Huebsch v

Huebsch v. Pegg

Decided March 10, 1998

(NOT TO BE CITED AS AUTHORITY)

No. 97-447

IN THE SUPREME COURT OF THE STATE OF MONTANA

1998 MT 48N

JOANNE HUEBSCH,

Plaintiff and Respondent,

v.

D. RICHARD PEGG and SHORELINE MARINE

CORPORATION, a Washington corporation,

Defendants and Appellants

APPEAL FROM: District Court of the First Judicial District,

In and for the County of Lewis and Clark,

The Honorable Jeffrey Sherlock, Judge presiding.

COUNSEL OF RECORD:

For Appellants:

Thomas S. Winsor and Michael Scott Winsor;

Winsor Law Firm; Helena, Montana

For Respondent:

Gary L. Davis; Luxan & Murfitt, PLLP;

Helena, Montana

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Huebsch v

Submitted on Briefs: February 5, 1998

Decided: March 10, 1998

Justice Trieweiler 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 Joanne Huebsch filed a complaint in the District Court for the

First Judicial District in Lewis and Clark County against D.

Richard Pegg to recover damages and unpaid wages which she alleged

were due based on her former employment relationship with Pegg. 

After a trial, a jury found in favor of Huebsch. Pegg moved for a

new trial. The District Court denied the motion. Pegg appeals

from the order denying his motion for new trial and from the

judgment of the District Court. We affirm the District Court.

¶3 Pegg raises six issues on appeal:

¶4 1. Did the District Court err when it allowed Huebsch to

allege breach of the covenant of good faith and fair dealing even

though the Wrongful Discharge From Employment Act preempts bad

faith claims when related to employment?

¶5 2. Did the District Court err when it allowed evidence of

the parties' affair and other sexual matters even though the claim

had not been previously submitted to the Human Rights Commission?

¶6 3. Did the District Court err when it allowed Huebsch to

present evidence of the parties' sexual relationship and Pegg's

overall business practices?

¶7 4. Did the District Court err when it allowed Pegg to

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proceed without counsel after the writs of attachment had allegedly

rendered him unable to obtain other counsel?

¶8 5. Did the District Court err when it refused to reject the

jury's special verdict?

¶9 6. Did the District Court err when it denied the motion for

new trial?

 FACTUAL BACKGROUND

¶10 In December 1992, D. Richard Pegg and his Shoreline Marine

Corporation purchased Frontier Town, a "resort" property near

Helena, which consisted of a bar, restaurant, gift shop, and

cabins. Joanne Huebsch, who had worked at Frontier Town since

1967, was retained by Pegg to manage the business. Among other

duties, she was responsible for all payroll and accounting.

P11 Pegg was married to Joan Pegg, who lived in Washington state. 

Shortly after he purchased Frontier Town he began a relationship

with Huebsch. Based on Pegg's promises to divorce his wife and

marry Huebsch, Huebsch sold her mobile home and moved into his

apartment at Frontier Town. Based on her relationship with Pegg,

Huebsch began to defer part of her wages in order to help the

struggling business. She also occasionally made loans to the

business.

¶12 In October 1994, Pegg's wife came to Frontier Town. A

confrontation occurred among the parties and Joan allegedly fired

Huebsch. Before she left, however, Huebsch demanded a note from

Pegg stating that he owed her $30,000, a figure which they had

discussed a few weeks before. The note provided that $15,000 be

paid within a week and that the remainder be paid in the form of

twelve post-dated checks. When Joan left Montana a few days later,

Pegg requested that Huebsch come back to live and work at Frontier

Town. She agreed to do so. On October 12, 1994, however, he

demanded that she surrender the accounting books and affirmed her

termination. He wrote a second note confirming the amount that he

owed her, and that he had paid her $5,000; at one point in the note

he referred to the amount as a loan, but then later, supposedly

after Huebsch demanded that he change the language, he described it

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as wages. Pegg paid Huebsch $5,500 before he stopped payment on

the remaining checks. 

¶13 On August 25, 1995, Huebsch filed a complaint in the District

Court to recover the remaining amount owed. The complaint made

four claims: (1) a statutory wage claim, including a claim for

attorney fees and costs; (2) a claim for the amount owed pursuant

to the notes; (3) a wrongful discharge claim which alleged a

special relationship, and included a claim for damages for

emotional pain and mental anguish; and (4) an intentional

infliction of emotional distress claim in which she sought special

and punitive damages. Pegg denied the allegations and asserted

that Huebsch had mismanaged the company's financial

responsibilities.

¶14 Huebsch feared that Pegg would sell Frontier Town and leave

the state and, therefore, she received from the District Court a

writ of attachment against the business. Due to the financial

constraints placed on Pegg as a result of the writ, the District

Court later released the writ. However, upon Huebsch's request, it

re-issued the writ on two subsequent dates, with additional terms

and conditions to ease the potential burden on Pegg. After the

second writ attached, counsel for Pegg withdrew, and Pegg proceeded

pro se through the trial.

¶15 Beginning on February 10, 1997, a four-day jury trial was

held. The District Court made significant attempts to accommodate

and assist Pegg during the proceedings; however, he made very few

objections during the trial. The jury returned a special verdict

in which it found that Huebsch was entitled to back wages in the

amount of $24,500. It denied all of her other claims for damages,

although it found that Huebsch incurred $1,900 in medical expenses

as a result of her discharge. On March 31, 1997, the District

Court issued a judgment against Pegg in the amount of $106,128.44,

which included a 110 percent penalty pursuant to Sec. 39-3-206,

MCA, interest, and attorney fees and costs pursuant to Sec.

39-3-214, MCA. By stipulation, the judgment did not include the

$1,900 awarded by the jury for medical costs.

¶16 Pegg filed multiple post-trial motions, including motions for

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rehearing and a new trial, and to set aside the judgment. On May

15, 1997, the District Court denied the motions.

 ISSUE 1

¶17 Did the District Court err when it allowed Huebsch to allege

breach of the covenant of good faith and fair dealing even though

the Wrongful Discharge From Employment Act preempts bad faith

claims when related to employment?

¶18 Pegg asserts that evidence of the parties' relationship in

support of the claim for bad faith should not have been allowed

because bad faith is preempted by Sec. 39-2-905(3), MCA, of the

Wrongful Discharge From Employment Act. He asserts that he was

prejudiced by admission of evidence of his relationship with

Huebsch.

¶19 However, when the wrongful discharge claim was submitted to

the jury, bad faith was never mentioned. In fact, the special

verdict form asked whether Pegg acted with malice toward Huebsch. 

Malice was a proper issue pursuant to Sec. 39-2-905(2), MCA. 

Furthermore, the jury ultimately denied the wrongful discharge

claim and awarded no damages for that claim, so that any error

related to that claim would have been harmless. Accordingly, we

conclude that reversible error did not occur as a result of this

issue.

 ISSUE 2

¶20 Did the District Court err when it allowed evidence of the

parties' affair and other sexual matters even though the claim had

not been previously submitted to the Human Rights Commission?

¶21 Pegg asserts that the District Court abused its discretion and

denied his substantial rights when it allowed evidence of the

parties' relationship. He contends that the matter should first

have been brought before the Human Rights Commission, and since it

was not, all evidence of the sexual relationship should have been

excluded.

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¶22 We find no legal or factual basis for his assertion. The only

authority he cites in support of his contention is Secs. 49-1-101,

et seq., MCA, which refers generally to human rights. Contrary to

Pegg's suggestion, however, we decline to hold that anytime a

sexual relationship between parties is related to a dispute between

the parties, the case becomes a civil rights issue that must first

go to the Human Rights Commission. We conclude that the District

Court did not err when it admitted evidence of the parties'

relationship, even though the matter had not first been presented

to the Human Rights Commission.

 ISSUE 3

¶23 Did the District Court err when it allowed Huebsch to present

evidence of the parties' sexual relationship and Pegg's overall

business practices?

¶24 It is well-established that the District Court has broad

discretion to determine whether evidence is relevant and

admissible. See Rafanelli v. Dale (1996), 278 Mont. 28, 45, 924

P.2d 242, 253. Absent an abuse of that discretion, we will not

overturn the District Court's determination. See Burlingham v.

Mintz (1995), 270 Mont. 277, 279, 891 P.2d 527, 529.

P25 Here, Pegg suggests that we apply the doctrine of plain error

to conclude that the proceedings were fundamentally unfair as a

result of the District Court's admission of this evidence. 

However, the evidence to which Pegg objects was offered in response

to allegations made by Pegg and was relevant to issues he raised. 

Accordingly, we conclude that the District Court did not abuse its

discretion when it admitted the evidence about which Pegg now

complains.

 ISSUE 4

¶26 Did the District Court err when it allowed Pegg to proceed

without counsel after the writs of attachment had allegedly

rendered him to obtain other counsel?

¶27 Pegg's principal contention is that his substantial rights

were denied and that the proceedings were fundamentally unfair as

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a result of "the improper match-up of a pro se litigant and an

experienced competent attorney." Among other things, he also

contends that the writs rendered him indigent so as to force him to

proceed pro se, and that he was denied his right to counsel.

P28 First, we reject Pegg's implication that it is per se plain

error for a district court to allow a party to proceed pro se

against an experienced attorney. The District Court advised Pegg

of the risk if he proceeded pro se and suggested that he obtain new

counsel. However, it is clearly a party's prerogative to represent

himself, and the record shows that Pegg believed he was capable and

prepared to do so. In addition, the District Court was lenient

toward Pegg during the proceedings and allowed him substantial

latitude when he questioned witnesses. Finally, a constitutional

right to counsel exists only in criminal matters. See Art. II,

Sec. 24, Mont. Const.

¶29 We also reject Pegg's contention that the District Court erred

when it issued the writs. The record shows that the District Court

tailored the writs so as not to unfairly cripple Pegg financially,

and that Pegg nonetheless failed at times to comply with the

conditions created for his benefit. In addition, the record also

shows that Pegg had an income and was neither indigent nor unable

to afford counsel as a result of the writs. Even if the writs

limited his ability to afford counsel, we refuse to hold here that

a plaintiff must defer her recovery and a district court must halt

its proceedings until a defendant is able to afford the counsel of

his choice. Accordingly, we hold that the District Court did not

err when it allowed the trial to proceed while the defendant

represented himself.

 ISSUE 5

¶30 Did the District Court err when it refused to reject the

jury's special verdict?

¶31 Pegg contends that the special verdict form was deficient on

its face because it was unclear which of the four claims the jury

would rely on as the basis for an award of medical expenses, and

that the District Court abused its discretion when it upheld the

special verdict. On that basis, he contends that the verdict was

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inconsistent and that it should be reversed. However, Huebsch

stipulated that the special verdict form, as it pertained to

medical costs, was improper on its face and waived the $1,900 jury

award for medical costs. Accordingly, the judgment did not include

an award for medical costs, and the error in the special verdict

form was of no consequence to the final verdict and award.

¶32 The jury rejected all of Huebsch's claims except for her wage

claim. The amount of the award was calculated based on the statute

that pertains to wage claims. Upon review of the record, we find

evidence to support the jury's findings. Furthermore, we conclude

that the portion of the special verdict form on which the jury and

the District Court relied to award Huebsch $24,500 is neither

unclear nor inconsistent. We therefore hold that the District

court did not err when it entered judgment based on the jury's

special verdict form.

 ISSUE 6

¶33 Did the District Court err when it denied the motion for new

trial?

¶34 The standard of review of a district court_s ruling on a

motion for a new trial is whether the court abused its discretion. 

See Hando v. PPG Industries, Inc. (1995), 272 Mont. 146, 149, 900

P.2d 281, 282. See also Brockie v. Omo Const., Inc. (1994), 268

Mont. 519, 525, 887 P.2d 167, 170; Estate of Spicher v. Miller

(1994), 260 Mont. 504, 506, 861 P.2d 183, 184. Pegg contends that

he should receive a new trial because a "manifest miscarriage of

justice has occurred." For all the reasons stated above, however,

we disagree. Accordingly, we conclude that the District Court did

not abuse its discretion. 

P35 We affirm the judgment of the District Court. Pursuant to

Sec. 39-3-214, MCA, Huebsch is entitled to her attorney fees and

costs on appeal. Accordingly, we affirm the District Court's award

in the amount of $106,128.44, and award Huebsch the additional

attorney fees and costs that she has incurred on appeal.

 /S/ TERRY N. TRIEWEILER

We Concur:

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/S/ J. A. TURNAGE

/S/ JAMES C. NELSON

/S/ W. WILLIAM LEAPHART

/S/ JIM REGNIER

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