author: JUSTICE GRAY

text:
    STATE OF MONTANA, TOWN OF DARBY, Plaintiffs and Respondents, v. STEVEN J. HENRY, Defendant and Appellant.
    No. 94-400.
    Submitted on Briefs March 23, 1995.
    Rehearing Denied July 13, 1995.
    Decided June 20, 1995.
    52 St.Rep. 516.
    898 P.2d 1195.
    271 Mont. 491.

      For Appellant: Steven J. Henry, Darby, Pro Se
    For Respondent: Hon. Joseph P. Mazurek, Attorney General, John Paulson, Ass’t Attorney General, Helena; Charles H. Recht, Attorney at Law, Hamilton.
   JUSTICE GRAY

delivered the Opinion of the Court.

Steven J. Henry (Henry) appeals from a jury verdict in the Twenty-First Judicial District Court, Ravalli County, finding him guilty of driving or being in actual physical control of a vehicle while under the influence of alcohol or drugs pursuant to § 61-8-401, MCA, and from that portion of the District Court’s judgment requiring him to pay legal fees incurred by the Town of Darby. We affirm in part, reverse in part, and remand.

On August 25, 1993, Darby police officer Larry Rose (Rose) received two calls from the Ravalli County Sheriff’s Department reporting that Henry had been observed driving on U.S. Highway 93 south of Darby and that he might be intoxicated. Rose patrolled the general area and, while parked on the side of Highway 93, observed Henry’s car being driven in an erratic manner. Rose pursued Henry and turned on his emergency flashers just as Henry pulled into a convenience store parking lot. Upon approaching Henry’s car, Rose smelled alcohol and observed that Henry appeared intoxicated. Rose requested that Henry perform field sobriety maneuvers; Henry refused to perform two of the maneuvers and could not perform the third. Rose arrested Henry for driving under the influence and transported him to the Ravalli County Jail.

A jury trial was held in Darby City Court on February 16, 1994; the jury found Henry guilty of operating a motor vehicle under the influence of alcohol. The court sentenced Henry to sixty days in jail with thirty days suspended, assessed fines and costs totalling $1,773.32, and required Henry to complete Ravalli County’s alcohol information and treatment program. Henry appealed to the District Court for a trial de novo.

Ajury trial held in the District Court on June 30, and July 1,1994, resulted in another guilty verdict. Following a sentencing hearing, the District Court entered a judgment sentencing Henry to sixty days in the Ravalli County jail with thirty days suspended on certain conditions. Among other things, the conditions required Henry to complete the alcohol program and to pay various fees and penalties, including legal fees incurred by Darby in the prosecution of Henry’s case in both the Darby City Court and the District Court. The legal fees total $10,550. Henry appeals. Additional facts are included as necessary in our discussion of the issues.

1. Was Henry denied his right to counsel in the Darby City Court proceedings?

Henry asserts that the Darby City Court erred in determining that William Roche (Roche), a friend of Henry’s family, could not represent Henry in criminal proceedings. He argues that §§ 25-31-601 and 37-61-210, MCA, required the court to permit Roche to act as counsel and that its failure to do so violated his right to counsel. We decline to address the merits of Henry’s argument because the trial de novo on appeal to the District Court, during which Henry was represented by counsel, cured any prejudice which may have resulted from the City Court’s decision regarding representation by Roche. See City of Billings v. McCarvel (1993), 262 Mont. 96, 101, 863 P.2d 441, 445.

2. Was Henry denied the effective assistance of counsel in the District Court proceedings?

Henry advances various allegations of improper representation by his defense counsel dining trial in the District Court. He argues that defense counsel, who allegedly is “fraternally and religiously linked” to the prosecutor, aided the prosecution by failing to: 1) present Henry’s claim of erroneous denial of counsel by the City Court; 2) introduce certain evidence and call certain witnesses; 3) object to the presence of a particular person in the courtroom; and 4) present arguments that Rose exceeded his jurisdiction by arresting Henry in the convenience store parking lot, and that Henry was neither intoxicated nor driving or in physical control of an automobile at the time of the arrest. Henry’s arguments, which we construe as a claim of ineffective assistance of counsel, are without merit.

This Court evaluates ineffective assistance of counsel claims under the two-prong test set forth in Strickland v. Washington (1984), 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674. State v. Bradley (1993), 262 Mont. 194, 197, 864 P.2d 787, 789. Under the first Strickland prong, “the defendant must prove that counsel’s performance was deficient by establishing that it fell below the range of competence reasonably demanded of attorneys in light of the Sixth Amendment.” Bradley, 864 P.2d at 789. “The second prong requires the defendant to demonstrate that counsel’s deficiency was so prejudicial that it denied the defendant a fair trial.” Bradley, 864 P.2d at 789. Both Strickland prongs must be established before we will conclude that a defendant received ineffective assistance of counsel. State v. Hildreth (1994), 267 Mont. 423, 431-32, 884 P.2d 771, 776.

First, we address whether counsel’s failure to raise Henry’s claim of erroneous denial of counsel by the City Court on appeal to the District Court constituted deficient performance. A district court does not sit as a court of review on appeal from city court proceedings. See City of Billings, 863 P.2d at 445. Thus, counsel had no legal basis on which to present this claim of error by the City Court to the District Court; absent a legal basis, counsel’s failure to present such an argument cannot constitute deficient performance. See Bradley, 864 P.2d at 790.

Nor are we persuaded by Henry’s argument regarding counsel’s failure to use a videotape and photographs of city limits and to call certain witnesses. Decisions relating to presentation of the case, including whether to introduce certain evidence or to present witnesses, generally are matters of trial tactics and strategy. See, e.g., State v. Johnstone (1990), 244 Mont. 450, 464-65, 798 P.2d 978, 987. We will not find error supporting an ineffective assistance of counsel claim in counsel’s tactical decisions. State v. Sheppard (1995), [270 Mont. 122], 890 P.2d 754, 757.

Henry also contends that counsel’s performance was deficient because he failed to object to the presence, and alleged prejudicial effect, of a particular person in the courtroom. Here, we need observe only that the record before us is devoid of any reference to the presence of the person about whom Henry complains; Henry’s contention is supported only by affidavits which are not part of the record on appeal. This Court’s review of allegations on direct appeal is confined to the record. Section 46-20-701, MCA; Bradley, 864 P.2d at 791. Thus, we decline to address this portion of Henry’s argument.

Henry’s allegation that counsel failed to argue that Rose did not have jurisdiction to arrest him is not supported by the record. Indeed, the record is clear that counsel filed a pretrial motion to dismiss the charges against Henry or, in the alternative, to suppress evidence seized at the time of Henry’s arrest on this basis.

The record is equally clear regarding Henry’s remaining assertions of deficient performance. In closing argument, counsel reminded the jury that the prosecution bore the burden of proving that Henry had committed the offense charged including the “under the influence” element. Counsel further drew the jury’s attention to the prosecution’s failure to provide any direct evidence of Henry’s alleged intoxication and its total reliance on opinions provided by police officers and laypersons who observed Henry. Regarding whether Henry was driving or in actual physical control of a vehicle at the time of the arrest, counsel pointed out the inconsistencies in the testimony relating to that issue.

We conclude that Henry has not established that his counsel’s performance was deficient under the first Strickland prong; for that reason, we need not address Strickland’s prejudice prong. On the basis of the record before us, therefore, we hold that Henry was not denied the effective assistance of counsel during the District Court proceedings.

3. Did the District Court err in denying Henry’s motion to dismiss or, in the alternative, to suppress evidence on the grounds that Rose was acting outside his lawful jurisdiction in arresting Henry?

Henry admits that his arrest occurred within the physical boundaries of Ole’s convenience store parking lot, but contends that Ole’s parking lot is located outside the town limits of Darby. Based on this contention, Henry argues that Rose had no jurisdiction to arrest him and, as a result, that the District Court erred in denying his motion to dismiss or, in the alternative, to suppress evidence.

Resolution of this issue turns on whether Ole’s parking lot is within the Darby town limits. The record relating to the Darby town limits consists of a Darby town plat, a copy of Darby Town Resolution 176, and an affidavit from Darby’s mayor, Richard Higgins (Higgins). Henry highlighted the parcels of property containing Ole’s parking lot on the town plat; it cannot be ascertained from reviewing the plat, however, whether the highlighted parcels are within the Darby town limits.

Higgins’ affidavit states that on September 14, 1992, the Darby Town Council enacted Resolution 176 which annexed the property on which Ole’s is located into the town limits. Resolution 176 states that, by mutual consent of the owner of the property, J.G.L. Distributing, Inc., and the Darby Town Council, “[p]roperty belonging to J.G.L. Distributing [is] annexed into the incorporated limits of the Town of Darby.” Resolution 176 then sets forth the legal description of the two parcels of land being annexed. A comparison of those legal descriptions to the parcels highlighted on the town plat reflects that the plat parcels are those annexed in the town limits of Darby via Resolution 176.

Henry cites to no evidence of record supporting the argument that Rose was without jurisdiction when he arrested Henry. Instead, he advances a convoluted argument that the prosecutor tampered with evidence in order to establish that Ole’s parking lot was within the town limits, relying on a series of photographs and a home videotape which were not admitted into evidence at trial. We will not consider evidence not contained in the record on appeal. Section 46-20-701, MCA; Bradley, 864 P.2d at 791.

We conclude that the record establishes that Ole’s parking lot, the site of Henry’s arrest, lies within the Darby town limits and Rose’s jurisdiction. Therefore, we hold that the District Court did not err in denying Henry’s motion to dismiss the charges or, in the alternative, to suppress evidence.

4. Did the District Court err in ordering Henry to pay $10,550 as the costs of legal fees incurred by the Town of Darby in prosecuting his case?

The District Court sentenced Henry to sixty days in the Ravalli County Jail with thirty days suspended on certain conditions. The conditions included payment by Henry of a $500 fine, a $15 surcharge, costs of incarceration totalling $960, jury costs in the amount of $979.50, and $10,550 to the Town of Darby for legal fees incurred in prosecuting Henry’s case and any additional legal fees incurred in defending this appeal.

Henry argues that the costs and fines included in his sentence exceeded the average $350 fine imposed in similar cases prosecuted in Ravalli County; on that basis, he contends that the court’s sentence was illegal. It appears that Henry also challenges the legal basis for the District Court’s assessment of the prosecution legal fees as a condition of his suspended sentence.

“Trial judges are granted broad discretion to determine the appropriate punishment.” State v. Hembd (1992), 254 Mont. 407, 411, 838 P.2d 412, 415. We do not review a sentence for inequity or disparity, but determine whether the sentence is within the statutory guidelines. Hembd, 838 P.2d at 415 (citations omitted). This Court will not disturb a district court’s sentencing decision absent a showing that the court abused its discretion. State v. Blanchard (1995), [270 Mont. 11], 889 P.2d 1180, 1182.

Section 46-18-201, MCA, is the sentencing statute at issue here. Under subsection (1)(b), a court may suspend execution of a sentence for six months or for a period equal to the maximum sentence allowed, whichever is greater; during that period, the sentencing judge may impose any of the “reasonable restrictions or conditions” listed in subsection (1)(a). Section 46-18-201(1)(b), MCA.

The express statutory conditions contained in § 46-18-201(1)(a), MCA, and available for imposition as conditions of a suspended sentence under § 46-18-201(1)(b), MCA, include certain monetary obligations. For example, a defendant may be assessed restitution, costs of confinement, payment of a fine, and payment of certain costs. See § 46-18-201(1)(a)(iv), (v), (vi), and (vii), MCA. With the exception of the prosecution legal fees, it is clear that the fines and costs imposed by the District Court are specifically authorized as reasonable conditions of a suspended sentence pursuant to § 46-18-201(1)(a) and (b), MCA. It is equally clear that § 46-18-201(1)(a), MCA, does not specifically authorize the imposition of prosecution legal fees as a “reasonable condition” and, indeed, that no other statute provides express authority for the imposition of such a condition.

Moreover, the legislature’s inclusion of specific authority for a court’s imposition of the costs of court-appointed defense counsel (see § 46-18-201(1)(a)(viii), MCA) reflects the legislature’s awareness of the means by which to provide for corresponding authority relating to prosecution legal fees. As a general rule, the express mention of a certain power or authority within a statute implies the exclusion of non-expressed powers. See State ex rel. Jones v. Giles (1975), 168 Mont. 130, 133, 541 P.2d 355, 357. Because the legislature expressly authorized the imposition of the costs of court-appointed defense counsel as a “reasonable condition” and did not provide for corresponding authority regarding prosecution legal fees, we conclude that the legislature did not intend to authorize the imposition of prosecution legal fees as a condition of a suspended sentence.

In addition to the express conditions set forth in § 46-18-201(1)(a)(i) through (xi), MCA, however, the “catch-all” provision contained in subsection (1)(a)(xii) permits a sentencing court to impose “any other reasonable conditions considered necessary for rehabilitation. ...” In imposing the condition regarding prosecution legal fees here, the District Court expressed the hope that, when Henry weighed the cost of his unlawful actions against the cost of engaging in those activities, he would “make some effort to conform [his] behavior to the law.” At the same time, the court stated that there was no reasonable prospect of rehabilitation in Henry’s case. Under these circumstances, it appears that the condition requiring Henry to reimburse Darby for its attorney fees more probably reflects the court’s understandable frustration with Henry than a condition imposed for rehabilitation purposes pursuant to § 46-18-201(1)(a)(xii), MCA. Moreover, absent express statutory authority, the imposition of prosecution legal fees engenders a sense of a primarily punitive, rather than rehabilitative, purpose.

District courts are vested with considerable discretionary power regarding sentences. Hembd, 838 P.2d at 415. We conclude, however, that the imposition of prosecution legal fees is neither expressly nor implicitly authorized by § 46-18-201(1)(a), MCA. On that basis, we hold that the District Court abused its discretion in imposing the payment of prosecution legal fees as a condition of Henry’s suspended sentence.

Affirmed in part, reversed in part, and remanded for resentencing.

JUSTICES WEBER, HUNT, TRIEWEILER and LEAPHART concur.


source: Caselaw Access Project

author: JUSTICE WEBER JUSTICE LEAPHART,

license: Public Domain

text:
    CHARLEY JOHNSON, PARK COUNTY SHERIFF, THE STATE OF MONTANA, Petitioner and Respondent, v. EQUIPMENT USED TO CULTIVATE MARIJUANA; REAL PROPERTY, A TRACT DESCRIBED AS TRACT ONE (1) OF CERTIFICATE OF SURVEY NO. 370, ALL IN SECTION TWENTY-TWO (22), TOWNSHIP TWO (2) SOUTH, RANGE NINE (9) EAST; TIMOTHY JEROME HULBERT & RUSSELL J. YOUNG, Defendants and Appellants.
    No. 94-410.
    Submitted on Briefs February 16, 1995.
    Decided June 20, 1995.
    52 St.Rep. 511.
    898 P.2d 1200.
    271 Mont. 500.

      For Appellant: Karl Knuchel, Livingston.
    For Respondent: Wm. Neis Swandal, Park County Attorney, Livingston; Honorable Joseph P. Mazurek, Attorney General, John Paulson, Assistant Attorney General, Helena.
   JUSTICE WEBER

delivered the Opinion of the Court.

This is an appeal from a decision of the Sixth Judicial District Court, Park Comity, to allow the seizure and sale of real property involved in a drug felony. We affirm in part and remand.

The only issue for review is whether the District Court erred in permitting the real property to be seized and sold despite the owner’s issuance of a quitclaim deed to the seller following the owner’s arrest and charge for the crime.

Appellant Russell J. Young (Young) and Timothy J. Hulbert (Hulbert) were involved in a business together. That relationship ended in March of 1988. Following dissolution, Hulbert made arrangements to purchase the business property from Young, subject to payment of an outstanding bank loan owed to Young. The sale of the property was by contract for deed from Young to Hulbert.

On January 12, 1993, law enforcement officers from the Park County Sheriff’s Office and Livingston Police Department searched Hulbert’s residence and discovered that he was growing marijuana in his home. Hulbert was thereafter arrested for possession with intent to sell. On January 21, 1993, Hulbert issued a quitclaim deed for his residence to Young who paid Hulbert $5,000.

A petition to institute forfeiture proceedings was filed on February 23, 1993, against Hulbert for both the real property and the drug paraphernalia found in the residence. Young was added as a respondent on March 10, 1993. Hulbert never filed an answer and a default was entered. Young filed an answer and counterclaim which was subsequently withdrawn.

The parties stipulated that the only issue to be considered was whether the quitclaim deed to Young prevented the State’s subsequent seizure of the real property. Following a bench trial after which Hulbert was convicted of possession with intent to sell, the court considered the quitclaim deed and found that although Young had a legitimate interest in the property, his quitclaim deed did not cut off the State’s right to forfeit the real estate. The court reasoned that the relation back doctrine applied and that although the quitclaim deed preceded the State’s petition for forfeiture, the State’s interest in seizing the property was ripe upon the commission of the crime, January 12, 1993, and a transfer of the property subsequent to the crime was void.

In its June 13th Findings of Fact and Conclusions of Law, the court ordered the Park County Sheriff to sell at public auction the seized property described as Tract one (1) of certificate of survey no. 370, located in section 22, T2S, R9E, Park County, Montana. The court stated that Young was due the balance owed him on the said contract for deed, plus whatever interest had accumulated.

Young appeals the forfeiture of the real property deeded to him by the quitclaim deed.

Did the District Court err in permitting the real property to be seized and sold despite the owner’s issuance of a quitclaim deed to the seller following the owner’s arrest and charge for the crime?

Young argues on appeal that he is an innocent owner pursuant to § 44-12-102(1)(i), MCA. The State argues that it has not forfeited Young’s interest in the property; Young’s security interest in the residence was fully recognized by the court in its June 13,1994 Order. The State points out that the interest recognized, however, is not that of owner because Hulbert was the owner on January 12,1993; Young has a security interest in the property.

The District Court correctly based its decision on the “relation back doctrine” set out for the first time in United States v. Stowell (1889), 133 U.S. 1, 10 S.Ct. 244, 33 L.Ed 555. The doctrine, followed for many decades, states that whenever a statute determines that upon commission of a certain act specific property used in or connected with that act shall be forfeited, “the forfeiture takes effect immediately upon the commission of the act.” Stowell, 133 U.S. at 16, 10 S.Ct. at 247, 33 L.Ed at 559.

We adopt the doctrine of relation back as established in Stowell with regard to the facts of the present case. As a result, we conclude that by relation back, the crime was committed on the date of discovery, that being, January 12,1993. As a result, upon that day, the State had the right to seize the real property which had been directly used to facilitate the offense. The controlling provision is the following portion of § 44-12-102, MCA:

Things subject to forfeiture. (1) The following are subject to forfeiture:
(i) real property, including any right, title, and interest in any lot or tract of land and any appurtenances or improvements, that is directly used or intended to be used in any manner or part to commit or facilitate the commission of or that is derived from or maintained by the proceeds resulting from a violation of Title 45, chapter 9, that is punishable by more than 5 years in prison. An owner’s interest in real property is not subject to forfeit by reason of any act or omission unless it is proved that the act or omission was the owner’s or was with his actual knowledge or express consent.

The next question is whether Young’s interest in the property can be classed as an owner’s interest in real property. As previously mentioned, Young executed a contract for deed under which he was the seller and Hulbert was the buyer. The doctrine of equitable conversion establishes that as a result of the contract for deed, Young had only the naked legal title which he held as trustee for the purchaser and as security for the unpaid purchase price. The rule was stated in In the Matter of the Estate of Wooten (1982), 198 Mont. 132, 137-38, 643 P.2d 1196, 1199:

... we find that this is a proper case for application of the doctrine of equitable conversion. We have applied this doctrine many times in the past. A suitable example of its operation can be seen in Kern v. Robertson (1932), 92 Mont. 283, 12 P.2d 565, where we stated:
“The authorities are in accord that an enforceable contract for the purchase and sale of real property passes to the purchaser the equitable and beneficial ownership thereof, leaving only the naked legal title in the seller, as trustee for the purchaser, and as security for the unpaid purchase price.
A more recent case, In Re Estate of Rickner (1974), 164 Mont. 51, 518 P.2d 1160, states:
“It has long been established by this Court that a contract for the sale of real property converts the seller’s interest from an owner of real property to that of an owner of personalty, this being the doctrine of equitable conversion. ...

Based upon the foregoing authority, we conclude that the interest owned by Young at the time of the commission of the crime on January 12, 1993, was as an owner of personalty rather than as an owner of real property. As a result, we conclude that Young’s specific interest in the property was not covered by the above last sentence of § 44-12-102(1)(i), MCA.

This leads us to the statutes which control the procedure for forfeiture. The pertinent parts of § 44-12-205, MCA, are as follows:

44-12-205. Disposition of property following hearing. (1) If the court finds that the property was not used for the purpose charged or that the property listed in 44-12-102(l)(g) was used without the knowledge or consent of the owner, it shall order the property released to the owner of record as of the date of the seizure.
(2) If the court finds that the property was used for the purpose charged and that the property listed in 44-12-102(l)(g) was used with the knowledge or consent of the owner, the property shall be disposed of as follows:
(a) If proper proof of his claim is presented at the hearing by the holder of a security interest, the court shall order the property released to the holder of the security interest if the amount due him is equal to or in excess of the value of the property as of the date of seizure, it being the purpose of this chapter to forfeit only the right, title, or interest of the owner. If the amount due the holder of the security interest is less than the value of the property, the property, if it is sold, must be sold at public auction by the law enforcement agency that seized the property in the same manner provided by law for the sale of property under execution or the law enforcement agency may return the property to the holder of the security interest without proceeding with an auction.

Paragraph (1) of the above code section first states that if the court finds the property was not used for the purpose charged, it shall order the property released to the owner of record. The court here of course found the property was used for the purpose charged so that provision does not apply.

Next paragraph (1) provides that if the court finds that the property listed in § 44-12-102(1)(g), MCA, was used without the knowledge or consent of the owner, it shall order the property released to the owner of record. This is a confusing portion of the statute. First, it is essential to note that § 44-12-102(1)(g), MCA, provides:

(1) The following are subject to forfeiture:
(g) everything of value furnished or intended to be furnished in exchange for a controlled substance in violation of Title 45, chapter 9; all proceeds traceable to such an exchange; and all money, negotiable instruments, and securities used or intended to be used to facilitate a violation of Title 45, chapter 9 ...

Because the property with which we are here involved is not within the definition of § 44-12-102(1)(g), MCA, we must conclude that no part of § 44-12-205(1), MCA, is applicable here.

This then leads us to paragraph (2) of § 44-12-205, MCA. In substance paragraph (2) provides that if the court finds as it did here that the real property was used for the purposes charged, the property shall be disposed of as provided in subparagraphs (a) to (c). In the present case, Young proved that he was the holder of a secured interest by virtue of his position as a seller under a contract for deed. The specific provision of subparagraph (a) is that the property should be released to the holder of such a security interest if the amount due is equal to or in excess of the value of the property as of the date of seizure. The subparagraph further provides that if the amount due the holder of the security interest is less than the value of the property, then the property is to be sold or the property may be returned to the holder of the security interest. The key point here is that the District Court is required to determine the value of the real property as of the date of seizure. In the present case, if that determination had been made, and if it had been determined that the value of the real property was less than the security interest, the court should have ordered the property delivered to Young. On the other hand, if the District Court determined that the value of the real property exceeded the security interest, then the property could have been sold, Young could have been paid out of the proceeds with the balance going to the State. The record before us establishes that the District Court did not establish the value of the real property on the date of seizure, or the specific amount owing to Young under his security interest.

We hold that because of our application of the Stowell doctrine, Hulbert’s issuance of a quit claim deed to Young was ineffective so far as the drug seizure is concerned and that the District Court did not err in permitting the real estate to be seized. We further hold that the record does not yet establish a basis for the sale of the property and we remand to the District Court in order that it may determine the value of the real property as of the date of seizure, and the amount owing to Young under his security interest. At that point, the District Court shall then determine under the statute whether or not it is appropriate to surrender the real property to Young as the holder of the security interest, or to order the sale of the property with the requirement that the proceeds shall be used first to pay off the entire amount owing to Young under his security interest with the balance to go to the State of Montana.

We remand to the District Court.

JUSTICES NELSON, TRIEWEILER and HUNT concur.

JUSTICE LEAPHART,

dissenting.

I dissent. The Court’s analysis is based upon the premise that Young was not the owner of the property in question. Rather, that, as a seller under a contract for deed, he merely had a security interest in the property and that his security interest is personalty only. Using that assumption, the Court avoids the issue of whether Young is an “innocent owner” under the provisions of §§ 44-12-102(l)(i) and 44-12-205, MCA, and then proceeds to conclude that he was legitimately treated as a secured party under § 44-12-205(2)(a), MCA.

Although there is support for such a conclusion, I do not believe that that is the result envisioned by the legislature when it adopted Chapter 12 of Title 44, MCA. I say this for two reasons. First of all, although the statutes on forfeiture make reference to “owner,” they also make reference to “owner of record.” See 44-12-205(1), MCA. “Owner of record” is not defined. I take that term to mean the holder of the legal title. As the Court correctly concludes, under the doctrine of equitable conversion, Young, as the seller under a contract for deed, becomes an owner of personalty with naked legal title to the property. Estate of Wooten (1982), 198 Mont. 132, 643 P.2d 1196. Legal title remains vested in the vendor (Young) until such time as the contractual provisions are fully performed. In my view, however, that bare legal title is sufficient to qualify Young as the “owner of record” as that term is used in Title 44, Chapter 12, MCA.

The District Court found that the warranty deed from Young to Hulbert was to be held in escrow until it was paid for. Since Hulbert was in default, the warranty deed obviously was not “of record.” In fact, there is no indication that a notice of purchaser’s interest was filed in Hulbert’s favor. Accordingly, Young is clearly the “owner of record” as contemplated by the statutory scheme.

The District Court found that Young was not an “innocent owner” as of the date of the January 21, 1993 quit claim deed since he had actual knowledge (at that time) that the residence had been used to facilitate a violation of law. Accordingly, the District Court concluded that Young proceeded at his own risk in purchasing Hulbert’s interest in the premises. However, in applying the “innocent owner” test — the court focused on the wrong time period. The statute provides: “An owner’s interest in real property is not subject to forfeit by reason of any act or omission unless it is proved that the act or omission was the owner’s or was with his actual knowledge or express consent.” Section 44-12-102(l)(i), MCA. Obviously, the question to be answered is: “Did Young have actual knowledge of the criminal activity at the time is was occurring, or did he expressly consent to that activity either before or at the time it was occurring?” The court merely held that, when Young received the quitclaim deed, he knew that Hulbert had been arrested and was being charged with operating a marijuana grow operation. That after the fact knowledge, however, is totally irrelevant to the inquiry. The statute is clear, an owner’s interest cannot be forfeited unless he had actual knowledge of the activity or consented to such activity. Section 44-12-102(l)(i), MCA. Further, the law clearly requires that if the owner is innocent, the property is to be released to the owner of record as of the date of the seizure. Section 44-12-205(1), MCA. The District Court’s finding that ‘Young had actual knowledge that the residence and property had been used to facilitate the commission of a violation of title 45, chapter 9, when the January 18 transfer occurred ...” does not disqualify Young as an innocent owner. As such, he is entitled to the property totally aside from the existence or timing of the quitclaim deed.

My second reason for believing that the legislature did not intend to treat a vendor under a contract for deed as having a mere interest in personalty is found in the burden of proof requirements imposed upon an owner of personalty. Section 44-12-204(3), MCA. The Court holds that Young, by virtue of being a vendor under a contract for deed, is a secured party; an “owner of personalty rather than an owner of real property.” As a secured party, the Court concludes that Young is entitled to disposition of his interest under § 44-12-205(2), MCA. However, a secured party is entitled to disposition under § 44-12-205(2), MCA, only upon “proper proof of his claim.” The proof required of a secured party is set forth in § 44-12-204(3), MCA. In relegating Young to the status of a secured party with a mere interest in personalty, the Court is thereby subjecting all vendor’s interests in real estate to forfeiture unless such vendor can prove that his/her security interest (contract for deed) is “bona fide and that it was created after a reasonable investigation of the moral responsibility, character, and reputation of the purchaser and without knowledge that the property was being or was to be usedforthe purpose charged.” Section 44-12-204(3), MCA. This will no doubt come as somewhat of a shock to sellers of real estate who have been neglecting to check out the moral responsibility, character, and reputations of their purchasers.

The majority reasons that the State’s right to forfeiture relates back and thereby preempts the January 18, 1993 quitclaim deed to Young. As pointed out above, I am of the opinion that Young is an “owner of record” by virtue of his bare legal title. That interest predates either Hulbert’s equitable interest or the State’s interest by virtue of the relation back doctrine. His claim of ownership is not dependent upon the quitclaim deed. However, as an alternative rationale, I must point out that, in my opinion, Young’s interests as a seller under a contract for deed (which contract was in default) are superior to the forfeiture rights of the State of Montana. The contract for deed was in default due to Hulbert’s failure to make his required payments. As the District Court noted, the contract for deed contemplated use of a quitclaim deed in the event of default. Thus, Young was entitled to invoke the default provisions of the contract or to accept a deed in lieu of foreclosure, which, in effect, he did. He did this in January of 1993, before the State had commenced any forfeiture proceedings against the property. The State had not physically seized the property nor had it filed a lis pendens to cloud the title. Although the State has a right to seek forfeiture, it is not required to do so. Young was under no obligation to sit back and wait to see if the State was going to exercise that option. He acted as a ^reasonably prudent seller under a contract for deed which is in default. The State was simply too slow.

I do not suggest that a defendant in a criminal proceeding be allowed to thwart the forfeiture laws by quickly and collusively deeding the subject property to a friend or previously uninterested person. Under such circumstances, the relation back doctrine would probably defeat the claim of the new collusive “owner.” Under the present facts, however, Young is no strawman owner. Rather, his interest in the property stems from his prior status as the owner of record and as a vendor under a contract for deed which was in default.

With or without the quitclaim deed, Young was an “innocent owner” who was entitled to return of the property. The majority of this Court has elevated the forfeiture rights of the State of Montana above the rights of an innocent owner of record. In forfeiting title to the State, the Court purports to do nothing more than put the State in the shoes of Hulbert. In doing so, however, it ignores the fact that Hulbert did not have legal title and that he was in default under the contract for deed. As a result, the Court places the State in shoes much more well-heeled than any Hulbert ever wore. I respectfully dissent.

CHIEF JUSTICE TURNAGE and JUSTICE GRAY join in the foregoing dissent of JUSTICE LEAPHART.


author: JUSTICE HUNT

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. LAURA MAVIS GRAHAM, Defendant and Appellant.
    No. 95-005.
    Submitted on Briefs June 1, 1995.
    Decided June 27, 1995.
    52 St.Rep. 541.
    898 P.2d 1206.
    271 Mont. 510.

      For Appellant: Marcia M. Jacobson, Attorney at Law, Missoula County Public Defenders Officer, Missoula.
    For Respondent: Hon. Joseph P. Mazurek, Attorney General, Kathy Seeley, Assistant Attorney General, Helena, Robert L. “Dusty” Deschamps III, Missoula County Attorney, Karen M. Townsend, Deputy County Attorney, Missoula.
   JUSTICE HUNT

delivered the Opinion of the Court.

Appellant Laura Mavis Graham appeals from an order of the Fourth Judicial District Court, Missoula County, denying her motion to suppress evidence gathered without a search warrant.

We reverse.

The dispositive issue on appeal is:

Did the District Court err in denying appellant’s motion to suppress evidence seized from her purse following her arrest?

Appellant was a passenger in a car which was stopped by Deputy Estill in a Safeway parking lot in Missoula. Upon discovering that the driver had a suspended driver’s license, Estill arrested the driver and called for backup. It was also discovered that there were outstanding warrants against appellant. Deputy Hintz responded to Estill’s call for backup and arrested appellant on the outstanding warrants. A neighbor was contacted to retrieve the car. Deputy Tillman agreed to stay with the car until the neighbor arrived.

Appellant asked that her purse be left in the car because it contained food stamps that her children would need. Tillman went back to the car and retrieved appellant’s purse which he gave to Hintz to take to the station. Narcotics were discovered in appellant’s purse when it was searched at the jail without a warrant. Appellant was charged with criminal possession of dangerous drugs under § 45-9-102, MCA.

Appellant filed a motion to suppress all evidence obtained as a result of the warrantless search of her purse. The District Court denied appellant’s motion. Appellant reserved her right to appeal the suppression issue and entered a guilty plea to criminal possession of dangerous drugs under § 45-9-102, MCA. Appellant was found guilty of the charged offense and received a deferred sentence. It is from the District Court’s judgment that appellant appeals.

Did the District Court err in denying appellant’s motion to suppress evidence seized from her purse following her arrest?

We review a district court’s ruling on a motion to suppress to determine whether there is substantial credible evidence to support the court’s findings of fact, and whether the court correctly applied the findings as a matter of law. State v. Stubbs (1995), [270 Mont. 364], 892 P.2d 547, 550. In addition, we determine whether the district court’s interpretation and application of the law is correct. Stubbs, 892 P.2d at 550.

Warrantless searches are considered unreasonable per se under the Fourth Amendment to the United States Constitution. Stubbs, 892 P.2d at 550 (citing State v. McCarthy (1993), 258 Mont. 51, 55, 852 P.2d 111, 113; citing Katz v. United States (1967), 389 U.S. 347, 88 S. Ct. 507, 19 L. Ed. 2d 576). However, certain exceptions to the warrant requirement are recognized under federal and Montana law. Stubbs, 892 P.2d at 550; McCarthy, 258 Mont. 51, 852 P.2d at 113 (citing California v. Acevedo (1991), 500 U.S. 565, 111 S. Ct. 1982, 114 L. Ed. 2d 619). One of the recognized exceptions to the warrant requirement is a search incident to a lawful arrest. Chimel v. California (1969), 395 U.S. 752, 89 S. Ct. 2034, 23 L. Ed. 2d 685; Section 46-5-102, MCA. In Montana, a police officer may reasonably search a person lawfully arrested and the area within the person’s immediate presence for the purpose of (1) protecting the police officer, (2) preventing the person from escaping, (3) discovering and seizing the fruits of the crime, or (4) discovering and seizing any person or things which may have been used in the commission of the offense. Section 45-5-102, MCA.

The District Court concluded that the warrantless search of appellant’s purse fell within the search incident to a lawful arrest exception, and therefore, was a valid search. The State argues that appellant’s purse, an item of personal property immediately associated with her person, was properly searched at the jail as an incident to her lawful arrest pursuant to New York v. Belton (1981), 453 U.S. 454, 101 S. Ct. 2860, 69 L. Ed. 2d 768. We disagree.

Appellant was arrested on outstanding city warrants for acts unrelated to the stop of the motor vehicle and the arrest of the driver. None of the four purposes set forth in § 46-5-102, MCA, which permit a warrantless search of the area within the arrestee’s immediate presence is applicable. Searching appellant’s purse would not have protected the arresting officer; would not have prevented appellant from escaping; would not have resulted in discovering fruits of the crimes which resulted in the city warrants; and would not have resulted in the discovery of anything which may have been used in the commission of the offenses which resulted in the city warrants. Consequently, evidence gathered as a result of the warrantless search of appellant’s purse should have been suppressed.

We hold that the District Court erred in denying appellant’s motion to suppress evidence seized from her purse following her arrest.

We reverse.

JUSTICES TRIEWEILER, NELSON, GRAY and LEAPHART concur.


author: JUSTICE WEBER JUSTICE NELSON

text:
    CITY OF BOZEMAN, MONTANA, A MUNICIPAL CORPORATION, ACTING ON BEHALF OF THE DEPARTMENT OF TRANSPORTATION OF THE STATE OF MONTANA, Plaintiffs, Respondents, and Cross-appellants v. DONALD D. VANIMAN and CECILIA R. VANIMAN, CO-TRUSTEES of STEELHEAD RANCHES, A TRUST, Defendants and Appellants.
    No. 94-625.
    Submitted on Briefs April 6, 1995.
    Decided June 29 1995.
    52 St.Rep. 543.
    898 P.2d 1208.
    271 Mont. 514.

      For Appellants: Michael G. Garrity, Anacker & Garrity, Bozeman.
    For Respondents: Peter S. Lineberger, Spokane, Washington.
   JUSTICE WEBER

delivered the Opinion of the Court.

This is an appeal from a decision by the Eighteenth Judicial District Court, Gallatin County, determining that the State had lawfully exercised its power of eminent domain, but that the Bozeman Chamber of Commerce could not be part of the planned highway interchange building complex. We affirm.

We consider the following issue:

Did the District Court err in finding that the State had lawfully exercised its power of eminent domain but that the Bozeman Chamber of Commerce could not be part of the planned highway interchange building complex?

The City of Bozeman (City), acting on behalf of the Montana State Department of Transportation (State), sought to have an 8.72 acre piece of property owned by Donald and Cecilia Vaniman (the Vanimans) condemned for the purpose of creating an off-ramp and rest area/visitors center for the North 19th Avenue Interchange at Interstate Highway 90. In its complaint for condemnation, the State did not mention that part of the visitor center was a planned area for the Bozeman Chamber of Commerce. The Chamber is a private nonprofit organization. Despite their agreement with the stated purposes of the condemnation, the Vanimans objected to the Chamber’s presence.

On July 2,1993, the District Court issued a Preliminary Condemnation order stating that the issue of the Chamber’s presence within the 8.72 condemned acres was not before it. This order was appealed and in the City of Bozeman v. Vaniman (1994), 264 Mont. 76, 869 P.2d 790, we stated that the District Court’s failure to consider the Chamber’s presence within the project denied the plaintiffs due process and prevented us from considering the appeal. We remanded the action for the court’s consideration of the Chamber’s presence and for a determination of whether the Chamber’s presence was “de minimus.” Following a hearing on May 12, 1994, the District Court ordered that the wing of the building in which the Chamber was to reside should be severed from the plans and that the Chamber have no part in locating its private corporate offices on any section of the condemned property. The evidence presented at the hearing led the court to determine that the Chamber’s offices would amount to 40% of the building set to be built at the interchange area. Such a presence, the court found was not de minimus. The Vanimans have appealed the court’s decision.

Standard of Review

The court’s findings on remand will be considered as to whether they are clearly erroneous and the court’s conclusions of law will be considered as to whether they are correct. Vaniman, 264 Mont. at 80, 869 P.2d at 793. Clearly erroneous is defined by whether a finding is supported by substantial evidence, whether the court correctly apprehended the evidence, or, despite the satisfaction of the first two elements, whether we are of the firm conviction that a mistake has been made. Vaniman, 264 Mont. at 80, 869 P.2d at 793.

Did the District Court err in finding that the State had lawfully exercised its power of eminent domain but that the Bozeman Chamber of Commerce could not be part of the planned highway interchange building complex?

The Vanimans argue that the District Court should have dismissed the condemnation action instead of modifying the State’s design by severing the Chamber’s wing of the visitors’ center. The Vanimans contend that the court acted outside its jurisdiction by modifying the design approved by the State. According to the Vanimans, the government cannot take a property for combined public/private use. The Vanimans argue that because the Chamber’s presence is not de minimus the entire taking is unlawful and the initial condemnation order should be dismissed. The Vanimans assert that the only question that the District Court had to answer was whether the Chamber’s role was “de minimus.”

The City argues that this Court’s first opinion was not as narrow as the Vanimans have stated. The City contends that on remand the District Court had to determine the appropriate balance of public versus private use within the interchange project. Further, the City argues that the court did not engage in project redesigning — it did not consider specific aspects of the design project and then attempt to change these aspects. The City also argues that it was the Vanimans themselves who introduced evidence regarding the design of the building and have, therefore, waived any right to object to the court’s consideration of that design.

This Court remanded the action back to District Court because the court had not considered any evidence of the Chamber’s involvement with the case. Vaniman, 264 Mont. at 83, 869 P.2d at 794. The court was directed to consider further proceedings consistent with our opinion. That opinion dealt with more than the de minimus rule.

De Minimus

When a legal matter is termed “de minimus,” it means that courts need not consider it because the matter is “trifling” or too minor to be considered in the interest of judicial economy. Hopkins v. Kitts (1908), 37 Mont. 26, 94 P. 201; Section 1-3-224, MCA. By telling the District Court that it had to make this determination, we instructed the District Court to consider the Chamber’s involvement in the case, which the court had not done, and then to make a determination after considering the facts before it as to whether the matter was substantial enough to be considered in any court of law. A designation that an issue is not de minimus means that it is a matter of consequence and that the issue should be considered by the court.

The District Court found that the Chamber would occupy 40% of the building as currently planned. The court also found that the Chamber said that it would pay $200,000 for its part of the building. However, the facts indicate that the Chamber’s portion of the building would cost twice that amount. The facts also indicate that the federal government denied payment for any portion of the Chamber’s offices. That leaves approximately $200,000 of the Chamber’s offices unfunded. Therefore, the District Court was not clearly erroneous by finding that the Chamber’s involvement in the project was not de minimus and that it should consider the effect that the Chamber, a private corporation, would have on an otherwise public project.

Private v. Public Use

The District Court recognized that it was required to make more than the de minimus ruling. The court understood that our remand without a ruling meant that the substantive issues involved in an eminent domain case were still subject to appeal if the issue of the Chamber’s presence was not de minimus. The court stated:

On March 1,1994, the Montana Supreme Court remanded the case to this Court... requiring that the Court consider the evidence of the Chamber’s involvement in the project when determining whether the Plaintiffs validly exercised their eminent domain power over the Vaniman’s property, and "... to determine whether the Chamber’s [Bozeman Area Chamber of Commerce] involvement is de minimus.” .... A de minimus inquiry in this case, does not involve itself with “incidental private benefit” which arises where a lawful taking of private property by condemnation indirectly yields an incidental private benefit, but gets directly to the validity of the Bozeman Chamber of Commerce’s proposed direct “participation” by privately using part of the property being condemned. Consequently, this Court construes the specific directions in the Supreme Court’s Opinion as holding that this Court must specifically rule on whether the Chamber’s “participation” (even though not fixed by an executed contract) impacts the validity of the entire eminent domain proceeding, before it issues a Preliminary Condemnation Order.

In its September, 1994, Memorandum and Order following remand, the court determined that the condemnation of the 8.72 acres of the Vaniman property was necessary and for a public purpose and, therefore, appropriate, but that the Chamber’s involvement in the project was not appropriate and must be excised because it constituted a “private” and not a public use. The court then ordered that the Chamber could no longer be part of the project.

According to the Vanimans, the court’s action of severing the Chamber’s offices from the visitor center plans was beyond the court’s jurisdiction. While the Vanimans characterize this action on the part of the court as a “redesigning” of the visitor center, such is not the case. The court specifically stated that:

FOF 11. The current architectural development schematic drawings of the information/visitor center, on which many of Defendant’s objections are based, were prepared in April, 1993. These schematic drawings represent early preconstruction designs which can readily be, and often are, changed before any construction occurs. Though such schematic drawings indicate that the Chamber’s private corporate offices are a part of the information/visitor center building, no bids have been let on the construction of the rest area and information/visitor center, and no work whatsoever has commenced on this schematically designed building.
FOF 14. Schematic drawings are those usually prepared when only about 15% of project completion is reached. Here, no work whatsoever has begun or is completed regarding the proposed building’s construction. Such “schematic” drawings are not now, and never were, a part of the State’s Condemnation Order of March 24,1993, nor a part of Plaintiffs Complaint for Condemnation in this action.

Thus, it is clear that the court was aware that the plans from which it “severed” the Chamber’s offices were early plans and that later plans would follow. We interpret the court’s severance of the Chamber’s offices, not as a redesigning of the building — which would be a permanent and final change — but an indication that the Chamber’s offices must not appear in future plans for the building.

The record substantiates the court’s findings. Testimony from the hearing on remand indicates that all connected with the project knew that the plans introduced into evidence were only preliminary plans and that other final plans would follow. Therefore, substantial evidence supports the court’s findings. Further, the court correctly apprehended the evidence and we are not left with a firm conviction that an error has been made. The court was not, therefore, clearly erroneous.

The Vanimans argue that legally the court could not modify plans that had already been approved by the State but that the court must negate the entire condemnation because the State had in essence condemned a property for private use. The comet’s legal determination to sever the Chamber’s offices was an outgrowth of its determination that the Chamber was a private organization and that its participation in the visitors’ center built on land that had been taken by eminent domain was inappropriate.

Our statutes declare that in order for eminent domain to be appropriate, the land taken must be put to a “public use.” Section 70-30-101, MCA. The District Court determined that the use of the Vaniman property for a highway interchange and a visitor center was expressly provided for in our statutory system. We stated as much in Vaniman I. Vaniman, 264 Mont. at 80, 869 P.2d at 793. There is no question that the proposed project for Interchange 19 is a public use according to our statutory list of appropriate public uses in § 60-4-103, MCA. The pivotal concern is whether the Chamber’s presence within a building on land condemned for public use requires that the entire eminent domain action be negated.

The court concluded that the Chamber’s portion of the visitors’ center was a private use and was constitutionally offensive, but that the rest of the project could stand. The court concluded that the Chamber had no authority to participate in an otherwise public project and that “[t]he Chamber shall have no right to locate or operate its private corporate business on any portion of the property acquired from Defendants in this eminent domain proceeding.” The court then granted the request for the prehminary condemnation order of the 8.72 acres for the purpose of an interchange and visitor center.

We have stated that: “It is well established that a condemning authority can not acquire a greater interest or estate in the condemned property than the public use requires.” Silver Bow County v. Hafer (1975), 166 Mont. 330, 332, 532 P.2d 691. Here, the record shows that whether the Chamber is included in the plans or not, the same amount of land will be taken. This fact is not disputed by the Vanimans nor any official connected to the governmental entities involved. Therefore, the condemnation order is appropriate for 8.72 acres so long as the purpose for which the property condemned is appropriate.

It is also not disputed that the uses of a highway interchange and visitors center constitute a “public use” required by our eminent domain statute. Sections 70-30-101, MCA, and 60-4-103, MCA. The record shows that the original condemnation complaint filed by the State mentions only the use of the interchange and the visitors’ center/information center. Thus, the complaint was properly granted because the use was public, the State had the right to eminent domain, and the proper procedures were followed.

However, the Chamber is a private corporation. Whether its involvement began before or after the issuance of the complaint is of little concern because there is no question from the record that at some point the Chamber offices became a substantial part of the building to be erected on the condemned property. We pointed this out to the court and on remand the District Court determined, based upon the testimony at the May 12,1994, hearing, that the Chamber’s portion of the visitors’ center amounted to about 40% of the area anticipated for the building.

The State provided adequate evidence that the project was appropriate; it then became the Vanimans’ burden to prove by clear and convincing proof that the taking by the government was excessive or arbitrary. Lincoln / Lewis & Clark Co. Sewer v. Bossing (1985), 215 Mont. 235, 696 P.2d 989. The Vanimans attempted to prove the State’s actions as arbitrary or excessive by submitting evidence of the size and nature of the Chamber’s portion of the building. Yet, there is nothing whatsoever in the record to disprove the State’s contention that the taking of the 8.72 acres for an interchange and visitor center is appropriate or that the taking would be less if the Chamber were not part of the project. The Chamber was not mentioned in the original complaint for condemnation. The purpose in the complaint was public, to that all agree.

The Chamber’s participation is a collateral concern and does not change the public use designation of the proj ect as proved to the court. The Chamber is a private business. It is a fundamental law of eminent domain that private property may not be taken without an owner’s consent for the private use of another. McTaggart v. Montana Power Co. (1979), 184 Mont. 329, 602 P.2d 992. Further, both the United States and the Montana Constitutions prohibit a taking by the State for merely private use. U.S. Const., amend. XIV; Art. II, Sec. 17, Mont.Const. (1972).

In certain cases, a public use and a private use can be commingled without a finding of unconstitutionality. J. Sackman & P. Rohan, 2A Nichols Law of Eminent Domain, The Public Use, § 7.08 (1990). In considering whether the private nature of the Chamber’s business is appropriately allowed as a part of the public purposes of the visitors’ center/information center we consider the following:

If the use for which land is taken by eminent domain is public, the taking is not invalid merely because an incidental benefit will enure to private individuals.....The use for which the property is acquired by eminent domain must ordinarily be the use of the condemnor. ... [An] ulterior public advantage may justify a comparatively insignificant taking of private property for what, in its immediate purpose, is a private use. Moreover, where, despite the commingling of private and public uses, the taking will aid in the establishment of a public project, the courts are disposed to ignore the private element as purely incidental....

J. Sackman & R Rohan, 2A Nichols Law of Eminent Domain, Public Use, § 7.08 (1990). In analyzing when a private use is appropriate within an eminent domain taking, we adopt this analysis and compare the Chamber’s use by this three-tiered standard:

1. Will the public use create an “incidental” benefit to private individuals?
2. Is the overall use that of the condemnor?
3. Is the private use insignificant?

An analysis of all three elements shows that the Chamber’s presence is inappropriate within this public project. First, the Chamber’s corporate offices are not incidental to the proj ect. In other words, its presence is not a necessary derivative of the visitor center and highway interchange. Any benefit that the Chamber derives from having its offices located at this Interchange is in no way connected to the public use of the highway or the rest area/visitor center. The Chamber’s presence may be “convenient” for the Chamber as well as the State, but that is not the test. The test is whether any benefit to the Chamber comes as a necessary corollary to the public purpose. The record indicates no such benefit.

Second, the use for which the land is taken must be that of the State. If the Chamber occupies a major portion of the visitor center, then the use is not that of the State. Finally, the record indicates that the Chamber’s presence is not insignificant; it will occupy a major part of the visitor center. Therefore, we conclude that the Chamber’s private presence within this otherwise public project cannot stand as the Chamber cannot meet the elements of the above test in any way.

In other fact situations, such a determination could mean that the entire condemnation would fail or that the taking would have to be limited. Under the facts of this case, the loss of the Chamber’s participation does not limit the taking. All agree that the same amount of land must be taken regardless of the Chamber’s presence. Further, the complaint and order of possession do not mention the Chamber and the plans which include the Chamber offices are only preliminary to the project.

We conclude that the District Court correctly granted the preliminary condemnation order because the Chamber’s presence was not a part of the request for condemnation. We hold that the court did not err in finding that the State had lawfully exercised its power of eminent domain but that the Bozeman Chamber of Commerce could not be part of the planned highway interchange building complex.

Affirmed.

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

JUSTICE NELSON

specially concurs.

While I do not necessarily agree with all that is stated in our opinion, under the circumstances of this case, I conclude that we have reached the appropriate result. "While the Vanimans contend on this appeal that the District Court exceeded our remand order in Vaniman I, by excising the Chamber’s participation in, and its portion of the building from, the project, nevertheless, I conclude that appellants are in no position to complain.

As we pointed out in our opinion in Vaniman I, appellant Cecilia Vaniman conceded at the outset that the State had the authority to condemn the entire 8.712 acre parcel of property for the purpose of constructing a rest area and visitor center; that even if the Chamber were not part of the project, the entire acreage would nevertheless be condemned; and that she had no objection to the project but simply to the Chamber’s involvement in it. Vaniman, 869 P.2d at 793.

Accordingly, I specially concur.

JUSTICE GRAY concurs in the foregoing special concurrence.


author: CHIEF JUSTICE TURNAGE

text:
    HOWARD HICKINGBOTHAM and SANDRA HICKINGBOTHAM, husband and wife, Plaintiffs, Appellants and Cross-Respondents, v. PAT DUNCAN, an individual, Defendant, Respondent and Cross-Appellant, v. ASH-WATKINS INCORPORATED, a Montana corporation, GASPARD W. DESCHAMPS, JR., an individual d/b/a DESCHAMPS INDUSTRIES, and MICHAEL E. SELL, d/b/a C & M PAINTING, Defendants.
    No. 94-413.
    Submitted on Briefs May 11, 1995.
    Decided July 6, 1995.
    52 St.Rep. 574.
    898 P.2d 1215.
    271 Mont. 525.

      For Appellants: Christopher B. Swartley, Datsopoulos, MacDonald & Lind, P.C. Missoula.
    For Respondent: Michael Sol, Sol & Wolfe, Missoula.
   CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Howard and Sandra Hickingbotham appeal the decision of the Fourth Judicial District Court, Missoula County, amending its original findings of fact and conclusions of law. Pat Duncan cross-appeals the decision of the District Court ordering him to pay the Hickingbothams’ attorney fees. We affirm in part and reverse in part.

We find the following issues dispositive:

1. Did the District Court err in amending its original findings of fact, conclusions of law and judgment?

2. Did the District Court err in failing to find that Duncan had committed either actual or constructive fraud?

3. Did the District Court err in awarding attorney fees to the Hickingbothams?

Duncan owned a tract of land in Missoula County, Montana (Tract 1-A). In December 1990, the Hickingbothams purchased a portion of Tract 1-A (Tract 1-A-l) on which they planned to build a home. In exchange for $23,000, Duncan executed a warranty deed transferring title to Tract 1-A-l to the Hickingbothams.

While the Hickingbothams were planning their home, they discovered that Tract 1-A-l was not large enough to accommodate their building plans. They therefore sought to purchase an additional portion of Tract 1-A (Portion A) to thus enlarge the total size of their lot. The Hickingbothams negotiated with Duncan the purchase of additional adjoining land for a purchase price of $10,000. The parties’ negotiations culminated in the execution of a Receipt and Agreement to Sell and Purchase dated May 17, 1991.

During this same period of time, Duncan was having a house constructed on his remaining portion of Tract 1-A. He contracted with Ash-Watkins to construct a home for $100,000. Adispute ensued over construction costs incurred in building Duncan’s home. Ash-Watkins sought additional money above and beyond the $100,000 negotiated construction price, but Duncan refused to pay the increased amount. On June 6,1991, Ash-Watkins filed a construction lien against Tract 1-A, including Tract 1-A-l which had been purchased by the Hickingbothams and Portion A which the Hickingbothams were negotiating to purchase. The Hickingbothams claim that Duncan knew or should have known that Ash-Watkins would encumber Tract 1-A-l and Portion A when he did not settle his construction debt.

On June 19, 1991, the Hickingbothams tendered payment for Portion A. Duncan refused to accept because he could not convey clear title to the property due to the Ash-Watkins construction lien.

Pursuant to a court order, Ash-Watkins released the construction lien on Tract 1-A-l. The lien on the remainder of Tract 1-A, including Portion A, was not released. The Hickingbothams have since rescinded their offer to purchase Portion A. The Hickingbothams likewise sold Tract 1-A-l in August of 1992 for a $17,000 profit.

The Hickingbothams filed suit against Duncan, claiming that he breached the covenants contained in the warranty deed to Tract 1-A-l by allowing the construction liens to be placed on the property and that he breached the Receipt and Agreement to Sell and Purchase Portion A signed on May 17, 1991, by failing to convey Portion A to them.

Following a bench trial, the District Court issued its findings of fact, conclusions of law and judgment. The court found that Duncan had breached the express warranty against encumbrances as well as implied covenants contained in the Tract 1-A-l warranty deed. The court also found that Duncan breached the terms of the Receipt and Agreement to Sell and Purchase Portion A by failing to deliver title to the property to the Hickingbothams upon their tender of payment. The court found Duncan and Ash-Watkins j ointly and severally liable for over $29,000 in damages, plus interest.

Duncan moved the court to amend its findings of fact and conclusions of law. Following briefing, the court granted Duncan’s motion and amended its initial findings of fact and conclusions of law.

In its amended findings of fact and conclusions of law, the court determined that Duncan had not breached the express and implied covenants contained in the warranty deed to Tract 1-A-1. The court reasoned that, pursuant to the terms of the warranty deed, Duncan promised to defend the Hickingbothams from all lawful claims against the property. The court determined that the Ash-Watkins lien was unlawful and held in Duncan’s favor in their construction dispute. Therefore, Duncan had no obligation to defend the Hickingbothams from such an unlawful claim.

The court also amended its ruling as to the Receipt and Agreement to Sell and Purchase Portion A. In its amended findings of fact and conclusions of law, the court determined that the only damages available pursuant to the terms of the Receipt and Agreement to Sell and Purchase was the return of the purchasers’ earnest money. Because no money had been exchanged, no other damages were available.

The Hickingbothams appeal the District Court’s amended findings of fact, conclusions of law and judgment. Duncan cross-appeals the District Court’s award of attorney fees to the Hickingbothams. We affirm in part and reverse in part.

Issue 1

Did the District Court err in amending its original findings of fact, conclusions of law and judgment?

We review trial court rulings such as a ruling on a motion to amend findings of fact, conclusions of law and judgment to determine whether the district court abused its discretion. Montana Rail Link v. Byard (1993), 260 Mont. 331, 337, 860 P.2d 121, 125. We will not overturn a district court’s findings of fact unless they are clearly erroneous. Columbia Grain International v. Cereck (1993), 258 Mont. 414, 417, 852 P.2d 676, 678. We review a district court’s conclusions of law to determine if its interpretation of the law is correct. Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 803 P.2d 601.

A district court may amend or alter its findings of fact, conclusions of law and judgment pursuant to Rule 59(g), M.R.Civ.P. Rule 59(g) states:

A motion to alter or amend the judgment shall be served not later than 10 days after the service of the notice of the entry of the judgment, and may be combined with the motion for a new trial herein provided for. This motion shall be determined within the time provided hereinabove with respect to a motion for a new trial and if the court shall fail to rule on the motion within the 45 day period, the motion shall be deemed denied.

The Hickingbothams raise no procedural challenges to the District Court’s granting of Duncan’s motion to amend, and a review of the record reveals no procedural error. Likewise, the Hickingbothams fail to allege that the court’s amended findings are not supported by substantial credible evidence or that the amended conclusions are incorrect. The Hickingbothams’ primary argument arises from the court’s failure to address the issue of fraud in its findings of fact, conclusions of law and judgment. Because we treat this as a separate issue below, we will address it in no further detail here.

We conclude that the District Court did not abuse its discretion in granting Duncan’s motion to amend the findings of fact and conclusions of law. The court’s amended findings of fact are not clearly erroneous. Likewise, the court’s amended conclusions of law are correct.

Issue 2

Did the District Court err in failing to find that Duncan had committed either actual or constructive fraud?

The Hickingbothams sued Duncan for breach of contract and breach of warranty. At the close of trial, the Hickingbothams moved the District Court to amend the pleadings to conform to the evidence to include a claim for fraud. The District Court granted the motion over Duncan’s objection. However, the District Court did not determine in its amended findings of fact and conclusions of law that Duncan had committed fraud.

The Hickingbothams allege that Duncan committed actual fraud by executing the Receipt and Agreement to Sell and Purchase Portion A while knowing that an impending construction lien by Ash-Watkins was imminent. The Hickingbothams claim that Duncan misrepresented material facts concerning the future marketability of Portion A and that such representations were justifiably relied upon.

We have set forth the elements that must be established in order to prove the existence of actual fraud as follows:

1. a representation;

2. its falsity;

3. its materiality;

4. speaker’s knowledge of the falsity or ignorance of its truth;

5. speaker’s intent that the representation be relied upon;

6. hearer’s ignorance of the falsity;

7. hearer’s reliance on the representation;

8. hearer’s right to rely on the representation; and

9. hearer’s consequent and proximate injury caused by the reliance. Barrett v. Holland and Hart (1992), 256 Mont. 101, 106, 845 P.2d 714, 717.

Duncan agreed to sell Portion A to the Hickingbothams on May 17, 1991. Prior to May 17 Duncan had paid Ash-Watkins over $104,000 on the agreed upon construction price of $100,000. Duncan also knew that Ash-Watkins was seeking an additional $34,000. However, Duncan believed that he owed Ash-Watkins no more money for the construction of his home. Subsequent litigation proved Duncan to be correct.

On May 17, 1991, when Duncan executed the Receipt and Agreement to Sell and Purchase Portion A, there were no construction liens against his property and he had a clear and marketable title to Portion A. Despite the ongoing dispute with Ash-Watkins, Duncan could not have been reasonably expected to foresee the unjust and unwarranted filing of a construction lien against his property. Therefore, any representations made by Duncan on or before May 17,1991, concerning the clear title and marketability of Portion A were not false representations.

The Hickingbothams also contend that Duncan committed constructive fraud. Section 28-2-406, MCA, defines constructive fraud as:

(1) any breach of duty which, without an actually fraudulent intent, gains an advantage to the person in fault or anyone claiming under him by misleading another to his prejudice or to the prejudice of anyone claiming under him; or
(2) any such act or omission as the law especially declares to be fraudulent, without respect to actual fraud.

Duncan had no duty to warn the Hickingbothams about a potential, yet unfiled, warrantless and wrongful construction lien. As discussed above, despite Ash-Watkins’ dispute over construction costs, Duncan cannot be charged with foreseeing that an unjustified construction lien would be filed upon his property.

Secondly, the record reveals no advantage gained by Duncan by entering into the Receipt and Agreement to Sell and Purchase Portion A. Duncan accepted no money for the parcel, nor did he gain any other advantage by entering into the agreement.

We conclude that the District Court did not err in failing to find that Duncan had committed actual or constructive fraud.

Issue 3

Did the District Court err in awarding attorney fees to the Hickingbothams?

Attorney fees are not an element of damages unless expressly provided for by statute or contract. Ehly v. Cady (1984), 212 Mont. 82, 687 P.2d 687. In its amended conclusions of law, the District Court determined that Demean was liable to the Hickingbothams for $781 in attorney fees. The court awarded the attorney fees pursuant to § 27-1-314, MCA, as fees incurred in attempting to remove the liens from Portion A in anticipation of purchase.

Section 27-1-314, MCA, reads:

Breach of agreement to convey real property. The detriment caused by the breach of an agreement to convey an estate in real property is considered to be the price paid and the expenses properly incurred in examining the title and preparing the necessary papers, with interest thereon. If the breach was in bad faith and the agreed price was less than the value of the estate, the detriment is also considered to include the difference between the agreed price and the value of the estate at the time of the breach and the expenses properly incurred in preparing to enter upon the land. [Emphasis added.]

The $781 award of attorney fees was not made in relationship to a title search. Duncan was ordered to pay the Hickingbothams $125 for title search costs, an award that Duncan does not contest. The additional $781 was not a title search expenditure nor an expenditure properly incurred in preparing to enter upon the land and therefore was not provided for under § 27-1-314, MCA. The Hickingbothams have failed to establish that attorney fees under this scenario are provided by any other code section.

Neither does the Agreement to Sell and Purchase Portion A provide for an award of attorney fees; rather, it provides, as the sole remedy, the return of money paid to Duncan by the Hickingbothams. Because the Hickingbothams had paid Duncan no money, no money was therefore returned.

We conclude that the District Court misinterpreted § 27-1-314, MCA, as providing for an award of attorney fees in favor of the Hickingbothams. We hold that Duncan is not liable for attorney fees to the Hickingbothams.

We affirm in part and reverse in part the decision of the District Court.

JUSTICES GRAY, HUNT, TRIEWEILER and LEAPHART concur.


author: JUSTICE LEAPHART

text:
    SANDRA SPENCE, Plaintiff and Respondent, v. MIKE ORTLOFF and ORTLOFF BROTHERS AUTO RESTORATION, Defendants and Appellants.
    No. 95-028.
    Submitted on Briefs June 8, 1995.
    Decided July 17, 1995.
    52 St.Rep. 606.
    898 P.2d 1232.
    271 Mont. 533.

      For Appellants: John C. Doubek; Small, Hatch, Doubek & Pyfer, Helena.
    For Respondent: Russell E. Cater, Attorney at Law, Helena.
   JUSTICE LEAPHART

delivered the Opinion of the Court.

Mike Ortloff and Ortloff Brothers Auto Restoration (collectively, Ortloff) appeal from an order of the First Judicial District Court, Lewis and Clark County, affirming the judgment of the Lewis and Clark County Justice Court, Small Claims Division (Small Claims Court) in favor of Sandra Spence (Spence) and against Ortloff in the amount of $1,024.40. We reverse.

Background

The following rendition of facts is taken from the findings of fact entered by the Small Claims Court. In May of 1994, Spence was involved in an auto accident. She had Ortloff tow her vehicle to his shop. Ortloff began repairs to Spence’s car but, according to the findings entered by the Small Claims Court, Spence had not given Ortloff authorization to begin repairs. Ortloff disputes this point. Spence had to pay Ortloff $1,108.40 before he would release her car. Ortloff included $120 for storage costs in that bill.

Spence brought suit against Ortloff in small claims court. The Small Claims Court held a hearing on the matter on July 8,1994. On July 13, 1994, the Small Claims Court entered its findings of fact, conclusions of law and a judgment in favor of Spence and against Ortloff for $1,024.40. Ortloff appealed the Small Claims Court’s decision to district court.

The District Court attempted to review the record from the Small Claims Court. However, the audio tape that was supposed to contain the record of the hearing in the Small Claims Court was blank. In spite of the lack of any record of the hearing before the Small Claims Court, the District Court affirmed the Small Claims Court’s judgment based on its review of the findings of fact and conclusions of law. Ortloff appeals.

Discussion

Ortloff raises only one issue on appeal: Whether the District Court erred in affirming the Small Claims Court when there was no record of the hearing held in the Small Claims Court.

Spence argues that because § 25-35-803(2), MCA, limits a district court’s review of a small claims court’s decision to questions of law, the district court must take all of the small claims court’s findings as true. We disagree.

Section 25-35-803(2), MCA, states that, on appeal from small claims court to district court, the district court may not conduct a trial de novo. Rather, the appeal shall be limited to questions of law. Although the district court review is limited to questions of law, the question of whether the small claims court’s findings of fact were clearly erroneous is such a question of law. In the absence of a transcript or recording of the trial proceedings, the district court has no basis upon which to determine whether the findings of fact are clearly erroneous.

A reviewing court uses a three-step test to determine whether the findings are clearly erroneous. First, if a court’s findings are not supported by substantial credible evidence, they are clearly erroneous. Second, if a court has misapprehended the effect of the evidence, its findings are clearly erroneous. Third, if a review of the record leaves the reviewing court with the definite and firm conviction that a mistake has been committed, the lower court’s findings are clearly erroneous. Interstate Production Credit Ass’n v. Desaye (1991), 250 Mont. 320, 323, 820 P.2d 1285, 1287.

It is apparent from the test announced in Desaye that a reviewing court must have a record of the lower court proceedings when determining whether the lower court’s findings of fact are clearly erroneous.

In addition, § 25-35-703, MCA, provides that all civil actions tried in a small claims court shall be recorded either electronically or stenographically. Section 25-35-804(2), MCA, provides that when a small claims court decision is appealed, the small claims court shall forward the electronic recording or stenographic record to the district court. It is implicit in the commands of §§ 25-35-703 and -804(2), MCA, that a district court must have the opportunity to review the record from a small claims court.

It is unfortunate that this case must be reversed and remanded simply because the equipment in the Small Claims Court malfunctioned. We urge courts using audio equipment to preserve trial records to regularly test their equipment to make certain that this unfortunate situation does not arise again. Equipment failure results in unnecessary hardship for parties attempting to recover a relatively small judgment by the most efficient legal means available. Moreover, implicit in this admonition is the further requirement that the trial court take pains to insure that the audio record is made in such a fashion that the reviewing court can identify the parties and witnesses and understand the testimony and rulings of the trial court. An audio record that cannot be understood is little better than no record at all. We hold that the District Court erred in affirming the judgment of the Small Claims Court without possessing a sufficient record to review. We reverse and remand to the Small Claims Court for a new hearing.

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