NO. 84-63 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1984 

THE GRAND COMPANY, a corporation, 

Plaintiff and Respondent, 

JIM SLACK & ASSOCIATES, INC., 

a corporation, WELLS FARGO 

TRAVEL AGENCY, INC., d/b/a 

WORLD CLASS TRAVEL, a corporation, 

WESTERN AGENCY, a corporation, 

Defendants and Appellants. 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone, 

The Honorable William J. Speare, Judge presiding. 

COUNSEL OF RECORD: 

For Appellants: 

Parker, Sweeney, Healow & Lee, Billings, Montana 

For Respondent: 

Moulton, Bellingham, Longo & Mather; Ward Swanser, 

Billings, Montana 

Submitted on Briefs: April 19, 1984 

Decided: AuguS.k 28, 1984 

Filed: ! 984 

-. --- . - 

Clerk 
Mr. Chief Justice Frank I. Haswell delivered the Opinicn of 

the Court. 

This appeal is from a judgment of Yellowstone County 

District Court awarding The Grand Company ("Grand" ) restitution of premises and damages pursuant to a commercial lease. 

The District Court additionally held that appellant ("Slack") 

was not entitled to relief from forfeiture and was not entitled to tender into court the amount of damages in accordance 

with section 70-27-205(3), MCA. The District Court further 

held that Slack was not entitled to relief from hardship 

pursua-nt to section 70-27-210, MCA. 

On March 14, 1981, The Grand Company and Jim Slack & 

Associates entered into a five-year lease agreement which 

provided for two additional five-year terms. The lease was 

for certain office space in downtown Billings, Montana. Part 

of the space rented was to be improved by the lessee, Slack, 

and Slack did expend at least $70,000 on improvements. 

Slack failed to make the July 1, 1983, monthly rental 

payment. In accordance with the terms of the lease, a notice 

of default was sent by Grand to Slack. This was followed by 

a three-day notice to quit. After Slack tendered a check 

that was returned for insufficient funds, Grand sent a notice 

indicating it was terminating the lease agreement. When 

Slack refused to give up the premises, Grand filed an unlawful detainer complaint on August 25, 1983. On September 14, 

1983, Slack attempted to settle the action by offering to 

remit all outstanding rent and costs to Grand. Grand refused 

the offer, trial was held and judgment entered in favor of 

Grand on December 15, 1983. 

As part of its findings of fact and con.clusions of law, 

the District Court found that the lease was terminated by the 
notice of termination dated August 1.0, 1983. Furthermore, 

the court found that since the lease was terminated according 

to its terms prior to initiation of the action, the lessee, 

Slack, had no rights to relief from forfeiture under section 

70-27-205 (3), MCA, or relief from hardship pursuant to section 70-27-210, MCA. 

Slack raises the following appealable issues: 

1. Did the District Court err in its finding that 

since the lease was terminated prior to the time of bringing 

this action, Slack ha.s no right to relief from forfeiture or 

hardship under sections 70-27-205(3) and 70-27-210, MCA? 

2. Did the District Court err in awarding attorney 

fees to Grand? 

3. Does Slack have an obligation to pay rent and other 

charges during the pendency of this action? 

The first issue is whether the District Court erred in 

its judgment for restitution of premises with regard to 

whether Slack was entitled to relief under sections 

70-27-205 (3) and 70-27-210, MCA. The pertinent portions of 

the judgment are as follows: 

"6. That Defendant is not entitled to 

relief from forfeiture and is not entitled to tender into Court the amount of 

damages in accordance with Section 

70-27-205 (3) , MCA. 

"7. That since the lease was terminated 

prior to bringing the unlawful detainer 

action, Defendant is not entitled to 

reinstate the lease by payment of the 

amount due and owing as rental payments 

a.nd is not entitled to relief from hardship in accordance with Section 

70-27-210, MCA." 
Section 70-27-205(3), MCA, reads: 

" (3) When the proceeding is for an unlawful detainer after default in the payment 

of the rent and the lease or agreement 

under which the rent is payable has not 

by its terms expired, execution upon the 

judgment shall not be issued until the 

expiration of 5 days after the entry of 

the judgment, within which time the 

tenant or any subtenant or any mortgagee 

of the term or other party interested in 

its continuance may pay into court for 

the landlord the amount found due as rent 

with interest thereon and the amount of 

damages found by the jury or the court 

for the unlawful detainer and the costs 

of the proceeding, and thereupon the 

judgment shall be satisfied and the 

tenant be restored to his estate; but if 

payment, as here provided, be not made 

within the 5 days, the judgment may be 

enforced for its full amount and for the 

possession of the premises. In all other 

cases the judgment may be enforced 

immediately." 

In order to bring a party under the protection of the 

statute, (a) the proceeding must have been for unlawful 

detainer after default in payment of rent; (b) the lease 

under which the rent was payable must not have by its terms 

expired; and (c) payment of rent, interest, damages and costs 

must be paid into court within five days of entry of 

judgment . 

Since this was an unlawful detainer action, part (a) is 

satisfied. An element at issue is whether part (b) is satisfied. The District Court held that the lease had been terminated pursuant to its terms before the unlawful detainer 

action was brought and, therefore, Slack is not afforded the 

benefit of the statute. We do not agree and, accord.ingly, 

reverse. 

Slack argues persuasively that the court should distinguish a lease which has expired under its terms from one 

which has been terminated for default on rental payments. We 
agree. The lease at issue does not "expire" under its terms 

until five years from the date Grand and Slack entered into 

the agreement. That five-year period has not yet expired. 

The lease, however, could be "terminated" according to its 

terms for default in rental payments. Termination of a lease 

under these circumstances is an event which occurs at any 

time prior - to the natural. expiration of the lease under its 

terms. In fact, the statute itself recognizes such a distinction. It provides relief from judgment when the proceeding is for unlawful detainer after default in rental payments 

- and when the lease has not by its terms expired. If it is 

determined that a lease expires upon default in rental payments, virtually no lessee would be able to avail himse1.f of 

the protective statutes. It was clearly not the intent of 

the legislature to enact protective legislation and yet set 

such stringent requirements so as to preclude any party from 

availing himself of its protection. The legislature obviously offered a second chance to anyone in default in rent under 

the terms of the lease during the natural life of the lease. 

Accordingly, we hold that Slack qualifies under part (b) of 

the elements required. 

The third requirement for coming under the protection 

of the statute (part (c) above) is that Slack pay into court 

within five days after entry of judgment the rental due with 

interest thereon, damages for unlawful detainer and costs. 

This Slack did not do. However, in its conclusions of la.w, 

the District Court stated: 

"That Defendant is not entitled to relief 

from forfeiture and is not entitled to 

tender into Court the amount of damages 

in accordance with Section 70-27-205 (3) , MCA. I' 
Under the circumstances, Slack cannot be penalized for 

not paying the amount of the judgment into the court. To do 

so would have been in contempt of court. Counsel for Slack 

took the correct approach of appealing the matter to this 

Court. Since Slack has either met the requirements of the 

statute or was prevented from doing so by the District Court, 

we hold that it is entitled to the benefits of the statute. 

The District Court also held that Slack was not entitled to relief from forfeiture due to hardship pursuant to 

section 70-27-210, MCA. This statute provides: 

"Relief against forfeiture of lease in 

-- case of hardship. (1) hec court may relieve a tenant against a forfeiture of 

a lease and restore him to his former 

estate in case of hardship where application for such relief is made within 30 

days after the forfeiture is declared by 

the judgment of the court, as provided in 

70-27-205. " 

The court held that relief was not available under this 

statute for the same reason it was not available under section 70-27-205(3): that the lease was terminated prior to the 

time the unlawful detainer action was instituted. 

The District Court in its findings of fact found that 

Slack made improvements to the leased premises in the amount 

of "at least $70,000.00." Under these circumstances, we can 

find no reason why Slack was not permitted to file a petition 

for relief under this statute. Accordingly, we reverse the 

District Court" ruling regarding section 70-27-210, MCA. 

The second issue is whether the District Court erred in 

awarding attorney fees to Grand. 
The clause in the lease which provides for attorney 

fees is as follows: 

"Section 9.04: Miscellaneous Default 

Clauses. In the event of breach of this 

lea.se, the party at fault shall and will 

pay to the other party all costs, reasonably [sic] attorneys' fees and other 

expenses which may be incurred by the 

said other party in enforcing his or its 

rights hereunder." 

Slack admitted fault and on September 14, 1983, offered to 

pay all hack rent, interest, attorney fees and costs. Grand 

refused payment and elected to proceed to trial. We note 

that the clause states that the party "at fault" shall pay. 

In this case, Slack was "at fault" until September 14, 1983, 

when it offered to pay all amounts due plus fees and costs. 

Since Grand rejected the offer, proceeded to trial and did 

not prevail on appeal, we hold that Grand is only entitled to 

attorney fees on this matter through September 14, 1983. On 

the other hand, Slack, though unsuccessful at the trial court 

level, has prevailed on appeal to the extent that we hold it 

is entitled to access to the protective statutes. Slack must 

now pay exactly what it offered to pay on September 14, 1983, 

to wit: Past due rent plus interest, fees and costs. Under 

these circumstances, Slack should not be charged with Grand's 

fees and costs past September 14, 1983. 

In summary, we hold Slack to be financially responsible 

for (1) all past due rent from date of default to date and 

interest thereon according to the terms of the lease; and (2) 

attorney fees and costs of Grand with regard to this matter 

through September 14, 1983. 
IV 

Slack also argues that there is no obligation to pay 

the judgment due to "plaintiff 's persistent and unjustified 

pursuit of remedies to which it was not entitled but which 

would only unjustly enrich it. . ." 

We find this argument to be without merit and 

nonpersuasive. We do not herein hold that Grand improperly 

brought the unlawful detainer action. We simply find that 

Slack should have been permitted to avail himself of the 

protection offered. by the statutes. 

We reverse and remand to the District Court for a 

hearing to determine the amounts due The Grand Company in 

accordance with this opinion. 

We concur: