No. 80-266 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1981 

JOHN R. MEANS and MARY MEANS, 

MONTANA DEPARTMENT OF OF NATURAL 

RESOURCES and CONSERVATION, an 

agency of the State, 

Plaintiffs and Appellants, 

THE MONTANA POWER COMPANY, A 

Montana Corporation, 

Defendant and Respondent. 

Appeal from: District Court of the Fourth Judicial District, 

In and for the County of Missoula, Montana 

Honorable John Henson, Judge presiding. 

Counsel of Record: 

For Appellants: 

Donald D. MacIntyre, Dept. of Natural Resources, argued, 

Helena, Montana b~' Williams Law Firm, Missoula, Montana 

Richard Ranney argued, Missoula, Montana 

Filed : 

4vlkl4 4 - 79!37 

Submitted: January 13, 1981 

Decided: mR 4 - 1981 
Mr. Justice Gene B. Daly delivered the Opinion of the Court. 

This appeal arises from an order appointing respondent's attorney lead counsel and providing for reasonable 

compensation and an order fixing that compensation entered 

by the District Court for the Fourth Judicial District, 

Missoula County, the Honorable John S. Henson presiding. 

There occurred on July 16, 1977, a fire in the Pattee 

Canyon area of Missoula County, Montana. The fire caused 

extensive damage to both homes and land in the area. The 

Montana Department of Natural Resources and Conservation 

(DNRC) fought the blaze and made arrangements for an investigation into the causes of the fire. It was later determined that power lines of the Montana Power Company could 

have been the cause of the Pattee Canyon fire. 

A complaint for damages to their property caused by 

the fire was filed by John and Mary Means on March 14, 1978. 

Filing of the complaint had followed extensive discovery by 

Shelton C. Williams, attorney for Mr. and Mrs. Means. 

On December 21, 1978, DNRC filed its own complaint 

seeking approximately $532,000 for damages to state land and 

costs for extinguishing the fire. 

On March 30, 1979, the Means case and the DNRC case 

were consolidated by stipulation. Subsequently, other 

parties who had suffered losses caused by the fire filed 

additional complaints against the Montana Power Company. 

Altogether there were thirty-one cases filed in the Fourth 

Judicial District Court, Missoula County, except for one 

which Williams filed in the Federal District Court for 

Montana. There were approximately ten attorneys or firms 

who ultimately became involved in the litigation for the 
various plaintiffs. 

The Montana Power Company, by motion on May 23, 1979, 

sought consolidation of all cases pending in District Court. 

Shortly afterwards, on July 27, 1979, Williams filed a 

motion seeking an appointment of lead counsel. 

The motion for consolidation for the purpose of 

determining liability was granted on August 8, 1979. The 

order provided, however, that the damage aspect of the 

actions be bifurcated with separate trials being envisioned, 

if necessary, in this regard. 

On October 30, 1979, Williams filed a stipulation 

whereby counsel for all parties, except DNRC, agreed to his 

being lead counsel and to his compensation therefor. As a 

result of the stipulation, Williams represented thirty of 

thirty-one parties for claims totaling $2,242,875.75. On 

November 1, 1979, the District Court, without a hearing, 

ordered the appointment of Williams as lead counsel in all 

consolidated cases, including the action filed by DNRC. The 

order also provided that the Williams Law Firm be reasonably 

compensated for services heretofore or hereafter rendered. 

The amount of compensation was to be determined by agreement 

of the parties or by the court after termination of lead 

counsel's responsibilities. 

The matter proceeded toward the scheduled trial date 

of December 3, 1979, with discovery proceeding and numerous 

preliminary motions with Williams as lead counsel. Prior to 

trial settlement negotiations began with DNRC and various 

home owners settling their claims for $1,215,000 of which 

$425,000 was for DNRC. A group referred to as the raw 

landowners failed to reach a settlement and preparation on 
their behalf continued for the scheduled trial date. 

On December 3, 1979, the presiding judge withdrew 

from the case, and the trial date was vacated. A new judge 

and trial date were subsequently set, and the raw landowners 

proceeded to trial. 

On December 28, 1979, Williams, as lead counsel, 

after failing to reach an agreement with DNRC, moved for a 

determination of compensation. Af ter a series of hearings 

the District Court entered an order on March 14, 1980, 

granting the Williams Law Firm $47,222.22 to be paid by 

DNRC . 

DNRC appeals both the order of November 1, 1979, 

appointing lead counsel and the order of March 14, 1980, 

determining compensation. 

The following issues have been presented to this 

Court for review: 

1. Did the District Court err in failing to hold an 

evidentiary hearing prior to entering its findings of fact, 

conclusions of law and order appointing lead counsel? 

2. Did the District Court err in appointing a lead 

counsel? 

3. Did the District Court err in ordering DNRC to 

pay compensation to lead counsel? 

4. Did the District Court abuse its discretion in 

awarding compensation in the amount of $47,222.22? 

As to the first issue on appeal, DNRC would have this 

Court remand this action to the District Court due to its 

failure to hold an evidentiary hearing prior to entering the 

November 1, 1979, order appointing lead counsel. The basis 

of this contention is that since there is no record to 
review, this Court is unable to determine if there is sufficient evidence to support the findings made. We must disagree. 

The order of November 1, 1979, was entered in response to a motion under Rule 42(a), M.R.Civ.P. (consolidation). Rule 52(a), M.R.Civ.P., in pertinent part, provides 

that, "[flindings of fact and conclusions of law are unnecessary on decisions of motions under Rules 12 or 56 or 

any other motion . . ." Findings of fact being unnecessary 

for a ruling on said motions, the District Court is under no 

obligation to provide an evidentiary hearing. 

The District Court in this instance, however, though 

under no obligation to do so, chose to make findings of fact 

upon which it based its conclusions of law and order. This 

Court now being presented with the order for examination, it 

is incumbent upon this Court to review the findings as well 

as the applicable law. See Timmerman v. Gabriel (1970), 155 

Mont. 294, 470 P.2d 528; section 3-2-204(5), MCA; Upper 

Missouri G & T Electric Cooperative, Inc. v. McCone Electric 

Cooperative, Inc. (1971), 157 Mont. 239, 484 P.2d 741. It 

is not necessary, however, that this action be remanded for 

an evidentiary hearing. 

Here, the findings in dispute are: (1) that the size 

and complexity of the case demands the appointment of a lead 

counsel; and (2) that almost all of the discovery and trial 

preparation has been done by Williams with the implied consent of DNRC. An examination of the submitted District 

Court file (as to the complexity of the case) and a review 

of the hearings held in regard to the order setting compensation (as to the work done by Williams with the implied 
consent of DNRC) provides a sufficient basis for review. 

The second issue on appeal involves a determination 

of whether or not this action was an appropriate one for a 

lead counsel to be appointed. 

As the cases cited by both DNRC and Williams indicate, the appointment of lead counsel is made in conjunction with a motion and order for consolidation and has been 

primarily used in federal court proceedings involving multiparty litigation. See In Re Air Crash Disaster at Florida 

Everglades (5th Cir. 1977), 549 F.2d 1006; Vincent v. Hughes 

Air West, Inc. (9th Cir. 1977), 557 F.2d 759. 

In the present case, thirty-one separate plaintiffs 

all brought suit against the Montana Power Company claiming 

damages occasioned by a single disaster. The thirty-one 

plaintiffs were represented by ten different attorneys. 

Clearly, this case does not appear as complex as that seen 

in Vincent (sixty separate actions brought in state and 

federal courts in Washington, Utah and California) or in 

Florida Everglades (150 claims in both federal and state 

courts). However, it cannot be said that the trial court, 

in exercising its managerial power over this proceeding, 

clearly abused its discretion as a matter of law in providing for the appointment of a lead counsel. 

The purpose of consolidation and appointment of lead 

counsel is to permit trial convenience and economy in 

administration by avoiding unnecessary costs or delay. 

MacAlister v. Guterma (2nd Cir. 1958), 263 F.2d 65. Absent 

a lead counsel there was no guarantee presented to the court 

that all the parties to this proceeding would not become 

actively involved in the litigation. Consequently, had the 
District Court failed to formally order appointment of lead 

counsel, it could have been faced with the possibility of 

ten different attorneys pursuing ten different theories of 

attack. It is obvious that such an arrangement would foster 

undue delay, cost and inconvenience. 

Furthermore, and most importantly, in light of DNRC's 

past conduct, this Court seriously questions the propriety 

of allowing DNRC to avoid the application of the lead 

counsel order. After the order was entered at no time did 

DNRC move for a reconsideration, nor did it seek an appeal 

or writ to have the order reviewed by this Court prior to 

the scheduled trial date. Moreover, during the initial 

settlement negotiations, DNRC failed to accept a proposal 

made by the Montana Power Company to segregate the claims of 

DNRC, which would have allowed the Department to proceed on 

its own and to avoid further application of the lead counsel 

order. Even prior to the lead counsel order, during 

extensive discovery engaged in by the parties, DNRC allowed 

Williams to act as lead counsel, having him take a great 

bulk of the deposition needed for trial, while choosing not 

to attend and merely paying its own pro rata share of the 

costs. DNRC also allowed Williams to do the majority of the 

work in preparing interrogatories. 

DNRC contends it was bound by the lead counsel order 

and unable to appeal until the March 14, 1980, order was 

entered allowing Williams compensation. A final determination of the parties' rights, argues DNRC, only occurred when 

the court ordered it to pay compensation and the matter was 

deemed concluded. DNRC bases this argument on language in 

the lead counsel order that the court was to retain contin- 
uing jurisdiction over the matter to review the acts of lead 

counsel to enforce and interpret the court as entered." 

We disagree with DNRC1s position in failing to see 

why the language noted should make the order appointing lead 

counsel any less final than the March 14, 1980, order 

setting compensation. The November 1, 1979, order specif ically appointed Williams lead counsel, subject to reasonable compensation. The only reason the court was retaining 

a "continuing jurisdiction over the matter" was to assure 

that Williams acted in the best interest of the plaintiffs 

and to set the already ordered reasonable compensation. If 

DNRC disputed this appointment and the terms thereunder, it 

should ha.ve made its feelings known. 

It is apparent that DNRC was more than willing to allow Williams to act as lead counsel; to accept his appointment as such; and to accept the benefits of the $425,000 

settlement acquired under the order. DNRC having alrea-dy 

consented to an application of the lead counsel order, it 

should not be allowed to avoid the same on appeal to this 

Court. 

As to the order determining compensation for Williams 

as lead counsel, DNRC first argues that due to the absence 

of any contractual agreement between the parties or any 

statutory authority, attorney fees are not recoverable. See 

Winder v. Jonal Corp. (1976), 169 Mont. 247, 545 P.2d 1094. 

Williams acknowledges this general rule but contends that in 

situations where attorney fees are paid from a "common 

fund," it is accepted that these fees can be awarded even in 

absence of statute or an express agreement. 

The "common fund1' concept provides that when a party 
through active litigation creates, reserves or increases a 

fund, others sharing in the fund must bear a portion of the 

litigation costs including reasonable attorney fees. The 

doctrine is employed to spread the cost of litigation among 

all beneficiaries so that the active beneficiary is not 

forced to bear the burden alone and the "stranger" (i.e., 

passive) beneficiaries do not receive their benefits at no 

cost to themselves. See Vincent, supra, 557 F.2d at 769. 

The doctrine is well recognized and has been quoted 

in several Montana cases. See In Re Baxter's Estate (1933), 

94 Mont. 257, 22 P.2d 182; Hardware Mutual Casualty Co. v. 

Butler (1944), 116 Mont. 73, 148 P.2d 563; Tuttle v. 

Morrison-Knudsen Co., Inc. (1978), 177 Mont. 166, 580 P.2d 

1379. See also City of Klawock v. Gustafson (9th Cir. 

1978), 585 F.2d 428. The basis of the doctrine being rooted 

in the equitable concepts of quasi-contract, restitution and 

recapture of unjust enrichment, the common fund theory of 

awarding compensation to a lead counsel must be allowed as 

an expansion of the general rule provided in Winder. 

DNRC argues that even if the common fund concept is 

recognized in Montana it should not be applied in this 

instance. DNRC bases this contention on an active litigant 

versus passive litigant distinction. 

It is stated that only inactive or passive beneficiaries should be forced to bear the costs of litigation 

under the common fund doctrine. An inactive member in this 

regard has been defined as a beneficiary who merely fails to 

retain counsel or one who retains legal counsel but said 

counsel fails, in any degree, to participate in any labors 

leading to the creation of the fund. See In Re Estate of 
Korthe (1970), 88 Cal.Rptr. 465, 9 Cal.App.3d 572; see also 

plumbing fixture anti-trust cases: Philadelphia Housing 

Authority v. American Radiator and Standard Sanitary Corp. 

(E.D. Pa. 1971), 322 F.Supp. 834, modified sub nom., Ace 

Heating and Plumbing Co. v. Crane Co. (3rd Cir. 1971), 453 

F.2d 30; Philadelphia Housing Authority v. American Radiator 

and Standard Sanitary Corp. (E.D. Pa. 1970), 323 F.Supp. 

364; Note, Reimbursement for Attorneys' Fees from Beneficiaries of Representative Litigation, 58 Minn. L. R. at 947- 

948 (1974). 

Nevertheless, the courts have recognized an exception 

to this general rule. See Vincent, 557 F.2d at 772. The 

exception provides that so long as contributions of active 

counsel were unequal (el greater) when compared with 

those of a less active counsel, compensation can still be 

ordered paid under the common fund doctrine by the less 

active party. See also Doherty v. Bress (D.C. Cir. 1958), 

262 F.2d 20, cert. denied 359 U.S. 934, 79 S.Ct. 649, 3 

L.Ed.2d 636. The purpose of this exception is similar to 

that of the common fund doctrine itself--to avoid unjust 

enrichment. 

Here the record indicates that DNRC accrued 1,680 

hours in legal services. This total included the services 

of DNRC's legal staff, legal interns and nonlegal personnel. 

Williams Law Firm's time records reflected 3,909.25 hours on 

the case to the time of settlement. This total also 

included work by attorneys, interns and secretaries. 

Williams also testified that his time records understated 

the actual time spent on the case by 10 to 20 percent. The 

disparity in efforts between lead counsel and DNRC being 
evident, the District Court was proper in ordering compensation. 

DNRC's final arguments concerning its efforts to 

avoid paying lead counsel are twofold. First, DNRC maintains that as a state agency, it should be treated differently with respect to an obligation to compensate lead 

counsel in that it can only retain counsel by an exclusive 

procedure set forth in Executive Order No. 15-78. Second, 

DNRC contends that DR2-107, "Division of Fees Among Lawyers," of the Canons of Professional Ethics, will be 

violated should this Court grant Williams the ordered 

compensation. 

In rejecting DNRC's contention that it should be 

treated different from other beneficiaries to a common fund, 

we need only note that payment for litigation costs by the 

various beneficiaries is founded upon principles of equity. 

In enforcing this doctrine, equity demands that all parties 

receiving a benefit from the common fund be included in its 

application. 

Furthermore, there is no basis for applying DR2-107 

of the Canons of Professional Ethics as submitted by DNRC. 

This rule is concerned solely with the question of two 

lawyers dividing fees. It has no application to a situation where there is a court-appointed lead counsel to whom 

others may be required to pay compensation, all under the 

strict supervision and authority of the court. 

In regard to the final issue on appeal, in determining a reasonable fee in a given case, this Court has 

established the following guidelines: 

". . . The circumstances to be considered in 

determining compensation to be recovered are 
the amount and the character of the services 

rendered, the labor, time and trouble 

involved, the character and importance of the 

litigation in which services are rendered, 

the amount of money or the value of property 

to be affected, the professional skill and 

experience called for, the character and 

standing in their profession of the attorneys 

. . . The result secured by the services of 

the attorneys may be considered as an 

important element in determining their 

value." First Security Bank v. Tholkes 

(1976), 169 Mont. 422, 429-430, 547 P.2d 

1328, 1332; accord, Carkeek v. Ayer (1980), 

Mont. , 613 P.2d 1013, 1015, 37 

St.Rep. 1274, 1275-1276. 

The fee awarded in this instance was 11.1 percent of 

DNRC's recovery under the lead counsel order. This amount 

was granted only after extensive testimony relating to the 

above factors. It is true that this award exceeds the compensation paid by the other plaintiffs represented by lead 

counsel; but, it should be noted that these other parties 

agreed to a set amount without having to invoke the aid of 

the trial court. We can find no abuse of discretion. 

The judgment of the District Court appointing 

Williams as lead counsel and granting compensation is 

af f irmed. 

We concur: 

Chief Justice I 

&. Justice Daniel J. Shea dissents and will file a written 

dissent later.