In re Transfer Territory from Poplar Elementary Sch. Dist. No. 9 to Froid Elementary Sch. Dist. No. 65

• Decision Date: 17 September 2015
• Docket Number: No. DA 14–0776.,DA 14–0776.
• Citation: 381 Mont. 145,364 P.3d 1222
• Parties: In re the PETITION TO TRANSFER TERRITORY FROM POPLAR ELEMENTARY SCHOOL DISTRICT NO. 9 to Froid Elementary School District No. 65.
• Court: Montana Supreme Court

381 Mont. 145

364 P.3d 1222

In re the PETITION TO TRANSFER TERRITORY FROM POPLAR ELEMENTARY SCHOOL DISTRICT NO. 9 to Froid Elementary School District No. 65.

No. DA 14–0776.

Supreme Court of Montana.

Submitted on Briefs July 15, 2015.

Decided Sept. 17, 2015.

For Appellant: Jeffrey A. Weldon, Mary E. Duncan, Felt, Martin, Frazier & Weldon, P.C.; Billings, Montana.

For Appellee: Elizabeth A. Kaleva, Megan D. Morris, Kaleva Law Office; Missoula, Montana.

Justice JIM RICE delivered the Opinion of the Court.

¶ 1 Froid Elementary School District No. 65 (Froid) appeals from an order entered by the Fifteenth Judicial District Court, Roosevelt County, granting Poplar Elementary School District No. 9 (Poplar) a new hearing on Froid's petition to transfer territory from Poplar to Froid. We reverse and remand for further proceedings consistent with this opinion.

¶ 2 We address the following issue:

Did the District Court err when it held that the county superintendent abused his discretion by receiving unsworn statements as evidence in the territory transfer hearing?

PROCEDURAL AND FACTUAL BACKGROUND

¶ 3 On March 4, 2013, Froid's Board of Trustees and a group of registered electors in Roosevelt County petitioned the Roosevelt County Superintendent of Schools to transfer territory from the Poplar school district to the Froid school district. Poplar opposed the transfer. Pursuant to § 20–6–105(5), MCA, the county superintendent of schools was required to hold a hearing on the petition. Patricia Stennes, the Roosevelt County Superintendent, appointed Paul Huber to act as deputy superintendent for the purpose of hearing and deciding the petition. Poplar and Froid retained counsel for the matter.

¶ 4 Huber scheduled a hearing on the petition for April 4, 2013. Attorneys for Poplar and Froid objected to that date as being too soon. After conferring with the attorneys, Huber vacated the April 4th hearing date and reset the hearing for April 23, 2013.

¶ 5 On April 18, 2013, Huber wrote to counsel for Poplar and Froid to confirm the procedure to be followed during the hearing.

The procedure provided for, among other things, the opportunity for district representatives, taxpayers, and other interested parties to speak at the hearing, opening and closing statements by counsel, and the opportunity to cross-examine those who spoke at the hearing. The procedure did not require those who spoke to be placed under oath. Poplar did not object to the procedure.

¶ 6 The hearing was conducted on April 23, 2013. A court reporter was present to transcribe the proceedings. Huber received testimony from twenty-one individuals, some of whom were cross-examined by Poplar and Froid, but none of whom were placed under oath. Poplar did not object to the unsworn testimony.

¶ 7 After the hearing concluded, Huber left the administrative record open for one week, at Poplar's request. Poplar and Froid then submitted proposed findings of fact, conclusions of law, and orders. Poplar raised no objection to the unsworn testimony in its post-hearing submissions.

¶ 8 On June 11, 2013, Huber issued his findings of fact, conclusions of law, and order approving the territory transfer. Poplar appealed the decision to the District Court and, upon agreement by the parties, the matter was submitted on cross motions for summary judgment and briefing. Poplar contended (1) the territory transfer statute, § 20–6–105, MCA, is an unconstitutional delegation of legislative authority; (2) the Roosevelt County Superintendent violated Poplar's due process rights by appointing Huber as deputy; (3) Huber violated Poplar's due process rights by not allowing time for discovery, subpoena of witnesses, cross-examination of witnesses, and by admitting unsworn statements; and (4) Huber's decision to transfer territory from Poplar to Froid was an abuse of discretion. Froid argued that (1) the territory transfer statute, § 20–6–105, MCA, is constitutional; (2) the Roosevelt County Superintendent did not violate Poplar's due process rights by appointing Huber as deputy; (3) the parties were allowed to cross-examine witnesses, and Poplar had not preserved its claims regarding discovery, subpoena of witnesses, and admitting unsworn statements because it had made no objection at the administrative hearing; and (4) Huber's decision to transfer territory from Poplar to Froid did not constitute an abuse of discretion.

¶ 9 The District Court adopted Froid's positions on these issues, including that Poplar had waived many of its due process arguments. However, the court held that the territory transfer statute required statements to be made under oath and that Huber's failure to administer oaths was an abuse of discretion that could not be waived by Poplar, reasoning that "Waiver is not a defense to reversal for abuse of discretion. A party cannot waive a tribunal's obligation to act within bounds of reason and employ conscientious judgment." The District Court awarded summary judgment to Poplar and vacated Huber's findings of facts, conclusions of law, and order transferring territory to Froid. Because the District Court remanded for a new hearing, it did not reach the merits of the territory transfer issue. Froid appeals.

STANDARD OF REVIEW

¶ 10 We review an order from a district court acting in an appellate capacity to determine whether the district court reached the correct conclusions under the appropriate standards of review. Credit Service Co., Inc. v. Crasco,

2011 MT 211, ¶ 11, 361 Mont. 487, 264 P.3d 1061. The district court reviews the decision of the county superintendent to grant or deny a territory transfer petition for an abuse of discretion. Section 20–6–105(9), MCA. "An abuse of discretion occurs when a tribunal acts ‘arbitrarily without employment of conscientious judgment or exceed[s] the bounds of reason[,] resulting in substantial injustice.’ " In re Petition to Transfer From Dutton, 2011 MT 152, ¶ 7, 361 Mont. 103, 259 P.3d 751 (citing In re Marriage of Guffin, 2010 MT 100, ¶ 20, 356 Mont. 218, 232 P.3d 888 ). "A decision is arbitrary if it appears to be ‘random, unreasonable, or seemingly unmotivated, based on the existing record.’ " Dutton, ¶ 7 (citing Silva v. City of Columbia Falls, 258 Mont. 329, 335, 852 P.2d 671, 675 (1993) ).

DISCUSSION

¶ 11 Did the District Court err when it held that the county superintendent abused his discretion by receiving unsworn statements as evidence in the territory transfer hearing?

¶ 12 The basis for the District Court's holding was that § 20–6–105, MCA, requires statements given during a territory transfer hearing to be under oath, and that Huber's failure to administer oaths was an abuse of discretion. It is undisputed that Poplar failed to object to the unsworn statements prior to, during, or after the hearing. However, the District Court reasoned that "[w]aiver is not a defense to reversal for abuse of discretion" because "[a] party cannot waive a tribunal's obligation to act within bounds of reason and employ conscientious judgment." No authority was cited for this conclusion, but even if it was correct, it fails to properly distinguish the defense of waiver from a litigant's burden to preserve an issue for review. Although courts commonly use the two terms interchangeably—this court included—the questions of waiver and preservation for review require two different inquiries.

¶ 13 The initial inquiry is whether an issue has been properly preserved for review. An issue can be preserved in different ways, reflecting different kinds of proceedings. See Hunt v. K–Mart Corp., 1999 MT 125, ¶ 10, 294 Mont. 444, 981 P.2d 275 (timely and specific objection); Hulse v. DOJ, Motor Vehicle Division, 1998 MT 108, ¶ 46, 289 Mont. 1, 961 P.2d 75 (motion in limine); McDermott v. Carie, 2005 MT 293, ¶ 24, 329 Mont. 295, 124 P.3d 168 (motion for a new trial); State v. Lacey, 2009 MT 62, ¶ 22, 349 Mont. 371, 204 P.3d 1192 (motion to suppress). Unless a statutorily provided exception exists, or plain error is established, a reviewing court can consider only those issues that are properly preserved for its review. In re T.E., 2002 MT 195, ¶ 20, 311 Mont. 148, 54 P.3d 38 ("In order to preserve a claim or objection for appeal, an appellant must first raise that specific claim or objection in the [lower court]"). Otherwise, not only is it "fundamentally unfair to fault the [lower court] for failing to rule correctly on an issue it was never given the opportunity to consider," but it also permits a litigant, after receiving an undesirable result from the tribunal, to re-try his or her case on appeal. In re D.H., 2001 MT 200, ¶¶ 41, 306 Mont. 278, 33 P.3d 616 ; Rasmussen v. Sibert, 153 Mont. 286, 295, 456 P.2d 835, 840 (1969).

¶ 14 If a reviewing court concludes an issue is properly preserved for its review, it must then consider the preserved issue, including whether the opponent's defense of waiver has been established. "[W]aiver is the voluntary and intentional relinquishment of a known right, claim or privilege, which may be proved by express declarations or by a course of acts and conduct which induces the belief that the intent and purpose was waiver." Hurly v. Lake Cabin Dev., LLC, 2012 MT 77, ¶ 27, 364 Mont. 425, 276 P.3d 854 (internal citations and quotations omitted). While a claim may be properly preserved for judicial review, the claim may nonetheless have been waived by the party asserting error. See El Dorado Heights Homeowners' Ass'n v. Dewitt, 2008 MT 199, ¶ 16, 344 Mont. 77, 186 P.3d 1249 (where issue of lack of personal jurisdiction was preserved by motion for relief from a previous court order, but Court found defendant had waived claim of lack of personal jurisdiction by appearing multiple times in front of district court); Kloss v. Edward D. Jones & Co., 2002 MT 129, ¶ 22, 310 Mont. 123, 54 P.3d 1 (where issue of whether plaintiff had right to jury trial was preserved by motion to compel arbitration, and Court then examined whether plaintiff had waived right...