No. 84-539
I N THE SUPREME COURT OF THE STATE OF MONTANA
1985
A. KENDRICK SMITH; MAX A . HANSEN,
and W. G. G I L B E R T , J R . ,
P l a i n t i f f s and R e s p o n d e n t s ,
CLINTON L. HOWERY and
JACQUELINE J. HOWERY,
D e f e n d a n t s and A p p e l l a n t s .
APPEAL FROM: D i s t r i c t C o u r t of t h e F i f t h J u d i c i a l D i s t r i c t ,
I n and f o r t h e C o u n t y of B e a v e r h e a d ,
T h e H o n o r a b l e M a r k S u l l i v a n , Judge p r e s i d i n g .
COUNSEL OF RECORD:
For A p p e l l a n t s :
R o b e r t T. Cumrnins, Helena, Montana
For Respondents :
S c h u l z , D a v i s & Warren, D i l l o n , M o n t a n a
Garlington, Lohn & Robinson, Missoula, Montana
S u b m i t t e d on B r i e f s : May 9 , 1985
Decided: July 2, 1985
Filed: _i[jt 2 4585
d
Clerk
Mr. J u s t i c e Frank B. Morrison, J r . , d e l i v e r e d t h e Opinion of
t h e Court.
C l i n t o n and J a c q u e l i n e Howery (Howerys) a p p e a l t h e May
14, 1984, o r d e r o f t h e F i f t h J u d i c i a l D i s t r i c t Court g r a n t i n g
respondent attorneys, Kendrick Smith, Max Hansen and W.G.
Gilbert, J r . ' s m o t i o n f o r summary judgment. We affirm the
o r d e r g r a n t i n g summary judgment.
In February of 1979, the State of Montana filed an
a c t i o n i n Beaverhead County s e e k i n g t o condemn .76 o f an a c r e
o f Howerys' l a n d f o r highway p u r p o s e s . The S t a t e and Howerys
w e r e u n a b l e t o a g r e e on c o m p e n s a t i o n . The Howerys t h e r e f o r e
h i r e d t h e r e s p o n d e n t s t o r e p r e s e n t them i n t h e condemnation
action.
The w r i t t e n retainer a g r e e m e n t e x e c u t e d by Howerys on
March 21, 1979, c o n t a i n s t h e f o l l o w i n g p r o v i s i o n s r e g a r d i n g
c o s t s and a t t o r n e y s f e e s :
"1. You a r e t o pay u s a l l o f o u r r e a s o n a b l e ex-
p e n s e s which w e w i l l t r y t o k e e p t o a minimum, and
t h e s e w i l l b e p a y a b l e t o u s , no m a t t e r what t h e
outcome o f t h e c a s e . ...
"2. The f e e s f o r o u r s e r v i c e s w i l l b e on a c o n t i n -
g e n t f e e b a s i s , and you have a g r e e d t o p a y u s
33-1/3% o f t h e r e c o v e r y by judgment o r compromise
(and you would h a v e t o f u l l y a g r e e t o any compro-
m i s e b e f o r e it would b e e f f e c t i v e ) . I n t h e event
t h e r e i s a n a p p e a l i n t h e c a s e by e i t h e r s i d e , t h e
f e e would b e r a i s e d t o 40% o f t h e amount o f r e c o v -
ery. T h e r e w i l l b e o n l y o n e f e e a s between t h e two
law f i r m s . "
The Howerys recovered $315,284.03 from the State:
$243,475.00 for total damages; $42,958.33 for interest on
those damages from t h e d a t e o f taking; and $28,850.70 for
c o s t s and a t t o r n e y s ' fees. The S t a t e p a i d t h e e n t i r e judg-
ment prior to appealing to this Court. We affirmed that
judgment i n S t a t e o f Montana v . Howery (Mont. 1 9 8 3 ) , 664 P.2d
1387, 40 St.Rep. 975. Howerys were further awarded
$8,427.19, $8,220.00 of which was a t t o r n e y s ' fees, for the
S t a t e ' s appeal.
While t h e a p p e a l was p e n d i n g i n t h i s C o u r t , $303,109.03
o f t h e $315,284.03 was p l a c e d i n t h r e e c e r t i f i c a t e s o f depos-
it j o i n t l y h e l d i n t h e names o f a t t o r n e y Max Hansen and t h e
Howerys. The remaining $12,175.00 was paid directly to
r e s p o n d e n t a t t o r n e y s f o r t h e i r c o s t s and w i t n e s s f e e s . The
c e r t i f i c a t e s o f d e p o s i t earned post-judgment interest total-
l i n g $40,458.38.
Following t h e S t a t e ' s unsuccessful a p p e a l , t h e Howerys
and r e s p o n d e n t s began n e g o t i a t i o n s t o s e t t l e t h e a t t o r n e y s '
f e e s due and owing t o the respondents. The p a r t i e s were
u n a b l e t o r e a c h a g r e e m e n t and r e s p o n d e n t s f i l e d a c o m p l a i n t
July 26, 1983, seeking $143,329.68 f o r work performed and
services rendered. An amended complaint seeking t h e same
amount was f i l e d t h e n e x t day.
P e r m i s s i o n t o f i l e a second amended c o m p l a i n t was g r a n t -
ed r e s p o n d e n t s on O c t o b e r 24, 1983. That complaint reduced
the demand for attorneys' fees t o $130,717.60 and added a
second count, alleging a breach by Howerys of an implied
covenant of f a i r d e a l i n g w i t h t h e a t t o r n e y s and r e q u e s t i n g
e x e m p l a r y damages o f $50,000.00.
On November 1 8 , 1 9 8 3 , Howerys f i l e d a n a n s w e r , c o u n t e r -
c l a i m and demand f o r jury trial. Howerys summarily d e n i e d
a l l t h e a l l e g a t i o n s contained i n each count o f respondents'
complaint. T h e i r c o u n t e r c l a i m a l l e g e d , among o t h e r t h i n g s , a
b r e a c h o f t h e a t t o r n e y s ' o b l i g a t i o n t o d e a l f a i r l y w i t h them
and v i o l a t i o n o f t h e f i d u c i a r y r e l a t i o n s h i p between Howerys
and t h e a t t o r n e y s .
On January 16, 1984, respondents filed a motion for
summary judgment on Count I o f t h e s e c o n d amended c o m p l a i n t .
The m o t i o n was accompanied by a n a f f i d a v i t o f a t t o r n e y Max
Hansen setting forth pertinent details and requesting
$129,866.34 f o r work p e r f o r m e d and s e r v i c e s r e n d e r e d p u r s u a n t
t o r e s p o n d e n t s 1 c o n t r a c t w i t h Howerys. C l i n t o n Howery f i l e d
a n a f f i d a v i t i n o p p o s i t i o n t o t h e motion f o r summary judgment
on F e b r u a r y 6 , 1984.
A h e a r i n g was h e l d May 4 , 1 9 8 4 , and a n o r d e r g r a n t i n g
r e s p o n d e n t s ' m o t i o n f o r summary judgment was i s s u e d May 1 6 ,
1.984. The trial judge awarded respondents $129,866.34,
s t a t i n g t h a t no a f f i r m a t i v e d e f e n s e t o Count I had been p l e d ,
and, t h a t :
"Count I i s b a s e d upon a w r i t t e n a g r e e m e n t between
t h e p a r t i e s , a Judgment r e n d e r e d by t h e D i s t r i c t
Court of t h e F i f t h J u d i c i a l District o f t h e S t a t e
o f Montana and a n a f f i r m a n c e by t h e Montana Supreme
C o u r t , a l l o f which a r e c l e a r , c e r t a i n and unambig-
uous. No e x t r i n s i c o r p a r 0 1 e v i d e n c e i s needed o r
a d m i s s i b l e t o e x p l a i n any o f t h e c l e a r t e r m s and
p r o v i s i o n s o f t h e w r i t t e n agreement. T h e r e a r e no
g e n u i n e i s s u e s a s t o any m a t e r i a l f a c t s , and i t i s
t h e duty o f t h i s Court t o apply t h e language o f t h e
agreement a s w r i t t e n . The amount d u e and owing
from d e f e n d a n t s t o p l a i n t i f f s i s f i x e d and i s n o t
ambiguous i n a n y way. . . ."
Count I1 o f r e s p o n d e n t ' s c o m p l a i n t and Howerys' counterclaim
a r e s t i l l pending.
Following a Rule 54 (b) , M.R.Civ.P., certification,
Howerys f i l e d t h i s a p p e a l , r a i s i n g t h e f o l l o w i n g i s s u e :
"Whether t h e D i s t r i c t C o u r t e r r e d i n g r a n t i n g t h e
p l a i n t i f f s ' motion f o r summary iudgment on Count I
o f t h e s e c o n d amended c o m p l a i n t and d e t e r m i n i n g
u n d e r Rule 56 ( c ) , M.R.Civ.P., that the plaintiffs
showed t h a t t h e r e was no g e n u i n e i s s u e a s t o any
m a t e r i a l f a c t and t h a t t h e y w e r e e n t i t l e d t o judg-
ment a s a m a t t e r o f law?"
A motion f o r summary judgment s h o u l d b e g r a n t e d " i f t h e
pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any,
show t h a t t h e r e i s no g e n u i n e i s s u e a s t o any m a t e r i a l f a c t
and that t h e moving party is entitled to a judgment as a
matter of law. l1 R u l e 56 ( c ) , M.R.Civ.P. W have f r e q u e n t l y
e
stated the rule:
" I t i s w e l l e s t a b l i s h e d t h a t a p a r t y moving f o r
summary judgment h a s t h e b u r d e n o f showing a com-
p l e t e absence o f any genuine i s s u e a s t o a l l f a c t s
deemed m a t e r i a l i n l i g h t o f t h e s u b s t a n t i v e p r i n c i -
p l e s t h a t e n t i t l e t h a t p a r t y t o a judgment a s a
m a t t e r o f law. (citations omitted). I' ..
Cereck
v , A l b e r t s o n ' s I n c . ( 1 9 8 1 ) , 1 9 5 Mont. 409, 411, 637
P.2d 5 0 9 , 5 1 1 .
We agree with the determination of the trial court that
r e s p o n d e n t s have m e t t h i s burden.
The c o n t r a c t b e t w e e n t h e p a r t i e s i s c l e a r a n d unambigu-
ous. I t m a n d a t e s t h a t r e s p o n d e n t s s h a l l receive 4 0 % of a n y
r e c o v e r y on a p p e a l . When a n a t t o r n e y e n t e r s i n t o a c o n t i n -
g e n t f e e a r r a n g e m e n t b a s e d on a p e r c e n t a g e o f t h e j u d g m e n t o r
award r e c o v e r e d b y t h e c l i e n t and t h e t o t a l amount r e c o v e r e d
includes interest, the attorney is entitled not only to a
percentage of the a c t u a l damages r e c o v e r e d , but also t o a
percentage of the pre-judgment and post-judgment interest
recovered. S e e I n r e Edgecornbe Road (N.Y.App.Div. 1 9 0 8 ) , 128
App.Div. 4 3 2 , 1 1 2 N.Y.S. 845, r e g a r d i n g pre-judgment interest
a n d M a t t e r o f I n n k e e p e r s o f New C a s t l e , I n c . (7th Cir. 1982),
671 F.2d 221, r e g a r d i n g post-judgment interest.
R e s p o n d e n t Max H a n s e n ' s a f f i d a v i t r e q u e s t i n g $ 1 2 9 , 8 6 6 . 3 4
is consistent with the contract between respondents and
Howerys a n d w i t h t h e l a w . The $ 1 2 9 , 8 6 6 . 3 4 r e p r e s e n t s 4 0 % of
t h e a c t u a l damages ( $ 2 4 3 , 4 7 5 x .40 = $ 9 7 , 3 9 0 ) a n d 4 0 % of t h e
pre-judgment interest ($42,958.33 x .40 = $17,183.33) or
$114,573.33, together with 37.79937% o f the post-judgment
interest ($40,458.38 x .3779937 = $ 1 5 , 2 9 3 . 0 1 ) . Respondents
w e r e p r o p e r l y awarded 37.79937% o f t h e post-judgment interest
b e c a u s e o n l y 3 7 . 7 9 9 3 7 % o f t h e money d e p o s i t e d i n t h e c e r t i f i -
cates of deposit was theirs ($114,573.33/$303,109.03 =
37.79937%).
The a m o u n t s p r e v i o u s l y r e q u e s t e d b y r e s p o n d e n t s r e s u l t e d
from improper calculations and not from a n ambiguous con-
tract, a s Howerys c o n t e n d . The i n i t i a l r e q u e s t w a s f o r 40%
of t h e e n t i r e a w a r d , c o s t s a n d i n t e r e s t . That request f a i l e d
t o c o n s i d e r t h a t r e s p o n d e n t s had a l r e a d y been d i r e c t l y p a i d
their actual costs, pursuant t o the contract. The amount
r e q u e s t e d i n t h e second amended c o m p l a i n t f a i l e d t o c o n s i d e r
that only 37.79973% o f the money in the certificates of
d e p o s i t belonged t o respondents. The c o n t r a c t i s c l e a r . The
r e s p o n d e n t s a r e e n t i t l e d t o $129,866.34.
N e x t , t h e Howerys a l l e g e t h a t t h e i r c o u n t e r c l a i m s h o u l d
a l s o be t r e a t e d a s an a f f i r m a t i v e defense t o t h e a l l e g a t i o n s
i n Count I o f respondents' c o m p l a i n t and t h a t t h e c o u n t e r -
c l a i m , when t r e a t e d a s an a f f i r m a t i v e d e f e n s e , r a i s e s i s s u e s
o f m a t e r i a l f a c t , t h u s f o r e c l o s i n g a summary judgment d e t e r -
mination. We a g r e e t h a t under o u r l i b e r a l pleading r u l e s ,
t h e counterclaim can b e t r e a t e d a s an a f f i r m a t i v e defense.
Rule 8 ( c ) , M.R.Civ.P. However, t h e counterclaim/affirmative
defense does n o t f o r e c l o s e a summary judgment d e t e r m i n a t i o n
on Count I .
The p r i m a r y allegations contained within the counter-
claim involve t h e breach of t h e f i d u c i a r y r e l a t i o n s h i p be-
tween t h e a t t o r n e y s and t h e i r c l i e n t s and t h e b r e a c h o f t h e
o b l i g a t i o n o f good f a i t h and f a i r d e a l i n g owed by t h e a t t o r -
neys t o t h e i r c l i e n t s . T h e s e a l l e g a t i o n s a r e s e p a r a t e and
d i s t i n c t from t h e p r e s e n t i s s u e , w h e t h e r t h e a t t o r n e y s ' fees
c o n t r a c t i s c l e a r and unambiguous.
Finally, we w i l l n o t c o n s i d e r Howerys' contention t h a t
t h e c o n t r a c t d o e s n o t r e f l e c t t h e t e r m s m u t u a l l y a g r e e d upon
by t h e p a r t i e s a s t h a t a l l e g a t i o n d e p e n d s e n t i r e l y o n e v i -
dence e x t r i n s i c t o t h e c o n t r a c t .
" 'The p r i n c i p l e i s w e l l - e s t a b l i s h e d and o f g e n e r a l
application, subject t o certain exceptions, t h a t
when a c o n t r a c t - - r e d u c e d t o w r i t i n g t h e
h a s been
c o n t e n - - h w r i t i n g c a n n o t b e a d d e d t o , con-
t s o f
t r a d i c t e d , a l t e r e d , o r v a r i e d byyrol o r extrinsic
e v i d e n c e , and t h a t s u c h w r i t i n g s u p e r s e d e s a l l o r a l
n e g o t i a t i o n s c o n c e r n i n g i t s m a t t e r which p r e c e d e d ,
accompanied, o r l e d up t o i t s e x e c u t i o n . T h i s was
t h e