author: JUSTICE WEBER

text:
    STANLEY J. KONDELIK and ELIZABETH A. KONDELIK, husband and wife, Plaintiffs and Appellants, v. FIRST FIDELITY BANK OF GLENDIVE, MONTANA, Defendant and Respondent.
    No. 93-080.
    Submitted on Briefs May 13, 1993.
    Decided July 28, 1993.
    50 St.Rep. 874.
    259 Mont. 446.
    857 P.2d 687.

      For Plaintiffs and Appellants: Arnie A. Hove, Circle.
    For Defendant and Respondent: Richard A. Simonton, Simon-ton, Howe & Schneider, Glendive.
   JUSTICE WEBER

delivered the Opinion of the Court.

This is an appeal by plaintiffs Stanley J. and Elizabeth Kondelik from an order of the District Court of the Seventh Judicial District, Dawson County, granting defendant’s motion for summary judgment in part and dismissing in part without prejudice. We affirm in part and reverse in part.

The issues for review are restated as follows:

1. Did the District Court err in granting summary judgment in favor of defendants on plaintiffs’ claim for breach of fiduciary duty?

2. Did the District Court err in determining that claims for misuse and misappropriation of corporate funds cannot be brought by plaintiffs individually?

3. Did the District Court err in dismissing plaintiffs’ claims of fraud and negligent misrepresentation because they were premature?

Plaintiffs allege tortious conduct on the part of the First Fidelity Bank of Glendive (Bank) concerning Kondelik Ranch, Inc. (the Corporation), a Montana farm and ranch corporation which incorporated in 1968. Stanley J. Kondelik (Stanley) and his brother, Emil J. Kondelik (Emil), were the sole shareholders in 1991 when they agreed to divide the land and other corporate assets based upon Stanley’s ownership of 47% of the shares in the Corporation and Emil’s ownership of 53% of the shares. Their plan was also to divide the liabilities in the same proportion. This division of liabilities proved to be unsuccessful.

In 1990, the Corporation’s officers were Stanley, Emil and Emil’s wife, Evelyn Kondelik (Evelyn). Stanley was president of the Corporation from April 1990, after the death of his father, until February 1992, when he resigned that office. Stanley’s wife, Elizabeth, was not a shareholder or officer. Prior to October 1988 when Stanley and Elizabeth (the plaintiffs) were married, Elizabeth had no association with Kondelik Ranch, Inc.

Stanley and Emil both testified by deposition that they had differed over certain ranch matters as early as 1987, but that it was not until after the marriage of the plaintiffs in October 1988 that Stanley questioned the conduct of other officers of the Corporation. No split of the Corporation was pursued prior to 1990, however, because the brothers did not want to upset their father, Emil Kondelik, Sr., who lived until January 1990.

At the time of Stanley and Elizabeth’s marriage in October 1988, the Corporation had two delinquent loans with the Bank which had recently been guaranteed by Farmers Home Administration (FmHA). The Bank had required the FmHA guarantees as a condition for continuing to carry the Corporation’s real estate and equipment loans. One of these loans was in the principal amount of $112,000 and secured by a security agreement, a real estate mortgage and two brand mortgages (the equipment loan); the other loan, with a principal amount of $288,000, was secured by a real estate mortgage (the real estate loan).

In addition, the Bank made operating loans over a period of years to the Corporation. When the Corporation was unable to pay current operating loans, the Bank carried them over to the next year. On December 7,1989, the carryover operating debt was $220,965.03. The Corporation renewed this debt and included the 1989 operating debt in a new note for $250,000 executed in December 1989 (the operating loan). Emil, Evelyn, Stanley and Elizabeth all signed personal guarantees for this amount. Although Elizabeth has never been a shareholder, officer or director of the Corporation, the Bank required her signature on the operating loan. This operating loan represented several years of operating expenses which the Corporation was unable to pay the Bank because of drought and other conditions beyond its control.

In 1991, the Kondeliks separated the Corporation’s assets and liabilities according to the pro rata shares of stock owned by Emil and Stanley and began operating the ranch as two units. When the Bank split the operating loan, plaintiffs were required to sign personal guarantees on new loans representing both couples’ shares of the $250,000 operating loan. Thus, plaintiffs remain obligated as guarantors on Emil and Evelyn’s share of the operating loan. The operating loan is not guaranteed by FmHA. Since May 1991, the Bank has provided separate current operating loans to Stanley and Elizabeth as individuals.

Stanley has signed personal guarantees for over $600,000 of Corporation debt. In addition to the guarantees for the operating loan discussed above, Stanley has signed personal guarantees for 100% of the equipment and real estate loans. As far as the real estate and equipment loans are concerned, the Bank has merely accommodated the Kondeliks by allowing them to make separate payments based on stock ownership; it has not actually split the responsibility for the loans. The couples have split all other assets and liabilities on a 47%/53% basis and have operated separately since May or June of 1991.

Stanley and Elizabeth testified in their depositions that they wanted to separate the ranching operations because they believed that Emil and Evelyn were misusing and misappropriating Corporation funds. Evelyn was secretary-treasurer of the Corporation and handled its bookkeeping matters. At a shareholder meeting in 1989, Evelyn admitted using corporate operating funds inappropriately and agreed to stop this practice. Plaintiffs also testified in their depositions that when Evelyn’s inappropriate spending continued, they advised Perry O. King (King) of their concerns regarding Evelyn’s conduct. King was an agricultural loan officer, vice-president and employee of the Bank. He was in charge of servicing the Corporation’s loans at the time plaintiffs advised him of Evelyn’s conduct. Plaintiffs contend that King agreed to monitor the Corporation operating account for inappropriate advances and withdrawals of operating funds by Evelyn.

Plaintiffs have further testified that in February 1991, the Bank agreed to split the Corporation’s debt if the shareholders reached an agreement concerning the misappropriated funds. The Kondeliks reached an agreement in May 1991. Pursuant to this agreement, Emil and Evelyn agreed to pay Stanley $30,000 in exchange for his release of all claims against them relating to misuse and misappropriation of corporate funds. Plaintiffs claim the Bank pressured them into signing this agreement before their accountant’s review was final by refusing to give them a loan for current operating expenses prior to reaching an agreement and settlement.

After the Kondeliks settled the matter, the Bank prepared separate notes to refinance the operating loan. Plaintiffs signed a note individually for 47% of this debt with the Bank. They also signed personal guarantees for Emil and Evelyn’s share of the operating loan. Emil and Evelyn’s share of the operating loan remains in the name of Kondelik Ranch, Inc. and Emil and Evelyn continue to operate their share of the ranch as the corporate entity. In addition to the operating loan, which is not FmHA guaranteed, Stanley remains responsible for 100% of the FmHA-guaranteed equipment and real estate loans.

Plaintiffs testified by deposition that King told them he would handle the split of the debt and, specifically, that he would arrange to have the equipment and real estate loans separated by FmHA to reflect the Kondeliks’ split of land and equipment so that each couple would be responsible only for their share of the total debt. King testified that he agreed to work with the Kondeliks — in his capacity as a loan officer servicing their accounts — in order to effectuate the split of the Corporation. King did try to achieve this separation with FmHA for the Kondeliks but the first request was denied by FmHA.

Stanley, Emil and Evelyn remain obligated on the entire corporate debt which totals over $600,000. Elizabeth remains obligated on $250,000 in corporate operating loan debt. Stanley and Elizabeth, who now operate their share of the ranch as individuals, have pledged personal collateral to the Bank for these debts.

On March 17,1992, after learning that Emil and Evelyn were late on their payments to the Bank, plaintiffs filed a complaint against the Bank charging two counts of malice, and one count each of breach of fiduciary duties, negligent misrepresentation and fraud. They requested actual and punitive damages and specific performance of the Bank’s alleged agreement to split the loans. The District Court granted summary judgment in favor of the Bank on plaintiffs’ claims for malice and breach of fiduciary duties and dismissed without prejudice the claims of fraud and misrepresentation. Additional facts are provided throughout this opinion as necessary.

I.

Did the District Court err in granting summary judgment in favor of the Bank on plaintiffs’ claim for breach of fiduciary duties?

The plaintiffs contend that when the Kondeliks requested a split of the Corporation’s assets and liabilities, the Bank agreed to do so subject to certain conditions. They claim that the Kondeliks met these conditions, but the Bank did not split the debt as agreed. The Bank’s failure to split the Corporation’s debt is the primary issue here. Stanley and Elizabeth contend that a fiduciary relationship existed between them and the Bank. The District Court determined that no fiduciary duty was owed by the Bank to either Stanley or Elizabeth.

Plaintiffs contend that King acted in a fiduciary relationship with them regarding the split of the Corporation. They further contend that the Bank owed Elizabeth a separate duty to monitor for misuse and misappropriation of operating funds. According to the plaintiffs, King assured them that he would obtain separate loan guarantees if they reached an agreement with Emil and Evelyn concerning the misuse and misappropriation of corporate funds.

Plaintiffs claim that they contacted King regarding the misuse and misappropriation of Corporation funds, that they provided evidence of the same and that King assured them that the Bank would monitor the operating loans. Plaintiffs further contend that the misuse and misappropriation continued and that no monitoring was done.

The plaintiffs also argue that the District Court disregarded the fact that Elizabeth was never a shareholder, officer or director of the Corporation. In addition, the plaintiffs have presented other facts which they contend are relevant to the issue of whether a fiduciary relationship existed here between the Bank and themselves.

As previously stated, FmHA rejected the split of the real estate and equipment loans. The FmHA guarantees were obtained at the urging of the Bank in lieu of other remedies when the Corporation was having difficulty meeting its obligations. In 1987, the Bank had required the Corporation to obtain FmHA guarantees on the Corporation’s existing real estate and equipment loans as a condition for carrying these loans. Acting on behalf of the Corporation, King obtained the first FmHA guarantees in 1987. Plaintiffs contend that King was acting or agreed to act in a fiduciary relationship in 1991 when he assured them that the Bank would again handle the FmHA paperwork to obtain separate guarantees for split loans. According to the plaintiffs, King further assured them in May of 1991 that he would obtain separate loan guarantees if they agreed on a split of the ranch and if Stanley and Elizabeth would release their claims of misuse and misappropriation against Emil and Evelyn.

In the order granting summary judgment to the Bank on this issue, the District Court stated:

All of the material contacts, conversations, ranch visits, etcetera [sic], had to do with the corporation’s farming activity and its operating loan not with any individual loan that the Plaintiffs may have had.

Further, the court stated that if a fiduciary relationship existed, it was with the Corporation and not with Stanley and Elizabeth as individuals.

Summary judgment is proper when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P. The standard that an appellate court applies in reviewing the grant or denial of a motion for summary judgment is the same as that used by the trial court. Musselman v. Mountain W. Farm Bureau (1992), 251 Mont. 262, 824 P.2d 271, 273. The party moving for summary judgment is entitled to judgment on the law applicable to the facts established by the pleadings, depositions, answers to interrogatories and admissions in the record. Musselman, 824 P.2d at 274.

Plaintiffs contend that the Bank owed fiduciary duties to them personally in addition to any fiduciary duty owed to the Corporation. Because Stanley and Elizabeth are not similarly situated, we will address their claims separately.

Stanley claims the Bank owed him a fiduciary duty because he transacted ranch business with the Bank individually as well as through the corporate entity. Stanley was a shareholder, guarantor and officer of the Corporation before, during and after the split of assets and liabilities. Montana law provides that a shareholder who guarantees corporate loans may recover individual damages from the lender only where a separate duty exists apart from that owed by the lender to the corporation. Walstad v. Norwest Bank of Great Falls (1989), 240 Mont. 322, 327, 783 P.2d 1325, 1328. In our most recent opinion addressing the rights of shareholders to sue on their own behalf, we stated:

Montana law is clear that the stockholders and guarantors of a corporation do not have the right to pursue an action on their own behalf when the cause of action accrues to the corporation. Bottrell v. American Bank (1989), 237 Mont. 1, 26-27, 773 P.2d 694, 708-10; Walstad, 783 P.2d at 1328; Moats Trucking Co., Inc. v. Gallatin Dairies, Inc. (1988), 231 Mont. 474, 477, 753 P.2d 883, 885. Here, [the corporation] borrowed operating funds from the Bank; the Swensons as individuals did not borrow operating funds but had borrowed from the Bank to purchase a truck. Nor did the Swensons as individuals request a loan related to the auger rig since it was refinanced in 1984. The corporate entity ... was requesting an advance for operating funds under its promissory note. ... The Bank properly exercised its contractual right and refused this requested advance. The District Court correctly concluded that the Swensons as individuals are precluded from asserting any cause of action arising from this refusal by the Bank to continue financing [the corporation].

Richland Nat’l Bank & Trust v. Swenson (1991), 249 Mont. 410, 424, 816 P.2d 1045, 1054.

Stanle/s argument that he can sue the Bank individually because he and Elizabeth now operate as a sole proprietorship and because the Bank has been dealing with him in both the corporate capacity and personally is the same argument made by the bank customers in Swenson. This argument did not stand up there and is similarly flawed here. Stanley was a shareholder and officer of Kondelik Ranch, Inc. before, during and after the split. He continued to hold the office of president of the Corporation until February 1992. Similarly, the fact that the Bank allowed Stanley to term out 47% of the corporate operating loan, which was not subject to FmHA guarantees, created no separate duty owed by the Bank to Stanley regarding the FmHAguaranteed loans.

Any causes of action relating to the split accrue to the Corporation, and cannot be prosecuted by Stanley as a shareholder and guarantor merely because he also transacted business with the Bank individually. Like the shareholders in Swenson, Stanley has failed to establish that the Bank owed him a separate duty here. We conclude that Stanley has no standing to bring an action for breach of fiduciary duty against the Bank here because the cause of action accrued to the Corporation, not the shareholders.

We hold the District Court correctly determined that the Bank owed no separate duty to Stanley Kondelik and properly granted summary judgment in favor of the Bank on Stanley’s claim for breach of fiduciary duty.

Elizabeth, however, has always had a different status than that of the other Kondeliks. Unlike Emil, Evelyn and Stanley, she has never been a shareholder, director or officer of the Corporation. Stanley, Emil and Evelyn have all acted in one or more such capacities. Moreover, Elizabeth has pledged personal property as security for corporate loans.

The Bank required Elizabeth’s signature as guarantor on the Corporation’s operating loans. Thus, Elizabeth remains obligated on Emil and Evelyn’s share of the Corporation debt as well as Stanley’s share. In 1989, Elizabeth signed a personal guaranty for the Corporation’s $250,000 operating loan. On May 23,1991, Elizabeth signed two separate notes for the refinancing of the operating loan — one reflecting Stanley’s 47% share of the debt ($156,142) and the other reflecting Emil and Evelyn’s 53% share of such debt ($180,000). At the time Elizabeth signed these notes, King was servicing the Corporation’s loans. In 1989, Elizabeth advised King that she believed corporate funds were being misused and misappropriated by Evelyn and asked the Bank to monitor the operating loan advances and expenditures.

The District Court relied on our prior decisions concerning shareholder/guarantors to determine that Elizabeth, like Stanley, had no standing to sue here. However, the principles established by Bottrell, Walstad, and Swenson do not apply to these facts where Elizabeth is a guarantor and is not and has never been an officer, shareholder, or director of the Corporation.

A bank may owe a fiduciary duty to a customer if special circumstances exist where the bank acts as an advisor or asserts influence in a customer’s business. Lachenmaier v. First Bank Sys., Inc. (1990), 246 Mont. 26, 33, 803 P.2d 614, 618-19. When a fiduciary relationship exists, the party in the stronger position owes an obligation by virtue of the trust relationship to act in the best interests of the beneficiary. Davis v. Church of Jesus Christ of Latter Day Saints (Mont. 1993), 852 P.2d 640, 646, 50 St.Rep. 535, 539.

The Bank maintains here that the existence of a fiduciary duty is a question of law properly determined through summary judgment proceedings, citing Simmons v. Jenkins (1988), 230 Mont. 429, 435, 750 P.2d 1067, 1071. That is an inapposite statement of the law as Simmons held that the existence of a duty of good faith is a question of law properly determinable during summary judgment proceedings. In this case, we are concerned with the existence of a fiduciary duty, not the existence of a duty of good faith.

The existence of a fiduciary duty depends upon satisfactory proof of a special relationship. Davis, 852 P.2d at 646. This relationship is known as a fiduciary relationship. In a prior Montana case which addressed the fiduciary relationship which may exist between a bank and its customer, we noted:

[M] odern banking practices involve a highly complicated structure of credit and other complexities which often thrust a bank into the role of advisor, thereby creating a relationship of trust and confidence which may result in a fiduciary duty upon the bank to disclose facts when dealing with the customer.

Deist v. Wachholz (1984), 208 Mont. 207, 216-17, 678 P.2d 188, 193 (quoting Tokarz v. Frontier Fed. Sav. & Loan Ass’n (1983), 33 Wash.App. 456, 656 P.2d 1089, 1092).

The existence of a fiduciary relationship is not a question of law and it is not appropriate for a district court to make this determination on summary judgment where genuine issues of material fact concerning this relationship are present. Davis, 852 P.2d at 646. The record in this case establishes that there are genuine issues of material fact with regard to a fiduciary relationship between the Bank and Elizabeth. In addition, the District Court failed to distinguish Elizabeth’s position as compared to Stanley’s position. As a result, we conclude that it was not appropriate here for the District Court to grant summary judgment in favor of the Bank when there are genuine issues of material fact which go to the question of whether a fiduciary relationship existed between the Bank and Elizabeth.

We hold the District Court erred in granting summary judgment in favor of the Bank on Elizabeth Kondelik’s claim for breach of fiduciary duty.

II.

Did the District Court err in determining that claims for misuse and misappropriation of corporate funds cannot be brought by plaintiffs individually?

The District Court determined that the claims for misuse and misappropriation of corporate funds were claims which accrued to the Corporation and as such could not be brought individually by Stanley and Elizabeth. As the court noted, every cause of action must be brought by the real party in interest. Rule 17(a), M.R.Civ.R, provides in pertinent part:

Every action shall be prosecuted in the name of the real party in interest. A personal representative, guardian, bailee, trustee of an express trust, a party with whom or in whose name a contract has been made for the benefit of another ... may sue in that person’s own name without joining the party for whose benefit the action is brought...

The effect of the first sentence of Rule 17(a) is that the action must be brought by the person who is entitled to enforce the right according to the governing substantive law and will not necessarily be brought in the name of the person who ultimately will benefit from the recovery. 6A Wright, Miller & Kane, Federal Practice and Procedure: Civil 2d § 1543 (1990).

In order to apply Rule 17(a) properly, it is necessary to identify the law that created the substantive right being asserted by the plaintiff. Id., at § 1544. In this case, the substantive law is the law of corporations. The law of corporations must give a person named in Rule 17(a) a right to sue — in this case, “a party with whom or in whose name a contract has been made for the benefit of another.”

Montana law provides that a corporation may sue or be sued in the corporate name. Section 35-1-115(1), MCA. It also provides for shareholder derivative actions in certain circumstances. See § 35-1-542, MCA. Neither the Montana Business Corporation Act, §§ 35-1-112 through 35-1-1312, MCA, nor the Montana Close Corporation Act, §§ 35-9-112 through 35-9-504, MCA, provides for an individual guarantor to sue on behalf of the corporation.

Stanley, as a shareholder, cannot sue on a corporate cause of action except in a shareholder derivative suit. Elizabeth was a guarantor of corporate debt but never an officer, director or shareholder of the Corporation. We have said Elizabeth may sue personally on her breach of fiduciary duty claim. The claim for misuse and misappropriation of corporate funds is a cause of action belonging to the Corporation. It does not follow that Elizabeth can sue personally based on a corporate cause of action for misuse and misappropriation of corporate funds merely because she signed personal guarantees. Elizabeth cannot prosecute the claims of the Corporation, she may only pursue her own causes of action. We conclude that Elizabeth and Stanley have no standing to sue individually for an action which belonged to the Corporation.

We hold the District Court correctly determined that claims for misuse and misappropriation of corporate funds cannot be brought by plaintiffs individually.

III.

Did the District Court err in dismissing plaintiffs’ claims of fraud and negligent misrepresentation because they were premature?

Stanley and Elizabeth alleged claims of fraud and negligent misrepresentation against the Bank, claiming they were damaged because the Bank failed to monitor for misuse and misappropriation of corporate funds which they reported to the Bank in 1989. The District Court dismissed this claim without prejudice because any damages were speculative and premature as the Bank had not initiated any foreclosure action.

Plaintiffs claim that certain damages are not speculative or premature. First, they claim the Bank incorrectly calculated the amortization of the principal and interest of the operating loan when it split the amounts and allocated 47% of the debt to Stanley and Elizabeth. This claim was not argued before the District Court and we will not address it for the first time on appeal.

Second, the plaintiffs claim that the difference between the amount they settled on with Emil and Evelyn ($30,000) and the actual amount of money misused or misappropriated by Emil and Evelyn is also calculable as damages. This claim relates to the misuse and misrepresentation claim which belongs to the Corporation and not to plaintiffs individually.

Third, Elizabeth claims she was damaged personally when the Bank allowed the misuse and misappropriation to continue after she had signed personal guarantees and had reported the misuse and misappropriation to King. This claim of damages relates to Elizabeth’s separate claim for breach of fiduciary duty.

Finally, plaintiffs claim that the misuse and misappropriation is being allowed to continue and as they remain obligated on 100% of the operating loans and Stanley remains obligated on 100% of the FmHA-guaranteed real estate and equipment loans, they are continuously being damaged by the Bank’s failure to monitor the accounts of the Corporation.

We agree with the District Court that any claim for fraud or negligent misrepresentation is premature. Unless the primary obligor — here the Corporation — fails to make payments on the corporate debt, plaintiffs damages are speculative and premature. In Montana Bank of Circle, N.A. v. Ralph Meyers & Son, Inc. (1989), 236 Mont. 236, 243, 769 P.2d 1208, 1213, we stated:

A guarantor differs from a surety in that a surety holds primary liability equal with that of the original borrower. However, a guarantor does not become liable until an intervening act occurs, such as a default of the original borrower. ...
In the instant case, Bank exhausted its remedies against Corporation and the collateral. Thus it was ripe to proceed against

Meyers as both a surety and a guarantor. (Emphasis supplied.) The plaintiffs have not been called upon to honor any guaranty of corporate debt. They will not be held liable on the Corporation’s loans unless some intervening act occurs, such as default or foreclosure of the Corporation’s debt. If the Bank institutes a foreclosure or collection action against Kondelik Ranch, Inc. in the future, plaintiffs may have a claim relating to fraud or misrepresentation at that time. We conclude that the claims of fraud and misrepresentation were premature because the Bank had not instituted a collection or foreclosure action.

We hold the District Court properly dismissed the plaintiffs’ claims of fraud and misrepresentation as being premature.

We affirm the judgment in favor of the Bank as to Stanley Kondelik in all respects and as to Elizabeth Kondelik with the exception of the claim for breach of fiduciary duty. We reverse the summary judgment in favor of the Bank insofar as the breach of fiduciary duty claim of Elizabeth is concerned and remand for further proceedings consistent with this opinion.

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


source: Caselaw Access Project

author: JUSTICE TRIEWEILER JUSTICE GRAY

license: Public Domain

text:
    I.S.C. DISTRIBUTORS, INC., a Montana corporation, Plaintiff and Respondent, v. MIKE TREVOR; DAVE MARSHALL; RON HEILMAN; BRUCE SWICK; RON ARMSTRONG; SHARON RANSTROM; DEBBIE OWEN; SHERRY HANKS; TERRY KRAMER; ROGER FUCHS; SCOTT FIGG; STEVEN BAILEY; JOHN DOES I THROUGH X and JANE DOES I THROUGH X, individually and in their representative capacity as employees of the State of Montana, Defendants and Appellants.
    No. 92-329.
    Submitted on Briefs January 28, 1993.
    Decided July 29, 1993.
    50 St.Rep. 880.
    259 Mont. 460.
    856 P.2d 977.

      For Appellants: Chris D. Tweeten, Hughes, Kellner, Sullivan & Alke, Helena.
    For Respondent: Michael E. Wheat, Cok & Wheat, Bozeman.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

Defendants appeal from an order of the District Court of the Eighteenth Judicial District, Gallatin County, which denied defendants’ motion to change venue to Lewis and Clark County. We affirm.

There are three issues on appeal:

1. Did the District Court commit reversible error when it adopted verbatim an order drafted by plaintiff which denied defendants’ motion to change venue?

2. Did the District Court err when it considered an affidavit submitted by plaintiff subsequent to the time when defendants filed their motion to change venue?

3. Did the District Court err when it determined that venue is proper in Gallatin County pursuant to § 25-2-125, MCA?

In September 1990, plaintiff I.S.C. Distributors, Inc., submitted a sealed proposal to the Montana Department of Administration (the Department) to sell computer equipment to the Department. In June 1991, the Purchasing Division of the Department awarded contracts to three vendors other than plaintiff.

On September 25,1991, plaintiff filed a complaint against ten state employees (defendants) who worked for the Department and were involved in the decision to deny plaintiff’s bid. Plaintiff sought damages and injunctive relief pursuant to 42 U.S.C. § 1983 (1871) (amended 1979) and state common law. Plaintiff alleged that the named defendants unlawfully changed the date for submission of proposals, illegally considered evaluation criteria which were not set forth in the request for proposals, and acted arbitrarily when they awarded the contract to vendors other than plaintiff. Plaintiff filed the complaint in Gallatin County. All of the individuals named in the complaint resided elsewhere.

On November 27, 1991, defendants moved to change venue to Lewis and Clark County. They asserted that Gallatin County was not a proper place for trial because plaintiff’s claim arose in Lewis and Clark County and none of the defendants resided in Gallatin County. On December 5, 1991, defendants filed an affidavit by Mike Trevor, the Administrator of the Department and a defendant in plaintiff’s action. Affiant Trevor testified that none of the actions in plaintiff’s complaint occurred in Gallatin County.

On February 4,1992, before the District Court ruled on defendants’ motion to change venue, plaintiff amended its complaint to add two defendants who resided in Gallatin County. On February 12, 1992, plaintiff filed an affidavit of its chief executive officer, Scott Johnson. Johnson testified that, contrary to Trevor’s assertion, events occurred in Gallatin County which contributed to defendants’ decision to deny plaintiff’s proposal. According to Johnson, plaintiff had provided Montana State University, which is located in Gallatin County, with computer equipment in conjunction with its last contract with the State; and Department staff went to MSU to test and evaluate some of the computer equipment that plaintiff had provided to the University in order to make its decision whether to award or deny plaintiff a contract.

On May 11,1992, the District Court held a hearing on defendants’ motion to change venue and the parties presented oral argument. At the close of the hearing, in the presence of both parties and their counsel, the court denied defendants’ motion and asked plaintiff to prepare a written memorandum and order for the court’s signature. Plaintiff did so, and the District Court signed the order on May 22, 1992. Defendants appeal.

I

Did the District Court commit reversible error when it adopted verbatim an order drafted by plaintiff which denied defendants’ motion to change venue?

Defendants assert that the District Court committed reversible error when it entered its decision to deny defendants’ venue motion by adopting verbatim a proposed opinion drafted by plaintiff. We disagree.

Rule 52(a), M.R.Civ.P., requires that when a court grants a motion under Rule 12 or 56, the court shall support its order with an explanation of its reasons. There is no comparable requirement for orders denying motions to change venue.

Because a district court is at liberty to deny a venue motion with or without comment, the court did not err when it (1) chose to provide an explanation for why defendants’ motion was denied, and (2) directed plaintiff to prepare an appropriate memorandum and order for the court to sign. Furthermore, the court’s order will be reviewed based on the facts alleged in the complaint as applied to our common law and statutory venue rules. The presence of the additional memo does not affect the nature of our review, and therefore, was not prejudicial to defendants. We hold that the District Court’s adoption of the verbatim memo was not reversible error.

II

Did the District Court err when it considered an affidavit submitted by plaintiff subsequent to the time when defendants filed their motion to change venue?

Defendants assert that plaintiff’s original complaint did not establish that any part of plaintiff’s action arose in Gallatin County. Defendants contend that when determining whether venue was proper in Gallatin County, the District Court improperly considered plaintiff’s amended complaint and Johnson’s affidavit. Defendants rely on Johnson v. Clark (1957), 131 Mont. 454, 311 P.2d 772, in support of their contention that Montana case law prohibits the consideration of matters other than the original complaint when determining whether venue is proper.

Plaintiff responds that Hopkins v. Scottie Homes, Inc. (1979), 180 Mont. 498, 501, 591 P.2d 230, 232, allows the district court to rely upon the facts of an affidavit filed subsequent to the original complaint when ruling on a motion to change venue.

In Johnson, this Court held that a change in place of trial must be determined by the conditions existing at the time the parties claiming it first appeared in the action, and the subsequent filing of an amended complaint by plaintiff shall have no effect on defendants’ pending motion to change venue. Johnson, 311 P.2d at 779. In Hopkins, this Court modified its holding in Johnson and determined that the court may properly consider facts set forth in affidavits which are filed subsequent to the original complaint when ruling on a motion to change venue. Hopkins, 591 P.2d at 232. The consideration of facts in an affidavit is not prejudicial to a party moving for a change of venue.

These rules are not contradictory; together they simply mandate that, in fairness to the party moving for change of venue, the lower court may not consider an amended complaint for purposes of determining whether to grant or deny a venue motion; however, the court may look to affidavits submitted subsequent to the original complaint. Accordingly, it was proper for the District Court in this case to consider Johnson’s affidavit when determining whether to grant or deny defendants’ motion.

Ill

Did the District Court err when it determined that venue is proper in Gallatin County pursuant to § 25-2-125, MCA?

The named defendants in plaintiff’s first complaint were all employees of the Montana Department of Administration, and therefore, they were all state officials. Accordingly, § 25-2-125, MCA, which pertains to actions against public officers, is the statute that governs this case. Section 25-2-125, MCA, provides:

The proper place of trial for an action against a public officer or person specially appointed to execute his duties for an act done by him in virtue of his office or against a person who, by his command or in his aid, does anything touching the duties of such officer is the county where the cause or some part thereof arose. [Emphasis added.]

Defendants recognize that § 25-2-125, MCA, is the controlling statute in this case; however, they assert that the court improperly interpreted this statute when it determined that a part of plaintiff’s claim arose in Gallatin County.

Defendants contend that their decision to deny plaintiff’s proposal occurred in Lewis and Clark County, and therefore, plaintiff’s suit against them arose in Lewis and Clark County. They assert that there was no evidence presented to the lower court that any part of their alleged “wrongful act” occurred in Gallatin County. Therefore, the court erred when it found that a part of plaintiff’s claim arose in Gallatin County for purposes of establishing venue.

In Ford v. Department of Fish, Wildlife and Parks (1984), 208 Mont. 132, 676 P.2d 207, the plaintiff sought a writ of mandamus challenging an agency decision to demote and transfer him. This Court held that although the decision to demote and transfer the plaintiff was made in Lewis and Clark County, Missoula County was a proper place for trial under § 25-2-105, MCA (now recodified at § 25-2-125, MCA), because the position of employment, to which plaintiff claimed he was entitled and from which he was to be demoted, was in Missoula. Therefore, at least a part of the cause of action arose in Missoula County. In Ford, 676 P.2d at 210, we stated:

It is not the mandamus aspect of the case, but the fact that the challenged state action concerns and will affect a person and a position in Missoula that controls here. It is not the mere making of the order, but the place where it is put in operation, that determines where the cause of action arose.

Similarly, in this case, it is not only the decision to award the contract, but the place where the effect of the decision is felt, which must also be considered.

Johnson’s affidavit, together with the original complaint, established that at least some part of plaintiff’s claim arose in Gallatin County. Johnson’s affidavit established that, although defendants’ decision to award the contract to sell computer equipment occurred in Lewis and Clark County, the testing and evaluation of equipment in conjunction with the contract awards was undertaken at Montana State University, which is located in Gallatin County. Furthermore, the original complaint established that plaintiff’s principal place of business is in Gallatin County. Both the affidavit and the original complaint state that plaintiff suffered damages to its business as a result of the State employees’ decision. Finally, Johnson’s affidavit established that if plaintiff had been awarded the State contract at issue, some of the goods that would have been purchased from plaintiff under the contract would have been delivered in Gallatin County.

We conclude that the alleged wrongful conduct by defendants in this case concerns, and will have an impact on, Gallatin County. Therefore, some part of plaintiff’s cause of action arose in Gallatin County.

We hold that Gallatin County is a proper venue pursuant to § 25-2-125, MCA, and our prior decision in Ford. Accordingly, the District Court did not err when it denied defendants’ motion to change venue to Lewis and Clark County.

JUSTICES HARRISON, HUNT, McDONOUGH and WEBER concur.

JUSTICE GRAY

dissenting:

I dissent. Section 25-2-125, MCA, provides that venue for an action against a public officer or his agent is “the county where the cause or some part thereof arose.” Aline of cases prior to Ford established that, under this standard, a cause arises in the county in which the defendants committed the wrongful acts which create the right to sue. See, e.g., Lunt v. Division of Workmen’s Comp. Dept. of Lab. & I. (1975), 167 Mont. 251, 537 P.2d 1080; Bergin v. Temple (1941), 111 Mont. 539, 547, 111 P.2d 286, 289-90.

In 1984, this Court decided Ford. In that case, there were two applicable venue statutes because there were multiple defendants. Concluding that it was necessary to harmonize the venue statutes, this Court extended the meaning of “where the cause or some part thereof arose” to include where the decision at issue was “put in operation.” Ford, 676 P.2d at 210. However, following the enactment of § 25-2-115, MCA, in 1985, it is no longer necessary to harmonize venue statutes if more than one applies. Now, if two venue statutes apply, the plaintiff can choose from any venue proper under either statute.

The majority’s opinion in this case stretches the language of § 25-2-125, MCA, beyond recognition. “The county where the cause or some part thereof arose” now includes the county where the “effect of the decision is felt.” This sweeping interpretation nullifies the legislature’s intent to place venue where the public officer or his agent performs the acts giving rise to the cause of action. It is particularly egregious here, where the defendants all worked in Helena and their conduct in reviewing the proposals and determining which proposals would be accepted occurred in Lewis and Clark County.

In the absence of the need to harmonize, I would return to the reasonable and workable interpretation of § 25-2-125, MCA, established in the line of cases preceding Ford. Therefore, I would reverse the District Court and direct it to grant the motion for change of venue.

CHIEF JUSTICE TURNAGE concurs in the dissent of JUSTICE GRAY.


author: JUSTICE TRIEWEILER

text:
    IN RE THE CUSTODY OF J.M.D., A Minor Child. KEVIN J. FITZGERALD, Petitioner and Respondent, v. EVA MARIE BROWN, Respondent and Appellant.
    No. 92-365.
    Submitted on Briefs February 4, 1993.
    Decided July 29, 1993.
    50 St.Rep. 884.
    259 Mont. 468.
    857 P.2d 708.

      For Respondent and Appellant: Joan Meyer Nye, Nye & Meyer, Billings.
    For Petitioner and Respondent: John Bobinski, Helena.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

Eva Marie Brown appeals from two orders of the District Court for the First Judicial District, Lewis and Clark County. In its first order, entered on May 19,1992, the court determined that it was in the best interest of the parties’ child to transfer custody to the father, Kevin Fitzgerald. In its second order, entered on July 13, 1992, the court denied Eva’s motion to alter or amend the May 19, 1992, order, and her motion for a new trial. We affirm.

There are five issues on appeal.

1. Did the District Court abuse its discretion when it awarded custody in accordance with the parties’ written stipulation?

2. Did the District Court err when it awarded sole custody to Kevin?

3. Did the District Court err by not requiring sufficient input from the child’s court-appointed attorney?

4. Did the District Court err when it held the hearing on Kevin’s motion to compel on April 2, 1992?

5. Did the District Court err when it denied Eva’s request for a new trial after the May 19, 1992, order?

Eva Brown and Kevin Fitzgerald lived together in Helena, Montana, for approximately four years. They gave birth to one son, Joey, on December 22,1989. Approximately four months after Joey’s birth, the parties separated. In September 1990, Eva and Joey moved to Billings. In March 1991, Kevin married Danette Fitzgerald. They reside in Helena.

In May 1990, Kevin filed a petition for custody and visitation and to determine child support. A trial was held before the District Court on November 1, 9, and 13, 1990, to determine the parties’ custody and visitation rights. On December 4,1990, the District Court made detailed findings of fact and conclusions of law. The court determined that both Kevin and. Eva were fit parents and awarded them joint custody of Joey. Each parent was awarded residential custody on an alternating six-month basis. The court ordered Eva to have residential custody of Joey for the initial six-month period from January 1,1991, through June 30, 1991.

Shortly before June 30, 1991, Eva filed a motion for a new trial or for an order modifying custody and visitation. Additionally, she filed a motion to stay the transfer of residential custody of Joey to Kevin. The District Court stayed the visitation schedule set forth in the December 4, 1990, decision, but ordered that Kevin be allowed visitation with Joey for a five-day period every other week pending further order of the court. At Eva’s request, the court appointed an attorney, Randi Hood, to represent Joey’s interests.

On November 15, 1991, a scheduling conference was held, and the District Court set a nonjury trial for March 5, 1992, to decide Eva’s petition to stay the visitation schedule. However, on February 21,1992, approximately two weeks prior to the scheduled trial, the parties entered into a written agreement regarding custody and visitation of Joey, which they filed with the court on February 24,1992.

In the written stipulation, the parties agreed to have Donna Hale, a licensed clinical social worker, prepare a custody evaluation to help determine what custody and visitation arrangements were in the best interest of the parties’ child, Joey. The parties agreed that they would be bound by Hale’s evaluation and recommendation, that the stipulation would settle all issues regarding child custody and visitation, and that the trial set for March 5, 1992, should be vacated.

The stipulation was drafted by Eva’s attorney and signed by both parties. The attorney representing Joey also signed the stipulation. Pursuant to the parties’ stipulation, the court vacated the trial.

Hale conducted a comprehensive custody evaluation of Eva, Kevin, and Kevin’s wife, Danette. This assessment involved clinical interviews and clinical observations of Eva, Kevin, Danette, Joey, and Eva’s and Kevin’s step-children. Additionally, Hale administered tests to the adults, including The Custody Quotient and the Minnesota Multiphasic Personality Inventory. On February 24, 1992, Hale recommended that custody be transferred to Kevin and that Eva have liberal visitation. Hale recommended against joint custody, based on her opinion that Eva would not cooperate with joint custody responsibilities.

On March 23,1992, Kevin filed a motion to compel and for custody, in addition to a notice of hearing on the motion. In response to Kevin’s motion to compel, Eva filed a motion for additional evaluation and trial date on April 1,1992. She argued that the court should not accept Hale’s recommendation and enforce the parties’ stipulation without a trial-type evidentiary hearing.

A hearing on Kevin’s motion to compel was held on April 2, 1992. The entire proceeding was transcribed by a court reporter. The court first addressed Eva’s request for an evidentiary hearing, and after discussing the issue with the parties, the court ordered Eva and Kevin to brief the legal issue of whether or not a trial-type evidentiary hearing was required to determine whether the stipulation was in the best interest of the child. The court stated that it would decide Eva’s motion at a future date.

The court next addressed Kevin’s motion. The court reviewed Hale’s written evaluation and questioned Hale on the witness stand about her professional qualifications, her involvement with the case, her assessment of the parties, and her recommendation. The court also questioned Hood, the court-appointed attorney. Hood stated that she was aware that Hale had conducted an evaluation to make a custody recommendation and that it was acceptable to her. At the close of the hearing, the District Court entered a custody award in accordance with Hale’s recommendation and transferred custody to Kevin.

After consideration of the parties’ briefs and arguments on Eva’s motion, the District Court issued an order on May 19,1992, denying Eva’s request for an evidentiary hearing. In that same order, the court permanently adopted Hale’s recommendation and ordered, in writing, that custody of Joey be transferred to Kevin. Eva subsequently filed a motion to alter or amend and a motion for a new trial. On July 13, 1992, the District Court denied both of these motions. Eva appeals.

I

Did the District Court abuse its discretion when it awarded custody in accordance with the parties’ written stipulation?

On appeal, Eva contends that it was error for the District Court to award custody pursuant to the parties’ stipulation without conducting an evidentiary hearing to determine whether the written agreement was in the best interest of the child. Eva asserts that when the court adopted the custody recommendations of the evaluator, Hale, and denied her request for a more comprehensive evidentiary hearing, the court did not adequately consider the “best interest” of the child.

Section 40-4-201(2), MCA, provides that in dissolution proceedings, at least, stipulated terms regarding the custody, support, and visitation of a child are not binding on the court. In re Marriage of Mitchell (1987), 229 Mont. 242, 248, 746 P.2d 598, 603. ‘While terms of a contract may be introduced as evidence in some instances, the custody and support of children are never left to contract between the parties.” Mitchell, 746 P.2d at 603 (quoting In re Marriage of Carlson (1984), 214 Mont. 209, 217, 693 P.2d 496, 500,). This is because in all matters relating to children, the best interests of the children control. Mitchell, 746 P.2d at 603. To provide for the best interests of the children, courts must “carefully examine” the terms of a written agreement concerning custody. Commissioners’Note to § 40-4-201(2), Montana Code Annotated, Vol. 7, p. 90. Although in this case we are not concerned with a dissolution, the same considerations apply.

The court must consider the factors set forth in § 40-4-212, MCA, to ensure that the best interest of the child is provided for. The court is free to consider the parties’ stipulation, however, ultimately the court must make an independent judgment regarding custody.

The standard of review in a child custody determination is well settled in Montana. The district court’s findings will be sustained unless they are clearly erroneous. In re Marriage of Susen (1990), 242 Mont. 10, 13-14, 788 P.2d 332, 334. The trial court is in a better position than this Court to resolve child custody issues. The district court’s decision is presumed correct and will be upheld unless a clear abuse of discretion is shown. In re Marriage of Rolfe (1985), 216 Mont. 39, 44, 699 P.2d 79, 82.

Based on our review of the record, we conclude that the District Court considered the best interest of the child when it made its final determination regarding the custody of Joey. The court “carefully examined” the parties’ stipulation. The court determined that the parties knowingly and intelligently entered into an uncomplicated contract in which they agreed to be bound by Hale’s recommendations. Furthermore, the court found that each party was fully represented by counsel when they signed the stipulation.

Next, the court considered Hale’s evaluation and recommendation. In its order, the court determined that Hale is

thoroughly familiar with the family, and has worked with them since the commencement of this action. She is in the best position, based on her profession, expertise, and familiarity with the family, to recommend an appropriate custodial arrangement that would be in the child’s best interest.

Finally, the court made its own independent judgment. The District Court in this case had conducted a lengthy custody trial in November 1990 in which the court considered the factors set forth in § 40-4-212, MCA, and made appropriate findings. It also questioned Hale regarding her findings during the April 2, 1992, hearing and satisfied itself, as set forth in its May 19, 1992, order, that Hale’s recommendation provided for Joey’s best interest according to those factors to be considered under § 40-4-212, MCA.

Eva asserts that it was error for the District Court to enter an order determining custody based on the stipulation alone, without an evidentiary hearing, without giving full consideration to the statutory criteria set forth in § 40-4-212, MCA, and without explicitly stating the determinative facts upon which the court’s findings were based. Eva relies on our decision in In re Marriage of Converse (1992), 252 Mont. 67, 826 P.2d 937, to support her contention that she was entitled to an evidentiary hearing.

However, this case is distinguishable from Converse. In Converse, there was no trial and the court did not make findings which indicated the basis of the custody decision in relation to the statutory factors set forth in § 40-4-212, MCA. The parties agreed to a stipulation immediately prior to trial; however, when the agreement was finally reduced to writing, there was disagreement regarding its terms. The district judge adopted the stipulation anyway. On appeal, this Court reversed and remanded the case and ordered the lower court to conduct an evidentiary hearing, to consider the statutory factors required by § 40-4-212, MCA, and to make explicit findings which explained the basis of the court’s custody decision.

Unlike the situation in Converse, where no custody trial was ever held and no explicit findings ever made by the court prior to its acceptance of the stipulation, the court in this case conducted a custody trial in November 1990. Following that trial, the court issued detailed findings of fact and conclusions of law which indicated that the lower court had considered the factors set out in § 40-4-212, MCA. Unlike the court in Converse, the court in this case was in a position, based on the prior trial, to put Hale’s custody evaluation in context and to make an independent judgment that the transfer of custody to Kevin was in the best interest of the child. Furthermore, there was no dispute regarding the parties’ stipulation in this case. And finally, Hale was carefully questioned so that the District Court could independently determine that her recommendation satisfied the statutory criteria.

We hold that the District Court did not abuse its discretion when it entered a custody determination that was in accord with the stipulation and Hale’s recommendation.

II

Did the District Court err when it awarded sole custody to Kevin?

Eva argues that the District Court did not make any finding pursuant to § 40-4-224(1), MCA, that joint custody was not in the best interest of Joey, and therefore, the court erred when it awarded sole custody to Kevin. We disagree with Eva that the court did not make the requisite finding.

First, the court considered the evaluation and recommendations of the licensed clinical social worker, Hale. Hale determined that she could not recommend joint custody because: (1) the test she administered rated Eva’s parenting skills as “defective” in numerous areas; (2) Eva made statements during the evaluation that “she would not ever allow Joey to reside with Kevin;” and (3) it was Hale’s opinion that Eva would not cooperate in joint custody responsibilities.

Then, after considering Hale’s recommendation, the court made its own determination that it was in Joey’s best interest to place him in his father’s sole custody, giving Eva liberal visitation. We conclude that in its order entered on May 19, 1992, the District Court made the requisite finding, pursuant to 40-4-224(1), MCA, that joint custody was not in the best interest of Joey.

Moreover, § 40-4-224(3), MCA, provides that “[a]ny order for joint custody may be modified pursuant to § 40-4-219 to terminate the joint custody.” Section 40-4-219(1), MCA, authorizes the district court to 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 farther finds that:
(a) the custodian agrees to modification ....

Subsequent to the original custody decree, the parties engaged in a prolonged dispute regarding custody and were unable to settle their differences. They finally stipulated in a signed agreement that they would be bound by the recommendations of Hale. In doing so, each party consented to modify the original decree. Accordingly, the court did not err when it modified the prior joint custody decree to award sole custody to Kevin. The court acted in accordance with § 40-4-219(l)(a), MCA.

Ill

Did the District Court err by not requiring sufficient input from the child’s court-appointed attorney?

Eva asserts that pursuant to § 40-6-110, MCA, the court was required to appoint a guardian ad litem to represent Joey’s interests. Moreover, Eva contends that § 41-3-303(2), MCA, requires the guardian to conduct an investigation, to produce a report, and to provide a custody recommendation. Eva argues that Randi Hood, the attorney representing Joey in this case, did not conduct an investigation or produce the information required by § 41-3-303, MCA. She asserts that the court erred when it awarded custody without such information from the guardian ad litem.

Section 40-6-110, MCA, applies when paternity is at issue. This case is not a paternity action; it is a custody dispute. Neither does § 41-3-303(2), MCA, apply to this case. It applies to situations where a child has been alleged to be abused or neglected, and requires that a guardian be appointed to represent such a child. Section 40-4-205, MCA, governs this case. It is not a mandatory statute. It provides that the court may appoint an attorney to represent the interests of a minor child with respect to his support, custody, and visitation.

The court appointed Randi Hood as the attorney to represent Joey in this custody dispute. The parties and the court throughout the custody proceedings in this case have referred to Hood as the guardian ad litem; however, as we pointed out in Rolfe, 699 P.2d at 86, in Montana, the attorney for the child in a custody dispute is not a guardian ad litem. As the child’s attorney, Hood had a duty to represent Joey’s best interest. Rolfe, 699 P.2d at 86.

Hood was present at the April 2, 1992, hearing. After the custody evaluator, Hale, testified, the court asked Hood if she had anything to offer concerning Hale’s recommendation that custody be transferred to Kevin. Hood explained to the court that she was aware that Hale was conducting a custody assessment and recommendation, and that because of her previous experience with the expert, Hale, that was “fine” with her. Hood acknowledged to the court that she signed the parties’ stipulation.

We conclude from the record that Hood fulfilled her legal duty to represent Joey’s best interest. There was no statutory requirement that Hood, as Joey’s attorney, conduct an investigation, produce a report, and provide a custody recommendation. Accordingly, we find that the court did not abuse its discretion when it made its award of custody without such specific information from Hood.

IV

Did the District Court err when it held the hearing on Kevin’s motion to compel on April 2, 1992?

Kevin served his motion to compel on March 20, 1992, and pursuant to Rule 6(d), M.R.Civ.R, he filed an affidavit in support of his motion on the same date. Additionally, Kevin served a notice of hearing on March 20,1992. All three of Kevin’s documents were filed with the court on March 23, 1992.

Eva contends that she received Kevin’s motion to compel on March 23, 1992, and therefore, according to Uniform District Court Rule 2(a), she had ten days to file a responsive brief. She contends that she had until April 6, 1992, to file her brief and that when Kevin set his motion for hearing on April 2, 1992, he set the hearing before Eva’s time to respond expired. Eva asserts that she was provided with insufficient notice of the hearing on Kevin’s motion, and therefore, it was error for the court to hold the hearing on April 2, 1992.

Eva concedes that Kevin satisfied the time requirements of Rule 6(d), M.R.Civ.R, but asserts that Rule 6(d) conflicts with Uniform District Court Rule 2(a), which allows the responding party ten days to submit a responsive brief.

According to Uniform District Court Rule 2(e), in the event of a conflict regarding the filing of motions and briefs, the Montana Rules of Civil Procedure shall control. Therefore, Rule 6(d) controls. Rule 6(d), M.R.Civ.R, provides that “[a] written motion... and notice of the hearing thereof shall be served not later than 5 days before the time specified for the hearing ....” We conclude that when Kevin filed his motion and supporting affidavit and notice on March 23, 1992, he complied with Rule 6(d), M.R.CivR. He provided Eva with at least five days notice of the hearing. Furthermore, both parties were given additional time for briefing following the hearing and no prejudice to Eva has been demonstrated from the shortness of notice.

V

Did the District Court err when it denied Eva’s request for a new trial after the May 19, 1992, order?

Eva claims that the District Court should have allowed a new trial because Eva was “surprised” by Hale’s recommendation. She asserts that Hale told her before the recommendation was written that she intended to recommend that Eva retain custody of Joey, and based on Hale’s alleged comments, Eva claims that she signed the stipulation. Eva reasserts that Converse is applicable and that the District Court erred when it would not allow Eva the opportunity to present expert testimony and evidence to contradict Hale’s evaluation and recommendation.

We reiterate that Converse is not applicable to this case. We conclude that the District Court did not abuse its discretion when it determined that it was in Joey’s best interest to transfer custody to Kevin. The record reveals that the court listened to the parties’ arguments, considered the parties’ briefs, examined the stipulation, and gave serious consideration to the evaluation and recommendation of Hale. The record reveals that the court exercised its independent judgement in its final custody determination, taking into consideration numerous factors, including evidence previously presented to the court over the course of three days in November 1990. Accordingly, we conclude that the District Court did not err when it denied Eva’s request for a new trial after its May 19, 1992, order.

The judgment of the District Court is affirmed.

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


text:
    FRANK TALLEY, Plaintiff and Appellant, v. FLATHEAD VALLEY COMMUNITY COLLEGE, a Community College organized by the voters of Flathead County, Montana, on April 1, 1967, according to the Community College Law of the 1965 Montana Legislative Assembly; HOWARD L. FRYETT, Individually and as President of Flathead Valley Community College; DENNIS P. ADAMS, Individually and as Dean of Educational Services of Flathead Community College; LOWELL JAEGER, Individually and as the Chairman of the Division of Humanities of Flathead Valley Community College; and DOES 1 through 5, inclusive, Defendants and Respondents.
    No. 92-505.
    Submitted on Briefs May 13, 1993.
    Decided July 29, 1993.
    50 St.Rep. 889.
    259 Mont. 479.
    857 P.2d 701.

      For Plaintiff and Appellant: E. Eugene Atherton, Kalispell.
    For Defendants and Respondents: Jonathan B. Smith, Deputy Flathead County Attorney, Kalispell.
    For Amicus Montana Federation of Teachers: Michael Dahlem, Helena.
   JUSTICE WEBER

delivered the Opinion of the Court.

This is an appeal from a grant of summary judgment to Flathead Valley Community College by the Eleventh Judicial District Court, Flathead County. We affirm.

We consider the following issue on appeal:

Did the District Court err in granting Flathead Valley Community College’s motion for summary judgment?

This action involves a series of term contracts signed between part-time instructor, Frank Talley (Talley) and Flathead Valley Community College (FVCC). The series of term contracts began in September of 1982 and continued throughout the winter term of 1989, constituting 24 terms at the college.

During the winter of 1989, FVCC canceled Talley’s Religious Studies class and reinstated it after objections were raised by Talley. Subsequently, Talley’s classes for spring term were listed but again canceled. Talley’s classes were cut again during the summer and fall terms. Talley has not been rehired by the college.

Talley filed a complaint and demand for jury trial on October 10, 1989. Talley claimed that he has not been rehired because he has spoken out concerning policies at the college and in retaliation for union activity. FVCC claims that he was not rehired because of inadequate enrollment. On November 3, 1989, Talley filed an application for Alternative Writ of Mandate. The District Court issued an alternative writ on November 15,1989, requiring the college to either reinstate Talley to his teaching position or to show cause why it should not do so.

FVCC filed a motion to quash the writ and to dismiss the application on November 20,1989. Ahearing was held on December 21,1989, and subsequently the court quashed the alternative writ and dismissed the application for writ of mandate. Talley again filed an application for writ of mandate which was also denied by the court on August 9, 1991. At this time the court also denied FVCC’s motion to dismiss.

The original complaint in this action contained nine counts. On February 19, 1992, Talley filed an amended complaint alleging a tenth count based upon Montana’s educational tenure statute, § 20-4-203, MCA. Talley claimed that the tenure statute applies to part-time instructors of community colleges.

FVCC filed a motion for summary judgment on April 3,1992. On July 30,1992, Talley filed a cross-motion for summary judgment concerning Counts Ten, Three, Four, and Six of his amended complaint. The court issued its Memorandum and Order September 21, 1992, granting FVCC’s motion for summary judgment as to all counts except for claims of free speech in Count Four and the attendant issues of a § 1983 claim and attorney's fees from Count Six and Count Nine.

Upon motion of Talley, the District Court in its September 21 Order also certified an interlocutory appeal pursuant to Rule 54(b), M.R.Civ.P.

Did the District Court err in granting Flathead Valley Community College’s motion for summary judgment?

a. Statutory Tenure.

Talley argues that according to § 20-4-203, MCA, he has acquired tenure. According to Talley, changes in the law governing community colleges do not preclude the tenure statute from applying to instructors at FVCC. Talley further argues that FVCC’s definition of “teachers” is incorrect.

FVCC argues that the tenure statute is applicable to teachers in elementary and high school districts, but not to part-time instructors at a community college. FVCC contends that Montana has already defined “school teacher” as excluding community college instructors. Further, FVCC argues that the use of “teacher” in the tenure statute also requires that a person be certified to teach by the Department of Public Instruction and that such is not the case for instructors at FVCC.

The District Court determined that no genuine issues of material fact were present and that FVCC was entitled to summary judgment as a matter of law. The court determined that the tenure statute did not include community college faculty. The court granted summary judgment to FVCC on the tenure question which was Count Ten of Talley’s complaint.

Our standard of review for a grant of summary judgment is the same as that initially applied by the trial court under Rule 56, M.R.Civ.P. Wangen v. Kecske (1993), [256 Mont. 165], 845 P.2d 721, 726, 50 St.Rep. 6, 9. Summary judgment is appropriate if no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P.

The moving party has the initial burden to prove that there are no genuine issues of any fact deemed material. Wangen, 845 P.2d at 726. Once movant has met this burden, the non-moving party must present evidence that a material fact does exist. Wangen, 845 P.2d at 726. Here, Talley also moved for summary judgment on this same issue.

The District Court determined that no disputed facts existed and that FVCC, which had moved for summary judgment, was entitled to judgment as a matter of law. Talley argued to the District Court that he, not FVCC, was entitled to summary judgment as a matter of law. Thus, the pivotal question is a matter of legal interpretation.

This is a case of first impression in Montana as this Court has not previously interpreted § 20-4-203, MCA. That section provides:

20-4-203. Teacher tenure. (1) Except as provided in 20-4-208, whenever a teacher has been elected by the offer and acceptance of a contract for the fourth consecutive year of employment by a district in a position requiring teacher certification except as a district superintendent or specialist, the teacher is considered to be reelected from year to year thereafter as a tenure teacher at the same salary and in the same or a comparable position of employment as that provided by the last executed contract with the teacher unless the trustees resolve by majority vote of their membership to terminate the services of the teacher in accordance with the provisions of 20-4-204.
(2) The tenure of a teacher with a district may not be impaired upon termination of services of the teacher if the following conditions exist:
(a) the tenure teacher is terminated because the financial condition of the district requires a reduction in the number of teachers employed; and
(b) continued employment rights are provided for in a collectively bargained contract of the district. (Emphasis added.)

The legislature has defined “teacher” in Chapter 20 as:

(18) “Teacher” means any person, except a district superintendent, who holds a valid Montana teacher certificate that has been issued by the superintendent of public instruction under the provisions of this title and the policies adopted by the board of public education and who is employed by the district as a member of its instructional, supervisory, or administrative staff. This definition of a teacher shall also include any person for whom an emergency authorization of employment of such person has been issued under the provisions of 20-4-111. (Emphasis added.)

Section 20-1-101, MCA. We consider whether Talley as an instructor at a community college is a “teacher” to whom the tenure statute applies.

Talley contends that § 20-4-203, MCA, must include community college instructors because it always has and the legislature has not repealed it since it was originally codified as § 75-6103, RCM, in 1971. We decline to read “community colleges” into Chapter four of Title 20. Talley’s assertion that we have previously defined “school teacher” as including those who teach in the State’s system of higher education, citing Teamsters v. Cascade County School District No. 1 (1973), 162 Mont. 277, 511 P.2d 339, is incorrect. The Teamsters case defined who was included in the term “employees of the State.” The action was one by the non-teaching employees of the State to obtain vacation time pursuant to § 59-1001, RCM (1947). Teamsters is not authority for the definition of teacher as it applies to community colleges.

The current law includes § 20-4-203, MCA, and uses the word “teacher.” The current definition section of Chapter 20 which defines teacher, states that a teacher is a person required to have a “teacher certificate that has been issued by the superintendent of public instruction.” Section 20-1-101(18), MCA.

While it is true the community colleges of this State were once under the authority of OPI and were referred to as a School District, community colleges have been referred to as Community College Districts since 1979. In these Community College Districts, teaching faculty are not required to have teaching certificates issued by the OPI, although other requirements exist for employment as an instructor.

The 1979 Legislature attempted to clarify the statutes governing community colleges by combining the statutory guidelines concerning the community colleges into one chapter of Title 20 — Chapter 15:

Precedence of community college chapter. Unless specifically identified in any other sections of the school laws prescribed in this title, community college districts are governed by the provisions of this chapter. Should there be a conflict between other requirements of this title and the provisions of this chapter regulating community college districts, the provisions of this chapter shall govern. (Emphasis added.)

Section 20-15-402, MCA.

This language clearly indicates that unless a statute in Title 20, other than in Chapter 15, specifically notes that it applies to community colleges, it does not apply to community colleges. The tenure statute is in Chapter 4 of Title 20. FVCC argues that the tenure statute does not specifically mention community colleges; therefore, it does not apply to them. We agree. Our job as a reviewing court is to interpret the laws before us — not to add to those laws. Section 1-2-101, MCA.

The clear meaning of § 20-4-203, MCA, is that it applies to all teachers who have been certified to teach by the Superintendent of Public Education and who teach in school districts under the authority of the OPI. Instructors at a community college are not required to have certificates from the Superintendent and do not teach in school districts ■under the authority of the OPI. Community college instructors are not teachers as that term is defined in Chapter 4 of Title 20.

Because community colleges are not now governed by OPI as they once were, the Teamster case is no longer precedent for circumstances which involve community college instructors. To that extent, Teamsters is overruled. We have had occasion to consider the question of the relationship between community colleges and the word “teacher” found in § 20-1-101(20), MCA (now § 20-1-101(18), MCA).

In Rippey v. Flathead Valley Com. College (1984), 210 Mont. 396, 682 P.2d 1363, we held that the ordinary meaning of the word “teacher” does not encompass higher education faculty, “including a community college faculty member.” Rippey, 210 Mont. at 400, 682 P.2d at 1365. While the Rippey case dealt with sick leave compensation for faculty members at FVCC, the holding specifically interpreted the word “teacher” as it is used in the current Title 20 definition.

Both Rippey and the plain wording of § 20-4-101(18), MCA, preclude any instructor at a community college in Montana from relying on the tenure provisions in § 20-4-203, MCA. Trustees of the community colleges have been given power by the Legislature to establish the conditions of employment of their staff and instructors pursuant to § 20-15-225(l)(h), MCA. If FVCC chooses to have tenured faculty, it may establish the conditions under which that tenure is applied. Chapter 15 also contains the limitations of power with which the Legislature embued trustees:

Trustees to adhere to certain other laws. Unless the context clearly indicates otherwise, the trustees of a community college district shall adhere to: ....

Section 20-15-404, MCA.

What follows is a long fist of other sections in Title 20 with which trustees of a community college must also comply. Section 20-4-203, MCA, is not one of them.

We conclude that § 20-4-203, MCA, does not control tenure for instructors at any community college in Montana. Community colleges are unique centers for learning; they are neither high schools, nor are they part of the University System. Rippey, 210 Mont. at 397-98, 682 P.2d at 1364. Similarly, instructors teaching at these centers are also unique. Montana law specifically designates that community college districts are under the control of the Board of Regents and that community college trustees have the power to set conditions of employment for their faculties.

We hold that the District Court did not err in granting summary judgment as to Count Ten of Talley’s amended complaint.

b. Employment Arrangements, Past Practices and Property Interests.

Talley argues here that he is entitled to a “reasonable expectation of the opportunity for continuing employment.” Such an expectation, argues Talley, is differentiated from his tenure argument. FVCC argues that Talley can have no such expectation because of the clear wording of his term-by-term contracts.

FVCC contended, and Talley did not deny, that every term contract signed by Talley contained the following phrase:

It is understood and agreed that acceptance of this contract confers no right on the part-time faculty member to tenure, credit toward tenure, or any other permanent faculty status. (Emphasis added.)

The wording of this phrase clearly indicates that any expectation of permanent status cannot be rooted in the term-by-term contracts which Talley has signed.

First, Talley argues that in his 1982 contract the aforementioned paragraph contained another sentence, part of which reads: “but may be renewed upon the same terms by mutual agreement, made in writing between the parties.” (Emphasis added.) Talley argues that because this phrase was in his earlier contracts, that it must be read into all subsequent contracts which did not contain the wording.

Courts may not disregard the express language of contracts. New Hampshire Ins. Group v. Strecker (1990), 244 Mont. 478, 798 P.2d 130. The express wording of the contract signed by Talley indicates that the term contract cannot be the foundation for any kind of expectation of permanent employment. While he has used the phrase “opportunity for continuing employment” such a phrase is not legal and is an exercise in semantics. The essence of Talley’s argument is that he was entitled to continuing employment at FVCC.

We considered a similar argument in Farris v. Hutchinson (1992), 254 Mont. 334, 838 P.2d 374. Farris was employed under a series of term contracts prepared by the Montana University System. The last contract was effective between July 1, 1990, and June 30, 1991. Pursuant to a notice provision in her last contract, Farris received notice in February of 1991 that her contract would not be renewed. No reason for non-renewal was given.

Farris argued that she could show objective manifestations of job security beyond the term contract and thus, a genuine issue of material fact existed and summary judgment should not be granted. Farris, 254 Mont. at 337, 838 P.2d at 376. That is exactly the argument that Talley makes here. He argues that he was given oral manifestations of continued employment despite the wording of his contract.

In Farris we pointed out that an agreement made in writing cannot be altered except by another writing or by an executed oral agreement. In response to the same argument as that made here by Talley, we further stated in Farris that no obligation can be implied which would result in the obliteration of a right expressly given under a written contract. Farris, 254 Mont. at 339, 838 P.2d at 377. Talley’s contract is clear in regard to the very nature of his employment. No obligation can be Inferred which would indicate an alteration of that agreement.

Talley further argues that he had a property right in his position as a part-time instructor at the college. Such a property interest, contends Talley, requires that he be given notice and a hearing before termination. FVCC argues that Talley did not have a property interest in his employment.

We have recognized that a property interest in one’s position must be created by existing rules and regulations, state laws, or understandings between employee and employer. Medicine Horse v. Big Horn Co. School District (1991), 251 Mont. 65, 70, 823 P.2d 230, 233. In Medicine Horse, an employee argued he had a property interest in his employment despite the lack of any such indication in his employment contract. We refused to read a property right into Medicine Horse’s contract.

Unlike Medicine Horse’s contract, Talley’s contract specifically precludes any property right. In the face of such plain wording, Talley’s subjective belief that he had a property interest in his job simply does not create such an interest. A subjective expectancy can create no constitutionally protected interest. Medicine Horse, 251 Mont. at 71, 823 P.2d at 233; citing Perry v. Sindermann (1972), 408 U.S. 593, 92 S.Ct. 2694, 33 L.Ed.2d 570.

It is the Sindermann case which Talley cites for the argument that he has a property right in his position at FVCC. He does not explain that statement, nor do we find anything in Sindermann which confirms his analysis of the case. Sindermann merely determines that a property right in employment may be created by past practices or “mutually explicit understandings” of employer and employee. Sindermann, 408 U.S. at 601, 92 S.Ct. at 2699, 33 L.Ed.2d at 580.

The manifestations that Talley indicates existed are not “objective” but are totally subjective. The clear wording in his contract precludes any objective expectation of continuing employment.

We conclude that the contract between FVCC and Talley is clear and unambiguous on its face and creates no expectations of continuing employment with the college. FVCC met its burden by presenting the clear, unambiguous language of the contracts signed by Talley. Talley has not successfully rebutted this evidence nor shown that he is entitled to judgment as a matter of law. We hold the District Court did not err in granting summary judgment to FVCC on Count One of Talley’s Amended Complaint.

c. The Implied Covenant of Good Faith and Fair Dealing.

Talley argues that the various defendants here acted in violation of the covenant of good faith and fair dealing. FVCC argues that the contract between it and Talley was not breached and, therefore, the college did not violate the covenant.

Talley did not file a cross-motion for summary judgment on this issue. Therefore, FVCC had the burden to prove that no material issue existed and it was entitled to judgment as a matter of law. It met that burden. Talley did not successfully rebut it.

Talley argued that under Montana law, the covenant of good faith and fair dealing is implied into every contract. Mann Farms, Inc. v. Traders State Bank of Poplar, Montana (1990), 245 Mont. 234, 801 P.2d 73. This is true. Thus, Talley argues that the college breached the covenant by not hiring him back.

Talley has overlooked a significant factor: the nature and extent of the obligation of good faith and fair dealing is measured by justifiable expectations of the parties. Cook v. Principal Mut. Life Ins. Co. (D.Mont. 1990), 784 F.Supp. 1513. The existence of the “no-tenure” phrase from Talley’s contracts is an undisputed material fact. Despite such agreement, Talley argues he had a reasonable expectation of continuing employment. Given the plain wording of his contracts, such an expectation is not reasonable, nor is it justifiable.

Talley presents no argument which indicates a justifiable expectation in continued employment. We hold that the District Court did not err in granting summary judgment to FVCC on Count Two of Talley’s Amended Complaint.

d. Tortious Interference with a Contract Right and Constitutional Claims.

These arguments comprise Counts Three and Four of Talley’s Amended Complaint. Talley filed a cross-motion for summary judgment on these two Counts. Talley argues that FVCC violated his constitutional rights under the United States and Montana Constitutions:

No person shall be deprived of life, liberty or property without due process of law.

Art. II, Sec. 17, Mont.Const. Talley also argues equal protection, denial of due process, two issues on free speech and one for slander, privileges and immunities under the First, Fifth and Fourteenth Amendments and a 42 U.S.C. § 1983 claim. FVCC argues that there was no tortious interference with Talley’s expectancy in continuation of his employment because of the clear wording in his contract. FVCC also contends that § 1983 claims are not substantive claims but are based upon a deprivation of a constitutional right and Talley’s rights have not been violated under the Montana or the United States Constitution.

The District Court granted FVCC’s motion for summary judgment as to all issues except the free speech claims. Because most of these claims are based upon Talley’s property interest argument, we direct the reader to previous portions of this opinion and restate our prior determination: Under the facts of this case, Talley has no property interest in his position because his contract clearly prohibits it. Therefore, due process under the Montana or United States Constitution is not at issue. Further, all contracts with FVCC were successfully completed; thus, tortious interference with a contract is not an appropriate claim. Nor does the record contain evidence that others similarly situated were treated any differently than Talley in his position as part-time instructor, precluding an equal protection argument. The Privileges and Immunity clause of Article 4 prevents discrimination by states against non-residents. The Privileges and Immunity clause of the Fourteenth Amendment protects attributes of United States citizenship and is rarely applicable. There is no privileges and immunities clause in the Fifth Amendment. Therefore, any privileges and immunities argument is also inappropriate.

However, the District Court did determine that Talley had a right to free speech which was protected by due process. The court did not determine whether this right had been violated. The claim evolved from a letter sent to Talley from FVCC during the course of legal proceedings. FVCC there informed Talley that he would be considered for rehire in future terms only if he disavowed that he had expectations of continued employment.

The District Court denied both FVCC’s and Talley’s motions for summary judgment on the free speech issue attendant to Count Four of the amended complaint concerning free speech. No summary judgment being issued, that claim is still alive. Further, the § 1983 claim cannot be considered until Talley’s free speech claims are determined because a § 1983 claim is based upon the deprivation of “rights, privileges, or immunities secured by the Constitution and laws” of the United States. 42 U.S.C. § 1983; Dagel v. City of Great Falls (1991), 250 Mont. 224, 819 P.2d 186.

We conclude that the only constitutional claim which has merit under the pleadings is the claim of denial of free speech according to the First Amendment to the United States Constitution and the attendant § 1983 claim. (Count Nine alleges a claim of slander and presents a question of fact to be considered by a jury.)

We hold that the District Court did not err in so determining.

e. Attorney’s Fees.

The District Court determined that attorney’s fees for the constitutional violations associated with 42 U.S.C. § 1983 could not be determined until after litigation of the free speech issue. If Talley prevails on his free speech claims, the District Court determined that he would be entitled to attorney’s fees. Consideration of attorney’s fees is, therefore, premature at this time.

f. Injunctive Relief.

Talley argues that he is entitled to injunctive relief and rehire because he was not rehired because of his exercise of free speech. FVCC contends that there are no grounds on which injunctive relief could be granted to Talley.

The District Court determined that because Talley did not have a property interest in his position as part-time instructor, there were no grounds for injunctive relief.

An injunction is an equitable remedy fashioned according to the circumstances of a particular case. Montana Tavern Ass’n v. State By and Through Dept. of Revenue (1986), 224 Mont. 258, 729 P.2d 1310; § 27-19-101, MCA, et seq. The issuance or refusal of injunction is addressed to the discretion of the trial court. Butler v. Germann (1991), 251 Mont. 107, 822 P.2d 1067. Because Talley did not have a property interest or a right to tenure under Montana’s laws, the court did not abuse its discretion in denying a grant of injunction.

We hold that the District Court did not err in granting summary judgment to FVCC on Count Eight of Talley’s amended complaint.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES HARRISON, HUNT, NELSON and GRAY concur.


text:
    IN THE MATTER OF L.E.B., a minor child.
    No. 92-554.
    Submitted on Briefs March 4, 1993.
    Decided July 29, 1993.
    50 St.Rep. 895.
    259 Mont. 492.
    856 P.2d 1382.
    For Appellant: Barbara E. Bell, Bell and Marra, Great Falls.

      For Respondent: William K. Hammer and Gary S. Deschenes, Deschenes Law Office, Great Falls.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

The mother of L.E.B., a minor child, appeals from an order of the District Court for the Eighth Judicial District, Cascade County, which terminated the mother’s parental rights and granted the child’s grandparents’ petition for adoption.

We affirm.

The issue on appeal is restated as follows:

Did the District Court err when it terminated the mother’s parental rights and concluded that her consent to the adoption was not necessary?

L.E.B. was born on July 10, 1981, when his mother, Donna, was seventeen years old. Although the natural father’s identity is known, he has never been involved in the care or support of L.E.B., is not a party to this lawsuit, and does not challenge the court’s termination of his parental rights.

With the exception of a few brief periods when he resided with his mother, L.E.B. has lived with his maternal grandparents in Great Falls since birth. In 1984, when L.E.B. was three years old, Donna enlisted in the Montana Air National Guard. At Donna’s request, and pursuant to National Guard regulations which require single parents to name a guardian for their minor children during the term of enlistment, the child’s grandparents petitioned the trial court to appoint them as co-guardians of L.E.B. This request was granted on August 10, 1984.

After spending approximately one year in the National Guard, Donna transferred to the Army and was subsequently discharged on October 11,1985, for medical reasons. Without informing her parents of her discharge, Donna moved to California where she has resided ever since. At that time, she did not terminate the guardianship nor seek to have L.E.B. returned to her care.

In June 1987, Donna’s parents took L.E.B. to California to visit her for the summer. L.E.B. remained in California with Donna and attended first grade during the 1987-88 school year.

After discovering that L.E.B. was having serious difficulties in school due to dyslexia, his mother testified that she and her parents agreed that L.E.B. would spend the next three years with his grandparents in order to take advantage of a special education program available in the public school system in Great Falls. The grandparents, however, deny that there was a discussion regarding a time limit on L.E.B.’s return to Montana. In fact, they testified that, in addition to L.E.B.’s problems with dyslexia, they brought him back to Montana due to concerns about Donna’s drinking and the care L.E.B. was receiving.

Donna visited L.E.B. during the summer and Christmas of 1989, but had virtually no other contact with L.E.B. up until July, 1991. Furthermore, although gainfully employed throughout much of the time that her parents were caring for L.E.B., Donna never provided financial support for L.E.B. other than occasional gifts and clothing.

During the summer of 1991, when Donna arrived in Great Falls with the intention of returning L.E.B. to California, her parents refused to release L.E.B. to her custody, citing their rights as guardians. As a result, Donna petitioned the District Court on August 6, 1991, for custody and termination of the guardianship. Her parents countered with a petition to terminate Donna’s parental rights and to adopt L.E.B.

A non-jury trial was held on April 9, 1992 and July 2, 1992. At the conclusion of the trial, the court granted the grandparents’petition and allowed them to adopt L.E.B., thereby terminating Donna’s parental rights. In its Findings of Fact and Conclusions of Law, issued on October 5,1992, the comb found that Donna had no contact with L.E.B. since the summer of 1989, had not provided financial support for him since 1984, and would not be able to provide L.E.B. with a stable and loving home environment. The comb also found that Donna’s testimony was not credible due to numerous inconsistencies and her “history of lies and deceit.” The court concluded that it would be in L.E.B.’s best interests to be adopted by his grandparents. That conclusion is not contested on appeal. The comb further determined that his mother’s consent to the adoption was not required due to her failure to provide support for him dining the year preceding the filing of the petition, and her willful abandonment of L.E.B.

From the court’s Findings of Fact, Conclusions of Law, and Decree, Donna appeals.

Did the District Court err when it terminated Donna’s parental rights and concluded that her consent to the adoption was not necessary?

Citing In the Matter of Aschenbrenner (1979), 182 Mont. 540, 597 P.2d 1156, Donna contends that, since the guardianship was still in effect, the court was required to find abuse and neglect before terminating her parental rights in favor of a non-parent. She argues that the court improperly considered only the adoption statute without considering the statutes governing guardianship, jurisdiction of child custody, and termination of the parent-child relationship.

However, the grandparents’ petition for adoption was commenced pursuant to the provisions of the Uniform Adoption Act found at §§ 40-8-101 through -136, MCA. On appeal, this Court must consider whether the trial court properly found that the statutory criteria for adoption of a minor, without the consent of a parent or parents, were satisfied. The authority Donna relies on involved an attempt to terminate parental rights through a guardianship proceeding, and this Court held that such a proceeding was not a proper means to terminate a parent’s constitutional right to custody of his or her children. Aschenbrenner, 597 P.2d at 1164. In this instance, the guardianship was not the basis for terminating Donna’s rights.

We have recognized on several occasions that there is some overlap in the statutes pertaining to parent-child relationships and have cautioned the district courts to identify and adhere to the proper procedures and standards to be used in the proceedings before them. Guardianship of Nelson (1983), 204 Mont. 90, 663 P.2d 316; Aschenbrenner, 597 P.2d at 1156. Here, the proceeding initiated by Donna’s parents was an adoption proceeding, and the record shows that the court properly considered the applicable criteria and procedures for the adoption of minors in the absence of parental consent.

Generally, before the District Court can allow the adoption of a child there must be parental consent. Section 40-8-lll(l)(a), MCA. However, the statute provides, in pertinent part, that an adoption of a minor can be judicially decreed without the consent of the parent(s) “if it is proven to the satisfaction of the court that the father or mother, if able, has not contributed to the support of the child during a period of 1 year before the filing of a petition for adoption,” or if it is shown that the parent(s) “willfully abandoned the child, as defined in 41-3-102(3)(d).” Sections 40-8-lll(l)(a)(iii) and (v), MCA. Once a final decree of adoption is entered, the natural parent(s) are thereafter relieved of all parental responsibilities and have no rights to the adopted child. Section 40-8-125, MCA.

Turning first to the question of support, we have held that in order for the court to find that a parent’s consent is not necessary to terminate parental rights and allow an adoption, there must be clear and convincing evidence that the parent has not contributed to the support of the child for one year and was able to do so. Adoption of J.B.T. (1991), 250 Mont. 205, 207, 819 P.2d 178, 179.

In this instance, the District Court found that Donna had not contributed to L.E.B.’s support during a period of one year prior to the filing of the petition for adoption. A review of the record demonstrates that the testimony was undisputed that she had not contributed to L.E.B.’s support at any time during the guardianship, and specifically, had not provided support from August 1990 through August 1991, the year preceding the adoption petition. By her own admissions, she has been employed as an accountant since 1989, and her ability to provide support for L.E.B. is not an issue. She contends, however, that the guardianship order did not contain support provisions, and that her parents never requested support from her. Furthermore, she argues that she provided full support for L.E.B. during the times that he was in her custody, paid for his transportation to and from California for visits, covered him on her health insurance plan, and gave him gifts, school clothes, and spending money.

We note first that this Court recently held that “a parent’s obligation to support his child is not dependent on an order of the Court.... There is no requirement under § 40-8-lll(l)(a)(v), MCA, that child support be court ordered.” Adoption of D.J.V. (1990), 244 Mont. 209, 213, 796 P.2d 1076, 1078. Moreover, we have repeatedly held that providing occasional articles of clothing or other gifts does not satisfy a parent’s obligation to provide financial support. Adoption of K.L.J.K. (1986), 224 Mont. 418, 421, 730 P.2d 1135, 1137; Adoption of S.L.R. (1982), 196 Mont. 411, 414-15, 640 P.2d 886, 888. Donna’s health insurance only covered L.E.B. when he resided in California. It is uncontroverted that L.E.B. has resided with his grandparents in Great Falls since May 1988, and the evidence clearly demonstrates that L.E.B.’s medical bills have always been paid for by his grandparents’ health insurance, rather than his mother’s. Finally, it is undisputed that Donna did not see L.E.B. during the relevant year in question. Even if payment of travel expenses could be construed as a form of support, there were no such expenses incurred during this time.

We conclude that there was clear and convincing evidence to support the District Court’s findings that Donna failed to support L.E.B. although financially able to do so. Therefore, we do not need to evaluate the evidence of abandonment, which is a separate and independent basis for allowing adoption without parental consent. The trial court need only find one of the statutorily enumerated substitutes for consent in order to proceed with an adoption. Adoption of C.R.D. (1989), 240 Mont. 106, 782 P.2d 1280.

We hold that the court did not err when it terminated Donna’s parental rights and allowed her parents to adopt L.E.B. on the grounds that Donna’s consent to the adoption was not necessary due to her failure to provide support. The order of the District Court is affirmed.

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