NO. 88-133 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1988 

WESTERN MEDIA, INC., 

a Montana corporation, 

Plaintiff and Appellant, 

-vsDefendant and Respondent. 

APPEAL FROM: The District Court of the Eighteenth Judicial District, 

In and for the County of Gallatin, 

The Honorable James R. Wheelis, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Larry W. Moran, Bozeman, Montana 

For Respondent: 

Edmund P. Sedivy, Jr.; Morrow, Sedivy & Bennett, 

Rozeman, Montana 

Submitted on Briefs: June 9, 1988 

Decided: July 7, 1988 
Mr. Justice L. C. Gulbrandson delivered the Opinion of the 

Court. 

Western Media, Inc. (Western Media), plaintiff/ 

appellant in this case, originally brought an action against 

defendant/respondent William Merrick (Merrick) for breach of 

contract due to a violation of a covenant not to compete. 

That action was dismissed by the lower court but upon appeal, 

this Court reversed that decision which is published as 

Western Media, Inc. v. Merrick (Mont. 1986), 727 P.2d 547, 43 

St.Rep. 1991. This second appeal and cross-appeal is from an 

order and judgment of the Eighteenth Judicial District Court, 

Gallatin County, granting Western Media attorney's fees on 

remand in the amount of $5,000. We affirm. 

Western Media presents the following rephrased issue 

for our consideration: 

Did the District Court abuse its discretion in granting 

$5,000 as attorney's fees in this breach of contract case 

where the express agreement between the parties allows for 

recovery of attorney's fees "as damages" and the losing party 

stipulated to fees in the amount of $16,338.75 but argued 

that the amount was unreasonable? 

Merrick further cross-appeals from the same order and 

judgment and presents the following issue: 

Did the trial court err in failing to set off the sum 

of $833.34 representing two monthly payments unpaid by 

Western Media from the $3,333.36 awarded? 

The underlying facts are set out in Western Media, 

supra, 727 P.2d at 548-549, but will be reiterated to the 

extent needed for determination of this appeal and 

cross-appeal. The following facts are paraphrased from a 

stipulation between the parties dated June 3, 1987. 
On May 14, 1975, Western Media and Merrick entered into 

an agreement for the sale of KBMN, Inc. naming Merrick as 

seller and Western Media as buyer. Contained in this 

agreement was a covenant not to compete for a ten-year period 

signed by Merrick in consideration of $50,000 to be paid in 

120 monthly installments of $416.67 commencing September 1, 

1975. On September 1, 1984, Merrick breached this covenant 

by taking a job with the Montana State University public 

television station, KUSM. 

Even though Merrick had breached the contract on 

September 1, 1984, Western Media continued to make eight 

payments according to the agreement from September 1, 1984 

through June 1, 1985. The payments amounted to $3,333.36. 

Western Media was awarded this amount after the initial 

appeal. Merrick claims $833.34 should be deducted from the 

amount because he quit working for KUSM on June 30, 1985 and 

Western Media therefore should be liable for the amounts due 

July and August of 1985. 

The original agreement signed by Merrick also contained 

an attorney's fees clause which states: 

Attorneys Fees in Case of Breach: 

"In the event either party files suit to 

recover for a breachof this Agreement, 

or to enforce against another party any 

of the terms and provisions hereof, the 

prevailing party shall be entitled to 

recover as damages its reasonable 

attorneys fees incurred in the 

prosecution or defense of such action." 

Both parties retained attorneys in this litigation. 

The District Court, in its opinion and order of January 12, 

1988, stated Western Media was entitled to its attorney's 

fees pursuant to the agreement. Western Media submitted an 

affidavit stating hourly rates charged by its attorneys 

amounted to $16,338.75. The court ordered, and incorporated 
into its judgment of January 26, 1988, that Western Media was 

entitled to $5,000 as reasonable attorney's fees. 

Although an hourly fee is claimed by Western Media's 

attorney, we note that the attorney's fee agreement signed by 

the president of Western Media and its counsel called for 

fees to be paid either by contingency fee or by the hour, 

whichever resulted in the higher fee for the attorney. The 

applicable clause states: 

Compensation to the attorney for 

representing client will be based upon a 

contingency fee of forty percent (40%) 

of any amount recovered by settlement or 

trial at the District Court level, and 

fifty percent (50%) of any amount 

recovered on or after appeal to the 

Montana Supreme Court; or, an hourly 

rate of eighty-five dollar: ($85.00) per 

hour for all office time spent, and 

$150.00 per hour for all Court time 

spent by the undersigned attorney on 

client's claim against Merrick, 

--- whichever calculation results in the 

larger compensation - to - the attorney. 

(Emphasis theirs.) 

Even though attorney's compensation is provided for under 

S 25-10-301, MCA, which allows the amount and manner to be 

"[lleft to agreement, express or implied . . . " this type of 

clause takes away the rationality behind contingency fee 

contracts. 

Similar to Montana case law, Rule 1.5 of the Model 

Rules of Professional Conduct states: "[a] lawyer's fee shall 

be reasonable." This clause is bordering on being 

unreasonable considering that the rationale for contingency 

fees is based on the theory that attorneys risking their 

entire fee can justify a larger recovery. Under the above 

clause the attorney takes no risk and enjoys a windfall. 
Western Media now claims that since the attorney's fees 

clause in the agreement stated the prevailing party was to 

recoup reasonable attorney's fees "as damages" that the 

intent of the parties was to make the prevailing party whole. 

Western Media cites § 27-1-311, MCA, for the proposition that 

the measure of damages in any breach of contract case is the 

amount that would compensate the aggrieved party "[flor all 

the detriment which was proximately caused thereby or in the 

ordinary course of things would be likely to result 

therefrom." Western Media contends the express language of 

the agreement controls and it should receive an amount that 

would compensate it for its actual loss sustained in 

employing its attorney. We disagree. 

In determining attorney's fees, a number of general 

rules have arisen over the years. Appropriately considered 

by the District Court is the rule stated in Crncevich v. 

Georgetown Recreation Corp. (1975), 168 Mont. 113, 119-120, 

541 P.2d 56, 59, recently adhered to by this Court: 

The circumstances to be considered in 

determining the compensation to be 

recovered are the amount and character 

of the services rendered; the labor, 

time, and trouble involved, the 

character and importance of litigation 

in which the services were rendered, the 

amount of money or the value of property 

to be affected, the professional skill 

and experience called for, the character 

and standing in the profession of the 

attorneys; . . . the result secured by 

the services of the attorneys may be 

considered as an important element in 

determining their value. 

Weinberg v. Farmers State Bank of Worden (Mont. 1988), 752 

P.2d 719, 735, 45 St.Rep. 391, 411. 

The District Court cited similar language in its 

opinion and order and stated it considered the 
above-enumerated factors in determining $5,000 was a 

reasonable fee in this case. The court stated it also 

considered the fee agreement entered into by the parties. 

Merrick contends the $5,000 award was excessive because 

it exceeds the amount of recovery actually received by 

Western Media. Merrick relies on the "result secured" 

language of Crncevich, and Weinberg, for the proposition that 

the attorney's fees received in this case are unreasonable. 

In Morris v. Nationwide Insurance Company (Mont. 19861, 722 

P.2d 628, 43 St.Rep. 1363, cited by both parties, the 

prevailing attorney presented evidence that he had expended 

352 hours of time on the case amounting to $29,992.25. The 

jury returned an award to the claimant in the case in the 

amount of $19,994.64. An agreement which had been signed by 

the attorney stated he would receive 33 1/3% of any recovery 

and an addendum excepted the first $6,000. We affirmed the 

district court's ruling that the attorney was entitled to 

$4,664.88 based on the contract entered into by the parties 

but stated "a contingent fee contract is not controlling in 

demonstrating the 'reasonableness' of an attorney fee" 

Morris, 722 P.2d at 631. 

Although no contingent fee is claimed in this case, it 

is axiomatic that, within the guidelines established in 

Crncevich, and restated in Weinberg, "the amount fixed as 

attorney fees is largely discretionary with the District 

Court." Careek v. Ayer (1978), 188 Mont. 345, 347, 613 P.2d 

1013, 1015. Merrick further cites to Johnson v. Tindall 

(1981), 195 Mont. 165, 635 P.2d 266, for the proposition that 

offers of settlement should be considered in determining 

reasonable attorney's fees. Merrick claims he made an offer 

to settle the case early in the litigation which was rejected 

by Western Media. This offer was allegedly for the same 

amount Western Media received. We note however, that 
Johnson, supra, was not determined solely on the settlement 

offer and refuse to accept Merrick's contention that it is 

gravamen in this case. 

Here, the District Court did not abuse its discretion 

in granting $5,000 as reasonable attorney's fees. See 

generally, Shors v. Branch (Mont. 1986), 720 P.2d 239, 43 

St.Rep. 919; Donnes v. Orlando (Mont. 1986), 720 ~.2d 233, 43 

St.Rep. 890. The District Court properly considered the 

contractual relationship between the parties and analyzed the 

reasonableness of the fees under the Crncevich guidelines. 

The statement of attorney's fees as "damages" in the 

agreement is not sufficient to reverse the District Court in 

this case in light of the District Court's considerations. 

We also affirm the District Court's decision not to 

reduce the award from $3,333.36 to $2,500.02 based on the 

$833.34 claimed due for the months of July and August in 

1985. The District Court stated in its opinion and order of 

January 12, 1988: 

It is the position of this Court that 

once a contract has been breached, its 

terms may not be unilaterally resumed. 

A non-breaching party has no duty to 

perform the terms of the contract once 

it has been breached. The agreement is 

then broken and regardless of whether 

the breaching party ceases those 

activities constituting the breach, he 

has no basis upon which to demand 

performance from the non-breaching 

party . . . 

We agree with this statement. Western Media disputes 

Merrick's citations to Havre Daily News v. Floren (19731, 163 

Mont. 131, 515 P.2d 673; and Lieman-Scott, Inc. v. Holmes 

(1963), 142 Mont. 58, 381 P.2d 489. In both cases, the 

covenant not to compete was involved in the overall sale 

price and separate consideration was not paid. The 
Lieman-Scott Court held that a non-breaching party may affirm 

the contract and seek damages or rescind the contract and 

recover the sum paid, but the party could not rescind and 

recover damages. In this case we previously stated: "Western 

Media did not sustain any damages prior to the breach by 

Merrick, but is entitled to return of payments made 

subsequent to such breach plus any other losses incurred due 

to Merrick's employment at KUSM." Western Media, supra, 727 

P.2d at 550. The sum paid is recoverable and the contract 

was rescinded. Merrick's employment or non-employment at any 

time after breaching the contract is not material. 

It is a maxim of jurisprudence that " [n] o one can take 

advantage of his own wrong." Section 1-3-208, MCA. A party 

who breaches a contract cannot claim entitlement to that 

contract's benefits after such breach. Merrick's claim here 

is that he should benefit from his own breach. A party to a 

contract cannot take advantage of his own act or omission to 

escape liability thereon. Gramrn v. Insurance Unlimited 

(1963), 141 Mont. 456, 462, 378 P.2d 662, 665; see also, 

Roundup Cattle Feeders v. Horpestad (1979), 184 Mont. 480, 

603 P.2d 1044, (party could not recover for performance 

rendered before the breach where the breaching party 

completely breached an entire, nonservable contract without 

justification or excuse). Merrick's breach may not have been 

willful or intentional. However, the breach occurred and the 

contract was severed. 

The District Court is affirmed on the appeal and 

cross-appeal in. this case. 
We concur: /