No. 86-330
IN THE SUPREME COURT OF THE STATE OF MONTANA
1986
VERNON HOVEN ,
Plaintiff and Respondent,
-vs-
V7ILLIAM F. AMRINE and LARRY VERVICK,
Defendants and Appellants.
APPEAL FROM: District Court of the Fourth Judicial District,
In and for the County of Missoula,
The Honorable James R . Wheelis, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Lawrence F. Daly; Garlington, Lohn & Robinson,
Missoula, Montana
For Respondent:
Christopher B. Swartley; Datsopoulos, MacDonald
and. Lind, Missoula, Montana
Submitted on Briefs: Sept. 25, 1986
Decided : October 30, 1986
Filed: r)Pe-
.
, ,,qcJE
Mr. Justice John C. Sheehy delivered the Opinion of the
Court.
William Amrine and Larry Vervick appeal from a judgment
of the District Court, Fourth Judicial District, Missoula
County, awarding attorney fees to Vernon Hoven. We affirm
the District Court's award.
Hoven, Amrine and Vervick were equal shareholders in the
Missoula accounting firm of Hoven, Vervick & Amrine. In
July, 1979, Amrine and Vervick entered into an agreement to
purchase stock from Hoven. The agreement provided for the
award of attorney fees in the event a lawsuit was brought to
enforce any of the provisions of the agreement.
In June, 1985, Hoven served default notices on Amrine
and Vervick for failing to pay for the stock they had
purchased. Vervick and Amrine then brought suit in the
District Court to have the notices declared void. Hoven
responded with a suit against Amrine and Vervick seeking an
injunction and damages. The District Court consolidated the
two cases, and after a show cause hearing on June 25, 1985,
issued a preliminary injunction against Amrine and Vervick,
restraining them from taking any action which might
negatively affect the value of the corporation or its stock.
Amrine and Vervick continued to manage the day-to-day
business of the corporation. In August, 1985, the
corporation experienced cash flow problems and was unable to
meet certa.in obligations, including state and federal payroll
taxes. Amrine and Vervick, through their attorney, attempted
to contact Hoven, in order to obtain a stipulation for the
sale of a corporate asset to raise money. Their attorney was
unable to elicit a response from Hoven's attorney, and they
finally filed a motion to modify the preliminary injunction.
A hearing on this motion was held August 3 0 , 1985. At the
hearing, Hoven testified he had no substantive objections to
the sale. The District Court granted the first two
paragraphs of Amrine and Vervick's petition for modification,
deferring action on the remaining three issues.
In October, 1985, the District Court ruled that the
default notices were valid, and that Hoven was entitled to
recover attorney fees pursuant to the stock purchase
agreement. In November, the court held a hearing to set the
attorney fee award. Hoven was awarded fees for all attorney
services between June 14 and July 9, 1985. The court
reserved ruling on which party was entitled to recover fees
for the period a.fter July 9, 1985. Finally, in April, 1986,
the District Court granted Hoven attorney fees for the
post-July 9 period, and denied Amrine and Vervick's request
for the same.
Amrine and Vervick raise two issues on appeal: Whether
Hoven was entitled to an award of attorney fees for the
post-July 9 period, and if so, whether those fees were
reasonable? Additionally, respondent Hoven requests attorney
fees for this appeal.
Attorney fees are allowed when they are provided for by
statute or contractual provision. Jordan v. Elizabethan
Manor (1979), 181 Mont. 424, 434, 593 P.2d 1049, 1055. In
this case, the stock purchase agreement had a clause which
provided :
a. Attorney Fees. In the event suit is brought to
enforce any of the provisions of this agreement,
the prevailing parties shall be entitled to costs
of suit and any appeals thereon, including
reasonable attorney's fees.
Amrine and Vervick argue that the attorney fees awarded
for the August 30 hearing for modification of the preliminary
injunction do not fall under the contract provision cited
above. They argue that the modification of the injunction to
allow sale of a corporate asset has nothing to do with
enforcement of the provisions of the stock purchase
agreement.
We disagree. The main issues before the District Court
were whether or not the stock purchase agreement had been
breached by the failure of Amrine and Vervick to tender
payment to Hoven, and whether the default notices were valid.
These were complex issues which the court ultimately decided
in favor of Hoven in October, 1985. In the interim, while
the court was resolving the issues, a temporary injunction
was necessary to prevent Amrine and Vervick from dissipating
the assets of the corporation. The August 30 modification of
the injunction was necessary in order to allow the
corporation's operations to continue. We find, as did the
District Court, that the injunction and its modification were
one facet of the litigation whose main issues were the
validity of the default notices and breach of contract.
The party who prevails on the main issue of a case is
entitled to costs. Medhus v. Dutter (1.979), 184 Mont. 437,
447, 603 P.2d 669, 674. A prevailing party is one who has an
affirmative judgment rendered in his or her favor at the
conclusion of the entire case. Jordan v. Elizabethan Manor,
181 Mont. at 434, 593 P.2d at 1055. Medhus concerned costs
under § 5 25-10-101 and 25-10-102, MCA, while Jordan related
to attorney fees by contract. The interpretation in these
cases of "prevailing party" is applicable here. The District
Court found that Amrine and Vervick were not prevailing
parties; not only did Hoven prevail on the main issues of the
case, but the court granted only two of the five requests
made in Arnrine and Vervick's petition to modify. The court's
award of attorney fees in this case was proper.
Arnrine and Vervick's second argument is that the
attorney fees incurred by Hoven are unreasonable since those
fees would not have been incurred if Hoven had stipulated to
the sale of the asset rather than force them to petition the
court for a modification of the injunction. The District
Court found that where parties are able to stipulate to an
issue, matters may be more quickly resolved--but that the
failure to stipulate to an issue is not necessarily
unreasonable in an adversarial setting where the parties are
unable to reach an agreement. The court found that by
participating in the hearing, whether or not it was
reasonable or necessary, both parties incurred expenses and
attorney fees.
We hold the District Court did not abuse its discretion
by awarding attorney fees to Hoven, including those incurred
by his attorney from the August 30 hearing. The District
Court awarded attorney fees to the party prevailing on the
main issues of the case. It is not reasonable to require the
District Court to keep a running tally of "points scored" by
each side in order to apportion costs and attorney fees at
the end of every lawsuit. Our adoption of the prevailing
party rule in Medhus v.
- Dutter, supra, obviates that
requirement.
Order of the District Court is affirmed, and the cause
remanded for determination of respondent's costs and attorney
fees for this appeal.
i'-.. .
,
Justice
We Concur:
A
Chief Justice
-