No. 02-004
IN THE SUPREME COURT OF THE STATE OF MONTANA
2002 MT 336
EVALINE WETER A/K/A EVALEEN WETER,
Plaintiff, Respondent and Cross-Appellant,
v.
CHARLES E. ARCHAMBAULT, VITA A. ARCHAMBAULT,
AND ANY AND ALL OTHER PERSONS, UNKNOWN, CLAIMING
OR WHO MIGHT CLAIM ANY RIGHT, TITLE, ESTATE, OR
INTEREST IN OR LIEN OR ENCUMBRANCE UPON THE REAL
PROPERTY DESCRIBED IN THE COMPLAINT OR ANY THEREOF,
ADVERSE TO THE PLAINTIFF'S OWNERSHIP AND TITLE THERETO,
OR ANY CLOUD UPON THE PLAINTIFF'S TITLE THERETO,
WHETHER SUCH CLAIM OR POSSIBLE CLAIM BE PRESENT
OR CONTINGENT, INCLUDING ANY CLAIM OR POSSIBLE CLAIM
OF DOWER, INCHOATE OR ACCRUED, AND ANY PERSON IN
POSSESSION,
Defendants and Appellants.
APPEAL FROM: District Court of the Ninth Judicial District,
In and for the County of Glacier,
The Honorable Marc G. Buyske, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
Todd A. Stubbs, Graybill, Ostrem & Crotty, PLLP, Great Falls, Montana
For Respondent:
K. Dale Schwanke, Jardine, Stephenson, Blewett & Weaver, P.C., Great
Falls, Montana
Submitted on Briefs: July 11, 2002
Decided: December 20, 2002
Filed:
__________________________________________
Clerk
Justice Terry N. Trieweiler delivered the Opinion of the Court.
¶1 The Plaintiff, Evaline Weter, brought this action in the
District Court for the Ninth Judicial District in Glacier County to
quiet title to certain property and to recover damages from the
Defendants, Charles and Vita Archambault, for breach of contract.
Archambaults counterclaimed for breach of contract, equitable
relief and damages based on various tortious claims. Following a
non-jury trial, the District Court entered judgment which quieted
title to the property in favor of Weter, and awarded her attorney
fees. Archambaults appeal the District Court's Findings of Fact,
Conclusions of Law, Order and Judgment. Weter cross-appeals the
District Court's findings that she is not entitled to compensatory
damages for wrongful occupation and to punitive damages. We affirm
the judgment of the District Court.
¶2 There are four issues on appeal:
¶3 1. Did the District Court err when it concluded that
Archambaults' breach of contract entitled Weter to cancel the
contract and reclaim ownership and possession of the properties
subject to the contract?
¶4 2. Did the District Court err when it awarded reasonable
attorney fees to Weter?
¶5 3. Did the District Court err when it found that Weter was
not entitled to damages for wrongful occupation?
¶6 4. Did the District Court err when it found that Weter was
not entitled to an award of punitive damages?
3
FACTUAL AND PROCEDURAL BACKGROUND
¶7 Charles and Vita Archambault executed a Contract for Deed with
Evaline and the late Julian Weter on March 21, 1979, for the
purchase of personal property and approximately 3,218 acres of real
property including one ranch home tract and six individual farm
tracts, including tracts: "C" (320 acres), "D" (465 acres), "E" (5
acres), "F" (280 acres), "G" (320 acres) and "H" (unspecified
acreage). The original contract price was $680,000, which included
$100,000 for a ranch home and the land on which it was located.
Archambaults purchased the ranch home property separately and it
was no longer subject to the contract. The remaining tracts were
subject to a contract to purchase for $580,000 over 15 years.
Weters signed six separate warranty deeds which were held in escrow
pending payment pursuant to the contract and Archambaults signed
and delivered six separate quit claim deeds to escrow.
¶8 Archambaults fell behind in payments on several occasions, and
the Weters agreed to reform the agreements at least twice. The
last modification to the contract was signed by the Archambaults
and Evaline Weter on June 3, 1993, and included an integration
clause excluding all prior terms, negotiations, and/or signed
contracts. The 1993 Contract stated that the Archambaults owed a
principal balance of $532,904, and required that they pay (1)
$50,000 immediately; (2) $15,000 on October 1, 1993; (3) annual
installments of $40,000 and $20,000 on October 15 and March 1 of
each year, respectively, for 5 years; and (4) a final "balloon
payment" on March 1, 1999. The 1993 Contract also required that
Archambaults pay taxes on the property and assign payments from two
4
Conservation Reserve Program (CRP) contracts to Weter. The CRP
contracts provide payments to land holders who set land aside for
conservation purposes and requires that the land holders not grow
crops or permit grazing on those lands.
¶9 Pursuant to the contract, Archambaults made the initial
$50,000 payment, and in addition, sold tract "C" to Oscar Crawford
for $48,000 in June 1993. This sale was presumably authorized by
paragraph 3(b) of the 1993 Contract, which provides:
In the event that BUYERS desire certain portions of the
realty, the SELLER agrees to allow such sales and to
accept certain payments on the contract. The property as
described in each of the exhibits numbered C, D, E, F and
G may be sold as individual units as long as the minimum
total price as set forth on each of said exhibits is
applied to the contract balance. Thus, the SELLER will
release a Warranty Deed from the escrow for the property
described on each exhibit (C, D, E, F & G) so long as the
amount specified on each exhibit is paid as an extra pre-
payment on the contract . . . . [Emphasis added.]
The exhibit which accompanied the warranty deed for tract "C"
provided that it "may be deeded separately to the PURCHASERS upon
the payment of $48,000.00 to the principal of the Contract. . . ."
¶10 After the sale of tract "C," financial records show that
Archambaults failed to make any more payments on the 1993 Contract
except for two CRP payments for $41,931 each on October 28, 1993,
and October 7, 1994, and a $1814 "right of way payment" on August
25, 1994. By the time Weter served notice of default on the
5
Archambaults in June 1995, the total amount of past due payments
was approximately $50,000.
¶11 In March 1994, Archambaults decided that they would try to
sell tract "G" to pay off part of the 1993 Contract balance. The
exhibit which accompanied the warranty deed for tract "G" provided
that it "may be deeded separately to the PURCHASERS upon the
payment of $128,000.00 to the principal of the Contract . . . ."
Archambaults found a willing buyer, Rocky Mountain Specialists
(RMS), and agreed on a purchase price of $128,000 with a November
24, 1994, closing date. Weter, however, told Archambaults that
they owed $35,000 to bring the 1993 Contract current and that that
amount would have to be paid before Archambaults could transfer
tract "G." RMS later testified that they were willing to loan
Archambaults up to $35,000 to accomplish the sale, but that
Archambaults refused the offer. The sale did not occur.
¶12 On June 26, 1995, Weter provided the Archambaults with notice
of default. The 1993 Contract, in paragraph 10, provided three
alternate remedies for Weter to choose from in the case of default:
"Alternative I" (a remedy pursuant to breach of contract);
"Alternative II" (cancellation of the contract and forfeiture of
the contract property); or "Alternative III" (foreclosure on the
contract properties). Paragraph 10 further provided that
Alternative II, which Weter ultimately chose, would not be
available in the event that the principal balance owed on the 1993
Contract was $290,000 or less. At the time of default, the
outstanding principal balance was $408,070.82. Had the sale of
6
tract "G" occurred, Archambaults contend that the balance could
have been below $290,000.
¶13 Pursuant to Alternative II, Weter requested that the escrow
agent release the quit claim deeds previously signed by
Archambaults for tracts C, D, E, F, and G, and Weter recorded them
on September 13, 1995. Weter's attorney sent notice of the filed
quit claim deeds to the Archambaults that same day and stated "we
need to focus now on having you peacefully vacate the premises as
required pursuant to the terms of the contract." Weter also had
the CRP contracts transferred to her name.
¶14 In April 1996, Weter attempted to sell the remaining
properties to the Blackfeet Tribe, which was interested in the
purchase, but had concerns regarding Archambaults' presence on the
property and claim to the title for the properties. The Tribe
requested assurances that Archambaults would leave the property and
sign new quit claim deeds. Charles Archambault sent a letter to
the Tribe, dated April 16, 1996, stating:
In a phone conversation with Jim Kennedy [Director of the
Natural Resources Department of the Blackfeet Tribe]
yesterday, I discussed with him our plans to clear the
property. We are currently trying to sell the mobile
homes, as well as livestock, vehicles and equipment. I
indicated to Jim that we would be totally off the
property no later than late summer or fall. Jim assured
me that this would be acceptable, and that the Tribe
would work with us.
Archambaults, however, refused to sign any new quit claim deeds.
Without the deeds, the Tribe refused to purchase the properties and
the sale did not occur.
¶15 On June 25, 1996, Weter filed a complaint in the District
Court to quiet title to the properties. However, on July 8, 1996,
7
the Archambaults, who were enrolled members of Indian Tribes but
not the Blackfeet Tribe, brought suit against Weter in Blackfeet
Tribal Court for breach of contract. The Tribe held that it had
jurisdiction, and Archambaults moved to dismiss Weter's District
Court claim without prejudice, while the Tribal Court had
jurisdiction. The District Court granted Archambaults' motion.
¶16 After the District Court dismissed Weter's cause of action,
Weter brought an action in federal court to challenge the Tribe's
jurisdiction. The U.S. District Court agreed that the Tribe did
not have jurisdiction, and the Ninth Circuit Court of Appeals
affirmed the District Court on July 18, 2000. While the federal
case was pending appeal, Weter re-filed this quiet title action in
District Court on July 21, 1999. Weter raised additional claims
for attorney fees, wrongful occupation damages, and punitive
damages for Archambaults' alleged malicious prosecution of the
action in Tribal Court. In her wrongful occupation claim, Weter
alleged that, after notice of default, Archambaults refused to
vacate her property, entered into or continued cattle-grazing
leases on her property, and allowed cattle to stray onto Weter's
CRP lands, causing damage to the CRP lands and a CRP payment
deduction of $7092 in the fall of 1997.
¶17 A non-jury trial was held from November 13 to 15, 2000. On
July 3, 2001, the District Court issued its Findings of Fact,
Conclusions of Law, Order and Judgment. The Court found that Weter
was entitled to cancel the 1993 Contract pursuant to Alternative II
and awarded Weter attorney fees pursuant to the 1993 Contract. It
denied all other relief, including punitive damages and damages for
8
wrongful occupation. The District Court later quieted title to the
Weter properties and awarded $89,584 to Weter for attorney fees.
The District Court entered final judgment on July 6, 2001.
Archambaults appealed the District Court's final judgment, order
granting attorney fees, and order quieting title. Weter cross-
appeals the District Court's denial of damages for wrongful
occupation and punitive damages.
9
STANDARD OF REVIEW
¶18 We review a district court's conclusions of law to determine
if they are correct. Carbon County v. Union Reserve Coal Co., Inc.
(1995), 271 Mont. 459, 469, 898 P.2d 680, 686. We review the
district court's findings of fact to determine if they are clearly
erroneous. Hansen v. 75 Ranch Co., 1998 MT 77, ¶ 20, 288 Mont.
310, ¶ 20, 957 P.2d 32, ¶ 20. Similarly, we will not disturb the
trier-of-fact's findings that punitive damages are unavailable
unless they are clearly erroneous. See In re M.F.B., 2001 MT 136,
¶ 10, 305 Mont. 481, ¶ 10, 29 P.3d 480, ¶ 10. The district court's
findings of fact are clearly erroneous where not supported by
substantial evidence, where the court misapprehends the effect of
the evidence, or where this Court's consideration of the record
results in a firm conviction that a mistake has been made. In re
E.K., 2001 MT 279, ¶ 31, 307 Mont. 328, ¶ 31, 37 P.3d 690, ¶ 31.
DISCUSSION
ISSUE 1
¶19 Did the District Court err when it concluded that
Archambaults' breach of contract entitled Weter to cancel the
contract and reclaim ownership and possession of the properties
subject to the contract?
¶20 The District Court found that Weter was entitled to cancel the
1993 Contract pursuant to Alternative II in paragraph 10 of the
1993 Contract. The court found that the principal balance
outstanding at the time of default was greater than $290,000, and
that Archambaults had failed to make payments as agreed, or cure
the default after proper notice. In addition, the District Court
10
found that Archambaults were not excused from cancellation of the
contract because of the planned sale of tract "G" to RMS because
the contract required that Archambaults be current in their
payments on the contract prior to purchasing individual tracts.
The District Court stated:
The language of paragraph 3(b) of the 1993 agreement,
while not a model of clarity, is sufficiently plain, when
read in the context of the whole agreement, to support
the reasonable conclusion that before Defendants could
sell any of the designated tracts of land, the payments
due under the 1993 Contract had to be current. The
language extra pre-payment obviously implies a payment in
excess of what payments may otherwise be due. If
payments were not current, then any payment made would
first be used, according to the contract terms, to bring
the payments current, and would not, and could not, be
considered an extra pre-payment. Hence, by agreeing that
any amount received from the sale of the designated
tracts would be an extra pre-payment, the parties agreed
that the regularly due contract payments must be current
in order for the money received from the sale to be
considered an extra pre-payment. Plaintiff was therefore
within her rights under the contract to require the
contract to be current before agreeing to any sale of a
designated tract.
The District Court further found that Archambaults failed to comply
with § 28-1-104, MCA, which requires that a party requesting relief
11
from forfeiture make an offer to tender full payment of the
obligation owed, and ordered that the titles be quieted in Weter's
name.
¶21 Archambaults contend that the District Court misconstrued the
"clear and unambiguous" terms of paragraph 3(b) of the 1993
Contract. They contend that the provision permitted the proposed
sale of tract "G," and that Weter's prevention of that sale
breached the 1993 Contract and should preclude her from cancelling
the contract. Archambaults contend that the sale of tract "G"
would have reduced the principal balance below $290,000, and that
Weter is, therefore, not entitled to enforce the forfeiture
provision found at Alternative II in the 1993 Contract.
Archambaults also contend that paragraph 3(b) amounted to a
condition precedent which precludes Weter from cancelling the
contract. Finally, Archambaults invoke this Court's equitable
power, citing the factual circumstances of this case and the amount
they have invested in the properties.
¶22 Weter contends that the District Court correctly interpreted
paragraph 3(b), that it was not a "condition precedent" and that
the sale of tract "G" could have occurred had Archambaults brought
the outstanding balance current. Weter also contends that
equitable relief is not appropriate here because Archambaults have
possessed the property for less than the fair rental values during
the 20-year course of their possession.
¶23 There is little dispute that without the sale of tract "G,"
the outstanding contract balance was greater than $290,000 and
Alternative II was an available remedy. Therefore, we first
12
address whether the planned sale violated the terms of the 1993
Contract. When construing an instrument, "the intention of the
parties is to be pursued if possible." Section 1-4-103, MCA. The
role of the court is to "ascertain and declare what is in terms or
in substance contained therein, not to insert what has been omitted
or to omit what has been inserted." Section 1-4-101, MCA. "The
whole of a contract is to be taken together so as to give effect to
every part if reasonably practicable, each clause helping to
interpret the other." Section 28-3-202, MCA.
¶24 The provision most important to the sale of tract "G" is
paragraph 3(b) of the 1993 Contract, which provides:
In the event that BUYERS [Archambaults] desire certain
portions of the realty, the SELLER [Weter] agrees to
allow such sales and to accept certain payments on the
contract. The property as described in each of the
exhibits numbered C, D, E, F and G may be sold as
individual units as long as the minimum total price as
set forth on each of said exhibits is applied to the
contract balance. Thus, the SELLER will release a
Warranty Deed from the escrow for the property described
on each exhibit (C, D, E, F & G) so long as the amount
specified on each exhibit is paid as an extra prepayment
on the contract.
The exhibit for the warranty deed for tract "G," (which is one of
the exhibits expressly referred to in paragraph 3(b)) provides:
"[t]he following described property . . . may be deeded separately
to the [Archambaults] upon the payment of $128,000.00 to the
principal of the Contract." (Emphasis added.) Paragraph 3(b)'s
cross-reference to tract "G's" warranty deed and exhibit clearly
requires that the $128,000 be paid to the principal balance, rather
than a payment on the outstanding balance that includes outstanding
payments and accrued interest. Furthermore, pre-payment cannot be
13
"additional" until the amount of principal already due has been
paid. When paragraph 3(b) and the exhibit are read together, the
only reasonable interpretation of "extra pre-payment" is that it
means an additional payment to what the contract already requires.
Otherwise a breaching purchaser could sell the contract assets yet
remain in breach of the contract. We conclude that the District
Court did not err when it concluded that the sale of tract "G" was
not permitted by the terms of the 1993 Contract.
¶25 Since the sale did not comply with the 1993 Contract terms, we
also conclude that the District Court did not err when it found
that Weter had a contractual right to block the sale. Paragraph 5
of the 1993 Contract provides:
TITLE RETAINED BY SELLER. It is expressly understood and
agreed that title to said lands shall remain in the name
of SELLER until such time as all the terms and covenants
of this agreement have been fulfilled and performed by
BUYERS, and all the payments made, and only in the event
of such covenants, agreements and payments, shall BUYER
be entitled to the conveyance of title to the above-
described premises.
This paragraph expressly permits Weter to retain the title to all
of the contract properties unless Archambaults comply with the 1993
Contract provisions. Archambaults were in default, and the
proposed sale of tract "G" would not have cured that default.
Accordingly, Weter did not breach the agreement by refusing to
approve the proposed sale.
¶26 We further agree with the District Court that Archambaults
could not invoke the District Court's equitable powers pursuant to
§ 28-1-104, MCA. Section 28-1-104, MCA provides:
Whenever by the terms of an obligation a party thereto
incurs a forfeiture or a loss in the nature of a
14
forfeiture by reason of his failure to comply with its
provisions, he may be relieved therefrom upon making full
compensation to the other party, except in case of a
grossly negligent, willful, or fraudulent breach of duty.
We have previously held that in order to obtain relief pursuant to
§ 28-1-104, MCA, the party in breach must "attempt to make payment
of the entire contract balance within a reasonable time after
service of a notice of default. Only by making such full
compensation can a party be relieved from the forfeiture." Glacier
Park Co. v. Mountain, Inc. (1997), 285 Mont. 420, 427, 949 P.2d
229, 233. Weter served notice of default to Archambaults in June
1995 and there is no evidence that Archambaults made any offer to
pay the complete 1993 Contract balance. Only in Charles
Archambault's deposition in 1998 and at the 2000 trial was there
discussion regarding his willingness and ability to pay the
balance, but even then, there was no offer to do so. We conclude
the District Court did not err when it found that Archambaults
failed to comply with the requirements set forth in § 28-1-104,
MCA, and that Archambaults' breach of contract, therefore, entitled
Weter to cancel the contract and reclaim possession of the
properties subject to the contract.
ISSUE 2
¶27 Did the District Court err when it awarded reasonable attorney
fees to Weter?
¶28 The District Court concluded that the 1993 Contract permitted
the recovery of reasonable attorney fees "incurred in the pursuit
of the contract remedy [Weter] chose." The District Court also
found that Weter properly gave notice of default, as required by
15
the contract, and that Weter was therefore entitled to attorney
fees.
¶29 Archambaults admit that paragraph 10 of the 1993 Contract
permits the collection of attorney fees; however, they contend that
unlike Alternatives I and III, which expressly provide for
reasonable attorney fees, Alternative II, which Weter chose as her
remedy, does not include any. Weter concedes that Alternative II
does not provide for the fees awarded, but contends that the
additional language at the end of paragraph 10 in the 1993 Contract
specifically provided for reasonable attorney fees regardless of
the form of relief Weter chose.
¶30 Paragraph 10 in the 1993 Contract provides: "[i]n the event of
a default and notice as described above, the SELLER [Weter] shall
be entitled to receive a reasonable attorneys fee from the BUYERS
[Archambaults], regardless of which of the three alternatives are
elected." (Emphasis added.) We conclude that the 1993 Contract is
sufficiently clear, and provided for reasonable attorney fees to
the prevailing party regardless of the remedy that Weter chose to
pursue. Therefore, we conclude that the District Court did not err
when it awarded attorney fees to Weter.
ISSUE 3
¶31 Did the District Court err when it found that Weter was not
entitled to damages for wrongful occupation?
¶32 The District Court concluded that Weter had failed to prove
that Archambaults actually occupied Weter's property. The court
found that Archambaults' refusal to sign quit claim deeds and their
action in Tribal Court were not "wrongful occupation" in the sense
16
that our previous cases have recognized it. See Glacier Park, 285
Mont. 420, 949 P.2d 229; Goodover v. Lindey's, Inc. (1992), 255
Mont. 430, 843 P.2d 765; and Martin v. Randono (1978), 191 Mont.
266, 623 P.2d 959. The District Court stated that there was "no
evidence Defendants leased the property to other persons," and
found that Weter had successfully begun receiving CRP payments. In
addition, the District Court concluded that Weter's election of
Alternative II precluded her from damages for wrongful occupation
since her right to retain all sums paid pursuant to the contract
for Weter's "time, trouble and expenses" included damages of the
nature claimed.
¶33 On cross-appeal, Weter contends the District Court's findings
were clearly erroneous, and that the record was replete with
evidence that Archambaults wrongfully occupied her properties. She
cites testimony regarding an alleged contract between Charles
Archambault and Lyman Denzer to lease Weter's property for cattle
grazing. To prove damages for her wrongful occupation claim, Weter
testified that, although she never entered into a cattle-grazing
contract with Denzer, that Archambaults' lease of her property
denied her the opportunity to lease her property to Denzer for two
years at a rate of $13,500 per year. There was further testimony
and allegations that stray cattle on the CRP lands, resulting in a
CRP payment deduction, may have been cattle subject to the same
cattle-grazing leases. Finally, Weter claims that testimony and
other evidence regarding Archambaults' lawsuits and their refusal
to sign new quit claim deeds when the prior deeds proved
17
ineffective was sufficient evidence to prove wrongful occupation by
Archambaults.
¶34 Wrongful occupation damages are available pursuant to § 27-1-
318, MCA, which provides that: "[t]he detriment caused by the
wrongful occupation of real property . . . is deemed to be the
value of the use of the property for the time of such occupation .
. . ." We have held that the "[r]easonable rental value is a
proper estimation of the value of use of property." Goodover, 255
Mont. 430, 439, 843 P.2d 765, 770. We agree with the District
Court that actual occupation of Weter's land has not been clearly
established.
¶35 However, more importantly, we conclude that Archambaults had a
right to rely on Weter's choice of remedies pursuant to the
contract terms. The 1993 Contract provides that "the SELLER may,
at SELLER'S option, elect any one of the following alternatives:
[i.e. Alternative I, II, or III]." Alternative II expressly
provides that "[i]f the BUYERS do not immediately surrender
peaceable possession of all of said property, BUYERS shall be
guilty of unlawful detainer and liable for the full damages
allowable by law . . . ." Alternative II, however, does not
provide for damages for wrongful occupation, absent an action for
wrongful detainer.
¶36 Unlawful detainer claims require adherence to the requirements
set forth in §§ 70-27-101 through 212, MCA, including the service
requirements set forth in § 70-27-114, MCA. There is no evidence
in the record that Weter pursued a cause of action pursuant to the
requirements set forth in the unlawful detainer statutes. We also
18
note that the record contains substantial evidence that, with
respect to the CRP lands and tract "G," that Weter had no
difficulty retaining possession and obtaining rents from these
properties. If, as Weter alleges, Archambaults refused to quit the
property and would not leave, she should have employed the
procedural remedy set forth in Alternative II, an unlawful detainer
action. Instead, however, Weter selectively retained possession of
certain lands, and after years of litigation and Archambaults'
reliance upon the contract terms, Weter now suggests that she is
entitled to reasonable rents for the unspecified portions of
property leased to someone else. Her claim is inconsistent with
the remedies provided by the 1993 Contract. We conclude that the
1993 Contract provided an adequate remedy in the event Archambaults
unlawfully refused to leave Weter's property, and Weter failed to
exercise that remedy. Accordingly, we conclude the District Court
did not err when it concluded that Weter had not proven wrongful
occupation.
ISSUE 4
¶37 Did the District Court err when it found that Weter was not
entitled to an award of punitive damages?
¶38 The District Court concluded that punitive damages were not
applicable in this matter, stating:
The linchpin of Plaintiff's claim for punitive damages is
the pursuit by Defendants of an action in Blackfeet
Tribal Court with respect to the 1993 Contract. Given
that Defendants are Native Americans, albeit apparently
not members of the Blackfeet Tribe, and given the land in
question is located within the exterior boundaries of the
Blackfeet Indian Reservation, and given the rather
convoluted nature of case law precedent involving Indian
jurisdiction questions, it was not unreasonable for
19
Defendants to pursue that avenue of redress. That the
federal courts ultimately gave short shrift to the
jurisdiction arguments of Defendants does not persuade
this Court an award of punitive damages is appropriate on
this record. Finally, and most importantly, punitive
damages are a creature of statute in Montana, and the
statutory scheme clearly provides punitive damages cannot
be recovered in an action arising from contract as this
action obviously does.
¶39 Weter contends that the District Court clearly erred because
Archambaults' wrongful occupation and meritless claims in tribal,
state and federal courts entitle her to damages pursuant to § 27-1-
221, MCA. Weter contends that the suit in tribal court
demonstrates the requisite malice for punitive damages, and that
Archambaults' alleged cattle leases and wrongful occupation further
demonstrated malice. On the other hand, Archambaults claim that
although the case they brought in tribal court was ultimately
unsuccessful, it was not maliciously brought, that they did not
wrongfully occupy Weter's property, and that punitive damages are
expressly prohibited in contract disputes.
¶40 We recognize that § 27-1-220, MCA, prohibits punitive damages
arising from breach of contract. However, § 27-1-221, MCA, does
permit an award of punitive damages where the claimant proves by
clear and convincing evidence that the defendant is guilty of
"actual fraud or actual malice," outside the contract context.
"Actual malice" means:
the defendant has knowledge of facts or intentionally
disregards facts that create a high probability of injury
to the plaintiff and:
(a) deliberately proceeds to act in conscious or
intentional disregard of the high probability of injury
to the plaintiff; or
(b) deliberately proceeds to act with indifference to the
high probability of injury to the plaintiff.
20
Section 27-1-221(2), MCA. Weter claims that Archambaults filed
malicious claims and defenses in this and other civil proceedings.
However, we agree with the District Court that there was
insufficient evidence that Archambaults acted with "actual malice"
towards Weter. Nor have we been referred to any record of the
tribal or federal cases. Therefore, we conclude that the District
Court was not clearly erroneous when it found that Weter was not
entitled to an award of punitive damages.
¶41 For the foregoing reasons, the District Court's Order is
affirmed.
/S/ TERRY N. TRIEWEILER
We Concur:
/S/ W. WILLIAM LEAPHART
/S/ JAMES C. NELSON
/S/ PATRICIA COTTER
21
Justice Jim Rice concurring in part and dissenting in part.
¶42 I concur with the Court’s analyses and holdings on Issues 1, 2 and 4. I dissent from
the Court’s holding on Issue 3. I would hold that the District Court’s finding that there was
no evidence of wrongful occupation was clearly erroneous, given the evidence to the
contrary, particularly Charles Archambault’s own testimony that he had continued to reside
on the property and had leased the property to Lyman Denzer, and the evidence of haying
and grazing of the property by third parties allowed by Archambaults, which resulted in
Weter’s loss of CRP funds.
¶43 I disagree that these damages could be obtained only by filing
a separate wrongful detainer action. Archambaults were
contractually liable for the “full damages allowable by law” for
failing to immediately surrender peaceable possession. Clearly,
they failed to do so. While the damages caused thereby were
recoverable within an unlawful detainer action, I would hold that
they were properly sought within Weter’s action here, and would
reverse the District Court on that issue.
/S/ JIM RICE
22