Schillinger v. Brewer

                                             No.    84-409

                  I N THE SUPREME COURT OF THE STATE O F MONTANA

                                                    1985




LEON S C H I L L I N G E R and AGRI-STRUCTURES,
INC. ,
                               P l a i n t i f f s and A p p e l l a n t s ,

           -vs-
KEVIN BREWER,

                               D e f e n d a n t and R e s p o n d e n t .




APPEAL FROM:       D i s t r i c t C o u r t of t h e S i x t e e n t h J u d i c i a l D i s t r i c t ,
                   I n and f o r t h e C o u n t y of R o s e b u d ,
                   The H o n o r a b l e A l f r e d B. C o a t e , Judge p r e s i d i n g .


COUNSEL O F RECORD:


         For Appellants:

                   C a t e Law F i r m ,     B i l l i n g s , Montana


         F o r Respondent:

                   Brown & Huss,           M i l e s C i t y , Montana




                                             S u b m i t t e d on B r i e f s :    Jan. 24, 1 9 8 5

                                                                  Decided:        April 2,




Filed:
Mr. Chief Justice J. A. Turnage delivered the Opinion of the
Court.
       Plaintiff appeals from judgment for plaintiff on a
foreclosure of a mechanic's lien entered by the District
Court of the Sixteenth Judicial District, Rosebud County.
After a rejected offer of settlement, the judge following
trial found for plaintiff with an offset for defendant that
resuced the judgment below the amount of the offer.          The
court granted attorney fees as costs to defendant after the
date of the offer, as stipulated to by counsel, and reduced
the   award   further.     Plaintiff represented by    substitute
counsel moved to alter or amend or to set aside the judgment.
At hearing, the court denied plaintiff's motion and assessed
further attorney fees as costs to the plaintiff.
       We reverse the award of attorney fees to defendant and
remand for appropriate proceedings.       We hold that respondent
was entitled by law only to costs and not attorney fees after
the March 8, 1983, rejected offer of settlement, pursuant to
Rule 68, J I . . i . .
          !IFCvP         Appellant, in prevailing in establishing
his lien, is entitled to costs up to t,he date of the March 8,
1983, rejected offer and to a reasonable attorney fee for t.he
entire action in the District and Supreme Courts, pursuant to
§   71-3-124, MCA. On remand the court is to consider evidence
on the reasonableness of attorney fees and to assess 1-egal
interest based upon the initial unadjusted award.
       Appellant has raised the following issues on appeal:
        (1)   Does Rule 68, M.R.Civ.P.,    which allows costs to
offeror after date of a rejected offer if final judgment is
less than offer, include attorney fees as costs in a foreclo-
sure of a mechanic's lien?
          (2)      Is     the        appel-lant       bound   by     stipulation         of    his

c o u n s e l where t h e r e i s an e r r o r t i m e l y b r o u g h t t o t h e a t t e n -

t i o n of t h e c o u r t ?

         Leon       Schillinger            and       Agri-Structures,         Tnc.,     entered

i n t o a c o n t r a c t w i t h Kevin Brewer f o r t h e s a l e and c o n s t r u c -

t i o n of t h r e e m e t a l g r a i n b i n s .        Brewer made a down payment

of    $2,600 on a $17,400 p u r c h a s e p r i c e .                The c o n t r a c t c a l l e d

for    c o m p l e t i o n by        August     1,    1982.      Although n o t         complete

u n t i l August 1 5 ,          1982, p a r t i e s o r a l l y a g r e e d t o proceed. on

the contract.              B r e w e r t h e n r e f u s e d t o pay t h e b a l a n c e of t h e

p u r c h a s e p r i c e , c l a i m i n g t h a t p l a i n t i f f s had n o t p l a c e d "two

strains       of    rebar"           in   the    concrete        foundation        as    agreed.

P I - a i n t i f f s added r e b a r t o a c o n c r e t e c o l l a r around t h e b i n s .

Brewer c o n t i n u e d t o r e f u s e t o pay.

         P l a i n t i f f s f i l e d a mechanic's           l i e n on t h e t h r e e g r a i n

b i n s on October 26,                1982, and sued t o f o r e c l o s e on J a n u a r y

11, 1983.          On March 8 , 1983, p u r s u a n t t o Rule 68, M.R.Civ.P.,

d e f e n d a n t o f f e r e d t o a l l o w judgment t o h e t a k e n a g a i n s t him

in    the    amount        of     $12,250,        together       with    costs     accrued      to

p l a i n t i f f s t-o t h e d a t e of t h e o f f e r .       Plaintiffs rejected the

o f f e r and proceeded t o t r i a l .

         The c o u r t i n i t s f i n d i n g s o f          f a c t and c o n c l u s i o n s of

Law on J u n e 7 , 1984, s t a t e d t h a t t h e c o n s t r u c t i o n and r e p a i r s

were n o t done i n a workman-like manner and t h a t r e p a i r o f t h e

b i n s t o s u i t t h e i r purpose would c o s t $7,200.                   Thus d e f e n d a n t

owed $1-4,800 on t h e o r i g i n a l p u r c h a s e p r i c e l e s s $7,200 f o r

t h e c o s t of        r e p a i r s f o r a b a l a n c e of     $7,600 p l u s i n t e r e s t ,

allowable c o s t s ,           and a t t o r n e y f e e s t o p l a i n t i f f a s t h e p r e -

vailing       party        in    a    lien      foreclosure.          The    court      reserved

d e c i s i o n on t h e f i n a l award b e c a u s e " p u r s u a n t t o Rule 68, t h e

d e f e n d a n t may n o t be l i a b l e f o r c o s t s . "
      Counsel for both parties stipulated. on June 27, 1.984,
at the entry of judgment to costs and attorney fees, allowing
defense counsel fees as costs after the date of the rejected
offer. Contending that plaintiff was bound by the act of his
counsel when entered on record, respondent later claimed that
the stipulation of June 27, 1984, and the judgment entered on
the stipulation correctly included attorney fees as costs in
a mechanic's lien foreclosure.     In fact, the stj-pulation
mentions only the adjusted amount but apparently incorporates
the defendant's bill of costs.     The entire text follows:
           "COME NOW,  ...   , as attorney for the
           above named Plaintiffs, a.nd  ...     as
           attorney for the above named Defendant,
           and stipulate and agree that Judgment
           can be entered for the Plaintiff against
           the   Defendant   in   the   amount   of
           $5,776.69."
      Upon receiving service of notice of entry of judgment,
piaintiff sought new counsel who filed a timely motion to
alter or amend the judgment or to grant relief from the
judgment because of the m.istake allowing attorney fees to
defendant and denying fees to plaintiff after the date of the
Rule 68 offer.    Following hearing, the court denied the
motion and issued its order concluding that attorney fees are
included in costs in the foreclosure of mechanic's liens and
granting the defendant additional attorney fees.
      Issue - -
            No. 1.   Attorney - -as "costs"?
                              fees                 Respondent
contends that costs include attorney fees in lien forecl-osure
actions.   In reading the lien foreclosure statute, however,
we find no language to subsume fees under costs.
           "Filing costs and attorneys' - -to be
                                         fees -
           recovered on foreclosure of liens.    In
           an action to foreclose anTof
                                    d
                                          the liens
           provided for by parts 3, 4, 5, 6, 8, or
           10 of this chapter, the court must allow
           as costs the money paid for filing and
           recording the lien - a reasonable
                                 and
              attorney's fee in the district and
              supreme courts, and such costs -    and
              attorneys' fees must be allowed to each
              claimant whose lien is established, and
              such reasonable attorneys' fees must be
              allowed to the defendant against whose
              property a lien is claimed if such lien
              be not established." Section 71-3-124,
              MCA. (Emphasis added. )
The statute distinguishes between fees and costs.                Defendant
is entitled to fees only if the lien is not established,
i.e., only if defendant prevails.          Here, appellant prevailed
and is entitled to attorney fees for the entire action.
      The language of the lien foreclosure statute refutes
respondent's argument that fees are costs under Rule 68,
M.R.Civ.P.,    which only mentions "costs":
              "Offer of judgment.      ...An offer not
              accepted-shall  be deemed withdrawn and
              evidence thereof is not admissible
              except in a proceeding to determine
              costs. If the judgment finally obtained
              by the offeree is not more favorable
              than the offer, the offeree must pay the
              costs incurred after the making of the
              offer. .  . ." Rule 68, M.R.Civ.P.
In an endeavor to make an exception to the general rule,
respondent notes that attorney fees may or may not be includ-
ed in the bill of costs.
              "Inclusion of attorney's - -in bill of
                                              fees - -
              costs. ~ h e a t t o r n e ~ lfees mentioned in
                                            s
              30-9-511,     71.-1-233,        71-3-124,   a.nd
              25-10-303 need not be included in the
              cost bill if they are made a part of the
              judgment. "      Section 25-10-302, MCA.
The bill of costs, however, includes more than costs, and
does not render fees synonymous with costs.
              "Eill of costs.
               - -                The party in whose
              favor judgment is rendered and who
              claims his costs must deliver to the
              clerk and serve upon the adverse party
              . ..  a memorandum of the items of his
              costs - necessary disbursements in the
                    and
              action or proceeding        ..
                                          .'
                                           I    Section
              25-10-501, MCA. (Emphasis added.)
Neither statute says that fees are costs, only that fees may
he excluded from the bill of costs if made a part of the
judgment in specified actions where fees are allowed.
        By statute costs generally allowable do not include
attorney fees.
               "Costs generally allowable. A party to
               whom costs are awarded. in an action is
               entitled to include in his bill of costs
               his necessary disbursements, as follows:
               " (1) the legal fees of witnesses, in-
               cluding mileage, or referees and other
               officers;
               "(2) the expenses of taking depositions;
               "(3) the legal fees for publication when
               publication is directed;
               " 1 4 ) the legal fees paid for filing and
               recording papers and. certified copies
               thereof necessarily used in the action
               or on the trial;
               " (5) the legal fees paid stenographers
               for per d-iem or for copies;
               " (6) the reasonable expenses of printing
               papers for a hearing when required by a
               rule of court;
               "(7) the reasonable expenses of making
               transcript for the supreme court;
               " (8) the reasonable expenses for making
               a map or maps if required and necessary
               to be used on trial. or hearing; and
               "(9) such other reasonable and necessary
               expenses as are taxable according to the
               course and practice of the court or by
               express provision of law."       Section
               25-10-201, MCA.
"With certain limited exceptions, we have held the list to be
exclusive.      Attorney fees are not one of the exceptions."
Cook v. Harrington        (Mont. 1983), 661 P.2d    1287, 1288, 40


        We ha.ve indicated that certain cases, however, will be
taken    out   of   the   operation of   this   statute by   special
statute, by stipulation of the parties, or by rule of court.
Masonovich v. School District                 &   Teachers Local 332 !1978),
178 Mont. 138, 140, 582 P.2d 1234, 1235.                     Here the statutes
relied upon do not equate attorney fees with costs by any
express provision.             We hold the court in error to rule that
attorney    fees   are         costs     in   mechanic's     lien   foreclosure
actions.
       Issue - - 2:
             No.               Stipulation - counsel adequate - -
                                           of                 to make
attorney -- costs?
         fees into                     Respondent claims that parties are
bound by the stipulation of counsel once entered upon the
record, relying on S 37-61-401, MCA:
              "Authority of attorney. (1) An attorney
              and counselor has authority to:
              "(a) bind his client in any steps of an
              action or proceeding by his agreement
              filed with the clerk or entered upon the
              minutes of the court and not otherwise
              ...   I1




Respondent cites case law where parties negotiated and signed
a stipulation as compromise of a settlement and then later
applied for their day in an adversary administrative proceed-
ing.   Smith v. Baxter (1966), 148 Mont. 291, 419 ~ . 2 d752.
There parties were bound., because the stipulation once en-
tered became a final judgment on the merits with prejudice
and barred the action in another forum.
       Section 37-61-401, MCA, was drafted not to bind clients
irrevoca.bly to          any    action    the     attorney   enters upon   the
record.    Rather, this statute found in the chapter regulating
the practice of attorneys enables an attorney to act on
behalf of his client and to make his actions part of the
record.    His act.ion binds the client at tha.t step of the
proceeding.     In this case it does not prevent the attorney
from resorting to any other actions or remedies allowed at
law.
       Followj-ng the notice of entry of judgment by stipula-
tion, appellant made a timely motion for relief from judgment
under F.ule 60 (b), P.'I.R.Civ.P., or alternatively, to alter or
amend the judgment under Rule 59(g), M.R.Civ.P.         A judgment

by stipul.ation is as binding as any judgment or verdict, no
more or less.   Appellant argues that if nothing else, it was
a mistake of counsel to enter into a stipulation which was
erroneousl-y against the interest of his client without the
consent of the client, and for this mistake he should be
excused from the judgment und.er Rule 60 (b)(1) , M.R.Civ.P.
Respondent argues that a mistake of law is not a "mistake" of
excusable   neglect   or   inadvertence under    Rule   60(b)   and
therefore prevents relief from judgment.   Uffleman v. Tabbitt
(1968), 152 Mont. 238, 244, 448 P.2d      690, 693; Schmidt v.
Jomac, Inc. (Mont. 1982), 639 P.2d 517, 519, 39 St.Rep. 130,
132.
       This "mistake of law," however, is attributable not
only to appellant's attorney, but also to respondent's attor-
ney and to the trial court.        This "mistake" is an error
inherent in the proceedings.       Appellant's    first attorney
admitted at the hearing on the motion for relief from or
amendment of judgment that he still held the opinion that
costs included attorney fees in a mechanic's lien action.
The court in its order following the hearing on the motion
erroneously concluded that attorney fees were costs in a
mechanic's lien foreclosure.      Based on that error and not
upon the stipulation of the attorneys, the court denied the
motion to set aside or to alter or amend the award of attor-
ney fees.
         We    h o l d t h e 1-ower c o u r t i n e r r o r        for its failure t o

a l t e r o r amend t h e judgment upon a t i m e l y a p p l i c a t i o n where
t h e judgment was c l e a r l y e r r o n e o u s .        The c o u r t was r e s p o n s i -

b l e f o r a correct appl-ication of                    t h e 1-aw i n a c c e p t i n g t h e

s t i p u l a t i o n and l a t e r i n r u l i n g on w h e t h e r t o a l t e r o r amend
t h e judgment t h e r e b y e n t e r e d .      I n e r r o r , t h e c o u r t concl-uded

t h a t c o s t s i n c l u d e d a t t o r n e y f e e s i n a. l i e n f o r e c l o s u r e and

s o s t a t e d i n i t s f i n a l ord.er.
         R e v e r s e d and remanded.




W e concur:

     n