No. 85-23 IN THE SUPREME COURT OF THE STATEOF MONTANA 1986

DANIEL BREESE and CHRISTINEM. BREESE, Plaintiffsand Respondents,

STEEL MOUNTAIN ENTERPRISES, INC., aMontana corporation, BRYAN K. STAHLBERG and ELAINE E. STAHLBERG, Husband and Wife,d/b/a THE SPORTSMAN BAR AND CAFE,Defendantsand Appellants.

APPEAL FROM: District Court of the Eleventh JudicialDistrict, In and for the County of Flathead, The HonorableMichaelKeedy,Judgepresiding.

COUNSEL OF RECORD: ForAppellant: Murray, Kaufman,Vidal & Gordon; DanielW. Hileman argued, Kalispell,Montana ForRespondent: Keller & German;Brenda Nordlund andAnn German argued, Kalispell,Montana

Submitted:January 16, 1986 Decided:April 1, 1986 

### APR

## 1. 1986 Filed:



### - &d~ ClerkMr. Justice Fred J. Weber delivered the Opinion of the Court. Christine Breese and Daniel Breese (plaintiffs), wife and husband, filed separate employment discrimination actions in Flathead County District Court alleging violations of the Montana Human Rights Act (Act). The cases were consolidated and tried to a six-person jury which rendered a verdict in favorof SteeleMountain Enterprises, Inc. (SteeleMountain). Judgment was entered for Steele Mountain. Plaintiffs moved for a new trial, claiming that the relief sought under the Act was equitable in nature and the case should have been tried to a judge rather than a jury. The District Court granted a new trial. Steele Mountain appeals. We reverse. We conclude that the following two issues are determinative: 1. Did the District Court err in granting plaintiffs" motion for anew trial? 2. Did the District Court err in denying defendants' motion for attorney fees? Christine Breese began working at The Sportsman Bar and Cafe in July 1981. Daniel Breese began working at The SportsmanBar and Cafe onNovember 1,1-981. Christine worked various jobs including waitress, dishwasher, and cook. Daniel worked as a janitor. Both Daniel and Christine were fired from The Sportsman Bar and Cafe on November 18, 1981. Christine Breese contends she was fired forbeing pregnant. Daniel Breese maintains he was fired for being the husband of Christine Breese. Steele Mountain contends they

were fired for poor job performance and taking food from the restaurant withoutpermission. In November 1983, plaintiffs filed separate employment discrimination complaints against Steele Mountain and Bryan Stahlberg and Elaine Stahlberg d/b/a The Sportsman Bar andCafe. Initially,no demand was made for jury trial. InMay 1984,citingRule 39(b) M.R.Civ.P., Steele Mountainmoved for trial by jury. Themotion was granted, and thematter tried to a six-person jury which rendered a verdict in favor of SteeleMountain. After judgment was entered and notice of entry of judgmentmailed,plaintiffsmoved for a new trial. Later, Steele Mountain moved for an award of attorney fees. The District Court granted plaintiffs' motion for a new trial and denied SteeleMountain's motion for an award of attorney fees.

Did the District Court err in granting plaintiffs' motion for anew trial? Fol-lowingjury trial,plaintiffsmoved for a new trial. First, they contended the court abused its discretion in granting a late request for a jury trial. Second, they argued an action filed under the Act is equitable in nature and requires trial to a judge rather than a jury. The District Court granted plaintiffs' motion for a new trial,ruling in pertinentpart: An actionbrought under title 49,chapter 2 is equitable in nature, and is akin to an action brought under TitleVII of the Federal Civil Rights Act of 1964. Because of the equitable nature of the action, there is no right to a tria.1by iury in a federal Title VII suit. It was error to allow a jury trial in this matter, and the error has substantially prejudiced the Plaintiffs' case. Plaintiffs' motion for a new, non-jury trial is GRANTED (citations omitted). Plaintiffs contend that the only damages sought were back pay and reinstatement. By analogy to Title VII,plaintiffs maintain these dama.gesare by nature equitable and properly tried to the court rather than a jury. Plaintiffs urge the Court to find a violation of the Act to be a purelyequitable claim. Steele Mountain contends that plaintiffs sought other dama.ges that were of a legal nature besides reinstatementand back pay. The record discloses that plaintiffs submitted evidence of damages other than reinstatement and back pay. Under Instruction 6, the measure of damages was "the amount wkich will compensate for all the detriment proximately caused thereby 

# .

# .

# .whether it could have been anticipated ornot." Likewise, Instructions 10 and 11 provided that if the jury found plaintiffs were terminated unlawfully, or that the defendants engaged in discriminatory practices as alleged, then the jury could award damages in a sum "which would rectify any harm,pecuniary or otherwise.

# . ." The Court has held that the law of the case is established by the jury instructions: [B]y their failure to object to instructions 

# . . . in the trial court, plaintiffs assented to the rules of law therein announced and on appeal to this court they will not be heard to urge a theory in conflict therewith. Wallace

### v. Weaver, 47 Mont. 437, 133 P. 1099. The theory upon which the case wa.s tried in the district courtwith the acquienscence of theparties isbinding upon themhere. Pappas v. Braithwaite (1945), 117 Mont. 569, 577, 162 ~.2d 212, 215. In closing argument which followed the above described law of the case, plaintiffs' counsel pointed out that the plaintiffs lost their car and suffered anxiety and emotional stress fromwhich the jury could award an adequate figure to compensate the plaintiffs, to make themwhole, and to rectify theharm causedby the illegalaction. We therefore conclude that in the present case,a claim for relief under the Act and a legal claim for damages as a result of unlawful dischargewere tried in a single proceeding. Assuming only for purposes 

### of argument thatreinstatement and back pay are equitable claims,plaintiffs presented both legal and equitable claims to the jury, each claim arising out of common fact issues. In a similar proceeding in Lincolnv. Board of Regents of Univ. System (11th Cir. 1983), 697 F.2d 928, 934, cert. denied, 464 U.S. 826

(1983), the Circuit Court ruled on the effect of trying equitable and legal causes of action arising out of a common fact issueand stated: An action for reinstatement and back pay under Title VII is by nature equitable and entails no rights under the seventh amendment. An action for damages under S 1981, however, is by nature legal and must be tried by a jury on demand. When legal and equitable actions are tried together, the right to a jury in the legal action encompasses the issues common to both. When a party has the right to a jury trial on an issue involved in a legal claim, the judge is 

### of course bound by the jury's determination of that issue as it affects his disposition of an accompanying equitable claim

(citationsomitted)

# . We approve and adopt the reasoning contained in the above quotation fromLincoln. In the present case,plaintiffs tried to a jury claims under the Act as well as claims which are legal in nature. Steele Mountainwas entitled to have a jurydeterminewhether or not the plaintiffs suffered damages for emotional distress. We hold that the right to a jury trial in the present action encompassed both the claims under the Act and the legal claims for damages, and that the trial judgewas bound by the jury's determination of facts on all issues. We hold that the District Court erred. in granting a new trial and remand the case to the District Court with instructions to reinstate the jury verdict and enter judgment in accordance with thatverdict.Did theDistrictCourt err in denying defendants'motion for attorney fees? Section 49-2-509(3), MCA, provides that the courtmay in its discretion allow the prevailing party reasonableattorney fees. Steele Mountain contends attorney fees should have been awarded because plaintiffs' case was frivolous and f

actual.1~ baseless. In denying attorney fees, the District Court ruled: [A]n award of attorney fees under this statute is whol1.y discretionary. Attorney fees are rarely awarded to aprevailing party defendant. Where the suit successfully defended was frivolous or factually baseless, attorney feesmay be allowed to a prevailing Defendant. This isnot true of the case atbar. Our review of the record establishes that the District Ccurt did not abuse its discretion in denying attorney fees to Steele Mountain. We will not substitute our discretion for that of the District Court. We affirm the denial of attorney fees. We reverse and. remand with specific instructions that the jury verdict be reinstated, and judgment entered in accordance with this opinion.We Concur: 

### &..-