No. 13907 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1978 

EDWIN R. FILLBACH, DALE FILLBACH, 

d/b/a FILLBACH & SONS, 

Plaintiff and Respondent, 

INLAND CONSTRUCTION CORPORATION, INLAND 

DEVELOPMENT CORPORATION OF MONTANA; BIG 

SKY OF MONTANA, INC., et al., 

Defendants and Appellants. 

Appeal from: District Court of the Eighteenth Judicial District, 

Honorable Frank E. Blair, Judge presiding. 

Counsel of Record: 

For Appellants: 

Brown, Pepper and Komrners, Bozeman, Montana 

William L. Pepper argued, Bozeman, Montana 

For Respondent : 

Bolinger and Wellcome, Bozeman, Montana 

G. Page Wellcome argued, Bozeman, Montana 

Submitted: April 27, 1978 

Decided: b-F 7 1978 

Filed: 2. ;gT@ 
Mr. Justice Daniel J. Shea delivered the Opinion of 

the Court. 

Defendant Big Sky of Montana, Inc., appeals from a 

judgment of the District Court, Gallatin County, foreclosing 

a mechanic's lien in favor of plaintiffs, Edwin R. Fillbach, 

individually, and d/b/a Fillbach and Sons. 

Big Sky of Montana, Inc., (hereinafter Rig Sky) is the 

developer of a condominium project on land it owns near 

Bozeman, Montana. Inland Construction Corp. was the general 

contractor for the project. In early 1974, plaintiff Fillbach 

submitted a bid for painting and drywall work on the project's 

Glacier condominiums. Plaintiff's bid was accepted by the 

general contractor. 

Plaintiff and his crew began working on the project, 

but due to various construction problems not attributable to 

plaintiff, the project was delayed and expected completion date 

was extended. In September 1974, the general contractor 

determined the project would have to be expedited and added 

several men to plaintiff's crew for that purpose. Thereafter, 

plaintiff had difficulty meeting his expenses, due in part to 

the expanded crew which had been assigned to him. 

The general contractor promised other subcontractors 

increases in their contract prices because of the construction 

delays, but the parties dispute whether plaintiff was promised 

such an increase. Plaintiff contends his contract was renegotiated to a cost-plus basis, but Big Sky contends plaintiff 

was not promised the increase given the other subcontractors 

because he was not meeting his contract obligations. plaintiff 

did receive regular contract payments, but he did not receive 

any increase over the contract price specified in his bid. 
In January 1975 the general contractor began controlling the money paid to plaintiff for disbursement to 

his employees, subcontractors and suppliers. Plaintiff was 

terminated from the project on February 12, 1975, after 

telling the general contractor he would need additional money 

to complete his work. Plaintiff received a check in the amount 

of $457.64 on the day of his termination. Accompanying that 

check was a lien waiver printed on a form provided by the 

general contractor. Such lien waivers were procured at the 

insistence of Big Sky from all subcontractors as they were 

paid for work performed or labor furnished on the project. 

Plaintiff executed 37 such waivers upon receipt of approximately 

31 checks during the period from January 16, 1974 to February 

14, 1975. 

After his termination, plaintiff demanded payment he 

alleged was due under the contract as renegotiated to the 

cost-plus standard. He duly perfected a mechanic's lien against 

Big Sky for the balance due under that contract and brought 

the present action. Named as defendants were the general 

contractor, Big Sky, and several parties claiming an interest 

in Big Sky's property. Inland Development Corporation of 

Montana, the assignee of Inland Construction's interest, was 

later joined as a party defendant. 

The cause was tried before the District Court sitting 

without a jury. Big Sky was the only defendant involved in 

this appeal to appear. Inland Construction Corporation and 

Inland Development Corporation defaulted and the other parties' 

interests were determined. On April 8, 1977, the District 

Court entered findings of fact and conclusions of law and 

judgment in plaintiff's favor. The District Court found 

plaintiff's lien against Big Sky to be in the amount of 
$43,693.94. Plaintiff was awarded that amount, plus costs 

and attorney's fees in the amount of $21,000. Following 

denial of its motions to amend and make additional findings 

of fact and conclusions of law and for a new trial, Big Sky 

appealed. 

Two issues are presented for review: (1) whether 

the District Court erred in limiting the scope of the lien 

waivers to the money received as each such waiver was executed, 

and (2) whether the District Court abused its discretion in 

awarding a $21,000 attorney's fee. 

The first issue concerns the interpretation of the 

lien waivers signed by plaintiff. Each such waiver was 

prepared on the following form: 

"RECEIPT AND WAIVER OF MECHANICS' LIEN RIGHTS 

N.B. It is important that the following directions 

be closely followed as otherwise the receipt WILL 

NOT BE ACCEPTED. 

1. This is a LEGAL INSTRUMENT and must be executed 

accordingly by officers of corporations and by 

partners of co-partnerships. 

2. It is important that ALL the blanks be completed 

and that the AMOUNT PAID BE SHOWN. 

3. If payment is not in full to date, so state, 

SHOW UNPAID BALANCE, and strike out last three lines. 

4. A receipt similar to this or legal waiver of 

lien rights will be required for all plumbing, 

heating and plastering material, etc. 

5. NO ERASURES OR ALTERATIONS MUST BE MADE. 

(date) 

The undersigned acknowledges having received payment 

of from in full payment of 

all by the undersigned delivered 

or furnished to (or performed at) 

and for value received hereby waives all riqhts which 

may have been acquired by the undersigned to file 

mechanics' liens against said premises for labor, 

skill, or material furnished to said premises prior 

to the date hereof. 
The District Court's Finding of Fact VII states: 

"That on each occasion when the plaintiff 

would receive payment for work performed and 

materials furnished, he would sign a lien 

waiver which lien waiver was solely limited to 

the amount of money received at that particular 

time and such lien waiver did not in any way 

prevent the plaintiff from filing and foreclosing 

a mechanic's lien for all amounts not covered 

by the specific lien waivers which were required 

by the Inland Corporations for each payment 

which they made to the plaintiff; that this 

manner of proceeding was requested by the 

defendant Big Sky of Montana, Inc., and the 

Inland Corporations were paid an overhead 

margin and a profit margin on all amounts which 

they paid to their subcontractors." 

The thrust of Big Sky's argument is that the above 

finding is contrary to the evidence. In this regard Big Sky 

first contends the Receipt and Waiver of Lien Rights clearly 

provides for a general walver of lien rights as to all labor 

and materials supplied prior to the date any such instrument 

is signed. Big Sky further contends the District Court should 

not have allowed testimony which had the effect of varying 

the terms of the instrument. 

In an "Opinion of the Trial Court" which accompanied 

its decree, the District Court indicated the above finding 

was based on "oral evidence found true by the Court." That 

evidence consisted of the testimony of plaintiff and Roger 

West, the project manager for Inland Construction during the 

time plaintiff worked at the condominium site. The District 

Court relied on two statutory exceptions to the parol evidence 

rule, sections 93-401-13 and 93-401-17, R.C.M. 1947, in admitting 

the challenged testimony. 

Section 93-401-13(2) provides in part that parol 

evidence is admissible: 

"2. Where the validity of the agreement is 

the fact in dispute. But this section does not 

exclude other evidence of the circumstances under 

which the agreement was made, or to which it 
relates, as defined in section 93-401-17, 

or to explain an extrinsic ambiguity or 

to establish illegality or fraud. * * *" 

Section 93-401-17 provides: 

"* * * For the proper construction of an 

instrument, the circumstances under which 

it was made, including the situation of 

the subject of the instrument, and of the 

parties to it, may also be shown, so that 

the judge be placed in the position of 

those whose language he is to interpret." 

Absent an ambiguity which would require parol 

testimony to explain, the lien releases cannot be varied, 

contradicted or altered by parol evidence. Larson v. 

Burnett, (1972) 158 Mont. 421, 427, 492 P.2d 921, 925. Here, 

however, the circumstances of the parties, their real purpose 

in executing and receiving the instruments is subject to 

interpretation and may be proved by parol testimony. See, 

Thisted v. Country Club Tower Corp., (1965) 146 Mont. 87, 96, 

Roger West negotiated and administered all the contracts 

entered into by Inland Construction with its subcontractors 

for the condonimiurn project. He was the only person called as 

a witness by either side who was familiar with Inland's operations and procedures. He testified: 

"Q. Now, these lien releases that we've heard 

testimony about, what were these used for? And 

there is a whole series of them here, Mr. West. 

A. Well, in order to get a payment from Big 

Sky we'd produce a like amount of dollar lien 

releases from subcontractors. 

"Q. Were -- So each time any subcontractor 

sought payment from you, you would take a lien 

release? A. Oh, definitely. 

Q.And did you understand when these were taken 

that whoever the claimant was or whoever was 

going to work for you had the right to come 

to you, and they were entitled to additional 

money at some future time; and they were only 

signing this lien release for that specific 

purpose? A. Yes.'" 
West's testimony was uncontradicted. Big Sky offered 

no evidence tending to show either Inland Construction or 

plaintiff intended each lien release to operate as an absolute 

waiver of all pre-existing lien rights. In the District 

Court, as here, Big Sky relied on the language of the Receipt 

and Waiver of Mechanic's Lien Rights. Big Sky cites cases 

from other jurisdictions which have given such lien releases 

a general scope and effect, but none of those cases involve 

a factual situation similar to that of the present case. The 

course of dealings between the parties clearly indicated that 

they regarded the lien waivers to be releases only as to the 

amounts they received at the time of signing the lien waivers. 

Here, plaintiff's operation was disrupted from the 

start. He was beset by difficulties and delays for which he 

bore no responsibility. He incurred expenses and was compelled to work under conditions not contemplated at the time 

he submitted his bid. Other subcontractors received increases 

over their contract prices as a result of similar problems 

and were apparently able to avoid the financial squeeze 

plaintiff found himself in. Plaintiff testified he did not 

receive such increases even though an Inland representative 

had promised them to him. West testified plaintiff's increases 

were to be held back "until the end of the contract because 

he was having trouble at that time taking care of his contract 

obligations." 

When he signed the lien release upon receipt of a check 

in the amount of $457.64 on February 12, 1975, plaintiff had 

not received all the money owing under either the original 

contract or the contract as renegotiated to a cost-plus basis. 

Under the circumstances and in light of the testimony presented 

to the District Court, it is clear plaintiff did not then intend 
to waive his rights with regard to amounts he had not received 

by that time. The District Court did not err in ruling 

plaintiff retained lien rights for money owing to him despite 

his execution of any of the series of lien releases under these 

circumstances. 

Big Sky's final issue challenges the District Court's 

award to plaintiff of $21,000 in attorney's fees. The amount 

awarded corresponds to the amount requested by plaintiff in 

his complaint. Apparently plaintiff and his counsel entered 

into a contingent fee arrangement which provided for such an 

attorney's fee. 

No testimony was presented as to the reasonableness 

of the fee awarded, nor was evidence of any kind offered to 

support the $21,000 amount. At trial, the parties entered into 

the following oral stipulation: 

"[plaintiff's counsel]: And, counsel, may 

it be stipulated that the court may award a 

reasonable attorney's fee in the prevailing 

side without the necessity of introducing 

specific testimony as to the value of it? 

"[Big Sky's counsel]: So stipulated." 

In State Highway Commission v. Marsh, (1978) - 

Mont. , 575 P.2d 38, 35 St.Rep. 105, 110, 111, this 

Court stated: 

"The reasonableness of the attorney fee 

claimed must be shown by evidence. Rauser 

v. Totson Irrigation District, supra. A 

contingent fee contract is not controlling 

in demonstrating the reasonableness of any 

attorney fee. [citing cases] An award 

of attorneys fees must be based on a hearing 

allowing for oral testimony, the introduction 

of exhibits, and an opportunity to cross 

examine in which the reasonableness of the 

attorney fees claimed is demonstrated." 

Marsh did not involve a stipulation as is present 

here, but its reasoning nevertheless is applicable. The focus 

is on the reasonableness of the fee awarded, even when there 
is a stipulation. From our review of the record, we do 

not see an evidentiary basis justifying such a fee. 

This was a one-day trial, involving little discovery, 

in which one of the two principal defendants defaulted. While 

parties may, of course, waive their right to introduce evidence 

as to attorney's fees through stipulation, this Court is not 

thereby bound to accept the reasonableness of the fees awarded. 

The basis for the fee must appear in the record. 

Finally, plaintiff asks this Court to increase the 

amount awarded him from $43,693.94 to $63,172.93. The $63,172.93 

is what the District Court found Inland Construction owed 

plaintiff; the $43,693.94 reflects a reduction in that amount 

by a set-off applied by the District Court. In his complaint 

plaintiff sought $63,172.93. That amount was based on a 

"statement of receipts and disbursements" prepared by an accountant from figures supplied by plaintiff. At trial plaintiff 

revealed he had failed to provide the accountant with checks 

totalling approximately $19,500 received during January and 

February of 1975. 

Big Sky argued in the District Court that the $19,500 

should be applied to plaintiff's receipts and reduce the amount 

owing proportionally. At that time plaintiff's counsel agreed, 

and in his proposed findings of fact and conclusions of law he 

used the lower figure as the amount owing on the lien foreclosure 

against Big Sky. Those findings were adopted by the District 

Court . 

Plaintiff now contends his earlier interpretation was 

incorrect. He asserts the checks received in 1975 "passed 

through" his account and cannot properly be included in the 

computation of the balance owing under his contract with Inland 

Construction. Big Sky contends the District Court's judgment 
should not be increased, arguing the 1975 checks should be 

included as money received by plaintiff under the contract. 

We note plaintiff does not present this matter in the 

form of a cross-appeal from the District Court's judgment. 

Nor did he except to or move to amend the findings of fact 

in the District Court. The question is raised for the first 

time on appeal, and under these circumstances it is improperly 

raised. See Mittelstadt v. Buckingham, (1971) 156 Mont. 407, 

414, 480 P.2d 831, 835. 

The judgment of the District Court is affirmed as to 

the amount owing under the lien foreclosure and reversed as 

to the award of attorney fees. The cause is remanded to the 

District Court for a hearing to determine reasonable attorneys 

fees to plaintiff. 

WE CONCUR: 

Chief Justice 
Mr. Justice John C. Sheehy concurs in part and dissents 

in part: 

While ordinarily the broad language used in the lien 

waivers involved here would serve to release the real 

property from any claim of lien, there are special circumstances 

existing here which require the resu-lt reached in the 

foregoing Opinion. I concur that the written lien waivers 

were not effective to release fully the real property, but 

for reasons differing somewhat from those expressed in the 

Opinion. 

Big Sky of Montana had contracted with Inland as its 

general contractor to build the condominiums here involved. 

Inland had taken bids and entered into agreements with 

subcontractors for specified amounts depending on the amount 

of work to be done or material to be supplied by the respective 

subcontractors. 

Fillbach, as a subcontractor, was given to understand his 

work of painting and drywall construction was to be completed 

by July 1, 1974. However, Big Sky, for reasons of its own, 

delayed the starting date. When Big Sky did give the goahead, the subcontractors found there were changed weather 

conditions, a strike, and i~flated costs which required renegotiation 

of their agreements. This occurred because the subcontractors, 

particularly Fillbach, were not able to start their jobs 

until August 1974. Inland, on the basis of an increased 

allowance from Big Sky, gave all its subcontractors, except 

Fillbach, increased contractual amounts. With Fillbach, 

there was an unwritten understanding he would receive additional 

compensation when he had completed his work. 

Fillbach had contemplated using 4 men, himself and his 

son for the labor involved. However, Inland intruded in this 

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sphere and in effect took over the management of Fillbach's 

job by sending in as many as 8 additional persons (because 

the weather was closing in) as painters. These extra workers 

went on Fillbach's payroll, and the periodic payments he was 

receiving from Inland (which in turn billed Big Sky) were 

insufficient to meet his obligations. Fillbach began to 

lose ground financially. 

Inland's deal with Big Sky was that Inland would be 

reimbursed periodically by Big Sky for Inland's payments to 

the subcontractors, plus 12 percent overhead and 8 percent 

profit. This deal was the reason Inland required the execution 

of lien waiver forms with each payment to Fillbach. There 

were some 37 of these lien waivers executed by Fillbach in 

return for checks. Thus, all the parties established a 

course of dealing whereby Fillbach each time, to receive his 

neriodic payment, executed a lien waiver form, which Inland 

delivered to Big Sky so Inland could get pald. In no case 

did Big Sky pay Inland more than required by the amount of 

money expressed on the lien waiver form. The lien waiver 

forms were just that--printed forms on which each time, 

the date, the amount of money paid and the signature of 

Fillbach was entered. This is the reason District Court 

construed the lien waiver forms to be merely receipts for 

money paid and nothing more, for that is what they were; and 

Big Sky was fully aware of this under its arrangements with 

Inland and all the subcontractors. In fact, when Fillbach's 

financial trouble began to emerge, Inland not only controlled 

the employees, but delivered checks to Fillbach's suppliers 

as co-payees on the checks. Thus, there were no possible 

lien claimants except Fillbach for the work done by Fillbach. 

From this it appears the District Court was correct in 

determining 31 checks supporting 37 typed lien waivers for 

the exact amount of the checks "tell us that the lien 

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waivers were for the amount only set forth in the waivers." 

Under this arrangement for payment by Big Sky no detriment can be shown to have been suffered by Big Sky if the 

lien waivers are regarded for what they were, receipts for 

the amounts stated. Big Sky thereupon paid Inland only 

those amounts, plus the 20 percent agreed on between Inland 

and Big Sky. Further, Big Sky is not in the situation of an 

owner who contracts a building for a specified amount, which 

he pays and later finds the builder has not paid suppliers 

or subcontractors. In relying on the lien waivers here, Big 

Sky was paying out only the amounts shown to have been paid 

by Inland. In establishing that course of dealing, Big Sky 

itself treated the lien waivers only as receipts and waivers 

for the amounts stated. Significantly, not a single witness 

from Big Sky appeared to dispute this. By tabulating its own 

records, Big Sky at any time could have determined Fillbach 

had not been fully paid. Fillbach in his claim has given 

Big Sky full credit for monies he received from Inland. It 

would be a gross inequity in these circumstances, if the 

form language on the lien waivers was to be used to prevent 

Fillbach from being paid the full contract amount for his 

completed job. 

Moreover, the lien waiver forms are invalid as full and 

final waivers, because there is no consideration to support 

them. The amount paid Fillbach under each lien waiver 

instrument is the exact amount set forth in the form. The 

District Court was correct in construing each lien waiver to 

extend only to the dollar amounts paid. Big Sky has not been 

damaged in any respect beyond these amounts. 

In Giammarino v. J. W. Caldeway Construction Company 

i ,' ,d 

@5Lismx? 1934), 72 S.W.2d 159, the lien claimant, a subcontractor, had a plastering work contract in the amount of 

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$550. After completion of the work, the general contractor 

gave the lien claimant a check for $250 in part payment, in 

return for which the lien claimant executed a document in 

which he waived any and all lien rights to which he was 

entitled. The check which claimant had received was returned 

unpaid upon presentation to the contractor's bank. Meanwhile, 

the owner of the property, when the claimant's waiver was 

exhibited to him, paid the general contractor $250 in reliance 

thereon. In the claimant's action to establish a lien, the 

owner interposed the waiver as a release. The trial court allowed 

the owner a credit for the $250 paid the general contractor 

on the strength of the waiver, but gave claimant judgment for the 

balance of $300, together with interest, and impressed a 

lien on the property. The Missouri Supreme Court affirmed 

staying : 

"Appellants insist here that the Court 

below erred in adjudging respondent 

entitled to a mechanic's lien against 

their property because respondent 

waived his right to such lien by 

executing a lien waiver before mentioned. 

It is manifest, however, that such 

lien waiver was ineffective, for want 

of any consideration to support it, except 

insofar as the appellants in reliance 

upon such lien waiver, made payment 

to the construction company. 40 C.J. 

314, 340. Since the court allowed 

appellants credit for the payment of 

$250 made by them to the construction 

company, they have no grounds for complaint 

on account of such lien waiver." 72 S.W. 

2d at 160. 

That decision was reaffirmed in Missouri in the case of 

,+ ,# 

St. Louis Flexicore, Inc. v. Lintzenich (Wks-seuri 19671, 414 

S.W.2d 787, 790. In that case, the Missouri Court said: 

"However sharp may be the distinction between 

waiver and estoppel in other areas of the 

law, it is apparent that as applied in recent 

mechanic's lien cases, such defenses have 

been regarded as virtually synonymous. Instead, 
the courts have examined the equities 

of the situation in light of the facts, 

and have allowed or denied the lien 

according to the circumstances involved. 

"As those cases demonstrate, the converse 

of that principle is likewise true. That 

is, the invalidity of the lien waiver may 

be successfully asserted by the lien 

claimant if the owner or other person 

interested has not paid out money or 

otherwise changed his position to a 

detriment in reliance upon the waiver. 

That is the situation in the instant 

case. It is undisputed that plaintiff 

did not receive full consideration for 

the lien waiver it executed . . ." 

In United States v. Shea-Adamson Company (U.S.D.C. 

Minn. 1937), 21 F.Supp. 831, the trial court refused to 

recognize an executed lien waiver unsupported by consideration. 

Not to be forgotten is the undisputed evidence also 

shows Big Sky is holding back from Inland the sum of $115,000. 

Although this case was not tried on that theory, that amount 

represents a fund against which Fillbach in this case could 

have sought the impression of an equitable (not a contractual) 

lien and under the law have been successful. Swinerton and 

Walberg Company v. Union Bank (Cal. 1972) , 101 Cal. Rptr. 

For these reasons I concur Fillbach is entitled to 

recover judgment against defendants, including Big Sky. I 

must however, respectfully dissent from the majority opinion 

with respect to attorneys fees and the problem of the 

"pass-through" expenses. 

First, with regard to attorneys fees. The Opinion puts 

the District Court in error for following a perfectly normal 

and proper procedure in the trial of a cause--accepting a 

stipulation agreed to by the parties and within the power of 

the parties to make. 
Under the stipulation, the parties waived the factual ' ,. 1 I 

requirements Of Crncevich -(1975), 168 Mont. 113, 541 P. 2d 

56 and its related cases and placed in the discretion of 

District Court the determination as to what the reasonable 

attorney fee should be. 

"Stipulations are recognized by courts 

generally, and may govern in procedural 

matters so long as counsel do not thereby 

attempt to confer jurisdiction where none 

exists, or where jurisdiction has therefore 

been lost, or to determine thereby questions 

of law or the validity of statutory provisions, or to affect rights other than 

those existing between the parties to the 

suit in which the stipulation is filed; 

ALL---- thev mav BO SO far as to waive statutorv * 

provisions or irregularities." Hale et al. 

v. ~elgradeCo., Ltd., et al. (1925) , 75 

Mont. 99, 104, 242 P. 425, 426. 

By statute, an attorney has the authority to bind his 

client in any steps in an action or proceeding by his agreement filed by the clerk or entered upon the minutes of the 

court. Section 93-2101, R.C.M. 1947. 

This stipulation had a double edge. If plaintiff had 

not prevailed in this case, he would have been subject to 

an award of attorneys fees aqainst him under the reciprocity 

statute. Section 93-8601.1, R.C.M. 1947. 

The stipulation had a worthy purpose: otherwise the 

court would have been required to take evidence from both 

parties as to the value of their services. Most attorneys 

find such evidence somewhat embarassing and in fact, selfserving. It has not been unusual for attorneys to stipulate 

that the court, which has some expertise in the field of the 

value of attorneys' services rendered, fix the fees without 

the necessity of presenting such evidence. When however, 

attorneys agree to such a procedure, they should be bound by 

the result. Here, appellant, having made such a stipulation, 

now wants out. The Opinion lets him out. In doing so, the 
Opinion ignores the time-honored appellate rule where the 

underlying evidence is absent from the record, the reviewing 

court will not inquire as to whether the evidence was sufficient 

to sustain the finding of the court, since under appellate 

rules, error or prejudice will not be presumed. Valier-Montana 

Land and Water Company v. Ries (1940), 109 Mont. 508, 97 P.2d 

584; mbeuzn-e Mercantile Company v. Bonds (1944), 115 Mont. 

464, 145 P.2d 827. Instead, the Opinion, without a record, in 

effect determines the awarded fee was unreasonable. The result 

is a prolongation of the litigation, for which as I have said the 

District Court is not at fault, and the rule that a party is 

bound by his stipulation has not been followed. Lewis v. 

Lambros (1920), 58 Mont. 555, 194 P. 152. 

This Court, in theory at least, is supervisor of the 

legal profession in this State. As such, it should not be 

blind to the rates being charged for legal services at the 

present. Lawyers with corporate clients are charging rates up 

to $75 per hour for their services. Some of the better attorneys 

are charging more. Lawyers' fees have climbed to these heights 

because (a) there is galloping inflation going on, (b) the 

costs of doing business are higher than Everest, and (c) after 

the lawyer has paid his costs and expenses of staying in business, 

his net income is still subject to state and federal income 

taxes. 

There are no tax shelters over a lawyer's income for 

services. It is all hung out, ready for shearing at a full 

40 percent or more for the support of the government, including 

this Court. 

It is because hourly rates for attorneys have climbed so 

high that a substantial portion of our populace is unable to 

afford attorneys, and in effect would be denied access to the 

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court were it not for the contingent fee system. One imagines 

what would have happened in this case, if plaintiff had 

walked into his lawyer's office and said, "I've got a problem. 

The defendant owes me money and won't pay. I want you to 

represent me to collect, and if - you are successful, I will 

pay you at your hourly rate for one day of trial, when we 

collect." In that case, plaintiff would still be looking 

for an attorney. It is about time some court speaks up about 

the advantages the contingent fee system offers to people 

who otherwise cannot afford litigation to claim their rights. 

The objection to the contingent fee system seems to be the 

lawyer might make a profit. Yet who is not in business to 

make a profit? Without the profit incentive, we would have 

nothing of the advantages of the economic system we so 

fondly refer to as "free enterprise". A lawyer is as entitled 

to profit as anyone else. The laborer is worthy of his 

hire. 

Moreover, the value of the plaintiff attorney's services 

in this case appear from the face of the record. This was not 

an easy case. Plaintiff's attorney picked a narrow legal path 

to follow. On one side was a swamp, and on the other, quicksand. 

The swamp was the line of authority which holds unless there 

is an ambiguity in a written contract, par01 evidence at variance 

therewith is not admissible. The quicksand was the case law 

which holds a written agreement means what it says. The value 

of the attorney's services here can not be computed in terms of 

time, unless we are going to reduce the status of the attorney 

profession to keeping records of "billable time". 

Finally, we should observe the purpose of section 93-8614, 

R.C.M. 1947, (which is itself a reciprocity statute) providing 

for attorneys fees in the foreclosure of mechanic's liens. The 

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obvious intent of the legislature in making such provision 

is that a material man, laborer or subcontractor working on 

property and enhancing its value who must sue to collect the 

value of material or services is entitled to be made whole. 

If it is reasonable that in order to make such collection he 

must because of financial straits enter into a contingent 

fee contract with a competent attorney, then the contingent 

fee contract itself is reasonable in the circumstance. The 

District Court is entitled to consider that necessarily-incurred 

costs to the material man or contract in determining proper 

attorney fees. That is precisely what the District Court did 

in this case. Justice is not achieved if after the case is 

over, the contractor counts his net award and is still perhaps 

15 percent short of what he should have received under his 

contract in the first place. He will then have received 85 

percent justice, but the remaining 15 percent is injustice. 

Second, with respect to the "pass-through" expenses. 

There is a philosophical and legal inconsistency in an opinion 

which on the one hand sends attorney fees back to the District 

Court because there is no record to sustain the attorney fees, 

but on the other hand refuses to send back the question of the 

pass-through expenses because there is no record to sustain such 

expenses. Ideally, what is sauce for the goose should be sauce 

to the gander. 

There appears to me to be substance to plaintiff's claim 

that the $19,500 which the District Court reduced from his 

claim because of checks received by plaintiff were in Fact "passthrough" expenses which did not serve to reduce the amount due 

plaintiff on his rontract with defendant. Since we are sending 

the case back anyway, and since our objective in any event should 

be to achieve justice to the fullest extent, I see no reason why 

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the question of "pass-through" expenses should not also be 

returned for review, to make certain a proper decision has 

been made. Otherwise, I suspect, plaintiff will have difficulty 

understanding the fine quillets of the law that prevent him 

from receiving his claim of $19,500, but deny him his full 

attorney ' s fee. 

I dissent from the majority opinion on these points. 
Mr. Chief Justice Frank I. Haswell dissenting: 

I would reverse the judgment of District Court. 

The majority find the intentions of the parties that 

each lien waiver signed by plaintiff released only the amounts 

he received at the time of signing. This finding is based 

upon the testimony of plaintiff (subcontractor) and Roger 

West (an employee of the general contractor). 

In my view the judgment cannot stand for at least three 

reasons: (1) the testimony of plaintiff and Roger West is not 

admissible in evidence; (2) the clear and unambiguous language 

of the lien waiver cannot be altered or modified by an oral 

agreement to the contrary; and (3) plaintiff subcontractor is 

estopped from asserting his claim here by the reliance of the 

owner (Big Sky) on the general lien waiver. 

A contract is to be construed to carry out the intentions 

of the parties at the time of contracting, if such intentions 

are ascertainable. Section 13-702, R.C.M. 1947; Tribble v. 

Reely (1976), Mont. , 557 P.2d 813, 33 St.Rep. 1160. 

If the contract is ambiguous on its face as to the intentions 

of the contracting parties, parol evidence can be used to 

ascertain the parties' intentions. McNussen v. Graybeal (1965), 

146 Mont. 173, 405 P.2d 447; Lehrkind v. McDonnell (1915), 51 

Mont. 343, 153 P. 1012. But where the language of a contract 

is clear and explicit that language governs its interpretation. 

Section 13-704, R.C.M. 1947. As previously stated by this Court: 

"This Court when called upon to interpret the 

terms of contracts has held that where the 

terms of the contract are clear and unambiguous 

the Court will not allow parol evidence. 

(Citations omitted.)" Kielmann v. Mogan (1970), 

156 Mont. 230, 235, 478 P.2d 275. 

When a contract is reduced to writing, the intentions of 

the parties are to be determined by reference to the language 
employed by them and where the language used is clear, certain 

and unambiguous, oral testimony may not be resorted to. 

Section 13-705, R.C.M. 1947; Merritt v. Merritt (1974), 165 

Mont. 172, 526 P.2d 1375; Safeco Ins. Co. v. Munroe (1974), 

165 Mont. 185, 527 P.2d 64. 

While parol evidence is admissible to determine the object 

of the parties in executing and receiving an instrument, this 

rule was subject to limitations and clarifications. McCaullDinsmore Co. v. Stevens (1921), 59 Mont. 206, 194 P. 213. 

"The rule, however, is subject to the qualification that the purpose thus disclosed must not 

be inconsistent with the express terms of the 

instrument, for if the parties have clearly 

stated their purpose in the instrument itself 

no extrinsic evidence will be received to vary 

or contradict it. . ." 32A C.J.S. Evidence 

In this case the parties clearly expressed their purpose 

in the Receipt and Waiver of Mechanics' Lien Rights. Their 

clear and explicit purpose as expressed by the language of 

this instrument was to waive any and all pre-existing lien 

rights up to the date the instrument was signed. The testimony 

of plaintiff and Roger West contradicted this express purpose 

and should have been excluded. The parties are bound to the 

terms of the written lien waiver and cannot contradict or vary 

its terms by parol evidence. 

In finding of fact No. VII, the District Court held the 

lien waivers were solely limited to the amount received at that 

time and that waivers did not foreclose plaintiff from an 

action to foreclose a mechanics' lien for all amounts in excess 

of those received. The District Court in this finding went on 

to say ". . . that this manner of proceeding was requested by 

the defendant Big Sky of Montana, Inc." In my view the record 

is barren of any evidence to support this finding. On the 
contrary, the record supports a finding that owner (Big 

Sky) was a stranger to this agreement between the subcontractor 

and the general contractor. 

The oral agreement between subcontractor and general 

contractor is unenforceable. The written lien waivers cannot 

be modified by any oral agreement between plaintiff and Inland 

Construction Company, the general contractor. A contract in 

writing can only be modified or altered by another contract in 

writing or by an executed oral agreement. Section 13-907, 

R.C.M. 1947; Ikovich v. Silver Bow Motor Co. (1945), 117 Mont. 

268, 157 P.2d 785. Here, there is neither a written agreement 

modifying the lien waivers nor an executed oral agreement. 

In my view, plaintiff subcontractor is estopped from 

asserting his claim in this suit by the reliance of the owner 

(Big Sky) on the general lien waiver. The general rule has 

been stated in this language: 

"A subcontractor . . . is estopped to assert 

a lien where the owner has settled with the 

contractor or made payments to the contractor . . ., in reliance on the subcontractor's . . . receipt for the amount due him, his statement 

that he has been paid by the contractor, his 

representation that he will not look to the 

owner for payment of work performed or materials 

furnished, . . ." 57 C.J.S. Mechanics' Liens 

8230, p. 804. 

Here, Big Sky made its payments to the general contractor 

because the general contractor presented lien waivers signed by 

the subcontractor to it. Big Sky did not know the language 

of these waivers had been contradicted by an oral agreement 

between the subcontractor and the general contractor. The 

subcontractor cannot, at this late date, assert that he signed 

a written general waiver of his lien rights, but his intent 

was not to waive those rights. 

In effect, the majority is obligating the owner of the 

condominium project, Big Sky, to pay the excess amounts claimed 
by the subcontractor under a course of dealings between 

the general contractor and plaintiff subcontractor to extract 

monies from the owner Big Sky. I do not believe this Court 

should condone such a scheme. 

For the foregoing reasons, I would reverse the judgment 

of the District Court and enter judgment for the defendant. 

.............................. Chief Justice