No. 84-207 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1984 

WILLIAM R. MORSE, 

Plaintiff and Respondent, 

-vsMARY ANN ESPELAND, 

Defendant and Appellant. 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Carbon, 

The Honorable Arnold Olsen, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Ayers & Alterowitz, Red Lodge, Montana 

For Respondent : 

Anderson, Brown, Gerbase, Cebull & Jones, Billings, 

Montana 

Bishop & Bishop, Billings, Montana 

Overfelt Law Firm; Lee Overfelt, Billings, Montana 

Submitted on Briefs: Dec. 13, 1984 

Decided: February 22, 198s 

-- Clerk 
Mr. Justice Frank R. Morrison, Jr. delivered the Opinion of 

the Court. 

Respondent attorney brought an action in the District 

Court to recover attorney fees from appellant client. Client 

answered and counterclaimed, alleging breach of fiduciary 

duty, constructive fraud, actual fraud, deceit and legal 

malpractice. Attorney moved for summary judgment on client's 

counterclaim. The District Court granted the motion on the 

grounds that no cause of action upon which relief could be 

granted was stated. Client now appeals. We reverse the 

decision of the District Court and remand for trial. 

The sole issue is whether the District Court erred in 

granting attorney's motion for summary judgment based upon 

client's failure to state a claim upon which relief could be 

yranted. 

During October 1979, client asked attorney to represent 

her in a dissolution. Client testified that during their 

initial meeting, attorney gave her the impression the 

dissolution would cost $5,000. However, if the dissolution 

got particularly involved or drawn out, the fee might be 

slightly higher. Attorney testified that $5,000 was never 

agreed upon as a final total fee. Rather, they had agreed on 

a fee arrangement of sixty dollars per hour. In either 

event, the agreement between the two was never red.uced to 

writing, nor did the attorney keep careful or detailed 

records of the work he performed on client's behalf. 

Attorney began work for client and in February 1981 

sent her a bil.1 for $2,015.98. This statement allegedly 

reflected the work performed up to tha.t point. Client 

promptly paid that bill in full. No other bills were sent to 

client. 

During the dissolution proceedings, client was offered 

and rejected a settlement of between $100,000 and $125,000: 
At the conclusion of trial, client received a judgment consisting of property valued at $667,555.75. Attorney then 

told client the suit was going to cost her a lot of money. 

According to client's testimony, attorney asked her to agree 

to ten percent. When client reminded him of the initial 

$5,000 agreement, attorney allegedly responded: "I wouldn't 

dig ditches for that." 

Client refused to pay attorney, following which attorney filed suit for not less than $50,000, expert witnesses 

expenses, costs and interest. Client answered and 

ccunterclaimed. Both parties filed motions for summary 

judgment. Upon consideration of the pleadings, briefs and 

depositions, the District Court denied client's motion and 

granted attorney's motion for summary judgment. The judgment 

was certified as final and this appeal followed. 

Appellant pleads alternatively negligence (legal malpractice) , fraud, constructive fraud, deceit and breach of 

fiducFa.ry duty. While the pleading is not artful, it is not 

necessarily fatally defective. 

Montana no longer requires strict compliance with terms 

of art and legal phraseology when pleading a cause of action. 

The archaic rules of code pleading have been replaced by our 

new rules of civil procedure, which place the spirit of the 

law above strict compliance with the letter of the law. The 

liberal rules of pleading in Montana's courts are found in 

Rule 8, M.R.Civ.P.: 

"Rule 8 (a) . Claims for relief. A pleading which sets forth a claim for relief, 

whether an original claim, counterclaim, 

cross-claim or third-party claim, shall 

contain (1) a short and plain statement 

of the claim showing that the pleader is 

entitled to relief, and (2) a demand for 

judgment for the relief to which he deems 

himself entitled. Relief in the alternative or of several different types may be 

demanded. 
"Rule 8(e). Pleading to be concise and 

direct--consistency. (1) Each averment 

of a pleading shall be simple, concise 

and direct. No technical forms of pleading or motion are required." 

These rules allow the pleader to state his or her claim 

without fear of dismissal by the court for failure to state a 

claim in specific, precise words. R. H. Schwartz 

Construction Specialists, Inc. v. Hanrahan (1983) , 672 P. 2d 

1116, 40 St.Rep. 1926. 

Assuming appellant's position to be true, which for 

purposes of reviewing this summary judgment we must, we then 

proceed to determine whether an action at law is cognizable. 

We find the essence of a claim has been pleaded, though not 

artfully described. 

Unquestionably, an attorney has a fiduciary relationship with a client on most matters pertaining to the representation. In the Matter of Bretz (1975), 168 Mont. 23, 56, 

542 P.2d 1227, 1245. However, with respect to the 

negotiation of a fee, an attorney must necessarily deal at 

arms length with a client. The rules applicable to fiduciary 

d.uty cannot realistically be applied. Constructive fraud is 

a breach of fiduciary duty. Ryckman v. Wildwood, Inc. 

(1982), 197 Mont. 154, 162-163, 641 P.2d 467, 472. If there 

is no fiduciary duty in the first place, constructive fraud 

will not lie. 

The facts now before this Court do not indicate a case 

of fraud or deceit, as at least two of the nine essential 

elements of fraud are not alleged. There is no claim by 

client that attorney knowingly made a false representation to 

her. Van Ettinger v. Pappin (1978), 180 Mont. 1, 9-10, 588 

P. 2d 988, 993-994. Later development of the evidence may in 

fact support those theories. At this point, we only find 

facts sufficient to support a claim for bad faith on the part 

of respondent. 
An employer is required to deal fairly and in good 

faith with its employees. Gates v. Life of Montana Ins. Co. 

(19831, 668 P.2d 213, 40 St.Rep. 1287. The rationale is 

stated in Dare v. Montana Petroleum Marketing Co. (1984), 687 

P.2d 1015, 41 St.Rep. 1735: 

"Such an employee is protected from bad faith or 

unfair treatment by the employer to which the 

employee may be subject --- due to the inherent in- - 

equality of bargaining power present in many employment relationships. The implied covenant seeks 

to strike a balance between the interests of the 

employer in controlling the work force and the 

interests of the employee in job security. Gates, 

638 P.2d at 1066-67, 39 St.Rep. at 20." (emphasis 

supplied) Dare, 687 P.2d at 1020, 41 St.Rep. at 

1740. 

Likewise, as an attorney, respondent owed his client 

the obi-igation to deal fairly and in good faith when negotiating a fee and when ultimately charging and collecting the 

fee. The inequality that exists between attorney and client 

in bargaining over a fee is apparent. The attorney knows his 

or her legal rights. The client probably does not.. In 

negotiating and collecting the fee, the attorney is represented. The client is not. In negotiating and collecting 

the fee, the attorney is in a vastly superior position to the 

client and the rationale of Gates and Dare, supra, mandates 

the application of the covenant to this relationship. If the 

facts alleged by appellant are true, the fact-finder could 

determine there was a breach of the obligation owed to deal 

fairly and in good faith. 

We reverse and remand this case for trial. The appellant is given 1ea.ve to amend her counterclaim to specifically 

describe a breach of the implied covenant to deal fairly and 

in good faith. 
F7e concur: 

Justices 

Mr. Justice John C. Sheehy and Mr. Justice William E. Hunt, Sr., 

deemed themselves disqualified and did not participate in this 

decision.