NO. 90-029 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1990 

A. DEAN BOHNSACK and DEBRA STETLER 

BOHNSACK, husband and wife, 

Plaintiffs, Appellants and Respondents, -- 

- '*- 

.7 - (-, -- 

-vsHI-NOON PETROLEUM, INC., a Montana 

corporation, and MARJEAN CHARLES, 

Defendants, Appellants, and Respondents. f.-, 

-- .-- 

APPEAL FROM: District Court of the Fourth Judicial District, 

In and for the County of Missoula, 

The Honorable Ed McLean, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

William L. Crowley, Boone, Karlberg & Haddon, 

Missoula, Montana 

For Respondent: 

Brian J. Smith, Milodragovich, Dale & Dye, Missoula, 

Montana 

Milton Datsopoulos, Datsopoulos, MacDonald & Lind, 

Missoula, Montana 

Filed: 

Submitted on Briefs: April 12, 1990 

Decided: May 30, 1990 

0 
Justice Diane G. Barz delivered the Opinion of the Court. 

Hi-Noon Petroleum, Inc. (Hi-Noon) appeals from an order of the 

District Court of the Fourth Judicial District, Missoula County. 

The District Court granted Hi-Noon's motion for summary judgment, 

although it declined to award Hi-Noon its attorney's fees and 

costs. Plaintiffs below, Dean and Debra Bohnsack (Bohnsacks) filed 

a notice of appeal based on the District Court's denial of their 

motion for summary judgment. At the outset, we note counsel for 

the Bohnsacks improperly filed a notice of appeal rather than a 

cross-appeal. We will, however, treat Bohnsacks' appeal as a 

cross-appeal. We affirm in part and reverse and remand in part. 

Bohnsacks entered into a sub-lease and gasoline purchase 

agreement with Hi-Noon on October 1, 1986. Bohnsacks sub-leased 

a gasoline station located on Brooks Avenue in Missoula and agreed 

to purchase gasoline, diesel fuel and oil from Hi-Noon. The 

contract provided that ''payment for gasoline and diesel shall be 

net 7 days from date of delivery." The parties further agreed that 

Bohnsacks would not sell, assign or otherwise convey their interest 

absent Hi-Noon's consent. In an assignment executed in April, 

1987, Bohnsacks transferred their interest to Marjean Charles 

(Charles). Hi-Noon consented to the assignment, but, specifically 

did not release Bohnsacks from their obligation under the sublease and gasoline agreement. 

Hi-Noon made deliveries of gasoline and diesel to Charles for 

which she failed to pay within the seven day period provided by 

contract. Bohnsacks allege, and Hi-Noon appears to agree, that Hi2 
Noon continued to deliver gasoline and diesel to Charles after she 

failed to pay for delivered loads within the required time period. 

Charles ceased operations in March of 1988, and at that time owed 

Hi-Noon approximately $23,729 for gasoline, diesel and oil 

delivered to the station. Hi-Noon demanded payment on this account 

from Bohnsacks and refused to consent to their second assignment 

of the sub-lease and gasoline agreement to Ronald Malensek 

(Malensek) until Bohnsacks made payment arrangements. 

Malensek gave Bohnsacks a $20,000 promissory note bearing 11% 

interest and payable in installments of $485.26 per month as 

partial consideration for the assignment. Bohnsacks assigned both 

the note and the payments to Hi-Noon. The assignment, release and 

indemnity agreement executed by ~i-~oon, Bohnsacks and Malensek on 

March 31, 1988, provided as follows: 

In consideration of the foregoing assignment, 

Hi-Noon releases Bohnsack from any liability 

owing to Hi-Noon from Robert or Margean (sic) 

Charles and any other contractural (sic) 

liability to be performed by Bohnsack under 

the Asset Purchase Agreement between Bohnsack 

and Malensek. 

Bohnsacks filed suit against Hi-Noon and Charles on August 16, 

1988. Bohnsacks asserted in their complaint that Hi-Noon waived 

its recourse against them for payment of Charles' debt by failing 

to notify Bohnsacks of Charles' delinquency and by continuing to 

make deliveries after Charles did not pay promptly. Hi-Noon moved 

for summary judgment claiming the assignment, release and indemnity 

evidenced an accord and satisfaction between it and Bohnsacks. 

Bohnsacks also moved for summary judgment. After hearing on the 
parties ' respective motions for summary judgment on March 24, 1989, 

the District Court entered its opinion and order on May 15, 1989, 

holding there was an accord and satisfaction between Hi-Noon and 

Bohnsacks. 

Hi-Noon moved to amend the court's order to permit it to 

collect attorney's fees and for certification pursuant to Rule 

54 (b) , M.R.Civ.P. In an order dated July 17, 1989, the District 

Court denied both motions. Bohnsacks then moved for summary 

judgment against Charles. The District Court on October 31, 1989, 

ordered that those proceedings be stayed pending the outcome of 

Charles' bankruptcy case. Hi-Noon renewed its motion for 

certification and the District Court subsequently ordered 

certification and entered its final judgment. This appeal 

followed. 

The facts of this case are not in dispute, therefore the 

District Court properly granted summary judgment. Benson v. Pyfer 

(Mont. 1989), 783 P.2d 923, 924, 46 St.Rep 2033, 2035. Prior to 

Bohnsacks' assignment of their sub-lease to Malensek, they entered 

into an assignment, release and indemnity agreement whereby 

Bohnsacks assigned to Hi-Noon payments due them on a $20,000 

promissory note in satisfaction of the $23,729 debt owed by Charles 

to Hi-Noon for which Bohnsacks acted as guarantor. Bohnsacks argue 

they did not release their claims against Hi-Noon for wrongfully 

delivering gasoline to Charles despite Charles' failure to pay for 

loads previously delivered. 

Bohnsacks' argument is circular: Bohnsacks agreed to assign 
the $20,000 promissory note to Hi-~oon as payment for amounts owed 

Hi-Noon for gasoline delivered to Charles. Now Bohnsacks contend 

they may proceed against Hi-Noon for increasing Bohnsacks' exposure 

to liability under their assignment to Charles by delivering 

gasoline and not demanding payment. Hi-Noon's failure to terminate 

delivery or notify Bohnsacks would be a defense to Hi-Noon's claim 

against Bohnsacks. 

Section 28-1-1401, MCA, defines an accord as: 

[A]n agreement to accept in extinction of an 

obligation something different from or less 

than that to which the person agreeing to 

accept is entitled. 

Furthermore, ll[a]cceptance by the creditor of the 

consideration of an accord extinguishes the obligation and is 

called satisfaction." section 28-1-1402, MCA. Hi-Noon accepted 

$20,000 in settlement of a $23,729 debt. Clearly, Hi-Noon agreed 

to accept less than that to which it was entitled in extinction 

of Bohnsacks' debt. Once Hi-Noon accepted payment, the debt was 

extinguished by accord and satisfaction. The District Court 

properly found Bohnsacks' claims barred by accord and satisfaction. 

Section 28-3-704, MCA, provides as follows: 

Whenever, by virtue of the provisions of any 

contract or obligation in the nature of a 

contract . . . one party to such contract or 

obligation has an express right to recover 

attorney fees from any other party to the 

contract or obligation in the event the party 

having that right shall bring an action upon 

the contract or obligation, then in any action 

on such contract or obligation all parties to 

the contract or obligation shall be deemed to 

have the same right to recover attorney fees 

and the prevailing party in any such action, 

whether by virtue of the express contractual 
right or by virtue of this section, shall be 

entitled to recover his reasonable attorney 

fees from the losing party or parties. 

The Assignment, Release and ~ndemnity Agreement executed by the 

Bohnsacks and Hi-Noon contains the substance of the parties' accord 

and satisfaction and specifically provides for an award of 

attorney's fees to the prevailing party in the event of litigation. 

In light of that contractual agreement, the District Court erred 

in denying Hi-Noon recovery of its attorney's fees. We reverse and 

remand for an award of reasonable attorney's fees to Hi-Noon. 

Affirmed in part, reversed in part. 

We concur: 

&~.fl~~ Chief Justi 

rAk. J* 

Justice