No. 84-207 INTHE SUPREME COURT OF THE STATEOF MONTANA 1984

WILLIAM R. MORSE, Plaintiffand Respondent,

-vsMARY ANN ESPELAND, Defendantand Appellant.

APPEAL FROM: District Court of the Thirteenth JudicialDistrict, Inand for the County of Carbon, The HonorableArnold Olsen,Judgepresiding.

COUNSEL OF RECORD: ForAppellant: 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

-- ClerkMr. Justice Frank R. Morrison, Jr. delivered the Opinion of the Court. Respondent attorney brought an action in the District Court to recoverattorney fees fromappellant client. Client answered and counterclaimed, alleging breach of fiduciary duty, constructive fraud, actual fraud, deceit and legal malpractice. Attorney moved for summary judgmenton 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 DistrictCourtand 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. DuringOctober 1979,clientasked 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 recordsof thework 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 thatbill in full. No other billswere sent to client. During the dissolution proceedings, clientwas 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, followingwhich 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 finaland thisappeal followed. Appellant pleads alternatively negligence (legal malpractice)

## , fraud, constructive fraud, deceit and breach of fiducFa.ryduty. While the pleading is not artful, it is not necessarily fatally defective. Montana no longer requires strict compliancewith terms of art and legalphraseologywhenpleading a cause ofaction. The archaic rules of codepleading have been replacedby 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 forrelief. 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 towhich he deems himself entitled. Relief in the alternative or of several differenttypesmay 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 ofpleading ormotion are required." These rules allow the pleader to state his or her claim without fear ofdismissalby the court for failure to statea 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 judgmentwemust,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 onmost matters pertaining to the representation. In the Matter of Bretz (1975), 168Mont. 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 applicableto fiduciary d.utycannot realistically be applied. Constructive fraud is

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

(1982), 197Mont. 154, 162-163, 641 P.2d 467, 472. If there is no fiduciary duty in the firstplace, constructive fraud will not lie. The facts nowbefore 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 knowinglymade a false representationto her. Van Ettinger 

### v. Pappin (1978), 180 Mont. 1, 9-10, 588 P.2d 988, 993-994. Later development of the evidencemay in fact support those theories. At this point, we only find facts sufficientto supporta claim forbad faithon the part of respondent.An employer is required to deal fairly and in good faithwith its employees. Gatesv. Life ofMontana 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 faithwhen 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 attorneyknows 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 avastly superior position to the client and the rationale of Gates and Dare, supra,mandates the applicationof 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 fairlyand in good faith. We reverse and remand this case for trial. The appellant is given 1ea.veto amend her counterclaimto 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. JusticeWilliam E. Hunt, Sr., deemed themselves disqualified and did not participate in this decision.