DA 14-0466

IN THE SUPREME COURT OF THE STATE OF MONTANA

2015 MT 197N

M & M REPOSSESSION and TRANSPORT, LLC,

d/b/a M & M INVESTIGATION AND PROCESS SERVING,

 Plaintiff and Appellant,

 v.

FIRST MADISON VALLEY BANK,

d/b/a YELLOWSTONE BASIN BANK,

 Defendant and Appellee.

APPEAL FROM: District Court of the Fifth Judicial District,

In and For the County of Madison, Cause No. DV 29-11-95

Honorable Loren Tucker, Presiding Judge

COUNSEL OF RECORD:

For Appellant:

Kelton Olney, Luxan & Murfitt, PLLP, Helena, Montana

For Appellee:

James McLean, Andrew J. Willett, Drysdale, McLean & Willett, PLLP, 

Bozeman, Montana

Submitted on Briefs: May 6, 2015

 Decided: July 14, 2015

Filed:

__________________________________________

Clerk

July 14 2015

Case Number: DA 14-0466
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Justice Patricia Cotter delivered the Opinion of the Court.

¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating 

Rules, this case is decided by memorandum opinion and shall not be cited and does not serve 

as precedent. Its case title, cause number, and disposition shall be included in this Court’s 

quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. 

¶2 Plaintiff M & M Repossession and Transport, LLC (M & M), appeals from a 

judgment entered by the Fifth Judicial District Court, Madison County, in favor of Defendant 

First Madison Valley Bank. We affirm. 

¶3 M & M is a Montana limited liability company which provides various services, 

including collection and repossession services for creditors. M & M’s main office is located 

in Butte, Montana. First Madison Valley Bank is a Montana banking corporation with its 

main office in Ennis, Montana, and maintains additional branches including Yellowstone 

Basin Bank, First Boulder Valley Bank, and Montana City Bank (collectively “the Bank”). 

¶4 In the fall of 2010, the Bank had fallen behind in its collection efforts on past due or 

problem “non performing” borrowers and as a result was under regulatory pressure to 

remedy its accounts. Having collaborated with M & M in the past on repossession related 

work, the Bank invited M & M to present information on M & M’s additional collection 

services. M & M then met with Bank officers to explain its collection and repossession 

services and corresponding fee schedules utilizing a PowerPoint presentation and 

informational handouts.

¶5 In the ensuing days, M & M prepared and delivered to the Bank a proposed 

Independent Contractor Agreement and Schedule A. On or about October 26, 2010, the 
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parties signed the Independent Contractor Agreement. Schedule A was neither initialed nor 

signed by the parties. 

¶6 Paragraph 2 of the agreement, titled “Duties, Term, and Compensation,” provided the 

following: 

The Contractor’s duties, term of engagement, compensation and provisions for 

payment thereof shall be as set forth in the estimate previously provided to the 

Company by the Contractor and which is attached as Exhibit A, which may be 

amended in writing from time to time, or supplemented with subsequent 

estimates for services to be rendered by the Contractor and agreed to by the 

Company, and which collectively are hereby incorporated by reference. 

The only fee schedule previously provided to the Bank was outlined in M & M’s PowerPoint 

presentation. M & M did provide some additional repossession fees in an email, which was 

incorporated into Schedule A. 

¶7 Schedule A specified “Duties” as follows: 

The Contractor will [assist the Bank] in the duties of Past Due Collections, 

Repossessions, Collection of Charge Off accounts, Work Outs – Mitigate loan 

loss, Locating, Skip tracing and Investigation procedures as the Company may 

require. . . .and shall fulfill any other duties reasonably requested by the 

Company and agreed to by the Contractor. 

¶8 This dispute revolves around M & M’s claims for compensation under the agreement 

as it relates to M & M’s services on six of the Bank’s loan accounts. The Bank readily 

disagreed with M & M’s demand for a percentage fee totaling approximately $300,000 for 

M & M’s services rendered on the six accounts. Consequently, the Bank suspended the 

work M & M was doing under the agreement. 

¶9 On November 25, 2011, M & M filed suit against the Bank seeking damages for 

breach of contract, breach of the implied covenant of good faith and fair dealing, and an 
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alternative claim for unjust enrichment. The Bank answered and counterclaimed. The 

District Court held a two-day non-jury trial commencing on September 30, 2013. Following 

trial, the court issued its Findings of Fact and Conclusions of Law in which it determined 

that the fee schedule set forth in Schedule A was both ambiguous and confusing. The court 

then incorporated the fee schedule information proffered in M & M’s PowerPoint 

presentation as extrinsic evidence to assist in construing the parties’ agreement, citing § 28-

2-905(2), MCA (addressing when extrinsic evidence concerning a written agreement may be 

considered). The court also considered the circumstances surrounding the execution of the 

agreement. 

¶10 The court concluded that the Bank had not assigned or transferred ownership of any 

of the disputed accounts to M & M. It found that the Bank had only engaged M & M to 

complete a series of discrete tasks, none of which authorized M & M to pursue entire debt 

collections in its own discretion or entitled it to the claimed percentage fees. In reviewing 

the nature of M & M’s completed services, the court determined that M & M was entitled to 

a reasonable fee on a quantum meruit basis rather than a percentage fee because the 

percentage fees applied only to “Bad Debt” collections. Citing the Bank’s expert witness’ 

“fair and reasonable” estimations, the court ordered the Bank to pay $52,363.50 to M & M 

for its services and fees and additional amounts totaling $1,750.00 and $500.00 on other 

specified accounts. The court dismissed M & M’s claim for breach of the covenant of good 

faith and fair dealing with prejudice. M & M appeals. 

¶11 M & M contends that the District Court erred in utilizing M & M’s PowerPoint 

presentation as extrinsic evidence in order to construe the agreement’s fee schedules, and 
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that the court erred by allowing M & M to recover fees only on a quantum meruit basis. It 

argues that its payment schedule was unambiguous. We disagree and concur with the 

District Court’s determination that the agreement’s percentage fee schedule was completely

ambiguous. Schedule A provided verbatim in pertinent part:

 Thirty Five 35% percent – for all accounts Turned for collection

 Less than 1 year old 50% over one year old.

 Fifty 50% percent – on all accounts that go Legal- we have our own 

staff attorneys- we prepare our own summons and complaints and do 

all court filings and court litigation.

¶12 Schedule A’s fee schedule is confusing and fails to describe the manner in which the 

fee schedule applies. As such, we find the District Court appropriately utilized M & M’s 

PowerPoint presentation as extrinsic evidence to interpret the agreement as it related to 

M & M’s work on behalf of the Bank’s accounts. See Mary J. Baker Revocable Trust v. 

Cenex Harvest States, Coops., Inc., 2007 MT 159, ¶ 19, 338 Mont. 41, 164 P.3d 851

(“construction and interpretation of a contract is a question of law” and “[l]ikewise, whether 

an ambiguity exists in a contract is a question of law”) (citations omitted). 

¶13 We further conclude that the District Court appropriately compensated M & M for the 

services it rendered to the Bank and correctly interpreted the law as it relates to the Bank and 

M & M’s contractual relationship. See Larson Lumber Co. v. Bilt Rite Constr. & 

Landscaping LLC, 2014 MT 61, ¶ 26, 374 Mont. 167, 320 P.3d 471 (“We review a district 

court’s conclusions of law to determine whether the court’s interpretation of the law is 

correct.”). We therefore uphold the District Court’s Findings of Fact and Conclusions of 

Law. 
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¶14 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our 

Internal Operating Rules, which provides for memorandum opinions. The District Court’s 

findings of fact are supported by substantial evidence and the legal issues are controlled by 

settled Montana law, which the District Court correctly interpreted. 

¶15 Affirmed. 

/S/ PATRICIA COTTER

We Concur:

/S/ MIKE McGRATH

/S/ MICHAEL E WHEAT

/S/ BETH BAKER

/S/ JIM RICE