No. 82-377 

& 82-378 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

M. E. WALTERS , 

Plaintiff, 

PAUL CAMPEAU, 

Defendant and Appellant, 

FRED G. CARL AND JOAN A. CARL, 

Defendants and Respondents, 

and 

WILLIAM P. CHILCOTE, 

Petitioner and Ap2ellant. 

ORIGINAL PROCEEDING : & 

APPEAL FROM: District Court of the Fourth Judicial District, 

In and for the County of Missoula, 

The Honorable Jack L. Green 

COUNSEL OF FGCORD: 

For Petitioner/Appellant: 

James J. Benn; Boone, Karlberg & Haddon, Missoula, 

Montana (argued) 

For Respondents: 

Moses Law Firm; Charles Moses (argued), Billings, 

Montana 

McChesney and Borg, Missoula, Montana 

William R. Baldassin, Missoula, Montana 

- ----- 

Submitted: MaY 311 1983 

Decided: September 2, 1983 

Filed: SEP 2 - 1983 

---- Clerk 
Mr. Justice Fred J. Weber delivered the Opinion of the Court. 

William P. Chilcote (Chilcote) , not a party to the 

original action, seeks a Writ of Review and appeals from the 

determination by the District Court of the Fourth Judicial 

District, Missoula County, that Chilcote was in contempt of 

court, and that Fred G. Carl and Joan A. Carl (Carls) should 

therefore have judgment against him for $40,350. We reverse 

the judgment of the District Court. 

While a number of issues have been stated by the 

parties, we restate the controlling issue: Does the evidence 

support the findings of the District Court, its conclusion of 

contempt by Chilcote, and its judgment of $40,350 against 

Chilcote? 

The Carls entered into a contract for the construction 

by Paul Campeau (Campeau) of four duplexes in Missoula, 

Montana. During construction, a mechanic's lien was filed by 

plaintiff Walters. Walters obtained summary judgment against 

Campeau and is no longer a party to the controversies between 

Campeau and Carls. 

After trial of the claims for relief by Carls against 

contractor Campeau, the Carls obtained judgment against 

Campeau on April 27, 1981 for breach of contract. The 

District Court ordered that the necessary repairs be made to 

correct substantial defects in the four duplexes, Campeau was 

ordered to pay to Carls the cost of the correction, repairs 

and related expenses, the total of which was not to exceed 

$30,000 per unit, i.e. $120,000. Campeau failed to complete 

the improvements or payments. 

Carls recorded their $120,000 judgment against Campeau 

in Richland County, Montana. Campeau and Chilcote were 

engaged in a joint venture in Richland County where they were 
constructing and selling residences. The Campeau-Chilcote 

joint venture had nothing to do with the Missoula County 

construction contract, and Chilcote d.id not in any way 

participate in the construction of the Carls' Missoula County 

duplexes. 

In order to obtain title insurance required for the sale 

of the Richland County houses, Chilcote personally borrowed 

$120,000 from First National Bank in Missoula and deposited 

that $120,000 in Richland National Bank of Sidney, pursuant 

to a written agreement between the title and abstract 

companies and the bank whereby the $120,000 would protect the 

title to the Richland County properties against the Carls' 

judgment. That agreement provided that Chilcote was to be 

treated as the sole owner of the fund and that all funds were 

to be returned to Chilcote upon termination of the trust 

account. 

Next the Carls moved the District Court to force 

Campeau's compliance with the April 27, 1981 court order. A 

hearing was held. The District Court issued an order on 

November 4, 1981, allowing Campeau to complete the repairs to 

the duplex under supervision of designated architects. 

Security for payment of materialmen and subcontractors was 

ordered in the form of an interest-bearing account 

established in the amount of $60,000. Campeau's attorney, 

William Baldassin, was to maintain the account in the name of 

William Baldassin, Trustee, to be used to pay materialmen and 

subcontractors. That order also required the Carls to 

release the property in Richland County from the lien of the 

April 27, 1981 judgment, so that "the defendant Campeau's 

funds can be released from the sale of the residences and be 

transmitted to Mr. Baldassin as Trustee." The order did not 
name Chilcote in any manner and did not require or prohibit 

any conduct on his part. 

Pursuant to the November, 1981 order, Carls executed 

partial releases of judgment on the Richland County 

properties. The releases were forwarded by Carls' counsel to 

Mr. Baldassin, Campeau's counsel. Campeau's counsel 

forwarded the releases to the abstract company in Sidney. In 

his letter forwarding the releases, Baldassin asked the 

abstract company to "notify the bank that the judgments have 

been released and that they [the bank] can release all monies 

held in the Chilcote account to me for deposit in my trust 

account. I' 

At this point the testimony and understanding of 

Campeau's attorney, the abstract company and the bank is at 

variance. The attorney's letter to the abstract company did 

not condition recording of the releases upon the receipt by 

the attorney of the $60,000, but instead requested 

notification of the bank that it "can release" all monies 

held in the Chilcote account for deposit in the attorney's 

trust account. The attorney testified that he understood 

that he was to receive the $60,000 in return for the 

releases, and that he was not aware of any misunderstanding 

on this point between the officers of the abstract company or 

the bank and himself. In contrast, the officer of the 

abstract company testified that he did not understand this to 

be a conditional delivery of the releases, and he therefore 

recorded the releases, advised the bank of that recording, 

and furnished them a copy of the attorney's letter. In turn, 

the bank officer testified that he contacted his legal 

counsel, who advised him to return the $120,000 to Chilcote, 

which he did. 
The sales of the Richland County houses were completed 

and Chilcote received the net sales proceeds, as well as the 

balance of the $120,000 deposit in the Richland Bank. 

Chilcote repaid his $120,000 personal loan to the Missoula 

bank. 

On November 23, 1981 he paid $60,000 to Campeau as 

Campeau's share of their joint venture profits in Richland 

County. This is the action which the District Court found to 

be contemptuous in that it frustrated the November 4, 1981 

order of the court requiring that $60,000 be held in a trust 

account with Mr. Baldassin as trustee. While Chilcote was 

not involved in the Missoula County construction, the 

contract problems or the court action between the Carls and 

Campeau, Chilcote was aware of the plan for a $60,000 trust 

account with Mr. Baldassin as trustee. Chilcote's testimony 

with regard to his $60,000 payment to Campeau is as follows: 

"Q. You had some awareness of the supplementary 

hearing in October, did you not? A. Yes. 

"Q. And you know that Mr. Baldassin wanted 

$60,000? A. Yes. 

"Q. But did you have any knowledge that anyone had 

required you to provide that $60,000 to any of 

them? A. No. 

"Q. What did you do with the money that Mr. 

Campeau had coming out of the proceeds of the sale? 

A. In November, you mean? 

"Q. Yes. A. I paid it to him. He's got all the 

money. 

"Q. At the time you paid it to him because you 

knew generally what was going on, did you tell him? 

A. ---- I told him he better get that money -- down and 

L--- ive it to Bill Baldassin, right, Bill? 

"Q. Did he acknowledge to you that he would do 

that? A. He said he wasn't going to get me in 

trouble. 

"Q. That didn't prove to be accurate, did it? 

A. No." (emphasis added) 
Campeau paid $2,650 to the Carls and $17,000 to 

Baldassin, which was deposited in the trust account. Campeau 

then disappeared and none of the parties were able to bring 

him before the court during the balance of the proceedings. 

At oral argument counsel advised the court that Campeau 

apparently was in Australia. 

On December 30, 1981, Carls petitioned the District 

Court to find Baldassin, Campeau and Chilcote guilty of 

contempt for failure to obey the supplemental order. By 

order filed August 2, 1982, the District Court concluded that 

Chilcote "frustrated the order of this Court and prevented 

its execution and should be held in contempt of this Court 

and required to comply with the order . . . dated November 4, 

1981. " Judgment in favor of Carls was entered on August 10, 

1982 against Chilcote in the amount of $40,350, together with 

costs of suit. 

Chilcote then petitioned for a Writ of Review and also 

appealed. This consolidates challenges to the finding of 

contempt and to the money judgment. Does the evidence 

support the holding of contempt by the District Court? 

The rule with regard to our review of contempt 

proceedings is well stated in our opinion in Matter of 

Graveley (1980), Mont . , 614 P.2d 1033, 1039, 37 

St.Rep. 1261, 1267, as follows: 

"It is the rule that on review of contempt 

proceedings, the Supreme Court determines only 

whether the District Court acted within 

jurisdiction, and whether or not the evidence 

supports the finding and order. State - v. District 

Court of Twelfth Judicial Dist. (1968), 151 Mont. 

41, 437 438 P.2d 563; State v. Second Judicial 

Dist. Court (1935), 99 Mont. 209, 41 P.2d 1113." 

Chilcote does not contend that the court does not have 

jurisdiction because he is not a party to the proceeding 

between the Carls and Campeau. Graveley establishes there is 
no such limitation in Montana. In that case, the sheriff who 

was neither a party nor otherwise present in the courtroom 

was nonetheless found guilty of contempt for his disobedience 

of the order of the court. 

The specific statute which applies is section 3-1-501, 

MCA, which in pertinent part states: 

"(1) The following acts or omissions in respect to 

a court of justice or proceedings therein are 

contempts of the authority of the court: 

" (e) disobedience of any lawful judgment, order, 

or process of the court; 

"(i) any other unlawful interference with the 

process or proceedings of a court;" 

The pertinent portions of the District Court's August 2, 

1982 findings of fact are as follows: 

XIV. 

"However the court finds that Mr. William Chilcote 

knew of the order of this Court and the 

requirements thereof through his attorney, through 

conversations and agreements with Mr. Campeau and 

through conversations with Mr. William Baldassin; . . . The Court further finds that Mr. Chilcote paid 

to Mr. Campeau two checks in the amounts of $45,000 

and $15,000, making a total of $60,000, from the 

sale of said residences; 

"That William Chilcote not only knew of the order 

of this Court and the requirements of said order, 

but contrary to such order did the things and 

performed the acts as herein described, frustrating 

the Court's order and enabling Mr. Campeau to not 

perform the improvements upon the premises, and 

prevented the delivery of $60,000 to be placed in 

trust as required by the order." 

Section 3-1-501, MCA requires that there be a 

disobedience of a judgment, order or process, or other 

unlawful interference with process or proceedings. There was 

no judgment, order or process in any manner directed to 

Chilcote individually, and in the absence of any finding by 
the court that there was a disobedience of a judgment, order 

or process, it is clear that the facts do not substantiate a 

finding of contempt under section 3-1-501(l)(e), MCA. 

Therefore, we must conclude that the court found 

Chilcote guilty of contempt under subparagraph (i) , by some 

unlawful interference with the process or proceedings of the 

court. There is nothing in the findings or in the evidence 

which shows any unlawful interference on the part of Chilcote 

with the process or proceedings, unless the facts can be 

stated in such a manner as to show that Chilcote in some 

manner interfered with the deposit of the $60,000 in Mr. 

Baldassin's trust account. We here make reference to the 

above-quoted testimony on the part of Chilcote. There is no 

evidence to contradict his testimony that he told Campeau 

that "he better get that money down and give it to Bill 

Baldassin." Campeau advised Chilcote he would not get him in 

trouble, which is of course exactly what he did. 

In analyzing the evidence and the findings, we do find 

evidence to sustain the conclusion of the District Court that 

Chilcote knew of the requirement for the $60,000 deposit with 

Mr. Baldassin. The facts also show that there was no 

requirement by order, instruction or otherwise, that Chilcote 

deliver the $60,000 to Campeau's attorney, rather than to 

Campeau himself. There are no facts to support the 

conclusion of the District Court that Chilcote frustrated the 

court's order and prevented the $60,000 from being placed in 

trust. The facts only show that Chilcote delivered the 

$60,000 to Campeau with instructions to deliver the same to 

his own counsel, Mr. Baldassin. Unfortunately, Chilcote 

trusted Campeau when Campeau was not worthy of that trust and 

"left the country." In a similar manner, the Carls, their 

attorney and the District Court also extended trust to 
Campeau, believing that he would complete the construction 

according to his obligations and make payments as required. 

Unfortunately he proved unworthy of that trust. 

We can understand and sympathize with the sense of 

frustration on the part of the District Court, which devoted 

so much time and effort to work out a just solution of the 

controversies between the Carls and Campeau, and concluded 

with the unfortunate result that by court order the liens on 

the Richland County property had been released and yet the 

$60,000 had not been deposited in trust for the protection of 

the Carls. It is clear that there was a frustration of that 

order of the District Court. The facts show that it was Mr. 

Campeau (and not Mr. Chilcote) who frustrated the court's 

order and failed to deliver the entire $60,000 as he was 

required to do. Clearly Campeau was in contempt of the 

court. Clearly Chilcote did not prevent the payment by 

Campeau of the $60,000 into trust by his delivery of the 

funds to Campeau with instructions they be delivered to 

Campeau's own attorney. 

We therefore hold that there is not sufficient evidence 

to support the finding and order of contempt. As a result, 

the judgment for $40,350, together with costs of suit, must 

fall. Having reached this conclusion, there is no need to 

address the other issues raised by the parties. 

We reverse the finding and order of contempt on the part 

of Chilcote, reverse the judgment entered for the Carls 

against Chilcote, and remand for appropriate action by the 

District Court. 
We concur: 

au.@ad 

Chief Justice 

Justices 
Mr. Justice John C. Sheehy dissenting: 

I dissent. 

In this case, Chilcote, knowing of the existence and 

provisions of the District Court order, is guilty of an 

unlawful interference with , . the proceedings of the District 

Court. Section 3-1-50 k) (i) , MCA. For such contempt, he is 

liable to the power of the District Court, even though he is 

not a party to the underlying action. The power of the 

District Court reaches to any person or officer who is in 

contempt of the authority of the court by misbehavior in 

office or by any other unlawful interference with the process 

of proceedings of the court. See McPartlin v. Fransen 

(1978), 178 Mont. 178, 582 P.2d 1255. 

This Court is failing to recognize that a district court 

has the power to enforce its order by contempt proceedings. 

Our statutes recognize this, when they include: 

"Section 3-1-520. Imprisonment to compel performance. When the contempt consists in [sic] the 

omission to perform an act which is yet in the 

power of the person to perform, he may be 

imprisoned until he shall have performed it. In 

that case, the act must be specified in the warrant 

of commitment." 

What the District Court was doing in this case was 

attempting to follow the provisions of our statutes with 

respect to its power. We should modify the order of the 

District Court in this case so that a fine is levied against 

Chilcote for his past contempt in frustrating the lawful 

order of the court, and imprisonment ordered until he 

performs the act which the District Court had decreed in its 

order, unless it is now beyond his power to do so. 
In a civil contempt proceeding, a fine is imposed as 

punishment for past contemptuous conduct and imprisonment is 

ordered where the defendant refuses to do an affirmative act 

required by an order mandatory in its nature. See U. S. v. 

Montgomery (D. Mont. 1957), 155 F.Supp. 633. One who 

refuses to perform a judicial order which he is able to 

perform may be imprisoned until he complies with such order. 

State ex rel. Lay v. District Court, Fourth Judicial District 

in and for Ravalli County (1948), 122 Mont. 61, 198 P.2d 761. 

The only question before this Court is the propriety of 

the District Court order holding Chilcote in contempt. He is 

in contempt as long as he does not deposit with the trustee 

named in the order the sum of $60,000. Whether eventually he 

may be liable for the full amount of $60,000 to the remaining 

parties is a matter of a future determination after trial by 

a court. But, at this juncture, the question before this 

Court and before the District Court, is, should Chilcote have 

been required to place in deposit with the trustee the sum of 

$60,000? The majority opinion goes afield from this question 

and raises complications which are unnecessary to its 

decision. All we have to decide here is whether Chilcote, a 

nonparty, is subject to the contempt jurisdiction of the 

District Court. In this case, all of us seem to recognize 

that he is. Since he is subject to the contempt power of the 

court, the lawful order of the court, which otherwise appears 

proper, ought to be permitted. Otherwise, the District Court 

is powerless to enforce its orders. 

I would, therefore, modify the judgment of the District 

Court to require that Chilcote follow the order by depositing 

$60,000 with the trustee; and, unless it is beyond his power 

to do so, I would enforce the order through the permitted 
fine, and to such jail time as is necessary to bring about 

compliance with the court's order. Section 3-1-520, MCA. 

Once the money is on deposit with the trustee, the remaining 

questions as to the extent of Chilcote's liability could be 

litigated.