NO. 91-577 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

ROBERT P. BARRETT, 

Plaintiff and Appellant, UEC 2 c '1992 

-vsHOLLAND & HART, a partnership, 

Defendant and Respondent. 

APPEAL FROM: District Court of the First Judicial District, 

In and for the County of Lewis & Clark, 

The Honorable Jeffrey Sherlock, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

P. Keith Keller, Keller, Reynolds, Drake, 

Sternhagen, & Johnson, Helena, Montana 

Gene A. Picotte, Attorney at Law, Helena, Montana 

For Respondent: 

Stuart L. Kellner and Chris D. Tweeten, Hughes, 

Kellner, Sullivan & Alke, Helena, Montana 

Filed: 

Submitted on Briefs: May 14, 1992 

~~~id~d: December 29, 1992 

i 

Clerk 
Justice Fred J. Weber delivered the Opinion of the Court. 

Plaintiff, Robert P. Barrett, (Mr. Barrett) brought this 

action against the law firm of Holland & Hart alleging fraud, 

negligent misrepresentation and deceit by an attorney in violation 

of 3 37-61-406, MCA; violation of Rule 11, M.R,Civ.P.; and legal 

malpractice. The District Court for the First Judicial District, 

Lewis and Clark County, granted Holland & Hart s motion to dismiss, 

or in the alternative, summary judgment. Mr. Barrett appeals. We 

affirm. 

We restate the issues as follows: 

1. Did the District Court properly grant Holland & Hart's 

motion to dismiss, or in the alternative, summary judgment? 

2. Were Mr. Barrettls claims for fraud and deceit barred by 

the statute of limitations? 

In May of 1985, Mr. Barrett filed a wrongful termination 

action against his former employer, ASARCO, Inc. Barrett v. 

ASARCO, Inc. (1988), 234 Mont. 229, 763 P.2d 27. (Barrett I). Mr. 

Barrett's attorney was Gene Picotte. ASARCO retained the law firm 

of Holland & Hart. After the close of discovery, but over one 

month before the trial, ASARCO sought to amend its interrogatory 

answers based on ''new1' information it had obtained. The "new1' 

information is the subject of this action now before us. 

Holland & Hart represented to the District Court that it had 

found six witnesses that would testify about various incidents of 

dishonesty by Mr. Barrett during the last three years of his 

employment with ASARCO. These incidents included sleeping on the 

2 
job, abuse of sick pay, stealing tools and equipment from ASARCO, 

and requesting one of his crew members to steal for him. Mr. 

Barrett filed a motion in lirnine to exclude the testimony of these 

witnesses. ASARCO then offered to allow Mr. Barrett to depose the 

witnesses at its expense. Mr. Barrett chose not to depose the 

witnesses but instead moved again to exclude their testimony. 

The District Court granted Mr. Barrettvs motion in limine and 

the case went to trial on February 2, 1987. The jury returned a 

verdict for Mr. Barrett in the amount of $413,500. Barrett I. 

ASARCO moved the District Court for a new trial contending 

that it was deprived of a fair trial by the court's exclusion of 

the testimony of the new witnesses. The District Court denied the 

motion and ASARCO appealed to this Court. On appeal, ASARCO 

contended that the District Court erred in excluding the testimony 

of the new witnesses. This Court held that the lower court erred 

in excluding the testimony and reversed and remanded the case for 

a new trial. 

Prior to the second trial, Mr. Barrett deposed five of the 

witnesses in question. Subsequently, a second trial was held and 

the jury again found for Mr. Barrett, this time however, awarding 

him $230,000. ASARCO appealed to this Court and this Court 

affirmed the jury's verdict. Barrett v. ASARCO, Inc. (1990), 245 

Mont. 196, 799 P.2d 1078. (Barrett 11). 

Mr. Barrett next filed this action alleging that Holland & 

Hart acted improperly while representing its client, ASARCO, 

before, during and after the first trial and during the appeal of 
the first jury verdict. He alleged claims of fraud; negligent 

misrepresentation; deceit by an attorney in violation of § 37-61- 

406, MCA; conduct in violation of Rule 11, M.R.Civ.P.; and legal 

malpractice. He also asked for punitive damages. 

Holland & Hart moved to dismiss the complaint, or in the 

alternative, for summary judgment. They maintained that on each 

count of the complaint, Mr. Barrett failed to state a claim on 

which relief could be granted, and secondly, even if there was an 

actionable claim, such claim was barred by the statute of 

limitations. 

During the arguments on Holland & Hart's motion, Mr. Barrett 

withdrew his claim of conduct in violation of Rule 11, M.R.Civ.P. 

The District Court found that Mr. Barrett failed to state a claim 

for which relief could be granted on his claims of fraud, negligent 

misrepresentation and legal malpractice. It further found that Mr. 

Barrettls deceit claim was barred by the statute of limitations. 

The District Court granted Holland & Hart's motion to dismiss. Mr. 

Barrett appeals. 

Did the District Court properly grant Holland & Hart's motion 

to dismiss, or in the alternative, summary judgment? 

The District Court considered matters outside the pleadings in 

this case, thereby properly treating ASARCO's motion to dismiss as 

one for summary judgment. 

If, on a motion asserting the defense numbered (6) to 

dismiss for failure of the pleading to state a claim upon 

which relief can be granted, matters outside the pleading 

are presented to and not excluded by the court, the 
motion shall be treated as one for summary judgment and 

disposed of as provided in Rule 56, and all parties shall 

be given reasonable opportunity to present all material 

made pertinent to such motion by Rule 56. 

Rule 12 (b) , M.R.Civ.P. ; Boles v. Simonton (1990) , 242 Mont. 394, 

397, 791 P.2d 755, 757. 

Summary judgment is only proper when there are no genuine 

issues of material fact and the moving party is entitled to 

judgment as a matter of law. Rule 56(c), M.R.Civ.P. Any 

inferences to be drawn from the factual record must be resolved in 

favor of the party opposing summary judgment. Boylan v. Van Dyke 

(1991), 247 Mont. 259, 266, 806 P.2d 1024, 1028. 

Mr. Barrett maintains that summary judgment was improper 

because the complaint states a claim for fraud and negligent 

misrepresentation, and because his deceit claim is not barred by 

the statute of limitations. Mr. Barrett does not raise any issue 

with regard to the dismissal of his legal malpractice claim and we 

will not discuss it here. 

The Fraud Claim 

Mr. Barrett maintains that Holland & Hart defrauded the 

District Court as well as this Court by obtaining a reversal of the 

jury verdict in Barrett I by representing that the six named 

witnesses, whose testimony had been excluded by the District Court 

in Barrett I, would testify to specific acts of misconduct by Mr. 

Barrett. He maintains that in proving fraud on the court he need 

not prove all nine elements of fraud, particularly, that he had no 

duty to investigate the truth of Holland & Hart's representations. 

He further maintains that in their respective depositions, each 

5 
witness denied knowledge of the things Holland & Hart had 

represented they would say. Therefore, Mr. Barrett maintains that 

his jury verdict was reversed in Barrett I solely on the basis of 

false representations by Holland & Hart and he was damaged as a 

consequence. 

Holland & Hart contend that Mr. Barrett failed to make a prima 

facie showing of fraud. 

The nine elements of fraud which must all be proven are: 

a representation; 

its falsity; 

its materiality; 

speaker's knowledge of the falsity or ignorance of 

its truth; 

speaker's intent that the representation be relied upon; 

hearer's ignorance of the falsity; 

hearer's reliance on the representation; 

hearer's right to rely on the representation; and 

hearer's consequent and proximate injury caused by 

the reliance. 

Batten v. Watts Cycle & Marine (l989), 240 Mont. 113, 117, 783 P.2d 

378, 380-381. Mere suspicion of fraud is not sufficient, but 

rather, fraud must be proved by a preponderance of the evidence. 

Batten, 783 P.2d at 381. 

The District Court held that Mr. Barrett failed to demonstrate 

that he was "ignorant of the truth" because he had failed to 

investigate the truth prior to trial. As a result he failed to 
meet the requirements of the fourth element of fraud as above 

described. In fact, he did not depose the witnesses until shortly 

before the second trial. 

We agree with the District Court that Mr. Barrett failed to 

set forth facts demonstrating that he had met this element which 

requires a showing of the speaker's knowledge of the falsity or 

ignorance of its truth. As noted in Barrett I, 763 P.2d at 30, 

ASARCO offered the witnesses for deposition by Mr. Barrett at 

ASARCO's expense and Mr. Barrett refused. Mr. Barrett had the 

means and opportunity to discover the truth or lack of truth of 

Holland and Hart's representations, but refused. When a party 

claims to have been deceived to his prejudice, and it appears that 

he had the means at hand to ascertain the truth of representations 

made to him, his reliance upon such representations, however false 

they may have been, affords no grounds for relief. Spence v. Yocum 

(1982), 201 Mont. 79, 84-85, 651 P.2d 1022, 1025. 

We conclude that because Mr. Barrett chose not to use the 

means available to him to investigate the truth of the 

representations made to him, his claim for fraud must fail. We 

note that Mr. Barrett attempts to argue that because he is 

alleging "fraud on the court," he is not required to set forth 

facts which are sufficient to prove the nine elements of tortious 

fraud. Mr. Barrett cites no authority for that proposition. 

Furthermore, we agree with the District Court when it said: 

It is not inconceivable that the witnesses might possibly 

have changed their testimony since the time of the first 

trial. This certainly does not prove that Defendant 

intentionally acted to deceive the Court. We have no 
idea, thanks in part to Plaintiff's inaction, what these 

witnesses might or might not have testified to back in 

1987. 

We affirm the District Court's grant of summary judgment to ASARCO 

on the fraud claim. 

The Neqlicrent Misrepresentation Claim 

Negligent misrepresentation has a lesser standard of proof 

than fraud. Rather than requiring an intent to misrepresent, it 

requires a showing of a failure to use reasonable care or 

competence in obtaining or communicating the information. Batten, 

783 P.2d at 381. A claim for negligent misrepresentation requires 

proof of the following elements: 

1. 

2. 

3. 

4. 

5. 

6. 

Kitchen 

the defendant made a representation as to a past or 

existinq material fact; 

the representation must have been untrue; 

regardless of its actual belief, the defendant must have 

made the representation without any reasonable ground for 

believing it to be true; 

the representation must have been made with the intent to 

induce the plaintiff to rely on it; 

the plaintiff must have been unaware of the falsity of 

the representation and he must have been justified in 

relying upon the representation; 

the plaintiff, as a result of his reliance, must sustain 

damage. 

Krafters, Inc. v. Eastside Bank of Montana (1990), 242 

Mont. 155, 165, 789 P.2d 567, 573 (emphasis in original). 

8 
The ~istrict Court held: 

First, Plaintiff has not pled, and cannot possibly 

prove that the representations were made by Defendant 

without any reasonable ground for believing that they 

were true. This shortcoming can be laid entirely upon 

plaintiff's shoulders because he did not take advantage 

of ASARCO1s offer to allow him to depose the witnesses at 

ASARCO's expense. As noted earlier, it is not 

inconceivable that during the time since the first trial, 

the witnesses might have, for whatever reason, changed 

their testimony. 

Second, Plaintiff has not pled, and cannot possibly 

prove, that the representation was made with the intent 

that he rely on it. As the Court understands Plaintiff ls 

case, he did not rely on the representations. Indeed, 

the record show that he proceeded in the face of them. 

It does appear that the supreme court relied on the 

Defendant's representations. However, the supreme court 

is not the Plaintiff. The elements above do not make an 

exception for false representations that deceive parties 

other than the plaintiff. 

We agree with the reasoning of the District Court. Under element 

two, Mr. Barrett was required to demonstrate that the 

representations by the defendant were untrue, As pointed out by 

the District Court, the witnesses may have changed their testimony. 

The responsibility to determine if the representations were untrue 

must be charged to Mr. Barrett because he did not take advantage of 

the opportunity to depose the witnesses and determining whether or 

not the representations were untrue. 

Under element four Mr. Barrett was required to prove that the 

representations were made to him with the intent to induce him to 

rely on the representations. As the District Court pointed out, 

the representations were not made with that intent. He was given 

the opportunity to depose the witnesses at ASARCO1s expense but 

chose not to do so. That offer rebuts the contention that the 
representations were made with the intention to induce Mr. Barrett 

to rely upon the same. We conclude that the District Court 

correctly entered summary judgment for ASARCO on the negligent 

misrepresentation claim. 

We hold that the District Court properly granted Holland and 

Hart's summary judgment on the fraud and negligent 

misrepresentation claims. 

Were Mr. Barrett's claims for fraud and deceit barred by the 

statute of limitations? 

Because the fraud claim was disposed of in the first issue, we 

need not address that claim here. The District Court held that Mr. 

Barrett's deceit claim under 5 37-61-406, MCA, was barred by the 

statute of limitations provisions of 5 27-2-211(1)(a), MCA. 

The "deceit" section with which we are concerned is 5 37-61- 

406, MCA, which provides: 

Penalty for deceit. An attorney or counselor who is 

guilty of any deceit or collusion or consents to any 

deceit or collusion with intent to deceive the court or 

a party forfeits to the party injured by his deceit or 

collusion treble damages. He is guilty of a misdemeanor. 

As pointed out by the District Court, the statute does not 

prescribe a statute of limitation time period. 

With regard to statutes of limitation in general, 5 25-1- 

102(1), MCA, provides: 

(1) Civil actions can only be commenced within the 

periods prescribed in Title 27, chapter 2, after the 

cause of action shall have accrued, except where, in 

special cases, a different limitation is prescribed by 

statute. 
As referred to in the foregoing section, the general provision in 

Title 27, chapter 2 regarding this aspect is 5 27-2-102, MCA, which 

in pertinent part provides: 

When action commenced. (1) For the purposes of statutes 

relating to the time within which an action must be 

commenced : 

(a) a claim or cause of action accrues when all 

elements of the claim or cause exist or have occurred, 

the right to maintain an action on the claim or cause is 

complete, and a court or other agency is authorized to 

accept jurisdiction of the action; . . . (2) Unless otherwise provided by statute, the 

period of limitation begins when the claim or cause of 

action accrues. . . . (3) The period of limitation does not begin on any 

claim or cause of action for an injury to person or 

property until the facts constituting the claim have been 

discovered or, in the exercise of due diligence, should 

have discovered by the injured party if: 

(a) the facts constituting the claim are by their 

nature concealed or self-concealing: . . . 

As the District Court noted, both parties agree that the 

misrepresentation upon which the claim is based occurred in January 

1987. Defendant argues that plaintiff's cause of action was 

complete on October 11, 1988, the date of the reversal of the first 

judgment. Plaintiff contends that his cause of action did not 

begin to accrue until after the Supreme Court affirmed the second 

verdict in Barrett 11. 

In its analysis, the District Court pointed out that to 

prevail on an action under 5 37-61-406, MCA, the plaintiff needs to 

prove that an attorney is guilty of deceit and that he was damaged 

by such deceit. The District Court then concluded that the 

plaintiff's cause of action was complete when the defendant's acts 

actually resulted in causing the Supreme Court to reverse the 
verdict causing the plaintiff's damages which took place on October 

11, 1988. The District Court then concluded that pursuant to the 

provisions of 5 27-2-102, MCA, that the clock began ticking on this 

claim on October 11, 1988. We agree with the conclusion of the 

District Court that the cause of action for deceit on the part of 

Mr. Barrett accrued on October 11, 1988, as all of the elements of 

his claim then existed or had occurred, and his right to maintain 

an action on the claim was complete. 

Plaintiff contended before the District Court that the general 

three-year statute applied, that being 5 27-2-204, MCA, which in 

pertinent part provides: 

Tort actions - general and personal property. (1) Except 

as provided in 27-2-216, [not applicable to the facts of 

this case] the period prescribed for the commencement of 

an action upon a liability not founded upon an instrument 

in writing is within 3 years. . . . 

Defendant contended that the proper statute of limitations is 

contained in 27-2-211(1) (a), MCA, which in pertinent part 

provides : 

Actions to enforce penalty or forfeiture or other 

statutory liability. (1) Within 2 years is the period 

prescribed for the commencement of an action upon: 

(a) A statute for a penalty or forfeiture when the 

action is given to an individual . . . except when the 

statute imposing it prescribes a different limitation; . . . 

(c) A liability created by statute other than: 

(i) a penalty or forfeiture; . . . 

The District Court concluded that 5 37-61-406, MCA, clearly is a 

penalty statute. The District Court then concluded that the above 

quoted 5 27-2-211(1) (a), MCA, specifically applied to an action 

upon a statute for a penalty or forfeiture when the action is given 
to an individual. The District Court pointed out that this statute 

contains specific provisions applying to this type of a cause of 

action and therefore concluded that the two-year period of 

limitation applied to the plaintiff's claim, rather than the three 

year general tort statute advocated by the plaintiff. We agree 

with the conclusion on the part of the District Court. We point 

out that from the wording of 5 37-61-406, MCA, an attorney who is 

guilty of any deceit forfeits to the party injured treble damages. 

Clearly that is a forfeiture or penalty provision. As pointed out 

by the District Court, the forfeiture or penalty comes within the 

specific provision of § 27-2-211(a), MCA. In addition, we point 

out that even if this were construed as a liability created by 

statute other than a penalty or forfeiture, it still falls within 

the two-year limitation period as above quoted in 5 27-2-211, MCA. 

We therefore affirm the holding of the District Court that Mr. 

Barrettls claims for deceit were barred by the statute of 

limitations contained in 5 27-2-211, MCA. 

Affirmed. 

A--df! sit ice 
Justices 
Justice Terry N. Trieweiler specially concurring and dissenting. 

I concur with the majority's disposition of appellant's claims 

based on common law fraud and negligent misrepresentation. 

However, my concurrence is not based upon the reasoning found in 

the majority opinion. 

I would conclude as a matter of law that there was no claim 

for fraud and no negligent misrepresentation because there was no 

reliance by appellant on respondent's alleged misrepresentations. 

In this case, respondent's representations were made to the 

District Court and the Supreme Court, and were relied upon by the 

Supreme Court when it reversed appellant's original jury verdict. 

Therefore, it does not appear that the necessary elements of common 

law fraud and negligent misrepresentation exist in this case and I 

would not create a claim for damages based on "fraud upon the 

court. " 

I dissent from that part of the majority opinion which 

concludes that appellant's claim for damages pursuant to 

5 37-61-406, MCA, is barred by the statute of limitations. 

Our reversal of the original verdict for appellant was based 

on the following representations by respondent: 

On December 16, 1986, ASARCO learned the names of 

six witnesses who allegedly had information about various 

incidents of dishonesty by Barrett during his employment 

and within three years of his termination date. These 

incidents allegedly included lying to superiors about 

sleeping on shift and about taking sick leave, stealing 

several hundred dollars worth of tools and equipment from 

ASARCO, and requesting one of his crew members to also 

steal for him. 

Barrettv.Asarco,Inc. (1988), 234 Mont. 229, 232, 763 P.2d 27, 29. 
Based upon the District Court's exclusion of those six 

witnesses, we vacated a verdict which had been returned in favor of 

appellant for $413,500. However, we did not enter judgment for the 

defendant; we remanded this case to the District Court for a new 

trial. 

After this case was remanded, and prior to the second trial, 

appellant deposed five of the six witnesses whose proposed 

testimony was the subject of respondent's first appeal. The sixth 

witness was out of state and unavailable. None of the five 

witnesses testified during their depositions as the respondent had 

indicated they would in its representations to the District Court 

and to this Court. 

This case was not retried until November 13, 1989. During 

that trial only one of the six proposed witnesses testified and his 

testimony did not substantially conform to the representations 

about his testimony which had been made by respondent. That jury 

returned a verdict of $230,000 in favor of appellant. However, the 

judgment was not final until we affirmed it on October 25, 1990. 

The statute of limitations which pertained to this cause of 

action provided for a period of two years within which to file a 

complaint. Section 27-2-211(1) (a), MCA. The period of limitation 

began to run when the claim accrued. However, the claim did not 

accrue until all elements of the claim existed. Section 27-2-102, 

HCA . 

We previously held in Kitchen Krafters v. EastsideBank of Montana (1990) , 

242 Mont. 155, 162, 789 P.2d 567, 571, that: 

16 
[Tlhe statute of limitations does not begin to run until 

a11 elements of a cause of action are in existence. For 

example, in a negligence action the plaintiff must prove 

four elements: 

1) Existence of a duty 

2) Breach of the duty 

3) Causation 

4) Damages. 

Thomock v. State (1987), 229 Mont. 67, [72,] 745 P.2d 324, 

[327]. If these elements are not in existence, the 

plaintiff could not successfully bring a cause of action 

based upon negligence. Therefore, although one may be 

able to establish the existence and breach of a duty, he 

cannot successfully assert his cause of action until he 

has sustained an injury. Heckaman v. Northern Pacific 

Railroad (1933), 93 Mont. 363, [375,] 20 P.2d 258, 12611. 

It is necessary to prove these same elements in a cause of 

action based upon a breach of 37-61-406, MCA (Penalty for 

deceit). However, in this case there was no way that the element 

of damages could be proven or even appreciated until the final 

resolution of this case after it was remanded to the District 

Court. Is there any doubt that if the second jury had found for 

ASARCO on the issue of liability, or if the amount of the second 

verdict had exceeded the amount of the first, that this same 

respondent would be moving for summary judgment on the grounds that 

no damages had been sustained? 

Appellant has alleged that respondent misrepresented to the 

District Court and to this Court the substance of the testimony 

that would be offered from the six witnesses whose testimony was 

excluded. There has been a good deal of speculation by the 

District Court and by this Court about whether respondent did in 

fact misrepresent what it was told by the witnesses. However, this 
case comes before this Court based on a summary judgment, and 

speculation about the merits of appellant's claim has no place in 

our decision. Whether there was in fact a misrepresentation by 

respondent is a question of fact. Drawing all reasonable 

inferences from the record, there is certainly sufficient evidence 

to submit that issue to a jury or fact finder. 

The important fact, for purposes of this appeal, is that until 

the final judgment entered pursuant to the second trial, there was 

no basis upon which appellant could determine (1) his damages, or 

(2) whether or not he had in fact incurred damages. That final 

judgment date was October 25, 1990. Therefore, that is the date on 

which this action accrued. 

Appellant's complaint was filed on March 1, 1991--well within 

the two year period provided for an action of this type. 

For these reasons, I would reverse the judgment of the 

District Court and remand this case for a trial on the merits of 

appellant's claim that respondent violated 37-61-406, MCA, and as 

a result damaged appellant. 

Justice William E. Hunt, Sr., concurs in the foregoing 

concurrence and dissent of Justice Trieweiler. 
December 29, 1992 

CERTIFICATE OF SERVICE 

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

following named: 

P. Keith Keller 

Keller, Reynolds, Drake, Sternhagen 6( Johnson 

38 So. Last Chance Gulch 

Helena, MT 59601 

Gene A. Picotte 

Attorney at Law 

1066 Helena Ave. 

Helena, MT 59601 

Stuart L. Kellner and Chris D. Tweeten 

Hughes, Kellner, Sullivan & Alke 

P.O. Box 1166 

Helena, MT 59624-1166 

ED SMITH 

CLERK OF THE SUPREME COURT 

STATE OF MONTANA