author: JUSTICE GRAY JUSTICE TRIEWEILER JUSTICE McDONOUGH

text:
    JOE TEMPLE, Plaintiff and Appellant, v. CHEVRON U.S.A. INC., a corporation, CHEVRON INDUSTRIES, INC., a corporation and MANVILLE SALES CORPORATION, a Delaware corporation, Defendants and Respondents.
    No. 91-139.
    Submitted on briefs Apr. 30, 1992.
    Decided July 30, 1992.
    49 St.Rep. 661.
    840 P.2d 561.
    254 Mont. 455.

      For Appellant: Gene R. Jarussi, Jarussi & Bishop, Billings.
    For Respondent: Jeanne M. Bender and Kyle A. Gray, Holland & Hart, Billings.
   JUSTICE GRAY

delivered the Opinion of the Court.

Appellant Joe Temple appeals the order and judgment of the Thirteenth Judicial District Court, Stillwater County, dismissing his complaint styled as an Equitable Bill of Discovery. We affirm.

We restate the issues on appeal as follows:

1. Is a cause of action known as an equitable bill of discovery cognizable under Montana law?

2. Did the District Court err in dismissing appellant’s complaint for an equitable bill of discovery pursuant to Rule 12(b)(6), M.R.Civ.P.?

Joe Temple was employed by Chevron Resources Company as an equipment operator and was working in the Stillwater Mine on April 4, 1990, when an underground train backed into and ran over him. He sustained physical injuries as a result of the incident and is being paid workers’ compensation disability benefits by his employer.

On June 21, 1990, Mr. Temple filed a complaint for an Equitable Bill of Discovery in the Thirteenth Judicial District Court, Stillwater County, Montana; an amended complaint was filed on August 15, 1990. The named defendants, respondents herein, were Chevron U.S.A., Inc. (Chevron), Chevron Industries, Inc. (Industries) and Manville Sales Corporation (Manville). Chevron and Manville are partners in the Stillwater Mining Company which owns the Stillwater Mine; Chevron is the managing partner. Chevron engaged Industries to perform the actual management functions at the mine. Those functions are carried out by Chevron Resources Company (Resources), Mr. Temple’s employer, which is a division or subsidiary of Industries.

Mr. Temple’s complaint described the nature of the accident and alleged that, as a result of that accident, Mr. Temple may have a cause of action against one or more of the defendants. He claimed that there was relevant evidence within defendants’ control, to which he did not have access, which would identify the causes of the accident and the entities against which he may have a claim. These documents, the complaint alleges, include investigation reports, records describing the legal relationships between defendants and information about the underground train. Mr. Temple further alleged that the information he sought by the equitable bill of discovery was necessary in order for him to thoroughly investigate the circumstances surrounding his accident, as mandated by Rule 11, M.R.Civ.P.

In his prayer for relief, Mr. Temple sought copies of any investigative reports prepared by defendants as a result of his accident and records which would describe the relationship of the various defendants with regard to the operation of the Stillwater Mine. He also sought any information in defendants’ possession which would identify the manufacturer, distributor, and owners of the cars and engine of the train that ran over him.

Defendants objected to the discovery sought and moved to dismiss the complaint because it failed to state a cause of action cognizable under Montana law. Defendants asserted that the discovery sought was not authorized by Montana’s Rules of Civil Procedure.

The District Court granted defendants’ motion to dismiss for failure to state a claim for which relief could be granted. The court rejected Mr. Temple’s argument that Rule 11 prevented him from filing a complaint against any of the defendants without the requested discovery. The District Court concluded that, “while there may be some set of circumstances where an action that might be denominated an equitable bill of discovery would be proper, the pleadings here do not constitute such a bill, nor do they conform to the Rules of Civil Procedure.” Mr. Temple appealed.

1. Is a cause of action known as an equitable bill of discovery cognizable under Montana law?

Appellant argues that, while he may have a claim based on his injuries of April 4,1990, he does not know the theory upon which the claim would be based or the party against which any claim should be asserted because all of the information necessary to make those determinations is in the exclusive possession of the corporate respondents. He further alleges that if he does file a claim against respondents without knowing all of the underlying facts, he risks sanction under Rule 11 for filing a claim which is not well grounded in fact. It is appellant’s position that Montana’s courts should exercise their equitable jurisdiction under Article VII, § 4 of the Montana Constitution to recognize an independent action known as an equitable bill of discovery such as has been recognized in a few other jurisdictions.

Respondents assert that the equitable bill of discovery is precluded by the Montana Rules of Civil Procedure. They rely specifically on Rule 8(a) which requires that a complaint contain a statement showing entitlement to relief, and Rule 34(c) which permits independent actions for discovery but, according to the respondents, contemplates an action in existence to which an independent action for discovery under the Rule must be related. Respondents also argue that Mr. Temple could conduct his discovery by simply suing them for damages or by proceeding under Rule 27(a), M.R.Civ.P., which they assert allows depositions to be taken for perpetuation prior to the commencement of an action. Finally, it is respondents’ position that an independent action for discovery is impermissible under this Court’s decisions.

The equitable bill of discovery was the primary means of discovery prior to the adoption of modern rules of civil procedure. Courts which have addressed the issue of whether modern rules of civil procedure totally supersede the equitable bill of discovery are divided.

Some courts have held that the equitable bill has been rendered obsolete by current systems of pleading and practice. See Guertin v. Guertin (Ill. App. Ct. 1990), 561 N.E.2d 1339; Rothery Storage and Van Co. v. Atlas Van Lines (N.D. Ill. 1985), 609 F.Supp. 554; News and Observer Publishing Co. v. North Carolina (N.C. 1984), 322 S.E.2d 133. The conclusion in these cases is that the need for the equitable bill of discovery was eliminated by adoption of modern rales of civil procedure which include liberal discovery rules.

Other courts have recognized that there may be limited circumstances and situations, not covered by the modem rules, in which equity may require the availability of the equitable bill of discovery. As stated by the Supreme Judicial Court of Maine:

Although modern discovery rales and liberal pleading requirements virtually eliminate the need to resort to an independent action in the form of an equitable bill of discovery, they do not totally displace the traditional equitable jurisdiction of the ... [courts] to issue appropriate orders for independent discovery when effective discovery cannot otherwise be obtained and the ends of justice are served. See, e.g., Reilly Tar Corp. v. Burlington N.R.R., 589 F.Supp. 275, 282 (D.Minn. 1984); Folsom v. Western Elec. Co., 85 F.R.D. 651, 653 (W.D.Okla. 1980); Arcell v. Ashland Chemical Co., 152 N.J.Super. 471, 378 A.2d 53, 70-71 (1977); see also Wimes v. Eaton Corp., 573 F.Supp. 331, 335-37 (E.D.Wisc. 1983); Pomeroy, § 207(b), at 345 (equity court has inherent power to permit inspection in appropriate circumstances).

Shorey v. Lincoln Pulp & Paper Co., Inc. (Me. 1986), 511 A.2d 1076, 1078, (emphasis added; footnote omitted). We agree with the reasoning of the Maine court.

Respondents’ arguments that the Montana Rules of Civil Procedure preclude an equitable bill of discovery altogether are not persuasive. First, nothing in the Rules specifically prohibits such an action. Rules 3 and 8(a) require the filing of a complaint showing entitlement to relief and demand for judgment. Those requirements can be met by filing a complaint for an equitable bill of discovery which meets the requirements discussed herein.

Respondents’ reliance on Rule 34 is similarly misplaced. It is true that Rule 34 applies only to parties in existing litigation and Rule 34(c), while not precluding an independent action against a non-party, does not by itself authorize a court to order discovery from a non-party. On the other hand, nothing in Rule 34(c) prohibits recognition of an equitable bill of discovery in circumstances where the discovery is necessary, is not otherwise obtainable, and serves the interest of justice. We conclude that the Montana Rules of Civil Procedure do not preclude the equitable bill of discovery.

Respondents also assert that the equitable bill of discovery is impermissible under this Court’s decisions in Japp v. District Court of Eighth Judicial Dist. (1981), 191 Mont. 319, 623 P.2d 1389, and State, ex rel. Pitcher v. District Court (1943), 114 Mont. 128, 133 P.2d 350. This argument is without merit.

In Japp, the district court allowed discovery not provided for by the Rules, namely a private interview. We granted a writ of supervisory control and vacated the district court’s allowance of such an interview:

We conclude therefore, that a District Court, in allowing and enforcing discovery in litigation before it, must relate the discovery to one of the methods provided in Rule 26(a), M.R.Civ.P. Any attempt to enforce a method of discovery not provided by the Montana Rules of Civil Procedure is outside the power of the District Court.

Japp, 191 Mont. at 324, 623 P.2d at 1392 (emphasis added). As is clear from our stated conclusion, the District Court had litigation before it and, in that context, went outside the Rules to allow discovery not specifically provided for in the Rules. This significant factual difference between Japp and the instant case makes our conclusion in Japp inapposite here.

Nor does our decision in Pitcher preclude an equitable bill of discovery. In Pitcher, a district court order allowed a party to conduct a discovery deposition and examination of books and records prior to commencing litigation, pursuant to a rule of procedure similar to Rule 27(a), M.R.Civ.P., which authorized perpetuation of testimony in anticipation of litigation. The applicant who sought to conduct the discovery deposition alleged that he would be the plaintiff in a lawsuit and that the person from whom he sought discovery would be the defendant. He alleged that the deponent owed him money for work, labor, and services rendered, and specified that there was an amount in excess of $1,000 due.

We concluded in Pitcher that:

The petitioner has ample remedy by proper procedure. He says that the witness is indebted to him on an account for labor and services in a twenty-four year period of emplo yment on which there is owing to him upwards of $1,000. He does not need to examine the witness nor the books to determine the exact amount. He can sue for $1,000 and after action commenced he may then have inspection of the books before trial. Upon the trial a reference can be ordered if necessary in the examination of the account for the establishment of facts in connection therewith. In so proceeding the petitioner would obtain the evidence he is entitled to have, and in an orderly and lawful manner, and the adverse party would not be put at a disadvantage, but would be in a position to maintain his rights as the law provides.

Pitcher, 114 Mont. at 140, 133 P.2d at 353. We held that the statute at issue was not intended to be a discovery statute and that the district court’s order would authorize the examination of books and records in a manner not authorized by law.

Neither the facts in Pitcher nor the law on which that decision was based is similar to the case before us. If anything, Pitcher is authority for the proposition that appellant cannot take the depositions he seeks to take in this case pursuant to Rule 27(a), M.R.Civ.P.

We have reviewed the authorities provided to us by appellant and respondents. We conclude that, while modem rules of pleading and practice virtually eliminate the need for an equitable bill of discovery, the better reasoned approach is to recognize and allow an equitable bill of discovery under certain limited circumstances.

The foregoing analysis and conclusion brings us to the question of the circumstances under which a complaint for an equitable bill of discovery will be recognized in Montana courts. The question includes appropriate party defendants in an equitable bill, information which may be sought, and procedural requirements.

The courts which recognize the equitable bill are not in agreement as to proper party defendants in such an action. Florida cases generally apply the equitable principle that a person with no interest in the action, or who is merely a witness, cannot be made a party to an equitable bill of discovery. First Nat. Bank of Miami v. Dade-Broward Co. (Fla. 1936), 171 So. 510, 511. See also Poling v. Petroleum Carrier Corporation (Fla. 1967), 194 So.2d 925 (dismissing from an equitable bill an employer which could not be a defendant in the contemplated lawsuit because of workers’ compensation exclusivity). Other courts have recognized the equitable bill against persons or entities which cannot be defendants in the prospective legal action. Shorey, 511 A.2d 1076; Lubrin v. Hess Oil Virgin Islands Corp. (D. Virgin Islands 1986), 109 F.R.D. 403. See also Investors Mortg. Ins. Co. v. Dykema (D. Or. 1984), 598 F.Supp. 666 (allowing equitable bill against individuals not parties to an existing lawsuit). We find guidance in this regard and in regard to other appropriate limitations on the equitable bill of discovery in Shorey and Lubrin.

In Shorey, the injured worker filed his equitable bill solely against his employer, an entity which could not be a party in the worker’s potential action against an equipment manufacturer because of the exclusivity of the Maine Workers’ Compensation Act. In addition, the worker sought only to inspect the machine which caused his injuries; he had requested permission to do so, but his employer refused the request. The Maine court noted that the worker could not proceed under Rule 34, which allows for entry on land to inspect, precisely because the employer could never be a party to an action against the equipment manufacturer; nor could he proceed under Rule 34(c) which does not authorize an independent action for discovery. Thus, on the basis of the noted facts and as discussed above, that court concluded that an equitable bill was available because the discovery sought could not otherwise be obtained.

Similarly, in Lubrin an injured worker sought from his employer the name of the manufacturer or supplier of the equipment involved in his work place accident, an on-site visit to help him identify such entity and to inspect the site of the accident, and the deposition of one of his employer’s representatives to determine the suppliers and manufacturers of the involved equipment. These requests were denied and the worker filed an equitable action against his employer to obtain the on-site visit and to conduct a Rule 30(b)(6) deposition for the noted purpose. It appeared to the United States District Court that the worker would be unable to identify the manufacturer or supplier of the equipment without the assistance of his employer, a non-party in the potential lawsuit. As a result, the court recognized the equitable action with respect to the onsite visit as the kind of independent action contemplated by Rule 34(c), F.R.Civ.P.

The defendants in the equitable discovery actions in both Shorey and Lubrin were the employers, the very entities which could not become defendants in the potential actions. In addition, the discovery sought was limited, in essence, to assistance in determining the identity of potential defendants. Finally, requests for the limited discovery sought had been made and denied. We are persuaded that these circumstances provide appropriate parameters for the availability of an equitable bill of discovery in Montana.

We note, in this regard, our concern with regard to constitutional problems which could arise if an equitable bill of discovery could be brought against potential defendants. While we have determined that Pitcher does not prohibit the equitable bill, it does suggest the constitutional difficulties inherent in forcing a potential defendant to produce records in advance of the commencement of litigation. We stated:

The proceeding launched by the petitioner is what the courts have often spoken of as a fishing expedition, in this instance having for its purpose the discovery of facts and information as the basis for litigation. The relator is under compulsion to come with all his books and records, expose everything he has that tells the story of his business for twenty-five years, submit it all to the scrutiny of the man who is planning a lawsuit against him. Clearly this would be a violation of the relator’s right to security against unlawful search and seizure of his papers and effects, and cannot be allowed.

Pitcher, 114 Mont. at 139, 133 P.2d at 353, (emphasis added).

We hold, therefore, that an equitable bill of discovery is cognizable under Montana law, but that it is available only against a person or entity which cannot be a defendant in subsequent litigation. Further, the equitable bill is available for the names and addresses of potential defendants and for on-site visits to inspect specific items which may have caused a documented injury. Finally, a plaintiff in an equitable bill action must show that the discovery requested cannot be obtained otherwise and has been requested of, and denied by, the person or entity which, for whatever reason, cannot be a defendant in subsequent litigation.

2. Did the District Court err in dismissing appellant’s complaint for an equitable bill of discovery pursuant to Rule 12(b)(6), M.R.Civ.R?

It is clear from our holding as to the limited availability of an equitable bill of discovery that Mr. Temple’s complaint does not meet the requirements for such an equitable bill. In particular, all of the information sought by Mr. Temple is sought from the very entities which are potential defendants in subsequent litigation. Of equal or greater importance, the information sought is, to a large extent, much broader than we have concluded is appropriate in an equitable bill. Finally, the showing of unavailability otherwise and request and denial are absent. It remains appropriate to address Mr. Temple’s Rule 11 arguments as they relate to his complaint.

Mr. Temple argues that he cannot file a complaint against Chevron, Industries and Manville, and thereafter conduct discovery, because of Rule ll’s requirement of certification that the complaint is grounded in fact; this is so, he asserts, because the information he needs to make such a certification is within the exclusive control of these very entities. While this argument has some surface appeal, it does not bear up under scrutiny.

First, Rule 11 states only that a signature constitutes certification that “to the best of the signer’s knowledge, information and belief formed after reasonable inquiry it is well grounded in fact... and that it is not interposed for any improper purpose... .’’All the Rule requires is that a party make reasonable inquiry and then certify based on knowledge, information and belief. Here, it appears from responses by Mr. Temple’s counsel during oral argument that little or no inquiry was made prior to filing the equitable action asserting that all of the information needed is within the exclusive control of the named defendants. Most notably, he did not obtain reports concerning the accident from the state or federal safety regulatory body having jurisdiction over the accident. Such reports may include a wealth of information with regard to such things of interest to Mr. Temple as safety responsibility at the mine and the train which ran over him.

Next, as recognized by the language of the Rule itself, Rule 11 does not require a guarantee or certification that every detailed fact has been thoroughly investigated and proved to be correct. Neither the Rule nor our cases supports Mr. Temple’s premise that he would face sanctions under the Rule were he to file a “knowledge, information and belief’ complaint “after reasonable inquiry.” Rule 11 sanctions have been imposed sparingly in Montana and only where a party has failed to make reasonable inquiry into the facts and law and, thus, has failed to meet the objective reasonableness standard. See Bee Broadcasting Assoc. v. Reier (1989), 236 Mont. 275, 769 P.2d 709. Furthermore, while we have affirmed sanctions in a case involving improper joinder of a party, we did so where “[ajbsolutely no legitimate purpose was served” in joining the party and the joinder was “ill-advised, frivolous, malicious and oppressive.” D’Agostino v. Swanson (1990), 240 Mont. 435, 784 P.2d 919. If reasonable inquiry produced a reasonable belief that a parent company or partners in a venture retained overall safety responsibility for a work site, it is inconceivable that a joinder of such parties would result in sanctions.

Indeed, it is common practice to join parent and partner companies in a complaint where a party is not certain at the outset which entity has ultimate responsibility for a particular incident but believes, after reasonable inquiry, that one or more of the entities is responsible. Discovery after the complaint is filed often produces the specific answer, after which nonresponsible parties can be dismissed. Nothing in the case before us suggests, much less mandates, a different procedure here. In the alternative, fictitious “Doe” pleading also is available to save meritorious causes of action where, despite reasonable diligence, the actual identity of culpable parties remains unknown or uncertain. Nurenberger v. Hercules-Werke v. Virostek (Nev. 1991), 822 P.2d 1100. These time-honored alternatives negate appellant’s Rule 11 argument and provide procedures which enable a plaintiff to commence an action; correspondingly, these alternatives permit a defendant to know what it must defend against and to rely on the protections afforded by the Montana Rules of Civil Procedure.

We hold that the District Court did not err in dismissing appellant’s complaint for an equitable bill of discovery pursuant to Rule 12(b)(6), M.R.Civ.P. Nothing herein should be interpreted to prohibit the filing by Mr. Temple of an equitable bill in accordance with the requirements of this opinion.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES HARRISON and WEBER concur.

JUSTICE TRIEWEILER

dissenting:

I dissent from the opinion of the majority.

The unfortunate employee in this case is seriously injured and caught in a maze of corporate unaccountability. Chevron, under one corporate name, owned the mining operation where he worked. Chevron, under another corporate name, managed the mining site. Chevron, under a third corporate name, employed him. He does not know how he was injured, he does not know why he was injured, and he does not know which form of Chevron was responsible for making the place of his injury a safe place to work.

For years, courts in this state and all over the country have been trying to discourage attorneys from filing frivolous complaints for damages without a factual basis. We have even adopted Rule 11 so that we can punish those who do. Now this Court has recognized a cause of action known as an equitable bill of discovery so that information beyond a person’s grasp can be made available when necessary. Any reasonable mind would conclude that the circumstances in this case are the exact circumstances for which an equitable bill of discovery is appropriate. However, that logic has apparently escaped the majority.

The majority opinion is also unfaithful to the authorities upon which it is based. It is correct that equitable bills of discovery were allowed in both Shorey v. Lincoln Pulp & Paper Co., Inc. (Me. 1986), 511 A.2d 1076, and Lubrin v. Hess Oil Virgin Islands Corp. (D.V.I. 1986), 109 F.R.D. 403. However, it is not correct that those results were premised on the fact that the defendants in those cases were employers who could not be sued for damages. Nor is it correct that the results in those cases were premised on the fact that only limited discovery was sought.

The rationale upon which the Lubrin decision was based applies directly to the circumstances in this case. In permitting the requested discovery, the Federal District Court in that case explained the plaintiff’s dilemma as follows:

It appears that, Lubrin will be unable to determine the manufacturer or supplier of the BTX cargo manifold and tank without HOVIC’s assistance. Since that assistance is not forthcoming, Lubrin is placed in a precarious position. Stated concisely, Lubrin must force a non-party in an anticipated tort suit to supply him with information he needs for determining whether a third-party may be liable for his injuries. Lubrin brought this action for the specific purpose of conducting this type of discovery. For the following reasons we find this tactic proper and will order an expedited discovery schedule.

Lubrin, 109 F.R.D. at 404.

In explaining its decision, the Federal District Court stated:

We note that a number of District Courts have reached the same conclusion and have recognized that rule 34(c), although not authorizing a court to order discovery of a nonparty, does not prohibit an independent action to obtain discovery. Reilly Tar Corp. v. Burlington N.R. Co., 589 F.Supp. 275, 278-79 (D.Minn. 1984) (case dismissed for lack of jurisdiction, however, the court was of the opinion that ancillary jurisdiction may properly be exercised in a discovery action seeking inspection of a nonparty’s land if the facts of a particular case so warrant); Wimes v. Eaton Corp., 573 F.Supp. 331 (E.D.Wis. 1983); Huynh v. Werke, 90 F.R.D. 447, 450 (S.D.Ohio 1981); Home Ins. Co. v. First Nat. Bank, 89 F.R.D. 485, (N.D.Ga. 1980). Most of these courts have characterized this independent action as similar to the antiquated instrument called an equitable bill of discovery. Reilly Tar Corp., at 278; Wimes, at 333-34; Home Ins. Co., at 488-89. This mechanism was used as the primary means of discovery prior to the advent of the Federal Rules of Civil Procedure in 1938. Wimes, 573 F.Supp. at 333-34. Although Lubrin did not style his complaint as an equitable bill for discovery, he does request equitable injunctive relief seeking the equivalent result. We therefore find our result in accordance with the few decisions which exist on this subject.

Lubrin, 109 F.R.D. at 405.

The defendant in Lubrin happened to be the plaintiff’s employer and could not be sued for damages. However, nothing in that opinion can be interpreted to suggest that the court’s conclusion was based upon the employer’s immunity from suit. The result was based upon the plaintiff’s inability to obtain the necessary information without filing an equitable bill of discovery.

Everything said about the Lubrin decision is equally true for the Shorey decision. Nowhere in its decision did the Maine court suggest that its result was premised on the employer’s immunity from suit. The Maine court very clearly stated that equitable bills of discovery are appropriate “when effective discovery cannot otherwise be obtained and the ends of justice are served.” Shorey, 511 A.2d at 1078.

Furthermore, the majority completely ignores numerous other decisions where equitable bills of discovery have been recognized in situations where the defendant was someone other than an employer. In Sunbeam Television v. Columbia Broadcasting System (S.D.Fla. 1988), 694 F. Supp. 889, the court held that an equitable bill of discovery would be permitted under Florida law when brought by the owner of a television station against a national network. Interestingly, in that case:

The Defendants assert that Florida law only allows a party to maintain a bill of discovery against a putative defendant and, therefore, because Plaintiff has asserted no potential claims against Defendants Perris and GEPMC, they are improperly joined.

Sunbeam, 694 F. Supp at 892.

The district court in that case responded that:

This is a gross overstatement of Florida law and internally inconsistent with the purpose of the bill — to ascertain, as a matter of equity who an injured party may sue and under what theory.

Sunbeam, 694 F. Supp at 892.

In Wolfe v. Massachusetts Port Authority (Mass. 1974), 319 N.E.2d 423, the Massachusetts Supreme Judicial Court allowed a motorist to file an equitable bill of discovery against the port authority to discover toll receipts gathered at a toll bridge.

In Investors Mortgage Insurance Co. v. Dykema (1984), 598 F. Supp. 666, the United States District Court for the District of Oregon allowed an equitable bill of discovery brought by a mortgage insurance company which sought entry upon two mortgagors’ property for the purpose of performing an appraisal. Interestingly, that case is also the only reported case where the party from whom discovery was sought objected on privacy grounds similar to those about which the majority expresses concern. However, in that case, the district court disposed of the privacy argument with the following conclusion:

Investors contends that the appraisals it seeks are vital to the outcome of the main action in this matter and cannot be obtained by any other means. The Dykemas and the Nielsens do not contest these allegations, but request that the court deny the relief sought on the basis that it would violate their right to privacy. While the constitution protects individuals from unwarranted intrusion into their homes, that protection is not without its limits and needs to be balanced with Investors’ right of access to the courts. The harm to these defendants in allowing an appraisal is minimal. The right of Investors to a full-blown hearing with all the facts is an essential part of full access to the courts and outweighs the Dykemas’ and Nielsens’ claims of privacy.

Investors, 598 F. Supp at 669.

The great majority of jurisdictions which have considered whether to allow an equitable bill of discovery have permitted it. Of those jurisdictions where an equitable bill of discovery is allowed, this Court has placed greater limitations on its use than any other jurisdiction I have found.

The majority’s reasons for those limitations have no practical basis in the real world.

In addition to limiting equitable bills of discovery to parties who cannot be later made a defendant, the majority has placed the following additional limitations on this cause of action:

1. The discovery is limited to names and addresses of potential defendants and on-site visits; and

2. The pleading commencing the action must show that prior request has been made.

Just how do you ask the defendant in an equitable bill of discovery for the names and addresses of potential defendants?

Surely any justice who thinks that a practical response would come from that kind of request has never participated in litigation where discovery was sought. This is a particularly impractical suggestion when the employer from whom discovery will be sought is simply one form of several interrelated corporations, one or more of whom may have been the party responsible for the plaintiffs injuries. Does the majority really think that one of these interrelated corporations is going to identify one of its sister corporations in response to a request for the identity of potential defendants in a lawsuit for damages?

Why should equitable bills of discovery be limited to on-site visits? Simply because that is the type of discovery that was sought in two of the cases which are relied on as authority for allowing an equitable bill of discovery? This limitation makes no sense. Other cases cited in this dissent allowed discovery of other types of information. The purpose of the bill of discovery is to enable a plaintiff to obtain relevant information which would otherwise be beyond his control. There is no rational basis for distinguishing one type of relevant information from another type of relevant information. Why is it more appropriate to allow him to visit an accident site than to see a copy of an accident investigation report which may explain the cause for his accident? This distinction makes no sense.

What practical purpose does it serve to require the plaintiff to allege that before filing his equitable bill of discovery he made a request that the defendant produce the information which is sought? The equitable bill of discovery is itself a request for that information. It includes a prayer for relief. The prayer for relief in this case sought copies of any investigative reports prepared by the defendants as a result of the plaintiff’s accident; records which would describe the relationship of the various defendants with regard to the operation of the Stillwater Mine; and any information in the defendants’ possession which would identify the manufacturer, distributor, and owners of the cars and engine which formed the train that ran over the plaintiff. This complaint was served on all of the defendants. They could have brought a complete and abrupt end to this litigation by simply providing the information which was requested. If they had provided the information, it would have been a complete defense to the plaintiff’s bill of discovery. To require the plaintiff to make a request for the material before this written request for the material exalts form over substance and imposes a meaningless, practical hurdle which provides absolutely no benefit to anyone.

The majority states in its opinion that, “[h]ere, it appears from responses by Mr. Temple’s counsel during oral argument that little or no inquiry was made prior to filing the equitable action ....”

I disagree with that characterization of remarks made during oral argument. Furthermore, there is absolutely nothing in this record to indicate what efforts the plaintiff did or did not make prior to filing this complaint. What we do know, is that in his complaint plaintiff alleged that the information which is necessary to his investigation is in the exclusive control of the defendants. For purposes of ruling on a motion made pursuant to Rule 12(b)(6), M.R.Civ.P., we assume those facts alleged in the complaint are true. Mogan v. City of Harlem (1987), 227 Mont. 435, 437, 739 P.2d 491, 492. If those facts are true, then no amount of inquiry short of that which was sought by the plaintiff’s complaint would discover those facts.

It is also incredible that the majority would suggest that its decision is justified based on the protection of constitutional rights. As pointed out previously, the only court to consider this issue in a constitutional context has found that an equitable bill of discovery does not violate a constitutional right to privacy. However, the majority’s constitutional rationale is particularly suspect.

The majority opinion concludes that it might offend the constitution for the plaintiff to file a petition for discovery and ask Chevron (in any of its several forms) for information about his accident. However, it also concludes that if he amended that petition and called it a complaint for damages by making some phony allegation that he believed the defendants were responsible for his damages, he could discover the very same information. What would be the constitutionally significant difference under those two circumstances? In both cases, the defendant is represented by counsel. In both cases, discovery is subject to the same rules of civil procedure. And in both cases, the defendant is afforded protection from the District Court where the discovery sought is unlikely to lead to the development of relevant information. I congratulate the majority on their sudden constitutional convictions. I question their elevation of Chevron’s right to be free from minor inconvenience to a place of greater constitutional importance than the plaintiff’s right of access to this State’s courts. Furthermore, if the majority was going to take this step it should have come up with better precedent than some loose language in a 49-year-old case that is admittedly not on point.

The foregoing comments relate to the injustice of this decision as it pertains to the plaintiff. However, the majority opinion is an equally significant disservice to responsible practitioners in this State. Rule 11, M.R.Civ.P., clearly provides that when an attorney signs a complaint he certifies that based upon a reasonable inquiry he has a belief that the complaint is well-grounded in fact. If it turns out that after signing such a certification, he has no information which would justify such a belief, both he and the person he represents are subject to substantial sanctions. If we are going to restore respect for our adversary system and the legal profession, we need to strictly enforce Rule 11, and not suggest that it is really meaningless.

In this case, the plaintiff has alleged in his complaint and his affidavit that he does not know how his accident happened, he does not know which of several interrelated corporations were responsible for providing him a safe place to work, and he does not know who was responsible for manufacturing and operating the train which ran over him. Furthermore, he has alleged that the defendants are in the exclusive control of that information. If, as we must assume, the defendants are in exclusive control of that information, and if the plaintiff is precluded from obtaining that information because of this decision, then how can he allege, without the benefit of this discovery, that after reasonable inquiry he knows that one of the defendants was responsible for his injuries. In language that defies reason, the majority suggests that there is a new form of complaint known as a “knowledge, information, and belief’ complaint filed “after reasonable inquiry.” If there is no factual basis known to the plaintiff for filing a complaint, what is a “knowledge, information, and belief’ complaint? This incredible word game engaged in by the majority totally eliminates Rule 11 as any meaningful deterrent to frivolous complaints. This opinion invites abuse of the judicial process and punishes the responsible actions taken by the plaintiff’s attorneys in this case. The majority suggests that “fictitious ‘Doe’ pleading also is available to save meritorious causes of action where, despite reasonable diligence, the actual identity of culpable parties remains unknown or uncertain.” That suggestion overlooks the fact that the plaintiff in this case does not know whether there is a meritorious cause of action, nor whether there are any culpable parties. All that the plaintiff does know is that one of several related forms of the Chevron companies, or their partner, has exclusive control of the information which would enable him to determine whether he has a cause of action. Afictitious “Doe” pleading has absolutely no relevancy to the circumstances in this case.

The majority opinion uses terms like “knowledge, information, and belief’ complaint, and fictitious “Doe” pleading in totally inappropriate ways. The former will now surely show up in future cases as if it actually meant something. Those cases will probably result when these same corporate defendants successfully seek the imposition of sanctions on the first plaintiff who relies on this new kind of pleading. The latter was never intended for circumstances such as exist in this case, and will surely cause some unsuspecting attorney’s misfortune if he or she relies on the misguided advice of the majority opinion.

By encouraging people in the plaintiff’s position to make uninformed allegations of wrongdoing just so that they can gather information that ought to be given to them as a matter of common decency, this Court has forfeited the moral authority to sanction anyone in this state for violations of Rule 11. That is indeed an unfortunate situation which will poorly serve both the legal profession and the judiciary in the future.

For these reasons, I dissent from the opinion of the majority.

JUSTICE HUNT joins in the foregoing dissent of JUSTICE TRIEWEILER.

JUSTICE McDONOUGH

concurring and dissenting.

I concur that an equitable bill of discovery is cognizable under Montana law. Such bill should be properly pleaded and include an allegation that request for the necessary information has been made from the parties named as defendants in the complaint and that information has not been provided pursuant to such request. However, in this instance I would not dismiss due to this insufficiency because this appeal is one of first impression and it is obvious that respondents resisted discovery.

I respectfully dissent from the majority as to the other restrictions imposed in its opinion. Courts of equity are not bound by cast-iron rules. The governing rules of equity are flexible and adopt themselves to the exigencies of the particular case. See Dutton, Mollenberg v. Rocky Mtn. Phosphates (1968), 151 Mont. 54, 438 P.2d 674. A myriad of fact situations can arise where the imposition of such a restriction or restrictions would be inequitable. Complaint for discovery should be permitted to be reasonably brought and proved. However, once the need for discovery is established, the scope and methods of limited discovery should be conducted under the direction of the court.

If evidence of the need is submitted to the satisfaction of the court, then with the court’s permission upon proper showings, a party may make discovery which would be the least cumbersome, intrusive and expensive to the parties. This would satisfy the constitutional requirements of the right of access to the courts contained in Article II, Section 16, the requirements and the prohibition against unreasonable searches and seizures under Article II, Section 11, and the right of privacy under Article II, Section 10 of the Montana Constitution of 1972.


source: Caselaw Access Project

author: JUSTICE GRAY

license: Public Domain

text:
    EDWARD B. STANFORD, BETH STANFORD, NANCY H. STANFORD, Personal Representative of the Estate of Neal A. Stanford, Deceased; and REAS MADSEN, Plaintiffs and Respondents, v. ROSEBUD COUNTY, MONTANA, et al., including EARL M. CRANSTON and RICHARD C. HOEFLE, Defendants and Respondents, and BOYD KINCHELOE and MAVIS KINCHELOE, husband and wife, Defendants and Appellants.
    No. 92-190.
    Submitted on briefs Aug. 20, 1992.
    Decided Sep. 22, 1992.
    Rehearing Denied Nov. 5, 1992.
    49 St.Rep. 828.
    839 P.2d 93.
    254 Mont. 474.

      For Defendants and Appellants: Robert C. Smith and John J. Cavan, Cavan, Smith, Grubbs & Cavan, Billings.
    For Plaintiffs and Respondents: James P. Healow, Sweeney & Healow, Billings, and Joseph W. Sabol, Bozeman.
   JUSTICE GRAY

delivered the Opinion of the Court.

Appellants Boyd and Mavis Kincheloe appeal from an order of the Sixteenth Judicial District Court, Rosebud County, denying their Motion to Amend and Supplement their pleadings. We affirm.

The sole issue on appeal is whether the District Court abused its discretion in denying appellants’ motion to amend their pleadings.

The facts in this case are set forth in our opinion in Stanford v. Rosebud County (1991), 251 Mont. 128, 822 P.2d 1074. Litigation over the disputed royalty interest began with an interpleader action in the federal district court in Billings, Montana, in 1978. On destruction of diversity jurisdiction, that action was removed to the Sixteenth Judicial District, Rosebud County where it subsequently was consolidated with this action by plaintiffs/respondents Stanford. The litigation has proceeded, albeit intermittently, since that time.

The procedural events relevant to the issue before us begin with the District Court’s scheduling conference on March 21, 1989, at which the case was set for trial on January 9,1990. After a subsequent hearing on various motions by the parties, the District Court entered an order which, in pertinent part, directed the parties to file a statement of their claims, “setting forth all right, title and interest they claim in and to the remaining 3.125% royalty interest.” The parties’ statements of claim were filed by September 18,1989. Appellants claimed title to a 75% proportional share in the royalty interest based on their underlying mineral interest.

Appellants subsequently moved for, and were granted, summary judgment on their claim. We reversed on appeal on December 16, 1991. After denial of appellants’ petition for rehearing, the case remitted to the District Court on January 15, 1992.

Appellants moved to amend their pleadings on January 17, 1992, to add a new theory of recovery based on constructive trust. Respondents Hoefle and Cranston moved to join a real party in interest on February 3,1992. The District Court granted respondents’motion on March 13, and denied appellants’ motion on March 30, 1992.

Did the District Court abuse its discretion in denying appellants’ motion to amend their pleadings?

The District Court denied leave to amend based on its 1989 order mandating statements of all claim, the length of time the case had been pending, and the lack of a showing of good cause why the claim appellants sought to assert was not raised prior to the summary judgment ruling. Appellants contend that the court abused its discretion.

Appellants rely on Rule 15, M.R.Civ.P., which requires that leave to amend be freely granted. They cite Village Bank v. Cloutier (1991), 249 Mont. 25, 813 P.2d 971, for the proposition that refusal to allow an amendment offered at an opportune time and necessary in the furtherance of justice is an abuse of discretion.

It is axiomatic that Rule 15, M.R.Civ.P, requires that leave to amend be freely given when justice so requires. Our cases in support of liberality in allowing amendments are so numerous and well-settled as to require no recitation here. In the case before us, the significant fact is that appellants’ motion was made after this Court held that they had established no claim to title. Appellants’ argument is that, even after judgment against them, they are entitled to amend under the liberality doctrine. Acceptance of this argument essentially would revise Rule 15 to require leave to amend at any time and remove all discretion from the district courts. Neither the Rule nor our cases support such a result.

In addition, while appellants correctly state the principles regarding liberality in allowing amendments to pleadings from Cloutier, they fail to take into account the facts of that case. In Cloutier, defendants moved to amend; for the most part, the amendments sought to redesignate as defenses matters originally pleaded as counterclaims. The district court did not rule on the motion. Some five months later, the district court entered summary judgment against defendants on the basis of their original pleading. We reversed, concluding that the court abused its discretion in refusing to permit amendments offered at an opportune time and resulting in little, if any, prejudice to plaintiff. Cloutier, 249 Mont. at 28, 813 P.2d at 973.

The facts before us differ significantly from those in Cloutier. In August, 1989, the District Court directed the parties to file statements of claim setting forth all right, title and interest to the disputed royalty. Appellants’ statement of claim did not assert the constructive trust theory they now seek to add. At no time prior to their motion for summary judgment did appellants seek leave to amend; instead, they successfully proceeded to summary judgment on their asserted claim in the District Court. Only after reversal of that judgment, based on a conclusion by this Court that appellants failed to demonstrate any claim to title whatsoever, did appellants attempt to assert — for the first time in this litigation which has been ongoing for nearly fourteen years — a claim based on a constructive trust theory. Under these facts, there is nothing “opportune” about the timing of appellants’ motion for leave to amend.

Appellants also rely on other Montana cases which they assert support their entitlement to amend their pleadings: Priest v. Taylor (1987), 227 Mont. 370, 740 P.2d 648; White v. Lobdell (1984), 208 Mont. 295, 678 P.2d 637; Prentice Lumber Co. v. Hukill (1972), 161 Mont. 8, 504 P.2d 277. None of these cases involved an effort to amend pleadings after the party had lost on its original claim.

Appellants’ final argument relates to the fact that the District Court allowed respondents Stanford to amend to add a real party in interest after our Stanford decision, while denying their motion to amend. We need note only briefly that the two situations are not analogous. Other differences aside, judgment has not been entered against the Stanfords on their claims.

Appellants have cited no authority for the proposition that, under Rule 15 and the liberality doctrine, they are entitled to amend their pleadings when the motion to amend is made after judgment has been entered against them and that denial of such a motion constitutes an abuse of discretion. Indeed, both common sense and authority are to the contrary. The result contended for would allow seriatim assertion of claims. Under such a process, one of the important thrusts of the rules of civil and appellate procedure — that actions contain all related claims and parties in order that cases proceed in an orderly and expeditious manner to final judgment —■ would be completely undone. The detriment to parties litigant, as well as the burden such a process would place on Montana courts, cannot be overstated.

The Ninth Circuit Court of Appeals addressed these matters in Nguyen v. United States (9th Cir. 1986), 792 F.2d 1500. It cited C. Wright, A. Miller & M. Kane, Federal Practice and Procedure, § 2712 (2d ed. 1983) for the general rule that “a court ordinarily will be reluctant to allow leave to amend to a party against whom summary judgment has been entered ....” Nguyen, 792 F.2d at 1503. It went on to note that,

[m]uch of the value of summary judgment procedure in the cases for which it is appropriate ... would be dissipated if a party were free to rely on one theory in an attempt to defeat a motion for summary judgment and then, should that theory prove unsound, come back long thereafter and fight on the basis of some other theory.

Id., citing Freeman v. Continental Gin Co. (5th Cir. 1967), 381 F.2d 459, 469-70. We agree with the Ninth Circuit’s reasoning. We conclude that the rationale is equally applicable to the reverse situation before us, involving a party affirmatively moving for summary judgment on its pleaded theory of the case and then, ultimately having been unsuccessful, seeking to inject a new theory of recovery via a post-judgment motion to amend pleadings. Indeed, faced with this precise situation, the Fifth Circuit Court of Appeals cogently summarized as follows:

A busy district court need not allow itself to be imposed upon by the presentation of theories seriatim. Liberality in amendment is important to assure a party a fair opportunity to present his claims and defenses, but “equal attention should be given to the proposition that there must be an end finally to a particular litigation.”

Freeman, 381 F.2d at 469 (citation omitted).

Under the facts before it, the District Court exercised its discretion to deny appellants’motion to amend their pleadings based on the time at which the motion was made and the lack of a showing of good cause why the claim appellants sought to assert was not raised prior to the summary judgment ruling. We hold that the District Court did not abuse its discretion.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES HARRISON, McDONOUGH and WEBER concur.


author: JUSTICE WEBER

text:
    DAUGHERTY CATTLE CO., a partnership consisting of EMERALD DAUGHERTY, WILLIAM DAUGHERTY, JOHN DAUGHERTY, JR., EMERALD DAUGHERTY, WILLIAM EARL DAUGHERTY, and JOHN EMERALD DAUGHERTY, SR., Plaintiffs and Respondents, v. GENERAL CONSTRUCTION COMPANY, a North Dakota corporation, formerly known as MEYER CONSTRUCTION CO., and doing business in Montana as GENERAL CONSTRUCTION COMPANY OF NORTH DAKOTA, Defendant and Appellant.
    No. 92-029.
    Submitted on briefs June 25, 1992.
    Decided Sep. 22, 1992.
    49 St.Rep. 820.
    839 P.2d 562.
    254 Mont. 479.

      For Defendant and Appellant: Stewart R. Kirkpatrick, Murphy & Kirkpatrick, Billings.
    For Plaintiffs and Respondents: Allan Karrell and John Bohyer, Crowley, Haughey, Hanson, Toole & Dietrich, Billings.
   JUSTICE WEBER

delivered the Opinion of the Court.

Defendant, General Construction Company, appeals from the summary judgment ruling of the District Court of the Thirteenth Judicial District, Yellowstone County, in favor of plaintiffs. We affirm.

The issues for our review are:

1. Whether the District Court erred by refusing to consider reasonable rental value of the property subject to a land contract for purposes of computing damages upon foreclosure by the seller.

2. Whether Montana’s anti-forfeiture statute, § 28-1-104, MCA, applies to prohibit the seller from declaring a forfeiture when the purchaser tenders a portion of the property back to the seller as “full compensation” for the balance owing on the contract.

On February 13, 1981, Meyer Construction Company, a predecessor company of defendant General Construction Company (General), and the plaintiffs Daugherty Cattle Co., a partnership consisting of Emerald Daugherty, William Daugherty and John Daugherty, Jr.; Emerald Daugherty; William Earl Daugherty; and John Emerald Daugherty, Jr. (Daugherty), as sellers, entered into a written contract for deed for the sale and purchase of real property located on the outskirts of Billings in Yellowstone Comity, Montana. The purchase price of the property was $1,195,000.00 plus interest at the rate of nine percent per annum. General and its predecessor made annual payments as scheduled until 1987, when the contract was amended. On July 8,1987, General and Daugherty agreed to revise the payment schedule and reamortize the unpaid principal of $422,500.00. The amendment lowered the payments and split them, with interest payments (continuing at nine percent) and principal payments due on different dates during the year. The contract also recited the name change from Meyer Construction Company to General Construction Company.

General continued to make payments as scheduled until 1989, when General failed to pay the scheduled payment due on July 15, 1989. On October 10,1989, Daugherty sent by certified mail a written notice of default giving General thirty days within which to make payment, as required by the contract. In early November, 1989, Daugherty extended the default period for sixty days beyond November 9, 1989.

On January 8, 1990, General made an “offer of performance” in writing, which General considered to be full performance and compensation under the contract. In its offer, General offered to convey back to Daugherty an 85-acre portion of the property (approximately 47% of the land covered by the contract) together with payments already made totalling $1,273,290.00, in return for termination of the contract and retention of the remaining 53% of the land. This would have left Daugherty with the portion of the land it had leased back from General as farmland since 1981 and would have left General with the portion on which it mined gravel for construction purposes.

On January 31, 1990, also pursuant to the contract, Daugherty sent by certified mail a “Notice of Continued Default and Acceleration of Remaining Purchase Price,” notifying General that it was accelerating the entire contract balance and giving General thirty days to pay the accelerated balance in full. Again General failed to make any payment on the contract. Daugherty, electing to terminate the contract, sent to General a “Notice of Termination of Contract for Deed” dated July 18, 1990.

General refused to execute special warranty deeds to reconvey the property to Daugherty and refused to deliver possession to Daugherty to effect the termination of the contract. Daugherty filed this action to quiet title and to obtain possession of the property.

The District Court granted Daugherty’s motion for summary judgment on the quiet title and ejectment claims, rejected General’s claim that termination and forfeiture were not enforceable remedies under the contract and allowed Daugherty to retain all monies previously paid by General and its predecessor. The District Court refused to apply Montana’s anti-forfeiture statute, § 28-1-104, MCA, because General’s tender of a portion of the property did not constitute “full compensation” as required by the statute. From this judgment, General appeals.

I.

Did the District Court err by refusing to consider reasonable rental value of the property subject to a land contract for purposes of computing damages upon foreclosure by the seller?

The appellant, General, contends that there are genuine issues of fact and that evidence relating to these factual issues should have been introduced into evidence at a trial. Specifically, General claims that a clause included in the parties’ contract requires the court to determine the relationship between payments retained and actual damages suffered by Daugherty and to determine whether the retention of contract payments constitutes a penalty rather than damages. The pertinent clause is underlined in the following excerpt from Paragraph 5 of the contract for deed:

(1) If Buyer fails to cure such default or breach within the aforesaid 30 day period, the Seller may then declare the outstanding balance of the purchase price together with all other unpaid obligations of the Buyer undertaken in this contract due and payable within an additional 30 days. If the outstanding balance of the purchase price together with all other unpaid obligations of the Buyer are not paid within the second 30 day period, the Seller may either:

(a) declare this contract terminated. In the event of such termination, Buyer agrees on demand to surrender possession of the property, and any improvements thereon immediately and peaceably, and to execute and deliver such instruments as Seller may require to evidence of record the termination of this contract and Buyer’s interest in the contract and real property, and Seller may retain all payments made hereunder as reasonable rental for the use of the property and as liquidated damages, ... (Emphasis supplied.)

General claims there is no evidence that the damages Daugherty recovered have any relationship to the actual damages suffered by Daugherty. General has made payments of principal and interest totalling $1,242,447.50 on the original contract amount of $1,195,000.00. The amounts applied to principal total $857,000.00, leaving a principal balance of $338,000.00. General farther claims that liquidated damages must bear a reasonable relationship to the actual damages or such damages will constitute an invalid penalty. Daugherty contends that the language quoted above from Paragraph 5 of the contract is neither ambiguous nor uncertain in any sense and maintains that to accept General’s argument would essentially convert the contract from a purchase agreement to a lease, as noted by the District Court.

We agree with the District Court’s assessment relating to the result which would ensue if we were to depart from longstanding interpretation of land sale contract provisions. In effect, the result would be to rescind the contract at the whim of the defaulting purchaser whose wrongdoing caused the vendor to terminate the contract.

Long ago, in Cook-Reynolds Co. v. Chipman (1913), 47 Mont. 289, 133 P. 694, the defendant made a similar argument against a forfeiture of a contract for deed. This Court noted that in an action to terminate the contract for breach, “the remedies afforded by the contract will be enforced unless they impinge upon other rules of equity or law.” Cook-Reynolds, 133 P. at 697. In Cook-Reynolds and subsequent forfeiture cases, this Court has consistently upheld contract provisions such as the clause in Paragraph 5 which allows the seller to retain all payments “as reasonable rental for the use of the property and as liquidated damages.” See, e.g., Joy v. Little (1960), 138 Mont. 110, 354 P.2d 1035; and Erickson v. First Nat’l Bank of Minneapolis (1985), 215 Mont. 350, 697 P.2d 1332.

At the time of contracting, Daugherty and General’s predecessor agreed that the payments already made under the contract terms at the time of a default by the purchaser would be reasonable rental and proper liquidated damages. General contends that Erickson, 697 P.2d at 1338, requires a court to hear evidence of a reasonable relationship between the actual damage suffered and the liquidated damage claimed. In Erickson, the trial court found that the reasonable rental of the property was $114,750.00. The purchaser had paid only $154,751.67 on an $800,000.00 contract and had been in possession of the property for over a year and a half. The trial court found that the amount forfeited was reasonable, a finding this Court affirmed, noting that, “[s]urely Starhaven did not intend that it should remain in possession for so long and pay nothing for the use of the property.” Erickson, 697 P.2d at 1338. Erickson, however, does not require a judicial determination that the amount forfeited was a reasonable rental.

Section 28-2-721, MCA, allows parties to a contract to agree to damages in advance of a breach:

When provision fixing liquidated damages valid ....
(2) The parties to a contract may agree therein upon an amount which shall be presumed to be an amount of damage sustained by a breach thereof when, from the nature of the case, it would be impracticable or extremely difficult to fix the actual damage.

General argues that this statute, when applied to the facts of this case, clearly shows that the actual damages have no relationship to the liquidated damages and therefore the contract terms should be invalidated. The District Court ruled that plaintiff was not required to return to the defendant the difference, if any, between the amount paid by the defendant and what evidence would show the reasonable rental value of the land to have been. In pertinent part the District Court stated:

The later Montana case of Burgess v. Shiplet, 230 Mont. 387, 750 P.2d 460 (1988) involved a default by a purchaser in contract payments. The Montana Supreme Court ordered forfeiture of all amounts paid by the purchaser and termination of the contract. There was no consideration of a reasonable rental value during the period of the buyer’s holding of the property .... The court stated at 230 Mont. 390:
“When a purchaser enters into a contract for deed with a seller, he or she runs the risk of defaulting on the required payments and facing the consequences of losing the property along with forfeiting the amount already paid. If this produces a harsh or unwanted result, it is for the legislature to remedy and not the job of this Court to change the plain meaning of the contract.”

Later the Court stated:

“The default provisions under the contract for deed spells [sic] out the remedies available to appellants.”

After a further discussion, the District Court concluded that plaintiff and defendant entered into this contract with explicit default language which allows the relief requested by the plaintiff and that the court should not interpret the contract to be an involuntary lease. We agree with the analysis and conclusion of the District Court.

We hold that the District Court did not err by refusing to hear evidence relating to the reasonable rental value of the property subject to the land contract for purposes of computing damages.

II.

Does Montana’s anti-forfeiture statute, § 28-1-104, MCA, apply to prohibit the seller from declaring a forfeiture when the purchaser tenders a portion of the property back to the seller as “full compensation” for the balance owing on the contract?

Section 28-1-104, MCA, provides:

Relief from forfeiture. Whenever by the terms of an obligation a party thereto incurs a forfeiture or a loss in the nature of a 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.

In order for § 28-1-104, MCA, to apply, the party requesting relief from forfeiture must tender full compensation to the vendor as a condition precedent to relief. Sun Dial Land Co. v. Gold Creek Ranches, Inc. (1982), 198 Mont. 247, 251, 645 P.2d 936, 939.

General contends that its offer to reconvey 47 percent of the land to Daugherty, at a time when General was in default and during a period which was a 60-day extension of the time to cure the default, constituted “full compensation” as required by § 28-1-104, MCA. In Eigeman v. Miller (1987), 229 Mont. 28, 32, 745 P.2d 320, 323, this Court reversed the district court’s conclusion that the purchasers proved their right to relief under the anti-forfeiture provision without tendering full compensation of the entire remaining contract balance. We have repeatedly required the defaulting party under a contract for deed to tender the entire outstanding principal balance in order to obtain relief from forfeiture in equity. See, e.g., Sharp v. Holthusen (1980), 189 Mont. 469, 616 P.2d 374 (defendants tendered entire amount due plus personal fees, expenses and attorney fees of plaintiff to date); and Parrot v. Heller (1976), 171 Mont. 212, 557 P.2d 819 (tendering entire contract balance plus interest prevented forfeiture). “The anti-forfeiture statute allows the defendants to make full payment of interest and attorney fees for the default, and allows the contract to be enforced.” Sharp, 616 P.2d at 378. General’s tender of 47 percent of the property in exchange for Daugherty’s cancellation of the remainder owed on the contract was at best an offer to modify the contract — an offer not accepted by Daugherty. It falls short of the full compensation required under § 28-1-104, MCA, which is the entire principal balance plus interest. General’s offer of performance was a last ditch effort to hold on to a portion of the property by voluntarily forfeiting 47 percent of the property at a time when Daugherty, if the default was not cured, could soon claim 100 percent of the land. General’s offer of performance is not full compensation of the sort contemplated under Montana’s anti-forfeiture statute.

We hold that Montana’s anti-forfeiture statute, § 28-1-104, MCA, did not prohibit the seller from declaring a forfeiture when the purchaser tendered a portion of the property back to the seller. Such offer of performance was not full compensation for the remaining balance of the contract price.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES HARRISON, GRAY and HUNT concur.


author: JUSTICE HARRISON

text:
    THOMAS BAETA, Claimant and Appellant, v. DON TRIPP TRUCKING, Employer, and STATE COMPENSATION MUTUAL INSURANCE FUND, Defendant and Respondent.
    No. 92-041.
    Submitted on briefs July 30, 1992.
    Decided Sept. 22, 1992.
    49 St.Rep. 824.
    839 P.2d 566.
    254 Mont. 487.

      For Claimant and Appellant: Rex Palmer, Missoula.
    For Defendant and Respondent: Michael Prezeau, Garlington, Lohn & Robinson, Missoula.
   JUSTICE HARRISON

delivered the Opinion of the Court.

This is an appeal from the Workers’ Compensation Court, the Honorable Timothy W. Reardon presiding. The Workers’ Compensation Court determined that claimant Thomas Baeta was entitled to $46,825 in benefits and an award of reasonable attorney’s fees and costs pursuant to §§ 39-71-612 and -614, MCA (1985). The court denied Baeta’s request for attorney’s fees and costs incurred in litigating the fee and cost issue. Baeta now appeals from that judgment. We affirm.

The issues are:

1. Did the Workers’ Compensation Court err in limiting State Compensation Mutual Insurance Fund’s (State Fund) liability for attorney’s fees and costs incurred in litigating the claim for workers’ compensation benefits?

2. Did the court err in denying attorney’s fees and costs incurred in litigating the fee and cost issue?

Baeta injured his shoulder when he fell while working in the scope and course of his employment as a truck driver. At the time of the injury his employer, Don Tripp Trucking, was enrolled under Plan III of the Montana Workers’ Compensation Act, and State Fund was the compensation carrier. State Fund accepted liability for compensation, but disputed the extent of Baeta’s entitlement. When the parties could not reach a settlement, Baeta filed a Petition for Hearing in the Workers’ Compensation Court in January 1990.

Baeta claimed his circumstances entitled him to 500 weeks of benefits at the maximum allowable rate of $149.50 per week for a total of $74,750 even though the maximum statutory entitlement was $41,860 (280 weeks at $149.50 per week). State Fund offered to settle the claim for $30,000. Baeta rejected the offer and filed his petition with the court. At the time of trial, State Fund had paid $18,388.50 as a partial lump sum payment.

In April 1991, the court entered its Findings of Fact, Conclusions of Law and Judgment, ruling that Baeta was entitled to $46,825 in permanent partial disability benefits with credit to State Fund for the $18,388.50 previously paid. Because the award exceeded the amount paid or tendered by State Fund to that point, the court also ruled that claimant was entitled to attorney’s fees and costs pursuant to §§ 39-71-612 and -614, MCA (1985).

Baeta’s attorney, Rex Palmer, then submitted an affidavit containing a claim in the amount of $20,566 for attorney’s fees (205.66 hours at $100 per hour) and $4,033.23 for costs. State Fund objected to the statement of hours and costs and requested an evidentiary hearing. On June 28,1991, State Fund offered to settle the entire fee and cost issue for $16,500. Baeta rejected this offer. He also requested an additional award of attorney’s fees and costs for litigating the fee and cost issue. As of July 23, 1991, State Fund had tendered $10,000 in payment of attorney’s fees and $3,796.23 in costs.

In lieu of presenting live testimony at the evidentiary hearing, the parties deposed two practicing attorneys, both well established in the field of workers’ compensation, to render opinions regarding the time spent and the hourly rate claimed by Mr. Palmer. Baeta deposed John Whiston who devotes his workers’ compensation practice to claimants. Whiston opined that the hours spent and the hourly rate were reasonable. State Fund deposed P. Mars Scott who represents both claimants and insurers. He expressed doubt as to the need for all the time spent, but did not question the veracity of the time statements. Neither expert would give an opinion as to the reasonableness of the fee itself, feeling that was within the province of the court to decide.

Following the evidentiary hearing, the court awarded Baeta attorney’s fees in the amount of $12,500 (125 hours at $100 per hour) and $3,805.59 as reimbursement for all costs except telephone and copying expenses.

I

Did the Workers’ Compensation Court err in limiting State Fund’s liability for attorney’s fees and costs incurred in litigating the claim for workers’ compensation benefits?

The statutes in effect at the time the injury occurs govern the determination of workers’ compensation benefits and attorney’s fees. Caldwell v. Bechtel Power Corp. (1987), 225 Mont. 423, 425, 732 P.2d 1352, 1354. As Baeta’s injury occurred on October 25, 1986, the 1985 statutes govern. The pertinent sections of the 1985 statutes stated:

Section 39-71-612, MCA (1985):

Costs and attorneys’ fees that may be assessed against an employer or insurer by workers’ compensation judge. (1) If an employer or insurer pays or tenders payment of compensation under chapter 71 or 72 of this title but controversy relates to the amount of compensation due, the case is brought before the workers’ compensation judge for adjudication of the controversy, and the award granted by the judge is greater than the amount paid or tendered by the employer or insurer, a reasonable attorney’s fee as established by the workers’ compensation judge if the case has gone to a hearing may be awarded by the judge in addition to the amount of compensation ....

Section 39-71-614, MCA (1985):

Calculation of attorney fees. (1) The amount of an attorney’s fee assessed against an employer or insurer under 39-71-611 or 39-71-612 must be based exclusively on the time spent by the attorney in representing the claimant on the issues brought before the workers’ compensation judge. The attorney must document the time spent and give the documentation to the judge. The judge shall determine a reasonable attorney fee and assess costs. He is not bound by the documentation submitted to him. The hourly fee the judge applies to the time spent must be based on the attorney’s customary and current hourly fee for legal work performed in this state The Workers’ Compensation Court did in fact apply these statutes. Baeta, however, argues that the court applied them improperly in this case. Section 39-71-614, MCA (1985), gives the court discretion in determining a reasonable fee. Worts v. Hardy Construction Co. (1991), 249 Mont. 477, 483, 817 P.2d 231, 235. This Court will not interfere with a determination of reasonable attorney’s fees absent a showing that the Workers’ Compensation Court has abused its discretion. Worts at 483, 817 P.2d at 235. The question here is whether the Workers’ Compensation Court abused its discretion in determining that $12,500 was a reasonable fee in this matter.

Baeta argues that under § 39-71-614 the court is only to determine the number of hours spent by the attorney and then multiply that by the attorney’s hourly rate. The intent of § 35-71-614, however, was to specify that the reasonable fee awarded by the court was to be based on an hourly basis rather than a contingency basis. Senate Judiciary Committee Hearing on House Bill 778, March 18, 22, and 28, 1985. The Legislature was responding to this Court’s holding in Wight v. Hughes Livestock Co., Inc. (1983), 204 Mont. 98, 664 P.2d 303, which created a strong presumption in favor of the reasonableness of a contingent fee contract. The purpose of the bill was to limit the employer’s or insurer’s obligation for attorney’s fees to an amount based on an hourly fee rather than a contingent fee. Hence § 39-71-614, MCA (1985), specifies that a fee “must be based exclusively on the time spent by the attorney...,” and that “[t]he hourly fee the judge applies to the time spent must be based on the attorney’s customary and current hourly fee for legal work performed in this state.” This language was intended to eliminate any question as to what the basis for the fee would be. See Gullett v. Stanley Structures (1986), 222 Mont. 365, 722 P.2d 619; Caldwell, 225 Mont. 423, 732 P.2d 1352.

Baeta argues that the wording of § 39-71-614 reduces the court’s job to simple mathematical calculation. However, he ignores the key-wording in the statute that clearly grants the judge discretion in determining a reasonable fee. Section 39-71-614, MCA (1985), also states that “[t]he attorney must document the time spent and give the documentation to the judge. The judge shall determine a reasonable attorney fee and assess costs. He is not bound by the documentation submitted to him.” (Emphasis added.) These sentences leave no doubt as to the discretion vested in the judge. They are mere surplusage if one follows claimant’s argument. As noted above, both parties submitted the deposition testimony of experienced attorneys in the workers’ compensation field. Mr. Whiston, for the claimant, expressed his opinion that the number of hours and the hourly rate were reasonable. Mr. Scott, for the insurer, questioned the necessity for all the time spent. Most notably, however, neither expert would offer an opinion as to the reasonableness of the fee, feeling that was wholly within the court’s province to decide. Mr. Whiston stated in his deposition:

I’m not here to testify whether the fee is reasonable. I think that that is the prerogative of the court. That’s a final determination, I think, that the court is going to have to make. I’m very uncomfortable preempting the court’s power to review that.

Mr. Scott made similar concessions in his deposition.

In addition to the expert testimony, the court considered the nature of the case itself. In its Order Awarding Attorney’s Fees the court stated:

This case is a straight forward “earning capacity” case. Evidence from physicians, vocational consultants and the claimant are the norm, not the exception. The file reflects no extraordinary discovery requests or demands and no particularly innovative procedural questions.
Such cases, for experienced counsel have resulted in time expenditures from less than fifty hours to well over one hundred. Invariably however, those cases requiring a greater expenditure of time, involve extensive discovery, disputes related to discovery such as protective orders or motions to compel discovery, etc. Such is not the case here.

Based on this, we hold that the Workers’ Compensation Court did not abuse its discretion in its award of attorney’s fees.

The next question is whether it abused its discretion in awarding costs. Not every litigation expense is recoverable. Luppold v. Lewis (1977), 172 Mont. 280, 292, 563 P.2d 538, 545. The trial court has broad authority in taxing costs. See Cash v. Otis Elevator Co. (1984), 210 Mont. 319, 333, 684 P.2d 1041, 1048. Section 25-10-201, MCA, lists the costs that may be allowed:

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, including mileage, or referees and other officers;
(2) the expenses of taking depositions;
(3) the legal fees for publication when publication is directed;
(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 diem or for copies;
(6) the reasonable expenses of printing papers for a hearing when required by 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.

Only those costs expressly stated in this statute may be charged to the opposing party unless they are allowed by a more specialized statute, by stipulation of the parties, or by rule of court. Thayer v. Hicks (1991), 243 Mont. 138, 158, 793 P.2d 784, 796-797 (citing Luppold). Like Baeta, the respondent in Luppold argued that another section of the code, § 89-1015, RCM (1947), expressly provided for taking the costs out of § 93-8618, RCM (1947) (recodified as § 25-10-201, MCA). The court noted that in order for a statute to qualify as an ‘“express provision of law’” it must “address the issue of what is an allowable ‘cost’ and ‘disbursement’.” Luppold at 292, 563 P.2d at 545. The corut held that § 89-1015, RCM (1947), determined who paid the costs; it did not determine what were allowable costs.

Baeta argues that § 39-71-612, MCA (1985), takes this case out of § 25-10-201. However, § 39-71-612 only grants the Workers’ Compensation judge discretion to award the claimant fees and costs. It does not address the issue of what those costs are.

Baeta also argues that the “net recovery” concept of Wight mandates an award of all costs in a workers’ compensation case. However, he fails to present any authority, and this Court has found none, that automatically grants a claimant all of his or her costs. A claimant, like any other party, is still subject to the mandates of § 25-10-201, MCA, and the court’s authority to tax costs. There can be no question that even under the “net recovery” concept, the court has discretion in determining fees. The same holds true for costs, subject to the mandates of § 25-10-201, MCA. We hold that the Workers’ Compensation Court did not abuse its discretion in its award of costs.

II

Did the District Court err in denying attorney’s fees and costs incurred in litigating the fee and cost issue?

In his Order Awarding Attorney’s Fees, Judge Reardon stated,

“[T]he Corut finds that the insurer is obligated, pursuant to sections 39-71-612 and 39-71-614, MCA, to pay claimant $12,500.00 in fees plus costs .... ” Baeta then filed a Motion for Clarification or in the Alternative to Alter or Amend, asking that the original order be clarified or that it be altered or amended to award fees and costs incurred in litigating the fee and cost issue. He relied on the discussion of the terms “tender” and “offer” in Hilbig v. Central Glass Co. (1991), 249 Mont. 396, 816 P.2d 1037, to argue that State Fund’s settlement offer of June 28, 1991, did not constitute a tender as required by § 39-71-612, MCA (1985). The court in its Order of Clarification Regarding Attorney Fees noted, “[T]he controversy is not over the ‘tender’ of compensation or the ‘... amount of compensation due ...’ as set forth in section 39-71-612, MCA, but rather the tender of a separate benefit, namely attorney fees paid by the insurer.” We agree. In construing the provisions of the Workers’ Compensation Act, “we must determine the plain meaning of the words used, interpreting the language in accordance with usual, ordinary and accepted meaning, and the intention of the Legislature should be gathered from the language therein.” Solheim v. Tom Davis Ranch (1984), 208 Mont. 265, 278, 677 P.2d 1034, 1041. It is clear that the term “compensation” as used in § 39-71-612, MCA (1985), does not include attorney’s fees. Therefore, we are not governed by the “tender/offer” semantics of Hilbig or the statute.

This Court has held that attorney’s fees and costs incurred in litigating the fee and cost issue are only recoverable on those issues on which the claimant prevails. Worts at 485, 817 P.2d at 236. In the instant case, we cannot see how claimant prevailed. In fact, he lost ground by forcing the Workers’ Compensation judge to decide the amount of fees and costs to be awarded. State Fund offered to settle for $16,500 over two months before the evidentiary hearing. The court ultimately awarded $16,305.59. We cannot see how Baeta prevailed on his claim for fees of $20,566 when the court determined a reasonable fee to be $12,500. The State Fund made a reasonable offer in light of the court’s ultimate award. Therefore, it should not be penalized under these facts.

In light of the foregoing, Baeta’s request for fees and costs of appeal are denied.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES McDONOUGH, GRAY and WEBER concur.


author: JUSTICE HUNT

text:
    N. DALE HERREID and MARLENE A. HERREID, Husband and Wife, Plaintiffs and Appellants, v. CLIFFORD S. HAUCK and SANDRA K. HAUCK, Husband and Wife, Defendants and Respondents.
    No. 92-037.
    Submitted on Briefs April 2, 1992.
    Decided October 15, 1992.
    49 St.Rep. 884.
    839 P.2d 571.
    254 Mont. 496.
    For Plaintiffs and Appellants: Lawrence H. Sverdrup, Sverdrup & Barnes, Libby.
    For Defendants and Respondents: David W. Harman, Libby.
   JUSTICE HUNT

delivered the opinion of the Court.

Appellants brought this action in the Nineteenth Judicial District Court, Lincoln County, to quiet title to a portion of Spruce Street which had been vacated by the City of Libby and Lincoln County. The District Court held that the Herreids were the owners of the south half of the vacated street and that the Haucks were the owners of the portion of the north half of the vacated street which abutted their properly.

We affirm.

Appellants raise two issues for our consideration:

1. Does Sec. 76-3-305, MCA, require that a vacated street revert to the adjacent property owner within the subdivision?

2. Does a vacated street which was a “right of use” only revert to the successors of the grantor of the “right of use”?

Additionally, respondents cross-appealed with the issue of whether they obtained ownership of the disputed property through adverse possession or prescriptive easement. However, the District Court did not address this issue in its order, and therefore, the issue will not be discussed in this opinion.

On April 18, 1952, George Hennessy executed a quitclaim deed to Lincoln County covering the vacated property. Lincoln County appeared in this action and disclaimed any ownership interest in the vacated property. All of such property was annexed by the City of Libby on October 2,1967.

The property in dispute is a portion of a 30-foot wide strip of Spruce Street that was vacated by the City of Libby pursuant to Ordinance 985 on October 3, 1977, abutting in part the real property of the respondents on the north and the real property of the appellants on the south, as shown below.

Since 1977, no one has paid property taxes on the abandoned portion of the Spruce Street strip, nor has the county assessed any property taxes since 1977 because the property has been listed as “exempt” for county and state property taxation.

In 1977, the City of Libby assessed the vacated Spruce Street property for lighting, road maintenance, and sprinkling. The city special assessments have been forwarded to the County Treasurer and placed on the real property tax rolls continuously since 1977. The method of the assessment by the City of Libby was to divide the vacated Spruce Street in half. The appellants were assessed on a square footage basis for the entire south 15 feet of the vacated street. Respondents and their neighbors have been assessed for the north one-half of the vacated street. Respondents have been assessed for the north one-half of the vacated street that extends beyond their east boundary. Respondents have paid their assessments to the City of Libby.

By stipulation, respondents have abandoned any claim to the following described property:

All that portion of vacated Spruce Street lying East of the following described line: Commencing at the South East corner of Lot 2, Block 4, Frary and Olson Addition to Libby Montana, thence south on a line parallel to the East line of Section 9, Township 30 North, Range 31 West RM.M. a distance of 15 feet, more or less, to a point on the center line of Spruce Street vacated by the city of Libby pursuant to Ordinance 985 on October 3,1977.

With these findings of fact, the District Comb ruled that the quitclaim deed executed by George Hennessy on April 18, 1952, was a grant of use and not a grant of title to the land. In addition, the District Court held that the fee in Spruce Street reverted to the abutting landowners, with each abutting landowner taking from the edge of his or her property to the center of the street. It is from this order that appellants appeal.

Does Sec. 76-3-305, MCA, require that a vacated street revert to the adjacent property owner within the subdivision?

Appellants argue that because they are the only abutting landowners from the original plat, the entire abandoned street reverts to them pursuant to Sec. 76-3-305, MCA. Section 76-3-305(1), MCA, states in pertinent part:

Any plat prepared and recorded as herein provided may be vacated either in whole or in part as provided by 7-5-2501, 7-5-2502, subsections (1) and (2) of 7-14-2616, 7-14-2617, subsections (1) and (2) of 7-14-4114, and 7-14-4115, and upon such vacation the title to the streets and alleys of such vacated portions to the center thereof shall revert to the owners of the properties within the platted area adjacent to such vacated portions.

We agree with the District Court that the statute is clearly dispositive as to the southern half of Spruce Street but does not deal directly with the disposition of the northern half of the street which abuts another subdivision. Because respondents’ property is not located within the Hennessy Plat nor the Amended Hennessy Plat, respondents would take nothing under Sec. 76-3-305, MCA. There are, however, some statutes and case law which will serve as light posts down this dark abandoned road.

We have stated that:

A highway which is lawfully vacated or abandoned ceases to be a highway and, insofar as the public has a mere easement of way, the title reverts to the owners of the fee discharged from the servitude.

Bailey v. Ravalli County (1982), 201 Mont. 138, 146, 653 P.2d 139, 143.

Section 70-16-202, MCA, states that an owner whose land is bounded by a road is presumed to own to the center of the road unless the contrary is shown. In addition, Sec. 70-20-307, MCA, explains that:

A transfer of land bounded by a highway passes the title of the person whose estate is transferred to the soil of the highway in front of the center thereof unless a different intent appears from the grant.

This Court interpreted the above statutes to mean that a boundary to and with the side of a street carries the fee to the center of the street unless a contrary intent appears from the deed. This Court also held that:

[U]pon abandonment that the fee in the street reverts to the abutting landowners, with each abutting landowner taking fee from the edge of his or her property to the center of the street.

Bailey, 653 P.2d at 143.

Although the quitclaim deed executed by George Hennessy denominated four strips of property, including the vacated street, as “right-of-way land” to Lincoln County, the deed is a normal quitclaim deed with the clear intent to transfer all right, title, and interest in the property to the county. When the county disclaimed any interest in the property, the abandonment of the street by the city was sufficient to transfer title to the abutting landowners. Therefore, we hold that the District Court did not err in ruling that upon the City of Libby’s abandonment of Spruce Street, that the fee in the street reverted to the abutting landowners, with each landowner taking fee from the edge of their property to the center of the street.

We need not discuss the second issue because of our holding above.

Affirmed.

JUSTICES GRAY, HARRISON, McDONOUGH and WEBER concur.