No. 91-487
IN THE SUPREME COURT OF THE STATE OF MONTANA
1992
MARGARET E. HANSEN,
Plaintiff and Appellant,
-vs-
CURTIS HANSEN and HAUGEN'S, INC.,
Defendants and Respondents.
APPEAL FROM: District Court of the Fifteenth Judicial District,
In and for the County of Roosevelt,
The Honorable M. James Sorte, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Loren J. OfToole 11, OfToole & OfToole, Plentywood,
Montana
For Respondents:
Donna M. Trotter, Winkjer, McKennett, Stenehjem,
Murphy & Reierson, Williston, North Dakota
Clerk
Justice William E. Hunt, Sr., delivered the opinion of the Court.
Plaintiff and appellant Margaret E. Hansen brought suit
against her son, Curtis Hansen, following a dispute in the
operation of the family farm and ranch. Curtis counterclaimed.
Margaret appeals from a jury verdict rendered in the Fifteenth
Judicial District, Roosevelt County. We affirm.
We phrase the issues before the Court as follows:
1. Was the jury verdict supported by substantial credible
evidence?
2. Was it an abuse of discretion for the District Court to
admit into evidence respondent's Exhibit P?
3. Should the District Court have granted a default judgment
against Haugen's, Inc.?
Appellant Margaret Hansen has lived on the family farm and
ranch operation, located near Froid, Montana, since her marriage in
1940. In 1971, appellant's husband died intestate. He was
survived by appellant and seven children. Following her husband's
death appellant became the sole owner of 1280 acres of land and
obtained ownership of all of the ranch equipment of her deceased
husband through joint tenancy. Additionally, appellant obtained a
one-third interest in both the cattle and another 320 acre parcel
of land. The seven children each held a 2/21st interest in the
cattle and the 320 acres of land.
Shortly after his father's death, defendant and respondent
Curtis Hansen left his employment with Haugen's, Inc., in
Williston, North Dakota, and returned, upon appellant's request, to
assist on the family farm. Appellant and respondent set up a joint
checking account to operate the Hansen Hereford Ranch. Respondent
ran the farming and ranching operation for the next 16 years,
unilaterally making all decisions which affected the operation.
Respondent took on responsibility for all aspects of the operation.
In return, respondent received a salary, room and board, a pickup,
and gasoline for his personal use.
Respondent made all decisions concerning the purchase of
equipment and machinery, and between 1971 and 1987 purchased
approximately $200,000 worth of farm equipment. Respondent also
signed the ranch property into numerous agricultural programs with
the ASCS office in Culbertson, Montana, including enrolling 310
acres in the Conservation Reserve Program (CRP) in July 1987.
Respondent consistently signed contracts at the ASCS office and
contracts to purchase equipment as "Hansen Hereford Ranch, by
Curtis Hansen." However, respondent's last major purchase of
equipment was in his own name. Respondent purchased a John Deere
530 baler from Haugen's, Inc. , and pledged several pieces of ranch
equipment as collateral.
Shortly after this purchase in November 1987, respondent
received a letter signed by his mother and all six of his siblings.
The letter indicated that the other owners of the ranch operation
were somewhat concerned about certain aspects of the operation and
indicated that they now intended to take a more active role in the
management of the ranch. Specifically, they requested an inventory
of all the machinery on the ranch and indicated that in the future
a majority of the family members must approve any purchase for the
ranch over $1500. Respondent claimed he would be unable to work
under these conditions and left the ranch. Respondent returned to
Williston, North Dakota, and began working again for Haugenvs,Inc.
After leaving the ranch, respondent defaulted on the contract
for the equipment purchased in his name. Haugen8s, Inc., took a
default judgment, moved the judgment to Montana, and repossessed
the ranch tractor and loader which respondent had pledged for
security. There was a surplus from the sale of the ranch machinery
and these funds were deposited into a bank account in the name of
Haugen8s,Inc., and respondent. Appellant added Haugenvs,Inc., as
a party for the purpose of getting these proceeds tendered to the
court. Haugen's, Inc., never appeared in the action. Appellant
moved for a default judgment at trial on this issue, but the motion
was never ruled upon by the trial court.
Prior to leaving the ranch, respondent had enrolled
approximately 310 acres of land in the CRP and had signed the
contract on behalf of the Hansen Hereford Ranch. Of the 310 acres
enrolled, appellant owned 152 acres outright, and had a one-third
interest in the remaining 158 acres. Shortly after leaving the
ranch, respondent notified the local ASCS office that it lacked the
signatures of all the owners of the land under the CRP contract.
The ASCS office suspended the contract until it could get the
signatures of all the family members. Appellant and six of her
children signed the contract, but respondent refused to sign. The
Roosevelt County ASCS office notified respondent that it required
4
his signature in order to continue the CRP contract. The ASCS
canceled the contract when respondent again refused to sign. As a
result of the cancellation, the ASCS is seeking liquidated damages
from appellant, as well as the return of $16,286.41 in payments
previously made under the contract.
The exact number of cattle that the ranch owned at the time of
Alfred Hansen's death in 1971 is not entirely clear. However, both
parties appear to agree that each of the seven children received
approximately ten head of cattle from their father's estate. At
some point, respondent bought the cattle owned by three of his
brothers, paying each of them $5000. Respondent obtained bank
loans to purchase the cattle and then used ranch funds to repay
approximately $13,000 on the loans. Appellant sold all of the
cattle after respondent left. Respondent was not given any of the
proceeds from this sale.
Appellant brought suit alleging respondent converted the farm
equipment and seeking damages for the canceled CRP contract.
Respondent counterclaimed allegingthat appellant had converted his
cattle. Additionally, respondent claimed to have been appellant's
partner for the 16 years he was on the ranch and he sought damages
for lost wages, raises, and fringe benefits he would have received
had he stayed at Haugen's, Inc., and not come back to the ranch.
The jury found that respondent had converted appellant's
equipment but awarded nothing in damages. The jury then determined
that respondent had acted maliciously in relation to the CRP
contract and awarded the appellant $1163 in damages. The jury
5
found that appellant had converted cattle belonging to respondent
and awarded respondent $20,000. The jury then awarded respondent
$23,000 for "other losses." From the verdict of the jury and entry
of judgment by the District Court, appellant brought this appeal.
I
Was the jury verdict supported by substantial credible
evidence?
Our scope of review of jury verdicts is necessarily very
limited. Sizemore v. Montana Power Company (1990), 246 Mont. 37,
803 P.2d 629. This Court will. not reverse a jury verdict which is
supported by substantial credible evidence, Kitchen Krafters, Inc.
v. Eastside Bank of Montana (1990), 242 Mont. 155, 789 P.2d 567.
This Court has defined substantial credible evidence as evidence
which a reasonable mind might accept as adequate to support a
conclusion. The evidence may be inherently weak and conflicting,
yet it may still be considered substantial. Christensen v. Britton
(1989), 240 Mont. 393, 784 P.2d 908. It is well established that
if the evidence is conflicting, it is within t h e province of the
jury to determine the weight and credibility to be afforded the
evidence. Mountain West Farm Bureau Mutual Ins. Co. v. Girton
(1985), 215 Mont. 408, 697 P.2d 2362. Finally, upon reviewing a
jury verdict to determine if substantial credible evidence exists
to support the verdict, this Court must view the evidence in the
light most favorable to the prevailing party, Kukuchka v. Ziemet
(l985), 219 Mont. 155, 710 P.2d 1361.
CONVERSION OF EOUIPMENT
Appellant brought suit seeking damages for the conversion of
her tractor and loader which respondent had pledged as security
when he purchased equipment in his own name. The tractor and
loader were lost when respondent defaulted. The undisputed
testimony at trial was that the value of the lost equipment was
between $18,500 and $23,500. The jury found that respondent
converted the equipment, but awarded appellant no damages.
Appellant contends the finding by the jury that she was not
entitled to any damages was not supported by substantial credible
evidence.
The measure of damages for conversion is set out at
5 27-1-320, MCA, which states:
(1) The detriment caused by the wrongful conversion
of personal property is presumed to be:
(a) the value of the property at the time of its
conversion with the interest from that time or, when the
action has been prosecutedwith reasonable diligence, the
highest market value of the property at any time between
the conversion and the verdict without interest, at the
option of the injured party: and
(b) a fair compensation for the time and money
properly expended in pursuit of the property.
(2) The presumption declared by subsection (1)
cannot be repelled in favor of one whose possession was
wrongful fromthe beginning by his subsequent application
of the property to the benefit of the owner without such
owner's consent.
Respondent correctly argues that the statutory presumption as
to the amount of damages is disputable. The presumption of damages
in the event of conversion may be overcome by evidence of peculiar
circumstances that result in an injury different than the statute
contemplates. Graham v. Clarks Fork Nat'l Bank (1981), 193 Mont.
282, 631 P.2d 718. Prior cases decided by this Court have only
dealt with situations in which it was alleged that the damages
where greater than provided by the statute. However, the
presumption may also be overcome with evidence that the damages
were less than provided by the statute. This Court has previously
suggested that the appropriate practice should be to first instruct
the jury on the statutory rule regarding damages. The jury should
then receive a supplemental instruction directing that the
presumption of damages may be overcome by evidence of peculiar
circumstances which would warrant an award of damages different
from the statutory presumption. Ferrat v. Adamson et al. (1917),
53 Mont. 172, 163 P. 112. The jury in this case was not
specifically instructed as to the evidence necessary to overcome
the presumption and made no findings as to any peculiar
circumstances which may have existed. However, the jury heard
extensive testimony during trial about the nature and duration of
the relationship between the parties and determined that appellant
was not entitled to damages for the conversion of her equipment.
While inherently weak we cannot say that the jury's finding was not
based on substantial evidence.
CRP CONTRACT
Respondent's failure to sign the CRP contract resulted in the
contract being canceled by the local ASCS office. The
uncontroverted testimony at trial was that the ASCS is now seeking
liquidated damages from appellant as a result of the cancellation,
as well as the return of $16,286.41 in payments previously made
under the contract. Additionally, appellant has lost future
payments which would have been made under the contract.
Respondent argued at trial that since he no longer had control
over the completion of the contract, that he could not, in good
faith, sign it. Appellant alleged that the refusal to sign was
malicious and vindictive. The jury found that respondent acted
maliciously in refusing to sign the contract, but awarded only
$1163 in damages. Appellant contends this award is not supported
by substantial credible evidence.
It is not clear from the verdict how the jury determined
appellant's damages to be $1163. However, this Court will not
disturb an award of damages unless the amount awarded is so grossly
out of proportion to the injury as to shock the conscience.
Frisnegger v. Gibson (1979), 183 Mont. 57, 598 P.2d 574. While the
award of damages in this instance appears to be relatively small in
comparison to appellant's loss, it is not so grossly out of
proportion so as to shock the conscience.
CONVERSION OF CATTLE
Respondent received 2/21sts of the cattle at his father's
death, which was approximatelyten head of cattle. Respondent then
purchased the cattle owned by his three brothers, paying each
brother $5,000. He borrowed this money and repaid approximately
$13,000 using ranch funds. After respondent left the ranch,
appellant sold all of the cattle and kept all of the proceeds.
Respondent counterclaimed, alleging that appellant had converted
his cattle. The jury found the cattle had been converted and
awarded respondent $20,000.
Appellant contends that since the cattle were purchased with
ranch proceeds they belonged to the ranch, even if respondent did
obtain bills of sale from his brothers for the cattle. Respondent
testified at trial that he used ranch proceeds to pay off the loans
because he had sold the cattle and deposited the proceeds in the
ranch account. Respondent argues in the alternative that the ranch
money used to pay off the loans should be considered a gift. While
the evidence concerning the conversion of cattle by appellant is
clearly conflicting, it is within the province of the jury to
determine the weight and credibility to be afforded the evidence
and the determination in this case will not be disturbed on appeal
by this Court.
RESPONDENT'S "OTHER LOSSES"
Respondent also counterclaimed, seeking damages for benefits
and wages he lost by returning to the ranch in 1971 instead of
staying at the job he held at the time. The District Court
instructed the jury that if they found respondent was an employee,
then the damages respondent sought were barred by the Wrongful
Discharge from Employment Act. Respondent argued that he had been
a partner on the ranch. The jury apparently agreed. On the
special verdict form used by the jury, question 12 asked them to
find if appellant owed respondent damages for other losses, and if
so, in what amounts. The jury returned with $23,000 in damages, of
which $7,000 was for personal checks written by respondent, and
$16,000 was for yearly bonuses. While the evidence concerning
respondent's claim that he was a partner may appear to be
inherently weak and conflicting there was substantial evidence for
the jury to reach this conclusion.
I1
Was it an abuse of discretion for the District Court to admit
into evidence defendant's Exhibit P?
Defendant's Exhibit P was a report prepared by an expert
witness for the defense on the wages and benefits respondent claims
he lost by returning to the ranch. The expert referred to the
report during his testimony and was subject to cross-examination
concerning the report. Respondent did not move for the admission
of the report into evidence at the time of the testimony by the
expert. Respondent waited until after he had rested his case
before he moved for the admission of the report. Over appellant's
objection the report was admitted.
Rulings on the admissibility of evidence are within the
discretion of the district court and will not be reversed by this
Court absent an abuse of discretion. Cooper v. Rosston (1988), 232
Mont. 186, 756 P.2d 1125. This Court has previously held that when
a party rests their case they voluntarily lose the right to
introduce any further evidence, except rebuttal. Maass v.
Patterson (1949), 122 Mont. 394, 204 P.2d 1040. In this instance,
the District Court abused its discretion by allowing into evidence
defendant's Exhibit P. However, in order for error to be the basis
11
for a newtrial, it must be so significant as to materially affect
the substantial rights of the complaining party. Rule 61,
M.R.c~v.P.; Zeke's Distributing Co. v. Brown-Forman Corp. (1989),
239 Mont. 272, 779 P.2d 908. In this instance, the report was
merely cumulative of other evidence presented to the jury and was
not prejudicial to appellant. The admission of the report was
harmless error, and therefore, does not warrant a reversal.
I11
Should the District Court have granted a default judgment
against Haugen's Inc.?
At the conclusion of trial, appellant moved for a default
judgment against Haugen's, Inc., concerning the excess proceeds
remaining after the repossession and sale of appellant's equipment.
The District Court decided that since appellant had only recently
received an accounting, and because issues not raised at trial
might be involved, a separate proceeding would be needed concerning
the excess proceeds. The District Court's decision was clearly
within its discretion.
Aff inned.
We concur: I
' Chief Justice