NO. 92-118 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1992 

PAT M. GOODOVER, 

Plaintiff and Respondent, 

-vsLINDEY'S INC., and the ESTATE 

OF WILLIAM C. FORREST, deceased, DEC 10 2992 

and the unknown heirs and unknown I 6: .; 

devisees of any Defendant above- Ld ._,. ?,;..;ti ri..iinamed who may be deceased; et al., CLERK OF ~i.ii+lZ.t:Z COURX 

STATE OF I>'ii)l<l&iU& 

Defendants and Appellants. 

APP EAL FROM: District Court of the Fourth Judicial District, 

In and for the County of Missoula, 

The Honorable Jack L. Green, Judge presiding. 

COUNSEL OF RECORD: 

For Appellants: 

Paul Neal Cooley, Skelton & Cooley, Missoula, 

Montana 

For Respondent: 

John Larson, Attorney at Law, Missoula, Montana 

Jerome T. Loendorf, Harrison, Loendorf & Poston, 

Helena, Montana 

Filed: 

Submitted on Briefs: September 24, 1992 

Decided: December 10, 1992 

Clerk 
Justice Karla M. Gray delivered the Opinion of the Court. 

Appellant Lindey's, Inc. appeals from an order of the District 

Court of the Fourth Judicial District, Missoula County, awarding 

damages for loss of use of property, supplemental relief, costs and 

attorney's fees. Lindey's also appeals from a subsequent order 

setting the amount of attorney's fees and costs. We affirm in part 

and reverse in part. 

Appellant presents fourteen issues on appeal. We consolidate 

these issues as follows: 

1.) Did the District Court err in denying Lindeyls request 

for a jury trial on the issue of damages? 

2.) Did the District Court err in its award of damages to 

enforce the 1987 determination of the boundary between Lots 1 and 

2 ? 

3.) Did the District Court err in ordering Lindey's to pay 

for the transcription of a video-taped deposition? 

4.) Did the District Court err in admitting hearsay evidence 

of a reduction in the taxable value of Goodover's property? 

5.) Can Lindey's raise issues that were raised or should have 

been raised in an earlier appeal? 

6. ) Did the District Court err in awarding costs to Goodover? 

7.) Did the District Court err in awarding attorney Is fees to 

Goodover? 

The case before us is the third appeal stemming from a 

protracted and bitter boundary dispute between two property owners 

in Seeley Lake. The facts regarding the earlier stages of the 
litigation are detailed in Goodover v. Lindey's, Inc. (1988), 232 

Mont. 302, 757 P.2d 1290 [Goodover I] and Goodover v. Lindey's, 

Inc. (1990), 246 Mont. 80, 802 P.2d 1258 [Goodover 111. Additional 

facts will be set forth as appropriate in the discussion of the 

issues. Briefly, respondent Pat M. Goodover (Goodover) owns Lot 2 

of the Seeley Lake Shore Sites in Missoula County. Appellant 

Lindey's, Inc., (Lindey's) owns adjoining Lot 1. In 1984, Goodover 

filed an action for quiet title and declaratory judgment to locate 

the disputed northeast corner marker of the lots. After a bench 

trial in 1987, the District Court issued findings of fact, 

conclusions of law and judgment which established the boundary 

line. The court also bifurcated the issue of damages for later 

determination. This Court affirmed in Goodover I. Shortly before 

the 1987 trial, Lindey's constructed a restroom facility and 

installed two underground fuel storage tanks in the disputed area. 

After we affirmed the boundary determination, it was clear that the 

restroom and a fence encroached on Goodover's property; although 

the storage tanks lay below the surface, the position of the air 

vents indicated an additional encroachment. 

After failed negotiations to remove the encroachments, 

Goodover moved the court for an order requiring Lindey's to show 

cause why it should not be compelled to remove the encroachment. 

Following a hearing, the District Court ordered Lindey's to move 

the restroom at least three feet from the boundary and to locate 

the underground storage tanks. It also expressly reserved 

jurisdiction over the issue of damages. Lindey's appealed the 

District court's jurisdiction to fashion such supplemental relief. 
The District Court established a $5,000 bond on appeal to satisfy 

any damages resulting from Lindey's encroachments. 

On December 18, 1990, this Court affirmed the District Court's 

decision on supplemental relief in Goodover 11. After the parties 

received that decision, Goodover promptly filed a motion for 

forfeiture of the appeal bond. 

In March of 1991, the District Court ordered Lindey's to 

submit a work plan detailing the removal of the restroom and the 

location of the underground storage tanks and set a July 20, 1991, 

deadline for all work to be completed. Lindey's submittedareport 

locating the tanks, finding them within three feet of the 

established boundary. On July 24, 1991, Lindey's moved the 

restroom, but left the concrete foundation encroaching on 

Goodover's property. 

After numerous continuances, the District Court held a hearing 

on damages on August 2, 1991. On August 5, 1991, Goodover filed a 

petition for removal of the tanks, asserting that although they did 

not lie on Goodover's property, they violated local fire codes 

requiring underground storage tanks to be set back three feet from 

any boundary. On January 2, 1992, the District Court entered 

findings of fact, conclusions of law and order on damages. 

Finally, on February 25, 1992, the District Court ordered Lindey's 

to pay Goodover $10,761.86 in attorney's fees and $524.45 in costs. 

Lindey's appeals from both orders. 

I. 

Did the District Court err in denying Lindey's request for a 

jury trial on the issue of damages? 
Goodover initially filed an action for quiet title and 

declaratory judgment to locate the boundary between the lots. In 

his second amended complaint, Goodover added a prayer for damages 

of $500. In answering the second amended complaint on July 30, 

1985, Lindeyqs did not request a jury trial. Instead, it requested 

a jury trial in its response to Goodover's motion to forfeit the 

appeal bond on January 25, 1991, nearly six years later. The 

District Court denied Lindeyfs request for a jury trial. 

Lindeyts argues that because Goodoverfs second amended 

complaint did not pray for damages over $500 (as were eventually 

awarded) , it had no notice of the potential for larger damages. 

Therefore, it argues that it was unaware of the need to request a 

jury trial in its answer to the second amended complaint, 

violation of its due process rights. We disagree. 

Although Lindeyts claims it had no notice of the potential for 

greater damages, each count of the second amended complaint 

contains a request for "such other and further relief as the court 

may seem [sic] appropriate. lt Furthermore, ~indey's cites no 

authority for its argument. Rule 38(b) of the Montana Rules of 

Civil Procedure clearly provides: 

Any party may demand a trial by jury of any issue triable 

by right by a jury by sewing 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 pleading directed to such 

issue. 

Lindeyts should have demanded a jury trial in its answer to the 

second amended complaint. Failure to serve this demand constitutes 

a waiver of trial by jury. Rule 38 (d) , M.R.civ.P. Lindeyts waived 
its right to a jury trial by failing to comply with the 

requirements of Rule 38(b) . 

Lindey's also argues that Goodover should have been required 

to amend his complaint to request larger damages, thereby giving 

Lindey's the opportunity to request a jury trial. This argument is 

without merit, because even if Goodover had amended the complaint 

to include a request for more money damages and coercive relief, 

Lindey's previous waiver of a trial by jury would not have been 

revoked. Rule 38(d), M.R.Civ.P., provides in pertinent part: 

A waiver of trial by jury is not revoked by an amendment 

of a pleading asserting only a claim or defense arising 

out of the conduct, transaction, or occurrence set forth 

or attempted to be set forth in the original pleading. 

Each damage claim that Lindey's finds objectionable arose out of 

the same occurrence in the second amended complaint, the disputed 

boundary between Lots 1 and 2. The District Court did not err in 

denying Lindey's untimely motion for a trial by jury. 

11. 

Did the District Court err in its award of damages to enforce 

the 1987 determination of the boundary between Lots 1 and 2? 

At the hearing on damages, Goodover called Ken Hayes, an area 

realtor, to testify as an expert witness. Hayes testified that the 

value of Goodover's lot was $100,000 and the rental value of the 

lot during the rental season was $350 per week. He also testified 

that the presence of the encroachments decreased the value of the 

lot by 10 to 20%. 

Goodover testified that the value of his property ranged from 

$150,000 to $175,000. Goodover also testified that the County Tax 
Appeals Board had reduced his appraised property value by $10,000 

due to the ongoing litigation. 

Lindey's real estate expert, Jeff Macon, testified that an 

undeveloped campsite in the Seeley Lake area rented for $160 per 

month, but acknowledged that a lot with amenities similar to 

Goodover's would yield higher rentals. He also testified that the 

encroachments would not have a substantial effect on sales price. 

Clarence Rich, a Seeley Lake real estate agent, also testified for 

Lindey's. He testified that the underground tanks would increase 

the sales value of adjacent property. He admitted, however, that 

his experience with such appreciation occurred fifteen years ago. 

Michael Pat Goodover, Jr., Goodover's son, also testified as 

an expert realtor. As a member of the Montana Association of 

Realtors Risk Reduction Task Force, he concluded that the 

underground storage tanks decreased the sales value of the adjacent 

lot. 

The District Court determined that the reasonable rental value 

of Goodover's property was $350 per week and that the encroachments 

caused a 10% reduction in the value of the lot. Therefore, the 

court calculated that 10% of $350 yielded damages of $35 per week 

for loss of use of property. The court awarded $35 per week from 

August 1986 through August 1991, arriving at a total damage award 

of $9,100 for loss of use of property, and ordered $2,540 of that 

amount forfeited from the appeal bond. The court also awarded $500 

in supplemental relief for the fire code violation and $350 per 

week coercive damages for every week the encroachments remained on 

the property after the July 20, 1991, deadline for removal. 

7 
Lindey's raises a profusion of related arguments concerning 

the District Court's determination and computation of damages. 

Specifically, Lindey's claims that the District Court erred in 

awarding damages in excess of those in the complaint and 

supplemental petition, that it admitted and relied on expert 

testimony in error, and that it erroneously computed the damages. 

We address these three claims individually. 

First, Lindey's claims that the District Court erred in 

awarding damages beyond those requested in the second amended 

complaint and the petition for supplemental relief, thereby denying 

it "fair notice" of Goodover's damages. This argument is without 

merit. Goodover brought this action to quiet title and for 

declaratory relief. The Uniform Declaratory Judgments Act provides 

for supplemental relief to enforce a declaratory judgment. Section 

27-8-313, MCA, reads: 

Further relief based on a declaratory judgment or decree 

may be granted whenever necessary or proper. The 

application therefor shall be by petition to a court 

having jurisdiction to grant the relief. If the 

application be deemed sufficient, the court shall, on 

reasonable notice, require any adverse party whose rights 

have been adjudicated by a declaratory judgment or decree 

to show cause why further relief should not be granted 

forthwith. 

In this case, Goodover filed a motion to show cause, 

requesting the court to order Lindey's to remove the encroachments. 

Lindey's concedes that this motion served as a supplemental 

petition under § 27-8-313, MCA. The District Court issued the 

order to show cause pursuant to the statute and held a hearing. In 

a corrective order issued after the hearing, the District Court 

expressly reserved continuing jurisdiction over the issue of 
damages. As we said in Goodover 11, this statute enables the 

district court to retain jurisdiction and grant further relief as 

it deems necessary and DroDer to enforce the declaratory judgment. 

246 Mont. at 82, 802 P.2d at 1260 (emphasis added). We held that 

in fashioning the remedy, the court is not bound by relief 

requested in the complaint but may order any relief needed to 

effectuate the judgment. Id. In this case, the District Court 

retained jurisdiction to grant relief necessary to enforce its 

judgment under the Uniform Declaratory Judgments Act and its 

earlier orders. The District Court correctly determined that 

monetary damages and coercive relief were necessary to provide 

complete relief to Goodover. 

Furthermore, Rule 54(c), M.R.Civ.P., states that every final 

judgment shall grant the relief to which the party in whose favor 

it is rendered is entitled, even if the party has not demanded such 

relief in the party's pleadings. Goodover's failure to request 

specific money damages or coercive damages does not hinder the 

District Court's ability to order any relief necessary to 

effectuate its judgment. We hold that the District Court did not 

err in awarding damages in excess of those requested in the 

complaint and petition for supplemental relief. 

Second, Lindey's objects to the expert testimony relied on by 

the District Court in computing damages. Lindey's claims that 

Goodover's expert, Hayes, was not qualified as an expert and should 

not have been allowed to testify about property values. The trial 

court's determination that a witness is qualified to testify as an 

expert will not be disturbed absent a showing of abuse. Price 

9 
Bldg. Service Inc. v. Christensen (1985), 215 Mont. 372, 375, 697 

P.2d 1344, 1346. Hayes was a licensed realtor with over fifteen 

years' experience in selling and renting property in Missoula 

County. The District Court did not abuse its discretion in 

allowing Hayes to testify as an expert. 

Lindey's further argues that the trial court erred in choosing 

Hayes' valuation over those of its experts, Macon and Rich. The 

trial court is free to select and reject appraisal values, so long 

as there is substantial credible evidence in support of the value 

selected. In re Marriage of Williams (1986), 220 Mont. 232, 242, 

714 P.2d 548, 554 (citations omitted). In this case, Hayes' 

testimony provided substantial credible evidence to support the 

court's valuations. We hold that the District Court did not err in 

adopting the values testified to by Hayes. 

Third, Lindey's challenges the amount of damages awarded for 

loss of use of property, coercive relief, and the fire code 

violation. Lindeyls begins by arguing that the District Court 

erred in computing the damages for loss of use of property. The 

detriment caused by the wrongful occupation of real property is 

deemed to be the value of the use of the property for the time of 

such occupation. Section 27-1-318, MCA. Reasonable rental value 

is a proper estimation of the value of use of property. Smithers 

v. Hagerman (lggo), 244 Mont. 182, 191, 797 P.2d 177, 183; 

Pritchard Petroleum Co. v. Farmers Co-op (1947), 121 Mont. 1, 7, 

190 P.2d 55, 58. Lindey's argues that the District Court should 

have taken into account the appreciation of the property during 

litigation when determining reasonable rental value. Lindey's 

10 
cites no authority for its position and, in any event, presented no 

evidence on the effect of appreciation on rental value. The 

District Court did not err in its computation of reasonable rental 

value of the property encroached upon by Lindey's. 

Lindey's additionally argues that the District Court should 

not have awarded damages for loss of use for the winter months 

because Goodover did not use the property in the winter. 

Therefore, Lindeyts contends, the court could not have attributed 

any damages to the appeal bond prior to the second appeal because 

that period of time fell during the winter. Based on Hayes' 

testimony, Lindey's asserts that Goodover used his property for 

only fourteen weeks in the summer of 1990. The transcript reads: 

Q Now what is the rental season up in Seeley Lake, 

generally speaking? 

A From May through September. 

Q Okay. And approximately how many weeks per summer if 

you - 

A Probably about 14 weeks would be prime time. 

Hayes' testimony does not support Lindey's factual contention. 

Rather, it refers to rental property in Seeley Lake in general, not 

Goodover's property in 1990; it also refers to "prime time1# rental 

season only. 

Moreover, the encroachments continued year-round. Section 27- 

1-318, MCA, authorizes damages for the wrongful occupation of 

property for the time of the wronqful occupation. The District 

Court did not err in applying the reasonable rental figure to each 

week the encroachments existed. 

Lindey's argues that the amount of coercive damages the 
District Court awarded to Goodover was in error. As discussed in 

Goodover 11, coercive damages are a proper tool to enforce a 

declaratory judgment. 246 Mont. at 82, 802 P.2d at 1260. Here, 

the coercive damages managed to accomplish what five years of 

litigation could not--remove the encroachments. The District Court 

did not err in awarding $350 per week for every week the 

encroachments remained on Goodover's property. 

F'inally, Lindey's claims that by awarding $500 in supplemental 

relief for the fire code violation and $35 per week for loss of use 

of property, the District Court put Lindey s in "double jeopardy. 

We disagree. We note initially that double jeopardy is a term of 

art not applicable to a civil proceeding. We assume Lindey's is 

arguing that the court awarded double damages for the same 

violation. That is not the case here. 

The District Court computed the award of $35 per week by 

figuring the loss of use of property caused by the encroachments 

over the five year period. The court also awarded $500 in 

supplemental relief for the fire code violation in lieu of removing 

the underground storage tanks. The underground tanks posed 

possible environmental and fire hazards that affected the property 

value separately and distinctly; Hayes, Rich and Goodover, Jr. all 

testified as to the impact of the storage tanks on the value of the 

real estate. The court is not bound by the opinion of a particular 

party or expert but remains free to adopt any reasonable valuation 

that is supported by the record. In re Marriage of Dzivi (1991), 

247 Mont. 165, 167, 805 P.2d 567, 568. The District Court did not 

err in awarding a separate $500 damage award for the underground 

12 
storage tanks. 

In sum, the District Court made extensive findings of fact 

regarding damages and how they were computed. These findings are 

not clearly erroneous under the three-part Itclearly erroneous'' test 

we enunciated in Interstate Prod. Credit Ass'n v. DeSaye (1991), 

250 Mont. 320, 323, 820 P.2d 1285, 1287. First, the testimony of 

Hayes, Goodover, Rich and Goodover, Jr. provides substantial 

credible evidence supporting the District Court's valuations. In 

addition, the District Court did not misapprehend the effect of the 

evidence. Finally, we are not left with a definite and firm 

conviction that a mistake has been made. We hold that the District 

Court did not err in its determination and award of damages. 

111. 

Did the District Court err in ordering Lindey's to pay for the 

transcription of a video-taped deposition? 

Gary Johnson testified for Lindey's at a hearing on March 14, 

1991. He was unable to complete his testimony that day and the 

parties agreed to a perpetuation deposition pursuant to Rule 30, 

M.R.Civ.P., to allow Johnson to complete his testimony. The 

deposition was taken a few days later. Goodover subsequently moved 

the court to order Lindeyls to provide a written transcript of the 

video-taped deposition; the District Court granted the motion on 

April 8, 1991. Lindey's filed its objection to Goodover's motion 

on April 10, 1991. Lindey's now argues that the District Court 

violated Rule 2 of the Uniform District Court Rules in issuing the 

order. 

Rule 30(h)(l)(c), M.R.Civ.P., specifically allows the court, 

13 
upon motion for good cause, to order the party who took the video 

deposition to furnish a transcript of that deposition at that 

party's expense, The expert testified on Lindey's behalf, and 

Lindeyl s took the deposition for the convenience of its expert. 

Also, Lindey's original objection to Goodoverts motion was not 

based on an asserted violation of U. D. C.R. 2. This Court will not 

address on appeal an issue not presented to the district court. 

Wyman v, DuBray Land Realty (2988), 231 Mont. 294, 299, 752 P.2d 

196, 200. The ~istrict Court did not err in ordering Lindey's to 

pay for the transcription of Gary Johnsongs video-taped deposition. 

Did the District Court err in admitting hearsay evidence of a 

reduction in the taxable value of Goodover's property? 

Lindeyts claims that the District Court erred by allowing 

Goodover to testify to inadmissible hearsay. When asked whether he 

had approached the local County Tax Appeal Board about the value of 

his lot, Goodover responded "[tlhe Tax Appeal Board ruled during 

the legislation [sic], the legal involvement, they would reduce my 

property taxation value by $10,000.00. Lindey s objected that the 

answer required hearsay, and the District Court overruled the 

objection. 

Under Rule 801 of the Montana Rules of Evidence, hearsay is 

defined as a statement other than one made by the declarant while 

testifying at trial or hearing, offered in evidence to prove the 

truth of the matter asserted. Rule 602, M.R.Evid., states; 

A witness may not testify as to a matter unless evidence 

is introduced sufficient to support a finding that the 

witness has personal knowledge of the matter. Evidence 
to prove personal knowledge may, but need not, consist of 

the witness' own testimony. 

The term "hearsay," as used in the law of evidence, signifies all 

evidence which is not founded upon the personal knowledge of the 

witness from whom it is elicited. State v. Sharbono (1977), 175 

Mont. 373, 387, 563 P.2d 61, 69, quoting State v. Crean (1911), 43 

Mont. 47, 59, 114 P. 603, 607. Goodover's testimony established 

his personal knowledge of the reduction. He personally participated in the tax reduction proceeding and has first-hand knowledge of 

the reduction in the taxable value of his property. Therefore, his 

testimony does not constitute hearsay. We hold that the District 

Court did not admit hearsay evidence of the reduction in the 

taxable value of Goodover's property. 

Can Lindeyts raise issues that were raised or should have been 

raised in an earlier appeal? 

Lindey's claims the District Court's Conclusion of Law XI11 is 

not supported by the record. The conclusion reads: 

Current Fire Marshall regulations in effect since 1985, 

require a set back of at least three feet from property 

boundaries for underground fuel storage tanks. (Source, 

Uniform Fire Code 79.601(a), Testimony of Sisk.) 

This Conclusion of Law is a verbatim repetition of Conclusion of 

Law VIII in the District Court's February 23, 1990 order appealed 

to this Court in Goodover 11. Having failed to raise the issue in 

Goodover 11, Lindeyrs cannot now raise the sufficiency of the 

evidence to support this conclusion. Downs v. Smyk (1982), 200 

Mont. 334, 343, 651 P.2d 1238, 1242. 
Similarly, Lindey9s attempts to resurrect the argument that 

the equitable doctrine of laches should defeat Goodover's claim of 

encroachment, As Goodover points out, a careful look at Lindeyls 

appellate brief in Goodover If reveals the same argument. We 

stated in Goodover 11: 

Lindeyfs raises a myriad of issues in an attempt to 

relitigate the boundary-line question. We refuse to 

examine these arguments, however, because the boundaryline issue was reviewed and finally decided during the 

first appeal to this Court. The District Court s 

determination of the boundary line is thus res judicata 

and cannot be reconsidered on this appeal. 

246 Mont. at 82, 802 P.2d at 1260. ~indey's again argues that 

Goodoverts alleged delay in acquiring a survey should bar the claim 

of encroachment. This argument has no more merit now than it did 

when Lindeyts raised it in Goodover 11. All issues relating to the 

boundary and the encroachments are res judicata. 

Did the District Court err in awarding costs to Goodover? 

Lindey9s makes several objections to the bill of costs 

submitted by Goodover and approved by the District Court. Lindeyts 

claims the District Court erred by awarding $570 to Goodover for 

expert witness fees. We agree. 

Legal fees of witnesses, plus mileage, are allowable statutory 

costs under § 25-10-201, MCA. By statute, an expert witness is a 

witness and receives the same compensation as a witness, section 

26-2-505, MCA. The statutory witness fee in a civil case is 

limited to $10 per day. Section 26-2-501, MCA. A party may pay an 

expert witness any fee he or she chooses, but a district court 

cannot award costs in excess of $10 per day per witness. Witty v. 
Pluid (l986), 220 Mont. 272, 274, 714 P.2d 169, 171. From our 

review of the record of the hearing, Hayes, Gregory Martinsen and 

Goodover, Jr., each testified one day for Goodover; thus, the total 

witness fee awardable as costs for those witnesses is $30. We hold 

that the District Court erred in the amount of witness fees awarded 

as costs to Goodover. 

Lindey's also asserts that the District Court erroneously 

awarded Goodover the costs of the survey used to prepare the map 

that located the storage tanks. We disagree. This map was 

introduced through Goodover's expert Martinsen as Plaintiff's 

Exhibit 1. Under 5 25-10-201(8), MCA, reasonable expenses for 

making maps are allowed if required and necessary for use at trial 

or hearing. Lindey's claims that Goodover's exhibit was not 

necessary because Lindey's submitted a report locating the tanks in 

July. However, Goodover's survey is more detailed than, and 

different in result from, Lindey's report. Expenses incurred in 

preparing maps for the express purpose of explaining the factual 

situation to the court are allowed as recoverable costs. Funk v. 

Robbin (1984), 212 Mont. 437, 449, 689 P.2d 1215, 1222. The 

District Court did not err in awarding Goodover $524.45 in costs 

for reasonable expenses in preparing the map. 

VII. 

Did the District Court err in awarding attorney's fees to 

Goodover? 

Lindey's argues that the District Court erred in awarding 

Goodover attorney's fees. We agree. 

To support its award of attorney's fees, the District Court 

17 
made the following findings of fact in its January 2, 1992, order: 

[XXXI] Beginning with the hearings held on supplementary 

relief, counsel for Lindey's, Inc., has attempted to 

interject the relitigation of the original boundary 

issue, exhibits related to the relitigation of the 

boundary issue, and other extraneous matters rather than 

to address the issues before the Court. Again, based on 

this Court's extensive experience as a Trial Judge, these 

efforts were transparent attempts to vex, obstruct, and 

delay the proceedings in this case. 

[XXXII] On April 8, 1991, this Court issued an Order 

requiring the transcription of a deposition of one of 

Lindey's, experts. The strategy employed by Lindey's, 

Inc., and its counsel to delay and vex compliance with 

this valid Court Order are as follows: 

A. Telling the private Court Reporter who 

reported at this deposition that they would 

not guarantee payment. 

B. Filing a premature Writ of Certiorari to 

the Montana Supreme Court which was dismissed. 

C. Maintaining that while they did not 

possess the tape, they had not lost the video 

tape which the Court Reporter's notes 

indicated had been delivered to them . . . and 

which the Court records indicate had never 

been filed. 

D. only agreeing to guarantee payment for the 

video tape after a Rule 37(b) Motion had been 

filed by Plaintiff's counsel and a hearing 

date set. 

E. Finally acknowledging that the video tape 

was in the possession of Mr. Lindemer in late 

July 1991. 

F. The deposition was finally transcribed on 

July 31, 1991. A delay caused exclusively by 

Lindeyls actions of approximately four months. 

G. These actions by Lindey's, Inc., have also 

delayed the determination of the Contempt 

Issue which was submitted to this Court on 

June 14, 1991, but couldn't be decided until 

the transcript was prepared. 
[XXXV] Based on the slow progress made in this case, due 

in large measure to Defendant Lindey's frequent attempts 

to relitigate this case, both at the District Court and 

Supreme Court level, the number of extraneous exhibits 

and issues which this Court often admitted over 

objection, despite their minimal relevance, materiality 

and/or weight, the Court finds that in this particular 

case, the exercise of its equitable powers to award the 

Plaintiff its reasonable attorney's fees is justified. 

[XXXVI] Such actions by Lindey's during the pendency of 

boundary litigation and its subsequent refusal to move 

the encroachments even after the boundary dispute was 

resolved are actions taken in bad faith and with malice 

and are the factual basis for the Court's award of 

attorney's fees to Plaintiff. 

The District Court concluded that these factual circumstances 

justifiedthe exercise of its equitable powers and awarded Goodover 

reasonable attorney's fees. 

The longstanding rule in Montana is that, absent statutory or 

contractual authority, attorney's fees will not be awarded. Bitney 

v. School Dist. No. 44 (1975), 167 Mont. 129, 137, 535 P.2d 1273, 

1277; Ehly v. Cady (l984), 212 Mont. 82, 100, 687 P.2d 687, 696; 

Joseph Russell Realty Co. v. Kenneally (1980), 185 Mont. 496, 505, 

605 P.2d 1107, 1112. This rule, also called the American Rule, 

prohibits fee shifting in most cases. Alyeska Pipeline Service Co. 

v. Wilderness Society (l975), 421 U.S. 240, 247, 95 S.Ct. 1612, 

1616, 44 L.Ed.2d 141, 147. The District Court did not rely on any 

statute or rule of civil procedure in its award of attorney's fees. 

Instead, the District Court first relied on a United States Supreme 

Court decision that discussed the powers of the federal district 

court to assess attorney's fees as an appropriate sanction under 

the "bad faith" exception to the general rule. The District Court 

then concluded that its general equity power to make a party whole 
in some cases included the right to award attorney's fees, and that 

Lindey's bad faith and malicious behavior towards Goodover merited 

such an award. 

In isolated instances, a district court may award attorney's 

fees to make an injured party whole under its equity powers. Foy 

v. Anderson (1978) , 176 Mont 507, 511-12, 580 P. 2d 114, 116-17 ; 

Holmstrom Land Co. v. Hunter (1979), 182 Mont. 43, 48-49, 595 P.2d 

360, 363; Stickney v. State, County of Missoula (1981), 195 Mont. 

415, 418, 636 P.2d 860, 862. We have invoked the "equitable" 

exception to the general rule infrequently, however, and only in 

cases with particularly limited facts. 

In m, Eggan and Foy were passengers in a car struck from the 

rear by Anderson. Eggan sustained only minor injuries and did not 

file a claim against Anderson. Anderson filed a declaratory action 

against his insurer and sought to bring in Eggan as a third party, 

alleging that Eggan had asserted a claim against him. We held that 

because Eggan asserted no claim against Anderson, and she was 

forced to hire an attorney to write and argue her motion to dismiss 

through no fault of her own, she would not be made whole without an 

award of attorney's fees. 176 Mont. at 512, 580 P.2d at 117. 

In Holmstrom, the district court issued an order to the water 

commissioner, defendant Hunter, to charge all water flowing from 

Newlan Creek to Holmstrom. Holmstrom refused to pay and Hunter 

padlocked his headgates. Holmstrom then brought a civil action 

against Hunter. We held that Hunter acted pursuant to a court 

order, was forced to retain counsel, and as a matter of equity 

required an award of attorney 's fees. 182 Mont. at 48, 595 P. 2d at 

2 0 
363. We reasoned that if water commissioners were required to 

defend suits out of their personal funds for suits brought against 

them for their official acts, no one would be willing to serve as 

a water commissioner. Comparing the case to Foy, we stated, 

'l[j]ust as Anderson had no reason or justification for dragging 

Eggan into the lawsuit . . . , Holmstrom had no reason to sue 

Hunter." 182 Mont. at 49, 595 P.2d at 363. Again, this award of 

attorney's fees was based on our inherent equitable power to grant 

the relief that justice requires. 

We applied the Fov exception again in Sticknev with similar 

limitations. In Sticknev, Justice of the Peace Jensen asked 

several spectators in her courtroom to leave before a trial, they 

refused, and she found them in contempt. 195 Mont. at 416, 636 

P.2d at 861. The spectators sued Jensen in her personal capacity 

for official misconduct in office. We held that the facts as 

pleaded presented no basis for personal liability, therefore the 

attorney's fees awarded by the district court were proper. As in 

m, Jensen was forced to personally defend against a frivolous 

action through no fault of her own. 195 Mont. at 418, 636 P.2d at 

862. 

This equitable exception to the general rule is available in 

those unique factual situations in which a party is forced into a 

frivolous lawsuit and must incur attorney's fees to dismiss the 

claim. In such cases, equity requires an award of attorney's fees 

to "make the party whole." We have rejected many efforts to expand 

the limited application of Fov and its progeny. Indeed, two months 

after the Fov decision, we sharply limited its applicability in 

2 1 
Masonovich v. School District No. 1 (1978) , 178 Mont. 138, 582 P.2d 

The plaintiff in Masonovich obtained a preliminary injunction 

against the defendants and included attorney's fees in his 

memorandum of costs. We distinguished m, stating: 

In the instant case the plaintiff's position is entirely 

different from the third party defendant's position in 

m. Here, plaintiff obtained an attorney to institute 

legal action. He did not obtain an attorney to help him 

defend against a claim against him as in m. Plaintiff 

freely chose to obtain the services of a private attorney 

to institute a suit against others. . . . is 

distinguishable on this basis and is not controlling in 

this case. 

178 Mont. at 141, 582 P. 2d at 1236 (emphasis added) . Goodover's 

position as the plaintiff in this litigation, as we explained in 

Masonovich, normally will. preclude an award of attorney's fees 

under m. 

We again explained the distinguishing characteristics of 

in State ex rel. Wilson. v. Dept. of Natural Resources (1982), 199 

Mont. 189, 202, 648 P.2d 766, 772, stating: 

The exception has been narrowly drawn and is 

applicable only where the action into which the 

prevailing party has been forced is utterly without merit 

or frivolous. 

Here, Goodover was not forced into wholly frivolous litigation 

through no fault of his own; he filed suit against ~indey's. 

Furthermore, if the losing party had a reasonable basis to believe 

his cause might prevail, the exception is inapplicable. Id. 

Lindey Is has prevailed at various points in this litigation, and we 

did not determine its earlier appeals to be utterly without merit. 

and its progeny are distinguishable from the present case and 
do not form a basis for an award of attorney's fees 

In addition to the equitable exception invoked to make a party 

whole, some states and the federal courts have adopted a bad faith 

exception to the American Rule. See Chambers v. NASCO, Inc. (1991) 

- U.S. -t -I 111 S.Ct. 2123, 2133, 115 L.Ed.2d 27, 45. 

Montana has not expressly adopted a malicious or bad faith 

equitable exception to the American Rule and we decline to do so at 

this time. In the present case, the District Court relied on 

Joseph Russell Realtv Co. for the proposition that this Court 

announced therein a "bad faith or malicious or fraudulent basis" 

for the award of attorney's fees. This reliance is misplaced. 

In Joseph Russell Realtv Co., the plaintiff argued that 

attorney's fees should be awarded when another's fraudulent act is 

the cause of litigation, citing Home Ins. Co. v. Pinski Brothers, 

Inc. (1972), 160 Mont. 219, 500 P.2d 945. We stated that assuming 

this exception exists, it was not applicable to the facts in that 

case because the defendant had not acted fraudulently, maliciously 

or in bad faith. Joseph Russell Realtv Co., 185 Mont. at 505, 605 

P.2d at 1112. 

Joseph Russell Realtv Co. cited Home Ins. Co. for the 

possibility of a stfraudulent exceptionft to the American Rule but 

did not: rely on or apply such an exception. In Home Ins. Co., this 

Court awarded attorney's fees against an insurer based on its 

breach of its duty to defend an insured, not on a fraudulent 

exception to the American Rule. Home Ins. Co., 160 Mont. at 228, 

500 P.2d at 950. Under the Home Ins. Co. rationale, we have 

steadfastly refused to extend this narrow exception beyond those 
cases in which an insurer breaches its duty to defend. 

We recently refused to extend the Home Ins. Co. exception to 

cover the situation in which an insurer wrongfully refused to 

provide coverage to the insured. Yovish v. United Services Auto. 

Ass'n (1990), 243 Mont. 284, 291, 794 P.2d, 682, 686. Although the 

distinction between failing to defend and failing to provide 

coverage may be slight, we hesitated to expand the exception to the 

general rule without legislative authority. a. Similarly, we 

will not expand the insurance exception to include the more general 

exception for bad faith and malice relied on by the District Court 

in this case. Montana's statutes and Rules of Civil Procedure, 

together with the limited Fov exception, provide ample opportunity 

for awarding attorney' s fees when a party or an attorney abuses the 

judicial system. 

The District Court found that the slow progress in this 

litigation was due in large measure to Lindey's attempts to relitigate the case both at the District Court and Montana Supreme 

Court levels. While this may be true to some extent, we did not 

determine Lindey's earlier appeals to be wholly without merit. Nor 

do we agree that Lindey's should shoulder all of the blame for this 

lengthy and bitter litigation. In any event, attorney's fees were 

neither argued to, nor awarded by, the District Court under 9 37- 

61-421, MCA. 

The awarding of attorney's fees is within the discretionary 

power of the district court. Grenfell v. Duffy (1982), 198 Mont. 

90, 96, 643 P.2d 1184, 1187. The general rule remains that 

attorney's fees will not be awarded to the prevailing party absent 

24 
statute or contract. This action presents neither a statutory nor 

a contractual basis for the award of attorney's fees, nor does it 

fall within one of the narrow exceptions to the general rule 

recognized in Montana. Yovish, 243 Mont. at 290, 794 P.2d at 686. 

We hold, therefore, that the District Court abused its discretion 

in awarding attorney's fees. 

Affirmed in part, reversed in part and remanded for entry of 

judgment in accordance with this opinion. 

We concur: 

Chief Justice J. A. Turnage did not participate. 
Justice Terry N. Trieweiler concurring in part and dissenting in 

part. 

I concur with the majority's conclusions pertaining to 

Issues I through VI. 

I dissent from the majority's decision to reverse the District 

Court's award of attorney fees. I would adopt an exception to the 

so-called "American Rulen by allowing District Courts to assess 

attorney fees when a party has acted in bad faith, vexatiously, 

wantonly, or for oppressive reasons. The basis for an award under 

such circumstances was set forth by the United States Supreme Court 

in Chambers v. Nasco, Inc. (1991), 111 S. ct. 2123, 2133, 115 L. Ed. 2d 

27, 45. That Court gave the following explanation with which I 

concur: 

In this regard, if a court finds "that fraud has been 

practiced upon it, or that the very temple of justice has 

been defiled,'' it may assess attorney's fees against the 

responsible party, Universal Oil [Products Co. v. Root 

Refining Co. (1946), 328 US 575,] 580, 90 L Ed 1447, 66 

S Ct 1176, as it may when a party "shows bad faith by 

delaying or disrupting the litigation or by hampering 

enforcement of a court order," Hutto [v. Finney (1978)], 

437 US [678], 689, n 14, 57 L Ed 2d 522, 98 S Ct 2565. 

The imposition of sanctions in this instance transcends 

a court's equitable power concerning relations between 

the parties and reaches a court's inherent power to 

police itself, thus serving the dual purpose of 

gWindicat[ing] judicial authority without resort to the 

more drastic sanctions available for contempt of court 

and mak[ing] the prevailing party whole for expenses 

caused by his opponent's obstinacy." 

Chambers, 115 L. Ed. 2d at 46. 
Based on this exception to the mlAmerican Rule" regarding 

assessment of attorney fees, I would affirm the District Court's 

award. 

Justice John C. ~arrison concurs in the foregoing concurrence 

and dissent of Justice Trieweiler.