Stockman Bank of Montana v. Potts

• Decision Date: 04 April 2006
• Docket Number: No. 04-639.,04-639.
• Citation: 2006 MT 64,132 P.3d 546
• Parties: STOCKMAN BANK OF MONTANA, a Montana banking corporation, Plaintiff, Respondent and Cross-Appellant, v. Rick POTTS, Defendant and Appellant.
• Court: Montana Supreme Court

132 P.3d 546

2006 MT 64

STOCKMAN BANK OF MONTANA, a Montana banking corporation, Plaintiff, Respondent and Cross-Appellant, v. Rick POTTS, Defendant and Appellant.

No. 04-639.

Supreme Court of Montana.

Submitted on Briefs May 31, 2005.

Decided April 4, 2006.

COPYRIGHT MATERIAL OMITTED

Patricia D. Peterman and W. Scott Green, Patten, Peterman, Bekkedahl & Green, P.L.L.C., Billings, for Appellant.

Gerald B. Murphy and Gerry Fagan, Moulton, Bellingham, Longo and Mather, P.C., Billings, for Respondent.

WARNER, Justice.

¶ 1 Rick Potts (Potts) appeals from an order of the Thirteenth Judicial District Court, Yellowstone County, denying his motion for a new trial. Stockman Bank of Montana (Bank) cross-appeals a jury instruction and admission of expert testimony offered by Potts regarding the measure of damages for loss of cattle. We affirm. Thus, we do not consider the Bank's cross-appeal.

¶ 2 We restate and address the issues on appeal as follows:

¶ 3 1. Did the District Court err in establishing the order of trial?

¶ 4 2. Did the District Court err in excluding evidence of the Bank's offers to settle?

¶ 5 3. Did the District Court err when it did not provide the jury with a transcript of the testimony of a witness?

¶ 6 4. Must a new trial be granted because the Bank's counsel made a remark about a witness to the judge?

¶ 7 5. Did the District Court err because it refused to allow Potts' former spouse to testify?

¶ 8 6. Did the District Court err when it instructed the jury concerning admitted facts?

¶ 9 7. Did the District Court err by instructing the jury how to decide the case?

BACKGROUND

¶ 10 This is the third time this case has come before this Court. For a more complete statement of the facts, see Stockman Bank of Mont. v. Potts, 2002 MT 178, 311 Mont. 12, 52 P.3d 920 (Stockman Bank I). In Stockman Bank I, we determined that a question of fact existed as to whether a purported settlement agreement was contingent on Potts receiving a loan from another bank. Stockman Bank I, ¶¶ 23, 26. We reversed the District Court's order granting summary judgment to the Bank and remanded for further proceedings. Stockman Bank I, ¶ 27.

¶ 11 On remand, the District Court scheduled an evidentiary hearing to resolve the case. Potts demanded a jury trial, and applied to this Court for a writ of supervisory control to stay the scheduled hearing. By Order of October 21, 2003, entered in Case No. 03-600, State of Mont. ex rel. Potts v. District Court, 2002 MT 178, 311 Mont. 12, 52 P.3d 920 (2003) (Stockman Bank II), this Court granted Potts' application for supervisory control and directed the District Court to try the case to a jury.

¶ 12 Following a nine-day trial, the jury determined that Potts had settled all his claims against the Bank in January of 2000. Potts moved for a new trial, which motion was denied. This appeal followed. Additional facts will be discussed as necessary.

STANDARD OF REVIEW

¶ 13 This Court reviews a denial of a motion for a new trial to determine whether the district court manifestly abused its discretion. Rolison v. Bozeman Deaconess Health Servs., Inc., 2005 MT 95, ¶ 13, 326 Mont. 491, ¶ 13, 111 P.3d 202, ¶ 13. Discretionary trial court rulings are reviewed to determine whether the district court abused its discretion. In re Marriage of Schoenthal, 2005 MT 24, ¶ 9, 326 Mont. 15, ¶ 9, 106 P.3d 1162, ¶ 9. The same standard is used to review a district court's evidentiary rulings. Payne v. Knutson, 2004 MT 271, ¶ 20, 323 Mont. 165, ¶ 20, 99 P.3d 200, ¶ 20. This Court reviews a district court's decision to disallow a jury's request to re-hear testimony for an abuse of discretion. State v. Thompson, 2001 MT 119, ¶ 16, 305 Mont. 342, ¶ 16, 28 P.3d 1068, ¶ 16. This Court gives district courts great leeway in instructing the jury, and we will overturn a jury instruction only in the case of an abuse of discretion. Payne, ¶ 14.

DISCUSSION

ISSUE ONE

¶ 14 Did the District Court err in establishing the order of trial?

¶ 15 Potts argues that the District Court erred in not allowing him to present his counterclaim that the Bank breached its contract with Potts to the jury before the Bank presented its case. Potts contends that he should have been able to present his case first because the Bank was defending against his counterclaim rather than seeking an affirmative judgment. Potts relies on § 25-7-104, MCA, and Continental Oil Co. v. Bell (1933), 94 Mont. 123, 21 P.2d 65.

¶ 16 Contrary to Potts' assertion, the Bank sought an affirmative judgment. In its original complaint, filed February 2, 1999, as well as its amended complaint, filed April 3, 2001, the Bank asserted that Potts breached his contract with the Bank. The amended complaint added a second claim that the dispute with Potts had settled, and that the rest of the case should be dismissed because of the settlement. The Special Verdict Form submitted to the jury listed both claims, asking the jury to decide whether Potts and the Bank had both settled all their claims in January 2000, and also whether Potts had breached his contract with the Bank. The Special Verdict Form first asked whether Potts and the Bank settled all claims, and instructed the jury that if they answered this question affirmatively, they did not need to go further. The jury answered "yes" to the first question.

¶ 17 Section 25-7-104, MCA, reads as follows:

Where the defendant interposes a counterclaim and thereupon demands an affirmative judgment against the plaintiff, the mode of trial of an issue of fact arising thereupon is the same as if it arose in an action brought by the defendant against the plaintiff for the cause of action stated in the counterclaim and demanding the same judgment.

This statute does not require that proof of Potts' counterclaim precede the Bank's case. Similarly, Continental Oil holds that a counterclaim can be tried in the same proceeding as the original claim, 94 Mont. at 132, 21 P.2d at 66-67, but does not discuss the order of presenting the claim and counterclaim at trial.

¶ 18 The order in which proof is admitted at trial is within the sound discretion of the trial court. State v. Snaric (1993), 262 Mont. 62, 69, 862 P.2d 1175, 1179; State v. White (1980), 185 Mont. 213, 217, 605 P.2d 191, 194. Section 25-7-301, MCA, also allows the trial court discretion regarding the order of trial "for good cause and special reason." It was incumbent on the Bank to affirmatively prove its claim that all issues between it and Potts had settled. This could be considered a claim as well as a defense against Potts' counterclaim. Ordering the trial so that the jury considers whether Potts' counterclaim had been settled, before deciding the merits of the counterclaim, is a logical sequence for consideration of the issues. Under the present circumstances, the District Court did not abuse its discretion in setting the order of trial.

ISSUE TWO

¶ 19 Did the District Court err in excluding evidence of the Bank's offers to settle?

¶ 20 Potts claims error because the District Court excluded argument concerning Orders issued by the District Court on April 1, 2000, and statements made by the Bank's attorney on March 30, 2000, and excluded from evidence a statement made by the Bank's attorney contained in a memorandum submitted to the District Court on December 18, 2000. To delineate these matters, we describe them as the "Orders," the "$75,000 Question," and the "Memorandum." These constitute the following:

1. Two orders issued by the District Court on April 1, 2000, as the result of a status conference held on March 30, 2000 (Orders). These Orders vacated the scheduled trial and ordered the parties to arrange and conduct a settlement conference. One of the Orders stated that the attorneys for the parties had advised the court that a settlement conference was advisable.

2. Statements made by counsel for the Bank at an attorneys' meeting after the status conference on March 30, 2000. These statements included a question by Bank's counsel to Potts' counsel asking whether the case could settle for $75,000 ($75,000 Question).¹

3. A Motion and Memorandum filed by the Bank on December 18, 2000, wherein counsel for the Bank advised the District Court that the parties had yet to fully explore settlement (Memorandum).

¶ 21 The judgment roll and transcript present a singularly confusing record of how these statements were considered in the District Court. Unfortunately, the briefs by both parties only add to the confusion as they do not accurately describe the record.

¶ 22 Because of the confusion generated by the record, the briefs of both parties, and the subject matter of the present case, we recite more of the tortured record concerning these statements in order to address the issue presented.

¶ 23 On March 23, 2004, one day before the jury trial commenced, the Bank filed a motion to quash certain subpoenas that had been issued at Potts' request. The motion concerned, inter alia, the Memorandum noted above, and sought to exclude it from evidence. The District Court made no ruling on the Bank's motion to exclude the Memorandum before the jury was impanelled.

¶ 24 The trial began the next day and continued until April 7, 2004. On March 26, 2004, during the trial, the Bank filed two motions in limine regarding the statements in issue. The first focused on the $75,000 Question. In this first motion, the Bank argued that the $75,000 Question was an inadmissible offer of compromise under Rule 408, M.R.Evid. The Bank's second motion in limine sought to preclude Potts from asserting, arguing or otherwise mentioning the Memorandum. The Bank, in support of this second motion in limine, argued the Memorandum must be excluded pursuant to Rule 403, M.R.Evid.

¶ 25 The District Court had not ruled on the Bank's motions in limine by March 31, 2004. On that day, the Bank concluded its direct examination of Patrick Kelly (Kelly). Kelly was an attorney who had previously...