No. 95-430
IN THE SUPREME COURT OF THE STATE OF MONTANA
1996
GARY D. FINDLEY and CAROLYN FINDLEY,
husband and wife, formerly d/b/a
KINGS HILL YOUTH HOME (KHYH),
Plaintiffs and Appellants,
v.
MONTANA THIRTEENTH JUDICIAL DISTRICT
COURT, YELLOWSTONE COUNTY; YOUTH
COURT SERVICES. DIVISION OF THE
MONTANA JUDICIAL COURT, YELLOWSTONE
COUNTY,
Defendants and Respondents.
APPEAL FROM: District Court of the First Judicial District,
In and for the County of Lewis and Clark,
The Honorable Dorothy McCarter, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Patrick F. Flaherty, Great Falls, Montana
Steven T. Potts, Jardine, Stephenson, Blewett
& Weaver, P.C., Great Falls, Montana
For Respondent:
Dennis Paxinos, Yellowstone County Attorney,
Billings, Montana
Submitted on Briefs: June 17, 1996
Jl,ll,. 1 8 1996 Decided: July 18, 1996
Filed:
Clerk
Chief Justice J. A. Turnage delivered the Opinion of the Court.
Gary D. Findley and Carolyn Findley appeal a judgment of the
First Judicial District Court, Lewis and Clark County, denying
their contract claim against Youth Court Services of the Thirteenth
Judicial District Court (YCS) We affirm.
The issues are:
1. Did the parties enter into a contract requiring YCS to pay
$41 per day or an otherwise reasonable amount in return for the
Findleys' services?
2. Did the District Court err in finding that Carolyn Findley
filled in the contract rate of $41 on October 4, 1985?
3. Did the court err by finding that the Findleys' compensa-
tion was limited to sums paid by a non-party to the contract?
4. Did the court err by concluding there was no evidence that
YCS ratified the contract?
5. Did the court err by concluding that equitable estoppel
cannot apply to the facts of this case?
6. Should this Court enter findings of fact and conclusions
of law in accordance with 5 3-2-204(5), MCA?
In 1984 and 1985, Gary and Carolyn Findley built and began
operating a foster home known as the Kings Hill Youth Home (KHYH)
in Meagher County near White Sulphur Springs, Montana. In
September 1985, YCS inquired with the Findleys about placing an
adolescent boy, B.I., as KHYH's first foster child. On October 2,
1985, YCS probation officer Warren Pearson took B.I. to KHYH to
meet with the Findleys concerning the potential placement.
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Gary Findley told Pearson that KHYH would need to charge $41
per day to care for B.I. The Findleys asked Pearson to sign a
written contract under which they would provide services to B.I.
and YCS would assure that they would be paid $41 per day. The
Findleys produced a form contract which included blank spaces for
the name of the child, the name of the party contracting with KHYH
for placement, and the rate of compensation for the placement.
Pearson testified that he signed the form contract before he
left KHYH that day only because Gary Findley insisted that Findleys
needed the form to show the "treatment team" that KHYH and YCS were
seriously considering a placement of B.I. The extent to which the
blanks on the form contract had been filled in was disputed. At
trial, Pearson testified that he signed a form contract which did
not contain a daily rate amount, a date, or other signatures. He
testified that he signed his name to a blank labeled "Representa-
tive/Title" and wrote in "Court Services" as the "Referring Agency"
on the form contract.
Pearson further testified that he explained to the Findleys
that YCS was responsible only for placement decisions for children
adjudicated as youth in need of supervision, and that the Montana
Department of Social and Rehabilitation Services (SRS) administered
reimbursement of foster care providers. He testified that he
repeatedly told the Findleys that he could not guarantee a daily
payment rate.
The Findleys testified that B.I.'s name, "13th Judicial
District Court Services" as the party contracting with KHYH, and
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11$411’ as the daily rate, had been filled in on the form contract
before Pearson signed it. The Findleys told Pearson they would
need several days to decide whether they could serve B.I. at KHYH.
Two days later, the Findleys decided to accept placement of
B.I. at KHYH. Carolyn Findley testified that after inserting the
date on the signed contract, she then mailed it to Pearson.
%.I. was adjudicated a youth in need of supervision and placed
at KHYH. When the Findleys submitted their first monthly bill for
foster care of B.I. to SRS, SRS informed them that the daily rate
for foster care services in Montana was $11.63. That daily rate
was paid to KHYH for services to B.I. through several years of
subsequent negotiations between the Findleys and SRS. B.I. stayed
with the Findleys for almost five years.
The Findleys brought this action in 1992 as a claim for
contract damages. One party defendant, SRS, obtained summary
judgment. Defendant Montana Thirteenth Judicial District Court
reached a settlement with the Findleys. YCS was the only remaining
defendant at the time of trial.
After hearing and reviewing the evidence submitted by the
Findleys and YCS, the District Court entered its findings,
conclusions, and order in favor of YCS. The court concluded that
the form contract signed by Pearson and Gary Findley was not
enforceable because it was substantially incomplete when the
parties signed it--neither the date nor the rate amount having been
filled in. From that judgment, the Findleys appeal.
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Issue 1
Did the parties enter into a contract requiring YCS to pay $41
per day or an otherwise reasonable amount in return for the
Findleys' services?
We will overturn a district court's findings of fact as
clearly erroneous only if the facts are not supported by substan-
tial credible evidence, the district court misapprehended the
effect of the evidence, or we are left with a definite and firm
conviction that a mistake has been committed. Interstate Produc-
tion Credit v. DeSaye (19911, 250 Mont. 320, 323, 820 P.Zd 1285,
1287. In reviewing conclusions of law, we determine whether the
district court's interpretation of the law was correct. Steer,
Inc. v. Department of Revenue (1990), 245 Mont. 470, 474-75, 803
P.2d 601, 603.
A contract is formed when: (1) identifiable parties capable
of contracting; (2) give their consent; (3) to a lawful object; and
(4) a sufficient cause or consideration is given. Section 28-2-
102, MCA. A contract must contain all its essential terms in order
to be binding. Riis v. Day (1980), 188 Mont. 253, 255, 613 P.2d
696, 697.
Pearson's testimony supports the finding that neither the date
nor the rate amount were filled in when he signed the contract.
The Findleys argue, however, that YCS subsequently consented to the
terms of the contract by remaining silent, accepting the benefits
of the contract, and allowing them to perform under it. They
maintain that an implied provision to make a reasonable payment
arose from Pearson's and YCS's conduct.
Pearson testified that he repeatedly informed the Findleys
that he was not able to authorize the expenditure of funds in any
amount for foster care of B.I. There was no indication that
Pearson in any way solicited the form contract; to the contrary, he
testified that he signed the incomplete form only at Gary Findley's
insistence to show the KHYH "treatment team" that there was a good
faith placement effort. Gary Findley ultimately admitted during
trial that he was aware that Pearson could not authorize any rate
of pay for the placement of B.I. He also admitted that he knew YCS
and Pearson were in charge of placement and SRS was responsible for
payment for the placement.
We conclude that the District Court's finding that neither the
date nor the rate amount was filled in when the parties signed the
form contract is not clearly erroneous. As discussed above, the
Findleys' theory that an implied provision arose is not persuasive
and was rebutted. Therefore, we hold that the District Court's
conclusion that no contract was formed is correct.
Issue 2
Did the District Court err in finding that Carolyn Findley
filled in the contract rate of $41 on October 4, 1985?
The Findleys assert there is no evidence in the record to
support the court's finding that
[t]wo days later, on October 4, 1985, the Findleys
decided that they would take [B.I.], and Carolyn filled
in the date of October 4, 1985, as well as the rate
amount of $41 a davL.1 [Emphasis supplied.1
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As discussed above, Pearson testified that neither the date nor the
daily rate amount were filled in when he signed the contract.
Carolyn Findley testified that she filled in the date on October 4.
The court apparently inferred that when Carolyn Findley filled in
the date, she also filled in the rate amount.
A trier of fact may make inferences from the evidence.
Section 26-l-501, MCA. Moreover, this finding was not essential to
the conclusion that no contract was formed between YCS and the
Findleys. We hold that the inclusion of this finding is not
reversible error.
Issue 3
Did the court err by finding that the Findleys' compensation
was limited to sums paid by a non-party to the contract?
The Findleys' characterization of this finding in the
statement of the issue is somewhat misleading. The court found
that "SRS simply had no authority, and in fact, did not, pay foster
homes more than the standard rate of $11.63 a day for each child."
The Findleys criticize this finding as extraneous.
The Findleys are correct that this finding, like the one in
Issue 2, is not essential to the court's decision. However, the
finding is clearly supported in the record, and we hold that it
does not represent reversible error.
Issue 4
Did the court err by concluding there was no evidence that YCS
ratified the contract?
"A contract which is voidable solely for want of due consent
may be ratified by a subsequent consent.'t Section 28-2-304, MCA.
In this case, the District Court concluded that "there is no
evidence that Pearson ratified the later addition of the rate
amount" to the form contract.
The Findleys point out that they have argued at least six
points as evidence that YCS ratified the contract: YCS received
the contract from the Findleys without objection and thereafter had
B.I. placed with the Findleys; Pearson observed that the Findleys
"delivered good service under the contract" and "performed their
duties;" and YCS never objected to the $41 rate to the Findleys or
anyone else--in fact, Pearson wrote to SRS and urged that the $41
rate be paid. The Findleys argue that while it may be proper for
the District Court to disregard their evidence, it was not proper
for the court to conclude that there was no evidence of ratifica-
tion.
Ratification must be accomplished by one with the power to
ratify. No such power has been demonstrated on the part of YCS
under the facts of this case. The evidence offered by the Findleys
is not inconsistent with YCSls position that it had no authority to
agree to pay any amount for foster care services. Pearson's
promise to the Findleys "to do the very best I could with SRS to
secure the requested rate" did not commit any agency to pay the
requested rate. Nor did his support for the Findleys in their
efforts to obtain $41 per day for foster care commit any agency to
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pay that amount. None of the evidence offered by the Findleys
establishes consent by YCS to pay the rate they demanded.
We hold that the District Court did not err in concluding that
there was no evidence that YCS ratified the contract.
Issue 5
Did the court err by concluding that equitable estoppel cannot
apply to the facts of this case?
The elements of equitable estoppel are: (1) conduct amounting
to a representation or concealment of material fact; (2) these
facts were known to the party estopped at the time of the conduct,
or circumstances were such that knowledge is imputed; (3) the truth
was unknown to the party claiming the benefit of estoppel when that
party acted; (4) the conduct was done with the intention or the
expectation that it would be acted upon by the party claiming
estoppel or under such circumstances that it was both natural and
probable that it would be so acted upon; (5) the conduct was relied
upon by the party claiming estoppel, who was led to act upon it;
and (6) the party claiming estoppel relied upon the conduct so as
to change his position for the worse. Mellem v. Kalispell Laundry
(1989), 237 Mont. 439, 442, 774 P.2d 390, 392.
The District Court concluded that equitable estoppel did not
apply because the evidence established that the Findleys knew after
one month that they would be reimbursed only in the amount of
$11.63 per day for foster care of B.I. Instead of terminating
their foster care relationship with B.I., they continued for nearly
five years with no assurance that they would ever receive more than
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the standard rate for foster care. The court's conclusion
describes a failure of proof as to element 3 above. Nor did the
Findleys establish element 1, misrepresentation or concealment of
material fact, given the evidence that Pearson informed them from
the very beginning that he had no authority to commit to a payment
rate. We hold that the court did not err in concluding that the
Findleys cannot recover on a theory of equitable estoppel
Issue 6
Should this Court enter findings of fact and conclusions of
law in accordance with § 3-Z-204(5), MCA?
This argument by the Findleys hinges upon their contention
that the District Court made erroneous findings of fact and
conclusions of law. They contend that because this is an equity
case, this Court may substitute its own findings and conclusions
and thus eliminate the need for rehearing on remand.
Because we have upheld the rulings of the District Court under
all challenges here raised, we need not discuss this issue further.
We affirm the decision of the District Court.
We/concur: