No. 90-501 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1991 

JACK C. STIMAC, MICHAEL A. TEFFT, 

EDWARD C. PETERS, JOSEPH E. GASPAR, 

NANCI ELLEN GREEN, RANDY J. ARCHEY, 

JOSEPH M. McKAMEY, GEORGE L. DOMME, 

MICHAEL D. CROSS, and MICHAEL E. HEISLER, 

Plaintiffs and Respondents. 

THE STATE OF MONTANA, 

Defendant and Appellant. 

APPEAL FROM: District Court of the Eighth Judicial District, 

In and for the County of Cascade, 

The Honorable Thomas M. McKittrick, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

W. D. Hutchison, Assistant Attorney General, 

Helena, Montana 

For Respondent: 

Lawrence D. Anderson, Great Falls, Montana 

Filed: 

Submitted on Briefs: February 21, 1991 

Decided: June 3, 1991 
Justice William E. Hunt, Sr., delivered the opinion of the Court. 

Defendant, the State of Montana, appeals from an order of the 

District Court of the Eighth Judicial District, Cascade County, 

awarding an attorney's fee in accordance with the one-third 

contingent-fee agreement entered into between the plaintiffs and 

their attorney. We affirm. 

The sole issue raised on appeal is whether the District Court 

abused its discretion in awarding the full amount of the 

plaintiffs1 contingent-fee agreement as a reasonable attorneyls fee 

under § 39-3-214 (I), MCA. 

The plaintiffs are fire fighters employed by the State of 

Montana, Department of Military Affairs, and stationed at the 

Montana Air National Guard facilities located at the Great Falls 

International Airport. The building in which they are stationed 

is owned by the federal government. The equipment used by the 

plaintiffs in performing their duties is also owned by the federal 

government, but administered by the State. They are paid in part 

by the Great Falls International Airport Authority and in part by 

the federal government. The money providing their salaries is 

administered by the State. 

For years, the plaintiffs were required to work more than 

eight hours a day and 40 hours a week without receiving overtime 

compensation. The plaintiffs made a number of administrative 

inquiries concerning overtime pay, but because ofthe confusing and 
ambiguous relationship between the state, local, and federal bodies 

that employed and paid them, their inquiries were unsuccessful. 

Finally, the plaintiffs decided to hire an attorney. They 

consulted with two Great Falls practitioners who refused to take 

their case. They then contacted attorney Lawrence Anderson, who 

agreed to represent them. 

The plaintiffs met with their attorney prior to filing the 

case. At the meeting, the attorney warned the plaintiffs that 

their claims were speculative. He advised them that he would take 

the case for an hourly rate of $80 or for a contingent fee. 

Because none of the plaintiffs possessed sufficient discretionary 

income to pay the hourly rate, they agreed to the contingent-fee 

arrangement and signed contracts calling for payment of one-third 

of any settlement or judgment secured in their favor by the 

attorney. 

Six plaintiffs filed suit in December 1984. They were later 

joined by four others. As originally filed, the complaint alleged 

that the State violated § 39-3-405, MCA, by refusing to pay 

plaintiffs overtime compensation for work weeks in excess of 40 

hours per week, and 39-4-107, MCA, by requiring plaintiffs to 

work in excess of eight hours a day. Plaintiffs sought back pay, 

penalties, and attorney's fees. In 1988, the plaintiffs filed an 

amended complaint, adding an additional claim under the Fair Labor 

Standards Act. 
The parties pursued extensive discovery. The plaintiffs filed 

motions for summary judgment in June 1986 and again in August 1988. 

The State also moved for summary judgment in August 1988. The 

District Court denied the 1986 motion, but did not rule on the 1988 

motions. 

The action was set for trial three times. It was continued 

twice, once at the request of the State, and once due to a conflict 

in the court's calendar. The second continuance came only a few 

days before trial, after the plaintiffs had largely completed 

preparation for trial. 

Shortly thereafter, the parties settled the case. They filed 

a settlement proposal stipulating to entry of judgment three and 

one-half months later. Pursuant to the settlement, the State 

agreed to pay varying amounts to the individual plaintiffs, based 

on length of service and number of overtime hours worked. 

Altogether, the plaintiffs received a total of $367,559 in overtime 

and interest. The State also agreed to contribute retirement 

benefits according to the amount of overtime compensation due each 

plaintiff, and to deduct social security taxes from the overtime 

payments. The plaintiffs agreed to waive their claims for 

penalties under § 39-3-206, MCA. The parties agreed that the 

plaintiffs were entitled to reasonable costs and attorney's fees 

as provided in 5 39-3-214, MCA. However, they disputed the amount 

of the fees and agreed to litigate the issue. 
The District Court held hearings on the attorney's fee issue 

on March 28 and April 25, 1989. On June 19, 1990, the court issued 

findings of facts, conclusions of law, and order, finding that the 

contingent-fee agreement was reasonable and awarding fees equalling 

one-third of the overtime and interest award, one-third of the 

retirement benefits, and one-third of the social security 

contributions made by the State. The State appeals from this 

order. 

The State acknowledges that, under 5 39-3-214, MCA, and the 

terms of the settlement, the plaintiffs are entitled to an 

attorney's fee. It argues, however, that the District Court abused 

its discretion in awarding fees equalling the full amount of the 

one-third contingent-fee agreement. It contends that such an award 

was unreasonably large. 

A party who prevails in a wage-claim action shall be entitled 

to a reasonable attorney's fee. Section 39-3-214(1), MCA, provides 

as follows: 

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. 

The purpose of this statute is Ifto provide an employee who 

wins a judgment for wages due against an employer a vehicle by 

which to receive attorneys fees and thus be made who1e.I' Glaspey 

v. Workman, 230 Mont. 307, 309, 749 P.2d 1083, 1084 (1988) 
(Glaspey I). By passing the attorney's fee obligation to the 

employer, the employee's net award is preserved intact and is not 

eroded by the cost of litigation. 

In Glaspey v. Workman, 234 Mont. 374, 378, 763 P.2d 666, 668 

(1988) (Glaspey 11), we held that the district court must consider 

seven factors in determining whether an award of attorney's fees 

under B 39-3-214(1), MCA, is reasonable. The factors include: 

(1) [Tlhe amount and character of the services rendered; 

(2) the labor, time, and trouble involved; (3) the 

character and importance of the litigation in which the 

services were rendered; (4) the amount of money or the 

value of the property to be affected; (5) the professional skill and experience called for; (6) the character 

and standing in their profession of the attorneys; and 

(7) the result secured by the services of the attorneys. 

Glaspey 11, 234 Mont. at 378, 763 P.2d at 668. 

Glaspey I1 involved a wage-claim action in which the attorney 

charged an hourly rate. The present case, on the other hand, 

concerns a contingent-fee arrangement. The plaintiffs here argue 

that, when a case concerns a contingent-fee contract, the court 

should consider the factors enumerated in Wightv. Hughes Livestock 

Co., 204 Mont. 98, 114, 664 P.2d 303, 312 (1983), in addition to 

those set out in Glaspey 11. 

In Wisht, 204 Mont. at 114, 664 P.2d at 312, we held that, in 

workers' compensation cases, the district court should examine 

several factors in assessing the reasonableness of a contingentfee arrangement. These include: 

(1) The anticipated time and labor required to perform 

the legal service properly. 
(2) The novelty and difficulty of legal issues involved 

in the matter. 

(3) The fees customarily charged for similar legal 

services. 

(4) The possible total recovery if successful. 

(5) The time limitations imposed by the client or 

circumstances of the case. 

(6) The nature and length of the attorney-client 

relationship. 

(7) The experience, skill and reputation of the 

attorney. 

(8) The ability of the, client to pay for the legal 

services rendered. 

(9) The risk of no recovery. 

Wiqht, 204 Mont. at 114, 664 P.2d at 312 (quoting Clark v. Sage, 

629 P. 2d 657, 661 (Idaho 1981) ) . 

We also noted that another factor ''is the market value of the 

lawyer's services at the time and place involved. Wiqht, 204 

Mont. at 114, 664 P.2d at 312. 

The Glaspey I1 and Wiqht factors are quite similar. Wiqht 

simply adds elements pertaining to the market value of the 

attorney's services--the amount of fees customarily charged, the 

ability of the client to pay, and the risk of no recovery-- 

elements that are pertinent when considering the reasonableness of 

a contingent-fee agreement. As we have observed: 

Most of the [workers1 compensation] disability claimants 

have no other resources for the payment of fees. The 

contingency of compensation, whether it stems from an 

employment contract or results from the claimants [sic] 

indigency, is highly relevant in the appraisal of the 

reasonableness of any claim. The effective lawyer will 

not win all of his cases, and any determination of the 

reasonableness of his fees in those cases in which his 

client prevails must take account of the lawyer's risk 

of receiving nothing for his services. Charges on the 

basis of a minimal hourly rate are surely inappropriate 
for a lawyer who has performed creditably when payment 

of any fee is so uncertain. 

Wiqht, 204 Mont. at 110-11, 664 P.2d at 310 (quoting McKittrick v. 

Gardner, 378 F.2d 872, 875 (4th Cir. 1967)). 

We hold that the District Court should consider the following 

factors when assessing whether to award the full amount of the 

contingent-fee agreement as a reasonable attorney's fee under 

§ 39-3-214 (I), MCA: 

1. The novelty and difficulty of the legal and factual 

issues involved; 

2. The time and labor required to perform the legal service 

properly ; 

3. The character and importance of the litigation; 

4. The result secured by the attorney; 

5. The experience, skill, and reputation of the attorney; 

6. The fees customarily charged for similar legal services 

at the time and place where the services were rendered; 

7. The ability of the client to pay for the legal services 

rendered; and 

8. The risk of no recovery. 

Applying these factors to the present case, we conclude that 

the District Court did not abuse its discretion in awarding an 

attorney's fee equalling the full amount of the contingent-fee 

agreement. Under the circumstances, the fee was reasonable. 
1. The novelty and difficulty of the lesal and factual 

issues. This was not an ordinary wage-claim action. Rather, the 

case presented extremely novel and complex legal and factual 

issues. Because of the ambiguous relationship between the 

differing state, local, and federal agencies who employedthem, the 

plaintiffs failed to fall neatly within any statutory or regulatory 

scheme. The State vigorously asserted that the plaintiffs were 

exempted from Montana's statutes governing wages and overtime. It 

also claimed that the meal and sleep exemptions applied. These 

defenses raised both legal and factual issues that required 

analysis of time records, pay records, standing orders of the 

State, and daily logs. 

The complexities of the case were compounded by the fact that 

the attorney represented not one plaintiff, but ten. Each claim 

depended upon the length of service of each plaintiff as well as 

the number of overtime hours worked. 

In addition, while the lawsuit was pending, the United States 

Supreme Court decided Garcia v. San Antonio Metropolitan Transit 

Auth., 469 U.S. 528, 105 S.Ct. 1005, 83 L.Ed.2d 1016 (1985). 

Garcia created additional complications because of the conflicts 

between the Fair Labor Standards Act and the Montana wage and 

overtime statutes. 

2. The time and labor required. Because the case was so 

complex, the attorney was required to spend a great deal of time 

looking through documents and researching law. One of the 
plaintiffs1 expert witnesses, Doug Wold, who had experience in 

complex wage and hour litigation, testified that he had expended 

in excess of $42,000 in attorney's fees in a case involving three 

plaintiffs who sought overtime compensation covering a three and 

one-half year period. He testified that the present case was more 

complex by virtue of the greater number of plaintiffs and the 

longer period of time as well as the additional legal and factual 

issues involved. 

Although the plaintiffs1 attorney did not keep track of the 

number of hours expended on the case, he marshalled evidence 

demonstrating that the case was very time consuming. In addition 

to conducting extensive factual and legal research, the attorney 

vigorously prosecuted the action. He moved for summary judgment 

twice and defended against the State's motion for summary judgment 

once. He largely completed trial preparation, even though the case 

never went to trial. Once the parties agreed to settle the case, 

it took three and one-half months to reduce the settlement to a 

six-page stipulation for judgment. 

3. The character and importance ofthe litisation. There can 

be no doubt that the case was important. Indeed, by enacting a 

statute providing for attorney's fees to the successful litigant 

"[tlhe legislature has recognized the gravity of an employee's 

right to wages . . . .'I Glaspev 11, 234 Mont. at 378, 763 P.2d at 

668-69. Moreover, the case benefited not only the individual 

plaintiffs but other similarly situated fire fighters as well. The 
legislative appropriation funding the judgment provided benefits 

for fire fighters who did not participate in the lawsuit. 

4. The result secured. In the face of factual complexities, 

lack of legal precedent, and active defense by the State, the 

attorney managed to successfully settle the case. The plaintiffs 

received overtime and interest awards ranging from $10,461 to 

$62,434, as well as retirement benefits. Under the circumstances, 

the attorney secured excellent results for the plaintiffs. 

5. The experience, skill, and reputation of the attorney. 

Montana does not have a pool of lawyers available and experienced 

in handling this type of case. The plaintiffs1 attorney is one of 

the few in the state who handle complex wage and hour litigation. 

6. The fees customarily charaed. A one-third rate is 

universally charged in contingent-fee cases. In this lawsuit, it 

was probably a conservative rate as the case posed post-collection 

risks of funding dependent upon a legislative appropriation and the 

governorls approval. 

7. The ability of the client to pay. The plaintiffs did not 

have sufficient discretionary income to finance the case on an 

hourly fee basis. Furthermore, they were informed by the attorney 

that they were undertaking some amount of risk in pursuing their 

claims. The plaintiffs were both unable and unwilling to assume 

the economic risk of an hourly fee contract in the event of no 

recovery. 
8. The risk of no recovery. As noted above, the case 

presented novel legal theories with no established precedent. 

Before the plaintiffs1 present attorney took the case, it had been 

rejected by two others. Furthermore, the plaintiffs were faced 

with the additional risk of depending on an appropriation from the 

legislature for funding for their awards. The risks involved in 

the case justified the contingent-fee arrangement. 

The District Court issued detailed findings of fact, which are 

fully supported by the record. The court did not abuse its 

discretion in granting the plaintiffs a reasonable attorney's fee 

of one-third of the amount of settlement in accordance with the 

contingent-fee arrangement. 

Affirmed. 

We Concur: