No. 86-462 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1987 

MICHAEL J. BELL and LINDA L. BELL, 

Plaintiffs and Respondents, 

vs 

KANNON C. RICHARDS and MARJORIE P. RICHARDS, 

Defendants and Appellants. 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone, 

The Honorable Robert W. Holmstrom, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

JOCK B. WEST, Billings, Montana 

For Respondent : 

MATOVICH, ADDY and KELLER; John K. Addy, 

Billings, Montana 

Submitted on Briefs: June 18, 1987 

Decided: August 26, 1987 

AUG 2 ,: 737 

Filed: 

Clerk 
Mr. Justice William E. Hunt, Sr., delivered the Opinion of 

the Court. 

This is an appeal from the Thirteenth Judicial District, 

Yellowstone County, Montana, from an order denying 

defendants ' motion to amend findings of fact, conclusions of 

law and judgment. 

We reverse and remand. 

The sole issue before this Court is whether the District 

Court erred in dismissing the defendants' motion to amend 

findings of fact, conclusions of law and judgment to allow 

attorneys fees. 

The parties in this case were involved in a contractual 

sale of land which the plaintiffs purchased from the 

defendants as an intended homesite. Upon preparation to 

obtain necessary permission from governmental authorities to 

build a house on the land, the plaintiffs discovered that the 

water table level was too near the surface of the ground to 

permit construction of a water supply or sewage disposal. To 

rectify the problem, the plaintiffs would have to bring in 

fill material, let it sit undisturbed for two years and then 

have the land retested. There was no assurance, even then, 

that the requisite permission to build would be granted. 

The plaintiffs filed suit against the defendants 

claiming that they knew, or should have known, about the 

building restrictions on the land at the time of the sale. 

The plaintiffs allege further that due to this knowledge and 

knowledge of their intention to use the land as a homesite, 

plaintiffs should be excused from performance of their 

obligations under the contract and be reimbursed for amounts 

already paid to the defendants. 
The original contract contained a provision which 

stated: 

Buyer has made an independent investigation of the above mentioned property 

and has entered into this Agreement 

placing full reliance upon such independent investigation and it is understood 

and agreed that there are no representations or warranties other than those 

herein expressed on the part of the 

Seller. 

and another which stated: 

In the event that either party may 

institute legal action for the enforcement of any right, obligation, provision 

or covenant of this Agreement, the 

prevailing party shall be entitled to a 

reasonable attorney's fee in addition to 

costs of suit. In addition, Seller 

shall be entitled to their reasonable 

attorney's fee in the event Seller has 

to furnish a default notice to Buyer. 

The District Court dismissed plaintiffs' complaint with 

prejudice and awarded defendants "costs incurred." 

The defendants moved the court to amend its findings of 

fact, conclusions of law and judgment pursuant to Rules 52(b) 

and 59 (a) , M.R.Civ.P. to include attorney fees. This motion 

was denied on the basis that: (1) defendants abandoned their 

claim for attorney fees by neglecting to state a claim for 

them in their pretrial order and (2) because no evidence 

relative to fees was introduced during trial and therefore 

cannot be added as a post-trial issue. 

Rule 16, M.R.Civ.P., relating to pretrial procedures is 

a permissive, not a mandatory rule. Lenz v. Mehrens (1967) , 

149 Mont. 394, 397, 427 P.2d 297, 298. 

One of the purposes of pretrial conferences is to 

"substantially reduce the danger of surprise at trial." 6 
Wright & Miller, Federal Practice and Procedure: Civil, 5 

1522, at 566. 

Rule 16(e), M.R.Civ.P., states that after a pretrial 

conference, a pretrial order "shall control the subsequent 

course of the action unless modified by a subsequent order. 

The order following final pretrial conference shall be 

modified only to prevent manifest injustice." 

A pretrial order, however, should be liberally 

construed to permit any issues at trial that are 

"embraced within its language." United States v. 

First National Bank of Circle (9th Cir. 1981), 652 

F.2d 882, 886-87. 

Miller v. Safeco Title Ins. (9th Cir. 1985), 758 F.2d 364, 

368. 

This Court held in Northwestern Union Trust Co. v. Worm 

(Mont. 1983), 663 P.2d 325, 327-28, 40 St.Rep. 758, 761-62, 

that Rule 15 (b) , M.R.Civ.P., buffers the application of the 

language in Rule 16. 

Rule 15 (b) , states: 

When issues not raised by the pleadings are tried 

by express or implied consent of the parties, they 

shall be treated in all respects as if they had 

been raised in the pleadings. Such amendment of 

the pleadings as may be necessary to cause them to 

conform to the evidence and to raise these issues 

may be made upon motion of any party at any time, 

even after judgment; but failure to so amend does 

not affect the result of the trial of these issues. 

If evidence is objected to at the trial on the 

ground that it is not within the issues made by the 

pleadings, the court may allow the pleadings to be 

amended and shall do so freely when the 

presentation of the merits of the action will be 

subserved thereby and the objecting party fails to 

satisfy the court that the admission of such 

evidence would prejudice him in maintaining his 

action or defense upon the merits. The court may 

grant a continuance to enable the objecting party 

to meet such evidence. 
In the present case, attorney fees were contractually 

agreed to by the parties. The issue of whether they should 

be awarded is not one which would have been argued at trial. 

It cannot be claimed that there would be any surprise, 

inadequate opportunity for discovery or a lack of preparation 

which could unfairly prejudice the plaintiffs by awarding 

attorney fees to the defendants. Both parties anticipated an 

award of attorney fees if they prevailed in court, so neither 

party argued the issue at trial. 

Under S 28-3-704, MCA, contractual rights to attorney 

fees are reciprocal when the party from whom one is requesting fees has an express right to attorney fees. Lasar v. 

Bechtel Power v. Oftedal (Mont. 1986), 727 ~.2d 526, 528, 43 

Section 28-3-704, MCA, states: 

Whenever, by virtue of the provisions of any 

contract or obligation in the nature of a contract 

made and entered into at any time after July 1, 

1971, one party to such contract or obligation has 

an express right to recover attorney fees from any 

other party to the contract or obligation in the 

event the party having that right shall bring an 

action upon the contract or obligation, then in any 

action on such contract or obligation all parties 

to the contract or obligation shall be deemed to 

have the same right to recover attorney fees and 

the prevailing party in any such action, whether by 

virtue of the express contractual right or by 

virtue of this section, shall be entitled to 

recover his reasonable attorney fees from the 

losing party or parties. 

It is clear from the language contained in the parties' 

contract that they intended for attorney fees to be awarded 

to the successful party in the event of a lawsuit. This 

right to attorney fees was claimed on the Bells1 complaint, 

the Richard.sl answer and counterclaim and on the pretrial 

order, under "plaintiffs1 contentions," and under "issues of 
fact." Under "issues of fact" on the pretrial order, issue 

no. 8 stated: "The extent of attorneys' fees incurred by the 

plaintiffs/defendants." 

The defendants did not abandon their right to attorney 

fees by failing to mention the issue under "defendants' 

contentions" on the pretrial order. The right is reciprocal. 

Presumably, since the plaintiffs mentioned the issue in the 

pretrial order, if they had been successful in the lawsuit, 

they would have been awarded attorney fees and costs. The 

plaintiffs had a contractual right to attorney fees, and 

pursuant to S 28-3-704, MCA, so do the defendants. 

The District Court reasoned further that, since there 

was no evidence introduced at trial with respect to attorney 

fees, to award attorney fees after a judgment was announced 

would amount to an issue being raised post-trial. However, 

the issue of attorney fees is - not outside the court's record. 

The contract upon which the court relied in deciding the 

dispute is before the court as evidence. A provision of that 

contract clearly provides for attorney fees to the successful 

party in a lawsuit concerning the contract. Also, the issue 

of attorney fees was raised in two places on the pretrial 

order. 

Reversed and remanded to the District Court to determine 

reasonable attorney fees and for judgment to appellants for 

such fees.