No. 84-539 IN THE SUPREME COURT OF THE STATE OF MONTANA 1985

A. KENDRICK SMITH; MAX A. HANSEN, 

### and W. G. GILBERT, JR., Plaintiffs and Respondents,

CLINTON L. HOWERY 

### and JACQUELINE J. HOWERY,Defendants

### and Appellants.

APPEAL FROM: DistrictCourtof the Fifth

### Judicial District, 

### In and 

### for the Countyof Beaverhead, TheHonorableMark 

### Sullivan, Judge presiding.

COUNSEL OF RECORD:

For Appellants: RobertT. Cumrnins, Helena, Montana

ForRespondents: Schulz, Davis & 

### Warren, Dillon, Montana Garlington, Lohn & Robinson, Missoula, Montana

Submitted

### on Briefs: May 9, 1985 Decided: 

### July 2, 1985

Filed: _i[jt

## 2 

## 4585 d

ClerkMr. Justice Frank B. Morrison, Jr., delivered the Opinion of theCourt. Clinton and Jacqueline Howery (Howerys) appeal the May 14, 1984, order of theFifthJudicialDistrictCourt granting respondent attorneys, Kendrick Smith, Max Hansen and W.G. Gilbert, 

### Jr.'s motion for summary judgment. We affirm the order granting summary judgment. In February of 1979, the State of Montana filed an action inBeaverhead County seekingtocondemn .76 of an acre of Howerys' land forhighway purposes. The Stateand Howerys



### were unable to agree on compensation. The Howerys therefore hired the respondents to represent them in the condemnation action. The written retainer agreement executed by Howerys on March 21, 1979, contains the following provisions regarding costs and attorneys fees: "1. You are topay us all of our reasonable expenses which 

### we willtrytokeep toa minimum, and these 

### will be payable to us, no matter what the outcome of the case. 

# .. . "2. The fees forour services

### willbe on a contingent fee basis, and you have agreed to pay us 33-1/3% of the recovery by judgment or compromise (and you would have to fully agree to any compro

### mise before 

### it would be effective). 

### In the event there 

### is an appeal inthe case by either side, the fee would be raised to40%of the amount of recovery. There 

### willbe only one fee asbetween thetwo law firms." The Howerys recovered $315,284.03 from the State: $243,475.00 for total damages; $42,958.33 for interest on those damages from the date of taking; and $28,850.70 for costs and attorneys' fees. The State paid the entirejudgment prior to appealing to this Court. We affirmed that judgment in Stateof Montana v. Howery (Mont. 1983), 664 

### P.2d 1387, 40 St.Rep. 975. Howerys 

### were further awarded $8,427.19, $8,220.00 of which was attorneys' fees, for the State's appeal.While the appeal was pending in this Court, $303,109.03 of the $315,284.03 was placed 

### inthree certificatesof depos

### it jointly held in the names of attorney Max Hansen and the Howerys. The remaining $12,175.00 was paid directly to respondent attorneys for their costs and witness fees. The certificates of deposit earned post-judgment interest totalling $40,458.38. Following the State's unsuccessful appeal, the Howerys and respondents began negotiations to 

### settle the attorneys' fees due and owing to the respondents. The parties 

### were unable to reach agreement and respondents filed a complaint July 26, 1983, seeking $143,329.68 for work performed and services rendered. An amended complaint seeking the same amount was filedthenext day. Permission tofilea second amended complaint was granted respondents on October 24, 1983. That complaint reduced the demand for attorneys' fees to $130,717.60 and added a second count, alleging a breach by Howerys of an implied covenant of fair dealing with the attorneys and requesting exemplary damages of $50,000.00. On November 18, 1983, Howerys filed an answer, counterclaim and demand for jury trial. Howerys summarily denied all the allegations contained in each count of respondents' complaint. Their counterclaim alleged, among other things, a breach of the attorneys' obligation todeal fairlywith them and violation of the fiduciary relationship between Howerys and the attorneys. On January 16, 1984, respondents filed a motion for summary judgment on Count I of the second amended complaint. The motion was accompanied by an affidavit of attorney Max Hansen setting forth pertinent details and requesting $129,866.34 forwork performed and services rendered pursuanttorespondents1 contract with Howerys. Clinton Howery filed

an affidavitinopposition tothemotion for summary judgment

on February 6, 1984. A hearing was held 

### May 4, 1984, and an order granting respondents

## ' motion for summary judgment was issued May 16, 1.984. The trial judge awarded respondents $129,866.34, statingthatno affirmativedefense toCount I had been pled, and, that: "Count I 

### is based upon a written agreement between the parties, a Judgment rendered 

### by the District Court of the Fifth Judicial 

### District of the State of Montana and an affirmance by theMontana Supreme Court, allof which areclear, certain and unambiguous. No extrinsic orpar01 evidence 

### is needed or admissible to explain any of the clear 

### terms and provisions of the written agreement. There areno genuine issues astoany material facts, and 

### it is the duty of thisCourt toapply the language of the agreement as written. The amount due and owing from defendants toplaintiffs 

### is fixed and 

### is not ambiguous in any way. 

# ..

# ." Count 

### I1 of respondent's complaint and Howerys' counterclaim

are stillpending. Following a Rule 54(b)

### , M.R.Civ.P., certification, Howerys filedthisappeal, raisingthe following issue: "Whether the District Court erred in granting the plaintiffs' motion for summary iudgment on Count I of the second amended complaint and determining under Rule 

### 56

### (c)

## , M.R.Civ.P., that the plaintiffs showed that there was no genuine issue as to any material fact and that they 

### were entitled tojudgment as

### a matter of law?" A motion for summary judgment should be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there 

### is no genuine issue astoany material fact and that the moving party 

### is entitled to a judgment as a matter of law. l1 Rule 56

### (c)

## , M.R.Civ.P. We have frequently stated therule: "It 

### is well established that a party moving for summary judgment has the burden of showing a complete absence of any genuine issue astoall facts deemed material in lightof the substantiveprinciples that entitle that party to 

### a judgment as amatter of law. (citations omitted). 

# . .I' Cereck v, Albertson's Inc. (1981), 195Mont. 409, 411, 637 P.2d 509, 511. We agree with the determination of the trial court that respondents have 

### metthisburden. The contract between the parties 

### is clear and unambiguous. It mandates that respondents shall 

### receive 40%of any recovery on appeal. When an attorney enters into a contingent feearrangement based on a percentage of thejudgment 

### or award recovered by the client and the totalamount recovered includes interest, the attorney 

### is entitled not only 

### to a percentage of the actual damages recovered, but 

### also 

### to a percentage of the pre-judgment and post-judgment interest recovered. See In

### re Edgecornbe Road (N.Y.App.Div. 1908), 128 App.Div. 432, 112N.Y.S. 845, regardingpre-judgment interest and Matter of Innkeepers of New Castle, Inc. ( 7 t h C i r . 1982), 671 F.2d 221, regarding post-judgment interest. Respondent Max Hansen's affidavitrequesting $129,866.34 

### is consistent with the contract between respondents and Howerys and with the law. 

### The $129,866.34 represents 40%of the actual damages ($243,475 x .40 = $97,390) and 40%of the pre-judgment interest ($42,958.33 

### x .40 = $17,183.33) 

### or $114,573.33, together with 37.79937% of the post-judgment interest ($40,458.38 

### x .3779937 = $15,293.01)

# . Respondents



### wereproperly awarded 37.79937%of thepost-judgment interest because only 37.79937%of themoney depositedinthecertificates of deposit was theirs ($114,573.33/$303,109.03 = 37.79937%). The amounts previously requestedby respondents resulted from improper calculations and not from an ambiguous contract, asHowerys contend. The initial request was for 40% 

### of theentireaward, costsand interest. That request failed to consider that respondents had already been directly paidtheir actual costs, pursuant to the contract. The amount requested inthe second amended complaint failed toconsider that only 37.79973% of the money in the certificates of depositbelonged torespondents. The contract 

### is clear. The respondents are entitled to$129,866.34. Next, the Howerys allege that their counterclaim should also be treated as an affirmative defense tothe allegations in Count I of respondents' complaint and that the counterclaim, when treated as an affirmative defense, raises issues of material fact, thus foreclosing a summary judgment determination. We agree that under our liberal pleading rules, the counterclaim can be treated as an affirmative defense. Rule 8(c),M.R.Civ.P. However, the

### counterclaim/affirmative defense does not foreclose a summary judgment determination

on Count I. The primary allegations contained within the counterclaim involve the breach of the fiduciary relationship between the attorneys and their clients and the breach of the obligation of good faith and fairdealing owed by the attorneys to their clients. These allegations are separate and distinct from the present issue, whether the attorneys' fees contract

### isclearand unambiguous. Finally, 

### we will not consider Howerys' contention that the contract does not reflect the 

### termsmutually agreed upon by the parties as that allegation depends entirely on evidence extrinsictothecontract. 

## "'The principle 

### iswell-established and of general application, subject to certain exceptions, that when a contract 

## -- has been reduced to writing the contentsofh 

## -- writing cannot beadded to, contradicted, altered, orvaried byyrol or

### extrinsic evidence, and that suchwriting supersedes alloral negotiations concerning 

### its matter which preceded, accompanied, or led up 

### to 

### its execution. This was the <ule at common law, and has been embodied 

### in the statute law of this state.' (Emphasis in original.)

### "Section 28-2-905, MCA, 

### provides that when the terms of an agreement have been reduced to writing 

### by the parties, it is to be considered as 

### containing all the terms, and there can be no evidence of the terms of the agreement other than the contents of the writing except when a mistake or an imperfection of the writing, is at issue, or when the validity of the agreement is the fact in dispute." Perez-Lizano 

### v. Ayers 

### (Mont. 1985), 695 P.2d 467, 470, 42 St.Rep. 208, 212-213, citing West 

### River Equipment Co. 

## v. Holzworth ConstructionCo. (1959)

## , 134Mont. 582, 588, 335 P.2d 298, 302. The decision of 

### the trial court judge is affirmed.

hief Justice