No. 86-155
IN THE SIJPREME COURT OF THE STATE OF MONTANA
1986
KENNETH REINTSMA, RONALD HAVERLANDT,
et al.,
Plaintiffs and Respondents,
ALBERT LAWSON and DANA YATSKO,
Defendants and Appellants.
APPEAL FROM: District Court of the Eighth Judicila District,
In and for the County of Cascade,
The Honorable John McCarvel, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Cotter & Cotter; Patricia O'Rrien Cotter, Great Falls,
Montana
For Respondent:
Jardine, Stephenson, Rlewett. & Weaver; K Dale Schwanke,
Great Falls, Montana
Submitted on Briefs: July 31, 1986
Decided: October 30, 1986
Mr. Justice John Conway Harrison delivered the Opinion of the
Court.
This is an appeal from a judgment of the District Court
of the Eighth Judicial District in and for the County of
Cascade, Montana, granting plaintiffs injunctive relief and
compensatory and punitive damages. We affirm in part,
reverse in part and remand.
The plaintiffs and defendant Albert Lawson are all
property owners in the Cooper Valley Estate subdivision
located in Cascade County. This subdivision is a residential
development, apparently comprised only of multi-acre lots
designed to afford a convenient, rustic environment in which
to live. To this end, each lot is subject to a number of
restrictive covenants designed to maintain, as much as
possible, the area's pristine state. The covenants expressly
prohibit comprehensive logging operations.
In June, 1984, Lawson sought and obtained a consent
certificate from the Cooper Valley Owners Association
allowing him to remove from his property diseased and
over-aged timber.
Plaintiffs, however, ultimately concluded that Lawson
was removing far more than simply diseased and over-mature
timber and so eventually filed this action in District Court.
They sought as relief a permanent injunction enjoining
defendant from conducting further logging operations within
the development, compensatory damages for the diminution in
value of their property, punitive damages and costs.
Lawson counterclaimed, alleging generally that in
pursuing this litigation, plaintiffs were converting for
their own use the assets of Cooper Valley Estates,
Incorporated, a corporation mostly comprised of the
subdivision's property owners. Lawson also claimed that
plaintiffs' suit was frivolous and sought punitive damages.
The District Court held a bench trial in March, 1985.
Though the record is incomplete, plaintiffs evidently
withdrew their prayer for compensatory damages at the
conclusion of trial.
On November 7, 1985, the court entered its findings of
fact and conclusions of law. Therein, the court found that
Lawson's activities went beyond the scope of the consent
certificate and had violated the restrictive covenants. The
court concluded that Lawson was permanently enjoined from
conducting any further logging operations within the
development. The court further found that Lawson was
responsible for rehabilitating his property, the cost of
which was at a minimum $30,000, and that the counterclaims
brought by Lawson were without merit. Finally, the court
directed that the plaintiffs should recover an award of costs
and attorney's fees and instructed plaintiffs to submit an
affidavit detailing these fees.
Believing the court's entry of its findings and
conclusions constituted entry of judgment, Lawson filed, on
November 21, a motion to amend the court's findings or for a
new trial. In support of his motion, Lawson filed his own
affidavit which indicated that between the time the trial was
held in March and the time the court entered its findings and
conclusions in November, he had spent over $43,000 on the
rehabilitation of his own property.
Before any action was taken on this motion, however,
the court issued on November 27, 1985, a "Judgment Entered
Pursuant to Court's Findings of Fact and Conclusions of Law
of November 7, 1985.'' Here, the court, in addition to
awarding plaintiffs' injunctive relief, awarded plaintiffs
$30,000 in compensatory damages and stated that a hearing
would be held to determine any rights to attorney's fees.
Both parties filed motions to amend this judgment. On
December 6, 1985, plaintiffs filed a memorandum in opposition
to Lawson's motion to amend or for a new trial which he had
earlier filed on November 21. Plaintiffs further filed their
own motion to amend the court's findings, requesting both
that the court award plaintiffs punitive damages and that it
award plaintiffs attorney's fees and costs. Plaintiffs
additionally filed a motion to strike Lawson's affidavit
filed November 21 and, finally, filed affidavits detailing
their attorney's fees and costs.
On December 9, Lawson filed a supplementary motion for
new trial.
On December 13, 1985, the District Court held a hearing
on the various motions and pleadings filed by the parties.
Six days later it issued its order. The court, reiterating
its earlier finding that Lawson's counterclaims were without
merit, held that plaintiffs were entitled to punitive damages
and awarded such damages "by way of compensating the
plaintiffs for their attorney's fees and costs incurred in
the proceedings." The court, however, awarded only one-half
of plaintiffs' requested $25,000 attorney's fees, so that the
punitive damage award was limited to $12,500, plus
plaintiffs' costs.
Finally, on January 6, 1986, the District Court entered
its "Final Judgment." In this judgment, the court first
restated that Lawson was enjoined from any further logging
operations within the Cooper Valley Estates subdivision. The
court then awarded plaintiffs' damages totalling over
$46,000: $30,000 in compensatory damages; $12,500
attorney's fees; and $4,190.49 in costs.
Lawson now appeals the court's entry of its November 27
judgment and its award of compensatory and punitive damages;
he does not appeal the adequacy of the court's findings of
fact and conclusions of law entered November 7.
Plaintiffs cross-appeal the court's award of only
one-half of the attorney's fees sought.
I
Appellant first argues that the District Court abused.
its discretion by substituting its initial November 7
judgment with its subsequent, altered judgment of November
27. This argument is of course based upon the premise that
entry of the November 7 findings and conclusions constituted
entry of a judgment. We disagree.
As noted, in its November 7 findings and conclusions,
the court found that Lawson was responsible for the
rehabilitation of his property, the cost of which was at
least $30,000. The court further concluded as a matter of
law that Lawson was permanently enjoined from conducting any
further logging within the area. The findings and
conclusions ended with the sentence, "Let judgment be entered
accordingly." On November 8, the clerk of court entered in
the judgment docket the court's findings and conclusions.
Then on November 27, the court issued its judgment
entered pursuant to its findings and conclusions. There, the
court, in addition to enjoining defendant 's further logging
operations, awarded plaintiffs $30,000 compensatory damages.
Appellant contends that because the November 7 findings and
conclusions were properly entered by the clerk, a proper
judgment had been entered and the District Court was
thereafter powerless to enter its November 27 judgment which
materially altered its November 7 judgment. Appellant
asserts he suffered prejudice because the District Court did
not award plaintiffs compensatory damages under its first
judgment, but did under its second. This, appellant
concludes, constituted abuse of discretion where the
plaintiffs had not filed any motion to amend the November 7
judgment.
Appellant's argument fails from the outset. This Court
has long held that findings of fact and conclusions of law do
not constitute the judgment, but merely form the basis upon
which the judgments are subsequently to be rendered.
Woodward v. Perkins (1946), 119 Mont. 11, 15, 171 P.2d 997,
998; Conway v. Fabian (1939), 108 Mont. 287, 303, 89 P.2d
1022, 1028; Galiger v. McNulty (1927), 80 Mont. 339, 351, 260
P. 401, 403.
In Woodward, supra, the District Court, as in our case,
filed its findings of fact and conclusions of law prior to
its entry of formal judgment. Appellant later appealed,
inter alia, from a "decision" of the District Court, "set
forth in [its] Findings of Fact, and Conclusions of Law
. . ." In dismissing that portion of the appeal, this Court
stated that the decision of the District Court based upon its
findings and conclusions did not constitute a judgment and
therefore was not appealable. Woodward, 171 P.2d at 998.
Accord, Turnbull v. Brown (1953), 126 Mont. 548, 254 P.2d
1085, (Adair, C.J., specially concurring).
Likewise, entry in our case of the court's findings and
conclusions did not constitute a judgment, notwithstanding
the statement that judgment be entered.
I1
Appellant's second argument is that the District Court
abused its discretion by awarding plaintiffs compensatory
damages. Appellant specifically asserts that the court erred
by awarding compensatory damages when plaint.iffs themselves
dropped their prayer for such an award.
We agree. We cannot affirm an award of compensatory
damages where plaintiffs themselves dropped their demand for
such an award. Appellant failed to provide us with a
transcript of the proceedings below so that we are unable to
determine whether this award is supported by sufficient,
credible evidence. Typically, such a failure would work
against appellant. Here, however, plaintiffs conceded in a
post-trial motion that they were unable to provide sufficient
evidence to justify a compensatory damage award:
Counsel for the plaintiffs spent sometime
trying to develop this issue prior to
trial and finally determined that it was
not worthwhile because appropriate proof
could not be submitted.
We therefore find the District Court erred in awarding
plaintiffs compensatory damages and vacate this award.
I11
Next, appellant contests the District Court's award of
punitive damages. In its December 19 "Award of Attorney
Fees," the court awarded plaintiffs punitive damages by way
of compensating plaintiffs for one-half their attorney's fees
plus costs.
Without intending to express any opinion on the
propriety of a punitive damage award in general, we are not
persuaded that an award of attorney's fees and costs, entered
under the guise of punitive damages, is appropriate in this
case. We recognize, however, that under the circumstances of
this case, a punitive damage award may be proper. We
therefore vacate this award, but remand this issue to the
District Court for its determination of whether a proper
punitive damage award is warranted.
Finally, we note that the District Court stated in its
findings and conclusions that Lawson was responsible for the
rehabilitation of his properties and had estimated the cost
to be at least $30,000. Lawson, prior to entry of the
court' s November 27 judgment, had filed an affidavit stating
that he had already expended approximately $43,000 in the
rehabilitation of his properties. A review of the pre-trial
proceedings and docket entries reflects that the motion of
plaintiffs to strike Lawson's affidavit was never officially
denied. We therefore remand this issue with instructions to
determine whether Lawson has sufficiently rehabilitated his
property.
In conclusion, we approve the District Court's filing
of its November 27 judgment, but reverse the court's award of
compensatory damages. We vacate and remand the court's award
of punitive damages. Upon remand, we instruct the District
Court to determine whether appellant has satisfactorily
rehabilitated his property.
We concur: