Title: DIEHL ASSOCIATES v HOUTCHENS

State: montana

Issuer: Montana Supreme Court

Document:

No. 14369 IN THE SUPREME COURT OF THE STATE OF MONTANA 1978 DIEHL AND ASSOCIATES, INC., et al., Plaintiff and Appellant, -vs- L. R. HOUTCHENS, Defendant and Respondent. Appeal from: District Court of the First Judicial District, Honorable Gordon R. Bennett, Judge presiding. Counsel of Record: For Appellant: Kline and Niklas, Helena, Montana John R. Kline argued, Helena, Montana For Respondent : Smith and Harper, Helena, Montana Jack Harper argued, Helena, Montana Submitted: December 14, 1978 Decided: JAN 11 1979 Filed: JAN f 1 I ! : - : M r . J u s t i c e Gene B. Daly delivered t h e Opinion of the Court. This i s the second time t h i s case has been before t h i s Court. Diehl and Associates (Diehl) f i r s t f i l e d t h i s action on July 3, 1975, i n the D i s t r i c t Court, Lewis and Clark County, t o recover r e a l e s t a t e broker's commissions of $5,450 f o r procuring purchasers f o r two separate parcels of r e a l property owned by defendant. Diehl, i n addition, sought t o recover i t s attorney fees and costs. Houtchens f i l e d an answer and counterclaimed seeking a $500 earnest money deposit made by one of the above-referenced purchasers plus attorney f e e s and costs. The p a r t i e s subsequently stipulated t h a t the D i s t r i c t Court could render a decision on the basis of the record. O n August 13, 1976, the D i s t r i c t Court entered its findings and conclusions i n favor of Diehl and on August 19, 1976, entered judgment f o r $5,450 plus $400 i n attorney fees. Houtchens t h e r e a f t e r appealed t o t h i s Court s t a t i n g i n the conclusion of h i s brief: "We respectfully submit the judgment of the lower court should be reversed and s e t aside and the lower Court directed t o enter judg- ment i n favor of Defendant together with c o s t s and attorney fees." (Emphasis added.) This Court reversed the judgment and remanded the cause t o the D i s t r i c t Court by decision dated August 8, 1977. Diehl and Associates, Inc. v. Houtchens (1977), Mont. , 567 P.2d 930, 34 St.Rep. 814. Specifically, the l a s t two paragraphs of our previous decision read: "Therefore, w e remand t h i s matter t o the d i s t r i c t court f o r determination of any 'agents incurred expense r e l a t e d t o t h i s s a l e ' , the balance of the deposit t o be equally apportioned between p l a i n t i f f and defendant. "The judgment of t h e d i s t r i c t c o u r t is re- versed and t h e cause is remanded t o t h e -- d i s t r i c t c o u r t f o r f u r t h e r consideration c o n s i s t e n t with -- t h i s opinion." (Emphasis added. ) O n September 12, 1977, Houtchens moved t h e D i s t r i c t Court t o hold a hearing to: "1. Determine any agents incurred expense r e l a t e d t o t h e s a l e i n accordance with t h e d e c i s i o n of t h e Montana Supreme Court herein; and "2. Fix reasonable a t t o r n e y s f e e s f o r t h e s e r v i c e s of defendants a t t o r n e y h e r e i n pursuant t o Section 93-8601.1, R.C.M. 1947 and Flaherty v. Hensley, 165 Mont. 434." On March 21, 1978, Diehl moved t h e D i s t r i c t Court t o s t r i k e Houtchens' r e q u e s t f o r a t t o r n e y f e e s , s t a t i n g t h a t t h e r e q u e s t was o u t s i d e t h e scope of t h e Supreme C o u r t ' s decision. A hearing w a s held on t h e matter on A p r i l 4 , 1978, and t h e D i s t r i c t Court, over Diehl's o b j e c t i o n s , allowed Hout- chens t o produce evidence on t h e matter of h i s a t t o r n e y f e e s . This evidence c o n s i s t e d of testimony by Houtchens' a t t o r n e y t h a t he had worked on t h e c a s e 57 hours during t h e D i s t r i c t Court s t a g e and 20 hours during t h e appeal s t a g e ; t h a t h i s normal f e e was $40 per hour, and t h a t h i s agreement with Houtchens w a s a f l a t $1,000 f e e f o r t h e Supreme Court appeal. Houtchens a l s o c a l l e d Donald G a r r i t y , a Helena attorney. H e t e s t i f i e d t h a t $40 per hour and $1,000 f o r an appeal w e r e reasonable charges, t h a t it was h i s opinion t h a t t h e t i m e spent by each s i d e would be roughly comparable, and t h a t t h e $400 f e e o r i g i n a l l y awarded by t h e D i s t r i c t Court t o Diehl was reasonable. O n r e q u e s t of t h e c o u r t , Houtchens' a t t o r n e y subsequently submitted h i s t i m e records i n support of t h e 77 hours he claimed t o have s p e n t on t h e case p l u s an a d d i t i o n a l statement claiming 6-1/4 a d d i t i o n a l hours n o t previously claimed. O n May 30, 1978, t h e D i s t r i c t Court entered judgment f o r Houtchens f o r "the s u m of $250 a s and f o r h i s one-half share of the earnest money deposit together with the s u m of $3,986.75 a s and f o r h i s reasonable a t t o r n e y ' s fees t o date." Diehl appeals from the judgment insofar a s it awards attorney fees t o Houtchens. Houtchens now seeks t o be awarded attorney fees and costs i n connection with t h i s appeal. The issues presented f o r review by t h i s Court are: 1. Did the D i s t r i c t Court lack authority t o consider Houtchens' request f o r attorney fees? 2. I f the D i s t r i c t Court did have authority t o con- s i d e r attorney fees, were the attorney f e e s awarded exces- s i v e i n l i g h t of the evidence presented? Diehl f i l e d the o r i g i n a l action eventually leading t o t h i s appeal t o c o l l e c t broker's commission allegedly owed t o it by Houtchens. This action was based on a broker's con- t r a c t which included t h e following provision: "In case of s u i t o r action on t h i s contract, I [referring t o Houtchens] agree t o pay such additional sum a s the court, both t r i a l and appellate, may adjudge reasonable a s p l a i n t i f f ' s a t t o r - neys fees." Although Diehl o r i g i n a l l y prevailed on its action t o recover these broker's commissions a t the D i s t r i c t Court l e v e l , we reversed and remanded the cause t o the D i s t r i c t Court f o r "further consideration consistent w i t h t h i s opinion." Diehl and Associates, Inc. v, Houtchens (1977), Mont . , 567 P.2d 930, 936, 34 St.Rep. 814, 820. The e f f e c t of our ruling was t o make Houtchens, not Diehl, the prevailing party i n the action. Section 93-8601.1, R.C.M. 1947, s t a t e s : "Whenever by v i r t u e of the provisions of any contract . . . one party t o such contract o r obligation has an express r i g h t t o recover attorney f e e s from any other party t o t h e contract o r obligation i n the event t h e party having t h a t r i g h t s h a l l bring an action upon the contract o r obligation, then i n any action on such contract o r obligation a l l p a r t i e s t o t h e contract o r obligation s h a l l be deemed t o have the same r i g h t t o recover attorney fees, and the prevailing party i n any such action, whether by v i r t u e of the express contractual r i g h t , o r by v i r t u e of t h i s a c t , s h a l l be e n t i t l e d t o recover h i s reasonable attorney f e e s f r o m t h e losing party o r parties." (Em- --- - phasis added.) Here, the contract gave ~ i e h l the express r i g h t t o c o l l e c t attorney fees. The above s t a t u t e made t h i s r i g h t reciprocal a s t o Houtchens. B y v i r t u e of our previous r u l i n g Houtchens, a s t h e prevailing party, became e n t i t l e d a s a matter of law t o h i s reasonable attorney fees. Fla- herty v. Hensley (1974), 165 Mont. 434, 437, 529 P.2d 1389, Diehl argues t h a t i n remanding the cause f o r "further consideration consistent with t h i s opinion" w e limited the D i s t r i c t Court t o addressing only those issues we speci- f i c a l l y addressed i n our p r i o r opinion. A s we did not discuss Houtchens' s t a t u t o r y r i g h t t o attorney f e e s , t h e argument continues, t h e D i s t r i c t Court was powerless t o make t h e s t a t u t o r y award. W e disagree. Our remand f o r further consideration "consistent with t h i s opinion" meant only t h a t i n a l l f u t u r e proceedings on t h e action Houtchens, not Diehl, was t o be regarded a s the prevailing party. The determination of attorney fees t o be awarded Houtchens, a s the new prevailing party, i s completely consistent with our p r i o r opinion. Equally without m e r i t is Diehl's contention t h a t Houtchens waived h i s r i g h t t o attorney fees. A review of t h e record r e v e a l s no such waiver. Houtchens sought a t t o r - ney f e e s i n h i s answer and counterclaim t o Diehl's o r i g i n a l a c t i o n and renewed h i s claim f o r f e e s i n t h e conclusion t o h i s brief on t h e f i r s t appeal. I n view of t h i s continuing claim by Houtchens f o r these f e e s , w e f a i l t o see any sup- p o r t f o r t h e argument t h a t he somehow waived them. Diehl a l s o a t t a c k s t h e amount of t h e f e e s awarded a s excessive. Again, w e disagree. The D i s t r i c t Court heard testimony from Houtchens' attorney, Charles Smith, as t o t h e amount of time he spent on t h e case (77 hours l a t e r increased t o 83-1/4 hours), t h e amount of h i s normal f e e ($40 per hour i n 1975, increasing t o $50 per hour i n 1976 and 1977), and t h e d e t a i l s of h i s f e e arrangement with Houtchens ($40 per hour plus $1,000 f o r f i r s t appeal). Donald Garrity, a l o c a l Helena attorney, t e s t i f i e d concerning t h e range of f e e s charged by attorneys i n Helena ($30 t o $60 per hour), t h e a b i l i t y , experience and reputation of Smith, and t h e reason- ableness of t h e t i m e spent by Smith on t h e case. G a r r i t y a l s o commented he f e l t t h e $400 awarded Diehl a s attorney f e e s before the Supreme Court's r e v e r s a l was a reasonable f e e f o r t h e work done by Diehl's attorney i n t h e case, which G a r r i t y characterized a s "roughly comparable" t o what smith had done f o r Houtchens. The D i s t r i c t Court a l s o examined t h e t i m e records submitted t o it d e t a i l i n g t h e t i m e Hout- chens' attorney spent on t h e case. W e cannot say a s a m a t t e r of l a w and applying t h e guidelines set f o r t h i n Crncevich v. Georgetown ~ e c r e a t i o n Corp. (1975), 168 Mont. 113, 119-20, 541 P.2d 56, 59, t h a t t h e award is excessive o r not supported by s u f f i c i e n t evidence. Finally, Houtchens requests t h a t we award him reason- a b l e attorney fees and c o s t s i n connection with t h i s appeal. Houtchens' r i g h t t o any attorney fees i s based i n p a r t on the broker's contract o r i g i n a l l y sued on by Diehl. A s quoted above, t h a t contract provided t h a t Diehl had the express r i g h t t o c o l l e c t attorney fees awarded by "both t r i a l and appellate" courts. Thus, the contract obviously contemplated t h a t attorney fees on appeal a s well a s a t t r i a l were t o be charged by Diehl t o Houtchens. Section 92- 8601.1, R.C.M. 1947, makes t h i s r i g h t t o attorney fees reciprocal a s t o Houtchens. W e do not find $1,000 a s attorney fees f o r t h i s appeal t o be unreasonable and there- f o r e order the same t o be paid by Diehl t o Houtchens. The judgment of t h e D i s t r i c t Court is affirmed. W e Concur: