DA 06-0375 

### IN THE SUPREME COURT OF THE STATE OF MONTANA 2008 MT 153

IN THE MATTER OF TRUST B UNDER THE LAST WILL OF DeWITT C. DUNHAM WELLS FARGO BANK, N.A., Plaintiff and Appellant,

v. ZONA KAML AND RO SE PLOYHAR, Defendant and Appellees.

APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. 17534C, Honorable Kenneth R. Neill, Presiding Judge

COUNSEL OF RECORD: For Appellant: James R. Walsh, Smith, Walsh, Clarke & Gregoire, PLLP, Great Falls, Montana For Appellees: Alexander (Zander) Blewett III, Hoyt & Blewett, Great Falls, Montana Timothy J. Wylder, Attorney at Law, Great Falls, Montana

Submitted on Briefs: September 12, 2007 Decided: April 29, 2008 Filed:

__________________________________________ ClerkJustice Jim Rice delivered th e Opinion of the Court. ¶1 Appellant Wells Fargo Bank app eals an order of the Eighth Judicial District Court, Cascade County, granting Appellees Zona Kaml and Rose Ployhar’s M. R. Civ. P. 59 motion for a new trial. We affirm and remand. ¶2 We restate the issues on appeal as follows: ¶3 1. Did the District Court err by gran ting a new trial pursuant to § 25-11-102, MCA, which specifies the ground s for a new jury trial, rath er than § 25-11-103, MCA, which specifies the grounds fo r a new bench trial, and did its order fail to state the grounds for granting a new trial with su fficient particularity under Rule 59? ¶4 2. Are beneficiaries of a trust entitled to notice of entry of judgment of an order approving a trust accounting, pu rsuant to M. R. Civ. P. 77(d), and does a failure to provide such notice toll the time limit for filing post-judgment motions? ¶5 3. Did the District Court err by failing to apply the three-year statute of limitations applicable to trust proceedings under § 72-34-511, MCA, or alternatively, by failing to apply the doctrine of laches? ¶6 4. Did the District Court’s granting of a new trial violate § 72-35-206, MCA, which provides that final tr ust orders are “conclusive on all persons,” and therefore preempts motions under M. R. Civ. P. 52 and 59? ¶7 5. Did the District Court err by enforcin g the “prudent man rule” for a period of time during which no such rule existed under the Montana Code?

2FACTUAL AND PROCED URAL BACKGROUND ¶8 Appellees Zona Kaml (Zona) and Rose Ployhar (Rose) ar e two beneficiaries of a trust (Trust B) created by their grandfathe r, DeWitt C. Dunham, in a will executed on October 3, 1966. Dunham le ft over one million dollars in Trust B when he died, designating Wells Fargo’s predecessor, Norwest Bank Montana, as trustee (collectively, the Bank). The life beneficiary of Trust B was Dunham’s only child, Mary Ann Mushel (Mary Ann), who was to receive income from the trust for her life. Dunham’s four granddaughters, including Zona and Rose, were made discretionary income beneficiaries under Trust B during Mary An n’s life and will become vest ed remainder beneficiaries upon Mary Ann’s death. ¶9 Under the terms of Trust B, Mary Ann ha d the right to rece ive $15,000 annually, as well as additional payments of up to $10,000 an nually simply upon her request. In addition, the Bank was permitted, in its sole discretion, to pay Mary Ann such additional sums as it deemed necessary for her care, support, maintena nce, and general welfare. ¶10 Under the stern instruction of Mary Ann, the Bank invested virtually the trust’s entire principal in bonds to produce a higher current income which would be available to Mary Ann. For example, between 1978 and 1995 , 98.1 percent of the Trust B assets were invested in bonds and notes and the remain ing 1.9 percent was held in cash or cash equivalents. Throughout this time, the Bank was cognizant that investment in stock equities was an appropriate way to benefit the financial interests of, and fulfill its duty to, the remainder beneficiaries. Nonetheless, heed ing the stern instructions of Mary Ann, the Bank continuously declined to do so. Investing the trust assets exclusively in bonds

3resulted in Trust B missing the opportunity to pa rticipate in the long and sustained growth in equity values in the stock market during these years. ¶11 The Bank did not inform Z ona and Rose of their rights under the trust as remainder beneficiaries. In communications sent from the Bank’s attorneys and trust officers to Zona and Rose, Trust B was commonl y characterized as sole ly “for the benefit of Mary Ann.” Both Mary Ann and the Ba nk led Zona and Rose to believe that any payments they received from the trust were made at the discretion of Mary Ann. Although the Bank notified Zona and Rose that the trust a ssets were invested almost exclusively in bonds, the Bank did not explain to Zona and Rose the co nsequences of that investment strategy on their interests and expectations—expectati ons which they were largely uninformed about anyway. The Bank’s trust officer wrote to Zona and Rose in 1977 asking them to consent to investment of 100 percent of the trust’s assets in bonds, but he later acknowledged that he did not ad vise them that doing so would disadvantage their financial position. In a 1977 letter to Mary Ann, the Bank cautioned Mary Ann that “a trustee has a duty both to the income benefi ciary and to the remaindermen of the trust. We must be impartial as between these two cl asses of beneficiaries. ” However, although the Bank recommended to Mary Ann at that time that investments be made in common stocks, it never did so, and its acknowledged duty of impartiality was not reflected in investment decisions made thereafter. In 1997 , the trust officer wrote to Zona and Rose again asking them to agree to the trust’s exclusive investments in bonds, and he later explained that he did so to prevent the Bank from incurring liability for not investing in stocks. The letter to Zona and Rose stated th at Mary Ann “has alwa ys been very adamant

4that the investment objective for the account be 100 percent bonds. Ou r auditors feel that we should have something in writing from the remaindermen agreeing to this investment objective.” While Mary Ann di d eventually indicate to her daughters that the Bank considered stocks to be in th eir best interests, the Bank its elf never told Zona and Rose that investing exclusively in bonds was not in their best interest as remainder beneficiaries, and did nothing affirmativel y to protect their financial position. In response to Mary Ann’s instruction that “the trust was none of their business,” Zona and Rose wrote letters back to the Bank c onsenting to the investment strategy. ¶12 In 1995, the Bank presented its Fourth Acco unting of Trust B to the District Court for approval, encompassing a lengthy period of managing the trust assets from 1978 to 1995. Prior to the hearing, the Bank’s attorney notified Zona and Rose that they could attend the hearing, but that th eir presence was not required. Zona and Rose were given no explanation about the nature of this proceedi ng or the implications of failing to attend. The Bank’s Petition for Fourth Accounting request ed the District Cour t to determine that all of the acts of the Bank in managing Trus t B were “valid and proper” and stated that “the facts and matters contai ned [in the petition] are true, accurate, and complete to the best of [the Bank’s representative’s] knowle dge and belief.” However, the Bank did not advise the District Court of the disadvantage ous nature of its inve stment strategy for the remainder beneficiaries over this lengthy period. The Distri ct Court approved the Fourth Accounting on December 6, 1995. ¶13 Eventually, Zona and Rose ca me to realize that someth ing was not right, and hired an attorney to meet with th e Bank’s trust officer and discuss the Bank’s handling of the

5trust. At the meeting, it was pointed out that if 40 percent of the as sets had been invested in the stock market during the trust’s life, Trust B’s assets would then have been worth approximately ten million dollars. Instead, the trust assets were worth three million dollars. Wells Fargo was removed as trustee in 1998. ¶14 In February 2006, Zona and Rose filed a motion, pursuant to M. R. Civ. P. 59, seeking a new trial on the District Court’s approval of the Bank’s Third Accounting of Trust B, which covered the trust period be tween 1974 and 1978, and the Bank’s Fourth Accounting of Trust B, which covered the pe riod between 1978 and 1995. The District Court conducted proceedings from April 10 to 14, 2006, concerning Zona’s and Rose’s allegations against the Bank, and on April 21 , 2006, issued a preliminary order granting Zona and Rose’s motion for a new trial with respect to the Fourth Accounting only. The District Court indicated it was issuing a pre liminary order to comply with the sixty-day deadline to rule on the Rule 59 motion, and indicated it wo uld discuss its rationale in greater detail in a supplemental order to be issued later. However, the District Court provided a brief discussion of its reasoning “[f]or purposes of satisfying Rule 59(f),” concluding that § 25- 11-102(6), MCA, provid ed adequate grounds for a new trial, and also noting that its order sh ould not “be taken as an a ffirmative finding that other subsections of [§ 25-11-102, MCA], may not also be applicable.” ¶15 The District Court eventually issued very detailed findings of fact and conclusions of law on July 13, 2 006. However, in an or der entered on Septembe r 13, 2006, this Court held the District Court was w ithout jurisdiction to issue su ch findings because the present appeal had already been f iled and thus, the July 13, 2006, order was void. See September

613, 2006, Order Granting Appe llees’ Motion to Dismiss the Bank’s second appeal, Cause No. 06-0375. As such, the only rationale validly before this Court is that which is set forth in the District Court’s April 21, 2006, order, from whic h the Bank appeals. 1
DISCUSSION ¶16 1. Did the District Court err by gran ting a new trial purs uant to § 25-11-102, MCA, which specifies the grounds for a ne w jury trial, rather than § 25-11-103, MCA, which specifies the gr ounds for a new bench trial, and did its order fail to state the grounds for granting a new trial with sufficient particularity under Rule 59? ¶17 A new trial may be granted “f or any of the reasons provid ed by the statutes of the State of Montana.” M. R. Civ. P. 59(a). The statutory basis cited by the District Court in granting a new trial on the Fourth Accounti ng was § 25-11-102(6), MCA. Section 25-11- 102, MCA, provides: The former verdict or other decision ma y be vacated and a new trial granted on the application of the party aggrieve d for any of the following causes materially affecting the substa ntial rights of such party: (1) irregularity in the proceedings of the court, jury, or adverse party or any order of the court or abuse of di scretion by which either party was prevented from having a fair trial; (2) misconduct of the jury. . . . ; (3) accident or surprise wh ich ordinary pr udence could not have guarded against; (4) newly discovered evidence material for the party making the application which he could no t, with reasonable dilig ence, have discovered and produced at the trial;

1 The unique procedural posture of this case requires that we draw the necessary facts from the record, rather than from the District Court’s orde r. The recitation of facts herein is for purposes of this decision only, and is not meant to establish them for purposes of any further proceedings.

7(5) excessive damages appearing to have been given under the influence of passion or prejudice; (6) insufficiency of the evid ence to justify the verdic t or other decision or that it is against law; (7) error in law occurring at the trial and excepted to by the party making the application. When it based its decision on subsection (6), the District Court apparently failed to realize that only subsections (1), (3), and (4) of that statute provide a basis on which a new bench trial can be granted. Pursuant to § 25-11-103, MCA, “[n]o new trial may be granted in cases tried by the court without a jury , except on the grounds mentioned in subsections (1), (3), and (4) of 25-11-102.” As such, the Bank argues the District Court’s order granting a new trial violates § 25-1 1-103, MCA, and should be reversed. In response, Zona and Rose argue that the Bank failed to contest the a pplication of § 25-11- 102(6), MCA, at the District Court level and is barred from raising th e issue for the first time on appeal, or alternatively, that this C ourt should affirm the District Court on the basis of subsections (1), (3), or (4). ¶18 Although the Bank is correct that the District Court erred by citing § 25-11-102(6), MCA, as a basis for a new trial here, we nonetheless agree with Zona and Rose’s contention that sufficient grounds for a new trial also existed under subsection (4) of the statute. Indeed, the District Court expre ssly noted that a new trial could also be warranted under other subsec tions of the statute. T he District Court observed that the Fourth Accounting “raises an issue as to compliance with the ‘prudent man rule’ which was not addressed in the Order [Approving the Fourth Accounting],” noting that all of the

8trust assets were held in fixed income securities or cash for si xteen years. It further noted evidence that the trust officers themselves believed trust assets should have been invested in equities—information discovered afte r the original hearing. Further , it is apparent that the Bank engaged in misrepresentations and/or in adequate advisements to Zona and Rose about their rights and interests under the trust. For example, the Bank represented Trust B as existing for the benefit of Mary Ann, and led Zona and Rose to believe that any distribution they received under the trust was simply because Mary An n had approved it. Zona and Rose were not informed of the ri ghts held in their own stead. Moreover, the Bank’s investment strategy did not reflect Zona’s and Rose’s financial interests, and the Bank did not discuss with them the conse quences of investing only in bonds. The District Court was not provided with this information at the time of the Fourth Accounting. Likewise, it appears that Zona and Rose had not been apprised of their remainder interest in the trust at any time pr ior to that accounting, and were provided little, if any, information about the nature of the hearing on that accounting. ¶19 This newly discovered material ev idence satisfied, at a minimum, § 25-11-102(4), MCA, and warranted a new trial. Alt hough the District Court relied on the wrong subsection in support of its ho lding, it reached a proper re sult. “We will not reverse a district court when it reaches the right result, even if it reached that result for the wrong
reason.” Wells Fargo Bank v. Talmage , 2007 MT 45, ¶ 23, 336 Mont. 125, ¶ 23, 152 P.3d 1275, ¶ 23. ¶20 The Bank also argues that we should revers e the District Court because its order failed to specify the grounds fo r granting a new trial with su fficient particularity. Rule

959(f) of the Montana Rules of Civil Procedure requires that “[a]ny order of the court granting a new trial, shall specify the grounds therefor with sufficient particularity as to apprise the parties and the appellate court of the rationale underlying the ruling . . . .” According to the Bank , the Rule 59(f) requirement serves two purposes: to prevent this Court from having to second guess the District Court’s reasoning, and to ensure that the District Court engages in disciplined reasonin g when considering the claims before it. See Shannon v. Hulett , 202 Mont. 205, 206-07, 656 P.2d 825, 826 (1983). ¶21 We conclude that both purposes were serv ed by the District Court’s first order. The only reason a more detailed explanation is not part of the record is because the District Court incorrectly assumed that its su bsequent findings of fa ct and conclusions of law, which were very detailed, would become a part of its original order. However, the court’s rationale, set forth in its initial three- page order, was sufficient, even given the District Court’s erroneous reliance on § 25-11- 102(6), MCA, as the statutory basis for granting a new trial. The District Cour t expressed skepticism about the Bank’s compliance with the “prudent ma n rule” and mentioned the fact that all of the trust assets were held in fixed income securities or cash fo r sixteen years. In addition, the District Court noted that “testimony and documents pr oduced during the bifurcated trial held April 10 to 14, 2006 indicate that trust o fficers themselves believed that a significant portion of the trust assets should have been invest ed in equity securitie s, that is, the trust assets should have been invested in a divers ified portfolio.” The court concluded that the Fourth Accounting raised questions abou t the Bank’s actions “on its face.”

10¶22 Although not as comprehensive as its supplemental findings of fact and conclusions of law which were later voided by this Court, we conclude that the District Court’s rationale was sufficient to satisfy M. R. Civ. P. 59(f). The District Court explained its reasons for granting a new trial “with sufficient particularity as to apprise the parties and [this Court] of th e rationale underlying the ruling.” ¶23 2. Are beneficiaries of a trust entitl ed to notice of entry of judgment, pursuant to M. R. Civ. P. 77, and does a fa ilure to provide such notice toll the time limit for filing post-judgment motions? ¶24 The Bank argues that Zona and Rose’s motion for a new trial, made eleven years after the District Court’s order, was untimely a nd, therefore, the District Court could not reopen the 1995 trust accounting. Rule 59(b) of the Montan a Rules of Civil Procedure requires that a motion for a new trial be filed within ten days of service of the notice of entry of judgment pursuant to M. R. Civ. P. 77(d). However, Zona and Rose never received notice of the District Court’s entr y of the December 6, 1995 Order Approving the Fourth Accounting. Acco rding to the Bank, Zona an d Rose were not entitled to receive notice of entry of the District Court’ s order because they di d not “appear” at the hearing on the Fourth Accounting. M. R. Ci v. P. 77(d) requires service of a notice of entry of judgment or order upon “all pa rties who have made an appearance.” ¶25 In response, Zona and Rose argue they were entitled to receive notice of the District Court’s entry of the order because they were “indispensa ble parties” who had “appeared, as a matter of law,” and the Bank’s failure to notify them of such entry tolled the ten-day period for filing their Rule 59 motion for a new trial.

11¶26 Although this Court has not previously addressed whether notice of entry of judgment must be made to trust beneficiarie s after a formal trust proceeding, we have previously held that such notic e must be given to devisees at the conclusion of formal probate proceedings. In Matter of Estate of Holmes , 183 Mont. 290, 599 P.2d 344 (1979), the decedent’s will devised all of hi s property to the Sh riners Hospital and specifically stated that no provision be made for his immediate family. After Holmes’ death, a hearing was set on the personal representative’s petition to admit the will to probate, and notice of the hear ing was sent to the Shriners. However, the Shriners did not attend the hearing, and were no t served with notice of entry of the order entered by the court. That order declared two-thirds of the devise void under Montana’s Mortmain Statute (now repealed) in response to objec tions from Holmes’ son, who was left out of the will. The Shriners were notified of th is voidance by a letter from Holmes’ personal representative, and the Shriners appealed the matter to this Court, challenging the validity of the statute. Estate of Holmes , 183 Mont. at 292, 599 P.2d at 345. ¶27 On appeal, Holmes’ son argue d that the Shriners could not challenge the statute because they had not appeared be fore the District Court. In response, the Shriners argued they had not received proper noti ce of the challenge to the w ill, and thus had challenged the statute at the first opportun ity they were afforded, which happened to be on appeal. We first observed that Shriners were entitled to notice of the Holmes’ son’s objection to the petition for probate because they were devisees entitled to such notice pur suant to the Montana Uniform Probate Code. Applicable to the present acti on, however, was our second observation, in which we held that a devisee is also a “party” under M. R. Civ. P

1277(d) and is entitled to notice of entry of judgment so long as they are not in default for failure to appear. Estate of Holmes , 183 Mont. at 294-95, 599 P.2d at 346. We based this decision, in part, on the California Court of Appeals’ holding that named beneficiaries in a testamentary trust are indispensable parties to litigation of that trust. See Estate of Reed , 259 Cal. App. 2d 14, 21 (1968) (“As a beneficiary under the trust created under said will in his favor, he has the right, as a party beneficially inte rested, to appear and contest said account, or to pa rticipate in any other proceedin g affecting the property of said estate . . . .”) (citation om itted). Thus, we held that, pursu ant to M. R. Civ. P. 77(d), “named devisees in wills who are not in default for failure to appear are entitled to notice of the entry of an order in formal probate proceedings.” Estate of Holmes , 183 Mont. at 294, 599 P.2d at 346. We also held that “[t]his rule applie s regardless of actual notice of the entry of the order by the party seeking to appeal the order” and that, because no notice of entry of judgment had been served, “the time for appealing . . . has not yet begun to
run.” Estate of Holmes , 183 Mont. at 295, 599 P.2d at 347. ¶28 Similarly, in Estate of Spencer , 2002 MT 304, ¶ 16, 313 Mont. 40, ¶ 16, 59 P.3d 1160, ¶ 16, we addressed the issue of whethe r a bank, which had filed a creditor’s claim against an estate during informal probate, was entitled to notice of hearing when formal proceedings were later initiated for adjudicatio n of heirs and settlement of the estate, and whether it was entitled to notice of entry of the subsequent district court order under M. R. Civ. P. 77. We conclu ded that the bank was an “int erested person” as defined by the probate code and thus entitled to notice of both. Estate of Spencer , ¶¶ 16, 23.

13¶29 Here, the beneficiaries were entitled to no tice of the trust proceeding, specifically the hearing on the Fourth Ac counting, pursuant to § 72- 35-306, MCA (1995). Their interest was certainly not lesser than the interest of the devisee in Holmes and the creditor
in Spencer , and just as the parties in those case s were entitled to notice of the entry of orders in formal probate proceedings, Zona and Rose, as named beneficiaries of the trust, are likewise indispensable “parties” who must be served with notice of entry of a judgment or order in trust proceedings. Of course, the ultimate appealability of trust orders may depend on the resolu tion of such issues as statut e of limitations and laches, as we discuss herein under Issue 3. ¶30 The Bank argues that our holding in Holmes , and our subseq uent holding in Spencer , which cited Holmes , is inapplicable because in Holmes we applied a different version of Rule 77(d). The pr e-amendment version of Rule 77( d) provided that notice of entry was to be served “upon eac h party who is not in default for failure to appear.” The version of Rule 77(d) applicab le to the present action require s service of the notice “upon all parties who have made an appearance.” The Bank contends the new rule removed the requirement that notice be given to a party who has not appeared and is not yet in default, such as Zona and Rose, and requires notice onl y to parties who have appeared, which it contends Zona and Rose did not do. However, we clearly held in Holmes that devisees, and now we now hold the same for trust benefi ciaries, are indispensable parties to their respective formal statutory proceedings who must receive notice of the proceedings and notice of entry of the order. In essence, th ese indispensable parties are considered to have “appeared” as a matter of law. In 1999, subsequent to the proceeding at issue here,

14the Legislature amended § 72-34-306, MCA, to require notices of hearing in trust proceedings to state that “failure to appear and object bars any furt her claims against the trustee[,]” thereby addressing a default mechan ism within the trust st atutes which did not exist at the time of the hearing herein. See 1999 Mont. Laws 911. ¶31 Because no notice of entry of order was se rved upon Zona an d Rose, the ten-day limit for filing their Rule 59 motion for a ne w trial had not expired when their motion was filed with the District Court, and was not untimely. ¶32 3. Did the District Court err by failin g to apply the three -year statute of limitations applicable to trust pr oceedings under § 72-34-511, MCA, or alternatively, by failing to apply the doctrine of laches? ¶33 The Bank argues that § 72-34-511, MCA, bars Zona and Rose from reopening the Fourth Accounting, for the purpose of allegi ng breach of trust, because the accounting adequately disclosed the existe nce of their claim and more than three years have since passed. Section 72-4-511(1), MCA, pr ovides in pertinent part, that [i]f a beneficiary has received an interim or final account in writing . . . that adequately discloses the existence of a claim against the trustee for breach of trust, the claim is barred as to th at beneficiary unless a proceeding to assert the claim is commen ced within 3 years after r eceipt of the account or report. An account or report adequately discloses the existence of a claim if it provides sufficient information so that the beneficiary knows of the claim or reasonably should have inquired into the existence of the claim. According to the Bank, the three-year period of limitati on began to run when Zona and Rose received the Fourth A ccounting from the Bank, which stated that Trust B was invested in 98.1 percent bonds and notes, and the re st in cash. Altern atively, the Bank argues that the doctrine of laches barred re opening the Fourth Accounting due to Zona

15and Rose’s unjustified dela y, and that allowing them to asse rt that right at this time would be inequitable to the Bank. ¶34 In response, Zona and Rose argue that the rules governing post-hearing motions are governed by M. R. Civ. P. 52, 59 and 60, and the statute of limitations does not apply to those. Instead, Zona and Rose contend, the doctrine of “extrins ic fraud” applies here, which has been used in other states to set aside years of fraudulent court accountings without reference to a statute of limitations. More specifically, Zona and Rose argue the Bank fraudulently failed to disc lose the existence of Zona an d Rose’s claim for breach of trust. With respect to the Bank’s laches argument, Zona and Rose argue that the Bank made no showing of prejudice or inequity, as we required in Cole v. State ex rel. Brown , 2002 MT 32, ¶ 25, 308 Mont. 265, ¶ 25, 42 P.3d 760, ¶ 25. ¶35 The statute of limitations and laches arguments both require resolution of contested factual issues which th is Court cannot address. Findings of fact with respect to factual issues underlying the statute of limita tions and laches defenses are absent from the record, because the District Court’s findings of fact, conclusions of law and supplemental order addressing these issues we re voided by this Court and b ecause these issues were not addressed in the District Court’s first order. Consequently, this Court must decline to address these issues and allow th em to be addressed on remand. ¶36 4. Did the District Court’s granting of a new trial violat e § 72-35-206, MCA, which provides that final trust orders ar e “conclusive on all persons” and therefore preempts motions under M. R. Civ. P. 52? ¶37 The Bank argues that the District Court er red in granting a new trial because the order approving the Fourth Ac counting was “conclusive on a ll persons” pursuant to § 72-

1635-206(2), MCA, and thus could not be reope ned by the District Court on Zona and Rose’s motion for a new trial. Section 72-35- 206(2), MCA, provides that “[i]f it appears to the satisfaction of the court that notice [o f formal trust proceedings] has been regularly given or that the party entitled to notice has wa ived, the court shall so find in its order. When the order becomes final, it is conclusi ve on all persons, whether or not in being.” The basis for the Bank’s argument rests on its assumption that the District Court’s order approving the Fourth Accounting “became final,” and thus was “conclusive.” ¶38 However, an order becomes final only when the time to appeal has expired. In re Marriage of Nordberg , 265 Mont. 352, 356, 877 P.2d 987, 990 (1994). We held under Issue 2 herein that the time to appeal from the Fourth Accounting had not expired at the time Zona and Rose moved for a new trial. Because the time to appeal had not expired when Zona and Rose moved for a new trial, the District Court’s order had not “become final,” and had not yet become “conclusive on all parties.” Thus, the accounting was subject to a post-judgment motion. ¶39 The Bank offers an argumen t that the Rules of Civil Procedure do not apply to trust proceedings, citing Rule 81(a)’s instruc tion that statutory proc eedings are excepted from application of the rules “insofar as they are inconsistent or in conflict with the procedure and practice provided by th ese rules,” and to our holding in Spencer that the rules “d[o] not interject [themselves] into ot her statutory schemes which provide different procedural requirements.” Spencer , ¶ 13. The Bank argues therefrom that applying Rules 52 and 59 would be inconsistent or in conflict with the co nclusiveness provision within § 72-35-206(2), MCA.

17¶40 However, Spencer ’s rejection of the application of the Rules of Civil Procedure was in regard to an informal probate proc eeding, which is conduc ted by the clerk of

court. Spencer clearly applied the rule s to analogous formal probate proceedings. Spencer , ¶ 16. Here, Rules 52 and 59 supply an appropriate mech anism for filing a motion after entry of a trust order requestin g a new hearing or tr ial. Though § 72-35- 206(2), MCA, deems a trust order “conclusive on all persons, whether or not in being,” that occurs only “[w]hen the order becomes final.” As discussed above, to become “final,” a trust order must be subjected to post-hearing proceedings, including appeal to this Court and appropriate motions to the di strict court for a new hearing or trial. ¶41 5. Did the District Court err by en forcing the “prudent man rule” for a period of time during which no such rule existed under the Montana Code? ¶42 The Bank’s final allegation of error is that the District Court improperly applied the “prudent man” investment rule despite the fact that the Legislature did not pass a statutory “prudent man rule” until 1974, which was after the trust assets had been placed with the Bank. However, as Z ona and Rose point out, the Dist rict Court stated that it had not “determine[d] whether the ‘prudent man rule’ was actually breached by the investment stategy of the Bank.” Notabl y, the District Court held that further proceedings were required to make such a de termination. Without a factual record and conclusions of law before th is Court concerning the Bank ’s alleged breach of the “prudent man rule,” we cannot address that issue and remand it for further proceedings.

18CONCLUSION ¶43 Although a district court’s decision whet her to grant a new trial is normally subject to review under an abuse of discretion standard, Jenks v. Bertelson , 2004 MT 50, ¶ 12, 320 Mont. 139, ¶ 12, 86 P. 3d 24, ¶ 12, the issues raised here require us to determine whether the District Court’s actions were lawful under the statutes, not whether discretion was appropriately exercised. We hold that th e District Court’s actions were lawful, and affirm on Issues one, two and four. Issues th ree and five are reserved for the District Court’s determination on remand. ¶44 Affirmed and remanded.

/S/ JIM RICE

We concur:

/S/ JOHN WARNER /S/ W. WILLIAM LEAPHART /S/ PATRICIA COTTER /S/ BRIAN MORRIS

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