Alan D. Nicholson, Inc. v. Cannon

No. 83-237

I N THE SUPREME C U T O THE STATE O M N A A
O R F F OTN

1983

A A D . NICHOLSON, I N C .
L N
a corporation,
P l a i n t i f f and Respondent,

ROSS W. CANNON,

Defendant and A p p e l l a n t .

APPEAL FROM: D i s t r i c t C o u r t of t h e F i r s t J u d i c i a l D i s t r i c t ,
I n a n d f o r t h e County o f Lewis & C l a r k ,
The H o n o r a b l e Gordon B e n n e t t , J u d g e p r e s i d i n g .

COUNSEL O RECORD:
F

For Appellant:

Edmund F. Sheehy, J r . , H e l e n a , Itontana

F o r Respondent :

Gary L. D a v i s o f Luxan & M u r f i t t , H e l e n a , Montana

Submitted on B r i e f s : O c t o b e r 6, 1983

Decided: J a n u a r y 1 2 , 1984

Filed:
Mr. Chief Justice Frank I. Haswell delivered the Opinion of
the Court.
Appellant Cannon appeals an order of the District Court
awarding Nicholson $18,000 in attorney fees and $1,084.90 in
costs. These amounts represent the total fees and costs due
Nicholson's attorney for litigating this matter from incep-
tion through the District Court judgment. We affirm and
remand for the determination of reasonable attorney fees and
costs on appeal.
Nicholson and Cannon signed an earnest money agreement
for the purchase of a condominium by Cannon on November 30,
1979. A contract for deed was executed by the parties on
March 3, 1980. Among other provisions, the contract for deed
contained the f01-lowing terms :
(1) a provision allowing for the down payment to be

paid in installments with the final installment in the amount

(2) a provision requiring the payment of $4,500 plus
interest on December 31, 1980; and
(3) a provision setting the monthly payments at $389.82
commencing January 15, 1980.
In addition, Cannon demanded that a "latent defects"
provision be added to the contract which provides as follows:
"14. If within one year from March 1,
1980, latent defects are discovered in
the work and materials with respect to
the real estate, premises and improve-
ments described herein, Seller will
promptly, following written notice from
Purchaser, correct such defective work or
materials in a good and workmanlike
manner, and in accordance with current
building, plumbing, and electrical codes.
If Seller does not promptly remedy the
latent defects, Purchaser may have the
defects corrected, removed, redone or
replaced, and all direct and indirect
costs thereof will be paid by Seller."
Furthermore, paragraph 8 of t h e c o n t r a c t f o r deed p r o v i d e s

t h e following regarding a.ttorney fees:

"In t h e event l e g a l a c t i o n i s necessary
by e i t h e r o f t h e p a r t i e s h e r e t o t o en-
f o r c e t h e r i g h t s o f s a i d p a r t i e s hereun-
d e r , it i s s p e c i f i c a l l y u n d e r s t o o d a.nd
a g r e e d t h a t t h e l o s i n g p a r t y s h a l l pay t o
t h e p r e v a i l i n g p a r t y reasonable a t t o r -
n e y s ' f e e s and a l l c o s t s i n c u r r e d i n c i -
d.ent t o such l e g a l a c t i o n . "

Essentially, t h e purpose of t h e l i t i g a t i o n underlying

t h i s a p p e a l was t o e n a b l e Nicholson t o c o l l e c t payments due

under t h e c o n t r a c t f o r deed which Cannon w i t h h e l d u n t i l such

t i m e a s Nicholson c o r r e c t e d c e r t a i n " l a t e n t d e f e c t s . " The
m a t t e r was t r i e d t o a j u r y on t h e i s s u e of a d e f e c t i v e h e a t -

ing system, the court having already granted Nicholson's
motion f o r a d i r e c t e d v e r d i c t f o r t h e sums prayed f o r i n t h e

complaint. The j u r y r e t u r n e d a v e r d i c t f i n d i n g no d e f e c t i n

the heating system, and judgment was entered accordingly.
The f o l l o w i n g i s s u e s a r e r a i s e d i n t h i s a p p e a l :

1. Did t h e D i s t r i c t Court err in awarding a t t o r n e y

f e e s and. c o s t s t o N i c h o l s o n ?

2. Did t h e D i s t r i c t C o u r t err i n d e t e r m i n i n g N i c h o l s o n

t o be t h e p r e v a i l i n g p a r t y ?

Did t h e D i s t r i c t C o u r t err i n r e o p e n i n g t h e h e a r i n g

on a t t o r n e y f e e s ?

4. Should Cannon. be o r d e r e d t o pay N i c h o l s o n ' s fees

and c o s t s on a p p e a l ?

I

The f i r s t i s s u e r a i s e d by Cannon i s whether t h e D i s -
trict Court properly awarded attorney fees and costs to
Nicholson. W e n o t e t h a t p a r a g r a p h 8 of t h e c o n t r a c t f o r deed

e x e c u t e d by b o t h p a r t i e s p r o v i d e s t h a t t h e l o s i n g p a r t y pay
the prevailing party reasonable attorney fees and al-1 costs.
In order to properly determine the amount of reasonable
attorney fees, we have held that the District Court must
consider various circumstances, including, but not limited
to, the following:
(1) the amount and character of the
services rend-ered;
i2) the labor, time and trouble
involved ;
(3) the character and importance of
the litigation in which the services were
rendered;
(4) the amount of money or the
value of property to be affected;
(5) the professional skill and
experience called for;
(6) the chara.cter an.d standing in
their profession of the attorneys; and
(7) the result secured by the
services of the attorneys may also be
considered.
First Security Bank of Bozeman v. Tholkes (1976), 169 Mont.
422, 429-430, 547 P.2d 1328, 1332, as cited in Talmage v.
Gruss (Mont. 1983), 658 P.2d 419, 40 St.Rep. 176. A review
of the District Court's opinion and order regarding attorney
fees and costs clearly indicates that the District Court
properly considered all of the necessary factors and, conse-
quently, we find that there was no abuse of discretion.
Furthermore, we have held that ". . . the amount fixed as
attorney fees is largely discretionary with the District
Court. We will not disturb its judgment in the absence of an
abuse of that discretion." Carkeek v. Ayer (Mont. 1980), 613
P.2d 1013, 1015, 37 St.Fep. 1274, 1276. Given the complex
circumstances of this litigation we find no abuse of discre-
tion in either the award of the fees and costs to Nicholson
or in the amounts awarded.
Cannon also argues that the costs of litigation were
improperly awarded to Nicholson. We note that the lanffuage
of the contract provides that "all costs" be awarded the
prevailing party. The District Court has already limited the
costs awarded Nicholson by eliminating from the award those
costs relating to the expert witnesses. Considering the
language of the contract, we find no reason to further limit
such costs and find the District Court did not abuse its
discretion in ordering their payment by Cannon.

I1

Counsel for Cannon also asserts that the District Court
erred in determining the identity of the "prevailing party"
under the terms of para~raph 8 of the contract for deed. A
thorough review of the District Court file and the transcript
of hearings on the issues of attorney fees and costs clearly
shows that appellant's argument totally lacks merit.
Paraqraph 14 of the contract for deed, added to the
contract at Cannon's request, provides a remedy if the con-
tractor fails to correct latent defects. That remedy allows
the buyer to have the defects corrected at the seller's
expense. Even though this provision was specifically added
to the contract at Cannon's insistence, he failed to utilize
this remedy and instead withheld payments due under the
contract. Clearly, Cannon's own default created the necessi-
ty of this litigation. The result was a directed verdict
against Cannon by the court for the sums prayed for in the
complaint and a jury verdict against Cannon an the issue of
the defective heating system. Both verdicts, we note, are
not raised by Cannon as issues on this appeal.
In conclusion, on this issue we affirm the District
Court in fi.nding Nicholson to be the prevailing party, spe-
cifically in light of the verdicts ~igainst Cannon and Can-
non's activities which precipitated. this litigation. Simply
because Nicholson did not obtain forfeiture of the contract
does not mean that Cannon was not in default and that
Nicholson was not the prevailing party.

The next issue to be ad.dressed is whether the District
Court erred in reopening the hearing regarding attorney fees.
Cannon cites no authority to support his position that the
hearing should not have been reopened. He simply states that
in his opinion, the "newly discovered evidence" was not, in
fact, newly discovered evidence and therefore the hearing
should not have been reopened.
Counsel for Nicholson moved to reopen the hearing
pursuant to Rule 60(b), M.R.Civ.P., four days after the
original hearing was held. The basis for his motion was that
time records pertaining to the litigation which had been
misfiled and could not be located prior to the first hearing
had subsequently been discovered. He proceeded under the
"newly discovered evidence" provision of Rule 60 (b) which in
essence provides that the court may relieve a party or his
legal representative from a final judgment, order or proceed-
ing if there is ". . . newly discovered evidence which by due
diligence could not have been discovered in time to move for
a new trial under Rule 59 (b) ." Rule 60 (b) also allows the
court to relieve a party or his counsel from a final
judgment, order or proceeding for "any other reason justify-
ing relief from the operation of the judgment." Rule 60 (b),
M.R.Civ.P.
The question of reopening the hearing on attorney fees
and costs was argued throughly before the District Court and
a review of the transcript fails to indicate the court abused
its discretion in reopening the hearing. Therefore, we
affirm the decision of the District Court on this issue.

IV

The final issue to be addressed is whether Nicholson
should also recover his fees and costs of this appeal.
A review of the contract for deed reveals that the
prevailing party is to be awarded reasonable fees and all
costs. The provision does not limit the recovery to fees and
costs through judgment of the District Court hut rather
provides for reasonable fees and all costs ". . . incident to
such legal action." Therefore, we find it appropriate under
the terms of the contract to charge Cannon with Nicholson's
reasonable fees and all costs on this appeal and hereby
remand to the District Court for determination of such fees
and costs.
We affirm the judgment of the District Court but remand
for determination of attorney fees on appeal in conformity
with this opinion.

&dS,ik,d
Chief Justice
We concur: