DA 14-0776

IN THE SUPREME COURT OF THE STATE OF MONTANA

2015 MT 278

IN RE THE PETITION TO TRANSFER TERRITORY

FROM POPLAR ELEMENTARY SCHOOL

DISTRICT NO. 9 TO FROID ELEMENTARY

SCHOOL DISTRICT NO. 65.

APPEAL FROM: District Court of the Fifteenth Judicial District,

In and For the County of Roosevelt, Cause No. DV 13-40

Honorable John C. McKeon, Presiding Judge

COUNSEL OF RECORD:

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

Submitted on Briefs: July 15, 2015

 Decided: September 17, 2015

Filed:

__________________________________________

Clerk

September 17 2015

Case Number: DA 14-0776
2

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 
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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 
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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. 
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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
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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
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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 to jury 

trial). We previously noted the distinction between failing to preserve an issue, or 

“forfeiture,” and “waiver” of an issue, in Miller v. Eighteenth Jud. Dist. Ct, 2007 MT 

149, ¶ 46, n. 5, 337 Mont. 488, 162 P.3d 121 (“‘Forfeiture,’ as opposed to ‘waiver,’ is the 

correct term in this context, since ‘forfeiture’ refers to ‘the failure to make the timely 

assertion of a right,’ whereas ‘waiver’ concerns ‘the intentional relinquishment or 

abandonment of a known right.’”) (internal citations omitted).

¶15 Here, the District Court, as the reviewing court, first had to determine whether 

Poplar’s claim—that § 20-6-105, MCA, requires sworn testimony—was properly 

preserved for review before it could take up the question of whether a party can “waive a 
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tribunal’s obligation to act within bounds of reason and employ conscientious judgment.” 

The preservation question, in turn, required the District Court to determine whether this 

statutory proceeding was governed by the Montana Administrative Procedure Act

(MAPA) or by the common law, because each of those provides different standards to 

determine whether a claim has been properly preserved for review. Under MAPA, a 

party cannot raise an issue for judicial review that was not raised before the agency

(except for the validity of the statute that gave rise to the administrative proceeding), 

unless good cause for failure to raise the issue is shown. Section 2-4-702(1)(b), MCA. 

Under the common law, a party cannot raise an issue for the first time on appeal unless 

the court accepts plain error review. Paulson v. Flathead Conservation Dist., 2004 MT 

136, ¶ 40, 321 Mont. 364, 91 P.3d 569. Thus, if Poplar did not properly preserve its 

issue, then, under MAPA, the District Court could review the issue only if Poplar showed 

good cause, while, under the common law, only if Poplar established plain error and the 

District Court exercised discretionary review.

¶16 MAPA governs procedure, rules, and judicial review of final “agency” decisions

in “contested cases.” Section 2-4-101 et seq., MCA. “Agency” means an agency as 

defined in § 2-3-102, MCA, of the Montana Public Participation in Governmental 

Operations Act (“Public Participation Act”). Section 2-4-102(2)(a), MCA. In turn, the 

Public Participation Act defines “agency” as “any board, bureau, commission, 

department, authority, or officer of the state or local government authorized by law to 

make rules, determine contested cases, or enter into contracts . . . .” Section 2-3-102, 
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MCA. However, § 2-4-102(2)(b), MCA, explicitly excludes from the definition of 

“agency” a “school district, a unit of local government, or any other political subdivision 

of the state.” County superintendents are local, not state, government officials. Section

7-4-3005, MCA. Thus, proceedings before county superintendents are excluded from 

MAPA as a “unit of local government.” 

¶17 The legislative history of MAPA confirms this was the intent of the Montana 

Legislature. The Legislature enacted the local government exclusion in the 1985 session 

in response to our decision in Yanzick v. Sch. Dist., 196 Mont. 375, 383, 641 P.2d 431, 

436 (1982), where we held that a county superintendent was an “agency” under MAPA.1 

See State Administration Committee Deliberation on SB 13, Ch. 671 2-3 (Jan. 8, 1985); 

State Administration Committee Deliberation on SB 13, Ch. 671 2-3 (March 7, 1985); see 

also William L. Corbett, Montana Administrative Law Practice: 41 Years After the 

Enactment of the Montana Administrative Procedure Act, 73 Mont. L. Rev. 339, 341 

(2012). Specifically, regarding the statutory proceeding at issue, the Legislature had 

 

1 The preamble to SB 13, introduced in the 1985 session, provided: “Whereas, the Montana 

Supreme Court has held in recent opinions that the Montana Administrative Procedure Act 

applies to school districts; and whereas, it is clear from the language of section 2-4-102(2), 

MCA, as originally enacted, and from the 1971 official comments of the Administrative 

Procedures Subcommittee recommending the enactment of the Montana Administrative 

Procedure Act that the Act was never intended to apply to units of local government, school 

districts, or any other political subdivisions; and whereas, substantial confusion could result if 

the provisions of the Act are continued to be applied to any government entity other than state 

agencies; and whereas, it is the intent of the Legislature that the Act be applied only to those 

agencies of state government provided for in the Act and the belief of the Legislature that the Act 

was never intended to apply to units of local government, school districts, or any other political 

subdivisions of the state. Therefore, it is the intent of this bill to clarify that the Montana 

Administrative Procedure Act does not apply to units of local government, school districts, or 

any other political subdivisions of this State.”
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previously provided that judicial review of territory transfers would be governed by 

MAPA, but removed that provision in 1997. See 1997 Mont. Laws 403; compare

§ 20-6-320(7), MCA (1993) with § 20-6-320(6), MCA (1997). In 2003, the Legislature 

enacted a new territory transfer statute but used nearly identical language with regard to 

the judicial review provision of the new statute. See 2003 Mont. Laws 151. The only 

addition to the judicial review provision was an articulation of the standard of review to 

be applied by district courts, which would be superfluous if MAPA, with its own standard 

of review, applied to territory transfers. See § 2-4-704(2)(a)(i-vi), MCA. Therefore, 

without any specific statutory language so providing, which is entirely consistent with the 

statute’s legislative history, we conclude that the exclusion in § 2-4-102(2)(b), MCA,

removes actions of county superintendents from MAPA’s purview. The common law 

thus governs whether Poplar’s claim—that § 20-6-105, MCA, requires sworn 

testimony—was properly preserved for review.

2

¶18 Under the common law, it is well settled that issues raised for the first time on 

appeal will not be reviewed. Schuff v. A.T. Klemens & Son, 2000 MT 357, ¶ 53, 303 

Mont. 274, 16 P.3d 1002. The exception under the common law is plain error review. 

Paulson, ¶ 40. A reviewing court may discretionarily review a claimed error not 

previously raised below which affects fundamental constitutional rights where failing to 

review it may result in a manifest miscarriage of justice, leave unsettled the question of 

the fundamental fairness of the proceedings, or compromise the integrity of the judicial 

 

2 The District Court also concluded that MAPA did not apply to this proceeding.
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process. Paulson, ¶ 40. A court’s inherent power of plain error review should be used 

sparingly and only in exceptional cases meeting one of the criteria. Paulson, ¶ 40. We 

previously exercised plain error review in a school territory transfer case on the ground 

that the then-current territory transfer statute was an unconstitutional delegation of 

legislative authority because the legislature had failed to prescribe with reasonable clarity 

the limits of power delegated to the superintendent. In the Petition to Transfer Territory 

from High Sch. Dist. No. 6, 2000 MT 342, ¶ 11, 303 Mont. 204, 15 P.3d 447 (“Lame 

Deer”).

¶19 Here, the District Court erred when it decided the waiver issue (concluding that 

waiver was not possible as a matter of law), and then reached the merits of the statutory 

question (concluding that § 20-6-105, MCA, required sworn testimony) without first 

determining the primary issue of whether Poplar’s claim had been preserved and, if not, 

whether plain error review could be exercised. Even giving the benefit of the doubt that 

the District Court’s decision to reach the waiver issue and then the merits was an implied

exercise of plain error review, we conclude that it erred in so doing.

¶20 First, given the lack of any objection to or questioning of the procedure, it is clear 

that Poplar failed to preserve its statutory issue concerning the necessity of sworn 

testimony. Clearly, Huber was never given the opportunity to consider the question and, 

if necessary, correct the course of the proceeding. Thus, plain error review was necessary 

to review this unpreserved issue. Although we exercised plain error review in Lame 

Deer, Poplar’s claim does not merit similar treatment. The constitutionality of the 
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territory transfer statute was at issue in Lame Deer, while the issue here is a procedural 

question under the statute, and nothing in our review of the record indicates that a 

miscarriage of justice, a fundamental unfairness, or a threat to the integrity of the process

resulted from the procedure employed. And, as a reason bearing on the exercise of plain 

error review, we find no authority, and Poplar has cited none, for the District Court’s 

holding that a “party cannot waive a tribunal’s obligation to act within bounds of reason 

and employ conscientious judgment.” In sum, Poplar’s claim does not warrant plain 

error review. Therefore, Poplar’s statutory claim was not properly raised before the

District Court and it was error for the District Court to reach the merits of the question.

¶21 We reverse and remand to the District Court for further proceedings in review of 

the county superintendent’s decision, in accordance herewith.

/S/ JIM RICE

We concur: 

/S/ MIKE McGRATH

/S/ LAURIE McKINNON

/S/ MICHAEL E WHEAT

Justice James Jeremiah Shea, dissenting.

¶22 I agree with the majority’s conclusion that Poplar failed to preserve the statutory 

issue regarding the necessity of sworn testimony, and I likewise agree that this issue does 

not warrant plain error review. Opinion, ¶ 20. However, I would nevertheless affirm the 

District Court’s order granting summary judgment in favor of Poplar and against Froid 
13

and setting aside Huber’s Findings of Fact, Conclusions of Law, and Order on the 

grounds that Superintendent Stennes had no authority to recuse herself and appoint Huber 

in her stead.

¶23 Section 20-6-105, MCA, sets forth very specific criteria for conducting a territory 

transfer hearing. In pertinent part, the statute provides:

(6) The county superintendent shall conduct a hearing as scheduled . . .

(7) After receiving evidence from both the proponents and opponents of the 

proposed territory transfer . . . the county superintendent shall, within 

30 days after the hearing, issue findings of fact, conclusions of law, and an 

order.

(8) If, based on a preponderance of the evidence, the county superintendent 

determines that the evidence on the effects described in subsection (6) 

supports a conclusion that a transfer of the territory is in the best and 

collective interest of students in the receiving and transferring districts and 

does not negatively impact the ability of the districts to serve those 

students, the county superintendent shall grant the transfer. If the county 

superintendent determines that, based on a preponderance of the evidence 

presented at the hearing, a transfer of the territory is not in the best and 

collective interest of students in the receiving and transferring districts and 

will negatively impact the ability of the districts to serve those students, the 

county superintendent shall deny the territory transfer.

(9) The decision of the county superintendent is final 30 days after the date 

of the decision unless it is appealed to the district court by a resident, 

taxpayer, or representative of either district affected by the petitioned 

territory transfer. The county superintendent’s decision must be upheld 

unless the court finds that the county superintendent’s decision constituted 

an abuse of discretion under this section.

Section 20-6-105(6) to (9), MCA (emphasis added).

¶24 Section 20-6-105, MCA, vests in the county superintendent the exclusive authority 

to conduct a territory transfer hearing, after which the county superintendent shall issue 
14

findings of fact and conclusions of law, and an order either granting or denying the 

territory transfer. In this case, the individual in whom that exclusive authority was vested 

was Superintendent Stennes.

¶25 As required by § 20-3-201(1), MCA, Superintendent Stennes was the duly elected 

Roosevelt County Superintendent of Schools. The only statutory provision allowing a 

duly elected county superintendent to appoint another individual to hear and decide a 

matter in controversy is when the county superintendent is disqualified pursuant to 

§ 20-3-211, MCA. In those specific and limited circumstances, the disqualified county 

superintendent “must appoint another county superintendent.” Section 20-3-212(1), 

MCA. There is no statutory authority for a county superintendent to recuse herself and 

appoint a deputy superintendent for the limited purpose of hearing and ruling on a 

territory transfer petition.

¶26 In Pinnow v. Mont. State Fund, 2007 MT 332, 340 Mont. 217, 172 P.3d 1273, we 

addressed the issue of whether a District Court Judge had authority to assume jurisdiction 

over a case in the Workers’ Compensation Court (WCC) after the WCC Judge recused 

himself. Pinnow, ¶ 14. Although the Administrative Rules of Montana provided for the 

WCC Judge’s recusal and the District Court Judge’s assumption of jurisdiction, we held 

that an administrative rule could not “create authority not otherwise provided for by the 

Constitution or statutes adopted pursuant to the Constitution.” Pinnow, ¶ 23. In the 

absence of such authority, we concluded that the District Court Judge who had assumed 
15

jurisdiction “had no more authority than any other member of the general public over this 

case,” and we vacated all orders entered by the District Court Judge. Pinnow, ¶ 25.

¶27 In Lame Deer, we recognized that territory transfers involve substantial rights of 

the litigants with constitutional implications. Lame Deer, ¶ 11. Indeed, we held the 

territory transfer statute at issue in Lame Deer to be an unconstitutional delegation of 

legislative authority because of the statute’s “broad grant of discretion to a county 

superintendent of schools, unchecked by any standard, policy or rule of decision.” Lame 

Deer, ¶ 19. In this case, it seems beyond dispute that Superintendent Stennes lacked the 

statutory authority or discretion to appoint Huber to hear and rule on Poplar’s territory 

transfer petition. In other words, Huber “had no more authority than any other member 

of the general public over [Poplar’s petition].” Pinnow, ¶ 25. Both parties in this case 

had a due process right to have this petition heard and decided by the duly elected county 

superintendent, as expressly prescribed by § 20-6-105, MCA. It seems to me

incongruous that we would hold, as we did in Lame Deer, that it was unconstitutional for 

a county superintendent to act within the authority granted by statute because that 

authority was overly broad, yet we would excuse a county superintendent recusing 

herself and making an ad hoc appointment of a deputy superintendent in contravention of 

the statute’s narrowly prescribed process.

¶28 Relevant to the majority’s dispositive issue in this case—the District Court’s error 

in reaching the merits of Poplar’s statutory claim because it was not properly raised—it 

bears noting that although Poplar did not object to Huber’s appointment during the 
16

territory transfer hearing, Poplar did raise the issue in its summary judgment motion 

before the District Court and again on appeal. In Pinnow, neither party objected to the 

District Court Judge assuming jurisdiction over the case, nor did either party raise the 

issue on appeal. Pinnow, ¶ 15. Nevertheless, we deemed it necessary to address the 

issue, sua sponte, because we determined that a lack of statutory authority for the District 

Court Judge’s assumption of jurisdiction would render any rulings made by him void. 

Pinnow, ¶ 17. I submit we have a similar obligation to address this issue in the present 

case, and resolve it consistent with our established precedent. Therefore, I dissent.

/S/ JAMES JEREMIAH SHEA