No. 86-275 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1987 

STEPHEN J. KENNEY, 

Plaintiff and Appellant, 

-vsRUDY KOCH, SIMON KUNTZ, AND K & K 

DEVELOPMENT, INC., 

Defendants and Respondents. 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Big Horn, 

The Honorable G. Todd Baugh, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Stanton, Hovland & Torske; James E. Torske, 

Hardin, Montana 

For Respondent: 

Wright, Tolliver & Guthals; Joel E. Guthals, 

Billings, Montana 

Submitted on Briefs: March 5, 1987 

Decided: MaY 28, 1987 

Filed: MAY 2 s 1987 
Mr. Justice William E. Hunt, Sr., delivered the Opinion of 

the Court. 

Appellant, Stephen J. Kenney appeals from a judgment 

from the Thirteenth Judicial District of the State of Montana 

awarding him $32,120.00 in damages for wrongful conversion of 

his property and also awarding respondents, K & K 

Development, Inc., $500.00 in damages for trespass. 

We reverse in part and remand for re-evaluation of 

damages consistent with this Opinion. 

We are asked to decide six issues. Issue number one is 

raised by respondents and questions the jurisdiction of this 

Court because appellant did not comply with the Montana Rules 

of Civil Procedure. The remaining five issues are raised by 

the appellant and go to the judgment of the District Court. 

The six issues are: 

1. Does this Court have jurisdiction to hear this 

appeal because of the failure of the appellant to timely file 

notice of appeal and failure to file transcript of the 

proceedings in accordance with the Montana Rules of Civil 

Procedure? 

2. Did the District Court abuse its discretion by 

awarding damages based on $3.25 per cubic yard of gravel as 

the highest market value pursuant to 5 27-1-320, MCA? 

3. Was appellant entitled to an award for reasonable 

time and money expended in the pursuit of his property 

pursuant to S 27-1-320, MCA? 

4. Did the District Court err by not including attorney 

fees in its award for appellant under § 27-1-320, MCA? 

5. Did the District Court err by awarding damages for 

trespass to respondents? 
6. Did the District Court err by awarding damages based 

on equity rather than S 27-1-320, MCA? 

The personal property, subject of this dispute, is 7,390 

cubic yards of gravel of the specification "3/4 minus" 

required by appellant to meet many of his contractual 

obligations. In 1971, appellant refused an offer by the 

owner, Robert Downs, to sell the gravel for $6.00 per cubic 

yard. Later, in February, 1981, Downs offered to sell the 

gravel for $3.25 per cubic yard and appellant accepted. 

Appellant did not record notice of his interest in the 

gravel. The gravel had been stockpiled on Downs' property 

located within eyesight of appellant's general contracting 

business in Hardin, Montana. After selling the gravel to 

appellant, Downs conveyed the real property on which the 

gravel was located to Ernie DeVries to satisfy a pre-existing 

debt. 

In October, 1981, respondents Koch and Kuntz became 

interested in purchasing the land where the gravel was still 

stockpiled. Koch and Kuntz negotiated with DeVries, his 

attorney and Downs' real estate broker for the sale of the 

land. It was during these negotiations that the question of 

ownership of the stockpiled gravel was raised. Koch and 

Kuntz wanted to acquire the gravel to use in the development 

of the property. A search through the title records produced 

only an expired State of Montana stockpiling agreement. 

On October 23, 1981, the respondents purchased the land 

on a contract for deed. The contract was silent as to the 

ownership of the gravel and Koch and Kuntz received no bill 

of sale for it. After the sale, Koch and Kuntz decided to 

lock the gate and cut off access to the gravel in an attempt 

to determine who, if anyone, owned the gravel and to protect 

themselves from any liability from theft. The same day that 

Koch and Kuntz chained and locked the gate to the property, 
appellant met them on the road immediately adjacent to the 

stockpiled gravel and informed them of his ownership of the 

gravel. Koch and Kuntz asked for documentation and shortly 

thereafter their attorney formally requested verification of 

ownership from appellant. 

On October 29, 1981, appellant provided the respondents' 

attorney with the cancelled check made out to Downs and with 

the vendor's invoice for the gravel which he received from 

Downs. Because there was no notice of interest on record, 

the invoice did not contain an exact legal description of the 

location of the stockpiled gravel, and because the State 

Highway Department was also making claims on some of the 

gravel on their land, Koch and Kuntz refused to honor 

appellant's claim. Koch and Kuntz did not contact Downs to 

inquire about the validity of appellant's ownership. 

In November, 1981, appellant completed a contract with 

the City of Hardin for which 1,450 cubic yards of gravel, 

comparable to the gravel in question, was purchased for 

$16.50 per cubic yard. In April, 1982, appellant sold 

another 7,390 cubic yards of comparable gravel to the City of 

Hardin as part of another construction contract. 

In June, 1982, appellant needed more grade "3/4 minus" 

gravel for a contract with Petty Ray GeoSource. To get the 

gravel which he purchased from Downs, appellant broke the 

padlock on the gate to Koch and Kuntz's property (now K & K 

Development, Inc.) and removed 10 semi-truck loads or 90 

cubic yards of gravel. Appellant was paid $6.50 per cubic 

yard for these 90 cubic yards. Immediately thereafter, Koch 

and Kuntz, through their attorney, informed appellant that 

they did not consent to the removal of any gravel from their 

property and that he was trespassing. 

On July 29, 1982, appellant filed a wrongful conversion 

claim under 5 27-1-320, MCA. In accordance with the 
provisions of that statute, appellant opted to receive the 

highest market value of the gravel between the time of 

conversion and the date of the verdict, without interest, 

instead of the fair market value of the gravel at the time of 

conversion with interest. Appellant also requested 

reasonable costs of pursuing his property and attorney fees. 

On August 19, 1982, due to the dispute over the gravel, 

DeVries traded property with Koch and Kuntz to relieve them 

of having to prove ownership of the gravel. 

The case was heard on June 4, 1985 in a non-jury trial. 

The District Court judgment awarded appellant: $23,725.00 

for the conversion of 7,300 cubic yards of gravel valued at 

$3.25 per cubic yard as the highest market value between the 

date of conversion and December 18, 1985, the date of the 

verdict; $8,395.00 for incidental and consequential damages; 

10% interest from the date of the judgment until paid; 

nothing for time and money spent in pursuit of his property; 

and nothing for attorney fees. The judgment further ordered 

that appellant pay K & K Development, Inc. $500.00 in 

"nominal" damages for trespass. 

Following this judgment of October 25, 1985, both 

parties filed post-trial motions. These motions were all 

denied by an order dated January 15, 1986. No notice of 

entry of judgment was filed until March 26, 1986, when a 

notice of appeal was also filed by appellant. 

Before considering the facts and applicable law, we must 

first consider the question of whether this Court has 

jurisdiction to hear this appeal. To do that, we must begin 

with an analysis of Rule 77 (dl , M.R.Civ.P., which states in 

part: "Within 10 days after entry of judgment in an action 

in which an appearance has been made, notice of such 

entry,. . . shall be served by the prevailing party upon all 

parties who have made an appearance . . ." 
Rule 5, M.R.App.Civ.P. provides that when Rule 77 (d) is 

applicable, the 30 day limitation on filing notice of appeals 

begins to run upon service of notice of entry of judgment. 

The history of Rule 77 (d) tells us that the obligation 

of who is to serve notice of entry of judgment has fluctuated 

since the rule's inception. Prior to 1975, Rule 77 (d) 

required that notice of entry of judgment be served by the 

prevailing party on the adverse parties to the case. From 

1975 to 1984, such notice was to be served by the clerk of 

court on all adverse parties. The reason for this change was 

to substitute reliable proof of mailing "for the interminable 

wrangling between counsel concerning whether prevailing 

counsel had in fact mailed the notice of entry of judgment to 

opposing counsel and if so, on what date." Pierce Packing 

Co. v. District Court (1978), 177 Mont. 50, 53, 579 P.2d 760, 

761. 

In 1984, Rule 77 (d) was amended to require that the 

"prevailing party serve notice upon all parties who have made 

an appearance" as preferable to the old rule requiring the 

clerk of court to serve such notice. 

This Court has held that it is the filing of the notice 

of entry of judgment that begins the running of the time 

limitations for filing a notice of appeal. Actual notice is 

not sufficient. "This rule has been technically applied to 

assure proper notice and an understanding of when the time 

for appeal begins to run. " Morrison v. Higbee (Mont. 1983) , 

668 P.2d 1029, 1032, 40 St.Rep. 1031, 1034. 

In spite of this statutory language and case law, 

respondents argue that this Court lacks jurisdiction to hear 

this appeal due to untimely filing of notice of appeal. 

Respondents argue that on January 15, 1986, when the District 

Court denied all post-trial motions, the ten day period in 
which to serve notice of entry of judgment pursuant to Rule 

77 (d) began to run. 

However, in Haywood v. Sedillo (1975), 167 Mont. 101, 

535 P.2d 1014, neither party ever filed a notice of entry of 

judgment. Notice of appeal was filed 58 days after the 

District Court's judgment was filed. Even though both 

parties in Haywood had actual notice of the court's ruling, 

this Court held that: 

Service of notice of the entry of judgment is not 

an idle act. In order to provide certainty in the 

law, some arbitrary point must be chosen from which 

the time to appeal may run. That point by the 

Montana Rules is the date of service of the notice 

of entry of judgment. 

In the present case, a notice of entry of judgment was 

filed 71 days after judgment on the post-trial motions was 

filed. The obligation to file the notice was on the 

prevailing party. If a prevailing party neglects to file a 

notice of entry of judgment, that party cannot then claim 

untimely filing of a notice of appeal by a non-prevailing 

party who wishes to appeal. 

To determine whether Rule 77(d) was violated, we must 

resolve the question of who was the "prevailing party" in the 

District Court decision. 

Appellant Kenney originally brought suit against 

respondents Koch and Kuntz for conversion of his property and 

resulting damages. The judgment granted to appellant was 

$23,725.00 for his conversion claim and $8,395.00 for 

consequential damages. There was no award for time and money 

expended in pursuit of his property nor for attorney fees. 

Respondents were awarded $500.00 for their trespass 

counterclaim. 
Although the monetary amount of a judgment is not 

decisive, the award of money is an important consideration 

when deciding who prevailed. E.C.A. Environmental Management 

v. Toenyes (Mont. 1984), 679 P.2d 213, 217-218, 41 St.Rep. 

388, 392-393. 

Both parties received a judgment for money. Appellant 

was successful in his claim for conversion. Respondents were 

successful in their claim for trespass. Both parties filed 

post-trial motions, all of which were denied. In Jorden v. 

Elizabethan Manor (1979), 181 Mont. 424, 434, 593 P.2d 1049, 

1055, we stated that "[a] prevailing party is the one who has 

an affirmative judgment rendered in his favor at the 

conclusion of the entire case. 'I In this case, both parties 

had an affirmative judgment rendered in their favor, so both 

can be considered to have prevailed. Either party could have 

made the requisite filing and both were responsible for the 

failure to technically comply with Rule 77(d) and file a 

notice of entry of judgment by January 27, 1986. 

In Pierce Packing, where neither party observed the 

requirements of the Rules of Civil Procedure, we stated that 

"where counsel for petitioner seeks to enforce the technical 

requirements of the Rules against opposing counsel, we will 

apply the same standard to petitioner and require the same 

technical compliance of him." 579 P.2d at 761. 

The notice of entry of judgment was filed on March 26, 

1986. Appellant filed his notice of appeal the same day. In 

this case, March 26, 1986 began the running of time 

limitations for the filing of an appeal. We hold that the 

appeal was timely filed. 

Respondents argue further that appellant failed to 

timely order a transcript of the proceedings. The record 

shows that the District Court granted a request for an 

extension of time to the court reporter to complete a 
transcript of the proceedings. All pertinent transcripts and 

records were before this Court at the time of review of 

respondents' request for dismissal and we hold that this 

appeal is properly before this Court. In view of the 

foregoing, we hold that this Court has jurisdiction to hear 

this case. 

We now consider the second issue as to whether the 

District Court abused its discretion by awarding appellant 

damages based on an amount of $3.25 per cubic yard of gravel 

as the "highest market value" pursuant to § 27-1-320, MCA. 

We hold that the court did err. 

The value of the gravel at issue is a question of fact. 

The standard of review for this Court for findings of fact 

are that unless "clearly erroneous," we will not set them 

aside. Rule 52 (a) , K. R.Civ.P. The same rule gives deference 

to the District Court's direct observance of the witnesses 

and the weight to be given their testimony. 

Section 27-1-320, MCA, states as follows: 

The detriment caused by the wrongful conversion of 

property is assumed to be: (a) the value of the 

property at the time of its conversion with the 

interest from that time or, when the action has 

been prosecuted with reasonable diligence, the 

highest market value of the property at any time 

between the conversion and the verdict without 

interest, at the option of the injured party; and 

(b) a fair compensation for the time and money 

properly expended in pursuit of the property . . . 

The language of § 27-1-320, MCA, has been virtually unchanged 

since 1895. The presumption contained in this statute is a 

disputable one. It may be overcome by evidence of peculiar 

circumstances that result in greater or less injury than the 

statute contemplates. " [I]n the absence of proof of such 

special circumstances, the statutory rules govern." Graham 

v. Clark's Fork National Rank (Mont. 1981), 631 P.2d 718, 
720, 38 St.Rep. 1140, 1142-43, citing Ferrat v. Adamson, et 

al. (1917), 53 Mont. 172, 163 P. 112. 

Appellant opted, under S 27-1-320, MCA, to recover "the 

highest market value of the property at any time between the 

conversion and the verdict without interest" instead of the 

"value of the property at the time of its conversion with the 

interest from that time." The District Court found that 

appellant ' s gravel was wrongfully converted as of early 

November, 1981. There is no evidence on record of any 

special circumstances which proved greater or lesser injuries 

than those for which this statute provides. 

Testimony was heard as to the "highest market value" of 

the gravel. This Court has held that "market value" means 

the price which "a buyer willing but not obligated to buy 

would pay a seller willing but not obligated to sell, but 

with full knowledge of all pertinent facts affecting value." 

In re Estate of Powers (1970), 156 Mont. 100, 103, 476 P.2d 

506, 507-08. See also State Dept. of Highways v. Schumaker 

(1979), 180 Mont. 329, 590 P.2d 1110. 

An expert witness testified that the value of the gravel 

was $3.25, which was the original purchase price paid by 

appellant. Appellant testified that he sold 90 cubic yards 

of the gravel at $6.50 per cubic yard in June, 1982. He also 

testified that he sold comparable gravel to the City of 

Hardin for $16.50 per cubic yard. This price included the 

standard overhead cost of transporting the gravel for 50 

cents per cubic yard mile. In appellant's opinion, the 

gravel in question had a fair market value at the time of 

conversion of $15.15 per cubic yard. 

The District Court found that, excluding overhead and 

profit, the highest market value of the gravel in question 

was $3.25 per cubic yard. This finding is contrary to the 

evidence. Testimony showed that appellant sold the gravel he 
purchased at $3.25 per cubic yard for various prices greater 

than the purchase price, up to a sale price of $16.50 per 

cubic yard. Mathematically the market value is obviously 

between the upper and lower limits of these two figures. In 

opting to forego interest since November, 1981, on the value 

of his gravel at the time of conversion, appellant relied on 

the statutory provision providing for "highest market value" 

without interest. "[A] plaintiff in an action for conversion 

may, by waiving interest, elect any date between the date of 

the conversion and the date of the trial on which to lay his 

damages." Klus v. Lamire (1924), 71 Mont. 445, 446, 230 P. 

364, 365. The substantial credible evidence on record 

supports appellant's contention that $3.25 per cubic yard is 

- not the "highest market value" of the gravel at "anytime 

between the conversion and the verdict." In Broadwater Farms 

Co. v. Broadwater Elevator Co. (19211, 61 Mont. 21-51 201 P687, this Court held that where a plaintiff in an action for 

conversion has brought himself within the rule requiring 

diligence in prosecuting the action, the fact that the 

measure of damages recoverable under it may be inequitable 

and unjust cannot deprive him of his right to recover the 

highest market value of the property at any time between the 

conversion and the verdict, at plaintiff's option, which he 

might have obtained but for the wrongful act of defendant. 

Profit is a factor in any property's fair market value. It 

follows that even more profit would be included in "highest" 

market value. It was an error for the District Court to 

estimate profit and subtract it from amounts testified to as 

being the highest market value of the gravel. 

Respondents, Koch and Kuntz' actions wrongfully kept 

appellant's gravel from him for nearly a year. The record 

shows varying values for gravel, comparable to the gravel in 

question, dependent upon the business acumen of the buyer. 
The $3.25 per cubic yard is the lowest value testified to for 

comparable gravel. Appellant testified that he sold a lower 

grade of gravel for $3.50 per cubic yard. It was clearly 

erroneous and an abuse of the District Court's discretion to 

find that the "highest market value" for the gravel between 

November, 1981, when the gravel was found to have been 

wrongfully converted, through October, 1985, when the verdict 

was reached, was $3.25 per cubic yard. 

We remand for a redetermination of damages in accordance 

with this decision. 

The next issue raised by appellant is whether appellant 

is entitled to reasonable expenses incurred in the pursuit of 

recovering possession of his property under § 27-1-320, MCA. 

Section 27-1-320 provides that "the detriment caused by 

wrongful conversion of personal property is presumed to be: 

. . . (b) a fair compensation for the time and money 

properly expended in pursuit of the property." 

Appellant testified that he spent considerable time 

attempting to regain his property from the defendants. He 

further testified that he rounded off the estimated time 

spent at 100 hours. Since he has never charged for his labor 

at an hourly rate, he picked $lOO.OO/hour as commensurable 

with his productivity. At trial an objection was made by 

defendant that this statement of his hourly worth was 

conclusory. The court overruled the objection. Appellant 

now contends that the court is estopped from rejecting the 

testimony as "speculative" and refusing to award appellant 

anything for the pursuit of his gravel, as was done in the 

District Court's decision. 

The issue here is not whether the testimony was 

speculative or conclusory. The issue is whether appellant is 

entitled to reasonable expenses incurred in pursuit of his 

property. The District Court held that he was entitled to 
fair compensation for the time and money he properly expended 

in the pursuit of his property. We agree. 

It was an abuse of the court's discretion to find 

appellant was entitled to compensation under 5 27-1-320 (b) , 

MCA, and then award appellant nothing. On remand, fair 

compensation must be determined. 

Tied to the preceding issue is the question of whether 

attorney fees are properly included as "time and money" 

properly expended. The District Court denied appellant 

attorney fees based on the lack of a contract or statute 

providing for them. The general rule is that "in absence of 

statute or contract, attorney fees will not be awarded." 

Martin v. Randono (Mont. 1981), 623 P.2d 959, 962, 38 St.Rep. 

209, 212. It is well established in Montana that the term 

"costs" does not include attorney fees, 623 P.2d at 962; 

Tomten v. Thomas (1951), 125 Mont. 159, 165, 232 P.2d 723, 

727. Section 27-1-320, MCA does not explicitly state that 

attorney fees are to be considered in an award of time and 

money expended in pursuit of appellant's property. Neither 

does the statute contain the term "costs." However, the 

statutory terms "expenses" and "money expended" mean 

virtually the same thing as cost^.'^ Precedent tells us that 

"costs" do not contemplate attorney fees and we hold that 

attorney fees were properly denied by the District Court. 

The fifth issue raised by appellant is whether the 

District Court erred by awarding damages for trespass to 

respondent. 

Whether trespass occurred and whether there were 

consequential damages to respondent's property is a question 

of fact to be determined by the trier of fact. The District 

Court determined that there was substantial evidence to 

sustain a charge of trespass. The court found further that a 

"nominal" award of $500.00 for damages was appropriate. The 
record does not contradict this finding and we affirm the 

award. 

The final issue of whether damages should be based on 

equity or whether an award must be made in accordance with S 

27-1-320, MCA, has been adequately addressed and we need not 

discuss it further. 

The decision of the District Court is reversed and 

remanded for a re-evaluation of damages consistent with this n 

Opinion. 

We Concur: / 

v Chief Justice 

/ Justices \