No. 91-330 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1992 

AUDIT SERVICES, INC., 

a Montana corporation, 

Plaintiff and Respondent. - 

3 .~ 1992 -vsFRONTIER-WEST, INC., 

a corporation, 6 >;.?&fL ~k-.. . .2F SUPREME COURj 

Defendant and Appellant. m.uE OF MoNrmA 

APPEAL FROM: District Court of the Fourth Judicial District, 

In and for the County of Missoula, 

The Honorable John S. Henson, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Christopher B. Swartley; Datsopoulos, MacDonald & 

Lind, Missoula, Montana 

For Respondent: 

Dennis Tighe; Cure, Borer & Davis, Great Falls, 

Montana 

Filed: 

Submitted on Briefs: October 10, 1991 

Decided: March 3, 1992 

k 
Justice Karla M. Gray delivered the Opinion of the Court. 

The appellant, Frontier-West, Inc., appeals from a judgment 

entered by the District Court of the Fourth Judicial District, 

Missoula County. The judgment awarded the respondent, Audit 

Services, Inc., $1,791.32, representing $3,534.90 in delinquent 

contributions, liquidated damages, interest and audit fees less an 

offset of $1,743.58, plus $14,266 in attorney's fees and $91.35 in 

costs. We affirm and remand for determination of reasonable 

attorney's fees on appeal. 

The issues on appeal are: 

1. Did the District Court err in determining that a contract 

existed between the parties? 

2. Did the District Court err in awarding judgment to Audit 

Services for liquidated damages, interest and audit fees? 

3. Did the District Court err in awarding attorney's fees to 

Audit Services? 

4. Is Audit Services' claim estopped due to a failure to act 

upon constructive notice by Frontier-West? 

The appellant, Frontier-West, is a construction contractor. 

The respondent, Audit Services, is the assignee of the LaborersA.G.C. Pension Trust Fund, the Laborers-A.G.C. Training Trust Fund, 

the Laborers-A.G.C. Health and Welfare Trust Fund and the Southwest 

Montana Vacation - Savings Trust Fund (Trust Funds) for claims for 

fringe benefit contributions, liquidated damages, interest, audit 

fees and attorney's fees against Frontier-West. 

2 
From July 1987 through October 1987, Frontier-West was a 

subcontractor for American Asphalt, Inc. on a project at Malmstrom 

Air Force Base in Great Falls, Montana. On July 6, 1987, FrontierWest signed a project-only compliance agreement with the Montana 

District Council of Laborers. The compliance agreement obligated 

Frontier-West to abide by the terms and conditions of the 

collective bargaining agreement between American Asphalt and the 

Laborers and to be bound by and become a party to the trust 

agreements establishing the Trust Funds. After Frontier-West 

signed the compliance agreement, the Laborers unilaterally added a 

clarifying clause to that agreement. The clarification related 

solely to American Asphalt's obligations under the collective 

bargaining agreement. 

The trust agreements establishing the Trust Funds obligate an 

employer delinquent in paying fringe benefit contributions to pay 

liquidated damages and interest. Under the trust agreements, an 

employer is delinquent if it does not pay contributions by the 20th 

day of the calendar month in which they are due. The trust 

agreements further provide that if an audit of an employer's 

payroll records discloses that the employer has a reporting error 

greater than five percent of the total hours to be reported, the 

employer must bear the costs of the audit. 

Frontier-West employed a number of people to perform laborer 

work on the Malmstrom project and paid fringe benefit contributions 

to the Trust Funds based upon the number of labor hours worked. 

However, Frontier-West did not make fringe benefit contributions to 

3 
the Trust Funds for 957 hours worked by the three sons of the 

principal owners of the corporation and for 546 hours worked by 

four other employees performing laborer work. 

On February 22, 1988, H. G. 'lGus" Sand, an independent 

accountant hired by the Trust Funds, completed an audit of 

Frontier-West's corporate payroll records covering the work on the 

Malmstrom project. The audit disclosed the unreported hours. Mr. 

Sand calculated that Frontier-West owed the Trust Funds $6,386.47 

for contributions, liquidated damages, interest and audit fees. 

The results of the audit were sent to Frontier-West. 

Frontier-West took the position that it was not required to 

pay fringe benefit contributions for the hours worked by the 

owners' sons. It requested a revised audit separating the 957 

unreported hours for the owners' sons from the total unreported 

hours. Mr. Sand supplied the revision, which recalculated the 

total into contested and uncontested portions. The contested 

portion of the audit covered the 957 unreported hours for the 

owners' sons and totalled $4,161.41. The uncontested portion of 

the audit covered the remaining 546 unreported hours and totalled 

$2,476.87, of which $1,730.45 represented fringe benefit 

contributions due to the Trust Funds. The remainder represented 

liquidated damages, interest and audit fees. 

In May 1988, after receiving the revised audit, Frontier-West 

mailed a check to Mr. Sand for $1,730.45. The check was 

unaccompanied by instructions, remittance reports or 

correspondence. Mr. Sand forwarded the check to counsel for Audit 

4 
Services who informed Frontier-West that the partial payment check 

would not be deposited pending receipt of the remaining money owed 

for the contested and uncontested portions of the audit. FrontierWest did not pay or offer to pay the remaining balance of the 

uncontested portion of the audit. Audit Services did not deposit 

the check, which was returned to Frontier-West after this suit was 

filed. 

On September 16, 1988, Audit Services filed suit against 

Frontier-West pursuant to the Employee Retirement Income Security 

Act of 1974 (ERISA), 29 U.S.C. 5 1001, et seq. Audit Services' 

complaint alleged that Frontier-West breached its collective 

bargaining and trust agreement obligations to pay fringe benefit 

contributions. It sought payment of the delinquent contributions, 

together with liquidated damages, interest, audit fees and 

attorney's fees for both the contested and uncontested portions of 

the audit. 

On February 16, 1990, the National Labor Relations Board 

issued a decision concerning American Asphalt's collective 

bargaining agreement. The NLRB clarified that the bargaining unit 

excluded children and spouses of owners or substantial 

shareholders. It further stated that its order was limited to 

clarification of the unit as related to the specific issues before 

it and that it had no authority to resolve the contract dispute 

over fringe benefit contributions involving Frontier-West. 

On March 12, 1991, Audit Services voluntarily dismissed that 

portion of its complaint which sought contribution payments for 

5 
work performed by the owners' sons. It continued to seek 

collection of the contributions, liquidated damages, interest, 

audit fees and attorney's fees related to the uncontested portion 

of the audit. That same day, Frontier-West unconditionally 

tendered $1,730.45, representing the delinquent contributions, in 

partial satisfaction of the sums alleged to be due. Audit Services 

accepted Frontier-West's tender. 

The District Court held a hearing on Audit Services' remaining 

claims related to liquidated damages, interest, audit fees and 

attorney's fees and subsequently entered judgment in favor of Audit 

Services. The court concluded that an enforceable contract existed 

between the parties and that Frontier-west breached the contract by 

failing to pay fringe benefit contribution payments when due and 

liquidated damages, interest and audit fees when billed for those 

amounts. It concluded that Audit Services was entitled to recover 

$1,730.45 in delinquent contributions, $443.59 in liquidated 

damages, $724.29 in interest and $636.57 in audit fees. The total 

owing was offset by $1,743.58, representing Frontier-West's partial 

payment of $1,730.45 and an overpayment of $13.13 to the Trust 

Funds. The District Court further concluded that Audit Services 

was entitled to attorney's fees of $14,266. This appeal followed. 

I. 

Did the District Court err in determining that a contract 

existed between the parties? 

Initially, we note an issue of importance which has not been 

addressed by the parties or the District Court. From September 16, 

6 
1988, when the complaint was filed, until March 7, 1991, FrontierWest appeared in this action solely through its president, Edward 

P. Murphy. On March 7, 1991, the law firm of Datsopoulos, 

MacDonald & Lind gave notice of appearance on Frontier-West's 

behalf and continues to appear on its behalf on appeal. We take 

this opportunity to caution the district courts with respect to the 

propriety of allowing a corporate officer who is not an attorney to 

appear on behalf of a corporation. A corporation is a separate 

legal entity and cannot appear on its own behalf through an agent 

other than an attorney. Weaver v. Law Firm of Graybill, et al. 

(1990), 246 Mont. 175, 178, 803 P.2d 1089, 1091. 

In a case brought to enforce a contract between an employer 

and a labor organization, state courts have concurrent jurisdiction 

with federal courts but, in exercising that jurisdiction, state 

courts must apply federal substantive law. Audit Services, Inc. v. 

Harvey Bros. Constr. (1983), 204 Mont. 484, 487, 665 P.2d 192, 794. 

A state court may rely on state contract law as long as it 

effectuates the policy underlying federal labor legislation. 

Kemmis v. McGoldrick (9th Cir. 1983), 706 F.2d 993, 996. 

Frontier-West contends that it never approved the contract 

modification made by the Laborers. It asserts that there was no 

valid contract upon which Audit Services could collect. 

The District Court ruled that the compliance agreement signed 

by Frontier-West was a valid, enforceable contract because the 

modification did not materially alter Frontier-West's obligations 

under the agreement, Frontier-West ratified the agreement, and 

7 
Frontier-West's expectation when it entered into the agreement was 

to be bound. A trial court's findings of fact in a non-jury trial 

will not be disturbed unless they are clearly erroneous. Rule 

52(a), M.R.Civ.P. Conclusions of law will be upheld if they are 

correct. Steer, Inc. v. Department of Revenue (1990), 245 Mont. 

470, 474, 803 P.2d 601, 603. 

In its answer to the complaint filed against it in this 

action, Frontier-West admitted to being bound by the compliance 

agreement. It is well settled that the parties are bound by and 

estopped from controverting admissions in their pleadings. 

Grimsley v. Spencer (1983), 206 Mont. 184, 199, 670 P.2d 85, 93; 

Fey v. A. A. Oil Corp. (1955), 129 Mont. 300, 323, 285 P.2d 578, 

590. 

In addition, Frontier-West also ratified the agreement. This 

Court defined ratification in Audit Services, Inc. v. Francis 

Tindall Constr. (1979), 183 Mont. 474, 478, 600 P.2d 811, 813: 

II'Ratification' is defined to be the confirmation of a 

previous act done either by the party himself or by 

another. (Citing authority.) And a confirmation 

necessarily supposes knowledge of the thing ratified. 

(Citing authority.) It follows that to constitute a 

ratification there must be an acceptance of the results 

of the act with an intent to ratify and with full 

knowledge of all the material circumstances. Koerner v. 

Northern Pac. RY. Co. (1919), 56 Mont. 511, 520, 186 P. 

We further stated in Tindall that "[ilt is the manifestation of the 

ratifying party which controls." Tindall, 183 Mont. at 478, 600 

P.2d at 813. Here, Frontier-West's outward expressions and actions 

clearly show its intention to be bound. Despite the present claim 

337, 340. 

8 
that no binding contract ever existed, Frontier-West voluntarily 

paid a substantial portion of the contributions due to the Trust 

Funds pursuant to the terms of the agreement. We have previously 

held that such voluntary payments over a period of time with no 

attempt to rescind result in ratification of the agreement. Audit 

Services, Inc. v. Harvey Bros. Constr. (1983), 204 Mont. 484, 665 

P.2d 792. We hold that the District Court correctly concluded that 

a valid, binding contract existed between the parties. 

II. 

Did the District Court err in awarding judgment to Audit 

Services €or liquidated damages, interest and audit fees? 

Frontier-West asserts that Audit Services is not entitled to 

liquidated damages, interest and audit fees related to the 

uncontested claim. It argues that the underlying uncontested 

fringe benefit contribution obligation was extinguished by Audit 

Services' rejection of its timely tender of the check for $1,730.45 

prior to litigation. It cites Lehrkind v. McDonnell (1915), 51 

Mont. 343, 350, 153 P. 1012, 1014, where this Court stated: 

An unconditional offer in good faith to perform, by 

the party upon the obligation rests, coupled with the 

ability to perform, if rejected by the other party, is 

equivalent to full performance and extinguishes the 

obligation as to the party making the offer. 

Thus, according to Frontier-West, it would be unreasonable to 

require it to pay penalties in the form of liquidated damages, 

interest and audit fees when it was Audit Services' choice to 

litigate and Frontier-West had previously tendered substantial 

performance. 

9 
The District Court concluded that Frontier-West's tender was 

insufficient and had no effect on its contractual obligations. We 

find no error in this conclusion. An unconditional tender of 

performance extinguishes the underlying obligation. Section 28-1- 

1202(1), MCA; Lehrkind, 51 Mont. at 350, 153 P. at 1014. However, 

an offer of partial performance has no effect and will not 

extinguish the obligation. Section 28-1-1203, MCA. In order to 

constitute a valid tender, the party making the tender must offer 

a specific amount which covers all that the other party is entitled 

to including interest, costs and attorney's fees. 86 C.J.S. Tender 

§§ 7, 8. 

When Frontier-West signed the compliance agreement, it 

obligated itself, as it admitted in its answer to Audit Services' 

complaint, to be bound by and comply with the terms and conditions 

of the trust agreements establishing the Trust Funds. Under the 

factual circumstances of this case, Frontier-West was obligated 

under the trust agreements to pay liquidated damages, interest, and 

audit fees as well as the delinquent contributions. The record 

shows that the fringe benefit contributions for the 546 hours 

worked by the four Frontier-West employees involved were 

delinquent, pursuant to the trust agreements, in that they were not 

paid by the 20th day of the calendar month when they were due. The 

trust agreements obligate an employer delinquent in paying fringe 

benefit contributions to pay liquidated damages and interest. In 

addition, the 546 unreported hours resulted in a reporting error by 

Frontier-West which was greater than five percent of the total 

10 
hours reported: under the trust agreements, the magnitude of the 

reporting error obligated Frontier-West to bear the cost of 

examination of its payroll records. 

At the time Frontier-West received the "uncontested" portion 

of the audit, it had a contractual obligation to pay the $2,476.87 

in contributions, liquidated damages, interest and audit fees set 

forth in that audit. Performance according to the terms of the 

trust agreements required payment of $2,476.87. The $1,730.45 

tendered by Frontier-West constituted merely an offer of partial 

performance and, thus, had no effect on its contractual obligations 

under 5 28-1-1203, MCA. Audit Services specifically notified 

Frontier-West that its check was unacceptable and never deposited 

the check or reduced it to money. Given Frontier-West's clear 

contractual obligations on the record before us, we hold that the 

District Court did not err in awarding judgment to Audit Services 

for liquidated damages, interest and audit fees. 

111. 

Did the District Court err in awarding attorney's fees to 

Audit Services? 

Frontier-West asserts that the District Court erred in 

determining that Audit Services was the prevailing party in this 

action and, therefore, abused its discretion in awarding attorney's 

fees to Audit Services. Citing Medhus v. Dutter (1979), 184 Mont. 

437, 603 P.2d 669, Frontier-West contends that the prevailing party 

is the one which successfully prosecutes or defends the main issue 

of a suit. It contends that the main issue in this case was 

11 
whether Frontier-West owed fringe benefit contributions for the 

hours worked by the owners' sons as reflected in the contested 

portion of the revised audit. It argues that, because Audit 

Services dismissed the owners' sons issue, Frontier-West prevailed 

on the main issue of the case and is entitled to attorney's fees. 

Frontier-West s reliance on the "main issue" approach is misplaced. 

Audit Services brought this action under ERISA to collect 

contributions due under the trust agreements. An action to collect 

delinquent contributions is specifically authorized by 29 U.S.C. 5 

1145. The provisions governing attorney's fees under ERISA are set 

forth in 29 U.S.C. 5 1132(g) as follows: 

(1) In any action under this subchapter (other than 

an action described in paragraph (2)) by a participant, 

beneficiary, or fiduciary, the court in its discretion 

may allow a reasonable attorney's fee and costs of action 

to either party. 

(2) In any action under this subchapter by a 

fiduciary for or on behalf of a plan to enforce section 

1145 of this title in which a judgment in favor of the 

plan is awarded, the court shall award the plan-- 

... 

(D) reasonable attorney's fees and costs of 

the action, to be paid by the defendant . . . 

... 

Under the above statute, attorney's fees are discretionary in 

most actions under the subchapter in accordance with 5 1132(g) (1). 

However, in actions by a fiduciary for or on behalf of plan to 

enforce 5 1145, attorney's fees are mandatory if judgment is 

awarded in favor of the plan. Operating Engineers Pension Trust v. 

Reed (9th Cir. 1984), 726 F.2d 513. Because this is an action to 

enforce § 1145, the only question is whether this is an action by 

12 
a fiduciary for or on behalf of a plan in which judgment in favor 

of the plan was awarded. 

Here, the trustees or fiduciaries of the Trust Funds 

irrevocably assigned ownership of their claims against FrontierWest to Audit Services. As assignee of the claims against 

Frontier-West, Audit Services is the proper party plaintiff. Audit 

Services, Inc. v. Rolfson (9th Cir. 1981), 641 F.2d 757. In 

addition, Audit Services was substituted as a new party to the 

legal relations with respect to the subject matter and acquired the 

trustees' right to performance from Frontier-West. 4 Corbin on 

Contracts, g 861, at 421-22 (1963). Judgment was awarded to Audit 

Services for delinquent contributions, liquidated damages, interest 

and audit fees related to the uncontested portion of the audit. 

Therefore, the District Court's judgment falls within the mandatory 

attorney's fees provision of 5 1132 (9) (2) and not the discretionary 

provision of 5 1132(g) (1). Accordingly, we hold that the District 

Court properly determined that Audit Services was entitled to 

attorney's fees. 

Frontier-West further asserts that even if the District Court 

properly determined that Audit Services was entitled to attorney's 

fees, it abused its discretion by awarding Audit Services 

attorney's fees in the amount of $14,266. It argues that Audit 

Services requested the specific dollar amount of $2,100 in its 

complaint for attorney's fees and, because the complaint was never 

amended to account for other attorney's fees, Audit Services should 

be entitled to a maximum of $2,100. We disagree. 

13 
In R & W Leasing v. Mosher (1981), 195 Mont. 285, 636 P.2d 

832, we held that pursuant to Rule 15(b), M.R.Civ.P., relating to 

amendments to the pleadings to conform to the evidence, the 

district court did not err in awarding greater attorney's fees than 

were originally requested in the complaint even though the 

complaint was not formally amended. We concluded that no error 

occurred because a motion for attorney's fees, along with a 

supporting affidavit, had been filed with the court and, in 

conformity with the motion, a hearing on attorney's fees was held. 

In this case, we find no error on the part of the District Court in 

awarding a greater amount of attorney's fees than requested in the 

complaint. An evidentiary hearing was held, with full notice to 

both parties, on the precise issue of the amount of attorney's fees 

to be awarded. Audit Services presented an affidavit in support of 

the amount of attorney's fees requested, as well as testimony which 

was subject to cross-examination. At no time did Frontier-West 

object to the evidence on the basis that it did not conform to the 

dollar amount requested in the complaint. 

Frontier-West, citing Northwestern Nat'l Bank v. WeaverMaxwell, Inc. (1986), 224 Mont. 33, 729 P.2d 1258, also contends 

that where a lawsuit involves multiple claims and multiple 

theories, an award of attorney's fees must be based only on the 

time spent on those claims and theories on which the prevailing 

party was successful. It maintains that the District Court abused 

its discretion in awarding Audit Services $14,266 in attorney's 

fees because substantially all of the proceedings before the court 

14 
centered around the owners' sons fringe benefit contribution issue 

which ultimately was dismissed by Audit Services. 

The Ninth Circuit Court of Appeals has held that the correct 

method for calculating the amount of attorney's fees under ERISA is 

to use the "lodestar/multiplier" approach adopted by the United 

States Supreme Court in Hensley v. Eckerhart (1983), 461 U.S. 424, 

103 S.Ct. 1933, 76 L.Ed.2d 40. D'Emanuele v. Montgomery Ward & 

Co., Inc. (9th Cir. 1990), 904 F.2d 1379. The lodestar/multiplier 

approach essentially contains two parts. 

First, the court must determine a lodestar" amount by 

multiplying the number of hours reasonably expended on the 

litigation by a reasonable hourly rate. D'Emanuele, 904 F.2d at 

1383. In determining the number of hours reasonably expended, the 

court, in addition to other factors which may be appropriate under 

the circumstances, should consider those factors identified in Kerr 

v. Screen Extras Guild, Inc. (9th Cir. 1975), 526 F.2d 67, &. 

denied, (1976), 425 U.S. 951, 96 S.Ct. 1726, 48 L.Ed.2d 195, which 

have been held to be subsumed in the lodestar calculation. See 

Blum v. Stenson (1984), 465 U.S. 886, 104 S.Ct. 1541, 79 L.Ed.2d 

891; Chalmers v. City of Los Angeles (9th Cir. 1986), 796 F.2d 

1205. Those factors are: the novelty and complexity of the issues, 

the special skill and experience of counsel, the quality of the 

representation, the results obtained and the superior performance 

of counsel. w, 465 U.S. at 898-90. 

The "results obtained" factor is particularly important where 

a party is deemed prevailing even though it succeeded on only some 

15 
of the claims for relief. Henslev, 461 U.S. at 434. Unrelated 

claims must be treated as if they had been raised in separate 

lawsuits and, thus, no attorney's fees may be awarded for services 

on an unrelated, unsuccessful claim. However, where a party's 

claims involve a common core of facts or are based on related legal 

theories, "[mluch of counsel's time will be devoted generally to 

the litigation as a whole, making it difficult to divide the hours 

expended on a claim-by-claim basis." Hensley, 461 U.S. at 435. In 

such a situation, the court "should focus on the significance of 

the overall relief obtained . . . in relation to the hours 

reasonably expended on the litigation." Henslev, 461 U.S. at 435. 

Where a party has obtained excellent results, counsel should 

recover a full compensatory fee; the award should not be reduced 

simply because the party failed to prevail on every contention 

raised in the lawsuit. On the other hand, if a party has achieved 

limited success, a full compensatory fee may be an excessive amount 

even where the claims were interrelated. Henslev, 461 U.S. at 435- 

36. "The court necessarily has discretion in making this equitable 

judgment.'' Hensley, 461 U.S. at 437. 

Once the number of hours has been set, the court must 

determine a reasonable hourly rate considering the experience, 

skill, and reputation of the attorney requesting fees. D'Emanuele, 

904 F.2d at 1384. This determination is not made by reference to 

the rate actually charged by counsel, but rather to the market rate 

in the community for similar services of lawyers of reasonably 

comparable skill, experience, and reputation. D'Emanuele, 904 F.2d 

16 
at 1384. 

Once the lodestar amount has been determined, the second part 

of the "lodestar/multiplier" approach allows the court to increase 

or decrease that amount based on the Kerr factors which are not 

subsumed in the initial lodestar calculation. D'Emanuele, 904 F.2d 

1383. However, the initial lodestar amount is presumed to 

constitute a reasonable fee; thus, any upward or downward 

adjustments to that amount are rare. D'Emanuele, 904 F.2d at 1383. 

Although fee awards are left to the discretion of the district 

court, "[i]t remains important . . . for the district court to 

provide a concise but clear explanation of its reasons for the fee 

award. It Henslev, 461 U.S. at 437. The Ninth Circuit, in 

discussing what constitutes a concise but clear explanation, has 

stated that 'I [clourts need not attempt to portray the discretionary 

analyses that leads to their numerical conclusions as elaborate 

mathematical equations, but they must provide sufficient insight 

into the exercises of discretion to enable [the appellate court] to 

discharge [its] reviewing function.'' Cunningham v. County of Los 

Angeles (9th Cir. 1988), 879 F.2d 481, 485, &. denied, (1990), 

493 U.S. 1035, 110 S.Ct. 757, 107 L.Ed.2d 773. 

Our review of the award of $14,266 in attorney's fees under 

the "lodestar/multiplier" approach does not reveal an abuse of 

discretion on the part of the District Court. The court conducted 

an evidentiary hearing on the issue of attorney's fees. 

Thereafter, it concluded that Audit Services was entitled to 

attorney's fees pursuant to ERISA, 29 U.S.C. 5 1132(g) (2), which 

17 
authorizes an award of reasonable attorney's fees. The court found 

that Audit Services' counsel expended 222.5 attorney's hours and 

3.2 paralegal hours during the litigation of this action. It 

further found that the number of hours expended was reasonable 

considering the character of the legal services rendered, the labor 

and time involved, the character and importance of the litigation, 

and counsel's standing in the profession. The District Court 

stated that an additional basis for its finding that the number of 

hours expended was reasonable was Frontier-West's conduct in 

prolonging the litigation prior to such time as present counsel 

appeared on its behalf: 

Unfortunately for the parties herein and the Court, many 

of defendant's motions were repetitive and, under the law 

of the case established by the Court's Orders, lacked 

merit. The litigation seemed to go on and on because of 

defendant's contradictory positions and efforts to 

reargue settled issues. The defendant filed three 

Motions for Summary Judgment, a Motion for Relief From 

Order and a Motion for Reconsideration. The repetitive 

and successive motions together with plaintiff's Motion 

to Compel and Motion for Summary Judgment necessitated 

four hearings in Missoula. 

With regard to the hourly rate, the District Court found that 

Audit Services' counsel possesses the professional skill and 

familiarity with labor law commensurate with his fifteen years' 

experience in handling employee benefit plan collections. The 

court determined that counsel's requested hourly rates of $65 for 

attorney's time and $30 for paralegal time were "[rleasonable under 

the circumstances and well within the range of fees charged by 

attorney's [sic] in Montana." Because Frontier-West had already 

paid a court ordered sanction of $292.50 for attorney's fees, the 

18 
total amount of attorney's fees owing to Audit Services was 

determined to be $14,266. 

Although the District Court did not specifically rely on the 

"lodestar/multiplier" approach in setting the amount of attorney's 

fees, it substantially complied with that standard. As required 

under D'Emanuele, the court calculated the "lodestar" amount, 

$14,266, by multiplying the number of hours reasonably expended on 

the litigation by a reasonable hourly rate. It considered several 

factors similar to those factors subsumed in the lodestar 

calculation, including the complexity of the issues, the special 

skill and experience of counsel, the quality of representation and 

the range of fees charged in Montana. 

Audit Services original claims were for delinquent 

contributions, liquidated damages, interest, audit fees and 

attorney's fees relating to both the uncontested portion of the 

audit and the contested owners' sons portion of the audit. These 

claims all arose from the same core of facts: Frontier-West's 

failure and refusal to pay certain contributions in accordance with 

the terms of the trust agreements. While the degree of success is 

important in calculating attorney's fees even where all the claims 

are interrelated, the District Court placed significant emphasis on 

Frontier-West's conduct in prolonging the litigation. As noted 

earlier, the court necessarily has discretion in making the 

equitable judgment of whether the fees requested are excessive. 

Given the District Court's concise but clear explanation of its 

reasons for the fee award, we hold that the court did not abuse its 

19 
discretion in setting the amount of attorney's fees at $14,266. 

We note that the District Court, after calculating what was 

effectively the lodestar amount, did not consider whether to apply 

a multiplier to either increase or decrease the award. However, we 

conclude that the court's failure to consider a multiplier is not 

fatal to its award of fees in this action since, as noted earlier, 

the lodestar amount is presumed to constitute a reasonable fee and 

any adjustments to that amount are rare. D'Emanuele, 904 F.2d at 

1383. 

IV . 

Is Audit Services' claim estopped due to a failure to act upon 

constructive notice by Frontier-West? 

Frontier-West contends that the Trust Funds were on notice in 

the summer of 1987 that it was not paying contributions for the 

hours worked by the owners' sons and, therefore, Audit Services "is 

estopped from asserting that Frontier-West owes trust fund 

contributions for the sons of the owners. . . . While the 

argument is not well presented, Frontier-West is apparently 

asserting that a timely investigation by the Trust Funds regarding 

its intent to pay contributions for the owners' sons would have 

mitigated its liability. 

The principles of equitable estoppel apply to employee benefit 

plans. Dockray v. Phelps Dodge Corp. (9th Cir. 1986), 801 F.2d 

1149, 1155. Estoppel is available against a party "[w]ho has made 

a knowing false representation, or concealment of material facts, 

to a party ignorant of the true facts, with the intention that the 

20 
other party should rely on the representation, and the other party 

actually and detrimentally relies on it." Dockrav, 801 F.2d at 

1155. 

The record shows that the Trust Funds received a remittance 

report from Frontier-West dated August 18, 1987 which stated only 

that the "sons of owners" were not reported. Frontier-West seems 

to rely on the Trust Fund's lack of action between the summer of 

1987 and February 1988 as a basis for estoppel. However, there is 

no evidence in the record that would give rise to estoppel. 

It was not until the audit in February 1988 that the Trust 

Funds obtained information regarding the owners' sons such as which 

sons were involved, whether they performed laborer work under the 

labor agreement and the number of hours they worked. At that time, 

it is clear that the Trust Funds requested full payment of the 

contributions. Stated simply, the record is devoid of any evidence 

that the Trust Funds had an obligation to act before the audit of 

Frontier-West's payroll records, made a knowing false 

representation to Frontier-West or concealed any material facts 

from Frontier-West. In any event, the owners' sons issue did not 

result in liability to Frontier-West; thus, there was no 

detrimental reliance on its part. 

As a final matter, Audit Services has requested attorney's 

fees in responding to this appeal. The attorney's fees provision 

contained in 29 U.S.C. 5 1132(g)(2) applies to attorney's fees on 

appeal. Operating Engineers Pension Trusts v. B & E Backhoe (9th 

Cir. 1990), 911 F.2d 1347, 1356. Since these fees are mandatory, 

21 
Audit Services is entitled to reasonable attorney's fees on appeal. 

Affirmed and remanded for determination of reasonable 

attorney's fees on appeal. 

We concur: A 

Chief Justice 

22 
March 3, 1992 

CERTIFICATE OF SERVICE 

I hereby certify that the following order was sent by United States mail, prepaid, to the 

following named: 

Christopher B. Swartley 

DATSOPOULOS, MacDONALD & LIND 

201 West Main, Suite 201 

Missoula, MT 59802 

Dennis Tighe 

CURE, BORER & DAVIS, P.C. 

P.O. Box 2103 

Great Falls, MT 59403 

ED SMITH 

CLERK OF THE SUPREME COURT 

STATE OF MONTANA