No. 84-434 INTHE SUPREME COURT OF THE STATE OF MONTANA 1985

AAR CONSTRUCTION, INC., Plaintiff and Appellant,

FERGUS ELECTRIC COOPERATIVE, INC., etal., Defendants and Pasponderits.

APPEAL FROM: DistrictCourtof theTenthJudicial District, Inand for the Countyof Fergus, The HonorablePeter L. Rapkoch, Judge presiding.

COUNSEL OF RECORD:

For Appellant: Glary & Clary, GreatFalls, Nontana

For Respondents: Ken Tolliver; Wright, Tolliver & Guthals, Billings, Montana

Submittedon Briefs: Dec. 27, 1984 Decided: February 15, 1985

ClerkMr. 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 favorofAAR 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 theDistrictCourthave jurisdictionto grant a set-off against the judgment in this case? 2. Did. the District Court abuse its discretion by awardingAAF 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 subcontractoras 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 differencesand the casewas tried and judgmententered. 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.eunion 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 broughtby 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.'sworkers, 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 causewhich.recited: "It is stipulated between the parties that AAR Construction, Inc., hasnotmade 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 actuallypaid by C. E. Rookhuizen by reason of the claim of the aqorementioned trusts as set forth CauseNo. DV-82-775 [thenumber of the case in the Yellowstone County District Court] or in settlement thereof, in fullor inpart, 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 FerqusCounty made findingsof factand conclusionsof lawon September 8, 1983. In finding of fact no. 21,the district judge referred to the failure of AAR tomake 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 Rookhuizenwas not entitled to reimbursement at that time because of lack of evidence of AAR's liability therefor and Rookhuizen's liabil-itytherefor. 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 sumsunder the contract. Audit Services, Inc., obtained a judgment in the Yellowstone County District Court case againstRookhuizen on April 19, 1984, as a result of which Rookhuizen eventua3.ly made payment toAudit 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 1984he 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 Courttodetermine which of various creditorsof MRwere entitled to funds held by C. E. Rookhuizen. Apparently that action aborted. With thedismissal of theappeal totheMontana 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 toAudit Services against thejudgment infa.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 conferencewas held on that date and that the motion was denied. On July 13, 1984, Rookhuizen fileda verified motion for reconsideration of its motion for setoff. The DistrictCourt ordered a hearing on themotion for reconsidera-tionon July 30, 1984, and on August 31, 1984, the court signed its order, filed September 4, 1984, granting Rookhuizen set-off against theAAR judgment. The court also ordered the payment of $1,000 inattorney feesby Rookhuizen toAAR. In ma.king its order of August 31, 1984, the District Court said: "The parties had stipulated 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 tobe no compel-lingreason for so interpreting that Stjpulation. The Plaintiff willsufferno detrimentby not doing so. "The plain factof thiscase is thatthe Plaintiff has received the full benefit of Defendant's payment toAuditServices: it got one of itsdebts paid, a debt forthe payment of which the creditor has security, a lien on this Court's judgment. That the debt to Audit Services may not have b.adpriority as against the IRS is notAAR's problem. That debt got paid and the Plaintiff is not entitled to double payment of that sum. "TheDefendant's motion is in the nature of aMotion for the court to declarethat the judgment herein has been partially satisfied by its payment to Audit Services. Upon reconsicieration of its previous Order, the Court agrees; the judgmenthas been partially so satisfied. "Thiswas not a Rule 60motion; therewas no mistake, no error, in the judgment to be corrected. This Motion stand-son 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-ndin the amount of Defendant's payment of $5,823.82." Thewritten stipul-ationof 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 filedwith the clerk or entered upon the minutes of the court. Section 37-61-401(a),MCA. ~lthough an attorney does nothave authority to compromisea controversyofhis 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 liability in that judgmentwas because of his secondary position with respect to the union fringebenefitpayments. Rookhuizenhas 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, AARhad stipulated that any judgment it recovered against Rookhuizen would be credited to the extent that Rookhuizen paid Audit Services, Inc. After the judgmenthad 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 acknowledgementormake such endorsement, and upon motion, the courtmay compel it ormay order the entry of satisfactionto bemade without it." The order of the DistrictCourt shows that the District Courtmerely held AAR to the stipulationentered into on its behalf through its counse3. and.the method employed by the District Court in ordering a partial satisfactj-onof the iudgment held by AAR agei-nstRookhuizen was proper. See, Ga.lbreathv. 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

casewith respect to the satisfaction of a judgment. But kAR also complains that the motion for reconsiderationwas filed too late by Rookhuizen an6 therefore the District Court lost jurisdiction to enter the order grantingpartial 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 firstmotion and Rookhuj~enfiled 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, immediatelyupon 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, seeMatter of Estate of Holmes (1979), 183Mont. 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 Courterred in only awarding $1,000 in attorney fees for the post-judgment work doneby AAR's attorneys. The affidavit of AAR's attorney for additional fees indicated he had spent more than seventy-fivehoura since the entry of judgment and that his normal bil

### Iing rate was $75 per hour. He also allegedhe had incurredvarious 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-ricCo-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.herornot to appeal and to follow the rulesofprocedure closely. Accordingly, the court awarded $I-,000 in attorney feesasa reasonable amount and $400 for expenses. The amount fixed 2sattorney feesby 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 itsdiscretion,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, inview of all the circumstances, ignoring recognized principles resulting in subst~ntialinjustice. Porter v. Porter (1970)

## , 155 Mont. 451, 457, 473 P.2d 538, 541. It appears here that the DistrictCourt 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 thecourt's discretion in the award of attorney fees in this

case. Affirmed.

We Concur: