Robertson v. Soup Creek

No

No. 98-517

IN THE SUPREME COURT OF THE STATE OF MONTANA

1999 MT 105N

JOHN ROBERTSON,

Plaintiff,

v.

SOUP CREEK RANCH, INC., an inactive Montana corporation, KATHY NELSON,

in her capacity as president and individually; and UNITED STATES OF AMERICA,

Defendants.

ROBERT LEE BROCKETT, alias RONALD L. BADER,

Plaintiff, Counterclaimant, and Appellant,

v.

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SOUP CREEK RANCH, INC., a Montana corporation,

Defendant, Counterclaimant, Third-Party Plaintiff, and Respondent,

LAKE COUNTY, a political subdivision of the State of Montana,

by and through the Lake County Treasurer,

Defendant,

KATHY M. NELSON,

Defendant, Counterclaimant, Third-Party Plaintiff, and Respondent,

and all other persons, known or unknown, claiming, or who may claim any right,

title, estate or interest in or lien or encumbrance upon the real property described in

the Complaint and subject to this action for foreclosure,

Defendants,

HASH, O'BRIEN & BARTLETT, a partnership consisting of Charles H. Hash, Kenneth E.

O'Brien, James C. Bartlett, and Mark Hash; and JAMES C. BARTLETT, individually,

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Third-Party Defendants and Respondents.

APPEAL FROM: District Court of the Twentieth Judicial District,

In and for the County of Lake,

The Honorable Douglas G. Harkin, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Wilmer W. Windham, Attorney at Law; Polson, Montana

John Hud, Attorney at Law; Bozeman Montana

(for Appellant Bader)

For Respondents:

Ronald B. MacDonald; Datsopoulos, MacDonald & Lind, P.C.;

Missoula, Montana (for Respondents Soup Creek Ranch and Nelson)

William Evan Jones and Lucy T. France; Garlington, Lohn &

Robinson, P.C.; Missoula, Montana

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(for Respondents Hash, O'Brien & Bartlett and James C. Bartlett)

Submitted on Briefs: December 30, 1998

Decided: May 18, 1999

Filed:

__________________________________________

Clerk

Justice Jim Regnier delivered the opinion of the Court.

¶1. Pursuant to Section I, Paragraph 3(c), Montana Supreme Court 1996 Internal
Operating Rules, the following decision shall not be cited as precedent but shall be
filed as a public document with the Clerk of the Supreme Court and shall be
reported by case title, Supreme Court cause number, and result to the State Reporter
Publishing Company and to West Group in the quarterly table of noncitable cases
issued by this Court.

¶2. This case commenced in March 1990, when the Flathead Bank of Bigfork filed a
foreclosure action in the Twentieth Judicial District Court, Lake County, against
Soup Creek Ranch, Inc. (SCRI), a Montana corporation; Kathy Nelson, as president
and sole shareholder of SCRI; and Ronald Bader. Bader filed a cross-claim against
SCRI and Nelson asserting that he had a life estate in the ranch which was being
foreclosed. Nelson filed a third-party complaint against the law firm of Hash,
O'Brien & Bartlett, a partnership with its principal place of business in Kalispell,
and attorney James C. Bartlett, individually, alleging that Bartlett breached a

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fiduciary responsibility and had a conflict of interest when he drafted real estate
documents on her behalf that ostensibly granted Bader a life estate. John Robertson
became involved in this matter because he lent money to Bader so that Bader could
purchase the bank's mortgage and its claims against SCRI and Nelson. After Bader
assumed the bank's position as plaintiff in the underlying foreclosure action, he then
assigned his claims in the Soup Creek Ranch to Robertson, and Robertson eventually
assumed the position as plaintiff.

¶3. The matter before us deals with SCRI and Nelson's counterclaim against Bader
in which they assert that Bader's alleged life estate should be declared null and void
on the basis of fraud, misrepresentation, and deceptive business practices, as well as
a lack of consideration and mutual consent. The District Court imposed a sanction of
default against Bader and entered judgment against him on SCRI and Nelson's
counterclaim. According to the District Court, the sanction was justified because
Bader refused to comply with the court's scheduling order regarding discovery and
the preparation of the pretrial order. Bader appeals from the default judgment, as
well as the District Court's findings of fact and conclusions of law which declared his
life estate null and void, and dismissed a cross-claim he brought against Hash,
O'Brien & Bartlett and attorney Bartlett, individually, for contribution. We affirm
the District Court.

¶4. The following issues are dispositive on appeal:

¶5. 1. Did the District Court abuse its discretion when it sanctioned Bader with a
default judgment?

¶6. 2. Did Nelson's subsequent affidavit support the District Court's decision to
declare Bader's life estate null and void?

FACTUAL BACKGROUND

¶7. Robert Lee Brockett was a fugitive from justice who adopted the alias Ronald L.
Bader. Bader purchased the Soup Creek Ranch in 1976. Because of legal concerns,
he transferred title in the ranch to a friend, Gilbert Rodriguez. Subsequent to the
transfer, Rodriguez filed for bankruptcy which subjected the property to the
jurisdiction of the federal bankruptcy court. Bader was successful, however, in
convincing the bankruptcy trustee that he was the true owner of the property and

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that his previous transfer to Rodriguez was a fiction to obscure his interest in the
ranch. In order to retain the ranch, the bankruptcy court required Bader to pay the
trustee the sum of $50,000. Apparently without sufficient funds to make the payment,
Bader entered into an agreement with his companion, Kathy Nelson, whereby Nelson
purchased the Soup Creek Ranch in her name and Bader managed it. Nelson and
Bader carried on a relationship and lived together at the ranch. Eventually, however,
Nelson and Bader's relationship ended.

¶8. The procedural history of this case is complex and a detailed recitation is not
necessary or germane to the issues raised in this appeal. Suffice it to say that the
parties filed various counterclaims, cross-claims, and third-party complaints against
each other as the litigation progressed. It is important to note that the complaint
which initiated this litigation was filed by the Flathead Bank of Bigfork in March
1990. On January 16, 1991, the District Court informed the parties that a notice of lis
pendens had been filed by the United States government in a federal court
proceeding. An action was filed in rem against the ranch, seeking forfeiture of the
property as a result of alleged drug activities involving Bader. This action effectively
stayed the proceedings at issue for three years.

¶9. After the three-year hiatus, the parties again pursued their claims. On September
7, 1993, Bader assigned his interest in the bank note, mortgage, and claims to
Robertson as security for the money he owed Robertson. However, he made the
assignment junior to his interest in the life estate. In February 1994, Robertson filed
a separate foreclosure action against SCRI and Nelson. Robertson's case was
consolidated with the existing case. SCRI and Nelson settled with Robertson and
agreed to stay foreclosure proceedings until a final judgment was entered on Nelson's
counterclaim concerning Bader's life estate.

¶10. More than seven years after the litigation commenced, the District Court, on
August 1, 1997, entered a scheduling order designed to resolve the validity of Bader's
life estate. All discovery was to be completed by the parties before March 15, 1998;
plaintiff's proposed pretrial order was to be served on the defendants by May 5,
1998; the final pretrial order was to be submitted to the court by May 19, 1998; and a
trial was scheduled for May 26, 1998. The District Court alerted everyone that
deadlines would be strictly followed. Thus, the scheduling order expressly stated that
there would be no changes absent a showing of good cause in writing and supported
by affidavit.

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¶11. Bader was represented by three different lawyers at various times from the time
this litigation began through August 1997. In late August 1997, his lawyer who was
representing him withdrew from the matter because Bader wished to file a claim
against attorney Bartlett and the lawyer felt he had a conflict. Shortly thereafter,
Bader began appearing pro se. Representing himself, Bader proceeded to file
pleadings on his own behalf, many of which were quite sophisticated. He also filed an
action pro se against attorney Bartlett. He then moved to consolidate the action to
this cause. On December 2, 1997, Bader filed his expert witness list which he
amended the next day.

¶12. Bader's deposition, noticed on January 28, 1998, was to take place on March 2,
1998. On February 23, 1998, Bader requested an extension of discovery and asked
that his March 2, 1998, deposition be rescheduled because he was in the process of
retaining counsel; his fourth to represent him in this litigation. While his motion to
extend discovery was pending, Bader failed to appear at the stated time for his
deposition. When he did appear two hours late, he refused to be sworn or produce
the documents that were requested in the deposition notice. Bader insisted on being
present pro se for the depositions of attorney Bartlett and Nelson, however, which
were scheduled on the same day.

¶13. On March 10, 1998, John Hud, a licensed attorney in Montana and California,
appeared as counsel of record for Bader. On March 12, 1998, Hud filed a brief in
support of Bader's previously filed motion to extend discovery. Bader's motion to
extend discovery was denied.

¶14. SCRI and Nelson moved for Rule 37(d), M.R.Civ.P., sanctions against Bader
based on Bader's failure to timely appear at his March 2, 1998, deposition. The
District Court sanctioned Bader and ordered him to pay attorney fees and costs
incurred by all counsel who attended the March 2, 1998, deposition in addition to any
future fees and expenses associated with his rescheduled deposition.

¶15. On April 10, 1998, Hud moved to continue the trial date because of his busy
California trial schedule. In his motion, he stated that it would be impossible for him
to adequately prepare for trial without more time because he already was committed
to other trials in California that would require his attention through April and into
May. He recognized that without a reasonable continuance he "could become a
potential Defendant in a future malpractice action."

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¶16. In a May 5, 1998, order the District Court denied the motion for a trial
continuance, noting that the case had been in litigation for over eight years and that
although Bader was without counsel for a period of time, the court concluded that he
was not prejudiced because he had demonstrated legal sophistication in representing
himself. The court concluded that Bader's selection of an attorney whose schedule
conflicted with the trial date, combined with Bader's late motion to postpone the
trial, was an attempt to avoid a resolution of the matter. Bader next attempted to
overturn the District Court's denial of a continuance by filing a petition for writ of
supervisory control with this Court. We denied his petition.

¶17. On May 11, 1998, the District Court issued an order requiring the filing of a
pretrial order by May 19, 1998, and reaffirmed the firm trial setting of May 26, 1998.
Also on May 11, 1998, Hud, on Bader's behalf, filed a document entitled, "Plaintiff,
Counterclaimant Ronald L. Bader's Explanation for Noncompliance with Rule 5
Uniform District Court Rules." The document essentially informed the court that
neither Bader nor his attorney were able to prepare and serve a pretrial order as
required by the District Court's order.

¶18. On May 14, 1998, SCRI and Nelson requested the court to reconsider its prior
request for sanctions and to default Bader for his refusal to assist in the preparation
of the pretrial order, pursuant to Rule 16(f), M.R.Civ.P., explaining that monetary
sanctions are insufficient to remedy a situation where a client and his attorney simply
ignore scheduling and discovery orders. In the interest of a timely ruling, the District
Court requested Bader and Hud to fax their response. On the morning of the trial,
May 26, 1998, the District Court entered an order imposing the sanction of a default
judgment against Bader. The District Court concluded that the severity of the
sanction was necessary based on Bader's unwillingness to assist in the preparation of
the case for a timely trial resolution.

¶19. The District Court thereafter permitted SCRI to file an affidavit, upon which
the court based its findings of fact and conclusions of law in favor of SCRI and
Nelson's counterclaim on June 4, 1998. The District Court declared Bader's life
estate null and void. In a separate June 4, 1998, judgment, the District Court
dismissed Bader's claim for contribution against Hash, O'Brien and Bartlett and
attorney Bartlett on the basis of the default judgment.

¶20. Bader appeals the District Court's May 26, 1998, entry of default judgment, and

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both June 4, 1998, judgments.

STANDARD OF REVIEW

¶21. This Court has consistently held that the imposition of sanctions lies within the
broad discretion of the district court. Our standard of review of sanctions imposed
for a lack of compliance with discovery procedures under Rule 37 is whether the
district court abused its discretion. See McKenzie v. Scheeler (1997), 285 Mont. 500,
506, 949 P.2d 1168, 1172; Smith v. Butte-Silver Bow County (1996), 276 Mont. 329,
333, 916 P.2d 91, 93. Similarly, we apply an abuse of discretion standard when we
review a district court's imposition of sanctions under Rule 16. See McKenzie, 285
Mont. at 507, 949 P.2d at 1172; Eastern Livestock Co., Inc. v. O'Neal (1997), 285
Mont. 90, 97, 945 P.2d 931, 935-36. Simply stated, the trial judge "is in the best
position to know whether parties are disregarding the rights of opposing parties in
the course of litigation and which sanctions for such conduct are most appropriate."
McKenzie, 285 Mont. at 506, 949 P.2d at 1172; see also Smith, 276 Mont. at 332, 916
P.2d at 93 (quoting Dassori v. Roy Stanley Chevrolet Co. (1986), 224 Mont. 178, 180,
728 P.2d 430, 431).

¶22. We review a district court's findings of fact and conclusions of law on sanctions
to ascertain whether they are supported by substantial credible evidence. See Morris
v. Big Sky Thoroughbred Farms, Inc., 1998 MT 229, ¶ 20, 965 P.2d 890, ¶ 20, 55 St.
Rep. 957, ¶ 20; Searight v. Cimino (1988), 230 Mont. 96, 101, 748 P.2d 948, 950-51.

DISCUSSION

¶23. In recent cases involving sanctions for discovery abuse or for failure to comply
with a scheduling order, we have focused on two concerns: whether there was an
actual abuse of or failure to comply with the judicial process, and whether the
severity of the sanction was appropriate. See McKenzie, 285 Mont. 500, 949 P.2d
1168; Smith, 276 Mont. 329, 916 P.2d 91. When considering the appropriateness of
the sanction, we stated that "[t]he extent of the 'consequences' imposed by a district
court . . . should relate to the extent and nature of the actual . . . abuse and the extent
of the prejudice to the opposing party which result[ed] therefrom." McKenzie, 285
Mont. at 515, 949 P.2d at 1177; Smith, 276 Mont. at 339-40, 916 P.2d at 97.

¶24. In the case sub judice, the District Court recognized our recent pronouncement

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in McKenzie and then analyzed the issues along guidelines set forth in several federal
court opinions. The District Court considered five factors: (1) its interest in
expeditiously resolving the case; (2) the degree of prejudice caused by Bader's
actions; (3) whether Bader had sufficient warning of a sanction; (4) Bader's and
Hud's culpability; and (5) the availability of lesser sanctions. Cf. Jones v. Thomas
(10th Cir. 1993), 996 F.2d 261, 264; Thompson v. Housing Authority of City of Los
Angeles (9th Cir. 1986), 782 F.2d 829, 832, cert. denied (1986), 479 U.S. 829, 107 S. Ct.
112, 93 L. Ed. 2d 60; Henderson v. Duncan (9th Cir. 1986), 779 F.2d 1421, 1423. We
have applied similar factors when determining whether a district court abused its
discretion by dismissing an action for a failure to prosecute, pursuant to Rule 41(b),
M.R.Civ.P. See Becky v. Norwest Bank Dillon, N.A. (1990), 245 Mont. 1, 8, 798 P.2d
1011, 1015. In cases involving a discovery abuse, pursuant to Rule 37(d), M.R.Civ.P.,
or a failure to comply with a scheduling order, pursuant to Rule 16(f), M.R.Civ.P.,
we have stated that the proper standard of review is whether the District Court
abused its discretion. See McKenzie, 285 Mont. at 506-07, 949 P.2d at 1172. Here, the
District Court determined that Bader refused to comply with the court's scheduling
order and refused to assist in the preparation of the pretrial order. On that basis, the
District Court entered Bader's default. We review the court's determination of
Bader's noncompliance and the propriety of its default sanction.

ISSUE 1

¶25. Did the District Court abuse its discretion when it sanctioned Bader with a
default judgment?

¶26. The imposition of sanctions for failure to comply with the rules of discovery are
regarded with favor. See McKenzie, 285 Mont. at 506, 949 P.2d at 1171-72; Huffine v.
Boylan (1989), 239 Mont. 515, 517, 782 P.2d 77, 78 (citing Owen v. F.A. Buttrey Co.
(1981), 192 Mont. 274, 279, 627 P.2d 1233, 1236). We have stated that an abuse of
discovery procedures which results in needless delay of a case should not be dealt
with leniently. See McKenzie, 285 Mont. at 506, 949 P.2d at 1171; Smith, 276 Mont. at
332, 916 P.2d at 92-93 (citing Owen, 192 Mont. at 277-78, 627 P.2d at 1235). The
purpose of sanctions allowed in Rule 37, M.R.Civ.P., is to deter parties from being
unresponsive to the judicial process. See McKenzie, 285 Mont. at 508, 949 P.2d at
1172; Huffine, 239 Mont. at 517, 782 P.2d at 78 (quoting Landauer v. Kehrwald
(1987), 225 Mont. 322, 325, 732 P.2d 839, 841).

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¶27. A cursory review of the caption of this case suggests its complexity; this was a
case with multiple parties, represented by multiple attorneys, which included
numerous third-party complaints and counterclaims. On August 1, 1997, after the
matter had been pending for over seven years, the District Court recognized the need
to take control and set forth a scheduling order which in certain terms made it clear
to the parties and their counsel that a trial would take place on May 26, 1998. The
court set aside ten days for a jury trial in another judicial district.

¶28. In August 1997, Bader's counsel withdrew and Bader began representing
himself pro se. This was apparently the third time Bader changed attorneys. Bader,
obviously well versed in legal matters, proceeded on with the litigation, filing briefs
and pleadings, and initiating another law suit, all done pro se. Early in 1998, with the
trial approaching, Bader's deposition was noticed. Bader then let it be known that he
wanted to be represented again by counsel. When his deposition was scheduled,
Bader failed to appear at the stated time. However, when he finally did appear two
hours late, pro se, he refused to be sworn or examined. He also failed to produce the
documents which were included in the deposition notice.

¶29. When Bader's counsel finally entered an appearance, he essentially took the
position that his schedule took precedence over the District Court's and refused to
participate in the preparation of a pretrial order. Hud was clearly on notice at the
time he entered his appearance that the District Court intended to strictly abide by
the scheduling order; the order so stated.

¶30. Bader argues that the District Court assumed that his lack of response to the
judicial process was purposeful when, in fact: he contacted several attorneys who
would not represent him, leaving Hud as his only choice for legal representation; and
when he did everything he could to keep up with the court's schedule.

¶31. In any decision to impose a sanction, the trial judge must evaluate a litigant's
conduct and decide at what point it becomes sanctionable. The District Court is in a
better position to consider the circumstances and decide questions of good faith in
such situations. See McKenzie, 285 Mont. at 515, 949 P.2d at 1177. Here the District
Court determined that there was no hard evidence in the record of Bader's alleged
attempts to obtain different counsel. We conclude that the District Court did not
abuse its discretion.

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¶32. Next, Bader asserts that the District Court failed to provide him a direct
warning of the sanction of default. Included in the list of factors to consider for a
sanction based on a failure to prosecute is whether the District Court warned the
appellant that the case was in danger of dismissal. See Becky, 245 Mont. at 8, 798
P.2d at 1015. However, in McKenzie, 285 Mont. at 511-12, 949 P.2d at 1175, we
recognized that Rule 16(f), M.R.Civ.P., does not require that a party be given notice
before a sanction is made for a failure to obey a scheduling order. Similarly, Rules 37
(d) and 37(b)(2)(C), M.R.Civ.P., do not require notice. Nonetheless, in Smith, 276
Mont. at 340, 916 P.2d at 97, we declared that where a court expressly warns of the
consequences to follow from a party's failure to comply, the court should impose
sanctions accordingly. We were concerned in Smith that the District Court imposed
consequences much more severe than those of which it had expressly warned. See
Smith, 276 Mont. at 339, 916 P.2d at 97.

¶33. Notwithstanding whether a notice requirement exists, we conclude that Bader
received sufficient warning that he could be subject to a default judgment for his
failure to comply with the scheduling order. Given the District Court's May 5, 1998,
order denying Bader's motion for a continuance and its May 11, 1998, order
requiring him a second time to file a pretrial order, Bader had notice that the court
fully expected him and his attorney to proceed to trial as scheduled. Finally, when the
District Court imposed a monetary sanction against Bader, then requested Bader
and his attorney to respond to Soup Creek's motion to reconsider sanctions, Bader
was afforded an opportunity to modify his position and assist in the trial preparation.

¶34. Bader did not modify his position throughout the course of events and, as a
result, his actions caused prejudice to the other parties. The District Court noted that
Bader failed to disclose the contents of important documents, confused the legal
issues and hindered the opposing parties' abilities to develop an effective trial
strategy. The District Court's order, which scheduled the discovery process, was
meant to secure to all parties a "just, speedy, and inexpensive" determination of the
action, for which Montana's Rules of Civil Procedure are designed. See, e.g., Rule 1,
M.R.Civ.P.; Owen, 192 Mont. at 279, 627 P.2d at 1236. By violating the District
Court's scheduling order, Bader violated the rights of the opposing parties. We
conclude that Bader's refusal to be sworn and testify, and his refusal to produce
documents at his deposition was a direct affront to the authority of the court and
deprived the parties of benefits of discovery to which they were entitled.

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¶35. Bader relies on Becky, 245 Mont. at 8, 798 P.2d at 1015, in support of his
argument that he did not violate the opposing parties' rights because he did not cause
an unreasonable delay to the judicial process and because his reasons for needing
more time were not frivolous. However, as we noted in Becky, 245 Mont. at 8, 798
P.2d at 1015, "[a]n unreasonable delay raises a presumption of prejudice to the
defendant." In McKenzie, 285 Mont. at 516, 949 P.2d at 1177, we reiterated that "[w]
hen a party's failure to comply with discovery procedures effectively halts the
discovery process, it results in impermissible prejudice to the opposing party."

¶36. In summary, we conclude that the District Court did not abuse its discretion
when it sanctioned Bader with a default judgment. We have recognized that "[t]he
trial judge is in the best position to know which parties callously disregard the rights
of their opponents and other litigants seeking their day in court," and that "[t]he
trial judge is also in the best position to determine which sanction is the most
appropriate." Eastern Livestock, 285 Mont. at 98-99, 945 P.2d at 936-37 (quoting
Eisenmenger v. Ethicon, Inc. (1994), 264 Mont. 393, 402-03, 871 P.2d 1313, 1319, cert.
denied (1994), 513 U.S. 919, 115 S. Ct. 298, 130 L. Ed. 2d 211). The District Court
appropriately recognized that any other sanction would have enabled Bader to enjoy
the status quo, benefit from the disregard of the court's order, cause considerable
turmoil with the court's and opposing counsels' schedules, and would have added to
the extensive burden this case caused on all the parties involved. The District Court
had no alternatives, given the continued nature of Bader's conduct so close to the
date set for trial.

ISSUE 2

¶37. Did Nelson's subsequent affidavit support the District Court's decision to
declare Bader's life estate null and void?

¶38. The District Court considered Nelson's affidavit, among other documents, in
making its findings of fact and conclusions of law. The court concluded that Bader's
life estate was a result of fraud and misrepresentation, and was without sufficient
consideration. As a result, the District Court declared Bader's life estate null and
void, dismissed all of Bader's claims against SCRI and Nelson with prejudice, and
reserved the issue of attorney fees and costs to be awarded to SCRI and Nelson.

¶39. On appeal, Bader argues that Nelson's affidavit failed to establish the nine

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elements of fraud by a preponderance of the evidence: (1) a representation; (2) its
falsity; (3) its materiality; (4) the speaker's knowledge of its falsity, or ignorance of
the truth; (5) the speaker's intent that it should be acted upon by the hearer and in
the manner reasonably contemplated; (6) the hearer's ignorance of falsity; (7) the
hearer's reliance upon its truth; (8) the hearer's right to rely thereon; and (9) the
hearer's consequent and proximate injury. See Cartwright v. Equitable Life Assurance
Soc'y of U.S. (1996), 276 Mont. 1, 23, 914 P.2d 976, 990.

¶40. It is important to note that at this juncture in the proceeding, Bader's default
was entered and he was unable to contest any material issues. We conclude that the
District Court's findings of fact and conclusions of law are supported in the record
presented, including the Nelson affidavit. Nelson, by affidavit, established that Bader
employed a scheme to hide his identity and interest in the Soup Creek Ranch to try to
avoid a forfeiture on the property as a result of his drug conviction. Not only did
Bader hide his true identity from others, he hid it from Nelson. Bader did not inform
Nelson of his drug conviction or the fact that he used his name, Bader, as an alias.
Nelson further established that neither Bader nor Bartlett informed her of the
purpose of the real estate documents she signed, namely the documents that allegedly
granted Bader a life estate. In addition, Nelson was prepared to set forth expert
testimony that these documents were highly unusual and did not conform to
standard real estate practices. We conclude that there was substantial credible
evidence to determine that Bader made a material misrepresentation of the facts
designed to induce Nelson to purchase the Soup Creek Ranch for his benefit. Bader
had knowledge of his misrepresentation and intended for Nelson to act upon it.
Nelson was unaware of the truth and would have suffered significant financial injury.

¶41. Bader argues that the damages entered against him were inappropriate and
excessive. Bader suggests that he was willing to restore to Nelson any unreimbursed
amount she invested in the Soup Creek Ranch. He further suggests that there was
little amount, if any, that Nelson had not already been reimbursed in her investment
given the tax benefits she received and the reduced purchase price she paid, and that
by being awarded full ownership of the Soup Creek Ranch she gained a windfall of
approximately $500,000. Bader makes his calculation based on numbers he
submitted to the District Court after it entered its findings of fact and conclusions of
law. Therefore, the District Court did not consider these numbers, nor do we here.
We conclude that the District Court did not err in its award of damages.

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¶42. Bader next contends that since SCRI was involuntarily dissolved in 1991,
pursuant to § 35-6-104, MCA, it cannot receive the benefit of the court's judgment.
However, since Bader had the opportunity to argue this before the District Court in
the course of litigation, but failed to do so, we cannot consider it here. We will not
address an issue presented for the first time on appeal. See Rasmussen v. Lee (1996),
276 Mont. 84, 88, 916 P.2d 98, 100.

¶43. Bader also contends the District Court's judgment violated his substantive due
process rights based on the common law that arbitrary, capricious, or unreasonable
governmental or judicial action is a violation of due process. He cites the United
States Constitution, and Article II, Section 17, of the Montana Constitution, to
implicate a state court's action. As we previously stated, however, we conclude that
the District Court's award of damages was appropriate. Therefore, we further
conclude that Bader suffered no deprivation of his state and federal constitutional
rights.

¶44. Although Bader does not present a specific issue as to the District Court's
separate June 4, 1998, judgment in which it dismissed his claim for contribution
against Hash, O'Brien & Bartlett and attorney Bartlett on the basis of the default
judgment, he refers to it in his argument on appeal. He states in his brief that the
District Court had no justification for a dismissal of his claim against the attorney
defendants. Certainly the attorney defendants were similarly impacted by Bader's
refusal to abide by the District Court's orders. Thus, we affirm the default judgment
entered against Bader and in favor of the attorney defendants and the District
Court's findings of fact and conclusions of law as to these defendants as well.

¶45. In conclusion, we affirm the District Court's order entering a default judgement
and its findings of fact and conclusions of law. We remand for further proceedings.

/S/ JIM REGNIER

We Concur:

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 No

/S/ J. A. TURNAGE

/S/ WILLIAM E. HUNT, SR.

/S/ TERRY N. TRIEWEILER

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