PACIFICORP, Plaintiff, Appellee and Cross-Appellant, v. STATE OF MONTANA, Department of Revenue, Defendant and Appellant.
No. DA 10-0182
Supreme Court of Montana
May 4, 2011
2011 MT 93 | 360 Mont. 259 | 253 P.3d 847
Submitted on Briefs February 16, 2011.
For Appellee: Michael Green, Crowley Fleck PLLP, Helena; David J. Crapo, Crapo Smith, Salt Lake City, Utah.
JUSTICE RICE concurred, joined by JUSTICE NELSON.
JUSTICE NELSON specially concurred.
JUSTICE MORRIS delivered the Opinion of the Court.
¶1 Montana Department of Revenue (Department) appeals the judgment of the First Judicial District Court, Lewis and Clark County, reversing the State Tax Appeal Board‘s (STAB) conclusion that the Department had applied a “commonly accepted” method to assess the value of PacifiCorp‘s Montana properties. PacifiCorp cross-appeals the District Court‘s conclusion that sufficient evidence existed in the record to support STAB‘s conclusion that additional obsolescence did not exist to merit further adjustments to the Department‘s original-cost-less-depreciation indicator of value.
¶2 We review the following issues on appeal:
¶3 Does substantial evidence demonstrate common acceptance of the Department‘s direct capitalization method that derives earnings-to-price ratios from an industry-wide analysis?
¶4 Does substantial evidence support STAB‘s conclusion that additional obsolescence did not exist to warrant consideration of further adjustments to PacifiCorp‘s taxable value?
FACTUAL AND PROCEDURAL BACKGROUND
¶5 The Department centrally assesses about 130 companies every year. The Department issued its final 2005 ad valorem assessment of PacifiCorp‘s Montana operating properties on May 26, 2005. PacifiCorp appealed the 2005 assessment to STAB. STAB upheld the Department‘s assessment after a six-day hearing. PacifiCorp appealed. The District Court rejected the Department‘s earnings-to-price ratios method for appraising PacifiCorp‘s property and upheld the Department‘s conclusion that additional obsolescence did not exist.
¶6 PacifiCorp, a regulated electric utility company, owns electric generation property in Montana and nine western states. PacifiCorp provides electricity to 1.6 million consumers. PacifiCorp Holdings, Inc., a Delaware corporation, wholly owned PacifiCorp as of January 1, 2005. At that time, ScottishPower, a Scotland corporation, owned PacifiCorp Holdings, Inc.
¶7 ScottishPower announced on May 24, 2005, that it would sell all of the common stock that it owned in PacifiCorp to MidAmerican Energy Holdings Company (MidAmerican). MidAmerican agreed to purchase ScottishPower‘s common stock in PacifiCorp for $5.1 billion and assume approximately $4.3 billion of PacifiCorp‘s debt for a total sales price of $9.4 billion. The transaction closed on March 21, 2006.
¶8 The Department centrally assessed PacifiCorp‘s operating property in 2005 according to the unit method of valuation. The
¶9 The Department assessed PacifiCorp‘s value to be $8,581,317,664 according to the original-cost-less-depreciation method. The Department weighted the original-cost-less-depreciation indicator at 50%. The Department‘s assessment based on the direct-capitalization-of-net-operating-income indicator yielded a value of $7,359,184,623. The Department weighted the direct-capitalization-of-net-operating-income indicator at 40%. The Department weighted the other two uncontested indicators at 5% each. The Department reached a $7,837,244,000 correlated unit value for PacifiCorp‘s properties.
¶10 The Department reduced the correlated unit value by 10% for non-taxable intangibles.
¶11 PacifiCorp raised several issues before STAB regarding the Department‘s assessment. PacifiCorp challenged the Department‘s use of earnings-to-price ratios to calculate a direct-capitalization-of-net-operating-income indicator of value. PacifiCorp also argued that the Department‘s use of the original-cost-less-depreciation method did not comply with Montana law because the Department‘s method failed to adjust for obsolescence.
¶12 STAB heard lay and expert testimony from both parties during the six-day hearing. STAB decided that the Department had not overvalued PacifiCorp‘s properties. STAB upheld the Department‘s use of earnings-to-price ratios. STAB agreed that no additional obsolescence existed, even though STAB concluded that the Department had not separately analyzed obsolescence. STAB noted that PacifiCorp‘s $9.4 billion sale to MidAmerican supported the Department‘s conclusion that no obsolescence existed to warrant additional deductions to the Department‘s appraised value of $7.8 billion.
¶13 PacifiCorp appealed to the District Court. The court reversed STAB‘s decision regarding the earnings-to-price ratios method based on the court‘s conclusion that substantial evidence did not show common acceptance of the method. The court further determined that STAB wrongly had relied on the sales price of PacifiCorp to MidAmerican. The court concluded nonetheless that substantial, credible evidence in the record otherwise supported STAB‘s decision that no economic obsolescence existed.
¶14 The Department now appeals the court‘s conclusion regarding its use of earnings-to-price ratios. PacifiCorp cross-appeals the conclusion that no additional obsolescence existed to merit an additional deduction.
STANDARD OF REVIEW
¶15 We review a district court‘s conclusions of law for correctness. State v. PPL Mont., LLC, 2007 MT 310, ¶ 19, 340 Mont. 124, 172 P.3d 1241. We review a district court‘s order affirming or reversing an administrative decision of STAB to determine whether the findings are clearly erroneous and to determine whether STAB correctly has interpreted the law. Id. We defer to STAB‘s findings unless they are clearly erroneous, because STAB is particularly suited for settling disputes over the appropriate valuation of property. Id. at ¶ 45. A decision of STAB may be reversed or modified if STAB‘s findings, inferences, or conclusions are clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record. Dept. of Revenue v. Grouse Mt. Dev., 218 Mont. 353, 355, 707 P.2d 1113, 1115 (1985).
DISCUSSION
¶16 Does substantial evidence demonstrate common acceptance of the Department‘s direct capitalization method that derives earnings-to-price ratios from an industry-wide analysis?
¶17 The Department must assess all of a company‘s taxable property at 100% of its market value.
¶18 The Department must make its tax assessment according to commonly accepted methods and techniques for determining market value.
¶19 The Department typically derives a capitalization rate from comparable sales of similar properties. The unavailability of comparable sales information required the Department to use earnings-to-price ratios to calculate the capitalization rate for PacifiCorp‘s assessment. The Department followed the band of investment theory to derive a weighted average direct capitalization rate.
¶20 The Department separately had conducted its 2005 industry-wide Capitalization Rate Study for Electric Utilities. The Department relied on the study for PacifiCorp‘s assessment. The Department first selected comparable companies from the electric utility industry group in the Value Line Investment Survey. The Department then collected data related to those companies’ earnings and stock prices. The Department gathered its “earnings” data from the Value Line Investment Survey and its “price” data from Yahoo Finance. The Department used this information to derive earnings-to-price ratios. Earnings-to-price ratios represent the annual earnings per share of common stock divided by the average market price per share for common stock. The Department‘s earnings-to-price ratios represent, in its estimation, the calculations that would be used by willing buyers and sellers of electric utilities in the market. The Department used the earnings-to-price ratios to derive a capitalization rate of 6.5% that would be used in PacifiCorp‘s assessment.
¶21 The Department must rely on information derived from industry-wide analyses in part because the Department has no other way to obtain more relevant information for its tax assessment. The Department obtained some information from PacifiCorp‘s property tax manager, Norman Ross, at an informal hearing. Otherwise the Department had to rely on information from PacifiCorp‘s public filings with the Federal Energy Regulatory Commission (FERC) and the Securities and Exchange Commission (SEC).
¶22
¶23 As a regulated electric utility, PacifiCorp must file financial information with FERC. PacifiCorp provides audited statements of its financial status in a public filing called FERC Form 1. The Department used information from PacifiCorp‘s 2003 and 2004 FERC Form 1 filings to calculate PacifiCorp‘s average net operating income of $462 million. The Department divided PacifiCorp‘s average net operating income by the 6.5% capitalization rate to reach an estimated value for PacifiCorp of $7.1 billion. The Department made additional adjustments and reached a direct-capitalization-of-net-operating-income indicator of $7.3 billion.
¶24 PacifiCorp argues on appeal that other jurisdictions and appraisal textbooks generally have not accepted the use of an industry-wide analysis to derive a capitalization rate for appraising centrally assessed utility properties. The Department counters that expert testimony, textbook authority, and the Department‘s long-standing practice support its use of earnings-to-price ratios in calculating value. We agree.
¶25 Department employees and expert witnesses testified in support of the Department‘s use of earnings-to-price ratios. Department employees testified that the earnings-to-price ratios represent a standard methodology that the Department has used for several industries over several years. The Department‘s witnesses identified the Unit Valuation Standards of the National Conference of Unit Value States (NCUVS) as the Department‘s authority for use of the earnings-to-price ratios method. The Department admitted NCUVS‘s Unit Valuation Standards as a trial exhibit.
¶26 The Department presented the expert testimony of Brent Eyre, an Accredited Senior Appraiser with the American Society of Appraisers. Eyre testified that the earnings-to-price ratios method has been used widely to appraise centrally-assessed companies. He testified that 36 or 37 states conduct unit valuations of centrally assessed properties. Eyre confirmed that the NCUVS standards provide the basis for using earnings-to-price ratios in appraising property owned by centrally assessed companies. Eyre provided that the Department performed the “correct analysis” when it analyzed earnings-to-price ratios to derive a capitalization rate in light of the fact that complete sales of electric companies rarely occur. Eyre cited three appraisal textbooks that support use of the earnings-to-price ratios method under these circumstances, including one textbook described as “one of the most widely read textbooks on corporate valuation.”
¶27 Eyre also authored an expert report that evaluated the Department‘s appraisal. Eyre‘s report validated the Department‘s use of earnings-to-price ratios. Eyre conducted an independent appraisal of PacifiCorp. Eyre analyzed thirteen selected guideline companies and derived a capitalization rate of 6.3%. The Department had derived a rate of 6.5%. The similarity in rates, as well as Eyre‘s expert testimony and report, supports the reasonableness and validity of the Department‘s appraisal method.
¶28 The Department‘s expert, James Ifflander, also testified that the Department appropriately calculated value according to the direct-capitalization-of-net-operating-income method. Ifflander provided that sound financial theory supported the Department‘s method. Ifflander explained that financial analysts and investment banks routinely use earnings-to-price ratios to derive values of complex, integrated units, such as PacifiCorp. Both sophisticated buyers and sellers of electric utility assets, according to Ifflander, widely use the method employed by the Department. Ifflander provided three examples of mergers of electric utility companies where the parties had calculated value according to an earnings-to-price ratios method.
¶29 PacifiCorp challenged the Department‘s earnings-to-price ratios method. PacifiCorp‘s tax manager, Norman Ross, testified that none of the other states in which PacifiCorp operates used an earnings-to-price ratios method like that used by the Department in 2005. PacifiCorp‘s experts Hal B. Heaton and Thomas Tegarden testified that the general appraisal literature did not support the Department‘s use of earnings-to-price ratios in the direct capitalization method.
¶30 The District Court concluded that the NCUVS standards provided weak authority for upholding the Department‘s use of earnings-to-price ratios as a commonly accepted methodology. The court specifically expressed concern with an “admission” made by the Department‘s expert, Wilson, that he had not heard of NCUVS. Our review of the record reveals, however, that Wilson‘s “admission” arose randomly in the middle of unrelated testimony regarding depreciation and obsolescence. PacifiCorp‘s counsel stated immediately after Wilson‘s “admission” that he would follow-up on “that in just one moment then.” PacifiCorp failed to follow-up or ask Wilson about the “acceptance” of using earnings-to-price ratios by the appraisal community.
¶31 Wilson‘s expertise included public utility company issues, especially those issues relating to rate regulation. Wilson testified for the Department regarding whether the Department should have included obsolescence in its assessment of PacifiCorp. We disagree with the District Court that Wilson made an “admission” on the separate issue of the appropriateness of earnings-to-price ratios in the Department‘s assessment of PacifiCorp that requires reversal of STAB‘s conclusion. The remaining evidence in the trial record supports STAB‘s determination.
¶32 For example, the Department‘s expert on earnings-to-price ratios, Brent Eyre, testified that the NCUVS standards promoted the use of earnings-to-price ratios. Further, the Department admitted the NCUVS standards into evidence as a trial exhibit. The NCUVS standards explicitly advocate for the use of earnings-to-price ratios in a direct capitalization model. Other Department witnesses testified regarding their familiarity with NCUVS, including Kory Hofland, who currently served as the vice chair of NCUVS, and Department expert, James Ifflander, who had presented at NCUVS conferences. We disagree with the District Court that the isolated, out-of-context “admission” by Wilson, who testified primarily on obsolescence, provides grounds to reverse STAB‘s decision.
¶33 The District Court also relied on testimony from PacifiCorp‘s expert, Hal Heaton, that four other states disfavored use of the earnings-to-price ratios in the direct capitalization method. Heaton‘s testimony and his accompanying trial exhibit demonstrate that these states disfavored use of the method based on their concern that it too effectively captures the value of non-taxable intangible property and overestimates the taxable value of a company. The District Court misapprehended the record when it assumed that these other states disfavored the method because it caused inaccurate assessments altogether.
¶34 Montana appraisers initially must assess a business‘s entire operating system, including intangibles, at 100% market value and then deduct and adjust for exempt properties like intangibles.
¶35 The court also failed to recognize Eyre‘s explanation that the states identified by Heaton may have statutory schemes that adjust for intangible value differently than Montana‘s. Eyre compared Montana and Utah as an example. Both Utah and Montana
¶36 STAB sat in the best position to draw a conclusion from conflicting evidence. PPL Mont., LLC, ¶ 45. The District Court exceeded its scope of review and second-guessed STAB‘s decision.
¶37 Does substantial evidence support STAB‘s conclusion that additional obsolescence did not exist to warrant consideration of further adjustments to PacifiCorp‘s taxable value?
¶38
¶39 STAB concluded that the Department had failed its statutory duty to “fully consider reduction” in value for obsolescence. Nonetheless, STAB concluded that the Department‘s $7.1 billion appraisal reasonably reflected PacifiCorp‘s taxable value as shown by substantial evidence in the record and the $9.4 billion sales price. The District Court reversed in part and affirmed in part. The court reversed STAB‘s conclusion that STAB could consider the $9.4 billion sales price to verify the reasonableness of the $7.1 billion appraisal. The court affirmed STAB‘s decision to uphold the Department‘s $7.1 billion appraisal, however, based on substantial evidence in the record that otherwise supported the Department‘s conclusion that additional obsolescence deductions were not warranted.
¶40 PacifiCorp now raises three challenges to the Department‘s treatment of obsolescence. PacifiCorp first argues that the Department neglected its affirmative duty under
¶41 PacifiCorp bases its first argument that the Department neglected its affirmative duty under
¶42 Haller used information reported by PacifiCorp on FERC Form 1 to complete the original-cost-less-depreciation method of appraisal. She took the “original cost” value of $13.6 billion from PacifiCorp‘s FERC Form 1. She relied on PacifiCorp‘s reported depreciation value of $5.81 billion from PacifiCorp‘s FERC Form 1. Haller subtracted the reported depreciation value from the reported original cost value, made other adjustments, and reached a value indicator of $7.7 billion. PacifiCorp does not dispute the propriety of Haller‘s reliance on these figures from FERC Form 1.
¶43 Haller‘s supervisor, Kory Hofland, testified that the federal definition of depreciation that PacifiCorp used in its FERC Form 1 reporting included both functional and economic obsolescence. The federal definition of depreciation for the FERC filings includes “wear and tear, decay, action of the elements, inadequacy, obsolescence, changes in the art, changes in demand and requirements of public authorities.”
¶44 Depreciation studies by PacifiCorp‘s accountants as part of the FERC Form 1 filing reported that PacifiCorp‘s properties had depreciated $5.81 billion. As the Department observes, the $5.81 billion of depreciation reported by PacifiCorp would have included the types of economic forces that PacifiCorp claims could result in a loss of value, such as “changes in demand and requirements of public authorities.”
¶45 The Department employed three appraisers to assess annually the roughly 130 companies subject to central assessment. Haller and Hofland testified that they have never conducted or ordered a full depreciation study like the analysis that PacifiCorp would have them do. Haller and Hofland rely on the taxpayers’ public filings. They further testified that taxpayers have an opportunity to provide information regarding additional depreciation. Haller and Hofland testified that they would make further reductions or adjustments if a taxpayer could show that additional depreciable value existed.
¶46 Haller released her initial appraisal for PacifiCorp on April 29, 2005. PacifiCorp had an opportunity to respond to the initial appraisal and provide additional information. PacifiCorp responded with written submissions, participated in an informal hearing with the Department, and exchanged several emails with Haller. PacifiCorp asserted at these opportunities that the Department had failed to capture physical, functional, and economic obsolescence. PacifiCorp did not provide the Department, however, with a figure for how much obsolescence had not been captured. PacifiCorp likewise does not suggest on appeal that any additional obsolescence would have been found had further study been undertaken. PacifiCorp only provided the Department with an estimate of what PacifiCorp believed its taxable value should be.
¶47 PacifiCorp argued to STAB that about $2.6 billion of additional obsolescence existed. PacifiCorp based its argument on the testimony and report of its expert, Thomas Tegarden. Tegarden calculated obsolescence according to the income shortfall method. STAB rejected Tegarden‘s income shortfall approach because, among other reasons, it failed to account for income from properties that PacifiCorp had purchased with deferred income taxes. PacifiCorp has not challenged that decision. It contends on appeal, however, that STAB‘s rejection of the income shortfall method cannot be used as affirmative evidence that obsolescence did not exist.
¶48 Nothing in the record indicates that STAB used the rejection of the income shortfall
¶49 Given the absence of evidence that any alternative methods available to measure for obsolescence would have produced a different result once STAB rejected the income shortfall method, and given STAB‘s further finding that no economic obsolescence existed, we disagree with STAB‘s conclusion that the Department failed to fully consider all forms of depreciation in this case. STAB‘s sole finding of fact that “Haller did not do any additional study or analysis to determine if there was additional depreciation” does not support STAB‘s conclusion that the Department abrogated its obligation to “fully consider reduction in value caused by depreciation.” We also point out that STAB prefaced this finding of fact with the explanation that “Ms. Haller did not have any evidence of additional functional depreciation,” which resonates with Haller‘s testimony that she did not order an additional study because nothing indicated that unaccounted-for depreciation existed.
¶50 STAB nonetheless concluded that “[t]he Department‘s appraiser testified that she did not specifically analyze whether all forms of obsolescence, including economic obsolescence, existed.” STAB‘s conclusion that Haller did not “specifically analyze” does not follow from its finding that Haller “did not do any additional study or analysis.” We have searched the record to understand the basis for STAB‘s determination on this issue. The record contains no factual evidence or legal argument to support STAB‘s conclusion that the Department must “specifically analyze” obsolescence and failed to do so in this case. To the contrary, Haller testified that she did not believe the statute “charged [the Department] to go out and perform” additional obsolescence studies to fulfill its obligation to “fully consider reduction.”
¶51 The Concurrence correctly notes that this Court often gives deference to STAB‘s expertise on taxation matters. See e.g. Opinion, ¶ 15, 36. Such deference does not allow STAB, however, to make legal determinations unmoored from its own findings and the evidence in the record. PacifiCorp urged STAB to adopt the income shortfall method to measure possible obsolescence. STAB rejected this method. PacifiCorp bore the burden of proving the Department‘s method inadequate. PacifiCorp came forward with no evidence of additional obsolescence that the Department had failed to analyze.
¶52 The Concurrence believes it “unwise” to determine whether the Department satisfied its statutory duty to “fully consider reduction” because the Department has not appealed STAB‘s erroneous conclusion on this point. We disagree. PacifiCorp raised the obsolescence issue before STAB, the District Court, and this Court. STAB and the District Court concluded that the Department failed to analyze obsolescence adequately, but both ruled in the Department‘s favor anyway. The Department‘s decision not to appeal the erroneous conclusions makes sense in light of the fact that it prevailed on this issue before STAB and the District Court.
¶53 PacifiCorp specifically asserted as its first argument in its cross-appeal to this Court that “the Department ignored its affirmative, statutory duty to fully consider obsolescence in the cost approach.” PacifiCorp‘s Opening Br. 33. The Department argued in response that it had considered the effects of obsolescence when it calculated value under its original-cost-less-depreciation approach. The parties have raised, argued, and briefed the issue of whether the Department fulfilled its statutory obligation to “fully consider reduction in value” before STAB, the District Court, and this Court. The record and the briefs do not support the Concurrence‘s assertion that they have not. The Concurrence
¶54 The Department only has requested that this Court affirm the District Court. We may affirm a district court decision that is correct regardless of the district court‘s reasoning in reaching its decision. Conagra, Inc. v. Nierenberg, 2000 MT 213, ¶ 33, 301 Mont. 55, 7 P.3d 369. We affirm the District Court, but we will not affirm its adoption of STAB‘s incorrect determination that the Department had failed to analyze all forms of depreciation.
¶55 PacifiCorp finally argues that STAB placed too much reliance on the May 24, 2005, sales price. STAB concluded that PacifiCorp‘s $9.4 billion sales price provided a good indication that additional obsolescence did not exist to merit additional deductions to the Department‘s tax assessment of $7.1 billion. STAB found that the $9.4 billion sales price reflected the market value as defined in
¶56 The District Court rejected STAB‘s conclusion that STAB could consider the sales price of PacifiCorp. The court relied on Thomas Tegarden‘s statement that an appraiser generally may consider only information known or knowable as of the assessment lien date. The court concluded that this known or knowable principle applied to STAB. We disagree.
¶57
¶58 PacifiCorp‘s appeal of the Department‘s appraisal required that STAB hear the appeal and render a final, binding decision.
CONCLUSION
¶59 We affirm in part and reverse in part. Substantial evidence supports the Department‘s use of earnings-to-price ratios in its direct capitalization approach. We affirm the District Court‘s conclusions that additional depreciation deductions were not warranted and that the Department did not overvalue PacifiCorp‘s property.
¶60 We hold that
CHIEF JUSTICE MCGRATH, JUSTICES WHEAT, COTTER and BAKER concur.
JUSTICE RICE, concurring.
¶61 The Department challenges the District Court‘s reversal of STAB‘s finding that earnings-to-price ratios may be used within the “direct capitalization of net operating income” method of valuation under
¶62 In the cross appeal, PacifiCorp challenges the District Court‘s affirming of STAB‘s obsolescence determination, arguing that the Department‘s approach failed to satisfy the requirement in
¶63 The evidence cited by the Court was considered by STAB during the proceedings before it. STAB concluded that the Department “fail[ed] to consider economic obsolescence in its cost indicator as specifically required by statute. Section 15-8-111(2)(b), MCA.... ‘[T]he Board does not condone this failure on the part of the Department. There is a clear statutory duty for the Department to consider all forms of depreciation ....’ ” STAB Order, 35 (internal citation omitted); see also STAB Order, 33. The District Court affirmed this conclusion, stating that “the Department‘s cost approach calculation did not include a separate consideration of any reduction in value for obsolescence.” District Court Order, 10 (emphasis added). Then, the Department did not appeal this determination. The obsolescence issue undertaken by the Court-on which it reverses STAB and the District Court-has not been challenged on appeal and is not the focus of the parties’ briefing.
¶64 STAB ultimately concluded that the error in the Department‘s valuation method was essentially harmless under the circumstances, because post-lien date sale information demonstrated that no additional obsolescence existed. Nonetheless, STAB warned that “[i]n other cases, the Department‘s failure to consider economic obsolescence in its cost approach could prove seriously detrimental to the Department‘s valuation.” STAB Order, 35. I believe that the Court‘s wading into this issue is unwise. The Court is reversing complex evidentiary determinations which were not the focus of the appeal, were not briefed, and which fall within the expertise of the taxing authorities. I would not do so.
¶65 In response, the Court offers the vague assertion that the parties “have raised, argued, and briefed the issue of whether the Department fulfilled its statutory obligation to ‘fully consider reduction in value’ before STAB.” Opinion, ¶ 53. A careful search of
¶66 The Department‘s opening brief made only a passing reference to
¶67 The Court‘s decision today blindsides the parties, but prejudices PacifiCorp, which loses on the basis of an issue it never briefed. PacifiCorp did not brief the statutory interpretation issue because, under the statutes and rules governing the appeal process, it was unnecessary to do so. Today, PacifiCorp has learned the hard way that it cannot place its trust in the rules governing the appellate process in Montana.
¶68 Finally, the Court approves STAB‘s consideration of the post-lien date sale information, citing
¶69 I concur in the result reached by the Court.
JUSTICE NELSON joins in the concurring Opinion of JUSTICE RICE.
JUSTICE NELSON, specially concurring.
¶70 I join Justice Rice‘s Concurrence. His comments at ¶¶ 65 to 67 are correct. Unfortunately, this is not the first time in recent experience that this Court has taken a case and reframed the issues, arguments, and theories on appeal to achieve a particular disposition-in the process, blindsiding the losing party with an issue it never raised or briefed. This is exactly what happened in Western Sec. Bank and Glacier Bancorp, Inc. v. Eide Bailly LLP, 2010 MT 291, 359 Mont. 34, 249 P.3d 35. In that case, appellant Glacier Bancorp alleged, litigated, and argued a professional negligence claim, not