No. 84-434 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1985 

AAR CONSTRUCTION, INC., 

Plaintiff and Appellant, 

FERGUS ELECTRIC COOPERATIVE, 

INC., et al., 

Defendants and Pasponderits. 

APPEAL FROM: District Court of the Tenth Judicial District, 

In and for the County of Fergus, 

The Honorable Peter L. Rapkoch, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Glary & Clary, Great Falls, Nontana 

For Respondents: 

Ken Tolliver; Wright, Tolliver & Guthals, Billings, 

Montana 

Submitted on Briefs: Dec. 27, 1984 

Decided: February 15, 1985 

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

Court. 

AAR Construction, Inc., appeals from an order of the 

District Court, Tenth Judicial District, Fergus County, dated 

August 31, 1984, allowing C. E. Rookhuizen a set-off of 

$5,823.83 against a judgment theretofore granted by the 

District Court in favor of AAR Construction, Inc. and aga.inst 

C. E. Rookhuizen. 

AAR also appeals from the order of the District Court 

of the same date allowinq AAR the sum of $1,000 additional 

attorney fees. 

AAR's appeal raises two issues: 

1. Did the District Court have jurisdiction to grant a 

set-off against the judgment in this case? 

2. Did. the District Court abuse its discretion by 

awarding AAF attorney fees of only $1,000? 

On consideration of the issues, we affirm the District 

Court. 

C. E. Rookhuizen of Billings, Montana, was the general 

contractor for the construction of the Fergus Electric Cooperative office and warehouse in Lewistown, Montana. AAR 

Construction, Inc., was a subcontractor to Rookhuizen on the 

job. A dispute arose between the general contractor and the 

subcontractor as to sums claimed by the subcontractor for the 

original contract and extras performed by the subcontractor, 

and for credits claimed by the general contractor for work 

allegedly done by the general contractor that should have 

been done by the subcontractor. The parties were unable to 

resolve their differences and the case was tried and judgment 
entered. on September 8, 1983, which resul.ted in C. E. 

Rookhuizen being obligated to pay AAR a judgment of $13,319. 

During the course of construction, the subcontractor, 

AAR, failed to make payments to unions for fringe benefits 

due its workers and also failed to make payments to the 

Internal Revenue Service of withhol-dings from the workers. 

The failure to make th.e union payments resulted in both AAR 

Construction and. Rookhuizen being sued by Audit Services, 

Inc., for the collection of those unpaid fringe benefit 

costs. The Internal Revenue Service served notice of levy 

upon AAR, Rookhuizen, and their counsel for claimed unpaid 

tax payments owe6 by AAR. The notice of levy was served 

prior to any judgment being entered either in this case or 

the case brought by Audit Services, Inc., to recover the sums 

due under the union agreements. 

Regarding the union fringe benefit payments, AAR was 

primarily liable for the payments hecause they applied to 

AAR.'s workers, but Rookhuizen was secondarily liable if AAR 

did not pay by virtue of 5 39-3-706, MCA. In the cause 

brought by AAR against Rookhuizen the parties entered into a 

stipulation signed by their counsel and set forth in the 

pretrial order in that cause which. recited: 

"It is stipulated between the parties 

that AAR Construction, Inc., has not made 

payments to the Intermountain 

Ironworkers' Trust, Intermountain 

Ironworkers' Pension Trust, and the 

Intermountain Ironworkers' Training 

Trust. By reason of AAR's failure to 

make payments, a claim has been advanced 

by Audit Services, Inc. , the assignee of 

the Trust, against C. E. Rookhuizen in 

the amount $5,047.25. Jt is further 

stipulated that any sums actually paid by 

C. E. Rookhuizen by reason of the claim 

of the aqorementioned trusts as set forth 

Cause No. DV-82-775 [the number of the 

case in the Yellowstone County District 

Court] or in settlement thereof, in full 
or in part, shall be credited against any 

judgment in this case by AAR 

Construction, Inc., against C. E. 

Rookhuizen. '' 

In this case, the District Court i.n Ferqus County made 

findings of fact and conclusions of law on September 8, 1983. 

In finding of fact no. 21, the district judge referred to the 

failure of AAR to make the payments to the union trust. funds 

and that the fact of nonpayment was agreed upon by both of 

the parties. The court in conclusion of law no. 11 

determined that Rookhuizen was not entitled to reimbursement 

at that time because of lack of evidence of AAR's liability 

therefor and Rookhuizen's liabil-ity therefor. On September 

8, 1983, the court also entered judgment in the matter, in 

favor of AAR and against Rookhuizen in the net amount of 

$13,31.9.22, the court having all.owed set-offs to Rookhuizen 

for certain sums under the contract. 

Audit Services, Inc., obtained a judgment in the 

Yellowstone County District Court case against Rookhuizen on 

April 19, 1984, as a result of which Rookhuizen eventua3.l y 

made payment to Audit Services for a total of $5,823.83. On 

such payment Audit Services' judgment against Rookhuizen and 

AaR was satisfied in the Yellowstone County District Court. 

In the meantime, Rookhuizen ha6 appealed the judgment 

against him in favor of AAR entered in the Fergus County 

District Court to the Montana Supreme Court. He did nothing 

further to perfect his appeal and, after failing to meet 

deadlines given by this Court to proceed with appeal, in May 

of 1984 he advised the Montana Supreme Court that he did not 

wish to proceed with the appeal and the appeal. was dismissed 

with prejudice. Rookhuizen thereafter attempted to bring an 

interpleader action in the Yellowstone County District Court 
to determine which of various creditors of MR were entitled 

to funds held by C. E. Rookhuizen. Apparently that action 

aborted. 

With the dismissal of the appeal to the Montana Supreme 

Court, the judgment against Rookhuizen in the Fergus County 

District Court had become final. Nonethel.ess, on June 14, 

,984, Rookhuizen filed a verified motion for an ord-er 

granting set-off of the amount paid by Rookhuizen to Audit 

Services against the judgment in fa.vor of AAR. 

The District Court he1.d a telephone conference on the 

motion on June 28, 1984. The minutes of the court reflect 

that the telephone conference was held on that date and that 

the motion was denied. On July 13, 1984, Rookhuizen filed a 

verified motion for reconsideration of its motion for setoff. The District Court ordered a hearing on the motion for 

reconsidera-tion on July 30, 1984, and on August 31, 1984, the 

court signed its order, filed September 4, 1984, granting 

Rookhuizen set-off against the AAR judgment. The court also 

ordered the payment of $1,000 in attorney fees by Rookhuizen 

to AAR. 

In ma.king its order of August 31, 1984, the District 

Court said: 

"The parties had stipul ated before trial 

that any sums paid by Defendant n the 

Union Trust account would be credited 

against a judgment by Plaintiff against 

Defendant. That stipulation is not 

express]-y limited to, nor does it require, payments made before judgment 

herein, of which there were none, and 

there appears to be no compel-ling reason 

for so interpreting that Stjpulation. 

The Plaintiff will suffer no detriment by 

not doing so. 

"The plain fact of this case is that the 

Plaintiff has received the full benefit 

of Defendant's payment to Audit Services: 

it got one of its debts paid, a debt for 
the payment of which the creditor has 

security, a lien on this Court's judgment. That the debt to Audit Services 

may not have b.ad priority as against the 

IRS is not AAR's problem. That debt got 

paid and the Plaintiff is not entitled to 

double payment of that sum. 

"The Defendant's motion is in the nature 

of a Motion for the court to declare that 

the judgment herein has been partially 

satisfied by its payment to Audit 

Services. Upon reconsicieration of its 

previous Order, the Court agrees; the 

judgment has been partially so satisfied. 

"This was not a Rule 60 motion; there was 

no mistake, no error, in the judgment to 

be corrected. This Motion stand-s on the 

judgment as it is, as does this Order. 

The time constraints in Rules 59 and 60 

d.o not apply. This court therefore has 

jurisdiction to act herein by declaring 

that the judgment has been partiall-y 

satisfied by a-nd in the amount of Defendant's payment of $5,823.82." 

The written stipul-ation of AAR, through its counsel, is 

binding upon AAR. An attorney has authority to hind his 

client in any steps of an action or proceeding by his agreement filed with the clerk or entered upon the minutes of the 

court. Section 37-61-401(a), MCA. ~lthough an attorney does 

not have authority to compromise a controversy of his client, 

Harris v. Root (1903), 28 Mont. 159, 72 P. 429, the stipulation here did not involve a compromise. The full amount of 

AAR's responsi.bi1i.t~ to the union trust funds was determined 

by the District Court. Rookhuizen ' s liabil ity in that 

judgment was because of his secondary position with respect 

to the union fringe benefit payments. Rookhuizen has a right 

of indemnity for any payments made by him to satisfy the 

judgment which was primarily the responsibility of AAR. 

Section 28-11-301, MCA; Miller v. Melaney (1977), 172 Mont. 
Eexe, AAR had stipulated that any judgment it recovered 

against Rookhuizen would be credited to the extent that 

Rookhuizen paid Audit Services, Inc. After the judgment had 

become final, the only form the credit could take was that 

adopted by the District Court, a partial satisfaction of the 

judgment AAR held against Rookhuizen. When a judgment is 

partially satisfied in fact, or when, by agreement of the 

parties a judgment debtor is entitled to a credit against a 

judgm.ent, it is proper to apply the following provision of 

25-9-311, MCA: 

". . . Whenever a judgment is satisfied 

in fact otherwise than upon an execution, 

the party or attorney must give such 

acknowledgement or make such endorsement, 

and upon motion, the court may compel it 

or may order the entry of satisfaction to 

be made without it." 

The order of the District Court shows that the District 

Court merely held AAR to the stipulation entered into on its 

behalf through its counse3. and. the method employed by the 

District Court in ordering a partial satisfactj-on of the 

iudgment held by AAR agei-nst Rookhuizen was proper. See, 

Ga.lbreath v. Armstrong (1948), 121 Mont. 387, 193 ~.2d 630. 

The District Court was correct in stating that neither 

Rules 59 nor 60, M.R.Civ.P. apply to the proceedings in this 

case with respect to the satisfaction of a judgment. 

But kAR also complains that the motion for 

reconsideration was filed too late by Rookhuizen an6 therefore the District Court lost jurisdiction to enter the order 

granting partial satisfaction of the -judgment. 

In this case the District Court denied the motion for 

set-off on June 28, 1984. On July 13, Rookhuizen filed his 

verified motion for reconsideration. Thu.s fifteen days 

elapsed between the date that the court denied the first 
motion and Rookhuj~en filed his motion for reconsideration. 

Whether we regard the motion to reconsider in this case a 

motion to amend the court's judgment under Rule 52(b), 

M.R.Civ.P., a motion for new trial under Rule 59(b), 

M.R.Civ.P. or a motion for relief under Rule 60, M.R.Civ.P. 

each rule requires that the motion be made within ten days 

from the notice of entry of judgment. Under Rule 77(d), 

M.P,.Civ.P., it is the duty of the clerk of the district 

court, immediately upon the entry of an order or judgment, to 

give notice of the entry by mail in the manner provided for 

in Rule 5, M.R.Civ.P., upon each party who is not in defa-ult 

for failure to appear. In this case no notice of entry of 

the order by mail was served upon the parties. Therefore, 

the time for filing the motion for reconsideration by 

Rookhuizen had not commenced to run, and his motion for 

reconsideration was timely under the rules. To the same 

effect, see Matter of Estate of Holmes (1979), 183 Mont. 290, 

295, 599 P.2d 344, 347. (Note: The time limits for such 

motions have been amended since the appeal in this case. We 

apply the rules here as they existed at the time tha.t the 

District Court acted.) 

The next principal issue raised by AAR is that the 

District Court erred in only awarding $1,000 in attorney fees 

for the post-judgment work done by AAR's attorneys. 

The affidavit of AAR's attorney for additional fees 

indicated he had spent more than seventy-five houra since the 

entry of judgment and that his normal bil I ing rate was $75 

per hour. He also alleged he had incurred various additional 

expenses of $400. Be requested additional attorney fees of 

$5,000 and expenses of $400 with interest at the rate of 
$2.80 per day from the date of the levy of writ of execution 

against the Fergus Ccunty Elect-ric Co-op. 

The District Court found that a significant portion of 

the services provided by AAR's counsel appeared to have been 

in settlement negotiations, and other services were spent in 

trying to effect the collection of AAR's judgment. The 

District Court recognized that a considerable amount of 

unnecessary work was required by Rookhuizen's uncertainty in 

whet.her or not to appeal and to follow the rules of procedure 

closely. Accordingly, the court awarded $I-, 000 in attorney 

fees as a reasonable amount and $400 for expenses. 

The amount fixed 2s attorney fees by a court is largely 

discretionary and we will not disturb its iudament in the 

absence of an abuse of its djscretion. Carkeek v. Ayer 

(Mont. 1980), 613 P.2d 1013, 1015, 37 St.Rep. 1274, 1276. In 

determining whether the trial court abused its discretion, we 

look to the record to determine if the trial court, in the 

exercise of its discretion, acted arbitrarily without the 

employment of conscientious judgment or by exceeding the 

bounds of reason, in view of all the circumstances, ignoring 

recognized principles resulting in subst~ntial injustice. 

Porter v. Porter (1970) , 155 Mont. 451, 457, 473 P.2d 538, 

541. 

It appears here that the District Court considered the 

amount and character of the services rendered, the labor, 

time and trouble in~~olved, the character and importance of 

the litigation, the professional skill and experience called 

for, and the other circumstances set forth by us in First 

Security Bank of Rozeman v. Tholkes (19761, 169 Mont. 422, 

429, 430, 547 P.2d 1328, 1332. We find no abuse of the 
court's discretion in the award of attorney fees in this 

case. 

Affirmed. 

We Concur: