Huebsch v


                                                 Huebsch v. Pegg
                                              Decided March 10, 1998
                                        (NOT TO BE CITED AS AUTHORITY)

                                                               No. 97-447

                       IN THE SUPREME COURT OF THE STATE OF MONTANA

                                                             1998 MT 48N

                                                      JOANNE HUEBSCH,

                                                    Plaintiff and Respondent,

                                                                      v.

                                 D. RICHARD PEGG and SHORELINE MARINE
                                   CORPORATION, a Washington corporation,

                                                   Defendants and Appellants

                         APPEAL FROM: District Court of the First Judicial District,

                                        In and for the County of Lewis and Clark,

                                  The Honorable Jeffrey Sherlock, Judge presiding.

                                                   COUNSEL OF RECORD:

                                                            For Appellants:

                                     Thomas S. Winsor and Michael Scott Winsor;

                                            Winsor Law Firm; Helena, Montana

                                                           For Respondent:

                                         Gary L. Davis; Luxan & Murfitt, PLLP;

                                                          Helena, Montana

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                                           Submitted on Briefs: February 5, 1998

                                                    Decided: March 10, 1998

                                 Justice Trieweiler delivered the opinion of the Court.

¶1 Pursuant to Section I, paragraph 3(c), Montana Supreme Court
1996 Internal Operating Rules, the following decision shall not be
cited as precedent but shall be filed as a public document with the
Clerk of the Supreme Court and shall be reported by case title,
Supreme Court cause number, and result to the State Reporter
Publishing Company and to West Group in the quarterly table of
noncitable cases issued by this Court.

¶2 Joanne Huebsch filed a complaint in the District Court for the
First Judicial District in Lewis and Clark County against D.
Richard Pegg to recover damages and unpaid wages which she alleged
were due based on her former employment relationship with Pegg.
After a trial, a jury found in favor of Huebsch. Pegg moved for a
new trial. The District Court denied the motion. Pegg appeals
from the order denying his motion for new trial and from the
judgment of the District Court. We affirm the District Court.

¶3 Pegg raises six issues on appeal:

¶4 1. Did the District Court err when it allowed Huebsch to
allege breach of the covenant of good faith and fair dealing even
though the Wrongful Discharge From Employment Act preempts bad
faith claims when related to employment?

¶5 2. Did the District Court err when it allowed evidence of
the parties' affair and other sexual matters even though the claim
had not been previously submitted to the Human Rights Commission?

¶6 3. Did the District Court err when it allowed Huebsch to
present evidence of the parties' sexual relationship and Pegg's
overall business practices?

¶7 4. Did the District Court err when it allowed Pegg to

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proceed without counsel after the writs of attachment had allegedly
rendered him unable to obtain other counsel?

¶8 5. Did the District Court err when it refused to reject the
jury's special verdict?

¶9 6. Did the District Court err when it denied the motion for
new trial?

                    FACTUAL BACKGROUND

¶10 In December 1992, D. Richard Pegg and his Shoreline Marine
Corporation purchased Frontier Town, a "resort" property near
Helena, which consisted of a bar, restaurant, gift shop, and
cabins. Joanne Huebsch, who had worked at Frontier Town since
1967, was retained by Pegg to manage the business. Among other
duties, she was responsible for all payroll and accounting.
P11 Pegg was married to Joan Pegg, who lived in Washington state.
Shortly after he purchased Frontier Town he began a relationship
with Huebsch. Based on Pegg's promises to divorce his wife and
marry Huebsch, Huebsch sold her mobile home and moved into his
apartment at Frontier Town. Based on her relationship with Pegg,
Huebsch began to defer part of her wages in order to help the
struggling business. She also occasionally made loans to the
business.

¶12 In October 1994, Pegg's wife came to Frontier Town. A
confrontation occurred among the parties and Joan allegedly fired
Huebsch. Before she left, however, Huebsch demanded a note from
Pegg stating that he owed her $30,000, a figure which they had
discussed a few weeks before. The note provided that $15,000 be
paid within a week and that the remainder be paid in the form of
twelve post-dated checks. When Joan left Montana a few days later,
Pegg requested that Huebsch come back to live and work at Frontier
Town. She agreed to do so. On October 12, 1994, however, he
demanded that she surrender the accounting books and affirmed her
termination. He wrote a second note confirming the amount that he
owed her, and that he had paid her $5,000; at one point in the note
he referred to the amount as a loan, but then later, supposedly
after Huebsch demanded that he change the language, he described it

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as wages. Pegg paid Huebsch $5,500 before he stopped payment on
the remaining checks.

¶13 On August 25, 1995, Huebsch filed a complaint in the District
Court to recover the remaining amount owed. The complaint made
four claims: (1) a statutory wage claim, including a claim for
attorney fees and costs; (2) a claim for the amount owed pursuant
to the notes; (3) a wrongful discharge claim which alleged a
special relationship, and included a claim for damages for
emotional pain and mental anguish; and (4) an intentional
infliction of emotional distress claim in which she sought special
and punitive damages. Pegg denied the allegations and asserted
that Huebsch had mismanaged the company's financial
responsibilities.

¶14 Huebsch feared that Pegg would sell Frontier Town and leave
the state and, therefore, she received from the District Court a
writ of attachment against the business. Due to the financial
constraints placed on Pegg as a result of the writ, the District
Court later released the writ. However, upon Huebsch's request, it
re-issued the writ on two subsequent dates, with additional terms
and conditions to ease the potential burden on Pegg. After the
second writ attached, counsel for Pegg withdrew, and Pegg proceeded
pro se through the trial.

¶15 Beginning on February 10, 1997, a four-day jury trial was
held. The District Court made significant attempts to accommodate
and assist Pegg during the proceedings; however, he made very few
objections during the trial. The jury returned a special verdict
in which it found that Huebsch was entitled to back wages in the
amount of $24,500. It denied all of her other claims for damages,
although it found that Huebsch incurred $1,900 in medical expenses
as a result of her discharge. On March 31, 1997, the District
Court issued a judgment against Pegg in the amount of $106,128.44,
which included a 110 percent penalty pursuant to Sec. 39-3-206,
MCA, interest, and attorney fees and costs pursuant to Sec.
39-3-214, MCA. By stipulation, the judgment did not include the
$1,900 awarded by the jury for medical costs.

¶16 Pegg filed multiple post-trial motions, including motions for

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rehearing and a new trial, and to set aside the judgment. On May
15, 1997, the District Court denied the motions.

                          ISSUE 1

¶17 Did the District Court err when it allowed Huebsch to allege
breach of the covenant of good faith and fair dealing even though
the Wrongful Discharge From Employment Act preempts bad faith
claims when related to employment?

¶18 Pegg asserts that evidence of the parties' relationship in
support of the claim for bad faith should not have been allowed
because bad faith is preempted by Sec. 39-2-905(3), MCA, of the
Wrongful Discharge From Employment Act. He asserts that he was
prejudiced by admission of evidence of his relationship with
Huebsch.

¶19 However, when the wrongful discharge claim was submitted to
the jury, bad faith was never mentioned. In fact, the special
verdict form asked whether Pegg acted with malice toward Huebsch.
Malice was a proper issue pursuant to Sec. 39-2-905(2), MCA.
Furthermore, the jury ultimately denied the wrongful discharge
claim and awarded no damages for that claim, so that any error
related to that claim would have been harmless. Accordingly, we
conclude that reversible error did not occur as a result of this
issue.

                          ISSUE 2

¶20 Did the District Court err when it allowed evidence of the
parties' affair and other sexual matters even though the claim had
not been previously submitted to the Human Rights Commission?

¶21 Pegg asserts that the District Court abused its discretion and
denied his substantial rights when it allowed evidence of the
parties' relationship. He contends that the matter should first
have been brought before the Human Rights Commission, and since it
was not, all evidence of the sexual relationship should have been
excluded.



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¶22 We find no legal or factual basis for his assertion. The only
authority he cites in support of his contention is Secs. 49-1-101,
et seq., MCA, which refers generally to human rights. Contrary to
Pegg's suggestion, however, we decline to hold that anytime a
sexual relationship between parties is related to a dispute between
the parties, the case becomes a civil rights issue that must first
go to the Human Rights Commission. We conclude that the District
Court did not err when it admitted evidence of the parties'
relationship, even though the matter had not first been presented
to the Human Rights Commission.

                          ISSUE 3

¶23 Did the District Court err when it allowed Huebsch to present
evidence of the parties' sexual relationship and Pegg's overall
business practices?

¶24 It is well-established that the District Court has broad
discretion to determine whether evidence is relevant and
admissible. See Rafanelli v. Dale (1996), 278 Mont. 28, 45, 924
P.2d 242, 253. Absent an abuse of that discretion, we will not
overturn the District Court's determination. See Burlingham v.
Mintz (1995), 270 Mont. 277, 279, 891 P.2d 527, 529.
P25 Here, Pegg suggests that we apply the doctrine of plain error
to conclude that the proceedings were fundamentally unfair as a
result of the District Court's admission of this evidence.
However, the evidence to which Pegg objects was offered in response
to allegations made by Pegg and was relevant to issues he raised.
Accordingly, we conclude that the District Court did not abuse its
discretion when it admitted the evidence about which Pegg now
complains.

                          ISSUE 4

¶26 Did the District Court err when it allowed Pegg to proceed
without counsel after the writs of attachment had allegedly
rendered him to obtain other counsel?

¶27 Pegg's principal contention is that his substantial rights
were denied and that the proceedings were fundamentally unfair as

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a result of "the improper match-up of a pro se litigant and an
experienced competent attorney." Among other things, he also
contends that the writs rendered him indigent so as to force him to
proceed pro se, and that he was denied his right to counsel.
P28 First, we reject Pegg's implication that it is per se plain
error for a district court to allow a party to proceed pro se
against an experienced attorney. The District Court advised Pegg
of the risk if he proceeded pro se and suggested that he obtain new
counsel. However, it is clearly a party's prerogative to represent
himself, and the record shows that Pegg believed he was capable and
prepared to do so. In addition, the District Court was lenient
toward Pegg during the proceedings and allowed him substantial
latitude when he questioned witnesses. Finally, a constitutional
right to counsel exists only in criminal matters. See Art. II,
Sec. 24, Mont. Const.

¶29 We also reject Pegg's contention that the District Court erred
when it issued the writs. The record shows that the District Court
tailored the writs so as not to unfairly cripple Pegg financially,
and that Pegg nonetheless failed at times to comply with the
conditions created for his benefit. In addition, the record also
shows that Pegg had an income and was neither indigent nor unable
to afford counsel as a result of the writs. Even if the writs
limited his ability to afford counsel, we refuse to hold here that
a plaintiff must defer her recovery and a district court must halt
its proceedings until a defendant is able to afford the counsel of
his choice. Accordingly, we hold that the District Court did not
err when it allowed the trial to proceed while the defendant
represented himself.

                          ISSUE 5

¶30 Did the District Court err when it refused to reject the
jury's special verdict?

¶31 Pegg contends that the special verdict form was deficient on
its face because it was unclear which of the four claims the jury
would rely on as the basis for an award of medical expenses, and
that the District Court abused its discretion when it upheld the
special verdict. On that basis, he contends that the verdict was

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inconsistent and that it should be reversed. However, Huebsch
stipulated that the special verdict form, as it pertained to
medical costs, was improper on its face and waived the $1,900 jury
award for medical costs. Accordingly, the judgment did not include
an award for medical costs, and the error in the special verdict
form was of no consequence to the final verdict and award.

¶32 The jury rejected all of Huebsch's claims except for her wage
claim. The amount of the award was calculated based on the statute
that pertains to wage claims. Upon review of the record, we find
evidence to support the jury's findings. Furthermore, we conclude
that the portion of the special verdict form on which the jury and
the District Court relied to award Huebsch $24,500 is neither
unclear nor inconsistent. We therefore hold that the District
court did not err when it entered judgment based on the jury's
special verdict form.

                          ISSUE 6

¶33 Did the District Court err when it denied the motion for new
trial?

¶34 The standard of review of a district court_s ruling on a
motion for a new trial is whether the court abused its discretion.
See Hando v. PPG Industries, Inc. (1995), 272 Mont. 146, 149, 900
P.2d 281, 282. See also Brockie v. Omo Const., Inc. (1994), 268
Mont. 519, 525, 887 P.2d 167, 170; Estate of Spicher v. Miller
(1994), 260 Mont. 504, 506, 861 P.2d 183, 184. Pegg contends that
he should receive a new trial because a "manifest miscarriage of
justice has occurred." For all the reasons stated above, however,
we disagree. Accordingly, we conclude that the District Court did
not abuse its discretion.
P35 We affirm the judgment of the District Court. Pursuant to
Sec. 39-3-214, MCA, Huebsch is entitled to her attorney fees and
costs on appeal. Accordingly, we affirm the District Court's award
in the amount of $106,128.44, and award Huebsch the additional
attorney fees and costs that she has incurred on appeal.

                           /S/ TERRY N. TRIEWEILER
We Concur:

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/S/   J. A. TURNAGE
/S/   JAMES C. NELSON
/S/   W. WILLIAM LEAPHART
/S/   JIM REGNIER




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