Opinion ID: 887905
Heading Depth: 1
Heading Rank: 4

Heading: issues

Text: ¶ 20 Did the District Court abuse its discretion by awarding attorney fees to SAIF? ¶ 21 Martin argues that the District Court abused its discretion by awarding attorney fees to SAIF as provided in § 27-8-313, MCA. Martin argues that under Buxbaum an award of fees must be necessary and proper. He contends that the court's award of fees was not necessary and proper on the grounds that SAIF failed to satisfy the tangible parameters test. ¶ 22 Montana follows the general American Rule that a party in a civil action is not entitled to attorney fees absent a specific contractual or statutory provision. Buxbaum, ¶ 19 (citing Mountain West Farm Bureau v. Hall, 2001 MT 314, ¶ 13, 308 Mont. 29, ¶ 13, 38 P.3d 825, ¶ 13). This Court previously stated in Buxbaum that § 27-8-313, MCA, provides a statutory basis for awarding attorney fees in declaratory judgment actions. Buxbaum, ¶ 42. The award of attorney fees must be necessary and proper. Buxbaum, ¶ 42. Buxbaum fails to define what constitutes necessary and proper. ¶ 23 This Court has adopted, however, the tangible parameter test to determine whether attorney fees are necessary and proper. Renville v. Farmers Ins. Exchange, 2004 MT 366, ¶ 27, 324 Mont. 509, ¶ 27, 105 P.3d 280, ¶ 27. The tangible parameters test provides that fees are necessary and proper when (1) an insurance company possesses what the plaintiffs sought in the declaratory relief action; (2) it is necessary to seek a declaration showing that the plaintiffs are entitled to the relief sought; and (3) the declaratory relief sought was necessary in order to change the status quo. Renville, ¶ 27. ¶ 24 Here, of course, we must conduct the necessary and proper analysis with the roles reversed: Martin possessed the settlement proceeds from Crossroads. Martin nevertheless filed the declaratory judgment action to prevent SAIF from obtaining a portion of that settlement. This Court set forth examples in Buxbaum demonstrating that attorney fees were necessary and proper in instances where a plaintiff had to bring a declaratory action to obtain coverage or when no other alternative was available to remove the cloud from the title to property. Buxbaum, ¶ 44. ¶ 25 In the instant case, the District Court relied heavily on the fact that SAIF was required to litigate identical issues in different forums, which affects its ultimate recovery and ability to be made whole from this ongoing, identical litigation in two separate forums. The District Court focused on the fact that SAIF ultimately prevailed in the litigation rather than thoroughly articulating why an award of attorney fees to SAIF would be necessary and proper. ¶ 26 Unlike the plaintiffs in Buxbaum and Renville, Martin did not seek to obtain coverage or indemnification. Martin filed the declaratory judgment action to prevent SAIF from collecting a portion of his third-party settlement with Crossroads. Martin sought a determination from the District Court that Montana law would control the subrogation rights. SAIF cannot satisfy even the first prong of the tangible parameters test as it actually sought proceeds from Martin's settlement. ¶ 27 Moreover, it was not necessary to SAIF to seek a declaration from the Montana court in order to change the status quo. The Board already had issued an order directing Martin to distribute $12,222.22 to SAIF as its proper share of Martin's third-party settlement with Crossroads. Thus, SAIF cannot satisfy at least two elements of the tangible parameters analysis. ¶ 28 The District Court's reliance on the fact that SAIF prevailed, and therefore, should be entitled to attorney fees does not comport with the necessary and proper requirement set forth in Buxbaum. We hold that neither party is entitled to attorney fees under the American Rule. Sampson v. National Farmers Union Property, 2006 MT 241, ¶ 15, 333 Mont. 541, ¶ 15, 144 P.3d 797, ¶ 15. The District Court abused its discretion by awarding attorney fees to SAIF. We vacate the award. ¶ 29 Affirmed in part and reversed in part. We Concur: PATRICIA COTTER, W. WILLIAM LEAPHART, and JOHN WARNER.