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No. 96-512 INTHE SUPREME COURT OF THE STATE OF MONTANA

CHARLES S. ("Chuck") BRAGG, Jr., and PATRICIA S. BRAGG, husband and wife, Plaintiffs and Respondents,

v. WILLIAM D. McLAUGHLIN and SONJAINDRELAND MCLAUGHLIN, husband and wife, Defendants and Appellants. 1997

APPEALFROM: District Court ofthe Sixth Judicial District, In and for the County ofPark, TheHonorable John R. Christensen, Judge presiding. COUNSEL OF RECORD:

Filed: ForAppellant: William D. McLaughlin, SonjaIndreland McLaughlin, Wilsall, Montana, pro se ForRespondent: JeffreyN. Pence, Huppert & Swindlehurst, Livingston, Montana
Submitted on Briefs: February 27, 1997 Decided: August 28, 1997.'
Justice James C. Nelson delivered the Opinion ofthe Court.
Pursuant to Section I, Paragraph 3(c), Montana Supreme Court 1995 Internal OperatingRules, the following decision shallnotbe cited as precedentand shallbepublished by its filing as a public document with the Clerk ofthe Supreme Court andby areport ofits result to State Reporter Publishing Company and West Publishing Company. William and SonjaMcLaughlin (the McLaughlins) appeal ajudgment ofthe District Court for the SixthJudicial District, ParkCounty, granting quiettitle overan easement across the McLaughlins' property to Charles and Patricia Bragg (the Braggs) and permanently enjoining the McLaughlins from interfering withthe easement. The court also awarded the Braggs compensatory andpunitive damages. The McLaughlins appeal. We affirm in part,
reverse in part and remand for further proceedings consistent with this opinion. We address the following issues on appeal: 1. Whetherthe DistrictCourterredin exercisingjurisdictionoverthis cause ofaction. 2. Whether the District Court erred in determining that a certain provision ofthe McLaughlins' deed to real property creates an access easement across the McLaughlins' property for the benefit ofreal property owned by the Braggs and in quieting title to that easement. 3. Whether the District Court erred in determining that a certain boundary fence constructed by the Braggs is on the true boundary line between the Braggs' and the McLaughlins' real property and in quieting title thereto. 2,

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4. Whetherthe District Court erred in issuing a permanentinjunction enjoining the McLaughlins from interfering with the Braggs' access easement. 5. Whetherthe District Court erred in determining that the McLaughlins slandered the Braggs' title to theirreal property. 6. Whetherthe District Court erred in determining that the McLaughlins interfered with the Braggs' listing contract. 7. Whetherthe District Court erredin awarding compensatory and punitive damages to the Braggs. Factual and Procedural Background The Braggs and the McLaughlins own adjoining parcels ofreal property situated in ParkCounty. Theypurchasedthe parcels from a common grantor, Stan and Charlottte Clark (the Clarks). The McLaughlins' deedprovides that a roadway easement exists across their propertyproviding access to the Braggs' property. Withoutthis easement, the Braggs have

no other legal orinsurable access to theirproperty. The Clarkspurchasedthe parcels inquestion along with several otherparcels in 1974. In 1988, the Clarks subdivided one ofthe parcels into three tracts lying side by side which

we will refer to as Tracts A, BandC. In July 1992, the Clarks further subdivided Tract C into two tracts which we will refer to as Tracts C-l and C-2. Tract C-2 consists ofthe northernmost 40 acres ofTract C.

3In 1992, the Clarks and the McLaughlins entered into negotiations for the purchase ofTracts A, Band C-l. The Clarks hadpreviously agreed to sell Tract C-2 to the Braggs. Stan Clark testified that during negotiations with the McLaughlins, he advised them ofthe need to provide the Braggs with access to Tract C-2 over the property the McLaughlins intendedto purchase. The Clarks conveyed Tracts A, Band C-l to the McLaughlins by Warranty Deed dated August 10, 1992, andrecorded on August 20, 1992. The Clarks conveyed Tract C-2 to the Braggs byWarranty Deeddated October 9, 1992, and recorded on October 13, 1992. The deed to the McLaughlins contained the following language: SPECIAL PROVISION for the benefit ofTract C-2, Certificate of Survey 1151, Park County, Montana, as follows: "Grantees agree to provide an access (roadway) easement for the benefit ofthe propertybeing acquiredby Chuck Bragg, his heirs and assigns, over the most directroute, reasonable andpossible for accesspurposes, which easementshall not be more than fifteen (15) feet in width. Grantees may, at their option, designate Bragg's said easement to coincide with the roadway to be constructedbythe Grantees, when such roadway is completed." Sonja McLaughlin, who is a licensed attorney in the State ofWashington, testified that she drew up this provision. Neitherparty'sproperty adjoins a countyroad, thus bothparties must cross adjoining property to reach the countyroad. The adjoining property hadbeen ownedby the Clarks at
one time andthey reserved a 60-foot-wide access easement across this property to reach the Braggs' and the McLaughlins' properties.

4In April 1994, the Braggs decidedto sell Tract C-2 andpurchaseproperty in Meagher County. They listed Tract C-2 with a real estate agent in Livingston. When the real estate agent went to inspect the property and take photographs for use in the sale, she was approached by the McLaughlins who infonned her that no easement existed across the McLaughlins' property andthatit would costthe Braggs $40,000 to obtain an easement. The McLaughlins later infonnedthe Braggs that they had no legal access to Tract C-2 over the McLaughlins' property. In June 1994, the McLaughlins filed a notice in the office ofthe Park County Clerk and Recorder stating that the Braggs "have no right ofany kind, legal orprescriptive, to pass
over [the McLaughlins'] property." The notice also alleged that a fence constructed by the Braggs between Tracts C-l and C-2 did not lie on the true boundary line between the two tracts. A copy ofthis notice was mailed to the Braggs. The McLaughlins erected "No Trespassing" signs on the property, placed locks on the access road gates and blocked the roadwith abandonedvehicles. Because ofthese actionsbythe McLaughlins, the Braggs'real estate agent refused to show the property. On June 29, 1994, the Braggs filed a complaint against the McLaughlins alleging interference withthe Braggs' access easement, slanderoftitle, andinterference with contract. They asked the court to quiet title to the easement to them along with the boundary line between Tracts C-l and C-2 as previously established by the survey. The Braggs also

5requested a preliminary injunction preventing the McLaughlins from interfering with the Braggs' easement during the pendency ofthis action. Hearings were conducted on August 9, 1994, and September 9, 1994, after which the District Court issuedthe preliminary injunctionrequestedbythe Braggs. The McLaughlins appealedthe issuance ofthe preliminaryinjunction andthis Courtaffirmedthe District Court

on September 7, 1995. Following a benchtrial conducted on April 24, 1996, and May 23, 1996, the District Court filed its Findings ofFact and Conclusions ofLaw and its Judgment and Injunction Order on May 31, 1996. The court held that the Braggs have an access easement over the McLaughlins' property and that the easement is appurtenant to the land. The court quieted title to the easement in favor ofthe Braggs andpermanently enjoined the McLaughlins from interfering with the easement. The court also held that the McLaughlins slandered the Braggs' title to theirproperty, interferedwiththe Braggs' listing contractwith theirreal estate agent, and that the fence constructedby the Braggs was properly on the true boundary line betweenthe McLaughlins' tract oflandand the Braggs' tract ofland. The court awarded the Braggs compensatory andpunitive damages. The McLaughlins appeal the District Court's judgment. Standard ofReview The standard ofreview ofa district court's findings offact is whether the court's findings are clearly erroneous. Daines v. Knight (1995), 269 Mont. 320,324,888 P.2d 904,

6906 (citing Columbia Grain Intern. v. Cereck (1993),258 Mont. 414, 417,852 P.2d 676, 678). The standard ofreview ofa district court's conclusions oflaw is whetherthe court's interpretation ofthe law is correct. Carbon County v. Union Reserve Coal Co., Inc. (1995), 271 Mont. 459, 469,898 P.2d 680,686 (citing Steer, Inc. v. Department ofRevenue (1990), 245 Mont. 470, 474-75,803 P.2d 601,603). Issue 1. Whether the District Courterred in exercisingjurisdiction overthis cause ofaction. The McLaughlins raised the issue of subject matter jurisdiction several times throughout the proceedings in District Court. Each time the court determined that it had subject matterjurisdiction overthis cause ofaction and denied the McLaughlins' motions to dismiss on that basis. On appeal, the McLaughlins again contend that the District Court lacked subjectmatterjurisdiction and that the Braggs lacked standing to bring this cause of action.In theircomplaint, the Braggs asked the courtto quiet title to themtheborderbetween Tracts C-l and C-2 as previously established by survey and the right to access Tract C-2
across McLaughlins' property. An easement is a nonpossessory interest in real property. Kuhlman v. Rivera (1985), 216 Mont. 353, 358, 701 P.2d 982, 985. Section 70-28-101, MCA, provides: Quiet title action authorized. An action may be brought and prosecuted to final decree, judgment, or order by any person or persons, whether in actual possession or not, claiming title to real estate against any 7person or persons, both known and unknown, who claim or may claim any right, title, estate, or interest therein or lien or encumbrance thereon adverse to plaintiffs ownership or any clouduponplaintiffs title thereto, whether such claim or possible claim be present or contingent, including any claim or possible claim ofdower, inchoate or accrued, for the purpose ofdetermining such claim orpossible claim and quieting the title to said real estate. In addition, Section 70-28-103, MCA, requires that quiet title actions be brought in the county where the real property is situated. Consequently, contrary to the McLaughlins' repeated assertions, the Braggs' cause of action to quiet title to the easement and to the boundary line is an appropriate action to grant subject matterjurisdiction to a district court. And, because the property at issue is located in Park County, the District Court for the Sixth Judicial District hadjurisdictionto hearthis case. As to the issue ofstanding, § 70-17-109, MCA, provides: Who maybringaction to enforce easement. The ownerofany estate in a dominant tenement or the occupant ofsuch tenement may maintain an action for the enforcement ofan easement attached thereto. Therefore, the Braggs, as owners ofthe dominant tenement in this case, have standing to bring an action to enforce their easement. Accordingly, we hold that the District Court did have subjectmatterjurisdiction over this cause ofaction. Issue 2. Whetherthe District Courterred in determiningthat a certain provision of the McLaughlins' deed to real property creates an access easement across the McLaughlins' property for the benefit ofreal property owned by the Braggs and in quieting title to that easement.

8The District Court concludedthat the "special provision" in the Clarkto McLaughlin deed reserves an easement for ingress and egress across McLaughlins' property (Tracts A, Band C-1) for the benefit ofTract C-2. The court quieted title to the easement across McLaughlins' property in favor ofTract C-2, determining that the easement is appurtenant to Tract C-2 and runs with the land. TheMcLaughlins contendthatthis "specialprovision" in the deedis merely apromise to provide some type ofaccess in the future, that because this provision is at the end ofthe deed it must be construed separately from the rest ofthe deed, and that the District Court erred in allowing Clark, the grantor, and others to testify regarding the intent ofthe special proVISIOn. The "specialprovision" in the Clark to McLaughlin deedprovides: SPECIAL PROVISION for the benefit of Tract C-2, Certificate of Survey 1151, Park County, Montana, as follows: "Grantees agree to provide an access (roadway) easement for the benefit ofthe propertybeing acquiredby Chuck Bragg, his heirs and assigns, over the most directroute,reasonable andpossible for access purposes, whicheasement shall not be more than fifteen (15) feet in width. Grantees may, at their option, designate Bragg's said easement to coincide with the roadway to be constructedby the Grantees, when such roadway is completed." Sonja McLaughlin testified that she drafted this "special provision" and that she intentionally placed this provision at the end ofthe deed so that it would be considered separate from the rest ofthe deed. Itis a well establishedmaxim of jurisprudence that ifan uncertainty exists in a contract, the language ofthe contract shouldbe interpreted against the party drafting it. See 

### § 28-3-206, MCA. In addition, this Court has stated that the entire

9instrument mustbe considered "withoutregard to the position ofthe several clauses." City ofMissoulav. Mix (1950), 123 Mont. 365, 370,214 P.2d 212,215. The McLaughlins contend that the District Court erred in allowing testimony regarding the intention ofthe parties in drafting the "special provision." We disagree. "For the proper construction of an instrument, the circumstances under which it was made, including the situation ofthe subject ofthe instrument and ofthe parties to it, may also be shown so thatthejudgebeplacedin the position ofthose whose language he is to interpret." Section 1-4-102, MCA. "In the construction ofan instrument, the intention ofthe parties is to bepursuedifpossible." Section 1-4-103, MCA. Moreover, § 70-20-202, MCA, provides in pertinentpart: (1) When the terms ofan agreement have been reduced to writing by the parties, it is to be considered as containing all those terms, and therefore there can be between the parties and their representatives or successors in interest no evidence ofthe terms ofthe agreement other than the contents of the writing except in the following cases: (a) where a mistake or imperfection ofthe writing is put in issue by the pleadings
.... (2) But this section does not exclude other evidence of the circumstances under which the agreement was made orto which it relates, as defined in 1-4-102, or to explain an extrinsic ambiguity or to establish illegality or fraud. Itwas Clark's testimony that his intent in adding the "special provision" was to allow the Braggs access to Tract C-2 across Tracts A, BandC-1. He asserted that he repeatedly made that clearto the McLaughlins throughout their negotiations for the purchase ofTracts A, BandC-1. The real estate agenthandling the property and Clark's attorney also testified 10that Clark was adamant about providing access to Tract C-2 across Tracts A, Band C-l. Although the "special provision" does not use the term "reserve," it does state that McLaughlins agree to provide an easement for the benefit ofTract C-2. Therefore, we agree with the District Court's conclusion that the "special provision"
IS an enforceable reservation and grant of an easement appurtenant to Tract C-2. Furthermore, we agree with the District Court's finding that the McLaughlins intended to conveythe appearance ofreserving, granting, orcreating an easementfor thebenefit ofTract C-2 when in fact they intended all along to deny an easement across theirproperty. Accordingly, we hold that the District Court was correct in determining that the "special provision" in the McLaughlins' deed created an access easement across their property for the benefit ofTract C-2 and that the court was correct in quieting title to that easement in favor ofTract C-2. Issue 3. Whether the District Court erred in determining that a certain boundary fence constructed by the Braggs is on the true boundary line between the Braggs' and the McLaughlins' real property and in quieting title thereto. The District Court concluded that the fence installed by the Braggs between Tracts C-l and C-2 is properly on the boundary line between those two tracts and the court quieted title accordingly. The McLaughlins contend that the fence is not on the true boundary line and that the District Court erred in quieting title to the fence line as an action to quiet title is not the proper action for a boundary dispute.

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### Chuck Bragg testified that he and Jerry Acker (Acker) established the boundary line between Tracts C-1 and C-2 by locating the four pins set by surveyor Warren Latvala representing the comers ofTract C-2. Bragg also testified that he and Acker then used a transit to determine the boundary line and the proper location for the fence. Braggs' testimony was corroboratedbyAcker. The McLaughlins offered no evidence to dispute the testimony that the fence followed the boundary line between the two tracts. Thus, the evidence supported the District Court's finding that the fence was constructed on the true boundary line between Tracts C-1 and C-2. Accordingly, we hold that the District Court was correct in quieting title to the boundary line in favor ofthe Braggs. Issue 4. Whether the District Court erred in issuing a permanent injunction enjoining the McLaughlins from interfering with the Braggs' access easement. In its Judgment and Injunction Order, filed May 31, 1996, the District Court "permanently and forever" enjoined McLaughlins and their heirs, successors, assigns and agents from obstructing or interfering with the use and enjoyment ofthe easement by the Braggs and their heirs, successors, assigns or agents. McLaughlins contend on appeal that the injunction is not supportedby the District Court's Findings ofFact and Conclusions of Law or by the provisions in the Montana Code Annotated regarding injunctions. We disagree.

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### When final injunction may be granted to prevent breach of obligation. Except where otherwise providedby the provisions ofthe code governing specific andpreventiverelief
... , a final injunctionmaybe granted to preventthe breach ofan obligation existing infavor ofthe applicant where: (3) the restraint is necessary to prevent a multiplicity ofjudicial proceedings
.... There was sufficient evidence in this case for the District Court to find that restraint was necessary in order to avoid furtherjudicial proceedings. In its findings offact, the District Courtpointedto the following evidence to support its conclusion that the McLaughlins had interfered with the easement: the McLaughlins locked the gates across the access road without providing keys to the Braggs; blocked the road with vehicles; filed the "Legal Notice" stating that the Braggs had no right to pass over the McLaughlins' property; and informed the real estate agents that the Braggs had no legal right of access across the McLaughlins' property. We have previously stated that the issuance or refusal ofan injunction is addressed to the discretion ofthe trial court. Butlerv. Germann (1991),251 Mont. 107, 114, 822 P.2d 1067, 1072 (citing Framev. Frame (1987), 227 Mont. 439, 444, 740 P.2d 655,659). We find
no abuse ofdiscretion here. Moreover, a review ofthe record in this case reveals that even after the District Court issued the injunction, the McLaughlins continued to hinder the Braggs' access to Tract C-2 by cutting a trench across the access road causing the Braggs to file with the District Court a Motion for Orderto Show Cause for Contempt.

13Therefore, we hold that the District Court was correct in issuing a pennanent injunction enjoining the McLaughlins from interfering with the Braggs' access easement. Issue 5. Whether the District Court erred in determining that the McLaughlins slandered the Braggs' title to their real property. The District Court concludedthatthe McLaughlins slanderedthe Braggs' title to their property by placing the "Legal Notice" in the public records. Slander oftitle has been defined as "maliciouslypublish[ing] false matterwhichbrings in question or disparages the title to property, thereby causing special damage to the owner." Felska v. Goulding (1989), 238 Mont. 224, 232, 776 P.2d 530,535(quoting First Security Bank ofBozemanv. Tholkes (1976), 169 Mont. 422, 427, 547 P.2d 1328, 1331). The "Legal Notice" placed into the public records by the McLaughlins called into question the legal access to Tract C-2 and the location ofthe boundary fence between Tracts C-1 and C-2. Additionally, McLaughlins' denial ofthe existence ofthe easement was done maliciously and with a reckless disregard for the truth. A title examiner for Security Title testifiedthatpriorto the filing ofthe "LegalNotice," his companywould have insured access to TractC-2 overthe easement createdbythe "specialprovision" in the Clarkto McLaughlin deed and that without an insurable access to Tract C-2, the property was rendered unmarketable. Accordingly, we hold that the District Court was correct in concluding that the McLaughlins slandered the Braggs' title to theirreal property. 14Issue 6. Whether the District Court erred in determining that the McLaughlins interfered with the Braggs' listing contract. The District Court concludedthat the McLaughlins intentionally interfered with the Braggs' listing contract for the sale of their property. An action for interference with contractual orbusiness relations requires: (1) intentional and willful acts; (2) calculated to
cause damage to the plaintiffin his orherbusiness; (3) done with the unlawful purpose of causing damage or loss, withoutjustifiable cause on the part ofthe actor; and (4) actual damage or loss. Daniels v. Dean (1992), 253 Mont. 465,474,833 P.2d 1078, 1084. The McLaughlins toldthe Braggs'real estate agents thatthe Braggs did not have legal

access across the McLaughlins'property. One ofthe real estate agents testified that because ofthe McLaughlins' actions andthreats, the real estate agency was unable to perform under the listing contract. Thus, the Braggs were unable to sell their property and they lost the opportunity to purchase otherproperty at a favorable price. The McLaughlins' intentional and willful acts ofinforming the real estate agents that

no access existed when an access did in fact exist and ofthreatening to prosecute anyone crossingMcLaughlins' property damagedthe Braggs. Accordingly, we hold that the District Court was correct in determining that the McLaughlins interfered with the Braggs' listing contract.

15Issue 7. WhethertheDistrictCourterredin awardingcompensatory andpunitive damages to the Braggs. II j 'l

The District Court found that the McLaughlins' position and arguments were "frivolous and utterly without merit" and awarded the Braggs compensatory damages for their reasonable attorney fees and litigation costs in the amount of$27,214.27, along with future compensatory damages for all reasonable attorney fees and costs associated with defending the District Court'sjudgmenton appeal. The longstanding rule in Montana is that absent statutory orcontractual authority, attorney fees will notbe awarded. Tannerv. Dream Island, Inc. (1996),275 Mont. 414,429,913 P.2d 641,650 (citations omitted). In certain instances in which bad faith or malicious behavior are involved, an equitable award of attorney fees has been upheld. Tanner, 913 P.2d at 650. However, this equitable consideration is invoked infrequently and only where the prevailing party has been required to defend against an action, not when the prevailing party instituted the action. Tanner, 913 P.2d at 651; Goodover v. Lindey's Inc. (1992),255 Mont. 430, 447,843 P.2d 765, 775. The case before us presents neither a statutory nor a contractual basis for awarding attorney fees. Nor does it fall within one ofthe narrow exceptions to the general rule regarding attorney fees. Therefore, weholdthatthe DistrictCourterredin awarding attorney fees to the Braggs, and we reverse this award. Along withthe award ofattorney fees, the District Court awardedthe Braggspunitive damages in the amount of$15,000. Punitive damages are allowed for acts ofactual fraud or 16actual malice. However, in awardingpunitive damages thejudgemust complywith § 27-1- 221(7)(b), MeA, whichprovides: When an award ofpunitive damages is made by the judge, he shall clearly state his reasons for making the award in findings of fact and conclusions of law, demonstrating consideration of each of the following matters: (i) the nature andreprehensibility ofthe defendant's wrongdoing; (ii) the extent ofthe defendant's wrongdoing; (iii) the intent ofthe defendant in committing the wrong; (iv) the profitability ofthe defendant's wrongdoing, ifapplicable; (v) the amount ofactual damages awarded bythejury; (vi) the defendant's net worth; (vii) previous awards ofpunitive or exemplary damages against the defendant basedupon the same wrongful act; (viii) potential orprior criminal sanctions against the defendantbased upon the same wrongful act; and (ix) any other circumstances that may operate to increase orreduce, without wholly defeating, punitive damages. In its Findings ofFact and Conclusions ofLaw, the District Court failed to demonstrate its consideration ofeach ofthe elements of§ 27-1-221(7)(b), MCA. Accordingly, we hold that the District Court erred in awarding punitive damages to the Braggs without complying with the statute and we remand to the District Court for reconsideration ofpunitive damages in light ofthe requirements of§ 27-1-221(7)(b), MCA. Affirmed in part, reversed in part and remanded to the District Court for further proceedings consistent with this opinion.

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### We Concur:

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