Kosena v. Eck

No. 80-205

IN THE SUPREME COURT OF THE STATE OF MONTANA
1981

BRUCE A. KOSENA, d/b/a THE PUB,
Plaintiff and Appellant,

NORMAN E. ECK, TRUSTEE OF
JOHN A. ECK, TRUST,
Defendants and Respondents.

Appeal from: District Court of the First Judicial District,
In and for the County of Lewis & Clark, The
Honorable H. William Coder, Judge presiding,

Counsel of Record:
For Appellant:
Robert T. Cumrnins, Helena, Montana
Charles A. Smith, Helena, Montana

For Respondent:
Jackson, Oitzinger & Pflurdo,Helena, Montana

Submitted on Briefs: April 15, 1981
Decided: October 29, 1951

Filed: OCT 2 9 1981
Mr. J u s t i c e D a n i e l J . Shea d e l i v e r e d the Opinion of the
Court.

P l a i n t i f f a p p e a l s , and d e f e n d a n t s c r o s s - a p p e a l , from

a judgment e n t e r e d i n Lewis and C l a r k County D i s t r i c t C o u r t
declaring the rights of the plaintiff as tenant and the
defendants a s landlords.
The t r i a l c o u r t r u l e d i n f a v o r o f t e n a n t t h a t a v a l i d

l e a s e agreement e x i s t e d , t h a t t h e r e n t a l due under t h e l e a s e

was $650 per month, and that landlords must pay tenant
$5,000 as their share of the costs of repairs made by
tenant. The t r i a l c o u r t ruled i n favor of landlords that
tenant did not have a v a l i d mechanics' lien for repairs
w h i c h h e had c o m p l e t e d on t h e p r e m i s e s , and t h a t t h e l a n d -

l o r d s were e n t i t l e d t o p r e j u d g m e n t i n t e r e s t on t h e r e n t a l
payments. The t r i a l c o u r t f u r t h e r r u l e d t h a t b o t h p a r t i e s
m u s t b e a r t h e i r own c o s t s and a t t o r n e y f e e s .
W e a f f i r m t h e f i r s t two r u l i n g s a s t o t h e e x i s t e n c e

of t h e l e a s e a g r e e m e n t and t h e amount t o be paid--$650 per
month. W remand t o t h e t r i a l c o u r t f o r f u r t h e r f i n d i n g s a s
e

to the amount awarded to tenant to compensate him for

repairs to the premises. We reverse the trial court's
ruling that no mechanics' lien existed, the award of
p r e j u d g m e n t i n t e r e s t , and t h e o r d e r t h a t e a c h s i d e b e a r i t s

own c o s t s a n d a t t o r n e y f e e s .
On F e b r u a r y 29, 1 9 6 8 , J. A . E c k and M a r i e A. E c k , t h e

p a r e n t s and p r e d e c e s s o r s o f t h e l a n d l o r d s , l e a s e d a p o r t i o n
of a Helena b u s i n e s s building to Reginald L. Brewer and
W i l l i a m 0 . Bahny. The o t h e r p o r t i o n o f t h i s b u i l d i n g , known
a s "Howard's P i z z a , " was e x p r e s s l y e x c e p t e d from t h e l e a s e
agreement. The l e a s e a g r e e m e n t had a p r i m a r y t e r m o f f i v e

y e a r s w i t h a n o p t i o n t o renew f o r f i v e a d d i t i o n a l y e a r s . It
f u r t h e r p r o v i d e d f o r a r e n t a l r a t e o f $275 p e r month, t o b e

a d j u s t e d by any i n c r e a s e i n t a x e s on t h e p r e m i s e s a b o v e t h e
1967 t a x e s . The l e a s e d p r e m i s e s , known a s "The P u b , " was

o p e r a t e d a s a b a r by Brewer and Bahny. The l e a s e a g r e e m e n t
r e q u i r e d t h a t an a s s i g nm e n t o f t h e l e a s e be s u b j e c t t o t h e
w r i t t e n consent of t h e l a n d l o r d s . On A p r i l 24, 1 9 6 8 , o n e o f
the original tenants, Bahny, s o l d h i s one-half interest in
"The Pub" t o B r u c e A. Kosena, t h e t e n a n t i n v o l v e d h e r e . As

part of this agreement the tenant obtained a written

a s s i g n m e n t o f l e a s e f r o m Bahny, a s w e l l a s a w r i t t e n c o n s e n t
t o a s s i g n m e n t of l e a s e from t h e l a n d l o r d s .
The tenant and Brewer continued to jointly operate
"The Pub" until January 15, 1971, when Brewer sold his

interest in "The Pub" to the tenant, and so the tenant

became t h e s o l e p r o p r i e t o r and l e s s e e . The w r i t t e n c o n s e n t
of the landlords was not o b t a i n e d f o r t h i s t r a n s a c t i o n .
However, the tenant made the rent payments, and the
l a n d l o r d s a c c e p t e d t h e payments w i t h o u t o b j e c t i o n . Sometime
i n 1 9 7 2 , t h a t p a r t o f t h e b u i l d i n g known a s " H o w a r d ' s P i z z a "

was t a k e n o v e r by t h e t e n a n t and made a p a r t of "The P u b . "
The tenant and landlords verbally agreed to make this

additional area a part of the leased premises and to
i n c r e a s e t h e r e n t a l t o $500 p e r month. The t e n a n t c o n t i n u e d
t o o p e r a t e "The Pub" w i t h o u t f u r t h e r p r o b l e m s u n t i l J a n u a r y
1 9 7 4 , when t h e b u i l d i n g was s u b s t a n t i a l l y d e s t r o y e d by f i r e .

The l e a s e a g r e e m e n t c o n t a i n e d a f i r e c l a u s e , which s t a t e d i n
part:
"AND PROVIDED, ALSO t h a t i n c a s e t h e b u i l d i n g
on s a i d demised p r e m i s e s , o r any p a r t
t h e r e o f , s h a l l d u r i n g s a i d t e r m be d e s t r o y e d
o r d a m a g e d by f i r e o r o t h e r u n a v o i d a b l e
c a s u a l t y , s o t h a t t h e same s h a l l be u n f i t f o r
use, then s a i d r e n t or proportionate p a r t
 t h e r e o f s h a l l be a b a t e d u n t i l s a i d p r e m i s e s
s h a l l h a v e b e e n p u t i n p r o p e r r e p a i r by t h e
L e s s o r s , o r t h i s l e a s e s h a l l have been
determined, a t t h e i r election."
After the fire, the tenant found o t h e r employment,
and considered relocating h i s business. I n June or July
1 9 7 4 , a p p r o x i m a t e l y s i x months a f t e r the fire, n o t having

found a place t o relocate, the tenant discussed with the
landlords the possibility of restoring the original

building. The l a n d l o r d s e l e c t e d t o r e s t o r e t h e b u i l d i n g ,
and t h e t e n a n t v e r b a l l y a g r e e d t o r e s t o r e o r r e i n s t a l l t h e
things necessary t o operate h i s business. The r e p a i r s w e r e
completed, and the tenant reopened "The Pub" i n November

1974. The p a r t i e s had a l s o v e r b a l l y a g r e e d t h a t t h e r e n t
r e m a i n a t $500 p e r month i n November and December 1 9 7 4 , b u t

t o be i n c r e a s e d t o $650 i n J a n u a r y 1 9 7 5 . The t e n a n t p a i d
t h e s e amounts and t h e l a n d l o r d s a c c e p t e d them a s t h e y became
due. However, i n e a r l y January 1975, t h e l a n d l o r d s advised
tenant that, commencing i n F e b r u a r y 1 9 7 5 , t h e m o n t h l y r e n t
would i n c r e a s e t o $ 1 , 1 7 5 . This s t a r t e d the dispute.

The tenant refused to pay the $1,175 and filed a
mechanics' lien against the premises in the amount of
$ 7 4 , 0 0 0 , a l l e g e d l y t o r e c o v e r t h e l a b o r and m a t e r i a l s h e had

expended in restoring the premises after the fire. In
F e b r u a r y 1 9 7 5 , t h e t e n a n t t e n d e r e d a c h e c k f o r $650 w h i c h
was r e f u s e d by t h e l a n d l o r d s , who s t i l l demanded $ 1 , 1 7 5 p e r

month. The t e n a n t then f i l e d a lawsuit t o determine t h e
e x i s t e n c e and t e r m s of t h e l e a s e and t o a l s o f o r e c l o s e o n
t h e mechanics' lien. The t e n a n t c o n t i n u e d t o p a y $650 p e r
month into court and he o b t a i n e d a temporary restraining
order t o prevent h i s eviction.
T r i a l was h e l d on F e b r u a r y 1 6 and 1 7 , 1 9 7 8 , and o n
A p r i l 26, 1 9 7 8 , t h e t r i a l c o u r t i s s u e d a n o r d e r f r o m which

t h i s appeal is taken.

B e c a u s e o n e r u l i n g d e p e n d s on t h e o t h e r , we d i s c u s s

the issues i n the following order. First, t h e v a l i d i t y of

t h e l e a s e agreement; second, t h e l e g a l i t y of t h e l a n d l o r d s '

demand i n c r e a s i n g r e n t t o $ 1 , 1 7 5 p e r month f r o m $650; t h i r d ,

t h e award o f i n t e r e s t t o t h e l a n d l o r d s o n e a c h $650 payment

t h e t e n a n t h a s been v o l u n t a r i l y d e p o s i t i n g i n c o u r t s i n c e he

filed the lawsuit; fourth, the validity of t h e mechanics'

l i e n f i l e d by t h e t e n a n t ; f i f t h , t h e award o f $ 5 , 0 0 0 t o t h e

t e n a n t a s compensation f o r r e p a i r s ; s i x t h and f i n a l l y , the

t r i a l c o u r t ' s r u l i n g s on a t t o r n e y f e e s .

VALIDITY OF LEASE AGREEMENT

The l a n d l o r d s c o n t e n d t h a t t h e t r i a l c o u r t e r r e d i n

not holding that the l e a s e was terminated a s a matter of

law. This contention is based in part on section

70-1-607(4), MCA, which states in part: "When h i r i n g

terminates. The h i r i n g o f a t h i n g t e r m i n a t e s : . . . ( 4 ) by

t h e d e s t r u c t i o n of t h e t h i n g h i r e d . "

T h i s s t a t u t e p r o v i d e s , d i s j u n c t i v e l y , s e v e r a l ways by

which hiring can terminate. However, the landlords urge

t h a t s u b s e c t i o n ( 4 ) be a p p l i e d e x c l u s i v e l y t o t e r m i n a t e t h e

l e a s e agreement. I n S o l i c h v. H a l e ( 1 9 6 7 ) , 1 5 0 Mont. 358,

435 P . 2d 8 8 3 , i n t e r p r e t i n g t h e p r e d e c e s s o r o f s e c t i o n 70-1-

6 0 7 , MCA, t h i s C o u r t s t a t e d :

"If it is found t h a t t h e b u i l d i n g i s
d e s t r o y e d , by o p e r a t i o n o f law t h e l e a s e
would -be t e r m i n a t e d . Only an agreement t o
t h e c o n t r a r y b e t w e e n t h e two p a r t i e s c o u l d
prevent t h e a c t i o n of t h i s s t a t u t e [section
70-1-607, MCA] ." 1 5 0 Mont. a t 361-362.
(Emphasis added.)
 Here, the lease agreement does contain an express

a g r e e m e n t t o t h e c o n t r a r y which p r e c l u d e s t h e o p e r a t i o n o f

s e c t i o n 70-1-607, MCA.

The landlords a l s o contend that the original lease

had been "so long abandoned, disregarded, and repudiated"

that i t was void and ineffective before the time of the

fire. T h i s c o n t e n t i o n i s a p p a r e n t l y b a s e d on t h e f o l l o w i n g

allegations:

(1) T h a t t h e t e n a n t f a i l e d t o o b t a i n t h e
w r i t t e n consent t o t h e assignment of l e a s e
f r o m t h e l a n d l o r d s when t h e t e n a n t b o u g h t o u t
Brewer's one-half i n t e r e s t i n "The Pub" o n
J a n u a r y 15, 1971.

( 2 ) T h a t t h e p a r t i e s , by v e r b a l l y m o d i f y i n g
t h e l e a s e agreement, i n v a l i d a t e d t h e e n t i r e
lease.

( 3 ) Finally, t h a t the tenant did not properly
e x e r c i s e h i s option t o extend t h e l e a s e term
when t h e p r i m a r y t e r m e x p i r e d i n 1 9 7 3 .

These contentions a r e supported neither by the law

n o r by t h e f a c t s . I n t h e i r b r i e f , counsel for the landlords

f a i l s t o c i t e any l e g a l a u t h o r i t y t o s u p p o r t t h e t h e o r y t h a t

the written consent of the landlords is an absolute

prerequisite t o a v a l i d a s s i g n m e n t of t h e l e a s e . In fact,

t h e g r e a t weight of a u t h o r i t y is t o t h e c o n t r a r y . First, a

restriction imposed in a lease agreement against an

assignment of t h e l e a s e is a restraint against alienation

and is n o t looked upon with favor by the courts. Such

restrictions are to be construed strictly against the

lessor. Gazlay v . Williams (6th Cir. 1 9 0 6 ) , 1 4 7 F. 678,

aff 'd, 210 U.S. 41, 28 S . C t . 687, 52 L.Ed. 950. Such t e r m s

must be g i v e n a l i m i t e d e f f e c t . Here, t h e l e a s e agreement,

d a t e d F e b r u a r y 29, 1 9 6 8 , and s i g n e d by t h e p r e d e c e s s o r s o f

b o t h t h e t e n a n t and l a n d l o r d s , s t a t e s a s f o l l o w s :
 "The L e s s e e s a g r e e n o t t o s u b l e a s e o r a s s i g n
a l l o r any p a r t o f t h e d e m i s e d p r e m i s e s
d u r i n g t h e term of t h i s l e a s e without f i r s t
o b t a i n i n g t h e w r i t t e n c o n s e n t of t h e L e s s o r s
thereto." ( S e e page 5 of l e a s e a g r e e m e n t . )

In April 1968, the predecessors of the landlords
consented i n w r i t i n g t o Bahny's assignment of his interest
in the lease to the tenant. The landlords' argument,
however, centers on the later departure of the tenant's
co-lessee, B r e w e r , on J a n u a r y 1 5 , 1 9 7 1 , when t h e t e n a n t t o o k
over t h e s o l e o p e r a t i o n of t h e leased premises.
The t e n a n t had no l e g a l d u t y t o o b t a i n t h e l a n d l o r d s '
w r i t t e n c o n s e n t t o h i s agreement w i t h Brewer. The n a r r o w
i n t e r p r e t a t i o n demanded o f such r e s t r i c t i o n s p r o h i b i t s t h e
application of the provision to a subsequent assignment.
Lipsker v. B i l l i n g s Boot Shop ( 1 9 5 5 ) , 1 2 9 Mont. 420, 288
P.2d 660. In Lipsker, this Court declared that, "The

landlord's consent t o the [ o r i g i n a l ] a s s i g n m e n t of a l e a s e
obviates the necessity of consent to subsequent assign-
ments." 1 2 9 Mont. a t 427.
The r e c o r d a l s o r e v e a l s t h a t t h e l a n d l o r d s knew t h a t

t h e t e n a n t had become t h e s o l e p r o p r i e t o r and l e s s e e l o n g
before t h i s dispute arose. And, t h e l a n d l o r d s c o n t i n u e d t o

r e c e i v e r e n t a l payments from t h e t e n a n t f o r a t l e a s t f o u r
y e a r s and n e v e r o b j e c t e d t o t h e a s s i g n m e n t . The l a n d l o r d s
have long waived any right to assert breach of the

restriction. Crossman v . F o n t a i n b l e a u H o t e l C o r p . ( 5 t h C i r .

1 9 5 9 ) , 273 F.2d 720.
The landlords' counsel has also ignored section
28-2-1602, MCA, which e x p r e s s l y s a n c t i o n s v e r b a l m o d i f i c a -
t i o n of w r i t t e n c o n t r a c t s , i n c l u d i n g , of course, a written
lease. R o d g e r s v . S a u n d e r s ( 1 9 6 4 ) , 1 4 4 Mont. 424, 396 P.2d
817. Here, t h e executed v e r b a l agreements t o i n c r e a s e t h e
r e n t a l p a y m e n t s and t o expand t h e l e a s e d p r e m i s e s , m o d i f i e d
t h e l e a s e agreement.

Finally, w e hold t h a t the tenant validly exercised
h i s o p t i o n t o renew t h e l e a s e when t h e o r i g i n a l t e r m e x p i r e d
i n 1973. The a g r e e m e n t d o e s n o t r e q u i r e t h a t s u c h a n o p t i o n

m u s t be e x e r c i s e d by w r i t t e n n o t i c e t o t h e l a n d l o r d s . The
o p t i o n may be e x e r c i s e d v e r b a l l y o r e v e n by c o n d u c t o f t h e
parties which exhibits a clear intent to exercise the

option, F l i n t v. Mincoff ( 1 9 6 0 ) , 1 3 7 Mont. 549, 353 P.2d
340, a question of fact to be determined by all of the
circumstances. Fun P r o d u c t s D i s t r i b u t o r s , Inc. v. Martens
(Alaska 1977), 559 P.2d 1054. Here, the trial court
correctly ruled that the tenant effectively exercised his
option to renew. Considering the substantial amount o f

l a b o r and m a t e r i a l s p r o v i d e d by t h e t e n a n t a f t e r t h e f i r e ,
all with the knowledge and consent of the landlords, it

would be l u d i c r o u s t o i n f e r t h a t t h e p a r t i e s b e l i e v e d t h a t

the primary lease term had expired and that tenant had
become o n l y a month-to-month tenant. The tenant clearly

demonstrated h i s i n t e n t t o e x e r c i s e t h e option.
W hold, t h e r e f o r e , t h a t t h e o r i g i n a l l e a s e agreement
e

o f F e b r u a r y 1 9 6 8 was s t i l l v a l i d and i n e f f e c t a t a l l times
relevant t o t h i s case, until t h e e x p i r a t i o n of the option

t e r m i n 1 9 7 8 , s u b j e c t t o t h e v e r b a l m o d i f i c a t i o n s made by
the parties.

THE LANDLORDS' DEMAND FOR $ 1 , 1 7 5 P E R MONTH RENTAL

Our d e c i s i o n d e c l a r i n g t h a t t h e l e a s e a g r e e m e n t was
v a l i d a n d e f f e c t i v e d i s p o s e s a l s o t h e l a n d l o r d s ' demand t h a t
t h e r e n t be i n c r e a s e d t o $ 1 , 1 7 5 p e r month. The t e n a n t a t no

t i m e c o n s e n t e d t o r a i s e t h e m o n t h l y r e n t a l beyond $650, and

t h e r e f o r e t h e l a n d l o r d s had no r i g h t t o i n c r e a s e t h e r e n t t o
$ 1 , 1 7 5 p e r month. The t e r m s of t h e l e a s e , a s m o d i f i e d by
t h e p a r t i e s , had s e t t h e r e n t a l p a y m e n t s a t $650 p e r month.

T R I A L COURT'S AWARD OF INTEREST

The t r i a l c o u r t awarded t h e l a n d l o r d s i n t e r e s t on t h e

r e n t a l p a y m e n t s " a t t h e r a t e o f 6 p e r c e n t p e r annum f r o m t h e
d u e d a t e o f e a c h payment a s r e n t on t h e p r e m i s e s . " Essen-

tially, the trial court determined that interest should
a c c r u e a s of t h e t i m e t h a t e a c h r e n t a l payment became d u e .
The record clearly shows that in February 1975, the
l a n d l o r d s r e f u s e d t o a c c e p t t h e $650 m o n t h l y r e n t payment
t e n d e r e d by t h e t e n a n t . The t e n a n t t h e n f i l e d a l a w s u i t and
t e n d e r e d t h e $650 m o n t h l y p a y m e n t s into court. He had no

o t h e r c h o i c e , a s t h e l a n d l o r d s p r e v e n t e d him f r o m p a y i n g h i s
debt as it came due. Section 27-1-211, MCA, clearly

r e l e a s e s t h e t e n a n t from any o b l i g a t i o n t o pay i n t e r e s t :

"27-1-211. Right t o i n t e r e s t . Every person
who i s e n t i t l e d t o r e c o v e r damages c e r t a i n o r
c a p a b l e o f b e i n g made c e r t a i n by c a l c u l a t i o n
and t h e r i g h t t o r e c o v e r w h i c h i s v e s t e d i n
him upon a p a r t i c u l a r d a y i s e n t i t l e d a l s o t o
r e c o v e r i n t e r e s t t h e r e o n from t h a t day e x c e p t
d u r i n g such time a s prevented
b y ------ r by t h e a c t o f t h e c r e d i t o r f r o m
- law o
paying t h e debt." (Emphasis added.)

B e c a u s e t h e l a n d l o r d s were e n t i t l e d t o no more t h a n
$650 p e r month, it was their own refusal to accept the
tendered payment, which resulted in the tenant filing a
l a w s u i t and p r e v e n t e d them f r o m r e c e i v i n g e a c h payment a s i t
became d u e . By any s t a n d a r d s , t h e c o n d u c t of t h e l a n d l o r d s

p r e v e n t e d t h e t e n a n t from making t h e r e q u i r e d p a y m e n t s . The
t e n a n t s h o u l d n o t be p e n a l i z e d f o r a t t e m p t i n g t o comply w i t h

t h e terms of t h e l e a s e agreement, nor should t h e l a n d l o r d s
be rewarded for unjustifiably refusing to accept the
payments. The o r d e r a l l o w i n g i n t e r e s t i s r e v e r s e d .

THE V A L I D I T Y OF PLAINTIFF'S MECHANICS' L I E N
Upon t h e i r election to repair, t h e l a n d l o r d s became
bound under the lease agreement to make such repairs as

necessary t o provide the tenant with s u i t a b l e premises t o
operate his business. The landlords willfully abrogated
t h e i r d u t y u n d e r t h i s c o n t r a c t when t h e y r e f u s e d t o c o m p l e t e
the repairs. T h i s r e f u s a l compelled t h e t e n a n t t o complete

the r e p a i r s himself, and h e d i d s o w i t h t h e knowledge and
consent of t h e l a n d l o r d s . These f a c t s e s t a b l i s h an i m p l i e d

contract between the parties. An implied contract is

s u f f i c i e n t t o support a v a l i d mechanics' l i e n . M & R Const.

Co. v . S h e a ( 1 9 7 9 ) , - Mont . , 589 P.2d 1 3 8 , 36 S t . R e p .
37. (See a l s o cases c i t e d t h e r e i n . ) T h i s Court has noted

that a mechanics' lien ". . . is a c r e a t u r e of statute,
remedial in nature, with its foundation in equity and
natural justice, not contract." Beck v . Hanson ( 1 9 7 8 ) , -
Mont. , 589 P.2d 1 4 1 , 1 4 4 . The e q u i t i e s w e r e c l e a r l y i n
favor of t h e t e n a n t .
The landlords willfully breached their promise to
repair, and t h e y w e r e f u l l y a w a r e t h a t t h e t e n a n t was t h e n

compelled to complete the work. After the tenant had
completed the repairs, the landlords then attempted,
contrary t o t h e terms of the l e a s e , t o d r a s t i c a l l y increase
t h e r e n t a l payments. T h a t c a n h a r d l y be c l a s s i f i e d a s f a i r
dealing.
 I n denying t h e mechanics' lien, however, the trial

court relied on a clause in the l e a s e which required the

tenant t o "pay and d i s c h a r g e " a n y l i e n s f i l e d a g a i n s t t h e

premises. That clause required t h e tenant:

"1. To p a y a n d d i s c h a r g e p r o m p t l y , a l l l i e n s
and o b l i g a t i o n s o f any n a t u r e and kind
w h a t s o e v e r which may a t t a c h t o o r be imposed
upon s a i d p r e m i s e s , o r t o s a i d l e a s e h o l d ,
c r e a t e d o r i n c u r r e d by s a i d Lessees, t o p a y
a l l r e a s o n a b l e c o s t s , a t t o r n e y ' s f e e and
e x p e n s e s t h a t s h a l l be made a n d - o c c u r r e d by
t h e L e s s o r s i n e n f o r c i n g t h e c o v e n a n t s of t h e
agreements i n t h i s l e a s e . " (Emphasis added.)

The c l e a r i n t e n t of t h i s c l a u s e is t o p r o h i b i t the

t e n a n t from h a v i n g work d o n e which would result in a lien

filed against the premises, or t o pay t h e l i e n s i f filed.

But here i t was the l a n d l o r d s who initiated the repairs.

The l a n d l o r d s , by e l e c t i n g t o r e p a i r t h e p r e m i s e s a f t e r t h e

fire, " c r e a t e d o r incurred" t h e o b l i g a t i o n t o complete such

repairs. The t e n a n t was c o m p e l l e d t o do t h e work when t h e

l a n d l o r d s f a i l e d t o complete it a f t e r e l e c t i n g t o r e p a i r t h e

p r e m i s e s under t h e f i r e c l a u s e i n t h e l e a s e .

The t r i a l c o u r t a l s o n o t e d s e v e r a l a l l e g e d t e c h n i c a l

defects in t h e mechanics' lien. Specifically, the trial

c o u r t r e f e r r e d t o t h e f a c t t h a t t h e l i e n was f i l e d by " B r u c e

A. Kosena" whereas this action was filed by "Bruce A.

Kosena, d/b/a The Pub." This is an inconsequential

technical discrepancy, and it w i l l not invalidate an

otherwise valid l i e n . The l i e n s t a t u t e m u s t be i n t e r p r e t e d

l i b e r a l l y t o p r o t e c t t h e r i g h t of t h e l i e n . Morrison-Maierle

Inc. v. Selsco (1980), - Mont. , 606 P.2d 1085, 37

St.Rep. 299; F a u s e t t v . B l a n c h a r d ( 1 9 6 9 ) , 1 5 4 Mont. 301, 463

P.2d 319. Furthermore, the fact that some of the items

c l a i m e d i n t h e l i e n may n o t be l i e n a b l e d o e s n o t i n v a l i d a t e
the entire lien. Smith v. Gunniss ( 1 9 4 4 ) , 1 1 5 Mont. 362,

144 P.2d 186; Caird Engineering Works v. Seven-Up Gold

Mining Co. ( 1 9 4 0 ) , 111 Mont. 471, 111 P.2d 267.

The l a n d l o r d s ' c o n d u c t t h r o u g h o u t t h i s t r a n s a c t i o n i s

inexcusable. Their willful breach of an obligation to

repair the premises, and their ratification of the

significant repairs made by the tenant, is alone a

s u f f i c i e n t l e g a l b a s i s f o r t h e f i l i n g of a mechanics' lien.

Further, their totally unjustified demand for drastically

increased rental payments after the completion of the

r e p a i r s p r e s e n t s an even s t r o n g e r e q u i t a b l e b a s i s t o uphold

the lien. The t e n a n t i s e n t i t l e d t o a m e c h a n i c s ' lien in

t h e f u l l amount o f t h e v a l u e of any permanent r e p a i r s t h a t

were t h e d u t y of t h e l a n d l o r d s t o p r o v i d e .

TRIAL COURT AWARD OF $ 5 , 0 0 0 TO TENANT AS COMPENSATION FOR
REPAIRS

The t r i a l c o u r t o r d e r e d t h e l a n d l o r d s t o pay a sum o f

$ 5 , 0 0 0 t o c o m p e n s a t e t h e t e n a n t f o r r e p a i r s t h a t h e made t o

restore the premises af t e r the fire. The trial court

a r r i v e d a t t h i s f i g u r e i n a m y s t e r i o u s way. The t r i a l c o u r t

listed items which were i n s t a l l e d by t h e t e n a n t and w h i c h
were of b e n e f i t b o t h t o t h e t e n a n t and t h e l a n d l o r d s . The

court valued these items at $10,000, and then determined

that the parties should "share equally" t h e c o s t of these

items. B u t no b a s i s e x i s t s in the record for the trial

court's valuation of the items at $10,000, or for the

d e t e r m i n a t i o n t h a t t h i s c o s t s h o u l d be s h a r e d e q u a l l y by t h e

parties. We reverse t h i s p a r t of t h e c o u r t ' s judgment a n d

remand for further findings a s t o t h e exact value of the

r e p a i r s f o r which t h e t e n a n t may r e c o v e r .
 A b s e n t an a g r e e m e n t t o t h e c o n t r a r y , t h e common l a w

rule is that the lessor h a s no d u t y t o repair. Solich,

supra. Here t h e r e i s an agreement t o r e p a i r contained in

the lease agreement, and when the landlords elected to

r e p a i r and r e s t o r e t h e p r e m i s e s , t h e y became bound by t h i s

agreement to make the repairs necessary to restore the

premises t o a tenantable condition. The l a n d l o r d s f a i l e d t o

do t h i s , and t h e t e n a n t was c o m p e l l e d t o c o m p l e t e t h e work.

Under t h e a g r e e m e n t , t h e l a n d l o r d s a r e l i a b l e f o r t h e c o s t s

i n c u r r e d by t h e t e n a n t i n c o m p l e t i n g t h e r e p a i r s t h a t w e r e

the landlords' duty t o provide.

THE TENANT I S ENTITLED TO ATTORNEY FEES INCURRED I N
ENFORCING THE LEASF AGEEE?IZ1JT AiJD ATTORNEYS FZES '
FORECLOSING THE MECHANICS L I E N

I n i t s o r i g i n a l f i n d i n g s o f f a c t and c o n c l u s i o n s o f

law, t h e t r i a l c o u r t h e l d t h a t (1) t h e t e n a n t was e n t i t l e d
43
t o a t t o r n e y f e e s p u r s u a n t t o s e c t i o n .83-8601.1, R.C.M. 1947,

f o r e n f o r c i n g t h e c o v e n a n t s o f t h e l e a s e , and ( 2 ) t h a t t h e

l a n d l o r d s w e r e e n t i t l e d , u n d e r s e c t i o n 93-8614, R.C.M. 1947

(now s e c t i o n 71-3-124, MCA), t o recover reasonable c o s t s of

defending against t h e mechanics' l i e n pursuant to section

93-8614, R.C.M. 1947. But l a t e r , the t r i a l court ordered

t h a t each p a r t y bear i t s own c o s t s and a t t o r n e y f e e s . We

reverse t h i s order.

The tenant is e n t i t l e d t o the reasonable c o s t s of

a t t o r n e y f e e s i n c u r r e d i n e s t a b l i s h i n g t h e v a l i d i t y of his
lease. By d e m a n d i n g , u n j u s t i f i a b l y , a d r a s t i c a l l y i n c r e a s e d

r e n t a l payment f r o m t h e t e n a n t and by t a k i n g l e q a l a c t i o n t o

f o r c e t h e tenant t o q u i t the premises, the landlords refused

t o recognize t h e e x i s t e n c e of the lease. The t e n a n t was
forced t o sue to determine t h e v a l i d i t y of the lease, and

s e c t i o n 28-3-704, MCA, p r o v i d e s t h a t t h e t e n a n t is e n t i t l e d

t o attorney fees so incurred.

B e c a u s e t h e o r i g i n a l l e a s e a g r e e m e n t was e n t e r e d i n t o

before the "effective date" (July 1, 1971) of section

28-3-704, MCA, counsel for the landlords contends t h a t t h i s

s t a t u t e does not apply here. Undoubtedly c o n f u s i o n e x i s t s

a s t o the "effective date" provision. See Belgrade State

Bank v. Swainson (1978), 176 Mont. 444, 578 P.2d 1166;

B e l g r a d e S t a t e Bank v . S w a i n s o n ( 1 9 7 7 ) , 1 7 2 Mont. 350, 564

P.2d 174. B u t w e need n o t r e c o n s i d e r t h a t i s s u e h e r e . The

d a t e of the agreement at issue is t h e date on which the

l e a s e a g r e e m e n t was r e n e w e d , March 3 , 1 9 7 3 . The s t a t u t e was

then in effect. Because t h e l a n d l o r d s have asserted that

t h e t e n a n t d i d n o t p r o p e r l y e x e r c i s e h i s o p t i o n t o renew t h e

lease, the tenant was forced to sue to establish the

v a l i d i t y of h i s o p t i o n . S e c t i o n 28-3-704, MCA, applies. We

have p r e v i o u s l y r e j e c t e d the landlords' argument t h a t t h i s

s t a t u t e d o e s n o t a p p l y t o a p a r t y who s t a r t e d t h e l a w s u i t .

Compton v . A l c o r n ( 1 9 7 6 ) , 1 7 1 Mont. 230, 235, 557 P.2d 2 9 2 .

Because we have ruled that the t e n a n t had a valid
mechanics' lien, the landlords are not entitled t o attorney

f e e s f o r d e f e a t i n g a mechanics' l i e n . Rather, the tenant is

entitled to attorney fees for the costs incurred in

establishing the validity of the mechanics' lien. See

s e c t i o n 71-3-124, MCA.

The record does not establish the exact amount of

a t t o r n e y f e e s i n c u r r e d by t h e t e n a n t and t h e r e f o r e we m u s t

remand for further proceedings to establish the proper

amount. The t e n a n t is e n t i t l e d t o recover the reasonable
attorney fees incurred in establishing the validity of the

lease and in foreclosing on his mechanics' lien. This

includes also the attorney fees incurred in presenting this

appeal.
The District Court judgment is af firmed in part,

reversed in part, and remanded for further proceedings.

We concur:

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Chief '3ustice
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