Baird v. Norwest Bank

No. 91-224
IN THE SUPREME COURT OF THE STATE OF MONTANA
1992

THOMAS and DENISE BAIRD,
Plaintiffs and Respondents,
.-
- TIE-

NORWEST BANK, L .
CLERK
L i S lf
YiL
OF S U P R E M E COURl
STATE OF MONTANA
Defendant and Appellant.

APPEAL FROM: District Court of the First Judicial District,
In and for the County of Lewis and Clark,
The Honorable Jeffrey M. Sherlock, Judge presiding.

COUNSEL OF RECORD:
For Appellant:
Terry B. Cosgrove and Tom K. Hopgood argued, Dale E.
Reagor, Luxan & Murfitt, Helena, Montana
Pierre L. Bacheller, Pierre L. Bacheller, Inc.,
Billings, Montana
For Respondent:
Jonathan Motl argued, David K. W. Wilson, Jr.,
Reynolds, Motl, Sherwood & Wright, Helena, Montana
For Amicus Curiae:
George T. Bennett, Attorney at Law, Helena, Montana

Submitted: June 6, 1992
Decided: December 4. 1992
Filed:
Justice R. C. McDonough delivered the Opinion of the Court.

Plaintiffs, Thomas and Denise Baird, brought this action to
recover damages from Norwest Bank for accelerating payment and
repossessing their truck and van upon a default under an
installment note. The complaint sought damages based on breach of
contract; breach of the covenant of good faith and fair dealing:
breach of the Montana Unfair Trade Practices and Consumer
Protection Act; fraud: and intentional infliction of emotional
distress. The jury returned a verdict for the Bairds and awarded
them $5,200 for violation of the Montana Consumer Protection Act:
$6,600 for breach of contract obligations; $ 2 7 , 0 0 0 for fraud: and

$81,000 in punitive damages. Norwest appeals. We affirm in part
and reverse in part.
The issues for our review are:
1. Was there sufficient evidence to support the jury's
verdict that Norwest Bank breached the contract?
2. Was there sufficient evidence to support the jury's
verdict that Norwest Bank committed fraud?
3. Was there sufficient evidence to support the jury's award
of emotional distress damages?
4. Did the District Court err in allowing the Bairds' former
attorney to testify as an expert witness?
5. Does the Montana Unfair Trade Practices and Consumer
Protection Act apply to consumer loans by banks?
6. Did Norwest Bank waive the default provisions of the

2
installment note by accepting late payments?
7. Should the Bairds be awarded attorney's fees on appeal?
8. Did the District Court properly review the punitive
damages award?
Plaintiffs, Thomas and Denise Baird, were the owners of a 1975
Dodge van and a 1979 4-wheel drive pickup truck. In early 1989,
the front end of the truck failed and the Bairds borrowed $1,190.77
from Norwest Bank (Norwest) and used the money to fix the front end
of the truck. The truck was put up as a security for the loan.
The first payment on this loan was paid on time.
In April 1989, the engine on the truck failed and the Bairds
borrowed additional money from Norwest to replace the truck engine.
The second loan was for the amount of $2,904.81 and the money was
used to repay the first Norwest loan and to purchase the new truck
engine. Both the truck and the van were secured by a note and
security agreement with monthly payments set at $140.68 beginning
May 24, 1989.
The first payment on the second loan was eleven days late.
The second payment was twenty-two days late. The delinquent
account was assigned to a Norwest employee collector named Sarah
Mosure (Ms. Mosure) . When the third payment, due July 24th, became
fifteen days overdue, Ms. Mosure initiated collection procedures on
the Bairds' account. Shortly thereafter, Ms. Mosure telephoned Mr.
Baird.
The substance of that phone call was central to the issues
decided by the jury. MS. Mosure maintained that Mr. Baird and she

3
agreed that the account would be brought up to date by September
1st. The Bairds maintained that Ms. Mosure agreed to give them
until September 15th to make the payment. MS. Mosure entered the
September 1st date as the agreed date on the bank computer.
On September 12, 1989, when no payment had been made, Norwest
accelerated the note and repossessed the Bairds' van. Norwest
maintained that the Bairds were advised that they could obtain
possession of their van by paying the accelerated loan balance. On
September 13, the Bairds attempted to make the July and August
payments by depositing a check in the Norwest night deposit.
Norwest returned those payments to the Bairds . The Bairds
attempted to make timely September, October and November payments
but those payments were also rejected by Norwest and were returned
to them. On December 12, 1989, the pickup truck was also
repossessed without notice to the Bairds.
The Bairds brought this action against Norwest and the case
was tried before a jury. The jury returned a verdict for the
Bairds, specifically finding that Norwest had breached a contract
with the Bairds, committed fraud, and violated the Montana Unfair
Trade Practice and Consumer Protection Act of 1973 (CPA) . The jury
awarded punitive damages. Norwest appeals the denial of its motion
for directed verdict, the judgment entered on the jury verdict, and
the denial of its motions for judgment NOV and new trial.
I
Was there sufficient evidence to support the jury's verdict
that Norwest breached the contract?

4
 The jury was instructed with regard to the breach of contract
claim as follows:
INSTRUCTION NO. 11
The issues to be determined by you in this case are these:
...
[ D] id the Defendant breach its contractual obligations to
Plaintiffs. If you find Defendant did not breach the
contract, you will not consider the issue further. If,
however, you find such a breach occurred you will have a
second question to consider, namely:
Was the breach the cause of any damage to
Plaintiffs? If your answer to this question was "no" YOU
will not consider the issue further. If your answer is
"yes", you will have a third question to consider,
namely:
What actual damages arose from breach of the
contract: (You may not award damages for emotional
distress damages or punitive damages under this theory of
recovery. You may not award damages already awarded
under the Consumer Protection Act.)
The jury concluded that Norwest breached the contract and awarded
damages of $6,600 to the Bairds.
Norwest contends there was a complete failure on the part of
the Bairds to prove that Norwest agreed to give the Bairds until
September 15th to bring their loan current. Bairds contend that
Ms. Mosure had agreed to a payment date of September 15th.
The testimony of both Mr. and Mrs. Baird established that they
told Ms. Mosure, the collector for Norwest, that they could make
the payment "after the 10th. Repossession took place on September
12. The testimony of Mr. Poston, at one time the attorney for
Bairds, supports the Bairds' contention that a September 15th date
was agreed to and that Norwest breached the contract.

5
 In addition, the testimony of Jean Fangsrud, also of Norwest,
established that the Bairds had told her they had promised to pay
by September 15:
Q. Can you describe for the jury what contact, if
any, you had with either Tom or Denise Baird?
A. The only contact that I had with them was the
day after the repossession. I first talked to
Denise and then later that day I did talk to
Tom in reference to the repossession.

Q. Would you describe for the jury the substance
of the conversation that you had with Mrs.
Baird?
A. Okay. When Denise did call me, she wanted to
know why that Norwest Bank had repossessed the
van. I explained to her because there was a
broken promise to pay for two payments and
then she had also indicated to me that Tom was
going to make the two payments. I also told
her at that time that Norwest Bank will not
accept the two delinquent payments. The loan
needed to be paid off in full, plus the
expenses that Norwest Bank had incurred.
Q. You informed Denise at that time that the two
payments, even if the Bairds were to attempt
to make them that day, would not be accepted?
A. Correct.

Q. Did you have any further conversation with
Mrs. Baird?
A. I don't believe so.

Q. Would you describe for the jury the
conversation you had with Mr. Baird later that
day?
A. Mr. Baird had contacted me and also wanted to
know why the repossession had taken place. I
explained to him what had happened, the broken
promise to pay the two payments. He had told
me that he did not promise to pay on September
1 of '89. Because we had not received that it
6
 was assigned out to take possession.
Q. However, in reviewing the comments entered by
Sarah Mosure, do you find information contrary
to Mr. Baird's assertion--
A. Yes.
Q. --that he did not promise to pay on September
l?

A. He had told Sarah that he would make payments
on September 1 He said that the doctors paid
.
by September 1.
...
Q. You also recognize, do you not, that in the
course of your conversation Mr. Baird was in
disagreement with Sarah's position that he had
promised by September lst?
A. Yes, he informed me that he did not make a
promise to pay for two payments on September
1st.
Q. He informed you he had promised to pay by
September 15th?
A. That's what he informed me.
Q. And the only information you had that would
dispute him was what Sarah had typed in?
A. Yes.
The jury concluded that Norwest breached the contract and assessed
damages for such breach in the amount of $6,600.

The standard of review to be applied here was set forth in
Barrett v. ASARCO (1990), 245 Mont. 196, 200, 799 P.2d 1078, 1080;
and Miller v. Frasure (1991), 248 Mont. 132, 137, 809 P.2d 1257,
1261:

Substantial evidence is that evidence that a
reasonable mind might accept as adequate to support a
conclusion; it consists of more than a mere scintilla of
evidence but may be somewhat less than a DreDonderance.
7
 Black's Law Dictionary 1281 (5th Ed. 1979); Stanhope v.
Lawrence (Mont. 1990), [241 Mont. 4681, 787 P.2d 1226,
1228-1229, 47 St.Rep. 438, 440. Although it may be based
on weak and conflicting evidence, in order to rise to the
level of substantial evidence it must be greater than
trifling or frivolous. Christensen v. Britton (Mont.
1990), [ (1989), 140 Mont. 393,] 784 P.2d 908, 913, 46
St.Rep. 2223, 2230. [Emphasis added.]
Barrett, 245 Mont. 196, 799 P.2d 1078.
In Hash v. State (1991), 247 Mont. 497, 500, 807 P.2d 1363,
1365, this Court held "[tlhis Court cannot reweigh the evidence or

disturb the findings of a jury unless that evidence is so
inherently impossible or improbable as not to be entitled to
belief." All of the parties agree that the payment date by
agreement was extended. The contested fact is to what date.
Although the Bairds failed to positively testify to an agreement
with Norwest for a September 15th payment date, after considering
all of the evidence, we conclude there was evidence which a
reasonable mind might accept as adequate to support a conclusion of
a September 15th payment date. We hold that there was sufficient
evidence to support the jury's verdict that Norwest breached the
contract.
I1
Was there sufficient evidence to support the jury's verdict
that Norwest committed fraud?
The jury was instructed on fraud as follows:
If you find that the parties agreed that the late
payments were to be made by September 15, 1989, then you
may consider whether the Defendant committed fraud. If
you find that the parties agreed that the late payments
were to be made by September 1, 1989, then you may not
consider whether the Defendant committed fraud.

8
The jury was further instructed on the nine elements necessary to
establish actual fraud. This Court recently described the same
elements in Batten v. Watts Cycle and Marine (1989), 240 Mont. 113,
117, 783 P.2d 378, 380-381. The elements and applicability to this
case are:
1. Was there a representation?
The alleged representation in this case was that Norwest
represented that it would allow the Bairds until September 15th to
make their payment. Because in Issue I the jury found that the
parties agreed to the payment date of the 15th, this element is
satisfied.
2. Was the representation false?
Again, this element is disposed of under Issue I.
3. Was the false representation material?
From the facts it is clear that the payment date of September
15th was material.
4. Did the speaker have knowledge as to the falsity of the
representation?
In other words, did Ms. Mosure, the speaker, know that she was
falsely representing the agreed upon payment date when she entered
September 1st into the computer? A review of the record
demonstrates the total absence of evidence that Ms. Mosure knew of
the falsity of the September 1 date. We therefore must conclude
that the Bairds failed to satisfy this element of fraud.
5. Did the speaker intend that the false representation
should be acted upon by the person and in the manner reasonably

9
contemplated?
To restate, did Ms. Mosure, agent of Norwest, intend that the
Bairds should act upon the false representation which Ms. Mosure
had made as to the September 15th date? There is nothing in the
record to demonstrate that Ms. Mosure intended that the Bairds act
upon the September 15th date. Even the Bairds' testimony fails to
prove this point. Mr. Baird testified he told Ms. Mosure that he
needed until after September 10th to make his payment. He did not
testify that Ms. Mosure told him he could have until September 15th
to make the payment. Ms. Mosure testified that Mr. Baird asked her
if he could have until the loth, but that she agreed to a payment
date of the 1st. Even though we have affirmed the jury's verdict
under Issue I, that the parties agreed to a payment date of
September 15th, there is absolutely no indication in the record
that Ms. Mosure intentionally entered the wrong date into the
computer.
In proving this element of fraud it is the speaker's intent we
are concerned with. That would be Ms. Mosure. It is true that the
jury found there was an agreed upon date of September 15th, but the
jury was able to consider of the testimony and evidence and the
surrounding circumstances in arriving at that conclusion. In
satisfying this particular element of fraud only Ms. Mosurels
intent as the speaker may be considered. The record fails to
reveal any such intent on MS. Mosure's part. Furthermore, no one
testified that Bairds were intentionally given the wrong date or
that Ms. Mosure intentionally entered the wrong date. Not even the

10
Bairds so testified. In fact, the Bairds only maintain that Ms.
Mosure mistakenly entered the wrong date. We conclude that the
Bairds have failed to prove this essential element of fraud.
The Bairds failed to prove two of the essential elements
required under the instruction in order to establish actual fraud.
Therefore, we hold that there was not sufficient evidence to
support the jury's verdict that Norwest committed fraud and reverse
on this issue.
We note that the jury awarded damages for fraud in the amount
of $27,000. Because we reverse on this issue, the District Court
shall vacate the damages awarded for fraud in the amount of
$27,000.

I11
Was there sufficient evidence to support the jury's award of
emotional distress damages?
The only damage award on the verdict form which might be
construed to include emotional distress parasitic damages was for
fraud. Such award is vacated by Issue I1 of this opinion.
Therefore the issue is moot.
IV
Did the District Court err in allowing the Bairds' former
attorney to testify as an expert witness?
Mr. Poston, the Bairds' first attorney, testified at trial
about his involvement with the Bairds and about his contacts with
Norwest and its attorney. Norwest maintains that he testified as
an expert. It maintains that he testified to his legal opinion on

11
the law of waiver, self-help repossession without notice, and
acceleration of a note. Thus, Norwest maintains that all of these
questions eliciting this testimony were improper.
Norwest states that as a general rule, an attorney cannot
advise the jury as to the law of the case. Safeco Ins. Co. v.
Ellinghouse (1986), 223 Mont, 239, 251, 725 P.2d 217, 224. Norwest
maintains that Mr. Poston's testimony pertained to ultimate legal
issues in this case--whether Norwest acted fairly in the conduct of
commerce under the CPA; whether Norwest had the right to repossess
the vehicle absent notice; and whether Norwest had waived its right
to accelerate the debt absent notice.
The Bairds urge that the only objection of Norwest's counsel
to the testimony of Mr. Poston was:
I object, your honor. I believe that the offer of an
opinion may improperly invade the province of the jury in
determininq facts in this case. [Emphasis added.]
That objection was overruled and no objection was made that Mr.
Poston was testifying to any legal opinions.
In view of the limited objection made by counsel for Norwest,
we hold that there was no error in allowing Mr. Poston to testify.
V
Does the Montana Unfair Trade Practices and Consumer
Protection Act apply to consumer loans by banks?
The CPA prohibits unfair trade practices by entities engaged
in **trade commerce." "Trade or commerce" is defined as follows:
or
(6) '*Trade'*and "commerce1*mean the advertising,
offering for sale, sale, or distribution of any services
and any property, tangible or intangible, real, personal,
or mixed, and any other article, commodity, or thing of
12
 value, wherever situate, and shall include any trade or
commerce directly or indirectly affecting the people of
this state.
Section 30-14-102, MCA.
The first question is whether or not the loaning of money,
taking security therefor, and the collection of money, are
transactions within the above definition of trade or commerce.
This Court has not previously decided this issue. Statutes
prohibiting unfair trade practices have been interpreted to be
broad in scope and flexible in application so as to respond to
human inventiveness. See In re Smith (3rd. Cir. 1989), 866 F.2d
576. The business of mortgage lenders is the sale of a service
within the scope of unfair practices acts: see In Re Smith, supra.
In the case of Garland v. Mobile Oil Corporation (1972), 340 F.Supp
1095, in which Mobile argued the uniform act does not apply to
debtor-creditor relations involving credit card transactions and
collections, the court stated as follows:
Only an artificially narrow construction would hold that
the statute applies broadly to practices utilized to
effect a sale, but cannot reach the practice utilized in
its financing.
Garland at 1099. Here the money loaned was used by the consumer
at least in part for repairs and a new engine for a private motor
vehicle.
Our statute does not in anyway define or limit the words "any
services" as used in 5 30-14-102 ( 6 ) , MCA, supra, or as used in 5
30-14-133, MCA, which establishes the cause of action asserted
here. Section 30-14-133, MCA, so far as pertinent is as follows:
(1) Any person who purchases or leases goods or services
 primarily for personal, family, o r household purposes and
thereby suffers any ascertainable loss of money or
property, real or personal, as a result of the use or
employment by another person of a method, act, or
practice declared unlawful by 30-14-103 may bring an
individual but not a class action under the rules of
civil procedure in the district court of the county in
which the seller or lessor resides or has his principal
place of business or is doing business to recover actual
damages or $200, whichever is greater. The court may, in
its discretion, award up to three times the actual
damages sustained and may provide such equitable relief
as it considers necessary or proper.
There is no reason why the word "services" as used in 5 30-14-
102(6), MCA, be interpreted differently than as used in 5 30-14-

133, MCA.

The approach to defining what is meant by the word "services"
in the statute should be broad in scope. See In re Smith, supra.
This statute being in derogation of the common law, should be
liberally construed with a view to effect its object and to promote
justice. See 5 1-2-103, MCA, 1991.
Norwest has cited the case of Riverside National Bank v. Lewis
(Tex. 1980), 603 S.W.2d 169, which held that money (borrowing of
money) is neither a rlgood'l a "service" and stated:
or
Money, as money, is quite obviously neither work nor
labor. Seeking to acquire the use of money likewise is
not a seeking of work or labor. Rather, it is an attempt
to acquire an item of value. We hold that an attempt to
borrow money is not an attempt to acquire either work or
labor as contemplated in the DTPA.
Riverside at 174.
However, the Texas statute defined more restrictively what
services are under the statute. We note that the Riverside case
states that seeking to acquire the use of money is an attempt to
acquire an item of value. The Riverside case was later limited to
14
its facts which were the extension of credit unrelated to a
specific acquisition. Our § 30-14-102, MCA, defines "trade" or
"commercet1 the "[slale, or distribution of
as . . . [a] thing of
value. 'I
Later Texas cases expanded the Texas Act to include services
of a bank in connection with the extension of credit. See Security
Bank v. Dalton (Tex.Ct.App. 1991), 803 S.W.2d 443, 452. This
conclusion was arrived at even though the Texas Act defined
"services" as follows:
(1) "Goods" means tangible chattels or real property
purchased or leased for use.
(2) "Services" means work, labor, or service
purchased or leased for use, including services furnished
in connection with the sale or repair of goods. . . .
...
(4) (Consumer) means an individual, partnership,
corporation, this state, or a subdivision or agency of
this state who seeks or acquires by purchase or lease,
any goods or services, except that the term does not
include a business customer that has assets of $25
million or more. ...
In the case of Pa. Bankers ASS'n v. Com., Bureau of Consumer
Protection (1981), 427 A.2d 730, the Commonwealth Court of
Pennsylvania held that under the Unfair Trade Practices Act the
activity of lending and collecting money is trade or commerce. The
court had previously held in Pennsylvania Retailers, etc. v. Lazin
(1981), 426 A.2d 712, 718, that lending and collecting money was
within the definition of service.
We conclude therefore that the Unfair Trade Practices and
Consumer Protection Act applies to consumer loans by banks in the

15
lending and collecting of such loans.
VI
Did Norwest waive the default provisions of the installment
note by accepting late payments?
In light of our holding under Issue I, it is not necessary to
address this issue.
VI1
Should the Bairds be awarded attorney's fees on appeal?
Norwest maintains that upon reversal, the Court should direct
the District Court to award Norwest its attorney's fees for both
the lower court proceedings and the appeal herein.
The Bairds maintain that the parties stipulated and agreed to
the amount of attorney's fees which should be awarded the
plaintiffs as prevailing party in the District Court litigation.
The Bairds ask this Court to grant them their attorney's fees
necessary to defend this appeal with the proper amount to be
determined by stipulation of the parties, or if necessary, by the
District Court.
The contract involved here provides for attorney's fees to the
prevailing party. Section 28-3-704, MCA, provides that a
contractual right to attorney's fees is reciprocal. In addition,
the CPA, 5 30-14-133, MCA, allows the "prevailing party'' to recover
attorney's fees.
The parties entered a stipulation as to attorney's fees which
provides:
COMES NOW the parties above named through their
counsel of record and stipulate and agree that
16
 Plaintiffs, as prevailing parties in this matter under
the contract and Montana Consumer Protection Act claims,
are entitled to the sum of Nineteen Thousand Dollars
($19,000) as their reasonable attorney fees and further
agree that the judgment entered herein may be amended
nunc pro tunc to allow for the addition of that amount of
attorney fees.

This agreement is based on Plaintiffs' status as
prevailing party and the amount specified in this
aqreement has no force and effect should an armeal result
in a reversal of Plaintiffs verdict under one or both of
the claims qivinq rise to Plaintiffs riqhts to attorneys'
fees. The amount specified in this agreement applies
only to attorney fees incurred through February 15, 1991,
the last day of the jury trial in this matter, and does
not apply to any attorney fees which may be incurred in
post-trial matters, including appeal. The parties agree
to deal with all such post-trial attorney fees issues at
the appropriate time and before the appropriate court.
[Emphasis added.]
Inasmuch as there has been no reversal of the claims under which
the prevailing party is entitled to reasonable attorney's fees, the
plaintiffs are entitled to their fees to defend this appeal.
VI11

Did the District Court properly review the punitive damages
award?
This Court having reversed the verdict on the tort of fraud,
the award of punitive damages is to be vacated and the issue is
moot. Due to the fact that the award for punitive damages is
vacated and was included in the total award by the jury and the
District Court having stated in its order on post-trial motions
that it was taking the award into consideration in not awarding
treble damages for violation of CPA, we hereby remand to the
District Court for consideration in its discretion to award treble
damages under 5 30-14-133(1), MCA, and for such further action as
17
may be necessary in conformance with this opinion.

&E 2Justice
% 1
We Concur:

Justices

18
Just ce William E. Hunt, Sr., concurring in part and dissenting in
part
I concur with the majority's decision regarding Issues I, IV,

V, and VI.
However, I dissent with the majority's decision regarding
Issues 11, 111, and VI11 because I believe it disturbs the jury's
fact-finding process. This Court has continuously upheld the
fundamental proposition that the jury is entrusted with the
responsibility of seeking the truth. Because of our high regard
for the jury deliberation process, we have established an exacting
standard of review when examining a jury's verdict.
Motions to set aside jury verdicts as not supported
by the evidence are proper only when there is a complete
absence of any credible evidence in support of the
verdict. All evidence and all inferences drawn therefrom
must be considered in a light most favorable to the
adverse party. The courts will exercise the greatest
self-restraint in interfering with the constitutionally
mandated processes of jury decision.
Lackey v. Wilson (1983), 205 Mont. 476, 479, 668 P.2d 1051, 1053
(quoting Barmeyer v. Montana Power CO. (1983), 202 Mont. 185, 191,
657 P.2d 594, 597).

Evidence of fraud, by its very nature, will often be
circumstantial. On numerous occasions, trivial, remote, and
disconnected facts will be tied together by a jury to support a
finding of fraud. Walker v. Mink (1945), 117 Mont. 351, 158 P.2d
630. When analyzing Instruction No. 19, the court indicated that
the jury could only consider whether the bank committed fraud if
they first found that the parties agreed that the late payments

19
were due by September 15. After hearing much conflicting evidence,
the jury concluded that the parties agreed the payments were due on
September 15. With this finding, there was an implicit agreement
by the bank not to repossess the vehicle prior to the agreed date
of payment. However, the bank proceeded to repossess the vehicle
within only a few days of making that agreement. In addition, it
would not be difficult to infer from the facts that the time and
working pressures of Ms. Mosure's job forced her to type
September 1 into the bank's computer in order to clear her
responsibility for collection of the Baird's delinquent account.
It is from the facts above that I believe there was substantial
evidence to support the jury's verdict.
Therefore, I would affirm the decision of the District Court
and uphold the entire jury verdict.

Justice Terry N. Trieweiler concurs in the foregoing
concurrence and dissent.

20
Justice Fred J. Weber concurs and dissents as follows:
I dissent from the holding of the majority opinion on Issue V
- Does the Montana Unfair Trade Practices and Consumer Protection
Act (MCPA) apply to consumer loans by banks? I concur in the
balance of the holdings of the majority opinion.
The majority concludes that the MCPA applies to consumer loans
by banks in the lending and collecting of such loans. I will first
summarize my reasons for disagreeing with that conclusion. The
primary question is whether a bank consumer loan falls within the
provisions of § 30-14-133, MCA, which applies to any person who

purchases or leases goods or services primarily for personal,
family, or household purposes. The majority has failed to
demonstrate how the borrowing of money by a consumer is the
purchasing or leasing of goods or services.
Before discussing the specific statutory sections with which
we are directly involved, I think it appropriate to make a few
comments about the MCPA. That Act was adopted in 1973 with the aim
of prohibiting unfair trade practices with provisions for
investigation of such practices and penalties for violations.
Title 30, Chapter 14, Parts 1-2. The Act has forty-two different
sections which describe the means of protecting the consumer by
action on the part of the Department of Commerce, the Attorney
General, and the county attorneys of the fifty-six counties. These
sections provide for injunctions, restraining orders, civil
penalties up to $10,000, possible criminal convictions and criminal
fines with imprisonment. The basic thrust of the Act is protection

21
of the consumer by enforcement through various governmental
agencies.
Before discussing the one specific code section in that Act
which applies to the consumer, I emphasize the apparent result of
the majority opinion. In view of the broad definition of
"services" in the majority opinion, I assume that the majority
would apply the Act to the following: 1) all activities of any

kind of banks and loaning institutions, including all aspects of
loan and mortgage and other security financing; 2) all types of
services by hospitals, nursing homes, and retirement homes; 3) all
types of services rendered by such people as medical doctors,
dentists, accountants, architects, attorneys, and engineers. The
list is almost unlimited in those "services" which might be
included. Why is it important to consider such "services?" The
answer is the treble damages and attorney fees provisions of 5 30-

14-133, MCA, which are as follows:

(1) . .
. The court may, in its discretion, award up
to three times the actual damages sustained and may
provide such equitable relief as it considers necessary
or proper.
. . .
(3) In any action brought under this section, the
court may award the prevailing party reasonable attorney
fees incurred in prosecuting or defending the action.
In the past, very few actions have been brought by consumers under
the Act. Because of the great benefit of both treble damages and
attorney fees, I suggest that those having claims against any of
the above listed parties will conclude that the best procedure is
to seek to come under the Act. I conclude that such a striking

22
change in the practice in Montana should be left to the
legislature.
I will not discuss the particular sections of the Act which
are directly pertinent. The Key consumer section is § 30-14-133,

MCA, which provides in pertinent part:

Damages--notice to public agencies--attorney fees--prior
judgment as evidence. ( 1 ) Any person who purchases or
leases goods or services primarily for personal, family,
or household purposes and thereby suffers any
ascertainable loss of money .
. . as a result of the use
. .
. by another person of a method, act, or practice
declared unlawful by 30-14-103 may bring an individual .
. . .
. action . in the district court of the county in
which the seller or lessor resides . . .
This section applies to any person who purchases or leases goods or
services primarily for personal, family, or household purposes.
Clearly the making of a consumer loan from a bank does not
constitute a purchase or lease of goods nor a lease of services.
The remaining question is whether a consumer making a bank loan has
made a purchase of services. As pointed out in the majority
opinion, this issue has not been considered in Montana and very few
other jurisdictions have considered the issue.
The majority relies upon Smith v. Commercial Banking corp.
(3rd.Cir. 1989), 866 F.2d 576, which involves the Pennsylvania
consumer protection statutes. Smith points out that section 2 of

the Pennsylvania act enumerates seventeen specific acts which
constitute unfair or deceptive acts or practices and then points
out that Smith contends that Fidelity's conduct falls within the
catch-all provisions which make unlawful engaging in any other
fraudulent conduct which creates a likelihood of confusion or

23
misunderstanding. See 73 Pa.Stat.Ann. 5 201-3 (Purdon Supp. 1992)
We have no specific act provisions of that nature in our MCPA. The
only definitional statute regarding unfair acts is 5 30-14-103,
MCA, which provides:
Unlawful practices. Unfair methods of competition and
unfair or deceptive acts or practices in the conduct of
any trade or commerce are unlawful.
I do not find it appropriate to so generalize in accepting
Pennsylvania cases, federal and state, as authority where the
central provisions of the act are so strikingly different.
The majority points out that in Riverside Nat'l Bank v. Lewis
(Tex. 1 9 8 0 ) , 603 S.W.2d 169, the Texas court concluded that the
borrowing of money was neither a "good" or a "service" (both of
which are used in 5 30-14-133, MCA), and stated:
Money, as money, is quite obviously neither work nor
labor. Seeking to acquire the use of money likewise is
not a seeking of work or labor. Rather, it is an attempt
to acquire an item of value. We hold that an attempt to
borrow money is not an attempt to acquire either work or
labor as contemplated in the DTPA.
Riverside, 603 S.W.2d at 174. The majority concludes that the
Texas statutes define more restrictively than ours. It also points
out that Riverside was limited to its facts. I would point out
that the above quote has nothing to do with the statute but does
constitute an intelligent analysis of the nature of goods and
services as compared to money and seeking to acquire the use of
money. This analysis does contradict the holding of the majority.
Ultimately the majority refers to 1981 Pennsylvania cases
which held that lending and collecting money was within the
definition of service and then proceeds to conclude that our
24
Montana Act and its definition of services applies to consumer
loans by banks, I strongly disagree with that conclusion.
In analyzing whether there has been a purchase of services
where the bank makes a consumer loan, I point out § 30-14-133, MCA,

provides that the action is to be brought in the district court of
the county in which the "seller or lessor" resides. Under common
usage, I do not believe that the term seller or lessor would be
considered as including a bank which makes consumer loans.
Before attempting to reach a conclusion regarding the extent
of the purchase or leasing of goods and services as defined in 5
30-14-133, MCA, we should also consider that under such section, a
consumer is entitled to recover against another person who uses a
method, act, or practice which is declared unlawful under § 30-14-

103, MCA, quoted above. In order to determine what trade and
commerce are meant to be under 5 30-14-133, MCA, we must consider
§ 30-14-102, MCA, which contains the following definition:

( 6 ) "Trade" and "commerce" mean the advertising,
offering for sale, sale, or distribution of any services
and any property, tangible or intangible, real, persona,
or mixed, and any other article, commodity, or thing of
value, wherever situate, and shall include any trade or
commerce directly or indirectly affecting the people of
this state.
From the statutory wording it is clear that unfair methods of
competition and unfair or deceptive acts are limited to those
involved in the conduct of "trade" and "commerce" as defined in 5
30-14-102, MCA. This requires our consideration of that section in
greater detail.

25
 Section 30-14-102(6), MCA, defines trade and commerce as
advertising, offering for sale, sale and distribution of services
and property. On its face, the making of a consumer loan by a bank
does not fit within the classification of advertising, offering for
sale, sale, or distribution of services or other property. Because
there is no clear stated intent to include bank loans or consumer
loans or bank or consumer activities, I think it essential to
consider the history of the MCPA during the approximate 20 years
since it was enacted.
Since 1973 there has been no legislative revision indicating
a specific intent that a bank loan should constitute a purchase of

services within the definition of the MCPA. That conclusion is
fortified by a consideration ofthe regulations adopted duringthis
20-year period by the Department of Commerce of Montana. These
regulations are set forth in 8.78.101-406, ARM. A number of these
regulations specifically refer to various aspects of the sale of
merchandise, including its advertising and representations with
regard to the same. Next, there are a number of regulations which
apply to motor vehicles and cover the sales, repairs, maintenance
and service of motor vehicles. These regulations are limited to
the services in connection with the sales, repairs and maintenance
of such vehicles. There are also regulations covering reporting
agencies and fees which are not directly applicable. A review of
these Rules establishes that the enforcement on the part of the
Department of Commerce has been quite limited. Clearly the
Department has not concluded that the making of a consumer bank

26
loan constitutes services under the MCPA, nor have they established
any other regulations demonstrating that similar services are
considered as coming under the MCPA.
As I again examine the definition of trade and commerce in 5

30-14-102(6), MCA, I would follow the lead of the Department of
Commerce and limit the interpretation of the sale of services to
services relating to property, tangible or intangible, real,
personal or mixed, and other articles and commodities in commerce.
If that approach is applied to § 30-14-102(6), MCA, then the same

approach properly would be applicable to 5 30-14-133, MCA. We
properly could conclude that under 5 30-14-133, MCA, the borrowing
of money from a bank on a consumer loan is not a purchase of goods

or services. That conclusion is consistent with the reference to
"seller" or "lessor" in the code section. In view of the history
of the past twenty years, and the potential impact of the majority

conclusion, I would leave to the legislature the determination of
whether or not it is appropriate to extend the MCPA to consumer
loans made by banks and to other types of services rendered within
the state.
I would conclude that the MCPA does not apply to consumer
loans bv banks.

27
 December 4. 1992

CERTIFICATE OF SERVICE

I hereby certlfy that the following order was sent by United States mail, prepaid, to the
following named:

Tom K. Hopgood
Luxan & Murfitt
P.O. Box 1144
Helena, MT 59624

Terry B. Cosgrove
Attorney at Law
208 N. Montana, Ste. 204
Helena, MT 59601

Pierre L. Bacheller
Attorney at Law
P.O. Box 2078
Billings, MT 59103

Jonathan Motl
Reynolds, Motl, Shenvood & Wright
405 No. Last Chance Gulch
Helena, MT 59601

George T. Bennett
Attorney at Law
P.O. Box 1705
Helena, MT 59624

ED SMITH
CLERK OF THE SUPREME COURT
STATE OF MONTANA