NO. 85-171 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1986 

WILD WEST MOTORS, INC., 

Plaintiff and Respondent, 

-vs- 

*WRCELLAMAE LINGLE I 

Defendant and Appellant, 

APPEAL FROM: District Court of the Eleventh Judicial District, 

In and for the County of Flathead, 

The Honorable Michael Keedy, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Hash, Jellison, O'Brien & Bartlett; James C. Bartlett, 

Kalispell, Montana 

For Respondent: 

Measure, Ogle & Ellingson; Jeffrey D. Ellingson, 

Kalispell, Montana 

Filed: 

Submitted on Briefs: June 28, 1985 

Decided: November 18, 1986 

Clerk 
Plr. Justice John C. Sheehy delivered the Opinion of the 

Court. 

In this cause, we determine that a prejudgment writ of 

attachment issued by the District Court, Eleventh Judicial 

District, Flathead County, was in error and we therefore 

vacate the same. We further determine that the possession by 

the attorney for Wild West Motors, Inc. of S10,000 due to 

Marcellamae Lingle "in trust" is in violation of the Canons 

of Professional Ethics, and we direct the immediate transfer 

of those funds by the attorney to Marcellamae Lingle. 

In a decree of dissolution of marriage between 

Marcellamae Lingle and Robert L. Lingle on July 29, 1980, in 

the same District Court, the separation and property 

settlement agreement between the married persons was 

incorporated as a part of the decree. Under the terms of the 

agreement, now decretal, Robert was to pay Marcellamae $200 

per month, continuing until such time as he paid "to wife the 

cash sum of $10,000." The cash payment of $10,000 was agreed 

to be a property division, apparently to be derived from the 

sale of marital real estate by the husband. It is 

specifically designated "not alimony or maintenance." 

When Robert had paid monthly payments amounting to 

approximately $10,000, he apparently thought that his total 

obligations under the decreed agreement were complete. 

Plarcellamae s attorney, however, insisted in writing that in 

addition to the monies already paid, Marcellamae was to 

receive a cash sum of $10,000 as a property division, and 

that until the cash payment was made by Rohert, the $200 per 

month payments continued. 
Robert, contending he did not understand that part of 

the property settlement a.greement, sought counsel other than 

the attorney who had represented him in the dissolution 

action. He retained Jeffrey D. Ellingson as his attorney on 

April 23, 1984. On Robert's behalf, Ellingson contacted both 

Robert's former attorney and the attorney for l\larcellamae. 

Marcellamae was adamant that she was entitled to the full 

amount of the cash payment and that the monthly payments 

continued until she received the cash payment. The 

malpractice carrier for Robert's former attorney denied any 

claim. 

In the meantime, in November, 1982, Robert Lingle, Jr. 

the son of Robert and Marcellamae, purchased under a contract 

and security agreement a 1983 Toyota 4x4 pickup. Marcellamae 

signed the contract and security agreement as a co-buyer, 

apparently in accommodation for her son. The vehicle was 

purchased at Wild West Motors, Inc. The purchasers under the 

contract did not make the payments as required, and the 

vehicle was repossessed and resold, resulting in a deficiency 

of $4,241..76 still owing on the contract. 

Ellingson had begun representing Wild West Motors, Inc. 

on January 19, 1984. On August 22, 1984, he became aware of 

the claim of Wild West Motors, Inc. against Marcellamae for 

the deficiency under the contract. Ellingson, as attorney 

for Wild West Motors, Inc., undertook to collect the 

deficiency from Marcellamae. It appears indirectly from the 

papers here filed that Robert Lingle, Jr. was probably 

judgment-proof . 

On April 23, 1984, therefore, under the facts of this 

case, Ellingson was representing Wild West Plotors, Inc. for 

its claim against Marcellamae arising out of the purchase of 
the Toyota vehicle. He was also representing Robert Lingle, 

Sr. in the cash payment dispute arising out of the marital 

dissolution between Robert Lingle, Sr. and Marcellamae 

Lingle. 

In Ellingson's own words, this is what happened: 

On August 28, 1984, I met with Bob Sr. He had 

decided at that time to pay over the additional 

$10,000 payment to Bartlett [Marcell-amae's 

attorney] under the terms of the property 

settlement agreement with Marcellamae. He decided 

not to pursue any further claim against either 

Marcellamae or [the former attorney]. I told him 

at that meeting that I had been approached by Wild 

West to bring a claim against his son, Bob Jr. and 

his former wife, Marcellamae, as joint and several 

obligors for the deficiency. I told him that the 

claim would be for approximately $5,000. I asked 

him whether he had any objections to my bringing 

the claim against his former wife, Marcellamae. 

Rob Sr. stated that he had no such objection. By 

that time he was quite angry with his former wife 

and thinking that she was not deserving of the 

additional $10,000. 

It was at that meeting of August 28, 1984 that I 

first discussed with Bob Sr. the possibility of 

attaching the $10,000 payment in order to pay off 

my other client, Wild West. I told Bob Sr. that 

Wild West had agreed not to go after Bob Jr. for 

repayment if they could collect from Marcellamae. 

Bob Sr. was very pleased with the idea of having 

some of the $10,000 pay off his son's debt rather 

than go to his former wife. His only concern was 

that he not be held liable for any further payment 

after paying the $10,000 into my trust account. I 

advised him that I would discuss the matter with 

Dugan Anderson of Wild West and. get back to Bob Sr. 

I called Dugan Anderson also on August 28, 1984, 

and explained the situation to him. I advised Mr. 

Anderson that Bob Sr. would allow the attachment of 

the $10,000 so long as he was held harmless from 

any other claims as a result of that attachment. 

Mr. Anderson agreed to such an indemnification 

agreement and asked me to draft the appropriate 

documents. Dugan Anderson told me that Bob Jr. was 

apparently insolvent and that Wild West's only 

possible means of collecting was against 

Marcellamae. Marcellamae also appeared to be 

judgment proof in tha-t her only substantial asset 

was her home, protected by a homestead exemption. 

It appeared, therefore, that the only way Wild West 

would be able to recover the deficiency would be by 

attachment of the $10,000 from Bob Sr. to 

Marcellamae. 
Bob Sr. deposited $10,000 into my trust account on 

August 31, 1984. 

Robert Lingle, Sr. and his wife, Ardeth Lingle, on 

August 31, 1984 signed the agreement with Wild West Motors, 

Inc. and Wild West signed the same on September 5, 1984. By 

its terms, Lingle paid $10,000 to Ellingson to be held in 

trust by him until such times as the funds "are duly attached 

through proper legal process or until Wild West Motors, Inc. 

directs Jeffrey D. Ellingson to pay all or any of such funds 

to Marcellamae Lingle in full satisfaction of the above 

described decree of dissolution." The agreement further 

provided that Wild West Motors, Inc. would pay the $200 per 

month to Marcellamae during the pendency of the agreement 

until payment to Marcellamae was complete. Wild West was 

granted a lien in the $10,000 for any payments made by it. 

In a further letter to Robert Lingle, Sr., on September 

4, 1984, Ellingson made clear that by the execution of the 

agreement with Wild West Motors, Robert Lingle was to be 

fully indemnified by Wild West Motors from any further loss 

or claim which Marcellamae might make against him. 

On October 24, 1-984, Wild West Motors, Inc. filed suit 

against Marcellamae Lingle for the deficiency arising out of 

the purchase of the Toyota vehicle. On the same date, 

Ellingson, as attorney for Wild West Motors, Inc. filed a 

motion for a prejudgment writ of attachment of $6,000 of the 

monies now held in trust by him, as attorney for Robert 

Lingle, Sr. After briefs and hearing, the District Court 

ordered a prejudgment writ of attachment against the "trust" 

funds. By stipulation the funds have been placed in an 

interest-bearing account awaiting the final disposition of 

the matter by the courts. 
Marcellamae appealed to this Court from the prejudgment 

writ of attachment. She contends for various reasons that 

the writ was issued in error, including her contention that 

the son, Robert Lingle, Jr. had signed a promissory note 

after his default for the amount of the deficiency which 

constituted a novation. Wild West Motors, Inc. has responded 

that the writ of attachment was properly issued; that the 

monies impounded are a debt due to Marcellamae; and that no 

novation arose because of the promissory note. 

Upon examination of the matter on appeal, this Court 

determined that further findings of fact were necessary from 

the District Court. Accordingly, we remanded to the District 

Court for a full determination relating to the facts 

concerning the property settlement agreement, and 

particularly the attorney-client relationships that existed 

between Wild West Motors, Inc., Robert Lingle, Sr., and 

Jeffrey D. Ellingson. The above statement of facts reflects 

those findings . 

The findings of the District Court in answer to our 

remand came to us on March 1, 1986. The District Court found 

that since Ellingson had kept Wild West Motors, Inc. and 

Robert Lingle, Sr. fully informed of all risks and advantages 

of the attachment of the said $10,000 and since it was in 

both parties' interests to have the funds attached from 

Ellingson's trust account, there was no impropriety on 

Ellingson's part during the course of these events. The 

court found that Robert Lingle, Sr. had requested the 

attachment to be made, was agreeable to the attachment in 

order to have his son's debt paid by his former wife and was 

apparently more than happy to have the funds attached, if 

they did not go to his former wife, and the credit for such 
"funds did clear off Robert Lingle, Sr.'s son's debt with 

Wild West Motors." 

The District Court apparently judged Ellingson's 

professional conduct under Rules 1.7 and 1.8 of the Rules of 

Professional Conduct relating to conflict of interest. 

Ellingson did, in truth, reveal to his clients, Wild West 

Motors, Inc. and Robert Lingle, Sr. all of the facts relating 

to the transaction. Their interests were not 

adverse: Robert Lingle, Sr. could save his son from an 

unpaid judgment, and at the same time cause a reduction of 

the monies he had agreed to pay Marcellamae. Wild West 

Motors, Inc . was assured of collecting a deficiency it might 

not otherwise get. 

There is, however, another Rule of Professional Conduct 

against wh.ich Ellingson's actions must be weighed. Rule 1.15 

of the Rules of Professional Conduct provides in (b): 

Upon receiving funds or other property in which a 

client or third person has an interest, a lawyer 

shall promptly notify the client or third person. 

Except as stated in this Rul-e or otherwise 

permitted by law or by agreement with the client, a 

lawyer shall promptly deliver to the client or 

third person any funds or other property that the 

client or third person is entitled to receive and, 

upon request by the client or third person, shall 

promptly render a full accounting regarding such 

property. 

Ellingson's duty under the foregoing rule was upon 

receiving the monies in trust for Marcellamae to deliver the 

monies to her promptly. Ellingson's client, Robert Lingle, 

Sr. owed those monies to Marcellamae, in a marital matter 

entirely separate from the vehicle purchase. Ellingson could 

not properly "by agreement with his client" frustrate the 

payment to Marcellamae. If his agreement with Robert Lingle, 

Sr. interfered with his duty of prompt payment as trustee, 

Ellingson as an attorney should not have accepted the trust. 
Having accepted the money in trust, it was his duty to 

transmit it promptly to Marcellamae. Instead he withheld the 

funds from Marcellamae from August 31, 1984, when he received 

the funds in trust, to March 8, 1985, when the prejudgment 

writ of attachment was ordered.. The distribution of funds to 

Marcellamae is still subject to his signature and control 

today. 

Und.er Rule 4.4 of the Rules of Professional Conduct, it 

is stated: 

In representing a client, a 1-awyer shall not use 

means that have no substantial purpose other than 

to embarrass, delay, or burden a third person,. . . 

The prejudgment writ of attachment issued by the 

District Court was in error. Ellingson admits he holds the 

money ''in trust." A voluntary trust is created when the 

trustor indicates with reasonable certainty the subject, 

purpose and beneficiary of the trust. Section 72-20-108, 

MCA. The subject of this trust was the $10,000; the purpose 

of the trust was to satisfy Robert Lingle, Sr. 's contractual 

obligation to Marcellamae; and Marcellamae was the 

beneficiary of the trust. In all matters concerning this 

trust, Ellingson was bound to act in good faith toward his 

beneficiary and not to obtain any advantage therein over 

Marcellamae by the slightest adverse pressure of any kind. 

Section 72-20-201, MCA. He was prohibited from using or 

dealing with the trust property for his own benefit or for 

any other purpose not connected with the trust in any manner. 

Section 72-20-203, MCA. The prejudgment writ of atta.chment 

order issued by the District Court included attorney fees for 

Ellingson's firm of $734.35. 

When a party undertakes the obligation of a trustee to 

receive money or property for transfer to another, he takes 
with it the duty of undivided loyalty to the beneficiary of 

the trust. The undivided loyalty of a trustee is jealously 

insisted on by the courts which require a standard with a 

"punctilio of an honor the most sensitive." Meinhard v. 

Salmon (N.Y. 1928), 164 N.E. 545. A trustee must act with 

the utmost good faith towards the beneficiary, Campbell v. 

U.S. (9th Cir. 1926), 12 F.2d 873, and may not act in his own 

interest, or in the interest of a third person. Restatement 

2d., Trusts, S 170(1). Upon development of an irreconcilable 

conflict between self-interest and fiduciary responsibility, 

the trustee has a choice of subordinating his self-interest 

or resigning his trust. A trustee may not deal with himself 

as an individual concerning the trust funds for any purpose 

not connected with the trust. In re Al.lard Guardianship 

(1914), 49 Mont. 219, 141 P. 661. Even though here the 

trustor, Robert Lingle, Sr., authorized the self-dealing of 

the trustee, Ellingson as trustee was required to renounce 

all self-interest and to act in finest loyalty to the 

beneficiary within the terms of the trust. 76 Am.Jur.2d 

Trusts, 538-539, S 319. If the terms of the trust make 

1-oyalty to the beneficiary impossible, the trustee should 

decline the trust. 

There was a route open to Wild West Motors, Inc. which 

might have brought about a prejudgment attachment of the 

$10,000 payment. Section 27-18-405, MCA, provides for the 

attachment of debts or credits in the possessi.on of a third 

person. Robert Lingle, Sr.'s contractual debt to Marcellamae 

was attachable, certainly before the transfer of the funds in 

trust to Ellingson. Once Ellingson received in trust 

possession of the legal payment for transfer to Marcellamae, 
his trust relationship barred his acting in any way 

disadvantageously to Marcellamae. 

The prejudgment writ of attachment issued in this cause 

in the District Court is hereby vacated and set aside. 

Jeffrey D. Ellingson, as an officer of this Court, is hereby 

directed to pay over to Marcellamae, through her attorney, 

the full amount of $10,000, plus any accrued interest 

thereon. Because this Court was not aware that the order of 

the District Court in answer to our remand was on file in 

this Court from March 1, 1986 through October 1, 1986, the 

monthly payments to Marcellamae which may otherwise be due 

for that period are herewith excused. Remittitur of this 

cause shall occur forthwith. 

/ " 

\ -. A . .- Justice k:, ,&ldJJ~ 

We Concur: 

t 

Justices