No. 81-48 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

DAN RING, BOB WOLTER, TIM WILLIAMS, 

LOUIS MERTZIG, DALE OLSEN, BOB MARTIN, 

ROBERT GOODY, JERRY THOMPSON, FRED BAUM, 

et al., 

Plaintiffs and Respondents, 

JAMES HOSELTON, d/b/a HOSELTON FRAMING; 

M.D. O'CONNELL and DONALD BENNETT, d/b/a 

BENNETT BUILDERS, FIRST SECURITY BANK, 

AETNA INC., 

Defendants and Appellants. 

Appeal from: District Court of the Third Judicial District, 

In and for the County of Deer Lodge 

Honorable Robert Boyd, Judge presiding. 

Counsel of Record: 

For Appellants: 

Poore, Roth, Robischon & Robinson, Butte, Montana 

Douglas Buxbaum argued and and Urban Roth argued, 

Butte, Montana 

Henningsen, Purcell & Genzberger, Butte, Montana 

James Purcell argued, Butte, Montana 

For Respondents: 

Knight, Dahood, McLean & Everett, Anaconda, Montana 

David McLean argued, Anaconda, Montana 

Johnson, Skakles and Kebe, Anaconda, Montana 

Greg Skakles argued, Anaconda, Montana 

Submitted: December 7, 1981 

Decided: April 15, 1982 

Filed: APR 1 5 1982 
Mr. Justice Fred J. Weber delivered the Opinion of the 

Court. 

Plaintiff carpenters claimed penalties for late payment 

of wages due under a working agreement with James Hoselton, 

d/b/a Hoselton Framing (Hoselton), subcontractor, and W. D. 

OIConnell, and Donald Bennett, d/b/a Bennett Builders 

(Bennett), the prime contractor. Bennett cross-claimed 

against Aetna Casualty & Surety Co. (Aetna) for failure to 

pay Bennett as required by a labor and materials bond issued 

to Hoselton as subcontractor, requesting punitive damages 

and attorney's fees because of Aetna's alleged bad faith. 

The District Court of Deer Lodge County awarded $4,176.48 to 

plaintiff carpenters, and $35,534.12 damages plus $100,000.00 

in punitive damages to Bennett, plus attorney's fees, which 

were not initially determined. There were extensive postjudgment motions to amend findings and judgment, for new 

trial, and for relief from findings, conclusions and judgment. 

Appeal follows denials of all of these motions. We affirm 

in part and reverse in part. 

The key findings of fact and conclusions of law of the 

District Court are described in this paragraph. Plaintiff 

carpenters were members of Carpenters Union Local 88 which 

had a working agreement with Bennett, and Hoselton signed a 

compliance agreement with Local 88. Hoselton hired plaintiffs 

as carpenters. Hoselton posted a payment and performance 

bond with Bennett as Obligee and Aetna as Surety. Hoselton 

discharged plaintiffs but their severance checks were not 

postmarked for seven days after discharge, entitling plaintiffs 

to eight hours pay for each 24 hours which had expired 
before payment was made, resulting in the Hoselton obligation 

to pay plaintiffs a total of $4,176.48. Hoselton walked off 

the project on February 11, 1979. Aetna did not pay the 

$4,176.48 under the bond. Written notice of default was 

sent to Aetna indicating Bennett was exercising his option 

under the bond to complete the Hoselton framing subcontract 

in his role as general contractor, and no response was ever 

received from Aetna. Bennett completed the framing; 

the balance owing to Bennett for completing the subcontract 

was $35,534.12, and Aetna declined payment. Aetna's refusal 

to make payment was found to show bad faith. Because of the 

bad faith failure of Aetna to honor its obligation, Bennett 

had to pay the money necessary to complete the Hoselton 

subcontract, resulting in a heavy burden on Bennett, which 

caused him to lose his business and his home for which 

Aetna should respond in punitive damages. Reasonable attorney's 

fees were due to Bennett because of the failure of Aetna to 

honor its bond. As a result of these findings, the District 

Court concluded that the reasonable cost of completion of 

the Hoselton subcontract was $35,534.12 and Aetna was liable 

to Bennett in that amount together with attorney's fees and 

costs; the refusal of Aetna to honor its obligations was 

wrongful, malicious, arbitrary and in bad faith; Bennett 

suffered severe financial losses as a result of the bad 

faith of Aetna, for which Aetna was liable in punitive 

damages in the amount of $100,000.00; and Aetna was liable 

to Bennett for attorney's fees as they shall become fixed 

after a hearing. Judgment was entered in accordance with 

the findings and conclusions. 

Following is a calendar of the significant events 
starting with the entry of judgment. 

November - 6, - 1980. Judgment as previously described 

entered. 

November -- 17, 1980. Aetna filed motion for new trial, 

to amend judgment, and for relief from the findings, conclusions and judgment under Rules 52, 59 and 60 of the Montana 

Rules of Civil Procedure. The Aetna affidavits in support 

of the motions are extensive. In substance they show that 

the counsel representing Aetna up to the judgment on November 

6, 1980, had severe depression and emotional problems which 

had extended over a period of years and were unknown to his 

associates and friends. Subsequent to the November 6, 1980, 

judgment, counsel was admitted to the stress center in the 

hospital at Butte. The affidavits show that in the present 

case, counsel was unable to communicate his problems to his 

associates, and failed to properly communicate with Aetna. 

The affidavits set forth facts which are claimed to be 

sufficient to constitute adequate defenses to the claims in 

issue; and otherwise set forth facts indicating that counsel 

had failed to properly represent Aetna in a competent manner, 

resulting in the entry of the judgment against Aetna. To 

compound the confusion, the successor counsel for Aetna 

overlooked noticing the consolidated motions as required 

under Rules 59 and 60. 

December - 8, 1980. Motion by plaintiffs and Bennett 

requesting hearing to determine reasonable attorney's fees 

provided for in judgment. Notice of hearing set for December 

December -- 12, 1980. Additional Rule 60 motion by Aetna 

requesting that Aetna be relieved from its omission to 
notice the consolidated motions filed on November 17, with 

the motion based on mistake, inadvertence and excusable 

neglect. Motion noticed for December 17, 1980. 

December -- 17, 1980. Hearing on motions noticed for this 

date. 

December 22, -- 1980. Order awarding plaintiffs1 attorneys 

$2,055.00 and Bennett's attorneys $7,500.00 as attorneys' 

fees. Order denying post-trial motions, finding that no 

notice of hearing was filed on the November 17 motions under 

Rules 59 and 60, and no hearing held within the time limits; 

failure to comply with Rules 59 and 60 caused the December 

17 motions to be "deemed denied" and thereby denied the 

District Court any jurisdiction to deal with the motions; 

finding that the December 12 motion pursuant to Rule 60 was 

a "bootstrap" motion asking the court to allow a hearing on 

the original motion, and was not appropriate; and with a 

determination that all of the post-trial motions of Aetna 

were denied. 

December -- 24, 1980. Renewal of Rule 59 and 60 motions 

by Aetna. Motion noticed for hearing on December 31, 1980. 

December -- 26, 1980. Conditional notice of appeal, in 

which Aetna contended that the judgment of November 6, 1980, 

did not become final until the District Court awarded 

attorney's fees, and in which the appeal was conditioned 

upon the event that the Supreme Court of Montana might 

determine November 6, 1980, was the date of final judgment. 

December - 31, 1980. Order of District Court denying all 

motions, including post-trial motions. 

January - 9, - 1981. Notice of appeal by Aetna appealing 

from the final judgment and order of court awarding attorney's 

fees and from court's orders denying post-trial motions 
under Rules 52, 59 and 60 and also from the judgment dated 

November 6, 1980. 

11. 

The following issues are determinative: 

(1) Was the November 6, 1980, judgment final prior to 

the December 22, 1980, order determining attorney's fees? 

(2) Should Aetna's post-judgment motions have been 

considered on their merits? 

(3) Was the Bennett deposition admissible without a 

showing of unavailability for trial? 

(4) Did the Aetna bond encompass the penalties awarded 

to the plaintiffs? 

As stated in the first issue, judgment was entered by 

the District Court on November 6, but the attorney's fee 

portion of the judgment was not completed until the entry of 

order on December 22. Our decision on this issue controls 

the further decision on the post-judgment motions. In this 

case, the claim of attorney's fees on the part of plaintiffs 

and Bennett is not based upon a statutory provision awarding 

attorney's fees, such as in the mechanics lien provisions of 

our codes. Here, the Aetna bond in substance provides that 

Bennett shall not be liable for the payment of any costs or 

expenses of any suit for work or labor performed. It is 

under that contract provision that the parties seek a 

recovery of their reasonable attorney's fees. Our question 

then becomes whether a judgment is final involving attorney's 

fees based on an agreement which is the subject matter of 

the action until the actual determination of the attorney's 

fees. We find the reasoning persuasive in Aetna Casualty 

& Surety Company v. Giesow (2d Cir. 1969), 412 F.2d 468, 470, 

in which the Circuit Court stated: 
"Since the plaintiff would not be entitled 

to counsel fees if there was no breach of 

the subordination agreement, we believe that 

the issues of damages and counsel fees are 

so inexorably interconnected as to make this 

a single claim (cites omitted). In Rieser 

v. Baltimore and Ohio Railroad Co., 224 

F.2d 198, 199 (2d Cir. 1955), cert. denied, 

350 U.S. 1006, 76 S.Ct. 651, 100 L.Ed. 868 

(1956), we said that the test of multiple 

claims was 'whether the underlying factual 

bases for recovery state a number of different claims which could have been separately 

enforced.' Under this test it seems quite 

clear that the claim for counsel fees cannot be enforced apart from the claim for 

breach of the subordination agreement, and 

to this extent we have only a single claim 

here. Cf. Schwartz v. Eaton, 264 F.2d 195 

(2d Cir. 1959). There is also some question as to whether the judgment here can 

properly be said to be 'final,' since 

reasonable counsel fees are a contractually 

specified element of damages and plainly the 

amount of those fees has not yet been determined. See United States v. Burnett, 262 

F.2d 55 (9th Cir. 1958). Since we lack 

jurisdiction, we must dismiss this appeal." 

In Union Tank Car Company v. Isbrandtsen (2d Cir. 1969), 

416 F.2d 96, the Circuit Court followed the Giesow decision. 

The court was construing a note which among other provisions 

provided for the payment of reasonable attorney's fees, 

costs and expenses. Again, the trial court had entered 

judgment and awarded costs and attorney's fees to be fixed 

by further order of the court. In holding that the appeal 

was premature, the court stated: 

"Where attorneys' fees are a mere incident 

of the litigation itself, particularly when 

measured in part by the creation of a fund 

in that litigation, they may often await the 

outcome of the litigation on trial and appeal. 

Sprague v. Ticonic National Bank, 307 U.S. 

161. -. 59 S.Ct. 777, 83 L.Ed. 1184 (1938). 

Where --- they are dependent -- on a contract under 

construction -- by the court -- in the litigation, 

-- as here, the contract may -- more usefully be 

completely construed -- on one trialandappeal. - . . ." (Underscorinq added.) Union Tank Car 

Company 'v. ~sbrandtsen, 416 F. 2d at 97. 
The need for elimination of separate appeals is stressed 

by the same court in Cinerama, Inc. v. Sweet Music, S.A. 

(2d Cir. 1973), 482 F.2d 66, 70, where the court stated: 

"The final judgment rule is designed not 

merely to prevent an appeal on an issue concerning which the trial court has not yet 

made up its mind beyond possibility of 

change but also to eliminate the need for 

separate appellate consideration of different elements of a single claim. The burgeoning loads of the courts of appeals mandate 

strict adherence to this salutary policy." 

(Court's emphasis.) 

While this Court has not yet ruled on the precise 

issue, it has emphasized that a case should not be appealed 

until it is totally ready for review, stating in Roy v. 

Neibauer (1980) , Mont. , 610 P.2d 1185, 1187, 37 

St.Rep. 897, 899: 

"If the case is not ready for review, it should 

not be appealed . . . This Court does not have 

the time and the resources to be compelled to 

independently search the record to determine 

if all essential issues have first been decided at the District Court level." 

In a similar manner, this Court has consistently held that 

where all of the issues and claims have not been finally 

adjudicated, it will refuse to hear appeals. See Knight & 

Co. v. Fort Belknap Indian Agency (1980), Mont. I 

612 P.2d 1290, 37 St.Rep. 1049; Weston v. Kuntz (1980)~ 

Mont. , 610 P.2d 172, 37 St.Rep. 855. 

In the present case, the claims for attorney's fees on 

the part of both plaintiffs and Bennett are based on the 

Aetna bond. In turn, there is a dispute as to whether the 

Aetna bond requires payment to any or all of the parties 

under the facts of the case. We conclude that the Aetna 

bond under its terms does allow the award of attorney's fees 

to both the plaintiffs and Bennett. Under that circumstance, 

we find that the judgment was not final on November 6, and 
did not become final until the entry of judgment on December 

22, determining the amount of fees. 

The District Court entered its findings on November 6, 

1980. Aetna moved under Rule 52(b) for the amendment of 

such findings. In considering the Rule 52(b) motion, the 

District Court pointed out that it was placed in a difficult 

position because it was not able to consider matters outside 

of the record made in support of the Rule 59 and Rule 60 

motions because a Rule 52 motion has to be based on the 

record as it existed at the time the findings were made. 

The District Court concluded that it must deny the Rule 52 

motion. We affirm that ruling. 

On November 17, Aetna also filed its motion for a new 

trial under Rule 59. Aetna failed to serve its motion for 

new trial within the ten day period provided under Rule 

59(b) as follows: 

"Time for motion. A motion for a new trial 

shall be served not later than 10 days after 

service of notice of the entry of the judgment. I' 

Our holding that the judgment did not become final until the 

entry of judgment on December 22 is not controlling as to 

this motion. A Rule 59 motion may be made either before or 

after entry of judgment, subject to the time period of ten 

days as specified in Rule 59(b). The rule is clearly stated 

in 6A MOORE'S FEDERAL PRACTICE 71 59.09[1], at 59-196 (2d 

ed. 1979) as follows: 

"Under the early English common law 'the motion 

for a new trial preceded the entry of judgment, 

which was not entered upon the verdict as a 

matter of course, nor at all until after the 

first four days of the next term after trial.' 

Rule 59(b) requires that a motion for new trial 

be served 'not later than 10 days after the 

entry of the judgment.' This wording was designed to be broad enough to permit the motion 
to be made both before - and after -- the entry of - -- - -- the judgment." (Underscoring added.) 

Because the motion for new trial was not served within the 

ten day period required by Rule 59(b), the motion was therefore 

deemed denied under the provisions of the last paragraph of 

Rule 59 (d) : 

"If the motion is not noticed up for hearing and no hearing is held thereon, it shall 

be deemed denied as of the expiration of the 

period of time within which hearing is required to be held under this Rule 59." 

The District Court properly concluded that the motion for 

new trial was deemed denied and that the court could not 

consider the matter further. This follows the holdings of 

this Court to the effect that the time and procedural 

limitations for motions under Rule 59, M.R.Civ.P. are mandatory. 

See Armstrong v. High Crest Oil, Inc. (1974), 164 Mont. 187, 

520 P.2d 1081, and cases therein cited. We therefore affirm 

the holding of the District Court in its denial of the Rule 

59 motion for new trial. 

Aetna also moved under Rule 60(b) for relief from the 

final judgment entered against Aetna. The pertinent parts 

of Rule 60(b) are: 

"On motion and upon such terms as are just, 

the court may relieve a party or his legal 

representative from a final judgment, order, 

or proceeding for the following reasons: (1) 

mistake, inadvertence, surprise, or excusable 

neglect; . . . or (6) any other reason justifying relief from the operation of the judgment. " 

Rule 60(c) provides that a motion under Rule 60(b) shall be 

heard and determined within the times provided by Rule 59 in 

the case of motions for new trial. The District Court 

concluded that the failure to notice up the Rule 60 motion 

caused that motion to be deemed denied in the same manner as 

the failure to notice up the Rule 59 motion. The District 
Court therefore concluded that it no longer had any jurisdiction 

to deal with the motion. That decision was based upon the 

District Court's conclusion that its November 6 judgment was 

final. Because of our holding that the judgment of the 

District Court did not become final until the determination 

of the attorney's fees on December 22, 1980, that conclusion 

no longer is valid. 

Because the November 17 motion under Rule 60 was made 

before the judgment became final, the motion was premature 

and may be disregarded. As pointed out by Professor Moore, 

Rule 60(b) allows relief under circumstances where Rule 59 

relief is not allowed because it is not timely. 7 MOORE'S 

FEDERAL PRACTICE 11 60.18[8], at 216.1 (2d ed. 1979), states: 

"When operating within the intendment of the 

amended Rule, which carefully balances the 

competing principles of finality and relief 

from unjust judgments, the courts should and 

do give a liberal construction to 60(b). 

Nomenclature is unimportant . . . a motion 

that is made under Rule 59, which is not 

timely and hence may not properly be considered under that Rule, may, nevertheless, be 

considered as a motion under Rule 60 when 

it states grounds for relief under this 

latter rule." 

On December 24, Aetna by its renewal motion again moved 

under the provisions of Rule 60 for relief from the court's 

findings of fact, conclusions of law and judgment. Believing 

it no longer had jurisdiction, the District Court denied the 

motion on December 31. We have concluded that the order 

denying such Rule 60 motion should be set aside in order 

that the District Court may determine the validity of the 

motion under Rule 60 after an appropriate hearing. 

With regard to Rule 60(b) motions, Professor Moore has 

emphasized the liberal construction of the courts. 7 MOORE'S 

FEDERAL PRACTICE 11 60.22[2], at 247 (2d ed. 1979), states: 
"By now, however, there is a considerable 

body of federal decisions dealing with 'mistake, 

inadvertence, surprise, or excusable neglect'; 

and, speaking generally, these decisions have 

been in marked harmony with the proposition 

that 60(b) is a remedial rule to be liberally 

construed. 

"On timely application, a party has been relieved 

from: an order taken against him as the result 

of an unauthorized stipulation by his attorney; 

a judgment of dismissal where the failure to 

file a bill of particulars was due to the oversight or inadvertence of the clerk of plaintiff's 

attorney; financial difficulty in procurement 

of counsel; and from a judgment of dismissal 

for want of prosecution occasioned by the inadvertence of plaintiff or his counsel." 

We recognize that the District Court may have some difficulty 

concluding that the facts in this case warrant relief under 

clause (1) of Rule 60(b) with regard to mistake, inadvertence, 

surprise, or excusable neglect. It appears that cases can 

qualify under clause (1) or under clause (6) which is broader 

because it allows relief for "any other reason justifying 

relief from the operation of the judgment." It is under 

clause (6) that Professor Moore discusses instances in 

which the courts have allowed relief from a judgment because 

of actions by attorney comparable to those set forth in the 

present case. 7 MOORE'S FEDERAL PRACTICE 11 60.27 [2], at 

357 (2d ed. 1979), states: 

"Similarly, in cases in which a plenary trial 

was held, but through extraordinary circumstances the movant's claim or defense was not 

presented, or was presented in such a manner 

that the judgment entered against him was akin 

to a default judgment, relief has been granted 

on motion under Rule 60(b)(6). -- In re Estate 

of Cremidas, for example, the movant, a minor, 

was represented at the trial (a proceeding to 

determine heirship) by an attorney who was so 

inebriated that in effect movantls claim was 

not presented. The cause had been tried in a 

remote judicial division in Alaska and movant 

indicated that no other lawyer was available 

in the division and she was financially unable 

to obtain legal assistance from a lawyer in 

one of the other divisions." (The court granted relief from judgment on the motion made 

some three years after its entry.) 
Following the above quotation, at page 367, Professor Moore 

refers to the question of failure of counsel to properly 

handle a case and states: 

"In L. P. Steuart, - Inc. - v. Matthews (329 F2d. 

234); pyaintiff's case was dismissed for 

failure to prosecute due to the neglect of 

counsel. Two years later, through different 

counsel, plaintiff filed a motion to vacate 

the judgment. In support of the motion were 

an affidavit from former counsel to the effect 

that he had been beset with personal problems, 

related to the illness of his wife and the 

death of his parents, and an affidavit of 

plaintiff to the effect that he had made 

'numerous inquiries' of former counsel, but 

that he had 'refused to answer such inquiries,' 

and from time to time assured plaintiff that 

the 'case was proceeding and that settlement 

of it would be made "soon."' The district 

court denied the motion. The court of appeals 

reversed, holding that under the circumstances 

the district court had abused its discretion 

in denying relief under Rule 60(b)(6). Judge 

Edgerton observed: 

"'Clause (1) of Rule 60(b) is not and clause 

(6) . . is broad enouqh to permit relief when as 

in this case ~ersonal ~;oblems of counsel 

cause - him grozly to n- aclient's -- case and mislead theclient.'" 

(Underscoring added.) 

United States v. Cirami (1977), 563 F.2d 26 (2d. Cir.) 

quoted from - L. - P. Steuart, - Inc. and Professor Moore in 

reaching the conclusion that the attorney's mental disorder 

which induced him both to neglect his duties and to assure 

his client that he was attending to them, was a sufficient 

basis for granting relief under clause (6) as "other reason 

justifying relief," This conclusion is consistent with 

Klapportt v. United States (1949), 335 U.S. 601, 69 S.Ct. 

384, 93 L.Ed. 266, in which the Supreme Court determined 

that the absence or unavailability of counsel which is 

unavoidable should support relief from a judgment. In 

addition, this Court has pointed out that the degree of 

prejudice resulting to other parties is a factor to be 
considered. Ming v. District Court (1970), 155 Mont. 84, 

466 P.2d 907. 

Here, the facts set forth in the Aetna affidavits 

indicate a situation where counsel for Aetna, because of 

emotional problems, was unable to adequately defend the 

rights of his clients before and during trial. The affidavits 

indicate a failure to introduce factual evidence, to prepare 

and submit findings and conclusions, and to keep the client 

apprised of the status of the case. All of these may also 

have contributed to the facts upon which the District Court 

concluded that punitive damages were appropriate because of 

the action and lack of action on the part of Aetna. Under 

these circumstances, equity does require that the District 

Court hold a hearing and determine if under all the facts, 

it is proper to vacate the judgment and have a trial on the 

merits in order to allow Aetna to have its day in court. 

Rule 60 relief is appropriate only where the party can 

demonstrate that it has a meritorious defense. Marshall v. 

Monroe & Sons, Inc. (6th Cir. 1980), 615 F.2d 1156. Aetna's 

motions and affidavit set out a number of defenses which are 

claimed to be available and also facts sufficient to support 

such defenses. 

As trial counsel will recognize, in the interest of 

clarity, we have not referred to all of the motions and 

rulings, and have limited our reference to the essential 

elements. The procedure was further confused by the conditional notice of appeal filed by Aetna on December 24. 

This, of course, raised the question of the jurisdiction of 

the District Court to make any further orders. By such 

conditional notices of appeal, Aetna attempted to take an 
appeal from the November 6 judgment should it be determined 

to be final, and in part stated: 

". . . files this conditional notice of appeal 

in the event the Supreme Court of Montana determines that November 6, 1980, was indeed the 

date of final judgment entered by the aboveentitled court in this action." 

Because the notices of appeal were conditioned upon an 

action to be taken by this Court at some undetermined time 

in the future, the notices were ineffective. We hold that 

the stated conditional notices of appeal were totally ineffective and may be disregarded. As a result, the notice of 

appeal upon which the present appeal by Aetna is based is 

the January 9, 1981, notice of appeal which did cover the 

final judgment, order awarding attorney's fees, and order 

denying post-trial motions as well as the judgment of 

November 6, 1980. 

IV. 

Aetna contends that the Bennett deposition was not 

admissible under Rule 32(a)(3), M.R.Civ.P., in the absence 

of a showing that Bennett was not available. Aetna argues 

that because the deposition was wrongly admitted, there was 

no competent evidence to support a case in favor of Bennett 

against Aetna and requests that the Bennett complaint be 

dismissed. Bennett argues that Rule 32(a)(3)(D) provides 

that a trial judge may admit a deposition if exceptional 

circumstances exist which make it desirable in the interests 

of justice to allow the deposition. We do not find it 

necessary to consider the numerous cases cited in support of 

both views. In this instance, the District Court concluded 

that because of the many hearings prior to trial and the 

many presentations made to the court that the case would be 
submitted on deposition and agreed statements of facts, the 

objection to the introduction of the deposition was overruled. 

No facts are set forth which suggest that the District Court 

was in error in reaching this decision. We affirm the 

court's decision to admit the Bennett deposition in evidence 

in its entirety. 

v. 

Did the Aetna bond encompass the penalties in the 

amount of $4,176.48 for which plaintiff carpenters sought 

recovery? Aetna contends that its bond did not specifically 

provide for penalties and therefore that Aetna can be required 

to pay only wages as distinguished from penalties for late 

payment of wages. In substance the bond provides that if 

Hoselton shall promptly make payments to all claimants for 

all labor and material used then the obligation is to be 

void. Otherwise, as in this case, Aetna agrees with Bennett 

that every claimant "who has not been paid in full" before 

the expiration of 90 days after the date on which the labor 

was performed, may sue on this bond "for such sum or sums as 

may be justly due claimant." The District Court determined 

that the penalties were justly due to plaintiff carpenters 

under their written agreements. Such obligations come under 

the express provisions of the bond. There is no restriction 

in the bond which limits Aetna's liability in the manner 

suggested. We approve the holding of the District Court. 

We affirm the judgment of the District Court as contained 

in its judgment of November 6, 1980, and its order determining 

fees of December 22, 1980, subject to the following: 

The order of the District Court dated December 31, 

1980, denying the Rule 60 motion of Aetna is vacated and the 
District Court is instructed to hold such hearings and take 

such other steps as it finds to be appropriate in order to 

consider Aetna's Rule moti .on on its merits. 

We Concur: 

 ad $c &b,,reDO 

Chief Justice 

Justices 
Mr. Justice Frank B. Morrison, Jr., dissenting: 

Judgment in this case was entered by the District Court 

on November 6, 1980. The attorney's fee issue was not 

completed until December 22, 1980. Had an appeal been taken 

from the November 6 judgment I have no doubt that this Court 

would have overruled a motion to dismiss the appeal as 

premature. Our holding surely would have been that the 

judgment became final November 6 and the notice of appeal 

filed from that judgment would be effective. Here, the 

majority attempts to fashion a rule to suit its purpose in 

an attempt to fashion an equitable result at the expense of 

an orderly and stable civil procedure. 

The majority, knowing its position is weak, attempts to 

distinguish between Rule 60 and Rule 59 motions. The majority 

mistakenly relies upon 7 MOORE'S FEDERAL PRACTICE 11 60.18[81, 

at 216.1 (2d ed. 1979). Rule 60(c) of the Montana Rules of 

Civil Procedure provides that Rule 60 motions shall be heard 

and determined within the times provided by Rule 59. There 

is no federal counterpart to Rule 60(c). Therefore, MOORE'S 

is inapplicable. 

I have always felt that litigants should "have their 

day in court" and that liberal construction should be given 

to procedural rules in order that this end might be facilitated. 

However, to achieve the result here wrought by the majority, 

requires a rewriting of the rules. This I will not do. 

The District Court should be * 
Mr. Justice John C. Sheehy, concurring and dissenting: 

I concur in the affirmance of the judgment of the 

District Court. I dissent respectfully from the remand for 

reconsideration of the Rule 60 motions. 

Principally, I see no reason to hold the District Court 

in error where the problems surrounding the Rule 60 motions 

were created through the disregard by Aetna's counsel of the 

rudimentary rules of civil procedure in post-trial proceedings, 

as governed by the Montana practice. 

It is correctly stated in the majority opinion that 

once Aetna's counsel failed to notice up his Rule 59 motions 

for new trial or amendment of judgment within 10 days (Rule 

59(d)) the "court could not consider the matter further." 

The reason is set out in our earlier case of Leitheiser v. 

Montana State Prison (1973), 161 Mont. 343, 348, 505 P.2d 

1203, 1206, where we said: 

"The district court was without jurisdiction 

to grant - or deny a motion for a new trial on 

March 2, 1972. By operation of the selfexecuting provision of Rule 59(d), M.R.Civ.P., 

the motion for a new trial was 'deemed denied' 

('deemed' in this construction has been held 

to be synonymous with 'considered', 'determined', 

or 'adjudged') on February 18, 1972." 

And further: 

". . . However, once the self-executing denial 

of a motion under Rule 59(d) becomes effective, 

any subsequent order by the district court 

concerning that motion is outside the district 

court's jurisdiction and, consequently, null, 

void, and without effect." 161 Mont. at 348. 

The majority opinion ignores, however, the provision of 

Rule 60(c) that is equally as mandatory and compelling as 

Rule 59 (d) . Rule 60 (c) provides : 

"Rule -- 60(c). -- Time for hearing and determining 

motions. Motions provided by subdivisions (a) 
and (b) of this rule shall be heard and determined 

within the times provided by Rule 59 in the 

case of motions for new trials and amendment of 

judgment. " 

The overbearing force of Rule 60(c) which is unique to 

Montana rules (there is no federal counterpart in Rule 60, 

F.R.Civ.P.) is that motions under Rule 60, such as this case 

features, are subject to the same limitations under our 

practice as motions under Rule 59 (there is no federal 

counterpart to the notice and hearing provisions in our 

Rule 59, in Rule 59, F.R.Civ.P.). Since this is true, the 

District Court here properly decided under Leitheiser that 

it had lost jurisdiction to hear the first Rule 60(b) motion 

filed by Aetna's counsel. The first motion was "deemed 

denied," and so the motion had been "determined" in the 

legal sense. 

Time and again, in opinions, in seminars, in speeches 

by members of this Court before meetings of the State Bar, 

we have stressed the jurisdictional traps that lie in the 

post-trial motions, and have urged counsel practicing in the 

trial courts of this state to know and observe the same. It 

was not any act, bent or proclivity of the district judge 

that created Aetna's problem about its Rule 60(b) motion. 

It was the failure of Aetna's counsel to follow the plain 

provisions of Rules 59 and 60. I am unable to explain to 

Leitheiser, to Armstrong (c.f. 164 Mont. 187, 196, 520 P.2d 

1081, 1086), to Marvel Brute Steel Bldg. ((1980), c.f. 

Mont. - , 616 P.2d 380, 382, 37 St.Rep. 1670), and to a host 

of other litigants why Rule 59 deprived their district 

courts of jurisdiction to act, but Rule 60 does not operate 

in the same way here. I find no satisfactory explanation in 

the majority opinion. 
In a recent newspaper poll among the state bar members, 

we learned that the divagations of this Court from established 

precedent raised a problem for state lawyers. They reported 

that every District Court decision should be appealed to 

avoid malpractice claims, because the loser in the District 

Court may benefit from the planetary decisions of this Court. 

We have here, perhaps, an example. 

The majority opinion does not distinguish between the 

first Rule 60(b) motion of Aetna's counsel and the second 

Rule 60(b) motion, again filed before final judgment, that 

the District Court labelled a "bootstrap motion." 

The second Rule 60 motion was filed by Aetna's counsel 

on December 12, 1980. It is not - a motion addressed to the 

judgment, final or partial. It is titled "Rule 60 Motion 

for Relief from Final Order or Proceeding." It moves the 

District Court for an order "relieving the defendant, Aetna 

Casualty Company, from its omission to notice the hearing of 

defendant's consolidated motions for a new trial, to alter 

or amend judgment and for relief from the court's findings 

of fact, conclusions of law, and judgment, and other motions 

filed on November 17, 1980, within ten (10) days after the 

motion had been served . . ." upon the grounds that ~etna's 

counsel had failed to notice the motions due to "mistake, 

inadvertence, excusable neglect or for other reasons justifying 

relief or through an error arising from oversight or omission." 

The second Rule 60 motion depends entirely upon the 

omission of Aetna's counsel to notice up his post-trial 

motions for hearing. His affidavit in support does not 

constitute a sufficient excuse, in my judgment, to support 

the grant of his motion. (I will advert to his affidavit 

later). It is insufficient in view of the numerous cases 
that have come out of this Court that place a strict duty on 

counsel to follow the notice and hearing provisions of Rule 

59. No diligent counsel should now be able to claim he was 

unaware of the required procedures. Diligence is required 

of counsel in the representation of clients. 

The second Rule 60 motion asked the District Court to 

do something it was powerless to do under our decisions. The 

court could not resurrect the Rule 59 or 60 motions which 

were dead, functus officio. The District Court had lost 

jurisdiction. Worse, now this Court has opened a way to 

undermine the whole structure of our earlier decisions 

regarding Rule 59 or 60 motions which are "deemed denied." 

So a lawyer in the future does fail to notice up or procure 

a hearing within 10 days of his Rule 59 or 60 motions. No 

matter, he can now file another motion under Rule 60, saying 

he forgot, or didn't know. He has a viable motion under 

this majority opinion. 

In addition, the majority has succeeded in circumventing 

Rule 6(b) of the Montana Rules of Civil Procedure, which 

provides that a court may not extend the time for taking 

action under Rule 60, except to the extent and under the 

conditions stated in the rule. 

Be that as it may, the bootstrap Rule 60(b) motion 

should be denied as a matter of law, assuming it was otherwise 

timely. Its basis is the claimed excusable neglect of 

Aetna's counsel. His affidavit in support of his bootstrap 

motion recites that at the time he fashioned the first 

motions, he was heavily burdened with other matters, including 

the responsibility for 150 files in active litigation, 

numerous pieces of correspondence, preparing and filing a 

reply brief on behalf of the state in United States v. 
Montana then on appeal in the United States Supreme Court, 

and a necessary trip to Washington, D.C. in connection with 

that case; and "numerous other matters which precluded his 

giving this matter the attention that it deserved." In 

Link v. Wabash Railroad Co. (1962), 370 U.S. 626, 633-634, 

82 S.Ct. 1386, 1390, 8 L.Ed.2d 734, 740, the high court 

imputed the neglect of the attorney to the party and refused 

Rule 60 relief because of counsel's unexcused conduct. The 

court declared that since the client voluntarily chose the 

attorney as his representative in the action, the party 

could not avoid the consequences of the acts and omissions 

of his freely selected agent. In Schwarz v. United States 

(2d Cir. 1967), 384 F.2d 833, 836, the court of appeals 

upheld the denial of a motion for relief where the attorney 

failed to prosecute his client's case, occasioned by the 

fact that the attorney had undertaken to handle more cases 

than he could manage and had neglected plaintiff's case. In 

Kostenbauder v. Secretary of H.E.W. (U.S.D.C. Md. Pa.2 1976), 

71 F.R.D. 449, 21 F.R.Serv.2d 1186, relief from summary 

judgment was denied where the previous attorney failed to 

file opposition briefs, and it was claimed that the attorney 

was running for political office, had a large caseload and 

had lost a key employee. In essence, the courts are saying 

that a large and busy practice is the norm for trial attorneys 

and that such a business does not justify relief from 

ordinary neglect. 

In his affidavit supporting his bootstrap motion, 

Aetna's counsel does not accuse himself of gross negligence. 

If he could state gross negligence, perhaps his case would 

come under Rule 60(b)(6), the residual clause of that rule. 
Clause 60(b)(l), covers excusable neglect; presumably clause 

60(b)(6) covers inexcusable negligence, since the provisions 

of clause (b) (1) and (b) (6) are mutually exclusive. Since 

Aetna's counsel did not claim gross negligence, he cannot 

rely upon clause (b) (6) . 

It should be remembered that through all of this 

litigation, Aetna has been represented by two independent 

law firms, each respectively looking out for the interests 

of Aetna as against Donald Bennett and all of the plaintiffs. 

One law firm represented defendant M. D. O'Connell and Aetna 

Casualty Company where their interests coincided (Aetna 

claimed to have an indemnity right against M. D. O'Connell 

for any losses sustained in this litigation). A separate 

law firm represented Aetna as a defendant against all of the 

plaintiffs, against defendant Donald Bennett, and also 

against M. D. O'Connell on the indemnity cross-claim. 

As to the issues involved here in the successful cross-claim 

of Donald Bennett, the interests of these two law firms 

coincided in their representation of Aetna. Each made Rule 

59 motions. Each failed to notice up or to procure a hearing 

within the ten day period required by Rule 59(d). 

The majority opinion purports to have found an escape 

hatch as to the first Rule 60 motion of Aetna, the one based 

on the illness of its attorney. The judgment for Bennett, 

the majority conclude, was not final until the award of 

attorneys fees was decided by the District Court on December 

22, 1980. On this basis, the majority resurrect the first 

Rule 60 motion and send it back for reconsideration. Again 

the majority ignore the provisions of Rule 60(c), which 

provide that motions under the rule "shall be heard and 

determined within the times provided by Rule 59." The 
majority concede that motions under Rule 59 may be made 

prior to final judgment. They apparently see no illogic 

in holding that under Rule 59 a motion for relief from a prejudgment order can be taken by a party while denying that 

same procedure under Rule 60. 

The contention that the November 6, 1980 judgment of 

the District Court was not final was an afterthought by 

Aetnak counsel. It was never raised in the pretrial motions 

or on the arguments thereon until after counsel for the 

successful parties moved the court to fix attorneys fees. 

Then a light turned on, and there came a flurry of new 

motions for reconsideration under Rules 59 and 60 on the 

grounds that the earlier motions, which -- - they - had filed, were 

"premature". Having once proceeded undiligently to deprive 

the District Court of the power to hear their Rule 59 and 

60 motions, they now proceeded diligently but unwittingly to 

deprive the District Court of jurisdiction to hear their 

Rule 60 motion after the judgment became final on December 

22, 1980. (The court gave oral notice of its attorneys fees 

decision on December 17, 1980, but the order was not entered 

and served until December 22, 1980.) 

On December 22, 1980, one of Aetna's law firms filed a 

"conditional notice of appeal by Aetna Casualty and Surety 

Company, from the judgment entered on November 6, 1980, the 

summary denial of their motions for new trial or to amend 

the findings of fact and conclusions of law dated November 

28, 1980, and the court's awarding attorney fees on December 

17, 1980." 

On December 24, 1980, the other of Aetna's law firms 

filed a conditional notice of appeal on behalf of Aetna 

Casualty and Surety Company, from the judgment of November 
6, 1980, and supplemented by its award of attorney fees on 

December 17, 1980, on the ground that it wanted "to insure 

that its rights on appeal had been preserved and perfected" 

in the event that the Supreme Court determined that November 

6, 1980 was indeed the date of the final judgment. 

On December 26, 1980, the counsel who had filed the 

second conditional notice of appeal, having found that he 

had not referred to the denial of the post-trial motions in 

that notice, filed an "amended conditional notice of appeal" 

from the judgment entered on November 6, 1980, supplemented 

by the award of attorneys fees on December 17, 1980, and the 

court orders denying their motions filed pursuant to Rules 

52, 59 and 60. Again the notice stated that it was conditional 

upon whether this Court decided that the November 16, 1980 

date was indeed the date of final judgment but that Aetna 

wanted "to insure that its rights on appeal had been preserved 

and perfected." 

Each law firm subsequently filed, on January 5 and 

January 9, 1981, ordinary unconditional notices of appeal. 

The "conditional" notices of appeal which were filed by - 

Aetna prevented the District Court from considering further 

the Rule 60 motion based on the illness of the attorney 

after the judgment became final on December 22, 1980. There 

is no such animal in our procedure as a "conditional" 

notice of appeal. Either the District Court has jurisdiction 

of the cause or the Supreme Court has jurisdiction of the 

cause. Jurisdiction transfers to the Supreme Court from a 

District Court upon the filing of a notice of appeal, and 

thereafter the District Court is powerless to take any 

substantive action with respect to the cause. Churchhill v. 

Holly Sugar Corp. (1981), - Mont. - , 629 P.2d 753, 760, 
38 St.Rep. 860; State Etc. v. District Court, Etc. (1980), 

-- Mont . - , 614 P.2d 1050, 1051-52, 37 St.Rep. 1275; 

Northern Plains, Etc. v. Bd. of H. & Envir. Sciences (1979), 

-- Mont . - , 603 P.2d 684, 688, 36 St.Rep. 2174; McCormick 

v. McCormick (1975), 168 Mont. 136, 138, 541 P.2d 765, 766. 

The "condition" laid down in the conditional notices of 

appeal, that is whether the right of Aetna to consideration 

of its Rule 59 and 60 motions depended on whether the judgment 

was final on November 8, 1980, is no condition at all. 

Aetna's counsel had misread the law. They had lost the 

right to any consideration of the Rule 59 and 60 motions by 

virtue of the time and notice provisions of Rule 59(d) and 

60(c). The bootstrap motion under Rule 60 was insufficient 

on its face. The intention of Aetna that the "conditional" 

notices of appeal perfected and preserved its rights in this 

Court is manifested from the instruments themselves. The 

majority opinion ignores this manifest intention. 

An appeal is taken by filing a notice of appeal in the 

district court (Rule 4(a), M.R.App.Civ.P.). It must specify 

the party or parties taking the appeal, and designate the 

judgment or order appealed from. (Rule 4(c), M.R.App.Civ.P.) 

And finally, by filing the "conditional" notices in compliance 

with the rules, Aetna fulfilled its desire "to insure that 

its rights on appeal have been preserved and perfected." A 

notice of appeal is just that, a notice of appeal. Any 

other label attached to it is unimportant. The District 

Court from which the appeal had been taken was divested of 

jurisdiction under our case law. 

Before we leave this matter finally, it should be 

noted that the District Court was not entirely out in left 

field in stating that under Montana law, attorneys fees are 
a matter of costs and not of special damages recoverable in 

the main action. 

In Kintner v. Harr (1965), 146 Mont. 461, 480, 408 

P.2d 487, 498, this Court states broadly that counsel fees 

are not "reasonable and necessary expenses as are taxable 

according to the course and practice of the court." (See 

section 25-10-201 (9) , MCA. ) Yet we have never overruled 

Bovee v. Helland (1916), 52 Mont. 151, 155, 156 P. 416, 417, 

to the effect that if the parties by contract or stipulation 

intend that attorneys fees are to be paid to the prevailing 

party as part of the costs or "in addition to other costs," 

then such attorneys fees shall be assessed by the court as a 

part of the costs. In other words, under Bovee, the judgment 

is final before the costs are assessed, and the amount of 

costs to be awarded is not intrinsic to the finality of the 

judgment. (Such fees can be attacked in the manner provided 

for objections to items of costs. Section 25-10-502, MCA.) 

In this case, the language of the security agreement 

that gives right to attorneys fees for the successful parties 

is "The obligee shall not be liable for the payment of any 

costs or expenses of any such suit." 

The problem of whether attorneys fees are costs or a 

part of the judgment depends, in my opinion, on whether they 

are of the nature of special damages recoverable upon pleadings 

and proof or part of the incidental expenses of suit. This 

seems to be the tenor of Bovee, supra. It is not an easy 

question to decide. It is certainly vexing the federal 

courts. See White v. New Hampshire Dept. of Empl. Sec. 

(Decided March 2, 1382, slip opinion). 

For the reasons foregoing, therefore, I would affirm 

the ~istrict Court judgment. 

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