No. 96-049 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1996 

WILLIAM J. SEBENA, d/b/a LEWIS AND 

CLARK MOTEL OF BOZEMAN, MONTANA, 

Plaintiff and Appellant, 

APPEAL FROM: District Court of the First Judicial District, 

In and for the County of Lewis and Clark, 

The Honorable Thomas C. Honzel, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Kevin E. Vainio, Butte, Montana 

For Respondent: 

Barry G. O'Connell, Bozeman, Montana 

Filed: 

Submitted on Briefs: September 12, 1996 

Decided: December 19, 1996 
Chief Justice J. A. Turnage delivered the Opinion of the Court. 

William J. Sebena, d/b/a Lewis and Clark Motel of Bozeman, 

Montana, appeals a judgment of the First Judicial District Court, 

Lewis and Clark County. That court rejected Sebena's claim that 

the American Automobile Association (AAA) and AAA Montana intentionally interfered with the Lewis and Clark Motel's prospective 

business advantage by delisting the motel from the AAA travel 

directory. We affirm. 

The following issues are dispositive of this appeal: 

1. Whether the District Court erred in denying Sebena a jury 

trial. 

2. Whether the court erred in ruling that Sebena failed to 

prove damages. 

AAA is a nonprofit Connecticut corporation which maintains its 

principal place of business in Heathrow, Florida. There are 

approximately 36,000,OOO AAA members. AAA publishes regional 

TourBooks which provide information for its members on attractions, 

lodging, and restaurants in various regions of the United States. 

AAA Montana, a nonprofit Montana corporation and a member club of 

AAA, maintains its principal place of business in Helena, Montana. 

To be listed in a TourBook, an establishment must undergo an 

annual inspection and meet certain minimum standards. AAA ranks 

the motels listed in its TourBooks with one to five diamonds, in 

ascending order of quality. 

Beginning in 1978, the Lewis and Clark Motel was listed in 

AAA's annual TourBook for Montana, Idaho, and Wyoming. Until 1994, 

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it was listed as a three- or four-diamond establishment. However, 

beginning in 1987, AAA's annual inspectors noted deficiencies from 

AAA requirements in the Lewis and Clark Motel. Each year, Sebena 

was directed to correct these deficiencies to maintain the motel's 

rating. 

In March 1993, AAA advised Sebena that, based upon its most 

recent inspection, it would not list the Lewis and Clark Motel in 

its 1994 TourBook. Sebena subsequently brought this action, 

alleging that the defendants wrongfully and intentionally interfered with the motel's business relationships with traveling 

members of AAA and with the motel's expectancy of future economic 

benefit. 

After a two-day nonjury trial, the court issued findings, 

conclusions, and judgment for the defendants. Sebena appeals. 

ISSUE 1 

Did the District Court err in denying Sebena a jury trial? 

Sebena did not include a demand for jury trial in his 

complaint. He served his demand for jury trial as a separate 

document on June 16, 1994. The court granted the defendants' 

motion to strike the demand for jury trial on the basis that the 

demand was untimely. 

Rule 38(b), M.R.Civ.P., states: 

Any party may demand a trial by jury . . by serving 

upon the other parties a demand therefor in writing at 

any time after the commencement of the action and not 

later than 10 days after the service of the last pleadinsL.1 [Emphasis added. 1 

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Sebena's summons and complaint were served upon AAA on April 18, 

1994. AAA and AAA Montana served a joint answer to the complaint 

on May 26. Thereafter, on May 31, AAA Montana was served with the 

summons and complaint. 

The District Court ruled that Sebena's June 16 demand for jury 

trial was untimely based upon its determination that the defendants' joint answer served on May 26 was the last pleading served 

for purposes of Rule 38(b). Sebena argues that the last pleading 

served was, instead, the copy of the complaint served upon AAA 

Montana on May 31, with return of service filed on June 2. He 

maintains that with three additional days for service by mail 

pursuant to Rule 6(e), M.R.Civ.P., and excluding weekends pursuant 

to Rule 6(a), M.R.Civ.P., his time for filing a demand for jury 

trial did not expire until June 21, 1994. 

Citing Matter of Texas General Petroleum Corp. (5th Cir. 

1995), 52 F.3d 1330, Sebena concedes that in the "usual" case, 

service of the last pleading would be the service of the answer or 

a reply to a counterclaim. The pleadings in this action consist of 

the complaint and the answer. See Rule 7(a), M.R.Civ.P. 

The May 26 answer to Sebena's complaint clearly stated that it 

was filed by "the Defendants, American Automobile Association and 

AAA Montana." When this joint answer was filed, the District Court 

was vested with jurisdiction over both defendants, because 

"[jlurisdiction may be acquired by our courts over any person 

through service of process as herein provided; or by the voluntary 

appearance in an action by any person either personally, or through 

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an attorney[.l" Rule 4B(2), M.R.Civ.P. Service of the complaint 

upon AAA Montana after AAA Montana had already filed its answer to 

the complaint was thus superfluous for jurisdictional purposes. 

We conclude that when the joint answer was served on May 26, 

1994, the last pleading had been served for purposes of Rule 38(b), 

M.R.Civ.P. Allowing three additional days for mailing and 

excluding weekends, a timely demand for jury trial should have been 

filed by June 10, 1994. See Detienne Associates v. Montana Rail 

Link (1993), 261 Mont. 238, 862 P.2d 1106. 

Sebena's counsel admits that he overlooked the fact that the 

May 26 answer was a joint answer by both defendants. He argues, 

however, that even if his demand for jury trial was late, the 

District Court abused its discretion in denying him a jury trial as 

allowed under Rule 39(b), M.R.Civ.P. Under that Rule, a court may 

order a jury trial notwithstanding the parties' failure to timely 

demand one. 

Because there is no Montana case on point, we look to cases 

decided under the corresponding federal rule of civil procedure, 

after which Rule 39(b), M.R.Civ.P., was patterned. The inadequacy 

of attorney oversight fin failing to timely demand a jury trial as 

a reason for ordering a jury trial under Rule 39(b) has been 

clearly established in the federal courts. 

It is clear in the Ninth Circuit that a district 

court does not abuse its discretion in denying a request 

for a jury trial under Rule 39(b) when the only excuse 

for the failure to timely file a demand is oversight, 

inadvertence, neglect, or counsel's unfamiliarity with 

federal practice and procedure. . . . Indeed, Ninth 

Circuit authority suggests that the district judge may 

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actually abuse his discretion by granting relief in these 

circumstances. 

Robertson v. Equitable Life Assur. Sot. of U.S. (D.C. Cal. 1987), 

661 F.Supp. 416, 424-25, aff'd, 869 F.2d 1498 (1989). 

We hold that the District Court did not err in ruling that the 

time for demanding a jury trial pursuant to Rule 38(b), M.R.Civ.P., 

began to run upon the service of the defendants' joint answer to 

Sebena's complaint and expired before Sebena filed his demand for 

jury trial. We further hold that the District Court did not abuse 

its discretion by declining to order a jury trial under Rule 39(b), 

M.R.Civ.P. 

ISSUE 2 

Did the court err in ruling that Sebena failed to prove 

damages? 

To establish a case of intentional interference with prospective business advantage, a plaintiff must show acts which (1) were 

intentional and willful; (2) were calculated to cause damage to the 

plaintiff's business; (3) were done with unlawful purpose of 

causing damage or loss, without right or justifiable cause on the 

part of the actor; and (4) resulted in actual damages or loss. 

State Med. Oxygen v. Amer. Med. Oxygen (1988), 230 Mont. 456, 462, 

750 P.2d 1085, 1088-89. Damages must be proven by substantial 

evidence which is not the product of mere guess or speculation. 

Lens Const. Co. v. Cameron (1984), 207 Mont. 506, 511, 674 P.2d 

1101, 1103. 

Sebena argued that the defendants' failure to list his motel 

in the TourBook cost him guests and, therefore, money. His 

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evidence of damages consisted of his statement that the motel had 

a loss of 1,065 room rentals between 1993, the last year the motel 

was listed in the TourBook, and 1994, the first year it was not 

listed. He multiplied that number by a nightly room rental rate of 

$48.36 to arrive at a figure of $51,503.40 for his 1994 revenue 

loss from delisting. 

During cross-examination, Sebena and his daughter, the motel's 

general manager, both admitted that they maintained no records 

showing the number of room rentals generated through AAA. Sebena's 

daughter also admitted that additional motels built in Bozeman 

might have had an impact on the business of the Lewis and Clark 

Motel. Sebena's accountant similarly testified that he did not 

have any records on the percentage of the motel's business 

attributable to the AAA listing. The accountant further attested 

on cross-examination that no significant capital improvements had 

been made to the Lewis and Clark Motel between 1989 and 1993. 

In short, Sebena offered no concrete information on the 

percentage of his motel business which was attributable to the AAA 

listing. Nor did he offer expert testimony specifying the portion 

of loss of business, if any, which was attributable to delisting by 

AAA, or the portion of the claimed lost revenue representing lost 

profits. 

This Court has set forth the following rules pertaining to the 

recovery of lost profits: 

Damages for loss of profits may be awarded if not 

speculative. The rule that prohibits speculative profits 

does not apply to uncertainty as to the amount of such 

profits but to uncertainty or speculation as to whether 

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the loss of profits is the result of the wrong and 

whether such profit would have been derived at all. Once 

liability is shown, that is the certainty that the 

damages are caused by the breach, then loss of profits on 

a reasonable basis for computation and the best evidence 

available under the circumstances will support a reasonably close estimate of the loss by a District Court. But 

no damages are recoverable which are not clearly ascertainable both in nature and origin, and only profits 

which are reasonably certain may be awarded. 

Stensvad v. Miners & Merchants Bank, Etc. (1982), 196 Mont. 193, 

206, 640 P.2d 1303, 1310 (citations omitted). 

The District Court concluded that Sebena failed to show that 

he suffered any damages, based on the absence of records regarding 

the portion of the motel's business related to AAA and the absence 

of analysis by the accountant of lost profits relating to the 

delisting. We agree with the conclusion of the District Court. 

Sebena has also raised two other issues on appeal. One of 

them concerned the court's refusal to admit into evidence guests' 

comment cards about the motel, which he offered as evidence that 

delisting his motel was unjustified. The other issue Sebena raised 

was whether the court should have addressed a breach of contract 

claim which he asserted. Any claim for breach of contract, like 

the claim of intentional interference with prospective business 

advantage, would have required nonspeculative proof of damages. 

See Bolz v. Myers (1982), 200 Mont. 286, 300-01, 651 P.2d 606, 613- 

14. Given our holdings on the issues discussed above, we conclude 

that we need not further address these other two issues. 

Affirmed. 

, 

Chief Justice 
We concur: 

Justices 

9 
Justice Terry N. Trieweiler specially concurring in part and 

dissenting in part. 

I concur with the majority's conclusions that Sebena's demand 

for a jury trial was untimely pursuant to Rule 38(b), M.R.Civ.P., 

and that the District Court did not abuse its discretion when it 

declined to order a jury trial pursuant to Rule 39(b), M.R.Civ.P. 

I dissent from the majority's conclusion that Sebena failed to 

prove damages. 

The majority seems to conclude that because Sebena has no 

specific record of how many room rentals were directly attributable 

to his listing by AAA, and because there might have been other 

factors which also contributed to a decrease in his rental rate, he 

has not, as a matter of law, proven damages. However, in arriving 

at its conclusion, the majority has misapplied our decision in 

Stensvad v. Miners C? Merchants Bank of Roundup ( 19 8 2 ) , 19 6 Mont 19 3 , 6 4 0 P .2d 

1303. Pursuant to Stensvad, it is not the amount of damages which 

must be proven with certainty. It is the fact that damages have 

been sustained which must be proven with reasonable certainty. 

In this case, to conclude that there were no damages from 

being delisted by AFA is to ignore all of AAA's admissions in the 

form of promotional materials suggesting there is an economic 

advantage to those who are listed. For example, Exhibit 77 

admitted by the District Court includes testimonials from others 

listed by A?& who state that "[a] go-day tracking period revealed 

that 50 % of our business came from the AAA Tourbook" and that 

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"[wle feel that our AAA Tourbook ad accounts for about 50 % of our 

total business." 

Gene DeFrance is the former employee of the Montana Automobile 

Association who first approached Sebena about a AAA listing. He 

promoted the listing by telling Sebena how many members AAA had and 

how reliant they were on the tour book for information about 

accommodations. He testified that it was economically advantageous 

to be listed in the book. 

Lisa Sebena is the daughter of William Sebena, and at the time 

of trial had been the manager of the Lewis and Clark Motel for 

eight years. In that capacity, she worked in all aspects of the 

business and was familiar with the motel's volume of business, both 

while it was listed with AAA and after it was delisted. Lisa 

testified that prior to the delisting by AAA, close to sixty 

percent of the motel's business resulted from its inclusion in 

AAA's tour book. She testified that from her personal observations 

while working at the motel, there has been a loss of business 

directly attributable to having the motel removed from the tour 

book. She testified that many of the people who came to the motel 

based on a AAA listing walked in off the street, and that for them 

there would be no record of the fact that they came to the motel 

because of AAA. However, she also testified that because on 

occasion potential guests called and asked for the AAA rate and 

were told that they were no longer affiliated with AAA, she was 

able to definitely state that they lost business by the loss of 

their affiliation. 

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William Sebena was asked the following questions and gave the 

following answers: 

Q. Have you made an observation or a study of your 

business before when you were AAA affiliated, and your 

three and four-diamond listings in the tour book, as 

compared to what you're left with now? 

A. As compared to after we were deleted? 

Q. Right. 

A. Yes. 

Q- And what have been your observations with respect to 

that? 

. . 

Q. Tell me about your observations. What have you 

observed, what have you done to make these observations 

about your lessening of business? 

A. We went to our accounting records and compared 

figures. 

. 

Q. And what did you discover in making your comparison 

of before you were terminated from AAA and afterwards? 

A. I discovered that we were, even though we, in 1994, 

January and February, we are still listed in the current 

book, that we had a considerable loss in room rentals by 

the number of 1,065 

Q. . Can you compute a yearly loss for the year in 

1994? 

A. We averaged the cost of the 1993 rooms. 

Q. What was that average? 

A. We averaged $48 and some cents throughout the year. 

Q. YOU, in fact, figured $48.36; is that correct? 

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A. Yes. And then we multiplied it by those 1,065 rooms 

and arrived at a quite accurate figure at a loss. 

. . 

Q. In using those figures, can you tell us the amount 

of money that you lost during the 1994 calendar year? 

A. $48.36? 

Q. Right. 

A. $51,503.40. 

Steve Hamilton, who is a certified public accountant and has 

practiced in Montana since 1978, and was allowed by the District 

Court to testify as an expert witness, testified that he had been 

Sebena's accountant for seven or eight years at the time of trial. 

He testified that the method used by Sebena to calculate his annual 

loss from being delisted by AAA was reasonable in light of what he 

knew about the business's prior history and trends for other 

businesses in the Bozeman area. He also testified that as of 1993, 

Sebena had run a profitable business and that it would not have 

been unreasonable to expect him to continue operating the business 

in that fashion for an additional twenty years. 

If there was no economic advantage to being listed, then how 

could AAA charge, and why would Sebena and thousands of others pay 

to be listed? If there was an economic advantage to being listed, 

then there had to be an economic disadvantage from being delisted. 

1n sum, it was not speculative that damages had been sustained 

as a result of the fact that the Lewis and Clark Motel was excluded 

from AAA's Tourbook. Pursuant to our previous decisions, once the 

probability of damage has been shown, the loss of profits need only 

13 
be computed on the basis of the best evidence available. Sebena 

provided the best evidence available and the District Court had an 

obligation to arrive at some calculation of damages based on that 

evidence. 

Because I conclude that the District Court erred in its 

finding that no damages were sustained, I conclude that the 

District Court also erred when it failed to address the plaintiff's 

specific claim that the defendant breached an express contract with 

the plaintiff by excluding his business from the AAA Tourbook, in 

spite of his alleged efforts to improve the premises to the extent 

of his financial ability. Rule 52(a), M.R.Civ.P., provides in part 

as follows: "In all actions tried upon the facts without a jury or 

with an advisory jury, the court shall find the facts specially and 

state separately its conclusions of law thereon." 

In this case, the court made no finding that a contract did or 

did not exist, and therefore made no finding which resolved 

Sebena's allegation that AAA had breached its contract with him. 

The District Court did conclude that plaintiff failed to prove that 

AAA had acted arbitrarily, capriciously, or fraudulently when it 

delisted the motel, and further concluded that plaintiff had not 

proven interference with a prospective business advantage, but made 

no conclusions regarding the existence of or breach of a contract 

between the parties. 

Instead of entering findings or conclusions related to 

Sebena's contract claim, the District Court simply concluded that: 

14 
"Assuming AAA did do something wrong, Plaintiff has failed to show 

that he suffered any damages." 

For the reasons, and based on the facts set forth above, I 

conclude that plaintiff did offer proof of damages. The District 

Court's responsibility was to determine whether there had been a 

breach of contract and the amount of damages that had been proven. 

For these reasons, I dissent from the majority's conclusion 

that no damages were proven. I would reverse the judgment of the 

District Court and remand for findings and conclusions regarding 

Sebena's contract claim. If the District Court found and concluded 

that a contract existed between the parties and had been breached 

by AAA, then I conclude the District Court should have arrived at 

a calculation of damages sustained by Sebena as a result of &AA's 

contractual breach. 

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