Court Opinion

ID: 883219
Source: CourtListenerOpinion
Date Created: 2013-06-05 02:10:22.918996+00
Date Added: 2024-06-11T15:11:06.370508
License: Public Domain

NO.     94-094
          IN THE SUPREME COURT OF THE STATE OF MONTANA
                                  1994

DONALD HABER and DONNA HABER,
Co-Conservators of the Estate of
THEODORE HABER, a Protected Person,
          Plaintiffs and Appellants,               SEP 12 1994
     v.
HABER, INC., a Montana Corporation,
          Defendant and Respondent.

APPEAL FROM:   District Court of the Seventh Judicial District,
               In and for the County of McCone,
               The Honorable Richard G. Phillips, Judge presiding.

COUNSEL OF RECORD:
          For Appellants:
               Arnie A. Hove, Attorney at Law, Circle, Montana
          For Respondent:
               Richard A. Simonton and Lorraine A. Schneider,
               Simonton, Howe & Schneider, Glendive, Montana

                                  Submitted on Briefs:   June 23, 1994
                                              Decided:   September 12, 1994
Filed:
Justice William E. Hunt, ST., delivered the opinion of the Court.
        On February 21, 1991, plaintiffs filed this action for the
collection of $46,999.      The Seventh Judicial District Court, McCone
County, held a nonjury trial on December 20, 1993.       On January 19,
1994,    the District Court issued findings of fact, conclusions of
law,    and entered judgment in favor of the defendant.      Plaintiffs
appeal.      We affirm.
        The following issues are raised on appeal:
        1.    Are the District Court's findings of fact and conclusions
of law finding a gift from Theodore (Theo) Haber to Larry Haber
erroneous, and does the preponderance of the evidence establish a
loan between Theo and Haber, Inc.?
        2.    Did the District Court err in denying plaintiffs' motion
to file depositions and transcripts?
        On December 31, 1987, Theo Haber and his son Larry Haber met
at the State Bank of Terry in Terry, Montana.         As president and
majority shareholder of Haber, Inc., Larry disbursed to Theo the
sum of $50,382 in retirement funds.          In the presence of bank
officer Gary Ryti,        Theo endorsed the check and gave it back to
Larry.       Larry endorsed the check, deposited it in the account of
Haber, Inc., and commented that it was a gift. Theo did not object
to or correct Larry's statement that the deposit was a gift.
        After January 1, 1988,     the corporation determined the tax
liability on the lump sum retirement distribution.         It issued a
check to Theo in the amount of $10,382.71 so that he could pay

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taxes and other obligations on the lump sum. The corporation noted
"Retirement Fund" on the check.

     In October 1989, Theo requested money from the corporation.

The corporation issued a check to Theo in the amount of $5000. On

previous occasions, Theo had received money from the corporation at

his request.     The     corporation     noted "Interest" on the check, and

deducted the $5000 as an interest expense.
     The    corporation's      fiscal    year     runs   from   November    1   through
October 31.     The    corporation's       accountant      completed    the     1988-89

financial    statement    in   November        1989.     The    financial     statement

showed "loans" from shareholders in the amount of $46,999.                      Before

the corporation's tax return was due on January 15, 1990, Larry

notified the accountant that the amount listed as                   "loans" was not

a loan and should not have been reflected as such on the financial

statement.     The accountant later reclassified the $46,999 as a

capital    contribution.

     Theo suffered an incapacitating stroke on February 17, 1990,

and was unable to appear and testify in this case.                     Donald Haber,

one of Theo's sons, and Donna Haber, Theo's current wife, are the

co-conservators of Theo's estate.
                                        ISSUE 1

     Are the District Court's findings of fact and conclusions of
law finding a gift from Theo to Larry erroneous, and does the

preponderance of the evidence establish a loan between Theo and

Haber, Inc.?

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     We will affirm the district court's findings of fact and
conclusions of law unless they are clearly erroneous.         Cowles v.
Sheeline (1993),    259 Mont. 1, 7, 855        P.Zd 93, 97.    Although

conflicts may exist in the evidence presented at trial, it is the
district court's duty to resolve them, and we will give due regard
to the district court's ability to judge the credibility of
witnesses and will not substitute our judgment for that of the
trier of fact.     Maloney v. Heer (1993), 257 Mont. 500, 508, 850
P.2d 957, 962;     Williams v. DeVinney      (1993), 259 Mont. 354,H
P.2d 546.
     Plaintiffs argue that the District Court clearly erred in its
finding that no loan existed between Theo Haber and Haber, Inc. We
disagree.   Plaintiffs' contention that "[t]he undisnuted      facts are
the transfer was from Theo to Haber, Inc. and the transfer was
treated by Larry,    President of Haber,      Inc., as a loan to Haber,
Inc." is patently incorrect.         (Emphasis added.)     In fact, the
corporation argues on appeal, as it did below, that "[tlhere was
ample evidence presented that no loan existed and that the gifting
was consistent with Theo Haber's         pattern of gifting to his son,
Larry Haber."    (Emphasis added.)       The District Court resolved the
conflicting evidence in favor of the corporation.
     We conclude that the District Court's findings are supported
by substantial evidence.    Section 31-l-101, MCA, defines a loan of
money as Ita contract by which one delivers a sum of money to
another and the latter agrees to return at a future time a sum
equivalent to that which he borrowed."           Conversely, a gift is

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defined as a transfer of personal property made voluntarily and
without        consideration.       Section   70-3-101,   MCA.       Here,   the
corporation established that Theo consistently gifted large shares
of stock to Larry and that Theo's will bequeathed most of his
estate to Larry.        Larry, and Theo's two daughters, testified that
their father stated that he had given Larry the money in question
as a gift and did not intend that it be repaid.                  Likewise,   bank
officer Gary Ryti,       a disinterested party, testified that Theo did
not object to Larry's statement that the money was a gift.
        Additionally,     Larry testified that the 1988-89 financial
statement incorrectly reflected the $46,999 as a loan, and that
when he noticed the error,             he telephoned the accountant who
prepared the statement to rectify the error. An examination of the
trial transcript shows that this testimony is consistent with the
testimony of the accountant who prepared the financial statement.
While the accountant testified that he never considered the $46,999
as a gift, he also testified that he changed the classification of
the sum from a loan to a capital contribution after Larry called
him to correct the 1988-89 financial statement.
        While the foregoing testimony conflicts with the evidence set
forth     by    plaintiffs,     it is the duty of the District Court to
resolve such conflicts.           Maloney, 850 P.2d at 962.         Because the
District Court was in the best position to observe the testimony of
the witnesses and judge their credibility, and because its findings
are supported by substantial evidence, we will not substitute our
judgment for that of the District Court. Maloney, 850 P.2d at 962.

                                         5
     We    affirm   the District    Court's     findings of    fact   and
conclusions~ of law.
                                ISSUE 2
     Did the District Court err by denying plaintiffs' motion to
file depositions and transcripts?
     Plaintiffs argue that "[t]he District Court erred in denying
the Motion to File Depositions and Transcripts when they are full
of inconsistent statements" which *'provide evidence in support of
Plaintiffs'   contention there was a loan . . .        ."   We disagree.

Plaintiffs filed their motion to submit additional depositions and
transcripts on January 6, 1994, after the conclusion of the trial
in this matter.     Plaintiffs also filed their proposed findings of
fact and conclusions of law on January 6.           The grounds for the
motion to submit additional evidence were that the depositions and
transcripts were       referred to throughout the trial        and were
necessary for a proper adjudication.
     Rule 32(a), M.R.Civ.P., provides in part:
     At the trial . . . any part    or all of a deposition . . .
     may be used against any        party who was present or
     represented at the taking      of the deposition . . . in
     accordance with any of the     following provisions:
           (1) Any deposition may    be used by any party for the
     purpose of contradicting or     impeaching the testimony of
     deponent as a witness . . .     .
(Emphasis added.)      Similarly, Rule 613, M.R.Evid., provides for
impeachment    of witnesses    at trial through the use        of prior
statements made by the witness.         Both Rule 32(a), M.R.Civ.P., and
Rule 613, M.R.Evid.,     contemplate impeachment during the course of
trial.    Furthermore, Rule 613(b), M.R.Evid., states that extrinsic

                                    6
 evidence of prior inconsistent statements is inadmissible "unless
 the witness is afforded an opportunity to explain or deny the same
 and the opposite party is afforded an opportunity to interrogate
 the witness thereon . . .       Rule 613(b), M.R.Evid.    This Court
h a s stated:
             It is, of course, not necessary under the new rules
       of   evidence   that   impeachment   evidence of prior
       inconsistent    statements be      offered   during   the
       cross-examination of the witness. Under Rule 613(b) it
       can be done at any time during the trial . . . .

 Rap ischke v. First Continental Corp. (1980),    187 Mont. 471, 51 1,
 610 P.2d 668, 689 (emphasis added).    Plaintiffs clearly failed to
 introduce the depositions and transcripts during the course of the
 trial.   The District Court properly denied the post-trial motion to
  include the extrinsic evidence in the record.
       Affirmed.
       Pursuant to Section I, Paragraph 3(c), Montana Supreme Court
  1988 Internal Operating Rules, this decision shall not be cited as
 precedent and shall be published by its filing as a public document
 with the Clerk of the Supreme Court and by a report of its result
 to Montana Law Week, State Reporter and West Publishing Company.

                                           Justice

 We concur: