author: JUSTICE McDONOUGH JUSTICE TRIEWEILER,

text:
    PETER R. QUIRIN and PATRICIA F. QUIRIN, husband and wife, Plaintiffs and Respondents, v. THOMAS A. WEINBERG and CAROLYN J. WEINBERG, Defendants and Appellants, and COUNTY OF YELLOWSTONE, a Political Subdivision of the State of Montana, Defendant and Respondent. THOMAS A. WEINBERG and CAROLYN J. WEINBERG, Defendant, Third-Party Plaintiffs and Appellants, v. THE STATE OF MONTANA and DELBERT WALTER and CAROL WALTER, Third-Party Defendants and Respondents.
    No. 91-300.
    Submitted on Briefs February 6, 1992.
    Decided April 15, 1992.
    49 St.Rep. 331.
    252 Mont. 386.
    830 P.2d 537.

      For Appellant: Michael J. Whalen, Whalen & Whalen, Billings.
    For Respondent: Dennis Paxinos, County Attorney; Anne Sheehy and David Hoefer, Deputy County Attorneys; Court E. Ball, Towe, Ball, Enright & Mackay; Ward Swanser, Moulton, Bellingham, Longo & Mather, Billings; Mark D. Parker, Attorney at Law, Helena.
   JUSTICE McDONOUGH

delivered the Opinion of the Court.

Third party plaintiffs, Thomas A. and Carolyn J. Weinberg (Weinberg) appeal from an order of the Thirteenth Judicial District, Yellowstone County, granting summary judgment in favor of defendant Yellowstone County and third party defendants Delbert and Carol Walter and the State of Montana. The District Court dismissed Weinberg’s negligence action against the County and the State because no duty was owed. Weinberg’s request that the District Court order specific performance of an agreement between Weinberg and Walter was dismissed because no enforceable contract was found to exist. We affirm.

Weinberg raises three issues for our review:

I. Did the District Court err in granting Yellowstone County leave to amend its motion to dismiss and leave to file an amended answer to Weinberg’s cross-claim?

II. Did the District Court err in determining that the State of Montana and Yellowstone County had no duty towards Weinberg in regards to providing accurate descriptions of the tax deed property?

III. Did the District Court err in finding that Walter and Weinberg had no enforceable contract upon which the court could order specific performance?

This action was initially filed by Peter R. and Patricia F. Quirin (Quirin) alleging that Yellowstone County acted negligently and that Weinberg had trespassed on and caused damage to his property. Quirin purchased approximately one acre of real property in Yellowstone County. Thereafter, Quirin built a house which actually rests upon adjacent property belonging to third party defendants, Delbert and Carol Walter (Walter). Quirin and Walter acknowledged that Quirin’s house actually was at least in part on Walter’s land and discussed the possibility of a land trade. The District Court notes that Quirin knew the house was on Walter’s property because in 1980 Quirin had the property surveyed; however, the survey was never recorded.

Subsequently, Quirin became delinquent on his taxes and eventually, through proceedings, a tax deed was issued to the County. There is no dispute that Yellowstone County was properly the owner of the property when Weinberg approached the County with an interest in purchasing the tax deed property. Quirin’s house was listed by the State Department of Revenue as an improvement on the tax deed property. The County Assessor’s office showed Weinberg photographs, appraisal sheets and a property description that indicated that the house was part of the tax deed property. Weinberg, believing the property to include the house and without further investigation, purchased the property for $1,500.

The next day, Weinberg talked to Walter who informed him that the house may actually rest on Walter’s property. Weinberg states that Walter told him the problem of whose property the house rested on needed to be cleared up but that in any case if there was an encroachment on Walter’s land, Walter was prepared to make a trade. Weinberg went to the ASCS office in Billings and after studying maps believed the entire house was off the property he had purchased. Weinberg went back to the assessor’s office and it was agreed that the property would be surveyed at the County’s expense. Despite the problems associated with the property, Weinberg began a remodeling project on the house.

The survey revealed the house to be completely on Walter’s property. Thereafter, Quirin filed suit against Weinberg for trespass in ’his’ house and against Yellowstone County for negligently misrepresenting what property the house rested on. Weinberg filed a cross-claim against Yellowstone County for representing that Quirin’s house was an improvement of the tax deed property when in fact it was not, and for assurances on which he relied in beginning the remodeling of the house.

In addition, Weinberg named the State of Montana as a third party defendant, alleging that the assessor, an agent of the State Department of Revenue, was negligent for failing to determine that the improvements made by Quirin were not on the property owned by him. Finally, Weinberg named Walter as a third party defendant alleging that he had agreed to make an exchange of land and should be required to go forward with such an exchange. The District Court dismissed all of Weinberg’s claims as a matter of law and Weinberg appeals.

I.

Weinberg argues that the District Court erred in granting Yellowstone County leave to amend its answer to Weinberg’s cross-claim and its motion to dismiss to include a defense of legislative immunity under § 2-9-111, MCA. Section 2-9-111, MCA, was amended by the 1991 Legislature and given retroactive application to cases not reduced to final judgment by May 24, 1991. Although the District Court’s decision pre-dates the adoption of the amended statute, the amended version is applicable to the instant case.

Under § 2-9-111, MCA(1991), a legislative body (the County in this case) is not immune from causes of action arising from the negligence of its employees. Dagel v. City of Great Falls (1991), [250 Mont. 224,] 819 P.2d 186, 48 St.Rep. 919. Therefore, under § 2-9-111, MCA, as amended, legislative immunity is not an applicable defense to Weinberg’s action. Whether or not the court properly allowed amendment of the answer and the motion to dismiss is made moot by the amendments to the immunity statute. We conclude that legislative immunity is not an applicable defense to the instant case.

II.

Weinberg next claims that the District Court erred in determining that the State of Montana and Yellowstone County had no duty towards Weinberg. Weinberg alleges that the State, through employees of the Department of Revenue, and the County through the Clerk and Recorder, breached a duty owed to Weinberg. Weinberg argues that the assessor’s office advised him that the property was owned by Yellowstone County, could be purchased at tax sale and showed him a picture of the house representing the house to be an improvement of the tax deed property.

The Clerk and Recorder is alleged to have admitted that the problem was the County’s mistake and to have informed Weinberg, after specific inquiry, that Weinberg owned the property and could begin renovations. Specifically, Weinberg argues that both the State and the County breached a duty to “act responsibly and refrain from making specific representations upon which Weinberg reasonably relied”.

Weinberg cites this Court’s statement that"... we think in general that the public has a right to rely upon the advice and actions of public employees and officials.” Chennault v. Sager (1980), 187 Mont. 455, 463; 610 P.2d 173, 177. However, Chennault involved the duty of public employees and officials to comply with statutory law regarding the disposition of public lands such that the public interest would be protected. The instant case does not involve a dispute regarding compliance with statutory requirements and disregard of the public interest. Instead, the instant case involves a claim for a private right of action.

The State is generally subject to suit and liable for its torts. Mont. Const. Art. II, Sec. 18 (1972), § 2-9-102, MCA. However, "[it] is fundamental to the law of Torts that there can be no negligence if no duty exists.” Ambrogini v. Todd (1981), 197 Mont. 111, 118, 642 P.2d 1013, 1017. Whether or not a duty exists is a question of law. When reviewing questions of law, we will determine if the trial court’s determination as to law is correct. Our review will be plenary. Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 803 P.2d 601.

Resolution of this issue requires that we determine whether a prospective purchaser of tax deed property is entitled to rely on statements made by the Assessor’s and Clerk and Recorder’s offices in regard to the property. The District Court ruled that no such entitlement existed and that a prospective purchaser must proceed on the basis of caveat emptor — let the buyer beware. We agree.

The general rule is that the doctrine of caveat emptor applies with full force against purchasers at tax sales. See 72 Am. Jur. 2d, State and Local Taxation § 1036. Long ago, we held that:

The assessment and sale of property for delinquent taxes is a proceeding in invitum. The purchaser at such sale buys at his peril, and the rule of caveat emptor applies. Larson v. Peppard (1909), 38 Mont. 128, 99 P. 136, citing Birney v. Warren (1903), 28 Mont. 64, 72 P. 293.”

These cases are still the law of the State of Montana.

To find liability in this case would make the County and/or the State a guarantor of title in tax deed proceedings. We decline to do so. The District Court held, and we agree, that:

In the transaction here, a tax sale purchase, the Court cannot mandate upon a governmental entity, a duty which would virtually require a complete title search, survey, and reassessment each time a property is sold for delinquent taxes. Such actions are the only way the government employees, whose job it is to respond to public inquiries, could provide totally accurate tax sale information and the entity could avoid liability. The burden is more pragmatically placed upon the tax sale purchaser, according to the caveat emptor doctrine, to not purchase in haste, but to make a thorough and independent investigation of the property, seeking the counsel of adjoining landowners, former owners, title insurance agents, surveyors, and other property professionals.”

Weinberg’s own affidavit makes clear that through his own investigatory measures, the very next day, he was able to determine that a problem existed and that the house probably did not lie on the tax deed property.

We conclude that the doctrine of caveat emptor applies to tax deed sales. Neither the County nor the State have a duty entitling a tax sale purchaser to rely on information regarding the assessment, description or location of tax deed property. The District Court is affirmed.

III.

Weinberg’s final contention is that he and Walter had an enforceable contract to exchange the property that the house rests on for property that Weinberg purchased. Weinberg recognizes that an agreement to exchange land generally requires written expression to satisfy the statute of frauds. However, Weinberg relies on § 30-11-111, MCA, and the court’s power to specifically enforce an agreement in case of part performance.

Section 30-11-111, MCA, provides:

Contract for sale of real property. No agreement for the sale of real property or of any interest therein is valid unless the same, or some note or memorandum thereof, be in writing and subscribed by the party to be charged or his agent thereunto authorized in writing; but this does not abridge the power of any court to compel the specific performance of any agreement for the sale of real property in case of part performance thereof.

(Emphasis added.)

[5] When reviewing a motion for summary judgment, all reasonable inferences that may be drawn from the offered proof are to be drawn in favor of the party opposing the motion. Cereck v. When reviewing a motion for summary judgment, all reasonable inferences that may be drawn from the offered proof are to be drawn in favor of the party opposing the motion. Cereck v.

The District Court ruled that discussions regarding land trade were insufficient to create a contractual obligation. The court ruled that there was insufficient evidence of any consideration moving from Weinberg to Walter. At best, the court held that Walter may have anticipated contracting in the future. Furthermore, the District Court held that while initiation of the remodeling project was “some” evidence of Weinberg’s part performance, there was no evidence or indicia of what the parties agreed to do and the terms of their agreement.

The sufficiency of acts to constitute part performance can be decided as a matter of law. Schwedes v. Romain and Mudgett (1978), 179 Mont. 466, 587 P.2d 387. In Schwedes we distinguished between acts which truly constitute part performance and those merely undertaken in “contemplation of eventual performance.” To be an act sufficient to constitute part performance, we held the act “must be unequivocally referable to [the] contract.” Schwedes, 179 Mont. at 472.

We have held that when possession is taken in pursuance of a contract, followed by the making of valuable improvements, there is a sufficient part performance. Hogan v. Thrasher (1925), 72 Mont. 318, 233 P. 607. We have further held that the statute of frauds cannot be enforced where following an agreement a “buyer has made an irretrievable change in position, or the defendant has secured an unconscionable advantage or inflicted an unjust and unconscionable loss upon the plaintiff.” Bolz v. Meyers (1982), 200 Mont. 286, 298, 651 P.2d 606, 612. However, these cases both involved clear and specific agreements. The question remains in the instant case of whether or not a clear and specific agreement was ever entered.

Section 27-1-412(5), MCA, states that “an agreement the terms of which are not sufficiently certain to make the precise act which is to be done clearly ascertainable” cannot be specifically enforced. An agreement to agree to terms in the future is not an enforceable agreement whereby specific performance will be granted. Steen v. Rustad, 132 Mont. 96, 313 P.2d 1014. The Court, in Steen, stated:

It is of course well-settled that a contract to be specifically enforceable must be complete and certain in all essential matters included within its scope. Nothing must be left to conjecture or surmise, or be so vague as to make it impossible for the court to glean the intent of the parties from the instrument, or the acts sought to be enforced. (Citations omitted.)
It is equally well-settled that absolute certainty and completeness in every detail is not a prerequisite of specific performance, only reasonable certainty and completeness being required. Those matters which are merely subsidiary, collateral, or which go to the performance of the contract are not essential, and therefore need not be expressed in the informal agreement. (Citations omitted.)

In the instant case there is a lack of evidence of any specific agreement. We agree with the District Court that no inference can be drawn from the evidence that Walter did more than contemplate entering an agreement in the future. While it is true that Weinberg took possession of and began remodeling the house, there is a lack of evidence of any consideration passing to Weinberg upon which an agreement could be proven. Specific performance cannot be enforced against a party to a contract if he has not received adequate consideration for the contract. Section 27-1-415(1), MCA.

We conclude that Walter and Weinberg never entered an enforceable agreement. The District Court is affirmed.

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

JUSTICE TRIEWEILER,

concurring in part and dissenting in part:

I concur in Parts I and III of the majority opinion, and I concur that the State of Montana was entitled to summary judgment. However, I would not grant summary judgment to the State of Montana for the same reason that it was affirmed by the majority. I would affirm the granting of summary judgment to the State because the State’s pre-tax sale representations were not the cause of plaintiffs’damages.

Subsequent to the tax sale, plaintiffs learned that the Quirin house was not actually on the Quirin property. At that point, they had a right to rescind the purchase that they made at the tax sale. The fact that they went ahead and incurred expense to make improvements to the Quirin house was not because of representations made by the State prior to the sale, it was because of representations made by Delbert Walter and officials in the County Clerk and Recorder’s office that the problem would be cleared up and Weinbergs could make the improvements they felt necessary before occupying the house.

I dissent from that portion of Part II of the majority opinion which affirms summary judgment for Yellowstone County. I agree that the rule of caveat emptor normally applies to the purchase of property at a sale for delinquent taxes. I also agree that the County had no duty to correct the erroneous property description prior to the sale, and no duty to clear up the problem after the sale. However, in this case, unlike the usual situation, the County assumed that duty when it made affirmative representations to the Weinbergs that it was their property in spite of the property line discrepancy; the County would take care of the problem; and the Weinbergs could proceed to make the improvements they felt were necessary to occupy the house.

The Restatement (Second) of Torts § 552, provides:

One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by the justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.

A claim for negligent misrepresentation is established when a plaintiff can show:

(1) that the defendant supplied false information for the guidance of plaintiff in his business transaction;
(2) that the plaintiff justifiably relied upon such information; and
(3) that the defendant failed to exercise reasonable care or competence in obtaining or communicating such information.”

See Bottrell v American Bank (1989), 237 Mont. 1, 19, 773 P.2d 694; Brown v. Merrill Lynch, Pierce, Fenner, & Smith, Inc. (1982), 197 Mont. 1, 12, 640 P.2d 453, 458.

When the employees of the Yellowstone County Clerk and Recorder’s office made these affirmative representations, they assumed a duty to act reasonably. Whether or not their representations were reasonable, and whether or not the other necessary elements of negligent misrepresentation were present, were issues of fact for a jury, or the district court in the event that a jury had been waived. I agree with the New York Court of Appeals when, in Lindlots Realty Corporation v. Suffolk County (1938), 15 N.E.2d 393, it distinguished the duty normally owed by a county at a tax sale from the duty owed when affirmative representations are made. In that case, the court stated:

Nor does the rule of caveat emptor apply. The county had the option to sell this property by bargain and sale deed, with the mere recital that it was acquired at a tax sale and without other representation. In such case, the doctrine of caveat emptor would apply. The defendant, however, through its officer, chose to obtain such advantages as it could by selling this property through additional representations which turned out to be false. In such case the doctrine of caveat emptor obviously would not apply.

Lindlots Realty, 15 N.E.2d at 396.

I would reverse the District Court’s order granting summary judgment to Yellowstone County and remand this case to the District Court for a factual determination of whether the County’s representations to the Weinbergs were negligent; whether they were false; whether the Weinbergs reasonably relied on those representations; and whether the Weinbergs suffered damages as a result of those representations.

JUSTICE HUNT concurs in the foregoing concurrence and dissent of JUSTICE TRIEWEILER.


source: Caselaw Access Project

author: JUSTICE TRIEWEILER

license: Public Domain

text:
    M. E. DAVEY, Plaintiff and Appellant, v. EDWARD M. NESSAN, JOAN E. NESSAN, DONALD E. DUBEAU and CONNECTICUT MUTUAL LIFE INSURANCE COMPANY, a Connecticut corporation, Defendants, Respondents and Appellants. HORTON B. KOESSLER, as Personal Representative of the Estate of HORACE H. KOESSLER, Deceased, Plaintiff and Appellant, v. EDWARD M. NESSAN, DONALD E. DUBEAU, and CONNECTICUT MUTUAL LIFE INSURANCE COMPANY, a Connecticut corporation, Defendants, Respondents and Appellants.
    No. 91-205.
    Submitted on Briefs December 4, 1991.
    Decided April 9, 1992.
    49 St.Rep. 294.
    252 Mont. 397.
    830 P.2d 92.

      For Appellants: David A Veeder, Veeder and Broeder, for Davey and Koessler; David R. Paoli, Edwards and Paoli, Billings, for Dubeau.
    For Respondents: W. Anderson Forsythe, Moulton Law Firm, for Connecticut Mutual; Vicki W. Dunaway, Billings for Nessan.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

On February 5,1988, M.E. Davey filed a complaint against Edward M. Nessan, Joan E. Nessan, Donald E. DuBeau, and Connecticut Mutual Life Insurance Company in the Sixteenth Judicial District Court in Rosebud County. On the same day, Horton B. Koessler filed a complaint in the name of Horace H. Koessler in the same court and against the same parties, omitting only Mrs. Nessan. DuBeau and Nessan answered and asserted a cross-claim against Connecticut Mutual. On December 29,1990, the District Court granted summary judgment for Connecticut Mutual, dismissed all of the claims against it, and entered judgment in its favor. All of the other parties appeal. We affirm.

The issue on appeal is whether the District Court erred when it ruled that all claims against Connecticut Mutual failed due to the absence of any contractual obligation by Connecticut Mutual to assume the debts of DuBeau and Nessan.

Davey and Koessler owned contiguous farms adjacent to the Candee farm in Rosebud County. The Candee property was a dry-land farm, but the Davey and Koessler farms had center-pivot irrigation.

DuBeau and Nessan bought the Candee property on a contract for deed in 1980. DuBeau and Nessan then began planning to buy the Davey and Koessler properties under contracts for deed with the intention of operating all three farms as a unit. Their plan envisioned relocating the center-pivot irrigation system on the Davey and Koessler farms to the Candee farm, and replacing it with a newer lineal irrigation system.

On November 12, 1980, Connecticut Mutual offered to loan Du-Beau and Nessan more than $1.8 million in order to make the necessary down payments and capital investments. Connecticut Mutual offered DuBeau and Nessan a favorable interest rate in exchange for an option to acquire a one-half interest in the property if the venture proved to be profitable. In turn, Connecticut Mutual took a security interest in DuBeau’s and Nessan’s pin-chasers’ interest in the three contracts for deed. DuBeau and Nessan accepted Connecticut Mutual’s offer.

Thus, in the development of this project DuBeau and Nessan incurred two different types of indebtedness: (1) their underlying debts to Candee, Davey, and Koessler on the three contracts for deed; and (2) their subsequent debt to Connecticut Mutual.

In order to protect its security interest in DuBeau’s and Nessan’s purchasers’interest against foreclosure, Connecticut Mutual insisted on the right to make payments to Candee, Davey, and Koessler in the event of default by DuBeau and Nessan. DuBeau and Nessan subsequently entered into written agreements to this effect with Davey and Koessler. Specifically, Davey and Koessler granted Connecticut Mutual the right, “at its election and without obligation,” to cure any default by DuBeau and Nessan.

DuBeau and Nessan immediately experienced cash flow problems with the project. DuBeau and Nessan had to borrow more money from Connecticut Mutual in order to make the 1982 payments on the underlying contracts for deed. This happened again in 1983. Later in 1983, DuBeau and Nessan advised Connecticut Mutual that the cash flow situation was not improving and that they intended to default on both the land contracts and their contract with Connecticut Mutual.

DuBeau and Nessan offered Connecticut Mutual a deed in lieu of foreclosure but Connecticut Mutual insisted on judicial foreclosure. On April 23, 1984, DuBeau and Nessan signed a settlement agreement with Connecticut Mutual in which they agreed to foreclosure by default. Connecticut Mutual waived its right to a deficiency judgment. The settlement agreement did not provide for any assumption by Connecticut Mutual of DuBeau’s and Nessan’s debt on the three underlying contracts for deed. Connecticut Mutual bought the property at the foreclosure sale on September 12, 1984. On November 6, 1984, DuBeau and Nessan gave Connecticut Mutual a quitclaim deed to their remaining interest in the three parcels of land.

Connecticut Mutual made payments on the underlying contracts for deed until July 1987, when it notified Davey and Koessler that it intended to tender the property back to them. Davey and Koessler accepted possession and then filed the present lawsuit against Du-Beau, Nessan, and Connecticut Mutual.

Davey and Koessler alleged that Connecticut Mutual had assumed the debt of DuBeau and Nessan. They based this theory on the allegations that: (1) the quitclaim deed amounted to an assignment of all of DuBeau’s and Nessan’s right, title, and interest in the property; and (2) Connecticut Mutual’s conduct in making payments on the contracts for deed from 1984 through 1987 indicated its intent to assume the underlying debt. Davey and Koessler asserted that by failing to in fact assume the debt, Connecticut Mutual breached its contract and also breached the implied covenant of good faith and fair dealing.

DuBeau and Nessan asserted cross-claims against Connecticut Mutual in which they, too, sought to hold it hable for the underlying debt on the contracts for deed. DuBeau and Nessan based these cross-claims on the allegation that Connecticut Mutual had intended to acquire outright ownership of the property from the very beginning of the operation and that the negotiations leading up to the 1984 settlement agreement had, therefore, contemplated that Connecticut Mutual would be assuming the underlying debt on the three contracts for deed. DuBeau and Nessan asserted that these facts supported actions for breach of contract and breach of the implied covenant of good faith and fair dealing.

Connecticut Mutual moved for summary judgment on all of the claims against it. It argued that it acquired only an equity interest at the foreclosure sale, that the quitclaim was inoperative to transfer DuBeau’s and Nessan’s underlying debt, and that the parol evidence rule barred any evidence about the negotiations leading up to the 1984 settlement agreement. The District Court granted summary judgment for Connecticut Mutual on all of the claims against it. All of the other parties appeal from this summary judgment order.

The issue on appeal is whether the District Court erred when it ruled that all claims against Connecticut Mutual failed due to the absence of any contractual obligation by Connecticut Mutual to assume the debts of DuBeau and Nessan. Because the appellants take very similar positions on appeal, we discuss the Davey and Koessler claims together with the DuBeau and Nessan claims.

I

THE BREACH OF CONTRACT ACTIONS

All of the appellants argue that Connecticut Mutual assumed a contractual duty to make payments on the underlying contracts for deed, either by virtue of the quitclaim deed from DuBeau and Nessan or by virtue of Connecticut Mutual’s conduct in making those payments from 1984 to 1987. They concede that Connecticut Mutual never expressly agreed in writing to assume the underlying debt. In order to succeed, then, they must show that in some other way Connecticut Mutual assumed the contractual obligations of DuBeau and Nessan.

An “assignment” of contractual rights is not the same as an “assumption” of contractual obligations. All of the parties agree that generally “[t]he assignee of an executory contract does not, merely by accepting the assignment, or by succeeding to the property subject to the contract, assume the obligations imposed by the contract on the assignor.” Thompson v. Lincoln Nat. Life Ins. Co. (1943), 114 Mont. 521, 527-28, 138 P.2d 951, 954. The parties disagree about whether an assignment actually occurred in this transaction; Connecticut Mutual argues that neither the foreclosure sale nor the quitclaim deed operated as an assignment. Because this case comes to us on appeal from an order of summary judgment we assume, without deciding, that an assignment occurred. We turn to the question of whether there was also an assumption.

The appellants argue that although an assumption must typically be expressed, in the proper circumstances it may be implied by the conduct of the parties. They cite the following language in Thompson-.

The dissent perforce admits the undeniable rule that the assignment of a contract does not ordinarily operate to cast the contract liabilities upon the assignee in the absence of an assumption thereof by him. The dissent further says, what is obvious, that the assignee may assume the assignor’s liabilities, that under certain circumstances and conduct the law will imply such assumption, and that he may not enforce the contract without performing its terms. [Emphasis added.]

Thompson, 138 P.2d at 955-56.

In Thompson, the buyer’s estate sued the seller’s assignee for damages resulting from the assignee’s conveyance of the subject property to a third party without protecting the original buyer’s rights. The instrument of assignment was silent on the question of assumption of liabilities. The buyer argued that the assignee’s conduct gave rise to an assumption by implication. Thompson, 138 P.2d at 953-54.

The majority of this Court, after stressing the general rule that the assignee is not bound in the absence of an express assumption, Thompson, 138 P.2d at 954, suggested that in the appropriate case an assumption might arise by implication, Thompson, 138 P.2d 956. However, the majority concluded that under the facts of that case no implied assumption had occurred. Thompson, 138 P.2d at 956. Thus, the suggestion in that case that an assignee may assume contractual obligations by implication was purely dicta. We have never applied it in subsequent real estate cases to find an assumption of the assignor’s contractual liabilities.

The appellants also cite Massey-Ferguson Credit Corporation v. Brown (1977), 173 Mont. 253, 567 P.2d 440, for the proposition that an assumption of contractual duties may be implied. Massey-Ferguson was not a real estate case; it involved a sale of goods that was subject to Article 9 of the Uniform Commercial Code. That distinction is significant.

The American Law Institute has recognized that real estate transactions are qualitatively different from other transactions:

(2) Unless the language or the circumstances indicate the contrary, the acceptance by an assignee of... an assignment operates as a promise to the assignor to perform the assignor’s unperformed duties, and the obligor of the assigned rights is an intended beneficiary of the promise.
Caveat: The Institute expresses no opinion as to whether the rule stated in Subsection (2) applies to an assignment by a purchaser of his rights under a contract for the sale of land. [Emphasis added.]

Restatement (Second) of Contracts § 328 (1979). Professor Williston explained the difference as follows:

It must be conceded, however, that at least in regard to contracts for the sale of land the great majority of decisions strongly take the position that the assignee of the purchaser does not become bound to the vendor for the price in the absence of an express assumption of the duty in his contract with the assignor. The analogy to the transfer of mortgaged land has doubtless been influential. [Emphasis added.]

3 Samuel Williston, A Treatise on the Law of Contracts § 418A at 109 (Walter H.E. Jaeger, ed., 3d ed. 1960).

The Wisconsin Supreme Court elaborated on this rule in Peterson v. Johnson (1972), 201 N.W.2d 507. The court said:

The cases which analyze the foundations for the rule base their holding on the lack of contractual privity between the vendor and the assignee of the vendee’s interest. In the case of a bare assignment, there is privity of estate between the vendor and the assignee but not of contract. The obligation to pay is not a covenant running with the land. It is a personal obligation based on contract and enforceable only against those who have a contractual obligation to pay the purchase price.
In order for an assignee [of a land contract] to be personally liable for a deficiency judgment, it is necessary either that he negotiate a contract directly with the vendor, producing a novation, or that he enter into an express agreement with the purchaser assuming the contractual obligation to pay. Under the second alternative, while there would be no privity of contract with the vendor in the common law sense, the assignee would be liable to the vendor under the third-party beneficiary theory.

Peterson, 201 N.W.2d at 509.

We agree that there can be no implied assumption of contractual liabilities in real estate transactions. Because of the complexity of these transactions, the large amounts of money that are typically involved, and the customary presumption that the only obligations are those which have been expressed, a rule that would permit the inadvertent assumption of debt is inappropriate. The appellants have conceded that Connecticut Mutual did not expressly assume the underlying debt, and we reject their theory that an assumption may arise by implication. Thus, we conclude as a matter of law that Connecticut Mutual had no contractual obligation to continue to make payments on the underlying contracts for deed.

We hold that the District Court did not err when it granted summary judgment to Connecticut Mutual on all of the breach of contract claims lodged against it.

II

THE BAD FAITH ACTIONS

The appellants also pled bad faith claims against Connecticut Mutual. Under Story v. City of Bozeman (1990), 242 Mont. 436, 450-51, 791 P.2d 767, 775-76, bad faith is actionable in an ordinary contract action. However, we have already concluded that there was no contract between Davey-Koessler and Connecticut Mutual. Therefore, there was no implied covenant of good faith and fair dealing between Davey-Koessler and Connecticut Mutual, and accordingly no action for breach of the covenant.

DuBeau and Nessan, however, did have a contract with Connecticut Mutual in the form of the 1984 settlement agreement. They cite Nicholson v. United Pacific Insurance Co. (1985), 219 Mont. 32, 42, 710 P.2d 1342, 1348, for the proposition that a person breaches the implied covenant of good faith and fair dealing by acting “arbitrarily, capriciously, or unreasonably.” A majority of this Court overruled that aspect of Nicholson in Story, when it held that the conduct required by the implied covenant of good faith and fair dealing is “honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.” Story, 791 P.2d at 775. However, the Dubeau-Nessan bad faith claim fails under either standard.

Connecticut Mutual did not breach the implied covenant. It told DuBeau and Nessan it was considering taking a deed in lieu of foreclosure but then decided to proceed with strict judicial foreclosure. Although DuBeau and Nessan have complained of Connecticut Mutual’s failure to advise them specifically that it had rejected their offer of a deed in lieu of foreclosure, its insistence on strict judicial foreclosure and the terms of the 1984 settlement agreement itself was sufficient to indicate to DuBeau and Nessan that Connecticut Mutual would not be acquiring the property outright.

As the District Court explained in its memorandum and order:

It is obvious that at the time the purchase transaction was put together everyone thought that land values would continue to rise. Everyone was concentrating on the upside potential; no one was looking at the downside potential, except, perhaps the Connecticut Mutual legal department. Instead of becoming an owner in the real estate, Connecticut Mutual took an option. It never exercised the option. Instead of taking a deed in lieu, it foreclosed on DuBeau-Nessan’s purchaser’s interest and protected its interest in the subject real estate by making payments, until such time as it became apparent that it was throwing good money after bad and it would never recoup its investment. When the bottom fell out of the real estate market, and Connecticut Mutual walked away, it lost a large amount of money - its original investment, the substantial improvements to the property, as well as the annual payments it made for several years on the property. It had, however, done everything it could to protect itself against incurring further losses. It should be noted that DuBeau and Nessan were experienced, sophisticated agricultural real estate professionals and investors. They, as well as the other parties to this lawsuit, entered into these transactions upon advice of counsel. It is clear that what happened in this case is that no one anticipated the sudden drop in the prices of agricultural land and everyone got caught short. The way the transaction was structured, Connecticut Mutual could legally walk away without incurring further losses.

We agree. Connecticut Mutual merely took advantage of the structure of the transaction as established by an agreement DuBeau and Nessan executed while represented by counsel. This conduct violated neither the Nicholson “arbitrary, capricious, or unreasonable” standard, nor the Story “dishonesty or commercial unreasonableness” standard, and therefore, did not constitute bad faith.

We hold that the District Court did not err when it granted summary judgment on all of the bad faith claims lodged against it.

The order and judgment of the District Court are affirmed.

JUSTICES HARRISON, GRAY, McDONOUGH and WEBER concur.

       Mrs. Nessan was a party to the Davey contract but not the Koessler contract. Because the claims of Mr. and Mrs. Nessan in the Davey action are identical to the claims of Mr. Nessan alone in the Koessler action, references to ‘Nessan” in this opinion include the claims of Mrs. Nessan.


author: JUSTICE HUNT JUSTICE McDONOUGH,

text:
    HOLLY SUGAR CORPORATION, Plaintiff and Appellant, v. THE DEPARTMENT OF REVENUE OF THE STATE OF MONTANA; THE STATE OF MONTANA; THE COUNTY OF RICHLAND; THE TREASURER OF RICHLAND COUNTY; THE ASSESSOR OFRICHLAND COUNTY; HIGH SCHOOL DISTRICT NO. 1, RICHLAND COUNTY; DISTRICT NO. 5, RICHLAND COUNTY; BOARD OF TRUSTEES, HIGH SCHOOL DISTRICT NO. 1, RICHLAND COUNTY; BOARD OF TRUSTEES DISTRICT NO. 5, RICHLAND COUNTY; SUPERINTENDENT OF SCHOOLS, SIDNEY PUBLIC SCHOOLS; AND SUPERINTENDENT OF SCHOOLS, RICHLAND COUNTY, Defendants and Respondents.
    No. 91-108.
    Submitted on Briefs February 19, 1992.
    Decided April 9, 1992.
    49 St.Rep. 299.
    252 Mont. 407.
    830 P.2d 76.

      For Appellant: James P. Sites argued, Crowley, Haughey, Hanson, Toole and Dietrich, Billings.
    For Respondent: Phillip N. Carter argued, Koch and Carter, Sidney; David Woodgerd, Chief Legal counsel, Department of Revenue, Helena.
   JUSTICE HUNT

delivered the Opinion of the Court.

Plaintiff/appellant (hereinafter “taxpayer”) brought a declaratory judgment action in District Court pursuant to § 15-1-406, MCA, alleging that certain property taxes levied against the taxpayer were “illegally or unlawfully imposed or exceeded the taxing authority of the entity imposing the tax.” Taxpayer alleged that the requirements of § 15-10-412(9), MCA, were not satisfied by the taxing authority. The District Court did not consider the merits of taxpayer’s contention, as the court granted summary judgment for all defendants on the grounds that the statute of limitations for bringing such actions had run on the taxpayer. We reverse.

We phrase the issues before this Court as follows:

1. Did the District Court err in holding that the 90-day statute of limitations for bringing an action pursuant to § 15-1-406, MCA, began running on the date the amount of tax due was entered on the assessment book and the Department of Revenue affixed their affidavit thereto?

2. Did the District Court err in not finding that jurisdiction was present under the Uniform Declaratory Judgments Act?

The facts in this case can be briefly stated. The District Court Judge summarized the relevant facts in his Memorandum Opinion and Order as follows:

This action stems from a tax increase that was the result of a request by Richland County School Districts 1 and 5 for voter approval to exceed the limitations of 15-10-402 MCA. Resolutions calling for an election were adopted on March 13, 1989 and an election was held on April 4,1989. At the election the question was approved by the voters. Plaintiff paid the portion of its taxes dealing with the increased school levy under protest on November 30, 1989 and filed this action January 26, 1990.

The total amount of taxes in dispute is $169,915.64. The tax statement, which is the notice of the property tax due, was mailed on October 31,1989. Taxpayer received the tax statement indicating the amount of property taxes owed on November 1, 1989.

In response to taxpayer’s declaratory judgment action, the defendants moved for summary judgment. This motion was based upon three separate grounds: (1) the statute of limitations set forth in § 15-1-406, MCA, had run; (2) laches, in that the taxpayer should have taken action earlier based upon the school levy election results; and (3) taxpayer was estopped from bringing the action in that the taxpayer’s delay in filing suit allowed the defendants to change their position detrimentally relying on the election results. The court did not address issues 2 and 3, but granted summary judgment based on the statute of limitations.

Section 15-1-406(2), MCA, states that a declaratory judgment action of this nature “must be brought within 90 days of the imposition of the tax.” [Emphasis added.] The question before the District Court was when the actual “imposition” of the tax occurred. Defendants argued that the imposition of the tax occurred on April 4, 1989, when the emergency levy election was held. The 90-day statute of limitations began running at that time according to the defendants. The taxpayer argued that the imposition of the tax was not until November 1,1989, when they received notice of the amount of the tax due. Taxpayer then contended that since the 90-day statute of limitations began to run on November 1,1989, taxpayer’s suit filed on January 26, 1990, was within the 90-day period provided by statute in which to bring an action. The District Court, in its January 29,1991, memorandum, opinion, and order, determined that “[w]hen the final steps to impose the tax were taken the cause of action to challenge the tax accrued to the Plaintiff.” According to the court this date was October 25, 1989. By October 25, 1989, the court found that all the necessary steps had been taken and the tax was imposed as of that date. The property had been assessed, the final budget and levy had been determined, and the actual tax liability was set and entered in the assessment book. Taxpayer’s declaratory judgment action was filed January 26, 1990, which is just over the 90 days allowed to bring the action. The court found it was not significant that the notice was not sent until October 31,1989, and that the taxpayer did not receive the notice of the actual tax liability until November 1, 1989. The court stated that the actual tax liability had been determined and it was the taxpayer’s own fault that he was unaware of the actual tax liability. Taxpayer could have checked to determine if his tax liability had been entered on the books and his lack of knowledge as to when the tax was entered on the books did not postpone the beginning of the period of limitations.

I

Did the District Court err in holding that the 90-day statute of limitations for bringing an action pursuant to § 15-1-406, MCA, began running on the date the amount of tax due was entered on the assessment book and the Department of Revenue affixed their affidavit thereto?

The outcome of this case turns on this Court’s determination of when the imposition of the tax in question occurred. It is only upon the imposition that the 90-day period of statute of limitations begins to run. The question presented here has not been previously addressed by this Court. However, there are a number of District Court decisions on when the imposition of a tax occurs. The present case presents this Court with the opportunity to clarify the existing law in this area and settle a point of some contention in the lower courts.

Taxpayer filed suit on January 26,1990, and therefore, taxpayer’s declaratory judgment action was filed within the required 90 days pursuant to § 15-1-406, MCA, if the “imposition” of the tax is determined to have occurred after October 28,1989. Section 1-1-306, MCA. On appeal, taxpayer argues that the District Court erred in determining that the imposition of the tax was on October 25, 1989, seven days prior to the time taxpayer received notice of the tax.

The defendants also argue on appeal that the District Court erred in its determination of when the tax was imposed. Defendants contend that the tax was imposed on April 4,1989, when the election was held and request that we modify that part of the District Court’s decision which found that the imposition of the tax occurred on October 25, 1989.

Section 15-1-406, MCA, the primary statute in question in this case, reads as follows:

(1) An aggrieved taxpayer may, in lieu of proceeding under 15-1-402 or 15-1-211, bring a declaratory judgment action in the district court seeking a declaration that a tax levied by the state or one of its subdivisions was illegally or unlawfully imposed or exceeded the taxing authority of the entity imposing the tax.
(2) The action must be brought within 90 days of the imposition of the tax. The court shall consolidate all actions brought under subsection (1) which challenge the same tax levy. The decision of the court shall apply to all similarly situated taxpayers except those taxpayers who are excluded under 15-1-407.
(3) The taxes that are being challenged under this section must be paid when due as a condition of continuing the action. [Emphasis added.]

Section 15-16-101, MCA, mandates that within ten days after the tax liability is entered on the assessment books, the county treasurer must send a notice to taxpayers indicating the amount of taxes due. Taxpayer contends that it is only upon receipt of this notice that the tax is actually imposed. The District Court’s decision imposes an affirmative duty upon taxpayers to check with the taxing authorities from time to time to determine if their tax liability has been determined yet. Taxpayer contends this decision not only disregards the purpose of the required statutory notice, but would be an administrative nightmare for local taxing authorities.

Unlike personal income taxes, property taxes are “non-self-assessing,” and are assessed and determined by the government. Taxpayer argues that the process of determining property taxes is complicated and that the necessary information is in the hands of the government, and therefore, individual taxpayers should not be expected to know what their property taxes will be prior to receiving notice.

Defendants counter by arguing that the taxpayer should have been aware of the tax, and that they were in a position to easily figure out what the tax would be. Defendants also argued that public policy requires that “an aggrieved taxpayer should be required to file its declaratory judgment action at the point in time when it first learns that its taxes are going to be increased,” and that this should be “prior to the time when the school authorities are forced to commit to the expenditure of this expected revenue.” Allowing taxpayers 90 days from the time they receive notice of their tax liability to file suit creates too much uncertainty for the schools. They will not be able to properly determine the amount of money they will actually have until this time period has passed.

The public policy arguments raised by the defendants are indeed important, but this Court is bound to follow and apply the intent of the legislature, as manifested in constitutionally sound statutes. As we have stated in the past: “In construing a statute, it is our function as an appellate court to ascertain and declare what in terms or in substance is contained in a statute and not insert what has been omitted.”

State v. Crane (1989), 240 Mont. 235, 238, 784 P.2d 901, 903. Whenever possible, this court is to look to the plain meaning of the statute in determining the legislative intent. State ex rel. Roberts v. Public Service Commission (1990), 242 Mont. 242, 790 P.2d 489.

As previously mentioned, this Court has not interpreted the term imposition as it is used in § 15-1-406, MCA. Additionally, the term has not been defined by the legislature. The statutes are silent as to when the actual imposition of the tax occurs. The District Court concluded that the imposition of the tax occurred when the taxing authority had completed all the steps necessary to impose the tax and there was nothing remaining for the government to do. The District Court determined that all the steps necessary to impose the tax had been completed when the taxes were entered on the assessment book and the Department of Revenue affixed its affidavit to the assessment book as provided in § 15-10-305, MCA. This date was October 25, 1989. The basic framework utilized by the District Court was correct, but the analysis of the District Court stopped one step short of completion. The tax is imposed when the taxing authority completes all the steps necessary to impose the tax, including the final step that the taxing authority is statutorily bound to comply with before the tax is imposed. Pursuant to § 15-16-101, MCA, the county treasurer is required, within ten days after receipt of the assessment book, to send each taxpayer a written notice showing the amount of taxes and assessments due. It is not until this notice has been sent that the government has taken all the steps necessary to impose the tax. We hold that the imposition of the tax, for purposes of bringing an action under § 15-1-406, MCA, occurs on the date the actual notice of taxes due is sent. In this instance, that occurred on October 31, 1989. Taxpayer filed suit on January 26, 1990, which is within the 90-day period allowed for bringing an action under § 15-1-406, MCA. We must therefore reverse the decision of the District Court and remand for further proceedings consistent with this opinion.

II

Did the District Court err in not finding that jurisdiction was present under the Uniform Declaratory Judgments Act?

In light of our holding on the first issue, a determination of the question of jurisdiction under the Uniform Declaratory Judgments Act is not essential to the outcome of this case.

Reversed and remanded to the District Court for further proceedings consistent with this opinion.

CHIEF JUSTICE TURNAGE and JUSTICES HARRISON, TRIEWEILER, GRAY and WEBER concur.

JUSTICE McDONOUGH,

dissenting.

The District Court in its opinion and order was correct. All the necessary steps to impose the tax were completed on October 25, 1989. An action of this nature must be brought within 90 days of the imposition of the tax. Section 15-1-406(2), MCA. There are no cases in Montana which have interpreted the term “imposition” relative to the imposition of a property tax.

In Soo Line Railroad Company v. Commissioner of Revenue (Minn. 1985), 377 N.W.2d 453, 458, the court, in what I feel to be a correct analysis, discussed the use of the term in the process of taxation as follows:

[Taxation] consists of two distinct processes — the one relating to the levying or imposition of the taxes on persons or property; the other the collection of the taxes levied. The first is constituted of the provisions of law which determine or work out the determination of the persons or property to be taxed, the sum or sums to be thus raised, the rate thereof and the time and manner of levying and receiving and collecting the taxes. It definitely and conclusively establishes the sum to be paid by each person taxed, or to be borne by each property specially assessed, and creates a fixed and certain demand in favor of the state or a subordinate governmental agency, and a definite and positive obligation on the part of those taxed, and prescribes the manner of its voluntary or enforced fulfillment.

Mayor and City Council of Baltimore v. Perrin, 178 Md. 101, 12 A.2d 261, 264-65 (1940).

When used in connection with the authority to tax, “levy,” strictly speaking, denotes the exercise of a legislative function, which imposes the tax and sets the amount, purpose, and subject of the exaction. Carkonen v. Williams, 76 Wash.2d 617, 458 P.2d 280, 286 (1969). See also Fichtner v. Schiller, 271 Minn. 163, 135 N.W.2d 877, 879 (1965). In view of the interchangeable use of the terms “impose” and “levy” by the United States Supreme Court, e.g., Minneapolis Star & Tribune Co. v. Minnesota Commissioner of Revenue, 460 U.S. 575, 103 S.Ct. 1365, 75 L.Ed.2d 295 (1983), we conclude the excise tax was imposed by legislative action, i.e., § 290.02, not by the commissioner’s attempt to collect it, ... (Emphasis added.)

The components that are necessary to impose a tax on pieces of property in Montana are the value of the property, the amount of the millage and the establishment of the sum to be borne by each piece of property. The value of the property is established by the application of the assessment and equalization statutes which is not contested here. The millage, or the rate of tax, was established in this case by the certification of the school board to the county commissioners after public notice of the amount of millage needed. The commissioners then, at their meeting on the second Monday in August of 1989, and after notice to the public, levied the millage and taxes against the taxable property of the district. See § 7-6-2502, MCA. The third step is the computations by the county assessor of the exact tax to be paid by each piece of property and its entry on the assessment book. This, by statute, is to be done by the second Monday in October, and the assessment book is then delivered to the county clerk and recorder with the assessor’s affidavit of completion. See § 15-10-305, MCA. This completes the first step as set forth in the above quotation; it definitely and conclusively establishes the sum to be paid by each person taxed and the sum to be borne by each property specially assessed.

The second step in the process starts by requiring that on or before the third Monday in October, the county clerk and recorder charges the county treasurer with the full amount of the taxes levied and delivers the assessment book to the treasurer. This second process, the collection of the taxes, is not governed by Chapter 10 which provides for the levy or imposition of the taxes. Rather, the collection is governed by law in a different chapter, Chapter 16 of Title 15 of the MCA. Part 1 of said Chapter 16 provides for the notice to be given to the taxpayers, what the notice shall contain, the time and place of payment, etc.

In this specific case the county assessor was late in completing and delivering the assessment book together with the affidavit and it was not done until October 25, 1989. On this date then, all the steps necessary to levy and impose a tax on a specific piece of property owned by a specific person were completed. The 90 day statute of limitations began to run on this date. This action was not filed until January 26, 1990, which is more than 90 days after the tax was imposed.

What the majority opinion has done is add the requirement of the mailing of the notice of taxes due, which is governed by said Chapter 16, as a requirement to the levy and imposition of the taxes. The notice requirement is actually a part of the second process, to wit: the collection of the taxes. I would affirm the order granting summary judgment.


author: JUSTICE WEBER JUSTICE TRIEWEILER,

text:
    JAMES H. TROUT, Plaintiff and Appellant, v. ANDREA BENNETT, as an individual and as State Auditor and Ex Officio Commissioner of Insurance; THE STATE OF MONTANA; THE JOHN ALDEN LIFE INSURANCE CO.; and THE PHOENIX MUTUAL INSURANCE CO., Defendants and Respondents.
    No. 90-497.
    Submitted on Briefs March 22, 1991.
    Decided April 9, 1992.
    49 St.Rep. 303.
    252 Mont. 416.
    830 P.2d 81

      For Appellant: James P. Reynolds, Reynolds, Motl, Sherwood and Wright, Helena.

      For Respondents: Michael J. Mulroney, Luxan & Murfitt; Richard E. Gillespie, Keller, Reynolds, Drake, Sternhagen & Johnson; Stephen M. Frankino, Hughes, Kellner, Sullivan & Alke, Helena.
   JUSTICE WEBER

delivered the Opinion of the Court.

James H. Trout (Trout), appeals the adverse judgment in his action as a licensed non-resident life insurance agent against Andrea Bennett, individually and as Commissioner of Insurance. The" District Court for the First Judicial District, Lewis and Clark-County, bifurcated the action into two parts. In the first portion the District Court held that Trout violated certain statutes, and fined him $250 for placing business with an insurance carrier before he had an appointment, and also fined him $250 for advertising himself as an agency. In the second portion, the District Court entered summary judgment for defendant Bennett, individually and as Commissioner. The District Court concluded that Andrea Bennett was not a ’’person” under 42 U.S.C. § 1983, and also concluded that Andrea Bennett was quasi-judicially immune. Trout appeals. We affirm in part and reverse in part.

The issues before the Court are:

1. Did Trout violate § 33-17-201(4), MCA (1985)?

2. Did Trout violate § 33-18-203, MCA?

3. Is Andrea Bennett, individually and as Commissioner, immune from § 1983 claims?

4. Does the doctrine of quasi-judicial immunity render Andrea Bennett, individually and as Commissioner, immune from suit under state law as to the remaining claims?

5. Did the District Court err in failing to rule on Trout’s motion to file a second amended complaint?

Trout is a California resident licensed as an insurance agent in the State of California. He started his business in Montana in 1983. A non-resident life insurance agent’s license was issued to him by the Montana Department of Insurance (Department). The license listed a California address and authorized Trout to sell life and disability insurance in Montana as a non-resident insurer. The license further provided that he could not ’’solicit business nor accept premiums ■under the name of [his] employing agency, or in conjunction with, or under the name of any other organization.”

Two events sparked the investigation of Trout. First, the Department received a phone inquiry as to whether Trout was licensed to do business in Montana as ’’Trout Insurance” and received a letter complaining about Trout’s activities. Second, the Department received a letter from Trout himself containing the letterhead ’’Trout Insurance”, listing his Billings business address.

The Department investigator proceeded on the assumption that Trout, a licensed non-resident agent, was not permitted to maintain a Billings office and sell insurance in Montana, and that the stationery and telephone book ads indicated he was holding himself out to the public as a resident insurer. Trout filed the assumed business name of ’’Trout Insurance Agency” with the Secretary of State, under § 30-13-203, MCA. The Department investigator informed Trout he could not operate an office or do any business as Trout Insurance because he was not licensed as such.

After completion of the investigation, filing of a complaint by the Department, giving of notice of hearing, and hearing before a hearing examiner at which both Trout and the Department were represented in person and by counsel, the hearing examiner made proposed findings of fact, conclusions of law and order dated May 28,1986. The Commissioner reviewed the same and in turn made extensive findings of fact, conclusions of law and order dated July 16, 1986. The Commissioner concluded that Trout had violated the statutes in a number of respects and by order revoked his non-resident license for twelve months and also ordered that he pay an administrative fine of $2,500 to the office of the Commissioner.

Trout then commenced the present action in which he alleged that Andrea Bennett individually and as Commissioner had violated various of his constitutional rights and caused damages to him. He sought a reversal of the Commissioner’s order of July 16, 1986, with regard to the statutory violations and fine, and also requested a reversal of his license suspension. By the same complaint Trout claimed damages on various theories -under 42 U.S.C. § 1983, and also a denial of constitutional rights by reason of the requirement of taking down a sign and ceasing the selling of insurance in Montana, as well as other constitutional tort theories. The District Court entered an order bifurcating the causes of action covered by the complaint.

As the first part of the bifurcation, the District Court considered the appeal from the order of the Commissioner. The District Court considered the matter under § 33-1-711(4), MCA, which provides that upon receipt of the transcript and evidence, the District Court shall hear the matter and following hearing, that the District Court is to consider the evidence contained in the transcript, exhibits and documents together with such other additional evidence as may be offered by either party. Proceeding under that authority, the District Court reconsidered the evidence and made new findings of fact and conclusions of law. The District Court reversed the determination of the Commissioner in a number of respects which are not involved in this appeal. By its orders dated August 25, 1989, and January 31, 1990, the District Court concluded that Trout had violated § 33-17-201(4), MCA (1985), by placing business with John Alden Life Insurance Company before he held an appointment issued by the Commissioner, and fined Trout $250 for the offense; and also concluded that Trout violated § 33-18-203, MCA, by advertising himself as ’’Trout Insurance Agency” and fined Trout $250 for that violation. The District Court specifically reversed the Commissioner with regard to the suspension of his license and allowed Trout to continue to sell insurance without interruption, and also reversed the $2500 fine.

As the second step in the bifurcation process, on May 30,1990, the District Court ruled on the motion for summary judgment made by Andrea Bennett, individually and as Commissioner. The District Court first concluded that the Commissioner was not a “person” under 42 U.S.C. § 1983, and granted summary judgment in the Commissioner’s favor on § 1983 claims. The District Court concluded that Will v. Michigan Dept. of State Police (1989), 491 U.S. 58, 109 S.Ct. 2304, 105 L.Ed.2d 45, was controlling. The District Court stated:

Will v. Michigan Dept. of State Police, 491 U.S. 58, 109 S.Ct. 2304, 105 L.Ed.45 (1989), decided after Trout filed his amended complaint, disposes of this issue. 42 U.S.C., Section 1983, the provision under which Trout seeks monetary damages, provides that any “person” acting under color of state law, who violates another’s constitutional rights is liable to the injured party. Will affirmed a Michigan Supreme Court decision which held that neither a state nor a state official acting in his or her official capacity is a “person” under 42 U.S.C., Section 1983. Id. at 72,109 S.Ct. at 2312, 105 L.Ed. at 58.
... Clearly Will holds that “a [section 1983] suit against a state official in his or her official capacity is not a suit against the official but rather is a suit against the official’s office.” Will concluded that neither the states nor state officials are “persons” subject to suit under Section 1983. Although Trout alleges in his amended complaint that certain statutes are unconstitutional, the constitutional counts in the amended complaint rely exclusively on 42 U.S.C., Section 1983 for relief, and do not request declaratory or injunctive relief. Summary judgment, dismissing both [Andrea Bennett] personally and the Office of State Auditor and Ex Officio Commissioner of Insurance on the counts alleging constitutional violations, is therefore proper.

The District Court cited Koppen v. Board of Medical Examiners (1988), 233 Mont. 214, 759 P.2d 173, and concluded that the Commissioner was quasi-judicially immune from suit on the remaining counts and granted the Commissioner’s motion for summary judgment on those counts. As a result, the District Court dismissed the Commissioner individually and as State Auditor and Ex Officio Commissioner of Insurance, with prejudice.

Trout brings this appeal from both parts of the bifurcated proceeding.

I

Did Trout violate § 33-17-201(4), MCA (1985)?

Section 33-17-201(4), MCA (1985) provided: “No agent shall place any business, other than coverage of his own risks, with any insurer as to which he does not then hold an appointment or license as agent under this chapter ....”

Trout was fined $250 for violating § 33-17-201(4), MCA (1985), by placing business with John Alden Life Insurance Company before he held an appointment to do so issued by the Commissioner. The District Court found that Trout requested John Alden Life Insurance Company to appoint him as a non-resident agent in Montana. The District Court found that Trout solicited insurance business prior to receiving a validated appointment from that company as was required by the Commissioner. The record contains substantial evidence to support that finding.

We affirm the conclusion of the District Court in holding that Trout did violate § 33-17-201(4), MCA (1985).

II

Did Trout violate § 33-18-203, MCA?

Section 33-18-203, MCA, provides:

No person shall make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, or other publication or in the form of a notice, circular, pamphlet, letter, or poster or over any radio or television station or in any other way, an advertisement, announcement, or statement containing any assertion, representation, or statement with respect to the business of insurance or with respect to any person in the conduct of his insurance business, which is untrue, deceptive, or misleading. (Emphasis added).

Trout maintains that he never advertised as an “agency.” He contends that his Billings phone book listings as “Trout Jim Insurance” and “Trout Insurance” did not represent an agency. As the Commissioner pointed out, and as found by the District Court, Trout alleged the following in his Amended Complaint:

12. Trout registered an assumed name, “Trout Insurance Agency,” with the Montana Secretary of State on January 21, 1985. Thereafter he ordered and used stationery with the name Trout Insurance Agency and the address of his Billings office for correspondence relating to his insurance sales in Montana .... (Emphasis added).

The District Court further concluded that Trout had signed a restriction letter which indicated that the license was issued to him as an individual, but that Trout had represented himself as an agent. We conclude there is substantial evidence to support the findings of the District Court. We affirm the holding that Trout violated § 33-18-203, MCA.

Ill

Is Andrea Bennett, individually and as Commissioner, immune from § 1983 claims?

Title 42 U.S.C. § 1983 provides:

Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress ....

Trout points to the reliance of the District Court on the Will case, as above described, and argues that Will applies only to those claims against Andrea Bennett in her “official capacity.” He further argues that Will provides no protection for claims against her in her “personal capacity.” Trout concedes that under Will, Andrea Bennett is immune in her official capacity from the § 1983 claims against her. Trout’s argument is further emphasized in his special brief regarding the case of Hafer v. Melo (1991), _ U.S. _, 112 S.Ct. 358, 116 L.Ed.2d 301, which was decided on November 5, 1991.

Andrea Bennett contends that she was acting within the scope of her official duties and employment. She maintains that under Will, neither a state nor a state official acting in his or her official capacity is a “person” under § 1983. Andrea Bennett further contends that Hafer has no bearing on the outcome of this case. We disagree.

Because Hafer is dispositive of this issue, we will discuss it at some length. Hafer sought election as Auditor General of Pennsylvania. During the campaign she was given a list of names of persons who allegedly secured their jobs in the Auditor General’s office through payments to former employees. Shortly after becoming Auditor General she dismissed eighteen employees. Eight of those employees sued Hafer in Federal District Court asserting a claim under 42 U.S.C. § 1983. Other respondents also sought damages because they alleged they had been discharged because of their political affiliation and support for Hafer’s opponent. The United States Supreme Court granted certiorari “to address the question whether state officers may be held personally liable for damages under § 1983 based upon actions taken in their official capacities.” The United States Supreme Court discussed at some length the comparison between official capacity suits and personal capacity suits. The court pointed out that personal capacity suits seek to impose individual liability for actions under color of state law, and as a result it is sufficient to establish personal liability under § 1983 by showing that an official acted under color of state law and caused deprivation of a federal right. The court pointed out how this is specifically covered by the above quoted definition from § 1983.

In discussing the distinction further, the Supreme Court pointed out that state officials sued in their official capacities are not persons for purposes of suit because they assume the identity of the government which employs them. By contrast, officers sued in their personal capacity come to court as individuals, so that a government official in the role of a personal capacity defendant fits comfortably within the above statutory term “person.” At this point the court pointed out that Hafer attempted to argue that the distinction turned upon the capacity in which the state official was acting when the plaintiff was injured. The court refused to accept this theory, pointing out that the requirement of action under state law means that Hafer may be liable for discharging respondents precisely because of her authority as Auditor General. Hafer also argued there was a distinction as to acts taken under color of state law, claiming that such actions were immune. Again the court found no support in the broad language of § 1983.

The court emphasized that it has in the past refused to extend absolute immunity beyond a very limited class of officials, including the President, legislators carrying out their legislative functions, and judges carrying out their judicial functions, “whose special functions or constitutional status requires complete protection from suit.” Hafer, 112 S.Ct. at 364. In support of that conclusion, the Supreme Court stated: “State executive officials are not entitled to absolute immunity for their official actions. Scheuer v. Rhodes, supra.” Id. at 364. Hafer further contended that under Will, there should not be recovery because the Eleventh Amendment bars suits in federal court by private parties seeking to impose a liability which must be paid from public funds in the state treasury. In discussing this issue, the Supreme Court stated:

“[S]ince Exparte Young, 209 U.S. 123 [28 S.Ct. 441, 52 L.Ed. 714] (1908),” we said “It has been settled that the Eleventh Amendment provides no shield for a state official confronted by a claim that he had deprived another of a federal right under the color of state law.”... While the doctrine of Ex parte Young does not apply where a plaintiff seeks damages from public treasury, damages awards against individual defendants in federal courts “are a permissible remedy in some circumstances notwithstanding the fact that they hold public office.” ... That is, the Eleventh Amendment does not erect a barrier against suits to impose “individual and personal liability” on state officials under § 1983.

Hafer, 112 S.Ct. at 364.

After such an extensive discussion, the Court unanimously held:

We hold that state officials, sued in their individual capacities are “persons” within the meaning of § 1983. The Eleventh Amendment does not bar such suits, nor are state officers absolutely immune from personal liability under § 1983 solely by virtue of the “official” nature of their acts.

Hafer 112 S.Ct. at 365.

In connection with the holding in Hafer, we point out that the amended complaint in the present case named Andrea H. Bennett, as an individual and as State Auditor and Ex Officio Commissioner of Insurance in the title, and also alleged the following in the complaint: “This action is brought against this Defendant in her official and personal capacities.”

We conclude that under Hafer, which had not been decided at the time of the summary judgment by the District Court, the District Court’s interpretation of Will as holding that neither states nor state officials are “persons” subject to suit under § 1983, must be reversed. We hold that under the United States Supreme Court decision in Hafer, Andrea Bennett, State Auditor and Commissioner of Insurance of Montana was sued by Trout in her individual capacity and as a result can be classified as a “person” within the meaning of § 1983, and that as such a state officer, Andrea Bennett is not absolutely immune from personal liability under § 1983 solely by virtue of the “official” nature of her acts. We reverse the District Court on this issue and remand for further proceedings consistent with this opinion.

IV

Does the doctrine of quasi-judicial immunity render Andrea Bennett, individually and as Commissioner, immune from suit under state law as to the remaining claims?

Trout concedes that the doctrine of quasi-judicial immunity protects the Commissioner from her actions in filing charges against him, the holding of the administrative hearing, and the ultimate decision finding him to have violated various code provisions. However, he argues that a distinction must be made between these quasi-judicial functions, and the actions in behalf of the Commissioner prior to the filing of the administrative charges. In particular, he urges that the actions of the Commissioner through her agent, Dan McGowan, in ordering him to remove his sign from his Billings office and requiring that he cease the sale of insurance in Montana under his non-resident license, clearly violated his constitutional rights to due process, equal protection, freedom to travel and free speech. While Trout might agree that the investigation made in order to provide a basis for the filing of charges was quasi-judicial in nature, he contends a distinction must be made with regard to the actions which essentially forced him out of business. He argues that this issue involves questions of fact which preclude summary judgment on the issue.

In State [ex rel. Div. of Work. Comp.] v. District Court [of the 13th Jud. Dist.] (1990), 246 Mont. 225, 805 P.2d 1272, this Court addressed the issue of whether the State and the Division of Workers’ Compensation are protected by quasi-judicial immunity for their admitted negligence in renewing the privilege of an employer to self-insure under the Workers’ Compensation Law. This Court held that the nature of the functions performed were central to the determination of the issue, and stated: “For immunity to apply the function of the Division must be quasi-judicial rather than administrative or ministerial.”

State v. District Court, [246 Mont. 225,] 805 P.2d at 1274. Furthermore, the Court provided the following definitions:

Quasi-judicial functions are those which lie midway between the judicial and ministerial ones. The lines separating them from such ... are necessarily indistinct; but, in general terms, when the law, in words or by implication, commits to any officer the duty of looking into facts, and acting upon them, not in a way which it specifically directs, but after a discretion in its nature judicial, the function is termed quasi-judicial.
In the same line, a ministerial act has also been defined as an act performed in a prescribed legal manner, in obedience to the law or the mandate of legal authority, without regard to, or the exercise of, the judgment of the individual upon the propriety of the acts being done.

Id. at 1275. In distinguishing State v. District Court from Koppen v. Board of Medical Examiners (1988), 233 Mont. 214, 759 P.2d 173, we looked at the definition of quasi-judicial function found in § 2-15-102(10), MCA:

“Quasi-judicial function” means an adjudicatory function exercised by an agency, involving the exercise of judgment and discretion in making determinations in controversies ....

The Court stated:

The case before us is distinguishable from Koppen. In Koppen, the Board allegedly failed to respond to complaints, adversarial in nature, that it received regarding a physician’s fitness to practice medicine and to take remedial action. We noted that the action or inaction by the Board in Koppen was its decision not to revoke or limit the physician’s license or initiate such action when faced with complaints concerning his professional conduct. There was no allegation that the Board failed to even consider the complaints.
Here, we first note that there is no controversy from the outset as in Koppen. The facts merely involve the filing of an application rather than an adversarial setting involving a dispute or controversy. We conclude that immunity does not attach because the Division is not expressly designated a quasi-judicial board, see § 2-15-124, MCA, see generally Title 2, Chapter 15, MCA, nor was it performing a quasi-judicial function ... (Citations Omitted). (Emphasis in original.)

Id. at 1275.

In pertinent part § 2-15-102(10), MCA, provides:

(10) “Quasi-judicial function” means an adjudicatory function exercised by an agency, involving the exercise of judgment and discretion in making determinations in controversies. The term includes but is not limited to the functions of interpreting, applying, and enforcing existing rules and laws granting or denying privileges, rights, or benefits; issuing, suspending, or revoking licenses, permits, and certificates; determining rights and interests of adverse parties; evaluating and passing on facts; awarding compensation; fixing prices; ordering action or abatement of action; adopting procedural rules; holding hearings; and any other act necessary to the performance of a quasi-judicial function.

On the question of whether or not an investigation by the Commissioner’s office should be classed as quasi-judicial in nature, the case of Gerber v. Commissioner of Ins. (1990), 242 Mont. 369, 786 P.2d 1199, is controlling:

As a discretionary function, the Insurance Commissioner’s conduct of an investigation based on a consumer’s complaint against an insurer is protected by quasi-judicial immunity.

As a result, the investigation of Trout clearly is protected by quasi-judicial immunity.

The narrow issue which concerns us does not involve the investigation itself. The issue is whether the agent of the Commissioner properly required Trout to remove his sign and stop the sale of insurance. Our review of the 1985 sections of Montana Code Annotated which applied to these particular actions does not disclose any statutory provision granting authority to the Commissioner or any agent of the Commissioner to require an agent or insurance producer to take down a sign in the manner alleged by Trout, or requiring an agent or producer to close down his office so far as the sale of insurance is concerned, as again is alleged by Trout. The record before us on this aspect is both confusing and incomplete so that we are not able to determine the specific actions which were alleged to have occurred on the part of Dan McGowan in behalf of the Commissioner.

We therefore conclude there is a remaining issue of material fact which precludes summary judgment with regard to the alleged conduct of the required taking down of the Trout sign and the closing of Trout Insurance. We conclude it is appropriate to reverse the District Court on this narrow specific issue.

In addition Trout claims that he suffered damages by reason of the notification of various insurance companies of his suspension in derogation of the automatic stay provision under § 33-1-711(2), MCA, which in 1985 read:

(2) Upon filing of the notice of appeal therein, the court shall have full juris diction and shall determine whether such filing shall operate as a stay of the order or action appealed from, except that in the following instances the filing of the notice of appeal shall automatically stay the order appealed from pending the judgment of the district court on the appeal:
(a) appeal from suspension or revocation of the license of an agent, solicitor, or surplus line agent; (Emphasis added.)

Again the record is inadequate for us to determine the precise steps which were taken. Again it appears there is an issue of material fact which precluded summary judgment on this narrow aspect as well.

We therefore hold that summary judgment is reversed with regard to the claim of quasi-judicial immunity as to the alleged removal of the sign, closing of the insurance business, and alleged improper notification of insurance companies in light of the automatic stay provided for in § 33-1-711(2), MCA (1985). We remand on these specific issues for further proceedings by the District Court consistent with this opinion.

V

Did the District Court err in failing to rule on Trout’s motion to file a second amended complaint?

Rule 15(a), M.R.Civ.P., provides that after a responsive pleading has been served, a party may amend his pleading only by leave of court or by written consent of the adverse party, and that “leave shall be freely given when justice so requires.” Trout filed his motion to amend his complaint after summary judgment was entered against him. However, we note that he failed to provide any basis for such an amendment. Instead, his motion consisted of a one sentence request to amend without any explanation of why he wished to do so. We conclude that there was no abuse of discretion on the part of the District Court in denying Trout’s motion to amend and hold that such a denial was proper.

We affirm the District Court on Issues I, II, and V. We reverse the District Court on Issue III regarding the § 1983 claims, and on the specified narrow issues under Issue IV, and remand for further proceedings consistent with this opinion.

CHIEF JUSTICE TURNAGE and JUSTICES HARRISON, GRAY and McDONOUGH concur.

JUSTICE TRIEWEILER,

specially concurring in part and dissenting in part:

I concur in part and dissent in part from the opinion of the majority. My reasons are discussed under the headings assigned to the various issues raised by the appellant.

CIVIL RIGHTS ACTION

I concur with the majority’s reversal of the District Court on this issue, but do not feel that it was necessary to make that decision dependent on the Supreme Court decision in Hafer v. Melo (1991), 502 U.S. _, 112 S.Ct. 358, 116 L.Ed.2d 301.

In his complaint, plaintiff sued Andrea H. Bennett individually in her personal capacity, and alleged that she violated his constitutional rights in the manner in which she personally applied provisions of the Montana Insurance Code to him. He specifically alleged that Bennett applied the Montana Insurance Code in such a way as to violate the Privileges and Immunities Clause of the U.S. Constitution, Article IV, Section 2, and the Equal Protection Clause of the Fourteenth Amendment to the Constitution. He also alleged that the Commissioner personally acted under color of state law to deprive him of his property without due process of law in violation of the Fourteenth Amendment to the United States Constitution.

The plaintiff’s allegations were not controverted. Bennett moved for summary judgment based purely on her assertion that she was immune from suit. Summary judgment was granted by the District Court based purely on its conclusion that Bennett could not be sued under the Civil Rights Act because of the U.S. Supreme Court’s decision in Will v. Michigan Dept. of State Police (1989), 491 U.S. 58, 109 S.Ct. 2304, 105 L.Ed.2d 45. However, Will did not grant immunity to public officials from suits under 42 U.S.C. § 1983, when the suit is based upon allegations of personal misconduct by that public official. In Will, the plaintiff alleged that he had been denied a promotion within the Michigan Department of State Police for an improper reason. He joined the Director of State Police as a defendant in his official capacity without alleging that the director himself had personally engaged in any culpable conduct. The Will decision stands for the proposition that state officials cannot be sued in their official capacity based simply on respondeat superior because such a suit is not in reality against the official as an individual, but rather against his office.

Where a § 1983 action against a state official is based upon that official’s personal misconduct, he is still personally liable to suit. The difference in liability was explained in Kentucky v. Graham (1985), 473 U.S. 159, 105 S.Ct. 3099, 87 L.Ed.2d 114, in the following language:

Proper application of this principle in damages actions against public officials requires careful adherence to the distinction between personal- and official-capacity suits. Because this distinction apparently continues to confuse lawyers and confound lower courts, we attempt to define it more clearly through concrete examples of the practical and doctrinal differences between personal-and official-capacity actions.
Personal-capacity suits seek to impose personal liability upon a government official for actions he takes under color of state law. See, e.g., Scheuer v. Rhodes, 416 U.S. 232, 237-238, 40 L.Ed.2d 90, 94 S.Ct. 1683, 71 Ohio Ops.2d 474 (1974). Official-capacity suits, in contrast, “generally represent only another way of pleading an action against an entity of which an officer is an agent.” Monell v. New York City Dept. of Social Services, 436 U.S. 658, 690, n. 55, 56 L.Ed.2d 611, 98 S.Ct. 2018 [2035, n.55] (1978). As long as the government entity receives notice and an opportunity to respond, an official-capacity suit is, in all respects other than name, to be treated as a suit against the entity. Brandon, [v. Holt] supra, [469 U.S. 464] at 471-472, 83 L.Ed.2d 878, 105 S.Ct. 873 [at 878]. It is not a suit against the official personally, for the real party in interest is the entity. Thus, while an award of damages against an official in his personal capacity can be executed only against the official’s personal assets, a plaintiff seeking to recover on a damages judgment in an official-capacity suit must look to the government entity itself.

Graham, 473 U.S. at 165, 166, 105 S.Ct. at 3104-05, 3105.

Therefore, where it can be shown that a public official acting under color of state law personally caused a deprivation of the claimant’s federal rights, that individual is still personally liable under 42 U.S.C. § 1983. The District Court erred when it held that the personal suit against Bennett was barred by the U.S. Supreme Court’s decision in Will, regardless of the outcome in Hafer.

For these reasons, I concur in the decision to reverse the District Court’s summary judgment in favor of the defendant Bennett which dismissed plaintiff’s claims filed pursuant to 42 U.S.C. § 1983.

QUASI-JUDICIAL IMMUNITY

The issue of whether Bennett’s acts which are complained of were administrative and ministerial, as opposed to quasi-judicial, is an interesting one, and by itself was probably sufficient to preclude summary judgment. However, it seems to me that there is a more important issue involved with the dismissal of potentially meritorious claims based upon judicially created quasi-judicial immunity. Article II, Section 18, of the Montana Constitution, provides as follows:

The state, counties, cities, towns, and all other local governmental entities shall have no immunity from suit for injury to a person or property, except as may be specifically provided by law by a % vote of each house of the legislature.

To my knowledge, the Montana Legislature has never voted to impose quasi-judicial immunity by a % vote, or by any other vote. Therefore, to judicially create such immunity contravenes an express provision of the Montana Constitution which this Court is sworn to uphold. Our responsibility is to enforce the Constitution, not to undermine it. For that reason, I would reverse this Court’s decisions in Koppen v. Board of Medical Examiners (1988), 233 Mont. 214, 759 P.2d 173, and Gerber v. Commissioner of Insurance (1990), 242 Mont. 369, 786 P.2d 1199. I would also reverse the District Court’s decision granting summary judgment to the defendant on the basis of quasi-judicial immunity, and dissent from that portion of the majority opinion which suggests that this doctrine may protect the defendant in some activities, but not others.

SECTION 33-18-203, MCA (1985)

Section 33-18-203, MCA (1985), prohibits an individual from making untrue, deceptive, or misleading advertisements regarding the insurance business. There was absolutely no evidence in this case that plaintiff ever misrepresented anything or mislead anyone.

The District Court determined that plaintiff violated the above section by advertising himself as “Trout Insurance Agency,” when he in fact was only licensed individually. However, all of the evidence was to the contrary.

Copies of his letterhead, his telephone book listing, and his yellow pages advertisement were introduced into evidence at the administrative hearing. Nowhere on any of these documents does the word “agenc/’ appear.

Plaintiff’s letterhead refers to “Trout Insurance.” His telephone listings in the Billings telephone books refer to “Trout Insurance” and “Trout, Jim Insurance.” His advertisement in the yellow pages lists him as “Trout Insurance.” There was no evidence offered by the Insurance Commissioner that plaintiff ever held himself out as being associated with an agency.

Ignoring the record and ignoring the fact that plaintiff was never charged by the Insurance Commissioner with advertising as “Trout Insurance Agency,” this Court concludes that an error in plaintiff’s amended complaint constitutes “substantial evidence” to support the findings of the District Court.

Allegations in complaints are not evidence, and the majoritys opinion cites no evidence in support of the District Court’s conclusion that plaintiff violated § 33-18-203, MCA(1985). The fact that a person could be convicted of a statute as broad as this statute without notice of the basis for the charges, and with absolutely no evidence offered to support the charges, is a frightening development. I would reverse the District Court’s conclusion that plaintiff violated that section, and dissent from the majority opinion which affirms that conclusion.

SECTION 33-17-201(4), MCA (1985)

The second statute that plaintiff was accused of violating prevents agents from placing business with an insurer with whom he does not hold an appointment. It does not specify the nature of the appointment that is required. In this case, plaintiff did hold an appointment with John Alden Life Insurance Company in California at the time that he wrote the policy which formed the basis of the charges against him.

It would have been reasonable for plaintiff to conclude that pursuant to Montana’s reciprocity agreement with California it was permissible for him to write the policy in question. Section 33-17-403, MCA (1985) provides:

An applicant for a nonresident license must be licensed in the state of his residence to act as agent for the kinds of insurance for which he applies for licensing in the state of Montana. The nonresident agent shall be licensed to represent only those insurers which he is licensed to represent in the state of his residence and which are licensed in the state of Montana. The insurance supervisory official of the applicant’s state of residence must certify that the applicant is licensed and to the extent of the license.

If plaintiff’s conduct in this case constituted a violation of the law, it seems to me that fundamental principles of fairness and prior case law require that he is at least entitled to advance notice as to what the law commands and forbids. Papachristou v. City of Jacksonville (1972), 405 U.S. 156, 92 S.Ct. 839, 31 L.Ed.2d 110. In this case, the statutes that plaintiff was found to have violated are totally deficient in that respect.

Section 33-17-201(4), MCA (1985), also provides for an exception which was not mentioned in the majority opinion. The statute makes its requirements applicable “except as provided in ... § 33-17-1104 as to life or disability insurance agents.” Plaintiff was in fact licensed as a “life and/or disability insurance agent.”

Section 33-17-1104, MCA (1985), provides that:

A life or disability insurance agent may from time to time place excess or rejected risks in any other life or disability insurer authorized to transact insurance in this state, with the knowledge and approval of the insurer or insurers as to which the agent is so licensed, and may receive a commission thereon without being required to have a license as to such other insurer.

There is a factual issue regarding whether the policy that plaintiff actually wrote for John Alden prior to his appointment in Montana was an excess or rejected risk. That issue was never addressed by the District Court. However, if we assume that the group for whom the policy was issued fits into either of those categories, plaintiff did not violate the insurance code when he placed the Computer Land account with John Alden.

For these reasons, I do not believe there is substantial evidence to support the District Court’s finding that plaintiff violated § 33-17-201(4), MCA (1985). I dissent from the majority opinion which concludes that there was, and would reverse the District Court on this issue.

JUSTICE HUNT concurs in the foregoing concurrence and dissent of JUSTICE TRIEWEILER.