No. 85-494 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1986 

LEWIS E. BRUEGGEMANN, 

Plaintiff and Appellant, 

CITY OF BILLINGS, 

Defendant and Respondent. 

YELLOWSTONE COUNTY BAR ASSOCIATION, 

NEIL S. KEEFER, individually, and as 

President of the Yellowstone County 

Bar Association, 

Plaintiffs and Appellants, 

-vsCITY OF BILLINGS, 

Defendant and Respondent. 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone, 

The Honorable Leonard Langen, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Gerald J. Neely argued for Brueggemann, Billings, 

Montana 

Moses Law Firm; Charles F. Moses argued for Keefer, 

Billings, Montana 

Lewis E. Brueggemann argued pro se, Billings, Montana 

For Respondent: 

K.D. Peterson; Peterson, Schofield & Leckie, Billings, 

Montana 

Filed: 

Submitted: April 24, 1986 

Decided: June 4, 1986 
Mr. Justice Fred J. Weber delivered the Opinion of the Court. 

In 1982, pursuant to its self-government powers, the 

City of Billings (Billings) passed ordinance 82-4474 (4474), 

which imposed an annual tax on all persons and entities doing 

business within Billings. Mr. Brueggemann and the 

Yellowstone County Bar Association (Bar) challenged the 

constitutionality of the ordinance. After cross motions for 

summary judgment, the Yellowstone County District Court 

granted Billings' motion, but, in doing so, first severed 

offending sections then affirmed the ordinance. Mr. 

Brueggemann and the Bar appeal. We reverse. 

We restate the issues: 

1. Did the District Court err in finding ordinance 4474 

a valid and constitutionally permissible tax? 

2. Did the District Court err in awarding Messrs. 

Brueggemann and Neely attorney fees? 

Ordinance 4474 evolved from two previous ordinances. In 

June 1982, Billings enacted ordinance 82-4445 (4445), which 

required all businesses to be licensed in order to carry on 

business. The cost of the license was based on a business' 

gross revenue. In July 1982, Mr. Brueggemann brought an 

action to test the validity of ordinance 4445. In August 

1982, the Bar brought an action to test the validity of the 

same ordinance. Later, the cases were consolidated. In 

September 1982, ordinance 4445 was amended by ordinance 

82-4463 (4463). In November 1982, ordinance 4463 was repealed and 4474 was adopted. 

In October 1983, the Court decreed ordinance 4445 unconstitutional insofar as it attempted to license attorneys. At 

the same time, the District Court temporarily restrained 
enforcement of ordinances 4463 and 4474 pending the outcome 

of Harlen v. City of Helena (Mont. 1984), 676 P.2d 191, 41 

Following Harlen, which held a Helena business license 

tax unconstitutional because it infringed on this Court's 

constitutional authority to supervise and regulate attorneys 

and the practice of law, all parties moved. for summary judgment. The District Court held ordinance 4474 constitutional, 

but, in doing so, severed provisions of the ordinance contrary to Harlen. As severed, ordinance 4474 subjects every 

lawyer or law firm carrying on the practice of law to an 

annual tax. The basic annual tax is calculated on a business' gross revenue. 

Did the District Court err in finding ordinance 4474 a 

valid and constitutionally permissible tax? 

At the outset, we note that attorneys are the only 

businesspeople properly before the Court, although similar 

arguments may be made by other businesspeople. Mr. 

Brueggemann originally filed suit "on his own behalf and on 

behalf of all other persons similarly situated, that is, all 

other attorneys at law practicing within the exterior boundaries of the City of Billings." The Bar is an incorporated 

association composed of attorneys practicing law within the 

City of Billings. 

Plaintiffs contend that the tax constitutes a sales tax, 

which is beyond the scope of self-government power and violates § 7-1-112, MCA, that states in pertinent part: 

7-1-112. Powers requiring delegation. A local 

government with self-government powers is prohibited the exercise of the following powers unless the 

power is specifically delegated by law: 
(1) the power to authorize a tax on income or the 

sale of goods or services, except that this section 

shall not be construed to limit the authority of a 

local government to levy any other tax or establish 

the rate of any other tax . . . In Montana Innkeepers Ass'n v. City of Billings (Mont. 

1983), 671 P.2d 21, 23, 40 St.Rep. 1753, 1756, the Court held 

that a tax on the sale of temporary lodging by a hotel or 

motel is a sales tax prohibited by 5 7--121 , MCA, 

stating: 

Hotels and motels sell a product or service which 

is temporary lodging. The occupant is the consumer 

since he purchases the service. No title changes 

hands, but the consumer comes into temporary possession of the room. A tax placed on that transaction is a sales tax. 

As severed, ordinance 4474 imposes a tax on the gross revenues generated from attorney-client relationships. The 

ordinance is not related to any regulatory control measure 

for the health or welfare of the City of Billings. We conclude ordinance 4474 is a tax on the sale of attorneys' 

services. We hold ordinance 4474 is prohibited by 

5 7-1-112 (I), MCA. 

I1 

Did the District Court err in awarding Messrs. 

Brueggemann and Neely attorney fees? 

The District Court concluded that Messrs. Brueggemann 

and Neely were entitled to reasonable attorney fees, arising 

out of the suit to have city ordinance 4445 declared unconstitutional. The District Court denied attorney fees for the 

suit relating to ordinance 4474. 

Messrs. Brueggemann and Neely contend they are entitled 

to attorney fees for both suits. They maintain attorney fees 

could be awarded under 55 25-10-101, 25-10-201, 25-10-711, 
MCA; or under the equity power of the District Court; or 

because they served the role of a private attorney general. 

Section 25-10-101, MCA, allows a plaintiff to recover 

costs in certain types of cases, one of which is an action 

involving the legality of any tax. Section 25-10-201, MCA, 

lists which costs may be reimbursed. "Attorney fees are not 

included in the list of recoverable costs." Masonovich v. 

School Dist. No. 1 (1978), 178 Mont. 138, 140, 582 P.2d 1234, 

1235. 

Section 25-10-711, MCA, allows reasonable attorney fees 

against a governmental entity when suit or defense is frivolous or pursued in bad faith. We find the defense of the 

ordinance was neither frivolous nor pursued in bad faith. 

Individual attorneys cite State ex rel. Wilson v. Dept. 

Of Natural Resources (Mont. 1982), 648 P.2d 766, 39 St.Rep. 

1294, for the proposition that a District Court can award 

attorney fees under its general equity powers. While a 

District Court may award attorney fees under its equity 

powers, such an award of attorney fees must be documented in 

the record. We will not uphold an award of attorney fees on 

appeal on the theory that the award stems from the equity 

powers of the District Court where the record provides no 

language that indicates the award is based on equitable 

principles. Here, the record does not support an award of 

attorney fees. 

Finally, Messrs. Brueggemann and Neely maintain they 

served the role of a private attorney general, which benefited a common number of persons. Because the only individuals 

properly before this Court are attorneys and a large number 

of attorneys were represented by the Bar, we find this con- 
tention without merit. We hold the District Court erred in 

awarding attorney fees. 

We reverse the award of attorney fees by the District 

Court and hold that ordinance 4474 is invalid as to attorneys 

under § 7-1-112 (I), MCA. 

We Concur: /