NO. 80-376 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1981 

MALAN F. JOHNSTON, 

Plaintiff and Appellant, 

-vsK & T MANUFACTURING, INC., 

Defendant and Respondent. 

Appeal from: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone, 

The Honorable Robert H. Wilson, Judge presiding. 

Counsel of Record: 

For Appellant: 

Calton Law Firm, Billings, Montana 

For Respondent : 

Woods and Moe, Billings, Montana 

Filed: 

Submitted on Briefs: January 14, 1981 

Decided: March 11, 1981. 

MAR I1 1%- 
Mr. Justice Fred J. Weber delivered the Opinion of the Court. 

Plaintiff Malan F. Johnston (Johnston) appeals from the 

decision of the District Court of the Thirteenth Judicial 

~istrict, Yel.lowstone County, denying his claim for wages, 

penalties, attorney fees and costs. We affirm the decision 

of the District Court. 

Johnston entered into an oral contract of employment 

with K & T Manufacturing, Inc. (K & T) , a Wyoming-based 

corporation, on November 7, 1978. Johnston was hired to fly 

K & T's executive jet airplane. There was no express term 

of employment. Incidental expenses incurred by Johnston in 

the performance of his duties were paid by Johnston, and he 

was reimbursed by K & T after he submitted expense receipts. 

Johnston submitted a set of periodic expense receipts total-ing 

$349.52 just prior to the termination of his employment. 

Johnston was fired on September 14, 1979. On September 15, 

1979, he received a check for the full amount of wages owed 

him by K & T. Five days later, September 20, Johnston filed 

suit against K & T. Johnston sued for $500 for unused 

vacation time, $720.67 for employment expenses, $1,000 in 

severance pay, $2,063.77 in statutory penalties for K & T's 

failure to pay money due, $2,167 in attorney fees, and costs 

of suit. On July 22, 1980, the District Court, sitting 

without a jury, found that Johnston's allegations were 

unsupported by sufficient credible evidence, and that neither 

party was entitled to attorney fees or costs. (K & T had 

counterclaimed for damages for Johnston's withholding of the 

keys to the airplane after his discharge.) The Court also 

found that at the time of his discharge Johnston was paid 

all sums due him from K & T except for the disputed expense 
claims which were paid on December 18, 1979. K & T paid 

Johnston $171.46 on that date. This was the portion of the 

expense receipts submitted by Johnston that K & T found to 

be reasonable. Johnston argues that as a result of the payment 

of the $171.46, K & T should be required to pay statutory 

penalties and attorney fees. 

Johnston's first issue is whether the District Court 

erred in not holding K & T liable for statutory penalties as 

a result of K & T's failure to pay wages and monies due. 

The evidence showed that on the day of Johnston's discharge 

K & T owed a then undetermined sum for expenses incurred and 

paid by Johnston. The evidence further showed that K & T 

paid $171.46 to Johnston with a December 18, 1979, check. 

The check bore the notation "full expenses due." Johnston 

claims that this payment was for "wages" as that term is 

defined by section 39-3-201(5), MCA, which states: 

"'Wages' includes any money due an employee from the 

employer or employers, whether to be paid by the 

hour, day, week, semimonthly, monthly or yearly and 

shall include bonus, piecework, tips and gratuities 

of any kind." 

Johnston argues that reimbursement was not made to him 

within six days as required under section 39-3-205, MCA, 

which establishes when wages are to be paid if an employee 

is separated from employment prior to payday. Johnston 

further contends that because reimbursement was not made 

within six days, the penalty of section 39-3-206, MCA, 

should have been imposed. That section in pertinent part 

provides: 

"Penalty for failure to pay wages at times specified in law . . . A penalty shall also be assessed 

against and paid by such employer and become due 

such employee as follows: a sum equivalent to 

the fixed amount of 5% of the wages due and unpaid 

shall be assessed for each day, except Sundays and 

legal holidays, upon which such failure continues 
after the day upon which such wages were due, except that such failure shall not be deemed to 

continue more than 20 days after the date such 

wages were due." 

We find that the $171.46 payment was not wages under section 

39-3-201(5), MCA, or section 39-3-206, MCA. Such payment 

was an "indemnification of employee" referred to in section 

39-2-701 (1) , MCA. There is no statutory penalty for the 

failure to indemnify an employee for expenditures covered by 

that section. We hold that the penalty for failure to pay 

wages under section 39-3-206, MCA, does not apply to the 

$171.46 payment. 

The next issue presented by Johnston is whether the 

trial court erred in not finding K & T liable for Johnston's 

attorney fees and costs under section 39-3-214, MCA: 

"Court costs and attorneys' fees. (1) Whenever 

it is necessary for the employee to enter or maintain a suit at law for the recovery or collection 

of wages due as provided for by this part, a resulting judgment must include a reasonable attorney's 

fee in favor of the successful party, to be taxed 

as part of the costs in the case. 

"(2) Any judgment for the plaintiff in a proceeding 

pursuant to this part must include all costs reasonably incurred in connection with the proceeding, 

including attorneys' fees." 

As previously stated, the $171.46 payment was not a payment 

for wages. In addition, Johnston did not obtain a judgment 

for wages due so as to trigger the statutory requirement for 

an award of reasonable attorney fees and costs. In fact 

there was no judgment for the plaintiff as required under 

the above code section. Johnston has failed to meet the 

statutory requirements for attorney fees or costs. 

The District Court decided against Johnston on both 

issues. The decision of the District Court is affirmed. 
We concur: 

'. Chief Justice