author: CHIEF JUSTICE TURNAGE

text:
    FLOYD E. SCOTT, Plaintiff and Appellant, v. E. I. DUPONT DE NEMOURS & CO., a corporation, Defendant and Respondent.
    No. 89-127.
    Submitted on Briefs Nov. 21, 1989.
    Decided Dec. 19, 1989.
    783 P.2d 938.

      R.P. Ryan, Ryan & McAllister, Billings, for plaintiff and appellant.
    Charles R. Cashmore, Crowley Law Firm, Billings, for defendant and respondent.
   CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Floyd Scott brought this suit under a theory of strict liability, claiming that exposure to defendant’s paint caused his respiratory disability. A jury in the District Court for the Thirteenth Judicial District, Yellowstone County, entered a verdict for defendant. Scott appeals. We affirm.

The issues are:

1. Did the trial court err in refusing to allow Scott to take the deposition of defense counsel?
2. Did the trial court err in excluding from evidence post-accident changes in defendant’s warning labels?
3. Did the trial court err in allowing the opinion testimony of expert witness Bruce Held?

Scott was employed as a quality control inspector at Beall, Inc., of Billings, Montana. Beall manufactured tanks used for hauling liquid products. On January 28, 1981, Scott was working on top of a new tank in Beall’s paint room, calibrating the tank for the liquid it would hold. At the same time, another worker, Eldridge, was spraying defendant’s Imron polyurethane enamel paint onto the undercarriage of the tank.

Scott claimed that inhaling the fumes from the Imron paint caused his totally disabling respiratory problems. He also claimed that defendant failed to provide adequate warning on the Imron paint cans, because the Imron label recommended the use of a vapor/particulate mask, which did not provide a fresh air supply.

Defendant elicited testimony that Scott was not wearing any protective mask on the day he claims he was injured, and that Eldridge warned Scott that he should not be in the paint room while Eldridge was painting. It also presented evidence that Scott’s respiratory problems are likely a result of his 40 + years of smoking.

The jury was provided with a special verdict form. The first question was, “Was the Defendant’s product defective and unreasonably dangerous because of an inadequate warning?” The jury answered, “No,” eliminating any further questions under the verdict form. The court entered judgment upon that verdict.

I

Did the trial court err in refusing to allow Scott to take the deposition of defense counsel?

Eldridge, the painter, was deposed in July 1984. In his deposition, Eldridge stated that he had not previously spoken with either side’s attorney. He also stated that he knew everyone in his area should have been wearing a protective mask while he was using Imron paint and that he warned Scott that he should not be there. Scott’s counsel later discovered that defense counsel Cashmore had interviewed Eldridge two weeks prior to the deposition. Because Eldridge could not be located at the time of trial, his deposition was to be read into evidence.

In May 1988, several months prior to trial, Scott’s counsel issued a notice that they planned to take Cashmore’s deposition. The subject of the deposition would be the pre-deposition interview with Eldridge. Defendant applied for and was granted a protective order quashing the subpoena duces tecum issued in connection with the planned deposition. Scott argues on appeal that the court’s refusal to allow the deposition was error.

While the lower court did not state its reasons for granting the protective order, counsel’s arguments focus on the work product rule, Rule 26(b)(3), M.R.Civ.P. The defense argues that allowing Cashmore to be deposed would invade his mental impressions and work products, which are protected under the work product rule. Scott asserts that a deposition of Cashmore concerning his interview with Eldridge would fall within the exceptions to the work product rule or could be structured to protect against invasion of work product.

Defendant contends that the court arranged ample alternatives to a deposition of Cashmore. These included advising the jury that the interview had taken place, which directly impeached Eldridge’s deposition statement that he had not talked with either side’s attorney. The court also offered, in spite of their hearsay character, to allow into evidence two post-deposition written statements of Eldridge. These statements acknowledged the interview with Cashmore and contradicted other aspects of the deposition testimony. Further, witness Dvorak apparently would have testified that Eldridge later recanted his deposition testimony that he knew of the dangers of using Imron paint without fresh air masks. Scott chose not to offer Dvorak’s testimony or the post-deposition written statements of Eldridge into evidence. The court did advise the jury that Cashmore’s pre-deposition interview with Eldridge had taken place.

Rulings limiting discovery under Rule 26(c), M.R.Civ.P., are discretionary. Matter of Estate of Counts (1985), 217 Mont. 350, 355, 704 P.2d 1052, 1056. We conclude that in view of the alternate means of impeaching Eldridge offered to Scott in this case, the District Court did not abuse its discretion in refusing to allow Scott to take Cashmore’s deposition.

II

Did the trial court err in excluding from evidence post-accident changes in defendant’s warning labels?

Rule 407, M.R.Evid., provides:

“When, after an event, measures are taken which, if taken previously, would have made the event less likely to occur, evidence of the subsequent measures is not admissible to prove negligence or culpable conduct in connection with the event. This rule does not require the exclusion of evidence of subsequent measures when offered for another purpose, such as proving ownership, control, or feasibility of precautionary measures, if controverted, or impeachment.”

At the time of the incident, the label on Imron paint suggested, in some circumstances, the use of vapor/particulate masks not containing fresh air supplies. Scott contends that, for purposes of impeachment, he should have been allowed to introduce evidence that after January 1981 defendant changed the label to require the use of fresh air respirators when Imron is being used.

Defendant’s position is that the evidence regarding which mask was recommended is a red herring because Scott was wearing no mask whatsoever. We agree. Given that circumstance, we hold that the court did not err in excluding from evidence post-accident changes in the Imron paint labels.

Ill

Did the trial court err in allowing the opinion testimony of expert witness Bruce Held?

Bruce Held, an industrial hygienist, testified for defendant. Scott argues that he should not have been allowed to testify because defendant failed to adequately answer Scott’s discovery request for the substance of Held’s expert opinion.

Rule 26(b)(4)(A), M.R.Civ.P., governs:

“(A)(i) A party may through interrogatories require any other party to identify each person whom the other party expects to call as an expert witness at trial, to state the subject matter on which the expert is expected to testify, and to state the substance of the facts and opinions to which the expert is expected to testify and a summary of the grounds for each opinion, (ii) Upon motion, the court may order further discovery by other means, subject to such restrictions as to scope and such provisions, pursuant to subdivision (b)(4)(C) of this rule, concerning fees and expenses as the court may deem appropriate.”

Scott propounded interrogatories to defendant asking the names of experts who would testify at trial, the opinions of the experts, and the factual bases for the opinions. In answer to Scott’s interrogatories, defendant provided the following information about Held:

“Bruce J. Held, Livermore, CA, Industrial hygiene, Toxicology, Respirators, Respirator testing and precautionary labeling.
“Bruce J. Held — Effectiveness of the vapor-particulate respirator (TC-23C) and requirements of proper respirator program required of employer.”

In the pretrial order, Scott asked the court not to allow Held to testify. The court denied that request.

Held’s testimony at trial was within the subject matter indicated in the answers to interrogatories. While the answers were not as complete as they should have been, Held was not a surprise witness. The above answers to interrogatories were made over three years prior to trial. Scott did not move to compel further answers. The time elapsed lessens the importance of these inadequate answers. We do not condone defendant’s failure to provide full and complete answers to interrogatories. However, refusing to allow Held to testify would have been an extreme sanction, given that defendant’s offense was incompleteness in its answers to interrogatories, not failure to answer. We hold that the lower court did not err in permitting Held to testify.

Affirmed.

JUSTICES HARRISON, BARZ, SHEEHY, HUNT, McDON-OUGH and WEBER concur.


source: Caselaw Access Project

author: JUSTICE HARRISON JUSTICE McDONOUGH,

license: Public Domain

text:
    JOE JOHNSON, Petitioner and Appellant, v. MONTANA DEPARTMENT OF LABOR AND INDUSTRY, Respondent and Respondent.
    No. 89-281.
    Submitted on Briefs Oct. 25, 1989.
    Decided Dec. 19, 1989.
    783 P.2d 1355.

      JUSTICE MCDONOUGH filed dissenting opinion in which JUSTICE HUNT joined.
    Larsen & Neill, Kenneth R. Neill, Great Falls, for petitioner and appellant.
    Claren Neal, Dept, of Labor and Industry, Helena, for respondent and respondent.
   JUSTICE HARRISON

delivered the Opinion of the Court.

Joe Johnson, a Great Falls homeowner, appeals the decision of the District Court confirming a holding by the Board of Labor Appeals. The decision upheld a finding that a carpenter who had worked on the remodeling of Johnson’s home was his employee and Johnson therefore owed unemployment insurance tax on the employee’s wages. We reverse.

Only one issue is presented:

Did the District Court err when it found that there was substantial evidence to support the decision of the Board of Labor Appeals that Mike Voeller, the worker in question, was an employee and not an independent contractor under the AB test of § 39-51-201(14), MCA?

Joseph V. Johnson, the petitioner and appellant, is a food broker in Great Falls, Montana. When Johnson and his wife, Mary, bought a new home they contacted their former neighbor, a building contractor, to see if he would be interested in remodeling the new house. The neighbor declined the job, but indicated his son, Mike Voeller, might be able to do the carpentry work. Johnson then contacted Mike Voeller who, along with a Mr. Pontdt, agreed to do the remodeling job.

At the time they engaged Voeller and Pontdt to remodel, the John-sons were not sure exactly what they wanted done to their new home or how much they could afford. They did know they wanted the kitchen enlarged and remodeled and a bedroom, bathroom, porch and deck added. After reviewing the project and discussing finances, the parties agreed that the work would be done on an hourly basis rather than by bid, with Voeller and Pontdt each receiving $7 per hour and the Johnsons paying for materials.

Voeller and Pontdt each had their own contracting businesses. Although he had not formally incorporated, Voeller called himself Mike Voeller, Inc. Voeller had his own tools and a small shop in his home. Both before and after the Johnson job Voeller performed independent contracting jobs as a carpenter, doing remodeling, roofing, siding and cabinet making. For several months immediately preceding the Johnson job, Voeller worked for wages as a carpenter for a firm known variously as B-A-C, M-S-C, and Hallmark. During the three years Voeller did carpentry work, the only time he ever worked for wages was his stint with B-A-C. After Voeller completed the B-A-C and Johnson jobs, he applied for unemployment benefits thinking he was entitled to unemployment benefits from his work at B-A-C. However, Voeller did not believe his work for Johnson entitled him to unemployment benefits.

The direction Voeller and Pontdt received from Johnson was minimal. Johnson would discuss options with the carpenters, and Voeller and Pontdt would tell Johnson whether they could or could not carry out his idea. Voeller and Pontdt would arrange for and hire other building professionals such as the electrician, perfa-taper and plumber, all of whom were also paid on an hourly basis. As the work progressed Johnson would, as customary, approve the final construction plans and select the finish materials to be used.

When Voeller applied for unemployment the Department of Labor and Industry determined Voeller to be Johnson’s employee, based on questionnaires completed by the two men. The Department found, therefore, that Johnson owed the Department for past unpaid unemployment contributions during the period Voeller worked for Johnson.

A redetermination hearing before an Appeal’s Referee confirmed Voeller’s status as an employee. Johnson then appealed the determination to the Board of Labor Appeals. Following a telephone hearing, the Board of Labor Appeals hearing officer affirmed the Department’s conclusion, finding Voeller an employee under §§ 39-51-203(4) and 39-51-201(14), MCA. On judicial review the District Court upheld the earlier findings that Voeller and others similarly situated were Johnson’s employees, and Johnson now appeals the court’s decision.

The standard of review for cases involving claims before the Board of Labor Appeals is found in Title 39, Part 24 of Chapter 51:

“In any judicial proceeding under 39-51-2406 through 39-51-2410, the findings of the board as to facts, if supported by evidence and in the absence of fraud, shall be conclusive and the jurisdiction of said court shall be confined to questions of law.”

Section 39-51-2410(5), MCA.

Accordingly, those facts, as the Board of Labor Appeals found them to exist, will stand if supported by the evidence, absent fraud. Recent case law has held that “supported by the evidence” means supported by substantial evidence, which is “something more than a scintilla of evidence, but may be less than a preponderance of evidence.” Gypsy Highview Gathering System, Inc. v. Stokes (1986), 221 Mont. 11, 15, 716 P.2d 620, 623. See also Larry’s Post Co., Inc. v. Unemployment Insurance Division (Mont. 1989), [238 Mont. 190,] 777 P.2d 325, 46 St.Rep. 1193. While the substantial evidence test gives deference to the agency fact finder, the court’s judicial review must nonetheless be “searching and careful, subjecting the agency’s decision to close judicial scrutiny.” Cranston v. Clark (9th Cir.1985), 767 F.2d 1319, 1321 (citing Memorial, Inc. v. Harris (9th Cir.1980), 655 F.2d 905, 912).

More importantly, we cannot permit the letter of the law to transcend the spirit of the law. As we noted when previously faced with this question:

“We feel that whether a person performing services is an employee or an independent contractor is the question before us, and statutes used as guides in making such determinations must not be distorted to allow persons who are truly independent in their operation to be held employees merely for tax purposes and resulting benefits derived from an employer-employee relationship.”

St. Regis Paper Co. v. Unemployment Compensation Comm’n (1971), 157 Mont. 548, 552, 487 P.2d 524, 526.

The two-part test to determine whether an individual is an independent contractor is found at § 39-51-201(14), MCA:

“ ‘Independent contractor’ means an individual who renders service in the course of an occupation and:
“(a) has been and will continue to be free from control or direction over the performance of the services, both under his contract and in fact; and
“(b) is engaged in an independently established trade, occupation, profession, or business.”

This test, formerly known as the ABC test, was amended by the 1987 Legislature dropping a third prong of the test. The amended version of § 39-51-201(14), MCA, is now called the AB test, and its emphasis, as under the ABC test, and at common law, is control. This Court has previously recognized four factors to consider in determining if the right to control exists: (1) direct evidence of right or exercise of control; (2) method of payment; (3) furnishing of equipment; and (4) right to fire. Sharp v. Hoerner Waldorf Corp. (1978), 178 Mont. 419, 425, 584 P.2d 1298, 1301-02 (citing Larson’s Workmen’s Compensation Law, Vol. 1A, § 44.31, p. 8-35).

The Hearings Examiner addressed the first factor, exercise of or right to control, in his Finding of Fact No. 4: “The Appellant asked for advice from the carpenters as well as directed their work or chose among options or suggestions made by the carpenters as their work progressed. The Appellant also chose, as needed, the finish materials purchased and used.” In affirming the decision, the District Court relied on the same sort of evidence, finding in its memorandum and order that:

“[T]he record contains evidence that shows the petitioner made numerous changes in the scope and extent of the work to be performed. The petitioner chose the materials and paid the supplier directly for supplies utilized. The petitioner also had the right to approve the work performed and indicated he had the right to make workers work faster.”

All of the facts pointed to by the Hearings Examiner and the District Court to support their finding of control are usual and ordinary practices in the carpentry business. The finding does not so much show control as it does indicate a business practice. Mr. Voeller testified that Mr. Johnson did not correct the carpenters as to details in the performance of their work and expected them to use their expertise as carpenters to carry out the remodeling project. Mr. Johnson testified that he would tell Voeller and Pontdt his ideas for remodeling and the two carpenters would tell him if it was possible. In other words, Johnson told Voeller and Pontdt what he wanted done but not how to do it.

This Court has often reiterated the control test in these terms:

“An independent contractor is one who renders service in the course of an occupation, and represents the will of his employer only as to the result of his work, and not as to the means whereby it is accomplished, and is usually paid for the job.”

St.Regis Paper Co., 157 Mont. at 552, 487 P.2d at 526 (quoting Kimball v. Ind. Acc. Bd. (1960), 138 Mont. 445, 448, 375 P.2d 688, 690). It is evident that Johnson merely controlled the result of the carpenters’ work, not the methods Voeller and Pontdt used to accomplish the end result.

As to the second factor, method of payment, evidence showed that both carpenters were paid on an hourly basis and usually submitted their hours to the Johnsons weekly. As a general rule, payment on a time basis is strong evidence of employment status while payment on a completed project basis is consistent with, but not conclusive of, independent contractor status. Solheim v. Tom Davis Ranch (1984), 208 Mont. 265, 273, 677 P.2d 1034, 1038.

There is testimony that the method of payment in the carpentry industry is accomplished in one of three ways — on a bid, hourly or cost-plus basis. Mr. Voeller testified that he had done projects on both a bid and hourly basis, and that he usually did smaller jobs on a bid basis. Voeller stated that he commonly did larger jobs on an hourly basis and, after discussion with Johnson, all parties decided that hourly pay would be best on the Johnson job because the John-sons did not know exactly what they wanted done or how much they could afford.

The third test regarding furnishing of equipment preponderates in favor of an independent contractor status between Voeller and Johnson. This Court has adopted the view of Larson’s Workmen’s Compensation Law, Vol. 1C, § 44.34, pp. 8-95 — 8-104, in Solheim, that an employment relationship usually exists where the employer furnishes equipment, but an employee furnishing his own equipment does not preclude an employment relationship. In Solheim, we concluded that furnishing equipment indicates an independent contractor relationship. Solheim, 677 P.2d at 1039.

The right to fire is the final factor determining control. In discussing this final element the Larson treatise notes:

“The right to terminate the relationship without liability is not consistent with the concept of independent contract, under which the contractor should have the legal right to complete the project contracted for and to treat any attempt to prevent completion as a breach of contract.”

Larson’s Workmen’s Compensation Law, Vol. 1C, § 44.35, pp. 8-149 — 8-158.

Because the contract between the parties was oral, the only evidence before the District Court and the hearings examiners regarding termination comes from the testimony of Voeller and Johnson. Reviewing the testimony, it is apparent that neither man was certain of his rights as to the ability to terminate. When asked by the examiner if Johnson could have decided he no longer wanted Voeller’s services, Voeller replied that Johnson “probably” could have. Johnson’s answer when asked about his ability to fire the carpenters was equally as tentative:

“I think, like I testified earlier, if it would have taken them, you know, a real long time. To me it seemed like a long time, and not being a carpenter, you know, it’s really questionable what a long time is. I’m sure somewhere along the line I could have, yes.”

Johnson’s reply indicates his belief that, had the carpenters not lived up to their part of the bargain, he would have been justified in terminating the business relationship. However, neither man was directly asked if he believed Johnson could fire Voeller without liability.

As discussed above, three of the four control factors substantiate a finding of an independent contractor relationship, between Johnson and Voeller. First, Johnson did not possess the right to control how Voeller accomplished the remodeling job, only the right of a homeowner to tell the carpenter what he wanted done as the house was remodeled. Secondly, Voeller and Pontdt furnished all of the equipment necessary to complete the job. Finally, Johnson’s right to fire the carpenters was not absolute. As to the other factor, method of payment, while hourly pay usually evidences employment, custom in the industry often finds carpenters working on a per hour basis, and is not conclusive of either an independent contractor or employment status. It must be remembered that the purpose of this test is not

“[t]o widen the scope of the term ‘employment’ as used in the statute so as to include therein persons not otherwise included, but. . . to exclude from the definition of the term ‘employment’ persons who might, except for the application of these tests, be included therein.”

St. Regis Paper Co., 157 Mont. 552, 487 P.2d at 526 (quoting National Trailer Convoy, Inc. v. Undercofler (Ga.App. 1964), 109 Ga.App. 703, 137 S.E.2d 328, 331).

We hold that under the A portion of the AB test of § 39-51-201(14), MCA, Voeller meets the definition of an independent contractor.

Thus, we turn to the B portion of the test which requires the independent contractor to be engaged in an independently established occupation. The District Court, finding that the relationship between Voeller and Johnson failed part A of the test, did not address part B. The record clearly demonstrates that Voeller is engaged in a trade independent of Johnson’s. Johnson is a food broker who sells groceries for a living. Contracting and carpentry have no relation whatsoever to what Johnson does for a living. Voeller is a carpenter and has been since 1985. Accordingly, Voeller also satisfies the B portion of the independent contractor test.

Having met the statutory requirements of § 39-51-201(14), MCA, we hold that Voeller is an independent contractor rather than employee of Johnson and we, therefore, reverse.

CHIEF JUSTICE TURNAGE and JUSTICES SHEEHY, WEBER and BARZ concur.

JUSTICE McDONOUGH,

dissenting.

The majority have in essence reviewed this case de novo. They have not applied the proper standard of judicial review.

The standard of review of this Board of Labor Appeals determination is set out in § 39-51-2410(5), MCA, as follows:

“(5) In any judicial proceeding under 39-51-2406 through 39-51-2410, the findings of the board as to the facts, if supported by evidence and in the absence of fraud, shall be conclusive and the jurisdiction of said court shall be confined to questions of law.”

This was the standard employed by the District Court as set out in paragraph two of its Memorandum and Order.

“Supported by evidence” has been held by this Court to mean supported by substantial evidence. Jordan v. Craighead (1943), 114 Mont. 337, 136 P.2d 526. A finding of fact under the circumstances here is binding on the Court if it is “supported by substantial evidence, regardless of whether there is substantial evidence or even a preponderance of evidence to the contrary.” Gypsy Highview Gathering System, Inc. v. Stokes (1986), 221 Mont. 11, 716 P.2d 620, quoting Jordan, 114 Mont. 337, 136 P.2d 526. Substantial evidence “is something more than a scintilla of evidence, but it may be less than a preponderance of the evidence.” Gypsy Highview Gathering System, Inc., 716 P.2d at 623.

Is there more than a scintilla of evidence here supporting the factual findings of the Board of Labor Appeals and the hearing examiner?

The burden here is on the appellant to show that the worker is an independent contractor and there is a statutory test to determine the worker’s status. Section 39-51-201(4), MCA, provides:

“(14) ‘Independent contractor’ means an individual who renders service in the course of an occupation and:
“(a) has been and will continue to be free from control or direction over the performance of the services, both under his contract and in fact; and
“(b) is engaged in an independently established trade, occupation, profession, or business.”

We need only to discuss “(a)”. As to that part, we have cited four factors in determining degree of control in workers’ compensation which are also applicable here: 1) direct evidence of right or exercise of control; 2) method of payment; 3) furnishing of equipment; and 4) right to fire. See Sharp v. Hoerner Waldorf Corp. (1978), 178 Mont. 419, 584 P.2d 1298 (1978), and Solheim v. Tom Davis Ranch (1984), 208 Mont. 265, 677 P.2d 1034. We said in Sharp:

“Larson’s treatise enumerates four factors to consider when attempting to determine right of control in a given situation. Those factors are: (1) direct evidence of right or exercise of control; (2) method of payment; (3) furnishing of equipment; and (4) right to fire. Larson, § 44.31., p. 8-35. The treatise further points out that the consideration to be given these factors is not a balancing process, rather ‘. . . independent contractorship ... is established usually only by a convincing accumulation of these and other tests, while employment . . . can if necessary often be solidly proved on the strength of one of the four items [above].” Larson, supra.

From the above it is clear that all four factors are needed to show a worker is an independent contractor.

Looking at the factor of the furnishing of equipment, the facts are clear the worker furnished his own tools or equipment and this was a Finding (No. 5) by the examiner. The appellant has met his burden as to this factor required for finding the worker an independent contractor.

Second, as the method of payment here the worker was paid by the hour. “It is a strong indication” the status was that of employee. Sharp, 584 P.2d at 1302. Larson, § 44.33, p. 8-41. The workers here were paid weekly for the hours worked that week. This payment by the hour is more than a scintilla of evidence. The appellant claims the reason the hourly method was selected was because the appellants were unclear as to the extent of what they wanted done and were limited as to the amount of money they could spend. The appellant did decide what work was to be done. The weight to be given to the fact of hourly payment and its “strong indication” and the weight to be given to appellant’s reason for doing it, is within the province of the fact finder, neither one is conclusive either way.

Relative to direct evidence of right or exercise of control, this also is a question of fact. Is there a scintilla of evidence supporting direct control? Changes were made by appellant during the course of the work. Workers did as directed by the changes. The appellant paid an hourly rate and expected the workers to do what he wished. Appellant made day to day decisions as to materials used and paid for them directly to supplier (amounting to over $15,000.00). Appellant had the right to approve the work. See transcript p.32, lines 11-15 as follows:

“BAY: You were done upon, er, upon — like the inspection, did he inspect it and have any changes made or what?
“VOELLER: Oh ya, he had changes all the way through it, you know, but when we were finally done, you know, it was done. He looked at it and it was done.”

The appellant also felt he had the power to push them along and insist they work faster. This is certainly more than a scintilla of evidence of direct control and it would make a prima facie case, Findings 3 and 4 of the examiner are supported by this evidence.

Even if there was not substantial evidence to support the findings of the examiner as to factors of control and method of payment, there is no question there is more than a scintilla of evidence to support Finding 6 of the examiner which is as follows: “Either the appellant or the carpenters could terminate the work relationship without liability.” There was no written agreement, only oral.

In the examination of Mike Voeller, a worker, by the hearing examiner the following questions were asked and the following answers given:

“EXAMINER: During the course of the project could you have decided you didn’t want to do anymore and stop?
“VOELLER: Ya, I could have.
“EXAMINER: All right. Could Mr. Johnson have just decided he was . . . didn’t want to employ you anymore or be associated with you anymore and tell you he wanted somebody else to do it?
“VOELLER: He probably could’ve if he’d wanted, ya.”

The following discourse also took place between appellant Johnson and attorney for respondent.

“BAY: Mr. Johnson, if yqu weren’t happy with the work or felt these workers weren’t working fast enough, could you have fired them?
“JOHNSON: I think, like I testified earlier, if it would have taken them, you know, a real long time. To me it seemed like a long time, and not being a carpenter, you know, it’s really questionable what a. long time is. I’m sure somewhere along the line I could have, yes.”

This testimony of the two principal participants is more than a scintilla of evidence that either one could have terminated the relationship without liability. Mr. Voeller’s testing is quite clear taken as a whole. It is not precise because of the word “probably” as to his understanding of appellant’s right. The witness is not a user of words but is a trademan. Voeller certainly felt he could quit.

Of the four factors to be met by appellant only one, the furnishing of equipment, has been met. The determinations by the examiner against appellant of the other three questions of fact are supported by substantial evidence.

Section 39-51-2410(5), MCA, requires that courts accept the findings of fact of the agency if those findings are supported by substantial evidence. The District Court applied the standard and so should we.

JUSTICE HUNT joins in the dissent of JUSTICE McDONOUGH.


author: JUSTICE HARRISON

text:
    In re the MARRIAGE OF RONALD L. SKINNER, Petitioner and Appellant, and LUCINDA G. SKINNER, Respondent and Respondent.
    No. 89-304.
    Submitted on Briefs Oct. 20, 1989.
    Decided Dec. 19, 1989.
    783 P.2d 1350.

      James P. O’Brien, O’Brien Law Offices, Missoula, for petitioner and appellant.
    Paulette C. Ferguson, Missoula, for respondent and respondent.
   JUSTICE HARRISON

delivered the Opinion of the Court.

Ronald Skinner appeals the decision of the District Court of the Fourth Judicial District, Missoula County, awarding his former wife, Lucinda Skinner, property, maintenance payments and attorney’s fees and requiring him to pay all marital debts. We affirm.

The appellant presents the following issues for review:

1. Did the District Court err in failing to make adequate findings of fact before dividing the marital property?
2. Did the District Court err in awarding maintenance to the respondent in the amount of $300/month for three years?
3. Did the District Court err in awarding attorney’s fees to the respondent?

Ronald and Lucinda Skinner began living together in mid-1980 and on December 5, 1982 the couple married. This was the second marriage for both and each had children from previous marriages, but no children were born of this union. Both parties are 40-year-old high school graduates with some college education.

Throughout the marriage Ronald has been employed as a millwright at Stone Container’s Frenchtown plant. He was making approximately $14.50 per hour when the couple wed and at the time of these proceedings his wage was $17.65 per hour. Lucinda worked at various jobs during the marriage but at the time of dissolution was making $6.32 per hour as a lab assistant at Missoula Community Hospital where she has been employed since 1984. At one time Lucinda was a maintenance engineer for Champion International but had quit, at Ronald’s request, in order to work at the couple’s ranch and be available to Ronald’s children and her daughter.

Prior to the marriage Ron bought property, known as the “Kidd property,” which was sold and money from sale of the Kidd property was used to purchase the “Hoover property” in 1980. The Hoover property, located just outside of Stevensville, Montana, became the marital residence. When the couple separated in 1986, Ronald remained at the marital home, while Lucinda rented an apartment in Stevensville.

Ronald Skinner petitioned for dissolution in June, 1987. Following a hearing, the District Court entered a Decree of Dissolution on November 2, 1987, but reserved all other issues for final hearing. A hearing on the remaining issues was held January 14, 1988 from which the court made Findings of Fact and Conclusions of Law, and entered an Order on June 28, 1988. A month later, on Ronald’s motion, the court granted a new trial limited to new evidence. After the new trial in July, 1988, Lucinda moved for a stay in the proceedings in order to present additional evidence. The District Court granted the stay and additional evidence was taken on November 18, 1988. Based on the evidence from the additional hearings, the District Court amended its earlier Findings of Fact, Conclusions of Law and Order and filed the amended version on February 6, 1989.

During the course of the proceedings, Ronald seriously injured his left hand while replacing a window in his girlfriend’s house and did not work from February 27, 1988 to October 3, 1988. While he was convalescing Ronald received accident and sickness insurance payments of approximately $950 per month, but received full pay and benefits upon his return to work.

Before the injury Ronald moved from the marital home and moved in with his girlfriend. Also pre-injury, Ronald stopped making payments on the marital property (the Hoover property) and withheld this information from the District Court at the January 14, 1988 hearing. This non-payment eventually caused the property to be foreclosed upon and sold at sheriff’s sale. Ronald did not attempt to sell the property prior to the foreclosure.

The marital estate had also been dissipated by Ronald’s sale of certain livestock after the parties separated, in violation of the court’s restraining order. Ronald deposited most of these proceeds in his own account, but did put $5,000 from the sale of cattle into a trust account in recognition of Lucinda’s share. Additionally, Ronald deliberately misled the District Court regarding the sale of a bull. Ronald also deposited in his own account the entire amount of the couple’s refund from their joint Federal and State income tax returns. Ronald also deposited $5,000 of marital monies into a savings account in the name of the girlfriend he now lives with.

During the marriage, Lucinda inherited approximately $19,000 from her mother’s estate. Some of this money was invested in stocks and some was placed in a Kemper account on which both parties wrote checks. The majority of the inheritance was used up during the marriage, but the remaining $5,546 is now held jointly by Lucinda and her daughter.

Before discussing the issues presented on appeal, we will address the problem of bifurcation of issues in a dissolution proceeding. Section 40-4-104, MCA, provides:

“(1) The district court shall enter a decree of dissolution of marriage if:
“(d) to the extent it has jurisdiction to do so, the court has considered, approved, or made provision for child custody, the support of any child entitled to support, the maintenance of either spouse, and the disposition of property.”

In this case we note the District Court entered a decree of dissolution of the marriage on November 2, 1987, and it was not until February 6, 1989 that the District Court filed its final judgment relating to the disposition of the marital property. The requirement of § 40-4-104(1), MCA, was not met. The District Court should have entered judgment relating to the disposition of marital property before entering the decree of dissolution of the marriage.

Although we will not find reversible error in this instance, we call to the attention of the bench and bar the necessity to comply with the above statute.

In the past, before the amendment of § 40-4-104(1), MCA, in 1985, this Court notes that too often appeals were filed involving a delay of months, and occasionally years, between the decree of dissolution and the final judgment relating to child custody, support of any child entitled to support, the maintenance of either spouse and the disposition of property. The delays that occurred were often intolerable resulting in a complete failure of the administration of justice. In re Marriage of Krause (1982), 200 Mont. 368, 654 P.2d 963; and In re Marriage of Loegering (1984), 212 Mont. 499, 689 P.2d 260.

Along with the above-noted statute, the court should also consider the provisions of § 40-4-201(1), MCA, in dissolution cases.

Issue 1. Did the District Court err in failing to make adequate findings of fact before dividing the marital property?

Division of marital property is governed by statute:

“(1) In a proceeding for dissolution of a marriage, legal separation, or division of property following a decree of dissolution of marriage or legal separation by a court which lacked personal jurisdiction over the absent spouse or lacked jurisdiction to divide the property, the court, without regard to marital misconduct, shall, and in a proceeding for legal separation may, finally equitably apportion between the parties the property and assets belonging to either or both, however and whenever acquired and whether the title thereto is in the name of the husband or wife or both. In making apportionment, the court shall consider the duration of the marriage and prior marriage of either party; the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities, and needs of each of the parties; custodial provisions; whether the apportionment is in lieu of or in addition to maintenance; and the opportunity of each for future acquisition of capital assets and income. The court shall also consider the contribution or dissipation of value of the respective estates and the contribution of a spouse as a homemaker or to the family unit. In dividing property acquired prior to the marriage; property acquired by gift, bequest, devise, or descent; property acquired in exchange for property acquired before the marriage or in exchange for property acquired by gift, bequest, devise or descent; the increased value of property acquired prior to marriage; and property acquired by a spouse after a decree of legal separation, the court shall consider those contributions of the other spouse to the marriage, including:
“(a) the nonmonetary contribution of a homemaker;
“(b) the extent to which such contributions have facilitated the maintenance of this property; and
“(c) whether or not the property division serves as an alternative to maintenance arrangements.”

Section 40-4-202(1), MCA.

As this statute and Montana case law makes clear, “Equity, not equality, should guide the District Court’s discretion in dividing the marital estate.” In re Marriage of Fitzmorris (1987), 229 Mont. 96, 745 P.2d 353, 354, 44 St.Rep. 1809, 1811.

The District Court holds far-reaching discretion in dividing marital property. In re Marriage of Dirnberger (Mont. 1989), [237 Mont. 398,] 773 P.2d 330, 332, 46 St.Rep. 898, 900 (quoting In re Marriage of Stewart (Mont. 1988), [232 Mont. 40,] 757 P.2d 765, 767, 45 St.Rep. 850, 852, and In re Marriage of Watson (Mont. 1987), 227 Mont. 383, 739 P.2d 951, 954, 44 St.Rep. 1167, 1170). Furthermore, the standard of review for property division is that the District Court’s judgment, when based upon substantial credible evidence, will not be altered unless a clear abuse of discretion is shown. Id.

Ronald argues that the District Court’s findings and conclusions were insufficient for that court to determine the parties’ net worth in order to make an equitable division of the marital property. A district court is obligated to make a finding of net worth before dividing the marital estate. Schultz v. Schultz (1980), 188 Mont. 363, 365, 613 P.2d 1022, 1024. Such finding of net worth, however, need not be stated in a finding of fact as an exact amount. It is only necessary that “the cumulative effect of the findings can be equivalent to a finding of net worth when relevant factors are considered and adequately set forth by the trial court.” In re Marriage of Hunter (1982), 196 Mont. 235, 245, 639 P.2d 489, 494.

Ronald complains that of the court’s 60 plus finding and conclusions in the original Findings of Fact and Conclusions of Law (which were incorporated into the amended version), only five dealt with the parties’ liability. Ronald contends that these few findings concerning liability were inadequate to determine net worth and, thus, inadequate to make an equitable division of property. Having reviewed the Findings of Fact and Conclusions of Law, filed after both the January 14, 1988 and November 18, 1988 hearings, we hold that the findings provide a sound foundation for the court’s judgment. As we have previously noted:

“This foundation need not consist of a multitude of evidentiary facts, but the findings of fact must set forth a recordation of the essential and determining facts upon which the court rested its conelusions of law and without which the judgment would lack support.”

Stratford v. Stratford (Mont. 1981), [_ Mont. _,] 631 P.2d 296, 298, 38 St.Rep. 1093, 1095.

In the case at bar, the District Court, while not making a totally exhaustive list, did set forth the essential and determining facts from which it drew conclusions of law that supported its judgment. The few findings that deal with the parties’ liabilities are adequate, and, taken together with the other findings and conclusions, the parties’ net worth is capable of being determined. We hold that there was no abuse of discretion.

Furthermore, we hold that the District Court equitably divided the couple’s property, within the requirements of § 40-4-202, MCA, pertinent to the situation: Ronald, in defiance of the court’s restraining order dissipated the marital estate; there was extensive testimony regarding assets and liabilities of the parties, with the court’s findings detailed in the findings and conclusions; the contribution to the marriage of both parties were considered; the disparity between the real income and earning potential of Ronald and Lucinda were noted; and the obligation to support children from prior marriages was set out. The findings of fact and conclusions of law support the District Court’s judgment, and we conclude an equitable distribution was made.

Issue 2. Did the District Court err in awarding maintenance to the respondent in the amount of $300/month for three years?

Section 40-4-203, MCA, sets out the guidelines for awarding a spouse maintenance in a dissolution proceeding. Maintenance may only be awarded if the spouse seeking maintenance lacks sufficient property to provide for that spouse’s reasonable needs. Section 40-4-203(1), MCA. The statute also mandates that the trial court consider relevant facts of the situation including the financial resources of the spouse seeking maintenance, the ability of the maintenance paying spouse to meet his own needs, and the standard of living established during the marriage. Section 40-4-203(2), MCA.

In reviewing the award of maintenance, we once again note the latitude accorded the trial court:

“An award of maintenance is related only to the needs of the spouse seeking maintenance . . . The District Court has wide discretion in the determination of maintenance awards, and that discretion is not to be disturbed unless clearly erroneous.” (Citations omitted.)

In re Marriage of Aanenson (1979), 183 Mont. 229, 235, 598 P.2d 1120, 1123.

The District Court made a specific finding that Lucinda needs the maintenance payments to meet her monthly expenses and Ronald is capable of making the payment. There is substantial evidence in the record to support this finding. Ronald makes over $35,000 per year while Lucinda is paid much less. Ronald also has more disposable income since he no longer makes land payments and does not pay rent since he now lives with his girlfriend. Ronald asserts that Lucinda received sufficient property in the property division to support herself. However, the court awarded Lucinda, based on her contributions, only twenty percent of the value of the property.

In establishing the amount and duration of maintenance it is appropriate for the District Court to consider whether the assets awarded in the property division consume or produce income and whether employment is appropriate. Bowman v. Bowman (Mont. 1981), [_Mont.__,] 633 P.2d 1198, 1200-1201, 38 St.Rep. 1515, 1518. Additionally, “appropriate employment” must be determined with relation to the standard of living achieved by the parties during the marriage. In re Marriage of Madson (1978), 180 Mont. 220, 224-225, 590 P.2d 110, 112.

The property awarded Lucinda is not income producing nor does she make enough money through her employment to maintain her former standard of living. There is substantial evidence to support the District Court’s decision.

Issue 3. Did the District Court err in awarding attorney’s fees to the respondent?

Attorney’s fees in dissolution cases are addressed in § 40-4-110, MCA, which provides:

“Costs attorney’s fees. The court from time to time, 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 chapters 1 and 4 of this title and for attorney’s fees, including sums for legal services rendered and costs incurred prior to the commencement of the proceeding or after entry of judgment. The court may order that the amount be paid directly to the attorney, who may enforce the order in his name.”

In interpreting this statute, this Court has found:

“ ‘Traditionally, a showing of necessity- has been a condition precedent to the exercise of the court’s discretion to award attorney fees. Whitman v. Whitman (1974), 164 Mont. 124, 519 P.2d 966. But the lower court’s discretion in the matter will not be disturbed if substantial evidence is found in the record to support the award.’ Kaasa v. Kaasa (1979), [181] Mont. [18], 591 P.2d 1110, 1114, 36 St.Rep. 425, 430.
“ ‘Here, the trial court was well aware of the parties’ financial situations. It did not abuse its discretion in making an award of reasonable attorney fees, based on necessity. Houtchens v. Houtchens (1979), 181 Mont. 70, 592 P.2d 158, 36 St.Rep. 501, 505.’ Bailey v. Bailey (1979), [184] Mont. [418], 603 P.2d 259, 261, 36 St.Rep. 2162.”

Carr v. Carr (1983), 205 Mont. 269, 272-73, 667 P.2d 425, 427.

In the case at bar, there was great financial disparity between the parties. As discussed above, Ronald makes approximately three times Lucinda’s salary, and his disposable income has increased since the parties divorced. Based on this evidence, the trial court did not abuse its discretion in awarding Lucinda attorney’s fees.

We affirm the District Court’s judgment.

CHIEF JUSTICE TURNAGE and JUSTICES McDONOUGH, WEBER and BARZ concur.


author: JUSTICE WEBER

text:
    In the MATTER OF T.C. & R.C., Youth in Need of Care.
    No. 89-251.
    Submitted on Briefs Oct. 20, 1989.
    Decided Dec. 20, 1989.
    784 P.2d 392.
    Sally M. Johnson, Billings, for appellant.
    Marc Racicot, Atty. Gen., Kathy Seeley, Asst. Atty. Gen., Helena, Harold Hanser, County Atty., Greg Mullowney, Deputy, Damon L. Gannett, Olsen, Christensen & Gannett, Billings, for respondent.
   JUSTICE WEBER

delivered the Opinion of the Court.

In a hearing for permanent custody, the District Court for the Thirteenth Judicial District, Yellowstone County, ordered the parental rights of T.C. and R.C. terminated and awarded custody to the Montana Department of Family Services. Court-appointed guardian ad litem Damon L. Gannet appeared on behalf of the children. The natural mother, appellant, appeared in person and was represented by court-appointed counsel, Sally M. Johnson. The putative fathers were served by publication with notice of the proceedings but failed to appear. Defaults were entered. The natural mother appeals the termination of the parental rights of R.C.

Two issues are presented on appeal:

1. Was the District Court’s finding that R.C. was a “youth in need of care” supported by substantial credible evidence?
2. Did due process require appointment of counsel for the mother prior to the award of temporary custody of the children to the State?

The appellant is the natural mother of T.C. and R.C. The children have different fathers with whom appellant does not have contact. She never married either of the children’s fathers nor do either of the children know their father. At the time of the hearing, appellant was 26 and her husband, Mr. H., was 64.

This appeal concerns only R.C. However, we feel it necessary to set forth the facts as they apply to T.C. since the overwhelming evidence with regard to her abuse was properly considered in the determination as to R.C. Appellant became pregnant with T.C. when she was 16 years old. T.C. is now a 10 year old girl. The Children’s Protective Services (CPS) involvement began when T.C. was born. Appellant had difficulty in comprehending parenthood and exhibited problems in responding to T.C.’s needs. Appellant and T.C. were living with appellant’s maternal grandparents.

In 1979, Dr. Richard Agosto, a clinical psychologist evaluated appellant and determined her I.Q. to be in the borderline range of mental retardation due to poor educational background and lack of environmental and cultural stimulation. The Montana Center for Handicapped Children clinically evaluated T.C. and found she exhibited “significant delays in the area of cognitive skills, self-help skills, and severe delays in the area of speech and language.” At this time in her life, appellant’s grandparents were the primary caretakers of T.C. During the next year, T.C. demonstrated only a “two to four month gain in intellectual skills.” Several agencies were involved with T.C., appellant, and appellant’s grandparents over this period but due to the family’s refusal to cooperate, the agencies terminated their contact.

Late in 1980, CPS re-established twice monthly contact with appellant to help her obtain employable skills, develop parenting skills, and clarify who was parenting T.C. Appellant’s grandparents were T.C.’s primary caretakers until she was three, at which time appellant’s mother, A.C., assumed parenting responsibilities with appellant having infrequent visitations.

In 1985, CPS was again contacted by appellant, this time regarding R.C., appellant’s 8-month old baby boy. She was overwhelmed by parenting responsibilities and agreed to allow grandmother A.C. to parent R.C. Ongoing services were again terminated by CPS.

In 1987, the Montana Department of Family Services interviewed T.C. at school in response to a referral received concerning possible sexual abuse of T.C. by an uncle. At this point, T.C. was living with A.C., an aunt (age 16), and R.C. (age 2). T.C. disclosed to the social worker that her Aunt J. was doing “nasties” to her. She explained that Aunt J. was touching and kissing her on her “boobs,” “ass,” and “lucy,” indicating her vaginal area, and made T.C. also touch her in the same places. T.C. further told of seeing Aunt J. and her boyfriend have sex. T.C. said that she had seen Aunt J. perform the same acts on her brother, R.C., and touched and licked his “weiner.” Throughout the interview, T.C. displayed abnormal sexual behavior. At the conclusion of the interview, T.C. said she made up the story in order to hurt her Aunt J.

However, just two days later, another interview was conducted in which T.C.’s story remained consistent. She also demonstrated with anatomical drawings where J. touched, kissed, and licked her, and explained that both she and J. wore no clothing during these encounters. She also used the drawings to show where J. touched and kissed R.C. T.C. was video taped playing with anatomically correct dolls. Her behavior with the dolls repeated her story with the drawings. At one point, T.C. asked the social worker if she could remain in foster care until age 18, at which time she would return home “to beat up [J].”

Soon thereafter, Dr. Linda Johnson, a pediatrician at Billings Clinic, conducted a physical examination of T.C. She noted “a vaginal discharge being present” and a “definite fissure in the rectum with the cause being that of an external to an internal force.” Dr. Johnson concluded that the results of the examination were consistent with sexual abuse findings. During the course of the examination, T.C. again showed where she was touched by J. She also added explanations which indicated that Mr. H., appellant’s husband, was having sexual intercourse with her.

On February 18, 1987, the State petitioned the District Court for Temporary Investigative Authority of appellant’s two minor children, T.C. and R.C. On the basis of physical, sexual, and emotional abuse and neglect of the children, the petition was granted. On June 11, 1987, after a hearing, the District Court granted temporary custody to the State.

Over the next year, T.C. remained adamant about not wanting to return to live with her family or even see them. She displayed an intense fear of her mother when she would come to visit. A May 1988 visitation was supervised. During that visit T.C.’s “first act once we were all upstairs in the conference room was to attempt to take off her sweater and shirt and to ‘show my boobs’ to [appellant and appellant’s mother].” After this visit, visitations were terminated.

Continued therapy sessions revealed more and more information regarding the abuse suffered by these two children, including being burned with cigarette lighters. Both the things T.C. said and the things she did confirmed her stories of abuse. Her social behavior and intellectual skills improved “remarkably” during the time she stayed with the foster families. Due to “the children’s special needs and the apparent inability of the parent to change in a reasonable amount of time,” in late May 1988, the social worker recommended permanent custody be granted to the Montana Department of Family Services with consent to adopt. In July 1988, the District Court granted permanent custody of 10-year old T.C. and 4-year old R.C. to the Department and terminated parental rights. The natural mother appeals only as to R.C.

I

Was the District Court’s finding that R.C. was a “youth in need of care” supported by substantial credible evidence?

Appellant asserts that the District Court erred in terminating parental rights of R.C. based solely upon statements made by T.C., an emotionally disturbed child. She contends that at the time of the hearing, there was no psychological, medical or physical data generated as to R.C. Thus, she urges that there is no evidence to support the finding that R.C. is a “youth in need of care” as defined in § 41-3-102(11), MCA. She cites In re M.R.L. (1980), 186 Mont. 468, 608 P.2d 134, for the proposition that professional personnel must conclude that the child would be better off if the parental rights were terminated. She maintains that in M.R.L. there was considerable evidence based on the testimony of professionals, to support the court’s decision, and that in this case there was no “professional” testimony as to R.C. She contends that the only person who testified about R.C. was social worker, Dan Carlson-Thompson, and that his testimony alone is insufficient. She further contends that the court failed to order an evaluation of R.C. as required by § 41-3-609(3), MCA.

The State correctly points out that § 41-3-609(1), MCA, authorizes the district court to terminate parental rights if certain criteria are found to exist, and it is shown by clear and convincing evidence that the statutory criteria for such termination have been met. Matter of A.H., A.H., J.A.H. (Mont. 1989), [236 Mont. 323,] 769 P.2d 1245, 1247, 46 St.Rep. 395, 397. Furthermore, it asserts that the district court’s decision will not be disturbed unless a mistake of law exists or the factual findings are not supported by substantial credible evidence. Matter of J.L.S. and A.D.S. (Mont. 1988), [234 Mont. 201,] 761 P.2d 838, 840, 45 St.Rep. 1842, 1845. The State contends the record supports the termination of parental rights in this case. It maintains that after the temporary custody hearing, the order adjudicating T.C. and R.C. youths in need of care, was never appealed and is irrelevant in an appeal of a new proceeding for permanent custody. Relying on In the Matter of T.Y.K. & D.A.W.R. (1979), 183 Mont. 91, 95-96, 598 P.2d 593, 596, the State urges that when the district court observes abuse of one child, it should not be forced to refrain from taking action until the next child suffers injury. Regardless of the statements by T.C. regarding R.C., the State maintains that there was sufficient evidence to support that R.C. was a youth in need of care. We agree.

This Court will not overturn a transfer of custody of abused, neglected, or dependent youth to the State absent a clear showing of abuse of discretion. Matter of A.H., A.H., J.A.H.; 769 P.2d at 1249. Section 41-3-609(l)(c), MCA, provides for termination of the parent-child relationship if the child is an adjudicated youth in need of care and if both (i) an appropriate treatment plan that has been approved by the court has not been complied with by the parents or has not been successful; and (ii) the conduct or condition of the parents rendering them unfit is unlikely to change within a reasonable time. Youth in need of care means a youth who is dependent, abused, or neglected as defined in this section. Section 41-3-102(11), MCA. An “abused or neglected” child is one whose normal physical or mental health or welfare is harmed or threatened with harm by the acts or omissions of his parent or other person responsible for his welfare. Section 41-3-102(2), MCA. A “dependent youth” is one who has no proper guidance to provide for his necessary physical, moral, and emotional well-being, Section 41-3-102(10)(c), MCA. In its 1987 order for temporary custody, the District Court found T.C. and R.C. to be dependent youths in need of care because they were in “immediate or apparent danger of harm.” The District Court made this finding based on a culmination of reports on T.C. and R.C. from various social workers, psychologists and psychiatrists of various State agencies. T.C. had been involved with State agencies over a period of eight years.

The fact that T.C. is a youth in need of care is not in dispute. R.C. lived in foster homes since he was only 2 years old. During that time, he exhibited behavior problems such as urinating on the floor,' becoming self-destructive, hitting himself on the head, spitting and his attention span was “very short.” Dan Carlson-Thompson testified that he not only relied on statements from T.C. for his determination that R.C. had been abused and neglected, but that in addition appellant “has not parented [R.C.] and has not demonstrated an ability to do so,” and “the family members and extended family members’ apparent inability to protect [T.C.] would place [R.C.] at great risk if he was returned to that environment...” The District Court reviewed extensive evidence. Clearly, its determination that R.C. was a youth in need of care was based on more than just T.C.’s statements, and § 41-3-102(2) and (10)(c), MCA, have been satisfied. This Court has followed the majority rule that if it is shown that one child is a youth in need of care, “the parent does not have the privilege of inflicting brutal treatment upon each of his children in succession before they may individually obtain the protection of the state.” See In the Matter of T.Y.K. & D.A.W.R, 598 P.2d 593, 596.

Once there has been a determination that the child is a youth in need of care, the district court may terminate parental rights if two requirements have been met:

1. an appropriate treatment plan that has been approved by the court has not been complied with by the parents or has not been successful; and
2. the conduct or condition of the parents rendering them unfit is unlikely to change within a reasonable time.

Section 41-3-609(l)(c), MCA. These criteria have clearly been met. These children have been parented by appellant for only a brief portion of their lives. Their caretaking needs were tossed from family member to family member and they were abused by several family members. The family denied any abuse even after overwhelming physical and emotional evidence. Appellant, her grandmother, mother, husband and sister all adamantly rejected agency involvement and refused to cooperate with programs the State suggested in attempts to keep the family together. This Court has carefully reviewed the record and we note that it reveals much more abuse than has been elaborated in this opinion. We hold the District Court’s finding that R.C. was a “youth in need of care” is supported by substantial credible evidence.

II

Did due process require appointment of counsel for the mother prior to the award of temporary custody of the children to the State?

Appellant contends that because she was not represented by counsel during the temporary custody proceedings, her due process rights were violated. She relies on Lassiter v. Department of Social Serv. (1981), 452 U.S. 18, 101 S.Ct. 2153, 68 L.Ed.2d 640, which stated that in deciding what due process requires, there are three elements which must be balanced: (1) the private interests at stake; (2) the government’s interest; and (3) the risk that the procedures used will lead to erroneous decisions. In short, because as she asserts, parental rights are fundamental rights under the Constitution, she claims she was entitled to appointed counsel throughout the temporary proceedings as a matter of due process.

The State maintains that appointment of counsel is not required for “temporary” custody hearings. We agree.

“In child protective proceedings culminating in the termination of parental rights, due process of law requires only that the parents have counsel prior to the permanent custody hearings. Due process does not require that the parents have counsel during the initial stages of the proceedings. Matter of M.F. (1982), 201 Mont. 277, 653 P.2d 1205. In so holding, this Court relied upon the United States Supreme Court in Lassiter v. Department of Social Services (1981), 452 U.S. 18, [101 S.Ct. 2153, 68 L.Ed.2d 640.”

Matter of A.B. (Mont. 1989), [236 Mont. 323,] 780 P.2d 622, 46 St.Rep. 1734. In Matter of H.R.B. (Mont. 1989), [239 Mont. 387,] 780 P.2d 1139, 46 St.Rep. 1771, we held that:

“Because the parents’ right to custody is a fundamental interest, the State must show by clear and convincing evidence that the statutory criteria have been met. Our decisions hold that we will not reverse a district court’s decision regarding findings of fact unless the findings of fact are not supported by substantial credible evidence.” (Citations omitted.)

“All reasonable presumptions as to the correctness of the determination by the district court will be made” on appeal. See Matter of J.L.S. and A.D.S. [(1988),] [234 Mont. 201,] 761 P.2d 838.

Appellant was represented by counsel throughout the proceedings for permanent custody. Clearly, she was not deprived of due process. We hold that due process does not require appointment of counsel for the mother prior to the award of temporary custody of the children to the State.

Affirmed.

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


text:
    In re the MARRIAGE OF ROXY L. ANDERSON, Petitioner and Appellant, and ARVID W. ANDERSON, Respondent and Respondent.
    No. 89-307.
    Submitted on Briefs Oct. 25, 1989.
    Decided Dec. 20, 1989.
    783 P.2d 1372.

      Kevin T. Sweeney, Sweeney & Healow, Billings, for petitioner and appellant.
    Greg W. Hennessy, Bjella, Neff, Rathert, Wahl & Eiken, Willis-town, N.D., for respondent and respondent.
   JUSTICE WEBER

delivered the Opinion of the Court.

This is an appeal from an order by the District Court, Seventh Judicial District, Dawson County, Montana, modifying a custody order. Roxy Anderson Denning appeals. We affirm.

The issues presented for our review are:

1. Does substantial credible evidence support the District Court’s findings of fact in regard to modification of custody pursuant to § 40-4-219(1), MCA?
2. Does the petition for modification of custody meet the jurisdictional requirements of § 40-4-220, MCA?

Mr. Arvid W. Anderson (father) and Ms. Roxy L. Anderson Denning (mother) were married in 1968. They had three sons, Duane, Kory and Shane. Father and mother were divorced in 1985. The divorce decree granted joint custody, with residential custody to mother. Mother and the children have since resided in Glendive, Montana, and mother is remarried to Mr. Michael Denning. Father moved to Williston, North Dakota, and married his present wife, Carol Anderson, in April 1988.

Father exercised his visitation rights regularly after the divorce. In the summer of 1988 the two younger sons expressed a desire to live with father. At this time Duane was 18, and Kory and Shane were 13 and 11, respectively. When mother did not agree to this suggestion, father filed a petition for modification of custody, requesting that the two younger sons be allowed to live with him and his new wife in Williston, North Dakota. The older son was approaching his senior year in high school and elected to stay in Glendive, Montana, to finish his schooling.

After a hearing, the District Court granted father’s petition. Mother appeals.

I

Does substantial credible evidence support the District Court’s findings of fact in regard to modification of custody pursuant to § 40-4-219(1), MCA?

This Court’s standard of review of a custody order is whether the district court’s findings of fact are supported by substantial credible evidence. In re Marriage of Morazan (Mont. 1989), [237 Mont. 294,] 772 P.2d 872, 874, 46 St.Rep. 814, 817. District court findings of fact will be overturned only if clearly erroneous. Rule 52(a), M.R.Civ.P.

Modification of a prior custody decree is governed by § 40-4-219, MCA, which provides in pertinent part:

“Modification. (1) The court may in its discretion modify a prior custody decree if it finds, upon the basis of facts that have arisen since the prior decree or that were unknown to the court at the time of entry of the prior decree, that a change has occurred in the circumstances of the child or his custodian and that the modification is necessary to serve the best interest of the child and if it further finds that:
“(c) the child’s present environment endangers seriously his physical, mental, moral, or emotional health and the harm likely to be caused by a change of environment is outweighed by its advantages to him:
“(d) the child is 14 years of age or older and desires the modification;”

Pursuant to § 40-4-219(1), MCA, the court must find that a change has occurred in the circumstances of the child, that the modification is in the best interests of the child, and that the requirement of one of the subsections is satisfied. In the present case father contends that Subsection (c) is satisfied in that the children’s environment in mother’s home seriously endangers the children’s physical, mental, moral or emotional health and that the advantage of a change would outweigh any harm. Father also notes that his son, Kory, is now 14 and may choose his residential parent pursuant to Subsection (d).

On December 21, 1988, the District Court held a hearing on father’s motion. The court heard testimony from all parties concerned, including father and his new wife, mother and her new husband, and the older son, Duane. The court interviewed the two younger sons, Kory and Shane, in chambers without any other parties present.

In substance, the District Court found that the presence of the stepfather, Michael Denning, had created a “hostile, siege-like” environment in the home, partially because of Mr. Denning’s alcohol consumption. When Mr. Denning consumes alcohol he becomes angry and yells at the boys. The boys spend increasing time in their rooms in order to avoid the stepfather. Mr. Denning has been verbally abusive, and threatened to take the older son out and hit him. He has mistreated the children’s dog, both throwing and kicking it. The court noted that Mr. Denning had previously been through alcohol treatment and had recently instigated two bar fights. On one occasion, when Mr. Anderson came to visit his sons, Mr. Denning slammed the door in his face.

At the hearing the District Court also found it significant that Kory would be 14 years old on January 24, 1989, and would at that point be able to choose his residential parent, and that Shane expressed the desire to remain with his brother Kory.

In its order modifying custody, the court concluded that the remarriage of the mother which had caused the boys to feel like strangers in their own home was a change in circumstances and that custody modification was in the boys’ best interests. It further concluded that the boys’ present environment seriously endangered their mental, moral, emotional and perhaps their physical health.

Mother contends that these findings are not supported by substantial credible evidence, and alternatively that they do not satisfy the “serious endangerment” standard as required by the statute. Our review of the record, however, reveals substantial credible evidence to support the District Court’s findings. Testimony by all three children supported the court’s findings on the home environment, the stepfather’s drinking, and their apprehension of him. The children confirmed the abusive treatment of their dog. Kory and Shane stated their desire to live with their father and new stepmother.

We further conclude that these circumstances satisfy the statutory requirements. The presence of the stepfather in the home and the consequent change in the home environment to one of strained relations and apprehension satisfies the requirement of changed circumstances. The modification of custody is in the best interests of the children since they both desire to live with their father, and feel very comfortable with their new stepmother. The children’s fear of their stepfather, heightened by his drinking episodes, the hostile home environment, and the potential for physical abuse, is sufficient to meet the standard of serious endangerment. Marriage of Morazan, (evidence of mother’s unstable lifestyle, combined with allegations that stepbrothers had sexually abused M.M., was sufficient to meet custody modification standard); In re Marriage of Cole (Mont. 1988), [234 Mont. 352,] 763 P.2d 39, 45 St.Rep. 1965, (evidence that children feared their father and that living with him was an extremely unhappy experience, creating stressful home environment, was sufficient to modify custody); In re Marriage of Cook (1986), 223 Mont. 293, 725 P.2d 562, (evidence of mother’s attempt to stifle children’s relationship with father and her interference with communication with father was sufficient to modify custody); In re Marriage of Stout (1985), 216 Mont. 342, 701 P.2d 729, (evidence of mother’s lack of stability and fact that she had been arrested for driving under the influence with child in car, was sufficient to support trial court’s order modifying custody); In re Custody of Dumont (1985), 216 Mont. 118, 700 P.2d 167, (evidence that child was subjected to harsh, repeated, inappropriate and excessive physical discipline and exhibited signs of fear of stepfather was sufficient to meet standard).

In cases involving custody of children, it is particularly important that an appellate court defer to the district court, which is able to personally evaluate the testimony of the children and other witnesses. We do not attempt to judge the facts based on a cold record. In this case, involving present abuse, and the potential for future abuse by someone with an alcohol problem, we underscore the reliance that an appellate court places on the district court. In re Marriage of West (Mont. 1988), [233 Mont. 47,] 758 P.2d 282, 285, 45 St.Rep. 1281, 1283; Connolly v. Connolly (1984), 209 Mont. 198, 305-06, 680 P.2d 568, 572; Malcolm v. Malcolm (1982), 196 Mont. 477, 478, 640 P.2d 450, 451. We conclude that substantial credible evidence supports the District Court’s findings, and that the statutory requirements for modification of custody were met. We affirm the order by the District Court.

II

Does the petition for modification of custody meet the jurisdictional requirements of § 40-4-220, MCA?

Before the district court may grant a hearing on modification of custody, the party seeking modification must submit an affidavit pursuant to § 40-4-220(1), MCA, which provides:

“Affidavit practice. (1) A party seeking a temporary custody order or modification of a custody decree shall submit, together with his moving papers, an affidavit setting forth facts supporting the requested order or modification and shall give notice, together with a copy of his affidavit, to other parties to the proceeding, who may file opposing affidavits. The court shall deny the motion unless it finds that adequate cause for hearing the motion is established by the affidavits, in which case it shall set a date for hearing on an order to show cause why the requested order or modification should not be granted.”

In the present case, father provided the District Court with an affidavit stating that the boys had always expressed a desire to reside with him, but that this expressed desire “has now reached such a degree that the youngest boy has said he is willing to give up the friends he has in Glendive in order to move to Williston.” He stated that the boys repeatedly express to him a lack of “feeling at home” in Glendive, possibly resulting from the strained relationship with the new stepfather. He stated the boys perceive their present home-life as “uncomfortable.” He noted that they have cousins their age in North Dakota. Mother contends that this affidavit failed to establish adequate cause for a hearing, which is the preliminary jurisdictional requirement.

There must be substantial compliance with the procedures set forth in § 40-4-220(1), MCA, in order to insure that all parties have notice and an opportunity to respond. Marriage of Stout, 701 P.2d at 732. In Marriage of Stout a verified petition averred that the mother had a severe drinking problem and had taken the minor children from the court’s jurisdiction without notice to the father. This Court concluded that these averred facts, combined with allegations that the mother’s living situation had changed and it would be in the children’s best interests to live with the father, were sufficient to confer jurisdiction upon the District Court. In the present case, we conclude that father’s affidavit stated facts constituting adequate cause for a hearing and the District Court properly assumed jurisdiction.

Affirmed.

CHIEF JUSTICE TURNAGE and JUSTICES HARRISON, HUNT, SHEEHY and BARZ concur.

JUSTICE McDONOUGH did not participate in this opinion.


author: JUSTICE BARZ

text:
    FINN and VIRGINIA WALSTAD; and Nordak Industries, U.S.A., Inc., Plaintiffs and Appellants, v. NORWEST BANK OF GREAT FALLS or Northwestern Bank of Great Falls; the Economic Growth Council of Great Falls; and Norwest Incorporated, a Minnesota corporation, Defendants and Respondents.
    No. 89-329.
    Submitted on Briefs Oct. 20, 1989.
    Decided Dec. 20, 1989.
    783 P.2d 1325.

      Terry W. Mackey, Cheyenne, Wyo., Howard F. Strause, Great Falls, for plaintiffs and appellants.
    Robert S. Vermillion, Smith, Baillie & Walsh, Great Falls, for Economic Growth Council, James R. Poore, Ill.
    Poore, Roth & Robinson, Butte, David L. Hashmall, Popham, Haik, Schnobrich & Kaufman, Minneapolis, Minn., for Norwest Bank, et al.
   JUSTICE BARZ

delivered the Opinion of the Court.

This is an appeal and cross-appeal from an order of the District Court of the Eighth Judicial District granting Norwest Bank of Great Falls’ motion for summary judgment and Finn and Virginia Walstads’ motion to amend their complaint allowing the addition of Nordak Industries, Inc. as a party plaintiff against the Economic Growth Council. We affirm in part and reverse in part.

Appellants Finn and Virginia Walstad are the sole shareholders and directors of Nordak Industries, USA, Inc., a Montana corporation. As part of an expansion program, Nordak borrowed funds from Norwest Bank of Great Falls (Norwest) and the Economic Growth Council (EGC). Walstads were guarantors of these loans which were also secured by Nordak’s assets. Subsequent to borrowing these funds, Nordak underwent a period of financial difficulty. Walstads allege that EGC’s failure to qualify for a Small Business Administration program that would have lowered Nordak’s interest rate coupled with both defendants’ mismanagement of Nordak’s business affairs culminated in the forced transfer of Nordak’s assets pursuant to an assignment executed by Nordak in favor of Norwest.

The Walstads’ complaint, filed January 6, 1986, included counts of breach of loan agreements, fraud and negligent misrepresentation, negligence, tortious interference with business and alleged vicarious liability on the part of Norwest, Incorporated (Norwest, Inc.). Both Norwest and EGC counterclaimed for the remainder of the loans to Nordak due under the Walstads’ guaranty. Walstads moved to amend their complaint to add Nordak as a party plaintiff on August 11, 1987. The District Court permitted the amendment as to EGC but denied the amendment as to Norwest.

Walstads appeal from the District Court’s denial of their motion to amend as to Norwest while EGC cross appeals the District Court’s grant of the motion to amend as to EGC. Both Norwest and EGC filed motions for summary judgment which the District Court granted as to the Walstads, based on the absence of genuine issues of material fact and the propriety of judgment in favor of respondents as a matter of law.

Walstads’ first contention on appeal is that the District Court improperly refused to permit amendment adding Nordak as a party plaintiff as against Norwest. We affirm.

The Montana Rules of Civil Procedure allow amendment of pleadings with the district court’s permission or the consent of the adverse party if such amendment would further the ends of justice. Rule 15(a), M.R.Civ.P. Rule 15(a) has been interpreted liberally, allowing amendment of pleadings as the rule and denying leave to amend as the exception. Priest v. Taylor (1987), 227 Mont. 370, 378, 740 P.2d 648, 653. One exception to the general rule arises when the amendment would be subject to dismissal. Halpert v. Wertheim & Co., Inc. (S.D.N.Y. 1979), 81 F.R.D. 734.

The District Court correctly found that Nordak’s claims against Norwest are barred because Nordak expressly and voluntarily transferred and assigned to Norwest all its assets including its legal claims on August 25, 1983.

The Agreement assigning Nordak’s claims to Norwest is clear and unambiguous. The Agreement provided:

“3. Concurrent with the execution of this Agreement, NORDAK will execute and deliver such bills of sale and other documents reasonably necessary to vest in NORWEST all of NORDAK’S . . . d) All contract rights, and all other rights to payment of every type and description, excluding only that certain claim of NORDAK against Dyecraftsman, Inc. currently being prosecuted in Cause No. BDV-82-015 in the District Court of the Eighth Judicial District of the State of Montana; and any rights of action or claim against Great Falls Economic Growth Council . . .”

Montana law is clear that where the language of a written contract is clear and unambiguous, the court is to apply the contractual language as written. Kartes v. Kartes (1981), 195 Mont. 383, 387, 636 P.2d 272, 274.

“[I]ntent of the parties is only looked to when the agreement in issue is not clear on its face. (Citation omitted.) Where the contractual language is clear and unambiguous on its face, it is this Court’s duty to enforce the contract as drafted and executed by the parties.” (Citation omitted.)

Monte Vista Co. v. Anaconda Co. (Mont. 1988), [231 Mont. 522,] 755 P.2d 1358, 1362, 45 St.Rep. 809, 814. The Walstads attempt to characterize the August 25, 1983 Agreement as a release in order to argue that there is a dispute regarding the intent of the parties to release Norwest. Citing Tribby v. Northwestern Bank of Great Falls (1985), 217 Mont. 196, 704 P.2d 409. Tribby did not involve a transfer and assignment of rights or legal claims. The Agreement in this case is not a settlement by one joint tortfeasor with a plaintiff. The Agreement also does not bar Nordak’s claims against Norwest because Nordak “released” Norwest; it bars Nordak’s claims because Nordak transferred away its right to assert claims except those specifically reserved by the Agreement.

The District Court also correctly found that any claim Nordak may have had against Norwest is barred by the statute of limitations, sec. 27-2-204, MCA. All of the claims against Norwest are essentially tort claims, The proposed amended complaint was filed August 11, 1987. The cause of action against Norwest accrued at the time of the Agreement, August 25, 1983, more than three years before the proposed amendment.

Appellants argue that pursuant to Rule 15(c), M.R.Civ.P., the amendment to add Nordak as a party plaintiff relates back to the filing of the original complaint and thus is not barred by the three-year statute of limitations on tort actions. Section 27-2-204, MCA. We addressed for the first time whether a second plaintiffs cause of action related back to the filing of the original complaint in Tynes v. Bankers Life Co. (1986), 224 Mont. 350, 730 P.2d 1115. The decision in that case was founded in the policies underlying the enactment of statutes of limitations, and, when the defendant has “adequate notice of a claim against it’ ” has an opportunity to prepare a reasonable defense, and is not subject to undue prejudice, the second plaintiffs cause of action will relate back. Tynes, 730 P.2d at 1120-21.

The first plaintiff in Tynes alleged the defendant wrongfully refused to provide insurance coverage for plaintiff’s psychiatric treatment in violation of the policy held by plaintiffs father. Tynes, 730 P.2d at 1119. The first plaintiffs father, as second plaintiff, sought to bring causes of action against the defendant for breach of contract, promissory estoppel, and negligence. Tynes, 730 P.2d at 1121. We found in that case that:

“Permitting [father’s] claims against [defendant] to relate back to the date of [son’s] original complaint did not undermine [defendant’s] ability to defend itself. The claims of the two parties are nearly identical. They arise from the exact same ‘conduct, transaction, or occurrence set forth ... in the original pleading’ as required by Rule 15(c), M.R.Civ.P. The pleadings contain the same causes of action. Finally, there is a “clear identity of interest” between [son] and [father]. [Father] was the original insured. He agreed ... to be responsible for [son’s] medical bills incurred at Wilson Center. The only difference in the two pleadings is damages. Under these circumstances, we do not believe [defendant] was prejudiced when the trial judge allowed [father’s] claims to relate back to the date of [son’s] original complaint.”

Tynes, 730 P.2d at 1120-21.

Walstads, as directors of Nordak, neglected any claims Nordak may have been entitled to assert against the defendants for approximately four years. Nordak’s alleged injuries result from defendants’ loan of money to it. Walstads’ alleged harm derived from their guarantee of Nordak’s loans. While collateral, these transactions are not identical. Furthermore, Nordak and Walstads had no “clear identity of interest.” The claims of Nordak and Tynes as well as the facts of both cases are distinguishable. The District Court’s denial of leave to amend as regards Norwest and Norwest, Inc. is clearly an appropriate exception to Rule 15(c).

The District Court’s order did allow the Walstads to amend the complaint which added Nordak as a party plaintiff against EGC. EGC has filed a cross appeal. We reverse. The District Court allowed the amended complaint to be filed against EGC because the Agreement expressly reserved to Nordak the right to assert legal claims against the Economic Growth Council of Great Falls.

However, the amended complaint alleges that Nordak’s claims against EGC arose prior to September of 1983. The claims against EGC included negligence, tortious interference with business, and breach of fiduciary duty. Obviously, sec. 27-2-204, MCA, applies to EGC based on the foregoing discussion and EGC is also entitled to have the claims against it dismissed.

Walstads further contend the District Court erred in granting summary judgment in favor of both defendants based on the lack of a separate duty owed by the defendants to Walstads as shareholders and guarantors of Nordak. We affirm.

A shareholder guaranteeing corporate loans may recover individual damages from the lender provided that a duty separate from that owed the corporation exists. Bottrell v. American Bank (Mont. 1989), [237 Mont. 1,] 773 P.2d 694, 710, 46 St.Rep. 561, 579.

We previously held that when corporate shareholders personally guarantee corporate debts, the shareholders may not recover as individuals for the lender’s breach of the covenant of good faith and fair dealing and negligent misrepresentation absent a separate duty owed to the shareholders. Bottrell, 773 P.2d at 709.

Walstads’ alleged damages are substantially similar to those suffered by the plaintiff in Bottrell. In neither case did the guarantor/ shareholders establish either a separate duty owed them by the lender or damages distinct from those suffered by the corporation. Bottrell, 773 P.2d at 710. We find no abuse of discretion in the District Court’s grant of summary judgment.

We affirm the District Court’s order denying Walstads permission to add Nordak as a party plaintiff as against Norwest and reverse its order permitting addition of the same as against EGC. We affirm the District Court’s grant of respondents’ motions for summary judgment.

JUSTICES HARRISON, SHEEHY, McDONOÜGH and WEBER concur.