No. 83-99 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1983 

LARRY NARUM, 

Plaintiff and Appellant, 

CITY OF BILLINGS; BARRY BERLINGER, 

and RICHARD WAGNER, 

Defendants, Respondents & Cross-appellants. 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone, 

The Honorable Diane G. Barz, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Patten & Renz; James A. Patten & John K. Addy, 

Billings, Montana 

For Respondents & Cross-Appellants: 

Peterson, Schofield & Leckie; Dane C. Schofield, 

Billings, Montana 

Crowley Law Firm; Randall Bishop, Billings, 

Montana 

Stephens & Cole; Robert L. Stephens, Billings, 

Montana 

Submitted on Briefs: October 6, 1983 

Decided: December 22, 1983 

Filed: DEG 2 2 1,983 

8 4?/ dLLkm, .- 

Clerk 
Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of 

the Court. 

Larry Narum filed a complaint June 9, 1981 in the 

Thirteenth Judicial District Court, County of Yellowstone, 

naming as defendants the City of Billings, Barry Beringer and 

Richard Wagner. The complaint requested judgment against the 

defendants for twice the alleged value of paint equipment 

Narum lost due to defendants1 actions, or $5,600 plus costs. 

Following a bench trial, it was found that: (1) Narum lost 

paint equipment valued at $1,843.70 due to the negligence of 

the City of Billings; (2) Beringer was unjustly enriched in 

the amount of $800 when he sold Narum's equipment to Wagner 

for that sum; and (3) Wagner was a bona fide purchaser for 

value without notice and entitled to retain the paint 

equipment. Judgment was entered November 19, 1982, limiting 

Narumls recovery to the actual value of the lost equipment. 

Beringer was ordered to pay Narum the $800 by which he was 

unjustly enriched and the City was ordered to pay Narum the 

remaining $1,043.70. 

A motion was subsequently filed by Narum requesting the 

trial court to reconsider its judgment insofar as it failed 

to award Narum double damages pursuant to section 70-5-209, 

MCA (1981). In addition, defendant Beringer filed a motion 

and supporting memorandum requesting the trial court to amend 

that portion of its judgment finding Beringer to have been 

unjustly enriched and ordering him to pay Narum $800. A 

hearing was held December 30, 1982, following which an order 

denying both motions was issued. 

A notice of appeal from both the judgment and the order 

was filed by Narum on January 26, 1983. Beringer and the 

City of Billings have filed cross appeals, Beringer 

requesting reconsideration of its motion to amend and the 

City requesting reconsideration of the judgment against it. 
Larry Narum was hired in 1979 to paint a warming house 

at Terry Park in Billings, Montana. One of Narum's 

employees completed the paint job on Friday, November 2, 

1979. He then, per instructions from Narum, left the spray 

painting equipment by the curb near the warming house to be 

picked up by Narum later that evening. 

Barry Beringer noticed the equipment on his way to 

dinner that evening. When the equipment was still there on 

his return, Beringer decided to call- the police. Beringer 

testified at trial that he presumed the equipment belonged to 

the City of Billings since it had obviously been used to 

paint a public building in a city park and that, as a 

concerned taxpayer, he notified the police of the equipment 

in order to prevent its theft. Beringer remained with the 

equipment until the police arrived, then told the 

investigating officer that if no one claimed the property, he 

would be interested in having it. The investigating officer 

told Beringer to check with the department in thirtv days and 

if no one had claimed the property, it would be his. 

The investigating officer's report of the incident 

contained the following information: 

1. Complainant reports he found several items near 

the warming house in Terry Park. 

2. Complainant also reports that someone had been 

painting the warming house and that the items 

probably belong to that person. 

3. The found items consist of: (1) a small prop 

air compressor; (2) an eight foot ladder; (3) three 

gallons of paint; (4) five gallon mixing cans; (5) 

one five gallon can containing an unknown chemical; 

(6) an extension cord; and (7) a paint scraper. 

Reringer checked with the police department after the 

thirty days had passed and was told by property Officer 

Stanley Frank that he would have to wait another sixty davs 

before he could claim the property. Beringer testified at 

trial that Officer Frank told him: 
"'Technically, we have to hold it for a year and 

then advertise it, and then we will give it to 

you. ' But he said, 'we don't have the budget and 

we don't have the place to store it, so we just 

wait 90 days. And then after 90 days, that allows 

people to go on vacation, extended vacation, and 

stuff.' And that's what he told me." Tr. p. 20. 

At the end of the ninety days, Beringer once again 

contacted Officer Frank and was told he could claim the 

property. Beringer and Officer Frank testified in detail 

concerning their conversation when Beringer picked up the 

property. 

BERINGER: 

"Q. Was there any time that anyone conveyed to you 

that the idea that there had been any report filed 

that this had been lost or was missing or had been 

stolen? 

"A. No. 

"Q. Did you have any idea that such a report had 

been filed? 

"A. No. 

"Q. Would it be fair to say that as far as you 

could tell from the information given to you by the 

police report that the property was abandoned? 

"A. Yeah. 

"Q. Did you ask whether you could sell the 

property? 

"A. I asked if it was mine, and I was told that it 

was. 

"Q. Prior to the time that property was delivered 

to you by the City, on February lst, 1980, did you 

think you had any rights whatsoever to that 

property? 

"A. Before February? 

"Q. Before it was delivered to you, did you 

consider it yours in any way? 

"A. No. 

"Q. Whose do you think it was? 

"A. The City's. (Tr. pp. 21, 22) 

OFFICER FRANK: 

"Q. Did you tell Mr. Beringer when he came to pick 

up the property that no claims had been filed on 

it? 
"A. I told him that I didn't receive one. 

"Q. So you indicated to him that it was unclaimed? 

"A. When I gave it to him. 

"Q. It would have been wrong to give it to him if 

you had knowledge that someone else owned it? 

"A. (Nods head affirmatively.) (Tr. p. 46) 

A witness to most of the conversation, David Webber, 

confirmed Beringer's testimony. 

Relying on Officer Frank's comments, Reringer sold the 

paint eqiupment to Richard Wagner for $800. Evidence showed 

the value of the equipment to be $1843.70. 

Meanwhile, Narum had telephoned the Billings Police 

Department on November 6, 1979 to report the theft of his 

property. A written report was to have been filed by an 

employee while Narum was on vacation. The employee failed to 

do so. Therefore, Narum's wife filed a written report with 

the police on December 21, 1979, more than thirty but less 

than ninety days after Beringer reported the property to the 

police. 

The property officer searched the department's computer 

twice during the initial thirty day period for a written 

report concerning the theft of the paint equipment. Despite 

retaining the property an additional sixty days, no other 

search of the stolen property reports was ever made. Thus, 

the property officer was unaware that the equipment had been 

reported as stolen when he released it to Beringer. 

At trial, Assistant Police Chief Sampson testified that 

it is the duty of the investigating officer to follow-up on 

stolen property reports (tr. p. 50) and the duty of the 

property officer to check the computer for any reported 

thefts of property meeting the description of that in his 

possession (tr. p. 61). Neither officer fulfilled his 

responsibilities regarding this property. 
Upon learning that the paint equipment he had purchased 

from Beringer was equipment previously reported stolen by 

Narum, Richard Wagner contacted Beringer and a meeting 

between a representative of the police department, Beringer, 

Narum and Wagner followed. However, the participants were 

unable to reach a mutually satisfying solution and this 

action was commenced. 

The issues presented by Narum in this appeal of the 

District Court's decision are: 

1. Whether the District Court erred in finding that the 

City of Rillings had been negligent, rather than grossly 

negligent, in its handling of Narum's property? 

2. Whether the District Court erred in holding that the 

City of Billings and Barry Beringer were separately liable 

rather than jointly and severally liable to Larry Narum for 

the loss of his property. 

3. Whether the District Court erred in failing to hold 

the finder (City of Billings) liable to Larry Narum for 

double the value of lost property, pursuant to section 

70-5-209, MCA (1981) . 

The issues raised on cross appeal are: 

1. Whether the District Court erred in entering 

judgment against defendant Reringer on the basis of unjust 

enrichment? 

2. Whether the District Court erred in holding that the 

City of Billings is liable to Larry Narum, or to any other 

party? 

The District Court erred in finding the Billings Police 

Department to be the finder of the lost paint equipment, 

pursuant to sections 70-5-101, et seq., MCA (1981). It is 

difficult to ascertain the intent of the 1895 legislature 

when it promulgated that chapter. However, it is highly 

unlikely that the legislative intent was for the chapter to 
apply to municipal police departments. Rather, we interpret 

that chapter to apply to the private citizen who finds 

property and chooses to take charge of the property in order 

to find its rightful owner. Section 70-5-102, MCA (1981). 

Barry Beringer became the statutory finder of the paint 

equipment by discovering the property and exerting control 

over it. If control was not exercised in reporting to the 

police it was exercised when Beringer ultimately obtained the 

subject equipment and sold it. Although Beringer may well 

have acted in good faith he became obligated to follow the 

statutory procedures for locating the true owner of the 

property. Since Beringer failed to follow those procedures 

and chose instead to treat the property as his own by selling 

it to an innocent third party, he became liable to the true 

owner of the property for its value. In addition, section 

70-5-209, MCA (1981), penalizes finders for failing to follow 

the statutorily mandated procedures by holding them liable to 

the true owner for double the value of the lost property. 

Therefore, since the value of the paint equipment was 

$1,843.70, Barry Beringer is liable to Larry Narum for 

$3,687.40. 

However, the evidence presented at trial supports the 

conclusions of the District Court that (1) "The City of 

Billings knew the true owner of the property as a result of 

information provided to the City by Narum on December 21st, 

1979, and therefore had a duty to use reasonable diligence" 

to return the property to the owner; (2) the City of Billings 

negligently dealt with the property while it was in its 

possession, and "such negligence was the proximate cause of 

the damages sustained by Plaintiff Narum"; and (3) Beringer 

justifiably relied on representations made to him by the City 

of Billings indicating that the property was his. These 

conclusions support a finding for Beringer on his cross-claim 
against the City of Billings, which asserts that the City's 

negligence wa.s the primary cause of Narum's loss. 

Since the District Court held the City of Billings to be 

the "finder" and thus liable to Narum, Beringer's cross-claim 

was not considered. We therefore remand this case to the 

District Court for judgment in Narum's favor for $3,687.40 

against Beringer and in Beringer's favor on his cross-claim 

against the City of Billings. In its judgment, the District 

Court shall find the City's liability to Beringer to be 

$2,887.40. That amount represents the total damages suffered 

by Beringer due to the Citv's negligence ($3,687.40), less 

the $800 which Beringer received when he sold the equipment. 

Remanded for entry of judgment in accordance with this 

opinion. 

We concur: 
IN THE SUPREME COURT OF THE STATE OF MONTANA 

No. 83-99 

LARRY NARUM , Plaintiff, Appellant 

and Cross Respondent, 

VS. 

CITY OF BILLINGS, BARRY 

BERINGER and RICHARD WAGNER 

Defendants, Respondents, 

and Cross Appellants. 

CLERK OF SUPREME COURT 

ORDER STATE OF MONTANA 

The Court has considered the petition for rehearing 

filed by Defendant, Barry Beringer, pursuant to Rule 34 

M.R.App.Civ.P. and finds that the original opinion should be 

modified by striking from the concluding paragraph the 

following language: 

"We therefore remand this case to the District 

Court for judgment in Narum's favor for $3,687.40 

a.gainst Beringer and in Beringer's favor on his 

cross-claim against the City of Billings. In its 

judgment, the District Court shall find the City's 

liability to Beringer to be $2,887.40. That 

amount represents the total damages suffered by 

Beringer due to the City' s negligence ($3,687.40) , less the $800 which Beringer received when he sold 

the equipment." 

We substitute therefore the following language: 

"We therefore remand this case to the District 

Court for a determination of damages in favor of 

Beringer on his cross-claim against the City of 

Billings. The District Court may consider any 

damages legally caused by the negligence of the 

City of Billings including attorneys fees and 

costs. " 

With this modification the petition for rehearing is 

denied. 

Justices