Miller v. Watkins

No. 81-422

I N THE SUPREME COURT O THE STATE O MONTANA
F F

BOB EIILLER,

P l a i n t i f f and A p p e l l a n t ,

-VS-

B I L L WATKINS a n d LAVONNE WATKINS,

Defendants and Respondents.

Appeal from: D i s t r i c t Court o f t h e Fourteenth J u d i c i a l D i s t r i c t ,
I h a n d f o r t h e County o f M u s s e l s h e l l , The H o n o r a b l e
Nat A l l e n , J u d g e p r e s i d i n g .

C o u n s e l of Record:

For Appellant:

L e a p h a r t Law F i r m ; C . W. Leaphart, Jr., Helena,
Montana

For Respondents :

Susan S t e a r n s , Lakewood, C o l o r a d o

--
S u b m i t t e d on B r i e f s : J u l y i 5 , 1982

Decided: September 3 0 , 1982

Filed: S i p 3 0 1982
Mr. J u s t i c e Fred J. Weber delivered the Opinion of the
Court .
Bob Miller, plaintifi and appellant, brought this

action in the District Court of the Fourteentl? Judicial

D i s t r i c t , t 4 u s s e l s h e l l County, t o r e c o v e r damages f o r b r e a c h

of contract. B i l l Watkins, d e f e n d a n t and respondent, pled

t h e a f f i r m a t i v e d e f e n s e of a c c o r d and s a t i s f a c t i o n f o r a l l

c o u n t s of M i l l e r ' s c o m p l a i n t . Watkins a l s o f i l e d a c o u n t e r -

claim against Miller for damages for breach of contract,

unjust enrichment, malicious prosecution, and defamation.

The D i s t r i c t C o u r t s i t t i n g w i t h o u t a j u r y f o u n d i n f a v o r o f

Watkins denying Miller relief on a l l counts except for a
$1,500 p a y m e n t d u e o n o n e h o r s e . The c o u r t a w a r d e d W a t k i n s

a c t u a l damages on t h e b r e a c h o f c o n t r a c t f o r $ 2 3 , 0 0 0 ; a c t u a l

damages in conjunction with the malicious prosecution of

$30,000; a c t u a l damages f o r l i b e l and s l a n d e r i n t h e amount

of $25,000; and p u n i t i v e damages i n t h e amount of $50,000.

Miller appeals.

W affirm.
e

The f o l l o w i n g i s s u e s w i l l b e d i s c u s s e d :

(1) N a s substantial credible evidence presented at
trial t o support the f i n d i n g s of fact and c o n c l u s i o n s of

law?

( 2 ) Were t h e e l e m e n t s n e c e s s a r y t o p r o v e a m a l i c i o u s

prosecution action present?

(3) Was evidence presented to support the damage

awards?

Bill and LaVonne Watkins are husband and wife and

jointly own a n d o p e r a t e a p u b l i c s t a b l e . Watkins h a n d l e s

a l l phases of t h e business concerning t h e horses, including

the breeding, training, raising, racing and buying and
s e P l l n g of the horses. He owns s e v e r a l q u a l i t y s t a l l i o n s

which h e k e e p s a s s t u d s f o r b r e e d i n g p u r p o s e s and h e is a
member i n good s t a n d i n g o f t h e A m e r i c a n Q u a r t e r H o r s e Asso-
c i a t i o n (AQHA).

M i l l e r owns a n d o p e r a t e s a r a n c h n e a r J o r d a n , Montana,
in Garfield County, and is engaged in the business of
r a i s i n g horses. Prior t o 1969, Miller owned many h o r s e s
which were registered with the AQHA. However, in 1969,

M l l l e r was s u s p e n d e d f r o m t h e AQHA f o r l i f e and lost the

r i g h t t o have h i s h o r s e s r e g i s t e r e d . I n l a t e 1968 o r e a r l y
1969, p r i o r t o h i s s u s p e n s i o n , Miller t r a n s f e r r e d o w n e r s h i p

of all of his registered quarter horses to two of his
relatives, Dr. Purdom and D r . Shreeves of California, and
e n t e r e d i n t o a p a r t n e r s h i p a g r e e m e n t w i t h them a s a p a r t o f

the transf er .
J a c k i e Oakes, a/k/a Jackie Fleming, a/k/a Jackie
Miller, who is c u r r e n t l y known a s Jackie Kerrick (Jackie
O a k e s ) , i s a member of t h e AQHA and h a s n o t b e e n s u s p e n d e d
from membership t h e r e i n . I n 1 9 7 2 , J a c k i e Oakes and M i l l e r

became acquainted through various horse deals and soon
t h e r e a f t e r e n t e r e d i n t o a p a r t n e r s h i p a r r a n g e m e n t f o r buying
and s e l l i n g h o r s e s .
In 1972, Milier was experiencing difficulties with

D r s . Purdom and S h r e e v e s . H e ended h i s p a r t n e r s h i p w i t h t h e

d o c t o r s and had t h e r e g i s t r a t i o n o f a l l o f t h e h o r s e s t r a n s -
f e r r e d t o J a c k i e Oakes. I t was a t t h i s t i m e t h a t M i l l e r and

J a c k i e Oakes e n t e r e d i n t o some t y p e o f a b u s i n e s s a r r a n g e -
ment r e g a r d i n g t h e o w n e r s h i p of t h e h o r s e s and t h e i r o f f -
spring, s i n c e J a c k i e Oakes c o u l d r e g i s t e r horses with the

AQHA. I n 1971 o r 1972, forty t o f i f t y registered quarter
horses were moved to Miller's ranch near Jordan.

Prior to the year 1974, Jackie commenced residing with
Miller, and the two parties held themselves out to the
general public as man and wife, with each authorized to
transact business for and on behalf of the other with regard
to the horses. During the fall of 1974, Miller and Jackie
took a trip to Watkins' ranch. Miller introduced Jackie as

his wife and partner indicating that Jackie had full
authority to transact business regarding the horses owned

jointly by herself and Miller pursuant to her business
relationship, as well as her personal relationship with
Miller. During that meeting, Watkins entered into a
contract with Miller and Jackie, by which Watkins would
breed the Miller-Bakes mares with his stallions. The colts
born of that arrangement would be registered quarter horses
and would be split equally between Watkins and Miller-Oakes.
The contract was renewed annually for three years and
Miller-Oakes brought mares to the Watkins ranch in 1975,
1976, and 1977.
On October 8, 1974, the Cloverleaf brand, which was
owned by Miller or by the Cloverleaf Land and Livestock
Company, a Montana corporation, of which Miller was either

the sole or majority shareholder, was transferred to Jackie
Oakes and recorded in the Montana Brand Off ice. After the
brand had been transferred to Jackie Oakes, various colts
and yearlings were branded with the Cloverleaf brand.
In the spring of 1975, pursuant to the breeding agree-
ment, twenty-one head of Miller-Oakes mares were delivered
to Watkins' ranch for the purpose of breeding. Several
Miller-Oakes colts were either by the side of the mares at
the time they were delivered or born at Watkins' ranch.

U u r i n g t h e summer of 1975, a l l of t h e m a r e s and a l l of the

colts, wlth the exception of one which died at Watkins'

ranch, were r e t u r n e d t o M i l l e r and/or J a c k i e Oakes.

In t h e s p r i n g of 1976, a total of f o u r t e e n Miller-

Oakes m a r e s were d e l i v e r e d t o W a t k i n s ' r a n c h f o r t h e p u r p o s e

o i breeding. Some o f t h e m a r e s h a d c o l t s by t h e i r s i d e a n d

some o f t h e m a r e s f o a l e d d u r i n g t h e summer o f 1 9 7 6 . A l l of

these c o l t s were the result of the breeding of the 1975

s e a s o n and w e r e " p a r t n e r s h i p c o l t s " p u r s u a n t t o t h e a g r e e -

ment o f the parties. Fifteen Breeder's C e r t i f i c a t e s were

i s s u e d by W a t k i n s i n d i c a t i n g t h a t a t o t a l o f f i f t e e n c o l t s

had b e e n b o r n a s a r e s u l t o f t h e 1 9 7 5 b r e e d i n g s e a s o n .

A l l of t h e Miller-Oakes m a r e s and a l l o f t h e p a r t n e r -

s h i p c o l t s were r e t u r n e d t o M i l l e r and/or J a c k i e Oakes, w i t h

the exception of two of the partnership c o l t s which were

r e t a i n e d by W a t k i n s a s a d i s t r i b u t i o n . One of these c o l t s

which was r e t a i n e d was t h e Wicked F e l i t a c o l t .

I n t h e s p r i n g of 1977, a t o t a l of t h i r t y Miller-Oakes

mares were d e l i v e r e d t o Watkins' ranch for breeding pur-

poses. 3nce again, some o f t h e m a r e s had colts a t their

s l d e and o t h e r s f o a l e d a t W a t k i n s ' r a n c h d u r i n g t h e b r e e d i n g

season. D u r i n g t h e summer o f 1 9 7 7 , a f t e r h a v i n g b e e n b r e d ,

a l l of t h e mares with t h e i r c o l t s ( a l l c o l t s being p a r t n e r -

s h i p c o l t s ) were r e t u r n e d t o M i l l e r ' s ranch i n J o r d a n .

The M i l l e r - O a k e s mares were n o t d e l i v e r e d t o W a t k i n s '

ranch during the spring of 1978, as Watkins refused to

c o n t i n u e b r e e d i n g t h e m a r e s f o r two r e a s o n s . F i r s t , h e was

dissatisfied with the failure to divide the colt crops

pursuant to the agreement, and s e c o n d l y , Miller a n d Oakes
had failed to take the necessary steps to register the

colts, t h e r e b y b r e a c h i n g t h e i r p o r t i o n of t h e c o n t r a c t and
rendering t h e c o l t s less valuable. Further, by 1 9 7 8 , the
Miller-Oakes p a r t n e r s h i p had d i s i n t e g r a t e d . J a c k i e was n o

l o n g e r r e s i d i n g w i t h M i l l e r and e v i d e n t l y was n o t a p a r t o f
h i s b u s i n e s s arrangements. Once J a c k i e was no l o n g e r a p a r t
of M i l l e r ' s b u s i n e s s , i t was v e r y d o u b t f u l t h a t c o l t s b o r n

from t h e b r e e d i n g a r r a n g e m e n t s c o u l d e v e r be r e g i s t e r e d w i t h
t h e AQHA s i n c e M i l l e r was s u s p e n d e d f r o m t h a t o r g a n i z a t i o n .

A s i d e from t h e d i s p u t e o v e r t h e s p l i t t i n g o f t h e p a r t -
nership colts, Miller a l s o claimed t h a t Watkins had p u r -
chased s e v e r a l h o r s e s from Miller-Oakes, and t h a t M i l l e r had

never been compensated f o r t h e h o r s e s . Watkins on t h e o t h e r

hand a l l e g e d a c c o r d and s a t i s f a c t i o n by r e a s o n o f p a y m e n t i n
f u l l i n h i s answer w i t h r e s p e c t t o e a c h o f t h e s e h o r s e s . In
J u n e 1 9 7 8 , Miller a p p r o a c h e d two b r a n d i n s p e c t o r s a l l e g i n g
t h a t W a t k i n s had s t o l e n t h e s e h o r s e s . The b r a n d i n s p e c t o r s ,
together with Miller, approached the county attorneys in
M u s s e l s h e l l and F e r g u s C o u n t i e s , r e s u l t i n g i n t h e f i l i n g o f

three criminal actions against Watkins for horse theft.
Each o f t h e c r i m i n a l a c t i o n s was d i s m i s s e d w i t h p r e j u d i c e .
As a r e s u l t of Miller's complaint, Watkins counter-

ciairned for malicious prosection, libel and slander,
requesting actual and punitive damages. In addition,
vdatkins c l a i m e d a c t u a l damages f o r failure t o receive h i s
s h a r e of t h e p a r t n e r s h i p c o l t s , a s w e l l a s f o r h i s e x p e n s e s
and a c t u a l damages i n c a r e , f e e d i n g a n d b r e e d i n g o f M i l l e r ' s
horses.
I

Was s u b s t a n t i a l c r e d i b l e e v i d e n c e p r e s e n t e d a t t r i a l
t o s u p p o r t t h e f i n d i n g s of f a c t and c o n c l u s i o n s of law?

Miller b a s e s h i s a r g u m e n t on h i s c o n t e n t i o n t h a t h e
and Watkins "are really two old horse thieves" and that

n e i t h e r c a n r e a l l y be b e l i e v e d and t h a t t h e t h i r d p r i n c i p a l
witness, J a c k i e Oakes, h a s a n e x t r e m e l y u n r e l i a b l e memory

and admits lying to the county attorney of Musselshell
County. T h e r e was a l s o t e s t i m o n y t h a t some o f t h e b i l l s o f
s a l e w e r e p r e p a r e d a s l a t e a s 1 9 7 8 i n a m o t e l room.
" T h i s C o u r t w i l l n o t s u b s t i t u t e i t s judg-
ment f o r t h a t o f t h e t r i e r o f f a c t . W e
w i l l c o n s i d e r o n l y whether s u b s t a n t i a l
c r e d i b l e evidence supports t h e findings
and c o n c l u s i o n s . Findings w i l l n o t be
o v e r t u r n e d u n l e s s t h e r e is a c l e a r p r e -
p o n d e r a n c e of e v i d e n c e a g a i n s t them,
r e c o g n i z i n g t h a t e v i d e n c e may b e weak o r
conflicting, yet still support the find-
ings. [Citation omitted.] The j u d g m e n t
o f t h e t r i a l c o u r t i s presumed c o r r e c t ,
and t h i s C o u r t w i l l d r a w e v e r y l e g i t i m a t e
i n f e r e n c e t o support t h a t presumption."
J e n s e n v. J e n s e n ( 1 9 8 1 ) ,
629 P . 2 d 7 6 5 , 7 6 8 , 38 st.=
Mont .
927, 9 3 0 .
I

In addition, evidence will be viewed in the light most
favorable t o the prevailing party:

"When t h i s C o u r t r e v i e w s e v i d e n c e , i t
w i l l b e viewed i n t h e l i g h t m o s t f a v o r -
a b l e t o t h e p a r t y who p r e v a i l e d i n t h e
D i s t r i c t C o u r t , and t h e c r e d i b i l i t y o f
w i t n e s s e s and t h e w e i g h t a s s i g n e d t o
t h e i r t e s t i m o n y is f o r t h e D i s t r i c t C o u r t
I n a n o n j u r y t r i a l . " P a r k h i l l v. F u s e l i e r
(1981)t
1135, 3 8 = . ~ e p .
.
Mon t , 632 P.2d 1 1 3 2 ,
1424,1427.
R u l e 5 2 ( a ) , Fi.H.Civ.P., provides i n part:

" F i n d i n g s of f a c t s h a l l n o t be s e t a s i d e
u n l e s s c l e a r l y e r r o n e o u s , and d u e r e g a r d
s h a l l be g i v e n t o t h e o p p o r t u n i t y of t h e
t r i a l c o u r t t o judge t h e c r e d i b i l i t y of
witnesses."
Although there was conflicting testimony, we have
reviewed the record and hold that there was sufficient
c r e d i b l e evidence t o support t h e f i n d i n g s of the District
C o u r t b o t h i n d i s m i s s i n g t h e plaintiff's c l a i m a n d i n r u l i n g

i n f a v o r of t h e d e f e n d a n t ' s c o u n t e r c l a i m .

11

Were the elements necessary to prove a malicious

prosecution action present?

Watkins' counterclaim requested actual and punitive

damages f r o m M i l l e r f o r t h e m a l i c i o u s p r o s e c t i o n o f c r i m i n a l

actions against him. To prove a malicious prosecution

a c t i o n a g a i n s t M i l l e r , W a t k i n s h a d t h e b u r d e n t o show t h a t :

1. A c r i m i n a l p r o c e e d i n g was i n s t i t u t e d or c o n t i n u e d

by M i l l e r a g a i n s t W a t k i n s ;

2. The c r i m i n a l p r o c e e d i n g s w e r e t e r m i n a t e d i n f a v o r

of Watkins;

3. T h e r e was a n a b s e n c e o f probable cause for the

c r i m i n a l p r o c e e d i n g s ; and

4. T h e r e was m a l i c e o r a p r i m a r y p u r p o s e o t h e r t h a n

that of bringing a criminal to justice on the part of

Miller. O r s e r v . S t a t e ( 1 9 7 8 1 , 1 7 8 Mont. 1 2 6 , 1 3 5 , 582 P.2d

1 2 2 7 , 1232-1233; W. Prosser, The Law o f T o r t s , S 1 1 9 a t 8 3 5

( 4 t h ed. 1971).

Criminal complaints filed against Watkins were as

~ollows:

1. Musselshell County--three counts ot theft

( c r i m i n a l a c t i o n 1065)

a. M u r r i e t t a Grey

b. Wicked F e l i t a c o l t

c. Black Deckette

2. M u s s e l s h e l l County--one count of theft (criminal

a c t i o n 1077)

a. B e a n ' s mare
 3. F e r y u s County--four counts of t h e f t :
a. Twig D e c k g e l d i n g ( s o l d by W a t k i n s t o Brad
Hamlett)

b. P i s t o l Bar g e l d i n g ( s o l d by W a t k i n s t o Brad
Hamlett)
c. One g e l d i n g s o l d by W a t k i n s t o O s c a r W a l t e r
d. One g e l d i n g s o l d by W a t k i n s t o O s c a r W a l t e r
C r i m i n a l p r o c e e d i n g s i n s t i t u t e d o r ----------- -------
c o n t i n u e d by M i l l e r

a g a i n s t Watkins.
M i l l e r contends t h a t he d i d n o t i n s t i t u t e o r continue
proceedings a g a i n s t Watkins b u t t h a t he merely gave brand
inspectors information i n an e f f o r t t o cooperate with the
authorities relative to the investigation and identified
animals i n possession of third p a r t i e s which c a r r i e d h i s

brand. During the trial, Miller admitted going to the
M u s s e l s h e l l County a t t o r n e y and i n f o r m i n g him t h a t W a t k i n s
had s t o l e n h i s h o r s e s and e x p e c t i n g t h a t b a t k i n s would b e

charged with t h e f t . Miller a l s o c o n t a c t e d J a c k Sedgwick, a n

investigator for t h e Montana D e p a r t m e n t o f Livestock, and
i n f o r m e d him and t h e M u s s e l s h e l l C o u n t y s h e r i f f t h a t W a t k i n s
had h i s m a r e .

We hold t h a t Miller did institute and continue the
c r i m i n a l charges a g a i n s t Watkins.

Termination i n Watkins' favor.
The n e x t e l e m e n t i n a m a l i c i o u s p r o s e c t i o n a c t i o n i s
t e r m i n a t i o n of the proceedings i n favor of the plaintiff.
The l J l u s s e l s h e l 1 County and Fergus County complaints wers
dismissed with p r e j u d i c e f o r l a c k of a speedy t r i a l .
M i l l e r contends t h a t t h i s t y p e of d i s m i s s a l is n o t i n

favor of Watkins because i t does n o t r e f l e c t h i s innocence.
 I n L a c h n e r v. L a C r o i x ( 1 9 8 0 ) , 159 C a l . R p t r . 693, 695,
6 0 2 P.2d 393, 395, t h e C a l i f o r n i a C o u r t s t a t e d :
" I t is n o t e s s e n t i a l t o m a i n t e n a n c e o f a n
action for malicious prosecution t h a t the
p r i o r p r o c e e d i n g was f a v o r a b l y t e r m i n a t e d
f o l l o w i n g t r i a l on t h e m e r i t s . However,
t e r m i n a t i o n m u s t r e f l e c t on t h e m e r i t s o f
the underlying action. . .. . . A dismissal
d o e s re-
f o r f a i l u r e t o prosecute
f l e c t on t h e m e r i t s o f t h e a c t i o n ...
The r e f l e c t i o n a r i s e s f r o m t h a t n a t u r a l
assumption t h a t one d o e s n o t simply
abandon a m e r i t o r i o u s a c t i o n once i n s t i -
tuted." (Underscoring added.)
W agree with the California Court t h a t a dismissal
e

f o r l a c k of s p e e d y t r i a l d o e s r e f l e c t o n t h e m e r i t s o f t h e
c a s e and c a n be c o n s i d e r e d as a termination in favor of

Watkins.
P r o b a b l e Cause
Probable cause has been defined as "a reasonable

g r o u n d of suspicion, s u p p o r t e d by c i r c u m s t a n c e s s u f f i c i e n t
t o w a r r a n t a n o r d i n a r y p r u d e n t man i n b e l i e v i n g t h e p a r t y i s

g u i l t y of t h e o f f e n s e . I t i n c l u d e s an h o n e s t b e l i e f in the
g u i l t of the accused, since the reasonable man will not

p r o s e c u t e a n o t h e r whom h e d o e s n o t b e l i e v e t o be g u i l t y . "
Prosser, § 119 a t 8 4 1 .
During the trial Niller admitted that he sold the

B e a n ' s mare and t h e Twig Deck g e l d i n g o u t r i g h t t o W a t k i n s .
M i l l e r knew t h a t t h e r e was no b a s i s f o r t h e F e r g u s C o u n t y

c r i m i n a l c o m p l a i n t r e g a r d i n g t h e Twig D e c k o r f o r o n e c o u n t
o f c r i m i n a l a c t i o n 1077 r e g a r d i n g B e a n ' s mare i n M u s s e l s h e l l
cou*ty. The o t h e r t h r e e g e l d i n g s which c o m p r i s e t h e F e r g u s
C o u n t y c r i m i n a l a c t i o n w e r e s o l d t o W a t k i n s by J a c k i e Oakes.
W a t k i n s p a i d J a c k i e Oakes $750 f o r t h e s e t h r e e g e l d i n g s a n d
e v i d e n c e p r e s e n t e d a t t r i a l i n d i c a t e s t h a t M i l l e r knew a b o u t

t h i s transaction. T h u s , t h e r e was no b a s i s f o r t h e c r i m i n a l
I
a c t i o n i n F e r g u s County.

With regard to criminal action 1065 i n Musselshell

County, one count concerned Black Deckette, which Jackie
Oakes traded to Watkins, and Miller knew of the trade.

Another count in action 1065 concerned t h e Wicked Felita

c o l t which Watkins took a s a p a r t i a l d i s t r i b u t i o n of a c o l t

c r o p and M i l l e r r e c e i v e d a c o l t from Toi T w i s t o u t of the

same t r a n s a c t i o n . T h i s d i v i s i o n was made by J a c k i e Oakes.

The final count of criminal action 1065 concerned

M u r r i e t t a Grey. The e v i d e n c e p r e s e n t e d a t t r i a l i n d i c a t e d

that Bob M i l l e r knew and a p p r o v e d o f the trade involving

M u r r i e t t a Grey. From t h e t e s t i m o n y p r e s e n t e d a t t r i a l , the

D i s t r i c t C o u r t was j u s t i f i e d i n d e t e r m i n i n g t h a t t h e r e was

no p r o b a b l e cause for Miller to institute these actions

a g a i n s t W a t k i n s , a n d f u r t h e r , n o h o n e s t b e l i e f by M i l l e r o f
t h e g u i l t of Watkins.

Maiice a s a P r e r e q u i s i t e

The f o u r t h e l e m e n t n e c e s s a r y i n a m a l i c i o u s p r o s e c u -

t i o n a c t i o n is m a l i c e o r a p r i m a r y p u r p o s e o t h e r t h a n t h a t

of b r i n g i n g a n o f f e n d e r t o j u s t i c e . I n t h i s c a s e , t h e r e was

a c l e a r l a c k of p r o b a b l e c a u s e f o r c r i m i n a l p r o c e e d i n g s a s

pointed out i n the p r i o r section. Malice can be i n f e r r e d

from want of p r o b a b l e c a u s e . McGuire v . Armitage (1979),

,
- Mont. - 6 0 3 P.2d 253, 255, 36 S t . R e p . 2142, 2145. In
addition, Miller's testimony indicated that he was aware

t h a t o n e h o r s e h a d b e e n t r a d e d by J a c k i e O a k e s , y e t h e t o l d
t h e c o u n t y a t t o r n e y o f M u s s e l s h e l l C o u n t y t h a t t h e h o r s e was
stolen, f u l l y e x p e c t i n g Watkins t o be charged w i t h theft.

Sufficient evidence was presented to show m a l i c e and to

conclude t h a t Pliller's i n t e n t was n o t t o b r i n g a n o f f e n d e r
t o justice.

Was e v i d e n c e p r e s e n t e d t o s u p p o r t t h e damage a w a r d s ?

The j u d g m e n t o f t h e D i s t r i c t C o u r t p r o v i d e s i n p a r t :

"That t h e Court f u r t h e r f i n d i n g t h e
p l a i n t i f f l i a b l e t o the defendants i n the
amount o f Twenty-three Thousand and
no/100 D o l l a r s ( $ 2 3 , 0 0 0 . 0 0 ) f o r a c t u a l
damages f o r c o n t r a c t on t w e n t y - t h r e e
c o l t s , T h i r t y T h o u s a n d a n d no/100 D o l l a r s
($30,000.00) f o r a c t u a l damages as a
r e s u l t of t h e malicious prosecution,
T w e n t y - f i v e T h o u s a n d a n d no/100 D o l l a r s
($25,000.00) a c t u a l damages f o r l i b e l and
s l a n d e r , a n d F i f t y T h o u s a n d a n d no/100
D o l l a r s ( $ 5 0 , 0 0 0 . 0 0 ) p u n i t i v e damages f o r
i n t e n t i o n a l u t t e r a n c e s ; and

"That t h e defendants having incurred
n e c e s s a r y c o s t s i n t h e p r o s e c u t i o n of
t h i s l a w s u i t i n t h e amount o f S i x Hundred
Twenty-seven and 14/100 Dollars
($627.14); and

"That t h e d e f e n d a n t s being e n t i t l e d t o
t e n p e r c e n t ( 1 0 % ) i n t e r e s t p e r annum upon
t h e t o t a l amount o f t h i s J u d g m e n t , s u c h
i n t e r e s t t o commence w i t h t h e d a t e o f
f i l i n g t h i s Judgment, and good c a u s e
appearing.

"NOW, THEREFORE, I T I S HEREBY ORDERED,
ADJUDGED AND DECREED t h a t J u d g m e n t b e
e n t e r e d f o r t h e d e f e n d a n t s and a g a i n s t
t h e p l a i n t i f f f o r t h e sum o f One Hundred
T w e n t y - e i g h t T h o u s a n d S i x Hundred Twenty-
s e v e n a n d 14/100 D o l l a r s ( $ 1 2 8 , 6 2 7 . 1 4 ) ,
a s set f o r t h above, less $1500.00 t h a t
D e f e n d a n t s owe P l a i n t i f f , m a k i n g t h e
t o t a l j u d g m e n t One Hundred T w e n t y - s e v e n
' r h o u s a n d , One Hundred T w e n t y - s e v e n a n d
14/100 D o l l a r s ($127,127.14)."

Section 27-1-303, MCA, provides: "NO person can

recover a greater amount for t h e breach of an obligation

than he could have g a i n e d by f u l l performance thereof on

both s i d e s . . ." F i f t e e n c o l t s w e r e b o r n as a r e s u l t o f

t h e 1 9 7 5 b r e e d i n g a s e v i d e n c e d by t h e B r e e d e r ' s C e r t i f i c a t e s

f o r t h a t p a r t i c u l a r year introduced i n t o evidence. Finding

of F a c t No. 22 p r o v i d e d :
 " T h a t t h e r e was n o d o c u m e n t a r y e v i d e n c e
i n t r o d u c e d i n t o e v i d e n c e by e i t h e r s i d e
a s t o t h e e x a c t number o f t h e c o l t s b o r n
a s a r e s u l t of t h e 1 9 7 6 o r t h e 1 9 7 7
breeding. I t was e v i d e n c e d t h a t a
n i n e t y - t w o p e r c e n t ( 9 2 % ) c o l t c r o p would
be e x p e c t e d , however, i n l i g h t o f poor
range conditions a t t h e Miller ranch,
t o g e t h e r w i t h improper c a r e of the
animals, an e i g h t y p e r c e n t (80%) c o l t
c r o p s h o u l d b e t h e minimum e x p e c t e d .
That u t i l i z i n g t h e e i g h t y p e r c e n t (80%)
f i g u r e , t h e r e should have been a t o t a l o f
e l e v e n (11) c o l t s f o r t h e 1 9 7 6 b r e e d i n g
and a t o t a l o f t w e n t y - f o u r ( 2 4 ) c o l t s f o r
t h e 1977 b r e e d i n g . T h u s , t h e sum t o t a l
of c o l t s f o r t h e three-year breeding
would b e i n t h e number o f f i f t y ( 5 0 ) , o f
w h i c h e a c h s i d e would b e e n t i t l e d t o a
t o t a l of twenty-five (25) c o l t s each."

The D i s t r i c t C o u r t a l s o f o u n d t h a t W a t k i n s h a d r e c e i v e d two

of the colts and that the fair market value of a colt

r e g i s t e r e d w i t h t h e AQHA d u r i n g t h e time o f t h e c o n t r a c t was

Slp00. W f i n d t h e award f o r a c t u a l damages on t h e c o n t r a c t
e

t o be p r o p e r .

Watkins was awarded $627.14 as necessary costs in

p r o s e c u t i o n of t h i s lawsuit. W a t k i n s was n o t s p e c i f i c a l l y

awarded a t t o r n e y f e e s i n e i t h e r h i s d e f e n s e i n t h e c i v i l o r

criminal actions. Watkins submitted a memorandum of his

c o s t s which p r o v i d e d :

l. Clerk of C o u r t , f i l i n g of Motion
to Dismiss

2. Judgment

3. Deposition

4. S t e n o g r a p h e r ' s Fee

5. Witness fees:

A. B r a d Hamlet 88.00
Two days--$20.00
M i l e a g e f r o m Sun R i v e r , Montana--$68.00

B. Marge T a y l o r 61.14
Two days--$20.00
M i l e a g e f r o m J o r d a n , Montana--$41.14
 TOTAL COSTS AND DISBURSEMENTS $627.14
Section 25-10-201, MCA, provides that a party to whom costs
are allowed are entitled to include as costs:

"(1) the legal fees of witnesses, includ-
ing mileage, or referees and other
officers;
"(2) the expenses of taking depositions;

" (4) the legal fees paid for filing and
recording papers and certified copies
thereof necessarily used in the action or
on the trial;"
The costs awarded are allowed under section 25-10-201, MCA,
and are proper.
Watkins was awarded $30,000 on his counterclaim for

malicious prosecution and $25,000 as a result of libelous
and defamatory statements. Conclusion of Law 17 awards
$55,000 general damages to Watkins for loss of business and
damage to reputation. Watkins testified that his business
was damaged, that he incurred considerable attorney fees as
a result of the criminal proceedings, and that he suffered
humiliation and embarrassment as a result of the unfounded
criminal prosecutions. Watkins was arrested and required to
spend a night in jail. Watkins' son testified as to his
father's reputation and questions asked of him by others
involved in the horse breeding and trading business after
the criminal charges were filed.

In Keller v. Safeway Stores, Inc. (1940), 111 Mont.
28, 41, 108 P.2d 605, 612-613, this Court stated that it
would rarely revise damage awards for defamation. "Unless
the damages are so unconscionable as to impress the court
with its injustice and thereby induce the court to believe
that the jury was actuated by passion, prejudice or
partiality, it rarely interferes with the verdict. The

question of excessiveness of the verdict is p r i m a r i l y

addressed t o t h e d i s c r e t i o n of t h e t r i a l c o u r t . " While t h i s

is n o t a j u r y case, t h e q u e s t i o n of t h e damage a w a r d f o r
defamation is a m a t t e r of t h e d i s c r e t i o n of t h e t r i a l c o u r t .
W do f i n d s u b s t a n t i a l e v i d e n c e t o s u s t a i n t h e c o n c l u s i o n o f
e

t h e t r i a l c o u r t and w i l l therefore not i n t e r f e r e with the
d e c i s i o n of t h e lower c o u r t .
W a t k i n s was awarded $50,000 punitive damages for

intentional utterances. P u n i t i v e o r e x e m p l a r y damages a r e
a l l o w e d where the d e f e n d a n t h a s been g u i l t y of o p p r e s s i o n ,
fraud, or malice, actual or presumed, for the sake of
example and by way of punishing t h e defendant. Section
27-1-221, MCA. E x e m p l a r y damages s h a l l b e u s e d when t h e

d e f e n d a n t c l e a r l y shows t h a t h e i s d e s e r v i n g of s u c h s p e c i a l

t r e a t m e n t and punishment. I n Smith v. Krutar (1969), 153
Mont. 325, 457 P.2d 459, t h i s Court indicates t h a t wnere
a c t s a r e done w i l l f u l l y and t h e r e s u l t amounts t o f r a u d o r
oppression, p u n i t i v e d a m a g e s may be awarded under the

statute.
Bill and LaVonne W a t k i n s h a v e b e e n v i c t i m s o f false
accusations. The maker o f these accusations, Miller, knew

e a c h and e v e r y one of t h e a c c u s a t i o n s t o be f a l s e a t t h e
t i m e h e made them. Each and e v e r y o n e of the allegations
was made maliciously and viciously. Watkins has been
accused of criminal conduct. The allegations made are

s e r i o u s and d i r e c t l y a f f e c t h i s b u s i n e s s r e p u t a t i o n . These
a l l e g a t i o n s were r e p e a t e d over a p e r i o d of t h r e e y e a r s and
continued at the time of trial. The award of punitive

damages i s m e a n t t o make a n e x a m p l e a n d p u n i s h a p e r s o n s o
t h a t he w i l l cease t h i s t y p e of conduct i n t h e f u t u r e .

We find that the f a c t s of this case allow for the

a w a r d i n g o f p u n i t i v e damages.

We affirm.

W concur:
e
\ Jus ic

4&4
Chief J u s t i c e