                                     No.      95-225
              IN THE SUPREMECOURT OF THE STATE OF MONTANA
                                           1995


W BAR N SHEEP & CATTLE CO.,           INC.,                         jzqf
a Montana Corporation,                                               /       ,*.
                                                                         ,y: !,;-&<
              Plaintiff      and Appellant,                              /\\jr; 2 2 i!%
         v.
                                                                      !<;j $),;f/$
MEATS OF MONTANA, INC., a Montana                               ';J?;:ER%
                                                                       OF, sqw!giyE‘XpFn
                                                                    grr".TE Md!rwk>
                                                                           k;ii-
Corporation, and NORWEST BANK OF BILLINGS,
              Defendants      and Respondents.



APPEAL FROM:         District  Court of the Thirteenth Judicial District,
                     In and for the County of Yellowstone,
                     The Honorable Robert W. Holmstrom, Judge presiding.


COUNSEL OF RECORD:
              For Appellant:
                     Arnie    A. Hove, Attorney        at Law, Circle,          Montana

              For Respondents:
                     Michael B. Anderson, V. Ann Liechty;   Gannett,
                     Anderson & Liechty,  Billings, Montana



                                        Submitted      on Briefs:         August      3, 1995
                                                         Decided:          August     22, 1995
Filed:
Justice       W. William          Leaphart            delivered                 the Opinion                of the Court.


       Appellant,           W Bar N Sheep & Cattle                                    Company (W Bar N),                        filed
suit       against        Meats       of     Montana,               I~C.            (MOM), and Norwest                          Bank,
Billings,        alleging         actual          fraud.                The matter                  was tried            before            a
jury   which         returned         a special              verdict             finding            that        Norwest         Bank,
Billings        was not         guilty           of        fraud.               W Bar            N appeals              from        that
verdict.         We affirm.
Backqround
       Wilmer         Pawlowski            and Nora Pawlowski                              are     shareholders                in    the
appellant        corporation            W Bar N.              MOMwas engaged in the business                                           of
purchasing,           slaughtering,               and selling                     processed               meat of          cattle.
The Pawlowskis            are also shareholders                           in MOMand have been since                                  MOM
originated.             When MOM was first                     formed,                it     sought            financing            from
Norwest       Billings.          Norwest          Billings              declined                 to offer         financing            to
MOM but       suggested         that        MOM contact                  Norwest             Business            Credit,            Inc.
(NWBC) a sister             corporation                in Minnesota.                        NWBC agreed                to finance
MOM and         provide           a     line          of      credit                upon          certain             conditions.
Accordingly,            MOM granted               a        security                 interest              to     NWBC on             all

property,         receivables               and       intangibles                     in         return         for      a credit
agreement        with     NWBC.
       In      October       1990,          as        part         of         the         financing             arrangements,
Norwest        Billings           and       MOM entered                        into          a     collateral              account
agreement        whereby MOM agreed to deposit                                      all     collections                receivable
and    other         cash       proceeds              of      the             collateral              security             in        the
"collateral          account."             MOMinvoiced                  its      meat        sales        with        payments         to

                                                               2
be sent directly                     to a "lockbox"                         from which Norwest                   Billings         was to
retrieve             the funds            and deposit                      them in the collateral                     account.             As
MOMpaid              its     debt     to NWBCin this                             fashion,      the monies available                        in
the line             of credit            were correspondingly                              increased.
          On November                     1,      1990,               Herb          Kelsey          of     Norwest          Billings,
contacted             0. Lee Meyers,                       secretary               of MOM, to inform                 him that           the
MOM cattle                 purchase        account                   was overdrawn             by $90,000             and that          the
checks         would be returned                           if        they     were not covered.                      0. Lee Meyers
then contacted                 Wilmer Pawlowski                             and advised         him that          $90,000 had to
be wired             to MOM's cattle                       purchase               account       by 2:00          p.m.       or checks
would          not         be honored            by Norwest                      Billings       and the            MOM operation
would be taken                 over.           Mr. Meyers further                           stated        to Wilmer Pawlowski
that      if    Pawlowski            wired            the money to MOM's account,                                Pawlowski         would
be repaid              from     the        proceeds                   of     sale      of processed              meats.           Wilmer
Pawlowski              spoke with               Herb Kelsey                      and claimed              that     he demanded a
writing          from Kelsey                granting                  assurances             that        he would        be repaid.
Pawlowski              testified               that         Kelsey           said      he would             send something                 in
writing           within            ten        days             to    two        weeks.         Kelsey           testified          that
Pawlowski              did    not      request                  a writing            and no writing                was issued              by
Norwest          Billings           by way of a promise                             by Norwest            Billings       to pay for
any obligation                 of MOM. In any event,                                   Wilmer            Pawlowski,         on behalf
of W Bar N wired                     the $90,000                      to MOM's cattle                    purchase       account         and
Norwest          Billings             honored                   the        checks      in     question.               MOM did           not
reimburse              the     $90,000                to        W Bar            N and W Bar               N then       filed       suit
against          MOM and against                      Norwest               Billings         on the basis             of fraud.             A
default          was taken                against                MOM and appellants                       proceeded          to    trial

                                                                             3
against          Norwest         Billings.
Issues       oresented             for     review:
       I    Did the District Court err in excluding the testimony                                                              of
Jeanne Marie Charter on the grounds that the offered    testimony                                                             was
irrelevant?
       II   Did the District    Court  err   in                                             giving          court's          Jury
Instruction    No. 13 as an accurate statement                                              of law?
      III  Did the District    Court properly    exclude testimony     from
Wilmer Pawlowski regarding     lost profits   on the grounds that it was
improper lay testimony,     improper expert testimony    and speculative
in nature?
                                                                  I
           Did     the       District          Court        err        in   excluding                the     testimony          of
Jeanne Marie                Charter       on the grounds                 that     the offered               testimony         was
irrelevant?
           This        Court's          standard       of     review            in     addressing              evidentiary
rulings          is one of "manifest                   abuse of discretion."                              In other     words,
questions              of    admissibility             of     evidence               are     left         largely      to     the
discretion              of the trial           court        and will            not be overturned                   except      in
cases of manifest                   abuse of that            discretion.                   Zugg v. Ramage (1989),
239 Mont.               292,       296,      779 P.2d             913,      916.            W Bar          N offered          the
testimony              of a Ms. Jeanne Charter,                         another            shareholder          of MOM. W
Bar N claimed               that      Charter      had been involved                       in a situation             similar
to that          of W Bar N, in that,                       in the summer of 1990,                           the     Charters
personally              advanced          funds    to the cattle                 purchase             account        on MOM's
request.           Norwest          Billings       objected             to the Charter                testimony         on the
grounds           of    relevancy           and on the                grounds         the     Charter          transaction
occurred           subsequent             to    the     Pawlowski/W                  Bar N transaction.                       The
District           Court       upheld       the objection                noting        that         the    "issue     here is

                                                                  4
whether        or        not        the      bank       has     made some assurance                       to       [Wilmer
Pawlowskil          .        The issue         isn't      whether          something        happened with                this
matter       that        was some 45-days                  or two months later."                        On appeal,              W
Bar      N contends                 that     the       Charter         testimony           was relevant                under
Montana       Rules            of     Evidence,          Rule       406,        because     it     demonstrated                 a
routine        practice               of     Norwest           Billings.             Rule        406,      M.R.Evid.,
provides       as follows:
                  (a) Habit and routine    practice   defined.  A habit is
          a person's      regular   response     to a repeated    specific
          situation.      A routine   practice     is a regular  course of
          conduct of a group of persons or an organization.
                  (b) Admissibility.      Evidence                          of habit or of routine
          practice,    whether corroborated      or                         not, and regardless    of
          the presence of eyewitnesses,         is                         relevant  to prove that
          conduct on a particular        occasion                          was in conformity    with
          the habit or routine       practice.
                  (c) Method of proof.      Habit or routine   practice                                         may
          be proved by testimony         in the form of an opinion or                                             by
          specific     instances     of conduct sufficient    in number                                           to
          warrant     a finding     that the habit    existed   or that                                         the
          practice     was routine.
          Rule 406, M.R.Evid.,                      clearly          does not work to the benefit                          of
W Bar N with                 regard        to the Charter             testimony.            Whatever           routine          W
Bar N was attempting                       to establish             would not have been "routine"                          by
the   time     Wilmer           Pawlowski           wired       funds      to MOM's account               if    the only
similar       event           (the     Charter          loan)       occurred        at a later           date.          Rule
406(c)        requires                evidence            of     specific           instances            of      conduct
sufficient              in    number to warrant                     a finding        that        the    practice          was
routine.            One other              instance       is not sufficient                 to meet this               test.
Furthermore,                 the      Charter          testimony,          at     best,     would        establish              a
routine      by MOMwhich cannot                         be characterized              as a routine              practice
by Norwest          Billings.               Accordingly,             we hold        that    the District               Court
                                                                5
did not abuse its                discretion               in excluding                the testimony             of Jeanne
Charter.


                                                             II
        Did the District                 Court       err     in giving            court's         Jury     Instruction
NO.     13 which          sets      forth          the     provisions                 of     § 30-4-401(I),            MCA,
allowing      a bank to create                     an overdraft?
        It   is     within         the     trial          court's          discretion            to decide          how to
instruct      the jury,            taking          into     account          theories           of the contending
parties,       and the           reviewing           Court          will        not        overturn       the    district
court      except        for    abuse of discretion.                         Hall          v. Big Sky Lumber and
Supply,      Inc.        (1993),         261 Mont.          328,         332,     863 P.2d 389,             392.
        Court's          Jury    Instruction               No.      13     read as follows:
              A bank may charge against a customer's  account only
        items which are properly   payable.   An item is properly
        payable if it is authorized    by the customer and is in
        accordance with an agreement between the customer and the
        bank.
The above instruction                     was adapted               from        § 30-4-401(l),              MCA, which
provides:
              A bank may charge against the account                                            of a customer
        an item that is properly   payable from that                                            account even
        thoush the char-se creates     an overdraft.                                             An item is
        properly  payable if it is authorized   by the                                          customer and
        is in accordance with any agreement between                                             the customer
        and the bank. [Emphasis added.]
        W Bar N objected                  to the deletion                   of the underlined                   statutory
language          from     the     jury       instruction.                      W Bar         N claims          that        the
language      "even though               the charge creates                      an overdraft"             is relevant
because       Herb         Kelsey,          on behalf               of      Norwest           Billings,          had        the
discretion          to honor         the      checks         in the amount of                     $90,000,        thereby
                                                              6
creating          an overdraft                situation             for MOM. We hold that                     the District
Court       did    not abuse its                    discretion              in giving            Jury   Instruction          No.
13 without              the overdraft                language             included.
         In presenting                 its     fraud        claim          against           Norwest    Billings,          W Bar
N was not prejudiced                         by the exclusion                       of the overdraft                language.
At best,          the language                in question                 would have given                 Mr. Kelsey        the
discretion              to     honor         or dishonor                 the       checks.          W Bar N, however,
would       have no legal                    basis        upon which               to    fault      Kelsey      or Norwest
Billings          for    failure         to exercise                 that      discretion           in the manner that
W Bar N preferred.




         Did the District                     Court properly                   exclude         testimony       from Wilmer
Pawlowski           regarding                lost         profits             on    the       grounds        that     it    was
improper          lay        testimony,             improper             expert         testimony       and speculative
in nature?
         Since          the      jury         arrived           at        a     defense          verdict       finding        no
liability          by Norwest            Billings,             it     was not necessary                    to consider       the
issue       of damages and the exclusion                                  of damage evidence                 would,    at the
most,       be harmless            error.            Meinecke v. Skaggs (1949),                             123 Mont.      308,
312,        213 P.2d           237,      239.             Accordingly,                  we need not          address       this
issue.
         Affirmed.
         Pursuant             to Section             I,    Paragraph               3 cc),     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

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with   the Clerk   of the Supreme Court   and by a report   of its   result
to Montana Law Week, State     Reporter   and West Publishing    Company.




We concur:




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