Schillinger v. Brewer

No. 84-409 I N THE SUPREME COURT OF THE STATE O F MONTANA 1985 LEON S C H I L L I N G E R and AGRI-STRUCTURES, INC. , P l a i n t i f f s and A p p e l l a n t s , -vs- KEVIN BREWER, D e f e n d a n t and R e s p o n d e n t . APPEAL FROM: D i s t r i c t C o u r t of t h e S i x t e e n 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 R o s e b u d , The H o n o r a b l e A l f r e d B. C o a t e , Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellants: C a t e Law F i r m , B i l l i n g s , Montana F o r Respondent: Brown & Huss, M i l e s C i t y , Montana S u b m i t t e d on B r i e f s : Jan. 24, 1 9 8 5 Decided: April 2, Filed: Mr. Chief Justice J. A. Turnage delivered the Opinion of the Court. Plaintiff appeals from judgment for plaintiff on a foreclosure of a mechanic's lien entered by the District Court of the Sixteenth Judicial District, Rosebud County. After a rejected offer of settlement, the judge following trial found for plaintiff with an offset for defendant that resuced the judgment below the amount of the offer. The court granted attorney fees as costs to defendant after the date of the offer, as stipulated to by counsel, and reduced the award further. Plaintiff represented by substitute counsel moved to alter or amend or to set aside the judgment. At hearing, the court denied plaintiff's motion and assessed further attorney fees as costs to the plaintiff. We reverse the award of attorney fees to defendant and remand for appropriate proceedings. We hold that respondent was entitled by law only to costs and not attorney fees after the March 8, 1983, rejected offer of settlement, pursuant to Rule 68, J I . . i . . !IFCvP Appellant, in prevailing in establishing his lien, is entitled to costs up to t,he date of the March 8, 1983, rejected offer and to a reasonable attorney fee for t.he entire action in the District and Supreme Courts, pursuant to § 71-3-124, MCA. On remand the court is to consider evidence on the reasonableness of attorney fees and to assess 1-egal interest based upon the initial unadjusted award. Appellant has raised the following issues on appeal: (1) Does Rule 68, M.R.Civ.P., which allows costs to offeror after date of a rejected offer if final judgment is less than offer, include attorney fees as costs in a foreclo- sure of a mechanic's lien? (2) Is the appel-lant bound by stipulation of his c o u n s e l where t h e r e i s an e r r o r t i m e l y b r o u g h t t o t h e a t t e n - t i o n of t h e c o u r t ? Leon Schillinger and Agri-Structures, Tnc., entered i n t o a c o n t r a c t w i t h Kevin Brewer f o r t h e s a l e and c o n s t r u c - t i o n of t h r e e m e t a l g r a i n b i n s . Brewer made a down payment of $2,600 on a $17,400 p u r c h a s e p r i c e . The c o n t r a c t c a l l e d for c o m p l e t i o n by August 1, 1982. Although n o t complete u n t i l August 1 5 , 1982, p a r t i e s o r a l l y a g r e e d t o proceed. on the contract. B r e w e r t h e n r e f u s e d t o pay t h e b a l a n c e of t h e p u r c h a s e p r i c e , c l a i m i n g t h a t p l a i n t i f f s had n o t p l a c e d "two strains of rebar" in the concrete foundation as agreed. P I - a i n t i f f s added r e b a r t o a c o n c r e t e c o l l a r around t h e b i n s . Brewer c o n t i n u e d t o r e f u s e t o pay. P l a i n t i f f s f i l e d a mechanic's l i e n on t h e t h r e e g r a i n b i n s on October 26, 1982, and sued t o f o r e c l o s e on J a n u a r y 11, 1983. On March 8 , 1983, p u r s u a n t t o Rule 68, M.R.Civ.P., d e f e n d a n t o f f e r e d t o a l l o w judgment t o h e t a k e n a g a i n s t him in the amount of $12,250, together with costs accrued to p l a i n t i f f s t-o t h e d a t e of t h e o f f e r . Plaintiffs rejected the o f f e r and proceeded t o t r i a l . The c o u r t i n i t s 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 of Law on J u n e 7 , 1984, s t a t e d t h a t t h e c o n s t r u c t i o n and r e p a i r s were n o t done i n a workman-like manner and t h a t r e p a i r o f t h e b i n s t o s u i t t h e i r purpose would c o s t $7,200. Thus d e f e n d a n t owed $1-4,800 on t h e o r i g i n a l p u r c h a s e p r i c e l e s s $7,200 f o r t h e c o s t of r e p a i r s f o r a b a l a n c e of $7,600 p l u s i n t e r e s t , allowable c o s t s , and a t t o r n e y f e e s t o p l a i n t i f f a s t h e p r e - vailing party in a lien foreclosure. The court reserved d e c i s i o n on t h e f i n a l award b e c a u s e " p u r s u a n t t o Rule 68, t h e d e f e n d a n t may n o t be l i a b l e f o r c o s t s . " Counsel for both parties stipulated. on June 27, 1.984, at the entry of judgment to costs and attorney fees, allowing defense counsel fees as costs after the date of the rejected offer. Contending that plaintiff was bound by the act of his counsel when entered on record, respondent later claimed that the stipulation of June 27, 1984, and the judgment entered on the stipulation correctly included attorney fees as costs in a mechanic's lien foreclosure. In fact, the stj-pulation mentions only the adjusted amount but apparently incorporates the defendant's bill of costs. The entire text follows: "COME NOW, ... , as attorney for the above named Plaintiffs, a.nd ... as attorney for the above named Defendant, and stipulate and agree that Judgment can be entered for the Plaintiff against the Defendant in the amount of $5,776.69." Upon receiving service of notice of entry of judgment, piaintiff sought new counsel who filed a timely motion to alter or amend the judgment or to grant relief from the judgment because of the m.istake allowing attorney fees to defendant and denying fees to plaintiff after the date of the Rule 68 offer. Following hearing, the court denied the motion and issued its order concluding that attorney fees are included in costs in the foreclosure of mechanic's liens and granting the defendant additional attorney fees. Issue - - No. 1. Attorney - -as "costs"? fees Respondent contends that costs include attorney fees in lien forecl-osure actions. In reading the lien foreclosure statute, however, we find no language to subsume fees under costs. "Filing costs and attorneys' - -to be fees - recovered on foreclosure of liens. In an action to foreclose anTof d the liens provided for by parts 3, 4, 5, 6, 8, or 10 of this chapter, the court must allow as costs the money paid for filing and recording the lien - a reasonable and attorney's fee in the district and supreme courts, and such costs - and attorneys' fees must be allowed to each claimant whose lien is established, and such reasonable attorneys' fees must be allowed to the defendant against whose property a lien is claimed if such lien be not established." Section 71-3-124, MCA. (Emphasis added. ) The statute distinguishes between fees and costs. Defendant is entitled to fees only if the lien is not established, i.e., only if defendant prevails. Here, appellant prevailed and is entitled to attorney fees for the entire action. The language of the lien foreclosure statute refutes respondent's argument that fees are costs under Rule 68, M.R.Civ.P., which only mentions "costs": "Offer of judgment. ...An offer not accepted-shall be deemed withdrawn and evidence thereof is not admissible except in a proceeding to determine costs. If the judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after the making of the offer. . . ." Rule 68, M.R.Civ.P. In an endeavor to make an exception to the general rule, respondent notes that attorney fees may or may not be includ- ed in the bill of costs. "Inclusion of attorney's - -in bill of fees - - costs. ~ h e a t t o r n e ~ lfees mentioned in s 30-9-511, 71.-1-233, 71-3-124, a.nd 25-10-303 need not be included in the cost bill if they are made a part of the judgment. " Section 25-10-302, MCA. The bill of costs, however, includes more than costs, and does not render fees synonymous with costs. "Eill of costs. - - The party in whose favor judgment is rendered and who claims his costs must deliver to the clerk and serve upon the adverse party . .. a memorandum of the items of his costs - necessary disbursements in the and action or proceeding .. .' I Section 25-10-501, MCA. (Emphasis added.) Neither statute says that fees are costs, only that fees may he excluded from the bill of costs if made a part of the judgment in specified actions where fees are allowed. By statute costs generally allowable do not include attorney fees. "Costs generally allowable. A party to whom costs are awarded. in an action is entitled to include in his bill of costs his necessary disbursements, as follows: " (1) the legal fees of witnesses, in- cluding mileage, or referees and other officers; "(2) the expenses of taking depositions; "(3) the legal fees for publication when publication is directed; " 1 4 ) the legal fees paid for filing and recording papers and. certified copies thereof necessarily used in the action or on the trial; " (5) the legal fees paid stenographers for per d-iem or for copies; " (6) the reasonable expenses of printing papers for a hearing when required by a rule of court; "(7) the reasonable expenses of making transcript for the supreme court; " (8) the reasonable expenses for making a map or maps if required and necessary to be used on trial. or hearing; and "(9) such other reasonable and necessary expenses as are taxable according to the course and practice of the court or by express provision of law." Section 25-10-201, MCA. "With certain limited exceptions, we have held the list to be exclusive. Attorney fees are not one of the exceptions." Cook v. Harrington (Mont. 1983), 661 P.2d 1287, 1288, 40 We ha.ve indicated that certain cases, however, will be taken out of the operation of this statute by special statute, by stipulation of the parties, or by rule of court. Masonovich v. School District & Teachers Local 332 !1978), 178 Mont. 138, 140, 582 P.2d 1234, 1235. Here the statutes relied upon do not equate attorney fees with costs by any express provision. We hold the court in error to rule that attorney fees are costs in mechanic's lien foreclosure actions. Issue - - 2: No. Stipulation - counsel adequate - - of to make attorney -- costs? fees into Respondent claims that parties are bound by the stipulation of counsel once entered upon the record, relying on S 37-61-401, MCA: "Authority of attorney. (1) An attorney and counselor has authority to: "(a) bind his client in any steps of an action or proceeding by his agreement filed with the clerk or entered upon the minutes of the court and not otherwise ... I1 Respondent cites case law where parties negotiated and signed a stipulation as compromise of a settlement and then later applied for their day in an adversary administrative proceed- ing. Smith v. Baxter (1966), 148 Mont. 291, 419 ~ . 2 d752. There parties were bound., because the stipulation once en- tered became a final judgment on the merits with prejudice and barred the action in another forum. Section 37-61-401, MCA, was drafted not to bind clients irrevoca.bly to any action the attorney enters upon the record. Rather, this statute found in the chapter regulating the practice of attorneys enables an attorney to act on behalf of his client and to make his actions part of the record. His act.ion binds the client at tha.t step of the proceeding. In this case it does not prevent the attorney from resorting to any other actions or remedies allowed at law. Followj-ng the notice of entry of judgment by stipula- tion, appellant made a timely motion for relief from judgment under F.ule 60 (b), P.'I.R.Civ.P., or alternatively, to alter or amend the judgment under Rule 59(g), M.R.Civ.P. A judgment by stipul.ation is as binding as any judgment or verdict, no more or less. Appellant argues that if nothing else, it was a mistake of counsel to enter into a stipulation which was erroneousl-y against the interest of his client without the consent of the client, and for this mistake he should be excused from the judgment und.er Rule 60 (b)(1) , M.R.Civ.P. Respondent argues that a mistake of law is not a "mistake" of excusable neglect or inadvertence under Rule 60(b) and therefore prevents relief from judgment. Uffleman v. Tabbitt (1968), 152 Mont. 238, 244, 448 P.2d 690, 693; Schmidt v. Jomac, Inc. (Mont. 1982), 639 P.2d 517, 519, 39 St.Rep. 130, 132. This "mistake of law," however, is attributable not only to appellant's attorney, but also to respondent's attor- ney and to the trial court. This "mistake" is an error inherent in the proceedings. Appellant's first attorney admitted at the hearing on the motion for relief from or amendment of judgment that he still held the opinion that costs included attorney fees in a mechanic's lien action. The court in its order following the hearing on the motion erroneously concluded that attorney fees were costs in a mechanic's lien foreclosure. Based on that error and not upon the stipulation of the attorneys, the court denied the motion to set aside or to alter or amend the award of attor- ney fees. We h o l d t h e 1-ower c o u r t i n e r r o r for its failure t o a l t e r o r amend t h e judgment upon a t i m e l y a p p l i c a t i o n where t h e judgment was c l e a r l y e r r o n e o u s . The c o u r t was r e s p o n s i - b l e f o r a correct appl-ication of t h e 1-aw i n a c c e p t i n g t h e s t i p u l a t i o n and l a t e r i n r u l i n g on w h e t h e r t o a l t e r o r amend t h e judgment t h e r e b y e n t e r e d . I n e r r o r , t h e c o u r t concl-uded t h a t c o s t s i n c l u d e d a t t o r n e y f e e s i n a. l i e n f o r e c l o s u r e and s o s t a t e d i n i t s f i n a l ord.er. R e v e r s e d and remanded. W e concur: n