author: JUSTICE GRAY

text:
    TRADERS STATE BANK OF POPLAR, Plaintiff and Respondent, v. JOHN J. MANN and MANN FARMS, INC., Defendants, Third-Party Plaintiffs and Appellants, v. NORTHEAST MONTANA BANK SHARES, INC.; JOHN WITTE; RICHARD LOEGERING; GERALD KREIG; BRUCE A. FREDRICKSON; CHARLES R. CASHMORE; MALCOLM H. GOODRICH; CROWLEY, HAUGHEY, HANSON, TOOLE & DIETRICH, Third-Party Defendants and Respondents.
    No. 92-106.
    Submitted on Briefs December 10, 1992.
    Decided May 13, 1993.
    50 St.Rep. 509.
    852 P.2d 604.
    258 Mont. 226.

      See C.J.S. Judgments § 731.

      For Defendants and Appellants: John J. Mann, Pro Se, Wolf Point; Terry Wallace, Missoula.
    For Plaintiff and Respondent: Bruce A. Fredrickson, Ronald R. Lodders; Crowley, Haughey, Hanson, Toole & Dietrich, Billings.
   JUSTICE GRAY

delivered the Opinion of the Court.

John J. Mann and Mann Farms, Inc. appeal from orders of the Fifteenth Judicial District Court, Roosevelt County, granting summary judgment and dismissing third-party claims. They also appeal an order of the District Court denying a motion to dissolve an injunction. John Mann appeals the contempt order entered against him for refusing to comply with the injunction. We affirm in part, reverse in part and remand.

We phrase the issues on appeal as follows:

1) Does the failure of John Mann and Mann Farms, Inc. to post a supersedeas bond on appeal or otherwise stay the proceedings below render this appeal moot?

2) Did the District Court err in concluding that the claims the Mann Family asserted against the third-party defendants did not constitute sufficient grounds for relief from the Mann I judgment under Rule 60(b), M.R.Civ.P.?

3) Did the District Court err in granting summary judgment for the Bank on its foreclosure complaint?

4) Can the District Court’s grant of summary judgment on foreclosure be upheld as to Mann Farms under the doctrines of judicial estoppel, equitable estoppel or quasi-estoppel?

5) Did the District Court err in refusing to dissolve an injunction and in finding John Mann in contempt for failing to abide by the injunction?

The details surrounding this appeal constitute a morass of factual and procedural intricacies. In 1976, Wilbur, Edna, John and Frances Mann formed Mann Farms, Inc. (Mann Farms). (Mann Farms and the individual Mann family members are referred to collectively herein as the Mann Defendants.) They began banking with Traders State Bank of Poplar (the Bank) and operated for several years on an unsecured basis. Mann Farms’ debt load increased, however, and in 1983, the Bank required security for Mann Farms’ line of credit. The parties began negotiations in late April of 1985 in attempts to reduce the loan balance.

On April 29,1985, the Mann Defendants executed two promissory notes to the Bank. The first note renewed a previous note of $215,000, and the second renewed a previous note of $85,000. On that date, the Mann Defendants also signed a mortgage pledging real property to secure the $300,000 of existing debt (the $215,000 and the $85,000 debts evidenced by the renewal notes) and $150,000 of contemplated future advances. In addition, they executed four security agreements, which were:

• A security agreement covering crops, livestock and farm equipment and vehicles signed on April 29, 1985 by John Mann, Frances Mann, Wilbur Mann, and Edna Maim, individually and as officers of Mann Farms as security for notes totalling $300,000;
• A security agreement covering a 1962 11/2 ton truck signed on May 15,1985, by Wilbur Mann as security for the $215,000 note;
• A security agreement covering various farm vehicles signed on May 15, 1985 by John Mann as president of Mann Farms as security for the $215,000 note; and
• A security agreement covering livestock signed on May 13,1985, by Patricia Mann Mingus as security for notes totalling $300,000 (Patricia Mingus is not a party to this appeal but had ownership interest in the cattle).

On May 1,1985, the Bank advanced the Mann Defendants $7,500, which was evidenced by a promissory note and designated by the Bank as operating money for 1985. Around this time, the Bank approved two additional conditional loans of $25,000 each. Due to disagreements over the collateral for the conditional loans, the funds were not advanced.

On May 15,1987, Mann Farms filed for bankruptcy under Chapter 12 of the United States Bankruptcy Code. On March 28, 1988, the Mann Defendants filed a tort claim against the Bank alleging, among other things, breach of the covenant of good faith and fair dealing and breach of fiduciary duty.

As required by the Bankruptcy Act, Mann Farms then filed its plan of reorganization and characterized the debt with the Bank as disputed. The reorganization plan specified that the Bank’s lien status would be determined in conjunction with the bad faith action in state court. The Bank immediately contested the plan, arguing that Mann Farms could not seek to cancel the notes in state court and simultaneously seek to restructure the notes in the bankruptcy action. Mann Farms amended its plan of reorganization, and included the following clause:

The Debtor will not contest the validity of notes, mortgages, or security interests of the Bank in state court or by adversary proceedings in this court. Debtor does intend to pursue the state court action previously commenced by the debtor, insofar as prosecution of the debtor’s tort claims are concerned.

On June 22, 1988, the United States Bankruptcy Court for the District of Montana approved the amended plan of reorganization, and the Bank appealed to the United States District Court. That court also affirmed the amended plan, and the Bank appealed to the United States Court of Appeals for the Ninth Circuit, arguing that the state court tort action would restructure de facto its status in the bankruptcy plan. The Ninth Circuit concluded that the tort claims were independent of the contractual rights of the parties and, therefore, that the Mann Defendants’ action for tort damages in state court could not affect the approved plan of reorganization. In re Mann Farms, Inc. (9th Cir. 1990), 917 F.2d 1210, 1213.

Meanwhile, in state court, the District Court granted summary judgment in favor of the Bank on the tort claims. We affirmed in Mann Farms, Inc. v. Traders State Bank (1990), 245 Mont. 234, 801 P.2d 73 (Mann I)-

On April 19,1991, the United States Bankruptcy Court dismissed Mann Farms’ bankruptcy proceeding; final decree closing the case was filed May 28,1991. Two months later, the Bank filed a complaint against the Mann Defendants, seeking judgment on the promissory notes signed April 29 and May 1,1985, which totalled $307,500, and foreclosure of the security agreements and mortgage described above. The complaint alleged that on May 15, 1987, the Mann Defendants had defaulted on the notes and that, at the time of the complaint, they owed the Bank $575,709.85. The Bank also sought to foreclose on a March 23,1984, security agreement covering crops, cattle, and farm equipment signed by John Mann as president of Mann Farms as security for notes totalling $305,100.

John, Frances, Wilbur and Edna Mann (the Mann Family), appearing pro se, answered the foreclosure complaint by generally denying its allegations. They also asserted third-party claims against Northeast Montana Bank Shares (the holding company for Traders State Bank of Poplar) and two bank employees, John Witte and Richard Loegering (the Bank Defendants), alleging that the Bank Defendants had committed fraud upon the court in the earlier bad faith action. Additionally, they asserted third-party claims against Bruce Fredrickson, Charles Cashmore, Malcolm Goodrich, and the law firm of Crowley, Haughey, Hanson, Toole & Dietrich (the Lawyer Defendants), claiming that the Lawyer Defendants had assisted in perpetrating this alleged fraud. They also asserted third-party claims against district court judge James Sorte, for abandoning his judicial function in the bad faith action, and against First Citizens Bank of Wolf Point, for conspiring with the Bank to subvert the judicial process.

On August 12,1991, John Mann, acting in his capacity as president of Mann Farms, transferred all assets held by Mann Farms into the Mann Family Trust. The Bank then sought an injunction requiring the Mann Defendants to provide an accounting of all proceeds received from any sale of the Bank’s collateral and to execute certain financing statements; the Bank also asked the court to enjoin the Mann Defendants from disposing of any of the Bank’s collateral and from retaining any proceeds that may have been obtained from the collateral.

Upon motion of the Bank, on September 3,1991, the District Court entered a default judgment on the foreclosure claim against Mann Farms for failing to respond to the foreclosure complaint.

Judge Sorte and First Citizens Bank of Wolf Point moved to dismiss the third-party claims. The Bank Defendants and the Lawyer Defendants moved for summary judgment on the third-party claims asserted against them. After a hearing on the motions on October 3, 1991, the District Court dismissed the Mann Family’s third-party claims against Judge Sorte and First Citizens Bank of Wolf Point. The court also granted the Lawyer Defendants and the Bank Defendants’ motions for summary judgment and issued the injunction requested by the Bank.

On November 4,1991, counsel appeared on behalf on Mann Farms. On November 15, Mann Farms moved to set aside the default judgment entered against it. The District Court set aside the default judgment and allowed Mann Farms to file an answer. Mann Farms’ answer generally denied the foreclosure allegations and asserted various affirmative defenses. John Mann and the other family members continued to represent themselves pro se.

The Bank also moved for summary judgment on its foreclosure complaint. In response, Mann Farms moved for summary judgment on that issue; the Mann Family contended that summary judgment was improper because genuine issues of material fact existed regarding the foreclosure complaint. The Bank requested the District Court to hold the Mann Defendants in contempt for their continued failure to comply with the requirements of the October preliminary injunction.

On December 20, 1991, a hearing was held on the remaining motions. Mann Farms orally moved to dissolve the injunction; the court denied the motion. After testimony and oral argument, the District Court granted summary judgment for the Bank on the issue of foreclosure. In a separate order, the District Court also found each Mann family member to be in contempt of court for failing to comply with its earlier injunction. This appeal follows.

During the lower court proceedings, John, Frances, Edna and Wilbur Mann signed the pleadings individually and represented themselves pro se. On appeal, we note that only John Mann and Mann Farms have filed a notices of appeal. In Montana, a non-lawyer may represent himself or herself, but only attorneys may practice law and represent others. Weaver v. Law Firm of Graybill, et al. (1990), 246 Mont. 175, 178, 803 P.2d 1089, 1091; § 37-61-210, MCA. John Mann may not appeal on behalf of Frances, Wilbur and Edna Mann. Therefore, John Mann and Mann Farms are the only appellants properly before this Court.

Does the failure of John Mann and Mann Farms, Inc. to post a supersedeas bond on appeal or otherwise stay the proceedings below render this appeal moot?

As a threshold issue, the Bank argues that because it has foreclosed upon the security for the debt, and neither John Mann nor Mann Farms posted a supersedeas bond or stayed the lower proceedings, this appeal is moot. It cites First Sec. Bank of Kalispell v. Income Properties, Inc. (1984), 208 Mont. 121, 126, 675 P.2d 982, 985, which held that a defendant is considered to have acquiesced in a judgment if a bond is not posted or a stay of proceedings obtained, citing Gallatin Trust & Sav. Bank v. Henke (1969), 154 Mont. 170, 461 P.2d 448.

Since First Sec. Bank was decided, we have held that where payment or performance of a judgment by an appellant is involuntary, the appellant does not acquiesce to the judgment and the right to appeal is not affected. LeClair v. Reiter (1988), 233 Mont. 332, 335,

760 P.2d 740, 742 (emphasis added). In LeClair, the respondents foreclosed on a contract for deed and filed the quitclaim deeds prior to our review. Like the Bank in this case, the respondents argued that because they repossessed the property and the appellant had not filed a supersedeas bond or otherwise stayed execution, the appeal was moot. LeClair, 760 P.2d at 742. We expressly overruled Henke and, in effect First Sec. Bank, and held that the appeal was not moot because the defendant had not voluntarily surrendered the property. LeClair, 760 P.2d at 742; First Nat’l Bank in Eureka v. Giles (Mont. 1987), 225 Mont. 467, 733 P.2d 357, 43 St.Rep. 1326, 1328.

As in LeClair, Mann Farms and John Mann did not voluntarily relinquish their real estate and personal property to the Bank; the Bank foreclosed. We conclude that the failure to post a supersedeas bond or otherwise stay the proceedings below does not render Mann Farms and John Mann’s appeal moot.

Did the District Court err in concluding that the claims the Mann Family asserted against the third-party defendants did not constitute sufficient grounds for relief from the Mann I judgment pursuant to Rule 60(b), M.R.Civ.P.?

In response to the Bank’s foreclosure complaint, the Mann Family set forth a variety of third-party claims. John Mann appeals only the dismissal of the third-party claims against the Bank Defendants and the Lawyer Defendants. The substance of those claims, as paraphrased by this Court, are:

• that the Bank Defendants conspired with the Lawyer Defendants to deceive the court and subvert justice in Mann I;
that Bank Defendant Loegering and Lawyer Defendant Fredrickson perjured themselves during testimony and argument in Mann I;
that the Lawyer Defendants used “forceful argument” and “artful pleading” to develop a fictitious theory of the case that misled the district court in Mann I; and
• that the Lawyer Defendants misrepresented facts to the district court in Mann I.

We note initially that although these allegations originally were pled as third-party claims, John Mann testified at the October 3, 1991, hearing on the third-party claims that the claims were filed under Rule 60(b), M.R.Civ.R, and had no standing outside of that rule. The District Court concluded that, even if all the allegations against the Lawyer Defendants and the Bank Defendants were true, the claims did not constitute sufficient grounds for maintaining an independent equitable action to set aside the judgment under Rule 60(b), M.R.Civ.P. The District Court also set forth alternative bases for granting summary judgment in favor of both the Lawyer Defendants and the Bank Defendants. Because we find Rule 60(b), M.R.Civ.P., dispositive, we need not address the alternative theories.

We have stated that a party seeking relief from a judgment through an independent equitable action under Rule 60(b) has three avenues of relief: extrinsic fraud, lack of personal notification, and fraud upon the court. Salway v. Arkava (1985), 215 Mont. 135, 140, 695 P.2d 1302, 1305; Brown v. Small (1992), 251 Mont. 414, 420, 825 P.2d 1209, 1213. Lack of personal notification is inapplicable to the present case; accordingly, we examine the third-party claims to determine whether extrinsic fraud or fraud upon the court provide sufficient grounds for the Rule 60(b) action.

Extrinsic fraud is defined as fraud that has prevented the unsuccessful party from presenting his or her case. Extrinsic fraud is collateral to the matters tried by the court and is not fraud in the matters on which the judgment was rendered. Brown v. Jensen (1988), 231 Mont. 340, 346, 753 P.2d 870, 874. We have held repeatedly that neither perjured testimony nor false or fraudulent allegations used in obtaining a judgment constitute extrinsic fraud. Jensen, 753 P.2d at 875; Salway, 695 P.2d at 1307.

It is apparent that none of the Mann family’s allegations, even if taken as true, constitute extrinsic fraud. None of the allegations regarding the Lawyer Defendants or the Bank Defendants are collateral to the action in Mann I; all focus on alleged fraud during the proceedings in Mann I. Accordingly, we conclude that the Mann family’s allegations are insufficient for relief from the judgment for extrinsic fraud pursuant to Rule 60(b), M.R.Civ.P.

Rule 60(b), M.R.Civ.P. also allows relief from a judgment for “fraud upon the court.” We have characterized fraud upon the court as that species of fraud which subverts or attempts to subvert the integrity of the court itself. Salway, 695 P.2d at 1306; Small, 825 P.2d at 1213. Fraud which attempts to defile the court has been construed to include only the most egregious conduct, such as bribery of a judge or member of the jury or the fabrication of evidence in which an attorney has been implicated. Salway, 695 P.2d at 1306.

In this case, the record does not support any of the Mann family’s allegations, nor do such allegations, even if supported by the record, constitute fraud upon the court. Fraud between the parties, without more, does not rise to the level of fraud upon the court. Small, 825 P.2d at 1213. John Mann can point to no outside influence on the judicial proceedings in Mann I; the claims, even if true, would constitute fraud between the parties. Additionally, “forceful argument” and “artful pleading” do not rise to the egregious conduct contemplated by this rule, but more closely relate to the Lawyer Defendants’ exercise of their duty to zealously represent their client.

Because John Mann can demonstrate neither extrinsic fraud nor fraud upon the court, we hold that the District Court did not err in concluding that the third-party claims Mann asserted against the Bank Defendants and Lawyer Defendants did not constitute sufficient grounds for maintaining an independent equitable action for relief from the Mann I judgment under Rule 60(b), M.R.Civ.P.

Did the District Court err in granting summary judgment for the Bank on its foreclosure complaint?

The District Court granted the Bank’s summary judgment motion on its foreclosure complaint and issued findings of fact, conclusions of law and a decree of foreclosure. It concluded that the Bank had established a prima facie case of foreclosure and that all of the Mann Defendants’ defenses to foreclosure were barred under the doctrine of res judicata. Specifically, the court opined that the gravamen of the defenses was that the Bank committed some form of fraud in its lending relationship, and that those matters were raised or could have been raised in Mann I. The court also set forth additional legal doctrines supporting its decision.

Our standard in reviewing a grant of summary judgment is the same as that initially utilized by the trial court. McCracken v. City of Chinook (1990), 242 Mont. 21, 24, 788 P.2d 892, 894. Summary judgment is appropriate when the pleadings, depositions, and other documents on file demonstrate that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P. With that standard in mind, we review the District Court’s decision.

The District Court’s grant of summary judgment turned on its conclusion that res judicata barred all of the Mann Defendants’ defenses. Having essentially removed the defenses from consideration, the District Court then concluded that no genuine issue of material fact remained and the Bank was entitled to judgment as a matter of law. Therefore, we initially review whether the District Court correctly concluded that res judicata barred the defenses asserted by the Mann Defendants; our review of legal conclusions is plenary. See Steer, Inc. v. Dep’t of Revenue (1990), 245 Mont. 470, 475, 803 P.2d 601, 603.

The principle underlying the doctrine of res judicata is that a party is prohibited from relitigating a matter that the party has already had an opportunity to litigate. Whirry v. Swanson (1992), 254 Mont. 248, 250, 836 P.2d 1227,1228. The four criteria for res judicata are:

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

Whirry, 836 P.2d at 1228. Furthermore, once there has been full opportunity to present an issue for judicial decision in a given proceeding, the determination of the court in that proceeding must be accorded finality as to all issues raised or which fairly could have been raised. Filler v. Richland County (1991), 247 Mont. 285, 291, 806 P.2d 537, 541.

In this case, the parties are the same in both actions; the Mann Defendants sued the Bank in Mann I, and the Bank’s foreclosure complaint named all Mann Defendants as defendants in the present action. The subject matter is also generally the same; both suits revolve around the banking relationship between the Bank and the Mann Defendants.

As in Whirry, the third element — whether the issues are the same — is the key element here. In order to determine that the issues are the same, the fundamental or essential question involved in the second case must have been raised and determined in the first case. Whirry, 836 P.2d at 1229, citing Baertsch v. County of Lewis and Clark (1986), 223 Mont. 206, 727 P.2d 504. Thus, scrutiny of the precise questions involved in Mann I and those involved in the present case is necessary.

In Mann I, the complaint against the Bank alleged tort claims, including breach of the covenant of good faith and fair dealing, negligent misrepresentation, and breach of fiduciary duty. As paraphrased by the District Court, the facts supporting the Mann Defendants’ tort claims in Mann I were:

1. The Bank’s decision to withdraw $25,000 of conditional operating credit in 1985.

2. The Bank’s discussions with Citizens First National Bank of Wolf Point regarding Mann Farms’ financial situation.

3. The Bank’s refusal to loan operating funds to Mann Farms during the spring of 1986. .

4. The SBA’s refusal to loan disaster relief funds unless certain conditions were met.

Here, the Bank’s complaint alleged its prima facie case of foreclosure. The Mann Family generally denied the foreclosure allegations in their answer and, in response to the Bank’s motion for summary judgment, set forth in detail a multiplicity of defenses to foreclosure. Mann Farms’ answer also included defenses. The majority of the Mann Defendants’ defenses to foreclosure sounded in contract; however, a few asserted defenses were tort-related. We address first whether res judicata bars the Mann Defendants’ contract-related defenses.

Although the events surrounding both suits occurred in the same time frame, the issues presented in the tort action are distinct from those inherent in the contract defenses raised to the foreclosure complaint. The issues in the first case were the Mann Defendants’ allegations of tortious conduct by the Bank over an extended period of time and their resulting entitlement to damages. The fundamental question raised and determined in Mann I was whether the Bank’s conduct in dealing with the Mann Defendants violated a standard of due care. The fundamental question here is whether the mortgage, security interests and notes are valid and enforceable contracts. We conclude that the issues involved in Mann I were different from those raised by the contract defenses to foreclosure in this case.

We find support for this conclusion in Bras v. First Bank & Trust Co. (Okla. 1985), 735 P.2d 329, a closely analogous case. In Bras, the bank foreclosed upon notes executed by the debtor, and the debtor raised the defense of illegality of the notes due to self-dealing by the bank. The bank was granted summary judgment on the notes. Bras, 735 P.2d at 330. The debtor then sued the bank in tort, alleging conspiracy to commit fraud based on circumstances surrounding the original loan. The Oklahoma Supreme Court concluded that his second suit was not barred by the first, stating:

The [initial] summary judgment ... necessarily determined that the petitioner was primarily liable on the note and that such note was not illegal because of any “self-dealing.” Unlike the former action, the present one contains allegations of conspiracy to commit fraud. We find no common elements between the fraud action, a tort claim involving misrepresentation, and the contract action in which illegal self-dealing was raised as a defense to the validity of the note.

Bras, 735 P.2d at 333. Although the Mann cases occurred in reverse order, the same is true here. The tort issues involved in Mann I and the contract issues raised by the Mann Defendants’ contract-related defenses to foreclosure are not the same; therefore, res judicata does not bar the defenses to foreclosure.

The Bank argues that although the validity of the notes was not raised and determined in the first case, that issue fairly should have been raised in Mann I. The Bank is correct that res judicata prohibits both claims that were raised and claims that should have been raised from being relitigated. Higham v. City of Red Lodge (1991), 247 Mont. 400, 403, 807 P.2d 195, 197. We disagree, however, that the Mann Defendants’ defenses contesting the validity of the notes should have been raised in Mann I.

Mann Farms filed for bankruptcy on May 15, 1987, and the bankruptcy proceedings were eventually dismissed and closed in May of 1991. The Maim Defendants commenced their tort action in Mann I in March of 1988, and this Court affirmed the District Court’s grant of summary judgment on November 8,1990. The entirety of the tort action took place during the period Mann Farms was in bankruptcy. During the pendency of Mann Farms’ bankruptcy proceeding, and pursuant to its plan of reorganization, the debtor could not challenge the validity of the notes and security interests. The plan also specifically allowed Mann Farms to proceed with the tort claims in state court. The Bankruptcy Court, the United States District Court and the Ninth Circuit Court of Appeals all approved Mann Farms’ amended plan of reorganization. See In re Mann Farms, Inc., 917 F.2d at 1215.

The Ninth Circuit opinion also makes clear that Mann Farms’ agreement not to contest the validity of the notes was contingent on the implementation of the bankruptcy plan of reorganization, by noting “the debtor’s agreement not to relitigate the matters concluded by the approved plan ....” In re Mann Farms, Inc., 917 F.2d at 1213 (emphasis added). Here, however, the bankruptcy action ultimately was dismissed, and the reorganization plan was not implemented; thus, issues surrounding the validity of the debt to the Bank were never concluded pursuant to the approved plan. Under such circumstances, Mann Farms’ agreement not to “relitigate” those matters was extinguished when the bankruptcy action was dismissed.

The bankruptcy action was formally closed on May 28,1991, some months after our decision in Mann I. Only then could the Bank foreclose on the notes, and only then could Mann Farms assert any claims it had regarding the validity of the loan documents. Had Mann Farms’ bankruptcy been pursued to a final conclusion and the debts discharged or restructured, Mann Farms could not have contested the validity of those documents; nor would such a challenge have been necessary.

We conclude that the District Court’s determination that the Mann Defendants could have raised their contract-related defenses to the notes in the earlier action is incorrect. Therefore, we hold that the District Court erred in granting summary judgment to the Bank on the basis that res judicata barred the Mann Defendants’ contract-related defenses.

For similar reasons, the District Court did not err in concluding that the Mann Defendants’ tort-related defenses were precluded by res judicata. For example, the Mann Family raised questions regarding whether the Bank owed the Manns a “general duty of care” and whether the Bank was “negligent” in its dealings with the Manns in their response to the Bank’s motion for summary judgment. Mann Farms’ answer included the affirmative defense of “contributory negligence.” Pursuant to our analysis and discussion above, we conclude that tort-based allegations or defenses raised by the Mann Defendants which do not directly concern the contractual defenses to the notes, mortgage, and security interests at issue are barred by res judicata because they could have been raised in the earlier tort action.

Having determined that the Mann Defendants’ contract-related defenses are not barred by res judicata the issue is whether genuine issues of disputed fact remain and whether the moving party is entitled to judgment as a matter of law on those defenses. To prevail on summary judgment, the initial burden on the Bank, as the moving party, is to establish that the evidence raises no genuine issue of material fact. Mayer Bros. v. Daniel Richard Jewelers (1986), 223 Mont. 397, 399, 726 P.2d 815, 816. As noted above, the District Court found that the Maim Defendants had executed the promissory notes, security agreements and mortgage at issue and that the Mann Defendants were in default on those instruments. It concluded that the Bank had established a prima facie case for foreclosure and, therefore, had met its initial burden on summary judgment. We agree.

When the movant has met this initial burden, the burden shifts to the party opposing summary judgment to show by present facts of a substantial nature that a material fact issue does exist. Mayer, 726 P.2d at 816. The party opposing summary judgment may not rest upon the mere allegations of the pleadings, but has an affirmative duty to respond by affidavits or sworn testimony with specific facts that show a genuine issue of fact remains for trial. See Mayer, 726 P.2d at 816-7. Conclusory or speculative statements or allegations in pleadings, arguments in briefs, and arguments made by counsel do not constitute sufficient factual evidence to carry the non-moving party’s burden. See Sprunk v. First Bank System (1992), 252 Mont. 463, 466-7, 830 P.2d 103, 104-5; Mayer, 726 P.2d at 817; Eitel v. Ryan (1988), 231 Mont. 174, 178, 751 P.2d 682, 684.

Because of its conclusion that res judicata barred the Mann Defendants’ defenses to foreclosure, the District Court did not reach the question of whether the Mann Defendants had met their burden in opposing summary judgment on the matter of foreclosure. We have determined that the District Court erred in concluding that res judicata barred the Mann Defendants’ contract-related defenses. Thus, the question of whether the Mann Defendants have presented sufficient factual evidence to demonstrate a genuine issue of fact on the contract-related defenses remains to be determined by the District Court on the basis of the record before it.

Can the District Court’s grant of summary judgment on foreclosure be upheld as to Mann Farms under the doctrines of judicial estoppel, equitable estoppel or quasi-estoppel?

As an alternative basis for summary judgment, the District Court concluded that judicial estoppel, equitable estoppel and quasi-estoppel barred Mann Farms from disputing the validity of the debt instruments in the foreclosure action. The District Court did not apply the estoppel doctrines to the Mann Family. Although the parties do not argue these doctrines on appeal, this Court will examine the record to determine whether separate support exists for the District Court’s result. See Wolfe v. Webb (1992), 251 Mont. 217, 234, 824 P.2d 240, 250. We conclude that the aforementioned doctrines do not bar Mann Farms from contesting the documents in this case.

Judicial estoppel binds a party to his or her judicial declarations, and precludes a party from contradicting those declarations in a subsequent action or proceeding. DeMers v. Rancor, Inc. (1991), 249 Mont. 176, 180, 814 P.2d 999, 1001. The District Court concluded that the following clause in Mann Farms’ reorganization plan for bankruptcy triggered the doctrine:

The Debtor will not contest the validity of notes, mortgages, or security interests of the Bank in state court or by adversary proceedings in this court.

The court concluded that because Mann Farms had asserted this proposition in bankruptcy proceedings, it could not challenge the documents in defense of foreclosure.

The elements of judicial estoppel are:

1) the party being estopped must have knowledge of the facts at the time the original position is taken;
2) the party must have succeeded in maintaining the original position;
3) the position presently taken must be actually inconsistent with the original position; and
4) the original position must have misled the adverse party so that allowing the estopped party to change its position would injuriously affect the adverse party.

DeMers, 814 P.2d at 1001-2. Applying those factors to the present case, it is clear that neither element two nor element four is satisfied here.

Mann Farms’ bankruptcy proceeding was dismissed in May of 1991. Mann Farms did not “succeed” in its bankruptcy proceeding; its debts were not discharged nor its reorganization plan fully implemented. We stated in DeMers that acquiring a judgment in its favor is not always necessary to satisfy this element, but the party must have been at least successful in arguing its original position against the party asserting the estoppel. DeMers, 814 P.2d at 1002. The record contains no evidence that would allow us to conclude that Mann Farms successfully maintained the reorganization plan and the pertinent clause against the Bank.

Furthermore, the record is devoid of evidence that the Bank was misled by Mann Farms’ original position or that allowing Mann Farms to change its position adversely affects the Bank. On the contrary, under the reorganization plan, the Bank was to receive a $263,467.03 “cram down” debt in periodic payments. After foreclosure, the Bank had at its disposal a foreclosure sale and the possibility of a deficiency judgment against the individual Mann family members — for the full amount of its debt. We conclude that the clause in Mann Farms’ reorganization plan, a plan that was ultimately dismissed, does not trigger judicial estoppel and Mann Farms is not barred from challenging the validity of the security agreements in foreclosure proceedings.

For similar reasons, the doctrines of equitable estoppel and quasi-estoppel are inapplicable to the present case. Equitable estoppel requires reliance by the party asserting the estoppel on an act or representation, and this reliance must induce the party asserting estoppel to change its position for the worse. Wassberg v. Anaconda Copper Co. (1985), 215 Mont. 309, 316, 697 P.2d 909, 914. Although this Court has not defined “quasi-estoppel,” the phrase is used interchangeably with equitable estoppel. See 28 Am. Jur.2d Estoppel and Waiver § 29 (1966). As discussed above, the record contains no evidence that would support the application of the estoppel doctrines.

Did the District Court err in refusing to dissolve an injunction and in finding John Mann in contempt for failing to abide by the injunction?

On September 19, 1991, the Bank applied for a preliminary injunction under § 27-19-201, MCA, against the Mann Defendants. On October 3, 1991, following the evidentiary show cause hearing, the District Court issued the requested injunction. The Mann Defendants refused to comply with the terms, and the District Court issued an order requiring the Mann Defendants to appear and show cause why they should not be held in contempt for failing to comply with the October injunction. At the show cause hearing in December, Mann Farms orally moved to dissolve the injunction; the District Court denied the motion and found the Mann Defendants in contempt.

Mann Farms argues that the District Court erred in denying its motion to dissolve the injunction; in essence, this argument goes to the propriety of the District Court’s decision to issue the injunction itself. Mann Farms contends that the District Court issued the injunction without any legal authority, and that the injunction improperly resolved a contested issue regarding alleged lapsed security interests. The Bank, on the other hand, argues that the injunction was properly issued pursuant to § 27-19-201, MCA.

The injunction in question contained six integral provisions. Mann Farms challenges only the following provision of the injunction:

It is further ordered that the Mann Defendants complete the following affirmative acts:
To execute the appropriate security documents, including security agreements and Uniform Commercial Code Financing Statements, which documents are necessary to maintain the Bank’s security and priority positions in its collateral pending appropriate resolution of the above captioned litigation, and in order to bring the Bank’s security documents into conformity with the Food Security Act of 1985.

Section 27-19-201, MCA, lists the specific circumstances under which a District Court may issue a preliminary injunction. The District Court did not include supporting findings of fact and conclusions of law when it issued this injunction in October of 1991. We have specifically required that findings of fact and conclusions of law must accompany preliminary injunctions. Ensley v. Murphy (1983), 202 Mont. 406, 408, 658 P.2d 418, 419. Rule 52(a), M.R.Civ.P., expressly provides that:

[I]n granting or refusing interlocutory injunctions the court shall similarly set forth the findings of fact and conclusions of law which constitute the grounds of its action.

An important purpose of findings of fact and conclusions of law is to aid the appellate court in its review of the decision. See Continental Realty, Inc. v. Gerry (1991), 251 Mont. 150,153, 822 P.2d 1083,1085.

As in Ensley, we have no basis for determining whether the disputed portion of the October injunction was properly included. We cannot ascertain the facts on which the District Court relied or the legal basis on which it issued the injunction or the order denying Mann Farms’ motion to dissolve it. Consequently, we cannot properly determine whether the District Court erred. Therefore, we vacate the preliminary injunction and remand for reconsideration and entry of findings and conclusions. See Ensley, 658 P.2d at 419.

Finally, John Mann also filed a notice of appeal of the order finding him in contempt for failing to abide by the injunction. Contempt orders generally are not appealable in Montana. Section 3-1-523, MCA, states in relevant part:

Judgment and orders in contempt cases final. The judgment and orders of the court or judge made in cases of contempt are final and conclusive. There is no appeal, but the action of a district court or judge can be reviewed on a writ of certiorari by the supreme court....

John Mann has not filed the appropriate writ as directed by the statute. This issue, therefore, is not properly before this Court.

As a final matter we note that, by order dated October 14, 1992, this Court denied a motion by the Bank to strike John Mann’s briefs and for sanctions; we stated therein that we would address the issue of sanctions against John Mann in our decision on appeal. In light of our determinations herein, we conclude that further consideration of the issue of sanctions is inappropriate at this time.

Affirmed in part, reversed in part and remanded for further proceedings consistent with this opinion.

JUSTICES HARRISON, HUNT, McDONOUGH and TRIEWEILER concur.


source: Caselaw Access Project

author: JUSTICE McDONOUGH JUSTICE TRIEWEILER

license: Public Domain

text:
    BETTY L. TONACK, Plaintiff and Respondent, v. MONTANA BANK OF BILLINGS, Defendant and Appellant.
    No. 92-343.
    Submitted on Briefs January 14, 1993.
    Rehearing Denied June 10, 1993.
    Decided May 13, 1993.
    50 St.Rep. 518.
    854 P.2d 326.
    258 Mont. 247.

      See C.J.S. Civil Rights § 193.

      For Defendant and Appellant: Jeanne M. Bender, Michael B. Anderson, Holland & Hart, Billings.
    For Plaintiff and Respondent: A. Clifford Edwards, Kevin M. Funyak, Edwards Law Firm, Billings.
   JUSTICE McDONOUGH

delivered the Opinion of the Court.

Montana Bank of Billings appeals from a judgment entered against it in the District Court for the Thirteenth Judicial District, Yellowstone County. The court awarded Betty L. Tonack $111,270 in damages on her claims of wrongful discharge and age discrimination. We affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.

We restate the dispositive issues as:

1. Are certain findings of fact concerning the claim of violation of the Age Discrimination in Employment Act clearly erroneous?

2. Did the District Court incorrectly interpret or misapply the provisions of the Age Discrimination in Employment Act?

3. Did the District Court incorrectly interpret or misapply the provisions of the Wrongful Discharge Act?

Betty Tonack began working for the Montana Bank of Sidney in 1981. When she began working there, Tonack held a teller position. She was promoted to teller supervisor. In October 1988, she took a job with the Montana Bank of Billings, with which the bank in Sidney was affiliated. When she moved to Billings, she became the bank’s Financial Services Representative (FSR).

■ In January of 1990, Tonack’s performance as an FSR was evaluated as fully satisfactory; “more toward the excellent side.” She was given additional duties and responsibilities as a teller supervisor in addition to her duties as the FSR.

In May 1990, Lynette Kiedrowski became Tonack’s new supervisor. In August 1990, after irregularities were discovered in a bank audit, Kiedrowski placed Tonack on a 30-day probation. The irregularities included a theft that had occurred in the travelers check area of the bank. The area in which the theft occurred was not under Tonack’s supervision and the theft occurred while Tonack was away on vacation. When she placed Tonack on probation, Kiedrowski also relieved her of all duties other than her FSR duties.

While she was still on probation, Tonack became aware that the bank had ordered calling cards prepared for a newly-hired bank employee, Rhonda Kreamer, which showed Kreamer’s job title as FSR. The bank had only one FSR position. Also, Kiedrowski instructed Tonack to cross-train Kreamer to serve as backup FSR.

During the week the training was to occur, Kiedrowski was out of town. The person who had been expected to cover for Kreamer during training failed to report to work. Tonack therefore decided to postpone the training. Kreamer resigned. When Kiedrowski returned, she immediately met with Tonack and terminated Tonack’s employment. Tonack was 49 years old at that time.

The parties waived jury trial and the case was tried to the court. After hearing the evidence, the court concluded that Tonack was terminated from her employment in violation of both the Montana Wrongful Discharge From Employment Act (Wrongful Discharge Act), §§ 39-2-901 to 914, MCA, and the federal Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621-634. It awarded Tonack damages under the Wrongful Discharge Act for four years of future lost wages and benefits. In addition, the court awarded damages under the ADEA, calculating those damages from the last date of damages awarded under the Wrongful Discharge Act to Tonack’s expected date of retirement.

I

Are certain findings of fact concerning the claim of violation of the Age Discrimination in Employment Act clearly erroneous?

The bank challenges eighteen of the District Court’s findings of fact. Here, we address only those findings relating to the ADEA claim.

This Court will affirm findings of fact if they are not clearly erroneous; that is, if they are supported by substantial evidence, the trial court has not misapprehended the effect of the evidence, and this Court is not left with a definite and firm conviction that a mistake has been made. Interstate Production Credit v. DeSaye (1991), 250 Mont. 320, 323, 820 P.2d 1285, 1287. The credibility and weight given evidence and witnesses by the trial court must be granted great weight on appeal. Morning Star Enterprises v. R.H. Grover (1991), 247 Mont. 105, 113, 805 P.2d 553, 558. It is the duty of the trial court, not this Court, to resolve conflicts in the evidence. Wood v. Ulmer’s Car and Truck (1989), 236 Mont. 353, 359, 769 P.2d 1264, 1268.

The bank challenges the findings that there were no reviews of Tonack’s performance as FSR during her 30 days of probation and that her performance in that position was satisfactory. The record contains Kiedrowski’s notes made following the meeting in which she placed Tonack on probation, but we do not consider those informal notes as a performance review. Tonack’s last written performance evaluation of record was done by Kiedrowski in May 1990. That evaluation indicated that Tonack was performing “at standard” as FSR/CSR Supervisor. Tonack’s exhibits establish that she received the bank’s “MVP” award for outstanding sales efforts for the month of September 1990, supporting the finding that her performance as FSR was in fact above average.

The Bank claims there is no evidence to support the findings that Tonack was replaced by a substantially younger employee. A portion of Kiedrowski’s deposition appended to a brief filed in District Court established that Rhonda Kreamer withdrew her resignation and assumed some of Tonack’s duties after Tonack’s employment was terminated. Tonack testified at trial that Kreamer “was a much younger person than I.”

The bank challenges several findings concerning statements of George Balback, the president of Montana Bancsystem, the holding company for the bank. Gary Nichols, vice-president of the bank until August of 1990, testified about conversations he had with Balback between January and August of 1990. In those conversations, Balback expressed that he did not believe Tonack was right for her position because of her age and background. Although the bank contends that there was no testimony that Balback said Tonack should be fired because of her age, Nichols’ testimony is clearly to that effect. Nichols testified that Balback stated that he had encouraged those responsible to make a change because he did not want Tonack in the FSR position and that he felt Kiedrowski would “get it handled.”

The bank challenges the finding that Balback could influence hiring and firing. That finding is supported by Nichols’ testimony that Balback had the authority to prevent him from making Tonack teller supervisor.

We hold that substantial evidence supports the above findings and that the court did not misapprehend the effect of the evidence. The findings do not leave us with the impression that a mistake has been made.

II

Did the District Court incorrectly interpret or misapply the provisions of the ADEA?

The bank claims that Tonack’s ADEA case was fatally flawed in that Tonack did not establish the necessary element of pretext. It alleges that the court incorrectly characterized certain evidence as “direct evidence” and challenges certain findings made by the District Court.

To establish a prima facie case of age discrimination under the ADEA, a plaintiff must either provide direct evidence of discrimination or produce evidence that 1) she was in the protected age group; 2) she was performing her job satisfactorily; 3) she was discharged; and 4) she was replaced by a substantially younger person. Rose v. Wells Fargo & Co. (9th Cir. 1990), 902 F.2d 1417, 1421. The burden then shifts to the defendant to articulate a nondiscriminatory reason for the discharge. Texas Dept, of Community Affairs v. Burdine (1981), 450 U.S. 248, 253, 101 S.Ct. 1089, 1093, 67 L.Ed.2d 207, 215. The burden then shifts back to the plaintiff to prove by a preponderance of the evidence that the reasons articulated by the employer for termination are merely a pretext for discrimination. Burdine, 450 U.S. at 253, 101 S.Ct. at 1093.

Tonack uncontrovertedly established that she was in the protected age group and that she was discharged. Under Issue I, we have approved findings which establish that she was performing her job satisfactorily and that she was replaced by a substantially younger person. We conclude that Tonack presented a prima facie case that the bank violated the ADEA in terminating her employment.

The bank rebutted the presumption of discrimination through its evidence that Tonack was discharged for a legitimate reason, failure to correct deficiencies in the teller supervisor area and her inability to work with others.

Tonack provided evidence to disprove the legitimate explanation offered by the bank. Contrary to the bank’s assertions, a court may rely on all evidence, including evidence used to establish a prima facie case, to establish pretext. Burdine, 450 U.S. at 256, n. 10, 101 S.Ct at 1095, n.10. Also contrary to the bank’s assertions, a finder of fact may infer that age discrimination took place. Merrick v. Northern Natural Gas Co. (10th Cir. 1990), 911 F.2d 426, 429. Taken together, the evidence of Tonack’s satisfactory performance reviews, the testimony about Balback’s statements that Tonack should go and that Kiedrowski would “get the job done,” the erroneous basis for placing Tonack on probation, the ordering of business cards showing Kreamer’s position as FSR, and the circumstances of Tonack’s termination indicate that the articulated reason for discharge was a pretext.

We hold that the District Court did not incorrectly interpret or misapply the provisions of the ADEA and that it did not err in ruling that Tonack established that the bank violated the ADEA in terminating her employment.

Ill

Did the District Court incorrectly interpret or misapply the provisions of the Wrongful Discharge Act?

The Wrongful Discharge Act provides, at § 39-2-902, MCA:

Except as provided in 39-2-912, this part provides the exclusive remedy for a wrongful discharge from employment.

Section 39-2-912, MCA, states:

This part does not apply to a discharge:
(1) that is subject to any other state or federal statute that provides a procedure or remedy for contesting the dispute. Such statutes include those... that prohibit unlawful discrimination based on... age.

The bank claims these statutes prohibit Tonack from recovering under both the ADEA and the Wrongful Discharge Act.

Tonack cites two Montana federal district court decisions in which it has been held that concurrent actions under the Wrongful Discharge Act and the ADEA are not prohibited when there are separate and distinct factual predicates to support each claim. Vance v. ANR Freight Systems, Inc. (D.Mont. 1991), 9 Mont. Fed. Rpts. 36, 39-40; Higgins v. Food Services of America, Inc. (D.Mont. 1991), 9 Mont. Fed. Rpts. 529, 530. We decline to completely follow those decisions, exercising our prerogative as the ultimate authority on the interpretation of Montana statutes.

Section 39-2-912, MCA, provides that the Wrongful Discharge Act does not apply to “a discharge” subject to other statutes. It does not provide that the Act applies to all factual claims not covered by other statutes. Tonack’s claims under both the ADEA and the Wrongful Discharge Act relate to one discharge from employment at the bank. We conclude that Tonack may not recover under both the ADEA and the Wrongful Discharge Act.

In Deeds v. Decker Coal Co. (1990), 246 Mont. 220, 805 P.2d 1270, this Court held that the above statutory provisions did not prohibit a wrongful discharge action by union employees because the National Labor Relations Board had not yet filed a complaint against the discharged employees. If the NLRB filed such an action, the Court stated, a “procedure or remedy for contesting the dispute” would be set in motion and the statutory exemption of § 39-2-912, MCA, would apply. Deeds, 805 P.2d at 1271.

Whether a discharge will ultimately be “subject to any other state or federal statute that provides a procedure or remedy for contesting the dispute” is not immediately known when a claim is filed. This must be determined before it is known whether the Wrongful Discharge Act may be applied. It is established only when a finder of fact has made that determination or when judgment on the claim has otherwise been entered. Therefore, we conclude that claims may be filed concurrently under the Wrongful Discharge Act and other state or federal statutes described in § 39-2-912, MCA, but if an affirmative determination of the claim is obtained under such other statutes, the Wrongful Discharge Act may no longer be applied. To the extent that this conclusion modifies our holding in Deeds, that opinion is so modified.

In this case, the Wrongful Discharge Act was no longer applicable following the District Court’s factual determination that the ADEA applied to Tonack’s discharge from employment. We therefore hold that Tonack is not entitled to recover damages under the Wrongful Discharge Act, and we reverse the District Court’s conclusion on that issue.

Because of the above conclusions and holdings, we do not address the bank’s issues concerning computation of damages or the findings of fact relevant to Tonack’s claim under the Wrongful Discharge Act. We remand this case to the District Court for recalculation of damages consistent with this Opinion.

JUSTICES GRAY, HUNT and HARRISON concur.

JUSTICE TRIEWEILER

concurring in part and dissenting in part.

I concur with the majority’s conclusions under Issues I and II that the District Court’s findings were not clearly erroneous and that the District Court correctly applied the provisions of the Age Discrimination in Employment Act.

I dissent from that part of the majority opinion which holds that plaintiff cannot recover separately under Montana’s Wrongful Discharge From Employment Act and the Federal Age Discrimination in Employment Act, even though the factual basis for recovery under each Act is separate and distinct.

The majority relies on § 39-2-912, MCA, of Montana’s Wrongful Discharge From Employment Act which provides:

This part does not apply to a discharge:

(1) that is subject to any other state or federal statute that provides a procedure or remedy for contesting the dispute.

In this case, plaintiff alleged two separate and independent reasons why her termination from employment was unlawful. She alleged that she was terminated because of age discrimination which was a violation of the Age Discrimination in Employment Act, 29 U.S.C. §§ 621 through 634. However, she also alleged that she was terminated in violation of her employer’s own written supervisor’s manual which included the company policies regarding termination. That policy required oral warnings, a written reprimand, and supervised probation. The District Court, in its Finding of Fact No. 36, specifically found that “[djefendant Bank’s termination of Ms. Tonack was also in violation of its written personnel policy set forth within the ‘supervisor’s manual.’ ”

Under Montana law a discharge is wrongful if “the employer violated the express provisions of its own written personnel policy.” Section 39-2-904(3), MCA. However, there is no other state or federal statute that has been brought to this Court’s attention which provides a procedure or remedy for termination that is wrongful on that basis. The plaintiff’s claim under federal law was based on termination because of her age. Therefore, I would conclude that § 39-2-912, MCA, does not apply and did not bar the District Court’s entry of judgment under both the Federal Age Discrimination in Employment Act, and the Montana Wrongful Discharge from Employment Act.

I agree with the prior decisions of the Federal District Court for the District of Montana in Vance v. ANR Freight Systems, Inc. (D. Mont. 1990), Doc. No. CV-90-120-GF, 9 Mont. Fed. Rpts. 36, and Higgins v. Food Services of America, Inc. (D. Mont. 1991), Doc. No. CV-90-51-M-CCL, 9 Mont. Fed. Rpts. 529. In Vance, the Federal District Court held that:

[WJhere a discharge from employment may be violative of a state or federal law prescribing discrimination, the affected employee is not precluded from pursuing relief under the Montana Wrongful Discharge From Employment Act if the employee can sustain his burden of proof in establishing the factual predicate necessary to establish a claim for relief under the Act.
... [Wjhere the factual predicate upon which the affected employee bases his claim under the Act is distinct from the factual predicate upon which the affected employee might otherwise base a claim under state or federal law prohibiting discrimination, he is not precluded from seeking redress under the Act.

Vance, 9 Mont. Fed. Rpts. at 39-40.

In Higgins, under facts similar to these, the Federal District Court recognized that a federal claim based on discrimination does not preclude a state claim under Montana’s Wrongful Discharge From Employment Act for a violation of written personnel policies. Again, the rationale was that each cause of action is based on a distinct and separate factual basis.

In this case, there was no federal or state statutory claim allowing recovery by the plaintiff for termination in violation of the employer’s written personnel policies. Therefore, § 39-2-912, MCA, did not apply. For these reasons, I dissent from that part of the majority opinion which holds otherwise. I would affirm the District Court judgment in its entirety.


text:
    L. MICHAEL BEASLEY, Plaintiff and Appellant, v. SEMITOOL, INC., SEMITHERM, INC., and RAYMON F. THOMPSON, Defendants and Respondents.
    No. 92-355.
    Submitted on Briefs January 14, 1993.
    Decided May 13, 1993.
    50 St.Rep. 522.
    853 P.2d 84.
    258 Mont. 258.

      See C.J.S. Master and Servant § 50.
    For Plaintiff and Appellant: Jeffrey D. Ellingson, Ellingson Law Offices, Kalispell.
    For Defendants and Respondents: Debra D. Parker, Murphy, Robinson, Heckathorn & Phillips, Kalispell.
   JUSTICE GRAY

delivered the Opinion of the Court.

L. Michael Beasley appeals an order of the Eleventh Judicial District Court, Flathead County, granting summary judgment in favor of Semitool, Inc., Semitherm, Inc. and Raymon Thompson on his claim for wrongful discharge, breach of express and implied contract, and breach of the covenant of good faith and fair dealing. We reverse.

The sole issue on appeal is whether the District Court erred in concluding that the Wrongful Discharge Act barred Beasley’s contract claims for breach of express and implied contract and breach of the covenant of good faith and fair dealing.

While L. Michael Beasley (Beasley) was working as an electronics project engineer in Kentucky, an agent of Semitool, Inc. (Semitool) began employment negotiations with Beasley. Semitool, located in Kalispell, manufactures products in the electronics, memory disk and semiconductor industry. On June 3, 1986, Semitool offered Beasley the position of “Product Marketing Manager for Spray Acid Tool,” which Beasley accepted eight days later. Beasley contends that Semi-tool’s offer included oral promises of stock options, bonuses tied to sales increases and opportunities for advancement not specifically set forth in the letter offering him the position.

Beasley moved to Kalispell, began working for Semitool and received excellent job evaluations. In November of 1987, he was transferred to Semitherm, Inc. (Semitherm), a sister company of Semitool, to lead the development, marketing and production of a vertical diffusion furnace. He alleges that this transfer was accompanied by oral promises of raises, higher bonuses, and stock options. On January 28,1989, Beasley resigned from Semitherm, citing the company’s failure to keep its compensation-related promises.

On February 13, 1990, Beasley filed a complaint against Semi-tool, Semitherm and Raymon Thompson (collectively hereafter Semitool) for breach of express and implied contract, breach of the covenant of good faith and fair dealing, and wrongful discharge. Semitool moved for summary judgment, arguing that the Montana Wrongful Discharge From Employment Act (Wrongful Discharge Act) provided Beasley’s exclusive remedy and that he could prove no damages under the Wrongful Discharge Act. The District Court granted Semitool’s motion, and entered judgment against Beasley. This appeal follows.

Initially, we note that Beasley was hired by a Texas firm at a significantly higher salary soon after his resignation from Semitherm. As a result, Beasley has abandoned his claim for wrongful discharge on appeal.

Did the District Court err in concluding that the Wrongful Discharge Act barred Beasley’s contract claims for breach of contract and breach of the covenant of good faith and fair dealing?

In its order, the District Court first stated that Beasley’s three claims for damages were based on the same facts and that the acts complained of occurred during the employment relationship. The court focused on § 39-2-913, MCA, of the Wrongful Discharge Act, which reads:

Preemption of common-law remedies. Except as provided in this part, no claim for discharge may arise from tort or express or implied contract.

The District Court then determined that this provision of the Wrongful Discharge Act barred Beasley’s contract claims. It concluded that Beasley would be unable to prevail on his complaint under any set of facts because his contract claims were barred as a matter of law and he could prove no damages under the Wrongful Discharge Act. Therefore, the District Court granted summary judgment for Semitool.

Our standard in reviewing a grant of summary judgment is the same as that initially utilized by the trial court. McCracken v. City of Chinook (1990), 242 Mont. 21, 24, 788 P.2d 892, 894. Summary judgment is appropriate when the pleadings, depositions, and other documents on file demonstrate that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P. In its order, the District Court assumed the facts alleged by Beasley to be true and concluded, as a matter of law, that the Wrongful Discharge Act barred Beasley’s contract claims. Therefore, we focus our initial inquiry on this legal conclusion. Our review of legal questions is plenary. See Steer, Inc. v. Dep’t of Revenue (1990), 245 Mont. 470, 475, 803 P.2d 601, 603.

Beasley agrees that the Wrongful Discharge Act is the exclusive remedy for claims arising from an employee’s discharge and that no discharge claim thereunder can arise from tort or express or implied contract. He argues, however, that his contract claims arise from Semitool’s failure to abide by its representations during his employment and, therefore, that his breach of contract and covenant claims occurred both prior to, and independent of, his resignation. On that basis, Beasley argues that his independent contract-based claims for damages are not affected or barred by the Wrongful Discharge Act.

In interpreting statutes, including the Wrongful Discharge Act, we first look to the plain meaning of the words used. Allison v. Jumping Horse Ranch, Inc. (1992), 255 Mont. 410, _843 P.2d 753, 755, 49 St.Rep. 1039, 1040. To interpret a phrase within the plain meaning rule, the language used must be reasonably and logically interpreted, giving words their usual and ordinary meaning. Allison, 843 P.2d at 755. Furthermore, it is the function of the courts to ascertain and declare what in terms or substance is contained in a statute; it is not our function to insert what has been omitted or omit what has been inserted. Section 1-2-101, MCA; City of Bozeman v. Racicot (1992), 253 Mont. 204, 208, 832 P.2d 767, 769.

Turning to § 39-2-913, MCA, we must give effect to the entirety of the statute, which reads: “[e]xcept as provided in this part, no claim for discharge may arise from tort or express or implied contract.” The usual and ordinary meaning of “claim for discharge” does not encompass any and all claims an employee may have against the employer, but only those claims for damages caused by an asserted wrongful discharge. The District Court’s interpretation of § 39-2-913, MCA, effectively omits the words “for discharge” from that statute and results in a sweeping preemption of all other claims arising out of the employment relationship. This result disregards the stated purpose of the Wrongful Discharge Act, which is to set forth “certain rights and remedies with respect to wrongful discharge.” Section 39-2-902, MCA (emphasis added). We conclude that § 39-2-913, MCA, bars claims for discharge arising from tort or implied or express contract, but does not bar all tort or contract claims merely because they arise in the employment context.

Semitool contends that because Beasley relied on the same set of facts for each cause of action in his complaint, he presented one claim and three alternative theories of recovery, two of which are barred by the Wrongful Discharge Act. It may be true that Beasley’s complaint is not a model of artful pleading and that the manner in which it is structured creates confusion. Rather than specifying which factual allegations support each cause of action individually, Beasley sets forth all of his factual allegations at the beginning of the complaint; he then separately sets out his causes of action, essentially incorporating all of the factual allegations into each count. However, Beasley does aver his contract damages separately from the damages claimed for wrongful discharge. The complaint is sufficient to indicate Beasley’s intent to plead the causes of action as separate and independent claims.

Further, Rules 8(a) and 18(a), M.R.Civ.R, specifically allow the joinder of alternative claims in a complaint. Mere joinder of alternative or inconsistent claims in a complaint does not require dismissal of an otherwise legitimate claim. See Bozeman Deaconess Foundation v. Cowgill (1963), 143 Mont. 98, 100, 387 P.2d 435, 436. Nor does the Wrongful Discharge Act limit a claimant’s right to plead independent causes of action in conjunction with a claim under the Wrongful Discharge Act. We conclude that Beasley’s reliance in his complaint on the same set of facts for his three causes of action does not require dismissal of the alleged independent contract-based claims.

Semitool further argues that Dagel v. City of Great Falls (1991), 250 Mont. 224, 819 P.2d 186, relied on by the District Court, requires the dismissal of Beasley’s contract claims. It does not. Dagel did not concern, as does the case before us, the effect of the Wrongful Discharge Act on claims which are separate and independent from the claim of wrongful discharge. A close examination of the allegation in plaintiff’s complaint on which we focused in Dagel illustrates the distinguishing characteristics between Dagel and the present case:

8. By reason of Plaintiff’s satisfactory service and the performance of her duties, her employer’s assurances, policies, and procedures, salary increases, and the absence of criticism of her performance, there was an implied promise by the City that Plaintiff’s employment would not be terminated and she would not be discharged except for just cause. In terminating Plaintiff’s employment as alleged, the City wrongfully, unreasonably and tortiously violated its implied promise and its duty implied in the employment relationship to deal fairly and in good faith with Plaintiff.

Bagel, 819 P.2d at 194. Clearly, Bagel sets forth a tort claim for breach of the implied covenant of good faith and fair dealing relating to the plaintiff’s discharge. The only conceivable contract-based claim found in the complaint in Bagel is the allegation regarding an “implied promise by the City that Plaintiff’s employment would not be terminated. ...” Most importantly, however, it is clear both the tort and implied contract claim in Bagel are completely and inextricably intertwined with and based on Dagel’s termination and discharge. Bagel is simply inapplicable here.

In sum, the Wrongful Discharge Act is the exclusive remedy for claims arising from an employee’s wrongful discharge. Beasley’s contract-based claims, taken as true solely for purposes of the issue before us, arise from Semitool’s breach of his employment contract rather than from an alleged wrongful discharge. We hold that the District Court erred in granting summary judgment for Semitool on Beasley’s contract-based claims.

Finally, Semitool argues that even if Beasley’s remaining contract-based claims are not barred by the Wrongful Discharge Act, he did not present a prima facie case on those claims and, therefore, summary judgment is appropriate. Furthermore, Semitool argues that Beasley’s allegations of oral representations concerning the employment contract are barred by the statute of frauds.

It is well settled that this Court will not address on appeal an issue not presented to the district court. Wyman v. BuBray Land Realty (1988), 231 Mont. 294, 299, 752 P.2d 196, 200. Before the District Court, Semitool argued only that the Wrongful Discharge Act barred Beasley’s contract claims and that he had not suffered compensable damages under the Act; it did not present and, accordingly, the District Court did not address the additional issues now presented by Semitool. Having determined that the District Court’s legal conclusion that the Wrongful Discharge Act barred Beasley’s contract claims was in error, we leave further consideration of the contract-based issues for the District Court on remand.

Reversed and remanded for further proceedings consistent with this opinion.

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


author: JUSTICE WEBER

text:
    IN RE THE MARRIAGE OF MARTHA J. BURRIS, Plaintiff and Respondent, v. BILLY C. BURRIS, Defendant and Appellant.
    No. 92-448.
    Submitted on Briefs March 18, 1993.
    Decided May 13, 1993.
    50 St.Rep. 525.
    852 P.2d 616.
    258 Mont. 265.

      See C.J.S. Divorce § 406.
    For Defendant and Appellant: K. Dale Schwanke, Jardine, Stephenson, Blewett & Weaver, Great Falls.
    For Plaintiff and Respondent: Daniel A. Boucher, Altman & Boucher, Havre.
   JUSTICE WEBER

delivered the Opinion of the Court.

This is an appeal from the Twelfth Judicial District Court, Hill County, continuing a 1974 award of $250 per month for permanent maintenance to the ex-wife. We affirm.

We consider the following issues on appeal:

1. Did the District Court err in determining that Mr. Burris was responsible to pay $250 per month maintenance to his ex-wife, from whom he was divorced in 1974?
2. Did the District Court properly award part of Mrs. Burris’s legal fees?

Martha and Billy Burris were first married in October of 1955. This marriage was dissolved in 1964. The couple remarried in 1965 and subsequently divorced in 1974. In the 1974 divorce decree, the court ordered Mr. Burris to pay a $250 per month sum “as and for permanent alimony.” Throughout both marriages, Mr. Burris held a position as an Immigration Officer of the United States. Mrs. Burris did not work outside the home but took care of the couple’s three sons. Today Mr. Burris is retired. Mrs. Burris is now unemployed, although at one time she held a full-time job for five years at Francis Willard Home for Girls in Tulsa, Oklahoma, as a group care worker. Following an extended leave of absence in order to achieve diabetes stabilization, she never returned to work.

Mr. Burris attempted to modify his maintenance obligation in May of 1975. The District Court denied modification and the $250 award was affirmed by this Court in Burris v. Burris (1976), 171 Mont. 227, 557 P.2d 287. Mr. Burris petitioned again in 1983 for modification of his maintenance payment. The District Court denied modification and he did not appeal.

Mr. Burris retired in December of 1989. His last full check was in January of 1990. He did not receive any of his retirement pay until July of 1990. Because of this, he was -unable to pay the $250 maintenance to Mrs. Burris until that time. He subsequently sent her a check for all delinquent months due to this delay.

Meanwhile, in May of 1990, Mrs. Burris filed a motion asking for certain relief because Mr. Burris had not paid his maintenance payments for February, March, April and May. Thereafter, Mr. Burris petitioned the court for elimination of the maintenance requirement. Subsequently, Mrs. Burris filed a petition for modification of maintenance, seeking $500 per month.

The District Court denied both parties’ petitions, maintaining $250 monthly award and awarding Mrs. Burris $1,000 of her attorney’s fees and costs. Mr. Burris appeals.

I

Did the District Court err in determining that Mr. Burris was responsible to pay $250 per month maintenance to his ex-wife from whom he was divorced in 1974?

Mr. Burris claims that the District Court erred by determining that the word “permanent” defining maintenance payments to his ex-wife cannot be modified. According to Mr. Burris, his circumstances have substantially changed due to his retirement and it is unconscionable that he continue to pay his ex-wife the maintenance payments. Mr. Burris contends that maintenance awards are only given ex-spouses until such time as the ex-spouse can become self-sufficient. Mr. Burris argues that his ex-wife received college training and had a self-sustaining position but through her own choices, gave up that position.

According to Mrs. Burris, it was her ex-husband’s burden to establish that his circumstances were substantially changed and that his continuance to pay the agreed-upon maintenance was unconscionable. The District Court specifically determined that Mr. Burris had not met his burden.

Mr. Burris’s contention that the District Court determined as a matter of law that the 1974 award of “permanent” alimony could not be modified is an incorrect assessment of the District Court’s findings of fact and conclusions of law. In the District Court’s conclusions of law, the court obviously employed the reasoning of § 40-4-208(2)(b)(i), MCA:

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

The court’s words were:

Defendant has not shown a substantial change in circumstances which make the terms unconscionable as to Defendant and his petition to reduce maintenance ought to be denied.

It is clear that the court considered the evidence presented to it in light of the modification provision. It did not, as Mr. Burris contends, determine that it could not modify the 1974 decree. The court made a reasoned decision that modification was inappropriate.

A District Court’s conclusion of law is reviewed as to whether it is correct. Steer Inc. v. Dept, of Revenue (1990), 245 Mont. 470, 803 P.2d 601. We conclude that the District Court used the appropriate legal standard in reviewing Mr. Burris’s evidentiary burden.

The District Court supported its conclusions of law with a lengthy recitation of facts concerning the Burrises’ health, financial condition and need. The standard of review concerning these findings of fact is whether the District Court’s findings are clearly erroneous. Marriage ofEschenbacher (1992), 253 Mont. 139,831 P.2d 1353. Such a determination involves consideration of whether the facts are supported by substantial evidence, next whether the court correctly understood the evidence, and finally, whether, the first two considerations having been met, this Court still believes a mistake has been made. Interstate Prod. Credit Assn. v. DeSaye (1991), 250 Mont. 320, 820 P.2d 1285.

The District Court stated that Mr. Burris receives only $1400 retirement per month because he withdrew $17,000 from his retirement. Further, Mr. Burris purchased a new truck while delinquent in his alimony. Part of the strain on Mr. Burris’s monthly budget, according to the court, comes from monthly truck payments of $350.29 and monthly property settlement to his second wife for $468.29. Both of these monthly obligations ended last year. Thus, Mr. Burris is not now required to pay these out of the $1,400 he receives each month.

The court also states that Mr. Burris owns real property in Montana valued at $100,000 as well as property in Oklahoma valued at $35,000. Mr. Burris received $7,800 in 1989 as a CRP payment on the Montana land and received $469 monthly from trailer rentals in that same year. Also, Mr. Burris has $4,500 in a credit union, approximately $15,000 in stocks, an IRA valued at $5,158.78 and an interest in Realty Income Corp. worth $3,352.00. This brings Mr. Burris’s worth to in excess of $120,000, not including his retirement drafts.

Mrs. Burris, on the other hand, currently has no employment, poor health, $13,000 in savings, $17,000 owed by the Burnses’ three sons, and a 1975 Chevrolet. The court determined that while Mr. Burris’s income has diminished it has not disappeared, so as to make the $250 per month unconscionable. However, the court also acknowledged that Mrs. Burris did not do what was necessary to preserve the $11,000 per year job she had prior to being diagnosed as a diabetic.

First, we conclude that there is substantial credible evidence in the record to clearly substantiate the court’s assessment of the Burrises’ life situation. The trial transcript bears out the court’s breakdown of financial worth except for $5,000 in an IRA account which Mr. Burris claims he has now depleted paying his bills. Therefore, we find substantial evidence to support the court’s findings.

Next we consider whether the court misapprehended the evidence it had before it. Mr. Burris claims that he never imagined that the $250 per month payment would be permanent but, if it is, that such an arrangement cannot be used by courts.

Mr. Burris has known from the original 1974 order that the $250 award to his ex-wife was “permanent.” In March of 1974, Mr. Burris filed a motion for new trial and an affidavit by his attorney objecting to the “permanent alimony.” Awards of maintenance are within the broad discretion of the District Court. In re Marriage of Tahija (1992), 253 Mont. 505, 833 P.2d 1095. We do not disturb a District Court’s award of maintenance provided that the award is based upon substantial evidence and exhibits no clear abuse of discretion. In re Marriage of Cole (1988), 234 Mont. 352, 763 P.2d 39. The court does not abuse its discretion in awarding permanent or lifetime maintenance if the facts of the case necessitate such an award. In re Marriage of Gauthier (1982), 201 Mont. 320, 654 P.2d 517. See also In re Marriage ofDeichl (1989), 239 Mont. 425, 781 P.2d 254. In both of these cases, we affirmed grants of lifetime maintenance.

Such discretion to award permanent or lifetime maintenance is derived directly from the legislature:

(2) The maintenance order shall be in such amounts and for such periods of time as the court deems just. ... (Emphasis added.)

Section 40-4-203(2), MCA. Given the foregoing law, permanent or lifetime maintenance can be awarded by a court. The facts of this particular case show that Mr. Burris understood the permanent nature of the maintenance, and although he has protested it on various occasions, both the District Court and this Court have determined it to be appropriate because of Mr. Burris’s superior financial situation.

In terms of the evidence presented by Mr. Burris regarding his change of circumstances, it is true that he receives less money now that he is retired. Mr. Burris claims that pursuant to § 40-4-203(2)(f), MCA, he should not have to pay a maintenance award because he cannot meet his own bills. In opposition to Mr. Burris’s condition, Mrs. Burris currently receives nothing. She is in bad health and some concern exists as to her employability because of her health and age. While she attended college she is essentially in the same position as when maintenance was awarded to her.

In considering whether to modify her maintenance, the District Court must consider statutory language. In re Marriage of Cooper (1985), 216 Mont. 34,699 P.2d 1044. It is clear that the District Court here considered appropriate elements found in § 40-4-208, MCA, because it determined that the changes in Mr. Burris’s financial condition although decreasing his income, did not prevent him from meeting the maintenance obligation of the 1974 order. In reaching that determination, the court set out in great detail the financial facts provided by each party and upon which it relied. Those facts clearly show that the award of $250 per month to Mrs. Burris is not unconscionable because Mr. Burris continues to be in a superior financial position despite his retirement. We conclude that the District Court did not misapprehend the evidence with which it was provided.

Finally, after reviewing the entire record we do not feel that the court has made a mistake in continuing the $250 per month maintenance award. We conclude, therefore, that the District Court was not clearly erroneous.

We hold the District Court did not err in determining that Mr. Burris was responsible to pay $250 maintenance to his ex-wife from whom he was divorced in 1974.

II

Did the District Court properly award part of Mrs. Burris’s legal fees?

The District Court awarded Mrs. Burris $1,000 of her $2,966.09 legal fees. The court directed attention to § 40-4-110, MCA, and stated that after considering the financial resources of both parties Mr. Burris is able to pay $1,000 toward Mrs. Burris’s fees because of his ‘better financial position.”

Mr. Burris argues that he should not have to pay his ex-wife’s legal fees because any inability she has in regards to payment is her own fault in losing or not pursuing employment. Mrs. Burris argues that the District Court appropriately assessed the award of attorney’s fees.

The appropriate statute declares:

The court ... after considering the financial resources of both parties, may order a party to pay a reasonable amount for the cost to the other party of maintaining or defending any proceeding under chapter 1 and 4 of this title and for attorney’s fees ...

Section 40-4-110, MCA. We will review an award of attorney fees in a dissolution action as to whether the court abused its discretion. Tahija, 253 Mont. at 511, 833 P.2d at 1099.

The District Court considered carefully the respective financial situations of the parties and determined Mr. Burris could reasonably afford to help pay Mrs. Burris’s attorney’s fees at a rate of $100 per month. We conclude no abuse of discretion occurred.

We hold the District Court properly awarded part of Mrs. Burris’s attorneys fees.

Affirmed.

JUSTICES HARRISON, HUNT, TRIEWEILER and GRAY concur.