No. 84-434
I N THE SUPREME COURT O F THE S T A T E O F MONTANA
1985
AAR CONSTRUCTION, INC.,
P l a i n t i f f and A p p e l l a n t ,
FERGUS E L E C T R I C C O O P E R A T I V E ,
INC., e t al.,
D e f e n d a n t s and Pasponderits.
A P P E A L FROM: D i s t r i c t C o u r t of t h e T 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 F e r g u s ,
T h e H o n o r a b l e P e t e r L . R a p k o c h , Judge p r e s i d i n g .
COUNSEL O F RECORD:
For A p p e l l a n t :
Glary & C l a r y , G r e a t Falls, Nontana
For R e s p o n d e n t s :
K e n T o l l i v e r ; Wright, T o l l i v e r & G u t h a l s , Billings,
Montana
S u b m i t t e d on B r i e f s : D e c . 27, 1 9 8 4
Decided: F e b r u a r y 15, 1 9 8 5
Clerk
Mr. Justice John C. Sheehy delivered the Opinion of the
Court.
AAR Construction, Inc., appeals from an order of the
District Court, Tenth Judicial District, Fergus County, dated
August 31, 1984, allowing C. E. Rookhuizen a set-off of
$5,823.83 against a judgment theretofore granted by the
District Court in favor of AAR Construction, Inc. and aga.inst
C. E. Rookhuizen.
AAR also appeals from the order of the District Court
of the same date allowinq AAR the sum of $1,000 additional
attorney fees.
AAR's appeal raises two issues:
1. Did the District Court have jurisdiction to grant a
set-off against the judgment in this case?
2. Did. the District Court abuse its discretion by
awarding AAF attorney fees of only $1,000?
On consideration of the issues, we affirm the District
Court.
C. E. Rookhuizen of Billings, Montana, was the general
contractor for the construction of the Fergus Electric Co-
operative office and warehouse in Lewistown, Montana. AAR
Construction, Inc., was a subcontractor to Rookhuizen on the
job. A dispute arose between the general contractor and the
subcontractor as to sums claimed by the subcontractor for the
original contract and extras performed by the subcontractor,
a n d for credits claimed by the general contractor for work
allegedly done by the general contractor that should have
been done by the subcontractor. The parties were unable to
resolve their differences and the case was tried and judgment
entered. on September 8, 1983, which resul.ted in C. E.
Rookhuizen being obligated to pay AAR a judgment of $13,319.
During the course of construction, the subcontractor,
AAR, failed to make payments to unions for fringe benefits
due its workers and also failed to make payments to the
Internal Revenue Service of withhol-dings from the workers.
The failure to make th.e union payments resulted in both AAR
Construction and. Rookhuizen being sued by Audit Services,
Inc., for the collection of those unpaid fringe benefit
costs. The Internal Revenue Service served notice of levy
upon AAR, Rookhuizen, and their counsel for claimed unpaid
tax payments owe6 by AAR. The notice of levy was served
prior to any judgment being entered either in this case or
the case brought by Audit Services, Inc., to recover the sums
due under the union agreements.
Regarding the union fringe benefit payments, AAR was
primarily liable for the payments hecause they applied to
AAR.'s workers, but Rookhuizen was secondarily liable if AAR
did not pay by virtue of 5 39-3-706, MCA. In the cause
brought by AAR against Rookhuizen the parties entered into a
stipulation signed by their counsel and set forth in the
pretrial order in that cause which. recited:
"It is stipulated between the parties
that AAR Construction, Inc., has not made
payments to the Intermountain
Ironworkers' Trust, Intermountain
Ironworkers' Pension Trust, and the
Intermountain Ironworkers' Training
Trust. By reason of AAR's failure to
make payments, a claim has been advanced
by Audit Services, Inc. , the assignee of
the Trust, against C. E. Rookhuizen in
the amount $5,047.25. Jt is further
stipulated that any sums actually paid by
C. E. Rookhuizen by reason of the claim
of the aqorementioned trusts as set forth
Cause No. DV-82-775 [the number of the
case in the Yellowstone County District
Court] or in settlement thereof, in full
or in part, shall be credited against any
judgment in this case by AAR
Construction, Inc., against C. E.
Rookhuizen. ''
In this case, the District Court i.n Ferqus County made
findings of fact and conclusions of law on September 8, 1983.
In finding of fact no. 21, the district judge referred to the
failure of AAR to make the payments to the union trust. funds
and that the fact of nonpayment was agreed upon by both of
the parties. The court in conclusion of law no. 11
determined that Rookhuizen was not entitled to reimbursement
at that time because of lack of evidence of AAR's liability
therefor and Rookhuizen's liabil-ity therefor. On September
8, 1983, the court also entered judgment in the matter, in
favor of AAR and against Rookhuizen in the net amount of
$13,31.9.22, the court having all.owed set-offs to Rookhuizen
for certain sums under the contract.
Audit Services, Inc., obtained a judgment in the
Yellowstone County District Court case against Rookhuizen on
April 19, 1984, as a result of which Rookhuizen eventua3.ly
made payment to Audit Services for a total of $5,823.83. On
such payment Audit Services' judgment against Rookhuizen and
AaR was satisfied in the Yellowstone County District Court.
In the meantime, Rookhuizen ha6 appealed the judgment
against him in favor of AAR entered in the Fergus County
District Court to the Montana Supreme Court. He did nothing
further to perfect his appeal and, after failing to meet
deadlines given b y this Court to proceed with appeal, in May
of 1984 he advised the Montana Supreme Court that he did not
wish to proceed with the appeal and the appeal. was dismissed
with prejudice. Rookhuizen thereafter attempted to bring an
interpleader action in the Yellowstone County District Court
t o d e t e r m i n e which o f v a r i o u s c r e d i t o r s of M R w e r e e n t i t l e d
t o f u n d s h e l d by C . E . Rookhuizen. Apparently t h a t a c t i o n
aborted.
With t h e d i s m i s s a l o f t h e a p p e a l t o t h e Montana Supreme
Court, t h e judgment a g a i n s t Rookhuizen i n t h e F e r g u s County
D i s t r i c t C o u r t had become final. Nonethel.ess, on J u n e 1 4 ,
,984, Rookhuizen filed a verified motion for an ord-er
granting set-off of t h e amount p a i d by Rookhuizen t o A u d i t
S e r v i c e s a g a i n s t t h e judgment i n fa.vor o f AAR.
The D i s t r i c t C o u r t he1.d a t e l e p h o n e c o n f e r e n c e on t h e
m o t i o n on J u n e 28, 1984. The m i n u t e s o f t h e c o u r t r e f l e c t
t h a t t h e t e l e p h o n e c o n f e r e n c e was h e l d on t h a t d a t e a n d t h a t
t h e m o t i o n was d e n i e d . On J u l y 1 3 , 1984, Rookhuizen f i l e d a
v e r i f i e d motion f o r r e c o n s i d e r a t i o n of i t s m o t i o n f o r set-
off. The D i s t r i c t C o u r t o r d e r e d a h e a r i n g on t h e m o t i o n f o r
r e c o n s i d e r a - t i o n on J u l y 30, 1984, a n d on A u g u s t 31, 1 9 8 4 , t h e
court signed its order, f i l e d September 4, 1984, granting
Rookhuizen s e t - o f f a g a i n s t t h e AAR judgment. The c o u r t a l s o
o r d e r e d t h e payment o f $1,000 i n a t t o r n e y f e e s by Rookhuizen
t o AAR.
I n ma.king i t s o r d e r o f August 31, 1984, t h e D i s t r i c t
Court said:
"The p a r t i e s had s t i p u l a t e d b e f o r e t r i a l
t h a t a n y sums p a i d by D e f e n d a n t n the
Union T r u s t a c c o u n t would b e c r e d i t e d
a g a i n s t a judgment by P l a i n t i f f a g a i n s t
Defendant. That s t i p u l a t i o n i s not
e x p r e s s ] - y l i m i t e d t o , n o r d o e s i t re-
quire, payments made b e f o r e judgment
h e r e i n , o f which t h e r e w e r e n o n e , and
t h e r e a p p e a r s t o b e no compel-ling r e a s o n
for so interpreting that Stjpulation.
The P l a i n t i f f w i l l s u f f e r no d e t r i m e n t by
not doing so.
"The p l a i n f a c t o f t h i s case is t h a t the
P l a i n t i f f has received the f u l l benefit
o f D e f e n d a n t ' s payment t o Audit Services:
it g o t o n e o f i t s d e b t s paid, a debt f o r
the payment of which the creditor has
security, a lien on this Court's judg-
ment. That the debt to Audit Services
may not have b.ad priority as against the
IRS is not AAR's problem. That debt got
paid and the Plaintiff is not entitled to
double payment of that sum.
"The Defendant's motion is in the nature
of a Motion for the court to declare that
the judgment herein has been partially
satisfied by its payment to Audit
Services. Upon reconsicieration of its
previous Order, the Court agrees; the
judgment has been partially so satisfied.
"This was not a Rule 60 motion; there was
no mistake, no error, in the judgment to
be corrected. This Motion stand-s on the
judgment as it is, as does this Order.
The time constraints in Rules 59 and 60
d o not apply. This court therefore has
.
jurisdiction to act herein by declaring
that the judgment has been partiall-y
satisfied by a-nd in the amount of Defen-
dant's payment of $5,823.82."
The written stipul-ation of AAR, through its counsel, is
binding upon AAR. An attorney has authority to hind his
client in any steps of an action or proceeding by his agree-
ment filed with the clerk or entered upon the minutes of the
court. Section 37-61-401(a), MCA. ~lthoughan attorney does
not have authority to compromise a controversy of his client,
Harris v. Root (1903), 28 Mont. 159, 72 P. 429, the stipula-
tion here did not involve a compromise. The full amount of
AAR's responsi.bi1i.t~ the union trust funds was determined
to
by the District Court. Rookhuizen ' s liabil ity in that
judgment was because of his secondary position with respect
to the union fringe benefit payments. Rookhuizen has a right
of indemnity for any payments made by him to satisfy the
judgment which was primarily the responsibility of AAR.
Section 28-11-301, MCA; Miller v. Melaney (1977), 172 Mont.
Eexe, AAR had stipulated that any judgment it recovered
against Rookhuizen would be credited to the extent that
Rookhuizen paid Audit Services, Inc. After the judgment had
become final, the only form the credit could take was that
adopted by the District Court, a partial satisfaction of the
judgment AAR held against Rookhuizen. When a judgment is
partially satisfied in fact, or when, by agreement of the
parties a judgment debtor is entitled to a credit against a
judgm.ent, it is proper to apply the following provision of
25-9-311, MCA:
". . . Whenever a judgment is satisfied
in fact otherwise than upon an execution,
the party or attorney must give such
acknowledgement or make such endorsement,
and upon motion, the court may compel it
or may order the entry of satisfaction to
be made without it."
The order of the District Court shows that the District
Court merely held AAR to the stipulation entered into on its
behalf through its counse3. and. the method employed by the
District Court in ordering a partial satisfactj-on of the
iudgment held by AAR agei-nst Rookhuizen was proper. See,
Ga.lbreath v. Armstrong (1948), 121 Mont. 387, 193 ~ . 2 d630.
The District Court was correct in stating that neither
Rules 59 nor 60, M.R.Civ.P. apply to the proceedings in this
case with respect to the satisfaction of a judgment.
But kAR also complains that the motion for
reconsideration was filed too late by Rookhuizen an6 there-
fore the District Court lost jurisdiction to enter the order
granting partial satisfaction of the -judgment.
In this case the District Court denied the motion for
set-off on June 28, 1984. On July 13, Rookhuizen filed his
verified motion for reconsideration. Thu.s fifteen days
elapsed between the date that the court denied the first
motion and Rookhuj~en filed his motion for reconsideration.
Whether we regard the motion to reconsider in this case a
motion to amend the court's judgment under Rule 52(b),
M.R.Civ.P., a motion for new trial under Rule 59(b),
M.R.Civ.P. or a motion for relief under Rule 60, M.R.Civ.P.
each rule requires that the motion be made within ten days
from the notice of entry of judgment. Under Rule 77(d),
M.P,.Civ.P., it is the duty of the clerk of the district
court, immediately upon the entry of an order or judgment, to
give notice of the entry by mail in the manner provided for
in Rule 5, M.R.Civ.P., upon each party who is not in defa-ult
for failure to appear. In this case no notice of entry of
the order by mail was served upon the parties. Therefore,
the time for filing the motion for reconsideration by
Rookhuizen had not commenced to run, and his motion for
reconsideration was timely under the rules. To the same
effect, see Matter of Estate of Holmes (1979), 183 Mont. 290,
295, 599 P.2d 344, 347. (Note: The time limits for such
motions have been amended since the appeal in this case. We
apply the rules here as they existed at the time tha.t the
District Court acted.)
The next principal issue raised by AAR is that the
District Court erred in only awarding $1,000 in attorney fees
for the post-judgment work done by AAR's attorneys.
The affidavit of AAR's attorney for additional fees
indicated he had spent more than seventy-five houra since the
entry of judgment and that his normal bil I ing rate was $75
per hour. He also alleged he had incurred various additional
expenses of $400. Be requested additional attorney fees of
$5,000 and expenses of $400 with interest at the rate of
$2.80 per day from the date of the levy of writ of execution
against the Fergus Ccunty Elect-ric Co-op.
The District Court found that a significant portion of
the services provided by AAR's counsel appeared to have been
in settlement negotiations, and other services were spent in
trying to effect the collection of AAR's judgment. The
District Court recognized that a considerable amount of
unnecessary work was required by Rookhuizen's uncertainty in
whet.her or not to appeal and to follow the rules of procedure
closely. Accordingly, the court awarded $I-, 000 in attorney
fees as a reasonable amount and $400 for expenses.
The amount fixed 2s attorney fees by a court is largely
discretionary and we will not disturb its iudament in the
absence of an abuse of its djscretion. Carkeek v. Ayer
(Mont. 1980), 613 P.2d 1013, 1015, 37 St.Rep. 1274, 1276. In
determining whether the trial court abused its discretion, we
look to the record to determine if the trial court, in the
exercise of its discretion, acted arbitrarily without the
employment of conscientious judgment or by exceeding the
bounds of reason, in view of all the circumstances, ignoring
recognized principles resulting in subst~ntial injustice.
Porter v. Porter (1970), 155 Mont. 451, 457, 473 P.2d 538,
541.
It appears here that the District Court considered the
amount and character of the services rendered, the labor,
time and trouble in~~olved,
the character and importance of
the litigation, the professional skill and experience called
for, and the other circumstances set forth by us in First
Security Bank of Rozeman v. Tholkes (19761, 169 Mont. 422,
429, 430, 547 P.2d 1328, 1332. We find no abuse of the
court's discretion in the award of attorney fees in this
case.
Affirmed.
We Concur: