Case Title: SMITH v HOWERY

Citation: 

Docket Number: 84-539

State: montana

Court: Montana Supreme Court

Date: 1985-07-02T00:00:00Z

Document:
No. 8 4 - 5 3 9 I N THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 5 A. KENDRICK SMITH; MAX A. HANSEN, and W. G. GILBERT, J R . , P l a i n t i f f s and R e s p o n d e n t s , CLINTON L. HOWERY and JACQUELINE J. HOWERY, D e f e n d a n t s and A p p e l l a n t s . APPEAL FROM: D i s t r i c t C o u r t of the F i f t h J u d i c i a l D i s t r i c t , I n and f o r the C o u n t y of B e a v e r h e a d , T h e H o n o r a b l e M a r k S u l l i v a n , Judge presiding. COUNSEL OF RECORD: For A p p e l l a n t s : R o b e r t T. Cumrnins, H e l e n a , M o n t a n a F o r R e s p o n d e n t s : S c h u l z , D a v i s & Warren, D i l l o n , M o n t a n a G a r l i n g t o n , L o h n & R o b i n s o n , M i s s o u l a , M o n t a n a S u b m i t t e d on B r i e f s : May 9 , 1 9 8 5 D e c i d e d : J u l y 2 , 1 9 8 5 F i l e d : _i[jt 2 4585 d C l e r k M r . J u s t i c e Frank B. Morrison, Jr., d e l i v e r e d t h e Opinion of t h e Court. C l i n t o n and J a c q u e l i n e Howery (Howerys) appeal t h e May 14, 1984, o r d e r o f t h e F i f t h J u d i c i a l D i s t r i c t Court g r a n t i n g respondent a t t o r n e y s , Kendrick Smith, Max Hansen and W.G. G i l b e r t , Jr.'s motion f o r summary judgment. W e a f f i r m t h e o r d e r g r a n t i n g summary judgment. I n February o f 1979, t h e S t a t e o f Montana f i l e d an a c t i o n i n Beaverhead County seeking t o condemn .76 o f an a c r e of Howerys' land f o r highway purposes. The S t a t e and Howerys w e r e unable t o a g r e e on compensation. The Howerys t h e r e f o r e h i r e d t h e respondents t o r e p r e s e n t them i n t h e condemnation a c t i o n . The w r i t t e n r e t a i n e r agreement executed by Howerys on March 21, 1979, c o n t a i n s t h e following p r o v i s i o n s r e g a r d i n g c o s t s and a t t o r n e y s f e e s : "1. You a r e t o pay u s a l l o f o u r reasonable ex- penses which w e w i l l t r y t o keep t o a minimum, and t h e s e w i l l be payable t o u s , no m a t t e r what t h e outcome o f t h e case. . . . "2. The f e e s f o r o u r s e r v i c e s w i l l be on a contin- g e n t f e e b a s i s , and you have agreed t o pay u s 33-1/3% o f t h e recovery by judgment o r compromise (and you would have t o f u l l y a g r e e t o any compro- m i s e b e f o r e it would be e f f e c t i v e ) . I n t h e e v e n t t h e r e i s an appeal i n t h e c a s e by e i t h e r s i d e , t h e f e e would be r a i s e d t o 40% o f t h e amount o f recov- e r y . There w i l l be only one f e e a s between t h e two law firms." The Howerys recovered $315,284.03 from t h e S t a t e : $243,475.00 f o r t o t a l damages; $42,958.33 f o r i n t e r e s t on t h o s e damages from t h e d a t e o f t a k i n g ; and $28,850.70 f o r c o s t s and a t t o r n e y s ' f e e s . The S t a t e paid t h e e n t i r e judg- ment p r i o r t o appealing t o t h i s Court. W e affirmed t h a t judgment i n S t a t e o f Montana v. Howery (Mont. 1983), 664 P.2d 1387, 40 St.Rep. 975. Howerys w e r e f u r t h e r awarded $8,427.19, $8,220.00 o f which was a t t o r n e y s ' f e e s , f o r t h e S t a t e ' s appeal. While t h e appeal was pending i n t h i s Court, $303,109.03 o f t h e $315,284.03 was placed i n t h r e e c e r t i f i c a t e s o f depos- it j o i n t l y held i n t h e names o f a t t o r n e y Max Hansen and t h e Howerys. The remaining $12,175.00 was paid d i r e c t l y t o respondent a t t o r n e y s f o r t h e i r c o s t s and w i t n e s s f e e s . The c e r t i f i c a t e s o f d e p o s i t earned post-judgment i n t e r e s t t o t a l - l i n g $40,458.38. Following t h e S t a t e ' s unsuccessful a p p e a l , t h e Howerys and respondents began n e g o t i a t i o n s t o settle t h e a t t o r n e y s ' f e e s due and owing t o t h e respondents. The p a r t i e s w e r e unable t o reach agreement and respondents f i l e d a complaint J u l y 26, 1983, seeking $143,329.68 f o r work performed and s e r v i c e s rendered. An amended complaint seeking t h e same amount was f i l e d t h e next day. Permission t o f i l e a second amended complaint was g r a n t - ed respondents on October 24, 1983. That complaint reduced t h e demand f o r a t t o r n e y s ' f e e s t o $130,717.60 and added a second count, a l l e g i n g a breach by Howerys o f an implied covenant o f f a i r d e a l i n g w i t h t h e a t t o r n e y s and r e q u e s t i n g exemplary damages o f $50,000.00. O n November 18, 1983, Howerys f i l e d an answer, counter- claim and demand f o r j u r y t r i a l . Howerys summarily denied a l l t h e a l l e g a t i o n s contained i n each count o f respondents' complaint. Their counterclaim a l l e g e d , among o t h e r t h i n g s , a breach o f t h e a t t o r n e y s ' o b l i g a t i o n t o d e a l f a i r l y w i t h them and v i o l a t i o n o f t h e f i d u c i a r y r e l a t i o n s h i p between Howerys and t h e a t t o r n e y s . On January 16, 1984, respondents f i l e d a motion f o r summary judgment on Count I of t h e second amended complaint. The motion was accompanied by an a f f i d a v i t o f a t t o r n e y Max Hansen s e t t i n g f o r t h p e r t i n e n t d e t a i l s and r e q u e s t i n g $129,866.34 f o r work performed and s e r v i c e s rendered pursuant t o respondents1 c o n t r a c t with Howerys. Clinton Howery f i l e d an a f f i d a v i t i n opposition t o t h e motion f o r summary judgment on February 6 , 1984. A hearing was held May 4 , 1984, and an o r d e r g r a n t i n g respondents ' motion f o r summary judgment was i s s u e d May 1 6 , 1.984. The t r i a l judge awarded respondents $129,866.34, s t a t i n g t h a t no a f f i r m a t i v e defense t o Count I had been p l e d , and, t h a t : "Count I i s based upon a w r i t t e n agreement between t h e p a r t i e s , a Judgment rendered by t h e D i s t r i c t Court o f t h e F i f t h J u d i c i a l District o f t h e S t a t e o f Montana and an affirmance by t h e Montana Supreme Court, a l l o f which a r e c l e a r , c e r t a i n and unambig- uous. N o e x t r i n s i c o r par01 evidence i s needed o r admissible t o e x p l a i n any of t h e c l e a r t e r m s and p r o v i s i o n s o f t h e w r i t t e n agreement. There a r e no genuine i s s u e s a s t o any m a t e r i a l f a c t s , and it i s t h e duty o f t h i s Court t o apply t h e language o f t h e agreement a s w r i t t e n . The amount due and owing from defendants t o p l a i n t i f f s i s f i x e d and i s n o t ambiguous i n any way. . . ." Count I1 o f r e s p o n d e n t ' s complaint and Howerys' counterclaim a r e s t i l l pending. Following a Rule 54 (b) , M.R.Civ.P., c e r t i f i c a t i o n , Howerys f i l e d t h i s a p p e a l , r a i s i n g t h e following i s s u e : "Whether t h e D i s t r i c t Court e r r e d i n g r a n t i n g t h e p l a i n t i f f s ' motion f o r summary iudgment on Count I o f t h e second amended complaint and determining under Rule 56 (c) , M.R.Civ.P., t h a t t h e p l a i n t i f f s showed t h a t t h e r e was no genuine i s s u e a s t o any m a t e r i a l f a c t and t h a t t h e y w e r e e n t i t l e d t o judg- ment a s a m a t t e r o f law?" A motion f o r summary judgment should be granted " i f t h e p l e a d i n g s , d e p o s i t i o n s , answers t o i n t e r r o g a t o r i e s , and admissions on f i l e , t o g e t h e r w i t h t h e a f f i d a v i t s , i f any, show t h a t t h e r e i s no genuine i s s u e a s t o any m a t e r i a l f a c t and t h a t t h e moving p a r t y i s e n t i t l e d t o a judgment a s a m a t t e r o f law. l1 Rule 56 (c) , M.R.Civ.P. W e have f r e q u e n t l y s t a t e d t h e r u l e : "It i s w e l l e s t a b l i s h e d t h a t a p a r t y moving f o r summary judgment h a s t h e burden o f showing a com- p l e t e absence o f any genuine i s s u e a s t o a l l f a c t s deemed m a t e r i a l i n l i g h t o f t h e s u b s t a n t i v e p r i n c i - p l e s t h a t e n t i t l e t h a t p a r t y t o a judgment a s a m a t t e r o f law. ( c i t a t i o n s o m i t t e d ) . . . I' Cereck v , A l b e r t s o n ' s I n c . (1981), 195 Mont. 409, 411, 637 P.2d 509, 511. W e a g r e e w i t h t h e d e t e r m i n a t i o n o f t h e t r i a l c o u r t t h a t r e s p o n d e n t s have m e t t h i s burden. The c o n t r a c t between t h e p a r t i e s i s c l e a r and unambigu- ous. It mandates t h a t r e s p o n d e n t s s h a l l receive 40% of any r e c o v e r y on a p p e a l . When a n a t t o r n e y e n t e r s i n t o a c o n t i n - g e n t f e e arrangement based on a p e r c e n t a g e o f t h e judgment or award r e c o v e r e d b y t h e c l i e n t and t h e t o t a l amount r e c o v e r e d i n c l u d e s i n t e r e s t , t h e a t t o r n e y i s e n t i t l e d n o t o n l y t o a p e r c e n t a g e o f t h e a c t u a l damages r e c o v e r e d , b u t also t o a p e r c e n t a g e o f t h e pre-judgment and post-judgment i n t e r e s t r e c o v e r e d . See I n re Edgecornbe Road (N.Y.App.Div. 1 9 0 8 ) , 128 App.Div. 432, 112 N.Y.S. 845, r e g a r d i n g pre-judgment i n t e r e s t and M a t t e r o f I n n k e e p e r s o f New C a s t l e , I n c . ( 7 t h C i r . 1 9 8 2 ) , 671 F.2d 221, r e g a r d i n g post-judgment i n t e r e s t . Respondent Max Hansen's a f f i d a v i t r e q u e s t i n g $129,866.34 is c o n s i s t e n t w i t h t h e c o n t r a c t between r e s p o n d e n t s and Howerys and w i t h t h e law. The $129,866.34 r e p r e s e n t s 40% of t h e a c t u a l damages ($243,475 x .40 = $97,390) and 40% of t h e pre-judgment i n t e r e s t ($42,958.33 x .40 = $17,183.33) or $114,573.33, t o g e t h e r w i t h 37.79937% o f t h e post-judgment i n t e r e s t ($40,458.38 x .3779937 = $15,293.01) . Respondents w e r e p r o p e r l y awarded 37.79937% o f t h e post-judgment i n t e r e s t because o n l y 37.79937% o f t h e money d e p o s i t e d i n t h e c e r t i f i - c a t e s o f d e p o s i t was t h e i r s ($114,573.33/$303,109.03 = 37.79937%). The amounts p r e v i o u s l y r e q u e s t e d by r e s p o n d e n t s r e s u l t e d from improper c a l c u l a t i o n s and n o t from a n ambiguous con- t r a c t , a s Howerys c o n t e n d . The i n i t i a l r e q u e s t was for 40% of t h e e n t i r e award, c o s t s and i n t e r e s t . T h a t r e q u e s t f a i l e d t o c o n s i d e r t h a t r e s p o n d e n t s had a l r e a d y been d i r e c t l y p a i d t h e i r a c t u a l c o s t s , pursuant t o t h e c o n t r a c t . The amount requested i n t h e second amended complaint f a i l e d t o c o n s i d e r t h a t only 37.79973% o f t h e money i n t h e c e r t i f i c a t e s o f d e p o s i t belonged t o respondents. The c o n t r a c t i s c l e a r . The respondents a r e e n t i t l e d t o $129,866.34. Next, t h e Howerys a l l e g e t h a t t h e i r counterclaim should a l s o be t r e a t e d a s an a f f i r m a t i v e defense t o t h e a l l e g a t i o n s i n Count I of respondents' complaint and t h a t t h e counter- claim, when t r e a t e d a s an a f f i r m a t i v e defense, r a i s e s i s s u e s o f m a t e r i a l f a c t , t h u s f o r e c l o s i n g a summary judgment d e t e r - mination. W e a g r e e t h a t under o u r l i b e r a l pleading r u l e s , t h e counterclaim can be t r e a t e d a s an a f f i r m a t i v e defense. Rule 8 ( c ) , M.R.Civ.P. However, t h e counterclaim/affirmative defense does n o t f o r e c l o s e a summary judgment d e t e r m i n a t i o n on Count I. The primary a l l e g a t i o n s contained w i t h i n t h e counter- claim involve t h e breach o f t h e f i d u c i a r y r e l a t i o n s h i p be- tween t h e a t t o r n e y s and t h e i r c l i e n t s and t h e breach o f t h e o b l i g a t i o n o f good f a i t h and f a i r d e a l i n g owed by t h e a t t o r - neys t o t h e i r c l i e n t s . These a l l e g a t i o n s a r e s e p a r a t e and d i s t i n c t from t h e p r e s e n t i s s u e , whether t h e a t t o r n e y s ' f e e s c o n t r a c t i s c l e a r and unambiguous. F i n a l l y , w e w i l l n o t c o n s i d e r Howerys' c o n t e n t i o n t h a t t h e c o n t r a c t does n o t r e f l e c t t h e t e r m s mutually agreed upon by t h e p a r t i e s a s t h a t a l l e g a t i o n depends e n t i r e l y on e v i - dence e x t r i n s i c t o t h e c o n t r a c t . " 'The p r i n c i p l e i s w e l l - e s t a b l i s h e d and o f g e n e r a l a p p l i c a t i o n , s u b j e c t t o c e r t a i n e x c e p t i o n s , t h a t when a c o n t r a c t -- has been reduced t o w r i t i n g t h e c o n t e n t s o f h -- w r i t i n g cannot be a d d e d t o , con- t r a d i c t e d , a l t e r e d , o r v a r i e d byyrol o r extrinsic evidence, and t h a t such w r i t i n g supersedes a l l o r a l n e g o t i a t i o n s concerning i t s m a t t e r which preceded, accompanied, o r l e d up t o its execution. This was t h e <ule a t common law, and has been embodied i n t h e s t a t u t e law o f t h i s s t a t e . ' (Emphasis i n o r i g i n a l . ) "Section 28-2-905, MCA, provides that when the terms of an agreement have been reduced to writing by the parties, it is to be considered as contain- ing all the terms, and there can be no evidence of the terms of the agreement other than the contents of the writing except when a mistake or an imper- fection of the writing, is at issue, or when the validity of the agreement is the fact in dispute." Perez-Lizano v. Ayers (Mont. 1985), 695 P.2d 467, 470, 42 St.Rep. 208, 212-213, citing West River Equipment Co. v. Holzworth Construction Co. (1959) , 134 Mont. 582, 588, 335 P.2d 298, 302. The decision of the trial court judge is affirmed. hief Justice