No. 81-178
IN THE SUPREME COURT OF THE STATE OF MONTANA
1981
D. R. MATTHEWS,
Plaintiff and Respondent,
RAY I. BERRYPIIAN, ALICE M. BERRYMAN,
ESTHER E. BERRYMAN, EDWIN G. BROWN,
DOROTHEA F. BROWN, et al.,
Defendants and Appellants.
Appeal from: District Court of the Fourth Judicial District,
In and for the County of Missoula
Honorable Jack L. Green, Judge presiding.
Counsel of Record:
For Appellants:
Terry A. Wallace, Missoula, Montana
Zane K. Sullivan, Missoula, Montana
Tipp, Hoven & Skjelset, Missoula, Montana
Garlington, Lohn & Robinson, Missoula, Montana
For Respondent:
D. R. Matthews, Missoula, Montana
Garnaas, Hall, Riley & Pinsoneault, Missoula, Montana
Submitted on briefs: October 1, 1981
Decided: D ~ C ~
Filed: - 9 ,1981'
I/ I
I e
Clerk
Mr. Justice John C. Sheehy delivered the Opinion of the
Court.
This is an appeal from an adverse judgment on appellants'
counterclaims in a quiet title action in the Fourth Judicial
District, Missoula County. The case was heard without a
jury .
The facts, as found by the District Court follow.
D. R. Mathews, an attorney, had performed legal services
for Ray Berryman in certain civil and criminal matters. On
May 16, 1977, appellants Ray and Alice Berryman, husband and
wife, agreed in writing to pay respondent, D. R. Mathews,
his fees and to secure the payment by the execution and
delivery to him of their quitclaim deed to a tract of land
in Missoula County (Tract M). The quitclaim deed was to be
held as security for the respondent's fee, which was due on
April 20, 1978.
On April 20, 1978, appellants still owed respondent
$10,000. Respondent filed the quitclaim deed and brought
this action to quiet title to the property on or about May
10, 1978. The appellants counterclaimed for damages and
attorney's fees, charging fraud, coercion, duress, undue
influence, and violation of the Montana Unfair Trade Practices
Act.
The District Court found that appellants' counterclaim
was not supported by the evidence. It also found, however,
that the quitclaim deed operated as a mortgage on Tract M,
securing payment of the $10,000 fee owed to respondent. The
court, therefore, refused to quiet title in the respondent.
It ordered, instead, that appellants were to pay the $10,000,
plus interest, to respondent within 90 days. If the debt were
not paid within 90 days, the mortgage upon the property was
to be foreclosed, the property sold, and the debt satisfied
out of the proceeds of the sale. If the debt were paid
within 90 days, the property was to be reconveyed to appellants.
The following issues are presented for review:
1. Did the District Court err in finding no evidence
of fraud, duress, or undue influence on the part of respondent?
2. Did the District Court err in refusing to award
damages to appellants?
3. Did the District Court abuse its discretion in
awarding $10,000 in attorney's fees to respondent?
4. Did the District Court err in finding that respondent
had not committed an unfair trade practice?
We affirm the judgment against appellants.
The District Court did not err in finding no evidence
of fraud, duress, or undue influence on the part of the
respondent.
The record indicates that the Berrymans signed the
security agreement and quitclaim deed to Tract M on May 16,
1977, minutes before respondent was to defend Ray Berryman
in a criminal trial. Respondent had given the documents to
the Berrymans weeks before trial for their signatures, but
they had failed to execute the instruments. Respondent
testified that on the day of trial, May 16, he told the
Berrymans that he would immediately withdraw as counsel
unless the documents were signed before trial. This apparently
convinced them to sign. Ray Berryman was tried and received
a 30-year suspended sentence. One of the conditions of his
probation was that he clear the title to certain lots located
in Tract M.
A bill for $10,000 was sent to the Berrymans after the
trial. This bill was not paid. Respondent filed the quitclaim
deed and the security agreement sometime after the trial but
before April 20, 1978, the date by which the $10,000 was to
be paid.
According to section 28-2-102, MCA, consent is an
element essential to the existence of a contract. Consent
must be free, section 28-2-301, MCA, and an apparent consent
is not free when obtained through duress, fraud, or undue
influence. Section 28-2-401, MCA.
Duress, defined by section 28-2-402, MCA, consists in:
"(1) unlawful confinement of the person of the
party, of the husband or wife of such party, or
of an ancestor, descendant, or adopted child of
such party, husband, or wife;
"(2) unlawful detention of the property of any
such person; or
"(3) confinement of such person, lawful in form
but fraudulently obtained or fraudulently made
unjustly harassing or opressive."
There is no evidence of confinement or detention in the
present case. Therefore, the consent of the Berrymans
cannot be said to have been obtained through duress.
Fraud is defined as either "actual" or "constructive."
Section 28-2-404, MCA.
To constitute actual fraud under section 28-2-405,
MCA, respondent must be found to have induced the Berrymans
to sign the documents by:
"(1) the suggestion as a fact of that which is
not true by one who does not believe it to be true;
" (2) the positive assertion, in a manner not
warranted by the information of the person.making
it, of that which is not true, though he believes
it to be true;
" ( 3 ) the suppression of that which is true by one
having knowledge or belief of the fact;
"(4) a promise made without any intention of
performing it; or
" (5) any other act fitted to deceive. "
Respondent's actions do not constitute actual fraud.
Constructive fraud, for the purposes of this appeal,
consists in the breach of a duty by which the one in fault
gains an advantage over another by misleading him to his
prejudice. Section 28-2-406(1), MCA. There is no constructive
fraud in the present case. First, respondent did not breach
a duty by demanding security for his fees. Second, respondent
did not mislead the Berrymans--he had every intention of
withdrawing as counsel. Third, the Berrymans were not
prejudiced by being made to secure a debt for which they
were legally responsible.
Appellants next contend that their consent was obtained
by the exercise of undue influence. Section 28-2-407, MCA,
defines undue influence as:
" (1) the use by one in whom a confidence is
reposed by another or who holds a real or apparent
authority over him of such confidence or authority
for the purpose of obtaining an unfair advantage
over him;
"(2) taking an unfair advantage of another's
weakness of mind; or
"(3) taking a grossly oppressive and unfair
advantage of another's necessities or distress."
It is enough to say that respondent gained no unfair advantage
over the Berrymans when he told them he would resign if his
fee was not secured. It is not unfair to demand security
for the payment of fees earned.
Appellants also argue that an inference of undue
influence is cast upon the transaction because the deed and
security agreement were signed long after the initiation of
the attorney-client relationship. In the Matter of Estate
,
of Magelssen (1979), - Mont. - 597 P.2d 90, 36 St.Rep.
1199, states:
"The prevailing rule is that attorney fee contracts
made after the establishment of the fiduciary
attorney-client relationship are valid if they are
'fair and equitable.'" 597 P.2d at 93.
As indicated earlier, the security arrangement set up
by respondent in the present case was a fair and equitable
means of insuring payment of his fee. The charge for
respondent's services--$25.00 per hour--had been established
by an earlier written agreement of the parties. The papers
executed on the day of the trial simply established the method
of payment.
Finally, appellants argue that a strong inference of
fraud is raised by the fact that respondent himself notarized
the quitclaim deed to which he was a named party. Musselshell
Valley Farming & Livestock Co. v. Cooley (1929), 86 Mont.
276, 290, 283 P. 213, 217, states that an acknowledgment cannot
be taken by a grantee. Thus, respondent was not qualified
to notarize appellants' execution of the deed. There is no
serious question raised, however, as to whether in fact the
Berrymans executed the deed. They admit signing it. No
inference of fraud, therefore, can be drawn from the faulty
acknowledgment.
The District Court did not err in refusina to award
damages to appellants.
Appellants contend that respondent's filing of the
quitclaim deed and security agreement created a cloud on
appellants' title which damaged them financially and made it
impossible for Ray Berryman to comply with the terms of his
probation.
Appellants could have cleared their title to the property
as against respondent and relieved themsetves of any damages
by payment of respondent's fee. We affirm the District
Court's finding that the evidence does not support appellants'
counterclaim for damages.
The District Court did not abuse its discretion in
awarding $10,000 in attorney's fees to respondent.
-6-
In making its decision on the proper amount of attorney's
fees, the District Court had before it two operative documents:
1. A retainer agreement which recited a charge of $25.00
per hour for respondent's legal services.
2. Respondent's timesheet which indicated the number
of hours per day respondent had devoted to appellants' case
over a one-year period.
Thus, there was sufficient information upon which the
District Court could base its decision regarding attorney's
fees. As we have stated in the past, Carkeek v. Ayer (1980),
- Mont. , 613 P.2d 1013, 37 St.Rep. 1274, we will not
disturb a District Court's determination of attorney's fees
unless an abuse of discretion is shown. We find no abuse in
the present case.
The District Court did not err in finding that respondent
had not committed an unfair trade practice.
Appellants' final contention is that respondent violated
the Montana Unfair Trade Practices and Consumer Protection
Act of 1973 (Act), section 30-14-101, et seq., MCA.
We have already determined that respondent's actions
did not constitute fraud, duress, or undue influence. Under
the facts in this case, the Act has no application.
The judgment of the District Court is affirmed.
Justice
W e Concur:
Chief J u s t i c e