NO. 94-583

IN THE SUPREME COURT OF THE STATE OF MONTANA

1995

CHARLES R. TAYLOR,

Petitioner and Appellant,

APPEAL FROM: District Court of the Sixth Judicial District,

In and for the County of Park,

The Honorable Byron L. Robb, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Karl Knuchel, Attorney at Law,

Livingston, Montana

For Respondent:

K. Amy Pfeifer, Special Assistant Attorney

General Department of Social and

Rehabilitation Services, Child Support

Enforcement Division, Helena, Montana

Filed:

Submitted on Briefs: April 6, 1995

Decided: July 6, 1995

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ordered to pay child support in the amount of $125 per month per

child. In 1982, after the dissolution, Marilyn and the three

children moved from the family home in Livingston to Texas.

In January 1984, the couple's son, Randy, moved back to

Montana to live with his father, and continued to live with him

until he reached the age of majority. The couple's oldest

daughter, Amy, moved back and forth between Texas and Montana

periodically. However, she lived primarily with her maternal

grandparents in Livingston from May 1985 until she reached the age

of majority on December 30, 1990. The couple's youngest daughter,

Jennifer, resided with her mother, except for periodic visits with

Charles, until September 1992, when she moved back to Montana to

permanently reside with Charles.

In 1992, the Texas Attorney General's Office requested the

CSED to pursue an income withholding proceeding against Charles

pursuant to 55 40-5-202, -412, MCA, to collect child support

payments which Marilyn alleged were past due and remained unpaid.

Charles was sent notice of the CSED's intent to withhold money from

his earnings; however, he disputed the amount claimed and requested

a hearing pursuant to § 40-5-414, MCA. At the time of his request

for a hearing, he also requested that it be "in-person." In

reliance on 46.30.607(l), ARM, the Administrative Law Judge denied

Charles' request for an "in-person" hearing, but granted him leave

to resubmit his motion following a telephonic hearing if he could

establish substantial prejudice.
The administrative hearing was held on October 18, 1993, by

telephone. The Administrative Law Judge presided from Helena;

Charles testified from his attorney's office in Livingston; Marilyn

testified from Garland, Texas; and Karen Trettin, an investigator

for the CSED, testified from her office in Helena. Jennifer and

Amy testified from other locations which were not specifically

identified. The quality of the telephonic connection was

apparently poor. Amy complained of being unable to hear the

others. They in turn complained of difficulty understanding her;

and at one time while Marilyn was talking, everyone had difficulty

identifying the speaker.

During the hearing, Marilyn and Charles basically agreed on

the whereabouts of their children since their dissolution, and

there was no apparent dispute regarding the amount that Charles did

or did not pay for child support since the dissolution.

The disputed issue between the parties was whether Charles'

child support obligation had been modified by an oral agreement in

1986. Charles testified that when Amy began living with her

grandparents, Randy was living with him, and Jennifer still resided

with her mother, the couple agreed not to exchange child support

payments since each parent had one child and the third child was

living elsewhere. He claimed that pursuant to the oral agreement,

and our decision in InreMarriageofSabo (1986), 224 Mont. 252, 730 P.2d

1112, Marilyn is estopped from claiming any further child support

obligation after that point in time.
Marilyn testified that she did agree to waive Charles'

obligation to pay support for Randy, but adamantly denied any other

agreement.

Amy and Jennifer both testified that there had been an

agreement similar to the one described by Charles, but that their

mother repudiated the agreement during an angry confrontation with

Charles at Randy's graduation.

The Administrative Law Judge found that Charles had not proven

by sufficient evidence the necessary basis for estoppel, but

concluded that Charles did not owe child support for Randy and

Jennifer during those periods of time when they lived with him. He

concluded that Charles owed $22,900 for past due support and

authorized the CSED to proceed with delinquency income withholding

pursuant to 5 40-5-415, MCA.

Charles did not renew his request for an "in-person" hearing

at the conclusion of his telephonic hearing, nor following issuance

of the Administrative Law Judge's decision. He did, however, raise

the denial of his original request on appeal to the District Court

as one basis for reversal of the administrative decision.

DISCUSSION

Did the District Court err when it affirmed the Administrative

Law Judge's denial of Charles' request for an "in-person" hearing?

Since this case involves the application of Montana law to

undisputed facts, we will review the District Court's application

of the law to determine if it was correct. In re Marriage of Barnard
(X994), 264 Mont. 103, 106, 870 P.2d 91, 93 (citing InreMarriageof

Burris (1993), 258 Mont. 265, 269, 852 P.2d 616, 619).

Charles contends that denial of his request for an "in-person"

hearing in favor of a telephonic conference call violated his right

to confront witnesses, which is guaranteed by Rule 611(e),

M.R.Evid., and our recent decision in Inre Murriageof Bonamarte (lYY4),

263 Mont. 170, 866 P.Zd 1132. He contends that he was adversely

affected by the denial of this right because the issues of whether

he owed past due support, and if so, how much, depended on whether

his child support obligation had been orally modified, and that

that determination depended upon the credibility of two witnesses

who directly contradicted each other.

Rule 611(e) is made applicable to administrative proceedings

pursuant to 5 2-4-612(2), MCA, which provides as follows: "Except

as otherwise provided by statute relating directly to an agency,

agencies shall be bound by common law and statutory rules of

evidence."

Rule 611(e), M.R.Evid., provides that:

Except as otherwise provided bv constitution, statute,

these rules, or other rules applicable to the courts of

this state, at the trial of an action, a witness can be

heard only in the presence and subject to the examination

of all the parties to the action, if they choose to

attend and examine.

(Emphasis added.)

III Bonamarte, we recently held that telephonic testimony was

inconsistent with this right to confront witnesses. We held that:

If the phrase "a witness can be heard only in the

presence and subject to the examination of all the

6
parties . .n is to have any meaning, then, in the

absence of a specific rule or statutory exception to the

contrary, the witness must be physically present in the

courtroom to testify personally at trial unless all

parties and the court agree to a different method of

examination which protects the parties' rights of

confrontation and cross-examination and, at the same

time, allows the fact finder to assess the witness' [s]

credibility, testimony and the evidence presented.

Here, it was impossible for the court to make a

determination as to the relative credibility of the

party-witnesses because it did not have an opportunity to

observe the testimony of both Mark and Judith. The

parties in a dissolution action often deliver conflicting

evidence, and it is the court's role to determine who is

the more credible witness. This can be accomplished most

effectively by observing each party's demeanor during

testimony.

Bonamarte , 866 P.Zd at 1135.

Furthermore, in Bonamarte, 866 P.2d at 1137, we followed Stateex

rel. Juvenile Dept. v. Gates (Or. 1987), 740 P.2d 217, 218, for the

conclusion that I" [tlhe opportunity to observe a witness is so

critical to judicial control and effective cross-examination that

its denial is manifestly prejudicial.'" We held that:

[T]he District Court abused its discretion in allowing

Judith to testify by telephone over objection at the

hearing on the merits. We reverse and remand for a new

trial in order to allow Mark a meaningful opportunity to

"confront" the witness and to effectively cross-examine

and in order to afford the opportunity for the trial

court to observe the witness and make its determination

as to her credibility.

Bonamarte , 866 P.2d at 1137.

The CSED first argues that Charles was barred from raising the

denial of an "in-person" hearing in District Court because he

failed to exhaust his administrative remedies, as required by

§ 2-4-702, MCA, when he did not renew his request for that type of

7
hearing at the conclusion of his telephonic hearing. nowever, we

conclude that if Charles had a right to an "in-person" hearing in

the first place, it was no remedy to require that he first incur

the substantial expense of participating in an adversarial

proceeding which was procedurally and statutorily defective before

he could assert that right. Based on the cost of modern

litigation, it is little consolation to a litigant that he or she

will be afforded procedural rights only after being forced to

participate in a proceeding during which they are denied.

The CSED next contends that there is an exception to the

confrontation requirement of Rule 611(e), M.R.Evid., where provided

by statute, and that this exception was recognized in Bonamarte. The

CSED points out that 5 40-5-414(3), MCA, authorizes "teleconferencing" in child support enforcement proceedings, and that

46.30.607(l), ARM, gives the Administrative Law Judge the

discretion to deny an "in-person" hearing unless substantial

prejudice can be shown at the conclusion of the telephonic hearing.

Section 40-5-414(3), MCA, provides that: "The administrative

hearing must be held by teleconferencing methods unless the obliqor

or the department expressly requests an in-person hearins before

the hearinq examiner." (Emphasis added.)

Section 46.30.607(l), ARM, provides that:

Administrative hearings, unless the hearing officer

expressly orders to the contrary, shall initially be

conducted by telephone conferencing methods. At the

request of a party and upon a showing that the party's

case was substantially prejudiced by the lack of an

in-person hearing, the hearing officer may, at the close
of a telephone hearing, grant a de nova in-person

hearing.

We conclude that § 40-5-414(3), MCA, provides no support for

the CSED's position. It provides that "in-person" hearings shall

be allowed where either party requests one. In this case, Charles

made such a request.

Furthermore, rules adopted by administrative agencies which

conflict with statutory requirements or exceed the authority

provided by statute, are invalid. Section 2-4-305(6), MCA; Boardof

Barbers v. BigSb Cokge (1981), 192 Mont. 159, 161, 626 P.2d 1269,

1270-71. Finally, 46.30.607(l), ARM, is not a rule "applicable to

the courts of this state," and therefore, could not justify the

proceeding in this case, even if it was validly enacted.

Section 40-5-414(3), MCA, provides, without qualification,

that an obliger is entitled to an "in-person" hearing when he or

she requests one. To accept the CSED's premise would require that

we ignore the plain language of that statute.

Based upon the right to confrontation provided in Rule 611(e),

M.R.Evid., our decision in Bonamarte, and § 40-5-414(3), MCA, we

conclude that when Charles requested an "in-person" hearing to

challenge the accuracy of the CSED's income withholding proceeding

he was entitled to an "in-person" hearing, and the District Court

erred when it affirmed the Administrative Law Judge's denial of

that request. We further conclude that because the amount of

Charles' past child support obligation depended on the existence or

absence of an oral modification agreement, pursuant to our decision

9
in Sabo, and since the determination of whether such an agreement

existed depended on the credibility of Charles and Marilyn--the two

principal witnesses--Charles' substantial rights were prejudiced by

the Administrative Law Judge's denial of his request for an

"in-person" hearing.

For these reasons, we reverse the order of the District Court;

we vacate the decision of the Administrative Law Judge; and we

remand this case to the District Court, and ultimately to the

administrative agency, for further proceedings consistent with this

opinion.

We concur:

Justices

10
July 6, 1995

CERTIFICATE OF SERVICE

I hereby certify that the following certified order was sent by United States mail, prepaid, to the

following named:

KARL KNUCHEL

Attorney at Law

P.O. BOX 953

LMNGSTON, MT 59047

A^--7y General

3075 N. Montana, Suite 112

Helena, MT 59604

PAT WASHAM

Office of Attorney General

3400 Carlisle, Suite 410

Dallas, TX 75204-1263

MARILYN J. TAYLOR

5226 Broadway ~Blvd., Apt. #2079

Garland, TX 75041

ED SMITH

CLERK OF THE SUPREME COURT

STATE OF MONTANA