Title: SLITERS v LEE
Citation: N/A
Docket Number: 81-313
State: Montana
Issuer: Montana Supreme Court
Date: March 2, 1982

No. 81-313 I N THE S U P R E M E COURT O F T H E STATE OF MONTANA 1981 - SLITERS, a Montana Corporation, P l a i n t i f f , VS. WILLIAM E. LEE, Defendant, Third P a r t y P l a i n t i f f , and Appellant, v s . P A U L ROSS, Third P a r t y Defendant and Respondent. Appeal from: D i s t r i c t Court of t h e Eleventh J u d i c i a l D i s t r i c t , I n and f o r t h e County of Flathead Honorable James M. Salansky, Judge presiding. Counsel of Record: For Appellant: P a t r i c k M. Springer, K a l i s p e l l , Montana For Respondent: A s t l e and A s t l e , K a l i s p e l l , Montana Thomas Hoover, Big Fork, Montana Submitted on b r i e f s : November 18, 1981 Decided : H A R 2 1982 Filed: MAR 2 1982 M r . Chief J u s t i c e Frank I. Haswell d e l i v e r e d t h e Opinion of t h e C o u r t . I n an a c t i o n on a t h i r d p a r t y complaint by t h e maker of a promissory n o t e a g a i n s t t h e a s s i g n o r , t h e District Court of F l a t h e a d County awarded judgment t o t h e a s s i g n o r i n c l u d i n g a t t o r - ney f e e s f o r a s u c c e s s f u l d e f e n s e . The maker a p p e a l s . W e r e v e r s e t h e award of a t t o r n e y f e e s . On November 3 , 1976, William Lee executed and d e l i v e r e d a promissory n o t e t o P a u l R o s s i n t h e p r i n c i p a l sum of $2,906.00. The n o t e provided t h a t r e a s o n a b l e a t t o r n e y f e e s incurred i n t h e c o l l e c t i o n of t h e n o t e would be paid by Lee. Ross l a t e r assigned t h e n o t e f o r v a l u a b l e c o n s i d e r a t i o n to S l i t e r ' s , a Montana C o r p o r a t i o n . When Lee r e f u s e d t o pay t h e n o t e when due, S l i t e r t s sued Lee. Lee f i l e d a t h i r d p a r t y c o m p l a i n t a g a i n s t Ross a l l e g i n g f r a u d u l e n t inducement f o r t h e n o t e , wrongful assignment of t h e n o t e , and l a c k of c o n s i d e r a t i o n . Following a bench t r i a l , t h e District Court awarded judgment i n c l u d i n g a t t o r n e y f e e s to S l i t e r ' s a g a i n s t L e e . O n t h e t h i r d p a r t y c o m p l a i n t , t h e District Court awarded judgment to t h e t h i r d p a r t y d e f e n d a n t Ross i n c l u d i n g a t t o r n e y f e e s . Third p a r t y p l a i n t i f f Lee a p p e a l s from t h e award of a t t o r n e y f e e s to t h i r d p a r t y d e f e n d a n t R o s s . The sole i s s u e on appeal is t h e award of a t t o r n e y f e e s i n t h e t h i r d p a r t y a c t i o n . The maker L e e contends t h e award was improper because t h e r e is n e i t h e r c o n t r a c t nor s t a t u t e a u t h o r i z i n g t h e award. The o r i - g i n a l payee and a s s i g n o r R o s s contends a t t o r n e y f e e s a r e reco- v e r a b l e under Montanat s r e c i p r o c i t y s t a t u t e which p r o v i d e s i n p e r t i n e n t p a r t : "Whenever, by v i r t u e of t h e p r o v i s i o n s of any c o n t r a c t . . . one p a r t y . . . h a s an e x p r e s s r i g h t to r e c o v e r a t t o r n e y fees from any o t h e r p a r t y t o t h e c o n t r a c t . . . i n t h e e v e n t t h e p a r t y having t h a t r i g h t s h a l l b r i n g an a c t i o n upon t h e c o n t r a c t . . . a l l p a r t i e s t o t h e c o n t r a c t . . . s h a l l be deemed to have t h e same r i g h t to r e c o v e r a t t o r n e y f e e s and t h e p r e v a i l i n g p a r t y i n any such a c t i o n , whether by v i r t u e of t h e e x p r e s s contrac- t u a l r i g h t o r by v i r t u e of t h i s s e c t i o n , s h a l l be e n t i t l e d to r e c o v e r h i s r e a s o n a b l e a t t o r n e y f e e s from t h e l o s i n g p a r t y . . ." S e c t i o n 28-3-704, MCA. T h i s s t a t u t e p r o v i d e s m u t u a l i t y of o b l i g a t i o n and remedy between t h e p a r t i e s t o a promissory n o t e e x p r e s s l y p r o v i d i n g f o r a t t o r n e y f e e s . I n o u r view, t h i s s t a t u t e is i r r e l e v a n t to t h e r i g h t of Ross t o an award of a t t o r n e y f e e s f o r s u c c e s s f u l l y d e f e n d i n g a g a i n s t Lee's t h i r d p a r t y a c t i o n . Ross's r i g h t t o a t t o r n e y f e e s was n o t d e r i v e d by v i r t u e of any r e c i p r o c a l r i g h t under t h e s t a t u t e . Lee was t h e maker of t h e n o t e and was g r a n t e d no r i g h t to a t t o r n e y f e e s t h e r e u n d e r . A s payee of t h e n o t e , R o s s was t h e o n l y p a r t y g r a n t e d any r i g h t to a t t o r n e y f e e s , under t h e p r o v i s i o n s of t h e n o t e . Thus Rossls r i g h t to a t t o r n e y f e e s must s t a n d o r f a l l upon t h e p r o v i s i o n s of t h e n o t e . R o s s a s s i g n e d a l l h i s r i g h t , t i t l e and i n t e r e s t i n t h e n o t e t o S l i t e r ' s l e a v i n g him no remaining c o n t r a c t u a l r i g h t to a t t o r n e y f e e s under t h e p r o v i s i o n s of t h e n o t e . Moreover, Lee's t h i r d p a r t y c o m p l a i n t a g a i n s t Ross a l l e g e d f r a u d u l e n t inducement f o r t h e n o t e , wrongful assignment, l a c k of c o n s i d e r a t i o n and sought to r e q u i r e Ross t o pay S l i t e r l s t h e amount owing on t h e n o t e t o g e t h e r w i t h damages and a t t o r n e y fees. I t was n o t an a c t i o n f o r c o l l e c t i o n of t h e n o t e f o r which a t t o r - ney f e e s were e x p r e s s l y provided. Thus Ross was n o t e n t i t l e d to a n award of a t t o r n e y f e e s under t h e p r o v i s i o n s of t h e n o t e . The g e n e r a l r u l e i n Montana is t h a t i n t h e absence of sta- t u t e o r c o n t r a c t , a t t o r n e y f e e s a r e n o t r e c o v e r a b l e . Joseph R u s s e l l R l t y . C o . v . Kenneally ( 1 9 8 0 ) , Mont. - - , 605 P.2d 1107, 37 St.Rep. 57, and cases c i t e d t h e r e i n ; Town Pump, Inc. v . Diteman (1981) Mont. , 622 P.2d 212, 38 St.Rep. 54. Here t h e r e is n e i t h e r c o n t r a c t nor s t a t u t e a u t h o r i z i n g an award of a t t o r n e y f e e s . The award of a t t o r n e y f e e s to R o s s is r e v e r s e d and ordered s t r i c k e n from t h e judgment. Chief J u s t i c e