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No. 86-458
IN THE SUPREME COURT OF THE STATE OF MONTANA
1987

YELLOWSTONE CONFERENCE OF THE
UNITED METHODIST CHURCH,

Plaintiff and Appellant,
-VS-

D.A. DAVIDSON, INC., LARRY DOVER,
WARREN DREW and DICK HUGHES,

Defendants and Respondents.

APPEAL FROM: District Court of the Fourth Judicial District,
In and for the County of Missoula,
The Honorable James B. Wheelis, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Paterson, Marsillo, Tornabene & Schuyler; Charles J. Tornabene argued, Missoula, Montana
For Respondent:

Mulroney, Delaney & Scott; Dexter L. Delaney argued for D.A. Davidson, Dover and Hughes, Missoula, Montana Milodragovich, Dale & Dye; Lon J. Dale, Missoula, Montana David Rodli argued for Drew, Missoula, Montana
Submitted:  May 28, 1987  
Decided:  September 10, 1987  
Filed:  

. ~-
Clerk

Mr. Chief Justice J. A. Turnage delivered the Opinion of the
Court.

Plaintiff Yellowstone Conference of the United Method-
ist Church (Church) appeals an order of the Fourth Judicial
District, Missoula County, dismissing its claim following
presentation of the Church's case, for failure to file the
claim within the required time period. We affirm.

The following issues are raised on appeal:

1.
Did the District Court abuse its discretion when
the court denied the Church's motion to amend its complaint?


2.
Did the District Court err when it held that S 27-2-204 (1) , MCA, barred the Church's cause of action?

3.
Did the District Court abuse its discretion when it
failed to specifically separate its findings of fact and
conclusions of law?



Plaintiff and appellant Church, a Montana corporation,
maintained financial accounts with funds received from local
Methodist church donations. Donations received by the Church
were disbursed to fund various Methodist church programs,
including the clergymen's pension fund. The Church's monthly
balance in these accounts varied greatly, fluctuating between
$20,000 and $300,000. Annually, $200,000 to $500,000 flowed
through the Church's accounts.

Defendant Larry Dover was hired in 1969 as the Church's
treasurer. Dover's duties included bookkeeping, payment of
bills and. a general responsibility for the Church's financial
accounting. At the time Dover became the Church's treasurer,
he was employed as a loan officer by Midland National Bank.
Dover had worked for Midland since 1955. Dover later moved
to Missoula and became employed by First Bank Southside.
Dover kept the Church funds invested at First Bank Southside.
In 1970 and 1971, Dover's annual income was between $10,000
and $11,000.

In 1971, Dover invested with D. A. Davidson $20,000 of

the Church's funds. Dover testified that he wanted to become
a "hero" by investing the Church's money in stocks and secu-
rities and thereby increasing the Church's pension funds.
Later, Dover opened a $20,000 account under the name of "CB
Radio Club of America."

From 1972 to 1975, defendant Warren Drew was D. A.
Davidson's account representative. Drew never requested
Church authorization from Dover to invest Church funds. Drew
encouraged Dover to invest in "speculative stocks." In 1974,
50 percent of the Church's portfolio was invested in specula-
tive stock. In 1977, Dover personally loaned Drew $10,000
that Dover had wrongfully taken from the Church.

In July 1976, defendant Richard Hughes became D. A.
Davidson's account representative. Hughes maintained the
Church's high investment ratio of speculative stock. In 1976
Dover invested $40,000 into a Missoula subdivision project
located on Grant Creek. Additionally, Dover opened an ac-
count with D. A. Davidson for each of his three children.
His children's investment of Church funds totaled approxi-
mately $30,000.

In 1974, Dover requested the Council of Finance and
Administration (COFA) to pass resolution granting Dover
authority to "sell some stocks." Reverend Hugh Herbert,
Chairman of COFA, signed approximately twenty stock author-
ization forms. In January 1978, Dover contacted Reverend
Hugh Herbert and again requested that Herbert, as chairman of
COFA, give approval authorizing Dover to invest Church funds
in stocks and securities. Reverend Herbert granted Dover's
request and Dover invested additional Church funds.

From 1971 to 1978, the Church employed the accounting
firm of Galusha, Higgins, and Galusha to annually review the
Church's finances. Following the audit, the Galusha firm

customarily presented its findings to Dover. Dover passed
the audit information on to COFA. Dover did not present the
audit itself, but rather gave general information concerning
the Church's financial condition. In June 1978, Dover failed
to present an audit statement to COFA at the annual meeting.
Dover assured Reverend Herbert and Bishop Wheatley, and the
members of COFA that the audit statement would be forthcom-
ing. Dover also spoke with Reverend Herbert on numerous
occasions during 1978. Dover told Herbert the Church was
experiencing financial difficulties but assured Herbert by
year's end, "[Tlhis would all be straightened out."

In December 1978, Dover contacted Herbert and stated the Church was facing serious financial problems "due to the poor stock market." Herbert then contacted Bishop Wheatley and, the new chairman of COFA, Reverend Wilbur Whanger on or about December 15, 1978. Herbert notified them of Dover's improprieties and the resulting financial problems. In January 1979, COFA met to discuss the Church's financial problems. At that time, Dover told COFA that he had both invested and wrongfully taken Church funds. Additionally, Dover told COFA that many of the Church's investments had failed. As a result of the January 1979 COFA meeting, Dover was terminated as the Church's treasurer. Dover later plead- ed guilty to felony theft,

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Montana Law