengthy chain of title and originated when Anna Kenny granted Stevenson Associated Royalties Company a 20% reversionary interest in the mineral estate in 1922.

In 1926, Stevenson conveyed the interest by warranty deed to Sunburst Oil and Refinery Company. That deed purported to transfer “any and all interest ... to real estate ... in the State of Montana.” Sometime during the 1930s, Sunburst became insolvent. In October of 1939, a federal court order authorized Sunburst’s receiver, John Hamilton, to transfer Sunburst’s assets. Hamilton transferred the property interest by deed to V.B. Carlson in 1939. That deed purported to convey “all and singular of the undesignated and unknown assets . . . wherever situated within the state of Montana.” V.B. Carlson conveyed the interest to L.R. Baily by quitclaim deed in March of 1940. That deed purported to convey “every species of real property . . . which Grantor owned or claimed to own within Toole County, Montana.” The remaining transfers in the chain of title purport to transfer the interest acquired from Carlson and no legal description is offered. L.R. Baily made a conveyance of one-half of his interest by quitclaim deed in May of 1947 to Hazel Deschon. That same month, Hazel Deschon transferred her interest to A.H. Raymond by quitclaim deed. In 1980, Somont obtained a lease interest on the entire 20% by entering an oil and gas lease with both L.R. Baily’s personal representative and A.H. Raymond’s personal representative.

The Nutters claim Somont’s lease is invalid because the deeds within the chain of title were too vague and indefinite to pass marketable title, and several deeds failed to include any description of the land involved. The District Court examined the deeds comprising the chain of title and concluded they were sufficiently definite. The majority rule is “that a deed describing land as ‘all’ the grantor’s property or ‘all’ his property in a certain locality is not defective or void for want of a sufficient description . . .” 23 Am.Jur.2d Deeds Section 59 (1983). See also, Wilson v. Boyce (1875), 92 U.S. (2 Otto) 320, 325, 23 L.Ed. 608, 610. We agree with the District Court and find that the deeds were sufficiently definite. Moreover, we note that several of the deeds refer specifically to oil and gas interests and royalties.

Finally, the Nutters claim the chain of title is defective because there is no evidence in the record to establish John Hamilton’s authority to act as a receiver. However, a review of the District Court file demonstrates that an order issued by the United States District Court, District of Montana, granted Hamilton the authority to act as receiver and convey assets of Sunburst Oil and Refining Company. Therefore, this contention is without merit.

For the foregoing reasons we affirm the decision of the District Court.

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


source: Caselaw Access Project

author: MR. CHIEF JUSTICE TURNAGE

license: Public Domain

text:
    In re the MARRIAGE OF FRANK L. NEISS, Petitioner and Appellant, and DARLENE M. NEISS, Respondent and Respondent.
    No. 87-109.
    Submitted on Briefs July 14, 1987.
    Decided Oct. 6, 1987.
    743 P.2d 1022.

      Michael M. Morse, Billings, for petitioner and appellant.
    Whalen & Whalen, Timothy J. Whalen, Billings, for respondent.
   MR. CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Frank L. Neiss appeals an order of the Thirteenth Judicial District, Yellowstone County, finding Frank and Darlene Neiss’ agreement to modify child support in violation of public policy and thereby null and void. We affirm.

Appellant Frank Neiss raises one issue for our review:

Did the District Court abuse its discretion when it declared the parties’ agreement for modification of child support to be null and void?

Frank and Darlene Neiss were married in Cody, Wyoming, on August 30, 1968. Two children were born of the marriage: Patrick on July 1, 1971 and Camile on August 31, 1973. Frank subsequently petitioned for divorce. On January 15, 1976 a decree of dissolution was entered which provided that custody of the children be awarded to Darlene. Frank Neiss was ordered to pay $150 in child support per month for each child and $200 per month for maintenance. On January 3, 1978, the original decree was modified and Frank was ordered to pay $125 per month for each child and $100 per month in maintenance. Frank’s obligation of $100 per month in maintenance expired in January, 1986.

On August 16, 1984, Frank and Darlene Neiss entered an agreement entitled “Agreement for Modification of Entry on Decree” (hereinafter agreement to modify). Both parties were represented by counsel. The agreement to modify required that Frank make quarterly installment payments totaling $12,000 on or before November 1, 1985. In return Darlene would release Frank from further obligations of child support and maintenance.

At trial, Frank Neiss testified that he faced great financial problems due to poor crop prices and farm drought. Neiss stated that he had difficulty finding non-farm work and that he was unable to meet his child support obligations.

When the parties entered the agreement to modify, Frank was $3,500 in arrears in child support and maintenance payments. Darlene testified that the agreement, if enforced, would release Frank of $9,000 in future child support. Darlene also testified that she entered the agreement because Frank was behind in his payments and that she had experienced difficulty collecting payments from Frank.

On May 9, 1986, Darlene petitioned the District Court to declare the entire agreement null and void. Darlene alleged that Frank was thirty days late on his final payment of $3,500. Pursuant to the agreement, Darlene exercised her right to declare the agreement null and void. The District Court found the agreement null and void as a violation of public policy. The court did not address Darlene’s claim that Frank violated the terms of the agreement.

In determining whether the agreement to modify is valid, the District Court is governed by Section 40-4-208, MCA, which provides:

“Modification and termination of provisions for maintenance, support and property disposition. (1) Except as otherwise provided in 40-4-201(6), a decree may be modified by a court as to maintenance or support only as to installments accruing subsequent to actual notice to the parties of motion for modification.
“(2) (b) Whenever the decree proposed for modification contains provisions relating to maintenance or support, modification under subsection (1) may only be made:
“(i) upon a showing of changed circumstances so substantial and continuing as to make the terms unconscionable ; or
“(ii) upon written consent of the parties. [Emphasis added.]”

Appellant Frank Neiss contends the District Court abused its discretion when it concluded the agreement to modify was null and void as a violation of public policy. Frank argues that both parties were represented by counsel and relied on the terms of the agreement. Frank also contends Section 40-4-208(2) (b)(ii), MCA, permits parents to modify child support decrees.

When determining the amount of child support to be paid by a noncustodial parent, the district court must act in the best interests of the child. Sections 40-4-201 through 40-4-225, MCA. It follows that the court is not bound by the parties’ agreements where the welfare of the children are concerned. Jensen v. Jensen (Mont. 1981), [_ Mont. _,] 629 P.2d 765, 769, 38 St.Rep. 927, 931. It is the children, not the parents, who are beneficiaries of child support decrees. In re Marriage of Cook (Mont. 1986), [223 Mont. 293,] 725 P.2d 562, 567, 43 St.Rep. 1731, 1737.

The District Court found that at the time the parties agreed to modify, appellant was $3,500 in arrears in child support and maintenance. The court also found that had the agreement been enforced, appellant would have been relieved of $9,000 in future child support payments. Appellant Frank Neiss does not dispute these findings. Additionally, respondent Darlene Neiss testified that she entered the agreement because she desperately needed money to pay for the children’s expenses.

In matters relating to children, the best interests of the children control. While terms of a contract may be introduced as evidence, the custody and support of children are never left to contract between the parties. In re Marriage of Carlson (Mont. 1984), [214 Mont. 209,] 693 P.2d 496, 500, 41 St.Rep. 2419.

Frank argues that he relied on the agreement to modify, therefore, equitable estoppel requires that it be enforced. Equitable estoppel must be found by the trial court upon clear and compelling evidence to override the provisions of Section 40-4-208, MCA. In Re Marriage of Cook (Mont. 1986), [223 Mont. 293,] 725 P.2d at 566, 43 St.Rep. at 1737, 1738. We agree with the District Court that appellant has not shown sufficient evidence of reliance to warrant application of the doctrine. Frank’s payments of $12,000 was nearly equal to the amount owed during the period covered by the agreement. Therefore, the District Court properly dismissed his claim of detrimental reliance.

We hold the District Court correctly found that Frank Neiss failed to carry his burden of proof needed to apply equitable estoppel. We note that both parties face difficult financial problems. However, the children are not to be denied support by extra-judicial agreements. These agreements may please the parents, but ignore the children’s need for support. Section 40-4-208, MCA. See, Napoleon v. Napoleon (1978), 59 Hawaii 619, 585 P.2d 1270, 1273.

The judgment of the District Court is affirmed.

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


author: MR. JUSTICE GULBRANDSON

text:
    LAWRENCE SCHNEIDER, Plaintiff and Appellant, v. C.W. LEAPHART, JR., Defendant and Respondent.
    No. 87-143.
    Submitted on Briefs July 23, 1987.
    Decided Oct. 6, 1987.
    743 P.2d 613.

      Ralph T. Randono, Great Falls, for plaintiff and appellant.
    Ugrin, Alexander, Zadick & Slovak; Gary M. Zadick, Great Falls, for defendant and respondent.
   MR. JUSTICE GULBRANDSON

delivered the Opinion of the Court.

Plaintiff appeals from the order of the Ninth Judicial District in and for Chouteau County, Montana, granting defendant’s motion for summary judgment. We affirm.

C.W. Leaphart is an attorney residing in Helena. In 1979, Dr. Lawrence Schneider, a Helena dentist, and his wife, Lynne Schneider, approached Leaphart and asked that he represent them in a joint petition for dissolution. Leaphart agreed to the representation and recommended that the Schneiders work out a suitable property settlement on their own.

Dr. Schneider’s accountant recommended that he frame part of the property settlement as maintenance for tax purposes. Dr. Schneider gathered from his discussions with the accountant and Leaphart that the maintenance payments must extend over a period of ten years to be tax deductible. Consequently, Dr. Schneider directed Leaphart to include a provision in the property settlement whereby Lynne Schneider would receive $1,000 a month in maintenance for ten years and a month. Leaphart advised Dr. Schneider that he could subsequently modify the property settlement agreement, but that any such modification should be in writing.

Dr. Schneider then entered into discussions with Lynne concerning a side agreement to terminate the maintenance payments after twenty-six months. Dr. Schneider drafted an agreement to limit maintenance to twenty-six months and told Lynne that “it’s not important to me whether you really sign this or not, just so you understand and agree with me as to the terms of the agreement we made.” Lynne Schneider refused to sign the side agreement.

The Schneiders agreed on the terms of the property settlement as drafted by Leaphart. The dissolution decree and property settlement agreement were entered in the District Court of Lewis and Clark County on November 3, 1979. In January of 1981, Dr. Schneider again attempted to obtain a side agreement from Lynne to limit maintenance payments to twenty-six months. Lynne again refused to sign such an agreement. In July of 1981, after making twenty-two $1,000 maintenance payments, Dr. Schneider offered to pay in advanee what he believed to be the remaining four payments on the condition that Lynne give him a release. Lynne did not respond to this offer.

Approximately three months later, Dr. Schneider solicited the opinion of an accountant as to the necessity of the ten year maintenance provision in the property settlement agreement. On December 4,1981, Dr. Schneider received the accountant’s opinion that the ten year provision was unnecessary and that maintenance payments were properly deductible based on a twenty-six month term. That same day, Dr. Schneider had Leaphart send the twenty-sixth monthly maintenance payment to Lynne. Leaphart typed on the check that this payment was “the final payment due you per the understanding of [the date of the side agreement].” On December 15, 1981, Dr. Schneider again sent Lynne a release for her signature. Lynne again ignored his correspondence. Schneider made no further maintenance payments as required by the property settlement.

Lynne’s refusal to cooperate prompted Dr. Schneider to suggest to Leaphart that litigation be instituted to resolve the matter. However, Dr. Schneider did not believe that Lynne would seek to enforce the maintenance provisions of the property settlement. Leaphart counseled Dr. Schneider not to sue Lynne because it appeared that Lynne would not demand the remaining maintenance payments. At Dr. Schneider’s request, Leaphart provided an affidavit attesting to Lynne’s having agreed orally to the twenty-six month side agreement.

In January of 1984, Dr. Schneider attempted to sell two pieces of rental property located in Helena and jointly owned by Dr. Schneider and his dental partners. The title reports on the properties characterized the maintenance (as ordered in the decree of dissolution) as a lien. Lynne agreed to quitclaim her interest in one of the properties because the buyer was a friend. She refused to give the buyer of the second property a quitclaim deed.

Dr. Schneider met with Lynne on three occasions during the spring of 1984 in an attempt to obtain a release. Lynne responded by filing suit in the District Court of Lewis and Clark County to enforce the maintenance provisions of the property settlement agreement. The Lewis and Clark County District Court found that no side agreement existed and ordered that the parties be held to the terms of the original property settlement agreement. The case settled with Lynne receiving approximately $50,000 in property and cash.

Dr. Schneider filed this action for professional malpractice in Chouteau County District Court against Leaphart on March 27, 1985, more than three years and three months after the accountant’s opinion. Dr. Schneider alleged that Leaphart negligently drafted the property settlement agreement to include an unnecessary provision for maintenance. Leaphart answered and alleged, among other defenses, that Dr. Schneider’s claims were barred by the statute of limitations.

Dr. Schneider was deposed on July 18, 1985. On October 22, 1985, Leaphart moved for summary judgment on the grounds that Dr. Schneider failed to file the action within the applicable statute of limitations for attorney malpractice as set forth in Section 27-2-206, MCA. The District Court granted Leaphart’s motion and Dr. Schneider appeals raising the following issues:

(1) Was Dr. Schneider aware, as a matter of law, of all facts essential to his cause of action, before the start of the limitations period?

(2) Was the limitations period tolled by the doctrine of “continuous representation?”

(3) Should Leaphart be estopped to raise the statute of limitations in this action?

The statute of limitations for attorney malpractice, Section 27-2-206, MCA, provides as follows:

“An action against an attorney licensed to practice law in Montana or a para-legal assistant or legal intern employed by an attorney based upon the person’s alleged professional negligent act or for error or omission in the person’s practice must be commenced within three years after the plaintiff discovers or through the use of reasonable diligence should have discovered the act, error or omission, whichever comes last, but in no case may the action be commenced after ten years from the date of the act, error, or omission.” (Emphasis added.)

District Court found no genuine issue of material fact and granted summary judgment to Leaphart as a matter of law on the grounds that Dr. Schneider had not filed this action within the three-year statute of limitations. Dr. Schneider’s burden on appeal is to establish that a genuine issue of material fact exists. Pretty On Top v. Hardin (1979), 182 Mont. 311, 315, 597 P.2d 58, 60.

Dr. Schneider first argues that the District Court erred in concluding that he had “discovered” Leaphart’s negligent act more than three years before the filing of this action. As his first issue implies, Dr. Schneider asserts that he must discover all elements of a cause of action, including his damages, before the statute of limitations accrues. Dr. Schneider contends that he did not discover his damages until he learned that the maintenance order was a lien on his property in February of 1984. The date of “discovery,” he argues, is a genuine issue of material fact and it was improper for the District Court to enter summary judgment.

Dr. Schneider urges this Court to adopt a new rule whereby the statute of limitations in a legal malpractice action would not run until the plaintiff discovers his actual and determinable damages. This relatively new rule, otherwise know as the “damage rule,” has been recognized in several states. See, R. Mallen & V. Levit, Legal Malpractice, Section 390 (2d ed. 1981). However, Dr. Schneider’s “damage rule” argument fails for two reasons.

Initially, the Montana legal malpractice statute of limitations, Section 27-2-206, MCA, only allows the tolling of the statute of limitations until such time as the attorney’s negligent act is discovered or through the use of reasonable diligence should have been discovered. Burgett v. Flaherty (1983), 204 Mont. 169, 663 P.2d 332, 334, 40 St.Rep. 748, 751. There is no statutory requirement that the legal malpractice statute of limitations be tolled until a party discovers his or her damages. Section 27-2-206, MCA.

Even if Montana recognized the “damage rule,” which it does not, Dr. Schneider’s argument fails because he knew or should have known the extent of his damages well within the three year statute of limitations. The decree of dissolution (including the maintenance provision) in this matter became an enforceable judgment upon entry by the Clerk of the District Court. Rule 54(a), M.R.Civ.P. At the time it was docketed, the maintenance provision in the decree of dissolution became a lien upon all of Dr. Schneider’s real property in Lewis and Clark County. Section 25-9-301(2), MCA; Gaines v. Van Demark (1937), 106 Mont. 1, 74 P.2d 454. Consequently, Dr. Schneider is charged with at least constructive knowledge of the liens against his real property as of the date the decree was entered in District Court; November 3, 1979.

Dr. Schneider received the accountant’s opinion and became aware of Leaphart’s alleged negligence on December 4, 1981. He was aware at that time that the maintenance provision required monthly payments of $1,000 for ten years and a month. Dr. Schneider also repeatedly attempted to get Lynne to reduce his maintenance obligations. Given these circumstances, the District Court was correct in concluding that no genuine issue of material fact existed as to when Dr. Schneider discovered Leaphart’s alleged negligent act.

As to the second issue in this appeal, the material facts are not in dispute. Accordingly, Dr. Schneider’s second issue presents this Court with a question of law. We are then free to review the District Court’s legal analysis and draw our own conclusions. Sharp v. Hoerner Waldorf Corp. (1978), 178 Mont. 419, 423, 584 P.2d 1298, 1300. Our analysis leads us to agree with the District Court.

Dr. Schneider urges this Court to adopt the doctrine of “continuous representation” in the context of legal malpractice actions. His argument is that the three year legal malpractice statute of limitations must be tolled until such time as an attorney ceases to represent a plaintiif. The District Court found that, as a matter of law, Montana does not recognize the doctrine of continuous representation in legal malpractice actions.

Dr. Schneider is correct in pointing out that this Court has not directly addressed this issue in the past. However, this Court has noted that “[s]ection 27-2-206, MCA does not suspend accrual until the ‘attorney-client’ relationship has been terminated.” Burgett, 663 P.2d at 334, 40 St.Rep. at 751. Some states, like California, have seen fit to codify the “continuous representation” doctrine into their legal malpractice statutes of limitations. Compare Cal.Code Civ.Proc. Section 304.6(a)(2). The doctrine of continuous representation is absent from the Montana legal malpractice statute and we decline to judicially adopt such a provision. Accordingly, the District Court was correct in refusing to apply the doctrine of continuous representation to toll the statue of limitations in this matter.

In his final issue, Dr. Schneider argues that Leaphart should be estopped from pleading the statute of limitations. Dr. Schneider contends that Leaphart’s advice not to sue Lynne Schneider prevented him from discovering his damages and for this reason alone Leaphart should be estopped from claiming that the statute of limitations had run. Regardless of what Dr. Schneider knew or did not know about his damages, we again emphasize that he needed only to discover Leaphart’s alleged negligent act for the statute of limitations to commence.

The District Court applied the elements of estoppel to the facts and ruled in Leaphart’s favor. See Keneco v. Cantrell (1977), 174 Mont. 130, 136, 568 P.2d 1225, 1228. However, the District Court need not have addressed the elements of estoppel because concealment of damages, as argued by Dr. Schneider, is not material to an estoppel argument under the specific circumstances of this case.

For a viable estoppel argument, Dr. Schneider must first present evidence that “conduct, act, language or silence amounting to a representation or a concealment of material facts . . by Leaphart prevented discovery of Leaphart’s alleged negligent act. Keneco, supra. Dr. Schneider fails to address this point and we are under no duty to anticipate his argument to establish the existence of a genuine issue of material fact. Larry C. Iverson, Inc. v. Bouma (1981), 195 Mont. 351, 374, 639 P.2d 47, 59.

The first issue in this appeal is dispositive of the last issue. Dr. Schneider became aware of Leaphart’s alleged negligence no later than the date he received the accountant’s opinion. His knowledge of the alleged faulty maintenance provision, as drafted by Leaphart, was sufficient to begin the running of the three-year statute of limitations. Accordingly, no genuine issues of material fact exist as to when Dr. Schneider discovered Leaphart’s alleged negligent act. We hold that the three-year statute of limitations, as set forth in Section 27-2-206, MCA, had run and summary judgment was proper under the particular facts of this case.

Affirmed.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, SHEEHY and McDONOUGH concur.


author: MR. JUSTICE SHEEHY

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. JERRY WATERS, Defendant and Appellant.
    No. 87-241.
    Submitted on Briefs Aug. 20, 1987.
    Decided Oct. 6, 1987.
    743 P.2d 617.

      Thompson & Swenson, Bruce E. Swenson, Havre, for defendant and appellant.
    Mike Greely, Atty. Gen., Joe R. Roberts, Asst. Atty. Gen., Helena, David G. Rice, Co. Atty., Havre, for plaintiff and respondent.
   MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

Following a trial by jury in the Twelfth Judicial District, Hill County, the defendant, Jerry Waters, was convicted of attempted theft, a felony. Waters alleges that he was denied his constitutional right to a speedy trial and that the District Court erred by admitting a video cassette recorder (VCR) into evidence. We disagree. The judgment of the District Court is affirmed.

Waters presents the following issues for our review:

1. Whether the District Court erred by failing to grant defendant’s motion to dismiss for denial of speedy trial?

2. Whether a VCR which was not included in a list of tangible objects as required by Section 46-15-322(1)(d), MCA, should have been excluded from evidence admitted at the trial?

On August 8, 1985, Waters was arrested by City of Havre police officers and incarcerated in the Hill County jail for a period of 13 days. Waters’ arrest resulted from his attempt to trade a VCR he had rented from Marra’s TV for a VCR owned by Hi-Line Electronics. The intervention of the City of Havre Police, at the request of Hi-Line Electronics, prevented completion of the transaction.

The Hill County Attorney’s office filed an information charging Waters with attempted theft, a felony, on August 29, 1985. Arraignment was initially scheduled for September 20, 1985, but was delayed until October 2, 1985, at the request of Waters. Counsel for the defendant raised the issue of denial of speedy trial at the omnibus hearing held January 29, 1986.

Waters filed a motion to dismiss for denial of speedy trial on April 16, 1985, and an evidentiary hearing was held on May 8, 1985. At the hearing, Gayla Hunt of Adult Probation and Parole, testified that Waters was under her supervision as a result of a previous deferred sentence. Ms. Hunt indicated that the decision as to whether to seek revocation of Waters’ probation would be made following the outcome of his trial on the attempted theft charge. She also testified that during the period from his release from jail on August 21, 1985, until the date of the hearing, Waters failed to report at 11 of 18 scheduled appointments.

Counsel for the defendant also called Waters to the stand. Waters testified as follows:

“Q. [defense counsel] Have the pending charges affected how much work you have been able to do? A. Yes and no.
“Q. Could you explain that a little more, please?
“A. Well, I don’t know how to put it. It just bothers and worries me that I really don’t have, get to thinking about it and wouldn’t have any ambition to go out and do anything, really. And like more or less go to check out, go to the secondhand store, flea markets on the weekend.”

Waters also indicated that the pending charges prevented filing a lawsuit against Marra TV; that he was blacklisted by rental stores and not able to do normal rental business; and that he was anxious for the pending charge to be resolved.

The District Court denied the defendant’s motion to dismiss and proceeded to trial on May 12, 1986. During the time from the filing of the information until May 9, 1986, the prosecution told the defendant and defendant’s counsel that two photographs of the VCR would be admitted into evidence. The VCR had not been listed as a proposed exhibit or as an item the prosecution would seek to present at trial. The VCR was admitted into evidence during trial over defendant’s objection.

Any person accused of a crime is guaranteed the right to a speedy trial by the Sixth Amendment to the United States Constitution and Art. II, Section 24 of the Montana Constitution. The right to a speedy trial is fundamental. It attaches when a defendant is accused of a crime, State v. Ackley (1982), 201 Mont. 252, 255, 653 P.2d 851, 853, but the nature of the right precludes establishing a time period cast in stone as determinative.

“The right of a speedy trial is necessarily relative. It is consistent with delays and depends on circumstances. It secures rights to a defendant. It does not preclude the rights of public justice.”

Beavers v. Haubert (1905), 198 U.S. 77, 87, 25 S.Ct. 573, 576, 49 L.Ed. 950, 954. Thus, any inquiry into a speedy trial claim necessitates a functional analysis of the right in the particular context of the case.

Consistent with the amorphous quality of the right, the United States Supreme Court established a four-pronged balancing test to determine speedy trial claims in Barker v. Wingo (1972), 407 U.S. 514, 92 S.Ct. 2182, 33 L.Ed.2d 101. This Court has adopted the Barker test as stated in State ex rel. Briceno v. District Court (1977), 173 Mont. 516, 518, 568 P.2d 162, 163-4:

“These cases involve a sensitive balancing of four factors, in which the conduct of the prosecution and defendant are weighed in determining whether there has been a denial of the right to a speedy trial. The four factors to be evaluated and balanced are:
“1) Length of delay;
“2) Reason for delay;
“3) Assertion of the right by defendant; and
“4) Prejudice.”

No single factor is determinative. Each facet of the analysis is weighed in light of the surrounding facts and circumstances.

The length of delay acts as the triggering mechanism in a speedy trial analysis. The other factors need not be examined unless a presumptively prejudicial delay has occurred. State v. Harvey (1979), 184 Mont. 423, 603 P.2d 661. The delay in the instant case is 277 days. This amount of time is sufficient to trigger a speedy trial examination. State v. Palmer (Mont. 1986), [223 Mont. 25,] 723 P.2d 956, 43 St.Rep. 1503 (256 days); State v. Chavez (Mont. 1984), [213 Mont. 434,] 691 P.2d 1365, 41 St.Rep. 2219 (214 days); State v. Ackley (1982), 201 Mont. 252, 653 P.2d 851 (257 days); State v. Cassidy (1978), 176 Mont. 385, 578 P.2d 735 (246 days).

The delay in the instant case gives rise to a rebuttable presumption of prejudice. In order to rebut the presumption, the State must come forward with evidence showing that the defendant was not prejudiced by the delay and that there is a reasonable excuse. Ackley, 201 Mont. at 256, 653 P.2d at 853.

The second Barker factor is the reason for the delay. Waters is responsible for 12 of the 277 days. Thus the remaining 265 days are attributable to the State.

The right to a speedy trial is designed to prevent oppressive tactics by the State. Waters does not contend, nor does the evidence support, a finding that the State engaged in bad faith or oppressive tactics. We are not unaware of the crowded court dockets and the method of scheduling trials. Although delays inherent in the system are chargeable to the State, institutional delay will be weighed less heavily in the balancing process. Ackley, 201 Mont. at 256, 653 P.2d at 853. In the instant case, we find the delay to be institutional.

The third Barker factor is assertion of the right by the defendant. Waters properly asserted his right before commencement of trial. State v. Bailey (1982), 201 Mont. 473, 655 P.2d 494. The State does not contest this factor.

The final factor under Barker is prejudice to the defendant. Prejudice is determined by examining the defendant’s interest in a speedy trial. These interests are: (1) to prevent oppressive pretrial incarceration; (2) to minimize anxiety and concern of the accused; and, (3) to limit the possibility that the defense will be impaired. Barker, 407 U.S. at 532, 92 S.Ct. at 2193, 33 L.Ed.2d at 118. Waters concedes that 13 days incarceration is not per se sufficient to establish prejudice violative of the right to a speedy trial. Nor does the record indicate that his defense was in any way impaired.

The point of contention is whether Waters suffered anxiety and concern sufficient to violate the right to speedy trial. A certain amount of anxiety and concern is inherent in being accused of a crime. Chavez, 691 P.2d at 1371, 41 St.Rep. at 2224. A defendant’s anxiety and concern is not dispositive. It is but a factor to be considered in determining prejudice. The crucial factor in a prejudice determination is whether the defense has been impaired. See Barker, 407 U.S. at 532, 92 S.Ct. at 2193, 33 L.Ed.2d at 118. As noted above, there was no evidence that Waters’ defense was in any way impaired.

In any event, Waters’ allegations of anxiety and concern cannot be deemed excessive. Nor do the allegations conform to the evidence. When questioned as to whether his anxiety had affected his ability to work, Waters himself was unsure. He responded “yes and no.” Waters’ claim to a generalized lack of ambition is not sufficient to demonstrate prejudice.

Waters also claims that his anxiety and concern were magnified by the possible revocation of probation. His failure to report at 11 of 18 scheduled meetings with his probation officer does not support his contention. We do not find his argument convincing.

The third allegation of anxiety resulted from Waters’ inability to pursue a civil suit against Marra TV. It was not the passage of time but the result of the charges which ultimately affected defendant’s civil remedy, if he had any.

Finally, Waters claims to have suffered anxiety and concern due to his alleged “blacklisting” from other rental businesses. Again, we find Waters’ argument less than compelling. In response to the question of whether this blacklisting resulted in depression, Waters stated he just wanted to sue Marra’s TV. Neither the delay in pursuing a civil suit nor the inability to rent a VCR is sufficient to demonstrate prejudice sufficient to violate the right to a speedy trial. Whether analyzed individually or cumulatively, the defendant’s allegations of excessive anxiety and concern are inadequate.

The trial judge saw and heard Waters during cross-examination by Deputy County Attorney Rice. Due regard must be given to the opportunity of the trial court to judge the credibility of the witness. We must defer to District Court findings if they are supported by credible evidence. Chavez, 691 P.2d at 1371, 41 St.Rep. at 2224. Here, the State effectively demonstrated an absence of prejudice. We hold that Waters was not denied the right to a speedy trial.

Waters’ contention that the District Court erred when it admitted the VCR into evidence is equally without merit. The purpose of Montana’s discovery scheme is to enhance the search for truth. See generally Florida v. Williams (1970), 399 U.S. 78, 90 S.Ct. 1893, 26 L.Ed.2d 446. This goal is accomplished by granting “full notification of each side’s case-in-chief so as to avoid unnecessary delay and surprise at trial.” State v. Dodds (Ariz. 1975), 537 P.2d 970, 972.

Consistent with the goal, Section 46-15-329, MCA, provides a means of enforcing discovery orders. It endows the district courts with the flexibility to impose sanctions commensurate with the failure to comply with discovery orders. The statute does not mandate automatic exclusion for noncompliance. By its terms, Section 46-15-329 provides that “the court may impose any sanction that it finds just under the circumstances . . . .”

Imposition of sanctions is a matter best left to the sound discretion of the district court. Such discretion allows the court to consider the reason why disclosure was not made, whether the noncompliance was willful, the amount of prejudice to the opposing party, and any other relevant circumstances. Absent a clear abuse of discretion, the decision of the District Court must be upheld.

In the instant case, the District Court found that Waters had not suffered prejudice by the State’s failure to list the VCR. We agree. It is clear that Waters knew about the VCR since it was the item in controversy. The State had notified him that photographs of the VCR would be introduced into evidence and later informed the defense that the VCR itself would be introduced. Waters was not prejudiced or unduly surprised by the introduction of the VCR.

We hold that the District Court did not abuse its discretion. The judgment is affirmed.

MR. JUSTICES WEBER, GULBRANDSON, HUNT and Mc-DONOUGH concur.


author: MR. JUSTICE HARRISON

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. DOUGLAS ALBERT HOWIE, Defendant and Appellant.
    No. 87-305.
    Submitted on Briefs Sept. 3, 1987.
    Decided Oct. 13, 1987.
    744 P.2d 156.

      David W. Harman, Libby, for defendant and appellant.
    Mike Greely, Atty. Gen., Dorothy McCarter, Asst. Atty. Gen., Helena, Susan Loehn, Co. Atty., Libby, for plaintiff and respondent.
   MR. JUSTICE HARRISON

delivered the Opinion of the Court.

This is an appeal from a jury verdict of sexual assault on an eight-year-old girl. The matter was tried before the Honorable Robert M. Holter, Nineteenth Judicial District, in and for the County of Lincoln, State of Montana. Appellant was sentenced to six years in the Montana State Prison.

We affirm.

Three issues are presented for our consideration:

(1) Whether the trial court committed reversible error in failing to sever Counts II and III.

(2) Whether the trial court properly refused to dismiss Count II.

(3) Whether the prosecutor committed reversible misconduct in posing leading questions to the victim.

On February 5, 1987, the appellant was charged with three counts of sexual assault, all felonies, committed against an eight-year-old girl. Section 45-5-502, MCA, says one commits the offense of sexual assault if he “knowingly subjects another not his spouse to any sexual contáct without consent . . .” Section 45-2-101(60), MCA, defines sexual contact as “any touching of the sexual or other intimate parts of the person of another for the purpose of arousing or gratifying the sexual desire of either party.” Montana law permits a maximum sentence of twenty years in prison for anyone convicted of sexual assault upon a victim less than sixteen years of age.

The appellant was arraigned March 2, 1987, and pled not guilty to each count. Trial was held on June 3, 1987. At the close of the State’s case, on motion of counsel for the appellant, the court dismissed Count I. The jury found appellant not guilty on Count II, which charged that appellant made sexual contact with the girl on November 30 or December 1, 1986 while he was babysitting the child. The jury, however, convicted on Count III, which stems from an incident on January 25, 1987. We note that the jury considered all of the evidence in this case and found that the evidence supported conviction in Count III only.

The mother of the victim (hereinafter referred to as mother) lived in Libby, Montana with her daughter (hereinafter referred to as victim) age eight, and her son, age five. At the time of the offense, the appellant and the mother were involved in a relationship that lasted one year. They had spent a considerable amount of time together. The appellant was the mother’s boyfriend.

On January 25, 1987, the appellant invited the mother, her two children and some other people to his small apartment to watch the Super Bowl football game. Testimony at trial indicates that there was a considerable amount of beer consumed by the people at this party. At trial the appellant admitted that he had been drinking beer all day and that when questioned initially he had told a sheriff’s deputy he had been drunk.

That evening it was decided that the mother and her children would spend the night at appellant’s apartment. When it was time to put the children to bed, the mother put them in appellant’s bedroom, the only bedroom in the apartment. The mother could not persuade them to go to sleep, so the appellant offered to lie down with them to try to get them to sleep. The mother left the appellant with the children in the bedroom and testified that because she trusted the appellant, she closed the door. There was testimony by others present that the door was left open to allow the bedroom to stay warm, as the only heat source was in the other room.

The children were dressed in their pajamas and under the covers when the appellant lay on top of the covers, between the two children. The victim used anatomical dolls when she later testified that the appellant had his hand on her vaginal area, under her underpants and was rubbing her. She further testified that appellant said she should snuggle up to him. The victim came out to the living room and told her mother that she could not sleep. She went to the couch to lie down and she told her mother what the appellant had done to her. The appellant denies that he touched her in her vaginal area but did admit rubbing the children’s stomach in an effort to relax them and put them to sleep. As soon as the victim told her mother what had happened, the mother gathered up her two children and arranged transportation home.

One witness who was at appellant’s apartment that evening observed the victim come out of the bedroom. He testified that the victim seemed to be “a little distraught,” and that she complained that the appellant had been rubbing her, as the witness stated “just below the belt line.”

Issue one raises the question of whether the conviction should be reversed because the District Court failed to sever the counts. The appellant argues that the District Court committed reversible error when it failed to sever Counts II and III, even though the appellant’s counsel failed to request severance before the trial. Appellant’s counsel proposes that the District Court should have severed the counts on its own motion to protect appellant’s right to a fair trial since sexual abuse cases are highly emotional. However, it is the general rule that failure to object to an alleged error at trial results in a waiver of the right to challenge the error on appeal. Sections 46-20-104(2), 46-20-702, MCA; State v. Long (Mont. 1986), [223 Mont. 502,] 726 P.2d 1364, 43 St.Rep. 1948.

The record does not support appellant’s claim of reversible error. Section 46-11-404(4), MCA, states in pertinent part:

“If it appears that a defendant ... is prejudiced by a joinder of . . . separate charges . . . the court may order separate trials ... or provide any other relief as justice may require.”

We find no merit in appellant’s argument that the failure to sever Counts II and III prejudiced his case by the accumulation of evidence leading to his conviction on Count III.

This Court set forth in State v. Arthur Eldon Campbell (1980), 189 Mont. 107, 615 P.2d 190, three basic prejudices that may occur on joinder of similar offenses: (1) the jury may consider a defendant facing multiple charges to be a bad man and therefore may tend to accumulate the evidence until it convicts him of some charge; (2) proof of guilt on one count, inadmissible in a separate trial, may be used to convict the defendant on a second count; or (3) the defendant may wish to testify on his own behalf as to one count, but not on another. The first type of prejudice is seldom adequate to warrant severance, Campbell, 615 P.2d at 198.

Here the appellant failed to specify which evidence offered as to Count II prejudiced his trial on Count III. In his brief, appellant’s counsel admits that there was sufficient evidence for Count III to go to the jury. Here the very speculative allegation of prejudice is insufficient to reverse the District Court. The appellant has failed to meet his burden of demonstrating such prejudice. State v. Orsborn (1976), 170 Mont. 480, 489, 555 P.2d 509, 515.

Neither does the second type of prejudice, which deals with using evidence that would have been inadmissible in separate trials to gain a conviction, exist in this case. This is so because such prejudice is not present where the facts and details of the allegations of one count are so distinct that the jurors can keep it separate from the other count. Orsborn, 555 P.2d at 515. The appellant does not claim, and the record fails to indicate, that the two counts were so much alike that the jurors were unable to separate them.

Likewise, the appellant fails to claim, and the record fails to disclose, that appellant wished to testify about only one of the counts to the exclusion of the other. It is the District Court Judge who must balance any prejudice of the defendant’s case against the judicial economy that results from joint trials. Campbell, 615 P.2d at 198. This Court will not interfere with the District Court’s ruling where it appears, as it does here, that the District Court Judge employed sound discretion and did not abuse his judicial prerogatives.

As to issue two, the failure to dismiss Count II, we find no merit.

The District Court employed the authority granted it by Section 46-16-403, MCA, which allows it to dismiss the count at the close of the State’s case if the evidence is insufficient to support a guilty verdict. In State v. White Water (Mont. 1981), 634 P.2d 636, 638, 38 St.Rep. 1664, 1666, we considered the statute and held:

“[A] directed verdict should only be granted where there is no evidence upon which a jury could base a verdict; that is, the defendant is entitled to an acquittal if reasonable men could not conclude from evidence taken in the light most favorable to the prosecution that guilt has been proved beyond a reasonable doubt.” (Emphasis added.)

See, State v. Matson (Mont. 1987), [227 Mont. 36,] 736 P.2d 971, 974, 44 St.Rep. 874, 877, citing White Water, supra. The District Court keeping in mind the evidence that has been produced along with a notion of “reasonable doubt” is the arbiter that must decide whether to dismiss a count. The District Court Judge, on motion of appellant’s counsel at the close of the State’s case, considered the adequacy of the State’s evidence as to each of the three original counts. He granted the motion to dismiss Count I, which alleged that appellant had pinched the victim on the buttocks sometime during the late summer or fall of 1986. The court stated, in the absence of the jury:

“[I] listened to that [testimony] quite carefully because we have got to a pinching and the problem is that these [counts] become intertwined and proof of one becomes proof of the other. But that is not really the way that this works. I think that each count has to stand on its own.”
“It just seems to me that whatever the contact was was minimal to be able to conclude, standing alone, that Count No. 1 would be in any way to gratify any lust of anybody. It would be such an extension of the imagination that you would have to take some of the other proofs of other acts and I don’t think that is why they are submitted and I think that I’m just going to not burden the jury with that one.”

Meanwhile, the court allowed Count II to be submitted for jury consideration. The court ruled:

“I’m going to let that one go to the jury. I think that there is evidence there of contact and I guess the last element [that of sexual gratification], the circumstances could cover.”

Unless a defendant in a criminal case can show that the District Court abused its discretion, the ruling will not be disturbed. White Water, 634 P.2d at 637. The District Court Judge’s rationale shows that he made thoughtful decisions and did not abuse his discretion.

Here the District Court Judge allowed testimony of the victim relating to the facts of Count II. The victim testified as follows:

“Q. [By Mrs. Loehn] And what happened the night that Doug stayed with you?
“A. We went to bed and he said to me, one of us to sleep with him and [her brother] fell asleep and so I crawled in bed with him and he was naked.
“Q. He didn’t have any clothes on?
“A. No.
“Q. What did he do?
“A. He rubbed his leg on me.
“Q. Where on you did he rub it?
“A. Right on my leg.”

The appellant later testified that the two children slept in their own beds that evening and denied that the victim slept in his bed.

The victim’s testimony was such that a reasonable jury could conclude that the appellant had subjected the victim to sexual contact and that the contact was for appellant’s sexual gratification. Conviction of a sexual assault may be based entirely on the uncorroborated testimony of the victim. State v. Maxwell (1982), 198 Mont. 498, 503, 647 P.2d 348, 351. This rule pertains to child victims as well. In State v. A.D.M. (Mont. 1985), [216 Mont. 419,] 701 P.2d 999, 42 St.Rep. 1186, a five-year-old child was held to be competent to testify about sexual abuse by her father because her testimony was consistent with her prior reports and were supported by psychological testimony. Therefore, that child’s testimony required no corroboration. A.D.M., 701 P.2d at 1000. Whether a child is competent to testify is a matter left largely to the discretion of the trial court. State v. Rogers (Mont. 1984), [213 Mont. 302,] 692 P.2d 2, 5, 41 St.Rep. 2131, 2135, citing State v. Merrill Campbell (1978), 176 Mont. 525, 529, 579 P.2d 1231, 1233. In the present case the court questioned the child victim outside of the presence of the jury. Upon completion of the questioning, the court decided that the child had the capacity to remember the occurrence and the ability to relate her impressions of what occurred. Further, the court found that the child had an “understanding of the obligations to tell the truth . . .” The District Court properly discharged its function of insuring the competency of the child victim. In the case at bar, the jury might well have found sufficient proof to support Count II, even though they found the appellant not guilty of that charge.

The third issue raises the question of whether the prosecutor committed misconduct with her leading questions and thereby prejudiced the appellant.

The appellant points out that under Griffin v. California (1965), 380 U.S. 609, 85 S.Ct. 1229, 14 L.Ed.2d 106, prejudice is not presumed but that it must be established from the record that a substantial right was denied. Here, he alleges that the substantial right is the denial of a fair trial because of evidence by the State and questioning the eight-year-old victim with leading questions. State v. Watkins (1971), 156 Mont. 456, 481 P.2d 689.

The questioning of a minor child in this type of case is a most difficult task for both the prosecutor and defense counsel. The prosecutor argues that she was forced to use leading questions to elicit facts that the child had related previously. Under Rule 611(c), M.R.Evid., leading questions are allowed when necessary to develop such testimony. This Court’s opinion, Bailey v. Bailey (1979), 184 Mont. 418, 421, 603 P.2d 259, 261, sets forth an exception to the general rule against leading questions where there is a child involved. In addition, we note that the answers given by the child to the questions that are the subject of these objections were in favor of the appellant. We find no prejudice.

The judgment of the District Court is affirmed.

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


author: MR. JUSTICE SHEEHY MR. JUSTICE WEBER,

text:
    The MILLER-WOHL COMPANY, INC., Petitioner and Respondent, v. COMMISSIONER OF LABOR AND INDUSTRY, STATE OF MONTANA, and Tamara L. Buley, Respondents and Appellants.
    No. 84-172.
    Decided Oct. 15, 1987.
    744 P.2d 871.

      Tipp, Hoven, Skjelset & Frizzell, Richard R. Buley, Missoula, R. Scott Currey, Asst. Atty. Gen., Helena, for respondents and appellants.
    Kathleen F. Holden, Helena, for amicus curiae Montana Human Rights Com’n.
    Kathleen H. Richardson, Havre, for amicus curiae Women’s Law Section.
    Church, Harris, Johnson & Williams, Cresap S. McCracken, Great Falls, Charles Fine, Phoenix, Ariz., for petitioner and respondent.
    Patten and Renz, Billings, Joan E. Bertin, New York City, amicus curiae.
   OPINION AND ORDER

MR. JUSTICE SHEEHY

delivered the Opinion of the Court.

Miller-Wohl Company, Inc. appealed to the United States Supreme Court from our decision against it in Miller-Wohl Co., Inc. v. Com’r of Labor and Industry (Mont. 1984), [214 Mont. 238,] 692 P.2d 1243, 41 St.Rep. 2445.

On January 20, 1987, the United States Supreme Court entered the following order in the appeal:

“The judgment is vacated and the case is remanded to the Supreme Court of the State of Montana for further consideration in the light of California Federal Savings and Loan Association v. Guerra, 479 U.S _, 107 S.Ct. 683, 93 L.Ed.2d 972, (1987).
“Justice BLACKMUN, Justice STEVENS and Justice SCALIA would dismiss the appeal for want of a substantial federal question.” 479 U.S —, 107 S.Ct. 919, 93 L.Ed.2d 972.

On March 24, 1987, we issued a schedule addressed to the parties for the briefing and presentation of the remanded case.

On April 30, 1987, Miller-Wohl Co., Inc., moved to dismiss the remanded cause on the basis that it had become moot. It submitted that the remand and further proceedings before this Court were no longer necessary because “in the light of the United States Supreme Court’s decision and the anticipated time, costs, and burden of remand of proceedings before the Supreme Court of Montana and the anticipated eventual decision,” Miller-Wohl Co., Inc. had agreed to accept the Commissioner’s order. The Company conceded that it violated the Montana Maternity Leave Act, Sections 49-2-310 and - 311, MCA. The Company had further submitted payments of the net back pay and the amounts of penalty with accrued interest to the complainant via her attorney, and the amounts tendered appear to be correct.

Buley’s attorney responded to the motion to dismiss, and objected thereto, contending that Buley was entitled to attorney fees in addition to other relief. Miller-Wohl Co., Inc. answered the objection stating that no statute in this case provides for the recovery of attorney fees and without statutory authority, such attorney fees may not be awarded to Buley.

The Montana Maternity Leave Act was first adopted by the legislature in Ch. 320, Laws of Montana (1975). Originally, the statute defining unlawful acts of employers with respect to women’s pregnancy was codified in Section 39-7-203, MCA; the right to reinstatement following pregnancy-related leave of absence was set forth in Section 39-7-204, MCA; and complaints of violations, of Section 39-7-203, and Section 39-7-204, MCA, were to be handled through the Commissioner of Labor and Industry.

Under Section 39-7-207, MCA, also adopted in 1975, the Commissioner was empowered to make findings of fact and to order the employer to reinstate the complainant, to pay to the complainant “the damages resulting from the violation.” No other provision appears in the related statutes allowing attorney fees to a successful complainant.

While the parties of Miller-Wohl Co., Inc. v. Com’r of Labor and Industry were in the courts, the legislature, in Ch. 285, Laws of Montana (1983), transferred the functions of the Commissioner of Labor and Industry regarding maternity leave to the Commission for Human Rights. Sections 39-7-203 and 39-7-204, MCA, were re-codified and now appear respectively as Sections 49-2-310 and 49-2-311, MCA. Because violations of the Montana Maternity Leave Act are now codified along with other provisions related to human rights, in a contested case, the prevailing party may bring an action in District Court for attorney fees under Section 49-2-505(4), MCA, and if the matter is eventually reviewed in the District Court, that court may award the prevailing party reasonable attorney fees under Section 49-2-509(3), MCA.

Thus the law now allows a successful complainant for a violation of the Montana Maternity Leave Act to recover attorney fees for proceedings before the Commissioner of Human Rights, whereas the former law did not provide for attorney fees unless they were included within the word “damages” in former Section 39-7-207, MCA.

We have consistently held that attorney fees are not an element of “damages” in interpreting a specific statutory grant or contract provision. Chagnon v. Hardy Construction Co. (Mont. 1984), [208 Mont. 420,] 680 P.2d 932, 41 St.Rep. 441; Martin v. Crown Life Insurance Company (1983), 202 Mont. 461, 658 P.2d 1099; Foy v. Anderson (1978), 176 Mont. 507, 580 P.2d 114.

However, this Court has recognized its power under equitable principles to grant complete relief by way of attorney fees. Foy v. Anderson, (1978) 176 Mont. at 511, 580 P.2d at 116-117; Holmstrom Land Co. v. Hunter (1979), 182 Mont. 43, 48, 595 P.2d 360, 363. Here justice, equity and good conscience dictate that Miller-Wohl Co., Inc. should bear the costs incurred by Tamara Buley in presenting her claims in court against Miller-Wohl Co., Inc. We are fortified in this conclusion by the action of the legislature in 1983 establishing as a matter of public policy that prevailing complainants in pregnancy discrimination cases may be awarded attorney fees and costs in addition to other remedies provided by law. The protracted history of her claim over an eight year period demands an award of attorney fees and costs. Tamara Buley has been led by Miller-Wohl Co., Inc. through a succession of administrative, federal court and state court procedures since her discharge for pregnancy on August 27, 1979. Under the statutes then existing, she filed a complaint against Miller-Wohl Co., Inc. with the Montana Commissioner of Labor and Industry. She claimed before the Commissioner that Miller-Wohl Co., Inc. had violated the Montana Maternity Leave Act. Miller-Wohl Co., Inc. then brought suit against the Commissioner and Tamara Buley in the United States District Court for the District of Montana asking the federal court to declare Montana’s statutes invalid and to enjoin their enforcement. The United States District Court issued a temporary restraining order for a brief period, but then permitted the state agency to proceed. On October 3, 1980, the Commissioner determined through an administrative order that Miller-Wohl Co., Inc. had violated the Montana Maternity Leave Act by dismissing Tamara Buley, and that she was entitled to back pay and penalties in the amount of $6,517.60. The United States District Court reviewed the Commissioner’s findings and concurred in the Commissioner’s conclusions. Miller-Wohl Co., Inc. appealed this decision to the United States Court of Appeals for the Ninth Circuit. There, in 1982, the Court of Appeals for the Ninth Circuit dismissed the action, determining that no federal question had been presented.

Miller-Wohl Co., Inc. then returned to the state court for a review of the Commissioner’s decision. On February 8, 1984, the District Court for Cascade County reversed the Commissioner’s order. An appeal was brought to this Court and our decision eventually was reported as above stated. Miller-Wohl Co., Inc. then appealed our decision to the United States Supreme Court with resulting vacation of judgment as we above set forth.

Now finally, in anticipation of the eventual result, Miller-Wohl Co., Inc. has conceded that it violated the Montana Maternity Leave Act and has tendered to the attorney for Tamara Buley all of her damages, penalties and interest. If the amount of attorney fees claimed by her attorney for these protracted litigations is proper, her total attorney fees and costs would practically eat up whatever judgment she might obtain here.

We therefore determine that this is one of those rare cases where circumstances demand that this Court order the payment of attorney fees to the prevailing party, and we so order.

ACCORDINGLY, proceeding on the order of remand from the United States Supreme Court, we reinstate the judgment contained in our Opinion reported in Miller-Wohl Co., Inc. v. Com’r of Labor and Industry (Mont. 1984), [214 Mont. 238,] 692 P.2d 1243, 41 St.Rep. 2445; and this cause is remanded to the District Court of the Eighth Judicial District, in and for Cascade County, Judge Joel G. Roth presiding, for the determination of appropriate attorney fees and costs to be awarded to Tamara Buley.

DATED this 15th day of October, 1987.

s/John C. Sheehy, Justice

s/John Conway Harrison, Justice

s/R.C. McDonough, Justice

s/William E. Hunt, Justice

MR. JUSTICE WEBER,

dissenting:

I respectfully dissent from the award of attorney fees.

On the basis of “justice, equity and good conscience,” the majority exempts Ms. Buley from the general rule that attorney fees may not be awarded absent statutory authority. The Court cites as precedent Foy v. Anderson (1978), 176 Mont. 507, 580 P.2d 114, and Holmstrom Land Co. v. Hunter (1979), 182 Mont. 43, 595 P.2d 360.

In Foy, the equitable power of the Court was invoked to award attorney fees to defendant Eggan because plaintiff had no basis for bringing defendant Eggan into the lawsuit. Foy, 580 P.2d at 117. In awarding attorney fees in Holmstrom, the Court stated, “Just as Anderson had no reason or justification for dragging Eggan into the lawsuit . . . Holmstrom had no reason to sue Hunter.” Holmstrom, 595 P.2d at 363.

Had I sat on the Court at the time Foy and Holmstrom were decided, I would have joined the dissents of Mr. Chief Justice Haswell. In his dissent in Foy, 580 P.2d at 117, Chief Justice Haswell stated,

“The majority recognize that attorney fees cannot be awarded to the prevailing party in the absence of statute or contract. Here there is neither. The award is justified on the basis of making the prevailing party whole and granting complete relief. This justification is equally applicable to any defendant who is sued, hires an attorney, and ultimately prevails.
“In my view, this decision constitutes a sharp break from existing law . . .
“Substantial arguments can be made for and against awarding attorney fees to the prevailing party in a lawsuit. In my view this is a matter of public policy to be resolved by the legislature. To date the legislature has not seen fit to grant attorney fees to a prevailing defendant (except in certain instances not pertinent to this case, e.g. eminent domain and reciprocal rights statutes).
“I would adhere to existing law and require statutory authorization for an award of attorney fees in the absence of contract.”

The rationale stated by the majority in Foy and Holmstrom is absent here because this is not a case where the plaintiff improperly dragged a defendant into a lawsuit. The primary reason for the award of attorney fees here appears to be that Ms. Buley’s total attorney fees and costs would practically eat up her judgment. That seems to suggest an equitable principle that attorney fees should be awarded whenever the fees approach the amount of the judgment granted to a party.

I agree that it is unfortunate that the plaintiffs judgment could be eaten up by attorney fees. If I were a legislator, that might be a sufficient reason for me to vote in favor of legislation. However, notwithstanding the meeting of a number of legislatures since Foy and Holmstrom, the legislature has not adopted any specific legislative standard which would allow the award of attorney fees in this case. No standards or boundaries are set forth in the majority opinion. Apparently every zealous advocate now must argue in district court and in this Court for the use of equitable authority to award attorney fees to his prevailing client. I find myself unable to suggest which cases should require an award of attorney fees under the rule of the majority.

I would deny the plaintiff’s request for attorney fees and leave the changing of standards to the legislature.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICE GULBRANDSON concur in the foregoing opinion.

FOOTNOTES

      . The United States Supreme Court assessed costs of $200.00 against the Commissioner and Tamara Buley in vacating our judgment.

      . The estimate of Miller-Wohl Co., Inc. that it could anticipate the eventual result is not surprising. Try as we may, we cannot discern the reasons why the United States Supreme Court vacated our decision in the light of California Federal Savings and Loan Association v. Guerra, supra. If anything Guerra supports our decision that neither the Civil Rights Act nor the amendment under the Pregnancy Discrimination Act pre-empted the Montana Maternity Leave Act. The United States Supreme Court majority offered no other reason for vacating the judgment in favor of the Commissioner and Buley.


text:
    GOLD RESERVE CORPORATION, a Montana corporation, Petitioner and Appellant, v. VANCE D. McCARTY, G.W. McCarty and Jeanne McCarty, joint tenants with rights of survivorship; K.L. Bates; Silver Seal, Inc., a corp.; Sonja McCandless; and Richard Peters, Respondents and Respondents.
    No. 87-88.
    Submitted on Briefs July 14, 1987.
    Decided Oct. 15, 1987.
    744 P.2d 160.

      Murray, Kaufman, Vidal & Gordon, Lee Kaufman, Kalispell, for petitioner and appellant.
    Garrity, Keegan & Brown, G. Steven Brown, Hughes, Kellner, Sullivan & Alke, John Alke, Helena, for respondents and respondents,
   MR. JUSTICE GULBRANDSON

delivered the Opinion of the Court.

Appellant appeals an order of the District Court of the First Judicial District in and for Lewis and Clark County dismissing a petition filed in that court for determination of the value of its corporate shares. We reverse.

On August 6, 1986, Gold Reserve Corporation (GRC), appellant, filed a petition for valuation of shares of the stock owned by dissenting shareholders who were adverse to a merger-exchange between GRC and Pegasus Gold, Inc. GRC is a Montana corporation with its corporate offices located in Spokane, Washington. GRC mailed notice of the transfer to shareholders. A number of the shareholders, respondents named in this action, dissented to the activity and made demands for payment. GRC paid respondents $1.3125 plus interest per share but the respondents demanded supplemental payment in the amount of $3.00 and $5.00 per share. Section 35-1-812(8), MCA, allows a corporation to petition a court for determination of fair value within sixty days after receiving demand for payment from a dissatisfied shareholder. GRC received the demands for payment on June 9, 1986 and June 10, 1986. Sometime during the month of July, 1986, John Layman, counsel for GRC, contacted attorney Lee Kaufman of Kalispell, Montana, to assist in the representation of GRC. Kaufman stated in affidavits that he assisted in some of the preliminary drafting of the petition but it was agreed that the final draft would be prepared by Layman at the Spokane Offices. Layman completed the document, signed his name, and then typed in Kaufman’s name and the name and address of Kaufman’s firm. Allegedly due to both attorneys’ concern for timely filing, the petition was sent to the clerk of court, first Judicial District, without Kaufman’s signature.

Kaufman testified at a later hearing to alter or amend the order that he had reviewed the petition with Layman over the telephone and that he directed Layman on how to file the petition. The petition was timely filed on August 6,1986. The statute of limitations on the sixty-day reply expired on August 8, 1986. On September 9, 1986, G. Steven Brown, who represented respondents Richard Peters and Sonja McCandless, contacted Kaufman to get an extension of time in which to file a response. Kaufman told Brown he would have to get permission from Layman. On September 23, 1986 and September 25, 1986, respondents filed motions to dismiss on the ground the petition lacked a signature of a Montana attorney. Kaufman was made aware of the motions on September 29, 1986. He traveled to Helena on October 1, 1986 and affixed his signature to the petition.

On December 24, 1986, the District Court granted the motion to dismiss after a hearing on the matter.

GRC made a motion to alter or amend the order pursuant to Rules 59(g) and 60(b), M.R.Civ.P., but following a hearing on February 10, 1987, this motion was denied. In an extensive memorandum, the trial court judge held that the filing of the original petition by the Spokane attorney with only his signature and the typed-in name and firm of the Montana counsel did not meet the requirements of Rule 11, M.R.Civ.P., and that a pleading must be signed by an attorney authorized to practice law. The trial judge determined that Kaufman and Layman intentionally did not have Kaufman sign the petition and therefore did not fall within the exception of Rule 11 allowing subsequent signings of documents filed without a signature when the lack of signature is brought to the attorney’s attention.

The facts and history of this case present a clear question of whether a Montana attorney’s subsequent signature on a filed petition, placed there after the statute of limitations expires, is sufficient under Rule 11, M.R.Civ.P. Did the trial judge abuse his discretion in granting respondent’s motion to dismiss and denying GRC’s motion to alter or amend his judgment?

This Court has held that determinations concerning granting motions to dismiss are left to the discretion of the trial court and this Court will not interfere absent a showing of abuse of discretion. Lords v. Newman (Mont. 1984), [212 Mont. 359,] 688 P.2d 290, 292-294, 41 St.Rep. 1793, 1795-1797.

The relevant portion of Rule 11, M.R.Civ.P. reads as follows:

“If a pleading, motion, or other paper is not signed, it shall be stricken unless it is signed promptly after the omission is called to the attention of the pleader or movant.” (Emphasis added.)

Kaufman was made aware that respondents objected to the form of GRC’s petition on Monday, September 29, 1986. By Wednesday, October 1, 1986, the petition was signed by Kaufman. Although the petition was not signed by Kaufman on August 6, 1986, it was filed within the time required.

The District Court held that Kaufman could not rely on the express language of Rule 11, M.R.Civ.P., because the omission by Kaufman and Layman was “knowing and calculated.” Kaufman and Layman had discussed how the petition was to be filed so they did not miss the August 9,1986 and August 10, 1986 deadlines. The trial court held that because Kaufman and Layman deliberately did not comply with Rule 11, M.R.Civ.P., they could not rely on the Rule’s express exception allowing late signatures. The trial court judge held that for an omission of a signature to fall within the exception the lack of signature must be “inadvertent.” We find this reading of Rule 11 too strict and not in compliance with the policy of law favored in Montana.

“We adhere to our rule that this Court does not favor defaults, but rather, favors an adjudication on the merits whenever possible.”

Big Springs v. Blackfeet Tribe (1978), 175 Mont. 258, 573 P.2d 655, 658-659.

The gravamen issue raised in this case requires this Court to interpret Rule 11, M.R.Civ.P. The rule is identical, with recent amendments, to Rule 11 of the Federal Rules of Civil Procedure. Although we have not specifically made a determination as to the precise language of Rule 11 involved in this case, Rule 11, F.R.Civ.P., has been interpreted by numerous authorities. The Advisory Committee notes to the 1983 Amendment to Rule 11 state:

“The court, however, retains the necessary flexibility to deal appropriately with violations of the rule. It has discretion to tailor sanctions to the particular facts of the case . . .”

We find United States District Judge William W. Schwarzer’s article, “Sanctions Under the New Federal Rule 11 — A Closer Look” (1985), 104 F.R.D. 181, helpful on this issue:

“[R]ule 11 is not intended to increase the cost of litigation by requiring review of papers by an additional set of lawyers. What the rule does require is that the lawyer who elects to sign a paper take responsibility for it, even if that responsibility is shared. Where control of the litigation rests with other lawyers, therefore, local counsel may be well advised to let one of those lawyers sign papers to be filed.
“Even if the paper is signed by out-of-state counsel, however, the presence of the name of local counsel or his firm on the paper raises an inference that he has authorized or at least concurred in its filing. It would he difficult for a lawyer to disclaim all responsibility for a paper bearing his name. Rule 11 may therefore make it advisable for attorneys acting as local counsel to consider the extent to which they can perform the role of a passive conduit consistent with the responsibilities the rule imposes.”

Schwarzer, supra, 104 F.R.D. at 186.

It is clear from the record testimony and affidavits filed by Layman and Kaufman that GRC’s petition should stand. Both attorneys agreed the petition should be filed in a manner to avoid an untimely filing. Both attorneys agreed that by signing the petition they were bound to the sanctioning power of the court. And most importantly, it is clear by Kaufman’s later signing, promptly after he was made aware of objection by defense counsel, that he was complying with the exception of Rule 11, M.R.Civ.P., allowing late signatures.

There is no requirement in Rule 11, M.R.Civ.P., that the failure to sign be “inadvertent” as the trial court stated. Defendants were placed on notice as to Montana counsel by the clear indication of Lee Kaufman’s name and firm name printed on the petition. Further, Kaufman’s later adoption of this signature was similar to the adoption which occurred in Pavlak v. Duffy (D.C. Conn. 1969), 48 F.R.D. 396, in which the court found sufficient compliance with Rule 11, F.R.Civ.P In Pavlak, a motion to dismiss was made by defendant because a submitted complaint was not signed by a member of the bar of the United States District Court. The complaint was signed by the plaintiff and a non-member attorney of the District Court Bar. At the hearing on the motion, the plaintiff was represented by an admitted member of the District Court Bar who was named as co-counsel. This admitted attorney “ratified and adopted” the signature of the non-admitted attorney and the court stated it would not, therefore, grant the motion to dismiss. Pavlak is similar enough to this situation, along with a plain reading of Rule 11, M.R.Civ.P., to permit us to find there was sufficient compliance with the Rule in this case.

This holding is not to be construed as giving attorneys the ability to escape responsibility by not signing pleadings. The better practice under the facts of this case would have been for some arrangement whereby both attorneys could have signed the GRC petition. But due to the subsequent signing by Kaufman and clear adoption of the petition as his own work, we hold there was sufficient compliance with Rule 11, M.R.Civ.P., to deny a motion to dismiss.

The order granting the motion to dismiss is reversed and this case is remanded to the District Court for the entry of an order denying the motion to dismiss.

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