IN THE SUPREME COURT OF THE STATE OF MONTANA 

DONALD J. TIGART, 

Plaintiff and Respondent, 

-vsRICHARD J. THOMPSON, 

Defendant and Appellant. 

and 

DOUGLAS C. BROOKINGS, 

Plaintiff and Respondent, 

-vsDICK THOMPSON, 

Defendant and Appellant, 

CLtn!: OF SLI:',:EE;C COURT 

RICHARD J. THOMPSON, L i A-\S'E tli" P,rcr~ r ikl"JA 

Third-Party Plaintiff and Appellant, 

-vsDONALD J. TIGART, 

Third-Party Defendant and Respondent. 

APPEAL FROM: District Court of the Ninth Judicial District, 

In and for the County of Pondera, 

The Honorable R.D. McPhillips, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Lon T. Holden, Jardine, Stephenson, Blewett & 

Weaver, , Great Falls, Montana 

For Respondent: 

Philip J. OIConnell, Thueson Law Office, Helena, 

Montana 

~atricia OtBrien Cotter, Cotter & Cotter, Great 

Falls, Montana 

Filed: 

submitted: July 13, 1990 

Decided: August 20, 1990 
Justice John C. Sheehy delivered the Opinion of the Court. 

Richard J. Thompson appeals from the judgment of the District 

Court, Ninth Judicial District, Pondera County, awarding 

respondents attorney fees and costs. We affirm the District Court. 

The sole issue is the award of attorney fees and costs under 

the authority of 5 37-61-421, MCA. 

The issue of attorney fees and costs was before this Court 

originally in Tigart v. Thompson (1989), 237 Mont. 468, 774 P.2d 

401. That portion of the appeal was dismissed without prejudice 

for being premature, as the award was not yet in the form of a 

final order. Rule 1, M.R.App.P. We set out here only those facts 

necessary for the review of this issue. 

Suit was initiated by respondents Donald Tigart and Douglas 

Brookings as the result of a truck accident in Conrad, Montana, on 

January 4, 1985. Respondents alleged that Richard Thompson 

negligently entered a highway when the conditions were icy, causing 

the pickup driver Tigart to slide into a ditch to avoid a 

collision. Thompson was unaware of any accident until contacted 

by investigating officers. Thompson maintained throughout 

discovery and pretrial proceedings that he knew nothing of the 

accident, had no knowledge of any actions or circumstances of the 

day in question and had no independent recollection of being in the 

vicinity of the accident that day. Thompson further denied giving 

statements to anyone other than the investigating officer. Counsel 

for Thompson stated that her client would not refute any of 

Tigartls contention of what transpired on the day of the accident. 

2 
However, at trial, counsel for Thompson took issue in opening 

statement with Tigart's contentions as to where and with what care 

Thompson entered the highway, the road conditions that day, and 

asserted as a defense that Tigart was driving too fast for 

conditions. 

It came to light after the first week of trial that Thompson 

had in fact given a statement to his insurance carrier, Safeco 

Insurance Company, eleven days after the accident. The statement 

was revealed when counsel for Tigart subpoenaed the insurance 

adjuster and his records. Defense counsel notified the court and 

counsel of the statement's existence just prior to the adjuster's 

testimony. 

The statement contained several inconsistencies when compared 

to the contentions made in defendant's opening statement. As a 

result, plaintiffs moved for a new trial based on surprise and for 

personal sanctions against defense counsel for concealment of 

evidence. No sanction was imposed; however, when a verdict for the 

defense was returned by the jury, the lower court granted 

plaintiffs' motion for a new trial. In addition, the court awarded 

plaintiffs attorney fees and costs associated with the first trial. 

The lower court's award of attorney fees and costs, pursuant to 3 

37-61-421, MCA, in the amount of $31,275.97 is the subject of this 

appeal. 

In its order of April 24, 1988, the District Court stated: 

It is hereby ordered that the motion to award monetary 

sanctions against Safeco Insurance Company in favor of 

Douglas Brookings and Donald Tigart is denied. It is 
ordered, however, that Safeco Insurance Company is 

ordered to pay the plaintiffs1 reasonable attorney fees 

and costs incurred during the first trial, including 

attorney fees and costs incurred between the close of 

discovery and the commencement of trial (which would be 

spent primarily in trial preparation), and attorney fees 

and costs incurred in obtaining a new trial. 

The court based its award on 5 37-61-421, MCA, which states: 

An attorney or party to any court proceeding who, in the 

determination of the court, multiplies the proceedings 

in any case unreasonably and vexatiously may be required 

by the court to satisfy personally the excess costs, 

expenses, and attorney fees reasonably incurred because 

of such conduct. 

The District Court went on to state that: 

Here, the failure of Safeco Insurance Company to produce 

the tape-recorded statement of Thompson, despite multiple 

requests by the plaintiffs to do so, prevented the 

plaintiffs from having a fair trial, required the posttrial motions, and necessitated this second trial. The 

court is convinced had the tape been produced prior to 

trial, plaintiff may well have altered the presentation 

of his case with perhaps substantial expectation of 

different results. Safeco1s conduct was I1unreasonable" 

and therefore, under the statute, it should pay these 

expenses. 

Appellant contends that such an award, under § 37-61-421, MCA, 

is improper for a number of reasons: (1) No sanctions were 

imposed by the ~istrict Court; (2) Safeco is not a I1party" under 

the meaning of 5 37-61-421, MCA; and, (3) an award of attorney fees 

is improper where plaintiff is represented on a contingency fee 

basis. 

Appellant asserts that, as the court specifically determined 

no sanctions to be in order, 5 37-61-421 is misapplied in this 

instance. Appellant states that, as the statute requires an 

attorney or party to have "unreasonably and vexatiouslyu multiplied 
the proceedings, the court's order is inconsistent. The District 

Court, states Thompson, neither found that Safeco intentionally 

withheld the statement nor that it failed to produce it in the 

proper manner once it was discovered. Therefore, Safecols 

inadvertance cannot be considered to have met the standard of being 

"vexatious. 

We disagree with appellant's contention. The District Court, 

in its order of April 29, 1988, stated that "the defendant has 

prevented the plaintiffs from receiving a fair trial and created 

unfair surprise at trial by withholdins a major item of evidence 

. . .I1 The District Court further stated that I1Safeco Insurance 

Company's tactic of concealins the Thompson statement1' violated the 

principle of pretrial discovery. The District Court's order does 

not speak of "inad~ertence'~ as appellant maintains, but of tactical 

conduct at odds with the letter and spirit of pretrial discovery. 

Such withholding is certainly both unreasonable and vexatious. It 

was within the District Court's discretion to award costs and 

attorney fees under 3 37-61-421, MCA. We find no abuse of that 

discretion here. 

Appellant next contends that Safeco is not a "party1' as 

envisioned by 9 37-61-421, and cannot be held responsible for the 

attorney fees and costs. Again, we must disagree with appellant's 

contention. 

In Jessen v. OIDaniel (D. Mont. 1962), 210 F.Supp. 317, 331, 

Judge William Jameson held that insurance contracts "have the 

effect of placing absolute and exclusive control over the 
litigation in the insurance carrier." This Court followed that 

reasoning in Safeco Insurance Co. v. Ellinghouse (1986), 223 Mont. 

239, 725 P.2d 217, holding that the insurance carrier has "the 

correlative duty to exercise diligence, intelligence, good faith, 

honest and conscientious fidelity to the common interest of the 

parties.'' If an insurer may be held liable for the actions of its 

attorney, as was the case in Ellinshouse, under a theory of agency, 

it is axiomatic that the insurer may be responsible for costs, 

expenses and attorney fees when the insurer llmultiplies the 

proceedings in any case unreasonably and vexati~usly.~~ Safeco was 

in possession of Thompson's statement from two weeks following the 

accident until the trial, and it was easily discoverable by Safeco. 

Appellant next contends that an award of attorney fees was 

inappropriate in this instance. Appellant states that an award of 

attorney fees under 5 37-61-421, MCA, is required to satisfy 

"attorney fees reasonably incurred." As counsel for both of the 

respondents were working on a contingency fee basis, and the trial 

resulted in a defense verdict, appellant maintains that no attorney 

fees resulted. 

We disagree with appellant's reasoning. The District Court 

held that the respondents were denied a fair trial due to 

appellant's conduct. The attorney fees and costs were 

unnecessarily multiplied by that conduct, a situation expressly 

addressed in the statute. The liability of Safeco for attorney 

fees arises not from the fee contract between the other parties and 

their attorneys, but from a liability imposed by statute. It is 
the multiplication of proceedings unnecessarily that 5 37-61-421, 

MCA, was meant to curb. We affirm the District Court. 

.- .-, .. ' L -& Lb > j'LbY2AT 

Justice u 

We Concur: (+. 

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Justices H)