No. 93-428
IN THE SUPREME COURT OF THE STATE OF MONTANA
1994
BILL WATKINS,
Plaintiff and Respondent,
TOM WILLIAMS and
VIRGINIA WILLIAMS,
Defendants and Appellants.
APPEAL FROM: District Court of the Second Judicial District,
In and for the County of Silver Bow,
The Honorable James E. Purcell, Judge presiding.
COUNSEL OF RECORD:
For Defendants and Appellants:
Kevin E. Vainio, Butte, Montana
For Plaintiff and Respondent:
Gilbert U. Burdett, Burdett Law Firm,
Billings, Montana
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; Submitted on Briefs: A ~ r i l21. 1994
Chief Justice J. A. Turnage delivered the Opinion of the Court.
Tom and Virginia Williams appeal from a judgment of the Second
Judicial District Court entered against them following a jury
verdict awarding Bill Watkins $20,191. They also appeal the denial
of their motions for judgment notwithstanding the verdict and for
a new trial.
We rephrase the dispositive issues as follows:
1. Whether the District Court erred in permitting Watkins to
testify about the amount of damages he suffered.
2. Whether the court erred in determining that evidence
about circumstances surrounding Watkins' alleged criminal arrest
was inadmissible.
3. Whether the court erred in finding that the parties'
attempted accord agreement was not satisfied and therefore did not
extinguish their previously existing oral contract.
4. Whether the court erred by excluding evidence concerning
the alleged forgery of a bill of sale.
5. Whether the court erred in excluding from evidence a
letter, introduced by the Williamses at trial, which purported to
contain material terms of compensation for Watkins' horse training
services.
Tom and Virginia Williams own racehorses. At times, their
horses have raced on tracks in Montana, Wyoming, Idaho and
Oklahoma.
During March 1989, the Williamses asked Bill Watkins, a
licensed horse trainer, to train six of their racehorses on
location at Sallisaw, Oklahoma. Watkins agreed. The parties
dispute whether their oral agreement contained material terms
regarding compensation for Watkinsl services.
The Williamses and Watkins opened an account at Blue Ribbons
Downs racetrack, located near Sallisaw. As one of the Williamsesl
horses placed in or won a race, the winnings were deposited in the
account. Racetrack expenses, such as entry fees, were taken out of
the account. The parties agreed that Watkins could withdraw
certain monies from the account to cover his training costs and
charges.
Watkins provided the horses with hay, alfalfa, grain,
vitamins, stables and exercise, among other things. At his
request, jockeys galloped the horses around the track. Watkins
also had veterinarians attend to the horses1 medical needs.
Two of the six horses, The Right Key and Bodella, were taken
off training status during the Fall of 1989. The Williamses drove
from Montana to Oklahoma with a horse trailer and picked up The
Right Key; Watkins put Bodella out to pasture after the horse
failed to qualify in speed tests at the track.
Tom Williams occasionally visited Sallisaw to meet with
Watkins and check on the horses during the course of the parties1
contractual relationship. The Williamses irregularly paid Watkins
portions of the amount they owed him; also, Watkins withdrew funds
from the racetrack account from time to time.
The parties1 contractual relationship ended approximately one
year after it began. They met during March 1990 and worked out an
accord to extinguish the Williamses' existing debt to Watkins.
They agreed that the Williamses would pay Watkins $5,000, and, at
that time, Tom Williams tendered two $2,500 checks to Watkins.
Watkins sent the checks to his bank. When his account was not
credited with the second $2,500 check, Watkins learned that the
check had become lost.
He called the Williamses and asked them to stop payment on the
check. They did. Watkins also asked the Williamses to issue
another $2,500 check to complete their accord agreement. They
refused.
The Williamses stated that they refused because when they
retrieved their racehorses after making the accord agreement with
Watkins, they found the horse Bodella to be in poor condition.
Specifically, they alleged that Bodella had been mistreated and
starved by Watkins.
Watkins obtained the services of an attorney. Through his
attorney, Watkins again requested that the Williamses complete
their accord agreement by reissuing the second $2,500 check. The
Williamses again refused.
When Watkins sued the Williamses on the original oral
agreement, he stated that the Williamses had incurred a debt of
approximately $38,000. Watkins further stated that the Williamses
had directly and indirectly paid approximately $18,000 ofthe debt,
leaving a balance of $20,191 owing.
The Williamses responded by alleging that the parties had
reached a separate accord agreement which had extinguished the
original oral contract. The Williamses also counter-claimed
against Watkins, alleging that he mistreated their horse, Bodella.
At trial, testimony established that Watkinsg charges for
training horses was reasonable in Sallisaw, Oklahoma. The jury
returned a verdict for Watkins, stating that the Williamses owed
him $20,191. The jury found that Watkins did not owe the William-
ses anything for the alleged mistreatment of Bodella. Judgment was
entered accordingly, and the Williamses appeal.
STANDARD OF REVIEW
We review a district court's findings of fact for clear error
and its conclusions of law to determine whether the conclusions are
correct. Steer, Inc. v. Depgt of Revenue (1990), 245 Mont. 270,
803 P.2d 601. Regarding questions concerning the admissibility of
evidence, the "question[s] . . . must in every case be left largely
to the sound discretion of the trial court, subject to review only
in case of manifest abuse." Cech v. State (1979), 184 Mont. 522,
604 P.2d 97, citing Gunderson v. Brewster (l97O), 154 Mont. 405,
466 P.2d 589.
ISSUE ONE
Did the District Court err by permitting Watkins to testify
about the amount of damages he suffered?
The Williamses argue that the court erred by permitting
Watkins to testify about the amount of damages he suffered because,
while testifying, Watkins allegedly read from a document which was
excluded from evidence. The document was a summary of contents
contained in a wall calendar kept by horse trainers in Sallisaw.
Watkins presented it to the court for admission into evidence and
the Williamses objected, stating that the summary was not the best
evidence of Watkins' training services. After voir dire of
Watkins, the Williamses also alleged that the document should be
excluded as self-serving. The court sustained the Williamses'
objection.
Watkins thereafter testified about the amount of training
services he rendered. He specifically stated that he charged $18
per day per horse trained. The $18 figure included a myriad of
services, from shoeing to galloping to feeding and sheltering.
Watkins charged a different amount for attending to Bodella's needs
while the horse was at pasture. The total bill for his services
for the year was $37,888. And, Watkins testified, the Williamses
had paid him $17,697 of the debt they owed him, reducing the amount
owing to a balance of $20,191.
Disputing the figure, the Williamses argue that the court
erred by allowing Watkins to testify while reading from the
calendar summary. They allege that the testimony is improper
according to Rules 1002 and 1006, M.R.Evid. Watkins responds by
asserting that the best evidence rule does not exclude oral
testimony and that the court correctly permitted him to testify
about the damages he suffered.
Rule 1002, M.R.Evid., the best evidence rule, requires that
"[tlo prove the content of a writing .. . the original writing
.. . is required ... .I1 Rule 1006, M.R.Evid., provides that:
The contents of voluminous writings, recordings, or
photographs which cannot conveniently be examined in
court may be presented in the form of a chart, summary,
or calculation. The originals, or duplicates, shall be
made available for examination or copying, or both, by
other parties at a reasonable time and place. The court
may order that they be produced in court.
The best evidence rule pertains to evidentiary documents only when
the terms of the writing are material. State v. Cronin (1978), 179
Mont. 481, 587 P.2d 395. It comes into play only when the terms of
a writing are being established and an attempt is being made to
offer secondary evidence to prove the contents of the original
document. See Application of Angus (0r.App. 1982), 655 P.2d 208,
cert. denied (1983), 464 U.S. 830, 104 S.Ct. 107, 78 L.Ed.2d 109.
Secondary evidence may include a copy of an original or
testimony in regards to the contents of the original. See 32A
C.J.S.2d Evidence, 5 775. The secondary evidence is admissible
over a best evidence objection if one of the requirements set forth
at Rule 1004, M.R.Evid., has been met and proper foundation is
laid.
Witness testimony adduced from personal experience or
knowledge is not within the ambit of secondary evidence; witnesses
may freely testify about events which have occurred independently
from and may have been memorialized by an antecedent writing. See,
e.g., Roods v. Roods (Utah 1982), 645 P.2d 640; see also D'Angelo
v. United States (1978), 456 F.Supp. 127; Cf. Rule 602, M.R.Evid.
The best evidence rule remains inapplicable when a witness
testifies about personal knowledge of a matter, regardless whether
the same information may be contained in an inadmissible writing.
Moreover, our rules of evidence permit witnesses to use writings to
refresh their memory while testifying. Rule 612, M.R.Evid.
After reviewing the record, we conclude that Watkins testified
from personal knowledge and experience and that his concurrent use
of the summary of contents from the wall calendar was not revers-
ible error. The summary's contents, as stated by Watkins during
oral testimony, merely set forth the number of days he trained the
horses and the resulting charges which were incurred by the
Williamses. Neither party disputes the length of time the horses
were in Watkins' possession and the jury found Watkins' charge of
$18 per day per horse to be a reasonable fee given the facts of
this case and the location in which the training occurred.
Indeed, the Williamses did not offer any significant rebuttal
evidence concerning damages; after hearing Watkins' testimony the
jury was free to find that the Williamses owed him $20,191.
Section 26-1-301, MCA. We conclude that the District Court did not
commit reversible error in permitting Watkins to testify about the
amount of damages he suffered.
ISSUE TWO
Did the court err in determining that evidence about circum-
stances surrounding Watkins' alleged criminal arrest was inadmissi-
ble?
On Watkins' motion in limine, the court excluded evidence
concerning Watkins' alleged arrest. After reviewing the record, we
hold that the court did not err in granting the motion in limine.
ISSUE THREE
Did the court err in finding that the parties1 attempted
accord agreement was not satisfied and therefore did not extinguish
their original oral contract?
Originally the court, on Watkinsl motion in limine, excluded
all evidence pertaining to the parties1 attempted accord agreement
because the court found that the agreement was not satisfied.
During trial, however, Watkins "opened the doorv1 the subject by
to
testifying that he had attempted to resolve the parties1 differenc-
es by entering into an accord with the Williamses. The Williamses
then presented evidence of the accord, specifically alleging that
they were justified in not completing the accord when they found
Bodella in poor condition. The jury disregarded the Williamsest
accord and satisfaction argument and returned a verdict in favor of
Watkins.
The Williamses argue that the court's initial exclusion of the
accord and satisfaction affirmative defense was reversible error
because it prejudiced their case. Watkins counters by asserting
that the Williamses were permitted a generous latitude in which to
present their accord and satisfaction defense, and that the jury
was justified in returning its verdict given the evidence and
testimony presented at trial.
An accord is Itan agreement to accept in extinction of an
obligation something different from or less than that to which the
person agreeing to accept is entitled." Section 28-1-1401, MCA.
Satisfaction is "acceptance by the creditor of the consideration of
an accord." Section 28-1-1402, MCA. Where there is no satisfac-
tion, the original debt is not extinguished and the debtor remains
liable for damages. Goggins v. Bookout (1963), 141 Mont. 449, 378
P.2d 212; see also Hetherington v. Ford Motor Co. (1993), 257 Mont.
395, 849 P.2d 1039.
We affirm the District Court's determinations that the
Williamses did not satisfy the accord and that evidence of the
failed attempt at settling their differences was properly initially
excluded from trial pursuant to Rule 408, M.R.Evid. Although the
Williamses initially tendered two $2,500 checks to Watkins and
normally a check constitutes valid consideration, see 5 28-2-801,
MCA, the court, when determining when an accord has been satisfied,
will look to substance over form. Section 1-3-219, MCA. The court
here was justified in determining that the accord was not satisfied
because the Williamses stopped payment on the second check and then
repeatedly refused to tender another to Watkins. We conclude that
the court did not err.
ISSUE FOUR
Did the court err by excluding evidence concerning the alleged
forgery of a bill of sale?
During trial, in support of their accord and satisfaction
defense, the Williamses attempted to introduce evidence of an
alleged theft or sale of their horse trailer. They asserted that
the horse trailer belonged to them, but was in Watkinsl possession,
when it disappeared. They further asserted that Watkins forged a
bill of sale relating to the horse trailer. Being caught with
forgery, contend the Williamses, was the reason thatwatkins agreed
to the terms of the parties1 accord. The court excluded the
evidence of the alleged forgery as being irrelevant and outside of
the scope of the Williamsesl pleadings; the court did, however,
permit the Williamses to inquire about the horse trailer during
trial.
A court has authority or jurisdiction to decide issues as they
are framed by the partiest pleadings. Old Fashion Baptist Church
v. Deplt of Revenue (l983), 206 Mont. 451, 671 P.2d 625. The
parties may plead by complaint, answer or counterclaim, among other
things. Rule 7 (a), M.R.Civ.P.
Rule 13(a), M.R.Civ.P., provides:
A pleading shall state as a counterclaim any claim which
at the time of serving the pleading the pleader has
against any party, if it arises out of the transaction or
occurrence that is the subject matter of the opposing
party's claim . . . .
Permissive counterclaims, those which do not arise out of the same
transaction, may also be pled by a defendant. Rule 13(b),
M.R.Civ.P. Additionally, if a party has erroneously omitted a
counterclaim, the party may, with the leave of court, set up the
counterclaim by amendment. Rule 13(f), M.R.Civ.P.
The Williamses raisedtwo issues in their counterclaim against
Watkins: That the partiest original agreement was extinguished by
an accord and satisfaction, and that Watkins owed the Williamses
damages for mistreating Bodella. No pleading asserts that Watkins
forged a bill of sale; the Williamses did not at any time attempt
to amend the pleadings to reflect a forgery claim.
After reviewing the record, we conclude that the court did not
err in excluding the forgery evidence because it was irrelevant to
this debt action and because it was outside the scope of the issues
presented in the parties' pleadings.
ISSUE FIVE
Did the court err in excluding from evidence a letter,
introduced by the Williamses at trial, which purported to contain
material terms of compensation for Watkins' horse training
services?
The Williamses' proposed evidence, a letter which purported to
set out the oral agreement of the parties concerning compensation
for Watkins' horse training services, was first introduced during
trial.
Counsel for Watkins objected to the letter because it had not
been produced during discovery. The letter was not listed in the
parties' exhibit lists and was not listed in the court's pretrial
order. Counsel for the Williamses stated that he had only seen the
letter a few days prior to trial, and that he thought the letter
had been listed as an exhibit. After discussion, the court
sustained Watkins' objection and instructed the jury not to
consider the document.
The Williamses argue that the letter was wrongly excluded from
evidence because it was introduced in rebuttal to Watkins' oral
testimony. Watkins states that the Williamses failed to make an
offer of proof on the document and that the court appropriately
excluded it from evidence under the circumstances in this case.
The District Court is in the best position to determine
whether a party has violated the rules of civil procedure. Dassori
v. Roy Stanley Chevrolet Co. (1986), 224 Mont. 178, 728 P.2d 430.
Failure to disclose evidence during discovery may lead to sanc-
tions. Vehrs v. Piquette (1984), 210 Mont. 386, 684 P.2d 476. As
a sanction, the court may limit one party's testimony and evidence,
according to Rule 37, M.R.Civ. P. Owen v. F. A. Buttrey Co. (1981),
192 Mont. 274, 627 P.2d 1233.
The court issued its scheduling order on March 31, 1992, and
stated that:
Copies of proposed exhibits shall be submitted to the
court at least five (5) days prior to the trial date. A
fully completed Record of Exhibit forms [sic] from all
parties along with witness lists setting forth the
general order in which the witnesses will appear and
testify is required.
The Williamses did not submit the letter to the court prior to
trial. Also, the Williamses failed to give the letter to Watkins
in response to Watkins' requests for discovery. We conclude that
the court did not err in refusing to admit the letter into
evidence. Affirmed.
We concur:
June 2, 1994
CERTIFICATE OF SERVICE
I hereby certify that the following certified order w s sent by United States mail, prepaid, to the
a
following named:
Kevin E. Vainio
Attorney at Law
27 W.Park St.
Butte, MT 59701
Gilbert U. Burdett
Burdett Law Firm, P.C.
2929-3rd Ave. No., Ste. 325
Billings, MT 59103
ED SMITH
CLERK OF THE SUPREME COURT
BY^-
Depu