Ring v. Hoselton

No. 81-48
IN THE SUPREME COURT OF THE STATE OF MONTANA

DAN RING, BOB WOLTER, TIM WILLIAMS,
LOUIS MERTZIG, DALE OLSEN, BOB MARTIN,
ROBERT GOODY, JERRY THOMPSON, FRED BAUM,
et al.,
Plaintiffs and Respondents,

JAMES HOSELTON, d/b/a HOSELTON FRAMING;
M.D. O'CONNELL and DONALD BENNETT, d/b/a
BENNETT BUILDERS, FIRST SECURITY BANK,
AETNA INC.,
Defendants and Appellants.

Appeal from: District Court of the Third Judicial District,
In and for the County of Deer Lodge
Honorable Robert Boyd, Judge presiding.
Counsel of Record:
For Appellants:

Poore, Roth, Robischon & Robinson, Butte, Montana
Douglas Buxbaum argued and and Urban Roth argued,
Butte, Montana
Henningsen, Purcell & Genzberger, Butte, Montana
James Purcell argued, Butte, Montana
For Respondents:
Knight, Dahood, McLean & Everett, Anaconda, Montana
David McLean argued, Anaconda, Montana
Johnson, Skakles and Kebe, Anaconda, Montana
Greg Skakles argued, Anaconda, Montana

Submitted: December 7, 1981
Decided: April 15, 1982

Filed: APR 1 5 1982
Mr. Justice Fred J. Weber delivered the Opinion of the
Court.

Plaintiff carpenters claimed penalties for late payment
of wages due under a working agreement with James Hoselton,
d/b/a Hoselton Framing (Hoselton), subcontractor, and W. D.
OIConnell, and Donald Bennett, d/b/a Bennett Builders
(Bennett), the prime contractor. Bennett cross-claimed

against Aetna Casualty & Surety Co. (Aetna) for failure to
pay Bennett as required by a labor and materials bond issued
to Hoselton as subcontractor, requesting punitive damages
and attorney's fees because of Aetna's alleged bad faith.

The District Court of Deer Lodge County awarded $4,176.48 to
plaintiff carpenters, and $35,534.12 damages plus $100,000.00
in punitive damages to Bennett, plus attorney's fees, which
were not initially determined. There were extensive post-
judgment motions to amend findings and judgment, for new
trial, and for relief from findings, conclusions and judgment.

Appeal follows denials of all of these motions. We affirm
in part and reverse in part.

The key findings of fact and conclusions of law of the
District Court are described in this paragraph. Plaintiff
carpenters were members of Carpenters Union Local 88 which

had a working agreement with Bennett, and Hoselton signed a

compliance agreement with Local 88. Hoselton hired plaintiffs
as carpenters. Hoselton posted a payment and performance
bond with Bennett as Obligee and Aetna as Surety. Hoselton
discharged plaintiffs but their severance checks were not
postmarked for seven days after discharge, entitling plaintiffs

to eight hours pay for each 24 hours which had expired
before payment was made, resulting in the Hoselton obligation
to pay plaintiffs a total of $4,176.48. Hoselton walked off

the project on February 11, 1979. Aetna did not pay the
$4,176.48 under the bond. Written notice of default was
sent to Aetna indicating Bennett was exercising his option
under the bond to complete the Hoselton framing subcontract

in his role as general contractor, and no response was ever

received from Aetna. Bennett completed the framing;
the balance owing to Bennett for completing the subcontract
was $35,534.12, and Aetna declined payment. Aetna's refusal
to make payment was found to show bad faith. Because of the
bad faith failure of Aetna to honor its obligation, Bennett

had to pay the money necessary to complete the Hoselton
subcontract, resulting in a heavy burden on Bennett, which
caused him to lose his business and his home for which
Aetna should respond in punitive damages. Reasonable attorney's

fees were due to Bennett because of the failure of Aetna to
honor its bond. As a result of these findings, the District

Court concluded that the reasonable cost of completion of
the Hoselton subcontract was $35,534.12 and Aetna was liable
to Bennett in that amount together with attorney's fees and
costs; the refusal of Aetna to honor its obligations was
wrongful, malicious, arbitrary and in bad faith; Bennett
suffered severe financial losses as a result of the bad

faith of Aetna, for which Aetna was liable in punitive
damages in the amount of $100,000.00; and Aetna was liable
to Bennett for attorney's fees as they shall become fixed
after a hearing. Judgment was entered in accordance with

the findings and conclusions.
Following is a calendar of the significant events
starting with the entry of judgment.
November - -
6, 1980. Judgment as previously described
entered.
November - -
17, 1980. Aetna filed motion for new trial,
to amend judgment, and for relief from the findings, conclu-

sions and judgment under Rules 52, 59 and 60 of the Montana
Rules of Civil Procedure. The Aetna affidavits in support
of the motions are extensive. In substance they show that
the counsel representing Aetna up to the judgment on November
6, 1980, had severe depression and emotional problems which
had extended over a period of years and were unknown to his

associates and friends. Subsequent to the November 6, 1980,
judgment, counsel was admitted to the stress center in the
hospital at Butte. The affidavits show that in the present
case, counsel was unable to communicate his problems to his

associates, and failed to properly communicate with Aetna.

The affidavits set forth facts which are claimed to be
sufficient to constitute adequate defenses to the claims in
issue; and otherwise set forth facts indicating that counsel
had failed to properly represent Aetna in a competent manner,
resulting in the entry of the judgment against Aetna. To

compound the confusion, the successor counsel for Aetna
overlooked noticing the consolidated motions as required
under Rules 59 and 60.
December - 1980.
8, Motion by plaintiffs and Bennett
requesting hearing to determine reasonable attorney's fees
provided for in judgment. Notice of hearing set for December

December - -
12, 1980. Additional Rule 60 motion by Aetna

requesting that Aetna be relieved from its omission to
notice the consolidated motions filed on November 17, with
the motion based on mistake, inadvertence and excusable
neglect. Motion noticed for December 17, 1980.

December - -
17, 1980. Hearing on motions noticed for this

date.
December - -
22, 1980. Order awarding plaintiffs1 attorneys
$2,055.00 and Bennett's attorneys $7,500.00 as attorneys'

fees. Order denying post-trial motions, finding that no
notice of hearing was filed on the November 17 motions under
Rules 59 and 60, and no hearing held within the time limits;

failure to comply with Rules 59 and 60 caused the December
17 motions to be "deemed denied" and thereby denied the
District Court any jurisdiction to deal with the motions;
finding that the December 12 motion pursuant to Rule 60 was
a "bootstrap" motion asking the court to allow a hearing on
the original motion, and was not appropriate; and with a
determination that all of the post-trial motions of Aetna

were denied.

December - -
24, 1980. Renewal of Rule 59 and 60 motions
by Aetna. Motion noticed for hearing on December 31, 1980.

December - -
26, 1980. Conditional notice of appeal, in
which Aetna contended that the judgment of November 6, 1980,
did not become final until the District Court awarded

attorney's fees, and in which the appeal was conditioned

upon the event that the Supreme Court of Montana might
determine November 6, 1980, was the date of final judgment.
December - 1980.
31, Order of District Court denying all
motions, including post-trial motions.
January - - Notice of appeal by Aetna appealing
9, 1981.
from the final judgment and order of court awarding attorney's

fees and from court's orders denying post-trial motions
under Rules 52, 59 and 60 and also from the judgment dated
November 6, 1980.

11.
The following issues are determinative:
(1) Was the November 6, 1980, judgment final prior to
the December 22, 1980, order determining attorney's fees?
(2) Should Aetna's post-judgment motions have been
considered on their merits?
(3) Was the Bennett deposition admissible without a
showing of unavailability for trial?
(4) Did the Aetna bond encompass the penalties awarded
to the plaintiffs?
As stated in the first issue, judgment was entered by
the District Court on November 6, but the attorney's fee
portion of the judgment was not completed until the entry of
order on December 22. Our decision on this issue controls
the further decision on the post-judgment motions. In this
case, the claim of attorney's fees on the part of plaintiffs
and Bennett is not based upon a statutory provision awarding
attorney's fees, such as in the mechanics lien provisions of
our codes. Here, the Aetna bond in substance provides that
Bennett shall not be liable for the payment of any costs or
expenses of any suit for work or labor performed. It is

under that contract provision that the parties seek a
recovery of their reasonable attorney's fees. Our question

then becomes whether a judgment is final involving attorney's
fees based on an agreement which is the subject matter of
the action until the actual determination of the attorney's

fees. We find the reasoning persuasive in Aetna Casualty

& Surety Company v. Giesow (2d Cir. 1969), 412 F.2d 468, 470,
in which the Circuit Court stated:
 "Since the plaintiff would not be entitled
to counsel fees if there was no breach of
the subordination agreement, we believe that
the issues of damages and counsel fees are
so inexorably interconnected as to make this
a single claim (cites omitted). In Rieser
v. Baltimore and Ohio Railroad Co., 224
F.2d 198, 199 (2d Cir. 1955), cert. denied,
350 U.S. 1006, 76 S.Ct. 651, 100 L.Ed. 868
(1956), we said that the test of multiple
claims was 'whether the underlying factual
bases for recovery state a number of differ-
ent claims which could have been separately
enforced.' Under this test it seems quite
clear that the claim for counsel fees can-
not be enforced apart from the claim for
breach of the subordination agreement, and
to this extent we have only a single claim
here. Cf. Schwartz v. Eaton, 264 F.2d 195
(2d Cir. 1959). There is also some ques-
tion as to whether the judgment here can
properly be said to be 'final,' since
reasonable counsel fees are a contractually
specified element of damages and plainly the
amount of those fees has not yet been deter-
mined. See United States v. Burnett, 262
F.2d 55 (9th Cir. 1958). Since we lack
jurisdiction, we must dismiss this appeal."
In Union Tank Car Company v. Isbrandtsen (2d Cir. 1969),

416 F.2d 96, the Circuit Court followed the Giesow decision.
The court was construing a note which among other provisions
provided for the payment of reasonable attorney's fees,

costs and expenses. Again, the trial court had entered
judgment and awarded costs and attorney's fees to be fixed
by further order of the court. In holding that the appeal

was premature, the court stated:
"Where attorneys' fees are a mere incident
of the litigation itself, particularly when
measured in part by the creation of a fund
in that litigation, they may often await the
outcome of the litigation on trial and appeal.
Sprague v. Ticonic National Bank, 307 U.S.
161. 59 S.Ct. 777, 83 L.Ed. 1184 (1938).
-.

---
Where they are dependent - -a contract under
on
construction - - court - - litigation,
by the in the
as here, the contract may more usefully be
-- --
completely construed - - trialandappeal.
on one -
. . ." (Underscorinq added.) Union Tank Car
. .

Company 'v. ~sbrandtsen,416 F. 2d at 97.
 The need for elimination of separate appeals is stressed
by the same court in Cinerama, Inc. v. Sweet Music, S.A.

(2d Cir. 1973), 482 F.2d 66, 70, where the court stated:

"The final judgment rule is designed not
merely to prevent an appeal on an issue con-
cerning which the trial court has not yet
made up its mind beyond possibility of
change but also to eliminate the need for
separate appellate consideration of differ-
ent elements of a single claim. The burgeon-
ing loads of the courts of appeals mandate
strict adherence to this salutary policy."
(Court's emphasis.)
While this Court has not yet ruled on the precise
issue, it has emphasized that a case should not be appealed
until it is totally ready for review, stating in Roy v.

Neibauer (1980), Mont. , 610 P.2d 1185, 1187, 37
St.Rep. 897, 899:

"If the case is not ready for review, it should
not be appealed . . . This Court does not have
the time and the resources to be compelled to
independently search the record to determine
if all essential issues have first been deci-
ded at the District Court level."
In a similar manner, this Court has consistently held that
where all of the issues and claims have not been finally

adjudicated, it will refuse to hear appeals. See Knight &

Co. v. Fort Belknap Indian Agency (1980), Mont. I

612 P.2d 1290, 37 St.Rep. 1049; Weston v. Kuntz (1980)~

Mont. , 610 P.2d 172, 37 St.Rep. 855.
In the present case, the claims for attorney's fees on

the part of both plaintiffs and Bennett are based on the
Aetna bond. In turn, there is a dispute as to whether the
Aetna bond requires payment to any or all of the parties
under the facts of the case. We conclude that the Aetna
bond under its terms does allow the award of attorney's fees

to both the plaintiffs and Bennett. Under that circumstance,

we find that the judgment was not final on November 6, and
d i d n o t become f i n a l u n t i l t h e e n t r y of judgment on December

2 2 , d e t e r m i n i n g t h e amount of f e e s .

The D i s t r i c t C o u r t e n t e r e d i t s f i n d i n g s on November 6 ,

1980. Aetna moved u n d e r Rule 5 2 ( b ) f o r t h e amendment of

such f i n d i n g s . I n c o n s i d e r i n g t h e Rule 5 2 ( b ) m o t i o n , t h e

D i s t r i c t C o u r t p o i n t e d o u t t h a t i t was p l a c e d i n a d i f f i c u l t

p o s i t i o n b e c a u s e i t was n o t a b l e t o c o n s i d e r m a t t e r s o u t s i d e

o f t h e r e c o r d made i n s u p p o r t of t h e Rule 59 and Rule 60

motions b e c a u s e a Rule 52 motion h a s t o be based on t h e

r e c o r d a s i t e x i s t e d a t t h e t i m e t h e f i n d i n g s w e r e made.

The D i s t r i c t C o u r t concluded t h a t i t must deny t h e Rule 52

motion. W e affirm t h a t ruling.

On November 1 7 , Aetna a l s o f i l e d i t s motion f o r a new

t r i a l under Rule 59. Aetna f a i l e d t o s e r v e i t s motion f o r

new t r i a l w i t h i n t h e t e n day p e r i o d p r o v i d e d under Rule

5 9 ( b ) as f o l l o w s :

"Time f o r motion. A motion f o r a new t r i a l
s h a l l be served n o t l a t e r than 1 0 days a f t e r
s e r v i c e o f n o t i c e of t h e e n t r y of t h e judg-
ment. I'

Our h o l d i n g t h a t t h e judgment d i d n o t become f i n a l u n t i l t h e

e n t r y of judgment on December 2 2 i s n o t c o n t r o l l i n g a s t o

t h i s motion. A Rule 59 motion may be made e i t h e r b e f o r e o r

a f t e r e n t r y of judgment, s u b j e c t t o t h e t i m e p e r i o d of t e n

d a y s a s s p e c i f i e d i n Rule 5 9 ( b ) . The r u l e i s c l e a r l y s t a t e d

i n 6 MOORE'S FEDERAL PRACTICE 71 5 9 . 0 9 [ 1 ] , a t 59-196
A (2d

ed. 1979) a s f o l l o w s :

"Under t h e e a r l y E n g l i s h common law ' t h e motion
f o r a new t r i a l p r e c e d e d t h e e n t r y of judgment,
which was n o t e n t e r e d upon t h e v e r d i c t a s a
m a t t e r of c o u r s e , nor a t a l l u n t i l a f t e r t h e
f i r s t f o u r days of t h e next t e r m a f t e r t r i a l . '
Rule 5 9 ( b ) r e q u i r e s t h a t a motion f o r new t r i a l
be served ' n o t l a t e r than 1 0 days a f t e r t h e
e n t r y o f t h e judgment.' T h i s wording was d e s -
igned t o b e broad enough t o p e r m i t t h e motion
 t o b e made b o t h b e f o r e - a f -r - -- -t-- y of
and -t e t h e e n r
t h e judgment." ( U n d e r s c o r i n g added.)

Because t h e motion f o r new t r i a l was n o t s e r v e d w i t h i n t h e

t e n day p e r i o d r e q u i r e d by Rule 5 9 ( b ) , t h e motion was t h e r e f o r e

deemed d e n i e d under t h e p r o v i s i o n s of t h e l a s t p a r a g r a p h o f

Rule 59 ( d ) :

" I f t h e motion i s n o t n o t i c e d up f o r h e a r -
i n g and no h e a r i n g i s h e l d t h e r e o n , i t s h a l l
be deemed d e n i e d a s of t h e e x p i r a t i o n of t h e
p e r i o d of t i m e w i t h i n which h e a r i n g i s r e q u i r -
ed t o b e h e l d under t h i s Rule 59."

The D i s t r i c t C o u r t p r o p e r l y concluded t h a t t h e motion f o r

new t r i a l was deemed d e n i e d and t h a t t h e c o u r t c o u l d n o t

consider t h e matter further. T h i s f o l l o w s t h e h o l d i n g s of

t h i s C o u r t t o t h e e f f e c t t h a t t h e t i m e and p r o c e d u r a l

l i m i t a t i o n s f o r m o t i o n s under Rule 59, M.R.Civ.P. a r e mandatory.

See Armstrong v . High C r e s t O i l , I n c . ( 1 9 7 4 ) , 164 Mont. 1 8 7 ,

520 P.2d 1081, and c a s e s t h e r e i n c i t e d . W e therefore affirm

t h e h o l d i n g of t h e D i s t r i c t C o u r t i n i t s d e n i a l of t h e Rule

59 motion f o r new t r i a l .

Aetna a l s o moved under Rule 6 0 ( b ) f o r r e l i e f from t h e

f i n a l judgment e n t e r e d a g a i n s t Aetna. The p e r t i n e n t p a r t s

o f Rule 6 0 ( b ) a r e :

"On motion and upon s u c h t e r m s a s are j u s t ,
t h e c o u r t may r e l i e v e a p a r t y o r h i s l e g a l
r e p r e s e n t a t i v e from a f i n a l judgment, o r d e r ,
o r p r o c e e d i n g f o r t h e f o l l o w i n g r e a s o n s : (1)
mistake, inadvertence, s u r p r i s e , o r excusable
neglect; ... o r ( 6 ) any o t h e r r e a s o n j u s t i -
f y i n g r e l i e f from t h e o p e r a t i o n of t h e judg-
ment. "

Rule 6 0 ( c ) p r o v i d e s t h a t a motion under Rule 6 0 ( b ) s h a l l be

h e a r d and d e t e r m i n e d w i t h i n t h e t i m e s p r o v i d e d by Rule 59 i n

t h e c a s e of motions f o r new t r i a l . The D i s t r i c t C o u r t

concluded t h a t t h e f a i l u r e t o n o t i c e up t h e Rule 60 motion

c a u s e d t h a t motion t o be deemed d e n i e d i n t h e same manner as

t h e f a i l u r e t o n o t i c e up t h e Rule 59 motion. The D i s t r i c t
Court therefore concluded that it no longer had any jurisdiction
to deal with the motion. That decision was based upon the
District Court's conclusion that its November 6 judgment was
final. Because of our holding that the judgment of the
District Court did not become final until the determination
of the attorney's fees on December 22, 1980, that conclusion
no longer is valid.
Because the November 17 motion under Rule 60 was made
before the judgment became final, the motion was premature
and may be disregarded. As pointed out by Professor Moore,
Rule 60(b) allows relief under circumstances where Rule 59
relief is not allowed because it is not timely. 7 MOORE'S
FEDERAL PRACTICE 1 60.18[8], at 216.1 (2d ed. 1979), states:
1

"When operating within the intendment of the
amended Rule, which carefully balances the
competing principles of finality and relief
from unjust judgments, the courts should and
do give a liberal construction to 60(b).
Nomenclature is unimportant . . .
a motion
that is made under Rule 59, which is not
timely and hence may not properly be consid-
ered under that Rule, may, nevertheless, be
considered as a motion under Rule 60 when
it states grounds for relief under this
latter rule."
On December 24, Aetna by its renewal motion again moved
under the provisions of Rule 60 for relief from the court's
findings of fact, conclusions of law and judgment. Believing
it no longer had jurisdiction, the District Court denied the
motion on December 31. We have concluded that the order
denying such Rule 60 motion should be set aside in order
that the District Court may determine the validity of the
motion under Rule 60 after an appropriate hearing.
With regard to Rule 60(b) motions, Professor Moore has
emphasized the liberal construction of the courts. 7 MOORE'S

FEDERAL PRACTICE 1 60.22[2], at 247 (2d ed. 1979), states:
1
 "By now, however, there is a considerable
body of federal decisions dealing with 'mistake,
inadvertence, surprise, or excusable neglect';
and, speaking generally, these decisions have
been in marked harmony with the proposition
that 60(b) is a remedial rule to be liberally
construed.
"On timely application, a party has been relieved
from: an order taken against him as the result
of an unauthorized stipulation by his attorney;
a judgment of dismissal where the failure to
file a bill of particulars was due to the over-
sight or inadvertence of the clerk of plaintiff's
attorney; financial difficulty in procurement
of counsel; and from a judgment of dismissal
for want of prosecution occasioned by the inad-
vertence of plaintiff or his counsel."
We recognize that the District Court may have some difficulty
concluding that the facts in this case warrant relief under
clause (1) of Rule 60(b) with regard to mistake, inadvertence,
surprise, or excusable neglect. It appears that cases can
qualify under clause (1) or under clause (6) which is broader
because it allows relief for "any other reason justifying
relief from the operation of the judgment." It is under
clause (6) that Professor Moore discusses instances in
which the courts have allowed relief from a judgment because
of actions by attorney comparable to those set forth in the
present case. 7 MOORE'S FEDERAL PRACTICE 1 60.27 [ 2 ] , at
1

357 (2d ed. 1 9 7 9 ) , states:
"Similarly, in cases in which a plenary trial
was held, but through extraordinary circum-
stances the movant's claim or defense was not
presented, or was presented in such a manner
that the judgment entered against him was akin
to a default judgment, relief has been granted
on motion under Rule 60(b)(6). - - Estate
In re
of Cremidas, for example, the movant, a minor,
was represented at the trial (a proceeding to
determine heirship) by an attorney who was so
inebriated that in effect movantls claim was
not presented. The cause had been tried in a
remote judicial division in Alaska and movant
indicated that no other lawyer was available
in the division and she was financially unable
to obtain legal assistance from a lawyer in
one of the other divisions." (The court grant-
ed relief from judgment on the motion made
some three years after its entry.)
Following the above quotation, at page 367, Professor Moore
refers to the question of failure of counsel to properly
handle a case and states:
"In L. P. Steuart, - - Matthews (329 F2d.
Inc. v.
234); pyaintiff's case was dismissed for
failure to prosecute due to the neglect of
counsel. Two years later, through different
counsel, plaintiff filed a motion to vacate
the judgment. In support of the motion were
an affidavit from former counsel to the effect
that he had been beset with personal problems,
related to the illness of his wife and the
death of his parents, and an affidavit of
plaintiff to the effect that he had made
'numerous inquiries' of former counsel, but
that he had 'refused to answer such inquiries,'
and from time to time assured plaintiff that
the 'case was proceeding and that settlement
of it would be made "soon."' The district
court denied the motion. The court of appeals
reversed, holding that under the circumstances
the district court had abused its discretion
in denying relief under Rule 60(b)(6). Judge
Edgerton observed:
"'Clause (1) of Rule 60(b) is not and clause
(6) is broad enouqh to permit relief when as
..

in this case ~ersonal~;oblems of counsel
cause - grozly to -
him n -
a
client's -- mislead theclient.'"
case and
(Underscoring added.)
United States v. Cirami (1977), 563 F.2d 26 (2d. Cir.)
quoted from - - Steuart, - and Professor Moore in
L. P. Inc.
reaching the conclusion that the attorney's mental disorder
which induced him both to neglect his duties and to assure
his client that he was attending to them, was a sufficient
basis for granting relief under clause (6) as "other reason
justifying relief," This conclusion is consistent with

Klapportt v. United States (1949), 335 U.S. 601, 69 S.Ct.
384, 93 L.Ed. 266, in which the Supreme Court determined
that the absence or unavailability of counsel which is
unavoidable should support relief from a judgment. In
addition, this Court has pointed out that the degree of

prejudice resulting to other parties is a factor to be
considered. Ming v. District Court (1970), 155 Mont. 84,
466 P.2d 907.

Here, the facts set forth in the Aetna affidavits
indicate a situation where counsel for Aetna, because of

emotional problems, was unable to adequately defend the
rights of his clients before and during trial. The affidavits
indicate a failure to introduce factual evidence, to prepare
and submit findings and conclusions, and to keep the client

apprised of the status of the case. All of these may also
have contributed to the facts upon which the District Court

concluded that punitive damages were appropriate because of
the action and lack of action on the part of Aetna. Under
these circumstances, equity does require that the District
Court hold a hearing and determine if under all the facts,
it is proper to vacate the judgment and have a trial on the
merits in order to allow Aetna to have its day in court.
Rule 60 relief is appropriate only where the party can

demonstrate that it has a meritorious defense. Marshall v.
Monroe & Sons, Inc. (6th Cir. 1980), 615 F.2d 1156. Aetna's
motions and affidavit set out a number of defenses which are
claimed to be available and also facts sufficient to support
such defenses.
As trial counsel will recognize, in the interest of
clarity, we have not referred to all of the motions and
rulings, and have limited our reference to the essential

elements. The procedure was further confused by the condi-
tional notice of appeal filed by Aetna on December 24.

This, of course, raised the question of the jurisdiction of
the District Court to make any further orders. By such
conditional notices of appeal, Aetna attempted to take an
appeal from the November 6 judgment should it be determined
to be final, and in part stated:

". .
. files this conditional notice of appeal
in the event the Supreme Court of Montana deter-
mines that November 6, 1980, was indeed the
date of final judgment entered by the above-
entitled court in this action."
Because the notices of appeal were conditioned upon an
action to be taken by this Court at some undetermined time
in the future, the notices were ineffective. We hold that
the stated conditional notices of appeal were totally inef-
fective and may be disregarded. As a result, the notice of

appeal upon which the present appeal by Aetna is based is

the January 9, 1981, notice of appeal which did cover the
final judgment, order awarding attorney's fees, and order
denying post-trial motions as well as the judgment of
November 6, 1980.
IV.

Aetna contends that the Bennett deposition was not

admissible under Rule 32(a)(3), M.R.Civ.P., in the absence
of a showing that Bennett was not available. Aetna argues
that because the deposition was wrongly admitted, there was
no competent evidence to support a case in favor of Bennett

against Aetna and requests that the Bennett complaint be

dismissed. Bennett argues that Rule 32(a)(3)(D) provides
that a trial judge may admit a deposition if exceptional
circumstances exist which make it desirable in the interests
of justice to allow the deposition. We do not find it

necessary to consider the numerous cases cited in support of
both views. In this instance, the District Court concluded
that because of the many hearings prior to trial and the
many presentations made to the court that the case would be
submitted on deposition and agreed statements of facts, the
objection to the introduction of the deposition was overruled.
No facts are set forth which suggest that the District Court
was in error in reaching this decision. We affirm the
court's decision to admit the Bennett deposition in evidence
in its entirety.
v.
Did the Aetna bond encompass the penalties in the
amount of $4,176.48 for which plaintiff carpenters sought
recovery? Aetna contends that its bond did not specifically
provide for penalties and therefore that Aetna can be required
to pay only wages as distinguished from penalties for late
payment of wages. In substance the bond provides that if
Hoselton shall promptly make payments to all claimants for
all labor and material used then the obligation is to be
void. Otherwise, as in this case, Aetna agrees with Bennett
that every claimant "who has not been paid in full" before
the expiration of 90 days after the date on which the labor
was performed, may sue on this bond "for such sum or sums as
may be justly due claimant." The District Court determined
that the penalties were justly due to plaintiff carpenters
under their written agreements. Such obligations come under
the express provisions of the bond. There is no restriction
in the bond which limits Aetna's liability in the manner
suggested. We approve the holding of the District Court.

We affirm the judgment of the District Court as contained
in its judgment of November 6, 1980, and its order determining
fees of December 22, 1980, subject to the following:
The order of the District Court dated December 31,
1980, denying the Rule 60 motion of Aetna is vacated and the
D i s t r i c t C o u r t i s i n s t r u c t e d t o h o l d s u c h h e a r i n g s and t a k e

such o t h e r s t e p s a s it f i n d s t o be a p p r o p r i a t e i n o r d e r t o

c o n s i d e r A e t n a ' s Rule m o t i.on o n i t s m e r i t s .

W e Concur:

ad &b,,reDO
Chief J u s t i c e
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Justices
Mr. Justice Frank B. Morrison, Jr., dissenting:

Judgment in this case was entered by the District Court
on November 6, 1980. The attorney's fee issue was not
completed until December 22, 1980. Had an appeal been taken
from the November 6 judgment I have no doubt that this Court
would have overruled a motion to dismiss the appeal as
premature. Our holding surely would have been that the
judgment became final November 6 and the notice of appeal
filed from that judgment would be effective. Here, the
majority attempts to fashion a rule to suit its purpose in
an attempt to fashion an equitable result at the expense of
an orderly and stable civil procedure.
The majority, knowing its position is weak, attempts to
distinguish between Rule 60 and Rule 59 motions. The majority
mistakenly relies upon 7 MOORE'S FEDERAL PRACTICE 1 60.18[81,
1

at 216.1 (2d ed. 1979). Rule 60(c) of the Montana Rules of
Civil Procedure provides that Rule 60 motions shall be heard
and determined within the times provided by Rule 59. There
is no federal counterpart to Rule 60(c). Therefore, MOORE'S
is inapplicable.
I have always felt that litigants should "have their
day in court" and that liberal construction should be given

to procedural rules in order that this end might be facilitated.
However, to achieve the result here wrought by the majority,
requires a rewriting of the rules. This I will not do.
*
The District Court should be
Mr. Justice John C. Sheehy, concurring and dissenting:

I concur in the affirmance of the judgment of the
District Court. I dissent respectfully from the remand for

reconsideration of the Rule 60 motions.
Principally, I see no reason to hold the District Court
in error where the problems surrounding the Rule 60 motions
were created through the disregard by Aetna's counsel of the
rudimentary rules of civil procedure in post-trial proceedings,
as governed by the Montana practice.
It is correctly stated in the majority opinion that
once Aetna's counsel failed to notice up his Rule 59 motions
for new trial or amendment of judgment within 10 days (Rule
59(d)) the "court could not consider the matter further."
The reason is set out in our earlier case of Leitheiser v.
Montana State Prison (1973), 161 Mont. 343, 348, 505 P.2d
1203, 1206, where we said:
"The district court was without jurisdiction
to grant - deny a motion for a new trial on
or
March 2, 1972. By operation of the self-
executing provision of Rule 59(d), M.R.Civ.P.,
the motion for a new trial was 'deemed denied'
('deemed' in this construction has been held
to be synonymous with 'considered', 'determined',
or 'adjudged') on February 18, 1972."
And further:
". . . However, once the self-executing denial
of a motion under Rule 59(d) becomes effective,
any subsequent order by the district court
concerning that motion is outside the district
court's jurisdiction and, consequently, null,
void, and without effect." 161 Mont. at 348.
The majority opinion ignores, however, the provision of

Rule 60(c) that is equally as mandatory and compelling as
.
Rule 59 (d) Rule 60 (c) provides :
-- Time for
"Rule 60(c). -- hearing and determining
motions. Motions provided by subdivisions (a)
 and (b) of this rule shall be heard and determined
within the times provided by Rule 59 in the
case of motions for new trials and amendment of
judgment. "
The overbearing force of Rule 60(c) which is unique to
Montana rules (there is no federal counterpart in Rule 60,
F.R.Civ.P.) is that motions under Rule 60, such as this case
features, are subject to the same limitations under our
practice as motions under Rule 59 (there is no federal
counterpart to the notice and hearing provisions in our
Rule 59, in Rule 59, F.R.Civ.P.). Since this is true, the
District Court here properly decided under Leitheiser that
it had lost jurisdiction to hear the first Rule 60(b) motion
filed by Aetna's counsel. The first motion was "deemed
denied," and so the motion had been "determined" in the
legal sense.
Time and again, in opinions, in seminars, in speeches
by members of this Court before meetings of the State Bar,
we have stressed the jurisdictional traps that lie in the
post-trial motions, and have urged counsel practicing in the
trial courts of this state to know and observe the same. It
was not any act, bent or proclivity of the district judge
that created Aetna's problem about its Rule 60(b) motion.
It was the failure of Aetna's counsel to follow the plain
provisions of Rules 59 and 60. I am unable to explain to
Leitheiser, to Armstrong (c.f. 164 Mont. 187, 196, 520 P.2d
1081, 1086), to Marvel Brute Steel Bldg. ((1980), c.f.
,
Mont. - 616 P.2d 380, 382, 37 St.Rep. 1670), and to a host
of other litigants why Rule 59 deprived their district
courts of jurisdiction to act, but Rule 60 does not operate
in the same way here. I find no satisfactory explanation in

the majority opinion.
 In a recent newspaper poll among the state bar members,
we learned that the divagations of this Court from established
precedent raised a problem for state lawyers. They reported
that every District Court decision should be appealed to
avoid malpractice claims, because the loser in the District
Court may benefit from the planetary decisions of this Court.
We have here, perhaps, an example.
The majority opinion does not distinguish between the
first Rule 60(b) motion of Aetna's counsel and the second
Rule 60(b) motion, again filed before final judgment, that
the District Court labelled a "bootstrap motion."
The second Rule 60 motion was filed by Aetna's counsel
on December 12, 1980. -
It is not a motion addressed to the
judgment, final or partial. It is titled "Rule 60 Motion
for Relief from Final Order or Proceeding." It moves the
District Court for an order "relieving the defendant, Aetna
Casualty Company, from its omission to notice the hearing of
defendant's consolidated motions for a new trial, to alter
or amend judgment and for relief from the court's findings

of fact, conclusions of law, and judgment, and other motions
filed on November 17, 1980, within ten (10) days after the
motion had been served . . ." upon the grounds that ~etna's
counsel had failed to notice the motions due to "mistake,
inadvertence, excusable neglect or for other reasons justifying
relief or through an error arising from oversight or omission."
The second Rule 60 motion depends entirely upon the
omission of Aetna's counsel to notice up his post-trial
motions for hearing. His affidavit in support does not
constitute a sufficient excuse, in my judgment, to support
the grant of his motion. (I will advert to his affidavit

later). It is insufficient in view of the numerous cases
that have come out of this Court that place a strict duty on
counsel to follow the notice and hearing provisions of Rule
59. No diligent counsel should now be able to claim he was
unaware of the required procedures. Diligence is required
of counsel in the representation of clients.
The second Rule 60 motion asked the District Court to
do something it was powerless to do under our decisions. The
court could not resurrect the Rule 59 or 60 motions which
were dead, functus officio. The District Court had lost
jurisdiction. Worse, now this Court has opened a way to
undermine the whole structure of our earlier decisions
regarding Rule 59 or 60 motions which are "deemed denied."
So a lawyer in the future does fail to notice up or procure
a hearing within 10 days of his Rule 59 or 60 motions. No
matter, he can now file another motion under Rule 60, saying
he forgot, or didn't know. He has a viable motion under
this majority opinion.
In addition, the majority has succeeded in circumventing
Rule 6 ( b ) of the Montana Rules of Civil Procedure, which
provides that a court may not extend the time for taking

action under Rule 60, except to the extent and under the
conditions stated in the rule.
Be that as it may, the bootstrap Rule 60(b) motion
should be denied as a matter of law, assuming it was otherwise
timely. Its basis is the claimed excusable neglect of
Aetna's counsel. His affidavit in support of his bootstrap
motion recites that at the time he fashioned the first
motions, he was heavily burdened with other matters, including
the responsibility for 150 files in active litigation,
numerous pieces of correspondence, preparing and filing a

reply brief on behalf of the state in United States v.
Montana then on appeal in the United States Supreme Court,
and a necessary trip to Washington, D.C. in connection with
that case; and "numerous other matters which precluded his
giving this matter the attention that it deserved." In
Link v. Wabash Railroad Co. (1962), 370 U.S. 626, 633-634,
82 S.Ct. 1386, 1390, 8 L.Ed.2d 734, 740, the high court
imputed the neglect of the attorney to the party and refused
Rule 60 relief because of counsel's unexcused conduct. The
court declared that since the client voluntarily chose the

attorney as his representative in the action, the party
could not avoid the consequences of the acts and omissions
of his freely selected agent. In Schwarz v. United States
(2d Cir. 1967), 384 F.2d 833, 836, the court of appeals
upheld the denial of a motion for relief where the attorney
failed to prosecute his client's case, occasioned by the
fact that the attorney had undertaken to handle more cases
than he could manage and had neglected plaintiff's case. In
Kostenbauder v. Secretary of H.E.W. (U.S.D.C. Md. Pa.2 1976),
71 F.R.D. 449, 21 F.R.Serv.2d 1186, relief from summary
judgment was denied where the previous attorney failed to

file opposition briefs, and it was claimed that the attorney
was running for political office, had a large caseload and
had lost a key employee. In essence, the courts are saying
that a large and busy practice is the norm for trial attorneys
and that such a business does not justify relief from
ordinary neglect.
In his affidavit supporting his bootstrap motion,
Aetna's counsel does not accuse himself of gross negligence.
If he could state gross negligence, perhaps his case would
come under Rule 60(b)(6), the residual clause of that rule.
Clause 60(b)(l), covers excusable neglect; presumably clause
60(b)(6) covers inexcusable negligence, since the provisions

of clause (b)(1) and (b)(6) are mutually exclusive. Since
Aetna's counsel did not claim gross negligence, he cannot
rely upon clause (b)(6).

It should be remembered that through all of this
litigation, Aetna has been represented by two independent
law firms, each respectively looking out for the interests
of Aetna as against Donald Bennett and all of the plaintiffs.
One law firm represented defendant M. D. O'Connell and Aetna
Casualty Company where their interests coincided (Aetna
claimed to have an indemnity right against M. D. O'Connell

for any losses sustained in this litigation). A separate
law firm represented Aetna as a defendant against all of the
plaintiffs, against defendant Donald Bennett, and also
against M. D. O'Connell on the indemnity cross-claim.
As to the issues involved here in the successful cross-claim
of Donald Bennett, the interests of these two law firms
coincided in their representation of Aetna. Each made Rule
59 motions. Each failed to notice up or to procure a hearing
within the ten day period required by Rule 59(d).
The majority opinion purports to have found an escape
hatch as to the first Rule 60 motion of Aetna, the one based
on the illness of its attorney. The judgment for Bennett,
the majority conclude, was not final until the award of

attorneys fees was decided by the District Court on December
22, 1980. On this basis, the majority resurrect the first
Rule 60 motion and send it back for reconsideration. Again
the majority ignore the provisions of Rule 60(c), which
provide that motions under the rule "shall be heard and
determined within the times provided by Rule 59." The
majority concede that motions under Rule 59 may be made
prior to final judgment. They apparently see no illogic
in holding that under Rule 59 a motion for relief from a pre-
judgment order can be taken by a party while denying that
same procedure under Rule 60.
The contention that the November 6, 1980 judgment of
the District Court was not final was an afterthought by
Aetnak counsel. It was never raised in the pretrial motions
or on the arguments thereon until after counsel for the
successful parties moved the court to fix attorneys fees.
Then a light turned on, and there came a flurry of new
motions for reconsideration under Rules 59 and 60 on the
grounds that the earlier motions, which - - filed, were
-- they had

"premature". Having once proceeded undiligently to deprive
the District Court of the power to hear their Rule 59 and
60 motions, they now proceeded diligently but unwittingly to
deprive the District Court of jurisdiction to hear their
Rule 60 motion after the judgment became final on December
22, 1980. (The court gave oral notice of its attorneys fees
decision on December 17, 1980, but the order was not entered
and served until December 22, 1980.)
On December 22, 1980, one of Aetna's law firms filed a
"conditional notice of appeal by Aetna Casualty and Surety
Company, from the judgment entered on November 6, 1980, the
summary denial of their motions for new trial or to amend

the findings of fact and conclusions of law dated November
28, 1980, and the court's awarding attorney fees on December
17, 1980."
On December 24, 1980, the other of Aetna's law firms
filed a conditional notice of appeal on behalf of Aetna
Casualty and Surety Company, from the judgment of November
6, 1980, and supplemented by its award of attorney fees on
December 17, 1980, on the ground that it wanted "to insure
that its rights on appeal had been preserved and perfected"
in the event that the Supreme Court determined that November
6, 1980 was indeed the date of the final judgment.
On December 26, 1980, the counsel who had filed the
second conditional notice of appeal, having found that he
had not referred to the denial of the post-trial motions in
that notice, filed an "amended conditional notice of appeal"
from the judgment entered on November 6, 1980, supplemented
by the award of attorneys fees on December 17, 1980, and the
court orders denying their motions filed pursuant to Rules
52, 59 and 60. Again the notice stated that it was conditional
upon whether this Court decided that the November 16, 1980
date was indeed the date of final judgment but that Aetna
wanted "to insure that its rights on appeal had been preserved
and perfected."
Each law firm subsequently filed, on January 5 and
January 9, 1981, ordinary unconditional notices of appeal.
-
The "conditional" notices of appeal which were filed by
Aetna prevented the District Court from considering further
the Rule 60 motion based on the illness of the attorney
after the judgment became final on December 22, 1980. There
is no such animal in our procedure as a "conditional"
notice of appeal. Either the District Court has jurisdiction
of the cause or the Supreme Court has jurisdiction of the
cause. Jurisdiction transfers to the Supreme Court from a
District Court upon the filing of a notice of appeal, and
thereafter the District Court is powerless to take any
substantive action with respect to the cause. Churchhill v.
,
Holly Sugar Corp. (1981), - Mont. - 629 P.2d 753, 760,
38 St.Rep. 860; State Etc. v. District Court, Etc. (1980),

-- Mont . -, 614 P.2d 1050, 1051-52, 37 St.Rep. 1275;
Northern Plains, Etc. v. Bd. of H. & Envir. Sciences (1979),

-- Mont . -, 603 P.2d 684, 688, 36 St.Rep. 2174; McCormick
v. McCormick (1975), 168 Mont. 136, 138, 541 P.2d 765, 766.
The "condition" laid down in the conditional notices of
appeal, that is whether the right of Aetna to consideration
of its Rule 59 and 60 motions depended on whether the judgment
was final on November 8, 1980, is no condition at all.
Aetna's counsel had misread the law. They had lost the
right to any consideration of the Rule 59 and 60 motions by
virtue of the time and notice provisions of Rule 59(d) and
60(c). The bootstrap motion under Rule 60 was insufficient
on its face. The intention of Aetna that the "conditional"
notices of appeal perfected and preserved its rights in this
Court is manifested from the instruments themselves. The
majority opinion ignores this manifest intention.
An appeal is taken by filing a notice of appeal in the
district court (Rule 4(a), M.R.App.Civ.P.). It must specify
the party or parties taking the appeal, and designate the
judgment or order appealed from. (Rule 4(c), M.R.App.Civ.P.)
And finally, by filing the "conditional" notices in compliance
with the rules, Aetna fulfilled its desire "to insure that
its rights on appeal have been preserved and perfected." A

notice of appeal is just that, a notice of appeal. Any
other label attached to it is unimportant. The District
Court from which the appeal had been taken was divested of
jurisdiction under our case law.
Before we leave this matter finally, it should be
noted that the District Court was not entirely out in left
field in stating that under Montana law, attorneys fees are
a matter of costs and not of special damages recoverable in
the main action.
In Kintner v. Harr (1965), 146 Mont. 461, 480, 408
P.2d 487, 498, this Court states broadly that counsel fees

are not "reasonable and necessary expenses as are taxable
according to the course and practice of the court." (See
section 25-10-201 (9), MCA. ) Yet we have never overruled
Bovee v. Helland (1916), 52 Mont. 151, 155, 156 P. 416, 417,
to the effect that if the parties by contract or stipulation
intend that attorneys fees are to be paid to the prevailing
party as part of the costs or "in addition to other costs,"
then such attorneys fees shall be assessed by the court as a
part of the costs. In other words, under Bovee, the judgment
is final before the costs are assessed, and the amount of
costs to be awarded is not intrinsic to the finality of the
judgment. (Such fees can be attacked in the manner provided

for objections to items of costs. Section 25-10-502, MCA.)
In this case, the language of the security agreement

that gives right to attorneys fees for the successful parties
is "The obligee shall not be liable for the payment of any
costs or expenses of any such suit."
The problem of whether attorneys fees are costs or a
part of the judgment depends, in my opinion, on whether they

are of the nature of special damages recoverable upon pleadings
and proof or part of the incidental expenses of suit. This

seems to be the tenor of Bovee, supra. It is not an easy
question to decide. It is certainly vexing the federal
courts. See White v. New Hampshire Dept. of Empl. Sec.
(Decided March 2, 1382, slip opinion).
For the reasons foregoing, therefore, I would affirm
the ~istrictCourt judgment.

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