Grenfell v. Anderson

No. 01-268

IN THE SUPREME COURT OF THE STATE OF MONTANA

2002 MT 225

ROGER GRENFELL,

Plaintiff and Respondent,

v.

GARY ANDERSON, individually; GARY
ANDERSON, d/b/a PG&L MARKETING, INC.;
and PG&L, INC., and JOHN DOE ONE,

Defendants and Appellants,

and

GARY ANDERSON, individually; GARY ANDERSON,
d/b/a PG&L MARKETING, INC.;and PG&L, INC.,

Defendants and Counterclaimants

v.

ROGER GRENFELL,

Plaintiff and Counterdefendant.

APPEAL FROM: District Court of the Fourth Judicial District,
In and for the County of Missoula,
Honorable Douglas G. Harkin, Judge Presiding

COUNSEL OF RECORD:

For Appellants:

Linda Osorio St. Peter, St. Peter & Warren, Missoula, Montana

For Respondents:

P. Mars Scott, Missoula, Montana

Submitted on Briefs: October 4, 2001
Decided: October 10, 2002

Filed:

__________________________________________
Clerk
Justice Jim Rice delivered the Opinion of the Court.
¶1 Defendants and Appellants Gary Anderson and PG&L, Inc.

(Anderson) appeal from judgment entered by the Fourth Judicial

District Court, Missoula County, pursuant to remand by this Court

in Grenfell v. Anderson, 1999 MT 272, 296 Mont. 474, 989 P.2d 818

(Grenfell I). On remand the District Court entered amended

findings of fact and conclusions of law awarding Anderson $25,800

in lost profits for Plaintiff and Respondent Roger Grenfell’s

(Grenfell) breach of the commercial lease agreement and denying

Anderson’s claim of breach of the implied covenant of good faith

and fair dealing, and denying Anderson’s claims for treble damages

and punitive damages for forcible entry and forcible detainer, and

for tortious interference with a contract. Anderson appeals the

denial of his claims and raises the following issues for review:
¶2 1. Did the District Court exceed its jurisdiction on remand?

¶3 2. Did the District Court mistakenly base Anderson’s
counterclaim for breach of the lease agreement on an issue not pled
or raised at trial?

¶4 3. Did the District Court err in concluding that Anderson was
not the prevailing party and therefore not entitled to attorney
fees?

¶5 4. Did the District Court err in denying Anderson’s
counterclaims for forcible entry and forcible detainer?

¶6 5. Did the District Court err in denying Anderson’s
counterclaim for tortious interference?

¶7 6. Did the District Court err in denying Anderson’s
counterclaim for punitive damages?

2
 BACKGROUND

¶8 We review here only the necessary and relevant factual and

procedural background required to make a determination of the

issues herein on appeal. For a full background discussion, see

Grenfell I.

¶9 This action originally arose from a commercial lease agreement

entered into by Grenfell and Anderson on January 18, 1989, for

property located on Brooks Avenue in Missoula, Montana. The lease

was for three years with a provision that Anderson could exercise a

five-year option to extend the terms of the lease. The record

demonstrates that the parties contemplated a second five-year

option, but there is no written agreement accordingly. A written

addendum, signed by the parties on or about June 15, 1990,

specified that the written five-year option would begin on February

1, 1992. The parties were in agreement that the premises would be

used only for commercial purposes, and Anderson sublet the premises

to various commercial tenants up through the time that Grenfell

terminated the lease agreement.
¶10 A mutual covenant in the lease agreement provided that if

Anderson was in default for failure to pay rent or otherwise

perform under the agreement, and thereafter failed to remedy such

default within ten days after written notice by Grenfell, then

Grenfell could lawfully enter and repossess the premises as if the

lease had not been made, effectively terminating the agreement.

¶11 From the commencement of the agreement, Anderson occupied only

half of the premises, and in February 1989, sublet the other half

3
to Rick Bice (Bice), pursuant to an oral month-to-month tenancy.

In February of 1991, Anderson relocated his business to a nearby

building and sought to sublet his vacated half of the premises. On

October 20, 1991, Anderson executed a five-year sublease agreement

with Richard Houldson (Houldson), agreeing to sublet the entire

premises. Anderson sent a letter to Bice, dated October 24, 1991,

notifying Bice that Anderson had rented the entire building and

that Bice had 30 days to vacate. Shortly thereafter, Bice informed

Grenfell of the Anderson-Houldson sublease.
¶12 On October 17, 1991, however, Grenfell had sent to Anderson

via certified mail a notice of default for failure to pay past due

rent and utility bills, a letter that we determined in Grenfell I

had neither provided Anderson with actual nor constructive notice.

See Grenfell I, ¶¶ 35, 44-46. Eleven days later, on October 28,

1991, Grenfell entered and repossessed the premises by changing the

locks. We determined that Grenfell’s act of changing the locks

effectively terminated the lease agreement between Grenfell and

Anderson pursuant to the explicit provisions of the agreement. See

Grenfell I, ¶ 50.

¶13 On November 25, 1991, Grenfell filed suit against Anderson,

alleging breach of the lease agreement, unlawful detainer, and

violation of the implied covenant of good faith and fair dealing.

Anderson filed a counterclaim on February 21, 1992, alleging

damages for forcible entry and forcible detainer, breach of

contract, breach of the covenant of good faith and fair dealing,

and tortious interference with Anderson’s contractual relations.

4
¶14 Anderson prevailed on a motion for partial summary judgment

wherein the District Court determined that the options contained in

the lease agreement could be automatically exercised and could thus

be a basis for an award of damages. Grenfell prevailed in the

subsequent bench trial, receiving an award of $4,148.78, plus

attorney fees and costs. The District Court dismissed all of

Anderson’s counterclaims, stating that Anderson had not presented

credible evidence to support his claim for damages.

¶15 Anderson appealed and this Court affirmed in part, reversed in

part, and remanded to the District Court for further proceedings.

Upon remand, the District Court entered amended findings of fact,

conclusions of law and an order, concluding that Anderson breached

the lease agreement and the implied covenant of good faith and fair

dealing for failing to timely pay rent and utilities to Grenfell,

entitling Grenfell to $256.91. The District Court also concluded

that Grenfell breached the lease agreement by failing to provide

effective notice to Anderson of his default prior to entering and

changing the locks on the premises. The District Court concluded

that Grenfell’s breach of the lease interfered with the Anderson-

Houldson sublease, awarding Anderson $25,800.00 in “lost profits”

resulting from Grenfell’s breach of the lease agreement. The

District Court denied Anderson’s treble damage claim for forcible

entry and forcible detainer and denied Anderson’s punitive damage

claim for tortious interference with contractual or business

relations. The District Court concluded that Grenfell acted in

good faith and did not breach the implied covenant of good faith

5
and fair dealing. The District Court finally concluded that

neither party was the “prevailing party” for purposes of awarding

attorney fees, and ordered that each party bear the burden of their

own costs and fees.
ISSUE 1

¶16 Did the District Court exceed its jurisdiction on remand?

¶17 Anderson argues that the District Court exceeded its

jurisdiction on remand when it entered further findings and

conclusions on Grenfell’s original claims when Grenfell had not

cross-appealed the District Court’s initial order, and this Court’s

remand did not require further determination of Grenfell’s claims.

Anderson argues that the doctrine of res judicata barred the

District Court from entering any further findings or conclusions on

Grenfell’s original claims. Grenfell responds that the District

Court’s amended findings and conclusions are directly in line with

this Court’s instructions on remand.

¶18 This Court has previously defined the interrelated theories of

res judicata and “law of the case.” In Scott v. Scott (1997), 283 Mont. 169,

939 P.2d 998, we stated that “res judicata is a final judgment which, when rendered on

the merits, is an absolute bar to a subsequent action between the same parties or those

in privity with them, upon the same claim or demand.” Scott, 283 Mont. at 175, 939 P.2d

at 1001 (citing Fiscus v. Beartooth Electric Cooperative, Inc. (1979), 180 Mont. 434, 435-

37, 591 P.2d 196, 197). In contrast, “the law of the case doctrine ‘expresses the practice of

courts generally to refuse to reopen what has been decided. It expresses the rule that the final

6
judgment of the highest court is the final determination of the parties’ rights.’” Scott, 283

Mont. at 175, 939 P.2d at 1001-02; Fiscus, 180 Mont. at 436, 591 P.2d at 197.

¶19 “The general rule in Montana is that where a decision has been

rendered by the Supreme Court on a particular issue between the

same parties in the same case, whether that decision is right or

wrong, such decision is binding on the parties and the courts and

cannot be relitigated in a subsequent appeal.” Belgrade State Bank v.

Swainson (1978), 176 Mont. 444, 446, 578 P.2d 1166, 1167 (citations omitted). Thus,

“when a case is reversed and remanded, the trial court may not ignore the mandate and

opinion of the reviewing court; instead, the trial court ‘must proceed in conformity with

the views expressed by the appellate court.’” In re Marriage of Pfeifer, 1998 MT 228, ¶

12, 291 Mont. 23, ¶ 12, 965 P.2d 895, ¶ 12 (citation omitted).

¶20 Anderson contends that the District Court did not proceed on

remand in conformity with the views expressed by this Court when it

entered additional findings and conclusions on Grenfell’s three

original claims–breach of the lease agreement, breach of the

implied covenant of good faith and fair dealing, and unlawful

detainer.

¶21 Regarding Grenfell’s claim for Anderson’s breach of the lease

agreement, the District Court originally found that Anderson

breached the lease by not paying utilities for five months and

missing the October rent payment. In calculating damages owed to

Grenfell, the District Court included unpaid rent and utilities

through January 1992, the end date of the lease agreement.

7
¶22 On appeal we determined Grenfell’s default letters to Anderson

provided neither actual nor constructive notice of Anderson’s

default. We did conclude, however, that Grenfell terminated the

lease as a matter of law when he changed the locks and took

possession of the premises on October 28, 1991. We thus held that

Anderson could not be held liable for damages beyond this date and

that the District Court erred in calculating damages through

January 1992. Grenfell I, ¶¶ 35, 46, 50-55. We determined that,

whether Anderson was in default was irrelevant, as Grenfell was

entitled to recover all rent and utilities due up to the time that

the lease was terminated. Grenfell I, ¶ 55. Consequently, we

affirmed the District Court’s calculation of damages owed by

Anderson to Grenfell up to October 28, 1991, in the amount of

$256.91. Grenfell I, ¶ 56.
¶23 On remand the District Court entered amended findings of fact

consistent with this Court’s determination that Anderson received

no effective notice of default and that the termination of the

lease was made effective by Grenfell’s act of changing the locks.

Consistent with these amended findings, the District Court entered

amended conclusions of law, concluding that Grenfell was entitled

to an award of $256.91. To the extent that this Court did not

directly make a determination of whether Anderson’s non-payment did

or did not constitute a breach of the agreement, the District

Court’s additional determination that Anderson’s non-payment of

rent and utilities constituted a breach of the agreement is not

inconsistent with the law of the case as determined in Grenfell I.

8
 Whether the District Court’s conclusion is correct is irrelevant

in determining whether it exceeded its jurisdiction on remand. We

conclude that it did not.

¶24 The District Court did not conduct further proceedings on

Grenfell’s claims or on Anderson’s counterclaims. Rather, it

amended its original findings and conclusions to bring them into

conformity with this Court’s views in Grenfell I that Grenfell was

entitled to recover $256.91 in unpaid rent and utilities. In

awarding this sum, the District Court did not exceed this Court’s

binding decision in Grenfell I, and is in conformity with the law

of the case. See Pfeifer, ¶ 12; Scott, 283 Mont. at 175, 939 P.2d at 1001; Fiscus,

180 Mont. at 436, 591 P.2d at 197.

¶25 Anderson further contends that the District Court exceeded its

jurisdiction in entering additional conclusions of law regarding

Grenfell’s claim for breach of the implied covenant of good faith

and fair dealing. The District Court originally entered no

conclusions of law regarding Grenfell’s good faith and fair dealing

claim and this Court did not address this aspect of Grenfell’s

claim on appeal.

¶26 In its amended conclusions of law, the District Court

concluded that Anderson’s failure to pay rent and utilities

pursuant to the provisions of the agreement was unreasonable

conduct constituting a breach of the implied covenant of good faith

and fair dealing, and therefore a breach of the contract. The

District Court concluded, however, that damages stemming from this

9
breach are only the damages already awarded for breach of contract

(i.e., the $256.91).

¶27 We again conclude that whether the District Court’s conclusion

on this issue is correct is irrelevant to the issue of whether it

exceeded its jurisdiction on remand. To the extent that this Court

made no determination in Grenfell I on Grenfell’s claim for breach

of the implied covenant of good faith and fair dealing, the

District Court’s determination is not barred by res judicata or by

the law of the case. See Pfeifer, ¶ 12; Scott, 283 Mont. at 175, 939 P.2d at 1001;

Fiscus, 180 Mont. at 436, 591 P.2d at 197. Anderson does not appeal the District Court’s

final determination of the merits of this claim, and we decline to address it further.

¶28 Finally, Anderson asserts that the District Court exceeded its

jurisdiction when it entered additional conclusions of law

regarding Grenfell’s claim against Anderson for unlawful detainer.

Again, in the original proceedings the District Court entered no

specific conclusions of law regarding Grenfell’s claim against

Anderson for unlawful detainer. However, in Grenfell I, we

declared void Grenfell’s claim for unlawful detainer “under the
logical conclusion that once locked out, Anderson could in no sense

unlawfully detain the premises absent a showing of his reentry.”

Grenfell I, ¶ 53.

¶29 On remand, the District Court entered a single conclusion of

law echoing this Court’s opinion in Grenfell I nearly verbatim.

Under no argument can we logically conclude that the District

Court’s amended conclusion is not in conformity with the views

expressed by this Court on appeal or is inconsistent with the law

10
of the case. We therefore conclude that the District Court did not

exceed its jurisdiction in its amended conclusions regarding

Grenfell’s claim for unlawful detainer, nor in addressing any of

Grenfell’s other claims in his original complaint.
ISSUE II

¶30 Did the District Court mistakenly base Anderson’s counterclaim
for breach of the lease agreement on an issue not pled or raised at
trial?

¶31 In its amended findings of fact and conclusions of law, the

District Court references a letter sent by Anderson to Grenfell for

the purpose of notifying Grenfell that he was in default of the

lease agreement for failing to provide air conditioning on the

leased premises. Upon review of the lease language, the District

Court determined that no reference to air conditioning existed in

the lease agreement and that Grenfell was not in default of the

lease for not providing air conditioning services.

¶32 Anderson notes that the issue of the air conditioning was

remarked in his October 29, 1991, letter to Grenfell, but that

Anderson did not raise in his answer and counterclaim anything

having to do with the air conditioning, nor did he subsequently

request relief on such grounds.

¶33 In response, Grenfell, as well as this Court, agrees that

Anderson did not counterclaim for breach of the lease agreement

based upon any action or inaction taken by Grenfell in regard to

the air conditioning. To the extent that the District Court based

its determination of Anderson’s claim for breach of the lease

agreement on Anderson’s October 29, 1991, letter, we conclude that

11
the District Court erred. However, any error in this regard is

immaterial in light of the District Court’s subsequent

determination of Anderson’s breach claim on the merits.

¶34 Anderson’s original counterclaim for Grenfell’s breach of the

lease agreement is based upon Grenfell’s improper October 17, 1991,

notice of default and subsequent lockout on October 28, 1991. In

addressing the merits of this counterclaim on remand, the District

Court, consistent with this Court’s decision in Grenfell I,

concluded that Anderson did not receive either actual or

constructive notice from Grenfell that Anderson was in default on

the lease agreement. Grenfell I, ¶¶ 35, 46. The District Court

subsequently concluded that Grenfell breached the lease agreement

in failing to provide proper notice prior to locking Anderson out

of the premises.
¶35 In its analysis of Anderson’s breach claim, the District Court

concluded that Anderson presented “clearly ascertainable” evidence

of “lost profits” which were proximately caused by Grenfell’s

breach of the agreement. The District Court found that Anderson

entered into a valid sublease agreement with Richard Houldson on

October 20, 1999, and that Grenfell was aware of the Anderson-

Houldson sublease, the term of which was for four years and two

months, from December 1, 1991 to January 31, 1996.

¶36 The District Court concluded that Anderson was entitled to

$516.00 per month in lost profits for a total of 50 months,

totaling $25,800 in “lost profits” for Grenfell’s breach of the

lease agreement. Anderson does not appeal this finding, and

12
neither does Grenfell suggest that the District Court erred in its

conclusion or request this Court to reverse the award to Anderson

for Grenfell’s breach.

¶37 Thus, although we have concluded that the District Court

mistakenly based part of Anderson’s claim for breach of the lease

agreement on the issue of air conditioning, we conclude that the

District Court nonetheless adjudicated Anderson’s counterclaim for

breach of the lease agreement upon the merits. The District

Court’s adjudication is affirmed accordingly.
ISSUE III

¶38 Did the District Court err in concluding that Anderson was not
the prevailing party and therefore not entitled to attorney fees?

¶39 Both parties claimed to be prevailing parties entitling each

to an award of attorney fees pursuant to the terms of the lease

agreement. The lease agreement provides:

In the event of litigation arising out of this lease,
including any litigation for the collection of rent, the
prevailing parties shall be allowed a reasonable
attorney’s fee together with costs of suit and other
collection costs expended.

The District Court cites to Kennedy v. Dawson, 1999 MT 265, 296

Mont. 430, 989 P.2d 390, for the rule that there is no prevailing

party where both parties gain victory but also suffer a loss. It

further cites to Rustics of Lindbergh Lake, Inc. v. Lease (1984),

213 Mont. 246, 690 P.2d 440, for the rule that, while no one factor

should be considered in determining the prevailing party, the party

that survives an action involving a counterclaim with the net

judgment should generally be considered the prevailing party. The

District Court acknowledged that Anderson was the net prevailing

13
party in that he prevailed on his counterclaim for breach of

contract and was awarded $25,800.00 in lost profits. But the

District Court additionally ruled that Anderson was the initial

breaching party and denied attorney fees to either party, citing

Empire Dev. Co. v. Johnson (1989), 236 Mont. 433, 770 P.2d 525, for

the rule that a district court retains discretion to award no

attorney fees where both parties breach the same contract.

¶40 Anderson asserts that the District Court erred, arguing that

he neither breached the lease agreement nor suffered a loss, and,

therefore, as the net prevailing party, is entitled to attorney

fees under the express terms of the agreement. Arguing that he

suffered no loss, Anderson points to Kennedy v. Dawson for the rule

that payment of a preexisting obligation cannot be considered a

loss, and argues that the $256.91 awarded to Grenfell is an amount

that Anderson owed as a prior obligation, and is thus improperly

characterized as a loss. See Kennedy, ¶ 53. Of significance,

Anderson notes and the record reflects that Anderson did not

dispute owing the rent and utilities at issue, but merely disputed

receiving proper invoicing of the amount due and further disputed

receiving proper default notices once he was past due.
¶41 In Kennedy, the plaintiff instituted an action requesting that

the court determine ownership of land. Kennedy, ¶¶ 25-26, 53.

Kennedy prevailed on summary judgment and, as the prevailing party,

was obligated under the profit sweep provision of the land purchase

agreement to pay the defendant, Dawson, $100,000 in order to

successfully satisfy the terms of the agreement. Kennedy, ¶ 49.

14
This Court held that the requirement of Kennedy to pay the $100,000

could not be considered a loss to Kennedy, as it was an obligation

that Kennedy assumed under the contract as the prevailing party.

Kennedy, ¶ 53.

¶42 From this holding, Anderson argues that he, too, already owed

the $256.91 that Grenfell sued to recover, and, notwithstanding

that Grenfell prevailed on this claim, that it cannot be considered

a loss to Anderson as he did not dispute already owing the judgment

of $256.91.
¶43 Kennedy and the present situation, however, are factually

distinguishable. Kennedy petitioned the district court to

determine himself as the proper conveyee of the property, thus

obligating him to fulfill the terms of the agreement as the

purchaser. See Kennedy, ¶¶ 25-26, 53. In effect, Kennedy

requested, as the purchaser, that he be given the opportunity to

fulfill all terms and obligations of the agreement, including a

payment of $100,000 to Dawson under the profit sweep provision.

¶44 Conversely, Grenfell sued Anderson to recover a preexisting

obligation owed by Anderson, and needed to assume no preexisting
obligation on his own part as a prevailing party. This case

presents the traditional situation where parties agree that

attorney fees are appropriate for the prevailing party, and serves

the provision’s purpose and intent: that of protecting the

prevailing party from the cost of litigation in order to receive

the full benefit of what the opposing party is already obligated to

15
pay. Thus, we find little merit in Anderson’s reliance on Kennedy,

as that case is easily distinguishable.

¶45 However, we do find merit in Anderson’s argument that he did

not dispute owing rent to Grenfell for the relevant months, but

merely disputed receiving proper notice of the amount due and

proper notice of default–thus, not disputing being in default, but

disputing being in breach of the lease agreement. We first note

that what acts constitute “default” is not specifically defined in

the lease agreement. However, it is clear from the plain language

of the agreement that non-payment of rent by the lessee on or

before the first day of each month for which the payment of rent is

due, will constitute a default on the agreement. Based upon the

terms of the agreement, the lessee will subsequently be in breach

of the agreement if, within ten days of receiving written notice of

default, lessee fails to remedy such default.
¶46 It is the law of the case from Grenfell I that Anderson did

not receive either actual or constructive notice from Grenfell that

he was in default on the agreement, and therefore, that the ten-day

period for Anderson to cure the default did not commence. See

Grenfell I, ¶¶ 35, 44-46. The District Court thus erred in

concluding that Anderson was the initial breaching party by merely

being in default on the agreement. Pursuant to the lease

agreement’s explicit terms, Anderson could not be in breach of the

agreement unless failing to remedy his default prior to the running

of the ten-day cure period, a period that only begins running

subsequent to receipt of proper written notice.

16
¶47 As we conclude, and the record demonstrates, that Anderson did

not dispute owing past-due rent to Grenfell, but merely disputed

that Grenfell sent invoices with amounts due, we cannot

characterize Grenfell’s judgment of $256.91 as a loss to Anderson,

nor can we properly characterize Grenfell as a prevailing party.

It is undisputed that Anderson did not receive proper notice of his

default and that the ten-day grace period had not run. Anderson’s

default on rent and/or utility payments for the months that were

not properly invoiced cannot, therefore, be characterized as a

breach of the lease agreement.
¶48 The District Court correctly noted that it retains discretion

to award attorney fees where a contract provision grants attorney

fees to the prevailing party, but where both parties have breached

the express terms of the agreement. See Empire Dev. Co. v. Johnson

(1989), 236 Mont. 433, 441, 770 P.2d 525, 530. However, because

Anderson was not a breaching party and because he did not suffer a

loss as a result of this litigation, the District Court did not

have discretion to deny attorney fees to the prevailing party

contrary to the express provision of the agreement. See

Transaction Network, Inc. v. Wellington Technologies, Inc., 2000 MT

223, ¶ 19, 301 Mont. 212, ¶ 19, 7 P.3d 409, ¶ 19 (“[i]f an

agreement between parties provides for attorney’s fees, a district

court is bound by its terms”)(citation omitted).

¶49 We conclude that Anderson, as the only prevailing party in

this action, is entitled to reasonable attorney fees pursuant to

17
the express terms of the lease agreement. We reverse and remand

accordingly.
ISSUE IV

¶50 Did the District Court err in denying Anderson’s counterclaims
for forcible entry and forcible detainer?

¶51 The District Court denied Anderson’s counterclaim for forcible

entry and counterclaim for forcible detainer. Pursuant to § 70-27-

102, MCA, a person is guilty of forcible entry:

(1) by breaking open doors, windows, or other parts of a
house or by any kind of violence or circumstance of
terror enters upon or into any real property or mining
claim; or

(2) after entering peaceably upon real property or
mining claim, turns out by force, threats, or menacing
conduct the party in possession.

¶52 The District Court found that when Grenfell entered the

premises on October 28, 1991, he did so peaceably, without breaking

windows or breaking open doors or other parts of the property, and

therefore did not commit forcible entry. The District Court also

found that Anderson was not present when Grenfell took repossession

of the premises and did not know that he was locked out until

sometime in November 1991.

¶53 Anderson argues that the use of locks by Grenfell to prevent

Anderson from peaceable possession was itself the exercise of force

sufficient to satisfy the requirements of forcible entry. Anderson

argues that this Court’s decision in Sage v. Rogers (1993), 257

Mont. 229, 848 P.2d 1034, supports his argument that the use of a

padlock is sufficient to establish forcible entry and forcible

detainer. We disagree.

18
¶54 In Sage, the landlord in a commercial lease agreement served

the tenant with a notice of eviction and used a padlock to deny the

defendant entrance subsequent to the landlord’s good faith belief

that the lease had been properly terminated. Sage, 257 Mont. at

233, 241, 848 P.2d at 1037, 1042. We affirmed the District Court’s

denial of nominal damages on the defendant’s claim for forcible

entry or forcible detainer, where the District Court found that the

landlord acted in a good faith belief that the tenant could

properly be locked out. Sage, 257 Mont. at 241, 848 P.2d at 1041-

42. However, neither this Court nor the District Court made a

determination as to whether the padlocking of the front door did or

did not constitute either a forcible entry and/or a forcible

detainer on the part of the landlord.
¶55 The word “force” is generally interpreted as including not

only actual application of physical force, but such threats or

display of physical force as are reasonably calculated to inspire

fear of death or bodily harm. Lambert v. Helena Adjustment Co.

(1924), 69 Mont. 510, 513, 222 P. 1057, 1058. This Court has

interpreted force as “unlawful violence.” Lambert, 69 Mont. at

513-14, 222 P. at 1058. The objective of § 70-27-102, MCA, is to

furnish a summary remedy to obtain possession of real property and

to prevent even rightful owners from taking the law into their own

hands and proceeding by violence to take possession. Herzog v.

Texas Co. (1931), 88 Mont. 580, 587-88, 294 P. 962, 963 (citations

omitted). Whether the circumstances surrounding a defendant’s

entry either constitute or do not constitute violence, and

19
therefore forcible entry, is a question for the fact finder. See

Herzog, 88 Mont. at 588, 294 P. at 964-65 (“[i]t is for the jury to

determine whether there was a forcible entry”). This Court will

not overturn a District Court’s finding unless it is clearly

erroneous. Tungsten Holdings, Inc. v. Olson, 2002 MT 158, ¶ 13,

310 Mont. 374, ¶ 13, 50 P.3d 1086, ¶ 13.

¶56 We conclude that the District Court’s finding that Grenfell’s

actions of changing the locks on the premises did not constitute

forcible entry, as he broke nothing and entered peaceably, is based

upon undisputed, credible evidence and is, therefore, not clearly

erroneous.
¶57 Anderson next asserts that the District Court erred in denying

his claim for forcible detainer. Section § 70-27-103, MCA,

provides:

Every person is guilty of a forcible detainer who either:

(1) by force or by menaces and threats of violence
unlawfully holds and keeps the possession of any real
property or mining claim, whether the same was acquired
peaceably or otherwise; or

(2) in the nighttime or during the absence of the
occupant of any lands or mining claim unlawfully enters
upon real property and, after demand made for the
surrender thereof, for the period of 5 days refuses to
surrender the same to such former occupant. The occupant
of real property or mining claim, within the meaning of
this subsection, is one who, within 5 days preceding such
unlawful entry, was in the peaceable and undisputed
possession of such lands.

¶58 The District Court found that Grenfell did not use force,

threats, or violence to keep possession of the premises subsequent

to entering and changing the locks on October 28, 1991. The

District Court further found that Anderson’s demand letter of

20
November 1991, demanding that Grenfell surrender the leased

premises to Anderson, was based upon Anderson’s cure of the

defaults that were highlighted in Grenfell’s October 30, 1991,

notice of default. The District Court concluded that Anderson’s

cure of defaults alleged in the October 30, 1991, letter, are

irrelevant as a matter of law because Grenfell’s changing of the

locks on October 28, 1991, effectively terminated the lease between

Grenfell and Anderson. See Grenfell I, ¶ 50.

¶59 Anderson argues that the District Court erroneously relied

upon subsection (1) of § 70-27-103, MCA, and overlooked the

exclusive requirements of subsection (2), which merely requires the

defendant to unlawfully enter the premises in the absence of the

occupant and refuse to surrender the premises within five days of

such demand from the occupant.
¶60 We agree with the District Court that Anderson’s November 1991

demand letter was ineffective pursuant to § 70-27-103, MCA, as

Grenfell had terminated the lease agreement by entering and

repossessing the premises on October 28, 1991. We determined in

Grenfell I that, upon Grenfell’s terminating the lease agreement by

the act of changing the locks and repossessing the premises,

Anderson’s obligations under the agreement ended as a matter of

law. See Grenfell I, ¶ 51. We likewise conclude that Anderson

could no longer, subsequent to the termination of the lease, claim

a legal right to reenter and repossess the premises under the

terminated agreement wherein Anderson himself owed no further

obligations.

21
¶61 As we conclude that Grenfell had terminated the lease prior to

Anderson’s letter of November 1991, we also conclude that the

District Court did not err in denying Anderson’s claim for forcible

detainer or in denying Anderson’s request for treble damages.
ISSUE V

¶62 Did the District Court err in denying Anderson’s counterclaim
for tortious interference?

¶63 The District Court determined that Anderson did not establish

a prima facie case that Grenfell tortiously interfered with

Anderson’s sublease. The District Court first noted that

Anderson’s claim for tortious interference in Count VI of his

counterclaim stemmed solely from Grenfell’s alleged interference in

the contractual relationship between Anderson and Bice, wherein

Grenfell sent to Bice a letter dated October 29, 1991, informing

Bice that Anderson was in default on the lease and that Bice should

thereafter remit payment on the sublease to himself rather than

Anderson. The District Court further noted that Anderson, in his

proposed findings and conclusions after remand, also alleged that

Grenfell tortiously interfered with the contractual relations

between he and Houldson.

¶64 In order to establish a prima facie case of interference with

contractual or business relations, it must be shown that the

defendant’s acts (1) were intentional and willful, (2) were

calculated to cause damage to the plaintiff in his or her business,

(3) were done with the unlawful purpose of causing damage or loss,

without right or justifiable cause on the part of the actor, and

22
(4) that actual damages and loss resulted. Bolz v. Myers (1982),

200 Mont. 286, 295, 651 P.2d 606, 611 (citation omitted).

¶65 The District Court found that Grenfell’s lockout on October 28

and the letter of October 29, 1991, were based upon a good faith

belief that Anderson was in default on the lease agreement for

failing to pay rent and utilities, and that Anderson was in breach

of the agreement for failing to remedy his default within the ten-

day cure period, which ended on October 27, 1991. This finding was

predicated upon the District Court’s conclusion that Grenfell held

a good faith belief that his default notice of October 17, although

unclaimed by Anderson, constituted effective notice of default.
¶66 Noting that Anderson terminated the sublease with Bice by

written letter of October 24, 1991, the District Court concluded

that any interference by Grenfell with the Anderson-Bice sublease

occurred subsequent to Anderson’s termination of the subtenancy,

and further, that any alleged “willful interference” by Grenfell

was based upon a good faith belief that his notice was sufficient

and that his actions were justified.

¶67 Likewise, the District Court similarly concluded that any

interference by Grenfell with the Anderson-Houldson sublease was

also based upon a good faith belief that his notice of default was

sufficient, and that Grenfell’s actions did not constitute

intentionally unlawful and willful interference with the Anderson-

Houldson sublease for the purpose of causing damages to Anderson.

Thus, the District Court ultimately concluded that Anderson did not

23
establish a prima facie case of tortious interference with

contractual or business relations by Grenfell.

¶68 Anderson asserts that the District Court’s conclusion is

contrary to the law of the case as determined in Grenfell I, and

that based upon the doctrine of res judicata, the District Court

erred by effectively reversing this Court’s decision in Grenfell I.

Anderson points to the language in Grenfell I wherein we stated:

“We hold that Anderson has presented sufficient credible evidence

to support his claim for damages . . . .” Grenfell I, ¶ 58.

Anderson argues that the sufficient, credible, and overwhelming

evidence presented at trial supports his counterclaim for tortious

interference, and that the District Court’s conclusion to the

contrary is error based upon the above language of this Court.
¶69 In the original action, the District Court concluded that

Anderson was the initial and sole breaching party, received actual

and constructive notice of default, did not present credible

evidence to support his claim for damages against Grenfell, and it

thus did not reach the merits of Anderson’s claim for damages. On

appeal, this Court in Grenfell I reversed a number of the District

Court’s conclusions of law, including its conclusions that Anderson

received actual or constructive notice of default prior to

Grenfell’s lockout, and remanded to the District Court for further

consideration of Anderson’s claims in light of our holding. See

Grenfell I, ¶¶ 35, 44-46, 58-59. Reviewing evidence presented by

Anderson, we stated: “We conclude that Anderson, contrary to the

District Court’s conclusion, has presented credible evidence to

24
support his claim for lost profits. Whether Grenfell is in fact

liable for damages under any of Anderson’s claims, as well as

whether he could have foreseen Anderson’s lost profits at the time

their lease was made, are matters that should be addressed upon

remand.” Grenfell I, ¶ 64.

¶70 Decidedly, this Court did not make any ruling on the merits of

Anderson’s counterclaims against Grenfell, but merely reversed the

conclusion of the District Court that Anderson presented no

credible evidence to support his alleged claims. We remanded

precisely for a determination on the merits whether Grenfell was,

in fact, liable under any of Anderson’s claims. Thus, we do not

find Anderson’s argument compelling that the District Court was

bound by the doctrine of res judicata to find that Anderson had

prevailed on the merits of his counterclaim alleging that Grenfell

was guilty of tortious interference with Anderson’s contractual or

business relationships with either Bice or Houldson.
¶71 The fulcrum of the District Court’s denial of Anderson’s claim

for tortious interference is the following: (1) The claim, as

written, was based on the sublease between Anderson and Rick Bice;

(2) Anderson terminated the sublease with Bice in a written letter

of October 24, 1991; (3) Grenfell’s alleged “willful interference”

with this sublease agreement came after Anderson’s letter

terminating the Anderson-Bice subtenancy; and finally (4),

Grenfell’s act of changing the locks on October 28, 1991, was done

on the good faith belief that he had given proper notice of default

and that Anderson was in breach of the lease agreement. The

25
District Court thus concluded that Grenfell could not have

tortiously interfered with the Anderson-Bice sublease, as the

sublease was terminated prior to Grenfell’s lockout, nor did any

“willful interference” occur with the Anderson-Houldson sublease,

as Grenfell believed, in good faith, that his lockout of Anderson

was done “with right and justification” on his part.

¶72 Anderson cites extensively to portions of the trial transcript

and much of his own testimony as evidence that Grenfell attempted

to interfere with the Anderson-Bice sublease on various occasions

prior to October 24, 1991, citing to a dispute regarding Grenfell’s

alleged refusal to fix the air conditioning and to a dispute

regarding Grenfell’s claim of entitlement to reimbursement from

Bice for work performed on the premises.
¶73 In considering this evidence, the District Court found that

Grenfell admitted to conferring with Bice “around the time of

default” regarding Bice taking over the entire premises and

thereafter remitting the rent to Grenfell instead of Anderson. The

District Court found, however, that Grenfell and Bice did not enter

into a lease agreement until after Grenfell terminated the

agreement with Anderson, and that Grenfell could not have thus

willfully interfered.

¶74 This Court will not set aside a district court’s findings of

fact unless they are clearly erroneous, and we give due regard to

the opportunity of the district court to judge the credibility of

witnesses. Rule 52(a), M.R.Civ.P.; Tungsten Holdings, Inc. v.

Olson, 2002 MT 158, ¶ 13, 310 Mont. 374, ¶ 13, 50 P.3d 1086, ¶ 13;

26
Grenfell I, ¶ 24. A district court’s findings are clearly

erroneous if they are not supported by substantial credible

evidence, if the trial court has misapprehended the effect of the

evidence, or if a review of the record leaves this Court with a

definite and firm conviction that a mistake has been committed.

Tungsten, ¶ 13; Grenfell I, ¶ 24 (citation omitted). Additionally,

in determining whether a district court’s findings are supported by

substantial evidence, this Court must view the evidence in the

light most favorable to the prevailing party. Grenfell I, ¶ 24

(citation omitted).
¶75 Upon review of the record and viewing the evidence in a light

most favorable to Grenfell on Anderson’s counterclaim of tortious

interference with business or contractual relations, we conclude

that the District Court did not err in finding that Anderson

terminated the Anderson-Bice sublease prior to any alleged tortious

interference by Grenfell, nor did it err in finding that Grenfell

terminated the lease agreement based upon a good faith belief that

Anderson was in breach of the agreement. The District Court,

therefore, did not err when it concluded that Anderson did not

establish a prima facie case of tortious interference of business

or contractual relations on either sublease.

¶76 The District Court’s decision is affirmed accordingly.
ISSUE VI

¶77 Did the District Court err in denying Anderson’s counterclaim
for punitive damages?

¶78 Anderson’s counterclaim for punitive damages is based upon

allegations that Grenfell had knowledge of the Anderson-Houldson

27
sublease and, with intentional disregard of the high probability of

injury to Anderson, acted with indifference in refusing to

surrender the premises subsequent to Anderson’s demand letter of

October 29, 1991. Anderson alleged that such refusal was caused

and induced by the unlawful and malicious acts by Grenfell and

resulted in Houldson refusing to perform payment under the

sublease.

¶79 Section 27-1-220, MCA, provides:

Punitive damages - when allowed. (2)(a) Unless otherwise
expressly provided by statute, punitive damages may not
be recovered in any action arising from:
(i) contract; or
(ii) breach of contract.

¶80 This case is a contract case and no applicable statute

provides for punitive damages. We have previously held, however,

that tort type damages may be available for traditional contract

related torts such as fraud, fraudulent inducement, and tortious

interference with a contract. See, generally, Story v. City of

Bozeman (1990), 242 Mont. 436, 791 P.2d 767. We have also

concluded that a person could be liable for breach of a contract to

which they are a party and also be liable for the tort of

intentional interference. We have noted that there can be a

distinction between mere breach of a contract and actions which, by

their outrageous nature, tortiously interfere with the business

relations between the plaintiff and his or her customer. See Bolz

v. Meyers (1982), 200 Mont. 286, 651 P.2d 606; see also Daniels v.

Dean (1992), 253 Mont. 465, 473-74, 833 P.2d 1078, 1084; Moore v.

Handy (1988), 230 Mont. 158, 748 P.2d 477 (affirming an award of

28
punitive damages against a defendant for breach of a duty to assign

a lease, separate and distinct from the breach of the lease itself)

(overruled on other grounds).

¶81 However, in light of this Court’s affirmation that the

District Court did not err in concluding that Anderson failed to

establish a prima facie case of tortious interference of business

or contractual relations on either of the subleases, we likewise

affirm its denial of punitive damages to Anderson.

¶82 Affirmed in part, reversed in part, and remanded.

/S/ JIM RICE
We concur:

/S/ JAMES C. NELSON
/S/ PATRICIA COTTER
/S/ TERRY N. TRIEWEILER
/S/ JIM REGNIER

29