                              NO.       95-124
          IN THE SUPREMECOURT OF THE STATE OF MONTANA
                                       1996


DAVID MAURER,
          Plaintiff,  Appellant,
          and Cross-Respondent,


CLAUSEN DISTRIBUTING CO., a Montana
corporation, and MICHAEL A. TUCKER,
          Defendants,  Respondents,
          and Cross-Appellants.



APPEAL FROM:    District  Court of the First Judicial District,
                In and for the County of Lewis and Clark,
                The Honorable Thomas C. Honzel, Judge presiding.


COUNSEL OF RECORD:
          For Appellant:
                Monte D. Beck and John J. Richardson,
                Beck Law Offices, Bozeman, Montana
          For Respondents:
                Keith Keller,   Keller,        Reynolds, Drake,
                Johnson & Gillespie,          Helena, Montana


                               Submitted         on Briefs:   January    4, 1996
                                                   Decided:   February    8, 1996




                                   I
                                   'Clerk
Justice         Charles      E. Erdmann delivered                    the opinion                of the Court.
         This     is an appeal          from an order              of the First             Judicial         District
Court,         Lewis     and Clark       County,        granting            a new trial            on the       jury's
award of damages against                       Clausen        Distributing                Co. and Michael                A.
Tucker,         and a cross-appeal               from the District                      Court's     exclusion            of
evidence         and giving          of jury      instructions.                   We reverse           in part          and
affirm         in part.
         We restate          the issues          as follows:
          1.      Did the District              Court err           in ordering            a new trial          on the
issue       of punitive           damages?
          2.      Did the District              Court     err       in ordering            a new trial          on the
issue       of compensatory             damages?
          3.      Did      the     District          Court         err     in     excluding          evidence            of
events         other      than    the    accident        that            could        have lead        to    Maurer's
depression?
          4.      Did the District              Court        err     in denying            a new trial          on the
issue       of punitive          damages because evidence                         of Clausen's          employees'
work-related             convictions          for driving           under the influence                     (DUIs) was
excluded?
          5.       Did the District             Court     err       in denying            a new trial         because
instructions              were       given      to      the        jury          on     Clausen's           vicarious
liability          for    punitive       damages?
                                                      FACTS
          Michael        Tucker was a salesperson                    for Clausen Distributing                      Co.,
a Helena          beverage        and bar       supply        wholesaler                and distributor.                 On
November 25,              1991,      Tucker      was returning                   from     his     Townsend sales

                                                          2
route     when he ran into                    the rear          of a Montana Highway Patrol                            vehicle
parked       on the         side      of      the highway.                David          Maurer,         a motorist          who
had      been     stopped            by       the        patrolman,          was sitting                  in     the      front
passenger        seat of the patrol                        car and was injured                    when he was thrown
to the       floor        of the car.
         Tucker           pled     guilty           to     a charge         of     driving          while        under       the
influence        of alcohol.                  His blood alcohol                   content         over     an hour after
the      accident           was      .17       percent.              Defendants              Clausen            and     Tucker
admitted        liability             for     the accident                and a trial             was held         to award
compensatory              damages and determine                       liability            for    punitive         damages.
At trial,        Tucker           testified              that   he drank          five      or six       beers     that      day
while       he was servicing                   his        Townsend customers.                      Clausen's            policy
permitted        salespersons                 to use their            discretion             in consuming              alcohol
while       working.              Clausen       did not amend this                       policy      as it        pertained
to Tucker,           even though              Clausen           was aware that               Tucker         had received
two citations               for     DUIs prior              to this        accident.
         As a result              of the accident,                   Maurer suffered                pain        in his     neck
and back         which            he alleged              prevented         him from              performing            duties
essential         to       running          a ranch.            Maurer       became severely                    depressed,
quit     the family              ranch,       and moved from Montana.                             Clausen        and Tucker
attempted            to     introduce               evidence         of     non-related              felony            charges
against       Maurer which could have caused his depression                                               and disrupted
his     established               course      of life.            The District               Court        did     not allow
the evidence               because of its                  prejudicial            effect.
         Clausen           also     attempted              to introduce            evidence          that       no Clausen
driver       had, until            this       accident,          received          a DUI while             working.          The

                                                                 3
District          Court     excluded        this     evidence,            finding         it    was not relevant
to the       issue        of punitive         damages.
        At the proposal              of jury        instructions,                the District            Court        ruled
that       a pattern        instruction            on vicarious               liability          would be given.
Clausen       objected         to the giving             of this           instruction.
        The        jury      awarded         $l,OOO,OOO              in    punitive             damages           against
Clausen        and $75,000            in punitive             damages against                  Tucker.            Clausen
filed       a motion         for     a new trial              and the         District           Court       concluded
that       the jury's        awards for            punitive          damages were based on passion
and prejudice              and exceeded the amount necessary                                   to punish          Clausen
and Tucker.            Accordingly,           the District                Court     ordered        a new trial                on
the determination                  of punitive         damages.
           The jury         also      awarded         Maurer          $570,349            in    actual        damages,
$500,000          of which         was for     loss      of established                   course       of    life,       and
$50,000        for    pain     and suffering.                 Maurer        had requested                $90,000         for

loss    of established               course        of life.          Although         requested             by Maurer,
the jury          did not award any damages for                           loss     of earnings              or loss           of
earning        capacity.             The District                 Court    concluded            that        the      jury's
award       for      compensatory            damages was excessive                         and granted               a new
trial       on the        issue     of compensatory                 damages as well.
           Maurer appeals            the District             Court's         granting         of a new trial                 on
the     issues        of     punitive         and compensatory                    damages.              Clausen          and
Tucker        cross-appeal            the     District              Court's        evidentiary               and legal
rulings        relevant           to a new trial.




                                                              4
                                                          ISSUE 1
           Did    the     District        Court           err         in    ordering           a new trial                 on the
issue       of punitive            damages?
           The District              Court        vacated             the       jury's         award          for        punitive
damages of $l,OOO,OOO against                              Clausen              and $75,000                against        Tucker.
The District              Court      ordered         a new trial                 because             it     concluded            that
these        awards         were      excessive.                  This          Court         will          not        disturb          a
district          court's         decision          to     grant           or deny a new trial                           absent         a
manifest          abuse of         discretion.                  Baxter          v.    Archie              Cochrane        Motors,
Inc.       (1995),        271 Mont.          286,        287-88,            895 P.2d 631,                  632.
           Section        25-ll-102(5),             MCA, provides                    that     a district                court     may
vacate       a jury's        verdict         and grant            a new trial                when the jury's                    award
of damages is               excessive         and appears                   to have been given                         under      the
influence            of     passion          or     prejudice.                       As     required              by      § 27-l-
221(7) Cc), MCA, the District                            Court         reviewed             the jury's            verdict         and
considered            the     factors         set         forth            in   subsection                 (7) (b).             Those
factors          include:
                 (i)            the nature   and reprehensibility        of                                              the
           defendant's          wrongdoing;
                 If:!,        the extent of the defendant's      wrongdoing;
                               the intent of the defendant in committing    the
           wrong ;
                 (iv)       the   profitability         of the   defendant's
           wrongdoing,    if applicable;
                 (v)   the amount of actual          damages awarded by the
           jury;
                 (vi)   the defendant's         net worth;
                  iix)'   any other circumstances
                          '                                                          that may operate to
           increase     or reduce, without   wholly                                  defeating, punitive
           damages.




                                                                  5
        The court           found         that     Clausen          had a net worth                 of $944,534          in
1993 and taxable                 income of $31,662                  (average         for     1990 to 1993).            The
court      found     that        Tucker          had no evidence               of net worth            but     that      he
had been rehired                 by Clausen             at a yearly           salary         of $27,000.             Based
on those      findings,            the court             concluded:
              Although an award of punitive       damages was proper                                            in
        this case, it appears that the award was the result                                                     of
        passion or prejudice.        Passion and prejudice        can,                                          of
        course, be strong when drinking        and driving result    in                                         an
        accident.    The significant    factor    here, however, is                                           the
        excessive   amount of the award.
                There was no evidence regarding  Tucker's net worth.
        The award against him was almost three times his annual
        salary.      While Tucker's  conduct was certainly   reprehen-
        sible     and should in no way be condoned,        the amount
        awarded exceeds the amount necessary to punish him.
                The amount awarded against       Clausen Distributing
        exceeded the company's net worth.           The award must be
        sufficient     to get the company's attention,    but in this
        case,      the   award  exceeds    the  amount necessary      to
        adequately      punish this   Defendant   and to serve as an
        example to it and others.
        A review            of     the      record           reveals         that      the     punitive        damages
assessed       against             Clausen             were     not      excessive            when     compared          to
Clausen's          overall         financial             condition.                 Section        27-l-221(7)        (a),
MCA, states           that        'I [iln        the    separate         proceeding            to    determine         the
amount of punitive                 damages to be awarded,                      the defendant's               financial
affairs,       financial            condition,                and net        worth         must be considered."
We note       that        Clausen           declared           taxable         income         of     $0 to       $49,000
between      1990 and 1993,                  even though               its    yearly         sales     were between
$3,400,000           to      $4,600,000.                 Actually,            Clausen          had     a policy          of
retaining          profits           within            the     corporation.                   Clausen's          general
manager testified                  that      Clausen's          yearly         retained         profits       averaged

                                                                6
between           $850,000          and       $l,OOO,OOO.                   In      addition,          Clausen            kept
$300,000          to $400,000             in cash on hand for                     expenditures.                Clausen's
balance       sheet valued               many of the company's                      assets      at their        historic
cost       when purchased                up to thirty-five                   years       ago.          Testimony            was
presented           that     at this          time        the warehouse              alone      is worth            between
$550,000          and $800,000.               Nevertheless,                the District           Court        failed         to
consider          the      appreciation              of     these        assets,        as well         as Clausen's
policy       of     retaining            profits,          which         resulted       in a decrease                of     the
company's           taxable        income.
           Tucker's        financial          condition            was also valued              improperly            by the
District          Court.         After      noting         there     was no evidence              of Tucker's               net
worth,       the      District           Court      concluded             that      Tucker's          salary        did     not
support       an award of punitive                        damages in the amount of $75,000.                                    In
Gurnsey        v.     Conklin          Co.,      Inc.       (1988),         230 Mont.           42,     55,     751 P.2d
151, 158, we stated                    a plaintiff            is not required                to show proof                 that
a defendant's              net worth          supports         an award of punitive                      damages.              If
the      defendant's             net     worth       does not             support       an award of                punitive
damages,            the     defendant               must      produce            evidence         to        that       fact.
Gurnsey,          751 P.2d at 158.                  Tucker         should        not gain an advantage                     from
failing        to produce              evidence           of his     net worth.              Accordingly,              there
was no         evidence            that       Tucker's             net     worth        could         not      support              a
punitive          damage award of $75,000,                         and so, the District                     Court         erred
in vacating             the jury's            award of punitive                   damages against                  Tucker.
           For these        reasons,          we conclude            that        the District           Court's           order
for      a new trial             on the        issue        of punitive              damages was a manifest
abuse of discretion,                    and therefore,                   reverse     the District                 Court          on
this      issue.
                                                         ISSUE 2
          Did     the     District           Court       err        in   ordering          a new trial                  on the
issue      of compensatory                  damages?
          The issue         of damages was submitted                           to the jury            on a line               item

verdict          form.      Maurer          asked the jury                to return            a verdict          of:
          Past medical expenses                                                            $           12,598          80
          Future medical expenses                                                                      20,000          00
          Out-of-pocket    expenses                                                                        440         00
          Pain and suffering                                                                           65,520          00
          LOSS of established     course                        of life                                90,000          00
          Loss of earnings                                                                             35,642          00
          Loss of earning capacity                                                                 2,241,761           00
          The jury        returned           a verdict           of:
          Past medical expenses                                                                $      12,598           80
          Future medical expenses                                                                      7,310           50
          Out-of-pocket    expenses                                                                       440          00
          Pain and suffering                                                                          50,000           00
          LOSS of established     course                        of life                              500,000           00
          Loss of earnings                                                                                -O-
          Loss of earning capacity                                                                        -O-
          The District               Court      noted      that          the   jury's          award       for         loss      of
established              course       of     life     was more than                 five           times        the      amount
requested          by Maurer.               On these           facts,      the court               concluded           that      an
award       of     $500,000           for      loss      of       established           course             of         .ife     was
excessive           and appeared              to have been given                    under           the    influence             of
passion          or prejudice.               Accordingly,                the court         ordered          a new trial
on compensatory               damages pursuant                    to 5 25-ll-102(5),                      MCA.         We will
review       the     court's          decision        to grant             a new trial               to determine                    if
the court           abused its             discretion.              See Baxter,            895 P.2d at 632.



                                                                8
         Maurer          attempts          to justify              the        jury's         award for           his        loss    of
established              course       of life         by pointing               to the fact             the jury            awarded
less     compensation                as a whole than was requested.                                This justification
is     fallacious.                 The jury's             award for            Maurer's          loss       of established
course         of life       cannot        be considered                     as damages to offset                   the jury's
refusal         to award damages for                       Maurer's             loss     of earnings             and earning
capacity.             On the contrary,                    the jury            found      that      Maurer        suffered           no
loss      of earning               capacity.
          Maurer         produced          evidence             to support              an award of              $90,000           for
loss      of      established              course          of     life.              Instead,         the     jury          awarded
$500,000.                Unreasonable                damages cannot                     be     recovered.                   Section
27-l-302,          MCA. Thus, an award must be reduced                                       when it         substantially
exceeds         that       which       the evidence                 can sustain.                 Safeco          Ins.        Co. v.
Ellinghouse               (1986),          223 Mont.            239,          254,      725 P.2d          217,       226.          The
record         does not            support          the    jury's            award of $500,000                   for        loss    of
established              course        of life.            Therefore,                 the District           Court          did not
abuse       its        discretion              in    ordering                a new trial              for     compensatory
damages on this                    issue       and we affirm                   that      portion        of the          District
Court's         order.
                                                            ISSUE 3
          Did      the     District            Court        err         in    excluding          evidence              of    events
other          than        the        accident             that           could         have       lead       to        Maurer's
depression?
          During          trial,        Maurer            produced             evidence          that       after           the    car
accident          he was depressed.                         This        depression             lead     Maurer          to leave
the family             ranch        and contributed                  to his            "course        of life"          damages.

                                                                    9
Clausen                 and      Tucker            attempted                  to        introduce                     evidence                    that       Maurer

became             depressed                and          left           the        ranch             because                of        other               reasons.

Specifically,                        an     event               occurred                 in      August                1990           where               Maurer's

former         girlfriend's                    neck             was broken                    during           an altercation                             with      him

and which                 resulted            in        her          being         rendered                quadriplegic                            (the      Miller

incident).                      In    December                  1990,         she        filed             a civil               suit             against           him

which         was              settled             in          August           1991.                     In         addition,                     Maurer           was

criminally                    charged        with              aggravated                assault,                a felony.                        Following              a

jury       trial          he was acquitted                             from        the        felony            charge            in        January              1993.

           Maurer                claims            the           evidence                 was             inadmissible                        because                the

defendants                      offered                 no       proof              linking                    Maurer's                     psychological

condition                 with        the     Miller                 incident             and that                   the     defendants                      merely

wanted             to         ask       a    highly                  prejudicial                     question.                        The           defendants

counter                 that          the      incident's                       link            to         Maurer's                   depression                    was

self-evident                     and that                the         jury       could           consider                   the        evidence               from        a

common              sense            viewpoint.                        The         District                    Court             acknowledged                        the

significant                      stress            of          the      incident                 and           its         resulting                      criminal

charges.                 Nevertheless,                         the      court           excluded                the        evidence                 because            of

its     prejudicial                       nature.

           Although                  relevant,                 evidence             may be excluded                              if         its          probative

value              is          substantially                         outweighed                      by        the          danger                  of       unfair

prejudice.                       Rule       403,          M.R.Evid.                      The         decision                whether                 or      not       to

exclude             such         evidence               will          not     be reversed                      by this            Court             unless            the
district                court         has abused                 its        discretion.                        Newville                v.     State,             Dept.

of      Family                Svcs.         (19941,                  267      Mont.            237,            260,         883         P.2d              793,        806



                                                                                   10
(citing          Kimes v. Herrin                  (1985),        217 Mont.            330,      333,    705 P.2d 108,
110) .
          We conclude             that      the Miller                incident         was certainly              a stress
provoking          event      which         may have contributed                       to Maurer's           depression
and its          probative          value         was not          substantially                outweighed           by its
prejudicial             nature.           We further               conclude           that     the     District         Court
abused its             discretion           in excluding               evidence         of the Miller              incident
for      that     reason.           The jury         should           have been given                the opportunity
to      determine         to what           degree,         if     any,       the      stress        from    the     Miller
incident          contributed               to    Maurer's             loss      of     established           course          of
life.           See 5 26-l-202,              MCA.
          The defendants                 intended          to introduce                evidence         of   the Miller
incident          during        cross-examination                      of Maurer             and his      witnesses           in
order       to rebut         evidence             that     Maurer         was depressed                as a result            of
his injury.              Before      this        rebuttal          could be admitted,                  the defendants
must have produced                   testimony            to the fact               that      the Miller          incident
contributed             to Maurer's              depression            and his         leaving         the ranch.
           [Wlhen the admissibility          of evidence depends upon proof
          of other    connecting        facts,    the court   may admit such
          evidence subject       to the condition       that further evidence
          be introduced      sufficient       to support a finding   of those
          connecting    facts.
Rule       104(b),         M.R.Evid.                 In     Kimes         and Newville,                 we held           that
evidence          of an event            which may have contributed                            to an injury             is not
admissible             unless        the         evidence          establishes               a causal        connection
between          the     event       and the             injury.           Newville,             883 P.2d          at     806;
Kimes,          705 P.2d at 110.



                                                                 11
         As we are remanding                       this         case to the District                      Court     for    a new
trial      on compensatory                    damages for                loss      of       established            course          of
life,       the         District           Court          should         admit          evidence          of      the     Miller
incident         if      such evidence               is offered               and the proper               foundation         has
been laid.
                                                            ISSUE 4
         Did the District                    Court        err    in denying             a new trial              on the issue
of      punitive             damages         because             evidence              of    Clausen's            employees'
work-related                 DUI convictions                was excluded?
         At trial,             the defendants'                  counsel         asked Clausen Distributing's
general         manager the following:
         During  that  period  of time until   Mr. Tucker's   work-
         related  DUI, how many other DUIs have your employees had
         that were work related?
The District                 Court     sustained            Maurer's            objection            to the question.
         On the          defendants'            motion            for        new trial,            the District            Court
reviewed          its        ruling        and concluded                that      evidence           of whether           any of
the employees                 of Clausen            Distributing                had ever           had a work-related
DUI was irrelevant.                        We will         review         the District               Court's        denial         of
a new trial              for       an abuse of discretion.                              See Baxter,              895 P.2d at
632.
         The defendants                    assert         that     prior         to Tucker's              accident         there
were       no         work-related              DUIs            among          Clausen's             employees.               The
defendants               claim        that      evidence                to      this        fact         would      vindicate
Clausen's             policy          of     tolerating             drinking                on     the     job     and     would
therefore               be     relevant         to        whether              punitive            damages         should          be
assessed           against            Clausen.              The court,                 however,           found     that      the

                                                                  12
jury's      award for         punitive             damages was based on Clausen's                               conduct         in
placing         Tucker      in a position                     where he was permitted                       to drink           and
drive       despite        Clausen's              knowledge               of Tucker's            two previous            DUIs.
We have stated             that      evidence                is irrelevant               when it      does not tend to
make any          requisite            factors                for        punitive             damages more          or       less
probable.              Derenberger           v.     Lutey           (1983),           207 Mont.         1, 11, 674 P.2d
485, 489.          Accordingly,              the DUI records                         are irrelevant        because they
do not tend            to disprove           the egregiousness                          of Clausen's           conduct        for
which       the jury        assessed          an award of punitive                             damages.
         We therefore              conclude              the        District            Court     did    not     abuse        its
discretion         in denying              a new trial               for       admissibility            of evidence           and
hold     that     the District              Court            did not err               in denying        a new trial           on
the issue         of punitive              damages.
                                                              ISSUE 5
         Did     the      District           Court            err        in     denying        a new trial           because
instructions              were        given             to      the           jury      on     Clausen's         vicarious
liability         for     punitive           damages?
         The District             Court      instructed                  the jury         on vicarious          liability.
Clausen          contends          that           the        pattern             instruction            given       was       not
intended         for     punitive          damage actions                       and was thus            not appropriate
in this         case.      On a motion              for        new trial,               the court        concluded           that
the instruction              was a correct                     statement              of Montana         law and giving
it   was not grounds                 for     a new trial.
         The jury           returned              a verdict                   against         Clausen      finding           that
Clausen         should       "be assessed                    punitive            damages as a result                   of     its
conduct."              Clausen's           argument             that           the     jury     instruction          was not

                                                                    13
appropriate                       is        moot       because                 the         jury         found             Clausen         liable             for
punitive               damages                based         on its              own conduct                     under         s 27-1-221,                  MCA,

rather           than            under         a vicarious                 liability                    theory.              In    seeking           review

of      an instruction,                         the        party         claiming                 error            must      show prejudice                   in

order           to     prevail.                     Hall     v.      Big          Sky Lumber                       & Supply,         Inc.           (1993),

261       Mont.             328,             332,      863         P.2d          389,             392         (citing          Walden          v.         State

(1991) I 250 Mont.                             132,        818 P.2d                  1190).                In this           case,        Clausen           was

not      prejudiced                     by the         court's             instruction                        because          the      jury        did     not

assess           damages                    against         Clausen                  for        Tucker's                conduct         but         for      its

own.

           We will                not         overturn             the         court's             denial            of     a new trial               absent

an abuse               of        discretion.                  Baxter,                 895 P.2d                at     632.         We conclude                the

District               Court            did     not        abuse         its         discretion,                    and therefore,                  did      not

err        in        denying                 a new         trial           because                 the         appropriateness                       of      the

instruction                      was a moot                point.
            In        summary,                 we reverse                 the          District                Court's            grant        of         a new

trial           on the             issue         of punitive                    damages,                and we affirm                   the    District

Court's               grant            of     a new trial                 on the                issue          of       compensatory                damages

for        loss             of         established                  course                 of      life.                We also           affirm             the

District                Court's               denial          of     a new trial                           on the           issues        of    employee

work-related                       convictions                 and jury                    instructions.                       On remand              to     the

District               Court            for     new trial,                 we direct                    the        court      to admit          evidence

of      the          Miller             incident             so long                 as the           proper               foundation           has        been

laid.


                                                                                                           Justice

                                                                                     14
we concur:




             15
